Park Hotels & Resorts Inc. 10-Q

Item 1. Financial Statements. PARK HOTELS & RESORTS INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in millions, except share and per share data) June 30, 2026 December 31, 2025 (unaudited) ASSETS Property and equipment, net $ 6,908 $ 6,955 Assets held for sale, net 13 14 Intangibles, net 40 41 Cash and cash equivalents 264 232 Restricted cash 38 32 Accounts receivable, net of allowance for doubtful accounts of $ 2 and $ 2 151 116 Prepaid expenses 54 60 Other assets 78 80 Operating lease right-of-use assets 156 170 TOTAL ASSETS (variable interest entities – $ 199 and $ 207 ) $ 7,702 $ 7,700 LIABILITIES AND EQUITY Liabilities Debt $ 3,915 $ 3,838 Accounts payable and accrued expenses 226 198 Dividends payable 51 56 Due to hotel managers 106 134 Other liabilities 184 189 Operating lease liabilities 187 209 Total liabilities (variable interest entities – $ 194 and $ 198 ) 4,669 4,624 Commitments and contingencies – refer to Note 12 Stockholders’ Equity Common stock, par value $ 0.01 per share, 6,000,000,000 shares authorized, 202,614,273 shares issued and 201,349,455 shares outstanding as of June 30, 2026 and 200,938,658 shares issued and 199,901,086 shares outstanding as of December 31, 2025 2 2 Additional paid-in capital 4,028 4,031 Accumulated deficit ( 940 ) ( 902 ) Total stockholders’ equity 3,090 3,131 Noncontrolling interests ( 57 ) ( 55 ) Total equity 3,033 3,076 TOTAL LIABILITIES AND EQUITY $ 7,702 $ 7,700 Refer to the notes to the unaudited condensed consolidated financial statements. 3 Table of Content s PARK HOTELS & RESORTS INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited, in millions, except per share data) Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Revenues Rooms $ 401 $ 401 $ 757 $ 764 Food and beverage 188 180 370 362 Ancillary hotel 67 68 127 131 Other 24 23 48 45 Total revenues 680 672 1,302 1,302 Operating expenses Rooms 104 105 201 205 Food and beverage 125 122 247 245 Other departmental and support 149 152 294 303 Other property 42 50 96 107 Management fees 33 31 63 61 Impairment and casualty loss 22 — 27 70 Depreciation and amortization 66 122 130 191 Corporate general and administrative 20 19 38 37 Other 22 23 46 44 Total expenses 583 624 1,142 1,263 (Loss) gain on sales of assets, net ( 2 ) 1 ( 3 ) 1 Gain on derecognition of assets — 16 — 32 Operating income 95 65 157 72 Interest income 2 2 3 5 Interest expense ( 52 ) ( 53 ) ( 103 ) ( 105 ) Interest expense associated with hotels in receivership — ( 16 ) — ( 32 ) Equity in earnings from investments in affiliates 1 2 2 2 Other gain (loss), net 9 ( 1 ) 9 1 Income (loss) before income taxes 55 ( 1 ) 68 ( 57 ) Income tax expense ( 5 ) ( 1 ) ( 6 ) ( 2 ) Net income (loss) 50 ( 2 ) 62 ( 59 ) Net income attributable to noncontrolling interests ( 3 ) ( 3 ) ( 4 ) ( 3 ) Net income (loss) attributable to stockholders $ 47 $ ( 5 ) $ 58 $ ( 62 ) Earnings (loss) per share: Earnings (loss) per share – Basic $ 0.24 $ ( 0.02 ) $ 0.29 $ ( 0.31 ) Earnings (loss) per share – Diluted $ 0.24 $ ( 0.02 ) $ 0.29 $ ( 0.31 ) Weighted average shares outstanding – Basic 200 199 200 199 Weighted average shares outstanding – Diluted 200 199 200 199 Refer to the notes to the unaudited condensed consolidated financial statements. 4 Table of Content s PARK HOTELS & RESORTS INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited, in millions) Six Months Ended June 30, 2026 2025 Operating Activities: Net income (loss) $ 62 $ ( 59 ) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 130 191 Loss (gain) on sales of assets, net 3 ( 1 ) Gain on derecognition of assets — ( 32 ) Impairment loss 25 70 Equity in earnings from investments in affiliates ( 2 ) ( 2 ) Other (gain) loss, net ( 3 ) 1 Share-based compensation expense 10 9 Amortization of deferred financing costs 4 4 Distributions from unconsolidated affiliates 5 1 Deferred income taxes 3 — Changes in operating assets and liabilities ( 37 ) 12 Net cash provided by operating activities 200 194 Investing Activities: Capital expenditures for property and equipment ( 147 ) ( 120 ) Proceeds from asset dispositions, net 28 75 Proceeds from the sale of investments in affiliates, net 3 — Net cash used in investing activities ( 116 ) ( 45 ) Financing Activities: Borrowings from credit facilities 250 — Repayments of credit facilities ( 50 ) — Repayments of mortgage debt ( 124 ) ( 4 ) Debt issuance costs ( 7 ) — Dividends paid ( 100 ) ( 181 ) Distributions to noncontrolling interests ( 6 ) ( 8 ) Tax withholdings on share-based compensation ( 9 ) ( 4 ) Repurchase of common stock — ( 45 ) Net cash used in financing activities ( 46 ) ( 242 ) Net increase (decrease) in cash and cash equivalents and restricted cash 38 ( 93 ) Cash and cash equivalents and restricted cash, beginning of period 264 440 Cash and cash equivalents and restricted cash, end of period $ 302 $ 347 Supplemental Disclosures Non-cash investing and financing activities: Accrued capital expenditures $ 25 $ 30 Dividends declared but unpaid 50 50 Refer to the notes to the unaudited condensed consolidated financial statements. 5 Table of Content s PARK HOTELS & RESORTS INC. CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (unaudited, in millions) Common Stock Additional Paid-in Capital Accumulated Deficit Non- controlling Interests Total Shares Amount Balance as of December 31, 2025 200 $ 2 $ 4,031 $ ( 902 ) $ ( 55 ) $ 3,076 Share-based compensation, net 1 — ( 8 ) 4 — ( 4 ) Net income — — — 11 1 12 Dividends and dividend equivalents (1) — — — ( 50 ) — ( 50 ) Distributions to noncontrolling interests — — — — ( 1 ) ( 1 ) Balance as of March 31, 2026 201 2 4,023 ( 937 ) ( 55 ) 3,033 Share-based compensation, net — — 5 — — 5 Net income — — — 47 3 50 Dividends and dividend equivalents (1) — — — ( 50 ) — ( 50 ) Distributions to noncontrolling interests — — — — ( 5 ) ( 5 ) Balance as of June 30, 2026 201 $ 2 $ 4,028 $ ( 940 ) $ ( 57 ) $ 3,033 Common Stock Additional Paid-in Capital Accumulated Deficit Non- controlling Interests Total Shares Amount Balance as of December 31, 2024 203 $ 2 $ 4,063 $ ( 420 ) $ ( 51 ) $ 3,594 Share-based compensation, net 1 — ( 1 ) 1 — — Net loss — — — ( 57 ) — ( 57 ) Dividends and dividend equivalents (1) — — — ( 49 ) — ( 49 ) Distributions to noncontrolling interests — — — — ( 7 ) ( 7 ) Repurchase of common stock ( 4 ) — ( 45 ) — — ( 45 ) Balance as of March 31, 2025 200 2 4,017 ( 525 ) ( 58 ) 3,436 Share-based compensation, net — — 5 — — 5 Net (loss) income — — — ( 5 ) 3 ( 2 ) Dividends and dividend equivalents (1) — — — ( 50 ) — ( 50 ) Distributions to noncontrolling interests — — — — ( 1 ) ( 1 ) Balance as of June 30, 2025 200 $ 2 $ 4,022 $ ( 580 ) $ ( 56 ) $ 3,388 ___________________________________ (1) Dividends declared per common share were $ 0.25 for each of the three months ended March 31, 2026, June 30, 2026, March 31, 2025 and June 30, 2025. Refer to the notes to the unaudited condensed consolidated financial statements. 6 Table of Content s PARK HOTELS & RESORTS INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) Note 1: Organization Park Hotels & Resorts Inc. (“we,” “us,” “our” or the “Company” and, exclusive of any subsidiaries, “Park Parent”) is a Delaware corporation that owns a portfolio of premium-branded hotels and resorts primarily located in prime city center and resort locations. On January 3, 2017, Hilton Worldwide Holdings Inc. (“Hilton”) completed the spin-off of a portfolio of premium hotels and resorts that established Park Hotels & Resorts Inc. as an independent, publicly traded company. We are a real estate investment trust (“REIT”) for United States (“U.S.”) federal income tax purposes. We have been organized and operated, and we expect to continue to be organized and operate, in a manner to qualify as a REIT. To qualify as a REIT, we must satisfy requirements related to, among other things, the real estate qualification of sources of our income, the real estate composition and values of our assets, the amounts we distribute to our stockholders annually and the diversity of ownership of our stock. From the date of our spin-off from Hilton, Park Intermediate Holdings LLC (our “Operating Company”), directly or indirectly, has held all our assets and has conducted all of our operations. We are structured as a traditional umbrella partnership REIT (“UPREIT”). Park Parent is the managing member of our Operating Company and PK Domestic REIT Inc., a direct subsidiary of Park Parent, is a member of our Operating Company. We may, in the future, issue interests in (or from) our Operating Company in connection with acquiring hotels, financings, issuance of equity compensation or other purposes. Our strategic focus is on our “Core” portfolio, which includes 20 of our consolidated hotels and one unconsolidated joint venture and consists primarily of hotels and resorts that cater to both group and leisure demand. Our remaining hotels are considered “Non-Core.” As of June 30, 2026, our remaining Non-Core portfolio included 10 consolidated hotels, which included one hotel sold in July 2026. The Company intends to divest of all remaining Non-Core hotels from its portfolio. Note 2: Basis of Presentation and Summary of Significant Accounting Policies Basis of Presentation Principles of Consolidation The unaudited condensed consolidated