What changed in this filing

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Item 7. Management’s Discussion and Analysis

2026-02-25 compared with 2025-02-26 · 272 added, 216 removed, 806 unchanged (38% of the section changed)

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is the largest lodging REIT in NAREIT’s composite index and one of the largest owners of luxury and upper upscale hotels.

As of February 21, 2025, we own 81 hotels in the United States, Canada and Brazil and have minority ownership interests in an additional 40 hotels through joint ventures in the United States and in India.

As of February 20, 2026, we own 76 hotels in the United States, Canada and Brazil and have minority ownership interests in an additional 90 hotels through joint ventures in the United States.

These hotels are operated primarily under brand names that are among the most respected and widely recognized in the lodging industry.

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We generally receive a cash distribution from our hotel managers each month, which distribution reflects hotel-level sales less property-level operating expenses (excluding depreciation).

Operations from our domestic portfolio account for approximately 98% of our total revenues and 2% relate to our five hotels in Canada and Brazil.

The following table presents the components of our hotel revenues as a percentage of our total revenue:

Hotel revenues represented approximately 98% of our total 2025 revenues, while the remaining 2% related to condominium sales.

Operations from our domestic portfolio account for approximately 98% of our total hotel revenues and 2% relate to our five hotels in Canada and Brazil.

The following table presents the components of our hotel revenues as a percentage of our total hotel revenues:

Hotel Revenues

• Rooms revenues .

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Hotel operating expenses represent approximately 97% of our total operating costs and expenses.

The following table presents the components of our hotel operating expenses as a percentage of our total operating costs and expenses:

The following table presents the components of our hotel operating expenses as a percentage of our total hotel operating expenses:

Hotel Operating

• Rooms expenses .

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NAREIT adopted FFO to promote an industry-wide measure of REIT operating performance.

We also adjust NAREIT FFO for gains and losses on extinguishment of debt, certain acquisition costs, litigation gains or losses outside the ordinary course of business and severance costs outside the ordinary course of business.

We also adjust NAREIT FFO for gains and losses on extinguishment of debt, non-cash stock-based compensation, certain acquisition costs, litigation gains or losses outside the ordinary course of business and severance costs outside the ordinary course of business.

• Comparable hotel EBITDA.

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NAREIT adopted EBITDA for real estate (“EBITDA re” ) in order to promote an industry-wide measure of REIT operating performance.

We also adjust EBITDA re for property insurance gains and property damage losses, certain acquisition costs, litigation gains or losses outside the ordinary course of business and severance costs outside the ordinary course of business (“Adjusted EBITDA re ”).

We also adjust EBITDA re for property insurance gains and property damage losses, non-cash stock-based compensation, certain acquisition costs, litigation gains or losses outside the ordinary course of business and severance costs outside the ordinary course of business (“Adjusted EBITDA re ”).

Summary of 2025 Operating Results

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See "Comparable Hotel RevPAR Overview" for results of the portfolio based on our ownership period, without these adjustments.

Total revenues increased $373 million, or 7.0%, compared to 2023, benefiting from the 2024 acquisitions of the 1 Hotel Nashville and Embassy Suites by Hilton Nashville Downtown, 1 Hotel Central Park and The Ritz-Carlton O'ahu, Turtle Bay and also the results of The Ritz-Carlton, Naples, which was closed in the first half of 2023 as a result of Hurricane Ian.

However, this was partially offset by the closure of The Don CeSar for the fourth quarter of 2024 following the impacts of Hurricanes Helene and Milton.

In addition, continued growth in group business, building on its recovery in 2023, drove improvements in food and beverage revenues.

Comparable hotel RevPAR increased 0.9%, compared to 2023, due to an increase in average room rates, as occupancy remained flat, reflecting continued strong group demand, tempered by continued imbalance in outbound travel from the U.S.

compared to international inbound travel and the slow recovery in Maui following the August 2023 wildfires.

In 2024, performance at our Maui hotels impacted comparable hotel RevPAR by approximately 160 basis points for the full year.

Comparable hotel Total RevPAR increased 2.1% for the year due primarily to improvements in food and beverage revenues driven by the strength in group business, as well as strong spa and other ancillary revenues.

The growth was led by our Denver, Nashville and Northern Virginia markets with increases of 13.2%, 12.9% and 10.3%, respectively, compared to 2023, through a combination of rate and occupancy growth, driven by strong group demand.

Our hotels in Jacksonville and New Orleans also outperformed our portfolio with comparable hotel Total RevPAR increases of 7.2% and 7.1%, respectively.

These strong performances were offset by comparable hotel Total RevPAR declines at our Atlanta and San Francisco/San Jose markets of 9.4% and 5.3%, respectively.

The declines were driven primarily by a decrease in business travel and short-term transient demand, with Atlanta also affected by disruption from renovations.

In addition, comparable hotel Total RevPAR at our Maui market declined by 11.0% due to the continuing impacts of the August 2023 Maui wildfires (see “Statement of Operations Results and Trends”).

