What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2026-08-07 compared with 2026-05-01 · 124 added, 66 removed, 239 unchanged (44% 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 our current expectations regarding the performance of our business, our financial results, our liquidity and capital resources, including the use of proceeds from our $800 million senior unsecured delayed draw term loan facility (“2025 Delayed Draw Term Loan”) and our $700 million delayed draw mortgage loan (“Bonnet Creek Mortgage Loan”), which will be secured by the 1,009-room Signia by Hilton Orlando Bonnet Creek and the 502-room Waldorf Astoria Orlando and associated golf course (collectively, the “Bonnet Creek complex”) when drawn upon, 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 government and agency shutdowns), the effects of competition, the effects of future legislation, executive action or regulations, tariffs, the expected completion of anticipated dispositions, including of our Non-Core hotels (as defined below), 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 our current expectations regarding the performance of our business, our financial results, our liquidity and capital resources, including the use of the remaining $600 million under our senior unsecured delayed draw term loan facility (“2025 Delayed Draw Term Loan”) and our $700 million delayed draw loan facility (“Bonnet Creek Mortgage Loan”), which will be secured by the 1,009-room Signia by Hilton Orlando Bonnet Creek and the 502-room Waldorf Astoria Orlando and associated golf course (collectively, the “Bonnet Creek complex”) when drawn upon, 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 another government or agency shutdown), the effects of competition, the effects of future legislation, executive action or regulations, tariffs, the expected completion of anticipated dispositions, including of our Non-Core hotels (as defined below), 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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and dispose of all 12 remaining “Non-Core” hotels, which includes 11 consolidated hotels and one unconsolidated joint venture, to further enhance the value and diversification of our assets throughout the lodging cycle.

and dispose of all nine remaining “Non-Core” hotels, to further enhance the value and diversification of our assets throughout the lodging cycle.

We operate our business through three operating segments, our consolidated Core hotels, consolidated Non-Core hotels and unconsolidated hotels, following the shift in our business strategy to dispose of all Non-Core hotels.

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Additionally, 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 first quarter of 2026, we relied on the performance of our hotels and active asset management to mitigate the effects of current macroeconomic uncertainty.

Recently, we have relied on the performance of our hotels, including benefits from demand from the World Cup and the 250th anniversary celebrations of the U.S., as well as 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 trends, disapproval of U.S.

foreign or domestic policy, or another government or agency 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, and the benefits of divesting of our Non-Core hotels.

foreign or domestic policy, or another government or agency shutdown, we are cautiously optimistic for the remainder of 2026.

This outlook is based on anticipated benefits from transformative renovations at certain of our hotels, including the recently completed comprehensive renovation and repositioning of the Royal Palm South Beach Miami, a Tribute Portfolio Resort (“Royal Palm”), which reopened in July 2026, and the benefits of divesting of our Non-Core hotels.

Key Business Metrics Used by Management

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Three Months Ended

June 30, Six Months Ended

2026 2025 2026 2025

(in millions)

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EBITDA 172 190 299 270

Loss on sale of assets, net 1 —

Gain on sales of assets, net (2)

(2) (1) (1) (1)

Gain on derecognition of assets (1)

— (16) — (32)

Share-based compensation expense 6 5 10 9

Impairment 5 70

Impairment and casualty loss 22 — 27 70

Other items — 5 6 11

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_____________________________________

(1) For the three months ended March 31, 2025, 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 asset on our condensed 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.

(1) For the three and six months ended June 30, 2025, 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 asset on our condensed consolidated balance sheets.

(2) For the three and six months ended June 30, 2026, includes a $4 million gain on the sale of our ownership interest in the Embassy Suites by Hilton Alexandria Old Town included in other gain (loss), net in our condensed consolidated statements of operations.

(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

We present Nareit FFO attributable to stockholders and Nareit FFO per diluted share (defined as set forth below) as non-GAAP measures of our performance.

We calculate funds from (used in) operations (“FFO”) attributable to

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stockholders for a given operating period in accordance with standards established by the National Association of Real Estate Investment Trusts (“Nareit”), as net income (loss) attributable to stockholders (calculated in accordance with U.S.

We calculate funds from (used in) operations (“FFO”) attributable to stockholders for a given operating period in accordance with standards established by the National Association of Real Estate Investment Trusts (“Nareit”), as net income (loss) attributable to stockholders (calculated in accordance with U.S.

GAAP), excluding depreciation and amortization, gains or losses on sales of assets, impairment, and the cumulative effect of changes in accounting principles, plus adjustments for unconsolidated joint ventures.

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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 income (loss) attributable to stockholders to Nareit FFO attributable to stockholders and Adjusted FFO attributable to stockholders:

Three Months Ended March 31,

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

2026 2025 2026 2025

(in millions, except per share amounts)

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Depreciation and amortization expense attributable to noncontrolling interests (1) (1) (2) (2)

Loss on sale of assets, net 1 —

Gain on sales of assets, net (1)

(2) (1) (1) (1)

Gain on derecognition of assets (2)

Impairment 5 70

— (16) — (32)

Impairment loss 20 — 25 70

Equity investment adjustments:

Equity in earnings from investments in affiliates

(1) (2) (2) (2)

Pro rata FFO of investments in affiliates 3 4 3 5

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$ 0.70 $ 0.64 $ 1.15 $ 1.10

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(1) For the three months ended March 31, 2025, 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 asset on our condensed 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.

(1) For the three and six months ended June 30, 2026, includes a $4 million gain on the sale of our ownership interest in the Embassy Suites by Hilton Alexandria Old Town included in other gain (loss), net in our condensed consolidated statements of operations.

(2) For the three and six months ended June 30, 2025, 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 asset on our condensed 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 in November 2025.

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

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Results of Operations

Since January 1, 2025, we disposed of five consolidated Non-Core hotels.

Since January 1, 2025, we disposed of seven consolidated 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

Three Months Ended March 31, Non-Core Hotels

Three Months Ended June 30, Non-Core Hotels

2026 2025 Change Change from Core Hotels Change from Remaining Non-Core Hotels

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Management fees expense 33 31 2 2 — —

Group, transient, contract and other rooms revenue for the three months ended March 31, 2026, as well as the change for each type of rooms revenue compared to the same period in 2025 were as follows:

Three Months Ended March 31, Non-Core Hotels

Six Months Ended June 30, Non-Core Hotels

2026 2025 Change Change from Core Hotels Change from Remaining Non-Core Hotels

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(in millions)

Rooms revenue $ 757 $ 764 $ (7) $ 24 $ 7 $ (38)

Food and beverage revenue 370 362 8 18 (1) (9)

Ancillary hotel revenue 127 131 (4) 1 — (5)

Rooms expense 201 205 (4) 8 1 (13)

Food and beverage expense 247 245 2 11 (1) (8)

Other departmental and support expense 294 303 (9) 8 1 (18)

Other property expense 96 107 (11) — (4) (7)

Management fees expense 63 61 2 3 — (1)

Group, transient, contract and other rooms revenue for the three and six months ended June 30, 2026, as well as the change for each type of rooms revenue compared to the same periods in 2025 were as follows:

Three Months Ended June 30, Non-Core Hotels

2026 2025 Change Change from Core Hotels Change from Remaining Non-Core Hotels

Change from Disposed Hotels

(in millions)

Group rooms revenue $ 129 $ 121 $ 8 $ 9 $ 3 $ (4)

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Rooms revenue $ 401 $ 401 $ — $ 20 $ 3 $ (23)

The changes in hotel revenues and operating expenses for our Core hotels during the three months ended March 31, 2026 compared to the same period in 2025 were primarily attributable to increases at the Bonnet Creek complex, our Hawaii hotels and the Hilton Caribe, partially offset by decreases at our hotels in New Orleans and Miami.

The Waldorf Astoria Orlando and Signia by Hilton Orlando Bonnet Creek benefited from increases in both group and transient demand, resulting in an increase in occupancy of 10.4 percentage points and 6.3 percentage points, respectively, for the three months ended March 31, 2026 compared to the same period in 2025, while ADR increased 3.7% and 5.1%, respectively.

Additionally, the Waldorf Astoria Orlando and the Signia by Hilton Orlando Bonnet Creek experienced a combined increase in food and beverage revenue of 14.8%, or approximately $6 million, for the three

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months ended March 31, 2026 compared to the same period in 2025 as a result of continued benefits derived from the comprehensive renovation and expansion projects at the Bonnet Creek complex completed in early 2024.

Our two hotels in Hawaii experienced an increase in transient demand following the completion of the first phase of guestroom renovations at both hotels.

Occupancy at the Hilton Hawaiian Village Waikiki Beach Resort and the Hilton Waikoloa Village increased 4.7 percentage points and 3.6 percentage points, respectively, for the three months ended March 31, 2026 compared to the same period in 2025.

The Caribe Hilton in Puerto Rico continues to benefit from an increase in group demand resulting in increases in ADR and occupancy of 9.9% and 1.8 percentage points, respectively, for the three months ended March 31, 2026 compared to the same period in 2025.

These increases were offset by decreases in hotel revenues at our hotels in New Orleans and Miami.

The Hilton New Orleans Riverside experienced decreases in both group and transient demand primarily due to the Super Bowl held in New Orleans in 2025, resulting in a decrease in ADR of 13.6% for the three months ended March 31, 2026 compared to the same period in 2025.

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

Six Months Ended June 30, Non-Core Hotels

2026 2025 Change Change from Core Hotels Change from Remaining Non-Core Hotels

Change from Disposed Hotels

(in millions)

Group rooms revenue $ 254 $ 245 $ 9 $ 11 $ 5 $ (7)

Transient rooms revenue 449 464 (15) 9 — (24)

Contract rooms revenue 36 38 (2) 4 1 (7)

Other rooms revenue 18 17 1 — 1 —

Rooms revenue $ 757 $ 764 $ (7) $ 24 $ 7 $ (38)

The changes in hotel revenues and operating expenses for our Core hotels during the three and six months ended June 30, 2026 compared to the same periods in 2025 were primarily attributable to increases at the Hilton Hawaiian Village Waikiki Beach Resort, Bonnet Creek complex, Casa Marina Key West, Curio Collection, New York Hilton Midtown and the Hilton Santa Barbara Beachfront Resort in Southern California, partially offset by decreases at our hotels in Miami and New Orleans.

The Hilton Hawaiian Village Waikiki Beach Resort benefited from the completion of the final phase of guestroom renovations at the Rainbow Tower and experienced an increase in food and beverage revenue of 29%, or approximately $6 million, and 20%, or approximately $8 million, for the three and six months ended June 30, 2026, respectively, compared to the same periods in 2025.

Additionally, the Hilton Hawaiian Village Waikiki Beach Resort benefited from an over 13% increase in group demand for the three months ended June 30, 2026 and an approximately 10% increase in transient demand for both the three and six months ended June 30, 2026, resulting in an increase in occupancy of 12.0 percentage points and 8.3 percentage points, respectively, compared to the same periods in 2025.

The Waldorf Astoria Orlando benefited from a 40% increase in transient demand, resulting in increases in occupancy and ADR of 9.1 percentage points and 2.2%, respectively, for the three months ended June 30, 2026, while benefiting from increases in both group and transient demand for the six months ended June 30, 2026, resulting in increases in occupancy and ADR of 9.7 percentage points and 3.1%, respectively, compared to the same periods in 2025.

The Signia by Hilton Orlando Bonnet Creek benefited from an approximately 20% increase in group demand for both the three and six months ended June 30, 2026, resulting in increases in occupancy and ADR of 6.0 percentage points and 3.1%, respectively, for the three months ended June 30, 2026 and 6.1 percentage points and 4.2%, respectively, for the six months ended June 30, 2026, compared to the same periods in 2025.

Additionally, the Waldorf Astoria Orlando and the Signia by Hilton Orlando Bonnet Creek experienced a combined increase in food and beverage revenue of 10%, or over $3 million, and 13%, or approximately $9 million for the three and six months ended June 30, 2026, respectively, compared to the same periods in 2025 as a result of continued benefits derived from the comprehensive renovation and expansion projects at the Bonnet Creek complex completed in early 2024.

The Casa Marina Key West, Curio Collection, benefited from increases in group demand of 44% and 14% for the three and six months ended June 30, 2026, respectively, and increases in transient demand of 10% and 12%, respectively, compared to the same periods in 2025, resulting in increases in occupancy of 12.3 percentage points and 8.7 percentage points, respectively, as well as increases in food and beverage revenue of 36% and 23%, respectively.

The New York Hilton Midtown benefited from an increase in transient demand for the three months ended June 30, 2026, resulting in an increase in ADR of 2.2%, while benefiting from a 10% increase in group demand for the six months ended June 30, 2026, resulting in an increase in occupancy of 2.9 percentage points, compared to the same periods in 2025.

Food and beverage revenue also increased by 15% and 10% for the three and six months ended June 30, 2026, respectively, compared to the same periods in 2025.

The Hilton Santa Barbara Beachfront Resort benefited from increases in group demand of 36% and 24% for the three and six months ended June 30, 2026, respectively, and increases in transient demand of 20% and 21%, respectively, compared to the same periods in 2025, resulting in increases in occupancy of 17.7 percentage points and 15.2 percentage points, respectively, in addition to increases in ADR of 1.4% and 2.2%, respectively.

The hotel also experienced an increase in food and beverage revenue of 20% and 22% for the three and six months ended June 30, 2026, respectively, compared to the same periods in 2025.

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These increases were offset by decreases in hotel revenues at our hotels in Miami and New Orleans.

The Royal Palm in Miami suspended operations for a transformative renovation that began in May 2025 and reopened in July 2026.

The Hilton New Orleans Riverside experienced decreases in group and transient demand for the six months ended June 30, 2026, primarily driven by the Super Bowl that was held in February 2025, with ADR decreasing 8.7% compared to the same period in 2025.

Impairment and casualty loss

During the six months ended June 30, 2026, we recognized impairment losses of approximately $5 million related to the Hilton Seattle Airport & Conference Center, which was sold in April 2026, and approximately $2 million related to the Hilton Short Hills, which was sold in July 2026, as the respective gross proceeds were less than the net book value of each Non-Core hotel.

Additionally, during the three months ended June 30, 2026, we recognized an impairment loss of approximately $18 million related to two of our Non-Core hotels, due to our inability to recover the carrying value of the assets.

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, as the gross proceeds were less than the net book value of the Non-Core hotel.

Refer to Note 7:

“Fair Value Measurements” in our unaudited condensed consolidated financial statements included elsewhere within this Quarterly Report on Form 10-Q for additional information.

Depreciation and amortization

Depreciation expense for the three and six months ended June 30, 2025 includes 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 and was completed in July 2026.

Corporate general and administrative

Three Months Ended

2026 2025 Percent Change

(in millions)

June 30, Six Months Ended

2026 2025 Percent Change 2026 2025 Percent Change

(in millions) (in millions)

General and administrative expenses $ 13 $ 13 — % $ 26 $ 26 — %

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Total corporate general and administrative $ 20 $ 19 5.3 % $ 38 $ 37 2.7 %

During the three months ended March 31, 2026, we recognized an impairment loss of approximately $5 million related to the Hilton Seattle Airport & Conference Center, which was subsequently sold in April 2026, as the gross proceeds of $18 million were less than the net book value of the hotel.

During the three months ended March 31, 2025, we recognized an impairment loss of approximately $70 million related the Hyatt Centric Fisherman’s Wharf, which was sold in May 2025, as the gross proceeds were less than the net book value of the hotel.

Refer to Note 7:

“Fair Value Measurements” in our unaudited condensed consolidated financial statements included elsewhere within this Quarterly Report on Form 10-Q for additional information.

Gain on derecognition of assets

During the three months ended March 31, 2025, we recognized a gain of $16 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 condensed 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.

During the three and six months ended June 30, 2025, we recognized a gain of $16 million and $32 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.

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 in November 2025.

Non-operating Income and Expenses

Interest income

Interest income decreased $2 million during the three months ended March 31, 2026 compared to the same period in 2025 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 income decreased $2 million during the six months ended June 30, 2026 compared to the same period in 2025 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.

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Interest expense

Interest expense associated with our debt for the three months ended March 31, 2026 and 2025 were as follows:

Interest expense associated with our debt for the three and six months ended June 30, 2026 and 2025 were as follows:

Three Months Ended

2026 2025 Percent Change

(in millions)

June 30, Six Months Ended

2026 2025 Percent Change 2026 2025 Percent Change

(in millions) (in millions)

HHV Mortgage Loan (1)

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Other mortgage loans (2)

4 5 (20.0) 8 8 —

2024 Term Loan (4)

2025 Delayed-Draw Term Loan (2)

1 — 100.0 1 — 100.0

2028 Senior Notes (5)

10 10 — 21 21 —

2029 Senior Notes (5)

9 9 — 18 18 —

2030 Senior Notes (5)

9 9 — 19 19 —

Other 1 2 (50.0) 1 4 (75.0)

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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) As of March 31, 2026, we had $1 billion of available capacity under our senior unsecured revolving credit facility (“Revolver”).

In April 2026, we drew $50 million under the Revolver.

(2) Our $800 million 2025 Delayed Draw Term Loan was incurred in September 2025.

In June 2026, we drew $200 million from our 2025 Delayed Draw Term Loan to fully repay the $120 million mortgage loan secured by the Hyatt Regency Boston, which was scheduled to mature on July 1, 2026, with the remaining proceeds to be used for general corporate purposes.

(3) As of June 30, 2026, we had $1 billion of available capacity under our senior unsecured revolving credit facility (“Revolver”).

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

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Interest expense associated with hotels in receivership

For the three months ended March 31, 2025, interest expense of $16 million 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.

During the three and six months ended June 30, 2025, interest expense of $16 million and $32 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 in November 2025.

Other gain (loss), net

During the three and six months ended June 30, 2026, we recognized a net gain of $9 million for both periods primarily related to the proceeds of $4 million from the sale of our ownership interest in the unconsolidated joint venture that owns and operates the Embassy Suites by Hilton Alexandria Old Town and the $6 million payment received associated with the ground lease termination of the Embassy Suites by Hilton Austin Downtown South Congress.

Income tax expense

Income tax expense increased $4 million during both the three and six months ended June 30, 2026, compared to the same periods in 2025, primarily related to an increase in the year-to-date ordinary income that our estimated annual effective tax rate is applied to.

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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 March 31, 2026, we had total cash and cash equivalents of $156 million and $34 million of restricted cash.

As of June 30, 2026, we had total cash and cash equivalents of $264 million and $38 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 nearly $1 billion available under our Revolver, our $800 million undrawn 2025 Delayed Draw Term Loan and our new undrawn $700 million Bonnet Creek Mortgage Loan, in addition to the $156 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 intend to draw upon the 2025 Delayed Draw Term Loan and the Bonnet Creek Mortgage Loan to fund the repayment of two mortgage loans totaling approximately $1.4 billion and maturing in the second half of 2026 and further pay down our debt with proceeds from the sales of our Non-Core hotels.

Following the repayment of these mortgage loans, we have no significant maturities until the fourth quarter of 2028.

