TYSONS, Va.,
Selected Statistical and Financial Information
(unaudited, amounts in millions, except RevPAR, ADR, Total RevPAR and per share data)
Three Months Ended | Year Ended | ||||||||||||||||||||
2023 | 2022 | Change(1) | 2023 | 2022 | Change(1) | ||||||||||||||||
Comparable RevPAR | $ | 178.25 | $ | 171.21 | 4.1 | % | $ | 178.62 | $ | 164.33 | 8.7 | % | |||||||||
Comparable Occupancy | 71.0 | % | 69.5 | % | 1.5 | %pts | 72.7 | % | 67.8 | % | 4.9 | %pts | |||||||||
Comparable ADR | $ | 250.93 | $ | 246.35 | 1.9 | % | $ | 245.80 | $ | 242.61 | 1.3 | % | |||||||||
Comparable Total RevPAR | $ | 287.21 | $ | 273.91 | 4.9 | % | $ | 285.50 | $ | 259.19 | 10.2 | % | |||||||||
Net income | $ | 188 | $ | 35 | 437.1 | % | $ | 106 | $ | 173 | (38.7 | )% | |||||||||
Net income attributable to stockholders | $ | 187 | $ | 34 | 450.0 | % | $ | 97 | $ | 162 | (40.1 | )% | |||||||||
Operating income | $ | 276 | $ | 84 | 229.6 | % | $ | 343 | $ | 296 | 16.1 | % | |||||||||
Operating income margin | 42.0 | % | 12.6 | % | 2,940 | bps | 12.7 | % | 11.8 | % | 90 | bps | |||||||||
$ | 171 | $ | 167 | 2.1 | % | $ | 680 | $ | 623 | 9.1 | % | ||||||||||
27.5 | % | 28.2 | % | (70 | )bps | 27.8 | % | 28.1 | % | (30 | )bps | ||||||||||
Adjusted EBITDA | $ | 163 | $ | 159 | 2.5 | % | $ | 659 | $ | 606 | 8.7 | % | |||||||||
Adjusted FFO attributable to stockholders | $ | 110 | $ | 101 | 8.9 | % | $ | 439 | $ | 352 | 24.7 | % | |||||||||
Earnings per share - Diluted(1) | $ | 0.88 | $ | 0.15 | 486.7 | % | $ | 0.44 | $ | 0.71 | (38.0 | )% | |||||||||
Adjusted FFO per share – Diluted(1) | $ | 0.52 | $ | 0.45 | 15.6 | % | $ | 2.04 | $ | 1.54 | 32.5 | % | |||||||||
Weighted average shares outstanding – Diluted | 210 | 224 | (14 | ) | 215 | 228 | (13 | ) |
______________________________________________
(1) Amounts are calculated based on unrounded numbers.
(2) For both the three months and year ended
Turning to 2024, we are excited for the expected benefits from the nearly
Additional Highlights
- In
February 2024 , S&P Global raised Park's credit rating by two notches to BB- from B as a result of improved leverage following Park's effective exit from theHilton San Francisco Hotels ; - Completed the multi-phased renovation project of the 1,021-room
Tapa Tower at theHilton Hawaiian Village Waikiki Beach Resort inDecember 2023 , and, in early 2024, completed the nearly$230 million transformative expansion and full-scale renovation of the Waldorf Astoria Orlando and Signia byHilton Orlando Bonnet Creek hotels and the approximately$80 million full-scale renovation at the Casa Marina Key West, Curio Collection; - Declared a total of
$2.15 per share in dividends to stockholders during 2023, which includes dividends of$1.70 per share declared during the fourth quarter of 2023. The fourth quarter dividend consisted of a special cash dividend of$0.77 per share as a result of the effective exit from theHilton San Francisco Hotels and Park's fourth quarter dividend of$0.93 per share based on 2023 operating results; - During 2023, repurchased 14.6 million shares of common stock for a total purchase price of
