TYSONS, Va.,
Second quarter financial highlights include:
- Pro-forma RevPAR was
$78.46 , an increase of 909.7% from the same period in 2020 and a decrease of 59.2% from the same period in 2019; - Pro-forma occupancy for Park’s 42 consolidated hotels open during the entirety of the second quarter was 55.6%;
- Net loss and net loss attributable to stockholders were
$(114) million and$(116) million , respectively; - Adjusted EBITDA was
$33 million , an increase from Adjusted EBITDA of$(49) million compared to the first quarter of 2021; Pro-forma Hotel Adjusted EBITDA was$42 million , an improvement of 222.3% compared to the first quarter of 2021;- Adjusted FFO attributable to stockholders was
$(38) million , an improvement of 66.3% compared to the first quarter of 2021; - Diluted loss per share was
$(0.49) ; and - Diluted Adjusted FFO per share was
$(0.16) .
Additional highlights include:
- Reopened four additional hotels during the quarter, with 90% of total room count currently open while only three hotels in the portfolio remain closed – New York
Hilton Midtown , Parc 55 San Francisco - aHilton Hotel andHilton Short Hills ; - In
June 2021 , broke even at the corporate level and anticipates positive cash flow for the third quarter, based on current trends; - In
May 2021 , issued an aggregate of$750 million of senior secured notes ("2029 Senior Secured Notes") and utilized the net proceeds to repay approximately$564 million of the Company's revolving credit facility ("Revolver") and approximately$173 million of the term loan entered into inAugust 2019 ("2019 Term Facility"); - Completed the sale of the
W New Orleans –French Quarter inApril 2021 for total gross proceeds of approximately$24 million , the net proceeds of which were used to repay a portion of the Revolver; - Completed the sale of the
Hotel Indigo San Diego Gaslamp Quarter inSan Diego, California and the Courtyard Washington Capitol Hill Navy Yard inWashington, D.C. in the same transaction inJune 2021 for total gross proceeds of$149 million , the net proceeds of which were used inJuly 2021 to repay the then remaining outstanding balance of the Revolver of$13 million and$133 million of the 2019 Term Facility; - In
July 2021 , completed the sale of theHotel Adagio , Autograph Collection, for gross proceeds of$82 million , for which the net proceeds were used to repay$77 million of the 2019 Term Facility; and - In
June 2021 , entered into an agreement to sell the Le Meridien San Francisco, which is expected to close during the third quarter, for a gross sales price of approximately$222 million ; the net proceeds of which are expected to be used to repay a portion of the 2019 Term Facility.
Selected Statistical and Financial Information
(unaudited, amounts in millions, except RevPAR, ADR and per share data)
Three Months Ended | Six Months Ended June 30, | ||||||||||||||||||||||
2021 | 2020 | Change(1) | 2021 | 2020 | Change(1) | ||||||||||||||||||
Pro-forma RevPAR | $ | 78.46 | $ | 7.77 | 909.7 | % | $ | 59.74 | $ | 71.84 | (16.8 | )% | |||||||||||
Pro-forma Occupancy | 42.3 | % | 6.1 | % | 36.2 | % | pts | 34.3 | % | 33.8 | % | 0.5 | % | pts | |||||||||
Pro-forma ADR | $ | 185.63 | $ | 128.34 | 44.6 | % | $ | 174.21 | $ | 212.40 | (18.0 | )% | |||||||||||
Pro-forma Total RevPAR | $ | 118.53 | $ | 14.53 | 715.6 | % | $ | 89.57 | $ | 116.76 | (23.3 | )% | |||||||||||
Net loss | $ | (114 | ) | $ | (261 | ) | NM(2) | $ | (305 | ) | $ | (950 | ) | NM(2) | |||||||||
Net loss attributable to stockholders | $ | (116 | ) | $ | (259 | ) | NM(2) | $ | (306 | ) | $ | (947 | ) | NM(2) | |||||||||
