Chatham Lodging Trust

Previous wording

As of December 31, 2023, the Company owned 39 hotels with an aggregate of 5,915 rooms located in 16 states and the District of Columbia. Prior to September 23, 2021, the Company held a 10.0% noncontrolling interest in a joint venture (the "Inland JV") with affiliates of Colony Capital, Inc. ("CLNY"), which owned 48 hotels acquired from Inland American Real Estate Trust, Inc. ("Inland"), comprising an aggregate of 6,402 rooms. Chatham sold its interest in the Inland JV in September 2021. Prior to March 18, 2021, the Company also held a 10.3% noncontrolling interest in a joint venture (the “NewINK JV”) with affiliates of CLNY, which owned 46 hotels acquired from a joint venture (the "Innkeepers JV") between the Company and Cerberus Capital Management (“Cerberus”), comprising an aggregate of 5,948 rooms. Chatham sold its interest in the NewINK JV in March 2021.

Current wording

As of December 31, 2024, the Company owned 37 hotels with an aggregate of 5,596 rooms located in 16 states and the District of Columbia.

Previous wording

Results of operations for the year ended December 31, 2023 include the operating activities of the 39 hotels we owned for the entire period. We sold one hotel located in Burlington, MA on May 6, 2022, and sold one hotel located in Dallas, TX and two hotels located in Houston, TX on May 13, 2022. We acquired one hotel located in Miramar Beach, FL on March 8, 2022. We developed and opened, on January 24, 2022, one hotel located in Los Angeles, CA. The changes in results described below were driven primarily by the continued recovery of business travel following the COVID-19 pandemic, the sale of four hotels, the acquisition of one hotel, and the ramp-up from opening one hotel.

Current wording

Results of operations for the year ended December 31, 2024 include the operating activities of the 36 hotels we owned for the entire period and partial year results for three hotels sold during the period and one hotel acquired during the period. We sold one hotel located in Denver, CO on January 9, 2024, sold one hotel located in Maitland, FL on December 6, 2024, and sold one hotel located in Bloomington, MN on December 16, 2024. We acquired one hotel located in Phoenix, AZ on May 30, 2024. The changes in results described below were driven primarily by the continued recovery of business travel following the COVID-19 pandemic, the sale of three hotels, the acquisition of one hotel, and inflationary cost pressures.

Previous wording

COVID-19 pandemic, the ramp-up of the Home2 Woodland hills, which opened on January 24, 2022, the acquisition of one hotel on March 8, 2022, partially offset by the decrease in revenue from the sale of four hotels during during the year ended December 31, 2022. The Home2 Woodland Hills contributed $11.7 million of revenue during the year ended December 31, 2023, up $2.8 million from the $8.9 million contributed during the year ended December 31, 2022. The one hotel acquired in 2022 contributed $5.5 million of revenue during the year ended December 31, 2023, up $0.3 million from the $5.2 million contributed during the year ended December 31, 2022. The increase was partially offset by the impact from selling four hotels during the second quarter of 2022 that contributed $0 of revenue during the year ended December 31, 2023, down $4.9 million from the $4.9 million these hotels contributed during the year ended December 31, 2022. Since all of our hotels are select-service or limited-service hotels, room revenue is the primary revenue source as these hotels do not have significant food and beverage revenue or large group conference facilities. Room revenue comprised 91.6% and 92.3% of total revenue for the years ended December 31, 2023 and 2022, respectively. Room revenue was $285.0 million and $272.3 million for the years ended December 31, 2023 and 2022, respectively, and the increase in room revenue primarily was related to the same factors discussed above.

Current wording

Total revenue increased $6.1 million to $317.2 million for the year ended December 31, 2024 compared to total revenue of $311.1 million for the 2023 period. The increase in total revenue primarily was related to the 2.8% increase in same property RevPAR, the acquisition of one hotel on May 30, 2024, partially offset by the decrease in revenue from the sales of three hotels during the year ended December 31, 2024. The one hotel acquired during the year ended December 31, 2024, which was not owned during the year ended December 31, 2023, contributed $3.3 million of room revenue during the year ended December 31, 2024. This was partially offset by the decrease in revenue from the sale of three hotels that contributed $10.4 million in room revenue for the year ended December 31, 2024, down $6.3 million from the $16.7 million these hotels contributed for the year ended December 31, 2023. Since all of our hotels are select-service or limited-service hotels, room revenue is the primary revenue source as these hotels do not have significant food and beverage revenue or large group conference facilities. Room revenue comprised 91.5% and 91.6% of total revenue for the years ended December 31, 2024 and 2023, respectively. Room revenue was $290.3 million and $285.0 million for the years ended December 31, 2024 and 2023, respectively, and the increase in room revenue primarily was related to the same factors discussed above.

