What changed in this filing

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Item 1. Financial Statements

2026-08-05 compared with 2026-04-30 · 109 added, 77 removed, 486 unchanged (28% of the section changed)

3 unchanged sentences

(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

Three Months Ended

Three Months Ended Six Months Ended

June 30, June 30,

2026 2025 2026 2025

Franchise and management fees $ 187,536 $ 177,086 $ 337,167 $ 322,154

15 unchanged sentences

Interest income ( 1,095 ) ( 1,456 ) ( 2,306 ) ( 3,015 )

Other losses, net 721 436

Other gains, net ( 6,124 ) ( 5,374 ) ( 5,403 ) ( 4,938 )

Equity in net loss of affiliates 1,216 80 7,468 131

10 unchanged sentences

(IN THOUSANDS)

Three Months Ended

Three Months Ended Six Months Ended

June 30, June 30,

2026 2025 2026 2025

Net income $ 64,338 $ 81,734 $ 84,642 $ 126,268

7 unchanged sentences

(IN THOUSANDS, EXCEPT SHARE AMOUNTS)

March 31, 2026 December 31, 2025

June 30, 2026 December 31, 2025

Current assets

38 unchanged sentences

160,000,000 shares authorized;

95,065,638 shares issued at March 31, 2026 and December 31, 2025;

45,617,358 and 45,996,087 shares outstanding at March 31, 2026 and December 31, 2025, respectively

95,065,638 shares issued at June 30, 2026 and December 31, 2025;

45,179,440 and 45,996,087 shares outstanding at June 30, 2026 and December 31, 2025, respectively

Additional paid-in-capital 410,052 403,927

1 unchanged sentence

Treasury stock, at cost;

49,448,280 and 49,069,551 shares at March 31, 2026 and December 31, 2025, respectively

49,886,198 and 49,069,551 shares at June 30, 2026 and December 31, 2025, respectively

( 2,635,490 ) ( 2,536,373 )

6 unchanged sentences

(IN THOUSANDS)

Three Months Ended

Six Months Ended

CASH FLOWS FROM OPERATING ACTIVITIES

Net income $ 84,642 $ 126,268

Adjustments to reconcile net income to net cash (used in) provided by operating activities:

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization 33,634 27,172

2 unchanged sentences

Non-cash share-based compensation and other charges 13,098 19,438

Non-cash interest, investments, and affiliate loss, net 1,800 1,515

Non-cash interest, investments, and affiliate loss (income), net ( 3,391 ) ( 1,668 )

Deferred income taxes 7,493 850

2 unchanged sentences

Change in working capital and other ( 34,842 ) ( 41,895 )

Net cash (used in) provided by operating activities ( 23,174 ) 20,467

Net cash provided by operating activities 67,362 116,070

CASH FLOWS FROM INVESTING ACTIVITIES

11 unchanged sentences

Proceeds from the exercise of stock options 2,339 6,385

Net cash provided by financing activities 28,285 32,208

Net cash used in financing activities ( 35,183 ) ( 3,239 )

Net change in cash and cash equivalents ( 1,845 ) 17,683

24 unchanged sentences

Share-based payment activity 188,586 — 5,813 — 8,945 — 14,758

188,586 — 5,813 — 8,945 — 14,758

Dividends declared ($ 0.2875 per share)

2 unchanged sentences

Balance as of March 31, 2025 46,589,011 $ 951 $ 376,014 $ ( 6,130 ) $ ( 2,467,209 ) $ 2,032,440 $ ( 63,934 )

Net income — — — — — 81,734 81,734

Other comprehensive income, net of tax — — — 2,079 — — 2,079

Share-based payment activity 29,639 — 11,147 — 1,181 — 12,328

Dividends declared ($ 0.2875 per share)

— — — — — ( 13,304 ) ( 13,304 )

Treasury purchases ( 355,276 ) — — — ( 45,141 ) — ( 45,141 )

Balance as of June 30, 2025 46,263,374 $ 951 $ 387,161 $ ( 4,051 ) $ ( 2,511,169 ) $ 2,100,870 $ ( 26,238 )

Outstanding Common

7 unchanged sentences

Net income — — — — — 20,304 20,304

Other comprehensive income, net of tax — — — ( 2,869 ) — — ( 2,869 )

Other comprehensive loss, net of tax — — — ( 2,869 ) — — ( 2,869 )

Share-based payment activity 229,675 — 3,854 — 4,757 — 8,611

229,675 — 3,854 — 4,757 — 8,611

Dividends declared ($ 0.2875 per share)

2 unchanged sentences

Balance as of March 31, 2026 45,617,358 $ 951 $ 407,781 $ ( 8,176 ) $ ( 2,588,349 ) $ 2,325,220 $ 137,427

(1) During certain periods presented, accumulated dividends were paid to certain shareholders upon vesting of their performance vested restricted stock units ("PVRSU"), which are presented in Share-based payment activity.

Net income — — — — — 64,338 64,338

Other comprehensive loss, net of tax — — — ( 1,728 ) — — ( 1,728 )

Share-based payment activity 31,280 — 2,271 — 3,354 — 5,625

Dividends declared ($ 0.2875 per share)

— — — — — ( 12,989 ) ( 12,989 )

Treasury purchases ( 469,198 ) — — — ( 50,495 ) — ( 50,495 )

Balance as of June 30, 2026 45,179,440 $ 951 $ 410,052 $ ( 9,904 ) $ ( 2,635,490 ) $ 2,376,569 $ 142,178

(1) Accumulated other comprehensive income (loss) relates entirely to foreign currency items.

There were no amounts reclassified from accumulated other comprehensive income (loss) during the three months ended March 31, 2026 and 2025 .

There were no amounts reclassified from accumulated other comprehensive income (loss) during the six months ended June 30, 2026 and 2025.

The accompanying notes are an integral part of these consolidated financial statements.

32 unchanged sentences

Loyalty points are typically redeemed within three years of issuance.

The following table summarizes the significant changes in the contract liabilities balances during the period from December 31, 2025 to March 31, 2026:

The following table summarizes the significant changes in the contract liabilities balances during the period from December 31, 2025 to June 30, 2026:

(in thousands)

2 unchanged sentences

Revenue recognized in the period ( 60,041 )

Balance as of March 31, 2026 $ 221,760

Balance as of June 30, 2026 $ 229,857

Remaining Performance Obligations

The aggregate amount of the transaction price that is allocated to unsatisfied, or partially unsatisfied, performance obligations was $ 221.8 million as of March 31, 2026.

The aggregate amount of the transaction price that is allocated to unsatisfied, or partially unsatisfied, performance obligations was $ 229.9 million as of June 30, 2026.

This amount represents the fixed transaction price that will be recognized as revenue in future periods, which is presented as current and non-current deferred revenue in the consolidated balance sheets.

1 unchanged sentence

The loyalty points represent a performance obligation attributable to the usage of the points, and thus the revenues are recognized at the point in time when the loyalty points are redeemed by the members for benefits (with both franchisees and third-party partners), net of the cost of redemptions.

The loyalty net revenues, inclusive of adjustments to the estimated redemption rates, were $ 22.9 million and $ 19.5 million for the three months ended March 31, 2026 and 2025, respectively.

The loyalty net revenues, inclusive of adjustments to the estimated redemption rates, were $ 30.1 million and $ 37.2 million for the three months ended June 30, 2026 and 2025, respectively, and $ 53.0 million and $ 56.7 million for the six months ended June 30, 2026 and 2025, respectively.

