EX-99.1 2 pk-ex991_6.htm EX-99.1 pk-ex991_6.htm

 

Exhibit 99.1

 

 

 

Investor Contact

1775 Tysons Boulevard, 7th Floor

Ian Weissman

Tysons, VA 22102

+ 1 571 302 5591

www.pkhotelsandresorts.com

 

Park Hotels & Resorts Inc. Reports Second Quarter 2020 Results and Provides Operational Update

TYSONS, VA (August 5, 2020) – Park Hotels & Resorts Inc. (“Park” or the “Company”) (NYSE: PK) today announced results for the second quarter ended June 30, 2020 and provides an operational update on COVID-19.

 

Second quarter financial highlights include:

 

Pro-forma RevPAR was $7.85 a decrease of 95.9% from the same period in 2019;

 

Occupancy for Park’s 18 consolidated hotels open during the entirety of the second quarter was 20.8%;

 

Net loss was $(261) million and net loss attributable to stockholders was $(259) million;

 

Adjusted EBITDA was $(122) million;

 

Adjusted FFO attributable to stockholders was $(175) million;

 

Diluted loss per share was $(1.10); and

 

Diluted Adjusted FFO per share was $(0.75).

 

Additional highlights include:

 

Issued an aggregate $650 million of senior secured notes (“Senior Secured Notes”) and utilized the net proceeds to repay $219 million of the Company’s revolving credit facility (“Revolver”) and $69 million of the term loan the Company entered into in 2016 (“2016 Term Loan”). Park also repaid $100 million of the Revolver with existing cash;

 

Increased total liquidity by $300 million, from $1.3 billion as of March 31, 2020 to $1.6 billion as of June 30, 2020;

 

Amended the Company’s credit and term loan facilities to suspend all financial covenants through March 31, 2021 and exercised options to extend the Revolver maturity date to December 2021;

 

Amended certain mortgage loan agreements to defer interest and principal payments for three to six months and obtain temporary suspensions from required cash reserves;

 

Commenced the phased reopening of 20 of our previously suspended hotels, increasing the total number of hotels open to 42, or 53% of total room count; and

 

Continued to take proactive measures to preserve cash and improved Park’s baseline cash burn rate to approximately $65 million from its original estimate in March of $85 million per month assuming all hotels have suspended operations.

 

Thomas J. Baltimore, Jr., Chairman, President and Chief Executive Officer, stated, “Without a doubt, the last five months have been the most challenging period our industry has ever faced as we continue to deal with widespread fear and uncertainty over COVID-19.  Despite these headwinds, I am incredibly proud of the team’s proactive efforts, as we worked diligently alongside our partners to dramatically reduce operating expenses, while having the unwavering support from our lenders to help shore up our balance sheet.  The focus has since shifted to the recovery phase, as we thoughtfully and methodically work to safely reopen hotels.  While we cannot predict the path of the recovery, with $1.6 billion of liquidity available, Park remains well positioned to navigate the disruption from the COVID-19 pandemic.”

1

 


 

Selected Statistical and Financial Information

(unaudited, amounts in millions, except RevPAR, ADR and per share data)

 

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

 

 

2020

 

 

2019

 

 

Change(1)

 

 

2020

 

 

2019

 

 

Change(1)

 

 

Pro-forma RevPAR

 

$

7.85

 

 

$

192.94

 

 

 

(95.9

)%

 

$

72.06

 

 

$

184.50

 

 

 

(60.9

)%

 

Pro-forma Occupancy

 

 

6.1

%

 

 

85.9

%

 

 

(79.8

)% pts

 

 

33.9

%

 

 

81.8

%

 

 

(47.9

)% pts

 

Pro-forma ADR

 

$

127.65

 

 

$

224.59

 

 

 

(43.2

)%

 

$

212.45

 

 

$

225.47

 

 

 

(5.8

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pro-forma Total RevPAR

 

$

14.47

 

 

$

295.80

 

 

 

(95.1

)%

 

$

116.32

 

 

$

284.60

 

 

 

(59.1

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net (loss) income

 

$

(261

)

 

$

84

 

 

NM(2)

 

 

$

(950

)

 

$

181

 

