What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-04-28 compared with 2025-10-22 · 92 added, 131 removed, 230 unchanged (49% of the section changed)

13 unchanged sentences

risks of doing business outside of the U.S.;

risks associated with conflicts in Eastern Europe and the Middle East;

risks associated with geopolitical conflicts, including Iran;

uncertainty resulting from U.S.

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We undertake no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by law.

Hilton is one of the largest global hospitality companies, with 8,995 properties comprising 1,328,821 rooms in 141 countries and territories as of September 30, 2025.

Our premier brand portfolio includes luxury, lifestyle, full service, focused service and all-suites hotel brands, as well as timeshare brands.

As of September 30, 2025, we had 235 million members in our award-winning guest loyalty program, Hilton Honors, an increase of 16 percent from September 30, 2024.

Hilton is one of the largest global hospitality companies, with 9,260 properties comprising 1,362,278 rooms in 144 countries and territories as of March 31, 2026.

Our premier brand portfolio includes luxury, lifestyle, full service, focused service and all-suites brands, as well as timeshare brands.

As of March 31, 2026, we had 251 million members in our award-winning guest loyalty program, Hilton Honors, an increase of 15 percent from March 31, 2025.

Segments and Regions

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The Americas region includes North America, South America and Central America, including all Caribbean nations.

Although the U.S., which represented 64 percent of our system-wide hotel rooms as of September 30, 2025, is included in the Americas region, it is often analyzed separately and apart from the Americas region and, as such, it is presented separately within our hotel operating statistics in "—Results of Operations." The EMEA region includes Europe, which represents the western-most peninsula of Eurasia stretching from Iceland in the west to Russia in the east, and the Middle

East and Africa ("MEA"), which represents the Middle East region and all African nations, including the Indian Ocean island nations.

Although the U.S., which represented 64 percent of our system-wide hotel rooms as of March 31, 2026, is included in the Americas region, it is often analyzed separately and apart from the Americas region and, as such, it is presented separately within our hotel operating statistics in "—Results of Operations." The EMEA region includes Europe, which represents the western-most peninsula of Eurasia stretching from Iceland in the west to Russia in the east, and the Middle East

and Africa ("MEA"), which represents the Middle East region and all African nations, including the Indian Ocean island nations.

Europe and MEA are often analyzed separately and, as such, are presented separately within our hotel operating statistics in "—Results of Operations." The Asia Pacific region includes the eastern and southeastern nations of Asia, as well as India, Australia, New Zealand and the Pacific Island nations.

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As of or for the

Nine Months Ended

September 30, 2025

Three Months Ended

March 31, 2026

Hotels Rooms (1)

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(2) Represents room additions, net of rooms removed from our system.

Net unit growth from September 30, 2024 to September 30, 2025 was 6.5 percent.

(3) The hotels in our development pipeline were under development throughout 128 countries and territories, including 26 countries and territories where we had no existing hotels, with nearly half of the rooms under construction and more than half of the rooms located outside of the U.S.

Net unit growth from March 31, 2025 to March 31, 2026 was 6.3 percent.

(3) The hotels in our development pipeline were under development throughout 129 countries and territories, including 26 countries and territories where we had no existing hotels, with almost half of the rooms under construction and more than half of the rooms located outside of the U.S.

Rooms under construction include rooms for hotels under construction or operating hotels that are in the process of conversion to our system.

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We exclude strategic partner hotels from our comparable hotels.

Of the 8,887 hotels in our system as of September 30, 2025, 489 hotels were strategic partner hotels and 6,339 hotels were classified as comparable hotels.

Our 2,059 non-comparable hotels as of September 30, 2025 included (i) 1,124 hotels that were added to our system after January 1, 2024 or that have undergone a change in brand or ownership type during the current or comparable periods reported and (ii) 935 hotels that were removed from the comparable group for the current or comparable periods reported because they underwent or are undergoing large-scale capital projects, sustained substantial property damage, encountered business interruption or comparable results were otherwise not available for them.

