What changed in this filing

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Item 2. Management’s Discussion and Analysis

2024-04-23 compared with 2023-10-26 · 69 added, 113 removed, 174 unchanged (51% of the section changed)

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Except as otherwise required by the federal securities laws, we disclaim any obligations or undertaking to publicly release any updates or revisions to any forward-looking statement contained herein (or elsewhere) to reflect any change in our expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.

Operating performance during this recovery period has been led by strong leisure travel which has driven revenue at our resorts to pre-pandemic levels.

Corporate and group business are progressing steadily with our urban hotels, leading the portfolio's growth during 2023 with strong occupancy gains in San Francisco, Los Angeles, Washington D.C., Chicago and Portland.

The first-quarter operating results surpassed our outlook, largely driven by the continued recovery of our urban hotels.

Business demand, both group and transient, continued to recover, driving increased occupancy in Washington D.C., San Diego, San Francisco, Los Angeles and Boston.

Leisure demand remained roughly in-line with the prior year and our properties have continued to maintain their significant ADR premiums to 2019.

The ramp-up of LaPlaya Beach Resort & Club has been encouraging and we expect to reopen Newport Harbor Island Resort soon following its closure for several months for a comprehensive property-wide redevelopment and upgrading.

We expect these trends to continue if the overall economic recovery continues and as international inbound travel continues to return.

Recent inflation and the expectation of future inflation have caused labor and other costs to increase and have added additional uncertainty in consumer confidence and the continued growth in the economy.

The Company continues to complete repairs and rebuilding at LaPlaya Beach Resort & Club.

The property's Bay Tower and Gulf Tower have reopened, and other resort amenities have reopened throughout 2023.

The property's Beach House is expected to be substantially open in the first quarter of 2024, however, delays in receiving equipment, material and inspections may adversely impact this timeline.

During the nine months ended September 30, 2023, we had the following transactions:

• On February 22, 2023, we sold The Heathman Hotel in Portland, Oregon for $45.0 million.

• On March 17, 2023, we sold the retail component of The Westin Michigan Avenue Chicago in Chicago, Illinois for $27.3 million.

• On March 28, 2023, we sold Hotel Colonnade Coral Gables in Coral Gables, Florida for $63.0 million.

• On May 9, 2023, we sold Hotel Monaco Seattle in Seattle, Washington for $63.3 million.

• On May 24, 2023, we sold Hotel Vintage Seattle in Seattle, Washington for $33.7 million.

• We repurchased 6,498,901 common shares under our common share repurchase programs at an average price of $14.01 per share.

• We paid down $21.5 million and refinanced $140.0 million of our Margaritaville Hollywood Beach Resort ("Margaritaville") mortgage loan.

We have continued to focus on cost controls.

During the three months ended March 31, 2024, we had the following transactions:

• We repurchased 318,269 common shares for an aggregate purchase price of $5.0 million, or an average of $15.71 per share, under our existing common share repurchase program.

• We paid down $110.0 million of our term loans and extended the maturity of $356.7 million borrowed under Term Loan 2024 to January 2028.

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.

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Hotel Operating Statistics

The following table represents the key same-property hotel operating statistics for our hotels for the three and nine months ended September 30, 2023 and 2022:

For the three months ended September 30, For the nine months ended September 30,

2023 2022 2023 2022

The following table represents the key same-property hotel operating statistics for our hotels for the three months ended March 31, 2024 and 2023:

For the three months ended March 31,

Same-Property Occupancy 61.3 % 59.4 %

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Same-Property Total RevPAR $ 282.55 $ 279.05

The above table of hotel operating statistics includes information from all hotels owned as of September 30, 2023, for the three months ended September 30, 2023 and 2022, except for LaPlaya Beach Resort & Club due to its closure following Hurricane Ian.

The above table of hotel operating statistics includes information from all hotels owned as of September 30, 2023 for the nine months ended September 30, 2023 and 2022, except for LaPlaya Beach Resort & Club due to its closure following Hurricane Ian and 1 Hotel San Francisco for the first and second quarters only due to its closure for redevelopment.

The above table also includes Hotel Monaco Seattle and Hotel Vintage Seattle for the first quarter only due to their sales in May 2023, and Retail at The Westin Michigan Avenue Chicago for the first quarter only due to its sale in March 2023.

The above table of hotel operating statistics includes information from all hotels owned as of March 31, 2024, for the three months ended March 31, 2024 and 2023, except for LaPlaya Beach Resort & Club due to its closure following Hurricane Ian and Newport Harbor Island Resort due to its redevelopment.

Non-GAAP Financial Measures

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By excluding the effect of real estate related depreciation and amortization including our share of the joint venture depreciation and amortization, gains (losses) from sales of real estate and impairments of real estate assets (including impairment of real estate related joint ventures), all of which are based on historical cost accounting and which may be of lesser significance in evaluating current performance, we believe that FFO provides investors a useful financial measure to evaluate our operating performance.

The following table reconciles net income (loss) to FFO and FFO available to common share and unit holders for the three and nine months ended September 30, 2023 and 2022 (in thousands):

For the three months ended September 30, For the nine months ended September 30,

2023 2022 2023 2022

The following table reconciles net income (loss) to FFO and FFO available to common share and unit holders for the three months ended March 31, 2024 and 2023 (in thousands):

For the three months ended March 31,

Net income (loss) $ (27,520) $ (22,045)

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(Gain) loss on sale of hotel properties — (6,635)

Impairment loss 71,416 12,865 71,416 86,119

FFO $ 29,606 $ 29,604

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We believe that EBITDA and EBITDA re provide investors useful financial measures to evaluate our operating performance, excluding the impact of our capital structure (primarily interest expense) and our asset base (primarily depreciation and amortization).

The following table reconciles net income (loss) to EBITDA and EBITDA re for the three and nine months ended September 30, 2023 and 2022 (in thousands):

For the three months ended September 30, For the nine months ended September 30,

2023 2022 2023 2022

The following table reconciles net income (loss) to EBITDA and EBITDA re for the three months ended March 31, 2024 and 2023 (in thousands):

For the three months ended March 31,

Net income (loss) $ (27,520) $ (22,045)

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(Gain) loss on sale of hotel properties — (6,635)

Impairment loss 71,416 12,865 71,416 86,119

$ 56,156 $ 57,119

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Results of Operations

At September 30, 2023 and 2022, we had 47 and 51, respectively, properties and leasehold interests.

At March 31, 2024 and 2023, we had 46 and 49, respectively, properties and leasehold interests.

All properties owned during these periods have been included in our results of operations during the respective periods since their dates of acquisition or through their dates of disposition, as applicable.

Based on when a property was acquired or disposed, operating results for certain properties are not comparable for the three and nine months ended September 30, 2023 and 2022.

Based on when a property was acquired or disposed, operating results for certain properties are not comparable for the three months ended March 31, 2024 and 2023.

The properties listed in the table below are hereinafter referred to as "non-comparable properties" for the periods indicated and all other properties are referred to as "comparable properties":

Property Location Disposition Date

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

Sofitel Philadelphia at Rittenhouse Square Philadelphia, PA August 2, 2022

Hotel Spero San Francisco, CA August 25, 2022

Hotel Vintage Portland Portland, OR September 14, 2022

The Heathman Hotel Portland, OR February 22, 2023

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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

Property Location Acquisition Date

Inn on Fifth Naples, FL May 11, 2022

Newport Harbor Island Resort Newport, RI June 23, 2022

Comparison of the three months ended September 30, 2023 to the three months ended September 30, 2022

Revenues — Total revenues decreased by $20.9 million, of which $19.8 million was due to non-comparable properties.

The remaining decrease was primarily due to a decrease in revenue at LaPlaya Beach Resort & Club, which closed as a result of Hurricane Ian and has not fully reopened, and was substantially offset by 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.

Hotel operating expenses — Total hotel operating expenses decreased by $1.8 million as a result of a $11.4 million decrease due to our non-comparable properties, offset by a $9.6 million increase at our comparable properties as a result of an increase in staffing, wage rates and benefits to accommodate rising occupancy, particularly at our urban properties.

Depreciation and amortization — Depreciation and amortization expense increased by $2.9 million primarily due to the 2022 acquisitions of two non-comparable properties, partially offset by the 2022 and 2023 sales of our non-comparable properties.

Real estate taxes, personal property taxes, property insurance and ground rent — Real estate taxes, personal property taxes, property insurance and ground rent decreased by $1.7 million primarily due to a decrease in real estate taxes as a result of lower tax assessments.

General and administrative — General and administrative expenses increased by $1.3 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 $71.4 million in 2023 related to three hotels.

We recognized an impairment loss of $12.9 million in 2022 related to damage caused by Hurricane Ian at LaPlaya Beach Resort & Club and Southernmost Beach Resort.

Gain on sale of hotel properties — No gain on sale was recognized in 2023.

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

Business interruption insurance income — We recognized business interruption insurance income of $10.9 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 $2.8 million primarily due to preopening expenses incurred at Paradise Point Resort & Spa and Margaritaville Hotel San Diego Gaslamp Quarter (formerly Solamar Hotel) in addition 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 $6.0 million as a result of higher interest rates on floating rate debt.

Other — Other increased by $1.3 million due to an increase in interest income earned on excess cash.

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

Comparison of the nine months ended September 30, 2023 to the nine months ended September 30, 2022

Revenues — Total revenues increased by $13.6 million primarily due to an increase in revenue at many of our urban properties as business and group bookings have steadily increased as well as an increase in revenue at 1 Hotel San Francisco which was closed most of the first and second quarters of 2022 for renovations.

These increases were partially offset by a significant decrease in revenue at LaPlaya Beach Resort & Club, which closed as a result of Hurricane Ian and has not fully reopened and a $24.7 million decrease at the non-comparable properties.

Hotel operating expenses — Total hotel operating expenses increased by $55.8 million as a result of an increase in staffing, wage rates and benefits to accommodate rising occupancy, particularly at our urban properties.

In addition, hotel operating expenses increased at 1 Hotel San Francisco, which was closed most of the first and second quarters of 2022 for renovations.

Our overall increase in operating expenses was partially offset by a $17.6 million decrease due to our non-comparable properties.

Real estate taxes, personal property taxes, property insurance and ground rent — Real estate taxes, personal property taxes, property insurance and ground rent decreased by $6.7 million primarily due to a decrease in real estate taxes as a result of lower tax assessments and a $2.7 million decrease in real estate taxes due to our non-comparable properties.

General and administrative — General and administrative expenses increased by $3.1 million primarily due to an increase in professional fees and employee compensation expense.

Comparison of the three months ended March 31, 2024 to the three months ended March 31, 2023

Revenues — Total revenues increased by $8.4 million primarily due to an increase at LaPlaya Beach Resort & Club, which was partially closed in 2023 due to Hurricane Ian.

Repairs are substantially complete and the hotel continues to ramp up from its closure.

This increase was partially offset by an $11.4 million decrease due to the sales of our our non-comparable properties in 2023 as well as a decrease at Newport Harbor Island Resort due to its closure for redevelopment during the first quarter of 2024.

Hotel operating expenses — Total hotel operating expenses increased by $1.7 million primarily due to LaPlaya Beach Resort & Club's increased operations, as well as an increase in staffing, wage rates and benefits at our comparable properties.

This increase was partially offset by a $9.3 million decrease due to the sales of our non-comparable properties in 2023 as well as a decrease at Newport Harbor Island Resort due to its closure for redevelopment during the first quarter of 2024.

Depreciation and amortization — Depreciation and amortization expense decreased by $1.2 million primarily due to the sales of our non-comparable properties in 2023.

Real estate taxes, personal property taxes, property insurance and ground rent — Real estate taxes, personal property taxes, property insurance and ground rent increased by $3.5 million primarily due to a $2.0 million increase in property insurance due to higher insurance premium assessments and a $1.5 million increase in real estate taxes due to higher tax assessments.

General and administrative — General and administrative expenses increased by $2.2 million primarily due to an increase in 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 $71.4 million in 2023 related to three hotels.We recognized an impairment loss of $86.1 million in 2022 related to two hotels sold and related to damage caused by Hurricane Ian at LaPlaya Beach Resort & Club and Southernmost Beach Resort.

Gain on sale of hotel properties — We recognized a gain on sale of $30.2 million related to the sales of The Heathman Hotel, the retail component of The Westin Michigan Avenue Chicago, Hotel Colonnade Coral Gables, Hotel Monaco Seattle and Hotel Vintage Seattle in 2023.

We recognized a gain on sale of $6.2 million related to the sales of Sofitel Philadelphia at Rittenhouse Square and Hotel Vintage Portland 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 $5.8 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 $17.2 million as a result of higher interest rates on floating rate debt.

Other — Other increased by $2.4 million due to an increase in interest income earned on excess cash.

Gain on sale of hotel properties — We recognized a gain on sale of $6.6 million related to the sales of The Heathman Hotel, the retail component of The Westin Michigan Avenue Chicago and Hotel Colonnade Coral Gables in 2023.

Business interruption insurance income — We recognized business interruption insurance income in 2024 and 2023 related to partial settlements with our insurance carriers for lost income at LaPlaya Beach Resort & Club.

Other operating expenses — Other operating expenses decreased by $2.1 million primarily due to a decrease in payroll and claims administration costs at LaPlaya Beach Resort & Club.

Interest expense — Interest expense decreased by $1.0 million due to interest being capitalized related to our Newport Harbor Island Resort construction and our term loan pay-downs during the first quarter of 2024 which were partially offset by higher interest rates on our unhedged debt.

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All of our significant accounting policies, including certain critical accounting policies, are disclosed in our Annual Report on Form 10-K for the year ended December 31, 2023.

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New Accounting Pronouncements

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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 on or before September 30, 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 $829.0 million as of September 30, 2023, along with cash generated from ongoing operations will be sufficient to satisfy our short-term cash requirements.

As of September 30, 2023, we had no off-balance sheet arrangements.

Our primary cash requirements in the short term (i.e., those requiring cash on or before March 31, 2025) 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 $701.3 million as of March 31, 2024, along with cash generated from ongoing operations will be sufficient to satisfy our short-term cash requirements.

As of March 31, 2024, we had no off-balance sheet arrangements.

In order to maintain our qualification as a REIT, we must pay dividends to our shareholders of at least 90% of our taxable income.

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Our outstanding debt consisted of floating- and fixed-rate unsecured term loans, convertible senior notes, senior unsecured notes and mortgage loans with varying maturities.

Our total debt had an aggregate face value of $2.4 billion as of September 30, 2023, as summarized below:

September 30, 2023

Our total debt had an aggregate face value of $2.2 billion as of March 31, 2024, as summarized below:

March 31, 2024

(in thousands)

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Debt to our consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

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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 September 30, 2023 will be $2.7 billion through their maturity, with $49.5 million of principal and $118.2 million of interest payable on or before September 30, 2024.

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

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 March 31, 2024 will be $2.6 billion through their maturity, with $45.4 million of principal and $101.6 million of interest payable on or before March 31, 2025.

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

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

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

As of September 30, 2023, none of the mortgage loans was in a cash trap.

As of March 31, 2024, none of the mortgage loans was in a cash trap.

Hotel, ground and finance lease obligations

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

Future fixed minimum payments associated with our hotel, ground and finance leases total $1.8 billion as of September 30, 2023, with $21.0 million payable on or before September 30, 2024.

Future fixed minimum payments associated with our hotel, ground and finance leases total $1.8 billion as of March 31, 2024, with $21.6 million payable on or before March 31, 2025.

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Purchase commitments

As of September 30, 2023, we had $8.1 million of outstanding purchase commitments, all of which will be paid on or before September 30, 2024.

As of March 31, 2024, we had $8.6 million of outstanding purchase commitments, all of which will be paid on or before March 31, 2025.

These purchase commitments represent outstanding purchase orders and contracts that have been executed for capital and renovation projects at our properties.

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Preferred dividends and Series Z operating partnership units

We expect to pay aggregate annual dividends and distributions of approximately $48.6 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 September 30, 2024 and in future years until the shares/units are redeemed.

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 March 31, 2025 and in future years until the shares/units are redeemed.

For further discussion on our preferred shares and preferred units, see Note 7.

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Operating Activities.

Our net cash provided by (used in) operating activities was $202.3 million for the nine months ended September 30, 2023, and $254.4 million for the nine months ended September 30, 2022.

Our net cash provided by (used in) operating activities was $46.0 million for the three months ended March 31, 2024, and $46.2 million for the three months ended March 31, 2023.

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

The decrease in cash provided by (used in) operations in 2023 as compared to 2022 is primarily due to the disposition of four hotel properties and one retail component of a hotel property in 2023.

Investing Activities.

Our net cash provided by (used in) investing activities was $96.3 million for the nine months ended September 30, 2023, and $(66.6) million for the nine months ended September 30, 2022.

Our net cash provided by (used in) investing activities was $(38.5) million for the three months ended March 31, 2024, and $105.2 million for the three months ended March 31, 2023.

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 nine months ended September 30, 2023, we invested $140.1 million in improvements to our hotel properties;

received $224.4 million from the sale of four hotel properties and one retail component of a hotel property;

• During the three months ended March 31, 2024, we invested $49.5 million in improvements to our hotel properties and received $11.5 million in property insurance proceeds.

• During the three months ended March 31, 2023, we invested $34.5 million in improvements to our hotel properties;

received $131.9 million from the sales of two hotel properties and one retail component of a hotel property;

and received $8.4 million in property insurance proceeds.

• During the nine months ended September 30, 2022, we invested $68.3 million in improvements to our hotel properties;

received $248.9 million from the sales of four hotel properties;

and purchased two hotel properties using cash of $247.2 million.

Financing Activities.

Our net cash provided by (used in) financing activities was $(159.2) million for the nine months ended September 30, 2023, and $(69.9) million for the nine months ended September 30, 2022.

Our net cash provided by (used in) financing activities was $(136.2) million for the three months ended March 31, 2024, and $(57.1) million for the three months ended March 31, 2023.

Fluctuations in our net cash provided by (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.

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• During the nine months ended September 30, 2023, we repurchased $92.8 million of common shares through our common share repurchase program and for tax withholding purposes in connection with vestings of share-based equity awards;

repaid $21.5 million of other debt, net of refinancing proceeds;

and paid $40.2 million in preferred and common distributions.

• During the nine months ended September 30, 2022, we borrowed and repaid $180.0 million of revolving credit facility borrowings;

repaid $27.7 million in other debt;

• During the three months ended March 31, 2024, we repaid $110.3 million in other debt;

repurchased $6.9 million of common shares through our common share repurchase program and for tax withholding purposes in connection with vestings of share-based equity awards;

paid $5.5 million in deferred financing costs and paid $13.0 million in preferred and common distributions.

• During the three months ended March 31, 2023, we repurchased $42.7 million of common shares through our common share repurchase program and for tax withholding purposes in connection with vestings of share-based equity awards;

and paid $13.4 million in preferred and common distributions.

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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 nine months ended September 30, 2023, we invested $140.1 million in capital investments to reposition and improve our properties, including the renovations of Hilton San Diego Gaslamp Quarter, Jekyll Island Club Resort, Estancia La Jolla Hotel & Spa, Newport Harbor Island Resort, Skamania Lodge and Margaritaville Hotel San Diego Gaslamp Quarter (formerly Solamar Hotel), as well as capital expenditures related to the repair and remediation of LaPlaya Beach Resort & Club and Southernmost Beach Resort, which were damaged in Hurricane Ian.

Depending on market conditions, and in some instances subject to approval from governmental authorities, we expect to invest a total of $145.0 million to $155.0 million in capital investments in 2023, which includes redevelopment and repositioning projects at Margaritaville Hotel San Diego Gaslamp Quarter (formerly Solamar Hotel), Hilton San Diego Gaslamp Quarter, Jekyll Island Club Resort, Estancia La Jolla Hotel & Spa, Newport Harbor Island Resort and Skamania Lodge, and excludes capital expenditures related to the repair and remediation of LaPlaya Beach Resort & Club which was damaged in Hurricane Ian.

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

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For the three months ended March 31, 2024, we invested $49.5 million in capital investments to reposition and improve our properties, including the renovations of Newport Harbor Island Resort, Estancia La Jolla Hotel & Spa, Jekyll Island Club Resort, Southernmost Beach Resort and Skamania Lodge.

Depending on market conditions, and in some instances subject to approval from governmental authorities, we expect to invest a total of $85.0 million to $90.0 million in capital investments in 2024, which includes normal hotel capital refurbishments as well as redevelopment and repositioning projects at Newport Harbor Island Resort, Estancia La Jolla Hotel & Spa and Skamania Lodge.

Common Share Repurchase Programs and Preferred Share Repurchase Program

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 have repurchased common shares from time to time in transactions on the open market or by private agreement.

As of September 30, 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.

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

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

As of June 30, 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 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.

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

As of September 30, 2023, $146.0 million of common shares remained available for repurchase under this program.

During the nine months ended September 30, 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.

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

During the three months ended March 31, 2024, we repurchased 318,269 common shares for an aggregate purchase price of $5.0 million, or an average of approximately $15.71 per share.

As of March 31, 2024, $141.0 million of common shares remained available for repurchase under this program.

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.

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Preferred Share Repurchase Program

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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”).

On February 17, 2023, our Board of Trustees authorized a repurchase program of up to $100.0 million of 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 is $715.0 million.

During the nine months ended September 30, 2023, no Preferred Shares were repurchased under this program.

During the three months ended March 31, 2024, no preferred shares were repurchased under this program.

As of March 31, 2024, $84.2 million of preferred shares remained available for repurchase under this program.

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.

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

As of September 30, 2023, 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.

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As of March 31, 2024, we have interest rate swap agreements with an aggregate notional amount of $855.0 million to hedge variable interest rates on our unsecured term loans.

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

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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-Q

Item 2. Management’s Discussion and Analysis