Adjusted EBITDA | $ | 33 | $ | (122 | ) | NM(2) | $ | (16 | ) | $ | (40 | ) | NM(2) | ||||||||||
$ | 42 | $ | (106 | ) | NM(2) | $ | 8 | $ | (19 | ) | NM(2) | ||||||||||||
Pro-forma Hotel Adjusted EBITDA margin | 13.7 | % | (282.7 | )% | NM(2) | 1.7 | % | (3.2 | )% | NM(2) | |||||||||||||
Adjusted FFO attributable to stockholders | $ | (38 | ) | $ | (174 | ) | NM(2) | $ | (151 | ) | $ | (117 | ) | NM(2) | |||||||||
Loss per share - Diluted(1) | $ | (0.49 | ) | $ | (1.10 | ) | NM(2) | $ | (1.30 | ) | $ | (4.01 | ) | NM(2) | |||||||||
Adjusted FFO per share - Diluted(1) | $ | (0.16 | ) | $ | (0.74 | ) | NM(2) | $ | (0.64 | ) | $ | (0.50 | ) | NM(2) | |||||||||
Weighted average shares outstanding - Diluted | 236 | 235 | 1 | 236 | 236 | — | |||||||||||||||||
(1) | Amounts are calculated based on unrounded numbers. | ||||||||||||||||||||||
(2) | Percentage change is not meaningful. |
Operational Update
Park reopened four hotels during the second quarter, increasing total rooms by 3,996 rooms. The timing of reopening our remaining three suspended hotels will depend primarily on demand recovery in their respective markets.
The current status of Park’s hotels as of
Status | Number of Hotels | Total Rooms | ||
Consolidated Open | 46 | 25,033 | ||
Consolidated Suspended | 3 | 3,216 | ||
Total Consolidated | 49 | 28,249 | ||
Unconsolidated Open | 7 | 4,297 | ||
56 | 32,546 |
Changes in Pro-forma ADR, Occupancy and RevPAR compared to the same periods in 2020 and 2019 and Pro-forma Occupancy for Park’s 49 consolidated hotels were as follows:
Change in Pro-forma ADR | Change in Pro-forma Occupancy | Change in Pro-forma RevPAR | ||||||||||||||||||||
2021 vs. 2020 | 2021 vs. 2019 | 2021 vs. 2020 | 2021 vs. 2019 | 2021 vs. 2020 | 2021 vs. 2019 | 2021 Pro-forma Occupancy | ||||||||||||||||
Q1 2021 | (29.5 | )% | (31.2 | )% | (35.4 | )% | pts | (51.2 | )% | pts | (70.0 | )% | (76.7 | )% | 26.2 | % | ||||||
47.0 | (21.3 | ) | 33.0 | (47.8 | ) | 1,326.8 | (65.8 | ) | 36.7 | |||||||||||||
75.3 | (19.5 | ) | 35.5 | (44.3 | ) | 1,351.1 | (61.6 | ) | 40.4 | |||||||||||||
36.3 | (12.8 | ) | 40.2 | (38.3 | ) | 610.5 | (50.7 | ) | 49.7 | |||||||||||||
Q2 2021 | 44.6 | (17.2 | ) | 36.2 | (43.5 | ) | 909.7 | (59.2 | ) | 42.3 |
Changes in Pro-forma ADR, Occupancy and RevPAR for each month in 2021 compared to the same periods in 2020 and 2019 and Pro-forma Occupancy for 2021 for only the consolidated hotels open during the entirety of each month were as follows:
Change in Pro-forma ADR | Change in Pro-Forma Occupancy | Change in Pro-Forma RevPAR | |||||||||||||||||||||
Number of Consolidated Hotels Open | 2021 vs. 2020 | 2021 vs. 2019 | 2021 vs. 2020 | 2021 vs. 2019 | 2021 vs. 2020 | 2021 vs. 2019 | 2021 Pro-forma Occupancy | ||||||||||||||||
40 | (37.6 | )% | (37.0 | )% | (45.9 | )% | pts | (42.6 | )% | pts | (75.3 | )% | (73.9 | )% | 30.1 | % | |||||||
40 | (30.6 | ) | (29.5 | ) | (45.9 | ) | (44.2 | ) | (69.7 | ) | (68.6 | ) | 35.6 | ||||||||||
40 | (17.1 | ) | (23.1 | ) | 9.1 | (36.7 | ) | 3.4 | (57.3 | ) | 45.9 | ||||||||||||
42 | 52.6 | (18.1 | ) | 44.4 | (34.4 | ) | 1,437.0 | (51.7 | ) | 49.3 | |||||||||||||
42 | 75.0 | (13.7 | ) | 47.3 | (28.7 | ) | 1,336.8 | (43.7 | ) | 53.8 | |||||||||||||
45 | 36.3 | (9.2 | ) | 47.8 | (27.7 | ) | 604.3 | (38.1 | ) | 59.2 |
As expected, strong demand trends continued in
For the second quarter of 2021, Park’s portfolio generated positive
Domestic leisure transient demand continued to grow significantly during the second quarter of 2021 as COVID-19 vaccinations rates increased, domestic restrictions eased and restrictions on international travel continued. The Pro-forma Rooms Revenue mix for each of three and six months ended
Three Months Ended | Six Months Ended | ||||||||||||||||
2021 | 2020 | 2019 | 2021 | 2020 | 2019 | ||||||||||||
Group | 7.9 | % | 9.1 | % | 28.3 | % | 7.5 | % | 29.8 | % | 30.7 | % | |||||
Transient | 84.7 | 66.1 | 64.9 | 84.0 | 61.4 | 63.6 | |||||||||||
Contract | 5.8 | 23.3 | 4.8 | 6.9 | 6.5 | 3.7 | |||||||||||
Other | 1.6 | 1.5 | 2.0 | 1.6 | 2.3 | 2.0 |
The change in Pro-forma Rooms Revenue for the three and six months ended
Three Months Ended | Six Months Ended | ||||
2021 vs. 2019 | 2021 vs. 2019 | ||||
Group | (84.2 | )% | (88.7 | )% | |
Transient | (25.8 | ) | (38.7 | ) | |
Contract | (32.0 | ) | (12.7 | ) | |
Other | (51.8 | ) | (61.8 | ) |
Group demand is showing signs of recovery with lead volume continuing to increase, up from 50% of 2019 levels in January to 96% of 2019 levels in July. In the quarter for the quarter bookings through June were better than expected, driven by smaller groups (up to 300 peak room nights) holding events in locations with fewer restrictions. Assuming the reopening momentum across the
Highlights for Park's consolidated hotels owned as of
Leisure Markets
Hawaii : BothHawaii hotels are open, and certain restrictions between the Hawaiian Islands have been lifted. Although the market continues to be subject to global travel restrictions, including COVID-19 testing requirements, both hotels benefited from occupancy growth from domestic leisure demand, generating positiveHotel Adjusted EBITDA during the second quarter of 2021 as demand trends continued to rapidly accelerate.Hilton Waikoloa Village andHilton Hawaiian Village achieved occupancy of 78% and 62%, respectively, for the second quarter and occupancy of 89% and 84% inJune 2021 , respectively, with rate increasing across both hotels by 2% fromJune 2019 ;Orlando : All of Park’sOrlando hotels are open and benefited from leisure demand as well as the return of some group demand during the quarter, resulting in combined occupancy of 56% inJune 2021 and 48% for the quarter;New Orleans : TheHilton New Orleans Riverside continued to benefit from an increase in leisure demand associated with loosening of state and local restrictions, and the hotel achieved occupancy of 43% inJune 2021 and 53% for the quarter;Southern California : All of Park’s hotels inSouthern California are open, and as statewide restrictions were further lifted during the second quarter, the hotels benefited from an increase in leisure demand, resulting in occupancy inJune 2021 of 75%. Occupancy for the quarter was 67% , an increase of 27 percentage points from the first quarter of 2021. Compared to the second quarter of 2019, rate increased by 7%;Key West :Casa Marina , AWaldorf Astoria Resort , and The ReachKey West , Curio Collection, are both open and continued to benefit from leisure transient demand, resulting in occupancy of 92% inJune 2021 and for the quarter. Compared to the second quarter of 2019, occupancy increased by 8 percentage points and rate increased by 36%; andMiami : Both of Park’sMiami hotels are open and benefited from strong leisure transient demand, achieving occupancy of 64% inJune 2021 and 72% for the quarter. During the second quarter, occupancy increased 6 percentage points and rate increased by approximately 9% compared to the first quarter of 2021. Rate increased by 23% compared to the second quarter of 2019.
