Group 1 - Pearl Gray is a proprietary investment fund and independent market research firm specializing in systematic analysis, focusing primarily on Bonds, Preferreds, and REITs, with a primary emphasis on the Financials and Real Estate sectors [1] - The mission of Pearl Gray is to discover actionable total return ideas at the intersection of rigorous academic theories, practical experience, and common sense [1] Group 2 - The content published by Pearl Gray is intended as independent analysis and does not constitute financial advice [1][3] - The firm encourages readers to consult a registered financial advisor before making investment decisions [3]

Core Insights - Park Hotels & Resorts, Inc. has sold the 316-room Hyatt Centric Fisherman's Wharf in San Francisco for $80 million, reflecting a multiple of 64.0 times the hotel's 2024 EBITDA [1] - The company aims to dispose of $300 million to $400 million of non-core hotel assets by 2025, enhancing its portfolio quality and financial flexibility [2] - Since 2017, Park Hotels has sold 46 hotels for over $3 billion, focusing on capital allocation to unlock value and improve shareholder returns [3] Financial Performance - The recent sale proceeds will be used for ongoing ROI projects and general corporate purposes [1] - Over the past three months, Park Hotels' shares have declined by 17.3%, compared to a 2.5% decline in the industry [4] Strategic Focus - The company emphasizes prudent capital management and aims to optimize the use of proceeds from asset dispositions [4] - Park Hotels is focused on development activities to enhance long-term growth [4]

Core Insights - During market turbulence, investors often seek dividend-yielding stocks, which typically have high free cash flows and offer substantial dividends [1] Group 1: Company Ratings and Analyst Insights - OUTFRONT Media Inc. has a dividend yield of 8.00%. Morgan Stanley analyst Benjamin Swinburne maintained an Equal-Weight rating and reduced the price target from $18 to $17, with an accuracy rate of 77%. TD Cowen analyst Lance Vitanza initiated coverage with a Hold rating and a price target of $16, having an accuracy rate of 75%. Recent news indicated worse-than-expected first-quarter financial results [7] - Healthcare Realty Trust Incorporated has a dividend yield of 8.08%. Wedbush analyst Richard Anderson maintained a Neutral rating and cut the price target from $18 to $16, with an accuracy rate of 62%. Wells Fargo analyst James Feldman assumed coverage with an Underweight rating and raised the price target from $16 to $17, having an accuracy rate of 61%. Recent news showed downbeat quarterly sales results [7] - Park Hotels & Resorts Inc. has a dividend yield of 9.63%. Morgan Stanley analyst Stephen Grambling maintained an Equal-Weight rating and reduced the price target from $12 to $10, with an accuracy rate of 63%. Truist Securities analyst Patrick Scholes maintained a Buy rating and cut the price target from $18 to $16, having an accuracy rate of 65%. Recent news reported better-than-expected quarterly results [7]

Table of Contents 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, 2025 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 _______________________ ...

Financial Data and Key Metrics Changes - The company reported Q1 RevPAR of $178, representing a modest 70 basis point decline year-over-year, primarily due to difficult comparisons from last year's nearly 8% growth [19][22] - Total hotel revenues for the quarter were $608 million, with hotel adjusted EBITDA at $151 million, resulting in a nearly 25% hotel adjusted EBITDA margin [20][21] - Adjusted EBITDA for the quarter was $144 million, and adjusted FFO per share was $0.46 [21] Business Line Data and Key Metrics Changes - The Bonnet Creek complex in Orlando saw a 32% RevPAR increase, driven by a surge in transient revenues of nearly 65% [12] - Casa Marina in Key West reported a 12% RevPAR increase, despite tough comparisons from last year [13] - RevPAR across the two Hawaii properties declined by 15% during the quarter, with the Hilton Hawaiian Village being a significant drag on overall results [14] Market Data and Key Metrics Changes - Miami, New Orleans, Puerto Rico, Washington DC, and San Francisco reported above industry average RevPAR gains [8] - Preliminary April results showed mixed performance, with RevPAR growth of 1.6%, driven by strong gains in New York, Orlando, and San Francisco [16] - International demand represents just 10% of total room nights, with government-related business accounting for only 3% [17] Company Strategy and Development Direction - The company plans to invest $310 million to $330 million in capital improvements in 2025, focusing on unlocking embedded value in its portfolio [10] - A transformative renovation of the Royal Palm South Beach is set to begin, with expected returns exceeding 15% to 20% [9] - The company aims to sell $300 million to $400 million of non-core hotels this year to further deleverage the balance sheet [11] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding the recovery of the Hilton Hawaiian Village, expecting mid-single-digit RevPAR growth in Q3 [31] - The near-term outlook for US lodging fundamentals remains uncertain due to ongoing global trade tensions [16] - Despite macro uncertainties, the company remains focused on factors within its control and is working closely with operators to manage expenses [17] Other Important Information - The company repurchased approximately 3.5 million shares for a total of $45 million during the quarter [11] - A $70 million impairment was recognized during the quarter related to an asset, though specific details were not disclosed [77][78] Q&A Session Summary Question: Comments on planned asset sales and current market conditions - Management acknowledged tremendous uncertainty in the market due to geopolitical factors but expressed confidence in their ability to transact even under challenging conditions [27][28] Question: Insights on Hawaii's performance and recovery - Management indicated that the ramp-up post-strike is taking longer than expected, but they remain confident in Hawaii's long-term growth potential [32][33] Question: Update on core hotel portfolio and asset sales - The company is focusing on its top 20 core assets, which account for 85-90% of the company's value, while working to sell non-core assets [38][39] Question: CapEx plans and timing for Miami renovations - Management confirmed that they have secured necessary permits and are on track to complete renovations before the World Cup next year [43] Question: Market performance expectations for 2025 - Management expects strong performance in Orlando and Key West, with positive outlooks for New York and Denver as well [50][51] Question: Group pace and transient demand trends - Management noted that group bookings remain solid, while transient demand is showing some softness, particularly in international travel [108]

Core Insights - Park Hotels & Resorts reported $630 million in revenue for Q1 2025, a year-over-year decline of 1.4%, but exceeded the Zacks Consensus Estimate by 2.49% [1] - The company achieved an EPS of $0.46, up from $0.25 a year ago, representing a surprise of 12.20% over the consensus estimate of $0.41 [1] Financial Performance Metrics - Comparable RevPAR growth was -0.7%, better than the estimated -1.6% [4] - Other revenues reached $22 million, exceeding the estimate of $21.23 million, marking a 4.8% increase year-over-year [4] - Ancillary hotel revenues were $63 million, surpassing the estimate of $57.87 million, with a year-over-year change of 1.6% [4] - Food and beverage revenues stood at $182 million, slightly above the estimate of $177.61 million, with no change year-over-year [4] - Room revenues totaled $363 million, compared to the estimate of $354.98 million, reflecting a year-over-year decline of 2.9% [4] - Diluted EPS was reported at -$0.29, significantly below the estimate of $0.03 [4] Stock Performance - Shares of Park Hotels & Resorts have returned +9.6% over the past month, outperforming the Zacks S&P 500 composite's +0.4% change [3] - The stock currently holds a Zacks Rank 5 (Strong Sell), indicating potential underperformance in the near term [3]

Financial Data and Key Metrics Changes - The company reported Q1 RevPAR of $178, reflecting a modest 70 basis point decline year-over-year, primarily due to difficult comparisons following last year's nearly 8% growth [18] - Total hotel revenues for the quarter were $608 million, with hotel adjusted EBITDA at $151 million, resulting in a nearly 25% hotel adjusted EBITDA margin [18] - Adjusted EBITDA for the quarter was $144 million, and adjusted FFO per share was $0.46 [19] Business Line Data and Key Metrics Changes - The Bonnet Creek complex in Orlando saw a 32% RevPAR increase, driven by a surge in transient revenues of nearly 65% [10] - Casa Marina in Key West delivered a 12% RevPAR increase, with occupancy up 680 basis points [11] - RevPAR across the two Hawaii properties declined by 15%, with Hilton Hawaiian Village significantly impacted by a labor strike [12] Market Data and Key Metrics Changes - Miami, New Orleans, Puerto Rico, Washington DC, and San Francisco reported above industry average RevPAR gains [5] - Preliminary April results showed mixed performance, with RevPAR growth of 1.6%, driven by strong gains in New York, Orlando, and San Francisco [15] - International demand represents just 10% of total room nights, with government-related business accounting for only 3% [16] Company Strategy and Development Direction - The company plans to invest $310 million to $330 million in capital improvements in 2025, focusing on unlocking embedded value in its portfolio [8] - A transformative renovation of the Royal Palm South Beach, Miami, is set to begin soon, with expected returns exceeding 15% to 20% [6] - The company aims to sell $300 million to $400 million of non-core hotels this year, with several assets in various stages of marketing [9] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding the ongoing geopolitical uncertainties and their impact on decision-making in the market [26] - The outlook for Hawaii remains favorable, supported by limited new supply expected through at least 2029 [14] - Despite macro uncertainties, the company remains focused on factors within its control and is working closely with operators to manage operating expenses [16] Other Important Information - The company repurchased approximately 3.5 million shares for a total of $45 million during the quarter [9] - A $70 million impairment was recognized in the quarter, related to an asset whose true value was reassessed [75] Q&A Session Summary Question: Comments on planned asset sales and current market environment - Management acknowledged tremendous uncertainty in the market due to geopolitical issues and trade wars, but expressed confidence in their ability to transact even under challenging conditions [26][27] Question: Update on Hawaii's performance and ramp-up post-strike - Management noted that the ramp-up is taking longer than expected, with sequential improvement anticipated, and expressed confidence in Hawaii's long-term growth potential [30][31] Question: Changes in core hotels and capital allocation - The company has focused on trimming its portfolio to core assets that account for 85-90% of its value, with plans to recycle capital from non-core asset sales [35][36] Question: Group pace and market performance expectations - Management indicated that group pace is slightly down for Q2 and Q3 but remains strong for Q4, with confidence in the overall bookings for the year [60][61] Question: Performance of Hilton Hawaiian Village and EBITDA expectations - Management stated that while it is challenging to predict if EBITDA will exceed last year's performance, they remain bullish on Hawaii's long-term outlook [73][74]

FIRST QUARTER 2025 SUPPLEMENTAL DATA MARCH 31, 2025 ABOUT PARK AND SAFE HARBOR DISCLOSURE About Park Hotels & Resorts Inc. Park (NYSE: PK) is one of the largest publicly-traded lodging real estate investment trusts ("REIT") with a diverse portfolio of iconic and market-leading hotels and resorts with significant underlying real estate value. Park's portfolio currently consists of 40 premium-branded hotels and resorts with approximately 25,000 rooms primarily located in prime city center and resort locations ...

Core Viewpoint - Park Hotels & Resorts reported quarterly funds from operations (FFO) of $0.46 per share, exceeding the Zacks Consensus Estimate of $0.41 per share, but down from $0.52 per share a year ago, indicating a 12.20% surprise [1][2] Financial Performance - The company achieved revenues of $630 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 2.49%, although this is a decrease from $639 million in the same quarter last year [2] - Over the last four quarters, Park Hotels & Resorts has exceeded consensus FFO estimates two times and revenue estimates two times [2] Stock Performance and Outlook - Park Hotels & Resorts shares have declined approximately 27.1% since the beginning of the year, compared to a 3.3% decline in the S&P 500 [3] - The current consensus FFO estimate for the upcoming quarter is $0.58 on revenues of $681.84 million, and for the current fiscal year, it is $1.93 on revenues of $2.6 billion [7] Industry Context - The REIT and Equity Trust - Other industry, to which Park Hotels & Resorts belongs, is currently ranked in the bottom 37% of over 250 Zacks industries, suggesting potential challenges for stock performance [8]

Financial Performance - Total revenues for Q1 2025 were $630 million, a decrease of 1.4% compared to $639 million in Q1 2024[14] - Operating income fell significantly to $7 million, down 92.6% from $92 million in the same period last year[14] - Net loss attributable to stockholders was $57 million, compared to a net income of $28 million in Q1 2024, resulting in a loss per share of $0.29[16][25] - Adjusted EBITDA for Q1 2025 was $144 million, a decline of 11.1% from $162 million in Q1 2024[21] - Adjusted FFO attributable to stockholders for Q1 2025 was $92 million, down from $111 million in Q1 2024, representing a decrease of 17.1%[27] - Nareit FFO per share – Diluted for Q1 2025 was $0.33, compared to $0.40 in Q1 2024, a decline of 17.5%[27] - Comparable Hotel Adjusted EBITDA decreased to $151 million, down 10.4% from $169 million in the prior year[23] - Comparable total revenue per available room (Total RevPAR) for Q1 2025 was $297.30, reflecting a 0.5% increase from Q1 2024[50] - Total Comparable Hotel Revenue for Q1 2025 was $608 million, slightly down by 0.5% compared to $610 million in Q1 2024[51] - Comparable Hotel Adjusted EBITDA for Q1 2025 was $151 million, a decrease of 10.4% from $169 million in Q1 2024[51] Balance Sheet and Debt - The company reported a total asset value of $8.901 billion as of March 31, 2025, down from $9.161 billion at the end of 2024[13] - Total liabilities stood at $5.465 billion, a slight decrease from $5.567 billion at the end of 2024[13] - The company has $725 million in debt associated with hotels currently in receivership[5] - Cash and cash equivalents decreased to $233 million from $402 million at the end of 2024[13] - Net Debt as of March 31, 2025, increased to $3,760 million from $3,582 million as of December 31, 2024, reflecting a rise of 5%[30] - The Net Debt to TTM Comparable Adjusted EBITDA ratio as of March 31, 2025, was 5.95x, up from 5.52x at the end of 2024[30] - Total fixed rate debt as of March 31, 2025, was $3.66 billion, with a weighted average interest rate of 5.11%[80] - The company has $950 million of available capacity under the Revolver with no outstanding letters of credit as of May 5, 2025[82] Future Outlook - Full-year 2025 Comparable RevPAR is projected to range from $185 to $191, with a midpoint change of -2% compared to 2024[34] - Full-year 2025 Adjusted FFO per share – Diluted is expected to be between $1.79 and $2.09, indicating a potential decrease of $0.11 from previous estimates[34] - Total Revenues for the year ending December 31, 2025, are forecasted to be between $2,569 million and $2,643 million[38] - Comparable Hotel Adjusted EBITDA for 2025 is anticipated to range from $633 million to $692 million, reflecting a margin of 25.6% to 27.2%[38] - The company expects a net (loss) income attributable to stockholders for 2025 to range from $(16) million to $44 million[39] - The outlook for 2025 is influenced by macroeconomic factors, including inflation and potential changes in interest rates, which are outside the company's control[35] Hotel Operations Metrics - Comparable average daily rate (ADR) for Q1 2025 was $256.62, representing a 2.3% increase from Q1 2024[48] - Comparable occupancy rate for Q1 2025 was 69.2%, a decrease of 2.1 percentage points compared to Q1 2024[50] - Comparable revenue per available room (RevPAR) for Q1 2025 was $177.67, a slight decrease of 0.7% from Q1 2024[50] - In Hawaii, the comparable ADR decreased by 2.4% to $303.66, with occupancy at 78.4%[48] - In Orlando, the comparable ADR increased by 4.0% to $295.00, with occupancy rising to 79.9%[48] - The average daily rate (ADR) for Core Hotels increased by 3.3% to $287.54 in Q1 2025 from $278.45 in Q1 2024[53] - Occupancy rates for Core Hotels decreased by 2.8 percentage points to 72.2% in Q1 2025 compared to 75.0% in Q1 2024[53] - RevPAR for Core Hotels remained relatively stable, decreasing by 0.5% to $207.50 in Q1 2025 from $208.63 in Q1 2024[53] - The total revenue per available room (Total RevPAR) for Core Hotels increased by 0.7% to $353.48 in Q1 2025 from $350.87 in Q1 2024[53] Acquisitions and Dispositions - The company sold two hotels in 2024, generating gross proceeds of $76.3 million[67] - Total sales from hotel dispositions since 2018 amounted to approximately $2.21 billion from 38 hotels[65] - The company acquired 5,981 rooms through various acquisitions, including the Hilton Denver City Center and Hyatt Regency Boston[61] Tax and Refunds - The company received a state unemployment tax refund of approximately $4 million for its Hawaii hotels during Q1 2024[52] - The company reported a state unemployment tax refund of approximately $4 million for its Hawaii hotels in Q1 2024[57] Accounting and Financial Metrics - The Company emphasizes that EBITDA, Adjusted EBITDA, and Hotel Adjusted EBITDA should not be considered as substitutes for net income or other performance measures under U.S. GAAP[92] - Nareit FFO attributable to stockholders is calculated by excluding depreciation, amortization, and gains or losses on asset sales, providing a clearer view of operating performance[93] - The Company believes that Nareit FFO offers useful insights for investors and facilitates performance comparisons across periods and REITs[94] - Adjusted FFO attributable to stockholders is presented to provide supplemental information regarding ongoing operating performance, excluding certain non-recurring items[95] - Net Debt is calculated as total debt minus cash and cash equivalents, providing a measure of financial leverage[98] - The Net Debt to Adjusted EBITDA ratio is frequently used by analysts to assess financial condition, though it should not replace U.S. GAAP measures[100] - Occupancy is defined as the total number of room nights sold divided by available room nights, serving as a key demand indicator[101] - Average Daily Rate (ADR) measures the average room price and is crucial for assessing pricing strategies and revenue generation[102] - Revenue per Available Room (RevPAR) combines occupancy and ADR, providing a comprehensive performance metric for hotel operations[103] - Total RevPAR includes all hotel revenues, indicating overall performance and revenue generation capabilities[104]