Of the 9,146 hotels in our system as of March 31, 2026, 533 hotels were strategic partner hotels and 6,966 hotels were classified as comparable hotels.

Our 1,647 non-comparable hotels as of March 31, 2026 included (i) 814 hotels that were added to our system after January 1, 2025 or that have undergone a change in brand or ownership type during the current or comparable periods reported and (ii) 833 hotels that were removed from the comparable group for the current or comparable periods reported because they underwent or are undergoing large-scale capital projects, sustained substantial property damage, encountered business interruption or comparable results were otherwise not available for them.

Occupancy represents the total number of room nights sold divided by the total number of room nights available at a hotel or group of hotels for a given period.

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RevPAR is also a useful indicator in measuring performance over comparable periods for comparable hotels.

References to occupancy, ADR and RevPAR are presented on a comparable basis, based on the comparable hotels as of September 30, 2025, and references to ADR and RevPAR are presented on a currency neutral basis, unless otherwise noted.

As such, comparisons of these hotel operating statistics for the three and nine months ended September 30, 2025 and 2024 use foreign currency exchange rates for the three and nine months ended September 30, 2025, respectively.

References to occupancy, ADR and RevPAR are presented on a comparable basis, based on the comparable hotels as of March 31, 2026, and references to ADR and RevPAR are presented on a currency neutral basis, unless otherwise noted.

As such, comparisons of these hotel operating statistics for the three months ended March 31, 2026 and 2025 use foreign currency exchange rates for the three months ended March 31, 2026.

Adjusted EBITDA

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The hotel operating statistics by region for our system-wide comparable hotels were as follows:

Three Months Ended Change Nine Months Ended Change

September 30, 2025 2025 vs.

2024 September 30, 2025 2025 vs.

Three Months Ended Change

March 31, 2026 2026 vs.

Occupancy 67.4 % 1.4 % pts.

72.0 % (0.1) % pts.

ADR $ 157.14 1.5 %

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Occupancy 68.7 % 1.3 % pts.

72.8 % (0.5) % pts.

ADR $ 168.08 1.4 %

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Occupancy 63.4 % 1.1 % pts.

68.7 % 0.2 % pts.

ADR $ 157.35 2.7 %

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Occupancy 66.1 % 2.3 % pts.

73.9 % 0.6 % pts.

ADR $ 150.17 3.2 %

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Occupancy 64.3 % (4.1) % pts.

70.8 % 4.7 % pts.

ADR $ 220.29 4.6 %

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Occupancy 64.8 % 2.2 % pts.

68.5 % 0.4 % pts.

ADR $ 101.22 1.1 %

RevPAR $ 65.58 4.7 %

System-wide RevPAR decreased during the three months ended September 30, 2025, primarily due to declines in the U.S., and increased marginally during the nine months ended September 30, 2025, supported by an improvement in system-wide ADR, which included the impact of inflation.

In the U.S., for both the three and nine months ended September 30, 2025, RevPAR continued to be impacted by macroeconomic uncertainty, which, combined with unfavorable holiday shifts and prior year special events that did not repeat, led to a decline in leisure, group and business travel.

The increases in RevPAR in the Americas region, excluding the U.S., were attributable to increases in inbound leisure and group travel.

Europe and MEA were positively impacted by increases in both leisure and business travel.

The decrease in Asia Pacific during the three months ended September 30, 2025 was primarily driven by declines in group and business travel in China, partially offset by countries and territories outside of China.

RevPAR in Asia Pacific increased during the nine months ended September 30, 2025 due to moderate growth in countries and territories outside of China, offset by a decrease in RevPAR in China, due to a decline in group and business travel.

System-wide RevPAR increased during the three months ended March 31, 2026, primarily due to improvements in ADR in all regions, which included the impact of inflation, with growth in all customer segments driven by easier comparisons and favorable holiday shifts, as well as special events.