$180 million ; - Park received the 2023 Nareit Leader in the Light Award for the hospitality sector for the second year in a row, highlighting Park's commitment to superior and consistent sustainability practices. Park was also recognized by Newsweek as one of America's Most Trustworthy Companies for 2023 and recently, recognized as one of America's Most Responsible Companies for 2024, the fourth time Park has been included in the annual survey;
- Beginning in
October 2023 , Park no longer had control of or an economic interest in the operations of the 1,921-roomHilton San Francisco Union Square and 1,024-room Parc 55 San Francisco – aHilton Hotel (collectively, the "Hilton San Francisco Hotels ") as the hotels were placed into court-ordered receivership. The receiver has full authority over the hotels and, until no later thanNovember 1, 2024 , has the ability to sell the hotels. The court order contemplates the receivership will end with a nonjudicial foreclosure byDecember 2, 2024 , if the hotels are not sold within the predetermined sale period; - In
June 2023 , fully repaid the$75 million mortgage loan secured by the 403-roomW Chicago – City Center; - In
March 2023 , purchased two parcels of land, including all improvements, adjacent to theHilton Hawaiian Village Waikiki Beach Resort , for approximately$18 million , which are intended for the development of an additional tower at theHilton Hawaiian Village Waikiki Beach Resort ; and - In
January 2023 , sold the 508-roomHilton Miami Airport hotel for gross proceeds of$118.25 million , or$233,000 per key, 14.0x the hotel's 2019 Adjusted EBITDA (or 11.1x when excluding anticipated capital expenditures), and at a capitalization rate of 6.2% on the hotel's 2019 net operating income (or 7.9% excluding anticipated capital expenditures). Park utilized$50 million of the net proceeds to fully repay the outstanding balance on the revolving credit facility ("Revolver"). Additionally, inJune 2023 , the 182-roomEmbassy Suites Phoenix Airport hotel was removed from Park's portfolio following the ground lessor's termination of the ground lease prior to its scheduled expiration inNovember 2031 .
Operational Update
Changes in Park's 2023 Comparable ADR, Occupancy and RevPAR compared to the same periods in 2022, and 2023 Comparable Occupancy were as follows:
Comparable ADR | Comparable Occupancy | Comparable RevPAR | Comparable Occupancy | |||||||||
2023 vs 2022 | 2023 vs 2022 | 2023 vs 2022 | 2023 | |||||||||
Q1 2023 | 4.8 | % | 12.4 | %pts | 28.4 | % | 67.3 | % | ||||
Q2 2023 | 0.8 | 3.3 | 5.3 | 76.9 | ||||||||
Q3 2023 | (0.9 | ) | 2.7 | 2.8 | 75.3 | |||||||
2.3 | 1.9 | 4.9 | 77.3 | |||||||||
2.0 | 2.7 | 5.9 | 71.4 | |||||||||
1.3 | 0.1 | 1.4 | 64.4 | |||||||||
Q4 2023 | 1.9 | 1.5 | 4.1 | 71.0 | ||||||||
2024 vs 2023 | 2024 vs 2023 | 2024 vs 2023 | 2024 | |||||||||
4.1 | 5.3 | 13.4 | 65.0 | |||||||||
Changes in Park's 2023 Comparable ADR, Occupancy and RevPAR for the three months and year ended
Three Months Ended | ||||||||||||
Comparable ADR | Comparable Occupancy | Comparable RevPAR | Comparable Occupancy | |||||||||
2023 vs 2022 | 2023 vs 2022 | 2023 vs 2022 | 2023 | |||||||||
Resort | 0.7 | % | 0.4 | %pts | 1.2 | % | 74.4 | % | ||||
Urban | 4.3 | 2.1 | 7.6 | 69.9 | ||||||||
Airport | (0.4 | ) | 2.9 | 3.8 | 70.5 | |||||||
Suburban | 1.7 | 0.8 | 3.0 | 63.3 | ||||||||
All Types | 1.9 | 1.5 | 4.1 | 71.0 |
Year Ended | ||||||||||||
Comparable ADR | Comparable Occupancy | Comparable RevPAR | Comparable Occupancy | |||||||||
2023 vs 2022 | 2023 vs 2022 | 2023 vs 2022 | 2023 | |||||||||
Resort | (1.0 | )% | 2.6 | %pts | 2.4 | % | 77.4 | % | ||||
Urban | 3.5 | 7.4 | 15.7 | 69.8 | ||||||||
Airport | 5.4 | 3.8 | 11.2 | 73.6 | ||||||||
Suburban | 3.4 | 5.4 | 12.7 | 64.7 | ||||||||
All Types | 1.3 | 4.9 | 8.7 | 72.7 |
The Comparable Rooms Revenue mix for the three months and year ended
Three Months Ended | Year Ended | ||||||||||||||||
2023 | 2022 | Change | 2023 | 2022 | Change | ||||||||||||
Group | 27.8 | % | 26.6 | % | 1.2 | % | 28.0 | % | 25.6 | % | 2.4 | % | |||||
Transient | 64.6 | 66.9 | (2.3 | ) | 64.8 | 68.1 | (3.3 | ) | |||||||||
Contract | 5.5 | 4.2 | 1.3 | 5.1 | 4.2 | 0.9 | |||||||||||
Other | 2.1 | 2.3 | (0.2 | ) | 2.1 | 2.1 | — | ||||||||||
Park continued to see improvements in demand as business travel accelerated and group demand continued to return to its urban and resort hotels, increasing Comparable group revenues for the fourth quarter of 2023 by nearly 9% year-over-year. Comparable RevPAR growth continued to be driven by Park's key urban markets, with Comparable RevPAR for the fourth quarter up nearly 8% year-over-year for its urban portfolio, resulting from the continued acceleration of group business in
During the fourth quarter of 2023, projected Comparable group revenues for 2024 increased by nearly
Results for Park's Comparable hotels in each of the Company’s key markets are as follows:
(unaudited) | Comparable ADR | Comparable Occupancy | Comparable RevPAR | |||||||||||||||||||||||||||
Hotels | Rooms | 4Q23 | 4Q22 | Change(1) | 4Q23 | 4Q22 | Change | 4Q23 | 4Q22 | Change(1) | ||||||||||||||||||||
2 | 3,507 | $ | 313.30 | $ | 305.20 | 2.7 | % | 84.7 | % | 80.2 | % | 4.5% pts | $ | 265.50 | $ | 245.04 | 8.4 | % | ||||||||||||
Orlando | 3 | 2,325 | 231.79 | 243.50 | (4.8 | ) | 65.2 | 68.3 | (3.1 | ) | 151.18 | 166.26 | (9.1 | ) | ||||||||||||||||
1 | 1,622 | 214.82 | 211.44 | 1.6 | 68.7 | 68.3 | 0.4 | 147.64 | 144.48 | 2.2 | ||||||||||||||||||||
3 | 1,536 | 240.47 | 224.09 | 7.3 | 79.4 | 77.8 | 1.6 | 191.04 | 174.54 | 9.5 | ||||||||||||||||||||
1 | 1,878 | 391.98 | 363.73 | 7.8 | 89.8 | 84.7 | 5.1 | 352.03 | 307.95 | 14.3 | ||||||||||||||||||||
5 | 1,773 | 211.95 | 215.37 | (1.6 | ) | 72.5 | 71.7 | 0.8 | 153.65 | 154.46 | (0.5 | ) | ||||||||||||||||||
3 | 2,467 | 220.54 | 223.89 | (1.5 | ) | 56.4 | 53.5 | 2.9 | 124.42 | 119.85 | 3.8 | |||||||||||||||||||
2 | 461 | 500.78 | 454.01 | 10.3 | 56.4 | 69.7 | (13.3 | ) | 282.40 | 316.54 | (10.8 | ) | ||||||||||||||||||
1 | 613 | 180.17 | 177.32 | 1.6 | 69.9 | 63.8 | 6.1 | 125.94 | 113.21 | 11.2 | ||||||||||||||||||||
1 | 393 | 243.58 | 251.29 | (3.1 | ) | 80.1 | 81.5 | (1.4 | ) | 195.00 | 204.60 | (4.7 | ) | |||||||||||||||||
2 | 1,085 | 189.29 | 174.32 | 8.6 | 65.4 | 66.8 | (1.4 | ) | 123.84 | 116.52 | 6.3 | |||||||||||||||||||
2 | 1,246 | 136.55 | 157.98 | (13.6 | ) | 65.5 | 59.7 | 5.8 | 89.47 | 94.32 | (5.1 | ) | ||||||||||||||||||
2 | 660 | 241.97 | 229.50 | 5.4 | 71.7 | 74.4 | (2.7 | ) | 173.38 | 170.57 | 1.6 | |||||||||||||||||||
Other | 11 | 3,862 | 193.98 | 192.81 | 0.6 | 63.5 | 62.1 | 1.4 | 123.18 | 119.78 | 2.8 | |||||||||||||||||||
All Markets | 39 | 23,428 | $ | 250.93 | $ | 246.35 | 1.9 | % | 71.0 | % | 69.5 | % | 1.5% pts | $ | 178.25 | $ | 171.21 | 4.1 | % |
______________________________________________
(1) Calculated based on unrounded numbers.