Previous wording

Food and beverage revenue was $8.1 million and $7.3 million for the years ended December 31, 2023 and 2022, respectively. The increase in food and beverage revenue primarily was related to an increase in occupancies at our hotels due to the continued recovery from the COVID-19 pandemic.

Current wording

Food and beverage revenue was $7.7 million and $8.1 million for the years ended December 31, 2024 and 2023, respectively. The decrease in food and beverage revenue was related to the sale of three hotels.

Previous wording

Other revenue, comprised of parking, meeting room, gift shop, in-room movie and other ancillary amenities revenue, increased $2.7 million for the year ended December 31, 2023. The increase in other operating revenue primarily was related to an increase in occupancies at our hotels due to the continued recovery from the COVID-19 pandemic.

Current wording

Other revenue, comprised of parking, meeting room, gift shop, in-room movie and other ancillary amenities revenue, increased $1.4 million for the year ended December 31, 2024. The increase in other operating revenue primarily was related to increases in revenue from parking.

Previous wording

Reimbursed costs from related parties were $1.3 million and $1.3 million for the years ended December 31, 2023 and 2022, respectively. The cost reimbursements were offset by the reimbursed costs from related parties included in operating expenses.

Current wording

Reimbursed costs from related parties were $1.1 million and $1.3 million for the years ended December 31, 2024 and 2023, respectively. The cost reimbursements were offset by the reimbursed costs from related parties included in operating expenses.

Previous wording

As reported by Smith Travel Research, U.S. lodging industry RevPAR for the years ended December 31, 2023 and 2022 increased 4.9% and increased 29.8%, respectively, as compared to the years ended December 31, 2022 and 2021. Smith Travel Research reported that U.S. lodging industry RevPAR increased 16.7% in the first quarter of 2023, increased 2.5% in the second quarter of 2023, increased 1.7% in the third quarter of 2023 and increased 1.3% in the fourth quarter of 2023. We expect that in 2024, lodging industry RevPAR will continue to increase modestly.

Current wording

Travel Research reported that U.S. lodging industry RevPAR increased 0.2% in the first quarter of 2024, increased 2.5% in the second quarter of 2024, increased 0.9% in the third quarter of 2024 and increased 3.6% in the fourth quarter of 2024. We expect that in 2025, lodging industry RevPAR will continue to increase modestly.

Previous wording

Same property RevPAR increased 6.1% due to an increase in occupancy of 3.3% and an increase in ADR of 2.7%.

Current wording

Same property RevPAR increased 2.8% due to an increase in occupancy of 2.4% and an increase in ADR of 0.4%.

Previous wording

Hotel operating expenses increased $14.6 million, or 9.1%, to $175.4 million for the year ended December 31, 2023 from $160.8 million for the year ended December 31, 2022. The increase in hotel operating expenses was related to the increase in revenues and occupancy caused by the continued recovery from the COVID-19 pandemic, increased staffing levels, and inflation. The increase was partially offset by the sale of four hotels during the second quarter of 2022 that contributed $0 of operating expenses during the year ended December 31, 2023, down $3.5 million from the $3.5 million these hotels contributed during the year ended December 31, 2022.

Current wording

Hotel operating expenses increased $5.8 million, or 3.3%, to $181.2 million for the year ended December 31, 2024 from $175.4 million for the year ended December 31, 2023. The increase in hotel operating expenses was related to the increase in revenues and occupancy caused by the continued recovery of business travel following the COVID-19 pandemic, increases in staffing levels, wage and benefit costs, insurance costs, and inflation. The one hotel acquired during the year ended December 31, 2024, which was not owned during the year ended December 31, 2023, contributed $2.2 million of operating expenses during the year ended December 31, 2024. The increase was partially offset by the sale of three hotels during the year ended December 31, 2024 that contributed $7.3 million of operating expenses during the year ended December 31, 2024, down $4.6 million from the $11.9 million the sold hotels contributed during the year ended December 31, 2023.

Previous wording

Room expenses, which are the most significant component of hotel operating expenses, increased $5.7 million from $56.1 million in 2022 to $61.8 million in 2023. The increase in room expenses was related primarily to an increase in occupancy and revenues at our hotels due to the continued recovery from the COVID-19 pandemic, increased staffing levels, and inflation.

