TYSONS, Va.,
Selected Statistical and Financial Information
References to Park's "Current" hotels and "Current" financial metrics include all 41 consolidated hotels owned as of
(unaudited, amounts in millions, except RevPAR, ADR, Total RevPAR and per share data)
Three Months Ended | Nine Months Ended | ||||||||||||||||||||
2023 | 2022 | Change(1) | 2023 | 2022 | Change(1) | ||||||||||||||||
Current RevPAR | $ | 178.13 | $ | 172.91 | 3.0 | % | $ | 173.62 | $ | 154.77 | 12.2 | % | |||||||||
Current Occupancy | 73.9 | % | 71.4 | % | 2.5 | % pts | 71.1 | % | 64.3 | % | 6.8 | % pts | |||||||||
Current ADR | $ | 241.06 | $ | 242.21 | (0.5 | )% | $ | 244.23 | $ | 240.80 | 1.4 | % | |||||||||
Current Total RevPAR | $ | 270.85 | $ | 260.57 | 3.9 | % | $ | 273.22 | $ | 240.52 | 13.6 | % | |||||||||
Comparable RevPAR | $ | 182.08 | $ | 177.12 | 2.8 | % | $ | 178.74 | $ | 162.01 | 10.3 | % | |||||||||
Comparable Occupancy | 75.3 | % | 72.6 | % | 2.7 | % pts | 73.2 | % | 67.1 | % | 6.1 | % pts | |||||||||
Comparable ADR | $ | 241.74 | $ | 243.91 | (0.9 | )% | $ | 244.12 | $ | 241.30 | 1.2 | % | |||||||||
Comparable Total RevPAR | $ | 281.21 | $ | 270.89 | 3.8 | % | $ | 284.92 | $ | 254.23 | 12.1 | % | |||||||||
Net income (loss) | $ | 31 | $ | 40 | (22.5 | )% | $ | (82 | ) | $ | 138 | (159.4 | )% | ||||||||
Net income (loss) attributable to stockholders | $ | 27 | $ | 35 | (22.9 | )% | $ | (90 | ) | $ | 128 | (170.3 | )% | ||||||||
Operating income | $ | 85 | $ | 92 | (8.5 | )% | $ | 67 | $ | 212 | (68.3 | )% | |||||||||
Operating income margin | 12.5 | % | 13.9 | % | (140 | ) bps | 3.3 | % | 11.5 | % | (820 | ) bps | |||||||||
$ | 173 | $ | 165 | 5.0 | % | $ | 514 | $ | 450 | 14.2 | % | ||||||||||
26.3 | % | 26.0 | % | 30 | bps | 26.1 | % | 26.0 | % | 10 | bps | ||||||||||
$ | 172 | $ | 162 | 6.4 | % | $ | 509 | $ | 456 | 11.7 | % | ||||||||||
28.4 | % | 27.7 | % | 70 | bps | 28.0 | % | 28.1 | % | (10 | ) bps | ||||||||||
Adjusted EBITDA | $ | 163 | $ | 158 | 3.2 | % | $ | 496 | $ | 447 | 11.0 | % | |||||||||
Adjusted FFO attributable to stockholders | $ | 108 | $ | 94 | 14.9 | % | $ | 329 | $ | 251 | 31.1 | % | |||||||||
Earnings (loss) per share – Diluted(1) | $ | 0.13 | $ | 0.15 | (13.3 | )% | $ | (0.42 | ) | $ | 0.55 | (176.4 | )% | ||||||||
Adjusted FFO per share – Diluted(1) | $ | 0.51 | $ | 0.42 | 21.4 | % | $ | 1.52 | $ | 1.09 | 39.4 | % | |||||||||
Weighted average shares outstanding – Diluted | 212 | 224 | (12 | ) | 216 | 229 | (13 | ) |
______________________________________________
(1) Amounts are calculated based on unrounded numbers.
"In addition to our operating achievements, we executed important strategic capital allocation initiatives, including the repurchase of 5.8 million shares of our common stock under our existing repurchase program at a significant discount to our estimated net asset value, and reinvested over
"Finally, we have reached a significant milestone in exiting our two
Additional Highlights
- In
August 2023 , repurchased a total of 5.8 million shares under the existing repurchase program at an average price of$13.00 per share, for approximately$75 million ;
- In
October 2023 , the trustee for the$725 million non-recourse CMBS Loan ("SF Mortgage Loan") filed a lawsuit against the borrowers under the SF Mortgage Loan. In connection with the lawsuit, the court appointed a receiver to take control of theHilton San Francisco Hotels , which serve as security for the SF Mortgage Loan, and their operations, and thus, Park has no further economic interest in the operations of the hotels. The receiver will operate and has authority over the hotels and, until no later thanNovember 1, 2024 , has the ability to sell the hotels. The lawsuit contemplates the receivership will end with a non-judicial foreclosure byDecember 2, 2024 , if the hotels are not sold within the predetermined sale period;
- On
October 27, 2023 , Park's Board of Directors declared a special cash dividend of$0.77 per share in connection with the effective exit from theHilton San Francisco Hotels , which results in a required additional distribution. The special dividend will be paid onJanuary 16, 2024 to stockholders of record as ofDecember 29, 2023 ; and - Park participated in the 2023 Global Real Estate Sustainability Benchmark ("GRESB") assessment, 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 program and making meaningful improvements toward decarbonization.
Operational Update
Changes in Park's 2023 Current ADR, Occupancy and RevPAR compared to the same periods in 2022, and 2023 Current Occupancy were as follows:
Current ADR | Current Occupancy | Current RevPAR | Current Occupancy | |||||||||
2023 vs 2022 | 2023 vs 2022 | 2023 vs 2022 | 2023 | |||||||||
Q1 2023 | 6.7 | % | 14.1 | % pts | 36.5 | % | 64.8 | % | ||||
Q2 2023 | (0.2 | ) | 3.9 | 5.3 | 74.4 | |||||||
(3.4 | ) | 3.3 | 1.0 | 75.9 | ||||||||
1.5 | 2.6 | 5.4 | 72.2 | |||||||||
0.8 | 1.6 | 3.0 | 73.6 | |||||||||
Q3 2023 | (0.5 | ) | 2.5 | 3.0 | 73.9 | |||||||
Preliminary | 3.5 | 1.9 | 6.2 | 75.0 |
Changes in Park's 2023 Current ADR, Occupancy and RevPAR for the three and nine months ended
Three Months Ended | |||||||||||
Current ADR | Current Occupancy | Current RevPAR | Current Occupancy | ||||||||
2023 vs 2022 | 2023 vs 2022 | 2023 vs 2022 | 2023 | ||||||||
Resort | (1.5 | )% | (0.8 | )% pts | (2.5 | )% | 75.1 | % | |||
Urban | 0.6 | 3.9 | 6.4 | 71.9 | |||||||
Airport | 3.2 | 5.8 | 11.3 | 80.0 | |||||||
Suburban | (1.4 | ) | 1.2 | 0.3 | 69.4 | ||||||
All Types | (0.5 | ) | 2.5 | 3.0 | 73.9 |
Nine Months Ended | ||||||||||||
Current ADR | Current Occupancy | Current RevPAR | Current Occupancy | |||||||||
2023 vs 2022 | 2023 vs 2022 | 2023 vs 2022 | 2023 | |||||||||
Resort | (1.6 | )% | 3.3 | % pts | 2.8 | % | 78.4 | % | ||||
Urban | 3.9 | 10.0 | 22.4 | 66.0 | ||||||||
Airport | 7.3 | 4.1 | 13.6 | 74.6 | ||||||||
Suburban | 4.0 | 6.9 | 16.3 | 65.2 | ||||||||
All Types | 1.4 | 6.8 | 12.2 | 71.1 |
The Current Rooms Revenue mix for the three and nine months ended
Three Months Ended | Nine Months Ended | ||||||||||||||||
2023 | 2022 | Change | 2023 | 2022 | Change | ||||||||||||
Group | 26.0 | % | 23.0 | % | 3.0 | % | 29.4 | % | 25.9 | % | 3.5 | % | |||||
Transient | 65.6 | 70.4 | (4.8 | ) | 62.8 | 67.5 | (4.7 | ) | |||||||||
Contract | 6.2 | 4.5 | 1.7 | 5.6 | 4.4 | 1.2 | |||||||||||
