QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Delaware 36-2058176 (State or other jurisdiction of (I.R.S Employer 22102 (Address of principal executive offices) (Zip Code) 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 o o Large accelerated filer Non-accelerated filer Emerging growth company o x Page March 31, 2023 December 31, 2022 (unaudited) ASSETS Property and equipment, net $ 8,198 $ 8,301 Intangibles, net 43 43 Cash and cash equivalents 842 906 Restricted cash 33 33 Accounts receivable, net of allowance for doubtful accounts of $2 and $2 130 129 Prepaid expenses 55 58 Other assets 42 47 Operating lease right-of-use assets 210 214 TOTAL ASSETS (variable interest entities – $231 and $237) $ 9,553 $ 9,731 LIABILITIES AND EQUITY Liabilities Debt $ 4,566 $ 4,617 Accounts payable and accrued expenses 244 220 Due to hotel managers 117 141 Other liabilities 207 228 Operating lease liabilities 231 234 Total liabilities (variable interest entities – $218 and $219) 5,365 5,440 Commitments and contingencies – refer to Note 11 Stockholders' Equity Common stock, par value $0.01 per share, 6,000,000,000 shares 2 2 Additional paid-in capital 4,216 4,321 Retained earnings 19 16 Total stockholders' equity 4,237 4,339 Noncontrolling interests (49 ) (48 ) Total equity 4,188 4,291 TOTAL LIABILITIES AND EQUITY $ 9,553 $ 9,731 Three Months Ended March 31, 2023 2022 Revenues Rooms $ 382 $ 292 Food and beverage 181 110 Ancillary hotel 65 61 Other 20 16 Total revenues 648 479 Operating expenses Rooms 107 85 Food and beverage 127 87 Other departmental and support 158 133 Other property-level 60 50 Management fees 30 22 Casualty loss 1 — Depreciation and amortization 64 69 Corporate general and administrative 16 16 Other 20 16 Total expenses 583 478 Gain on sales of assets, net 15 — Operating income 80 1 Interest income 10 — Interest expense (60 ) (62 ) Equity in earnings from investments in affiliates 4 — Other gain, net 1 5 Income (loss) before income taxes 35 (56 ) Income tax expense (2 ) — Net income (loss) 33 (56 ) Net income attributable to noncontrolling interests — (1 ) Net income (loss) attributable to stockholders $ 33 $ (57 ) Earnings (loss) per share: Earnings (loss) per share – Basic $ 0.15 $ (0.24 ) Earnings (loss) per share – Diluted $ 0.15 $ (0.24 ) Weighted average shares outstanding – Basic 220 235 Weighted average shares outstanding – Diluted 221 235 Three Months Ended March 31, 2023 2022 Operating Activities: Net income (loss) $ 33 $ (56 ) Adjustments to reconcile net income (loss) to net cash provided by operating Depreciation and amortization 64 69 Gain on sales of assets, net (15 ) — Casualty loss 1 — Equity in earnings from investments in affiliates (4 ) — Other gain, net — (1 ) Share-based compensation expense 4 4 Amortization of deferred financing costs 2 3 Distributions from unconsolidated affiliates 6 — Changes in operating assets and liabilities 13 25 Net cash provided by operating activities 104 44 Investing Activities: Capital expenditures for property and equipment (54 ) (21 ) Acquisitions, net (11 ) — Proceeds from asset dispositions, net 116 — Contributions to unconsolidated affiliates (2 ) — Net cash provided by (used in) investing activities 49 (21 ) Financing Activities: Repayments of credit facilities (50 ) — Repayments of mortgage debt (2 ) (2 ) Debt issuance costs (1 ) (3 ) Dividends paid (56 ) — Distributions to noncontrolling interests, net (1 ) — Tax withholdings on share-based compensation (2 ) (3 ) Repurchase of common stock (105 ) (61 ) Net cash used in financing activities (217 ) (69 ) Net decrease in cash and cash equivalents and restricted cash (64 ) (46 ) Cash and cash equivalents and restricted cash, beginning of period 939 763 Cash and cash equivalents and restricted cash, end of period $ 875 $ 717 Supplemental Disclosures Non-cash financing activities: Dividends declared but unpaid $ 32 2 Additional Non- Common Stock Paid-in Retained controlling Shares Amount Capital Earnings 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 — — — — (1 ) (1 ) Repurchase of common stock (9 ) — (105 ) — — (105 ) Balance as of March 31, 2023 216 $ 2 $ 4,216 $ 19 $ (49 ) $ 4,188 Additional Non- Common Stock Paid-in Accumulated controlling Shares Amount Capital Deficit Interests Total Balance as of December 31, 2021 236 $ 2 $ 4,533 $ (83 ) $ (49 ) $ 4,403 Share-based compensation, net — — 1 — — 1 Net loss — — — (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 Basis of Presentation Principles of Consolidation Use of Estimates Reclassifications Property and equipment were: March 31, 2023 December 31, 2022 (in millions) Land $ 3,272 $ 3,317 Buildings and leasehold improvements 6,469 6,512 Furniture and equipment 993 994 Construction-in-progress 211 201 10,945 11,024 Accumulated depreciation (2,747 ) (2,723 ) $ 8,198 $ 8,301 For the nine months ended September 30, 2023, we recognized an impairment loss of approximately $202 million related to one of the hotels securing our $725 million non-recourse CMBS loan as a result of a decision to cease making debt service payments that we expect will result in us no longer owning the property and benefiting from the cash flow. Refer to Note 6: "Debt" and Note 7: "Fair Value Measurements" for additional information. March 31, 2023 December 31, 2022 (in millions) Property and equipment, net $ 208 $ 208 Cash and cash equivalents 14 21 Restricted cash 2 2 Accounts receivable, net 5 4 Prepaid expenses 2 2 Debt 204 205 Accounts payable and accrued expenses 9 8 Due to hotel manager 1 2 Other liabilities 4 4 Note 6: Debt Debt balances and associated interest rates as of Principal balance as of Interest Rate Maturity Date March 31, 2023 December 31, 2022 (in millions) SF Mortgage Loan(1) 4.11% November 2023 $ 725 $ 725 HHV Mortgage Loan(1) 4.20% November 2026 1,275 1,275 Other mortgage loans Average rate of 4.35% 2023 to 2027(2) 467 469 Revolver(3) SOFR + 2.10% December 2026 — 50 2025 Senior Notes(4) 7.50% June 2025 650 650 2028 Senior Notes(4) 5.88% October 2028 725 725 2029 Senior Notes(4) 4.88% May 2029 750 750 4,592 4,644 Add: unamortized premium 2 3 Less: unamortized deferred financing costs (28 ) (30 ) $ 4,566 $ 4,617 The contractual maturities of our debt, assuming the exercise of all extensions that are exercisable solely at our option, as of Year (in millions) 2023 $ 861 2024 7 2025 657 2026 1,563 2027 30 Thereafter(1) 1,474 $ 4,592 The fair value of our debt and the hierarchy level we used to estimate fair values are shown below: Fair value as of 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%, a discounted cash flow term of 10 years, terminal capitalization rate of 6.3%, and discount rate of 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. March 31, 2023 December 31, 2022 Hierarchy Carrying Fair Value Carrying Fair Value (in millions) Liabilities: SF Mortgage Loan 3 $ 725 $ 697 $ 725 $ 692 HHV Mortgage Loan 3 1,275 1,138 1,275 1,142 Other mortgage loans 3 467 434 469 435 Revolver 3 — — 50 50 2025 Senior Notes 1 650 660 650 652 2028 Senior Notes 1 725 668 725 661 2029 Senior Notes 1 750 646 750 635 Restricted Stock Awards (“RSAs”) generally vest in annual installments between one and three years from each grant date. The following table provides a summary of RSAs for the Number of Shares Weighted-Average Unvested at January 1, 2023 843,846 $ 20.19 Granted 566,259 13.79 Vested (447,467 ) 20.97 Forfeited (6,961 ) 15.99 Unvested at March 31, 2023 955,677 $ 16.07 The following table provides a summary of PSUs for the Number of Shares Weighted-Average Unvested at January 1, 2023 1,198,325 $ 20.71 Granted 590,425 19.96 Forfeited (261,554 ) 24.80 Unvested at March 31, 2023 1,527,196 $ 19.72 Expected volatility 48.0 % — Risk-free rate 4.3 % Expected term 3 years The following table presents the calculation of basic and diluted earnings per share (“EPS”): Three Months Ended March 31, 2023 2022 (in millions, except per share amounts) Numerator: Net income (loss) attributable to stockholders, net $ 33 $ (57 ) Denominator: Weighted average shares outstanding – basic 220 235 Unvested restricted shares 1 — Weighted average shares outstanding – diluted 221 235 Earnings (loss) per share – Basic(1) $ 0.15 $ (0.24 ) Earnings (loss) per share – Diluted(1) $ 0.15 $ (0.24 ) The following table presents revenues for our consolidated hotels reconciled to our consolidated amounts and net income Three Months Ended March 31, 2023 2022 (in millions) Revenues: Total consolidated hotel revenues $ 628 $ 463 Other revenues 20 16 Total revenues $ 648 $ 479 Net income (loss) $ 33 $ (56 ) Other revenues (20 ) (16 ) Depreciation and amortization expense 64 69 Corporate general and administrative expense 16 16 Casualty loss 1 — Other operating expenses 20 16 Gain on sales of assets, net (15 ) — Interest income (10 ) — Interest expense 60 62 Equity in earnings from investments in affiliates (4 ) — Income tax expense 2 — Other gain, net (1 ) (5 ) Other items 6 3 Hotel Adjusted EBITDA $ 152 $ 89 The following table presents total assets for our consolidated hotels, reconciled to total assets: March 31, 2023 December 31, 2022 (in millions) Consolidated hotels $ 9,549 $ 9,726 All other 4 5 Total assets $ 9,553 $ 9,731 income (loss). analysis in making day-to-day operating decisions and evaluations of our operating performance against other companies within our industry: Three Months Ended March 31, 2023 2022 (in millions) Net income (loss) $ 33 $ (56 ) Depreciation and amortization expense 64 69 Interest income (10 ) — Interest expense 60 62 Income tax expense 2 — Interest expense, income tax and depreciation and 3 1 EBITDA 152 76 Gain on sales of assets, net (15 ) — Share-based compensation expense 4 4 Casualty loss 1 — Other items 4 2 Adjusted EBITDA 146 82 Less: Adjusted EBITDA from investments in affiliates (7 ) (5 ) Add: All other(1) 13 12 Hotel Adjusted EBITDA $ 152 $ 89 Three Months Ended March 31, 2023 2022 (in millions, except per share amounts) Net income (loss) attributable to stockholders $ 33 $ (57 ) Depreciation and amortization expense 64 69 Depreciation and amortization expense (1 ) (1 ) Gain on sales of assets, net (15 ) — Equity investment adjustments: Equity in earnings from investments in affiliates (4 ) — Pro rata FFO of investments in affiliates 5 2 Nareit FFO attributable to stockholders 82 13 Casualty loss 1 — Share-based compensation expense 4 4 Other items 5 1 Adjusted FFO attributable to stockholders $ 92 $ 18 Nareit FFO per share – Diluted(1) $ 0.37 $ 0.05 Adjusted FFO per share – Diluted(1) $ 0.42 $ 0.08 Three Months Ended March 31, 2023 2022 Change Change from Change (in millions) Rooms revenue $ 382 $ 292 $ 90 $ (11 ) $ 101 Food and beverage revenue 181 110 71 (1 ) 72 Ancillary hotel revenue 65 61 4 (1 ) 5 Rooms expense 107 85 22 (2 ) 24 Food and beverage expense 127 87 40 (1 ) 41 Other departmental and support expense 158 133 25 (4 ) 29 Other property-level expense 60 50 10 (1 ) 11 Management fees expense 30 22 8 (1 ) 9 Three Months Ended March 31, 2023 2022 Change Change from Change (in millions) Group rooms revenue $ 125 $ 73 $ 52 $ (2 ) $ 54 Transient rooms revenue 229 199 30 (9 ) 39 Contract rooms revenue 20 14 6 — 6 Other rooms revenue 8 6 2 — 2 Rooms revenue $ 382 $ 292 $ 90 $ (11 ) $ 101 Three Months Ended March 31, 2023 2022 Percent Change (in millions) General and administrative expenses $ 11 $ 10 10.0 % Share-based compensation expense 4 4 — Other items(1) 1 2 (50.0 ) Total corporate general and administrative $ 16 $ 16 — % Three Months Ended March 31, 2023 2022 Percent (in millions) SF and HHV Mortgage Loans(1) $ 21 $ 21 — % Other mortgage loans 5 5 — Revolver 1 1 — 2019 Term Facility(2) — 1 (100.0 ) 2025 Senior Notes(3) 12 12 — 2028 Senior Notes(3) 11 11 — 2029 Senior Notes(3) 9 9 — Other 1 2 (50.0 ) Total interest expense $ 60 $ 62 (3.2 )% As of September 30, 2023, restricted cash included $26 million of 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. requirements primarily consist of funds necessary to pay for scheduled debt maturities, capital improvements at our hotels, and costs associated with potential acquisitions. Three Months Ended March 31, 2023 2022 Percent Change (in millions) Net cash provided by operating activities $ 104 $ 44 136.4 % Net cash provided by (used in) investing activities 49 (21 ) 333.3 % Net cash used in financing activities (217 ) (69 ) 214.5 % 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. hotels. Record Date Payment Date Dividend per Share March 31, 2023 April 17, 2023 $ 0.15 Period Total number of Weighted average Total number of Maximum number 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 Total 8,990,348 8,815,500 Exhibit Description 2.1 2.2 3.1 3.2 31.2* 32.1* 32.2* 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 Park Hotels & Resorts Inc. Date: By: /s/ Thomas J. Baltimore Jr. Thomas J. Baltimore, Jr. Chairman of the Board, Date: By: /s/ Sean M. Dell’Orto Sean M. Dell’Orto Executive Vice President, Date: By: /s/ Darren W. Robb Darren W. Robb Senior Vice President and☒xMarch 31, September 30, 2023☐o
incorporation or organization)
Identification No.), 7th Floor,, Tysons,, VA(571) (571) 302-5757Yesx ☒ No ☐Yesx ☒ No ☐☒xAccelerated filer ☐o☐oSmaller reporting company ☐o☐o☐☐o No ☒April 25,October 27, 2023 was 209,983,724.334567142222Item 1.2323232323242425
authorized, 216,317,656 shares issued and 215,630,695 shares outstanding
as of March 31, 2023 and 224,573,858 shares issued and 224,061,745
shares outstanding as of December 31, 2022September 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 Three Months Ended
September 30,Nine Months Ended
September 30,2023 2022 2023 2022 Revenues Rooms $ 432 $ 428 $ 1,256 $ 1,153 Food and beverage 159 148 518 431 Ancillary hotel 66 67 203 198 Other 22 19 64 54 Total revenues 679 662 2,041 1,836 Operating expenses Rooms 119 115 343 298 Food and beverage 122 115 377 321 Other departmental and support 161 162 484 453 Other property-level 59 58 182 173 Management fees 31 30 95 84 Casualty and impairment loss — 3 204 4 Depreciation and amortization 65 67 193 204 Corporate general and administrative 18 16 50 48 Other 19 18 61 52 Total expenses 594 584 1,989 1,637 Gain on sales of assets, net — 14 15 13 Operating income 85 92 67 212 Interest income 9 4 29 5 Interest expense (65) (61) (186) (185) Equity in earnings from investments in affiliates 2 1 9 6 Other gain, net — 1 4 98 Income (loss) before income taxes 31 37 (77) 136 Income tax benefit (expense) — 3 (5) 2 Net income (loss) 31 40 (82) 138 Net income attributable to noncontrolling interests (4) (5) (8) (10) Net income (loss) attributable to stockholders $ 27 $ 35 $ (90) $ 128 Earnings (loss) per share: Earnings (loss) per share – Basic $ 0.13 $ 0.15 $ (0.42) $ 0.55 Earnings (loss) per share – Diluted $ 0.13 $ 0.15 $ (0.42) $ 0.55 Weighted average shares outstanding – Basic 212 224 216 229 Weighted average shares outstanding – Diluted 212 224 216 229
