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Based upon that evaluation, our President and Chief Executive Officer and our Chief Financial Officer and Treasurer concluded that our disclosure controls and procedures are effective.
−Removed: There have been no changes in our internal control over financial reporting during the quarter ended March 31, 2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
+Added: There have been no changes in our internal control over financial reporting during the quarter ended June 30, 2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Warning Concerning Forward-Looking Statements
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Forward-looking statements in this Quarterly Report on Form 10-Q relate to various aspects of our business, including:
−Removed: • The duration and severity of the economic downturn resulting from the COVID-19 pandemic and its impact on us and our managers and tenants, and our and their ability to operate throughout the pandemic and its aftermath,
−Removed: • Our expectation about the ability of Sonesta to operate the hotels that have been or may be transferred and rebranded to it,
+Added: • The duration and severity of the COVID-19 pandemic and its impact on us and our managers and tenants, and on our and their ability to operate throughout the pandemic and its aftermath,
+Added: • Our expectation about the ability of Sonesta to operate the hotels that have been or may be transitioned and rebranded to it,
• The likelihood and extent to which our managers and tenants will pay the contractual amounts of returns, rents or other obligations due to us,
−Removed: • Our ability to maintain sufficient liquidity during the duration of the COVID-19 pandemic and resulting economic downturn,
+Added: • Our ability to maintain sufficient liquidity during the duration of the COVID-19 pandemic and any resulting economic conditions,
• Potential defaults on, or non-renewal of, leases by our tenants,
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Risks, uncertainties and other factors that could have a material adverse effect on our forward-looking statements and upon our business, results of operations, financial condition, FFO, Normalized FFO, cash flows, liquidity and prospects include, but are not limited to:
−Removed: • The impact of conditions in the economy, including the COVID-19 pandemic and the resulting economic downturn, and the capital markets on us and our managers and tenants,
+Added: • The impact of conditions in the economy, including the COVID-19 pandemic and any resulting economic conditions, and the capital markets on us and our managers and tenants,
• Competition within the real estate, hotel, transportation and travel center and other industries in which our managers and tenants operate, particularly in those markets in which our properties are located,
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We may be unable to pay our debt obligations or to increase or maintain our current rate of distributions on our common shares and future distributions may be reduced or eliminated,
−Removed: • Sonesta operated 256 of our 310 hotels as of March 31, 2021.
−Removed: We are currently negotiating with Hyatt its possible continued management of 22 of our hotels.
−Removed: If we do not reach an agreement with Hyatt, we expect that some or all of these hotels may transition to Sonesta management in June 2021.
+Added: • Sonesta operated 261 of our 304 hotels as of June 30, 2021.
+Added: We are currently negotiating with Radisson its possible continued management of nine of our hotels.
+Added: If we do not reach an agreement with Radisson, we expect that some or all of these hotels may transition to Sonesta.
Transitioning hotels to another operator is disruptive to the hotels’ operations and requires significant capital investments.
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Further, we own an approximately 34% ownership interest in Sonesta.
−Removed: If Sonesta experiences losses, or requires additional capital, Sonesta may request we fund our share through the contribution of additional capital,
+Added: If Sonesta experiences losses, or requires additional capital, Sonesta may request we fund our share through the contribution of additional capital and if we do not fund those contributions, our equity interest in Sonesta will be diluted if Sonesta obtains such contributions from other shareholders,
• We cannot be sure of the future financial performance of our properties, or regarding our managers’, tenants’ or guarantors’ future actions or their abilities or willingness to pay contracted amounts owed to us.
If other operators or guarantors do not honor their obligations, we may seek to terminate our arrangements with them or other actions to enforce our rights,
−Removed: • Recent improvements in leisure travel may not be sustained, may stall or could decline,
+Added: • Recent improvements in lodging demand may not be sustained, may stall or could decline,
• If general economic activity in the country declines, the operating results of certain of our properties may decline, the financial results of our managers and our tenants may suffer and these managers and tenants may be unable to pay our returns or rents.
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• Hotel and other competitive forms of temporary lodging supply have been increasing and may affect our hotel operators’ ability to grow ADR and occupancy, and ADR and occupancy could decline due to increased competition which may cause our hotel operators to become unable to pay our returns or rents,
−Removed: • If the current level of commercial activity in the country declines, including as a result of the current economic downturn, if the price of diesel fuel increases significantly, if fuel conservation measures are increased, if freight business is directed away from trucking, if TA is unable to effectively compete or operate its business, if fuel efficiencies, the use of alternative fuels or transportation technologies reduce the demand for products and services TA sells or for various other reasons, TA may become unable to pay current and deferred rents due to us,
+Added: • If the current level of commercial activity in the country declines, including as a result of the COVID-19 pandemic, if the price of diesel fuel increases significantly, if fuel conservation measures are increased, if freight business is directed away from trucking, if TA is unable to effectively compete or operate its business, if fuel efficiencies, the use of alternative fuels or transportation technologies reduce the demand for products and services TA sells or for various other reasons, TA may become unable to pay current and deferred rents due to us,
• Our ability to grow our business and increase our distributions depends in large part upon our ability to buy properties that generate returns or can be leased for rents which exceed our operating and capital costs.
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• Contingencies in our pending sale agreements may not be satisfied and any expected sales and any related management or lease arrangements we expect to enter may not occur, may be delayed or the terms of such transactions or arrangements may change,
−Removed: • As of May 6, 2021, we had approximately $897.6 million of cash or cash equivalents.
+Added: • As of August 4, 2021, we had approximately $963.1 million of cash or cash equivalents.
This statement may imply that we have sufficient working capital and liquidity to meet our obligations for the next twelve months.
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• Continued availability of borrowings under our revolving credit facility is subject to our satisfying certain financial covenants and other credit facility conditions.
−Removed: The ratio of income available for debt service to debt service is below the 1.5x requirement under our public debt covenants as of March 31, 2021.
+Added: The ratio of income available for debt service to debt service was below the 1.5x requirement under our public debt covenants as of June 30, 2021.
We are not permitted under our debt agreements to incur additional debt while this ratio is below 1.5x.
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however, we may not obtain the financial flexibility we expect due to the ongoing COVID-19 pandemic or for other reasons.
−Removed: We can provide no assurance regarding the duration and severity of the economic downturn resulting from the COVID-19 pandemic and its impact on us and our operators,
+Added: We can provide no assurance regarding the duration and severity of the economic conditions resulting from the COVID-19 pandemic and its impact on us and our operators,
• We may be unable to repay our debt obligations when they become due,
• We intend to conduct our business activities in a manner that will afford us reasonable access to capital for investment and financing activities.
−Removed: However, we may not succeed in this regard and we may not have reasonable access to capital, including due to the COVID-19 pandemic and the resulting economic downturn.
+Added: However, we may not succeed in this regard and we may not have reasonable access to capital, including due to the COVID-19 pandemic and the resulting economic conditions.
If challenging market conditions last for a long period or worsen, our managers and tenants may experience liquidity constraints and as a result may be unable or unwilling to pay returns or rents to us and our ability to operate our business effectively may be challenged,
−Removed: • We currently expect to fund $140 million of capital expenditures in 2021.
+Added: • We currently expect to fund $100 million of capital expenditures during the last six months of 2021.
The cost of capital projects may be greater than we anticipate and operating results at our hotels may decline as a result of having rooms out of service to complete such improvements,
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Part II Other Information
+Added: There have been no material changes to risk factors from those we previously disclosed in our 2020 Annual Report.
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.