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Item 9A. Controls and Procedures

2022-02-22 compared with 2021-02-23 · 431 added, 456 removed, 1001 unchanged (47% of the section changed)

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Based on our evaluation under the framework in Internal Control - Integrated Framework , our management concluded that our internal control over financial reporting was effective as of December 31, 2021.

KPMG LLP, a registered independent accounting firm, has audited our consolidated financial statements included in this Annual Report on Form 10-K and, as part of its audit, has issued its report, included herein on page F-4, on the effectiveness of our internal control over financial reporting.

We acquired Jekyll Island Club Resort on July 22, 2021, Margaritaville Hollywood Beach Resort on September 23, 2021 and Estancia La Jolla Hotel & Spa on December 1, 2021 and have excluded the hotel operations of these properties from our assessment of effectiveness of internal control over financial reporting as of December 31, 2021.

Total assets and revenues for these hotels of $7.8 million and $35.5 million, respectively, for the year ended December 31, 2021 have been excluded from our assessment.

KPMG LLP, an independent registered public accounting firm, has audited our consolidated financial statements included in this Annual Report on Form 10-K and, as part of its audit, has issued its report, included herein on page F-4, on the effectiveness of our internal control over financial reporting.

There was no change to our internal control over financial reporting during the fourth quarter ended December 31, 2021 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Other Information.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.

Not applicable.

Trustees, Executive Officers and Corporate Governance.

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Principal Accountant Fees and Services.

Our independent registered public accounting firm is KPMG LLP , McLean, VA , Auditor Firm ID:

The information required by this item is incorporated by reference to the Company's Proxy Statement for the 2022 Annual Meeting of Shareholders.

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The following exhibits are filed or furnished, as the case may be, as part of this Annual Report on Form 10-K:

Number Description of Exhibit

Declaration of Trust, as amended and supplemented through November 30, 2018, of Pebblebrook Hotel Trust (incorporated by reference to Exhibit 3.1 to Pebblebrook Hotel Trust’s Annual Report on Form 10-K filed with the SEC on March 1, 2019 (File No.

Exhibit Number Description of Exhibit

Declaration of Trust, as amended and supplemented through July 23, 2021, of Pebblebrook Hotel Trust (incorporated by reference to Exhibit 3.1 to Pebblebrook Hotel Trust’s Quarterly Report on Form 10-Q filed with the SEC on July 29, 2021 (File No.

Amended and Restated Bylaws of Pebblebrook Hotel Trust (incorporated by reference to Exhibit 3.2 to Pebblebrook Hotel Trust's Current Report on Form 8-K filed with the SEC on November 14, 2016 (File No.

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Third Amendment to the Second Amended and Restated Agreement of Limited Partnership of Pebblebrook Hotel, L.P., dated as of November 30, 2018 (incorporated by reference to Exhibit 3.3 to Pebblebrook Hotel Trust’s Current Report on Form 8‑K filed with the SEC on December 3, 2018 (File No.

Fourth Amendment to the Second Amended and Restated Agreement of Limited Partnership of Pebblebrook Hotel, L.P., dated as of May 12, 2021 (incorporated by reference to Exhibit 3.2 to Pebblebrook Hotel Trust’s Current Report on Form 8‑K filed with the SEC on May 12, 2021 (File No.

Description of the Registrant's Securities.

(incorporated by reference to Exhibit 4.1 to Pebblebrook Hotel Trust's Annual Report on Form 10-K filed with the SEC on February 20, 2020 (File No.

Indenture, dated December 15, 2020, between the Company and The Bank of New York Mellon Trust Company, N.A.

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2 to the Pebblebrook Hotel Trust 2009 Equity Incentive Plan, as amended and restated effective July 10, 2012, effective February 15, 2017 (incorporated by reference to Exhibit 10.1 to Pebblebrook Hotel Trust’s Current Report on Form 8-K filed with the SEC on February 22, 2017 (File No.

Amendment No.

3 to the Pebblebrook Hotel Trust 2009 Equity Incentive Plan, as amended and restated effective July 10, 2012, effective May 19, 2021 (incorporated by reference to Exhibit 10.1 to Pebblebrook Hotel Trust’s Current Report on Form 8-K filed with the SEC on May 21, 2021 (File No.

Change in Control Severance Agreement between Pebblebrook Hotel Trust and Jon E.

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333-162412)).

Form of Share Award Agreement (Performance Vesting) for executive officers (incorporated by reference to Exhibit 10.1 to Pebblebrook Hotel Trust's Quarterly Report on Form 10-Q filed with the SEC on April 26, 2012 (File No.

Form of LTIP Unit Vesting Agreement (supersedes Exhibits 10.11, 10.12 and 10.13 to Pebblebrook Hotel Trust's Annual Report on Form 10-K filed with the SEC on March 24, 2010 (File No.

001-34571)) (incorporated by reference to Exhibit 10.2 to Pebblebrook Hotel Trust's Quarterly Report on Form 10-Q filed with the SEC on April 26, 2012 (File No.

Form of Share Award Agreement for executive officers (incorporated by reference to Exhibit 10.3 to Pebblebrook Hotel Trust's Quarterly Report on Form 10-Q filed with the SEC on April 26, 2012 (File No.

Lease, dated December 1, 1999, by and between the United States of America, acting through the Administrator of General Services, and Tariff Building Associates, L.P.

(incorporated by reference to Exhibit 10.1 to Pebblebrook Hotel Trust's Current Report on Form 8-K filed with the SEC on September 13, 2010 (File No.

Assignment and Assumption of GSA Lease, dated September 9, 2010, by and among the United States of America, acting by and through the Administrator of General Services and Authorized Representatives, Tariff Building Associates, L.P., and Jayhawk Owner LLC (incorporated by reference to Exhibit 10.2 to Pebblebrook Hotel Trust's Current Report on Form 8-K filed with the SEC on September 13, 2010 (File No.

Historical Lease, dated October 16, 2000, by and between the United States Department of the Interior, National Park Service acting through the Regional Director, Pacific West Region, an agency of the United States of America, and Maritime Hotel Associates, L.P.

(incorporated by reference to Exhibit 10.1 to Pebblebrook Hotel Trust's Current Report on Form 8-K filed with the SEC on February 22, 2011 (File No.

Seventh Amendment to Historic Lease, dated February 6, 2001, by and between the United States Department of the Interior, National Park Service acting through the Regional Director, Pacific West Region, an agency of the United States of America, and Maritime Hotel Associates, L.P.

(incorporated by reference to Exhibit 10.2 to Pebblebrook Hotel Trust's Current Report on Form 8-K filed with the SEC on February 22, 2011 (File No.

Tenth Amendment to Historic Lease, dated December 9, 2008, by and between the United States Department of the Interior, National Park Service acting through the Regional Director, Pacific West Region, an agency of the United States of America, and Maritime Hotel Associates, L.P.

(incorporated by reference to Exhibit 10.3 to Pebblebrook Hotel Trust's Current Report on Form 8-K filed with the SEC on February 22, 2011 (File No.

Eleventh Amendment to Historic Lease, dated February 16, 2011, by and between the United States Department of the Interior, National Park Service acting through the Regional Director, Pacific West Region, an agency of the United States of America, and Wildcats Owner LLC.

(incorporated by reference to Exhibit 10.4 to Pebblebrook Hotel Trust's Current Report on Form 8-K filed with the SEC on February 22, 2011 (File No.

Assignment and Assumption of Historical Lease, dated February 16, 2011, by and among the United States Department of the Interior, National Park Service acting through the Regional Director, Pacific West Region, an Agency of the United States of America, Maritime Hotel Associates, L.P., and Wildcats Owner LLC.

(incorporated by reference to Exhibit 10.5 to Pebblebrook Hotel Trust's Current Report on Form 8-K filed with the SEC on February 22, 2011 (File No.

Form of LTIP Class B Unit Vesting Agreement (incorporated by reference to Exhibit 10.1 to Pebblebrook Hotel Trust's Current Report on Form 8-K filed with the SEC on December 17, 2013 (File No.

Form of LTIP Unit Vesting Agreement (incorporated by reference to Exhibit 10.2 to Pebblebrook Hotel Trust's Quarterly Report on Form 10-Q filed with the SEC on April 26, 2012 (File No.

Form of Performance Unit Retention Award Agreement (incorporated by reference to Exhibit 10.2 to Pebblebrook Hotel Trust's Current Report on Form 8-K filed with the SEC on December 17, 2013 (File No.

Form of Performance Unit Award Agreement for Executive Officers (incorporated by reference to Exhibit 10.1 to Pebblebrook Hotel Trust's Quarterly Report on Form 10-Q filed with the SEC on April 23, 2015 (File No.

Fourth Amended and Restated Credit Agreement, dated as of October 13, 2017, among Pebblebrook Hotel, L.P., as the borrower, Pebblebrook Hotel Trust, as the parent REIT and a guarantor, certain subsidiaries of the borrower, as guarantors, Bank of America, N.A., as administrative agent, swing line lender and L/C issuer, and the other lenders party thereto (incorporated by reference to Exhibit 10.22 to Pebblebrook Hotel Trust's Annual Report on Form 10-K filed with the SEC on February 22, 2018 (File No.

First Amendment to Fourth Amended and Restated Credit Agreement, dated as of October 13, 2017, among Pebblebrook Hotel, L.P., as the borrower, Pebblebrook Hotel Trust, as the parent REIT and a guarantor, certain subsidiaries of the borrower, as guarantors, Bank of America, N.A., as administrative agent, swing line lender and L/C issuer, and the other lenders party thereto (incorporated by reference to Exhibit 10.6 to Pebblebrook Hotel Trust's Current Report on Form 8-K filed with the SEC on July 2, 2020 (File No.

Second Amendment to Fourth Amended and Restated Credit Agreement, dated as of October 13, 2017, among Pebblebrook Hotel, L.P., as the borrower, Pebblebrook Hotel Trust, as the parent REIT and a guarantor, certain subsidiaries of the borrower, as guarantors, Bank of America, N.A., as administrative agent, swing line lender and L/C issuer, and the other lenders party thereto (incorporated by reference to Exhibit 10.1 to Pebblebrook Hotel Trust's Current Report on Form 8-K filed with the SEC on July 2, 2020 (File No.

Third Amendment to Fourth Amended and Restated Credit Agreement, dated as of October 13, 2017, among Pebblebrook Hotel, L.P., as the borrower, Pebblebrook Hotel Trust, as the parent REIT and a guarantor, certain subsidiaries of the borrower, as guarantors, Bank of America, N.A., as administrative agent, swing line lender and L/C issuer, and the other lenders party thereto (incorporated by reference to Exhibit 10.1 to Pebblebrook Hotel Trust's Current Report on Form 8-K filed with the SEC on December 16, 2020 (File No.

First Amendment to Fourth Amended and Restated Credit Agreement, dated as of October 13, 2017, among Pebblebrook Hotel, L.P., as the borrower, Pebblebrook Hotel Trust, as the parent REIT and a guarantor, certain subsidiaries of the borrower, as guarantors, Bank of America, N.A., as administrative agent, swing line lender and L/C issuer, and the other lenders party thereto, dated as of June 29, 2020 (incorporated by reference to Exhibit 10.6 to Pebblebrook Hotel Trust's Current Report on Form 8-K filed with the SEC on July 2, 2020 (File No.

Second Amendment to Fourth Amended and Restated Credit Agreement, dated as of October 13, 2017, among Pebblebrook Hotel, L.P., as the borrower, Pebblebrook Hotel Trust, as the parent REIT and a guarantor, certain subsidiaries of the borrower, as guarantors, Bank of America, N.A., as administrative agent, swing line lender and L/C issuer, and the other lenders party thereto, dated as of June 29, 2020 (incorporated by reference to Exhibit 10.1 to Pebblebrook Hotel Trust's Current Report on Form 8-K filed with the SEC on July 2, 2020 (File No.

Third Amendment to Fourth Amended and Restated Credit Agreement, dated as of October 13, 2017, among Pebblebrook Hotel, L.P., as the borrower, Pebblebrook Hotel Trust, as the parent REIT and a guarantor, certain subsidiaries of the borrower, as guarantors, Bank of America, N.A., as administrative agent, swing line lender and L/C issuer, and the other lenders party thereto, entered into as of December 10, 2020 (incorporated by reference to Exhibit 10.1 to Pebblebrook Hotel Trust's Current Report on Form 8-K filed with the SEC on December 16, 2020 (File No.

Fourth Amendment to Fourth Amended and Restated Credit Agreement, dated as of October 13, 2017, among Pebblebrook Hotel, L.P., as the borrower, Pebblebrook Hotel Trust, as the parent REIT and a guarantor, certain subsidiaries of the borrower, as guarantors, Bank of America, N.A., as administrative agent, swing line lender and L/C issuer, and the other lenders party thereto, dated as of February 18, 2021 (incorporated by reference to Exhibit 10.1 to Pebblebrook Hotel Trust's Quarterly Report on Form 10-Q filed with the SEC on April 29, 2021 (File No.

Fifth Amendment to Fourth Amended and Restated Credit Agreement, dated as of October 13, 2017, among Pebblebrook Hotel, L.P., as the borrower, Pebblebrook Hotel Trust, as the parent REIT and a guarantor, certain subsidiaries of the borrower, as guarantors, Bank of America, N.A., as administrative agent, swing line lender and L/C issuer, and the other lenders party thereto, dated as of December 9, 2021 (incorporated by reference to Exhibit 10.1 to Pebblebrook Hotel Trust's Current Report on Form 8-K filed with the SEC on December 14, 2021 (File No.

Sixth Amendment to Fourth Amended and Restated Credit Agreement, dated as of October 13, 2017, among Pebblebrook Hotel, L.P., as the borrower, Pebblebrook Hotel Trust, as the parent REIT and a guarantor, certain subsidiaries of the borrower, as guarantors, Bank of America, N.A., as administrative agent, swing line lender and L/C issuer, and the other lenders party thereto, entered into as of December 9, 2021 (incorporated by reference to Exhibit 10.2 to Pebblebrook Hotel Trust's Current Report on Form 8-K filed with the SEC on December 14, 2021 (File No.

Amended and Restated Credit Agreement, dated as of October 13, 2017, among Pebblebrook Hotel, L.P., as the borrower, Pebblebrook Hotel Trust, as the parent REIT and a guarantor, certain subsidiaries of the borrower, as guarantors, PNC Bank, National Association, as administrative agent, and the other lenders party thereto (incorporated by reference to Exhibit 10.25 to Pebblebrook Hotel Trust's Annual Report on Form 10-K filed with the SEC on February 22, 2018 (File No.

First Amendment to Amended and Restated Credit Agreement, dated as of October 13, 2017, among Pebblebrook Hotel, L.P., as the borrower, Pebblebrook Hotel Trust, as the parent REIT and a guarantor, certain subsidiaries of the borrower, as guarantors, U.S.

Bank National Association, as administrative agent, and the other lenders party thereto (incorporated by reference to Exhibit 10.2 to Pebblebrook Hotel Trust's Current Report on Form 8-K filed with the SEC on July 2, 2020 (File No.

Bank National Association, as administrative agent, and the other lenders party thereto, dated as of June 29, 2020 (incorporated by reference to Exhibit 10.2 to Pebblebrook Hotel Trust's Current Report on Form 8-K filed with the SEC on July 2, 2020 (File No.

Second Amendment to Amended and Restated Credit Agreement, dated as of October 13, 2017, among Pebblebrook Hotel, L.P., as the borrower, Pebblebrook Hotel Trust, as the parent REIT and a guarantor, certain subsidiaries of the borrower, as guarantors, U.S.

Bank National Association, as administrative agent, and the other lenders party thereto, entered into as of December 10, 2020 (incorporated by reference to Exhibit 10.2 to Pebblebrook Hotel Trust's Current Report on Form 8-K filed with the SEC on December 16, 2020 (File No.

Third Amendment to Amended and Restated Credit Agreement, dated as of October 13, 2017, among Pebblebrook Hotel, L.P., as the borrower, Pebblebrook Hotel Trust, as the parent REIT and a guarantor, certain subsidiaries of the borrower, as guarantors, U.S.

Bank National Association, as administrative agent, and the other lenders party thereto, dated as of February 18, 2021 (incorporated by reference to Exhibit 10.2 to Pebblebrook Hotel Trust's Quarterly Report on Form 10-Q filed with the SEC on April 29, 2021 (File No.

Fourth Amendment to Amended and Restated Credit Agreement, dated as of October 13, 2017, among Pebblebrook Hotel, L.P., as the borrower, Pebblebrook Hotel Trust, as the parent REIT and a guarantor, certain subsidiaries of the borrower, as guarantors, U.S.

Bank National Association, as administrative agent, and the other lenders party thereto, entered into as of December 9, 2021 (incorporated by reference to Exhibit 10.3 to Pebblebrook Hotel Trust's Current Report on Form 8-K filed with the SEC on December 14, 2021 (File No.

Credit Agreement, dated as of October 13, 2017, among Pebblebrook Hotel, L.P., as the borrower, Pebblebrook Hotel Trust, as the parent REIT and a guarantor, certain subsidiaries of the borrower, as guarantors, Capital One, National Association, as administrative agent, and the other lenders party thereto (incorporated by reference to Exhibit 10.24 to Pebblebrook Hotel Trust's Annual Report on Form 10-K filed with the SEC on February 22, 2018 (File No.

First Amendment to Credit Agreement, dated as of November 12, 2015, among Pebblebrook Hotel, L.P., as the borrower, Pebblebrook Hotel Trust, as the parent REIT and a guarantor, certain subsidiaries of the borrower, as guarantors, Capital One, National Association, as administrative agent, and the other lenders party thereto (incorporated by reference to Exhibit 10.3 to Pebblebrook Hotel Trust's Current Report on Form 8-K filed with the SEC on July 2, 2020 (File No.

Second Amendment to Credit Agreement, dated as of November 12, 2015, among Pebblebrook Hotel, L.P., as the borrower, Pebblebrook Hotel Trust, as the parent REIT and a guarantor, certain subsidiaries of the borrower, as guarantors, Capital One, National Association, as administrative agent, and the other lenders party thereto (incorporated by reference to Exhibit 10.3 to Pebblebrook Hotel Trust's Current Report on Form 8-K filed with the SEC on December 16, 2020 (File No.

First Amendment to Credit Agreement, dated as of October 13, 2017, among Pebblebrook Hotel, L.P., as the borrower, Pebblebrook Hotel Trust, as the parent REIT and a guarantor, certain subsidiaries of the borrower, as guarantors, Capital One, National Association, as administrative agent, and the other lenders party thereto, dated as of June 29, 2020 (incorporated by reference to Exhibit 10.3 to Pebblebrook Hotel Trust's Current Report on Form 8-K filed with the SEC on July 2, 2020 (File No.

Second Amendment to Credit Agreement, dated as of October 13, 2017, among Pebblebrook Hotel, L.P., as the borrower, Pebblebrook Hotel Trust, as the parent REIT and a guarantor, certain subsidiaries of the borrower, as guarantors, Capital One, National Association, as administrative agent, and the other lenders party thereto, entered into as of December 10, 2020 (incorporated by reference to Exhibit 10.3 to Pebblebrook Hotel Trust's Current Report on Form 8-K filed with the SEC on December 16, 2020 (File No.

Third Amendment to Credit Agreement, dated as of October 13, 2017, among Pebblebrook Hotel, L.P., as the borrower, Pebblebrook Hotel Trust, as the parent REIT and a guarantor, certain subsidiaries of the borrower, as guarantors, Capital One, National Association, as administrative agent, and the other lenders party thereto, dated as of February 18, 2021 (incorporated by reference to Exhibit 10.3 to Pebblebrook Hotel Trust's Quarterly Report on Form 10-Q filed with the SEC on April 29, 2021 (File No.

Fourth Amendment to Credit Agreement, dated as of October 13, 2017, among Pebblebrook Hotel, L.P., as the borrower, Pebblebrook Hotel Trust, as the parent REIT and a guarantor, certain subsidiaries of the borrower, as guarantors, Capital One, National Association, as administrative agent, and the other lenders party thereto, entered into as of December 9, 2021 (incorporated by reference to Exhibit 10.4 to Pebblebrook Hotel Trust's Current Report on Form 8-K filed with the SEC on December 14, 2021 (File No.

Note Purchase and Guarantee Agreement, dated November 12, 2015, by and among Pebblebrook Hotel Trust, Pebblebrook Hotel, L.P., Massachusetts Mutual Life Insurance Company, MassMutual Asia Limited, Allianz Life Insurance Company of North America and The Guardian Life Insurance Company of America (incorporated by reference to Exhibit 10.33 to Pebblebrook Hotel Trust’s Annual Report on Form 10-K filed with the SEC on February 22, 2016 (File No.

First Amendment to Note Purchase Agreement, dated as of October 13, 2017, among Pebblebrook Hotel Trust, Pebblebrook Hotel, L.P., Massachusetts Mutual Life Insurance Company, MassMutual Asia Limited, Allianz Life Insurance Company of North America and The Guardian Life Insurance Company of America (incorporated by reference to Exhibit 10.27 to Pebblebrook Hotel Trust's Annual Report on Form 10-K filed with the SEC on February 22, 2018 (File No.

Second Amendment to Note Purchase Agreement, dated as of October 13, 2017, among Pebblebrook Hotel Trust, Pebblebrook Hotel, L.P., Massachusetts Mutual Life Insurance Company, MassMutual Asia Limited, Allianz Life Insurance Company of North America and The Guardian Life Insurance Company of America (incorporated by reference to Exhibit 10.5 to Pebblebrook Hotel Trust's Current Report on Form 8-K filed with the SEC on July 2, 2020 (File No.

Third Amendment to Note Purchase Agreement, dated as of October 13, 2017, among Pebblebrook Hotel Trust, Pebblebrook Hotel, L.P., Massachusetts Mutual Life Insurance Company, MassMutual Asia Limited, Allianz Life Insurance Company of North America and The Guardian Life Insurance Company of America (incorporated by reference to Exhibit 10.5 to Pebblebrook Hotel Trust's Current Report on Form 8-K filed with the SEC on December 16, 2020 (File No.

Form of Share Award Agreement (time-based vesting) for Executive Officers (incorporated by reference to Exhibit 10.1 to Pebblebrook Hotel Trust’s Current Report on Form 8-K filed with the SEC on February 16, 2018).

Form of Performance Unit Award Agreement for Executive Officers (incorporated by reference to (incorporated by reference to Exhibit 10.2 to Pebblebrook Hotel Trust’s Current Report on Form 8-K filed with the SEC on February 16, 2018).

First Amendment to Note Purchase Agreement, dated as of November 12, 2015, among Pebblebrook Hotel Trust, Pebblebrook Hotel, L.P., Massachusetts Mutual Life Insurance Company, MassMutual Asia Limited, Allianz Life Insurance Company of North America and The Guardian Life Insurance Company of America, dated as of October 13, 2017 (incorporated by reference to Exhibit 10.27 to Pebblebrook Hotel Trust's Annual Report on Form 10-K filed with the SEC on February 22, 2018 (File No.

Second Amendment to Note Purchase Agreement, dated as of November 12, 2015, among Pebblebrook Hotel Trust, Pebblebrook Hotel, L.P., Massachusetts Mutual Life Insurance Company, MassMutual Asia Limited, Allianz Life Insurance Company of North America and The Guardian Life Insurance Company of America, dated as of June 29, 2020 (incorporated by reference to Exhibit 10.5 to Pebblebrook Hotel Trust's Current Report on Form 8-K filed with the SEC on July 2, 2020 (File No.

Third Amendment to Note Purchase Agreement, dated as of November 12, 2015, among Pebblebrook Hotel Trust, Pebblebrook Hotel, L.P., Massachusetts Mutual Life Insurance Company, MassMutual Asia Limited, Allianz Life Insurance Company of North America and The Guardian Life Insurance Company of America, dated as of December 10, 2020 (incorporated by reference to Exhibit 10.5 to Pebblebrook Hotel Trust's Current Report on Form 8-K filed with the SEC on December 16, 2020 (File No.

Fourth Amendment to Note Purchase Agreement, dated as of November 12, 2015, among Pebblebrook Hotel Trust, Pebblebrook Hotel, L.P., Massachusetts Mutual Life Insurance Company, MassMutual Asia Limited, Allianz Life Insurance Company of North America and The Guardian Life Insurance Company of America, dated as of February 18, 2021 (incorporated by reference to Exhibit 10.4 to Pebblebrook Hotel Trust's Quarterly Report on Form 10-Q filed with the SEC on April 29, 2021 (File No.

Fifth Amendment to Note Purchase Agreement, dated as of November 12, 2015, among Pebblebrook Hotel Trust, Pebblebrook Hotel, L.P., Massachusetts Mutual Life Insurance Company, MassMutual Asia Limited, Allianz Life Insurance Company of North America and The Guardian Life Insurance Company of America, dated as of December 9, 2021 (incorporated by reference to Exhibit 10.6 to Pebblebrook Hotel Trust's Current Report on Form 8-K filed with the SEC on December 14, 2021 (File No.

Form of LTIP Class B Unit Vesting Agreement – retention award (incorporated by reference to Exhibit 10.6 to Pebblebrook Hotel Trust's Quarterly Report on Form 10-Q filed with the SEC on April 29, 2021 (File No.

Credit Agreement, dated as of October 31, 2018, among Pebblebrook Hotel L.P., as the borrower, Pebblebrook Hotel Trust, as the parent REIT and a guarantor, certain subsidiaries of the borrower, as guarantors, Bank of America, N.A., as administrative agent, and the other lenders party thereto (incorporated by reference to Exhibit 10.34 to Pebblebrook Hotel Trust’s Annual Report on Form 10-K filed with the SEC on March 1, 2019 (File No.

First Amendment to Credit Agreement, dated as of October 31, 2018, among Pebblebrook Hotel L.P., as the borrower, Pebblebrook Hotel Trust, as the parent REIT and a guarantor, certain subsidiaries of the borrower, as guarantors, Bank of America, N.A., as administrative agent, and the other lenders party thereto (incorporated by reference to Exhibit 10.4 to Pebblebrook Hotel Trust's Current Report on Form 8-K filed with the SEC on July 2, 2020 (File No.

Second Amendment to Credit Agreement, dated as of October 31, 2018, among Pebblebrook Hotel L.P., as the borrower, Pebblebrook Hotel Trust, as the parent REIT and a guarantor, certain subsidiaries of the borrower, as guarantors, Bank of America, N.A., as administrative agent, and the other lenders party thereto (incorporated by reference to Exhibit 10.4 to Pebblebrook Hotel Trust's Current Report on Form 8-K filed with the SEC on December 10, 2020 (File No.

First Amendment to Credit Agreement, dated as of October 31, 2018, among Pebblebrook Hotel L.P., as the borrower, Pebblebrook Hotel Trust, as the parent REIT and a guarantor, certain subsidiaries of the borrower, as guarantors, Bank of America, N.A., as administrative agent, and the other lenders party thereto, dated as of June 29, 2020 (incorporated by reference to Exhibit 10.4 to Pebblebrook Hotel Trust's Current Report on Form 8-K filed with the SEC on July 2, 2020 (File No.

Second Amendment to Credit Agreement, dated as of October 31, 2018, among Pebblebrook Hotel L.P., as the borrower, Pebblebrook Hotel Trust, as the parent REIT and a guarantor, certain subsidiaries of the borrower, as guarantors, Bank of America, N.A., as administrative agent, and the other lenders party thereto, entered into as of December 10, 2020 (incorporated by reference to Exhibit 10.4 to Pebblebrook Hotel Trust's Current Report on Form 8-K filed with the SEC on December 16, 2020 (File No.

Third Amendment to Credit Agreement, dated as of October 31, 2018, among Pebblebrook Hotel L.P., as the borrower, Pebblebrook Hotel Trust, as the parent REIT and a guarantor, certain subsidiaries of the borrower, as guarantors, Bank of America, N.A., as administrative agent, and the other lenders party thereto, dated as of February 18, 2021 (incorporated by reference to Exhibit 10.5 to Pebblebrook Hotel Trust's Quarterly Report on Form 10-Q filed with the SEC on April 29, 2021 (File No.

Fourth Amendment to Credit Agreement, dated as of October 31, 2018, among Pebblebrook Hotel L.P., as the borrower, Pebblebrook Hotel Trust, as the parent REIT and a guarantor, certain subsidiaries of the borrower, as guarantors, Bank of America, N.A., as administrative agent, and the other lenders party thereto, entered into as of December 9, 2021 (incorporated by reference to Exhibit 10.5 to Pebblebrook Hotel Trust's Current Report on Form 8-K filed with the SEC on December 14, 2021 (File No.

Loan Agreement, dated as of May 8, 2019, among JPMorgan Chase Bank, National Association, Deutsche Bank AG, New York Branch, and MVHF, LLC (incorporated by reference to Exhibit 10.1 to Pebblebrook Hotel Trust's Current Report on Form 8-K filed with the SEC on September 29, 2021 (File No.

List of Subsidiaries of Pebblebrook Hotel Trust.

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Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS XBRL Instance Document - The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101.SCH Inline XBRL Taxonomy Extension Schema Document (1)

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Change in Accounting Principle

As discussed in Note 2 to the consolidated financial statements, the Company changed its method of accounting for leases as of January 1, 2019.

As discussed in Note 2 to the consolidated financial statements, the Company has changed its method of accounting for convertible debt as of January 1, 2021 due to the adoption of ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40).

Basis for Opinion

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The assessment of hotel properties for impairment

As discussed in Note 2 and 4 to the consolidated financial statements, the Company reviews its investments in hotel properties for impairment whenever events or changes in circumstances indicate that the carrying value of the hotel properties may not be recoverable.

As discussed in Note 2 to the consolidated financial statements, the Company reviews its investments in hotel properties for impairment whenever events or changes in circumstances indicate that the carrying value of the hotel properties may not be recoverable.

For hotel properties that have an indication that its carrying value may not be recoverable, an undiscounted cash flow analysis is prepared using various inputs and assumptions, including estimated holding period and expected terminal capitalization rate.

To the extent that the carrying value of a hotel property exceeds the estimated undiscounted cash flows, an impairment loss is recognized equal to the excess of carrying value over its fair value.

The novel coronavirus (COVID-19) has reduced travel significantly and adversely affected the hospitality industry and resulted in recoverability analyses being performed on all of the Company’s hotel properties.

In addition, COVID-19 has increased uncertainty in future cash flow projections and hold periods.

The Company determined that the carrying

value of certain hotel properties exceeded its fair value, and recognized an impairment loss of $74.6 million.

Investment in hotel properties was $6.1 billion, or 97% of total assets as of December 31, 2021.

We identified the assessment of hotel properties for impairment as a critical audit matter.

Significant auditor judgment was required to evaluate certain key assumptions, specifically, the judgments related to the Company’s estimated holding period, expected terminal capitalization rate, discount rate, and projected cash flows from operations and eventual disposition, including the effects of COVID-19 and the resulting duration of the economic downturn.

Changes in the key assumptions could have a significant impact on the determination of recoverability of the carrying value and determination of fair value in hotel properties.

Furthermore, in determining the fair value of certain hotel properties, involvement of valuation professionals with specialized skills and knowledge was required to evaluate discount rates and expected terminal capitalization rates used in the determination of the fair value.

Significant auditor judgment was required to evaluate certain key assumptions, specifically, the judgments related to the Company’s estimated holding period, expected terminal capitalization rate, and projected undiscounted cash flows from operations and eventual disposition, including the effects of COVID-19 and the resulting duration of the economic effects on its properties.

Changes in the key assumptions could have a significant impact on the determination of recoverability of the carrying value of the Company’s investment in hotel properties.

The following are the primary procedures we performed to address this critical audit matter.

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For certain of the hotel properties, we performed sensitivity analyses over the estimated terminal capitalization rate by considering points within the ranges we obtained from published third party industry reports.

We evaluated the Company’s projected cash flows from operations, by comparing to published third-party industry reports evaluating the impact of COVID-19 on the hotel industry.

We evaluated the Company’s projected undiscounted cash flows from operations, by comparing to published third-party industry reports evaluating the impact of COVID-19 on the hotel industry.

We inquired and obtained representations from the Company regarding the status and evaluation of any potential disposal of properties and read minutes of the board of trustees.

We corroborated that information with others in the organization who are responsible for, and have authority over, disposition activities.

We also involved valuation professionals with specialized skills and knowledge who assisted in:

• assessing the projected future cash flows from operations of each hotel property by comparing the expected duration and financial impact of the economic downturn to publicly available market data, and

• evaluating the discount rates and expected terminal capitalization rates used in the determination of the fair value of certain hotel properties, by comparing against ranges that were independently developed using publicly available market data for comparable properties.

We have served as the Company's auditor since 2009.

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We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2021 and 2020, the related consolidated statements of operations and comprehensive income, equity, and cash flows for each of the years in the three-year period ended December 31, 2021, and the related notes and financial statement schedule III (collectively, the consolidated financial statements), and our report dated February 22, 2022 expressed an unqualified opinion on those consolidated financial statements.

The Company acquired the Jekyll Island Club Resort, the Margaritaville Hollywood Beach Resort, and the Estancia La Jolla Hotel & Spa during 2021, and management excluded from its assessment of the effectiveness of the Company’s internal control over financial reporting as of December 31, 2021, the Jekyll Island Club Resort, the Margaritaville Hollywood Beach Resort, and the Estancia La Jolla Hotel & Spa’s internal control over financial reporting associated with total assets of $7.8 million and total revenues of $35.5 million included in the consolidated financial statements of the Company as of and for the year ended December 31, 2021.

Our audit of internal control over financial reporting of the Company also excluded an evaluation of the internal control over financial reporting of the Jekyll Island Club Resort, the Margaritaville Hollywood Beach Resort, and the Estancia La Jolla Hotel & Spa.

Basis for Opinion

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(in thousands, except share and per-share data)

2020 December 31, 2019

December 31, 2021 December 31, 2020

Investment in hotel properties, net $ 6,079,333 $ 5,882,022

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Shareholders’ equity:

Preferred shares of beneficial interest, $ .01 par value (liquidation preference $ 510,000 at December 31, 2020 and December 31, 2019), 100,000,000 shares authorized;

20,400,000 shares issued and outstanding at December 31, 2020 and December 31, 2019

Preferred shares of beneficial interest, $ .01 par value (liquidation preference $ 740,000 and $ 510,000 at December 31, 2021 and December 31, 2020, respectively), 100,000,000 shares authorized;

29,600,000 shares issued and outstanding at December 31, 2021 and 20,400,000 shares issued and outstanding at December 31, 2020

Common shares of beneficial interest, $ .01 par value, 500,000,000 shares authorized;

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(Gain) loss on sale of hotel properties ( 64,729 ) ( 117,401 ) ( 2,819 )

(Gain) loss and other operating expenses 4,421 8,903 ( 10,935 )

Other operating expenses 1,936 4,421 8,903

Total operating expenses 822,835 735,597 1,382,871

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Distributions to preferred shareholders ( 42,105 ) ( 32,556 ) ( 32,556 )

Issuance costs of redeemed preferred shares ( 8,055 ) — —

Net income (loss) attributable to common shareholders $ ( 235,018 ) $ ( 424,285 ) $ 82,886

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(in thousands, except share data)

For the year ended December 31, 2019

Preferred Shares Common Shares Additional Paid-In Capital Accumulated Other Comprehensive Income (Loss) Distributions in Excess of Retained Earnings Total Shareholders' Equity Non-Controlling Interests Total Equity

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Issuance of shares, net of offering costs — — — — ( 275 ) — — ( 275 ) — ( 275 )

Issuance of operating partnership units — — — — — — — — 4,665 4,665

Issuance of common shares for Board of Trustees compensation — — 25,282 1 739 — — 740 — 740

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Distributions on preferred shares — — — — — — ( 32,556 ) ( 32,556 ) ( 50 ) ( 32,606 )

Net contribution from non-controlling interests — — — — — — — — 125 125

Redemption of non-controlling interest LTIP units — — — — ( 30 ) — — ( 30 ) ( 95 ) ( 125 )

Other comprehensive income (loss):

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Amounts reclassified from other comprehensive income — — — — — ( 260 ) — ( 260 ) — ( 260 )

Cumulative effect adjustment

from adoption of new accounting

standard — — — — — 548 ( 548 ) — — —

Net income (loss) — — — — — — 115,442 115,442 283 115,725

Balance at December 31, 2019 20,400,000 $ 204 130,484,956 $ 1,305 $ 4,069,410 $ ( 24,715 ) $ ( 424,996 ) $ 3,621,208 $ 10,728 $ 3,631,936

Pebblebrook Hotel Trust

Consolidated Statements of Equity - Continued

(in thousands, except share data)

For the year ended December 31, 2020

Shares Amount Shares Amount

Balance at December 31, 2019 20,400,000 $ 204 130,484,956 $ 1,305 $ 4,069,410 $ ( 24,715 ) $ ( 424,996 ) $ 3,621,208 $ 10,728 $ 3,631,936

Issuance of shares, net of offering costs — — — — ( 119 ) — — ( 119 ) — ( 119 )

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Distributions on preferred shares — — — — — — ( 32,556 ) ( 32,556 ) — ( 32,556 )

Redemption of non-controlling interests — — — — ( 30 ) — — ( 30 ) ( 95 ) ( 125 )

Redemption of non-controlling interest LTIP units — — 109,240 1 13,445 — — 13,446 ( 13,446 ) —

Equity component of convertible senior notes — — — — 113,890 — — 113,890 — 113,890

Purchases of capped calls in connection with convertible senior notes — — — — ( 38,300 ) — — ( 38,300 ) — ( 38,300 )

Other comprehensive income (loss):

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Balance at December 31, 2020 20,400,000 $ 204 130,673,300 $ 1,307 $ 4,169,870 $ ( 60,071 ) $ ( 853,973 ) $ 3,257,337 $ 6,989 $ 3,264,326

Pebblebrook Hotel Trust

Consolidated Statements of Equity - Continued

(in thousands, except share data)

For the year ended December 31, 2021

Shares Amount Shares Amount

Balance at December 31, 2020 20,400,000 $ 204 130,673,300 $ 1,307 $ 4,169,870 $ ( 60,071 ) $ ( 853,973 ) $ 3,257,337 $ 6,989 $ 3,264,326

Redemption of preferred shares ( 10,000,000 ) ( 100 ) — — ( 241,845 ) — ( 8,055 ) ( 250,000 ) — ( 250,000 )

Issuance of shares, net of offering costs 19,200,000 192 — — 463,862 — — 464,054 — 464,054

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Distributions on preferred shares — — — — — — ( 42,105 ) ( 42,105 ) — ( 42,105 )

Redemption of non-controlling interest LTIP units — — 109,240 1 13,445 — — 13,446 ( 13,446 ) —

Equity component of convertible senior notes — — — — 113,890 — — 113,890 — 113,890

Cumulative effect adjustment from adoption of new accounting standard — — — — ( 113,099 ) — — ( 113,099 ) — ( 113,099 )

Purchases of capped calls in connection with convertible senior notes — — — — ( 20,975 ) — — ( 20,975 ) — ( 20,975 )

Other adjustment — — — — — 393 — 393 ( 393 ) —

Other comprehensive income (loss):

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Share-based compensation 11,433 22,779 8,239

(Gain) loss on marketable securities — — 2,978

Amortization of deferred financing costs, non-cash interest and mortgage loan premiums 17,200 17,349 18,256

Amortization of deferred financing costs, non-cash interest and other amortization 16,633 17,200 17,349

(Gain) loss on sale of hotel properties ( 64,729 ) ( 117,401 ) ( 2,819 )

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Non-cash ground rent 7,061 6,198 6,395

Other 347 2,365 2,939

Other adjustments ( 1,959 ) 347 2,365

Changes in assets and liabilities:

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Investing activities:

Acquisition of LaSalle, net of cash acquired — — ( 1,372,584 )

Improvements and additions to hotel properties ( 83,827 ) ( 125,014 ) ( 169,632 )

Proceeds from sales of hotel properties 255,927 375,131 470,352

Investment in marketable securities — — ( 356,180 )

Sale of marketable securities — — 6,658

Purchase of corporate office equipment, software, and furniture — ( 752 ) ( 164 )

Property insurance proceeds — — 5,162

Acquisition of hotel properties ( 253,541 ) — —

Other investing activities ( 128 ) — ( 752 )

Net cash provided by (used in) investing activities ( 81,569 ) 250,117 299,968

Financing activities:

Gross proceeds from issuance of preferred shares 480,000 — —

Payment of offering costs — common and preferred shares ( 15,947 ) ( 119 ) ( 275 )

Payment of deferred financing costs ( 14,510 ) ( 16,372 ) ( 461 )

(Distributions) contributions from non-controlling interest — ( 125 ) —

(Distributions to) contributions from non-controlling interest — — ( 125 )

Borrowings under revolving credit facilities — 760,115 414,771

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Repurchases of common shares ( 720 ) ( 1,255 ) ( 4,009 )

Redemption of preferred shares ( 250,000 ) — —

Distributions — common shares/units ( 5,279 ) ( 53,960 ) ( 184,836 )

Distributions — preferred shares ( 39,443 ) ( 32,556 ) ( 32,556 )

Proceeds from refundable membership deposits — — 29

Pebblebrook Hotel Trust

Consolidated Statements of Cash Flows

(In thousands)

Repayments of refundable membership deposits ( 2,739 ) ( 1,354 ) ( 637 )

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Pebblebrook Hotel Trust (the "Company") was formed as a Maryland real estate investment trust in October 2009 to opportunistically acquire and invest in hotel properties located primarily in major United States cities, with an emphasis on major gateway coastal markets.

Pebblebrook Hotel Trust (the "Company") is an internally managed hotel investment company, formed as a Maryland real estate investment trust in October 2009 to opportunistically acquire and invest in hotel properties located primarily in major United States cities, with an emphasis on major gateway coastal markets.

As of December 31, 2021, the Company owned 53 hotels with a total of 13,247 guest rooms.

The hotels are located in the following markets:

The hotel properties are located in:

Boston, Massachusetts;

Chicago, Illinois;

Hollywood, Florida;

Jekyll Island, Georgia;

Key West, Florida;

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Naples, Florida;

New York, New York;

Philadelphia, Pennsylvania;

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San Francisco, California;

Santa Cruz, California;

Seattle, Washington;

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The Company is the sole general partner of the Operating Partnership.

At December 31, 2020, the Company owned 99.8 % of the common limited partnership units issued by the Operating Partnership ("common units").

As of December 31, 2021, the Company owned 99.3 % of the common limited partnership units issued by the Operating Partnership ("common units").

The remaining 0.7 % of the common units are owned by the other limited partners of the Operating Partnership.

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PHL is consolidated into the Company’s financial statements.

COVID-19 Operations and Liquidity Update

In March 2020, the World Health Organization declared the novel coronavirus ("COVID-19") to be a global pandemic and the virus has continued to spread throughout the United States and the world.

As a result of this pandemic and subsequent government mandates, health official recommendations, corporate policy changes and individual responses, hotel demand was dramatically reduced.

Following government mandates and health official recommendations, the Company temporarily suspended operations at 47 of its hotels and resorts and working with its operators, dramatically reduced staffing and expenses at the hotels that remained operational.

Throughout the summer months, hotel industry demand improved from its historical lows seen in the second quarter, particularly as leisure customers sought to travel to drive-to hotels and resorts that could offer more space and outdoor experiences.

The monthly revenue increased slowly through October as the Company reopened several of its hotels and resorts between May and October.

November and December had declining revenue at most of its opened hotels, except its South Florida properties, as leisure demand declined and business travel did not return in a meaningful manner.

The South Florida properties experienced slightly increasing revenue late in the year which is consistent with the seasonal pattern for these warm weather resort properties.

The Company anticipates leisure travel will return as vaccine distribution becomes more widely available, followed by business travel.

The Company still anticipates group demand will be the slowest to return until there is more certainty around health and immunity solution for the country.

As of December 31, 2020, 37 of the Company's hotels and resorts listed below were open, with operations at the remaining 16 hotels still temporarily suspended.

The Company anticipates reopening additional hotels as demand returns and it determines that the Company would lose less money with the hotels open versus remaining closed.

Property Location

L'Auberge Del Mar Del Mar, CA

Hotel Palomar Los Angeles Beverly Hills Los Angeles, CA

W Los Angeles - West Beverly Hills Los Angeles, CA

Mondrian Los Angeles West Hollywood, CA

Le Meridien Delfina Santa Monica Santa Monica, CA

Viceroy Santa Monica Hotel Santa Monica, CA

Le Parc Suite Hotel West Hollywood, CA

Montrose West Hollywood West Hollywood, CA

Chamberlain West Hollywood Hotel West Hollywood, CA

Grafton on Sunset West Hollywood, CA

Embassy Suites San Diego Bay - Downtown San Diego, CA

Paradise Point Resort & Spa San Diego, CA

San Diego Mission Bay Resort (formerly Hilton San Diego Mission Bay Resort) San Diego, CA

The Westin San Diego Gaslamp Quarter San Diego, CA

Hilton San Diego Gaslamp Quarter San Diego, CA

Solamar Hotel San Diego, CA

Hotel Spero San Francisco, CA

Hotel Zetta San Francisco San Francisco, CA

Chaminade Resort & Spa Santa Cruz, CA

Southernmost Beach Resort Key West, FL

The Marker Key West Harbor Resort Key West, FL

LaPlaya Beach Resort and Club Naples, FL

Hotel Colonnade Coral Gables, Autograph Collection Miami, FL

The Liberty, A Luxury Collection Hotel, Boston Boston, MA

Hyatt Regency Boston Harbor Boston, MA

W Boston Boston, MA

The Westin Copley Place, Boston Boston, MA

George Hotel Washington, DC

Hotel Zena Washington DC (formerly Donovan Hotel) Washington, DC

Viceroy Washington DC (formerly Mason & Rook Hotel) Washington, DC

Skamania Lodge Stevenson, WA

Hotel Monaco Seattle Seattle, WA

Hotel Vintage Seattle Seattle, WA

Hotel Vintage Portland Portland, OR

The Heathman Hotel Portland, OR

The Nines, a Luxury Collection Hotel, Portland Portland, OR

Sofitel Philadelphia at Rittenhouse Square Philadelphia, PA

The COVID-19 pandemic has had a significant negative impact on the Company's operations and financial results to date and the Company expects that it will continue to have a significant negative impact on the Company's results of operations, financial position and cash flow in 2021.

The Company cannot estimate when travel demand will recover.

As a result of uncertainty at the beginning of the pandemic, in March 2020, the Company fully drew down on its $ 650.0 million unsecured revolving credit facility, reduced the quarterly cash dividend on its common shares to one penny per share, reduced planned capital expenditures, reduced the compensation of its executive officers, trustees and employees, and, working closely with its hotel operating partners, significantly reduced its hotels' operating expenses.

On June 29, 2020, the Company amended its

existing credit facilities, term loan facilities and senior notes.

Among other things, the amendments extended the maturity of a significant portion of the term loan due in November 2021 to November 2022, waived existing financial covenants through the end of the first quarter of 2021 and provided substantially less restrictive financial covenants through the end of the second quarter of 2022.

In addition, the Company repaid approximately $ 250.0 million on its unsecured revolving credit facility.

In December 2020, the Company issued $ 500.0 million of convertible notes and used the proceeds to repay an additional $ 250.0 million of its unsecured revolving credit facility and $ 200.0 million of its unsecured term loans.

As of December 31, 2020, the Company had a balance of $ 40.0 million on its unsecured revolving credit facility.

In February 2021, the Company issued an additional $ 250.0 million of convertible notes under the same terms as the December 2020 offering, at a 5.5 % premium to par.

In connection with the pricing of the convertible notes, the Company entered into privately negotiated capped call transactions with certain of the underwriters, their respective affiliates and/or other counterparties.

The Company used the net proceeds to reduce amounts outstanding under the Company’s senior unsecured revolving credit facility, unsecured term loans, and for general corporate purposes.

In February 2021, the Company further amended the agreements governing the existing credit facilities, term loan facilities and senior notes to, among other items, waive financial covenants through the end of the first quarter of 2022 except for the minimum fixed charge coverage and minimum unsecured interest coverage ratio which were extended through December 31, 2021 and to increase the interest rate spread.

Refer to "Note 5.

Debt" for additional information regarding these amendments and convertible debt.

Based on these amendments and expense and cash burn rate reductions, the Company believes that it has sufficient liquidity to meet its obligations for the next twelve months.

The negative impact of the demand loss caused by COVID-19 will result in a significant income tax loss in PHL.

Given the continued negative impact of the COVID-19 pandemic on the Company's financial results and uncertainties about the Company's ability to utilize its net operating loss in future years, the Company had a valuation allowance of $ 20.9 million as of December 31, 2020.

As of December 31, 2020, the Company had an income tax receivable of $ 6.9 million attributable to the net operating loss carry-back, which is included in prepaid expenses and other assets in the accompanying consolidated balance sheets.

The Company also adopted an optional remote-work policy and other physical distancing policies at its corporate office and the Company does not anticipate these policies to have any adverse impact on its ability to continue to operate its business.

Transitioning to a remote-work environment has not had a material adverse impact on the Company's financial reporting system, internal controls or disclosure controls and procedures.

COVID-19 and Liquidity Update

In March 2020, the World Health Organization declared the novel coronavirus ("COVID-19") to be a global pandemic and the virus spread throughout the United States and the world.

As a result of this pandemic and subsequent government mandates, health official recommendations, corporate policy changes and individual responses, hotel demand dramatically declined.

In response, the Company implemented significant cost controls, salary reductions and temporarily suspended operations at 47 of its hotels and resorts in 2020.

In addition, to improve liquidity, the Company raised capital by issuing convertible notes and additional preferred shares as summarized below.

As demand improved as a result of an increase in vaccinations and corresponding lifting of governmental restrictions and recommendations, the Company gradually reopened its hotels and resorts.

As of December 31, 2021, all of the Company's hotels and resorts were open, with the exception of Hotel Vitale, whose operations will remain suspended until the completion of its renovations and repositioning, which we expect to occur in the second quarter of 2022.

The COVID-19 pandemic had a significant negative impact on the Company's operations and financial results throughout 2021.

Although results improved relative to 2020, the Company cannot estimate with certainty when travel demand will fully recover.

However, the Company anticipates further recovery in 2022.

Leisure travel in 2021 exceeded expectations, particularly at the Company's warmer-weather and resort properties, and we expect this trend to continue in 2022.

However, business travel continues to be substantially lower.

During 2021, the Company amended the agreements governing its existing credit facilities, term loan facilities and unsecured senior notes to, among other changes:

• waive quarterly financial covenants until the second quarter of 2022, with substantially less-restrictive covenants through the end of the first quarter of 2023;

• extend or provide the option for us to extend more than $ 1.0 billion of debt maturities including our revolving credit facility;

• increase pricing until the end of the covenant waiver period;

• impose certain restrictions during the covenant waiver period on share repurchases, dividends, capital improvements, and hotel property acquisitions.

Based on the amendments to the Company's credit agreements, actions noted above, and assumptions regarding the recovery of demand, the Company believes it has sufficient liquidity to meet its obligations for the next 12 months.

For further discussion on the Company's liquidity, see Liquidity and Capital Resources included in Part II, Item 7 of this Annual Report on Form 10-K.

During the year ended December 31, 2021, other significant transactions included:

• On February 9, 2021, the Company issued, at a 5.5 % premium to par, an additional $ 250.0 million aggregate principal amount of the convertible notes originally issued in December 2020.

• On April 1, 2021, the Company sold the Sir Francis Drake for $ 157.6 million.

• On May 13, 2021, the Company raised $ 222.6 million of net proceeds from the issuance of 9,200,000 6.375 % Series G Cumulative Redeemable Preferred Shares.

• On June 10, 2021, the Company sold The Roger New York for $ 19.0 million.

• On July 22, 2021, the Company acquired the leasehold interest in Jekyll Island Club Resort for $ 94.0 million.

• On July 27, 2021, the Company raised $ 242.1 million of net proceeds from the issuance of 10,000,000 5.70 % Series H Cumulative Redeemable Preferred Shares.

• On August 21, 2021, the Company redeemed all outstanding 6.375 % Series D Cumulative Redeemable Preferred Shares.

• On August 22, 2021, the Company redeemed all outstanding 6.50 % Series C Cumulative Redeemable Preferred Shares.

• On September 9, 2021, the Company sold Villa Florence San Francisco on Union Square for $ 87.5 million.

• On September 23, 2021, the Company acquired the leasehold interest in Margaritaville Hollywood Beach Resort for $ 270.0 million, including the assumption of a $ 161.5 million mortgage loan.

• On October 20, 2021, the Company acquired Avalon Bed & Breakfast and Duval Gardens for $ 20.0 million, with both properties consolidated into the Company's Southernmost Beach Resort.

• On December 1, 2021, the Company acquired the leasehold interest in Estancia La Jolla Hotel & Spa for $ 108.0 million, including the assumption of a $ 61.7 million mortgage loan.

• The Company paid down $ 431.9 million of debt, consisting of $ 341.9 million of term loans, $ 50.0 million of senior unsecured notes and $ 40.0 million on the senior unsecured credit facility.

Summary of Significant Accounting Policies

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Due to their short maturities, the carrying amounts of these assets and liabilities approximate fair value.

See Note 5 to the accompanying consolidated financial statements for disclosures on the fair value of debt and derivative instruments.

See Note 5, Debt, to the accompanying consolidated financial statements for disclosures on the fair value of debt and derivative instruments.

Investment in Hotel Properties

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Transaction costs related to business combinations are expensed as incurred and included on the consolidated statements of operations and comprehensive income.

Transaction costs related to asset acquisitions are capitalized and recorded to investment in hotel property.

Hotel renovations and replacements of assets that improve or extend the life of the asset are recorded at cost and depreciated over their estimated useful lives.

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Restricted Cash

Restricted cash primarily consists of reserves for replacement of furniture and fixtures and cash held in escrow pursuant to lender requirements to pay for real estate taxes or property insurance.

Restricted cash primarily consists of reserves for replacement of furniture and fixtures, cash held in escrow pursuant to certain lender or hotel management agreement requirements to pay for real estate taxes, ground rent or property insurance and cash held in cash management and lockbox accounts pursuant to certain mortgage loan requirements.

Prepaid Expenses and Other Assets

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Any anti-dilutive securities are excluded from the diluted per-share calculation.

Comprehensive Income

The purpose of reporting comprehensive income is to report a measure of all changes in equity of an entity that result from recognized transactions and other economic events of the period other than transactions with owners in their capacity as owners.

Comprehensive income consists of all components of income, including other comprehensive income, which is excluded from net income.

Comprehensive Income (Loss)

The purpose of reporting comprehensive income (loss) is to report a measure of all changes in equity of an entity that result from recognized transactions and other economic events of the period other than transactions with owners in their capacity as owners.

Comprehensive income (loss) consists of net income (loss) and other comprehensive income (loss).

Segment Information

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However, because each of the hotels has similar economic characteristics, facilities, and services, the hotel properties have been aggregated into a single operating segment.

Recent Accounting Standards

In February 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2016-02, Leases , which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e., lessees and lessors).

The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee.

This classification will determine whether lease expense is recognized based on an effective interest method or on a straight line basis over the term of the lease, respectively.

A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification.

In July 2018, the FASB issued ASU 2018-10, Codification Improvements to Topic 842, Leases , to clarify how to apply certain aspects of the new leases standard.

In July 2018, the FASB also issued ASU 2018-11, Leases (Topic 842):

Targeted Improvements , to give companies another option for transition and to provide lessors with a practical expedient to reduce the cost and complexity of implementing the new standard.

The transition option allows companies to not apply the new leases standard in the comparative periods they present in their financial statements in the year of adoption.

The Company adopted this standard on January 1, 2019.

The Company elected the practical expedients allowed under the guidance and retained the original lease classification and historical accounting for initial direct costs for leases existing prior to the adoption date.

The Company also elected not to restate prior periods for the impact of the adoption of the new standard.

The adoption of this standard has resulted in the recognition of right-of-use assets and related liabilities to account for the Company's future obligations under the ground lease and corporate office arrangements for which the Company is the lessee.

See Notes 4 and 11 below for additional disclosures of the adoption of this standard.

In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging— Contracts in Entity’s Own Equity (Subtopic 815-40), which, among other things, simplifies the accounting for convertible instruments by eliminating the requirement to separate conversion features from the host contract.

Consequently, a convertible debt instrument will be accounted for as a single liability measured at its amortized cost.

Early adoption is permitted for fiscal years beginning after December 15, 2020, including interim periods.

The Company early adopted ASU 2020-06 on January 1, 2021.

As such, beginning January 1, 2021, the convertible debt will be recorded entirely as a single liability with no portion of the proceeds from the issuance of the convertible debt instrument recorded as attributable to the conversion feature.

In addition, the Company will cease recording non-cash interest expense associated with amortization of the debt discount and will calculate earnings per share using the if-converted method.

New Accounting Pronouncements

Convertible Debt

In August 2020, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40) , which simplified the accounting for convertible instruments by eliminating the requirement to separate conversion features from the host contract.

The new guidance eliminates the beneficial conversion and cash conversion accounting models for convertible instruments.

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The guidance also removes certain conditions for equity classification related to contracts in an entity’s own equity and requires the application of the if-converted method for calculating diluted earnings per share.

The Company early adopted ASU 2020-06 effective January 1, 2021 and reclassified its equity component of the convertible debt to the liability.

Convertible debt is now recorded entirely as a single liability with no portion of the proceeds from the issuance of the convertible debt instrument recorded as attributable to the conversion feature.

In addition, the Company ceased recording non-cash interest expense associated with the amortization of the debt discount and calculates earnings per share using the if-converted method to the extent those shares are not anti-dilutive.

Reference Rate Reform

In March 2020 and January 2021, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848):

Facilitation of the Effects of Reference Rate Reform on Financial Reporting and ASU 2021-01, Reference Rate Reform (Topic 848) , respectively.

ASU 2020-04 and ASU 2021-01 provide optional expedients and exceptions for applying U.S.

GAAP to contracts, hedging relationships, and other transactions that reference the London Interbank Offered Rate ("LIBOR") or another reference rate expected to be discontinued because of reference rate reform, if certain criteria are met.

The guidance in ASU 2020-04 and ASU 2021-01 was effective upon issuance and, once adopted, may be applied prospectively to contract modifications and hedging relationships through December 31, 2022.

In 2020, the Company elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives.

Application of these expedients preserves the presentation of derivatives consistent with past presentation.

The Company will continue to evaluate the impact of the adoption of ASU 2020-04 and ASU 2021-01 on its consolidated financial statements.

Acquisition and Disposition of Hotel Properties

There were no acquisitions of hotel properties during the years ended December 31, 2020 and 2019.

The Company will report a disposed or held for sale hotel property or group of hotel properties in discontinued operations only if the disposal represents a strategic shift that has, or will have, a major effect on its operations and financial results.

All other disposed hotel properties will have their operating results reflected within continuing operations on the Company's consolidated statements of operations and comprehensive income for all periods presented.

The following table sets forth information regarding the Company's disposition transactions during the years ended December 31, 2020 and 2019 (in thousands):

On July 22, 2021, the Company acquired the leasehold interest in the 200 -room Jekyll Island Club Resort in Jekyll Island, Georgia for $ 94.0 million, excluding prorations and transaction costs, using cash on hand.

On September 23, 2021, the Company acquired the leasehold interest in the 369 -room Margaritaville Hollywood Beach Resort in Hollywood, Florida for $ 270.0 million, excluding prorations and transaction costs, using cash on hand and the assumption of a $ 161.5 million mortgage loan.

On October 20, 2021, the Company acquired the 19 -room Avalon Bed & Breakfast and the 12 -room Duval Gardens in Key West, Florida for $ 20.0 million, excluding prorations and transaction costs, using cash on hand.

Both properties were consolidated into the Company's Southernmost Beach Resort.

On December 1, 2021, the Company acquired the leasehold interest in the 210 -room Estancia La Jolla Hotel & Spain La Jolla, California for $ 108.0 million, excluding prorations and transaction costs, using cash on hand and the assumption of a $ 61.7 million mortgage loan.

See Note 5, Debt , for additional information about the mortgage loans assumed and Note 11, Commitments and Contingencies , for additional information about the leasehold interests acquired.

The following table summarizes disposition transactions during the years ended December 31, 2021 and 2020 (in thousands):

Hotel Property Name Location Sale Date Sale Price

Sofitel Washington DC Lafayette Square and InterContinental Buckhead Atlanta Washington, DC / Buckhead, GA March 6, 2020 $ 331,000

Union Station Hotel Nashville, Autograph Collection Nashville, TN July 29, 2020 56,000

Sir Francis Drake San Francisco, CA April 1, 2021 $ 157,625

The Roger New York New York, NY June 10, 2021 19,000

Villa Florence San Francisco on Union Square San Francisco, CA September 9, 2021 87,500

2021 Total $ 264,125

The Liaison Capitol Hill Washington, D.C.

February 14, 2019 $ 111,000

Hotel Palomar Washington DC Washington, D.C.

February 22, 2019 141,450

Onyx Hotel Boston, MA May 29, 2019 58,255

Hotel Amarano Burbank Burbank, CA July 16, 2019 72,866

Rouge Hotel Washington, DC September 12, 2019 42,000

Hotel Madera Washington, DC September 26, 2019 23,250

Topaz Hotel Washington, DC November 22, 2019 33,100

Sofitel Washington DC Lafayette Square and

InterContinental Buckhead Atlanta Washington, DC /

Buckhead, GA March 6, 2020 $ 331,000

Union Station Hotel Nashville, Autograph Collection Nashville, TN July 29, 2020 56,000

2020 Total $ 387,000

For the years ended December 31, 2020, 2019 and 2018, the Company recognized a (gain) loss on its dispositions of $( 117.4 ) million, $( 2.8 ) million and $ 2.1 million, respectively, which is included in (gain) loss on sale of hotel properties, in the accompanying consolidated statements of operations and comprehensive income.

For the years ended December 31, 2020, 2019 and 2018, the accompanying consolidated statements of operations and comprehensive income included operating income (loss) of $ 4.9 million, $ 46.4 million and $ 30.1 million, respectively, related to the hotel properties sold.

For the years ended December 31, 2021, 2020 and 2019, the accompanying consolidated statements of operations and comprehensive income included operating income (loss) of $( 6.5 ) million, $( 15.5 ) million and $ 33.8 million, respectively, excluding impairment loss and (gain) loss on sale of hotel properties, related to the hotel properties sold.

The sales of the hotel properties described above did not represent a strategic shift that had a major effect on the Company’s operations and financial results, and therefore, did not qualify as discontinued operations.

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Investment in hotel properties as of December 31, 2021 and 2020 consisted of the following (in thousands):

2020 December 31,

December 31, 2021 December 31, 2020

Land $ 926,330 $ 973,848

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The Company reviews its investment in hotel properties for impairment whenever events or circumstances indicate potential impairment.

As a result of the effects of the COVID-19 pandemic on our expected future operating cash flows and estimated hold periods for certain properties, we determined certain impairment triggers had occurred and as a result, the Company assessed its investment in hotel properties for recoverability.

Based on the analyses performed, for the year ended December 31, 2020, the Company recognized an impairment loss of $ 74.6 million related to two hotels and the retail component of a hotel as a result of the fair values being lower than their carrying values.

The impairment loss was determined using level 2 inputs under authoritative guidance for fair value measurements.

On January 1, 2019, the Company adopted ASC 842, Leases and applied it prospectively.

At adoption, the Company also elected the practical expedients which permitted it to not reassess its prior conclusions about lease identification, classification and initial direct costs.

Consequently on January 1, 2019, the Company recognized right-of-use assets and related liabilities

related to its ground leases, all of which are operating leases.

Since most of the Company's leases do not provide an implicit rate, the Company used incremental borrowing rates, which ranged from 5.5 % to 7.6 %.

All of these ground leases have long terms, ranging from 10 years to 88 years and the Company included the exercise of options to extend when it is reasonably certain the Company will exercise such option.

See Note 11 for additional information about the ground leases.

As a result of the ongoing effects of the COVID-19 pandemic on its expected future operating cash flows and estimated hold periods for certain properties, the Company determined certain impairment triggers had occurred and therefore, the Company assessed its investment in hotel properties for recoverability.

Based on the analyses performed, for the year ended December 31, 2021, the Company recognized an impairment loss of $ 14.9 million related to one hotel as a result of its fair value being lower than its carrying value.

The impairment loss was determined using Level 2 inputs under authoritative guidance for fair value measurements using information from marketing efforts for this property.

For the year ended December 31, 2020, the Company recognized an impairment loss of $ 74.6 million related to two hotels and the retail component of a hotel as a result of the fair value being lower than its carrying value.

The impairment loss was determined using Level 2 inputs under authoritative guidance for fair value measurements using information from marketing efforts for this property.

Right-of-use Assets and Lease Liabilities

The Company recognized right-of-use assets and related liabilities related to its ground leases, all of which are operating leases.

When the rate implicit in the lease could not be determined, the Company used incremental borrowing rates, which ranged from 4.7 % to 7.6 %.

In addition, the term used includes any options to exercise extensions when it is reasonably certain the Company will exercise such option.

See Note 11, Commitments and Contingencies , for additional information about the ground leases.

The right-of-use assets and liabilities are amortized to ground rent expense over the term of the underlying lease agreements.

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The financing lease liabilities are included in accounts payable, accrued expenses and other liabilities on the Company's accompanying consolidated balance sheets.

The adoption of this standard had minimal impact on the Company's consolidated statements of operations and comprehensive income.

On June 29, 2020, the Company amended its credit agreements and related documents governing the unsecured revolving credit facilities, term loan agreements and senior notes which:

• waived existing financial covenants through the end of the first quarter of 2021 and provided substantially less restrictive covenants through the end of the second quarter of 2022 ("waiver period");

• extended the maturity of $ 242.6 million of the Company’s Sixth Term Loan 2021 tranche of $ 300.0 million from November 2021 to November 2022;

• fixed the spread at the highest threshold through the end of the waiver period;

• increased the LIBOR floor from 0 % to 0.25 % for any debt not designated by the Company as being covered by an interest rate swap;

• requires assets to be pledged as security, in the future, under certain circumstances;

• preserved the Company's ability to pay quarterly preferred equity dividend payments and a $ 0.01 per share quarterly common dividend (or higher if required to maintain REIT status) during the waiver period so long as the Company is in compliance with all loan agreements;

• provided the Company flexibility to complete new acquisitions and other investments during the waiver period;

• permit the Company to complete up to $ 90.0 million of capital improvements and redevelopment projects through the end of the waiver period;

• provide limitations during the waiver period on common share repurchases and certain required prepayments following capital issuances or property dispositions.

On February 18, 2021, the Company further amended its credit agreements and related documents governing the unsecured revolving credit facilities, term loan agreements and senior notes, which:

• extended the waiver period for financial covenants through the end of the first quarter of 2022 except for the minimum fixed charge coverage and the minimum unsecured interest coverage ratio which are extended through December 31, 2021.

The covenants are substantially less restrictive through a phase-in period;

On February 18, 2021, the Company amended its credit agreements and related documents governing its unsecured revolving credit facilities, term loan agreements and senior notes, which:

• waived all of its financial covenants until the second quarter of 2022 (with substantially less-restrictive covenants through the end of the first quarter of 2023), except for the minimum fixed charge coverage ("FCCR") and the minimum unsecured interest coverage ratio ("Unsecured ICR") which were extended through December 31, 2021;

• extended the majority of the remaining balance of the Company's Sixth Term Loan 2021 tranche, from November 2021 to November 2022;

• increased the spread on the unsecured revolving credit facility to LIBOR plus 2.40 % and unsecured term loans to LIBOR plus 2.35 %;

• increased the fixed rate on the Senior Unsecured Notes by 0.45 % during the extended waiver period;

• extends other terms through the extended waiver period.

• increased the fixed rate on the senior unsecured notes by 0.45 % during the waiver period;

• extended other terms through the waiver period.

On December 9, 2021, the Company amended its credit agreements and related documents governing its unsecured revolving credit facilities, term loan agreements and senior notes, which:

• extended the maturity date of the Company's senior unsecured credit facility from January 2022 to March 2023, and provided an option to extend for up to two six-month periods;

• extended the maturity date of the Company's PHL unsecured credit facility from January 2022 to March 2023, and reduced the borrowing capacity principal amount from $ 25.0 million to $ 20.0 million;

• extended the maturity date for $ 274.0 million of the Company's First Term Loan from January 2023 to March 2024;

• provided an option to extend up to $ 69.8 million of the remaining principal balance of the Company's Sixth Term Loan Tranche 2021 from November 2022 to November 2023;

• provided an option to extend up to $ 93.0 million of the remaining principal balance of the Company's Sixth Term Loan Tranche 2022 from November 2022 to November 2023;

• set the maximum amount of permitted additional secured non-recourse indebtedness at $ 400.0 million;

• set the amount that may be reinvested in the acquisition of unencumbered hotel properties funded by the disposition of hotel properties at $ 1.0 billion;

• extended the waiver period for the minimum FCCR and the minimum Unsecured ICR financial covenants until the second quarter of 2022;

• set the minimum FCCR for the second quarter of 2022 to 1.25 :1.00;

• set the minimum Unsecured ICR for the second quarter of 2022 to 1.50 :1.00.

The Company's debt consisted of the following as of December 31, 2021 and 2020 (dollars in thousands):

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Senior unsecured credit facility Floating (1)(2)(3)

January 2022 $ 40,000 $ 165,000

March 2023 $ — $ 40,000

PHL unsecured credit facility Floating (2)(4)

January 2022 — —

March 2023 — —

Total revolving credit facilities $ — $ 40,000

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January 2023 26,000 300,000

First Term Loan Extended Floating (5)

March 2024 274,000 —

Second Term Loan Floating (5)

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November 2021 — 40,966

40,966 300,000

Tranche 2021 Extended Floating (5)(9)

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Convertible senior notes 1.75 % December 2026 750,000 500,000

Debt discount, net ( 113,099 ) —

Debt premium (discount), net 11,605 ( 113,099 )

Deferred financing costs, net ( 16,204 ) ( 12,568 )

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Senior unsecured notes

Series A Notes 4.70 % December 2023 60,000 60,000

Series B Notes 4.93 % December 2025 40,000 40,000

Series A Notes 5.15 % (6)

December 2023 47,600 60,000

Series B Notes 5.38 % (7)

December 2025 2,400 40,000

Total senior unsecured notes at stated value 50,000 100,000

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Total senior unsecured notes $ 49,838 $ 99,593

Mortgage loans

Margaritaville Hollywood Beach Resort Floating (8)

May 2022 161,500 —

Estancia La Jolla Hotel & Spa 5.07 % September 2028 61,373 —

Total mortgage loans at stated value 222,873 —

Debt premium (discount), net ( 2,735 ) —

Deferred financing costs, net ( 745 ) —

Total mortgage loans $ 219,393 $ —

Total debt $ 2,441,888 $ 2,280,471

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(1) Borrowings bear interest at floating rates equal to, at the Company's option, either (i) LIBOR plus an applicable margin or (ii) an Adjusted Base Rate (as defined in the applicable credit agreement) plus an applicable margin.

(2) Borrowings bear interest at floating rates equal to, at the Company's option, either (i) LIBOR plus an applicable margin or (ii) an Eurocurrency Rate (as defined in the applicable credit agreement) plus an applicable margin.

(2) In December 2021, the Company exercised the option to extend the maturity date to March 2023, pursuant to certain terms and conditions and payment of an extension fee.

(3) Of the total borrowing capacity, $ 39.0 million will mature in January 2022.

The Company has the option to extend the maturity date of March 2023 for the remaining $ 611.0 million for up to two six-month periods, pursuant to certain terms and conditions and payment of an extension fee.

(4) Borrowings bear interest at floating rates equal to, at the Company's option, either (i) LIBOR plus an applicable margin or (ii) a Eurocurrency Rate (as defined in the applicable credit agreement) plus an applicable margin.

(5) Borrowings under the term loan facilities bear interest at floating rates equal to, at the Company's option, either (i) LIBOR plus an applicable margin or (ii) a Base Rate plus an applicable margin.

As of December 31, 2020, $ 1.4 billion of the borrowings under the term loan facilities bore an effective weighted-average fixed interest rate of 4.19 %, after taking into account interest rate swap agreements, and $ 345.0 million bore a weighted-average floating interest rate of 2.46 %.

As of December 31, 2019, $ 1.6 billion of the borrowings under the term loan facilities bore a weighted-average fixed interest rate of 3.43 %, after taking into account interest rate swap agreements, and $ 345.0 million bore a weighted-average floating interest rate of 3.32 %.

(4 ) In February 2021, we repaid $ 12.8 million of the Sixth Term Loan Tranche 2021 and extended the majority of the remaining balance to November 2022.

As of December 31, 2021, approximately $ 1.3 billion of the borrowings under the term loan facilities bore an effective weighted-average fixed interest rate of 4.06 %, after taking into account interest rate swap agreements, and approximately $ 113.1 million bore an effective weighted-average floating interest rate of 2.64 %.

As of December 31, 2020, approximately $ 1.4 billion of the borrowings under the term loan facilities bore an effective weighted-average fixed interest rate of 4.19 %, after taking into account interest rate swap agreements, and approximately $ 345.0 million bore a weighted-average floating interest rate of 2.46 %.

(6) In February 2021, the interest rate increased from 4.70 % to 5.15 %.

The increased interest rate is effective through the end of the waiver period.

(7) In February 2021, the interest rate increased from 4.93 % to 5.38 %.

The increased interest rate is effective through the end of the waiver period.

(8) The loan bears interest at a floating rate equal to one-month LIBOR plus a weighted-average spread of 2.37 %.

The Company has the option to extend the maturity date for up to two one-year periods.

(9) The Company has the option to extend the maturity date for $ 69.8 million of the principal balance by up to one year, subject to certain terms and conditions and payment of an extension fee.

(10) The Company has the option to extend the maturity date for $ 93.0 million of the principal balance by up to one year, subject to certain terms and conditions and payment of an extension fee.

Unsecured Revolving Credit Facilities

The Company has a $ 650.0 million senior unsecured revolving credit facility maturing in January 2022, with options to extend the maturity date to January 2023, pursuant to certain terms and conditions and payment of an extension fee.

As of December 31, 2020, the Company had $ 40.0 million of outstanding borrowings, $ 6.8 million of outstanding letters of credit and borrowing capacity of $ 603.2 million remaining on its senior unsecured credit facility.

Interest is paid on the periodic advances under the senior unsecured revolving credit facility at varying rates, based upon either LIBOR or the alternate base rate, plus an additional margin amount, or spread.

The Company has the ability to further increase the aggregate borrowing capacity under the credit agreement to up to $ 1.3 billion, subject to lender approval.

The Company has a $ 650.0 million senior unsecured revolving credit facility, of which $ 39.0 million will mature in January 2022.

The remaining $ 611.0 will mature in March 2023, with options to extend the maturity date for up to two six-month periods , subject to certain terms and conditions and payment of an extension fee.

As of December 31, 2021, the Company had no outstanding borrowings, $ 12.1 million of outstanding letters of credit and borrowing capacity of $ 637.9 million remaining on its senior unsecured credit facility.

Interest is paid on the periodic advances under the senior unsecured revolving credit facility at varying rates, based upon either the London Inter-bank Offered Rate ("LIBOR") or the alternate base rate, plus an additional margin amount, or spread.

The Company has the ability to further increase the aggregate borrowing capacity under the credit agreement up to $ 1.3 billion, subject to lender approval.

Borrowings on the revolving credit facility bear interest at LIBOR plus 1.45 % to 2.25 %, depending on the Company’s leverage ratio.

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The Company also has a $ 20.0 million unsecured revolving credit facility (the "PHL Credit Facility") to be used for PHL's working capital and general corporate purposes.

This credit facility has substantially similar terms as the Company's senior unsecured revolving credit facility and matures in January 2022.

This credit facility has substantially similar terms as the Company's senior unsecured revolving credit facility and matures in March 2023.

Borrowings on the PHL Credit Facility bear interest at LIBOR plus 1.45 % to 2.25 %, depending on the Company's leverage ratio.

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Each of the term loan facilities is subject to debt covenants substantially similar to the covenants under the credit agreement that governs the revolving credit facility.

Upon completion of the convertible notes offering in December, the Company repaid $ 200.0 million of the Company's sixth term loans.

During the year ended December 31, 2021, the Company repaid $ 341.9 million aggregate principal balance of the Company's Second Term Loan and Sixth Term Loan.

As of December 31, 2021, the Company was in compliance with all debt covenants of its term loan facilities.

The Company entered into interest rate swap agreements to fix the LIBOR rate on a portion of these unsecured term loan facilities, see Derivative and Hedging Activities below.

The Company entered into interest rate swap agreements to fix the LIBOR rate on a portion of these unsecured term loan facilities.

See Derivative and Hedging Activities for further discussion on the interest rate swaps.

Convertible Senior Notes

In December 2020, the Company issued $ 500.0 million aggregate principal amount of 1.75 % Convertible Senior Notes maturing in December 2026 (the "Convertible Notes").

In December 2020, the Company issued $ 500.0 million aggregate principal amount of 1.75 % Convertible Senior Notes due December 2026 (the "Convertible Notes").

The net proceeds from this offering of the Convertible Notes were approximately $ 487.3 million after deducting the underwriting fees and other expenses paid by the Company.

In February 2021, the Company issued an additional $ 250.0 million aggregate principal amount of Convertible Notes.

These additional Convertible Notes were sold at a 5.5 % premium to par and generated net proceeds of approximately $ 257.2 million after deducting the underwriting fees and other expenses paid by the Company of $ 6.5 million, which was offset by a premium received in the amount of $ 13.8 million.

The Convertible Notes are governed by an indenture (the “Base Indenture”) between the Company and The Bank of New York Mellon Trust Company, N.A., as trustee.

The net proceeds from the offering of the Convertible Notes were approximately $ 487.3 million after deducting the underwriting fees and other expenses paid by the Company.

The Convertible Notes bear interest at a rate of 1.75 % per annum, payable semi-annually in arrears on June 15th and December 15th of each year, beginning on June 15, 2021.

The Convertible Notes will mature on December 15, 2026.

The Company recorded coupon interest expense of $ 0.4 million for the year ended December 31, 2020.

The Company separated the Convertible Notes into liability and equity components.

The Company recorded coupon interest expense of $ 12.7 million and $ 0.4 million for the years ended December 31, 2021 and 2020, respectively.

The Company separated the Convertible Notes issued in December 2020 into liability and equity components.

The initial carrying amount of the liability component was $ 386.1 million and was calculated using a discount rate of 6.25 %.

The discount rate was based on the terms of debt instruments that were similar to the Convertible Notes.

The carrying amount of the equity component representing the conversion option was determined by deducting the fair value of the liability component from the principal amount of the

Convertible Notes, or $ 113.9 million.

The amount recorded in equity is not subject to remeasurement or amortization.

The $ 113.9 million also represents the initial discount recorded on the Convertible Notes.

The discount is accreted to interest expense using the effective interest rate method over the contractual term of the Convertible Notes.

The Company recorded interest expense related to the accretion of the discount and the amortization of the debt issuance costs of $ 0.9 million for the year ended December 31, 2020.

Prior to June 15, 2026, the Convertible Notes will be convertible only upon certain circumstances.

The carrying amount of the equity component representing the conversion option was determined by deducting the fair value of the liability component from the principal amount of such Convertible Notes, or $ 113.9 million.

The amount recorded in equity was not subject to remeasurement or amortization.

The $ 113.9 million also represented the initial discount recorded on the Convertible Notes.

As a result of the Company's early adoption of ASU 2020-06 on January 1, 2021, the Convertible Notes are now recorded as a single liability with no portion recorded in equity.

The Company also ceased recording non-cash interest expense associated with the amortization of the debt discount.

Prior to June 15, 2026, the Convertible Notes will be convertible upon certain circumstances.

On and after June 15, 2026, holders may convert any of their Convertible Notes into the Company’s common shares of beneficial interest (“common shares”) at the applicable conversion rate at any time at their election two days prior to the maturity date.

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The conversion rate is subject to adjustment in certain circumstances.

As of December 31, 2020, the if-converted value of the Convertible Notes did not exceed the principal amount.

As of December 31, 2021 and 2020, the if-converted value of the Convertible Notes did not exceed the principal amount.

The Company may redeem for cash all or a portion of the Convertible Notes, at its option, on or after December 20, 2023 upon certain circumstances.

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If certain make-whole fundamental changes occur, the conversion rate for the Convertible Notes may be increased.

In connection with the Convertible Notes, the Company entered into privately negotiated capped call transactions (the “Capped Call Transactions”) with certain of the underwriters of the offering of the Convertible Notes or their respective affiliates and other financial institutions (the “Capped Call Counterparties”).

In connection with the Convertible Notes issuances, the Company entered into privately negotiated capped call transactions (the “Capped Call Transactions”) with certain of the underwriters of the offerings of the Convertible Notes or their respective affiliates and other financial institutions.

The Capped Call Transactions initially cover, subject to anti-dilution adjustments substantially similar to those applicable to the Convertible Notes, the number of common shares underlying the Convertible Notes.

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The upper strike price of the Capped Call Transactions is $ 33.0225 per share.

The cost of the Capped Call Transactions was $ 38.3 million and was recorded within additional paid-in capital.

The cost of the Capped Call Transactions entered into in December 2020 and February 2021 was $ 38.3 million and $ 21.0 million, respectively, and was recorded within additional paid-in capital.

Senior Unsecured Notes

The Company has $ 60.0 million of senior unsecured notes outstanding bearing a fixed interest rate of 4.70 % per annum and maturing in December 2023 (the "Series A Notes") and $ 40.0 million of senior unsecured notes bearing a fixed interest rate of 4.93 % per annum and maturing in December 2025 (the "Series B Notes").

The Company has $ 47.6 million of senior unsecured notes outstanding bearing a fixed interest rate of 4.70 % per annum and maturing in December 2023 (the "Series A Notes") and $ 2.4 million of senior unsecured notes outstanding bearing a fixed interest rate of 4.93 % per annum and maturing in December 2025 (the "Series B Notes").

As a result of the amendments described above, the interest rates of the Series A Notes and the Series B Notes are fixed at 5.15 % and 5.38 %, respectively, for the duration of the waiver period.

The debt covenants of the Series A Notes and the Series B Notes are substantially similar to those of the Company's senior unsecured revolving credit facility.

As of December 31, 2021, the Company was in compliance with all such debt covenants.

Mortgage Loans

On September 23, 2021, the Company assumed a $ 161.5 million loan secured by a first-lien mortgage on the leasehold interest of Margaritaville Hollywood Beach Resort ("Margaritaville").

The loan requires interest-only payments based on a floating interest rate of one-month LIBOR plus a weighted-average spread of 2.37 %.

The loan matures on May 9, 2022 and may be extended for up to two one-year periods.

If the loan is extended for the second of the two one-year periods, the interest rate spread will increase by 20 basis points for the second-year period only.

The Company expects to exercise both extensions.

The loan is also subject to an interest rate cap agreement.

On December 1, 2021, the Company assumed a $ 61.7 million loan secured by a first-lien mortgage on the leasehold interest of Estancia La Jolla Hotel & Spa ("Estancia").

The loan requires both principal and interest monthly payments based on a fixed interest rate of 5.07 %.

The loan matures on September 1, 2028.

The Company's mortgage loans associated with Margaritaville and Estancia are non-recourse to the Company except for customary carve-outs to the general non-recourse liability.

The loans contain customary provisions regarding events of default, as well as customary cash management, cash trap and lockbox provisions.

Cash trap provisions are triggered if the hotel's performance is below a certain threshold.

Once triggered, all of the cash flow generated by the hotel is deposited directly into lockbox accounts and then swept into cash management accounts for the benefit of our lender.

No event of default has occurred under the loan documents.

The mortgage loans triggered the cash trap provisions prior to the acquisitions, and therefore cash from hotel operations is being held by the lender in the cash management accounts and reflected as restricted cash in the accompanying consolidated balance sheets.

Cash will be released from the lockbox once the hotel reaches profitability levels that terminate the cash trap or the loan is paid off.

Interest Expense

The components of the Company's interest expense consisted of the following (in thousands):

The components of the Company's interest expense consisted of the following for the years ended December 31, 2021, 2020, and 2019 (in thousands):

For the year ended December 31,

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Mortgage debt 1,375 — 2,293

Amortization of deferred financing fees 7,296 7,115 2,565

Amortization of deferred financing fees, (premiums) and discounts 9,741 7,296 7,115

Other 5,672 8,793 9,931

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The Company estimates the fair value of its fixed rate debt by discounting the future cash flows of each instrument at estimated market rates, taking into consideration general market conditions and maturity of the debt with similar credit terms and is classified within Level 2 of the fair value hierarchy.

The estimated fair value of the Company’s fixed rate debt (unsecured senior notes and convertible senior notes) as of December 31, 2020 and 2019 was $ 491.8 million and $ 101.2 million, respectively.

The estimated fair value of the Company’s fixed rate debt (unsecured senior notes, convertible senior notes and the Estancia mortgage loan) as of December 31, 2021 and 2020 was $ 747.8 million and $ 491.8 million, respectively.

Future Minimum Principal Payments

As of December 31, 2020, the future minimum principal payments for the Company's debt are as follows (in thousands):

As of December 31, 2021, the future minimum principal payments for the Company's debt, assuming all extension options available in the Company's debt agreements are exercised, are as follows (in thousands):

2022 $ 62,124

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Total debt principle payments $ 2,455,941

Deferred financing costs ( 134,529 )

Deferred financing costs, net ( 22,923 )

Debt premium (discount), net 8,870

Total debt $ 2,441,888

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All unrealized gains and losses on these hedging instruments are reported in accumulated other comprehensive income (loss) and are subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings.

The Company's interest rate swaps at December 31, 2020 and 2019 consisted of the following (dollars in thousands):

Notional Value as of

Hedge Type Interest Rate Maturity December 31, 2020 December 31, 2019

Swap - cash flow 1.63 % January 2020 $ — $ 50,000

Swap - cash flow 1.63 % January 2020 — 50,000

Swap - cash flow 2.46 % January 2020 — 50,000

Swap - cash flow 1.66 % January 2020 — 50,000

Swap - cash flow 2.12 % December 2020 — 100,000

Swap - cash flow 1.74 % January 2021 75,000 75,000

Swap - cash flow 1.75 % January 2021 50,000 50,000

Swap - cash flow 1.53 % January 2021 37,500 37,500

Swap - cash flow 1.46 % (1) January 2021 100,000 100,000

Swap - cash flow 1.47 % (1) January 2021 47,500 47,500

Swap - cash flow 2.60 % October 2021 55,000 55,000

Swap - cash flow 1.78 % (1) January 2022 100,000 100,000

Swap - cash flow 1.78 % (1) January 2022 50,000 50,000

Swap - cash flow 1.79 % (1) January 2022 30,000 30,000

Swap - cash flow 1.68 % April 2022 25,000 25,000

Swap - cash flow 1.64 % April 2022 25,000 25,000

Swap - cash flow 1.99 % November 2023 85,000 85,000

Swap - cash flow 1.99 % November 2023 50,000 50,000

Swap - cash flow 1.99 % November 2023 30,000 30,000

Swap - cash flow 2.60 % January 2024 75,000 —

Swap - cash flow 2.60 % January 2024 50,000 —

Swap - cash flow 2.60 % January 2024 25,000 —

Swap - cash flow 2.60 % January 2024 75,000 —

The Company's interest rate swaps at December 31, 2021 and 2020 consisted of the following, by maturity date (dollars in thousands):

Aggregate Notional Value as of

Hedge Type Interest Rate Range Maturity December 31, 2021 December 31, 2020

Swap-cash flow 1.46 % - 1.75 %

January 2021 $ — $ 490,000

Swap-cash flow 2.60 %

October 2021 — 110,000

Swap-cash flow 1.78 % - 1.79 %

January 2022 180,000 180,000

Swap-cash flow 1.64 % - 1.68 %

April 2022 100,000 100,000

Swap-cash flow 0.17 %

January 2023 200,000 —

Swap-cash flow 1.99 %

November 2023 250,000 250,000

Swap-cash flow 2.60 %

January 2024 300,000 300,000

Swap-cash flow 1.43 % - 1.44 %

February 2026 290,000 —

Total $ 1,320,000 $ 1,430,000

________________________

(1) Swaps assumed in connection with the Company's merger with LaSalle Hotel Properties on November 30, 2018.

In addition, as of December 31, 2020 and 2019, the Company had interest rates swaps for aggregate notional amounts of $ 490.0 million and $ 590.0 million, respectively, which will become effective in the future as current swaps mature.

The Company records all derivative instruments at fair value in the accompanying consolidated balance sheets.

Fair values of interest rate swaps are determined using the standard market methodology of netting the discounted future fixed cash receipts/payments and the discounted expected variable cash payments/receipts.

Variable interest rates used in the calculation of projected receipts and payments on the swaps are based on an expectation of future interest rates derived from observable

market interest rate curves (Overnight Index Swap curves) and volatilities (Level 2 inputs).

Fair values of interest rate swaps and caps are determined using the standard market methodology of netting the discounted future fixed cash receipts/payments and the discounted expected variable cash payments/receipts.

Variable interest rates used in the calculation of projected receipts and payments on the swaps are based on an expectation of future interest rates derived from observable market interest rate curves (Overnight Index Swap curves) and volatilities (Level 2 inputs).

Derivatives expose the Company to credit risk in the event of non-performance by the counterparties under the terms of the interest rate hedge agreements.

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The Company believes it minimizes the credit risk by transacting with major creditworthy financial institutions.

As of December 31, 2020, the Company's derivative instruments were in liability positions, with aggregate liability fair values of $ 58.0 million which are included in accounts payable, accrued expenses and other liabilities in the accompanying consolidated balance sheets.

The Company expects approximately $ 24.7 million will be reclassified from accumulated other comprehensive income (loss) to interest expense in the next 12 months.

As of December 31, 2021, the Company's derivative instruments were in both asset and liability positions, with aggregate asset and liability fair values of $ 0.6 million and $ 20.2 million, respectively.

Derivative assets are included in prepaid expenses and other assets and derivative liabilities are included in accounts payable, accrued expenses and other liabilities in the accompanying consolidated balance sheets.

The Company expects approximately $ 13.2 million will be reclassified from accumulated other comprehensive income (loss) to interest expense within the next 12 months.

The Company presents revenue on a disaggregated basis in the accompanying consolidated statements of operations and comprehensive income.

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2021 2020 2019

Southern Florida/Georgia $ 166,310 $ 76,971 $ 115,600

San Diego, CA 165,977 96,071 243,598

Southern FL 76,971 115,600 63,824

San Francisco, CA 66,896 319,195 193,708

Boston, MA 124,440 63,356 273,669

Los Angeles, CA 94,275 51,664 200,398

Other(1) 27,453 128,627 108,583

Portland, OR 53,978 27,174 105,571

San Francisco, CA 43,601 66,896 319,195

28,608 27,453 128,627

Chicago, IL 27,279 15,604 82,690

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$ 733,044 $ 442,888 $ 1,612,213

______________________

(1) Other includes:

Atlanta (Buckhead), GA, Minneapolis, MN, Nashville, TN, New York, NY, Philadelphia, PA and Santa Cruz, CA.

Nashville, TN, New York, NY, Philadelphia, PA and Santa Cruz, CA.

Payments from customers are primarily made when services are provided.

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Common Shares

The Company is authorized to issue up to 500,000,000 common shares of beneficial interest, $ 0.01 par value per share (“common shares”).

The Company is authorized to issue up to 500,000,000 common shares.

Each outstanding common share entitles the holder to one vote on each matter submitted to a vote of shareholders.

Holders of the Company’s common shares are entitled to receive dividends when authorized by the Company's Board of Trustees.

On February 22, 2016, the Company announced that the Board of Trustees authorized a share repurchase program of up to $ 150.0 million of the Company's outstanding common shares.

Under this program, the Company may repurchase its common shares from time to time in transactions on the open market or by private agreement.

Holders of common shares are entitled to receive dividends when authorized by the Board of Trustees.

Share Repurchase Program

On February 22, 2016, the Company announced that the Board of Trustees authorized a share repurchase program of up to $ 150.0 million of common shares.

Under this program, the Company may repurchase common shares from time to time in transactions on the open market or by private agreement.

The Company may suspend or discontinue this program at any time.

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For the year ended December 31, 2021, the Company had no repurchases under this program and as of December 31, 2021, $ 56.6 million of common shares remained available for repurchase under this program.

On July 27, 2017, the Company announced that the Board of Trustees authorized a new share repurchase program of up to $ 100.0 million of the Company's outstanding common shares.

Under this program, the Company may repurchase its common shares from time to time in transactions on the open market or by private agreement.

The credit agreements governing the Company's existing indebtedness prohibits the Company from repurchasing common shares until the Company has certified compliance with certain financial covenants through June 30, 2022.

On July 27, 2017, the Company announced that the Board of Trustees authorized a new share repurchase program of up to $ 100.0 million of common shares.

Under this program, the Company may repurchase common shares from time to time in transactions on the open market or by private agreement.

The Company may suspend or discontinue this program at any time.

This $ 100.0 million share repurchase program will commence upon completion of the Company's $ 150.0 million share repurchase program.

On April 29, 2021, the Company filed a prospectus supplement with the SEC to sell up to $ 200.0 million of common shares under an "at the market" offering program (the "ATM program").

No common shares were issued or sold under the ATM program during the year ended December 31, 2021.

As of December 31, 2021, $ 200.0 million of common shares remained available for issuance under the ATM program.

Common Dividends

The Company declared the following dividends on common shares/units for the year ended December 31, 2021:

Share/Unit For the Quarter

Ended Record Date Payable Date

Dividend per Share/Unit For the Quarter Ended Record Date Payable Date

$ 0.01 March 31, 2021 March 31, 2021 April 15, 2021

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The Company is authorized to issue up to 100,000,000 preferred shares of beneficial interest, $ 0.01 par value per share (“preferred shares”).

In May 2021, the Company issued 9,200,000 6.375 % Series G Cumulative Redeemable Preferred Shares at a public offering price of $ 25.00 per share for net proceeds of $ 222.6 million.

In July 2021, the Company issued 10,000,000 5.70 % Series H Cumulative Redeemable Preferred Shares at a public offering price of $ 25.00 per share for net proceeds of $ 242.1 million.

In August 2021, the Company redeemed all outstanding shares of 6.50 % Series C Cumulative Redeemable Preferred Shares and 6.375 % Series D Cumulative Redeemable Preferred Shares at the redemption amount of $ 25.00 per share plus accrued and unpaid dividends of $ 0.17 and $ 0.16 per share, respectively.

The following Preferred Shares were outstanding as of December 31, 2021 and 2020:

As of December 31,

Security Type 2020 2019

Security Type December 31, 2021 December 31, 2020

6.50 % Series C

5,000,000 5,000,000

6.375 % Series D

5,000,000 5,000,000

6.375 % Series E

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6,000,000 6,000,000

6.375 % Series G

5.70 % Series H

29,600,000 20,400,000

The Series C Preferred Shares, Series D Preferred Shares, Series E Preferred Shares and Series F Preferred Shares (collectively, the “Preferred Shares”) rank senior to the common shares and on parity with each other with respect to payment of distributions.

The Preferred Shares are cumulative redeemable preferred shares, do not have any maturity date and are not subject to mandatory redemption.

The Company could not redeem the Series C Preferred Shares prior to March 18, 2018, may not redeem the Series D Preferred Shares prior to June 9, 2021, could not redeem the Series E Preferred Shares prior to March 4, 2018 and may not redeem the Series F Preferred Shares prior to May 25, 2021, except in limited circumstances relating to the Company’s continuing qualification as a REIT or as discussed below.

On or after May 25, 2021 and June 9, 2021, the Company may, at its option, redeem the Series F Preferred Shares and Series D Preferred Shares, respectively, and at any time the Company may, at its option, redeem the Series C Preferred Shares or the Series E Preferred Shares, or both, in each case in whole or from time to time in part, by payment of $ 25.00 per share, plus any accumulated, accrued and unpaid distributions through the date of redemption.

Upon the occurrence of a change of control, as defined in the Company's declaration of trust, the result of which the Company’s common shares and the common securities of the acquiring or surviving entity are not listed on the New York Stock Exchange, the NYSE MKT or NASDAQ, or any successor exchanges, the Company may, at its option, redeem the Preferred Shares in whole or in part within 120 days following the change of control by paying $ 25.00 per share, plus any accrued and unpaid distributions through the date of redemption.

If the Company does not exercise its right to redeem the Preferred Shares upon a change of control, the holders of the Preferred Shares have the right to convert some or all of their shares into a number of the Company’s common shares based on defined formulas subject to share caps.

The share cap on each Series C Preferred Share is 2.0325 common shares, on each Series D Preferred Share is 1.9794 common shares, on each Series E Preferred Share is 1.9372 common shares and on each Series F Preferred Share is 2.0649 common shares.

The Series E, Series F, Series G and Series H Cumulative Redeemable Preferred Shares (collectively, the “Preferred Shares”) rank senior to the common shares and on parity with each other with respect to payment of distributions.

The Preferred Shares do not have any maturity date and are not subject to mandatory redemption.

The Series E and Series F Preferred Shares could not be redeemed prior to March 4, 2018, and May 25, 2021, respectively, except in limited circumstances relating to the Company’s continuing qualification as a REIT or as discussed below.

The Series G and Series H Preferred Shares may not be redeemed prior to May 13, 2026 and July 27, 2026, respectively, except in limited circumstances relating to the Company’s continuing qualification as a REIT or as discussed below.

On or after such dates, the Company may, at its option, redeem the Preferred Shares, in each case in whole or from time to time in part, by payment of $ 25.00 per share, plus any accumulated, accrued and unpaid distributions through the date of redemption.

Upon the occurrence of a change of control, as defined in the Company's declaration of trust, the result of which the common shares and the common securities of the acquiring or surviving entity are not listed on the New York Stock Exchange, the NYSE MKT or Nasdaq, or any successor exchanges, the Company may, at its option, redeem the Preferred Shares in whole or in part within 120 days following the change of control by paying $ 25.00 per share, plus any accrued and unpaid distributions through the date of redemption.

If the Company does not exercise its right to redeem the Preferred Shares upon a change of control, the holders of the Preferred Shares have the right to convert some or all of their shares into a number of common shares based on defined formulas subject to share caps.

The share cap on each Series E Preferred Share is 1.9372 common shares, on each Series F Preferred Share is 2.0649 common shares, on each Series G Preferred Share is 2.1231 common shares, and on each Series H Preferred Share is 2.2311 common shares.

Preferred Dividends

The Company declared the following dividends on preferred shares for the year ended December 31, 2021:

Security Type Dividend per

Share/Unit For the Quarter

Ended Record Date Payable Date

Security Type Dividend per Share/Unit For the Quarter Ended Record Date Payable Date

6.50 % Series C

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6.50 % Series C

$ 0.41 September 30, 2020 September 30, 2020 October 15, 2020

6.50 % Series C

$ 0.41 December 31, 2020 December 31, 2020 January 15, 2021

$ 0.17 August 22, 2021 August 22, 2021

6.375 % Series D

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6.375 % Series D

$ 0.40 September 30, 2020 September 30, 2020 October 15, 2020

6.375 % Series D

$ 0.40 December 31, 2020 December 31, 2020 January 15, 2021

$ 0.16 August 21, 2021 August 21, 2021

6.375 % Series E

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$ 0.39 December 31, 2021 December 31, 2021 January 18, 2022

6.375 % Series G

$ 0.67 September 30, 2021 September 30, 2021 October 15, 2021

6.375 % Series G

$ 0.40 December 31, 2021 December 31, 2021 January 18, 2022

5.70 % Series H

$ 0.31 September 30, 2021 September 30, 2021 October 15, 2021

5.70 % Series H

$ 0.36 December 31, 2021 December 31, 2021 January 18, 2022

______________________

(1) The initial long-period dividend for the 6.375 % Series G Preferred Shares was paid in October 2021.

(2) The initial short-period dividend for the 5.70 % Series H Preferred Shares was paid in October 2021.

Non-controlling Interest of Common Units in Operating Partnership

Holders of Operating Partnership units have certain redemption rights that enable the unit holders to cause the Operating Partnership to redeem their units in exchange for, at the Company’s option, cash per unit equal to the market price of the Company’s common shares at the time of redemption or the Company’s common shares on a one-for-one basis.

Holders of Operating Partnership units ("OP Units") have certain redemption rights that enable OP unit holders to cause the Operating Partnership to redeem their units in exchange for, at the Company’s option, cash per unit equal to the market price of common shares at the time of redemption or common shares on a one-for-one basis.

The number of shares issuable upon exercise of the redemption rights will be adjusted upon the occurrence of share splits, mergers, consolidations or similar pro-rata share transactions, which otherwise would have the effect of diluting the ownership interests of the Operating Partnership's limited partners or the Company's shareholders.

On November 30, 2018, in connection with the merger with LaSalle Hotel Properties ("LaSalle"), the Company issued 133,605 OP units in the Operating Partnership to third-party limited partners of LaSalle's operating partnership.

As of December 31, 2021 and 2020, the Operating Partnership had 133,605 OP units held by third parties, excluding LTIP units.

As of December 31, 2021, the Operating Partnership had two classes of long-term incentive partnership units ("LTIP") units, LTIP Class A units and LTIP Class B units.

All of the outstanding LTIP units are held by officers of the Company.

On February 12, 2020, the Board of Trustees granted 415,818 LTIP Class B units to its executive officers.

These LTIP units were to vest ratably on January 1, 2023, 2024, 2025 and 2026.

In March 2020, the Company cancelled this grant and as a result accelerated and recognized the full expense of $ 10.5 million.

On July 24, 2020, 109,240 LTIP Class B units were converted to common shares.

As of December 31, 2021 and 2020, the Operating Partnership had 727,208 and 127,111 LTIP units outstanding, respectively.

As of December 31, 2020, all of such LTIP units outstanding have vested.

Vested LTIP units may be converted to common units of the Operating Partnership, which in turn can be redeemed for common shares or cash as described above.

As of December 31, 2020 and 2019, the Operating Partnership had 133,605 OP units held by third parties, excluding LTIP units.

Of the 727,208 LTIP units outstanding at December 31, 2021, 127,111 LTIP units have vested.

Only vested LTIP units may be converted to common units of the Operating Partnership, which in turn can be tendered for redemption as described above.

Share-Based Compensation Plan

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Forfeited ( 6,787 ) $ 27.68

Cancelled ( 217,083 ) $ 25.53

Unvested at December 31, 2020 242,727 $ 24.94

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Forfeited ( 9,236 ) $ 23.37

Cancelled ( 217,083 ) $ 25.53

Unvested at December 31, 2021 567,431 $ 22.53

The fair value of each of these service condition restricted share awards is determined based on the closing price of the Company’s common shares on the grant date and compensation expense is recognized on a straight-line basis over the vesting period.

In March 2020, the Company cancelled the February 2020 service condition share award (retention grant) and as a result accelerated and recognized an expense of $ 5.5 million.

For the years ended December 31, 2020, 2019 and 2018, the Company recognized approximately $ 8.1 million, $ 2.4 million, and $ 2.0 million respectively, of share-based compensation expense related to these service condition restricted shares in the accompanying consolidated statements of operations and comprehensive income.

In March 2020, the Company canceled the February 2020 service condition share award (retention grant) and as a result accelerated and recognized an expense of $ 5.5 million.

For the years ended December 31, 2021, 2020 and 2019 the Company recognized approximately $ 4.1 million, $ 8.1 million, and $ 2.4 million, respectively, of share-based compensation expense related to these awards in the accompanying consolidated statements of operations and comprehensive income.

As of December 31, 2021, there was $ 8.8 million of total unrecognized share-based compensation expense related to unvested restricted shares.

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Performance-Based Equity Awards

On December 13, 2013, the Board of Trustees approved a target award of 252,088 performance-based equity awards to officers and employees of the Company.

The awards vested based on the extent to which the performance criteria had been met, on January 1, 2016, 2017, 2018, 2019 and 2020.

On December 13, 2013, the Board of Trustees approved a target award of 252,088 performance-based equity awards to officers and employees of the Company that were eligible for vesting in January 2016, 2017, 2018, 2019 and 2020.

The actual number of common shares that vested was based on the two performance criteria defined in the award agreements for the period of performance beginning on the grant date and ending on the applicable vesting date.

In January 2016, the Company issued 25,134 of common shares which represented achieving 49 % of the 50,418 target number of shares for that measurement period.

In January 2017, the Company issued 12,285 of common shares which represented achieving 25 % of the 49,914 target number of shares for that measurement period.

In January 2018, the Company issued 72,236 of common shares which represented achieving 145 % of the 49,914 target number of shares for that measurement period.

In January 2019, the Company issued 35,471 of common shares which represented achieving 71 % of the 49,914 target number of shares for that measurement period.

In February 2020, the Company issued 27,881 of common shares which represented achieving 56 % of the 49,914 target number of shares for that measurement period.

Based upon the extent to which the performance criteria had been met, the Company issued 25,134 , 12,285 , 72,236 and 35,471 common shares in January 2016, 2017, 2018 and 2019, respectively, and 27,881 common shares in February 2020.

On February 10, 2016, the Board of Trustees approved a target award of 100,919 performance-based equity awards to officers and employees of the Company.

In January 2018, these awards vested and the Company issued 14,089 and 2,501 common shares to officers and non-executive management employees, respectively.

In January 2019, these awards were vested and the Company issued 142,173 and 31,146 common shares to officers and employees, respectively.

The actual number of common shares that vested was based on the three performance criteria defined in the award agreements for the period of performance from January 1, 2016 through December 31, 2018.

On July 27, 2015, a target award of 771 performance-based equity awards was granted to an employee of the Company.

In January 2018, these awards vested and the Company issued 1,079 common shares to the employee.

The actual number of common shares that vested was based on the three performance criteria defined in the award agreement for the period of performance from January 1, 2016 through December 31, 2017.

On February 15, 2017, the Board of Trustees approved a target award of 81,939 performance-based equity awards to officers and employees of the Company.

In January 2020, these awards vested and the Company issued 1,972 and 405 common shares to officers and employees, respectively.

The actual number of common shares that vested was based on the two performance criteria defined in the award agreements for the period of performance from January 1, 2017 through December 31, 2019.

On February 14, 2018, the Board of Trustees approved a target award of 78,918 performance-based equity awards to officers and employees of the Company.

In January 2020, these awards vested and the Company issued 1,972 and 405 common shares to officers and employees, respectively.

In January 2021, none of these awards vested and the Company issued no common shares to officers or employees.

The actual number of common shares that vested was based on the two performance criteria defined in the award agreements for the period of performance from January 1, 2018 through December 31, 2020.

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These awards will vest, if at all, in 2023.

The actual number of common shares that ultimately vest will be from 0 % to 200 % of the target award and will be determined in 2022 based on the two performance criteria defined in the award agreements for the period of performance from January 1, 2019 through December 31, 2021.

The actual number of common shares that ultimately vest will be from 0 % to 200 % of the target award and will be determined in 2023 based on the performance criteria defined in the award agreements for the period of performance from January 1, 2020 through December 31, 2022.

On February 18, 2021, the Board of Trustees approved a target award of 189,348 performance-based equity awards to officers and employees of the Company.

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The grant date fair value of the performance awards, with market conditions, were determined using a Monte Carlo simulation method with the following assumptions (dollars in millions):

Performance Award Grant Date Percentage of Total Award Grant Date Fair Value by Component ($ in millions) Volatility Interest Rate Dividend Yield

Performance Award Grant Date Percentage of Total Award Grant Date Fair Value by Component Volatility Interest Rate Dividend Yield

December 13, 2013

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EBITDA Comparison 15.00 % $ 0.4 25.00 % 0.71 % 3.00 %

July 27, 2015

Relative Total Shareholder Return 30.00 % $ — (1) 22.00 % 0.68 % 2.50 %

Absolute Total Shareholder Return 40.00 % $ — (1) 22.00 % 0.68 % 2.50 %

EBITDA Comparison 30.00 % $ — (1) 22.00 % 0.68 % 2.50 %

February 15, 2017

Relative Total Shareholder Return 70.00 % $ 1.6 25.00 % 0.71 % 3.00 %

Absolute Total Shareholder Return 15.00 % $ 0.2 25.00 % 0.71 % 3.00 %

EBITDA Comparison 15.00 % $ 0.4 25.00 % 0.71 % 3.00 %

February 15, 2017

Relative and Absolute Total Shareholder Return 65.00 % / 35.00 %

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Relative Total Shareholder Return 100.00 % $ 4.9 23.40 % 1.41 % — %

(1) Amounts round to zero.

February 18, 2021

Relative Total Shareholder Return 100.00 % $ 6.0 56.00 % 0.19 % — %

In the table above, the Relative Total Shareholder Return and Absolute Total Shareholder Return components are market conditions as defined by ASC 718.

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Dividends on unvested performance-based equity awards accrue over the vesting period and will be paid on the actual number of shares that vest at the end of the applicable period.

The Company recognizes compensation expense on a straight-

line basis through the vesting date.

The Company recognizes compensation expense on a straight-line basis through the vesting date.

As of December 31, 2021, there was approximately $ 5.8 million of unrecognized compensation expense related to these performance-based equity awards which will be recognized over the weighted-average remaining vesting period of 1.7 years.

For the years ended December 31, 2020, 2019 and 2018, the Company recognized approximately $ 4.1 million, $ 4.8 million and $ 3.2 million, respectively, in expense related to these awards.

Long-Term Incentive Partnership Units

For the years ended December 31, 2021, 2020 and 2019 the Company recognized approximately $ 4.9 million, $ 4.1 million and $ 4.8 million, respectively, of share-based compensation expense related to performance-based equity awards in the accompanying consolidated statements of operations and comprehensive income.

Long-Term Incentive Partnership ("LTIP") Units

LTIP units, which are also referred to as profits interest units, may be issued to eligible participants for the performance of services to or for the benefit of the Operating Partnership.

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The aggregate grant date fair value of the LTIP Class B units was $ 6.6 million.

On February 12, 2020, the Board of Trustees granted 415,818 LTIP Class B units to executive officers.

On February 12, 2020, the Board of Trustees granted 415,818 LTIP Class B units to executive officers of the Company.

These LTIP units were to vest ratably on January 1, 2023, 2024, 2025 and 2026.

In March 2020, the Company cancelled this grant and as a result accelerated and recognized the full expense of $ 10.5 million.

In March 2020, the Company canceled this grant and as a result accelerated and recognized the full expense of $ 10.5 million.

On July 24, 2020, 109,240 LTIP Class B units were redeemed for common shares.

As of December 31, 2020, the Company had 127,111 LTIP units outstanding.

As of December 31, 2020, all of such LTIP units outstanding have vested.

On February 18, 2021, the Board of Trustees granted 600,097 LTIP Class B units to executive officers of the Company.

These LTIP units vest ratably on January 1, 2023, 2024, 2025 and 2026, contingent upon continued employment with the Company.

The fair value of each award was determined based on the closing price of the Company’s common shares on the grant date of $ 22.69 per unit.

The aggregate grant date fair value of the LTIP Class B units was $ 13.6 million.

As of December 31, 2021 and 2020, the Operating Partnership had 727,208 and 127,111 LTIP units outstanding, respectively.

Of the 727,208 LTIP units outstanding at December 31, 2021, 127,111 LTIP units have vested.

Only vested LTIP units may be converted to common units of the Operating Partnership, which in turn can be tendered for redemption.

For the years ended December 31, 2021, 2020 and 2019, the Company recognized approximately $ 2.4 million, $ 10.6 million and $ 1.1 million, respectively, in expense related to these LTIP units.

As of December 31, 2020, there was no unrecognized share-based compensation expense related to LTIP units.

As of December 31, 2021, there was $ 11.2 million of unrecognized share-based compensation expense related to LTIP units.

The aggregate expense related to the LTIP unit grants is presented as non-controlling interest in the Company’s accompanying consolidated balance sheets.

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Total $ 1.5750 100.00 % $ 1.1813 100.00 % $ 1.9688 100.00 %

Series G Preferred Shares:

Ordinary non-qualified income $ — — % $ — — % $ — — %

Qualified dividend — — % — — % — — %

Capital gain 0.5787 86.00 % — — % — — %

Return of capital 0.0942 14.00 % — — % — — %

Total $ 0.6729 100.00 % $ — — % $ — — %

Series H Preferred Shares:

Ordinary non-qualified income $ — — % $ — — % $ — — %

Qualified dividend — — % — — % — — %

Capital gain 0.2655 86.01 % — — % — — %

Return of capital 0.0432 13.99 % — — % — — %

Total $ 0.3087 100.00 % $ — — % $ — — %

______________________

(1) Issued upon completion of the Company's merger with LaSalle on November 30, 2018.

Of the common distribution declared on December 15, 2017 and paid on January 12, 2018, $ 0.3800 was treated as a 2018 distribution for tax purposes.

The preferred share distributions declared on December 15, 2017 and paid on January 12, 2018 were treated as 2018 distributions for tax purposes.

Of the common distributions declared on November 19, 2018 and December 14, 2018 and paid on January 15, 2019, $ 0.3478 was treated as a 2019 distribution for tax purposes.

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The preferred share distributions declared on December 16, 2019 and paid on January 15, 2020 were treated as 2019 distributions for tax purposes.

Of the common distribution declared on December 15, 2020 and paid on January 15, 2021, $ 0.0100 will be treated as a 2021 distribution for tax purposes.

Of the common distribution declared on December 15, 2020 and paid on January 15, 2021, $ 0.0100 was treated as a 2021 distribution for tax purposes.

The preferred share distributions declared on December 15, 2020 and paid on January 15, 2021 were treated as 2021 distributions for tax purposes.

Of the common distribution declared on December 15, 2021 and paid on January 18, 2022, $ 0.0100 will be treated as a 2022 distribution for tax purposes.

The preferred share distributions declared on December 15, 2021 and paid on January 18, 2022, $ 0.3984 of Series E, $ 0.3938 of Series F, $ 0.3984 of Series G and $ 0.3563 of Series H will be treated as 2022 distributions for tax purposes.

The Company's provision (benefit) for income taxes consists of the following (in thousands):

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Income tax expense (benefit), net $ 61 $ ( 3,697 ) $ 5,172

The Company has provided a valuation allowance against its federal and state deferred tax asset at December 31, 2020 and a valuation allowance against certain state deferred tax assets as of December 31, 2019.

The Company has recorded a receivable of $ 6.9 million representing the portion of the current year loss that will be carried back to prior years in which the Company had taxable income.

A valuation allowance has been recognized on the current year loss in excess of the amount that will be carried back and is due to the uncertainty of realizing the loss in future years.

The Company has provided a valuation allowance against its federal and state deferred tax asset at December 31, 2021 and 2020 due to the uncertainty of realizing the loss in future years.

As of December 31, 2021, the Company had a receivable of $ 6.9 million representing the portion of taxable losses that were carried back to prior years in which the Company had taxable income.

The significant components of the Company's deferred tax assets as of December 31, 2021 and 2020 consisted of the following (in thousands):

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Net income (loss) per share available to common shareholders — diluted $ ( 1.80 ) $ ( 3.25 ) $ 0.63

For the years ended December 31, 2020, 2019 and 2018, 600,436 , zero , 343,941 , respectively, of unvested service condition restricted shares and performance-based equity awards were excluded from diluted weighted-average common shares, as their effect would have been anti-dilutive.

For the year ended December 31, 2020, 19,627,450 shares underlying the convertible debt have been excluded from diluted shares as their effect would have been anti-dilutive.

For the years ended December 31, 2021, 2020 and 2019, 1,033,747 , 600,436 and zero , respectively, of unvested service condition restricted shares and performance-based equity awards were excluded from diluted weighted-average common shares, as their effect would have been anti-dilutive.

For the years ended December 31, 2021 and 2020, 29,441,175 and 19,627,450 , respectively, of common shares underlying the Convertible Notes have been excluded from diluted shares as their effect would have been anti-dilutive.

The LTIP and OP units held by the non-controlling interest holders have been excluded from the denominator of the diluted earnings per share as there would be no effect on the amounts since the limited partners' share of income (loss) would also be added or subtracted to derive net income (loss) available to common shareholders.

Commitments and Contingencies

Management Agreements

Hotel Management Agreements

The Company’s hotel properties are operated pursuant to management agreements with various management companies.