 

NM(2)

 

 

Net (loss) income attributable to stockholders

 

$

(259

)

 

$

82

 

 

NM(2)

 

 

$

(947

)

 

$

178

 

 

NM(2)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

 

$

(122

)

 

$

207

 

 

NM(2)

 

 

$

(40

)

 

$

383

 

 

NM(2)

 

 

Pro-forma Hotel Adjusted EBITDA

 

$

(108

)

 

$

248

 

 

NM(2)

 

 

$

(18

)

 

$

454

 

 

NM(2)

 

 

Pro-forma Hotel Adjusted EBITDA margin

 

 

(283.1

)%

 

 

31.4

%

 

NM(2)

 

 

 

(3.0

)%

 

 

30.0

%

 

NM(2)

 

 

Adjusted FFO attributable to stockholders

 

$

(175

)

 

$

164

 

 

NM(2)

 

 

$

(118

)

 

$

300

 

 

NM(2)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Loss) earnings per share - Diluted(1)

 

$

(1.10

)

 

$

0.40

 

 

NM(2)

 

 

$

(4.01

)

 

$

0.88

 

 

NM(2)

 

 

Adjusted FFO per share - Diluted(1)

 

$

(0.75

)

 

$

0.81

 

 

NM(2)

 

 

$

(0.50

)

 

$

1.49

 

 

NM(2)

 

 

Weighted average shares outstanding - Diluted

 

 

235

 

 

 

202

 

 

 

33

 

 

 

236

 

 

 

202

 

 

 

34

 

 

 

(1)

Amounts are calculated based on unrounded numbers.

(2)

Percentage change is not meaningful.

 

COVID-19 Action Plan Update

The following is an update on the actions Park and its hotel managers have taken to mitigate the effects of COVID-19 on its business:

 

Continued pursuit of alternative sources of revenue, including but not limited to housing for applicable government authorities and hospitals, professional sports leagues and its media crews, as well as colleges and universities to house students for their upcoming school year as they look to mitigate potential COVID-19 exposures within their student population;

 

Issued an aggregate $650 million of Senior Secured Notes, further increasing our liquidity to $1.6 billion (including the $0.3 billion of available capacity remaining under the Revolver);

 

Commenced the phased reopening of 10 hotels during the second quarter of the 38 hotels previously suspended, increasing availability by 2,348 rooms, an additional 10 hotels and 2,885 rooms in July 2020, and selected restaurants and other outlets within the hotels;

 

Opened an additional 1,855 rooms at hotels that remained open throughout the second quarter; and

 

Expects to have all but one of the current hotels open by the end of 2020.

The current status of Park’s hotels as of August 5, 2020 is as follows (for a list of status by hotel please see Park’s financial supplement):

 

Consolidated Hotels

 

Status

 

Number of

Hotels

 

 

Total Rooms

 

 

Rooms

Suspended

 

 

Rooms

Available

 

 

Percentage of

Rooms

Suspended

 

Open

 

 

37

 

 

 

14,968

 

 

 

4,510

 

 

 

10,458

 

 

 

30

%

Operations suspended

 

 

16

 

 

 

13,963

 

 

 

13,963

 

 

 

 

 

 

100

%

Total

 

 

53

 

 

 

28,931

 

 

 

18,473

 

 

 

10,458

 

 

 

64

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2

 


 

Unconsolidated Hotels

 

Status

 

Number of

Hotels

 

 

Total Rooms

 

 

Rooms

Suspended

 

 

Rooms

Available

 

 

Percentage of

Rooms

Suspended

 

Open

 

 

5

 

 

 

2,557

 

 

 

892

 

 

 

1,665

 

 

 

35

%

Operations suspended

 

 

2

 

 

 

1,740

 

 

 

1,740

 

 

 

 

 

 

100

%

Total

 

 

7

 

 

 

4,297

 

 

 

2,632

 

 

 

1,665

 

 

 

61

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operational Update

Since the beginning of March, Park has experienced a significant decline in ADR, occupancy, and RevPAR associated with COVID-19 throughout its portfolio, which has resulted in a decline in Park’s operating cash flow. Changes in the monthly pro-forma metrics for the first half of 2020 as compared to the same period in 2019 are as follows:

 

 

Pro-forma ADR

 

 

Pro-forma Occupancy

 

 

Pro-forma RevPAR

 

January

 

(1.0

)%

 

 

1.6

%

pts

 

1.2

%

February

 

(0.7

)

 

 

0.9

 

 

 

0.4

 

March

 

(10.1

)

 

 

(49.4

)

 

 

(63.8

)

April

 

(47.0

)

 

 

(80.9

)

 

 

(97.6

)

May

 

(54.1

)

 

 

(79.9

)

 

 

(97.3

)

June

 

(36.5

)

 

 

(78.5

)

 

 

(93.0

)

Monthly occupancy based on hotels open during the entirety of each month during the first half of 2020 is as follows:

 

 

 

Number of

Consolidated

Hotels Open

 

 

Occupancy

 

January

 

 

53

 

 

 

73.8

%

February

 

 

53

 

 

 

79.2

 

March

 

 

25

 

 

 

36.9

 

April

 

 

18

 

 

 

14.4

 

May

 

 

18

 

 

 

20.4

 

June

 

 

22

 

 

 

30.2

 

Additionally, COVID-19 resulted in decreases of 98.7% and 95.8% in group and transient revenue, respectively, for the second quarter as compared to the same period in 2019; however, during the second quarter of 2020, Park recognized approximately $8 million of cancellation and attrition revenue.

Each of the Company’s key markets has been significantly impacted as follows:

 

Hawaii: Operations at both of Park’s Hawaii hotels remain suspended following the extension of the governor’s order for nonresident visitors to quarantine for a 14-day period through September 1, 2020;

 

San Francisco: As positive cases in California rise, restrictions on non-essential travelers remain in place and the reopening of bars and indoor dining has been delayed. Four of Park’s hotels remain suspended; however, two hotels, the JW Marriott San Francisco Union Square and Hyatt Centric Fisherman's Wharf, remain open to house first responders and essential workers;

 

Orlando: The Hilton Orlando, one of our unconsolidated joint ventures, has remained open supported by demand from the National Guard, and Park’s Bonnet Creek complex reopened in July to house professional sports leagues and theme park guests;

 

New Orleans: The Hilton New Orleans Riverside reopened in July, while the W New Orleans – French Quarter remains closed as the city has reversed its phased reopening, limiting large indoor gatherings and cancelling citywide events;

 

Boston: All of Park’s Boston hotels are open with demand from airline crews, front line medical staff and other first responders and increased demand from lack of other operational hotels in the market;

 

New York: As New York continues to have ongoing restrictions on large gatherings and on certain out-of-state travelers, the Hilton New York’s operations remain suspended;

3

 


 

 

Southern California: Certain of Park’s hotels in Southern California have remained open due to demand from airline crew, front line medical staff and other first responders, and most of Park’s hotels that were suspended have reopened following the easing of restrictions on non-essential travel;

 

Chicago: Chicago requires a 14-day quarantine period for certain travelers and restrictions on large gatherings continue with all citywide events cancelled for the second half of 2020. The W Chicago – Lakeshore and Hilton Chicago/Oak Brook Suites are open primarily due to demand from airline crews and increased demand from lack of other operational hotels in the market;

 

Key West: The Casa Marina, A Waldorf Astoria Resort, and The Reach Key West, Curio Collection, reopened in June with nearly 50% occupancy for the month of June following the removal of tourism restrictions;

 

Denver: The Hilton Denver partially reopened in July as the city eases its restrictions;

 

Miami: Both of Park’s Miami hotels, the Royal Palm South Beach Miami and Hilton Miami Airport, reopened during the quarter following the easing of Florida’s stay-at-home orders;

 

Washington, D.C.: Although Washington, D.C. requires a 14-day quarantine period for non-essential travelers from high-risk states, most of Park’s hotels have remained open with demand from airline crews, first responders and other small groups of dislocated guests; and

 

Seattle: Most of Park’s Seattle hotels have remained open based on demand from airline crews, medical professionals and local business transient travel, with the two airport hotels consolidating operations.

 

Balance Sheet and Liquidity

Park had the following debt outstanding as of June 30, 2020:

 

(unaudited, dollars in millions)

 

 

 

 

 

 

 

Debt

 

Collateral

 

Interest Rate

 

 

Maturity Date

 

As of

June 30, 2020

 

Fixed Rate Debt

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage loan

 

DoubleTree Hotel Spokane City Center

 

3.55%

 

 

October 2020

 

$

12

 

Mortgage loan

 

Hilton Denver City Center

 

4.90%

 

 

August 2022(1)

 

 

60

 

Mortgage loan

 

Hilton Checkers Los Angeles

 

4.11%

 

 

March 2023

 

 

27

 

Mortgage loan

 

W Chicago - City Center

 

4.25%

 

 

August 2023

 

 

77

 

Commercial mortgage-backed

securities loan

 

Hilton San Francisco Union Square, Parc 55 San Francisco - a Hilton Hotel

 

4.11%

 

 

November 2023

 

 

725

 

Mortgage loan

 

Hyatt Regency Boston

 

4.25%

 

 

July 2026

 

 

140

 

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

 

Senior Secured Notes(2)

 

 

 

7.50%

 

 

June 2025

 

 

650

 

Finance lease obligations

 

 

 

3.07%

 

 

2021 to 2022

 

 

1

 

Total Fixed Rate Debt

 

 

 

4.88%(3)

 

 

 

 

 

3,132

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Variable Rate Debt

 

 

 

 

 

 

 

 

 

 

 

 

Revolving credit facility(4)(5)

 

Unsecured

 

L + 3.00%

 

 

December 2021

 

 

681

 

2016 Term Loan(4)(6)

 

Unsecured

 

L + 2.95%

 

 

December 2021

 

 

631

 

Mortgage loan

 

DoubleTree Hotel Ontario Airport

 

L + 2.25%

 

 

May 2022

 

 

30

 

2019 Term Facility(4)(7)

 

Unsecured

 

L + 2.65%

 

 

September 2024

 

 

670

 

Total Variable Rate Debt

 

 

 

3.13%(3)

 

 

 

 

 

2,012

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Add: unamortized premium

 

 

 

 

 

 

 

 

 

 

4

 

Less: unamortized deferred financing costs and discount

 

 

 

 

 

 

 

 

(30

)

Total Debt(8)

 

 

 

4.25%(3)

 

 

 

 

$

5,118

 

 

(1)

The loan matures in August 2042 but is callable by the lender in August 2022.

(2)

The Senior Secured Notes were issued in May 2020 with a maturity date of June 2025.

(3)

Calculated on a weighted average basis.

(4)

In May 2020, Park amended its credit and term loan facilities, which added a LIBOR floor of 25 basis points.

(5)

During the second quarter of 2020, Park repaid $319 million of the Revolver.

(6)

The 2016 Term Loan was entered into in December 2016 with a maturity date of December 2021. Park repaid the 2016 Term Loan by $50 million and $69 million in December 2019 and June 2020, respectively.

(7)

In August 2019, the Company, Park Intermediate Holdings LLC and PK Domestic Property LLC entered into a credit agreement with Bank of America, N.A. and certain other lenders, providing a $950 million unsecured delayed draw term loan facility (the “2019 Term Facility”), with the $850 million, five-year delayed draw term loan tranche fully drawn on September 18, 2019 to fund the merger with Chesapeake Lodging Trust.  The $100 million, two-year delayed draw term loan tranche was unfunded and the commitments thereunder terminated on September 18, 2019. On December 31, 2019, Park repaid $180 million of the 2019 Term Facility.

(8)

Excludes $225 million of Park’s share of debt of its unconsolidated joint ventures.

4

 


 

 

Park’s Net Debt as of June 30, 2020 was $4,060 million. With total cash and cash equivalents of $1,309 million, including $35 million of restricted cash, Park is maintaining higher than historical cash levels due to the continued uncertainty surrounding COVID-19, and Park intends to do so until markets stabilize and demand in the lodging industry begins to recover. With the actions taken by Park’s management and its hotel managers, including the issuance of $650 million of Senior Secured Notes, and with only $12 million of debt maturing in 2020, Park believes it has sufficient liquidity to satisfy its short-term liquidity obligations even though many of the Company’s hotels have suspended operations.

 

In May 2020, Park amended its credit and term loan facilities to suspend compliance with all existing financial covenants tested through and including March 31, 2021 and to adjust the levels of particular financial covenants after such period. As part of the amendment process, Park (i) agreed to comply with a monthly minimum liquidity covenant, to pledge equity in certain subsidiaries to secure the facilities, and for certain subsidiaries to become guarantors under the facilities, and (ii) exercised its two six-month extension options on its Revolver to extend its maturity to December 24, 2021. The amendments also added additional covenants that restrict Park’s ability to make dividend and distribution payments (except to the extent required to maintain REIT status) and stock repurchases, make prepayments of other indebtedness, make capital expenditures, conduct asset dispositions or transfers and make investments, including acquisitions or mergers, in each case subject to various exceptions. Additionally, during the second quarter of 2020, Park amended certain mortgage loan agreements to defer interest and principal payments for three to six months and obtain temporary suspensions from required cash reserves.

 

Cash Burn Analysis

 

Based on an extreme scenario where all of the Company’s hotels suspend operations, Park’s management has updated the estimated average cash requirements to support working capital funding, other hotel fixed costs (such as property taxes, insurance and ground rent), debt service, and corporate and other non-hotel expenses. Operational expenses related to Park’s suspended hotels were lower than originally anticipated. Based on Park’s current liquidity of $1.6 billion (including the $0.3 billion of available capacity remaining under the Revolver) and assuming the extreme scenario where all hotels suspend operations, Park believes it currently has two years of liquidity.

 

Expense

 

Average/Month

(in millions)

 

Hotel operations

 

$

42

 

Debt service

 

 

19

 

Corporate & other non-hotel expenditures

 

 

4

 

Total

 

$

65

 

This estimate does not take into account capital expenditures or any possible alternative sources of revenue that may arise or payment of cash dividends or other distributions not already declared and paid in 2020, if any.  The estimated cash burn amount has not been reduced by any amount available to Park under existing or future debt facilities, or proceeds from issuance of any additional debt, equity or equity-linked securities.  

Park continues to take appropriate measures to reduce the near-term burn rate, including deferral of payments, hiring freezes and other cost reduction measures.

Dividends

As a precautionary measure in light of COVID-19, Park has suspended dividend payments following the payment of its first quarter 2020 dividend until such time that Park’s Board of Directors determines a year-end dividend, if any.

 

Full-Year 2020 Outlook

Given the continued economic uncertainty, travel restrictions and rapidly-changing circumstances related to the COVID-19 pandemic, in March 2020, Park withdrew its previously issued 2020 guidance.  Park is not providing an updated outlook at this time.

The Company’s ability to predict future operating results is significantly impacted by the current COVID-19 pandemic. Park expects that the trends affecting the economy will continue to depress hotel operating results across the portfolio. The economic environment lacks sufficient clarity at this time to provide accurate guidance.

 

5

 


 

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 2020 results on August 6, 2020 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’ Second Quarter 2020 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 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 Quarterly Report on form 10-Q for the quarter ended March 31, 2020 and Annual Report on Form 10-K for the year ended December 31, 2019, as such factors may be updated from time to time in Park’s filings with the SEC, which are accessible on the SEC’s website at www.sec.gov. Except as required by law, Park undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

Non-GAAP Financial Measures

Park presents certain non-GAAP financial measures in this press release, including Nareit FFO attributable to stockholders Adjusted FFO attributable to stockholders, EBITDA, Adjusted EBITDA, Hotel Adjusted EBITDA, Hotel Adjusted EBITDA margin and Net debt. These non-GAAP financial measures should be considered along with, but not as alternatives to, net income (loss) as a measure of its operating performance. Please see the schedules included in this press release including the “Definitions” section for additional information and reconciliations of such non-GAAP financial measures.

6

 


 

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 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.

7

 


 

PARK HOTELS & RESORTS INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited, in millions, except share and per share data)

 

 

 

June 30, 2020

 

 

December 31, 2019

 

 

 

(unaudited)

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

Property and equipment, net

 

$

9,323

 

 

$

9,594

 

Assets held for sale, net

 

 

 

 

 

71

 

Investments in affiliates

 

 

23

 

 

 

35

 

Goodwill

 

 

 

 

 

607

 

Intangibles, net

 

 

45

 

 

 

46

 

Cash and cash equivalents

 

 

1,274

 

 

 

346

 

Restricted cash

 

 

35

 

 

 

40

 

Accounts receivable, net of allowance for doubtful accounts of $7 and $2

 

 

31

 

 

 

180

 

Prepaid expenses

 

 

43

 

 

 

83

 

Other assets

 

 

46

 

 

 

40

 

Operating lease right-of-use assets

 

 

239

 

 

 

248

 

TOTAL ASSETS (variable interest entities - $231 and $242)

 

$

11,059

 

 

$

11,290

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

Debt

 

$

5,118

 

 

$

3,871

 

Accounts payable and accrued expenses

 

 

129

 

 

 

217

 

Due to hotel managers

 

 

74

 

 

 

159

 

Deferred income tax liabilities

 

 

36

 

 

 

50

 

Other liabilities

 

 

123

 

 

 

282

 

Operating lease liabilities

 

 

253

 

 

 

260

 

Total liabilities (variable interest entities - $215 and $219)

 

 

5,733

 

 

 

4,839

 

 

 

 

 

 

 

 

 

 

Stockholders' Equity

 

 

 

 

 

 

 

 

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

235,900,906 shares issued and 235,604,979 shares outstanding as of

June 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

 

 

4,508

 

 

 

4,575

 

Retained earnings

 

 

871

 

 

 

1,922

 

Accumulated other comprehensive loss

 

 

(6

)

 

 

(3

)

Total stockholders' equity

 

 

5,375

 

 

 

6,496

 

Noncontrolling interests

 

 

(49

)

 

 

(45

)

Total equity

 

 

5,326

 

 

 

6,451

 

TOTAL LIABILITIES AND EQUITY

 

$

11,059

 

 

$

11,290

 

8

 


 

PARK HOTELS & RESORTS INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited, in millions, except per share data)

 

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rooms

 

$

21

 

 

$

434

 

 

$

383

 

 

$

837

 

Food and beverage

 

 

3

 

 

 

195

 

 

 

164

 

 

 

378

 

Ancillary hotel

 

 

15

 

 

 

55

 

 

 

72

 

 

 

110

 

Other

 

 

3

 

 

 

19

 

 

 

22

 

 

 

37

 

Total revenues

 

 

42

 

 

 

703

 

 

 

641

 

 

 

1,362

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rooms

 

 

20

 

 

 

113

 

 

 

132

 

 

 

220

 

Food and beverage

 

 

14

 

 

 

130

 

 

 

137

 

 

 

254

 

Other departmental and support

 

 

60

 

 

 

151

 

 

 

232

 

 

 

300

 

Other property-level

 

 

56

 

 

 

49

 

 

 

116

 

 

 

98

 

Management fees

 

 

 

 

 

36

 

 

 

25

 

 

 

69

 

Impairment loss and casualty gain, net

 

 

 

 

 

 

 

 

694

 

 

 

 

Depreciation and amortization

 

 

75

 

 

 

61

 

 

 

150

 

 

 

123

 

Corporate general and administrative

 

 

14

 

 

 

22

 

 

 

30

 

 

 

39

 

Other

 

 

4

 

 

 

18

 

 

 

25

 

 

 

38

 

Total expenses

 

 

243

 

 

 

580

 

 

 

1,541

 

 

 

1,141

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gain (loss) on sales of assets, net

 

 

1

 

 

 

(12

)

 

 

63

 

 

 

19

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating (loss) income

 

 

(200

)

 

 

111

 

 

 

(837

)

 

 

240

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

1

 

 

 

2

 

 

 

2

 

 

 

3

 

Interest expense

 

 

(50

)

 

 

(33

)

 

 

(90

)

 

 

(65

)

Equity in (losses) earnings from investments in affiliates

 

 

(8

)

 

 

10

 

 

 

(9

)

 

 

15

 

Other loss, net

 

 

(1

)

 

 

(1

)

 

 

(3

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Loss) income before income taxes

 

 

(258

)

 

 

89

 

 

 

(937

)

 

 

193

 

Income tax expense

 

 

(3

)

 

 

(5

)

 

 

(13

)

 

 

(12

)

Net (loss) income

 

 

(261

)

 

 

84

 

 

 

(950

)

 

$

181

 

Net loss (income) attributable to noncontrolling interests

 

 

2

 

 

 

(2

)

 

 

3

 

 

 

(3

)

Net (loss) income attributable to stockholders

 

$

(259

)

 

$

82

 

 

$

(947

)

 

$

178

 

 

(Loss) Earnings per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Loss) earnings per share - Basic

 

$

(1.10

)

 

$

0.40

 

 

$

(4.01

)

 

$

0.88

 

(Loss) earnings per share - Diluted

 

$

(1.10

)

 

$

0.40

 

 

$

(4.01

)

 

$

0.88

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding - Basic

 

 

235

 

 

 

201

 

 

 

236

 

 

 

201

 

Weighted average shares outstanding - Diluted

 

 

235

 

 

 

202

 

 

 

236

 

 

 

202

 

9

 


 

PARK HOTELS & RESORTS INC.

NON-GAAP FINANCIAL MEASURES RECONCILIATIONS

EBITDA AND ADJUSTED EBITDA

 

(unaudited, in millions)

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Net (loss) income

 

$

(261

)

 

$

84

 

 

$

(950

)

 

$

181

 

Depreciation and amortization expense

 

 

75

 

 

 

61

 

 

 

150

 

 

 

123

 

Interest income

 

 

(1

)

 

 

(2

)

 

 

(2

)

 

 

(3

)

Interest expense

 

 

50

 

 

 

33

 

 

 

90

 

 

 

65

 

Income tax expense

 

 

3

 

 

 

5

 

 

 

13

 

 

 

12

 

Interest expense, income tax and depreciation and

   amortization included in equity in earnings from

   investments in affiliates

 

 

4

 

 

 

7

 

 

 

9

 

 

 

12

 

EBITDA

 

 

(130

)

 

 

188

 

 

 

(690

)

 

 

390

 

(Gain) loss on sales of assets, net

 

 

(1

)

 

 

12

 

 

 

(63

)

 

 

(19

)

Acquisition costs

 

 

 

 

 

6

 

 

 

1

 

 

 

6

 

Severance expense

 

 

 

 

 

1

 

 

 

2

 

 

 

2

 

Share-based compensation expense

 

 

4

 

 

 

4

 

 

 

6

 

 

 

8

 

Impairment loss and casualty gain, net

 

 

 

 

 

 

 

 

694

 

 

 

 

Other items

 

 

5

 

 

 

(4

)

 

 

10

 

 

 

(4

)

Adjusted EBITDA

 

$

(122

)

 

$

207

 

 

$

(40

)

 

$

383

 

10

 


 

PARK HOTELS & RESORTS INC.

NON-GAAP FINANCIAL MEASURES RECONCILIATIONS

PRO-FORMA HOTEL ADJUSTED EBITDA AND

PRO-FORMA HOTEL ADJUSTED EBITDA MARGIN(1)

 

 

(unaudited, dollars in millions)

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Adjusted EBITDA

 

$

(122

)

 

207

 

 

$

(40

)

 

$

383

 

Less: Adjusted EBITDA from investments in

   affiliates

 

 

4

 

 

 

(12

)

 

 

 

 

 

(22

)

Add: All other(2)

 

 

10

 

 

 

14

 

 

 

23

 

 

 

29

 

Hotel Adjusted EBITDA

 

 

(108

)

 

 

209

 

 

 

(17

)

 

 

390

 

Add:  Adjusted EBITDA from hotels acquired(1)

 

 

 

 

 

53

 

 

 

 

 

 

90

 

Less: Adjusted EBITDA from hotels disposed of

 

 

 

 

 

(14

)

 

 

(1

)

 

 

(26

)

Pro-forma Hotel Adjusted EBITDA(1)

 

$

(108

)

 

$

248