PK 10-K & 10-Q changes, risk factors and insider trading

Economic disruptions, including as a result of elevated interest rates and elevated rates of inflation or a potential economic slowdown or recession, may adversely affect our business by affecting consumer sentiment and demand for travel, which can cause fluctuations in hotel revenues or earnings at our hotels. Our labor or other costs may also rise due to inflation, and there can be no assurance that we will be able to pass cost increases on to travelers through higher rates. There can also be no assurances that we will not experience future 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.conflicts or trends, including trade policy, travel barriers or changes in travel preferences for U.S. destinations.

Additionally, the effects of the recent global COVID-19 pandemic on the hotel industry were unprecedented, and another pandemic or other unexpected event that results in a prolonged decrease in travel in the future could have similar affects, including a drastic reduction in global demand for lodging and historically low occupancy levels. These challenges may adversely impact and disrupt, our business, financial performance and condition, operating results and cash flows.

A keyAn element of our business strategy is identifying and consummating acquisitions of additional hotels and portfolios. Since our acquisition of Chesapeake Lodging Trust in 2019, we have not acquired any new hotels, and we can provide no assurances that we will be successful in identifying attractive hotels in the future or that, once identified, we will be successful in consummating future acquisitions. We also face significant competition for attractive investment opportunities, which may impact our ability to acquire certain hotels or portfolios that we deem attractive at a favorable price, pursuant to acceptable terms, or at all. Any delay or failure on our part to identify, negotiate, finance on favorable terms, consummate and integrate such acquisitions could materially increase our costs or impede our growth.

We may continue to seek to sell or otherwise dispose of certain hotels as we seek to pursue growth and diversification through prudent capital allocation.allocation, including our expectation to sell all our Non-Core hotels. However, investments in real estate are illiquid, and it may not be possible to dispose of assets in a timely manner or on favorable terms, which could adversely affect our financial condition, operating results and cash flows.

Our ability to dispose of properties on advantageous terms depends on factors beyond our control, including competition from other sellers and the availability of attractive financing for potential buyers, and we cannot predict whether we will be able to sell any hotel we desire to for the price or on the terms set by us or acceptable to us, or the length of time needed to find a willing buyer and to close the sale of the hotel. Upon sales of properties or assets, we may become subject to contractual indemnity obligations, incur unusual or extraordinary distribution requirements, be required to expend funds to correct defects or make capital improvements or, as a result of required debt repayment, face a shortage of liquidity. In addition, many of our hotel management and franchise agreements generally contain restrictive covenants that limit or restrict our ability to sell a hotel free of the management or franchise encumbrance other than to permitted transferees, and as a result we may be prohibited from taking disposition actions that would otherwise be in our and our stockholders’ best interests.

In order for us to continue to qualify as a REIT, independent third parties must operate our hotels. We lease substantially all of our hotels to our TRS lessees. Our TRS lessees and the TRSs that own our hotels, in turn, have entered into management agreements with independent third-party managers to operate our hotels. We could be materially and adversely affected if any third-party hotel manager fails to provide quality services and amenities, failssecure toits data and systems, timely and accurately report financial results, maintain a quality brand name or otherwise fails to manage our hotels in our best interest, and could be held financially responsible for the actions and inactions of our third-party hotel managers pursuant to our management agreements. In addition, our third-party hotel managers manage, and in some cases may own or lease, or may have invested in or may have provided credit support or operating guarantees to hotels that compete with our hotels, any of which could result in conflicts of interest. As a result, third-party managers may make decisions regarding competing lodging facilities that are not in our best interests.

Our hotel managers are dependent on information technology networks and systems, including the internet, to access, process, transmit and store proprietary and customer information, including personally identifiable information of hotel guests, includingsuch as credit card numbers.

