Park Hotels & Resorts Inc. · NYSE:PK
Park Hotels & Resorts — Q4 2018 Earnings Presentation
43 slides from Park Hotels & Resorts's earnings presentation, Feb 27, 2019
Slide 1: Fourth Quarter and Year End 2018 Supplemental Data
Waldorf Astoria Orlando Parc 55 San Francisco, a Hilton Hotel Hilton Hawaiian Village Waikiki Beach Resort December 31, 2018 Fourth Quarter and Year End 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 52 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 Table of Contents Financial Statements 4 Non-G
Slide 4: Financial Statements
Financial Statements Casa Marina, a Waldorf Astoria Resort Hilton Chicago Parc 55 San Francisco – a Hilton Hotel Financial Statements Hilton Chicago Parc 55 San Francisco – a Hilton Hotel Casa Marina, a Waldorf Astoria Resort PARK HOTELS & RESORTS 4
Slide 5: Consolidated Balance Sheets
Financial Statements Consolidated Balance Sheets Financial Statements Consolidated Balance Sheets (in millions, except share and per share data) December 31, 2018 December 31, 2017 ASSETS Property and equipment, net $ 7,975 $ 8,311 Assets held for sale, net — 37 Investments in affiliates 50 84 Goodw
Slide 6: Consolidated Statements of Operations
Financial Statements (continued) Consolidated Statements of Operations Financial Statements (continued) Consolidated Statements of Operations Three Months Ended Year Ended (in millions, except per share data) December 31, December 31, 2018 2017 2018 2017 Revenues Rooms $ 418 $ 433 $ 1,716 $ 1,794 Fo
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 Non-GAAP Financial Measures Hilton Boston Logan Airport The Reach, a Waldorf Astoria Resort Juniper Hotel Cupertino, Curio Collection PARK HOTELS & RESORTS 7
Slide 8: EBITDA and Adjusted EBITDA
Non-GAAP Financial Measures EBITDA and Adjusted EBITDA (1)Included in other (loss) gain, net in the consolidated statement of operations. (2)For 2017, includes $18 million of distributions received from investments in affiliates in excess of the investment balance that were included within equity in
Slide 9: Comparable Hotel Adjusted EBITDA and Margin
Non-GAAP Financial Measures (continued) Comparable Hotel Adjusted EBITDA and Comparable Hotel Adjusted EBITDA Margin Non-GAAP Financial Measures (continued) Comparable Hotel Adjusted EBITDA and Comparable Hotel Adjusted EBITDA Margin Three Months Ended Year Ended (unaudited, dollars in millions) Dec
Slide 10: NAREIT FFO and Adjusted FFO
NAREIT FFO and Adjusted FFO (1)Included in other (loss) gain, net in the consolidated statement of operations. (2)For 2018, includes $13 million of income tax expense, primarily attributable to an additional built-in gain deferred tax liability as a result of the enactment of the Tax Cuts and Jobs A
Slide 11: Historical Comparable Hotel Metrics
Historical Comparable Hotel Metrics Non-GAAP Financial Measures (continued) The financial information below is for the 44 comparable hotels owned as of December 31, 2018. (1)Based on December 31, 2016 foreign exchange rates. Three months ended TTM (1)Full Year(unaudited)September 30,December 31, Mar
Slide 12: Historical Comparable Hotel Adjusted EBITDA – 2018
Historical Comparable Hotel Adjusted EBITDA – 2018 Non-GAAP Financial Measures (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 &
Slide 13: Historical Comparable Hotel Revenues – 2018
Historical Comparable Hotel Revenues – 2018 Non-GAAP Financial Measures (continued) The financial information below is for the 44 comparable hotels owned as of December 31, 2018. (1) Includes revenues from Park's non-comparable hotels and rental revenues from office space and antenna rent leases loc
Slide 14: Historical Comparable Hotel Adjusted EBITDA – 2017
Historical Comparable Hotel Adjusted EBITDA – 2017 Non-GAAP Financial Measures (continued) The financial information below is for the 44 comparable hotels owned as of December 31, 2018. (1)Includes adjustments for incremental fees based on the terms of the post spin-off management agreements. (2) In
