Park Hotels & Resorts Inc. (NYSE:PK) Q4 2020 Earnings Conference Call February 26, 2021 ET Company Participants Ian Weissman - Senior Vice President Corporate Strategy Tom Baltimore - Chairman & Chief Executive Officer Sean Dell'Orto - Chief Financial Officer Conference Call Participants David Katz - Jefferies Smedes Rose - Citi Dany Asad - Bank of America Rich Hightower - Evercore Anthony Powell - Barclays Bill Crow - Raymond James Neil Malkin - Capital One Securities Brandt Montour - JPMorgan Stephen Gr ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___ to ___ Commission File Number 001-37795 Park Hotels & Resorts Inc. (Exact name of Registrant as specified in its Charter) Delaware 36-2058176 (State or other j ...

Fourth Quarter and Year End 2020 Supplemental Data | --- | --- | --- | --- | --- | --- | --- | |---------------------------------------------------|---------------------------------------|-------|-------|----------------------------------------------|-------|-------| | | | | | | | | | | | | | | | | | | DECEMBER 31, 2020 | | | | | | | | | | | | | | | Royal Palm South Beach Miami, a Tribute Portfolio | Parc 55 San Francisco, a Hilton Hotel | | | Hilton Hawaiian Village Waikiki Beach Resort | | | About Park an ...

Company Overview - Park Hotels & Resorts owns a portfolio of 60 premium-branded hotels and resorts with over 33,000 rooms[13] - The company's net debt was $4.2 billion as of September 30, 2020[19] - The company has $1.6 billion of liquidity, with a $50 million monthly burn rate, equating to 32 months of liquidity runway[19] - The company trades at a 63% discount to replacement cost[22] Operational Update - 49 of the company's 60 hotels are currently open[22, 32] - The company's October occupancy rate was 43%[22, 36] - 12 hotels achieved break-even EBITDA in Q3 2020[22, 32] Financial Performance - The company's Core 30 RevPAR in 2019 was $204, which is $20 higher than peers[19, 43] - The company's Core 30 EBITDA/Key in 2019 was $35,500, which is 14% above peers[19, 43] - The company expects $70 million in annual savings from permanent reduction of full-time, hotel-level staffing[32, 47] COVID-19 Impact and Response - The company suspended operations at 38 of 60 hotels and reduced expenses by over 75% at the outset of the crisis[34] - The company issued $650 million of 5-year senior secured notes and $725 million of 8-year senior secured notes to pay down over $1 billion of debt[34] Portfolio Transformation - The company sold or disposed of 24 lower quality, non-core legacy assets since January 2017[30] - The company's comparable RevPAR increased by 16% from $161 in 2016 to $186 in 2019[30] - The company's comparable Hotel Adjusted EBITDA Margins increased by 180bps from 27.7% in 2016 to 29.5% in 2019[30]

Park Hotels & Resorts Inc. (NYSE:PK) Q3 2020 Earnings Conference Call November 6, 2020 11:00 AM ET Company Participants Ian Weissman - Senior Vice President, Corporate Strategy Tom Baltimore - Chairman & Chief Executive Officer Sean Dell'Orto - Chief Financial Officer Conference Call Participants David Katz - Jefferies Rich Hightower - Evercore Anthony Powell - Barclays Aryeh Klein - BMO Capital Markets Dori Kesten - Wells Fargo Neil Malkin - Capital One Securities Brandt Montour - JPMorgan Chris Woronka - ...

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 001-37795 ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 UNITED STATES SECURITIES AND EXCHANGE COMMISSION For the quarterly period ended September 30, 2020 Washington, D.C. 20549 OR FORM 10-Q (Mark One) Park Hotels & Resorts Inc. (Exact name of Registrant as specified in its Charter) (State or other jurisdiction of inco ...

Financial Performance & Liquidity - Park Hotels & Resorts reported a net loss attributable to stockholders of $(276) million for the three months ended September 30, 2020, and $(1,223) million for the nine months ended September 30, 2020[16] - The company's pro-forma Hotel Adjusted EBITDA for the three months ended September 30, 2020, was $(76) million, compared to $217 million for the same period in 2019, a significant decrease[26] - Pro-forma Hotel Revenues decreased by 875% from $750 million to $95 million for the three months ended September 30, 2020, compared to the same period in 2019[27] - As of September 30, 2020, Park Hotels & Resorts had approximately $16 billion in liquidity and estimates a monthly burn rate of roughly $50 million, providing over two and a half years of available funds to meet financial obligations[84] Portfolio & Operating Metrics - As of November 5, 2020, Park's portfolio consisted of 60 hotels with 33,228 rooms [4] - Pro-forma RevPAR for all markets in Q3 2020 was $2614, a decrease of 861% compared to $18793 in Q3 2019 [53] - Pro-forma Occupancy for all markets in Q3 2020 was 191%, a decrease of 656 percentage points compared to 847% in Q3 2019 [53] Capital Structure - As of September 30, 2020, the company's total debt was $5121 million [14] - The company has $3856 million in fixed-rate debt with a weighted average interest rate of 506% [80] - The company has $1301 million in variable-rate debt with a weighted average interest rate of 308% [80]

Second Quarter 2020 | --- | --- | --- | --- | --- | --- | |-------|-------------------|-------|-------|-------|-------| | | | | | | | | | Supplemental Data | | | | | About Park and Safe Harbor Disclosure About Park Hotels & Resorts Inc. Park (NYSE: PK) is the second largest publicly-traded lodging real estate company with a diverse portfolio of market-leading hotels and resorts with significant underlying real estate value. Park's portfolio consists of 60 premium-branded hotels and resorts with over 33,000 ...

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) The unaudited condensed consolidated financial statements for the period ended June 30, 2020, reflect a severe negative impact from the COVID-19 pandemic, showing a significant decline in revenues, a shift from net income to a substantial net loss, negative operating cash flow, and a weakened balance sheet primarily due to a large goodwill impairment and increased debt from drawing on credit facilities to bolster liquidity [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Condensed Consolidated Balance Sheets (in millions) | Account | June 30, 2020 | December 31, 2019 | Change | | :--- | :--- | :--- | :--- | | **Assets** | | | | | Cash and cash equivalents | $1,274 | $346 | +$928 | | Goodwill | $0 | $607 | -$607 | | Total Assets | $11,059 | $11,290 | -$231 | | **Liabilities & Equity** | | | | | Debt | $5,118 | $3,871 | +$1,247 | | Total Liabilities | $5,733 | $4,839 | +$894 | | Retained Earnings | $871 | $1,922 | -$1,051 | | Total Equity | $5,326 | $6,451 | -$1,125 | - The balance sheet as of June 30, 2020, shows a significant increase in cash and debt, primarily due to drawing on credit facilities to enhance liquidity amidst the pandemic[12](index=12&type=chunk) - Concurrently, total equity decreased substantially, driven by a large net loss which included the complete impairment of goodwill[12](index=12&type=chunk) [Condensed Consolidated Statements of Comprehensive (Loss) Income](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20(Loss)%20Income) Condensed Consolidated Statements of Comprehensive (Loss) Income (in millions) | Metric | Three Months Ended June 30, 2020 | Three Months Ended June 30, 2019 | Six Months Ended June 30, 2020 | Six Months Ended June 30, 2019 | | :--- | :--- | :--- | :--- | :--- | | Total Revenues | $42 | $703 | $641 | $1,362 | | Impairment Loss | $0 | $0 | $694 | $0 | | Operating (Loss) Income | ($200) | $111 | ($837) | $240 | | Net (Loss) Income Attributable to Stockholders | ($259) | $82 | ($947) | $178 | | (Loss) Earnings Per Share - Diluted | ($1.10) | $0.40 | ($4.01) | $0.88 | - Revenues for Q2 2020 plummeted to **$42 million** from **$703 million** in Q2 2019, a decrease of over **94%**, leading to a net loss of **$259 million**[14](index=14&type=chunk) - For the first six months of 2020, the company recorded a net loss of **$947 million**, heavily impacted by a **$694 million** impairment charge[14](index=14&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Condensed Consolidated Statements of Cash Flows (Six Months Ended June 30, in millions) | Cash Flow Activity | 2020 | 2019 | | :--- | :--- | :--- | | Net cash (used in) provided by operating activities | ($158) | $244 | | Net cash provided by investing activities | $150 | $111 | | Net cash provided by (used in) financing activities | $931 | ($300) | - For the first six months of 2020, cash flow from operations turned negative at **-$158 million**, a stark contrast to the **$244 million** provided in the same period of 2019[16](index=16&type=chunk) - A significant net cash inflow of **$931 million** from financing activities, driven by **$1 billion** in borrowings on the Revolver and **$652 million** from Senior Secured Notes, was used to bolster liquidity[16](index=16&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) - The COVID-19 pandemic severely impacted operations, leading to the temporary suspension of **38 of 60 hotels**, a significant decline in occupancy and RevPAR, and a drop in operating cash flow[26](index=26&type=chunk)[27](index=27&type=chunk) - To mitigate the effects of the pandemic, the company drew down its **$1 billion** revolving credit facility, issued **$650 million** in Senior Secured Notes, suspended dividends after Q1 2020, and deferred approximately **$150 million** in planned capital expenditures[27](index=27&type=chunk)[28](index=28&type=chunk) - The company fully impaired its remaining goodwill balance of **$607 million** in Q1 2020 due to the adverse effects of COVID-19 on its business[50](index=50&type=chunk)[51](index=51&type=chunk) - In May 2020, credit and term loan facilities were amended to suspend compliance with all existing financial covenants through March 31, 2021, and to extend the Revolver's maturity to December 2021[27](index=27&type=chunk)[56](index=56&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=19&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management's discussion attributes the significant downturn in financial performance directly to the COVID-19 pandemic, which caused an unprecedented decline in lodging demand, occupancy, and RevPAR, detailing its response including suspending hotel operations, aggressive cost-saving measures, and significant financing activities to preserve liquidity, highlighting a monthly cash burn estimate of approximately **$65 million** under a full suspension scenario and confirming the suspension of dividends and stock repurchases to conserve capital [COVID-19 Effect on Business](index=20&type=section&id=COVID-19%20Effect%20on%20Business) - The company experienced a significant decline in occupancy, ADR, and RevPAR since March 2020 due to the COVID-19 pandemic, with RevPAR dropping by as much as **97.6%** in April 2020 compared to the prior year[90](index=90&type=chunk) Pro-forma RevPAR Change (YoY) | Month (2020) | Pro-forma RevPAR Change (YoY) | | :--- | :--- | | March | (63.8)% | | April | (97.6)% | | May | (97.3)% | | June | (93.0)% | - In response to the pandemic, the company suspended operations at **38 of its 60 hotels**, deferred approximately **$150 million** in capital expenditures, suspended dividends after Q1 2020, and drew down its **$1 billion** revolver[91](index=91&type=chunk) - As of August 5, 2020, operations remained suspended at **16 consolidated hotels** (**13,963 rooms**) and **2 unconsolidated hotels** (**1,740 rooms**)[93](index=93&type=chunk) [Results of Operations](index=25&type=section&id=Results%20of%20Operations) - The decline in hotel revenues and operating expenses was primarily driven by the effects of COVID-19, which overshadowed the impacts of property acquisitions and dispositions[115](index=115&type=chunk)[116](index=116&type=chunk)[117](index=117&type=chunk) - For Q2 2020, the change from "Other Factors," primarily COVID-19, accounted for a **$395 million** decrease in rooms revenue and a **$187 million** decrease in food and beverage revenue[116](index=116&type=chunk) - A net impairment loss of **$694 million** was recognized in the first six months of 2020, consisting of **$607 million** for goodwill and **$88 million** for a hotel property, due to the economic impact of COVID-19[122](index=122&type=chunk) - Interest expense increased by **51.5%** in Q2 2020 and **38.5%** in H1 2020 compared to the prior year, driven by borrowings under the 2019 Term Facility, the Revolver, and the new Senior Secured Notes[125](index=125&type=chunk)[127](index=127&type=chunk) [Liquidity and Capital Resources](index=28&type=section&id=Liquidity%20and%20Capital%20Resources) - As of June 30, 2020, the company had approximately **$1.3 billion** in cash and cash equivalents, significantly bolstered by drawing **$1 billion** from its Revolver and issuing **$650 million** of Senior Secured Notes[129](index=129&type=chunk)[130](index=130&type=chunk) - The company estimates an average monthly cash burn of approximately **$65 million** if all **60 hotels** were to have suspended operations from August to December 2020[131](index=131&type=chunk) - Based on this, management believes it has sufficient liquidity to withstand a full suspension for **two years**[131](index=131&type=chunk) - The quarterly dividend was suspended after the Q1 2020 payment of **$0.45 per share** as a precautionary measure to preserve cash[144](index=144&type=chunk)[145](index=145&type=chunk) - During Q1 2020, the company repurchased **4.6 million shares** for **$66 million**[137](index=137&type=chunk) - No shares were repurchased in Q2 2020, and the program is effectively suspended due to restrictions in amended credit facilities[137](index=137&type=chunk) [Non-GAAP Financial Measures](index=22&type=section&id=Non-GAAP%20Financial%20Measures) Non-GAAP Financial Measures (in millions) | Metric | Three Months Ended June 30, 2020 | Three Months Ended June 30, 2019 | | :--- | :--- | :--- | | Net (Loss) Income | ($261) | $84 | | Adjusted EBITDA | ($122) | $207 | | Hotel Adjusted EBITDA | ($108) | $209 | Non-GAAP Financial Measures (in millions) | Metric | Three Months Ended June 30, 2020 | Three Months Ended June 30, 2019 | | :--- | :--- | :--- | | Nareit FFO attributable to stockholders | ($184) | $156 | | Adjusted FFO attributable to stockholders | ($175) | $164 | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=31&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is primarily exposed to market risk from changes in interest rates, which can affect future income, cash flows, and the fair value of its financial instruments, and may use hedging arrangements to mitigate some of this risk but remains exposed to unhedged portions - The primary market risk exposure is from changes in interest rates, which can impact future income and cash flows[149](index=149&type=chunk) [Item 4. Controls and Procedures](index=31&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures and concluded they were effective as of June 30, 2020, with no material changes to the company's internal control over financial reporting during the most recent fiscal quarter - As of June 30, 2020, the company's management concluded that its disclosure controls and procedures were effective[150](index=150&type=chunk) - No material changes were made to the internal control over financial reporting during the second quarter of 2020[151](index=151&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=32&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various claims and lawsuits arising in the ordinary course of business, which management believes are either covered by insurance or adequately reserved for, and does not expect them to have a material adverse effect on the company's financial position, results, or liquidity - The company is involved in ordinary course litigation but does not anticipate a material adverse effect on its financial condition from these proceedings[154](index=154&type=chunk) [Item 1A. Risk Factors](index=32&type=section&id=Item%201A.%20Risk%20Factors) This section highlights that the COVID-19 pandemic has significantly and adversely impacted, and is expected to continue to disrupt, the company's business, financial performance, and cash flows, causing an unprecedented reduction in global lodging demand, leading to historically low occupancy levels, temporary hotel closures, and significant cancellations, and has also caused severe disruptions in the U.S. and global economies, which could constrain the company's liquidity and access to capital - The COVID-19 pandemic is identified as a primary risk factor, having caused a significant decline in occupancy and RevPAR, leading to the temporary suspension of operations at numerous properties[156](index=156&type=chunk)[158](index=158&type=chunk) - The pandemic has triggered a global recession and disrupted financial markets, which could constrain the company's access to capital and make future financing more difficult or costly[157](index=157&type=chunk)[162](index=162&type=chunk) - A prolonged economic recession could result in significantly below-average lodging demand even after the pandemic subsides and government restrictions are lifted[165](index=165&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=34&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company did not have any unregistered sales of equity securities, and under its stock repurchase program, no shares were repurchased during the three months ended June 30, 2020, though repurchases were made in the first quarter, and approximately **$234 million** remained available under the program as of June 30, 2020, however, amendments to credit facilities impose restrictions on future repurchases Stock Repurchase Program Details (in millions) | Period | Total Shares Purchased | Weighted Average Price Paid Per Share | Shares Purchased as Part of Program | Approx. Dollar Value Remaining in Program | | :--- | :--- | :--- | :--- | :--- | | Jan 2020 | 9,248 | $22.99 | — | $300 | | Feb 2020 | 75,032 | $23.57 | — | $300 | | Mar 2020 | 4,557,446 | $14.48 | 4,550,882 | $234 | | Q2 2020 | 2,321 | Various | — | $234 | - The company repurchased over **4.5 million shares** in March 2020 but suspended repurchases in the second quarter[168](index=168&type=chunk)[170](index=170&type=chunk) - The ability to repurchase stock is now restricted by covenants in its amended credit facilities[168](index=168&type=chunk)[170](index=170&type=chunk) [Item 3. Defaults Upon Senior Securities](index=35&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) Not applicable, as the company reported no defaults upon senior securities - Not applicable[172](index=172&type=chunk) [Item 4. Mine Safety Disclosures](index=35&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) Not applicable - Not applicable[173](index=173&type=chunk) [Item 5. Other Information](index=35&type=section&id=Item%205.%20Other%20Information) None - None[174](index=174&type=chunk) [Item 6. Exhibits](index=36&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including agreements related to the company's formation, mergers, debt indentures, credit facility amendments, and officer certifications as required by the Sarbanes-Oxley Act - Key exhibits filed include the Indenture for the Senior Secured Notes issued in May 2020 and amendments to the company's credit agreements, also from May 2020[176](index=176&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 001-37795 Park Hotels & Resorts Inc. (Exact name of Registrant as specified in its Charter) (State or other jurisdiction of incorpor ...