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Based upon that evaluation, our Managing Trustees, our President and Chief Investment 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 June 30, 2022 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 September 30, 2022 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 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,
• 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, increasing interest rates and any resulting economic conditions,
−Removed: • If and when hotel business will return to historical pre-pandemic levels and whether any improved conditions are sustained,
+Added: • Our ability to maintain sufficient liquidity during the current inflationary and increasing interest rate environment, and possible economic recession and other challenging economic and market conditions,
+Added: • If and when business transient hotel business will return to historical pre-COVID-19 pandemic levels and whether any improved hotel industry conditions will continue, increase or be sustained,
+Added: • Our ability to repay or refinance our debts as they mature or otherwise become due,
• 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 economic conditions, including the impact of the COVID-19 pandemic, increasing interest rates, inflation, labor costs and availability, and possible economic recession and the capital markets on us and our managers and tenants,
+Added: • The impact of economic conditions, including the impact of the changed market practices that arose or increased in response to the COVID-19 pandemic, increasing interest rates, inflation, labor costs and availability, and possible economic recession 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 205 of our 247 hotels as of June 30, 2022.
+Added: • Sonesta operated 200 of our 242 hotels as of September 30, 2022.
If Sonesta were to fail to provide quality services and amenities or to maintain a quality brand, our income from these properties may be adversely affected.
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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 COVID-19 pandemic, inflation or possible economic recession, 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 energy sources or transportation technologies reduce the demand for products and services TA sells, if TA is unable to make substantial capital investments 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 inflation, increasing interest rates, supply chain challenges or possible economic recession, 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 energy sources or transportation technologies reduce the demand for products and services TA sells, if TA is unable to make substantial capital investments 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 August 3, 2022, we had approximately $790,011 of cash or cash equivalents.
−Removed: This statement may imply that we have sufficient working capital and liquidity to meet our obligations and fund our business and investments.
−Removed: However, the amounts we receive from our operators may be insufficient to operate our business profitably.
+Added: • The amounts we receive from our operators may be insufficient to operate our business profitably.
In addition, our managers and tenants may not be able to fund owner's priority returns and rents due to us from operating our properties or from other resources.
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Rising interest rates and other factors could cause real estate and capital market conditions to deteriorate.
−Removed: Also, our revolving credit facility matures on January 15, 2023 and we may not be able to meet the conditions required to exercise the remaining extension option available to us under the agreement or be able to refinance the balance with new debt,
−Removed: • Although we met the minimum financial covenant levels under our senior notes indentures as of June 30, 2022, the margin by which we satisfied some of those covenants was relatively small.
+Added: Also, our revolving credit facility matures on July 15, 2023 and we may not be able to refinance or replace this facility or repay any borrowings then outstanding under that facility,
+Added: • Although we met the minimum financial covenant levels under our senior notes indentures as of September 30, 2022, the margin by which we satisfied some of those covenants was relatively small.
We may be unable to meet these requirements in future periods and these requirements may continue to restrict or limit our ability to incur additional debt,
• 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, capital market disruptions, increasing interest rates, current inflationary conditions and a possible recession.
−Removed: If challenging market conditions last for a long period or worsen or if a recession occurs, 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,
+Added: However, we may not succeed in this regard and we may not have reasonable access to capital, including capital market disruptions, increasing interest rates, current inflationary conditions and a possible economic recession.
+Added: If challenging economic or 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,
• Hotels require significant capital investments to remain competitive.
3 unchanged sentences
Changes in our credit ratings may cause the interest and fees we pay to change,
−Removed: • We have the option to further extend the maturity date of our revolving credit facility upon payment of a fee and meeting certain other conditions;
−Removed: however, the applicable conditions may not be met,
• The business and property management agreements between us and RMR have continuing 20 year terms.
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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.