Park Hotels & Resorts Inc. · NYSE:PK
Park Hotels & Resorts — Nareit 2020
29 slides from Park Hotels & Resorts's conference presentation, June 2020
Slide 1: Nareit Presentation
Nareit Presentation June 2020 Waldorf Astoria Orlando Hilton Le Chicago Méridien San Francisco Hilton Hawaiian Village Waikiki Beach Resort
Slide 2: Mission
Mission To be the preeminent lodging REIT, focused on consistently delivering superior, risk- adjusted returns for stockholders through active asset management and a thoughtful external growth strategy, while maintaining a strong and flexible balance sheet 2| 3
Slide 3: Pillars of our Corporate Strategy
Pillars of our Corporate Strategy Aggressive Asset Management ▪ Continually improve property level operating performance ▪ Consistently implement revenue management initiatives to optimize market pricing and segment mix Prudent Capital Allocation ▪ Allocate capital effectively by leveraging scale, l
Slide 4: Park at a Glance
Park at a Glance Park Spin-off from Chesapeake Acquisition in Park Today: Hilton in January 2017 September 2019 2nd Largest Lodging REIT 67 Branded Assets $2.5B Acquisition 60 Branded Assets 18 High Quality Assets in 35k+ Rooms High Growth Markets 33k+ Rooms Advanced Brand, Operator & 100% Hilton Br
Slide 5: Park Investment Highlights
Park Investment Highlights Iconic Portfolio of Irreplaceable Assets Reshaped / Transformed Portfolio with 24 Non-Core Assets Sold for $1.2B (Including 14 International Assets) CHSP Acquisition Provided Brand, Operator & Geographic Diversification Solid Balance Sheet with Healthy Liquidity Significan
Slide 6: Park Overview
Park Overview Since Park’s spin from Hilton in January 2017, Park has been guided by its Corporate Strategy pillars to achieve results: significant progress in reshaping and improving portfolio quality over the last 3+ years 3-Year Track Record of Success ✓ Outperformed peers in top-line growth and
Slide 7: Iconic Portfolio: Urban and Resort Destinations
Iconic Portfolio: Urban and Resort Destinations Hilton Hawaiian Village Waikiki Beach Resort Hilton San Francisco Union Square Royal Palm South Beach Miami Hilton Denver City Center Le Meridien San Francisco Waldorf Astoria Orlando JW Marriott SF Union Square Hilton New Orleans Riverside Hilton Chic
Slide 8: Iconic Portfolio of High-Quality Urban & Resort Destinations
Iconic Portfolio of High-Quality Urban & Resort Destinations Pro-forma Pro-forma Pro-forma Pro-forma Pro-forma Comparable Comparable Comparable Comparable Hotel Comparable Hotel Room RevPAR Total RevPAR Hotel Adj. EBITDA Adj. EBITDA / Key Adj. EBITDA Margin $186 $284 $879M $31k 29.5% Hilton Waikoloa
Slide 9: High Quality Portfolio: Top 30 Portfolio Best in Class
High Quality Portfolio: Top 30 Portfolio Best in Class 2019 Pro-forma Hotel Adj. EBITDA(1) Breakdown (1) PK Owns One of the Highest Quality Portfolios • Core 30 (89% of Pro-forma Comparable Hotel Adj. EBITDA): All Other 11% ✓ RevPAR of $204 is $20 higher than peers(1) ✓ Margin of 30.7% is 20bps high
Slide 10: Diversification: Park Hotel Portfolio
Diversification: Park Hotel Portfolio Legend Circle Size Based on Hotel Adjusted EBITDA $200M+ $100M+ $50M+ $25M+ $10M+ $5–10M <$5M Puerto Rico 30% 25% 25% Park’s Geographic Exposure (by % 2019 Pro-forma Hotel Adjusted EBITDA) 20% 18% 15% 10% 10% 10% 6% 6% 5% 5% 5% 3% 3% 3% 2% 2% 2% 1% 0% Hawaii San
Slide 11: Park's Active Capital Recycling
Park’s Active Capital Recycling Hotel Adj. Since Hotel(1) Adj. Hotels Rooms RevPAR EBITDA Spin-Off EBITDA Margin Hotels Acquired(1) 18 5.9K $181M $193 32.3% Hotels Disposed(2) 24 6.5K $97M $119 25.8% 2018: • 13 hotels sold for $519M, including 10 international assets 2019: • 8 hotels(3) sold for $49
Slide 12: Diversification: Brand, Operator and Asset Type
Diversification: Brand, Operator and Asset Type Chesapeake acquisition advanced Park’s brand and operator strategy, providing exposure to Marriott and Hyatt Hotel Type Mix Diversified Operator Pool(1) Expanded Brand Exposure HEI Aimbridge Suburban Self-Operated Hyatt IHG Hyatt 3% 2% 8% 2% 4% 1
Slide 13: Size & Scale: Nearly 3x the Size of the Avg. Lodging REIT
Size & Scale: Nearly 3x the Size of the Avg. Lodging REIT(1) Park solidified its position as the 2nd largest publicly traded Lodging REIT GROSS ASSET VALUE(2): PK vs. PEERS $20.6B Full Service Mixed & Limited Service $13.4B $7.0B $7.2B $5.8B $6.0B $6.0B $5.2B $4.1B $4.4B $2.7B $2.7B $1.7B $2.1B CLDT
Slide 14: Portfolio Well Insulated from New Supply
