What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2025-02-20 compared with 2024-02-28 · 224 added, 246 removed, 780 unchanged (38% of the section changed)

4 unchanged sentences

Consolidated Balance Sheets as of December 31, 2024 and 2023

Consolidated Statements of Comprehensive Income (Loss) for the Years Ended December 31, 2023 , 2022 and 2021

Consolidated Statements of Cash Flows for the Years Ended Decembe r 31, 2023 , 2022 and 2021

Consolidated Statements of Equity for the Yea rs Ended December 31, 2023 , 2022 and 2021

Consolidated Statements of Operations for the Years Ended December 31, 2024 , 2023 and 2022

Consolidated Statements of Cash Flows for the Years Ended December 31, 2024 , 2023 and 2022

Consolidated Statements of Equity for the Years Ended December 31, 2024 , 2023 and 2022

Notes to Consolidated Financial Statements

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We have audited the accompanying consolidated balance sheets of Park Hotels & Resorts Inc.

(the Company) as of December 31, 2023 and 2022, the related consolidated statements of comprehensive income (loss), cash flows and equity for each of the three years in the period ended December 31, 2023, and the related notes and financial statement schedule listed in the Index at Item 15 (collectively referred to as the “consolidated financial statements”).

(the Company) as of December 31, 2024 and 2023, the related consolidated statements of operations, cash flows and equity for each of the three years in the period ended December 31, 2024, and the related notes and financial statement schedule listed in the Index at Item 15 (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, in conformity with U.S.

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(1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.

The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Assessment of Property and Equipment for Impairment

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If it is determined that the expected undiscounted future cash flows are less than the net book value of the asset group, the excess of the net book value over the estimated fair value is recorded within impairment losses.

Auditing management’s assessment of impairment of property and equipment was complex and highly judgmental due to the significant estimation required in determining the timing and amount of expected undiscounted future cash flows as well as capitalization and discount rates used to assess properties for impairment.

Auditing management’s assessment of impairment of property and equipment was complex and highly judgmental due to the significant estimation required in determining the timing and amount of expected undiscounted future cash flows and capitalization rates used to assess properties for impairment.

In particular, the expected future cash flows are based on significant estimates, including projections of future income and estimated growth rates.

Further, a fair value measurement is highly sensitive to changes in capitalization and discount rates, that are estimated based on future economic and market conditions.

Further, a fair value measurement can be highly sensitive to changes in capitalization and discount rates, that are estimated based on future economic and market conditions.

How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design, and tested the operating effectiveness of controls over the Company’s review process for evaluating property and equipment for impairment, including controls over management’s review of the significant assumptions described above.

Our testing of the Company’s impairment assessment included, among other procedures, evaluating the significant assumptions and testing the completeness and accuracy of the underlying data used by the Company to develop the expected future cash flows for their properties.

We compared the significant assumptions, including discount rates, growth rates and capitalization rates, used by management to current industry and economic trends, and changes to the Company’s strategy.

We compared the significant assumptions, including growth rates and capitalization rates, used by management to current industry and economic trends, and changes to the Company’s strategy.

We assessed the historical accuracy of management’s estimates and performed sensitivity analyses of significant assumptions to evaluate changes in the expected future cash flows that would result from changes in the assumptions.

We also involved our valuation specialists to assist in our evaluation of the assumptions used in management's estimates of fair value.

We also evaluated certain assumptions used in management's assessment for impairment using external sources.

/s/ Ernst & Young LLP

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(the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2023 and 2022, the related consolidated statements of comprehensive income (loss), cash flows and equity for each of the three years in the period ended December 31, 2023, and the related notes and financial statement schedule listed in the Index at Item 15 and our report dated February 28, 2024 expressed an unqualified opinion thereon.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2024 and 2023, the related consolidated statements of operations, cash flows and equity for each of the three years in the period ended December 31, 2024, and the related notes and financial statement schedule listed in the Index at Item 15 and our report dated February 20, 2025 expressed an unqualified opinion thereon.

Basis for Opinion

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Additional paid-in capital 4,063 4,156

(Accumulated deficit) retained earnings ( 344 ) 16

Accumulated deficit ( 420 ) ( 344 )

Total stockholders' equity 3,645 3,814

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PARK HOTELS & RESORTS INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

CONSOLIDATED STATEMENTS OF OPERATIONS

(in millions, except per share data)

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Total expenses 2,276 2,591 2,218

Gain (loss) on sales of assets, net 15 13 ( 5 )

Gain on sale of assets, net 8 15 13

Gain on derecognition of assets 60 221 —

Operating income (loss) 343 296 ( 179 )

Operating income 391 343 296

Interest income 21 38 13

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Interest expense associated with hotels in receivership ( 60 ) ( 45 ) ( 30 )

Equity in earnings (losses) from investments in affiliates 11 15 ( 7 )

Other gain (loss), net 4 96 ( 7 )

Income (loss) before income taxes 144 173 ( 450 )

Income tax expense ( 38 ) — ( 2 )

Net income (loss) 106 173 ( 452 )

Equity in earnings from investments in affiliates 31 11 15

Other (loss) gain, net ( 4 ) 4 96

Income before income taxes 165 144 173

Income tax benefit (expense) 61 ( 38 ) —

Net income 226 106 173

Net income attributable to noncontrolling interests ( 14 ) ( 9 ) ( 11 )

Net income (loss) attributable to stockholders $ 97 $ 162 $ ( 459 )

Other comprehensive income, net of tax expense:

Change in fair value of interest rate swap, net of tax expense of $ 0

Loss from interest rate swap reclassified into earnings — — 2

Total other comprehensive income — — 4

Comprehensive income (loss) 106 173 ( 448 )

Comprehensive income attributable to noncontrolling interests ( 9 ) ( 11 ) ( 7 )

Comprehensive income (loss) attributable to stockholders $ 97 $ 162 $ ( 455 )

Earnings (loss) per share:

Earnings (loss) per share – Basic $ 0.44 $ 0.71 $ ( 1.95 )

Earnings (loss) per share – Diluted $ 0.44 $ 0.71 $ ( 1.95 )

Net income attributable to stockholders $ 212 $ 97 $ 162

Earnings per share:

Earnings per share – Basic $ 1.02 $ 0.44 $ 0.71

Earnings per share – Diluted $ 1.01 $ 0.44 $ 0.71

Weighted average shares outstanding – Basic 207 214 228

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Operating Activities:

Net income (loss) $ 106 $ 173 $ ( 452 )

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:

Net income $ 226 $ 106 $ 173

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization 257 287 269

(Gain) loss on sale of assets, net ( 15 ) ( 13 ) 5

Gain on sales of assets, net ( 8 ) ( 15 ) ( 13 )

Gain on derecognition of assets ( 60 ) ( 221 ) —

Impairment and casualty loss 204 6 9

Equity in (earnings) losses from investments in affiliates ( 11 ) ( 15 ) 7

Other (gain) loss, net ( 2 ) ( 90 ) 7

Impairment loss 12 204 6

Equity in earnings from investments in affiliates ( 31 ) ( 11 ) ( 15 )

Other loss (gain), net 3 ( 2 ) ( 90 )

Share-based compensation expense 19 18 17

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Other ( 3 ) ( 7 ) 1

Net cash provided by (used in) operating activities 503 409 ( 137 )

Net cash provided by operating activities 429 503 409

Investing Activities:

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Reduction of restricted cash from derecognition of assets — ( 30 ) —

Insurance proceeds for property damage claims — — 4

Distributions from unconsolidated affiliates 37 — 11

Contributions to unconsolidated affiliates ( 7 ) ( 10 ) —

Purchase of investment security, net — — ( 4 )

Net cash (used in) provided by investing activities ( 166 ) ( 217 ) 87

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Proceeds from issuance of Senior Notes 550 — —

Borrowing from credit facilities — 50 —

Repurchase or redemption of Senior Notes ( 650 ) — —

Borrowings from credit facilities 200 — 50

Repayments of credit facilities — ( 50 ) ( 78 )

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Common Stock Additional

Comprehensive

Deficit) Retained Earnings

Balance as of December 31, 2021 236 $ 2 $ 4,533 $ ( 83 ) $ ( 49 ) $ 4,403

Share-based compensation, net — — 15 — — 15

Net (loss) income — — — ( 459 ) — 7 ( 452 )

Other comprehensive income — — — — 4 — 4

Net income — — — 162 11 173

Dividends and dividend equivalents (1)

— — — ( 63 ) — ( 63 )

Repurchase of common stock ( 12 ) — ( 227 ) — — ( 227 )

Distributions to noncontrolling interests — — — — ( 10 ) ( 10 )

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— — — ( 291 ) — ( 291 )

Distributions to noncontrolling interests — — — — — ( 7 ) ( 7 )

Repurchase of common stock ( 8 ) — ( 116 ) — — ( 116 )

Distributions to noncontrolling interests — — — — ( 7 ) ( 7 )

Reallocation of noncontrolling interests

— — 12 — ( 12 ) —

Balance as of December 31, 2024 203 $ 2 $ 4,063 $ ( 420 ) $ ( 51 ) $ 3,594

____________________________________________________________________________________

(1) Dividends declared per common share were $ 0.28 and $ 2.15 , which includes a special cash dividend of $ 0.77 per common share, for the years ended December 31, 2022 and December 31, 2023, respectively.

(1) Dividends declared per common share were $ 1.40 , $ 2.15 , which included a special cash dividend of $ 0.77 per common share, and $ 0.28 for the years ended December 31, 2024, 2023 and 2022, respectively.

Refer to the notes to the consolidated financial statements.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Organization and Recent Events

Park Hotels & Resorts Inc.

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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.

(“Hilton” or "Parent") completed the spin-off of a portfolio of premium hotels and resorts that established Park Hotels & Resorts Inc.

as an independent, publicly traded company.

On May 5, 2019, the Company, PK Domestic Property LLC, an indirect subsidiary of the Company (“PK Domestic”), and PK Domestic Sub LLC, a wholly owned subsidiary of PK Domestic (“Merger Sub”) entered into a definitive Agreement and Plan of Merger (the “Merger Agreement”) with Chesapeake Lodging Trust (“Chesapeake”).

On September 18, 2019, pursuant to the terms and subject to the conditions set forth in the Merger Agreement, Chesapeake merged with and into Merger Sub (the “Merger”) and each of Chesapeake’s common shares of beneficial interest, $ 0.01 par value per share, was converted into $ 11.00 in cash and 0.628 of a share of our common stock.

No fractional shares of our common stock were issued in the Merger.

The value of any fractional interests to which a Chesapeake shareholder would otherwise have been entitled was paid in cash.

On September 18, 2019, we acquired Chesapeake Lodging Trust.

We are a real estate investment trust (“REIT”) for United States (“U.S.”) federal income tax purposes.

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From the date of our spin-off from Hilton, Park Intermediate Holdings LLC (our “Operating Company”), directly or indirectly, has held all our assets and has conducted all of our operations.

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

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 are structured as a traditional umbrella partnership REIT ("UPREIT").

Park Parent is the managing member of our Operating Company, and PK Domestic REIT Inc., a direct subsidiary of Park Parent, is a member of our Operating Company.

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

Recent Events

In October 2023, the trustee for the $ 725 million non-recourse CMBS loan ("SF Mortgage Loan") secured by two of our San Francisco hotels – the 1,921 -room Hilton San Francisco Union Square and the 1,024 -room Parc 55 San Francisco – a Hilton Hotel (collectively, the "Hilton San Francisco Hotels") filed a lawsuit against the borrowers under the SF Mortgage Loan.

In connection with the lawsuit, the court appointed a receiver to take control of the Hilton San Francisco Hotels and their operations, and thus, we have no further economic interest in the operations of the hotels.

The receiver will operate and has authority over the hotels and, until no later than November 1, 2024, has the ability to sell the hotels.

The court order contemplates that the receivership will end with a non-judicial foreclosure by December 2, 2024, if the hotels are not sold within the predetermined sale period.

Basis of Presentation and Summary of Significant Accounting Policies

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Actual results could differ from those estimates.

Reclassifications

Certain line items on the consolidated balance sheet as of December 31, 2022 and consolidated statements of comprehensive income (loss) for the year ended December 31, 2022 and 2021 have been reclassified to conform to the current period presentation.

Summary of Significant Accounting Policies

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We perform an analysis to determine the recoverability of the asset’s carrying value by comparing the expected undiscounted future cash flows to the net book value of the asset.

If it is determined that the expected undiscounted future cash flows are less than the net book value of the asset, the excess of the net book value over the estimated fair value is recorded in our consolidated statements of comprehensive income (loss) within impairment losses.

If it is determined that the expected undiscounted future cash flows are less than the net book value of the asset, the excess of the net book value over the estimated fair value is recorded in our

consolidated statements of operations within impairment losses.

Fair value is generally estimated using valuation techniques that consider the discounted cash flows of the asset using discount and capitalization rates deemed reasonable for the type of asset, as well as prevailing market conditions, appraisals, recent similar transactions in the market and, if appropriate and available, current estimated net sales proceeds from pending offers.

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Further, the related assets and liabilities of the held for sale property will be classified as assets held for sale in our consolidated balance sheets.

Any gains on sales of properties are recognized at the time of sale or deferred and recognized in net income (loss) in subsequent periods as any relevant conditions requiring deferral are satisfied.

Any gains on sales of properties are recognized at the time of sale or deferred and recognized in net income in subsequent periods as any relevant conditions requiring deferral are satisfied.

Investments in Affiliates

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We consolidate entities when we own more than 50 percent of the voting shares of a company or otherwise have a controlling financial interest.

References in these financial statements to net income (loss) attributable to stockholders do not include non-controlling interests, which represent the outside ownership interests of our consolidated, non-wholly owned entities and are reported separately.

References in these financial statements to net income attributable to stockholders do not include non-controlling interests, which represent the outside ownership interests of our consolidated, non-wholly owned entities and are reported separately.

We hold investments in affiliates that primarily own or lease hotels.

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We account for investments using the equity method when we have the ability to exercise significant influence over the entity, typically through a more than minimal investment.

Our proportionate share of earnings (losses) from our equity method investments is presented as equity in earnings (losses) from investments in affiliates in our consolidated statements of comprehensive income (loss).

Our proportionate share of earnings (losses) from our equity method investments is presented as equity in earnings from investments in affiliates in our consolidated statements of operations.

Distributions from investments in affiliates are presented as an operating activity in our consolidated statements of cash flows when such distributions are a return on investment.

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If an identified event or change in circumstances requires an evaluation to determine if an investment may have an other-than-temporary impairment, we assess the fair value of the investment based on accepted valuation methodologies, which include discounted cash flows, estimates of sales proceeds and external appraisals.

If an investment’s fair value is below its carrying value and the decline is considered to be other-than-temporary, we will recognize an impairment loss in equity in earnings (losses) from investments in affiliates in our consolidated statements of comprehensive income (loss).

If an investment’s fair value is below its carrying value and the decline is considered to be other-than-temporary, we will recognize an impairment loss in equity in earnings from investments in affiliates in our consolidated statements of operations.

Non-controlling Interests

We present the portion of any equity that we do not own in entities that we have a controlling financial interest (and thus consolidate) as non-controlling interests and classify those interests as a component of total equity, separate from total stockholders’ equity, on our consolidated balance sheets.

For consolidated joint ventures with pro rata distribution allocations, net income or loss is allocated between the joint venture partners based on their respective stated ownership percentages.

In addition, we include net income (loss) attributable to the noncontrolling interest in net income (loss) in our consolidated statements of comprehensive income (loss).

For consolidated joint ventures with pro rata distribution allocations, net income or loss is allocated between the joint venture partners based on their respective stated ownership

In addition, we include net income (loss) attributable to the noncontrolling interest in net income in our consolidated statements of operations.

Intangible Assets

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We review all finite lived intangible assets for impairment when circumstances indicate that their carrying amounts may not be recoverable.

If the carrying value of an asset group is not recoverable, we recognize an impairment loss for the excess of the carrying value over the fair value in our consolidated statements of comprehensive income (loss).

If the carrying value of an asset group is not recoverable, we recognize an impairment loss for the excess of the carrying value over the fair value in our consolidated statements of operations.

Asset Acquisitions

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The classification of assets and liabilities within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement in its entirety at the end of each reporting period.

Derivative Instruments

We may use derivative instruments as part of our overall strategy to manage our exposure to market risks associated with fluctuations in interest rates.

We will regularly monitor the financial stability and credit standing of the counterparties to our derivative instruments.

Under the terms of certain loan agreements, we may be required to maintain derivative financial instruments to manage interest rates.

We do not enter into derivative financial instruments for trading or speculative purposes.

We record all derivatives at fair value.

On the date the derivative contract is entered, we designate the derivative as one of the following:

a hedge of a forecasted transaction or the variability of cash flows to be paid (“cash flow hedge”);

a hedge of the fair value of a recognized asset or liability (“fair value hedge”);

or an undesignated hedge instrument.