Current wording

Room expenses, which are the most significant component of hotel operating expenses, increased $3.5 million from $61.8 million in 2023 to $65.3 million in 2024. The increase in room expenses was related to an increase in occupancies and revenues at our hotels due to the continued recovery of business travel following the COVID-19 pandemic, increased staffing levels, wage and benefit costs, and inflation.

Previous wording

The remaining hotel operating expenses increased $8.9 million, or 8.5%, from $104.7 million in 2022 to $113.6 million in 2023. The increase in other remaining expenses was related primarily to an increase in occupancies and revenues at our hotels due to the continued recovery from the COVID-19 pandemic and inflation.

Current wording

The remaining hotel operating expenses increased $2.3 million, or 2.0%, from $113.6 million in 2023 to $115.9 million in 2024. The increase in other remaining expenses primarily was related to an increase in occupancies and revenues at our hotels due to the continued recovery of business travel following the COVID-19 pandemic, increased insurance costs and inflation.

Previous wording

Depreciation and amortization expense decreased $1.1 million from $59.4 million for the year ended December 31, 2022 to $58.3 million for the year ended December 31, 2023. The decrease was primarily due to the depreciation expense from four hotels that were sold during the second quarter of 2022. Depreciation is generally recorded on our assets over 40 years for buildings, 20 years for land improvements, 15 years for building improvements and one to ten years for hotel furniture, fixtures and equipment from the date of acquisition on a straight-line basis. Depreciable lives of hotel furniture, fixtures and equipment are generally assumed to be the difference between the date of acquisition and the date that the furniture, fixtures and equipment will be replaced. Amortization of franchise fees is recorded on a straight-line basis over the term of the respective franchise agreement.

Current wording

Depreciation and amortization expense increased $2.4 million from $58.3 million for the year ended December 31, 2023 to $60.7 million for the year ended December 31, 2024. Depreciation is generally recorded on our assets over 40 years for buildings, 20 years for land improvements, 15 years for building improvements and one to ten years for hotel furniture, fixtures and equipment from the date of acquisition on a straight-line basis. Depreciable lives of hotel furniture, fixtures and equipment are generally assumed to be the difference between the date of acquisition and the date that the furniture, fixtures and equipment will be replaced. Amortization of franchise fees is recorded on a straight-line basis over the term of the respective franchise agreement.

Previous wording

Impairment loss was $4.3 million for the year ended December 31, 2023. The impairment loss in 2023 was due to the impairment recorded on the HGI Denver Tech hotel property which is under contract to be sold.

Current wording

Impairment loss was $4.3 million and $4.3 million for the years ended December 31, 2024 and 2023, respectively. The impairment loss in 2024 was due to the impairment recorded on a hotel property which is under contract to be sold. The impairment loss in 2023 was due to the impairment recorded on the HGI Denver Tech hotel property which was sold on January 9, 2024.

Previous wording

Total property taxes, ground rent and insurance expenses increased $2.3 million from $21.2 million for the year ended December 31, 2022 to $23.5 million for the year ended December 31, 2023. The increase primarily was related to increases in property tax assessments and an increase in insurance costs.

Current wording

Total property taxes, ground rent and insurance expenses increased $0.2 million from $23.5 million for the year ended December 31, 2023 to $23.7 million for the year ended December 31, 2024. The increase primarily was related to increases in property tax assessments and an increase in insurance costs partially offset by successful property tax appeals at multiple hotel properties.

Previous wording

General and administrative expenses principally consist of employee-related costs, including base payroll, bonuses and amortization of restricted stock and awards of LTIP units. These expenses also include corporate operating costs, professional fees and trustees’ fees. Total general and administrative expenses (excluding amortization of stock based compensation of $6.1 million and $5.6 million for the years ended December 31, 2023 and 2022, respectively) decreased $0.4 million to $11.4 million in 2023 from $11.8 million in 2022.

Current wording

General and administrative expenses principally consist of employee-related costs, including base payroll, bonuses and amortization of restricted stock and awards of LTIP units. These expenses also include corporate operating costs, professional fees and trustees’ fees. Total general and administrative expenses (excluding amortization of stock based compensation of $6.4 million and $6.1 million for the years ended December 31, 2024 and 2023, respectively) increased $0.6 million to $12.0 million in 2024 from $11.4 million in 2023.

Previous wording

Other charges increased from $0.7 million for the year ended December 31, 2022 to $2.3 million for the year ended December 31, 2023. The increase primarily was related to the write-off of $2.2 million of previous expenditures related to the development of a hotel in California that the Company decided to no longer pursue.

