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What changed in Park Hotels & Resorts Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Park Hotels & Resorts Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+274 added−289 removedSource: 10-K (2025-02-20) vs 10-K (2024-02-28)

Top changes in Park Hotels & Resorts Inc.'s 2024 10-K

274 paragraphs added · 289 removed · 216 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

67 edited+12 added−17 removed62 unchanged
Biggest changeGround Leases The following table summarizes the remaining primary term, renewal rights and purchase rights as of February 28, 2024, associated with land underlying our hotels and meeting facilities that we lease from third parties: Property Rooms Current Lease Term Expiration Renewal Rights / Purchase Rights Leases of Wholly-Owned Properties Portfolio of Five Hotels (1) 2,054 December 31, 2025 2 x 5 years (2) Embassy Suites Austin Downtown South Congress 262 February 28, 2029 1 x 10 years (3) Hilton Oakland Airport 360 January 19, 2034 None Hilton Orlando Lake Buena Vista 814 January 31, 2034 1 x 25 years Hilton Boston Logan Airport 604 September 30, 2044 2 x 20 years Hilton Seattle Airport & Conference Center 396 December 31, 2046 Purchase Rights (4) Renewal Rights 2 x 10 years; 1 x 5 years Hyatt Regency Mission Bay Spa and Marina 438 January 31, 2056 None Embassy Suites Kansas City Plaza 266 January 30, 2076 (5) Renewal Rights (5) 2 x 25 years JW Marriott San Francisco Union Square 344 January 14, 2083 None Leases of Properties by Joint Ventures Hilton La Jolla Torrey Pines 394 June 30, 2067 1 x 10 years; 1 x 20 years (6) ____________________________________________________________________________________ (1) Reflects the terms of a master lease agreement pursuant to which we lease the following five hotels: the Hilton Salt Lake City Center; the DoubleTree Hotel Seattle Airport; the DoubleTree Hotel San Diego—Mission Valley; the DoubleTree Hotel Sonoma Wine Country; and the DoubleTree Hotel Durango.
Biggest changeThe Tax Matters Agreement also provides for cross-indemnities with respect to tax matters that, except as otherwise provided in the Tax Matters Agreement, are principally designed to place financial responsibility for the tax-related obligations and liabilities of each business with the appropriate company. 10 Table of Contents Ground Leases The following table summarizes the remaining primary term, renewal rights and purchase rights as of February 20, 2025, associated with land underlying our hotels and meeting facilities that we lease from third parties: Property Rooms Current Lease Term Expiration Renewal Rights / Purchase Rights Leases of Wholly-Owned Properties DoubleTree Hotel Seattle Airport 850 December 31, 2025 None DoubleTree Hotel Sonoma Wine Country 245 December 31, 2025 None Embassy Suites Kansas City Plaza 266 January 30, 2026 None Embassy Suites Austin Downtown South Congress 262 February 28, 2029 1 x 10 years (1) DoubleTree Hotel Durango 159 December 31, 2030 1 x 5 years DoubleTree Hotel San Diego – Mission Valley 300 December 31, 2030 1 x 5 years Hilton Salt Lake City Center 500 December 31, 2030 1 x 5 years Hilton Orlando Lake Buena Vista 814 January 31, 2034 1 x 25 years Hilton Boston Logan Airport 604 September 30, 2044 2 x 20 years Hilton Seattle Airport & Conference Center 396 December 31, 2046 Purchase Rights (2) Renewal Rights 2 x 10 years; 1 x 5 years Hyatt Regency Mission Bay Spa and Marina 438 January 31, 2056 None JW Marriott San Francisco Union Square 344 January 14, 2083 None ____________________________________________________________________________________ (1) The term of this renewal option exceeds the expiration of the underlying master ground lease in 2031.
We have consultative and specified approval rights with respect to certain actions of our hotel 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.
We have consultative and specified approval rights with respect to certain actions of our hotel 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 hiring approval for certain management personnel.
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.
The 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") emissions across our portfolio and business as a whole.
Increasingly, we also face competition from peer-to-peer inventory sources that allow travelers to stay at homes and apartments booked from owners, thereby providing an alternative to hotel rooms.
We also face competition from peer-to-peer inventory sources that allow travelers to stay at homes and apartments booked from owners, thereby providing an alternative to hotel rooms.
Refer to “—Ground Leases,” Item 2: “Properties,” and Note 9: "Leases" in our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K for additional information. (2) Four of our hotels are owned by unconsolidated joint ventures in which we hold an interest. Refer to Item 2: “Properties” for the percentage ownership in such unconsolidated joint ventures.
Refer to “—Ground Leases,” Item 2: “Properties,” and Note 9: "Leases" in our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K for additional information. (2) Three of our hotels are owned by unconsolidated joint ventures in which we hold an interest. Refer to Item 2: “Properties” for the percentage ownership in such unconsolidated joint ventures.
As a pure-play lodging real estate company with significant financial resources and an extensive portfolio of large, multi-use assets, including 7 hotels with 125,000 square feet of meeting space or more, we believe our ability to implement compelling return on investment initiatives represents a significant embedded growth opportunity.
As a pure-play lodging real estate company with significant financial resources and an extensive portfolio of large, multi-use assets, including seven hotels with 125,000 square feet of meeting space or more, we believe our ability to implement compelling return on investment initiatives represents a significant embedded growth opportunity.
We have published our 2023 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.
We have published our 2024 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.
For example, in 2020, we committed to the American Hotel & Lodging Association’s 5-Star Promise, which enhances policies, trainings and resources related to the safety of hotel employees and guests. 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.
For example, we have committed to the American Hotel & Lodging Association’s 5-Star Promise, which enhances policies, trainings and resources related to the safety of hotel employees and guests. 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.
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. For additional information on the above matters, please review our 2023 Annual Corporate Responsibility Report on our website.
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. For additional information on the above matters, please review our 2024 Annual Corporate Responsibility Report on our website.
Although we have incurred, and expect that we will continue to incur, costs relating to the investigation, identification, management, and remediation of hazardous materials or petroleum products known or discovered to exist at our properties, as well as costs of complying with various local, state and federal environmental, health and safety laws, those costs have not had, and are not expected to have, a material adverse effect on our financial condition, results of operations or cash flow.
Although we have incurred, and expect that we will 12 Table of Contents continue to incur, costs relating to the investigation, identification, management, and remediation of hazardous materials or petroleum products known or discovered to exist at our properties, as well as costs of complying with various local, state and federal environmental, health and safety laws, those costs have not had, and are not expected to have, a material adverse effect on our financial condition, results of operations or cash flow.
Fees Our management agreements generally contain a two-tiered fee structure, where our hotel managers receive a base management fee and an incentive management fee. The base management fee for our hotels range from approximately 2% to 4% of gross hotel revenues or receipts, as defined in each agreement.
Fees Our management agreements generally contain a two-tiered fee structure, where our hotel managers receive a base management fee and an incentive management fee. The base management fee for our hotels range from approximately 1% to 4% of gross hotel revenues or receipts, as defined in each agreement.
It is generally an event of default if we proceed with a sale or an assignment of the hotel’s management agreement to such a transferee, without receiving consent from our hotel managers. Franchise Agreements Four of our hotels are subject to franchise agreements.
It is generally an event of default if we proceed with a sale or an assignment of the hotel’s management agreement to such a transferee, without receiving consent from our hotel managers. Franchise Agreements Seven of our hotels are subject to franchise agreements.
To monitor our compliance, the franchise agreements specify that we must make the hotel available for quality inspections by the franchisor. Term Our franchise agreements have initial terms ranging from 13 to 20 years and require the franchisor’s consent to be extended.
To monitor our compliance, the franchise agreements specify that we must make the hotel available for quality inspections by the franchisor. Term Our franchise agreements have initial terms ranging from 10 to 20 years and require the franchisor’s consent to be extended.
The presence of these substances or products, or the failure to promptly remediate them, may adversely affect our ability to sell or develop a property or to borrow using the property as collateral or result in restrictions on or interruptions of operations at our properties.
The presence of these substances or products, or the failure to investigate or remediate them, may adversely affect our ability to sell or develop a property or to borrow using the property as collateral or result in restrictions on or interruptions of operations at our properties.
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.
To the extent we continue to remain qualified as a REIT, we generally will not be subject to U.S. federal (and state) income tax on taxable income generated by our REIT activities that we distribute annually to our stockholders.
We intend to leverage our scale, liquidity and transaction expertise to create value throughout all phases of the lodging cycle through opportunistic 5 Table of Contents acquisitions and dispositions and/or corporate transactions, in addition to value-enhancing return on investment projects, which we believe will enable us to further diversify our portfolio.
We intend to leverage our scale, liquidity and transaction expertise to create value throughout all phases of the lodging cycle through opportunistic acquisitions and dispositions and/or corporate transactions, in addition to value-enhancing return on investment projects, which we believe will enable us to further diversify our portfolio.
We use and store hazardous and toxic substances and petroleum products, 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.
Our hotels use and store hazardous and toxic substances and petroleum products, such as cleaning materials, pool chemicals, heating oil and fuel for back-up generators at some of our facilities, and also generate certain wastes in connection with operations.
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.
Our Board receives regular reports on these initiatives to ensure that we continue to demonstrate our strong commitment to our employees and other human capital matters.
Refer to “Risk Factors—Risks Related to our REIT Status and Certain Other Tax Items.” Insurance We maintain insurance coverage for general liability, property, including business interruption, terrorism, and other risks with respect to our business for all of our hotels.
Refer to “Risk Factors—Risks Related to our REIT Status and Certain Other Tax Items.” Insurance We or our hotel managers maintain insurance coverage for general liability, property, including business interruption, terrorism, and other risks with respect to our business for all of our hotels.
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. • Maintaining a Strong and Flexible Balance Sheet .
We will continue to opportunistically seek to expand our presence in 5 Table of Contents target markets and further diversify over time, including by acquiring hotels that are affiliated with leading hotel brands and operators. • Maintaining a Strong and Flexible Balance Sheet .
We also seek to increase awareness and understanding through mandatory Company-wide trainings on diversity and inclusion, unconscious bias and other social issues, as well as an annual anti-bribery/anti-corruption training and modern slavery/human trafficking awareness. All employees also participate in anti-harassment and compliance training at least once a year.
We also seek to increase awareness and understanding through Company-wide trainings on fair treatment, unconscious bias and other social issues, as well as an annual anti-bribery/anti-corruption training and modern slavery/human trafficking awareness. All employees also participate in anti-harassment and compliance training at least once a year.
Competition is often 11 Table of Contents 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.
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.
As of December 31, 2023, we had 90 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.
As of December 31, 2024, 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.
We have a skilled and highly diverse board, including nine independent directors (the "Board"), three of whom are gender diverse. It is Park's policy to 13 Table of Contents consider diversity in Board nominations. In addition, our executive team is comprised of seven members, two of whom are gender diverse and three of whom are racially diverse.
We have a skilled and highly diverse board, including eight independent directors (the "Board"), three of whom are gender diverse. It is Park's policy to consider diversity in Board nominations. In addition, our executive team is comprised of seven members, two of whom are gender diverse and three of whom are racially diverse.
To accomplish this goal, 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.
To accomplish this goal, the 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.
Each ESG initiative begins with analysis and work by one of the three working subcommittees, each of which specializes in specific ESG matters.
Each corporate responsibility initiative begins with analysis and work by one of the three working subcommittees, each of which specializes in specific corporate responsibility matters.
Also, in 2023, we conducted two pulse surveys, in addition to our annual engagement survey targeted at creating a diverse and welcoming work environment for our employees and developing the leadership skills of our managers who support and empower our employees.
Also, in 2024, we conducted one pulse survey, in addition to our annual engagement survey targeted at creating a diverse and welcoming work environment for our employees and developing the leadership skills of our managers who support and empower our employees.
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.
We have established a steering committee comprised of members of executive leadership and employees from all corporate departments across a broad assortment of levels, genders, ages and races.
Our executive-level Environmental, Social and Governance ("ESG") committee provides oversight of Park's three dedicated corporate responsibility working subcommittees – 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.
Our executive-level Corporate Responsibility Committee provides oversight of Park's three dedicated corporate responsibility working subcommittees – the Green Park Committee, the Park Cares Committee and the Diversity & Inclusion Steering Committee. Additionally, corporate responsibility performance targets are embedded into executive performance objectives and compensation.
Recently completed projects include the over $220 million of projects at our Bonnet Creek complex, including the meeting space expansion project and renovation of guestrooms, existing meeting space, lobbies, golf course and other recreational amenities, which was completed in January 2024, $80 million of renovations to all guestrooms, public spaces, and certain hotel infrastructure at the Casa Marina Key West, Curio Collection, which was substantially completed during 2023, and the $85 million of guestroom renovations at the Tapa Tower of the Hilton Hawaiian Village Waikiki Beach Resort, which was completed in December 2023.
We recently completed over $220 million of projects at our Bonnet Creek complex, including the meeting space expansion project and renovation of guestrooms, existing meeting space, lobbies, golf course and other recreational amenities, $80 million of renovations to all guestrooms, public spaces, and certain hotel infrastructure at the Casa Marina Key West, Curio Collection, and $85 million of guestroom renovations at the Tapa Tower of the Hilton Hawaiian Village Waikiki Beach Resort.
Additionally, our Chief Executive Officer, Thomas J. Baltimore, Jr. serves as one of the three co-chairs of NAREIT's Dividends Through Diversity, Equity & Inclusion CEO Council, which supports the recruitment, inclusion, development, and advancement of women, Black professionals, other people of color, ethnically diverse individuals, and members of other under-represented groups in REITs and the publicly traded real estate industry.
Baltimore, Jr., serves as one of the two co-chairs of Nareit's Dividends Through Diversity, Equity & Inclusion CEO Council, which supports the recruitment, inclusion, development, and advancement of women, Black professionals, other people of color, ethnically diverse individuals, and members of other under-represented groups in REITs and the publicly traded real estate industry.
Since our spin-off, we have sold or otherwise disposed of 42 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.
Since our spin-off, we have sold or otherwise disposed of 45 hotels, most of them located in lower growth domestic and international markets for a total of $3 billion, which provided us with additional liquidity to de-leverage our balance sheet and to execute on a variety of strategic corporate initiatives.
For a discussion of these relationships, refer to “Risk Factors—Risks Related to Our Business and Industry—We are subject to risks associated with the employment of hotel personnel, particularly with hotels that employ unionized labor, which could increase our operating costs, reduce flexibility of our hotel managers to adjust the size of the workforce at our hotels and could materially and adversely affect our revenues and profitability.” Diversity, Equity and Inclusion 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.
For a discussion of these relationships, refer to “Risk Factors—Risks Related to Our Business and Industry—We are subject to risks associated with the employment of hotel personnel, particularly with hotels that employ unionized labor, which could increase our operating costs, reduce flexibility of our hotel managers to adjust the size of the workforce at our hotels and could materially and adversely affect our revenues and profitability.” We value the unique perspectives that a workforce with diverse cultures, ages, genders, and ethnicities brings to our process, and we are committed to fair treatment and full participation of people from all backgrounds.
In addition, as a current and former owner or operator of property, we could be subject to investigation and remediation liabilities that could arise under local, state and federal environmental laws, as well as personal injury, property damage, fines or other claims by third parties associated with environmental compliance or the presence, release, disposal or impacts of hazardous or toxic substances or petroleum products arising at or from our current or former properties.
In addition, as a current and former owner or operator of property, we could be subject to investigation and remediation liabilities that could arise under local, state and federal environmental laws, as well as third party claims for personal injury, property and natural resources damages, or other claims by third parties, or penalties, liens or restrictions on operations associated with environmental compliance or the presence, release, disposal or impacts of hazardous or toxic substances or petroleum products arising at or from our current or former properties.
With these projects, we are often able to notably decrease our environmental impact by replacing older equipment with more efficient options.
As a result of these efficiency projects, we are often able to notably decrease our environmental impact by replacing older equipment with more efficient options.
In 2023, Park Cares sponsored three community service initiatives where employees were invited to participate with in-kind donations or by volunteering their time, of which 75 of our employees participated. In 2023, we supported 17 organizations and/or programs through charitable contributions, sponsorships and scholarships contributing a total of approximately $322,000 in cash donations.
In 2024, Park Cares sponsored three community service initiatives where employees were invited to participate with in-kind donations or by volunteering their time, of which 35-50 of our employees participated at each event. In 2024, we supported 20 organizations and/or programs through charitable contributions, sponsorships and scholarships contributing a total of approximately $289,000 in cash donations.