Slide 15: Historical Comparable Hotel Revenues – 2017
Historical Comparable Hotel Revenues – 2017 Non-GAAP Financial Measures (continued) The financial information below is for the 44 comparable hotels owned as of December 31, 2018. (1) Includes revenues from Park's non-comparable hotels and rental revenues from office space and antenna rent leases loc
Slide 16: General and Administrative Expenses
General and Administrative Expenses Non-GAAP Financial Measures (continued) Non-GAAP Financial Measures (continued) General and Administrative Expenses (unaudited, in millions) Three Months Ended Year Ended December 31, December 31, 2018 2017 2018 2017 Corporate general and administrative expenses $
Slide 17: Net Debt and Net Debt to Pro-forma Adjusted EBITDA Ratio
Non-GAAP Financial Measures (continued) Net Debt and Net Debt to Pro-forma Adjusted EBITDA Ratio (1) See slide 18 for Pro-forma Adjusted EBITDA at December 31, 2018. Pro-forma Adjusted EBITDA excludes results from the 13 hotels disposed of in 2018. Non-GAAP Financial Measures (continued) Net Debt an
Slide 18: Pro-forma Adjusted EBITDA
Non-GAAP Financial Measures (continued) Pro-forma Adjusted EBITDA . (1) Included in other (loss) gain, net in the consolidated statement of operations. Non-GAAP Financial Measures (continued) Pro-forma Adjusted EBITDA Year Ended (unaudited, in millions) December 31, 2018 2017 Net income $ 477 $ 2,63
Slide 19: Guidance
Guidance Hilton San Francisco Union Square Hilton Waikoloa Village Hilton Chicago Guidance Hilton Waikoloa Village Hilton Chicago Hilton San Francisco Union Square PARK HOTELS & RESORTS 19
Slide 20: 2019 Guidance and Assumptions
Guidance 2019 Guidance and Assumptions Hilton Waikoloa Village will be included in Park’s comparable hotels as its room count is expected to remain consistent throughout 2019 as compared to 2018; General and administrative expenses are projected to be $44 million, excluding $15 million of non-cash s
Slide 21: EBITDA and Adjusted EBITDA Guidance
Guidance (continued) EBITDA and Adjusted EBITDA Guidance (continued) EBITDA and Adjusted EBITDA Year Ending (unaudited, in millions) December 31, 2019 Low Case High Case Net income $ 294 $ 323 Depreciation and amortization expense 278 278 Interest income (8) (8) Interest expense 130 130 Income tax e
Slide 22: NAREIT FFO and Adjusted FFO Guidance
Guidance (continued) NAREIT FFO and Adjusted FFO (1) Per share amounts are calculated based on unrounded numbers. Guidance (continued) NAREIT FFO and Adjusted FFO Year Ending (unaudited, in millions except per share data) December 31, 2019 Low Case High Case Net income attributable to stockholders $
Slide 23: Portfolio and Operating Metrics
Portfolio and Operating Metrics Hilton New Orleans Riverside Hilton New Orleans Airport Hilton Santa Barbara Beachfront Resort Portfolio and Operating Metrics Hilton New Orleans Riverside Hilton New Orleans Airport Hilton Santa Barbara Beachfront Resort PARK HOTELS & RESORTS 23
Slide 24: Hotel Portfolio as of February 27, 2019
Portfolio and Operating Metrics Hotel Portfolio as of February 27, 2019(1) Excludes 860-room Hilton Chicago O’Hare Airport, where the ground lease expired in December 2018 and the 563-room Point Hilton Squaw Peak Resort sold in February 2019. Single $725 million CMBS loan secured by Hilton San Franc
Slide 25: Hotel Portfolio as of February 27, 2019 (continued)
Portfolio and Operating Metrics (continued) Hotel Portfolio as of February 27, 2019(1) (1)Excludes 860-room Hilton Chicago O’Hare Airport, where the ground lease expired in December 2018 and the 563-room Point Hilton Squaw Peak Resort sold in February 2019. (2) Debt related to unconsolidated joint v
Slide 26: Comparable Hotels By Market: Q4 2018 vs. Q4 2017
Portfolio and Operating Metrics (continued) Comparable Hotels By Market: Q4 2018 vs. Q4 2017 (1) Calculated based on unrounded numbers. Portfolio and Operating Metrics (continued) Comparable Hotels By Market: Q4 2018 vs. Q4 2017 (unaudited) Comparable ADR Comparable Occupancy Comparable RevPAR Hotel
