Park Hotels & Resorts Inc. (“Park” or the “Company”) (NYSE:
PK) today announced results for the second quarter ended
June 30, 2018. Highlights include:
Second Quarter 2018
Highlights
- Comparable RevPAR was $185.58, an
increase of 4.3% from the same period in 2017;
- Net income was $218 million and net
income attributable to stockholders was $216 million;
- Adjusted EBITDA was $228 million, an
increase of 5.1% over the same period in 2017;
- Adjusted FFO attributable to
stockholders was $187 million, an increase of 8.1% over the same
period in 2017;
- Diluted earnings per share was
$1.07;
- Diluted Adjusted FFO per share was
$0.93, an increase of 14.8% over the same period in 2017;
- Comparable Hotel Adjusted EBITDA margin
was 31.9%, an increase of 150 bps from the same period in
2017;
- Completed the sale of a joint venture
ownership interest in the Hilton Berlin at an EBITDA multiple of
20x, for which Park’s pro rata share of the sales price was $140
million.
Thomas J. Baltimore, Jr., Chairman, President and Chief
Executive Officer, stated, “I am extremely pleased to announce a
very strong quarter, which highlights the benefits of a robust
group base for our portfolio. We continue to execute against our
internal growth strategies of grouping up, improving margins and
recycling capital. Group pace continues to accelerate, up almost 5%
for the year and improving to over 9% for 2019, while margins
increased 150 bps during the quarter. We continue to take advantage
of strong demand for hotel real estate by selling our JV interest
in the Hilton Berlin at a significant EBITDA multiple of 20x, while
initiating the second phase of our non-core hotel sales. Overall,
we are encouraged by our results and while we expect our second
quarter to be our strongest this year, our outlook remains positive
for the second half with fundamentals continuing to improve and the
transaction market accelerating.”
Selected Statistical and Financial
Information(unaudited, amounts in millions, except per
share data, Comparable RevPAR and Comparable ADR)
Three Months Ended June 30, Six Months
Ended June 30, 2018 2017
Change 2018 2017 Change
Comparable RevPAR $ 185.58 $ 177.86 4.3 % $ 175.63 $ 170.89
2.8 % Comparable Occupancy 86.1 % 85.1 % 1.0 % pts 82.3 %
81.8 % 0.5 % pts Comparable ADR $ 215.58 $ 209.07 3.1 % $ 213.33 $
208.86 2.1 % Net income(1) $ 218 $ 115 89.6 % $ 367 $ 2,465
NM(2) Net income attributable to stockholders(1) $ 216 $ 112 92.9 %
$ 366 $ 2,462 NM(2) Adjusted EBITDA $ 228 $ 217 5.1 % $ 402
$ 394 2.0 % Comparable Hotel Adjusted EBITDA $ 215 $ 193 11.4 % $
374 $ 352 6.3 % Comparable Hotel Adjusted EBITDA margin 31.9 % 30.4
% 150 bps 29.6 % 28.8 % 80 bps Adjusted FFO attributable to
stockholders $ 187 $ 173 8.1 % $ 324 $ 311 4.2 % Earnings
per share - Diluted(1)(3) $ 1.07 $ 0.52 NM(2) $ 1.77 $ 11.48 NM(2)
Adjusted FFO per share - Diluted(3) $ 0.93 $ 0.81 14.8 % $ 1.57 $
1.45 8.3 % Weighted average shares outstanding - Diluted 201 215
(14 ) 206 214 (8 )
__________________________
(1) The three and six months ended June 30, 2017 includes an
income tax benefit from the derecognition of deferred tax
liabilities of $24 million and $2,312 million, respectively,
associated with Park’s intent to elect REIT status. (2) Percentage
change is not meaningful. (3) Per share amounts are calculated
based on unrounded numbers.
