What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2024-02-21 compared with 2023-02-21 · 186 added, 202 removed, 1161 unchanged (25% of the section changed)

7 unchanged sentences

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, 2023.

We acquired Inn on Fifth on May 11, 2022 and Newport Harbor Island Resort (formerly Gurney's Newport Resort & Marina) on June 23, 2022 and have excluded the hotel operations of these properties from our assessment of effectiveness of internal control over financial reporting as of December 31, 2022.

Total assets and revenues for these hotels of $2.8 million and $35.8 million, respectively, for the year ended December 31, 2022 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.

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Other Information.

During the three months ended December 31, 2023, none of our officers or trustees adopted or terminated any contract, instruction or written plan for the purchase or sale of our securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any “non-Rule 10b5-1 trading arrangement."

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.

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Declaration of Trust of Pebblebrook Hotel Trust, as amended and supplemented through July 23, 2021 (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.

First Amendment to 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 July 21, 2017 (File No.

Bylaws of Pebblebrook Hotel Trust, as amended and restated on February 17, 2023 (incorporated by reference to Exhibit 3.1 to Pebblebrook Hotel Trust's Current Report on Form 8-K filed with the SEC on February 24, 2023 (File No.

Second Amended and Restated Agreement of Limited Partnership of Pebblebrook Hotel, L.P., dated as of December 13, 2013 (incorporated by reference to Exhibit 3.1 to Pebblebrook Hotel Trust's Current Report on Form 8-K filed with the SEC on December 17, 2013 (File No.

35 unchanged sentences

Fifth Amended and Restated Credit Agreement, dated as of October 13, 2022, 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 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 October 14, 2022 (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 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.

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.

First Amendment to Fifth Amended Restated Credit Agreement, dated as of January 3, 2024, 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 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 January 4, 2024 (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 (File No.

Form of Performance Unit Award Agreement for Executive Officers (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 (File No.

Form of Performance Unit Award Agreement 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 24, 2023 (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.

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

Clawback Policy.

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.

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February 21, 2024 /s/ J ON E.

Chairman, President and Chief Executive Officer

Chairman and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Name Title Date

BORTZ Chairman of the Board, President and Chief Executive Officer (principal executive officer) February 21, 2023

BORTZ Chief Executive Officer and Chairman of the Board (principal executive officer) February 21, 2024

/s/ RAYMOND D.

MARTZ Executive Vice President, Chief Financial Officer, Treasurer and Secretary (principal financial officer and principal accounting officer) February 21, 2023

MARTZ Co-President, Chief Financial Officer, Treasurer and Secretary (principal financial officer and principal accounting officer) February 21, 2024

/s/ CYDNEY C.

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As discussed in Notes 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.

Investment in hotel properties, net of accumulated depreciation was 96% of total assets as of December 31, 2022.

Investment in hotel properties, net of accumulated depreciation was $5,491 million, or 94% of total assets as of December 31, 2023.

We identified the assessment of the estimated holding periods for hotel properties as a critical audit matter.

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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, 2023 and 2022, 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, 2023, and the related notes and financial statement schedule III (collectively, the consolidated financial statements), and our report dated February 21, 2024 expressed an unqualified opinion on those consolidated financial statements.

The Company acquired Inn on Fifth and Newport Harbor Island Resort during 2022, and management excluded from its assessment of the effectiveness of the Company’s internal control over financial reporting as of December 31, 2022, Inn on Fifth and Newport Harbor Island Resort’s internal control over financial reporting associated with total assets of $2.8 million and total revenues of $35.8 million included in the consolidated financial statements of the Company as of and for the year ended December 31, 2022.

Our audit of internal control over financial reporting of the Company also excluded an evaluation of the internal control over financial reporting of Inn on Fifth and Newport Harbor Island Resort.

Basis for Opinion

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General and administrative 44,789 39,187 38,166

Transaction costs 430 100 10,544

Impairment and other losses 89,882 14,856 74,556

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

Impairment 81,788 89,633 14,856

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

Business interruption insurance income ( 32,985 ) — —

Other operating expenses 12,602 5,352 2,036

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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

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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Balance at December 31, 2021

29,600,000 $ 296 130,813,750 $ 1,308 $ 4,268,042 $ ( 19,442 ) $ ( 1,094,023 ) $ 3,156,181 $ 7,724 $ 3,163,905

Pebblebrook Hotel Trust

5 unchanged sentences

Balance at December 31, 2021

29,600,000 $ 296 130,813,750 $ 1,308 $ 4,268,042 $ ( 19,442 ) $ ( 1,094,023 ) $ 3,156,181 $ 7,724 $ 3,163,905

Redemption of preferred shares ( 1,000,000 ) ( 10 ) — — ( 24,176 ) — 8,186 ( 16,000 ) — ( 16,000 )

Issuance of shares, net of offering costs — — — — ( 123 ) — — ( 123 ) — ( 123 )

Issuance of operating partnership units — — — — — — — 78,000 78,000

Issuance of common shares for Board of Trustees compensation — — 33,866 1 737 — — 738 — 738

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Distributions on common shares/units — — — — — — ( 5,035 ) ( 5,035 ) ( 69 ) ( 5,104 )

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

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 ) —

Distributions on preferred shares/units — — — — — — ( 45,074 ) ( 45,074 ) ( 2,975 ) ( 48,049 )

Other comprehensive income (loss):

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Balance at December 31, 2022

28,600,000 $ 286 126,345,293 $ 1,263 $ 4,182,359 $ 35,724 $ ( 1,223,117 ) $ 2,996,515 $ 88,028 $ 3,084,543

Pebblebrook Hotel Trust

5 unchanged sentences

Balance at December 31, 2022

28,600,000 $ 286 126,345,293 $ 1,263 $ 4,182,359 $ 35,724 $ ( 1,223,117 ) $ 2,996,515 $ 88,028 $ 3,084,543

Redemption of preferred shares ( 1,000,000 ) ( 10 ) — — ( 24,176 ) — 8,396 ( 15,790 ) — ( 15,790 )

Issuance of shares, net of offering costs — — — — ( 123 ) — — ( 123 ) — ( 123 )

Issuance of operating partnership units — — — — — — — — 78,000 78,000

Redemption of non-controlling interest OP units — — 133,605 1 3,514 — — 3,515 ( 3,515 ) —

Issuance of common shares for Board of Trustees compensation — — 55,480 1 753 — — 754 — 754

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Balance at December 31, 2023

27,600,000 $ 276 120,191,349 $ 1,202 $ 4,078,912 $ 24,374 $ ( 1,341,264 ) $ 2,763,500 $ 86,845 $ 2,850,345

The accompanying notes are an integral part of these financial statements.

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Amortization of deferred financing costs, non-cash interest and other amortization 12,124 13,453 16,633

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

Impairment and other losses 89,882 14,856 74,556

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

Impairment 81,788 89,633 14,856

Non-cash ground rent 9,898 9,952 7,061

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Distributions — preferred shares/units ( 48,607 ) ( 47,367 ) ( 39,443 )

Repayments of refundable membership deposits ( 2,462 ) ( 2,739 ) ( 1,354 )

Other financing activities ( 928 ) ( 2,462 ) ( 2,739 )

Net cash provided by (used in) financing activities ( 236,847 ) ( 209,338 ) ( 33,250 )

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Los Angeles, California (Beverly Hills, Santa Monica, and West Hollywood);

Miami (Coral Gables), Florida;

Naples, Florida;

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Santa Cruz, California;

Seattle, Washington;

Stevenson, Washington;

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PHL is consolidated into the Company’s financial statements.

COVID-19 Update

The COVID-19 pandemic, which began in early 2020, has had a significant negative impact on the Company's operations and financial results.

Results have substantially improved through 2022.

The Company exited its debt covenant waiver period under its credit facilities as of the end of the second quarter of 2022.

As discussed in Note.

5 Debt , in October 2022, the Company refinanced its senior unsecured revolving credit facility and all of its term loans.

There continues to be significant uncertainty regarding the trends and outlook as a result of new variants and individual and government responses.

Summary of Significant Accounting Policies

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New Accounting Pronouncements

Reference Rate Reform

In March 2020, January 2021 and December 2022, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2020-04, Reference Rate Reform (Topic 848):

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

Scope , and ASU 2022-06, Reference Rate Reform (Topic 848):

Deferral of the Sunset Date of Topic 848, respectively.

ASU 2020-04, ASU 2021-01 and ASU 2022-06 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, ASU 2021-01 and ASU 2022-06 was effective upon issuance and, once adopted, may be applied prospectively to contract modifications and hedging relationships through December 31, 2024.

In October 2022, the Company amended the terms of its credit agreements to, among other things, change the reference rate from LIBOR to the Secured Overnight Financing Rate (“SOFR”).

The Company also amended the terms of the interest rate swap derivatives to match the SOFR reference rate.

The Company made certain ASC 848 elections related to the changes in critical terms of the hedging relationships which allowed the Company to not dedesignate these hedging relationships.

The adoption of ASU 2020-04, ASU 2021-01 and ASU 2022-06 has not had and is not expected to have a material impact on the Company's consolidated financial statements.

Business Combinations

In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805) Accounting for Contract Assets and Contract Liabilities from Contracts with Customers , to improve the accounting for acquired revenue contracts with customers in a business combination by addressing diversity in practice and inconsistency related to the recognition of an acquired contract liability and to payment terms and their effect on subsequent revenue recognized by the acquirer.

The amendments in ASU 2021-08 require that an entity (acquirer) to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606.

At the acquisition date, an acquirer should account for the related revenue contracts in accordance with Topic 606 as if it had originated the contracts.

ASU 2021-08 is effective for fiscal years beginning after December 15, 2022 and early adoption is permitted.

The Company does not expect the adoption of ASU 2021-08 to have a material effect on its consolidated financial statements and disclosures.

Disclosure Improvements

In October, 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2023-06, Disclosure Improvements:

Codification Amendments in Response to the SEC's Disclosure Update and Simplification Initiative ("ASU 2023-06").

ASU 2023-06 incorporates 14 of the 27 disclosure requirements published in SEC Release No.

33-10532 - Disclosure Update and Simplification into various topics within the Accounting Standards Codification ("ASC").

ASU 2023-06's amendments represent clarifications to, or technical corrections of, current requirements.

For SEC registrants, the effective date for each amendment will vary based on the date on which the SEC removes that related disclosure from its rules.

If the SEC does not act to remove its related requirement by June 30, 2027, any related FASB amendments will be removed from the ASC and will not be effective.

Early adoption is prohibited.

The Company is currently assessing the potential impacts of ASU 2023-06 and does not expect it to have a material effect on its consolidated financial statements and disclosures.

Segment Reporting

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures ("ASU 2023-07").

ASU 2023-07 expands public entities’ segment disclosures by requiring disclosure of significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items, and interim disclosures of a reportable segment’s profit or loss and assets.

All disclosure requirements under ASU 2023-07 are also required for public entities with a single reportable segment.

ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted.

The amendments should be applied retrospectively to all prior periods presented in the financial statements.

The Company is currently assessing the impacts of adopting ASU 2023-07 on its consolidated financial statements and disclosures.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures ("ASU 2023-09").

ASU 2023-09 requires entities to disclose disaggregated information about their effective tax rate reconciliation as well as information on income taxes paid.

ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, with early adoption permitted.

The amendments should be applied on a prospective basis, with the option to apply retrospectively.

The Company is currently assessing the impacts of adopting ASU 2023-09 on its consolidated financial statements and disclosures.

Acquisition and Disposition of Hotel Properties

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 & Spa in 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.

There were no acquisitions of hotel properties during the year ended December 31, 2023.

On May 11, 2022, the Company acquired the 119 -room Inn on Fifth in Naples, Florida for $ 156.0 million, excluding prorations and transactions costs.

1 unchanged sentence

On June 23, 2022, the Company acquired the 257 -room Newport Harbor Island Resort (formerly Gurney's Newport Resort & Marina) in Newport, Rhode Island for $ 174.0 million using cash on hand and proceeds from its senior unsecured revolving credit facility.

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, 2023 and 2022 (in thousands):

Hotel Property Name Location Sale Date Sale Price

The Heathman Hotel Portland, OR February 22, 2023 $ 45,000

Retail at The Westin Michigan Avenue Chicago

Chicago, IL March 17, 2023 27,300

Hotel Colonnade Coral Gables Coral Gables, FL March 28, 2023 63,000

Hotel Monaco Seattle Seattle, WA May 9, 2023 63,250

Hotel Vintage Seattle Seattle, WA May 24, 2023 33,700

Hotel Zoe Fisherman’s Wharf San Francisco, CA November 14, 2023 68,500

Marina City Retail at Hotel Chicago Downtown, Autograph Collection

Chicago, IL December 21, 2023 30,000

2023 Total $ 330,750

The Marker San Francisco San Francisco, CA June 28, 2022 $ 77,000

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2022 Total $ 260,900

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

For the years ended December 31, 2022, 2021 and 2020, the accompanying consolidated statements of operations and comprehensive income included operating (loss) of $( 2.3 ) million, $( 21.7 ) million and $( 32.4 ) million, respectively, excluding impairment loss and gain on sale of hotel properties, related to the hotel properties sold.

For the years ended December 31, 2023, 2022 and 2021, the accompanying consolidated statements of operations and comprehensive income included operating (loss) of $( 0.8 ) million, $( 3.9 ) million and $( 33.2 ) million, respectively, excluding impairment loss and gain on sale of hotel properties related to the hotel properties sold and held for sale.

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.

Held for Sale

As of December 31, 2023, no properties were designated as held for sale by the Company.

As of December 31, 2022, the Company had entered into an agreement to sell The Heathman Hotel for approximately $ 45.0 million.

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In addition, the Company classified all of the assets and liabilities related to this hotel as assets and liabilities held for sale in the accompanying consolidated balance sheets and ceased depreciating the assets.

The Company expects to complete the sale in the first quarter of 2023, however, no assurances can be given that the sale will be completed on these terms or at all.

As noted above, the Company completed the sale of The Heathman Hotel in February 2023.

Investment in Hotel Properties

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Investment in hotel properties, net $ 5,490,776 $ 5,874,876

On September 27, 2022, LaPlaya Beach Resort and LaPlaya Beach Club ("LaPlaya") and Inn on Fifth, both located in Naples, Florida, and Southernmost Beach Resort located in Key West, Florida were impacted by the effects of Hurricane Ian.

Inn on Fifth and Southernmost Beach Resort did not suffer significant damage and have been reopened.

LaPlaya was closed in anticipation of the storm and is expected to be re-opened in stages beginning in the first quarter of 2023.

The Company anticipates LaPlaya to have reopened fully by the middle of 2023.

The Company’s insurance policies provide coverage for property damage, business interruption and reimbursement for other costs that were incurred relating to damages sustained during Hurricane Ian.

Insurance proceeds are subject to deductibles.

As of December 31, 2022, the Company recognized an impairment loss of $ 7.9 million for the damage to LaPlaya and Southernmost Beach Resort which is recorded in impairment and other losses in the Company’s accompanying consolidated statement of operations and comprehensive income.

The Company recorded a receivable for costs incurred to remediate the damage in excess of the deductible.

Through December 31, 2022, the Company has received $ 15.8 million in preliminary advances from the insurance providers and continues to work with the insurance providers on the settlement of the property and business interruption claims.

Hurricane Ian

On September 27, 2022, LaPlaya Beach Resort & Club ("LaPlaya") and Inn on Fifth, both located in Naples, Florida, and Southernmost Beach Resort, located in Key West, Florida, were impacted by the effects of Hurricane Ian.

Inn on Fifth and Southernmost Beach Resort did not suffer significant damage or disruption.

LaPlaya was closed in anticipation of the storm and required remediation and repairs from the damage and remained closed.

In 2023, LaPlaya began to reopen in stages as the buildings and facilities were repaired.

The Company expects LaPlaya's remediation and repair to be substantially completed in the first quarter of 2024.

The Company’s insurance policies provide coverage for property damage, business interruption and reimbursement for other costs that were incurred relating to damages sustained during Hurricane Ian and the Company has recorded a receivable for the expenditures to date which it anticipates to collect from the insurance providers in excess of the deductibles.

For the years ended December 31, 2023 and 2022, the Company recognized an aggregate impairment loss of zero and $ 7.9 million, respectively, for the damage to LaPlaya and Southernmost Beach Resort.

For the year ended December 31, 2023, the Company incurred $ 6.6 million of expenses related to payroll, repair and claims administration for which reimbursement from insurance policies is uncertain and therefore is included in other operating expenses in the Company's consolidated statements of operations and comprehensive income.

Through December 31, 2023 and 2022, the Company has received a total of $ 84.3 million in preliminary advances from the insurance providers and continues to work with the insurance providers on the settlement of the property and business interruption claims.

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

The Company periodically adjusts its estimate of future operating cash flows and estimated hold periods for certain properties.

As a result of this review, 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, 2022, the Company recognized an impairment loss of $ 81.7 million related to three hotels as a result of their fair values being lower than their carrying values.

As a result of its review, the Company may identify an impairment trigger has occurred and assess its investment in hotel properties for recoverability.

For the years ended December 31, 2023, 2022, and 2021, the Company recognized impairment losses of $ 81.8 million related to three hotels and one retail component of a hotel property, $ 81.7 million related to three hotels and $ 14.9 million related to one hotel, respectively, as a result of their fair values being lower than their carrying values.

The impairment losses were determined using Level 2 inputs under authoritative guidance for fair value measurements using purchase and sale agreements and information from marketing efforts for these properties.

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 three properties as a result of their fair values being lower than their carrying values.

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

Right-of-use Assets and Lease Liabilities

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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.

In 2021, the Company amended the agreements governing its credit facilities, term loan facilities and senior notes to, among other things, waive financial covenants until the second quarter of 2022 (with substantially less-restrictive covenants through the end of the first quarter of 2023), extend certain debt maturity dates and increase the interest rate spread.

The Company exited the debt covenant waiver period as of the end of the second quarter of 2022.

On October 13, 2022, the Company entered into the Fifth Amended and Restated Credit Agreement with Bank of America, N.A., as administrative agent and certain other agents and lenders ("Credit Agreement").

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

Proceeds from the new term loans and $ 26.7 million of cash on hand were used to repay the outstanding balances on the prior term loans.

The Company incurred $ 7.4 million in costs related to the refinancing which were recorded in interest expense in the accompanying consolidated statement of operations.

The Credit Agreement provides for a $ 650.0 million senior unsecured revolving credit facility and three $ 460.0 million unsecured term loan facilities totaling $ 1.38 billion.

The Company may request additional lender commitments to increase the aggregate borrowing capacity under the Credit Agreement up to an additional $ 970.0 million.

On January 3, 2024, the Company entered into the First Amendment to the 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.

The Company's debt consisted of the following as of December 31, 2023 and 2022 (dollars in thousands):

Balance Outstanding as of

Interest Rate at December 31, 2022 Maturity Date December 31, 2022 December 31, 2021

Interest Rate at December 31, 2023

Maturity Date December 31, 2023 December 31, 2022

Revolving credit facilities

11 unchanged sentences

October 2027 460,000 460,000

First Term Loan - January 2023 — 26,000

First Term Loan Extended - March 2024 — 274,000

Second Term Loan - April 2022 — 26,327

Fourth Term Loan - October 2024 — 110,000

Sixth Term Loan Tranche 2021 Extended - November 2022 — 82,071

Sixth Term Loan Tranche 2022 - November 2022 — 114,670

Sixth Term Loan Tranche 2023 - November 2023 — 400,000

Sixth Term Loan Tranche 2024 - January 2024 — 400,000

Term loan principal $ 1,380,000 $ 1,380,000

7 unchanged sentences

Margaritaville Hollywood Beach Resort 7.04 % (4)

May 2023 161,500 161,500

September 2026 140,000 161,500

Estancia La Jolla Hotel & Spa 5.07 % September 2028 57,497 59,485

6 unchanged sentences

Interest rate at December 31, 2023 gives effect to interest rate hedges.

(2) The Company has the option to extend the maturity date of October 13, 2026 for up to two six-month periods, pursuant to certain terms and conditions and payment of an extension fee, for a maximum maturity date of October 13, 2027.

(3) The Company intends to pay off the Series A Notes using available cash or borrowings under the revolving credit facility at maturity.

(4) In April 2022, the Company exercised its option to extend the maturity date to May 2023.

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 further to May 2024, which the Company expects to exercise.

(2) The Company has the option to extend the maturity date for up to two six-month periods, pursuant to certain terms and conditions and payment of an extension fee.

(3) The Company paid off the Series A Notes using available cash.

(4) This loan was refinanced during the third quarter of 2023 and now bears interest at a floating rate equal to daily SOFR plus of 3.75 %.

The interest rate at December 31, 2023 gives effect to an interest rate swap.

The Company has the option to extend the maturity date for up to two one -year periods, pursuant to certain terms and conditions and payment of an extension fee.

(5) On January 3, 2024, the Company entered into the First Amendment to the 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.

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

Unsecured Revolving Credit Facilities

The $ 650.0 million senior unsecured revolving credit facility provided for in the Credit Agreement matures in October 2026 and provides for two six-month extension options, subject to certain terms and conditions and payment of an extension fee.

All borrowings under the $ 650.0 million senior unsecured revolving credit facility bear interest at a rate per annum equal to, at the option of the Company, (i) SOFR plus 0.10 % (the “SOFR Adjustment”) plus a margin that is based upon the Company’s leverage ratio or (ii) the Base Rate (as defined by the Credit Agreement) plus a margin that is based on the Company’s leverage ratio.

All borrowings under the $ 650.0 million senior unsecured revolving credit facility bear interest at a rate per annum equal to, at the option of the Company, (i) the Secured Overnight Financing Rate ("SOFR") plus 0.10 % (the “SOFR Adjustment”) plus a margin that is based upon the Company’s leverage ratio or (ii) the Base Rate (as defined by the Credit Agreement) plus a margin that is based on the Company’s leverage ratio.

The margins for revolving credit facility loans range in amount from 1.45 % to 2.50 % for SOFR-based loans and 0.45 % to 1.50 % for Base Rate-based loans, depending on the Company’s leverage ratio.

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The credit agreement contains certain financial covenants, including a maximum leverage ratio, a minimum fixed charge coverage ratio and a maximum percentage of secured debt to total asset value.

Under the terms of the credit agreement for the senior unsecured revolving credit facility, one or more standby letters of credit, up to a maximum aggregate outstanding balance of $ 30.0 million, may be issued on behalf of the Company by the lenders under the facility.

The Company pays a fee at a rate per annum equal to the applicable margin based upon the Company's leverage ratio.