Receivables and Allowance for Credit Losses

3 unchanged sentences

The following table summarizes the composition of the notes receivable balances by credit quality indicator and the allowance for credit losses:

(in thousands) March 31, 2026 December 31, 2025

(in thousands) June 30, 2026 December 31, 2025

Senior $ 56,705 $ 98,257

13 unchanged sentences

The following table summarizes the activity related to the Company’s notes receivable allowance for credit losses:

(in thousands) March 31, 2026 December 31, 2025

(in thousands) June 30, 2026 December 31, 2025

Beginning balance $ 8,481 $ 7,331

(Reversal) provision for credit losses ( 30 ) 1,150

Provision for credit losses 197 1,150

Ending balance $ 8,678 $ 8,481

As of March 31, 2026 and December 31, 2025, three note receivable loans with senior credit quality indicators met the definition of collateral-dependent and are collateralized by the membership interests in the borrowing entities, the associated land parcel, or the operating hotel.

As of June 30, 2026 and December 31, 2025, three note receivable loans with senior credit quality indicators met the definition of collateral-dependent and are collateralized by the membership interests in the borrowing entities, the associated land parcel, or the operating hotel.

The Company used both a market approach that uses quoted market prices and an income approach that uses discounted cash flows to value the underlying collateral.

2 unchanged sentences

Based on the Company's analysis, the fair value of the collateral secures substantially all of the carrying value of the respective note receivable loans.

The allowance for credit losses attributable to the collateral-dependent note receivable loans was $ 4.6 million as of both March 31, 2026 and December 31, 2025.

The allowance for credit losses attributable to the collateral-dependent note receivable loans was $ 4.6 million as of both June 30, 2026 and December 31, 2025.

The following table summarizes the past due balances by credit quality indicator of the notes receivable:

5 unchanged sentences

Notes Receivable

As of March 31, 2026

As of June 30, 2026

Senior $ 5,245 $ — $ 42,900 $ 48,145 $ 8,560 $ 56,705

7 unchanged sentences

$ — $ — $ 43,304 $ 43,304 $ 72,353 $ 115,657

The amortized cost basis of the notes receivable in a non-accrual status was $ 42.9 million as of both March 31, 2026 and December 31, 2025.

The amortized cost basis of the notes receivable in a non-accrual status was $ 42.9 million as of both June 30, 2026 and December 31, 2025.

Variable Interest through Notes Receivable

The Company has issued notes receivable loans to certain entities that have created variable interests in the associated borrowers totaling $ 78.7 million and $ 103.2 million as of March 31, 2026 and December 31, 2025, respectively.

The Company has issued notes receivable loans to certain entities that have created variable interests in the associated borrowers totaling $ 80.0 million and $ 103.2 million as of June 30, 2026 and December 31, 2025, respectively.

The Company has determined that it is not the primary beneficiary of these variable interest entities ("VIEs").

2 unchanged sentences

The Company has extended loans to various unconsolidated affiliates or members of our unconsolidated affiliates.

The Company had a total principal balance on these loans of $ 42.5 million and $ 65.3 million as of March 31, 2026 and December 31, 2025, respectively.

The Company had a total principal balance on these loans of $ 42.5 million and $ 65.3 million as of June 30, 2026 and December 31, 2025, respectively.

Accounts Receivable

Accounts receivable consists primarily of franchise and related fees due from the hotel franchisees and are recorded at the invoiced amount.

During the three months ended March 31, 2026, the Company recognized provisions for credit losses on accounts receivable of $ 9.5 million in selling, general and administrative expenses, and $ 7.4 million in reimbursable expenses from franchised and managed properties, in the consolidated statements of income.

During the six months ended June 30, 2026, the Company recognized provisions for credit losses on accounts receivable of $ 18.1 million in selling, general and administrative expenses, and $ 14.1 million in reimbursable expenses from franchised and managed properties, in the consolidated statements of income.

During the year ended December 31, 2025, the Company recognized provisions for credit losses on accounts receivable of $ 20.2 million in selling, general and administrative expenses, and $ 15.0 million in reimbursable expenses from franchised and managed properties, in the consolidated statements of income.

During the three months ended March 31, 2026, the Company recorded write-offs, net of recoveries, through the accounts receivable allowance for credit losses of $ 5.8 million.

During the six months ended June 30, 2026, the Company recorded write-offs, net of recoveries, through the accounts receivable allowance for credit losses of $ 12.3 million.

During the year ended December 31, 2025, the Company recorded write-offs, net of recoveries, through the accounts receivable allowance for credit losses of $ 29.6 million.

1 unchanged sentence

The Company has equity method investments in affiliates primarily related to the Company's program to offer equity support to qualified franchisees to develop and operate Cambria Hotels and Everhome Suites branded-hotels in strategic markets.

As of March 31, 2026 and December 31, 2025, the Company had total investments in affiliates in the consolidated balance sheets of $ 132.8 million and $ 135.0 million, respectively, which included investments in affiliates that represent VIEs of $ 132.4 million and $ 134.4 million, respectively.

As of June 30, 2026 and December 31, 2025, the Company had total investments in affiliates in the consolidated balance sheets of $ 137.3 million and $ 135.0 million, respectively, which included investments in affiliates that represent VIEs of $ 136.8 million and $ 134.4 million, respectively.

The Company has determined that it is not the primary beneficiary of any of these VIEs, however the Company does exercise significant influence through its equity ownership and as a result, the investments in these affiliates are accounted for under the equity method of accounting.

During the three months ended March 31, 2026 and 2025, the Company recognized losses totaling $ 6.3 million and $ 0.9 million, respectively, from these investments that represent VIEs.

During the three months ended June 30, 2026 and 2025, the Company recognized losses totaling $ 1.2 million and $ 1.0 million, respectively, from these investments that represent VIEs.

During the six months ended June 30, 2026 and 2025, the Company recognized losses totaling $ 7.5 million and $ 1.9 million, respectively, from these investments that represent VIEs.

The Company's maximum exposure to losses related to its investments in the VIEs is limited to the total of its respective equity investment as well as certain limited payment guaranties, which are described in Note 11 to these consolidated financial statements.

During the three months ended March 31, 2026 and 2025, the Company recognized no impairment charges related to its equity method investments.

During the three and six months ended June 30, 2026 and 2025, the Company recognized no impairment charges related to its equity method investments.

Debt consisted of the following:

March 31, 2026 December 31, 2025

June 30, 2026 December 31, 2025

(in thousands)

$ 400 million senior unsecured notes due 2029 ("2019 Senior Notes") with an effective interest rate of 3.88 %, less a discount and deferred issuance costs of $ 2.2 million and $ 2.4 million at March 31, 2026 and December 31, 2025, respectively

$ 400 million senior unsecured notes due 2029 ("2019 Senior Notes") with an effective interest rate of 3.88 %, less a discount and deferred issuance costs of $ 2.1 million and $ 2.4 million at June 30, 2026 and December 31, 2025, respectively

$ 397,944 $ 397,643

$ 450 million senior unsecured notes due 2031 ("2020 Senior Notes") with an effective interest rate of 3.86 %, less a discount and deferred issuance costs of $ 2.9 million and $ 3.1 million at March 31, 2026 and December 31, 2025, respectively

$ 450 million senior unsecured notes due 2031 ("2020 Senior Notes") with an effective interest rate of 3.86 %, less a discount and deferred issuance costs of $ 2.8 million and $ 3.1 million at June 30, 2026 and December 31, 2025, respectively

447,215 446,910

$ 600 million senior unsecured notes due 2034 ("2024 Senior Notes") with an effective interest rate of 6.11 %, less a discount and deferred issuance costs of $ 9.8 million and $ 10.1 million at March 31, 2026 and December 31, 2025, respectively

$ 600 million senior unsecured notes due 2034 ("2024 Senior Notes") with an effective interest rate of 6.11 %, less a discount and deferred issuance costs of $ 9.5 million and $ 10.1 million at June 30, 2026 and December 31, 2025, respectively

590,523 589,936

$ 1 billion senior unsecured revolving credit facility with an effective interest rate of 4.93 %, less deferred issuance costs of $ 2.6 million and $ 2.8 million at March 31, 2026 and December 31, 2025, respectively

$ 1 billion senior unsecured revolving credit facility due 2029 with an effective interest rate of 4.92 %, less deferred issuance costs of $ 2.4 million and $ 2.8 million at June 30, 2026 and December 31, 2025, respectively

564,807 469,783

Economic development loans with an effective interest rate of 3.00 % at March 31, 2026 and December 31, 2025

Economic development loans with an effective interest rate of 3.00 % at June 30, 2026 and December 31, 2025

Total long-term debt

8 unchanged sentences

Level 3 - Unobservable inputs, supported by little or no market data available, where the reporting entity is required to develop its own assumptions to determine the fair value of the instrument.

The Company does not currently have any assets recorded at fair value on a recurring basis whose fair value was determined using Level 3 inputs and there were no transfers of Level 3 assets during the three months ended March 31, 2026 and during the year ended December 31, 2025.

The Company does not currently have any assets recorded at fair value on a recurring basis whose fair value was determined using Level 3 inputs and there were no transfers of Level 3 assets during the six months ended June 30, 2026 and during the year ended December 31, 2025.

The Company recognized the following assets at fair value on a recurring basis in the consolidated balance sheets:

1 unchanged sentence

(in thousands) Total Level 1 Level 2 Level 3

As of March 31, 2026

As of June 30, 2026

Mutual funds (1)

17 unchanged sentences

Refer to Note 5 for additional information on debt.

As of March 31, 2026 and December 31, 2025, the carrying amounts and the fair values were as follows:

March 31, 2026 December 31, 2025

As of June 30, 2026 and December 31, 2025, the carrying amounts and the fair values were as follows:

June 30, 2026 December 31, 2025

(in thousands) Carrying Amount Fair Value Carrying Amount Fair Value

4 unchanged sentences

The settlement of such fair value amounts may not be possible or a prudent management decision.

The Company's effective income tax rates were 33.0 % and 25.5 % for the three months ended March 31, 2026 and 2025, respectively.

The effective income tax rate for the three months ended March 31, 2026 was higher than the U.S.

The Company's effective income tax rates were 25.1 % and 24.7 % for the three months ended June 30, 2026 and 2025, respectively.

The Company's effective income tax rates were 27.2 % and 25.0 % for the six months ended June 30, 2026 and 2025, respectively.

The effective income tax rates for the three and six months ended June 30, 2026 were higher than the U.S.

federal income tax rate of 21.0% primarily due to the impact of state income taxes and tax expense related to compensation.

The effective income tax rate for the three months ended March 31, 2025 was higher than the U.S.

The effective income tax rates for the three and six months ended June 30, 2025 were higher than the U.S.

federal income tax rate of 21.0% primarily due to the impact of state income taxes.

1 unchanged sentence

The components of the Company’s share-based compensation expense were as follows:

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

(in thousands) 2026 2025 2026

3 unchanged sentences

Total share-based compensation expense $ 4,244 $ 10,953 $ 12,536 $ 21,368

A summary of the share-based award activity during the three months ended March 31, 2026 is presented below:

A summary of the share-based award activity during the six months ended June 30, 2026 is presented below:

Stock Options Restricted Stock Performance Vested

11 unchanged sentences

Forfeited ( 884 ) 134.29 ( 13,533 ) 121.45 ( 27,643 ) 154.57

Outstanding as of March 31, 2026 616,594 $ 114.62 5.6 years 388,127 $ 127.84 432,295 $ 144.29

Options exercisable as of March 31, 2026 553,953 $ 114.48 5.4 years

(1) Any revisions to the outstanding PVRSUs during the three months ended March 31, 2026 is based on the Company's performance relative to the targeted performance conditions in the respective PVRSUs.

