(unaudited, in millions, except per share data)

Three Months Ended June 30,

Six Months Ended June 30,

2023

2022

2023

2022

Revenues

Rooms

$
442

$
433

$
824

$
725

Food and beverage

178

173

359

283

Ancillary hotel

72

70

137

131

Other

22

19

42

35

Total revenues

714

695

1,362

1,174

Operating expenses

Rooms

117

98

224

183

Food and beverage

128

119

255

206

Other departmental and support

165

158

323

291

Other property-level

63

65

123

115

Management fees

34

32

64

54

Impairment and casualty loss

203

1

204

1

Depreciation and amortization

64

68

128

137

Corporate general and administrative

16

16

32

32

Other

22

18

42

34

Total expenses

812

575

1,395

1,053

(Loss) gain on sales of assets, net

—

(1
)

15

(1
)

Operating (loss) income

(98
)

119

(18
)

120

Interest income

10

1

20

1

Interest expense

(61
)

(62
)

(121
)

(124
)
Equity in earnings from investments in affiliates

3

5

7

5

Other gain, net

3

92

4

97

(Loss) income before income taxes

(143
)

155

(108
)

99

Income tax expense

(3
)

(1
)

(5
)

(1
)
Net (loss) income

(146
)

154

(113
)

98

Net income attributable to noncontrolling interests

(4
)

(4
)

(4
)

(5
)
Net (loss) income attributable to stockholders

$
(150
)

$
150

$
(117
)

$
93

(Loss) earnings per share:

(Loss) earnings per share – Basic

$
(0.70
)

$
0.66

$
(0.54
)

$
0.40

(Loss) earnings per share – Diluted

$
(0.70
)

$
0.66

$
(0.54
)

$
0.40

Weighted average shares outstanding – Basic

215

228

217

232

Weighted average shares outstanding – Diluted

215

228

218

232

(1)Fair value as of ~~June~~September 30, 2023 was measured using significant unobservable inputs (Level 3). We estimated fair value of the asset using a discounted cash flow analysis, with an estimated stabilized growth rate of 3%3%, a discounted cash flow term of 10 years, terminal capitalization rate of ~~6.3~~%6.3%, and discount rate of ~~9.5~~%9.5%. The discount and terminal capitalization rates used for the fair values of the asset reflected the risk profile of the market where the property is located.

Note 11: Business Segment Information

As of ~~June~~September 30, 2023, we have two operating segments, our consolidated hotels and unconsolidated hotels. Our unconsolidated hotels operating segment does not meet the definition of a reportable segment, thus our consolidated hotels is our only reportable segment. We evaluate our consolidated hotels primarily based on hotel adjusted earnings before interest expense, taxes and depreciation and amortization (“EBITDA”). Hotel Adjusted EBITDA, presented herein, is calculated as EBITDA from hotel operations, adjusted to exclude the following items that are not reflective of our ongoing operating performance or incurred in the normal course of business, and thus excluded from management's analysis in making day to day operating decisions and evaluations of our operating performance against other companies within our industry:

•

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.

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


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022

	(in millions)
Revenues:
Total consolidated hotel revenues	$	657	$	643	$	1,977	$	1,782
Other revenues	22		19		64		54
Total revenues	$	679	$	662	$	2,041	$	1,836

Net income (loss)	$	31	$	40	$	(82)	$	138
Other revenues	(22)		(19)		(64)		(54)
Depreciation and amortization expense	65		67		193		204
Corporate general and administrative expense	18		16		50		48
Casualty and impairment loss	—		3		204		4
Other operating expenses	19		18		61		52
Gain on sales of assets, net	—		(14)		(15)		(13)
Interest income	(9)		(4)		(29)		(5)
Interest expense	65		61		186		185
Equity in earnings from investments in affiliates	(2)		(1)		(9)		(6)
Income tax (benefit) expense	—		(3)		5		(2)
Other gain, net	—		(1)		(4)		(98)
Other items	8		4		21		11
Hotel Adjusted EBITDA	$	173	$	167	$	517	$	464

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Three Months Ended June 30,

Six Months Ended June 30,

2023

2022

2023

2022

(in millions)

Revenues:

Total consolidated hotel revenues

$
692

$
676

$
1,320

$
1,139

Other revenues

22

19

42

35

Total revenues

$
714

$
695

$
1,362

$
1,174

Net (loss) income

$
(146
)

$
154

$
(113
)

$
98

Other revenues

(22
)

(19
)

(42
)

(35
)
Depreciation and amortization expense

64

68

128

137

Corporate general and administrative expense

16

16

32

32

Impairment and casualty loss

203

1

204

1

Other operating expenses

22

18

42

34

Loss (gain) on sales of assets, net

—

1

(15
)

1

Interest income

(10
)

(1
)

(20
)

(1
)
Interest expense

61

62

121

124

Equity in earnings from investments in affiliates

(3
)

(5
)

(7
)

(5
)
Income tax expense

3

1

5

1

Other gain, net

(3
)

(92
)

(4
)

(97
)
Other items

7

4

13

7

Hotel Adjusted EBITDA

$
192

$
208

$
344

$
297

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

June 30, 2023

December 31, 2022

(in millions)

Consolidated hotels

$
9,337

$
9,726

All other

7

5

Total assets

$
9,344

$
9,731


	September 30, 2023		December 31, 2022

	(in millions)
Consolidated hotels	$	9,298	$	9,726
All other	7		5
Total assets	$	9,305	$	9,731

Note 12: Commitments and Contingencies

As of ~~June~~September 30, 2023, we had outstanding commitments under third-party contracts of approximately $~~163~~$135 millionfor capital expenditures at our properties, of which $37$30 million relates to projects at the Bonnet Creek complex, including the meeting space expansion project and renovation of guestrooms, existing meeting space, lobbies, golf course and other recreational amenities, $43$28 million relates to the complete renovation of all guestrooms, public spaces, and certain hotel infrastructure at the Casa Marina Key West, Curio Collection, and $27$25 million relates to the Tapa Tower guestroom renovations at the Hilton Hawaiian Village Waikiki Beach Resort. Our contracts contain clauses that allow us to cancel all or some portion of the work. If cancellation of a contract occurred, our commitment would be any costs incurred up to the cancellation date, in addition to any costs associated with the discharge of the contract.

We are involved in litigation arising from the normal course of business, some of which includes claims for substantial sums, and may make certain indemnifications or guarantees to select buyers of our hotels as part of a sale process. We are also involved in claims and litigation that is not in the ordinary course of business in connection with the spin-off from Hilton. The spin-off agreements provide that Hilton will indemnify us from certain of these claims as well as require us to indemnify Hilton for other claims. In addition, losses related to certain contingent liabilities could be apportioned to us under the spin-off agreements. In connection with our obligation to indemnify Hilton under the spin-off agreements, we have reserved approximately$8 $8 million as of ~~June~~September 30, 2023 related to litigation with respect to an audit by the Australian Tax Office (“ATO”) of Hilton related to the sale of the Hilton Sydney in June 2015. This amount could change as the litigation of the ATO’s claim progresses.

Note 13: Subsequent Events

In October 2023, the trustee for the SF Mortgage Loan filed a lawsuit against the borrowers under the SF Mortgage Loan. In connection with the lawsuit, the court appointed a receiver to take control of the Hilton San Francisco Hotels, which serve as security for the SF Mortgage Loan, and their operations, and thus, we have no further economic interest in the operations of the hotels. The receiver will operate and has authority over the hotels and, until no later than November 1, 2024, has the ability to sell the hotels. The lawsuit contemplates the receivership will end with a non-judicial foreclosure by December 2, 2024, if the hotels are not sold within the predetermined sale period.

The effective exit from the Hilton San Francisco Hotels results in a required distribution. Thus, our Board of Directors declared a special cash dividend of $0.77 per share on October 27, 2023, which will be paid on January 16, 2024 to stockholders of record as of December 29, 2023.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis of the financial condition and results of operations of Park Hotels & Resorts Inc. (“we,” “us,” “our” or the “Company”) should be read in conjunction with the accompanying unaudited condensed consolidated financial statements, related notes included elsewhere in this Quarterly Report on Form 10-Q, and with our Annual Report on Form 10-K for the year ended December 31, 2022.

Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (“Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (“Exchange Act”). Forward-looking statements include, but are not limited to, statements related to the anticipated effects of the Company's decision to cease payments on its $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 ~~("SF Mortgage Loan"~~(collectively, the "Hilton San Francisco Hotels"), and the effects of the lender's exercise of its remedies, including placing such hotels into receivership, as well as our current expectations regarding the performance of our business, our financial results, our liquidity and capital resources, including anticipated repayment of certain of the Company's indebtedness, the completion of capital allocation priorities, the expected repurchase of the Company's stock, ~~the impact to our business and financial condition and that of our hotel management companies,~~ the impact from macroeconomic factors (including inflation, increases in interest rates, potential economic slowdown or a recession and geopolitical conflicts), the effects of competition, the effects of future legislation or regulations, the expected completion of anticipated dispositions, the declaration and payment of future dividends and other non-historical statements. Forward-looking statements include all statements that are not historical facts, and in some cases, can be identified by the use of forward-looking terminology such as the words “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “could,” “seeks,” “projects,” “predicts,” “intends,” “plans,” “estimates,” “anticipates”, “hopes” or the negative version of these words or other comparable words. You should not rely on forward-looking statements since they involve known and unknown risks, uncertainties and other factors which are, in some cases, beyond our control and which could materially affect our results of operations, financial condition, cash flows, performance or future achievements or events.

All such forward-looking statements are based on current expectations of management and therefore involve estimates and assumptions that are subject to risks, uncertainties and other factors that could cause actual results to differ materially from the results expressed in these forward-looking statements. You should not put undue reliance on any forward-looking statements and we urge investors to carefully review the disclosures we make concerning risks and uncertainties in Item 1A: “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2022, as such factors may be updated from time to time in our periodic filings with the SEC, which are accessible on the SEC’s website at www.sec.gov, as well as risks, uncertainties and other factors discussed in this Quarterly Report on Form 10-Q. Except as required by law, we undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

Overview

We have a diverse portfolio of iconic and market-leading hotels and resorts with significant underlying real estate value. We currently ~~hold investments in entities that~~ have ~~ownership or leasehold~~ interests in 4543 hotels (excluding the Hilton San Francisco Hotels), consisting of premium-branded hotels and resorts with over ~~29,000~~26,000 rooms, of which ~~approximately 88%~~over 86% are luxury and upper upscale (as defined by Smith Travel Research) and are located in prime U.S. markets and its territories. Our high-quality portfolio currently includes hotels mostly in major urban and convention areas, such as New York City, Washington, D.C., Chicago, San Francisco, Boston, New Orleans and Denver; and premier resorts in key leisure destinations, including Hawaii, Orlando, Key West and Miami Beach; as well as hotels in select airport and suburban locations.

Our objective is to be the preeminent lodging real estate investment trust (“REIT”), 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. As a pure-play real estate company with direct access to capital and independent financial resources, we believe our enhanced ability to implement compelling return on investment initiatives within our portfolio represents a significant embedded growth opportunity. Finally, given our scale and investment expertise, we believe we will be able to successfully execute single-asset and portfolio acquisitions and dispositions to further enhance the value and diversification of our assets throughout the lodging cycle, including potentially taking advantage of the economies of scale that could come from consolidation in the lodging REIT industry.

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We operate our business through two operating segments, our consolidated hotels and unconsolidated hotels. Our consolidated hotels operating segment is our only reportable segment. Refer to Note 11: ~~“Business~~"Business Segment ~~Information”~~Information" in our unaudited condensed consolidated financial statements included elsewhere within this Quarterly Report on Form 10-Q for additional information regarding our operating segments.

Recent Events

~~In June~~

During the three months ended September 30, 2023, we ~~ceased making debt service payments towards~~repurchased approximately 5.8 million shares of our common stock for a total purchase price of $75 million.

Additionally, in October 2023, the trustee for the SF Mortgage Loan ~~which is scheduled to mature in November 2023, and we have received notice of default from~~filed a lawsuit against the ~~servicer. We intend to work in good faith with~~borrowers under the SF Mortgage ~~Loan's servicer~~Loan. In connection with the lawsuit, the court appointed a receiver to ~~determine the most effective path forward, which is expected to result in the ultimate removal~~take control of the Hilton San Francisco ~~Union Square~~Hotels, which serve as security for the SF Mortgage Loan, and their operations, and thus, we have no further economic interest in the ~~Parc 55~~operations of the hotels. The receiver will operate and has authority over the hotels and, until no later than November 1, 2024, has the ability to sell the hotels. The lawsuit contemplates the receivership will end with a non-judicial foreclosure by December 2, 2024, if the hotels are not sold within the predetermined sale period. The effective exit from the Hilton San Francisco –Hotels results in a ~~Hilton Hotel from~~required distribution. Thus, our ~~portfolio.~~

Board of Directors declared a special cash dividend of $0.77 per share on October 27, 2023, which will be paid on January 16, 2024 to stockholders of record as of December 29, 2023.

Outlook

Current economic challenges have affected discretionary spending and travel, including supply chain disruptions and increased inflation. Inflationary concerns may affect both consumer sentiment and demand for travel, as well as increased labor or other costs to maintain or operate hotels that cannot be reduced without adversely affecting business growth or hotel value. However, we have relied on the performance of our hotels and active asset management to mitigate the effects of inflation and current macroeconomic ~~uncertainty, including recent pressures on the banking and financial industry.~~uncertainty. During the ~~second~~third quarter of 2023, we have continued to experience improvements in ~~leisure, group~~overall demand across our portfolio, although average daily rate ("ADR") growth has slowed as the industry recovery has stabilized and ~~business transient demand, including our urban hotels.~~ seasonal patterns have normalized. 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, such as further increases in interest rates, local economic factors and demand, a potential economic slowdown or a recession and geopolitical conflicts, we expect the positive momentum to continue through the remainder of 2023 and into 2024 based on current demand trends and as demand from international travel ~~is expected~~continues to ~~continue to improve during the second half of 2023.~~improve.

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 levels also help us determine achievable ~~average daily rate ("ADR")~~ADR levels as demand for rooms increases or decreases.

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. ADR is a commonly used performance measure in the hotel industry, and we use ADR to assess pricing levels that we are able to generate by type of customer, as changes in rates have a more pronounced effect on overall revenues and incremental profitability than changes in occupancy, as described above.

Revenue per Available Room

Revenue per available room ("RevPAR") represents rooms revenue divided by the total number of room nights available to guests for a given period. We consider RevPAR to be a meaningful indicator of our performance as it provides a metric correlated to two primary and key factors of operations at a hotel or group of hotels: occupancy and ADR. RevPAR is also a useful indicator in measuring performance over comparable periods.

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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 (loss) ~~income.~~

EBITDA, Adjusted EBITDA and Hotel Adjusted EBITDA

EBITDA, presented herein, reflects net income (loss) ~~income~~ 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 from investments in affiliates.

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.

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) ~~income~~ or other measures of financial performance or liquidity derived in accordance with U.S. GAAP. In addition, our definitions of EBITDA, Adjusted EBITDA and Hotel Adjusted EBITDA may not be comparable to similarly titled measures of other companies.

We believe that EBITDA, Adjusted EBITDA and Hotel Adjusted EBITDA provide useful information to investors about us and our financial condition and results of operations for the following reasons: (i) EBITDA, Adjusted EBITDA and Hotel Adjusted EBITDA are among the measures used by our management team to make day-to-day operating decisions and evaluate our operating performance between periods and between REITs by removing the effect of our capital structure (primarily interest expense) and asset base (primarily depreciation and amortization) from our operating results; and (ii) EBITDA, Adjusted EBITDA and Hotel Adjusted EBITDA are frequently used by securities analysts, investors and other interested parties as a common performance measure to compare results or estimate valuations across companies in our industry.

EBITDA, Adjusted EBITDA and Hotel Adjusted EBITDA have limitations as analytical tools and should not be considered either in isolation or as a substitute for net income (loss) ~~income~~ or other methods of analyzing our operating performance and results as reported under U.S. GAAP. Some of these limitations are:

•

EBITDA, Adjusted EBITDA and Hotel Adjusted EBITDA do not reflect our interest expense;

•

EBITDA, Adjusted EBITDA and Hotel Adjusted EBITDA do not reflect our income tax expense;

•

EBITDA, Adjusted EBITDA and Hotel Adjusted EBITDA do not reflect the effect on earnings or changes resulting from matters that we consider not to be indicative of our future operations; and

•

other companies in our industry may calculate EBITDA, Adjusted EBITDA and Hotel Adjusted EBITDA differently, limiting their usefulness as comparative measures.

We do not use or present EBITDA, Adjusted EBITDA and Hotel Adjusted EBITDA as measures of our liquidity or cash flow. These measures have limitations as analytical tools and should not be considered either in isolation or as a

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substitute for cash flow or other methods of analyzing our cash flows and liquidity as reported under U.S. GAAP. 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.

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.

The following table provides a reconciliation of Net income (loss) ~~income~~ to Hotel Adjusted EBITDA:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022

	(in millions)
Net income (loss)	$	31	$	40	$	(82)	$	138
Depreciation and amortization expense	65		67		193		204
Interest income	(9)		(4)		(29)		(5)
Interest expense	65		61		186		185
Income tax (benefit) expense	—		(3)		5		(2)
Interest expense, income tax and depreciation and amortization included in equity in earnings from investments in affiliates	2		2		7		7
EBITDA	154		163		280		527
Gain on sales of assets, net	—		(14)		(15)		(13)
Gain on sale of investments in affiliates(1)	—		—		(3)		(92)
Share-based compensation expense	5		4		14		13
Casualty and impairment loss	—		3		204		4
Other items	4		2		16		8
Adjusted EBITDA	163		158		496		447
Less: Adjusted EBITDA from investments in affiliates	(4)		(4)		(19)		(20)
Add: All other(2)	14		13		40		37
Hotel Adjusted EBITDA	$	173	$	167	$	517	$	464

Three Months Ended June 30,

Six Months Ended June 30,

2023

2022

2023

2022

(in millions)

Net (loss) income

$
(146
)

$
154

$
(113
)

$
98

Depreciation and amortization expense

64

68

128

137

Interest income

(10
)

(1
)

(20
)

(1
)
Interest expense

61

62

121

124

Income tax expense

3

1

5

1

Interest expense, income tax and depreciation and
     amortization included in equity in earnings from
     investments in affiliates

2

4

5

5

EBITDA

(26
)

288

126

364

Loss (gain) on sales of assets, net

—

1

(15
)

1

Gain on sale of investments in affiliates(1)

(3
)

(92
)

(3
)

(92
)
Share-based compensation expense

5

5

9

9

Impairment and casualty loss

203

1

204

1

Other items

8

4

12

6

Adjusted EBITDA

187

207

333

289

Less: Adjusted EBITDA from investments
    in affiliates

(8
)

(11
)

(15
)

(16
)
Add: All other(2)

13

12

26

24

Hotel Adjusted EBITDA

$
192

$
208

$
344

$
297

(1)Included in other gain, net.

(2)Includes other revenues and other expenses, non-income taxes on TRS leases included in other property-level 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. We calculate funds from (used in) operations (“FFO”) attributable to stockholders for a given operating period in accordance with standards established by the National Association of Real

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Estate Investment Trusts (“Nareit”), as net income (loss) ~~income~~ attributable to stockholders (calculated in accordance with U.S. GAAP), excluding depreciation and amortization, gains or losses on sales of assets, impairment, and the cumulative effect of changes in accounting principles, plus adjustments for unconsolidated joint ventures. Adjustments for unconsolidated joint ventures are calculated to reflect our pro rata share of the FFO of those entities on the same basis. As noted by Nareit in its December 2018 “Nareit Funds from Operations White Paper – 2018 Restatement,” since real estate values historically have risen or fallen with market conditions, many industry investors have considered presentation of operating results for real estate companies that use historical cost accounting to be insufficient by themselves. For these reasons, Nareit adopted the FFO metric in order to promote an industry-wide measure of REIT operating performance. We believe Nareit FFO provides useful information to investors regarding our operating performance and can facilitate comparisons of operating performance between periods and between REITs. 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 definition differently than we do. We calculate Nareit FFO per diluted share as our Nareit FFO divided by the number of fully diluted shares outstanding during a given operating period.

We also present Adjusted FFO attributable to stockholders and Adjusted FFO per diluted share when evaluating our performance because we believe that the exclusion of certain additional items described below provides useful supplemental information to investors regarding our ongoing operating performance. Management historically has made the adjustments detailed below in evaluating our performance and in our annual budget process. We believe that the presentation of Adjusted FFO provides useful supplemental information that is beneficial to an investor’s complete understanding of our operating performance. We adjust Nareit FFO attributable to stockholders for the following items, which may occur in any period, and refer to this measure as Adjusted FFO attributable to stockholders:

•

Costs associated with hotel acquisitions or dispositions expensed during the period;

•

Severance expense;

•

Share-based compensation expense;

•

Casualty gains or losses; and

•

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

The following table provides a reconciliation of Net income (loss) ~~income~~ attributable to stockholders to Nareit FFO attributable to stockholders and Adjusted FFO attributable to stockholders:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022

	(in millions, except per share amounts)
Net income (loss) attributable to stockholders	$	27	$	35	$	(90)	$	128
Depreciation and amortization expense	65		67		193		204
Depreciation and amortization expense attributable to noncontrolling interests	(1)		(1)		(3)		(3)
Gain on sales of assets, net	—		(14)		(15)		(13)
Gain on sale of investments in affiliates(1)	—		—		(3)		(92)
Impairment loss	—		—		202		—
Equity investment adjustments:
Equity in earnings from investments in affiliates	(2)		(1)		(9)		(6)
Pro rata FFO of investments in affiliates	2		1		12		11
Nareit FFO attributable to stockholders	91		87		287		229
Casualty loss	—		3		2		4
Share-based compensation expense	5		4		14		13
Other items(2)	12		—		26		5
Adjusted FFO attributable to stockholders	$	108	$	94	$	329	$	251
Nareit FFO per share – Diluted(3)	$	0.43	$	0.39	$	1.33	$	1.00
Adjusted FFO per share – Diluted(3)	$	0.51	$	0.42	$	1.52	$	1.09

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Three Months Ended June 30,

Six Months Ended June 30,

2023

2022

2023

2022

(in millions, except per share amounts)

Net (loss) income attributable to stockholders

$
(150
)

$
150

$
(117
)

$
93

Depreciation and amortization expense

64

68

128

137

Depreciation and amortization expense
attributable to noncontrolling interests

(1
)

(1
)

(2
)

(2
)
Loss (gain) on sales of assets, net

—

1

(15
)

1

Gain on sale of investments in affiliates(1)

(3
)

(92
)

(3
)

(92
)
Impairment loss

202

—

202

—

Equity investment adjustments:

Equity in earnings from investments in affiliates

(3
)

(5
)

(7
)

(5
)
Pro rata FFO of investments in affiliates

5

8

10

10

Nareit FFO attributable to stockholders

114

129

196

142

Casualty loss

1

1

2

1

Share-based compensation expense

5

5

9

9

Other items

9

4

14

5

Adjusted FFO attributable to stockholders

$
129

$
139

$
221

$
157

Nareit FFO per share – Diluted(2)

$
0.53

$
0.57

$
0.90

$
0.61

Adjusted FFO per share – Diluted(2)

$
0.60

$
0.61

$
1.01

$
0.68

(1)Included in other gain, net.

(2)For the three and nine months ended September 30, 2023, includes $6 million and $8 million, respectively, of incremental interest expense associated with the default of the SF Mortgage Loan.

(3)Per share amounts are calculated based on unrounded numbers.

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. Since January 1, 2022, we have disposed of seven consolidated hotels. The results of operations of these hotels are included in our consolidated results only during our period of ownership.

Hotel Revenues and Operating Expenses


	Three Months Ended September 30,
	2023		2022		Change		Change from Property Dispositions		Change from Other Factors(1)

	(in millions)
Rooms revenue	$	432	$	428	$	4	$	(9)	$	13
Food and beverage revenue	159		148		11		(2)		13
Ancillary hotel revenue	66		67		(1)		—		(1)
Rooms expense	119		115		4		(2)		6
Food and beverage expense	122		115		7		(1)		8
Other departmental and support expense	161		162		(1)		(4)		3
Other property-level expense	59		58		1		—		1
Management fees expense	31		30		1		—		1

Three Months Ended June 30,

2023

2022

Change

Change from
Property
Dispositions

Change
from Other
Factors(1)

(in millions)

Rooms revenue

$
442

$
433

$
9

$
(14
)

$
23

Food and beverage revenue

178

173

5

(3
)

8

Ancillary hotel revenue

72

70

2

(1
)

3

Rooms expense

117

98

19

(3
)

22

Food and beverage expense

128

119

9

(2
)

11

Other departmental and support expense

165

158

7

(5
)

12

Other property-level expense

63

65

(2
)

(1
)

(1
)
Management fees expense

34

32

2

—

2

(1)Change from other factors primarily relates to the market-specific conditions discussed below.


	Nine Months Ended September 30,
	2023		2022		Change		Change from Property Dispositions		Change from Other Factors(1)

	(in millions)
Rooms revenue	$	1,256	$	1,153	$	103	$	(33)	$	136
Food and beverage revenue	518		431		87		(6)		93
Ancillary hotel revenue	203		198		5		(2)		7
Rooms expense	343		298		45		(8)		53
Food and beverage expense	377		321		56		(4)		60
Other departmental and support expense	484		453		31		(13)		44
Other property-level expense	182		173		9		(3)		12
Management fees expense	95		84		11		(1)		12

Six Months Ended June 30,

2023

2022

Change

Change from
Property
Dispositions

Change
from Other
Factors(1)

(in millions)

Rooms revenue

$
824

$
725

$
99

$
(24
)

$
123

Food and beverage revenue

359

283

76

(4
)

80

Ancillary hotel revenue

137

131

6

(1
)

7

Rooms expense

224

183

41

(5
)

46

Food and beverage expense

255

206

49

(2
)

51

Other departmental and support expense

323

291

32

(9
)

41

Other property-level expense

123

115

8

(3
)

11

Management fees expense

64

54

10

—

10

(1)Change from other factors primarily relates to the market-specific conditions discussed below.

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Group, transient, contract and other rooms revenue for the three and ~~six~~nine months ended ~~June~~September 30, 2023, as well as the change for each segment compared to the same periods in 2022 are as follows:


	Three Months Ended September 30,
	2023		2022		Change		Change from Property Dispositions		Change from Other Factors(1)

	(in millions)
Group rooms revenue	$	112	$	97	$	15	$	(1)	$	16
Transient rooms revenue	283		302		(19)		(7)		(12)
Contract rooms revenue	27		20		7		(1)		8
Other rooms revenue	10		9		1		—		1
Rooms revenue	$	432	$	428	$	4	$	(9)	$	13

Three Months Ended June 30,

2023

2022

Change

Change from
Property
Dispositions

Change
from Other
Factors(1)

(in millions)

Group rooms revenue

$
131

$
123

$
8

$
(2
)

$
10

Transient rooms revenue

278

283

(5
)

(11
)

6

Contract rooms revenue

23

18

5

(1
)

6

Other rooms revenue

10

9

1

—

1

Rooms revenue

$
442

$
433

$
9

$
(14
)

$
23

(1)Change from other factors primarily relates to the market-specific conditions discussed below.


	Nine Months Ended September 30,
	2023		2022		Change		Change from Property Dispositions		Change from Other Factors(1)

	(in millions)
Group rooms revenue	$	368	$	293	$	75	$	(5)	$	80
Transient rooms revenue	790		783		7		(26)		33
Contract rooms revenue	70		52		18		(2)		20
Other rooms revenue	28		25		3		—		3
Rooms revenue	$	1,256	$	1,153	$	103	$	(33)	$	136

Six Months Ended June 30,

2023

2022

Change

Change from
Property
Dispositions

Change
from Other
Factors(1)

(in millions)

Group rooms revenue

$
256

$
196

$
60

$
(4
)

$
64

Transient rooms revenue

507

482

25

(19
)

44

Contract rooms revenue

43

32

11

(1
)

12

Other rooms revenue

18

15

3

—

3

Rooms revenue

$
824

$
725

$
99

$
(24
)

$
123

(1)Change from other factors primarily relates to the market-specific conditions discussed below.

Market-Specific Conditions

The increases in hotel revenues and operating expenses from other factors were primarily a result of significant occupancy increases in certain of our largest markets during the three and six months ended June 30, 2023 compared to the same period in 2022, with our Hawaii, New York and Chicago markets experiencing the most significant changes. Combined occupancy and ADR at our two Hawaii hotels increased 6.1 percentage points and 3.5%, respectively, formarkets. During the three months ended ~~June~~September 30, 2023, our New York, Hawaii and ~~8.3 percentage points and 6.6%, respectively, for~~Seattle markets experienced the six months ended June 30, 2023 compared to same periods in 2022, driven by an increase in domestic transient demand primarily at the Hilton Hawaiian Village Waikiki Beach Resort, which experienced increases in both occupancy and ADR of 9.0 percentage points and 8.8%, respectively, for the six months ended June 30, 2023most significant changes compared to the same period in 2022. The New York Hilton Midtown benefited from increases in group and transient demand resulting in increases in occupancy and ADR of ~~17.6~~17.8 percentage points and ~~26.3~~4.1%, respectively, for the three months ended September 30, 2023 compared to the same period in 2022. Combined occupancy at our two Hawaii hotels increased 2.3 percentage points for the three ~~and six~~ months ended ~~June~~September 30, 2023 compared to same period in 2022, driven by an increase in group demand primarily at the Hilton Hawaiian Village Waikiki Beach Resort, which experienced increases in both occupancy and ADR of 1.5 percentage points and 1.6%, respectively. Combined occupancy at our Seattle hotels increased 14.2 percentage points for the three months ended September 30, 2023 compared to the same period in 2022 due to an increase in transient demand.

During the nine months ended September 30, 2023, our Hawaii, New York and and Chicago markets experienced the most significant changes compared to the same period in 2022. Combined occupancy and ADR at our ~~Chicago~~two Hawaii hotels increased ~~9.0~~6.3 percentage points and ~~7.6%~~4.2%, respectively, for the ~~three~~nine months ended ~~June~~September 30, 2023 compared to same period in 2022, driven by increases in group and ~~11.1~~domestic transient demand primarily at the Hilton Hawaiian Village Waikiki Beach Resort, which experienced increases in both occupancy and ADR of 6.5 percentage points and ~~3.0%~~5.8%, ~~respectively,~~respectively. The New York Hilton Midtown benefited from increases in group and transient demand resulting in increases in occupancy of 23.5 percentage points for the ~~six~~nine months ended ~~June~~September 30, 2023 compared to the same ~~periods~~period in 2022. Combined occupancy at our Chicago hotels increased 7.7 percentage points for the nine months ended September 30, 2023 compared to the same period in 2022 due to increases in ~~both~~transient and group ~~and transient~~ demand.

Additionally, for the ~~six~~nine months ended ~~June~~September 30, 2023, hotel revenues and operating expenses for the Parc 55 San Francisco – a Hilton Hotel increased ~~$20~~$23 million and ~~$14~~$15 million, respectively, compared to the same period in

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2022 as the hotel's operations were suspended until May 2022. These increases are partially offset by the impact from the suspension of operations at the Casa Marina Key West, Curio Collection, beginning in May 2023 due to renovations, which resulted in a decrease in hotel revenues of $11 million and $28 million, respectively, and operating expenses of $5 million and $10 million, ~~and $18 million~~respectively, for the three and ~~six~~nine months ended ~~June~~September 30, 2023, ~~respectively,~~ compared to the same periods in 2022.

Other revenue and Other operating expense

During the three and ~~six~~nine months ended ~~June~~September 30, 2023, other revenue increased by $3 million and $7$10 million, respectively, and other operating expense increased by $4$1 million and $8$9 million, respectively, due to an increase in business and related costs that are allocated to the Hilton Grand Vacations pursuant to service arrangements with certain of our hotels.

Corporate general and administrative


	Three Months Ended September 30,						Nine Months Ended September 30,
	2023		2022		Percent Change		2023		2022		Percent Change

	(in millions)						(in millions)
General and administrative expenses	$	13	$	12	8.3	%	$	34	$	32	6.3	%
Share-based compensation expense	5		4		25.0		14		13		7.7
Other items(1)	—		—		—		2		3		(33.3)
Total corporate general and administrative	$	18	$	16	12.5	%	$	50	$	48	4.2	%

Three Months Ended June 30,

Six Months Ended June 30,

2023

2022

Percent Change

2023

2022

Percent
Change

(in millions)

(in millions)

General and administrative expenses

$
10

$
10

—
%

$
21

$
20

5.0
%
Share-based compensation expense

5

5

—

9

9

—

Other items(1)

1

1

—

2

3

(33.3
)
Total corporate general and administrative

$
16

$
16

—
%

$
32

$
32

—
%

(1)Consists primarily of disposition costs.

Casualty and ~~amortization of upfront cloud-computing costs.~~

~~Impairment and casualty~~impairment loss

During the ~~three~~nine months ended ~~June~~September 30, 2023, we recognized an impairment loss of approximately $202 million. Refer to Note 7: "Fair Value Measurements" in our unaudited condensed consolidated financial statements included elsewhere within this Quarterly Report on Form 10-Q for additional information.

~~(Loss) gain~~

In September 2022, Hurricanes Ian and Fiona caused minimal damage and disruption at our hotels in Florida and Puerto Rico, respectively, and we recognized a loss of approximately $2 million for costs to repair and remediate damage at these hotels.

Gain on sales of assets, net

During the ~~six~~nine months ended ~~June~~September 30, 2023, we recognized a net gain of $15 million from the sale of one consolidated hotel.

During the three and nine months ended September 30, 2022, we recognized a net gain of $14 million and $13 million, respectively, primarily as a result of the sales of our consolidated hotels during the respective periods.

Non-operating Income and Expenses

Interest income

Interest income increased $9$5 million and ~~$19~~$24 million, respectively, during the three and ~~six~~nine months ended ~~June~~September 30, 2023 compared to the same periods in ~~2022 as~~2022. The increase for the three months ended September 30, 2023 was a result of an increase in interest rates, which more than offset a decrease in the average cash ~~coupled with~~balances, and the increase for the nine months ended September 30, 2023 was a result of both an increase in average cash balances and interest rates.

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Interest expense

Interest expense ~~decreased~~increased for both the three and ~~six~~nine months ended ~~June~~September 30, 2023 compared to the same ~~period~~periods in 2022. Interest expense ~~decreased~~increased from accrued default interest in connection with the SF Mortgage Loan beginning in June 2023 and the $50 million of borrowings under our Revolver in December 2022, which was subsequently repaid in February 2023. This was partially offset by a decrease due to the full repayments in December 2022 of our unsecured delayed draw term loan facility ("2019 Term Facility") and the $26 million mortgage loan secured by the Hilton Checkers, ~~which was partially offset~~as well as the full repayment of the $75 million mortgage loan secured by ~~an increase from accrued default interest~~the W Chicago - City Center in ~~connection with the SF Mortgage Loan in~~ June ~~2023 and the $50 million of borrowings under our Revolver in December 2022, which was subsequently repaid in February~~ 2023. Interest expense associated with our debt for the three and ~~six~~nine months ended ~~June~~September 30, 2023 and 2022 were as follows:


	Three Months Ended September 30,						Nine Months Ended September 30,
	2023		2022		Percent Change		2023		2022		Percent Change

	(in millions)						(in millions)
SF Mortgage Loan(1)	$	14	$	8	75.0	%	$	31	$	23	34.8	%
HHV Mortgage Loan(2)	13		13		—	%	40		40		—	%
Other mortgage loans	4		5		(20.0)		14		16		(12.5)
Revolver	1		1		—		3		2		50.0
2019 Term Facility(3)	—		1		(100.0)		—		2		(100.0)
2025 Senior Notes(4)	13		13		—		37		37		—
2028 Senior Notes(4)	11		11		—		32		32		—
2029 Senior Notes(4)	9		9		—		27		27		—
Other	—		—		—		2		6		(66.7)
Total interest expense	$	65	$	61	6.6	%	$	186	$	185	0.5	%

Three Months Ended June 30,

Six Months Ended June 30,

2023

2022

Percent
Change

2023

2022

Percent
Change

(in millions)

(in millions)

SF and HHV Mortgage Loans(1)

$
23

$
21

9.5
%

$
44

$
42

4.8
%

Other mortgage loans

5

6

(16.7
)

10

11

(9.1
)

Revolver

1

—

100.0

2

1

100.0

2019 Term Facility(2)

—

—

—

—

1

(100.0
)

2025 Senior Notes(3)

12

12

—

24

24

—

2028 Senior Notes(3)

10

10

—

21

21

—

2029 Senior Notes(3)

9

9

—

18

18

—

Other

1

4

(75.0
)

2

6

(66.7
)

Total interest expense

$
61

$
62

(1.6
)%

$
121

$
124

(2.4
)%

(1)In October 2016, we entered into athe $725 million ~~CMBS loan secured by the Hilton San Francisco Union Square and the Parc 55 San Francisco – a Hilton Hotel (“~~SF Mortgage ~~Loan”) and a $1.275 billion CMBS loan secured by the Hilton Hawaiian Village Waikiki Beach Resort (“HHV Mortgage Loan”).~~Loan. In June 2023, we ceased making debt service payments toward the SF Mortgage Loan, and we have received notice of default from the servicer. 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. ~~As a result,~~In October 2023, the ~~lenders may seek any and all remedies legally available, including foreclosure. We are currently working in good faith with~~trustee for the SF Mortgage ~~Loan's servicer~~Loan filed a lawsuit against the borrowers under the SF Mortgage Loan. In connection with the lawsuit, the court appointed a receiver to ~~determine~~take control of the ~~most effective path forward,~~Hilton San Francisco Hotels, which ~~is expected~~serve as security for the SF Mortgage Loan, and their operations, and thus, we have no further economic interest in the operations of the hotels. Refer to ~~result~~Note 6: "Debt" and Note 13: "Subsequent Events" in ~~ultimate removal of these hotels from~~ our ~~portfolio.~~unaudited condensed consolidated financial statements included elsewhere within this Quarterly Report on Form 10-Q for additional information.

(2)In October 2016, we entered into a $1.275 billion CMBS loan secured by the Hilton Hawaiian Village Waikiki Beach Resort (“HHV Mortgage Loan”).

(3)In December 2022, we fully repaid our 2019 Term Facility.

~~(3)~~(4)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”) in May 2020 issued an aggregate of $650 million of senior notes due 2025 (“2025 Senior Notes”) and in September 2020 issued an aggregate of $725 million of senior notes due 2028 (“2028 Senior Notes”) and in May 2021 issued an aggregate of $750 million of senior notes due 2029 ("2029 Senior Notes", collectively referred to as the "Senior Notes").

Other gain, net

During the ~~three~~nine months ended ~~June~~September 30, 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.

During the ~~three and six~~nine months ended ~~June~~September 30, 2022, we recognized a gain of ~~$92~~$98 million primarily due to the sale of our ownership interests in the joint ventures that own and operate the Hilton San Diego Bayfront. Refer to Note 3: "Acquisitions and Dispositions" in our unaudited condensed consolidated financial statements included elsewhere within this Quarterly Report on Form 10-Q for additional information.

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Income tax ~~expense~~

benefit (expense)

During the ~~six~~nine months ended ~~June~~September 30, 2023, we recognized income tax expense of $5 million, ~~which is~~ primarily related to taxable income from 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 ~~June~~September 30, 2023, we had total cash and cash equivalents of ~~$797~~$726 million and ~~$45~~$60 million of restricted cash. Restricted cash primarily consists of cash restricted as to use by our debt agreements and reserves for capital expenditures in accordance with certain of our management agreements. As of ~~June~~September 30, 2023, restricted cash included ~~$13~~$26 million of ~~hotel operating~~ cash related to the default on our SF Mortgage Loan and the use of such funds is limited pursuant to the terms of the loan and associated agreements.

During the ~~second~~third quarter of 2023, we continued to experience improvements in ~~leisure, group and business transient~~overall demand across our portfolio and expect the positive momentum to continue through the remainder of 2023 and into 2024 based on current demand trends and as demand from international travel ~~is expected~~continues to ~~continue to improve during the second half of 2023.~~improve. We continue to mitigate the effects of macroeconomic and inflationary pressures through active asset management.

With approximately $950 million available under our Revolver and ~~$797~~$726 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. We have no significant maturities in 2023, except for the SF Mortgage Loan due in November 2023, for which we ceased making debt service payments in June ~~2023. Failure~~2023 and is in default. Refer to ~~make debt service payments constitutes a default. We intend to work~~Note 6: "Debt" and Note 13: "Subsequent Events" in good faith with the SF Mortgage Loan's servicer to determine the most effective path forward, which is expected to result in the ultimate removal of the Hilton San Francisco Union Square and the Parc 55 San Francisco – a Hilton Hotel from our ~~portfolio. Additionally, in June 2023, we fully repaid the $75 million mortgage loan secured by the W Chicago – City Center, due in August 2023, with available cash~~unaudited condensed consolidated financial statements included elsewhere within this Quarterly Report on ~~hand.~~Form 10-Q 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. However, there can 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.

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. In addition, our Board of Directors declared a special cash dividend of $0.77 per share, or approximately $162 million, which will be paid in January 2024, refer to Note 13: "Subsequent Events" in our unaudited condensed consolidated financial statements included elsewhere within this Quarterly Report on Form 10-Q for additional information. Many of the other expenses associated with our hotels are relatively fixed, including portions of rent expense, property taxes and insurance. Since we generally are unable to decrease these costs significantly or rapidly when demand for our hotels decreases, the resulting decline in our revenues can have a greater adverse effect on our net cash flow, margins and profits. Our long-term liquidity requirements primarily consist of funds necessary to pay for scheduled debt maturities, capital improvements at our hotels, and costs associated with potential acquisitions.

Our commitments to fund capital expenditures for renovations and maintenance at our hotels will be funded by cash and cash equivalents, restricted cash to the extent permitted by our lending agreements and cash flow from operations. We have construction contract commitments of approximately ~~$163~~$135 million for capital expenditures at our properties, of which ~~$37~~$30 million relates to projects at the Bonnet Creek complex, including the meeting space expansion project and renovation of guestrooms, existing meeting space, lobbies, golf course and other recreational amenities, ~~$43~~$28 million relates to the complete renovation of all guestrooms, public spaces, and certain hotel infrastructure at the Casa Marina Key West, Curio Collection, and ~~$27~~$25 million relates to the Tapa Tower guestroom renovations at the Hilton Hawaiian Village Waikiki Beach Resort. 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.

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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.

Stock Repurchase Program

In February 2023, our Board of Directors terminated a previous 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 repurchases may be made through open market purchases, including through Rule 10b5-1 trading programs, in privately negotiated transactions, or

in such other manner that would comply with applicable securities laws. The timing of any future stock repurchases and the number of shares to be repurchased will depend upon prevailing market conditions and other factors, and we may suspend the repurchase program at any time. During the ~~six~~nine months ended ~~June~~September 30, 2023, we repurchased in aggregate under the Stock Repurchase Programs approximately ~~8.8 million~~14.6 shares of our common stock for a total purchase price of ~~$105~~$180 million. As of ~~June~~September 30, 2023, ~~$225~~$150 million remained available for stock repurchases under the February 2023 Stock Repurchase Program.