Top 10 Hotels
RevPAR at Park’s Top 10 Hotels, which account for approximately
70% of Hotel Adjusted EBITDA, increased 6% during the quarter and
3.8% year-to-date, primarily due to increases in occupancy and
rate, as compared to the same period in 2017. Highlights within the
Top 10 Hotels include:
- Hilton Hawaiian Village Waikiki
Beach Resort: RevPAR growth was 3.3% for the quarter and 2.1%
year-to-date from an increase in both group business, which was up
over 9% from the second quarter last year, and transient
business;
- New York Hilton Midtown: RevPAR
increased 5.0% for the quarter and 2.5% year-to-date, from an
increase in group business of more than 33% versus the second
quarter last year;
- Hilton San Francisco Union Square /
Parc 55 San Francisco – a Hilton Hotel: Combined RevPAR
increased 13.7% for the quarter and 6.3% year-to-date from
increases in group business of over 60% combined for the quarter,
following the partial completion of renovations at the Moscone
Center and increased transient rate;
- Hilton Waikoloa Village: Despite
some disruption caused by the eruption of the Kilauea volcano,
RevPAR growth was 6.9% for the quarter and 8.4% year-to-date from
increases in both group and transient rates over the same periods
in the prior year;
- Hilton New Orleans Riverside:
RevPAR growth was 2.2% for the quarter and 2.7% year-to-date from
an increase in occupancy from transient business;
- Hilton Chicago: RevPAR increased
10.5% during the quarter and 4.7% year-to-date benefiting from a
more than 20% increase in group business from the second quarter of
last year;
- Hilton Orlando Bonnet Creek /
Waldorf Astoria Orlando: Combined RevPAR decreased 3.1% for the
quarter and increased 2.5% year-to-date. The decrease in the second
quarter resulted from a decrease in occupancy at both hotels,
offset by an increase in group rate during the quarter and overall
group business year-to-date;
- Casa Marina, A Waldorf Astoria
Resort: RevPAR declined 2.4% during the quarter and 1.3%
year-to-date from disruptions following the start of the next phase
of renovations during the second quarter related to Hurricane Irma
and from Tropical Storm Alberto over Memorial Day weekend resulting
in declines in transient business, which was partially offset by an
increase in group business.
Total Consolidated Comparable
Hotels
Comparable RevPAR increased 4.3% for the quarter and 2.8%
year-to-date primarily due to a 3.1% and 2.1% increase in rate,
respectively, and 1.0% pts and 0.5% pts increase in occupancy,
respectively, as compared to the same periods in 2017. Group rooms
revenue increased 4.2% for the quarter and 2.6% year-to-date,
offset by a 4.7% and 1.8% decline in transient rooms revenue,
respectively, as compared to the same periods in 2017. The overall
increase in RevPAR was a result of both increases in occupancy and
ADR at Park’s Northern California, Hawaii, Chicago, and New York
hotels during those periods, primarily attributable to increases in
group business at urban and resort hotels in these markets. The
overall increase in RevPAR for Park’s comparable hotels during both
periods was partially offset by a decline in RevPAR for its
Southern California hotels primarily from renovation displacement
at the Hilton Santa Barbara Beachfront Resort; these renovations
were completed in April 2018.
Hurricanes Irma and
Maria
In September 2017, Hurricanes Irma and Maria caused damage and
disruption at the Caribe Hilton in San Juan, Puerto Rico and Park’s
two hotels in Key West, Florida. Park expects the Caribe Hilton to
remain closed for almost all of 2018 and the results of operations
of that property are presented as non-comparable. Full year 2017
EBITDA at the Caribe Hilton, prior to the hurricanes, was projected
to be $8 million.
Park expects that insurance proceeds, excluding any applicable
insurance deductibles, will be sufficient to cover a significant
portion of the property damage to the hotels and loss of business.
To date, Park has received $65 million of insurance proceeds for
both Key West hotels and the Caribe Hilton, including $25 million
received in the second quarter. These insurance proceeds included
$7 million received for business interruption at the Caribe Hilton
in the second quarter, which, when netted against fees and
expenses, equates to approximately $5 million of Adjusted EBITDA
for the second quarter. An additional advance of $25 million for
the Caribe Hilton has been submitted, and Park expects to receive
cash proceeds during the third quarter.
Dispositions
During the six months ended June 30, 2018, Park completed the
sale of the following 12 consolidated hotels in four separate
transactions (the results of these hotels are presented as
non-comparable), and its interests in one unconsolidated joint
venture:
Hotel Location
Month Sold Room Count Sales Price Hilton
Rotterdam Rotterdam, Netherlands January 2018 254 $ 62.2 254 62.2
Embassy Suites Portfolio(1) Embassy Suites by Hilton Kansas
City Overland Park Overland Park, Kansas February 2018 199 25.0
Embassy Suites by Hilton San Rafael Marin County San Rafael,
California February 2018 236 37.9 Embassy Suites by Hilton Atlanta
Perimeter Center Atlanta, Georgia February 2018 241 32.9 676
95.8
UK Portfolio(1) Hilton Blackpool Blackpool, United
Kingdom February 2018 278 N/A Hilton Belfast Belfast, United
Kingdom February 2018 198 N/A Hilton London Angel Islington London,
United Kingdom February 2018 188 N/A Hilton Edinburgh Grosvenor
Edinburgh, United Kingdom February 2018 184 N/A Hilton Coylumbridge
Aviemore, United Kingdom February 2018 175 N/A Hilton Bath City
Bath, United Kingdom February 2018 173 N/A Hilton Milton Keynes
Milton Keynes, United Kingdom February 2018 138 N/A 1,334 188.5
Hilton Durban Durban, South Africa February 2018 328 32.5
Hilton Berlin(2) Berlin, Germany May 2018 601 140.0 929
172.5
Total 3,193 $ 519.0
__________________________
(1) Hotels were sold as a portfolio. (2) Unconsolidated
joint venture in which Park owned a 40% interest. Total sales price
was $350 million.
Balance Sheet and
Liquidity
Park had the following debt outstanding as of June 30,
2018:
(unaudited, dollars in millions)
Debt
Collateral Interest Rate Maturity
Date As of
June 30, 2018
Fixed Rate Debt Mortgage loan DoubleTree Hotel
Spokane City Center 3.55% October 2020 $ 12
Commercial mortgage-backed securities
loan
Hilton San Francisco Union Square, Parc 55 San Francisco - a
Hilton Hotel 4.11% November 2023 725
Commercial mortgage-backed securities
loan
Hilton Hawaiian Village Beach Resort 4.20%
November 2026 1,275 Mortgage loan Hilton Santa
Barbara Beachfront Resort 4.17% December 2026
165 Capital lease obligations 3.07%
2021 to 2022 1
Total Fixed Rate Debt
4.16%(1)
2,178 Variable Rate Debt
Revolving credit facility(2) Unsecured L + 1.60%
December 2021(3) — Term loan Unsecured
L + 1.55% December 2021 750 Mortgage
loan DoubleTree Hotel Ontario Airport L + 2.25%
May 2022(3) 30
Total Variable Rate Debt
3.67%(1) 780 Less: unamortized deferred
financing costs and discount
(11 )
Total Debt(4)
4.03%(1)
$ 2,947
__________________________
(1) Calculated on a weighted average basis. (2) $1 billion
available. (3) Assumes the exercise of all extensions that are
exercisable solely at Park’s option. (4) Excludes $234 million of
Park’s share of debt of its unconsolidated joint ventures.
Total cash and cash equivalents were $438 million as of
June 30, 2018, including $17 million of restricted cash.
Capital Investments
Park invested $33 million in the second quarter (and $81 million
year-to-date) on capital improvements at its hotels, including $16
million on improvements made to guest rooms, lobbies and other
guest-facing areas. Key projects include:
- New York Hilton Midtown: $6
million primarily on phase four of guest room renovations;
- Hilton Santa Barbara Beachfront
Resort: $5 million primarily on the conversion from a
DoubleTree to a Hilton; which was completed in April 2018;
- Hilton Boston Logan Airport: $3
million primarily on phase one of guest room renovations;
- Hilton Waikoloa Village: $2
million primarily on restaurant renovations;
- Hilton San Francisco Union
Square: $2 million primarily on the final phase of guest room
renovations; and
- Hilton Short Hills: $1 million
primarily on renovations to add 10 new rooms to the property, new
bathrooms and soft goods.
Dividends
Park declared a second quarter 2018 cash dividend of $0.43 per
share to stockholders of record as of June 29, 2018. Additionally,
in May 2018, following the sale of the Hilton Berlin, Park declared
a special cash dividend of $0.45 per share to stockholders of
record as of June 29, 2018. Both the second quarter 2018 dividend
and the special dividend were paid on July 16, 2018.
On July 26, 2018, Park declared a third quarter 2018 cash
dividend of $0.43 per share to be paid on October 15, 2018 to
stockholders of record as of September 28, 2018.