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 and the Park Cares Committee.
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 these committees. Additionally, our Chief Executive Officer, Thomas J.
The following charts summarize the gender and ethnic diversity of our workforce as of December 31, 2023: 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.
The following charts summarize the gender and ethnic diversity of our workforce as of December 31, 2024: 13 Table of Contents Our commitment to fair treatment and full participation 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 continually evaluate our practices related to diversity, equity and inclusion through internal and external resources. For example, since 2021, we have included a gender and ethnic diversity analysis to our bi-annual corporate compensation review, which continues to reflect no pay disparity based on any gender or ethnic group.
We continually evaluate our practices related to fair treatment and full participation through internal and external resources. For example, we include a gender and ethnic diversity analysis in our bi-annual corporate compensation review, which continues to reflect no pay disparity based on any gender or ethnic group.
Additionally, we were recognized by Newsweek as one of America's Most Trustworthy Companies for 2023 and recently, recognized as one of America's Most Responsible Companies in 2024, the fourth time Park has been included in the annual survey.
We were recognized by Newsweek as one of America's Most Responsible Companies for both 2024 and 2025, marking the fifth time Park has been included in the annual survey, as well as one of America's Most Trustworthy Companies for 2024.
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. Similarly, during times when we seek to sell hotels, competition from other sellers may increase the bargaining power of the potential property buyers.
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.
We are focused on continually improving property-level operating performance and profitability of each of our hotels and resorts through our proactive asset management efforts. We continue to identify revenue-enhancement opportunities and drive cost efficiencies to maximize the operating performance, cash flow and value of each property.
We collaborate with our third-party managers to improve property-level operating performance and profitability for each of our hotels and resorts through our proactive asset management efforts. We continue to identify revenue-enhancement opportunities and drive cost efficiencies to maximize the operating performance, cash flow and value of each property.
Our Corporate Strategy and Design & Construction departments also participate in sustainability training, including Nareit’s ESG JumpStart workshop and REITworks conference. 14 Table of Contents To support employee development, we provide regular and consistent feedback to our corporate employees through our continuous feedback performance management model.
Our Corporate Strategy and Design & Construction departments also participate in sustainability training, including Nareit’s ESG JumpStart workshop and REITworks conference. To support employee development, we provide regular and consistent feedback to our corporate employees through our continuous feedback performance management model. Regular one-on-one feedback sessions are conducted to ensure feedback is current and to reinforce positive performance.
The Distribution Agreement provided for certain transfers of assets and assumptions of liabilities by us and Hilton Parent and the settlement or extinguishment of certain liabilities and other obligations among Hilton Parent and us.
The Distribution Agreement provided for the division of assets and liabilities between Hilton Parent or its subsidiaries, HGV Parent or its subsidiaries and us, and the settlement or extinguishment of certain liabilities and other obligations among Hilton Parent and us.
The following table sets forth our portfolio by brand affiliations and chain scale segment: Brand Chain Scale Number of Properties Total Rooms Hilton Hotels & Resorts Upper Upscale 19 16,192 DoubleTree by Hilton Upscale 8 3,543 Signia by Hilton Upper Upscale 1 1,009 Hyatt Regency Upper Upscale 2 940 W Hotels Luxury 2 923 Embassy Suites by Hilton Upper Upscale 3 816 Curio – A Collection by Hilton Upper Midscale 3 685 Waldorf Astoria Hotels & Resorts Luxury 1 502 Marriott Upper Upscale 1 430 Marriott Tribute Portfolio Upper Upscale 1 393 JW Marriott Luxury 1 344 Hyatt Centric Upper Upscale 1 316 Total 43 26,093 6 Table of Contents Type of Property Interest The following table sets forth our properties according to the nature of our real estate interest: Types of Interest Number of Properties Total Rooms Fee Simple (1) 26 17,890 Ground Lease 13 5,538 39 23,428 Unconsolidated Joint Ventures (2) Fee Simple 3 2,271 Ground Lease 1 394 4 2,665 Total 43 26,093 ____________________________________________________________________________________ (1) Includes certain properties that, while primarily owned in fee simple, are subject to ground lease in respect of certain portions of land or facilities.
The following table sets forth our portfolio by brand affiliations and chain scale segment: Brand Chain Scale Number of Properties Total Rooms Hilton Hotels & Resorts Upper Upscale 17 15,456 DoubleTree by Hilton Upscale 7 3,168 Signia by Hilton Upper Upscale 1 1,009 Marriott (1) Upper Upscale 2 950 Hyatt Regency Upper Upscale 2 940 Embassy Suites by Hilton Upper Upscale 3 816 Marriott Tribute Portfolio Upper Upscale 2 796 Curio – A Collection by Hilton Upper Midscale 3 685 Waldorf Astoria Hotels & Resorts Luxury 1 502 JW Marriott Luxury 1 344 Hyatt Centric Upper Upscale 1 316 Total 40 24,982 ___________________________________________ (1) Includes a white label property. 6 Table of Contents Type of Property Interest The following table sets forth our properties according to the nature of our real estate interest: Types of Interest Number of Properties Total Rooms Fee Simple (1) 25 17,533 Ground Lease 12 5,178 37 22,711 Unconsolidated Joint Ventures (2) Fee Simple 3 2,271 Total 40 24,982 ____________________________________________________________________________________ (1) Includes certain properties that, while primarily owned in fee simple, are subject to ground lease in respect of certain portions of land or facilities.
These laws 12 Table of Contents and regulations govern our operations including any associated air emissions; the use, storage and disposal of hazardous and toxic substances and petroleum products; and wastewater disposal.
These laws and regulations govern our business including with respect to any associated air emissions; the use, storage and disposal of hazardous and toxic substances and petroleum products; and wastewater and stormwater discharges.
Termination Events Our franchise agreements provide for termination at the franchisor’s option upon the occurrence of certain events, including, among others: the failure to maintain brand standards; the failure to pay royalties and fees or to perform other obligations under the franchise license; bankruptcy; and abandonment of the franchise or a change of control, and in the event of such termination, we are required to pay liquidated damages.
Termination Events Our franchise agreements provide for termination at the franchisor’s option upon the occurrence of certain events, including, among others: the failure to maintain brand standards; the failure to pay royalties and fees or to perform other obligations under the franchise license; bankruptcy; and abandonment of the franchise or a change of control, and in the event of such termination, we are required to pay liquidated damages. 9 Table of Contents Spin-Off Related Agreements On January 3, 2017, Hilton Parent completed the spin-off that resulted in our establishment as an independent, publicly traded company.
We are focused on consistently delivering superior risk-adjusted returns to stockholders through active asset management and a thoughtful external growth strategy while maintaining a strong and flexible balance sheet.
Approximately 87% of our rooms are luxury and upper upscale and all of our rooms are located in the U.S. and its territories. We are focused on consistently delivering superior risk-adjusted returns to stockholders through active asset management and a thoughtful external growth strategy while maintaining a strong and flexible balance sheet.
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. We believe relations are positive between our third-party hotel managers and their employees.
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, including the risks associated with strikes and other labor activity, which some of our third-party operators recently experienced.
No extension rights are available, and it is unlikely that the landlord under the master ground lease will grant a term past 2031. (4) Tenant has a right of first offer with respect to the property.
No extension rights are available, and it is unlikely that the landlord under the master ground lease will grant a term past 2031. (2) Tenant has a right of first offer with respect to the property. We are also party to certain leases for facilities related to certain hotels owned by us. Competition The lodging industry is highly competitive.
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 employee 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 14 Table of Contents employee engagement survey, which is administered by a third party, and undertake initiatives to improve areas identified in the survey.
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 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.
Also, 83% 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.
We completed 73 efficiency-related projects that totaled nearly $21 million in 2023 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.
Seasonality The lodging industry is seasonal in nature, which can be expected to cause fluctuations in our hotel rooms revenues, occupancy levels, room rates, operating expenses and cash flows.
Similarly, during times when we seek to sell hotels, competition from other sellers may increase the bargaining power of the potential property buyers. 11 Table of Contents Seasonality The lodging industry is seasonal in nature, which can be expected to cause fluctuations in our hotel rooms revenues, occupancy levels, room rates, operating expenses and cash flows.
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 substances or conditions found in or on our properties. We have implemented an on-going operations and maintenance plan that seeks to identify and remediate these conditions as appropriate.
From time to time, we may also be required to manage, abate, remove or contain mold, lead, asbestos-containing materials, radon gas, polychlorinated biphenyls ("PCBs") or other hazardous substances or conditions found in or on our properties; and any known or presumed asbestos in our buildings must be properly managed and maintained.
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.
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. Our Properties The following tables provide summary information regarding our portfolio as of February 20, 2025.
Our Properties The following tables provide summary information regarding our portfolio as of February 28, 2024. Brand Affiliations and Chain Scale We own and lease hotels and resorts primarily in the upper upscale chain scale segment.
Brand Affiliations and Chain Scale We own and lease hotels and resorts primarily in the upper upscale chain scale segment.
Spin-Off Related Agreements On January 3, 2017, Hilton Parent completed the spin-off that resulted in our establishment as an independent, publicly traded company. 9 Table of Contents Distribution Agreement We entered into a distribution agreement (“Distribution Agreement”) with Hilton Parent regarding the principal actions taken or to be taken in connection with the spin-off.
Distribution Agreement We entered into a distribution agreement (“Distribution Agreement”) with Hilton Parent regarding the principal actions taken or to be taken in connection with the spin-off.
As of February 28, 2024, our portfolio consists of 43 premium-branded hotels and resorts with over 26,000 rooms, located in prime United States (“U.S.”) markets with high barriers to entry. Approximately 86% of our rooms are luxury and upper upscale and all of our rooms are located in the U.S. and its territories.
On September 18, 2019, we acquired Chesapeake Lodging Trust. As of February 20, 2025, our portfolio consists of 40 premium-branded hotels and resorts with approximately 25,000 rooms, located in prime United States (“U.S.”) markets with high barriers to entry.
As part of our ongoing stakeholder engagement and transparency efforts, we participated in the 2023 Global Real Estate Sustainability Benchmark ("GRESB") assessment for the fourth consecutive year, receiving our highest score thus far, ranking in the top third of all publicly listed GRESB participant companies in the Americas and registering a three-point increase over 2022, continuing the Company's trend of enhancing its overall corporate responsibility program and making meaningful improvements toward decarbonization.
As part of our ongoing stakeholder engagement and transparency efforts, we participated in the 2024 Global Real Estate Sustainability Benchmark ("GRESB") assessment for the fifth consecutive year, demonstrating the Company's continued support of its overall corporate responsibility program and desire to make meaningful improvements toward decarbonization.
The Tax Matters Agreement specifies the portion, if any, of this tax liability for which we bear responsibility, and each party has agreed to indemnify the other against any amounts for which they are not responsible.
The Tax Matters Agreement provides for an allocation between the parties of pre-spin-off tax liabilities and tax liabilities in the event that the spin-off was not tax-free. Each party has agreed to indemnify the other against any amounts for which they are not responsible under the Tax Matters Agreement.
Additionally, in June 2023, we ceased making debt service payments on the $725 million SF Mortgage Loan secured by the Hilton San Francisco Hotels, which was due November 2023, and in October 2023, the Hilton San Francisco Hotels were placed into receivership. We have no significant maturities until June 2025.
Excluding the $725 million SF Mortgage Loan, which we ceased making debt service payments on in June 2023 and was due November 2023, we have no significant maturities until the fourth quarter of 2026. We expect to reduce our level of secured debt over time, which will provide additional balance sheet flexibility.
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 assess both sustainability opportunities and climate change-related risks as part of our due diligence process.
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 effective sustainability practices in both our renovation and redevelopment projects that can both enhance asset value and improve environmental performance.
We were named an ENERGY STAR ® Partner of the Year in 2023 for Energy Management for our outstanding contributions in the transition to clean energy economy, and six of our properties earned the ENERGY STAR ® Certification for Superior Energy Performance, including our largest hotel, the Hilton Hawaiian Village Waikiki Beach Resort.
We were named an ENERGY STAR ® Partner of the Year in 2024 for Energy 7 Table of Contents Management for our outstanding contributions in the transition to a clean energy economy for the second consecutive year.
Park Intermediate Holdings LLC (our “Operating Company”) continues to directly or indirectly hold all of our assets and conduct all of our operations. 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 ("UPREIT") structure .
Park Intermediate Holdings LLC (our “Operating Company”) directly or indirectly holds all of our assets and conducts all of our operations. 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.
The results of these audits also provide a roadmap for budgeting efficiency-related capital expenditures for the current and future years. Our Principal Agreements In order for us to continue to qualify as a REIT, independent third parties must operate our hotels.
Our risk management team continues to plan for adaptative measures across our portfolio over both the medium and long term. Our Principal Agreements In order for us to continue to qualify as a REIT, independent third parties must operate our hotels.
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.
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. Our approach to corporate citizenship is reinforced by periodic engagement with key stakeholders to understand their corporate responsibility priorities.
Removed
On September 18, 2019, pursuant to the terms and subject to the conditions set forth in the Agreement and Plan of Merger (the “Merger Agreement”), dated as of May 5, 2019, by and among Park Parent, PK Domestic Property LLC, an indirect subsidiary of Park Parent (“PK Domestic”), PK Domestic Sub LLC, a wholly owned subsidiary of PK Domestic (“Merger Sub”) and Chesapeake Lodging Trust (“Chesapeake”), Chesapeake merged with and into Merger Sub (the “Merger”).
Added
Additionally, in 2024, we commenced over $200 million of comprehensive guestroom renovations at the iconic Rainbow Tower at the Hilton Hawaiian Village Waikiki Beach Resort, the Palace Tower at the Hilton Waikoloa Village and the Main Tower at the Hilton New Orleans Riverside.
Removed
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.
Added
In May 2024, our Operating Company, PK Domestic Property LLC, an indirect subsidiary of the Company, and PK Finance Co-Issuer Inc. issued $550 million of 7.000% senior notes due 2030 ("2030 Senior Notes") and amended our existing credit agreement to include a new $200 million senior unsecured term loan due May 2027 ("2024 Term Loan").
Removed
In February 2023, we fully repaid the $50 million outstanding under our amended and restated revolving credit facility ("Revolver") with net proceeds from the sale of the Hilton Miami Airport, and in June 2023, we fully repaid the $75 million mortgage loan secured by the W Chicago – City Center, which was due in August 2023.
Added
Net proceeds from the 2030 Senior Notes and the 2024 Term Loan were used to repurchase or redeem all of the $650 million of 7.500% senior notes due in 2025 ("2025 Senior Notes"), and the remainder was used for general corporate purposes.
Removed
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.
Added
Sustainability We are committed to being a responsible corporate citizen and minimizing our impact on the environment. As part of our corporate strategy, we incorporate sustainability into our investment and asset management practices to help mitigate risks and enhance efficiency.
Removed
We also received the 2023 Nareit Leader in the Light Award for the hospitality sector for the second year in a row, further highlighting our commitment to superior and sustained sustainability practices.
Added
Furthermore, eight of our properties earned the ENERGY STAR ® Certification for Superior Energy Performance during 2024, including our largest hotel, the Hilton Hawaiian Village Waikiki Beach Resort. Our corporate headquarters is in a LEED Platinum certified building, the first building in Tysons, Virginia to achieve this certification.
Removed
Our Green Park Sustainability Playbook outlines the Company’s sustainability expectations and processes for its brand and 7 Table of Contents management partners on a variety of topics, including HVAC equipment, LED lighting and water efficiency.
Added
Resiliency to the effects of climate change on our portfolio is also a central focus of our corporate responsibility program.
Removed
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.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeOther 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; • declines in our business performance or the general economy; • new indebtedness that may contain more restrictive covenants, including as a result of sustained elevated interest rates as a response to increased inflation, than our existing indebtedness or may require new or incremental collateral, and decreased operating revenues, which could increase our risk of default on our loans; • 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; and • 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.
Biggest changeOther factors that would negatively impact our ability to successfully operate, 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; • increased labor costs, including due to inflation, reduced labor supply due to increased immigration enforcement or otherwise; • 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; • declines in our business performance or the general economy; • adverse political conditions; • new indebtedness that may contain more restrictive covenants, including as a result of sustained elevated interest rates as a response to increased inflation, than our existing indebtedness or may require new or incremental collateral, and decreased operating revenues, which could increase our risk of default on our loans; • our dependence on our hotel managers, who may be facing similar challenges; and • cybersecurity incidents and disruptions to internal control procedures. 16 Table of Contents We face various risks posed by our acquisition activities.
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 to 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.
Finally, each property with respect to which our TRS lessees pay rent must be a “qualified lodging facility.” A “qualified lodging facility” is a hotel, motel, or other establishment more than one-half of the dwelling units in which are used on a transient basis, including customary amenities and facilities, provided that no wagering activities are conducted at or in connection with such facility by any person who is engaged in the business of accepting wagers and who is legally authorized to engage in such business at or in connection with such facility.
Finally, each property with respect to which our TRS lessees pay rent must be a “qualified lodging facility.” A “qualified lodging facility” is a hotel, motel, or other establishment in which more than one-half of the dwelling units are used on a transient basis, including customary amenities and facilities, provided that no wagering activities are conducted at or in connection with such facility by any person who is engaged in the business of accepting wagers and who is legally authorized to engage in such business at or in connection with such facility.
The presence or release of such toxic or hazardous substances or petroleum products at or from our currently or formerly owned or leased properties could result in substantial investigation and remediation costs, 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.
The presence or release of toxic or hazardous substances or petroleum products at or from our currently or formerly owned or leased properties could result in substantial investigation and remediation costs, 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.
The focus and activism related to ESG and related matters may constrain our business operations or increase expenses. Additionally, we may face reputational damage in the event our corporate responsibility initiatives do not meet the standards set by various constituencies, including those of third-party providers of corporate responsibility ratings and reports.
The focus and activism related to corporate responsibility and related matters may constrain our business operations or increase expenses. Additionally, we may face reputational damage in the event our corporate responsibility initiatives do not meet the standards set by various constituencies, including those of third-party providers of corporate responsibility ratings and reports.
From time to time, we may be required to remediate such substances or remove, abate or manage asbestos, mold, radon gas, lead, underground storage tanks, or other hazardous substances or conditions at our properties.
From time to time, we may be required to remediate such substances or remove, abate or manage asbestos, mold, radon gas, lead, PCBs, underground storage tanks, or other hazardous substances or conditions at our properties.
Our outstanding debt and other contractual obligations could have important consequences, including requiring a substantial portion of cash flow from operations to be dedicated to debt service payments, thereby reducing our ability to use our cash flow to fund our operations, capital expenditures, distributions to stockholders and to pursue future business 23 Table of Contents opportunities and limiting our flexibility in planning for, or reacting to, changes in our business or market conditions, increasing our vulnerability to adverse economic, industry or competitive developments and placing us at a competitive disadvantage compared to our competitors who may be better positioned to take advantage of opportunities that our leverage prevents us from exploiting.
Our outstanding debt and other contractual obligations could have important consequences, including requiring a substantial portion of cash flow from operations to be dedicated to debt service payments, thereby reducing our ability to use our cash flow to fund our operations, capital expenditures, distributions to stockholders and to pursue future business opportunities and limiting our flexibility in planning for, or reacting to, changes in our business or market conditions, increasing our vulnerability to adverse economic, industry or competitive developments and placing us at a competitive disadvantage compared to our competitors who may be better positioned to take advantage of opportunities that our leverage prevents us from exploiting.
Certain organizations that provide corporate risk and corporate governance advisory services to investors have developed scores and ratings to evaluate companies based upon ESG metrics. Many investors focus on ESG-related business practices and scores when choosing where to allocate their investments and may consider a company's score as a factor in making an investment decision.
Certain organizations that provide corporate risk and corporate governance advisory services to investors have developed scores and ratings to evaluate companies based upon corporate responsibility metrics. Many investors focus on corporate responsibility-related business practices and scores when choosing where to allocate their investments and may consider a company's score as a factor in making an investment decision.
Our existing systems may be unable to satisfy changing regulatory requirements and employee and customer expectations, or may require significant additional investments or time to do so. We are also subject to certain environmental compliance costs, including associated air emissions, the use, storage and disposal of hazardous and toxic substances, and wastewater disposal.
Our existing systems may be unable to satisfy changing regulatory requirements and employee and customer expectations, or may require significant additional investments or time to do so. We are also subject to certain environmental compliance costs, including associated air emissions, the use, storage and disposal of hazardous and toxic substances, and wastewater and stormwater discharges.
An economic downturn, an increase in hotel supply, a change in guest preferences for certain geographic locations or markets, 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.
An economic downturn, an increase in hotel supply, a change in guest preferences for certain geographic locations or markets, strikes or other labor activity, 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.
If the outstanding balance of the debt secured by the mortgage exceeds our tax basis in the hotel, we would recognize taxable gain on foreclosure, but we would not receive any cash proceeds, which could impact our ability to meet the REIT distribution requirements imposed by the Code.
If the outstanding balance of the debt secured by the mortgage exceeds our tax basis in the hotel, we would recognize taxable gain on foreclosure, but we would not receive any cash proceeds, which could impact our ability to meet the REIT distribution requirements.
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.
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, operating results and cash flows.
Failure by us, or any hotel management company that we engage, to maintain these standards or other terms and conditions could result in a franchise license being canceled or the franchisor requiring us to undertake a costly property improvement program.
Failure by us, or any hotel management company that we engage, to maintain these standards or other terms and conditions could result in a franchise license being cancelled or the franchisor requiring us to undertake a costly property improvement program.
Furthermore, the credit agreement that governs our senior unsecured credit facility and indentures that govern our senior notes contain certain affirmative covenants that require us to be in compliance with certain leverage, liquidity and other financial ratios, and the loan documents governing the mortgage-backed loans of our subsidiaries also require them to maintain certain debt service coverage ratios and minimum net worth requirements.
Furthermore, the credit agreement and indentures that govern our senior notes contain certain affirmative covenants that require us to be in compliance with certain leverage, liquidity and other financial ratios, and the loan documents governing the mortgage-backed loans of our subsidiaries also require them to maintain certain debt service coverage ratios and minimum net worth requirements.
There can be no assurance, however, that we will be able to comply with the TRS limitation or to avoid application of the 100% excise tax. If the leases of our hotels to our TRS lessees are not respected as true leases for U.S. federal income tax purposes, we will fail to qualify as a REIT.
There can be no assurance, however, that we will be able to comply with the TRS limitation or to avoid application of the 100% excise tax. 26 Table of Contents If the leases of our hotels to our TRS lessees are not respected as true leases for U.S. federal income tax purposes, we will fail to qualify as a REIT.
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.
In the conduct of our business, both we and our hotel managers 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.
Any compromise of our own network or hotel managers’ 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.
Any compromise of our own network or hotel managers’ 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 18 Table of Contents liability.
Moreover, we may agree to guarantee indebtedness incurred by a joint venture or co-venturer or provide standard 20 Table of Contents indemnifications to lenders for loss liability or damage occurring as a result of our actions or actions of the joint venture or other co-venturers.
Moreover, we may agree to guarantee indebtedness incurred by a joint venture or co-venturer or provide standard indemnifications to lenders for loss liability or damage occurring as a result of our actions or actions of the joint venture or other co-venturers.
Some investors may use ESG factors to guide their investment strategies, and potential and current employees, business partners and vendors may consider these factors when considering relationships with us, and guests may consider these factors when deciding whether to stay at our properties.
Some investors may use corporate responsibility factors to guide their investment strategies, and potential and current employees, business partners and vendors may consider these factors when considering relationships with us, and guests may consider these factors when deciding whether to stay at our properties.
If our properties are not 19 Table of Contents 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.
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.
We cannot predict the outcome of any arbitration or litigation related to such agreements, the effect of any negative judgment 17 Table of Contents against us or the amount of any settlement that we may enter into with any third-party.
We cannot predict the outcome of any arbitration or litigation related to such agreements, the effect of any negative judgment against us or the amount of any settlement that we may enter into with any third-party.
Furthermore, certain of our properties may qualify as legally permissible nonconforming uses and improvements, including certain of our iconic and most profitable properties, and we may not be permitted to rebuild such properties as they exist now or at all, regardless of insurance proceeds, if such properties are destroyed.
Furthermore, certain of our properties may currently qualify as 20 Table of Contents legally permissible nonconforming uses and improvements, including certain of our iconic and most profitable properties, and we may not be permitted to rebuild such properties as they exist now or at all, regardless of insurance proceeds, if such properties are destroyed.
The cost to comply with environmental laws may be substantial, and our failure to comply with any such laws, including any required permits or licenses, or publicity resulting from actual or alleged compliance failures, could result in substantial fines or possible revocation of our authority to conduct some of our operations or otherwise have an adverse effect on our business.
The cost to comply with environmental laws may be substantial, and our failure to comply with any such laws, including obtaining and complying with any required permits or licenses, or publicity resulting from actual or alleged compliance failures, could result in substantial fines, or possible revocation of our authority to conduct some of 23 Table of Contents our operations or otherwise have an adverse effect on our business.
Heightened focus on corporate responsibility, specifically related to ESG factors, may constrain our business operations, impose additional costs and expose us to new risks that could adversely impact our results of operations, financial condition and the price of our securities. We are committed to corporate responsibility, specifically related to ESG factors.
Heightened focus on corporate responsibility may constrain our business operations, impose additional costs and expose us to new risks that could adversely impact our results of operations, financial condition and the price of our securities. We are committed to corporate responsibility.
From time to time, strikes, lockouts, public demonstrations or other negative actions and publicity may disrupt hotel operations at any of our hotels, negatively impact our reputation or the reputation of our brands, or harm relationships with the labor forces at our hotels.
Strikes, as well as lockouts, public demonstrations or other negative actions and publicity that may occur from time to time may disrupt hotel operations at any of our hotels, negatively impact our reputation or the reputation of our brands, or harm relationships with the labor forces at our hotels.
We also face significant competition for 16 Table of Contents attractive investment opportunities, which may impact our ability acquire certain hotels or portfolios that we deem attractive at a favorable price, pursuant to acceptable terms, or at all.
We also face significant competition for attractive investment opportunities, which may impact our ability to acquire certain hotels or portfolios that we deem attractive at a favorable price, pursuant to acceptable terms, or at all.
Furthermore, new tax legislation, administrative guidance or court decisions, in each instance potentially with retroactive effect, could make it more difficult or impossible for us to qualify as a REIT.
Furthermore, new tax legislation, administrative guidance or court decisions, in each instance potentially with retroactive 25 Table of Contents effect, could make it more difficult or impossible for us to qualify as a REIT.
We also may incur increased legal costs and indirect labor costs as a result of contract disputes or other events. Additionally, hotels where our hotel managers have collective bargaining agreements with employees are more highly affected by labor force activities than others.
We also have incurred and may in the future incur increased legal costs and indirect labor, maintenance and operational costs as a result of contract disputes or other events. Additionally, hotels where our hotel managers have collective bargaining agreements with employees are more highly affected by labor force activities than others.
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.
There can be no assurance that the security measures we have taken to protect these systems will prevent failures, inadequacies or interruptions in system services or that system security will not be compromised, including through system or user error, physical or electronic break-ins, computer viruses, or cyber-attacks.
These third-party entities are subject to similar risks as we are relating to cybersecurity, privacy violations, business interruption, and systems and employee failures and an attack against such third-party service provider or partner could have a material adverse effect on our business.
These third-party entities are subject to similar risks related to cybersecurity, privacy violations, business interruption, and system and employee failures and an attack against such third-party service provider or partner could have a material adverse effect on our business.
We also compete against smaller hotel chains and independent and local hotel owners and operators. Additionally, we face competition from peer-to-peer inventory sources that allow travelers to stay at homes and apartments booked from owners. New hotels may be constructed, and these additions create new competitors, in some cases without corresponding increases in demand for hotel rooms.
Additionally, we face competition from peer-to-peer inventory sources that allow travelers to stay at homes and apartments booked from owners. New hotels may be constructed, and these additions create new competitors, in some cases without corresponding increases in demand for hotel rooms.
We may be required to expend significant attention 18 Table of Contents and financial resources to protect these technologies and systems against physical or cybersecurity incidents and even then, our security measures may subsequently be deemed to have been inadequate by regulators or courts given the lack of prescriptive measures in data security and cybersecurity laws.
We may be required to expend significant attention and financial resources to protect these technologies and systems against physical or cybersecurity incidents and even then, our security measures may subsequently be deemed to have been inadequate by regulators or courts given the lack of prescriptive measures in data security and cybersecurity laws as well as regulators' evolving interpretations of cybersecurity laws and standards.
There can also be no assurances that we will not experience future fluctuations in hotel revenues or earnings at our hotels due to macroeconomic factors, such as inflation, increases in interest rates, potential economic slowdown or a recession and geopolitical conflicts.
There can also be no assurances that we will not experience future fluctuations in hotel revenues or earnings at our hotels due to inflation and other macroeconomic factors, local economic factors and demand, a potential economic slowdown or a recession and geopolitical conflicts.
We are subject to U.S. federal and state income tax on the income earned by our TRSs. Any of these taxes would decrease cash available for distributions to stockholders. Finally, we have operations and assets in Puerto Rico that are subject to tax. Any of these taxes decrease cash available for distribution to our stockholders.
We are subject to U.S. federal and state income tax on the income earned by our TRSs. Finally, we have operations and assets in Puerto Rico that are subject to tax. Any of these taxes decrease cash available for distribution to our stockholders. Complying with REIT requirements may force us to borrow to make distributions to stockholders.
These stock ownership limits, including the Ownership Limitation, might delay or prevent a transaction or a change in our control that might involve a premium price for our common stock or otherwise be in the best interests of our stockholders. Item 1B. Unresolved Staff Comments. None. 28 Table of Contents
These stock ownership limits, including the Ownership Limitation, might delay or prevent a transaction or a change in our control that might involve a premium price for our common stock or otherwise be in the best interests of our stockholders.
Unless we purchase a fee interest in the land and improvements at our properties subject to our ground leases or extend the terms of these leases before their expiration, we will lose our right to operate these properties and we will not have any economic interest in the land or improvements at the expiration of our ground leases; therefore, we generally will not share in any increase in value of the land or improvements beyond the term of a ground lease, notwithstanding our capital outlay to purchase our interest in the hotel or fund improvements thereon, and will lose our right to use the hotel. 21 Table of Contents We can provide no assurances that we will be able to renew any ground lease upon its expiration at all or on favorable terms.
Unless we purchase a fee interest in the land and improvements at our properties subject to our ground leases or extend the terms of these leases before their expiration, we will lose our right to operate these properties and we will not have any economic interest in the land or improvements at the expiration of our ground leases; therefore, we generally will not share in any increase in value of the land or improvements beyond the term of a ground lease, notwithstanding our capital outlay to purchase our interest in the hotel or fund improvements thereon, and will lose our right to use the hotel.
As of December 31, 2023, hotels in Florida, Hawaii, Chicago, New York City, New Orleans and Boston represented approximately 60% of our room count, with our hotels in Florida and Hawaii alone each representing greater than 13% of our room count and 37% of our total revenue in 2023.
As of December 31, 2024, hotels in Florida, Hawaii, Chicago, New York City, New Orleans and Boston represented approximately 63% of our room count, with our hotels in Florida and Hawaii alone representing greater than 32% of our room count and 39% of our total revenue in 2024.
Governmental regulation may adversely affect the operation of our properties and our Company as a whole. The hotel industry is subject to extensive U.S. federal, state and local governmental regulations, including those relating to the service of alcoholic beverages, the preparation and sale of food, building and zoning requirements and data protection, cybersecurity and privacy.
The hotel industry is subject to extensive U.S. federal, state and local governmental regulations, including those relating to the service of alcoholic beverages, the preparation and sale of food, building and zoning requirements and data protection, cybersecurity and privacy.
The risk of a cybersecurity incident or disruption, particularly through cyber-attack or cyber intrusion, including by computer hackers, nation-state affiliated actors and cyber terrorists, has generally increased as the number, intensity and sophistication of attempted attacks and intrusions from around the world have increased. We rely on our hotel managers to protect proprietary and customer information from these threats.
The risk of a cybersecurity incident or disruption, particularly through cyber-attack or cyber intrusion, including by computer hackers, nation-state affiliated actors and cyber terrorists, has generally increased as the number, intensity and sophistication of attempted attacks and intrusions from around the world have increased.
If we do not have other funds available in these situations, we may be unable to distribute substantially all of 26 Table of Contents our taxable income as required by the REIT provisions of the Code.
From time to time, our taxable income may be greater than our cash flow available for distribution to stockholders. If we do not have other funds available in these situations, we may be unable to distribute substantially all of our taxable income as required by the REIT provisions of the Code.
Our ability to access external capital could be hampered by a number of factors, including, but not limited to, macroeconomic changes, changes in market perceptions of our growth potential, fluctuations in the market price of our common stock, and changes in the terms of our indebtedness, any of which may be outside of our control, and which, individually or in combination, could prevent us from being able to obtain the external capital we require on terms that are acceptable to us, or at all, which could have a material adverse effect on our ability to finance our future growth, our cost of capital, our liquidity and our financial condition and results of operations.
Our ability to access external capital could be hampered by a number of factors, including, but not limited to, macroeconomic changes, changes in market perceptions of our growth potential, fluctuations in the market price of our common stock, and changes in the terms of our indebtedness, any of which may be outside of our control, and which, individually or in combination, could prevent us from being able to obtain the external capital we require on terms that are acceptable to us, or at all, which could have a material adverse effect on our ability to finance our future growth, our cost of capital, our liquidity and our financial condition and results of operations. 21 Table of Contents We are subject to risks associated with the employment of hotel personnel, particularly with hotels that employ unionized labor, which could increase our operating costs, reduce the flexibility of our hotel managers to adjust the size of the workforce at our hotels and could materially and adversely affect our revenues and profitability.
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, which may reduce the number of suitable investment opportunities available to us or increase pricing of assets. 22 Table of Contents The lodging industry is subject to seasonal volatility, which is expected to contribute to fluctuations in our financial condition and results of operations.
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, which may reduce the number of suitable investment opportunities available to us or increase pricing of assets.
Risks Related to Our Industry We operate in a highly competitive industry. The lodging industry is highly competitive. Our principal competitors are other owners and investors in upper upscale, full-service hotels, including other lodging REITs, as well as major hospitality chains with well-established and recognized brands. Our hotels face competition for individual guests, group reservations and conference business.
Our principal competitors are other owners and investors in upper upscale, full-service hotels, including other lodging REITs, as well as major hospitality chains with well-established and recognized brands. Our hotels face competition for individual guests, group reservations and conference business. We also compete against smaller hotel chains and independent and local hotel owners and operators.
See “Forward-Looking Statements.” Risks Related to Our Business Economic disruptions, including the impact from inflation or a future pandemic, may adversely impact and disrupt, our business, financial performance and condition, operating results and cash flows. Economic disruptions, including as a result of supply chain disruptions and increased inflation, may adversely impact our business.
See “Forward-Looking Statements.” Risks Related to Our Business Economic disruptions, including the impact from inflation, elevated interest rates or an economic slowdown or recession, may adversely impact and disrupt, our business, financial performance and condition, operating results and cash flows.
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.
Any cybersecurity incident or disruption to our information technologies and systems 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, 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.
In addition, if we fail to satisfy the covenants contained in the credit agreement that governs our senior unsecured credit facilities, our ability to borrow additional funds under the credit facilities may be 24 Table of Contents restricted.
Inflation can 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.
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.
If the program deteriorates or materially changes in an adverse manner, or if currently tax-exempt program benefits become subject to taxation such that a material number of Hilton Honors members choose to no longer participate in the program, our business, financial condition or results of operations could be materially adversely affected.
If the program deteriorates or materially changes in an adverse manner, or if currently tax-exempt program benefits become subject to taxation such that a material number of Hilton Honors members choose to no longer participate in the program, our business, financial condition or results of operations could be materially adversely affected. 17 Table of Contents Contractual and other disagreements with or involving our current and future third-party hotel managers and franchisors could make us liable to them or result in litigation costs or other expenses.
Additionally, the effects of the recent global pandemic on the hotel industry were unprecedented, and another pandemic in the future could have similar affects, including a drastic reduction in global demand for lodging and historically low occupancy levels. These challenges may adversely impact and disrupt, our business, financial performance and condition, operating results and cash flows.
Additionally, the effects of the recent global COVID-19 pandemic on the hotel industry were unprecedented, and another pandemic or other unexpected event that results in a prolonged decrease in travel in the future could have similar affects, including a drastic reduction in global demand for lodging and historically low occupancy levels.
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.
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. 19 Table of Contents 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.
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. 27 Table of Contents 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.
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.
The lodging industry is typically seasonal in nature. The periods during which our properties experience higher revenues vary from property to property, depending principally upon location and the customer base served. This seasonality can be expected to cause periodic fluctuations in a hotel’s rooms revenues, occupancy levels, room rates and operating expenses.
The lodging industry is subject to seasonal volatility, which is expected to contribute to fluctuations in our financial condition and results of operations. The lodging industry is typically seasonal in nature. The periods during which our properties experience higher revenues vary from property to property, depending principally upon location and the customer base served.
Labor costs, including wages, can be particularly challenging at those of our hotels with unionized labor, and additional hotels may be subject to new collective bargaining agreements in the future.
Labor costs, including wages, can be particularly challenging at those of our hotels with unionized labor, and additional hotels may be subject to new collective bargaining agreements in the future. We recently experienced near-term disruption as a result of negotiations between our third-party operators and unions at certain hotels, which included strikes and other labor activity.
There are also other risks that may fall outside the general coverage terms and limits of our policies, including losses related to cybersecurity incidents, natural disaster or climate change. Market forces beyond our control could limit the scope of the insurance coverage that we can obtain or may otherwise restrict our ability to buy insurance coverage at reasonable rates.
Market forces beyond our control could limit the scope of the insurance coverage that we can obtain or may otherwise restrict our ability to buy insurance coverage at reasonable rates.
In addition, if we are found to be in breach of certain of our third-party ground leases, we could lose the right to use the applicable hotel.
We can provide no assurances that we will be able to renew any ground lease upon its expiration at all or on favorable terms. In addition, if we are found to be in breach of certain of our third-party ground leases, we could lose the right to use the applicable hotel.
If the insurance that we carry does not sufficiently cover damage or other potential losses or liabilities involving our properties, including as a result of terrorism and climate change, our profits could be reduced. Because certain types of losses are uncertain, including natural disaster, the effects of climate change or other catastrophic losses, they may be uninsurable or prohibitively expensive.
There can be no assurance that climate change will not have a material adverse effect on our hotels, operations or business. If the insurance that we carry does not sufficiently cover damage or other potential losses or liabilities involving our properties, including as a result of terrorism and climate change, our profits could be reduced.
The effects of climate change may also affect our business by increasing the cost of (or making unavailable) property insurance on terms we find acceptable in areas most vulnerable to such events. There can be no assurance that climate change will not have a material adverse effect on our hotels, operations or business.
The effects of climate change may also affect our business by increasing the cost of (or making unavailable) property insurance on terms we find acceptable in areas most vulnerable to such events, increase other costs, such as utilities, regulatory compliance or make travel more expensive, decreasing demand for our hotels.
We face various risks posed by our acquisition activities. A key element of our business strategy is identifying and consummating acquisitions of additional hotels and portfolios. We can provide no assurances that we will be successful in identifying attractive hotels in the future or that, once identified, we will be successful in consummating future acquisitions.
Since our acquisition of Chesapeake Lodging Trust in 2019, we have not acquired any new hotels, and we can provide no assurances that we will be successful in identifying attractive hotels in the future or that, once identified, we will be successful in consummating future acquisitions.
We can provide no assurances that our cash flows will be sufficient to offset any shortfalls that occur as a result of these fluctuations. Consequently, volatility in our financial performance resulting from the seasonality of the lodging industry could adversely affect our financial condition and results of operations.
This seasonality can be expected to cause periodic fluctuations in a hotel’s rooms revenues, occupancy levels, room rates and operating expenses. We can provide no assurances that our cash flows will be sufficient to offset any shortfalls that occur as a result of these fluctuations.
In addition, we may incur mortgage debt by obtaining loans secured by a portfolio of some or all of the hotels that we own or acquire. To the extent we incur additional debt, the substantial leverage risks described in the preceding two risk factors would increase.
Additionally, we may be able to incur significant additional indebtedness in the future. We may also incur significant additional obligations, such as trade payables, without restrictions under our debt instruments. In addition, we may incur mortgage debt by obtaining loans secured by a portfolio of some or all of the hotels that we own or acquire.
If any of our hotels are foreclosed on due to a default, our ability to pay cash distributions to our stockholders will be limited. We may be able to incur substantially more debt and enter into other transactions, which could further exacerbate the risks to our financial condition described above.
If any of our hotels are foreclosed on due to a default, our ability to pay cash distributions to our stockholders will be limited. Risks Related to the Spin-Off In connection with the spin-offs, Hilton and HGV indemnified us for certain liabilities.
Removed
Contractual and other disagreements with or involving our current and future third-party hotel managers and franchisors could make us liable to them or result in litigation costs or other expenses.
Added
Economic disruptions, including as a result of elevated interest rates and elevated rates of inflation or a potential economic slowdown or recession, may adversely affect our business by affecting consumer sentiment and demand for travel, which can cause fluctuations in hotel revenues or earnings at our hotels.
Removed
Like many corporations, our information networks and systems are a target of attacks. In addition, third-party providers of data hosting or cloud services may experience cybersecurity incidents that may involve data we share with them.
Added
These challenges may adversely impact and disrupt, our business, financial performance and condition, operating results and cash flows.
Removed
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.
Added
A key element of our business strategy is identifying and consummating acquisitions of additional hotels and portfolios.
Removed
We are subject to risks associated with the employment of hotel personnel, particularly with hotels that employ unionized labor, which could increase our operating costs, reduce the flexibility of our hotel managers to adjust the size of the workforce at our hotels and could materially and adversely affect our revenues and profitability.
Added
Cyber-attackers increasingly are using more sophisticated techniques and tools (including artificial intelligence and machine learning) designed to evade detection and circumvent security controls, which may make it more difficult for us, our hotel managers, and third-party providers to fully identify, investigate or remediate cybersecurity incidents. We rely on our hotel managers to protect proprietary and customer information from these threats.
Removed
The use of debt to finance future acquisitions could restrict operations, inhibit our ability to grow our business and revenues, and negatively affect our business and financial results. We may be able to incur significant additional indebtedness in the future. We may also incur significant additional obligations, such as trade payables, without restrictions under our debt instruments.
Added
Due to the complexity and interconnectedness of our information technologies and systems, and those upon which we rely, the process of upgrading or patching our protective measures could itself create a risk of cybersecurity issues or system disruptions for the Company. Further, any adoption of artificial intelligence by us or by third parties may pose new security challenges.
Removed
Risks Related to the Spin-Off We may be responsible for U.S. federal income tax liabilities that relate to the spin-off. Hilton Parent received a ruling (“IRS Ruling”) from the U.S. Internal Revenue Service (“IRS”) regarding certain U.S. federal income tax aspects of the spin-off.
Added
In addition, the cost and operational consequences of responding to cybersecurity incidents and implementing remediation measures could be significant.
Removed
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.
Added
Because certain types of losses are uncertain, including those caused by natural disaster, the effects of climate change or other catastrophic losses, they may be uninsurable or prohibitively expensive. There are also other risks that may fall outside the general coverage terms and limits of our policies, including losses related to cybersecurity incidents, natural disaster or climate change.
Removed
As a result of the IRS’s ruling policy at the time of Hilton Parent’s submission, with respect to transactions under 24 Table of Contents 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.
Added
In recent years, diverse views about the value of environmental, social and governance ("ESG") specific efforts have emerged from consumers and policymakers.
Removed
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.
Added
As we continue to invest and focus on corporate responsibility efforts 22 Table of Contents and initiatives that we believe are appropriate, we could also be criticized by ESG detractors for the scope or nature of our corporate responsibility initiatives or goals.
Removed
If all or a portion of the spin-off does not qualify as a tax-free transaction for any reason, Hilton Parent may recognize a substantial gain for U.S. federal income tax purposes. In such case, under U.S.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeRisk Factors - Risks Related to Our Business - Cyber threats and the risk of cybersecurity incidents affecting our information technology systems or the information technology systems of our hotel managers or third-party service providers could materially adversely affect our business" included elsewhere within this Annual Report on Form 10-K.
Biggest changeRisk Factors - Risks Related to Our Business - Cyber threats and the risk of cybersecurity incidents affecting our hotel managers' or our own information technology and systems, including third-party service providers, could materially adversely affect our business" included elsewhere within this Annual Report on Form 10-K.
We carry insurance that helps provide protection against the potential losses arising from cybersecurity incidents, although we may incur expenses and losses related to a cybersecurity incident that are not covered by insurance or are in excess of our insurance coverage. 29 Table of Contents
We carry insurance that helps provide protection against the potential losses arising from cybersecurity incidents, although we may incur expenses and losses related to a cybersecurity incident that are not covered by insurance or are in excess of our insurance coverage. 30 Table of Contents
The ERM Committee reports to the Audit Committee at least annually on the Company's enterprise risk management and will report security instances to the Audit Committee as they occur, if material.
The ERM Committee reports to the Audit Committee at least annually on the Company's enterprise risk management and will report cybersecurity incidents to the Audit Committee as they occur, if material.
We have undertaken table-top risk exercises and employees participate in mandatory annual trainings and receive communications regarding the cybersecurity environment to increase awareness throughout the Company. The Company's cybersecurity program is based on the U.S. National Institute for Standards and Technology Cybersecurity Framework.
We have undertaken table-top risk exercises and employees participate in mandatory annual trainings and receive communications regarding the cybersecurity environment to increase awareness throughout the Company. The Company's cybersecurity program is informed by industry-recognized security frameworks such as the U.S. National Institute of Standards and Technology Cybersecurity Framework.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeOur Properties (1) The following table provides a list of our portfolio as of February 28, 2024: Location Type (2) Ownership Percentage Rooms California DoubleTree Hotel San Jose FS 100% 505 DoubleTree Hotel Ontario Airport FS 67% 482 Hyatt Regency Mission Bay Spa and Marina GL 100% 438 Hilton La Jolla Torrey Pines JV, GL 25% 394 Hilton Santa Barbara Beachfront Resort FS 50% 360 Hilton Oakland Airport GL 100% 360 JW Marriott San Francisco Union Square GL 100% 344 Hyatt Centric Fisherman's Wharf FS 100% 316 DoubleTree Hotel San Diego – Mission Valley GL 100% 300 DoubleTree Hotel Sonoma Wine Country GL 100% 245 Juniper Hotel Cupertino, Curio Collection FS 100% 224 Hilton Checkers Los Angeles FS 100% 193 Colorado Hilton Denver City Center FS (3) 100% 613 DoubleTree Hotel Durango GL 100% 159 District of Columbia Capital Hilton JV, FS 25% 559 Florida Hilton Orlando JV, FS 20% 1,424 Signia by Hilton Orlando Bonnet Creek FS 100% 1,009 Hilton Orlando Lake Buena Vista GL 100% 814 Waldorf Astoria Orlando FS 100% 502 Royal Palm South Beach Miami – a Tribute Portfolio Resort FS 100% 393 Casa Marina Key West, Curio Collection FS 100% 311 The Reach Key West, Curio Collection FS 100% 150 Hawaii Hilton Hawaiian Village Waikiki Beach Resort FS (3) 100% 2,860 Hilton Waikoloa Village FS (3) 100% 647 Illinois Hilton Chicago FS 100% 1,544 W Chicago – Lakeshore FS 100% 520 W Chicago – City Center FS 100% 403 Louisiana Hilton New Orleans Riverside FS (3) 100% 1,622 Massachusetts Hilton Boston Logan Airport GL 100% 604 Hyatt Regency Boston FS 100% 502 Boston Marriott Newton FS 100% 430 Missouri Embassy Suites Kansas City Plaza GL 100% 266 30 Table of Contents Location Type (2) Ownership Percentage Rooms New Jersey Hilton Short Hills FS 100% 314 New York New York Hilton Midtown FS (3) 100% 1,878 Puerto Rico Caribe Hilton FS (3) 100% 652 Texas Embassy Suites Austin Downtown South Congress GL 100% 262 Utah Hilton Salt Lake City Center GL 100% 500 Virginia DoubleTree Hotel Washington DC – Crystal City FS 100% 627 Hilton McLean Tysons Corner FS 100% 458 Embassy Suites Alexandria Old Town JV, FS (3) 50% 288 Washington DoubleTree Hotel Seattle Airport GL 100% 850 Hilton Seattle Airport & Conference Center GL 100% 396 DoubleTree Hotel Spokane City Center FS 10% 375 Total 26,093 ____________________________________________________________________________________ (1) Excludes the two Hilton San Francisco Hotels that were placed into receivership in October 2023.
Biggest changeOur Properties (1) The following table provides a list of our portfolio as of February 20, 2025: Location Type (2) Ownership Percentage Rooms California DoubleTree Hotel San Jose FS 100% 505 DoubleTree Hotel Ontario Airport FS 67% 482 Hyatt Regency Mission Bay Spa and Marina GL 100% 438 Hilton Santa Barbara Beachfront Resort FS 50% 360 JW Marriott San Francisco Union Square GL 100% 344 Hyatt Centric Fisherman's Wharf FS 100% 316 DoubleTree Hotel San Diego – Mission Valley GL 100% 300 DoubleTree Hotel Sonoma Wine Country GL 100% 245 Juniper Hotel Cupertino, Curio Collection FS 100% 224 Hilton Checkers Los Angeles FS 100% 193 Colorado Hilton Denver City Center FS (3) 100% 613 DoubleTree Hotel Durango GL 100% 159 District of Columbia Capital Hilton JV, FS 25% 559 Florida Hilton Orlando JV, FS 20% 1,424 Signia by Hilton Orlando Bonnet Creek FS 100% 1,009 Hilton Orlando Lake Buena Vista GL 100% 814 Waldorf Astoria Orlando FS 100% 502 Royal Palm South Beach Miami, a Tribute Portfolio Resort FS 100% 393 Casa Marina Key West, Curio Collection FS 100% 311 The Reach Key West, Curio Collection FS 100% 150 Hawaii Hilton Hawaiian Village Waikiki Beach Resort FS (3) 100% 2,872 Hilton Waikoloa Village FS (3) 100% 653 Illinois Hilton Chicago FS 100% 1,544 The Wade (4) FS 100% 520 The Midland Hotel, a Tribute Portfolio Hotel (5) FS 100% 403 Louisiana Hilton New Orleans Riverside FS (3) 100% 1,622 Massachusetts Hilton Boston Logan Airport GL 100% 604 Hyatt Regency Boston FS 100% 502 Boston Marriott Newton FS 100% 430 Missouri Embassy Suites Kansas City Plaza GL 100% 266 New Jersey Hilton Short Hills FS 100% 314 31 Table of Contents Location Type (2) Ownership Percentage Rooms New York New York Hilton Midtown FS (3) 100% 1,878 Puerto Rico Caribe Hilton FS (3) 100% 652 Texas Embassy Suites Austin Downtown South Congress GL 100% 262 Utah Hilton Salt Lake City Center GL 100% 500 Virginia DoubleTree Hotel Washington DC – Crystal City FS 100% 627 Hilton McLean Tysons Corner FS 100% 458 Embassy Suites Alexandria Old Town JV, FS (3) 50% 288 Washington DoubleTree Hotel Seattle Airport GL 100% 850 Hilton Seattle Airport & Conference Center GL 100% 396 Total 24,982 ____________________________________________________________________________________ (1) Excludes the two Hilton San Francisco Hotels that were placed into receivership in October 2023.
(2) “FS” refers to fee simple ownership interest; “GL” refers to ground lease; “JV” refers to unconsolidated joint venture. (3) Certain portions of land or facilities are subject to lease.
(2) “FS” refers to fee simple ownership interest; “GL” refers to ground lease; “JV” refers to unconsolidated joint venture. (3) Certain portions of land or facilities are subject to lease. (4) In February 2025, the W Chicago – Lakeshore was converted to The Wade.
Added
(5) In January 2025, the W Chicago – City Center was converted to The Midland Hotel, a Tribute Portfolio Hotel.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

2 edited+0 added−0 removed4 unchanged
Biggest changeAdditionally, the Distribution Agreement and Tax Matters Agreement provide for cross-indemnities that, except as otherwise provided in the Distribution Agreement and Tax Matters Agreement, are principally designed to place financial responsibility for the obligations and liabilities of Hilton, HGV and the Company with the appropriate company.
Biggest changeAdditionally, the spin-off agreements provide for cross-indemnities that, except as otherwise provided in the spin-off agreements, are principally designed to place financial responsibility for the obligations and liabilities of Hilton, HGV and the Company with the appropriate company.
See “Spin-off Related Agreements – Distribution Agreement” and “– Tax Matters Agreement” and Note 15: "Commitments and Contingencies" in our audited consolidated financial statements included elsewhere within this Annual Report on Form 10-K for additional information. Item 4. Mine Safety Disclosures. Not applicable. 31 Table of Contents PART II
See “Spin-off Related Agreements – Distribution Agreement” and “– Tax Matters Agreement” and Note 15: "Commitments and Contingencies" in our audited consolidated financial statements included elsewhere within this Annual Report on Form 10-K for additional information. Item 4. Mine Safety Disclosures. Not applicable. 32 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

8 edited+1 added−0 removed6 unchanged
Biggest changeUnregistered Sales of Equity Securities and Use of Proceeds We did not sell any equity securities during the fiscal year ended December 31, 2023 that were not registered under the Securities Act of 1933, as amended. 33 Table of Contents Purchases of Equity Securities by the Issuer and Affiliate Purchasers Period Total number of shares purchased (1) Weighted average price paid per share (2) Total number of shares purchased as part of publicly announced plans or programs Maximum number (or approximate dollar value) of common shares that may yet be purchased under the plans or programs (3) (in millions) January 1, 2023 through January 31, 2023 2,536,900 $ 11.64 2,536,900 $ 43 February 1, 2023 through February 28, 2023 174,848 $ 13.78 — $ 300 March 1, 2023 through March 31, 2023 6,278,600 $ 11.93 6,278,600 $ 225 April 1, 2023 through April 30, 2023 105 $ 12.17 — $ 225 May 1, 2023 through May 31, 2023 236 $ 12.40 — $ 225 June 1, 2023 through June 30, 2023 332 $ 13.74 — $ 225 July 1, 2023 through July 31, 2023 253 $ 13.16 — $ 225 August 1, 2023 through August 31, 2023 5,760,165 $ 13.00 5,759,966 $ 150 September 1, 2023 through September 30, 2023 315 $ 12.83 — $ 150 October 1, 2023 through October 31, 2023 57 $ 12.00 — $ 150 November 1, 2023 through November 30, 2023 225 $ 12.89 — $ 150 December 1, 2023 through December 31, 2023 — $ — — $ 150 Total 14,752,036 14,575,466 ____________________________________________________________________________________ (1) The number of shares purchased represents shares of common stock repurchased under the applicable previously announced stock repurchase programs as well as shares of common stock surrendered by certain of our employees to satisfy their federal and state tax obligations associated with the vesting of restricted common stock.
Biggest changeUnregistered Sales of Equity Securities and Use of Proceeds We did not sell any equity securities during the fiscal year ended December 31, 2024 that were not registered under the Securities Act of 1933, as amended. 34 Table of Contents Purchases of Equity Securities by the Issuer and Affiliate Purchasers Period Total number of shares purchased (1) Weighted average price paid per share (2) Total number of shares purchased as part of publicly announced plans or programs (3) Maximum number (or approximate dollar value) of common shares that may yet be purchased under the plans or programs (3) (in millions) January 1, 2024 through January 31, 2024 — $ — — $ 150 February 1, 2024 through February 29, 2024 162,539 $ 15.39 — $ 150 March 1, 2024 through March 31, 2024 — $ — — $ 150 April 1, 2024 through April 30, 2024 106 $ 17.12 — $ 150 May 1, 2024 through May 31, 2024 1,483 $ 15.95 — $ 150 June 1, 2024 through June 30, 2024 1,663,340 $ 15.01 1,662,959 $ 125 July 1, 2024 through July 31, 2024 260 $ 14.48 — $ 125 August 1, 2024 through August 31, 2024 2,524,173 $ 13.85 2,524,001 $ 90 September 1, 2024 through September 30, 2024 242 $ 14.44 — $ 90 October 1, 2024 through October 31, 2024 57 $ 14.44 — $ 90 November 1, 2024 through November 30, 2024 1,846,863 $ 14.30 1,846,660 $ 64 December 1, 2024 through December 31, 2024 2,015,436 $ 14.84 2,015,436 $ 34 Total 8,214,499 8,049,056 ____________________________________________________________________________________ (1) The number of shares purchased represents shares of common stock repurchased under the applicable previously announced stock repurchase program as well as 165,443 shares of common stock surrendered by certain of our employees to satisfy their federal and state tax obligations associated with the vesting of restricted common stock.
Distribution Information In order to maintain our qualification for taxation as a REIT, we intend to distribute annually at least 90% of our REIT taxable income, determined without regard to the deduction for dividends paid and excluding any net capital gain, to our stockholders on an annual basis.
Distribution Information In order to maintain our qualification for taxation as a REIT, we are required to distribute annually at least 90% of our REIT taxable income, determined without regard to the deduction for dividends paid and excluding any net capital gain, to our stockholders on an annual basis.
When determining the amount of future distributions, we expect that our Board will consider, among other factors, (1) the amount required to be distributed to maintain our status as a REIT, (2) limitations on our ability to make distributions contained in the indentures for our senior notes and credit facility, which restrict our ability to make distributions subject to limited exceptions, (3) the amount of cash generated from our operating activities, (4) our expectations of future cash flows, (5) our determination of near-term cash needs for debt repayments, existing or future share repurchases, and selective acquisitions of new properties, (6) the timing of significant capital investments and expenditures and the establishment of any cash reserves, (7) our ability to continue to access additional sources of capital, and (8) the sufficiency of legally available assets. 32 Table of Contents Share Performance Graph The following graph compares our cumulative total stockholder return since December 31, 2018 against the cumulative total returns of the National Association of Real Estate Investment Trust (“Nareit”) Equity Index and the Standard and Poor’s MidCap 400 Index (“S&P 400 Index”).
When determining the amount of future distributions, we expect that our Board will consider, among other factors, (1) the amount required to be distributed to maintain our status as a REIT, (2) any limitations on our ability to make distributions contained in the indentures for our senior notes and credit facility, (3) the amount of cash generated from our operating activities, (4) our expectations of future cash flows, (5) our determination of near-term cash needs for debt repayments, existing or future share repurchases, and selective acquisitions of new properties, (6) the timing of significant capital investments and expenditures and the establishment of any cash reserves, (7) our ability to continue to access additional sources of capital, and (8) the sufficiency of legally available assets. 33 Table of Contents Share Performance Graph The following graph compares our cumulative total stockholder return since December 31, 2019 against the cumulative total returns of the National Association of Real Estate Investment Trust (“Nareit”) Equity Index and the Standard and Poor’s MidCap 400 Index (“S&P 400 Index”).
Stock Repurchase Program In February 2023, our Board terminated a previous $300 million stock repurchase program that was approved in February 2022 (the "February 2022 Stock Repurchase Program") and authorized and approved a new stock repurchase program allowing us to repurchase up to $300 million of our common stock over a two-year period ending in February 2025 (the "February 2023 Stock Repurchase Program" and collectively with the February 2022 Stock Repurchase Program the "Stock Repurchase Programs"), subject to any applicable limitations or restrictions set forth in our credit facility and indentures related to our senior notes.
Stock Repurchase Program In February 2025, our Board terminated a previous $300 million stock repurchase program that was approved in February 2023 (the "February 2023 Stock Repurchase Program") and authorized and approved a new stock repurchase program allowing us to repurchase up to $300 million of our common stock over a two-year period ending in February 2027 (the "February 2025 Stock Repurchase Program"), subject to any applicable limitations or restrictions set forth in our credit facility and indentures related to our senior notes.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Market Information Our common stock trades on the NYSE under the symbol "PK". Shareholder Information At February 23, 2024, we had 14 holders of record of our common stock.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Market Information Our common stock trades on the NYSE under the symbol "PK". Shareholder Information At February 14, 2025, we had 15 holders of record of our common stock.
During the year ended December 31, 2023, we repurchased in aggregate under the Stock Repurchase Programs approximately 14.6 million shares of our common stock for a total purchase price of $180 million, and as of December 31, 2023, $150 million remained available for stock repurchases under the February 2023 Stock Repurchase Program. Item 6. [Reserved] 34 Table of Contents
During the year ended December 31, 2024, we repurchased approximately 8.0 million shares of our common stock under the 2023 Stock Repurchase Program for a total purchase price of $116 million, and as of December 31, 2024, prior to the termination of the February 2023 Stock Repurchase program, $34 million remained available for stock repurchases.
The graph assumes an initial investment of $100 in our common stock and each of the indexes on December 31, 2018, and that all dividends and other distributions were reinvested. 12/31/2018 12/31/2019 12/31/2020 12/31/2021 12/31/2022 12/31/2023 Park Hotels and Resorts Inc. $ 100.00 $ 108.34 $ 77.61 $ 85.44 $ 53.47 $ 73.36 S&P 400 Index 100.00 124.05 138.70 170.89 146.14 167.26 Nareit Equity Index 100.00 126.00 115.92 166.04 125.58 142.83 This performance graph shall not be deemed "filed" for the purposes of Section 18 of the Exchange Act, or incorporated by reference into any filing by us under the Securities Act, except as shall be expressly set forth by specific reference in such filing.
The graph assumes an initial investment of $100 in our common stock and each of the indexes on December 31, 2019, and that all dividends and other distributions were reinvested. 12/31/2019 12/31/2020 12/31/2021 12/31/2022 12/31/2023 12/31/2024 Park Hotels and Resorts Inc. $ 100.00 $ 71.64 $ 78.86 $ 49.35 $ 67.71 $ 72.35 S&P 400 Index 100.00 111.81 137.76 117.81 134.83 151.28 Nareit Equity Index 100.00 92.00 131.78 99.67 113.35 123.25 This performance graph shall not be deemed "filed" for the purposes of Section 18 of the Exchange Act, or incorporated by reference into any filing by us under the Securities Act, except as shall be expressly set forth by specific reference in such filing.
(3) The stock repurchase program authorized on February 25, 2022, which allowed for the repurchase of up to $300 million of our common stock, was terminated on February 17, 2023, upon the authorization of a new $300 million stock repurchase program, which expires on February 21, 2025.
(3) On February 17, 2023, our Board of Directors authorized and approved a $300 million stock repurchase program. On February 14, 2025, the Board of Directors terminated this stock repurchase program and authorized and approved a new $300 million stock repurchase program, which expires on February 19, 2027.
Added
As of February 20, 2025, no shares of our common stock have been repurchased under the new February 2025 Stock Repurchase Program. Item 6. [Reserved] 35 Table of Contents

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

70 edited+21 added−26 removed64 unchanged
Biggest changeThe following table provides a reconciliation of Net income to Hotel Adjusted EBITDA: Year Ended December 31, 2023 2022 (in millions) Net income $ 106 $ 173 Depreciation and amortization expense 287 269 Interest income (38) (13) Interest expense 207 217 Interest expense associated with hotels in receivership 45 30 Income tax expense 38 — Interest expense, income tax and depreciation and amortization included in equity in earnings from investments in affiliates 8 9 EBITDA 653 685 Gain on sales of assets, net (1) (15) (22) Gain on derecognition of assets (2) (221) — Gain on sale of investments in affiliates (3) (3) (92) Share-based compensation expense 18 17 Impairment and casualty loss 204 6 Other items 23 12 Adjusted EBITDA 659 606 Less: Adjusted EBITDA from investments in affiliates (24) (25) Add: All other (4) 51 49 Hotel Adjusted EBITDA $ 686 $ 630 ____________________________________________________________________________________ (1) For the year ended December 31, 2022, includes a gain of $9 million on the sale of the DoubleTree Las Vegas Hotel included in equity in earnings (losses) from investments in affiliates.