Portfolio Well Insulated from New Supply Supply Growth Exposure for Lodging REITs(1) With outsized exposure to Oahu and REIT Supply Growth Exposure to STR Top 25 Markets 4.0% San Francisco, Park anticipates 3.6% 3.5% 2.3% average annual supply 3.0% 2.8% Peer Avg. 2.7% 2.7% growth through 2021, or 40
Slide 15: Strong, Flexible Balance Sheet with Ample Liquidity
5 Strong, Flexible Balance Sheet with Ample Liquidity Debt Mix(1) Liquidity Profile • Park has approximately $1.8B of liquidity (including cash, cash equivalents and available borrowings under our revolver) after paying its previously declared dividend for the first quarter of Unsecured 39% 2020 of
Slide 16: COVID-19
COVID-19 Hilton Waikoloa Chicago Village 16 |
Slide 17: COVID-19: Park Response
COVID-19: Park Response Park has proactively shifted its priorities and actions to focus on operational & corporate cost reductions and increased liquidity, resulting in $1.8B, or 25 months, of liquidity under extreme cash burn scenario Operational Response: Cost Elimination / CapEx Deferral / G&A R
Slide 18: COVID-19: Cash Burn Analysis
COVID-19: Cash Burn Analysis Park’s Monthly Burn Ratio is Estimated to be Approximately $73 Million Estimated Monthly Hotel Operating Expenditures: Along with its operating partners, Park developed projected hotel working capital needs assuming suspensions for all hotels, resulting in an average agg
Slide 19: COVID-19: Park Operational Snapshot
COVID-19: Park Operational Snapshot Park portfolio currently operating at 15% capacity(1) Leisure Expected to Pave Way to Recovery Consolidated Hotels As states ease stay-at-home restrictions, drive-to leisure Number of Total Rooms Rooms % of Rooms markets expected to see first return of demand Stat
Slide 20: Amendment Overview and Covenant Relief
Amendment Overview and Covenant Relief Park Successfully Amended its Credit and Term Loan Facilities Amendment Overview Suspended Through March 31, 2021 Covenant Metric Leverage Ratio < 7.25x Exercise of Extension Options • revolver maturity extended to December 2021 EBITDA / Fixed Charges > 1.50x C
Slide 21: Experienced Management Team
Experienced Management Team Chairman and CEO Thomas J. Baltimore, Jr. Executive Management EVP, Design & EVP, CFO EVP, CIO EVP, HR Construction Sean M. Dell’Orto Tom Morey Jill Olander Carl Mayfield Senior Management SVP, Deputy SVP, Investments SVP, FP&A SVP, CAO SVP, Strategy SVP, Tax General Coun
Slide 22: Strong Corporate Governance and ESG Focus
Strong Corporate Governance and ESG Focus Public Disclosure of Materials FY 2018 Performance Highlights(1): • Park issued its first Annual Corporate Responsibility Report in Jan ‘19; the second Hotel Portfolio: report was published Sep ‘19 9.79 18 100% • Park’s “Responsibility” webpage launched Jan
Slide 23: Appendix
Appendix Parc 55 San Francisco - a Hilton Hotel 23 |
Slide 24: Core 30 Overview
Core 30 Overview Asset Market Location Type Rooms (1) RevPAR Total RevPAR Hotel Adj. EBITDA 1. Hilton Hawaiian Village Waikiki Beach Resort Hawaii Resort 2,860 $248 $398 $163M 2. Hilton San Francisco Union Square Northern CA Urban 1,921 249 351 72M 3. New York Hilton Midtown New York Urban 1,878 254
Slide 25: Non-GAAP Reconciliations
Non-GAAP Reconciliations Net Income to Core 30 Pro-forma Hotel Adjusted EBITDA Full Year (unaudited, in millions) December 31, 2019 Net income $ 316 Depreciation and amortization expense 264 Interest income (6) Interest expense 140 Income tax expense 35 Interest expense, income tax and depreciation
Slide 26: Non-GAAP Reconciliations (Cont'd)
Non-GAAP Reconciliations (Cont’d) Pro-forma Hotel Revenues Full Year December 31, 2019 Total Revenues 2,844 Less: Other revenue (77) Total Hotel Revenues 2,767 Add: Revenues from hotels acquired (1) 406 Less: Revenues from hotels disposed of (143) (1) Pro-forma Hotel Revenues 3,030 Less: Revenue fro
Slide 27: Definitions
Definitions EBITDA, Adjusted EBITDA, Pro-forma 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,
Slide 28: Definitions (Cont'd)
Definitions (Cont’d) Pro-forma Comparable Hotels The Company presents certain data for its consolidated hotels on a pro-forma comparable hotel basis as supplemental information for investors: Pro-forma Comparable RevPAR, Pro-forma Comparable Occupancy, Pro-forma Comparable ADR, Pro-forma Comparable
Slide 29: About Park and Safe Harbor Disclosure
About Park and Safe Harbor Disclosure About Park Hotels & Resorts Inc. Park Hotels & Resorts Inc. (NYSE: PK) is the second largest publicly traded lodging real estate investment trust with a diverse portfolio of market-leading hotels and resorts with significant underlying real estate value. Park’s