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Item 2. Management’s Discussion and Analysis

2025-11-03 compared with 2025-08-01 · 81 added, 73 removed, 287 unchanged (35% of the section changed)

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This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (“Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (“Exchange Act”).

Forward-looking statements include, but are not limited to, statements related to the effects of our decision to cease payments on 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 the lender’s exercise of its remedies, including placing such hotels into receivership, as well as our current expectations regarding the performance of our business, our financial results, our liquidity and capital resources, including anticipated repayment of certain of our indebtedness, the completion of capital allocation priorities, the expected repurchase of our stock, the impact from macroeconomic factors (including elevated inflation and interest rates, potential economic slowdown or a recession and geopolitical conflicts or trends, including travel barriers or changes in travel preferences for U.S.

destinations), the effects of competition, the effects of future legislation, executive action or regulations, tariffs, the expected completion of anticipated dispositions, the declaration, payment and any change in amounts of future dividends and other non-historical statements.

Forward-looking statements include, but are not limited to, statements related to the effects of our decision to cease payments on 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 our expectation that the hotels will be sold by the court-appointed receiver by November 21, 2025, with the buyer assuming the SF Mortgage Loan at that time, as well as our current expectations regarding the performance of our business, our financial results, our liquidity and capital resources, including the use of proceeds from our new $800 million senior unsecured delayed draw term loan facility (“2025 Delayed Draw Term Loan”) and the anticipated repayment of certain of our indebtedness, the completion of capital allocation priorities, the expected repurchase of our stock, the impact from macroeconomic factors (including elevated inflation and interest rates, potential economic slowdown or a recession and geopolitical conflicts or trends, including trade policy, travel barriers or changes in travel preferences for U.S.

destinations, including as a result of the government shutdown), the effects of competition, the effects of future legislation, executive action or regulations, tariffs, the expected completion of anticipated dispositions, the declaration, payment and any change in amounts of future dividends and other non-historical statements.

Forward-looking statements include all statements that are not historical facts, and in some cases, can be identified by the use of forward-looking terminology such as the words “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “could,” “seeks,” “projects,” “predicts,” “intends,” “plans,” “estimates,” “anticipates”, “hopes” or the negative version of these words or other comparable words.

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We have a diverse portfolio of iconic and market-leading hotels and resorts with significant underlying real estate value.

We currently have interests in 39 hotels, consisting of premium-branded hotels and resorts with approximately 25,000 rooms, of which over 87% are luxury and upper upscale (as defined by Smith Travel Research) and are located in prime U.S.

We currently have interests in 38 hotels, consisting of premium-branded hotels and resorts with over 24,000 rooms, of which over 87% are luxury and upper upscale (as defined by Smith Travel Research) and are located in prime U.S.

markets and its territories.

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As a pure-play real estate company with direct access to capital and independent financial resources, we believe our enhanced ability to implement compelling return on investment initiatives within our portfolio represents a significant embedded growth opportunity.

Finally, given our scale and investment expertise, we believe we will be able to successfully execute single-asset and portfolio acquisitions and dispositions to further enhance the value and diversification of our assets throughout the lodging cycle, including potentially taking advantage of the economies of scale that could come from consolidation in the lodging REIT industry.

Finally, given our scale and investment expertise, we believe we will be able to successfully execute single-asset and portfolio acquisitions and

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dispositions to further enhance the value and diversification of our assets throughout the lodging cycle, including potentially taking advantage of the economies of scale that could come from consolidation in the lodging REIT industry.

We operate our business through two operating segments, our consolidated hotels and unconsolidated hotels.

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Refer to Note 11:

“Business Segment Information”

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in our unaudited condensed consolidated financial statements included elsewhere within this Quarterly Report on Form 10-Q for additional information regarding our operating segments.

“Business Segment Information” in our unaudited condensed consolidated financial statements included elsewhere within this Quarterly Report on Form 10-Q for additional information regarding our operating segments.

Economic disruptions, including as a result of elevated interest and inflation rates, may adversely affect our business by affecting consumer sentiment and demand for travel.

Heightened uncertainty due to ongoing changes to trade policy, tax policy and disruptions to government spending has resulted in inflationary concerns and changes in demand and travel preferences, which may affect the lodging industry.

During the second quarter of 2025, we have relied on the performance of our hotels and active asset management to mitigate the effects of current macroeconomic uncertainty.

While there can be no assurances that we will not experience further fluctuations in hotel revenues or earnings at our hotels due to inflation and other macroeconomic factors, local economic factors and demand, a potential economic slowdown or a recession and geopolitical conflicts, we are cautiously optimistic for 2025 based on expected improvements in demand trends and continued benefits from transformative renovations at certain of our hotels.

During the third quarter of 2025, we have relied on the performance of our hotels and active asset management to mitigate the effects of current macroeconomic uncertainty.

While there can be no assurances that we will not experience further fluctuations in hotel revenues or earnings at our hotels due to inflation and other macroeconomic factors, local economic factors and demand, a potential economic slowdown or a recession, geopolitical conflicts or further continuation of the government shutdown, we are cautiously optimistic for the remainder of 2025 based on expected improvements in group demand and continued benefits from transformative renovations at certain of our hotels.

Key Business Metrics Used by Management

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Average Daily Rate

ADR represents rooms revenue divided by total number of room nights sold in a given period.

Average daily rate (“ADR”) represents rooms revenue divided by total number of room nights sold in a given period.

ADR measures average room price attained by a hotel and ADR trends provide useful information concerning the pricing environment and the nature of the customer base of a hotel or group of hotels.

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We present comparable hotel results to help us and our investors evaluate the ongoing performance of our comparable hotels.

Our comparable hotels data includes results from hotels that were active and operating in our portfolio since January 1st of the previous year and excludes results from property dispositions that have occurred through June 30, 2025 and the Hilton San Francisco Hotels, which were placed into receivership at the end of October 2023.

Our comparable hotels data includes results from hotels that were active and operating in our portfolio since January 1st of the previous year and excludes results from property dispositions that have occurred through September 30, 2025 and the Hilton San Francisco Hotels, which were placed into receivership at the end of October 2023.

Non-GAAP Financial Measures

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Each of these non-GAAP financial measures should be considered by investors as supplemental measures to GAAP performance measures such as total revenues, operating profit and net (loss) income.

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EBITDA, Adjusted EBITDA and Hotel Adjusted EBITDA

EBITDA, presented herein, reflects net (loss) income excluding depreciation and amortization, interest income, interest expense, income taxes and also interest income and expense, income tax and depreciation and amortization included in equity in earnings from investments in affiliates.

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Adjusted EBITDA, presented herein, is calculated as EBITDA, further adjusted to exclude the following items that are not reflective of our ongoing operating performance or incurred in the normal course of business, and thus, excluded from management’s analysis in making day-to-day operating decisions and evaluations of our operating performance against other companies within our industry:

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Some of these limitations are:

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• EBITDA, Adjusted EBITDA and Hotel Adjusted EBITDA do not reflect changes in, or cash requirements for, our working capital needs;

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• EBITDA, Adjusted EBITDA and Hotel Adjusted EBITDA do not reflect the cash requirements to pay our taxes;

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• EBITDA, Adjusted EBITDA and Hotel Adjusted EBITDA do not reflect historical cash expenditures or future requirements for capital expenditures or contractual commitments;

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Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

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Gain on sales of assets, net (2)

— (19) (1) (19)

Gain on derecognition of assets (1)

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_____________________________________

(1) For the three and six months ended June 30, 2025 and 2024, represents accrued interest expense associated with the default of the SF Mortgage Loan, which is offset by a gain on derecognition for the 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.

(1) For the three and nine months ended September 30, 2025 and 2024, represents accrued interest expense associated with the default of the SF Mortgage Loan, which is offset by a gain on derecognition for the 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.

(2) For the three and nine months ended September 30, 2024, includes a gain of $19 million on the sale of the Hilton La Jolla Torrey Pines included in equity in earnings from investments in affiliates.

(3) Includes other revenues and other expenses , non-income taxes on leases with our taxable REIT subsidiaries included in other property expenses and corporate general and administrative expenses.

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Nareit FFO attributable to stockholders and Adjusted FFO attributable to stockholders

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As noted by Nareit in its December 2018 “Nareit Funds from Operations White Paper – 2018 Restatement,” since real estate values historically have risen or fallen with market conditions, many industry investors have considered presentation of operating results for real estate companies that use historical cost accounting to be insufficient by themselves.

For these reasons, Nareit adopted

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the FFO metric in order to promote an industry-wide measure of REIT operating performance.

For these reasons, Nareit adopted the FFO metric in order to promote an industry-wide measure of REIT operating performance.

We believe Nareit FFO provides useful information to investors regarding our operating performance and can facilitate comparisons of operating performance between periods and between REITs.

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• Other items that we believe are not representative of our current or future operating performance.

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The following table provides a reconciliation of Net (loss) income attributable to stockholders to Nareit FFO attributable to stockholders and Adjusted FFO attributable to stockholders:

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

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

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(2) Per share amounts are calculated based on unrounded numbers.

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Results of Operations

Our non-comparable hotels in the table of Hotel Revenues and Operating Expenses below consist of two hotels sold and one hotel returned to the lessor upon termination of the ground lease since January 1, 2024.

Our non-comparable hotels in the table of Hotel Revenues and Operating Expenses below consist of two hotels sold and two hotels returned to the lessor upon termination of the ground lease since January 1, 2024.

The results of operations of these hotels are included in our consolidated results only during our period of ownership.

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Hotel Revenues and Operating Expenses

Three Months Ended June 30,

Three Months Ended September 30,

2025 2024 Change Change from Comparable Hotels (1)

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(1) Change from our comparable hotels primarily relates to the market-specific conditions discussed below.

Six Months Ended June 30,

Nine Months Ended September 30,

2025 2024 Change Change from Comparable Hotels (1)

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(1) Change from our comparable hotels primarily relates to the market-specific conditions discussed below.

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Group, transient, contract and other rooms revenue for the three and six months ended June 30, 2025, as well as the change for each type of rooms revenue compared to the same periods in 2024 are as follows:

Three Months Ended June 30,

Group, transient, contract and other rooms revenue for the three and nine months ended September 30, 2025, as well as the change for each type of rooms revenue compared to the same periods in 2024 were as follows:

Three Months Ended September 30,

2025 2024 Change Change from Comparable Hotels (1)

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(1) Change from our comparable hotels primarily relates to the market-specific conditions discussed below.

Six Months Ended June 30,

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Nine Months Ended September 30,

2025 2024 Change Change from Comparable Hotels (1)

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Market-Specific Conditions

The changes in hotel revenues and operating expenses for our comparable hotels during the three and six months ended June 30, 2025 compared to the same periods in 2024 were primarily attributable to increases at our hotels in the Orlando, New Orleans, New York and Key West markets, offset by decreases at our hotels in our Hawaii, Miami and Boston markets.

Our Orlando hotels experienced an increase in food and beverage revenue of 5.3% and 7.4% for the three and six months ended June 30, 2025, respectively, compared to the same periods in 2024 as a result of the benefit derived from the comprehensive renovation and expansion projects at the Bonnet Creek complex completed in early 2024.

The Waldorf Astoria Orlando benefited from an increase in both group and transient demand, resulting in increases in occupancy and ADR of 12.6 percentage points and 2.6%, respectively, for the three months ended June 30, 2025, and 13.7 percentage points and 4.4%, respectively, for the six months ended June 30, 2025, compared to the same periods in 2024.

The Signia by Hilton Orlando Bonnet Creek benefited primarily from an increase in group demand, resulting in an increase in ADR of 3.2% and 2.8%, respectively, for the three and six months ended June 30, 2025 compared to the same periods in 2024, while occupancy remained steady.

For the three months ended June 30, 2025, the Hilton New Orleans Riverside benefited from an increase in both group and transient demand, with occupancy increasing 3.3 percentage points, and food and beverage revenue increasing 9.3% compared to the same period in 2024.

For the six months ended June 30, 2025, the hotel benefited from an increase in

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group demand, which was driven by the Super Bowl that was held in February 2025, with ADR increasing 5.9% and food and beverage revenue increasing 7.2% compared to the same period in 2024.

The New York Hilton Midtown benefited from an increase in both group and transient demand, resulting in increases in occupancy and ADR of 3.0 percentage points and 6.2%, respectively, for the three months ended June 30, 2025, and ADR increasing 6.6% for the six months ended June 30, 2025, compared to the same periods in 2024.

The increase in the Key West market was a result of the Casa Marina Key West, Curio Collection, which continues to benefit from the hotel’s comprehensive renovation completed in 2023 and an increase in transient demand, resulting in increases in occupancy of 9.1 percentage points and 7.9 percentage points, respectively, for the three and six months ended June 30, 2025, compared to the same periods in 2024.

These increases were offset by decreases in hotel revenues and operating expenses at our two Hawaii hotels where combined occupancy and ADR decreased 8.3 percentage points and 2.2%, respectively, for the three months ended June 30, 2025 and 10.1 percentage points and 2.3%, respectively, for the six months ended June 30, 2025 compared to the same periods in 2024 due to decreases in group and transient demand, partially related to disruption from renovations at both hotels.

The changes in hotel revenues and operating expenses for our comparable hotels during the three and nine months ended September 30, 2025 compared to the same periods in 2024 were primarily attributable to decreases at our hotels in our Hawaii and Miami markets, partially offset by increases at our hotels in the Orlando, New York, Puerto Rico and Key West markets.

At our two Hawaii hotels, group and transient demand decreased, partially related to disruption from renovations at both hotels and ongoing recovery from the labor strike at the Hilton Hawaiian Village Waikiki Beach Resort last year.

Combined occupancy and ADR decreased 5.6 percentage points and 5.6%, respectively, for the three months ended September 30, 2025 and 8.6 percentage points and 3.4%, respectively, for the nine months ended September 30, 2025, compared to the same periods in 2024.

Additionally, the Royal Palm South Beach Miami, a Tribute Portfolio Resort, suspended operations beginning in May 2025 for a full-scale renovation.

During the six months ended June 30, 2024, our Boston hotels benefited from a $5 million grant received from a state program and our Hawaii hotels benefited from a state unemployment tax refund of approximately $4 million, both of which reduced operating expenses.

These decreases were offset by increases in hotel revenues and operating expenses at several of our key markets.

Our Orlando hotels experienced an increase in food and beverage revenue of 5.5% and 6.9% for the three and nine months ended September 30, 2025, respectively, compared to the same periods in 2024 as a result of the benefit derived from the comprehensive renovation and expansion projects at the Bonnet Creek complex completed in early 2024.

The Waldorf Astoria Orlando benefited from an increase in both group and transient demand, resulting in an increase in ADR of 4.8% while maintaining occupancy for the three months ended September 30, 2025, and increases in ADR and occupancy of 5.8% and 9.1 percentage points, respectively, for the nine months ended September 30, 2025, compared to the same periods in 2024.

The Signia by Hilton Orlando Bonnet Creek benefited primarily from an increase in transient demand, resulting in an increase in ADR of 3.3% and 3.1%, respectively, for the three and nine months ended September 30, 2025 compared to the same periods in 2024.

The New York Hilton Midtown experienced an increase in food and beverage revenue of 27.7% and 3.4% for the three and nine months ended September 30, 2025, respectively, compared to the same periods in 2024, primarily due to an increase in banquet and catering revenue.

It also benefited from an increase in transient demand, resulting in an increase in ADR of 5.2% and 6.0%, respectively, for the three and nine months ended September 30, 2025, compared to the same periods in 2024.

The Caribe Hilton in Puerto Rico continues to benefit from an increase in transient demand resulting in increases in occupancy of 15.5 percentage points and 13.9 percentage points for the three and nine months ended September 30, 2025, respectively, compared to the same periods in 2024.

The increase in the Key West market was a result of the Casa Marina Key West, Curio Collection, which continues to benefit from the hotel’s comprehensive renovation completed in 2023 and an increase in transient demand, resulting in increases in occupancy of 4.5 percentage points and 6.8 percentage points, respectively, for the three and nine months ended September 30, 2025, compared to the same periods in 2024.

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Corporate general and administrative

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 Percent Change 2025 2024 Percent Change

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Impairment and casualty loss

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.

During the nine months ended September 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 nine months ended September 30, 2024, we recognized an impairment loss of approximately $12 million, 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.

Refer to Note 7:

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Depreciation and amortization

The increase in depreciation expense for the three and six months ended June 30, 2025, compared to the same periods in 2024, is primarily due to accelerated depreciation of approximately $56 million recognized in connection with the full-scale renovation at the Royal Palm South Beach Miami, a Tribute Portfolio Resort, which began in May 2025.

The increase in depreciation expense for the three and nine months ended September 30, 2025, compared to the same periods in 2024, was primarily due to accelerated depreciation recognized in connection with renovations at certain of our hotels, including approximately $56 million related to the full-scale renovation at the Royal Palm South Beach Miami, a Tribute Portfolio Resort, which began in May 2025.

Gain on derecognition of assets

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, from the accrued interest expense associated with the default of the SF Mortgage Loan, which

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resulted in a corresponding increase of the contract asset in our condensed consolidated balance sheets, as we expect to be released from this obligation upon final resolution with the lender.

During the three and nine months ended September 30, 2025, we recognized a gain of $16 million and $48 million, respectively, and during the three and nine months ended September 30, 2024, we recognized a gain of $15 million and $44 million, respectively, from the accrued interest expense associated with the default of the SF Mortgage Loan, which resulted in a corresponding increase of the contract asset in our condensed consolidated balance sheets, as we expect to be released from this obligation upon final resolution with the lender.

Non-operating Income and Expenses

Interest income

Interest income decreased $3 million and $5 million during the three and six months ended June 30, 2025 compared to the same periods in 2024 primarily as a result of a decrease in average cash balances.

Interest income decreased $3 million and $8 million during the three and nine months ended September 30, 2025 compared to the same periods in 2024 primarily as a result of a decrease in average cash balances.

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Interest expense

Interest expense associated with our debt for the three and six months ended June 30, 2025 and 2024 were as follows:

Interest expense associated with our debt for the three and nine months ended September 30, 2025 and 2024 were as follows:

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 Percent Change 2025 2024 Percent Change

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(1) In October 2016, we entered into a $1.275 billion CMBS loan secured by the Hilton Hawaiian Village Waikiki Beach Resort (“HHV Mortgage Loan”).

(2) 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”).

(3) In May 2020, Park Intermediate Holdings LLC (our “Operating Company”), PK Domestic, and PK Finance Co Issuer Inc.

(2) The $200 million senior unsecured term loan (“2024 Term Loan”) was incurred in May 2024.

(3) In May 2020, Park Intermediate Holdings LLC (our “Operating Company”), PK Domestic Property LLC, an indirect subsidiary of the Company (“PK Domestic”), and PK Finance Co Issuer Inc.

(“PK Finance”) issued an aggregate of $650 million of senior notes due 2025 (“2025 Senior Notes”), all of which were repurchased or redeemed during the second quarter of 2024.

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Interest expense associated with hotels in receivership

For the three and six months ended June 30, 2025, interest expense of $16 million and $32 million, respectively, and for the three and six months ended June 30, 2024, interest expense of $15 million and $29 million, respectively, represents accrued interest associated with the default of the SF Mortgage Loan.

For the three and nine months ended September 30, 2025, interest expense of $16 million and $48 million, respectively, and for the three and nine months ended September 30, 2024, interest expense of $15 million and $44 million, respectively, represents accrued interest associated with the default of the SF Mortgage Loan.

Refer to Note 6:

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Other (loss) gain, net

During the three months ended June 30, 2024, we recognized a loss of approximately $3 million related to the write-off of the remaining unamortized deferred financing costs associated with the repurchase and redemption of all the 2025 Senior Notes.

During the nine months ended September 30, 2024, we recognized a loss of approximately $4 million, primarily related to the write-off of the remaining unamortized deferred financing costs associated with the repurchase and redemption of all the 2025 Senior Notes.

Equity in earnings from investments in affiliates

Equity in earnings from investments in affiliates decreased $28 million and $27 million for the three and nine months ended September 30, 2025, respectively, compared to the same periods in 2024 primarily due to a $19 million gain from the sale of the Hilton La Jolla Torrey Pines in July 2024.

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Income tax benefit (expense)

During the three and six months ended June 30, 2024, we recognized an income tax benefit of $12 million and $11 million, respectively, which is 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.

During the three and nine months ended September 30, 2025, we recognized income tax expense of $6 million and $8 million respectively, which was primarily related to taxable income from our TRSs.

During the three months ended September 30, 2024, we recognized income tax expense of $2 million, which was primarily related to taxable income from our TRSs.

During the nine months ended September 30, 2024, we recognized an income tax benefit of $9 million, 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.

Liquidity and Capital Resources

We seek to maintain sufficient amounts of liquidity with an appropriate balance of cash, debt and equity to provide financial flexibility.

As of June 30, 2025, we had total cash and cash equivalents of $319 million and $28 million of restricted cash.

As of September 30, 2025, we had total cash and cash equivalents of $278 million and $31 million of restricted cash.

Restricted cash primarily consists of cash restricted as to use by our debt agreements and reserves for capital expenditures in accordance with certain of our management agreements.

With $950 million available under our revolving credit facility (“Revolver”) and $319 million in existing cash and cash equivalents, we have sufficient liquidity to pay our debt maturities and to fund other liquidity obligations over the next 12 months and beyond.

Excluding the SF Mortgage Loan for which we ceased to make debt service payments in June 2023 and is in default, we have no significant maturities until the fourth quarter of 2026.

With the recent amendment and restatement of our existing credit agreement in September 2025, which increased the available capacity under our senior unsecured revolving credit facility (“Revolver”) to $1 billion and added the new 2025 Delayed Draw Term Loan of up to $800 million, in addition to the $278 million in existing cash and cash equivalents, we have sufficient liquidity to pay our debt maturities and to fund other liquidity obligations over the next 12 months and beyond.

Excluding the SF Mortgage Loan for which we ceased to make debt service payments in June 2023 and is in default, we have no significant maturities until the fourth quarter of 2026, and we intend to draw upon the 2025 Delayed Draw Term Loan in 2026 to assist in repaying two mortgage loans totaling approximately $1.4 billion maturing in 2026.

Refer to Note 6:

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Our known short-term liquidity requirements primarily consist of funds necessary to pay for operating expenses and other expenditures, including reimbursements to our hotel manager for payroll and related benefits, costs associated with the operation of our hotels, interest and contractually due principal payments on our outstanding indebtedness, capital expenditures for in-progress renovations and maintenance at our hotels, corporate general and administrative expenses and dividends to our stockholders.

In April 2025, we declared a second quarter dividend of $0.25 per share that was paid on July 15, 2025 to stockholders of record as of June 30, 2025.

In addition, we declared a third quarter dividend of $0.25 per share in July 2025 to be paid on October 15, 2025 to stockholders of record as of September 30, 2025.

In July 2025, we declared a third quarter dividend of $0.25 per share that was paid on October 15, 2025 to stockholders of record as of September 30, 2025.

In addition, we declared a fourth quarter dividend of $0.25 per share in October 2025 to be paid on January 15, 2026 to stockholders of record as of December 31, 2025.

Many of the other expenses associated with our hotels are relatively fixed, including portions of rent expense, property taxes and insurance.

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Further, we have an investment policy that is focused on the preservation of capital and maximizing the return on new and existing investments.

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Stock Repurchase Program

In February 2025, our Board of Directors terminated a previous $300 million stock repurchase program that was approved in February 2023 (the “February 2023 Stock Repurchase Program”) and authorized and approved a new stock repurchase program allowing us to repurchase up to $300 million of our common stock over a two-year period ending in February 2027 (the “February 2025 Stock Repurchase Program”), subject to any applicable limitations or restrictions set forth in our credit facility and indentures related to our senior notes.

Stock repurchases may be made through open market

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purchases, including through Rule 10b5-1 trading programs, in privately negotiated transactions, or in such other manner that would comply with applicable securities laws.

Stock repurchases may be made through open market purchases, including through Rule 10b5-1 trading programs, in privately negotiated transactions, or in such other manner that would comply with applicable securities laws.

The timing of any future stock repurchases and the number of shares to be repurchased will depend upon prevailing market conditions and other factors, and we may suspend the repurchase program at any time.

During the six months ended June 30, 2025, we repurchased 3.5 million shares of our common stock, including 1.4 million shares under the 2023 Stock Repurchase Program and 2.1 million shares under the 2025 Stock Repurchase Program, for a total purchase price of $45 million.

As of June 30, 2025, $275 million remained available for stock repurchases under the 2025 Stock Repurchase Program.

During the nine months ended September 30, 2025, we repurchased 3.5 million shares of our common stock, including 1.4 million shares under the February 2023 Stock Repurchase Program and 2.1 million shares under the February 2025 Stock Repurchase Program, for a total purchase price of $45 million.

As of September 30, 2025, $275 million remained available for stock repurchases under the February 2025 Stock Repurchase Program.

Sources and Uses of Our Cash and Cash Equivalents

The following tables summarize our net cash flows and key metrics related to our liquidity:

Six Months Ended June 30,

Nine Months Ended September 30,

2025 2024 Percent Change

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Cash flow from operating activities are primarily generated from the operating income generated at our hotels.

The $15 million decrease in net cash provided by operating activities for the six months ended June 30, 2025 compared to the six months ended June 30, 2024 was primarily due to decreases in occupancy at certain of our hotels, including the Royal Palm South Beach Miami, a Tribute Portfolio Resort, which suspended operations in May 2025 for full-scale renovations.

The $56 million decrease in net cash provided by operating activities for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024 was primarily due to decreases in occupancy at certain of our hotels, including the Royal Palm South Beach Miami, a Tribute Portfolio Resort, which suspended operations in May 2025 for a full-scale renovation.

Investing Activities

The $45 million in net cash used in investing activities for the six months ended June 30, 2025 was attributable to $120 million of capital expenditures, partially offset by $75 million of net proceeds from the sale of the Hyatt Centric Fisherman’s Wharf.

The $121 million in net cash used in investing activities for the six months ended June 30, 2024 was attributable to capital expenditures.

The $113 million in net cash used in investing activities for the nine months ended September 30, 2025 was attributable to $188 million of capital expenditures, partially offset by $75 million of net proceeds from the sale of the Hyatt Centric Fisherman’s Wharf.

The $134 million in net cash used in investing activities for the nine months ended September 30, 2024 was attributable to $164 million of capital expenditures, partially offset by $33 million of distributions from unconsolidated affiliates primarily related to the sale of the Hilton La Jolla Torrey Pines.

Financing Activities

The $242 million in net cash used in financing activities for the six months ended June 30, 2025 was primarily attributable to $181 million of dividends paid and the repurchase of approximately 3.5 million shares of our common stock for $45 million.

The $354 million in net cash used in financing activities for the six months ended June 30, 2024 was primarily attributable to the issuance of $550 million of 2030 Senior Notes and the $200 million 2024 Term Loan, offset by $654 million of debt repayments, the repurchase of approximately 1.7 million shares of our common stock for $25 million and $407 million of dividends paid.

The $311 million in net cash used in financing activities for the nine months ended September 30, 2025 was primarily attributable to $230 million of dividends paid, the repurchase of approximately 3.5 million shares of our common stock for $45 million and $16 million in financing fees related to the recent amendment to our credit agreement in September 2025.

The $447 million in net cash used in financing activities for the nine months ended September 30, 2024 was primarily attributable to the issuance of $550 million of 2030 Senior Notes and the $200 million 2024 Term Loan, offset by $656 million of debt repayments, $459 million of dividends paid and the repurchase of approximately 4.2 million shares of our common stock for $60 million.

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As a REIT, we are required to distribute at least 90% of our REIT taxable income, determined without regard to the deduction for dividends paid and excluding net capital gains, to our stockholders on an annual basis.

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Instead, we will need to meet these needs from external sources of capital and amounts, if any, by which our cash flow generated from operations exceeds taxable income.

Table of Content s

We declared the following dividends to holders of our common stock during 2025:

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September 30, 2025 October 15, 2025 $ 0.25

As of June 30, 2025, our total indebtedness was approximately $3.8 billion, including over $2 billion of our Senior Notes, and excluding the $725 million SF Mortgage Loan (that we ceased making debt service payments in June 2023) and our share of debt from investments in affiliates.

December 31, 2025 January 15, 2026 $ 0.25

As of September 30, 2025, our total indebtedness was approximately $3.8 billion, including over $2 billion of our Senior Notes, and excluding the $725 million SF Mortgage Loan (that we ceased making debt service payments in June 2023) and our share of debt from investments in affiliates.

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

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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 2. Management’s Discussion and Analysis