RevPAR growth in the U.S.

and the Americas, excluding the U.S., was supported by stronger demand resulting from the earlier timing of U.S.

spring break in the quarter, benefitting both domestic travel in the U.S.

and inbound travel to the Americas, excluding the U.S., particularly to the Caribbean and South America.

Europe was also positively impacted by an increase in inbound travel with strength in leisure and group demand from spring break and the Winter Olympics.

MEA RevPAR decreased as a result of the ongoing conflict in the Middle East, partially offset by increased demand in January and February for special events.

RevPAR in Asia Pacific outside of China increased, driven by improvements in inbound travel due to cherry blossom festivals and other special events, while RevPAR in China increased, driven by recovery in business travel during the quarter.

The table below provides a reconciliation of net income to Adjusted EBITDA:

Three Months Ended Nine Months Ended

September 30, September 30,

2025 2024 2025 2024

Three Months Ended

(in millions)

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Income tax expense

183 147 480 413

Depreciation and amortization expenses 50 41

Loss (gain) on sales of assets, net

Loss on foreign currency transactions

Loss on debt guarantees (1)

Loss (gain) on foreign currency transactions

FF&E replacement reserves 10 13

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Reimbursed expenses (1)

1,902 1,790 5,556 5,164

Other adjustments (2)

Adjusted EBITDA $ 901 $ 795

(1) Amount includes losses on debt guarantees for certain hotels that we manage;

refer to Note 12:

"Commitments and Contingencies" in our unaudited condensed consolidated financial statements for additional information.

(1) Amounts include results from the operation of programs conducted for the benefit of property owners and exclude cash receipts recorded as deferred revenues on our condensed consolidated balance sheets related to these programs.

Under the terms of the related contracts, we do not operate these programs to generate a profit and have contractual rights to adjust future collections to recover prior period expenditures.

(3) Amount for the nine months ended September 30, 2025 includes expected future credit losses on financing receivables.

Amounts for the nine months ended September 30, 2025 and 2024 include restructuring costs related to certain leased hotels.

Amount for the nine months ended September 30, 2024 also includes transaction costs resulting from the amendment of our Term Loans and transaction costs incurred for acquisitions.

Amounts for all periods include net losses (gains) related to certain of our investments in unconsolidated affiliates, severance and other items.

Three Months Ended Percent Nine Months Ended Percent

September 30, Change September 30, Change

2025 2024 2025 vs.

(2) Amount for the three months ended March 31, 2025 includes restructuring costs related to one of our leased hotels.

Amounts for both periods include losses (gains) related to severance and other items, including non-cash charges, such as net losses (gains) related to certain of our investments in unconsolidated affiliates.

Three Months Ended Percent

March 31, Change

2026 2025 2026 vs.

(in millions) (in millions)

(in millions)

Franchise and licensing fees $ 696 $ 625 11.4

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Total management fees $ 171 $ 160 6.9

The increases in franchise fees included net increases of $15 million and $47 million during the three and nine months ended September 30, 2025, respectively, as a result of net hotel additions between the periods.

The increase in franchise fees for the nine months ended September 30, 2025 also included an increase of $7 million in termination fees.

The currency neutral increase in franchise fees at our comparable franchised hotels of $10 million for the nine months ended September 30, 2025 was largely attributable to increases of in-place rates charged to hotels, partially offset by a decrease in fees due to a decrease in RevPAR.

During the nine months ended September 30, 2025, RevPAR at our comparable franchised hotels decreased 0.6 percent, due to decreases in occupancy of 0.4 percentage points and ADR of 0.1 percent.

Licensing fees increased $25 million and $83 million during the three and nine months ended September 30, 2025, respectively, as a result of increases in fees from our strategic partnerships, primarily resulting from activity under our co-branded credit card arrangements and HGV.

Increased fees from HGV were the result of increased timeshare revenues earned by HGV, inclusive of the impact of adding new timeshare properties to our system between the periods.

