What changed in this filing

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Item 7. Management’s Discussion and Analysis

2025-02-26 compared with 2024-02-21 · 109 added, 86 removed, 170 unchanged (53% of the section changed)

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

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

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

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

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

International inbound travel is expected to continue to recover.

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

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

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

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

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

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

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

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

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

Our 2024 operating results showed continued improvement in group and business transient demand.

Leisure demand remained healthy and was boosted by customers returning to the cities for cultural, sporting and entertainment events.

Our recently redeveloped properties performed well, gaining market share versus the prior year.

Our properties in San Francisco, Los Angeles and Portland muted our overall performance, but strong markets such as San Diego, Boston, and Chicago helped to offset the weaker results.

Certain of our properties experienced demand headwinds in 2024, including our Los Angeles properties, which were affected by the entertainment industry strikes in 2023, which slowed production into 2024, and our LaPlaya Beach Resort & Club ("LaPlaya"), which was impacted by Hurricane Helene on September 26, 2024 and Hurricane Milton on October 9, 2024.

The damage to LaPlaya primarily impacted the ground floor of the Beach House, pool complex, landscaping and parking garage.

LaPlaya closed following Hurricane Milton to facilitate clean-up, repairs and a full assessment of damage.

The property's Bay Tower and Gulf Tower reopened November 1, 2024 and the upper floors of the Beach House reopened in January 2025.

The ground floor of the Beach House is expected to open in the second quarter of 2025.

In 2024, we recorded a loss of $10.0 million related to the damage from Hurricanes Helene and Milton, and we expect our property and flood insurance proceeds to cover the physical damage and business interruption losses from the hurricanes in excess of the applicable deductibles.

During 2024, we had the following transactions and events:

• We finalized a settlement agreement with our insurance carriers for damage caused by Hurricane Ian in 2022 totaling $146.5 million and recognized business interruption insurance income of $23.8 million and a gain on insurance settlement of $24.8 million.

• We repurchased 1,127,255 common shares for an aggregate purchase price of $15.0 million, or an average of $13.31 per share, under our common share repurchase program.

• We paid down $463.3 million of our term loans.

• We extended the maturity of $356.7 million of our Term Loan 2024 to January 2028 and extended $185.2 million of our Term Loan 2025 to January 2029.

• We issued $400.0 million aggregate principal amount of 6.375% senior notes due October 2029.

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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funds from operations ("FFO");

Adjusted FFO;

earnings before interest, income taxes, depreciation and amortization ("EBITDA");

and EBITDA for real estate ("EBITDA re " );

Adjusted EBITDA re ;

and hotel-level EBITDA (“Hotel EBITDA”).

We evaluate individual hotel and company-wide performance with comparisons to budgets, prior periods and competing properties.

ADR, occupancy and RevPAR may be impacted by macroeconomic factors as well as regional and local economies and events.

See Non-GAAP Financial Measures for further discussion of FFO, EBITDA and EBIDTA re .

See Non-GAAP Financial Measures for further discussion of FFO, Adjusted FFO, EBITDA, EBITDA re, Adjusted EBITDA re and Hotel EBITDA.

Hotel Operating Statistics

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Same-Property Total RevPAR $ 327.27 $ 320.61

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

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

The above table of hotel operating statistics includes information from all hotels owned as of December 31, 2024, except for LaPlaya Beach Resort & Club which was excluded for both years due to disruption from Hurricane Ian and Newport Harbor Island Resort which was excluded for the first, second and fourth quarters only due to its redevelopment.

Results of Operations

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Year-to-year comparisons of the 2023 financial information to the same information for 2022 are contained in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2023 filed with the SEC on February 21, 2024.

At December 31, 2023 and 2022, our consolidated financial statements included the operations of 46 and 51 hotel properties, respectively, which have been included in our results of operations during the respective periods since their dates of acquisition or through their dates of disposition.

At December 31, 2024 and 2023, our consolidated financial statements included the operations of 46 hotel properties, which have been included in our results of operations during the respective periods since their dates of acquisition or through their dates of disposition.

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

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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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Marina City Retail at Hotel Chicago Downtown, Autograph Collection Chicago, IL December 21, 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 year ended December 31, 2024 to the year ended December 31, 2023

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

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

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

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

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

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

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

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

Revenues — Total revenues increased by $33.4 million primarily due to increases at LaPlaya Beach Resort & Club, which was partially closed in 2023 due to Hurricane Ian, at Margaritaville Hotel San Diego Gaslamp Quarter and Hilton San Diego Gaslamp Quarter, which were both under renovation in 2023, and at The Westin Michigan Avenue Chicago.

