Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2017 | Apr. 28, 2017 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | PK | |
Entity Registrant Name | Park Hotels & Resorts Inc. | |
Entity Central Index Key | 1,617,406 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 214,768,394 |
Condensed Combined Consolidated
Condensed Combined Consolidated Balance Sheets - USD ($) $ in Millions | Mar. 31, 2017 | Dec. 31, 2016 |
ASSETS | ||
Property and equipment, net | $ 8,516 | $ 8,541 |
Investments in affiliates | 82 | 81 |
Goodwill | 604 | 604 |
Intangibles, net | 43 | 44 |
Cash and cash equivalents | 318 | 337 |
Restricted cash | 18 | 13 |
Accounts receivable, net of allowance for doubtful accounts of $3 and $2 | 180 | 130 |
Prepaid expenses | 51 | 58 |
Other assets | 28 | 26 |
TOTAL ASSETS (variable interest entities - $242 and $239) | 9,840 | 9,834 |
Liabilities | ||
Debt | 3,012 | 3,012 |
Accounts payable and accrued expenses | 174 | 167 |
Due to hotel manager | 125 | 91 |
Due to Hilton Grand Vacations | 210 | 210 |
Deferred income tax liabilities | 146 | 2,437 |
Other liabilities | 202 | 94 |
Total liabilities (variable interest entities - $216 and $262) | 3,869 | 6,011 |
Commitments and contingencies - refer to Note 12 | ||
Stockholders' Equity | ||
Common stock, par value $0.01 per share, 6,000,000,000 shares authorized, 214,767,295 shares issued and outstanding as of March 31, 2017 | 2 | |
Additional paid-in capital | 3,820 | |
Retained earnings | 2,258 | |
Accumulated other comprehensive loss | (60) | (67) |
Net Parent investment | 3,939 | |
Total stockholders' equity | 6,020 | 3,872 |
Noncontrolling interests | (49) | (49) |
Total equity | 5,971 | 3,823 |
TOTAL LIABILITIES AND EQUITY | $ 9,840 | $ 9,834 |
Condensed Combined Consolidate3
Condensed Combined Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Mar. 31, 2017 | Dec. 31, 2016 |
Statement Of Financial Position [Abstract] | ||
Allowance for doubtful accounts receivable | $ 3 | $ 2 |
Variable interest entities - assets | 242 | 239 |
Variable interest entities - liabilities | $ 216 | $ 262 |
Common stock, par value (per share) | $ 0.01 | |
Common stock, authorized shares | 6,000,000,000 | |
Common stock, issued shares | 214,767,295 | |
Common stock, outstanding shares | 214,767,295 |
Condensed Combined Consolidate4
Condensed Combined Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | |||
Mar. 31, 2017 | Mar. 31, 2016 | |||
Revenues | ||||
Rooms | $ 432 | $ 429 | ||
Food and beverage | 192 | 180 | ||
Other | 60 | 52 | ||
Total revenues | 684 | 661 | [1] | |
Operating expenses | ||||
Rooms | 114 | 114 | ||
Food and beverage | 131 | 127 | ||
Other departmental and support | 177 | 165 | ||
Other property-level | 46 | 45 | ||
Management and franchise fees | 34 | 26 | ||
Impairment loss | [1] | 15 | ||
Depreciation and amortization | 70 | 73 | [1] | |
Corporate and other | 18 | 16 | [1] | |
Total expenses | 590 | 581 | ||
Operating income | 94 | 80 | ||
Interest expense | (30) | (46) | [1] | |
Equity in earnings from investments in affiliates | 4 | 3 | [1] | |
Gain on foreign currency transactions | 1 | |||
Income before income taxes | 69 | 37 | ||
Income tax benefit (expense) | 2,281 | (14) | [1] | |
Net income | 2,350 | 23 | [1] | |
Net income attributable to noncontrolling interests | (1) | |||
Net income attributable to stockholders | [2] | 2,350 | 22 | [3] |
Other comprehensive income, net of tax benefit (expense): | ||||
Currency translation adjustment, net of tax of $0 and $(1) | 7 | 9 | ||
Total other comprehensive income | 7 | 9 | ||
Comprehensive income | 2,357 | 32 | ||
Comprehensive income attributable to noncontrolling interests | (1) | |||
Comprehensive income attributable to stockholders | $ 2,357 | $ 31 | ||
Earnings per share: | ||||
Earnings per share - Basic | [4] | $ 11.65 | $ 0.11 | [3] |
Earnings per share - Diluted | [4] | $ 11.02 | $ 0.11 | [3] |
Weighted average shares outstanding - Basic | 202 | 198 | [3] | |
Weighted average shares outstanding - Diluted | 213 | 198 | [3] | |
Dividends declared per common share | $ 0.43 | |||
[1] | Prior to the spin-off, we had one operating and reportable segment, our ownership segment. Prior period presentation has been restated to reflect our current reportable segment. | |||
[2] | Includes the derecognition of approximately $2.3 billion of deferred tax liabilities during the three months ended March 31, 2017. | |||
[3] | For 2016, basic and diluted earnings per share were calculated using the number of shares of common stock outstanding upon the completion of the spin-off. | |||
[4] | Per share amounts are calculated based on unrounded numbers. |
Condensed Combined Consolidate5
Condensed Combined Consolidated Statements of Comprehensive Income (Parenthetical) (Unaudited) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Income Statement [Abstract] | ||
Foreign currency translation adjustment, tax | $ 0 | $ (1) |
Condensed Combined Consolidate6
Condensed Combined Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Millions | 3 Months Ended | |||
Mar. 31, 2017 | Mar. 31, 2016 | |||
Operating Activities: | ||||
Net income | $ 2,350 | $ 23 | [1] | |
Adjustments to reconcile net income to net cash provided by operating activities: | ||||
Depreciation and amortization | 70 | 73 | [1] | |
Impairment loss | [1] | 15 | ||
Equity in earnings from investments in affiliates | (4) | (3) | [1] | |
Gain on foreign currency transactions | (1) | |||
Amortization of deferred financing costs | 1 | 2 | ||
Distributions from unconsolidated affiliates | 4 | 4 | ||
Deferred income taxes | (2,288) | (15) | ||
Changes in working capital and other | 9 | (4) | ||
Net cash provided by operating activities | 141 | 95 | ||
Investing Activities: | ||||
Capital expenditures for property and equipment | (37) | (65) | ||
Investments in affiliates | (1) | |||
Change in restricted cash | 14 | |||
Distributions from unconsolidated affiliates | 1 | 2 | ||
Net cash used in investing activities | (37) | (49) | ||
Financing Activities: | ||||
Change in restricted cash | (5) | (34) | ||
Net transfers (to) from Parent | (9) | 35 | ||
Dividends paid | (110) | |||
Distributions to noncontrolling interests | (2) | |||
Net cash used in financing activities | (124) | (1) | ||
Effect of exchange rate changes on cash and cash equivalents | 1 | (1) | ||
Net (decrease) increase in cash and cash equivalents | (19) | 44 | ||
Cash and cash equivalents, beginning of period | 337 | 72 | ||
Cash and cash equivalents, end of period | 318 | $ 116 | ||
Non-cash financing activities: | ||||
Dividends paid in stock | 441 | |||
Dividends declared but unpaid | $ 92 | |||
[1] | Prior to the spin-off, we had one operating and reportable segment, our ownership segment. Prior period presentation has been restated to reflect our current reportable segment. |
Condensed Combined Consolidate7
Condensed Combined Consolidated Statements of Equity (Unaudited) - USD ($) $ in Millions | Total | Common Stock [member] | Additional Paid-in Capital [member] | Retained Earnings [member] | Accumulated Other Comprehensive Loss [member] | Net Parent Investment [member] | Non-Controlling Interests [member] | |
Balance at Dec. 31, 2015 | $ 2,797 | $ (63) | $ 2,884 | $ (24) | ||||
Net income | 23 | [1] | 22 | 1 | ||||
Other comprehensive income | 9 | 9 | ||||||
Net transfers (to) from Parent | 35 | 35 | ||||||
Distributions to noncontrolling interests | (2) | (2) | ||||||
Cumulative effect of the adoption of ASU 2015-02 | (2) | (3) | 1 | |||||
Balance at Mar. 31, 2016 | 2,860 | (54) | 2,938 | (24) | ||||
Balance at Dec. 31, 2016 | 3,823 | (67) | 3,939 | (49) | ||||
Net income | 2,350 | $ 2,350 | ||||||
Other comprehensive income | 7 | 7 | ||||||
Net transfers (to) from Parent | (9) | (9) | ||||||
Issuance of common stock and reclassification of former Parent investment | $ 2 | $ 3,928 | $ (3,930) | |||||
Issuance of common stock and reclassification of former Parent investment (shares) | 198,000,000 | |||||||
Amortization of share-based compensation | 2 | 2 | ||||||
Dividends | (202) | (110) | (92) | |||||
Dividends (Shares) | 16,000,000 | |||||||
Balance at Mar. 31, 2017 | $ 5,971 | $ 2 | $ 3,820 | $ 2,258 | $ (60) | $ (49) | ||
