TYSONS, Va.,
First quarter financial highlights include:
- RevPAR was
$116.42 , an increase of$75.10 , or 181.7%, on a pro-forma basis from the same period in 2021 and a decrease of 32.8% on a pro-forma basis from the same period in 2019; - Occupancy for Park’s 46 consolidated hotels open during the first quarter was 54.4%;
- Net loss and net loss attributable to stockholders were
$(56) million and$(57) million , respectively, which represent an improvement of 70.7% and 70.0%, respectively, compared to the same period in 2021; - Adjusted EBITDA was
$82 million , an increase of 1.8%, compared to the fourth quarter of 2021; Hotel Adjusted EBITDA was$89 million , an improvement on a pro-forma basis of 4.2%, compared to the fourth quarter of 2021;- Adjusted FFO attributable to stockholders was
$18 million , an improvement of 66.6%, compared to the fourth quarter of 2021; - Diluted loss per share was
$(0.24) , an improvement of$0.57 , or 70.4%, compared to the same period in 2021; and - Diluted Adjusted FFO per share was
$0.08 , an improvement of$0.56 , or 116.7%, compared to the same period in 2021.
Additional highlights include:
- Reopened the 314-room
Hilton Short Hills , NJ, and expect to open our last remaining suspended hotel, the Parc 55 San Francisco - aHilton Hotel , onMay 19, 2022 based on improving demand trends in theSan Francisco market; - Moody’s Investors Service upgraded Park’s outlook to Stable from Negative;
- Repurchased 3.4 million shares of common stock at an average price of
$17.99 per share, or$61 million ; Reinstated Park's quarterly cash dividend, declaring$0.01 per share to stockholders of record as ofMarch 31, 2022 ;- Converted the Casa Marina Key West from a
Waldorf Astoria Resort to a Curio inMarch 2022 ; - Amended the credit facility to provide, among other changes, an extension of covenant relief and the removal or reduction of certain restrictions, including certain limitations on asset sales and stock repurchases; and
- Sold the 131-room
Hampton Inn & Suites Memphis –Shady Grove inApril 2022 for gross proceeds of$11.5 million or$88,000 per key.
Selected Statistical and Financial Information
(unaudited, amounts in millions, except Pro-forma RevPAR, Pro-forma ADR and per share data)
Three Months Ended | |||||||||||||||||
2022 | 2021 | Change ($) | Change(1) | ||||||||||||||
Pro-forma RevPAR | $ | 116.42 | $ | 41.32 | $ | 75.10 | 181.7 | % | |||||||||
Pro-forma Occupancy | 51.9 | % | 26.6 | % | N/A | 25.3 | % | pts | |||||||||
Pro-forma ADR | $ | 224.42 | $ | 155.60 | $ | 68.82 | 44.2 | % | |||||||||
Pro-forma Total RevPAR | $ | 184.11 | $ | 61.04 | $ | 123.07 | 201.6 | % | |||||||||
Net loss | $ | (56 | ) | $ | (191 | ) | $ | 135 | 70.7 | % | |||||||
Net loss attributable to stockholders | $ | (57 | ) | $ | (190 | ) | $ | 133 | 70.0 | % | |||||||
Adjusted EBITDA | $ | 82 | $ | (49 | ) | $ | 131 | 267.3 | % | ||||||||
$ | 89 | $ | (32 | ) | $ | 121 | 376.1 | % | |||||||||
19.3 | % | (21.1 | )% | N/A | 4,040 bps | ||||||||||||
Adjusted FFO attributable to stockholders | $ | 18 | $ | (113 | ) | $ | 131 | 115.9 | % | ||||||||
Loss per share - Diluted(1) | $ | (0.24 | ) | $ | (0.81 | ) | $ | 0.57 | 70.4 | % | |||||||
Adjusted FFO per share - Diluted(1) | $ | 0.08 | $ | (0.48 | ) | $ | 0.56 | 116.7 | % | ||||||||
Weighted average shares outstanding - Diluted | 235 | 236 | N/A | (1 | ) |
(1) | Amounts are calculated based on unrounded numbers. |
Operational Update
Since originally suspending hotel operations, Park has reopened all hotels except the 1,024-room Parc 55 San Francisco – a
Changes in Park's 2022 Pro-forma ADR, Occupancy and RevPAR compared to the same periods in 2021 and 2019, and 2022 Occupancy for Park’s 48 consolidated hotels owned as of
Change in Pro-forma ADR | Change in Pro-forma Occupancy | Change in Pro-forma RevPAR | ||||||||||||||||||||||||||
2022 vs. 2021 | 2022 vs. 2019 | 2022 vs. 2021 | 2022 vs. 2019 | 2022 vs. 2021 | 2022 vs. 2019 | 2022 Occupancy | ||||||||||||||||||||||
49.5 | % | (10.7 | )% | 18.6 | % | pts | (31.8 | )% | pts | 179.7 | % | (50.3 | )% | 40.0 | % | |||||||||||||
45.8 | 2.0 | 27.6 | (25.0 | ) | 204.9 | (30.8 | ) | 52.9 | ||||||||||||||||||||
40.3 | 6.0 | 30.0 | (19.4 | ) | 168.2 | (18.9 | ) | 62.9 | ||||||||||||||||||||
Q1 2022 | 44.2 | 0.1 | 25.3 | (25.4 | ) | 181.7 | (32.8 | ) | 51.9 | |||||||||||||||||||
Preliminary | 36.2 | 7.8 | 33.2 | (14.2 | ) | 159.0 | (10.4 | ) | 70.1 |
Changes in Park's 2022 Pro-forma ADR, Occupancy and RevPAR compared to the same periods in 2021 and 2019, and 2022 Occupancy for only the consolidated hotels owned as of
Number of Consolidated | Change in Pro-forma ADR | Change in Pro-forma Occupancy | Change in Pro-forma RevPAR | |||||||||||||||||||||||||||
Hotels Open | 2022 vs. 2021 | 2022 vs. 2019 | 2022 vs. 2021 | 2022 vs. 2019 | 2022 vs. 2021 | 2022 vs. 2019 | 2022 Occupancy | |||||||||||||||||||||||
46 | 49.5 | % | (8.4 | )% | 19.5 | % | (29.5 | )% | pts | 179.7 | % | (46.2 | )% | 42.0 | % | |||||||||||||||
46 | 45.8 | 3.4 | 29.0 | (22.1 | ) | 204.9 | (26.0 | ) | 55.5 | |||||||||||||||||||||
47 | 40.3 | 7.1 | 31.1 | (16.7 | ) | 168.2 | (14.7 | ) | 65.3 | |||||||||||||||||||||
Q1 2022 | 46 | 44.3 | 1.8 | 26.5 | (22.7 | ) | 181.1 | (28.2 | ) | 54.4 | ||||||||||||||||||||
Preliminary | 47 | 36.2 | 8.9 | 34.5 | (11.3 | ) | 159.0 | (5.8 | ) | 72.8 |
For the first quarter of 2022, Park’s portfolio generated positive
Domestic leisure transient demand continues to grow compared to 2021 as a result of the easing of domestic restrictions, despite some disruption from virus variants; however, some restrictions on international travel remain in place. The Rooms Revenue mix for the three months ended
Three Months Ended | ||||||||||||||||
2022 | 2021 | 2020 | 2019 | |||||||||||||
Group | 25.2 | % | 6.9 | % | 33.4 | % | 34.5 | % | ||||||||
Transient | 68.1 | 81.2 | 58.0 | 58.8 | ||||||||||||
Contract | 4.8 | 10.3 | 6.2 | 4.6 | ||||||||||||
Other | 1.9 | 1.6 | 2.4 | 2.1 |
Park saw an improvement in demand beginning in
Additionally, group lead volumes continue to increase, with
Highlights for Park's consolidated hotels owned as of
Leisure Markets
Hawaii : Park'sHawaii hotels continued to benefit from domestic leisure demand and experienced a return of group demand, achieving peak occupancy of 84% inMarch 2022 , an increase of 12 percentage points fromJanuary 2022 . Occupancy for the quarter was 80% and 77% forHilton Waikoloa Village and theHilton Hawaiian Village , respectively, an increase of 12 percentage points and 14 percentage points, respectively, from the fourth quarter of 2021. Preliminary combined occupancy forApril 2022 is 87%. At theHilton Waikoloa Village rate increased by 38% and RevPAR increased by 32% compared to the first quarter of 2019;- Orlando: Park’s Orlando hotels benefited in the second half of the quarter from spring break travel and approached seasonal peak occupancy, with combined occupancy of 70% in
March 2022 , an increase of 25 percentage points fromJanuary 2022 , and combined occupancy of 59% for the quarter, an increase of 2 percentage points from the fourth quarter of 2021. Preliminary combined occupancy forApril 2022 is 77%. Combined rate increased 21% compared to the first quarter of 2019; New Orleans : TheHilton New Orleans Riverside benefited from an increase in both leisure and group demand inMarch 2022 duringMardi Gras , achieving peak occupancy of 75% inMarch 2022 , an increase of 50 percentage points fromJanuary 2022 , and occupancy of 54% for the quarter, an increase of 2 percentage points from the fourth quarter. Preliminary occupancy forApril 2022 is 71%. Rate was 95% of the first quarter of 2019;Southern California : Park’s hotels inSouthern California benefited from an increase in leisure demand in the second half of the quarter, resulting in peak combined occupancy of 76% inMarch 2022 , an increase of 23 percentage points fromJanuary 2022 , and 67% for the quarter. Preliminary combined occupancy forApril 2022 is 80%. Compared to the first quarter of 2019, combined rate increased by 15% on a pro-forma basis;Key West :Casa Marina Key West , Curio Collection, and The ReachKey West , Curio Collection, continued to benefit from strong leisure transient demand from spring break travel achieving the hotels' highest-ever combined rate of$815 , RevPAR of$715 and occupancy of 88% inMarch 2022 , an increase of 13 percentage points fromJanuary 2022 . The hotels achieved combined occupancy of 83% for the quarter, an increase of 6 percentage points from the fourth quarter of 2021. Preliminary combined occupancy forApril 2022 is 76%. Compared to the first quarter of 2019, combined rate increased by 62% and combined RevPAR increased by 49%; andMiami : Park’sMiami hotels benefited from strong domestic leisure transient demand and an increase in group demand, achieving peak combined occupancy of 88% inMarch 2022 , an increase of 15 percentage points fromJanuary 2022 , and 82% for the quarter, an increase of 4 percentage points from the fourth quarter of 2021. Preliminary combined occupancy forApril 2022 is 91%. Compared to the first quarter of 2019, combined rate increased by 14% and combined RevPAR increased by 3%, both on a pro-forma basis.
Other Markets
San Francisco : Three of Park's four hotels in theSan Francisco market are open and achieved a combined occupancy for its open hotels of 42% inMarch 2022 , an increase of 16 percentage points fromJanuary 2022 , and 35% for the quarter, with preliminary combined occupancy for its open hotels inApril 2022 of 64%.The JW Marriott San Francisco Union Square and theHyatt Centric Fisherman's Wharf achieved peak occupancy of 75% and 81% inMarch 2022 , respectively, an increase of 34 percentage points and 31 percentage points fromJanuary 2022 , respectively.The JW Marriott San Francisco Union Square andHyatt Centric Fisherman's Wharf achieved occupancy of 56% and 64% for the quarter, respectively;
Boston : Park’sBoston hotels benefited from strong leisure demand coupled with demand from airline crews inMarch 2022 , achieving peak combined occupancy of 69% inMarch 2022 , an increase of 23 percentage points fromJanuary 2022 , and 57% for the quarter. Preliminary combined occupancy forApril 2022 is 75%;New York : The New YorkHilton Midtown experienced a decrease in demand in the first half of the quarter, but benefited from the return of domestic leisure demand in the second half of the quarter and achieved peak occupancy of 54% inMarch 2022 , an increase of 40 percentage points fromJanuary 2022 , with rate 3% higher as compared toMarch 2019 . Occupancy was 34% for the quarter, and preliminary occupancy forApril 2022 is 69%;Chicago : Park'sChicago hotels experienced a decrease in demand in the first half of the quarter, but achieved combined peak occupancy of 44% forMarch 2022 , an increase of 26 percentage points fromJanuary 2022 , and 29% for the quarter, with preliminary combined occupancy forApril 2022 of 56%. Compared to the first quarter of 2019, combined rate increased by 9% on a pro-forma basis. In particular, theHilton Chicago Downtown saw rates 18% higher than the first quarter of 2019, mostly due to strong group and leisure demand;Denver : TheHilton Denver experienced a decrease in demand during the first half of the quarter, but saw a return of both group and transient demand in the second half of the quarter and achieved peak occupancy of 66% inMarch 2022 , an increase of 28 percentage points fromJanuary 2022 , and 56% for the quarter. Preliminary occupancy forApril 2022 is 69%;Washington, D.C. : Park’s hotels in theWashington, D.C. market benefited primarily from leisure demand in the second half of the quarter, with combined occupancy at a peak of 59% forMarch 2022 , an increase of 26 percentage points fromJanuary 2022 , and 46% for the quarter. Preliminary combined occupancy forApril 2022 is 77%; andSeattle : Park’sSeattle hotels benefited from demand from airline crews with combined occupancy at a peak of 67% inMarch 2022 , an increase of 15 percentage points fromJanuary 2022 , and 58% for the quarter, an increase of 4 percentage points from the fourth quarter of 2021. Preliminary combined occupancy forApril 2022 is 73%.
Balance Sheet and Liquidity
Park’s Net Debt 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% | $ | 58 | |||||||
Mortgage loan | 4.11% | 26 | ||||||||
Mortgage loan | 4.25% | 75 | ||||||||
Mortgage loan | 4.11% | 725 | ||||||||
Mortgage loan | 4.25% | 134 | ||||||||
Mortgage loan | 3.62% | 14 | ||||||||
Mortgage loan | 4.20% | 1,275 | ||||||||
Mortgage loan | 4.17% | 164 | ||||||||
2025 Senior Secured Notes | 7.50% | 650 | ||||||||
2028 Senior Secured Notes | 5.88% | 725 | ||||||||
2029 Senior Secured Notes | 4.88% | 750 | ||||||||
Total Fixed Rate Debt | 5.03%(2) | 4,596 | ||||||||
Variable Rate Debt | ||||||||||
Mortgage loan | L + 3.00%(3) | 30 | ||||||||
Revolving credit facility(4) | Unsecured | L + 3.00% | — | |||||||
2019 Term Facility(4)(5) | Unsecured | L + 2.65% | 78 | |||||||
Total Variable Rate Debt | 3.32%(2) | 108 | ||||||||
Add: unamortized premium | 4 | |||||||||
Less: unamortized deferred financing costs and discount | (37 | ) | ||||||||
Total Debt(6) | 5.02%(2) | $ | 4,671 |
(1) | The loan matures in |
(2) | Calculated on a weighted average basis. |
(3) | In |
(4) | In |
(5) | The outstanding balance of the 2019 Term Facility was hedged by an interest rate swap with a fixed interest rate of 1.86% per annum, which matured in |
(6) | Excludes |
Capital Investments
During 2021, Park resumed investing in certain capital projects to enhance the value of its hotels as it saw further signs of a broader based recovery and spent
Recently Completed Projects
Hilton San Francisco Union Square (Meeting Space & Guestroom):$8 million ballroom and boardroom renovation which was completed in the fourth quarter of 2021.
Ongoing Projects
Hilton Hawaiian Village Waikiki Beach Resort (Guestroom):$25 million was spent on the first phase of guest room renovations in the 1,020 roomTapa Tower , which began in the third quarter of 2019 and was completed in the fourth quarter of 2021, after being put on hold in 2020. Phase two of guest room renovations in theTapa Tower is expected to be completed by the end of 2022 and is budgeted for approximately$30 million ;Waldorf Astoria Orlando and Signia byHilton Orlando Bonnet Creek Complex (Meeting Space):$110 million expansion to add more than 100,000 square feet of meeting and event space, of which$8 million was spent during the first quarter of 2022 and bringing the total invested to date to$35 million since the project began in the fourth quarter of 2019, before being put on hold in 2020. Park expects the expansion for the Waldorf Astoria Orlando to be completed by the fourth quarter of 2022 and the Signia byHilton Orlando Bonnet Creek to be completed by the first quarter of 2024;- Signia by
Hilton Orlando Bonnet Creek (Existing Meeting Space & Lobby): $20 million for existing meeting space and lobby renovation, of which$8 million has already been spent. Park expects the project to be completed by the fourth quarter of 2022; and Waldorf Astoria Orlando (Guestroom, Existing Meeting Space & Lobby):$34 million guestroom, existing meeting space, lobby and other public space renovations which are expected to begin in the second quarter of 2022 and to be completed by the third quarter of 2023.
Dividends and Share Repurchases
Park declared a first quarter 2022 cash dividend of
During the first quarter, Park repurchased 3.4 million shares of its common stock at an average price of
2022 Outlook
Based on recent trends, which are signaling continued recovery, Park's outlook for Q2 2022 is as follows:
(unaudited, dollars in millions, except per share amounts and RevPAR) | ||||||||
Q2 2022 Outlook | ||||||||
as of | ||||||||
Metric | Low | High | ||||||
RevPAR | $ | 160 | $ | 164 | ||||
RevPAR Growth vs. 2019 | (16 | )% | (14 | )% | ||||
RevPAR Growth vs. 2021 | 104 | % | 109 | % | ||||
Net income | $ | 16 | $ | 36 | ||||
Net income attributable to stockholders | $ | 13 | $ | 33 | ||||
Earnings per share - Diluted(1) | $ | 0.05 | $ | 0.14 | ||||
Adjusted EBITDA | $ | 160 | $ | 180 | ||||
(390) bps | (240) bps | |||||||
1,320 bps | 1,470 bps | |||||||
Adjusted FFO per share - Diluted(1) | $ | 0.40 | $ | 0.49 |
(1) | Per share amounts are calculated based on unrounded numbers. |
Q2 2022 outlook is based in part on the following assumptions:
- Fully diluted weighted average shares are expected to be 233 million; and
- Does not take into account potential future acquisitions and dispositions, including those currently under contract, which could result in a material change to Park’s outlook.
Park's Q2 2022 outlook is based on many factors, many of which are outside the Company's control, including uncertainty surrounding any new disruptions from the COVID-19 pandemic, and all of which are subject to change. The Company continues to be unable to provide a full-year outlook for 2022 given the continued economic uncertainty as the global economy continues to recover from the COVID-19 pandemic; however, if the positive demand trends continue over the next few months, the Company anticipates being able to provide a full-year outlook in its second quarter earnings release.
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 first quarter 2022 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 Park’s current expectations regarding the performance of its business, financial results, liquidity and capital resources, including expected dates that its hotels will reopen, break even or achieve positive
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
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 the second largest publicly traded lodging REIT with a diverse portfolio of market-leading hotels and resorts with significant underlying real estate value. Park’s portfolio currently consists of 53 premium-branded hotels and resorts with approximately 32,000 rooms primarily located in prime city center and resort locations. Visit www.pkhotelsandresorts.com for more information.
Investor Contact | |
Tysons, | |
+ 1 571 302 5591 | www.pkhotelsandresorts.com |
CONDENSED CONSOLIDATED BALANCE SHEETS
(in millions, except share and per share data)
(unaudited) | ||||||||
ASSETS | ||||||||
Property and equipment, net | $ | 8,465 | $ | 8,511 | ||||
Investments in affiliates | 16 | 15 | ||||||
Intangibles, net | 44 | 44 | ||||||
Cash and cash equivalents | 639 | 688 | ||||||
Restricted cash | 78 | 75 | ||||||
Accounts receivable, net of allowance for doubtful accounts of | 106 | 96 | ||||||
Prepaid expenses | 58 | 35 | ||||||
Other assets | 65 | 69 | ||||||
Operating lease right-of-use assets | 232 | 210 | ||||||
TOTAL ASSETS (variable interest entities - | $ | 9,703 | $ | 9,743 | ||||
LIABILITIES AND EQUITY | ||||||||
Liabilities | ||||||||
Debt | $ | 4,671 | $ | 4,672 | ||||
Accounts payable and accrued expenses | 200 | 156 | ||||||
Due to hotel managers | 113 | 111 | ||||||
Other liabilities | 184 | 174 | ||||||
Operating lease liabilities | 250 | 227 | ||||||
Total liabilities (variable interest entities - | 5,418 | 5,340 |
Stockholders' Equity | ||||||||
Common stock, par value | 2 | 2 | ||||||
Additional paid-in capital | 4,473 | 4,533 | ||||||
Accumulated deficit | (142 | ) | (83 | ) | ||||
Total stockholders' equity | 4,333 | 4,452 | ||||||
Noncontrolling interests | (48 | ) | (49 | ) | ||||
Total equity | 4,285 | 4,403 | ||||||
TOTAL LIABILITIES AND EQUITY | $ | 9,703 | $ | 9,743 |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, in millions, except per share data)
Three Months Ended March 31, | ||||||||
2022 | 2021 | |||||||
Revenues | ||||||||
Rooms | $ | 292 | $ | 106 | ||||
Food and beverage | 110 | 22 | ||||||
Ancillary hotel | 61 | 29 | ||||||
Other | 16 | 8 | ||||||
Total revenues | 479 | 165 | ||||||
Operating expenses | ||||||||
Rooms | 85 | 35 | ||||||
Food and beverage | 87 | 21 | ||||||
Other departmental and support | 133 | 78 | ||||||
Other property-level | 50 | 48 | ||||||
Management fees | 22 | 7 | ||||||
Depreciation and amortization | 69 | 74 | ||||||
Corporate general and administrative | 16 | 18 | ||||||
Other | 16 | 7 | ||||||
Total expenses | 478 | 288 | ||||||
Operating income (loss) | 1 | (123 | ) | |||||
Interest expense | (62 | ) | (63 | ) | ||||
Equity in losses from investments in affiliates | — | (4 | ) | |||||
Other gain, net | 5 | — | ||||||
Loss before income taxes | (56 | ) | (190 | ) | ||||
Income tax expense | — | (1 | ) | |||||
Net loss | (56 | ) | (191 | ) | ||||
Net (income) loss attributable to noncontrolling interests | (1 | ) | 1 | |||||
Net loss attributable to stockholders | $ | (57 | ) | $ | (190 | ) |
Loss per share: | ||||||||
Loss per share – Basic | $ | (0.24 | ) | $ | (0.81 | ) | ||
Loss per share – Diluted | $ | (0.24 | ) | $ | (0.81 | ) | ||
Weighted average shares outstanding – Basic | 235 | 235 | ||||||
Weighted average shares outstanding – Diluted | 235 | 236 |
NON-GAAP FINANCIAL MEASURES RECONCILIATIONS
EBITDA AND ADJUSTED EBITDA
(unaudited, in millions) | Three Months Ended | |||||||
2022 | 2021 | |||||||
Net loss | $ | (56 | ) | $ | (191 | ) | ||
Depreciation and amortization expense | 69 | 74 | ||||||
Interest expense | 62 | 63 | ||||||
Income tax expense | — | 1 | ||||||
Interest expense, income tax and depreciation and amortization included in equity in earnings from investments in affiliates | 1 | 1 | ||||||
EBITDA | 76 | (52 | ) | |||||
Share-based compensation expense | 4 | 6 | ||||||
Other items | 2 | (3 | ) | |||||
Adjusted EBITDA | $ | 82 | $ | (49 | ) |
NON-GAAP FINANCIAL MEASURES RECONCILIATIONS
PRO-FORMA HOTEL ADJUSTED EBITDA AND
PRO-FORMA HOTEL ADJUSTED EBITDA MARGIN
(unaudited, dollars in millions) | Three Months Ended | |||||||
2022 | 2021 | |||||||
Adjusted EBITDA | $ | 82 | $ | (49 | ) | |||
Less: Adjusted EBITDA from investments in affiliates | (5 | ) | 2 | |||||
Add: All other(1) | 12 | 11 | ||||||
89 | (36 | ) | ||||||
Less: Adjusted EBITDA from hotels disposed of | — | 4 | ||||||
$ | 89 | $ | (32 | ) | ||||
Three Months Ended | ||||||||
2022 | 2021 | |||||||
Total Revenues | $ | 479 | $ | 165 | ||||
Less: Other revenue | (16 | ) | (8 | ) | ||||
Less: Revenues from hotels disposed of | — | (4 | ) | |||||
$ | 463 | $ | 153 |
Three Months Ended | ||||||||||||
2022 | 2021 | Change(2) | ||||||||||
$ | 463 | $ | 153 | 201.6 | % | |||||||
$ | 89 | $ | (32 | ) | 376.1 | % | ||||||
Pro-forma Hotel Adjusted EBITDA margin(2) | 19.3 | % | (21.1 | )% | 4,040 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 condensed consolidated statements of operations. | ||||||||||||
(2) 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 | ||||||||
2022 | 2021 | |||||||
Net loss attributable to stockholders | $ | (57 | ) | $ | (190 | ) | ||
Depreciation and amortization expense | 69 | 74 | ||||||
Depreciation and amortization expense attributable to noncontrolling interests | (1 | ) | (1 | ) | ||||
Equity investment adjustments: | ||||||||
Equity in losses from investments in affiliates | — | 4 | ||||||
Pro rata FFO of investments in affiliates | 2 | (2 | ) | |||||
Nareit FFO attributable to stockholders | 13 | (115 | ) | |||||
Share-based compensation expense | 4 | 6 | ||||||
Other items | 1 | (4 | ) | |||||
Adjusted FFO attributable to stockholders | $ | 18 | $ | (113 | ) | |||
Nareit FFO per share – Diluted(1) | $ | 0.05 | $ | (0.49 | ) | |||
Adjusted FFO per share – Diluted(1) | $ | 0.08 | $ | (0.48 | ) | |||
Weighted average shares outstanding – Diluted | 235 | 236 |
(1) | Per share amounts are calculated based on unrounded numbers. |
NON-GAAP FINANCIAL MEASURES RECONCILIATIONS
NET DEBT
(unaudited, in millions) | ||||
Debt | $ | 4,671 | ||
Add: unamortized deferred financing costs and discount | 37 | |||
Less: unamortized premium | (4 | ) | ||
Debt, excluding unamortized deferred financing cost, premiums and discounts | 4,704 | |||
Add: Park's share of unconsolidated affiliates debt, excluding unamortized deferred financing costs | 225 | |||
Less: cash and cash equivalents | (639 | ) | ||
Less: restricted cash | (78 | ) | ||
Net debt | $ | 4,212 |
NON-GAAP FINANCIAL MEASURES RECONCILIATIONS
Q2 2022 OUTLOOK – EBITDA AND ADJUSTED EBITDA
Three Months Ended | ||||||||
(unaudited, in millions) | ||||||||
Low Case | High Case | |||||||
Net income | $ | 16 | $ | 36 | ||||
Depreciation and amortization expense | 69 | 69 | ||||||
Interest expense | 61 | 61 | ||||||
Interest expense, income tax and depreciation and amortization included in equity in earnings from investments in affiliates | 3 | 3 | ||||||
EBITDA | 149 | 169 | ||||||
Share-based compensation expense | 4 | 4 | ||||||
Other items | 7 | 7 | ||||||
Adjusted EBITDA | $ | 160 | $ | 180 |
NON-GAAP FINANCIAL MEASURES RECONCILIATIONS
Q2 2022 OUTLOOK –NAREIT FFO ATTRIBUTABLE TO STOCKHOLDERS AND
ADJUSTED FFO ATTRIBUTABLE TO STOCKHOLDERS
Three Months Ended | ||||||||
(unaudited, in millions except per share data) | ||||||||
Low Case | High Case | |||||||
Net income attributable to stockholders | $ | 13 | $ | 33 | ||||
Depreciation and amortization expense | 69 | 69 | ||||||
Depreciation and amortization expense attributable to noncontrolling interests | (1 | ) | (1 | ) | ||||
Equity investment adjustments: | ||||||||
Equity in earnings from investments in affiliates | (4 | ) | (4 | ) | ||||
Pro rata FFO of equity investments | 5 | 5 | ||||||
Nareit FFO attributable to stockholders | 82 | 102 | ||||||
Share-based compensation expense | 4 | 4 | ||||||
Other items | 7 | 7 | ||||||
Adjusted FFO attributable to stockholders | $ | 93 | $ | 113 | ||||
Adjusted FFO per share - Diluted(1) | $ | 0.40 | $ | 0.49 | ||||
Weighted average diluted shares outstanding | 233.0 | 233.0 |
(1) | Per share amounts are calculated based on unrounded numbers. |
DEFINITIONS
Pro-forma
The Company presents certain data for its consolidated hotels on a pro-forma hotel basis as supplemental information for investors:
EBITDA, Adjusted EBITDA,
Earnings (loss) 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 (losses) 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;
- 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;
- 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. Room nights available to guests have not been adjusted for suspended or reduced operations at certain of Park’s hotels as a result of COVID-19. 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. Room nights available to guests have not been adjusted for suspended or reduced operations at certain of Park’s hotels as a result of COVID-19. 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.
Source:
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