Park Hotels & Resorts Inc. (“Park” or the “Company”) (NYSE: PK)
today announced results for the fourth quarter and full year ended
December 31, 2023 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 December 31, |
|
Year Ended December 31, |
| |
|
2023 |
|
|
|
2022 |
|
|
Change(1) |
|
|
2023 |
|
|
|
2022 |
|
|
Change(1) |
|
Comparable RevPAR |
$ |
178.25 |
|
|
$ |
171.21 |
|
|
4.1 |
% |
|
$ |
178.62 |
|
|
$ |
164.33 |
|
|
8.7 |
% |
| Comparable Occupancy |
|
71.0 |
% |
|
|
69.5 |
% |
|
1.5 |
%pts |
|
|
72.7 |
% |
|
|
67.8 |
% |
|
4.9 |
%pts |
| Comparable ADR |
$ |
250.93 |
|
|
$ |
246.35 |
|
|
1.9 |
% |
|
$ |
245.80 |
|
|
$ |
242.61 |
|
|
1.3 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Comparable Total RevPAR |
$ |
287.21 |
|
|
$ |
273.91 |
|
|
4.9 |
% |
|
$ |
285.50 |
|
|
$ |
259.19 |
|
|
10.2 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net income |
$ |
188 |
|
|
$ |
35 |
|
|
437.1 |
% |
|
$ |
106 |
|
|
$ |
173 |
|
|
(38.7 |
)% |
| Net income attributable to
stockholders |
$ |
187 |
|
|
$ |
34 |
|
|
450.0 |
% |
|
$ |
97 |
|
|
$ |
162 |
|
|
(40.1 |
)% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Operating income |
$ |
276 |
|
|
$ |
84 |
|
|
229.6 |
% |
|
$ |
343 |
|
|
$ |
296 |
|
|
16.1 |
% |
| Operating income margin |
|
42.0 |
% |
|
|
12.6 |
% |
|
2,940 |
bps |
|
|
12.7 |
% |
|
|
11.8 |
% |
|
90 |
bps |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Comparable Hotel Adjusted
EBITDA |
$ |
171 |
|
|
$ |
167 |
|
|
2.1 |
% |
|
$ |
680 |
|
|
$ |
623 |
|
|
9.1 |
% |
| Comparable Hotel Adjusted
EBITDA margin(2) |
|
27.5 |
% |
|
|
28.2 |
% |
|
(70 |
)bps |
|
|
27.8 |
% |
|
|
28.1 |
% |
|
(30 |
)bps |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Adjusted EBITDA |
$ |
163 |
|
|
$ |
159 |
|
|
2.5 |
% |
|
$ |
659 |
|
|
$ |
606 |
|
|
8.7 |
% |
| Adjusted FFO attributable to
stockholders |
$ |
110 |
|
|
$ |
101 |
|
|
8.9 |
% |
|
$ |
439 |
|
|
$ |
352 |
|
|
24.7 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Earnings per share -
Diluted(1) |
$ |
0.88 |
|
|
$ |
0.15 |
|
|
486.7 |
% |
|
$ |
0.44 |
|
|
$ |
0.71 |
|
|
(38.0 |
)% |
| Adjusted FFO per share –
Diluted(1) |
$ |
0.52 |
|
|
$ |
0.45 |
|
|
15.6 |
% |
|
$ |
2.04 |
|
|
$ |
1.54 |
|
|
32.5 |
% |
| Weighted average shares
outstanding – Diluted |
|
210 |
|
|
|
224 |
|
|
(14 |
) |
|
|
215 |
|
|
|
228 |
|
|
(13 |
) |
______________________________________________
(1) Amounts are calculated based on unrounded numbers.
(2) For both the three months and year ended December 31, 2023,
(50) bps of the change represents the impact of the disruption from
the renovations at both the Bonnet Creek Orlando complex and the
Casa Marina Key West hotel.
Thomas J. Baltimore, Jr., Chairman and Chief Executive Officer,
stated, "2023 was a year of outstanding accomplishments for Park as
we executed on our strategic objectives, exceeded our operational
goals, and meaningfully strengthened our balance sheet, while
delivering sector-leading total returns for shareholders. As we
previously reported, our portfolio's performance was strong during
the fourth quarter, with Comparable RevPAR increasing over 4%
compared to the fourth quarter of 2022, or over 6% if excluding
disruption from renovations, primarily at the Casa Marina Key West
resort, where operations were largely suspended during the quarter,
and the Bonnet Creek Orlando complex. For the full year, both
Comparable RevPAR and Adjusted EBITDA increased by nearly 9% from
the prior year and exceeded the midpoint of our full-year guidance.
In addition to our operating achievements, we remained344
laser-focused on creating long-term shareholder value and executed
important strategic capital allocation initiatives over the past
year, returning over $630 million in capital to shareholders,
including the repurchase of 14.6 million shares of common stock for
$180 million and paying over $450 million of dividends. In
addition, we reinvested nearly $300 million back into our current
portfolio and will continue to reinvest in our portfolio, including
nearly $90 million on upcoming key renovation projects.
Turning to 2024, we are excited for the expected benefits from
the nearly $400 million invested over the past two years on
transformative renovation projects at Casa Marina Key West, the
Tapa Tower at the Hilton Hawaiian Village and the Bonnet Creek
Orlando complex, which began 2024 with the highest full-year Group
Revenue Pace in the complex's history. Additionally, strong
convention calendars and expected increases in group demand at our
New Orleans, Chicago, San Diego and Miami hotels, coupled with
ongoing strength in leisure and group demand at our Hawaii hotels
from both domestic and international travel create a favorable
backdrop for Park. The year is off to a strong start, with January
Comparable RevPAR up 13.4% compared to last year and February
Comparable RevPAR currently expected to exceed last year by over
8%, reinforcing our positive outlook for our portfolio this year
that has allowed us to increase our recurring quarterly dividend by
67% to $0.25 from $0.15 per share.”