activities:Nine Months Ended
September 30,2023 2022 Operating Activities: Net (loss) income $ (82) $ 138 Adjustments to reconcile net (loss) income to net cash provided by operating activities: Depreciation and amortization 193 204 Gain on sales of assets, net (15) (13) Impairment and casualty loss 204 4 Equity in earnings from investments in affiliates (9) (6) Other gain, net — (92) Share-based compensation expense 14 13 Amortization of deferred financing costs 7 7 Distributions from unconsolidated affiliates 9 6 Changes in operating assets and liabilities 56 78 Net cash provided by operating activities 377 339 Investing Activities: Capital expenditures for property and equipment (195) (104) Acquisitions, net (11) — Proceeds from asset dispositions, net 116 143 Proceeds from the sale of investments in affiliates, net 3 101 Contributions to unconsolidated affiliates (4) — Net cash (used in) provided by investing activities (91) 140 Financing Activities: Repayments of credit facilities (50) — Proceeds from issuance of mortgage debt — 30 Repayments of mortgage debt (82) (36) Debt issuance costs (1) (3) Dividends paid (120) (5) Distributions to noncontrolling interests, net (4) (7) Tax withholdings on share-based compensation (2) (3) Repurchase of common stock (180) (218) Net cash used in financing activities (439) (242) Net (decrease) increase in cash and cash equivalents and restricted cash (153) 237 Cash and cash equivalents and restricted cash, beginning of period 939 763 Cash and cash equivalents and restricted cash, end of period $ 786 $ 1,000 Supplemental Disclosures Non-cash financing activities: Dividends declared but unpaid $ 31 $ 2 Common Stock Additional
Paid-in
CapitalRetained
Earnings
(Accumulated
Deficit)Non-
controlling
InterestsTotal 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 — — — (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) — — — (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 — — — (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
EarningsNon-
controlling
InterestsTotal 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) — — — (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 — — — (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 — — — (3) — (3) Distributions to noncontrolling interests — — — — (3) (3) Balance as of September 30, 2022 225 $ 2 $ 4,325 $ 38 $ (46) $ 4,319
interests$0.15 and $0.01$0.15 for each of the three months ended March 31, 2023, June 30, 2023 and September 30, 2023.respectively.June 30, 2022 and September 30, 2022.$0.01$0.01 par value per share, was converted into $11.00$11.00 in cash and 0.628 of a share of our common stock. No fractional shares of our common stock were issued in the Merger. The value of any fractional interests to which a Chesapeake shareholder would otherwise have been entitled was paid in cash.100%100% of the interests of our Operating Company until December 31, 2021 when the business undertook an internal reorganization transitioning our structure to a traditional umbrella partnership REIT structure ("UPREIT"). structure. Effective January 1, 2022, Park Parent became the managing member of our Operating Company and PK Domestic REIT Inc., a direct subsidiary of Park Parent, became a member of our Operating Company. We may, in the future, issue interests in (or from) our Operating Company in connection with acquiring hotels, financings, issuance of equity compensation or other purposes.2:2: Basis of Presentation and Summary of Significant Accounting Policies7purchased acquired two parcels of land, including all improvements, adjacent to the Hilton Hawaiian Village Waikiki Beach Resort, for a purchase price of approximately $18$18 million, including transaction costs. We accounted for the purchase as an acquisition of an asset, and the entire purchase price was allocated to land.$118.25$118.25 million. We recognized a net gain of approximately $15$15 million, which is included in gain on salesales of assets, net in our condensed consolidated statements of operations.Hotel Location Month Sold Hampton Inn & Suites Memphis – Shady Grove Memphis, Tennessee April 2022 Hilton Chicago/Oak Brook Suites Chicago, Illinois May 2022 Homewood Suites by Hilton Seattle Convention Center Pike Street Seattle, Washington June 2022 Hilton Garden Inn Chicago/Oakbrook Terrace Chicago, Illinois July 2022 Hilton Garden Inn LAX/El Segundo El Segundo, California September 2022 September 30, 2023 December 31, 2022 (in millions) Land $ 3,196 $ 3,317 Buildings and leasehold improvements 6,315 6,512 Furniture and equipment 983 994 Construction-in-progress 295 201 10,789 11,024 Accumulated depreciation (2,761) (2,723) $ 8,028 $ 8,301 $64$65 million and $68$67 million during the three months ended March 31,September 30, 2023 and 2022, respectively, and $193 million and $203 million during the nine months ended September 30, 2023 and 2022, respectively.September 30, 2023 December 31, 2022 (in millions) Property and equipment, net $ 209 $ 208 Cash and cash equivalents 21 21 Restricted cash 3 2 Accounts receivable, net 6 4 Prepaid expenses 2 2 Debt 203 205 Accounts payable and accrued expenses 11 8 Due to hotel manager 1 2 Other liabilities 3 4 underusing the equity method and had total debt of approximately $721$721 million as of both March 31,September 30, 2023 and December 31, 2022. Substantially all the debt is secured solely by the affiliates’ assets or is guaranteed by other partners without recourse to us.March 31,September 30, 2023 were:Principal balance as of Interest Rate
at September 30, 2023Maturity Date September 30, 2023 December 31, 2022 (in millions) November 2023 $ 725 $ 725 4.20% November 2026 1,275 1,275 Average rate of 4.37% 387 469 SOFR + 2.10% December 2026 — 50 7.50% June 2025 650 650 5.88% October 2028 725 725 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
at March 31, 2023
and discount$725$725 million CMBS loan ("SF Mortgage Loan") secured by the Hilton San Francisco Union Square and the Parc 55 Hotel San Francisco (“SF Mortgage Loan”– a Hilton Hotel (collectively, the "Hilton San Francisco Hotels") and a $1.275$1.275 billion CMBS loan secured by the Hilton Hawaiian Village Waikiki Beach Resort (“HHV Mortgage Loan”).March 31,September 30, 2023, Park had not received notice from the lender.(3)(5)In February 2023, we fully repaid the $50$50 million outstanding balance under our revolving credit facility ("Revolver"). The Revolver permits one or more standby letters of credit, up to a maximum aggregate outstanding balance of $50$50 million, to be issued on behalf of us. As of March 31,September 30, 2023, we had approximately $4$4 million outstanding on a standby letter of credit and $946$946 million of available capacity under our Revolver.(4)(6)In May and September 2020, our Operating Company, PK Domestic and PK Finance Co-Issuer Inc. ("PK Finance") issued an aggregate of $650$650 million of senior notes due 2025 (“2025 Senior Notes”) and an aggregate of $725$725 million of senior notes due 2028 (“2028 Senior Notes”), respectively. Additionally, in May 2021, our Operating Company, PK Domestic and PK Finance issued an aggregate of $750$750 million of senior notes due 2029 (“2029 Senior Notes”).March 31,September 30, 2023 and December 31, 2022, our condensed consolidated balance sheets included $5$27 million and $6$6 million of restricted cash, respectively, related to our mortgage loans. As of September 30, 2023, restricted cash included $26 million of 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.March 31,September 30, 2023 were:Year (in millions) 2023 $ 781 2024 7 2025 657 2026 1,563 2027 30 1,474 $ 4,512 9September 30, 2023 December 31, 2022 Hierarchy
LevelCarrying
AmountFair Value Carrying
AmountFair Value (in millions) Liabilities: SF Mortgage Loan 3 $ 725 $ 722 $ 725 $ 692 HHV Mortgage Loan 3 1,275 1,149 1,275 1,142 Other mortgage loans 3 387 357 469 435 Revolver 3 — — 50 50 2025 Senior Notes 1 650 650 650 652 2028 Senior Notes 1 725 663 725 661 2029 Senior Notes 1 750 638 750 635 September 30, 2023 Fair Value Impairment Loss (in millions) $ 234 $ 202 Total $ 234 $ 202
Level
Amount
Amount8:9: Share-Based Compensation, from 8,000,000 to 14,070,000 shares. As of March 31,September 30, 2023, 1,429,1417,498,093 shares of common stock remain available for future issuance, which excludes the 6,070,000 additional shares that were approved in April 2023.issuance. The 2017 Director Plan provides that a maximum of 950,000 shares of our common stock may be issued, and as of March 31,September 30, 2023,383,258 263,524 sharesof common stock remain available for future issuance. For both the three months ended March 31,September 30, 2023 and 2022, we recognized $4$5 million and $4 million, respectively, of share-based compensation expense.expense and $14 million and $13 million, respectively, for the nine months ended September 30, 2023 and 2022. As of March 31,September 30, 2023, unrecognized compensation expense was$32 $24 million, which is expected to be recognized over a weighted-average period of 2.11.6 years. The total fair value of shares vested (calculated as the number of shares multiplied by the vesting date share price) for both the threenine months ended March 31,September 30, 2023 and 2022 was $6$7 million.threenine months ended March 31,September 30, 2023:
Grant Date
Fair ValueNumber of Shares Weighted-Average
Grant Date
Fair ValueUnvested 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 $1$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%200% of the number of PSUs granted to an employee, based on the level of achievement of the foregoing performance measure.10$11.00$11.00 to $25.00,$25.00, over aMarch 31,September 30, 2023, six of the eight Share Price Targets were achieved and thus 75%75% of the awards granted were vested.threenine months ended March 31,September 30, 2023:
Grant Date
Fair ValueNumber of Shares Weighted-Average
Grant Date
Fair ValueUnvested 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 48.0—4.39:10: Earnings Per ShareThree Months Ended September 30, Nine Months Ended
September 30,2023 2022 2023 2022 (in millions, except per share amounts) Numerator: Net income (loss) attributable to stockholders $ 27 $ 35 $ (90) $ 128 Earnings attributable to participating securities — — (1) — Net income (loss) attributable to stockholders , net of earnings allocated to participating securities 27 35 (91) 128 Denominator: Weighted average shares outstanding – basic 212 224 216 229 Unvested restricted shares — — — — Weighted average shares outstanding – diluted 212 224 216 229 $ 0.13 $ 0.15 $ (0.42) $ 0.55 $ 0.13 $ 0.15 $ (0.42) $ 0.55
of earnings allocated to participating securitiesnumbers.numbers and are calculated independently for each period presented.March 31,September 30, 2023 and 2022 because their effect would have been anti-dilutive.1110:11: Business Segment InformationMarch 31,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 (loss) 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:(loss) 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 September 30, 2023 December 31, 2022 (in millions) Consolidated hotels $ 9,298 $ 9,726 All other 7 5 Total assets $ 9,305 $ 9,731 1211:12: Commitments and ContingenciesMarch 31,September 30, 2023, we had outstanding commitments under third-party contracts of approximately $168$135 millionfor capital expenditures at our properties, of which $51$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, $39$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 $30$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.$8 $8 million as of March 31,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.13 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.hold investments in entities that have ownership or leasehold interests in 4643 hotels (excluding the Hilton San Francisco Hotels), consisting of premium-branded hotels and resorts with over 29,00026,000 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.10: “Business11: "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.14In February 2023, we sold the 508-room Hilton Miami Airport hotel for gross proceeds of $118.25 million, or $233,000 per key, and utilized a portion of the net proceeds to fully repay the $50 million outstanding under our revolving credit facility ("Revolver").In March 2023, we purchased two parcels of land, including all improvements, adjacent to the Hilton Hawaiian Village Waikiki Beach Resort, for approximately $18 million, including transaction costs. We accounted for the purchase as an acquisition of an asset, and we intend to develop an additional tower on the acquired parcels as part of the Hilton Hawaiian Village Waikiki Beach Resort.March 31,September 30, 2023, we repurchased approximately 8.85.8 million shares of our common stock for a total purchase price of $105$75 million.increaseincreased 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 firstthird quarter of 2023, we have continued to experience improvements in leisure, groupoverall 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 expectedcontinues to improve during the second half of 2023.improve.average daily rate ("ADR")ADR levels as demand for rooms increases or decreases.income.(losses) from investments in affiliates.1516Three 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) — — (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) 14 13 40 37 Hotel Adjusted EBITDA $ 173 $ 167 $ 517 $ 464
amortization included in equity in earnings from
investments in affiliates17Three 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) — — (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 12 — 26 5 Adjusted FFO attributable to stockholders $ 108 $ 94 $ 329 $ 251 $ 0.43 $ 0.39 $ 1.33 $ 1.00 $ 0.51 $ 0.42 $ 1.52 $ 1.09
attributable to noncontrolling interestssixseven consolidated hotels. The results of operations of these hotels are included in our consolidated results only during our period of ownership.Three Months Ended September 30, 2023 2022 Change Change from Property Dispositions (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
Property
Dispositions
from Other
Factors(1)Nine Months Ended September 30, 2023 2022 Change Change from Property Dispositions (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 18(1)Change from other factors primarily relates to the market-specific conditions discussed below.March 31,September 30, 2023, as well as the change for each segment compared to the same periodperiods in 2022 are as follows:Three Months Ended September 30, 2023 2022 Change Change from Property Dispositions (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
Property
Dispositions
from Other
Factors(1)Nine Months Ended September 30, 2023 2022 Change Change from Property Dispositions (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 and ADR increases in certain of our largest markets duringmarkets. During the three months ended March 31,September 30, 2023, our New York, Hawaii and Seattle markets experienced the most 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 17.8 percentage points and 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 months ended 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 withdue to an increase in transient demand.San Francisco, Hawaii, and New York and and Chicago markets experiencingexperienced the most significant changes. Combined occupancy and ADR at our San Francisco hotels increased 23.3 percentage points and 45.7%, respectively, for the three months ended March 31, 2023changes compared to the same period in 2022, as a result of an increase in both group and transient demand, coupled with the reopening of Parc 55 San Francisco - a Hilton Hotel in May 2022. Combined occupancy and ADR at our two Hawaii hotels increased 10.66.3 percentage points and 10.4%4.2%, respectively, for the threenine months ended March 31,September 30, 2023 compared to same period in 2022, driven by an increaseincreases in group and domestic transient demand primarily at the Hilton Hawaiian Village Waikiki Beach Resort, which experienced increases in both occupancy and ADR of 12.36.5 percentage points and 13.5%5.8%, respectively. The New York Hilton Midtown benefited from increases in both group and transient demand resulting in increases in occupancy and ADR of 35.223.5 percentage points and 4.2%, respectively, for the threenine months ended March 31,September 30, 2023 compared to the same period in 2022.Other revenue and Other operating expenseDuring Combined occupancy at our Chicago hotels increased 7.7 percentage points for the threenine months ended March 31,September 30, 2023other revenue and other operating expense both increased by $4 million compared to the same period in 2022 primarily due to increases in support servicestransient and group demand. fromhotelsthree and nine months ended September 30, 2023, other revenue increased by $3 million and $10 million, respectively, and other operating expense increased by $1 million and $9 million, respectively, due to an increase in business and related costs that haveare allocated to the Hilton Grand Vacations pursuant to service arrangements with Hilton Grand Vacations.certain of our hotels.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 — — — 2 3 (33.3) Total corporate general and administrative $ 18 $ 16 12.5 % $ 50 $ 48 4.2 % threenine months ended March 31,September 30, 2023, we recognized a net gain of $15 million from the sale of one consolidated hotel.$10$5 million and $24 million, respectively, during the three and nine months ended March 31,September 30, 2023 compared to the same periodperiods in 2022 as2022. 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 withbalances, 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.decreased duringincreased for both the three and nine months ended March 31,September 30, 2023 compared to the same periodperiods in 2022. Interest expense 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, aswhich was subsequently repaid in February 2023. This was partially offset by a result ofdecrease 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, partially offsetas well as the full repayment of the $75 million mortgage loan secured by $50 million of borrowings under our Revolverthe W Chicago - City Center in December 2022, which was subsequently repaid in FebruaryJune 2023. Interest expense associated with our debt for the three and nine months ended March 31,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) $ 14 $ 8 75.0 % $ 31 $ 23 34.8 % 13 13 — % 40 40 — % Other mortgage loans 4 5 (20.0) 14 16 (12.5) Revolver 1 1 — 3 2 50.0 — 1 (100.0) — 2 (100.0) 13 13 — 37 37 — 11 11 — 32 32 — 9 9 — 27 27 — Other — — — 2 6 (66.7) Total interest expense $ 65 $ 61 6.6 % $ 186 $ 185 0.5 %
Changeathe $725 million CMBSSF Mortgage 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 secured byis 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 Union Square andHotels, which serve as security for the Parc 55 Hotel San Francisco (“SF Mortgage Loan”)Loan, and their operations, and thus, we have no further economic interest in the operations of the hotels. Refer to Note 6: "Debt" and Note 13: "Subsequent Events" in our unaudited condensed consolidated financial statements included elsewhere within this Quarterly Report on Form 10-Q for additional information.(2)(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").March 31,September 30, 2023, we had total cash and cash equivalents of $842$726 million and $33$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.firstthird quarter of 2023, we continued to experience improvements in leisure, group and business transientoverall 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 expectedcontinues to improve during the second half of 2023.improve. We continue to mitigate the effects of macroeconomic and inflationary pressures through active asset management.$842$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 year12 months and beyond. We have no significant maturities in 2023, except for the $725 million mortgage loan secured by the Hilton San Francisco Union Square and the Parc 55 Hotel San FranciscoSF Mortgage Loan due in November 2023, for which we expectceased making debt service payments in June 2023 and is in default. Refer to address by the end of the second quarter of 2023. We expect to fully repay the $75 million mortgage loan secured by the W Chicago – City Center, dueNote 6: "Debt" and Note 13: "Subsequent Events" in August 2023, prior to maturity with available cashour unaudited condensed consolidated financial statements included elsewhere within this Quarterly Report on hand. Additionally, in February 2023, we fully repaid the $50 million outstanding under our Revolver with net proceeds from the sale of the Hilton Miami Airport hotel, which was soldForm 10-Q for gross proceeds of $118.25 million, with the remaining proceeds used for general corporate purposes and stock repurchases.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.20$168$135 million for capital expenditures at our properties, of which $51$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, $39$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 $30$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.threenine months ended March 31,September 30, 2023, we repurchased in aggregate under the Stock Repurchase Programs approximately 8.8 million14.6 shares of our common stock for a total purchase price of $105$180 million. As of March 31,September 30, 2023, $225$150 million remained available for stock repurchases under the February 2023 Stock Repurchase Program.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 $60$38 million increase in net cash provided by operating activities for the threenine months ended March 31,September 30, 2023 compared to the threenine months ended March 31,September 30, 2022 was primarily due to an increase in cash from operations as a result of an increase in occupancy at our hotels.$49$91 million in net cash provided byused in investing activities for the threenine months ended March 31,September 30, 2023 was primarily attributable to $206 million in capital expenditures and land acquisitions, partially offset by $116 million of net proceeds from the sale of one of our hotels partially offset by $65 million in capital expenditures and land acquisitions.$21$140 million in net cash used inprovided by investing activities for the threenine months ended March 31,September 30, 2022 was primarily attributable to $244 million of net proceeds from the sale of five of our hotels and our ownership interests in the joint ventures that own and operate one hotel, partially offset by $104 million in capital expenditures.21$217$439 million in net cash used in financing activities for the threenine months ended March 31,September 30, 2023 was primarily attributable to the repurchase of approximately 8.814.6 million shares of our common stock for $105approximately $180 million, $56$132 million of debt repayments and $120 million of dividends paid and $52 millionpaid.$69$242 million in net cash used in financing activities for the threenine months ended March 31,September 30, 2022 was primarily attributable to the repurchase of approximately 3.412.0 million shares of our common stock for $61approximately $218 million.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 March 31,September 30, 2023, our total indebtedness was approximately $4.6$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.March 31,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.threenine months ended March 31,September 30, 2023, repurchases made pursuant to our stock repurchase programs were as follows:Period Total number of shares purchased as part of publicly announced plans or programs 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 hu
shares
purchased(1)
price paid
per share(2)
shares purchased
as part of publicly
announced plans
or programs
(or approximate
dollar value) of
common shares
that may yet be
purchased under
the plans or
programs(3)
(in millions)Not applicable.23None.
Number 10.131.1* 31.1*May 1,November 2, 2023President and Chief Executive Officer (Principal(Principal Executive Officer)May 1,November 2, 2023Chief Financial Officer and Treasurer (Principal Financial Officer) May 1,November 2, 2023Chief Accounting Officer (Principal Accounting Officer) 25