Note 11: Share-Based Compensation
We issue equity-based awards to our employees pursuant to the 2017 Omnibus Incentive Plan (the “2017 Employee Plan”) and our non-employee directors pursuant to the 2017 Stock Plan for Non-Employee Directors (the “2017 Director Plan”) both of which are amended and restated from time to time. An amendment and restatement of the 2017 Employee Plan was approved by our Board in February 2023 and approved by our stockholders in April 2023 to, among other changes, increase the number of shares available to be issued by 6,070,000, from 8,000,000 to 14,070,000 shares. As of December 31, 2023, 7,496,571 shares of common stock remain available for future issuance. The 2017 Director Plan provides that a maximum of 950,000 shares of our common stock may be issued, and as of December 31, 2023, 255,351 shares of common stock remain available for future issuance. For the years ended December 31, 2023, 2022 and 2021, we recognized $18 million, $17 million and $19 million of share-based compensation expense, respectively. As of December 31, 2023, unrecognized compensation expense was $20 million, which is expected to be recognized over a weighted-average period of 1.6 years. The total fair value of shares vested (calculated as the number of shares multiplied by the vesting date share price) during the years ended December 31, 2023, 2022 and 2021 was $7 million, $7 million and $18 million, respectively.
Restricted Stock Awards
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 years ended December 31, 2023, 2022 and 2021:
| | | | | | | | | | | |
| Number of Shares | | Weighted-Average Grant Date Fair Value |
Unvested at January 1, 2021 | 834,258 | | $ | 21.68 | |
| Granted | 434,486 | | 20.52 | |
| Vested | (456,357) | | 19.08 | |
| Forfeited | (23,065) | | 22.45 | |
Unvested at December 31, 2021 | 789,322 | | 22.52 | |
| Granted | 471,614 | | 18.16 | |
| Vested | (378,605) | | 22.51 | |
| Forfeited | (38,485) | | 20.28 | |
Unvested at December 31, 2022 | 843,846 | | 20.19 | |
| Granted | 696,356 | | 13.45 | |
| Vested | (539,133) | | 20.39 | |
| Forfeited | (18,484) | | 15.52 | |
Unvested at December 31, 2023 | 982,585 | | $ | 15.40 | |
Performance Stock Units
Performance Stock Units (“PSUs”) generally vest at the end of a three-year performance period and are subject to the achievement of a market condition based on a measure of our total shareholder return relative to the total shareholder return of the companies that comprise the FTSE Nareit Lodging Resorts Index (that have a market capitalization in excess of $1 billion as of the first day of the applicable performance period). The number of PSUs that may become vested ranges from zero to 200% of the number of PSUs granted to an employee, based on the level of achievement of the foregoing performance measure.
Additionally, in November 2020, we granted special awards with vesting of these awards subject to the achievement of eight increasing levels of our average closing sales price per share, from $11.00 to $25.00, over a consecutive 20 trading day period (“Share Price Target”). One-eighth of PSUs will vest at each date a Share Price Target is achieved and any PSUs remaining after a four-year performance period will be forfeited. As of December 31, 2023, six of the eight Share Price Targets were achieved and thus 75% of the awards granted were vested.
The following table provides a summary of PSUs for the years ended December 31, 2023, 2022 and 2021:
| | | | | | | | | | | |
| | Number of Shares | | Weighted-Average Grant Date Fair Value |
Unvested at January 1, 2021 | 1,078,555 | | $ | 18.70 | |
| Granted | 327,416 | | 27.16 | |
| Vested | (428,255) | | 16.33 | |
| Forfeited | (5,642) | | 20.29 | |
Unvested at December 31, 2021 | 972,074 | | 22.59 | |
| Granted | 393,225 | | 21.93 | |
| | | |
| Forfeited | (166,974) | | 34.47 | |
Unvested at December 31, 2022 | 1,198,325 | | 20.71 | |
| Granted | 590,805 | | 19.96 | |
| | | |
| Forfeited | (261,554) | | 24.80 | |
Unvested at December 31, 2023 | 1,527,576 | | $ | 19.72 | |
The grant date fair values of the awards that are subject to the achievement of market conditions based on total shareholder return were determined using a Monte Carlo simulation valuation model with the following assumptions:
| | | | | | | | | | | | | | | | | |
| | Year Ended December 31, |
| | 2023 | | 2022 | | 2021 |
| Expected volatility | 48.0 | % | | 57.5 | % | | 60.0 | % |
Dividend yield(1) | — | | — | | — |
| Risk-free rate | 4.3 | % | | 1.7 | % | | 0.2% - 0.3% |
| Expected term | 3 years | | 3 years | | 3 years |
____________________________________________________________________________________
(1)Dividends are assumed to be reinvested in shares of our common stock and dividends will not be paid unless shares vest.
Note 12: Earnings Per Share
The following table presents the calculation of basic and diluted earnings per share (“EPS”):
| | | | | | | | | | | | | | | | | |
| | Year Ended December 31, |
| | 2023 | | 2022 | | 2021 |
| | | | | |
| | (in millions, except per share amounts) |
| Numerator: | | | | | |
| Net income (loss) attributable to stockholders | $ | 97 | | | $ | 162 | | | $ | (459) | |
| Earnings attributable to participating securities | (2) | | — | | — |
| Net income (loss) attributable to stockholders, net of earnings allocated to participating securities | $ | 95 | | | $ | 162 | | | $ | (459) | |
| Denominator: | | | | | |
| Weighted average shares outstanding – basic | 214 | | 228 | | 236 |
| Unvested restricted shares | 1 | | — | | — |
| Weighted average shares outstanding – diluted | 215 | | 228 | | 236 |
| | | | | | |
Earnings (loss) per share – Basic(1) | $ | 0.44 | | | $ | 0.71 | | | $ | (1.95) | |
Earnings (loss) per share – Diluted(1) | $ | 0.44 | | | $ | 0.71 | | | $ | (1.95) | |
____________________________________________________________________________________
(1)Per share amounts are calculated based on unrounded numbers and are calculated independently for each period presented.
Certain of our outstanding equity awards were excluded from the above calculation of EPS for the years ended December 31, 2023, 2022 and 2021 because their effect would have been anti-dilutive.
Note 13: Hotel Management Operating and License Agreements
Management and Franchise Fees
We have management agreements, whereby we pay a base fee equal to a percentage of total revenues, as defined, as well as an incentive fee if specified financial performance targets are achieved. Our managers generally have sole responsibility for all activities necessary for the operation of the hotels, including establishing room rates, processing reservations and promoting and publicizing the hotels. Our managers also generally provide all employees for the hotels, prepare reports, budgets and projections, and provide other administrative and accounting support services to the hotels. We have consultative and limited approval rights with respect to certain actions of our managers, including entering into long-term or high value contracts, engaging in certain actions relating to legal proceedings, approving the operating budget, making certain capital expenditures and the hiring of certain management personnel.
Our management agreements have initial terms ranging from 5 to 30 years and allow for one or more renewal periods. Assuming all renewal periods are exercised by our hotel managers, the total term of our management agreements range from 5 to 70 years.
We also have franchise agreements for 4 hotels. The franchise agreements have an initial term of 13 to 20 years and cannot be extended without the franchisor’s consent.
Marketing Fees
Additionally, the management and franchise agreements generally require a marketing fee equal to a percentage of rooms revenues. Total marketing fees were $47 million, $45 million and $26 million for the years ended December 31, 2023, 2022 and 2021, respectively, and were included in other departmental and support expense in our consolidated statements of comprehensive income (loss).
Employee Cost Reimbursements
We are responsible for reimbursing our managers for certain employee related costs outside of payroll. These costs include contributions to a defined contribution 401(k) Retirement Savings Plan administered by our managers, union-
sponsored pension plans and other post-retirement plans. All of these plans are the responsibility of our managers and our obligation is only for the reimbursement of these costs for individuals who work at our hotel properties. Total employee cost reimbursements were $132 million, $117 million and $55 million for the years ended December 31, 2023, 2022 and 2021, respectively, and were included in the respective operating expenses line item in our consolidated statements of comprehensive income (loss) based upon the nature of services provided by such employees.
Note 14: Business Segment Information
As of December 31, 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:
•Gains or losses on sales of assets for both consolidated and unconsolidated investments;
•Costs associated with hotel acquisitions or dispositions expensed during the period;
•Severance expense;
•Share-based compensation expense;
•Impairment losses and casualty gains or losses; and
•Other items that we believe are not representative of our current or future operating performance.
The following table presents revenues for our consolidated hotels reconciled to our consolidated amounts and net income (loss) to Hotel Adjusted EBITDA:
| | | | | | | | | | | | | | | | | |
| | Year Ended December 31, |
| | 2023 | | 2022 | | 2021 |
| | | | | |
| | (in millions) |
| Revenues: | | | | | |
| Total consolidated hotel revenues | $ | 2,613 | | | $ | 2,426 | | | $ | 1,311 | |
| Other revenues | 85 | | | 75 | | | 51 | |
| Total revenues | $ | 2,698 | | | $ | 2,501 | | | $ | 1,362 | |
| | | | | |
| Net income (loss) | $ | 106 | | | $ | 173 | | | $ | (452) | |
| Other revenues | (85) | | | (75) | | | (51) | |
| Depreciation and amortization expense | 287 | | | 269 | | | 281 | |
| Corporate general and administrative expense | 65 | | | 63 | | | 62 | |
| Impairment and casualty loss | 204 | | | 6 | | | 9 | |
| Other operating expenses | 83 | | | 72 | | | 49 | |
| (Gain) loss on sales of assets, net | (15) | | | (13) | | | 5 | |
| Gain on derecognition of assets | (221) | | | — | | | — | |
| Interest income | (38) | | | (13) | | | (1) | |
| Interest expense | 207 | | | 217 | | | 228 | |
| Interest expense associated with hotels in receivership | 45 | | | 30 | | | 30 | |
| Equity in (earnings) losses from investments in affiliates | (11) | | | (15) | | | 7 | |
| Income tax expense | 38 | | | — | | | 2 | |
| Other (gain) loss, net | (4) | | | (96) | | | 7 | |
| Other items | 25 | | | 12 | | | 1 | |
| Hotel Adjusted EBITDA | $ | 686 | | | $ | 630 | | | $ | 177 | |
The following table presents total assets for our consolidated hotels, reconciled to total assets:
| | | | | | | | | | | |
| | December 31, |
| | 2023 | | 2022 |
| | | |
| | (in millions) |
| Consolidated hotels | $ | 9,406 | | | $ | 9,726 | |
| All other | 13 | | | 5 | |
| Total assets | $ | 9,419 | | | $ | 9,731 | |
Note 15: Commitments and Contingencies
As of December 31, 2023, we had outstanding commitments under third-party contracts of approximately $90 million for capital expenditures at our properties, of which $16 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, and $10 million relates to the complete renovation of all guestrooms, public spaces, and certain hotel infrastructure at the Casa Marina Key West, Curio Collection. Our contracts contain clauses that allow us to cancel all or some portion of the work. If cancellation of a contract occurred, our commitment would be any costs incurred up to the cancellation date, in addition to any costs associated with the discharge of the contract.
We are involved in litigation arising from the normal course of business, some of which includes claims for substantial sums, and may make certain indemnifications or guarantees to select buyers of our hotels as part of a sale process. We are also involved in claims and litigation that is not in the ordinary course of business in connection with the spin-off from Hilton. The spin-off agreements provide that Hilton will indemnify us from certain of these claims as well as
require us to indemnify Hilton for other claims. In addition, losses related to certain contingent liabilities could be apportioned to us under the spin-off agreements. In connection with our obligation to indemnify Hilton under the spin-off agreements, we have reserved approximately $8 million as of December 31, 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. In February 2021, we were required to make a payment to Hilton of approximately $11 million representing our share of: (i) the deposit required from Hilton by the ATO to further contest the claim and (ii) certain out-of-pocket expenses incurred by Hilton.
Additionally, as of December 31, 2023, Hilton remains subject to U.S. federal income tax examinations from 2011 through 2017, the year of our spin-off. Various income tax returns for Hilton filed with state, local and foreign jurisdictions remain subject to examination by the applicable taxing authorities.
Note 16: Supplemental Disclosures of Cash Flow Information
Interest paid during the years ended December 31, 2023, 2022 and 2021 was $215 million, $245 million and $242 million, respectively. The decrease in interest paid during the year ended December 31, 2023 as compared to the years ended December 31, 2022 and 2021 is primarily due to the cessation of debt service payments toward the SF Mortgage Loan beginning in June 2023.
We paid $7 million, $7 million and $31 million in income taxes during the years ended December 31, 2023, 2022 and 2021, respectively.
Capital expenditures included within accounts payable and accrued expenses in our consolidated balance sheets were $37 million, $33 million and $11 million during the years ended December 31, 2023, 2022 and 2021, respectively.
The following non-cash financing activity was excluded from the consolidated statements of cash flows:
During the year ended December 31, 2023:
•We declared $355 million of dividends that were unpaid and accrued as of December 31, 2023.
During the year ended December 31, 2022:
•We declared $56 million of dividends that were unpaid and accrued as of December 31, 2022.
Park Hotels & Resorts Inc.
Schedule III
Real Estate and Accumulated Depreciation
(Dollars in millions)
December 31, 2023
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | Initial Cost | | | | Gross Amounts at Which Carried at Close of Period | | | | | | | | | | |
| Hotel Property | | Encumbrances | | Land | | Building &
Improvements | | Furniture,
Fixtures &
Equipment | | Costs
Capitalized
Subsequent to
Acquisition | | Land | | Building & Improvements(1) | | Furniture,
Fixtures &
Equipment | | Total | | Accumulated
Depreciation | | Date of Construction | | Date Acquired(2) | | Life Upon
Which
Depreciation
is Computed |
| Caribe Hilton | | $ | — | | | $ | 38 | | | $ | 56 | | | $ | 7 | | | $ | 86 | | | $ | 40 | | | $ | 112 | | | $ | 35 | | | $ | 187 | | | $ | (58) | | | 1949 | | 10/24/2007 | | 3 | - | 40 years |
| DoubleTree Hotel Durango | | — | | | — | | | — | | | 2 | | | 5 | | | — | | | 2 | | | 5 | | | 7 | | | (6) | | | 1985 | | 10/24/2007 | | 3 | - | 40 years |
| DoubleTree Hotel Ontario Airport | | 30 | | | 14 | | | 58 | | | 3 | | | 21 | | | 13 | | | 64 | | | 19 | | | 96 | | | (41) | | | 1974 | | 10/24/2007 | | 3 | - | 40 years |
| DoubleTree Hotel San Diego – Mission Valley | | — | | | — | | | — | | | 2 | | | 17 | | | — | | | 10 | | | 9 | | | 19 | | | (14) | | | 1989 | | 10/24/2007 | | 3 | - | 40 years |
| DoubleTree Hotel San Jose | | — | | | 15 | | | 67 | | | 5 | | | 26 | | | 15 | | | 82 | | | 15 | | | 112 | | | (47) | | | 1980 | | 10/24/2007 | | 3 | - | 40 years |
| DoubleTree Hotel Seattle Airport | | — | | | — | | | — | | | 11 | | | 30 | | | 1 | | | 13 | | | 27 | | | 41 | | | (34) | | | 1969 | | 10/24/2007 | | 3 | - | 40 years |
| DoubleTree Hotel Sonoma Wine Country | | — | | | — | | | — | | | 4 | | | 12 | | | — | | | 6 | | | 10 | | | 16 | | | (12) | | | 1977 | | 10/24/2007 | | 3 | - | 40 years |
| Embassy Suites Austin Downtown South Congress | | — | | | — | | | 45 | | | 2 | | | 18 | | | — | | | 57 | | | 8 | | | 65 | | | (42) | | | 1983 | | 10/24/2007 | | 3 | - | 40 years |
| Hilton Boston Logan Airport | | — | | | — | | | 108 | | | 6 | | | 31 | | | — | | | 130 | | | 15 | | | 145 | | | (61) | | | 1999 | | 10/24/2007 | | 3 | - | 40 years |
| Hilton Chicago | | — | | | 69 | | | 233 | | | 12 | | | 193 | | | 71 | | | 377 | | | 60 | | | 508 | | | (188) | | | 1927 | | 10/24/2007 | | 3 | - | 40 years |
| Hilton Hawaiian Village Waikiki Beach Resort | | 1,275 | | | 925 | | | 807 | | | 17 | | | 444 | | | 983 | | | 1,098 | | | 112 | | | 2,193 | | | (537) | | | 1961 | | 10/24/2007 | | 3 | - | 40 years |
| Hilton McLean Tysons Corner | | — | | | 50 | | | 82 | | | 3 | | | (11) | | | 23 | | | 57 | | | 44 | | | 124 | | | (69) | | | 1987 | | 10/24/2007 | | 3 | - | 40 years |
| Hilton New Orleans Riverside | | — | | | 89 | | | 217 | | | 3 | | | 113 | | | 90 | | | 274 | | | 58 | | | 422 | | | (152) | | | 1977 | | 10/24/2007 | | 3 | - | 40 years |
| Hilton Oakland Airport | | — | | | — | | | 13 | | | 3 | | | 1 | | | — | | | 9 | | | 8 | | | 17 | | | (12) | | | 1970 | | 10/24/2007 | | 3 | - | 40 years |
| Hilton Salt Lake City Center | | — | | | — | | | — | | | 10 | | | 20 | | | — | | | 8 | | | 22 | | | 30 | | | (25) | | | 2002 | | 10/24/2007 | | 3 | - | 40 years |
| Hilton Santa Barbara Beachfront Resort | | 159 | | | 71 | | | 50 | | | 2 | | | 50 | | | 71 | | | 79 | | | 24 | | | 174 | | | (44) | | | 1986 | | 10/24/2007 | | 3 | - | 40 years |
| Hilton Seattle Airport & Conference Center | | — | | | — | | | 70 | | | 3 | | | 16 | | | — | | | 81 | | | 8 | | | 89 | | | (44) | | | 1961 | | 10/24/2007 | | 3 | - | 40 years |
| Hilton Short Hills | | — | | | 59 | | | 54 | | | 3 | | | (91) | | | 13 | | | 10 | | | 2 | | | 25 | | | (3) | | | 1988 | | 10/24/2007 | | 3 | - | 40 years |
| Hilton Waikoloa Village | | — | | | 160 | | | 340 | | | 25 | | | (57) | | | 112 | | | 293 | | | 63 | | | 468 | | | (184) | | | 1988 | | 10/24/2007 | | 3 | - | 40 years |
| New York Hilton Midtown | | — | | | 1,096 | | | 542 | | | 13 | | | 142 | | | 1,043 | | | 659 | | | 91 | | | 1,793 | | | (328) | | | 1963 | | 10/24/2007 | | 3 | - | 40 years |
| DoubleTree Hotel Washington DC – Crystal City | | — | | | 43 | | | 95 | | | 2 | | | 51 | | | 43 | | | 128 | | | 20 | | | 191 | | | (73) | | | 1982 | | 12/14/2007 | | 3 | - | 40 years |
| DoubleTree Hotel Spokane City Center | | 14 | | | 3 | | | 24 | | | 2 | | | 13 | | | 3 | | | 30 | | | 9 | | | 42 | | | (17) | | | 1986 | | 1/1/2010 | | 3 | - | 40 years |
| Hilton Orlando Lake Buena Vista | | — | | | — | | | 137 | | | 10 | | | 41 | | | — | | | 157 | | | 31 | | | 188 | | | (80) | | | 1983 | | 8/30/2010 | | 3 | - | 40 years |
| Embassy Suites Kansas City – Plaza | | — | | | — | | | 26 | | | 1 | | | 4 | | | — | | | 28 | | | 3 | | | 31 | | | (24) | | | 1973 | | 7/25/2014 | | 3 | - | 40 years |
| Signia by Hilton Orlando Bonnet Creek | | — | | | 15 | | | 377 | | | 31 | | | 141 | | | 18 | | | 507 | | | 39 | | | 564 | | | (108) | | | 2009 | | 2/12/2015 | | 3 | - | 40 years |
| Waldorf Astoria Orlando | | — | | | 34 | | | 274 | | | 29 | | | 63 | | | 36 | | | 322 | | | 42 | | | 400 | | | (106) | | | 2009 | | 2/12/2015 | | 3 | - | 40 years |
| Casa Marina Key West, Curio Collection | | — | | | 164 | | | 174 | | | 9 | | | 40 | | | 164 | | | 221 | | | 2 | | | 387 | | | (35) | | | 1920 | | 2/17/2015 | | 3 | - | 40 years |
| The Reach Key West, Curio Collection | | — | | | 57 | | | 67 | | | 3 | | | 19 | | | 57 | | | 80 | | | 9 | | | 146 | | | (23) | | | 1970 | | 2/17/2015 | | 3 | - | 40 years |
| Juniper Hotel Cupertino, Curio Collection | | — | | | 40 | | | 64 | | | 8 | | | 2 | | | 40 | | | 66 | | | 8 | | | 114 | | | (21) | | | 1973 | | 6/2/2015 | | 3 | - | 40 years |
| Boston Marriott Newton | | — | | | 24 | | | 74 | | | 15 | | | 3 | | | 24 | | | 76 | | | 16 | | | 116 | | | (20) | | | 1969 | | 9/18/2019 | | 3 | - | 40 years |
Park Hotels & Resorts Inc.
Schedule III
Real Estate and Accumulated Depreciation
(Dollars in millions)
December 31, 2023
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | Initial Cost | | | | Gross Amounts at Which Carried at Close of Period | | | | | | | | | | |
| Hotel Property | | Encumbrances | | Land | | Building &
Improvements | | Furniture,
Fixtures &
Equipment | | Costs
Capitalized
Subsequent to
Acquisition | | Land | | Building & Improvements(1) | | Furniture,
Fixtures &
Equipment | | Total | | Accumulated
Depreciation | | Date of Construction | | Date Acquired(2) | | Life Upon
Which
Depreciation
is Computed |
| Hilton Checkers Los Angeles | | $ | — | | | $ | 19 | | | $ | 44 | | | $ | 7 | | | $ | 2 | | | $ | 19 | | | $ | 46 | | | $ | 7 | | | $ | 72 | | | $ | (9) | | | 1927 | | 9/18/2019 | | 3 | - | 40 years |
| Hilton Denver City Center | | 54 | | | 14 | | | 163 | | | 21 | | | 2 | | | 14 | | | 164 | | | 22 | | | 200 | | | (33) | | | 1982 | | 9/18/2019 | | 3 | - | 40 years |
| Hyatt Centric Fisherman’s Wharf | | — | | | 33 | | | 122 | | | 11 | | | 4 | | | 33 | | | 125 | | | 12 | | | 170 | | | (24) | | | 1990 | | 9/18/2019 | | 3 | - | 40 years |
| Hyatt Regency Boston | | 128 | | | — | | | 177 | | | 14 | | | 1 | | | — | | | 179 | | | 14 | | | 193 | | | (32) | | | 1985 | | 9/18/2019 | | 3 | - | 40 years |
| Hyatt Regency Mission Bay Spa and Marina | | — | | | 5 | | | 118 | | | 15 | | | 5 | | | 6 | | | 121 | | | 16 | | | 143 | | | (26) | | | 1961 | | 9/18/2019 | | 3 | - | 40 years |
| JW Marriott San Francisco Union Square | | — | | | — | | | 191 | | | 13 | | | 5 | | | — | | | 196 | | | 13 | | | 209 | | | (30) | | | 1987 | | 9/18/2019 | | 3 | - | 40 years |
Royal Palm South Beach Miami, a Tribute
Portfolio Resort | | — | | | 16 | | | 139 | | | 12 | | | 8 | | | 16 | | | 146 | | | 13 | | | 175 | | | (26) | | | 1926 | | 9/18/2019 | | 3 | - | 40 years |
| W Chicago – City Center | | — | | | 20 | | | 76 | | | 14 | | | 2 | | | 20 | | | 78 | | | 14 | | | 112 | | | (17) | | | 1928 | | 9/18/2019 | | 3 | - | 40 years |
| W Chicago – Lakeshore | | — | | | 22 | | | 58 | | | 8 | | | 3 | | | 22 | | | 60 | | | 9 | | | 91 | | | (15) | | | 1965 | | 9/18/2019 | | 3 | - | 40 years |
| Total | | $ | 1,660 | | | $ | 3,095 | | | $ | 5,142 | | | $ | 361 | | | $ | 1,475 | | | $ | 2,990 | | | $ | 6,151 | | | $ | 934 | | | $ | 10,075 | | | $ | (2,620) | | | | | | | | | |
(1)Includes amounts classified as construction-in-progress.
(2)On October 24, 2007, a predecessor to our Parent became a wholly owned subsidiary of an affiliate of The Blackstone Group L.P. following the completion of the Blackstone Merger.
Park Hotels & Resorts Inc.
Schedule III
Real Estate and Accumulated Depreciation—(continued)
(Dollars in millions)
December 31, 2023
Notes:
(A)The change in total cost of properties for the fiscal years ended December 31, 2023, 2022 and 2021 is as follows:
| | | | | | | | | | | | | | | | | |
| Year Ended December 31, |
| 2023 | | 2022 | | 2021 |
| | | | | |
| (in millions) |
| Balance at beginning of period | $ | 11,008 | | | $ | 11,010 | | | $ | 11,376 | |
| Additions during period: | | | | | |
| Capital expenditures | 307 | | | 188 | | | 62 | |
Transfer to real estate assets(1) | — | | | — | | | 83 | |
| Deductions during period: | | | | | |
| Dispositions, including casualty losses and impairment loss on planned dispositions | (199) | | | (190) | | | (511) | |
Derecognition of assets(2) | (1,041) | | | — | | | — | |
| Balance at end of period | $ | 10,075 | | | $ | 11,008 | | | $ | 11,010 | |
____________________________________________________________________________________
(1)During 2021, four of our hotels that were previously managed by us were transitioned to a third-party hotel management company.
(2)For the year ended December 31, 2023, represents the derecognition of the Hilton San Francisco Hotels from our consolidated balance sheet in October 2023, when the receiver took control of the hotels.
(B)The change in accumulated depreciation for the fiscal years ended December 31, 2023, 2022 and 2021 is as follows:
| | | | | | | | | | | | | | | | | |
| Year Ended December 31, |
| 2023 | | 2022 | | 2021 |
| | | | | |
| (in millions) |
| Balance at beginning of period | $ | 2,712 | | | $ | 2,504 | | | $ | 2,241 | |
| Additions during period: | | | | | |
| Depreciation expense | 254 | | | 267 | | | 280 | |
Transfer to real estate assets(1) | — | | | — | | | 30 | |
| Deductions during period: | | | | | |
| Dispositions, including casualty losses and impairment loss on planned dispositions | (68) | | | (59) | | | (47) | |
Derecognition of assets(2) | (278) | | | — | | | — | |
| Balance at end of period | $ | 2,620 | | | $ | 2,712 | | | $ | 2,504 | |
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(1)During 2021, four of our hotels that were previously managed by us were transitioned to a third-party hotel management company.
(2)For the year ended December 31, 2023, represents the derecognition of the Hilton San Francisco Hotels from our consolidated balance sheet in October 2023, when the receiver took control of the hotels.
(C)The aggregate cost of real estate for U.S. federal income tax purposes is approximately $5.662 billion as of December 31, 2023.
