Park Hotels & Resorts Inc. · NYSE:PK
Park Hotels & Resorts — Q3 2018 Earnings Presentation
43 slides from Park Hotels & Resorts's earnings presentation, Nov 1, 2018
Slide 1: Third Quarter 2018 Supplemental Data
Waldorf Astoria Orlando Parc 55 San Francisco, a Hilton Hotel Hilton Hawaiian Village Waikiki Beach Resort September 30, 2018 Third Quarter 2018 Supplemental Data Exhibit 99.2
Slide 2: About Park and Safe Harbor Disclosure
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 54 premiu
Slide 3: Table of Contents
Financial Statements Non-GAAP Financial Measures 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
Slide 4: Financial Statements
Financial Statements Casa Marina, a Waldorf Astoria Resort Hilton Chicago Parc 55 San Francisco – a Hilton Hotel
Slide 5: Condensed Consolidated Balance Sheets
Financial Statements Condensed Consolidated Balance Sheets (unaudited, in millions, except share and per share data)September 30, 2018December 31, 2017ASSETSProperty and equipment, net $7,974 $8,311 Assets held for sale, net — 37 Investments in affiliates 53 84 Goodwill 607 606 Intangibles, net 26 4
Slide 6: Condensed Consolidated Statements of Operations
Financial Statements (cont’d) Condensed Consolidated Statements of Operations Three Months Ended Nine Months Ended(unaudited, in millions, except per share data)September 30,September 30,2018201720182017RevenuesRooms $429 $460 $1,298 $1,361 Food and beverage 144 160 532 552 Ancillary hotel 60 50 168
Slide 7: Non-GAAP Financial Measures
Non-GAAP Financial Measures Juniper Hotel Cupertino, Curio Collection Hilton Boston Logan Airport The Reach, a Waldorf Astoria Resort
Slide 8: EBITDA and Adjusted EBITDA
Non-GAAP Financial Measures EBITDA and Adjusted EBITDA (1)Included in other (loss) gain, net. Three Months EndedNine Months Ended(unaudited, in millions)September 30,September 30,2018201720182017Net income $55 $105 $422 $2,570 Depreciation and amortization expense 69 74 208 217 Interest income (2) (
Slide 9: Comparable Hotel Adjusted EBITDA and Margin
Non-GAAP Financial Measures (cont’d) Comparable Hotel Adjusted EBITDA and Comparable Hotel Adjusted EBITDA Margin Three Months EndedNine Months Ended(unaudited, dollars in millions)September 30,September 30,2018201720182017Adjusted EBITDA $168 $183 $570 $577 Less: Adjusted EBITDA from investments in
Slide 10: NAREIT FFO and Adjusted FFO
NAREIT FFO and Adjusted FFO (1)Included in other (loss) gain, net. (2)The three and nine months ended September 30, 2017 includes the income tax benefit from the derecognition of deferred tax liabilities of $48 million and $2,360 million, respectively, associated with Park’s intent to elect REIT sta
Slide 11: Historical Comparable Hotel Metrics
Historical Comparable Hotel Metrics Non-GAAP Financial Measures (cont’d) The financial information below is for the 44 comparable hotels owned as of September 30, 2018. (1)Trailing Twelve Months (“TTM”). (2)Based on December 31, 2016 foreign exchange rates. Three months ended TTM (1)Full Year(unaudi
Slide 12: Historical Comparable Hotel Adjusted EBITDA – 2018 TTM
Historical Comparable Hotel Adjusted EBITDA – 2018 TTM Non-GAAP Financial Measures (cont’d) 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
Slide 13: Historical Comparable Hotel Revenues – 2018 TTM
Historical Comparable Hotel Revenues – 2018 TTM Non-GAAP Financial Measures (cont’d) TTM Full Year (unaudited, dollars in millions) December 31, March 31, June 30,September 30,September 30,December 31, 201720182018201820182017Total Revenues $686 $668 $731 $652 $2,737 $2,791 Less: Other revenue 17 17
Slide 14: Historical Comparable Hotel Adjusted EBITDA – 2017 TTM
Historical Comparable Hotel Adjusted EBITDA – 2017 TTM Non-GAAP Financial Measures (cont’d) TTM Full Year(unaudited, dollars in millions)December 31, March 31,June 30,September 30, September 30,December 31, 201620172017201720172016Net income $17 $2,350 $115 $105 $2,587 $139 Depreciation and amortiza
