Park Hotels & Resorts Inc. Provides Update on Recent Operating Trends and Capital Allocation Activity

TYSONS, Va., Dec. 22, 2022 (GLOBE NEWSWIRE) -- Park Hotels & Resorts Inc. (“Park” or the “Company”) (NYSE:PK) today provided an update on fourth quarter operating trends and the Company’s capital allocation activity.

Recent Highlights:

• Hotel net income for October 2022 and November 2022 was $41 million and $15 million, respectively;
• RevPAR for October 2022 was $178.62, a 77.5% increase versus October 2021 on a Pro-forma basis and a 9.7% decrease versus 2019 on a Pro-forma basis, resulting in Hotel Adjusted EBITDA Margin of 30.8% for October 2022;
• Occupancy for October 2022 was 73.4%, a 23.7 percentage point increase versus October 2021 on a Pro-forma basis and an 11.2 percentage point decrease versus 2019 on a Pro-forma basis, while rate for October 2022 was $243.41, a 20.2% increase versus October 2021 on a Pro-forma basis and a 4.0% increase versus 2019 on a Pro-forma basis;
• RevPAR for November 2022 was $156.14, a 48.9% increase versus November 2021 on a Pro-forma basis and a 10.9% decrease versus 2019 on a Pro-forma basis, resulting in Hotel Adjusted EBITDA Margin of 22.1% for November 2022;
• Occupancy for November 2022 was 67.1%, a 15.5 percentage point increase versus November 2021 on a Pro-forma basis and a 14.0 percentage point decrease versus 2019 on a Pro-forma basis, while rate for November 2022 was $232.53, a 14.4% increase versus November 2021 on a Pro-forma basis and a 7.7% increase versus 2019 on a Pro-forma basis;
• Updated Q4 2022 outlook to reflect slightly lower than expected RevPAR performance but better than expected Hotel Adjusted EBITDA margin, Adjusted EBITDA and Adjusted FFO per share as a result of higher than expected group business yielding additional incremental food & beverage revenue, offset by weaker than expected leisure demand in certain resort markets;
• Declared a $0.25 per share cash dividend to common stockholders of record as of December 30, 2022, payable on January 17, 2023;
• Successfully amended and restated its $901 million revolving credit facility to increase total capacity to $950 million, extend the maturity by three years to December 2026 and release of all collateral securing the credit facility (and its senior notes) consisting of pledges of equity interests in Park-affiliated entities owning certain unencumbered assets;
• Repaid in full the $78 million outstanding under its sole remaining bank term loan maturing in 2024, using a combination of a $50 million draw against the newly amended revolver and cash on-hand;
• Plans to fully repay its $26 million CMBS loan due March 2023 and secured by the Hilton Checkers hotel by the end of 2022 using available cash on hand; and
• Opened the newly constructed 13,000 square foot ballroom at the Waldorf Astoria Bonnet Creek in Orlando on December 2, 2022.
  

Thomas J. Baltimore, Jr., Chairman and CEO of Park, stated, “As we approach the end of the year, I am incredibly pleased with the recovery of our business and the progress we have made against our 2022 priorities. Operationally, despite the macro headwinds, the fourth quarter is generally in line with our overall expectations thanks to our diversified portfolio, and while we are adjusting our fourth quarter outlook down slightly on the top-line, we are raising margin and earnings guidance given outperformance in out-of-room spend and cost savings. Strong recovery and pick up in group, combined with steady business transient demand, has helped to offset some moderation in the leisure segment as seasonal trends normalize, while markets such as Hawaii, New York and New Orleans have shown solid outperformance throughout the quarter with additional tailwinds anticipated next year from incremental international inbound and convention demand, which should help offset slower growth this quarter in markets like Key West and a still lagging recovery in San Francisco, which is now expected to drag the portfolio fourth quarter RevPAR growth relative to 2019 by over 900 basis points.

On the capital allocation front, I am proud of our team’s efforts to sell $317 million of non-core assets, reducing leverage by almost 0.4x based on 2019 Pro-forma Adjusted EBITDA, enhance our financial flexibility through our recent re-cast of our revolving credit facility and execute transformative ROI improvements within our portfolio. With $1.9 billion of liquidity available as of the end of November, including over $1 billion of cash, Park’s balance sheet remains very well positioned to execute our strategic goals in 2023 and beyond.

We will remain disciplined with our capital allocation priorities—reinvesting in our robust ROI pipeline, continuing to de-lever our balance sheet by selling non-core assets and taking advantage of the on-going dislocation between public and private market valuations by buying back stock through our existing stock repurchase program on a leverage neutral basis.”

Preliminary Fourth Quarter 2022 Operational Highlights:

• Group business has outperformed expectations during the fourth quarter to date, resulting in more than $7 million in room revenue and approximately $7 million in incremental food & beverage revenue relative to Park’s outlook published on November 2, 2022 (“Prior Forecast”);
• Group bookings as of the end of November 2022 for the fourth quarter of 2022 was approximately 83% of what fourth quarter 2019 group bookings were as of the end of November 2019, an increase of approximately 600 basis points from the end of September 2022, with average group rate at 2019 levels for the same time period;
• Business transient has held steady to forecast with corporate, local and government negotiated account room revenue to date slightly exceeding Prior Forecast by $1 million;
• Leisure transient performance has moderated with resort market performance down 2.3% to Prior Forecast, led mostly by the Florida markets (and most notably Key West), with RevPAR down approximately 6.5% to Prior Forecast; however, Hawaii continues to outperform with RevPAR up over 1% relative to Prior Forecast and now expected to be up 8% relative to fourth quarter 2019 despite some minor demand disruption to the Hilton Waikoloa stemming from the volcano activity on the Big Island; and
• RevPAR across Park’s urban markets is down 3% for the fourth quarter of 2022 relative to Prior Forecast, with San Francisco continuing to lag in its recovery relative to other urban and convention markets within the Park portfolio. Excluding San Francisco, combined RevPAR for the urban markets is expected to increase 3% for the fourth quarter 2022 relative to Prior Forecast and expected to be down only 2% to fourth quarter 2019, on a Pro-Forma basis, with fourth quarter RevPAR for New York and New Orleans each expected to exceed 2019 levels, on a Pro-forma basis.
  

These fourth quarter operating statistics are preliminary. The Company expects to publicly report its results for the fourth quarter and full year 2022 in February 2023. Actual results may differ materially from the estimates above.

Updated Q4 2022 and Full-Year 2022 Outlook

Park’s outlook for Q4 2022 and full-year 2022 are updated as follows:

(unaudited, dollars in millions, except per share amounts and RevPAR)
		Q4 2022 Outlook								Q4 2022 Outlook								Change at
		as of November 2, 2022								as of December 22, 2022								Midpoint
Metric		Low				High				Low				High
RevPAR		$	163			$	166			$	161			$	164			$	(2	)
RevPAR change vs. 2019			(9	)%			(7	)%			(10	)%			(8	)%			(1	)%
Net income		$	6			$	20			$	21			$	35			$	15
Net income attributable to stockholders		$	4			$	18			$	19			$	33			$	15
Earnings per share – Diluted(1)		$	0.02			$	0.08			$	0.08			$	0.15			$	0.07
Adjusted EBITDA		$	140			$	155			$	145			$	160			$	5
Hotel Adjusted EBITDA margin			24.0	%			25.0	%			24.3	%			25.3	%			30	bps
Hotel Adjusted EBITDA margin change vs. 2019(2)			(520	) bps			(420	) bps			(490	) bps			(390	) bps			30	bps
Adjusted FFO per share – Diluted(1)		$	0.35			$	0.43			$	0.38			$	0.45			$	0.02

		Full-Year 2022 Outlook									Full-Year 2022 Outlook																Change at
		as of November 2, 2022									as of December 22, 2022																Midpoint
Metric		Low				High					Low								High
RevPAR		$	156			$	157				$		156						$		157						$		—
RevPAR change vs. 2019			(15	)%			(14	)%					(15		)%						(15		)%						—		%
Net income		$	143			$	157				$		158						$		173						$		16
Net income attributable to stockholders		$	132			$	147				$		147						$		161						$		15
Earnings per share – Diluted(1)		$	0.58			$	0.64				$		0.64						$		0.71						$		0.06
Adjusted EBITDA		$	587			$	602				$		591						$		607						$		5
Hotel Adjusted EBITDA margin			25.6	%			25.8	%					25.5		%						25.9		%						— bps
Hotel Adjusted EBITDA margin change vs. 2019			(370	) bps			(350	) bps					(380		) bps						(340		) bps						— bps
Adjusted FFO per share – Diluted(1)		$	1.45			$	1.52				$		1.47						$		1.54						$		0.02

(1)	Per share amounts are calculated based on unrounded numbers.
(2)	The fourth quarter 2019 margin benefited from $21 million of business interruption proceeds, or a 200 basis point impact, related to the loss of income in prior periods for Park's Puerto Rico and Key West hotels.

Park's outlook is based in part on the following assumptions:

• Fully diluted weighted average shares are expected to be 224 million and 228 million for Q4 2022 and full-year 2022, respectively; and
• Does not take into account potential future acquisitions and dispositions, which could result in a material change to Park’s outlook.

Park's fourth quarter and full-year 2022 outlook are based on a number of factors, many of which are outside the Company's control, including uncertainty surrounding any new disruptions from the COVID-19 pandemic and other macro-economic factors, including inflation, increases in interest rates, supply chain disruptions and the possibility of an economic recession or slowdown, all of which are subject to change.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include, but are not limited to, statements related to Park’s current expectations regarding the performance of its business, financial results, liquidity and capital resources, including anticipated repayment of certain of the Company’s indebtedness, the completion of capital allocation priorities, the expected repurchase of the Company’s stock, the impact to the Company's business and financial condition and that of its hotel management companies, measures being taken in response to COVID-19, the impact from macroeconomic factors (including inflation, increases in interest rates, potential economic slowdown or a recession and geopolitical conflicts), the effects of competition and the effects of future legislation or regulations, 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 the Company’s control and which could materially affect its results of operations, financial condition, cash flows, performance or future achievements or events.

Forward-looking statements are based on current expectations of management and therefore involve estimates and assumptions that are subject to risks, uncertainties and other factors that could cause actual results to differ materially from those expressed in these forward-looking statements. You should not put undue reliance on any forward-looking statements and Park urges investors to carefully review the disclosures Park makes concerning risk and uncertainties in Item 1A: “Risk Factors” in Park’s Annual Report on Form 10-K for the year ended December 31, 2021, as such factors may be updated from time to time in Park’s filings with the SEC, which are accessible on the SEC’s website at www.sec.gov. Except as required by law, Park undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

About Park

Park is the second largest publicly traded lodging REIT with a diverse portfolio of market-leading hotels and resorts with significant underlying real estate value. Park’s portfolio currently consists of 47 premium-branded hotels and resorts with approximately 30,000 rooms primarily located in prime city center and resort locations. Visit www.pkhotelsandresorts.com for more information.

Non-GAAP Financial Measures

Park presents certain non-GAAP financial measures in this press release, including Nareit FFO attributable to stockholders, Adjusted FFO attributable to stockholders, EBITDA, Adjusted EBITDA, Hotel Adjusted EBITDA, Hotel Adjusted EBITDA margin and Net debt. These non-GAAP financial measures should be considered along with, but not as alternatives to, net income (loss) as a measure of its operating performance. Please see the schedules included in this press release including the “Definitions” section for additional information and reconciliations of such non-GAAP financial measures.

PARK HOTELS & RESORTS INC.
NON-GAAP FINANCIAL MEASURES RECONCILIATIONS
HOTEL EBITDA, HOTEL ADJUSTED EBITDA AND
HOTEL ADJUSTED EBITDA MARGIN

(unaudited, in millions)
	Month Ended October 31, 2022			Month Ended November 30, 2022
Hotel net income	$	41		$	15
Depreciation and amortization expense		21			21
Interest expense		9			8
Hotel EBITDA		71			44
Other		2			1
Hotel Adjusted EBITDA	$	73		$	45

	Month Ended October 31, 2022				Month Ended November 30, 2022
Total Revenues	$	243			$	210
Less: Other revenue		(7	)			(7	)
Hotel Revenues	$	236			$	203

	Month Ended October 31, 2022				Month Ended November 30, 2022
Hotel Revenues	$	236			$	203
Hotel Adjusted EBITDA	$	73			$	45
Hotel Adjusted EBITDA margin		30.8	%			22.1	%

PARK HOTELS & RESORTS INC.
NON-GAAP FINANCIAL MEASURES RECONCILIATIONS
NET DEBT AND PRO-FORMA ADJUSTED EBITDA

(unaudited, in millions)
		September 30, 2022				December 31, 2021
Debt		$	4,670			$	4,672
Add: unamortized deferred financing costs and discount			33				38
Less: unamortized premium			(3	)			(4	)
Debt, excluding unamortized deferred financing cost,         premiums and discounts			4,700				4,706
Add: Park's share of unconsolidated affiliates debt, excluding unamortized deferred financing costs			170				225
Less: cash and cash equivalents			(971	)			(688	)
Less: restricted cash			(29	)			(75	)
Net debt		$	3,870			$	4,168
2019 Pro-forma Adjusted EBITDA		$	812			$	812
Net debt to Pro-forma Adjusted EBITDA ratio		4.77x				5.13x

(unaudited, in millions)	Full Year
	December 31, 2019
Net income	$	316
Depreciation and amortization expense		264
Interest income		(6	)
Interest expense		140
Income tax expense		35
Interest expense, income tax and depreciation and amortization              included in equity in earnings from investments in affiliates		23
EBITDA		772
Gain on sales of assets, net		(19	)
Gain on sale of investments in affiliates(1)		(44	)
Acquisition costs		70
Severance expense		2
Share-based compensation expense		16
Casualty (gain) and impairment loss, net		(18	)
Other items		7
Adjusted EBITDA		786
Add: Adjusted EBITDA from hotels acquired		129
Less: Adjusted EBITDA from hotels disposed of		(87	)
Less: Adjusted EBITDA from investments in              affiliates disposed of		(16	)
Pro-forma Adjusted EBITDA(2)	$	812

(1)

Included in other gain (loss), net in our consolidated statements of operations.

(2)

Full year December 31, 2019 includes $15 million associated with 466 rooms at the Hilton Waikoloa Village that were transferred to Hilton Grand Vacations at the end of 2019, $6 million associated with business interruption proceeds related to the loss of income in prior years for the Hilton Caribe and a $6 million operating loss generated from Park’s laundry facilities that were closed in 2021. Excluding these amounts, 2019 Pro-forma Adjusted EBITDA would have been $797 million.

PARK HOTELS & RESORTS INC.
NON-GAAP FINANCIAL MEASURES RECONCILIATIONS
2022 OUTLOOK – EBITDA, ADJUSTED EBITDA AND HOTEL ADJUSTED EBITDA
AND HOTEL ADJUSTED EBITDA MARGIN

		Three Months Ending								Year Ending
(unaudited, in millions)		December 31, 2022								December 31, 2022
		Low Case				High Case				Low Case				High Case
Net income		$	21			$	35			$	158			$	173
Depreciation and amortization expense			65				65				269				269
Interest income			(7	)			(7	)			(12	)			(12	)
Interest expense			62				62				248				248
Income tax expense (benefit)			1				2				(1	)			—
Interest expense, income tax and depreciation and amortization included in equity in earnings from investments in affiliates			2				2				8				8
EBITDA			144				159				670				686
Gain on sale of assets, net			(9	)			(9	)			(22	)			(22	)
Gain on sale of investments in affiliates			—				—				(92	)			(92	)
Share-based compensation expense			4				4				16				16
Casualty loss			—				—				4				4
Other items			6				6				15				15
Adjusted EBITDA			145				160				591				607
Less: Adjusted EBITDA from investments in affiliates			(5	)			(5	)			(26	)			(26	)
Add: All other			14				14				48				48
Hotel Adjusted EBITDA		$	154			$	169			$	613			$	629
		Three Months Ending								Year Ending
		December 31, 2022								December 31, 2022
		Low Case				High Case				Low Case				High Case
Total Revenues		$	651			$	686			$	2,471			$	2,505
Less: Other revenue			(20	)			(20	)			(74	)			(74	)
Hotel Revenues		$	631			$	666			$	2,397			$	2,431
		Three Months Ending								Year Ending
		December 31, 2022								December 31, 2022
		Low Case				High Case				Low Case				High Case
Hotel Revenues		$	631			$	666			$	2,397			$	2,431
Hotel Adjusted EBITDA		$	154			$	169			$	613			$	629
Hotel Adjusted EBITDA margin(1)			24.3	%			25.3	%			25.5	%			25.9	%

(1)	Percentages are calculated based on unrounded numbers.

PARK HOTELS & RESORTS INC.
NON-GAAP FINANCIAL MEASURES RECONCILIATIONS
2022 OUTLOOK – NAREIT FFO ATTRIBUTABLE TO STOCKHOLDERS AND
ADJUSTED FFO ATTRIBUTABLE TO STOCKHOLDERS

		Three Months Ending								Year Ending
(unaudited, in millions except per share data)		December 31, 2022								December 31, 2022
		Low Case				High Case				Low Case				High Case
Net income attributable to stockholders		$	19			$	33			$	147			$	161
Depreciation and amortization expense			65				65				269				269
Depreciation and amortization expense attributable to noncontrolling interests			(1	)			(1	)			(4	)			(4	)
Gain on sale of assets, net			—				—				(13	)			(13	)
Gain on sale of investments in affiliates			—				—				(92	)			(92	)
Equity investment adjustments:
Equity in earnings from investments in affiliates			(9	)			(9	)			(15	)			(15	)
Pro rata FFO of equity investments			1				1				12				12
Nareit FFO attributable to stockholders			75				89				304				318
Share-based compensation expense			4				4				16				16
Other items			5				7				11				13
Adjusted FFO attributable to stockholders		$	84			$	100			$	335			$	351
Adjusted FFO per share – Diluted(1)		$	0.38			$	0.45			$	1.47			$	1.54
Weighted average diluted shares outstanding			224				224				228				228

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

PARK HOTELS & RESORTS INC.
DEFINITIONS

EBITDA and Hotel Adjusted EBITDA

Hotel earnings before interest expense, taxes and depreciation and amortization (“Hotel EBITDA”), presented herein, reflects net income excluding depreciation and amortization, interest income, interest expense and income taxes of the Company’s consolidated hotels. Hotel Adjusted EBITDA is Hotel EBITDA further adjusted to exclude items that management believes are not representative of the Company’s consolidated hotels current or future operating performance and is a key measure of the Company’s consolidated hotels profitability. The Company presents Hotel Adjusted EBITDA to help the Company and its investors evaluate the ongoing operating performance of the Company’s consolidated hotels.

Hotel EBITDA and Hotel Adjusted EBITDA are not recognized terms under United States (“U.S.”) GAAP and should not be considered as an alternative to net income or other measures of financial performance or liquidity derived in accordance with U.S. GAAP. In addition, the Company’s definition of Hotel EBITDA and Hotel Adjusted EBITDA may not be comparable to similarly titled measures of other companies.

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

Hotel EBITDA and Hotel Adjusted EBITDA have limitations as analytical tools and should not be considered either in isolation or as a substitute for net income (loss) or other methods of analyzing the Company’s operating performance and results as reported under U.S. GAAP.

Nareit FFO attributable to stockholders, Adjusted FFO attributable to stockholders, Nareit FFO per share – diluted and Adjusted FFO per share – diluted

Nareit FFO attributable to stockholders and Nareit FFO per diluted share (defined as set forth below) are presented herein as non-GAAP measures of the Company’s performance. The Company calculates funds from (used in) operations (“FFO”) attributable to stockholders for a given operating period in accordance with standards established by the National Association of Real Estate Investment Trusts (“Nareit”), as net income (loss) attributable to stockholders (calculated in accordance with U.S. GAAP), excluding depreciation and amortization, gains or losses on sales of assets, impairment, and the cumulative effect of changes in accounting principles, plus adjustments for unconsolidated joint ventures. Adjustments for unconsolidated joint ventures are calculated to reflect the Company’s pro rata share of the FFO of those entities on the same basis. As noted by Nareit in its December 2018 “Nareit Funds from Operations White Paper – 2018 Restatement,” since real estate values historically have risen or fallen with market conditions, many industry investors have considered presentation of operating results for real estate companies that use historical cost accounting to be insufficient by themselves. For these reasons, Nareit adopted the FFO metric in order to promote an industry-wide measure of REIT operating performance. The Company believes Nareit FFO provides useful information to investors regarding its operating performance and can facilitate comparisons of operating performance between periods and between REITs. The Company’s presentation may not be comparable to FFO reported by other REITs that do not define the terms in accordance with the current Nareit definition, or that interpret the current Nareit definition differently. The Company calculates Nareit FFO per diluted share as Nareit FFO divided by the number of fully diluted shares outstanding during a given operating period.

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

• Costs associated with hotel acquisitions or dispositions expensed during the period;
• Severance expense;
• Share-based compensation expense; and
• Other items that management believes are not representative of the Company’s current or future operating performance.

Occupancy

Occupancy represents the total number of room nights sold divided by the total number of room nights available at a hotel or group of hotels. Occupancy measures the utilization of the Company’s hotels’ available capacity. Management uses occupancy to gauge demand at a specific hotel or group of hotels in a given period. Occupancy levels also help management determine achievable Average Daily Rate (“ADR”) levels as demand for rooms increases or decreases.

Average Daily Rate

ADR (or rate) represents rooms revenue divided by total number of room nights sold in a given period. ADR measures average room price attained by a hotel and ADR trends provide useful information concerning the pricing environment and the nature of the customer base of a hotel or group of hotels. ADR is a commonly used performance measure in the hotel industry, and management uses ADR to assess pricing levels that the Company is able to generate by type of customer, as changes in rates have a more pronounced effect on overall revenues and incremental profitability than changes in occupancy, as described above.

Revenue per Available Room

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

Pro-forma

The Company presents certain data for its consolidated hotels on a pro-forma hotel basis as supplemental information for investors: Pro-forma Hotel Revenues, Pro-forma RevPAR, Pro-forma Occupancy, Pro-forma ADR, Pro-forma Hotel Adjusted EBITDA and Pro-forma Hotel Adjusted EBITDA Margin. The Company presents pro-forma hotel results to help the Company and its investors evaluate the ongoing operating performance of its hotels. The Company’s pro-forma metrics exclude results from property dispositions that have occurred through December 22, 2022 and include results from property acquisitions as though such acquisitions occurred on the earliest period presented.

Net Debt

Net debt, presented herein, is a non-GAAP financial measure that the Company uses to evaluate its financial leverage. Net debt is calculated as (i) long-term debt, including current maturities and excluding unamortized deferred financing costs; and (ii) the Company’s share of investments in affiliate debt, excluding unamortized deferred financing costs; reduced by (a) cash and cash equivalents; and (b) restricted cash and cash equivalents.

The Company believes Net debt provides useful information about its indebtedness to investors as it is frequently used by securities analysts, investors and other interested parties to compare the indebtedness of companies. Net debt should not be considered as a substitute to debt presented in accordance with U.S. GAAP. Net debt may not be comparable to a similarly titled measure of other companies.

For more information, contact:
Ian Weissman
Senior Vice President, Corporate Strategy
571-302-5591
iweissman@pkhotelsandresorts.com

For additional information or to receive press releases via e-mail, please visit our website at
www.pkhotelsandresorts.com