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Item 7. Management’s Discussion and Analysis

2026-03-12 compared with 2025-03-12 · 192 added, 194 removed, 490 unchanged (44% of the section changed)

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We operate in the direct hotel investment segment of the hotel lodging industry.

As of December 31, 2024, we owned interests in 15 hotel properties in seven states, the District of Columbia, Puerto Rico and St.

Virgin Islands with 3,807 total rooms, or 3,667 net rooms, excluding those attributable to our joint venture partner.

As of December 31, 2025, we owned interests in 13 hotel properties in six states, the District of Columbia, Puerto Rico and St.

Virgin Islands with 3,028 total rooms.

The hotel properties in our current portfolio are predominantly located in U.S.

urban markets and resort locations with favorable growth characteristics resulting from multiple demand generators.

We own 14 of our hotel properties directly, and the remaining one hotel property, through an investment in a majority-owned consolidated entity.

We are advised by Ashford LLC through an advisory agreement.

We are advised by Ashford Hospitality Advisors LLC (“Ashford LLC”) through an advisory agreement.

Ashford LLC is a subsidiary of Ashford Inc.

All of the hotel properties in our portfolio are currently asset-managed by Ashford LLC.

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instead, we contractually engage hotel management companies to operate them for us under management contracts.

As of December 31, 2024, Remington Hospitality , a subsidiary of Ashford Inc., managed four of our 15 hotel properties.

As of December 31, 2025, Remington Hospitality, a subsidiary of Ashford Inc., managed five of our 13 hotel properties.

Third-party management companies managed the remaining hotel properties.

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has an ownership interest.

These products and services include, but are not limited to, design and construction services, debt placement and related services, broker-dealer and distribution services, audio visual services, real estate advisory and brokerage services, insurance policies covering general liability, workers compensation and claims services, hypoallergenic premium rooms, watersport activities, travel/transportation services, mobile key technology and cash management services.

These products and services include, but are not limited to, design and construction services, debt placement and related services, audio visual services, real estate advisory and brokerage services, insurance policies covering general liability, workers compensation and business automobile claims, insurance claims services, hypoallergenic premium rooms, watersport activities, travel/transportation services and cash management services.

Recent Developments

On July 2, 2024, Braemar, Ashford Trust and Ashford Inc.

(collectively with the Company, Ashford Trust and each of Ashford Inc.’s, the Company’s and Ashford Trust’s respective affiliates (including Stirling Hotels & Resorts, Inc.) and any entity advised by Ashford Inc., the “Company Group”) entered into a Cooperation Agreement (the “Agreement”) with Blackwells Capital LLC, Blackwells Onshore I LLC, Blackwells Holding Co.

LLC, Vandewater Capital Holdings, LLC, Blackwells Asset Management LLC, BW Coinvest Management I LLC and Jason Aintabi (collectively, the “Blackwells Parties”) regarding the withdrawal of the Blackwells Parties’ proxy campaign, dismissal of pending litigation involving the parties and certain other matters.

Pursuant to the Agreement, the Blackwells Parties have agreed to withdraw (i) the notice delivered to the Company on March 10, 2024 purporting to nominate four director candidates to the Company’s board of directors (the “Board”) and make certain other proposals and (ii) the definitive proxy statement filed with the U.S.

Securities and Exchange Commission (the “SEC”) on April 3, 2024 to solicit proxies from stockholders of the Company to vote in favor of the Blackwells Parties’ director nominees and proposals.

The Blackwells Parties have also agreed to specified standstill restrictions with respect to the Company Group, which will expire on July 2, 2034.

During the standstill period, the Blackwells Parties are required to (i) appear in person or by proxy at each meeting of stockholders of the members of the Company Group in which they beneficially own shares of stock and vote any Blackwells Parties’ shares then beneficially owned by them in accordance with the recommendation of the board of directors of such member of the Company Group on any proposals considered at such meeting and (ii) deliver consents or consent revocations in any action by written consent by stockholders of any member of the Company Group in which they beneficially own shares in accordance with the recommendation of the board of directors of such member of the Company Group.

The Agreement also provides for the voluntary dismissal, with prejudice, of the consolidated action previously pending in the U.S.

District Court for the Northern District of Texas to which the Company, Blackwells Capital LLC and certain of their respective related parties are parties (the “Consolidated Litigation”).

Pursuant to the Agreement, the Consolidated Litigation was voluntarily dismissed, with prejudice, on July 3, 2024.

The Company has agreed to reimburse Blackwells Capital LLC, in an amount agreed upon by the parties, for the Blackwells Parties’ reasonable attorneys’ fees and expenses incurred in connection with the Consolidated Litigation and related matters.

Additionally, pursuant to the Agreement, the Board was required to take steps to identify and select one additional individual to be appointed to the Board as an independent director (the “Additional Board Member”).

The Board was required to promptly notify Blackwells Capital LLC of its selection of the Additional Board Member and to consider any input Blackwells Capital LLC may have with respect to the Additional Board Member.

In accordance with the Cooperation Agreement, on October 4, 2024, the Board increased the number of directors of the Company from eight to nine and appointed Mr.

Shah as the Additional Board Member to serve until the Company’s next annual meeting of stockholders and until his successor is duly elected and qualified.

The Agreement contains various other obligations and provisions applicable to the Company Group and the Blackwells Parties, including a mutual release of claims and mutual non-disparagement.

Concurrently and in connection with the Agreement, certain of the parties thereto have also entered into a Share Ownership Agreement (the “Share Ownership Agreement”) and a Loan Agreement (the “Loan Agreement”), pursuant to which agreements the Company will provide to BW Coinvest I, LLC (“Borrower”) an unsecured loan (the “Loan”).

The proceeds from the Loan will be used to reimburse Borrower for 70% of the amount expended by Borrower to purchase on the open market a total of 3,500,000 shares of the Company’s common stock (the “Purchased Shares”) within six months of the date of Loan Agreement, at a price per Purchased Share not to exceed $10 and subject to the other limitations set forth therein.

The Loan has a term of five years (the “Term”), is guaranteed by Jason Aintabi, Vandewater Capital Holdings, LLC, Blackwells Holding Co.

LLC, and Blackwells Asset Management LLC and shall bear payment-in-kind interest during the Term at a rate equal to the sum of (a) Term SOFR (as defined in the Loan Agreement) and (b) 3.00% (three hundred basis points) per annum.

The Company has agreed to reimburse Blackwells Capital LLC, in an amount agreed upon by the parties, for the Blackwells Parties’ reasonable due diligence expenses incurred on or prior to the date of the Share Ownership Agreement.

As of March 10, 2025, the Company has loaned approximately $8.1 million that has been used to purchase 3.5 million shares of Braemar common stock.

The Company, Braemar OP, Braemar TRS, Ashford Inc.

and Ashford Hospitality Advisors LLC (together with Ashford Inc., the “Advisor”), are parties to that certain Fifth Amended and Restated Advisory Agreement, dated as of April 23, 2018 (as amended, the “Advisory Agreement”).

The Company has a mortgage loan maturing in June 2025 with an outstanding principal balance of approximately $293 million (the “Mortgage Loan”) secured by four hotel properties:

The Notary Hotel;

Sofitel Chicago Magnificent Mile;

and Marriott Seattle Waterfront (the “Hotel Properties”).

On August 8, 2024, the parties to the Advisory Agreement entered into a Limited Waiver Under Advisory Agreement (the “Waiver Agreement”) that provides, among other things, as follows:

(i) From August 8, 2024 until the earlier of (a) November 15, 2025 and (b) the refinancing of the Mortgage Loan (the “Loan Outside Date”), the Advisor waives the operation of Section 12.4(a) of the Advisory Agreement that would permit the Advisor to terminate the Advisory Agreement occurring solely as a result from the sale or disposition of one or more of the Hotel Properties as a result of a mortgage foreclosure, deed-in-lieu of mortgage foreclosure, mezzanine loan foreclosure or an assignment in-lieu of a mezzanine loan foreclosure following the failure of the Company to pay, upon the maturity of the Mortgage Loan, all amounts due and payable thereunder (the “Limited Waiver”);

(ii) Upon the satisfaction of certain conditions, the Company may request the Advisor agree to amend the Waiver Agreement to extend the Loan Outside Date for a period not to exceed ninety (90) days from November 15, 2025 and if the Advisor agrees to such amendment, the Advisor shall not be entitled to any further consideration in respect thereof;

(iii) If the members of the board of directors change such that members who constitute the Board as of August 8, 2024 (the “Incumbent Board”) no longer constitute at least a majority of the board of directors (other than those whose election to the board of directors is approved or recommended to stockholders of the Company by a vote of at least a majority of the Incumbent Board), the Limited Waiver shall be null and void ab initio (but the consideration provided by the Company to the Advisor as described in item (iv) below shall remain in force);

(iv) In exchange for the Limited Waiver and the other agreements provided by the Advisor in the Waiver Agreement, the Company agrees to pay the Advisor an amount equal to the Advisor’s obligation under the Advisor’s current employment agreement with Richard J.

Stockton, the Company’s President and Chief Executive Officer (the “Stockton Employment Agreement”), to pay Mr.

Stockton a multiple of his Base Salary (as defined in the Stockton Employment Agreement) that becomes payable by the Advisor to Mr.

Stockton as the result of the occurrence of certain events as more fully described in the Waiver Agreement.

On January 14, 2025, the Company amended its mortgage loan secured by the 170-room Ritz-Carlton Lake Tahoe.

The terms of the amendment included a $10.0 million principal pay down, extending the current maturity date to July 2025, an interest rate reduction to SOFR + 3.25%, and one six-month extension option subject to satisfaction of certain conditions.

The mortgage loan had an initial maturity date in January 2025.

On March 7, 2025, the Company refinanced its $293.2 million mortgage loan secured by The Clancy, The Notary Hotel, Marriott Seattle Waterfront, and Sofitel Chicago Magnificent Mile, which had an interest rate of SOFR + 2.66% and a final maturity date in June of 2025 and its $62.0 million mortgage loan secured by The Ritz-Carlton Reserve Dorado Beach, which had an interest rate of SOFR + 4.75% and a final maturity date in March of 2026.

The new $363.0 million mortgage loan bears interest at a floating interest rate of SOFR + 2.52% and has a two-year initial term with three one-year extension options, subject to the satisfaction of certain conditions.

The mortgage loan is secured by five hotels:

The Clancy, The Notary Hotel, Marriott Seattle Waterfront, Sofitel Chicago Magnificent Mile, and The Ritz-Carlton Reserve Dorado Beach.

The $363.0 million mortgage loan amount represents an approximate 49% loan-to-value based on third-party appraisals completed by the lender.

The appraisals valued the hotels at approximately $742 million based on the sum of their “as-is” values.

On March 10, 2025, we entered into a Limited Waiver Under Advisory Agreement with Ashford Inc.

and Ashford LLC (the “2025 Advisory Agreement Limited Waiver”).

Pursuant to the 2025 Advisory Agreement Limited Waiver, the Company, the Operating Partnership, TRS and the Advisor waive the operation of any provision in our advisory agreement that would otherwise limit the ability of the Company in its discretion, at the Company’s cost and expense, to award during the first and second fiscal quarters of calendar year 2025, cash incentive compensation to employees and other representatives of the Advisor.

On August 26, 2025, Braemar entered into an agreement with Ashford Inc.

to explore a potential sale of Braemar.

Pursuant to the Letter Agreement, Braemar and Ashford Inc.

agreed that the termination fee payable to Ashford Inc.

under the advisory agreement is $574.8 million (exclusive of accrued fees).

However, Braemar and Ashford Inc.

have agreed to the payment of a discounted aggregate amount of $480.0 million plus accrued fees.

received a $17.0 million payment upon execution of the agreement.

The $17.0 million payment will be credited against other amounts due to Ashford Inc.

from Braemar if the sale of the Company does not occur before July 1, 2028.

On December 22, 2025, Braemar entered into the Amendment.

The Amendment was entered into in order to eliminate unintended ambiguity regarding the circumstances under which the termination fees become due and payable to Ashford Inc.

and the timing of payment in order to more fully reflect the parties’ original intent under the Letter Agreement and ensure consistency across potential transaction structures in how the proceeds from a Company Sale Transaction (as defined in the Letter Agreement) are applied.

On November 6, 2025, we sold The Clancy pursuant to an Agreement of Purchase and Sale, entered into effective October 6, 2025, for $115.0 million in cash, subject to customary pro-rations and adjustments.

Additionally, the Company repaid approximately $64.7 million on the mortgage loan that was partially secured by the hotel property.

On February 20, 2026, our board of directors, in consultation with counsel, in compliance with Article II, Section 12 of the Company’s bylaws, voted unanimously (with Mr.

Ghassemieh recused) to determine that Mr.

Ghassemieh was in breach of the cooperation agreement entered into on August 25, 2025 between the Company, Ashford Trust, Ashford Inc.

Ghassemieh (the “Ghassemieh Agreement”).

Accordingly, pursuant to Section 4(a)(ii) of the Ghassemieh Agreement, Mr.

Ghassemieh’s irrevocable resignation letter executed by Mr.

Ghassemieh in connection with the Ghassemieh Agreement became effective on February 20, 2026.

On March 5, 2026, Ashford Inc.

and Ashford LLC agreed with Deric Eubanks, the Chief Financial Officer of Ashford Inc., and Ashford LLC that, effective March 31, 2026 (the “Termination Date”), Mr.

Eubanks would terminate employment with and service to Ashford Inc., Ashford LLC and their affiliates.

Eubanks is also the Chief Financial Officer of the Company and Ashford Trust and accordingly his service as Chief Financial Officer of each of the Company and Ashford Trust will also end effective as of the Termination Date.

Effective on the Termination Date, Justin Coe, the Company’s current Chief Accounting Officer and principal accounting officer, will serve as the principal financial officer of the Company.

Key Indicators of Operating Performance

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We also use RevPAR to compare the results of our hotels between periods and to analyze results of our comparable hotels (comparable hotels represent hotels we have owned for the entire period).

RevPAR improvements attributable to increases in occupancy are generally accompanied by increases

in most categories of variable operating costs.

RevPAR improvements attributable to increases in occupancy are generally accompanied by increases in most categories of variable operating costs.

RevPAR improvements attributable to increases in ADR are generally accompanied by increases in limited categories of operating costs, such as management fees and franchise fees.

RevPAR changes that are primarily driven by changes in occupancy have different implications for overall revenues and profitability than changes that are driven primarily by changes in ADR.

For example, an increase in occupancy at a hotel would lead to additional variable operating costs (including housekeeping services, utilities and room supplies) and could also result in increased other operating department revenue and expense.

Changes in ADR typically have a greater impact on operating margins and profitability as they do not have a substantial effect on variable operating costs.

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Depreciation and amortization 92,578 98,733 6,155 6.2

Impairment charges

54,492 — (54,492)

Advisory services fee 29,186 30,487 1,301 4.3

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Total expenses 714,448 687,819 (26,629) 3.9

Gain (loss) on disposition of assets and hotel property

Gain (loss) on disposition of assets and hotel properties

82,797 88,165 (5,368) (6.1)

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The hotel properties listed below are not comparable hotel properties for the periods indicated and all other hotel properties are considered comparable hotel properties.

The following disposition affects reporting comparability related to our consolidated financial statements:

The following dispositions affect reporting comparability related to our consolidated financial statements:

Hotel Property Location Type Date

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July 17, 2024

Marriott Seattle Waterfront

Seattle, Washington

August 7, 2025

San Francisco, California

November 6, 2025

The following table illustrates the key performance indicators of all hotel properties that were included in our results of operations during the year ended December 31, 2025 and 2024:

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Total hotel revenue (in thousands) $ 704,015 $ 728,404

The following table illustrates the key performance indicators of the 15 hotel properties that were owned for the full year ended December 31, 2024 and 2023:

The following table illustrates the key performance indicators of the 13 comparable hotel properties that were owned for the full year ended December 31, 2025 and 2024:

Year Ended December 31,

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Net Income (Loss) Attributable to the Company.

Net loss attributable to the Company decreased $25.3 million from a net loss of $27.0 million for the year ended December 31, 2023 (“2023”) to $1.7 million for the year ended December 31, 2024 (“2024”), as a result of the factors discussed below.

Net loss attributable to the Company increased $20.6 million from a $1.7 million loss for the year ended December 31, 2024 (“2024”) to a $22.3 million loss for the year ended December 31, 2025 (“2025”), as a result of the factors discussed below.

Rooms Revenue .

Rooms revenue decreased $12.5 million to $452.4 million during 2024 compared to 2023 primarily due to the sale of the Hilton La Jolla Torrey Pines in July 2024.

During 2024, we experienced an increase of 0.1% in room rates and a 69 basis point increase in occupancy compared to 2023.

Rooms revenue decreased $23.4 million to $429.0 million during 2025 compared to 2024 primarily due to the sales of Marriott Seattle Waterfront in August 2025 and Hilton La Jolla Torrey Pines in July 2024.

During 2025, our 13 comparable hotel properties experienced a 3.7% increase in room rates and a 181 basis point decrease in occupancy compared to 2024.

Fluctuations in rooms revenue between 2025 and 2024 are a result of the changes in occupancy and ADR between 2025 and 2024 as reflected in the table below (dollars in thousands):

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$ (635) (432) 4.4 %

Marriott Seattle Waterfront

1,907 227 3.1 %

The Notary Hotel (1,347) (183) (1.8) %

(2,747) (453) (2.4) %

Sofitel Chicago Magnificent Mile (265) (271) 3.2 %

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Park Hyatt Beaver Creek Resort & Spa (1)

(1,164) (948) 14.7 %

Hotel Yountville (1)

(1,222) (542) (1.6) %

The Ritz-Carlton Sarasota (2)

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Non-comparable

Hilton La Jolla Torrey Pines $ (13,234) 29 (0.9) %

Hilton La Jolla Torrey Pines $ (15,500) n/a n/a

Marriott Seattle Waterfront (11,874) 193 (0.5) %

1,813 616 14.9 %

(1) This hotel was under renovation during 2025.

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Food and beverage revenue decreased $1.7 million, or 0.9%, to $179.5 million during 2025 compared to 2024.

We experienced an aggregate decrease in food and beverage revenue of $4.7 million at seven comparable hotel properties as well as a decrease of $6.6 million at Hilton La Jolla Torrey Pines.

These decreases were partially offset by an aggregate increase of approximately $7.2 million at Four Seasons Resort Scottsdale, The Ritz-Carlton St.

Thomas, The Notary Hotel, Sofitel Chicago Magnificent Mile, Marriott Seattle Waterfront, Capital Hilton, Hotel Yountville, and Pier House Resort & Spa.

We experienced an aggregate decrease in food and beverage revenue of $4.7 million at The Ritz-Carlton St.

Thomas, Cameo Beverly Hills, Capital Hilton and Park Hyatt Beaver Creek Resort & Spa and a decrease of $11.3 million due to the sales of The Clancy, Marriott Seattle Waterfront and Hilton La Jolla Torrey Pines.

These decreases were partially offset by an aggregate increase of approximately $14.3 million at nine comparable hotel properties.

Other Hotel Revenue .

Other hotel revenue, which consists mainly of condo management fees, health center fees, resort fees, golf, telecommunications, parking and rentals, increased $5.7 million, or 6.4%, to $94.8 million during 2024 compared to 2023.

This increase is attributable to higher other hotel revenue of $9.6 million at 12 comparable hotel properties.

These increases were partially offset by a decrease of $3.0 million at Hilton La Jolla Torrey Pines as well as an aggregate decrease of approximately $943,000 at The Ritz-Carlton Reserve Dorado Beach, The Ritz-Carlton Lake Tahoe, and The Ritz-Carlton St.

Other hotel revenue, which consists mainly of condominium management fees, health center fees, resort fees, golf, telecommunications, parking and rentals, increased $694,000, or 0.7%, to $95.5 million during 2025 compared to 2024.

This increase is attributable to higher other hotel revenue of $7.5 million at eight comparable hotel properties.

These increases were partially offset by a decrease of $4.9 million due to the sales of The Clancy, Marriott Seattle Waterfront and Hilton La Jolla Torrey Pines and an aggregate decrease of approximately $1.9 million at Park Hyatt Beaver Creek Resort & Spa, Cameo Beverly Hills, The Ritz-Carlton St.

Thomas, Four Seasons Resort Scottsdale and Hotel Yountville.

Rooms Expense .

Rooms expense increased $1.0 million, or 1.0%, to $106.5 million in 2024 compared to 2023.

This increase is attributable to an aggregate increase in rooms expense of $4.3 million at nine comparable hotel properties.

These increases were partially offset by an aggregate decrease of approximately $1.0 million at The Ritz-Carlton St.

Thomas, Bardessono Hotel and Spa, Hotel Yountville, The Clancy, Park Hyatt Beaver Creek Resort & Spa and Cameo Beverly Hills, as well as a decrease of $2.3 million at Hilton La Jolla Torrey Pines.

Rooms expense decreased $2.1 million, or 2.0%, to $104.4 million in 2025 compared to 2024.

This decrease is attributable to an aggregate decrease in rooms expense of $646,000 at Sofitel Chicago Magnificent Mile, Park Hyatt Beaver Creek Resort & Spa, Pier House Resort & Spa and The Notary Hotel and a decrease of $5.9 million due to the sales of The Clancy, Marriott Seattle Waterfront and Hilton La Jolla Torrey Pines.

These decreases were partially offset by an aggregate increase of $4.4 million at nine comparable hotel properties.

Food and Beverage Expense .

Food and beverage expense increased $1.4 million, or 0.9%, to $145.9 million during 2024 compared to 2023.

This increase is attributable to higher food and beverage expense of $6.3 million at twelve comparable hotel properties.

These increases were partially offset by an aggregate decrease of approximately $1.5 million at The Ritz-Carlton Lake Tahoe, Cameo Beverly Hills and Bardessono Hotel and Spa, as well as a decrease of $3.5 million at Hilton La Jolla Torrey Pines.

Food and beverage expense decreased $4.1 million, or 2.8%, to $141.8 million during 2025 compared to 2024.

This decrease is attributable to lower aggregate food and beverage expense of approximately $2.7 million at seven comparable hotel properties and a decrease of $7.0 million due to the sales of The Clancy, Marriott Seattle Waterfront and Hilton La Jolla Torrey Pines.

These decreases were partially offset by an aggregate increase of approximately $5.6 million at The Ritz-Carlton Sarasota, The Ritz-Carlton Lake Tahoe, The Ritz-Carlton Reserve Dorado Beach, Capital Hilton, Pier House Resort & Spa and The Notary Hotel.

Other Operating Expenses .

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Direct expenses were 4.7% of total hotel revenue in 2025 and 4.5% in 2024.

The increase in direct expenses is associated with higher direct expenses of approximately $1.8 million at nine comparable hotel properties.

These increases were partially offset by lower direct expenses of $471,000 at The Ritz-Carlton Reserve Dorado Beach, Bardessono Hotel and Spa, Cameo Beverly Hills, The Clancy, The Notary Hotel, and Capital Hilton, as well as $402,000 at Hilton La Jolla Torrey Pines.

The decrease in indirect expenses comprises decreases in:

(i) incentive management fees of $1.9 million comprising an aggregate decrease of $1.8 million at our 15 comparable hotel properties and a decrease of $89,000 at the one disposed hotel property;

(ii) lease expense of $2.3 million comprising of a decrease of $2.3 million at the one disposed hotel property partially offset by an aggregate increase of $8,000 at our 15 comparable hotel properties;

(iii) energy costs of $907,000 comprising a decrease of $911,000 at the one disposed hotel property partially offset by an aggregate decrease of $4,000 at our 15 comparable hotel properties.

These decreases are partially offset by increases in:

(i) general and administrative costs of $618,000 comprising an aggregate increase of $2.2 million at our 15 comparable hotel properties partially offset by a decrease of $1.6 million at the one disposed hotel property;

(ii) repairs and maintenance of $1.1 million comprising an aggregate increase of $1.6 million at our 15 comparable hotel properties partially offset by a decrease of $516,000 at the one disposed hotel property;

and (ii) marketing costs of $334,000 comprising an aggregate increase of $1.9 million at our 15 comparable hotel properties partially offset by a decrease of $1.6 million at the one disposed hotel property.

The increase in direct expenses is associated with higher direct expenses of $1.6 million at The Ritz-Carlton Sarasota, Four Seasons Resort Scottsdale, The Ritz-Carlton Lake Tahoe, The Notary Hotel, The Ritz-Carlton Reserve Dorado Beach, Sofitel Chicago Magnificent Mile and Cameo Beverly Hills partially offset by lower direct expenses of approximately $400,000 at six comparable hotel properties and a decrease of $759,000 due to the sales of The Clancy, Marriott Seattle Waterfront and Hilton La Jolla Torrey Pines.

The decrease in indirect expenses is comprised of decreases in:

(i) lease expense of $2.2 million comprising of a decrease of $1.9 million from the three disposed hotel properties and an aggregate decrease of $299,000 at our 13 comparable hotel properties;

(ii) marketing costs of $1.4 million comprising an aggregate decrease of $3.5 million from the three disposed hotel properties partially offset by an increase of $2.1 million at our 13 comparable hotel properties;

and (iii) incentive management fees of $280,000 including $507,000 from the three disposed hotel properties partially offset by an increase of $227,000 at our 13 comparable hotel properties.

These decreases were partially offset by increases in:

(i) general and administrative costs of $1.3 million comprising an aggregate increase of $5.4 million at our 13 comparable hotel properties partially offset by a decrease of $4.2 million from the three disposed hotel properties;

(ii) repairs and maintenance of $230,000 comprising an aggregate increase of $1.6 million at our 13 comparable hotel properties partially offset by a decrease of $1.4 million from the three disposed hotel properties;

and (iii) energy costs of $96,000 comprising an aggregate increase of $1.5 million at our 13 comparable hotel properties partially offset by a decrease of $1.4 million from the three disposed hotel properties.

Management Fees .

Base management fees increased $239,000, or 1.0%, to $23.5 million in 2024 compared to 2023.

Management fees increased $1.4 million at seven comparable hotel properties.

These increases were partially offset by an aggregate decrease of $448,000 at Cameo Beverly Hills, The Ritz-Carlton Reserve Dorado Beach, The Ritz-Carlton St.

Thomas, Bardessono Hotel and Spa, The Clancy, Pier House Resort & Spa, Park Hyatt Beaver Creek Resort & Spa, and Hotel Yountville, as well as a decrease of $685,000 at Hilton La Jolla Torrey Pines.

Base management fees decreased $1.5 million, or 6.4%, to $22.0 million in 2025 compared to 2024.

Management fees decreased $852,000 at eight comparable hotel properties and $1.2 million due to the sales of The Clancy, Marriott Seattle Waterfront and Hilton La Jolla Torrey Pines.

These decreases were partially offset by an aggregate increase of $577,000 at The Ritz-Carlton Reserve Dorado Beach, Four Seasons Resort Scottsdale, The Notary Hotel, Pier House Resort & Spa and Hotel Yountville.

Property Taxes, Insurance and Other .

Property taxes, insurance and other increased $3.9 million, or 10.0%, to $42.5 million in 2024 compared to 2023.

This increase is primarily attributable to an increase of $4.1 million at the Sofitel Chicago

Magnificent Mile related to a property tax refund received in 2023 and an aggregate increase of $2.7 million at 12 comparable hotel properties.

These increases were partially offset by an aggregate decrease of approximately $620,000 at Four Seasons Resort Scottsdale and Park Hyatt Beaver Creek Resort & Spa and a decrease of $1.2 million at Hilton La Jolla Torrey Pines.

Property taxes, insurance and other decreased $8.3 million, or 19.4%, to $34.3 million in 2025 compared to 2024.

This decrease is primarily attributable to a decrease of $4.9 million due to the sales of The

Clancy, Marriott Seattle Waterfront and Hilton La Jolla Torrey Pines and an aggregate decrease of $3.7 million at nine comparable hotel properties.

These decreases were partially offset by an aggregate increase of approximately $392,000 at Park Hyatt Beaver Creek Resort & Spa, Capital Hilton, Pier House Resort & Spa and Four Seasons Resort Scottsdale.

Depreciation and Amortization .

Depreciation and amortization increased $5.5 million, or 5.9%, to $98.7 million for 2024 compared to 2023.

This increase is comprised of an aggregate increase of $11.6 million at ten comparable hotel properties.

These increases were partially offset by an aggregate decrease of $4.3 million at The Notary Hotel, The Clancy, Pier House Resort & Spa, The Ritz-Carlton St.

Thomas and Sofitel Chicago Magnificent Mile, primarily due to fully depreciated assets, as well as a decrease of $1.8 million at Hilton La Jolla Torrey Pines.

Depreciation and amortization decreased $6.2 million, or 6.2%, to $92.6 million for 2025 compared to 2024.

This decrease of $9.1 million is due to the sales of The Clancy, Marriott Seattle Waterfront and Hilton La Jolla Torrey Pines and an aggregate decrease of $6.3 million at The Ritz-Carlton St.

Thomas, Capital Hilton, The Notary Hotel, Bardessono Hotel and Spa and Sofitel Chicago Magnificent Mile.

These decreases were partially offset by an aggregate increase of $9.3 million at eight comparable hotel properties.

Impairment Charges .

We recorded an impairment charge of approximately $54.5 million in 2025 related to the reductions to the expected holding periods of the hotel properties.

These charges include $30.3 million for the Sofitel Chicago Magnificent Mile, $15.6 million for Hotel Yountville and $8.7 million for Bardessono Hotel & Spa as the hotel properties’ net book values exceeded their estimated fair values.

There were no impairment charges in 2024.

Advisory Services Fee.

Advisory services fee decreased $602,000, or 1.9%, to $30.5 million in 2024 compared to 2023 due to lower equity-based compensation of $6.5 million and base advisory fee of $144,000, partially offset by higher reimbursable expenses of $3.3 million and a higher incentive fee of $2.7 million.

Advisory services fee decreased $1.3 million, or 4.3%, to $29.2 million in 2025 compared to 2024 due to lower equity-based compensation of $2.7 million and a lower incentive fee of $1.3 million, partially offset by higher reimbursable expenses of $2.3 million and a higher base advisory fee of $452,000.

In 2025, we recorded an advisory services fee of $29.2 million, which included a base advisory fee of $14.3 million, reimbursable expenses of $13.9 million, an incentive fee of $1.4 million and a credit to expense of $451,000 associated with equity grants of our common stock and LTIP units awarded to the officers and employees of Ashford Inc.

In 2024, we recorded an advisory services fee of $30.5 million, which included a base advisory fee of $13.8 million, reimbursable expenses of $11.6 million, $2.3 million associated with equity grants of our common stock and LTIP units awarded to the officers and employees of Ashford Inc.

and an incentive fee of $2.7 million.

In 2023, we recorded an advisory services fee of $31.1 million, which included a base advisory fee of $14.0 million, reimbursable expenses of $8.4 million and $8.8 million associated with equity grants of our common stock and LTIP units awarded to the officers and employees of Ashford Inc.

Corporate General and Administrative .

Corporate general and administrative expense was $14.4 million in 2024 compared to expense of $13.5 million in 2023.

The increase in corporate general and administrative expenses is primarily attributable to higher professional fees of $3.9 million and $6.0 million of reimbursed legal costs in 2024 as well as higher public company costs of $69,000.

These increases were partially offset by lower miscellaneous expenses of $299,000 and lower reimbursed operating expenses of Ashford Securities of $8.9 million.

The decrease in Ashford Securities reimbursed operations expenses was related to a revision to the estimated contribution amount associated with the Fourth Amended and Restated Contribution Agreement with Ashford Securities that resulted in a $4.5 million credit to expense in 2024.

Gain (loss) on disposition of assets and hotel property .

Corporate general and administrative expense was $11.8 million in 2025 and consisted of $11.6 million in professional fees, $3.2 million of public company costs, $1.2 million related to Ashford Securities and $1.2 million in miscellaneous expenses.

These expenses were partially offset by an expense reduction of $5.4 million from an insurance recovery for prior legal expenses.

Corporate general and administrative expense was $14.4 million in 2024 and consisted of $8.9 million in professional fees, $6.0 million of reimbursed legal costs, $2.3 million in public company costs, and $1.7 million in miscellaneous expenses.

Additionally, during 2024 there was a revision to the estimated contribution amount associated with the Fourth Amended and Restated Contribution Agreement with Ashford Securities that resulted in a $4.5 million reduction to expense.

Gain (loss) on disposition of assets and hotel properties .

In 2025, we recorded gains of approximately $82.8 million primarily related to the sales of Seattle Marriott Waterfront and The Clancy.

In 2024 we recorded a gain of approximately $88.2 million primarily related to the sale of Hilton La Jolla Torrey Pines.

There was no such gain (loss) recorded for 2023.

Equity in Earnings (Loss) of Unconsolidated Entity .

In 2024 and 2023, we recorded equity in loss of unconsolidated entity of $1.6 million and $253,000, respectively, related to our investment in OpenKey.

In 2024, equity in loss included an impairment charge to the OpenKey investment of $1.4 million.

There was no such impairment recorded in 2023.

There was a $56,000 loss in equity in earnings (loss) of unconsolidated entity in 2025 as a result of impairing the OpenKey note receivable in the fourth quarter of 2025.

In 2024 we recorded equity in loss of unconsolidated entity of $1.6 million related to our investment in OpenKey that included an impairment charge to the OpenKey investment of $1.4 million.

Other Income (Expense).

Other expense was $1.6 million in 2025 due to a realized loss from the sale of Commercial Mortgage-Backed Securities (“CMBS”).

Interest Income .

Interest income was $6.2 million and $7.1 million in 2025 and 2024, respectively.

The increase in interest income in 2024 was primarily attributable to higher average excess cash balances in 2024 compared to 2023, as well as by interest income associated with a tranche of CMBS included in investment in securities.

Other Income (Expense).

In 2023, we recorded $293,000 of miscellaneous income.

The decrease in interest income in 2025 was primarily attributable to lower interest rates and lower excess cash balances compared to 2024.

Interest Expense and Amortization of Discounts and Loan Costs .

Interest expense and amortization of discounts and loan costs increased $13.9 million, or 14.8%, to $108.1 million for 2024 compared to 2023.

The increase is primarily due to higher interest expense from higher average interest rates in 2024 and higher amortization of loan costs of approximately $3.0 million in 2024 compared to 2023.

The average SOFR rates for 2024 and 2023 were 5.15% and 4.91%, respectively.

Interest expense and amortization of discounts and loan costs decreased $9.6 million, or 8.9%, to $98.5 million for 2025 compared to 2024.

The decrease is primarily due to lower interest expense from lower average interest rates and lower average debt balances in 2025 partially offset by higher amortization of loan costs of approximately $3.8 million in 2025 compared to 2024.

Write-off of Loan Costs and Exit Fees.

Write-off of loan costs and exit fees was $1.8 million in 2025 related to various loan refinances and modifications.

Write-off of loan costs and exit fees was $3.5 million in 2023 related to related to various loan modifications.

Write-off of loan costs and exit fees was $6.1 million in 2024 related to various loan refinances and modifications.

Gain (loss) on Extinguishment of Debt.

In 2025, we recognized a loss on extinguishment of debt of $2.7 million from the write-off of deferred loan costs resulting from the paydown on the mortgage loan partially secured by The Clancy and Marriott Seattle Waterfront in conjunction with the sale of the properties.

In 2024 we recognized a loss of $22,000 attributable to the discount associated with the Cameo Beverly Hills mortgage loan that was repaid on April 9, 2024.

Gain on extinguishment of debt was $2.3 million in 2023 due to the payoff of The Ritz-Carlton Reserve Dorado Beach mortgage loan.

The gain was primarily attributable to the premium that was recorded upon the assumption of the mortgage loan when the hotel was acquired.

Realized and Unrealized Gain (Loss) on Derivatives .

Realized and unrealized gain on derivatives of $585,000 for 2024 consisted of an unrealized gain on warrants of $12,000 and a realized gain of $4.7 million associated with payments received from counterparties on in-the-money interest rate caps, partially offset by an unrealized loss on interest rate caps of approximately $4.1 million.

Realized and unrealized loss on derivatives of $663,000 for 2023 consisted of unrealized loss on interest rate caps of approximately $8.7 million, partially offset by an unrealized gain on warrants of $272,000 and a realized gain of $7.8 million associated with payments received from counterparties on in-the-money interest rate caps.

Realized and unrealized loss on derivatives of $355,000 for 2025 consisted of an unrealized loss on interest rate caps of $971,000, partially offset by a realized gain of $616,000 associated with payments received from counterparties on in-the-money interest rate caps.

Realized and unrealized gain on derivatives of $585,000 for 2024 primarily consisted of an unrealized gain on warrants of $12,000 and a realized gain of $4.7 million associated with payments received from counterparties on in-the-money interest rate caps, partially offset by an unrealized loss on interest rate caps of approximately $4.1 million.

Income Tax (Expense) Benefit .

Income tax expense decreased $1.8 million, from $2.7 million in 2023 to $842,000 in 2024.

This decrease was primarily due to a decrease in the taxable income of certain of our TRS entities in 2024 compared to 2023.

Income tax expense increased $1.1 million, from $842,000 in 2024 to $2.0 million in 2025.

The increase in tax expense is primarily due to an increase in the deferred tax liabilities of certain of our taxable entities.

(Income) Loss Attributable to Noncontrolling Interest in Consolidated Entities .

Our noncontrolling interest partner in consolidated entities was allocated income of $25.9 million and $1.6 million in 2024 and 2023, respectively.

Our noncontrolling interest partners in consolidated entities were allocated a loss of $325,000 and income of $25.9 million in 2025 and 2024, respectively.

The allocated income for 2024 includes our partner’s share of gain on the sale of the Hilton La Jolla Torrey Pines.

At December 31, 2024, noncontrolling interest in consolidated entities represented an ownership interest of 25% in one hotel property held by one entity.

At December 31, 2023, noncontrolling interest in consolidated entities represented an ownership interest of 25% in two hotel properties held by one entity.

For 2025, noncontrolling interest in consolidated entities represented a 25% ownership interest in one hotel property held by one entity through November 2025 when the Company purchased the remaining ownership interest and a 25% ownership interest in a JV.

As of December 31, 2024, noncontrolling interest in consolidated entities represented an ownership interest of 25% in one hotel property held by one entity.

Net (Income) Loss Attributable to Redeemable Noncontrolling Interests in Operating Partnership.

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We expect to meet our long-term liquidity requirements through various sources of capital, including future common and preferred equity issuances, existing working capital, net cash provided by operations, hotel mortgage indebtedness and other secured and unsecured borrowings.

However, there are a number of factors that may have a material adverse effect on our ability to access these capital sources, the state of overall equity and credit markets, our degree of leverage, our unencumbered asset base and borrowing restrictions imposed by lenders (including as a result of any failure to comply with financial covenants in our existing and future indebtedness), general market conditions for REITs, our operating performance and liquidity and market perceptions about us.

as a result of any failure to comply with financial covenants in our existing and future indebtedness), general market conditions for REITs, our operating performance and liquidity and market perceptions about us.

The success of our business strategy will depend, in part, on our ability to access these various capital sources.

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federal income tax purposes.

Our hotel properties will require periodic capital expenditures and renovation to remain competitive.

Our hotel properties will require periodic capital expenditures and renovations to remain competitive.

In addition, acquisitions, redevelopments or expansions of hotel properties may require significant capital outlays.

