Sunstone Hotel Investors, Inc.

Previous wording

The following table presents our unaudited operating results for the six months ended June 30, 2025 and 2024, including the amount and percentage change in the results between the two periods.

Current wording

The following table presents our unaudited operating results for the nine months ended September 30, 2025 and 2024, including the amount and percentage change in the results between the two periods.

Previous wording

Room revenue. Room revenue increased $4.8 million, or 3.1%, in the second quarter of 2025 as compared to the second quarter of 2024 as follows:

Current wording

Room revenue. Room revenue increased $0.8 million, or 0.6%, in the third quarter of 2025 as compared to the third quarter of 2024 as follows:

Previous wording

For the six months ended June 30, 2025, room revenue increased $13.9 million, or 4.8%, as compared to the six months ended June 30, 2024 as follows:

Current wording

For the nine months ended September 30, 2025, room revenue increased $14.6 million, or 3.4%, as compared to the nine months ended September 30, 2024 as follows:

Previous wording

Food and beverage revenue*.* Food and beverage revenue increased $6.7 million, or 9.3%, in the second quarter of 2025 as compared to the second quarter of 2024, as follows:

Current wording

Food and beverage revenue*.* Food and beverage revenue increased $0.6 million, or 0.9%, in the third quarter of 2025 as compared to the third quarter of 2024, as follows:

Previous wording

For the first six months of 2025, food and beverage revenue increased $12.4 million, or 9.4%, as compared to the first six months of 2024 as follows:

Current wording

For the first nine months of 2025, food and beverage revenue increased $13.0 million, or 6.6%, as compared to the first nine months of 2024 as follows:

Previous wording

Other operating revenue. Other operating revenue increased $0.9 million, or 3.5%, in the second quarter of 2025 as compared to the second quarter of 2024 as follows:

Current wording

Other operating revenue. Other operating revenue increased $1.6 million, or 6.8%, in the third quarter of 2025 as compared to the third quarter of 2024 as follows:

Previous wording

For the first six months of 2025, other operating revenue increased $2.9 million, or 6.4%, as compared to the first six months of 2024 as follows:

Current wording

For the first nine months of 2025, other operating revenue increased $4.5 million, or 6.6%, as compared to the first nine months of 2024 as follows:

Previous wording

Hotel operating expenses*.*Hotel operating expenses, which are comprised of room, food and beverage, advertising and promotion, repairs and maintenance, utilities, franchise costs, property tax, ground lease and insurance, and other hotel operating expenses increased $10.8 million, or 7.5%, in the second quarter of 2025 as compared to the second quarter of 2024 as follows:

Current wording

Hotel operating expenses*.*Hotel operating expenses, which are comprised of room, food and beverage, advertising and promotion, repairs and maintenance, utilities, franchise costs, property tax, ground lease and insurance, and other hotel operating expenses increased $5.6 million, or 3.9%, in the third quarter of 2025 as compared to the third quarter of 2024 as follows:

Previous wording

For the first six months of 2025, hotel operating expenses increased $21.8 million, or 7.8%, as compared to the first six months of 2024 as follows:

Current wording

For the first nine months of 2025, hotel operating expenses increased $27.4 million, or 6.4%, as compared to the first nine months of 2024 as follows:

Previous wording

Other property-level expenses*.*Other property-level expenses increased $3.4 million, or 12.1%, in the second quarter of 2025 as compared to the second quarter of 2024 as follows:

Current wording

Other property-level expenses*.*Other property-level expenses increased $0.2 million, or 0.8%, in the third quarter of 2025 as compared to the third quarter of 2024 as follows:

Previous wording

For the first six months of 2025, other property-level expenses increased $5.5 million, or 9.9%, as compared to the first six months of 2024 as follows:

Current wording

For the first nine months of 2025, other property-level expenses increased $5.7 million, or 7.0%, as compared to the first nine months of 2024 as follows:

Previous wording

Corporate overhead expense*.*Corporate overhead expense increased $0.2 million, or 2.2%, in the second quarter of 2025 as compared to the second quarter of 2024, primarily due to increased professional fees, due diligence fees, board of director expenses, and travel expenses. These increased expenses were partially offset by decreased payroll and related expenses and deferred stock amortization expense.

Current wording

Corporate overhead expense*.*Corporate overhead expense decreased $0.6 million, or 8.0%, in the third quarter of 2025 as compared to the third quarter of 2024, primarily due to decreased payroll and related expenses and deferred stock amortization expense, partially offset by increased professional fees.

Previous wording

For the first six months of 2025, corporate overhead increased $1.6 million, or 10.0%, as compared to the first six months of 2024, primarily due to increased payroll and related expenses resulting from a severance payment related to the elimination of the Chief Operating Officer position in the first quarter of 2025 in connection with the restructuring of our executive team. The increase in corporate overhead expense was also due to increased professional fees, due diligence fees, entity-level state franchise and minimum taxes, and board of director expenses. These increased expenses were partially offset by decreased deferred stock amortization expense.

Current wording

For the first nine months of 2025, corporate overhead increased $1.0 million, or 4.1%, as compared to the first nine months of 2024, primarily due to increased payroll and related expenses and deferred stock amortization expense in the first quarter of 2025 in connection with the restructuring of our executive team. The increase in corporate overhead expense was also due to increased professional fees, due diligence fees, board of director expenses, entity-level state franchise and minimum taxes, and employee recruitment expenses. These increased expenses were partially offset by decreased deferred stock amortization expense.

Previous wording

Depreciation and amortization expense*.*Depreciation and amortization expense increased $3.0 million, or 9.7%, in the second quarter of 2025 as compared to the second quarter of 2024 as follows:

Current wording

Depreciation and amortization expense*.*Depreciation and amortization expense increased $2.2 million, or 7.1%, in the third quarter of 2025 as compared to the third quarter of 2024 as follows:

Previous wording

For the first six months of 2025, depreciation and amortization expense increased $6.2 million, or 10.4%, as compared to the first six months of 2024 as follows:

Current wording

For the first nine months of 2025, depreciation and amortization expense increased $8.5 million, or** **9.2%, as compared to the first nine months of 2024 as follows:

Previous wording

Interest and other income*.*Interest and other income totaled $2.3 million and $3.5 million in the second quarters of 2025 and 2024, respectively, and $3.9 million and $9.0 million in the first six months of 2025 and 2024, respectively.

Current wording

Interest and other income*.*Interest and other income totaled $3.2 million and $2.4 million in the third quarters of 2025 and 2024, respectively, and $7.0 million and $11.3 million in the first nine months of 2025 and 2024, respectively.

Previous wording

During the second quarters of 2025 and 2024, we recognized interest income of $1.4 million and $3.2 million, respectively. Interest income decreased in the second quarter of 2025 as compared to the second quarter of 2024 due to decreases in our cash balances following our acquisition of the Hyatt Regency San Antonio Riverwalk in April 2024. In addition, during the second quarter of 2025, we recognized a $0.9 million settlement for certain property-related claims at the Oceans Edge Resort & Marina, and during

Current wording

During the third quarters of 2025 and 2024, we recognized interest income of $1.4 million and $2.3 million, respectively. Interest income decreased in the third quarter of 2025 as compared to the third quarter of 2024 due to decreased interest rates. In addition, during the third quarter of 2025, we recognized a $1.0 million settlement for certain property-related claims at Oceans Edge Resort & Marina and $0.7 million in net property insurance recoveries related to 2025 water damage at The Westin Washington, DC Downtown. During both of the third quarters of 2025 and 2024, we also recognized other miscellaneous income of $0.1 million.

Previous wording

During the first six months of 2025 and 2024, we recognized interest income of $2.8 million and $8.6 million, respectively. Interest income decreased in the first six months of 2025 as compared to the same period in 2024 due to decreases in our cash balances following our acquisition of the Hyatt Regency San Antonio Riverwalk in April 2024. In addition, during the first six months of 2025, we recognized a $0.9 million settlement for certain property-related claims at the Oceans Edge Resort & Marina, and during the first six months of 2025 and 2024, we recognized property insurance recoveries of $0.1 million and $0.3 million, respectively, related to 2023 fire damage at the Hilton San Diego Bayfront.

Current wording

During the first nine months of 2025 and 2024, we recognized interest income of $4.2 million and $10.9 million, respectively. Interest income decreased in the first nine months of 2025 as compared to the same period in 2024 due to decreases in our cash balances following our acquisition of the Hyatt Regency San Antonio Riverwalk in April 2024, as well as decreased interest rates. In addition, during the first nine months of 2025, we recognized settlement proceeds of $1.9 million for certain property-related claims at the Oceans Edge Resort & Marina, net property insurance recoveries of $0.8 million related to 2023 fire damage at the Hilton San Diego Bayfront and 2025 water damage at The Westin Washington, DC Downtown, and other miscellaneous income of $0.1 million. During the first nine months of 2024, we also recognized $0.3 million in property insurance recoveries related to 2023 fire damage at the Hilton San Diego Bayfront and $0.1 million in other miscellaneous income.

Previous wording

The increases in interest expense during the second quarter and first six months of 2025 as compared to the same periods in 2024 were primarily due to $0.4 million and $3.4 million noncash changes in the fair market value of our derivatives, respectively, and increases of $0.2 million and $0.3 million, respectively, in the amortization of deferred financing costs due to costs incurred to extend the maturity of Term Loan 3 and on the issuance of Term Loan 4. These increases to interest expense were partially offset by increases of $0.2 million and $1.2 million of interest capitalized in the second quarter and first six months of 2025, respectively, as compared to the same periods in 2024, related to the extensive renovation work at The Confidante Miami Beach as it transitioned to Andaz Miami Beach. In addition, interest incurred on our debt increased $0.1 million and decreased $0.3 million during the second quarter and first six months of 2025, respectively, as compared to the same periods in 2024, primarily due to our $27.0 million draw on our credit facility in April 2025, fluctuations in our variable rate debt, our December 2024 repayment of the $72.1 million loan secured by the JW Marriott New Orleans, and our draw of the $100.0 million available under Term Loan 4 in December 2024.

Current wording

The decreases in interest expense during the third quarter and first nine months of 2025 as compared to the same periods in 2024 were partially offset by increased interest on our debt of $0.5 million and $0.2 million, respectively, primarily due to the $50.0 million in total draws on our credit facility in April 2025 and July 2025 and our draw of the $100.0 million available under Term Loan 4 in December 2024, partially offset by our December 2024 repayment of the $72.1 million loan secured by the JW Marriott New Orleans. In addition, interest expense increased $0.2 million and $0.6 million during the third quarter and first nine months of 2025 as compared to the same periods in 2024, respectively, due to increased amortization of deferred financing costs related to costs incurred to extend the maturity of Term Loan 3 in April 2025, on the issuance of Term Loan 4 in December 2024, and related to the Third Amended and Restated Credit Agreement entered into in September 2025 (the “Amended Credit Agreement”). Interest expense during the third quarter of 2025 also increased $0.5 million as compared to the third quarter of 2024 due to a decrease in capitalized interest related to the extensive renovation work at The Confidante Miami Beach as it transitioned to Andaz Miami Beach.

Previous wording

Our weighted average interest rate per annum, including our variable rate debt obligations and excluding capitalized interest, was approximately 5.5% and 5.8% at June 30, 2025 and 2024, respectively. Approximately 51.0% and 51.1% of our outstanding debt had fixed interest rates or had been swapped to fixed interest rates at June 30, 2025 and 2024, respectively.

Current wording

Our weighted average interest rate per annum, including our variable rate debt obligations and excluding capitalized interest, was approximately 5.2% and 5.7% at September 30, 2025 and 2024, respectively. Approximately 70.4% and 51.1% of our outstanding debt had fixed interest rates or had been swapped to fixed interest rates at September 30, 2025 and 2024, respectively.