Balance (shares) at Mar. 31, 2017 | 214,767,295 | 214,000,000 | ||||||
[1] | Prior to the spin-off, we had one operating and reportable segment, our ownership segment. Prior period presentation has been restated to reflect our current reportable segment. |
Organization
Organization | 3 Months Ended |
Mar. 31, 2017 | |
Accounting Policies [Abstract] | |
Organization | Note 1: Organization Park Hotels & Resorts Inc. (“we,” “us,” “our” or the “Company”) is a Delaware corporation that owns a portfolio of premium-branded hotels and resorts located in prime United States (“U.S.”) and international markets. On January 3, 2017, Hilton Worldwide Holdings Inc. (“Hilton” or “Parent”) completed the spin-off of a portfolio of hotels and resorts that established Park Hotels & Resorts Inc. as an independent, publicly traded company. The spin-off transaction, which was effected through a pro rata distribution of Park Hotels & Resorts Inc. stock to existing Hilton stockholders, was intended to be tax-free to both Hilton and Hilton’s stockholders. As a result of the spin-off, each holder of Hilton common stock on the record date of December 15, 2016 received one share of our common stock for every five shares of Hilton common stock owned. For U.S. federal income tax purposes, we intend to elect to be taxed as a real estate investment trust (“REIT”), effective January 4, 2017. We are currently, and expect to continue to be, organized and operate in a REIT qualified manner. As of the spin-off date, Park Intermediate Holdings LLC (our “Operating Company”), directly or indirectly, holds all of our assets and conducts all of our operations. We own 100% of the interests in our Operating Company. |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Summary of Significant Accounting Policies | Note 2: Basis of Presentation and Summary of Significant Accounting Policies Basis of Presentation Principles of Combination and Consolidation Subsequent to January 3, 2017, the unaudited condensed consolidated financial statements include the accounts of the Company, our wholly owned subsidiaries and entities in which we have a controlling financial interest, including variable interest entities (“VIEs”) where we are the primary beneficiary. The historical unaudited condensed combined consolidated financial statements through January 3, 2017 represent the financial position and results of operations of entities held by us after the spin-off that had historically been under common control of the Parent. The historical unaudited condensed combined consolidated financial statements were prepared on a carve-out basis and reflect significant assumptions and allocations. The unaudited condensed combined consolidated financial statements reflect our historical financial position, results of operations and cash flows, in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”). We have condensed or omitted certain information and footnote disclosures normally included in financial statements presented in accordance with U.S. GAAP. In our opinion, the accompanying unaudited condensed combined consolidated financial statements reflect all adjustments, including normal recurring items, considered necessary for a fair presentation of the interim periods. All significant intercompany transactions and balances within the financial statements have been eliminated. Although we believe the disclosures made are adequate to prevent the information presented from being misleading, these financial statements should be read in conjunction with the audited combined consolidated financial statements and notes thereto for the year ended December 31, 2016 included in our Annual Report on Form 10-K. Allocations Through January 3, 2017, the historical condensed combined consolidated statements of comprehensive income included allocations of corporate general and administrative expenses from Hilton on the basis of financial and operating metrics that Hilton historically used to allocate resources and evaluate performance against its strategic objectives. Both we and Hilton considered the basis on which expenses were allocated to be a reasonable reflection of the utilization of services provided to or the benefit received by us during the historical period presented. However, the allocations may not include all of the actual expenses that would have been incurred by us and may not reflect our condensed combined consolidated results of operations, financial position and cash flows had we been a stand-alone company during the historical period presented. Actual costs that might have been incurred had we been a stand-alone company would depend on a number of factors, including the chosen organizational structure, what functions we might have performed ourselves or outsourced and strategic decisions we might have made in areas such as information technology and infrastructure. Following the spin-off, we performed these functions using our own resources or purchased services. For an interim period, some of these functions will continue to be provided by Hilton under our transition services agreement (“TSA”). Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Interim results are not necessarily indicative of full year performance. Reclassifications Certain line items on the condensed combined consolidated balance sheets as of December 31, 2016 have been reclassified to conform to the current period presentation. Summary of Significant Accounting Policies The Company’s Annual Report on Form 10-K for the year ended December 31, 2016 contains a discussion of the significant accounting policies. There have been no significant changes to the Company’s significant accounting policies since December 31, 2016. Recently Issued Accounting Pronouncements Accounting Standards Not Yet Adopted In February 2017, the FASB issued ASU No. 2017-05 (“ASU 2017-05”), Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets. Consolidation In January 2017, the FASB issued ASU No. 2017-04 (“ASU 2017-04”), Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. |
Property and Equipment
Property and Equipment | 3 Months Ended |
Mar. 31, 2017 | |
Property Plant And Equipment [Abstract] | |
Property and Equipment | Note 3: Property and Equipment Property and equipment were: March 31, 2017 December 31, 2016 (in millions) Land $ 3,398 $ 3,397 Buildings and leasehold improvements 6,022 6,015 Furniture and equipment 924 922 Construction-in-progress 115 79 10,459 10,413 Accumulated depreciation and amortization (1,943 ) (1,872 ) $ 8,516 $ 8,541 Depreciation of property and equipment, including capital lease assets, was $69 million and $72 million during the three months ended March 31, 2017 and 2016, respectively. As of March 31, 2017 and December 31, 2016, property and equipment included approximately $19 million of capital lease assets primarily consisting of buildings and leasehold improvements, net of $8 million of accumulated depreciation. |
Consolidated Variable Interest
Consolidated Variable Interest Entities and Investments in Affiliates | 3 Months Ended |
Mar. 31, 2017 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Consolidated Variable Interest Entities and Investments in Affiliates | Note 4: Consolidated Variable Interest Entities and Investments in Affiliates Consolidated VIEs As of March 31, 2017 and December 31, 2016, we consolidated three VIEs that own hotels in the U.S. We are the primary beneficiary of these VIEs as we have the power to direct the activities that most significantly affect their economic performance. Additionally, we have the obligation to absorb their losses and the right to receive benefits that could be significant to them. The assets of our VIEs are only available to settle the obligations of these entities. Our condensed combined consolidated balance sheets include the following assets and liabilities of these entities: March 31, 2017 December 31, 2016 (in millions) Property and equipment, net $ 210 $ 208 Cash and cash equivalents 13 14 Restricted cash 14 13 Accounts receivable, net 4 2 Prepaid expenses 1 2 Debt 207 207 Accounts payable and accrued expenses 9 6 Deferred income tax liabilities — 49 During the three months ended March 31, 2017 and 2016, we did not provide any financial or other support to these VIEs that we were not previously contractually required to provide, nor do we intend to provide any such support in the future. Unconsolidated Entities Investments in affiliates were: Ownership % March 31, 2017 December 31, 2016 (in millions) Hilton Berlin 40% $ 32 $ 31 Hilton San Diego Bayfront 25% 19 20 All others (7 hotels) 20% - 50% 31 30 $ 82 $ 81 The affiliates in which we own investments accounted for under the equity method had total debt of approximately $862 million and $861 million as of March 31, 2017 and December 31, 2016, respectively. Substantially all of the debt is secured solely by the affiliates’ assets or is guaranteed by other partners without recourse to us. |