Changes in the fair value of a derivative that is qualified, designated and highly effective as a cash flow hedge or net investment hedge are recorded in other comprehensive income in the consolidated statements of comprehensive income (loss) until they are reclassified into earnings in the same period or periods during which the hedged transaction affects earnings.

Changes in the fair value of a derivative that is qualified, designated and highly effective as a fair value hedge, along with the gain or loss on the hedged asset or liability that is attributable to the hedged risk, are recorded in current period earnings.

Changes in the fair value of undesignated derivative instruments and the ineffective portion of designated derivative instruments are reported in current period earnings.

Cash flows from designated derivative financial instruments are classified within the same category as the item being hedged in the consolidated statements of cash flows.

Cash flows from undesignated derivative financial instruments are included as an investing activity in our consolidated statements of cash flows.

If we determine that we qualify for and will designate a derivative as a hedging instrument, at the designation date we formally document all relationships between hedging activities, including the risk management objective and strategy for undertaking various hedge transactions.

This process includes matching all derivatives that are designated as cash flow hedges to specific forecasted transactions and linking all derivatives designated as fair value hedges to specific assets and liabilities in our consolidated balance sheets.

To the extent we have designated a derivative as a hedging instrument, each reporting period we assess the effectiveness of our designated hedges in offsetting the variability in the cash flows or fair values of the hedged assets or obligations using the Hypothetical Derivative Method.

This method compares the cumulative change in fair value of each hedging instrument to the cumulative change in fair value of a hypothetical hedging instrument, which has terms that identically match the critical terms of the respective hedged transactions.

Thus, the hypothetical hedging instrument is presumed to perfectly offset the hedged cash flows.

Ineffectiveness results when the cumulative change in the fair value of the hedging instrument exceeds the cumulative change in the fair value of the hypothetical hedging instrument.

We discontinue hedge accounting prospectively, when the derivative is not highly effective as a hedge, the underlying hedged transaction is no longer probable, or the hedging instrument expires, is sold, terminated or exercised.

Revenue Recognition

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Other revenues primarily relate to support services we provide to Hilton Grand Vacations (“HGV”).

Hotel operating revenues are disaggregated into room revenue, food and beverage revenue, ancillary hotel revenue and other revenue on the consolidated statements of comprehensive income (loss) to illustrate how economic factors affect the nature, amount and timing, and uncertainty of revenue and cash flows.

Hotel operating revenues are disaggregated into room revenue, food and beverage revenue, ancillary hotel revenue and other revenue on the consolidated statements of operations to illustrate how economic factors affect the nature, amount and timing, and uncertainty of revenue and cash flows.

Rooms revenue is recognized over time when rooms are occupied and food and beverage revenue is recognized at a point in time when goods and services have been delivered or rendered.

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Our advance deposit balance as of December 31, 2024 and 2023 was $ 120 million and $ 107 million, respectively, and are generally recognized as revenue within a one-year period.

Additionally, we collect sales, use, occupancy and similar taxes at our hotels, which we present on a net basis (excluded from revenues) in our consolidated statements of comprehensive income (loss).

Additionally, we collect sales, use, occupancy and similar taxes at our hotels, which we present on a net basis (excluded from revenues) in our consolidated statements of operations.

Share-based Compensation

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The requisite service period is the period during which an employee is required to provide service in exchange for an award.

We are a REIT for U.S.

federal income tax purposes.

We have been organized and operated, and we expect to continue to be organized and operate, 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.

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.

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

federal income tax on taxable income generated by our REIT activities that we distribute annually to our stockholders.

federal (and state) income tax on taxable income generated by our REIT activities that we distribute annually to our stockholders.

Accordingly, no provision for U.S.

federal income taxes has been included in our accompanying consolidated financial statements for the years ended December 31, 2024, 2023 and 2022 related to our REIT activities other than taxes related to our sale of built-in gain property (representing property held by us with an excess of fair value over tax basis on January 4, 2017).

We were subject to U.S.

federal income tax on taxable sales of built-in gain property during the five-year period following the date of our

spin-off, which ended in January 2022.

We remain subject to California income tax on taxable sales of built-in-gain property until January 2027.

In addition, we are subject to non-U.S.

income tax on foreign held REIT activities and certain sales of foreign investments.

We will remain subject to California income tax on taxable sales of built-in-gain property until January 2027.

Further, our taxable REIT subsidiaries (“TRSs”) are generally subject to U.S.

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Accounting Standards Not Yet Adopted

In November 2023, the FASB issued Accounting Standards Update ("ASU") No.

2023-07 ("ASU 2023-07"), Segment Reporting (Topic 280) – Improvements to Reportable Segment Disclosures, which enhances segment disclosures, including disclosures about significant segment expenses.

We expect to adopt ASU 2023-07 on a retrospective basis when the requirements become effective for the year-ended December 31, 2024.

We are currently evaluating the effect that ASU 2023-07 will have on our consolidated financial statements.

In December 2023, the FASB issued ASU No.

In December 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No.

2023-09 ("ASU 2023-09"), Income Taxes (Topic 740) - Improvements to Income Tax Disclosures, which enhances income tax disclosures, including disclosures about the existing rate reconciliation and income taxes paid information.

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We are currently evaluating the effect that ASU 2023-09 will have on our consolidated financial statements.

In November 2024, the FASB issued ASU No.

2024-03 ("ASU 2024-03"), Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40) , which adds guidance on providing qualitative and quantitative disclosures about certain costs and expenses.

Although early adoption is permitted, we expect to adopt ASU-2024 03 on a prospective basis when the requirements become effective for the year ended December 31, 2027.

We are currently evaluating the effect that ASU 2024-03 will have on our consolidated financial statements.

Accounting Standards Adopted

In November 2023, the FASB issued ASU No.

2023-07 ("ASU 2023-07"), Segment Reporting (Topic 280) – Improvements to Reportable Segment Disclosures , which enhances segment disclosures, including disclosures about significant segment expenses.

We adopted this ASU on a retrospective basis for the year-ended December 31, 2024.

We have added incremental disclosures identifying the title and position of the chief operating decision maker (“CODM”) and how the CODM uses our reported measure of segment profit or loss in assessing segment performance and deciding how to allocate resources, as well as incremental disclosures about our significant expenses for our only reportable segment .

Refer to Note 14:

"Business Segment Information" for additional information.

Acquisitions and Dispositions

In March 2023, we acquired two parcels of land, adjacent to the Hilton Hawaiian Village Waikiki Beach Resort, for a purchase price of approximately $ 18 million, including transaction costs.

During the year ended December 31, 2023, we acquired two parcels of land, adjacent to the Hilton Hawaiian Village Waikiki Beach Resort, for a purchase price of approximately $ 18 million, including transaction costs.

We accounted for the purchase as an acquisition of an asset, and the entire purchase price was allocated to land.

In December 2024, the consolidated joint venture that owned the DoubleTree Hotel Spokane City Center sold the hotel for gross proceeds of approximately $ 35 million.

Proceeds were used to repay the $ 14 million mortgage loan secured by the hotel, and after paying customary closing expenses, our pro-rata share of the remaining net proceeds was approximately $ 10 million and will be used for general corporate purposes.

We recognized a gain of approximately $ 8 million, which is included in gain on sale of assets, net in our consolidated statements of operations.

In July 2024, the unconsolidated joint venture that owned and operated the Hilton La Jolla Torrey Pines sold the hotel for gross proceeds of approximately $ 165 million, and our pro-rata share of the gross proceeds was approximately $ 41 million, which was reduced by our portion of debt of approximately $ 17 million.

We recognized a gain of approximately $ 19 million, which is included in equity in earnings from investments in affiliates in our consolidated statements of operations.

Additionally, in August 2024, we permanently closed the Hilton Oakland Airport and subsequently terminated its ground lease, returning the property to the ground lessor.

In February 2023, we sold the Hilton Miami Airport hotel for gross proceeds of $ 118.25 million.

We recognized a net gain of approximately $ 15 million, which is included in gain (loss) on sales of assets, net in our consolidated statements of comprehensive income (loss).

Additionally, in June 2023, the ground lessor terminated the ground lease for the Embassy Suites Phoenix Airport hotel and, pursuant to an agreement, we received an early termination fee of approximately $ 4 million, which is included in other gain (loss), net in our consolidated statements of comprehensive income (loss).

We recognized a net gain of approximately $ 15 million, which is included in gain on sale of assets, net in our consolidated statements of operations.

Additionally, in June 2023, the ground lessor terminated the ground lease for the Embassy Suites Phoenix Airport hotel and, pursuant to an agreement, we received an early termination fee of approximately $ 4 million, which is included in other (loss) gain, net in our consolidated statements of operations.

During the year ended December 31, 2022, we sold the five consolidated hotels listed in the table below and received total gross proceeds of approximately $ 149 million.

We recognized a net gain of approximately $ 15 million, which is included in gain (loss) on sales of assets, net in our consolidated statements of comprehensive income (loss).

We recognized a net gain of approximately $ 15 million, which is included in gain on sale of assets, net in our consolidated statements of operations.

Hotel Location Month Sold

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Hilton Garden Inn LAX/El Segundo El Segundo, California September 2022

In June 2022, we sold our ownership interests in the joint ventures that own and operate the Hilton San Diego Bayfront for gross proceeds of $ 157 million.

In June 2022, we sold our ownership interests in the joint ventures that owned and operated the Hilton San Diego Bayfront for gross proceeds of $ 157 million.

Our gross proceeds were reduced by $ 55 million for our share of the mortgage debt in the joint venture.

We recognized a gain of approximately $ 92 million, net of selling costs, which is included in other gain (loss), net in our consolidated statements of comprehensive income (loss).

Additionally, in October 2022, the joint ventures that own and operate the DoubleTree Hotel Las Vegas Airport sold the hotel for gross proceeds of approximately $ 22 million, and our pro-rata share of the gross proceeds was approximately $ 11 million.

We recognized a gain of approximately $ 9 million, which is included in equity in earnings (losses) from investments in affiliates in our consolidated statements of comprehensive income (loss).

During the year ended December 31, 2021, we sold the five consolidated hotels listed in the table below, received total gross proceeds of approximately $ 477 million and recognized a net $ 5 million loss due to selling costs , which is included in gain (loss) on sales of assets, net in our consolidated statements of comprehensive income (loss).

In addition, we recognized a $ 5 million impairment loss from the classification of the Hotel Adagio, Autograph Collection, as held for sale at June 30, 2021, as the selling costs reduced the gross proceeds to less than the net book value of the property, which is included in impairment and casualty loss in our consolidated statements of comprehensive income (loss).

Hotel Location Month Sold

W New Orleans – French Quarter

New Orleans, Louisiana April 2021

Hotel Indigo San Diego Gaslamp Quarter (1)

San Diego, California June 2021

Courtyard Washington Capitol Hill Navy Yard (1)

Washington, D.C.

Hotel Adagio, Autograph Collection San Francisco, California July 2021

Le Meridien San Francisco San Francisco, California August 2021

______________________________________________

(1) Sold as a portfolio in the same transaction.

We recognized a gain of approximately $ 92 million, net of selling costs, which is included in other (loss) gain, net in our consolidated statements of operations.

Additionally, in October 2022, the joint ventures that owned and operated the DoubleTree Hotel Las Vegas Airport sold the hotel for gross proceeds of approximately $ 22 million, and our pro-rata share of the gross proceeds was approximately $ 11 million.

We recognized a gain of approximately $ 9 million, which is included in equity in earnings from investments in affiliates in our consolidated statements of operations.

Property and Equipment

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10,182 10,092

Accumulated depreciation and amortization ( 2,633 ) ( 2,723 )

Accumulated depreciation ( 2,784 ) ( 2,633 )

$ 7,398 $ 7,459

Depreciation of property and equipment was $ 256 million, $ 286 million and $ 268 million during the years ended December 31, 2024, 2023 and 2022, respectively.

For the year ended December 31, 2023, we recognized an impairment loss of approximately $ 202 million related to one of the hotels securing our $ 725 million SF Mortgage Loan as a result of a decision to cease making debt service payments.

In October 2023, the Hilton San Francisco Hotels that secure the SF Mortgage Loan were placed into receivership.

During the year ended December 31, 2024, we recognized impairment losses of approximately $ 12 million related to two of our hotels subject to ground leases and our inability to recover the carrying value of the assets over the remaining lease term.

Refer to Note 8:

"Fair Value Measurements" for additional information.

For the year ended December 31, 2023, we recognized an impairment loss of approximately $ 202 million related to one of the hotels securing our $ 725 million non-recourse CMBS loan ("SF Mortgage Loan") as a result of a decision to cease making debt service payments.

In October 2023, the 1,921-room Hilton San Francisco Union Square and the 1,024-room Parc 55 San Francisco – a Hilton Hotel (collectively, the "Hilton San Francisco Hotels") that secure the SF Mortgage Loan were placed into receivership.

Refer to Note 7:

"Debt" and Note 8:

"Fair Value Measurements" for additional information.

For the year ended December 31, 2021, we recognized $ 5 million of impairment losses related to one of our hotels classified as held for sale as of June 30, 2021, which was subsequently sold in July 2021, as the estimated selling costs were expected to reduce the gross proceeds below the net book value of the property.

Consolidated Variable Interest Entities ("VIEs") and Investments in Affiliates

Consolidated VIEs

We consolidate VIEs that own three hotels in the U.S.

As of December 31, 2024, we consolidate VIEs that own two hotels in the U.S.

In December 2024, the consolidated joint venture that owned the DoubleTree Hotel Spokane City Center sold the hotel.

We are the primary beneficiary of these VIEs as we have the power to direct the activities that most significantly affect their economic performance.

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Unconsolidated Entities

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

As of December 31, 2024, three of our hotels are owned by unconsolidated joint ventures in which we hold an interest.

In July 2024, the joint ventures that owned and operated the Hilton La Jolla Torrey Pines sold the hotel.

These hotels are accounted for using the equity method and had total debt of approximately $ 685 million and $ 702 million as of December 31, 2024 and 2023, respectively.

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December 2026 — —

2024 Term Loan SOFR + 1.75 % (4)

May 2027 200 —

2025 Senior Notes 7.50 % June 2025 — 650

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2029 Senior Notes 4.88 % May 2029 750 750

2030 Senior Notes 7.00 % February 2030 550 —

Finance lease obligations 7.04 % 2025 to 2028 1 1

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(1) In June 2023, we fully repaid the $ 75 million mortgage loan secured by the W Chicago – City Center.

(1) In December 2024, the $ 14 million mortgage loan secured by the DoubleTree Hotel Spokane City Center was fully repaid when the hotel was sold.

(2) Assumes the exercise of all extensions that are exercisable solely at our option.

The mortgage loan for Hilton Denver City Center matures in 2042 but is callable by the lender with six months of notice.

The mortgage loan for Hilton Denver City Center matures in 2042 but became callable by the lender in August 2022 with six months of notice.

As of December 31, 2024, Park had not received notice from the lender.

(3) In February 2023, we fully repaid the $ 50 million outstanding balance under our amended and restated revolving credit facility ("Revolver").

The Revolver permits one or more standby letters of credit, up to a maximum aggregate outstanding balance of $ 50 million, to be issued on behalf of us.

(3) Our revolving credit facility ("Revolver") permits one or more standby letters of credit, up to a maximum aggregate outstanding balance of $ 50 million, to be issued on behalf of us.

As of December 31, 2024, we had approximately $ 4 million outstanding on a standby letter of credit and $ 946 million of available capacity under our Revolver.

In January 2025, the standby letter of credit was cancelled, increasing the available capacity under our Revolver to $ 950 million.

(4) The secured overnight financing rate ("SOFR") includes a credit spread adjustment of 0.1 %.

Mortgage Loans

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The HHV Mortgage Loan may be partially or fully prepaid, subject to prepayment penalties.

Our mortgage loans, which are associated with our three consolidated VIEs and mortgage loans acquired through the Merger, bear interest at fixed-rates.

Our other mortgage loans all bear interest at fixed-rates.

Certain of our mortgage loans require interest-only loan payments through their respective maturity dates, and the remaining mortgage loans require payments of both principal and interest on a monthly basis.

We are required to deposit with lenders certain cash reserves for restricted uses.

As of December 31, 2023 and 2022, our consolidated balance sheets included $ 1 million and $ 6 million of restricted cash, respectively, related to our mortgage loans.

Credit Facilities

2016 Term Loan and Revolver

In December 2016, we entered into a credit agreement (“Original Credit Agreement”) with Wells Fargo Bank, National Association as administrative agent, and certain others financial institutions party thereto as lenders.

The facility included a $ 1 billion Revolver, and a term loan due December 2021 ("2016 Term Loan").

We used proceeds from the issuance of the $ 725 million senior notes due 2028 ("2028 Senior Notes") to repay all amounts outstanding under our 2016 Term Loan.

In December 2016, we entered into a credit agreement (“Original Credit Agreement”) with Wells Fargo Bank, National Association as administrative agent, and certain other financial institutions party thereto as lenders.

In December 2022, we amended and restated the Original Credit Agreement ("Credit Agreement").

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Borrowings under the Revolver bear interest based upon the secured overnight financing rate ("SOFR") plus a credit spread adjustment of 0.1 %, plus an applicable margin based on our leverage ratio.

We incur an unused facility fee on the Revolver of between 0.2 % and 0.3 %, based on our level of usage.

The Credit Agreement also contains certain financial covenants including a maximum leverage ratio, minimum fixed charge coverage ratio, maximum secured leverage ratio, maximum unsecured indebtedness to unencumbered asset value ratio and minimum unencumbered adjusted net operating income to unsecured interest coverage ratio, certain of which were adjusted to revised levels through the end of the first quarter of 2024.

unused facility fee on the Revolver of between 0.2 % and 0.3 %, based on our level of usage.

The Credit Agreement allows us to conduct share repurchases, subject to compliance with the financial covenants, and released all collateral securing the Revolver and Senior Notes.

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Any outstanding standby letters of credit reduce the available borrowings on the Revolver by a corresponding amount.

As of December 31, 2023, we had approximately $ 4 million outstanding on a standby letter of credit.

In February 2023, we fully repaid the $ 50 million balance on our Revolver with a portion of the net proceeds from the sale of the Hilton Miami Airport hotel.

We capitalized $ 9 million of issuance costs during the year ended December 31, 2022.

As of December 31, 2024, we had approximately $ 4 million outstanding on a standby letter of credit, which was cancelled in January 2025.

2024 Term Loan

In May 2024, the Company, our Operating Company and PK Domestic Property LLC ("PK Domestic") amended the Credit Agreement to include a new $ 200 million senior unsecured term loan ("2024 Term Loan") with a scheduled maturity date of May 14, 2027.

Borrowings under the 2024 Term Loan bear interest based upon SOFR plus a credit spread adjustment of 0.1 %, plus an applicable margin based on our leverage ratio.

As of December 31, 2024, our all-in interest rate was 6.21 %.

We capitalized $ 2 million of financing fees incurred during the year ended December 31, 2024.

The amendment did not amend or modify existing financial maintenance covenants or other terms and provisions under our existing credit agreement, except to provide that income, value and debt of the Hilton San Francisco Hotels be excluded from the calculations of our leverage ratio, the fixed charge coverage ratio and the secured leverage ratio under the existing credit agreement.

2025 Senior Notes

In May 2020, our Operating Company, PK Domestic and PK Finance issued an aggregate of $ 650 million of senior notes due 2025 ("2025 Senior Notes").

We used $ 219 million of the net proceeds to repay a portion of the then outstanding balance under our Revolver, $ 69 million to partially repay the 2016 Term Loan and the remainder was used for general corporate purposes.

The 2025 Senior Notes bear interest at a rate of 7.500 % per annum, payable semi-annually in arrears on June 1 and December 1 of each year, beginning December 1, 2020.

The 2025 Senior Notes will mature on June 1, 2025.

We may redeem the 2025 Senior Notes, in whole or in part, at the applicable redemption prices set forth in the indenture.

On or after June 1, 2024, we may redeem the 2025 Senior Notes at 100 % of the principal amount, plus accrued and unpaid interest, if any, to, but excluding, the redemption date.

In May 2020, our Operating Company, PK Domestic and PK Finance Co-Issuer Inc.

(“PK Finance”) issued an aggregate of $ 650 million of senior notes due 2025 ("2025 Senior Notes"), which bore interest at a rate of 7.500 % per annum.

In May 2024, all of the 2025 Senior Notes were repurchased or redeemed using the proceeds from the $ 550 million of senior notes due in 2030 ("2030 Senior Notes") and the 2024 Term Loan.

2028 Senior Notes

In September 2020, our Operating Company, PK Domestic LLC and the PK Finance issued an aggregate of $ 725 million of 2028 Senior Notes.

In September 2020, our Operating Company, PK Domestic LLC and the PK Finance issued an aggregate of $ 725 million of senior notes due 2028 ("2028 Senior Notes").

The 2028 Senior Notes bear interest at a rate of 5.875 % per annum, payable semi-annually in arrears on April 1 and October 1 of each year beginning April 1, 2021.

Net proceeds were used to repay the 2016 Term Loan in full and to repay $ 80 million of the then outstanding balance under our Revolver.

We may redeem the 2028 Senior Notes, in whole or in part, at the applicable redemption prices set forth in the indenture.

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In May 2021, our Operating Company, PK Domestic and PK Finance issued an aggregate of $ 750 million of senior notes due 2029 ("2029 Senior Notes").

Net proceeds were used to repay $ 564 million of the then outstanding balance under our Revolver and $ 173 million of the 2019 Term Facility.

The 2029 Senior Notes bear interest at a rate of 4.875 % per annum, payable semi-annually in arrears on May 15 and November 15 of each year, beginning November 15, 2021.

The 2029 Senior Notes will mature on May 15, 2029.

We capitalized $ 13 million of issuance costs during the year ended December 31, 2021.

We may redeem the 2029 Senior Notes at any time prior to May 15, 2024, in whole or in part, at a redemption price equal to 100 % of the principal amount thereof plus accrued and unpaid interest, if any, to the redemption date plus a make-whole premium.

On or after May 15, 2024, we may redeem the 2029 Senior Notes, in whole or in part, at the applicable redemption prices set forth in the indenture.

We may redeem the 2029 Senior Notes, in whole or in part, at the applicable redemption prices set forth in the indenture.

On or after May 15, 2026, we may redeem the 2029 Senior Notes at 100 % of the principal amount, plus accrued and unpaid interest, if any, to, but excluding, the redemption date.

In addition, before May 15, 2024, we may redeem up to 40 % of the 2029 Senior Notes with the net cash proceeds from certain equity offerings at a redemption price of 104.875 % of the principal amount redeemed.

The 2025 Senior Notes, 2028 Senior Notes and 2029 Senior Notes (collectively, the “Senior Notes”) are guaranteed by us and by the subsidiaries of our Operating Company that also guarantee indebtedness under our credit facility.

2030 Senior Notes

In May 2024, our Operating Company, PK Domestic and PK Finance issued an aggregate of $ 550 million of 2030 Senior Notes.

Net proceeds from the 2030 Senior Notes and the 2024 Term Loan were used to repurchase or redeem all of the 2025 Senior Notes, and the remainder was used for general corporate purposes.

The 2030 Senior Notes bear interest at a rate of 7.000 % per annum, payable semi-annually in arrears on February 1 and August 1 of each year, beginning February 1, 2025.

The 2030 Senior Notes will mature on February 1, 2030.

We capitalized approximately $ 9 million of issuance costs during the year ended December 31, 2024.

We may redeem the 2030 Senior Notes, in whole or in part, at the applicable redemption prices set forth in the indenture.

On or after August 1, 2028, we may redeem the 2030 Senior Notes at 100 % of the principal amount, plus accrued and unpaid interest, if any, to, but excluding, the redemption date.

The 2028 Senior Notes, 2029 Senior Notes and 2030 Senior Notes (collectively, the “Senior Notes”) are guaranteed by Park Parent, PK Domestic REIT Inc., and by the subsidiaries of our Operating Company that also guarantee indebtedness under our credit facility.

The guarantees are full and unconditional and joint and several.

The Senior Notes are no longer secured following the amendment and restatement of the Original Credit Agreement in December 2022, at which time all collateral securing the Revolver and Senior Notes was released.

The indentures governing the Senior Notes contain customary covenants that limit the issuers’ ability and, in certain instances, the ability of the issuers’ subsidiaries, to borrow money, create liens on assets, make distributions and pay dividends on or redeem or repurchase stock, make certain types of investments, sell stock in certain subsidiaries, enter into agreements that restrict dividends or other payments from subsidiaries, enter into transactions with affiliates, issue guarantees of indebtedness, and sell assets or merge with other companies.

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Debt Maturities

The contractual maturities of our debt, assuming the exercise of all extensions that are exercisable solely at our option, as of December 31, 2023 were:

The contractual maturities of our debt, excluding the SF Mortgage Loan secured by the Hilton San Francisco Hotels and assuming the exercise of all extensions that are exercisable solely at our option, as of December 31, 2024 were:

Year (in millions)

Thereafter 550

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(1) Excludes the SF Mortgage Loan.

(2) Assumes the exercise of all extensions that are exercisable solely at our option.

Debt Associated with Hotels in Receivership

In June 2023, we ceased making debt service payments towards the $ 725 million SF Mortgage Loan, which was due November 2023, and we received a notice of default from the servicer.

In June 2023, we ceased making debt service payments towards the SF Mortgage Loan secured by the Hilton San Francisco Hotels, which was due November 2023, and we received a notice of default from the servicer.

The stated rate on the loan is 4.11 %;

beginning June 1, 2023, the default interest rate on the loan is 7.11 %.

however, beginning June 1, 2023, the default interest rate on the loan is 7.11 %.

Additionally, beginning June 1, 2023, the loan accrues a monthly late payment administrative fee of 3 % of the monthly amount due.

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In connection with the lawsuit, the court appointed a receiver to take control of the Hilton San Francisco Hotels, which serve as security for the SF Mortgage Loan, and their operations, and thus, we have no further economic interest in the operations of the hotels.

The receiver will operate and has authority over the hotels and, until no later than November 1, 2024, has the ability to sell the hotels.

The court order contemplates that the receivership will end with a non-judicial foreclosure by December 2, 2024, if the hotels are not sold within the predetermined sale period.

We derecognized the Hilton San Francisco Hotels from our consolidated balance sheet in October 2023, when the receiver took control of the hotels, and accordingly recognized a gain of $ 221 million which is included in gain on derecognition of assets in our consolidated statements of comprehensive income (loss) and recorded a contract asset of $ 760 million, which represents the liabilities we expect to be released from upon final resolution with the lender on the SF Mortgage Loan in exchange for the transfer of ownership of the Hilton San Francisco Hotels.

The $ 725 million SF Mortgage Loan will remain a liability until final resolution with the lender is concluded, and thus is included in debt associated with hotels in receivership on our consolidated balance sheet.

The receiver operates and has authority over the hotels and, until no later than March 31, 2025, has the

ability to sell the hotels.

The court order contemplates that the receivership will end with a non-judicial foreclosure by July 15, 2025, if the hotels are not sold within the predetermined sale period.

We derecognized the Hilton San Francisco Hotels from our consolidated balance sheet in October 2023, when the receiver took control of the hotels and, accordingly, recognized a gain of $ 221 million for the year ended December 31, 2023, which is included in gain on derecognition of assets in our consolidated statements of operations.

For the year ended December 31, 2024, we recognized a gain of $ 60 million representing accrued interest expense associated with the default of the SF Mortgage Loan, which resulted in a corresponding increase of the contract asset on our consolidated balance sheets as we expect to be released from this obligation upon final resolution with the lender on the SF Mortgage Loan in exchange for the transfer of ownership of the Hilton San Francisco Hotels.

As of December 31, 2024 and 2023, the contract asset on our consolidated balance sheets was $ 820 million and $ 760 million, respectively.

Fair Value Measurements

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Other mortgage loans 3 364 349 385 365

Revolver 3 — — 50 50

2024 Term Loan 3 200 199 — —

2025 Senior Notes 1 — — 650 652

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2029 Senior Notes 1 750 706 750 702

The fair value of the SF Mortgage Loan, which has a carrying value of $ 725 million as of both December 31, 2023 and 2022, and categorized as Level 3 of the fair value hierarchy, was $ 718 million and $ 692 million, respectively, as of December 31, 2023 and 2022.

2030 Senior Notes 1 550 559 — —

The fair value of the SF Mortgage Loan, which has a carrying value of $ 725 million as of both December 31, 2024 and 2023 and categorized as Level 3 of the fair value hierarchy, was $ 718 million as of both December 31, 2024 and 2023.

Refer to Note 7:

"Debt" for additional information.

During the year ended December 31, 2023, we recognized an impairment loss related to one of our hotels.

In October 2023, this hotel, along with the other hotel securing our SF Mortgage Loan, were placed into receivership.

During the year ended December 31, 2024, we recognized impairment losses related to two of our hotels subject to ground leases and our inability to recover the carrying value of the assets over the remaining lease term.

During the year ended December 31, 2023, we recognized an impairment loss related to one of our hotels and in October 2023, that hotel, along with the other hotel securing our SF Mortgage Loan, were placed into receivership.

Refer to Note 7:

"Debt" for additional information.

The estimated value of the asset that was measured on a nonrecurring basis was:

December 31, 2023

Fair Value Impairment Loss

(in millions)

The estimated fair value of the assets that were measured on a nonrecurring basis were:

December 31, 2024 December 31, 2023

Fair Value Impairment Loss Fair Value Impairment Loss

(in millions) (in millions)

Property and equipment (1)

$ 2 $ 12 $ 234 $ 202

Total $ 2 $ 12 $ 234 $ 202

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(1) Fair value as of December 31, 2023 was measured using significant unobservable inputs (Level 3).

We estimated fair value of the asset using a discounted cash flow analysis, with an estimated stabilized growth rate of 3 %, a discounted cash flow term of 10 years, terminal capitalization rate of 6.3 %, and discount rate of 9.5 %.

The discount and terminal capitalization rates used for the fair values of the asset reflected the risk profile of the market where the property is located.

(1) We estimated fair value of the assets during the year ended December 31, 2024, using a discounted cash flow analysis, with an estimated stabilized growth rate range of 2 % to 3 %, a discounted cash flow term of 10 years and a discount rate ranging from 17.0 % to 20.0 %.

We estimated fair value of the asset during the year ended December 31, 2023, using a discounted cash flow analysis, with an estimated stabilized growth rate of 3 %, a discounted cash flow term of 10 years, terminal capitalization rate of 6.3 % and discount rate of 9.5 %.

The discount and terminal capitalization rates used for the fair values of the assets reflected the risk profile of the markets where the properties are located.

Fair value as of both December 31, 2024 and 2023 were measured using significant unobservable inputs (Level 3).

We lease hotel properties, land and equipment under operating and financing leases.

We are subject to ground leases on 13 of our consolidated properties.

We are subject to ground leases on 12 of our consolidated properties as well as a lease for our corporate office.

Our leases expire, including options under lessor control, at various dates through 2083, with varying renewal options, and the majority expire before 2031.

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Total operating lease liabilities $ 225

As of both December 31, 2023 and 2022, the weighted average remaining operating lease term was 26.0 years, and the weighted average discount rate used to determine the operating lease liabilities was 5.7 % and 5.6 %, respectively.

The components of rent expense, which are primarily included in other property expenses in our consolidated statements of comprehensive income (loss), as well as supplemental cash flow and non-cash information for all operating leases were:

As of December 31, 2024 and 2023, the weighted average remaining operating lease term was 24.6 years and 26.0 years, respectively, and the weighted average discount rate used to determine the operating lease liabilities was 5.7 % as of both December 31, 2024 and 2023.

The components of rent expense, which are primarily included in other property expenses in our consolidated statements of operations, as well as supplemental cash flow and non-cash information for all operating leases were:

Year Ended December 31, 2024 Year Ended December 31, 2023 Year Ended December 31, 2022

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Operating cash flows for operating leases 24 24 29

Operating lease right-of-use asset reassessment (1)

Operating lease right-of-use asset reassessments (1)

____________________________________________________________________________________

(1) For the year ended December 31, 2024, amount represents an increase to our right-of-use assets and lease liability due to changes in lease term as well as discount rate upon lease remeasurements.

For the year ended December 31, 2022, amount represents a reduction to our right-of-use assets and lease liability due to a change in discount rate upon a lease remeasurement.

We are a REIT for U.S.

federal income tax purposes.

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

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The components of our provision for income taxes were:

Our TRSs are generally subject to U.S.

federal, state and local, and foreign income taxes (as applicable).

The components of our (benefit) provision for income taxes were:

Year Ended December 31,

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Total deferred ( 62 ) 14 ( 2 )

Total provision for income taxes $ 38 $ — $ 2

For the year ended December 31, 2023, the total provision for income taxes includes $ 28 million of income taxes associated with the effective exit from the Hilton San Francisco Hotels.

Total (benefit) provision for income taxes $ ( 61 ) $ 38 $ —

Reconciliations of our tax provision at the U.S.

statutory rate to the provision for income taxes were:

statutory rate to the (benefit) provision for income taxes were:

Year Ended December 31,

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Statutory U.S.

federal income tax provision (benefit) $ 30 $ 36 $ ( 94 )

federal income tax provision $ 35 $ 30 $ 36

State income taxes, net of U.S.

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Derecognition and remeasurement of deferred taxes ( 14 ) — ( 2 )

Provision for income taxes $ 38 $ — $ 2

(Benefit) provision for income taxes $ ( 61 ) $ 38 $ —

Deferred income taxes represent the tax effect of the differences between the book and tax bases of assets and liabilities plus carryforward items.

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Deferred income tax liabilities (2)

Net deferred tax liability $ ( 23 ) $ ( 9 )

Net deferred tax asset (liability) $ 39 $ ( 23 )

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(2) Included within other liabilities in our consolidated balance sheets.

The tax effects of the temporary differences and carryforwards that give rise to our net deferred tax liability were:

The tax effects of the temporary differences and carryforwards that give rise to our net deferred tax balances were:

(in millions)

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Net operating loss carryforwards $ 45 $ 49

Deferred income — 4

Investments 6 5

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Deferred tax liabilities ( 14 ) ( 29 )

Net deferred tax liability $ ( 23 ) $ ( 9 )

Net deferred tax asset (liability) $ 39 $ ( 23 )

As of December 31, 2024, we had U.S.

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federal net operating loss carryforwards of approximately $ 266 million are not subject to expiration.

state net operating loss carryforwards of approximately $ 406 million will begin to expire in 2030.

We made no cash distributions to our stockholders in 2021.

state net operating loss carryforwards of approximately $ 404 million, certain of which will begin to expire in 2030.

The cash distributions to stockholders in 2024, 2023 and 2022 are characterized, for U.S.

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Year Ended December 31,

2024 2023 2022

Common distributions (per share):

Ordinary dividends (1)

$ 1.285731 $ 0.000000 $ 0.000000

Capital gain distributions (2)

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(1) For the year ended December 31, 2024, the ordinary dividends include qualified dividends of $ 0.292918 .

(2) Capital gain distribution disclosure pursuant to Treasury Regulation §1.1061-6(c).

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For purposes of Internal Revenue Code Section 1061, which is generally applicable to direct and indirect holders of “applicable partnership interests”:

(i) the “One Year Amounts” are $ 0.000000 per share, and (ii) the “Three Year Amounts” are $ 0.000000 per share, with respect to both the 2023 and 2022 capital gain distributions.

(i) the “One Year Amounts” are $ 0.000000 per share, and (ii) the “Three Year Amounts” are $ 0.000000 per share, with respect to the 2024, 2023 and 2022 capital gain distributions.

Share-Based Compensation

We issue equity-based awards to our employees pursuant to the 2017 Omnibus Incentive Plan (the “2017 Employee Plan”) and our non-employee directors pursuant to the 2017 Stock Plan for Non-Employee Directors (the “2017 Director Plan”) both of which are amended and restated from time to time.

An amendment and restatement of the 2017 Employee Plan was approved by our Board in February 2023 and approved by our stockholders in April 2023 to, among other changes, increase the number of shares available to be issued by 6,070,000 , from 8,000,000 to 14,070,000 shares.

As of December 31, 2023, 7,496,571 shares of common stock remain available for future issuance.

The 2017 Employee Plan provides that a maximum of 14,070,000 shares of our common stock may be issued, and as of December 31, 2024, 6,670,858 shares of common stock remain available for future issuance.

The 2017 Director Plan provides that a maximum of 950,000 shares of our common stock may be issued, and as of December 31, 2024, 143,583 shares of common stock remain available for future issuance.

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Additionally, in November 2020, we granted special awards with vesting of these awards subject to the achievement of eight increasing levels of our average closing sales price per share, from $ 11.00 to $ 25.00 , over a consecutive 20 trading day period (“Share Price Target”).

One-eighth of PSUs will vest at each date a Share Price Target is achieved and any PSUs remaining after a four-year performance period will be forfeited.

As of December 31, 2023, six of the eight Share Price Targets were achieved and thus 75 % of the awards granted were vested.

One-eighth of PSUs vested at each date a Share Price Target was achieved, and at the end of the performance period in November 2024, six of the eight Share Price Targets were achieved (or 75 % of the awards granted were vested), while the remaining two Share Price Targets were not achieved and the associated PSUs were forfeited.

The following table provides a summary of PSUs for the years ended December 31, 2024, 2023 and 2022:

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Granted 393,225 21.93

Vested ( 428,255 ) 16.33

Forfeited ( 166,974 ) 34.47

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Granted 592,132 17.75

Vested ( 337,283 ) 26.99

Forfeited ( 265,854 ) 7.78

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Expected volatility (1)

36.0 % 48.0 % 57.5 %

Dividend yield (2)

Risk-free rate (3)

4.5 % 4.3 % 1.7 %

Expected term 3 years 3 years 3 years

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(1) Estimated using a blended approach of historical and implied volatility.

Historical volatility is based on the historical movement of Park’s stock price for a period that corresponds to the expected terms of the PSUs.

(2) Dividends are assumed to be reinvested in shares of our common stock and dividends will not be paid unless shares vest.

(3) Based on the yields of U.S.

Department of Treasury instruments with similar expected terms of the PSUs at the date of each grant.

Earnings Per Share

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(in millions, except per share amounts)

Net income (loss) attributable to stockholders $ 97 $ 162 $ ( 459 )

Net income attributable to stockholders $ 212 $ 97 $ 162

Earnings attributable to participating securities ( 1 ) ( 2 ) —

Net income (loss) attributable to stockholders, net of earnings allocated to participating securities $ 95 $ 162 $ ( 459 )

Net income attributable to stockholders, net of earnings allocated to participating securities $ 211 $ 95 $ 162

Weighted average shares outstanding – basic 207 214 228

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Weighted average shares outstanding – diluted 209 215 228

Earnings (loss) per share – Basic (1)

Earnings per share – Basic (1)

$ 1.02 $ 0.44 $ 0.71

Earnings (loss) per share – Diluted (1)

Earnings per share – Diluted (1)

$ 1.01 $ 0.44 $ 0.71

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We have consultative and limited approval rights with respect to certain actions of our managers, including entering into long-term or high value contracts, engaging in certain actions relating to legal proceedings, approving the operating budget, making certain capital expenditures and the hiring of certain management personnel.

Our management agreements have initial terms ranging from 5 to 30 years and allow for one or more renewal periods.

Our management agreements have initial terms ranging from 5 to 30 years and most allow for one or more renewal periods.

Assuming all renewal periods are exercised by our hotel managers, the total term of our management agreements range from 5 to 70 years.

We also have franchise agreements for 4 hotels.

We also have franchise agreements for seven hotels.

The franchise agreements have an initial term of 10 to 20 years and cannot be extended without the franchisor’s consent.

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Additionally, the management and franchise agreements generally require a marketing fee equal to a percentage of rooms revenues.

Total marketing fees were $ 47 million, $ 45 million and $ 26 million for the years ended December 31, 2023, 2022 and 2021, respectively, and were included in other departmental and support expense in our consolidated statements of comprehensive income (loss).

Total marketing fees were $ 45 million, $ 47 million and $ 45 million for the years ended December 31, 2024, 2023 and 2022, respectively, and were included in other departmental and support expense in our consolidated statements of operations.

Employee Cost Reimbursements

We are responsible for reimbursing our managers for certain employee related costs outside of payroll.

These costs include contributions to a defined contribution 401(k) Retirement Savings Plan administered by our managers, union-

sponsored pension plans and other post-retirement plans.

These costs include contributions to a defined contribution 401(k) Retirement Savings Plan administered by our managers, union-sponsored pension plans and other post-retirement plans.

All of these plans are the responsibility of our managers and our obligation is only for the reimbursement of these costs for individuals who work at our hotel properties.

Total employee cost reimbursements were $ 132 million, $ 117 million and $ 55 million for the years ended December 31, 2023, 2022 and 2021, respectively, and were included in the respective operating expenses line item in our consolidated statements of comprehensive income (loss) based upon the nature of services provided by such employees.

Business Segment Information

As of December 31, 2024, we have two operating segments, our consolidated hotels and unconsolidated hotels.

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 (loss) before interest expense, taxes and depreciation and amortization (“EBITDA”).

Hotel Adjusted EBITDA, presented herein, is calculated as EBITDA from hotel operations, adjusted to exclude the following items that are not reflective of our ongoing operating performance or incurred in the normal course of business, and thus excluded from management's analysis in making day-to-day operating decisions and evaluations of our operating performance against other companies within our industry:

Our unconsolidated hotels operating segment does not meet the definition of a reportable segment, thus our consolidated hotels operating segment is our only reportable segment.

Our CODM, who is our chief executive officer, evaluates our consolidated hotels primarily based on hotel adjusted earnings (loss) before interest income and expense, taxes and depreciation and amortization (“EBITDA”) when deciding how to allocate resources, in making other day-to-day operating decisions and evaluating our operating performance against other companies within our industry.

• Gains or losses on sales of assets for both consolidated and unconsolidated investments;

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• Other items that we believe are not representative of our current or future operating performance.

The following table presents revenues for our consolidated hotels reconciled to our consolidated amounts and net income (loss) to Hotel Adjusted EBITDA:

The following table presents our reportable segment revenues reconciled to our consolidated amounts, reportable segment expenses and Hotel Adjusted EBITDA reconciled to net income:

Year Ended December 31,

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(in millions)

Total consolidated hotel revenues $ 2,613 $ 2,426 $ 1,311

Other revenues 85 75 51

Total revenues $ 2,599 $ 2,698 $ 2,501

Net income (loss) $ 106 $ 173 $ ( 452 )

Other revenues ( 86 ) ( 85 ) ( 75 )

Total segment revenues 2,513 2,613 2,426

Rooms expense 419 449 408

Food and beverage expense 474 501 449

Other departmental and support expense 605 635 613

Management fees 122 125 115

Other property segment expenses (1)

Total segment expenses 1,830 1,927 1,796

Hotel Adjusted EBITDA 683 686 630

Other revenues 86 85 75

Depreciation and amortization expense ( 257 ) ( 287 ) ( 269 )

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Other operating expenses ( 82 ) ( 83 ) ( 72 )

(Gain) loss on sales of assets, net ( 15 ) ( 13 ) 5

Gain on sales of assets, net 8 15 13

Gain on derecognition of assets 60 221 —

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Interest expense associated with hotels in receivership ( 60 ) ( 45 ) ( 30 )

Equity in (earnings) losses from investments in affiliates ( 11 ) ( 15 ) 7

Income tax expense 38 — 2

Other (gain) loss, net ( 4 ) ( 96 ) 7

Equity in earnings from investments in affiliates (2)

Income tax benefit (expense) 61 ( 38 ) —

Other (loss) gain, net ( 4 ) 4 96

Other items ( 24 ) ( 25 ) ( 12 )

Hotel Adjusted EBITDA $ 686 $ 630 $ 177

Net income $ 226 $ 106 $ 173

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(1) Other property segment expenses primarily include real and personal property taxes, other local taxes, ground rent, equipment rent and property insurance incurred in the normal course of business.

(2) For the year ended December 31, 2024, includes a gain of $ 19 million on the sale of the Hilton La Jolla Torrey Pines.

The following table presents total assets for our consolidated hotels, reconciled to total assets:

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Commitments and Contingencies

As of December 31, 2023, we had outstanding commitments under third-party contracts of approximately $ 90 million for capital expenditures at our properties, of which $ 16 million relates to projects at the Bonnet Creek complex, including the meeting space expansion project and renovation of guestrooms, existing meeting space, lobbies, golf course and other recreational amenities, and $ 10 million relates to the complete renovation of all guestrooms, public spaces, and certain hotel infrastructure at the Casa Marina Key West, Curio Collection.

As of December 31, 2024, we had outstanding commitments under third-party contracts of approximately $ 95 million for capital expenditures at our properties, of which $ 25 million relates to guestroom and lobby renovations at the Hilton Hawaiian Village Waikiki Beach Resort, $ 15 million relates to guestroom renovations at the Hilton New Orleans Riverside and $ 13 million relates to guestroom and lobby renovations at the Hilton Waikoloa Village.

Our contracts contain clauses that allow us to cancel all or some portion of the work.

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We are also involved in claims and litigation that is not in the ordinary course of business in connection with the spin-off from Hilton.

The spin-off agreements provide that Hilton will indemnify us from certain of these claims as well as

require us to indemnify Hilton for other claims.

The spin-off agreements provide that Hilton will indemnify us from certain of these claims as well as require us to indemnify Hilton for other claims.

In addition, losses related to certain contingent liabilities could be apportioned to us under the spin-off agreements.

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This amount could change as the litigation of the ATO’s claim progresses.

In February 2021, we were required to make a payment to Hilton of approximately $ 11 million representing our share of:

(i) the deposit required from Hilton by the ATO to further contest the claim and (ii) certain out-of-pocket expenses incurred by Hilton.

Additionally, as of December 31, 2024, Hilton remains subject to U.S.

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Interest paid during the years ended December 31, 2024, 2023 and 2022 was $ 185 million, $ 215 million and $ 245 million, respectively.

The decrease in interest paid during the year ended December 31, 2023 as compared to the years ended December 31, 2022 and 2021 is primarily due to the cessation of debt service payments toward the SF Mortgage Loan beginning in June 2023.

We paid $ 15 million, $ 7 million and $ 7 million in income taxes during the years ended December 31, 2024, 2023 and 2022, respectively.

Capital expenditures included within accounts payable and accrued expenses in our consolidated balance sheets were $ 37 million, $ 33 million and $ 11 million during the years ended December 31, 2023, 2022 and 2021, respectively.

Capital expenditures included within accounts payable and accrued expenses in our consolidated balance sheets were $ 37 million, $ 37 million and $ 33 million as of December 31, 2024, 2023 and 2022, respectively.

The following non-cash financing activity was excluded from the consolidated statements of cash flows:

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• We declared $ 355 million of dividends that were unpaid and accrued as of December 31, 2023.

During the year ended December 31, 2022:

• We declared $ 56 million of dividends that were unpaid and accrued as of December 31, 2022.

Subsequent Events

In January 2025, we repurchased 1.4 million shares of our common stock for a total purchase price of $ 20 million.

Park Hotels & Resorts Inc.

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Hilton New Orleans Riverside — 89 217 3 133 90 283 69 442 ( 162 ) 1977 10/24/2007 3 - 40 years

Hilton Oakland Airport — — 13 3 1 — 9 8 17 ( 12 ) 1970 10/24/2007 3 - 40 years

Hilton Salt Lake City Center — — — 10 21 — 9 22 31 ( 25 ) 2002 10/24/2007 3 - 40 years

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DoubleTree Hotel Washington DC – Crystal City — 43 95 2 52 43 128 21 192 ( 77 ) 1982 12/14/2007 3 - 40 years

DoubleTree Hotel Spokane City Center 14 3 24 2 13 3 30 9 42 ( 17 ) 1986 1/1/2010 3 - 40 years

Hilton Orlando Lake Buena Vista — — 137 10 41 — 156 32 188 ( 85 ) 1983 8/30/2010 3 - 40 years

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Portfolio Resort — 16 139 12 15 16 150 16 182 ( 32 ) 1926 9/18/2019 3 - 40 years

W Chicago – City Center — 20 76 14 2 20 78 14 112 ( 17 ) 1928 9/18/2019 3 - 40 years

W Chicago – Lakeshore — 22 58 8 3 22 60 9 91 ( 15 ) 1965 9/18/2019 3 - 40 years

The Midland Hotel, a Tribute Portfolio Hotel (3)

— 20 76 14 7 20 81 16 117 ( 21 ) 1928 9/18/2019 3 - 40 years

— 22 58 8 4 22 60 10 92 ( 18 ) 1965 9/18/2019 3 - 40 years

Total $ 1,639 $ 3,092 $ 5,105 $ 356 $ 1,613 $ 3,018 $ 6,139 $ 1,009 $ 10,166 $ ( 2,771 )

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(1) Includes amounts classified as construction-in-progress.

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following the completion of the Blackstone Merger.

(3) In January 2025, the W Chicago – City Center was converted to The Midland Hotel, a Tribute Portfolio Hotel.

(4) In February 2025, the W Chicago – Lakeshore was converted to The Wade.

Park Hotels & Resorts Inc.

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Capital expenditures 227 307 188

Transfer to real estate assets (1)

Deductions during period:

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____________________________________________________________________________________

(1) During 2021, four of our hotels that were previously managed by us were transitioned to a third-party hotel management company.

(1) For the year ended December 31, 2023, represents the derecognition of the Hilton San Francisco Hotels from our consolidated balance sheet in October 2023, when the receiver took control of the hotels.

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Depreciation expense 255 254 267

Transfer to real estate assets (1)

Deductions during period:

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____________________________________________________________________________________

(1) During 2021, four of our hotels that were previously managed by us were transitioned to a third-party hotel management company.

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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 8. Financial Statements and Supplementary Data