Current wording

Other charges decreased from $2.3 million for the year ended December 31, 2023 to $0.3 million for the year ended December 31, 2024. The decrease primarily was related to the 2023 write-off of $2.2 million of previous expenditures related to the development of a hotel in California that the Company decided to no longer pursue.

Previous wording

Reimbursable costs from related parties, comprised of corporate payroll and rent costs were $1.3 million and $1.3 million for the years ended December 31, 2023 and 2022, respectively. The cost reimbursements were offset by the

Current wording

Reimbursable costs from related parties, comprised of shared office expenses and rent, were $1.1 million and $1.3 million for the years ended December 31, 2024 and 2023, respectively. The cost reimbursements were offset by the

Previous wording

Gain on Sale of Hotel Property

Current wording

Gain on Sale of Hotel Properties

Previous wording

Gain on the sale of hotel property decreased $2.3 million for the year ended December 31, 2023 compared to the year ended December 31, 2022. The HGI Burlington hotel property was sold on May 6, 2022 and the HWS Dallas, the CY Houston West University, and the RI Houston West University hotel properties together were sold on May 13, 2022, which resulted in a total gain of $2.3 million.

Current wording

Gain on the sale of hotel properties increased $5.7 million for the year ended December 31, 2024 compared to the year ended December 31, 2023. The HGI Denver Tech hotel property was sold on January 9, 2024, the HWS Maitland hotel property was sold on December 6, 2024, and the HWS Bloomington hotel property was sold on December 16, 2024, which resulted in a total gain of $5.7 million.

Previous wording

Interest on cash and cash equivalents and other income increased $1.5 million from $10 thousand for the year ended December 31, 2022 to $1.5 million for the year ended December 31, 2023. The increase was due to higher cash balances and higher interest rates received on cash balances during the year ended December 31, 2023.

Current wording

Interest on cash and cash equivalents and other income increased $0.2 million from $1.5 million for the year ended December 31, 2023 to $1.7 million for the year ended December 31, 2024. The increase was due to higher cash balances and higher interest rates received on cash balances during the year ended December 31, 2024.

Previous wording

Interest expense increased $0.6 million, or 2.5%, from $26.5 million for the year ended December 31, 2022 to $27.1 million for the year ended December 31, 2023. Interest expense is comprised of the following (dollars in thousands):

Current wording

Interest expense increased $3.8 million, or 13.8%, from $27.1 million for the year ended December 31, 2023 to $30.9 million for the year ended December 31, 2024. Interest expense is comprised of the following (dollars in thousands):

Previous wording

Loss on early extinguishment of debt increased $0.6 million from $0.1 million for the year ended December 31, 2022 to $0.7 million for the year ended December 31, 2023. The loss in 2023 is related to the Company's repayment of the construction loan on the Home2 Woodland Hills hotel property.

Current wording

Loss on early extinguishment of debt decreased $0.7 million from $0.7 million for the year ended December 31, 2023 to $17 thousand for the year ended December 31, 2024. The loss in 2023 is related to the Company's repayment of the construction loan on the Home2 Woodland Hills hotel property.

Previous wording

gain in 2023 is related to the Company's termination of a portion of its corporate office lease to vacate and surrender possession

Current wording

Gain from partial lease termination decreased $0.2 million from $0.2 million for the year ended December 31, 2023. The gain in 2023 is related to the Company's termination of a portion of its corporate office lease to vacate and surrender possession of 7,374 rentable square feet in exchange for an early termination payment of $0.1 million.

Previous wording

Income tax expense remained unchanged at zero for the year ended December 31, 2022 and 2023. We are subject to income taxes based on the taxable income of our TRS Lessees at a combined federal and state tax rate of approximately 25%. The Company's TRS is expecting taxable losses in 2023 and recognizes a full valuation allowance equal to 100% of the net deferred tax assets due to the uncertainty of the TRS's ability to utilize these net deferred tax assets.

Current wording

Income tax expense remained unchanged at zero for the years ended December 31, 2024 and 2023. We are subject to income taxes based on the taxable income of our TRS Lessees at a combined federal and state tax rate of approximately 25%. The Company's TRS is expecting the taxable income in 2024 to be offset by prior year net operating losses and recognizes a full valuation allowance equal to 100% of the net deferred tax assets due to the uncertainty of the TRS's ability to utilize these net deferred tax assets.

Previous wording

Net income was $2.5 million for the year ended December 31, 2023, compared to net income of $9.9 million for the year ended December 31, 2022. The change in net income primarily was due to the factors discussed above.