Full Year 2018 Outlook
Park has updated its 2018 guidance that was previously provided
on May 3, 2018. Park now expects the full year 2018 operating
results to be as follows:
(unaudited, dollars in millions, except per share amounts)
2018 Outlook
as of August 1, 2018
2018 Outlook
as of May 3, 2018
Change at Midpoint Metric Low
High Low High Comparable
RevPAR Growth 2.0 % 3.0 % 0.5 % 2.5 % 1.0 % Net income $ 465
$ 493 $ 336 $ 369 $ 127 Net income attributable to stockholders $
461 $ 486 $ 331 $ 364 $ 126 Diluted earnings per share(1) $ 2.26 $
2.38 $ 1.62 $ 1.78 $ 0.62 Adjusted EBITDA $ 730 $ 760 $ 710
$ 750 $ 15 Comparable Hotel Adjusted EBITDA margin change 0 bps 60
bps (70 ) bps 30 bps 50 bps Adjusted FFO per share - Diluted(1) $
2.84 $ 2.96 $ 2.76 $ 2.92 $ 0.06 . (1) Per share amounts are
calculated based on unrounded numbers.
Full year 2018 guidance is based in part on the following
assumptions:
- General and administrative expenses are
projected to be $44 million, excluding $16 million of non-cash
share-based compensation expense, $4 million of transition expense
and $1 million of severance expense;
- Fully diluted weighted average shares
are expected to be 203.8 million;
- Includes $8 million of Adjusted EBITDA
from the Caribe Hilton representing a full year of operations, of
which $5 million was recognized during the second quarter, for
which Park expects to be covered by business interruption insurance
resulting from the hotel being closed for most of 2018 following
the damage caused by Hurricane Maria; and
- Excludes potential future acquisitions
and dispositions, which could result in a material change to Park’s
outlook.
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 2018 results on
Thursday, August 2, 2018 beginning at 10:00 a.m. Eastern Time.
Participants may listen to the live webcast by logging onto the
Investors section of the website at www.pkhotelsandresorts.com.
Alternatively, participants may listen to the live call by dialing
(877) 451-6152 in the United States or (201) 389-0879
internationally, and requesting Park Hotels & Resorts’ Second
Quarter 2018 Earnings Conference Call. Participants are encouraged
to dial into the call or link to the webcast at least ten minutes
prior to the scheduled start time.
A replay and transcript of the webcast will be available within
24 hours after the live event on the Investors section of Park’s
website.
Forward-Looking
Statements
This press release contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. Forward-looking statements include, but are not limited
to, statements related to Park’s current expectations regarding the
performance of its business, financial results, liquidity and
capital resources, the effects of competition and the effects of
future legislation or regulations, the expected completion of
anticipated acquisitions and dispositions, the declaration and
payment of future dividends and other non-historical statements.
Forward-looking statements include all statements that are not
historical facts, and in some cases, can be identified by the use
of forward-looking terminology such as the words “outlook,”
“believes,” “expects,” “potential,” “continues,” “may,” “will,”
“should,” “could,” “seeks,” “projects,” “predicts,” “intends,”
“plans,” “estimates,” “anticipates” or the negative version of
these words or other comparable words.
Forward-looking statements involve risks, uncertainties and
assumptions. Actual results may differ materially from those
expressed in these forward-looking statements. 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, 2017, as such
factors may be updated from time to time in Park’s periodic filings
with the SEC, which are accessible on the SEC’s website at
www.sec.gov. Except as required by law, Park undertakes no
obligation to update or revise publicly any forward-looking
statements, whether as a result of new information, future events
or otherwise.
Non-GAAP Financial
Measures
Park presents certain non-GAAP financial measures in this press
release, including NAREIT FFO attributable to stockholders Adjusted
FFO attributable to stockholders, EBITDA, Adjusted EBITDA, Hotel
Adjusted EBITDA, and Hotel Adjusted EBITDA margin. These non-GAAP
financial measures should be considered along with, but not as
alternatives to, net income (loss) as a measure of its operating
performance. Please see the schedules included in this press
release including the “Definitions” section for additional
information and reconciliations of such non-GAAP financial
measures.
About Park
Park is a leading lodging REIT with a diverse portfolio of
hotels and resorts with significant underlying real estate value.
Park’s portfolio consists of 54 premium-branded hotels and resorts
with over 32,000 rooms, a majority of which are located in prime
United States markets with high barriers to entry.
