Seaport Entertainment Group Inc.

Previous wording

Unless the context otherwise requires, references in this Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) to “Seaport Entertainment Group,” “SEG,” the “Company,” “we,” “us,” or “our” shall mean the assets, liabilities, and operating activities related to the Seaport Entertainment division of Howard Hughes Holdings Inc. (“HHH”) that was transferred to Seaport Entertainment Group Inc. on July 31, 2024 in connection with the Company’s separation from HHH (the “Separation”), as well as the assets, liabilities, and operating activities of Seaport Entertainment Group Inc. The following discussion should be read as a supplement to and should be read in conjunction with our Unaudited Consolidated and Combined Financial Statements (“Unaudited Consolidated and Combined Financial Statements”) and the related notes included elsewhere in this quarterly report on Form 10-Q (“Quarterly Report”). This discussion contains forward-looking statements that involve risks, uncertainties, assumptions, and other factors, including those described elsewhere in this Quarterly Report and in our Annual Report on Form 10-K for the year ended December 31, 2024. Actual results could differ materially from those discussed in or implied by forward-looking statements as a result of these factors. You are cautioned not to place undue reliance on this information which speaks only as of the date of this Quarterly Report. We are not obligated to update this information, whether as a result of new information, future events or otherwise, except as may be required by law.

Current wording

Unless the context otherwise requires, references in this Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) to “Seaport Entertainment Group,” “SEG,” the “Company,” “we,” “us,” or “our” shall mean the assets, liabilities, and operating activities of Seaport Entertainment Group Inc. The following discussion should be read as a supplement to and should be read in conjunction with our Unaudited Consolidated Financial Statements (“Unaudited Consolidated Financial Statements”) and the related notes included elsewhere in this quarterly report on Form 10-Q (“Quarterly Report”). This discussion contains forward-looking statements that involve risks, uncertainties, assumptions, and other factors, including those described elsewhere in this Quarterly Report and in our Annual Report on Form 10-K for the year ended December 31, 2025. Actual results could differ materially from those discussed in or implied by forward-looking statements as a result of these factors. You are cautioned not to place undue reliance on this information which speaks only as of the date of this Quarterly Report. We are not obligated to update this information, whether as a result of new information, future events or otherwise, except as may be required by law.

Previous wording

All references to numbered Notes are specific to Unaudited Notes to the Consolidated and Combined Financial Statements included in this Quarterly Report. Capitalized terms used, but not defined, in this MD&A have the same meanings as in such Notes.

Current wording

All references to numbered Notes are specific to the Unaudited Notes to the Consolidated Financial Statements included in this Quarterly Report. Capitalized terms used, but not defined, in this MD&A have the same meanings as in such Notes.

Previous wording

Changes for monetary amounts between periods presented are calculated based on the amounts in thousands of dollars stated in our Unaudited Consolidated and Combined Financial Statements and then rounded to the nearest million. Therefore, certain changes may not recalculate based on the amounts rounded to the nearest million.

Current wording

Changes for monetary amounts between periods presented are calculated based on the amounts in thousands of dollars stated in our Unaudited Consolidated Financial Statements and then rounded to the nearest million. Therefore, certain changes may not recalculate based on the amounts rounded to the nearest million.

Previous wording

The Company was formed to own, operate, and develop a unique collection of assets positioned at the intersection of entertainment and real estate. Our existing portfolio encompasses a wide range of leisure and recreational activities, including live concerts, fine dining, nightlife, professional sports, and high-end and experiential retail. We primarily analyze our portfolio of assets through the lens of our three operating segments: (1) Hospitality, (2) Entertainment (previously Sponsorships, Events, and Entertainment), and (3) Landlord Operations, and are focused on realizing value for stockholders primarily through dedicated management of existing assets, expansion of partnerships, strategic acquisitions, and completion of development and redevelopment projects.

Current wording

The Company owns and operates a unique collection of assets positioned at the intersection of entertainment and real estate. Our existing portfolio encompasses a wide range of leisure and recreational activities, including live concerts, dining, nightlife, professional sports, and experiential retail. We primarily analyze our portfolio of assets through the lens of our three operating segments: (1) Hospitality, (2) Entertainment, and (3) Landlord Operations, and are focused on realizing value for stockholders primarily through dedicated management of existing assets, expansion of partnerships, strategic acquisitions, and completion or monetization of development and redevelopment projects.

Previous wording

Hospitality represents our ownership interests in various food and beverage operating businesses and sponsorship agreements related to these businesses. We own, either wholly or through partnerships with third parties, and operate, including through license and management agreements, fine dining and casual dining restaurants, cocktail bars, nightlife and entertainment venues (The Fulton, Mister Dips, Carne Mare, Malibu Farm and Gitano), as well as the Tin Building by Jean-Georges, which offers a variety of culinary experiences, including restaurants, bars, grocery markets, retail, and private dining, and our unconsolidated venture, the Lawn Club. These businesses are all our tenants and are part of our Landlord Operations. We also have a 25% interest in Jean-Georges Restaurants. We aim to capitalize on opportunities in the food and beverage space to leverage growing consumer appetite for unique restaurant experiences as a catalyst to further expand the Company’s culinary footprint. Our Hospitality-related period-over-period comparisons do not adjust for operational revisions to our asset strategies from period to period, such as opening or closing restaurant concepts or redirecting operations to use space for private events and/or concerts.

Current wording

Hospitality represents our ownership interests in various food and beverage operating businesses and sponsorship agreements related to these businesses. We own, either wholly or through partnerships with third parties, and operate, including through license and management agreements, fine dining and casual dining restaurants, cocktail bars, nightlife and entertainment venues (The Fulton, Mister Dips, Carne Mare, and Gitano) and our unconsolidated venture, the Lawn Club. These businesses are all our tenants and are part of our Landlord Operations. We also have a 25% interest in JG. We aim to capitalize on opportunities in the food and beverage space to leverage growing consumer appetite for unique restaurant experiences as a catalyst to further expand the Company’s culinary footprint. Our Hospitality-related period-over-period comparisons do not adjust for operational revisions to our asset strategies from period to period, such as opening or closing restaurant concepts or redirecting operations to use space for private events and/or concerts.

Previous wording

agreements related to these venues. The Aviators are a Triple-A affiliate of the Oakland Athletics and play at the Las Vegas Ballpark, a 10,000-person capacity ballpark located in Downtown Summerlin. The Rooftop at Pier 17 is a premier outdoor concert venue that hosts a popular Summer Concert Series featuring emerging and established musicians alike. We see The Rooftop at Pier 17 as an opportunity to continue to drive events and entertainment growth as we believe that the demand for live music and private events is strong and accelerating.

Current wording

Entertainment includes the Las Vegas Aviators Triple-A Minor League Baseball team (the “Aviators”) and the Las Vegas Ballpark, our interest in and to the Fashion Show Mall Air Rights, events and concerts at The Rooftop at Pier 17, and sponsorship agreements related to these venues. The Aviators are a Triple-A affiliate of the Athletics Major League Baseball team and play at the Las Vegas Ballpark, a 10,000-person capacity ballpark located in Downtown Summerlin. The Rooftop at Pier 17 is one of the premier concert venues in New York City that hosts a popular Seaport Concert Series featuring emerging and established musicians alike. We see The Rooftop at Pier 17 as an opportunity to continue to drive events and entertainment growth as we believe that the demand for live music and private events is strong and accelerating.

Previous wording

The accompanying Unaudited Consolidated and Combined Financial Statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). The accompanying Unaudited Consolidated and Combined Financial Statements may not be indicative of the Company’s future performance and do not necessarily reflect what the Company’s financial position, results of operations, and cash flows would have been had the Company operated as a standalone company during all of the periods presented.

Current wording

The accompanying Unaudited Consolidated Financial Statements represent the assets, liabilities, and operations of Seaport Entertainment Group Inc. The accompanying Unaudited Consolidated Financial Statements have been prepared in conformity with accounting principles generally accepted in the United States (“GAAP”). The accompanying Unaudited Consolidated Financial Statements may not be indicative of the Company’s future performance.

Previous wording

For an additional discussion on the basis of presentation of the accompanying Unaudited Consolidated and Combined Financial Statements, see Note 1 –Summary of Significant Accounting Policies in the Unaudited Notes to the Consolidated and Combined Financial Statements included in this Quarterly Report.

Current wording

For an additional discussion on the basis of presentation of the accompanying Unaudited Consolidated Financial Statements, see Note 1 –Summary of Significant Accounting Policies in the Unaudited Notes to the Consolidated Financial Statements included in this Quarterly Report.

Previous wording

The Company owns 100% of the Tin Building which was completed and placed in service in our Landlord Operations segment during the third quarter of 2022. The Company leases 100% of the rentable space in the Tin Building to the Tin Building by Jean-Georges joint venture, a Hospitality segment business in which we recognized 100% of the economic interest in accordance with the equity method through December 31, 2024. As of January 1, 2025, in conjunction with the internalization of food and beverage operations, the Company began consolidating the Tin Building by Jean-Georges joint venture within the Hospitality segment. The Company recognizes lease payments from the Tin Building by Jean-Georges in Rental revenue within the Landlord Operations segment. As the Company recognizes 100% of operating income or losses from the Tin Building by Jean-Georges, the Tin Building lease has no net impact to the Company’s total net loss. However, Landlord Operations Adjusted EBITDA, as defined below, includes only rental revenue related to the Tin Building lease payments, and does not include rent expense in Equity in losses from unconsolidated ventures for the three and nine months ended September 30, 2024 or rent expense for the three and nine months ended September 30, 2025 included in Hospitality costs in Hospitality Adjusted EBITDA. The rental revenue and hospitality costs associated with the lease payments are eliminated in the Unaudited Consolidated Statements of Operations for the three and nine months ended September 30, 2025. See Note 2 –Investments in Unconsolidated Ventures in the Unaudited Notes to the Consolidated and Combined Financial Statements included in this Quarterly Report for additional details related to the Tin Building by Jean-Georges joint venture and unaudited pro forma information.

Current wording

The Company owns 100% of the Tin Building which was completed and placed in service in our Landlord Operations segment during the third quarter of 2022. As of and through February 2026, the Company leased 100% of the rentable space in the Tin Building to the Tin Building by Jean-Georges, a Hospitality segment business. The rental revenue and hospitality costs associated with the lease payments are eliminated in the Consolidated Statements of Operations for the three months ended March 31, 2025 and 2026.

Previous wording

During the fall and winter months, our operations tend to slow down due to the colder weather, which results in fewer outdoor events and less foot traffic at our restaurants, and the end of the Aviators baseball season. This seasonality pattern results in lower revenues during these periods. Moreover, severe winter weather conditions, such as snowstorms and freezing temperatures, can further deter customers from visiting our restaurants, further impacting our revenues and cash

Current wording

During the fall and winter months, our operations tend to slow down due to the colder weather, which results in fewer outdoor events and less foot traffic at our restaurants, and the end of the Aviators baseball season. This seasonality pattern results in lower revenues during these periods. Moreover, severe winter weather conditions, such as snowstorms and freezing temperatures, can further deter customers from visiting our restaurants, further impacting our revenues and cash flow. Our seasonality also results in fluctuations in cash and cash equivalents, accounts receivable, deferred expenses, and accounts payable and other liabilities at different times during the year.

Previous wording

As of September 30, 2025, the average remaining term of our occupied retail, office, and other properties leases where we are the lessor was approximately seven years, excluding renewal options. The stability of the rental revenue generated by our properties depends principally on our tenants’ ability to pay rent and our ability to collect rents, renew expiring leases, re-lease space upon the expiration or other termination of leases, lease currently vacant properties, and maintain or increase rental rates at our leased properties. To the extent our properties become vacant, we would forego rental income while remaining responsible for the payment of property taxes and maintaining the property until it is re-leased, which could negatively impact our operating results. In January 2025, the Company entered into a lease with immersive entertainment and experience creator, Meow Wolf, to occupy approximately 74,000 square feet of vacant space in Pier 17, inclusive of a space currently occupied and expiring in December 2025. During the nine months ending September 30, 2025, an office tenant of Pier 17 exercised a termination option within its lease. As a result of the tenant exercising the termination option, the lease term now expires three years earlier than the stated maturity date. The Company received a $2.0 million payment during the nine months ended September 30, 2025 upon exercise of the termination option. An additional $2.0 million payment is due at the end of the revised term in February 2027. The Company recorded the payment received during the nine months ended September 30, 2025 in accounts payable and other liabilities on our Unaudited Consolidated Balance Sheet as of September 30, 2025 and the Company will recognize the payment as revenue on the Statement of Operations on a straight-line basis over the revised term of the lease. We continue to monitor our lease renewals and occupancy rates. As of September 30, 2025, our real estate assets at the Seaport were 83% leased or programmed.

Current wording

As of March 31, 2026 and December 31, 2025, the weighted average remaining term of our retail, office, and other properties leases where we are the lessor was approximately seven years, excluding renewal options. The stability of the rental revenue generated by our properties depends principally on our tenants’ ability to pay rent and our ability to collect rents, renew expiring leases, re-lease space upon the expiration or other termination of leases, lease currently vacant properties, and maintain or increase rental rates at our leased properties. To the extent our properties become vacant, we would forego rental income while remaining responsible for the payment of property taxes and maintaining the property until it is re-leased, which could negatively impact our operating results. As of March 31, 2026, our real estate assets at the Seaport were 88% leased or programmed.

Previous wording

Other adverse economic conditions, including slower economic growth and the potential for a recession, could also have an adverse effect on us, our tenants and consumers. For example, rapid changes in U.S. trade policy, new or increased tariffs, retaliatory tariffs and global trade disruptions could negatively impact us or our tenants, including by further aggravating inflation, increasing costs, disrupting supply chains and negatively affecting consumer sentiment and spending.

Current wording

Other adverse economic conditions, including slower economic growth and the potential for a recession, could also have an adverse effect on us, our tenants and consumers. For example, geopolitical conflict, rapid changes in U.S. trade policy, new or increased tariffs, retaliatory tariffs and global trade disruptions could negatively impact us or our tenants, including by further aggravating inflation, increasing costs, disrupting supply chains and negatively affecting consumer sentiment and spending.

Previous wording

Net loss attributable to common stockholders increased $0.7 million, or 2%, to $33.2 million for the three months ended September 30, 2025, compared to $32.5 million in the prior-year period, primarily due to a $7.2 million decrease to other income (loss), net, a $4.0 million increase in loss on assets held for sale, a $0.8 million decrease to depreciation and amortization, a $3.0 million decrease in interest expense, and a decrease of $2.0 million in operating costs.

Current wording

Net loss attributable to common stockholders increased $12.2 million, or 38%, to $44.1 million for the three months ended March 31, 2026, compared to $31.9 million in the prior-year period, primarily due to a $2.6 million decrease in hospitality revenue, a $1.0 million decrease in rental revenue, a $2.2 million increase to other (loss), net, a $0.3 million increase in provision for impairment, a $12.0 million increase to depreciation and amortization, a $1.3 million increase in interest expense, partially offset by a $5.5 million decrease in hospitality costs, decrease of $1.1 million in operating costs, and a decrease of $1.7 million of general and administrative expense.

Previous wording

Items Included in Segment Adjusted EBITDA

Current wording

Items Included in Segment Operating EBITDA

Previous wording

Segment Adjusted EBITDA for each segment includes certain intersegment revenues and expenses that eliminate in the Consolidated Statements of Operations for all periods presented. See “Segment Operating Results” for discussion of significant variances in revenues and expenses included in Adjusted EBITDA.

Current wording

Segment Operating EBITDA for each segment includes certain intersegment revenues and expenses that eliminate in the Consolidated Statements of Operations for all periods presented. See “Segment Operating Results” for discussion of significant variances in revenues and expenses included in Segment Operating EBITDA.

Previous wording

Items Excluded from Segment Adjusted EBITDA

Current wording

Items Excluded from Segment Operating EBITDA

Previous wording

General and Administrative. General and administrative costs decreased $17.5 million to $36.0 million for the nine months ended September 30, 2025, compared to $53.5 million in the prior-year period, primarily due to a $17.1 million decrease in separation costs.

Current wording

General and Administrative. General and administrative costs decreased $1.7 million to $8.1 million for the three months ended March 31, 2026, compared to $9.8 million in the prior-year period, primarily due to a $0.7 million decrease

Previous wording

Interest Income (Expense). Interest income increased $10.6 million to $1.7 million for the nine months ended September 30, 2025 compared to a net expense of $8.9 million in the prior-year period. This change is primarily due to a $4.1 million increase in interest income, a $3.5 million increase inamounts capitalized to development assets, and a $3.0 million decrease in interest expense on secured mortgages payable.

Current wording

Interest Income (Expense). Interest income decreased $1.3 million to $0.3 million expense for the three months ended March 31, 2026 compared to $1.0 million income in the prior-year period. This change is primarily due to a $0.7 million decrease in interest income earned, and a $0.6 million decrease inamounts capitalized to development assets which increased interest expense.

Previous wording

Equity in Earnings (Losses) from Unconsolidated Ventures** **

Current wording

*Equity in Earnings (Losses) from Unconsolidated Ventures.*Equity in earnings (losses) from unconsolidated ventures decreased $1.1 million to losses of $1.0 million for the three months ended March 31, 2026, compared to earnings of $0.2 million in the prior-year period. This change was primarily due to a $0.4 million increase in losses for the Lawn Club and a $0.7 million increase in losses for JG.

Previous wording

Hospitality costs increased $12.1 million to $23.0 million for the three months ended September 30, 2025, compared to $10.9 million in the prior-year period. This is primarily resulting from the consolidation of the Tin Building by Jean-Georges in 2025.

Current wording

Hospitality costs decreased $7.7 million to $12.7 million for the three months ended March 31, 2026, compared to $20.4 million in the prior-year period. This is primarily resulting from the closure of the Tin Building by Jean-Georges in February 2026.

Previous wording

Entertainment costs increased $0.9 million to $20.5 million for the three months ended September 30, 2025 compared to $19.7 million in the prior-year period. This change was primarily due to increased costs related to event expenses and operating costs at the Aviators compared to the prior year period.

Current wording

Entertainment costs increased $0.2 million to $7.3 million for the three months ended March 31, 2026 compared to $7.1 million in the prior-year period. This change was primarily due to increased costs related operating costs at the Aviators compared to the prior year period, partially offset by decreased rooftop event operating costs.

Previous wording

The following table presents segment Adjusted EBITDA for Landlord Operations:

Current wording

The following table presents segment Operating EBITDA for Landlord Operations:

Previous wording

Rental revenue increased $0.2 million to $8.5 million for the three months ended September 30, 2025, compared to $8.3 million in the prior-year period. This change was primarily driven by a decrease in reserves affecting rental revenue compared to the prior-year period, recognition of termination fee revenue, partially offset by lease amendment rental adjustments.

Current wording

Rental revenue decreased $3.3 million to $5.2 million for the three months ended March 31, 2026, compared to $8.5 million in the prior-year period. This change was primarily driven by a decrease due to the closure of the Tin Building by Jean-Georges in February 2026, which reduced intercompany rental revenue, and an increase in reserves compared to the prior-year period.

Previous wording

Other revenue decreased $0.1 million to $0.5 million for the three months ended September 30, 2025, compared to $0.6 million for the prior-year period as a result of a decrease in sponsorship revenues attributable to landlord operations.

Current wording

Other revenue decreased $47,000 to $0.3 million for the three months ended March 31, 2026, compared to $0.3 million for the prior-year period as a result of a decrease in sponsorship revenues attributable to landlord operations.

Previous wording

Operating costs decreased $1.9 million to $7.5 million for the three months ended September 30, 2025, compared to $9.4 million in the prior year period. This change was due to decreases in marketing, insurance, and other landlord specific costs period over period.

Current wording

Operating costs decreased $1.1 million to $7.0 million for the three months ended March 31, 2026, compared to $8.1 million in the prior year period. This change was due to decreases in marketing, maintenance, insurance, and other landlord specific costs period over period.

Previous wording

As of September 30, 2025 and December 31, 2024, our cash and cash equivalents were $106.2 million and $165.7 million, respectively. As of September 30, 2025 and December 31, 2024, our restricted cash was $10.6 million and $2.2 million, respectively. Prior to the Separation, we operated as a division within HHH’s consolidated structure, which used a centralized approach to cash management and financing of our operations. This arrangement is not reflective of the manner in which we would have financed our operations had we been a standalone, publicly traded company during the entirety of the nine month period ended September 30, 2024 and during the full year ended December 31, 2024. Restricted cash is segregated in escrow accounts related to payment of principal and interest on the Company’s outstanding mortgages payable as well as the deposit related to the sale of 250 Water Street.

Current wording

As of March 31, 2026 and December 31, 2025, our cash and cash equivalents were $114.8 million and $77.8 million, respectively. As of March 31, 2026 and December 31, 2025, our restricted cash was $29.9 million and $9.6 million, respectively. Restricted cash is segregated in escrow accounts related to payment of principal and interest on the Company’s outstanding mortgages payable as well as the escrow funds related to post-closing obligations related to the sale of the 250 Water Street.

Previous wording

HHH’s third-party long-term debt and the related interest expense were not allocated to us for any of the periods presented as we were not the legal obligor nor were we a guarantor of such debt. As of each of September 30, 2025 and December 31, 2024, we had third-party mortgages payable of $101.4 million related to our 250 Water Street development, a variable-rate mortgage which requires monthly installments of only interest, and the Las Vegas Ballpark, a fixed-rate mortgage which requires semi-annual installments of principal and interest. As of each of September 30, 2025 and December 31, 2024, the Company’s secured mortgage loans did not have any undrawn lender commitment available to be drawn for property development. In connection with the Separation, on July 31, 2024, the variable rate mortgage related to 250 Water Street was refinanced, with HHH paying down $53.7 million of the outstanding principal balance and SEG refinancing the remaining $61.3 million at an interest rate of SOFR plus a margin of 4.5% with a scheduled maturity date of July 1, 2029. On January 1, 2025, the mortgage loan on 250 Water Street was amended, increasing the stated margin rate from 5.0% to 7.0%. As of September 30, 2025, weclassified the mortgage loan on 250 Water Street as held for sale. Commencing on the date the mortgage was classified as held for sale, we have expensed interest related to the mortgage into Interest income (expense) on the Consolidated Statement of Operations. See Note 4 –Mortgages Payable, Net in the Unaudited Notes to the Consolidated and Combined Financial Statements included in this Quarterly Report for additional information.

Current wording

As of March 31, 2026 and December 31, 2025, we had third-party mortgages payable of $38.4 million and $99.6 million, respectively. These balances included mortgages payable related to our 250 Water Street development asset, a variable-rate mortgage which required monthly installments of only interest, and the Las Vegas Ballpark, a fixed-rate mortgage which requires semi-annual installments of principal and interest. During the three months ended March 31, 2026, the Company paid off the mortgage loan on 250 Water Street in conjunction with the sale of the property. As of

Previous wording

on our ability to obtain debt or equity financing on acceptable terms. In addition, we typically must provide completion guarantees to lenders in connection with their financing for our development and redevelopment projects. Additionally, on July 31, 2024, a subsidiary of HHH that became our subsidiary in connection with the Separation, issued 10,000 shares of 14.000% Series A preferred stock, par value $0.01 per share, with an aggregate liquidation preference of $10.0 million.

Current wording

Additionally, on July 31, 2024, a subsidiary of HHH that became our subsidiary in connection with the Separation, issued 10,000 shares of 14.000% Series A preferred stock, par value $0.01 per share, with an aggregate liquidation preference of $10.0 million.

Previous wording

Management believes that our existing cash balances and restricted cash balances, along with access to capital markets, provide (i) adequate liquidity to meet all of our current and long-term (beyond 12 months) obligations when due, including our third-party mortgages payable, and (ii) adequate liquidity to fund capital expenditures and development and redevelopment projects. However, our access to, and the availability of, financing on acceptable terms and conditions in the future will be impacted by many factors, including (1) our credit ratings, including the lowering of any of our credit ratings, or the absence of a credit rating, (2) the liquidity of the overall capital markets, and (3) the current state of the economy and, accordingly, there can be no assurances that we will be able to obtain additional debt or equity financing on acceptable terms in the future, or at all, which could have a negative impact on our liquidity and capital resources. The cash flows presented in our Unaudited Consolidated and Combined Statement of Cash Flows for the nine months ended September 30, 2024 may not be indicative of the cash flows we would have recognized had we operated as a standalone publicly traded company for the entirety of that period.

Current wording

Management believes that our existing cash balances and restricted cash balances, along with access to capital markets, provide (i) adequate liquidity to meet all of our current and long-term (beyond 12 months) obligations when due, including our third-party mortgage payable, and (ii) adequate liquidity to fund capital expenditures and development and redevelopment projects. However, our access to the capital markets and the availability of financing on acceptable terms and conditions in the future will be impacted by many factors, including (1) our credit ratings, including the lowering of any of our credit ratings, or the absence of a credit rating, (2) the liquidity of the overall capital markets, and (3) the current state of the economy and, accordingly, there can be no assurances that we will be able to obtain additional debt or equity financing on acceptable terms in the future, or at all, which could have a negative impact on our liquidity and capital resources.

Previous wording

Cash used in operating activities decreased $21.4 million to $26.6 million in the nine months ended September 30, 2025, compared to $48.0 million in the prior-year period. The decrease primarily relates to changes in cash used in operating activities in each of our segments and decreased general and administrative expenses.

Current wording

Cash used in operating activities decreased $10.1 million to $10.3 million in the three months ended March 31, 2026, compared to $20.5 million in the prior-year period. The decrease primarily relates to changes in cash used in operating activities in each of our segments and decreased general and administrative expenses.

Previous wording

Cash used in investing activities decreased $61.1 million to $21.1 million in the nine months ended September 30, 2025, compared to $82.2 million in the prior-year period. The decrease in cash used in investing activities was primarily related to the consolidation of the Tin Building by Jean-Georges.

Current wording

Cash provided by investing activities increased $144.5 million to $130.0 million in the three months ended March 31, 2026, compared to $14.5 million of cash used in investing activities in the prior-year period. The increase in cash provided by investing activities was primarily related to proceeds from the sale of 250 Water Street.

Previous wording

We have material contractual obligations that arise in the normal course of business. Contractual obligations entered into prior to the Separation may not be representative of our contractual obligations profile as a standalone, publicly traded company. Our pre-Separation contractual obligations do not reflect changes that we expect to experience in the future as a result of the Separation, such as contractual arrangements that we may enter into in the future that were historically entered into by HHH for shared services.

Current wording

We have material contractual obligations that arise in the normal course of business.

Previous wording

We have outstanding mortgages payable related to the 250 Water Street development and Las Vegas Ballpark, which are collateralized by certain of the Company’s real estate assets. A summary of our mortgages payable as of September 30, 2025 and December 31, 2024 can be found in Note 4 –Mortgages Payable, Net in the Unaudited Notes to the Consolidated and Combined Financial Statements included in this Quarterly Report.

Current wording

We have an outstanding mortgage payable related to the Las Vegas Ballpark, which is collateralized by the Las Vegas Ballpark. A summary of our mortgages payable as of March 31, 2026 and December 31, 2025 can be found in Note 4 –Mortgages Payable, Net in the Unaudited Notes to the Consolidated Financial Statements included in this Quarterly Report.

Previous wording

We lease land or buildings at certain properties from third parties. Rental payments are expensed as incurred and have been, to the extent applicable, straight-lined over the term of the lease. Contractual rental expense was $1.3 million and $1.3 million for the three months ended September 30, 2025 and 2024, respectively, and $4.6 million and $5.0 million for the nine months ended September 30, 2025 and 2024, respectively. The amortization of straight-line rents included in the contractual rent amount was $0.5 million and $0.2 million for each of the three months ended September 30, 2025 and 2024, and $1.7 million and $1.4 million for each of the nine months ended September 30, 2025 and 2024, respectively. A summary of our lease obligations as of September 30, 2025 and December 31, 2024, can be found in Note 9 –Leases in the Unaudited Notes to the Consolidated and Combined Financial Statements included in this Quarterly Report.

Current wording

We lease land or buildings at certain properties from third parties. Rental payments are expensed as incurred and have been, to the extent applicable, straight-lined over the term of the lease. Contractual rental expense was $1.8 million and $1.6 million for the three months ended March 31, 2026 and 2025, respectively. The amortization of straight-line rents included in the contractual rent amount was $0.5 million and $0.6 million for the three months ended March 31, 2026 and 2025, respectively. A summary of our lease obligations as of March 31, 2026 and December 31, 2025, can be found in Note 9 –Leases in the Unaudited Notes to the Consolidated Financial Statements included in this Quarterly Report.

Previous wording

Our Unaudited Consolidated and Combined Financial Statements include all of our accounts, including our majority owned and controlled subsidiaries and variable interest entities (“VIEs”) for which we are the primary beneficiary. If the Company determined it was not the primary beneficiary of a VIE during the nine months ended September 30, 2025 and December 31, 2024, the Company did not consolidate the VIE in which it holds a variable interest.

Current wording

Our Unaudited Consolidated Financial Statements include all of our accounts, including our majority owned and controlled subsidiaries and variable interest entities (“VIEs”) for which we are the primary beneficiary. If the Company determined it was not the primary beneficiary of a VIE during the three months ended March 31, 2026 and 2025, the Company did not consolidate the VIE in which it holds a variable interest.

Previous wording

Development costs, which primarily include direct costs related to placing the asset in service associated with specific development properties, are capitalized as part of the property being developed. Construction and improvement costs incurred in connection with the development of new properties, or the redevelopment of existing properties are capitalized before they are placed into service. Costs include planning, engineering, design, direct material, labor and subcontract costs. Real estate taxes, utilities, direct legal and professional fees related to the sale of a specific unit, interest, insurance costs and certain employee costs incurred during construction periods are also capitalized. Capitalization commences when the development activities begin and cease when a project is completed, put on hold or at the date that the Company decides not to move forward with a project. Capitalized costs related to a project where the Company has determined not to move forward are expensed if they are not deemed recoverable. Capitalized interest costs are based on qualified

Current wording

Development costs, which primarily include direct costs related to placing the asset in service associated with specific development properties, are capitalized as part of the property being developed. Construction and improvement costs incurred in connection with the development of new properties, or the redevelopment of existing properties are capitalized before they are placed into service. Costs include planning, engineering, design, direct material, labor and subcontract costs. Real estate taxes, utilities, direct legal and professional fees related to the sale of a specific unit, interest, insurance costs and certain employee costs incurred during construction periods are also capitalized. Capitalization commences when the development activities begin and cease when a project is completed, put on hold or at the date that the Company decides not to move forward with a project. Capitalized costs related to a project where the Company has determined not to move forward are expensed if they are not deemed recoverable. Capitalized interest costs are based on qualified expenditures and interest rates in place during the construction period. Demolition costs associated with redevelopments are expensed as incurred unless the demolition was included in the Company’s development plans and imminent as of the acquisition date of an asset. Once the assets are placed into service, they are depreciated in accordance with the Company’s policy. In the event that management no longer has the ability or intent to complete a development, the costs previously capitalized are evaluated for impairment.

Previous wording

The capitalization of development costs requires judgment, and can directly and materially impact our results of operations because, for example, (i) if we do not capitalize costs that should be capitalized, then our operating expenses would be overstated during the development period, and the subsequent depreciation of the developed real estate would be understated, or (ii) if we capitalize costs that should not be capitalized, then our operating expenses would be understated during the development period, and the subsequent depreciation of the real estate would be overstated. For the nine months ended September 30, 2025 and 2024, we capitalized development costs of $6.5 million and $46.1 million, respectively.

Current wording

The capitalization of development costs requires judgment, and can directly and materially impact our results of operations because, for example, (i) if we do not capitalize costs that should be capitalized, then our operating expenses would be overstated during the development period, and the subsequent depreciation of the developed real estate would be understated, or (ii) if we capitalize costs that should not be capitalized, then our operating expenses would be understated during the development period, and the subsequent depreciation of the real estate would be overstated. For the three months ended March 31, 2026 and 2025, we capitalized development costs of $6.1 million and $2.3 million, respectively.