What changed in this filing

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Item 1. Financial Statements

2025-08-01 compared with 2025-05-05 · 104 added, 62 removed, 363 unchanged (31% of the section changed)

3 unchanged sentences

(in millions, except share and per share data)

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

Property and equipment, net $ 7,176 $ 7,398

21 unchanged sentences

Stockholders’ Equity

Common stock, par value $ 0.01 per share, 6,000,000,000 shares authorized, 200,815,720 shares issued and 199,782,608 shares outstanding as of March 31, 2025 and 203,407,320 shares issued and 202,553,194 shares outstanding as of December 31, 2024

Common stock, par value $ 0.01 per share, 6,000,000,000 shares authorized, 200,946,918 shares issued and 199,913,166 shares outstanding as of June 30, 2025 and 203,407,320 shares issued and 202,553,194 shares outstanding as of December 31, 2024

Additional paid-in capital 4,022 4,063

10 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2025 2024 2025 2024

Rooms $ 401 $ 416 $ 764 $ 790

1 unchanged sentence

Ancillary hotel 68 66 131 128

Other 23 22 45 43

Total revenues 672 686 1,302 1,325

8 unchanged sentences

Corporate general and administrative 19 18 37 35

Other 23 20 44 41

Total expenses 624 580 1,263 1,141

Gain on sale of assets, net 1 — 1 —

Gain on derecognition of assets 16 15 32 29

3 unchanged sentences

Interest expense associated with hotels in receivership ( 16 ) ( 15 ) ( 32 ) ( 29 )

Other gain, net 2 —

Equity in earnings from investments in affiliates 2 1 2 1

Other (loss) gain, net ( 1 ) ( 3 ) 1 ( 3 )

(Loss) income before income taxes ( 1 ) 55 ( 57 ) 85

Income tax expense ( 1 ) ( 1 )

Income tax (expense) benefit ( 1 ) 12 ( 2 ) 11

Net (loss) income ( 2 ) 67 ( 59 ) 96

11 unchanged sentences

(unaudited, in millions)

Three Months Ended

Six Months Ended

Operating Activities:

2 unchanged sentences

Depreciation and amortization 191 129

Gain on sales of assets, net ( 1 ) —

Gain on derecognition of assets ( 32 ) ( 29 )

Impairment loss 70 12

Equity in earnings from investments in affiliates ( 2 ) ( 1 )

Other loss, net 1 3

Share-based compensation expense 9 9

Amortization of deferred financing costs 4 4

Distributions from unconsolidated affiliates 1 —

Deferred income taxes — ( 13 )

Changes in operating assets and liabilities 12 ( 1 )

2 unchanged sentences

Capital expenditures for property and equipment ( 120 ) ( 121 )

Proceeds from asset dispositions, net 75 —

Net cash used in investing activities ( 45 ) ( 121 )

Financing Activities:

Proceeds from issuance of Senior Notes — 550

Repurchase or redemption of Senior Notes — ( 650 )

Borrowings from credit facilities — 200

Repayments of mortgage debt ( 4 ) ( 4 )

Debt issuance costs — ( 11 )

Dividends paid ( 181 ) ( 407 )

27 unchanged sentences

Balance as of March 31, 2025 200 2 4,017 ( 525 ) ( 58 ) 3,436

Share-based compensation, net — — 5 — — 5

Net (loss) income — — — ( 5 ) 3 ( 2 )

Dividends and dividend equivalents (1)

— — — ( 50 ) — ( 50 )

Distributions to noncontrolling interests — — — — ( 1 ) ( 1 )

Balance as of June 30, 2025 200 $ 2 $ 4,022 $ ( 580 ) $ ( 56 ) $ 3,388

Common Stock Additional

9 unchanged sentences

Balance as of March 31, 2024 211 2 4,154 ( 367 ) ( 47 ) 3,742

Share-based compensation, net — — 4 — — 4

Net income — — — 64 3 67

Dividends and dividend equivalents (1)

— — — ( 52 ) — ( 52 )

(1) Dividends declared per common share were $ 0.25 for both the three months ended March 31, 2025 and 2024.

Repurchase of common stock ( 2 ) — ( 25 ) — — ( 25 )

Balance as of June 30, 2024 209 $ 2 $ 4,133 $ ( 355 ) $ ( 44 ) $ 3,736

___________________________________

(1) Dividends declared per common share were $ 0.25 for each of the three months ended March 31, 2025, June 30, 2025, March 31, 2024 and June 30, 2024.

Refer to the notes to the unaudited condensed consolidated financial statements.

37 unchanged sentences

2023-09 (“ASU 2023-09”), Income Taxes (Topic 740) - Improvements to Income Tax Disclosures, which enhances income tax disclosures, including disclosures about the existing rate reconciliation and income taxes paid information.

We expect to adopt ASU 2023-09 when the requirements become effective for the year-ended December 31, 2025.

ASU 2023-09 is required to be adopted on a prospective basis, but retrospective adoption is permitted.

We expect to adopt ASU 2023-09 on a prospective basis when the requirements become effective for the year-ended December 31, 2025.

We are currently evaluating the effect that ASU 2023-09 will have on our consolidated financial statements.

3 unchanged sentences

We are currently evaluating the effect that ASU 2024-03 will have on our consolidated financial statements.

In May 2025, we sold the Hyatt Centric Fisherman’s Wharf for gross proceeds of $ 80 million.

We recognized a net gain of approximately $ 1 million, which is included in gain on sale of assets, net in our condensed consolidated statements of operations.

In addition, we previously recognized an impairment loss for the Hyatt Centric Fisherman’s Wharf, refer to Note 7:

“Fair Value Measurements” for additional information.

Property and Equipment

Property and equipment were:

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

(in millions)

6 unchanged sentences

$ 7,176 $ 7,398

Depreciation of property and equipment was $ 69 million and $ 65 million during the three months ended March 31, 2025 and 2024.

During the three months ended March 31, 2025, we recognized an impairment loss of approximately $ 70 million related to one of our hotels and our inability to recover the carrying value of the asset.

During the three months ended March 31, 2024, we recognized an impairment loss of approximately $ 5 million related to one of our hotels subject to a ground lease and our inability to recover the carrying value of the asset over the remaining lease term.

Refer to Note 6:

“Fair Value Measurements” for additional information.

Depreciation of property and equipment was $ 122 million and $ 63 million during the three months ended June 30, 2025 and 2024, respectively, and $ 191 million and $ 128 million for the six months ended June 30, 2025 and 2024, respectively.

Depreciation expense for the three and six months ended June 30, 2025, compared to the same periods in 2024 includes accelerated depreciation recognized in connection with the full-scale renovation at the Royal Palm South Beach Miami, a Tribute Portfolio Resort, which began in May 2025.

Consolidated Variable Interest Entities (“VIEs”) and Investments in Affiliates

7 unchanged sentences

Our condensed consolidated balance sheets include the following assets and liabilities of these entities:

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

(in millions)

9 unchanged sentences

Three of our hotels are owned by unconsolidated joint ventures in which we hold an interest.

These hotels are accounted for using the equity method and had total debt of approximately $ 684 million and $ 685 million as of March 31, 2025 and December 31, 2024, respectively.

These hotels are accounted for using the equity method and had total debt of approximately $ 684 million and $ 685 million as of June 30, 2025 and December 31, 2024, respectively.

Substantially all the debt is secured solely by the affiliates’ assets or is guaranteed by other partners without recourse to us.

Debt balances and associated interest rates as of March 31, 2025 were:

Debt balances and associated interest rates as of June 30, 2025 were:

Principal balance as of

Interest Rate

at March 31, 2025 Maturity Date March 31, 2025 December 31, 2024

at June 30, 2025 Maturity Date June 30, 2025 December 31, 2024

(in millions)

22 unchanged sentences

(2) Assumes the exercise of all extensions that are exercisable solely at our option.

The mortgage loan for Hilton Denver City Center matures in 2042 but became callable by the lender in August 2022 with six months of notice.

As of March 31, 2025, we did not receive notice from the lender.

The mortgage loan for Hilton Denver City Center matures in 2042 but is callable by the lender with six months notice.

As of June 30, 2025, we did not receive notice from the lender.

(3) Our revolving credit facility (“Revolver”) permits one or more standby letters of credit, up to a maximum aggregate outstanding balance of $ 50 million, to be issued on behalf of us.

As of March 31, 2025, we had $ 950 million of available capacity under our Revolver and no outstanding letters of credit.

Table of Content s

As of June 30, 2025, we had $ 950 million of available capacity under our Revolver and no outstanding letters of credit.

(4) The secured overnight financing rate (“SOFR”) includes a credit spread adjustment of 0.1 %.

As of March 31, 2025, our all-in interest rate for borrowing under the 2024 Term Loan was 6.37 %.

As of June 30, 2025, our all-in interest rate for borrowing under the 2024 Term Loan was 6.37 %.

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(5) In May 2024, the Company, our Operating Company, and PK Domestic Property LLC, an indirect subsidiary of the Company (“PK Domestic”), amended our existing credit agreement to include a new $ 200 million senior unsecured term loan (“2024 Term Loan”).

2 unchanged sentences

Debt Maturities

The contractual maturities of our debt, excluding the $ 725 million non-recourse CMBS loan (“SF Mortgage Loan”) secured by two of our San Francisco hotels – the 1,921-room Hilton San Francisco Union Square and the 1,024-room Parc 55 San Francisco – a Hilton Hotel (collectively, the “Hilton San Francisco Hotels”) and assuming the exercise of all extensions that are exercisable solely at our option, as of March 31, 2025 were:

Year (in millions)

9 unchanged sentences

The receiver also had the ability to sell the hotels until March 31, 2025;

however, prior to the deadline, the receiver requested an extension to May 30, 2025 in order to sell the hotels to a specified buyer.

The court granted the extension with an additional one-time extension option not to exceed 60 days.

If the hotels are not sold to the specified buyer by the amended predetermined period, the court order contemplates that the receivership will end with a non-judicial foreclosure as soon as permissible under California law.

however, the deadline was extended and in July 2025, a purchase and sale agreement to consummate the sale of the hotels has been executed with a closing expected by October 29, 2025.

If the hotels are not sold to the buyer by October 29, 2025, the receivership will end with a non-judicial foreclosure as soon as permissible under California law.

We derecognized the Hilton San Francisco Hotels from our consolidated balance sheet in October 2023 when the receiver took control of the hotels.

For the three months ended March 31, 2025 and 2024, we recognized a gain of $ 16 million and $ 14 million, respectively, which is included in gain on derecognition of assets in our condensed consolidated statements of operations.

During the three and six months ended June 30, 2025, we recognized a gain of $ 16 million and $ 32 million, respectively, and during the three and six months ended June 30, 2024, we recognized a gain of $ 15 million and $ 29 million, respectively, which are included in gain on derecognition of assets in our condensed consolidated statements of operations.

The gain represents the accrued interest expense associated with the default of the SF Mortgage Loan, which results in a corresponding increase of the contract asset on our condensed consolidated balance sheets as we expect to be released from this obligation upon final resolution with the lender on the SF Mortgage Loan, in exchange for the transfer of ownership of the Hilton San Francisco Hotels.

As of March 31, 2025 and December 31, 2024, the contract asset on our condensed consolidated balance sheets was $ 836 million and $ 820 million, respectively.

As of June 30, 2025 and December 31, 2024, the contract asset on our condensed consolidated balance sheets was $ 852 million and $ 820 million, respectively.

The SF Mortgage Loan will remain a liability until final resolution with the lender is concluded, and thus, is included in debt associated with hotels in receivership on our condensed consolidated balance sheets.

4 unchanged sentences

The fair value of our debt and the hierarchy level we used to estimate fair values are shown below:

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

Level Carrying

8 unchanged sentences

2030 Senior Notes 1 550 567 550 559

The fair value of the SF Mortgage Loan, which has a carrying value of $ 725 million as of both March 31, 2025 and December 31, 2024 and is categorized as Level 3 of the fair value hierarchy, was $ 718 million as of both March 31, 2025 and December 31, 2024.

The fair value of the SF Mortgage Loan, which has a carrying value of $ 725 million as of both June 30, 2025 and December 31, 2024 and is categorized as Level 3 of the fair value hierarchy, was $ 718 million as of both June 30, 2025 and December 31, 2024.

Refer to Note 6:

“Debt” for additional information.

During the three months ended March 31, 2025, we recognized an impairment loss related to one of our hotels due to our inability to recover the carrying value of the asset.

During the three months ended March 31, 2024, we recognized an impairment loss related to one of our hotels subject to a ground lease and our inability to recover the carrying value of the asset over the remaining lease term.

During the six months ended June 30, 2025, we recognized an impairment loss of approximately $ 70 million related to the Hyatt Centric Fisherman’s Wharf, which was sold in May 2025, due to a change in our intent to hold the hotel and our inability to recover the carrying value of the asset.

During the three and six months ended June 30, 2024, we recognized impairment losses of approximately $ 7 million and $ 12 million, respectively, related to two of our hotels subject to ground leases and our inability to recover the carrying value of the assets over the remaining lease term.

The estimated fair value of the assets that were measured on a nonrecurring basis were:

March 31, 2025 March 31, 2024

June 30, 2025 (1)

June 30, 2024 (2)

Fair Value Impairment Loss Fair Value Impairment Loss

1 unchanged sentence

Property and equipment $ 74 $ 70 $ 2 $ 12

$ 74 $ 70 $ — $ 5

Total $ 74 $ 70 $ 2 $ 12

____________________________________________________________________________________

(1) We estimated the fair value of the asset as of March 31, 2025 using a discounted cash flow analysis, with an estimated stabilized growth rate of 3 %, a discounted cash flow term of 10 years, terminal capitalization rate of 7.3 % and a discount rate of 10.0 % (Level 3).

The discount and terminal capitalization rates used for the fair value of the asset reflect the risk profile of the market where the property is located.

Fair value as of March 31, 2024 was determined to be zero as the hotel is subject to a ground lease and is not expected to produce positive cash flows over the remaining lease term.

(1) We estimated the fair value of the asset using a discounted cash flow analysis, with an estimated stabilized growth rate of 3 %, a discounted cash flow term of 10 years, terminal capitalization rate of 7.3 % and a discount rate of 10.0 % (Level 3).

The discount and terminal capitalization rates used for the fair values of the assets reflect the risk profiles of the markets where the properties are located.

(2) We estimated the fair value of the assets using a discounted cash flow analysis, with an estimated stabilized growth rate range of 2 % to 3 %, a discounted cash flow term of 10 years, and a discount rate ranging from 17.0 % to 20.0 % (Level 3).

The discount and terminal capitalization rates used for the fair values of the assets reflect the risk profiles of the markets where the properties are located.

We are a REIT for U.S.

federal income tax purposes.

We have been organized and operated, and we expect to continue to be organized and operate in a manner to qualify as a REIT.

To qualify as a REIT, we must satisfy requirements related to, among other things, the real estate qualification of sources of our income, the real estate composition and values of our assets, the amounts we distribute to our stockholders annually and the diversity of ownership of our stock.

To the extent we continue to remain qualified as a REIT, we generally will not be subject to U.S.

federal (and state) income tax on taxable income generated by our REIT activities that we distribute annually to our stockholders.

Accordingly, no provision for U.S.

federal income taxes has been included in our accompanying condensed consolidated financial statements for the three or six months ended June 30, 2025 and 2024 related to our REIT activities.

Our taxable REIT subsidiaries (“TRSs”) are generally subject to U.S.

federal, state and local, and foreign income taxes (as applicable).

Table of Content s

During the three and six months ended June 30, 2024, we recognized an income tax benefit of $ 12 million and $ 11 million, respectively, which was primarily associated with the effective exit from the Hilton San Francisco Hotels and the reversal of $ 14 million of tax expense that is no longer expected to be incurred.

Share-Based Compensation

We issue equity-based awards to our employees pursuant to the 2017 Omnibus Incentive Plan (the “2017 Employee Plan”) and our non-employee directors pursuant to the 2017 Stock Plan for Non-Employee Directors (the “2017 Director Plan”), both of which are amended and restated from time to time.

The 2017 Employee Plan provides that a maximum of 14,070,000 shares of our common stock may be issued, and as of March 31, 2025, 5,251,266 shares of common stock remain available for future issuance.

The 2017 Employee Plan provides that a maximum of 14,070,000 shares of our common stock may be issued, and as of June 30, 2025, 5,240,519 shares of common stock remain available for future issuance.

An amendment and restatement of the 2017 Director Plan was approved by our stockholders in April 2025 to, among other changes, increase the number of shares available to be issued by 875,000 , from 950,000 to 1,825,000 .

As of March 31, 2025, 130,143 shares of common stock remain available for future issuance, which excludes the 875,000 additional shares that were approved in April 2025.

For both the three months ended March 31, 2025 and 2024, we recognized $ 4 million of share-based compensation expense.

As of March 31, 2025, unrecognized compensation expense was $ 32 million, which is expected to be recognized over a weighted-average period of 2.0 years.

The total fair value of shares vested (calculated as the number of shares multiplied by the vesting date share price) for the three months ended March 31, 2025 and 2024 was $ 11 million and $ 12 million, respectively.

Table of Content s

As of June 30, 2025, 867,054 shares of common stock remain available for future issuance.

For both the three months ended June 30, 2025 and 2024, we recognized $ 5 million of share-based compensation expense and $ 9 million for both the six months ended June 30, 2025 and 2024.

As of June 30, 2025, unrecognized compensation expense was $ 28 million, which is expected to be recognized over a weighted-average period of 1.7 years.

The total fair value of shares vested (calculated as the number of shares multiplied by the vesting date share price) for the six months ended June 30, 2025 and 2024 was $ 12 million and $ 13 million, respectively.

Stock awards generally vest in annual installments between one and three years from each grant date.

The following table provides a summary of stock awards for the three months ended March 31, 2025:

The following table provides a summary of stock awards for the six months ended June 30, 2025:

Number of Shares Weighted-Average

3 unchanged sentences

Forfeited ( 27,633 ) 14.05

Unvested at March 31, 2025 1,247,483 $ 14.01

Unvested at June 30, 2025 1,293,333 $ 13.48

Performance Stock Units

1 unchanged sentence

The number of PSUs that may become vested ranges from zero to 200 % of the number of PSUs granted to an employee, based on the level of achievement of the foregoing performance measure.

The following table provides a summary of PSUs for the three months ended March 31, 2025:

The following table provides a summary of PSUs for the six months ended June 30, 2025:

Number of Shares Weighted-Average

3 unchanged sentences

Forfeited ( 7,196 ) 17.99

Unvested at March 31, 2025 1,884,359 $ 15.62

Unvested at June 30, 2025 1,886,128 $ 15.61

Table of Content s

The grant date fair values of the awards that are subject to the achievement of market conditions based on total shareholder return were determined using a Monte Carlo simulation valuation model with the following assumptions:

9 unchanged sentences

Department of Treasury instruments with similar expected terms of the PSUs at the grant date of each award.

Table of Content s

Earnings Per Share

The following table presents the calculation of basic and diluted earnings per share (“EPS”):

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

(in millions, except per share amounts)

Net (loss) income attributable to stockholders $ ( 57 ) $ 28

Earnings attributable to participating securities ( 1 ) —

Net (loss) income attributable to stockholders, net of earnings allocated to participating securities ( 5 ) 64 ( 62 ) 92

8 unchanged sentences

(1) Per share amounts are calculated based on unrounded numbers and are calculated independently for each period presented.

Certain of our outstanding equity awards were excluded from the above calculation of EPS for the three months ended March 31, 2025 and 2024 because their effect would have been anti-dilutive.

Certain of our outstanding equity awards were excluded from the above calculation of EPS for the three and six months ended June 30, 2025 and 2024 because their effect would have been anti-dilutive.

Table of Content s

Business Segment Information

As of March 31, 2025, we have two operating segments, our consolidated hotels and unconsolidated hotels.

As of June 30, 2025, we have two operating segments, our consolidated hotels and unconsolidated hotels.

Our unconsolidated hotels operating segment does not meet the definition of a reportable segment, thus our consolidated hotels operating segment is our only reportable segment.

9 unchanged sentences

The following table presents our reportable segment revenues reconciled to our consolidated amounts, reportable segment expenses and Hotel Adjusted EBITDA reconciled to net (loss) income:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

(in millions)

7 unchanged sentences

Other property segment expenses (1)

48 51 101 100

Total segment expenses 458 465 915 914

5 unchanged sentences

Other operating expenses ( 23 ) ( 20 ) ( 44 ) ( 41 )

Gain on sales of assets, net 1 — 1 —

Gain on derecognition of assets 16 15 32 29

2 unchanged sentences

Interest expense associated with hotels in receivership ( 16 ) ( 15 ) ( 32 ) ( 29 )

Income tax expense ( 1 ) ( 1 )

Other gain, net 2 —

Equity in earnings from investments in affiliates 2 1 2 1

Income tax (expense) benefit ( 1 ) 12 ( 2 ) 11

Other (loss) gain, net ( 1 ) ( 3 ) 1 ( 3 )

Other items ( 2 ) ( 6 ) ( 6 ) ( 9 )

3 unchanged sentences

The following table presents total assets for our consolidated hotels, reconciled to total assets:

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

(in millions)

2 unchanged sentences

Total assets $ 8,870 $ 9,161

Commitments and Contingencies

As of March 31, 2025, we had outstanding commitments under third-party contracts of approximately $ 121 million for capital expenditures at our properties, of which $ 40 million relates to guestroom renovations at the Hilton

Table of Content s

Hawaiian Village Waikiki Beach Resort, $ 30 million relates the transformative renovation at the Royal Palm South Beach Miami, a Tribute Portfolio Hotel, and $ 13 million relates to guestroom renovations at the Hilton Waikoloa Village.

Commitments and Contingencies

As of June 30, 2025, we had outstanding commitments under third-party contracts of approximately $ 161 million for capital expenditures at our properties, of which $ 45 million relates to the transformative renovation at the Royal Palm South Beach Miami, a Tribute Portfolio Resort, $ 24 million relates to guestroom renovations at the Hilton Hawaiian Village Waikiki Beach Resort, $ 20 million relates to guestroom renovations at the Hilton Waikoloa Village, and $ 15 million relates to guestroom renovations at the Hilton New Orleans Riverside.

Our contracts contain clauses that allow us to cancel all or some portion of the work.

4 unchanged sentences

In addition, losses related to certain contingent liabilities could be apportioned to us under the spin-off agreements.

In connection with our obligation to indemnify Hilton under the spin-off agreements, we have reserved approximately $ 8 million as of March 31, 2025 related to litigation with respect to an audit by the Australian Tax Office (“ATO”) of Hilton related to the sale of the Hilton Sydney in June 2015.

In connection with our obligation to indemnify Hilton under the spin-off agreements, we have reserved approximately $ 8 million as of June 30, 2025 related to litigation with respect to an audit by the Australian Tax Office (“ATO”) of Hilton related to the sale of the Hilton Sydney in June 2015.

This amount could change as the litigation of the ATO’s claim progresses.

1 unchanged sentence

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