The nine months ended September 30, 2025 also included an increase in branded residential fees.

The increase in management fees for the three months ended September 30, 2025 was primarily attributable to an increase in termination fees.

For the nine months ended September 30, 2025, management fees from comparable properties increased $14 million, on a currency neutral basis, as a result of an increase in RevPAR at our comparable managed hotels of 3.1 percent due to increases in occupancy of 0.8 percentage points and ADR of 1.8 percent.

The increase in management fees from comparable properties for the nine months ended September 30, 2025 was partially offset by a decrease of $12 million in termination fees received from hotels that exited our system.

Three Months Ended Percent Nine Months Ended Percent

September 30, Change September 30, Change

2025 2024 2025 vs.

The increase in franchise fees included an increase of $32 million resulting from an increase in termination fees, as well as an increase of $12 million as a result of net hotel additions.

The currency neutral increase in franchise fees at our comparable franchised hotels of $17 million was primarily due to an increase in RevPAR.

During the three months ended March 31, 2026, RevPAR at our comparable franchised hotels increased 3.3 percent, due to increases in occupancy of 1.3 percentage points and ADR of 1.3 percent.

Licensing fees increased $8 million, as a result of increases in fees from our strategic partnerships, primarily resulting from activity under our co-branded credit card arrangements.

Base management fees and incentive management fees from comparable properties increased $4 million each, for a total increase of $8 million, on a currency neutral basis, as a result of an increase in RevPAR at our comparable managed hotels of 4.4 percent due to increases in occupancy of 1.5 percentage points and ADR of 2.1 percent.

Three Months Ended Percent

March 31, Change

2026 2025 2026 vs.

(in millions) (in millions)

(in millions)

Ownership revenues

$ 249 $ 234 6.4

The $8 million decrease in ownership revenues for the three months ended September 30, 2025 included a currency neutral decrease of $22 million, partially offset by a $14 million increase resulting from favorable fluctuations in foreign currency exchange rates.

The $34 million decrease in ownership revenues for the nine months ended September 30, 2025 included a currency neutral decrease of $61 million, partially offset by a $27 million increase resulting from favorable fluctuations in foreign currency exchange rates.

Revenues from our comparable hotels in our ownership segment increased $6 million, on a currency neutral basis, during the nine months ended September 30, 2025 as a result of an increase in RevPAR of 3.1 percent due to increases in occupancy of 1.0 percentage points and ADR of 1.7 percent.

Revenues from our non-comparable hotels within our ownership segment decreased $23 million and $67 million for the three and nine months ended September 30, 2025, respectively, on a currency neutral basis, primarily due to hotels that exited our system or changed ownership types between the periods.

Three Months Ended Percent Nine Months Ended Percent

September 30, Change September 30, Change

2025 2024 2025 vs.

The $15 million increase in ownership revenues included a $13 million increase resulting from favorable fluctuations in foreign currency exchange rates.

Revenues from our comparable hotels in our ownership segment increased $8 million, on a currency neutral basis, as a result of an increase in RevPAR of 4.1 percent due to an increase in occupancy of 3.7 percentage points, partially offset by a decrease in ADR of 1.6 percent.

Revenues from our non-comparable hotels within our ownership segment decreased $6 million on a currency neutral basis, primarily due to a hotel that exited our system between the periods.

Three Months Ended Percent

March 31, Change

2026 2025 2026 vs.

(in millions) (in millions)

(in millions)

Other revenues $ 66 $ 46 43.5

The increases in other revenues were related to increases in vendor rebates for activity related to our purchasing operations.

The increase in other revenues was primarily related to an increase in vendor rebates for activity related to our purchasing operations.

Operating Expenses

Three Months Ended Percent Nine Months Ended Percent

September 30, Change September 30, Change

2025 2024 2025 vs.

Three Months Ended Percent

March 31, Change

2026 2025 2026 vs.

(in millions) (in millions)

(in millions)

Ownership expenses

$ 235 $ 239 (1.7)

During the three and nine months ended September 30, 2025, ownership expenses included currency neutral decreases of $23 million and $53 million, respectively, which were partially offset by increases of $12 million and $22 million, respectively, resulting from unfavorable fluctuations in foreign currency exchange rates.

The $19 million and $54 million decreases in ownership expenses, on a currency neutral basis, from our non-comparable hotels within our ownership segment during the three and nine months ended September 30, 2025, respectively, were primarily due to hotels that exited our system or changed ownership types between the periods.

Three Months Ended Percent Nine Months Ended Percent

September 30, Change September 30, Change

2025 2024 2025 vs.

The $4 million decrease in ownership expenses included a decrease of $19 million on a currency neutral basis, partially offset by an increase of $15 million resulting from unfavorable fluctuations in foreign currency exchange rates.

Operating expenses from our non-comparable consolidated hotels within our ownership segment decreased $22 million, on a currency neutral basis, primarily due to hotels that are undergoing renovations or that exited our system between the periods.

Three Months Ended Percent

March 31, Change

2026 2025 2026 vs.

(in millions) (in millions)

(in millions)

Depreciation and amortization expenses $ 50 $ 41 22.0

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Other expenses 22 26 (15.4)

The increases in depreciation and amortization expenses were primarily related to software placed in service between the periods.

The decreases in general and administrative expenses for the three and nine months ended September 30, 2025 were due to lower general corporate costs.

The decrease for the nine months ended September 30, 2025 was also due to a decrease in costs related to payroll and other compensation costs.

The decrease in other expenses for the nine months ended September 30, 2025 was primarily due to decreased procurement volume from our purchasing operations with properties outside of our system.

The increase in depreciation and amortization expenses was primarily related to software placed in service between the periods.

The increase in general and administrative expenses was primarily due to an increase in costs related to payroll and other compensation costs.

Non-operating Income and Expenses

Three Months Ended Percent Nine Months Ended Percent

September 30, Change September 30, Change

2025 2024 2025 vs.

Three Months Ended Percent

March 31, Change

2026 2025 2026 vs.

(in millions) (in millions)

(in millions)

Interest expense $ (162) $ (145) 11.7

Loss on foreign currency transactions

(9) (3) NM (1)

Other non-operating income (loss), net

(5) 11 NM (1)

15 (17) NM (1)

Gain (loss) on foreign currency transactions

Other non-operating income, net

Income tax expense

1 unchanged sentence

(1) Fluctuation in terms of percentage change is not meaningful.

In both March 2024 and September 2024, we issued $1.0 billion Senior Notes (the "March 2024 Senior Notes issuance" and the "September 2024 Senior Notes issuance," respectively) for a total aggregate principal amount of $2.0 billion for the year.

During the three months ended September 30, 2025, the increase i n interest expense was primarily attributable to an increase of $25 million due to the September 2024 Senior Notes issuance and the July 2025 Senior Notes issuance.

Th e increase during the nine months ended September 30, 2025 was primarily attributable to an increase of $70 million due to the March 2024 Senior Notes issuance, the September 2024 Senior Not es issuance and the July 2025 Senior Notes issuance.

The increases were partially offset by decreases in interest expense of $7 million and $12 million during the three and nine months ended September 30, 2025, respectively, due to the repayment of the May 2025 Senior Notes and decreases of $4 million and $16 million on the unhedged portion of our Term Loan s during the three and nine months ended September 30, 2025, respectively, primarily as a result o f decreases in one-month SOFR for the comparable periods.

The net losses on foreign currency transactions are the result of changes in foreign currency exchange rates, including on certain intercompany financing arrangements, such as short-term cross-currency intercompany loans, as well as transactions denominated in foreign currencies.

Th e net change in other non-operating income (loss), net for the three months ended September 30, 2025 was primarily driven by a loss on an investment in an unconsolidated affiliate, which was recognized during the three months ended September 30, 2025.