Previous wording

(Loss) gain on sale of assets, net. (Loss) gain on sale of assets, net totaled a loss of $8.8 million for both the second quarter and first six months of 2025, and zero and a net gain $0.5 million for the second quarter and first six months of 2024, respectively. In the second quarter and first six months of 2025, we recognized an $8.8 million loss on our sale of the Hilton New Orleans St. Charles. In the first six months of 2024, we recognized an additional $0.5 million net gain related to a contingency resolution at a hotel sold in a prior year.

Current wording

(Loss) gain on sale of assets, net. (Loss) gain on sale of assets, net totaled zero for both the third quarters of 2025 and 2024, and a loss of $8.8 million and a net gain of $0.5 million for the first nine months of 2025 and 2024, respectively. In the first nine months of 2025, we recognized an $8.8 million loss on our sale of the Hilton New Orleans St. Charles. In the first nine months of 2024, we recognized an additional $0.5 million net gain related to a contingency resolution at a hotel sold in a prior year.

Previous wording

Gain on extinguishment of debt. Gain on extinguishment of debt totaled zero for both the second quarter and first six months of 2025, and nominal amounts for the second quarter and first six months of 2024. In the second quarter and first six months of 2024, we recorded nominal gains associated with reassessments of the remaining potential employee-related obligations held in escrow associated with our assignment of a hotel to the hotel’s mortgage holder in 2020.

Current wording

(Loss) gain on extinguishment of debt. (Loss) gain on extinguishment of debt totaled a loss of $0.2 million and zero for the third quarters of 2025 and 2024, respectively, and a loss of $0.2 million and a gain of $0.1 million for the first nine months of 2025 and 2024, respectively. In the third quarter and first nine months of 2025, we recorded a loss of $0.2 million related to the write-off of unamortized deferred financing costs in connection with the recast of our credit facilities. In the first nine months of 2024, we recorded a $0.1 million gain associated with reassessments of the remaining potential employee-related obligations held in escrow associated with our assignment of a hotel to the hotel’s mortgage holder in 2020.

Previous wording

In the second quarter and first six months of 2025, we recognized net current income tax provisions of $37,000 and $0.1 million, respectively, resulting from current state and federal income tax expenses.

Current wording

In the third quarter and first nine months of 2025, we recognized net current income tax provisions of $0.1 million and $0.3 million, respectively, resulting from current state and federal income tax expenses.

Previous wording

In the second quarter and first six months of 2024, we recognized a current income tax provision of $0.3 million and a net current income tax benefit of $0.6 million, respectively, resulting from current state and federal income tax expenses, net of any refunds.

Current wording

In the third quarter and first nine months of 2024, we recognized net current income tax benefits of $0.5 million and $1.1 million, respectively, resulting from current state and federal income tax expenses, net of any refunds.

Previous wording

The annual dividend rate on the Series G preferred stock for the second quarter and first six months of 2025 was the greater of 4.5% or the rate equal to the Montage Healdsburg’s annual net operating income yield on our total investment in the resort. For the second quarter and first six months of 2024, the annual dividend rate on the Series G preferred stock was 3.0% or the rate equal to the Montage Healdsburg’s annual net operating yield on our total investment in the resort. In the third quarter of 2025, the dividend rate will increase to the greater of 6.5% or the rate equal to the Montage Healdsburg’s annual net operating income yield on the Company’s total investment in the resort.

Current wording

The annual dividend rate on the Series G preferred stock increased in the third quarter of 2025 to the greater of 6.5% or the rate equal to the Montage Healdsburg’s annual net operating income yield on the Company’s total investment in the resort, resulting in a dividend rate of 6.5% for the third quarter of 2025. Prior to this increase, during the period from the third quarter of 2024 through the second quarter of 2025, the annual dividend rate on the Series G preferred stock was the greater of 4.5% or the rate equal to the Montage Healdsburg’s annual net operating income yield on the Company’s total investment in the resort, and during the period from the first quarter of 2024 through the second quarter of 2024, the annual dividend rate on the Series G preferred stock was the greater of 3.0% or the rate equal to the Montage Healdsburg’s annual net operating income yield on the Company’s total investment in the resort.

Previous wording

The following table reconciles our unaudited net income to EBITDAre and Adjusted EBITDAre for the three and six months ended June 30, 2025 and 2024 (in thousands):

Current wording

The following table reconciles our unaudited net income to EBITDAre and Adjusted EBITDAre for the three and nine months ended September 30, 2025 and 2024 (in thousands):

Previous wording

Adjusted EBITDAre decreased $0.8 million, or 1.1%, in the second quarter of 2025 as compared to the second quarter of 2024, and increased $1.9 million, or 1.5%, in the first six months of 2025 as compared to the first six months of 2024 primarily due to the following:

Current wording

Adjusted EBITDAre decreased $3.5 million, or 6.6%, in the third quarter of 2025 as compared to the third quarter of 2024, and decreased $1.6 million, or 0.9%, in the first nine months of 2025 as compared to the first nine months of 2024 primarily due to the following:

Previous wording

The following table reconciles our unaudited net income to FFO attributable to common stockholders and Adjusted FFO attributable to common stockholders for the three and six months ended June 30, 2025 and 2024 (in thousands):

Current wording

The following table reconciles our unaudited net income to FFO attributable to common stockholders and Adjusted FFO attributable to common stockholders for the three and nine months ended September 30, 2025 and 2024 (in thousands):

Previous wording

Adjusted FFO attributable to common stockholders decreased $0.9 million, or 1.6%, and increased $3.1 million, or 3.3%, in the second quarter and first six months of 2025, respectively, as compared to the same periods in 2024 primarily due to the same reasons noted in the discussion above regarding Adjusted EBITDAre.

Current wording

Adjusted FFO attributable to common stockholders decreased $5.1 million, or 13.9%, and decreased $2.0 million, or 1.5%, in the third quarter and first nine months of 2025, respectively, as compared to the same periods in 2024 primarily due to the same reasons noted in the discussion above regarding Adjusted EBITDAre.

Previous wording

During the periods presented, our sources of cash included our operating activities and working capital, as well as proceeds from a hotel disposition, our credit facility, key money, and property insurance. Our primary uses of cash were for capital expenditures for hotels and other assets, the acquisition of a hotel, operating expenses, repurchases of our common stock, repayments of notes payable, payment of deferred financing costs, and dividends and distributions on our preferred and common stock. We cannot be certain that the sources of funds we have relied on in the past will be available in the future.

Current wording

During the periods presented, our sources of cash included our operating activities and working capital, as well as proceeds from a hotel disposition, our credit facility and term loans, key money, and property insurance. Our primary uses of cash were for capital expenditures for hotels and other assets, the acquisition of a hotel and land adjacent to one of our hotels, operating expenses, repurchases of our common stock, repayments of our credit facility and notes payable, payments of deferred financing costs, and dividends and distributions on our preferred and common stock. We cannot be certain that the sources of funds we have relied on in the past will be available in the future.

Previous wording

Operating activities*.* Our net cash provided by or used in operating activities fluctuates primarily as a result of changes in the net cash generated by our hotels, offset by the cash paid for corporate expenses. Our net cash provided by or used in operating activities may also be affected by changes in our portfolio resulting from hotel acquisitions, dispositions or renovations. Net cash provided by operating activities was $90.8 million in the first six months of 2025 as compared to $93.3 million in the first six months of 2024. The net decrease in cash provided by operating activities during the first six months of 2025 as compared to the same period in 2024 was primarily due to decreases in interest income resulting from our lower cash balances and increases in corporate-level expenses, partially offset by additional operating cash provided by the increase in travel demand benefiting our hotels as well as the acquisition of the Hyatt Regency San Antonio Riverwalk and the post-renovation ramp-up of the Marriott Long Beach Downtown.

Current wording

Operating activities*.* Our net cash provided by or used in operating activities fluctuates primarily as a result of changes in the net cash generated by our hotels, offset by the cash paid for corporate expenses. Our net cash provided by or used in operating activities may also be affected by changes in our portfolio resulting from hotel acquisitions, dispositions or renovations. Net cash provided by operating activities was $145.1 million in the first nine months of 2025 as compared to $139.9 million in the first nine months of 2024. The net increase in cash provided by operating activities during the first nine months of 2025 as compared to the same period in 2024 was primarily due to additional operating cash provided by the increase in travel demand benefiting our hotels, as well as the acquisition of the Hyatt Regency San Antonio Riverwalk and the post-renovation ramp-ups of Marriott Long Beach Downtown and Andaz Miami Beach. These increases were partially offset by decreases in interest income resulting from our lower cash balances and lower interest rates, along with increases in corporate-level expenses.

Previous wording

Investing activities. Our net cash provided by or used in investing activities fluctuates primarily as a result of acquisitions, dispositions and renovations of hotels and other assets. Net cash used in investing activities during the first six months of 2025 as compared to the first six months of 2024 was as follows (in thousands):

Current wording

Investing activities. Our net cash provided by or used in investing activities fluctuates primarily as a result of acquisitions, dispositions and renovations of hotels and other assets. Net cash used in investing activities during the first nine months of 2025 as compared to the first nine months of 2024 was as follows (in thousands):

Previous wording

During the first six months of 2025, we invested $56.0 million for renovations and additions to our portfolio and other assets. This cash outflow was partially offset by $46.3 million of proceeds received from the sale of the Hilton New Orleans St. Charles, $4.0

Current wording

During the first nine months of 2025, we invested $73.7 million for renovations and additions to our portfolio and other assets, and we purchased land adjacent to the Oceans Edge Resort & Marina for $1.3 million. These cash outflows were partially offset by $46.3 million of proceeds received from the sale of the Hilton New Orleans St. Charles, $4.0 million in key money received from the manager of one of our hotels pursuant to the hotel’s management agreement, and $0.9 million in property insurance proceeds received related to 2025 water damage at The Westin Washington, DC Downtown and 2023 fire damage at Hilton San Diego Bayfront.

Previous wording

During the first six months of 2024, we paid $229.3 million to acquire the Hyatt Regency San Antonio Riverwalk, including closing costs and prorations and we invested $68.7 million for renovations and additions to our portfolio and other assets. These cash outflows were slightly offset by $0.2 million in property insurance proceeds received related to 2023 fire damage at the Hilton San Diego Bayfront.

Current wording

During the first nine months of 2024, we paid $229.3 million to acquire the Hyatt Regency San Antonio Riverwalk, including closing costs and prorations and we invested $110.2 million for renovations and additions to our portfolio and other assets. These cash outflows were slightly offset by $0.3 million in property insurance proceeds received related to 2023 fire damage at the Hilton San Diego Bayfront.

Previous wording

Financing activities. Our net cash provided by or used in financing activities fluctuates primarily as a result of our dividends and distributions paid, issuance and repurchase of common stock, issuance and repayment of debt, including draws on our credit facility and term loans, and issuance and redemption of other forms of capital, including preferred equity. Net cash used in financing activities during the first six months of 2025 as compared to the first six months of 2024 was as follows (in thousands):

Current wording

Financing activities. Our net cash provided by or used in financing activities fluctuates primarily as a result of our dividends and distributions paid, issuance and repurchase of common stock, issuance and repayment of debt, including draws on our credit facility and term loans, and issuance and redemption of other forms of capital, including preferred equity. Net cash used in financing activities during the first nine months of 2025 as compared to the first nine months of 2024 was as follows (in thousands):

Previous wording

During the first six months of 2025, we paid $98.5 million to repurchase 11,122,861 shares of our outstanding common stock, $4.3 million to repurchase common stock to satisfy the tax obligations in connection with the vesting of restricted common stock issued to employees, $0.5 million in deferred financing costs related to the extension of Term Loan 3’s maturity, and $44.3 million in dividends and distributions to our preferred and common stockholders. These cash outflows were partially offset by a $27.0 million draw on our credit facility.

