Park Hotels & Resorts Inc. · NYSE:PK
Park Hotels & Resorts — Investor Presentation (March 2021)
28 slides from Park Hotels & Resorts's investor presentation, March 2021
Slide 1: Investor Presentation
Investor Presentation MARCH 2021
Slide 2: Park Hotels & Resorts: Mission, Investment Strategy, Guiding Principles
Park Hotels & Resorts Mission Investment Strategy Guiding Principles To be the preeminent Upper-Upscale & Luxury Aggressive lodging REIT, focused on Full-Service Asset Management consistently delivering superior, risk -adjusted Premiere Urban and Resort Prudent returns for stockholders through activ
Slide 3: Park at a Glance
Park at a Glance Company Overview Currently the second largest publicly traded lodging REIT, Park owns a portfolio of 60 premium-branded hotels and resorts with over 33,000 rooms primarily located in prime city center and resort locations. Top Hyatt Regency Boston markets include Honolulu, San Franc
Slide 4: 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 5: Park Portfolio Post-Spin Transformation
Park Portfolio Post-Spin Transformation Since Park’s spin-off from Hilton in January 2017, Park has made significant progress in improving the quality and profitability of the company over the last 3+ years ✓ Sold or disposed of 25(1) lower quality, non-core legacy assets, including 14 international
Slide 6: Focus for 2021
Focus for 2021 Park remains laser-focused on the following priorities as it navigates through the pandemic and the expected eventual lodging industry recovery ▪ Re-open hotels safely and when market conditions and economics warrant 1 OPEN HOTELS ▪ 50 of 60 hotels currently open; remaining hotels exp
Slide 7: COVID-19 Update
COVID-19 Update By January 2021, Park had 50 of 60 hotels open with average occupancy of 30% 42% 42% 39% 0.4 34% 60 32% 30% 30% 29% 0.3 49 50 50 20 20% 46 47 (1) 44 0.2 14% Number of Hotels 42 17 17 17 17 17 16 0.1 13 32 16 25 14 10 12 13 13 22 10 10 0 10 12 11 27 8 -0.1 4 3 19 20 20 20 20 16 18 9 8
Slide 8: Investment Highlights
Investment Highlights High Quality Portfolio Trading at a Discount; Pent Up Leisure Demand to Drive Performance Iconic Portfolio of Irreplaceable Assets Trading at a Significant Discount Outsized Exposure to Attractive Leisure Markets Opportunity to Right-Size Hotel Operating Model Embedded Opportun
Slide 9: Iconic Portfolio: Top Assets Best in Class
Iconic Portfolio: Top 30 Assets Best in Class 2019 Pro-forma Hotel Adj. EBITDA Breakdown PK Owns One of the Highest Quality Portfolios (1) • Core 30 (89% of Pro-forma Comparable Hotel Adj. EBITDA): All Other ✓ RevPAR of $204 is $20 higher than peers(1) 11% ✓ Margin of 30.7% is 20bps higher than peer
Slide 10: Iconic Portfolio: Steep Discount to Replacement Cost
Iconic Portfolio: Steep Discount to Replacement Cost Park currently trades(1) at a 52% discount to replacement cost(2) Meeting Space Replacement Rooms (sq. ft.) Cost ($/key) $16.5B Core 30 21,495 1.8M $19.7B ($769k/Key) $19.7B $3.2B Total Portfolio(3) 30,119 2.3M ($654k/Key) Core 30 52% Discount to
Slide 11: Leisure Focus to Drive Performance
Leisure Focus to Drive Performance Leisure accounts for 35% of total room revenue, while 61%(1) of hotels are either drive-to/fly-to leisure focused ▪ Drive-to-Leisure focused hotels continue to witness solid improvements in occupancy, increasing to 49% in mid-February(2) from 31% in early January.