The net change in other non-operating income (loss), net during the nine months ended September 30, 2025 was primarily driven by a decrease in losses on debt guarantees for certain hotels that Hilton manages, which were recognized during the nine months ended September 30, 2024, partially offset by a loss on an investment in an unconsolidated affiliate.

"Commitments and Contingencies" in our unaudited condensed consolidated financial statements for additional information on the losses on debt guarantees.

The increases in income tax expense during the three and nine months ended September 30, 2025 were primarily attributable to the increase in income before income taxes.

In May 2025, we repaid, at maturity, all $500 million in aggregate principal amount of the 5.375% Senior Notes due 2025 (the "May 2025 Senior Notes").

In both July 2025 and December 2025, we issued $1.0 billion Senior Notes (the "July 2025 Senior Notes issuance" and the "December 2025 Senior Notes issuance," respectively) for a total aggregate principal amount of $2.0 billion.

In December 2025, we also redeemed all $500 million in aggregate principal amount of the 5.750% Senior Notes due 2028 (the "2028 Senior Notes").

The increase in interest expense was primarily attributable to an increase of $29 million due to the July 2025 Senior Notes issuance and December 2025 Senior Notes issuance.

The increase was partially offset by a decrease in interest expense of $14 million d ue to the repayment of the May 2025 Senior Notes and the 2028 Senior Notes .

The net gains and losses on foreign currency transactions are the result of changes in foreign currency exchange rates, including on certain intercompany financing arrangements, such as short-term cross-currency intercompany loans, as well as transactions denominated in foreign currencies.

Th e net change in other non-operating income, net during the three months ended March 31, 2026 was primarily driven by a decrease in interest income due to decreased interest rates and a lower average cash balance.

The increase in income tax expense was primarily attributable to the increase in income before income taxes.

Segment Results

As of September 30, 2025, our management and franchise segment included 858 managed and 8,091 franchised and licensed properties, which included 108 timeshare and 489 strategic partner hotels, consisting of 1,313,534 total rooms, and our ownership segment included 46 hotels consisting of 15,287 total rooms.

As of March 31, 2026, our management and franchise segment included 875 managed and 8,339 franchised and licensed properties, which included 114 timeshare and 533 strategic partner hotels, consisting of 1,346,991 total rooms, and our ownership segment included 46 hotels consisting of 15,287 total rooms.

Refer to Note 10:

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Our ownership segment Adjusted EBITDA reflects revenues from consolidated hotels within our ownership segment, less (i) ownership expenses, excluding FF&E replacement reserves expenses, share-based compensation expenses and certain other items, less (ii) fees charged by our management and franchise segment to our ownership segment, plus (iii) income (loss) from hotels owned or leased by entities in which we own a noncontrolling financial interest.

For the three and nine months ended September 30, 2025, refer to "—Revenues" for further discussion of the changes in our franchise and licensing fees and total management fees as well as for further discussion of the changes in revenues from our ownership segment.

For the three months ended March 31, 2026, refer to "—Revenues" for further discussion of the changes in our franchise and licensing fees and total management fees as well as for further discussion of the changes in revenues from our ownership segment.

Refer to "—Operating Expenses" for further discussion of the changes in our ownership segment expenses.

Liquidity and Capital Resources

As of September 30, 2025, we had total cash and cash equivalents of $1,126 million, including $69 million of restricted cash and cash equivalents.

As of March 31, 2026, we had total cash and cash equivalents of $619 million, including $55 million of restricted cash and cash equivalents.

The majority of our restricted cash and cash equivalents is related to cash collateral and cash held for FF&E reserves.

