What changed in this filing

/stocks — the workspaceLOADING

Item 7. Management’s Discussion and Analysis

2026-02-20 compared with 2025-02-20 · 116 added, 106 removed, 337 unchanged (40% of the section changed)

3 unchanged sentences

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

We currently have interests in 40 hotels consisting of premium-branded hotels and resorts with approximately 25,000 rooms, of which over 87% are luxury and upper upscale and are located in prime U.S.

We currently have interests in 34 hotels consisting of premium-branded hotels and resorts with approximately 23,000 rooms, located in prime U.S.

markets and its territories.

Our high-quality portfolio currently includes hotels mostly in major urban and convention areas, such as New York City, Washington, D.C., Chicago, Boston, New Orleans and Denver;

Our strategic focus is on our Core portfolio, with our consolidated Core hotels contributing approximately 90% of our Hotel Adjusted EBITDA.

Over 96% of rooms in our Core portfolio are luxury and upper upscale, and our Core hotels are located in major urban and convention areas, such as New York City, Washington, D.C., Chicago, Boston, New Orleans and Denver;

and premier resorts in key leisure destinations, including Hawaii, Orlando, Key West and Miami Beach;

1 unchanged sentence

Our objective is to be the preeminent lodging real estate investment trust (“REIT”), focused on consistently delivering superior, risk-adjusted returns to stockholders through active asset management and a thoughtful external growth strategy, while maintaining a strong and flexible balance sheet.

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.

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

Our consolidated hotels operating segment is our only reportable segment.

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 represents a significant embedded growth opportunity, particularly for our Core portfolio.

Finally, given our scale and investment expertise, we believe we will be able to successfully execute single-asset and portfolio acquisitions and dispose of all 13 remaining Non-Core hotels to further enhance the value and diversification of our assets throughout the lodging cycle.

As a result of a shift in our business strategy to dispose of all Non-Core hotels, we now operate our business through three operating segments, our consolidated Core hotels, consolidated Non-Core hotels and unconsolidated hotels.

Only our consolidated Core hotels and consolidated Non-Core hotels are reportable segments.

Refer to Note 14:

6 unchanged sentences

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.

However, inflationary concerns have moderated and further interest rate reductions may continue.

In addition, during the fourth quarter of 2024, the hotel operators for four of our hotels negotiated long-term labor agreements with labor organizations representing their hotel employees following strikes and other labor activity that affected our operating results beginning in late September 2024.

Any future labor disruptions may result in increases in labor or other costs to maintain or operate hotels.

During 2024, we have relied on the performance of our hotels and active asset management to mitigate the effects of current macroeconomic uncertainty and recent labor disruptions.

Additionally, we continued to experience improvements in overall demand across our portfolio, although ADR growth has slowed as the industry recovery has stabilized and seasonal patterns have normalized.

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 expect the positive momentum to continue for 2025 based on current demand trends, expected increases in city-wide events and as demand from international travel continues to improve.

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.

Additionally, geopolitical conflicts and trends may continue to decrease inbound international travel.

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

foreign or domestic policy, or another government shutdown, we are cautiously optimistic for 2026 based on upcoming major events, including the World Cup and the 250th anniversary of the U.S., continued benefits from transformative renovations at certain of our hotels, including the expected reopening of the Royal Palm South Beach Miami, a Tribute Portfolio Resort (“Royal Palm”) in June 2026, the benefits of divesting Non-Core hotels and expected macroeconomic improvement from continued deregulation.

Table of Content s

Principal Components of and Factors Affecting Our Results of Operations

31 unchanged sentences

These costs primarily include food, beverage and the associated labor and will correlate closely with food and beverage revenues.

Table of Content s

Other departmental and support .

39 unchanged sentences

As we place new assets into service, we will be required to recognize additional depreciation expense on those assets.

Table of Content s

Key Business Metrics Used by Management

12 unchanged sentences

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

Comparable Hotels Data

We present certain data for our hotels on a comparable hotel basis as supplemental information for investors.

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 December 31, 2024 and the Hilton San Francisco Hotels, which were placed into receivership at the end of October 2023.

Non-GAAP Financial Measures

We also evaluate the performance of our business through certain other financial measures that are not recognized under U.S.

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 income.

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.

EBITDA, Adjusted EBITDA and Hotel Adjusted EBITDA

EBITDA, presented herein, reflects net 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.

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.

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:

8 unchanged sentences

EBITDA, Adjusted EBITDA and Hotel Adjusted EBITDA are not recognized terms under U.S.

GAAP and should not be considered as alternatives to net income or other measures of financial performance or liquidity derived in accordance with U.S.

GAAP and should not be considered as alternatives to net (loss) income or other measures of financial performance or liquidity derived in

Table of Content s

accordance with U.S.

In addition, our definitions of EBITDA, Adjusted EBITDA and Hotel Adjusted EBITDA may not be comparable to similarly titled measures of other companies.

16 unchanged sentences

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

• although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and EBITDA, Adjusted EBITDA and Hotel Adjusted EBITDA do not reflect any cash requirements for such replacements.

The following table provides a reconciliation of Net income to Hotel Adjusted EBITDA:

• although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and EBITDA, Adjusted EBITDA and Hotel Adjusted EBITDA and do not reflect any cash requirements for such replacements.

Table of Content s

The following table provides a reconciliation of Net (loss) income to Hotel Adjusted EBITDA:

Year Ended December 31,

(in millions)

Net income $ 226 $ 106

Net (loss) income $ (277) $ 226

Depreciation and amortization expense 336 257

2 unchanged sentences

Interest expense associated with hotels in receivership (1)

Income tax (benefit) expense (61) 38

Income tax expense (benefit)

Interest income and expense, income tax and depreciation and amortization included in equity in earnings from investments in affiliates 7 10

2 unchanged sentences

Gain on derecognition of assets (1)

Gain on sale of investments in affiliates (2)

Share-based compensation expense 19 19

5 unchanged sentences

Hotel Adjusted EBITDA 644 683

Adjusted EBITDA from Non-Core hotels

Core Hotel Adjusted EBITDA

____________________________________________________________________________________

(1) For the year ended December 31, 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 asse t on our consolidated balance sheets, as we expect to be released from this obligation upon final resolution with the lender.

For the year ended December 31, 2023, represents accrued interest expense associated with the default of the SF Mortgage Loan and the gain from derecognizing the Hilton San Francisco Hotels from our consolidated balance sheet in October 2023, when the receiver took control of the hotels.

(1) For the years ended December 31, 2025 and 2024, represents accrued interest expense associated with the default of the $725 million non-recourse CMBS loan (“SF Mortgage Loan”), which was offset by a gain on derecognition for the corresponding increase of the contract asse t on our consolidated balance sheets.

The SF Mortgage Loan was assumed by the buyer of 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”), which were sold by the court-appointed receiver on November 21, 2025.

(2) For the year ended December 31, 2025, includes a $16 million gain on the sale of our ownership interest in the Capital Hilton included in other gain (loss), net .

For the year ended December 31, 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.

For the year ended December 31, 2023, the $3 million gain on sale of investments in affiliates is included in other (loss) gain, net.

(3) Includes other revenues and other expenses , non-income taxes on TRS leases included in other property expenses and corporate general and administrative expenses.

7 unchanged sentences

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.

Our presentation may not be comparable to FFO reported by other REITs that do not define the terms in accordance with the current Nareit definition, or that interpret the current Nareit

definition differently than we do.

Our presentation may not be comparable to FFO reported by other REITs that do not define the terms in accordance with the current Nareit definition, or that interpret the current Nareit definition differently than we do.

We calculate Nareit FFO per diluted share as our Nareit FFO divided by the number of fully diluted shares outstanding during a given operating period.

Table of Content s

We also present Adjusted FFO attributable to stockholders and Adjusted FFO per diluted share when evaluating our performance because we believe that the exclusion of certain additional items described below provides useful supplemental information to investors regarding our ongoing operating performance.

