What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-11-05 compared with 2025-07-29 · 85 added, 67 removed, 205 unchanged (43% of the section changed)

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

Our second quarter operating results exceeded our outlook, led by a strong rebound in San Francisco.

In addition, our recently redeveloped properties are gaining momentum and market share, with Newport Harbor Island Resort delivering results well above our expectations in its first full year of operations following the comprehensive transformation completed last spring.

Our Los Angeles properties continued to be challenged as the city recovered from the wildfires in early 2025 and the ramp-up of Hyatt Centric Delfina Santa Monica following its renovation and brand conversion.

Our Washington D.C.

properties benefited from the inauguration in the first quarter and San Francisco generated strong results driven by a positive convention calendar and rising business demand.

Our third quarter operating results were consistent with our outlook.

San Francisco led the portfolio as a result of robust citywide conventions, healthy business and leisure transient demand growth and elevated out-of-room spending.

Chicago also exceeded expectations with broad-based strength across group, corporate and leisure customers.

The quarter's results were negatively impacted by the year-over-year timing shift of the Jewish holidays and ongoing softness in group attendance.

Newport Harbor Island Resort, Jekyll Island Club Resort and Estancia La Jolla Hotel & Spa each delivered solid gains as they continue to capture market share and expand profitability.

We remain cautious given the broader economic backdrop and evolving trade and policy risks.

We will continue to operate with discipline, and we remain focused on proactive revenue-generation efforts and expense management.

During the six months ended June 30, 2025, we had the following transactions and events:

• We repurchased 1,298,396 common shares for an aggregate purchase price of $14.3 million, or an average of $11.04 per share, under our existing common share repurchase program.

We will remain disciplined and adaptable amid an uncertain macro environment, including the recent federal government shutdown, which we expect will temporarily soften travel demand.

During the nine months ended September 30, 2025, we had the following transactions and events:

• We issued $400.0 million of our 1.625% Convertible Senior Notes due January 2030 and used net proceeds and cash on hand to repurchase $400.0 million of 1.75% Convertible Senior Notes due December 2026 at a discount, for $392.0 million, which resulted in a gain on debt extinguishment of $7.4 million.

• We repurchased 5,623,656 common shares for an aggregate purchase price of $64.3 million, or an average of $11.44 per share, under our common share repurchase program.

• We repurchased 57,843 preferred shares for an aggregate purchase price of $1.1 million, or an average of approximately $18.38 per share, under our preferred share repurchase program.

• We finalized a settlement agreement for our Hurricane Helene insurance claim.

We continue to work with our insurance providers on our remaining claim for Hurricane Milton.

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

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Hotel Operating Statistics

The following table represents the key same-property hotel operating statistics for our hotels for the three and six months ended June 30, 2025 and 2024:

For the three months ended June 30, For the six months ended June 30,

The following table represents the key same-property hotel operating statistics for our hotels for the three and nine months ended September 30, 2025 and 2024:

For the three months ended

September 30, For the nine months ended

September 30,

2025 2024 2025 2024

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Same-Property Total RevPAR $ 362.12 $ 367.47 $ 345.11 $ 343.15

For the three and six months ended June 30, 2025 and 2024, the above table of hotel operating statistics includes information from all hotels owned as of June 30, 2025, except for Newport Harbor Island Resort due to its redevelopment.

For the three months ended September 30, 2025 and 2024, the above table of hotel operating statistics includes information from all hotels owned as of September 30, 2025.

For the nine months ended September 30, 2025 and 2024, the above table of hotel operating statistics includes information from all hotels owned as of September 30, 2025, except for Newport Harbor Island Resort which was excluded for the first and second quarters due to its redevelopment.

Non-GAAP Financial Measures

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

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).

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, repurchase of 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 three and six months ended June 30, 2025 and 2024 (in thousands):

For the three months ended June 30, For the six months ended June 30,

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 three and nine months ended September 30, 2025 and 2024 (in thousands):

For the three months ended

September 30, For the nine months ended

September 30,

2025 2024 2025 2024

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Real estate depreciation and amortization 57,544 57,466 172,615 171,807

Impairment 46,497 1,908 46,497 1,908

FFO $ 71,688 $ 104,519 $ 173,864 $ 223,579

Distribution to preferred shareholders and unit holders (11,776) (11,795) (35,367) (35,386)

Repurchase of preferred shares 312 — 312 —

FFO available to common share and unit holders $ 60,224 $ 92,724 $ 138,809 $ 188,193

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Non-cash amortization of acquired intangibles (453) (482) (1,390) (1,445)

Gain on insurance settlement (1,820) — (1,820) —

Early extinguishment of debt (7,385) — (7,385) 1,534

Amortization of share-based compensation expense 3,521 3,500 10,262 10,083

Redemption of preferred shares (312) — (312) —

Hurricane-related costs — — — 183

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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 three and six months ended June 30, 2025 and 2024 (in thousands):

For the three months ended June 30, For the six months ended June 30,

The following table reconciles net income (loss) to EBITDA, EBITDA re , Adjusted EBITDA re and Hotel EBITDA for the three and nine months ended September 30, 2025 and 2024 (in thousands):

For the three months ended

September 30, For the nine months ended

September 30,

2025 2024 2025 2024

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Depreciation and amortization 57,602 57,546 172,790 172,051

EBITDA and EBITDA re

EBITDA $ 48,431 $ 105,403 $ 209,789 $ 280,043

Impairment 46,497 1,908 46,497 1,908

$ 94,928 $ 107,311 $ 256,286 $ 281,951

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Non-cash amortization of acquired intangibles (453) (482) (1,390) (1,445)

Gain on insurance settlement (1,820) — (1,820) —

Amortization of share-based compensation expense 3,521 3,500 10,262 10,083

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Results of Operations

At June 30, 2025 and 2024, 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 of, operating results for certain properties are not comparable for the three and six months ended June 30, 2025 and 2024 .

At September 30, 2025 and 2024, 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 of, operating results for certain properties are not comparable for the three and nine months ended September 30, 2025 and 2024 .

As there were no properties acquired or disposed in 2025 or 2024, there were no "non-comparable properties" for the periods indicated.

Comparison of the three months ended June 30, 2025 to the three months ended June 30, 2024

Revenues — Total revenues increased by $10.4 million primarily due to an increase at Newport Harbor Island Resort which was closed for renovation in 2024, and demand increases at Hotel Zelos San Francisco, 1 Hotel San Francisco, and Jekyll Island Club Resort.

This increase was partially offset by lower revenue at Hyatt Centric Delfina Santa Monica, which continued to ramp up from its room renovation and conversion to the Hyatt brand.

Hotel operating expenses — Total hotel operating expenses increased by $6.1 million primarily due to increased operations at Newport Harbor Island Resort, and an increase in wage rates and benefits at many of our properties.

Real estate taxes, personal property taxes, property insurance and ground rent — Real estate taxes, personal property taxes, property insurance and ground rent increased by $9.0 million primarily due to an increase in real estate tax assessments in 2025.

In 2024, several California properties had lower property taxes as a result of the settlement of appeals from previous years.

Business interruption insurance income — We recognized business interruption insurance income in 2025 and 2024 related to partial settlements with our insurance carriers for lost income at LaPlaya Beach Resort & Club.

Other operating expenses — Other operating expenses decreased by $1.1 million primarily due to a decrease in preopening expenses.

Other, net — Other, net increased by $1.8 million due to interest income earned on excess cash balances.

Income tax (expense) benefit — Income tax (expense) benefit increased by $6.8 million in 2025 as a result of taxable income of Pebblebrook Hotel Lessee, Inc.

in the second quarter of 2025.

In the second quarter of 2024, the deferred income tax of Pebblebrook Hotel Lessee, Inc.

partially reduced the valuation allowance.

Comparison of the three months ended September 30, 2025 to the three months ended September 30, 2024

Revenues — Total revenues decreased by $5.8 million primarily due to demand decreases at Paradise Point Resort & Spa, W Los Angeles - West Beverly Hills, Hotel Monaco Washington DC, The Westin San Diego Gaslamp Quarter and George Hotel.

This decrease was partially offset by demand increases at 1 Hotel San Francisco and Newport Harbor Island Resort.

Hotel operating expenses — Total hotel operating expenses increased by $2.0 million primarily due to increased operations at Newport Harbor Island Resort and an increase in wages and benefits at many of our properties.

Impairment — We recognized an impairment loss of $46.5 million in 2025 related to three hotels.

We recognized an impairment loss of $1.9 million in 2024 due to damage caused by Hurricane Helene at LaPlaya Beach Resort & Club.

Business interruption insurance income and gain on insurance settlement — We recognized business interruption insurance income and gain on insurance settlement in 2025 and 2024 related to the settlement or partial settlements of property damage, business interruption and other costs sustained at LaPlaya Beach Resort & Club resulting from Hurricane Helene and Hurricane Milton in 2025 and Hurricane Ian in 2024.

Other operating expenses — Other operating expenses increased by $1.2 million primarily due to an increase in preopening expenses.

Interest expense — Interest expense decreased by $7.7 million primarily due to the repurchase of $400.0 million aggregate principal amount of our 1.75% Convertible Senior Notes due December 2026, which resulted in a gain on debt extinguishment of $7.4 million.

Income tax (expense) benefit — The income tax expense in 2025 was the result of taxable income of Pebblebrook Hotel Lessee, Inc.

The income tax benefit in 2024 was a result of the partial release of the valuation allowance offset by income tax expense.

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

Comparison of the six months ended June 30, 2025 to the six months ended June 30, 2024

Comparison of the nine months ended September 30, 2025 to the nine months ended September 30, 2024

Revenues — Total revenues increased by $10.8 million primarily due to increases at Newport Harbor Island Resort, which was closed for renovation for part of 2024;

LaPlaya Beach Resort & Club, where the Beach House was closed in 2024 due to hurricane damage and substantially reopened in 2025;

Estancia La Jolla Hotel & Spa, which was under renovation in 2024;

and demand increases at 1 Hotel San Francisco and The Westin Copley Place, Boston.

This increase was partially offset by lower revenue at Hyatt Centric Delfina Santa Monica, which continued to ramp up from its room renovation and conversion to the Hyatt brand;

Hotel operating expenses — Total hotel operating expenses increased by $17.3 million primarily due to increased operations at Newport Harbor Island Resort, The Westin Copley Place, Boston, and LaPlaya Beach Resort & Club, as well as an increase in wage rates and benefits at many of our properties.

Real estate taxes, personal property taxes, property insurance and ground rent — Real estate taxes, personal property taxes, property insurance and ground rent increased by $9.8 million primarily due to an increase in real estate tax assessments in 2025.

In 2024, several California properties had lower property taxes as a result of the settlement of appeals from previous years.

and demand decreases at W Los Angeles - West Beverly Hills and Viceroy Santa Monica Hotel.

Hotel operating expenses — Total hotel operating expenses increased by $19.3 million primarily due to increased operations at Newport Harbor Island Resort, The Westin Copley Place, Boston, 1 Hotel San Francisco and LaPlaya Beach Resort & Club, as well as an increase in wages and benefits at many of our properties.

Real estate taxes, personal property taxes, property insurance and ground rent — Real estate taxes, personal property taxes, property insurance and ground rent increased by $10.0 million primarily due to an increase in real estate tax assessments in 2025 and lower property taxes in 2024 on several California properties as a result of the successful settlement of appeals from previous years.

General and administrative — General and administrative expenses increased by $1.9 million primarily due to an increase in legal costs in 2025.

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

Other operating expenses — Other operating expenses decreased by $2.1 million primarily due to a decrease in preopening expenses.

Income tax (expense) benefit — Income tax (expense) benefit increased by $3.6 million due to an increase in taxable income of Pebblebrook Hotel Lessee, Inc.

In the second quarter of 2024, the deferred income tax of Pebblebrook Hotel Lessee, Inc.

partially reduced the valuation allowance.

Impairment — We recognized an impairment loss of $46.5 million in 2025 related to three hotels.

We recognized an impairment loss of $1.9 million in 2024 due to damage caused by Hurricane Helene at LaPlaya Beach Resort & Club.

Income tax (expense) benefit — Income tax (expense) benefit increased by $31.8 million as a result of the deferred tax benefit recorded in 2024 upon the release of a portion of the valuation allowance.

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

Our primary cash requirements in the short term (i.e., those requiring cash on or before June 30, 2026) will be to fund property lease obligations, interest and current principal on debt, capital improvements, dividends on common and preferred shares, and working capital of our property operations.

We believe our cash and cash equivalents, restricted cash and the amount available on our senior unsecured revolving credit facility, which totaled $909.2 million as of June 30, 2025, along with cash generated from ongoing operations will be sufficient to satisfy our short-term cash requirements.

As of June 30, 2025, we had no off-balance sheet arrangements.

Our primary cash requirements in the short term (i.e., those requiring cash on or before September 30, 2026) will be to fund property lease obligations, interest and current principal on debt, capital improvements, dividends on common and preferred shares, and working capital of our property operations.

We believe our cash and cash equivalents, restricted cash and the amount available on our senior unsecured revolving credit facility, which totaled $874.2 million as of September 30, 2025, along with cash generated from ongoing operations will be sufficient to satisfy our short-term cash requirements.

As of September 30, 2025, we had no off-balance sheet arrangements.

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

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

Our total debt had an aggregate face value of $2.3 billion as of June 30, 2025, as summarized below:

June 30, 2025

Our total debt had an aggregate face value of $2.3 billion as of September 30, 2025, as summarized below:

September 30, 2025

(in thousands)

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

Assuming we exercise all extension options available in our debt agreements, we expect that future principal and interest payments associated with our remaining debt obligations outstanding as of June 30, 2025 will be $2.6 billion through their maturity, with $19.2 million of principal and $99.3 million of interest payable on or before June 30, 2026.

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 September 30, 2025 will be $2.6 billion through their maturity, with $19.3 million of principal and $99.9 million of interest payable on or before September 30, 2026.

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

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

As of June 30, 2025, none of the mortgage loans were in a cash trap.

As of September 30, 2025, none of the mortgage loans were in a cash trap.

Long-term operating and finance lease obligations

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

Future fixed minimum payments associated with our long-term operating and finance leases total $1.8 billion as of June 30, 2025, with $23.5 million payable on or before June 30, 2026.

Future fixed minimum payments associated with our long-term operating and finance leases total $1.8 billion as of September 30, 2025, with $23.3 million payable on or before September 30, 2026.

Purchase commitments

As of June 30, 2025, we had $1.3 million of outstanding purchase commitments, all of which will be paid on or before June 30, 2026.

As of September 30, 2025, we had $1.8 million of outstanding purchase commitments, all of which will be paid on or before September 30, 2026.

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

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Preferred dividends and Series Z preferred operating partnership units

We expect to pay aggregate annual dividends and distributions of approximately $47.2 million on our outstanding Series E, Series F, Series G and Series H Cumulative Redeemable Preferred Shares and Series Z Cumulative Perpetual Preferred Units on or before June 30, 2026 and in future years until the shares/units are redeemed.

We expect to pay aggregate annual dividends and distributions of approximately $47.1 million on our outstanding Series E, Series F, Series G and Series H Cumulative Redeemable Preferred Shares and Series Z Cumulative Perpetual Preferred Units on or before September 30, 2026 and in future years until the shares/units are redeemed.

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

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Operating Activities.

Our net cash provided by operating activities was $140.9 million for the six months ended June 30, 2025 and $129.7 million for the six months ended June 30, 2024.

Our net cash provided by operating activities was $218.5 million for the nine months ended September 30, 2025 and $205.8 million for the nine months ended September 30, 2024.

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

Investing Activities.

Our net cash used in investing activities was $47.5 million for the six months ended June 30, 2025 and $61.7 million for the six months ended June 30, 2024.

Our net cash used in investing activities was $66.0 million for the nine months ended September 30, 2025 and $79.9 million for the nine months ended September 30, 2024.

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

• During the six months ended June 30, 2025, we invested $49.5 million in improvements to our hotel properties.

• During the six months ended June 30, 2024, we invested $82.7 million in improvements to our hotel properties and received $21.5 million in property insurance proceeds.

• During the nine months ended September 30, 2025, we invested $70.7 million in improvements to our hotel properties and received $5.3 million in property insurance proceeds.

• During the nine months ended September 30, 2024, we invested $100.9 million in improvements to our hotel properties and received $21.7 million in property insurance proceeds.

Financing Activities.

Our net cash used in financing activities was $43.8 million for the six months ended June 30, 2025 and $150.4 million for the six months ended June 30, 2024.

Our net cash used in financing activities was $138.0 million for the nine months ended September 30, 2025 and $175.3 million for the nine months ended September 30, 2024.

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

• During the six months ended June 30, 2025, we repurchased $15.6 million of common shares through our common share repurchase program and for tax withholding purposes in connection with vestings of share-based equity awards and paid $26.0 million in preferred and common distributions.

• During the six months ended June 30, 2024, we repaid $110.9 million in debt, repurchased $6.9 million of common shares through our common share repurchase program and for tax withholding purposes in connection with vestings of share-based equity awards, paid $5.5 million in deferred financing costs and paid $26.0 million in preferred and common distributions.

• During the nine months ended September 30, 2025, we issued $400.0 million of debt, repaid $393.6 million of debt, purchased $27.2 million of capped calls, repurchased $65.6 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 $10.3 million in deferred financing costs and paid $39.0 million in preferred and common distributions.

• During the nine months ended September 30, 2024, we repaid $111.4 million of 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 $6.4 million in deferred financing costs and paid $39.0 million in preferred and common 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 six months ended June 30, 2025, we invested $49.5 million in capital investments (or $41.1 million excluding the repair and remediation of LaPlaya Beach Resort & Club) to reposition and improve our properties, including the renovations of Hyatt Centric Delfina Santa Monica, Skamania Lodge, Argonaut Hotel, The Westin Copley Place, Boston and Paradise Point Resort & Spa.

Depending on market conditions, and in some instances subject to approval from governmental authorities, we expect to invest a total of $65.0 million to $75.0 million in capital investments in 2025, which includes normal hotel capital refurbishments and repositioning projects at Hyatt Centric Delfina Santa Monica, Paradise Point Resort & Spa, Chaminade Resort & Spa and Argonaut Hotel and excludes capital expenditures related to the repair and remediation of LaPlaya Beach Resort & Club.

For the nine months ended September 30, 2025, we invested $70.7 million in capital investments (or $56.6 million excluding the repair and remediation of LaPlaya Beach Resort & Club) to reposition and improve our properties, including the renovations of Hyatt Centric Delfina Santa Monica, Skamania Lodge, Argonaut Hotel, The Westin Copley Place, Boston and Paradise Point Resort & Spa.

Depending on market conditions, and in some instances subject to approval from governmental authorities, we expect to invest a total of $65.0 million to $75.0 million in capital investments in 2025, which includes normal hotel capital refurbishments and repositioning projects at Hyatt Centric Delfina Santa Monica, Paradise Point Resort & Spa, Chaminade Resort & Spa and The Westin Copley Place, Boston and excludes capital expenditures related to the repair and remediation of LaPlaya Beach Resort & Club.

Common Share Repurchase Programs and Preferred Share Repurchase Program

Common Share Repurchase Programs

Common Share Repurchase Program

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

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

During the six months ended June 30, 2025, we repurchased 1,298,396 common shares for an aggregate purchase price of $14.3 million, or an average of approximately $11.04 per share.

As of June 30, 2025, $116.6 million of common shares remained available for repurchase under this program.

During the nine months ended September 30, 2025, we repurchased 5,623,656 common shares for an aggregate purchase price of $64.3 million, or an average of approximately $11.44 per share.

As of September 30, 2025, $66.6 million of common shares remained available for repurchase under the program.

In October 2025, our Board of Trustees terminated its February 2023 Common Share Repurchase Program and authorized a new common 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.

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

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

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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 six months ended June 30, 2025, no preferred shares were repurchased under this program.

As of June 30, 2025, $84.2 million of preferred shares remained available for repurchase under this program.

During the nine months ended September 30, 2025, we repurchased 57,843 preferred shares an aggregate purchase price of $1.1 million, or an average of approximately $18.38 per share.

As of September 30, 2025, $83.1 million of preferred shares remained available for repurchase under the program.

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

As of June 30, 2025, we have interest rate swap agreements with an aggregate notional amount of $955.0 million to hedge variable interest rates on our unsecured term loans and Margaritaville Hollywood Beach Resort's mortgage loan.

As of September 30, 2025, we have interest rate swap agreements with an aggregate notional amount of $955.0 million to hedge variable interest rates on our unsecured term loans and Margaritaville Hollywood Beach Resort's mortgage loan.

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

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis