Apple Hospitality REIT, Inc.

Previous wording

The Company is a Virginia corporation that has elected to be treated as a REIT for U.S. federal income tax purposes. The Company is self-advised and invests in income-producing real estate, primarily in the lodging sector, in the U.S. As of June 30, 2026, the Company owned 216 hotels with an aggregate of 29,459 guest rooms located in urban, high-end suburban and developing markets throughout 37 states and the District of Columbia. Substantially all of the Company’s hotels operate under Marriott or Hilton brands. The hotels are operated and managed under separate management agreements with 15 hotel management companies, none of which are affiliated with the Company. The Company’s common shares are listed on the NYSE under the ticker symbol “APLE.”

Current wording

The Company is a Virginia corporation that has elected to be treated as a REIT for U.S. federal income tax purposes. The Company is self-advised and invests in income-producing real estate, primarily in the lodging sector, in the U.S. As of September 30, 2026, the Company owned 216 hotels with an aggregate of 29,459 guest rooms located in urban, high-end suburban and developing markets throughout 37 states and the District of Columbia, including four hotels with 387 guest rooms classified as held for sale, which are expected to be sold in the fourth quarter of 2026. Substantially all of the Company’s hotels operate under Marriott or Hilton brands. As of September 30, 2026, the hotels were operated and managed under separate management agreements with 15 hotel management companies, none of which are affiliated with the Company. The Company’s common shares are listed on the NYSE under the ticker symbol “APLE.”

Previous wording

As of June 30, 2026, the Company had one outstanding development project. During the third quarter of 2025, the Company entered into a fixed-price contract with a third party to develop a dual-branded property, consisting of an AC Hotel and a Residence Inn, on Company-owned land in Las Vegas, Nevada, adjacent to its existing SpringHill Suites. The Company expects to spend a total of approximately $143.7 million to develop the AC Hotel and Residence Inn, which are currently planned to be completed and opened for business in the second quarter of 2028. Upon completion, the AC Hotel and Residence Inn are expected to contain approximately 237 and 160 guest rooms, respectively. As of June 30, 2026, the Company has capitalized $9.9 million related to the construction of the AC Hotel and Residence Inn.

Current wording

As of September 30, 2026, the Company had one outstanding development project. During the third quarter of 2025, the Company entered into a fixed-price contract with a third party to develop a dual-branded property, consisting of an AC Hotel and a Residence Inn, on Company-owned land in Las Vegas, Nevada, adjacent to its existing SpringHill Suites. The Company expects to spend a total of approximately $143.7 million to develop the AC Hotel and Residence Inn, which are currently planned to be completed and opened for business in the third quarter of 2028. Upon completion, the AC Hotel and Residence Inn are expected to contain approximately 237 and 160 guest rooms, respectively. As of September 30, 2026, the Company has capitalized $16.9 million related to the construction of the AC Hotel and Residence Inn.

Previous wording

For its existing portfolio, the Company monitors each property’s profitability, market conditions and capital requirements and attempts to maximize shareholder value by disposing of properties when it believes that superior value can be provided from the sale of the property. As a result, during the six months ended June 30, 2026, the Company sold one hotel to an unrelated party for a gross sales price of approximately $8.7 million, resulting in a gain on the sale of approximately $0.2 million, net of transaction costs. The Company used the net proceeds from the sale to repay amounts outstanding under the Revolving Credit Facility.

Current wording

For its existing portfolio, the Company monitors each property’s profitability, market conditions and capital requirements and attempts to maximize shareholder value by disposing of properties when it believes that superior value can be provided from the sale of the property. As a result, during the nine months ended September 30, 2026, the Company sold one hotel to an unrelated party for a gross sales price of approximately $8.7 million, resulting in a gain on the sale of approximately $0.2 million, net of transaction costs. The Company used the net proceeds from the sale to repay amounts outstanding under the $650 million revolving credit facility. In addition, during the three months ended September 30, 2026, the Company entered into three purchase and sale agreements with two unrelated parties to sell four hotels for an aggregate gross sales price of $50.3 million. Because the buyer under each contract made a non-refundable deposit, as of September 30, 2026, the Company classified the four hotels as assets held for sale on its consolidated balance sheet. As of September 30, 2026, three of the hotels were recorded at their respective carrying values, each of which was less than its contracted sales price, net of costs to sell. The fourth hotel held for sale was recorded at its estimated fair value less costs to sell, which was based on the contracted sales price, resulting in an impairment loss recognized during the third quarter of 2026. All four hotels are expected to be sold in the fourth quarter of 2026. Subsequent to the end of the quarter, in October 2026, the Company entered into a purchase and sale agreement with an unrelated party for the sale of one hotel for a gross sales price of approximately $21.5 million. The Company expects to complete the sale of this hotel in the fourth quarter of 2026. There are many conditions to closing on the sale of this hotel that have not yet been satisfied, and there can be no assurance that closing on the sale of this hotel will occur under the outstanding purchase and sale agreement.

Previous wording

See Note 3 titled “Dispositions” and Note 10 titled “Contract Commitments” in the Company’s Unaudited Consolidated Financial Statements and Notes thereto, appearing elsewhere in this Quarterly Report on Form 10-Q, for additional information concerning these transactions.

Current wording

See Note 3 titled “Assets Held for Sale and Dispositions” and Note 10 titled “Contract Commitments” in the Company’s Unaudited Consolidated Financial Statements and Notes thereto, appearing elsewhere in this Quarterly Report on Form 10-Q, for additional information concerning these transactions.

Previous wording

As of June 30, 2026, the Company owned 216 hotels with a total of 29,459 guest rooms as compared to 221 hotels with a total of 29,893 guest rooms as of June 30, 2025. Results of operations are included only for the period of ownership for hotels acquired or disposed of during the current reporting period and the prior year. During the six months ended June 30, 2026, the Company did not acquire any properties and sold one property on April 15, 2026. During the six months ended June 30, 2025, the Company acquired one existing hotel on June 10, 2025, and sold two properties, including one property sold on February 12, 2025 and one property sold on March 19, 2025. On April 4, 2025, the Company recovered possession from a third-party hotel operator and reinstated operations of its 209-guest-room New York Property through a third-party manager engaged by the Company.

Current wording

As of September 30, 2026, the Company owned 216 hotels, including four hotels classified as held for sale, with a total of 29,459 guest rooms as compared to 220 hotels with a total of 29,687 guest rooms as of September 30, 2025. Results of operations are included only for the period of ownership for hotels acquired or disposed of during the current reporting period and the prior year. During the nine months ended September 30, 2026, the Company did not acquire any properties and sold one property on April 15, 2026. During the nine months ended September 30, 2025, the Company acquired one existing hotel on June 10, 2025, and sold three properties, including one property sold on February 12, 2025, one property sold on March 19, 2025, and one property sold on August 18, 2025. On April 4, 2025, the Company recovered possession from a third-party hotel operator and reinstated operations of its 209-guest-room New York Property through a third-party manager engaged by the Company.

Previous wording

The Company continually evaluates the performance of each property and may transfer management responsibilities to a different third-party manager to improve operational efficiency and maximize asset value. In markets or regions where the Company owns multiple properties, it may consolidate hotels under specific third-party managers to leverage regional expertise, gain operating efficiencies, and enhance overall portfolio performance. In January 2026, the Company transitioned the remaining nine hotels managed by affiliates of Marriott, as of December 31, 2025, to separate management companies that are not affiliated with Marriott, Hilton or Hyatt. In 2025, the Company transitioned the management responsibilities for nine other hotels to different third-party management companies with which it already had existing management agreements for other properties, a portion of which involved transitions from hotels previously managed by affiliates of Marriott to management companies unaffiliated with Marriott, Hilton, or Hyatt.

Current wording

The Company continually evaluates the performance of each property and may transfer management responsibilities to a different third-party manager to improve operational efficiency and maximize asset value. In markets or regions where the Company owns multiple properties, it may consolidate hotels under specific third-party managers to leverage regional expertise, gain operating efficiencies, and enhance overall portfolio performance. In 2025, the Company transitioned the management responsibilities for nine hotels to different third-party management companies with which it already had existing management agreements for other properties, a portion of which involved transitions from hotels previously managed by affiliates of Marriott to management companies unaffiliated with Marriott, Hilton, or Hyatt. In January 2026, the Company transitioned the remaining nine hotels managed by affiliates of Marriott, as of December 31, 2025, to separate management companies that are not affiliated with Marriott, Hilton or

Previous wording

The following table reflects certain operating statistics for the Company’s 216 hotels owned as of June 30, 2026 (“Comparable Hotels”). The Company defines metrics from Comparable Hotels as results generated by the 216 hotels owned as of the end of the reporting period. For the hotels acquired during the reporting periods shown, the Company has included, as applicable, results of those hotels for periods prior to the Company’s ownership using information provided by the properties’ prior owners at the time of acquisition and not adjusted by the Company. For dispositions, results have been excluded for the Company’s period of ownership.

Current wording

The following table reflects certain operating statistics for the Company’s 212 hotels owned and held for use as of September 30, 2026 (“Comparable Hotels”). The Company defines metrics from Comparable Hotels as results generated by the 212 hotels owned and held for use as of the end of the reporting period. For the hotels acquired during the reporting periods shown, the Company has included, as applicable, results of those hotels for periods prior to the Company’s ownership using information provided by the properties’ prior owners at the time of acquisition and not adjusted by the Company. For dispositions and assets held for sale, results have been excluded for the Company’s period of ownership.

Previous wording

The following table reflects certain operating statistics for the 213 hotels owned by the Company as of January 1, 2025 and during the entirety of the reporting periods being compared, excluding the New York Property (“Same Store Hotels”).

Current wording

The following table reflects certain operating statistics for the 209 hotels owned and held for use by the Company as of January 1, 2025 and during the entirety of the reporting periods being compared, excluding the New York Property (“Same Store Hotels”).

Previous wording

As discussed above, hotel performance is impacted by many factors, including the economic conditions in the U.S. as well as each individual locality. The Company’s Comparable Hotels and Same Store Hotels revenue and operating results increased for the three and six months ended June 30, 2026, compared to the same periods in 2025, reflecting broad-based improvement in both business and leisure travel demand beyond the impact of prior-year headwinds, including reduced government travel following the current administration's efforts to curtail government spending and broader U.S. macroeconomic uncertainty in 2025. Additionally, the 2026 FIFA World Cup events hosted in the U.S. drove incremental short-term demand and average daily rates across a number of markets during the month of June. The Company expects RevPAR to continue to show improvement as compared to 2025 for the remainder of the year. Based on performance through the second quarter, the Company currently expects full-year 2026 RevPAR to exceed 2025 levels, assuming no material changes in the macroeconomic environment.

Current wording

As discussed above, hotel performance is impacted by many factors, including the economic conditions in the U.S. as well as each individual locality. The Company’s Comparable Hotels and Same Store Hotels revenue and operating results increased for the three and nine months ended September 30, 2026, compared to the same periods in 2025, reflecting broad-based improvement in both business and leisure travel demand beyond the impact of prior-year headwinds, including reduced government travel following the current administration’s efforts to curtail government spending and broader U.S. macroeconomic uncertainty in 2025. Additionally, the 2026 FIFA World Cup events hosted in the U.S. drove incremental short-term demand and average daily rates across a number of markets during the months of June and July. The Company expects RevPAR to continue to show improvement as compared to 2025 for the remainder of the year. Based on performance through the third quarter, the Company currently expects full-year 2026 RevPAR to exceed 2025 levels, assuming no material changes in the macroeconomic environment.

Previous wording

The Company’s principal source of revenue is hotel revenue consisting of room, food and beverage, and other related revenue. For the three months ended June 30, 2026 and 2025, the Company had total revenue of $402.6 million and $384.4 million, respectively. For the six months ended June 30, 2026 and 2025, the Company had total revenue of $740.3 million and $712.1 million, respectively. For the three months ended June 30, 2026 and 2025, respectively, Comparable Hotels achieved combined average occupancy of 80.1% and 78.8%, ADR of $169.90 and $164.19 and RevPAR of $136.17 and $129.30. For the six months ended June 30, 2026 and 2025, respectively, Comparable Hotels achieved combined average occupancy of 76.5% and 75.1%, ADR of $163.96 and $160.93 and RevPAR of $125.45 and $120.80. ADR is calculated as room revenue divided by the number of rooms sold, and RevPAR is calculated as occupancy multiplied by ADR.

Current wording

The Company’s principal source of revenue is hotel revenue consisting of room, food and beverage, and other related revenue. For the three months ended September 30, 2026 and 2025, the Company had total revenue of $398.3 million and $373.9 million, respectively. For the nine months ended September 30, 2026 and 2025, the Company had total revenue of $1.1 billion in each respective period. For the three months ended September 30, 2026 and 2025, respectively, Comparable Hotels achieved combined average occupancy of 78.3% and 76.2%, ADR of $170.53 and $163.45, and RevPAR of $133.60 and $124.55. For the nine months ended September 30, 2026 and 2025, respectively, Comparable Hotels achieved combined average occupancy of 77.1% and 75.4%, ADR of $166.38 and $161.82, and RevPAR of $128.24 and $122.00. ADR is calculated as room revenue divided by the number of rooms sold, and RevPAR is calculated as occupancy multiplied by ADR.

Previous wording

Compared to the same periods in 2025, during the three and six months ended June 30, 2026, respectively, the Company’s Comparable Hotels ADR increased by 3.5% and 1.9%, while occupancy increased by 1.6% and 1.9%, resulting in an increase in RevPAR of 5.3% and 3.8%. Revenue increased for the three and six months ended June 30, 2026 compared to the same periods in 2025, reflecting improved demand beyond the impact of prior-year headwinds, including reduced government travel following the current administration’s efforts to curtail government spending and broader U.S. macroeconomic uncertainty in 2025. Revenue growth for the second quarter of 2026 was further driven by increased demand in markets that hosted FIFA World Cup events, as well as broad-based RevPAR improvement across the portfolio, including markets outside those hosting FIFA World Cup events, reflecting growth in both business and leisure travel demand. Markets with significantly above-average growth in the second quarter of 2026, compared to the same period in 2025, for the Company included Atlanta, Anchorage, Chicago, Fort Worth, Houston, Kansas City, Philadelphia, South Bend and St. Louis. For the remainder of 2026, the Company expects RevPAR to exceed 2025 levels for its Comparable Hotels, which is consistent with broader expectations for applicable industry chain scale averages assuming the current macroeconomic environment continues. Future revenues could be negatively impacted by, among other things, historical seasonal trends, deterioration of consumer sentiment, a recessionary macroeconomic environment, inflationary pressures, reduced government travel or continued geopolitical uncertainty.

Current wording

Compared to the same periods in 2025, during the three and nine months ended September 30, 2026, respectively, the Company’s Comparable Hotels ADR increased by 4.3% and 2.8%, while occupancy increased by 2.8% and 2.3%, resulting in an increase in RevPAR of 7.3% and 5.1%. Revenue increased for the three and nine months ended September 30, 2026 compared to the same periods in 2025, reflecting improved demand beyond the impact of prior-year headwinds, including reduced government travel following the current administration’s efforts to curtail government spending and broader U.S. macroeconomic uncertainty in 2025. Revenue growth for the third quarter of 2026 was further driven by markets that hosted FIFA World Cup events in July, as well as broad-based RevPAR improvement across the portfolio throughout the quarter, including markets that did not host FIFA World Cup events, reflecting growth in both business and leisure travel demand. Markets with significantly above-average growth in the third quarter of 2026, compared to the same period in 2025, for the Company included Anchorage, Chicago, Dallas, Pittsburgh, Richmond, San Diego, South Bend and Washington, D.C. For the remainder of 2026, the Company expects RevPAR to exceed 2025 levels for its Comparable Hotels, which is consistent with broader expectations for applicable industry chain scale averages assuming the current macroeconomic environment continues. Future revenues could be negatively impacted by, among other things, historical seasonal trends, deterioration of consumer sentiment, a recessionary macroeconomic environment, inflationary pressures, reduced government travel or continued geopolitical uncertainty.

Previous wording

Hotel operating expense consists of direct room operating expense, hotel administrative expense, sales and marketing expense, utilities expense, repair and maintenance expense, franchise fees and management fees. Hotel operating expense for the three months ended June 30, 2026 and 2025 totaled $227.6 million and $220.6 million, respectively, or 56.5% and 57.4% of total revenue for the respective periods. For the six months ended June 30, 2026 and 2025, hotel operating expense totaled $434.5 million and $420.4 million, respectively, or 58.7% and 59.0% of total revenue for the respective periods. The increases in hotel operating expense for the three and six months ended June 30, 2026, as compared to the same periods in 2025, were primarily driven by higher occupancy levels, which resulted in increased variable operating expenses, including labor and administrative costs. Utilities expense increased due to a combination of increased occupancy and increases in overall utility rates. Additionally, ongoing inflationary pressures across the broader economy contributed to the increase in operational costs for the period. While total payroll costs reflect a competitive labor market, wage growth has moderated. For the remainder of 2026, the Company anticipates a similar operating expense environment. The Company continues to monitor and support its management companies’ efforts to realize operational efficiencies and mitigate the impact of various cost pressures while responding effectively to changes in guest preferences and the overall operating environment to maximize operational efficiency.

Current wording

Hotel operating expense consists of direct room operating expense, hotel administrative expense, sales and marketing expense, utilities expense, repair and maintenance expense, franchise fees and management fees. Hotel operating expense for the three months ended September 30, 2026 and 2025 totaled $229.5 million and $222.0 million, respectively, or 57.6% and 59.4% of total revenue for the respective periods. For the nine months ended September 30, 2026 and 2025, hotel operating expense totaled $664.0 million and $642.4 million, respectively, or 58.3% and 59.2% of total revenue for the respective periods. The increases in hotel operating expense for the three and nine months ended September 30, 2026, as compared to the same periods in 2025, were primarily driven by higher occupancy levels, which resulted in increased variable operating expenses, including labor and maintenance costs. Utilities expense increased due to a combination of increased occupancy and increases in overall utility rates. Additionally, ongoing inflationary pressures across the broader economy contributed to the increase in operational costs for these periods. While total payroll costs reflect a competitive labor market, wage growth has moderated. For the remainder of 2026, the Company anticipates a similar operating expense environment. The Company continues to monitor and support its management companies’ efforts to realize operational efficiencies and mitigate the impact of various cost pressures while responding effectively to changes in guest preferences and the overall operating environment to maximize operational efficiency.

Previous wording

Property taxes, insurance and other expense for the three months ended June 30, 2026 and 2025 was $21.8 million and $22.9 million, respectively, or 5.4% and 5.9% of total revenue for the respective periods. For the six months ended June 30, 2026 and 2025, property taxes, insurance and other expense totaled $44.3 million and $46.2 million, respectively, or 6.0% and 6.5% of total revenue for the respective periods. The decreases in property taxes, insurance and other expense for the three and six months ended June 30, 2026, as compared to the same periods in 2025, were primarily due to decreases in property insurance premiums and successful appeals of real estate tax assessments from prior periods in certain jurisdictions. The Company will continue to proactively pursue tax assessment appeals in certain jurisdictions in an attempt to minimize tax increases, as warranted.

Current wording

Property taxes, insurance and other expense for the three months ended September 30, 2026 and 2025 was $21.6 million and $22.4 million, respectively, or 5.4% and 6.0% of total revenue for the respective periods. For the nine months ended September 30, 2026 and 2025, property taxes, insurance and other expense totaled $65.9 million and $68.7 million, respectively, or 5.8% and 6.3% of total revenue for the respective periods. The decreases in property taxes, insurance and other expense for the three and nine months ended September 30, 2026, as compared to the same periods in 2025, were primarily due to decreases in property insurance premiums and successful appeals of real estate tax assessments from prior periods in certain jurisdictions. The Company will continue to proactively pursue tax assessment appeals in certain jurisdictions in an attempt to minimize tax increases, as warranted.

Previous wording

General and administrative expense for the three months ended June 30, 2026 and 2025 was $13.2 million and $8.1 million, respectively, or 3.3% and 2.1% of total revenue for the respective periods. For the six months ended June 30, 2026 and 2025, general and administrative expense was $24.0 million and $17.3 million, respectively, or 3.2% and 2.4% of total revenue for the respective periods. The principal components of general and administrative expense are corporate payroll and related benefit costs, executive incentive compensation, legal fees, accounting fees and reporting expenses. The increases in general and administrative expense for the three and six months ended June 30, 2026, as compared to the same periods in 2025, were primarily due to increased accruals based on anticipated operating performance under the Company’s executive incentive compensation plan.

Current wording

General and administrative expense for the three months ended September 30, 2026 and 2025 was $10.9 million and $7.5 million, respectively, or 2.7% and 2.0% of total revenue for the respective periods. For the nine months ended September 30, 2026 and 2025, general and administrative expense was $34.9 million and $24.8 million, respectively, or 3.1% and 2.3% of total revenue for the respective periods. The principal components of general and administrative expense are corporate payroll and related benefit costs, executive incentive compensation, legal fees, accounting fees and reporting expenses. The increases in general and administrative expense for the three and nine months ended September 30, 2026, as compared to the same periods in 2025, were primarily due to increased accruals based on anticipated operating performance under the Company’s executive incentive compensation plan.

Previous wording

Impairment of depreciable real estate expense was approximately $2.3 million for the three and six months ended June 30, 2026 due to one property identified by the Company in the second quarter of 2026 for potential sale. See Note 3 titled “Dispositions” in the Company’s Unaudited Consolidated Financial Statements and Notes thereto, appearing elsewhere in this Quarterly Report on Form 10-Q, for additional information concerning this impairment loss.

Current wording

Impairment of depreciable real estate expense was approximately $4.3 million and $6.6 million for the three and nine months ended September 30, 2026, respectively, related to two properties the Company identified for potential sale, one in the second quarter and one in the third quarter of 2026. See Note 3 titled “Assets Held for Sale and Dispositions” in the Company’s Unaudited Consolidated Financial Statements and Notes thereto, appearing elsewhere in this Quarterly Report on Form 10-Q, for additional information concerning these impairment losses.

Previous wording

Depreciation and amortization expense for the three months ended June 30, 2026 and 2025 was $49.7 million and $48.0 million, respectively. For the six months ended June 30, 2026 and 2025, depreciation and amortization expense was $99.2 million and $96.0 million, respectively. Depreciation and amortization expense primarily represents expense of the Company’s hotel buildings and related improvements, and associated personal property (furniture, fixtures, and equipment) for the respective periods of ownership. The increases of approximately $1.6 million and $3.2 million for the three and six months ended June 30, 2026, respectively, as compared to the same periods in 2025, were primarily due to the acquisitions of two hotels in the second and fourth quarters of 2025, which had higher purchase prices compared to the carrying values of the eight hotels disposed of in 2025 and 2026, as well as renovations completed throughout 2025 and the first half of 2026.

Current wording

Depreciation and amortization expense for the three months ended September 30, 2026 and 2025 was $49.8 million and $48.1 million, respectively. For the nine months ended September 30, 2026 and 2025, depreciation and amortization expense was $149.0 million and $144.1 million, respectively. Depreciation and amortization expense primarily represents expense of the Company’s hotel buildings and related improvements, and associated personal property (furniture, fixtures, and equipment) for the respective periods of ownership. The increases of approximately $1.7 million and $4.9 million for the three and nine months ended September 30, 2026, respectively, as compared to the same periods in 2025, were primarily due to renovations completed throughout 2025 and the first three quarters of 2026, as well as the acquisition of two hotels in the second and fourth quarters of 2025 totaling approximately $117.0 million, partially offset by the disposition of eight hotels in 2025 and 2026 with a combined carrying value of approximately $67.2 million at their respective times of sale.

Previous wording

Interest and other expense, net, for the three months ended June 30, 2026 and 2025 was $20.8 million and $21.0 million, respectively. For the six months ended June 30, 2026 and 2025, interest and other expense, net was $40.9 million and $40.4 million, respectively, and was net of approximately $0.9 million and $0.8 million, respectively, of interest capitalized associated with renovation projects.

Current wording

Interest and other expense, net, for the three months ended September 30, 2026 and 2025 was $21.5 million and $21.4 million, respectively. For the nine months ended September 30, 2026 and 2025, interest and other expense, net, was $62.4 million and $61.7 million, respectively, and was net of approximately $1.0 million of capitalized interest associated with renovation projects for each respective period.

Previous wording

Interest expense related to the Company’s debt instruments for the three and six months ended June 30, 2026 remained relatively unchanged compared to the same periods of 2025 as a result of higher average borrowings associated with variable-rate debt, offset by lower average interest rates on the Company's fixed and variable-rate debt and lower average borrowings associated with fixed-rate debt. The Company anticipates interest expense for the remainder of 2026 will be relatively similar to the interest expense for the same period of 2025 as the benefit of expected lower average interest rates is offset by a reduced benefit from interest rate swaps. The proportion of variable-rate debt that is fixed by interest rate swaps was lower over the six months ended June 30, 2026 compared to the same period of 2025, as the Company had one interest rate swap in effect on $75.0 million of variable-rate debt mature during the first half of 2026 and three interest rate swaps in effect on $150.0 million of variable-rate debt mature during 2025. However, this was partially offset as the Company entered into two new interest rate swaps in effect on $100.0 million of variable-rate debt during the third quarter of 2025, but at higher fixed rates than the swap agreements that expired.

Current wording

Interest expense related to the Company’s debt instruments for the three and nine months ended September 30, 2026 remained relatively unchanged compared to the same periods of 2025 as a result of higher average borrowings associated with variable-rate debt, offset by lower average interest rates on the Company’s variable-rate debt and lower average borrowings associated with fixed-rate debt. The Company anticipates interest expense for the remainder of 2026 will be relatively similar to the interest expense for the same period of 2025. The proportion of variable-rate debt that is fixed by interest rate swaps was lower over the nine months ended September 30, 2026 compared to the same period of 2025, as the Company had one interest rate swap in effect on $75.0 million of variable-rate debt mature during the first three quarters of 2026 and three interest rate swaps in effect on $150.0 million of variable-rate debt mature during 2025. However, this was partially offset as the Company entered into two new interest rate swaps in effect on $100.0 million of variable-rate debt during the third quarter of 2025, but at higher fixed rates than the swap agreements that expired.

Previous wording

The following table reconciles the Company’s GAAP net income to FFO and MFFO for the three and six months ended June 30, 2026 and 2025 (in thousands):

Current wording

The following table reconciles the Company’s GAAP net income to FFO and MFFO for the three and nine months ended September 30, 2026 and 2025 (in thousands):

Previous wording

The following table reconciles the Company’s GAAP net income to EBITDA, EBITDAre, Adjusted EBITDAre and Adjusted Hotel EBITDA for the three and six months ended June 30, 2026 and 2025 (in thousands):

Current wording

The following table reconciles the Company’s GAAP net income to EBITDA, EBITDAre, Adjusted EBITDAre and Adjusted Hotel EBITDA for the three and nine months ended September 30, 2026 and 2025 (in thousands):

Previous wording

As of June 30, 2026, the Company owned 216 hotels with an aggregate of 29,459 guest rooms located in 37 states and the District of Columbia. The following tables summarize the number of hotels and guest rooms by brand and by state:

Current wording

As of September 30, 2026, the Company owned 216 hotels with an aggregate of 29,459 guest rooms located in 37 states and the District of Columbia, including four hotels with 387 guest rooms classified as held for sale, which are expected to be sold in the fourth quarter of 2026. The following tables summarize the number of hotels and guest rooms by brand and by state:

Previous wording

As of June 30, 2026, the Company had $1.5 billion of total outstanding debt consisting of $161.7 million of mortgage debt and $1.3 billion outstanding under its unsecured credit facilities, excluding unamortized debt issuance costs. As of June 30, 2026, the Company had available corporate cash on hand of approximately $10.2 million, and unused borrowing capacity under its Revolving Credit Facility of approximately $602.0 million after taking into account outstanding letters of credit of approximately $2.0 million.

Current wording

As of September 30, 2026, the Company had $1.5 billion of total outstanding debt consisting of $160.3 million of mortgage debt and $1.3 billion outstanding under its unsecured credit facilities, excluding unamortized debt issuance costs. As of September 30, 2026, the Company had available corporate cash on hand of approximately $42.7 million, and unused borrowing capacity under its Revolving Credit Facility of approximately $699.5 million after taking into account a $0.5 million outstanding letter of credit.

Previous wording

The credit agreements governing the unsecured credit facilities contain customary affirmative and negative covenants and events of default. As of June 30, 2026, the covenants included, among others, a minimum tangible net worth, maximum debt limits, minimum interest and fixed charge coverage ratios, and restrictions on certain investments. The Company was in compliance with the applicable covenants as of June 30, 2026.

Current wording

The credit agreements governing the unsecured credit facilities contain customary affirmative and negative covenants and events of default. As of September 30, 2026, the covenants included, among others, maximum debt limits, minimum interest and fixed charge coverage ratios, and restrictions on certain investments. The Company was in compliance with the applicable covenants as of September 30, 2026.

Previous wording

On July 23, 2026, the Company amended and restated the credit agreement for its existing $1.2 billion credit facility, extending the maturity dates and increasing the borrowing capacity of the Revolving Credit Facility by $50 million to $700 million, resulting in a total borrowing capacity of approximately $1.3 billion. The amended and restated credit agreement extended the maturity dates, modified certain financial covenants and changed the interest rate margin range to 1.35% to 2.30% as compared to a range of 1.35% to 2.25% prior to the amendment. The Company also entered into conforming amendments for its other unsecured credit facilities to align with the revised financial covenants.

Current wording

On July 23, 2026, the Company amended and restated the credit agreement for its existing $1.2 billion credit facility, extending the maturity dates and increasing the borrowing capacity of the existing $650 million revolving credit facility by $50 million to $700 million, resulting in a total borrowing capacity of approximately $1.3 billion. The amended and restated credit agreement extended the maturity dates, modified certain financial covenants and changed the interest rate margin range to 1.35% to 2.30% as compared to a range of 1.35% to 2.25% prior to the amendment and restatement. The Company also entered into conforming amendments for its other unsecured credit facilities to align with the revised financial covenants.

Previous wording

On July 24, 2026, the Company amended and restated the credit agreement for its existing $130 million term loan facility which increased the amount of the term loan facility to $160 million, with the additional $30 million funded at closing, extended the maturity date and changed the interest rate margin range to 1.70% to 2.65% as compared to a range of 1.35% to 2.20% prior to the amendment.

Current wording

On July 24, 2026, the Company amended and restated the credit agreement for its existing $130 million term loan facility, which increased the amount of the term loan facility to $160 million, with the additional $30 million funded at closing, extended the maturity date seven years to July 24, 2033 and, as a result of the longer tenor, changed the interest rate margin range to 1.70% to 2.65% as compared to a range of 1.35% to 2.20% prior to the amendment and restatement.

Previous wording

See Note 4, titled “Debt” in the Company’s Unaudited Consolidated Financial Statements and Notes thereto, appearing elsewhere in this Quarterly Report on Form 10-Q, for details regarding the Company’s debt agreements as of June 30, 2026 and amendments to those agreements subsequent to that date.

Current wording

See Note 4 titled “Debt” in the Company’s Unaudited Consolidated Financial Statements and Notes thereto, appearing elsewhere in this Quarterly Report on Form 10-Q, for details regarding the Company’s debt agreements as of September 30, 2026.

Previous wording

On February 23, 2024, the Company entered into an equity distribution agreement pursuant to which the Company may sell, from time to time, up to an aggregate of $500 million of its common shares under the ATM Program. No common shares were sold under the Company’s ATM Program during the three and six months ended June 30, 2026 or during the year ended December 31, 2025. As of June 30, 2026, $500 million remained available for issuance under the ATM Program. The Company plans to use future net proceeds from the sale of shares under the ATM Program, or under a similar successor program, for general corporate purposes, which may include, among other things, acquisitions of additional properties, the repayment of outstanding indebtedness, capital expenditures, improvement of properties in its portfolio and working capital. The Company may also use the future net proceeds to acquire another REIT or other company that invests in income-producing properties. Future offerings will depend on a variety of factors to be determined by the Company, including market conditions, the trading price of the Company’s common shares and opportunities for uses of any proceeds.

Current wording

On February 23, 2024, the Company entered into an equity distribution agreement pursuant to which the Company may sell, from time to time, up to an aggregate of $500 million of its common shares under the ATM Program. No common shares were sold under the Company’s ATM Program during the three and nine months ended September 30, 2026 or during the year ended December 31, 2025. As of September 30, 2026, $500 million remained available for issuance under the ATM Program. The Company plans to use future net proceeds from the sale of shares under the ATM Program, or under a similar successor program, for general corporate purposes, which may include, among other things, acquisitions of additional properties, the repayment of outstanding indebtedness, capital expenditures, improvement of properties in its portfolio and working capital. The Company may also use the future net proceeds to acquire another REIT or other company that invests in income-producing properties. Future offerings will depend on a variety of factors to be determined by the Company, including market conditions, the trading price of the Company’s common shares and opportunities for uses of any proceeds.

Previous wording

The Company generally must distribute annually at least 90% of its REIT taxable income, subject to certain adjustments and excluding any net capital gain, in order to maintain its REIT status. On June 18, 2026, the Company declared a monthly cash distribution of $0.08 per common share, paid on July 15, 2026, to shareholders of record as of June 30, 2026. For the three and six months ended June 30, 2026, the Company paid distributions of $0.24 and $0.48 per common share, respectively, for a total of $56.6 million and $113.2 million, respectively. Subsequent to quarter end, on July 17, 2026, the Company declared a monthly cash distribution of $0.08 per common share, payable on August 17, 2026, to shareholders of record as of July 31, 2026.

Current wording

The Company generally must distribute annually at least 90% of its REIT taxable income, subject to certain adjustments and excluding any net capital gain, in order to maintain its REIT status. On September 17, 2026, the Company declared a monthly cash distribution of $0.08 per common share, paid on October 15, 2026, to shareholders of record as of September 30, 2026. For the three and nine months ended September 30, 2026, the Company paid distributions of $0.24 and $0.72 per common share, respectively, for a total of $56.6 million and $169.8 million, respectively. Subsequent to quarter end, on October 19, 2026, the Company declared a monthly cash distribution of $0.08 per common share, payable on November 16, 2026, to shareholders of record as of October 30, 2026.

Previous wording

The Company’s current annual distribution rate, payable monthly, is $0.96 per common share. As it has done historically, due to seasonality, the Company may use its Revolving Credit Facility to maintain the consistency of the monthly distribution rate, taking into consideration any acquisitions, dispositions, capital improvements and economic cycles. While management currently expects monthly cash distributions to continue at $0.08 per common share, any distribution will be subject to approval of the Company’s Board of Directors, and there can be no assurance of the classification, timing or duration of distributions at any particular distribution rate. The Board of Directors monitors the Company’s distribution rate relative to the performance of its hotels on an ongoing basis and may make adjustments to the distribution rate as determined to be prudent in relation to other cash requirements of the Company or to the extent required to maintain the Company’s REIT status. If cash flows from operations and the Revolving Credit Facility are not adequate to meet liquidity requirements, the Company may utilize additional financing sources to make distributions. Although the Company has relatively low levels of debt, there can be no assurance it will be successful with this strategy, and it may need to reduce its distributions to minimum levels required to maintain its qualification as a REIT. If the Company were unable to extend its maturing debt in future periods or if it were to default on its debt, it may be unable to make distributions.

Current wording

The Company’s current annual distribution rate, payable monthly, is $0.96 per common share. As it has done historically, due to seasonality, the Company may use its Revolving Credit Facility to maintain the consistency of the monthly distribution rate, taking into consideration any acquisitions, dispositions, capital improvements and economic cycles. While management currently expects monthly cash distributions to continue at $0.08 per common share, any distribution will be subject to approval by the Company’s Board of Directors, and there can be no assurance of the classification, timing or duration of distributions at any particular distribution rate. The Board of Directors monitors the Company’s distribution rate relative to the performance of its hotels on an ongoing basis and may make adjustments to the distribution rate as determined to be prudent in relation to other cash requirements of the Company or to the extent required to maintain the Company’s REIT status. If cash flows from operations and the Revolving Credit Facility are not adequate to meet liquidity requirements, the Company may utilize additional financing sources to make distributions. Although the Company has relatively low levels of debt, there can be no assurance it will be successful with this strategy, and it may need to reduce its distributions to minimum levels required to maintain its qualification as a REIT. If the Company were unable to extend its maturing debt in future periods or if it were to default on its debt, it may be unable to make distributions.

Previous wording

In May 2026, the Company’s Board of Directors approved a one-year extension of its existing Share Repurchase Program, authorizing share repurchases up to an aggregate of $242.5 million. The Share Repurchase Program may be suspended or terminated at any time by the Company and will end in July 2027 if not terminated or extended earlier. The Company previously entered into, and expects to continue to enter into, written trading plans as part of the Share Repurchase Program that provide for share repurchases in open market transactions that are intended to comply with Rule 10b5-1 under the Exchange Act. The Company did not repurchase any common shares under the Share Repurchase Program during the three and six months ended June 30, 2026. During the six months ended June 30, 2025, the Company purchased, under its Share Repurchase Program, approximately 3.4 million of its common shares at a weighted-average market purchase price of approximately $12.83 per common share for an aggregate purchase price, including commissions, of approximately $43.2 million. Past purchases under the Share Repurchase Program have been funded, and the Company intends to fund future share repurchases with cash on hand, proceeds from dispositions or availability under its unsecured credit facilities, subject to applicable restrictions under the Company’s unsecured credit facilities (if any). The timing of share repurchases and the number of common shares to be purchased under the Share Repurchase Program will also depend upon prevailing market conditions, regulatory requirements and other factors. As of June 30, 2026, approximately $242.5 million remained available for purchase under the Share Repurchase Program.

Current wording

In May 2026, the Company’s Board of Directors approved a one-year extension of its existing Share Repurchase Program, authorizing share repurchases up to an aggregate of $242.5 million. The Share Repurchase Program may be suspended or terminated at any time by the Company and will end in July 2027 if not terminated or extended earlier. The Company previously entered into, and expects to continue to enter into, written trading plans as part of the Share Repurchase Program that provide for share repurchases in open market transactions that are intended to comply with Rule 10b5-1 under the Exchange Act. The Company did not repurchase any common shares under the Share Repurchase Program during the three and nine months ended September 30, 2026. During the nine months ended September 30, 2025, the Company purchased, under its Share Repurchase Program, approximately 3.5 million of its common shares at a weighted-average market purchase price of approximately $12.79 per common share for an aggregate purchase price, including commissions, of approximately $45.2 million. Past purchases under the Share Repurchase Program have been funded, and the Company intends to fund future share repurchases, with cash on hand, proceeds from dispositions or availability under its unsecured credit facilities, subject to applicable restrictions under the Company’s unsecured credit facilities (if any). The timing of share repurchases and the number of common shares to be purchased under the Share Repurchase Program will also depend upon prevailing market conditions, regulatory requirements and other factors. As of September 30, 2026, approximately $242.5 million remained available for purchase under the Share Repurchase Program.

Previous wording

Management routinely monitors the condition and operations of its hotels and plans renovations and other improvements as it deems prudent. The Company is committed to maintaining and enhancing each property’s competitive position in its market. The Company has invested in and plans to continue to reinvest in its hotels. Under certain loan agreements, the Company is required to place in escrow funds for the repair, replacement and refurbishment of furniture, fixtures, and equipment at the applicable hotels, based on a percentage of the hotel’s gross revenues, to be used for capital expenditures with respect to those hotels. As of June 30, 2026, the Company held approximately $5.3 million in reserves related to these properties. During the six months ended June 30, 2026, the Company invested approximately $39.8 million in capital expenditures. The Company anticipates spending approximately $85 million to $95 million during 2026, which includes various comprehensive renovation projects for approximately 18 properties. The increase of $5.0 million from the Company’s previous estimate and the change in the number of comprehensive renovation projects are primarily a result of prioritizing two larger projects: the renovation of its Embassy Suites in Anchorage, Alaska and the rebranding of the Residence Inn in Seattle, Washington. The Company’s expectations reflect its ongoing prioritization and management of its overall capital spending to keep its hotels competitive, while weighing larger investments toward the highest return opportunities. Estimates of future capital expenditures are subject to change, and inflationary pressures, supply chain disruptions, tariffs, or other factors could result in additional cost increases or delays to anticipated projects.

Current wording

Management routinely monitors the condition and operations of its hotels and plans renovations and other improvements as it deems prudent. The Company is committed to maintaining and enhancing each property’s competitive position in its market. The Company has invested in and plans to continue to reinvest in its hotels. Under certain loan agreements, the Company is required to place in escrow funds for the repair, replacement and refurbishment of furniture, fixtures, and equipment at the applicable hotels, based on a percentage of the hotel’s gross revenues, to be used for capital expenditures with respect to those hotels. As of September 30, 2026, the Company held approximately $5.4 million in reserves related to these properties. During the nine months ended September 30, 2026, the Company invested approximately $57.8 million in capital expenditures. The Company anticipates spending approximately $85 million to $95 million during 2026, which includes various comprehensive renovation projects for approximately 18 properties. The Company’s expectations reflect its ongoing prioritization and management of its overall capital spending to keep its hotels competitive, while weighing larger investments toward the highest return opportunities. Estimates of future capital expenditures are subject to change, and inflationary pressures, supply chain disruptions, tariffs, or other factors could result in additional cost increases or delays to anticipated projects.

Previous wording

As of June 30, 2026, the Company had one outstanding development project. During the third quarter of 2025, the Company entered into a fixed-price contract with a third party to develop a dual-branded property, consisting of an AC Hotel and a Residence Inn, on Company-owned land in Las Vegas, Nevada, adjacent to its existing SpringHill Suites. The Company expects to spend a total of approximately $143.7 million to develop the AC Hotel and Residence Inn, which are currently planned to be completed and opened for business in the second quarter of 2028. As of June 30, 2026, the Company has capitalized $9.9 million related to the construction of the AC Hotel and Residence Inn.

Current wording

As of September 30, 2026, the Company had one outstanding development project. During the third quarter of 2025, the Company entered into a fixed-price contract with a third party to develop a dual-branded property, consisting of an AC Hotel and a Residence Inn, on Company-owned land in Las Vegas, Nevada, adjacent to its existing SpringHill Suites. The Company expects to spend a total of approximately $143.7 million to develop the AC Hotel and Residence Inn, which are currently planned to be completed and opened for business in the third quarter of 2028. As of September 30, 2026, the Company has capitalized $16.9 million related to the construction of the AC Hotel and Residence Inn.

Previous wording

Interest expense related to the Company’s unsecured credit facilities over the next 12 months is expected to be similar to the previous 12 months, with comparable borrowings and average interest rates. The average proportion of variable-rate debt that is fixed by interest rate swaps is expected to be lower over the next 12 months compared to the six months ended June 30, 2026. The Company had one interest rate swap in effect on $75.0 million of variable-rate debt mature in the second quarter of 2026 and has one interest rate swap in effect on $125.0 million of variable-rate debt that will mature in the second half of 2026. If the Company replaces expiring interest rate swaps in the current interest rate environment with new agreements, the Company anticipates those new agreements to generally be at higher rates than the expiring swap agreements. See Note 4 titled “Debt” and Note 5 titled “Fair Value of Financial Instruments” in the Company’s Unaudited Consolidated Financial Statements and Notes thereto, appearing elsewhere in this Quarterly Report on Form 10-Q for more detail regarding future maturities of the Company’s debt instruments and interest rate swap agreements as of June 30, 2026.

Current wording

Interest expense related to the Company’s unsecured credit facilities over the next 12 months is expected to be similar to the previous 12 months, with lower expected borrowings, offset by higher expected average interest rates. The average proportion of variable-rate debt that is fixed by interest rate swaps is expected to be lower over the next 12 months compared to the nine months ended September 30, 2026. The Company has one interest rate swap in effect on $125.0 million of variable-rate debt that will mature in the fourth quarter of 2026 and two interest rate swaps in effect on $100.0 million of variable-rate debt that will mature in the third quarter of 2027. If the Company replaces expiring interest rate swaps in the current interest rate environment with new agreements, the Company anticipates those new agreements to generally be at higher rates than the expiring swap agreements. See Note 4 titled “Debt” and Note 5 titled “Fair Value of Financial Instruments” in the Company’s Unaudited Consolidated Financial Statements and Notes thereto, appearing elsewhere in this Quarterly Report on Form 10-Q, for more detail regarding future maturities of the Company’s debt instruments and interest rate swap agreements as of September 30, 2026.

Previous wording

The Company relies on the performance of its hotels and the ability of its hotel operators to increase revenue to keep pace with inflation. Hotel operators, in general, possess the ability to adjust room rates daily to reflect the effects of inflation on the Company’s operating expenses. However, competitive pressures and other factors could limit the operators’ ability to raise room rates and, as a result, the Company may not be able to offset such increased operating expenses with increases in revenue. Additionally, tariff-induced inflation could increase certain operating and renovation costs, as some supplies, furniture, fixtures and equipment and construction materials are imported, as well as negatively impact leisure travel by reducing the discretionary income of consumers.

Current wording

The Company relies on the performance of its hotels and the ability of its hotel operators to increase revenue to keep pace with inflation. Hotel operators, in general, possess the ability to adjust room rates daily to reflect the effects of inflation on the Company’s operating expenses. However, competitive pressures and other factors could limit the operators’ ability to raise room rates and, as a result, the Company may not be able to offset such increased operating expenses with increases in revenue. Additionally, tariff-induced inflation and increases in fuel and transportation costs could increase certain operating and renovation costs, as some supplies, furniture, fixtures and equipment and construction materials are imported, as well as negatively impact leisure travel by reducing the discretionary income of consumers.