Park Hotels & Resorts Inc. (NYSE:PK) Q2 2020 Earnings Conference Call - Final Transcript

Aug 06, 2020 • 11:00 am ET

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Park Hotels & Resorts Inc. (NYSE:PK) Q2 2020 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Greetings, and welcome to Park Hotels & Resorts Second Quarter 2020 Earnings Conference Call. [Operator Instructions] I would now like to turn the conference over to your host, Ian Weissman, SVP, Corporate Strategy. Please go ahead.

Executive
Ian Weissman

Thank you, operator, and welcome, everyone, to the Park Hotels & Resorts Second Quarter 2020 Earnings Call. Before we begin, I would like to remind everyone that many of the comments made today are considered forward-looking statements under federal securities laws. As described in our filings with the SEC, these statements are subject to numerous risks and uncertainties that could cause future results to differ from those expressed, and we are not obligated to publicly update or revise these forward-looking statements.

In addition, on today's call, we may discuss certain non-GAAP financial information, such as adjusted EBITDA. You can find this information together with the reconciliations to the most directly comparable GAAP financial measure in the morning's earnings release, as well as in our 8-K filed with the SEC and a supplemental financial information available on our website at pkhotelsandresorts.com.

This morning, Tom Baltimore, our Chairman and Chief Executive Officer, will provide an update on Park's current operations in addition to his thoughts on the industry as a whole. Sean Dell'Orto, our Chief Financial Officer, will provide a brief review of our second quarter results as well as an update on our balance sheet and liquidity. Following our prepared remarks, we will open the call for questions.

With that, I would like to turn the call over to Tom.

Executive
Thomas J. Baltimore, Jr.

Thank you, Ian, and welcome, everyone. I want to start by saying that I hope all you and your families remain safe, healthy and well. Without a doubt, the last five months have been the most challenging period the lodging industry has ever faced with travel grinding to a virtual standstill, mandated stay-at-home orders and restrictive travel policies across the world. While the US began a gradual reopening in early June, COVID-19 cases continue to rise and with widespread uncertainty, travel demand remains largely depressed.

With social distancing practice is still very much the norm, businesses have encouraged employees to remain at home and many school districts will implement virtual or remote learning for students, both of which are major impediments to business travel. We don't expect a meaningful increase in demand until medical solutions, including vaccines and therapeutics are in place. And we are encouraged by the global race underway and the pace of vaccines in development, including several that are being into Phase 3 trials. Despite these challenges, our team remains committed to executing our action plans to mitigate our losses and bolster our liquidity. We moved quickly in March and April, as we suspended operations at 38 of our 60 hotels, dramatically reduced our capital spend by over 75% and drew down our $1 billion from our revolver.

We further solidified the balance sheet by amending our corporate credit facility to obtain covenant relief and substantially increased our liquidity with a $650 million