Financial Data and Key Metrics Changes - Normalized FFO for Q3 2025 was $33.9 million or $0.20 per share, down from $0.32 per share in the prior year quarter [15] - Adjusted EBITDA RE decreased by $10 million year over year to $145 million, primarily impacted by a $13.1 million decline in adjusted hotel EBITDA and an $8.7 million increase in interest expense [15][16] - Gross operating profit margin percentage declined by 330 basis points to 24.4% [15] Business Line Data and Key Metrics Changes - Hotel portfolio generated adjusted hotel EBITDA of $44.3 million, an 18.9% decline from the prior year due to softer demand and expense pressures [16] - REVPAR for the retained portfolio increased by 60 basis points year over year to $114, while the 76 domestic exit hotels not yet sold generated REVPAR of $72, a decline of 1% [16][17] - The triple net lease segment reported annualized base rent growth of 2.3% and NOI increased by 50 basis points year over year [12] Market Data and Key Metrics Changes - The U.S. travel market is facing headwinds, with domestic leisure travel declining to its lowest point in several years, reflecting heightened price sensitivity and shorter booking windows [7] - The triple net lease market continues to show resilience and growth, driven by consumer preferences for convenience and affordability [10] Company Strategy and Development Direction - The company is focused on capital recycling initiatives, strengthening its balance sheet, and transitioning towards a net lease company [5][6] - Significant capital investments have been made to elevate hotel quality, with renovations completed at nearly 45% of the retained hotel portfolio [9] - The company plans to continue with hotel dispositions in 2026, focusing on negative EBITDA hotels [48] Management's Comments on Operating Environment and Future Outlook - Management noted that the travel industry is experiencing softness, with cost pressures and a cautious consumer mindset impacting performance [7][36] - The company expects to see stability and margin improvement as the disposition pipeline normalizes and renovated hotels capture additional market share [9][20] - Fourth-quarter guidance projects REVPAR of $86-$89 and adjusted hotel EBITDA in the $20-$25 million range, considering seasonality and recent headwinds [17] Other Important Information - The company raised over $850 million in proceeds, including $295 million from asset sales during the quarter [5] - The company has $5.5 billion of debt outstanding with a weighted average interest rate of 5.9% [18] - Full-year CapEx guidance has been lowered from $250 million to approximately $200 million due to a shift in the pace of deployment [20] Q&A Session Summary Question: How realistic is it that all remaining hotel sales will close by year-end? - Management indicated that they are tracking to close 40-50% of the remaining balance in November, with the rest in December [23] Question: Can you discuss the $27 million impairment taken in the quarter? - Management clarified that it was related to shifting purchase price allocations and does not indicate further impairments [25] Question: What is the expectation for the declining rent coverage in the travel center portfolio? - Management noted that while there has been a decline, they are not particularly concerned due to the investment-grade backing from BP [27] Question: Can you elaborate on the hotel portfolio's Q3 performance? - Management explained that the timing of asset sales and some insurable events contributed to the performance being below expectations [32] Question: What is the rationale behind issuing zero-coupon bonds? - The primary goal was to provide headroom with covenants and improve liquidity, allowing for better management of debt maturities [40] Question: What is the outlook for potential further dispositions in 2026? - Management confirmed plans to continue with hotel dispositions in 2026, focusing on negative EBITDA hotels [48]

Financial Data and Key Metrics Changes - The company is experiencing a transition due to a challenging economic environment and shifting consumer trends, which have pressured end markets and hampered recent results [6][7] - Management expects benefits from executing their portfolio strategy and developing a pipeline of innovation, indicating confidence in long-term growth [7] Business Line Data and Key Metrics Changes - The competitive environment has intensified, particularly in the traditional loaf area, with lower-priced entrants affecting results [12][13] - The company is addressing the value shopper segment with new product lines and has seen good performance in premium differentiated products [12][13] - The foodservice business has been refilled with higher-margin products, significantly improving profitability [58] Market Data and Key Metrics Changes - The market remains bifurcated, with strong performance in both premium differentiated products and value offerings, particularly in mass and club channels [12][13] - The company has noted continued weakness in the away-from-home foodservice business [14] Company Strategy and Development Direction - The company is committed to innovation to navigate the transition in consumer preferences, particularly moving away from traditional loaf products [30][31] - Management emphasizes the importance of maintaining brand strength and innovation as key strategies to address competitive pressures [36][72] Management's Comments on Operating Environment and Future Outlook - Management acknowledges that the transition will take time and requires patience, viewing it as a generational shift in the category [51][53] - There is optimism that the category will eventually stabilize, although the timeline is uncertain [52][53] Other Important Information - The company is focused on debt paydown and is cautious about M&A activities in the near term, although it remains a strategic priority [61] - The company has plans to address the weakness in large brands like Nature's Own while continuing to invest in its leading brands [55] Q&A Session Summary Question: Competitive intensity and pricing pressures - Management noted that the promotional environment is elevated but stable, with a focus on differentiated products to drive trial and awareness [12][13] Question: Tariff outlook and capital allocation - Management expects tariffs to decrease significantly and will continue to evaluate capital allocation based on performance and cash flow [18][19] Question: Nature's Own brand performance - Management confirmed that they are committed to investing in Nature's Own and other mainstream loaf products, using a mix of promotional support and marketing [65][66] Question: Innovation and Simple Mills - Management indicated that Simple Mills will continue to innovate aggressively and is performing well despite challenges [43][48] Question: Transition timeline and gross margin management - Management stated that the transition will take time, but there are levers to maintain gross margins despite volume pressures [57] Question: M&A appetite - Management indicated a cautious approach to M&A in the near term, focusing on debt reduction while monitoring market opportunities [61] Question: Retailer changes and shelf space allocation - Management observed that retailers are increasingly focusing on organic products and small loaf segments, reflecting changing consumer trends [73][74]

Financial Data and Key Metrics Changes - The company is experiencing a transition due to a challenging economic environment and shifting consumer trends, which have pressured end markets and hampered recent results [4] - Management expects further benefits from executing their portfolio strategy and developing a pipeline of innovation, indicating confidence in long-term growth [5] Business Line Data and Key Metrics Changes - The branded side is facing greater competitive intensity, particularly from lower-priced bread products, affecting results in the traditional loaf area [10][11] - The company is seeing good performance in premium differentiated products, while value offerings are also performing well in mass and club channels [11] - The keto product segment grew by 37% in the quarter, highlighting success in innovative product offerings [30] Market Data and Key Metrics Changes - The competitive environment remains elevated but stable, with promotional activities increasing around differentiated products to drive trial and awareness [10] - The private label business is experiencing fluctuations, driven by lost business that is eventually replaced [12] Company Strategy and Development Direction - The company is committed to aggressively innovating to navigate the transition in consumer preferences, particularly moving away from traditional loaf products [28] - Management emphasizes the importance of innovation and brand strength to maintain competitiveness in a challenging market [34] Management's Comments on Operating Environment and Future Outlook - Management acknowledges that the transition will take time and requires patience, viewing it as a generational shift in the category [53][56] - There is optimism that the category will eventually stabilize, although the timeline for this is uncertain [54] - The company plans to continue investing in brands like Nature's Own to ensure performance despite market challenges [57] Other Important Information - The company is focused on debt paydown and is monitoring the market for potential M&A opportunities, although immediate acquisitions are not prioritized [63] Q&A Session Summary Question: Competitive intensity and pricing strategies - Management noted that the promotional environment is elevated but stable, with increased promotions around differentiated products [10][11] Question: Tariff outlook and capital allocation - Management expects tariffs to decrease based on current observations and will continue to evaluate capital allocation decisions based on performance and cash flow [16][17] Question: Transition timeline for traditional loaf products - Management indicated that the transition will take time and is viewed as a significant shift, with no specific timeline provided [53][56] Question: Innovation contributions from Simple Mills - Management confirmed that Simple Mills will continue to innovate aggressively, with plans to speed up their innovation cycle [43] Question: Retailer changes in response to competitive pressures - Management observed that retailers are focusing on smaller loaf segments and organic products, indicating a shift in consumer preferences [76]