Current wording

During the first nine months of 2025, we paid $100.7 million to repurchase 11,381,731 shares of our outstanding common stock, $4.3 million to repurchase common stock to satisfy the tax obligations in connection with the vesting of restricted common stock issued to employees, and $66.1 million in dividends and distributions to our preferred and common stockholders. In addition, in September 2025 we entered into the Amended Credit Agreement and received $149.6 million associated with additional borrowing on our term loans and repaid $64.6 million to lenders as a result of adjustments to their commitments in the Amended Credit Agreement. We used a portion of the proceeds received to repay the $50.0 million we drew down on our revolving credit facility in April 2025 and July 2025. During the first nine months of 2025, we also paid $18.0 million in deferred financing costs related to the extension of the previous Term Loan 3’s maturity and the Amended Credit Agreement.

Previous wording

During the first six months of 2024, we paid $3.6 million to repurchase 359,008 shares of our common stock, $3.2 million to repurchase common stock to satisfy the tax obligations in connection with the vesting of restricted common stock issued to employees, $1.1 million in scheduled principal payments on the loan secured by the JW Marriott New Orleans, and $47.2 million in dividends and distributions to our preferred and common stockholders.

Current wording

During the first nine months of 2024, we paid $26.3 million to repurchase 2,670,373 shares of our common stock, $4.2 million to repurchase common stock to satisfy the tax obligations in connection with the vesting of restricted common stock issued to employees, $1.6 million in scheduled principal payments on the loan secured by the JW Marriott New Orleans, and $69.7 million in dividends and distributions to our preferred and common stockholders.

Previous wording

While inflation began to decrease in 2024, the recent uncertainty in the market in connection with certain international economic and political relationships, including political disputes and the imposition of tariffs affecting commodity costs, has had a negative effect on our operations. Prior to the recently announced tariffs, we experienced increases in wages, employee-related benefits, food costs, commodity costs, including those used to renovate or reposition our hotels, property taxes, liability insurance, utilities, and borrowing costs. The imposition of recently announced tariffs could exacerbate existing cost pressures and create additional inflationary pressures that could further impact our results of operations. The ability of our hotel operators to adjust rates has historically mitigated the impact of increased operating costs on our financial position and results of operations. In addition, any increases in interest rates by the Federal Reserve Board in response to increases in inflation will negatively affect our variable rate debt, resulting in increased interest payments.

Current wording

While inflation began to decrease in 2024, the recent uncertainty in the market in connection with certain international economic and political relationships, including political disputes and the imposition of tariffs affecting commodity costs, has had a negative effect on our operations. Prior to the recently announced tariffs, we experienced increases in wages, employee-related benefits, food costs, commodity costs, including those used to renovate or reposition our hotels, property taxes, liability insurance, utilities, and borrowing costs. The imposition of recently announced tariffs could exacerbate existing cost pressures and create additional inflationary pressures that could further impact our results of operations. The ability of our hotel operators to adjust rates has historically mitigated the impact of increased operating costs on our financial position and results of operations.

Previous wording

Cash Balance. As of June 30, 2025, our unrestricted cash balance was $73.6 million. We believe that our current unrestricted cash balance and our ability to draw the $473.0 million capacity available for borrowing under the unsecured revolving credit facility will enable us to successfully manage our Company.

Current wording

Cash Balance. As of September 30, 2025, our unrestricted cash balance was $121.1 million. We believe that our current unrestricted cash balance and our ability to draw the $500.0 million capacity available for borrowing under the unsecured revolving credit facility will enable us to successfully manage our Company.

Previous wording

Debt. As of June 30, 2025, we had $872.0 million of debt, $144.9 million of cash and cash equivalents, including restricted cash, and total assets of $3.0 billion. We believe that by maintaining appropriate debt levels, staggering maturity dates, and

Current wording

Debt. As of September 30, 2025, we had $930.0 million of debt, $197.6 million of cash and cash equivalents, including restricted cash, and total assets of $3.0 billion. We believe that by maintaining appropriate debt levels, staggering maturity dates, and maintaining a highly flexible structure, we will have lower capital costs than more highly leveraged companies, or companies with limited flexibility due to restrictive covenants.