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As of December 31, 2025, $17.1 million was also due to the Company from third-party hotel managers, most of which is held by one of the Company’s managers and is available to fund hotel operating costs.

At December 31, 2024, our net debt to gross assets was 40.8%.

As of December 31, 2025, our net debt to gross assets was 46.7%.

The Company’s cash and cash equivalents are primarily comprised of corporate cash invested in short-term U.S.

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As of December 31, 2025, we held extension options to extend the principal for all of the debt due in 2026 except for $135.0 million.

Subsequent to December 31, 2024, we extended two mortgage loans and refinanced our $293.2 million mortgage loan with a final maturity in June 2025 and our $62 million mortgage loan with a final maturity in March 2026.

See discussions below in “Debt Transactions.”

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Additionally, as discussed in note 18 to our consolidated financial statements, we have short-term capital commitments of approximately $18.3 million.

Each share of our Series E Preferred Stock and Series M Preferred Stock is redeemable at any time, at the option of the holder, at a redemption price of $25.00 per share, plus any accumulated, accrued and unpaid dividends, less a redemption fee, subject to the limitations as stated in the Articles Supplementary.

As of December 31, 2025, the Company determined that a portion of the outstanding Series E Preferred Stock and Series M Preferred Stock met the criteria for mandatory redemption based on certain holders initiating redemption requests that exceeded the limitations set forth in the Articles Supplementary.

As of December 31, 2025 the Company has received $30.2 million in investor-initiated Series E Preferred Stock redemption requests and $642,000 in investor-initiated Series M Preferred Stock redemption requests that have not been completed and are included in “redeemable preferred stock redemptions payable” in our consolidated balance sheet.

Based on the various limitations in place as of December 31, 2025, and not considering any future redemption requests received, we expect that all of these redemption requests will be fulfilled over the subsequent twelve months from December 31, 2025.

As of February 28, 2026 the redeemable preferred stock redemptions payable was approximately $42.4 million.

Potential Strategic Transaction

As previously disclosed, our board of directors is exploring potential strategic alternatives, including a potential sale of the Company or one or more potential transactions involving the sale of individual assets.

However, there can be no assurance that the strategic process will result in a transaction of any kind.

The outcome of the process will depend on many factors beyond our control, including the availability of interested buyers for the Company as a whole or for individual assets, the state of the capital markets, macroeconomic and industry conditions, and the ability to negotiate mutually acceptable terms.

The failure to complete a transaction, or uncertainty about whether or when a transaction may be completed, could negatively affect investor sentiment, cause volatility in our stock price, and adversely affect our business, operating results, liquidity, and financial condition.

We can give no assurance that the strategic process will result in a definitive agreement or a completed transaction, whether involving the entire Company or individual assets, on terms favorable to stockholders, or at all.

Equity Transactions

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The Company also caused its operating partnership to execute Amendment No.

5 to the Third Amended and Restated Agreement of Limited Partnership to

amend the terms of its operating partnership agreement to conform to the terms of the Series E Articles Supplementary and Series M Articles Supplementary.

The Company issued approximately 16.4 million shares of Series E Preferred Stock and received net proceeds of approximately $369.5 million and issued approximately 2.0 million shares of Series M Preferred Stock and received net proceeds of approximately $47.6 million.

5 to the Third Amended and Restated Agreement of Limited Partnership to amend the terms of its operating partnership agreement to conform to the terms of the Series E Articles Supplementary and Series M Articles Supplementary.

In total, the Company issued approximately 16.4 million shares of Series E Preferred Stock and received net proceeds of approximately $369.5 million and issued approximately 2.0 million shares of Series M Preferred Stock and received net proceeds of approximately $47.6 million.

On February 21, 2023, the Company announced the closing of its offering of the Series E Preferred Stock and Series M Preferred Stock.

On July 12, 2021, the Company entered into an equity distribution agreement (the “Virtu July 2021 EDA”) with Virtu to sell from time to time shares of our common stock having an aggregate offering price of up to $100 million.

We will pay Virtu a commission of approximately 1.0% of the gross sales price of the shares of our common stock sold.

The Company may also sell some or all of the shares of our common stock to Virtu as principal for its own account at a price agreed upon at the time of sale.

As of March 10, 2025, the Company has sold approximately 4.7 million shares of common stock under the Virtu July 2021 EDA and received gross proceeds of approximately $24.0 million.

On May 3, 2024, our board of directors approved a new share repurchase program, pursuant to which the board of directors granted a repurchase authorization to acquire shares of the Company’s common stock, par value $0.01 per share, having an aggregate value of up to $50 million.

The Company intends to begin share repurchases as soon as practicable and may repurchase shares through open market transactions, privately negotiated transactions or other means.

The Company may repurchase shares through open market transactions, privately negotiated transactions or other means.

The timing and amount of any transactions will be subject to the discretion of the Company based upon market conditions, and the program may be suspended or terminated at any time by the Company at its discretion without prior notice.

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Debt Transactions

On March 7, 2024, the Company closed on a $62.0 million non-recourse loan secured by the Ritz-Carlton Reserve Dorado Beach.

The mortgage loan had a two-year term, was interest only and provided for a floating interest rate of SOFR + 4.75%.

In April 2024, the Company repaid the $30.0 million mortgage loan secured by the Cameo Beverly Hills hotel.

On July 17, 2024, the Company sold the Hilton La Jolla Torrey Pines pursuant to an Agreement of Purchase and Sale, entered into effective May 6, 2024, for $165 million in cash, subject to customary pro-rations and adjustments.

The Company owned an indirect 75% equity interest in the hotel property.

Additionally, the Company repaid the $66.6 million mortgage loan secured by the hotel property.

On August 7, 2024, the Company closed on a refinancing involving five hotels.

The new mortgage loan totals $407.0 million and has a two-year initial term with three one-year extension options, subject to the satisfaction of certain conditions, taking the final maturity to 2029.

The loan is interest only and provides for a floating interest rate of SOFR + 3.24%.

As part of this financing, the Company acquired a tranche of CMBS with a par value of $42.2 million and a rate of SOFR + 5.20%.

The loan is secured by five hotels:

Pier House Resort & Spa, Bardessono Hotel & Spa, Hotel Yountville, The Ritz-Carlton Sarasota, and The Ritz-Carlton St.

The new loan refinanced the $80.0 million loan secured by the Pier House Resort & Spa which had an interest rate of SOFR + 3.60% and had a final maturity date in September 2026, the $42.5 million loan secured by The Ritz-Carlton St.

Thomas which had an interest rate of SOFR + 4.35% and had a final maturity date in August 2026, and the $200.0 million secured credit facility secured by The Ritz-Carlton Sarasota, Hotel Yountville, and Bardessono Hotel & Spa which had an interest rate of SOFR + 3.10% and had a final maturity date in July 2027.

The $407.0 million mortgage loan amount represents an approximate 43% loan-to-value based on third-party appraisals completed by the lender.

The appraisals valued the hotels at $953 million based on the sum of their “as-is” values.

On January 14, 2025, the Company amended its mortgage loan secured by the 170-room Ritz-Carlton Lake Tahoe.

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The appraisal valued the hotel at $160 million based on its “as-is” value.

On July 25, 2025, we amended the mortgage loan to extend the maturity date from July 2025 to July 2026.

maturity date in June of 2025 and its $62.0 million mortgage loan secured by The Ritz-Carlton Reserve Dorado Beach, which had an interest rate of SOFR + 4.75% and a final maturity date in March of 2026.

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The Clancy, The Notary Hotel, Marriott Seattle Waterfront, Sofitel Chicago Magnificent Mile, and The Ritz-Carlton Reserve Dorado Beach.

million mortgage loan amount represents an approximate 49% loan-to-value based on third-party appraisals completed by the lender.

The $363.0 million mortgage loan amount represents an approximate 49% loan-to-value based on third-party appraisals completed by the lender.

The appraisals valued the hotels at $742 million based on the sum of their “as-is” values.

On April 4, 2025, the Company assumed a $5.4 million term loan secured by a parcel of land.

The assumed term loan is interest only, bears interest at WSJ Prime Rate, and matures in March 2026.

This term loan has a floor of 4.99%.

On August 7, 2025, we sold the Marriott Seattle Waterfront hotel pursuant to an Agreement of Purchase and Sale, entered into effective July 3, 2025, for $145 million in cash, subject to customary pro-rations and adjustments.

Additionally, the Company repaid approximately $88.4 million on the mortgage loan that was partially secured by the hotel property.

On August 15, 2025, the Company refinanced its $140.0 million mortgage loan secured by the Four Seasons Scottsdale which had an interest rate of SOFR + 3.75% and a final maturity date in December 2028.

The new non-recourse loan has a balance of $180.0 million and bears interest at a floating rate of SOFR + 3.00%.

The new loan has a three-year initial term with two, one-year extension options, subject to the satisfaction of certain conditions.

Additionally, the Company repaid approximately $64.7 million on the mortgage loan that was partially secured by the hotel property.

Sources and Uses of Cash

We had approximately $124.4 million and $135.5 million of cash and cash equivalents at December 31, 2025 and December 31, 2024, respectively.

We anticipate using funds to pay for capital expenditures for our 15 hotel properties, estimated to be between approximately $75.0 million to $95.0 million in fiscal year 2025 and debt interest payments, estimated to be approximately $80.0 million in 2025 based on future payments using the one month SOFR rate as of December 31, 2024.

This estimate will fluctuate based on changes in the one-month SOFR rate and any future changes in outstanding indebtedness.

We anticipate that our principal sources of funds to meet our cash requirements will include cash on hand, positive cash flow from operations and capital market activities.

Net Cash Flows Provided by (Used in) Operating Activities.

Net cash flows provided by operating activities were $40.8 million and $66.8 million for the year ended December 31, 2025 and 2024, respectively.

Cash flows from operations were impacted by changes in hotel operations and the disposition of a hotel property.

Cash flows from operations are also impacted by the timing of working capital cash flows, such as collecting receivables from hotel guests, paying vendors, settling with derivative counterparties, settling with related parties and settling with hotel managers.

Cash flows from operations were impacted by changes in hotel operations and the disposition of hotel properties.

Cash flows from operations are also impacted by the timing of working capital cash flows, such as collecting receivables from hotel guests, paying vendors, settling with related parties and settling with hotel managers.

Net Cash Flows Provided by (Used in) Investing Activities .

For the year ended December 31, 2025, net cash flows provided by investing activities were $209.6 million.

The cash inflows were primarily attributable to $155.6 million from the sale of Hilton La Jolla Torrey Pines and $958,000 from property insurance proceeds, partially offset by cash outflows of $42.3 million from the purchase of a tranche of CMBS, $70.6 million of capital improvements made to various hotel properties, $8.1 million from the issuance of a note receivable and a $79,000 loan to OpenKey.

The cash inflows were attributable to $247.6 million from the sales of Seattle Marriott Waterfront and The Clancy, $40.7 million of proceeds from the sale of investment in securities and $4.8 million from property insurance proceeds.

These cash inflows were partially offset by cash outflows of $77.9 million of capital improvements made to various hotel properties and the acquisition of land of $5.5 million.

Our capital improvements consisted of approximately $53.5 million of return on investment capital projects and approximately $24.4 million of renewal and replacement capital projects.

For the year ended December 31, 2023, net cash flows used in investing activities were $77.1 million.

These cash outflows were primarily attributable to $77.1 million of capital improvements made to various hotel properties and a $238,000 loan to OpenKey partially offset by cash inflows of $361,000 related to proceeds from property insurance.

For the year ended December 31, 2024, net cash flows provided by investing activities were $35.5 million.

The cash inflows were primarily attributable to $155.6 million from the sale of Hilton La Jolla Torrey Pines and $958,000 from property insurance proceeds, partially offset by cash outflows of $42.3 million from the purchase of securities, $70.6 million of capital improvements made to various hotel properties, $8.1 million from the issuance of a note receivable and a $79,000 loan to OpenKey.

Our capital improvements consisted of approximately $49.6 million of return on investment capital projects and approximately $21.0 million of renewal and replacement capital projects.

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For the year ended December 31, 2025, net cash flows used in financing activities were $268.6 million.

Cash outflows primarily consisted of $518.3 million of repayments of indebtedness, $76.8 million for cash redemptions of Series E and Series M preferred stock, $47.3 million of dividend and distribution payments, $14.5 million for the acquisition of noncontrolling interest in consolidated entities, $11.9 million of payments of loan costs and exit fees, $2.3 million of distributions to noncontrolling interests in consolidated entities, $778,000 for repurchase of common stock, $670,000 to purchase interest rate caps and $121,000 from the redemption of operating partnership units.

cash outflows were partially offset by cash inflows of $403.0 million from borrowings on indebtedness, $714,000 of proceeds from in-the-money interest rate caps and a contribution of $306,000 from a noncontrolling interest holder in a consolidated entity.

For the year ended December 31, 2024, net cash flows used in financing activities were $83.8 million.

Cash outflows primarily consisted of $184.1 million of repayments of indebtedness, $51.6 million of dividend and distribution payments, $1.6 million to purchase interest rate caps, $15.4 million of payments of loan costs and exit fees, $27.0 million distributions to noncontrolling interest in consolidated entities, and $45.6 million for cash redemptions of Series E and Series M preferred stock.

These cash outflows were partially offset by cash inflows of $234.0 million from borrowings on indebtedness, $4.9 million of proceeds from in-the-money interest rate caps and $3.0 million of contributions from noncontrolling interest in consolidated entities.

For the year ended December 31, 2023, net cash flows used in financing activities were $156.8 million.

Cash outflows primarily consisted of repayments of indebtedness of $534.3 million, $52.6 million of dividend and distribution payments, $19.3 million of payments to repurchase common stock, payments of $7.2 million for the redemption of operating partnership units, $5.1 million to purchase interest rate caps, $2.7 million of distributions to a noncontrolling interest in consolidated entities, $11.6 million payments of loan costs and exit fees, and $9.8 million for cash redemptions of Series E and Series M preferred stock.

These cash outflows were partially offset by cash inflows of $370.6 million from borrowings on indebtedness, $97.9 million from the issuance of preferred stock, $9.5 million of contributions from a noncontrolling interest in consolidated entities and $7.7 million of proceeds from in-the-money interest rate caps.

We rely entirely on the performance of our properties and the ability of the properties’ managers to increase revenues to keep pace with inflation.

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Our accounting policies are fully described in note 2 to our consolidated financial statements included in “Item 8.

Financial Statements and Supplementary Data.” We believe that the following discussion addresses our most critical accounting policies, representing those policies considered most vital to the portrayal of our financial condition and results of operations and require management’s most difficult, subjective, complex judgments and can include significant estimates.

Financial Statements and Supplementary Data.” We believe that the following discussion addresses our most critical accounting estimates, representing those policies considered most vital to the portrayal of our financial condition and results of operations and require management’s most difficult, subjective, complex judgments and can include significant estimates.

Impairment of Investments in Hotel Properties.

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Asset write-downs resulting from property damage are recorded up to the amount of the allocable property insurance deductible in the period that the property damage occurs.

We recorded a $54.5 million impairment charge for the year ended December 31, 2025.

There were no impairment charges recorded for the years ended December 31, 2024 and 2023.

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Recently Adopted Accounting Standards

In November 2023, the FASB issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280):Improvements to Reportable Segment Disclosures, which expands annual and interim disclosure requirements for reportable segments, primarily through enhanced disclosures about significant segment expenses.

We adopted the standard effective for the year ended December 31, 2024.

See note 23 to our consolidated financial statements.

In December 2023, the Financial Accounting Standards Board’s (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures , to expand the disclosure requirements for income taxes, specifically related to the rate reconciliation and income taxes paid.

ASU 2023-09 is effective for our annual periods beginning January 1, 2025.

The amendments in this ASU may be applied prospectively by providing the revised disclosures for the period ending December 31, 2025 and continuing to provide the pre-ASU disclosures for the prior periods, or the amendments may be applied retrospectively by providing the revised disclosures for all periods presented.

As of December 31, 2025, the Company has prospectively adopted this ASU.

The adoption of this ASU only impacted disclosures with respect to the Company’s consolidated financial statements.

Recently Issued Accounting Standards

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures , which eliminated the historic requirement that entities disclose information concerning unrecognized tax benefits having a reasonable possibility of significantly increasing or decreasing in the 12 months following the reporting date.

For public business entities, the amendments in this Update are effective for annual periods beginning after December 15, 2024.

For entities other than public business entities, the amendments are effective for annual periods beginning after December 15, 2025.

Early adoption is permitted.

We are currently evaluating the impact that ASU 2023-09 will have on our consolidated financial statements and related disclosures.

In November 2024, the FASB issued ASU 2024-03 , Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40) Disaggregation of Income Statement Expenses that requires more detailed information about specified categories of expenses (purchases of inventory, employee compensation, depreciation, amortization, and depletion) included in certain expense captions presented on the face of the statement of operations.

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EBITDA is defined as net income (loss) before interest expense and amortization of loan costs, depreciation and amortization, income taxes, equity in (earnings) loss of unconsolidated entity and after the Company’s portion of EBITDA of OpenKey.

In addition, we exclude impairment on real estate, (gain) loss on disposition of assets and hotel property and the Company’s portion of EBITDAre of OpenKey from EBITDA to calculate EBITDA for real estate, or EBITDAre, as defined by NAREIT.

In addition, we exclude impairment on real estate, (gain) loss on disposition of assets and hotel properties and the Company’s portion of EBITDAre of OpenKey from EBITDA to calculate EBITDA for real estate, or EBITDAre, as defined by NAREIT.

We then further adjust EBITDAre to exclude certain additional items such as amortization of favorable (unfavorable) contract assets (liabilities), transaction and conversion costs, other income/expense, write-off of loan costs and exit fees, gain/loss on insurance settlements, legal, advisory and settlement costs, advisory services incentive fee, gain/loss on extinguishment of debt, stock/unit-based compensation and the Company’s portion of adjustments to EBITDAre of OpenKey and non-cash items such as unrealized gain/ loss on derivatives.

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164,742 228,802 159,531

(Gain) loss on disposition of assets and hotel property

Impairment charges

(Gain) loss on disposition of assets and hotel properties

(82,797) (88,165) —

EBITDAre 136,437 140,637 159,531

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Legal, advisory and settlement costs (2)

(3,138) 12,676 1,397

(Gain) loss on extinguishment of debt 2,686 22 (2,318)

Other (income) expense

1,572 — (293)

(Gain) loss on insurance settlements

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__________________

(1) Includes amounts associated with to funding certain expenses of Ashford Securities LLC, in which 2024 include a true up of these expenses.

(1) Includes amounts associated with funding certain expenses of Ashford Securities LLC, which in the 2024 period included a true up of these expenses based on capital raised.

(2) Includes amounts related to expense reductions from an insurance recovery for prior legal expenses of $5.4 million for the year ended December 31, 2025.

The following table reconciles net income (loss) to EBITDA attributable to the Company and OP unitholders on a property-by-property basis for each of our hotel properties owned and on a corporate basis during the year ended December 31, 2025.

The results of the Hilton La Jolla Torrey Pines are excluded from its disposition date through December 31, 2024 (in thousands) (unaudited):

The results of the Marriott Seattle Waterfront and The Clancy are excluded from their respective disposition dates through December 31, 2025 (in thousands) (unaudited):

Year Ended December 31, 2025

Capital Hilton Hilton La Jolla Torrey Pines Sofitel Chicago Magnificent Mile Bardessono Hotel and Spa Pier House Resort & Spa Hotel Yountville Park Hyatt Beaver Creek Resort & Spa The Notary Hotel The Clancy The Ritz-Carlton Sarasota The Ritz-Carlton Lake Tahoe Marriott Seattle Waterfront The Ritz-Carlton St.

Capital Hilton Hilton La Jolla Torrey Pines Sofitel Chicago Magnificent Mile Bardessono Hotel and Spa Pier House Resort & Spa Hotel Yountville Park Hyatt Beaver Creek Resort & Spa

The Notary Hotel The Clancy The Ritz-Carlton Sarasota The Ritz-Carlton Lake Tahoe Marriott Seattle Waterfront The Ritz-Carlton St.

Thomas Cameo Beverly Hills The Ritz-Carlton Dorado Beach Four Seasons Resort Scottsdale Hotel Total Corporate / Allocated (1)

17 unchanged sentences

(1) Represents expenses not recorded at the individual hotel property level.

(2) Includes allocated amounts which were not specific to hotel properties, such as gain on sale of hotel property, corporate taxes, insurance and legal expenses.

(2) Includes allocated amounts which were not specific to hotel properties, such as gain/loss on sale of hotel properties, impairment charges, corporate taxes, insurance and legal expenses.

(3) Referred to as hotel adjusted EBITDA in note 23 to the Company’s consolidated financial statements.

The results of the Hilton La Jolla Torrey Pines are excluded from its disposition date through December 31, 2024 (in thousands) (unaudited):

Year Ended December 31, 2024

Capital Hilton Hilton La Jolla Torrey Pines Sofitel Chicago Magnificent Mile Bardessono Hotel and Spa Pier House Resort & Spa Hotel Yountville Park Hyatt Beaver Creek Resort & Spa

The Notary Hotel The Clancy The Ritz-Carlton Sarasota The Ritz-Carlton Lake Tahoe Marriott Seattle Waterfront The Ritz-Carlton St.

Thomas Cameo Beverly Hills The Ritz-Carlton Dorado Beach Four Seasons Resort Scottsdale

18 unchanged sentences

(1) Represents expenses not recorded at the individual hotel property level.

(2) Includes allocated amounts which were not specific to hotel properties, such as gain on sale of hotel property, corporate taxes, insurance and legal expenses.

(2) Includes allocated amounts which were not specific to hotel properties, such as gain/loss on sale of hotel properties, impairment charges, corporate taxes, insurance and legal expenses.

(3) Referred to as hotel adjusted EBITDA in note 23 to the Company’s consolidated financial statements.

The results of The Ritz-Carlton Reserve Dorado Beach and Four Seasons Resort Scottsdale are included from its acquisition date through December 31, 2022 (in thousands) (unaudited):

Year Ended December 31, 2023

21 unchanged sentences

(1) Represents expenses not recorded at the individual hotel property level.

(2) Includes allocated amounts which were not specific to hotel properties, such as gain on sale of hotel property, corporate taxes, insurance and legal expenses.

(2) Includes allocated amounts which were not specific to hotel properties, such as gain/loss on sale of hotel properties, impairment charges, corporate taxes, insurance and legal expenses.

(3) Referred to as hotel adjusted EBITDA in note 23 to the Company’s consolidated financial statements.

26 unchanged sentences

Equity in (earnings) loss of unconsolidated entity 56 1,608 253

(Gain) loss on disposition of assets and hotel property (1)

Impairment charges

(Gain) loss on disposition of assets and hotel properties (1)

(82,815) (61,925) —

Company’s portion of FFO of OpenKey — (322) (296)

8 unchanged sentences

Legal, advisory and settlement costs (3)

(3,138) 12,676 1,397

Interest expense accretion on refundable membership club deposits 557 616 671

3 unchanged sentences

Other (income) expense

1,572 — (293)

(Gain) loss on insurance settlements

8 unchanged sentences

Amortization of loan costs (107) (307) (94)

Gain (loss) on disposition of assets and hotel property

(2) Includes amounts associated with to funding certain expenses of Ashford Securities LLC, in which 2024 include a true up of these expenses.

Gain (loss) on disposition of assets and hotel properties

(18) 26,240 —

(2) Includes amounts associated with funding certain expenses of Ashford Securities LLC, which in the 2024 period included a true up of these expenses based on capital raised.

(3) Includes amounts related to expense reductions from an insurance recovery for prior legal expenses of $5.4 million for the year ended December 31, 2025.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis