Park Hotels & Resorts(US:PK)2024-10-30 20:02Company Overview - Park Hotels & Resorts Inc. has interests in 41 hotels with over 25,000 rooms, of which over 86% are luxury and upper upscale[74]. Financial Performance - Net income for the three months ended September 30, 2024, was $54 million, compared to a loss of $90 million in the same period of 2023[99]. - Adjusted EBITDA for the three months ended September 30, 2024, was $168 million, a decrease from $173 million in the same period of 2023[94]. - Nareit FFO attributable to stockholders for the three months ended September 30, 2024, was $82 million, compared to $91 million in the same period of 2023[99]. - Rooms revenue for the three months ended September 30, 2024, was $403 million, down from $432 million in the same period of 2023, reflecting a decrease of $29 million[103]. - Total hotel expenses for the three months ended September 30, 2024, were $468 million, compared to $493 million in the same period of 2023, indicating a reduction of $25 million[103]. - Adjusted FFO attributable to stockholders for the three months ended September 30, 2024, was $102 million, compared to $108 million in the same period of 2023[99]. - Interest expense associated with hotels in receivership for the three months ended September 30, 2024, was $15 million, compared to $6 million in the same period of 2023[99]. - Depreciation and amortization expense for the three months ended September 30, 2024, was $63 million, consistent with the same period in 2023[99]. - Rooms revenue for the nine months ended September 30, 2024, was $1,193 million, a decrease of $63 million (5.0%) compared to $1,256 million for the same period in 2023[107]. - Food and beverage revenue increased by $3 million (0.6%) to $521 million for the nine months ended September 30, 2024, compared to $518 million in 2023[107]. - Total corporate general and administrative expenses decreased by $17 million (5.6%) to $17 million for the three months ended September 30, 2024, compared to $18 million in 2023[116]. - The company recognized impairment losses of approximately $12 million during the nine months ended September 30, 2024, compared to $202 million in the same period of 2023[117][118]. - Interest expense increased by $3 million (5.9%) to $54 million for the three months ended September 30, 2024, compared to $51 million in 2023[121]. - Net cash provided by operating activities decreased by 7.4% to $349 million for the nine months ended September 30, 2024, compared to $377 million for the same period in 2023[134]. - Net cash used in investing activities was $134 million for the nine months ended September 30, 2024, primarily due to $164 million of capital expenditures[136]. Asset Management and Strategy - The company aims to deliver superior, risk-adjusted returns to stockholders through active asset management and a thoughtful external growth strategy[75]. - The company has permanently closed the Hilton Oakland Airport and terminated its ground lease, returning the property to the ground lessor[80]. - The company expects to be released from the obligation related to the SF Mortgage Loan upon final resolution with the lender, which may impact future financial results[100]. - The company has construction contract commitments of approximately $113 million for capital expenditures at its properties[131]. Sales and Gains - The unconsolidated joint venture sold the Hilton La Jolla Torrey Pines for gross proceeds of approximately $165 million, with a pro-rata share of about $41 million[79]. - The company recognized a gain of approximately $19 million from the sale of the Hilton La Jolla Torrey Pines, included in equity in earnings from investments in affiliates[79]. - The company recorded a gain of $19 million on the sale of the Hilton La Jolla Torrey Pines during the three months ended September 30, 2024[95]. - The company reported a net gain of $15 million from the sale of one consolidated hotel during the nine months ended September 30, 2023[119]. - The company recognized a loss of approximately $4 million during the nine months ended September 30, 2024, primarily related to the write-off of unamortized deferred financing costs[124]. Market Trends and Expectations - Average Daily Rate (ADR) growth has slowed as industry recovery stabilizes, indicating a normalization of seasonal patterns[78]. - Revenue per Available Room (RevPAR) is considered a meaningful performance indicator, correlating occupancy and ADR[83]. - The company expects positive momentum to continue for the remainder of 2024 based on current demand trends and expected increases in city-wide events[78]. - Economic disruptions, including elevated interest rates and inflation, may adversely affect business performance and consumer demand for travel[78]. - The occupancy rate at the Hilton Chicago increased by 12.9 percentage points for the three months ended September 30, 2024, compared to the same period in 2023[111]. - The Waldorf Astoria Orlando saw occupancy and ADR increases of 17.0 percentage points and 6.9%, respectively, for the three months ended September 30, 2024[109]. - Combined occupancy and ADR at Boston hotels increased by 1.5 percentage points and 5.2%, respectively, for the three months ended September 30, 2024, compared to the same period in 2023[113]. - Interest expense on the SF Mortgage Loan increased by $1 million and $13 million for the three and nine months ended September 30, 2024, respectively, due to accrued default interest beginning in June 2023[123]. Shareholder Returns - The company repurchased approximately 2.5 million shares of common stock for a total purchase price of $35 million during the three months ended September 30, 2024[80]. - The company repurchased approximately 4.2 million shares of common stock for a total purchase price of $60 million during the nine months ended September 30, 2024[133]. - The company declared a third quarter dividend of $0.25 per share, paid on October 15, 2024, to stockholders of record as of September 30, 2024[130]. Indebtedness - Total indebtedness as of September 30, 2024, was approximately $3.9 billion, including over $2 billion of Senior Notes[141]. - As of September 30, 2024, total cash and cash equivalents were $480 million, with an additional $38 million in restricted cash[127].