Debt
Debt | 3 Months Ended |
Mar. 31, 2017 | |
Debt Disclosure [Abstract] | |
Debt | Note 5: Debt Debt balances, including obligations for capital leases, and associated interest rates as of March 31, 2017, were: Principal balance as of Interest Rate at March 31, 2017 Maturity Date March 31, 2017 December 31, 2016 (in millions) Commercial mortgage-backed securities loan 4.11% November 2023 $ 725 $ 725 Commercial mortgage-backed securities loan 4.20% December 2026 1,275 1,275 Mortgage loans Average rate of 4.00% 2020 to 2026 (1) 207 207 Term loan L + 1.45% December 2021 750 750 Revolving credit facility (2) L + 1.50% December 2021 (1) — — Unsecured notes 7.50% December 2017 55 55 Capital lease obligations Average rate of 7.00% 2019 to 2094 14 14 3,026 3,026 Less: unamortized deferred financing costs and discount (14 ) (14 ) $ 3,012 $ 3,012 (1) Assumes the exercise of all extensions that are exercisable solely at our option. (2) $1 billion available under revolving credit facility. Mortgage Loans We are required to deposit with the lender certain cash reserves for restricted uses. As of March 31, 2017 and December 31, 2016, our condensed combined consolidated balance sheets included $18 million and $13 million, respectively, of restricted cash related to our commercial mortgaged-backed securities (“CMBS”) loans and mortgage loans. Debt Maturities The contractual maturities of our debt as of March 31, 2017 were: Year (in millions) 2017 $ 55 2018 — 2019 — 2020 (1) 12 2021 750 Thereafter 2,209 $ 3,026 (1) Assumes the exercise of all extensions that are exercisable solely at our option. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Note 6: Fair Value Measurements We did not elect the fair value measurement option for any of our financial assets or liabilities. The fair values of our Level 1 unsecured notes were based on prices in active debt markets. The fair values of our other Level 3 liabilities presented below were determined based on: (i) indicative quotes received for similar issuances; or (ii) the expected future cash flows discounted at risk-adjusted rates. The fair values of financial instruments not included in this table are estimated to be equal to their carrying amounts. The fair value of certain financial instruments and the hierarchy level we used to estimate fair values are shown below: March 31, 2017 December 31, 2016 Hierarchy Level Carrying Amount Fair Value Carrying Amount Fair Value (in millions) Liabilities: SF CMBS Loan 3 $ 725 $ 728 $ 725 $ 725 HHV CMBS Loan 3 1,275 1,274 1,275 1,275 Term Loan 3 750 745 750 750 Mortgage loans 3 207 206 207 208 Unsecured notes 1 55 57 55 57 |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 7: Income Taxes We believe that we are organized in conformity with, and operate in a manner that will allow us to elect to be taxed as a REIT, for U.S. federal income tax purposes for our tax year ending December 31, 2017, and expect to continue to be organized and operate so as to qualify as a REIT. To qualify as a REIT for U.S. federal income tax purposes, we must continually satisfy tests concerning, among other things, the real estate qualification of sources of our income, the real estate composition and values of our assets, the amounts we distribute to our stockholders and the diversity of ownership of our stock. To the extent we qualify as a REIT, we generally will not be subject to U.S. federal income tax on taxable income generated by our REIT activities. Accordingly, no provision for U.S. federal income taxes has been included in our accompanying condensed combined consolidated financial statements for the three months ended March 31, 2017 related to our REIT activities, other than the derecognition of deferred tax liabilities discussed below. We will be subject to U.S. federal income tax on built-in gains representing the excess of fair value over tax basis for property held by us on January 4, 2017 on any taxable sales of such built-in gain property during the five-year period following our election to be taxed as a REIT. In addition, we are subject to non-U.S. income tax on foreign held REIT activities. Further, our taxable REIT subsidiaries (“TRSs”) are generally subject to U.S. federal, state and local, and foreign income taxes (as applicable). We recognized an income tax benefit for the three months ended March 31, 2017 primarily as a result of the derecognition of approximately $2.3 billion of deferred tax liabilities upon our declaration of intent to be taxed as a REIT. Through January 3, 2017, we had been included in the consolidated federal income tax return of Hilton, as well as certain state tax returns where Hilton filed on a consolidated or combined basis, and foreign tax filings, as applicable. For purposes of our historical condensed combined consolidated balance sheets, we have recorded deferred tax balances as if we filed tax returns on a stand-alone basis separate from Hilton, but not as a REIT. The separate return method applies the accounting guidance for income taxes to the stand-alone financial statements as if we were a separate taxpayer and a standalone enterprise for the periods presented. The calculation of our income taxes on a separate return basis required considerable judgment and use of both estimates and allocations. We believe that the assumptions and estimates used to determine these tax amounts were reasonable. However, our historical condensed combined consolidated balance sheets may not necessarily reflect what our tax liability would have been if we were a stand-alone enterprise during the periods presented. During the three months ended March 31, 2016, Parent paid $28 million of income taxes related to our operations. Neither us nor our Parent paid income taxes related to our operations during the three months ended March 31, 2017. |
Share-Based Compensation
Share-Based Compensation | 3 Months Ended |
Mar. 31, 2017 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Share-Based Compensation | Note 8: Share-Based Compensation We issue equity-based awards to our employees pursuant to the 2017 Omnibus Incentive Plan (“2017 Employee Plan”) and our non-employee directors pursuant to the 2017 Stock Plan for Non-Employee Directors (“2017 Director Plan”), effective January 3, 2017. The 2017 Employee Plan provides that a maximum of 8,000,000 shares of our common stock may be issued, and as of March 31, 2017, 6,617,542 shares of common stock remain available for future issuance. The 2017 Director Plan provides that a maximum of 450,000 shares of our common stock may be issued, and as of March 31, 2017, 433,596 shares of common stock remain available for future issuance. For the three months ended March 31, 2017, we recognized $3 million of share-based compensation expense. As of March 31, 2017, unrecognized compensation expense was $31 million, which is expected to be recognized over a weighted-average period of 2.2 years. Restricted Stock Awards Restricted Stock Awards (“RSAs”) generally vest in annual installments between one and three years from each grant date. The following table provides a summary of RSAs for the three months ended March 31, 2017: Number of Shares Weighted-Average Grant Date Fair Value Unvested at January 1, 2017 — $ — Granted 535,994 26.49 Vested (3,778 ) 25.67 Forfeited (3,118 ) 26.22 Unvested at March 31, 2017 529,098 $ 26.50 Performance Stock Units Performance Stock Units (“PSUs”) generally vest at the end of a two or three-year performance period and are subject to the achievement of a performance measure based on a measure of the Company’s total shareholder return relative to the total shareholder return of the companies that comprise the FTSE NAREIT Lodging Resorts Index (that have a market capitalization in excess of $1 billion as of the first day of the applicable performance period). The number of PSUs that may become vested ranges from zero to 200% of the number of PSUs granted to an employee, based on the level of achievement of the foregoing performance measure. The following table provides a summary of PSUs for the three months ended March 31, 2017: Number of Shares Weighted-Average Grant Date Fair Value Unvested at January 1, 2017 — $ — Granted 385,142 31.95 Vested — — Forfeited (1,039 ) 31.90 Unvested at March 31, 2017 384,103 $ 31.95 The weighted average grant date fair values of these awards were determined using a Monte Carlo simulation valuation model with the following assumptions: Expected volatility (1) 27.0% - 29.5% Dividend yield (2) —% Risk-free rate (3) 1.2% - 1.5% Expected term 2 - 3 years (1) Due to limited trading history of our common stock, we used the historical and implied volatilities of our peer group in addition to our historical volatility over the performance period to estimate appropriate expected volatilities. The weighted average expected volatility was 28.4%. (2) Dividends are assumed to be reinvested in shares of common stock and dividends will not be paid unless shares vest. We utilized a dividend yield of zero percent. (3) Based on U.S. Separate Trading of Registered Interest and Principal Securities rates collected from Bloomberg. |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2017 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Note 9: Earnings Per Share The following table presents the calculation of basic and diluted earnings per share (“EPS”): Three Months Ended March 31, 2017 2016 (1) (in millions, except per share amounts) Weighted average shares outstanding - basic 202 198 Net effect of shares issued with respect to E&P Dividend (2) 11 — Weighted average shares outstanding - diluted 213 198 Net income attributable to stockholders (3) $ 2,350 $ 22 Basic EPS (4) $ 11.65 $ 0.11 Diluted EPS (4) $ 11.02 $ 0.11 (1) For 2016, basic and diluted earnings per share were calculated using the number of shares of common stock outstanding upon the completion of the spin-off. (2) Shares issued in connection with the distribution of our C corporation earnings and profits attributable to the period prior to spin-off (“E&P Dividend”). (3) Includes the derecognition of approximately $2.3 billion of deferred tax liabilities during the three months ended March 31, 2017. (4) Per share amounts are calculated based on unrounded numbers. For the three months ended March 31, 2017, the number of outstanding equity awards that were excluded from the weighted average shares outstanding in the computation of diluted EPS was 91,687 because their effect would have been anti-dilutive under the treasury stock method. |
Net Parent Investment
Net Parent Investment | 3 Months Ended |
Mar. 31, 2017 | |
Related Party Transactions [Abstract] | |
Net Parent Investment | Note 10: Net Parent Investment Parent Net Parent investment on the historical condensed combined consolidated balance sheets represent Hilton’s historical investment in us, the net effect of transactions with and allocations from Hilton and our accumulated earnings. Net transfers (to) from Parent are included within Net Parent investment. The components of the Net transfers (to) from Parent on the condensed combined consolidated statements of cash flows were: Three Months Ended March 31, 2017 2016 (in millions) Cash pooling and general financing activities $ (9 ) $ (5 ) Corporate allocations — 12 Income taxes — 28 Net transfers (to) from Parent $ (9 ) $ 35 |
Business Segment Information
Business Segment Information | 3 Months Ended |
Mar. 31, 2017 | |
Segment Reporting [Abstract] | |
Business Segment Information | Note 11: Business Segment Information As of March 31, 2017, we have two operating segments, our consolidated hotels and unconsolidated hotels, which include 58 and 9 hotels (30,357 and 5,083 rooms), respectively. Our unconsolidated hotels operating segment does not meet the definition of a reportable segment, thus our consolidated hotels is our only reportable segment. We evaluate our consolidated hotels primarily based on hotel adjusted earnings before interest expense, taxes and depreciation and amortization (“EBITDA”). Hotel Adjusted EBITDA is calculated as EBITDA, further adjusted to exclude certain items, including, but not limited to, gains, losses and expenses in connection with: (i) asset dispositions for consolidated investments; (ii) foreign currency transactions; (iii) debt restructurings/retirements; (iv) non-cash impairment losses; (v) transition or reorganization costs; (vi) share-based and certain other compensation expenses; (vii) severance, relocation and other expenses; and (viii) other items. The following table presents revenues for our consolidated hotels reconciled to our condensed combined consolidated amounts and Hotel Adjusted EBITDA to net income: Three Months Ended March 31, 2017 2016 (1) (in millions) Revenues: Total consolidated hotel revenue $ 681 $ 658 Other revenue 3 3 Total revenues $ 684 $ 661 Hotel Adjusted EBITDA $ 179 $ 182 Other revenue 3 3 Impairment loss — (15 ) Depreciation and amortization expense (70 ) (73 ) Corporate and other expense (18 ) (16 ) Interest expense (30 ) (46 ) Equity in earnings from investments in affiliates 4 3 Gain on foreign currency transactions 1 — Income tax benefit (expense) 2,281 (14 ) Other adjustment items — (1 ) Net income $ 2,350 $ 23 (1) Prior to the spin-off, we had one operating and reportable segment, our ownership segment. Prior period presentation has been restated to reflect our current reportable segment. The following table presents total assets for our consolidated hotels, reconciled to condensed combined consolidated amounts: March 31, 2017 December 31, 2016 (in millions) Consolidated hotels $ 9,751 $ 9,747 All other 89 87 $ 9,840 $ 9,834 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2017 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 12: Commitments and Contingencies As of March 31, 2017, we had outstanding commitments under third-party contracts of approximately $54 million for capital expenditures at certain owned and leased hotels. Our contracts contain clauses that allow us to cancel all or some portion of the work. If cancellation of a contract occurred, our commitment would be any costs incurred up to the cancellation date, in addition to any costs associated with the discharge of the contract. We are involved in litigation arising from the normal course of business, some of which includes claims for substantial sums. While the ultimate results of claims and litigation cannot be predicted with certainty, we expect that the ultimate resolution of all pending or threatened claims and litigation as of March 31, 2017 will not have a material effect on our condensed consolidated results of operations, financial position or cash flows. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 13: Subsequent Events In April 2017, we entered into two contracts for the purchase of three parcels of land adjacent to one of our hotels, Hilton Hawaiian Village Waikiki Beach Resort in Honolulu, Hawaii: (i) a contract to purchase one of the parcels for a purchase price of $10 million, which is expected to close in the fourth quarter of 2017 and (ii) an option to purchase two additional parcels, owned by a different seller, for $15 million. The contracts required a total deposit of less than $1 million. The initial option period on the second contract is one year and may be extended for up to four additional years. These contracts are subject to customary due diligence periods and can be cancelled for any reason during these periods. |
Basis of Presentation and Sum21
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2017 | |
Accounting Policies [Abstract] | |
Principles of Combination and Consolidation | Principles of Combination and Consolidation Subsequent to January 3, 2017, the unaudited condensed consolidated financial statements include the accounts of the Company, our wholly owned subsidiaries and entities in which we have a controlling financial interest, including variable interest entities (“VIEs”) where we are the primary beneficiary. The historical unaudited condensed combined consolidated financial statements through January 3, 2017 represent the financial position and results of operations of entities held by us after the spin-off that had historically been under common control of the Parent. The historical unaudited condensed combined consolidated financial statements were prepared on a carve-out basis and reflect significant assumptions and allocations. The unaudited condensed combined consolidated financial statements reflect our historical financial position, results of operations and cash flows, in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”). We have condensed or omitted certain information and footnote disclosures normally included in financial statements presented in accordance with U.S. GAAP. In our opinion, the accompanying unaudited condensed combined consolidated financial statements reflect all adjustments, including normal recurring items, considered necessary for a fair presentation of the interim periods. All significant intercompany transactions and balances within the financial statements have been eliminated. Although we believe the disclosures made are adequate to prevent the information presented from being misleading, these financial statements should be read in conjunction with the audited combined consolidated financial statements and notes thereto for the year ended December 31, 2016 included in our Annual Report on Form 10-K. |
Allocations | Allocations Through January 3, 2017, the historical condensed combined consolidated statements of comprehensive income included allocations of corporate general and administrative expenses from Hilton on the basis of financial and operating metrics that Hilton historically used to allocate resources and evaluate performance against its strategic objectives. Both we and Hilton considered the basis on which expenses were allocated to be a reasonable reflection of the utilization of services provided to or the benefit received by us during the historical period presented. However, the allocations may not include all of the actual expenses that would have been incurred by us and may not reflect our condensed combined consolidated results of operations, financial position and cash flows had we been a stand-alone company during the historical period presented. Actual costs that might have been incurred had we been a stand-alone company would depend on a number of factors, including the chosen organizational structure, what functions we might have performed ourselves or outsourced and strategic decisions we might have made in areas such as information technology and infrastructure. Following the spin-off, we performed these functions using our own resources or purchased services. For an interim period, some of these functions will continue to be provided by Hilton under our transition services agreement (“TSA”). |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Interim results are not necessarily indicative of full year performance. |
Reclassifications | Reclassifications Certain line items on the condensed combined consolidated balance sheets as of December 31, 2016 have been reclassified to conform to the current period presentation. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements Accounting Standards Not Yet Adopted In February 2017, the FASB issued ASU No. 2017-05 (“ASU 2017-05”), Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets. Consolidation In January 2017, the FASB issued ASU No. 2017-04 (“ASU 2017-04”), Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. |
Property and Equipment (Tables)
Property and Equipment (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Property Plant And Equipment [Abstract] | |
Property and Equipment | Property and equipment were: March 31, 2017 December 31, 2016 (in millions) Land $ 3,398 $ 3,397 Buildings and leasehold improvements 6,022 6,015 Furniture and equipment 924 922 Construction-in-progress 115 79 10,459 10,413 Accumulated depreciation and amortization (1,943 ) (1,872 ) $ 8,516 $ 8,541 |
Consolidated Variable Interes23
Consolidated Variable Interest Entities and Investments in Affiliates (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Schedule of Assets and Liabilities Included in Consolidated Balance Sheets | Our condensed combined consolidated balance sheets include the following assets and liabilities of these entities: March 31, 2017 December 31, 2016 (in millions) Property and equipment, net $ 210 $ 208 Cash and cash equivalents 13 14 Restricted cash 14 13 Accounts receivable, net 4 2 Prepaid expenses 1 2 Debt 207 207 Accounts payable and accrued expenses 9 6 Deferred income tax liabilities — 49 |
Schedule of Investment in Affiliates | Investments in affiliates were: Ownership % March 31, 2017 December 31, 2016 (in millions) Hilton Berlin 40% $ 32 $ 31 Hilton San Diego Bayfront 25% 19 20 All others (7 hotels) 20% - 50% 31 30 $ 82 $ 81 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | Debt balances, including obligations for capital leases, and associated interest rates as of March 31, 2017, were: Principal balance as of Interest Rate at March 31, 2017 Maturity Date March 31, 2017 December 31, 2016 (in millions) Commercial mortgage-backed securities loan 4.11% November 2023 $ 725 $ 725 Commercial mortgage-backed securities loan 4.20% December 2026 1,275 1,275 Mortgage loans Average rate of 4.00% 2020 to 2026 (1) 207 207 Term loan L + 1.45% December 2021 750 750 Revolving credit facility (2) L + 1.50% December 2021 (1) — — Unsecured notes 7.50% December 2017 55 55 Capital lease obligations Average rate of 7.00% 2019 to 2094 14 14 3,026 3,026 Less: unamortized deferred financing costs and discount (14 ) (14 ) $ 3,012 $ 3,012 (1) Assumes the exercise of all extensions that are exercisable solely at our option. (2) $1 billion available under revolving credit facility. |
Debt Maturities | The contractual maturities of our debt as of March 31, 2017 were: Year (in millions) 2017 $ 55 2018 — 2019 — 2020 (1) 12 2021 750 Thereafter 2,209 $ 3,026 (1) Assumes the exercise of all extensions that are exercisable solely at our option. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Certain Financial Instrument and Hierarchy Level Used to Estimate Fair Values | The fair value of certain financial instruments and the hierarchy level we used to estimate fair values are shown below: March 31, 2017 December 31, 2016 Hierarchy Level Carrying Amount Fair Value Carrying Amount Fair Value (in millions) Liabilities: SF CMBS Loan 3 $ 725 $ 728 $ 725 $ 725 HHV CMBS Loan 3 1,275 1,274 1,275 1,275 Term Loan 3 750 745 750 750 Mortgage loans 3 207 206 207 208 Unsecured notes 1 55 57 55 57 |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Schedule of Restricted Stock Awards (“RSAs”) | Restricted Stock Awards (“RSAs”) generally vest in annual installments between one and three years from each grant date. The following table provides a summary of RSAs for the three months ended March 31, 2017: Number of Shares Weighted-Average Grant Date Fair Value Unvested at January 1, 2017 — $ — Granted 535,994 26.49 Vested (3,778 ) 25.67 Forfeited (3,118 ) 26.22 Unvested at March 31, 2017 529,098 $ 26.50 |
Schedule of Performance Stock Units ("PSUs") | The following table provides a summary of PSUs for the three months ended March 31, 2017: Number of Shares Weighted-Average Grant Date Fair Value Unvested at January 1, 2017 — $ — Granted 385,142 31.95 Vested — — Forfeited (1,039 ) 31.90 Unvested at March 31, 2017 384,103 $ 31.95 |
Schedule of Weighted Average Grant Date Fair Values of Awards Using Monte Carlo Simulation Valuation Model | The weighted average grant date fair values of these awards were determined using a Monte Carlo simulation valuation model with the following assumptions: Expected volatility (1) 27.0% - 29.5% Dividend yield (2) —% Risk-free rate (3) 1.2% - 1.5% Expected term 2 - 3 years (1) Due to limited trading history of our common stock, we used the historical and implied volatilities of our peer group in addition to our historical volatility over the performance period to estimate appropriate expected volatilities. The weighted average expected volatility was 28.4%. (2) Dividends are assumed to be reinvested in shares of common stock and dividends will not be paid unless shares vest. We utilized a dividend yield of zero percent. (3) Based on U.S. Separate Trading of Registered Interest and Principal Securities rates collected from Bloomberg. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Earnings Per Share [Abstract] | |
Basic and Diluted Earnings Per Share | The following table presents the calculation of basic and diluted earnings per share (“EPS”): Three Months Ended March 31, 2017 2016 (1) (in millions, except per share amounts) Weighted average shares outstanding - basic 202 198 Net effect of shares issued with respect to E&P Dividend (2) 11 — Weighted average shares outstanding - diluted 213 198 Net income attributable to stockholders (3) $ 2,350 $ 22 Basic EPS (4) $ 11.65 $ 0.11 Diluted EPS (4) $ 11.02 $ 0.11 (1) For 2016, basic and diluted earnings per share were calculated using the number of shares of common stock outstanding upon the completion of the spin-off. (2) Shares issued in connection with the distribution of our C corporation earnings and profits attributable to the period prior to spin-off (“E&P Dividend”). (3) Includes the derecognition of approximately $2.3 billion of deferred tax liabilities during the three months ended March 31, 2017. (4) Per share amounts are calculated based on unrounded numbers. |
Net Parent Investment (Tables)
Net Parent Investment (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Related Party Transactions [Abstract] | |
Components of Net Transfers (to) from Parent on the Condensed Combined Consolidated Statements of Cash Flows | The components of the Net transfers (to) from Parent on the condensed combined consolidated statements of cash flows were: Three Months Ended March 31, 2017 2016 (in millions) Cash pooling and general financing activities $ (9 ) $ (5 ) Corporate allocations — 12 Income taxes — 28 Net transfers (to) from Parent $ (9 ) $ 35 |
Business Segment Information (T
Business Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Segment Reporting [Abstract] | |
Reconciliation of Revenues from Consolidated Hotels to Condensed Combined Consolidated Amounts and Hotel Adjusted EBITDA to Net Income | The following table presents revenues for our consolidated hotels reconciled to our condensed combined consolidated amounts and Hotel Adjusted EBITDA to net income: Three Months Ended March 31, 2017 2016 (1) (in millions) Revenues: Total consolidated hotel revenue $ 681 $ 658 Other revenue 3 3 Total revenues $ 684 $ 661 Hotel Adjusted EBITDA $ 179 $ 182 Other revenue 3 3 Impairment loss — (15 ) Depreciation and amortization expense (70 ) (73 ) Corporate and other expense (18 ) (16 ) Interest expense (30 ) (46 ) Equity in earnings from investments in affiliates 4 3 Gain on foreign currency transactions 1 — Income tax benefit (expense) 2,281 (14 ) Other adjustment items — (1 ) Net income $ 2,350 $ 23 (1) Prior to the spin-off, we had one operating and reportable segment, our ownership segment. Prior period presentation has been restated to reflect our current reportable segment. |
Schedule of Total Assets by Consolidated Hotels, Reconciled To Condensed Combined Consolidated Amounts | The following table presents total assets for our consolidated hotels, reconciled to condensed combined consolidated amounts: March 31, 2017 December 31, 2016 (in millions) Consolidated hotels $ 9,751 $ 9,747 All other 89 87 $ 9,840 $ 9,834 |
Organization - Additional Infor
Organization - Additional Information (Details) | Jan. 03, 2017 | Mar. 31, 2017 |
Organization [Line Items] | ||
Spin-off conversion ratio | 0.2 | |
Description of spin-off conversion | As a result of the spin-off, each holder of Hilton common stock on the record date of December 15, 2016 received one share of our common stock for every five shares of Hilton common stock owned. | |
Park Intermediate Holdings LLC [Member] | ||
Organization [Line Items] | ||
Percentage of ownership interest | 100.00% |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property and Equipment (Detail) - USD ($) $ in Millions | Mar. 31, 2017 | Dec. 31, 2016 |
Property Plant And Equipment [Abstract] | ||
Land | $ 3,398 | $ 3,397 |
Buildings and leasehold improvements | 6,022 | 6,015 |
Furniture and equipment | 924 | 922 |
Construction-in-progress | 115 | 79 |
Property and equipment, gross | 10,459 | 10,413 |
Accumulated depreciation and amortization | (1,943) | (1,872) |
Property and equipment, net | $ 8,516 | $ 8,541 |
Property and Equipment - Additi
Property and Equipment - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Property Plant And Equipment [Abstract] | ||
Depreciation | $ 69 | $ 72 |
Net capital lease assets included in property and equipment | 19 | 19 |
Accumulated depreciation of capital lease assets included in property and equipment | $ 8 | $ 8 |
Consolidated Variable Interes33
Consolidated Variable Interest Entities and Investments in Affiliates - Additional Information (Detail) $ in Millions | Mar. 31, 2017USD ($)Entity | Dec. 31, 2016USD ($)Entity |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | ||
Number of consolidated VIEs | Entity | 3 | 3 |
Debt of unconsolidated joint ventures | $ | $ 862 | $ 861 |
Consolidated Variable Interes34
Consolidated Variable Interest Entities and Investments in Affiliates - Schedule of Assets and Liabilities Included in Consolidated Balance Sheets (Detail) - USD ($) $ in Millions | Mar. 31, 2017 | Dec. 31, 2016 | Mar. 31, 2016 | Dec. 31, 2015 |
Variable Interest Entity [Line Items] | ||||
Property and equipment, net | $ 8,516 | $ 8,541 | ||
Cash and cash equivalents | 318 | 337 | $ 116 | $ 72 |
Restricted cash | 18 | 13 | ||
Accounts receivable, net | 180 | 130 | ||
Prepaid expenses | 51 | 58 | ||
Debt | 3,012 | 3,012 | ||
Accounts payable and accrued expenses | 174 | 167 | ||
Consolidated VIEs [Member] | ||||
Variable Interest Entity [Line Items] | ||||
Property and equipment, net | 210 | 208 | ||
Cash and cash equivalents | 13 | 14 | ||
Restricted cash | 14 | 13 | ||
Accounts receivable, net | 4 | 2 | ||
Prepaid expenses | 1 | 2 | ||
Debt | 207 | 207 | ||
Accounts payable and accrued expenses | $ 9 | 6 | ||
Deferred income tax liabilities | $ 49 |
Consolidated Variable Interes35
Consolidated Variable Interest Entities and Investments in Affiliates - Schedule of Investments in Affiliates (Detail) - USD ($) $ in Millions | Mar. 31, 2017 | Dec. 31, 2016 |
Schedule Of Equity Method Investments [Line Items] | ||
Investments in affiliates | $ 82 | $ 81 |
Hilton Berlin [Member] | ||
Schedule Of Equity Method Investments [Line Items] | ||
Ownership Percentage | 40.00% | |
Investments in affiliates | $ 32 | 31 |
Hilton San Diego Bayfront [Member] | ||
Schedule Of Equity Method Investments [Line Items] | ||
Ownership Percentage | 25.00% | |
Investments in affiliates | $ 19 | 20 |
All others (7 hotels) [Member] | ||
Schedule Of Equity Method Investments [Line Items] | ||
Investments in affiliates | $ 31 | $ 30 |
All others (7 hotels) [Member] | Minimum [Member] | ||
Schedule Of Equity Method Investments [Line Items] | ||
Ownership Percentage | 20.00% | |
All others (7 hotels) [Member] | Maximum [Member] | ||
Schedule Of Equity Method Investments [Line Items] | ||
Ownership Percentage | 50.00% |
Debt - Schedule of Debt (Detail
Debt - Schedule of Debt (Detail) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2017 | Dec. 31, 2016 | ||
Debt Instrument [Line Items] | |||
Debt and capital lease obligations, gross | $ 3,026 | $ 3,026 | |
Less: unamortized deferred financing costs and discount | (14) | (14) | |
Debt | 3,012 | 3,012 | |
Commercial mortgage-backed securities loan one [Member] | |||
Debt Instrument [Line Items] | |||
Debt, gross | $ 725 | 725 | |
Debt instrument, interest rate, stated percentage | 4.11% | ||
Maturity Date | 2023-11 | ||
Commercial mortgage-backed securities loan two [Member] | |||
Debt Instrument [Line Items] | |||
Debt, gross | $ 1,275 | 1,275 | |
Debt instrument, interest rate, stated percentage | 4.20% | ||
Maturity Date | 2026-12 | ||
Mortgage loans [Member] | |||
Debt Instrument [Line Items] | |||
Debt, gross | $ 207 | 207 | |
Debt instrument, weighted average interest rate | 4.00% | ||
Maturity Date, start year | [1] | 2,020 | |
Maturity Date, end year | [1] | 2,026 | |
Term loan [Member] | |||
Debt Instrument [Line Items] | |||
Debt, gross | $ 750 | 750 | |
Debt instrument, interest rate | 1.45% | ||
Maturity Date | 2021-12 | ||
Unsecured notes [Member] | |||
Debt Instrument [Line Items] | |||
Debt, gross | $ 55 | 55 | |
Debt instrument, interest rate, stated percentage | 7.50% | ||
Maturity Date | 2017-12 | ||
Capital lease obligations [Member] | |||
Debt Instrument [Line Items] | |||
Debt, gross | $ 14 | 14 | |
Debt instrument, weighted average interest rate | 7.00% | ||
Maturity Date, start year | 2,019 | ||
Maturity Date, end year | 2,094 | ||
Revolving credit facility [Member] | |||
Debt Instrument [Line Items] | |||
Debt, gross | [2] | $ 0 | $ 0 |
Debt instrument, interest rate | [2] | 1.50% | |
Maturity Date | [1],[2] | 2021-12 | |
[1] | Assumes the exercise of all extensions that are exercisable solely at our option. | ||
[2] | $1 billion available under revolving credit facility. |
Debt - Schedule of Debt (Parent
Debt - Schedule of Debt (Parenthetical) (Detail) $ in Billions | Mar. 31, 2017USD ($) |
Revolving credit facility [Member] | |
Debt Instrument [Line Items] | |
Amount available for borrowing under credit facility | $ 1 |
Debt - Additional Information (
Debt - Additional Information (Detail) - USD ($) $ in Millions | Mar. 31, 2017 | Dec. 31, 2016 |
Debt Instrument [Line Items] | ||
Restricted cash | $ 18 | $ 13 |
Commercial mortgaged-backed securities loans and mortgage loans [Member] | ||
Debt Instrument [Line Items] | ||
Restricted cash | $ 18 | $ 13 |
Debt - Debt Maturities (Detail)
Debt - Debt Maturities (Detail) $ in Millions | Mar. 31, 2017USD ($) | |
Debt Disclosure [Abstract] | ||
2,017 | $ 55 | |
2,018 | 0 | |
2,019 | 0 | |
2,020 | 12 | [1] |
2,021 | 750 | |
Thereafter | 2,209 | |
Debt and capital lease obligations, gross | $ 3,026 | |
[1] | Assumes the exercise of all extensions that are exercisable solely at our option. |
Fair Value Measurements - Fair
Fair Value Measurements - Fair Value of Certain Financial Instrument and Hierarchy Level Used to Estimate Fair Values (Detail) - USD ($) $ in Millions | Mar. 31, 2017 | Dec. 31, 2016 |
SF CMBS Loan [Member] | Carrying amount [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Loan | $ 725 | $ 725 |
SF CMBS Loan [Member] | Fair Value [Member] | Level 3 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Loan | 728 | 725 |
HHV CMBS Loan [Member] | Carrying amount [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Loan | 1,275 | 1,275 |
HHV CMBS Loan [Member] | Fair Value [Member] | Level 3 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Loan | 1,274 | 1,275 |
Term loan [Member] | Carrying amount [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Loan | 750 | 750 |
Term loan [Member] | Fair Value [Member] | Level 3 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Loan | 745 | 750 |
Mortgage Loans [Member] | Carrying amount [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Loan | 207 | 207 |
Mortgage Loans [Member] | Fair Value [Member] | Level 3 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Loan | 206 | 208 |
Unsecured notes [Member] | Carrying amount [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Unsecured notes | 55 | 55 |
Unsecured notes [Member] | Fair Value [Member] | Level 1 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Unsecured notes | $ 57 | $ 57 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | ||
Income Tax Disclosure [Abstract] | |||
Provision for income taxes | $ (2,281,000,000) | $ 14,000,000 | [1] |
De-recognition of deferred tax liabilities | 2,300,000,000 | ||
Income tax liabilities paid | 0 | $ 28,000,000 | |
U.S. Federal Tax [Member] | |||
Income Tax Disclosure [Abstract] | |||
Provision for income taxes | $ 0 | ||
[1] | Prior to the spin-off, we had one operating and reportable segment, our ownership segment. Prior period presentation has been restated to reflect our current reportable segment. |
Share-Based Compensation - Addi
Share-Based Compensation - Additional Information (Detail) | 3 Months Ended |
Mar. 31, 2017USD ($)shares | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Common stock, authorized shares | 6,000,000,000 |
2017 Employee Plan [Member] | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Shares of common stock reserved for future issuance | 6,617,542 |
Compensation expense | $ | $ 3,000,000 |
Unrecognized compensation costs related to unvested awards | $ | $ 31,000,000 |
Unrecognized compensation costs related to unvested awards, weighted-average period | 2 years 2 months 12 days |
2017 Employee Plan [Member] | Maximum [Member] | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Common stock, authorized shares | 8,000,000 |
2017 Director Plan [Member] | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Shares of common stock reserved for future issuance | 433,596 |
2017 Director Plan [Member] | Maximum [Member] | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Common stock, authorized shares | 450,000 |
Performance Stock Units ("PSUs") [Member] | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Vesting rights | zero to 200% |
Performance Stock Units ("PSUs") [Member] | Maximum [Member] | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Share-based compensation arrangement by share-based payment award performance period | 3 years |
Vesting rights | 200% |
Performance Stock Units ("PSUs") [Member] | Minimum [Member] | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Share-based compensation arrangement by share-based payment award performance period | 2 years |
Market capitalization | $ | $ 1,000,000,000 |
Vesting rights | 0% |
Share-Based Compensation - Sche
Share-Based Compensation - Schedule of Restricted Stock Awards ("RSAs") (Detail) - Restricted stock awards (RSAs) [Member] | 3 Months Ended |
Mar. 31, 2017$ / sharesshares | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Number of Shares, Granted | shares | 535,994 |
Number of Shares, Vested | shares | (3,778) |
Number of Shares, Forfeited | shares | (3,118) |
Number of Shares, Ending balance | shares | 529,098 |
Weighted Average Grant Date Fair Value, Granted | $ / shares | $ 26.49 |
Weighted Average Grant Date Fair Value, Vested | $ / shares | 25.67 |
Weighted Average Grant Date Fair Value, Forfeited | $ / shares | 26.22 |
Weighted Average Grant Date Fair Value, Ending balance | $ / shares | $ 26.50 |
Share-Based Compensation - Sc44
Share-Based Compensation - Schedule of Performance Stock Units ("PSUs") (Detail) - Performance Stock Units ("PSUs") [Member] | 3 Months Ended |
Mar. 31, 2017$ / sharesshares | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Number of Shares, Granted | shares | 385,142 |
Number of Shares, Forfeited | shares | (1,039) |
Number of Shares, Ending balance | shares | 384,103 |
Weighted Average Grant Date Fair Value, Granted | $ / shares | $ 31.95 |
Weighted Average Grant Date Fair Value, Forfeited | $ / shares | 31.90 |
Weighted Average Grant Date Fair Value, Ending balance | $ / shares | $ 31.95 |
Share-Based Compensation - Sc45
Share-Based Compensation - Schedule of Weighted Average Grant Date Fair Values of Awards Using Monte Carlo Simulation Valuation Model (Detail) | 3 Months Ended | |
Mar. 31, 2017 | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Expected volatility, minimum | 27.00% | [1] |
Expected volatility, maximum | 29.50% | [1] |
Dividend yield | 0.00% | [2] |
Minimum [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Risk-free rate | 1.20% | [3] |
Expected term | 2 years | |
Maximum [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Risk-free rate | 1.50% | [3] |
Expected term | 3 years | |
[1] | Due to limited trading history of our common stock, we used the historical and implied volatilities of our peer group in addition to our historical volatility over the performance period to estimate appropriate expected volatilities. The weighted average expected volatility was 28.4%. | |
[2] | Dividends are assumed to be reinvested in shares of common stock and dividends will not be paid unless shares vest. We utilized a dividend yield of zero percent. | |
[3] | Based on U.S. Separate Trading of Registered Interest and Principal Securities rates collected from Bloomberg. |
Share-Based Compensation - Sc46
Share-Based Compensation - Schedule of Weighted Average Grant Date Fair Values of Awards Using Monte Carlo Simulation Valuation Model (Parenthetical) (Detail) | 3 Months Ended | |
Mar. 31, 2017 | ||
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | ||
Weighted average expected volatility | 28.40% | |
Dividend yield | 0.00% | [1] |
[1] | Dividends are assumed to be reinvested in shares of common stock and dividends will not be paid unless shares vest. We utilized a dividend yield of zero percent. |
Earnings Per Share (Detail)
Earnings Per Share (Detail) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | |||
Mar. 31, 2017 | Mar. 31, 2016 | [1] | ||
Earnings Per Share [Abstract] | ||||
Weighted average shares outstanding - basic | 202 | 198 | ||
Net effect of shares issued with respect to E&P Dividend | [2] | 11 | ||
Weighted average shares outstanding - diluted | 213 | 198 | ||
Net income attributable to stockholders | [3] | $ 2,350 | $ 22 | |
Basic EPS | [4] | $ 11.65 | $ 0.11 | |
Diluted EPS | [4] | $ 11.02 | $ 0.11 | |
[1] | For 2016, basic and diluted earnings per share were calculated using the number of shares of common stock outstanding upon the completion of the spin-off. | |||
[2] | Shares issued in connection with the distribution of our C corporation earnings and profits attributable to the period prior to spin-off (“E&P Dividend”). | |||
[3] | Includes the derecognition of approximately $2.3 billion of deferred tax liabilities during the three months ended March 31, 2017. | |||
[4] | Per share amounts are calculated based on unrounded numbers. |
Earnings Per Share (Parenthetic
Earnings Per Share (Parenthetical) (Detail) $ in Billions | 3 Months Ended |
Mar. 31, 2017USD ($) | |
Earnings Per Share [Abstract] | |
De-recognition of deferred tax liabilities | $ 2.3 |
Earnings Per Share - Additional
Earnings Per Share - Additional Information (Detail) | 3 Months Ended |
Mar. 31, 2017shares | |
Earnings Per Share [Abstract] | |
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 91,687 |
Net Parent Investment - Compone
Net Parent Investment - Components of Net Transfers (to) from Parent on the Condensed Combined Consolidated Statements of Cash Flows (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Related Party Transaction [Line Items] | ||
Net transfers (to) from Parent | $ (9) | $ 35 |
Cash Pooling and General Financing Activities [Member] | ||
Related Party Transaction [Line Items] | ||
Net transfers (to) from Parent | $ (9) | (5) |
Corporate Allocations [Member] | ||
Related Party Transaction [Line Items] | ||
Net transfers (to) from Parent | 12 | |
Income Taxes [Member] | ||
Related Party Transaction [Line Items] | ||
Net transfers (to) from Parent | $ 28 |
Business Segment Information -
Business Segment Information - Hotel Properties by Segment (Detail) | 3 Months Ended | |
Mar. 31, 2017SegmentHotelRoom | Mar. 31, 2016Segment | |
Segment Reporting Information [Line Items] | ||
Number of operating business segments | Segment | 2 | 1 |
Number of reportable segment | Segment | 1 | 1 |
Consolidated hotels [Member] | ||
Segment Reporting Information [Line Items] | ||
Number of hotel properties | Hotel | 58 | |
Number of hotel rooms | Room | 30,357 | |
Unconsolidated joint ventures [Member] | ||
Segment Reporting Information [Line Items] | ||
Number of hotel properties | Hotel | 9 | |
Number of hotel rooms | Room | 5,083 |
Business Segment Information 52
Business Segment Information - Reconciliation of Revenues from Consolidated Hotels to Condensed Combined Consolidated Amounts and Hotel Adjusted EBITDA to Net Income (Detail) - USD ($) $ in Millions | 3 Months Ended | |||
Mar. 31, 2017 | Mar. 31, 2016 | |||
Reconciliation of Revenue and Adjusted EBITDA from Segments to Consolidated Amounts [Line Items] | ||||
Total revenues | $ 684 | $ 661 | [1] | |
Hotel Adjusted EBITDA | 179 | 182 | [1] | |
Impairment loss | [1] | (15) | ||
Depreciation and amortization expense | (70) | (73) | [1] | |
Corporate and other expense | (18) | (16) | [1] | |
Interest expense | (30) | (46) | [1] | |
Equity in earnings from investments in affiliates | 4 | 3 | [1] | |
Gain on foreign currency transactions | 1 | |||
Income tax benefit (expense) | 2,281 | (14) | [1] | |
Other adjustment items | [1] | (1) | ||
Net income | 2,350 | 23 | [1] | |
Total consolidated hotel revenue [Member] | ||||
Reconciliation of Revenue and Adjusted EBITDA from Segments to Consolidated Amounts [Line Items] | ||||
Total revenues | 681 | 658 | [1] | |
Other [Member] | ||||
Reconciliation of Revenue and Adjusted EBITDA from Segments to Consolidated Amounts [Line Items] | ||||
Total revenues | $ 3 | $ 3 | [1] | |
[1] | Prior to the spin-off, we had one operating and reportable segment, our ownership segment. Prior period presentation has been restated to reflect our current reportable segment. |
Business Segment Information 53
Business Segment Information - Reconciliation of Revenues from Consolidated Hotels to Condensed Combined Consolidated Amounts and Hotel Adjusted EBITDA to Net Income (Parenthetical) (Detail) - Segment | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Segment Reporting [Abstract] | ||
Number of operating segments | 2 | 1 |
Number of reportable segments | 1 | 1 |
Business Segment Information 54
Business Segment Information - Schedule of Total Assets by Consolidated Hotels, Reconciled To Condensed Combined Consolidated Amounts (Detail) - USD ($) $ in Millions | Mar. 31, 2017 | Dec. 31, 2016 |
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Total assets | $ 9,840 | $ 9,834 |
Consolidated hotels [Member] | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Total assets | 9,751 | 9,747 |
All other [Member] | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Total assets | $ 89 | $ 87 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) $ in Millions | Mar. 31, 2017USD ($) |
Commitments for capital expenditures [member] | |
Commitments And Contingencies [Line Items] | |
Purchase commitment, remaining minimum amount committed | $ 54 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Details) - Subsequent Events [Member] $ in Millions | Apr. 30, 2017USD ($)ContractParcel |
Subsequent Event [Line Items] | |
Number of contracts to purchase land | Contract | 2 |
First Contract [Member] | |
Subsequent Event [Line Items] | |
Expected closing date of purchase contract | Dec. 31, 2017 |
Second Contract [Member] | |
Subsequent Event [Line Items] | |
Number of initial period | 1 year |
Maximum [Member] | |
Subsequent Event [Line Items] | |
Total deposit required for the contracts | $ | $ 1 |
Maximum [Member] | Second Contract [Member] | |
Subsequent Event [Line Items] | |
Number of extended period | 4 years |
Hilton Hawaiian Village Waikiki Beach Resort [Member] | |
Subsequent Event [Line Items] | |
Number of parcels of land to be purchased adjacent to one of our hotel | Parcel | 3 |
Hilton Hawaiian Village Waikiki Beach Resort [Member] | First Contract [Member] | |
Subsequent Event [Line Items] | |
Number of parcels of land to be purchased adjacent to one of our hotel | Parcel | 1 |
Contract purchase price of land | $ | $ 10 |
Hilton Hawaiian Village Waikiki Beach Resort [Member] | Second Contract [Member] | |
Subsequent Event [Line Items] | |
Number of parcels of land to be purchased adjacent to one of our hotel | Parcel | 2 |
Contract purchase price of land | $ | $ 15 |