(2) In
Balance Sheet and Liquidity
Park's current liquidity is over
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% | 128 | ||||||||
Mortgage loan | 3.62% | 14 | ||||||||
Mortgage loan | 4.20% | 1,275 | ||||||||
Mortgage loan | 4.17% | 159 | ||||||||
Mortgage loan | 5.37% | 30 | ||||||||
2025 Senior Notes | 7.50% | 650 | ||||||||
2028 Senior Notes | 5.88% | 725 | ||||||||
2029 Senior Notes | 4.88% | 750 | ||||||||
Finance lease obligations | 7.66% | 2024 to 2028 | 1 | |||||||
Fixed Rate Debt | 5.24%(2) | 3,786 | ||||||||
Variable Rate Debt | ||||||||||
Revolver(3) | Unsecured | SOFR + 2.10% | — | |||||||
Total Variable Rate Debt | 7.44% | — | ||||||||
Add: unamortized premium | 1 | |||||||||
Less: unamortized deferred financing costs and discount | (22 | ) | ||||||||
Total Debt(4)(5) | 5.24%(2) | $ | 3,765 |
______________________________________________
(1) The loan matures in
(2) Calculated on a weighted average basis.
(3) Park has approximately
(4) Excludes
(5) Excludes the SF Mortgage Loan, which is included in debt associated with hotels in receivership in Park's consolidated balance sheets. In
Capital Investments
In
Park has approved an additional
(dollars in millions) | |||||||||
Project & Scope of Work | Estimated Start Date | Estimated Completion Date | Budget | ||||||
Guestroom renovations: Renovation of 392 guestrooms at the | Q3 2024 | Q1 2025 | $ | 40 | |||||
Guestroom additions: Adding 26 guestrooms (12 in 2024, 14 in 2025) through the conversion of suites to increase room count at the | Q3 2024 | Q1 2026 | $ | 4 | |||||
Guestroom renovations: Renovation of 197 guestrooms at the | Q3 2024 | Q1 2025 | $ | 29 | |||||
Guestroom additions: Adding 11 guestrooms (6 in 2024, 5 in 2025) through the conversion of suites to increase room count at the | Q3 2024 | Q1 2026 | $ | 2 | |||||
Guestroom renovation: Renovation of 250 guestrooms at the 1,167-room | Q3 2024 | Q4 2024 | $ | 14 |
Dividends and Share Repurchases
Park declared cash dividends during the fourth quarter 2023 of
On
During 2023, Park repurchased 14.6 million shares of common stock for a total purchase price of
Full-Year 2024 Outlook
Park expects full-year 2024 operating results to be as follows:
(unaudited, dollars in millions, except per share amounts and RevPAR) | ||||||||
Full-Year 2024 Outlook as of | ||||||||
Metric | Low | High | ||||||
Comparable RevPAR | $ | 185 | $ | 188 | ||||
Comparable RevPAR change vs. 2023 | 3.5 | % | 5.5 | % | ||||
Net income | $ | 146 | $ | 186 | ||||
Net income attributable to stockholders | $ | 134 | $ | 174 | ||||
Earnings per share – Diluted(1) | $ | 0.64 | $ | 0.83 | ||||
Operating income | $ | 397 | $ | 436 | ||||
Operating income margin | 14.9 | % | 16.1 | % | ||||
Adjusted EBITDA | $ | 645 | $ | 685 | ||||
26.8 | % | 27.8 | % | |||||
(100) bps | — bps | |||||||
Adjusted FFO per share – Diluted(1) | $ | 2.02 | $ | 2.22 |
______________________________________________
(1) Amounts are calculated based on unrounded numbers.
Park's outlook is based in part on the following assumptions:
- Comparable RevPAR for the first quarter of 2024 is expected to be between
$173 and$175 ; - The mortgage loan secured by the
Hilton Denver City Center is not called by the lender during 2024; - Includes 50 bps of RevPAR and
$9 million ofHotel Adjusted EBITDA disruption from renovations at certain of Park's hotels, of which$8 million is associated with renovations at Park'sHawaii hotels; - Adjusted FFO excludes
$55 million of default interest and late payment administrative fees associated with default of the SF Mortgage Loan for full-year 2024, which began inJune 2023 and 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 2024 of 211 million; and
- Park's Comparable portfolio as of
February 27, 2024 and does not take into account potential future acquisitions, dispositions or any financing transactions, which could result in a material change to Park’s outlook.
Park's full-year 2024 outlook is based on a number of factors, many of which are outside the Company's control, including uncertainty surrounding macro-economic factors, such as inflation, changes in interest rates, supply chain disruptions and the possibility of an economic recession or slowdown, as well as the assumptions set forth above, all of which are subject to change.
Supplemental Disclosures
In conjunction with this release, Park has furnished a financial supplement with additional disclosures on its website. Visit www.pkhotelsandresorts.com for more information. Park has no obligation to update any of the information provided to conform to actual results or changes in Park’s portfolio, capital structure or future expectations.
Corporate Responsibility
In
Park participated in the 2023 Global Real Estate Sustainability Benchmark ("GRESB") assessment for the fourth consecutive year, receiving its highest score thus far, ranking in the top third of all publicly listed GRESB participant companies in the
Conference Call
Park will host a conference call for investors and other interested parties to discuss fourth quarter and full-year 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.
Annual Stockholders Meeting
Park will host its 2024 Annual Stockholders Meeting on
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include, but are not limited to, statements related to the effects of Park's decision to cease payments on its
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 real estate investment trusts ("REIT") with a diverse portfolio of iconic and market-leading hotels and resorts with significant underlying real estate value. Park's portfolio currently consists of 43 premium-branded hotels and resorts (excluding the
Investor Contact | |
Tysons, | |
+ 1 571 302 5591 | www.pkhotelsandresorts.com |
CONSOLIDATED BALANCE SHEETS
(unaudited, in millions, except share and per share data)
2023 | 2022 | ||||||
ASSETS | |||||||
Property and equipment, net | $ | 7,459 | $ | 8,301 | |||
Contract asset | 760 | — | |||||
Intangibles, net | 42 | 43 | |||||
Cash and cash equivalents | 717 | 906 | |||||
Restricted cash | 33 | 33 | |||||
Accounts receivable, net of allowance for doubtful accounts of | 112 | 129 | |||||
Prepaid expenses | 59 | 58 | |||||
Other assets | 40 | 47 | |||||
Operating lease right-of-use assets | 197 | 214 | |||||
TOTAL ASSETS (variable interest entities – | $ | 9,419 | $ | 9,731 | |||
LIABILITIES AND EQUITY | |||||||
Liabilities | |||||||
Debt | $ | 3,765 | $ | 3,892 | |||
Debt associated with hotels in receivership | 725 | 725 | |||||
Accrued interest associated with hotels in receivership | 35 | — | |||||
Accounts payable and accrued expenses | 210 | 220 | |||||
Dividends payable | 362 | 56 | |||||
Due to hotel managers | 131 | 141 | |||||
Other liabilities | 200 | 172 | |||||
Operating lease liabilities | 223 | 234 | |||||
Total liabilities (variable interest entities – | 5,651 | 5,440 | |||||
Stockholders' Equity | |||||||
Common stock, par value | 2 | 2 | |||||
Additional paid-in capital | 4,156 | 4,321 | |||||
(Accumulated deficit) retained earnings | (344 | ) | 16 | ||||
Total stockholders' equity | 3,814 | 4,339 | |||||
Noncontrolling interests | (46 | ) | (48 | ) | |||
Total equity | 3,768 | 4,291 | |||||
TOTAL LIABILITIES AND EQUITY | $ | 9,419 | $ | 9,731 | |||
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, in millions, except per share data)
Three Months Ended | Year Ended | ||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||
Revenues | |||||||||||||||
Rooms | $ | 397 | $ | 406 | $ | 1,653 | $ | 1,559 | |||||||
Food and beverage | 178 | 175 | 696 | 606 | |||||||||||
Ancillary hotel | 61 | 63 | 264 | 261 | |||||||||||
Other | 21 | 21 | 85 | 75 | |||||||||||
Total revenues | 657 | 665 | 2,698 | 2,501 | |||||||||||
Operating expenses | |||||||||||||||
Rooms | 106 | 110 | 449 | 408 | |||||||||||
Food and beverage | 124 | 128 | 501 | 449 | |||||||||||
Other departmental and support | 151 | 160 | 635 | 613 | |||||||||||
Other property | 59 | 50 | 241 | 223 | |||||||||||
Management fees | 31 | 31 | 126 | 115 | |||||||||||
Impairment and casualty loss | — | 2 | 204 | 6 | |||||||||||
Depreciation and amortization | 94 | 65 | 287 | 269 | |||||||||||
Corporate general and administrative | 15 | 15 | 65 | 63 | |||||||||||
Other | 22 | 20 | 83 | 72 | |||||||||||
Total expenses | 602 | 581 | 2,591 | 2,218 | |||||||||||
Gain on sale of assets, net | — | — | 15 | 13 | |||||||||||
Gain on derecognition of assets | 221 | — | 221 | — | |||||||||||
Operating income | 276 | 84 | 343 | 296 | |||||||||||
Interest income | 9 | 8 | 38 | 13 | |||||||||||
Interest expense | (52 | ) | (54 | ) | (207 | ) | (217 | ) | |||||||
Interest expense associated with hotels in receivership | (14 | ) | (8 | ) | (45 | ) | (30 | ) | |||||||
Equity in earnings from investments in affiliates | 2 | 9 | 11 | 15 | |||||||||||
Other (loss) gain, net | — | (2 | ) | 4 | 96 | ||||||||||
Income before income taxes | 221 | 37 | 144 | 173 | |||||||||||
Income tax expense | (33 | ) | (2 | ) | (38 | ) | — | ||||||||
Net income | 188 | 35 | 106 | 173 | |||||||||||
Net income attributable to noncontrolling interests | (1 | ) | (1 | ) | (9 | ) | (11 | ) | |||||||
Net income attributable to stockholders | $ | 187 | $ | 34 | $ | 97 | $ | 162 | |||||||
Earnings per share: | |||||||||||||||
Earnings per share - Basic | $ | 0.89 | $ | 0.15 | $ | 0.44 | $ | 0.71 | |||||||
Earnings per share - Diluted | $ | 0.88 | $ | 0.15 | $ | 0.44 | $ | 0.71 | |||||||
Weighted average shares outstanding – Basic | 209 | 224 | 214 | 228 | |||||||||||
Weighted average shares outstanding – Diluted | 210 | 224 | 215 | 228 | |||||||||||
NON-GAAP FINANCIAL MEASURES RECONCILIATIONS
EBITDA AND ADJUSTED EBITDA
(unaudited, in millions) | Three Months Ended | Year Ended | |||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||
Net income | $ | 188 | $ | 35 | $ | 106 | $ | 173 | |||||||
Depreciation and amortization expense | 94 | 65 | 287 | 269 | |||||||||||
Interest income | (9 | ) | (8 | ) | (38 | ) | (13 | ) | |||||||
Interest expense | 52 | 54 | 207 | 217 | |||||||||||
Interest expense associated with hotels in receivership | 14 | 8 | 45 | 30 | |||||||||||
Income tax expense | 33 | 2 | 38 | — | |||||||||||
Interest expense, income tax and depreciation and amortization included in equity in earnings from investments in affiliates | 1 | 2 | 8 | 9 | |||||||||||
EBITDA | 373 | 158 | 653 | 685 | |||||||||||
Gain on sales of assets, net(1) | — | (9 | ) | (15 | ) | (22 | ) | ||||||||
Gain on derecognition of assets(2) | (221 | ) | — | (221 | ) | — | |||||||||
Gain on sale of investments in affiliates(3) | — | — | (3 | ) | (92 | ) | |||||||||
Share-based compensation expense | 4 | 4 | 18 | 17 | |||||||||||
Casualty and impairment loss | — | 2 | 204 | 6 | |||||||||||
Other items | 7 | 4 | 23 | 12 | |||||||||||
Adjusted EBITDA | $ | 163 | $ | 159 | $ | 659 | $ | 606 |
______________________________________________
(1) For the three months and year ended
(2) For the three months and year ended
(3) Included in other gain (loss), net.
NON-GAAP FINANCIAL MEASURES RECONCILIATIONS
COMPARABLE HOTEL ADJUSTED EBITDA AND
COMPARABLE HOTEL ADJUSTED EBITDA MARGIN
(unaudited, dollars in millions) | Three Months Ended | Year Ended | |||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||
Adjusted EBITDA | $ | 163 | $ | 159 | $ | 659 | $ | 606 | |||||||
Less: Adjusted EBITDA from investments in affiliates | (5 | ) | (5 | ) | (24 | ) | (25 | ) | |||||||
Add: All other(1) | 11 | 12 | 51 | 49 | |||||||||||
169 | 166 | 686 | 630 | ||||||||||||
Less: Adjusted EBITDA from hotels disposed of | — | (4 | ) | (3 | ) | (18 | ) | ||||||||
Less: Adjusted EBITDA from the | 2 | 5 | (3 | ) | 11 | ||||||||||
$ | 171 | $ | 167 | $ | 680 | $ | 623 | ||||||||
Three Months Ended | Year Ended | ||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||
Total Revenues | $ | 657 | $ | 665 | $ | 2,698 | $ | 2,501 | |||||||
Less: Other revenue | (21 | ) | (21 | ) | (85 | ) | (75 | ) | |||||||
Less: Revenues from hotels disposed of | — | (14 | ) | (10 | ) | (65 | ) | ||||||||
Less: Revenues from the | (17 | ) | (40 | ) | (162 | ) | (145 | ) | |||||||
$ | 619 | $ | 590 | $ | 2,441 | $ | 2,216 |
Three Months Ended | Year Ended | ||||||||||||||||||||
2023 | 2022 | Change(2) | 2023 | 2022 | Change(2) | ||||||||||||||||
Total Revenues | $ | 657 | $ | 665 | (1.0)% | $ | 2,698 | $ | 2,501 | 7.9 | % | ||||||||||
Operating income | $ | 276 | $ | 84 | 229.6 | % | $ | 343 | $ | 296 | 16.1 | % | |||||||||
Operating income margin(2) | 42.0 | % | 12.6 | % | 2,940 bps | 12.7 | % | 11.8 | % | 90 bps | |||||||||||
$ | 619 | $ | 590 | 4.9 | % | $ | 2,441 | $ | 2,216 | 10.2 | % | ||||||||||
$ | 171 | $ | 167 | 2.1 | % | $ | 680 | $ | 623 | 9.1 | % | ||||||||||
27.5 | % | 28.2 | % | (70) bps | 27.8 | % | 28.1 | % | (30) bps |
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(1) Includes other revenues and other expenses, non-income taxes on TRS leases included in other property expenses and corporate general and administrative expenses in the consolidated statements of operations.
(2) Percentages are calculated based on unrounded numbers.
NON-GAAP FINANCIAL MEASURES RECONCILIATIONS
NAREIT FFO AND ADJUSTED FFO
(unaudited, in millions, except per share data)
Three Months Ended | Year Ended | ||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||
Net income attributable to stockholders | $ | 187 | $ | 34 | $ | 97 | $ | 162 | |||||||
Depreciation and amortization expense | 94 | 65 | 287 | 269 | |||||||||||
Depreciation and amortization expense attributable to noncontrolling interests | (1 | ) | (1 | ) | (4 | ) | (4 | ) | |||||||
Gain on sales of assets, net | — | — | (15 | ) | (13 | ) | |||||||||
Gain on derecognition of assets(1) | (221 | ) | — | (221 | ) | — | |||||||||
Gain on sale of investments in affiliates(2) | — | — | (3 | ) | (92 | ) | |||||||||
Impairment loss | — | — | 202 | — | |||||||||||
Equity investment adjustments: | |||||||||||||||
Equity in earnings from investments in affiliates | (2 | ) | (9 | ) | (11 | ) | (15 | ) | |||||||
Pro rata FFO of investments in affiliates | 2 | 1 | 14 | 12 | |||||||||||
Nareit FFO attributable to stockholders | 59 | 90 | 346 | 319 | |||||||||||
Casualty loss | — | 2 | 2 | 6 | |||||||||||
Share-based compensation expense | 4 | 4 | 18 | 17 | |||||||||||
Interest expense associated with hotels in receivership(3) | 12 | — | 20 | — | |||||||||||
Other items(4) | 35 | 5 | 53 | 10 | |||||||||||
Adjusted FFO attributable to stockholders | $ | 110 | $ | 101 | $ | 439 | $ | 352 | |||||||
Nareit FFO per share – Diluted(5) | $ | 0.28 | $ | 0.40 | $ | 1.61 | $ | 1.40 | |||||||
Adjusted FFO per share – Diluted(5) | $ | 0.52 | $ | 0.45 | $ | 2.04 | $ | 1.54 | |||||||
Weighted average shares outstanding – Diluted | 210 | 224 | 215 | 228 |
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(1) For the three months and year ended
(2) Included in other gain (loss), net.
(3) Reflects incremental default interest expense and late payment administrative fees associated with the default of the SF Mortgage Loan beginning in
(4) For the three months and year ended
(5) Per share amounts are calculated based on unrounded numbers.
NON-GAAP FINANCIAL MEASURES RECONCILIATIONS
NET DEBT
(unaudited, in millions) | |||
Comparable | |||
Debt | $ | 3,765 | |
Add: unamortized deferred financing costs and discount | 22 | ||
Less: unamortized premium | (1 | ) | |
Debt, excluding unamortized deferred financing cost, premiums and discounts | 3,786 | ||
Add: Park's share of unconsolidated affiliates debt, excluding unamortized deferred financing costs | 164 | ||
Less: cash and cash equivalents(1) | (555 | ) | |
Less: restricted cash | (33 | ) | |
Net debt | $ | 3,362 |
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(1) Considers the additional distribution of
NON-GAAP FINANCIAL MEASURES RECONCILIATIONS
OUTLOOK – EBITDA, ADJUSTED EBITDA, COMPARABLE HOTEL ADJUSTED EBITDA
AND COMPARABLE HOTEL ADJUSTED EBITDA MARGIN
(unaudited, in millions) | Year Ending | ||||||
Low Case | High Case | ||||||
Net income | $ | 146 | $ | 186 | |||
Depreciation and amortization expense | 258 | 258 | |||||
Interest income | (17 | ) | (17 | ) | |||
Interest expense | 209 | 209 | |||||
Interest expense associated with hotels in receivership | 55 | 55 | |||||
Income tax expense | 7 | 7 | |||||
Interest expense, income tax and depreciation and amortization included in equity in earnings from investments in affiliates | 7 | 7 | |||||
EBITDA | 665 | 705 | |||||
Gain on derecognition of assets | (55 | ) | (55 | ) | |||
Share-based compensation expense | 17 | 17 | |||||
Other items | 18 | 18 | |||||
Adjusted EBITDA | 645 | 685 | |||||
Less: Adjusted EBITDA from investments in affiliates | (22 | ) | (23 | ) | |||
Add: All other | 59 | 59 | |||||
$ | 682 | $ | 721 | ||||
Year Ending | |||||||
Low Case | High Case | ||||||
Total Revenues | $ | 2,662 | $ | 2,711 | |||
Less: Other revenue | (121 | ) | (121 | ) | |||
$ | 2,541 | $ | 2,590 | ||||
Year Ending | |||||||
Low Case | High Case | ||||||
Total Revenues | $ | 2,662 | $ | 2,711 | |||
Operating income | $ | 397 | $ | 436 | |||
Operating income margin(1) | 14.9 | % | 16.1 | % | |||
$ | 2,541 | $ | 2,590 | ||||
$ | 682 | $ | 721 | ||||
26.8 | % | 27.8 | % |
______________________________________________
(1) Percentages are calculated based on unrounded numbers.
NON-GAAP FINANCIAL MEASURES RECONCILIATIONS
OUTLOOK – NAREIT FFO ATTRIBUTABLE TO STOCKHOLDERS AND
ADJUSTED FFO ATTRIBUTABLE TO STOCKHOLDERS
(unaudited, in millions except per share data) | Year Ending | ||||||
Low Case | High Case | ||||||
Net income attributable to stockholders | $ | 134 | $ | 174 | |||
Depreciation and amortization expense | 258 | 258 | |||||
Depreciation and amortization expense attributable to noncontrolling interests | (5 | ) | (5 | ) | |||
Gain on derecognition of assets | (55 | ) | (55 | ) | |||
Equity investment adjustments: | |||||||
Equity in earnings from investments in affiliates | (6 | ) | (7 | ) | |||
Pro rata FFO of equity investments | 13 | 13 | |||||
Nareit FFO attributable to stockholders | 339 | 378 | |||||
Share-based compensation expense | 17 | 17 | |||||
Interest expense associated with hotels in receivership | 55 | 55 | |||||
Other items | 15 | 17 | |||||
Adjusted FFO attributable to stockholders | $ | 426 | $ | 467 | |||
Adjusted FFO per share – Diluted(1) | $ | 2.02 | $ | 2.22 | |||
Weighted average diluted shares outstanding | 211 | 211 |
______________________________________________
(1) Per share amounts are calculated based on unrounded numbers.
DEFINITIONS
Comparable
The Company presents certain data for its consolidated hotels on a Comparable basis as supplemental information for investors:
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) debt excluding unamortized deferred financing costs; and (ii) the Company’s share of investments in affiliate debt, excluding unamortized deferred financing costs; reduced by (a) cash and cash equivalents; and (b) restricted cash and cash equivalents.
The Company believes Net debt provides useful information about its indebtedness to investors as it is frequently used by securities analysts, investors and other interested parties to compare the indebtedness of companies. Net debt should not be considered as a substitute to debt presented in accordance with
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.
Source:
2024 GlobeNewswire, Inc., source