Xenia Hotels & Resorts, Inc.

Previous wording

Certain statements in this Quarterly Report on Form 10-Q, other than purely historical information, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These statements include statements about Xenia’s plans, objectives, strategies, financial performance and outlook, trends, the amount and timing of future cash distributions, prospects or future events and involve known and unknown risks that are difficult to predict. As a result, our actual financial results, performance, achievements or prospects may differ materially from those expressed or implied by these forward-looking statements. In some cases, you can identify forward-looking statements by the use of words such as “may,” “could,” “expect,” “intend,” “plan,” “seek,” “anticipate,” “believe,” “estimate,” “guidance,” “predict,” “potential,” “continue,” “likely,” “will,” “would,” “illustrative” and variations of these terms and similar expressions, or the negative of these terms or similar expressions. Such forward-looking statements are necessarily based upon estimates and assumptions that, while considered reasonable by Xenia and its management based on their knowledge and understanding of the business and industry, are inherently uncertain. These statements are not guarantees of future performance, and stockholders should not place undue reliance on forward-looking statements. Forward-looking statements in this Form 10-Q include, among others, statements about our plans, strategies and the impact of macroeconomic factors, including inflation, rising interest rates, a potential domestic and/or global recession, global conflicts, the evolving workforce and wage landscape, capital expenditures, the ability to consummate acquisitions and dispositions of hotel properties, liquidity and derivations thereof, financial performance and potential dividends, prospects or future events. There are a number of risks, uncertainties and other important factors, many of which are beyond our control, that could cause our actual results to differ materially from the forward-looking statements contained in this Quarterly Report on Form 10-Q. Such risks, uncertainties and other important factors include, among others: the risk factors set forth under “Part I-Item 1A. Risk Factors” and “Part II-Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission (the “SEC”) on February 27, 2024, as may be updated elsewhere in this report and the information set forth in other Quarterly Reports on Form 10-Q and Current Reports on Form 8-K that we have filed or will file with the SEC; general economic uncertainty and a contraction in the U.S. or global economy or low levels of economic growth; macroecon…

Excerpt shortened here; the source contains the full paragraph.

Current wording

Certain statements in this Quarterly Report on Form 10-Q, other than purely historical information, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These statements include statements about Xenia’s plans, objectives, strategies, financial performance and outlook, trends, the amount and timing of future cash distributions, prospects or future events and involve known and unknown risks that are difficult to predict. As a result, our actual financial results, performance, achievements or prospects may differ materially from those expressed or implied by these forward-looking statements. In some cases, you can identify forward-looking statements by the use of words such as “may,” “could,” “expect,” “intend,” “plan,” “seek,” “anticipate,” “believe,” “estimate,” “guidance,” “predict,” “potential,” “continue,” “likely,” “will,” “would,” “illustrative” and variations of these terms and similar expressions, or the negative of these terms or similar expressions. Such forward-looking statements are necessarily based upon estimates and assumptions that, while considered reasonable by Xenia and its management based on their knowledge and understanding of the business and industry, are inherently uncertain. These statements are not guarantees of future performance, and stockholders should not place undue reliance on forward-looking statements. Forward-looking statements in this Form 10-Q include, among others, statements about our plans, strategies and the impact of macroeconomic factors, including inflation, changing interest rates, a potential domestic and/or global recession, global conflicts, trade disputes, the evolving workforce and wage landscape, capital expenditures, the ability to consummate acquisitions and dispositions of hotel properties, changes in the geographic markets where our revenues are concentrated, insurance recoveries, liquidity and derivations thereof, financial performance and potential dividends, prospects or future events. There are a number of risks, uncertainties and other important factors, many of which are beyond our control, that could cause our actual results to differ materially from the forward-looking statements contained in this Quarterly Report on Form 10-Q. Such risks, uncertainties and other important factors include, among others: the risk factors set forth under “Part I-Item 1A. Risk Factors” and “Part II-Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission (the “SEC”) on February 25, 2025, as may be updated elsewhere in this report and the information set forth in other Quarterly Reports on Form 10-Q and Current Reports on Form 8-K that we have filed or will file with the SEC; general e…

Excerpt shortened here; the source contains the full paragraph.

Previous wording

Xenia Hotels & Resorts, Inc. ("we", "us", "our", "Xenia" or the "Company") is a self-advised and self-administered REIT that invests in uniquely positioned luxury and upper upscale hotels and resorts with a focus on the top 25 lodging markets as well as key leisure destinations in the United States ("U.S."). As of September 30, 2024, we owned 31 hotels and resorts, comprising 9,408 rooms across 14 states. Our hotels are primarily operated and/or licensed by industry leaders such as Marriott, Hyatt, Fairmont, Kimpton, Loews, Hilton and The Kessler Collection.

Current wording

Xenia Hotels & Resorts, Inc. ("we", "us", "our", "Xenia" or the "Company") is a self-advised and self-administered REIT that invests in uniquely positioned luxury and upper upscale hotels and resorts with a focus on the top 25 lodging markets as well as key leisure destinations in the United States ("U.S."). As of March 31, 2025, we owned 31 hotels and resorts, comprising 9,413 rooms across 14 states. Our hotels are operated and/or licensed by industry leaders such as Marriott, Hyatt, Fairmont, Kimpton, Loews, Hilton and The Kessler Collection.