Slide 15: Historical Comparable Hotel Revenues – 2017 TTM
Historical Comparable Hotel Revenues – 2017 TTM Non-GAAP Financial Measures (cont’d) TTM Full Year (unaudited, dollars in millions) December 31, March 31, June 30, September 30, September 30, December 31, 201620172017201720172016Total Revenues $670 $684 $733 $688 $2,775 $2,727 Less: Other revenue 6
Slide 16: General and Administrative Expenses
General and Administrative Expenses Non-GAAP Financial Measures (cont’d) (unaudited, in millions) Three Months Ended Nine Months Ended September 30, September 30,2018201720182017Corporate general and administrative expenses $16 $15 $47 $45 Less: Share-based compensation expense 4 3 12 10 Transition
Slide 17: Net Debt and Net Debt to Pro-forma Adjusted EBITDA Ratio
Non-GAAP Financial Measures (cont’d) Net Debt and Net Debt to Pro-forma Adjusted EBITDA Ratio (unaudited, in millions)September 30, 2018December 31, 2017Debt $2,948 $2,961 Add: unamortized deferred financing costs 10 12 "Long-term debt, including current maturities and excluding unamortized deferred
Slide 18: Pro-forma TTM Adjusted EBITDA
Non-GAAP Financial Measures (cont’d) Pro-forma TTM Adjusted EBITDA (1)TTM September 30, 2018 is calculated as year ended December 31, 2017 plus the nine months ended September 30, 2018 less the nine months ended September 30, 2017. (2) Included in other (loss) gain, net. Year EndedNine Months EndedT
Slide 19: Guidance
Guidance Hilton San Francisco Union Square Hilton Waikoloa Village Hilton Chicago
Slide 20: 2018 Guidance and Assumptions
Guidance 2018 Guidance and Assumptions General and administrative expenses are projected to be $44 million, excluding $16 million of non-cash share-based compensation expense and $4 million of transition expense; Fully diluted weighted average shares are expected to be 204.1 million; Includes $8 mil
Slide 21: Guidance: EBITDA and Adjusted EBITDA
Guidance (cont’d) EBITDA and Adjusted EBITDA (1) Excludes deferred tax expense related to a potential sale of ancillary hotel furniture, fixtures, and equipment that may be sold in a like-kind exchange transaction expected to be recognized in the fourth quarter of 2018 as a result of completing Park
Slide 22: Guidance: NAREIT FFO and Adjusted FFO
Guidance (cont’d) NAREIT FFO and Adjusted FFO (1) Excludes deferred tax expense related to a potential sale of ancillary hotel furniture, fixtures, and equipment that may be sold in a like-kind exchange transaction expected to be recognized in the fourth quarter of 2018 as a result of completing Par
Slide 23: Portfolio and Operating Metrics
Portfolio and Operating Metrics Hilton New Orleans Riverside Hilton New Orleans Airport Hilton Santa Barbara Beachfront Resort
Slide 24: Hotel Portfolio as of September 30, 2018
Portfolio and Operating Metrics Hotel Portfolio as of September 30, 2018 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. Hotel Name Rooms Market Meeting Space Ownership Equity Ownership "Debt
Slide 25: Hotel Portfolio as of September 30, 2018 (cont’d)
Portfolio and Operating Metrics (cont’d) Hotel Portfolio as of September 30, 2018 (1)Debt related to unconsolidated joint ventures is presented on a pro-rata basis. Hotel Name Rooms Market Meeting Space Ownership Equity Ownership "Debt(1) (in millions)" Consolidated International Portfolio Hilton Sã
Slide 26: Comparable Hotels by Market and Hotel Type: Q3 2018
Portfolio and Operating Metrics (cont’d) Comparable Hotels By Market and Hotel Type: Q3 2018 vs. Q3 2017 (1) Calculated based on unrounded numbers. (unaudited) Comparable ADR Comparable Occupancy Comparable RevPAR Hotels Rooms 3Q18 3Q17 Change(1) 3Q18 3Q17 Change 3Q18 3Q17 Change(1) Hawaii 1 2,860 $
Slide 27: Comparable Hotels by Market: Q3 2018 EBITDA and Revenue
Portfolio and Operating Metrics (cont’d) (1) Calculated based on unrounded numbers. Comparable Hotels By Market and Hotel Type: Q3 2018 vs. Q3 2017 (unaudited, dollars in millions) Comparable Hotel Adjusted EBITDA Comparable Hotel Revenue "Comparable Hotel Adjusted EBITDA Margin" Hotels Rooms 3Q18 3
Slide 28: Comparable Hotels by Market: Q3 YTD 2018
Portfolio and Operating Metrics (cont’d) (1) Calculated based on unrounded numbers. Comparable Hotels By Market and Hotel Type: Q3 YTD 2018 vs. Q3 YTD 2017 (unaudited) Comparable ADR Comparable Occupancy Comparable RevPAR Hotels Rooms 2018 2017 Change(1) 2018 2017 Change 2018 2017 Change(1) Hawaii 1
Slide 29: Comparable Hotels by Market: Q3 YTD 2018 EBITDA and Revenue
Portfolio and Operating Metrics (cont’d) (1) Calculated based on unrounded numbers. Comparable Hotels By Market and Hotel Type: Q3 YTD 2018 vs. Q3 YTD 2017 (unaudited, dollars in millions) Comparable Hotel Adjusted EBITDA Comparable Hotel Revenue "Comparable Hotel Adjusted EBITDA Margin" Hotels Room
Slide 30: Top Assets: Q3 2018 vs. Q3 2017
Portfolio and Operating Metrics (cont’d) Top 10 Assets: Q3 2018 vs. Q3 2017 (1)Calculated based on unrounded numbers. (2)Classified as a non-comparable hotel. (3)Includes non-comparable hotels due to disruptions in operations (Caribe Hilton) or operations from hotels disposed of in 2018. (unaudited)
Slide 31: Top Assets: Q3 2018 EBITDA and Revenue
Portfolio and Operating Metrics (cont’d) Top 10 Assets: Q3 2018 vs. Q3 2017 (1)Calculated based on unrounded numbers. (2)Classified as a non-comparable hotel. (3)Includes non-comparable hotels due to disruptions in operations (Caribe Hilton) or operations from hotels disposed of in 2018. (unaudited,
Slide 32: Top Assets: Q3 YTD 2018 vs. Q3 YTD 2017
Portfolio and Operating Metrics (cont’d) Top 10 Assets: Q3 YTD 2018 vs. Q3 YTD 2017 (1)Calculated based on unrounded numbers. (2)Classified as a non-comparable hotel. (3)Includes non-comparable hotels due to disruptions in operations (Caribe Hilton) or operations from hotels disposed of in 2018. (un
Slide 33: Top Assets: Q3 YTD 2018 EBITDA and Revenue
Portfolio and Operating Metrics (cont’d) Top 10 Assets: Q3 YTD 2018 vs. Q3 YTD 2017 (1)Calculated based on unrounded numbers. (2)Classified as a non-comparable hotel. (3)Includes non-comparable hotels due to disruptions in operations (Caribe Hilton) or operations from hotels disposed of in 2018. (un
Slide 34: Acquisitions & Dispositions
Acquisitions & Dispositions Hilton Sao Paulo Morumbi Caribe Hilton Hilton Miami Airport Blue Lagoon
Slide 35: Acquisitions and Dispositions
Acquisitions and Dispositions Dispositions (1) Hotels were sold as a portfolio. (2) The unconsolidated hotel was sold for a total sales price of approximately $350 million, of which $140 million represents Park’s pro rata share. Hotel Location Month Sold Room Count Sales Price Hilton Rotterdam Rotte
Slide 36: Debt Summary
Debt Summary Casa Marina, a Waldorf Astoria Resort Hilton Orlando Bonnet Creek New York Hilton Midtown
Slide 37: Fixed and Variable Rate Debt
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 $233 million of Park’s share of debt of its unconsolidated joint ventures. (unaudited, dol
Slide 38: Definitions
Definitions Hilton Orlando Bonnet Creek Hilton Hawaiian Village Waikiki Beach Resort New York Hilton Midtown
Slide 39: Definitions: EBITDA, Adjusted EBITDA, Hotel Adjusted EBITDA
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 t
Slide 40: Definitions (cont’d): NAREIT FFO and Adjusted FFO
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 n
Slide 41: Definitions (cont’d): Net Debt
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 sh
Slide 42: Definitions (cont’d): Occupancy, ADR, RevPAR
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
Slide 43: Analyst Coverage
Analyst Coverage Analyst Company Phone Email Shaun Kelley Bank of America (646) 855-1005 shaun.kelley@baml.com Anthony Powell Barclays (212) 526-8768 anthony.powell@barclays.com Smedes Rose Citi Research (212) 816-6243 smedes.rose@citi.com Chris Woronka Deutsche Bank (212) 250-9376 chris.woronka@db.
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