Biggest changeSome of these limitations are: • EBITDA, Adjusted EBITDA and Hotel Adjusted EBITDA do not reflect changes in, or cash requirements for, our working capital needs; • EBITDA, Adjusted EBITDA and Hotel Adjusted EBITDA do not reflect the cash requirements necessary to service interest or principal payments, on our indebtedness; • EBITDA, Adjusted EBITDA and Hotel Adjusted EBITDA do not reflect the cash requirements to pay our taxes; • EBITDA, Adjusted EBITDA and Hotel Adjusted EBITDA do not reflect historical cash expenditures or future requirements for capital expenditures or contractual commitments; and • although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and EBITDA, Adjusted EBITDA and Hotel Adjusted EBITDA do not reflect any cash requirements for such replacements. 40 Table of Contents The following table provides a reconciliation of Net income to Hotel Adjusted EBITDA: Year Ended December 31, 2024 2023 (in millions) Net income $ 226 $ 106 Depreciation and amortization expense 257 287 Interest income (21) (38) Interest expense 214 207 Interest expense associated with hotels in receivership (1) 60 45 Income tax (benefit) expense (61) 38 Interest income and expense, income tax and depreciation and amortization included in equity in earnings from investments in affiliates 10 8 EBITDA 685 653 Gain on sales of assets, net (8) (15) Gain on derecognition of assets (1) (60) (221) Gain on sale of investments in affiliates (2) (19) (3) Share-based compensation expense 19 18 Impairment and casualty loss 14 204 Other items 21 23 Adjusted EBITDA 652 659 Less: Adjusted EBITDA from investments in affiliates (23) (24) Add: All other (3) 54 51 Hotel Adjusted EBITDA $ 683 $ 686 ____________________________________________________________________________________ (1) For the year ended December 31, 2024, represents accrued interest expense associated with the default of the SF Mortgage Loan, which is offset by a gain on derecognition for the corresponding increase of the contract asse t on our consolidated balance sheets, as we expect to be released from this obligation upon final resolution with the lender.
Other. Primarily related to support services we provide to HGV timeshare properties that have a presence within or adjacent to certain of our hotels, which include cost reimbursements for the costs of providing housekeeping, landscaping, general maintenance and other services plus a fee representing a percentage of cost reimbursements. Factors Affecting our Revenues Consumer demand .
Primarily related to support services we provide to HGV timeshare properties that have a presence within or adjacent to certain of our hotels, which include cost reimbursements for the costs of providing housekeeping, landscaping, general maintenance and other services plus a fee representing a percentage of cost reimbursements. Factors Affecting our Revenues Consumer demand .
Investing Activities The $217 million in net cash used in investing activities for the year ended December 31, 2023 was primarily attributable to $296 million in capital expenditures and land acquisitions and a $30 million reduction of restricted cash associated with the derecognition of the Hilton San Francisco hotels, partially offset by $116 million of net proceeds from the sale of one of our hotels.
The $217 million in net cash used in investing activities for the year ended December 31, 2023 was primarily attributable to $296 million of capital expenditures and land acquisitions and a $30 million reduction of restricted cash associated with the derecognition of the Hilton San Francisco hotels, partially offset by $116 million of net proceeds from the sale of one of our hotels.
Financing Activities The $475 million in net cash used in financing activities for the year ended December 31, 2023 was primarily attributable to the repurchase of approximately 14.6 million shares of our common stock for approximately $180 million, $152 million of dividends paid and $133 million of debt repayments.
The $475 million in net cash used in financing activities for the year ended December 31, 2023 was primarily attributable to the repurchase of approximately 14.6 million shares of our common stock for $180 million, $152 million of dividends paid and $133 million of debt repayments.
Income Taxes We use a prescribed more-likely-than-not recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return if there is uncertainty in income taxes recognized in the financial statements. Assumptions and estimates are used to determine the more-likely-than-not designation.
We use a prescribed more-likely-than-not recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return if there is uncertainty in income taxes recognized in the financial statements. Assumptions and estimates are used to determine the more-likely-than-not designation.
Adjusted EBITDA, presented herein, is calculated as EBITDA, further 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: • Gains or losses on sales of assets for both consolidated and unconsolidated investments; • Costs associated with hotel acquisitions or dispositions expensed during the period; • Severance expense; • Share-based compensation expense; • Impairment losses and casualty gains or losses; and • Other items that we believe are not representative of our current or future operating performance. 38 Table of Contents Hotel Adjusted EBITDA measures hotel-level results before debt service, depreciation and corporate expenses for our consolidated hotels, which excludes hotels owned by unconsolidated affiliates, and is a key measure of our profitability.
Adjusted EBITDA, presented herein, is calculated as EBITDA, further 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: • Gains or losses on sales of assets for both consolidated and unconsolidated investments; • Costs associated with hotel acquisitions or dispositions expensed during the period; • Severance expense; • Share-based compensation expense; • Impairment losses and casualty gains or losses; and • Other items that we believe are not representative of our current or future operating performance. 39 Table of Contents Hotel Adjusted EBITDA measures hotel-level results before debt service, depreciation and corporate expenses for our consolidated hotels, which excludes hotels owned by unconsolidated affiliates, and is a key measure of our profitability.
We present Hotel Adjusted EBITDA to help us and our investors evaluate the ongoing operating performance of our consolidated hotels. EBITDA, Adjusted EBITDA and Hotel Adjusted EBITDA are not recognized terms under U.S. GAAP and should not be considered as alternatives to net income (loss) or other measures of financial performance or liquidity derived in accordance with U.S. GAAP.
We present Hotel Adjusted EBITDA to help us and our investors evaluate the ongoing operating performance of our consolidated hotels. EBITDA, Adjusted EBITDA and Hotel Adjusted EBITDA are not recognized terms under U.S. GAAP and should not be considered as alternatives to net income or other measures of financial performance or liquidity derived in accordance with U.S. GAAP.
(4) Includes other revenues and other expenses , non-income taxes on TRS leases included in other property expenses and corporate general and administrative expenses. Nareit FFO attributable to stockholders and Adjusted FFO attributable to stockholders We present Nareit FFO attributable to stockholders and Nareit FFO per diluted share (defined as set forth below) as non-GAAP measures of our performance.
(3) Includes other revenues and other expenses , non-income taxes on TRS leases included in other property expenses and corporate general and administrative expenses. Nareit FFO attributable to stockholders and Adjusted FFO attributable to stockholders We present Nareit FFO attributable to stockholders and Nareit FFO per diluted share (defined as set forth below) as non-GAAP measures of our performance.
Expenses Principal Components Rooms . These costs include housekeeping, reservation systems, room supplies, laundry services at our hotels and front desk costs. 36 Table of Contents Food and beverage . These costs primarily include food, beverage and the associated labor and will correlate closely with food and beverage revenues. Other departmental and support .
Expenses Principal Components Rooms . These costs include housekeeping, reservation systems, room supplies, laundry services at our hotels and front desk costs. Food and beverage . These costs primarily include food, beverage and the associated labor and will correlate closely with food and beverage revenues. 37 Table of Contents Other departmental and support .
Refer to Note 7: "Debt" in our audited consolidated financial statements included elsewhere within this Annual Report on Form 10-K for additional information on the SF Mortgage Loan. We may also take actions to improve our liquidity, such as the issuance of additional debt, equity or equity-linked securities, if we determine that doing so would be beneficial to us.
Refer to Note 7: "Debt" in our audited consolidated financial statements included elsewhere within this Annual Report on Form 10-K for additional information. We may also take actions to improve our liquidity, such as the issuance of additional debt, equity or equity-linked securities, if we determine that doing so would be beneficial to us.
Our presentation may not be comparable to FFO reported by other REITs that do not define the terms in accordance with the current Nareit definition, or that interpret the current Nareit 40 Table of Contents definition differently than we do.
Our presentation may not be comparable to FFO reported by other REITs that do not define the terms in accordance with the current Nareit definition, or that interpret the current Nareit 41 Table of Contents definition differently than we do.
Gain on derecognition of assets During the year ended December 31, 2023, we recognized a gain of $221 million from the derecognition of the Hilton San Francisco Hotels from our consolidated balance sheet in October 2023, when the receiver took control of the hotels.
During the year ended December 31, 2023, we recognized a gain of $221 million from the derecognition of the Hilton San Francisco Hotels from our consolidated balance sheet in October 2023, when the receiver took control of the hotels.
For the discussion and analysis of our 2021 financial condition and results of operations compared to 2022, refer to Item 7., “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the year ended December 31, 2022.
For the discussion and analysis of our 2022 financial condition and results of operations compared to 2023, refer to Item 7., “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the year ended December 31, 2023.
EBITDA, Adjusted EBITDA and Hotel Adjusted EBITDA EBITDA, presented herein, reflects net income (loss) excluding depreciation and amortization, interest income, interest expense, income taxes and also interest expense, income tax and depreciation and amortization included in equity in earnings (losses) from investments in affiliates.
EBITDA, Adjusted EBITDA and Hotel Adjusted EBITDA EBITDA, presented herein, reflects net income excluding depreciation and amortization, interest income, interest expense, income taxes and also interest income and expense, income tax and depreciation and amortization included in equity in earnings from investments in affiliates.
We evaluate several factors, including market data for similar assets, expected future cash flows discounted at risk-adjusted rates and replacement cost 47 Table of Contents for the assets to determine an appropriate fair value of the assets. Changes to these factors could affect the measurement of assets and liabilities.
We evaluate several factors, including market data for similar assets, expected future cash flows discounted at risk-adjusted rates and replacement cost for the assets to determine an appropriate fair value of the assets. Changes to these factors could affect the measurement of assets and liabilities.
In addition, we declared a first quarter dividend of $0.25 per share in February 2024 to be paid on April 15, 2024 to stockholders of record as of March 29, 2024. Many of the other expenses associated with our hotels are relatively fixed, including portions of rent expense, property taxes and insurance.
In addition, we declared a first quarter dividend of $0.25 per share in February 2025 to be paid on April 15, 2025 to stockholders of record as of March 31, 2025. Many of the other expenses associated with our hotels are relatively fixed, including portions of rent expense, property taxes and insurance.
If it is determined that the expected undiscounted future cash flows are less than the net book value of the assets, the excess of the net book value over the estimated fair value is recorded in our consolidated statements of comprehensive income (loss) as an impairment loss.
If it is determined that the expected undiscounted future cash flows are less than the net book value of the assets, the excess of the net book value over the estimated fair value is recorded in our consolidated statements of operations as an impairment loss.
Throughout 2023, we continued to experience improvements in overall demand across our portfolio and expect the improvement to continue through 2024 based on current demand trends, including an increase in city-wide events and from international travel. We continue to mitigate the effects of macroeconomic and inflationary pressures through active asset management.
During 2024, we continued to experience improvements in overall demand across our portfolio and expect the improvement to continue through 2025 based on current demand trends, including an increase in city-wide events and from international travel. We continue to mitigate the effects of macroeconomic and inflationary pressures through active asset management.
Stock Repurchase Program In February 2023, our Board terminated a previous $300 million stock repurchase program that was approved in February 2022 (the "February 2022 Stock Repurchase Program") and authorized and approved a new stock repurchase program allowing us to repurchase up to $300 million of our common stock over a two-year period ending in February 2025 (the "February 2023 Stock Repurchase Program" and collectively with the February 2022 Stock Repurchase Program the "Stock Repurchase Programs"), subject to any applicable limitations or restrictions set forth in our credit facility and indentures related to our senior notes.
Stock Repurchase Program In February 2025, our Board terminated a previous $300 million stock repurchase program that was approved in February 2023 (the "February 2023 Stock Repurchase Program") and authorized and approved a new stock repurchase program allowing us to repurchase up to $300 million of our common stock over a two-year period ending in February 2027 (the "February 2025 Stock Repurchase Program"), subject to any applicable limitations or restrictions set forth in our credit facility and indentures related to our senior notes.
The remaining income tax expense is primarily related to our TRSs. Liquidity and Capital Resources Overview We seek to maintain sufficient amounts of liquidity with an appropriate balance of cash, debt and equity to provide financial flexibility. As of December 31, 2023, we had total cash and cash equivalents of $717 million and $33 million of restricted cash.
The remaining income tax expense is primarily related to our TRSs. Liquidity and Capital Resources Overview We seek to maintain sufficient amounts of liquidity with an appropriate balance of cash, debt and equity to provide financial flexibility. As of December 31, 2024, we had total cash and cash equivalents of $402 million and $38 million of restricted cash.
Other gain (loss), net During the year ended December 31, 2023, we recognized a gain of approximately $4 million primarily due to an early termination fee received from the lessor to terminate the lease for the Embassy Suites Phoenix Airport hotel.
During the year ended December 31, 2023, we recognized a gain of approximately $4 million for an early termination fee received from the lessor to terminate the lease for the Embassy Suites Phoenix Airport hotel.
Overview We have a diverse portfolio of iconic and market-leading hotels and resorts with significant underlying real estate value. We currently have interests in 43 hotels consisting of premium-branded hotels and resorts with over 26,000 rooms, of which over 86% are luxury and upper upscale and are located in prime U.S. markets and its territories.
Overview We have a diverse portfolio of iconic and market-leading hotels and resorts with significant underlying real estate value. We currently have interests in 40 hotels consisting of premium-branded hotels and resorts with approximately 25,000 rooms, of which over 87% are luxury and upper upscale and are located in prime U.S. markets and its territories.
With approximately $950 million available under our Revolver and $717 million in existing cash and cash equivalents, we have sufficient liquidity to pay our debt maturities and to fund other liquidity obligations over the next 12 months and beyond.
With $950 million available under our revolving credit facility ("Revolver") and $402 million in existing cash and cash equivalents, we have sufficient liquidity to pay our debt maturities and to fund other liquidity obligations over the next 12 months and beyond.
Therefore, as a general matter, after consideration of the allowable use of our net operating loss carryforward, we intend to make distributions of all, or substantially all, of our REIT taxable income (including net capital gains) to our stockholders, and, as a result, we will generally not be required to pay tax on our income.
Therefore, as a general matter, we intend to make distributions of all, or substantially all, of our REIT taxable income (including net capital gains) to our stockholders, and, as a result, we will generally not be required to pay tax on our REIT income.
Interest expense associated with our debt for the years ended December 31, 2023 and 2022 were as follows: Year Ended December 31, 2023 2022 Percent Change (in millions) HHV Mortgage Loan (1) $ 55 $ 55 — % Other mortgage loans 19 21 (9.5) % Revolver 4 3 33.3 % 2019 Term Facility (2) — 3 (100.0) % 2025 Senior Notes (3) 49 49 — % 2028 Senior Notes (3) 43 43 — % 2029 Senior Notes (3) 36 36 — % Other 1 7 (85.7) % Total interest expense $ 207 $ 217 (4.6) % ____________________________________________________________________________________ (1) In October 2016, we entered into a $1.275 billion CMBS loan secured by the Hilton Hawaiian Village Waikiki Beach Resort (“HHV Mortgage Loan”).
Interest expense associated with our debt for the years ended December 31, 2024 and 2023 were as follows: Year Ended December 31, 2024 2023 Percent Change (in millions) HHV Mortgage Loan (1) $ 55 $ 55 — % Other mortgage loans 17 19 (10.5) % Revolver 3 4 (25.0) % 2024 Term Loan 9 — 100.0 % 2025 Senior Notes (2) 19 49 (61.2) % 2028 Senior Notes (2) 43 43 — % 2029 Senior Notes (2) 36 36 — % 2030 Senior Notes 24 — 100.0 % Other 8 1 700.0 % Total interest expense $ 214 $ 207 3.4 % ____________________________________________________________________________________ (1) In October 2016, we entered into a $1.275 billion CMBS loan secured by the Hilton Hawaiian Village Waikiki Beach Resort (“HHV Mortgage Loan”).
Combined occupancy and ADR at our Boston hotels increased 4.4 percentage points and 7.1%, respectively for the year ended December 31, 2023 compared to the same period in 2022 driven by increases in both group and transient demand.
Combined occupancy and ADR at our Boston hotels increased 2.4 percentage points and 3.8%, respectively, for the year ended December 31, 2024 compared to the same period in 2023 also due to increases in group and transient demand.
Sources and Uses of Our Cash and Cash Equivalents The following tables summarize our net cash flows and key metrics related to our liquidity: Year Ended December 31, 2023 2022 Percent Change (in millions) Net cash provided by operating activities $ 503 $ 409 23.0 % Net cash (used in) provided by investing activities (217) 87 349.4 % Net cash used in financing activities (475) (320) 48.4 % Operating Activities Cash flow provided by operating activities are primarily generated from the operating income generated at our hotels.
Sources and Uses of Our Cash and Cash Equivalents The following tables summarize our net cash flows and key metrics related to our liquidity: Year Ended December 31, 2024 2023 Percent Change (in millions) Net cash provided by operating activities $ 429 $ 503 (14.7) % Net cash used in investing activities (166) (217) (23.5) % Net cash used in financing activities (573) (475) 20.6 % 47 Table of Contents Operating Activities Cash flow provided by operating activities are primarily generated from the operating income generated at our hotels.
Our contracts contain clauses that allow us to cancel all or some portion of the work. Additionally, we have established reserves for capital expenditures (“FF&E reserve”) in accordance with our management and certain debt agreements.
Our contracts contain clauses that allow us to cancel all or some portion of the work. Additionally, we have established reserves for capital expenditures (“FF&E reserve”) in accordance with our management and certain debt agreements. Generally, these agreements require that we fund 4% of hotel revenues into an FF&E reserve, unless such amounts have been incurred.
During the year ended December 31, 2023, we repurchased in aggregate under the Stock Repurchase Programs approximately 14.6 million shares of our common stock for a total purchase price of $180 million, and as of December 31, 2023, $150 million remained available for stock repurchases under the February 2023 Stock Repurchase Program.
During the year ended December 31, 2024, we repurchased approximately 8.0 million shares of our common stock under the 2023 Stock Repurchase Program for a total purchase price of $116 million, and as of December 31, 2024, prior to the termination of the February 2023 Stock Repurchase program, $34 million remained available for stock repurchases.
While there can be no assurances that we will not experience further fluctuations in hotel revenues or earnings at our hotels due to inflation and other macroeconomic factors, local economic factors and demand, a potential economic slowdown or a recession and geopolitical conflicts, we expect the positive momentum to continue for the remainder of 2024 based on current demand trends, expected increases in city-wide events and as demand from international travel continues to improve.
While there can be no assurances that we will not experience further fluctuations in hotel revenues or earnings at our hotels due to inflation and other macroeconomic factors, local economic factors and demand, a potential economic slowdown or a recession and geopolitical conflicts, we expect the positive momentum to continue for 2025 based on current demand trends, expected increases in city-wide events and as demand from international travel continues to improve. 36 Table of Contents Principal Components of and Factors Affecting Our Results of Operations Revenues Revenues from our hotels are primarily derived from two categories of customers: transient and group, which historically have accounted for approximately two thirds and one third, respectively, of our rooms revenue.
Our known short-term liquidity requirements primarily consist of funds necessary to pay for operating expenses and other expenditures, including reimbursements to our hotel manager for payroll and related benefits, costs associated with the operation of our hotels, interest and contractually due principal payments on our outstanding indebtedness, capital expenditures for in-progress renovations and maintenance at our hotels, corporate general and administrative expenses and dividends to our stockholders.
However, there can be no assurance as to the timing of any such issuance, which may be in the near term, or that any such additional financing will be completed on favorable terms, or at all. 46 Table of Contents Our known short-term liquidity requirements primarily consist of funds necessary to pay for operating expenses and other expenditures, including reimbursements to our hotel manager for payroll and related benefits, costs associated with the operation of our hotels, interest and contractually due principal payments on our outstanding indebtedness, capital expenditures for in-progress renovations and maintenance at our hotels, corporate general and administrative expenses and dividends to our stockholders.
Instead, we will need to meet these needs from external sources of capital and amounts, if any, by which our cash flow generated from operations exceeds taxable income.
Consequently, it is unlikely that we will be able to retain substantial cash balances that could be used to meet our liquidity needs from our annual taxable income. Instead, we will need to meet these needs from external sources of capital and amounts, if any, by which our cash flow generated from operations exceeds taxable income.
ADR measures average room price attained by a hotel and ADR trends provide useful information concerning the pricing environment and the nature of the customer base of a hotel or group of hotels.
Average Daily Rate ADR represents rooms revenue divided by total number of room nights sold in a given period. ADR measures average room price attained by a hotel and ADR trends provide useful information concerning the pricing environment and the nature of the customer base of a hotel or group of hotels.
Our current debt outstanding is approximately $3.8 billion, excluding the SF Mortgage Loan, at a weighted average interest rate of 5.2%, all of which is fixed-rate debt, refer to Item 7A: “Interest Rate Risk” and Note 7: "Debt" in our audited consolidated financial statements included elsewhere within this Annual Report on Form 10-K for additional information.
Our current debt outstanding is approximately $3.8 billion, excluding the SF Mortgage Loan, at a weighted average interest rate of 5.2%, of which 95% is fixed-rate debt, refer to Item 7A: “Interest Rate Risk” and Note 7: "Debt" in our audited consolidated financial statements included elsewhere within this Annual Report on Form 10-K for additional information. 45 Table of Contents Interest expense associated with hotels in receivership Interest expense on the SF Mortgage Loan increased $15 million as compared to 2023 due to accrued default interest not beginning until June 2023 when we ceased making payments on the loan.
Refer to Note 7: "Debt" in our audited consolidated financial statements included elsewhere within this Annual Report on Form 10-K for additional information.
Refer to Note 7: "Debt" in our audited consolidated financial statements included elsewhere within this Annual Report on Form 10-K for additional information. 48 Table of Contents Critical Accounting Estimates The preparation of our financial statements in accordance with U.S.
Additionally, beginning June 1, 2023, the loan accrues a monthly late payment administrative fee of 3% of the monthly amount due.
The stated rate on the loan is 4.11%, 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.
Changes in depreciation expense are due to renovations of existing hotels, acquisition or development of new hotels, the disposition of existing hotels through sale or closure or 37 Table of Contents changes in estimates of the useful lives of our assets. As we place new assets into service, we will be required to recognize additional depreciation expense on those assets.
Changes in depreciation expense are due to renovations of existing hotels, acquisition or development of new hotels, the disposition of existing hotels through sale or closure or changes in estimates of the useful lives of our assets.
(2) For the year ended December 31, 2023, represents the gain from derecognizing the Hilton San Francisco Hotels from our consolidated balance sheet in October 2023, when the receiver took control of the hotels. (3) Included in other gain (loss), net.
For the year ended December 31, 2023, represents accrued interest expense associated with the default of the SF Mortgage Loan and the gain from derecognizing the Hilton San Francisco Hotels from our consolidated balance sheet in October 2023, when the receiver took control of the hotels.
Additionally, in May 2021, our Operating Company, PK Domestic and PK Finance issued an aggregate of $750 million senior notes due 2029 ("2029 Senior Notes," collectively with the 2025 Senior Notes and 2028 Senior Notes, the "Senior Notes").
Our Operating Company, PK Domestic and PK Finance also issued an aggregate of $725 million of senior notes due 2028 (“2028 Senior Notes”) in September 2020, an aggregate of $750 million of senior notes due 2029 ("2029 Senior Notes") in May 2021 and an aggregate of $550 million of 2030 Senior Notes in May 2024.
Each of these non-GAAP financial measures should be considered by investors as supplemental measures to GAAP performance measures such as total revenues, operating profit and net income (loss).
Non-GAAP Financial Measures We also evaluate the performance of our business through certain other financial measures that are not recognized under U.S. GAAP. Each of these non-GAAP financial measures should be considered by investors as supplemental measures to GAAP performance measures such as total revenues, operating profit and net income.
The following table provides a reconciliation of Net income attributable to stockholders to Nareit FFO attributable to stockholders and Adjusted FFO attributable to stockholders: Year Ended December 31, 2023 2022 (in millions, except per share amounts) Net income attributable to stockholders $ 97 $ 162 Depreciation and amortization expense 287 269 Depreciation and amortization expense attributable to noncontrolling interests (4) (4) Gain on sales of assets, net (15) (13) Gain on derecognition of assets (1) (221) — Gain on sale of investments in affiliates (2) (3) (92) Impairment loss 202 — Equity investment adjustments: Equity in earnings from investments in affiliates (11) (15) Pro rata FFO of investments in affiliates 14 12 Nareit FFO attributable to stockholders 346 319 Casualty loss 2 6 Share-based compensation expense 18 17 Interest expense associated with hotels in receivership (3) 20 — Other items (4) 53 10 Adjusted FFO attributable to stockholders $ 439 $ 352 Nareit FFO per share – Diluted (5) $ 1.61 $ 1.40 Adjusted FFO per share – Diluted (5) $ 2.04 $ 1.54 ____________________________________________________________________________________ (1) For the year ended December 31, 2023, represents the gain from derecognizing the Hilton San Francisco Hotels from our consolidated balance sheet in October 2023, when the receiver took control of the hotels.
The following table provides a reconciliation of Net income attributable to stockholders to Nareit FFO attributable to stockholders and Adjusted FFO attributable to stockholders: Year Ended December 31, 2024 2023 (in millions, except per share amounts) Net income attributable to stockholders $ 212 $ 97 Depreciation and amortization expense 257 287 Depreciation and amortization expense attributable to noncontrolling interests (4) (4) Gain on sales of assets, net (8) (15) Gain on sale of assets, net, attributable to noncontrolling interests 5 — Gain on derecognition of assets (1) (60) (221) Gain on sale of investments in affiliates (2) (19) (3) Impairment loss 12 202 Equity investment adjustments: Equity in earnings from investments in affiliates (3) (12) (11) Pro rata FFO of investments in affiliates 16 14 Nareit FFO attributable to stockholders 399 346 Casualty loss 2 2 Share-based compensation expense 19 18 Interest expense associated with hotels in receivership (1) 60 20 Release of deferred tax valuation allowance (54) — Other items (4) 4 53 Adjusted FFO attributable to stockholders $ 430 $ 439 Nareit FFO per share – Diluted (5) $ 1.91 $ 1.61 Adjusted FFO per share – Diluted (5) $ 2.06 $ 2.04 ____________________________________________________________________________________ (1) For the year ended December 31, 2024, represents accrued interest expense associated with the default of the SF Mortgage Loan, which is offset by a gain on derecognition for the corresponding increase of the contract asse t on our consolidated balance sheets, as we expect to be released from this obligation upon final resolution with the lender.
A majority of our food and beverage sales and other ancillary services are provided to customers who also are occupying rooms at our hotels. As a result, occupancy affects all components of revenues from our hotels. Principal Components Rooms . Represents the sale of room rentals at our hotels and accounts for a substantial majority of our total revenue.
Group business usually includes a block of room accommodations, as well as other ancillary services, such as meeting facilities, catering and banquet services. A majority of our food and beverage sales and other ancillary services are provided to customers who also are occupying rooms at our hotels. As a result, occupancy affects all components of revenues from our hotels.
Hotel Revenues and Operating Expenses Year Ended December 31, Change from Non-Comparable Hotels 2023 2022 Change Change from Comparable Hotels (1) Change from the San Francisco Hotels Change from Other Non-Comparable Hotels (in millions) Rooms revenue $ 1,653 $ 1,559 $ 94 $ 122 $ 14 $ (42) Food and beverage revenue 696 606 90 98 2 (10) Ancillary hotel revenue 264 261 3 6 (1) (2) Rooms expense 449 408 41 48 2 (9) Food and beverage expense 501 449 52 58 — (6) Other departmental and support expense 635 613 22 40 (1) (17) Other property expense 241 223 18 21 1 (4) Management fees expense 126 115 11 11 1 (1) ____________________________________________________________________________________ (1) Change from our comparable hotels primarily relates to the market-specific conditions discussed below.
Hotel Revenues and Operating Expenses Year Ended December 31, Change from Non-Comparable Hotels 2024 2023 Change Change from Comparable Hotels (1) Change from the Hilton San Francisco Hotels Change from Other Non-Comparable Hotels (in millions) Rooms revenue $ 1,569 $ 1,653 $ (84) $ 47 $ (119) $ (12) Food and beverage revenue 688 696 (8) 27 (31) (4) Ancillary hotel revenue 256 264 (8) 2 (10) — Rooms expense 419 449 (30) 21 (47) (4) Food and beverage expense 474 501 (27) 12 (36) (3) Other departmental and support expense 605 635 (30) 25 (49) (6) Other property expense 231 241 (10) 9 (22) 3 Management fees expense 125 126 (1) 7 (6) (2) ____________________________________________________________________________________ (1) Change from our comparable hotels primarily relates to the market-specific conditions discussed below.
However, we have relied on the performance of our hotels and active asset management to mitigate the effects of inflation, which is expected to continue to stabilize, and current macroeconomic uncertainty. During 2023, we continued to experience improvements in overall demand across our portfolio, although ADR growth has slowed as the industry recovery has stabilized and seasonal patterns have normalized.
Additionally, we continued to experience improvements in overall demand across our portfolio, although ADR growth has slowed as the industry recovery has stabilized and seasonal patterns have normalized.
Food and beverage . Represents revenue from group functions, which may include both banquet revenue and audio and visual revenue, as well as revenue from outlets such as restaurants and lounges at our hotels. Ancillary hotel. Represents revenue for guest services provided at our hotels, including parking, telecommunications, golf course and spa. Also includes tenant leases and other rental revenue.
Represents revenue for guest services provided at our hotels, including parking, telecommunications, golf course and spa. Also includes tenant leases and other rental revenue. Other.
Group guests are traveling for group events that reserve rooms for meetings, conferences or social functions sponsored by associations, corporate, social, military, educational, religious or other organizations. Group business usually includes a block of room accommodations, as well as other ancillary services, such as meeting facilities, catering and banquet services.
Transient guests are individual travelers who are traveling for business or leisure. Group guests are traveling for group events that reserve rooms for meetings, conferences or social functions sponsored by associations, corporate, social, military, educational, religious or other organizations.
Our comparable hotels data includes results from hotels that were active and operating in our portfolio since January 1st of the previous year and excludes results from property dispositions that have occurred through December 31, 2023. Non-GAAP Financial Measures We also evaluate the performance of our business through certain other financial measures that are not recognized under U.S. GAAP.
Our comparable hotels data includes results from hotels that were active and operating in our portfolio since January 1st of the previous year and excludes results from property dispositions that have occurred through December 31, 2024 and the Hilton San Francisco Hotels, which were placed into receivership at the end of October 2023.
Debt As of December 31, 2023, our total indebtedness was approximately $3.8 billion, including approximately $2.1 billion of our Senior Notes, and excluding both the $725 million SF Mortgage Loan on which we ceased making debt service payments in June 2023 and approximately $164 million of our share of debt from investments in affiliates.
We declared the following dividends to holders of our common stock during 2024: Record Date Payment Date Dividend per Share March 29, 2024 April 15, 2024 $ 0.25 June 28, 2024 July 15, 2024 $ 0.25 September 30, 2024 October 15, 2024 $ 0.25 December 31, 2024 January 15, 2025 $ 0.65 Debt As of December 31, 2024, our total indebtedness was approximately $3.8 billion, including over $2 billion of our Senior Notes and excluding the $725 million SF Mortgage Loan (that we ceased making debt service payments in June 2023) and our share of debt from investments in affiliates.
Substantially all the debt of such unconsolidated affiliates is secured solely by the affiliates’ assets or is guaranteed by other partners without recourse to us. Refer to Note 7: "Debt" in our audited consolidated financial statements included elsewhere within this Annual Report on Form 10-K for additional information.
Substantially all the debt of such unconsolidated affiliates is secured solely by the affiliates’ assets or is guaranteed by other partners without recourse to us.
Corporate general and administrative Year Ended December 31, 2023 2022 Percent Change (in millions) General and administrative expenses $ 45 $ 43 4.7 % Share-based compensation expense 18 17 5.9 % Other items 2 3 (33.3) % Total corporate general and administrative $ 65 $ 63 3.2 % Impairment and casualty loss During the year ended December 31, 2023, we recognized an impairment loss of approximately $202 million.
Corporate general and administrative Year Ended December 31, 2024 2023 Percent Change (in millions) General and administrative expenses $ 46 $ 45 2.2 % Share-based compensation expense 19 18 5.6 % Other corporate expenses 4 2 100.0 % Total corporate general and administrative $ 69 $ 65 6.2 % Impairment and casualty loss 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 3: "Acquisitions and Dispositions" in our audited consolidated financial statements included elsewhere within this Annual Report on Form 10-K for additional information. 44 Table of Contents Income tax expense During the year ended December 31, 2023, we recognized income tax expense of $38 million, primarily related to the effective exit from the Hilton San Francisco Hotels in October 2023, which resulted in incremental income tax expense of $28 million.
Refer to Note 8: "Fair Value Measurements" in our audited consolidated financial statements included elsewhere within this Annual Report on Form 10-K for additional information. During the year ended December 31, 2023, we recognized an impairment loss of approximately $202 million.
(2) In December 2022, we fully repaid our 2019 Term Facility. (3) In May and September 2020, Park Intermediate Holdings LLC (our “Operating Company”), PK Domestic Property LLC, an indirect subsidiary of the Company (“PK Domestic”), and PK Finance Co-Issuer Inc.
(2) In May 2020, Park Intermediate Holdings LLC (our “Operating Company”), PK Domestic Property LLC, an indirect subsidiary of the Company (“PK Domestic”), and PK Finance Co-Issuer Inc. (“PK Finance”) issued an aggregate of $650 million of 2025 Senior Notes, all of which were repurchased or redeemed during the second quarter of 2024.
Key Business Metrics Used by Management Occupancy Occupancy represents the total number of room nights sold divided by the total number of room nights available at a hotel or group of hotels. Occupancy measures the utilization of our hotels’ available capacity. We use occupancy to gauge demand at a specific hotel or group of hotels in a given period.
Occupancy measures the utilization of our hotels’ available capacity. We use occupancy to gauge demand at a specific hotel or group of hotels in a given period. Occupancy levels also help us determine achievable ADR levels as demand for rooms increases or decreases.
Further, we have an investment policy that is focused on the preservation of capital and maximizing the return on new and existing investments.
Our cash management objectives continue to be to maintain the availability of liquidity, minimize operational costs, make debt payments and fund our capital expenditure programs and future acquisitions. Further, we have an investment policy that is focused on the preservation of capital and maximizing the return on new and existing investments.
The discount rate takes into account our weighted average cost of capital according to our capital structure and other market specific considerations. Changes in estimates and assumptions used in our impairment testing of property and equipment and intangible assets with finite lives could result in future impairment losses, which could be material.
The discount rate takes into account our weighted average cost of capital according to our capital structure and other market specific considerations.
(4) For the year ended December 31, 2023, includes $28 million of income tax expense associated with the effective exit from the Hilton San Francisco Hotels.
(4) For the year ended December 31, 2023, includes $28 million of income tax expense primarily associated with the effective exit from the Hilton San Francisco Hotels, of which $19 million was reversed during the year ended December 31, 2024 as it is no longer expected to be incurred. (5) Per share amounts are calculated based on unrounded numbers.
Combined occupancy at our Chicago hotels increased 6.5 percentage points for the year ended December 31, 2023 compared to the same period in 2022 due to increases in transient and group demand, which also drove a 25% increase in food and beverage revenue at the Hilton Chicago.
Our Orlando hotels both benefited from the comprehensive renovation and expansion projects completed in early 2024, which drove a 25% increase in food and beverage revenue for the year ended December 31, 2024 compared to the same period in 2023 and resulted in increases in occupancy and ADR of 3.0 percentage points and 6.1%, respectively, at the Signia by Hilton Orlando Bonnet Creek and increases in occupancy and ADR of 11.5 percentage points and 5.6%, respectively, at the Waldorf Astoria Orlando for the year ended December 31, 2024 compared to the same period in 2023.
The $94 million increase in net cash provided by operating activities for the year ended December 31, 2023 compared to the year ended December 31, 2022 was primarily due to an increase in cash from operations as a result of an increase in occupancy at our hotels, a decrease in cash paid for interest of $30 million, primarily due to the cessation of debt service payments toward the SF Mortgage Loan, and an increase in interest income of $25 million due to an increase in interest rates.
The $74 million decrease in net cash provided by operating activities for the year ended December 31, 2024 compared to the year ended December 31, 2023 was primarily due to an increase in cash paid for taxes of $8 million, a decrease in interest received of $17 million due to a decrease in average cash balances and timing of receipts from our customers and payments to our vendors and other third parties.
Outlook Economic disruptions, including as a result of supply chain disruptions, elevated interest rates and elevated rates of inflation, may adversely affect our business. Inflationary concerns can affect both consumer sentiment and demand for travel, as well as increase labor or other costs to maintain or operate hotels that cannot be reduced without adversely affecting business growth or hotel value.
Outlook Economic disruptions, including as a result of elevated interest and inflation rates, may adversely affect our business by affecting consumer sentiment and demand for travel. However, inflationary concerns have moderated and further interest rate reductions may continue.
The results of operations of these hotels are included in our consolidated results only during our period of ownership. Changes in our operating revenues and expenses from these non-comparable hotels are shown below.
Results of Operations Our non-comparable hotels consist of two hotels sold and two hotels returned to the lessor upon termination of the ground leases since January 1, 2023. The results of operations of these hotels are included in our consolidated results only during our period of ownership.
Combined occupancy and ADR at our Washington D.C. hotels increased 8.4 percentage points and 12.2%, respectively, for the year ended December 31, 2023 compared to the same period in 2022 driven by increases in both group and transient demand.
Occupancy and ADR at the New York Hilton Midtown increased 1.8 percentage points and 1.6%, respectively, while occupancy and ADR at the Hilton Chicago increased 6.2 percentage points and 1.5%, respectively, for the year ended December 31, 2024 compared to the same period in 2023.
(2) Included in other gain (loss), net . (3) Reflects incremental default interest expense and late payment administrative fees associated with the default of the SF Mortgage Loan beginning in June 2023 and all interest expense that has accrued since the Hilton San Francisco Hotels were placed into receivership at the end of October 2023.
For the year ended December 31, 2023, reflects incremental default interest expense and late payment administrative fees associated with the default of the SF Mortgage Loan beginning in June 2023 and the gain from derecognizing the Hilton San Francisco Hotels from our consolidated balance sheet in October 2023, when the receiver took control of the hotels.
Group, transient, contract and other rooms revenue for the year ended December 31, 2023, as well as the change for each segment compared to 2022 are as follows: Year Ended December 31, Change from Non-Comparable Hotels 2023 2022 Change Change from Comparable Hotels (1) Change from the San Francisco Hotels Change from Non-Comparable Hotels (in millions) Group rooms revenue $ 480 $ 403 $ 77 $ 67 $ 15 $ (5) Transient rooms revenue 1,043 1,052 (9) 31 (7) (33) Contract rooms revenue 92 71 21 19 5 (3) Other rooms revenue 38 33 5 5 1 (1) Rooms revenue $ 1,653 $ 1,559 $ 94 $ 122 $ 14 $ (42) ____________________________________________________________________________________ (1) Change from our comparable hotels primarily relates to the market-specific conditions discussed below.
Group, transient, contract and other rooms revenue for the year ended December 31, 2024, as well as the change for each type of rooms revenue compared to 2023 are as follows: Year Ended December 31, Change from Non-Comparable Hotels 2024 2023 Change Change from Comparable Hotels (1) Change from the Hilton San Francisco Hotels Change from Non-Comparable Hotels (in millions) Group rooms revenue $ 461 $ 480 $ (19) $ 34 $ (52) $ (1) Transient rooms revenue 986 1,043 (57) 1 (48) (10) Contract rooms revenue 90 92 (2) 12 (14) — Other rooms revenue 32 38 (6) — (5) (1) Rooms revenue $ 1,569 $ 1,653 $ (84) $ 47 $ (119) $ (12) ____________________________________________________________________________________ (1) Change from our comparable hotels primarily relates to the market-specific conditions discussed below. 43 Table of Contents Market-Specific Conditions The increases in hotel revenues and operating expenses for our comparable hotels during the year ended December 31, 2024, as compared to the same period in 2023, were primarily attributable to our hotels in the Orlando, Key West, New York, Chicago and Boston markets.
We fully repaid the $75 million mortgage loan secured by the W Chicago - City Center in June 2023 and the $50 million of borrowings under our Revolver in February 2023. Excluding the SF Mortgage Loan for which we ceased to make debt service payments in June 2023 and is in default, we have no significant maturities until June 2025.
Excluding the SF Mortgage Loan for which we ceased to make debt service payments in June 2023 and is in default, and following the issuance of the 2030 Senior Notes and borrowings under the 2024 Term Loan, the proceeds from which collectively were used to repurchase or redeem all of the 2025 Senior Notes and for other general corporate purposes, we have no significant maturities until the fourth quarter of 2026.
The $87 million in net cash provided by investing activities for the year ended December 31, 2022 was primarily attributable to $244 million of net proceeds from the sale of five of our consolidated hotels and our ownership interests in the joint ventures that own and operate one hotel in addition to $11 million in distributions from the joint venture that sold one of our unconsolidated hotels, partially offset by $168 million in capital expenditures.
Investing Activities The $166 million in net cash used in investing activities for the year ended December 31, 2024 was primarily attributable to $227 million of capital expenditures, partially offset by $30 million of net distributions from unconsolidated affiliates primarily related to the sale of the Hilton La Jolla Torrey Pines and $31 million of net proceeds from the sale of the DoubleTree Hotel Spokane City Center.
During 2023, we declared dividends of $2.15 per share, including dividends of $1.70 per share during the fourth quarter of 2023, which was paid on January 16, 2024, consisting of a special cash dividend of $0.77 per share from the effective exit from the Hilton San Francisco Hotels and our fourth quarterly dividend of $0.93 based on 2023 operating results.
During 2024, we declared dividends of $1.40 per share, including our fourth quarter dividend of $0.65 that was paid on January 15, 2025 to stockholders of record as of December 31, 2024 based on 2024 operating results.
The $320 million in net cash used in financing activities for the year ended December 31, 2022 was primarily attributable to the repurchase of approximately 12.7 million shares of our common stock for $227 million and $142 million 46 Table of Contents of debt repayments, partially offset by $50 million of borrowings under our Revolver and $30 million of proceeds from refinanced mortgage debt for one of our consolidated joint ventures.
Financing Activities The $573 million in net cash used in financing activities for the year ended December 31, 2024 was primarily attributable to $672 million of debt repayments, $512 million of dividends paid and the repurchase of approximately 8.0 million shares of our common stock for $116 million, offset by the issuance of $550 million of 2030 Senior Notes and the $200 million 2024 Term Loan.
Some of these limitations are: • EBITDA, Adjusted EBITDA and Hotel Adjusted EBITDA do not reflect changes in, or cash requirements for, our working capital needs; • EBITDA, Adjusted EBITDA and Hotel Adjusted EBITDA do not reflect the cash requirements necessary to service interest or principal payments, on our indebtedness; • EBITDA, Adjusted EBITDA and Hotel Adjusted EBITDA do not reflect the cash requirements to pay our taxes; • EBITDA, Adjusted EBITDA and Hotel Adjusted EBITDA do not reflect historical cash expenditures or future requirements for capital expenditures or contractual commitments; and • although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and EBITDA, Adjusted EBITDA and Hotel Adjusted EBITDA do not reflect any cash requirements for such replacements. 39 Table of Contents Because of these limitations, EBITDA, Adjusted EBITDA and Hotel Adjusted EBITDA should not be considered as discretionary cash available to us to reinvest in the growth of our business or as measures of cash that will be available to us to meet our obligations.
Because of these limitations, EBITDA, Adjusted EBITDA and Hotel Adjusted EBITDA should not be considered as discretionary cash available to us to reinvest in the growth of our business or as measures of cash that will be available to us to meet our obligations.
(5) Per share amounts are calculated based on unrounded numbers. 41 Table of Contents Results of Operations Property dispositions have had a significant effect on the year-over-year comparability of our operations as further illustrated in the table of Hotel Revenues and Operating Expenses below.
Additionally, our non-comparable hotels also consist of the two Hilton San Francisco Hotels, which are excluded from our consolidated results beginning in October 2023 as a result of the hotels being placed into receivership and had a significant effect on the year-over-year comparability of our operations as further illustrated in the table of Hotel Revenues and Operating Expenses below.
Gain (loss) on sales of assets, net During the years ended December 31, 2023 and 2022, we recognized a net gain of $15 million and $13 million, respectively, primarily as a result of the sales of our consolidated hotels.
Gain on sale of assets, net During the years ended December 31, 2024 and 2023, we recognized a net gain of $8 million and $15 million, respectively, primarily from the sales of our consolidated hotels. 44 Table of Contents Gain on derecognition of assets During the year ended December 31, 2024, we recognized a gain of $60 million from the accrued interest expense associated with the default of the SF Mortgage Loan, which resulted in a corresponding increase of the contract asset in our consolidated balance sheets, as we expect to be released from this obligation upon final resolution with the lender.
Removed
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.
Added
In addition, during the fourth quarter of 2024, the hotel operators for four of our hotels negotiated long-term labor agreements with labor organizations representing their hotel employees following strikes and other labor activity that affected our operating results beginning in late September 2024.
Removed
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.
Added
Any future labor disruptions may result in increases in labor or other costs to maintain or operate hotels. During 2024, we have relied on the performance of our hotels and active asset management to mitigate the effects of current macroeconomic uncertainty and recent labor disruptions.
Removed
The 35 Table of Contents 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.
Added
Principal Components Rooms . Represents the sale of room rentals at our hotels and accounts for a substantial majority of our total revenue. Food and beverage . Represents revenue from group functions, which may include both banquet revenue and audio and visual revenue, as well as revenue from outlets such as restaurants and lounges at our hotels. Ancillary hotel.
Removed
The effective exit from the Hilton San Francisco Hotels resulted in a required distribution. Thus, our Board of Directors (the "Board") declared a special cash dividend of $0.77 per share on October 27, 2023, which was paid on January 16, 2024 to stockholders of record as of December 29, 2023.
Added
As we place new assets into service, we will be required to recognize additional depreciation expense on those assets. 38 Table of Contents Key Business Metrics Used by Management Occupancy Occupancy represents the total number of room nights sold divided by the total number of room nights available at a hotel or group of hotels.
Removed
Principal Components of and Factors Affecting Our Results of Operations Revenues Revenues from our hotels are primarily derived from two categories of customers: transient and group, which historically have accounted for approximately two thirds and one third, respectively, of our rooms revenue. Transient guests are individual travelers who are traveling for business or leisure.
Added
(2) For the year ended December 31, 2024, includes a gain of $19 million on the sale of the Hilton La Jolla Torrey Pines included in equity in earnings from investments in affiliates . For the year ended December 31, 2023, the $3 million gain on sale of investments in affiliates is included in other (loss) gain, net.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

2 edited+1 added−2 removed1 unchanged
Biggest changeThe following table sets forth the contractual maturities and the total fair values as of December 31, 2023 for our financial instruments: Maturities by Period 2024 (1) 2025 2026 2027 2028 Thereafter Carrying Value Fair Value (in millions, excluding average interest rate) Liabilities: Fixed-rate debt $ 61 $ 657 $ 1,563 $ 30 $ 725 $ 750 $ 3,786 $ 3,626 Average interest rate 4.83 % 7.47 % 4.20 % 5.37 % 5.88 % 4.88 % 5.24 % ___________________________________________________________________________________ (1) Excludes the SF Mortgage Loan.
Biggest changeThe following table sets forth the contractual maturities and the total fair values as of December 31, 2024 for our financial instruments that are materially affected by interest rate risk: Maturities by Period 2025 (1) 2026 2027 2028 2029 Thereafter Carrying Value Fair Value (in millions, excluding average interest rate) Liabilities: Fixed-rate debt $ 60 $ 1,550 $ 30 $ 725 $ 750 $ 550 $ 3,665 $ 3,538 Average interest rate 4.82 % 4.20 % 5.37 % 5.88 % 4.88 % 7.00 % 5.11 % Variable-rate debt $ — $ — $ 200 $ — $ — $ — $ 200 $ 199 Average interest rate — % — % 6.21 % — % — % — % 6.21 % ___________________________________________________________________________________ (1) Excludes the SF Mortgage Loan. 50 Table of Contents Refer to Note 7: "Debt" in our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K for additional information. 51 Table of Contents
In certain situations, we may seek to reduce cash flow volatility associated with changes in interest rates by entering into financial arrangements intended to provide a hedge against a portion of the risks associated with such volatility. 48 Table of Contents Interest Rate Risk As of December 31, 2023, there was no variable rate debt outstanding as we have no outstanding borrowings under our Revolver, which is our only variable-rate debt.
In certain situations, we may seek to reduce cash flow volatility associated with changes in interest rates by entering into financial arrangements intended to provide a hedge against a portion of the risks associated with such volatility. Interest Rate Risk We are exposed to interest rate risk on our variable-rate debt.
Removed
Borrowings under our Revolver bear interest based on the secured overnight financing rate ("SOFR"). Our future interest rate risk may be affected by any future borrowings under our Revolver prior to the December 1, 2026 maturity date.
Added
The interest rate on our variable-rate debt discussed below is based on the secured overnight financing rate ("SOFR"), and our risk related to future interest rates is most vulnerable to changes in this rate.
Removed
Refer to Note 7: "Debt" in our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K for additional information. 49 Table of Contents

Other PK 10-K year-over-year comparisons