In addition to the information technologies and systems our hotel managers use to operate our hotels, we have our own corporate technologies and systems that are used to access, store, transmit, and manage or support a variety of business processes and employee personally identifiable information. We may be required to expend significant attention and financial resources to protect these technologies and systems against physical or cybersecurity incidents and even then, our security measures may subsequently be deemed to have been inadequate by regulators or courts given the lack of prescriptive measures in data security and cybersecurity laws as well as regulators'regulators’ evolving interpretations of cybersecurity laws and standards. There can be no assurance that the security measures we have taken to protect these systems will prevent failures, inadequacies or interruptions in system services or that system security will not be compromised, including through system or user error, physical or electronic break-ins, computer viruses, or cyber-attacks. Due to the complexity and interconnectedness of our information technologies and systems, and those upon which we rely, the process of upgrading or patching our protective measures could itself create a risk of cybersecurity issues or system disruptions for the Company. Further, any adoption of artificial intelligence by us or by third parties may pose new security challenges. Any actual or suspected cybersecurity incident or disruption to our information technologies and systems could have a material adverse effect on our business, our financial reporting and compliance, and could subject us to or result in liability claims, litigation, monetary losses or regulatory oversight, investigations or penalties which could be significant. In addition, the cost and operational consequences of responding to cybersecurity incidents and implementing remediation measures could be significant. If our hotel managers'managers’ information networks and systems, our corporate technologies and systems, or third-party information systems on which we rely suffer severe damage, disruption or shutdown, and our business continuity plans do not effectively resolve the issues in a timely manner, we may lose revenue and profits as a result of our inability to provide services or invoice and collect payments, and we could experience delays in reporting our financial results.

In the conduct of our business, both we and our hotel managers rely on relationships with third parties, including cloud data storage and other information technology service providers, suppliers, distributors, contractors and other external business partners, for certain functions or for services in support of key portions of our operations. These third-party entities are subject to similar risks related to cybersecurity, privacy violations, business interruption, and system and employee failures and an attack against such third-party service provider or partner could have a material adverse effect on our business. While we may be entitled to damages if our third-party service providers fail to satisfy their cybersecurity-related obligations to us, any award may be insufficient to cover our damages, or we may be unable to recover such award.

A significant portion of our room count is located in a concentrated number of markets that exposes us to greater risk to local economic or business conditions, changes in hotel supply in these markets, and other conditions than more geographically diversified hotel companies. As of December 31, 2024,2025, hotels in Florida, Hawaii, Chicago, New York City, New Orleans and Boston represented approximatelyover 63%69% of our room count, with our hotels in Florida and Hawaii alone representing greaterapproximately than 32%36% of our room count and over 39% of our total revenue in 2024.2025. An economic downturn, an increase in hotel supply, a change in guest preferences for certain geographic locations or markets, strikes or other labor activity, a force majeure event, a natural disaster, changing weather patterns and other physical effects of climate change (including supply chain disruptions), a terrorist attack or similar event in any one of these markets likely would cause a decline in the hotel market and adversely affect occupancy rates, the financial performance of our hotels in these markets and our overall results of operations, which could be material, and could significantly increase our costs.

Because certain types of losses are uncertain, including those caused by natural disaster, the effects of climate change or other catastrophic losses, they may be uninsurable or prohibitively expensive. There are also other risks that may fall outside the general coverage terms and limits of our policies, including losses related to cybersecurity incidents, terrorism, natural disaster or climate change. Market forces beyond our control could limit the scope of the insurance coverage that we can obtain or may otherwise restrict our ability to buy insurance coverage at reasonable rates. In the event of a substantial loss, the insurance coverage that we carry may not be sufficient to pay the full value of our financial obligations, our liabilities or the replacement cost of any lost investment or property. Furthermore, certain of our properties may currently qualify as legally permissible nonconforming uses and improvements, including certain of our iconic and most profitable properties, and we may not be permitted to rebuild such properties as they exist now or at all, regardless of insurance proceeds, if such properties are destroyed. Any loss of this nature, whether insured or not, could materially adversely affect our results of operations and prospects.

We depend on external sources of capital for future growth. Any disruption to our ability to access capital at times and on terms reasonably acceptable to us may adversely affect adversely our business and results of operations.