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Most of the agreements also provide the Company the ability to terminate based on failure to achieve defined operating performance thresholds.

Termination fees range from zero to up to seven times the annual base management and incentive management fees, depending on the agreement and the reason for termination.

Termination fees range from zero to up to six times the annual base management and incentive management fees, depending on the agreement and the reason for termination.

Certain of the Company’s management agreements are non-terminable except upon the manager’s breach of a material representation or the manager’s failure to meet performance thresholds as defined in the management agreement.

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Restricted Cash

At December 31, 2020 and 2019, the Company had $ 12.0 million and $ 26.8 million, respectively, in restricted cash, which consisted of reserves for replacement of furniture and fixtures or reserves to pay for real estate taxes or property insurance under certain hotel management agreements or loan agreements.

Ground and Hotel Leases

At December 31, 2021 and 2020, the Company had $ 33.7 million and $ 12.0 million, respectively, in restricted cash, which consisted of funds held in cash management and lockbox accounts held by a lender, reserves for replacement of furniture and fixtures and reserves to pay for real estate taxes, ground rent or property insurance under certain hotel management agreements or loan agreements.

Hotel, Ground and Finance Leases

As of December 31, 2021, the following hotels were subject to leases as follows:

Lease Properties Lease Type Lease Expiration Date

Restaurant at Southernmost Beach Resort Operating lease April 2029

Paradise Point Resort & Spa Operating lease May 2050

Hotel Monaco Washington DC Operating lease November 2059

Argonaut Hotel Operating lease December 2059

Hotel Zelos San Francisco Operating lease June 2097

Hotel Zephyr Fisherman's Wharf Operating lease February 2062

Hotel Palomar Los Angeles Beverly Hills Operating lease January 2107 (1)

Restaurant at Southernmost Beach Resort Operating lease April 2029

Hyatt Regency Boston Harbor Operating lease April 2077

San Diego Mission Bay Resort (formerly Hilton San Diego Mission Bay Resort) Operating lease July 2068

Paradise Point Resort & Spa Operating lease May 2050

Hotel Vitale Operating lease March 2070 (2)

Viceroy Santa Monica Hotel Operating lease September 2065

Estancia La Jolla Hotel & Spa Operating lease January 2066

San Diego Mission Bay Resort Operating lease July 2068

Hotel Vitale Operating lease March 2070 (1)

Hyatt Regency Boston Harbor Operating lease April 2077

The Westin Copley Place, Boston Operating lease December 2077 (2)

The Liberty, a Luxury Collection Hotel, Boston Operating lease May 2080

Jekyll Island Club Resort and Restaurant Operating lease January 2089

Hotel Zelos San Francisco Operating lease June 2097

Hotel Palomar Los Angeles Beverly Hills Operating lease January 2107 (3)

Margaritaville Hollywood Beach Resort Operating lease July 2112

Hotel Zeppelin San Francisco Operating and finance lease June 2089 (4)

Harbor Court Hotel San Francisco Finance lease August 2052

The Roger New York Finance lease December 2044

(1) The expiration date assumes the exercise of all 19 five-year extension options.

______________________

(1) The expiration date assumes the exercise of a 14 -year extension option.

(2) No payments are required through maturity.

(3) The expiration date assumes the exercise of all 19 five-year extension options.

(4) The expiration date assumes the exercise of a 30-year extension option.

The Company's leases may require minimum fixed rent payments, percentage rent payments based on a percentage of revenues in excess of certain thresholds or rent payments equal to the greater of a minimum fixed rent or percentage rent.

Minimum fixed rent may be adjusted annually by increases in consumer price index ("CPI") and may be subject to minimum and maximum increases.

Minimum fixed rent may be adjusted annually by increases in the consumer price index and may be subject to minimum and maximum increases.

Some leases also contain certain restrictions on modifications that can be made to the hotel structures due to their status as national historic landmarks.

6 unchanged sentences

Variable ground rent 9,616 4,924 14,689

Total ground lease rent $ 22,144 $ 31,731 $ 14,519

In January 2019, the Company acquired the ground lease underlying the land of the Solamar Hotel for $ 6.9 million.

Future maturity of lease liabilities for the Company's operating leases at December 31, 2020 were as follows (in thousands):

Total ground rent $ 26,441 $ 22,144 $ 31,731

Future maturities of lease liabilities for the Company's operating leases at December 31, 2021 were as follows (in thousands):

2022 $ 20,556

7 unchanged sentences

Supplemental Information to Statements of Cash Flows

(in thousands)

For the year ended December 31,

2021 2020 2019

(in thousands)

Interest paid, net of capitalized interest $ 84,453 $ 90,655 $ 91,918

Interest capitalized $ 1,391 $ 1,247 $ 347

Income taxes paid $ 3,469 $ 4,568 $ 4,047

Income taxes paid (refunded) $ ( 258 ) $ 3,469 $ 4,568

Non-Cash Investing and Financing Activities:

Convertible debt discount adjustment $ 113,099 $ — $ —

Distributions payable on common shares/units $ 1,537 $ 1,749 $ 51,006

1 unchanged sentence

Issuance of common shares for Board of Trustees compensation $ 516 $ 637 $ 740

Issuance of common shares for executive and employee bonuses $ 1,446 $ — $ —

Issuance of common shares for LTIP units redemption $ — $ 2,831 $ —

4 unchanged sentences

Write-off of deferred financing costs $ 6,574 $ 1,979 $ 3,013

The Company also had the following transactions in connection with the LaSalle merger:

Issuance of common shares $ — $ — $ 2,144,057

Issuance of Series E and F preferred shares $ — $ — $ 234,222

Issuance of OP units $ — $ — $ 4,665

Exchange of LaSalle shares as part of purchase price $ — $ — $ 346,544

Mortgage loans assumed in connection with acquisition of hotel properties $ 223,177 $ — $ —

Below (above) market contracts assumed in connection with acquisition of hotel properties $ 3,071 $ — $ —

Subsequent Events

In January 2021, the Company entered into an agreement to assign certain rooftop wireless leases and grant long-term easements at 11 of the Company's properties.

The Company received proceeds of approximately $ 12.0 million.

On February 3, 2021, the Company entered into an agreement to sell the Sir Francis Drake in San Francisco, California to an unaffiliated third-party.

The Company expects to generate approximately $ 157.6 million of proceeds after customary closing costs.

The Company expects the sale of the hotel to be completed in April 2021, subject to normal closing conditions, although no assurances can be given that the sales will be completed on these terms, or at all.

On February 9, 2021, the Company closed on a public offering of $ 250.0 million of 1.75 % convertible notes.

The convertible notes have terms identical to the Convertible Notes issued by the Company on December 15, 2020.

The notes were sold at a 5.5 % premium to par.

In connection with the pricing of the notes, the Company entered into privately negotiated capped call transactions with certain of the underwriters, their respective affiliates and/or other counterparties.

The Company used the net proceeds to reduce amounts outstanding under the Company’s senior unsecured revolving credit facility, unsecured term loans, and for general corporate purposes.

On February 18, 2021, the Company further amended its credit agreements and related documents governing the unsecured revolving credit facilities, term loan agreements and senior notes.

The amendment is further discussed in "Note 5.

On February 18, 2022, the Board of Trustees granted awards of an aggregate of 303,858 service condition restricted common shares and target performance-based equity to executive officers and employees of the Company.

These awards will vest over 3 years.

The actual number of common shares to be issued under the performance-based equity awards will be determined in early 2024 and and will be based on certain performance criteria stipulated in the agreements for the period January 1, 2021 through December 31, 2023.

On February 18, 2021, the Board of Trustees granted awards of 600,097 LTIP Class B units to executive officers and 280,239 service condition restricted common shares to employees of the Company.

These awards will vest ratably on January 1, 2023, 2024, 2025, and 2026.

Quarterly Operating Results (Unaudited)

The Company's unaudited consolidated quarterly operating data for the years ended December 31, 2020 and 2019 (in thousands, except per-share data) is below.

In the opinion of management, all adjustments (consisting of normal recurring accruals) necessary for a fair presentation of quarterly results have been reflected in the data.

It is also management's opinion, however, that quarterly operating data for hotel properties are not indicative of results to be achieved in succeeding quarters or years.

Year Ended December 31, 2020

First Quarter Second Quarter Third Quarter Fourth Quarter

Total revenues $ 269,107 $ 22,592 $ 76,980 $ 74,209

Net income (loss) 42,068 ( 130,914 ) ( 130,560 ) ( 173,187 )

Net income (loss) attributable to the Company 41,949 ( 130,513 ) ( 130,307 ) ( 172,858 )

Net income (loss) attributable to common shareholders 33,810 ( 138,652 ) ( 138,446 ) ( 180,997 )

Net income (loss) per share available to common shareholders, basic $ 0.26 $ ( 1.06 ) $ ( 1.06 ) $ ( 1.39 )

Net income (loss) per share available to common shareholders, diluted $ 0.26 $ ( 1.06 ) $ ( 1.06 ) $ ( 1.39 )

Year Ended December 31, 2019

First Quarter Second Quarter Third Quarter Fourth Quarter

Total revenues $ 367,169 $ 442,083 $ 423,552 $ 379,409

Net income (loss) 5,655 60,518 29,980 19,572

Net income (loss) attributable to the Company 5,635 60,373 29,891 19,543

Net income (loss) attributable to common shareholders ( 2,504 ) 52,234 21,752 11,404

Net income (loss) per share available to common shareholders, basic $ ( 0.02 ) $ 0.40 $ 0.17 $ 0.08

Net income (loss) per share available to common shareholders, diluted $ ( 0.02 ) $ 0.40 $ 0.17 $ 0.08

These awards will vest over three years.

The actual number of common shares to be issued under the performance-based equity awards will be determined in early 2025 and will be based on certain performance criteria stipulated in the agreements for the period January 1, 2022 through December 31, 2024.

Pebblebrook Hotel Trust

3 unchanged sentences

Initial Costs Gross Amount at End of Year

Description Land Building and Improvements Furniture, Fixtures and Equipment Cost Capitalized Subsequent to Acquisition (1)

Description Encumbrances Land Building and Improvements Furniture, Fixtures and Equipment Cost Capitalized Subsequent to Acquisition (1)

Land Building and Improvements Furniture, Fixtures and Equipment Total Accumulated Depreciation Net Book Value Year of Original Construction Date of Acquisition Depreciation Life

Sir Francis Drake $ 22,500 $ 60,547 $ 6,953 $ 40,035 $ 22,500 $ 89,147 $ 18,388 $ 130,035 $ 39,823 $ 90,212 1928 6/22/2010 3 - 40 years

Hotel Monaco Washington DC $ — $ — $ 60,630 $ 2,441 $ 22,193 $ — $ 77,178 $ 8,086 $ 85,264 $ 30,084 $ 55,180 1839 9/9/2010 3 - 40 years

17 unchanged sentences

The Nines, a Luxury Collection Hotel, Portland — 18,493 92,339 8,757 12,898 18,493 98,967 15,027 132,487 32,493 99,994 1909 7/17/2014 3 - 40 years

Hotel Colonnade Coral Gables, Autograph Collection — 12,108 46,317 1,271 19,043 12,108 59,389 7,242 78,739 18,572 60,167 1989 11/12/2014 2 - 40 years

Hotel Palomar Los Angeles Beverly Hills — — 90,675 1,500 14,627 — 100,465 6,337 106,802 24,113 82,689 1972 11/20/2014 3 - 40 years

Pebblebrook Hotel Trust

2 unchanged sentences

(in thousands)

Hotel Colonnade Coral Gables, Autograph Collection 12,108 46,317 1,271 18,388 12,108 59,015 6,961 78,084 15,542 62,542 1989 11/12/2014 2 - 40 years

Hotel Palomar Los Angeles Beverly Hills — 90,675 1,500 14,494 — 100,429 6,240 106,669 20,296 86,373 1972 11/20/2014 3 - 40 years

Initial Costs Gross Amount at End of Year

Description Encumbrances Land Building and Improvements Furniture, Fixtures and Equipment Cost Capitalized Subsequent to Acquisition (1)

Land Building and Improvements Furniture, Fixtures and Equipment Total Accumulated Depreciation Net Book Value Year of Original Construction Date of Acquisition Depreciation Life

Revere Hotel Boston Common — 41,857 207,817 10,596 ( 42,702 ) 17,367 181,990 18,211 217,568 52,464 165,104 1972 12/18/2014 3 - 40 years

1 unchanged sentence

Hotel Zoe Fisherman's Wharf — 29,125 90,323 2,500 16,757 29,125 105,128 4,452 138,705 22,443 116,262 1990 6/11/2015 2 - 40 years

Villa Florence San Francisco on Union Square 41,272 94,257 2,994 ( 29,935 ) 30,496 72,264 5,828 108,588 8,378 100,210 1908 11/30/2018 3 - 40 years

Hotel Vitale — — 105,693 3,896 22,215 — 117,578 14,226 131,804 13,178 118,626 2005 11/30/2018 3 - 40 years

14 unchanged sentences

Hotel Zena Washington DC — 19,035 60,402 2,066 27,972 19,035 84,559 5,881 109,475 8,304 101,171 1972 11/30/2018 3 - 40 years

Paradise Point Resort & Spa — — 199,304 22,032 10,843 21 205,749 26,409 232,179 27,274 204,905 1962 11/30/2018 3 - 40 years

Hilton San Diego Gaslamp Quarter — 33,017 131,926 7,741 2,027 33,017 133,368 8,326 174,711 16,434 158,277 2000 11/30/2018 3 - 40 years

Pebblebrook Hotel Trust

2 unchanged sentences

(in thousands)

Paradise Point Resort & Spa — 199,304 22,032 8,556 21 204,573 25,298 229,892 17,977 211,915 1962 11/30/2018 3 - 40 years

Hilton San Diego Gaslamp Quarter 33,017 131,926 7,741 1,347 33,017 132,937 8,077 174,031 11,049 162,982 2000 11/30/2018 3 - 40 years

Initial Costs Gross Amount at End of Year

Description Encumbrances Land Building and Improvements Furniture, Fixtures and Equipment Cost Capitalized Subsequent to Acquisition (1)

Land Building and Improvements Furniture, Fixtures and Equipment Total Accumulated Depreciation Net Book Value Year of Original Construction Date of Acquisition Depreciation Life

Solamar Hotel — — 74,768 8,830 25,656 23,472 75,642 10,140 109,254 11,631 97,623 2005 11/30/2018 3 - 40 years

4 unchanged sentences

The Marker Resort Key West Harbor Resort — 25,463 66,903 2,486 3,762 25,463 69,430 3,721 98,614 7,870 90,744 2014 11/30/2018 3 - 40 years

The Roger New York — 42,882 3,060 ( 16,946 ) — 25,775 3,221 28,996 3,999 24,997 1930/1998 11/30/2018 3 - 40 years

Hotel Chicago Downtown, Autograph Collection — 39,576 114,014 7,608 ( 17,007 ) 39,576 96,300 8,315 144,191 13,128 131,063 1998 11/30/2018 3 - 40 years

The Westin Michigan Avenue Chicago — 44,983 103,160 23,744 10,446 44,983 112,155 25,195 182,333 19,510 162,823 1963/1972 11/30/2018 3 - 40 years

Jekyll Island Club Resort — — 88,912 5,031 872 — 89,091 5,724 94,815 2,383 92,432 1986 7/22/2021 2 - 40 years

Margaritaville Hollywood Beach Resort (2)

161,500 — 244,230 22,288 82 — 244,230 22,370 266,600 2,993 263,607 2015 9/23/2021 3 - 40 years

Estancia La Jolla Hotel & Spa (3)

61,373 — 104,280 3,646 — — 104,280 3,646 107,926 393 107,533 2004 12/1/2021 2 - 40 years

$ 222,873 $ 923,333 $ 4,793,767 $ 350,022 $ 699,681 $ 926,330 $ 5,288,997 $ 551,476 $ 6,766,803 $ 1,066,409 $ 5,700,394

______________________

(1) Disposals are reflected as reductions to cost capitalized subsequent to acquisition

(2) The Company had no encumbrances on any of its hotel properties at December 31, 2020.

(2) Encumbrance on Margaritaville Hollywood Beach Resort is presented at face value, which excludes an unamortized loan discount and deferred financing costs of $ 2.7 million and $ 0.4 million, respectively, at December 31, 2021.

(3) Encumbrance on Estancia La Jolla Hotel & Spa is presented at face value, which excludes unamortized deferred financing costs of $ 0.3 million at December 31, 2021.

Pebblebrook Hotel Trust

8 unchanged sentences

Disposal of Assets ( 503,383 )

Other ( 24,649 )

Balance at December 31, 2019 $ 6,732,637

Acquisitions 23,472

Capital expenditures 115,850

2 unchanged sentences

Balance at December 31, 2020 $ 6,459,745

Acquisitions 488,447

Capital expenditures 86,936

15 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures