UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 31, 2019
Park Hotels & Resorts Inc.
(Exact name of Registrant as Specified in Its Charter)
Delaware |
001-37795 |
36-2058176 |
(State or Other Jurisdiction of Incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
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1775 Tysons Blvd., 7th Floor, Tysons, VA |
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22102 |
(Address of Principal Executive Offices) |
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(Zip Code) |
(571) 302-5757
(Registrant’s Telephone Number, Including Area Code)
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2. below):
☐ |
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
☐ |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
☐ |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
☐ |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
Trading Symbol |
Name of each exchange on which registered |
Common Stock, $0.01 par value per share |
PK |
New York Stock Exchange |
Item 2.02. Results of Operations and Financial Condition.
On July 31, 2019, Park Hotels & Resorts Inc. (the “Company”) issued a press release announcing its results of operations for the second quarter ended June 30, 2019 and made available certain supplemental information concerning the portfolio and operation of the Company. Copies of the press release and the supplemental information are furnished as Exhibits 99.1 and Exhibit 99.2, respectively, to this Current Report on Form 8-K.
In accordance with General Instructions B.2 of Form 8-K, the information included in Item 2.02 of this Current Report on Form 8-K (including Exhibits 99.1 and 99.2 hereto) shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into any filing made by the Company under the Exchange Act or Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such a filing.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
Exhibit Number |
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Description |
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Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
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Park Hotels & Resorts Inc. |
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Date: July 31, 2019 |
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By: |
/s/ Sean M. Dell’Orto |
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Sean M. Dell’Orto |
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Executive Vice President, Chief Financial Officer and Treasurer |
Exhibit 99.1
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Investor Contact |
1775 Tysons Boulevard, 7th Floor |
Ian Weissman |
Tysons, VA 22102 |
+ 1 571 302 5591 |
www.pkhotelsandresorts.com |
Park Hotels & Resorts Inc. Reports Second Quarter 2019 Results
TYSONS, VA (July 31, 2019) – Park Hotels & Resorts Inc. (“Park” or the “Company”) (NYSE: PK) today announced results for the second quarter ended June 30, 2019. Highlights include:
Second Quarter 2019 Highlights
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• |
Comparable RevPAR was $191.72, an increase of 0.8% from the same period in 2018; |
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Net income was $84 million and net income attributable to stockholders was $82 million; |
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Adjusted EBITDA was $207 million; |
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Adjusted FFO attributable to stockholders was $164 million; |
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Diluted earnings per share was $0.40; |
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Diluted Adjusted FFO per share was $0.81; |
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Comparable Hotel Adjusted EBITDA margin was 31.3% or a decrease of 90 bps from the same period in 2018; |
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Completed the sale of the Hilton Atlanta Airport, Embassy Suites Parsippany and Hilton New Orleans Airport for total gross proceeds of $166 million; |
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Entered into a merger agreement with Chesapeake Lodging Trust, which is currently expected to close in mid-to-late September of 2019; and |
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Park and its JV partners entered into an agreement to sell the Conrad Dublin for a gross sales price of approximately $130 million. |
Thomas J. Baltimore, Jr., Chairman, President and Chief Executive Officer, stated, “I am pleased to announce results for another solid quarter with RevPAR increasing 0.8% against very difficult year-over-year comparisons and a challenging demand environment. We delivered strong operating results in Key West, San Francisco and Southern California, while overall softness in business transient impacted markets like New York and Chicago. Despite these challenges, our comparable portfolio grew RevPAR index share by 350 basis points in aggregate, highlighting the continued success of our asset management initiatives. We also closed on the sale of three hotels in the quarter for total gross proceeds of $166 million, which is in line with our strategy to reduce leverage as part of the proposed Chesapeake acquisition. Finally, we continue to make meaningful progress toward closing the proposed Chesapeake acquisition, with Chesapeake recently announcing that it has entered into an agreement to sell its two New York City hotels. We remain on track to close the proposed Chesapeake acquisition in mid-to-late September 2019. We have strong conviction about the opportunity, and we remain confident in the long-term benefits of this transaction.”
1
Selected Statistical and Financial Information
(unaudited, amounts in millions, except per share data, Comparable RevPAR and Comparable ADR)
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Three Months Ended June 30, |
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Six Months Ended June 30, |
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2019 |
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2018 |
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Change(1) |
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2019 |
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2018 |
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Change(1) |
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Comparable RevPAR |
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$ |
191.72 |
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$ |
190.22 |
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0.8 |
% |
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$ |
185.41 |
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$ |
180.83 |
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2.5 |
% |
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Comparable Occupancy |
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86.6 |
% |
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85.9 |
% |
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0.7 |
% pts |
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83.1 |
% |
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82.5 |
% |
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0.6 |
% pts |
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Comparable ADR |
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$ |
221.40 |
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$ |
221.47 |
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(0.0 |
)% |
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$ |
223.19 |
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$ |
219.16 |
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1.8 |
% |
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Net income |
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$ |
84 |
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$ |
218 |
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(61.5 |
)% |
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$ |
181 |
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$ |
367 |
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(50.7 |
)% |
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Net income attributable to stockholders |
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$ |
82 |
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$ |
216 |
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(62.0 |
)% |
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$ |
178 |
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$ |
366 |
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(51.4 |
)% |
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Adjusted EBITDA |
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$ |
207 |
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$ |
228 |
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(9.2 |
)% |
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$ |
383 |
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$ |
402 |
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(4.7 |
)% |
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Comparable Hotel Adjusted EBITDA |
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$ |
208 |
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$ |
212 |
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(1.8 |
)% |
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$ |
384 |
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$ |
374 |
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2.9 |
% |
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Comparable Hotel Adjusted EBITDA margin |
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31.3 |
% |
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32.2 |
% |
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(90 |
) bps |
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30.0 |
% |
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30.1 |
% |
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(10 |
) bps |
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Adjusted FFO attributable to stockholders |
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$ |
164 |
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$ |
187 |
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(12.3 |
)% |
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$ |
300 |
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$ |
324 |
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(7.4 |
)% |
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Earnings per share - Diluted(1) |
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$ |
0.40 |
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$ |
1.07 |
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(62.6 |
)% |
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$ |
0.88 |
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$ |
1.77 |
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(50.3 |
)% |
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Adjusted FFO per share - Diluted(1) |
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$ |
0.81 |
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$ |
0.93 |
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(12.9 |
)% |
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$ |
1.49 |
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$ |
1.57 |
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(5.1 |
)% |
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Weighted average shares outstanding - Diluted |
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202 |
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201 |
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1 |
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202 |
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206 |
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(4 |
) |
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Top 10 Hotels
RevPAR at Park’s Top 10 Hotels increased 1.0% during the second quarter and 3.0% year-to-date, as compared to the same periods in 2018, primarily due to a 1.7% increase in occupancy, offset by a 0.9% decrease in rate during the second quarter, while year-to-date growth was due to a 1.2% increase in occupancy and a 1.6% increase in rate. Highlights within the Top 10 Hotels include:
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Hilton Hawaiian Village Waikiki Beach Resort: RevPAR increased 0.8% for the quarter and 0.6% year-to-date primarily due to an increase in group revenue; |
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Hilton San Francisco Union Square / Parc 55 San Francisco – a Hilton Hotel: Combined RevPAR increased 4.5% for the quarter and 13.8% year-to-date due to strong group demand, resulting in an increase in group revenue of 12.8% and 27.0%, respectively, coupled with a 2.6% and 9.2% increase in contract revenue for the quarter and year-to-date, respectively; |
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New York Hilton Midtown: RevPAR decreased 1.7% for the quarter and 1.5% year-to-date primarily due to a decline in rate as a result of a decrease in group business, partially offset by increases in both transient and contract business; |
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Hilton Orlando Bonnet Creek / Waldorf Astoria Orlando: Combined RevPAR increased 2.1% for the quarter and 0.7% year-to-date primarily due to an increase in RevPAR of 6.1% at the Waldorf Astoria Orlando for the quarter and an overall increase in group business year-to-date; |
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Hilton New Orleans Riverside: RevPAR decreased 5.3% for the quarter and 1.7% year-to-date primarily due to a decrease in group revenue for the quarter, partially offset by increases in both transient and contract business; |
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Hilton Chicago: RevPAR decreased 1.4% during the quarter and 2.6% year-to-date as a result of a decrease in group revenue from fewer citywide event room nights; |
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Casa Marina, A Waldorf Astoria Resort: RevPAR increased 6.2% during the quarter and 7.1% year-to-date primarily attributable to an increase in occupancy from strong transient demand; and |
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Hilton Waikoloa Village: RevPAR increased 4.5% for the quarter, primarily due to increases in occupancy as a result of an increase in transient and contract business, which until this quarter, experienced disruption caused by the 2018 volcanic activity on the Big Island, contributing to a year-to-date RevPAR decrease of 1.4%. |
Total Consolidated Comparable Hotels
Comparable RevPAR increased 0.8% for the quarter and 2.5% year-to-date. The increase in comparable RevPAR during the quarter was primarily due to increases in transient and contract revenues of 1.1% and 11.4%, respectively, as a result of an increase in occupancy, which was partially offset by a decrease in group revenue of 1.7%. The year-to-date increase in comparable RevPAR was primarily due to increases in group, contract and transient revenues of 4.0%, 13.8% and 0.4%, respectively. Group and contract revenue benefited from increases in both occupancy and rate.
2
The overall increase in comparable RevPAR for both periods was primarily a result of increases in occupancy at both Park’s Northern California and Southern California hotels. Northern California benefited from increases in rate and occupancy at Park’s San Francisco hotels due to increases in group and contract revenue of 12.8% and 2.6%, respectively, during the quarter and 27.0% and 9.2%, respectively, year-to-date. Southern California benefited primarily from a 28.8% and 38.0% RevPAR increase at the Hilton Santa Barbara Beachfront Resort during the quarter and year-to-date, respectively, from increases in occupancy and rate following the renovation and repositioning of the hotel completed in April 2018. Additionally, RevPAR increased at Park’s Hawaii hotels during the quarter and year-to-date primarily as a result of an increase in occupancy of 8.8% and 2.4%, respectively, at the Hilton Waikoloa Village.
The overall increase in RevPAR for our comparable hotels was partially offset by declines in RevPAR at our Chicago, New York and New Orleans hotels for both the quarter and year-to-date. The decline in RevPAR in Park’s Chicago hotels was primarily a result of a decrease in group revenue resulting from fewer citywide event room nights. The declines in RevPAR at Park’s New York and New Orleans hotels were primarily due to lower group business, only partially offset by an increase in transient and contract business.
Insurance Update
In September 2017, Hurricanes Irma and Maria caused damage and disruption at the Caribe Hilton in San Juan Puerto Rico and Park’s two hotels in Key West, Florida. The Caribe Hilton, which was closed throughout 2018, reopened on June 19, 2019.
For the second quarter, the Caribe Hilton incurred a $4 million Adjusted EBITDA loss as a result of not receiving an anticipated $5 million of business interruption proceeds. Subsequent to the end of the second quarter, the insurance carriers authorized an additional $10 million advance, of which approximately $4 million has been received and the remainder is expected to be received in the coming weeks. To date, Park has received approximately $124 million of insurance proceeds for the Caribe Hilton under this claim.
Additionally, to date Park has received $8 million of insurance proceeds related to property damage for both the Key West hotels. Park expects to finalize the insurance claims related to its Puerto Rico and Key West hotels by the end of 2019.
Dispositions
In June 2019, Park sold the 507-room Hilton Atlanta Airport in Atlanta, GA, the 274-room Embassy Suites Parsippany in Parsippany, NJ and the 317-room Hilton New Orleans Airport in New Orleans, LA for a combined sales price of $166 million or $151,000 per key.
In July 2019, Park and other owners of the entity that owns the Conrad Dublin, entered into an agreement to sell their ownership interests in the entity for a gross sales price of approximately $130 million. Proceeds are payable in cash at closing and are subject to customary pro rations and adjustments. Park’s pro-rata share of the gross sales price is approximately $62 million, which will be used for general corporate purposes, including a potential distribution to stockholders, subject to declaration by Park’s Board of Directors. The sale is subject to customary closing conditions and required regulatory approvals and is currently anticipated to close in the fourth quarter of 2019.
3
Park had the following debt outstanding as of June 30, 2019:
(unaudited, dollars in millions) |
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Debt |
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Collateral |
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Interest Rate |
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Maturity Date |
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As of June 30, 2019 |
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Fixed Rate Debt |
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Mortgage loan |
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DoubleTree Hotel Spokane City Center |
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3.55% |
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October 2020 |
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$ |
12 |
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Commercial mortgage-backed securities loan |
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Hilton San Francisco Union Square, Parc 55 San Francisco - a Hilton Hotel |
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4.11% |
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November 2023 |
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725 |
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Commercial mortgage-backed securities loan |
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Hilton Hawaiian Village Beach Resort |
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4.20% |
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November 2026 |
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1,275 |
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Mortgage loan |
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Hilton Santa Barbara Beachfront Resort |
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4.17% |
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December 2026 |
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165 |
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Capital lease obligations |
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3.07% |
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2021 to 2022 |
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1 |
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Total Fixed Rate Debt |
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4.16%(1) |
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2,178 |
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Variable Rate Debt |
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Revolving credit facility(2) |
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Unsecured |
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L + 1.60% |
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December 2021(3) |
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— |
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Term loan |
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Unsecured |
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L + 1.55% |
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December 2021 |
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750 |
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Mortgage loan |
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DoubleTree Hotel Ontario Airport |
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L + 2.25% |
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May 2022(3) |
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30 |
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Total Variable Rate Debt |
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3.98% |
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780 |
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Less: unamortized deferred financing costs and discount |
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(9 |
) |
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Total Debt(4) |
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4.11%(1) |
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$ |
2,949 |
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(1) |
Calculated on a weighted average basis. |
(2) |
$1 billion available. |
(3) |
Assumes the exercise of all extensions that are exercisable solely at Park’s option. |
(4) |
Excludes $234 million of Park’s share of debt of its unconsolidated joint ventures. |
Total cash and cash equivalents were $480 million as of June 30, 2019, including $170 million of restricted cash, of which $154 million is held in escrow and is expected to be used in a 1031 tax deferred exchange.
Capital Investments
Excluding the redevelopment of the Caribe Hilton, Park invested $29 million in the second quarter on capital improvements at its hotels, including $19 million on improvements made to guest rooms, meeting spaces and other guest-facing areas. Key projects for the quarter included:
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Hilton Orlando Bonnet Creek: $5 million primarily on meeting room and guest room renovations; |
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Hilton Hawaiian Village Waikiki Beach Resort: $2 million primarily on guest room and exterior renovations; |
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Hilton New Orleans Riverside: $2 million primarily on guest room renovations; |
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Waldorf Astoria Reach Resort: $2 million primarily on guest room renovations in anticipation of conversion of the hotel to the Curio brand, which is expected to be completed by the end of 2019. |
Dividends
Park declared a second quarter 2019 cash dividend of $0.45 per share to stockholders of record as of June 28, 2019. The second quarter 2019 cash dividend was paid on July 15, 2019.
On July 26, 2019, Park declared a third quarter 2019 cash dividend of $0.45 per share to be paid on October 15, 2019 to stockholders of record as of September 30, 2019.
4
Hilton Waikoloa Village is included in Park’s 2019 comparable hotels as its room count is expected to remain consistent throughout 2019 as compared to 2018. The full-year outlook has been adjusted to remove the June 2019 asset sales and reflect pricing of Park’s property insurance renewal, which occurred in June 2019. Park expects the full-year 2019 operating results, excluding the effect of the acquisition of Chesapeake Lodging Trust (“Chesapeake”) to be as follows:
(unaudited, dollars in millions, except per share amounts and Comparable RevPAR) |
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2019 Outlook |
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2019 Outlook |
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Change at |
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as of July 31, 2019 |
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as of May 6, 2019 |
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Midpoint |
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Metric |
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Low |
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High |
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Low |
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High |
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Comparable RevPAR Growth |
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2.0 |
% |
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3.5 |
% |
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2.5 |
% |
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4.5 |
% |
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-0.75 |
% |
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Comparable RevPAR |
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$ |
183 |
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$ |
186 |
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$ |
181 |
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$ |
184 |
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$ |
2 |
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Net income |
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$ |
329 |
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$ |
353 |
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$ |
358 |
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$ |
386 |
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$ |
(31.0 |
) |
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Net income attributable to stockholders |
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$ |
322 |
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$ |
346 |
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$ |
350 |
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$ |
378 |
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$ |
(30.0 |
) |
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Diluted earnings per share(1) |
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$ |
1.59 |
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$ |
1.71 |
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$ |
1.73 |
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$ |
1.87 |
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$ |
(0.15 |
) |
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Adjusted EBITDA |
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$ |
735 |
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$ |
760 |
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$ |
750 |
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$ |
780 |
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$ |
(17.5 |
) |
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Comparable Hotel Adjusted EBITDA margin change |
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0 |
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bps |
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50 |
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bps |
|
20 |
|
bps |
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|
80 |
|
bps |
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(25 |
) |
bps |
Adjusted FFO per share - Diluted(1) |
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$ |
2.86 |
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$ |
2.98 |
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$ |
2.93 |
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$ |
3.07 |
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$ |
(0.08 |
) |
|
(1) |
Per share amounts are calculated based on unrounded numbers. |
Full-year 2019 guidance is based in part on the following assumptions:
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General and administrative expenses are projected to be $44 million, excluding $15 million of non-cash share-based compensation expense, $7 million of transaction costs and $1 million of severance expense; |
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Fully diluted weighted average shares are expected to be 201.9 million; |
|
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Includes $8 million of Adjusted EBITDA from the Caribe Hilton representing a partial year of operations, for which Park expects to be covered by business interruption insurance resulting from the hotel being closed for a portion of 2019 following the damage caused by Hurricane Maria; and |
|
• |
Excludes potential future acquisitions and dispositions, which could result in a material change to Park’s outlook, including the effect of the acquisition of Chesapeake. |
Park’s full-year 2019 guidance is based on a number of factors, many of which are outside the Company’s control and all of which are subject to change. Park may change the guidance provided during the year as actual and anticipated results vary from these assumptions.
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 2019 results on Thursday, August 1, 2019 beginning at 10:00 a.m. Eastern Time. Participants may listen to the live webcast by logging onto the Investors section of the website at www.pkhotelsandresorts.com. Alternatively, participants may listen to the live call by dialing (877) 451-6152 in the United States or (201) 389-0879 internationally and requesting Park Hotels & Resorts’ Second Quarter 2019 Earnings Conference Call. Participants are encouraged to dial into the call or link to the webcast at least ten minutes prior to the scheduled start time.
A replay and transcript of the webcast will be available within 24 hours after the live event on the Investors section of Park’s website.
5
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include, but are not limited to, statements related to Park’s current expectations regarding the performance of its business, financial results, liquidity and capital resources, the effects of competition and the effects of future legislation or regulations, the expected completion of anticipated acquisitions and dispositions, the declaration and payment of future dividends, the expected timetable and likelihood for completing the proposed transaction involving Park and Chesapeake, statements about the benefits of the proposed transaction involving Park and Chesapeake and other non-historical statements. Forward-looking statements include all statements that are not historical facts, and in some cases, can be identified by the use of forward-looking terminology such as the words “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “could,” “seeks,” “projects,” “predicts,” “intends,” “plans,” “estimates,” “anticipates” or the negative version of these words or other comparable words.
Forward-looking statements involve risks, uncertainties and assumptions. Actual results may differ materially from those expressed in these forward-looking statements for various reasons, including risks associated with Park’s ability to consummate the proposed transaction with Chesapeake and the timing of the closing of the proposed transaction; and the availability of financing; as well as other risks and uncertainties detailed from time to time in Park’s filings with the SEC. You should not put undue reliance on any forward-looking statements and Park urges investors to carefully review the disclosures Park makes concerning risk and uncertainties in Item 1A: “Risk Factors” in Park’s Annual Report on Form 10-K for the year ended December 31, 2018, as such factors may be updated from time to time in Park’s filings with the SEC, which are accessible on the SEC’s website at www.sec.gov. Except as required by law, Park undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.
Non-GAAP Financial Measures
Park presents certain non-GAAP financial measures in this press release, including Nareit FFO attributable to stockholders Adjusted FFO attributable to stockholders, EBITDA, Adjusted EBITDA, Hotel Adjusted EBITDA, and Hotel Adjusted EBITDA margin. These non-GAAP financial measures should be considered along with, but not as alternatives to, net income (loss) as a measure of its operating performance. Please see the schedules included in this press release including the “Definitions” section for additional information and reconciliations of such non-GAAP financial measures.
About Park
Park is 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 48 premium-branded hotels and resorts with over 29,000 rooms, a substantial portion of which are located in prime United States markets with high barriers to entry.
6
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited, in millions, except share and per share data)
|
|
June 30, |
|
|
December 31, |
|
||
|
|
2019 |
|
|
2018 |
|
||
ASSETS |
|
|
|
|
|
|
|
|
Property and equipment, net |
|
$ |
7,764 |
|
|
$ |
7,975 |
|
Investments in affiliates |
|
|
52 |
|
|
|
50 |
|
Goodwill |
|
|
607 |
|
|
|
607 |
|
Intangibles, net |
|
|
2 |
|
|
|
27 |
|
Cash and cash equivalents |
|
|
310 |
|
|
|
410 |
|
Restricted cash |
|
|
170 |
|
|
|
15 |
|
Accounts receivable, net |
|
|
186 |
|
|
|
153 |
|
Prepaid expenses |
|
|
88 |
|
|
|
82 |
|
Other assets |
|
|
45 |
|
|
|
44 |
|
Operating lease right-of-use asset |
|
|
207 |
|
|
|
— |
|
TOTAL ASSETS |
|
$ |
9,431 |
|
|
$ |
9,363 |
|
LIABILITIES AND EQUITY |
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
|
Debt |
|
$ |
2,949 |
|
|
$ |
2,948 |
|
Accounts payable and accrued expenses |
|
|
208 |
|
|
|
183 |
|
Due to hotel manager |
|
|
117 |
|
|
|
137 |
|
Due to Hilton Grand Vacations |
|
|
135 |
|
|
|
135 |
|
Deferred income tax liabilities |
|
|
42 |
|
|
|
42 |
|
Other liabilities |
|
|
204 |
|
|
|
332 |
|
Operating lease liability |
|
|
200 |
|
|
|
— |
|
Total liabilities |
|
|
3,855 |
|
|
|
3,777 |
|
Stockholders' Equity |
|
|
|
|
|
|
|
|
Common stock, par value $0.01 per share, 6,000,000,000 shares authorized, 201,799,199 shares issued and 201,621,099 shares outstanding as of June 30, 2019 and 201,290,458 shares issued and 201,198,381 shares outstanding as of December 31, 2018 |
|
|
2 |
|
|
|
2 |
|
Additional paid-in capital |
|
|
3,591 |
|
|
|
3,589 |
|
Retained earnings |
|
|
2,034 |
|
|
|
2,047 |
|
Accumulated other comprehensive loss |
|
|
(5 |
) |
|
|
(6 |
) |
Total stockholders' equity |
|
|
5,622 |
|
|
|
5,632 |
|
Noncontrolling interests |
|
|
(46 |
) |
|
|
(46 |
) |
Total equity |
|
|
5,576 |
|
|
|
5,586 |
|
TOTAL LIABILITIES AND EQUITY |
|
$ |
9,431 |
|
|
$ |
9,363 |
|
7
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, in millions, except per share data)
|
|
Three Months Ended |
|
|
Six Months Ended |
|
||||||||||
|
|
June 30, |
|
|
June 30, |
|
||||||||||
|
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
||||
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rooms |
|
$ |
435 |
|
|
$ |
451 |
|
|
$ |
840 |
|
|
$ |
869 |
|
Food and beverage |
|
|
195 |
|
|
|
205 |
|
|
|
378 |
|
|
|
388 |
|
Ancillary hotel |
|
|
54 |
|
|
|
58 |
|
|
|
107 |
|
|
|
108 |
|
Other |
|
|
19 |
|
|
|
17 |
|
|
|
37 |
|
|
|
34 |
|
Total revenues |
|
|
703 |
|
|
|
731 |
|
|
|
1,362 |
|
|
|
1,399 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rooms |
|
|
113 |
|
|
|
112 |
|
|
|
220 |
|
|
|
224 |
|
Food and beverage |
|
|
130 |
|
|
|
131 |
|
|
|
254 |
|
|
|
257 |
|
Other departmental and support |
|
|
151 |
|
|
|
155 |
|
|
|
300 |
|
|
|
311 |
|
Other property-level |
|
|
49 |
|
|
|
50 |
|
|
|
98 |
|
|
|
103 |
|
Management and franchise fees |
|
|
36 |
|
|
|
39 |
|
|
|
69 |
|
|
|
72 |
|
Depreciation and amortization |
|
|
61 |
|
|
|
69 |
|
|
|
123 |
|
|
|
139 |
|
Corporate general and administrative |
|
|
22 |
|
|
|
15 |
|
|
|
39 |
|
|
|
31 |
|
Other |
|
|
18 |
|
|
|
18 |
|
|
|
38 |
|
|
|
35 |
|
Total expenses |
|
|
580 |
|
|
|
589 |
|
|
|
1,141 |
|
|
|
1,172 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) gain on sales of assets, net |
|
|
(12 |
) |
|
|
7 |
|
|
|
19 |
|
|
|
96 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income |
|
|
111 |
|
|
|
149 |
|
|
|
240 |
|
|
|
323 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income |
|
|
2 |
|
|
|
1 |
|
|
|
3 |
|
|
|
2 |
|
Interest expense |
|
|
(33 |
) |
|
|
(31 |
) |
|
|
(65 |
) |
|
|
(62 |
) |
Equity in earnings from investments in affiliates |
|
|
10 |
|
|
|
8 |
|
|
|
15 |
|
|
|
12 |
|
Loss on foreign currency transactions |
|
|
— |
|
|
|
(4 |
) |
|
|
— |
|
|
|
(3 |
) |
Other (loss) gain, net |
|
|
(1 |
) |
|
|
108 |
|
|
|
— |
|
|
|
108 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes |
|
|
89 |
|
|
|
231 |
|
|
|
193 |
|
|
|
380 |
|
Income tax expense |
|
|
(5 |
) |
|
|
(13 |
) |
|
|
(12 |
) |
|
|
(13 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
|
84 |
|
|
|
218 |
|
|
|
181 |
|
|
|
367 |
|
Net income attributable to noncontrolling interests |
|
|
(2 |
) |
|
|
(2 |
) |
|
|
(3 |
) |
|
|
(1 |
) |
Net income attributable to stockholders |
|
$ |
82 |
|
|
$ |
216 |
|
|
$ |
178 |
|
|
$ |
366 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share - Basic |
|
$ |
0.40 |
|
|
$ |
1.07 |
|
|
$ |
0.88 |
|
|
$ |
1.77 |
|
Earnings per share - Diluted |
|
$ |
0.40 |
|
|
$ |
1.07 |
|
|
$ |
0.88 |
|
|
$ |
1.77 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding - Basic |
|
|
201 |
|
|
|
200 |
|
|
|
201 |
|
|
|
205 |
|
Weighted average shares outstanding - Diluted |
|
|
202 |
|
|
|
201 |
|
|
|
202 |
|
|
|
206 |
|
8
NON-GAAP FINANCIAL MEASURES RECONCILIATIONS
EBITDA AND ADJUSTED EBITDA
(unaudited, in millions)
|
|
Three Months Ended |
|
|
Six Months Ended |
|
||||||||||
|
|
June 30, |
|
|
June 30, |
|
||||||||||
|
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
||||
Net income |
|
$ |
84 |
|
|
$ |
218 |
|
|
$ |
181 |
|
|
$ |
367 |
|
Depreciation and amortization expense |
|
|
61 |
|
|
|
69 |
|
|
|
123 |
|
|
|
139 |
|
Interest income |
|
|
(2 |
) |
|
|
(1 |
) |
|
|
(3 |
) |
|
|
(2 |
) |
Interest expense |
|
|
33 |
|
|
|
31 |
|
|
|
65 |
|
|
|
62 |
|
Income tax expense |
|
|
5 |
|
|
|
13 |
|
|
|
12 |
|
|
|
13 |
|
Interest expense, income tax and depreciation and amortization included in equity in earnings from investments in affiliates |
|
|
7 |
|
|
|
5 |
|
|
|
12 |
|
|
|
12 |
|
EBITDA |
|
|
188 |
|
|
|
335 |
|
|
|
390 |
|
|
|
591 |
|
Loss (gain) on sales of assets, net |
|
|
12 |
|
|
|
(7 |
) |
|
|
(19 |
) |
|
|
(96 |
) |
Gain on sale of investments in affiliates(1) |
|
|
— |
|
|
|
(108 |
) |
|
|
— |
|
|
|
(108 |
) |
Loss on foreign currency transactions |
|
|
— |
|
|
|
4 |
|
|
|
— |
|
|
|
3 |
|
Transition expense |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
2 |
|
Transaction costs |
|
|
7 |
|
|
|
— |
|
|
|
7 |
|
|
|
— |
|
Severance expense |
|
|
1 |
|
|
|
1 |
|
|
|
2 |
|
|
|
1 |
|
Share-based compensation expense |
|
|
4 |
|
|
|
4 |
|
|
|
8 |
|
|
|
8 |
|
Other items |
|
|
(5 |
) |
|
|
(1 |
) |
|
|
(5 |
) |
|
|
1 |
|
Adjusted EBITDA |
|
$ |
207 |
|
|
$ |
228 |
|
|
$ |
383 |
|
|
$ |
402 |
|
(1) |
Included in other (loss) gain, net. |
9
NON-GAAP FINANCIAL MEASURES RECONCILIATIONS
COMPARABLE HOTEL ADJUSTED EBITDA AND COMPARABLE HOTEL ADJUSTED EBITDA MARGIN
(unaudited, dollars in millions)
|
|
Three Months Ended |
|
|
Six Months Ended |
|
||||||||||
|
|
June 30, |
|
|
June 30, |
|
||||||||||
|
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
||||
Adjusted EBITDA |
|
$ |
207 |
|
|
$ |
228 |
|
|
$ |
383 |
|
|
$ |
402 |
|
Less: Adjusted EBITDA from investments in affiliates |
|
|
12 |
|
|
|
14 |
|
|
|
22 |
|
|
|
26 |
|
Less: All other(1) |
|
|
(14 |
) |
|
|
(14 |
) |
|
|
(29 |
) |
|
|
(26 |
) |
Hotel Adjusted EBITDA |
|
|
209 |
|
|
|
228 |
|
|
|
390 |
|
|
|
402 |
|
Less: Adjusted EBITDA from hotels disposed of |
|
|
5 |
|
|
|
11 |
|
|
|
11 |
|
|
|
24 |
|
Less: Adjusted EBITDA from non-comparable hotels |
|
|
(4 |
) |
|
|
5 |
|
|
|
(5 |
) |
|
|
4 |
|
Comparable Hotel Adjusted EBITDA |
|
$ |
208 |
|
|
$ |
212 |
|
|
$ |
384 |
|
|
$ |
374 |
|
_______________________________________________________ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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. |
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Six Months Ended |
|
||||||||||
|
|
June 30, |
|
|
June 30, |
|
||||||||||
|
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
||||
Total Revenues |
|
$ |
703 |
|
|
$ |
731 |
|
|
$ |
1,362 |
|
|
$ |
1,399 |
|
Less: Other revenue |
|
|
19 |
|
|
|
17 |
|
|
|
37 |
|
|
|
34 |
|
Less: Revenues from hotels disposed of |
|
|
14 |
|
|
|
48 |
|
|
|
37 |
|
|
|
109 |
|
Less: Revenues from non-comparable hotels(1) |
|
|
5 |
|
|
|
8 |
|
|
|
7 |
|
|
|
11 |
|
Comparable Hotel Revenues |
|
$ |
665 |
|
|
$ |
658 |
|
|
$ |
1,281 |
|
|
$ |
1,245 |
|
_______________________________________________________ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Includes revenues from Park's non-comparable hotels and rental revenues from office space and antenna leases located at its hotels. |
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Six Months Ended |
|
||||||||||
|
|
June 30, |
|
|
June 30, |
|
||||||||||
|
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
||||
Comparable Hotel Revenues |
|
$ |
665 |
|
|
$ |
658 |
|
|
$ |
1,281 |
|
|
$ |
1,245 |
|
Comparable Hotel Adjusted EBITDA |
|
$ |
208 |
|
|
$ |
212 |
|
|
$ |
384 |
|
|
$ |
374 |
|
Comparable Hotel Adjusted EBITDA margin |
|
|
31.3 |
% |
|
|
32.2 |
% |
|
|
30.0 |
% |
|
|
30.1 |
% |
10
NON-GAAP FINANCIAL MEASURES RECONCILIATIONS
NAREIT FFO AND ADJUSTED FFO
(unaudited, in millions, except per share data)
|
|
Three Months Ended |
|
|
Six Months Ended |
|
||||||||||
|
|
June 30, |
|
|
June 30, |
|
||||||||||
|
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
||||
Net income attributable to stockholders |
|
$ |
82 |
|
|
$ |
216 |
|
|
$ |
178 |
|
|
$ |
366 |
|
Depreciation and amortization expense |
|
|
61 |
|
|
|
69 |
|
|
|
123 |
|
|
|
139 |
|
Depreciation and amortization expense attributable to noncontrolling interests |
|
|
(1 |
) |
|
|
(1 |
) |
|
|
(2 |
) |
|
|
(2 |
) |
Loss (gain) on sales of assets, net |
|
|
12 |
|
|
|
(7 |
) |
|
|
(19 |
) |
|
|
(96 |
) |
Gain on sale of investments in affiliates(1) |
|
|
— |
|
|
|
(108 |
) |
|
|
— |
|
|
|
(108 |
) |
Equity investment adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in earnings from investments in affiliates |
|
|
(10 |
) |
|
|
(8 |
) |
|
|
(15 |
) |
|
|
(12 |
) |
Pro rata FFO of investments in affiliates |
|
|
12 |
|
|
|
10 |
|
|
|
21 |
|
|
|
20 |
|
Nareit FFO attributable to stockholders |
|
|
156 |
|
|
|
171 |
|
|
|
286 |
|
|
|
307 |
|
Loss on foreign currency transactions |
|
|
— |
|
|
|
4 |
|
|
|
— |
|
|
|
3 |
|
Transition expense |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
2 |
|
Transaction costs |
|
|
7 |
|
|
|
— |
|
|
|
7 |
|
|
|
— |
|
Severance expense |
|
|
1 |
|
|
|
1 |
|
|
|
2 |
|
|
|
1 |
|
Share-based compensation expense |
|
|
4 |
|
|
|
4 |
|
|
|
8 |
|
|
|
8 |
|
Other items |
|
|
(4 |
) |
|
|
7 |
|
|
|
(3 |
) |
|
|
3 |
|
Adjusted FFO attributable to stockholders |
|
$ |
164 |
|
|
$ |
187 |
|
|
$ |
300 |
|
|
$ |
324 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nareit FFO per share - Diluted(2) |
|
$ |
0.77 |
|
|
$ |
0.85 |
|
|
$ |
1.42 |
|
|
$ |
1.49 |
|
Adjusted FFO per share - Diluted(2) |
|
$ |
0.81 |
|
|
$ |
0.93 |
|
|
$ |
1.49 |
|
|
$ |
1.57 |
|
Weighted average shares outstanding - Diluted |
|
|
202 |
|
|
|
201 |
|
|
|
202 |
|
|
|
206 |
|
(1) |
Included in other (loss) gain, net. |
(2) |
Per share amounts are calculated based on unrounded numbers and are calculated independently for each period presented. |
11
NON-GAAP FINANCIAL MEASURES RECONCILIATIONS
2019 OUTLOOK – EBITDA AND ADJUSTED EBITDA
(unaudited, in millions)
|
|
Year Ending |
|
|||||
|
|
December 31, 2019 |
|
|||||
|
|
Low Case |
|
|
High Case |
|
||
Net income |
|
$ |
329 |
|
|
$ |
353 |
|
Depreciation and amortization expense |
|
|
239 |
|
|
|
239 |
|
Interest income |
|
|
(6 |
) |
|
|
(6 |
) |
Interest expense |
|
|
128 |
|
|
|
128 |
|
Income tax expense |
|
|
14 |
|
|
|
15 |
|
Interest expense, income tax and depreciation and amortization included in equity in earnings from investments in affiliates |
|
|
23 |
|
|
|
23 |
|
EBITDA |
|
|
727 |
|
|
|
752 |
|
Gain on sale of assets, net |
|
|
(19 |
) |
|
|
(19 |
) |
Transaction costs |
|
|
7 |
|
|
|
7 |
|
Severance expense |
|
|
2 |
|
|
|
2 |
|
Share-based compensation expense |
|
|
15 |
|
|
|
15 |
|
Other items |
|
|
3 |
|
|
|
3 |
|
Adjusted EBITDA |
|
$ |
735 |
|
|
$ |
760 |
|
12
NON-GAAP FINANCIAL MEASURES RECONCILIATIONS
2019 OUTLOOK – NAREIT FFO ATTRIBUTABLE TO STOCKHOLDERS AND
ADJUSTED FFO ATTRIBUTABLE TO STOCKHOLDERS
(unaudited, in millions except per share amounts)
|
|
Year Ending |
|
|||||
|
|
December 31, 2019 |
|
|||||
|
|
Low Case |
|
|
High Case |
|
||
Net income attributable to stockholders |
|
$ |
322 |
|
|
$ |
346 |
|
Depreciation and amortization expense |
|
|
239 |
|
|
|
239 |
|
Depreciation and amortization expense attributable to noncontrolling interests |
|
|
(4 |
) |
|
|
(4 |
) |
Gain on sale of assets, net |
|
|
(19 |
) |
|
|
(19 |
) |
Equity investment adjustments: |
|
|
|
|
|
|
|
|
Equity in earnings from investments in affiliates |
|
|
(16 |
) |
|
|
(17 |
) |
Pro rata FFO of equity investments |
|
|
28 |
|
|
|
29 |
|
Nareit FFO attributable to stockholders |
|
|
550 |
|
|
|
574 |
|
Transaction costs |
|
|
7 |
|
|
|
7 |
|
Severance expense |
|
|
2 |
|
|
|
2 |
|
Share-based compensation expense |
|
|
15 |
|
|
|
15 |
|
Other items |
|
|
3 |
|
|
|
3 |
|
Adjusted FFO attributable to stockholders |
|
$ |
577 |
|
|
$ |
601 |
|
Adjusted FFO per share - Diluted(1) |
|
$ |
2.86 |
|
|
$ |
2.98 |
|
Weighted average diluted shares outstanding |
|
|
201.9 |
|
|
|
201.9 |
|
(1) |
Per share amounts are calculated based on unrounded numbers. |
13
DEFINITIONS
EBITDA, Adjusted EBITDA, Hotel Adjusted EBITDA and Hotel Adjusted EBITDA Margin
Earnings before interest expense, taxes and depreciation and amortization (“EBITDA”), presented herein, reflects net income excluding depreciation and amortization, interest income, interest expense, income taxes and interest expense, income tax and depreciation and amortization included in equity in earnings from investments in affiliates.
Adjusted EBITDA, presented herein, is calculated as EBITDA, as previously defined, further adjusted to exclude:
|
• |
Gains or losses on sales of assets for both consolidated and unconsolidated investments; |
|
• |
Gains or losses on foreign currency transactions; |
|
• |
Transition expense related to the Company’s establishment as an independent, publicly traded company; |
|
• |
Transaction costs associated with hotel acquisitions or dispositions expensed during the period; |
|
• |
Severance expense; |
|
• |
Share-based compensation expense; |
|
• |
Casualty gains or losses and impairment losses; and |
|
• |
Other items that management believes are not representative of the Company’s current or future operating performance. |
Hotel Adjusted EBITDA measures hotel-level results before debt service, depreciation and corporate expenses of the Company’s consolidated hotels, including both comparable and non-comparable hotels but excluding hotels owned by unconsolidated affiliates, and is a key measure of the Company’s profitability. The Company presents Hotel Adjusted EBITDA to help the Company and its investors evaluate the ongoing operating performance of the Company’s consolidated hotels.
Hotel Adjusted EBITDA margin is calculated as Hotel Adjusted EBITDA divided by total hotel revenue.
EBITDA, Adjusted EBITDA, Hotel Adjusted EBITDA and Hotel Adjusted EBITDA margin are not recognized terms under United States (“U.S.”) GAAP and should not be considered as alternatives to net income (loss) or other measures of financial performance or liquidity derived in accordance with U.S. GAAP. In addition, the Company’s definitions of EBITDA, Adjusted EBITDA, Hotel Adjusted EBITDA and Hotel Adjusted EBITDA margin may not be comparable to similarly titled measures of other companies.
The Company believes that EBITDA, Adjusted EBITDA, Hotel Adjusted EBITDA and Hotel Adjusted EBITDA margin provide useful information to investors about the Company and its financial condition and results of operations for the following reasons: (i) EBITDA, Adjusted EBITDA, Hotel Adjusted EBITDA and Hotel Adjusted EBITDA margin are among the measures used by the Company’s management team to make day-to-day operating decisions and evaluate its operating performance between periods and between REITs by removing the effect of its capital structure (primarily interest expense) and asset base (primarily depreciation and amortization) from its operating results; and (ii) EBITDA, Adjusted EBITDA, Hotel Adjusted EBITDA and Hotel Adjusted EBITDA margin are frequently used by securities analysts, investors and other interested parties as a common performance measure to compare results or estimate valuations across companies in the industry.
EBITDA, Adjusted EBITDA, Hotel Adjusted EBITDA and Hotel Adjusted EBITDA margin have limitations as analytical tools and should not be considered either in isolation or as a substitute for net income (loss) or other methods of analyzing the Company’s operating performance and results as reported under U.S. GAAP.
Nareit FFO attributable to stockholders, Adjusted FFO attributable to stockholders Nareit FFO per share - diluted and Adjusted FFO per share - diluted
Nareit FFO attributable to stockholders and Nareit FFO per diluted share (defined as set forth below) are presented herein as non-GAAP measures of the Company’s performance. The Company calculates funds from operations (“FFO”) attributable to stockholders for a given operating period in accordance with standards established by the National Association of Real Estate Investment Trusts (“Nareit”), as net income or loss attributable to stockholders (calculated in accordance with U.S. GAAP), excluding depreciation and amortization, gains or losses on sales of assets, impairment, and the cumulative effect of changes in accounting principles, plus adjustments for unconsolidated joint ventures. Adjustments for unconsolidated joint ventures are calculated to reflect the Company’s pro rata share of the FFO of those entities on the same basis. As noted by Nareit in its December 2018 “Nareit Funds from Operations White Paper – 2018 Restatement,” since real estate values historically have risen or fallen with market conditions, many industry investors have considered presentation of operating results for real estate
14
companies that use historical cost accounting to be insufficient by themselves. For these reasons, Nareit adopted the FFO metric in order to promote an industry-wide measure of REIT operating performance. The Company believes Nareit FFO provides useful information to investors regarding its operating performance and can facilitate comparisons of operating performance between periods and between REITs. The Company’s presentation may not be comparable to FFO reported by other REITs that do not define the terms in accordance with the current Nareit definition, or that interpret the current Nareit definition differently. The Company calculates Nareit FFO per diluted share as Nareit FFO divided by the number of fully diluted shares outstanding during a given operating period.
The Company also presents Adjusted FFO attributable to stockholders and Adjusted FFO per diluted share when evaluating its performance because management believes that the exclusion of certain additional items described below provides useful supplemental information to investors regarding the Company’s ongoing operating performance. Management historically has made the adjustments detailed below in evaluating its performance and in its annual budget process. Management believes that the presentation of Adjusted FFO provides useful supplemental information that is beneficial to an investor’s complete understanding of operating performance. The Company adjusts Nareit FFO attributable to stockholders for the following items, which may occur in any period, and refers to this measure as Adjusted FFO attributable to stockholders:
|
• |
Gains or losses on foreign currency transactions; |
|
• |
Transition expense related to the Company’s establishment as an independent, publicly traded company; |
|
• |
Transaction 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. |
Occupancy
Occupancy represents the total number of room nights sold divided by the total number of room nights available at a hotel or group of hotels. Occupancy measures the utilization of the Company’s hotels’ available capacity. Management uses occupancy to gauge demand at a specific hotel or group of hotels in a given period. Occupancy levels also help management determine achievable Average Daily Rate (“ADR”) levels as demand for rooms increases or decreases.
Average Daily Rate
ADR represents rooms revenue divided by total number of room nights sold in a given period. ADR measures average room price attained by a hotel and ADR trends provide useful information concerning the pricing environment and the nature of the customer base of a hotel or group of hotels. ADR is a commonly used performance measure in the hotel industry, and management uses ADR to assess pricing levels that the Company is able to generate by type of customer, as changes in rates have a more pronounced effect on overall revenues and incremental profitability than changes in occupancy, as described above.
Revenue per Available Room
Revenue per Available Room (“RevPAR”) represents rooms revenue divided by the total number of room nights available to guests for a given period. Management considers RevPAR to be a meaningful indicator of the Company’s performance as it provides a metric correlated to two primary and key factors of operations at a hotel or group of hotels: occupancy and ADR. RevPAR is also a useful indicator in measuring performance over comparable periods for comparable hotels.
References to RevPAR and ADR are presented on a currency neutral basis (prior periods are reflected using current period exchange rates), unless otherwise noted.
Comparable Hotels
The Company presents certain data for its consolidated hotels on a comparable hotel basis as supplemental information for investors. The Company defines its comparable hotels as those that: (i) were active and operating in its portfolio since January 1st of the previous year; and (ii) have not sustained substantial property damage, business interruption, undergone large-scale capital projects or for which comparable results are not available. The Company presents comparable hotel results to help the Company and its investors evaluate the ongoing operating performance of its comparable hotels. Of the 40 hotels that are consolidated as of June 30, 2019, 39 hotels have been classified as comparable hotels. Due to the continued effects of business interruption from Hurricane Maria at the Caribe Hilton in Puerto Rico, the results from this property were excluded from comparable hotels in 2019. The Company’s comparable hotels also exclude the 12 consolidated hotels that were sold in January and February 2018, one consolidated hotel that was returned to the lessor after the expiration of the ground lease in December 2018 and five consolidated hotels that were sold in 2019.
15
Waldorf Astoria Orlando Parc 55 San Francisco, a Hilton Hotel Hilton Hawaiian Village Waikiki Beach Resort June 30, 2019 Second Quarter 2019 Supplemental Data Exhibit 99.2 Exhibit 99.2 Second Quarter 2019Supplemental DataJune 30, 2019Waldorf Astoria OrlandoParc 55 San Francisco, a Hilton HotelHilton Hawaiian Village Waikiki Beach Resort
About Park and Safe Harbor Disclosure About Park Hotels & Resorts Inc. Park (NYSE: PK) is the second largest publicly traded lodging real estate company with a diverse portfolio of market-leading hotels and resorts with significant underlying real estate value. Park’s portfolio consists of 48 premium-branded hotels and resorts with over 29,000 rooms, primarily located in prime U.S. markets with high barriers to entry. Visit www.pkhotelsandresorts.com for more information. Forward-Looking Statements This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include, but are not limited to, statements related to Park’s current expectations regarding the performance of its business, financial results, liquidity and capital resources, the effects of competition and the effects of future legislation or regulations, the expected completion of anticipated acquisitions and dispositions, the declaration and payment of future dividends, the expected timetable and likelihood for completing the proposed transaction involving Park and Chesapeake, statements about the benefits of the proposed transaction involving Park and Chesapeake and other non-historical statements. Forward-looking statements include all statements that are not historical facts, and in some cases, can be identified by the use of forward-looking terminology such as the words “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “could,” “seeks,” “projects,” “predicts,” “intends,” “plans,” “estimates,” “anticipates” or the negative version of these words or other comparable words. Forward-looking statements involve risks, uncertainties and assumptions. Actual results may differ materially from those expressed in these forward-looking statements for various reasons, including risks associated with Park’s ability to consummate the proposed transaction with Chesapeake and the timing of the closing of the proposed transaction; and the availability of financing; as well as other risks and uncertainties detailed from time to time in Park’s filings with the SEC. You should not put undue reliance on any forward-looking statements and Park urges investors to carefully review the disclosures Park makes concerning risk and uncertainties in Item 1A: “Risk Factors” in Park’s Annual Report on Form 10-K for the year ended December 31, 2018, as such factors may be updated from time to time in Park’s filings with the SEC, which are accessible on the SEC’s website at www.sec.gov. Except as required by law, Park undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise. Supplemental Financial Information Park refers to certain non-generally accepted accounting principles (“GAAP”) financial measures in this presentation, including Funds from Operations (“FFO”) calculated in accordance with the guidelines of the National Association of Real Estate Investment Trusts (“Nareit”), Adjusted FFO, FFO per share, Adjusted FFO per share, Earnings before interest expense, taxes and depreciation and amortization (“EBITDA”), Adjusted EBITDA, Hotel Adjusted EBITDA, Hotel Adjusted EBITDA margin, Net debt and Net debt to Pro-forma Adjusted EBITDA ratio. These non-GAAP financial measures should be considered along with, but not as alternatives to, net income (loss) as a measure of its operating performance. Please see the schedules included in this presentation including the “Definitions” section for additional information and reconciliations of such non-GAAP financial measures. About Park and Safe Harbor DisclosureAbout Park Hotels & Resorts Inc.Park (NYSE: PK) is the second largest publicly traded lodging real estate company with a diverse portfolio of market-leading hotels and resorts with significant underlying real estate value. Park’s portfolio consists of 48 premium-branded hotels and resorts with over 29,000 rooms, primarily located in prime U.S. markets with high barriers to entry. Visit www.pkhotelsandresorts.com for more information.Forward-Looking Statements This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include, but are not limited to, statements related to Park’s current expectations regarding the performance of its business, financial results, liquidity and capital resources, the effects of competition and the effects of future legislation or regulations, the expected completion of anticipated acquisitions and dispositions, the declaration and payment of future dividends, the expected timetable and likelihood for completing the proposed transaction involving Park and Chesapeake, statements about the benefits of the proposed transaction involving Park and Chesapeake and other non-historical statements. Forward-looking statements include all statements that are not historical facts, and in some cases, can be identified by the use of forward-looking terminology such as the words “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “could,” “seeks,” “projects,” “predicts,” “intends,” “plans,” “estimates,” “anticipates” or the negative version of these words or other comparable words.Forward-looking statements involve risks, uncertainties and assumptions. Actual results may differ materially from those expressed in these forward-looking statements for various reasons, including risks associated with Park’s ability to consummate the proposed transaction with Chesapeake and the timing of the closing of the proposed transaction; and the availability of financing; as well as other risks and uncertainties detailed from time to time in Park’s filings with the SEC. You should not put undue reliance on any forward-looking statements and Park urges investors to carefully review the disclosures Park makes concerning risk and uncertainties in Item 1A: “Risk Factors” in Park’s Annual Report on Form 10-K for the year ended December 31, 2018, as such factors may be updated from time to time in Park’s filings with the SEC, which are accessible on the SEC’s website at www.sec.gov. Except as required by law, Park undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.Supplemental Financial Information Park refers to certain non-generally accepted accounting principles (“GAAP”) financial measures in this presentation, including Funds from Operations (“FFO”) calculated in accordance with the guidelines of the National Association of Real Estate Investment Trusts (“Nareit”), Adjusted FFO, FFO per share, Adjusted FFO per share, Earnings before interest expense, taxes and depreciation and amortization (“EBITDA”), Adjusted EBITDA, Hotel Adjusted EBITDA, Hotel Adjusted EBITDA margin, Net debt and Net debt to Pro-forma Adjusted EBITDA ratio. These non-GAAP financial measures should be considered along with, but not as alternatives to, net income (loss) as a measure of its operating performance. Please see the schedules included in this presentation including the “Definitions” section for additional information and reconciliations of such non-GAAP financial measures.
Financial Statements Supplementary Financial Information Guidance Portfolio and Operating Metrics Acquisitions and Dispositions Debt Summary Definitions Table of Contents 4 7 19 23 34 36 38 New York Hilton Midtown Hilton Waikoloa Village Waldorf Astoria Orlando Table of Contents 1.Financial Statements 4 2.Supplementary Financial Information 7 3.Guidance 19 4.Portfolio and Operating Metrics 23 5.Acquisitions and Dispositions 34 6.Debt Summary 36 7.Definitions 38 Waldorf Astoria Orlando Hilton Waikoloa Village New York Hilton Midtown
Financial Statements Casa Marina, a Waldorf Astoria Resort Hilton Chicago Parc 55 San Francisco – a Hilton Hotel Financial Statements Casa Marina, a Waldorf Astoria Resort Hilton Chicago Parc 55 San Francisco – a Hilton Hotel
Financial Statements Condensed Consolidated Balance Sheets (unaudited in millions, except share and per share data) March 31, 2019 December 31, 2018 ASSETS Property and equipment, net $7,944 $7,975 Investments in affiliates 49 50 Goodwill 607 607 Intangibles, net 2 27 Cash and cash equivalents 276 410 Restricted cash 14 15 Accounts receivable, net 172 153 Prepaid expenses 76 82 Other assets 42 44 Operating lease right-of-use asset 212 — TOTAL ASSETS $9,394 $9,363 LIABILITIES AND EQUITY Liabilities Debt $2,949 $2,948 Accounts payable and accrued expenses 162 183 Due to hotel manager 110 137 Due to Hilton Grand Vacations 135 135 Deferred income tax liabilities 41 42 Other liabilities 213 332 Operating lease liability 204 — Total liabilities $3,814 $3,777 Stockholders' Equity "Common stock, par value $0.01 per share, 6,000,000,000 shares authorized, 201,715,453 shares issued and 201,539,398 shares outstanding as of March 31, 2019 and 201,290,458 shares issued and 201,198,381 shares outstanding as of December 31, 2018" 2 2 Additional paid-in capital 3,588 3,589 Retained earnings 2,044 2,047 Accumulated other comprehensive loss (6) (6) Total stockholders' equity 5,628 5,632 Noncontrolling interests (48) (46) Total equity 5,580 5,586 TOTAL LIABILITIES AND EQUITY $9,394 $9,363 Condensed Consolidated Balance Sheets Financial Statements Financial Statements Condensed Consolidated Balance Sheets (unaudited in millions, except share and per share data) June 30,2019 December31,2018 ASSETS Property and equipment, net $7,764 $7,975 Investments in affiliates 52 50 Goodwill 607 607Intangibles, net 2 27 Cash and cash equivalents 310 410 Restricted cash 170 15 Accounts receivable, net 186 153 Prepaid expenses 88 82 Other assets 45 44 Operating lease right-of-use asset 207—TOTAL ASSETS $9,431 $9,363 LIABILITIES AND EQUITY Liabilities Debt $2,949 $2,948 Accounts payable and accrued expenses 208 183 Due to hotel manager 117 137 Due to Hilton Grand Vacations 135 135 Deferred income tax liabilities 42 42 Other liabilities 204 332 Operating lease liability 200—Total liabilities $3,855 $3,777 Stockholders' Equity "Common stock, par value $0.01 per share, 6,000,000,000 shares authorized,201,799,199 shares issued and 201,621,099 shares outstanding as of June 30,2019 and 201,290,458 shares issued and 201,198,381 shares outstanding as of December 31, 2018" 2 2 Additional paid-in capital 3,591 3,589 Retained earnings 2,034 2,047 Accumulated other comprehensive loss (5)(6) Total stockholders' equity 5,622 5,632 Noncontrolling interests (46)(46)Total equity 5,576 5,586 TOTAL LIABILITIES AND EQUITY $9,431 $9,363
Financial Statements (continued) Condensed Consolidated Statements of Operations Financial Statements (continued) Condensed Consolidated Statements of Operations Three Months Ended Six Months Ended(unaudited in millions, except per share data)June 30,June 30,2019 2018 2019 2018 Revenues Rooms $435 $451 $840 $869 Food and beverage 195 205 378 388 Ancillary hotel 54 58 107 108 Other 19 17 37 34 Total revenues 703 731 1,362 1,399 Operating expenses Rooms 113 112 220 224 Food and beverage 130 131 254 257 Other departmental and support 151 155 300 311 Other property-level 49 50 98 103 Management and franchise fees 36 39 69 72 Depreciation and amortization 61 69 123 139 Corporate general and administrative 22 15 39 31 Other 18 18 38 35 Total expenses 580 589 1,141 1,172 (Loss) gain on sales of assets, net(12)7 19 96 Operating income 111 149 240 323 Interest income 2 1 3 2 Interest expense (33) (31)(65) (62) Equity in earnings from investments in affiliates 10 8 15 12 Loss on foreign currency transactions — (4) — (3) Other (loss) gain, net (1) 108 — 108 Income before income taxes 89 231 193 380 Income tax expense (5) (13) (12) (13) Net income 84 218 181 367 Net income attributable to noncontrolling interests (2) (2) (3) (1) Net income attributable to stockholders $82 $216 $178 $366 Earnings per share: Earnings per share - Basic $0.40 $1.07 $0.88 $1.77 Earnings per share - Diluted $0.40 $1.07 $0.88 $1.77 Weighted average shares outstanding - Basic 201 200 201 205 Weighted average shares outstanding - Diluted 202 201 202 206
Supplementary Financial Information Juniper Hotel Cupertino, Curio Collection Hilton Boston Logan Airport The Reach, a Waldorf Astoria Resort Supplementary Financial Information Juniper Hotel Cupertino, Curio Collection Hilton Boston Logan Airport The Reach, a Waldorf Astoria Resort
Supplementary Financial Information EBITDA and Adjusted EBITDA (1)Included in other (loss) gain, net. Three Months Ended (unaudited, in millions) March 31, 2019 2018 Net income $97 $149 Depreciation and amortization expense 62 70 Interest income (1) (1) Interest expense 32 31 Income tax expense 7 — "Interest expense, income tax and depreciation and amortization included in equity in earnings from investments in affiliates" 5 7 EBITDA 202 256 Gain on sales of assets, net (31) (89) Gain on foreign currency transactions — (1) Transition expense — 2 Severance expense 1 — Share-based compensation expense 4 4 Other items — 2 Adjusted EBITDA $176 $174 EBITDA and Adjusted EBITDA Supplementary Financial Information Supplementary Financial Information EBITDA and Adjusted EBITDA Three Months Ended Six Months Ended (unaudited, in millions) June 30, June 30, 2019 2018 2019 2018 Net income $84 $218 $181 $367 Depreciation and amortization expense 61 69 123 139 Interest income (2) (1) (3) (2) Interest expense 33 31 65 62 Income tax expense 5 13 12 13 "Interest expense,income tax and depreciation and amortization included in equity in earnings from investments in affiliates"7 5 12 12 EBITDA 188 335 390 591 Loss (gain) on sales of assets, net 12(7)(19)(96) Gain on sale of investments in affiliates(1)—(108)—(108)Loss on foreign currency transactions — 4 — 3 Transition expense— — — 2 Transaction costs 7 — 7 — Severance expense 1 1 2 1 Share-based compensation expense 4 4 8 8 Other items (5) (1) (5) 1 Adjusted EBITDA $207 $228 $383 $402
Supplementary Financial Information (continued) Comparable Hotel Adjusted EBITDA and Comparable Hotel Adjusted EBITDA Margin (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 statement of operations. (1)Includes revenues from Park’s non-comparable hotels and rental revenues from office space and antenna rent leases located at its hotels. (1)Percentages are calculated based on unrounded numbers. Supplementary Financial Information (continued) Comparable Hotel Adjusted EBITDA and Comparable Hotel Adjusted EBITDA Margin (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 statement of operations. (1) Includes revenues from Park’s non-comparable hotels and rental revenues from office space and antenna rent leases located at its hotels. (1) Percentages are calculated based on unrounded numbers. Three Months Ended Six Months Ended (unaudited, dollars in millions) June 30, June 30, 2019 2018 2019 2018 Adjusted EBITDA $207 $228 $383 $402 Less: Adjusted EBITDA from investments in affiliates 12 14 22 26 Less: All other(1) (14) (14) (29) (26) Hotel Adjusted EBITDA 209 228 390 402 Less: Adjusted EBITDA from hotels disposed of 5 11 11 24 Less: Adjusted EBITDA from non-comparable hotels (4) 5 (5) 4 Comparable Hotel Adjusted EBITDA $208 $212 $384 $374 Three Months Ended Six Months Ended June 30, June 30, 2019 2018 20192018 Total Revenues $703 $731 $1,362 $1,399 Less: Other revenue19 17 37 34 Less: Revenues from hotels disposed of 14 48 37 109 Less: Revenues from non comparable hotels(1) 5 8 7 11 Comparable Hotel Revenues$665 $658 $1,281 $1,245 Three Months Ended Six Months Ended June 30, June 30, 2019 2018 Change(1) 2019 2018 Change(1) Comparable Hotel Revenues $665 $658 1.1% $1,281 $1,245 2.9% Comparable Hotel Adjusted EBITDA $208 $212 (1.8)% $384 $374 2.9% Comparable Hotel Adjusted EBITDA margin 31.3% 32.2% (90) bps 30.0%30.1% (10) bps
Nareit FFO and Adjusted FFO (1)Included in other (loss) gain, net (2)Per share amounts are calculated based on unrounded numbers and are calculated independently for each period presented. Supplementary Financial Information (continued) Supplementary Financial Information (continued) Nareit FFO and Adjusted FFO (1) Included in other (loss) gain, net (2) Per share amounts are calculated based on unrounded numbers and are calculated independently for each period presented.Three Months Ended Six Months Ended (unaudited, in millions, except per share data) June 30, June 30, 2019 20182019 2018 Net income attributable to stockholders $82 $216 $178 $366 Depreciation and amortization expense 61 69 123 139 "Depreciation and amortization expense attributable to noncontrolling interests" (1) (1) (2) (2) Loss (gain) on sales of assets, net 12 (7) (19)(96) Gain on sale of investments in affiliates(1) — (108) — (108) Equity investment adjustments: Equity in earnings from investments in affiliates (10) (8) (15) (12) Pro rata FFO of investments in affiliates 12 10 21 20 Nareit FFO attributable to stockholders 156 171 286 307 Loss on foreign currency transactions— 4 — 3 Transition expense — — — 2 Transaction costs 7 — 7 — Severance expense 1 1 2 1 Share-based compensation expense 4 4 8 8 Other items (4) 7 (3) 3 Adjusted FFO attributable to stockholders$164 $187 $300 $324 Nareit FFO per share - Diluted(2) $0.77 $0.85 $1.42 $1.49 Adjusted FFO per share - Diluted(2) $0.81 $0.93 $1.49 $1.57 Weighted average shares outstanding - Diluted 202 201 202 206
Historical Comparable Hotel Metrics Supplementary Financial Information (continued) The financial information below is for the 39 comparable hotels owned as of June 30, 2019. (1)Trailing Twelve Months (“TTM”) Supplementary Financial Information (continued) Historical Comparable Hotel Metrics (1) Trailing Twelve Months (“TTM”) TTM(1) Full Year (unaudited) September 30, December 31, March 31, June 30, June 30, December 31, 2018 2018 2019 2019 2019 2018 Comparable RevPAR $180.17 $175.85 $179.03 $191.72 $181.68 $179.40 Comparable Occupancy 83.8% 79.7% 79.5% 86.6% 82.4% 82.1% Comparable AD $215.13$220.50$225.16$221.40$220.47 $218.45Comparable Hotel Revenues (in millions) $583 $612 $616 $665 $2,476 $2,440 Comparable Hotel Adjusted EBITDA (in millions) $163$174 $176 $208 $721 $711 Comparable Hotel Adjusted EBITDA margin 28.0% 28.4% 28.6% 31.3% 29.1% 29.1% TTM(1) Full Year (unaudited)September 30, December 31, March 31, June 30, June 30, December 31, 2017 2017 2018 2018 2018 2017 Comparable RevPAR $176.74 $170.62 $171.32 $190.22 $173.26 $174.83 Comparable Occupancy 83.8% 79.5% 79.1% 85.9% 82.0% 81.9% Comparable ADR$210.82$214.68$216.62 $221.47$211.38$213.39Comparable Hotel Revenues (in millions) $583 $592 $586 $658 $2,419 $2,383 Comparable Hotel Adjusted EBITDA (in millions) $165 $168 $162 $212 $707 $685 Comparable Hotel Adjusted EBITDA margin 28.3% 28.3% 27.6% 32.2% 29.2% 28.8%
Historical Comparable Hotel Adjusted EBITDA – 2019 TTM Supplementary Financial Information (continued) Three Months Ended TTM Full Year(unaudited, dollars in millions)September 30,December 31, March 31, June 30,June 30,December 31, 201720172018201820182017Net income $105 $61 $149 $218 $533 $2,631 Depreciation & Amortization 74 71 70 69 284 288 Interest income (1) — (1) (1) (3) (2)Interest expense 32 31 31 31 125 124 Income tax benefit (44) (2) — 13 (33) (2,346)"Interest expense, income tax and depreciation and amortization included in equity in earnings from investments in affiliates" 6 6 7 5 24 24 EBITDA 172 167 256 335 930 719 Gain on sales of assets, net — (1) (89) (7) (97) (1)Gain on sale of investments in affiliates(1) — — — (108) (108) — Gain on foreign currency transactions 1 — (1) 4 4 4 Transition expenses 3 4 2 — 9 9 Transaction expenses — 2 — — 2 2 Severance costs — 1 — 1 2 1 Share-based compensation expense 3 4 4 4 15 14 Casualty and impairment loss 2 24 — — 26 26 Other items 2 (21) 2 (1) (18) (17)Adjusted EBITDA 183 180 174 228 765 757 Less: EBITDA from hotels disposed of 11 9 2 — 22 33 Less: Adjusted EBITDA from investments in affiliates 11 10 12 14 47 45 Less: All other(2) (10) (12) (12) (14) (48) (46)Hotel Adjusted EBITDA 171 173 172 228 744 725 Less: Adjusted EBITDA from non-comparable hotels 9 7 13 13 42 44 Comparable Hotel Adjusted EBITDA $162 $166 $159 $215 $702 $681 The financial information below is for the 39 comparable hotels owned as of June 30, 2019. (1)Included in other (loss) gain, net in the condensed consolidated statement of operations. (2)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 condensedconsolidated statement of operations. Supplementary Financial Information (continued) Historical Comparable Hotel Adjusted EBITDA – 2019 TTM The financial information below is for the 39 comparable hotels owned as of June 30, 2019. (1) Included in other (loss) gain, net in the condensed consolidated statement of operations.(2) 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 statement of operations.TTM Full Year (unaudited, dollars in millions) September 30,December 31, March 31, June 30,June 30, December 31, 2018 2018 2019 2019 2019 2018 Net income $55 $55 $97 $84 $291 $477 Depreciation and amortization expense 69 69 62 61 261 277 Interest income (2) (2) (1) (2) (7)(6) Interest expense 32 33 32 33 130 127 Income tax expense — 10 7 5 22 23 "Interest expense, income tax and depreciation and amortization included in equity in earnings from investments in affiliates" 8 6 5 7 26 26 EBITDA 162 171 202 188 723 924 (Gain) loss on sales of assets, net(2) 2 (31) 12 (19) (96) Loss on sale of investments in affiliates(1) 1 — — — 1 (107) Loss (gain) on foreign currency transactions 1 (1) — — — 3 Transition expense 1 — — — 1 3 Transaction costs — 2 — 7 9 2 Severance expense 1 — 1 1 3 2 Share-based compensation expense 4 4 4 4 16 16Casualty gain and impairment loss, net (1) — — — (1) (1) Other items 1 6 — (5) 2 8 Adjusted EBITDA 168 184 176 207 735 754 Less: Adjusted EBITDA from investments in affiliates 10 9 10 12 41 45 Less: All other(2) (13) (13) (15) (14) (55) (52) Hotel Adjusted EBITDA 171 188 181 209 749 761 Less: Adjusted EBITDA from hotels disposed of 8 8 6 5 27 40 Less: Adjusted EBITDA from non-comparable hotels — 6 (1) (4) 1 10 Comparable Hotel Adjusted EBITDA $163 $174 $176 $208 $721 $711
Historical Comparable Hotel Revenues – 2019 TTM Supplementary Financial Information (continued) The financial information below is for the 39 comparable hotels owned as of June 30, 2019. (1) Includes revenues from Park's non-comparable hotels and rental revenues from office space and antenna rent leases located at its hotels. Supplementary Financial Information (continued) Historical Comparable Hotel Revenues – 2019 TTM The financial information below is for the 39 comparable hotels owned as of June 30, 2019.(1) Includes revenues from Park's non-comparable hotels and rental revenues from office space and antenna rent leases located at its hotels. TTM Full Year (unaudited, dollars in millions) September 30, December 31, March 31, June 30, June 30, December 31, 2018 2018 2019 20192019 2018 Total Revenues $652 $686 $659 $703 $2,700 $2,737 Less: Other revenue 19 19 18 19 75 72 Less: Revenues from hotels disposed of42 42 22 14 120 193 Less: Revenues from non-comparable hotels(1) 8 13 3 5 29 32 Comparable Hotel Revenues $583 $612 $616 $665 $2,476 $2,440
Historical Comparable Hotel Adjusted EBITDA – 2018 TTM Supplementary Financial Information (continued) The financial information below is for the 39 comparable hotels owned as of June 30, 2019. (1) Included in other (loss) gain, net in the condensed consolidated statement of operations. (2)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 statement of operations. Supplementary Financial Information (continued) Historical Comparable Hotel Adjusted EBITDA – 2018 TTM The financial information below is for the 39 comparable hotels owned as of June 30, 2019. (1) Included in other (loss) gain, net in the condensed consolidated statement of operations. (2) 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 statement of operations. TTMFull Year (unaudited, dollars in millions) September 30, December 31, March 31, June 30, June 30,December 31, 2017 2017 2018 2018 2018 2017 Net income $105 $61 $149 $218 $533 $2,631 Depreciation and amortization expense 74 71 70 69 284 288 Interest income (1) — (1) (1) (3) (2) Interest expense 32 31 31 31 125 124 Income tax (benefit) expense (44) (2) — 13 (33) (2,346) "Interest expense, income tax and depreciation and amortization included in equity in earnings from investments in affiliates" 6 6 7 5 24 24 EBITDA 172 167 256 335 930 719 Gain on sales of assets, net — (1) (89) (7)(97) (1) Gain on sale of investments in affiliates(1) — — — (108) (108) — Loss (gain) on foreign currency transactions 1 — (1) 4 4 4 Transition expense 3 4 2 — 9 9 Transaction costs — 2 — — 2 2 Severance expense — 1 — 1 2 1 Share-based compensation expense 3 4 4 4 15 14 Casualty loss (gain) and impairment loss, net 2 24 — — 26 26 Other items 2 (21)2 (1) (18) (17) Adjusted EBITDA 183 180 174 228 765 757 Less: Adjusted EBITDA from investments in affiliates 11 10 12 14 47 45 Less: All other(2) (11) (12) (12) (14) (49) (46) Hotel Adjusted EBITDA 183 182 174 228 767 758 Less: Adjusted EBITDA from hotels disposed of 17 15 12 11 55 67 Less: Adjusted EBITDA from non-comparable hotels 1 (1) — 5 5 6 Comparable Hotel Adjusted EBITDA $165 $168 $162 $212 $707 $685
Historical Comparable Hotel Revenues – 2018 TTM Supplementary Financial Information (continued) The financial information below is for the 39 comparable hotels owned as of June 30, 2019. (1) Includes revenues from Park's non-comparable hotels and rental revenues from office space and antenna rent leases located at its hotels. Supplementary Financial Information (continued) Historical Comparable Hotel Revenues – 2018 TTM The financial information below is for the 39 comparable hotels owned as of June 30, 2019.(1) Includes revenues from Park's non-comparable hotels and rental revenues from office space and antenna rent leases located at its hotels. TTM Full Year (unaudited, dollars in millions) September 30, December 31, March 31, June 30, June 30, December 31, 2017 2017 2018 20182018 2017 Total Revenues $688 $686 $668 $731 $2,773 $2,791 Less: Other revenue 18 17 17 17 69 64 Less: Revenues from hotels disposed of 76 75 62 48 260 299 Less: Revenues from non-comparable hotels(1) 11 2 3 8 25 45 Comparable Hotel Revenues $583 $592 $586 $658 $2,419 $2,383
General and Administrative Expenses Supplementary Financial Information (continued) Supplementary Financial Information (continued) General and Administrative Expenses (unaudited, in millions) Three Months Ended Six Months Ended June 30, June 30, 2019 2018 2019 2018 Corporate general and administrative expenses $22 $15 $39 $31 Less: Share-based compensation expense 4 4 8 8 Transition expense — — — 2 Transaction costs 7 — 7 — Severance expense — 1 1 1 G&A, excluding expenses not included in Adjusted EBITDA $11 $10 $23 $20
Supplementary Financial Information (continued) Net Debt and Net Debt to Pro-forma Adjusted EBITDA Ratio (1) See slide 18 for Pro-forma TTM Adjusted EBITDA at June 30, 2019. Pro-forma TTM Adjusted EBITDA excludes results from the 13 hotels disposed of in 2018, 1 hotel returned to the ground lessor at the end of 2018 and 5 hotels disposed of in 2019. Supplementary Financial Information (continued) Net Debt and Net Debt to Pro-forma Adjusted EBITDA Ratio (1) See slide 18 for Pro-forma TTM Adjusted EBITDA at June 30, 2019. Pro-forma TTM Adjusted EBITDA excludes results from the 13 hotels disposed of in 2018, 1 hotel returned to the ground lessor at the end of 2018 and 5 hotels disposed of in 2019. (unaudited, in millions) June 30, 2019 December 31, 2018 Debt $2,949 $2,948 Add: unamortized deferred financing costs 9 10 "Long-term debt, including current maturities and excluding unamortized deferred financing costs" 2,958 2,958 "Add: Park's share of nconsolidated affiliates debt, excluding unamortized deferred financing costs" 234 233 Less: cash and cash equivalents 310 410 Less: restricted cash 170 15 Net debt 2,712 $2,766 Pro-forma TTM Adjusted EBITDA(1) $708 $712 Net debt to Pro-forma Adjusted EBITDA ratio 3.8x 3.9x
Supplementary Financial Information (continued) Pro-forma TTM Adjusted EBITDA (1) TTM June 30, 2019 is calculated as year ended December 31, 2018 plus the six months ended June 30, 2019 less the six months ended June 30, 2018. (2) Included in other (loss) gain, net in the condensed consolidated statement of operations. Supplementary Financial Information (continued) Pro-forma TTM Adjusted EBITDA (1) TTM June 30, 2019 is calculated as year ended December 31, 2018 plus the six months ended June 30, 2019 less the six months ended June 30, 2018. (2) Included in other (loss) gain, net in the condensed consolidated statement of operations. Year Ended Six Months Ended TTM(1) (unaudited, in millions)December 31, June 30, June 30, 2018 2019 2018 2019 Net income $477 $181 $367 $291 Depreciation and amortization expense 277 123 139 261 Interest income (6) (3) (2) (7) Interest expense 127 65 62 130 Income tax expense 23 12 13 22 "Interest expense, income tax and depreciation and amortization included in equity in earnings from investments in affiliates" 26 12 12 26 EBITDA 924 390 591 723 Gain on sales of assets, net(96) (19) (96) (19) Gain on sale of investments in affiliates (2) (107) — (108) 1 Loss on foreign currency transactions 3 — 3 — sition expense 3 — 2 1 Transaction costs 2 7 — 9 Severance expense 2 2 1 3 Share-based compensation expense 16 8 8 16 Casualty (gain) loss and impairment loss, net (1) — — (1) Other items 8 (5) 1 2 Adjusted EBITDA 754 383 402 735 Less: Adjusted EBITDA from hotels disposed of 40 11 24 27 Less: Adjusted EBITDA from investments in affiliates disposed of 2 — 2 — Pro-forma Adjusted EBITDA $712 $372 $376 $708
Guidance Hilton San Francisco Union Square Hilton Waikoloa Village Hilton Chicago Guidance Hilton San Francisco Union Square Hilton Waikoloa Village Hilton Chicago
Guidance 2019 Guidance and Assumptions General and administrative expenses are projected to be $44 million, excluding $15 million of non-cash share-based compensation expense, $7 million of transaction costs and $1 million of severance expense; Fully diluted weighted average shares are expected to be 201.9 million; Includes $8 million of Adjusted EBITDA from the Caribe Hilton representing a partial year of operations, for which Park expects to be covered by business interruption insurance resulting from the hotel being closed for a portion of 2019 following the damage caused by Hurricane Maria; and Excludes potential future acquisitions and dispositions, which could result in a material change to Park’s outlook. Guidance 2019 Guidance and Assumptions General and administrative expenses are projected to be $44 million, excluding $15 million of non-cash share-based compensation expense, $8 million of transaction costs and $1 million of severance expense; Fully diluted weighted average shares are expected to be 201.9 million; Includes $8 million of Adjusted EBITDA from the Caribe Hilton representing a partial year of operations, for which Park expects to be covered by business interruption insurance resulting from the hotel being closed for a portion of 2019 following the damage caused by Hurricane Maria; and Excludes potential future acquisitions and dispositions, which could result in a material change to Park’s outlook. (unaudited, dollars in millions, except per share amounts and Comparable RevPAR) "2019 Outlook as of July 31, 2019" "2019 Outlook as of May 6, 2019" Change at Midpoint Metric Low High Low High Comparable RevPAR Growth 2.0% 3.5%2.5% 4.5% -0.75% Comparable RevPAR $183 $186 $181 $184 $2 Net income $329 $353 $358 $386 $(31.0) Net income attributable to stockholders $322 $346 $350 $378 $(30.0) Diluted earnings per share $1.59 $1.71 $1.73 $1.87 $(0.15) Adjusted EBITDA $735 $760 $750 $780 $(17.5) Comparable Hotel Adjusted EBITDA margin change 0 50 bps 20 bps 80 bps (25) bps Adjusted FFO per share - Diluted $2.86 $2.98 $2.93 $3.07 $(0.08)
Guidance (continued) EBITDA and Adjusted EBITDA Guidance (continued) EBITDA and Adjusted EBITDA Year Ending (unaudited, in millions) December 31, 2019 Low CaseHigh Case Net income $329 $353 Depreciation and amortization expense 239 239 Interest income (6) (6) Interest expense 128 128 Income tax expense 14 15 "Interest expense, income tax and depreciation and amortization included in equity in earnings from investments in affiliates" 23 23 EBITDA 727 752 Gain on sale of assets, net (19) (19)Transaction costs 7 7 Severance expense 2 2 Share-based compensation expense 15 15 Other items 2 2 Adjusted EBITDA $735 $760
Guidance (continued) Nareit FFO and Adjusted FFO (1) Per share amounts are calculated based on unrounded numbers. Guidance (continued) Nareit FFO and Adjusted FFO (1) Per share amounts are calculated based on unrounded numbers. Year Ending (unaudited, in millions except per share data) December 31, 2019 Low Case High Case Net income attributable to stockholders $322 $346 Depreciation and amortization expense 239 239 "Depreciation and amortization expense attributable to noncontrolling interests" (4) (4) Gain on sale of assets, net (19) (19) Equity investment adjustments: Equity in earnings from investments in affiliates (16) (17) Pro rata FFO of equity investments 28 29 Nareit FFO attributable to stockholders 550 574 Transaction costs 7 7 Severance expense 2 2 Share-based compensation expense 15 15 Other items 2 2 Adjusted FFO attributable to stockholders $577 $601 Adjusted FFO per share - Diluted(1) $2.86 $2.98 Weighted average diluted shares outstanding 201.9 201.9
Portfolio and Operating Metrics Hilton New Orleans Riverside Waldorf Astoria Orlando Golf Club Hilton Santa Barbara Beachfront Resort Portfolio and Operating Metrics Hilton Santa Barbara Beachfront Resort Hilton New Orleans Riverside Hilton New Orleans Airport
Portfolio and Operating Metrics Hotel Portfolio as of July 31, 2019 Single $725 million CMBS loan secured by Hilton San Francisco Union Square and Parc 55 San Francisco – a Hilton Hotel. Classified as a non-comparable hotel in 2019. Portfolio and Operating Metrics Hotel Portfolio as of May 6, 2019 Single $725 million CMBS loan secured by Hilton San Francisco Union Square and Parc 55 San Francisco – a Hilton Hotel. Classified as a non-comparable hotel in 2019. Hotel Name Rooms Market Meeting Space Ownership Equity Ownership "Debt (in millions)" Consolidated Domestic Portfolio Hilton Hawaiian Village Waikiki Beach Resort 2,860 Hawaii 150,000 Fee Simple 100% $1,275 Hilton San Francisco Union Square 1,921 Northern CA 130,000 Fee Simple 100% $725 (1) New York Hilton Midtown 1,878 New York 151,000 Fee Simple 100% — Hilton New Orleans Riverside 1,622 New Orleans 130,000 Fee Simple 100% — Hilton Chicago 1,544 Chicago 234,000 Fee Simple 100% — Hilton Waikoloa Village 1,110 Hawaii 235,000 Fee Simple 100% — Parc 55 San Francisco - a Hilton Hotel 1,024 Northern CA 30,000 Fee Simple 100% — (1) Hilton Orlando Bonnet Creek 1,009 Florida 132,000 Fee Simple 100% — DoubleTree Hotel Seattle Airport 850 Other U.S. 34,000 Leasehold 100% — Hilton Orlando Lake Buena Vista 814 Florida 78,000 Leasehold 100% — Caribe Hilton(2) 652 Other U.S. 65,000 Fee Simple 100% — DoubleTree Hotel Washington DC – Crystal City 627 Washington, D.C. 31,000 Fee Simple 100% — Hilton Boston Logan Airport 604 Other U.S. 30,000 Leasehold 100% — Hilton Miami Airport 508 Florida 32,000 Fee Simple 100% — Hilton Atlanta Airport 507 Other U.S. 35,000 Fee Simple 100% — DoubleTree Hotel San Jose 505 Northern CA 48,000 Fee Simple 100% — Waldorf Astoria Orlando 502 Florida 42,000 Fee Simple 100% — Hilton Salt Lake City Center 499 Other U.S. 24,000 Leasehold 100% — DoubleTree Hotel Ontario Airport 482 Southern CA 27,000 Fee Simple 67% $30 Hilton McLean Tysons Corner 458 Washington, D.C. 27,000 Fee Simple 100% — Hilton Seattle Airport & Conference Center 396 Other U.S. 40,000 Leasehold 100% — DoubleTree Hotel Spokane City Center 375 Other U.S. 21,000 Fee Simple 10% $12 Hilton Santa Barbara Beachfront Resort 360 Southern CA 40,000 Fee Simple 50% $165 Hilton Oakland Airport 360 Northern CA 16,000 Leasehold 100% — Hilton New Orleans Airport 317 New Orleans 21,000 Fee Simple 100% — Hilton Short Hills 314 Other U.S. 14,000 Fee Simple 100% — Casa Marina, A Waldorf Astoria Resort 311 Florida 23,000 Fee Simple 100% — DoubleTree Hotel San Diego – Mission Valley 300 Southern CA 24,000 Leasehold 100% — Embassy Suites Parsippany 274 Other U.S. 8,000 Fee Simple 100% — Embassy Suites Kansas City Plaza 266 Other U.S. 11,000 Leasehold 100% — Embassy Suites Austin Downtown South Congress 262 Other U.S. 2,000 Leasehold 100% — DoubleTree Hotel Sonoma Wine Country 245 Northern CA 50,000 Leasehold 100% — Juniper Hotel Cupertino, Curio Collection 224 Northern CA 5,000 Fee Simple 100% — Hilton Chicago/Oak Brook Suites 211 Chicago 3,000 Fee Simple 100% — Embassy Suites Washington DC Georgetown 197 Washington, D.C. 1,000 Fee Simple 100% — Embassy Suites Phoenix Airport 182 Other U.S. 5,000 Leasehold 100% — Hilton Garden Inn LAX/El Segundo 162 Southern CA 3,000 Fee Simple 100% — DoubleTree Hotel Durango 159 Other U.S. 6,000 Leasehold 100% — The Reach, A Waldorf Astoria Resort 150 Florida 15,000 Fee Simple 100% — Hampton Inn & Suites Memphis – Shady Grove 131 Other U.S. 1,000 Fee Simple 100% — Hilton Garden Inn Chicago/Oak Brook Terrace 128 Chicago 2,000 Fee Simple 100% — Total Consolidated Domestic Portfolio 25,300 1,976,000 $2,207 Portfolio and Operating Metrics Hotel Portfolio as of July 31, 2019 (1) Single $725 million CMBS loan secured by Hilton San Francisco Union Square and Parc 55 San Francisco – a Hilton Hotel. (2) Classified as a non-comparable hotel in 2019. Hotel NameRooms Market "Meeting Space(square feet)" Ownership Equity Ownership "Debt(in millions)" Consolidated Domestic Portfolio Hilton Hawaiian Village Waikiki Beach Resort 2,860 Hawaii 150,000 Fee Simple 100%$1,275 Hilton San Francisco Union Square 1,921 Northern CA 130,000 Fee Simple100% $725 (1) New York Hilton Midtown 1,878 New York 151,000 Fee Simple 100% — Hilton New Orleans Riverside 1,622 New Orleans 130,000 Fee Simple 100% — Hilton Chicago 1,544 Chicago 234,000 Fee Simple 100% — Hilton Waikoloa Village 1,110 Hawaii235,000Fee Simple 100% — Parc 55 San Francisco - a Hilton Hotel 1,024 Northern CA 30,000 Fee Simple 100% — (1) Hilton Orlando Bonnet Creek 1,009 Florid 132,000Fee Simple 100% — DoubleTree Hotel Seattle Airport 850 Other U.S. 34,000 Leasehold 100% — Hilton Orlando Lake Buena Vista 814 Florida 78,000 Leasehold 100% — Caribe Hilton(2) 652 Other U.S. 65,000 Fee Simple 100% — DoubleTree Hotel Washington DC – Crystal City 627 Washington, D.C. 31,000 Fee Simple 100% — Hilton Boston Logan Airport 604 Other U.S. 30,000 Leasehold 100% — Hilton Miami Airport 508 Florida 32,000 Fee Simple 100% — DoubleTree Hotel San Jose 505 Northern CA 48,000Fee Simple 100% — Waldorf Astoria Orlando 502 Florida 42,000 Fee Simple 100% — Hilton Salt Lake City Center 499 Other U.S. 24,000 Leasehold 100% — DoubleTree Hotel Ontario Airport 482 Southern CA 27,000 Fee Simple 67% $30 Hilton McLean Tysons Corner 458 Washington, D.C. 27,000 Fee Simple 100% — Hilton Seattle Airport & Conference Center 396 Other U.S. 40,000 Leasehold 100% — DoubleTree Hotel Spokane City Center 375 Other U.S. 21,000 Fee Simple 10% $12 Hilton Santa Barbara Beachfront Resort 360 Southern CA 40,000Fee Simple 50% $165 Hilton Oakland Airport 360 Northern CA 16,000 Leasehold 100% — Hilton Short Hills 314 Other U.S. 14,000 Fee Simple 100% — Casa Marina, A Waldorf Astoria Resort 311 Florida 23,000 Fee Simple 100% — DoubleTree Hotel San Diego – Mission Valley 300 Southern CA 24,000 Leasehold 100% — Embassy Suites Kansas City Plaza 266 Other U.S. 11,000 Leasehold 100% — Embassy Suites Austin Downtown South Congress 262 Other U.S. 2,000 Leasehold 100% — DoubleTree Hotel Sonoma Wine Country 245 Northern CA 50,000Leasehold 100% — Juniper Hotel Cupertino, Curio Collection 224 Northern CA 5,000 Fee Simple 100% — Hilton Chicago/Oak Brook Suites 211 Chicago 3,000 Fee Simple 100% — Embassy Suites Washington DC Georgetown 197 Washington, D.C. 1,000 Fee Simple 100% — Embassy Suites Phoenix Airport 182 Other U.S. 5,000 Leasehold 100% — Hilton Garden Inn LAX/El Segundo 162 Southern CA 3,000 Fee Simple 100% —DoubleTree Hotel Durango 159 Other U.S. 6,000 Leasehold 100% — The Reach, A Waldorf Astoria Resort 150 Florida 15,000 Fee Simple 100% — Hampton Inn & Suites Memphis – Shady Grove 131 Other U.S. 1,000 Fee Simple 100% — Hilton Garden Inn Chicago/Oak Brook Terrace 128 Chicago 2,000 Fee Simple 100% — Total Consolidated Domestic Portfolio 24,202 1,912,000 $2,207
Portfolio and Operating Metrics (continued) Hotel Portfolio as of July 31, 2019 (1) Debt related to unconsolidated joint ventures is presented on a pro-rata basis. Portfolio and Operating Metrics (continued) Hotel Portfolio as of July 31, 2019 Hotel Name Rooms Market "Meeting Space(square feet)" Ownership Equity Ownership "Debt(1)(in millions)" Consolidated International Portfolio Hilton São Paulo Morumbi 503 International 15,000 Fee Simple 100% — Hilton Sheffield Hotel 128 International 12,000 Leasehold 100% — Total Consolidated International Portfolio 631 27,000 — Total Consolidated Portfolio (40 Hotels) 24,833 1,939,000 $2,207 Unconsolidated Joint Venture PortfolioHilton Orlando 1,424 Florida 236,000 Fee Simple 20% $95 Hilton San Diego Bayfront 1,190 Southern CA 165,000 Leasehold 25% $55 Capital Hilton 550 Washington, D.C. 30,000 Fee Simple 25% $25 Hilton La Jolla Torrey Pines 394 Southern CA 41,000 Leasehold25% $24 Embassy Suites Alexandria Old Town 288 Washington,D.C. 7,000 Fee Simple 50% $26 Embassy Suites Secaucus Meadowlands 261 Other U.S. 1,000 Leasehold 50% — DoubleTree Hotel Las Vegas Airport 190 Other U.S. 3,000 Fee Simple 50% — Conrad Dublin 192 International 13,000 Fee Simple 48% $9 Total Unconsolidated Joint Venture Portfolio 4,489 496,000 $234 TOTAL PARK HOTELS & RESORTS PORTFOLIO (48 Hotels) 29,322 2,435,000 2,441 (1) Debt related to unconsolidated joint ventures is presented on a pro-rata basis.
Portfolio and Operating Metrics (continued) Comparable Hotels By Market: Q2 2019 vs. Q2 2018 (1)Presented on a currency neutral basis (prior periods are reflected using the current period exchange rates). (2) Calculated based on unrounded numbers. Portfolio and Operating Metrics (continued) Comparable Hotels By Market: Q2 2019 vs. Q2 2018 (unaudited) Comparable ADR Comparable Occupancy Comparable RevPAR Hotels Rooms 2Q19 2Q18(1) Change(2) 2Q19 2Q18 Change 2Q19 2Q18(1) Change(2) Hawaii 2 3,970 $246.94 $248.10 (0.5)% 89.4% 87.6% 1.8% pts $220.74 $217.321.6% Northern California 6 4,279 252.21 245.96 2.5 90.4 90.3 0.1 227.99 222.07 2.7 Florida 6 3,294 210.99 209.78 0.6 82.6 82.2 0.4 174.26 172.52 1.0 Other 11 4,038 178.95 180.50 (0.9) 82.4 82.6 (0.2) 147.44 149.01 (1.1) New Orleans 1 1,622 190.32 197.22 (3.5) 80.3 81.8 (1.5) 152.75 161.25 (5.3) Chicago 3 1,883 201.25 212.12 (5.1) 87.6 84.8 2.8 176.27 179.89 (2.0) New York 1 1,878 290.13 302.19 (4.0) 94.5 92.3 2.2 274.14 278.99 (1.7) Southern California 4 1,304 183.15 170.81 7.2 88.7 85.0 3.7 162.46 145.13 11.9 Washington, D.C. 3 1,282 204.73 202.24 1.2 87.5 89.4 (1.9) 179.18 180.78 (0.9) Total Domestic 37 23,550 $222.65 $223.16 (0.2)% 86.9% 86.2% 0.7% pts $193.52 $192.31 0.6% Total International 2631 $166.99 $149.35 11.8 74.7% 75.2% (0.5)% $124.74 $112.35 11.0% All Markets 39 24,181 $221.40 $221.47 (0.0)%86.6% 85.9% 0.7% $191.72 $190.22 0.8% (1) Presented on a currency neutral basis (prior periods are reflected using the current period exchange rates). (2) Calculated based on unrounded numbers.
Portfolio and Operating Metrics (continued) (1)Presented on a currency neutral basis (prior periods are reflected using the current period exchange rates). (2) Calculated based on unrounded numbers. Comparable Hotels By Market: Q2 2019 vs. Q2 2018 Portfolio and Operating Metrics (continued) Comparable Hotels By Market: Q2 2019 vs. Q2 2018 (unaudited, dollars in millions) Comparable Hotel Adjusted EBITDA Comparable Hotel Revenue "Comparable Hotel Adjusted EBITDA Margin" Hotels Rooms 2Q19 2Q18(1) Change(2) 2Q19 2Q18(1) Change(2) 2Q19 2Q18(1) Change Hawaii 2 3,970 $51 $48 6.4% $140 $131 7.0% 36.4% 36.6% (20) bps Northern California 6 4,279 34 37 (6.2) 118 118 0.1 29.3 31.3 (200) Florida 6 3,294 33 35 (5.0) 99 100 (0.7) 33.2 34.7 (150) Other 11 4,038 19 20 (6.1) 72 71 0.4 25.3 27.1 (180) New Orleans 11,622 15 17 (10.8)38 39 (3.3) 39.6 42.9 (330) Chicago 3 1,883 15 15 (0.4) 49 50 (1.2) 31.5 31.2 30 New York 1,878 18 20 (11.6) 81 83 (4.0) 22.5 24.4 (190) Southern California 4 1,304 10 8 28.0 29 26 11.3 34.9 30.4 450 Washington, D.C. 3 1,282 10 10 (1.5) 29 30 (1.0) 34.1 34.3 (20) Total Domestic 37 23,550 $20 $210 (2.1)% $655 $648 1.0% 31.4% 32.3% (90)bps Total International 2 631 $3 $2 26.2% $10 $10 9.1% 24.5% 21.2% 330 bps All Markets 39 24,181 $208 $212 (1.8)% $665 $658 1.1% 31.3% 32.2% (90) bps (1) Presented on a currency neutral basis (prior periods are reflected using the current period exchange rates).(2) Calculated based on unrounded numbers.
Portfolio and Operating Metrics (continued) (1)Presented on a currency neutral basis (prior periods are reflected using the current period exchange rates). (2) Calculated based on unrounded numbers. Comparable Hotels By Market: Q2 YTD 2019 vs. Q2 YTD 2018 Portfolio and Operating Metrics (continued) Comparable Hotels By Market: Q2 YTD 2019 vs. Q2 YTD 2018 (unaudited) Comparable ADR Comparable Occupancy Comparable RevPAR Hotels Rooms 2019 2018(1) Change(2) 2019 2018Change 2019 2018(1) Change(2) Hawaii 2 3,970 $251.59 $250.88 0.3% 89.7% 89.8% (0.1)% pts $225.74 $225.35 0.2% Northern California 6 4,279 268.39 247.89 8.3 87.2 85.8 1.4 234.13 212.73 10.1 Florida 6 3,294 236.42 235.66 0.3 84.7 84.3 0.4 200.19 198.70 0.8 Other 11 4,038 170.52 168.80 1.0 78.6 79.3 (0.7) 134.05 133.89 0.1 New Orleans 1 1,622 202.91 203.59 (0.3) 78.2 79.3 (1.1) 158.62 161.34 1.7) Chicago 3 1,883174.23 178.27 (2.3) 72.5 72.9 (0.4) 126.26 129.97 (2.8) New York 1 1,878 262.58 276.10 (4.9) 86.8 83.8 3.0 228.01 231.58 (1.5) Southern California 4 1,304 176.56 164.76 7.2 87.1 81.1 6.0 153.74 133.57 15.1 Washington, D.C. 3 1,282 190.79 190.63 0.1 77.2 77.9 (0.7) 147.29 148.53 (0.8) Total Domestic 37 23,550 $224.53 $220.77 1.7% 83.4% 82.6% 0.8% pts $187.32 $182.88 2.4% Total International 2 631 $163.24 $148.24 10.1% 69.9% 70.2% (0.3)% pts $114.16 $104.16 9.6% All Markets 39 24,181 $223.19 $219.16 1.8% 83.1% 82.5% 0.6% pts $185.41 $180.83 2.5% (1) Presented on a currency neutral basis (prior periods are reflected using the current period exchange rates).(2)Calculated based on unrounded numbers.
Portfolio and Operating Metrics (continued) (1)Presented on a currency neutral basis (prior periods are reflected using the current period exchange rates). (2) Calculated based on unrounded numbers. Comparable Hotels By Market: Q2 YTD 2019 vs. Q2 YTD 2018 Portfolio and Operating Metrics (continued) Comparable Hotels By Market: Q2 YTD 2019 vs. Q2 YTD 2018 (1) Presented on a currency neutral basis (prior periods are reflected using the current period exchange rates). (2) Calculated based on unrounded numbers. (unaudited, dollars in millions) Comparable Hotel Adjusted EBITDA Comparable Hotel Revenue "Comparable Hotel Adjusted EBITDA Margin" Hotels Rooms 2019 2018(1) Change(2) 2019 2018(1) Change(2) 2019 2018(1) Change Hawaii 2 3,970 $102 $99 2.7% $280 $267 4.6% 36.5% 37.2% (70) bps Northern California 6 4,279 74 66 12.0 240 225 7.1 30.9 29.6 130 Florida 6 3,294 84 84 (0.3) 222 217 2.0 37.7 38.6 (90) Other 11 4,038 27 29 (0.7) 130 130 0.8 21.6 21.9 (30) New Orleans 1 1,622 33 33 0.1 80 80 0.3 41.0 41.1 (10) Chicago 3 1,883 13 14 (7.8) 73 75 (0.6) 17.2 18.5 (130)New York 1 1,878 16 20 (22.3) 132 137 (3.4) 12.0 14.9 (290) Southern California4 1,30418 13 47.1 56 47 17.7 32.6 26.1 650 Washington, D.C. 3 1,282 13 13 (1.9) 49 49 (0.4) 26.4 26.8 (40) Total Domestic 3723,550 $380 $371 2.7% $1,262 $1,227 3.0% 30.1% 30.2% (10) bps Total International 2 631 $4 $318.2% $19 $18 9.1% 20.1% 18.6% 150 bps All Markets 39 24,181 $384 $374 2.9% $1,281 $1,245 2.9% 30.0% 30.1% (10) bps
Portfolio and Operating Metrics (continued) Top 10 Assets: Q2 2019 vs. Q2 2018 (1)Presented on a currency neutral basis (prior periods are reflected using the current period exchange rates). (2) Calculated based on unrounded numbers. (3)Includes the Caribe Hilton and assets disposed of in 2018 and 2019. Portfolio and Operating Metrics (continued) Top 10 Assets: Q2 2019 vs. Q2 2018 (1) Presented on a currency neutral basis (prior periods are reflected using the current period exchange rates). (2) Calculated based on unrounded numbers. (3) Includes the Caribe Hilton and assets disposed of in 2018 and 2019. (unaudited) ADROccupancy RevPAR 2Q19 2Q18(1) Change(2) 2Q19 2Q18 Change 2Q19 2Q18(1) Change(2) Top 10 Hotels Hilton Hawaiian Village Waikiki Beach Resort $258.73 $254.091.8% 93.9% 94.8% (0.9)% pts $242.92 $240.93 0.8% 2 Hilton San Francisco Union Square 267.16 261.12 2.3 92.4 89.3 3.1 246.84 233.24 5.8 3 Parc 55 San Francisco - a Hilton Hotel 269.99 260.09 3.8 91.8 93.3 (1.5) 247.87 242.62 2.2 4 New York Hilton Midtown 290.13 302.19 (4.0) 94.5 92.3 2.2 274.14 278.99 (1.7) 5 Hilton Orlando Bonnet Creek 183.38 186.87 (1.9) 80.3 79.4 0.9 147.19 148.40 (0.8) 6 Waldorf Astoria Orlando 280.24 274.97 1.9 79.4 76.2 3.2 222.64 209.76 6.1 7 Hilton New Orleans Riverside 190.32 197.22 (3.5) 80.3 81.8 (1.5) 152.75 161.25 (5.3) 8 Hilton Chicago 218.48 231.50 (5.6) 88.2 84.4 3.8 192.77 195.53 (1.4) 9 Casa Marina, A Waldorf Astoria Resort 375.70 377.99 (0.6) 84.9 79.4 5.5 318.79 300.09 6.2 10 Hilton Waikoloa Village 210.28 226.87 (7.3) 77.8 69.0 8.8 163.58 156.49 4.5 Sub-total Top 10 Hotels $248.38 $250.76 (0.9)% 88.3% 86.6% 1.7% pts $219.43 $217.33 1.0% Top 11-25 Comparable Hotels $203.13 $199.33 1.9% 83.8% 85.0% (1.2)% pts $170.28 $169.47 0.5%All Other Comparable Hotels $152.23 $152.26 (0.0)% 85.0% 84.6% 0.4% pts $129.45$128.790.5% Non-Comparable Hotels(3) $143.39 $159.67 (10.2)% 60.5% 63.1% (2.6)% pts $86.81 $100.73 (13.8)% Total Consolidated Portfolio $217.81 $215.65 1.0% 84.9% 83.1% 1.8% pts $184.96 $179.12 3.3%
Portfolio and Operating Metrics (continued) Top 10 Assets: Q2 2019 vs. Q2 2018 (1)Presented on a currency neutral basis (prior periods are reflected using the current period exchange rates). (2) Calculated based on unrounded numbers. (3)Includes the Caribe Hilton and assets disposed of in 2018 and 2019. (4)Percentage change is not meaningful. Portfolio and Operating Metrics (continued) Top 10 Assets: Q2 2019 vs. Q2 2018 (unaudited, dollars in millions) Hotel Adjusted EBITDA Hotel Revenue "Hotel Adjusted EBITDA Margin" 2Q19 2Q18(1) Change(2) 2Q19 2Q18(1) Change(2) 2Q19 2Q18(1) Change Top 10 Hotels 1 Hilton Hawaiian Village Waikiki Beach Resort $41 $40 4.5% $104 $100 4.6% 39.8% 39.8% 0 bps 2 Hilton San Francisco Union Square 18 19 (2.1) 62 60 2.5 29.5 30.9 (140) 3 Parc 55 San Francisco - a Hilton Hotel 9 9 (2.7) 27 27 0.1 32.1 33.0 (90) 4 New York Hilton Midtown 18 21 (11.6) 80 84 (4.0) 22.5 24.4 (190) 5 Hilton Orlando Bonnet Creek 12 14 (13.4) 32 35 (8.0) 37.5 39.8 (230) 6 Waldorf Astoria Orlando 5 4 13.9 20 18 7.4 25.6 24.1 150 7 Hilton New Orleans Riverside 15 17 (10.8) 38 39 (3.3) 39.6 42.9 (330) 8 Hilton Chicago 14 14 0.6 45 45 (0.7) 31.7 31.3 40 9 Casa Marina, A Waldorf Astoria Resort 5 5 2.6 14 13 6.8 37.9 39.4 (150) 10 Hilton Waikoloa Village 10 8 15.3 36 32 14.5 26.7 26.5 20 Sub-total Top 10 Hotels $147 $151 (1.8)% $458 $453 1.1% 32.2% 33.2% (100) bps Top 11-25 Comparable Hotels $46 $46 (0.7)% $146 $144 1.0% 31.2% 31.7% (50)bps All Other Comparable Hotels $15 $15 (4.6)% $61 $61 0.9% 24.1% 25.5% (140) bps Non-Comparable Hotels(3) $1 $16 (95.6)% $19 $56 (65.2)% 3.9% 30.3% NM(4) bps Total Consolidated Portfolio $209 $228 (8.5)% $684 $714 (3.9)% 30.5% 31.9% (140) bps. (1) Presented on a currency neutral basis (prior periods are reflected using the current period exchange rates).(2) Calculated based on unrounded numbers.(3) Includes the Caribe Hilton and assets disposed of in 2018 and 2019.(4) Percentage change is not meaningful.
Portfolio and Operating Metrics (continued) Top 10 Assets: Q2 YTD 2019 vs. Q2 YTD 2018 (1)Presented on a currency neutral basis (prior periods are reflected using the current period exchange rates). (2) Calculated based on unrounded numbers. (3)Includes the Caribe Hilton and assets disposed of in 2018 and 2019. Portfolio and Operating Metrics (continued) Top 10 Assets: Q2 YTD 2019 vs. Q2 YTD 2018 (unaudited) ADR Occupancy RevPAR 2019 2018(1) Change(2) 2019 2018 Change 2019 2018(1) Change(2) Top 10 Hotels 1 Hilton Hawaiian Village Waikiki Beach Resort $260.00 $255.43 1.8% 93.2% 94.3% (1.1)% pts $242.41 $240.84 0.6% 2 Hilton San Francisco Union Square 292.98 268.23 9.2 88.7 83.8 4.9 259.90 224.70 15.7 3 Parc 55 San Francisco - a Hilton Hotel 289.56 262.71 10.2 89.7 89.6 0.1 259.85 235.43 10.4 4 New York Hilton Midtown 262.58 276.10 (4.9)86.8 83.8 3.0 228.01 231.58 (1.5) 5 Hilton Orlando Bonnet Creek 204.45 205.12 (0.3) 82.8 81.0 1.8 169.32 166.18 1.9 6 Waldorf Astoria Orlando 308.08 312.81 (1.5) 78.9 78.4 0.5 242.97 245.11(0.9)7 Hilton New Orleans Riverside 202.91 203.59 (0.3) 78.2 79.3 (1.1) 158.62 161.34 (1.7) 8 Hilton Chicago 188.10 192.81 (2.4) 71.6 71.7 (0.1) 134.65 138.25 (2.6)9 Casa Marina, A Waldorf Astoria Resort 427.78 418.20 2.3 88.2 84.2 4.0 377.10 352.09 7.1 10 Hilton Waikoloa Village 226.56 236.74 (4.3) 80.7 78.3 2.4 182.80 185.42 (1.4) Sub-total Top 10 Hotels $253.53 $249.51 1.6% 84.9% 83.7% 1.2% pts $215.15 $208.81 3.0% Top 11-25 Comparable Hotels $198.79 $193.48 2.7% 80.4% 81.2% (0.8)% pts $159.74 $157.32 1.5% All Other Comparable Hotels $151.30 $150.47 0.6% 81.3% 80.3% 1.0% pts $123.00 $120.86 1.8% Non-Comparable Hotels(3) $150.37 $155.61 (3.4)% 55.7% 64.1% (8.4)% pts $83.80 $99.75 (16.0)% Total Consolidated Portfolio $219.55 $211.61 3.8% 81.1% 79.8% 1.3% pts $178.03 $168.83 5.4% (1) Presented on a currency neutral basis (prior periods are reflected using the current period exchange rates).(2) Calculated based on unrounded numbers.(3)Includes the Caribe Hilton and assets disposed of in 2018 and 2019.
Portfolio and Operating Metrics (continued) Top 10 Assets: Q2 YTD 2019 vs. Q2 YTD 2018 (1)Presented on a currency neutral basis (prior periods are reflected using the current period exchange rates). (2) Calculated based on unrounded numbers. (3)Includes the Caribe Hilton and assets disposed of in 2018 and 2019. Portfolio and Operating Metrics (continued) Top 10 Assets: Q2 YTD 2019 vs. Q2 YTD 2018 (unaudited, dollars in millions)Hotel Adjusted EBITDA Hotel Revenue "Hotel Adjusted EBITDA Margin"2019 2018(1) Change(2) 2019 2018(1) Change(2) 2019 2018(1) Change Top 10 Hotels 1 Hilton Hawaiian Village Waikiki Beach Resort $80 $77 4.0% $204 $195 4.4% 39.3% 39.5% (20)bps 2 Hilton San Francisco Union Square 41 34 22.2 128 114 11.8 32.1 29.4 270 3 Parc 55 San Francisco - a Hilton Hotel 19 17 10.4 55 52 6.9 33.6 32.5 110 4 New York Hilton Midtown 16 20 (22.3) 132 137 (3.4) 12.0 14.9 (290) 5 Hilton Orlando Bonnet Creek 30 30 (1.2) 74 73 0.6 40.4 41.1 (70) 6 Waldorf Astoria Orlando 14 13 3.2 43 42 3.1 31.8 31.7 10 7 Hilton New Orleans Riverside 33 33 0.1 80 80 0.3 41.0 41.1 (10) 8 Hilton Chicago 11 12 (6.3) 67 67 (0.1) 16.5 17.6 (110) 9 Casa Marina, A Waldorf Astoria Resort 13 13 0.2 32 30 6.5 42.1 44.7 (270)10Hilton Waikoloa Village 22 22 (1.6) 76 72 5.0 28.9 30.9 (200) Sub-total Top 10 Hotel $279 $271 2.5% $891 $862 3.3% 31.2% 31.5% (30) bps Top 11-25 Comparable Hotels $80 $76 4.5% $274 $268 2.7% 29.1% 28.6% 50 bps All Other Comparable Hotels $26 $26 2.1% $116 $116 2.7% 22.5% 22.6% (10) bps Non-Comparable Hotels(3) $5 $29 (80.0)% $44 $119 (63.5)% 13.4% 24.4% (1,100) bps Total Consolidated Portfolio $390 $402 3.0% $1,325 $1,365 (2.6)% 29.4% 29.6% (20)bps.(1) Presented on a currency neutral basis (prior periods are reflected using the current period exchange rates).(2) Calculated based on unrounded numbers.(3)Includes the Caribe Hilton and assets disposed of in 2018 and 2019.
Acquisitions & Dispositions Hilton Sao Paulo Morumbi Caribe Hilton Hilton Miami Airport Blue Lagoon Acquisitions & Dispositions Hilton Sao Paulo Morumbi Caribe Hilton Hilton Miami Airport Blue Lagoon
Property Acquisitions and Dispositions Property Dispositions (1) The unconsolidated hotel was sold for a total sales price of approximately $350 million, of which $140 million represents Park’s pro rata share. (2) Hotels were sold as a portfolio in the same transaction. Property Acquisitions and Dispositions Property Dispositions Hotel Location Month Sold Room Count Sales Price 2018 Dipositions:Hilton Rotterdam Rotterdam, Netherlands January 2018 254 $62.2 Embassy Suites Portfolio - 3 Hotels Domestic US February 2018 676 95.8 UK Portfolio - 7 Hotels United Kingdom February 2018 1,334 188.5 Hilton DurbanDurban, South Africa February 2018 328 32.5 Hilton Berlin(1) Berlin, Germany May 2018 601 140.0 2018 Total 3,193 $519.0 2019 Dipositions:Pointe Hilton Squaw Peak Resort Phoenix, Arizona February 2019 563 $51.4 Hilton Nuremberg Nuremberg, Germany March 2019 152 17.5 Hilton Atlanta Aiport Atlanta, Georgia June 2019 507 101.0 Portfolio(2) June 2019 Hilton New Orleans Airport New Orleans, Louisiana 317 48.0 Embassy Suites Parsippany Parsippany, New Jersey 274 17.0 591 65.0 2019 Total 1,813 $234.9 Grand Total 5,006 $753.9. (1) The unconsolidated hotel was sold for a total sales price of approximately $350 million, of which $140 million represents Park’s pro rata share.(2) Hotels were sold as a portfolio in the same transaction.
Debt Summary Casa Marina, a Waldorf Astoria Resort Hilton Orlando Bonnet Creek New York Hilton Midtown Debt Summary Casa Marina, a Waldorf Astoria Resort Hilton Orlando Bonnet Creek New York Hilton Midtown
Debt Summary Fixed and Variable Rate Debt (1)Calculated on a weighted average basis. (2)$1 billion available. (3)Assumes the exercise of all extensions that are exercisable solely at Park’s option. (4)Excludes $234 million of Park’s share of debt of its unconsolidated joint ventures. Debt Summary Fixed and Variable Rate Debt (unaudited, dollars in millions)Debt Collateral Interest Rate Maturity Date As of June 30, 2019 Fixed Rate Deb Mortgage loan DoubleTree Hotel Spokane City Center 3.55% October 2020 $12 "Commercial mortgage-backedsecurities loan " Hilton San Francisco Union Square, Parc 55 San Francisco - a Hilton Hotel 4.11% November 2023 725 "Commercial mortgage-backedsecurities loan " Hilton Hawaiian Village Waikiki Beach Resort 4.20% November 2026 1,275 Mortgage loan Hilton Santa Barbara Beachfront Resort 4.17% December 2026 165 Capital lease obligations 3.07 2021 to 2022 1 Total Fixed Rate Debt 4.16%(1) 2,178 Variable Rate Debt Revolving credit facility(2) Unsecured L + 1.60% December 2021(3) — Term loan Unsecured L + 1.55% December 2021 750 Mortgage loan DoubleTree Hotel Ontario Airport L + 2.25% May 2022(3) 30 Total Variable Rate Debt 3.98% 780 Less: unamortized deferred financing costs and discount (9) Total Debt(4) 4.11%(1) $2,949 (1) Calculated on a weighted average basis. (2) $1 billion available. (3) Assumes the exercise of all extensions that are exercisable solely at Park's option. (4) Excludes $234 million of Park's share of debt of its unconsolidated joint ventures.
Definitions Hilton Orlando Bonnet Creek Hilton Hawaiian Village Waikiki Beach Resort New York Hilton Midtown Definitions Hilton Orlando Bonnet Creek New York Hilton Midtown Hilton Hawaiian Village Waikiki Beach Resort
Definitions EBITDA, Adjusted EBITDA, Hotel Adjusted EBITDA and Hotel Adjusted EBITDA Margin Earnings before interest expense, taxes and depreciation and amortization (“EBITDA”), presented herein, reflects net income excluding depreciation and amortization, interest income, interest expense, income taxes and interest expense, income tax and depreciation and amortization included in equity in earnings from investments in affiliates. Adjusted EBITDA, presented herein, is calculated as EBITDA, as previously defined, further adjusted to exclude: Gains or losses on sales of assets for both consolidated and unconsolidated investments; Gains or losses on foreign currency transactions; Transition expense related to the Company’s establishment as an independent, publicly traded company; Transaction costs associated with hotel acquisitions or dispositions expensed during the period; Severance expense; Share-based compensation expense; Casualty and impairment losses; and Other items that management believes are not representative of the Company’s current or future operating performance. Hotel Adjusted EBITDA measures hotel-level results before debt service, depreciation and corporate expenses of the Company’s consolidated hotels, including both comparable and non-comparable hotels but excluding hotels owned by unconsolidated affiliates, and is a key measure of the Company’s profitability. The Company presents Hotel Adjusted EBITDA to help the Company and its investors evaluate the ongoing operating performance of the Company’s consolidated hotels. Hotel Adjusted EBITDA margin is calculated as Hotel Adjusted EBITDA divided by total hotel revenue. EBITDA, Adjusted EBITDA, Hotel Adjusted EBITDA and Hotel Adjusted EBITDA margin are not recognized terms under United States (“U.S.”) GAAP and should not be considered as alternatives to net income (loss) or other measures of financial performance or liquidity derived in accordance with U.S. GAAP. In addition, the Company’s definitions of EBITDA, Adjusted EBITDA, Hotel Adjusted EBITDA and Hotel Adjusted EBITDA margin may not be comparable to similarly titled measures of other companies. The Company believes that EBITDA, Adjusted EBITDA, Hotel Adjusted EBITDA and Hotel Adjusted EBITDA margin provide useful information to investors about the Company and its financial condition and results of operations for the following reasons: (i) EBITDA, Adjusted EBITDA, Hotel Adjusted EBITDA and Hotel Adjusted EBITDA margin are among the measures used by the Company’s management team to make day-to-day operating decisions and to evaluate its operating performance between periods and between REITs by removing the effect of its capital structure (primarily interest expense) and asset base (primarily depreciation and amortization) from its operating results; and (ii) EBITDA, Adjusted EBITDA, Hotel Adjusted EBITDA and Hotel Adjusted EBITDA margin are frequently used by securities analysts, investors and other interested parties as a common performance measure to compare results or estimate valuations across companies in the industry. EBITDA, Adjusted EBITDA, Hotel Adjusted EBITDA and Hotel Adjusted EBITDA margin have limitations as analytical tools and should not be considered either in isolation or as a substitute for net income (loss) or other methods of analyzing results as reported under U.S. GAAP. Definitions EBITDA, Adjusted EBITDA, Hotel Adjusted EBITDA and Hotel Adjusted EBITDA Margin Earnings before interest expense, taxes and depreciation and amortization (“EBITDA”), presented herein, reflects net income excluding depreciation and amortization, interest income, interest expense, income taxes and interest expense, income tax and depreciation and amortization included in equity in earnings from investments in affiliates. Adjusted EBITDA, presented herein, is calculated as EBITDA, as previously defined, further adjusted to exclude: Gains or losses on sales of assets for both consolidated and unconsolidated investments; Gains or losses on foreign currency transactions; Transition expense related to the Company’s establishment as an independent, publicly traded company; Transaction costs associated with hotel acquisition or disposition costs expensed during the period; Severance expense; Share-based compensation expense; Casualty and impairment losses; and Other items that management believes are not representative of the Company’s current or future operating performance. Hotel Adjusted EBITDA measures hotel-level results before debt service, depreciation and corporate expenses of the Company’s consolidated hotels, including both comparable and non-comparable hotels but excluding hotels owned by unconsolidated affiliates, and is a key measure of the Company’s profitability. The Company presents Hotel Adjusted EBITDA to help the Company and its investors evaluate the ongoing operating performance of the Company’s consolidated hotels. Hotel Adjusted EBITDA margin is calculated as Hotel Adjusted EBITDA divided by total hotel revenue. EBITDA, Adjusted EBITDA, Hotel Adjusted EBITDA and Hotel Adjusted EBITDA margin are not recognized terms under United States (“U.S.”) GAAP and should not be considered as alternatives to net income (loss) or other measures of financial performance or liquidity derived in accordance with U.S. GAAP. In addition, the Company’s definitions of EBITDA, Adjusted EBITDA, Hotel Adjusted EBITDA and Hotel Adjusted EBITDA margin may not be comparable to similarly titled measures of other companies. The Company believes that EBITDA, Adjusted EBITDA, Hotel Adjusted EBITDA and Hotel Adjusted EBITDA margin provide useful information to investors about the Company and its financial condition and results of operations for the following reasons: (i) EBITDA, Adjusted EBITDA, Hotel Adjusted EBITDA and Hotel Adjusted EBITDA margin are among the measures used by the Company’s management team to make day-to-day operating decisions and to evaluate its operating performance between periods and between REITs by removing the effect of its capital structure (primarily interest expense) and asset base (primarily depreciation and amortization) from its operating results; and (ii) EBITDA, Adjusted EBITDA, Hotel Adjusted EBITDA and Hotel Adjusted EBITDA margin are frequently used by securities analysts, investors and other interested parties as a common performance measure to compare results or estimate valuations across companies in the industry. EBITDA, Adjusted EBITDA, Hotel Adjusted EBITDA and Hotel Adjusted EBITDA margin have limitations as analytical tools and should not be considered either in isolation or as a substitute for net income (loss) or other methods of analyzing results as reported under U.S. GAAP. PARK HOTELS & RESORTS 39 Definitions EBITDA, Adjusted EBITDA, Hotel Adjusted EBITDA and Hotel Adjusted EBITDA Margin Earnings before interest expense, taxes and depreciation and amortization (“EBITDA”), presented herein, reflects net income excluding depreciation and amortization, interest income, interest expense, income taxes and interest expense, income tax and depreciation and amortization included in equity in earnings from investments in affiliates.Adjusted EBITDA, presented herein, is calculated as EBITDA, as previously defined, further adjusted to exclude:Gains or losses on sales of assets for both consolidated and unconsolidated investments;Gains or losses on foreign currency transactions;Transition expense related to the Company’s establishment as an independent, publicly traded company;Transaction costs associated with hotel acquisitions or dispositions expensed during the period;Severance expense;Share-based compensation expense;Casualty and impairment losses; andOther items that management believes are not representative of the Company’s current or future operating performance.Hotel Adjusted EBITDA measures hotel-level results before debt service, depreciation and corporate expenses of the Company’s consolidated hotels, including both comparable and non-comparable hotels but excluding hotels owned by unconsolidated affiliates, and is a key measure of the Company’s profitability. The Company presents Hotel Adjusted EBITDA to help the Company and its investors evaluate the ongoing operating performance of the Company’s consolidated hotels.Hotel Adjusted EBITDA margin is calculated as Hotel Adjusted EBITDA divided by total hotel revenue.EBITDA, Adjusted EBITDA, Hotel Adjusted EBITDA and Hotel Adjusted EBITDA margin are not recognized terms under United States (“U.S.”) GAAP and should not be considered as alternatives to net income (loss) or other measures of financial performance or liquidity derived in accordance with U.S. GAAP. In addition, the Company’s definitions of EBITDA, Adjusted EBITDA, Hotel Adjusted EBITDA and Hotel Adjusted EBITDA margin may not be comparable to similarly titled measures of other companies.The Company believes that EBITDA, Adjusted EBITDA, Hotel Adjusted EBITDA and Hotel Adjusted EBITDA margin provide useful information to investors about the Company and its financial condition and results of operations for the following reasons: (i) EBITDA, Adjusted EBITDA, Hotel Adjusted EBITDA and Hotel Adjusted EBITDA margin are among the measures used by the Company’s management team to make day-to-day operating decisions and to evaluate its operating performance between periods and between REITs by removing the effect of its capital structure (primarily interest expense) and asset base (primarily depreciation and amortization) from its operating results; and (ii) EBITDA, Adjusted EBITDA, Hotel Adjusted EBITDA and Hotel Adjusted EBITDA margin are frequently used by securities analysts, investors and other interested parties as a common performance measure to compare results or estimate valuations across companies in the industry.EBITDA, Adjusted EBITDA, Hotel Adjusted EBITDA and Hotel Adjusted EBITDA margin have limitations as analytical tools and should not be considered either in isolation or as a substitute for net income (loss) or other methods of analyzing results as reported under U.S. GAAP.
Definitions (cont’d) Nareit FFO attributable to stockholders, Adjusted FFO attributable to stockholders, Nareit FFO per share – Diluted and Adjusted FFO per share - Diluted Nareit FFO attributable to stockholders and Nareit FFO per diluted share (defined as set forth below) are presented herein as non-GAAP measures of the Company’s performance. The Company calculates funds from operations (“FFO”) attributable to stockholders for a given operating period in accordance with standards established by the National Association of Real Estate Investment Trusts (“Nareit”), as net income (loss) attributable to stockholders (calculated in accordance with U.S. GAAP), excluding depreciation and amortization, gains or losses on sales of assets, impairment, and the cumulative effect of changes in accounting principles, plus adjustments for unconsolidated joint ventures. Adjustments for unconsolidated joint ventures are calculated to reflect the Company’s pro rata share of the FFO of those entities on the same basis. As noted by Nareit in its December 2018 “Nareit Funds from Operations White Paper – 2018 Restatement,” since real estate values historically have risen or fallen with market conditions, many industry investors have considered presentation of operating results for real estate companies that use historical cost accounting to be insufficient by themselves. For these reasons, Nareit adopted the FFO metric in order to promote an industry-wide measure of REIT operating performance. The Company believes Nareit FFO provides useful information to investors regarding its operating performance and can facilitate comparisons of operating performance between periods and between REITS. The Company’s presentation may not be comparable to FFO reported by other REITs that do not define the terms in accordance with the current Nareit definition, or that interpret the current Nareit definition differently. The Company calculates Nareit FFO per diluted share as Nareit FFO divided by the number of fully diluted shares outstanding during a given operating period. The Company also presents Adjusted FFO attributable to stockholders and Adjusted FFO per diluted share when evaluating its performance because management believes that the exclusion of certain additional items described below provides useful supplemental information to investors regarding the Company’s ongoing operating performance. Management historically has made the adjustments detailed below in evaluating its performance and in its annual budget process. Management believes that the presentation of Adjusted FFO provides useful supplemental information that is beneficial to an investor’s complete understanding of operating performance. The Company adjusts Nareit FFO attributable to stockholders for the following items, which may occur in any period, and refers to this measure as Adjusted FFO attributable to stockholders: Gains or losses on foreign currency transactions; Transition expense related to the Company’s establishment as an independent, publicly traded company; Transaction 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. Definitions (cont’d) Nareit FFO attributable to stockholders, Adjusted FFO attributable to stockholders, Nareit FFO per share – Diluted and Adjusted FFO per share - Diluted Nareit FFO attributable to stockholders and Nareit FFO per diluted share (defined as set forth below) are presented herein as non-GAAP measures of the Company’s performance. The Company calculates funds from operations (“FFO”) attributable to stockholders for a given operating period in accordance with standards established by the National Association of Real Estate Investment Trusts (“Nareit”), as net income (loss) attributable to stockholders (calculated in accordance with U.S. GAAP), excluding depreciation and amortization, gains or losses on sales of assets, impairment, and the cumulative effect of changes in accounting principles, plus adjustments for unconsolidated joint ventures. Adjustments for unconsolidated joint ventures are calculated to reflect the Company’s pro rata share of the FFO of those entities on the same basis. As noted by Nareit in its December 2018 “Nareit Funds from Operations White Paper – 2018 Restatement,” since real estate values historically have risen or fallen with market conditions, many industry investors have considered presentation of operating results for real estate companies that use historical cost accounting to be insufficient by themselves. For these reasons, Nareit adopted the FFO metric in order to promote an industry-wide measure of REIT operating performance. The Company believes Nareit FFO provides useful information to investors regarding its operating performance and can facilitate comparisons of operating performance between periods and between REITS. The Company’s presentation may not be comparable to FFO reported by other REITs that do not define the terms in accordance with the current Nareit definition, or that interpret the current Nareit definition differently. The Company calculates Nareit FFO per diluted share as Nareit FFO divided by the number of fully diluted shares outstanding during a given operating period.The Company also presents Adjusted FFO attributable to stockholders and Adjusted FFO per diluted share when evaluating its performance because management believes that the exclusion of certain additional items described below provides useful supplemental information to investors regarding the Company’s ongoing operating performance. Management historically has made the adjustments detailed below in evaluating its performance and in its annual budget process. Management believes that the presentation of Adjusted FFO provides useful supplemental information that is beneficial to an investor’s complete understanding of operating performance. The Company adjusts Nareit FFO attributable to stockholders for the following items, which may occur in any period, and refers to this measure as Adjusted FFO attributable to stockholders:Gains or losses on foreign currency transactions;Transition expense related to the Company’s establishment as an independent, publicly traded company;Transaction 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.
Definitions (cont’d) 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 U.S. GAAP. Net debt may not be comparable to a similarly titled measure of other companies. Net Debt to Pro-forma Adjusted EBITDA Ratio Net debt to Pro-forma Adjusted EBITDA ratio, presented herein, is a non-GAAP financial measure and is included as it is frequently used by securities analysts, investors and other interested parties to compare the financial condition of companies. Net debt to Pro-forma Adjusted EBITDA ratio should not be considered as an alternative to measures of financial condition derived in accordance with U.S. GAAP and it may not be comparable to a similarly titled measure of other companies. Comparable Hotels The Company presents certain data for its consolidated hotels on a comparable hotel basis as supplemental information for investors. The Company defines its comparable hotels as those hotels that: (i) were active and operating in the Company’s portfolio since January 1st of the previous year; and (ii) have not sustained substantial property damage, business interruption, undergone large-scale capital projects or for which comparable results are not available. The Company presents comparable hotel results to help the Company and its investors evaluate the ongoing operating performance of its comparable hotels. Of the 40 hotels that are consolidated as of June 30, 2019, 39 hotels have been classified as comparable hotels. Due to the effects of the hurricane at the Caribe Hilton in Puerto Rico and the continued effects from business interruption, the results from this property was excluded from comparable hotels in 2019. The Company’s comparable hotels also exclude the 12 consolidated hotels that were sold in January and February 2018, 1 consolidated hotel that was returned to the lessor after the expiration of the ground lease in December 2018 and 5 consolidated hotels that were sold in 2019. Definitions (cont’d) 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 U.S. GAAP. Net debt may not be comparable to a similarly titled measure of other companies.Net Debt to Pro-forma Adjusted EBITDA Ratio Net debt to Pro-forma Adjusted EBITDA ratio, presented herein, is a non-GAAP financial measure and is included as it is frequently used by securities analysts, investors and other interested parties to compare the financial condition of companies. Net debt to Pro-forma Adjusted EBITDA ratio should not be considered as an alternative to measures of financial condition derived in accordance with U.S. GAAP and it may not be comparable to a similarly titled measure of other companies.Comparable Hotels The Company presents certain data for its consolidated hotels on a comparable hotel basis as supplemental information for investors. The Company defines its comparable hotels as those hotels that: (i) were active and operating in the Company’s portfolio since January 1st of the previous year; and (ii) have not sustained substantial property damage, business interruption, undergone large-scale capital projects or for which comparable results are not available. The Company presents comparable hotel results to help the Company and its investors evaluate the ongoing operating performance of its comparable hotels. Of the 40 hotels that are consolidated as of June 30, 2019, 39 hotels have been classified as comparable hotels. Due to the effects of the hurricane at the Caribe Hilton in Puerto Rico and the continued effects from business interruption, the results from this property was excluded from comparable hotels in 2019. The Company’s comparable hotels also exclude the 12 consolidated hotels that were sold in January and February 2018, 1 consolidated hotel that was returned to the lessor after the expiration of the ground lease in December 2018 and 5 consolidated hotels that were sold in 2019.
Definitions (cont’d) 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 hotel rooms increases or decreases. Average Daily Rate ADR represents rooms revenue divided by total number of room nights sold in a given period. ADR measures average room price attained by a hotel and ADR trends provide useful information concerning the pricing environment and the nature of the customer base of a hotel or group of hotels. ADR is a commonly used performance measure in the hotel industry, and management uses ADR to assess pricing levels that the Company is able to generate by type of customer, as changes in rates have a more pronounced effect on overall revenues and incremental profitability than changes in occupancy, as described above. Revenue per Available Room Revenue per Available Room (“RevPAR”) represents rooms revenue divided by total number of room nights available to guests for a given period. Management considers RevPAR to be a meaningful indicator of the Company’s performance as it provides a metric correlated to two primary and key factors of operations at a hotel or group of hotels: occupancy and ADR. RevPAR is also a useful indicator in measuring performance over comparable periods for comparable hotels. References to RevPAR and ADR are presented on a comparable basis and references to RevPAR and ADR are presented on a currency neutral basis (prior periods are reflected using the current period exchange rates), unless otherwise noted. Pro-forma Certain financial measures and other information have been adjusted to reflect the effects of hotels disposed of during the periods presented. When presenting such information, the amounts are identified as “Pro-forma.” Definitions (cont’d) 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 hotel rooms increases or decreases.Average Daily Rate ADR represents rooms revenue divided by total number of room nights sold in a given period. ADR measures average room price attained by a hotel and ADR trends provide useful information concerning the pricing environment and the nature of the customer base of a hotel or group of hotels. ADR is a commonly used performance measure in the hotel industry, and management uses ADR to assess pricing levels that the Company is able to generate by type of customer, as changes in rates have a more pronounced effect on overall revenues and incremental profitability than changes in occupancy, as described above. Revenue per Available Room Revenue per Available Room (“RevPAR”) represents rooms revenue divided by total number of room nights available to guests for a given period. Management considers RevPAR to be a meaningful indicator of the Company’s performance as it provides a metric correlated to two primary and key factors of operations at a hotel or group of hotels: occupancy and ADR. RevPAR is also a useful indicator in measuring performance over comparable periods for comparable hotels.References to RevPAR and ADR are presented on a comparable basis and references to RevPAR and ADR are presented on a currency neutral basis (prior periods are reflected using the current period exchange rates), unless otherwise noted.Pro-forma Certain financial measures and other information have been adjusted to reflect the effects of hotels disposed of during the periods presented. When presenting such information, the amounts are identified as “Pro-forma.”
Analyst Coverage Analyst Coverage Analyst Company Phone Email Shaun Kelley Bank of America (646) 855-100 shaun.kelley@baml.com Anthony Powell Barclays (212) 526-768 anthony.powell@barclays.com Neil Malkin Capital One Securities (571) 633-8191neil.malkin@capitalone.com Smedes Rose Citi Research (212) 816-624 smedes.rose@citi.com Chris Woronka Deutsche Bank (212) 250-9376 chris.woronka@db.com Richard Hightower Evercore ISI (212) 752-0886 rich.hightower@evercoreisi.com Stephen Grambling Goldman Sachs (212) 902-7832 stephen.grambling@gs.com Lukas Hartwich Green Street (949) 640-8780 lhartwich@greenst.com David Katz Jefferies (212) 323-3355 dkatz@jefferies.com Brandt Montour JP Morgan (212) 622-1111 brandt.a.montour@jpmorgan.com Brian Dobso Nomura/Instinet(212) 310-541 brian.dobson@instinet.com Bill Crow Raymond James (727) 567-2594 bill.crow@raymondjames.com Patrick Scholes SunTrust (212) 319-3915 patrick.scholes@suntrust.com Robin Farley UBS (212) 713-2060 robin.farley@ubs.com Jeff Donnell Wells Fargo (617) 603-4262 jeff.donnelly@wellsfargo.com
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