This increase was partially offset by a $23.7 million decrease due to the sales of our non-comparable properties in 2023 and the decrease at Hyatt Centric Delfina Santa Monica as a result of disruption from the brand conversion in 2024.

Hotel operating expenses — Total hotel operating expenses increased by $19.9 million primarily due to increased operations at LaPlaya Beach Resort & Club, Margaritaville Hotel San Diego Gaslamp Quarter, The Westin Michigan Avenue Chicago and Hilton San Diego Gaslamp Quarter, as well as an increase in staffing, wage rates and benefits at our comparable properties due to higher demand levels.

This increase was partially offset by a $18.0 million decrease due to the sales of our non-comparable properties in 2023.

Depreciation and amortization — Depreciation and amortization expense decreased by $11.1 million due to Newport Harbor Island Resort's useful life reduction of its furniture, fixtures and equipment in 2023 due to its scheduled renovation in November 2023, as well as 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 $1.6 million primarily due to a $3.9 million increase in property insurance due to higher insurance premiums.

This increase was partially offset by a $2.1 million decrease in real estate taxes as a result of tax appeals and lower tax assessments.

General and administrative — General and administrative expense increased by $3.3 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 $81.8 million in 2023 related to three hotels and one retail component of a hotel property.

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

Impairment — In 2024, we recognized a loss of $10.0 million related to damage caused by Hurricane Helene and Hurricane Milton at LaPlaya Beach Resort & Club and an impairment loss of $38.1 million related to one hotel property.

In 2023 we recognized an impairment loss of $81.8 million on three hotels and one retail component of a hotel property.

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

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

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

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

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

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

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

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

Business interruption insurance income and gain on insurance settlement — We recognized business interruption insurance income and gain on insurance settlement in 2024 and 2023 of $48.6 million and $33.0 million, respectively, related to the settlement of property damage, business interruption and other costs sustained at LaPlaya Beach Resort & Club resulting from Hurricane Ian.

Other operating expenses — Other operating expenses decreased by $7.7 million primarily due to a decrease in hurricane related payroll costs and claims administration costs at LaPlaya Beach Resort & Club.

Interest expense — Interest expense decreased by $3.2 million due to pay-downs on our term loans during the first quarter of 2024, pay-downs of our senior notes during the fourth quarter of 2023 and interest being capitalized related to our Newport Harbor Island Resort redevelopment.

This decrease was partially offset by an increase resulting from costs associated with the extensions of the revolver and term loans and higher interest rates on our unhedged floating rate debt.

Other — Other decreased by $1.4 million due to a decrease in interest income earned as a result of lower excess cash balances in 2024.

Income tax (expense) benefit — In 2024, we recognized an income tax benefit due to a $31.7 million reduction in the valuation allowance, offset by $6.1 million of income tax expense.

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

Distributions to preferred shareholders — Distributions to preferred shareholders decreased by $1.1 million as result of the redemption of one million of our 5.70% Series H Cumulative Redeemable Preferred Shares in November 2023.

Issuance costs of redeemed preferred shares — Issuance costs of redeemed preferred shares decreased due to the redemption of one million of our 5.70% Series H Cumulative Redeemable Preferred Shares in November 2023.

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

Non-GAAP Financial Measures

Non-GAAP financial measures are measures of our historical or future financial performance that are different from measures calculated and presented in accordance with U.S.

We report FFO, EBITDA and EBITDA re , which are non-GAAP financial measures that we believe are useful to investors as key measures of our operating performance.

We report FFO, Adjusted FFO, EBITDA, EBITDA re , Adjusted EBITDA re and Hotel EBITDA, which are non-GAAP financial measures that we believe are useful to investors as key measures of our operating performance.

We calculate FFO in accordance with standards established by Nareit, formerly known as the National Association of Real Estate Investment Trusts, which defines FFO as net income (calculated in accordance with U.S.

GAAP), excluding real estate related depreciation and amortization, gains (losses) from sales of real estate, impairments of real estate assets (including impairment of real estate related joint ventures), the cumulative effect of changes in accounting principles and adjustments for unconsolidated partnerships and joint ventures.

Historical cost accounting for real estate assets implicitly assumes that the value of real estate assets diminishes predictably over time.

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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 years ended December 31, 2023, 2022 and 2021 (in thousands):

Adjusted FFO is defined as FFO, as adjusted for transaction costs, non-cash ground rent on operating and capital leases, management/franchise contract transition costs, interest expense adjustment for acquired liabilities, finance lease adjustment, non-cash amortization of acquired intangibles, gain on insurance settlement, early extinguishment of debt, amortization of share-based compensation expense, issuance costs of redeemed preferred shares, hurricane-related costs, non-cash interest expense and deferred tax asset provision (benefit).

We believe Adjusted FFO provides useful supplemental information regarding our ongoing operating performance.

The following table reconciles net income (loss) to FFO, FFO available to common share and unit holders and Adjusted FFO available to common share and unit holders for the years ended December 31, 2024, 2023 and 2022 (in thousands):

For the year ended December 31,

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

Impairment loss 81,788 89,633 14,856

Impairment 48,146 81,788 89,633

FFO $ 277,392 $ 217,441 $ 237,689

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FFO available to common share and unit holders $ 230,210 $ 177,531 $ 197,826

Transaction costs 44 688 430

Non-cash ground rent 7,476 7,608 7,737

Management/franchise contract transition costs 163 359 817

Interest expense adjustment for acquired liabilities 1,110 1,672 2,549

Finance lease adjustment 2,995 2,952 2,906

Non-cash amortization of acquired intangibles (1,927) (5,494) (2,149)

Gain on insurance settlement (24,824) — —

Early extinguishment of debt 3,781 1,035 7,995

Amortization of share-based compensation expense 13,602 12,545 11,349

Redemption of preferred shares — (8,396) (8,186)

Hurricane-related costs 183 6,598 249

Non-cash interest expense — — 49

Deferred tax provision (benefit) (28,483) — —

Adjusted FFO available to common share and unit holders $ 204,330 $ 197,098 $ 221,572

EBITDA is defined as earnings before interest, income taxes, depreciation and amortization.

The white paper issued by Nareit entitled “Earnings Before Interest, Taxes, Depreciation and Amortization for Real Estate” defines EBITDA re as net income or loss (computed in accordance with U.S.

GAAP), excluding interest expense, income tax, depreciation and amortization, gains or losses on the disposition of depreciated property (including gains or losses on change of control), impairment write-downs of depreciated property and of investments in unconsolidated affiliates caused by a decrease in value of depreciated property in the affiliate, and after comparable adjustments for our portion of these items related to unconsolidated affiliates.

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 years ended December 31, 2023, 2022 and 2021 (in thousands):

We calculate EBITDA re in accordance with standards established by Nareit.

EBITDA re is defined as EBITDA as adjusted for gain on sale of hotel properties and impairment loss.

Adjusted EBITDA re is defined as EBITDA re , as adjusted for transaction costs, non-cash ground rent on operating and capital leases, management/franchise contract transition costs, non-cash amortization of acquired intangibles, gain on insurance settlement, amortization of share-based compensation expense, and hurricane-related costs.

Hotel EBITDA is defined as Adjusted EBITDA re plus corporate general and administrative expenses less interest income, business interruption insurance income, and other.

We believe that EBITDA, EBITDA re , Adjusted EBITDA re and Hotel EBITDA 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, EBITDA re , Adjusted EBITDA re and Hotel EBITDA for the years ended December 31, 2024, 2023 and 2022 (in thousands):

For the year ended December 31,

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EBITDA $ 316,351 $ 282,684 $ 254,867

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

Impairment loss 81,788 89,633 14,856

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

Impairment 48,146 81,788 89,633

$ 364,497 $ 334,097 $ 338,306

FFO, EBITDA and EBITDA re do not represent cash generated from operating activities as determined by U.S.

Transaction costs 44 688 430

Non-cash ground rent 7,476 7,608 7,737

Management/franchise contract transition costs 163 359 817

Non-cash amortization of acquired intangibles (1,927) (5,494) (2,149)

Gain on insurance settlement (24,824) — —

Amortization of share-based compensation expense 13,602 12,545 11,349

Hurricane-related costs 183 6,598 249

Adjusted EBITDA re

$ 359,214 $ 356,401 $ 356,739

Business interruption insurance income

(23,751) (32,985) —

Corporate general and administrative and other 33,706 27,871 27,686

Hotel EBITDA $ 369,169 $ 351,287 $ 384,425

FFO, Adjusted FFO, EBITDA, EBITDA re , Adjusted EBITDA re and Hotel EBITDA do not represent cash generated from operating activities as determined by U.S.

GAAP and should not be considered as alternatives to U.S.

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GAAP cash flow from operating activities, as measures of liquidity.

In addition, FFO, EBITDA and EBITDA re are not indicative of funds available to fund cash needs, including the ability to make cash distributions.

In addition, FFO, Adjusted FFO, EBITDA, EBITDA re , Adjusted EBITDA re and Hotel EBITDA are not indicative of funds available to fund cash needs, including the ability to make cash distributions.

Critical Accounting Policies

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

As a result of this requirement, we cannot rely on retained earnings to fund long-term liquidity requirements such as hotel property acquisitions, redevelopements and repayments of long-term debt.

As a result of this requirement, we cannot rely on retained earnings to fund long-term liquidity requirements such as hotel property acquisitions, redevelopments and repayments of long-term debt.

As such, we expect to continue to raise capital through equity and debt offerings to fund our growth.

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

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

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

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

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

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

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

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

We are in compliance with all of our debt covenants.

Assuming we exercise all extension options available in our debt agreements, we expect that future principal and interest payments associated with our remaining debt obligations outstanding as of December 31, 2024 will be $2.6 billion through their maturity, with $19.2 million of principal and $95.3 million of interest payable on or before December 31, 2025.

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

We are in compliance with all covenants governing our existing credit facilities, term loans, senior note facilities and mortgage loans.

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

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

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

The increase in cash provided by operating activities in 2024 is primarily due to an increase in operations at our hotel properties that had been under renovation in 2023.

Investing Activities.

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

• During the year ended December 31, 2024, we invested $128.8 million in improvements to our hotel properties and received $36.8 million in property insurance proceeds.

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

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

Financing Activities.

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

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

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

• During the year ended December 31, 2024, we borrowed $400.0 million and repaid $465.4 million in other debt, repurchased $16.9 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 $52.0 million in preferred and common distributions and paid $22.1 million in financing costs.

• During the year ended December 31, 2023, we borrowed and repaid $10.0 million of revolving credit facility borrowings, borrowed $140.0 million and repaid $211.1 million in other debt, repurchased $92.8 million of common shares through our common share repurchase program and for tax withholding purposes in connection with vestings of share-based equity awards, repurchased $15.8 million of preferred shares through our preferred share repurchase program and paid $53.6 million in common and preferred distributions.

Capital Investments

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

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

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

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

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

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

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

For the year ended December 31, 2024, we invested $128.8 million in capital investments (or $104.0 million excluding the repair and remediation of LaPlaya Beach Resort & Club) to reposition and/or improve our properties, including the renovations of Newport Harbor Island Resort, Skamania Lodge, Estancia La Jolla Hotel & Spa, Southernmost Beach Resort and Hyatt Centric Delfina Santa Monica.

Depending on market conditions, and in some instances subject to approval from governmental authorities, we expect to invest an additional $65.0 million to $75.0 million in capital investments in 2025, which includes normal hotel capital refurbishments and repositioning projects and excludes capital expenditures related to the repair and remediation of LaPlaya Beach Resort & Club.

The following capital projects are expected to be completed in 2025:

• $16.0 million conversion of Hyatt Centric Delfina Santa Monica, which commenced in the fourth quarter of 2024 and is expected to be completed in the first quarter of 2025;

• The refurbishment of Paradise Point Resort & Spa's convention center space, and guestroom refurbishments at Chaminade Resort & Spa and Argonaut Hotel.

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.

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.

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

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

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.

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

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

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

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

Repurchased common shares cease to be outstanding and become authorized but unissued common shares.

During the year ended December 31, 2024, we repurchased 1,127,255 common shares for an aggregate purchase price of $15.0 million, or an average of approximately $13.31 per share.

As of December 31, 2024, $131.0 million of common 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.

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

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Preferred Share Repurchase Program

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

On February 17, 2023, our board of trustees authorized a share repurchase program of up to $100.0 million of preferred shares.

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.

During the year ended December 31, 2024, no preferred shares were repurchased under this program.

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

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

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

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

On February 21, 2023, the ATM program expired.

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

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

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

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

As of December 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 and a mortgage loan.

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

2 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 7. Management’s Discussion and Analysis