Financial Analysis

15. Commitments and Contingencies Management Agreements Management agreements with the Companys third-party hotel managers currently require the Company to pay between 2.5% and 3.0% of total revenue of the managed hotels to the third-party managers each month as a basic management fee. In addition to basic management fees, provided that certain operating thresholds are met, the Company may also be required to pay incentive management fees to certain of its third-party managers. Total basic management and incentive management fees were included in other property-level expenses on the Companys consolidated statements of operations as follows (in thousands): 2025 2024 2023 Basic management fees $ 26,434 $ 24,356 $ 27,122 Incentive management fees 2,495 2,463 7,534 Total basic and incentive management fees $ 28,929 $ 26,819 $ 34,656 License and Franchise Agreements The Company has entered into license and franchise agreements related to certain of its hotels. The license and franchise agreements require the Company to, among other things, pay monthly fees that are calculated based on specified percentages of certain revenues. The license and franchise agreements generally contain specific standards for, and restrictions and limitations on, the operation and maintenance of the hotels which are established by the franchisors to maintain uniformity in the system created by each such franchisor. Such standards generally regulate the appearance of the hotel, quality and type of goods …

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7. Debt Debt Transactions 2025 Unsecured Debt . In April 2025, the Company exercised its option to extend the maturity of its previous Term Loan 3 from May 2025 to May 2026. Additionally, in April 2025 and July 2025, the Company drew down $27.0 million and $23.0 million, respectively, on its $500.0 million credit facility. In September 2025, the Company entered into the Amended Credit Agreement, which expanded its unsecured debt borrowing capacity and extended the maturity of its term loans. The Amended Credit Agreement continues to provide for a $500.0 million revolving credit facility and increases the aggregate amount of the Companys term loan facilities from $675.0 million (on four existing term loans) to $850.0 million (on three new term loans). The following includes the details of the Amended Credit Agreement: The maturity of the revolving credit facility was extended from July 25, 2026 , with two six-month options to extend, to September 24, 2029 , with two six-month options to extend; The new term loan facilities include a $275.0 million term loan, of which $185.0 million was funded in September 2025 and the remaining $90.0 million is available as a one-time delayed draw which was funded in January 2026 (New Term Loan 1) (see Note 16), a $275.0 million term loan funded in September 2025 (New Term Loan 2), and a $300.0 million term loan funded in September 2025 (New Term Loan 3) (together the New Term Loans); The Company utilized the $760.0 million in proceeds receive …

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12. Incentive Award Plan The Companys 2022 Incentive Award Plan (the 2022 Plan) provides for granting discretionary awards to employees, consultants, and non-employee directors. The awards may be made in the form of options, restricted stock awards, dividend equivalents, stock payments, restricted stock units, other incentive awards, LTIP units, or share appreciation rights. In May 2025, the Companys stockholders approved the first amendment to the 2022 Plan (the Amended Plan and together with the 2022 Plan, the Plan), which increased the number of shares of common stock available for issuance under the Plan from 3,750,000 common shares to 9,250,000 common shares. As of December 31, 2025, 6,247,280 shares remain available for future issuance under the Plan, and only shares of restricted stock were issued and outstanding under the Plan. Should a stock grant be forfeited prior to its vesting, the shares covered by the stock grant are added back to the Plan and remain available for future issuance. Shares of common stock tendered or withheld to satisfy the grant or exercise price or tax withholding obligations upon the vesting of a stock grant are not added back to the Plan. Restricted shares and units are measured at fair value on the date of grant and amortized as compensation expense over the relevant requisite service period or derived service period. The Company has elected to account for forfeitures as they occur. As of December 31, 2025, the Companys issued and outstandin …

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10. Income Taxes The significant components of the Companys deferred tax assets and liabilities were as follows (in thousands): December 31, 2025 2024 Deferred Tax Assets: Net operating loss carryforward $ 23,859 $ 22,129 Other reserves 980 885 State taxes and other 803 1,371 Depreciation 1,513 1,695 Total gross deferred tax assets 27,155 26,080 Deferred Tax Liabilities: Amortization (70) (55) Deferred revenue (13) (22) Total gross deferred tax liabilities (83) (77) Less: valuation allowance (27,072) (26,003) Deferred tax assets, net $ $ At December 31, 2025 and 2024, the net operating loss carryforwards for federal income tax purposes totaled approximately $108.9 million and $102.0 million, respectively, of which $8.2 million will expire between 2031 and 2033. The remaining losses can be carried forward indefinitely and are subject to an 80% taxable income limitation. The Companys income tax (provision) benefit, net was included in the consolidated statements of operations as follows (in thousands): 2025 2024 2023 Current: Federal $ (1) $ (5) $ (14) State (215) 1,105 (4,548) Current income tax (provision) benefit, net (216) 1,100 (4,562) Deferred: Federal 965 (734) (123) State 104 (450) (208) Change in valuation allowance (1,069) 1,184 331 Deferred income tax (provision) benefit, net Income tax (provision) benefit, net $ (216) $ 1,100 $ (4,562) A reconciliation of the income tax provision, net to the amount computed by applying the statutory U.S. federal income tax rate of 2 …

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9. Leases As of both December 31, 2025 and 2024, the Company had operating leases for ground, office, equipment, and airspace leases with maturity dates ranging from 2026 through 2097, excluding renewal options. Including renewal options available to the Company, the lease maturity date extends to 2147. Operating leases were included on the Companys consolidated balance sheets as follows (in thousands): December 31, 2025 2024 Right-of-use assets, net $ 4,418 $ 8,464 Lease obligations $ 7,348 $ 12,019 Weighted average remaining lease term 5 years Weighted average discount rate 5.8 % Lease Expense The components of lease expense, as well as supplemental cash flow information for operating leases, were as follows (in thousands): 2025 2024 2023 Operating lease cost $ 5,497 $ 5,368 $ 5,427 Variable lease cost (1) 8,134 7,824 8,438 Sublease income (2) (1,187) (1,187) (1,187) Total lease cost $ 12,444 $ 12,005 $ 12,678 Operating cash flows for operating leases $ 6,099 $ 5,783 $ 5,527 (1) Several of the Companys hotels pay percentage rent, which is calculated on operating revenues above certain thresholds. (2) Sublease income is included in corporate overhead in the accompanying consolidated statements of operations for the years ended December 31, 2025, 2024 and 2023. At December 31, 2025, future maturities of the Companys operating lease obligations were as follows (in thousands): 2026 $ 2,563 2027 2,628 2028 2,077 2029 450 2030 53 Thereafter 961 Total lease payments (1) 8,732 Less …

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New Accounting Standards and Accounting Changes In December 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (ASU 2023-09), to enhance the transparency and decision-usefulness of income tax disclosures, particularly in the rate reconciliation table and disclosures about income taxes paid. The Company adopted ASU 2023-09 for the year ended December 31, 2025, and applied the new disclosure requirements prospectively. Prior period disclosures have not been adjusted to reflect the new disclosure requirements. The adoption of ASU 2023-09 did not have a material impact to the Companys financial statements, however ASU 2023-09s additional disclosure requirements are included in Note 10. In November 2024, the FASB issued Accounting Standards Update No. 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (ASU 2024-03), to improve the disclosures about a public business entitys expenses and address requests from investors for more detailed information about the types of expenses (including purchases of inventory, employee compensation, depreciation, and amortization) in each income statement line item that contains those expenses. All entities are required to apply the guidance prospectively and may apply it retrospectively. ASU 2024-03 is effective for fiscal years be …

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14. Segment Information The Company considers each of its hotels to be an operating segment and allocates resources and assesses the operating performance for each hotel individually. The Company has aggregated its hotels into a single reportable segment, Hotel Ownership, based on the following aggregation criteria: All of the Companys hotels offer similar products and services to their customers in the form of hotel rooms, food and beverage, and ancillary services; The Company utilizes third-party hotel management companies to deliver its products and services to its customers across all of its hotels; The Companys hotels are designed and operated to appeal to similar individuals, groups, leisure, and business customers that travel to its hotels; and The Companys third-party hotel managers utilize the same methods (direct hotel sales and various online booking portals) to distribute the Companys products and services across all of its hotels. The Companys Chief Operating Decision Maker (CODM) is its Chief Executive Officer. The CODM reviews and makes decisions on all facets of the Companys business using all available financial and non-financial data for each hotel individually. Capital allocation decisions to acquire, sell, enhance, redevelop, or perform renewal and replacement expenditures are determined on a hotel-by-hotel basis. Specifically, the CODM reviews the results of each hotel to assess the hotels profitability. The CODM does not use aggregated data by brand, pro …

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2. Summary of Significant Accounting Policies Basis of Presentation The accompanying consolidated financial statements as of December 31, 2025 and 2024 and for the years ended December 31, 2025, 2024 and 2023, include the accounts of the Company, the Operating Partnership, the TRS Lessee, and their controlled subsidiaries. All significant intercompany balances and transactions have been eliminated. If the Company determines that it has an interest in a variable interest entity, the Company will consolidate the entity when it is determined to be the primary beneficiary of the entity. The Company does not have any comprehensive income other than what is included in net income. If the Company has any comprehensive income in the future such that a statement of comprehensive income would be necessary, the Company will include such statement in one continuous consolidated statement of operations. The Company has evaluated subsequent events through the date of issuance of these financial statements. Certain prior year amounts in these notes to consolidated financial statements have been reclassified to conform to the presentation for the year ended December 31, 2025. Use of Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilitie …

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11. Stockholders Equity Series G Cumulative Redeemable Preferred Stock Contemporaneous with the Companys April 2021 purchase of the Montage Healdsburg, the Company issued 2,650,000 shares of its Series G preferred stock to the hotels seller as partial payment of the hotel. The Series G preferred stock, which is callable at its $25.00 redemption price plus accrued and unpaid dividends by the Company at any time, initially accrued dividends at a rate equal to the Montage Healdsburgs annual net operating income yield on the Companys total investment in the resort. The dividend rate subsequently increased to the greater of the rate equal to the Montage Healdsburgs annual net operating income yield on the Companys total investment in the resort or 3.0%, 4.5%, and 6.5% in January 2024, July 2024, and July 2025, respectively, resulting in the following annual dividend rates: 2025 2024 2023 Series G preferred stock annual dividend rate 5.500 % 3.750 % 1.878 % Beginning in the third quarter of 2026, the annual dividend rate will increase to the greater of 7.5% or the rate equal to the Montage Healdsburgs annual net operating income yield on the Companys total investment in the resort. The Series G preferred stock is not convertible into any other security. Series H Cumulative Redeemable Preferred Stock In May 2021, the Company issued 4,600,000 shares of its 6.125% Series H preferred stock with a liquidation preference of $25.00. In accordance with the Companys stock repurchase program …

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16. Subsequent Events In January 2026, the Company drew down the $90.0 million available under the New Term Loan 1 delayed draw and used the proceeds to repay the $65.0 million Series A Senior Notes at their scheduled maturity in January 2026 and for general corporate purposes. Subsequent to the year ending December 31, 2025 and through the date of issuance of these financial statements, the Company repurchased 639,355 shares and 90,465 shares of its common and preferred stock, respectively, for $5.7 million and $1.9 million, respectively, including fees and commissions. In February 2026, the Companys board of directors reauthorized the Companys stock repurchase program which allows the Company to acquire up to $500.0 million of its common and preferred stock. Including repurchase activity completed subsequent to the reauthorization, the Company currently has nearly $500.0 million remaining under the new authorization. …

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