WeIn recently2024, we experienced near-term disruption as a result of negotiations between our third-party operators and unions at certain hotels, which included strikes and other labor activity. Strikes, as well as lockouts, public demonstrations or other negative actions and publicity that may occur from time to time may disrupt hotel operations at any of our hotels, negatively impact our reputation or the reputation of our brands, or harm relationships with the labor forces at our hotels. We also have incurred and may in the future incur increased legal costs and indirect labor, maintenance and operational costs as a result of contract disputes or other events. Additionally, hotels where our hotel managers have collective bargaining agreements with employees are more highly affected by labor force activities than others. The resolution of labor disputes or new or re-negotiated labor contracts could lead to increased labor costs, either by increases in wages or benefits or by changes in work rules that raise hotel operating costs. Furthermore, labor agreements may limit the ability of our hotel managers to reduce the size of hotel workforces during an economic downturn because collective bargaining agreements are negotiated between the hotel managers and labor unions. As we do not directly employ the employees at our hotels, we do not have the ability to control the outcome of these negotiations.

Unless we purchase a fee interest in the land and improvements at our properties subject to our ground leases or extend the terms of these leases before their expiration, we will lose our right to operate these properties and we will not have any economic interest in the land or improvements at the expiration of our ground leases; therefore, we generally will not share in any increase in value of the land or improvements beyond the term of a ground lease, notwithstanding our capital outlay to purchase our interest in the hotel or fund improvements thereon, and will lose our right to use the hotel. We can provide no assurances that we will be able to renew any ground lease upon its expiration at all or on favorable terms. In addition, if we are found to be in breach of certain of our third-party ground leases, we could lose the right to use the applicable hotel. Our ability to exercise any extension options relating to our ground leases is subject to the condition that we are not in default under the terms of the ground lease at the time that we exercise such options. We are currently 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 and against whom we allege, among other things, breach of the same ground lease(s). Additionally, if a governmental authority seizes a hotel subject to a ground lease under its eminent domain power, we may only be entitled to a portion of any compensation awarded for the seizure. If we were to lose the right to use a hotel, we would be unable to derive income from such hotel, which could adversely affect us.

The debt agreements and instruments that govern our outstanding indebtedness, including our senior unsecured credit facilityfacilities and senior notes, impose significant financial and operating restrictions on us, including covenants that may restrict our ability to implement our business plan, finance future operations, respond to changing business and economic conditions, secure additional financing, and engage in opportunistic transactions, such as strategic acquisitions, mergers or asset sales or transactions with affiliates. In addition, if we fail to satisfy the covenants contained in the credit agreement that governs our senior unsecured credit facilities, our ability to borrow additional funds under the credit facilities may be restricted. Furthermore, the credit agreement and indentures that govern our senior notes contain certain affirmative covenants that require us to be in compliance with certain leverage, liquidity and other financial ratios, and the loan documents governing the mortgage-backed loans of our subsidiaries also require them to maintain certain debt service coverage ratios and minimum net worth requirements. We cannot assure you that we will be able to comply with our financial or other covenants and, if we fail to do so, we may not be able to obtain waivers from the lenders or noteholders, as applicable, and/or amend the covenants. Our failure to comply with the restrictive covenants described above, as well as other terms of our other indebtedness and/or the terms of any future indebtedness from time to time, could result in an event of default, which,as ifhappened with the Hilton San Francisco Hotels (as defined below). If the event of default is not cured or waived, it could result in our being required to repay these borrowings before their due date. If we are forced to refinance these borrowings on less favorable terms or are unable to refinance these borrowings, our financial condition and results of operations could be adversely affected. If we are unable to refinance our debt on acceptable terms or at all, we may be forced to dispose of hotels at inopportune times or on disadvantageous terms, which could result in losses. To the extent we cannot or do not meet our future debt service obligations, we will also risk losing to foreclosure some or all of our hotels that may be pledged to secure our obligation. For example, in June 2023, we ceased making debt service payments on the $725 million SF Mortgage Loan secured by the Hilton San Francisco Hotels, which was due November 2023, and in October 2023, the Hilton San Francisco Hotels were placed into receivership. See Note 7: "Debt" in our audited consolidated financial statements included elsewhere within this Annual Report on Form 10-K for further details.

For tax purposes, a foreclosure of any of our hotels would be treated as a sale of the hotel for a purchase price equal to the outstanding balance of the debt secured by the mortgage. If the outstanding balance of the debt secured by the mortgage exceeds our tax basis in the hotel, we would recognize taxable gain on foreclosure, but we would not receive any cash proceeds, which could impact our ability to meet the REIT distribution requirements. In October 2023, our effective exit from the two Hilton San Francisco Hotels that secured the SF Mortgage Loan resulted in such required distribution of our REIT taxable income. See Note 7: "Debt" in our audited consolidated financial statements included elsewhere within this Annual Report on Form 10-K for further details. In addition, we may give full or partial recourse guarantees to lenders of mortgage debt on behalf of the entities that own our hotels. When we give a recourse guarantee on behalf of an entity that owns one of our hotels, we will be responsible to the lender for satisfaction of the debt if it is not paid by such entity or if certain loan provisions are violated. If any of our hotels are foreclosed on due to a default, our ability to pay cash distributions to our stockholders will be limited.

We have been taxed as a REIT for U.S. federal income tax purposes beginning January 4, 2017. We believe we have been organized and operated, and expect to continue to be organized and operate, in a manner to qualify as a REIT. However, qualification as a REIT involves the interpretation and application of highly technical and complex Code provisions for which no or only a limited number of judicial or administrative interpretations may exist. Notwithstanding the availability of cure provisions in the Code, we could fail to meet various compliance requirements, which could jeopardize our REIT status. Our REIT status is also dependent upon the ongoing and historic qualification of subsidiary entities qualifying as REITs or TRSs, as applicable, as a result of its substantial ownership interest in those entities. Furthermore, new tax or other legislation, administrative guidance or court decisions, in each instance potentially with retroactive effect, could make it more difficult or impossible for us to qualify as a REIT. If we, or any of our subsidiary entities qualifying as REITs, fail to qualify as a REIT in any tax year, then:

We have a diverse portfolio of iconic and market-leading hotels and resorts with significant underlying real estate value. We currently have interests in 4034 hotels consisting of premium-branded hotels and resorts with approximately 25,00023,000 rooms, of which over 87% are luxury and upper upscale and are located in prime U.S. markets and its territories. Our high-qualitystrategic 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 currentlyare includesluxury and upper upscale, and our Core hotels mostlyare 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; as well as hotels in select airport and suburban locations.

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 strategystrategy, 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.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 dispositionsdispose of all 13 remaining Non-Core hotels 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.cycle.

WeAs a result of a shift in our business strategy to dispose of all Non-Core hotels, we now operate our business through twothree operating segments, our consolidated Core hotels, consolidated Non-Core hotels and unconsolidated hotels. OurOnly our consolidated Core hotels operatingand segmentconsolidated isNon-Core ourhotels onlyare reportable segment.segments. Refer to Note 14: "“Business Segment Information"” in our audited consolidated financial statements included elsewhere within this Annual Report on Form 10-K for additional information regarding our operating segments.

Economic disruptions, including as a result of elevated interest and inflation rates, may adversely affect our business by affecting consumer sentiment and demand for travel. However,Heightened uncertainty due to ongoing changes to trade policy, tax policy and disruptions to government spending has resulted in inflationary concerns haveand moderatedchanges in demand and furthertravel interestpreferences, rate reductionswhich may continue. In addition, duringaffect the fourthlodging quarterindustry. ofAdditionally, 2024,geopolitical the hotel operators for four of our hotels negotiated long-term labor agreements with labor organizations representing their hotel employees following strikesconflicts and other labor activity that affected our operating results beginning in late September 2024. Any future labor disruptionstrends may result in increases in labor or other costscontinue to maintaindecrease orinbound operateinternational hotels.travel. During 2024,2025, 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.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 andrecession, geopolitical conflicts,conflicts or trends, disapproval of U.S. foreign or domestic policy, or another government shutdown, we expectare thecautiously positive momentum to continueoptimistic for 20252026 based on currentupcoming demandmajor trends,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 increasesreopening of the Royal Palm South Beach Miami, a Tribute Portfolio Resort (“Royal Palm”) in city-wideJune events2026, the benefits of divesting Non-Core hotels and asexpected demandmacroeconomic improvement from internationalcontinued travel continues to improve.deregulation.

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

EBITDA, Adjusted EBITDA and Hotel Adjusted EBITDA are not recognized terms under U.S. GAAP and should not be considered as alternatives to net (loss) income or other measures of financial performance or liquidity derived in accordance with U.S. GAAP. In addition, our definitions of EBITDA, Adjusted EBITDA and Hotel Adjusted EBITDA may not be comparable to similarly titled measures of other companies.

•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.

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

(1)For the yearyears 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,Loan”), which iswas offset by a gain on derecognition for the corresponding increase of the contract asset on our consolidated balance sheets,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 theThe SF Mortgage Loan andwas assumed by the gainbuyer from derecognizingof the 1,921-room Hilton San Francisco HotelsUnion fromSquare our consolidated balance sheet in October 2023, whenand the receiver1,024-room tookParc control55 ofSan Francisco – a Hilton Hotel (collectively, the hotels.“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.

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:

(31)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, theincludes a gain of $19 million on the sale of the Hilton La Jolla Torrey Pines isincluded presentedin withinequity gainin onearnings sale offrom investments in affiliates above.affiliates.

The increaseschanges in hotel revenues and operating expenses for our comparableCore hotels during the year ended December 31, 2024, as2025 compared to the same period in 2023,2024 were primarily attributable to decreases at our hotels in Miami and Hawaii, partially offset by increases at the Orlando,Bonnet Creek complex, the New York Hilton Midtown, the Hilton Caribe and the Casa Marina Key West, NewCurio York, Chicago and Boston markets.Collection.

The New York Hilton Midtown and the Hilton Chicago both benefited from increasesan increase in both group and transient demand,demand whichand droverevenues increasesfrom higher-rated customers, resulting in foodan andincrease beveragein revenue of 13% and 6%, respectively. Occupancyoccupancy and ADR atof the New York Hilton Midtown increased 1.80.4 percentage points and 1.6%, respectively, while occupancy and ADR at the Hilton Chicago increased 6.2 percentage points and 1.5%,5.3%, respectively, for the year ended December 31, 20242025 compared to the same period in 2023.2024.

During the year ended December 31, 2024,2025, we recognized impairment losses of approximately $12$318 million primarily related to twonine of our hotelsNon-Core subjecthotels, due to ground leasessales and ourthe inabilitystrategic decision to recoveraccelerate the carrying valuedisposition of theour assetsNon-Core over the remaining lease term.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, 2023,2024, we recognized an impairment loss of approximately $202$12 million.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.

During the years ended December 31, 20242025 and 2023,2024, we recognized a net gain of $8$2 million and $15$8 million, respectively, primarily from the sales of our consolidated Non-Core hotels.

During the yearyears ended December 31, 2023,2025 and 2024, we recognized a gain of $221$58 million and $60 million from the derecognitionaccrued 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 HotelsHotels, fromwhich ourwere consolidatedsold balance sheet in October 2023, whenby the court-appointed receiver tookon controlNovember of21, the hotels.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.

Interest income decreased $17$11 million during the year ended December 31, 20242025 compared to the same period in 20232024 primarily as a result of a decrease in average cash balances.balances as we have reinvested cash into our Core portfolio, including the full-scale renovation of the Royal Palm.

(25)In May 2020, Park Intermediate Holdings LLC (our “Operating Company”), PK Domestic Property LLC, an indirect subsidiary of the Company (“PK Domestic”), and PK Finance Co-Issuer Inc. (“PK Finance”) issued an aggregate of $650 million of senior notes due 2025 (“2025 Senior Notes,Notes”), all of which were repurchased or redeemed during the second quarter of 2024. Our Operating Company, PK DomesticDomestic, 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, excluding the SF Mortgage Loan,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.

Other gain (loss) gain,, net

During the year ended December 31, 2023,2025, we recognized a gain of approximately $4$16 million forprimarily anrelated early termination fee received fromto the lessorsale toof terminateour ownership interest in the leaseCapital forHilton thein EmbassyNovember Suites Phoenix Airport hotel.2025.

Equity in earnings from investments in affiliates increaseddecreased $20$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.Pines in 2024.

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 proceedsthe fromremaining $600 million under our $800 million senior unsecured delayed draw term loan facility (“2025 Delayed Draw Term Loan”) and our $700 million delayed draw mortgageloan loanfacility (“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 andor agency shutdownsshutdown), 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. You should not rely on forward-looking statements since they involve known and unknown risks, uncertainties and other factors which are, in some cases, beyond our control and which could materially affect our results of operations, financial condition, cash flows, performance or future achievements or events.

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 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 12nine 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.

Geopolitical conflicts and trends, coupled with economic disruptions, including as a result of elevated interest and inflation rates, may adversely affect our business by affecting consumer sentiment and demand for both domestic and international travel. 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,Recently, we have relied on the performance of our hotelshotels, 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 2026the remainder of 2026. This outlook is based on upcoming major events, including the World Cup and the 250th anniversary of the U.S., continuedanticipated benefits from transformative renovations at certain of our hotels, including the expectedrecently reopeningcompleted comprehensive renovation and repositioning of the Royal Palm South Beach Miami, a Tribute Portfolio Resort (“Royal Palm”), which reopened in JuneJuly 2026, and the benefits of divesting of our Non-Core hotels.

(1)For the three and six months ended MarchJune 31,30, 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. 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 onin November 21, 2025.

(12)For the three and six months ended MarchJune 31,30, 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 onin November 21, 2025.

Since January 1, 2025, we disposed of fiveseven 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.

Group, transient, contract and other rooms revenue for the three and six months ended MarchJune 31,30, 2026, as well as the change for each type of rooms revenue compared to the same periodperiods in 2025 were as follows:

The changes in hotel revenues and operating expenses for our Core hotels during the three and six months ended MarchJune 31,30, 2026 compared to the same periodperiods in 2025 were primarily attributable to increases at the Hilton Hawaiian Village Waikiki Beach Resort, Bonnet Creek complex, ourCasa HawaiiMarina hotelsKey West, Curio Collection, New York Hilton Midtown and the Hilton Caribe,Santa Barbara Beachfront Resort in Southern California, partially offset by decreases at our hotels in New OrleansMiami and Miami.New Orleans.

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 increasesan approximately 20% increase in group demand for both groupthe three and transientsix demand,months ended June 30, 2026, resulting in an increaseincreases in occupancy and ADR of 10.46.0 percentage points and 6.3 percentage points,3.1%, respectively, for the three months ended MarchJune 31,30, 2026 and 6.1 percentage points and 4.2%, respectively, for the six months ended June 30, 2026, compared to the same periodperiods in 2025, while ADR increased 3.7% and 5.1%, respectively.2025. 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%,10%, or over $3 million, and 13%, or approximately $6$9 million,million for the three and six months ended MarchJune 31,30, 20262026, respectively, compared to the same periodperiods 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.

These increases were offset by decreases in hotel revenues at our hotels in New OrleansMiami and Miami.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 both group and transient demand for the six months ended June 30, 2026, primarily duedriven toby the Super Bowl that was held in New Orleans inFebruary 2025, resulting in a decrease inwith ADR ofdecreasing 13.6% for the three months ended March 31, 20268.7% compared to the same period in 2025. Additionally, the Royal Palm in Miami suspended operations beginning in May 2025 for a full-scale renovation.

During the three and six months ended MarchJune 31,30, 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 onin November 21, 2025.

Interest income decreased $2 million during the threesix months ended MarchJune 31,30, 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.

Interest expense associated with our debt for the three and six months ended MarchJune 31,30, 2026 and 2025 were as follows:

(23)As of MarchJune 31,30, 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.

ForDuring the three and six months ended MarchJune 31,30, 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 onin November 21, 2025.

We seek to maintain sufficient amounts of liquidity with an appropriate balance of cash, debt and equity to provide financial flexibility. As of MarchJune 31,30, 2026, we had total cash and cash equivalents of $156$264 million and $34$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, $600 million available under our $800 million undrawn 2025 Delayed Draw Term Loan and our new undrawn $700 million Bonnet Creek Mortgage Loan, in addition to the $156$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. 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. We intend to further draw upon the 2025 Delayed Draw Term Loan andas well as the Bonnet Creek Mortgage Loan during the third quarter to fund the repayment of twothe mortgage loans totaling approximately $1.4$1.3 billion andHHV Mortgage Loan maturing in the secondfourth halfquarter of 2026 and further pay down our debt with proceeds from the sales of our Non-Core hotels.2026. Following the repayment of thesethe mortgageHHV loans,Mortgage Loan, we have no significant maturities until the fourth quarter of 2028. Refer to Note 6: “Debt” in our unaudited condensed consolidated financial statements included elsewhere within this Quarterly Report on Form 10-Q for additional information. We may also take actions to improve our liquidity, such as the issuance of additional debt, equity or equity-linked securities, if we determine that doing so would be beneficial to us. 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 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 FebruaryApril 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 inthat April 2026 to bewas 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. 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. Our long-term liquidity requirements primarily consist of funds necessary to pay for scheduled debt maturities, capital improvements at our hotels, and costs associated with potential acquisitions.

In February 2025, our Board of Directors authorized and approved a stock repurchase program allowing us to repurchase up to $300 million of our common stock over a two-year period ending in February 2027, 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. As of MarchJune 31,30, 2026, $275 million remained available for stock repurchases.

Cash flow from operating activities are primarily generated from the operating income generated at our hotels. The $27$6 million decreaseincrease in net cash provided by operating activities for the threesix months ended MarchJune 31,30, 2026 compared to the threesix months ended MarchJune 31,30, 2025 was primarily due to decreasesincreases in occupancy atacross certaina majority of our hotels,portfolio includingand 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,renovation and timingreopened ofin receiptsJuly from our customers.2026.

The $72$116 million in net cash used in investing activities for the threesix months ended MarchJune 31,30, 2026 was attributable to $83$147 million of capital expenditures, partially offset by $11$31 million of net proceeds from the saledisposal of the Hilton Checkers Los Angeles.Angeles, Hilton Seattle Airport & Conference Center and Embassy Suites by Hilton Alexandria Old Town.

The $77$45 million in net cash used in investing activities for the threesix months ended MarchJune 31,30, 2025 was attributable to $120 million of capital expenditures.expenditures, partially offset by $75 million of net proceeds from the sale of the Hyatt Centric Fisherman’s Wharf.

The $189$46 million in net cash used in financing activities for the threesix months ended MarchJune 31,30, 20252026 was primarily attributable to $131$174 million of mortgage loan and credit facility repayments, including the mortgage loan secured by the Hyatt Regency Boston, and $100 million of dividends paidpaid, andpartially theoffset repurchaseby of approximately 3.5$250 million sharesdrawn offrom our commoncredit stock for $45 million.facilities.

As of MarchJune 31,30, 2026, our total indebtedness was approximately $3.8$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 suchthe unconsolidated affiliatesaffiliate is secured solely by the affiliates’affiliate’s assets or is guaranteed by other partners without recourse to us. Refer to Note 6: “Debt” in our unaudited condensed consolidated financial statements included elsewhere within this Quarterly Report on Form 10-Q for additional information.