What changed in this filing

/stocks — the workspaceLOADING

Item 7. Management’s Discussion and Analysis

2024-02-21 compared with 2023-02-21 · 81 added, 80 removed, 175 unchanged (48% of the section changed)

5 unchanged sentences

In this report, we use the terms "the Company", "we" or "our" to refer to Pebblebrook Hotel Trust and its subsidiaries, unless the context indicates otherwise.

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 and we implemented significant cost controls, salary reductions and the temporary suspension of operations at 47 of our properties in 2020, along with other actions to improve liquidity.

All of our properties reopened in 2021 with the exception of 1 Hotel San Francisco (formerly Hotel Vitale), whose operations remained suspended until the completion of its renovations and repositioning in June 2022.

Demand has significantly improved throughout 2022 led by strong leisure travel demand with a significant improvement in business travel compared to 2021.

Recent inflation and the expectation of future inflation have caused labor, capital and other costs to increase and the reaction by the Federal Reserve to rapidly and substantially increase interest rates has created economic uncertainty and significant concerns and risk of an economic downturn, softening or recession.

During 2022, we acquired Inn on Fifth in Naples, Florida and Newport Harbor Island Resort (formerly Gurney's Newport Resort & Marina) in Newport, Rhode Island for a gross purchase price of $330.0 million and we sold four hotels in separate transactions for aggregate sales prices of $260.9 million.

In addition, as of December 31, 2022 we have entered into an agreement to sell The Heathman Hotel in Portland, Oregon for $45.0 million, however, no assurances can be given that the sale will be completed on these terms or at all.

On October 13, 2022, we refinanced our senior unsecured revolving credit facility and all of the term loans.

Our new $2.0 billion credit facility provides for a $650.0 million senior unsecured revolving credit facility and three $460.0 million unsecured term loan facilities totaling $1.38 billion.

During the fourth quarter of 2022, we repurchased 4,559,839 common shares for an aggregate purchase price of $69.6 million under our existing common share repurchase programs.

In addition, following an unsolicited private inquiry, we repurchased 1,000,000 shares of outstanding 5.70% Series H Cumulative Redeemable Preferred Shares for $16.0 million which was a discount to their $25.0 million liquidation value.

In September 2022, our LaPlaya Beach Resort & Club sustained damage as a result of Hurricane Ian and closed.

We have continued to make progress completing significant repairs and rebuilding at the property.

The resort will be reopened in stages through the middle of 2023.

The first building reopened for guests in January 2023.

Our hotel portfolio continued to recover in 2023 with strong growth in occupancy at many of our urban properties, especially our properties in Washington, D.C.

and San Francisco, which had trailed the recovery in other markets and our resort properties.

We have observed continued stable demand from both the business and leisure segments.

We believe 2024 will continue this trend and anticipate positive benefits from a robust convention calendar in many urban markets, including San Diego, Washington, D.C., Boston and Chicago.

International inbound travel is expected to continue to recover.

Our LaPlaya Beach Resort & Club, which was closed in 2022 due to Hurricane Ian, has been substantially restored.

Two of the resort buildings were fully operational for most of 2023 and the final resort building, the Beach House, is expected to be substantially completed by the end of this month.

We have agreed to a partial business interruption insurance settlement with our insurance company during 2023 and will continue to work with our insurance company through full completion of our insurance claim.

During 2023, we sold five hotels and two retail components of our hotels in separate transactions for an aggregate sales price of $330.8 million.

During 2023, we repurchased 6,498,901 common shares for an aggregate purchase price of $91.0 million, or an average of $14.01 per share, and 1,000,000 preferred shares for an aggregate purchase price of $15.8 million, or an average of $15.79 per share, under our existing common and preferred share repurchase programs.

During 2023, we repaid $71.1 million of debt, which includes of $47.6 million of senior unsecured notes and $23.5 million of mortgage loans.

In January 2024, we extended the maturity date of $356.7 million borrowed under Term Loan 2024 to January 2028.

We also repaid $60.0 million outstanding on Term Loan 2024 and $50.0 million outstanding on the Term Loan 2025 with available cash.

The remaining $43.3 million of Term Loan 2024 that was not extended will continue to mature in October 2024.

While we do not operate our hotel properties, both our asset management team and our executive management team monitor and work cooperatively with our hotel managers by advising and making recommendations in all aspects of our hotels’ operations, including property positioning and repositioning, revenue and expense management, operations analysis, physical design, renovation and capital improvements, guest experience and overall strategic direction.

18 unchanged sentences

Same-Property Total RevPAR $ 316.02 $ 298.38

The above table of hotel operating statistics includes information from all hotels owned as of December 31, 2022 except for 1 Hotel San Francisco (formerly Hotel Vitale) for 2022 and 2021 due to its closure for renovation from the third quarter of 2021 to the second quarter of 2022, Inn on Fifth for the first quarter of 2022 and 2021 due to its acquisition on May 11, 2022, Newport Harbor Island Resort (formerly Gurney's Newport Resort & Marina) for the first and the second quarters of 2022 and 2021 due to its acquisition on June 23, 2022 and LaPlaya Beach Resort & Club for the fourth quarter of 2022 and 2021 due to its closure following Hurricane Ian.

Additionally, the schedule excludes The Marker San Francisco for the second, third and fourth quarters of 2022 and 2021 due to its sale on June 28, 2022, Sofitel Philadelphia at Rittenhouse Square for the third and fourth quarters of 2022 and 2021 due to its sale on August 2, 2022, Hotel Spero for the third and fourth quarters of 2022 and 2021 due to its sale on August 25, 2022 and Hotel Vintage Portland for the third and fourth quarters of 2022 and 2021 due to its sale on September 14, 2022.

The above table of hotel operating statistics includes information from all hotels owned as of December 31, 2023, except for LaPlaya Beach Resort & Club due to its closure following Hurricane Ian, 1 Hotel San Francisco for the first and second quarters only due to its closure for redevelopment and Newport Harbor Island Resort for the fourth quarter only due to its ongoing redevelopment.

The above table of hotel operating statistics also includes Hotel Monaco Seattle and Hotel Vintage Seattle for the first quarter only due to their sales in May 2023, Retail at The Westin Michigan Avenue Chicago for the first quarter only due to its sale in March 2023, Hotel Zoe Fisherman’s Wharf for the first, second and third quarters only due to its sale in November 2023, and Marina City Retail at Hotel Chicago Downtown, Autograph Collection for the first, second and third quarters only due to its sale in December 2023.

Results of Operations

5 unchanged sentences

Property Location Disposition Date

Sir Francis Drake San Francisco, CA April 1, 2021

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

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

The Marker San Francisco San Francisco, CA June 28, 2022

2 unchanged sentences

Hotel Vintage Portland Portland, OR September 14, 2022

The Heathman Hotel Portland, OR February 22, 2023

Retail at The Westin Michigan Avenue Chicago Chicago, IL March 17, 2023

Hotel Colonnade Coral Gables Coral Gables, FL March 28, 2023

Hotel Monaco Seattle Seattle, WA May 9, 2023

Hotel Vintage Seattle Seattle, WA May 24, 2023

Hotel Zoe Fisherman’s Wharf San Francisco, CA November 14, 2023

Marina City Retail at Hotel Chicago Downtown, Autograph Collection Chicago, IL December 21, 2023

Property Location Acquisition Date

Jekyll Island Club Resort Jekyll Island, GA July 22, 2021

Margaritaville Hollywood Beach Resort Hollywood, FL September 23, 2021

Estancia La Jolla Hotel & Spa La Jolla, CA December 1, 2021

Inn on Fifth Naples, FL May 11, 2022

Newport Harbor Island Resort (formerly Gurney's Newport Resort & Marina) Newport, RI June 23, 2022

Newport Harbor Island Resort Newport, RI June 23, 2022

Comparison of the year ended December 31, 2023 to the year ended December 31, 2022

Revenues — Total revenues increased by $658.8 million, of which $157.9 million was due to non-comparable properties, and the balance was primarily due to an increase in leisure and business travel in 2022.

In addition, several of our hotels remained temporarily suspended throughout the first quarter of 2021.

Hotel operating expenses — Total hotel operating expenses increased by $386.9 million, of which $93.9 million was due to non-comparable properties, and the balance was primarily due to resuming operations at our comparable properties and returning demand in 2022.

Depreciation and amortization — Depreciation and amortization expense increased by $15.3 million primarily due to our property acquisitions in 2021 and 2022, offset by a decrease in depreciation from the properties sold in 2021 and 2022.

Real estate taxes, personal property taxes, property insurance and ground rent — Real estate taxes, personal property taxes, property insurance and ground rent increased by $14.5 million primarily due to an increase at our three non-comparable properties acquired in 2021.

General and administrative — General and administrative expense increased by $1.0 million due to compensation expense, offset by a decrease in legal fees.

General and administrative expense consists of employee compensation costs, legal and professional fees, insurance and other expenses.

Impairment and other losses — We recognized impairment and other losses of $89.9 million in 2022 related to three properties as well as an impairment related to damage caused by Hurricane Ian at LaPlaya Beach Resort & Club in Naples, Florida and Southernmost Beach Resort in Key West, Florida.

We recognized an impairment loss of $14.9 million in 2021 related to one hotel.

Gain on sale of hotel properties — We recognized a gain on sale of $6.2 million related to the sales of Sofitel Philadelphia Rittenhouse Square and Hotel Vintage Portland in 2022.

We recognized a gain on sale of $64.7 million in 2021 primarily due to the sale of Sir Francis Drake.

Other operating expenses — Other operating expenses increased by $3.1 million primarily due to an increase in pre-opening expenses and hotel management transition costs.

Interest expense — Interest expense increased by $3.4 million due to the refinancing costs incurred in conjunction with the refinancing of our senior unsecured credit facility on October 13, 2022.

Revenues — Total revenues increased by $28.1 million, which includes a $63.3 million increase at our comparable properties primarily due to an increase in leisure and business travel as well as a significant increase in revenue at 1 Hotel San Francisco, which was under renovation through June 2022 and began ramping up operations in the third quarter of 2022.

These increases were partially offset by a $35.2 million decrease due to our non-comparable properties as well as a significant decrease in revenue at LaPlaya Beach Resort & Club, which was closed in September 2022 as a result of Hurricane Ian and was partially reopened in 2023.

Hotel operating expenses — Total hotel operating expenses increased by $57.6 million as a result of an increase in staffing, wages and benefits to accommodate occupancy increases, particularly at our urban properties, as well as an increase in hotel operating expenses at 1 Hotel San Francisco, which was closed most of the first and second quarters of 2022 for renovations.

Our overall increase in hotel operating expenses was partially offset by a $27.1 million decrease due to our non-comparable properties.

Depreciation and amortization — Depreciation and amortization expense increased by $1.1 million primarily due to redevelopment and renovation activities at Margaritaville Hotel San Diego Gaslamp Quarter and Estancia La Jolla Hotel & Spa which commenced in 2022.

Real estate taxes, personal property taxes, property insurance and ground rent — Real estate taxes, personal property taxes, property insurance and ground rent decreased by $1.5 million primarily due to a $9.3 million decrease in real estate taxes as a result of tax appeals and lower tax assessments.

This decrease was partially offset by a $5.9 million increase in property insurance due to higher insurance premium assessments and a $1.9 million increase in ground rent on ground leases whose rent is based on a percentage of revenues.

General and administrative — General and administrative expense increased by $5.6 million primarily due to an increase in professional fees and employee compensation expense.

General and administrative expenses consist of employee compensation costs, legal and professional fees, insurance and other expenses.

Impairment — We recognized an impairment loss of $81.8 million in 2023 related to three hotels and one retail component of a hotel property.

We recognized an impairment loss of $89.6 million in 2022 related to three hotels as well as an impairment related to damage caused by Hurricane Ian at LaPlaya Beach Resort & Club in Naples, Florida and Southernmost Beach Resort in Key West, Florida.

Gain on sale of hotel properties — We recognized a gain on sale of $30.4 million primarily due to the sales of five hotels and two retail components of our hotels in 2023.

We recognized a gain on sale of $6.2 million primarily due to the sales of four hotels in 2022.

Business interruption insurance income — We recognized business interruption insurance income of $33.0 million in 2023 related to a partial settlement with the insurance carriers for lost income at LaPlaya Beach Resort & Club.

Other operating expenses — Other operating expenses increased by $7.3 million primarily due to payroll and claims administration costs at LaPlaya Beach Resort & Club for which reimbursement from insurance policies is uncertain.

Interest expense — Interest expense increased by $15.7 million as a result of higher interest rates on floating rate debt.

Other — Other increased by $3.7 million due to an increase in interest income earned on excess cash.

Non-controlling interests — Non-controlling interests represent the allocation of income or loss of the Operating Partnership to third-party common OP unit holders and to the preferred OP unit holders.

In 2022, this amount includes $3.0 million in preferred distributions to the holders of Series Z Preferred Units which were issued in May 2022.

Distributions to preferred shareholders — Distributions to preferred shareholders increased as a result of the issuance of the Series G Preferred Shares and Series H Preferred Shares in May 2021 and July 2021, respectively, being outstanding for all of 2022.

Redemption of preferred shares — Redemption of preferred shares in 2022 relates to the repurchase of one million Series H Preferred Shares for a repurchase amount below the carrying value, net of issuance costs of the shares redeemed.

The Company redeemed the Series C and Series D Cumulative Redeemable Preferred Shares in August 2021 at the carrying value and therefore the redemption of preferred shares in 2021 represented the issuance costs associated with the shares redeemed.

These costs are included in the determination of net income (loss) attributable to common shareholders.

Distributions to preferred shareholders — Distributions to preferred shareholders decreased by $1.4 million as result of the redemption of one million of our 5.70% Series H Cumulative Redeemable Preferred Shares in December 2022 and the redemption of one million of our 5.70% Series H Cumulative Redeemable Preferred Shares in November 2023.

Non-GAAP Financial Measures

11 unchanged sentences

Real estate depreciation and amortization 240,304 239,231 223,813

(Gain) loss on sale of hotel properties (6,194) (64,729) (117,401)

Gain on sale of hotel properties (30,375) (6,194) (64,729)

Impairment loss 81,788 89,633 14,856

45 unchanged sentences

Our primary sources of liquidity are cash provided by our operations, borrowings under our credit facilities, net proceeds from equity and debt offerings, and net proceeds from property sales.

Our primary cash requirements in the short term (i.e., those requiring cash before January 1, 2024) will be to fund property lease obligations, interest and current principal on debt, capital improvements, dividends on common and preferred shares, and working capital of our property operations.

Our primary cash requirements in the short term (i.e., those requiring cash on or before December 31, 2024) will be to fund property lease obligations, interest and current principal on debt, capital improvements, dividends on common and preferred shares, and working capital of our property operations.

We believe our cash and cash equivalents, restricted cash and the amount available on our senior unsecured revolving credit facility, which totaled $830.0 million as of December 31, 2023, along with cash generated from ongoing operations will be sufficient to satisfy our short-term cash requirements.

16 unchanged sentences

Debt to our consolidated financial statements included in Part IV, Item 15 of this Annual Report on Form 10-K.

On January 3, 2024, the Company entered into the First Amendment to the Fifth Amended and Restated Credit Agreement ("Credit Agreement") which extended the maturity date of $356.7 million borrowed under Term Loan 2024 to January 2028.

In connection with the extension, the Company also repaid $60.0 million of its outstanding Term Loan 2024 obligation with available cash.

The remaining $43.3 million of Term Loan 2024's balance will continue to mature in October 2024 and will be paid with available cash or borrowings under the revolving credit facility at maturity.

On January 3, 2024, the Company also repaid $50.0 million of its outstanding Term Loan 2025 obligation with available cash.

We have the option to extend certain of our current debt maturities with the payment of extension fees.

Assuming we exercise all extension options available in our debt agreements, we expect that future principal and interest payments associated with our debt obligations outstanding as of December 31, 2022 will be $2.7 billion through their maturity, with $49.6 million of principal and $93.0 million of interest payable on or before January 1, 2024.

We intend to pay amounts due with available cash, borrowings under our revolving credit facility, or refinance with long term debt.

We are in compliance with all covenants governed by our existing credit facilities, term loan and senior note facilities.

Assuming we exercise all extension options available in our debt agreements and after adjusting for the aforementioned January 2024 term loan extension and repayments, we expect that future principal and interest payments associated with our remaining debt obligations outstanding as of December 31, 2023 will be $2.6 billion through their maturity, with $45.2 million of principal and $102.4 million of interest payable on or before December 31, 2024.

We intend to pay amounts due with available cash, borrowings under our revolving credit facility, proceeds from property sales and/or refinance with long-term debt.

We are in compliance with all of our debt covenants.

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

11 unchanged sentences

See Capital Investments for discussion on planned capital investments.

Preferred dividends and Series Z operating partnership units

Preferred dividends and Series Z preferred operating partnership units

We expect to pay aggregate annual dividends and distributions of approximately $47.2 million on our outstanding Series E, Series F, Series G and Series H Cumulative Redeemable Preferred Shares and Series Z Cumulative Perpetual Preferred Units on or before December 31, 2024 and in future years until the shares/units are redeemed.

7 unchanged sentences

Fluctuations in our net cash provided by operating activities are primarily the result of changes in hotel revenues, operating cash requirements and corporate expenses.

The increase in cash provided by operations in 2022 as compared to 2021 is due to the resumption of operations at our hotels and continued improvement in travel demand.

In addition, the operations at several of our hotels were temporarily suspended throughout the first quarter of 2021 but were operating in 2022.

The decrease in cash provided by operations in 2023 as compared to 2022 is primarily due to the disposition of five hotel properties and two retail components of our hotel properties in 2023.

Investing Activities.

Our net cash used in investing activities was $109.4 million for the year ended December 31, 2022 and $81.6 million for the year ended December 31, 2021.

Fluctuations in our net cash used in investing activities are primarily the result of acquisition and disposition activities, as well as capital improvements and additions to our properties.

Our net cash provided by (used in) investing activities was $142.0 million for the year ended December 31, 2023 and $(109.4) million for the year ended December 31, 2022.

Fluctuations in our net cash provided by (used in) investing activities are primarily the result of acquisition and disposition activities, as well as capital improvements and additions to our properties.

• During the year ended December 31, 2023, we invested $200.6 million in improvements to our hotel properties, received $314.9 million from the sale of five hotel properties and two retail components of our hotel properties and received $30.2 million in property insurance proceeds.

• During the year ended December 31, 2022, we invested $116.7 million in improvements to our hotel properties, received $248.9 million from the sale of four hotel properties and purchased two hotel properties using cash of $247.2 million.

• During the year ended December 31, 2021, we invested $83.8 million in improvements to our hotel properties, received $255.9 million from the sale of three hotel properties and purchased three hotel properties using cash of $253.5 million.

Financing Activities.

1 unchanged sentence

Fluctuations in our net cash used in financing activities are primarily the result of our issuance and repurchase of debt and equity securities and distributions paid on our preferred and common shares.

• During the year ended December 31, 2022, we borrowed and repaid $190.2 million of revolving credit facility borrowings, repaid and borrowed $1.4 billion in other debt, repurchased $70.7 million of common shares through our common share repurchase program, paid $52.7 million in preferred and common distributions, used $16.0 million to redeem one million Series H Preferred Shares and paid $12.4 million in financing fees.

• During the year ended December 31, 2021, we received gross proceeds of $480.0 million from the issuance of our Series G and Series H Preferred Shares, which was partially offset by the payment $15.9 million in offering costs, received proceeds from the issuance of convertible notes and other debt of $268.6 million, repaid $392.2 million in other debt and $40.0 million of revolving credit facilities borrowings, used $250.0 million to redeem all our Series C and Series D Preferred Shares, paid $44.7 million in preferred and common distributions, purchased $21.0 million in Capped Call Transactions and paid $14.5 million in financing fees.

• During the year ended December 31, 2023, we borrowed and repaid $10.0 million of revolving credit facility borrowings, borrowed $140.0 million and repaid $211.1 million in other debt, repurchased $92.8 million and $15.8 million of common shares and preferred shares, respectively, through our common and preferred share repurchase programs, and paid $53.6 million in preferred and common distributions.

• During the year ended December 31, 2022, we borrowed and repaid $190.2 million of revolving credit facility borrowings, borrowed and repaid $1.4 billion in other debt, repurchased $70.7 million of common shares through our common share repurchase program, paid $52.7 million in preferred and common distributions, used $16.0 million to redeem one million Series H Preferred Shares and paid $12.4 million in financing fees.

Capital Investments

5 unchanged sentences

Generally, we expect to fund renovations and improvements with available cash, restricted cash, borrowings under our credit facility or proceeds from new debt or equity offerings.

For the year ended December 31, 2022, we invested $116.7 million in capital investments to reposition and improve our properties, including the renovations of 1 Hotel San Francisco (formerly Hotel Vitale), Hotel Ziggy (formerly Grafton on Sunset) and Skamania Lodge.

For the year ended December 31, 2023, we invested $200.6 million in capital investments to reposition and improve our properties, including the renovations of Newport Harbor Island Resort, Margaritaville Hotel San Diego Gaslamp Quarter, Estancia La Jolla Hotel & Spa, Jekyll Island Club Resort, Hilton San Diego Gaslamp Quarter and Skamania Lodge, as well as capital expenditures related to the repair and remediation of LaPlaya Beach Resort & Club and Southernmost Beach Resort, which were damaged by Hurricane Ian.

Depending on market conditions, and in some instances subject to approval from governmental authorities, we expect to invest an additional $85.0 million to $90.0 million in capital investments in 2024, which includes normal hotel capital refurbishments, return of investment projects and major capital projects.

We have the following significant capital projects that are expected to be completed in 2023 or 2024:

• $25.0 million comprehensive redevelopment and renovation of Hilton San Diego Gaslamp Quarter, which commenced in 2022 and is expected to be completed in the second quarter of 2023;

• $27.0 million comprehensive redevelopment and repositioning of Solamar Hotel into Margaritaville Hotel San Diego Gaslamp Quarter, which commenced in 2022 and is expected to be completed in the second quarter of 2023;

• $20.0 million to $22.0 million comprehensive renovation at Jekyll Island Club Resort, which commenced in 2022 and is expected to be completed in the second quarter of 2023;

• $20.0 million to $25.0 million comprehensive renovation of Estancia La Jolla Hotel & Spa, which commenced in 2022 and is expected to be completed in the second quarter of 2024;

• $11.0 million first phase of a multi-phase master plan at Skamania Lodge, which commenced in 2022 and is expected to be completed in the third quarter of 2023.

We have the following significant capital projects that are expected to be completed in 2024:

• $49.0 million comprehensive redevelopment of Newport Harbor Island Resort, which commenced in 2023 and is expected to be completed in the second quarter of 2024;

• $26.0 million comprehensive redevelopment of Estancia La Jolla Hotel & Spa, which commenced in 2022 and is expected to be completed in the second quarter of 2024;

• $20.0 million first phase of a multi-phase master plan at Skamania Lodge, which commenced in 2022 and is expected to be completed in the second quarter of 2024.

Common Share Repurchase Programs, Preferred Share Repurchase Program and ATM Program

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

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

We may suspend or discontinue this program at any time.

Upon repurchase by the Company, common shares cease to be outstanding and become authorized but unissued common shares.

For the year ended December 31, 2022, the Company made $56.6 million in repurchases under this program and, as of December 31, 2022, no common shares remained available for repurchase under this program.

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

Common Share Repurchase Programs

On July 27, 2017, our Board of Trustees authorized a share repurchase program of up to $100.0 million of our outstanding common shares.

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

During the year ended December 31, 2023, we repurchased $87.0 million of common shares under this program, and as of December 31, 2023, no common shares remained available for repurchase under this program.

On February 17, 2023, our Board of Trustees authorized a share repurchase program of up to $150.0 million of our outstanding common shares.

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

We may suspend or discontinue this program at any time.

For the year ended December 31, 2022, the Company made $13.0 million in repurchases under this program and, as of December 31, 2022, $87.0 million of common shares remained available for repurchase under this program.

On February 21, 2023, we announced that our Board of Trustees authorized a new share repurchase program of up to $150.0 million of the Company's outstanding common shares.

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

This $150.0 million common share repurchase program will commence upon the completion of the Company's $100.0 million common share repurchase program, under which approximately $74.0 million of common shares remained available for repurchase as of February 21, 2023.

Common shares repurchased by the Company cease to be outstanding and become authorized but unissued common shares.

During the year ended December 31, 2023, we repurchased $4.0 million of common shares under this program, and as of December 31, 2023, $146.0 million of common shares remained available for repurchase under this program.

During the year ended December 31, 2023, we repurchased 6,498,901 common shares under the 2017 and 2023 repurchase programs, for an aggregate purchase price of $91.0 million, or an average of approximately $14.01 per share.

The timing, manner, price and amount of any repurchases under the 2023 program will be determined by us in our discretion and will depend on a variety of factors, including legal requirements, price, liquidity and economic considerations, and market conditions.

1 unchanged sentence

The program does not have an expiration date and may be suspended, modified or discontinued at any time.

On February 21, 2023, we announced that our Board of Trustees approved a repurchase program of up to $100.0 million of our outstanding preferred shares (the “Preferred Share Repurchase Program”).

Under the terms of the program, we may repurchase up to an aggregate of $100.0 million of our 6.375% Series E Cumulative Redeemable Preferred Shares, 6.30%

Series F Cumulative Redeemable Preferred Shares, 6.375% Series G Cumulative Redeemable Preferred Shares and 5.70% Series H Cumulative Redeemable Preferred Shares from time to time in transactions on the open market or by private agreement.

The aggregate liquidation value of our preferred shares that may be repurchased pursuant to the Preferred Shares Repurchase Program, as of February 21, 2023, was $715.0 million.

Preferred Share Repurchase Program

On February 17, 2023, our Board of Trustees approved a repurchase program of up to $100.0 million of our outstanding preferred shares (the “Preferred Share Repurchase Program”).

Under the terms of the program, we may repurchase up to an aggregate of $100.0 million of our 6.375% Series E Cumulative Redeemable Preferred Shares, 6.30% Series F Cumulative Redeemable Preferred Shares, 6.375% Series G Cumulative Redeemable Preferred Shares and 5.70% Series H Cumulative Redeemable Preferred Shares from time to time in transactions on the open market or by private agreement.

As of December 31, 2023, $84.2 million of preferred shares remained available for repurchase under this program.

During the year ended December 31, 2023, we repurchased 1,000,000 of Series H Preferred Shares under this repurchase program, for an aggregate purchase price of $15.8 million, or an average of approximately $15.79 per share.

The timing, manner, price and amount of any repurchases will be determined by us in our discretion and will depend on a variety of factors, including legal requirements, price, liquidity and economic considerations, and market conditions.

2 unchanged sentences

On April 29, 2021, we 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, 2022.

As of December 31, 2022, $200.0 million of common shares remained available for issuance under the ATM program.

On February 21, 2023, the ATM program expired.

No common shares were issued or sold under the ATM program.

We rely on the performance of the hotels to increase revenues to keep pace with inflation.

7 unchanged sentences

We believe we minimize the credit risk by transacting with major credit-worthy financial institutions.

As of December 31, 2022, we have interest rate swap agreements with an aggregate notional amount of $1.0 billion to hedge variable interest rates on our unsecured term loans.

As of December 31, 2023, we have interest rate swap agreements with an aggregate notional amount of $1.2 billion to hedge variable interest rates on our unsecured term loans and a mortgage loan.

We have designated these pay-fixed, receive-floating interest rate swap derivatives as cash flow hedges.

For a further discussion of our derivative instruments see Note 5 , Debt , to our consolidated financial statements included in Part IV, Item 15 of this Annual Report on Form 10-K.

For a further discussion of our derivative instruments see Note 5.

Debt , to our consolidated financial statements included in Part IV, Item 15 of this Annual Report on Form 10-K.

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 7. Management’s Discussion and Analysis