Sources and Uses of Our Cash and Cash Equivalents

The following tables summarize our net cash flows and key metrics related to our liquidity:

Six Months Ended June 30,

2023

2022

Percent Change

(in millions)

Net cash provided by operating activities

$
250

$
191

30.9
%
Net cash (used in) provided by investing activities

(20
)

147

113.6
%
Net cash used in financing activities

(327
)

(234
)

39.7
%


	Nine Months Ended September 30,
	2023		2022		Percent Change

	(in millions)
Net cash provided by operating activities	$	377	$	339	11.2	%
Net cash (used in) provided by investing activities	(91)		140		165.0
Net cash used in financing activities	(439)		(242)		81.4

Operating Activities

Cash flow from operating activities are primarily generated from the operating income generated at our hotels. The ~~$59~~$38 million increase in net cash provided by operating activities for the ~~six~~nine months ended ~~June~~September 30, 2023 compared to the ~~six~~nine months ended ~~June~~September 30, 2022 was primarily due to an increase in cash from operations as a result of an increase in occupancy at our ~~hotels.~~

hotels, a decrease in cash paid for interest of $20 million, primarily due to the cessation of debt service payments toward the SF Mortgage Loan, and an increase in interest income of $23 million due to an increase in average cash balances and interest rates.

Investing Activities

The ~~$20~~$91 million in net cash used in investing activities for the ~~six~~nine months ended ~~June~~September 30, 2023 was primarily attributable to ~~$135~~$206 million in capital expenditures and land acquisitions, partially offset by $116 million of net proceeds from the sale of one of our hotels.

The ~~$147~~$140 million in net cash provided by investing activities for the ~~six~~nine months ended ~~June~~September 30, 2022 was primarily attributable to ~~$199~~$244 million of net proceeds from the sale of ~~three~~five of our hotels and our ownership interests in the joint ventures that own and operate one hotel, partially offset by ~~$52~~$104 million in capital expenditures.

Financing Activities

The ~~$327~~$439 million in net cash used in financing activities for the ~~six~~nine months ended ~~June~~September 30, 2023 was primarily attributable to ~~$130 million of debt repayments,~~ the repurchase of approximately ~~8.8~~14.6 million shares of our common stock for ~~$105~~approximately $180 million, $132 million of debt repayments and ~~$88~~$120 million of dividends paid.

Table of Contents

The ~~$234~~$242 million in net cash used in financing activities for the ~~six~~nine months ended ~~June~~September 30, 2022 was primarily attributable to the repurchase of approximately 12.0 million shares of our common stock for approximately $218 million.

Dividends

As a REIT, we are required to distribute at least 90% of our REIT taxable income, determined without regard to the deduction for dividends paid and excluding net capital gains, to our stockholders on an annual basis. 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 not be required to pay tax on our income. Consequently, before consideration of the use of any net operating loss carryforward, 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.

We declared the following dividends to holders of our common stock during 2023:

Record Date

Payment Date

Dividend per Share

March 31, 2023

April 17, 2023

$
0.15

June 30, 2023

July 17, 2023

$
0.15


Record Date	Payment Date	Dividend per Share
March 31, 2023	April 17, 2023	$	0.15
June 30, 2023	July 17, 2023	$	0.15
September 29, 2023	October 16, 2023	$	0.15
December 29, 2023	January 16, 2024	$	0.77

Debt

As of ~~June~~September 30, 2023, our total indebtedness was approximately $4.5 billion, including approximately $2.1 billion of our Senior Notes and the $725 million SF Mortgage Loan on which we ceased making debt service payments in June 2023, and excluding approximately $169 million of 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 6: ~~“Debt”~~"Debt" in our unaudited condensed consolidated financial statements included elsewhere within this Quarterly Report on Form 10-Q for additional information.

Critical Accounting Estimates

The preparation of our financial statements in accordance with U.S. GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of our financial statements, the reported amounts of revenues and expenses during the reporting periods and the related disclosures in our unaudited condensed consolidated financial statements and accompanying footnotes. We have discussed those estimates that we believe are critical and require the use of complex judgment in their application in our Annual Report on Form 10-K for the year ended December 31, 2022, filed with the Securities and Exchange Commission on February 23, 2023. There have been no material changes to our critical accounting policies or the methods or assumptions we apply.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

We are exposed to market risk primarily from changes in interest rates, which may affect our future income, cash flows and fair value, depending on changes to interest rates. 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.

Table of Contents

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Our management has evaluated, under the supervision and with the participation of the Company's Chief Executive Officer and Chief Financial Officer, the effectiveness of the disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, (the “Exchange Act”)), as required by paragraph (b) of Rules 13a-15 and 15d-15 of the Exchange Act. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that as of ~~June~~September 30, 2023, our disclosure controls and procedures were effective to ensure that information we are required to disclose in reports filed or submitted with the Securities and Exchange Commission (i) is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms and (ii) is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding disclosure.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting during our most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Table of Contents

PART II. OTHER INFORMATION

Item 1. Legal Proceedings.

We are involved in various claims and lawsuits arising in the ordinary course of business, some of which include claims for substantial sums, including proceedings involving tort and other general liability claims, employee claims and consumer protection claims. Most occurrences involving liability, claims of negligence and employees are covered by insurance with solvent insurance carriers. For those matters not covered by insurance, which include commercial matters, we recognize a liability when we believe the loss is probable and can be reasonably estimated. The ultimate results of claims and litigation cannot be predicted with certainty. We believe we have adequate reserves against such matters. We currently believe that the ultimate outcome of such lawsuits and proceedings will not, individually or in the aggregate, have a material adverse effect on our consolidated financial position, results of operations or liquidity. However, depending on the amount and timing, an unfavorable resolution of some or all of these matters could materially affect our future results of operations in a particular period.

Item 1A. Risk Factors.

There have been no material changes from the risk factors previously disclosed in response to “Part I – Item 1A. Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2022.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

2(a): Unregistered Sales of Equity Securities and Use of Proceeds

None.

2(b): Use of Proceeds from Registered Securities

None.

Table of Contents

~~None.~~

2(c): Purchases of Equity Securities

During the ~~six~~nine months ended ~~June~~September 30, 2023, repurchases made pursuant to our stock repurchase programs were as follows:


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
Total	14,751,754			14,575,466

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

Total

8,991,021

8,815,500

(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.

(2)The weighted average price paid per share for shares of common stock surrendered by certain employees is based on the closing price of our common stock on the trading date immediately prior to the date of delivery of the shares. The weighted average price paid per share for shares repurchased excludes commissions paid.

(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.

Item 3. Defaults Upon Senior Securities.

In June 2023, we ceased making debt service payments toward the $725 million SF Mortgage Loan, and we have received a notice of default from the servicer. As of ~~August 3,~~November 2, 2023, the total arrearage related to the SF Mortgage Loan, including interest and fees was ~~$12~~$26 million, of which $4$10 million is default interest. ~~Recovery~~In October 2023, the trustee for the SF Mortgage Loan filed a lawsuit against the borrowers under the SF Mortgage Loan. In connection with the lawsuit, the court has appointed a receiver to take control of ~~default interest is non-recourse to~~ the ~~Company~~Hilton San Francisco Hotels, which serve as security for the SF Mortgage Loan, and their operations, and thus, we ~~do not intend to fund the default~~have no further economic interest ~~upon resolution with the loan's servicer. We intend to work in good faith with the SF Mortgage Loan's servicer to determine the most effective path forward, which is expected to result~~ in the ~~ultimate removal~~operations of the ~~two Hilton San Francisco~~hotels. The receiver will operate and has authority over the hotels ~~from our portfolio. Refer~~and, until no later than November 1, 2024, has the ability to ~~Note 6: "Debt" in our unaudited condensed consolidated financial statements included elsewhere~~sell the hotels. The lawsuit contemplates the receivership will end with a non-judicial foreclosure by December 2, 2024, if the hotels are not sold within ~~this Quarterly Report on Form 10-Q for additional information.~~

the predetermined sale period.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

None.

Table of Contents

~~None~~.

Item 6. Exhibits


Exhibit Number		Description
2.1		Distribution Agreement by and among Hilton Worldwide Holdings Inc., Park Hotels & Resorts Inc., Hilton Grand Vacations Inc. and Hilton Domestic Operating Company Inc., dated as of January 2, 2017 (incorporated by reference to Exhibit 2.1 to our Current Report on Form 8-K, filed on January 4, 2017).

2.2		Agreement and Plan of Merger by and among Park Hotels & Resorts Inc., PK Domestic Property LLC, PK Domestic Sub LLC, and Chesapeake Lodging Trust, dated as of May 5, 2019 (incorporated by reference to Exhibit 2.1 to our Current Report on Form 8-K, filed on May 6, 2019).

3.1		Amended and Restated Certificate of Incorporation of Park Hotels & Resorts Inc. (incorporated by reference to Exhibit 3.1 to our Current Report on Form 8-K, filed on April 30, 2019).

3.2		Amended and Restated By-laws of Park Hotels & Resorts Inc. (incorporated by reference to Exhibit 3.1 to our Current Report on Form 8-K/A, filed on July 31, 2023).

~~10.1~~31.1*		Park Hotels & Resorts Inc. 2017 Omnibus Incentive Plan (as Amended and Restated Effective as of April 26, 2023) (incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K, filed on April 28, 2023).

31.1*	Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2*		Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1*		Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, furnished herewith.

32.2*		Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, furnished herewith.

101.INS*		Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101.SCH*		Inline XBRL Taxonomy Extension Schema Document.

101.CAL*		Inline XBRL Taxonomy Extension Calculation Linkbase Document.

101.DEF*		Inline XBRL Taxonomy Extension Definition Linkbase Document.

101.LAB*		Inline XBRL Taxonomy Extension Label Linkbase Document.

101.PRE*		Inline XBRL Taxonomy Extension Presentation Linkbase Document.

104*		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

*		Filed herewith

Table of Contents

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.


	Park Hotels & Resorts Inc.

Date: ~~August 3,~~November 2, 2023	By:		/s/ Thomas J. Baltimore Jr.
			Thomas J. Baltimore, Jr.
			Chairman of the Board,
		President and Chief Executive Officer
		~~(Principal~~(Principal Executive Officer)

Date: ~~August 3,~~November 2, 2023	By:		/s/ Sean M. Dell’Orto
			Sean M. Dell’Orto
			Executive Vice President,
		Chief Financial Officer and Treasurer
		(Principal Financial Officer)

Date: ~~August 3,~~November 2, 2023	By:		/s/ Darren W. Robb
			Darren W. Robb
			Senior Vice President and
		Chief Accounting Officer
		(Principal Accounting Officer)


Title of each class	Trading Symbol	Name of exchange on which registered
Common Stock, $0.01 par value per share	PK	New York Stock Exchange


	June 30, 2023			December 31, 2022
	(unaudited)
ASSETS
Property and equipment, net	$	8,002		$	8,301
Intangibles, net		43			43
Cash and cash equivalents		797			906
Restricted cash		45			33
Accounts receivable, net of allowance for doubtful accounts of $2 and $2		134			129
Prepaid expenses		83			58
Other assets		35			47
Operating lease right-of-use assets		205			214
TOTAL ASSETS (variable interest entities – $241 and $237)	$	9,344		$	9,731
LIABILITIES AND EQUITY
Liabilities
Debt	$	4,490		$	4,617
Accounts payable and accrued expenses		279			220
Due to hotel managers		131			141
Other liabilities		203			228
Operating lease liabilities		228			234
Total liabilities (variable interest entities – $220 and $219)		5,331			5,440
Commitments and contingencies – refer to Note 12
Stockholders' Equity
Common stock, par value $0.01 per share, 6,000,000,000 shares authorized, 216,425,670 shares issued and 215,738,036 shares outstanding as of June 30, 2023 and 224,573,858 shares issued and 224,061,745 shares outstanding as of December 31, 2022		2			2
Additional paid-in capital		4,221			4,321
(Accumulated deficit) retained earnings		(165	)		16
Total stockholders' equity		4,058			4,339
Noncontrolling interests		(45	)		(48	)
Total equity		4,013			4,291
TOTAL LIABILITIES AND EQUITY	$	9,344		$	9,731


	September 30, 2023		December 31, 2022
	(unaudited)
ASSETS
Property and equipment, net	$	8,028	$	8,301
Intangibles, net	42		43
Cash and cash equivalents	726		906
Restricted cash	60		33
Accounts receivable, net of allowance for doubtful accounts of $1 and $2	149		129
Prepaid expenses	63		58
Other assets	36		47
Operating lease right-of-use assets	201		214
TOTAL ASSETS (variable interest entities – $241 and $237)	$	9,305	$	9,731
LIABILITIES AND EQUITY
Liabilities
Debt	$	4,490	$	4,617
Accounts payable and accrued expenses	293		220
Due to hotel managers	136		141
Other liabilities	221		228
Operating lease liabilities	225		234
Total liabilities (variable interest entities – $218 and $219)	5,365		5,440
Commitments and contingencies – refer to Note 12
Stockholders' Equity
Common stock, par value $0.01 per share, 6,000,000,000 shares authorized, 210,672,182 shares issued and 209,983,781 shares outstanding as of September 30, 2023 and 224,573,858 shares issued and 224,061,745 shares outstanding as of December 31, 2022	2		2
Additional paid-in capital	4,151		4,321
(Accumulated deficit) retained earnings	(169)		16
Total stockholders' equity	3,984		4,339
Noncontrolling interests	(44)		(48)
Total equity	3,940		4,291
TOTAL LIABILITIES AND EQUITY	$	9,305	$	9,731


	June 30, 2023			December 31, 2022
	(in millions)
Land	$	3,196		$	3,317
Buildings and leasehold improvements		6,308			6,512
Furniture and equipment		965			994
Construction-in-progress		229			201
		10,698			11,024
Accumulated depreciation		(2,696	)		(2,723	)
	$	8,002		$	8,301


☒x			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐o			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


PART I. FINANCIAL INFORMATION			Page

Item 1.	Financial Statements (unaudited)	3	3
	Condensed Consolidated Balance Sheets as of ~~June~~September 30, 2023 and December 31, 2022	3	3
	Condensed Consolidated Statements of Operations for the Three and ~~Six~~Nine Months Ended ~~June~~September 30, 2023 and 2022	4	4
	Condensed Consolidated Statements of Cash Flows for the ~~Six~~Nine Months Ended ~~June~~September 30, 2023 and 2022	5	5
	Condensed Consolidated Statements of Equity for the Three and ~~Six~~Nine Months Ended ~~June~~September 30, 2023 and 2022	6	6
	Notes to Condensed Consolidated Financial Statements	7	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	16	15
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	27	25
Item 4.	Controls and Procedures	28	25

PART II. OTHER INFORMATION
~~Item 1.~~	~~Legal Proceedings~~		26
Item ~~1A.~~1.	~~Risk Factors~~Legal Proceedings	29	26
Item 1A.	Risk Factors	29
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	29	26
Item 3.	Defaults Upon Senior Securities	30	27
Item 4.	Mine Safety Disclosures	30	27
Item 5.	Other Information	30	27
Item 6.	Exhibits	31	27
	Signatures	32	28


	Three Months Ended June 30,						Six Months Ended June 30,
	2023			2022			2023			2022
Revenues
Rooms	$	442		$	433		$	824		$	725
Food and beverage		178			173			359			283
Ancillary hotel		72			70			137			131
Other		22			19			42			35
Total revenues		714			695			1,362			1,174

Operating expenses
Rooms		117			98			224			183
Food and beverage		128			119			255			206
Other departmental and support		165			158			323			291
Other property-level		63			65			123			115
Management fees		34			32			64			54
Impairment and casualty loss		203			1			204			1
Depreciation and amortization		64			68			128			137
Corporate general and administrative		16			16			32			32
Other		22			18			42			34
Total expenses		812			575			1,395			1,053

(Loss) gain on sales of assets, net		—			(1	)		15			(1	)

Operating (loss) income		(98	)		119			(18	)		120

Interest income		10			1			20			1
Interest expense		(61	)		(62	)		(121	)		(124	)
Equity in earnings from investments in affiliates		3			5			7			5
Other gain, net		3			92			4			97

(Loss) income before income taxes		(143	)		155			(108	)		99
Income tax expense		(3	)		(1	)		(5	)		(1	)
Net (loss) income		(146	)		154			(113	)		98
Net income attributable to noncontrolling interests		(4	)		(4	)		(4	)		(5	)
Net (loss) income attributable to stockholders	$	(150	)	$	150		$	(117	)	$	93

(Loss) earnings per share:
(Loss) earnings per share – Basic	$	(0.70	)	$	0.66		$	(0.54	)	$	0.40
(Loss) earnings per share – Diluted	$	(0.70	)	$	0.66		$	(0.54	)	$	0.40

Weighted average shares outstanding – Basic		215			228			217			232
Weighted average shares outstanding – Diluted		215			228			218			232


	Six Months Ended
	June 30,
	2023			2022
Operating Activities:
Net (loss) income	$	(113	)	$	98
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation and amortization		128			137
(Gain) loss on sales of assets, net		(15	)		1
Impairment and casualty loss		204			1
Equity in earnings from investments in affiliates		(7	)		(5	)
Other gain, net		—			(93	)
Share-based compensation expense		9			9
Amortization of deferred financing costs		4			6
Distributions from unconsolidated affiliates		7			6
Changes in operating assets and liabilities		33			31
Net cash provided by operating activities		250			191
Investing Activities:
Capital expenditures for property and equipment		(124	)		(52	)
Acquisitions, net		(11	)		—
Proceeds from asset dispositions, net		116			98
Proceeds from the sale of investments in affiliates, net		3			101
Contributions to unconsolidated affiliates		(4	)		—
Net cash (used in) provided by investing activities		(20	)		147
Financing Activities:
Repayments of credit facilities		(50	)		—
Proceeds from issuance of mortgage debt		—			30
Repayments of mortgage debt		(80	)		(34	)
Debt issuance costs		(1	)		(3	)
Dividends paid		(88	)		(2	)
Distributions to noncontrolling interests, net		(1	)		(4	)
Tax withholdings on share-based compensation		(2	)		(3	)
Repurchase of common stock		(105	)		(218	)
Net cash used in financing activities		(327	)		(234	)
Net (decrease) increase in cash and cash equivalents and restricted cash		(97	)		104
Cash and cash equivalents and restricted cash, beginning of period		939			763
Cash and cash equivalents and restricted cash, end of period	$	842		$	867

Supplemental Disclosures
Non-cash financing activities:
Dividends declared but unpaid	$	32			2


	Common Stock			Additional Paid-in Capital		Retained Earnings (Accumulated Deficit)		Non- controlling Interests		Total
	Shares	Amount
Balance as of December 31, 2022	224	$	2	$	4,321	$	16	$	(48)	$	4,291
Share-based compensation, net	1	—		—		2		—		2
Net income	—	—		—		33		—		33
Dividends and dividend equivalents(1)	—	—		—		(32)		—		(32)
Distributions to noncontrolling interests	—	—		—		—		(1)		(1)
Repurchase of common stock	(9)	—		(105)		—		—		(105)
Balance as of March 31, 2023	216	2		4,216		19		(49)		4,188
Share-based compensation, net	—	—		5		—		—		5
Net (loss) income	—	—		—		(150)		4		(146)
Dividends and dividend equivalents(1)	—	—		—		(34)		—		(34)
Balance as of June 30, 2023	216	2		4,221		(165)		(45)		4,013
Share-based compensation, net	—	—		5		—		—		5
Net income	—	—		—		27		4		31
Dividends and dividend equivalents(1)	—	—		—		(31)		—		(31)
Distributions to noncontrolling interests	—	—		—		—		(3)		(3)
Repurchase of common stock	(6)	—		(75)		—		—		(75)
Balance as of September 30, 2023	210	$	2	$	4,151	$	(169)	$	(44)	$	3,940


	Common Stock			Additional Paid-in Capital		(Accumulated Deficit) Retained Earnings		Non- controlling Interests		Total
	Shares	Amount
Balance as of December 31, 2021	236	$	2	$	4,533	$	(83)	$	(49)	$	4,403
Share-based compensation, net	—	—		1		—		—		1
Net (loss) income	—	—		—		(57)		1		(56)
Dividends and dividend equivalents(2)	—	—		—		(2)		—		(2)
Repurchase of common stock	(3)	—		(61)		—		—		(61)
Balance as of March 31, 2022	233	2		4,473		(142)		(48)		4,285
Share-based compensation, net	—	—		5		—		—		5
Net income	—	—		—		150		4		154
Dividends and dividend equivalents(2)	—	—		—		(2)		—		(2)
Distributions to noncontrolling interests	—	—		—		—		(4)		(4)
Repurchase of common stock	(8)	—		(157)		—		—		(157)
Balance as of June 30, 2022	225	2		4,321		6		(48)		4,281
Share-based compensation, net	—	—		4		—		—		4
Net income	—	—		—		35		5		40
Dividends and dividend equivalents(2)	—	—		—		(3)		—		(3)
Distributions to noncontrolling interests	—	—		—		—		(3)		(3)
Balance as of September 30, 2022	225	$	2	$	4,325	$	38	$	(46)	$	4,319


									Retained
						Additional			Earnings			Non-
	Common Stock					Paid-in			(Accumulated			controlling
	Shares			Amount		Capital			Deficit)			Interests			Total
Balance as of December 31, 2022		224		$	2	$	4,321		$	16		$	(48	)	$	4,291
Share-based compensation, net		1			—		—			2			—			2
Net income		—			—		—			33			—			33
Dividends and dividend equivalents(1)		—			—		—			(32	)		—			(32	)
Distributions to noncontrolling interests		—			—		—			—			(1	)		(1	)
Repurchase of common stock		(9	)		—		(105	)		—			—			(105	)
Balance as of March 31, 2023		216			2		4,216			19			(49	)		4,188
Share-based compensation, net		—			—		5			—			—			5
Net (loss) income		—			—		—			(150	)		4			(146	)
Dividends and dividend equivalents(1)		—			—		—			(34	)		—			(34	)
Balance as of June 30, 2023		216		$	2	$	4,221		$	(165	)	$	(45	)	$	4,013

									(Accumulated
						Additional			Deficit)			Non-
	Common Stock					Paid-in			Retained			controlling
	Shares			Amount		Capital			Earnings			Interests			Total
Balance as of December 31, 2021		236		$	2	$	4,533		$	(83	)	$	(49	)	$	4,403
Share-based compensation, net		—			—		1			—			—			1
Net (loss) income		—			—		—			(57	)		1			(56	)
Dividends and dividend equivalents(1)		—			—		—			(2	)		—			(2	)
Repurchase of common stock		(3	)		—		(61	)		—			—			(61	)
Balance as of March 31, 2022		233			2		4,473			(142	)		(48	)		4,285
Share-based compensation, net					—		5			—			—			5
Net income		—			—		—			150			4			154
Dividends and dividend equivalents(1)		—			—		—			(2	)		—			(2	)
Distributions to noncontrolling interests		—			—		—			—			(4	)		(4	)
Repurchase of common stock		(8	)		—		(157	)		—			—			(157	)
Balance as of June 30, 2022		225		$	2	$	4,321		$	6		$	(48	)	$	4,281


			Principal balance as of
	Interest Rate at September 30, 2023	Maturity Date	September 30, 2023		December 31, 2022

			(in millions)
SF Mortgage Loan(1)	7.11%(2)	November 2023	$	725	$	725
HHV Mortgage Loan(1)	4.20%	November 2026	1,275		1,275
Other mortgage loans(3)	Average rate of 4.37%	2024 to 2027(4)	387		469
Revolver(5)	SOFR + 2.10%	December 2026	—		50
2025 Senior Notes(6)	7.50%	June 2025	650		650
2028 Senior Notes(6)	5.88%	October 2028	725		725
2029 Senior Notes(6)	4.88%	May 2029	750		750
			4,512		4,644
Add: unamortized premium			1		3
Less: unamortized deferred financing costs and discount			(23)		(30)
			$	4,490	$	4,617


			Principal balance as of
	Interest Rate at June 30, 2023	Maturity Date	June 30, 2023			December 31, 2022
			(in millions)
SF Mortgage Loan(1)	7.11%(2)	November 2023	$	725		$	725
HHV Mortgage Loan(1)	4.20%	November 2026		1,275			1,275
Other mortgage loans(3)	Average rate of 4.37%	2023 to 2027(4)		389			469
Revolver(5)	SOFR + 2.10%	December 2026		—			50
2025 Senior Notes(6)	7.50%	June 2025		650			650
2028 Senior Notes(6)	5.88%	October 2028		725			725
2029 Senior Notes(6)	4.88%	May 2029		750			750
				4,514			4,644
Add: unamortized premium				1			3
Less: unamortized deferred financing costs and discount				(25	)		(30	)
			$	4,490		$	4,617


	Number of Shares			Weighted-Average Grant Date Fair Value
Unvested at January 1, 2023		843,846		$	20.19
Granted		674,991			13.44
Vested		(516,518	)		20.67
Forfeited		(7,679	)		15.75
Unvested at June 30, 2023		994,640		$	15.39


	Number of Shares	Weighted-Average Grant Date Fair Value
Unvested at January 1, 2023	843,846	$	20.19
Granted	687,041	13.41
Vested	(530,137)	20.46
Forfeited	(13,251)	15.60
Unvested at September 30, 2023	987,499	$	15.40


	Number of Shares			Weighted-Average Grant Date Fair Value
Unvested at January 1, 2023		1,198,325		$	20.71
Granted		590,425			19.96
Forfeited		(261,554	)		24.80
Unvested at June 30, 2023		1,527,196		$	19.72


	Number of Shares	Weighted-Average Grant Date Fair Value
Unvested at January 1, 2023	1,198,325	$	20.71
Granted	590,425	19.96
Forfeited	(261,554)	24.80
Unvested at September 30, 2023	1,527,196	$	19.72


Year	(in millions)
2023	$	781
2024	7
2025	657
2026	1,563
2027	30
Thereafter(1)	1,474
	$	4,512


			June 30, 2023				December 31, 2022
	Hierarchy Level		Carrying Amount		Fair Value		Carrying Amount		Fair Value
			(in millions)
Liabilities:
SF Mortgage Loan		3	$	725	$	710	$	725	$	692
HHV Mortgage Loan		3		1,275		1,160		1,275		1,142
Other mortgage loans		3		389		364		469		435
Revolver		3		—		—		50		50
2025 Senior Notes		1		650		655		650		652
2028 Senior Notes		1		725		669		725		661
2029 Senior Notes		1		750		648		750		635


Expected volatility	48.0	~~48.0~~	%
Dividend yield(1)	—	—
Risk-free rate	4.3	~~4.3~~	%
Expected term		3 years


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
Total		8,991,021				8,815,500

(State or other jurisdiction of

incorporation or organization)

(I.R.S Employer

Identification No.)

1775 Tysons Boulevard,, 7th Floor,, Tysons,, VA

(Address of principal executive offices)

(Zip Code)