Total revenues increased $430 million, or 7.6%, compared to 2024, due to improvements in room revenues driven by strong short-term transient demand, coupled with increased out-of-room spend driving food and beverage and other revenues.

In addition, $99 million of revenues were recognized during 2025 from the sale of 16 condominium units in the development adjacent to the Four Seasons Resort Orlando at Walt Disney World ® Resort.

Total revenues also benefited from a full year of operations for the 2024 acquisitions of the 1 Hotel Nashville and Embassy Suites by Hilton Nashville Downtown, 1 Hotel Central Park and The Ritz-Carlton O'ahu, Turtle Bay.

However, this was partially offset by the 2025 dispositions of The Westin Cincinnati and Washington Marriott at Metro Center, as well as the closure of The Don CeSar through March 26, 2025, following the impacts of Hurricanes Helene and Milton.

Comparable hotel RevPAR increased 3.8%, compared to 2024, primarily due to an increase in average room rates of 4.4%, while occupancy remained relatively flat compared to 2024.

Strong transient demand, along with the continuing recovery in Maui, collectively more than offset a decline in group demand due to less short-term bookings in the year and planned renovation disruption.

Comparable hotel Total RevPAR increased 4.2% for the year, primarily due to the rate increases and improvements in food and beverage revenues driven by strength in transient business, as well as strong spa and other ancillary revenues.

The growth was led by our Atlanta and Maui markets with increases of 16.2% and 13.7%, respectively, compared to 2024, as Atlanta benefitted from the completion of renovation projects underway in 2024 and Maui experienced a strong recovery in 2025 from the 2023 wildfires.

In addition, comparable hotel Total RevPAR increased at some of our larger markets, including San Francisco and New York with increases of 12.7% and 12.2%, respectively, due to strong demand from city-wide events and transient demand.

These strong performances were partially offset by comparable hotel Total RevPAR declines at our Austin and San Diego markets of 17.2% and 5.3%, respectively.

The declines in these markets were driven primarily by large-scale renovation projects at certain properties, while Austin was further impacted by the multi-year closure of the city's convention center that started earlier in 2025.

Operating Profit

As expected, we faced higher wages and inflationary pressures compared to 2023.

This, coupled with Maui performance, led to an operating profit margin (calculated based on GAAP operating profit as a percentage of GAAP revenues) decline of 20 basis points to 15.4% in 2024, compared to 15.6% in 2023, despite an increase in net gains on insurance settlements.

As expected, margins during the year were affected by an increase in wages expense compared to 2024, though increases in room rates were able to offset the impact.

This, coupled with an $86 million decrease in net gains on insurance settlements, led to an operating profit margin (calculated based on GAAP operating profit as a percentage of GAAP revenues) decline of 140 basis points to 14.0% in 2025, compared to 15.4% in 2024.

Operating profit margins under GAAP are also significantly affected by several items, including acquisitions, dispositions, depreciation expense and corporate expenses.

Our comparable hotel EBITDA margins, which exclude these items, declined 60 basis points to 29.2% for the year, down from 29.8% in 2023 due to the trends discussed above.

Net Income, Adjusted EBITDA re and Adjusted FFO per Diluted Share

Our comparable hotel EBITDA margins, which exclude these items, declined 40 basis points to 28.9% for the year, down from 29.3% in 2024 as operational improvements were offset by the increase in wages expense compared to 2024 and a decrease in net gains on insurance settlements of $21 million for comparable hotels.

Net Income, Adjusted EBITDA re, Diluted Earnings per Common Share, and Adjusted FFO per Diluted Share

Net income for Host Inc.

was $707 million, a decrease of $45 million, or 6.0%, from the prior year, reflecting the decrease in gains on asset sales of $71 million and an increase in interest expense of $24 million, partially offset by an increase in net gains on insurance settlements of $24 million.

These results led to a 4.8% decrease in diluted earnings per common share for Host Inc.

Adjusted EBITDA re, which excludes gain on sale of assets and interest expense, among other items, increased 1.7% to $1,656 million as a result of operations from our acquisitions and the resumption of

operations at The Ritz-Carlton, Naples, which was closed during the first half of 2023, despite a $43 million decrease in business interruption gains.

Adjusted FFO per diluted share increased 2.6% to $1.97 in 2024, reflecting the increase in Adjusted EBITDA re as well as the impact of share repurchases in 2024 and 2023.

increased $69 million, or 9.8%, to $776 million, primarily due to improvements in operating results and $148 million of gains on asset sales during the year, partially offset by the decrease in net gains on insurance settlements noted above and increases in wage and benefit expense, interest expense and income taxes.

addition, $17 million of net income was recognized during 2025 from the sale of 16 condominium units in the development adjacent to the Four Seasons Resort Orlando at Walt Disney® Resort.

These changes, combined with the benefit of share repurchases in 2025 and 2024, led to an 11.1% increase in diluted earnings per common share for Host Inc.

Adjusted EBITDA re, which excludes gain on property insurance, gain on sale of assets and interest expense, among other items, increased 4.6% to $1,757 million, reflecting improvements in revenues from operations and the condominium sales, partially offset by the decline in business interruption proceeds and increases in wages and benefits.

Adjusted FFO per diluted share increased 3.5% to $2.07 in 2025, reflecting the changes in Adjusted EBITDA re and the impact of share repurchases in 2025 and 2024, partially offset by increases in interest expense and income taxes.

The trends and transactions described above for Host Inc.

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statements of operations relates to the treatment of income attributable to the unaffiliated limited partners of Host L.P.

Throughout 2024, group business at our properties continued to improve and group revenue on the books remains strong for 2025.

Average rates remained elevated at our resorts compared to pre-pandemic levels, although they have moderated from post-pandemic highs.

However, further growth has been hampered by the slow recovery from the wildfires in Maui, one of our largest markets by revenues, and the slower post-pandemic recovery of the San Francisco market.

These trends are expected to continue into 2025.

On the macroeconomic front, the U.S.

economy remained resilient during 2024 with real U.S.

GDP growth of 2.8%, as unemployment remained at low levels and business investment grew at a robust 3.7%.

lodging demand is correlated to changes in gross domestic product (GDP) and business investment, although the recovery of the industry post-pandemic has lagged that of the economy.

Inflation moderated substantially during the year but remains a concern for 2025, with fewer rate cuts expected in the coming year.

In addition, the new administration has brought heightened uncertainty due to anticipated changes to trade policy, tax policy and government spending.

Other risks to economic growth remain, including geopolitical instability throughout the globe, high interest rates and volatile oil prices.

As a result, leading indicators point toward slower economic growth in 2025.

As of February 2025, Blue Chip Economic Indicators consensus projects real U.S.

GDP growth of 2.2%, reflecting a deceleration from 2024.

Business investment growth is also anticipated to slow over the coming year, averaging 2.3%, down from 3.7% in 2024.

Hotel supply growth is anticipated to remain below the historical average, although we expect to see above-average growth in a few markets where our hotels are located, such as Nashville and Austin.

Supply chain challenges have resulted in project delays across the U.S., and a tight lending environment has created construction financing challenges for future projects.

Throughout 2025, strong leisure transient demand led to comparable hotel RevPAR growth of 3.8% compared to 2024.

Results reflect the improving leisure demand on Maui and an increase in transient revenue driven by higher average rates, particularly at our resorts.

While recent economic policy changes created heightened uncertainty, higher-income earners were undeterred in 2025 and continued to travel which supported our overall results.

These trends are expected to continue into 2026, although performance is likely to remain uneven across markets and lodging chain scales.

continues to face a persistent imbalance between strong outbound travel and a delayed recovery in international inbound visitation.

While inbound travel is expected to rebound modestly in 2026, supported in part by the FIFA World Cup games hosted in the United States, the recovery is expected to be partial rather than complete, as tariff-related sentiment and visa restrictions continue to limit the U.S.'s competitiveness as an international destination.

Maui is expected to continue its recovery in 2026.

From a macroeconomic perspective, economic conditions during 2025 remained generally supportive to economic growth, though increasingly bifurcated across income groups and sectors with sustained high-income consumer spending, and through continued business investment, particularly in artificial intelligence.

Lodging demand has historically moved with broader economic activity, though the industry's post-pandemic recovery has been more uneven than that of the overall economy.

As a result, lodging performance in 2025 reflected a more pronounced bifurcation than the broader economy, with luxury and upper upscale tiers delivering growth while lower chain scales exhibited heightened sensitivity to shifts in discretionary spending, pricing power, and demand composition.

Looking ahead to 2026, the divided nature of the economic trends are expected to persist, with discretionary spending and travel demand increasingly concentrated among higher-income households.

These households represent the majority of the customers at our hotels, which operate in the luxury and upper-upscale tiers.

Inflation is expected to remain above the Federal Reserve’s target in 2026, reinforcing a cautious monetary policy backdrop and limiting the scope for aggressive rate cuts, while elevated policy uncertainty and higher-for-longer interest rates present downside risks to growth.

Despite these risks, the U.S.

economy is expected to remain on a firm growth path, with real GDP projected to grow approximately 2.4% and business investment expected to grow approximately 3.2%, according to the February 2026 Blue Chip Economic Indicators.

Hotel supply growth is anticipated to remain below the historical average, although we expect to see above-average growth in a few markets where our hotels are located.

Supply chain challenges, which may be exacerbated by current tariffs and trade policies, have resulted in project delays across the U.S., and a prolonged tight lending environment has created construction financing challenges for future projects.

We anticipate that the construction pipeline will remain modest until macroeconomic uncertainty moderates and interest rates decline further.

Based on the trends noted, we expect comparable hotel RevPAR growth for the full year 2026 will be between 2.0% and 3.5%.

In addition, we expect margins to decline in comparison to 2024, driven by higher wages and benefits, including increases driven by new union contracts in certain cities, as well as growth in insurance and real estate taxes.

As discussed above, the current outlook for the lodging industry remains uncertain, reflecting varying analyst assumptions surrounding the impact of higher interest rates, inflation, the recovery in Maui and escalating geopolitical conflicts.

Therefore, there can be no assurances as to lodging demand performance for any number of reasons, including, but not limited to, the slow recovery in Maui or deteriorating macroeconomic conditions.

As discussed above, the current outlook for the lodging industry remains uncertain, reflecting varying analyst assumptions surrounding the impact of trade policy, elevated inflation and interest rates, concerns regarding U.S.

economic growth, the current travel imbalance due to the decrease in inbound travel to the United States and escalating geopolitical conflicts.

Therefore, there can be no assurances as to lodging demand performance for any number of reasons, including, but not limited to, deteriorating macroeconomic conditions.

For more information on the risks that can affect our future results, see Part I, Item 1A.

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Strategic Initiatives

For 2025, we intend to continue our disciplined approach to capital allocation to strengthen our portfolio and to deliver stockholder value through multiple levers, which may include, over time, acquiring hotels or investing in our portfolio.

For 2026, we intend to continue our disciplined approach to capital allocation to strengthen our portfolio and to deliver stockholder value through multiple levers, which may include, over time and dependent on market conditions, acquiring hotels or investing in our portfolio.

We intend to take advantage of our strong capital position and overall scale to acquire upper-upscale and luxury properties, through single asset or portfolio acquisitions, that we believe have sustainable competitive advantages to drive long-term value to the extent favorable pricing opportunities arise.

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We also continue to critically analyze our portfolio to seek to take advantage of the inherent value of our real estate for its highest and best use.

Acquisitions .

During 2024, we completed the following acquisitions:

• the 215-room 1 Hotel Nashville and 506-room Embassy Suites by Hilton Nashville Downtown for $530 million;

• the 234-room 1 Hotel Central Park for $265 million;

• the 450-room Turtle Bay Resort, including a 49-acre land parcel entitled for development, for a total purchase price of $680 million, which is net of $45 million in key money received from Marriott International as part of an agreement to transition management to Marriott and convert the property to The Ritz-Carlton brand.

The property has been renamed The Ritz-Carlton O'ahu, Turtle Bay.

Dispositions .

During 2025, we sold The Westin Cincinnati and the Washington Marriott at Metro Center in separate transactions for a total price of $237 million, including $2 million of FF&E funds retained by us, and provided a $114 million loan to the buyer of the Washington Marriott at Metro Center maturing in 2027, subject to the purchaser's right to extend until 2028 if certain conditions are satisfied.

Subsequent to year-end, we sold the Four Seasons Resort Orlando at Walt Disney World ® Resort and the Four Seasons Resort and Residences Jackson Hole for a sales price of $1.1 billion.

The proceeds will be net of $23 million for the buyer's acquisition of the FF&E reserves.

We also sold The St.

Regis Houston subsequent to year end for $51 million.

In 2025, the Asia/Pacific joint venture, in which we own a 25% interest, sold its 36% share in two separate joint ventures in India to the existing shareholders thereof, representing our exit from our Asia investment.

Our portion of the net proceeds to be received is approximately INR 1,550 million ($17 million).

Capital Projects.

We continue to pursue opportunities to enhance asset value through select capital improvements, including projects that are designed to increase the eco-efficiency of our hotels, incorporate elements of sustainable design and replace aging equipment and systems with more efficient technology.

During 2024, we spent approximately $548 million on capital expenditures, of which $260 million represented return on investment (“ROI”) capital expenditures, $252 million represented renewal and replacement projects and $36 million was for hurricane restoration work.

This included completing the final steps of our restoration efforts following Hurricane Ian of bringing the permanent central energy plant online at The Ritz-Carlton, Naples.

For all properties impacted by Hurricane Ian, we estimate the total property reconstruction and remediation costs, including significant enhancements, was approximately $315 million, of which approximately 30% related to remediation costs.

In 2024, we reached a final settlement with our insurance providers on covered costs related to damage and disruption caused by Hurricane Ian, which totaled $308 million.

In total, $99 million of the insurance receipts were recognized as a gain on business interruption.

Another major capital project completed during the year was the repositioning renovations at The Singer Oceanfront Resort, Curio Collection by Hilton, including rooms, public space, and food and beverage outlets.

In addition, hotels within certain regions are subject to environmental and weather-related events, including hurricanes, wildfires, floods, rising sea levels, mudslides, earthquakes, and other natural perils.

During 2025, we spent approximately $644 million on capital expenditures, of which $282 million represented return on investment (“ROI”) capital expenditures, $287 million represented renewal and replacement projects and $75 million was for hurricane and other restoration work.

This included our restoration efforts at The Don CeSar following Hurricanes Helene and Milton, for which we estimate the total property reconstruction and remediation costs, including resiliency enhancements, was approximately $105 million, of which approximately 30% related to remediation costs.

The Don CeSar reopened to guests on March 26, 2025, as part of a phased reopening, with the final amenities reopened during the third quarter of 2025.

As of December 31, 2025, we have received total insurance proceeds of $73 million related to our claims, of which $24 million has been recognized as business interruption proceeds.

Subsequent to year-end, we received an additional $8 million of insurance proceeds, of which $7 million related to business interruption.

Final determination on insurance claims related to The Don CeSar is expected in 2026.

In addition to the hurricane restoration at The Don CeSar, in 2025 we also completed a planned 10,000 square foot ballroom expansion at the property and, subsequent to year end, completed the expansion project at The Phoenician, A Luxury Collection Resort, to add a 20-key, eight-villa development at the Canyon Suites.

Hotels within certain regions are subject to environmental and weather-related events, including hurricanes, wildfires, floods, rising sea levels, mudslides, earthquakes, and other natural perils.

To mitigate some of these physical risks, we execute capital expenditure projects, including replacements and restorations of exterior walls, doors and windows, roofs, grounds, relocated/elevated critical equipment and distributed energy systems to further increase the resilience of our hotels.

A portion of our capital expenditures for 2025 include these types of projects, which we expect to continue in future years.

While the number of projects and overall cost varies from year to year, on average approximately 6% our capital expenditures have related to these types of projects over the past six years.

While the number of projects and overall cost varies from year to year, on average approximately 8% of our capital expenditures have related to these types of projects over the past six years.

The enhanced resilience projects implemented during the reconstruction of The Ritz-Carlton, Naples were successful in minimizing damage to the resort during the two hurricanes that made landfall in 2024;

however, no assurances can be made as to whether these enhanced resiliency projects will be successful in mitigating the damage from future environmental and weather-related events, especially as the frequency and severity of these events are expected to increase over time.

In collaboration with Hyatt, we initiated a transformational capital program in 2023 at six properties in our portfolio, the Grand Hyatt Atlanta in Buckhead, Grand Hyatt Washington, Manchester Grand Hyatt San Diego, Hyatt Regency Austin, Hyatt Regency Washington on Capitol Hill, and Hyatt Regency Reston.

In collaboration with Hyatt, we initiated a transformational capital program in 2023 at six properties in our portfolio.

These investments are intended to position the targeted hotels to compete better in their respective markets while seeking to enhance long-term performance.

During 2024, we spent approximately $155 million on this program, which is included in ROI capital projects.

The total investment is expected to be approximately $550 million to $600 million, two-thirds of which we were planning to invest as part of our capital plan over the next few years.

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Hyatt has agreed to provide additional priority returns on the agreed upon investments and operating profit guarantees totaling $40 million to offset expected business disruptions.

We received approximately $9 million of the operating profit guarantees in 2024 from Hyatt and expect to receive approximately $27 million in 2025.

For 2025, we expect total capital expenditures of $580 million to $670 million, consisting of ROI projects of approximately $270 million to $315 million, renewal and replacement expenditures of $240 million to $275 million, and $70 million to $80 million for the restoration work from the damage caused by Hurricanes Helene and Milton.

The ROI projects include approximately $170 million to $180 million for the Hyatt transformational capital program.

Also in 2023, we announced and broke ground on a project to develop and sell 40 fee-simple condominiums on a five-acre development parcel to be Four Seasons-branded and managed residences at the Four Seasons Resort Orlando at Walt Disney World ® Resort.

Construction of the mid-rise building is expected to be completed in the fourth quarter of 2025 and the villas are expected to complete in the first half of 2026.

In 2024, we spent $64 million in development costs for this project and began marketing the units, resulting in buyer commitments for nearly one-third of the units.

For 2025, the development costs for this project are expected to be $75 million to $85 million.

Of the six properties included in the program, we completed the projects at Grand Hyatt Atlanta in Buckhead,

Hyatt Regency Austin and Hyatt Regency Washington on Capitol Hill in 2025.

Approximately 78% of the total estimated costs of the program have been spent as of December 31, 2025 and, in 2026, we expect to substantially complete the remaining three properties, Grand Hyatt Washington, Manchester Grand Hyatt San Diego and Hyatt Regency Reston.

In 2025, we also reached an agreement with Marriott International to complete a second transformational capital program at four properties over a four-year period, including The Westin Kierland Resort & Spa, New Orleans Marriott, The Ritz-Carlton Naples, Tiburón and The Ritz-Carlton, Marina del Rey.

These portfolio investments are designed to better position the assets to compete in their respective markets and enhance long-term performance.

We expect to spend between $300 million and $350 million through 2029.

In exchange, Marriott has provided enhanced owner priority returns on the agreed upon investments and operating profit guarantees of approximately $18 million, which is net of reductions for incentive management fees, to offset expected business disruption.

During 2025, we spent approximately $191 million on these two programs, which is included in ROI capital projects.

We received approximately $26 million of operating profit guarantees in 2025 from the Hyatt and Marriott programs and expect to receive approximately $19 million in 2026.

For 2026, we expect total capital expenditures of $525 million to $625 million, consisting of ROI projects of approximately $250 million to $300 million, renewal and replacement expenditures of $275 million to $325 million.

The ROI projects include approximately $175 million to $210 million for the Hyatt and Marriott transformational capital programs.

We also plan to commence a comprehensive renovation at The Westin South Coast Plaza consisting of rooms, meeting space and lobby updates.

Construction continued on the development of 40 fee-simple condominiums on a five-acre development parcel to be Four Seasons-branded and managed residences adjacent to the Four Seasons Resort Orlando at Walt Disney World ® Resort.

Construction of the mid-rise building was completed in 2025, with condominium closings commencing in the fourth quarter, and the villas are expected to be completed in the first half of 2026.

In 2025, we spent $88 million in development costs for this project and expect development costs of approximately $15 million in 2026 to complete the project.

In 2025, we recognized $99 million of revenues from the sale of 16 condominium units.

Financing transactions .

On April 1, 2024, we repaid $400 million of 3⅞% Series G senior notes at maturity.

On May 10, 2024, we issued $600 million of 5.700% Series K senior notes for proceeds of $584 million, net of original issue discount, underwriting fees and expenses.

The net proceeds from this issuance were used to repay all

outstanding amounts then outstanding under the revolver portion of our credit facility.

The Series K senior notes have been designated as green bonds, and an amount equal to the net proceeds was allocated to finance and/or refinance one or more eligible green projects.

On August 12, 2024, we issued $700 million of 5.500% Series L senior notes for proceeds of $683 million, net of

original issue discount, underwriting fees and expenses.

The net proceeds from this issuance were used in part to repay all $525 million of borrowings then outstanding under the revolver portion of our credit facility, including amounts borrowed in connection with the acquisitions of The Ritz-Carlton O'ahu, Turtle Bay and 1 Hotel Central Park.

On May 20, 2025, we issued $500 million of 5.7% Series M senior notes for proceeds of approximately $490 million, net of de minimis original issue discount, underwriting fees and other expenses.

The net proceeds were used to redeem all $500 million of Series E senior notes due in June 2025.

On November 26, 2025, we issued $400 million of 4.25% Series N senior notes for proceeds of approximately $395 million, net of de minimis original issue discount, underwriting fees and other expenses.

The net proceeds were used to redeem all $400 million of Series F senior notes due in February 2026.

We believe that our ability to maintain an investment grade balance sheet and well-laddered maturity schedule is an important factor in our investment strategy.

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There can be no assurances that any future dividends will match or exceed those set forth above for any number of reasons, including a decline in operations or an increase in liquidity needs.

We believe that we have sufficient liquidity and access to the capital markets in order to fund our capital expenditures programs and to take advantage of investment opportunities.

We believe that we have sufficient liquidity and

access to the capital markets in order to fund our capital expenditures programs and to take advantage of investment opportunities.

Results of Operations

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5,079 4,796 5.9 %

Cost of goods sold ⁽²⁾

Corporate and other expenses 124 123 0.8 %

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Interest expense 235 215 9.3 %

Other gains — 71 (100.0)

Other gains 148 — N/M

Provision for income taxes 42 14 200.0 %

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775 706 9.8 %

(1) Amounts represent total operating costs and expenses from our audited consolidated statements of operations, less corporate and other expenses and net gain on insurance settlements.

Statement of Operations Results and Trends

Operations improved in 2024 compared to 2023, reflecting (i) the operations of our recent acquisitions, including 1 Hotel Nashville and Embassy Suites by Hilton Nashville Downtown acquired in April 2024, 1 Hotel Central Park acquired in July 2024, and The Ritz-Carlton O'ahu, Turtle Bay acquired in July 2024 (collectively, the "2024 Acquisitions");

(ii) strong group business which led to improvements in food and beverage revenues, and (iii) the resumption of operations at The Ritz-Carlton, Naples, which was closed during the first half of 2023 as a result of Hurricane Ian.

The improvements were partially offset by a slow recovery in Maui and the closures of Alila Ventana Big Sur, which closed at the end of March 2024 and reopened on May 22, 2024, following the collapse of a portion of Highway 1 in California, and The Don CeSar, which closed on September 25, 2024 and remains closed due to Hurricanes Helene and Milton.

(1) Amounts represent total operating costs and expenses from our audited consolidated statements of operations, less cost of goods sold, corporate and other expenses and net gain on insurance settlements.

(2) Amounts represent the costs related to the development and sale of condominium units adjacent to the Four Seasons Resort Orlando at Walt Disney World ® Resort.

N/M = Not meaningful.

Statements of Operations Results and Trends

Operations improved in 2025 compared to 2024, reflecting (i) an increase in room rates driven by strong transient demand and continued strength in out-of-room spend;

(ii) the continuing recovery on Maui;

(iii) a full year of operations for our 2024 acquisitions, including 1 Hotel Nashville and Embassy Suites by Hilton Nashville Downtown acquired in April 2024, 1 Hotel Central Park acquired in July 2024, and The Ritz-Carlton O'ahu, Turtle Bay acquired in July 2024 (collectively, the "2024 Acquisitions");

and (iv) $17 million of net income recognized during 2025 from the sale of 16 condominium units in the development adjacent to the Four Seasons Resort Orlando at Walt Disney® Resort.

These improvements more than offset the negative impact on operations resulting from our 2025 dispositions of The Westin Cincinnati and Washington Marriott Metro Center (collectively, the "2025 Dispositions") and the closure of The Don CeSar from September 2024 to March 2025 due to Hurricanes Helene and Milton.

The following table presents revenues in accordance with GAAP and includes all consolidated hotels for the two years ended December 31, 2025 (in millions, except percentages):

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Other 604 542 11.4 %

Condominium sales 99 — 100.0 %

Total revenues $ 6,114 $ 5,684 7.6 %

Total rooms revenues increased $182 million, or 5.6%, in 2024, reflecting the operations of the 2024 Acquisitions and the reopening of The Ritz-Carlton, Naples.

Rooms revenues at our comparable hotels increased $40 million, or 1.2%, driven by an increase in average room rates compared to 2023.

Total rooms revenues increased $182 million, or 5.3%, in 2025, reflecting a full year of operations for the 2024 Acquisitions and an increase in rooms revenue at our comparable hotels of $120 million, or 3.5%, primarily due to an increase in average room rate of 4.4% driven by transient demand.

Food and beverage .

Total food and beverage ("F&B") revenues increased $134 million, or 8.5%, in 2024, due to the 2024 Acquisitions and the reopening of The Ritz-Carlton, Naples.

Comparable F&B revenues increased $57 million, or 3.6%, driven by improvements in banquet and audio-visual revenues at resort and convention hotels as group demand remained strong throughout the year.

Total food and beverage ("F&B") revenues increased $87 million, or 5.1%, in 2025, due to a full year of operations for the 2024 Acquisitions and an increase in F&B revenues at our comparable hotels of $59 million, or 3.5%, driven by strong outlet revenues from our resorts, specifically our Maui resorts as the recovery continues, as well as the completion of ROI projects at several restaurant locations in other markets.

Other revenues .

Total other revenues increased $57 million, or 11.8%, in 2024, driven by results from the 2024 Acquisitions and the reopening of The Ritz-Carlton, Naples.

Other revenues at our comparable hotels increased $31 million, or 6.2%, primarily due to strong spa and other ancillary revenues.

Total other revenues increased $62 million, or 11.4%, in 2025, driven by a full year of results from the 2024 Acquisitions and an increase in other revenues at our comparable hotels of $40 million, or 7.3%, primarily due to an increase in spa, golf and other ancillary revenues, boosted by the continued recovery on Maui.

Condominium sales.

During 2025, $99 million of revenues were recognized from the sale of 16 condominium units in the development adjacent to the Four Seasons Resort Orlando at Walt Disney® Resort.

Property-level Operating Expenses

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However, the most significant expense for the rooms, food and beverage, and other departmental and support expenses is wages and employee benefits, which comprise approximately 58% of these expenses in any given year.

During 2024, these expenses increased approximately 5% compared to 2023, primarily due to an overall increase in general wage rates and benefits.

During 2025, these expenses increased approximately 5% on a per available room basis compared to 2024, primarily due to an overall increase in general wage rates and benefits.

Wage and benefit rate inflation is expected to be approximately 5% in 2026.

Other property-level expenses consist of property taxes, the amounts and structure of which are highly dependent on local jurisdiction taxing authorities, and property and general liability insurance, all of which do not necessarily increase or decrease based on similar changes in revenues at our hotels.

The increases in expenses for rooms, food and beverage, other departmental and support, and management fees were generally due to the corresponding increases in revenues due to the 2024 Acquisitions, the reopening of The Ritz-Carlton, Naples, and also reflected increased expenses at our comparable hotels primarily due to increased wages and benefits, as follows:

The increases in expenses for rooms, food and beverage, other departmental and support, and management fees were generally due to the corresponding increases in revenues due to a full year of operations from the 2024 Acquisitions, and also reflected increased expenses at our comparable hotels primarily due to increased wages and benefits, as follows:

Rooms expenses increased $57 million, or 6.7%, in 2025.

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For our comparable hotels, F&B expenses increased $60 million, or 5.3%, in 2025.

Overall, F&B costs as a percentage of revenues remained consistent year over year.

Overall, F&B costs as a percentage of revenues increased year over year, reflecting higher wages and a shift to more outlet sales, which generally have a higher cost as a percentage of revenue as compared to banquet sales.

Wages and benefits represented approximately 69% of our 2025 and 2024 F&B expenses.

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Total management fees increased $8 million, or 3.1%, in 2025.

Base management fees, which generally are calculated as a percentage of total revenues, increased $10 million, or 6.7%, compared to 2023.

Base management fees, which generally are calculated as a percentage of total hotel revenues, increased $6 million, or 3.8%, compared to 2024.

At our comparable hotels, base management fees increased $4 million, or 2.5%, for 2025.

Incentive management fees, which generally are based on the amount of operating profit at each hotel after we receive a priority return on our investment, decreased $5 million, primarily due to the closure of The Don CeSar, and the decrease at our comparable hotels of $3 million, or 2.8%, which was due to renovations at certain properties.

Incentive management fees, which generally are based on the amount of operating profit at each hotel after we receive a priority return on our investment, increased $2 million, primarily due to the increase in incentive management fees at our comparable hotels of $2 million, or 2.4%, which was due to the improved operations at our properties.

Other property-level expenses .

These expenses generally do not vary significantly based on occupancy and include expenses such as property taxes and insurance.

Other property-level expenses increased $28 million, or 7.3%, in 2024, due to increases in property insurance premiums and property taxes.

Other property-level expenses increased $15 million, or 3.6%, in 2025, primarily due to increases in property taxes and insurance due to the 2024 Acquisitions.

Other property-level expenses at our comparable hotels increased $6 million, or 1.6%, in 2025.

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Other Income and Expenses

Cost of goods sold.

Cost of goods sold totaled $80 million for the year ended December 31, 2025, which related to the sale of 16 condominium units adjacent to the Four Seasons Resort Orlando at Walt Disney® Resort.

Cost of goods sold for these condominiums consists primarily of capitalized construction and development costs, which are recognized upon the sale of individual units.

Corporate and other expenses .

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General and administrative costs primarily consist of wages and benefits, travel, corporate insurance, legal fees, audit fees, building rent and systems costs.

The overall decrease in corporate and other expenses for the year ended December 31, 2024 is primarily due to a decrease in litigation accruals, partially offset by an increase in systems costs and other administrative fees.

Corporate and other expenses increased for the year ended December 31, 2025, due primarily to an increase in compensation expense, partially offset by a decrease in litigation accruals.

Net gain on insurance settlements.

The following table details our gain on insurance settlements for property damage and business interruption, net of property damage and remediation losses, related to Hurricanes Ian, Helene and Milton, the Maui wildfires and other weather events (in millions):

the only insurance claims currently outstanding related to these matters is from Hurricanes Helene and Milton (in millions):

Year ended December 31,

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Business interruption

Hurricanes Helene/Milton 24 —

Hurricane Ian — 19

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Interest expense.

Interest expense increased $24 million, or 12.6%, in 2024 as compared to 2023, primarily due to higher outstanding debt balances during 2024 as we issued additional senior notes to fund our 2024 Acquisitions.

Interest expense increased $20 million, or 9.3%, in 2025 as compared to 2024, primarily due to higher outstanding debt balances during 2025, as we issued $1.3 billion of senior note debt in 2024 to partially fund our 2024 Acquisitions and refinance $400 million of senior notes.

We also refinanced $900 million of senior note debt in 2025 at slightly higher interest rates, on average.

The following table presents certain components of interest expense (in millions):

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Non-cash interest expense 11 10

Cash debt extinguishment costs ⁽¹⁾

Non-cash debt extinguishment costs — 1

Total interest expense $ 235 $ 215

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Year ended December 31,

The Camby, Autograph Collection $ — $ 69

Washington Marriott at Metro Center 122 —

The Westin Cincinnati 21 —

Equity in earnings of affiliates .

Equity in earnings of affiliates increased $1 million, or 16.7%, in 2024, reflecting increased earnings from our investment in the Noble joint venture, partially offset by a $6 million loss for our share of an inventory impairment expense recorded by our Maui timeshare joint venture.

Equity in earnings of affiliates increased $11 million, or 157.1%, in 2025, reflecting increased earnings from our investment in Noble Fund V, and realized and unrealized gains on investments with Fifth Wall Ventures and Thayer Ventures.

Provision for income taxes.

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by the TRS, on which we record an income tax provision or benefit.

In 2024 and 2023, we recorded an income tax provision of $14 million and $36 million, respectively, due primarily to the profitability of hotel operations retained by the TRS, including $40 million and $83 million of business interruption insurance gains recorded in 2024 and 2023, respectively.

The 2024 tax provision was partially offset by the recognition of an income tax benefit due to federal income tax credits resulting from the installation of a co-generation plant at one of our properties.

As a result of legislation enacted by the CARES Act in 2020, a portion of the 2020 domestic net operating loss was carried back to 2017-2019 in order to procure a refund of U.S.

In 2025 and 2024, we recorded an income tax provision of $42 million and $14 million, respectively, primarily due to the profitability of hotel operations retained by the TRS, including $24 million and $40 million of business interruption insurance gains recorded in 2025 and 2024, respectively.

The 2024 tax provision was partially offset by the recognition of a $7 million income tax benefit due to federal income tax credits resulting from the installation of a co-generation plant at one of our properties.

As a result of legislation enacted by the CARES Act in 2020, a portion of the 2020 domestic net

operating loss was carried back to 2017-2019 in order to procure a refund of U.S.

federal corporate income taxes previously paid.

The remaining portion of the 2020 net operating loss, as well as the entire 2021 net operating loss incurred by our TRS, may be carried forward indefinitely, subject to an annual limit on the use thereof equal to 80% of annual taxable income.

The remaining portion of the 2020 net operating loss, as well as the entire 2021 net operating loss incurred by our TRS, may be carried forward indefinitely to reduce our income taxes paid, subject to an annual limit on the use thereof equal to 80% of annual taxable income.

What changed 10-K

Item 7. Management’s Discussion and Analysis