Under the terms of the Credit Agreement, one or more standby letters of credit, up to a maximum aggregate outstanding balance of $ 30.0 million, may be issued on behalf of the Company by the lenders under the senior unsecured revolving facility.

The Company pays a fee for outstanding standby letters of credit at a rate per annum equal to the applicable margin based upon the Company's leverage ratio.

Any outstanding standby letters of credit reduce the available borrowings on the senior unsecured revolving credit facility by a corresponding amount.

Standby letters of credit of $ 13.6 million and $ 12.6 million were outstanding as of December 31, 2023 and 2022, respectively.

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.

As of December 31, 2023, 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.

On October 13, 2022, PHL amended and restated the agreement governing the PHL Credit Facility to extend the maturity to October 2026.

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Unsecured Term Loan Facilities

The three $ 460.0 million term loans provided for in the Credit Agreement mature in October 2024, October 2025 and October 2027, respectively.

The three $ 460.0 million term loans provided for in the Credit Agreement mature in October 2024, October 2025 and October 2027, respectively as of December 31, 2023.

After adjusting for the aforementioned January 3, 2024 term loan amendment and repayments, the term loans will mature as follows:

$ 43.3 million in October 2024 (Term Loan 2024), $ 410.0 million in October 2025 (Term Loan 2025), $ 460.0 million in October 2027 (Term Loan 2027) and $ 356.7 million in January 2028 (Term Loan 2024).

The term loans bear interest at a rate per annum equal to, at the option of the Company, (i) SOFR plus the SOFR Adjustment plus a margin that is based upon the Company’s leverage ratio or (ii) the Base Rate (as defined by the Credit Agreement) plus a margin that is based on the Company’s leverage ratio.

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The Convertible Notes will mature on December 15, 2026.

The Company recorded coupon interest expense of $ 13.1 million and $ 12.7 million for the years ended December 31, 2022 and 2021, respectively.

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

1 unchanged sentence

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 such Convertible Notes, or $ 113.9 million.

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

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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 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 $ 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").

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.

The Company has $ 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").

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

As of December 31, 2023, the Company was in compliance with all such debt covenants.

1 unchanged sentence

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 %.

In April 2022, the Company exercised its option to extend the maturity date to May 9, 2023.

The Company has an option to extend the maturity date further to May 9, 2024, which the Company expects to exercise.

If the loan is extended, the interest rate spread will increase by 20 basis points.

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

During the third quarter of 2023, the Company paid down $ 21.5 million of this loan and refinanced the remaining $ 140.0 million balance.

The new loan requires interest-only payments based on a floating rate equal to daily SOFR plus a spread of 3.75 %.

This loan matures on September 7, 2026 and may be extended for up to two one -year periods, subject to certain terms and conditions and payment of extension fees.

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").

23 unchanged sentences

2024 $ 461,910

Thereafter 48,454

Total debt principle payments $ 2,329,897

Deferred financing costs, net ( 10,096 )

Debt premium (discount), net 7,681

Total debt $ 2,319,801

7 unchanged sentences

Maturity December 31, 2023 December 31, 2022

Swap-cash flow — January 2022 $ — $ 180,000

Swap-cash flow — April 2022 — 100,000

Swap-cash flow 0.05 % - 0.07 %

5 unchanged sentences

Swap-cash flow 3.22 % - 3.25 %

October 2025 200,000 —

Swap-cash flow 1.33 % - 1.36 %

February 2026 290,000 290,000

Swap-cash flow 3.02 % - 3.03 %

October 2026 200,000 —

Swap-cash flow 3.29 % October 2027 165,000 —

Total $ 1,155,000 $ 1,040,000

______________________

(1) In October 2022, the Company transitioned from LIBOR-based interest rates to SOFR-based interest rates for its interest rate swap agreements.

There are no other substantive changes to its interest rate swap agreements as part of this transition.

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

8 unchanged sentences

The Company expects approximately $ 18.2 million will be reclassified from accumulated other comprehensive income (loss) to interest expense within the next 12 months.

In January 2023, the Company entered into interest rate swap agreements with an aggregate notional amount of $ 400.0 million, which will be effective in November 2023.

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

3 unchanged sentences

San Diego, CA $ 307,003 $ 303,701 $ 165,977

Southern Florida/Georgia 271,167 166,310 76,971

Boston, MA 265,964 243,861 124,440

Southern Florida/Georgia 229,851 271,167 166,310

Los Angeles, CA 187,997 168,310 94,275

2 unchanged sentences

Chicago, IL 75,142 68,402 27,279

63,071 28,608 27,453

Washington, D.C.

3 unchanged sentences

$ 1,419,949 $ 1,391,891 $ 733,044

______________________

(1) Other includes:

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

New York, NY, Philadelphia, PA, Newport, RI and Santa Cruz, CA.

Payments from customers are primarily made when services are provided.

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

During the fourth quarter of 2022, the Company repurchased 4,559,839 common shares for an aggregate purchase price of $ 69.6 million, or an average of approximately $ 15.27 per share.

Upon repurchase by the Company, these common shares ceased to be outstanding and became authorized but unissued common shares.

Common Share Repurchase Programs

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.

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 repurchased $ 56.6 million of common shares, and as of December 31, 2022, no 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 common shares.

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

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

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

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

Under this program, the Company 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, the Company 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, the Company's 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.

For the year ended December 31, 2022, the Company repurchased $ 13.0 million common shares 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.

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

During the year ended December 31, 2023, the Company 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, the Company 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.

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, 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.

Common Dividends

31 unchanged sentences

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.

On February 21, 2023, the Company announced that its Board of Trustees approved a repurchase program of up to $ 100.0 million of the Preferred Shares.

Under the terms of the program, the Company may repurchase up to an aggregate of $ 100.0 million of the Preferred Shares.

The aggregate liquidation value of the 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, the Company's Board of Trustees authorized a share repurchase program of up to $ 100.0 million of the Preferred Shares.

Under the terms of the program, the Company 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, the Company 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 the Company in its discretion and will depend on a variety of factors, including legal requirements, price, liquidity and economic considerations, and market conditions.

The program does not require us to repurchase any specific number of preferred shares.

The program does not require the Company to repurchase any specific number of Preferred Shares.

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

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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.

In December 2023, these OP units were redeemed for common shares in accordance with the redemption rights described above.

On May 11, 2022, in connection with the acquisition of Inn on Fifth in Naples, Florida, the Company issued 16,291 OP units in the Operating Partnership.

2 unchanged sentences

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

As of December 31, 2022 and 2021, the Operating Partnership had 727,208 LTIP units outstanding.

Of the 727,208 LTIP units outstanding at December 31, 2022, 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.

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

These LTIP units will 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, with an aggregate grant date fair value of $ 13.6 million.

On February 17, 2023, the Board of Trustees granted 131,276 LTIP Class B units to its executive officers.

These LTIP units will vest ratably on January 1, 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 $ 15.04 per unit with an aggregate grant date fair value of $ 2.0 million.

As of December 31, 2023, the Operating Partnership had 858,484 LTIP units outstanding, of which 277,136 LTIP units have vested.

As of December 31, 2022, the Operating Partnership had 727,208 LTIP units outstanding, of which 127,111 LTIP units have vested.

Only vested LTIP units may be converted to OP units, which in turn can be tendered for redemption as described above.

Non-controlling Interest of Preferred Units in Operating Partnership

On May 11, 2022, in connection with the acquisition of Inn on Fifth in Naples, Florida, the Company issued 3,104,400 preferred units in the Operating Partnership, designated as 6.0 % Series Z Cumulative Perpetual Preferred Units ("Series Z Preferred Units").

The Series Z Preferred Units rank senior to the common OP units and on parity with the Operating Partnership's Series E, Series F, Series G and Series H Preferred Units.

On May 11, 2022, in connection with the acquisition of Inn on Fifth, the Company issued 3,104,400 preferred units in the Operating Partnership, designated as 6.0 % Series Z Cumulative Perpetual Preferred Units ("Series Z Preferred Units").

The Series Z Preferred Units rank senior to OP units and on parity with the Operating Partnership's Series E, Series F, Series G and Series H Preferred Units.

Holders of Series Z Preferred Units are entitled to receive quarterly distributions at an annual rate of 6.0 % of the liquidation preference value of $ 25.00 per share.

5 unchanged sentences

Share-Based Compensation Plan

Available Shares

The Company maintains the 2009 Equity Incentive Plan, as amended and restated (as amended, the "Plan"), to attract and retain independent trustees, executive officers and other key employees and service providers.

2 unchanged sentences

The Company pays or accrues for dividends on share-based awards.

All share awards are subject to full or partial accelerated vesting upon a change in control and upon death or disability or certain other employment termination events as set forth in the award agreements.

All outstanding share awards are subject to full or partial accelerated vesting upon a change in control and upon death or disability or certain other employment termination events as set forth in the award agreements.

As of December 31, 2023, there were 1,499,388 common shares available for issuance under the Plan.

2 unchanged sentences

These shares generally vest over three to five years based on continued service or employment.

The following table provides a summary of service condition restricted share activity as of December 31, 2022:

The following table provides a summary of service condition restricted share activity for the years ended December 31, 2023, 2022 and 2021:

Shares Weighted-Average

3 unchanged sentences

Forfeited ( 9,236 ) $ 23.37

Cancelled ( 217,083 ) $ 25.53

Unvested at December 31, 2021 567,431 $ 22.53

8 unchanged sentences

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 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, 2023, 2022 and 2021, the Company recognized approximately $ 3.5 million, $ 3.8 million and $ 4.1 million, respectively, of share-based compensation expense related to these awards in the accompanying consolidated statements of operations and comprehensive income.

3 unchanged sentences

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.

3 unchanged sentences

On February 12, 2020, the Board of Trustees approved a target award of 161,777 performance-based equity awards to officers and employees of the Company.

In January 2022, none of these awards vested and the Company issued no common shares to officers or employees.

In January 2023, these awards vested and the Company issued 51,686 common shares to officers and 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, 2020 through December 31, 2022.

2 unchanged sentences

The actual number of common shares that ultimately vest will be from 0 % to 200 % of the target award and will be determined in 2024 based on the performance criteria defined in the award agreements for the period of performance from January 1, 2021 through December 31, 2023.

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.

On May 16, 2022, the Board of Trustees approved a target award of 175,898 performance-based equity awards to officers and employees of the Company.

These awards will vest, if at all, in 2025.

The actual number of common shares that ultimately vest will be from 0 % to 200 % of the target award and will be determined in 2025 based on the performance criteria defined in the award agreements for the period of performance from January 1, 2022 through December 31, 2024.

On May 16, 2022, the Board of Trustees approved a target award of 175,898 performance-based equity awards to officers and employees of the Company.

On February 17, 2023, the Board of Trustees approved a target award of 314,235 performance-based equity awards to officers and employees of the Company.

These awards will vest, if at all, in 2026.

9 unchanged sentences

February 12, 2020

Relative and Absolute Total Shareholder Return 65.00 % / 35.00 %

$ 4.5 26.00 % 2.52 % 4.20 %

February 12, 2020

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

2 unchanged sentences

Relative Total Shareholder Return 100.00 % $ 5.3 58.70 % 2.72 % — %

February 17, 2023

Relative and Absolute Total Shareholder Return 70.00 % / 30.00 %

$ 6.0 61.60 % 4.31 % — %

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

1 unchanged sentence

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

As of December 31, 2022, there was approximately $ 6.0 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, 2023, 2022 and 2021, the Company recognized approximately $ 5.6 million, $ 4.8 million and $ 4.9 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

As of December 31, 2023, there was approximately $ 6.1 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.

Long-Term Incentive Partnership 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.

5 unchanged sentences

On February 18, 2021, the Board of Trustees granted 600,097 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 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.

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

On February 17, 2023, the Board of Trustees granted 131,276 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, 2022 and 2021, the Operating Partnership had 727,208 LTIP units outstanding.

Of the 727,208 LTIP units outstanding at December 31, 2022, 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.

These LTIP units will vest ratably on January 1, 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 $ 15.04 per unit, with an aggregate grant date fair value of $ 2.0 million.

As of December 31, 2023, the Operating Partnership had 858,484 LTIP units outstanding, of which 277,136 LTIP units have vested.

As of December 31, 2022, the Operating Partnership had 727,208 LTIP units outstanding, of which 127,111 LTIP units have vested.

Only vested LTIP units may be converted to OP units, which in turn can be tendered for redemption as described in Note 7.

For the years ended December 31, 2023, 2022 and 2021, the Company recognized approximately $ 3.4 million, $ 2.8 million and $ 2.4 million, respectively, in expense related to these LTIP units.

56 unchanged sentences

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, 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.

The common and preferred distributions declared on December 15, 2021 and paid on January 18, 2022 were treated as 2022 distributions for tax purposes.

The common and preferred distributions declared on December 15, 2022 and paid on January 17, 2023 were treated as 2022 distributions for tax purposes.

The common and preferred distributions declared on December 15, 2023 and paid on January 16, 2024 will be treated as 2023 distributions for tax purposes.

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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 six 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 three 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.

2 unchanged sentences

The incentive management fee is generally calculated as a percentage of hotel operating income after the Company has received a priority return on its investment in the hotel.

For the years ended December 31, 2022, 2021 and 2020, com bined base and incentive management fees were $ 39.6 million , $ 18.4 million and $ 9.4 million, respectively.

For the years ended December 31, 2023, 2022 and 2021, com bined base and incentive management fees we re $ 39.3 million, $ 39.6 million and $ 18.4 million, respectively.

Base and incentive management fees are included in other direct and indirect expenses in the Company's accompanying consolidated statements of operations and comprehensive income.

2 unchanged sentences

Restricted Cash

At December 31, 2022 and 2021, the Company had $ 11.2 million and $ 33.7 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.

At December 31, 2023 and 2022, the Company had $ 9.9 million and $ 11.2 million, respectively, in restricted cash, which consisted of funds held in cash management 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

1 unchanged sentence

Lease Properties Lease Type Lease Expiration Date

Restaurant at Southernmost Beach Resort Operating lease April 2029

Restaurant at Southernmost Beach Resort

Operating lease April 2029

Paradise Point Resort & Spa Operating lease May 2050

5 unchanged sentences

San Diego Mission Bay Resort Operating lease July 2068

1 Hotel San Francisco (formerly Hotel Vitale) Operating lease March 2070 (1)

1 Hotel San Francisco Operating lease March 2070 (1)

Hyatt Regency Boston Harbor Operating lease April 2077

1 unchanged sentence

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

Jekyll Island Club Resort and Restaurant Operating lease January 2089

Jekyll Island Club Resort and Restaurant

Operating lease January 2089

Hotel Zelos San Francisco Operating lease June 2097

41 unchanged sentences

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

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

Issuance of common shares for OP units redemption $ 3,515 $ — $ —

Issuance of common units in connection with hotel acquisition $ — $ 390 $ —

Issuance of preferred units in connection with hotel acquisition $ — $ 77,610 $ —

Accrued additions and improvements to hotel properties $ ( 2,759 ) $ 3,110 $ 9,164

Change in accrued additions and improvements to hotel properties $ 65 $ ( 2,759 ) $ 3,110

Right of use assets obtained in exchange for lease liabilities $ — $ 1,005 $ 65,599

Write-off of fully depreciated building, furniture, fixtures and equipment $ 7,267 $ 72,532 $ —

Write-off of deferred financing costs $ 19,595 $ 6,574 $ 1,979

Write-off of fully amortized deferred financing costs $ 1,199 $ 19,595 $ 6,574

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

14 unchanged sentences

The Westin San Diego Gaslamp Quarter — 25,537 86,089 6,850 33,554 25,537 117,161 9,332 152,030 46,902 105,128 1987 4/6/2011 1 - 40 years

Hotel Monaco Seattle — 10,105 38,888 2,073 7,514 10,105 45,764 2,711 58,580 16,970 41,610 1969 4/7/2011 3 - 40 years

Mondrian Los Angeles — 20,306 110,283 6,091 25,797 20,306 130,134 12,037 162,477 53,163 109,314 1959 5/3/2011 3 - 40 years

1 unchanged sentence

Hotel Zetta San Francisco — 7,294 22,166 290 18,153 7,294 35,507 5,102 47,903 16,700 31,203 1913 4/4/2012 3 - 40 years

Hotel Vintage Seattle — 8,170 23,557 706 8,986 8,170 29,941 3,308 41,419 12,577 28,842 1922 7/9/2012 3 - 40 years

W Los Angeles - West Beverly Hills — 24,403 93,203 3,600 33,122 24,403 119,507 10,418 154,328 49,034 105,294 1969 8/23/2012 3 - 40 years

5 unchanged sentences

The Nines, a Luxury Collection Hotel, Portland — 18,493 92,339 8,757 17,456 18,493 101,482 17,070 137,045 39,787 97,258 1909 7/17/2014 3 - 40 years

Hotel Colonnade Coral Gables, Autograph Collection — 12,108 46,317 1,271 19,875 12,122 59,954 7,495 79,571 21,620 57,951 1989 11/12/2014 2 - 40 years

Hotel Palomar Los Angeles Beverly Hills — — 90,675 1,500 15,243 — 100,806 6,612 107,418 31,210 76,208 1972 11/20/2014 3 - 40 years

1 unchanged sentence

LaPlaya Beach Resort & Club — 112,575 82,117 6,733 42,732 112,929 121,535 9,693 244,157 32,641 211,516 1968 5/21/2015 3 - 40 years

1 Hotel San Francisco — — 105,693 3,896 38,786 — 133,840 14,535 148,375 27,391 120,984 2005 11/30/2018 3 - 40 years

Chaminade Resort & Spa — 22,590 37,114 6,009 18,037 22,638 52,055 9,057 83,750 16,174 67,576 1985 11/30/2018 3 - 40 years

Pebblebrook Hotel Trust

5 unchanged sentences

Land Building and Improvements Furniture, Fixtures and Equipment Total Accumulated Depreciation Net Book Value Year of Original Construction Date of Acquisition Depreciation Life

Hotel Zoe Fisherman's Wharf — 29,125 90,323 2,500 16,987 29,125 105,221 4,589 138,935 26,339 112,596 1990 6/11/2015 2 - 40 years

1 Hotel San Francisco — — 105,693 3,896 38,458 — 133,733 14,314 148,047 19,992 128,055 2005 11/30/2018 3 - 40 years

Chaminade Resort & Spa — 22,590 37,114 6,009 17,151 22,590 51,531 8,743 82,864 12,524 70,340 1985 11/30/2018 3 - 40 years

Harbor Court Hotel San Francisco — — 79,009 6,190 1,932 — 80,156 6,975 87,131 15,290 71,841 1926/1991 11/30/2018 3 - 40 years

12 unchanged sentences

Hilton San Diego Gaslamp Quarter — 33,017 131,926 7,741 26,081 33,017 152,059 13,689 198,765 27,789 170,976 2000 11/30/2018 3 - 40 years

Solamar Hotel — — 74,768 8,830 37,713 23,472 82,569 15,270 121,311 16,016 105,295 2005 11/30/2018 3 - 40 years

Margaritaville Hotel San Diego Gaslamp Quarter — — 74,768 8,830 56,689 23,472 97,702 19,113 140,287 22,903 117,384 2005 11/30/2018 3 - 40 years

L'Auberge Del Mar — 33,304 92,297 5,393 15,285 33,316 103,565 9,398 146,279 19,899 126,380 1989 11/30/2018 3 - 40 years

San Diego Mission Bay Resort — — 80,733 9,458 28,234 95 100,399 17,931 118,425 29,141 89,284 1962 11/30/2018 3 - 40 years

The Heathman Hotel — 14,243 38,694 7,062 ( 6,981 ) 11,706 33,846 7,437 52,989 8,535 44,454 1927 11/30/2018 3 - 40 years

Southernmost Beach Resort — 90,396 253,954 8,676 37,903 91,859 280,837 18,233 390,929 46,767 344,162 1958-2008 11/30/2018 3 - 40 years

The Marker Key West Harbor Resort — 25,463 66,903 2,486 1,633 25,463 67,200 3,822 96,485 12,614 83,871 2014 11/30/2018 3 - 40 years

Hotel Chicago Downtown, Autograph Collection — 39,576 114,014 7,608 ( 55,897 ) 25,181 71,541 8,579 105,301 17,347 87,954 1998 11/30/2018 3 - 40 years

The Westin Michigan Avenue Chicago — 44,983 103,160 23,744 ( 14,645 ) 37,123 94,197 25,922 157,242 30,932 126,310 1963/1972 11/30/2018 3 - 40 years

Pebblebrook Hotel Trust

5 unchanged sentences

Land Building and Improvements Furniture, Fixtures and Equipment Total Accumulated Depreciation Net Book Value Year of Original Construction Date of Acquisition Depreciation Life

Southernmost Beach Resort — 90,396 253,954 8,676 22,093 90,420 269,301 15,398 375,119 37,221 337,898 1958-2008 11/30/2018 3 - 40 years

The Marker Key West Harbor Resort — 25,463 66,903 2,486 1,325 25,463 66,976 3,738 96,177 10,536 85,641 2014 11/30/2018 3 - 40 years

Hotel Chicago Downtown, Autograph Collection — 39,576 114,014 7,608 ( 16,394 ) 39,576 96,787 8,470 144,833 17,339 127,494 1998 11/30/2018 3 - 40 years

The Westin Michigan Avenue Chicago — 44,983 103,160 23,744 10,858 44,983 112,573 25,189 182,745 26,384 156,361 1963/1972 11/30/2018 3 - 40 years

Jekyll Island Club Resort — — 88,912 5,031 21,281 — 102,975 12,249 115,224 14,314 100,910 1886/1986 7/22/2021 2 - 40 years

8 unchanged sentences

(1) Disposals are reflected as reductions to cost capitalized subsequent to acquisition.

(2) Encumbrance on Margaritaville Hollywood Beach Resort is presented at face value, which excludes an unamortized loan discount and deferred financing costs of $ 1.6 million and $ 0.3 million, respectively, at December 31, 2022.

(2) Encumbrance on Margaritaville Hollywood Beach Resort is presented at face value, which excludes unamortized deferred financing costs of $ 2.1 million at December 31, 2023.

(3) Encumbrance on Estancia La Jolla Hotel & Spa is presented at face value, which excludes unamortized deferred financing costs of $ 0.2 million at December 31, 2023.

6 unchanged sentences

Balance at December 31, 2020 $ 6,459,745

Acquisitions 488,447

Capital expenditures 86,936

7 unchanged sentences

Balance at December 31, 2022 $ 6,729,381

Acquisitions 331,249

Capital expenditures 188,520

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