financial statements reflect our financial position, results of operations and cash flows, in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”). We have condensed or omitted certain information and footnote disclosures normally included in financial statements presented in accordance with U.S. GAAP. In our opinion, the accompanying unaudited condensed consolidated financial statements reflect all adjustments, including normal recurring items, considered necessary for a fair presentation of the interim periods. All significant intercompany transactions and balances within the financial statements have been eliminated. These financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 2025 included in our Annual Report on Form 10-K, filed with the Securities and Exchange Commission (“SEC”) on February 20, 2026. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Interim results are not necessarily indicative of full year performance. 7 Table of Content s Summary of Significant Accounting Policies Our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on February 20, 2026, contains a discussion of significant accounting policies. There have been no significant changes to our significant accounting policies since December 31, 2025. Recently Issued Accounting Pronouncements Accounting Standards Not Yet Adopted In November 2024, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) No. 2024-03 (“ASU 2024-03”), Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40) , which adds guidance on providing qualitative and quantitative disclosures about certain costs and expenses. ASU 2024-03 may be adopted on either a prospective or retrospective basis, with early adoption permitted, but we expect to adopt the ASU on a prospective basis when the requirements become effective for the year ended December 31, 2027. We are currently evaluating the effect that ASU 2024-03 will have on our consolidated financial statements. In May 2026, the Financial Accounting Standards Board issued ASU No. 2026-02 (“ASU 2026-02”), Environmental Credits and Environmental Credit Obligations (Topic 818) , which adds guidance for the recognition, measurement, presentation and disclosure of assets, liabilities and expenses related to environmental credits and environmental credit obligations. ASU 2026-02 is required to be adopted on a retrospective basis. Although early adoption is permitted, we expect to adopt the ASU when the requirements become effective on January 1, 2028. We are currently evaluating the effect that ASU 2026-02 will have on our consolidated financial statements. Note 3: Dispositions and Assets Held for Sale During the six months ended June 30, 2026, we sold the two consolidated Non-Core hotels listed in the table below and received total gross proceeds of approximately $ 31 million. We recognized a net loss of approximately $ 3 million, which is included in (loss) gain on sales of assets, net in our condensed consolidated statements of operations. Hotel Location Month Sold Hilton Checkers Los Angeles Los Angeles, California January 2026 Hilton Seattle Airport & Conference Center Seattle, Washington April 2026 In May 2026, we sold our ownership interest in the unconsolidated joint venture that owns and operates the Embassy Suites by Hilton Alexandria Old Town for gross proceeds of $ 29 million, which was reduced by $ 25 million for our share of the mortgage debt in the joint venture. We recognized a net gain of approximately $ 4 million, which is included in other gain (loss), net in our condensed consolidated statements of operations. Additionally, in June 2026, the ground lease for the Embassy Suites by Hilton Austin Downtown South Congress was terminated pursuant to an agreement, and the property reverted to the ground lessor. We received an early termination fee of approximately $ 6 million, which is included in other gain (loss), net in our condensed consolidated statements of operations . In addition, we sold all personal property and business assets of the hotel to the ground lessor and recognized a loss of approximately $ 1 million, which is included in (loss) gain on sales of assets, net in our condensed consolidated statements of operations. In May 2025, we sold the Hyatt Centric Fisherman’s Wharf for gross proceeds of $ 80 million. We recognized a net gain of approximately $ 1 million, which is included in (loss) gain on sales of assets, net in our condensed consolidated statements of operations. Assets Held for Sale In June 2026, we entered into a definitive agreement to sell the Hilton Short Hills, one of our Non-Core hotels, which was subsequently sold in July 2026 for gross proceeds of $ 12 million. 8 Table of Content s Assets held for sale related to this hotel were as follows as of June 30, 2026: (in millions) Assets: Property and equipment, net $ 11 Accounts receivable, net of allowance for doubtful accounts 1 Prepaid expenses 1 Total Assets Held for Sale $ 13 Liabilities held for sale related to this hotel were approximately $ 1 million as of June 30, 2026, which is included in other liabilities in our condensed consolidated balance sheets. Note 4: Property and Equipment Property and equipment were: June 30, 2026 (1) December 31, 2025 (1) (in millions) Land $ 2,915 $ 2,918 Buildings and leasehold improvements 5,497 5,487 Furniture and equipment 996 931 Construction-in-progress 237 249 9,645 9,585 Accumulated depreciation ( 2,737 ) ( 2,630 ) $ 6,908 $ 6,955 _____________________________________ (1) Excludes $ 11 million and $ 13 million of property and equipment, net, classified as held for sale as of June 30, 2026 and December 31, 2025, respectively. Depreciation of property and equipment was $ 65 million and $ 122 million during the three months ended June 30, 2026 and 2025, respectively, and $ 129 million and $ 191 million during the six months ended June 30, 2026 and 2025, respectively. 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. Note 5: Consolidated Variable Interest Entities (“VIEs”) and Investments in Affiliates Consolidated VIEs We consolidate VIEs that own two hotels. We are the primary beneficiary of these VIEs as we have the power to direct the activities that most significantly affect their economic performance. Additionally, we have the obligation to absorb their losses and the right to receive benefits that could be significant to them. The assets of our VIEs are only available to settle the obligations of these entities. Our condensed consolidated balance sheets include the following assets and liabilities of these entities: 9 Table of Content s June 30, 2026 December 31, 2025 (in millions) Property and equipment, net $ 179 $ 182 Cash and cash equivalents (1) 10 16 Restricted cash 4 3 Accounts receivable, net 4 3 Prepaid expenses 2 3 Debt 181 183 Accounts payable and accrued expenses 9 9 Due to hotel manager — 2 Other liabilities 4 4 _____________________________________ (1) As of December 31, 2025, included $ 7 million of cash held in a VIE related to a hotel sold in December 2024, which had not yet been distributed. Unconsolidated Entities One of our hotels is owned by an unconsolidated joint venture in which we hold an interest and is accounted for using the equity method. This hotel had total debt of approximately $ 525 million as of both June 30, 2026 and December 31, 2025. In May 2026, we sold our ownership interest in the unconsolidated joint venture that owns and operates the Embassy Suites by Hilton Alexandria Old Town, which had total debt of approximately $ 48 million as of December 31, 2025. Substantially all the debt is secured solely by the affiliates’ assets or is guaranteed by other partners without recourse to us. Note 6: Debt Debt balances and associated interest rates as of June 30, 2026 were: Principal balance as of Interest Rate at June 30, 2026 Maturity Date Extended Maturity Date (1) June 30, 2026 December 31, 2025 (in millions) HHV Mortgage Loan (2) 4.20 % November 2026 None $ 1,275 $ 1,275 Other mortgage loans (3) Average rate of 4.48 % 2026 to 2027 (4) None 231 355 Bonnet Creek Mortgage Loan SOFR + 2.25 % April 2029 April 2031 — — 2024 Term Loan SOFR + 2.20 % (5) May 2027 None 200 200 Revolver (6) SOFR + 2.25 % September 2029 September 2030 — — 2025 Delayed Draw Term Loan (3) SOFR + 2.20 % (3) January 2030 January 2031 200 — 2028 Senior Notes (7) 5.88 % October 2028 None 725 725 2029 Senior Notes (7) 4.88 % May 2029 None 750 750 2030 Senior Notes (7) 7.00 % February 2030 None 550 550 Finance lease obligations 6.88 % 2027 to 2030 None 1 1 3,932 3,856 Less: unamortized deferred financing costs and discount ( 17 ) ( 18 ) $ 3,915 $ 3,838 _____________________________________ (1) The extension options are exercisable subject to compliance with certain covenants. (2) In October 2016, we entered into a $ 1.275 billion CMBS loan secured by the Hilton Hawaiian Village Waikiki Beach Resort (“HHV Mortgage Loan”). (3) Our $ 800 million senior unsecured delayed draw term loan facility (“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. As of June 30, 2026, our all-in interest rate on the 2025 Delayed Draw Term Loan was 5.85 %. 10 Table of Content s (4) The mortgage loan for Hilton Denver City Center matures in 2042 but became callable by the lender in August 2022 with six months notice. As of June 30, 2026, we had not received notice from the lender. (5) Our $ 200 million senior unsecured term loan (“2024 Term Loan”) was incurred in May 2024. As of June 30, 2026, our all-in interest rate was 5.85 %. (6) Our senior unsecured revolving credit facility (“Revolver”) permits one or more standby letters of credit, up to a maximum aggregate outstanding balance of $ 50 million, to be issued on behalf of us. As of June 30, 2026, we had $ 1 billion of available capacity under our Revolver and no outstanding letters of credit. (7) Our Operating Company, PK Domestic Property LLC, an indirect subsidiary of the Company, and PK Finance Co-Issuer Inc. 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. Mortgage Loans Bonnet Creek Mortgage Loan In April 2026, G/B/H Four Star, LLC, G/B/H Condo Owner, LLC, G/B/H Golf Course, LLC and Bonnet Creek Hilton Lessee LLC, each indirect subsidiaries of the Company, entered into a loan agreement, which provides for the ability to draw between $ 650 million and $ 700 million in a single disbursement no later than September 30, 2026 and matures on April 30, 2029, with an option to extend for two consecutive one-year periods (“Bonnet Creek Mortgage Loan”). When drawn upon, the Bonnet Creek Mortgage Loan 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. The outstanding principal balance of the Bonnet Creek Mortgage Loan will bear interest based upon the forward-looking term rate based on the one-month term secured overnight financing rate (“SOFR”) plus 2.25 %. We are also subject to a 0.25 % ticking fee on the full loan commitment amount of $ 700 million until the Bonnet Creek Mortgage Loan is drawn upon. We may voluntarily repay any portion of the outstanding principal balance of the Bonnet Creek Mortgage Loan at any time, subject to certain minimum amounts and prepayment or other fees. Our Operating Company has guaranteed the payment of certain losses of the administrative agent and the lenders resulting from certain specified bad acts by the Company’s indirect subsidiaries and/or their affiliates; however, the Operating Company has not otherwise guaranteed the repayment of the Bonnet Creek Mortgage Loan. The loan agreement also contains certain customary covenants, such as covenants, among other things, that require the Operating Company to maintain a minimum net worth and liquid assets. During the three and six months ended June 30, 2026, we capitalized $ 7 million of financing fees related to the Bonnet Creek Mortgage Loan, which we will begin amortizing when drawn upon. Debt Maturities The contractual maturities of our debt, assuming the exercise of all extensions that are exercisable solely at our option, as of June 30, 2026 were: Year (in millions) 2026 $ 1,477 2027 230 2028 725 2029 750 2030 550 Thereafter 200 $ 3,932 11 Table of Content s Note 7: Fair Value Measurements We did not elect the fair value measurement option for our financial assets or liabilities. The fair values of our other financial instruments not included in the table below are estimated to be equal to their carrying amounts. The fair value of our debt and the hierarchy level we used to estimate fair values are shown below: June 30, 2026 December 31, 2025 Hierarchy Level Carrying Amount Fair Value Carrying Amount Fair Value (in millions) Liabilities: HHV Mortgage Loan 3 $ 1,275 $ 1,263 $ 1,275 $ 1,248 Other mortgage loans 3 231 229 355 351 2024 Term Loan 3 200 198 200 200 2025 Delayed Draw Term Loan 3 200 183 — — 2028 Senior Notes 1 725 725 725 725 2029 Senior Notes 1 750 734 750 732 2030 Senior Notes 1 550 564 550 564 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. The estimated fair value of the assets that were measured on a nonrecurring basis, categorized by the level of inputs used in the valuation of the assets, are shown below: June 30, 2026 (1) 2025 (2) (in millions) Property and equipment Level 2 $ 29 $ — Level 3 51 74 Total $ 80 $ 74 _____________________________________ (1) We determined fair value of certain assets based upon either a contracted sales price (Level 2) or, for assets held for sale, based upon contracted sales price less costs to sell (Level 2) as of June 30, 2026. Where the aforementioned inputs were not available, we estimated fair value using a discounted cash flow analysis, with an estimated stabilized growth rate of 3.0 %, discounted cash flow term of 10 years, terminal capitalization rate of 7.5 % and discount rate of 11.0 % (Level 3). The discount and terminal capitalization rates used for the fair values of these assets reflect the risk profile of the markets where the properties are located. (2) We estimated the fair value of the asset using a discounted cash flow analysis, with an