What changed in this filing

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Item 1. Business

2023-02-23 compared with 2022-02-18 · 128 added, 157 removed, 640 unchanged (31% of the section changed)

We are the second largest publicly-traded lodging real estate investment trust (“REIT”) with a diverse portfolio of iconic and market-leading hotels and resorts with significant underlying real estate value.

We were originally formed as Hilton Hotels Corporation, a Delaware corporation, and existed as a part of one of Hilton’s business segments.

On January 3, 2017, Hilton Parent completed the spin-off that resulted in our establishment as an independent, publicly traded company.

As of February 18, 2022, our portfolio consists of 54 premium-branded hotels and resorts with approximately 32,000 rooms, located in prime United States (“U.S.”) markets with high barriers to entry.

Over 86% of our rooms are luxury and upper upscale and all of our rooms are located in the U.S.

On January 3, 2017, Hilton Parent completed the spin-off of a portfolio of hotels and resorts that established us as an independent, publicly traded company.

As of February 23, 2023, our portfolio consists of 46 premium-branded hotels and resorts with over 29,000 rooms, located in prime United States (“U.S.”) markets with high barriers to entry.

Approximately 88% of our rooms are luxury and upper upscale and all of our rooms are located in the U.S.

and its territories.

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Park Parent owned 100% of the interests in our Operating Company until December 31, 2021 when the business undertook an internal reorganization transitioning our structure to a traditional umbrella partnership REIT structure ("UPREIT").

Effective January 1, 2022, Park Parent became the sole general partner and a limited partner of our Operating Company and PK Domestic REIT Inc., a direct subsidiary of Park Parent, became a limited partner.

In the future, we may from time-to-time issue limited partnership units ("OP Units") through our Operating Company in connection with acquiring hotels, financing, compensation or other purposes.

As of December 31, 2021, Park Parent and PK Domestic REIT Inc.

collectively owned 100% of the limited partnership interests of our Operating Company.

Effective January 1, 2022, Park Parent became the managing member of our Operating Company and PK Domestic REIT Inc., a direct subsidiary of Park Parent, became a member of our Operating Company.

We may, in the future, issue interests in (or from) our Operating Company in connection with acquiring hotels, financing, issuance of equity compensation or other purposes.

We are a REIT for U.S.

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We are focused on continually improving the operating performance and profitability of each of our hotels and resorts through our proactive asset management efforts.

The novel strain of coronavirus and the disease it causes (“COVID-19”) continued to challenge the lodging industry in 2021.

Working with our hotel managers, we have adapted our operational approach and implemented measures in an effort to ensure the safety of both hotel guests and employees and minimize our losses.

The novel strain of coronavirus and the disease it causes (“COVID-19”) presented ongoing challenges in 2022;

however, we have witnessed widespread improvements across our portfolio throughout the year.

During 2020, we temporarily halted operations at a majority of our hotels located in challenged markets where hotel lodging demand remained muted;

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and reimagined the operating model such as through limiting food and beverage operations and adjusting housekeeping availability for both safety considerations and cost controls.

Throughout 2021 we made progress toward recovery, as we strategically reopened all except two of our hotels while our portfolio as a whole has generated positive Hotel Adjusted EBITDA for the past three consecutive quarters.

As we continued to progress toward recovery, we strategically reopened all previously suspended hotels as of May 2022.

We continue to identify revenue-enhancement opportunities and drive cost efficiencies to maximize the operating performance, cash flow and value of each property.

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or the redevelopment or optimization of underutilized spaces.

Our current expansion project at the Bonnet Creek complex in Orlando, Florida includes additional meeting space for the Signia by Hilton Orlando Bonnet Creek and the Waldorf Astoria Orlando project.

We also may create value through repositioning certain hotels across brands or chain scale segments and exploring adaptive reuse opportunities to ensure our assets achieve their highest and best use.

Finally, we are focused on maintaining the competitive strength of our properties and adapting to evolving customer preferences

by renovating properties to provide updated guestroom design, open and activated lobby areas, food and beverage and public spaces, and modernized meeting space.

Finally, we are focused on maintaining the competitive strength of our properties and adapting to evolving customer preferences by renovating properties to provide updated guestroom design, open and activated lobby areas, food and beverage and public spaces, and modernized meeting space.

Pursuing Growth and Diversification through Prudent Capital Allocation .

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In September 2019, we completed the $2.5 billion acquisition of Chesapeake, which helped us to increase our scale and achieve greater diversification.

Since our spin-off, we have sold or otherwise disposed of 29 hotels, most of them located in lower growth domestic and non-core international markets for a combined sales price of approximately $1.7 billion.

Specifically in 2021, we sold five hotels for $477 million in gross proceeds, exceeding our goal of completing $300 to $400 million of asset sales in 2021, providing us with liquidity to de-leverage our balance sheet and to execute on a variety of strategic corporate initiatives.

Additionally, in response to the COVID-19 pandemic we deferred $150 million of the $200 million in capital expenditures previously budgeted for 2020 and reduced capital expenditures for maintenance projects to approximately $44 million for 2021.

Since our spin-off, we have sold or otherwise disposed of 39 hotels, most of them located in lower growth domestic and

international markets for a combined sales price of over $2 billion, which provided us with additional liquidity to de-leverage our balance sheet and to execute on a variety of strategic corporate initiatives.

We will continue to opportunistically seek to expand our presence in target markets and further diversify over time, including by acquiring hotels that are affiliated with leading hotel brands and operators.

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We will focus on maintaining sufficient liquidity with minimal short-term maturities and intend to have a mix of debt that will provide us with the flexibility to prepay debt when desired, dispose of assets, pursue our value enhancement strategies within our existing portfolio, and support acquisition activity.

To increase liquidity and extend debt maturities while dealing with the effects of COVID-19, we drew $1 billion from our revolving credit facility (“Revolver”) in March 2020 (which we subsequently fully repaid).

In May 2020, we issued $650 million of senior secured notes due 2025 (“2025 Senior Secured Notes”) (a portion of which was used to partially repay amounts outstanding under our Revolver and the term loan due December 2021 (“2016 Term Loan”)).

In September 2020, we issued $725 million of senior secured notes due 2028 (“2028 Senior Secured Notes”) (a portion of which was used to repay the remaining amount outstanding under the 2016 Term Loan in full as well as a portion of the Revolver) and extended almost 90% of the Revolver commitments until 2023.

In May 2021, we issued $750 million of senior secured notes due 2029 ("2029 Senior Secured Notes," collectively with the 2025 Senior Secured Notes and 2028 Senior Secured Notes, the "Senior Secured Notes") (a portion of which was used to repay a portion of the Revolver and a portion of our unsecured delayed draw term loan facility ("2019 Term Facility")).

Additionally, in 2021, we sold five consolidated hotels, and net proceeds were used to repay the remaining outstanding amounts under the Revolver and partially repay the 2019 Term Facility, leaving just $78 million outstanding on our sole remaining corporate term loan.

Only 2% of our total outstanding debt is maturing in 2022.

We are maintaining higher than historical cash levels due to the continued uncertainty surrounding COVID-19, and we intend to do so until markets stabilize and demand in the lodging industry significantly recovers.

Additionally, we expect to reduce our level of secured debt over time, which will provide additional balance sheet flexibility.

In December 2022, we amended and restated our revolving credit facility ("Revolver"), which extended its maturity date to December 2026 and increased our aggregate commitments to $950 million, of which $50 million, together with cash on hand, was used to fully repay the remaining $78 million balance on our unsecured delayed draw term loan facility ("2019 Term Facility").

In February 2023, we fully repaid the $50 million outstanding under our Revolver with net proceeds from the sale of the Hilton Miami Airport.

We expect to reduce our level of secured debt over time, which will provide additional balance sheet flexibility.

Our senior management team has extensive experience managing capital structures over multiple lodging cycles and has extensive and long-standing relationships with numerous lending institutions and financial advisors to address our capital needs.

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DoubleTree by Hilton

Signia by Hilton

Upper Upscale

Embassy Suites by Hilton

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Upper Upscale

Curio - A Collection by Hilton

Upper Midscale

Waldorf Astoria Hotels & Resorts

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Upper Upscale

Curio - A Collection by Hilton

Upper Midscale

Hyatt Centric

Upper Upscale

Hilton Garden Inn

Homewood Suites by Hilton

Hampton by Hilton

Upper Midscale

Type of Property Interest

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in our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K for additional information.

(2) Six of our hotels are owned by unconsolidated joint ventures in which we hold an interest.

(2) Four of our hotels are owned by unconsolidated joint ventures in which we hold an interest.

Refer to Item 2:

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for the percentage ownership in such unconsolidated joint ventures.

Hotel Laundry Operations

During the year ended December 31, 2020, we permanently closed operations at our three commercial laundry facilities located in Piscataway, New Jersey, Portage, Indiana, and Portland, Oregon.

Revenue from our commercial laundry operations accounted for less than half a percent of our consolidated revenue in each of the years ended December 31, 2020 and 2019.

Sustainability

We incorporate sustainability into our investment and asset management strategies, with a focus on minimizing environmental impact.

When we evaluate the acquisition of new properties, we will assess both sustainability opportunities and climate change-related risks as part of our due diligence process.

During the ownership of our properties, we seek to invest in proven sustainability practices in our redevelopment projects that can enhance asset value, while also improving environmental performance.

When we evaluate the acquisition of new properties, we assess both sustainability opportunities and climate change-related risks as part of our due diligence process.

During the ownership of our properties, we seek to invest in proven sustainability practices in both our renovation and redevelopment projects that can enhance asset value, while also improving environmental performance.

In such projects, we target specific environmental efficiency enhancements, equipment upgrades and replacements that reduce energy and water consumption and offer appropriate returns on investment.

We are committed to being a responsible corporate citizen and

minimizing our impact on the environment.

We are committed to being a responsible corporate citizen and minimizing our impact on the environment.

Our approach to corporate citizenship is reinforced by periodic engagement with key stakeholders to understand their corporate responsibility priorities.

We participated in the 2021 Global Real Estate Sustainability Benchmark ("GRESB") assessment, ranking in the top 35% of all GRESB participant companies, and increased our score compared to 2020.

Additionally, we were recognized by Newsweek as one of America's Most Responsible Companies for the third consecutive year, ranking in the top third of all selected companies.

We have published our 2021 Annual Corporate Responsibility Report on our website, which discloses our environmental and social programs and performance and includes our first Task Force report on Climate-Related Financial Disclosures.

As highlighted in our report, in 2020, we saw continued decreases in energy and water consumption and intensity across our portfolio, as well as continued decreases in carbon emissions and waste generated.

Operations at a significant portion of our portfolio were temporarily suspended for various durations throughout 2020, driving the reductions in utility consumption and intensities.

However, the trend of decreasing consumption and intensities is not limited to 2020.

Our efforts to responsibly manage our environmental impact is reflected in the continued year-over-year decreases in these metrics.

Park has created a Green Sustainability Playbook, which outlines the Company’s sustainability expectations and processes for its brand and management partners on a variety of topics, including HVAC equipment, LED lighting and water efficiency.

Park has also created a set of Engineering Renovation Guidelines, which address opportunities for incorporating sustainable building attributes during renovations, such as the use of green materials and efficiency standards for HVAC systems, toilets and showers.

Additionally, while non-essential capital expenditure projects were largely suspended or cancelled during 2020 due to cost elimination and cash efficiency measures taken in response to the COVID-19 pandemic, we continued to invest in efficiency projects related to end-of-life equipment replacements or upgrades.

With these projects, we were often able to notably decrease our environmental impact by replacing older equipment with more efficient options.

In 2020, completion of more than 20 capital expenditure projects, with a total investment in excess of $4 million, helped to improve the overall efficiency of our portfolio.

These projects, conducted at 15 of our hotels, are expected to generate average cost savings of 3 –

4% annually, while larger projects, such as chiller retrofits or replacements, are expected to generate energy cost savings of approximately 20% annually.

As part of our ongoing stakeholder engagement and transparency efforts, we participated in the 2022 Global Real Estate Sustainability Benchmark ("GRESB") assessment, ranking in the top 35% of all GRESB participant companies, and increased our score compared to our pre-pandemic 2020 results.

Compared to 2021, our ranking declined slightly due to drastic fluctuations in utility consumption across our portfolio from properties reopening and being utilized to a greater capacity.

Additionally, in 2022, we were recognized by Newsweek as one of America's Most Responsible Companies for the third consecutive year, ranking in the top third of all selected companies, and we received the 2022 Nareit Leader in the Light Award for the hospitality sector, further highlighting our commitment to superior and sustained sustainability practices.

We have published our 2022 Annual Corporate Responsibility Report on our website, which discloses our environmental and social programs and performance, our risk management strategy and our governance and oversight practices.

The report also includes our Task Force Report on Climate-Related Financial Disclosures ("TCFD") as well as our Sustainability Accounting Standards Board ("SASB") and Global Reporting Index ("GRI") indices.

As highlighted in our report, in 2022, we formalized and strengthened oversight over our environmental, social and governance ("ESG") activities by renaming two of our Board of Directors ("Board")-level committees to more accurately reflect how ESG is embedded in our governance practices and establishing an executive-level ESG committee to develop, implement and monitor Park's ESG initiatives and policies.

The executive-level ESG committee provides oversight of Park's three dedicated ESG working committees –

the Green Park Committee, the Park Cares Committee and the Diversity & Inclusion Steering Committee.

Additionally, ESG performance targets were embedded into executive performance objectives and compensation.

Each ESG initiative begins with analysis and work by one of the three working committees, each of which specializes in specific ESG matters.

Park's Green Park Committee is dedicated to Park's sustainability efforts and environmental performance and manages the Company's Green Park Program, which prioritizes the achievement of our sustainability goals, including the reduction of greenhouse gas ("GHG") across our portfolio and business as a whole.

Our Green Park Sustainability Playbook outlines the Company’s sustainability expectations and processes for its brand and management partners on a variety of topics, including HVAC equipment, LED lighting and water efficiency.

Park's Engineering Renovation Guidelines address opportunities for incorporating sustainable building attributes during renovations, such as the use of green materials and efficiency standards for HVAC systems, toilets and showers.

Five of our properties were awarded the ENERGY STAR® Certification for Superior Energy Efficiency, including our largest hotel, the Hilton Hawaiian Village Waikiki Beach Resort, and 85% of our portfolio was Google Eco-certified via Hilton's LightStay program.

Additionally, we have continued to invest in efficiency projects and implemented efficiency best practices for our capital projects.

We have implemented sustainability checklists where appropriate, and efficiency projects related to end-of-life equipment replacements or upgrades are routinely conducted.

With these projects, we are often able to notably decrease our environmental impact by replacing older equipment with more efficient options.

We also began conducting intensive energy efficiency audits of our portfolio in order to generate a long-term strategy for increased efficiencies and decarbonization.

Our pilot audit performed at one of our hotels in 2021 resulted in planned investments that are projected to reduce our GHG emissions by 15% in one year.

Seventeen additional audits were performed with a goal to audit our entire portfolio no later than 2025.

Our Principal Agreements

In order for us to continue to qualify as a REIT, independent third parties must operate substantially all of our hotels.

In order for us to continue to qualify as a REIT, independent third parties must operate our hotels.

We lease substantially all of our hotels to our TRS lessees, which, in turn have engaged independent third-parties to operate these hotels pursuant to management agreements.

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Franchise Agreements

Nine of our hotels are subject to franchise agreements.

Four of our hotels are subject to franchise agreements.

Pursuant to the franchise agreements, we have been granted a limited, non-exclusive license to use our franchisor’s brand names, marks and systems.

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In return, we are required to operate franchised hotels consistent with the applicable brand standards.

The franchise agreements specify operational, record-keeping, accounting, reporting and marketing standards and procedures with which we must comply, and will promote consistency across the brand by outlining standards for guest services, products, signage and furniture, fixtures and equipment, among other things.

To monitor our compliance, the franchise agreements specify that we must make the hotel available for quality inspections by the franchisor.

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the failure to maintain brand standards;

the failure to pay royalties and fees or to perform other obligations under the

franchise license;

the failure to pay royalties and fees or to perform other obligations under the franchise license;

and abandonment of the franchise or a change of control, and in the event of such termination, we are required to pay liquidated damages.

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In addition, notwithstanding the allocation described above, we, HGV and Hilton have agreed that losses related to certain contingent liabilities (and related costs and expenses), which generally are not specifically attributable to any of the separated real estate business, the timeshare business or the retained business of Hilton (“Shared Contingent Liabilities”), will be apportioned among the parties according to fixed percentages of 65%, 26% and 9% for each of Hilton, us and HGV, respectively.

Examples of Shared Contingent Liabilities may include uninsured losses arising from actions (including derivative actions) against current or former directors or officers of Hilton in respect of acts or omissions occurring prior to the distribution date, or against current or former directors or officers of any of Hilton, HGV or us, arising out of, in connection with, or otherwise relating to, the spin-offs and the distribution, subject to certain exceptions described in the Distribution Agreement.

Examples of Shared Contingent Liabilities may include uninsured losses arising from actions (including derivative actions) against current or former

directors or officers of Hilton in respect of acts or omissions occurring prior to the distribution date, or against current or former directors or officers of any of Hilton, HGV or us, arising out of, in connection with, or otherwise relating to, the spin-offs and the distribution, subject to certain exceptions described in the Distribution Agreement.

In addition, costs and expenses of, and indemnification obligations to, third party professional advisors arising out of the foregoing actions may also be subject to these provisions.

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federal, state, local and foreign income taxes, other tax matters and related tax returns.

Although binding between the parties, the Tax Matters Agreement

is not binding on the IRS.

Although binding between the parties, the Tax Matters Agreement is not binding on the IRS.

We and HGV Parent have joint and several liability with Hilton Parent to the IRS for the consolidated U.S.

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Renewal Rights / Purchase Rights

Leases of U.S.

Properties (Excluding Properties Leased by Joint Ventures)

Leases of Wholly-Owned Properties

Embassy Suites Phoenix Airport

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January 14, 2083

Leases of U.S.

Properties by Joint Ventures

Leases of Properties by Joint Ventures

Hilton La Jolla Torrey Pines

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1 x 20 years (6)

Hilton San Diego Bayfront

December 31, 2071

(1) Reflects the terms of a master lease agreement pursuant to which we lease the following five hotels:

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The lodging industry is highly competitive.

and outlets, public and meeting spaces and other guest services, consistency of service, room rate, brand reputation and the ability to earn and redeem loyalty program points through a global system.

Our hotels compete with other hotels for guests on the basis of several factors, including the attractiveness of the facility, location, level of service, quality of accommodations, amenities, food and beverage options and outlets, public and meeting spaces and other guest services, consistency of service, room rate, brand reputation and the ability to earn and redeem loyalty program points through a global system.

Competition is often specific to the individual markets in which our hotels are located and includes competition from existing and new hotels operated under brands primarily in the upper upscale chain scale segments.

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We face competition for the acquisition of hotels from other REITs, private equity investors, institutional pension funds, sovereign wealth funds and numerous local, regional and national owners, including franchisors, in each of our markets.

Some of these entities may have substantially greater financial resources than we do and may be able and willing to accept more risk than we believe we can prudently manage.

Some of these entities may have substantially

greater financial resources than we do and may be able and willing to accept more risk than we believe we can prudently manage.

During the recovery phase of the lodging cycle, competition among potential buyers may increase the bargaining power of potential sellers, which may reduce the number of suitable investment opportunities available to us or increase pricing.

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Government Regulations

Our business is subject to various federal and state laws and regulations (in the U.S.

and Puerto Rico).

Our business is subject to various federal and state laws and regulations.

In particular, we are subject to the Americans with Disabilities Act (“ADA”).

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Environmental Matters

We are subject to certain requirements and potential liabilities under various federal, state and local environmental, health and safety laws and regulations (in the U.S.

and Puerto Rico) and incur costs in complying with such requirements.

We are subject to certain requirements and potential liabilities under various federal, state and local environmental, health and safety laws and regulations and incur costs in complying with such requirements.

These laws and regulations govern our operations including any associated air emissions;

the use, storage and disposal of hazardous and toxic

substances and petroleum projects;

the use, storage and disposal of hazardous and toxic substances and petroleum projects;

and wastewater disposal.

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We use and store hazardous and toxic substances, such as cleaning materials, pool chemicals, heating oil and fuel for back-up generators at some of our facilities, and we generate certain wastes in connection with our operations.

In addition to our hotel accommodations, we previously operated certain laundry facilities.

Some of our properties include older buildings, and some may have, or may historically have had impacts from current or historical site operations including dry-cleaning facilities, gasoline and auto service stations, underground storage tanks for heating oil and back-up generators, and other operations that may have caused environmental contamination.

We have from time to time been responsible for investigating and remediating contamination at some of our facilities, such as contamination from leaking underground storage tanks or as a result of current or historical dry-cleaning operations, and we could be held responsible for any contamination resulting from the disposal of wastes that we generate, including at locations where such wastes have been sent for treatment or disposal, without regard to whether we complied with environmental laws in sending our wastes to such treatment or disposal sites.

In some cases, we may be entitled to indemnification, but there can be no assurance that we would be able to recover all or any costs we incur in addressing such problems.

From time to time, we may also be required to manage, abate, remove or contain mold, lead, asbestos-containing materials, radon gas or other hazardous conditions found in or on our properties.

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We have been organized and operated, and we expect to continue to be organized and operated, in a manner to qualify as a REIT.

To qualify as a REIT, we must satisfy requirements related to, 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 annually and the diversity of ownership of our stock.

distribute to our stockholders annually and the diversity of ownership of our stock.

To the extent we continue to remain qualified as a REIT, we generally will not be subject to U.S.

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health and well-being, we strive to help our employees in all aspects of their lives.

As of December 31, 2021, we had 80 corporate employees.

As of December 31, 2022, we had 91 employees.

We believe relations are positive between us and our employees.

Our hotel managers are generally responsible for hiring and maintaining the labor force at each of our hotels.

During 2021, management of the Select Hotels was transitioned to a third-party hotel management company, and we no longer employ the employees at these hotels.

Although we do not employ the employees at our hotels, we still are subject to the costs and risks generally associated with the hotel labor force, particularly those hotels with unionized labor.

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We value the unique perspectives that a workforce with diverse cultures, ages, genders, and ethnicities brings to our process, and we are committed to enhancing diversity, equity and inclusion at Park.

We have a skilled and highly diverse board of nine independent directors, two of whom are gender diverse.

We have a skilled and highly diverse board of eight independent directors, two of whom are gender diverse.

It is Park's policy to consider diversity in Board nominations.

In addition, our executive team is comprised of six members, two of whom are gender diverse and three of whom are racially diverse.

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Our commitment to enhancing diversity, equity and inclusion is reflected both in the actions we take within our Company and our efforts in our larger community, such as through recruitment, employee development, mentorship, education, advocacy and community outreach.

We have established a Diversity & Inclusion Steering Committee, which is comprised of employees at our corporate headquarters and includes members of executive leadership from all corporate departments and a broad assortment of levels, genders, ages and races.

The committee is dedicated to enhancing our focus on activities that increase awareness and take actions in support of equality, and it seeks to develop partnerships and adopt new initiatives that support systematic change related to racism and diversity.

The committee has spent significant time focusing on actions and commitments that impact Park internally such as recruitment and retention practices, policy and process updates, training and increased communication and awareness programs.

We have established a Diversity & Inclusion Steering Committee, which is comprised of members of executive leadership and employees from all corporate departments across a broad assortment of levels, genders, ages and races.

The committee is dedicated to enhancing our focus on activities that increase awareness and take actions in support of equality, and it seeks to

develop partnerships and adopt new initiatives that support systematic change related to racism and diversity.

As a result, Park's Diversity & Inclusion Steering Committee works in concert with our Park Cares Committee to partner with local organizations that provide services and resources to underserved populations and those in need of social, economic, educational, mental and physical support in our community.

The committee has also spent significant time focusing on actions and commitments that impact Park internally such as recruitment and retention practices, policy and process updates, training and increased communication and awareness programs.

All our employees are encouraged to take part in initiatives implemented by the Diversity & Inclusion Steering Committee.

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We continually evaluate our practices related to diversity, equity and inclusion through internal and external resources.

For example, in 2021, we added a gender and ethnic diversity analysis to our corporate compensation review, which reflected no pay disparity based on any gender or ethnic group.

In addition, in 2021, we engaged a third-party resource to perform a diversity audit of Park’s policies, procedures and external websites.

The results of the audit found that overall, Park policies and procedures reflect a company that is committed to diversity, equity, and inclusion, and that has taken steps to effectuate those goals.

For example, since 2021, we have included a gender and ethnic diversity analysis to our annual corporate compensation review, which continues to reflect no pay disparity based on any gender or ethnic group.

Training and Development

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We also seek to increase awareness and understanding through Company-wide trainings on diversity and inclusion, unconscious bias and other social issues, as well as an annual anti-bribery/anti-corruption training.

In 2021, we added a separate, mandatory training on diversity, equity, inclusion and unconscious bias for corporate employees, and we expanded our training on social issues to include modern slavery/human trafficking awareness.

We require a separate, mandatory training on diversity, equity, inclusion and unconscious bias for corporate employees, as well as training on social issues to include modern slavery/human trafficking awareness.

All employees also participate in anti-harassment and compliance training at least once a year.

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Regular one-on-one feedback sessions are conducted to ensure feedback is current and to reinforce positive performance.

We encourage our employees to participate in our Associate Satisfaction and Engagement Survey, which is administered by a third party, and undertake initiatives to improve areas identified in the survey.

We encourage our employees to participate in our employee engagement survey, which is administered by a third party, and undertake initiatives to improve areas identified in the survey.

As a direct result of the survey, each department Executive Committee leader conducts feedback sessions with their respective teams, and Company-wide action plans are created and implemented by our Human Resources department.

In addition, each department also creates departmental action plans and implements them accordingly.

Our Board of Directors receives regular reports on these initiatives to ensure that we continue to demonstrate our strong commitment to our employees, diversity and inclusion and other human capital matters.

Also, in 2022 we conducted two pulse surveys, in addition to our annual engagement survey, to ensure we are providing programs and initiatives that support our culture of communication and collaboration and ensure our employees feel valued and heard through our rewards and recognition programs.

Our Board receives regular reports on these initiatives to ensure that we continue to demonstrate our strong commitment to our employees, diversity and inclusion and other human capital matters.

Health, Safety and Well-being

We provide benefits to support our corporate employees and their families, including but not limited to medical, vision and dental insurance, gym memberships, a 401(k) match program, paid parental leave, and an employee assistance program.

We also provide numerous initiatives focused on physical, mental and spiritual well-being including a flu shot clinic, mindfulness training with dedicated coaches and leaders and emotional intelligence workshops.

To support our employees in navigating the challenges of COVID-19, we enhanced components of our health and well-being program.

Our expanded program includes Wellness Wednesdays, an initiative targeted to improve physical, social, mental and spiritual wellbeing through bi-weekly Company-wide virtual events.

We also provided each corporate employee with a membership to a 24/7 membership-based primary care medical practice with a mission to offer quality care more accessibly.

We also provide numerous initiatives focused on physical, mental and spiritual well-being including booster clinics, mindfulness training with dedicated coaches and leaders and emotional intelligence workshops.

Together with our hotel managers, we also aim to ensure the health, safety and well-being of all employees and guests at our properties.

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We aim to promote health and well-being measures in our design and construction projects through the use of natural ventilation, daylighting and air and water quality monitoring.

Hotel employee health and safety factors are designed into projects, which include alarm systems cameras, first aid locations and personal alert devices.

Hotel employee health and safety factors are designed into projects, which include alarm systems cameras, first aid

locations and personal alert devices.

Additionally, we have developed standardized procedures to be undertaken during and immediately following an extreme weather event or other emergency, including communication guidance, life safety and foreseen event preparedness instructions and guidance on how to manage environmental hazards, among other risk-related topics.

Community Engagement

Our Park Cares Committee, a committee comprised of employees at our corporate headquarters, focuses on engagement with local communities and spearheads volunteer work.

We introduced an annual event, which aims to concentrate our volunteer efforts around one central cause that all corporate headquarters’

employees can participate in if they desire.

While the challenges resulting from COVID-19 temporarily suspended in-person charitable activities in 2020, Park continued to support local communities and organizations in a virtual capacity and through charitable donations.

In 2021, we supported over 13 organizations and/or programs through charitable contributions, sponsorships and scholarships contributing a total of $170,000 in cash donations.

In 2022, Park Cares sponsored two community service initiatives where employees were invited to participate with in-kind donations or by volunteering their time, of which 85 of our employees participated.

In 2022, we supported 15 organizations and/or programs through charitable contributions, sponsorships and scholarships contributing a total of $303,000 in cash donations.

The hotels within our portfolio are also extremely involved with their respective communities, raising money or donating supplies, food or services as well as contributing countless hours to many worthwhile causes.

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Risks Related to Our Business

The COVID-19 pandemic, including the resulting and continued economic disruptions, travel restrictions and decrease in demand for our hotel properties, has significantly adversely impacted and disrupted, and is expected to continue to significantly adversely impact and disrupt, our business, financial performance and condition, operating results and cash flows.

The outbreak of COVID-19 has had and continues to have, and another pandemic in the future could similarly have, significant repercussions across regional and global economies and financial markets.

The global and sustained impact of the outbreak and resulting control measures, including states of emergency, mandatory quarantines, border closures, and other travel and large gatherings restrictions, as well as declines in overall willingness to travel due to the risk of COVID-19 transmission, have significantly decreased the demand for travel to our hotel properties.

We have been and expect to continue to be negatively affected by these and other governmental regulations and travel advisories to fight the pandemic, including recommendations by the U.S.

Continued economic disruptions, including from the COVID-19 pandemic and the impact from inflation, has significantly adversely impacted and disrupted, and may continue to adversely impact and disrupt, our business, financial performance and condition, operating results and cash flows.

The outbreak of COVID-19 and its aftermath have had and continue to have, and another pandemic in the future could similarly have, significant repercussions across regional and global economies and financial markets.

The global impact of the outbreak and resulting control measures, including states of emergency, mandatory quarantines, border closures, and other travel and large gatherings restrictions, as well as declines in overall willingness to travel due to the risk of COVID-19 transmission, significantly decreased the demand for travel to our hotel properties.

We were negatively affected by these and other governmental regulations and travel advisories to fight the pandemic, including recommendations by the U.S.

Department of State, the Center for Disease Control and Prevention and the World Health Organization.

In addition, the COVID-19 pandemic triggered a global economic contraction, which was followed by other economic challenges that affected discretionary spending and travel, including supply chain disruptions and increased inflation.

COVID-19 has disrupted and has had a significant adverse effect on, and will continue to significantly adversely impact and disrupt, our business, financial performance and condition, operating results and cash flows.

The effects of the pandemic on the hotel industry are unprecedented.

Global demand for lodging has been drastically reduced and occupancy levels reached historic lows in 2020.

As vaccination rates across the country increased and COVID-19 related restrictions were eased or removed, travel and hospitality spending increased beginning the second quarter of 2021;

however, the COVID-19 pandemic triggered a global economic contraction, which was followed by other economic challenges that affected

discretionary spending and travel, including supply chain disruptions and increased inflation.

Inflationary concerns have been counteracting the lodging industry's recovery from the COVID-19 pandemic and may affect consumer sentiment and decrease demand for travel, which can cause fluctuations in hotel revenues or earnings at our hotels.

Our labor or other costs may also rise due to inflation, and there can be no assurance that we will be able to pass cost increases on to travelers through higher rates.

COVID-19 and its aftermath have disrupted and have had a significant adverse effect on, and may continue to adversely impact and disrupt, our business, financial performance and condition, operating results and cash flows.

The effects of the pandemic on the hotel industry were unprecedented.

Global demand for lodging was drastically reduced and occupancy levels reached historic lows in 2020.

Beginning in late February 2020, we experienced a significant decline in occupancy and RevPAR associated with COVID-19 disruption throughout our portfolio.

Travel, especially business and leisure travel in the United States, where all of our hotels are located, was adversely affected as result of COVID-19.

Although we were able to recommence operations at all except two of our previously suspended hotels by the end of 2021, there remains considerable uncertainty as to both the time it will take to see travel and demand for lodging and travel-related experiences to fully recover.

While transient business has improved across our portfolio, the recovery of group business continues to be delayed by new COVID-19 variants.

If demand does not recover, or if virus variants increase or travel restrictions tighten, we may be required to suspend operations at additional hotels.

Additional factors that would negatively impact our ability to successfully operate during or following COVID-19 or another pandemic, or that could otherwise significantly adversely impact and disrupt our business, financial performance and condition, operating results and cash flows, include:

sustained negative consumer or business sentiment, economic metrics (including inflation, unemployment levels, discretionary spending and declines in personal wealth) or demand for travel, including beyond the end of the COVID-19 pandemic and the lifting of travel restrictions and advisories, which could further adversely impact demand for lodging;

significantly increased inflation, which may increase labor or other costs to maintain or operate hotels;

increased sanitation and hygiene requirements, social distancing and other mitigation measures, which have increased costs to us and our operators;

disruptions in our supply chains, which may among other things, affect our food and beverage offerings;

disruptions in the continued service and availability of personnel, including our senior leadership team and key field personnel, and our ability to recruit, attract and retain skilled personnel to the extent our management or personnel are impacted by the outbreak of pandemic or epidemic disease and are not available or allowed to conduct work, which could result in increased labor expenses;

Travel, especially business and leisure travel in the United States, where all of our hotels are located, was adversely affected as a result of COVID-19.

Although we were able to recommence operations at all previously suspended hotels as of May 2022, there can be no assurances that we will not experience further fluctuations in hotel revenues or earnings at our hotels due to the uncertainty of COVID-19 and other macroeconomic factors, such as inflation, increases in interest rates, potential economic slowdown or a recession and geopolitical conflicts.

Additional factors that would negatively impact our ability to successfully operate during or following another pandemic, or that could otherwise significantly adversely impact and disrupt our business, financial performance and condition, operating results and cash flows, include:

sustained negative consumer or business sentiment, economic metrics (including inflation, unemployment levels, discretionary spending and declines in personal wealth) or demand for travel, which could further adversely impact demand for lodging;

limited opportunities to acquire new properties or the need to dispose of properties to meet liquidity needs;

the scaling back or delay of a significant amount of planned capital expenditures, including planned renovation projects, which could adversely affect the value of our properties and guest experience at our properties;

our ability to obtain bank lending or access the capital markets could deteriorate, including as a result of the COVID-19 pandemic, or declines in our business performance or the general economy;

our increased indebtedness and decreased operating revenues, which could increase our risk of default on our loans;

our ability to obtain bank lending or access the capital markets could deteriorate, or declines in our business performance or the general economy;

our increased indebtedness, including increases in interest rates as a response to increased inflation, and decreased operating revenues, which could increase our risk of default on our loans;

we may require additional indebtedness, which may contain even more restrictive covenants than our existing indebtedness or may require incremental collateral;

our dependence on our hotel managers, who are facing similar challenges from the COVID-19 pandemic;

our dependence on our hotel managers, who may be facing similar challenges;

disruptions as a result of corporate employees working remotely, including risk of cybersecurity incidents and disruptions to internal control procedures;

benefits of government action to provide financial support to affected industries, including the travel and hospitality industry, may not be available to us or our operators.

Moreover, many of the risk factors set forth elsewhere in the below risk factors should be interpreted as heightened risks as a result of the impact of the COVID-19 pandemic.

In addition, historical data regarding our business, properties, results of operations, financial condition and liquidity prior to the first quarter of 2020 does not reflect the impact of the COVID-19 pandemic and related containment measures, and therefore comparability of our results between periods may be limited.

The significance, extent and duration of the impacts caused by the COVID-19 outbreak on our business, financial condition, operating results and cash flows, remains largely uncertain and dependent on future developments that cannot be accurately predicted at this time, such as the continued severity, duration (including the extent of any additional resurgences in the future), transmission rate and geographic spread of COVID-19 in the United States, the extent and effectiveness of the containment measures taken, the timing of and manner in which containment efforts are reduced or lifted, the continued emergence of virus variants, the efficacy, availability and deployment of vaccinations and other treatments to combat COVID-19, including public adoption rates of COVID-19 vaccines, and the response of the overall economy, the financial markets and the population, particularly in areas in which we operate, once the current or any future containment measures are reduced or lifted.

As a result, we cannot provide an estimate of the overall impact of the COVID-19 pandemic on our business as the extent and duration of the effects of COVID-19 are not yet clear.

We face various risks posed by our acquisition activities.

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However, investments in real estate are illiquid, and it may not be possible to dispose of assets in a timely manner or on favorable terms, which could adversely affect our financial condition, operation results and cash flows.

Our ability to dispose of properties on advantageous terms depends on factors beyond our control, including competition from other sellers and the availability of attractive financing for potential buyers, and we cannot predict whether we will be able to sell any hotel we desire to for the price or on the terms set by us or acceptable to us, or the length of time needed to find a willing buyer and to close the sale of the hotel.

close the sale of the hotel.

Upon sales of properties or assets, we may become subject to contractual indemnity obligations, incur unusual or extraordinary distribution requirements, be required to expend funds to correct defects or make capital improvements or, as a result of required debt repayment, face a shortage of liquidity.

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Many of our hotels, including related ancillary personal property, may have low tax bases.

If we dispose of these hotels in taxable transactions, we may be required to pay tax on the sale and will be required distribute the after-tax gain to our stockholders under the requirements of

the Code applicable to REITs, which, in turn, would impact our cash flow.

If we dispose of these hotels in taxable transactions, we may be required to pay tax on the sale and will be required distribute the after-tax gain to our stockholders under the requirements of the Code applicable to REITs, which, in turn, would impact our cash flow.

Therefore, as a result of the foregoing events or circumstances, we may not be able to adjust the composition of our portfolio promptly, on favorable terms or at all in response to changing economic, financial and investment conditions, which may adversely affect our cash flows and our ability to make distributions to stockholders.

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We are dependent on the performance of our managers and could be materially and adversely affected if our managers do not properly manage our hotels or otherwise act in our best interests or if we are unable to maintain a good relationship with our third-party hotel managers.

In order for us to continue to qualify as a REIT, independent third parties must operate substantially all of our hotels.

In order for us to continue to qualify as a REIT, independent third parties must operate our hotels.

We lease substantially all of our hotels to our TRS lessees.

Our TRS lessees and the TRSs that own our hotels, in turn, have entered into management agreements with independent third-party managers to operate our hotels.

We could be materially and adversely affected if any third-party hotel manager fails to provide quality services and amenities, fails to maintain a quality brand name or otherwise fails to manage our hotels in our best interest, and could be held financially responsible for the actions and inactions of our third-party hotel managers pursuant to our management agreements.

to our management agreements.

In addition, our third-party hotel managers manage, and in some cases may own or lease, or may have invested in or may have provided credit support or operating guarantees to hotels that compete with our hotels, any of which could result in conflicts of interest.

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This, in turn, could have an adverse effect on our results of operations and our ability to execute our growth strategy.

In the event that we terminate any of our management agreements, we can provide no

assurances that we could find a replacement hotel manager or that any replacement hotel manager will be successful in operating our hotels.

In the event that we terminate any of our management agreements, we can provide no assurances that we could find a replacement hotel manager or that any replacement hotel manager will be successful in operating our hotels.

If any of the foregoing were to occur, it could materially and adversely affect us.

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networks could result in a disruption to our booking or sales systems or other operations, in increased costs (e.g., related to response, investigation, and notification) or in potential litigation and liability.

In addition, public disclosure or loss of customer or proprietary information could result in damage to the hotel manager’s reputation, a loss of confidence among hotel guests, reputational harm for our hotels and potential litigation, any of which may have a material adverse effect on our business, financial condition and results of operations.

In addition, public disclosure or loss of customer or proprietary information could result in damage to the hotel manager’s reputation, a loss of confidence among hotel guests, reputational harm for our hotels, potential litigation and increased regulatory oversight, including governmental investigations, enforcement actions, and regulatory fines, any of which may have a material adverse effect on our business, financial condition and results of operations.

In the conduct of our business, we rely on relationships with third parties, including cloud data storage and other information technology service providers, suppliers, distributors, contractors, and other external business partners, for certain functions or for services in support of key portions of our operations.

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There can be no assurance that the security measures we have taken to protect the contents of these systems will prevent failures, inadequacies or interruptions in system services or that system security will not be compromised through system or user error, physical or electronic break-ins, computer viruses, or attacks by hackers.

Any such compromise could have a material adverse effect on our business, our financial reporting and compliance, and could subject us to or result in liability claims, monetary losses or regulatory penalties which could be significant.

Any such compromise could have a material adverse effect on our business, our financial reporting and compliance, and could subject us to or result in liability claims, litigation, monetary losses or regulatory oversight, investigations or penalties which could be significant.

In addition, the cost and operational consequences of responding to cybersecurity incidents and implementing remediation measures could be significant.

Like many corporations, our information networks and systems are a target of attacks.

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Moreover, as cyberattacks increase in frequency and magnitude, we may be unable to obtain cybersecurity insurance in amounts and on terms we view as adequate for our operations.

In addition, increased regulation of data collection, use and retention practices, including self-regulation and industry standards, changes in existing laws and regulations, enactment of new laws and regulations, increased enforcement activity, and changes in interpretation of laws, could increase our cost of compliance and operation, limit our ability to grow our business or otherwise harm the Company.

Costs associated with, or failure to maintain, brand operating standards may materially and adversely affect our results of operations and profitability.

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If a franchise license is terminated due to our failure to make required improvements or to otherwise comply with its terms, we also may be liable to the franchisor for a termination payment, which could materially and adversely affect our results of operations and profitability.

If we were to lose a brand license, the underlying value of a particular hotel could decline significantly (including from the loss of brand name recognition, marketing support, guest loyalty programs, brand manager or franchisor central reservation systems or

other systems), which could require us to recognize an impairment on the hotel.

Furthermore, the loss of a franchise license at a particular hotel could harm our relationship with the franchisor or brand manager and cause us to incur significant costs to obtain a new franchise license or brand management agreement for the particular hotel.

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and lack of availability of rooms or meeting spaces for revenue-generating activities during construction, modernization or renovation projects.

If our properties are not updated to meet guest preferences, if properties under development or renovation are delayed in opening as scheduled, or if renovation investments adversely affect or fail to improve performance, our operations and financial results could be negatively affected.

If our properties are not updated to meet guest preferences or brand standards under our management and franchise agreements, if properties under development or renovation are delayed in opening as scheduled, or if renovation investments adversely affect or fail to improve performance, our operations and financial results could be negatively affected.

Our hotels are geographically concentrated in a limited number of markets and, accordingly, we could be disproportionately harmed by adverse changes to these markets, natural disasters, climate change and related regulations, or terrorist attacks.

A significant portion of our room count is located in a concentrated number of markets that exposes us to greater risk to local economic or business conditions, changes in hotel supply in these markets, and other conditions than more geographically diversified hotel companies.

As of December 31, 2021, hotels in New York City, Chicago, San Francisco, Boston, New Orleans, Florida and Hawaii represented approximately 64% of our room count, with our hotels in Florida, San Francisco and Hawaii alone each representing greater than 11% of our room count, and 51% of our total revenue in 2021.

As of December 31, 2022, hotels in Florida, San Francisco, Hawaii, Chicago, New York City, New Orleans and Boston represented approximately 66% of our room count, with our hotels in Florida, San Francisco and Hawaii alone each representing greater than 12% of our room count and 48% of our total revenue in 2022.

An economic downturn, an increase in hotel supply, a force majeure event, a natural disaster, changing weather patterns and other physical effects of climate change (including supply chain disruptions), a terrorist attack or similar event in any one of these markets likely would cause a decline in the hotel market and adversely affect occupancy rates, the financial performance of our hotels in these markets and our overall results of operations, which could be material, and could significantly increase our costs.

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In addition, we carry insurance to respond to both first-party and third-party liability losses related to terrorism under a program authorized by Congress following the September 11, 2001 terrorist attacks, which is set to expire in 2027.

increase stated exclusions or to otherwise effectively decrease the scope of coverage available, perhaps to the point where it is effectively unavailable.

If the program is not extended or renewed upon its expiration in 2027, or if there are changes to the program that would negatively affect insurance carriers, premiums for terrorism insurance coverage will likely increase and/or the terms of such insurance may be materially amended to increase stated exclusions or to otherwise effectively decrease the scope of coverage available, perhaps to the point where it is effectively unavailable.

We have investments in joint venture projects, which limit our ability to manage third-party risks associated with these projects.

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From time to time, we may be required to remediate such substances or remove, abate or manage asbestos, mold, radon gas, lead or other hazardous conditions at our properties.

The presence or release of such toxic or hazardous substances at our currently or formerly owned or leased properties could result in limitations on or interruptions to our operations or in third-party claims for personal injury, property or natural resource damages, business interruption or other losses, including liens in favor of the government for costs the government incurs in cleaning up contamination.

up contamination.

Such claims and the need to investigate, remediate or otherwise address hazardous, toxic or unsafe conditions could adversely affect our operations, the value of any affected real property, or our ability to sell, lease or assign our rights in any such property, or could otherwise harm our business or reputation.

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Certain of our debt agreements impose significant operating and financial restrictions on us and our subsidiaries, which may prevent us from capitalizing on business opportunities or could result in foreclosure of our hotels.

The debt agreements and instruments that govern our outstanding indebtedness, including our senior unsecured credit facilities and senior secured notes, impose significant financial and operating restrictions on us, including covenants that may restrict our ability to implement our business plan, finance future operations, respond to changing business and economic conditions, secure additional financing, and engage in opportunistic transactions, such as strategic acquisitions, mergers or asset sales or transactions with affiliates.

In addition, if we fail to satisfy the covenants contained in the credit facilities, our ability to borrow additional funds under the credit facilities may be restricted.

Furthermore, the credit agreements that govern our senior unsecured credit facilities contain certain affirmative covenants that require us to be in compliance with certain leverage, liquidity and other financial ratios and the mortgage-backed loans of our subsidiaries also require them to maintain certain debt service coverage ratios and minimum net worth requirements.

The debt agreements and instruments that govern our outstanding indebtedness, including our senior unsecured credit facility and senior notes, impose significant financial and operating restrictions on us, including covenants that may restrict our ability to implement our business plan, finance future operations, respond to changing business and economic conditions, secure additional financing, and engage in opportunistic transactions, such as strategic acquisitions, mergers or asset sales or transactions with affiliates.

In addition, if we fail to satisfy the covenants contained in the credit facility, our ability to borrow additional funds under the credit facility may be restricted.

Furthermore, the credit agreements that govern our senior unsecured credit facility and senior notes contain certain affirmative covenants that require us to be in compliance with certain leverage, liquidity and other financial ratios, and the mortgage-backed loans of our subsidiaries also require them to maintain certain debt service coverage ratios and minimum net worth requirements.

We cannot assure you that we will be able to comply with our financial or other covenants and, if we fail to do so, we may not be able to obtain waivers from the lenders and/or amend the covenants.

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The IRS Ruling received is binding on the IRS, however, the validity of the IRS Ruling is based upon and subject to the accuracy of factual statements and representations made to the IRS by Hilton Parent.

As a result of the IRS’s ruling policy at the time of Hilton Parent’s submission, with respect to transactions under Section 355 of the Code, the IRS Ruling is

limited to specified aspects of the spin-off under Section 355 of the Code and does not represent a determination by the IRS that all of the requirements necessary to obtain tax-free treatment to holders of Hilton Parent’s common stock and to Hilton have been satisfied.

As a result of the IRS’s ruling policy at the time of Hilton Parent’s submission, with respect to transactions under Section 355 of the Code, the IRS Ruling is limited to specified aspects of the spin-off under Section 355 of the Code and does not represent a determination by the IRS that all of the requirements necessary to obtain tax-free treatment to holders of Hilton Parent’s common stock and to Hilton have been satisfied.

Moreover, if any statement or representation upon which the IRS Ruling is based is incorrect or untrue in any material respect, or if the facts upon which the IRS Ruling is based are materially different from the facts that prevailed at the time of the spin-off, the IRS Ruling could be invalidated.

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Under the Distribution Agreement and related ancillary agreements, from and after the spin-offs, each of Hilton Parent, Park Parent and HGV Parent are generally responsible for the debts, liabilities and other obligations related to the business or businesses which they own and operate following the spin-off.

Although we do not expect to be liable for any obligations that are not allocated to us under the Distribution Agreement, a court could disregard the allocation agreed to between the parties, and require that we assume responsibility for obligations allocated to Hilton Parent or HGV (for example, tax and/or environmental liabilities), particularly if Hilton Parent or HGV Parent were to refuse or were unable to pay or perform the allocated obligations.

responsibility for obligations allocated to Hilton Parent or HGV (for example, tax and/or environmental liabilities), particularly if Hilton Parent or HGV Parent were to refuse or were unable to pay or perform the allocated obligations.

See “Spin-off Related Agreements—Distribution Agreement.”

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federal income tax purposes prior to the Merger and that Park will be able to continue to qualify as a REIT following the Merger.

However, if Chesapeake has failed to qualify as a REIT, Merger Sub would succeed to significant tax liabilities (including the significant tax liability that would result from the deemed sale of assets by Chesapeake pursuant to the Merger) the economic burden of which would be borne by PK Domestic and Park, and Park could possibly lose its REIT status should disqualifying activities continue after the Merger.

However, if Chesapeake has failed to qualify as a REIT, Merger Sub would succeed to significant tax liabilities (including the significant tax liability that would result from the deemed sale of assets by Chesapeake pursuant to the Merger) the economic burden of which would be borne by PK Domestic and Park, and Park could possibly lose its REIT status if disqualifying activities continued after the Merger.

Park’s REIT status is also dependent upon the ongoing qualification of subsidiary entities qualifying as REITs or TRSs, as applicable, as a result of its substantial ownership interest in those entities.

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We are subject to U.S.

and state income tax on the income earned by our TRSs.

federal and state income tax on the income earned by our TRSs.

Any of these taxes would decrease cash available for distributions to stockholders.

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We believe that the properties that are leased to our TRS lessees are qualified lodging facilities.

Although we intend to monitor future acquisitions and improvements of properties, REIT provisions of the Code provide no or only

limited guidance for making determinations under the requirements for qualified lodging facilities, and there can be no assurance that these requirements will be satisfied.

Although we intend to monitor future acquisitions and improvements of properties, REIT provisions of the Code provide no or only limited guidance for making determinations under the requirements for qualified lodging facilities, and there can be no assurance that these requirements will be satisfied.

Risks Related to Ownership of Our Common Stock

Anti-takeover provisions in our organizational documents and Delaware law might discourage or delay acquisition attempts for us that stockholders might consider favorable.

Our amended and restated certificate of incorporation and bylaws contains provisions that may make the merger or acquisition of our company more difficult without the approval of our Board of Directors.

Our amended and restated certificate of incorporation and bylaws contains provisions that may make the merger or acquisition of our company more difficult without the approval of our Board.

Among other things, the provisions:

include a restriction on ownership and transfer of our stock to prevent any person from acquiring more than 9.8% (in value or by number of shares, whichever is more restrictive) of our outstanding common stock or more than 9.8% (in value or by number of shares, whichever is more restrictive) of any outstanding class or series of our preferred stock without the approval of our Board of Directors (the “Ownership Limitation”);

would allow us to authorize the issuance of undesignated preferred stock in connection with a stockholder rights plan or otherwise, the terms of which may be established and the shares of which may be issued without stockholder approval, and which may include super voting, special approval, dividend, or other rights or preferences superior to the rights of the holders of common stock (although we do not have a stockholder rights plan, and our policy is to either submit any such plan to stockholders for ratification or cause such plan to expire within a year);

provide that our Board of Directors is expressly authorized to make, alter or repeal our bylaws;

provide that our Board is expressly authorized to make, alter or repeal our bylaws;

establish advance notice requirements for nominations for elections to our Board or for proposing matters that can be acted upon by stockholders at stockholder meetings.

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In order for us to maintain our qualification as a REIT under the Code, not more than 50% in value of our outstanding stock may be owned, directly or indirectly, by five or fewer individuals (as defined in the Code to include certain entities) at any time during the last half of each taxable year.

Our amended and restated certificate of incorporation also contains other limitations, including the Ownership Limitation, and prohibits any person from:

Our amended and restated certificate of incorporation also contains other limitations, including the

Ownership Limitation, and prohibits any person from:

(1) beneficially or constructively owning, as determined by applying certain attribution rules of the Code, our stock if that would result in us being “closely held”

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business