Current wording

Net income was $4.0 million for the year ended December 31, 2024, compared to net income of $2.5 million for the year ended December 31, 2023. The change in net income primarily was due to the factors discussed above.

Previous wording

We plan to maintain a prudent capital structure and intend to maintain our leverage over the long term at a ratio of net debt to investment in hotels (at cost) (defined as our initial acquisition price plus the gross amount of any subsequent capital investment and excluding any impairment charges) at a level that will be similar to the levels at which we have operated in the past. A subsequent decrease in hotel property values will not necessarily cause us to repay debt to comply with this limitation. At December 31, 2023, our leverage ratio was approximately 24.8%, which decreased from 26.6% at December 31, 2022 based on the ratio of our net debt (total debt outstanding before deferred financing costs less unrestricted cash and cash equivalents) to hotel investments at cost. At December 31, 2023, we had total debt of $486.1 million at an average rate of approximately 5.5%. We intend to continue to fund our investments with a prudent balance of debt and equity. Our debt may include mortgage debt collateralized by our hotel properties and unsecured debt.

Current wording

We plan to maintain a prudent capital structure and intend to maintain our leverage over the long term at a ratio of net debt to investment in hotels (at cost) (defined as our initial acquisition price plus the gross amount of any subsequent capital investment) at a level that will be similar to the levels at which we have operated in the past. A subsequent decrease in hotel property values will not necessarily cause us to repay debt to comply with this limitation. At December 31, 2024, our leverage ratio was approximately 23.1%, which decreased from 24.8% at December 31, 2023 based on the ratio of our net debt (total debt outstanding before deferred financing costs less unrestricted cash and cash equivalents) to hotel investments at cost. At December 31, 2024, we had total debt of $409.2 million at an average rate of approximately 6.8%. We intend to continue to fund our investments with a prudent balance of debt and equity. Our debt may include mortgage debt collateralized by our hotel properties and unsecured debt.

Previous wording

At December 31, 2023 and 2022, we had $0 and $0, respectively, in outstanding borrowings under our revolving credit facility. We had $90.0 million and $0 in outstanding borrowings under our unsecured term loan at December 31, 2023 and 2022, respectively. We had $0 and $39.3 million in outstanding borrowings under our construction loan for the Home2 Woodland Hills hotel development at December 31, 2023 and 2022, respectively. At December 31, 2023, the maximum borrowing availability under our revolving credit facility was $260.0 million. We also had mortgage debt on individual hotels aggregating $396.1 million and $430.9 million at December 31, 2023 and 2022, respectively.

Current wording

At December 31, 2024 and 2023, we had $110.0 million and $0, respectively, in outstanding borrowings under our revolving credit facility. We had $140.0 million and $90.0 million in outstanding borrowings under our unsecured term loan at December 31, 2024 and 2023, respectively. At December 31, 2024, the maximum remaining borrowing availability under our revolving credit facility was $150.0 million. We also had mortgage debt on individual hotels aggregating $159.2 million and $396.1 million at December 31, 2024 and 2023, respectively.

Previous wording

On October 28, 2022, Chatham entered into a $215.0 million unsecured revolving credit facility and a $90.0 million unsecured delayed-draw term loan facility that replaced the Company’s previous $250 million revolving credit facility that was scheduled to mature on March 8, 2023. The revolving credit facility has an initial maturity of October 28, 2026 and provides two six-month extension options. The unsecured delayed-draw term loan facility has an initial maturity of October 28, 2025 and provides two one-year extension options. On December 19, 2022, Chatham executed an amendment to its unsecured revolving credit facility increasing commitments by $45.0 million for a total borrowing capacity of $260.0 million. Combined with its $90.0 million unsecured delayed-draw term loan, Chatham has $350.0 million of total commitments under the new facilities. Pricing on the new facilities is based on SOFR plus a spread of 1.50% to 2.25% for the revolving credit facility and a spread of 1.45% to 2.20% for the unsecured delayed-draw term loan facility based on the Company's leverage, and a credit spread adjustment of 0.10%.

Current wording

On October 28, 2022, Chatham entered into a $215.0 million unsecured revolving credit facility and a $90.0 million unsecured delayed-draw term loan facility that replaced the Company’s previous $250 million revolving credit facility that was scheduled to mature on March 8, 2023. The revolving credit facility has an initial maturity of October 28, 2026 and provides two six-month extension options. The unsecured delayed-draw term loan facility has an initial maturity of October 28, 2025 and provides two one-year extension options. On December 19, 2022, Chatham executed an amendment to its unsecured revolving credit facility, increasing commitments by $45.0 million for a total borrowing capacity of $260.0 million. On May 3, 2024, the Company amended its funded unsecured term loan to increase its size from $90.0 million to $140.0 million, its current balance outstanding as of December 31, 2024. Combined with its $140.0 million unsecured delayed-draw term loan, Chatham has $400.0 million of total commitments under the new facilities. Pricing on the new facilities is based on SOFR plus a spread of 1.50% to 2.25% for the revolving credit facility and a spread of 1.45% to 2.20% for the unsecured delayed-draw term loan facility based on the Company's leverage, and a credit spread adjustment of 0.10%.

Previous wording

Our mortgage debt agreements contain “cash trap” provisions that are triggered when the hotel’s operating results fall below a certain debt service coverage ratio or debt yield. When these provisions are triggered, all of the excess cash flow generated by the hotel is deposited directly into cash management accounts for the benefit of our lenders until a specified debt service coverage ratio or debt yield is reached. Such provisions do not allow the lender the right to accelerate repayment of the underlying debt. As of December 31, 2023, four of our mortgage debt lenders have enforced cash trap provisions resulting in $5.6 million of restricted cash. We do not expect that such cash traps will affect our ability to satisfy our short-term liquidity requirements.

Current wording

Our mortgage debt agreements contain “cash trap” provisions that are triggered when the hotel’s operating results fall below a certain debt service coverage ratio or debt yield. When these provisions are triggered, all of the excess cash flow generated by the hotel is deposited directly into cash management accounts for the benefit of our lenders until a specified debt service coverage ratio or debt yield is reached. Such provisions do not allow the lender the right to accelerate repayment of the underlying debt. As of December 31, 2024, one of our mortgage debt lenders have enforced cash trap provisions resulting in $0.2 million of restricted cash. We do not expect that such cash traps will affect our ability to satisfy our short-term liquidity requirements.

Previous wording

In December 2017, we established a $50 million dividend reinvestment and stock purchase plan (the "DRSPP") which we renewed in December 2020 and renewed again in January 2024. Under the DRSPP, shareholders may purchase additional common shares by reinvesting some or all of the cash dividends received on common shares. Shareholders may also make optional cash purchases of the Company's common shares subject to certain limitations detailed in the prospectus for the DRSPP. During the year ended December 31, 2023, the Company issued 5,896 common shares under the DRSPP at a weighted average price of $10.27, which generated $61 thousand of proceeds. As of December 31, 2023, there was approximately $47.8 million in common shares available for issuance under the DRSPP.

Current wording

In December 2017, we established a $50 million dividend reinvestment and stock purchase plan (the "DRSPP") which we renewed in December 2020 and renewed again in January 2024. Under the DRSPP, shareholders may purchase additional common shares by reinvesting some or all of the cash dividends received on common shares. Shareholders may also make optional cash purchases of the Company's common shares subject to certain limitations detailed in the prospectus for the DRSPP. During the year ended December 31, 2024, the Company issued 5,844 common shares under the DRSPP at a weighted average price of $9.15, which generated $53 thousand of proceeds. As of December 31, 2024, there was approximately $49.9 million in common shares available for issuance under the DRSPP.

Previous wording

Cash, cash equivalents, and restricted cash totaled $85.7 million as of December 31, 2023, an increase of $40.6 million from December 31, 2022, primarily due to net cash provided by operating activities of $76.4 million, net cash used in investing activities of $28.1 million, and net cash used in financing activities $7.7 million.

Current wording

Cash, cash equivalents, and restricted cash totaled $29.8 million as of December 31, 2024, a decrease of $55.9 million from December 31, 2023, primarily due to net cash provided by operating activities of $73.8 million, net cash used in investing activities of $29.2 million, and net cash used in financing activities $100.6 million.

Previous wording

Net cash flows provided by operating activities increased $4.9 million to $76.4 million in 2023 compared to $71.5 million in 2022. The increase in cash from operating activities was primarily due to improving operating results from our hotels which generated RevPAR growth of 6.1% in 2023 versus 2022.

Current wording

Net cash flows provided by operating activities decreased $2.6 million to $73.8 million in 2024 compared to $76.4 million in 2023. The decrease in cash from operating activities was primarily due to an increase in interest expense.

