What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2025-02-26 compared with 2024-02-21 · 239 added, 200 removed, 1147 unchanged (28% of the section changed)

49 unchanged sentences

(incorporated by reference to Exhibit 4.2 to Pebblebrook Hotel Trust's Current Report on Form 8-K filed with the SEC on December 16, 2020 (File No.

Indenture, dated October 3, 2024, among Pebblebrook Hotel, L.P., PEB Finance Corp., Pebblebrook Hotel Trust, the subsidiary guarantors party thereto and UMB Bank, National Association, as trustee (incorporated by reference to Exhibit 4.1 to Pebblebrook Hotel Trust's Current Report on Form 8-K filed with the SEC on October 3, 2024 (File No.

Form of note of 6.375% Senior Notes due 2029 (included in Indenture in Exhibit 4.1) (incorporated by reference to Exhibit 4.2 to Pebblebrook Hotel Trust's Current Report on Form 8-K filed with the SEC on October 3, 2024 (File No.

Pebblebrook Hotel Trust 2009 Equity Incentive Plan, as amended and restated effective July 10, 2012 (incorporated by reference to Exhibit 10.1 to Pebblebrook Hotel Trust's Quarterly Report on Form 10-Q filed with the SEC on August 2, 2012 (File No.

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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.

Second Amendment to Fifth Amended and Restated Credit Agreement, dated as of September 18, 2024, among Pebblebrook Hotel, L.P., as the borrower, Pebblebrook Hotel Trust, as the parent REIT and a guarantor, 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 September 23, 2024 (File No.

Third Amendment to Fifth Amended and Restated Credit Agreement, dated as of November 1, 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 November 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.

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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 Performance Unit Award Agreement for Executive Officers (incorporated by reference to Exhibit 10.3 to Pebblebrook Hotel Trust's Current Report on Form 8-K filed with the SEC on February 22, 2024 (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.

Form of LTIP Class B Unit Vesting 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 22, 2024 (File No.

Form of Restricted Share Unit Award Agreement (time-based vesting) 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 22, 2024 (File No.

Pebblebrook Hotel Trust Insider Trading Policy

List of Subsidiaries of Pebblebrook Hotel Trust.

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

Clawback Policy.

Clawback Policy (incorporated by reference to Exhibit 97.1 to Pebblebrook Hotel Trust’s Annual Report on Form 10-K filed with the SEC on February 21, 2024 (File No.

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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INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Reports of Independent Registered Public Accounting Firm F- 2

Consolidated Balance Sheets F- 5

Consolidated Statements of Operations and Comprehensive Income F- 6

Consolidated Statements of Equity F- 8

Consolidated Statements of Cash Flows F- 11

Notes to Consolidated Financial Statements F- 12

Schedule III - Real Estate and Accumulated Depreciation F- 35

Reports of Independent Registered Public Accounting Firm

Consolidated Balance Sheets

Consolidated Statements of Operations and Comprehensive Income

Consolidated Statements of Equity

Consolidated Statements of Cash Flows

Notes to Consolidated Financial Statements

Schedule III - Real Estate and Accumulated Depreciation

Report of Independent Registered Public Accounting Firm

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We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated February 26, 2025 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

Change in Accounting Principle

As discussed in Note 5 to the consolidated financial statements, the Company has changed its method of accounting for convertible debt as of January 1, 2021 due to the adoption of ASU 2020-06.

Basis for Opinion

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The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Assessment of estimated holding periods for investments in hotel properties

Assessment of estimated hold periods for investments in hotel properties

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 $5,319 million, or 93% of total assets as of December 31, 2024.

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

A high degree of subjective and complex auditor judgment was required to assess the events or changes in circumstances used by the Company to evaluate the estimated holding periods.

A shortened estimated holding period could indicate a potential impairment.

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

We evaluated the design and tested the operating effectiveness of internal controls related to the Company’s determination of the estimated holding periods for hotel properties.

We evaluated the relevant events or changes in circumstances that the Company used to evaluate its estimated holding periods by:

• inspecting documents, such as meeting minutes of the board of trustees, to assess the likelihood that a property will be sold significantly before the end of its previously estimated holding periods

• reading certain publicly available information to identify information regarding potential sales of the Company’s hotel properties

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

Subjective auditor judgment was required to assess the events or changes in circumstances used by the Company to evaluate the estimated hold periods.

A shortened estimated hold period could indicate a potential impairment.

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

We evaluated the design and tested the operating effectiveness of internal controls related to the Company’s determination of the estimated hold periods for certain hotel properties.

We evaluated the relevant events or changes in circumstances that the Company used to evaluate its estimated hold periods by:

• inspecting documents, such as meeting minutes of the board of trustees and management's assessment of properties with potential shortened hold periods, to assess the likelihood that a property will be sold significantly before the end of its previously estimated hold period

• inspecting listings from external sources of hotel properties for sale by the Company

• inquiring of Company officials, including those in the organization who are responsible for, and have authority over, disposition activities

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Investment in hotel properties, net $ 5,319,029 $ 5,490,776

Hotel held for sale — 44,861

Cash and cash equivalents 206,650 183,747

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Accrued interest 11,549 6,830

Liabilities related to hotel held for sale — 428

Distribution payable 11,865 11,862

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Shareholders’ equity:

Preferred shares of beneficial interest, $ .01 par value (liquidation preference $ 690,000 and $ 715,000 at December 31, 2023 and December 31, 2022, respectively), 100,000,000 shares authorized;

27,600,000 shares issued and outstanding at December 31, 2023 and 28,600,000 shares issued and outstanding at December 31, 2022

Preferred shares of beneficial interest, $ .01 par value (liquidation preference $ 690,000 at December 31, 2024 and 2023), 100,000,000 shares authorized;

27,600,000 shares issued and outstanding at December 31, 2024 and 2023

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

120,191,349 shares issued and outstanding at December 31, 2023 and 126,345,293 shares issued and outstanding at December 31, 2022

119,285,394 and 120,191,349 shares issued and outstanding at December 31, 2024 and December 31, 2023, respectively

Additional paid-in capital 4,072,265 4,078,912

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

Business interruption insurance income ( 32,985 ) — —

Business interruption insurance income and gain on insurance settlement ( 48,574 ) ( 32,985 ) —

Other operating expenses 4,913 12,602 5,352

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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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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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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

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

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 — — 47,497 1 744 — — 745 — 745

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Depreciation and amortization 229,531 240,645 239,583

Benefit for deferred income taxes ( 28,483 ) — —

Share-based compensation 13,602 12,545 11,350

Gain on insurance settlement ( 24,824 ) — —

Amortization of deferred financing costs, non-cash interest and other amortization 14,329 12,124 13,453

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Financing activities:

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

Payment of offering costs — common and preferred shares — ( 123 ) ( 15,947 )

Payment of deferred financing costs ( 22,104 ) ( 2,710 ) ( 12,415 )

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Repayments of debt ( 465,432 ) ( 211,088 ) ( 1,434,956 )

Purchases of capped calls for convertible senior notes — — ( 20,975 )

Repurchases of common shares ( 16,851 ) ( 92,753 ) ( 70,724 )

9 unchanged sentences

PEBBLEBROOK HOTEL TRUST

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Pebblebrook Hotel Trust (the "Company") is an internally managed hotel investment company, formed as a Maryland real estate investment trust in October 2009 to opportunistically acquire and invest in hotel properties located primarily in major U.S.

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The state of the overall economy can significantly impact hotel operational performance and thus the Company's financial position.

It is uncertain what the future affects of the COVID-19 pandemic will have on the overall economy or travel.

In addition, the rise in inflation and corresponding increase in interest rates may also impact the overall economy.

A decline in travel or a significant increase in costs may impact the Company's cash flow and ability to service debt or meet other financial obligations.

Global events, as well as national and local events, may adversely impact travel trends and the operations of the Company's hotels.

In addition, inflation and changing interest rates may impact the overall economy and the availability of debt, which may impact the Company's financial position.

A decline in travel or a significant increase in costs may also adversely impact the Company's cash flow and ability to service debt or meet other financial obligations.

Fair Value Measurements

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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.

Events or circumstances that may cause a review include, but are not limited to, when a hotel property experiences a current or projected loss from operations, when it becomes more likely than not that a hotel property will be sold before the end of its useful life, adverse changes in the demand for lodging at the properties due to declining national or local economic conditions and/or new hotel construction in markets where the hotels are located.

Events or circumstances that may cause a review include, but are not limited to, when a hotel property experiences a current or projected loss from operations or when it becomes more likely than not that a hotel property will be sold before the end of its useful life.

When such conditions exist, the Company performs an analysis to determine if the estimated undiscounted future cash flows from operations and the proceeds from the ultimate disposition of a hotel exceed its carrying value.

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The Company has adopted an equity incentive plan that provides for the grant of common share options, share awards, share appreciation rights, performance units and other equity-based awards.

Equity-based compensation is measured at the fair value of the award on the date of grant and recognized as an expense on a straight-line basis over the vesting period.

Share-based compensation is measured at the fair value of the award on the date of grant and recognized as an expense on a straight-line basis over the vesting period.

Share-based compensation awards that contain a performance condition are reviewed at least quarterly to assess the achievement of the performance condition.

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Segment Information

The Company separately evaluates the performance of each of its hotel properties.

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

The Company separately evaluates the performance of each of its hotel properties and considers each to be an operating segment.

However, because all of the hotels have similar economic characteristics, facilities and services, the hotel properties have been aggregated into a single operating segment for reporting purposes.

Investments in Unconsolidated Entities

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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.

The Company's adoption of ASU 2023-07 during the fourth quarter of 2024 did not have a material impact on its consolidated financial statements and disclosures.

Operating Segment Information for the information provided pursuant to this standard.

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

3 unchanged sentences

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 and does not expect it to have a material impact on its consolidated financial statements and disclosures.

Stock Compensation

In March 2024, the FASB issued ASU 2024-01, Compensation—Stock Compensation (Topic 718):

Scope Application of Profits Interest and Similar Awards (“ASU 2024-01”), to clarify the scope application of profits interest and similar awards by adding illustrative guidance in ASC 718, Compensation—Stock Compensation ("ASC 718").

ASU 2024-01 clarifies how to determine whether profits interest and similar awards should be accounted for as a share-based payment arrangement (ASC 718) or as a cash bonus or profit-sharing arrangement (ASC 710, Compensation—General, or other guidance ) and applies to all reporting entities that account for profits interest awards as compensation to employees or non-employees.

In addition to adding the illustrative guidance, ASU 2024-01 modified the language in paragraph 718-10-15-3 to improve its clarity and operability without changing the guidance.

ASU 2024-01 is effective for fiscal years beginning after December 15, 2024, including interim periods within those annual periods.

Early adoption is permitted.

The amendments should be applied either retrospectively to all prior periods presented in the financial statements, or prospectively to profits interest and similar awards granted or modified on or after the adoption date.

The Company is currently assessing the impacts of adopting ASU 2024-01 and does not expect it to have a material impact on its consolidated financial statements and disclosures.

Disaggregation of Income Statement Expenses

In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses (“ASU 2024-03”).

ASU 2024-03 require public entities to disclose specified information about certain costs and expenses.

ASU 2024-03 is effective for annual reporting period beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted.

The amendments should be applied either (1) prospectively to financial statements issued for reporting periods after the effective date of this Update or (2) retrospectively to any or all prior periods presented in the financial statements.

The Company is currently assessing the impacts of adopting ASU 2024-03 on its consolidated financial statements and disclosures.

Induced Conversions of Convertible Debt Instruments

In November 2024, the FASB issued ASU 2024-04, Debt—Debt with Conversion and Other Options (Subtopic 470-20):

Induced Conversions of Convertible Debt Instruments ("ASU 2024-04").

ASU 2024-04 clarifies the requirements for determining whether certain settlements of convertible debt instruments should be accounted for as induced conversions rather than as debt extinguishments.

ASU 2024-04 is effective for annual reporting periods beginning after December 15, 2025, and interim periods within those annual reporting periods, with early adoption permitted.

The amendments should be applied either prospectively or retrospectively.

The Company is currently assessing the impacts of adopting ASU 2024-03 on its consolidated financial statements and disclosures.

Acquisition and Disposition of Hotel Properties

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.

This transaction was funded with cash on hand, the issuance of 16,291 common units of limited partnership interest in the Operating Partnership and 3,104,400 preferred units of the Operating Partnership designated as 6.0 % Series Z Preferred Units.

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.

The following table summarizes disposition transactions during the years ended December 31, 2023 and 2022 (in thousands):

The Company did not acquire any hotel properties during the years ended December 31, 2024 or 2023.

The Company did not dispose of any hotel properties during the year ended December 31, 2024.

The following table summarizes disposition transactions during the year ended December 31, 2023 (in thousands):

Hotel Property Name Location Sale Date Sale Price

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2023 Total $ 330,750

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

Sofitel Philadelphia at Rittenhouse Square Philadelphia, PA August 2, 2022 80,000

Hotel Spero San Francisco, CA August 25, 2022 71,000

Hotel Vintage Portland Portland, OR September 14, 2022 32,900

2022 Total $ 260,900

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.

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

There was no impact for the year ended December 31, 2024.

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.

This hotel was designated as held for sale as it met the held for sale criteria, and as a result, the Company recorded an impairment to reduce the carrying value of the property.

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.

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

Investment in Hotel Properties

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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.

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

Inn on Fifth and Southernmost did not incur significant damage or disruption.

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

LaPlaya began reopening in stages during 2023, as its buildings and facilities were repaired, and its repairs were substantially complete in the first quarter of 2024.

The Company’s insurance policies provided coverage for property damage, business interruption and other costs that were incurred relating to damages sustained, in excess of the applicable deductibles.

For the year ended December 31, 2022, the Company recognized a loss of $ 7.9 million for damage to LaPlaya and Southernmost, which is included in impairment on the Company’s accompanying consolidated statement of operations and comprehensive income.

In December 2024, the Company finalized a settlement agreement for the Hurricane Ian claim with the insurance carriers totaling $ 146.5 million, and for the years ended December 31, 2024, 2023, and 2022, recognized $ 48.6 million, $ 33.0 million and zero , respectively, of business interruption insurance income and gain on insurance settlement.

For the years ended December 31, 2024, 2023, and 2022, the Company incurred $ 0.2 million, $ 6.6 million, and $ 0.2 million, respectively, of non-reimbursable insurance costs related to payroll, repair and claims administration which is included in other operating expenses in the Company's accompanying consolidated statements of operations and comprehensive income.

Hurricane Helene and Hurricane Milton

On September 26, 2024, LaPlaya was impacted by Hurricane Helene and on October 9, 2024, was again impacted by Hurricane Milton.

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

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

Two of its three guestroom buildings, Gulf Tower and Bay Tower, reopened on November 1, 2024, and the upper floors of the Beach House reopened in January 2025.

The Company’s insurance policies provide coverage for property damage, business interruption and other costs that are incurred relating to damage sustained, in excess of the applicable deductibles.

For the year ended December 31, 2024, the Company recognized a loss of $ 10.0 million for damage to LaPlaya, which is included in impairment in the Company’s accompanying consolidated statement of operations and comprehensive income.

The Company recorded an insurance receivable for the remediation costs incurred and the estimate of the book value of the property and equipment written off in excess of the applicable deductibles.

Through December 31, 2024, the Company received a total of $ 9.6 million in preliminary advances from the insurance providers.

The Company is continuing to evaluate the financial impact of Hurricanes Helene and Milton and its ability to recover, through insurance policies, any loss due to business interruption or damage to LaPlaya.

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 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.

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

For the year ended December 31, 2024, the Company recognized an impairment loss of $ 38.1 million related to one hotel property.

For the year ended December 31, 2023, the Company recognized an impairment loss of $ 81.8 million related to three hotels and one retail component of a hotel property.

For the year ended December 31, 2022, the Company recognized an impairment loss of $ 81.7 million related to three hotel properties.

The impairment losses were 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.

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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.

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 (the "Credit Agreement").

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.

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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.

This extended indebtedness is referred to as Term Loan 2028.

In connection with the extension, the Company also repaid $ 60.0 million of its borrowings under Term Loan 2024 and $ 50.0 million of its borrowings under Term Loan 2025 with available cash.

On October 3, 2024, the Company issued $ 400.0 million aggregate principal amount of its 6.375 % senior notes due October 15, 2029.

This issuance is referred to as Senior Notes 2029.

The net proceeds were approximately $ 390.0 million after deducting discounts and offering expenses paid by the Company, of which $ 353.3 million was used to repay all $ 43.3 million of its borrowings under Term Loan 2024, $ 210.0 million of its borrowings under Term Loan 2025 and $ 100.0 million of its borrowings under Term Loan 2027.

On November 1, 2024, the Company entered into the Third Amendment to the Credit Agreement which extended the maturity date of $ 185.2 million borrowed under Term Loan 2025 to January 2029.

This indebtedness is referred to as Term Loan 2029.

The Company also extended the maturity date of $ 602.0 million of its senior unsecured revolving credit facility from October 2026 to October 2028, with the option to extend the maturity date for two six-month periods.

The Company's debt consisted of the following as of December 31, 2024 and 2023 (dollars in thousands):

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October 2026 /

October 2028 $ — $ —

PHL unsecured credit facility - (1)

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October 2027 360,000 460,000

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

Term Loan 2028 3.88 % (1)

January 2028 356,652 —

Term Loan 2029 5.16 % (1)

January 2029 185,217 —

Unsecured term loan principal $ 916,652 $ 1,380,000

Convertible senior notes principal 1.75 % December 2026 $ 750,000 $ 750,000

Senior unsecured notes

Series A Notes - (3)

December 2023 — 47,600

Series B Notes 4.93 % December 2025 2,400 2,400

Senior Notes 2029 6.38 % October 2029 400,000 —

Senior unsecured notes principal $ 402,400 $ 2,400

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Interest rate at December 31, 2024 gives effect to interest rate hedges.

(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 %.

(2) $ 48.0 million of the $ 650.0 million senior unsecured revolving credit facility matures in October 2026, with no option to extend the maturity date, and the remaining $ 602.0 million matures in October 2028, with 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) This loan bears interest at a floating rate equal to daily SOFR plus a spread of 3.75 %.

The interest rate at December 31, 2024 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.

(4) On January 3, 2024, the Company extended the maturity date of $ 356.7 million borrowed under Term Loan 2024 to January 2028.

This indebtedness is shown above as Term Loan 2028.

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

The remaining balance of Term Loan 2024 was repaid in October 2024 with proceeds from the Senior Notes 2029 offering.

(5) On January 3, 2024, the Company repaid $ 50.0 million of its borrowings under Term Loan 2025 with available cash.

On October 3, 2024, the Company repaid $ 210.0 million of its borrowings under Term Loan 2025 with proceeds from the Senior Notes 2029 offering.

On November 1, 2024, the Company extended the maturity date of $ 185.2 million borrowed under Term Loan 2025 to January 2029.

This indebtedness is shown above as Term Loan 2029.

(6) On October 3, 2024, the Company repaid $ 100.0 million of its borrowings under Term Loan 2027 with proceeds from the Senior Notes 2029 offering.

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) 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 $ 650.0 million senior unsecured revolving credit facility provided for in the Credit Agreement matures as follows:

$ 48.0 million in October 2026, with no option to extend the maturity date, and $ 602.0 million in October 2028, with 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.

All borrowings under this 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.

As of December 31, 2023, the Company had no outstanding borrowings, $ 13.6 million of outstanding letters of credit and a borrowing capacity of $ 636.4 million remaining on its senior unsecured revolving credit facility.

The Company is required to pay an unused commitment fee at an annual rate of 0.20 % or 0.30 % of the unused portion of the revolving credit facility, depending on the amount of borrowings outstanding.

As of December 31, 2024, the Company had no outstanding borrowings, $ 7.4 million of outstanding letters of credit and a borrowing capacity of $ 642.6 million remaining on the senior unsecured revolving credit facility.

The Company is required to pay an unused commitment fee at an annual rate of 0.20 % or 0.30 % of the unused portion of the senior unsecured revolving credit facility, depending on the amount of borrowings outstanding.

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.

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As of December 31, 2024, 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.

On November 27, 2024, PHL amended the agreement governing the PHL Credit Facility to extend the maturity to October 2028.

The PHL Credit Facility has substantially similar terms as the Company's senior unsecured revolving credit facility.

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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 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.

The term loan facilities provided for in the Credit Agreement 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.

The margins for term loans range in amount from 1.40 % to 2.45 % for SOFR-based loans and 0.40 % to 1.45 % for Base Rate-based loans, depending on the Company's leverage ratio.

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

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

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

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

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The Convertible Notes will mature on December 15, 2026.

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

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

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

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

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

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

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

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

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

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Senior Unsecured Notes

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 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") and $ 400.0 million of senior unsecured notes outstanding bearing a fixed interest rate of 6.375 % per annum and maturing in October 2029 (the "Senior Notes 2029").

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.

The indenture governing the Senior Notes 2029 contains covenants that are customary for similar securities and requires the Company to maintain total unencumbered assets as of the end of each fiscal quarter of not less than 150 % of total unsecured indebtedness calculated on a consolidated basis.

As of December 31, 2024, the Company was in compliance with all such covenants.

Mortgage Loans

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

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").

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The loan matures on September 1, 2028.

On September 7, 2023, the Company entered into a $ 140.0 million first-lien mortgage on the leasehold interest of Margaritaville Hollywood Beach Resort ("Margaritaville"), which 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.

The Company entered into an interest rate swap agreement to fix the SOFR rate on this mortgage loan.

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

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

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Total interest expense $ 112,432 $ 115,660 $ 99,988

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

The estimated fair value of the Company’s fixed rate debt (unsecured senior notes, convertible senior notes and the Estancia mortgage loan) as of December 31, 2023 and 2022 was $ 686.3 million and $ 700.5 million, respectively.

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

The Company estimates the fair value of its fixed rate convertible senior notes using public market prices and is classified within Level 1 of the fair value hierarchy.

The estimated fair value of the Company’s fixed rate debt (unsecured senior notes, convertible senior notes and the Estancia mortgage loan) as of December 31, 2024 and 2023 was $ 1.1 billion and $ 686.3 million, respectively.

The fair value of the Company's variable rate debt approximates its carrying value.

Future Minimum Principal Payments

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The Company enters into interest rate swap agreements to hedge against interest rate fluctuations.

All of the Company's interest rate swaps are cash flow hedges.

All of the Company's interest rate swaps are designated as cash flow hedges.

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

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Hedge Type Interest Rate Range

Maturity December 31, 2023 December 31, 2022

Swap-cash flow 0.05 % - 0.07 %

January 2023 $ — $ 200,000

Swap-cash flow 1.84 % - 1.87 %

November 2023 — 250,000

(SOFR) Maturity December 31, 2024 December 31, 2023

Swap-cash flow 2.47 % - 2.50 %

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

As of December 31, 2023, the Company's derivative instruments were in an asset position with an aggregate fair value of $ 24.5 million.

None of the Company's derivative instruments was in a liability position as of December 31, 2023.

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

As of December 31, 2024 and 2023, the Company's interest rate swap assets had an aggregate fair value of $ 16.6 million and $ 24.5 million, respectively.

None of the Company's interest rate swaps was in a liability position as of December 31, 2024 and 2023.

Interest rate swap assets are included in prepaid expenses and other assets and interest rate swap liabilities are included in accounts payable, accrued expenses and other liabilities in the accompanying consolidated balance sheets.

The Company expects approximately $ 12.8 million will be reclassified from accumulated other comprehensive income (loss) to interest expense within the next 12 months.

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70,686 68,567 51,937

Seattle, WA 5,551 17,795 7,946

58,455 61,340 80,866

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(1) Other includes:

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

Seattle, WA, Philadelphia, PA, Newport, RI and Santa Cruz, CA.

Payments from customers are primarily made when services are provided.

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Common Share Repurchase Programs

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.

As of June 30, 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.

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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").

On February 21, 2023, the ATM program expired.

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

During the year ended December 31, 2024, the Company 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.

Common Dividends

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

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

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

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

On December 27, 2022, the Company repurchased 1,000,000 5.70 % Series H Cumulative Redeemable Preferred Shares at a privately negotiated price of $ 16.00 per share.

The difference between the carrying amount of the repurchased shares, net of issuance costs, and the consideration paid to repurchase the shares is considered a return from preferred shareholders of $ 8.2 million and recorded as an adjustment to net income (loss) attributable to common shareholders on the Company's basic and diluted earnings per share.

The following preferred shares were outstanding as of December 31, 2024 and 2023:

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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.

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

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

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

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.

As of December 31, 2023 and 2022, the Operating Partnership had 16,291 and 149,896 OP units, respectively, held by third parties, excluding LTIP units.

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

In December 2023, these OP units were redeemed for common shares on a one -for-one basis.

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

As of December 31, 2024 and 2023, the Operating Partnership had 16,291 OP units held by third parties, excluding LTIP units.

As of December 31, 2024, the Operating Partnership had two classes of long-term incentive partnership units ("LTIP units"), LTIP Class A units and LTIP Class B units.

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

On February 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.

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

On February 15, 2024, the Board of Trustees granted 136,353 LTIP Class B units to executive officers.

As of December 31, 2024, the Operating Partnership had 994,837 LTIP units outstanding, of which 470,920 LTIP units have vested.

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After the second anniversary of the issuance of the Series Z Preferred Units, holders may elect to redeem some or all of their units for, at the Company’s election, cash, common shares having an equivalent value or preferred shares on a one -for-one basis.

After the fifth anniversary of their issuance, the Company may redeem the Series Z Preferred Units for cash, common shares having an equivalent value or preferred shares on a one -for-one basis.

After May 11, 2027, the Company may redeem the Series Z Preferred Units for cash, common shares having an equivalent value or preferred shares on a one -for-one basis.

At any time following a change of control of the Company, holders of Series Z Preferred Units may elect to redeem some or all of their units for, at the Company’s election, cash or common shares having an equivalent value.

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In January 2022, 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.

On February 13, 2019, the Board of Trustees approved a target award of 126,891 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.

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, 2019 through December 31, 2021.

The actual number of common shares that vested was based on the performance criteria defined in the award agreements for the period of performance from January 1, 2019 through December 31, 2021.

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 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.

In January 2023, following the completion of the performance period from January 1, 2020 through December 31, 2022, the Company issued 51,686 common shares in settlement of the awards, based on the performance criteria defined in the award agreements.

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.

In January 2024, following the completion of the performance period from January 1, 2021 through December 31, 2023, the Company issued 71,677 common shares in settlement of the awards, based on the performance criteria defined in the award agreements.

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.

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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 % — %

5 unchanged sentences

$ 6.0 61.60 % 4.31 % — %

February 15, 2024

Relative and Absolute Total Shareholder Return 70.00 % / 30.00 %

$ 6.6 38.50 % 4.38 % — %

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

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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.

On February 15, 2024, the Board of Trustees granted 136,353 LTIP Class B units to executive officers.

These LTIP units will vest ratably on January 1, 2025, 2026 and 2027, 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 $ 16.13 per unit with an aggregate grant date fair value of $ 2.2 million.

As of December 31, 2024, the Operating Partnership had 994,837 LTIP units outstanding, of which 470,920 LTIP units have vested.

21 unchanged sentences

Total $ 0.0300 100.00 % $ 0.0400 100.00 % $ 0.0500 100.00 %

Series C Preferred Shares:

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

Qualified dividend — — % — — % — — %

Capital gain — — % — — % 0.1725 12.45 %

Return of capital — — % — — % 1.2133 87.55 %

Total $ — — % $ — — % $ 1.3858 100.00 %

Series D Preferred Shares:

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

Qualified dividend — — % — — % — — %

Capital gain — — % — — % 0.1692 12.49 %

Return of capital — — % — — % 1.1855 87.51 %

Total $ — — % $ — — % $ 1.3547 100.00 %

Series E Preferred Shares:

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Total $ 1.0688 100.00 % $ 1.4250 100.00 % $ 1.7812 100.00 %

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 were treated as 2023 distributions for tax purposes.

The common and preferred distributions declared on December 15, 2024 and paid on January 15, 2025 will be treated as 2025 distributions for tax purposes.

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2024 2023 2022

Current $ 237 $ 253 $ —

Deferred — — —

Federal $ 1,197 $ 237 $ 253

State and local 1,658 418 24

Current 418 24 61

Deferred — — —

Total current provision $ 2,855 $ 655 $ 277

Federal ( 25,280 ) — —

State and local ( 3,203 ) — —

Total deferred provision (benefit) $ ( 28,483 ) $ — $ —

Income tax expense (benefit) $ ( 25,628 ) $ 655 $ 277

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Income tax expense (benefit), net $ ( 25,628 ) $ 655 $ 277

The Company has provided a valuation allowance against its federal and state deferred tax asset at December 31, 2023 and 2022 due to the uncertainty of realizing the loss in future years.

As of December 31, 2023, the Company had a receivable of $ 0.8 million representing the portion of taxable losses that were carried back to prior years in which the Company had taxable income.

The significant components of the Company's deferred tax assets as of December 31, 2024 and 2023 consisted of the following (in thousands):

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Deferred tax asset net of valuation allowance $ 28,483 $ —

The Company evaluates its deferred tax assets each reporting period to determine if it is more likely than not that those assets will be realized or if a valuation allowance is needed.

At December 31, 2023, the Company provided a valuation allowance against its federal and state deferred tax assets.

During the third quarter of 2024, due to the TRS no longer having a three-year cumulative loss and continued improvement in the Company's financial results coming out of the COVID-19 pandemic and the projected future taxable income of its TRS, the Company determined that the release of a significant portion of its federal and state valuation allowance was appropriate.

The change in the valuation allowance was a $ 31.7 million decrease in 2024 and $ 3.0 million increase in 2023.

The Company has provided a valuation allowance against a portion of its state deferred tax assets at December 31, 2024 due to the uncertainty of realizing the loss in future years.

As of December 31, 2024 and 2023, the Company had no material unrecognized tax benefits.

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In the normal course of business, the Company is subject to examination by federal, state and local jurisdictions, where applicable.

As of December 31, 2023 and 2022, the statute of limitations remains open for all major jurisdictions for tax years dating back to 2020 and 2019, respectively.

Due to the net operating loss carryforward, tax years 2020 through 2024 remain open to examination by the major taxing jurisdictions to which the Company is subject.

Earnings Per Share

8 unchanged sentences

Net income (loss) per share available to common shareholders — diluted $ ( 0.39 ) $ ( 0.93 ) $ ( 0.95 )

For the years ended December 31, 2023, 2022 and 2021, 1,108,816 , 1,079,474 and 1,033,747 , respectively, of unvested service condition restricted shares and performance-based equity awards were excluded from diluted weighted-average common shares, as their effect would have been anti-dilutive.

For the years ended December 31, 2023, 2022 and 2021, 29,441,175 , 29,441,175 and 29,441,175 , respectively, of common shares underlying the Convertible Notes have been excluded from diluted shares as their effect would have been anti-dilutive.

For the years ended December 31, 2024, 2023 and 2022, 1,215,533 , 1,108,816 and 1,079,474 , respectively, of unvested service condition restricted shares and performance-based equity awards were excluded from diluted weighted-average number of common shares, as their effect would have been anti-dilutive.

For the years ended December 31, 2024, 2023 and 2022, the 29,441,175 common shares underlying the Convertible Notes have been excluded from diluted shares as their effect would have been anti-dilutive.

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

17 unchanged sentences

Hotel, Ground and Finance Leases

As of December 31, 2023, the following hotels were subject to leases as follows:

At December 31, 2024, the following hotels were subject to leases as follows:

Lease Properties Lease Type Lease Expiration Date

2 unchanged sentences

Paradise Point Resort & Spa Operating lease May 2050

Harbor Court Hotel San Francisco Finance lease August 2052

Hotel Monaco Washington DC Operating lease November 2059

Argonaut Hotel Operating lease December 2059

Hotel Zephyr Fisherman's Wharf Operating lease February 2062

Hotel Zephyr Fisherman's Wharf and Retail

Operating lease February 2062

Viceroy Santa Monica Hotel Operating lease September 2065

7 unchanged sentences

Operating lease January 2089

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

Hotel Zelos San Francisco Operating lease June 2097

1 unchanged sentence

Margaritaville Hollywood Beach Resort Operating lease July 2112

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

Harbor Court Hotel San Francisco Finance lease August 2052

______________________

31 unchanged sentences

Non-Cash Investing and Financing Activities:

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

Distributions payable on common shares/units $ 1,264 $ 1,261 $ 1,316

1 unchanged sentence

Issuance of common shares for Board of Trustees compensation $ 745 $ 754 $ 738

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

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

1 unchanged sentence

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

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

Accrued additions and improvements to hotel properties $ 1,817 $ 65 $ ( 2,759 )

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

1 unchanged sentence

Write-off of fully amortized deferred financing costs $ 8,841 $ 1,199 $ 19,595

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

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

Subsequent Events

The Company repurchased an aggregate of 318,269 of its common shares at an average price of $ 15.71 per share subsequent to December 31, 2023.

Operating Segment Information

The Company invests in luxury and upper-upscale hotels located in major U.S.

cities and resort properties located near our primary target urban markets and select destination resort markets, with an emphasis on major gateway coastal markets.

In this note, the Company refers to hotels and resorts as "hotels".

These hotels provide lodging, food and beverage services, and a range of amenities, including banquet and meeting space, fitness centers, swimming pools, spas, golf courses and other lifestyle amenities.

The Company’s Chief Executive Officer, who serves as the Chief Operating Decision Maker (“CODM”), evaluates the performance, allocates capital resources and manages the overall operating and investing strategy of each hotel individually.

The Company's hotels are not managed on a consolidated basis.

Given these factors, the Company considers each hotel to be an operating segment.

Because all of the Company's hotels offer similar full-service products, services and facilities, serve a similar mix of business and leisure customers, have similar economic characteristics and risks, and utilize similar methods to distribute their products and services via third-party management companies, all hotels have been aggregated into a single segment for reporting purposes.

All operating segments adhere to the same accounting policies as those described in Note.

2 Summary of Significant Accounting Policies.

The CODM evaluates the performance of each operating segment using hotel earnings before interest taxes depreciation and amortization (“Hotel EBITDA”), comparing it to prior reporting periods, forecasts and industry/peer benchmarks on a monthly basis to make decisions and allocate resources.

Additionally, the CODM considers other performance indicators such as Total Revenue, Revenue per Available Room (RevPAR), Average Daily Rate (ADR) and Occupancy to assess performance.

The CODM does not rely on segment assets or aggregated data by brand, property type, or geographic region to make strategic, operational, investment or resource allocation decisions.

The following table presents the Company's segment hotel revenues, Hotel EBITDA, including significant hotel expenses and its reconciliation to Net income (loss) for the years ended December 31, 2024, 2023 and 2022.

(in thousands)

For the year ended December 31,

2024 2023 2022

Total revenues $ 1,453,309 $ 1,419,949 $ 1,391,891

Corporate and other revenues 7,084 10,484 8,607

Hotel revenues 1,446,225 1,409,465 1,383,284

Significant hotel expenses:

Room expenses 250,875 248,020 225,992

Food and beverage expenses 273,731 264,163 243,543

Hotel general and administrative 119,308 120,122 116,183

Hotel sales and marketing 94,490 94,187 86,483

Hotel operations and maintenance 120,677 119,277 111,191

Hotel management fee 42,326 40,782 41,304

Hotel real estate taxes, personal property taxes, property insurance and ground rent 124,142 120,062 122,194

Other segment items (1)

51,507 51,565 51,969

Hotel EBITDA 369,169 351,287 384,425

Depreciation and amortization ( 229,531 ) ( 240,645 ) ( 239,583 )

Interest expense ( 112,432 ) ( 115,660 ) ( 99,988 )

Impairment ( 48,146 ) ( 81,788 ) ( 89,633 )

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

Business interruption insurance income and gain on insurance settlement 48,574 32,985 —

Income tax (expense) benefit 25,628 ( 655 ) ( 277 )

Corporate and other (2)

( 53,246 ) ( 50,175 ) ( 46,119 )

Net income (loss) $ 16 $ ( 74,276 ) $ ( 84,981 )

______________________

(1) Other segment items include expenses incurred for parking, spa, franchise fees and other hotel operating expenses.

(2) Corporate and other include corporate general and administrative and other operating income and expenses.

Pebblebrook Hotel Trust

7 unchanged sentences

Skamania Lodge — 7,130 44,987 3,523 52,384 11,969 85,157 10,898 108,024 37,755 70,269 1993 11/3/2010 3 - 40 years

Le Meridien Delfina Santa Monica — 18,784 81,580 2,295 16,158 18,783 95,751 4,283 118,817 37,539 81,278 1972 11/19/2010 3 - 40 years

Hyatt Centric Delfina Santa Monica — 18,784 81,580 2,295 22,425 18,784 99,127 7,173 125,084 41,107 83,977 1972 11/19/2010 3 - 40 years

Argonaut Hotel — — 79,492 4,247 4,192 — 84,601 3,330 87,931 33,111 54,820 1907 2/16/2011 3 - 40 years

24 unchanged sentences

Viceroy Santa Monica Hotel — — 91,442 5,257 19,829 — 105,843 10,685 116,528 26,676 89,852 1967/2002 11/30/2018 3 - 40 years

Le Parc Suite Hotel — 17,876 65,515 2,496 13,367 17,902 74,999 6,353 99,254 15,744 83,510 1970 11/30/2018 3 - 40 years

Montrose West Hollywood — 16,842 58,729 6,499 2,863 16,842 60,104 7,987 84,933 13,304 71,629 1976 11/30/2018 3 - 40 years

Chamberlain West Hollywood Hotel — 14,462 43,157 5,983 2,200 14,481 44,519 6,802 65,802 10,601 55,201 1970/2005 11/30/2018 3 - 40 years

Le Parc at Melrose — 17,876 65,515 2,496 14,247 17,960 75,873 6,301 100,134 18,775 81,359 1970 11/30/2018 3 - 40 years

Montrose at Beverly Hills — 16,842 58,729 6,499 3,582 16,842 60,756 8,054 85,652 16,103 69,549 1976 11/30/2018 3 - 40 years

Chamberlain West Hollywood — 14,462 43,157 5,983 2,652 14,482 44,903 6,869 66,254 12,787 53,467 1970/2005 11/30/2018 3 - 40 years

Hotel Ziggy — 12,440 36,932 3,951 7,435 12,440 42,439 5,879 60,758 12,193 48,565 1954 11/30/2018 3 - 40 years

45 unchanged sentences

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

Acquisitions 331,249

Capital expenditures 188,520

16 unchanged sentences

Disposal of Assets ( 8,958 )

Other ( 4,787 )

Balance at December 31, 2024 $ 1,530,854

1 unchanged sentence

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