Previous wording

The accompanying condensed consolidated financial statements include the accounts of the Company, the Operating Partnership, and XHR Holding. The Company's subsidiaries generally consist of limited liability companies, limited partnerships and the TRS. The effects of all inter-company transactions have been eliminated. Corporate costs directly associated with our executive offices, personnel and other administrative costs are reflected as general and administrative expenses on the condensed consolidated statements of operations and comprehensive income (loss).

Current wording

The accompanying condensed consolidated financial statements include the accounts of the Company, XHR LP (the "Operating Partnership"), and XHR Holding, Inc. and its subsidiaries. The Company's subsidiaries generally consist of limited liability companies, limited partnerships and the TRS. The effects of all inter-company transactions have been eliminated. Corporate costs directly associated with our executive offices, personnel and other administrative costs are reflected as general and administrative expenses on the condensed consolidated statements of operations and comprehensive income.

Previous wording

We measure hotel results of operations and the operating performance of our business by evaluating financial and non-financial metrics such as Revenue Per Available Room ("RevPAR"); average daily rate ("ADR"); occupancy rate ("occupancy"); earnings before interest, income taxes, depreciation and amortization for real estate ("EBITDAre") and Adjusted EBITDAre; and funds from operations ("FFO") and Adjusted FFO. We evaluate individual hotel and company-wide performance with comparisons to budgets, prior periods and competing properties. RevPAR, ADR, and occupancy may be impacted by macroeconomic factors as well as regional and local economies and events. See "Non-GAAP Financial Measures" for further discussion of the Company's use, definitions and limitations of EBITDAre, Adjusted EBITDAre, FFO and Adjusted FFO.

Current wording

and funds from operations ("FFO") and Adjusted FFO. We evaluate individual hotel and company-wide performance with comparisons to budgets, prior periods and competing properties. RevPAR, ADR, and occupancy may be impacted by macroeconomic factors as well as regional and local economies and events. See "Non-GAAP Financial Measures" for further discussion of the Company's use, definitions and limitations of EBITDAre, Adjusted EBITDAre, FFO and Adjusted FFO.

Previous wording

The U.S. lodging industry historically exhibits a strong correlation to U.S. GDP, which increased at an estimated annual rate of approximately 2.8% during the third quarter of 2024, according to the U.S. Department of Commerce, compared to the increase in annual rate growth trend from the first and second quarters of 2024 of 1.4% and 3.0%, respectively. The increase during the third quarter reflected increases in consumer spending, exports and federal government spending that were partially offset by an increase in imports. In addition, the unemployment rate remained flat at 4.1% in September 2024 compared to June 2024 and rose slightly compared to 3.8% in March 2024. We continue to monitor and evaluate the challenges associated with inflationary pressures, rising interest rates, a potential domestic and/or global recession, global conflicts, and the evolving workforce and wage landscape. The impact of these potential challenges could negatively impact the Company’s operating results as well as its ability to consummate acquisitions and dispositions of hotel properties in the near term.

Current wording

The U.S. lodging industry historically exhibits a strong correlation to U.S. GDP, which decreased at an estimated annual rate of approximately 0.3% during the first quarter of 2025, according to the U.S. Department of Commerce, compared to the increase in annual rate growth trend from the third and fourth quarters of 2024 of 3.1% and 2.4%, respectively. The decrease during the first quarter reflected a decrease in government spending and an increase in imports, partially offset by increases in investment, consumer spending and exports. In addition, the unemployment rate rose slightly to 4.2% in March 2025 compared to 4.1% in December 2024 and September 2024. We continue to monitor and evaluate the challenges associated with inflationary pressures, changing interest rates, a potential domestic and/or global recession, global conflicts, trade disputes, and the evolving workforce and wage landscape. The impact of these potential challenges could negatively impact the Company’s operating results as well as its ability to consummate acquisitions and dispositions of hotel properties in the near term.

Previous wording

Our total portfolio RevPAR, which includes the results of hotels sold or acquired for the period of ownership by the Company, increased 1.6% and 0.6% to $160.96 and $174.50 for the three and nine months ended September 30, 2024 compared to $158.48 and $173.43 for the three and nine months ended September 30, 2023. The increase in our total portfolio RevPAR for the three and nine months ended September 30, 2024 compared to the same periods in 2023 was driven primarily by an increase in occupancy, partially offset by disruption from renovations and normalizing leisure demand. Further, demand has continued to shift to a more traditional mix of leisure, business transient and group within our portfolio. Excluding Grand Hyatt Scottsdale Resort, which is in the final stages of a transformative renovation, total portfolio RevPAR increased 1.2% and 3.4% to $168.21 and $179.18 for the three and nine months ended September 30, 2024 compared to $166.14 and $173.29 for the three and nine months ended September 30, 2023, respectively.

Current wording

Our total portfolio RevPAR, which includes the results of hotels sold or acquired for the period of ownership by the Company, increased 6.7% to $188.73 for the three months ended March 31, 2025 compared to $176.86 for the three months ended March 31, 2024. The increase in our total portfolio RevPAR for the three months ended March 31, 2025 compared to the same periods in 2024 was driven primarily by increases in occupancy and average daily rate as well as disruption from renovations in 2024. Further, demand has continued to shift to a more traditional mix of leisure, business transient and group within our portfolio. Excluding Grand Hyatt Scottsdale Resort, which was undergoing a transformative renovation during 2024, total portfolio RevPAR increased 4.1% to $185.38 for the three months ended March 31, 2025 compared to $178.07 for the three months ended March 31, 2024.

Previous wording

Net income increased 46.1% for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023, which was primarily attributed to an income tax benefit of $4.0 million compared to income tax expense of $5.4 million, a $4.7 million reduction in depreciation and amortization expense, a $3.6 million reduction in interest expense, a $1.6 million increase in gain on sale of investment properties, a $1.2 million reduction in loss on extinguishment of debt, a $1.1 million increase in other income and a $0.5 million increase in gain on business interruption. These increases were partially offset by a $15.7 million reduction in hotel operating income, a $0.5 million increase in impairment and other losses and a $0.3 million increase in other operating expenses.

Current wording

Net income increased 84.1% for the three months ended March 31, 2025 compared to the three months ended March 31, 2024, which was primarily attributed to an $8.5 million increase in hotel operating income for our 31-comparable hotels, a $1.3 million reduction in general and administrative expenses, a $0.3 million reduction in impairment and other losses and a $0.1 million increase in other income. These increases were partially offset by a $1.2 million increase in depreciation and amortization expense, a $0.7 million increase in interest expense, a $0.7 million reduction in gain on business interruption and a $0.1 million increase in income tax expense.

Previous wording

Adjusted EBITDAre attributable to common stock and unit holders for the three and nine months ended September 30, 2024 decreased 4.4% and 7.5% compared to the three and nine months ended September 30, 2023 and Adjusted FFO attributable to common stock and unit holders decreased 9.0% and 0.7% for the same periods. Refer to "Non-GAAP Financial Measures" for the definition of these financial measures, a description of the reasons we believe they are useful to investors as key supplemental measures of our operating performance and the reconciliation of these non-GAAP financial measures to net income (loss) attributable to common stock and unit holders.

Current wording

Adjusted EBITDAre and Adjusted FFO attributable to common stock and unit holders for the three months ended March 31, 2025 increased 11.8% and 14.4%, respectively, compare to the three months ended March 31, 2024. Refer to "Non-GAAP Financial Measures" for the definition of these financial measures, a description of the reasons we believe they are useful to investors as key supplemental measures of our operating performance and the reconciliation of these non-GAAP financial measures to net income attributable to common stock and unit holders.

Previous wording

The following table sets forth certain operating information for the three and nine months ended September 30, 2024 and 2023:

Current wording

The following table sets forth certain operating information for the three months ended March 31, 2025 and 2024:

Previous wording

(1) In March 2024, we added one newly created room at Grand Bohemian Hotel Orlando, Autograph Collection. In April 2023, we added three newly created rooms at The Ritz-Carlton, Denver.

Current wording

(1) In February 2025, we added five newly created rooms at Grand Hyatt Scottsdale Resort. In March 2024, we added one newly created room at Grand Bohemian Hotel Orlando, Autograph Collection.

Previous wording

Rooms revenues for our total portfolio increased $0.9 million, or 0.7%, to $139.6 million for the three months ended September 30, 2024 from $138.7 million for the three months ended September 30, 2023 driven primarily by an increase in occupancy which was partially offset by disruption from renovations, normalizing leisure demand, the impact from hurricanes and a decline in average daily rate. The increase is net of a reduction of $1.2 million attributed to the sale of Lorien Hotel & Spa in July 2024. Excluding Grand Hyatt Scottsdale Resort, which is in the final stages of a transformative renovation, rooms revenues for the three months ended September 30, 2024 increased $1.6 million, or 1.2%, when compared to the prior period.

Current wording

Rooms revenues for our total portfolio increased $6.7 million, or 4.4%, to $159.9 million for the three months ended March 31, 2025 from $153.1 million for the three months ended March 31, 2024 driven primarily by an increases in occupancy and average daily rate, as well as disruption from renovations in the prior period. The increase is net of a reduction of $1.2 million attributed to the sale of Lorien Hotel & Spa in July 2024. Excluding Grand Hyatt Scottsdale Resort, rooms revenues for the three months ended March 31, 2025 increased $3.7 million, or 2.6%, when compared to the prior period.

Previous wording

Food and beverage revenues increased $3.0 million, or 4.1%, to $74.8 million for the three months ended September 30, 2024 from $71.8 million for the three months ended September 30, 2023 primarily due to an increase in occupancy. The increase is net of a reduction of $0.4 million attributed to the sale of Lorien Hotel & Spa in July 2024 and the impact from hurricanes. Excluding Grand Hyatt Scottsdale Resort, food and beverage revenues for the three months ended September 30, 2024 increased $3.4 million, or 4.8%, when compared to the prior period.

Current wording

Food and beverage revenues increased $11.9 million, or 12.9%, to $104.7 million for the three months ended March 31, 2025 from $92.8 million for the three months ended March 31, 2024 primarily due to an increase in occupancy as well as disruption from renovations in the prior period. The increase is net of a reduction of $0.5 million attributed to the sale of Lorien Hotel & Spa in July 2024. Excluding Grand Hyatt Scottsdale Resort, food and beverage revenues for the three months ended March 31, 2025 increased $7.7 million, or 8.8%, when compared to the prior period.

Previous wording

Other revenues increased $0.9 million, or 4.2%, to $22.4 million for the three months ended September 30, 2024 from $21.5 million for the three months ended September 30, 2023 primarily as a result of increased occupancy which was partially offset by disruption from renovations. This increase is net of a reduction of $0.3 million attributed to the sale of Lorien Hotel & Spa in July 2024. Excluding Grand Hyatt Scottsdale Resort, other revenues for the three months ended September 30, 2024 increased $1.5 million, or 7.2%, when compared to the prior period.

Current wording

Other revenues increased $2.8 million, or 12.8%, to $24.4 million for the three months ended March 31, 2025 from $21.6 million for the three months ended March 31, 2024 primarily as a result of increased occupancy as well as disruption from renovations in the prior period. This increase is net of a reduction of $0.4 million attributed to the sale of Lorien Hotel & Spa in July 2024. Excluding Grand Hyatt Scottsdale Resort, other revenues for the three months ended March 31, 2025 increased $2.3 million, or 11.4%, when compared to the prior period.

Previous wording

Total hotel operating expenses increased $8.0 million, or 4.8%, to $175.7 million for the three months ended September 30, 2024 from $167.7 million for the three months ended September 30, 2023 largely due to increasing labor costs partially offset by disruption from renovations. This increase is net of a reduction of $1.6 million attributed to the sale of Lorien Hotel & Spa in July 2024 and the impact from hurricanes. Excluding Grand Hyatt Scottsdale Resort, total hotel operating expenses for the three months ended September 30, 2024 increased $8.1 million, or 5.0%, when compared to the prior period.

Current wording

Total hotel operating expenses increased $12.5 million, or 6.8%, to $195.5 million for the three months ended March 31, 2025 from $183.0 million for the three months ended March 31, 2024 largely due to increases in occupancy as well as disruption from renovations in the prior period. This increase is net of a reduction of $2.0 million attributed to the sale of Lorien Hotel & Spa in July 2024. Excluding Grand Hyatt Scottsdale Resort, total hotel operating expenses for the three months ended March 31, 2025 increased $8.8 million, or 5.1%, when compared to the prior period.

Previous wording

Depreciation and amortization expense decreased $1.3 million, or 3.8%, and $4.7 million, or 4.7%, to $31.8 million and $95.6 million for the three and nine months ended September 30, 2024 from $33.1 million and $100.3 million for the three and nine months ended September 30, 2023, respectively. The decrease was primarily attributed to fully depreciated assets during the comparable periods partially offset by the timing of new assets being placed in service and the sale of Lorien Hotel & Spa in July 2024.

Current wording

Depreciation and amortization expense increased $1.2 million, or 3.8%, to $33.2 million for the three months ended March 31, 2025 from $32.0 million for the three months ended March 31, 2024. The increase was primarily attributed to the timing of new assets being placed in service partially offset by fully depreciated assets during the comparable periods and the sale of Lorien Hotel & Spa in July 2024.

Previous wording

Real estate taxes, personal property taxes and insurance expense increased $0.2 million, or 1.5%, to $13.1 million for the three months ended September 30, 2024 from $12.9 million for the three months ended September 30, 2023. This increase compared to the prior period was primarily attributed to a $0.5 million increase in insurance premiums and was partially offset by a net $0.2 million reduction in real estate taxes primarily attributed to tax refunds.

Current wording

Real estate taxes, personal property taxes and insurance expense increased $0.2 million, or 1.7%, to $13.7 million for the three months ended March 31, 2025 from $13.5 million for the three months ended March 31, 2024. This increase was primarily attributed to a $0.6 million increase in real estate taxes partially offset by $0.3 million reduction in insurance expense.

Previous wording

General and administrative expenses decreased $1.8 million, or 18.8%, to $7.8 million for the three months ended September 30, 2024 from $9.6 million the three months ended September 30, 2023. The decrease is primarily related to a decrease in stock compensation expense resulting from the timing of accelerated expense recognition for awards granted to participants that have met or will meet retirement eligibility requirements prior to the applicable vesting dates.

Current wording

General and administrative expenses decreased $1.3 million, or 13.1%, to $8.9 million for the three months ended March 31, 2025 from $10.3 million the three months ended March 31, 2024. The decrease is primarily related to a decrease in stock compensation expense resulting from the timing of accelerated expense recognition for awards granted to participants that have met or will meet retirement eligibility requirements prior to the applicable vesting dates.

Previous wording

Gain on business interruption insurance was $0.7 million for the nine months ended September 30, 2024, which was attributed to insurance proceeds, net of license and management fees, for a portion of lost income related to a restaurant kitchen fire which occurred in 2023.

Current wording

Gain on business interruption insurance was $0.7 million for the three months ended March 31, 2024, which was attributed to insurance proceeds, net of license and management fees, for a portion of lost income related to a restaurant kitchen fire which occurred in 2023.

Previous wording

Income tax benefit decreased $1.0 million, or 62.8%, to $0.6 million for the three months ended September 30, 2024 from $1.6 million for the three months ended September 30, 2023. This decrease is primarily attributed to lower projected taxable income when compared to the prior periods and the use of federal and state net operating loss carryforwards.

Current wording

Income tax expense increased $0.1 million, or 19.5%, to $0.9 million for the three months ended March 31, 2025 from $0.7 million for the three months ended March 31, 2024. This increase is primarily attributed to higher projected taxable income when compared to the prior periods partially offset by the use of federal and state net operating loss carryforwards.

Previous wording

We expect to meet our short-term liquidity requirements from cash on hand, cash flow from hotel operations, use of our unencumbered asset base, asset dispositions, borrowings under our revolving line of credit, and proceeds from various capital market transactions, including issuances of debt and equity securities. The objectives of our cash management policy are to maintain the availability of liquidity and minimize operational costs.

Current wording

We expect to meet our short-term liquidity requirements from cash on hand, cash flow from hotel operations, use of our unencumbered asset base, asset dispositions, borrowings under our Revolving Credit Facility, and proceeds from various capital market transactions, including issuances of debt and equity securities. The objectives of our cash management policy are to maintain the availability of liquidity and minimize operational costs.

Previous wording

As of September 30, 2024, we had $161.5 million of consolidated cash and cash equivalents and $63.2 million of restricted cash and escrows. The restricted cash as of September 30, 2024 primarily consisted of $57.3 million related to FF&E reserves as required per the terms of our management and franchise agreements, $3.5 million in deposits made for capital projects and cash held in mortgage escrows of $2.4 million for real estate taxes and replacement reserves.

Current wording

As of March 31, 2025, we had $112.6 million of consolidated cash and cash equivalents and $69.5 million of restricted cash and escrows. The restricted cash as of March 31, 2025 primarily consisted of $61.7 million related to FF&E reserves as required per the terms of our management and franchise agreements, $3.5 million in an interest-bearing escrow account held with a lender, cash held in restricted escrows of $3.5 million primarily for real estate taxes and mortgage escrows and $0.7 million in deposits made for capital projects.

Previous wording

As of September 30, 2024, there was no outstanding balance on our revolving line of credit and the full $450 million was available to be borrowed.

Current wording

As of March 31, 2025, there was no outstanding balance on our Revolving Credit Facility and the full $500 million was available to be borrowed.

Previous wording

We believe that our cash position, short-term investments, cash from operations, borrowing capacity under our revolving line of credit, and access to the capital markets, including pursuant to our ATM program, will be adequate to meet all of our funding requirements and capital deployment objectives both in the short-term and long-term.

Current wording

We believe that our cash position, short-term investments, cash from operations, borrowing capacity under our Revolving Credit Facility, and access to the capital markets, including pursuant to our ATM program, will be adequate to meet all of our funding requirements and capital deployment objectives both in the short-term and long-term.

Previous wording

As of September 30, 2024, our outstanding total debt was $1.4 billion and had a weighted-average interest rate of 5.50%.

Current wording

As of March 31, 2025, our outstanding total debt was $1.4 billion and had a weighted-average interest rate of 5.67%.

Previous wording

Our mortgage loan agreements require contributions to be made to FF&E reserves and the compliance with certain financial covenants.

Current wording

Our mortgage loan agreements require contributions to be made to FF&E reserves and the compliance with certain financial covenants. We intend to refinance or payoff with cash on hand the mortgage loan maturing March 2026 collateralized by Grand Bohemian Hotel Orlando, Autograph Collection.

Previous wording

On November 4, 2024, XHR LP amended and restated the credit agreement governing its corporate credit facilities to replace the credit facilities outstanding thereunder with a new $825 million senior unsecured credit facility comprised of the Revolving Credit Facility, the 2024 Initial Term Loan, and the 2024 Delayed Draw Term Loan, pursuant to the Amended and Restated Credit Agreement (each as defined in "Part II-Item 5. Other Information" below).

Current wording

In January 2023, the Operating Partnership entered into a senior unsecured credit facility pursuant to a Revolving Credit and Term Loan Agreement, dated as of January 10, 2023 (the "2023 Credit Agreement"), by and among the Operating Partnership, JPMorgan Chase Bank, N.A., as administrative agent, and the lenders and other parties thereto. In November 2024, the Operating Partnership amended and restated the 2023 Credit Agreement to replace the credit facilities outstanding thereunder with a new $825 million senior unsecured credit facility comprised of a $500 million revolving line of credit (the “Revolving Credit Facility”), a $225 million term loan (the “2024 Initial Term Loan”), and a $100 million delayed draw term loan commitment (the loans to be extended thereunder, the “2024 Delayed Draw Term Loan” and, together with the 2024 Initial Term Loan, the "2024 Term Loans"), pursuant to an amended and restated revolving credit and term loan agreement with a syndicate of bank lenders, JPMorgan Chase Bank, N.A., as administrative agent, and the other parties thereto (the “Amended and Restated Credit Agreement”). A portion of the revolving loan commitments under the Amended and Restated Credit Agreement is available for the issuance of letters of credit in an amount not to exceed $25 million. The Amended and Restated Credit Agreement provides the Operating Partnership with the option to request an uncommitted increase in the revolving loan commitments and/or add an uncommitted term loan in an aggregate principal amount of $300 million. The Revolving Credit Facility matures in November 2028 and can be extended up to two additional six-month periods. The Revolving Credit Facility’s interest rate is based, at the Company's option, on a pricing grid with a range of (i) 145 to 275 basis points over the applicable adjusted term SOFR rate or (ii) 45 to 175 basis points over the applicable alternative base rate, in each case as determined by the Company’s leverage ratio. The proceeds of the 2024 Initial Term Loan were used to refinance the Operating Partnership’s previously outstanding term loans.

Previous wording

The Revolving Credit Facility matures in November 2028 and can be extended up to an additional year. The Revolving Credit Facility’s interest rate is based on a pricing grid with a range of 145 to 275 basis points over the applicable adjusted term SOFR rate as determined by the Company’s leverage ratio. As of November 4, 2024, no borrowings were outstanding under the Revolving Credit Facility. The 2024 Initial Term Loan and 2024 Delayed Draw Term Loan each mature in November 2028, can be extended up to an additional year, and bear interest rates consistent with the pricing grid on the Revolving Credit Facility. The proceeds of the 2024 Initial Term Loan were used to refinance the Operating Partnership’s previously outstanding term loans, and the 2024 Delayed Draw Term Loan may be used by the Company to refinance other indebtedness and for general working capital purposes.

Current wording

In January 2025, the Company drew the 2024 Delayed Draw Term Loan and used a portion of the borrowings to repay the then outstanding balance on the Revolving Credit Facility. In accordance with the Amended and Restated Credit Agreement, the remaining proceeds may be used by the Company to refinance other indebtedness and for general working capital purposes. The 2024 Term Loans each mature in November 2028, can be extended up to two additional six-month periods, and bear interest rates consistent with the pricing grid on the Revolving Credit Facility.

Previous wording

The indentures governing the Senior Notes contain customary covenants that limit our ability and, in certain circumstances, the ability of our subsidiaries, to borrow money, create liens on assets, make distributions and pay dividends on or redeem or repurchase stock, make certain types of investments, sell stock in certain subsidiaries, enter into agreements that restrict dividends or other payments from subsidiaries, enter into transactions with affiliates, issue guarantees of indebtedness, and sell assets or merge with other companies. These limitations are subject to a number of important exceptions and qualifications set forth in the indentures.

Current wording

On May 27, 2021, the Operating Partnership entered into the indenture governing our 2029 Senior Notes ("the 2029 Notes Indenture"). On November 25, 2024, the Operating Partnership entered into the indenture governing our 2030 Senior Notes (the "2030 Notes Indenture" and together with the 2029 Notes Indenture, the "indentures"). The indentures contain customary covenants that limit the Operating Partnership's ability and, in certain circumstances, the ability of its subsidiaries, to borrow money, create liens on assets, make distributions and pay dividends, redeem or repurchase stock, make certain types of investments, sell stock in certain subsidiaries, enter into agreements that restrict dividends or other payments from subsidiaries, enter into transactions with affiliates, issue guarantees of indebtedness, and sell assets or merge with other companies. These limitations are subject to a number of important exceptions and qualifications set forth in the indentures.

Previous wording

As of September 30, 2024, we were not in compliance with a debt covenant on one mortgage loan which resulted in an event of default. We cured the default in October 2024 by depositing $2.7 million in an interest-bearing escrow account held by the lender. We were current on all loan payments and not otherwise in default under the revolving line of credit, corporate credit facility term loans, remaining mortgage loans or Senior Notes.

Current wording

As of March 31, 2025, the Company was in violation of a debt covenant on one mortgage loan. The Company cured the violation by depositing a total of $5.0 million, inclusive of $3.5 million funded in 2024, in an interest-bearing escrow account held by the lender. As of March 31, 2025, the Company was in compliance with all other debt covenants, current on all loan payments and not otherwise in default under the revolving credit facility, corporate credit facility term loans, remaining mortgage loans or Senior Notes.

Previous wording

As of September 30, 2024, we had six interest rate swaps with an aggregate notional amount of $280.0 million. These swaps fix the variable interest rate on one mortgage loan for a portion of the term and fix SOFR for a portion of the terms of the 2023 Term Loans. The 2023 Term Loans spread may vary, as it is determined by our leverage ratio.

Current wording

As of March 31, 2025, we had one interest rate swap with an aggregate notional amount of $55.0 million. This swap fixes the variable interest rate on one mortgage loan for a portion of the term.

Previous wording

We maintain an ATM program pursuant to the ATM Agreement. In accordance with the terms of the ATM Agreement, the Company may from time to time offer and sell shares of its common stock having an aggregate gross offering price of up to $200 million. No shares were sold under the ATM Agreement during the three and nine months ended September 30, 2024. As of September 30, 2024, we had $200 million available for sale under the ATM Agreement.

Current wording

We maintain an ATM program pursuant to the ATM Agreement. In accordance with the terms of the ATM Agreement, the Company may from time to time offer and sell shares of its common stock having an aggregate gross offering price of up to $200 million. No shares were sold under the ATM Agreement during the three months ended March 31, 2025. As of March 31, 2025, we had $200 million available for sale under the ATM Agreement.

Previous wording

During the three and nine months ended September 30, 2024, 146,863 and 614,970 shares were repurchased under the Repurchase Program, at a weighted-average price of $12.78 and $13.34 per share for an aggregate purchase price of $1.9 million an $8.2 million, respectively. During the three and nine months ended September 30, 2023, 2,070,777 and 6,516,485 shares were repurchased under the Repurchase Program, at a weighted-average price of $12.09 and $12.85 per share for an aggregate purchase price of $25.0 million and $83.7 million, respectively. As of September 30, 2024, we had approximately $125.5 million remaining under our share repurchase authorization.

Current wording

During the three months ended March 31, 2025, 2,733,149 shares were repurchased under the Repurchase Program, at a weighted-average price of $13.09 per share for an aggregate purchase price of $35.8 million. During the three months ended March 31, 2024, 468,107 shares were repurchased under the Repurchase Program, at a weighted-average price of $13.51 per share for an aggregate purchase price of $6.3 million. As of March 31, 2025, the Company had approximately $82.1 million remaining under its share repurchase authorization.

Previous wording

We maintain each of our properties in good repair and condition and in conformity with applicable laws and regulations, franchise agreements and management agreements. Routine capital expenditures are administered by the property management companies. However, we have approval rights over the capital expenditures as part of the annual budget process for each of our properties. From time to time, certain of our hotels may be undergoing renovations as a result of our decision to upgrade portions of the hotels, such as guest rooms, public space, meeting space and/or restaurants, in order to better compete with other hotels in our markets. In addition, upon the acquisition of a hotel we often are required to complete a property improvement plan in order to bring the hotel into compliance with the respective brand standards. If permitted by the terms of the management agreement, funding for a renovation will first come from the FF&E reserves. We are obligated to maintain reserve funds with respect to certain agreements with our hotel management companies, franchisors and lenders to provide funds, generally 3% to 5% of hotel revenues, sufficient to cover the cost of certain capital improvements to the hotels and to periodically replace and update furniture, fixtures and equipment. Most of the agreements require that we reserve this cash in separate accounts. To the extent that the FF&E reserves are not available or adequate to cover the cost of the renovation, we may fund a portion of the renovation with cash on hand, borrowings from our revolving line of credit and/or other sources of available liquidity. We have been and will continue to be prudent with respect to our capital spending, taking into account our cash flows from operations.

Current wording

We maintain each of our properties in good repair and condition and in conformity with applicable laws and regulations, franchise agreements and management agreements. Routine capital expenditures are administered by the property management companies. However, we have approval rights over the capital expenditures as part of the annual budget process for each of our properties. From time to time, certain of our hotels may be undergoing renovations as a result of our decision to upgrade portions of the hotels, such as guest rooms, public space, meeting space and/or restaurants, in order to better compete with other hotels in our markets. In addition, upon the acquisition of a hotel we often are required to complete a property improvement plan in order to bring the hotel into compliance with the respective brand standards. If permitted by the terms of the management agreement, funding for a renovation will first come from the FF&E reserves. We are obligated to maintain reserve funds with respect to certain agreements with our hotel management companies, franchisors and lenders to provide funds, generally 3% to 5% of hotel revenues, sufficient to cover the cost of certain capital improvements to the hotels and to periodically replace and update furniture, fixtures and equipment. Most of the agreements require that we reserve this cash in separate accounts. To the extent that the FF&E reserves are not available or adequate to cover the cost of the renovation, we may fund a portion of the renovation with cash on hand, borrowings from our revolving credit facility and/or other sources of available liquidity. We have been and will continue to be prudent with respect to our capital spending, taking into account our cash flows from operations.

Previous wording

As of September 30, 2024 and December 31, 2023, we had a total of $57.3 million and $49.7 million, respectively, of FF&E reserves. During the three and nine months ended September 30, 2024, we made total capital expenditures of $46.9 million and $116.2 million, respectively, and during the three and nine months ended September 30, 2023, we made total capital expenditures of $35.5 million and $69.5 million, respectively.

Current wording

As of March 31, 2025 and December 31, 2024, we had a total of $61.7 million and $58.9 million, respectively, of FF&E reserves. During the three months ended March 31, 2025 and March 31, 2024, we made total capital expenditures of $32.4 million and $33.4 million, respectively.

Previous wording

As of September 30, 2024, we had various contracts outstanding with third-parties in connection with the renovation of certain of our hotel properties. The remaining commitments under these contracts as of September 30, 2024 totaled $55.5 million.

Current wording

As of March 31, 2025, we had various contracts outstanding with third-parties in connection with the renovation of certain of our hotel properties. The remaining commitments under these contracts as of March 31, 2025 totaled $24.2 million.

Previous wording

Our principal sources of cash are cash flows from operations, borrowings under debt financings, including draws on our revolving line of credit and from various types of equity offerings or the sale of our hotels. Our principal uses of cash are asset acquisitions, capital investments, routine debt service and debt repayments, operating costs, corporate expenses and dividends. We may also elect to use cash to buy back our common stock in the future under the Repurchase Program.

Current wording

Our principal sources of cash are cash flows from operations, borrowings under debt financings, including draws on our Revolving Credit Facility and from various types of equity offerings or the sale of our hotels. Our principal uses of cash are asset acquisitions, capital investments, routine debt service and debt repayments, operating costs, corporate expenses and dividends. We may also elect to use cash to buy back our common stock in the future under the Repurchase Program.

Previous wording

Comparison of the Nine Months Ended September 30, 2024 to the Nine Months Ended September 30, 2023

Current wording

Comparison of the Three Months Ended March 31, 2025 to the Three Months Ended March 31, 2024

Previous wording

•Cash provided by operating activities was $133.1 million and $137.9 million for the nine months ended September 30, 2024 and 2023, respectively. Cash flows from operating activities generally consist of the net cash generated by our hotel operations, partially offset by the cash paid for interest, corporate expenses and other working capital changes. Our cash flows from operating activities may also be affected by changes in our portfolio resulting from hotel acquisitions, dispositions or from disruption and subsequent improvements resulting from renovations. The net decrease to cash provided by operating activities during the nine months ended September 30, 2024 was primarily due to the timing of working capital transactions. Refer to the "Results of Operations" section for further discussion of our operating results for the three and nine months ended September 30, 2024 and 2023.

Current wording

•Cash provided by operating activities was $54.8 million and $24.7 million for the three months ended March 31, 2025 and 2024, respectively. Cash flows from operating activities generally consist of the net cash generated by our hotel operations, partially offset by the cash paid for interest, corporate expenses and other working capital changes. Our cash flows from operating activities may also be affected by changes in our portfolio resulting from hotel acquisitions, dispositions or from disruption and subsequent improvements resulting from renovations. The net increase to cash provided by operating activities during the three months ended March 31, 2025 was primarily due to an increase in operating income and the timing of working capital transactions. Refer to the "Results of Operations" section for further discussion of our operating results for the three months ended March 31, 2025 and 2024.

Previous wording

•Cash used in investing activities was $84.5 million and $67.6 million for the nine months ended September 30, 2024 and 2023, respectively. Cash used in investing activities for the nine months ended September 30, 2024 was attributed to $116.2 million in capital improvements at our hotel properties, which was partially offset by net proceeds of $29.1 million from the sale of Lorien Hotel & Spa, $2.4 million of proceeds from property insurance and $0.2 million of performance guaranty payments received that were recorded as a reduction in the respective hotel's cost basis. Cash used in investing activities for the nine months ended September 30, 2023 was attributed to $69.5 million in capital improvements at our hotel properties, which was partially offset by $1.4 million of performance guaranty payments received that were recorded as a reduction in the respective hotel's cost basis and $0.5 million of proceeds from property insurance.

Current wording

•Cash used in investing activities was $56.2 million and $32.3 million for the three months ended March 31, 2025 and 2024, respectively. Cash used in investing activities for the three months ended March 31, 2025 was attributed to $32.4 million in capital improvements at our hotel properties and $25.4 million for the purchase of the fee simple interest in the land associated with the ground lease at Hyatt Regency Santa Clara, which was partially offset by $1.6 million of proceeds from property insurance. Cash used in investing activities for the three months ended March 31, 2024 was attributed to $33.4 million in capital improvements at our hotel properties, which was partially offset by $1.0 million of proceeds from property insurance and $0.2 million of performance guaranty payments received that were recorded as a reduction in the respective hotel's cost basis.

Previous wording

•Cash used in financing activities was $47.1 million and $160.2 million for the nine months ended September 30, 2024 and 2023, respectively. Cash used in financing activities for the nine months ended September 30, 2024 was attributed (i) to the payment of $35.4 million in dividends, (ii) the repurchase of common stock totaling $8.2 million, (iii) principal payments of mortgage debt totaling $2.5 million, (iv) the redemption of Operating Partnership Units for cash of $0.7 million and (v) shares redeemed to satisfy tax withholding on vested share-based compensation of $0.4 million. Cash used in financing activities for the nine months ended September 30, 2023 was attributed to (i) the repayment of the existing corporate credit facility term loan maturing in 2024 totaling $125.0 million, (ii) the repayment of mortgage debt totaling $99.5 million, (iii) the repurchase of common stock totaling $83.7 million, (iv) the expenditure of $34.9 million for the repurchase and retirement of $35.3 million aggregate principal of 2020 Senior Notes, (v) the payment of $33.8 million in dividends, (vi) payment of loan fees and issuance costs of $5.6 million, (vii) principal payments of mortgage debt totaling $2.5 million and (viii) shares redeemed to satisfy tax withholding on vested share-based compensation of $0.6 million, which was partially offset (y) by proceeds from the 2023 Term Loans totaling $225.0 million and (z) proceeds from the amendment of one mortgage loan of $0.4 million.

Current wording

•Cash provided by (used in) financing activities was $39.9 million and $18.6 million for the three months ended March 31, 2025 and 2024, respectively. Cash provided by financing activities for the three months ended March 31, 2025 was attributed to the proceeds from the 2024 Delayed Draw Term Loan of $100.0 million and proceeds from a $10.0 million draw on the Revolving Credit Facility, which was partially offset by (i) the repurchase of common stock totaling $35.8 million, (ii) the repayment of the Revolving Credit Facility of $20.0 million, (iii) the payment of $12.4 million in dividends, (iv) principal payments of mortgage debt totaling $1.0 million, (v) shares redeemed to satisfy tax withholding on vested share-based compensation of $0.5 million and (vi) the redemption of Operating Partnership Units for cash of $0.3 million. Cash used in financing activities for the three months ended March 31, 2024 was attributed (i) to the payment of $10.4 million in dividends, (ii) the repurchase of common stock totaling $6.3 million, (iii) principal payments of mortgage debt totaling $0.8 million, (iv) the redemption of Operating Partnership Units for cash of $0.7 million and (v) shares redeemed to satisfy tax withholding on vested share-based compensation of $0.4 million.