Slide 27: Comparable Hotels By Market: Q4 2018 vs. Q4 2017 (EBITDA)
Portfolio and Operating Metrics (continued) (1) Calculated based on unrounded numbers. Comparable Hotels By Market: Q4 2018 vs. Q4 2017 Portfolio and Operating Metrics (continued) Comparable Hotels By Market: Q4 2018 vs. Q4 2017 (unaudited, dollars in millions) Comparable Hotel Adjusted EBITDA Compa
Slide 28: Comparable Hotels By Market: Full Year 2018 vs. 2017
Portfolio and Operating Metrics (continued) (1) Calculated based on unrounded numbers. Comparable Hotels By Market: Full Year 2018 vs. Full Year 2017 Portfolio and Operating Metrics (continued) Comparable Hotels By Market: Full Year 2018 vs. Full Year 2017 (unaudited) Comparable ADR Comparable Occup
Slide 29: Comparable Hotels By Market: Full Year 2018 vs. 2017 (EBITDA)
Portfolio and Operating Metrics (continued) (1) Calculated based on unrounded numbers. Comparable Hotels By Market: Full Year 2018 vs. Full Year 2017 Portfolio and Operating Metrics (continued) Comparable Hotels By Market: Full Year 2018 vs. Full Year 2017 Comparable Hotel Adjusted Comparable Hotel
Slide 30: Top 10 Assets: Q4 2018 vs. Q4 2017
Portfolio and Operating Metrics (continued) Top 10 Assets: Q4 2018 vs. Q4 2017 (1)Calculated based on unrounded numbers. (2)Classified as a non-comparable hotel in 2018. (3)Excludes Hilton Waikoloa Village, but includes the Caribe Hilton and assets disposed of in 2018. (4)Percentage change is not me
Slide 31: Top 10 Assets: Q4 2018 vs. Q4 2017 (EBITDA)
Portfolio and Operating Metrics (continued) Top 10 Assets: Q4 2018 vs. Q4 2017 (1)Calculated based on unrounded numbers. (2)Classified as a non-comparable hotel in 2018. (3) Excludes Hilton Waikoloa Village, but includes the Caribe Hilton and assets disposed of in 2018. Portfolio and Operating Metri
Slide 32: Top Assets: Full Year 2018 vs. Full Year 2017
Portfolio and Operating Metrics (continued) Top 10 Assets: Full Year 2018 vs. Full Year 2017 (1)Calculated based on unrounded numbers. (2)Classified as a non-comparable hotel in 2018. (3)Excludes Hilton Waikoloa Village, but includes the Caribe Hilton and assets disposed of in 2018. (unaudited) ADR
Slide 33: Top 10 Assets: Full Year 2018 vs. 2017 (EBITDA)
Portfolio and Operating Metrics (continued) Top 10 Assets: Full Year 2018 vs. Full Year 2017 (1)Calculated based on unrounded numbers. (2)Classified as a non-comparable hotel in 2018. (3)Excludes Hilton Waikoloa Village, but includes the Caribe Hilton and assets disposed of in 2018. Portfolio and Op
Slide 34: Acquisitions & Dispositions
Acquisitions & Dispositions Hilton Sao Paulo Morumbi Caribe Hilton Hilton Miami Airport Blue Lagoon Acquisitions & Dispositions Caribe Hilton Hilton Miami Airport Blue Lagoon Hilton Sao Paulo Morumbi PARK HOTELS & RESORTS 34
Slide 35: 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. Acquisitions and Dispositions Dispositions Hotel Location Month Sold Ro
Slide 36: Debt Summary
Debt Summary Casa Marina, a Waldorf Astoria Resort Hilton Orlando Bonnet Creek New York Hilton Midtown Debt Summary Hilton Orlando Bonnet Creek New York Hilton Midtown Casa Marina, a Waldorf Astoria Resort PARK HOTELS & RESORTS 36
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. Debt Summary Fi
Slide 38: Definitions
Definitions Hilton Orlando Bonnet Creek Hilton Hawaiian Village Waikiki Beach Resort New York Hilton Midtown Definitions New York Hilton Midtown Hilton Hawaiian Village Waikiki Beach Resort Hilton Orlando Bonnet Creek PARK HOTELS & RESORTS 38
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 Coverage AnalystCompanyPhoneEmail Shaun KelleyBank of America(646)855-1005shaun.kelley@baml.com Anthony PowellBarclays(212)526-8768anthony.powell@barclays.com Smedes RoseCiti Research(212)816-6243smedes.rose@citi.com Chris WoronkaDeutsche Bank(212)250-9376chris.woronka@db.co
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