Slide 12: Leisure Focus to Drive Performance: YTD Highlights
Leisure Focus to Drive Performance Anticipating strong recovery across several leisure focused markets: Hawaii, Key West & Miami Hawaii Key West Miami • Key West remains our strongest • Both of Park’s Miami-area hotels are YTD Highlights • Occupancy continues to build in Hawaii, up 1,500bps from the
Slide 13: Right-Sizing Hotel Operating Model
Right-Sizing Hotel Operating Model Unique opportunity to enhance the hotel operating model which should lead to improved operating margins ✓ Permanent reduction of full-time, hotel-level staffing resulting in $70M annual savings ✓ Reductions in above-property cost allocations; increased productivity
Slide 14: Embedded Opportunities to Potentially Enhance Value
Embedded Opportunities to Potentially Enhance Value Nearly half of Park’s Core 30 portfolio Rebrand/Reposition Expand Alt. Use possesses potential value enhancement Hilton Hawaiian Village opportunities which further promote the portfolio’s inherent real estate value Hilton Waikoloa Village Hilton N
Slide 15: Value Enhancement Case Studies
Value Enhancement Case Studies Rebrand / Reposition Hilton Santa Barbara: Re-branded to Hilton from DoubleTree ▪ Transient revenues increased 19% from 2017 to 2019 on strength of more upscale brand and transformational renovation ▪ Improved EBITDA from $16.6M in 2017 to $22.2M in 2019, a 15.4% CAGR
Slide 16: Strong and Flexible Balance Sheet
Strong and Flexible Balance Sheet Park has raised $1.4B of corporate debt since May with proceeds used to paydown near-term maturities, boost liquidity and enhance debt metrics Park Total Capitalization Debt Metrics: 2Q20 vs. 4Q20 2Q20 4Q20 % of Debt Maturing through '22(1) 28% 2% % of Fixed Rate De
Slide 17: Balance Sheet: Ample Liquidity
Balance Sheet: Ample Liquidity Over $1.4B of liquidity available, or 33 months of liquidity runway Current Liquidity: $1.4B Burn Rate and Liquidity Runway: 33 months $1,800 $1,593 $1,608 Q3 2020 Q4 2020 $1,600 $1,425 $1,346 $1,400 $1,304 Effective Burn Rate $50 million $42 million $1,200 $ in millio
Slide 18: Experienced Management Team with Track Record of Success
Experienced Management Team with Track Record of Success Chairman and CEO Thomas J. Baltimore, Jr. Executive Management EVP, Design & SVP, EVP, CFO EVP, CIO EVP, HR Construction General Counsel Sean M. Dell’Orto Tom Morey Jill Olander Carl Mayfield Nancy Vu Senior Management SVP, Investments SVP, FP
Slide 19: Strong Corporate Governance and ESG Focus
Strong Corporate Governance and ESG Focus 2020 ESG Highlights Named by Newsweek to Established Park’s America’s Most Responsible Companies Diversity and Inclusion list 2020 & 2021 Steering Committee Issued third annual Participated Ranked as Signatory of Corporate Responsibility in the GRESB A AHLA’
Slide 20: Appendix
Appendix The Reach Key West, Curio Collection by Hilton
Slide 21: Amendment Overview and Covenant Relief
Amendment Overview and Covenant Relief Park Successfully Amended its Credit and Term Loan Facilities Amendment Overview Covenant Metric Modification 8.50x for Q1/Q2 2022 Upsized and Extended Revolver Net Leverage Ratio < 7.25x 8.00x for Q3/Q4 2022 • $901 million of Revolver commitments extended two
Slide 22: Non-GAAP Reconciliations
Non-GAAP Reconciliations Pro-forma Core 30 and Pro-forma Comparable Hotel Revenues Full Year Full Year (unaudited, in millions) December 31, December 31, 2016 2019 Total Revenues $ 2,727 $ 2,844 Less: Other revenue (13) (77) Add: Revenues from hotels acquired (1) — 406 Less: Revenues from hotels dis
Slide 23: Non-GAAP Reconciliations (Cont'd)
Non-GAAP Reconciliations (Cont’d) Net Income to Pro-forma Core 30 and Pro-forma Comparable Hotel Adjusted EBITDA Full Year Full Year (unaudited, in millions) December 31, December 31, 2016 2019 Net income $ 139 $ 316 Depreciation and amortization expense 300 264 Interest income (2) (6) Interest expe
Slide 24: Non-GAAP Reconciliations (Cont'd)
Non-GAAP Reconciliations (Cont’d) Net Debt and Net Debt to Pro-forma Adjusted EBITDA Ratio (unaudited, in millions) December 31, 2020 December 31, 2019 Debt $ 5,121 $ 3,871 Add: unamortized deferred financing costs and discount 38 18 Less: unamortized premium (3) (3) Long-term debt, including curren
Slide 25: Definitions
Definitions EBITDA, Adjusted EBITDA, Pro-forma Adjusted EBITDA, Hotel Adjusted EBITDA and Hotel Adjusted EBITDA Margin Earnings (loss) before interest expense, taxes and depreciation and amortization (“EBITDA”), presented herein, reflects net income (loss) excluding depreciation and amortization, in
Slide 26: Definitions (Cont'd)
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 27: Definitions (Cont'd)
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. Rooms nights available to guests have not been adjusted for suspended or reduced operations at certain hotels as a result of CO
Slide 28: 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
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