Other Markets
San Francisco :Hilton San Francisco Union Square reopened inMay 2021 as local restrictions loosened and market demand improved, with four of Park's five hotels now open in the market.The JW Marriott San Francisco Union Square andHyatt Centric Fisherman's Wharf , both of which remained open throughout the pandemic, achieved occupancy of 46% and 60% for the quarter, respectively, and 57% and 69% inJune 2021 , respectively, an increase from approximately 26% and 30% in the first quarter of 2021 as local weekend leisure demand increased;Boston : All of Park’sBoston hotels are open and achieved combined occupancy of 56% inJune 2021 . Occupancy for the quarter was 45%, an increase of 19 percentage points from the first quarter of 2021;New York : TheHilton New York Midtown's operations remain suspended; however, Park is monitoring demand in the market and currently expects to reopen this hotel in the third quarter;Chicago : TheW Chicago - City Center,Hilton Garden Inn Chicago/Oak Brook Terrace andHilton Chicago reopened during the second quarter of 2021 as state and local restrictions were lifted. TheW Chicago – Lakeshore andHilton Chicago/Oak Brook Suites have remained open throughout the pandemic, primarily due to demand from airline crews and weekend leisure travel demand, with occupancy of 44% and 63% inJune 2021 , respectively, and 36% and 62% for the quarter, respectively;Denver : TheHilton Denver is open and benefited from the loosening of local restrictions, which resulted in occupancy of 59% inJune 2021 . Occupancy for the quarter was 50%, an increase of 26 percentage points from the first quarter of 2021;Washington, D.C. : All of Park’s hotels are open and benefited from increased leisure demand, with occupancy increasing to 36% inJune 2021 and 30% for the quarter, from 23% inMarch 2021 , and a 15% increase in rate inJune 2021 compared toMarch 2021 ;Seattle : All of Park’sSeattle hotels are open and benefited from demand from airline crews and weekend leisure travel with combined occupancy increasing to 65% inJune 2021 . Occupancy for the quarter was 51%, an increase of 24 percentage points from the first quarter of 2021.
Balance Sheet and Liquidity
Park and its hotel managers have taken several proactive steps to reduce its burn rate, increase liquidity and mitigate the effects of COVID-19 on its business, including reducing labor and other operating expenses and cutting budgeted expenditures for 2021 to approximately
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 | 3.62% | $ | 14 | |||||||
Mortgage loan | 4.90% | 59 | ||||||||
Mortgage loan | 4.11% | 27 | ||||||||
Mortgage loan | 8.25% | 75 | ||||||||
Commercial mortgage-backed securities loan | 4.11% | 725 | ||||||||
Mortgage loan | 4.25% | 138 | ||||||||
Commercial mortgage-backed securities loan | 4.20% | 1,275 | ||||||||
Mortgage loan | 4.17% | 165 | ||||||||
2025 Senior Secured Notes | 7.50% | 650 | ||||||||
2028 Senior Secured Notes | 5.88% | 725 | ||||||||
2029 Senior Secured Notes | 4.88% | 750 | ||||||||
Finance lease obligations | 3.07% | 2021 to 2022 | 1 | |||||||
Total Fixed Rate Debt | 5.10%(4) | 4,604 | ||||||||
Variable Rate Debt | ||||||||||
Revolving credit facility(5)(6) | Unsecured | L + 3.00% | 2021 to 2023 | 13 | ||||||
Mortgage loan(7) | L + 3.00% | 30 | ||||||||
2019 Term Facility(5)(8) | Unsecured | L + 2.65% | 497 | |||||||
Total Variable Rate Debt | 2.95%(4) | 540 | ||||||||
Add: unamortized premium | 3 | |||||||||
Less: unamortized deferred financing costs and discount | (47 | ) | ||||||||
Total Debt(9) | 4.94%(4) | $ | 5,100 |
(1) | In |
(2) | The loan matures in |
(3) | In |
(4) | Calculated on a weighted average basis. |
(5) | In |
(6) | In |
(7) | In |
(8) | Following the sale of the |
(9) | Excludes |
Dividends
In light of the COVID-19 pandemic, Park suspended dividend payments following the payment of its first quarter 2020 dividend.
Full-Year 2021 Outlook
Given the continued economic uncertainty, travel restrictions and rapidly changing circumstances related to the COVID-19 pandemic, Park is not providing an outlook for full-year 2021 at this time.
The Company’s ability to predict future operating results remains significantly impacted by the current COVID-19 pandemic. Park expects that the trends affecting the economy will continue to depress hotel operating results across the portfolio. While recent trends have shown signs of improvement, the economic environment continues to lack sufficient clarity at this time to provide accurate guidance.
Supplemental Disclosures
In conjunction with this release, Park has furnished a financial supplement with additional disclosures on its website. Visit www.pkhotelsandresorts.com for more information. Park has no obligation to update any of the information provided to conform to actual results or changes in Park’s portfolio, capital structure or future expectations.
Conference Call
Park will host a conference call for investors and other interested parties to discuss second quarter 2021 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 the expected reopening dates for the Company’s hotels and dates that its properties will 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 56 premium-branded hotels and resorts with over 32,000 rooms primarily located in prime city center and resort locations. Visit www.pkhotelsandresorts.com for more information.
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited, in millions, except share and per share data)
(unaudited) | |||||||
ASSETS | |||||||
Property and equipment, net | $ | 8,820 | 9,193 | ||||
Assets held for sale | 77 | — | |||||
Investments in affiliates | 13 | 14 | |||||
Intangibles, net | 44 | 45 | |||||
Cash and cash equivalents | 909 | 951 | |||||
Restricted cash | 35 | 30 | |||||
Accounts receivable, net of allowance for doubtful accounts of | 63 | 26 | |||||
Prepaid expenses | 35 | 39 | |||||
Other assets | 50 | 60 | |||||
Operating lease right-of-use assets | 220 | 229 | |||||
TOTAL ASSETS (variable interest entities - | $ | 10,266 | $ | 10,587 | |||
LIABILITIES AND EQUITY | |||||||
Liabilities | |||||||
Debt | $ | 5,100 | 5,121 | ||||
Accounts payable and accrued expenses | 178 | 147 | |||||
Due to hotel managers | 90 | 88 | |||||
Deferred income tax liabilities | 10 | 10 | |||||
Other liabilities | 107 | 134 | |||||
Operating lease liabilities | 236 | 244 | |||||
Total liabilities (variable interest entities - | 5,721 | 5,744 |
Stockholders' Equity | |||||||
Common stock, par value | 2 | 2 | |||||
Additional paid-in capital | 4,525 | 4,519 | |||||
Retained earnings | 70 | 376 | |||||
Accumulated other comprehensive loss | (3 | ) | (4 | ) | |||
Total stockholders' equity | 4,594 | 4,893 | |||||
Noncontrolling interests | (49 | ) | (50 | ) | |||
Total equity | 4,545 | 4,843 | |||||
TOTAL LIABILITIES AND EQUITY | $ | 10,266 | $ | 10,587 |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, in millions, except per share data)
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||
Revenues | |||||||||||||||
Rooms | $ | 207 | $ | 21 | $ | 313 | $ | 383 | |||||||
Food and beverage | 54 | 3 | 76 | 164 | |||||||||||
Ancillary hotel | 50 | 15 | 79 | 72 | |||||||||||
Other | 12 | 3 | 20 | 22 | |||||||||||
Total revenues | 323 | 42 | 488 | 641 | |||||||||||
Operating expenses | |||||||||||||||
Rooms | 59 | 20 | 94 | 132 | |||||||||||
Food and beverage | 42 | 14 | 63 | 137 | |||||||||||
Other departmental and support | 101 | 60 | 179 | 232 | |||||||||||
Other property-level | 52 | 56 | 100 | 116 | |||||||||||
Management fees | 14 | — | 21 | 25 | |||||||||||
Impairment loss and casualty gain, net | 5 | — | 5 | 694 | |||||||||||
Depreciation and amortization | 71 | 75 | 145 | 150 | |||||||||||
Corporate general and administrative | 16 | 14 | 34 | 30 | |||||||||||
Other | 13 | 4 | 20 | 25 | |||||||||||
Total expenses | 373 | 243 | 661 | 1,541 | |||||||||||
Gain on sales of assets, net | 6 | 1 | 6 | 63 | |||||||||||
Operating loss | (44 | ) | (200 | ) | (167 | ) | (837 | ) | |||||||
Interest income | — | 1 | — | 2 | |||||||||||
Interest expense | (66 | ) | (50 | ) | (129 | ) | (90 | ) | |||||||
Equity in losses from investments in affiliates | (2 | ) | (8 | ) | (6 | ) | (9 | ) | |||||||
Other loss, net | (2 | ) | (1 | ) | (2 | ) | (3 | ) | |||||||
Loss before income taxes | (114 | ) | (258 | ) | (304 | ) | (937 | ) | |||||||
Income tax expense | — | (3 | ) | (1 | ) | (13 | ) | ||||||||
Net loss | (114 | ) | (261 | ) | (305 | ) | (950 | ) | |||||||
Net (income) loss attributable to noncontrolling interests | (2 | ) | 2 | (1 | ) | 3 | |||||||||
Net loss attributable to stockholders | $ | (116 | ) | $ | (259 | ) | $ | (306 | ) | $ | (947 | ) |
Loss per share: | |||||||||||||||
Loss per share - Basic | $ | (0.49 | ) | $ | (1.10 | ) | $ | (1.30 | ) | $ | (4.01 | ) | |||
Loss per share - Diluted | $ | (0.49 | ) | $ | (1.10 | ) | $ | (1.30 | ) | $ | (4.01 | ) | |||
Weighted average shares outstanding - Basic | 236 | 235 | 235 | 236 | |||||||||||
Weighted average shares outstanding - Diluted | 236 | 235 | 236 | 236 |
NON-GAAP FINANCIAL MEASURES RECONCILIATIONS
EBITDA AND ADJUSTED EBITDA
(unaudited, in millions) | Three Months Ended | Six Months Ended June 30, | |||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||
Net loss | $ | (114 | ) | $ | (261 | ) | $ | (305 | ) | $ | (950 | ) | |||
Depreciation and amortization expense | 71 | 75 | 145 | 150 | |||||||||||
Interest income | — | (1 | ) | — | (2 | ) | |||||||||
Interest expense | 66 | 50 | 129 | 90 | |||||||||||
Income tax expense | — | 3 | 1 | 13 | |||||||||||
Interest expense, income tax and depreciation and amortization included in equity in earnings from investments in affiliates | 4 | 4 | 5 | 9 | |||||||||||
EBITDA | 27 | (130 | ) | (25 | ) | (690 | ) | ||||||||
Gain on sales of assets, net | (6 | ) | (1 | ) | (6 | ) | (63 | ) | |||||||
Acquisition costs | — | — | — | 1 | |||||||||||
Severance expense | — | — | — | 2 | |||||||||||
Share-based compensation expense | 4 | 4 | 10 | 6 | |||||||||||
Impairment loss and casualty gain, net | 5 | — | 5 | 694 | |||||||||||
Other items | 3 | 5 | — | 10 | |||||||||||
Adjusted EBITDA | $ | 33 | $ | (122 | ) | $ | (16 | ) | $ | (40 | ) |
NON-GAAP FINANCIAL MEASURES RECONCILIATIONS
PRO-FORMA HOTEL ADJUSTED EBITDA AND
PRO-FORMA HOTEL ADJUSTED EBITDA MARGIN
(unaudited, dollars in millions) | Three Months Ended | Six Months Ended | |||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||
Adjusted EBITDA | $ | 33 | $ | (122 | ) | $ | (16 | ) | $ | (40 | ) | ||||
Less: Adjusted EBITDA from investments in affiliates | (2 | ) | 4 | — | — | ||||||||||
Add: All other(1) | 11 | 10 | 22 | 23 | |||||||||||
42 | (108 | ) | 6 | (17 | ) | ||||||||||
Less: Adjusted EBITDA from hotels disposed of | — | 2 | 2 | (2 | ) | ||||||||||
$ | 42 | $ | (106 | ) | $ | 8 | $ | (19 | ) | ||||||
Three Months Ended | Six Months Ended | ||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||
Total Revenues | $ | 323 | $ | 42 | $ | 488 | $ | 641 | |||||||
Less: Other revenue | (12 | ) | (3 | ) | (20 | ) | (22 | ) | |||||||
Less: Revenues from hotels disposed of | (6 | ) | (2 | ) | (10 | ) | (19 | ) | |||||||
$ | 305 | $ | 37 | $ | 458 | $ | 600 |
Three Months Ended | Six Months Ended | ||||||||||||||||||||||||
2021 | 2020 | Change(2) | 2021 | 2020 | Change(2) | ||||||||||||||||||||
$ | 305 | $ | 37 | 715.6 | % | $ | 458 | $ | 600 | (23.7 | )% | ||||||||||||||
$ | 42 | $ | (106 | ) | NM(3) | $ | 8 | $ | (19 | ) | NM(3) | ||||||||||||||
Pro-forma Hotel Adjusted EBITDA margin(2) | 13.7 | % | (282.7 | )% | NM(3) | 1.7 | % | (3.2 | )% | NM(3) | |||||||||||||||
(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. | ||||||||||||||||||||||||
(3) | Percentage change is not meaningful. |
NON-GAAP FINANCIAL MEASURES RECONCILIATIONS
NAREIT FFO AND ADJUSTED FFO
(unaudited, in millions, except per share data)
Three Months Ended | Six Months Ended June 30, | ||||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||||
Net loss attributable to stockholders | $ | (116 | ) | $ | (259 | ) | $ | (306 | ) | $ | (947 | ) | |||||
Depreciation and amortization expense | 71 | 75 | 145 | 150 | |||||||||||||
Depreciation and amortization expense attributable to noncontrolling interests | (1 | ) | (1 | ) | (2 | ) | (2 | ) | |||||||||
Gain on sales of assets, net | (6 | ) | (1 | ) | (6 | ) | (63 | ) | |||||||||
Gain on sale of investments in affiliates(1) | — | (1 | ) | — | (1 | ) | |||||||||||
Impairment loss | 5 | — | 5 | 695 | |||||||||||||
Equity investment adjustments: | — | — | — | — | |||||||||||||
Equity in losses from investments in affiliates | 2 | 8 | 6 | 9 | |||||||||||||
Pro rata FFO of investments in affiliates | — | (4 | ) | (2 | ) | (3 | ) | ||||||||||
Nareit FFO attributable to stockholders | (45 | ) | (183 | ) | (160 | ) | (162 | ) | |||||||||
Severance expense | — | — | — | 2 | |||||||||||||
Acquisition costs | — | — | — | 1 | |||||||||||||
Share-based compensation expense | 4 | 4 | 10 | 6 | |||||||||||||
Other items(2) | 3 | 5 | (1 | ) | 36 | ||||||||||||
Adjusted FFO attributable to stockholders | $ | (38 | ) | $ | (174 | ) | $ | (151 | ) | $ | (117 | ) | |||||
Nareit FFO per share - Diluted(3) | $ | (0.19 | ) | $ | (0.78 | ) | $ | (0.68 | ) | $ | (0.69 | ) | |||||
Adjusted FFO per share - Diluted(3) | $ | (0.16 | ) | $ | (0.74 | ) | $ | (0.64 | ) | $ | (0.50 | ) | |||||
Weighted average shares outstanding - Diluted | 236 | 235 | 236 | 236 | |||||||||||||
(1) | Included in other loss, net in the condensed consolidated statements of operations. | ||||||||||||||||
(2) | The six months ended | ||||||||||||||||
(3) | Per share amounts are calculated based on unrounded numbers. |
NON-GAAP FINANCIAL MEASURES RECONCILIATIONS
NET DEBT
(unaudited, in millions) | |||
Debt | $ | 5,100 | |
Add: unamortized deferred financing costs and discount | 47 | ||
Less: unamortized premium | (3 | ) | |
Long-term debt, including current maturities and excluding unamortized deferred financing cost, premiums and discounts | 5,144 | ||
Add: Park's share of unconsolidated affiliates debt, excluding unamortized deferred financing costs | 225 | ||
Less: cash and cash equivalents | (909 | ) | |
Less: restricted cash | (35 | ) | |
Net debt | $ | 4,425 |
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 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.
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