The fair value of the restricted stock and the PVRSUs with performance conditions that were granted during the three months ended March 31, 2026 was equal to the market price of the Company’s common stock on the date of the grant.

Outstanding as of June 30, 2026 597,474 $ 115.10 5.4 years 391,918 $ 127.13 423,439 $ 144.80

Options exercisable as of June 30, 2026 534,965 $ 115.00 5.2 years

(1) Any revisions to the outstanding PVRSUs during the six months ended June 30, 2026 is based on the Company's performance relative to the targeted performance conditions in the respective PVRSUs.

The fair value of the restricted stock and the PVRSUs with performance conditions that were granted during the six months ended June 30, 2026 was equal to the market price of the Company’s common stock on the date of the grant.

The fair value of the PVRSUs with market conditions that are based on the Company’s total shareholder return relative to a predetermined peer group was estimated using a Monte Carlo simulation method as of the date of the grant.

6 unchanged sentences

The computation of basic and diluted earnings per share was as follows:

Three Months Ended

Three Months Ended Six Months Ended

June 30, June 30,

(in thousands, except per share amounts) 2026 2025 2026 2025

12 unchanged sentences

The following securities have been excluded from the calculation of the diluted weighted average shares of common stock outstanding because the inclusion of these securities would have an anti-dilutive effect:

Three Months Ended

Three Months Ended Six Months Ended

June 30, June 30,

(in thousands) 2026 2025 2026 2025

Stock options 292 128 292 128

PVRSUs 30 — 30 —

Reportable Segments

8 unchanged sentences

Intersegment Eliminations to revenues is the elimination of Hotel Franchising & Management revenue which includes royalty fees, management and cost reimbursement fees charged to our owned hotels against the franchise and management fee expense that is recognized by our owned hotels in Corporate & Other operating income (loss).

Our President and Chief Executive Officer, who is our chief operating decision maker ("CODM"), utilizes budgeted and forecasted financial information as well as industry metrics, such as revenue per available room ("RevPar"), occupancy, and average daily room rate ("ADR"), to assess the performance and to make resource allocation decisions.

Our Interim Chief Executive Officer, who is our chief operating decision maker ("CODM"), utilizes budgeted and forecasted financial information as well as industry metrics, such as revenue per available room ("RevPar"), occupancy, and average daily room rate ("ADR"), to assess the performance and to make resource allocation decisions.

The CODM does not use assets by operating segment when assessing the performance or when making operating segment resource allocation decisions and therefore, assets by segment are not disclosed below.

The following tables present the financial information for the Company's segments:

Three Months Ended March 31, 2026

Three Months Ended June 30, 2026 Three Months Ended June 30, 2025

(in thousands) Hotel Franchising & Management Corporate &

Other Intersegment Eliminations Consolidated Hotel Franchising & Management Corporate &

Other Intersegment Eliminations Consolidated

7 unchanged sentences

Interest income ( 1,095 ) ( 1,456 )

Other losses, net 721

Other gains, net ( 6,124 ) ( 5,374 )

Equity in net loss of affiliates 1,216 80

Income before income taxes $ 85,882 $ 108,611

Three Months Ended March 31, 2025

Six Months Ended June 30, 2026 Six Months Ended June 30, 2025

(in thousands) Hotel Franchising & Management Corporate &

Other Intersegment Eliminations Consolidated Hotel Franchising & Management Corporate &

Other Intersegment Eliminations Consolidated

7 unchanged sentences

Interest income ( 2,306 ) ( 3,015 )

Other losses, net 436

Other gains, net ( 5,403 ) ( 4,938 )

Equity in net loss of affiliates 7,468 131

5 unchanged sentences

Contingencies

The Company entered into various limited payment guaranties with regards to the Company’s VIEs in order to support it's efforts to develop and own hotels that are franchised under the Company’s brands.

The Company entered into various limited payment guaranties with regards to the Company’s VIEs in order to support its efforts to develop and own hotels that are franchised under the Company’s brands.

Under these limited payment guaranties, the Company has agreed to guarantee a portion of the outstanding debt until certain conditions are met, such as (a) the loan matures, (b) certain debt covenants are achieved, (c) the maximum amount guaranteed by the Company is paid in full, or (d) the Company, through its affiliates, ceases to be a member of the VIE.

As of March 31, 2026, the maximum unrecorded exposure of the principal associated with these limited payment guaranties was $ 40.4 million, plus unpaid expenses and accrued but unpaid interest.

As of June 30, 2026, the maximum unrecorded exposure of the principal associated with these limited payment guaranties was $ 40.4 million, plus unpaid expenses and accrued but unpaid interest.

The Company believes the likelihood of having to perform under these guaranties is remote.

In the event of performance, the Company has recourse for certain of the guaranties in the form of partial guaranties from third parties.

The Company had the following outstanding commitments as of March 31, 2026:

The Company had the following outstanding commitments as of June 30, 2026:

• As part of the acquisition of Radisson Hotels Americas in August 2022, the Company entered into a long-term management arrangement, with an expiration date of July 31, 2031, to manage hotels owned by a third-party.

As of March 31, 2026, the Company managed seven hotels pursuant to the long-term management arrangement.

As of June 30, 2026, the Company managed seven hotels pursuant to the long-term management arrangement.

In conjunction with the management arrangement, the Company entered into a guarantee with the third-party to fund any shortfalls in the payment of the third-party owner’s priority that is stipulated in the management agreement.

As of March 31, 2026, no liability was recognized in the consolidated balance sheets.

For the three months ended March 31, 2026, the Company recognized no guarantee payments in selling, general and administrative expenses in the consolidated statements of income.

As of March 31, 2026, the maximum unrecorded exposure of the guarantee was $ 18.2 million.

As of June 30, 2026, no liability was recognized in the consolidated balance sheets.

For the six months ended June 30, 2026, the Company recognized no guarantee payments in selling, general and administrative expenses in the consolidated statements of income.

As of June 30, 2026, the maximum unrecorded exposure of the guarantee was $ 18.2 million.

• The Company strategically deploys capital in the form of franchise agreement acquisition cost payments across our brands to incentivize franchise development.

2 unchanged sentences

• The Company has committed to provide financing in the form of loans or credit facilities to franchisees for brand development efforts.

As of March 31, 2026, the Company had remaining commitments of up to $ 3.1 million, if certain conditions are met.

As of June 30, 2026, the Company had remaining commitments of up to $ 1.5 million, if certain conditions are met.

• The Company’s franchise agreements require the payment of franchise fees, which include marketing and reservation fees.

2 unchanged sentences

Conversely, to the extent the expenditures incurred exceed the revenues collected, the Company has the contractual enforceable right to assess and collect such amounts from the franchisees.

• The Company has committed to purchase transferable production tax credits generated by qualified solar energy facilities for an aggregate purchase price of approximately $ 193 million over an eleven year period, from 2026 through 2036.

• The Company has committed to purchase transferable production tax credits generated by qualified solar energy facilities.

As of June 30, 2026, the Company has a remaining commitment of approximately $ 179 million through 2036.

The Company’s commitments are contingent upon the satisfaction of certain legal and contractual conditions from the sellers, and the continued availability of the credits under federal tax laws.

2 unchanged sentences

Such indemnifications are granted under various agreements, including those governing (i) purchases or sales of assets or businesses, (ii) leases of real estate, (iii) licensing of trademarks, (iv) access to credit facilities, (v) issuances of debt or equity securities, and (vi) certain operating agreements.

The indemnifications issued are for the benefit of the (i) buyers in sale agreements and sellers in purchase

agreements, (ii) landlords in lease contracts, (iii) franchisees in licensing agreements, (iv) financial institutions in credit facility arrangements, (v) underwriters in debt or equity security issuances, and (vi) parties under certain operating agreements.

The indemnifications issued are for the benefit of the (i) buyers in sale agreements and sellers in purchase agreements, (ii) landlords in lease contracts, (iii) franchisees in licensing agreements, (iv) financial institutions in credit facility

arrangements, (v) underwriters in debt or equity security issuances, and (vi) parties under certain operating agreements.

In addition, these parties are also generally indemnified against any third-party claim resulting from the transaction that is contemplated in the underlying agreement.

2 unchanged sentences

With respect to certain of the aforementioned indemnities, such as the indemnifications of the landlords against third-party claims for the use of real estate property leased by the Company, the Company maintains insurance coverage that mitigates any potential liability.

Chief Executive Officer Transition Post-Employment Benefits

The Company previously announced a leadership transition whereby Patrick Pacious stepped down as the Company’s President & Chief Executive Officer, effective May 20, 2026, and transitioned to serving as an advisor to the Company through August 31, 2026 (the “Transition Period”).

In connection with the leadership transition, the Company and Mr.

Pacious entered into a transition and separation agreement (the “Separation Agreement”), pursuant to which Mr.

Pacious is entitled to post-employment benefits, including cash severance, continued equity award vesting, and other benefits.

The Company expects to recognize a total of $ 2.7 million of post-employment benefits, which will be recognized over the Transition Period.

For the three months ended June 30, 2026, the Company recognized $ 0.2 million of post-employment benefits in selling, general and administrative expenses in the consolidated statements of income.

Choice Hotels Canada Acquisition

15 unchanged sentences

Total consideration, including previously held interest $ 232,220

During the three months ended March 31, 2026, the Company recognized transaction and transition costs of $ 0.2 million in business combination, diligence and transition costs in the consolidated statements of income.

During the three and six months ended June 30, 2026, the Company recognized transaction and transition costs of $ 0.4 million and $ 0.6 million in business combination, diligence and transition costs in the consolidated statements of income.

Fair Values of the Assets Acquired and the Liabilities Assumed

43 unchanged sentences

Accordingly, these unaudited pro forma results are presented for informational purposes only and are not necessarily indicative of what the actual results of operations of the combined company would have been if the Transaction had occurred at the beginning of the period presented, nor are they indicative of the future results of operations.

Three Months Ended

(in thousands) March 31, 2025

Six Months Ended

(in thousands) June 30, 2025

Revenues $ 775,632

3 unchanged sentences

The Company's consolidated statements of income include Choice Hotels Canada's results of operations since the July 2, 2025 acquisition date.

Choice Hotels Canada contributed $ 8.9 million and $ 3.2 million in total revenues and net income, respectively, for the three months ended March 31, 2026.

Choice Hotels Canada contributed $ 11.8 million and $ 3.9 million in total revenues and net income, respectively, for the three months ended June 30, 2026.

Choice Hotels Canada contributed $ 20.8 million and $ 7.1 million in total revenues and net income, respectively, for the six months ended June 30, 2026.

The $ 86.2 million of goodwill recognized is primarily attributable to the value that the Company expects to realize from the existing customer base, cost synergies, and new agreements signed with new franchisees and developers.

The goodwill for the Transaction is fully attributable to the Hotel Franchising & Management reportable segment and is not deductible for tax purposes.

The following table summarizes the carrying amount of the Company's goodwill, including the goodwill arising from the acquisition of Choice Hotels Canada, as of March 31, 2026.

The following table summarizes the carrying amount of the Company's goodwill, including the goodwill arising from the acquisition of Choice Hotels Canada, as of June 30, 2026.

(in thousands)

6 unchanged sentences

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-Q

Item 1. Financial Statements