With $1 billion available under our Revolver, $600 million available under our $800 million 2025 Delayed Draw Term Loan and our undrawn $700 million Bonnet Creek Mortgage Loan, in addition to the $264 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 intend to further draw upon the 2025 Delayed Draw Term Loan as well as the Bonnet Creek Mortgage Loan during the third quarter to fund the repayment of the $1.3 billion HHV Mortgage Loan maturing in the fourth quarter of 2026.

Following the repayment of the HHV Mortgage Loan, we have no significant maturities until the fourth quarter of 2028.

Refer to Note 6:

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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.

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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 managers 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 February 2026, we declared a first quarter dividend of $0.25 per share that was paid on April 15, 2026 to stockholders of record as of March 31, 2026.

In addition, we declared a second quarter dividend of $0.25 per share in April 2026 to be paid on July 15, 2026 to stockholders of record as of June 30, 2026.

In April 2026, we declared a second quarter dividend of $0.25 per share that was paid on July 15, 2026 to stockholders of record as of June 30, 2026.

In addition, we declared a third quarter dividend of $0.25 per share in July 2026 to be paid on October 15, 2026 to stockholders of record as of September 30, 2026.

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.

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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.

As of March 31, 2026, $275 million remained available for stock repurchases.

The timing of any future stock repurchases and the number of shares to be repurchased will depend upon prevailing market conditions and

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other factors, and we may suspend the repurchase program at any time.

As of June 30, 2026, $275 million remained available for stock repurchases.

Sources and Uses of Our Cash and Cash Equivalents

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

Three Months Ended March 31,

Six Months Ended June 30,

2026 2025 Percent Change

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

The $27 million decrease in net cash provided by operating activities for the three months ended March 31, 2026 compared to the three months ended March 31, 2025 was primarily due to decreases in occupancy at certain of our hotels, including the Royal Palm, which suspended operations in May 2025 for a full-scale renovation, and timing of receipts from our customers.

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The $6 million increase in net cash provided by operating activities for the six months ended June 30, 2026 compared to the six months ended June 30, 2025 was primarily due to increases in occupancy across a majority of our portfolio and timing of interest paid, offset by timing of receipts from our customers and payments to our vendors and other third parties, as well as the loss of cash from operations from the Royal Palm, which suspended operations in May 2025 for a full-scale renovation and reopened in July 2026.

Investing Activities

The $72 million in net cash used in investing activities for the three months ended March 31, 2026 was attributable to $83 million of capital expenditures, partially offset by $11 million of net proceeds from the sale of the Hilton Checkers Los Angeles.

The $77 million in net cash used in investing activities for the three months ended March 31, 2025 was attributable to capital expenditures.

The $116 million in net cash used in investing activities for the six months ended June 30, 2026 was attributable to $147 million of capital expenditures, partially offset by $31 million of net proceeds from the disposal of the Hilton Checkers Los Angeles, Hilton Seattle Airport & Conference Center and Embassy Suites by Hilton Alexandria Old Town.

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.

Financing Activities

The $61 million in net cash used in financing activities for the three months ended March 31, 2026 was primarily attributable to $50 million of dividends paid.

The $189 million in net cash used in financing activities for the three months ended March 31, 2025 was primarily attributable to $131 million of dividends paid and the repurchase of approximately 3.5 million shares of our common stock for $45 million.

The $46 million in net cash used in financing activities for the six months ended June 30, 2026 was primarily attributable to $174 million of mortgage loan and credit facility repayments, including the mortgage loan secured by the Hyatt Regency Boston, and $100 million of dividends paid, partially offset by $250 million drawn from our credit facilities.

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.

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.

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We declared the following dividends to holders of our common stock during 2026:

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June 30, 2026 July 15, 2026 $ 0.25

As of March 31, 2026, 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.

September 30, 2026 October 15, 2026 $ 0.25

As of June 30, 2026, our total indebtedness was approximately $3.9 billion, including over $2 billion of our Senior Notes, and excluding our share of debt from investments in affiliates.

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

Refer to Note 6:

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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