7 unchanged sentences

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

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

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:

Year Ended December 31,

(in millions, except per share amounts)

Net income attributable to stockholders $ 212 $ 97

Net (loss) income attributable to stockholders $ (283) $ 212

Depreciation and amortization expense 336 257

3 unchanged sentences

Gain on derecognition of assets (2)

Gain on sale of investments in affiliates (2)

Impairment loss 318 12

3 unchanged sentences

Nareit FFO attributable to stockholders 295 399

Casualty loss 2 2

Share-based compensation expense 19 19

1 unchanged sentence

Release of deferred tax valuation allowance

Other items (4)

Adjusted FFO attributable to stockholders $ 394 $ 430

4 unchanged sentences

____________________________________________________________________________________

For the year ended December 31, 2023, reflects incremental default interest expense and late payment administrative fees associated with the default of the SF Mortgage Loan beginning in June 2023 and the gain from derecognizing the Hilton San Francisco Hotels from our consolidated balance sheet in October 2023, when the receiver took control of the hotels.

(2) For the years ended December 31, 2024 and 2023, the gain on sale of investments in affiliates is included in equity in earnings from investments in affiliates and other (loss) gain, net , respectively.

(3) For the year ended December 31, 2024, the gain of $19 million on the sale of the Hilton La Jolla Torrey Pines is presented within gain on sale of investments in affiliates above.

(4) For the year ended December 31, 2023, includes $28 million of income tax expense primarily associated with the effective exit from the Hilton San Francisco Hotels, of which $19 million was reversed during the year ended December 31, 2024 as it is no longer expected to be incurred.

(1) For the year ended December 31, 2025, includes a $16 million gain on the sale of our ownership interest in the Capital Hilton included in other gain (loss), net .

For the year ended December 31, 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.

(2) For the years ended December 31, 2025 and 2024, represents accrued interest expense associated with the default of the SF Mortgage Loan, which was offset by a gain on derecognition for the corresponding increase of the contract asse t on our consolidated balance sheets.

The SF Mortgage Loan was assumed by the buyer of the Hilton San Francisco Hotels, which were sold by the court-appointed receiver on November 21, 2025.

(3) For the year ended December 31, 2024, the gain of $19 million on the sale of the Hilton La Jolla Torrey Pines is presented within gain on sale of assets, net above.

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

Table of Content s

Results of Operations

Our non-comparable hotels consist of two hotels sold and two hotels returned to the lessor upon termination of the ground leases since January 1, 2023.

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

Additionally, our non-comparable hotels also consist of the two Hilton San Francisco Hotels, which are excluded from our consolidated results beginning in October 2023 as a result of the hotels being placed into receivership and had a significant effect on the year-over-year comparability of our operations as further illustrated in the table of Hotel Revenues and Operating Expenses below.

During 2024 and 2025, we disposed of four Non-Core hotels.

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

Hotel Revenues and Operating Expenses

Year Ended December 31, Change from Non-Comparable Hotels

2024 2023 Change Change from Comparable Hotels (1)

Change from the Hilton San Francisco Hotels Change from Other Non-Comparable Hotels

Year Ended December 31, Non-Core Hotels

2025 2024 Change Change from Core Hotels Change from Remaining Non-Core Hotels (1)

Change from Disposed Hotels

(in millions)

8 unchanged sentences

____________________________________________________________________________________

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

(1) Includes two hotels that were surrendered to the ground lessor on December 31, 2025 upon expiration of the ground lease.

Group, transient, contract and other rooms revenue for the year ended December 31, 2025, as well as the change for each type of rooms revenue compared to 2024 are as follows:

Year Ended December 31, Change from Non-Comparable Hotels

2024 2023 Change Change from Comparable Hotels (1)

Change from the Hilton San Francisco Hotels Change from Non-Comparable Hotels

Year Ended December 31, Non-Core Hotels

2025 2024 Change Change from Core Hotels Change from Remaining Non-Core Hotels (1)

Change from Disposed Hotels

(in millions)

5 unchanged sentences

____________________________________________________________________________________

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

Market-Specific Conditions

The increases in hotel revenues and operating expenses for our comparable hotels during the year ended December 31, 2024, as compared to the same period in 2023, were primarily attributable to our hotels in the Orlando, Key West, New York, Chicago and Boston markets.

Our Orlando hotels both benefited from the comprehensive renovation and expansion projects completed in early 2024, which drove a 25% increase in food and beverage revenue for the year ended December 31, 2024 compared to the same period in 2023 and resulted in increases in occupancy and ADR of 3.0 percentage points and 6.1%, respectively, at the Signia by Hilton Orlando Bonnet Creek and increases in occupancy and ADR of 11.5 percentage points and 5.6%, respectively, at the Waldorf Astoria Orlando for the year ended December 31, 2024 compared to the same period in 2023.

The increase in the Key West market was driven by the Casa Marina Key West, Curio Collection, where operations were suspended for a comprehensive renovation that started in May 2023, with all rooms reopening by December 2023.

The New York Hilton Midtown and the Hilton Chicago both benefited from increases in group and transient demand, which drove increases in food and beverage revenue of 13% and 6%, respectively.

Occupancy and ADR at the New York Hilton Midtown increased 1.8 percentage points and 1.6%, respectively, while occupancy and ADR at the Hilton Chicago increased 6.2 percentage points and 1.5%, respectively, for the year ended December 31, 2024 compared to the same period in 2023.

Combined occupancy and ADR at our Boston hotels increased 2.4 percentage points and 3.8%, respectively, for the year ended December 31, 2024 compared to the same period in 2023 also due to increases in group and transient demand.

These increases were partially offset by decreases in hotel revenues and operating expenses at our two Hawaii hotels where combined occupancy decreased 7.1 percentage points for the year ended December 31, 2024 compared to the same period in 2023 due to disruptions from strike and related labor activity that began in September 2024 and resolved during October and November 2024.

(1) Includes two hotels that were surrendered to the ground lessor on December 31, 2025 upon expiration of the ground lease.

The changes in hotel revenues and operating expenses for our Core hotels during the year ended December 31, 2025 compared to 2024 were primarily attributable to decreases at our hotels in Miami and Hawaii, partially offset by increases at the Bonnet Creek complex, the New York Hilton Midtown, the Hilton Caribe and the Casa Marina Key West, Curio Collection.

Our two Core hotels in Hawaii experienced a decrease in transient demand, partially due to disruption from renovations at both hotels and ongoing recovery at the Hilton Hawaiian Village Waikiki Beach Resort from the labor strike last year.

Occupancy at the Hilton Hawaiian Village Waikiki Beach Resort and the Hilton Waikoloa Village decreased 3.2 percentage points and 7.4 percentage points, respectively, for the year ended December 31, 2025 compared to 2024, while ADR decreased 3.2% and 0.2%, respectively.

Additionally, the Royal Palm in Miami suspended operations beginning in May 2025 for a full-scale renovation.

These decreases were offset by increases in hotel revenues and operating expenses at certain of our Core hotels in Florida, New York and Puerto Rico.

The Waldorf Astoria Orlando and Signia by Hilton Orlando Bonnet Creek benefited from an increase in both group and transient demand, resulting in an increase in occupancy of 6.9 percentage points and 1.1 percentage points, respectively, for the year ended December 31, 2025 compared to 2024, while ADR increased 6.7% and

Table of Content s

2.1%, respectively.

Additionally, the Waldorf Astoria Orlando and the Signia by Hilton Orlando Bonnet Creek experienced a combined increase in food and beverage revenue of 11.5%, or nearly $13 million, for the year ended December 31, 2025 compared to 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 Casa Marina Key West, Curio Collection, continues to benefit from the hotel’s comprehensive renovation completed in 2023, resulting in an increase in transient demand, increasing occupancy by 6.7 percentage points, which offset a decrease in ADR of 3.3%, for the year ended December 31, 2025 compared to 2024, coupled with an increase in food and beverage revenue of 12.8%, or over $2 million.

The New York Hilton Midtown benefited from an increase in both group and transient demand and revenues from higher-rated customers, resulting in an increase in occupancy and ADR of 0.4 percentage points and 5.3%, respectively, for the year ended December 31, 2025 compared to 2024.

The Caribe Hilton in Puerto Rico continues to benefit from an increase in group and transient demand resulting in an increase in occupancy of 11.9 percentage points for the year ended December 31, 2025 compared to 2024, which offset a decrease in ADR of 5.0%.

A majority of the Non-Core hotels remaining in our portfolio experienced declines in both group and transient demand, resulting in decreases in combined occupancy and ADR of 1.6 percentage points and 2.6%, respectively, including The Midland Hotel, a Tribute Portfolio Hotel, and The Wade in Chicago where occupancy decreased 0.7 percentage points and 1.6 percentage points, respectively, and ADR decreased 10.4% and 8.8%, respectively, for the year ended December 31, 2025 compared to 2024.

Corporate general and administrative

7 unchanged sentences

Impairment and casualty loss

During the year ended December 31, 2024, we recognized impairment losses 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.

During the year ended December 31, 2025, we recognized impairment losses of approximately $318 million primarily related to nine of our Non-Core hotels, due to sales and the strategic decision to accelerate the disposition of our Non-Core hotels.

Refer to Note 8:

“Fair Value Measurements” in our audited consolidated financial statements included elsewhere within this Annual Report on Form 10-K for additional information.

During the year ended December 31, 2023, we recognized an impairment loss of approximately $202 million.

During the year ended December 31, 2024, we recognized an impairment loss of approximately $12 million, related to two of our Non-Core hotels subject to ground leases and our inability to recover the carrying value of the assets over the remaining lease term.

Refer to Note 8:

“Fair Value Measurements” in our audited consolidated financial statements included elsewhere within this Annual Report on Form 10-K for additional information.

Depreciation and amortization

The increase in depreciation expense for the year ended December 31, 2025 compared to 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, which began in May 2025.

Gain on sale of assets, net

During the years ended December 31, 2024 and 2023, we recognized a net gain of $8 million and $15 million, respectively, primarily from the sales of our consolidated hotels.

During the years ended December 31, 2025 and 2024, we recognized a net gain of $2 million and $8 million, respectively, primarily from the sales of our consolidated Non-Core hotels.

Table of Content s

Gain on derecognition of assets

During the year ended December 31, 2024, we recognized a gain of $60 million 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 consolidated balance sheets, as we expect to be released from this obligation upon final resolution with the lender.

During the year ended December 31, 2023, we recognized a gain of $221 million from the derecognition of the Hilton San Francisco Hotels from our consolidated balance sheet in October 2023, when the receiver took control of the hotels.

During the years ended December 31, 2025 and 2024, we recognized a gain of $58 million and $60 million 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 consolidated balance sheets.

We ceased accruing interest expense when the SF Mortgage Loan was assumed by the buyer of the Hilton San Francisco Hotels, which were sold by the court-appointed receiver on November 21, 2025.

Refer to Note 7:

2 unchanged sentences

Interest income

Interest income decreased $17 million during the year ended December 31, 2024 compared to the same period in 2023 primarily as a result of a decrease in average cash balances.

Interest income decreased $11 million during the year ended December 31, 2025 compared to 2024 primarily as a result of a decrease in average cash balances as we have reinvested cash into our Core portfolio, including the full-scale renovation of the Royal Palm.

Interest expense

Interest expense increased $7 million during the year ended December 31, 2024 compared to the same period in 2023 due to the issuance of the $550 million of senior notes due in 2030 ("2030 Senior Notes") and the $200 million senior unsecured term loan due May 2027 ("2024 Term Loan"), partially offset by the repurchase and redemption of all the $650 million senior notes due in 2025 ("2025 Senior Notes").

Interest expense associated with our debt for the years ended December 31, 2025 and 2024 were as follows:

5 unchanged sentences

Other mortgage loans 16 17 (5.9) %

Revolver 3 4 (25.0) %

2024 Term Loan (3)

2025 Delayed Draw Term Loan (4)

2025 Senior Notes (5)

7 unchanged sentences

(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) As of December 31, 2025, we had $1 billion of available capacity under our senior unsecured revolving credit facility (“Revolver”).

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

(4) Our new senior unsecured delayed draw term loan facility (“2025 Delayed Draw Term Loan”) was incurred in September 2025, and as of December 31, 2025, there were no borrowings outstanding.

(5) 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 2025 Senior Notes, all of which were repurchased or redeemed during the second quarter of 2024.

Our Operating Company, PK Domestic and PK Finance also issued an aggregate of $725 million of senior notes due 2028 (“2028 Senior Notes”) in September 2020, an aggregate of $750 million of senior notes due 2029 ("2029 Senior Notes") in May 2021 and an aggregate of $550 million of 2030 Senior Notes in May 2024.

Our current debt outstanding is approximately $3.8 billion, excluding the SF Mortgage Loan, at a weighted average interest rate of 5.2%, of which 95% is fixed-rate debt, refer to Item 7A:

(“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.

Our Operating Company, PK Domestic, and PK Finance also issued an aggregate of $725 million of senior notes due 2028 (“2028 Senior Notes”) in September 2020, an aggregate of $750 million of senior notes due 2029 (“2029 Senior Notes”) in May 2021 and an aggregate of $550 million of senior notes due 2030 (“2030 Senior Notes”) in May 2024.

Our current debt outstanding is approximately $3.8 billion at a weighted average interest rate of 5.2%, of which 95% is fixed-rate debt, refer to Item 7A:

“Interest Rate Risk” and Note 7:

“Debt” in our audited consolidated financial statements included elsewhere within this Annual Report on Form 10-K for additional information.

Table of Content s

Interest expense associated with hotels in receivership

Interest expense on the SF Mortgage Loan increased $15 million as compared to 2023 due to accrued default interest not beginning until June 2023 when we ceased making payments on the loan.

The stated rate on the loan is 4.11%, however, beginning June 1, 2023, the default interest rate on the loan is 7.11%.

Additionally, beginning June 1, 2023, the loan accrues a monthly late payment administrative fee of 3% of the monthly amount due.

Other (loss) gain, net

During the year ended December 31, 2024, we recognized a loss of approximately $4 million, which was 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.

During the year ended December 31, 2023, we recognized a gain of approximately $4 million for an early termination fee received from the lessor to terminate the lease for the Embassy Suites Phoenix Airport hotel.

For the years ended December 31, 2025 and 2024, interest expense of $58 million and $60 million, respectively, represents accrued interest associated with the default of the SF Mortgage Loan.

We ceased accruing interest expense when the SF Mortgage Loan was assumed by the buyer of the Hilton San Francisco Hotels, which were sold by the court-appointed receiver on November 21, 2025.

Refer to Note 7:

“Debt” in our audited consolidated financial statements included elsewhere within this Annual Report on Form 10-K for additional information.

Other gain (loss), net

During the year ended December 31, 2025, we recognized a gain of $16 million primarily related to the sale of our ownership interest in the Capital Hilton in November 2025.

During the year ended December 31, 2024, we recognized a loss of $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 increased $20 million for the year ended December 31, 2024 primarily due to a $19 million gain from the sale of the Hilton La Jolla Torrey Pines.

Income tax benefit (expense)

During the year ended December 31, 2024, we recognized an income tax benefit of $61 million, which was primarily related to the release of $54 million of the valuation allowance on our deferred tax assets that we now believe to be realizable and $19 million of income tax expense that is no longer expected to be incurred primarily associated with the effective exit from the Hilton San Francisco Hotels.

These benefits were offset by expense primarily generated from the taxable income of our TRSs.

During the year ended December 31, 2023, we recognized income tax expense of $38 million, primarily related to the effective exit from the Hilton San Francisco Hotels in October 2023, which resulted in incremental income tax expense of $28 million.

The remaining income tax expense is primarily related to our TRSs.

Equity in earnings from investments in affiliates decreased $27 million for the year ended December 31, 2025 compared to 2024 primarily due to a $19 million gain from the sale of the Hilton La Jolla Torrey Pines in 2024.

Income tax (expense) benefit

During the year ended December 31, 2025, we recognized income tax expense of $7 million, primarily related to taxable income from our TRSs.

During the year ended December 31, 2024, we recognized an income tax benefit of $61 million, primarily related to the release of $54 million of the valuation allowance on our deferred tax assets that we now believe to be realizable and $19 million of income tax expense that was no longer expected to be incurred primarily associated with the effective exit from the Hilton San Francisco Hotels.

These benefits were offset by expense primarily generated from taxable income from our TRSs.

Liquidity and Capital Resources

2 unchanged sentences

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.

During 2024, we continued to experience improvements in overall demand across our portfolio and expect the improvement to continue through 2025 based on current demand trends, including an increase in city-wide events and from international travel.

We continue to mitigate the effects of macroeconomic and inflationary pressures through active asset management.

With $950 million available under our revolving credit facility ("Revolver") and $402 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, and following the issuance of the 2030 Senior Notes and borrowings under the 2024 Term Loan, the proceeds from which collectively were used to repurchase or redeem all of the 2025 Senior Notes and for other general corporate purposes, we have no significant maturities until the fourth quarter of 2026.

With the recent Second Amended and Restated Credit Agreement (the “Credit Agreement”) entered into in September 2025, which increased the available capacity under our Revolver to $1 billion and added the new 2025 Delayed Draw Term Loan of up to $800 million, in addition to the $232 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.

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 and further pay down our debt with proceeds from the sales of our Non-Core hotels.

Refer to Note 7:

2 unchanged sentences

However, there can be no assurance as to the timing of any such issuance, which may be in the near term, or that any such additional financing will be completed on favorable terms, or at all.

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.

Table of Content s

expenditures for in-progress renovations and maintenance at our hotels, corporate general and administrative expenses and dividends to our stockholders.

During 2025, we declared dividends of $1.00 per share, including our fourth quarter dividend of $0.25 that was paid on January 15, 2026 to stockholders of record as of December 31, 2025 based on 2025 operating results.

In addition, we declared a first quarter dividend of $0.25 per share in February 2026 to be paid on April 15, 2026 to stockholders of record as of March 31, 2026.

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

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

Since we generally are unable to decrease these costs significantly or rapidly when demand for our hotels decreases, the resulting decline in our revenues can have a greater adverse effect on our net cash flow, margins and profits.

1 unchanged sentence

Our commitments to fund capital expenditures for renovations and maintenance at our hotels will be funded by cash and cash equivalents, restricted cash to the extent permitted by our lending agreements and cash flow from operations.

We have construction contract commitments of approximately $95 million for capital expenditures at our properties, of which $25 million relates to guestroom and lobby renovations at the Hilton Hawaiian Village Waikiki Beach Resort, $15 million relates to guestroom renovations at the Hilton New Orleans Riverside and $13 million relates to guestroom and lobby renovations at the Hilton Waikoloa Village.

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

We have construction contract commitments of approximately $110 million for capital expenditures at our properties, and our contracts contain clauses that allow us to cancel all or some portion of the work.

Refer to Note 15:

Commitments and Contingencies in our audited consolidated financial statements included elsewhere within this Annual Report on Form 10-K for additional information.

Additionally, we have established reserves for capital expenditures (“FF&E reserve”) in accordance with our management and certain debt agreements.

3 unchanged sentences

Stock Repurchase Program

In February 2025, our Board 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.

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 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 year ended December 31, 2024, we repurchased approximately 8.0 million shares of our common stock under the 2023 Stock Repurchase Program for a total purchase price of $116 million, and as of December 31, 2024, prior to the termination of the February 2023 Stock Repurchase program, $34 million remained available for stock repurchases.

As of February 20, 2025, no shares of our common stock have been repurchased under the new February 2025 Stock Repurchase Program.

During the year ended December 31, 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 December 31, 2025, $275 million remained available for stock repurchases under the February 2025 Stock Repurchase Program.

Sources and Uses of Our Cash and Cash Equivalents

8 unchanged sentences

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

The $74 million decrease in net cash provided by operating activities for the year ended December 31, 2024 compared to the year ended December 31, 2023 was primarily due to an increase in cash paid for taxes of $8 million, a decrease in interest received of $17 million due to a decrease in average cash balances and timing of receipts from our customers and payments to our vendors and other third parties.

The $31 million decrease in net cash provided by operating activities for the year ended December 31, 2025 compared to the year ended December 31, 2024 was primarily due to a $27 million increase in cash paid for interest due to the timing of payments for certain of our loans, in addition to a decrease in interest received of $10 million due to a decrease in average cash balances coupled with decreases in occupancy at certain of our hotels, including the Royal Palm,

Table of Content s

which suspended operations in May 2025 for a full-scale renovation, partially offset by a decrease of $12 million in cash paid for taxes.

Investing Activities

The $209 million in net cash used in investing activities for the year ended December 31, 2025 was primarily attributable to $296 million of capital expenditures, partially offset by $87 million of net proceeds from the sales of the Hyatt Centric Fisherman’s Wharf and our ownership interest in the joint venture that owns and operates the Capital Hilton.

The $166 million in net cash used in investing activities for the year ended December 31, 2024 was primarily attributable to $227 million of capital expenditures, partially offset by $30 million of net distributions from unconsolidated affiliates primarily related to the sale of the Hilton La Jolla Torrey Pines and $31 million of net proceeds from the sale of the DoubleTree Hotel Spokane City Center.

The $217 million in net cash used in investing activities for the year ended December 31, 2023 was primarily attributable to $296 million of capital expenditures and land acquisitions and a $30 million reduction of restricted cash associated with the derecognition of the Hilton San Francisco hotels, partially offset by $116 million of net proceeds from

the sale of one of our hotels.

Financing Activities

The $365 million in net cash used in financing activities for the year ended December 31, 2025 was primarily attributable to $280 million of dividends paid, the repurchase of approximately 3.5 million shares of our common stock for $45 million and $17 million in financing fees related to the Credit Agreement entered into in September 2025.

The $573 million in net cash used in financing activities for the year ended December 31, 2024 was primarily attributable to $672 million of debt repayments, $512 million of dividends paid and the repurchase of approximately 8.0 million shares of our common stock for $116 million, offset by the issuance of $550 million of 2030 Senior Notes and the $200 million 2024 Term Loan.

The $475 million in net cash used in financing activities for the year ended December 31, 2023 was primarily attributable to the repurchase of approximately 14.6 million shares of our common stock for $180 million, $152 million of dividends paid and $133 million of debt repayments.

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.

9 unchanged sentences

January 15, 2026

As of December 31, 2024, 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.

As of December 31, 2025, our total indebtedness was approximately $3.8 billion, including over $2 billion of our Senior Notes and excluding 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.

3 unchanged sentences

The preparation of our financial statements in accordance with U.S.

GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of our financial statements, the reported amounts of revenues and expenses during the reporting periods and the related disclosures in our historical consolidated financial statements and accompanying footnotes.

Table of Content s

financial statements and accompanying footnotes.

We believe that of our significant accounting policies, which are described in Note 2:

24 unchanged sentences

Changes in estimates and assumptions used, including with respect to the anticipated holding period, in our impairment testing of property and equipment and intangible assets with finite lives could result in future impairment losses, which could be material.

We account for income taxes using the asset and liability method under which deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to the differences between the financial statement carrying amounts of existing assets and liabilities and their respective income tax bases, and for net operating loss, capital loss and tax credit carryforwards.

The deferred tax assets and liabilities are measured using the enacted income tax rates in effect for the year in which those temporary differences are expected to be realized or settled.

Deferred tax assets are recognized only to the extent that it is more likely than not that they will be realized based on consideration of all available evidence, including the future reversals of existing taxable temporary differences, future projected taxable income and tax planning strategies.

Valuation allowances are provided if, based upon the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.

We use a prescribed more-likely-than-not recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return if there is uncertainty in income taxes recognized in the financial statements.

Assumptions and estimates are used to determine the more-likely-than-not designation.

Changes to these assumptions and estimates can lead to an additional income tax expense (benefit), which can materially change our consolidated financial statements.

Consolidation

1 unchanged sentence

If the entity is considered to be a variable interest entity (“VIE”), we use judgment determining whether we are the primary beneficiary, and then consolidate those VIEs for which we have determined we are the primary beneficiary.

If the entity in which we hold an interest does not meet the definition of a VIE, we evaluate whether we have a controlling financial interest through our voting interest in the entity.

If the entity in which we hold an interest does not meet the definition of a VIE,

Table of Content s

we evaluate whether we have a controlling financial interest through our voting interest in the entity.

Changes to judgments used in evaluating our partnerships and other investments could materially affect our consolidated financial statements.

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-K

Item 7. Management’s Discussion and Analysis