Other | 2.2 | 2.1 | 0.1 | 2.2 | 2.2 | — |
Park continued to see improvements in demand as business travel accelerated and group demand continued to return to its urban hotels. During the third quarter of 2023, Comparable group bookings for 2023 increased by over
Results for Park's Current hotels in each of the Company’s key markets are as follows:
(unaudited) | Current ADR | Current Occupancy | Current RevPAR | |||||||||||||||||||||||||||
Hotels | Rooms | 3Q23 | 3Q22 | Change(1) | 3Q23 | 3Q22 | Change | 3Q23 | 3Q22 | Change(1) | ||||||||||||||||||||
2 | 3,507 | $ | 322.09 | $ | 319.46 | 0.8 | % | 92.0 | % | 89.7 | % | 2.3% pts | $ | 296.29 | $ | 286.37 | 3.5 | % | ||||||||||||
4 | 3,605 | 239.14 | 237.30 | 0.8 | 65.5 | 64.7 | 0.8 | 156.61 | 153.46 | 2.1 | ||||||||||||||||||||
Orlando | 3 | 2,325 | 188.44 | 188.84 | (0.2 | ) | 60.3 | 59.3 | 1.0 | 113.54 | 111.82 | 1.5 | ||||||||||||||||||
1 | 1,622 | 157.49 | 175.06 | (10.0 | ) | 56.4 | 55.6 | 0.8 | 88.82 | 97.37 | (8.8 | ) | ||||||||||||||||||
3 | 1,536 | 267.12 | 252.53 | 5.8 | 86.1 | 85.1 | 1.0 | 230.03 | 214.94 | 7.0 | ||||||||||||||||||||
1 | 1,878 | 302.44 | 290.39 | 4.1 | 92.2 | 74.4 | 17.8 | 278.78 | 215.92 | 29.1 | ||||||||||||||||||||
5 | 1,773 | 263.09 | 278.65 | (5.6 | ) | 79.7 | 79.3 | 0.4 | 209.58 | 220.86 | (5.1 | ) | ||||||||||||||||||
3 | 2,467 | 227.83 | 236.69 | (3.7 | ) | 69.4 | 68.4 | 1.0 | 158.20 | 161.94 | (2.3 | ) | ||||||||||||||||||
2 | 461 | 409.71 | 396.50 | 3.3 | 25.2 | 66.5 | (41.3 | ) | 103.07 | 263.46 | (60.9 | ) | ||||||||||||||||||
1 | 613 | 202.05 | 201.32 | 0.4 | 81.8 | 73.3 | 8.5 | 165.19 | 147.47 | 12.0 | ||||||||||||||||||||
1 | 393 | 177.55 | 205.55 | (13.6 | ) | 71.3 | 75.0 | (3.7 | ) | 126.59 | 154.22 | (17.9 | ) | |||||||||||||||||
2 | 1,085 | 173.20 | 160.78 | 7.7 | 77.2 | 66.5 | 10.7 | 133.77 | 107.03 | 25.0 | ||||||||||||||||||||
2 | 1,246 | 187.14 | 187.53 | (0.2 | ) | 82.5 | 68.3 | 14.2 | 154.39 | 128.04 | 20.6 | |||||||||||||||||||
Other | 11 | 3,862 | 193.45 | 192.14 | 0.7 | 68.4 | 68.7 | (0.3 | ) | 132.40 | 132.02 | 0.3 | ||||||||||||||||||
All Markets | 41 | 26,373 | $ | 241.06 | $ | 242.21 | (0.5 | %) | 73.9 | % | 71.4 | % | 2.5% pts | $ | 178.13 | $ | 172.91 | 3.0 | % |
______________________________________________
(1) Calculated based on unrounded numbers.
(2) In
San Francisco Market Update
In
Results for Park's Comparable hotels compared to its Current hotels for the three and nine months ended
Three Months Ended | Nine Months Ended | ||||||||||||||||||||
Comparable Hotels | Current Hotels | Difference(1) | Comparable Hotels | Current Hotels | Difference(1) | ||||||||||||||||
RevPAR | $ | 182.08 | $ | 178.13 | 2.2 | % | $ | 178.74 | $ | 173.62 | 3.0 | % | |||||||||
Occupancy | 75.3 | % | 73.9 | % | 1.4 | % pts | 73.2 | % | 71.1 | % | 2.1 | % pts | |||||||||
ADR | $ | 241.74 | $ | 241.06 | 0.3 | % | $ | 244.12 | $ | 244.23 | — | % | |||||||||
28.4 | % | 26.3 | % | 210 | bps | 28.0 | % | 26.1 | % | 190 | bps |
______________________________________________
(1) Calculated based on unrounded numbers.
Results for Park's Comparable urban hotels compared to its Current urban hotels for the three and nine months ended
Three Months Ended | Nine Months Ended | ||||||||||||||||||||
Comparable | Current Urban Hotels | Difference(1) | Comparable | Current Urban Hotels | Difference(1) | ||||||||||||||||
RevPAR | $ | 172.90 | $ | 166.62 | 3.8 | % | $ | 161.77 | $ | 154.84 | 4.5 | % | |||||||||
Occupancy | 74.9 | % | 71.9 | % | 3.0 | % pts | 69.8 | % | 66.0 | % | 3.8 | % pts | |||||||||
ADR | $ | 230.98 | $ | 231.72 | (0.3) | % | $ | 231.83 | $ | 234.50 | (1.1) | % | |||||||||
25.6 | % | 21.0 | % | 460 | bps | 21.2 | % | 17.8 | % | 340 | bps |
______________________________________________
(1) Calculated based on unrounded numbers.
Monthly RevPAR results for Park's Comparable hotels compared to its Current hotels are as follows:
2023 Comparable Hotels | 2022 Comparable Hotels | 2023 vs 2022(1) | 2023 Current Hotels | 2022 Current Hotels | 2023 vs 2022(1) | 2023 Comparable vs Current(1) | ||||||||||||||
July | $ | 192.95 | $ | 191.56 | 0.7 | % | $ | 185.65 | $ | 183.83 | 1.0 | % | 3.9 | % | ||||||
August | 170.95 | 162.85 | 5.0 | 167.49 | 158.97 | 5.4 | 2.1 | |||||||||||||
September | 182.35 | 176.95 | 3.1 | 181.35 | 176.02 | 3.0 | 0.6 | |||||||||||||
Q3 | 182.08 | 177.12 | 2.8 | 178.13 | 172.91 | 3.0 | 2.2 | |||||||||||||
October(2) | 198.34 | 187.51 | 5.8 | 191.14 | 180.02 | 6.2 | 3.8 |
______________________________________________
(1) Calculated based on unrounded numbers.
(2)
Balance Sheet and Liquidity
As of
As of
Park had the following debt outstanding as of
(unaudited, dollars in millions) | |||||||||||
Debt | Collateral | Interest Rate | Maturity Date | As of | |||||||
Fixed Rate Debt | |||||||||||
Mortgage loan | 4.90% | $ | 54 | ||||||||
Mortgage loan | 4.25% | 129 | |||||||||
Mortgage loan | 3.62% | 14 | |||||||||
Mortgage loan | 4.20% | 1,275 | |||||||||
Mortgage loan | 4.17% | 160 | |||||||||
Mortgage loan | 5.37% | 30 | |||||||||
2025 Senior Notes | 7.50% | 650 | |||||||||
2028 Senior Notes | 5.88% | 725 | |||||||||
2029 Senior Notes | 4.88% | 750 | |||||||||
Comparable Fixed Rate Debt | 5.24%(2) | 3,787 | |||||||||
Mortgage loan | 7.11%(3) | 725 | |||||||||
Total Fixed Rate Debt | 5.54%(2) | 4,512 | |||||||||
Variable Rate Debt | |||||||||||
Revolver(4) | Unsecured | SOFR + 2.10% | — | ||||||||
Total Variable Rate Debt | 7.43% | — | |||||||||
Add: unamortized premium | 1 | ||||||||||
Less: unamortized deferred financing costs and discount | (23 | ) | |||||||||
Total Debt(5) | 5.54%(2) | $ | 4,490 |
______________________________________________
(1) The loan matures in
(2) Calculated on a weighted average basis.
(3) In
(4) Park has approximately
(5) Excludes
Capital Investments
Through the third quarter of 2023, Park has spent
(dollars in millions) | |||||||||||||||
Project & Scope of Work | Start Date | Estimated Completion Date | Budget | Current Quarter Incurred | Total Incurred | ||||||||||
Meeting space expansion: To add more than 100,000 sq. ft. of meeting and event space | Q4 2019 (Paused in 2020) | (Completed Q4 2022) Signia (Q1 2024) | $ | 118 | $ | 7 | $ | 92 | |||||||
Guestroom, existing meeting space & lobby renovations | |||||||||||||||
| Q3 2022 | Q2 2024 | 51 | 10 | 39 | ||||||||||
Signia by | |||||||||||||||
| Q4 2019 | Q4 2022 (Substantially complete) | 21 | 2 | 19 | ||||||||||
| Q2 2019 | Q4 2019 | 25 | — | 25 | ||||||||||
Golf course renovations: Two phases of golf course renovations | Phase 1 (Q2 2022) Phase 2 (Q2 2023) | Phase 1 (Completed Q4 2022) Phase 2 (Q4 2023) | 9 | — | 4 | ||||||||||
Recreational amenities: Adding additional amenities, primarily at the pool | Q3 2022 | Q1 2024 | 5 | — | 1 | ||||||||||
Total | $ | 229 | $ | 19 | $ | 180 | |||||||||
Guestroom renovations: Three phases of guestroom renovations in the 1,020-room | Phase 1 (Q3 2019) Phase 2 (Q3 2022) Phase 3 (Q3 2023) | Phase 1 (Completed Q4 2021) Phase 2 (Completed Q4 2022) Phase 3 (Q4 2023) | $ | 84 | $ | 11 | $ | 72 | |||||||
Complete renovation: Complete renovation of all 311 guestrooms, public spaces and certain hotel infrastructure | Q1 2023 | Q4 2023 (Guestrooms) Q1 2024 (Restaurants) | $ | 79 | $ | 33 | $ | 60 | |||||||
Guestroom renovations: Two phases of guestroom renovations in the 455-room | Q3 2019 (Paused in 2020) | Q3 2023 (Substantially complete) | $ | 11 | $ | 3 | $ | 9 | |||||||
New York | |||||||||||||||
Ballroom renovations: Renovation of the | Q2 2023 | Q3 2023 (Substantially complete) | $ | 5 | $ | 1 | $ | 4 |
Dividends
Park declared a third quarter 2023 cash dividend of
The effective exit from the
In addition to the
Full-Year 2023 Outlook
Park is not providing a full year 2023 outlook for net income, net income attributable to stockholders, earnings per share, operating income and operating income margin and the accompanying reconciliations as all the information necessary for the calculation of the gain (loss) on derecognition of assets and income tax expense resulting from the
(unaudited, dollars in millions, except per share amounts and RevPAR) | |||||||||||||||||
Full-Year 2023 Outlook as of | Full-Year 2023 Outlook as of | Change at Midpoint | |||||||||||||||
Metric | Low | High | Low | High | |||||||||||||
Comparable RevPAR | $ | 177 | $ | 179 | N/A | N/A | N/A | ||||||||||
Comparable RevPAR change vs. 2022 | 7.5 | % | 9.0 | % | N/A | N/A | N/A | ||||||||||
Adjusted EBITDA | $ | 644 | $ | 668 | $ | 619 | $ | 679 | $ | 7 | |||||||
27.7 | % | 28.2 | % | N/A | N/A | N/A | |||||||||||
(40 | ) bps | 10 | bps | N/A | N/A | N/A | |||||||||||
Adjusted FFO per share – Diluted(2) | $ | 1.92 | $ | 2.03 | $ | 1.76 | $ | 2.02 | $ | 0.08 |
______________________________________________
(1) Park did not provide Comparable metrics in its full year 2023 outlook as of
(2) Amounts are calculated based on unrounded numbers.
Park's outlook is based in part on the following assumptions:
- Comparable RevPAR for the fourth quarter of 2023 is expected to be between
$170 and$180 ; Comparable Hotel Adjusted EBITDA margin for the fourth quarter of 2023 is expected to be between 26.9% and 28.9%;- Adjusted EBITDA includes
Hotel Adjusted EBITDA for the twoHilton San Francisco Hotels of$3 million fromJanuary 2023 toOctober 2023 , the period prior to the hotels being placed into receivership; - Adjusted FFO excludes an incremental
$20 million of default interest and late payment administrative fees associated with default of the SF Mortgage Loan beginning inJune 2023 , which is required to be recognized in interest expense until legal title to theHilton San Francisco Hotels are transferred; - Fully diluted weighted average shares for the full-year 2023 are expected to be 214 million, while fully diluted weighted average shares for the fourth quarter of 2023 are expected to be 210 million;
- Includes
$15 million ofHotel Adjusted EBITDA disruption from a full-scale renovation at the Casa Marina Key West, Curio Collection, which is expected to be completed in the fourth quarter of 2023; and - Comparable portfolio as of
November 1, 2023 and does not take into account potential future acquisitions and dispositions, which could result in a material change to Park’s outlook.
Park's full-year 2023 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, increases 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.
Conference Call
Park will host a conference call for investors and other interested parties to discuss third quarter 2023 results on
A replay 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 the anticipated effects of Park's decision to cease payments on its
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
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,
About Park
Park is one of the largest publicly-traded lodging REITs 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
CONDENSED CONSOLIDATED BALANCE SHEETS
(in millions, except share and per share data)
(unaudited) | |||||||
ASSETS | |||||||
Property and equipment, net | $ | 8,028 | $ | 8,301 | |||
Intangibles, net | 42 | 43 | |||||
Cash and cash equivalents | 726 | 906 | |||||
Restricted cash | 60 | 33 | |||||
Accounts receivable, net of allowance for doubtful accounts of | 149 | 129 | |||||
Prepaid expenses | 63 | 58 | |||||
Other assets | 36 | 47 | |||||
Operating lease right-of-use assets | 201 | 214 | |||||
TOTAL ASSETS (variable interest entities – | $ | 9,305 | $ | 9,731 | |||
LIABILITIES AND EQUITY | |||||||
Liabilities | |||||||
Debt | $ | 4,490 | $ | 4,617 | |||
Accounts payable and accrued expenses | 293 | 220 | |||||
Due to hotel managers | 136 | 141 | |||||
Other liabilities | 221 | 228 | |||||
Operating lease liabilities | 225 | 234 | |||||
Total liabilities (variable interest entities – | 5,365 | 5,440 | |||||
Stockholders' Equity | |||||||
Common stock, par value | 2 | 2 | |||||
Additional paid-in capital | 4,151 | 4,321 | |||||
(Accumulated deficit) retained earnings | (169 | ) | 16 | ||||
Total stockholders' equity | 3,984 | 4,339 | |||||
Noncontrolling interests | (44 | ) | (48 | ) | |||
Total equity | 3,940 | 4,291 | |||||
TOTAL LIABILITIES AND EQUITY | $ | 9,305 | $ | 9,731 |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, in millions, except per share data)
Three Months Ended | Nine Months Ended | ||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||
Revenues | |||||||||||||||
Rooms | $ | 432 | $ | 428 | $ | 1,256 | $ | 1,153 | |||||||
Food and beverage | 159 | 148 | 518 | 431 | |||||||||||
Ancillary hotel | 66 | 67 | 203 | 198 | |||||||||||
Other | 22 | 19 | 64 | 54 | |||||||||||
Total revenues | 679 | 662 | 2,041 | 1,836 | |||||||||||
Operating expenses | |||||||||||||||
Rooms | 119 | 115 | 343 | 298 | |||||||||||
Food and beverage | 122 | 115 | 377 | 321 | |||||||||||
Other departmental and support | 161 | 162 | 484 | 453 | |||||||||||
Other property-level | 59 | 58 | 182 | 173 | |||||||||||
Management fees | 31 | 30 | 95 | 84 | |||||||||||
Casualty and impairment loss | — | 3 | 204 | 4 | |||||||||||
Depreciation and amortization | 65 | 67 | 193 | 204 | |||||||||||
Corporate general and administrative | 18 | 16 | 50 | 48 | |||||||||||
Other | 19 | 18 | 61 | 52 | |||||||||||
Total expenses | 594 | 584 | 1,989 | 1,637 | |||||||||||
Gain on sales of assets, net | — | 14 | 15 | 13 | |||||||||||
Operating income | 85 | 92 | 67 | 212 | |||||||||||
Interest income | 9 | 4 | 29 | 5 | |||||||||||
Interest expense | (65 | ) | (61 | ) | (186 | ) | (185 | ) | |||||||
Equity in earnings from investments in affiliates | 2 | 1 | 9 | 6 | |||||||||||
Other gain, net | — | 1 | 4 | 98 | |||||||||||
Income (loss) before income taxes | 31 | 37 | (77 | ) | 136 | ||||||||||
Income tax benefit (expense) | — | 3 | (5 | ) | 2 | ||||||||||
Net income (loss) | 31 | 40 | (82 | ) | 138 | ||||||||||
Net income attributable to noncontrolling interests | (4 | ) | (5 | ) | (8 | ) | (10 | ) | |||||||
Net income (loss) attributable to stockholders | $ | 27 | $ | 35 | $ | (90 | ) | $ | 128 | ||||||
Earnings (loss) per share: | |||||||||||||||
Earnings (loss) per share – Basic | $ | 0.13 | $ | 0.15 | $ | (0.42 | ) | $ | 0.55 | ||||||
Earnings (loss) per share – Diluted | $ | 0.13 | $ | 0.15 | $ | (0.42 | ) | $ | 0.55 | ||||||
Weighted average shares outstanding – Basic | 212 | 224 | 216 | 229 | |||||||||||
Weighted average shares outstanding – Diluted | 212 | 224 | 216 | 229 |
NON-GAAP FINANCIAL MEASURES RECONCILIATIONS
EBITDA AND ADJUSTED EBITDA
(unaudited, in millions) | Three Months Ended | Nine Months Ended | |||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||
Net income (loss) | $ | 31 | $ | 40 | $ | (82 | ) | $ | 138 | ||||||
Depreciation and amortization expense | 65 | 67 | 193 | 204 | |||||||||||
Interest income | (9 | ) | (4 | ) | (29 | ) | (5 | ) | |||||||
Interest expense | 65 | 61 | 186 | 185 | |||||||||||
Income tax (benefit) expense | — | (3 | ) | 5 | (2 | ) | |||||||||
Interest expense, income tax and depreciation and amortization included in equity in earnings from investments in affiliates | 2 | 2 | 7 | 7 | |||||||||||
EBITDA | 154 | 163 | 280 | 527 | |||||||||||
Gain on sales of assets, net | — | (14 | ) | (15 | ) | (13 | ) | ||||||||
Gain on sale of investments in affiliates(1) | — | — | (3 | ) | (92 | ) | |||||||||
Share-based compensation expense | 5 | 4 | 14 | 13 | |||||||||||
Casualty and impairment loss | — | 3 | 204 | 4 | |||||||||||
Other items | 4 | 2 | 16 | 8 | |||||||||||
Adjusted EBITDA | $ | 163 | $ | 158 | $ | 496 | $ | 447 |
______________________________________________
(1) Included in other gain, net.
NON-GAAP FINANCIAL MEASURES RECONCILIATIONS
CURRENT AND COMPARABLE HOTEL ADJUSTED EBITDA AND
CURRENT AND COMPARABLE HOTEL ADJUSTED EBITDA MARGIN
(unaudited, dollars in millions) | Three Months Ended | Nine Months Ended | |||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||
Adjusted EBITDA | $ | 163 | $ | 158 | $ | 496 | $ | 447 | |||||||
Less: Adjusted EBITDA from investments in affiliates | (4 | ) | (4 | ) | (19 | ) | (20 | ) | |||||||
Add: All other(1) | 14 | 13 | 40 | 37 | |||||||||||
173 | 167 | 517 | 464 | ||||||||||||
Less: Adjusted EBITDA from hotels disposed of | — | (2 | ) | (3 | ) | (14 | ) | ||||||||
173 | 165 | 514 | 450 | ||||||||||||
Less: Adjusted EBITDA from the | (1 | ) | (3 | ) | (5 | ) | 6 | ||||||||
$ | 172 | $ | 162 | $ | 509 | $ | 456 | ||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||
Total Revenues | $ | 679 | $ | 662 | $ | 2,041 | $ | 1,836 | |||||||
Less: Other revenue | (22 | ) | (19 | ) | (64 | ) | (54 | ) | |||||||
Less: Revenues from hotels disposed of | — | (11 | ) | (10 | ) | (51 | ) | ||||||||
657 | 632 | 1,967 | 1,731 | ||||||||||||
Less: Revenues from the | (51 | ) | (48 | ) | (145 | ) | (105 | ) | |||||||
$ | 606 | $ | 584 | $ | 1,822 | $ | 1,626 |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||
2023 | 2022 | Change(2) | 2023 | 2022 | Change(2) | ||||||||||||||||
Total Revenues | $ | 679 | $ | 662 | 2.4 | % | $ | 2,041 | $ | 1,836 | 11.1 | % | |||||||||
Operating income | $ | 85 | $ | 92 | (8.5 | )% | $ | 67 | $ | 212 | (68.3 | )% | |||||||||
Operating income margin(2) | 12.5 | % | 13.9 | % | (140 | ) bps | 3.3 | % | 11.5 | % | (820 | ) bps | |||||||||
$ | 657 | $ | 632 | 3.9 | % | $ | 1,967 | $ | 1,731 | 13.6 | % | ||||||||||
$ | 173 | $ | 165 | 5.0 | % | $ | 514 | $ | 450 | 14.2 | % | ||||||||||
26.3 | % | 26.0 | % | 30 | bps | 26.1 | % | 26.0 | % | 10 | bps | ||||||||||
$ | 606 | $ | 584 | 3.8 | % | $ | 1,822 | $ | 1,626 | 12.1 | % | ||||||||||
$ | 172 | $ | 162 | 6.4 | % | $ | 509 | $ | 456 | 11.7 | % | ||||||||||
28.4 | % | 27.7 | % | 70 | bps | 28.0 | % | 28.1 | % | (10 | ) bps |
______________________________________________
(1) Includes other revenues and other expenses, non-income taxes on TRS leases included in other property-level expenses and corporate general and administrative expenses in the consolidated statements of operations.
(2) Percentages are calculated based on unrounded numbers.
NON-GAAP FINANCIAL MEASURES RECONCILIATIONS
CURRENT AND COMPARABLE URBAN HOTEL ADJUSTED EBITDA AND
CURRENT AND COMPARABLE URBAN HOTEL ADJUSTED EBITDA MARGIN
(unaudited, dollars in millions) | Three Months Ended | Nine Months Ended | |||||
$ | 173 | $ | 514 | ||||
Less: Adjusted EBITDA from non-urban hotels | (116 | ) | (377 | ) | |||
57 | 137 | ||||||
Less: Adjusted EBITDA from the | (1 | ) | (5 | ) | |||
$ | 56 | $ | 132 | ||||
Three Months Ended | Nine Months Ended | ||||||
$ | 657 | $ | 1,967 | ||||
Less: Revenues from non-urban hotels | (388 | ) | (1,198 | ) | |||
269 | 769 | ||||||
Less: Revenues from the | (51 | ) | (145 | ) | |||
$ | 218 | $ | 624 |
Three Months Ended | Nine Months Ended | ||||||
$ | 269 | $ | 769 | ||||
$ | 57 | $ | 137 | ||||
21.0 | % | 17.8 | % | ||||
$ | 218 | $ | 624 | ||||
$ | 56 | $ | 132 | ||||
25.6 | % | 21.2 | % |
______________________________________________
(1) Percentages are calculated based on unrounded numbers.
NON-GAAP FINANCIAL MEASURES RECONCILIATIONS
NAREIT FFO AND ADJUSTED FFO
(unaudited, in millions, except per share data)
Three Months Ended | Nine Months Ended | ||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||
Net income (loss) attributable to stockholders | $ | 27 | $ | 35 | $ | (90 | ) | $ | 128 | ||||||
Depreciation and amortization expense | 65 | 67 | 193 | 204 | |||||||||||
Depreciation and amortization expense attributable to noncontrolling interests | (1 | ) | (1 | ) | (3 | ) | (3 | ) | |||||||
Gain on sales of assets, net | — | (14 | ) | (15 | ) | (13 | ) | ||||||||
Gain on sale of investments in affiliates(1) | — | — | (3 | ) | (92 | ) | |||||||||
Impairment loss | — | — | 202 | — | |||||||||||
Equity investment adjustments: | |||||||||||||||
Equity in earnings from investments in affiliates | (2 | ) | (1 | ) | (9 | ) | (6 | ) | |||||||
Pro rata FFO of investments in affiliates | 2 | 1 | 12 | 11 | |||||||||||
Nareit FFO attributable to stockholders | 91 | 87 | 287 | 229 | |||||||||||
Casualty loss | — | 3 | 2 | 4 | |||||||||||
Share-based compensation expense | 5 | 4 | 14 | 13 | |||||||||||
Other items(2) | 12 | — | 26 | 5 | |||||||||||
Adjusted FFO attributable to stockholders | $ | 108 | $ | 94 | $ | 329 | $ | 251 | |||||||
Nareit FFO per share – Diluted(3) | $ | 0.43 | $ | 0.39 | $ | 1.33 | $ | 1.00 | |||||||
Adjusted FFO per share – Diluted(3) | $ | 0.51 | $ | 0.42 | $ | 1.52 | $ | 1.09 | |||||||
Weighted average shares outstanding – Diluted | 212 | 224 | 216 | 229 |
______________________________________________
(1) Included in other gain, net.
(2) For the three and nine months ended
(3) Per share amounts are calculated based on unrounded numbers.
NON-GAAP FINANCIAL MEASURES RECONCILIATIONS
NET DEBT
(unaudited, in millions) | |||||||||||
Current | SF Mortgage Loan Adjustments(1) | Comparable | |||||||||
Debt | $ | 4,490 | $ | (725 | ) | $ | 3,765 | ||||
Add: unamortized deferred financing costs and discount | 23 | — | 23 | ||||||||
Less: unamortized premium | (1 | ) | — | (1 | ) | ||||||
Debt, excluding unamortized deferred financing cost, premiums and discounts | 4,512 | (725 | ) | 3,787 | |||||||
Add: Park's share of unconsolidated affiliates debt, excluding unamortized deferred financing costs | 169 | — | 169 | ||||||||
Less: cash and cash equivalents | (726 | ) | 162 | (564 | ) | ||||||
Less: restricted cash | (60 | ) | 26 | (34 | ) | ||||||
Net debt | $ | 3,895 | $ | (537 | ) | $ | 3,358 |
______________________________________________
(1) Comparable Net Debt as of
DEFINITIONS
Current
The Company presents certain data for its consolidated hotels on a Current basis as supplemental information for investors:
Comparable
Park's Comparable hotels represent its Current hotels excluding the two Hilton San Francisco Hotels as the Company expects these hotels to ultimately be removed from its portfolio.
EBITDA, Adjusted EBITDA,
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.
EBITDA, Adjusted EBITDA,
The Company believes that EBITDA, Adjusted EBITDA,
EBITDA, Adjusted EBITDA,
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
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) long-term debt, including current maturities and 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
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
Revenue per
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.
Investor Contact
+ 1 571 302 5591
Source:
2023 GlobeNewswire, Inc., source