Previous wording

Net cash flows (used in) provided by investing activities decreased $58.1 million to $(28.1) million in 2023 compared to $30.0 million in 2022. For the year ended December 31, 2023, net cash flows used in investing activities of $(28.1) million consisted of $28.1 million related to capital improvements on our hotels. For the year ended December 31, 2022, net cash flows provided by investing activities of $30.0 million consisted of $79.6 million in net proceeds related to the sale of four hotel properties, $0.4 million of deferred key money received for the development of the Home2 Woodland Hills, partially offset by

Current wording

Net cash flows used in investing activities increased $1.1 million to $(29.2) million in 2024 compared to $(28.1) million in 2023. For the year ended December 31, 2024, net cash flows used in investing activities of $(29.2) million consisted of $30.6 million related to capital improvements on our hotels, $43.7 million related to the acquisition of one hotel, and $0.7 million of payments of franchise application costs, partially offset by $45.9 million in net proceeds related to the sale of three hotels For the year ended December 31, 2023, net cash flows used in investing activities of $28.1 million consisted of $28.1 million related to capital improvements on our hotels.

Previous wording

We expect to invest approximately $36.8 million on renovations, discretionary and emergency expenditures on our existing hotels in 2024, including improvements required under any brand PIP.

Current wording

We expect to invest approximately $25.7 million on renovations, discretionary and emergency expenditures on our existing hotels in 2025, including improvements required under any brand property improvement plan ("PIP").

Previous wording

Net cash flows used in financing activities decreased $78.5 million to $(7.7) million in 2023 compared to $(86.2) million in 2022. For the year ended December 31, 2023, net cash flows used in financing activities of $7.7 million were comprised of the repayment of our construction loan of $39.3 million, principal payments on mortgage debt of $117.7 million, distributions to common share and unit holders of $14.2 million, distributions on preferred shares of $8.0 million, and payments of deferred financing costs of $1.5 million, partially offset by borrowings on our unsecured term loan of $90.0 million and proceeds from the issuance of five new mortgage loans of $82.9 million. For the year ended December 31, 2022, net cash flows used in financing activities of $86.2 million were comprised of net repayments of our senior unsecured revolving credit facility of $70.0 million, principal payments on mortgage debt of $9.0 million, payments of deferred financing and offering costs of $3.5 million, distributions to unit holders of $0.1 million, and distributions on preferred shares of $8.0 million, partially offset by net borrowings on our construction loan of $4.3 million.

Current wording

Net cash flows used in financing activities increased $92.8 million to $(100.6) million in 2024 compared to $(7.7) million in 2023. For the year ended December 31, 2024, net cash flows used in financing activities of $(100.6) million were comprised of the repayment of mortgage debt of $297.2 million, distributions to common share and unit holders of $14.4 million, distributions on preferred shares of $8.0 million, payments of financing costs of $1.1 million, and payments of offering costs on common shares of $0.3 million, partially offset by net borrowings on our revolving credit facility of $110.0 million, borrowings on our unsecured term loan of $50.0 million, and proceeds from the issuance of mortgage debt of $60.3 million. For the year ended December 31, 2023, net cash flows used in financing activities of $(7.7) million were comprised of the repayment of our construction loan of $39.3 million, principal payments on mortgage debt of $117.7 million, distributions to common share and unit holders of $14.2 million, distributions on preferred shares of $8.0 million, and payments of deferred financing costs of $1.5 million, partially offset by borrowings on our unsecured term loan of $90.0 million and proceeds from the issuance of five new mortgage loans of $82.9 million.

Previous wording

We declared total dividends of $0.28 and $0.28 per common share and LTIP unit, respectively, for the year ended December 31, 2023 and $0.07 and $0.07 per common share and LTIP unit, respectively, for the year ended December 31, 2022. We declared total dividends of $1.65624 and $1.65624 per Series A preferred share for the years ended December 31, 2023 and 2022, respectively.

Current wording

We declared total dividends of $0.28 and $0.28 per common share and LTIP unit, respectively, for the year ended December 31, 2024, and $0.28 and $0.28 per common share and LTIP unit, respectively, for the year ended December 31, 2023. We declared total dividends of $1.65624 and $1.65624 per Series A preferred share for the years ended December 31, 2024 and 2023, respectively.

Previous wording

•At December 31, 2023, we had total debt principal and interest obligations of $550.5 million with $312.1 million of principal and interest payable within the next 12 months from December 31, 2023. $293.3 million of debt principal obligations payable during the next 12 months relate to maturities of the Company's mortgage loans secured by the Residence Inn Garden Grove, the SpringHill Suites Savannah, the Residence Inn Silicon Valley I, the Residence Inn Silicon Valley II, the Residence Inn San Mateo, the Residence Inn Mountain View, the Hilton Garden Inn Marina del Rey, and the Homewood Suites Boston-Billerica hotel properties. See Note 7, “Debt” to our consolidated financial statements for additional information relating to our property loans, revolving credit facility and unsecured term loan.

Current wording

•At December 31, 2024, we had total debt principal and interest obligations of $506.1 million with $181.6 million of principal and interest payable within the next 12 months from December 31, 2024 (excluding available extension options). Debt principal obligations payable during the next 12 months consists of $16.0 million related to the maturity of the Company's mortgage loan secured by the Hampton Inn & Suites Houston-Medical Center hotel property and $140.0 million related to the initial maturity of the Company's unsecured term loan. The Company has two 1-year extension options for its $140.0 million unsecured term loan. See Note 6, “Debt” to our consolidated financial statements for additional information relating to our property loans, revolving credit facility and unsecured term loan.

Previous wording

•Lease payments due within the next 12 months from year-end 2023 total $1.9 million. See Note 13, “Leases” to our consolidated financial statements for additional information relating to our corporate office and ground leases.

Current wording

•Lease payments due within the next 12 months from year-end 2024 total $2.0 million. See Note 12, “Leases” to our consolidated financial statements for additional information relating to our corporate office and ground leases.

Previous wording

Our hotel properties are periodically reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of the hotel properties may not be recoverable over management's estimated holding period.This estimated holding period incorporates management’s intent and ability to hold the hotel properties over the estimated holding period. Events or circumstances that may cause a review include, but are not limited to, 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. When such conditions exist, management will perform an analysis to determine if the estimated undiscounted future cash flows, without interest charges, from operations and the proceeds from the ultimate disposition of a hotel property exceed its carrying value. If the estimated undiscounted future cash flows are less than the carrying amount, an adjustment to reduce the carrying amount to the related hotel property's estimated fair value is recorded and an impairment loss recognized. For the year ended December 31, 2023, the Company incurred an impairment loss on one hotel property (See Note 5). For the year ended December 31, 2022, there were no impairment losses. For the year ended December 31, 2021, the Company incurred an impairment loss on one hotel property (See Note 5).

Current wording

Our hotel properties are periodically reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of the hotel properties may not be recoverable over management's estimated holding period.This estimated holding period incorporates management’s intent and ability to hold the hotel properties over the estimated holding period. Events or circumstances that may cause a review include, but are not limited to, 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. When such conditions exist, management will perform an analysis to determine if the estimated undiscounted future cash flows, without interest charges, from operations and the proceeds from the ultimate disposition of a hotel property exceed its carrying value. If the estimated undiscounted future cash flows are less than the carrying amount, an adjustment to reduce the carrying amount to the related hotel property's estimated fair value is recorded and an impairment loss recognized. For the year ended December 31, 2024, the Company incurred an impairment loss on one hotel property (See Note 5). For the year ended December 31, 2023, the Company incurred an impairment loss on one hotel property (See Note 5). For the year ended December 31, 2022, there were no impairment losses.

Previous wording

For properties the Company considers held for sale, depreciation and amortization are no longer recorded and the value the properties is recorded at the lower of depreciated cost or fair value, less costs to sell. If circumstances arise that were previously considered unlikely, and, as a result, the Company decides not to sell a property previously classified as held for sale, the Company will reclassify such property as held and used. Such property is measured at the lower of its carrying amount (adjusted for any depreciation and amortization expense that would have been recognized had the property been continuously classified as held and used) or fair value at the date of the subsequent decision not to sell. The Company classifies properties as held for sale when all criteria within the Financial Accounting Standards Board's ("FASB") guidance on the impairment or disposal of long-lived assets are met. As of December 31, 2023, we had no hotel properties that met the criteria to be presented as held for sale.

Current wording

For properties the Company considers held for sale, depreciation and amortization are no longer recorded and the value of the properties is recorded at the lower of depreciated cost or fair value, less costs to sell. If circumstances arise that were previously considered unlikely, and, as a result, the Company decides not to sell a property previously classified as held for sale, the Company will reclassify such property as held and used. Such property is measured at the lower of its carrying amount (adjusted for any depreciation and amortization expense that would have been recognized had the property been continuously classified as held and used) or fair value at the date of the subsequent decision not to sell. The Company classifies properties as held for sale when all criteria within the Financial Accounting Standards Board's ("FASB") guidance on the impairment or disposal of long-lived assets are met. As of December 31, 2024, we had no hotel properties that met the criteria to be presented as held for sale.