estimated stabilized growth rate of 3.0 %, a discounted cash flow term of 10 years, terminal capitalization rate of 7.3 % and a discount rate of 10.0 % (Level 3). The discount and terminal capitalization rates used for the fair value of the asset reflect the risk profile of the market where the property is located. Note 8: Income Taxes We are a REIT for U.S. federal income tax purposes. We have been organized and operated, and we expect to continue to be organized and operate in a manner to qualify as a REIT. To qualify as a REIT, we must satisfy requirements related to, among other things, the real estate qualification of sources of our income, the real estate composition and values of our assets, the amounts we distribute to our stockholders annually and the diversity of ownership of our stock. To the 12 Table of Content s extent we continue to remain qualified as a REIT, we generally will not be subject to U.S. federal (and state) income tax on taxable income generated by our REIT activities that we distribute annually to our stockholders. Accordingly, no provision for U.S. federal income taxes has been included in our accompanying condensed consolidated financial statements for the six months ended June 30, 2026 and 2025 related to our REIT activities. Our taxable REIT subsidiaries (“TRSs”) are generally subject to U.S. federal, state and local, and foreign income taxes (as applicable). During the three and six months ended June 30, 2026, we recognized income tax expense of $ 5 million and $ 6 million, respectively, which was primarily related to taxable income from our TRSs. Note 9: Share-Based Compensation We issue equity-based awards to our employees pursuant to the 2017 Omnibus Incentive Plan (the “2017 Employee Plan”) and our non-employee directors pursuant to the 2017 Stock Plan for Non-Employee Directors (the “2017 Director Plan”), both of which are amended and restated from time to time. The 2017 Employee Plan provides that a maximum of 14,070,000 shares of our common stock may be issued, and as of June 30, 2026, 2,916,992 shares of common stock remain available for future issuance. The 2017 Director Plan provides that a maximum of 1,825,000 shares of our common stock may be issued, and as of June 30, 2026, 720,073 shares of common stock remain available for future issuance. For the three months ended June 30, 2026 and 2025, we recognized $ 6 million and $ 5 million of share-based compensation expense, respectively. For the six months ended June 30, 2026 and 2025, we recognized $ 10 million and $ 9 million of share-based compensation expense, respectively. As of June 30, 2026, unrecognized compensation expense was $ 33 million, which is expected to be recognized over a weighted-average period of 1.8 years. The total fair value of shares vested (calculated as the number of shares multiplied by the vesting date share price) for the six months ended June 30, 2026 and 2025 was $ 21 million and $ 12 million, respectively. Stock Awards Stock awards generally vest in annual installments between one and three years from each grant date. The following table provides a summary of stock awards for the six months ended June 30, 2026: Number of Shares Weighted-Average Grant Date Fair Value Unvested at January 1, 2026 1,253,844 $ 13.47 Granted 1,039,019 11.40 Vested ( 681,501 ) 13.29 Forfeited ( 57,697 ) 12.15 Unvested at June 30, 2026 1,553,665 $ 12.21 Performance Stock Units Performance Stock Units (“PSUs”) generally vest at the end of a three-year performance period. All PSUs granted prior to 2026 are subject to the achievement of a market condition based on a measure of our total shareholder return (“TSR metric”) relative to the total shareholder return of the companies that comprise the FTSE Nareit Lodging Resorts Index (that have a market capitalization in excess of $ 1 billion as of the first day of the applicable performance period) (the “Peer Companies”). Beginning in 2026, 75 % of PSUs granted continue to be subject to the foregoing TSR metric, while the remaining 25 % of PSUs are subject to the achievement of a performance condition based on our growth in revenue per available room (“RevPAR”) relative to RevPAR growth of the Peer Companies (“RevPAR metric”). The number of PSUs that may become vested ranges from zero to 200 % of the number of PSUs granted to an employee, based on the level of achievement of the foregoing market and performance conditions. 