Additional Highlights
- In February 2024, S&P Global raised
Park's credit rating by two notches to BB- from B as a result of
improved leverage following Park's effective exit from the Hilton
San Francisco Hotels;
- Completed the multi-phased renovation
project of the 1,021-room Tapa Tower at the Hilton Hawaiian Village
Waikiki Beach Resort in December 2023, and, in early 2024,
completed the nearly $230 million transformative expansion and
full-scale renovation of the Waldorf Astoria Orlando and Signia by
Hilton Orlando Bonnet Creek hotels and the approximately $80
million full-scale renovation at the Casa Marina Key West, Curio
Collection;
- Declared a total of $2.15 per share in
dividends to stockholders during 2023, which includes dividends of
$1.70 per share declared during the fourth quarter of 2023. The
fourth quarter dividend consisted of a special cash dividend of
$0.77 per share as a result of the effective exit from the Hilton
San Francisco Hotels and Park's fourth quarter dividend of $0.93
per share based on 2023 operating results;
- During 2023, repurchased 14.6 million
shares of common stock for a total purchase price of $180
million;
- Park received the 2023 Nareit Leader in
the Light Award for the hospitality sector for the second year in a
row, highlighting Park's commitment to superior and consistent
sustainability practices. Park was also recognized by Newsweek as
one of America's Most Trustworthy Companies for 2023 and recently,
recognized as one of America's Most Responsible Companies for 2024,
the fourth time Park has been included in the annual survey;
- Beginning in October 2023, Park no
longer had control of or an economic interest in the operations of
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 the hotels were placed into court-ordered
receivership. The receiver has full authority over the hotels and,
until no later than November 1, 2024, has the ability to sell the
hotels. The court order contemplates the receivership will end with
a nonjudicial foreclosure by December 2, 2024, if the hotels are
not sold within the predetermined sale period;
- In June 2023, fully repaid the $75
million mortgage loan secured by the 403-room W Chicago – City
Center;
- In March 2023, purchased two parcels of
land, including all improvements, adjacent to the Hilton Hawaiian
Village Waikiki Beach Resort, for approximately $18 million, which
are intended for the development of an additional tower at the
Hilton Hawaiian Village Waikiki Beach Resort; and
- In January 2023, sold the 508-room
Hilton Miami Airport hotel for gross proceeds of $118.25 million,
or $233,000 per key, 14.0x the hotel's 2019 Adjusted EBITDA (or
11.1x when excluding anticipated capital expenditures), and at a
capitalization rate of 6.2% on the hotel's 2019 net operating
income (or 7.9% excluding anticipated capital expenditures). Park
utilized $50 million of the net proceeds to fully repay the
outstanding balance on the revolving credit facility ("Revolver").
Additionally, in June 2023, the 182-room Embassy Suites Phoenix
Airport hotel was removed from Park's portfolio following the
ground lessor's termination of the ground lease prior to its
scheduled expiration in November 2031.
Operational Update
Changes in Park's 2023 Comparable ADR, Occupancy and RevPAR
compared to the same periods in 2022, and 2023 Comparable Occupancy
were as follows:
| |
Comparable ADR |
|
Comparable Occupancy |
|
|
Comparable RevPAR |
|
|
Comparable Occupancy |
| |
2023 vs 2022 |
|
2023 vs 2022 |
|
|
2023 vs 2022 |
|
|
2023 |
|
Q1 2023 |
4.8 |
% |
|
12.4 |
%pts |
|
28.4 |
% |
|
|
67.3 |
% |
| Q2 2023 |
0.8 |
|
|
3.3 |
|
|
5.3 |
|
|
|
76.9 |
|
| Q3 2023 |
(0.9 |
) |
|
2.7 |
|
|
2.8 |
|
|
|
75.3 |
|
| |
|
|
|
|
|
|
|
|
|
| Oct 2023 |
2.3 |
|
|
1.9 |
|
|
4.9 |
|
|
|
77.3 |
|
| Nov 2023 |
2.0 |
|
|
2.7 |
|
|
5.9 |
|
|
|
71.4 |
|
| Dec 2023 |
1.3 |
|
|
0.1 |
|
|
1.4 |
|
|
|
64.4 |
|
|
Q4 2023 |
1.9 |
|
|
1.5 |
|
|
4.1 |
|
|
|
71.0 |
|
| |
|
|
|
|
|
|
|
|
|
| |
2024 vs 2023 |
|
2024 vs 2023 |
|
|
2024 vs 2023 |
|
|
2024 |
| Jan 2024 |
4.1 |
|
|
5.3 |
|
|
13.4 |
|
|
|
65.0 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
Changes in Park's 2023 Comparable ADR, Occupancy and RevPAR for
the three months and year ended December 31, 2023 compared to
the same periods in 2022, and 2023 Comparable Occupancy for the
three months and year ended December 31, 2023 by hotel type
were as follows:
| |
Three Months Ended December 31, |
| |
Comparable ADR |
|
Comparable Occupancy |
|
|
Comparable RevPAR |
|
|
Comparable Occupancy |
| |
2023 vs 2022 |
|
2023 vs 2022 |
|
|
2023 vs 2022 |
|
|
2023 |
|
Resort |
0.7 |
% |
|
0.4 |
%pts |
|
1.2 |
% |
|
|
74.4 |
% |
| Urban |
4.3 |
|
|
2.1 |
|
|
7.6 |
|
|
|
69.9 |
|
| Airport |
(0.4 |
) |
|
2.9 |
|
|
3.8 |
|
|
|
70.5 |
|
| Suburban |
1.7 |
|
|
0.8 |
|
|
3.0 |
|
|
|
63.3 |
|
|
All Types |
1.9 |
|
|
1.5 |
|
|
4.1 |
|
|
|
71.0 |
|
| |
Year Ended December 31, |
| |
Comparable ADR |
|
|
Comparable Occupancy |
|
|
Comparable RevPAR |
|
|
Comparable Occupancy |
| |
2023 vs 2022 |
|
|
2023 vs 2022 |
|
|
2023 vs 2022 |
|
|
2023 |
|
Resort |
(1.0 |
)% |
|
2.6 |
%pts |
|
2.4 |
% |
|
|
77.4 |
% |
| Urban |
3.5 |
|
|
7.4 |
|
|
15.7 |
|
|
|
69.8 |
|
| Airport |
5.4 |
|
|
3.8 |
|
|
11.2 |
|
|
|
73.6 |
|
| Suburban |
3.4 |
|
|
5.4 |
|
|
12.7 |
|
|
|
64.7 |
|
|
All Types |
1.3 |
|
|
4.9 |
|
|
8.7 |
|
|
|
72.7 |
|
The Comparable Rooms Revenue mix for the three months and year
ended December 31, 2023 and 2022 were as follows:
| |
Three Months Ended December 31, |
|
Year Ended December 31, |
| |
2023 |
|
2022 |
|
Change |
|
2023 |
|
2022 |
|
Change |
|
Group |
27.8 |
% |
|
26.6 |
% |
|
1.2 |
% |
|
28.0 |
% |
|
25.6 |
% |
|
2.4 |
% |
| Transient |
64.6 |
|
|
66.9 |
|
|
(2.3 |
) |
|
64.8 |
|
|
68.1 |
|
|
(3.3 |
) |
| Contract |
5.5 |
|
|
4.2 |
|
|
1.3 |
|
|
5.1 |
|
|
4.2 |
|
|
0.9 |
|
| Other |
2.1 |
|
|
2.3 |
|
|
(0.2 |
) |
|
2.1 |
|
|
2.1 |
|
|
— |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Park continued to see improvements in demand as business travel
accelerated and group demand continued to return to its urban and
resort hotels, increasing Comparable group revenues for the fourth
quarter of 2023 by nearly 9% year-over-year. Comparable RevPAR
growth continued to be driven by Park's key urban markets, with
Comparable RevPAR for the fourth quarter up nearly 8%
year-over-year for its urban portfolio, resulting from the
continued acceleration of group business in Boston, Chicago, Denver
and New York where RevPAR at the New York Hilton Midtown increased
over 14%. Additionally, leisure demand trends remained strong at
Park's Hawaii hotels while group demand continued to improve,
increasing RevPAR by over 8% versus prior year.
During the fourth quarter of 2023, projected Comparable group
revenues for 2024 increased by nearly $46 million, or approximately
185,000 Comparable group room nights, as compared to the end of
September 2023. As of the end of December 2023, Comparable Group
Revenue Pace and room night bookings for 2024 increased over 13%
and nearly 9% as compared to what 2023 group bookings were as of
the end of December 2022, respectively, with 2024 average
Comparable group rates projected to exceed 2023 average group rates
by 4% for the same time period.
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 |
|
4Q23 |
|
4Q22 |
|
Change(1) |
|
4Q23 |
|
4Q22 |
|
Change |
|
4Q23 |
|
4Q22 |
|
Change(1) |
| Hawaii |
2 |
|
3,507 |
|
$ |
313.30 |
|
$ |
305.20 |
|
2.7 |
% |
|
84.7 |
% |
|
80.2 |
% |
|
4.5% pts |
|
$ |
265.50 |
|
$ |
245.04 |
|
8.4 |
% |
|
Orlando |
3 |
|
2,325 |
|
|
231.79 |
|
|
243.50 |
|
(4.8 |
) |
|
65.2 |
|
|
68.3 |
|
|
(3.1 |
) |
|
|
151.18 |
|
|
166.26 |
|
(9.1 |
) |
| New Orleans |
1 |
|
1,622 |
|
|
214.82 |
|
|
211.44 |
|
1.6 |
|
|
68.7 |
|
|
68.3 |
|
|
0.4 |
|
|
|
147.64 |
|
|
144.48 |
|
2.2 |
|
| Boston |
3 |
|
1,536 |
|
|
240.47 |
|
|
224.09 |
|
7.3 |
|
|
79.4 |
|
|
77.8 |
|
|
1.6 |
|
|
|
191.04 |
|
|
174.54 |
|
9.5 |
|
| New York |
1 |
|
1,878 |
|
|
391.98 |
|
|
363.73 |
|
7.8 |
|
|
89.8 |
|
|
84.7 |
|
|
5.1 |
|
|
|
352.03 |
|
|
307.95 |
|
14.3 |
|
| Southern California |
5 |
|
1,773 |
|
|
211.95 |
|
|
215.37 |
|
(1.6 |
) |
|
72.5 |
|
|
71.7 |
|
|
0.8 |
|
|
|
153.65 |
|
|
154.46 |
|
(0.5 |
) |
| Chicago |
3 |
|
2,467 |
|
|
220.54 |
|
|
223.89 |
|
(1.5 |
) |
|
56.4 |
|
|
53.5 |
|
|
2.9 |
|
|
|
124.42 |
|
|
119.85 |
|
3.8 |
|
| Key West(2) |
2 |
|
461 |
|
|
500.78 |
|
|
454.01 |
|
10.3 |
|
|
56.4 |
|
|
69.7 |
|
|
(13.3 |
) |
|
|
282.40 |
|
|
316.54 |
|
(10.8 |
) |
| Denver |
1 |
|
613 |
|
|
180.17 |
|
|
177.32 |
|
1.6 |
|
|
69.9 |
|
|
63.8 |
|
|
6.1 |
|
|
|
125.94 |
|
|
113.21 |
|
11.2 |
|
| Miami |
1 |
|
393 |
|
|
243.58 |
|
|
251.29 |
|
(3.1 |
) |
|
80.1 |
|
|
81.5 |
|
|
(1.4 |
) |
|
|
195.00 |
|
|
204.60 |
|
(4.7 |
) |
| Washington, D.C. |
2 |
|
1,085 |
|
|
189.29 |
|
|
174.32 |
|
8.6 |
|
|
65.4 |
|
|
66.8 |
|
|
(1.4 |
) |
|
|
123.84 |
|
|
116.52 |
|
6.3 |
|
| Seattle |
2 |
|
1,246 |
|
|
136.55 |
|
|
157.98 |
|
(13.6 |
) |
|
65.5 |
|
|
59.7 |
|
|
5.8 |
|
|
|
89.47 |
|
|
94.32 |
|
(5.1 |
) |
| San Francisco |
2 |
|
660 |
|
|
241.97 |
|
|
229.50 |
|
5.4 |
|
|
71.7 |
|
|
74.4 |
|
|
(2.7 |
) |
|
|
173.38 |
|
|
170.57 |
|
1.6 |
|
| Other |
11 |
|
3,862 |
|
|
193.98 |
|
|
192.81 |
|
0.6 |
|
|
63.5 |
|
|
62.1 |
|
|
1.4 |
|
|
|
123.18 |
|
|
119.78 |
|
2.8 |
|
| All
Markets |
39 |
|
23,428 |
|
$ |
250.93 |
|
$ |
246.35 |
|
1.9 |
% |
|
71.0 |
% |
|
69.5 |
% |
|
1.5% pts |
|
$ |
178.25 |
|
$ |
171.21 |
|
4.1 |
% |
______________________________________________(1) Calculated
based on unrounded numbers.(2) In mid-May 2023, operations at
the Casa Marina Key West, Curio Collection, were suspended for a
full-scale renovation and partially reopened in October 2023, with
all rooms reopened by December 2023.
Balance Sheet and Liquidity
Park's current liquidity is over $1.3 billion, including
approximately $950 million of available capacity under the
Company's revolving credit facility ("Revolver"). As of
December 31, 2023, Park's Comparable Net Debt was
approximately $3.4 billion, which excludes the SF Mortgage Loan and
considers the $162 million special dividend resulting from Park's
effective exit from the Hilton San Francisco Hotels paid in January
2024.
As of December 31, 2023, 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 December 31,
2023:
| (unaudited,
dollars in millions) |
|
|
|
|
|
Debt |
|
Collateral |
|
Interest Rate |
|
Maturity Date |
|
As of December 31, 2023 |
|
Fixed Rate Debt |
|
|
|
|
|
|
|
|
|
Mortgage loan |
|
Hilton Denver City Center |
|
4.90% |
|
June 2024(1) |
|
$ |
54 |
|
|
Mortgage loan |
|
Hyatt Regency Boston |
|
4.25% |
|
July 2026 |
|
|
128 |
|
|
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 |
|
|
159 |
|
|
Mortgage loan |
|
DoubleTree Hotel Ontario Airport |
|
5.37% |
|
May 2027 |
|
|
30 |
|
|
2025 Senior Notes |
|
|
|
7.50% |
|
June 2025 |
|
|
650 |
|
|
2028 Senior Notes |
|
|
|
5.88% |
|
October 2028 |
|
|
725 |
|
|
2029 Senior Notes |
|
|
|
4.88% |
|
May 2029 |
|
|
750 |
|
|
Finance lease obligations |
|
|
|
7.66% |
|
2024 to 2028 |
|
|
1 |
|
|
Fixed Rate Debt |
|
|
|
5.24%(2) |
|
|
|
|
3,786 |
|
| |
|
|
|
|
|
|
|
|
| Variable Rate
Debt |
|
|
|
|
|
|
|
|
|
Revolver(3) |
|
Unsecured |
|
SOFR + 2.10% |
|
December 2026 |
|
|
— |
|
|
Total Variable Rate Debt |
|
|
|
7.44% |
|
|
|
|
— |
|
| |
|
|
|
|
|
|
|
|
| Add: unamortized premium |
|
|
|
|
|
|
|
|
1 |
|
|
Less: unamortized deferred financing costs and discount |
|
|
|
|
|
|
(22 |
) |
|
Total Debt(4)(5) |
|
|
|
5.24%(2) |
|
|
|
$ |
3,765 |
|
______________________________________________(1) The loan
matures in August 2042 but is callable by the lender with six
months of notice. As of December 31, 2023, 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) Excludes $164
million of Park’s share of debt of its unconsolidated joint
ventures.(5) Excludes the SF Mortgage Loan, which is included
in debt associated with hotels in receivership in Park's
consolidated balance sheets. In June 2023, Park ceased making debt
service payments toward the non-recourse SF Mortgage Loan, and Park
received a notice of default. The stated rate on the loan is 4.11%,
however, beginning June 1, 2023, the default interest rate on the
loan is 7.11%. Additionally, beginning June 1, 2023, the loan
accrues a monthly late payment administrative fee of 3% of the
monthly amount due. 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
In January 2024, Park completed the over $220 million capital
improvement project at its Bonnet Creek Orlando complex, which
included meeting space expansion and renovation of guestrooms,
existing meeting space, lobbies, food and beverage outlets, golf
course and other recreational amenities. Including the renovations
at the Bonnet Creek Orlando complex, Park spent nearly $300 million
on capital improvements at its hotels during 2023, with $90 million
spent during the fourth quarter of 2023, which also includes the
completion of the approximately $85 million guestroom renovation at
the Tapa Tower of the Hilton Hawaiian Village Waikiki Beach Resort,
the $80 million renovation of all guestrooms, public spaces, food
and beverage outlets, and certain hotel infrastructure at the Casa
Marina Key West, Curio Collection, the $11 million phase 2
guestroom renovation in the Riverside Building at the Hilton New
Orleans Riverside, and the $5 million ballroom renovation at the
New York Hilton Midtown.
Park has approved an additional $190 million to $200 million in
capital expenditures for 2024. Combined with previously approved
projects, Park expects to spend between $230 million to $250
million in 2024. Key renovations and return on investment projects
approved for 2024 are summarized below:
| (dollars in
millions) |
|
|
|
|
|
|
|
Project & Scope of Work |
|
Estimated Start Date |
|
EstimatedCompletion Date |
|
Budget |
| Hilton
Hawaiian Village Waikiki Beach Resort |
|
|
|
|
|
|
|
|
Guestroom renovations: Renovation of 392 guestrooms at the Rainbow
Tower |
|
Q3 2024 |
|
Q1 2025 |
|
$ |
40 |
|
|
Guestroom
additions: Adding 26 guestrooms (12 in 2024, 14 in 2025) through
the conversion of suites to increase room count at the Rainbow
Tower to 822 |
|
Q3 2024 |
|
Q1 2026 |
|
$ |
4 |
| Hilton
Waikoloa Village |
|
|
|
|
|
|
| |
Guestroom
renovations: Renovation of 197 guestrooms at the Palace Tower |
|
Q3 2024 |
|
Q1 2025 |
|
$ |
29 |
|
|
Guestroom
additions: Adding 11 guestrooms (6 in 2024, 5 in 2025) through the
conversion of suites to increase room count at the Palace Tower to
411 |
|
Q3 2024 |
|
Q1 2026 |
|
$ |
2 |
| Hilton New
Orleans Riverside |
|
|
|
|
|
|
|
|
Guestroom
renovation: Renovation of 250 guestrooms at the 1,167-room Main
Tower |
|
Q3 2024 |
|
Q4 2024 |
|
$ |
14 |
Dividends and Share Repurchases
Park declared cash dividends during the fourth quarter 2023 of
$1.70 per share to stockholders of record as of December 29,
2023, which consisted of a special cash dividend of $0.77 per share
from the effective exit from the Hilton San Francisco Hotels and
Park's fourth quarter dividend of $0.93 per share based on 2023
operating results, both of which were paid on January 16,
2024.
On February 23, 2024, Park declared a first quarter 2024 cash
dividend of $0.25 per share to be paid on April 15, 2024 to
stockholders of record as of March 29, 2024.
During 2023, Park repurchased 14.6 million shares of common
stock for a total purchase price of $180 million.
Full-Year 2024 Outlook
Park expects full-year 2024 operating results to be as
follows:
| (unaudited,
dollars in millions, except per share amounts and RevPAR) |
|
|
| |
|
|
|
|
| |
|
Full-Year 2024
Outlookas of
February 27, 2024 |
| Metric |
|
Low |
|
High |
| |
|
|
|
|
|
Comparable RevPAR |
|
$ |
185 |
|
|
$ |
188 |
|
| Comparable RevPAR change vs.
2023 |
|
|
3.5 |
% |
|
|
5.5 |
% |
| |
|
|
|
|
| Net income |
|
$ |
146 |
|
|
$ |
186 |
|
| Net income attributable to
stockholders |
|
$ |
134 |
|
|
$ |
174 |
|
| Earnings per share –
Diluted(1) |
|
$ |
0.64 |
|
|
$ |
0.83 |
|
| Operating income |
|
$ |
397 |
|
|
$ |
436 |
|
| Operating income margin |
|
|
14.9 |
% |
|
|
16.1 |
% |
| |
|
|
|
|
| Adjusted EBITDA |
|
$ |
645 |
|
|
$ |
685 |
|
| Comparable Hotel Adjusted
EBITDA margin(1) |
|
|
26.8 |
% |
|
|
27.8 |
% |
| Comparable Hotel Adjusted
EBITDA margin change vs. 2023(1) |
|
(100) bps |
|
— bps |
| Adjusted FFO per share –
Diluted(1) |
|
$ |
2.02 |
|
|
$ |
2.22 |
|
______________________________________________
(1) Amounts are calculated based on unrounded numbers.
Park's outlook is based in part on the following
assumptions:
- Comparable RevPAR for the first
quarter of 2024 is expected to be between $173 and $175;
- The mortgage loan secured by the Hilton Denver City Center is
not called by the lender during 2024;
- Includes 50 bps of RevPAR and $9 million of Hotel Adjusted
EBITDA disruption from renovations at certain of Park's hotels, of
which $8 million is associated with renovations at Park's Hawaii
hotels;
- Adjusted FFO excludes $55 million of default interest and late
payment administrative fees associated with default of the SF
Mortgage Loan for full-year 2024, which began in June 2023 and is
required to be recognized in interest expense until legal title to
the Hilton San Francisco Hotels are transferred;
- Fully diluted weighted average shares for the full-year 2024 of
211 million; and
- Park's Comparable portfolio as of February 27, 2024 and
does not take into account potential future acquisitions,
dispositions or any financing transactions, which could result in a
material change to Park’s outlook.
Park's full-year 2024 outlook is based on a number of factors,
many of which are outside the Company's control, including
uncertainty surrounding macro-economic factors, such as inflation,
changes in interest rates, supply chain disruptions and the
possibility of an economic recession or slowdown, as well as the
assumptions set forth above, all of which are subject to
change.
Supplemental Disclosures
In conjunction with this release, Park has furnished a financial
supplement with additional disclosures on its website. Visit
www.pkhotelsandresorts.com for more information. Park has no
obligation to update any of the information provided to conform to
actual results or changes in Park’s portfolio, capital structure or
future expectations.
Corporate Responsibility
In December 2023, Park published its 2023 Annual Corporate
Responsibility Report ("CR Report") which includes Global Reporting
Initiative ("GRI") and Sustainability Accounting Standards Board
("SASB") indices as well as its Task Force on Climate-Related
Financial Disclosures ("TCFD") report. The 2023 CR Report details
Park's energy, carbon, water and waste metrics and also highlights
the Company's enhanced sustainability and corporate responsibility
efforts, including the efforts of Park's subcommittees - the Green
Park Committee, the Park Cares Committee and the Diversity &
Inclusion Steering Committee.
Park participated in the 2023 Global Real Estate Sustainability
Benchmark ("GRESB") assessment for the fourth consecutive year,
receiving its highest score thus far, ranking in the top third of
all publicly listed GRESB participant companies in the Americas and
registering a three-point increase over 2022, continuing the
Company's trend of enhancing its overall environmental, social and
governance efforts and making meaningful improvements toward
decarbonization. Park was also recognized by Newsweek as one of
America's Most Trustworthy Companies for 2023 and recently,
recognized as one of America's Most Responsible Companies for 2024,
the fourth time Park has been included in the annual survey.
Additionally, Park received the 2023 Nareit Leader in the Light
Award for the hospitality sector for the second year in a row,
further highlighting its commitment to superior and consistent
sustainability practices. Park was also named an ENERGY STAR®
Partner of the Year in 2023 for Energy Management for its
outstanding contributions in the transition to clean energy
economy, and six of Park's properties earned the ENERGY STAR®
Certifications for Superior Energy Performance, including its
largest hotel, the Hilton Hawaiian Village Waikiki Beach Resort.
Also, 83% of Park's portfolio was Google Eco-certified via Hilton's
LightStay program.
Conference Call
Park will host a conference call for investors and other
interested parties to discuss fourth quarter and full-year 2023
results on February 28, 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’ Fourth
Quarter and Full-Year 2023 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.
Annual Stockholders Meeting
Park will host its 2024 Annual Stockholders Meeting on April 19,
2024 at 8:00 am ET at 1775 Tysons Boulevard, Tysons, Virginia.
Park's Board has established the close of business on February 29,
2024 as the record date for determining those stockholders that are
entitled to vote at the 2024 Annual Stockholders Meeting.
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 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,” “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.
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 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, 2022, 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.
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 43
premium-branded hotels and resorts (excluding the Hilton San
Francisco Hotels) with over 26,000 rooms primarily located in prime
city center and resort locations. Visit
www.pkhotelsandresorts.com for more information.
| Investor
Contact |
1775 Tysons Boulevard, 7th Floor |
| Ian Weissman |
Tysons, VA 22102 |
| + 1 571 302 5591 |
www.pkhotelsandresorts.com |
| |
|
PARK HOTELS & RESORTS
INC.CONSOLIDATED BALANCE
SHEETS(unaudited, in millions, except share and
per share data)
|
|
December 31, |
|
|
|
2023 |
|
|
|
2022 |
|
| ASSETS |
|
|
|
|
Property and equipment, net |
$ |
7,459 |
|
|
$ |
8,301 |
|
|
Contract asset |
|
760 |
|
|
|
— |
|
|
Intangibles, net |
|
42 |
|
|
|
43 |
|
|
Cash and cash equivalents |
|
717 |
|
|
|
906 |
|
|
Restricted cash |
|
33 |
|
|
|
33 |
|
|
Accounts receivable, net of allowance for doubtful accounts of $3
and $2 |
|
112 |
|
|
|
129 |
|
|
Prepaid expenses |
|
59 |
|
|
|
58 |
|
|
Other assets |
|
40 |
|
|
|
47 |
|
|
Operating lease right-of-use assets |
|
197 |
|
|
|
214 |
|
| TOTAL ASSETS (variable
interest entities
–$236and$237) |
$ |
9,419 |
|
|
$ |
9,731 |
|
| LIABILITIES AND
EQUITY |
|
|
|
|
Liabilities |
|
|
|
|
Debt |
$ |
3,765 |
|
|
$ |
3,892 |
|
|
Debt associated with hotels in receivership |
|
725 |
|
|
|
725 |
|
|
Accrued interest associated with hotels in receivership |
|
35 |
|
|
|
— |
|
|
Accounts payable and accrued expenses |
|
210 |
|
|
|
220 |
|
|
Dividends payable |
|
362 |
|
|
|
56 |
|
|
Due to hotel managers |
|
131 |
|
|
|
141 |
|
|
Other liabilities |
|
200 |
|
|
|
172 |
|
|
Operating lease liabilities |
|
223 |
|
|
|
234 |
|
|
Total liabilities (variable interest entities – $218 and $219) |
|
5,651 |
|
|
|
5,440 |
|
|
Stockholders' Equity |
|
|
|
|
Common stock, par value $0.01 per share, 6,000,000,000 shares
authorized, 210,676,264 shares issued and 209,987,581 shares
outstanding as of December 31, 2023 and 224,573,858 shares
issued and 224,061,745 shares outstanding as of December 31,
2022 |
|
2 |
|
|
|
2 |
|
|
Additional paid-in capital |
|
4,156 |
|
|
|
4,321 |
|
|
(Accumulated deficit) retained earnings |
|
(344 |
) |
|
|
16 |
|
|
Total stockholders' equity |
|
3,814 |
|
|
|
4,339 |
|
|
Noncontrolling interests |
|
(46 |
) |
|
|
(48 |
) |
|
Total equity |
|
3,768 |
|
|
|
4,291 |
|
| TOTAL LIABILITIES AND
EQUITY |
$ |
9,419 |
|
|
$ |
9,731 |
|
| |
|
|
|
|
|
|
|
PARK HOTELS & RESORTS
INC.CONSOLIDATED STATEMENTS OF
OPERATIONS(unaudited, in millions, except per
share data)
| |
Three Months Ended December 31, |
|
Year Ended December 31, |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
| Revenues |
|
|
|
|
|
|
|
|
Rooms |
$ |
397 |
|
|
$ |
406 |
|
|
$ |
1,653 |
|
|
$ |
1,559 |
|
|
Food and beverage |
|
178 |
|
|
|
175 |
|
|
|
696 |
|
|
|
606 |
|
|
Ancillary hotel |
|
61 |
|
|
|
63 |
|
|
|
264 |
|
|
|
261 |
|
|
Other |
|
21 |
|
|
|
21 |
|
|
|
85 |
|
|
|
75 |
|
|
Total revenues |
|
657 |
|
|
|
665 |
|
|
|
2,698 |
|
|
|
2,501 |
|
| |
|
|
|
|
|
|
|
| Operating
expenses |
|
|
|
|
|
|
|
|
Rooms |
|
106 |
|
|
|
110 |
|
|
|
449 |
|
|
|
408 |
|
|
Food and beverage |
|
124 |
|
|
|
128 |
|
|
|
501 |
|
|
|
449 |
|
|
Other departmental and support |
|
151 |
|
|
|
160 |
|
|
|
635 |
|
|
|
613 |
|
|
Other property |
|
59 |
|
|
|
50 |
|
|
|
241 |
|
|
|
223 |
|
|
Management fees |
|
31 |
|
|
|
31 |
|
|
|
126 |
|
|
|
115 |
|
|
Impairment and casualty loss |
|
— |
|
|
|
2 |
|
|
|
204 |
|
|
|
6 |
|
|
Depreciation and amortization |
|
94 |
|
|
|
65 |
|
|
|
287 |
|
|
|
269 |
|
|
Corporate general and administrative |
|
15 |
|
|
|
15 |
|
|
|
65 |
|
|
|
63 |
|
|
Other |
|
22 |
|
|
|
20 |
|
|
|
83 |
|
|
|
72 |
|
|
Total expenses |
|
602 |
|
|
|
581 |
|
|
|
2,591 |
|
|
|
2,218 |
|
| |
|
|
|
|
|
|
|
|
Gain on sale of assets, net |
|
— |
|
|
|
— |
|
|
|
15 |
|
|
|
13 |
|
|
Gain on derecognition of assets |
|
221 |
|
|
|
— |
|
|
|
221 |
|
|
|
— |
|
| |
|
|
|
|
|
|
|
| Operating
income |
|
276 |
|
|
|
84 |
|
|
|
343 |
|
|
|
296 |
|
| |
|
|
|
|
|
|
|
|
Interest income |
|
9 |
|
|
|
8 |
|
|
|
38 |
|
|
|
13 |
|
|
Interest expense |
|
(52 |
) |
|
|
(54 |
) |
|
|
(207 |
) |
|
|
(217 |
) |
|
Interest expense associated with hotels in receivership |
|
(14 |
) |
|
|
(8 |
) |
|
|
(45 |
) |
|
|
(30 |
) |
|
Equity in earnings from investments in affiliates |
|
2 |
|
|
|
9 |
|
|
|
11 |
|
|
|
15 |
|
|
Other (loss) gain, net |
|
— |
|
|
|
(2 |
) |
|
|
4 |
|
|
|
96 |
|
| |
|
|
|
|
|
|
|
| Income before income
taxes |
|
221 |
|
|
|
37 |
|
|
|
144 |
|
|
|
173 |
|
|
Income tax expense |
|
(33 |
) |
|
|
(2 |
) |
|
|
(38 |
) |
|
|
— |
|
| Net
income |
|
188 |
|
|
|
35 |
|
|
|
106 |
|
|
|
173 |
|
| Net income attributable to
noncontrolling interests |
|
(1 |
) |
|
|
(1 |
) |
|
|
(9 |
) |
|
|
(11 |
) |
| Net income
attributable to stockholders |
$ |
187 |
|
|
$ |
34 |
|
|
$ |
97 |
|
|
$ |
162 |
|
| |
|
|
|
|
|
|
|
| Earnings per
share: |
|
|
|
|
|
|
|
|
Earnings per share - Basic |
$ |
0.89 |
|
|
$ |
0.15 |
|
|
$ |
0.44 |
|
|
$ |
0.71 |
|
|
Earnings per share - Diluted |
$ |
0.88 |
|
|
$ |
0.15 |
|
|
$ |
0.44 |
|
|
$ |
0.71 |
|
| |
|
|
|
|
|
|
|
|
Weighted average shares outstanding – Basic |
|
209 |
|
|
|
224 |
|
|
|
214 |
|
|
|
228 |
|
|
Weighted average shares outstanding – Diluted |
|
210 |
|
|
|
224 |
|
|
|
215 |
|
|
|
228 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PARK HOTELS & RESORTS
INC.NON-GAAP FINANCIAL MEASURES
RECONCILIATIONSEBITDA AND ADJUSTED
EBITDA
| (unaudited, in millions) |
Three Months EndedDecember
31, |
|
Year EndedDecember 31, |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
| Net
income |
$ |
188 |
|
|
$ |
35 |
|
|
$ |
106 |
|
|
$ |
173 |
|
|
Depreciation and amortization expense |
|
94 |
|
|
|
65 |
|
|
|
287 |
|
|
|
269 |
|
|
Interest income |
|
(9 |
) |
|
|
(8 |
) |
|
|
(38 |
) |
|
|
(13 |
) |
|
Interest expense |
|
52 |
|
|
|
54 |
|
|
|
207 |
|
|
|
217 |
|
|
Interest expense associated with hotels in receivership |
|
14 |
|
|
|
8 |
|
|
|
45 |
|
|
|
30 |
|
|
Income tax expense |
|
33 |
|
|
|
2 |
|
|
|
38 |
|
|
|
— |
|
|
Interest expense, income tax and depreciation and amortization
included in equity in earnings from investments in affiliates |
|
1 |
|
|
|
2 |
|
|
|
8 |
|
|
|
9 |
|
| EBITDA |
|
373 |
|
|
|
158 |
|
|
|
653 |
|
|
|
685 |
|
|
Gain on sales of assets, net(1) |
|
— |
|
|
|
(9 |
) |
|
|
(15 |
) |
|
|
(22 |
) |
|
Gain on derecognition of assets(2) |
|
(221 |
) |
|
|
— |
|
|
|
(221 |
) |
|
|
— |
|
|
Gain on sale of investments in affiliates(3) |
|
— |
|
|
|
— |
|
|
|
(3 |
) |
|
|
(92 |
) |
|
Share-based compensation expense |
|
4 |
|
|
|
4 |
|
|
|
18 |
|
|
|
17 |
|
|
Casualty and impairment loss |
|
— |
|
|
|
2 |
|
|
|
204 |
|
|
|
6 |
|
|
Other items |
|
7 |
|
|
|
4 |
|
|
|
23 |
|
|
|
12 |
|
| Adjusted
EBITDA |
$ |
163 |
|
|
$ |
159 |
|
|
$ |
659 |
|
|
$ |
606 |
|
______________________________________________
(1) For the three months and year ended December 31, 2022,
includes a gain of $9 million on the sale of the DoubleTree Hotel
Las Vegas Airport included in equity in earnings (losses) from
investments in affiliates.
(2) For the three months and year ended December 31, 2023,
represents the gain from derecognizing the Hilton San Francisco
Hotels from Park's consolidated balance sheet in October 2023, when
the receiver took control of the hotels.
(3) Included in other gain (loss), net.
PARK HOTELS & RESORTS
INC.NON-GAAP FINANCIAL MEASURES
RECONCILIATIONSCOMPARABLE HOTEL ADJUSTED EBITDA
ANDCOMPARABLE HOTEL ADJUSTED EBITDA
MARGIN
| (unaudited, dollars in
millions) |
Three Months EndedDecember
31, |
|
Year EndedDecember 31, |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
| Adjusted
EBITDA |
$ |
163 |
|
|
$ |
159 |
|
|
$ |
659 |
|
|
$ |
606 |
|
|
Less: Adjusted EBITDA from investments in affiliates |
|
(5 |
) |
|
|
(5 |
) |
|
|
(24 |
) |
|
|
(25 |
) |
|
Add: All other(1) |
|
11 |
|
|
|
12 |
|
|
|
51 |
|
|
|
49 |
|
| Hotel Adjusted
EBITDA |
|
169 |
|
|
|
166 |
|
|
|
686 |
|
|
|
630 |
|
|
Less: Adjusted EBITDA from hotels disposed of |
|
— |
|
|
|
(4 |
) |
|
|
(3 |
) |
|
|
(18 |
) |
|
Less: Adjusted EBITDA from the Hilton San Francisco Hotels |
|
2 |
|
|
|
5 |
|
|
|
(3 |
) |
|
|
11 |
|
| Comparable Hotel
Adjusted EBITDA |
$ |
171 |
|
|
$ |
167 |
|
|
$ |
680 |
|
|
$ |
623 |
|
| |
|
|
|
|
|
|
|
| |
Three Months EndedDecember
31, |
|
Year EndedDecember 31, |
| |
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
| Total
Revenues |
$ |
657 |
|
|
$ |
665 |
|
|
$ |
2,698 |
|
|
$ |
2,501 |
|
|
Less: Other revenue |
|
(21 |
) |
|
|
(21 |
) |
|
|
(85 |
) |
|
|
(75 |
) |
|
Less: Revenues from hotels disposed of |
|
— |
|
|
|
(14 |
) |
|
|
(10 |
) |
|
|
(65 |
) |
|
Less: Revenues from the Hilton San Francisco Hotels |
|
(17 |
) |
|
|
(40 |
) |
|
|
(162 |
) |
|
|
(145 |
) |
| Comparable Hotel
Revenues |
$ |
619 |
|
|
$ |
590 |
|
|
$ |
2,441 |
|
|
$ |
2,216 |
|
| |
Three Months Ended December 31, |
|
Year Ended December 31, |
| |
|
2023 |
|
|
|
2022 |
|
|
Change(2) |
|
|
2023 |
|
|
|
2022 |
|
|
Change(2) |
| Total Revenues |
$ |
657 |
|
|
$ |
665 |
|
|
(1.0)% |
|
$ |
2,698 |
|
|
$ |
2,501 |
|
|
7.9 |
% |
|
Operating income |
$ |
276 |
|
|
$ |
84 |
|
|
229.6 |
% |
|
$ |
343 |
|
|
$ |
296 |
|
|
16.1 |
% |
| Operating income
margin(2) |
|
42.0 |
% |
|
|
12.6 |
% |
|
2,940 bps |
|
|
12.7 |
% |
|
|
11.8 |
% |
|
90 bps |
| |
|
|
|
|
|
|
|
|
|
|
|
| Comparable Hotel Revenues |
$ |
619 |
|
|
$ |
590 |
|
|
4.9 |
% |
|
$ |
2,441 |
|
|
$ |
2,216 |
|
|
10.2 |
% |
| Comparable Hotel Adjusted
EBITDA |
$ |
171 |
|
|
$ |
167 |
|
|
2.1 |
% |
|
$ |
680 |
|
|
$ |
623 |
|
|
9.1 |
% |
| Comparable Hotel Adjusted
EBITDA margin(2) |
|
27.5 |
% |
|
|
28.2 |
% |
|
(70) bps |
|
|
27.8 |
% |
|
|
28.1 |
% |
|
(30) 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 consolidated statements of
operations. (2) Percentages are calculated based on
unrounded numbers.
PARK HOTELS & RESORTS
INC.NON-GAAP FINANCIAL MEASURES
RECONCILIATIONSNAREIT FFO AND ADJUSTED
FFO
(unaudited, in millions, except per share data)
| |
Three Months EndedDecember
31, |
|
Year EndedDecember 31, |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
| Net income
attributable to stockholders |
$ |
187 |
|
|
$ |
34 |
|
|
$ |
97 |
|
|
$ |
162 |
|
|
Depreciation and amortization expense |
|
94 |
|
|
|
65 |
|
|
|
287 |
|
|
|
269 |
|
|
Depreciation and amortization expense attributable to
noncontrolling interests |
|
(1 |
) |
|
|
(1 |
) |
|
|
(4 |
) |
|
|
(4 |
) |
|
Gain on sales of assets, net |
|
— |
|
|
|
— |
|
|
|
(15 |
) |
|
|
(13 |
) |
|
Gain on derecognition of assets(1) |
|
(221 |
) |
|
|
— |
|
|
|
(221 |
) |
|
|
— |
|
|
Gain on sale of investments in affiliates(2) |
|
— |
|
|
|
— |
|
|
|
(3 |
) |
|
|
(92 |
) |
|
Impairment loss |
|
— |
|
|
|
— |
|
|
|
202 |
|
|
|
— |
|
|
Equity investment adjustments: |
|
|
|
|
|
|
|
|
Equity in earnings from investments in affiliates |
|
(2 |
) |
|
|
(9 |
) |
|
|
(11 |
) |
|
|
(15 |
) |
|
Pro rata FFO of investments in affiliates |
|
2 |
|
|
|
1 |
|
|
|
14 |
|
|
|
12 |
|
| Nareit FFO
attributable to stockholders |
|
59 |
|
|
|
90 |
|
|
|
346 |
|
|
|
319 |
|
|
Casualty loss |
|
— |
|
|
|
2 |
|
|
|
2 |
|
|
|
6 |
|
|
Share-based compensation expense |
|
4 |
|
|
|
4 |
|
|
|
18 |
|
|
|
17 |
|
|
Interest expense associated with hotels in receivership(3) |
|
12 |
|
|
|
— |
|
|
|
20 |
|
|
|
— |
|
|
Other items(4) |
|
35 |
|
|
|
5 |
|
|
|
53 |
|
|
|
10 |
|
| Adjusted FFO
attributable to stockholders |
$ |
110 |
|
|
$ |
101 |
|
|
$ |
439 |
|
|
$ |
352 |
|
| Nareit FFO per share –
Diluted(5) |
$ |
0.28 |
|
|
$ |
0.40 |
|
|
$ |
1.61 |
|
|
$ |
1.40 |
|
| Adjusted FFO per share
– Diluted(5) |
$ |
0.52 |
|
|
$ |
0.45 |
|
|
$ |
2.04 |
|
|
$ |
1.54 |
|
| Weighted average
shares outstanding – Diluted |
|
210 |
|
|
|
224 |
|
|
|
215 |
|
|
|
228 |
|
______________________________________________
(1) For the three months and year ended December 31, 2023,
represents the gain from derecognizing the Hilton San Francisco
Hotels from Park's consolidated balance sheet in October 2023, when
the receiver took control of the hotels.
(2) Included in other gain (loss), net.
(3) Reflects incremental default interest expense and late
payment administrative fees associated with the default of the SF
Mortgage Loan beginning in June 2023 and all interest expense that
has accrued since the Hilton San Francisco Hotels were placed into
receivership at the end of October 2023.
(4) For the three months and year ended December 31, 2023,
includes $28 million of income tax expense associated with the
effective exit from the Hilton San Francisco Hotels.
(5) Per share amounts are calculated based on unrounded
numbers.
PARK HOTELS & RESORTS
INC.NON-GAAP FINANCIAL MEASURES
RECONCILIATIONSNET DEBT
| (unaudited, in millions) |
|
| |
ComparableDecember 31,
2023 |
|
Debt |
$ |
3,765 |
|
| Add: unamortized deferred
financing costs and discount |
|
22 |
|
| Less: unamortized premium |
|
(1 |
) |
|
Debt, excluding unamortized deferred financing cost, premiums and
discounts |
|
3,786 |
|
| Add: Park's share of
unconsolidated affiliates debt, excluding unamortized deferred
financing costs |
|
164 |
|
| Less: cash and cash
equivalents(1) |
|
(555 |
) |
| Less: restricted cash |
|
(33 |
) |
| Net debt |
$ |
3,362 |
|
______________________________________________
(1) Considers the additional distribution of $162 million
(or approximately $0.77 per share) in connection with the effective
exit from the Hilton San Francisco Hotels. The cash dividend of
$0.77 per share was declared on October 27, 2023 and paid on
January 16, 2024 to stockholders of record as of December 29,
2023.
PARK HOTELS & RESORTS
INC.NON-GAAP FINANCIAL MEASURES
RECONCILIATIONSOUTLOOK – EBITDA, ADJUSTED EBITDA,
COMPARABLE HOTEL ADJUSTED EBITDAAND COMPARABLE
HOTEL ADJUSTED EBITDA MARGIN
| (unaudited, in millions) |
Year Ending |
| |
December 31, 2024 |
|
|
Low Case |
|
High Case |
|
Net income |
$ |
146 |
|
|
$ |
186 |
|
|
Depreciation and amortization expense |
|
258 |
|
|
|
258 |
|
|
Interest income |
|
(17 |
) |
|
|
(17 |
) |
|
Interest expense |
|
209 |
|
|
|
209 |
|
|
Interest expense associated with hotels in receivership |
|
55 |
|
|
|
55 |
|
|
Income tax expense |
|
7 |
|
|
|
7 |
|
|
Interest expense, income tax and depreciation and amortization
included in equity in earnings from investments in affiliates |
|
7 |
|
|
|
7 |
|
| EBITDA |
|
665 |
|
|
|
705 |
|
|
Gain on derecognition of assets |
|
(55 |
) |
|
|
(55 |
) |
|
Share-based compensation expense |
|
17 |
|
|
|
17 |
|
|
Other items |
|
18 |
|
|
|
18 |
|
| Adjusted
EBITDA |
|
645 |
|
|
|
685 |
|
|
Less: Adjusted EBITDA from investments in affiliates |
|
(22 |
) |
|
|
(23 |
) |
|
Add: All other |
|
59 |
|
|
|
59 |
|
| Comparable Hotel
Adjusted EBITDA |
$ |
682 |
|
|
$ |
721 |
|
| |
|
|
|
| |
Year Ending |
| |
December 31, 2024 |
|
|
Low Case |
|
High Case |
| Total
Revenues |
$ |
2,662 |
|
|
$ |
2,711 |
|
|
Less: Other revenue |
|
(121 |
) |
|
|
(121 |
) |
| Comparable Hotel
Revenues |
$ |
2,541 |
|
|
$ |
2,590 |
|
| |
|
|
|
| |
Year Ending |
| |
December 31, 2024 |
| |
Low Case |
|
High Case |
| Total Revenues |
$ |
2,662 |
|
|
$ |
2,711 |
|
| Operating income |
$ |
397 |
|
|
$ |
436 |
|
| Operating income
margin(1) |
|
14.9 |
% |
|
|
16.1 |
% |
| |
|
|
|
| Comparable Hotel Revenues |
$ |
2,541 |
|
|
$ |
2,590 |
|
| Comparable Hotel Adjusted
EBITDA |
$ |
682 |
|
|
$ |
721 |
|
| Comparable Hotel Adjusted
EBITDA margin(1) |
|
26.8 |
% |
|
|
27.8 |
% |
______________________________________________
(1) Percentages are calculated based on unrounded
numbers.
PARK HOTELS & RESORTS
INC.NON-GAAP FINANCIAL MEASURES
RECONCILIATIONSOUTLOOK – NAREIT FFO ATTRIBUTABLE
TO STOCKHOLDERS ANDADJUSTED FFO ATTRIBUTABLE TO
STOCKHOLDERS
| (unaudited, in millions except
per share data) |
Year Ending |
| |
December 31, 2024 |
| |
Low Case |
|
High Case |
|
Net income attributable to stockholders |
$ |
134 |
|
|
$ |
174 |
|
|
Depreciation and amortization expense |
|
258 |
|
|
|
258 |
|
|
Depreciation and amortization expense attributable to
noncontrolling interests |
|
(5 |
) |
|
|
(5 |
) |
|
Gain on derecognition of assets |
|
(55 |
) |
|
|
(55 |
) |
|
Equity investment adjustments: |
|
|
|
|
Equity in earnings from investments in affiliates |
|
(6 |
) |
|
|
(7 |
) |
|
Pro rata FFO of equity investments |
|
13 |
|
|
|
13 |
|
| Nareit FFO
attributable to stockholders |
|
339 |
|
|
|
378 |
|
|
Share-based compensation expense |
|
17 |
|
|
|
17 |
|
|
Interest expense associated with hotels in receivership |
|
55 |
|
|
|
55 |
|
|
Other items |
|
15 |
|
|
|
17 |
|
| Adjusted FFO
attributable to stockholders |
$ |
426 |
|
|
$ |
467 |
|
| Adjusted FFO per share
– Diluted(1) |
$ |
2.02 |
|
|
$ |
2.22 |
|
| Weighted average
diluted shares outstanding |
|
211 |
|
|
|
211 |
|
______________________________________________
(1) Per share amounts are calculated based on unrounded
numbers.
PARK HOTELS & RESORTS
INC.DEFINITIONS
Comparable
The Company presents certain data for
its consolidated hotels on a Comparable basis as supplemental
information for investors: Comparable Hotel Revenues, Comparable
RevPAR, Comparable Occupancy, Comparable ADR, Comparable Hotel
Adjusted EBITDA and Comparable Hotel Adjusted EBITDA Margin. The
Company presents Comparable hotel results to help the Company and
its investors evaluate the ongoing operating performance of its
hotels. The Company’s Comparable metrics include results from
hotels that were active and operating in Park's portfolio since
January 1st of the previous year and property acquisitions as
though such acquisitions occurred on the earliest period presented.
Additionally, Comparable metrics exclude results from property
dispositions that have occurred through February 27, 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
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.
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.
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.
Park Hotels and Resorts (NYSE:PK)
Gráfica de Acción Histórica
De Nov 2024 a Dic 2024
Park Hotels and Resorts (NYSE:PK)
Gráfica de Acción Histórica
De Dic 2023 a Dic 2024