Our known short-term liquidity requirements primarily consist of funds necessary to pay for operating and other expenditures, including:

(i) costs associated with the management and franchising of hotels;

(i) costs associated with the management and franchising of hotels, including those costs related to our Hilton Honors program, marketing, sales and brand programs and shared services;

(ii) corporate expenses;

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(vii) share repurchases;

and (viii) commitments to owners in our management and franchise segment made in the normal course of business for which we are reimbursed by these owners through Hilton Honors and program fees to operate our Hilton Honors program, marketing, sales and brands programs and shared services.

In May 2025, we repaid the May 2025 Senior Notes at maturity.

During the nine months ended September 30, 2025, we borrowed and subsequently repaid an aggregate $875 million under the Revolving Credit Facility.

In July 2025 we issued $1.0 billion of 5.750% 2033 Senior Notes and used a portion of the net proceeds to fully repay the net borrowings under the Revolving Credit Facility from earlier during the period.

In March 2026, we amended the credit agreement governing our Revolving Credit Facility to extend the maturity date, which we expect to be March 2031, and reprice the rate on amounts outstanding to SOFR plus 1.00%.

Refer to Note 4:

"Debt" in our unaudited condensed consolidated financial statements for additional information.

Except for the repayment of the May 2025 Senior Notes and the July 2025 Senior Notes issuance, there were no material changes to our contractual obligations from what we previously disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024.

During the nine months ended September 30, 2025, we repurchased approximately 9.7 million shares of our common stock for $2.4 billion, excluding the excise tax on share repurchases.

As of September 30, 2025, approximately $2.0 billion remained available for share repurchases under our stock repurchase program.

Except for the amendment to the credit agreement governing our Revolving Credit Facility, there were no material changes to our contractual obligations from what we previously disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025.

During the three months ended March 31, 2026, we repurchased approximately 2.7 million shares of our common stock for $825 million, excluding the excise tax on share repurchases.

As of March 31, 2026, approximately $3.9 billion remained available for share repurchases under our stock repurchase program.

In circumstances where we have the opportunity to support our strategic objectives, we may provide guarantees or other commitments, as necessary, to owners of hotels that we currently or in the future will manage or franchise or other third parties.

"Commitments and Contingencies" in our unaudited condensed consolidated financial statements for additional information on our commitments that were outstanding as of September 30, 2025.

"Commitments and Contingencies" in our unaudited condensed consolidated financial statements for additional information on our commitments that were outstanding as of March 31, 2026.

We have a long-term investment policy that is focused on the preservation of capital and maximizing the return on new and existing investments and returning available capital to stockholders through dividends and share repurchases.

Within the framework of our investment policy, we intend to finance our business activities primarily with cash on our balance sheet as of September 30, 2025, cash generated from our operations and, as needed, the use of the available capacity of our Revolving Credit Facility.

Within the framework of our investment policy, we intend to finance our business activities primarily with cash on our balance sheet as of March 31, 2026, cash generated from our operations and, as needed, the use of the available capacity of our Revolving Credit Facility.

We have continued access to debt markets and have obtained, and expect to continue to be able to obtain, financing as a source of liquidity as required and to extend maturities of existing borrowings, if necessary.

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The objectives of our cash management policy are maintaining the availability of liquidity and minimizing operational costs.

We may from time to time issue or incur or increase our capacity to incur new debt and/or purchase our outstanding debt through underwritten offerings, open market transactions, privately negotiated transactions or otherwise.

We have in the past, and may, from time to time, in the future issue or incur or increase our capacity to incur new debt and/or purchase our outstanding debt through underwritten offerings, open market transactions, privately negotiated transactions or otherwise.

Issuances or incurrence of new debt (or an increase in our capacity to incur new debt) and/or purchases or retirements of outstanding debt, if any, will depend on prevailing market conditions, liquidity requirements, contractual restrictions and other factors.

2 unchanged sentences

The following table summarizes our net cash flows:

Nine Months Ended Percent

September 30, Change

Three Months Ended Percent

March 31, Change

2026 2025 2026 vs.

2 unchanged sentences

Net cash used in investing activities (39) (50) (22.0)

Net cash used in financing activities (2,052) (274) NM (1)

(1) Fluctuation in terms of percentage change is not meaningful.

Net cash used in financing activities (923) (974) (5.2)

Operating Activities

Cash flows from operating activities were primarily generated from management, franchise and licensing fee revenue.

The increase in net cash inflows during the period included an increase in cash inflows generated from franchise and licensing fees, discussed in "—Revenues." Additionally, there was a $234 million decrease in income tax payments due to timing as well as a decrease in cash outflows of $77 million for debt guarantee payments that were made during the nine months ended September 30, 2024.

The increase in net cash inflows during the period included an increase in cash inflows generated from management, franchise and licensing fees, discussed in "—Revenues," largely as a result of revenues from net franchise hotel additions, an increase in RevPAR at our comparable managed and franchised hotels and an increase of $32 million in termination fees received from franchised properties.

Investing Activities

Net cash used in investing activities for the nine months ended September 30, 2024 primarily included cash flows related to the acquisitions of (i) the Graduate brand and the associated franchise contracts and (ii) a controlling financial interest in the Sydell Group, both completed during the nine months ended September 30, 2024.

Net cash used in investing activities for both periods included:

(i) capital expenditures for property and equipment related to corporate property and the renovation of certain hotels in our ownership segment, and (ii) capitalized software costs that were related to various systems initiatives for the benefit of both our hotel owners and our overall corporate operations.

Net cash used in investing activities primarily included cash flows related to:

(i) capitalized software costs related to various systems initiatives for the benefit of both our hotel owners and our overall corporate operations, (ii) capital expenditures for property and equipment related to corporate property and the renovation of certain consolidated hotels and (iii) issuance of financing receivables.

Financing Activities

The increase in net cash used in financing activities included (i) $500 million of cash outflows for the repayment of the May 2025 Senior Notes during the nine months ended September 30, 2025, (ii) a cash inflow of $2.0 billion from the March

2024 Senior Notes issuance and the September 2024 Senior Notes issuance during the nine months ended September 30, 2024, and (iii) a $276 million increase in cash outflows for share repurchases.

The increase in net cash used was partially offset by a cash inflow of $1.0 billion from the July 2025 Senior Notes issuance.

The decrease in net cash used in financing activities includes a $54 million decrease in cash outflows for share repurchases.

Debt and Borrowing Capacity

As of September 30, 2025, our total indebtedness, excluding the deduction for unamortized deferred financing costs and discount, was approximately $11.7 billion.

No debt amounts were outstanding under the Revolving Credit Facility as of September 30, 2025, which had an available borrowing capacity of $1,898 million after considering $102 million of letters of credit outstanding.

As of March 31, 2026, our total indebtedness, excluding the deduction for unamortized deferred financing costs and discount, was approximately $12.5 billion.

No debt amounts were outstanding under the Revolving Credit Facility, which had an available borrowing capacity of $1,894 million after considering $106 million of letters of credit outstanding.

In April 2026, we borrowed $265 million under the Revolving Credit Facility for general corporate purposes and subsequently repaid $115 million of the outstanding indebtedness.

For additional information on our total indebtedness and guarantees on our debt, refer to Note 4:

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The preparation of our unaudited condensed consolidated financial statements in accordance with GAAP requires us to make estimates and assumptions that affect reported amounts and related disclosures.

We have discussed the estimates and assumptions that we believe are critical because they involve a higher degree of judgment in their application and are based on information that is inherently uncertain in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, and, during the nine months ended September 30, 2025, there were no material changes to those critical accounting estimates that were previously disclosed.

We have discussed the estimates and assumptions that we believe are critical because they involve a higher degree of judgment in their application and are based on information that is inherently uncertain in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, and, during the three months ended March 31, 2026, there were no material changes to those critical accounting estimates that were previously disclosed.

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What changed 10-Q

Item 2. Management’s Discussion and Analysis