13 Table of Content s The following table provides a summary of PSUs for the six months ended June 30, 2026: Number of Shares Weighted-Average Grant Date Fair Value Unvested at January 1, 2026 1,866,254 $ 15.63 Granted 1,458,776 15.67 Vested ( 1,165,826 ) 19.96 Forfeited ( 6,685 ) 13.86 Unvested at June 30, 2026 2,152,519 $ 13.32 The grant date fair values and the corresponding compensation cost of the awards that are subject to the achievement of the TSR metric were determined using a Monte Carlo simulation valuation model with the following assumptions: Expected volatility (1) 34.0 % Dividend yield (2) — Risk-free rate (3) 3.6 % Expected term 3 years _____________________________________ (1) Estimated using a blended approach of historical and implied volatility. Historical volatility is based on the historical movement of the Company’s stock price for a period that corresponds to the expected terms of the PSUs. (2) Dividends are assumed to be reinvested in shares of our common stock and dividends will not be paid unless shares vest. (3) Based on the yields of U.S. Department of Treasury instruments with similar expected terms of the PSUs at the grant date of each award. The grant date fair values and the corresponding compensation cost of the awards that are subject to the achievement of the RevPAR metric were determined using the closing stock price on the grant date multiplied by the percentage of shares expected to vest, and such percentage is reevaluated based on the probability of meeting the RevPAR metric each period. Note 10: Earnings Per Share The following table presents the calculation of basic and diluted earnings per share (“EPS”): Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 (in millions, except per share amounts) Numerator: Net income (loss) attributable to stockholders $ 47 $ ( 5 ) $ 58 $ ( 62 ) Earnings attributable to participating securities — — ( 1 ) — Net income (loss) attributable to stockholders, net of earnings allocated to participating securities $ 47 $ ( 5 ) $ 57 $ ( 62 ) Denominator: Weighted average shares outstanding – basic 200 199 200 199 Weighted average shares outstanding – diluted 200 199 200 199 Earnings (loss) per share – Basic (1) $ 0.24 $ ( 0.02 ) $ 0.29 $ ( 0.31 ) Earnings (loss) per share – Diluted (1) $ 0.24 $ ( 0.02 ) $ 0.29 $ ( 0.31 ) _____________________________________ (1) Per share amounts are calculated based on unrounded numbers and are calculated independently for each period presented. 14 Table of Content s Certain of our outstanding equity awards were excluded from the above calculation of EPS for the three and six months ended June 30, 2026 and 2025 because their effect would have been anti-dilutive. Note 11: Business Segment Information As a result of a shift in our business strategy during the quarter ended December 31, 2025, we 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. Our Chief Operating Decision Maker (the “CODM”), who is our chief executive officer, evaluates our consolidated Core and Non-Core hotels primarily based on hotel adjusted earnings (loss) before interest income and expense, taxes and depreciation and amortization (“EBITDA”) when deciding how to allocate resources, in making other day-to-day operating decisions and evaluating our operating performance against other companies within our industry. Hotel Adjusted EBITDA, presented herein, is calculated as EBITDA from hotel operations and does not include the following items that are not reflective of our ongoing operating performance or incurred in the normal course of business, and thus excluded from the CODM’s analysis: • Gains or losses on sales of assets for both consolidated and unconsolidated investments; • Costs associated with hotel acquisitions or dispositions expensed during the period; • Severance expense; • Share-based compensation expense; • Impairment losses and casualty gains or losses; and • Other items that we believe are not representative of our current or future operating performance. 15 Table of Content s The following tables present our reportable segment expenses, Hotel Adjusted EBITDA reconciled to net income (loss) and reportable segment revenues reconciled to our consolidated amounts. Prior period amounts have been recast to reflect the change in our reportable segments: Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Total Core Hotels Non-Core Hotels Total Core Hotels Non-Core Hotels Total Core Hotels Non-Core Hotels Total Core Hotels Non-Core Hotels (in millions) Revenues: Rooms $ 401 $ 335 $ 66 $ 401 $ 316 $ 85 $ 757 $ 634 $ 123 $ 764 $ 610 $ 154 Food and beverage 188 164 24 180 151 29 370 321 49 362 303 59 Ancillary hotel 67 61 6 68 58 10 127 115 12 131 114 17 Total segment revenues 656 560 96 649 525 124 1,254 1,070 184 1,257 1,027 230 Less: Rooms expense 104 86 18 105 81 24 201 166 35 205 158 47 Food and beverage expense 125 108 17 122 101 21 247 214 33 245 203 42 Other departmental and support expense 149 120 29 152 114 38 294 237 57 303 229 74 Management fees 33 29 4 31 27 4 63 55 8 61 52 9 Other property segment expenses (1) 37 35 2 48 36 12 90 75 15 101 75 26 Total segment expenses 448 378 70 458 359 99 895 747 148 915 717 198 Hotel Adjusted EBITDA 208 $ 182 $ 26 191 $ 166 $ 25 359 $ 323 $ 36 342 $ 310 $ 32 Other revenues 24 23 48 45 Depreciation and amortization expense ( 66 ) ( 122 ) ( 130 ) ( 191 ) Corporate general and administrative expense ( 20 ) ( 19 ) ( 38 ) ( 37 ) Impairment and casualty loss ( 22 ) — ( 27 ) ( 70 ) Other operating expenses ( 22 ) ( 23 ) ( 46 ) ( 44 ) (Loss) gain on sales of assets, net ( 2 ) 1 ( 3 ) 1 Gain on derecognition of assets — 16 — 32 Interest income 2 2 3 5 Interest expense ( 52 ) ( 53 ) ( 103 ) ( 105 ) Interest expense associated with hotels in receivership — ( 16 ) — ( 32 ) Equity in earnings from investments in affiliates 1 2 2 2 Income tax expense ( 5 ) ( 1 ) ( 6 ) ( 2 ) Other gain (loss), net 9 ( 1 ) 9 1 Other items ( 5 ) ( 2 ) ( 6 ) ( 6 ) Net income (loss) $ 50 $ ( 2 ) $ 62 $ ( 59 ) _____________________________________ (1) Other property segment expenses primarily include real and personal property taxes, other local taxes, ground rent, equipment rent and property insurance incurred in the normal course of business. 16 Table of Content s Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Total Core Hotels Non-Core Hotels Total Core Hotels Non-Core Hotels Total Core Hotels Non-Core Hotels Total Core Hotels Non-Core Hotels (in millions) Revenues: Total revenues $ 680 $ 672 $ 1,302 $ 1,302 Less: Other revenues ( 24 ) ( 23 ) ( 48 ) ( 45 ) Total segment revenues $ 656 $ 560 $ 96 $ 649 $ 525 $ 124 $ 1,254 $ 1,070 $ 184 $ 1,257 $ 1,027 $ 230 The following table presents total assets for our consolidated Core and Non-Core hotels, reconciled to total assets: June 30, 2026 December 31, 2025 (in millions) Consolidated Core hotels $ 7,277 $ 7,194 Consolidated Non-Core hotels 387 461 All other 38 45 Total assets $ 7,702 $ 7,700 The following table presents total capital expenditures for property and equipment for our consolidated Core and Non-Core hotels, reconciled to total capital expenditures for property and equipment: Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 (in millions) Consolidated Core hotels $ 61 $ 39 $ 141 $ 112 Consolidated Non-Core hotels 3 4 6 8 Total capital expenditures for property and equipment $ 64 $ 43 $ 147 $ 120 Note 12: Commitments and Contingencies As of June 30, 2026, we had outstanding commitments under third-party contracts of approximately $ 137 million for capital expenditures at our properties, primarily related to the full-scale renovation of the Ali’i Tower at the Hilton Hawaiian Village Waikiki Beach Resort and guestroom renovations at the Hilton New Orleans Riverside. Our contracts contain clauses that allow us to cancel all or some portion of the work. If cancellation of a contract occurred, our commitment would be any costs incurred up to the cancellation date, in addition to any costs associated with the discharge of the contract. We are involved in litigation arising from the normal course of business, some of which includes claims for substantial sums, and may make certain indemnifications or guarantees to select buyers of our hotels as part of a sale process. Currently, we are in active litigation with a ground lessor who alleges breach of a ground lease(s) related to the Hilton Salt Lake City Center, DoubleTree Hotel San Diego - Mission Valley and/or DoubleTree Hotel Durango, which remain in our portfolio, as well as the DoubleTree Hotel Sonoma Wine Country and/or the DoubleTree Hotel Seattle Airport for our period of ownership prior to their ground lease expiration in December 31, 2025, and against whom we allege, among other things, breach of the same ground lease(s). We are also involved in claims and litigation that is not in the ordinary course of business in connection with the spin-off from Hilton. The spin-off agreements provide that Hilton will indemnify us from certain of these claims as well as require us to indemnify Hilton for other claims. In addition, losses related to certain contingent liabilities could be apportioned to us under the spin-off agreements. In connection with our obligation to indemnify Hilton under the spin-off agreements, we have reserved approximately $ 8 million as of June 30, 2026 related to litigation with respect to an audit by the Australian Tax Office (“ATO”) of Hilton related to the sale of the Hilton Sydney in June 2015. This amount could change as the litigation of the ATO’s claim progresses. 17 Table of Content s