PARK HOTELS & RESORTS INC. CONDENSED
CONSOLIDATED BALANCE SHEETS (unaudited, in millions, except
share and per share data) June 30, December
31, 2018 2017 ASSETS Property and
equipment, net $ 7,999 $ 8,311 Assets held for sale, net — 37
Investments in affiliates 56 84 Goodwill 607 606 Intangibles, net
27 41 Cash and cash equivalents 421 364 Restricted cash 17 15
Accounts receivable, net 180 125 Prepaid expenses 46 48 Other
assets 98 83
TOTAL ASSETS $ 9,451 $ 9,714
LIABILITIES AND EQUITY Liabilities Debt $ 2,947 $
2,961 Accounts payable and accrued expenses 181 215 Due to hotel
manager 107 141 Due to Hilton Grand Vacations 138 138 Deferred
income tax liabilities 36 65 Other liabilities 285
232 Total liabilities 3,694 3,752
Stockholders' Equity
Common stock, par value $0.01 per share,
6,000,000,000 shares authorized, 201,253,015 shares issued and
201,178,717 shares outstanding as of June 30, 2018 and 214,873,778
shares issued and 214,845,244 shares outstanding as of December 31,
2017
2 2 Additional paid-in capital 3,581 3,825 Retained earnings 2,231
2,229 Accumulated other comprehensive loss (8 ) (45 )
Total stockholders' equity 5,806 6,011 Noncontrolling interests
(49 ) (49 ) Total equity 5,757 5,962
TOTAL LIABILITIES AND EQUITY $ 9,451 $ 9,714
PARK HOTELS & RESORTS INC. CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS (unaudited, in millions, except
share and per share data) Three Months Ended
Six Months Ended June 30, June 30, 2018
2017 2018 2017 Revenues
Rooms $ 451 $ 469 $ 869 $ 901 Food and beverage 205 200 388 392
Ancillary hotel 58 48 108 95 Other 17 16 34
29 Total revenues 731 733 1,399 1,417
Operating
expenses Rooms 112 118 224 231 Food and beverage 131 132 257
263 Other departmental and support 155 166 311 330 Other
property-level 50 51 103 102 Management and franchise fees 39 39 72
73 Depreciation and amortization 69 73 139 143 Corporate general
and administrative 15 16 31 30 Other 18 15 35
28 Total expenses 589 610 1,172 1,200 Gain on
sales of assets, net 7 — 96 —
Operating income 149
123 323 217 Interest income 1 1 2 1 Interest expense (31 )
(31 ) (62 ) (61 ) Equity in earnings from investments in affiliates
8 8 12 12 Loss on foreign currency transactions (4 ) (4 ) (3 ) (3 )
Other gain (loss), net 108 (1 ) 108
(1 )
Income before income taxes 231 96 380 165
Income tax (expense) benefit (13 ) 19 (13 )
2,300
Net income 218 115 367 2,465
Net income attributable to noncontrolling interests
(2 ) (3 ) (1 ) (3 )
Net income
attributable to stockholders $ 216 $ 112 $ 366 $ 2,462
Earnings per share: Earnings per share - Basic $ 1.07
$ 0.52 $ 1.77 $ 11.79 Earnings per share - Diluted $ 1.07 $ 0.52 $
1.77 $ 11.48 Weighted average shares outstanding - Basic 200
214 205 208 Weighted average shares outstanding - Diluted 201 215
206 214 Dividends declared per common share $ 0.88 $ 0.43 $
1.31 $ 0.86
PARK HOTELS & RESORTS INC.
NON-GAAP FINANCIAL MEASURES RECONCILIATIONS EBITDA AND
ADJUSTED EBITDA (unaudited, in millions) Three
Months Ended Six Months Ended June 30, June
30, 2018 2017 2018
2017 Net income $ 218 $ 115 $ 367 $ 2,465
Depreciation and amortization expense 69 73 139 143 Interest income
(1 ) (1 ) (2 ) $ (1 ) Interest expense 31 31 62 61 Income tax
expense (benefit) 13 (19 ) 13 (2,300 )
Interest expense, income tax and
depreciation and amortization included in equity in earnings from
investments in affiliates
5 7 12 12
EBITDA 335 206 591 380
Gain on sales of assets, net (7 ) — (96 ) — Gain on sale of
investments in affiliates(1) (108 ) — (108 ) — Loss on foreign
currency transactions 4 4 3 3 Transition expense — 1 2 2 Severance
expense 1 — 1 — Share-based compensation expense 4 4 8 7 Other
items (1 ) 2 1 2
Adjusted EBITDA
$ 228 $ 217 $ 402 $ 394
__________________________
(1)
Included in other gain (loss), net.
PARK HOTELS & RESORTS INC. NON-GAAP
FINANCIAL MEASURES RECONCILIATIONS COMPARABLE HOTEL ADJUSTED
EBITDA AND COMPARABLE HOTEL ADJUSTED EBITDA MARGIN
(unaudited, dollars in millions) Three Months
Ended Six Months Ended June 30, June 30,
2018 2017 2018 2017
Adjusted EBITDA $ 228 $ 217 $ 402 $ 394 Less: Adjusted
EBITDA from investments in affiliates 14 15 26 24 Less: All
other(1) (14 ) (11 ) (26 ) (23 )
Hotel Adjusted EBITDA 228 213 402 393 Less: Adjusted EBITDA
from non-comparable hotels 13 20 28 41
Comparable Hotel Adjusted EBITDA $ 215 $ 193 $ 374 $ 352
(1) Includes other revenue and other
expense, non-income taxes on REIT leases included in other
property-level expense and corporate general and administrative
expense.
Three Months Ended Six Months Ended June
30, June 30, 2018 2017 2018
2017 Total Revenues $ 731 $ 733 $ 1,399 $ 1,417 Less:
Other revenue 17 16 34 29 Less: Revenues from non-comparable
hotels(1) 41 83 100 166
Comparable
Hotel Revenue $ 673 $ 634 $ 1,265 $ 1,222 (1) Includes
revenues from Park's non-comparable hotels and rental revenues from
office space and antenna leases located at our hotels.
Three Months Ended Six Months Ended June 30,
June 30, 2018 2017 2018 2017
Comparable Hotel Revenues $ 673 $ 634 $ 1,265 $ 1,222 Comparable
Hotel Adjusted EBITDA $ 215 $ 193 $ 374 $ 352 Comparable Hotel
Adjusted EBITDA margin 31.9 % 30.4 % 29.6 % 28.8 %
PARK HOTELS & RESORTS INC. NON-GAAP FINANCIAL
MEASURES RECONCILIATIONS NAREIT FFO AND ADJUSTED FFO
(unaudited, in millions, except per share data)
Three Months Ended Six Months Ended June 30,
June 30, 2018 2017 2018
2017 Net income attributable to stockholders $ 216 $
112 $ 366 $ 2,462 Depreciation and amortization expense 69 73 139
143
Depreciation and amortization expense
attributable to noncontrolling interests
(1 ) (1 ) (2 ) (2 ) Gain on sales of assets, net (7 ) — (96 ) —
Gain on sale of investments in affiliates(1) (108 ) — (108 ) —
Equity investment adjustments: Equity in earnings from investments
in affiliates (8 ) (8 ) (12 ) (12 ) Pro rata FFO of investments in
affiliates 10 10 20 18
NAREIT FFO
attributable to stockholders 171 186 307 2,609 Loss on foreign
currency transactions 4 4 3 3 Transition expense — 1 2 2 Severance
expense 1 — 1 — Share-based compensation expense 4 4 8 7 Other
items(2) 7 (22 ) 3 (2,310 )
Adjusted
FFO attributable to stockholders $ 187 $ 173 $ 324
$
311
NAREIT FFO per share - Diluted(3) $ 0.85 $ 0.87 $
1.49 $ 12.19
Adjusted FFO per share - Diluted(3) $ 0.93 $
0.81 $ 1.57 $ 1.45
Weighted average shares outstanding -
Diluted 201 215 206 214
__________________________
(1) Included in other gain (loss), net. (2) The three and
six months ended June 30, 2017 includes an income tax benefit from
the derecognition of deferred tax liabilities of $24 million and
$2,312 million, respectively, associated with Park’s intent to
elect REIT status. (3) Per share amounts are calculated based on
unrounded numbers.
PARK HOTELS & RESORTS INC.
NON-GAAP FINANCIAL MEASURES RECONCILIATIONS 2018 OUTLOOK
– EBITDA AND ADJUSTED EBITDA (unaudited, in millions)
Year Ending December 31, 2018 Low Case
High Case Net income $ 465 $ 493 Depreciation
and amortization expense 285 285 Interest income (5 ) (5 ) Interest
expense 126 127 Income tax expense 14 15
Interest expense, income tax and
depreciation and amortization included in equity in earnings from
investments in affiliates
24 24
EBITDA 909 939 Transition expense 4 4
Severance expense 1 1 Share-based compensation expense 16 16 Gain
on sale of assets, net (96 ) (96 ) Gain on sale of investments in
affiliates (108 ) (108 ) Other items (1) 4 4
Adjusted EBITDA $ 730 $ 760
__________________________
(1) Includes loss on foreign currency transactions of $3
million.
PARK HOTELS & RESORTS INC. NON-GAAP
FINANCIAL MEASURES RECONCILIATIONS 2018 OUTLOOK – NAREIT FFO
ATTRIBUTABLE TO STOCKHOLDERS AND ADJUSTED FFO ATTRIBUTABLE
TO STOCKHOLDERS (unaudited, in millions except per share
amounts) Year Ending December 31, 2018
Low Case High Case Net income attributable
to stockholders $ 461 $ 486 Depreciation and amortization
expense 285 285
Depreciation and amortization expense
attributable to noncontrolling interests
(4 ) (4 ) Gain on sale of assets, net (96 ) (96 ) Gain on sale of
investments in affiliates (108 ) (108 ) Equity investment
adjustments: Equity in earnings from investments in affiliates (21
) (21 ) Pro rata FFO of equity investments 36 36
NAREIT FFO attributable to stockholders 553 578 Transition
expense 4 4 Severance expense 1 1 Share-based compensation expense
16 16 Other items (1) 4 4
Adjusted FFO
attributable to stockholders $ 578 $ 603
Adjusted FFO per
share - Diluted(2) $ 2.84 $ 2.96
Weighted average diluted
shares outstanding 203.8 203.8
__________________________
(1) Includes loss on foreign currency transactions of $3
million. (2) Per share amounts are calculated based on unrounded
numbers.
PARK HOTELS & RESORTS
INC.DEFINITIONS
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
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:
- Gains or losses on sales of assets for
both consolidated and unconsolidated investments;
- Gains or losses on foreign currency
transactions;
- Transition expense related to the
Company’s establishment as an independent, publicly traded
company;
- Transaction expense associated with the
potential disposition of hotels or acquisition of a business;
- Severance expense;
- Share-based compensation expense;
- Casualty and impairment 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, including both comparable and non-comparable
hotels but excluding 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.
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 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 or 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 April 2002 “White
Paper on Funds From Operations,” 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:
- Gains or losses on foreign currency
transactions;
- Transition expense related to the
Company’s establishment as an independent, publicly traded
company;
- Transaction expense associated with the
potential disposition of hotels or acquisition of a business;
- Severance expense;
- Share-based compensation expense;
- Casualty losses;
- Litigation gains and losses outside the
ordinary course of business; and
- Other items that management believes
are not representative of the Company’s current or future operating
performance.
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 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
for comparable hotels.
References to RevPAR and ADR are presented on a currency neutral
basis (prior periods are reflected using current period exchange
rates), unless otherwise noted.
Comparable Hotels
The Company presents certain data for its consolidated hotels on
a comparable hotel basis as supplemental information for investors.
The Company defines its comparable hotels as those that: (i) were
active and operating in its portfolio since January 1st of the
previous year; and (ii) have not sustained substantial property
damage, business interruption, undergone large-scale capital
projects or for which comparable results are not available. The
Company presents comparable hotel results to help the Company and
its investors evaluate the ongoing operating performance of its
comparable hotels. Of the 46 hotels that are consolidated as of
June 30, 2018, 44 hotels have been classified as comparable hotels.
Due to the conversion, or planned conversions, of a significant
number of rooms at the Hilton Waikoloa Village in 2017 to HGV
timeshare units, and due to the effects of the hurricane at the
Caribe Hilton in Puerto Rico and the expected continued effects
from business interruption in 2018, the results from these
properties were excluded from comparable hotels. The Company’s
comparable hotels also exclude the 12 consolidated hotels that were
sold in January and February 2018.
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version on businesswire.com: https://www.businesswire.com/news/home/20180801005862/en/
Park Hotels & Resorts Inc.Investor ContactIan
Weissman, + 1 571-302-5591
Grafico Azioni Park Hotels and Resorts (NYSE:PK)
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Da Set 2024 a Ott 2024
Grafico Azioni Park Hotels and Resorts (NYSE:PK)
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Da Ott 2023 a Ott 2024