Park Hotels & Resorts Inc.

(unaudited)

Note 1: Organization

Park Hotels & Resorts Inc. (“we,” “us,” “our” or the “Company” and, exclusive of any subsidiaries, “Park Parent”) is a Delaware corporation that owns a portfolio of premium-branded hotels and resorts primarily located in prime city center and resort locations. On January 3, 2017, Hilton Worldwide Holdings Inc. (“Hilton”) completed the spin-off of a portfolio of premium hotels and resorts that established Park Hotels & Resorts Inc. as an independent, publicly traded company. On September 18, 2019, we acquired Chesapeake Lodging Trust.

We are a real estate investment trust (“REIT”) for United States (“U.S.”) federal income tax purposes. We have been organized and operated, and we expect to continue to be organized and operate, in a manner to qualify as a REIT. To qualify as a REIT, we must satisfy requirements related to, among other things, the real estate qualification of sources of our income, the real estate composition and values of our assets, the amounts we distribute to our stockholders annually and the diversity of ownership of our stock. From the date of our spin-off from Hilton, Park Intermediate Holdings LLC (our “Operating Company”), directly or indirectly, has held all our assets and has conducted all of our operations. We are structured as a traditional umbrella partnership REIT (“UPREIT”). Park Parent is the managing member of our Operating Company and PK Domestic REIT Inc., a direct subsidiary of Park Parent, is a member of our Operating Company. We may, in the future, issue interests in (or from) our Operating Company in connection with acquiring hotels, financings, issuance of equity compensation or other purposes.

Note 2: Basis of Presentation and Summary of Significant Accounting Policies

Basis of Presentation

Principles of Consolidation

The unaudited condensed consolidated financial statements reflect our financial position, results of operations and cash flows, in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”). We have condensed or omitted certain information and footnote disclosures normally included in financial statements presented in accordance with U.S. GAAP. In our opinion, the accompanying unaudited condensed consolidated financial statements reflect all adjustments, including normal recurring items, considered necessary for a fair presentation of the interim periods. All significant intercompany transactions and balances within the financial statements have been eliminated.

These financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 2024 included in our Annual Report on Form 10-K, filed with the Securities and Exchange Commission (“SEC”) on February 20, 2025.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Interim results are not necessarily indicative of full year performance.

Summary of Significant Accounting Policies

Our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on February 20, 2025, contains a discussion of significant accounting policies. There have been no significant changes to our significant accounting policies since December 31, 2024.

Recently Issued Accounting Pronouncements

Accounting Standards Not Yet Adopted

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2023-09 (“ASU 2023-09”), Income Taxes (Topic 740) - Improvements to Income Tax Disclosures, which enhances income tax disclosures, including disclosures about the existing rate reconciliation and income taxes paid information. We expect to adopt ASU 2023-09 on a prospective basis when the requirements become effective for the year-ended December 31, 2025. We are currently evaluating the effect that ASU 2023-09 will have on our consolidated financial statements.

In November 2024, the FASB issued ASU No. 2024-03 (“ASU 2024-03”), Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40), which adds guidance on providing qualitative and quantitative disclosures about certain costs and expenses. Although early adoption is permitted, we expect to adopt ASU 2024-03 on a prospective basis when the requirements become effective for the year ended December 31, 2027. We are currently evaluating the effect that ASU 2024-03 will have on our consolidated financial statements.

In September 2025, the FASB issued ASU No. 2025-06 (“ASU 2025-06”), Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40), which better aligns software cost accounting with how software is generally developed. Although early adoption is permitted, we expect to adopt ASU 2025-06 when it becomes effective January 1, 2028 on either a prospective or modified transition approach, which considers the status of software projects that are in progress. We are currently evaluating the effect that ASU 2025-06 will have on our consolidated financial statements.

Note 3: Dispositions

In May 2025, we sold the Hyatt Centric Fisherman’s Wharf for gross proceeds of $80 million. We recognized a net gain of approximately $1 million, which is included ingain on sale of assets, net in our condensed consolidated statements of operations. In addition, we previously recognized an impairment loss for the Hyatt Centric Fisherman’s Wharf, refer to Note 7: “Fair Value Measurements” for additional information.

Additionally, in September 2025, we permanently closed the Embassy Suites Kansas City Plaza and terminated its ground lease, returning the property to the ground lessor.

In July 2024, the unconsolidated joint venture that owned and operated the Hilton La Jolla Torrey Pines sold the hotel for gross proceeds of approximately $165 million, and our pro-rata share of the gross proceeds was approximately $41 million, which was reduced by our portion of debt of approximately $17 million. We recognized a gain of approximately $19 million, which is included inequity in earnings from investments in affiliates in our condensed consolidated statements of operations.

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

Note 4: Property and Equipment

Property and equipment were:

Depreciation of property and equipment was $77 million and $63 million during the three months ended September 30, 2025 and 2024, respectively, and $268 million and $191 million for the nine months ended September 30, 2025 and 2024, respectively. Depreciation expense for the three and nine months ended September 30, 2025 includes accelerated depreciation recognized in connection with renovations at certain of our hotels, including the Royal Palm South Beach Miami, a Tribute Portfolio Resort, which began in May 2025.

Note 5: Consolidated Variable Interest Entities (“VIEs”) and Investments in Affiliates

Consolidated VIEs

We consolidate VIEs that owntwo hotels. We are the primary beneficiary of these VIEs as we have the power to direct the activities that most significantly affect their economic performance. Additionally, we have the obligation to absorb their losses and the right to receive benefits that could be significant to them. The assets of our VIEs are only available to settle the obligations of these entities. Our condensed consolidated balance sheets include the following assets and liabilities of these entities:

Unconsolidated Entities

Three of our hotels are owned by unconsolidated joint ventures in which we hold an interest. These hotels are accounted for using the equity method and had total debt of approximately $684 million and $685 million as of September 30, 2025 and December 31, 2024, respectively. Substantially all the debt is secured solely by the affiliates’ assets or is guaranteed by other partners without recourse to us.

Note 6: Debt

Debt balances and associated interest rates as of September 30, 2025 were:

(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”).

(2)Assumes the exercise of all extensions that are exercisable solely at our option. The mortgage loan for Hilton Denver City Center matures in 2042 but became callable by the lender in August 2022 with six months notice. As of September 30, 2025, we had not received notice from the lender.

(3)Our senior unsecured revolving credit facility (“Revolver”) permitsone or more standby letters of credit, up to a maximum aggregate outstanding balance of $50 million, to be issued on behalf of us. As of September 30, 2025, we had $1 billion of available capacity under our Revolver and no outstanding letters of credit.

(4)As of September 30, 2025, our all-in interest rate for the $200 million senior unsecured term loan (“2024 Term Loan”) was 6.09%.

(5)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 $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 senior notes due 2030 (“2030 Senior Notes”) in May 2024.

Credit Facilities

Revolver, 2024 Term Loan and 2025 Delayed Draw Term Loan

In September 2025, the Company and our Operating Company entered into a Second Amended and Restated Credit Agreement (the “Credit Agreement”) which provides for an increase in the aggregate commitments for the Revolver from $950 million to $1 billion, a new $800 million senior unsecured delayed draw term loan facility (“2025 Delayed Draw Term Loan”), which allows for up tothree draws through September 17, 2026, and the continuation of the 2024 Term Loan. The Credit Agreement extended the Revolver’s maturity date to September 17, 2029, with an option to extend its maturity byone year as either (i) aone-year extension or (ii)two six-month extensions. The 2025 Delayed Draw Term Loan matures on January 2, 2030, with an option to extend its maturity by an additionalone-year period. The maturity date of the 2024 Term Loan remains May 14, 2027.

The Credit Agreement includes the option to increase the Revolver and increase or add new term loans under the Credit Agreement by up to $1 billion in the aggregate, subject to obtaining additional lender commitments and the satisfaction of certain customary conditions. Borrowings under the Revolver, the 2024 Term Loan and the 2025 Delayed Draw Term Loan bear interest based upon the secured overnight financing rate (“SOFR”), plus an applicable margin based on our leverage ratio. The Credit Agreement removed the previous credit spread adjustment on the Revolver and the 2024 Term Loan of 0.10%. We are subject to fees between 0.20% and 0.25% based on unused commitments under the Revolver, as well as a 0.25% ticking fee on the undrawn portion of the 2025 Delayed Draw Term Loan. As of September 30, 2025, there wereno borrowings outstanding under the Revolver or the 2025 Delayed Draw Term Loan.

The Credit Agreement generally maintained the financial covenants under our existing credit agreement, including a maximum leverage ratio, minimum fixed charge coverage ratio, maximum secured leverage ratio, maximum unsecured indebtedness to unencumbered asset value ratio and minimum unencumbered adjusted net operating income to unsecured interest coverage ratio. During the three and nine months ended September 30, 2025, we capitalized $8 million of financing fees incurred related to the Revolver and $8 million related to the 2025 Delayed Draw Term Loan. We will begin amortizing financing fees for the 2025 Delayed Draw Term Loan when drawn upon.

Debt Maturities

The contractual maturities of our debt, excluding debt associated with hotels in receivership, and assuming the exercise of all extensions that are exercisable solely at our option, as of September 30, 2025 were:

Debt Associated with Hotels in Receivership

In June 2023, we ceased making debt service payments towards 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”). The SF Mortgage Loan was due November 2023, and we received a 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. 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 operates and has authority over the Hilton San Francisco Hotels, and also has the ability to sell the hotels. The receiver has executed an agreement to sell the hotels, and the court has approved the transaction with a closing expected by November 21, 2025. If the hotels are not sold to the buyer by November 21, 2025, the receivership will end with a non-judicial foreclosure as soon as permissible under California law.

We derecognized the Hilton San Francisco Hotels from our consolidated balance sheet in October 2023 when the receiver took control of the hotels. During the three and nine months ended September 30, 2025, we recognized a gain of $16 million and $48 million, respectively, and during the three and nine months ended September 30, 2024, we recognized a gain of $15 million and $44 million, respectively, which are included ingain on derecognition of assets in our condensed consolidated statements of operations. The gain represents the accrued interest expense associated with the default of the SF Mortgage Loan, which results in a corresponding increase of thecontract asseton our condensed consolidated balance sheets as we expect to be released from this obligation upon final resolution with the lender on the SF Mortgage Loan, in exchange for the transfer of ownership of the Hilton San Francisco Hotels. As of September 30, 2025 and December 31, 2024, the contract asset on our condensed consolidated balance sheets was $868 million and $820 million, respectively. The SF Mortgage Loan will remain a liability until final resolution with the lender, and thus, is included in debt associated with hotels in receivership on our condensed consolidated balance sheets.

Note 7: Fair Value Measurements

We did not elect the fair value measurement option for our financial assets or liabilities. The fair values of our other financial instruments not included in the table below are estimated to be equal to their carrying amounts.

The fair value of our debt and the hierarchy level we used to estimate fair values are shown below:

The fair value of the SF Mortgage Loan, with a carrying value of $725 million as of both September 30, 2025 and December 31, 2024 and categorized as Level 3 of the fair value hierarchy, was $718 million as of both September 30, 2025 and December 31, 2024. Refer to Note 6: “Debt” for additional information.

During the nine months ended September 30, 2025, we recognized an impairment loss of approximately $70 million related to the Hyatt Centric Fisherman’s Wharf, which was sold in May 2025, due to a change in our intent to hold the hotel and our inability to recover the carrying value of the asset. During the nine months ended September 30, 2024, we recognized an impairment loss 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. The estimated fair value of the assets that were measured on a nonrecurring basis were:

(1)We estimated the fair value of the asset using a discounted cash flow analysis, with an estimated stabilized growth rate of 3%, a discounted cash flow term of 10 years, terminal capitalization rate of 7.3% and a discount rate of 10.0% (Level 3). The discount and terminal capitalization rates used for the fair value of the asset reflect the risk profile of the market where the property is located.

(2)We estimated the fair value of the assets using a discounted cash flow analysis, with an estimated stabilized growth rate range of 2% to 3%, a discounted cash flow term of 10 years, and a discount rate ranging from 17.0% to 20.0% (Level 3). The discount and terminal capitalization rates used for the fair values of the assets reflect the risk profiles of the markets where the properties are located.

Note 8: Income Taxes

We are a REIT for U.S. federal income tax purposes. We have been organized and operated, and we expect to continue to be organized and operate in a manner to qualify as a REIT. To qualify as a REIT, we must satisfy requirements related to, among other things, the real estate qualification of sources of our income, the real estate composition and values of our assets, the amounts we distribute to our stockholders annually and the diversity of ownership of our stock. To 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. Accordingly, no provision for U.S. federal income taxes has been included in our accompanying condensed consolidated financial statements for the three or nine months ended September 30, 2025 and 2024 related to our REIT activities. Our taxable REIT subsidiaries (“TRSs”) are generally subject to U.S. federal, state and local, and foreign income taxes (as applicable).

During the three and nine months ended September 30, 2025, we recognized income tax expense of $6 million and $8 million respectively, which was primarily related to taxable income from our TRSs.

During the three months ended September 30, 2024, we recognized income tax expense of $2 million, which was primarily related to taxable income from our TRSs. During the nine months ended September 30, 2024, we recognized an income tax benefit of $9 million, which was primarily associated with the effective exit from the Hilton San Francisco Hotels and the reversal of $14 million of tax expense that is no longer expected to be incurred.

Note 9: Share-Based Compensation

We issue equity-based awards to our employees pursuant to the 2017 Omnibus Incentive Plan (the “2017 Employee Plan”) and our non-employee directors pursuant to the 2017 Stock Plan for Non-Employee Directors (the “2017 Director Plan”), both of which are amended and restated from time to time. The 2017 Employee Plan provides that a maximum of 14,070,000 shares of our common stock may be issued, and as of September 30, 2025,5,243,921 shares of common stock remain available for future issuance. An amendment and restatement of the 2017 Director Plan was approved by our stockholders in April 2025 to, among other changes, increase the number of shares available to be issued by 875,000, from 950,000 to 1,825,000. As of September 30, 2025,857,428 shares of common stock remain available for future issuance. For both the three months ended September 30, 2025 and 2024, we recognized $5 million of share-based compensation expense and $14 million for both the nine months ended September 30, 2025 and 2024. As of September 30, 2025, unrecognized compensation expense was $23 million, which is expected to be recognized over a weighted-average period of 1.5 years. The total fair value of shares vested (calculated as the number of shares multiplied by the vesting date share price) for the nine months ended September 30, 2025 and 2024 was $12 million and $14 million, respectively.

Stock Awards

Stock awards generally vest in annual installments betweenone andthree years from each grant date. The following table provides a summary of stock awards for the nine months ended September 30, 2025:

Performance Stock Units

Performance Stock Units (“PSUs”) generally vest at the end of athree-year performance period and are subject to the achievement of a market condition based on a measure of our total shareholder return relative to the total shareholder return of the companies that comprise the FTSE Nareit Lodging Resorts Index (that have a market capitalization in excess of $1 billion as of the first day of the applicable performance period). The number of PSUs that may become vested ranges from zero to 200% of the number of PSUs granted to an employee, based on the level of achievement of the foregoing performance measure.

The following table provides a summary of PSUs for the nine months ended September 30, 2025:

The grant date fair values of the awards that are subject to the achievement of market conditions based on total shareholder return were determined using a Monte Carlo simulation valuation model with the following assumptions:

(1)Estimated using a blended approach of historical and implied volatility. Historical volatility is based on the historical movement of the Company’s stock price for a period that corresponds to the expected terms of the PSUs.

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

(3)Based on the yields of U.S. Department of Treasury instruments with similar expected terms of the PSUs at the grant date of each award.

Note 10: Earnings Per Share

The following table presents the calculation of basic and diluted earnings per share (“EPS”):

(1)Per share amounts are calculated based on unrounded numbers and are calculated independently for each period presented.

Certain of our outstanding equity awards were excluded from the above calculation of EPS for the three and nine months ended September 30, 2025 and 2024 because their effect would have been anti-dilutive.

Note 11: Business Segment Information

As of September 30, 2025, we havetwo 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 operating segment is our only reportable segment. Our Chief Operating Decision Maker (the “CODM”), who is our chief executive officer, evaluates our consolidated hotels primarily based on hotel adjusted earnings (loss) before interest income and expense, taxes and depreciation and amortization (“EBITDA”) when deciding how to allocate resources, in making other day-to-day operating decisions and evaluating our operating performance against other companies within our industry.

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 the CODM’s analysis:

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

•Impairment losses and casualty gains or losses; and

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

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

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

Note 12: Commitments and Contingencies

As of September 30, 2025, we had outstanding commitments under third-party contracts of approximately $128 million for capital expenditures at our properties, of which $25 million relates to the transformative renovation at the Royal Palm South Beach Miami, a Tribute Portfolio Resort, $21 million relates to guestroom renovations at the Hilton Hawaiian Village Waikiki Beach Resort, $15 million relates to guestroom renovations at the Hilton Waikoloa Village, and $9 million relates to guestroom renovations at the Hilton New Orleans Riverside. 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 million as of September 30, 2025 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.