XENIA HOTELS & RESORTS, INC. The following discussion and analysis should be read in conjunction with the consolidated financial statements and related notes included herein this Annual Report. This discussion contains forward-looking statements about our business. These statements are based on current expectations and assumptions that are subject to risks and uncertainties. Actual results could differ materially because of factors discussed in "Special Note Regarding Forward-Looking Statements" and "Part I-Item 1A. Risk Factors" contained in this Annual Report and in our other reports that we file from time to time with theSEC .
Overview
Xenia is a self-advised and self-administered REIT that invests primarily 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 inthe United States ("U.S."). As ofDecember 31, 2022 , we owned 32 hotels and resorts, comprising 9,508 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. We plan to grow our business through a differentiated acquisition strategy, aggressive asset management and capital investment in our properties. We primarily target markets and sub-markets with particular positive characteristics, such as multiple demand generators, favorable supply and demand dynamics and attractive projected hotel revenue growth. We believe our focus on a broader range of markets allows us to evaluate a greater number of acquisition opportunities and thereby be highly selective in our pursuit of only those opportunities that best fit our investment criteria. We own and pursue hotels and resorts in the luxury and upper upscale hotel segments that are affiliated with premium leading brands, as we believe that these segments yield attractive risk-adjusted returns. Within these segments, we focus on hotels and resorts that will provide guests with a distinctive lodging experience and that are tailored to reflect local market environments. We also seek properties that exhibit an opportunity for us to enhance operating performance through aggressive asset management and targeted capital investment. While we do not operate our hotel properties, our asset management team and our executive management team monitor and work with our hotel managers by conducting regular revenue, sales, and financial performance reviews and also perform in-depth on-site reviews focused on ongoing operating margin improvement initiatives. We interact frequently with our management companies and on-site management personnel, including conducting regular meetings with key executives of our management companies and brands. Through these efforts, we seek to enhance the guest experience, improve property efficiencies, lower costs, maximize revenues, and grow property operating margins which we expect will increase long-term returns to our stockholders.
Ongoing Recovery from COVID-19
Our hotel portfolio experienced a broad-based recovery from COVID-19 during 2022 with a continuation of strong leisure bookings and an acceleration of business transient and group demand. As the recovery continues, we expect that the pace will vary from market to market and may be uneven in nature.
Basis of Presentation
The accompanying consolidated financial statements include the accounts of the Company, theOperating Partnership andXHR 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 consolidated statements of operations and comprehensive (loss) income.
Market Outlook
TheU.S. lodging industry has historically exhibited a strong correlation toU.S. GDP, which increased at an annual rate of approximately 2.1% during 2022, according to theU.S. Department of Commerce , in comparison to an increase of approximately 5.9% during 2021. The increase in GDP during the year endedDecember 31, 2022 reflected increases in consumer spending, exports, private inventory investment and nonresidential government spending which were partially offset by decreases in residential fixed investment and increases in imports. During the fourth quarter of 2022, GDP increased at an annual rate of 2.9%, representing an increase from the annual rate of 3.2% in the third quarter of 2022. The increase during the fourth quarter of 2022 reflected increases in private inventory investment, consumer spending, federal government spending, state and local government spending, and nonresidential fixed investment, as well as decreases in imports that were partially offset by decreases in residential fixed investment and exports. In addition, the unemployment rate remained flat at 3.5% inDecember 2022 compared toSeptember 2022 and fell from 3.6% inJune 2022 .
The
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persistence of new variants of COVID-19 and sentiment towards business and leisure travel as a result of the pandemic. Additionally, we expect it will take longer for the lodging industry to return to pre-pandemic levels than it will for the broader economy and many other industries. Further, we continue to monitor and evaluate the challenges associated with the evolving workforce landscape, particularly related to industry-wide labor shortages and expected increases in wages as well as ongoing supply chain issues which may impact the hotels' ability to source operating supplies and other materials. Demand increased 11.0% and new hotel supply increased by 1.9% during the year endedDecember 31, 2022 compared to 2021. The increase in demand led to an increase in industry RevPAR of 29.8% for the year endedDecember 31, 2022 compared to 2021, which was driven by an increase in occupancy of 8.9% coupled with a 19.1% increase in ADR. AllU.S. data for the year endedDecember 31, 2022 are per industry reports. Significant Events
The following significant events occurred during the year ended
•InJanuary 2022 , the Company completed the disposition of the 191-roomKimpton Hotel Monaco Chicago inChicago, Illinois for a sale price of$36.0 million . The sale did not result in a gain or loss after previously recording an impairment of$15.7 million during the year endedDecember 31, 2021 .
•In
•InMarch 2022 , the Company acquired a fee-simple interest in the 346-roomW Nashville located inNashville, Tennessee for a purchase price of$328.5 million including acquisition costs and a$1.3 million credit related to an unfinished portion of the hotel provided by seller at closing. The acquisition ofW Nashville was funded with cash on hand. •InOctober 2022 , the Company completed the disposition of the 115-roomBohemian Hotel Celebration , Autograph Collection, inCelebration, Florida for a sale price of approximately$27.8 million . The Company recognized a gain on sale of approximately$12.5 million . •InDecember 2022 , the Company completed the disposition of the 189-roomKimpton Hotel Monaco Denver , inDenver, Colorado for a sale price of approximately$69.8 million . The Company recognized a gain on sale of approximately$14.7 million . •During the third and fourth quarter of 2022, 1,912,794 shares were repurchased at a weighted-average price of$14.74 per share for an aggregate purchase price of$28.2 million . •During the year endedDecember 31, 2022 , the Company recognized$1.5 million in business interruption insurance proceeds for a portion of lost income atLoews New Orleans Hotel due to the impact of Hurricane Ida inAugust 2021 as well as$1.0 million in proceeds for lost income for certain properties inTexas due to the impact of theTexas winter storms inFebruary 2021 . In addition, the Company recorded$3.6 million of insurance proceeds in excess of recognized losses related to damage sustained atLoews New Orleans Hotel during Hurricane Ida inAugust 2021 . •In addition to changes in our portfolio composition during 2022, we invested approximately$70.4 million in portfolio improvements, which we believe will drive positive performance at these properties in the future.
Our Customers
We generate a significant portion of our revenue from the following broad customer groups: transient business, group business and contract business. Transient business broadly represents individual business or leisure travelers. Historically, business travelers have made up the majority of transient demand at our hotels. Therefore, we will be more affected by trends in business travel than trends in leisure demand. Group business represents clusters of guestrooms booked together, usually with a minimum of 10 rooms. Contract business refers to blocks of rooms sold to a specific company for an extended period of time at significantly discounted rates. Airline crews have historically been typical generators of contract demand at some of our hotels. Additionally, contract rates may be utilized by hotels that are located in markets that are experiencing consistently lower levels of demand.
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Our Revenues and Expenses
Revenues
Our revenues are derived from hotel operations and are composed of the following sources:
•Rooms revenues - Represents the sale of rooms at our hotel properties and accounts for a substantial majority of our total revenue. Occupancy and ADR are the major drivers of rooms revenues. The business mix and distribution channel mix of the hotels are significant determinants of ADR. •Food and beverage revenues - Occupancy and the type of customer staying at the hotel are the major drivers of food and beverage revenue (i.e., group business typically generates more food and beverage business through catering functions when compared to transient business, which may or may not utilize the hotel's food and beverage outlets).
•Other revenues - Represents ancillary revenue such as parking, resort or destination amenity fees, golf, spa services and other guest services and tenant leases. Occupancy and the nature of amenities at the property are the main drivers of other revenue.
Expenses
Our operating expenses consist of costs to provide hotel services and corporate-level expenses. The following are components of our expenses:
•Rooms expenses - These costs include housekeeping wages, payroll taxes, room supplies, laundry services and front desk costs. Similar to rooms revenues, occupancy is the major driver of rooms expense and as a result, rooms expense has a significant correlation to rooms revenues. These costs as a percentage of revenue can increase based on increases in salaries, wages and benefits, as well as on the level of service and amenities that are provided. Rooms expenses also includes costs for severance and furloughed employee benefits. •Food and beverage expenses - These expenses primarily include food, beverage and associated labor costs. Occupancy and the type of customer staying at the hotel are major drivers of food and beverage expense (i.e., catered functions generally are more profitable than on-property food and beverage outlet sales), which correlates closely with food and beverage revenue. Food and beverage expenses also includes costs for severance and furloughed employee benefits.
•Other direct expenses - These expenses primarily include labor (including severance and furloughed employee benefits) and other costs associated with other revenues, such as parking and other guest services.
•Other indirect expenses - These expenses primarily include hotel costs associated with general and administrative, state sales and excise taxes, sales and marketing, information technology and telecommunications, repairs and maintenance and utility costs.
•Management and franchise fees - Base management fees are computed as a percentage of gross revenue. Management fees also include incentive management fees, which are typically a percentage of net operating income (or similar measurements of hotel profitability) above an annual threshold. Franchise fees are computed as a percentage of rooms revenues. See "Part I-Item 2. Properties - Our Principal Agreements" for a summary of key terms related to our management and franchise agreements. •Depreciation and amortization expense - These are non-cash expenses that primarily consist of depreciation of fixed assets such as buildings, furniture, fixtures and equipment at our hotels, as well as certain corporate assets. Amortization expense primarily consists of amortization of acquired advance bookings and acquired leases, which are amortized over the life of the related term or lease. •Real estate taxes, personal property taxes and insurance - These expenses primarily include real estate tax and personal property tax payments due in the respective jurisdictions where our hotels are located, partially offset by refunds from prior year real estate tax appeals, and payments due under insurance policies for our hotel portfolio. •Ground lease expense - This expense represents the rent associated with land underlying our hotels and/or meeting facilities that we lease from third-parties. It also includes the non-cash ground rent determined as part of the initial purchase price allocation at acquisition. •General and administrative expenses - These expenses primarily consist of compensation expense for our corporate staff and personnel supporting our business (including severance and non-cash stock compensation expense), office administrative and related expenses, legal and professional fees, and other corporate costs.
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•Gain on business interruption insurance - These gains consists of insurance settlements for lost income that was covered per the terms of our respective insurance policies, which was in excess of insurance deductibles. •Other operating expenses - These expenses typically consist of legal fees, other professional fees, franchise taxes, pre-opening costs, other direct costs associated with our pursuit and acquisitions of hotel investments which are not ultimately consummated and hotel management transition efforts. As a result, these costs will vary depending on the timing, volume and nature of acquisition activity. •Impairment and other losses - Our real estate, intangible assets, goodwill and other long-lived assets are generally held for the long-term. We evaluate these assets for impairment as discussed in "Critical Accounting Policies and Estimates." These evaluations have resulted in impairment losses for certain of these assets, including goodwill, based on the specific facts and circumstances surrounding these assets, and our estimates of the fair value of these assets, including goodwill. Based on economic conditions or other factors applicable to a specific property, we may be required to take additional impairment losses to reflect further declines in our asset and/or investment values. Additionally, from time to time we may record other losses related to property damage resulting from natural disasters and/or other disaster remediation costs. Most categories of variable operating expenses, including labor costs such as housekeeping, fluctuate with changes in occupancy. Increases in occupancy are accompanied by increases in most categories of variable operating expenses, while increases in ADR typically only result in increases in limited categories of operating costs and expenses, such as management fees and franchise fees, which are based on hotel revenues. Thus, changes in ADR have a more significant impact on operating margins than changes in occupancy.
Factors that May Affect Results of Operations
The principal factors affecting our operating results include overall demand for hotel rooms compared to the supply of available hotel rooms, economic conditions, and the ability of our third-party management companies to increase or maintain revenues while controlling expenses. •Demand and economic conditions - Consumer demand for lodging, especially business travel, is closely linked to the performance of the overall economy and is sensitive to business and personal discretionary spending levels. Declines in consumer demand due to adverse general economic conditions, risks affecting or reducing travel patterns, restrictions on travel, lower consumer confidence and adverse political conditions can lower the revenues and profitability of our hotel operations. Additionally, consumers may seek lower-cost alternatives when economic conditions are challenging. As a result, changes in consumer demand and general business cycles can subject and have subjected our revenues to significant volatility. See "Part I-Item 1A. Risk Factors - Risks Related ToThe Hotel Industry ." •Supply - New hotel room supply is an important factor that can affect the lodging industry's performance. Room rates and occupancy, and thus RevPAR, tend to increase when demand growth exceeds supply growth. The addition of new competitive hotels affects the ability of existing hotels to drive growth in RevPAR, and thus profits. New development is driven largely by construction costs, the availability of financing and expected performance of existing hotels. •Third-party hotel managers - We depend on the performance of third-party hotel management companies that manage the operations of each of our hotels under long-term agreements. Our operating results could be materially and adversely affected if any of our third-party managers fail to provide quality services and amenities, or otherwise fail to manage our hotels in our best interest. We believe we have good relationships with our third-party managers and are committed to the continued growth and development of these relationships. •Fixed nature of expenses - Many of the expenses associated with operating our hotels are relatively fixed. These expenses include certain personnel costs, rent, property taxes, insurance and utilities, as well as sales and marketing expenses. If we are unable to decrease these costs significantly or rapidly when demand for our hotels decreases, the resulting decline in our revenues can have an adverse effect on our net cash flow, margins and profits. This effect can be especially pronounced during periods of economic contraction or slow economic growth. •Seasonality - The lodging industry is seasonal in nature, which can be expected to cause fluctuations in our hotel rooms revenues, occupancy levels, room rates, operating expenses and cash flows. The periods during which our hotels experience higher or lower levels of demand vary from property to property and depend upon location, type of property and competitive mix within the specific location. The impact of the COVID-19 pandemic and subsequent recovery has and may continue to disrupt our historical seasonal patterns.
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•Competition - The lodging industry is highly competitive. Our hotels compete with other hotels and alternative accommodations for guests in each of their markets based on a number of factors, including, among others, room rates, quality of accommodations, service levels and amenities, location, brand affiliation, reputation, and reservation systems. Competition is often specific to the individual markets in which our hotels are located and includes competition from existing and new hotels. We believe that hotels, such as those in our portfolio, will enjoy the competitive advantages associated with operating under nationally recognized brands.
Key Indicators of Operating Performance
We measure hotel results of operations and the operating performance of our business by evaluating financial and non-financial metrics such as RevPAR; ADR; occupancy; EBITDA, EBITDAre and Adjusted EBITDAre; FFO and Adjusted FFO. We evaluate individual hotel and company-wide performance with comparisons to budgets, prior periods and competing properties. ADR, occupancy and RevPAR 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 EBITDA, EBITDAre, Adjusted EBITDAre, FFO and Adjusted FFO.
Critical Accounting Policies and Estimates
General
The preparation of consolidated financial statements in conformity withU.S. GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities at the date of our financial statements and the reported amounts of revenues and expenses during the reporting period. We consider the following policies critical because they require the most difficult, subjective and complex judgments and include estimates about matters that are inherently uncertain, involve various assumptions, require management judgment, and because they are important for understanding and evaluating our reported financial results. As a result, these accounting policies could materially affect our financial position, results of operations and related disclosures. We evaluate our estimates, assumptions and judgments on an ongoing basis, based on information that is then available to us, our historical experiences and various matters that we believe are reasonable and appropriate for consideration under the circumstances. Actual results may differ significantly from these estimates due to changes in judgments, assumptions and conditions as a result of unforeseen events or otherwise, which could have a material impact on financial position or results of operations. All of our significant accounting policies are disclosed in the notes to our consolidated financial statements in "Part IV. Exhibits and Financial Statements Schedules." The following represent certain critical accounting policies that require us to exercise our business judgment or make significant estimates.
Investment in Hotel Properties
Investments in hotel properties, including land and land improvements, building and building improvements, furniture, fixtures and equipment, and identifiable intangible assets and liabilities, will generally be accounted for as asset acquisitions. The determination of whether or not an acquisition qualifies as an asset acquisition or business combination is an area that requires management's use of judgment in evaluating the criteria of the screen test. Acquired assets are recorded at their relative fair value based on total accumulated costs of the acquisition, which includes direct acquisition-related costs. Identifiable assets include land, land improvements, building and building improvements, furniture, fixtures and equipment, inventory and identifiable intangible assets or liabilities. Identifiable intangible assets or liabilities typically arise from contractual arrangements assumed in connection with the transaction, including terms that are above or below market compared to an estimated market agreement at the acquisition date. The allocation of the purchase price to elements of our acquired hotel properties is an area that requires judgment and significant estimates. Therefore, the amounts allocated to acquired assets and liabilities could be materially different than if that transaction had occurred on a different date or in a different location. At times estimates are determined based on limited data for comparable market transactions, such as discount rates used in the market or income valuation approach or the purchase involves land or a ground lease in a niche market. This could materially impact the allocation to identifiable assets and the related amortization and depreciation over future periods if the value was assigned to another identifiable asset acquired.
Impairment
Long-lived assets and intangibles
The Company assesses the carrying values of the respective long-lived assets, which includes hotel properties and the related intangible assets, whenever events or changes in circumstances indicate that the carrying amounts of these assets may not be fully recoverable. Events or circumstances that may cause a review include, but are not limited to, when (1) a hotel property experiences a significant decrease in the market price of the long-lived asset, (2) a hotel property experiences a current or projected loss from operations combined with a history of operating or cash flow losses, (3) it becomes more likely than not that 52
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a hotel property will be sold before the end of its useful life, (4) an accumulation of costs is significantly in excess of the amount originally expected for the acquisition, construction or renovation of a long-lived asset, (5) adverse changes in the demand occur for lodging at a specific property due to declining national or local economic conditions and/or new hotel construction in markets where the hotel is located, (6) there is a significant adverse change in legal factors or in the business climate that could affect the value of the long-lived asset and/or (7) there is a significant adverse change in the extent or manner in which a long-lived asset is being used or in its physical condition. When such conditions exist, we perform an analysis to determine if the estimated undiscounted future cash flows from operations and the proceeds from the eventual disposition of a hotel exceed its carrying value. If it is determined that the estimated undiscounted future cash flow do not exceed the carrying value of the asset, an adjustment to reduce the carrying amount of the hotel to its estimated fair market value is recorded and an impairment loss is recognized. Impairment Estimates In the evaluation of impairment of our hotel properties, including the related intangible assets and goodwill, we make many assumptions and estimates including valuation approach, projected cash flows, growth rates, eventual disposition, expected useful life and holding period, future capital expenditures, and fair values, which includes consideration of capitalization rates, discount rates, and comparable selling prices. The valuation and possible subsequent impairment of a hotel or goodwill is a significant estimate that can and does change based on our continuous process of analyzing each hotel property and goodwill and reviewing assumptions about uncertain inherent factors, as well as the economic condition of the property at a particular point in time. If we misjudge or estimate incorrectly or if future operating profitability, market or industry factors differ from our expectations, we may record an impairment charge which is inappropriate, fail to record a charge when we should have done so or the amount of such charges may be inaccurate.
Results of Operations
Operating Results Overview
Our total portfolio RevPAR, which includes the results of hotels sold or
acquired for the period of ownership by the Company,
increased 57.0% to
Net income increased 139.3% for the year ended
•an increase in operating income of
•a
•a
•a$5.2 million reduction in operating loss attributed to two hotels sold during the fourth quarter of 2022, one hotel sold during the first quarter of 2022 and one hotel sold during the fourth quarter of 2021; •a$6.5 million increase in other income primarily attributed to insurance proceeds in excess of recognized losses related to damage sustained atLoews New Orleans Hotel during Hurricane Ida and interest income in 2022 as well as the recognition of costs associated with the termination of four interest rate hedges in 2021; •a$1.1 million reduction in loss on extinguishment of debt attributed to the write off of unamortized debt issuance costs associated with the repayment of debt; and
•a
These increases were offset by:
•a
•a
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•a
•A
Adjusted EBITDAre and Adjusted FFO attributable to common stock and unit holders increased 137.8% and 454.0%, respectively, for the year endedDecember 31, 2022 compared to 2021, which was attributable to a broad-based recovery from the COVID-19 pandemic on the Company's results of operations. Refer to "Non-GAAP Financial Measures" for the definition of these financial measures, a description of how they are useful to investors as key supplemental measures of our operating performance and the reconciliation of these non-GAAP financial measures to net income (loss) attributable to common stock and unit holders.
Portfolio Composition
As of
The following represents the disposition details for the properties sold in the years endedDecember 31, 2022 , 2021 and 2020 (in thousands, except number of rooms): Gross Sale Property Date No. of Rooms Price Kimpton Hotel Monaco Chicago 01/2022 191$ 36,000 Bohemian Hotel Celebration, Autograph Collection 10/2022 115$ 27,750 Kimpton Hotel Monaco Denver 12/2022 189$ 69,750 Total for the year ended December 31, 2022 495$ 133,500 Marriott Charleston Town Center 11/2021 352$ 5,000 Total for the year ended December 31, 2021 352$ 5,000 Residence Inn Boston Cambridge 10/2020 221$ 107,500 Marriott Napa Valley Hotel & Spa 10/2020 275$ 100,096 Hotel Commonwealth 11/2020 245$ 113,000 Renaissance Austin Hotel 11/2020 492$ 70,000 Total for the year ended December 31, 2020 1,233$ 390,596
The following represents our acquisitions activity for the year ended
Property Location Date No. of Rooms Net Purchase Price W Nashville Nashville, TN 03/2022 346 $ 328,500
No hotels were acquired during the years ended
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Comparison of the year ended
Operating Information The following table sets forth certain operating information for the years endedDecember 31, 2022 and 2021: Year Ended December 31, 2022 2021 Change Number of properties at January 1 34 35 (1) Properties acquired 1 - 1 Properties disposed (3) (1) 2 Number of properties at December 31 32 34 (2) Number of rooms at January 1 9,659 10,011 (352)
Rooms in properties acquired or added to portfolio upon completion of property improvements(1)
346 - 346
Rooms in properties disposed or combined during property improvements(2)
(497) (352) (145)
Number of rooms at December 31 9,508 9,659 (151)
Portfolio Statistics:
Occupancy(3) 62.9 % 47.5 % 1,540 bps
ADR(3) $ 258.76 $ 218.41 18.5%
RevPAR(3) $ 162.75 $ 103.64 57.0%
Hotel operating income (in thousands)(4) $ 325,332 $ 170,141 91.2%
(1) During the year ended
(2) During the year endedDecember 31, 2022 , we disposed of three hotels with 495 rooms and reduced the room count by two atHyatt Regency Scottsdale Resort & Spa atGainey Ranch . During the year endedDecember 31, 2021 , we disposed of one hotel with 352 rooms.
(3) For hotels disposed of during the period, operating results and statistics are only included through the date of the respective disposition.
(4) Hotel operating income represents the difference between total revenues and total hotel operating expenses.
Revenues
Revenues increased significantly compared to 2021 driven by increases in occupancy and ADR due to a broad-based recovery from the COVID-19 pandemic. Revenues consists of room, food and beverage, and other revenues from our hotels, as follows (in thousands):
Year Ended December 31,
2022 2021 Increase % Change
Revenues:
Rooms revenues $ 576,279 $ 377,020 $ 199,259 52.9 %
Food and beverage revenues 337,792 173,035 164,757 95.2 %
Other revenues 83,536 66,133 17,403 26.3 %
Total revenues $ 997,607 $ 616,188 $ 381,419 61.9 %
Rooms revenues
Rooms revenues increased by $199.3 million , or 52.9%, to $576.3 million for the
year ended December 31, 2022 from $377.0 million for the year ended December 31,
2021 primarily due to increases in occupancy and ADR due to a broad-based
recovery from the COVID-19 pandemic. Additionally, the acquisition of W
Nashville in March 2022 contributed to the increase in rooms revenue by $23.3
million . This increase is net of a reduction of $7.2 million attributed to the
sale of Marriott Charleston Town Center in November 2021 , Kimpton Hotel Monaco
Chicago in January 2022 , Bohemian Hotel Celebration , Autograph Collection in
October 2022 and Kimpton Hotel Monaco Denver in December 2022 (collectively,
"the one hotel sold in 2021 and the three hotels sold in 2022").
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Food and beverage revenues increased by$164.8 million , or 95.2%, to$337.8 million for the year endedDecember 31, 2022 from$173.0 million for the year endedDecember 31, 2021 primarily due to increases in occupancy due a broad-based recovery from the COVID-19 pandemic. Additionally, the acquisition ofW Nashville inMarch 2022 contributed to the increase in food and beverage revenue by$18.2 million . This increase is net of a reduction of$0.9 million attributed to the one hotel sold in 2021 and the three hotels sold in 2022.
Other revenues
Other revenues increased by$17.4 million , or 26.3%, to$83.5 million for the year endedDecember 31, 2022 from$66.1 million for the year endedDecember 31, 2021 primarily due to a broad-based recovery from the COVID-19 pandemic. This increase includes$5.2 million in additional revenues from cancellation and attrition as well as$2.0 million attributed to the acquisition ofW Nashville inMarch 2022 . These increases are net of a reduction of$0.9 million attributed to the one hotel sold in 2021 and the three hotels sold in 2022.
Hotel operating expenses consist of the following (in thousands):
Year Ended December 31,
2022 2021 Increase % Change
Hotel operating expenses:
Rooms expenses $ 137,589 $ 93,538 $ 44,051 47.1 %
Food and beverage expenses 224,391 125,233 99,158 79.2 %
Other direct expenses 23,847 18,258 5,589 30.6 %
Other indirect expenses 249,992 186,517 63,475 34.0 %
Management and franchise fees 36,456 22,501 13,955 62.0 %
Total hotel operating expenses $ 672,275 $ 446,047 $ 226,228 50.7 %
Total hotel operating expenses
Generally, hotel operating costs fluctuate based on various factors, including occupancy, labor costs, utilities and insurance costs which have increased during the last year. Luxury and upper upscale hotels generally have higher fixed costs than other types of hotels due to the services and amenities provided to guests.
Total hotel operating expenses increased$226.2 million , or 50.7%, to$672.3 million for the year endedDecember 31, 2022 from$446.0 million for the year endedDecember 31, 2021 , primarily due to increases in occupancy and other related operating costs due to a broad-based recovery from the COVID-19 pandemic. Additionally,W Nashville contributed to the increase in hotel operating expenses by$30.3 million . The increase in total hotel operating expenses is net of a reduction of$9.7 million in hotel operating expenses attributed to the one hotel sold in 2021 and the three hotels sold in 2022.
Corporate and Other Expenses
Corporate and other expenses consist of the following (in thousands):
Year Ended December 31,
Increase /
2022 2021 (Decrease) % Change
Depreciation and amortization $ 132,648 $ 129,393 $ 3,255 2.5 %
Real estate taxes, personal property taxes and
insurance 44,388 40,888 3,500 8.6 %
Ground lease expense 2,793 1,153 1,640 142.2 %
General and administrative expenses 34,250 30,564 3,686 12.1 %
Gain on business interruption insurance (2,487) (1,602) (885) (55.2) %
Other operating expenses 1,070 213 857 402.3 %
Impairment and other losses 1,278 30,416 (29,138) (95.8) %
Total corporate and other expenses $ 213,940 $ 231,025 $ (17,085) (7.4) %
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Depreciation and amortization
Depreciation and amortization expense increased$3.3 million , or 2.5%, to$132.6 million for the year endedDecember 31, 2022 from$129.4 million for the year endedDecember 31, 2021 . This increase was primarily attributed to the acquisition ofW Nashville inMarch 2022 , partially offset by reduction attributed to the timing of fully depreciated assets during the comparable periods and a reduction in depreciation expense related to the one hotel sold in 2021 and the three hotels sold in 2022.
Real estate taxes, personal property taxes and insurance
Real estate taxes, personal property taxes and insurance expense increased$3.5 million , or 8.6%, to$44.4 million for the year endedDecember 31, 2022 from$40.9 million for the year endedDecember 31, 2021 . This year-to-date increase was primarily attributed to increases in insurance premiums of$3.2 million ,$2.4 million attributed for the acquisition ofW Nashville inMarch 2022 and a$1.5 million non-recurring property tax refund received in 2021. These increases were partially offset by a$1.0 million reduction in real estate taxes and a$2.0 million reduction related to the one hotel sold in 2021 and the three hotels sold in 2022.
Ground lease expense
Ground lease expense increased$1.6 million , or 142.2%, to$2.8 million for the year endedDecember 31, 2022 from$1.2 million for the year endedDecember 31, 2021 , which was primarily attributable to an increase in percentage rent in 2022, which is based on revenues at certain hotels with ground leases, compared to 2021.
General and administrative expenses
General and administrative expenses increased$3.7 million , or 12.1%, to$34.3 million for the year endedDecember 31, 2022 from$30.6 million for the year endedDecember 31, 2021 primarily due to an increase in the number of corporate employees, employee-related expenses, and increased incentive compensation.
Gain on business interruption insurance
Gain on business interruption insurance was$2.5 million for the year endedDecember 31, 2022 , which was attributed to$1.5 million in insurance proceeds for a portion of lost income atLoews New Orleans Hotel due to the impact of Hurricane Ida inAugust 2021 as well as$1.0 million in proceeds for lost income for certain properties inTexas due to the impact of theTexas winter storms inFebruary 2021 . Gain on business interruption insurance was$1.6 million for the year endedDecember 31, 2021 , which was attributed to insurance proceeds of$1.1 million for a portion of lost revenue associated with cancellations in 2020 related to the COVID-19 pandemic and lost income of$0.5 million in 2021 as a result of damage from theTexas winter storms inFebruary 2021 .
Other operating expenses
Other operating expenses increased to
Impairment and other losses
We recorded impairment charges of
In
During the year endedDecember 31, 2021 , we recorded an impairment loss of$12.6 million for the 352-roomMarriott Charleston Town Center to reduce the carrying value of the long-lived asset to its fair value. The impairment was the result of a shortened estimated hold period due to the expected sale. The hotel was sold inNovember 2021 . Additionally, inNovember 2021 , we entered into an agreement to sell the 191-roomKimpton Hotel Monaco Chicago for a sale price of$36.0 million and the buyer funded an at-risk deposit. As a result of the shortened estimated hold period due to the expected sale, we recorded an impairment loss of$15.7 million for this property. The hotel was sold inJanuary 2022 . Additionally, during the year endedDecember 31, 2021 , we expensed$1.1 million of hurricane-related repair and cleanup costs related toLoews New Orleans Hotel which sustained damage from Hurricane Ida as well as$0.4 million of winter storm-related repair and cleanup costs related to two hotels that experienced damage as a result of theTexas winter storms inFebruary 2021 . We also wrote off$0.6 million related to previously capitalized design costs for a renovation project that will no longer be completed due to a change of scope. 57 --------------------------------------------------------------------------------
Refer to Notes 2 and 8 to the accompanying consolidated financial statements included herein for further discussion.
Results of Non-Operating Income and Expenses
Non-operating income and expenses consist of the following (in thousands):
Year Ended December 31,
Increase /
2022 2021 (Decrease) % Change
Non-operating income and expenses:
Gain (loss) on sale of investment properties
36,481.3 %
Other income (loss) 4,178 (2,297) 6,475 281.9 %
Interest expense (82,727) (81,285) 1,442 1.8 %
Loss on extinguishment of debt (294) (1,356) (1,062) (78.3) %
Income tax expense (2,205) (718) 1,487 207.1 %
Gain (loss) on sale of investment properties
The gain on sale for the year endedDecember 31, 2022 was attributed to the disposition ofBohemian Hotel Celebration , Autograph Collection inOctober 2022 andKimpton Hotel Monaco Denver inDecember 2022 . For the year endedDecember 31, 2021 , after recognizing an impairment loss of$12.6 million , we recognized a loss of$75 thousand related to the sale ofMarriott Charleston Town Center inNovember 2021 . Other income (loss) Other income increased$6.5 million , or 281.9%, to other income of$4.2 million for the year endedDecember 31, 2022 from a loss of$2.3 million for the year endedDecember 31, 2021 . The increase was primarily attributed to a gain of$3.6 million from insurance proceeds settlements in excess of recognized losses associated with hurricane-related damage atLoews New Orleans Hotel as well as interest income of$2.2 million for the year endedDecember 31, 2022 , offset by$1.6 million of costs associated with the termination of two interest rate hedges for the year endedDecember 31, 2022 . Additionally, there were$2.8 million of costs associated with the termination of four interest rate hedges for the year endedDecember 31, 2021 .
Interest expense
Interest expense increased$1.4 million , or 1.8%, to$82.7 million for the year endedDecember 31, 2022 from$81.3 million for the year endedDecember 31, 2021 . The increase was primarily due to an increase in the weighted-average interest rate, partially offset by a decrease in weighted-average outstanding debt in 2022 compared to 2021. Refer to Note 6 in the consolidated financial statements included herein for further discussion.
Loss on extinguishment of debt
Loss on extinguishment of debt decreased by
The loss on extinguishment of debt during 2021 was attributable to the write off of unamortized debt issuance costs upon the early repayment of the corporate credit facility term loan that was due to mature inAugust 2023 and one mortgage loan. Income tax expense Income tax expense increased$1.5 million , or 207.1%, to$2.2 million for the year endedDecember 31, 2022 from$0.7 million for the year endedDecember 31, 2021 . The increase from prior year was primarily attributed to higher taxable income related to a broad-based recovery from the COVID-19 pandemic and the acquisition ofW Nashville inMarch 2022 coupled with an increase in the effective tax rate for 2022 compared to 2021. These increases were partially offset by the use of federal and state net operating loss carryforwards.
Comparison of the year ended
This information is contained in "Part II - Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year endedDecember 31, 2021 filed with theSEC onMarch 1, 2022 , and is incorporated herein by reference. 58 --------------------------------------------------------------------------------
Non-GAAP Financial Measures
We consider the following non-GAAP financial measures useful to investors as key supplemental measures of our operating performance: EBITDA, EBITDAre, Adjusted EBITDAre, FFO and Adjusted FFO. These non-GAAP financial measures should be considered along with, but not as alternatives to, net income or loss, operating profit, cash from operations, or any other operating performance measure as prescribed per GAAP.
EBITDA, EBITDAre and Adjusted EBITDAre
EBITDA is a commonly used measure of performance in many industries and is defined as net income or loss (calculated in accordance with GAAP) excluding interest expense, provision for income taxes (including income taxes applicable to sale of assets) and depreciation and amortization. We consider EBITDA useful to an investor regarding our results of operations, in evaluating and facilitating comparisons of our operating performance between periods and between REITs by removing the impact of our capital structure (primarily interest expense) and asset base (primarily depreciation and amortization) from our operating results, even though EBITDA does not represent an amount that accrues directly to common stockholders. In addition, EBITDA is used as one measure in determining the value of hotel acquisitions and dispositions and along with FFO and Adjusted FFO, it is used by management in the annual budget process for compensation programs. We then calculate EBITDAre in accordance with standards established by theNational Association of Real Estate Investment Trusts ("Nareit"), which we adopted onJanuary 1, 2018 . Nareit defines EBITDAre as EBITDA plus or minus losses and gains on the disposition of depreciated property, including gains/losses on change of control, plus impairment write-downs of depreciated property and of investments in unconsolidated affiliates caused by a decrease in value of depreciated property in the affiliate, and adjustments to reflect the entity's share of EBITDAre of unconsolidated affiliates. We further adjust EBITDAre to exclude the impact of non-controlling interests in consolidated entities other than our Operating Partnership Units because our Operating Partnership Units may be redeemed for common stock. We believe it is meaningful for the investor to understand Adjusted EBITDAre attributable to all common stock andOperating Partnership unit holders. We also adjust EBITDAre for certain additional items such as depreciation and amortization related to corporate assets, hotel property acquisition, terminated transaction and pre-opening expenses, amortization of share-based compensation, non-cash ground rent and straight-line rent expense, the cumulative effect of changes in accounting principles, and other costs we believe do not represent recurring operations and are not indicative of the performance of our underlying hotel property entities. We believe Adjusted EBITDAre attributable to common stock and unit holders provides investors with another financial measure in evaluating and facilitating comparison of operating performance between periods and between REITs that report similar measures.
FFO and Adjusted FFO
We calculate FFO in accordance with standards established by Nareit, as amended
in the 2018 restatement white paper, which defines FFO as net income or loss
(calculated in accordance with GAAP), excluding real estate-related
depreciation, amortization and impairments, gains (losses) from sales of real
estate, the cumulative effect of changes in accounting principles, similar
adjustments for unconsolidated partnerships and consolidated variable interest
entities, and items classified by GAAP as extraordinary. Historical cost
accounting for real estate assets implicitly assumes that the value of real
estate assets diminishes predictably over time. Since real estate values instead
have historically risen or fallen with market conditions, most industry
investors consider presentations of operating results for real estate companies
that use historical cost accounting to be insufficient by themselves. We believe
that the presentation of FFO provides useful supplemental information to
investors regarding our operating performance by excluding the effect of real
estate depreciation and amortization, gains (losses) from sales for real estate,
impairments of real estate assets, extraordinary items and the portion of these
items related to unconsolidated entities, all of which are based on historical
cost accounting and which may be of lesser significance in evaluating current
performance. We believe that the presentation of FFO can facilitate comparisons
of operating performance between periods and between REITs, even though FFO does
not represent an amount that accrues directly to common stockholders. Our
calculation of FFO may not be comparable to measures calculated by other
companies who do not use the Nareit definition of FFO or do not calculate FFO
per diluted share in accordance with Nareit guidance. Additionally, FFO may not
be helpful when comparing us to non-REITs. We present FFO attributable to common
stock and unit holders, which includes our Operating Partnership Units because
our Operating Partnership Units may be redeemed for common stock. We believe it
is meaningful for the investor to understand FFO attributable to all common
stock and unit holders.
We further adjust FFO for certain additional items that are not in Nareit's
definition of FFO such as hotel property acquisition, terminated transaction and
pre-opening expenses, amortization of debt origination costs and share-based
compensation, non-cash ground rent and straight-line rent expense, operating
results from properties that are sold and other items we believe do not
represent recurring operations. We believe that Adjusted FFO provides investors
with useful supplemental information that may facilitate comparisons of ongoing
operating performance between periods and between REITs that make similar
adjustments to FFO and is beneficial to investors' complete understanding of our
operating performance.
59
-------------------------------------------------------------------------------- The following is a reconciliation of net income (loss) to EBITDA, EBITDAre and Adjusted EBITDAre attributable to common stock and unit holders for the years endedDecember 31, 2022 , 2021, and 2020 (in thousands):
Year Ended
2022 2021 2020
Net income (loss) $ 57,630 $ (146,615) $ (166,886)
Adjustments:
Interest expense 82,727 81,285 61,975
Income tax expense (benefit) 2,205 718 (15,867)
Depreciation and amortization 132,648 129,393 146,511
EBITDA $ 275,210 $ 64,781 $ 25,733
Impairment of investment properties(1) - 28,899 29,044
(Gain) loss on sale of investment properties (27,286) 75 (93,630)
EBITDAre $ 247,924 Depreciation and amortization related to corporate assets (444)
(409) (392)
Gain on insurance recoveries(2) (3,550) - -
Loss on extinguishment of debt 294 1,356 1,625
Terminated transaction costs - 1 994
Amortization of share-based compensation expense(3) 11,411 11,615 10,930
Non-cash ground rent and straight-line rent expense 44 118 145
Other income attributed to forfeited deposits from terminated transactions(4)
- - (28,750)
Other non-recurring expenses(5) 1,309 1,622 2,568
Adjusted EBITDAre attributable to common stock and unit holders
$ 256,988
(1) During the year endedDecember 31, 2021 , we recognized impairment charges of$12.6 million and$15.7 million related toMarriott Charleston Town Center andKimpton Hotel Monaco Chicago , respectively, which were attributed to their respective net book value exceeding the undiscounted cash flows over a shortened hold period. Additionally, during the year endedDecember 31, 2021 , we wrote off$0.6 million related to previously capitalized design costs for a renovation project that will no longer be completed due to a change of scope. During the year endedDecember 31, 2020 , we recorded an$8.9 million impairment loss related toRenaissance Austin Hotel as it was determined to have a shortened hold period due to the expected sale. In addition, during the year endedDecember 31, 2020 , we recorded goodwill impairments totaling$20.1 million for Andaz Savannah andBohemian Hotel Savannah Riverfront , Autograph Collection. The goodwill impairments were directly attributed to existing market weakness due to new supply and the material adverse impact the COVID-19 pandemic had on the results of operations at each hotel.
(2) During the year ended
(3) During the year endedDecember 31, 2020 , we reduced our corporate office staffing levels in order to preserve capital over the long-term as a result of the material adverse impact the COVID-19 pandemic has had on our results of operations. As a result, during the year endedDecember 31, 2020 , we incurred$1.6 million of accelerated amortization of share-based compensation expense.
(4) During the year ended
(5) During the years endedDecember 31, 2022 , we recorded hurricane-related repair and cleanup costs of$1.3 million . During the year endedDecember 31, 2021 , we recorded estimated hurricane-related repair and cleanup costs of$1.1 million related to the damage sustained atLoews New Orleans Hotel during Hurricane Ida. Additionally, during the year endedDecember 31, 2021 , we recordedTexas winter storm-related repair and cleanup costs of$0.4 million at two hotels. For the year endedDecember 31, 2020 , we incurred$1.8 million of non-recurring expenses for severance related costs in connection with the reduction in corporate personnel. In addition, during the year endedDecember 31, 2020 , we incurred non-recurring legal costs of$0.7 million to amend the terms of our debt. 60
--------------------------------------------------------------------------------
The following is a reconciliation of net income (loss) to FFO and Adjusted FFO
for the years ended
Year Ended December 31,
2022 2021 2020
Net income (loss) $ 57,630 $ (146,615) $ (166,886)
Adjustments:
Depreciation and amortization related to investment
properties 132,204 128,984 146,119
Impairment of investment properties(1) - 28,899 29,044
(Gain) loss on sale of investment property (27,286) 75 (93,630)
FFO attributable to common stock and unit holders
$ 11,343 $ (85,353) Reconciliation to Adjusted FFO Gain on insurance recoveries(2) (3,550) - - Loss on extinguishment of debt 294 1,356 1,625 Terminated transaction costs - 1 994 Loan related costs, net of adjustment related to non-controlling interests(3) 5,260 5,952 3,874 Amortization of share-based compensation expense(4) 11,411 11,615 10,930 Non-cash ground rent and straight-line rent expense 44 118 145
Other income attributed to forfeited deposits from terminated transactions(5)
- - (28,750)
Other non-recurring expenses (income)(6) 1,309 1,622 2,568
Adjusted FFO attributable to common stock and unit holders
(1) During the year endedDecember 31, 2021 , we recognized impairment charges of$12.6 million and$15.7 million related toMarriott Charleston Town Center andKimpton Hotel Monaco Chicago , respectively, which were attributed to their respective net book value exceeding the undiscounted cash flows over a shortened hold period. Additionally, during the year endedDecember 31, 2021 , we wrote off$0.6 million related to previously capitalized design costs for a renovation project that will no longer be completed due to a change of scope. During the year endedDecember 31, 2020 , we recorded an$8.9 million impairment loss related toRenaissance Austin Hotel as it was determined to have a shortened hold period due to the expected sale. In addition, during the year endedDecember 31, 2020 , we recorded goodwill impairments totaling$20.1 million for Andaz Savannah andBohemian Hotel Savannah Riverfront , Autograph Collection. The goodwill impairments were directly attributed to existing market weakness due to new supply and the material adverse impact the COVID-19 pandemic had on the results of operations at each hotel.
(2) During the year ended
(3) Loan related costs included amortization of debt premiums, discounts and deferred loan origination costs.
(4) During the year endedDecember 31, 2020 , we reduced our corporate office staffing levels in order to preserve capital over the long-term as a result of the material adverse impact the COVID-19 pandemic has had on our results of operations. As a result, during the year endedDecember 31, 2020 , we incurred$1.6 million of accelerated amortization of share-based compensation expense.
(5) During the year ended
(6) During the year endedDecember 31, 2022 , we recorded hurricane-related repair and cleanup costs of$1.3 million . During the year endedDecember 31, 2021 , we recorded estimated hurricane-related repair and cleanup costs of$1.1 million related to the damage sustained atLoews New Orleans Hotel during Hurricane Ida. Additionally, during the year endedDecember 31, 2021 , we recordedTexas winter storm-related repair and cleanup costs of$0.4 million at two hotels. For the year endedDecember 31, 2020 , we incurred$1.8 million of non-recurring expenses for severance related costs in connection with the reduction in corporate personnel. In addition, during the year endedDecember 31, 2020 , we incurred non-recurring legal costs of$0.7 million to amend the terms of our debt. 61
--------------------------------------------------------------------------------
Use and Limitations of Non-GAAP Financial Measures
EBITDA, EBITDAre, Adjusted EBITDAre, FFO, and Adjusted FFO do not represent cash generated from operating activities under GAAP and should not be considered as alternatives to net income or loss, operating profit, cash flows from operations or any other operating performance measure prescribed by GAAP. Although we present and use EBITDA, EBITDAre, Adjusted EBITDAre, FFO and Adjusted FFO because we believe they are useful to investors in evaluating and facilitating comparisons of our operating performance between periods and between REITs that report similar measures, the use of these non-GAAP measures has certain limitations as analytical tools. These non-GAAP financial measures are not measures of our liquidity, nor are they indicative of funds available to fund our cash needs, including our ability to fund capital expenditures, contractual commitments, working capital, service debt or make cash distributions. These measurements do not reflect cash expenditures for long-term assets and other items that we have incurred and will incur. These non-GAAP financial measures may include funds that may not be available for management's discretionary use due to functional requirements to conserve funds for capital expenditures, property acquisitions, and other commitments and uncertainties. These non-GAAP financial measures as presented may not be comparable to non-GAAP financial measures as calculated by other real estate companies. We compensate for these limitations by separately considering the impact of these excluded items to the extent they are material to operating decisions or assessments of our operating performance. Our reconciliations to the most comparable GAAP financial measures, and our consolidated statements of operations and comprehensive (loss) income, include interest expense, and other excluded items, all of which should be considered when evaluating our performance, as well as the usefulness of our non-GAAP financial measures. These non-GAAP financial measures reflect additional ways of viewing our operations that we believe, when viewed with our GAAP results and the reconciliations to the corresponding GAAP financial measures, provide a more complete understanding of factors and trends affecting our business than could be obtained absent this disclosure. We strongly encourage investors to review our financial information in its entirety and not to rely on a single financial measure.
Liquidity and Capital Resources
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. On a long-term basis, our objectives are to maximize revenue and profits generated by our existing properties and acquired hotels, to further enhance the value of our portfolio and produce an attractive current yield, as well as to generate sustainable and predictable cash flow from our operations to distribute to our common stock and unit holders. To the extent we are able to successfully improve the performance of our portfolio, we believe this will result in increased operating cash flows. Additionally, we may meet our long-term liquidity requirements through additional borrowings, the issuance of equity and debt securities, which may not be available on advantageous terms or at all, and/or proceeds from the sales of hotels.
Liquidity
As ofDecember 31, 2022 , we had$305.1 million of consolidated cash and cash equivalents and$60.8 million of restricted cash and escrows. The restricted cash as ofDecember 31, 2022 primarily consisted of$46.3 million related to FF&E reserves as required per the terms of our management and franchise agreements,$8.2 million in deposits made for capital projects, cash held in restricted escrows of$4.2 million primarily for real estate taxes and mortgage escrows and$2.1 million for disposition-related holdbacks. InFebruary 2022 , the availability under our revolving credit facility decreased to$450 million through its maturity inFebruary 2024 . As ofDecember 31, 2022 , there was no outstanding balance on our revolving credit facility and the full$450 million was available to be borrowed. InJanuary 2023 ,XHR LP (the "Borrower") entered into a new$675 million senior unsecured credit facility comprised of a$450 million revolving line of credit (the "Revolving Line of Credit"), a$125 million term loan (the "Term Loan$125M ") and a$100 million delayed draw term loan (the "Term Loan$100M " and, together with the Term Loan$125M , the "2023 Term Loans") pursuant to a Revolving Credit and Term Loan Agreement, dated as ofJanuary 10, 2023 , by and among the Borrower,JPMorgan Chase Bank, N.A ., as administrative agent, and the lenders and other parties thereto (the "2023 Credit Agreement"). The Revolving Line of Credit and the Term Loan$125M refinanced in full our existing corporate credit facilities and, as a result of such refinancing, the pledges of equity of certain subsidiaries securing obligations under the Amended Credit Agreements and the Senior Notes were released. The Term Loan$100M was funded onJanuary 17, 2023 and was used to repay in full the mortgage loan collateralized byRenaissance Atlanta Waverly Hotel & Convention Center that was dueAugust 2024 . Proceeds from future Revolving Line of Credit borrowings may be used for working capital, general corporate or other purposes permitted by the 2023 Credit Agreement. The Revolving Line of Credit matures inJanuary 2027 and can be extended up to an additional year. The interest rate on the Revolving Line of Credit is based on a pricing grid with a range of 145 to 275 62 -------------------------------------------------------------------------------- basis points over the applicable Term SOFR rate as determined by the Company's leverage ratio. The 2023 Term Loans mature inMarch 2026 , can be extended up to an additional year, and bear interest rates consistent with the pricing grid on the Revolving Line of Credit. Additionally, inJanuary 2023 , we amended the mortgage loan collateralized by Andaz Napa to update the variable index on the$55 million loan from LIBOR-based to Term SOFR and extend the maturity date throughJanuary 2028 .
We upsized the ATM program in
We remain committed to increasing total shareholder returns through the following priorities: (1) maximize revenue and profits generated by our existing properties and acquired hotels, including the continued focused management of expenses, (2) further enhance the value of our portfolio and produce an attractive current yield and (3) generate sustainable and predictable cash flow from our operations to distribute to our common stock and unit holders. Future determinations regarding the declaration and payment of dividends will be at the discretion of our Board of Directors and will depend on then-existing conditions, including our results of operations, payout ratio, capital requirements, financial condition, prospects, contractual arrangements, any limitations on payment of dividends present in our current and future debt agreements, maintaining our REIT status and other factors that our Board of Directors may deem relevant.
Debt and Loan Covenants
As ofDecember 31, 2022 , our outstanding total debt was$1.4 billion and had a weighted-average interest rate of 5.65%. Our weighted-average debt maturity as ofDecember 31, 2022 was 2.8 years for our mortgage loans, 4.2 years for our corporate credit facility term loan, the Senior Notes, and revolving credit facility and 3.9 years for all debt. Debt as ofDecember 31, 2022 andDecember 31, 2021 consisted of the following (dollars in thousands): Rate Type Maturity Date December 31, December 31, Rate(1) 2022 2021 Mortgage Loans Renaissance Atlanta Waverly Hotel & Variable (2) 7.03 % 8/14/2024$ 99,590 $ 100,000 Convention Center Andaz Napa Variable (3) 6.29 % 9/13/2024 54,560 55,640 The Ritz-Carlton, Pentagon City Fixed (4) - % - - 65,000 Grand Bohemian Hotel Orlando, Autograph Fixed 4.53 % 3/1/2026 55,685 56,796
Collection
Marriott San Francisco Airport Fixed 4.63 % 5/1/2027 110,153 112,102 Waterfront Total Mortgage Loans 5.64 % (5)$ 319,988 $ 389,538 Corporate Credit Facilities Corporate Credit Facility Term Loan Variable (6) 5.84 % 9/13/2024 125,000 125,000
Revolving Credit Facility Variable (7) 6.14 % 2/28/2024 - - Total Corporate Credit Facilities$ 125,000 $ 125,000 2020 Senior Notes$500M Fixed 6.38 % 8/15/2025 500,000 500,000 2021 Senior Notes$500M Fixed 4.88 % 6/1/2029 500,000 500,000 Loan premiums, discounts and unamortized (15,883) (20,307) deferred financing costs, net (8) Total Debt, net of loan premiums,
(5)
discounts and unamortized deferred 5.65 %$ 1,429,105 $ 1,494,231
financing costs
(1)The rates shown represent the annual interest rates as ofDecember 31, 2022 . The variable index for the corporate credit facilities reflects a 25 basis point LIBOR floor which was applicable as ofDecember 31, 2022 . Effective as ofJanuary 10, 2023 , the variable index for the corporate credit facilities is adjusted Term SOFR, subject to a zero basis point floor, as further described under "Part II-Item. 7 Management's Discussion of Financial Condition and Results of Operations - Liquidity and Capital Resources - Corporate Credit Facilities."
(2)A variable interest rate loan for which the interest rate was fixed through
(3)A variable interest rate loan for which the interest rate was fixed on$25 million of the balance throughOctober 2022 , after which the rate reverted to a variable index based on one-month LIBOR. InJanuary 2023 , the Company amended this mortgage loan to update the variable index from one-month LIBOR to Term SOFR and extend the maturity date throughJanuary 2028 .
(4)A variable interest rate loan for which the interest rate was fixed through
(5)Represents the weighted-average interest rate as of
(6)The spread to LIBOR varied based on the Company's leverage ratio. The applicable interest rate was set to the highest level of grid-based pricing during the covenant waiver period, however, with the delivery of the compliance certificates under the corporate credit facilities for the fiscal quarter endingJune 30, 2022 , the Company exited the covenant waiver period and the applicable interest rate reverted to pricing based on the Company's leverage ratio. In 63 --------------------------------------------------------------------------------January 2023 , the corporate credit facility term loan was refinanced with a new$225 million term loan, consisting of a$125 million initial term loan and a$100 million delayed draw term loan and, effective as ofJanuary 10, 2023 , the spread to adjusted Term SOFR varies based on the Company's leverage ratio, as further described under "Part II-Item. 7 Management's Discussion of Financial Condition and Results of Operations - Liquidity and Capital Resources - Corporate Credit Facilities." (7)Commitments under the revolving credit facility totaled$523 million throughFebruary 2022 , after which the total commitments decreased to$450 million through the date of the refinancing of the revolving credit facility inJanuary 2023 . The spread to LIBOR varied based on the Company's leverage ratio. The applicable interest rate was set to the highest level of grid-based pricing during the covenant waiver period, however, with the delivery of the compliance certificates under the corporate credit facilities for the fiscal quarter endingJune 30, 2022 , the Company exited the covenant waiver period and the applicable interest rate reverted to pricing based on the Company's leverage ratio. The revolving credit facility was refinanced with a new$450 million revolving line of credit and, effective as ofJanuary 10, 2023 , the spread to adjusted Term SOFR varies based on the Company's leverage ratio, as further described under "Part II-Item. 7 Management's Discussion of Financial Condition and Results of Operations - Liquidity and Capital Resources - Corporate Credit Facilities."
(8)Includes loan premiums, discounts and deferred financing costs, net of accumulated amortization.
Mortgage Loans
The mortgage loan agreements require contributions to be made to FF&E reserves. In addition, certain quarterly financial covenants have been waived for a period of time specified in the respective amended loan agreements and certain financial covenants have been adjusted following the waiver periods. InJanuary 2022 , we repaid in full the$65.0 million outstanding balance on the mortgage loan collateralized by The Ritz-Carlton, Pentagon City. InJanuary 2023 , we amended the mortgage loan collateralized by Andaz Napa to update the variable index on the$55 million loan from LIBOR-based to Term SOFR and extend the maturity date throughJanuary 2028 .
Corporate Credit Facilities
We previously entered into (i) a revolving credit facility pursuant to an Amended and Restated Revolving Credit Agreement, dated as ofJanuary 11, 2018 , by and amongXHR LP (the "Borrower"), the lenders from time to time party thereto andJPMorgan Chase Bank, N.A ., as administrative agent (the "Revolving Credit Agreement") and (ii) a term loan facility pursuant to a Term Loan Agreement, dated as ofSeptember 13, 2017 , by and among the Borrower, the lenders from time to time party thereto, andKeyBank National Association , as administrative agent (the "Term Loan Agreement" and, together with the Revolving Credit Agreement, the "Credit Agreements"). In 2020 and 2021, we entered into amendments to our Credit Agreements (collectively, the "Credit Agreement Amendments", and the Credit Agreements as so amended, the "Amended Credit Agreements"), which, among other things, (i) relieved the Borrower's compliance with certain covenants under the Amended Credit Agreements until the date that financial statements were required to be delivered thereunder for the fiscal quarter endingJune 30 2022 (the "covenant waiver period"), (ii) modified certain financial covenants, once quarterly testing resumed, through the second quarter of 2023 (the "permitted variations period"), (iii) required compliance with certain additional mandatory prepayment requirements and covenants during the covenant waiver period, including affirmative covenants related to the pledge of equity of certain subsidiaries and a minimum liquidity financial covenant and (iv) imposed restrictions on certain acquisitions, investments, capital expenditures, ground leases and distributions. We determined that we met the modified financial covenants for the quarter endedJune 30, 2022 and delivered the compliance certificates demonstrating such compliance under the Amended Credit Agreements and, as a result, are no longer subject to the additional restrictions and covenants that applied during the covenant waiver period, other than in respect of certain restrictions and covenants related to the pledge of equity of certain subsidiaries which remained applicable until the end of the permitted variations period. As ofDecember 31, 2022 , there was no outstanding balance on the revolving credit facility. During the years endedDecember 31, 2022 , 2021 and 2020, the Company incurred unused commitment fees of approximately$1.4 million ,$1.4 million and$0.5 million , respectively. During the year endedDecember 31, 2022 , the Company did not incur interest expense on the revolving credit facility, and incurred interest expense of$1.9 million and$8.6 million during the years endedDecember 31, 2021 and 2020, respectively. InJanuary 2023 ,XHR LP (the "Borrower") entered into a new$675 million senior unsecured credit facility comprised of a$450 million revolving line of credit (the "Revolving Line of Credit"), a$125 million term loan (the "Term Loan$125M ") and a$100 million delayed draw term loan (the "Term Loan$100M " and, together with the Term Loan$125M , the "2023 Term Loans") pursuant to a Revolving Credit and Term Loan Agreement, dated as ofJanuary 10, 2023 , by and among the Borrower,JPMorgan Chase Bank, N.A ., as administrative agent, and the lenders and other parties thereto (the "2023 Credit Agreement"). The Revolving Line of Credit and the Term Loan$125M refinanced in full our existing corporate credit facilities, and as a result of such refinancing, the pledges of equity of certain subsidiaries securing obligations under the Amended Credit Agreements and the Senior Notes were released. The Term Loan$100M was funded onJanuary 17, 2023 and was used to repay in full the mortgage loan collateralized byRenaissance Atlanta Waverly Hotel & Convention Center that was due August 64 -------------------------------------------------------------------------------- 2024. Proceeds from future Revolving Line of Credit borrowings may be used for working capital, general corporate or other purposes permitted by the 2023 Credit Agreement. The Revolving Line of Credit matures inJanuary 2027 and can be extended up to an additional year. The interest rate on the Revolving Line of Credit is based on a pricing grid with a range of 145 to 275 basis points over the applicable Term SOFR rate as determined by the Company's leverage ratio. The 2023 Term Loans mature inMarch 2026 , can be extended up to an additional year, and bear interest rates consistent with the pricing grid on the Revolving Line of Credit. Senior Notes We issued$500 million of 6.375% Senior Notes (the "2020 Senior Notes") during the year endedDecember 31, 2020 . InMay 2021 , we issued$500 million of 4.875 Senior Notes due in 2029 (the "2021 Senior Notes" and together with the 2020 Senior Notes, the "Senior Notes"). The indentures governing the Senior Notes contain customary covenants that limit our ability and, in certain circumstances, the ability of its 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. In addition, the indentures governing the Senior Notes require us to maintain total unencumbered assets as of each fiscal quarter of at least 150% of total unsecured indebtedness, in each case calculated on a consolidated basis. The Senior Notes are fully and unconditionally guaranteed, jointly and severally, by us and certain of our subsidiaries that incur or guarantee any indebtedness under our corporate credit facilities, any additional first lien obligations, certain other bank indebtedness or any other material capital markets indebtedness (each, a "subsidiary guarantor" and together with the Company, the "guarantors"). The collateral securing the Senior Notes was released in full in connection with the entry into the 2023 Credit Agreement and the refinancing of the obligations under the Amended Credit Agreements. Accordingly, on and afterJanuary 10, 2023 , the Senior Notes constituted unsecured obligations. We may redeem the 2021 Senior Notes prior toJune 1, 2024 at a make-whole price. AfterJune 1, 2024 , we may also redeem the Senior Notes at certain redemption prices that decline ratably to par. We may also redeem a portion of the Senior Notes with proceeds from certain equity offerings or certain support received from government authorities in connection with the COVID-19 global pandemic, subject to certain conditions. We may, from time to time, seek to retire or purchase any of the outstanding Senior Notes through cash purchases and/or exchanges for the other securities in open market purchases, privately negotiated transactions or otherwise. Such repurchases or exchanges, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. The amounts involved may be material.
Debt Covenants
As of
Derivatives
InJanuary 2022 , two interest rate swaps were terminated in connection with the repayment of a$65.0 million mortgage loan. Further, our remaining interest rate swaps expired inOctober 2022 which increased our exposure to rising interest rates. We continuously monitor and evaluate the level of floating rate debt exposure that we have and will continue to use interest rate hedges to limit it as we determine appropriate. See "Part II-Item. 7 Management's Discussion of Financial Condition and Results of Operations - Derivative Instruments" for more information related to our hedging policy and transaction activity.
Capital Markets
We maintain an at-the-market ("ATM") program pursuant to an Equity Distribution
Agreement ("ATM Agreement") with Wells Fargo Securities, LLC , Robert W. Baird &
Co. Incorporated , Jefferies LLC , KeyBanc Capital Markets Inc. and Raymond
James & Associates, Inc. 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 years ended December 31, 2022 , 2021 and 2020.
As of December 31, 2022 , we had $200 million available for sale under the ATM
Agreement.
Our Board of Directors has authorized a stock repurchase program (the
"Repurchase Program"). In
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to $275 million of outstanding common stock in the open market, in privately
negotiated transactions or otherwise, including pursuant to Rule 10b5-1 plans.
Such repurchases or exchanges, if any, will depend on prevailing market
conditions, our liquidity requirements, contractual restrictions and other
factors. The Repurchase Program does not have an expiration date. This
Repurchase Program may be suspended or discontinued at any time and does not
obligate us to acquire any particular amount of shares.
During the year ended December 31, 2022 , 1,912,794 shares were repurchased under
the Repurchase Program, at a weighted-average price of $14.74 per share for an
aggregate purchase price of $28.2 million . No shares were purchased as part of
the Repurchase Program during the year ended December 31, 2021 . During the year
ended December 31, 2020 , 165,516 shares were repurchased under the Repurchase
Program, at a weighted-average price of $13.68 per share for an aggregate
purchase price of $2.3 million . As of December 31, 2022 , the Company had
approximately $166.5 million remaining under its share repurchase authorization.
Off-Balance Sheet Arrangements
As ofDecember 31, 2022 , 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 atDecember 31, 2022 totaled$12.1 million .
Capital Expenditures and Reserve Funds
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. As ofDecember 31, 2022 and 2021, we had a total of$46.3 million and$29.3 million , respectively, of FF&E reserves. During the year endedDecember 31, 2022 and 2021, we made total capital expenditures of$70.4 million and$31.8 million , respectively. Sources and Uses of Cash 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. As a result of the impact the COVID-19 pandemic has had on our business, certain sources of capital may not be as readily available to us as they have been historically. 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. 66
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Comparison of the Year Ended
The table below presents summary cash flow information for the consolidated statements of cash flows (in thousands):
Year
Ended
2022 2021
Net cash provided by operating activities $ 187,129 $ 40,763
Net cash used in investing activities (265,393) (24,210)
Net cash (used in) provided by financing activities (110,057) 108,892
Net (decrease) increase in cash and cash equivalents and restricted cash
$ (188,321)
554,231 428,786
Cash and cash equivalents and restricted cash, at end of
year $ 365,910 $ 554,231
Operating
•Cash provided by operating activities was $187.1 million and $40.8 million for
the year ended December 31, 2022 and 2021, respectively. Cash flows from
operating activities generally consist of the net cash generated by our hotel
operations, offset by the cash paid for 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
renovations. The net increase to cash provided by operating activities during
the year ended December 31, 2022 was primarily due to an increase in hotel
operating income attributed to a broad-based recovery from the impact of the
COVID-19 pandemic and the acquisition of W Nashville in March 2022 , net of
reductions from the one hotel sold in 2021 and the three hotels sold in 2022.
Refer to the "Results of Operations" section for further discussion of our
operating results for the years ended December 31, 2022 and 2021.
Investing
•Cash used in investing activities was$265.4 million and$24.2 million for the year endedDecember 31, 2022 and 2021, respectively. Cash used in investing activities for the year endedDecember 31, 2022 was attributed to$328.5 million for the acquisition ofW Nashville and$70.4 million in capital improvements at our hotel properties, which was partially offset by net proceeds of$127.1 million from the dispositions ofKimpton Hotel Monaco Chicago ,Bohemian Hotel Celebration , Autograph Collection andKimpton Hotel Monaco Denver ,$4.0 million of proceeds from property insurance and$2.3 million of performance guaranty payments received that were recorded as a reduction in the respective hotel's cost basis. Cash provided by investing activities for the year endedDecember 31, 2021 was attributed to$31.8 million in capital improvements at our hotel properties which was partially offset by$4.7 million in net proceeds from the disposition ofMarriott Charleston Town Center and$2.9 million of performance guaranty payments received that were recorded as a reduction in the respective hotel's cost basis. Financing •Cash used in financing activities during the year endedDecember 31, 2022 was$110.1 million and cash provided by financing activities was$108.9 million during year endedDecember 31, 2021 . Cash used in financing activities for the year endedDecember 31, 2022 was attributed to the repayment of mortgage debt totaling$65.0 million , the repurchase of common stock totaling$28.2 million , the payment of$11.7 million in dividends, principal payments of mortgage debt totaling$4.6 million and shares redeemed to satisfy tax withholding on vested share-based compensation of$0.6 million . Cash provided by financing activities for the year endedDecember 31, 2021 was attributed to$500.0 million in proceeds from the issuance of the 2021 Senior Notes, offset by the repayment of the revolving credit facility of$163.1 million , the repayment of the corporate credit facility term loan maturing in 2023 totaling$150.0 million , the repayment of mortgage debt totaling$56.8 million , payment of loan fees and issuance costs of$10.2 million , principal payments of mortgage debt totaling$6.0 million , redemption of Operating Partnership Units for common stock and cash of$4.1 million , and shares redeemed to satisfy tax withholding on vested share-based compensation of$0.9 million .
Derivative Instruments
In the normal course of business, we are exposed to the effects of interest rate
changes. While we do not currently have any derivative instruments, we have had
and, in the future, may enter into derivative instruments including interest
rate swaps, caps and collars to manage or hedge interest rate risk in accordance
with the criteria of the hedging policy approved by our Board of Directors.
Derivative instruments are subject to fair value reporting at each reporting
date and the increase or decrease in fair value is recorded in net income (loss)
or accumulated other comprehensive income (loss), based on the applicable hedge
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accounting guidance. We anticipate that our interest rate hedges will be highly
effective because the terms of the derivative instruments closely match the
terms of the related hedged debt agreements. As such, periodic changes in the
fair value of these derivatives are expected to be reflected in other
comprehensive income (loss) in our consolidated financial statements.
Derivatives expose the Company to credit risk in the event of non-performance by
the counterparties under the terms of the interest rate hedge agreements. The
Company believes it minimizes the credit risk by transacting with well-known
creditworthy financial institutions.
On March 5, 2021 , the U.K. Financial Conduct Authority ("FCA") announced that
USD LIBOR will either cease to be provided by any administrator or no longer be
representative immediately after December 31, 2021 , in the case of 1 week and 2
month USD settings, and immediately after June 30, 2023 , in the case of the
remaining USD settings. This announcement has several implications, including
setting the spread that may be used to automatically convert contracts from
LIBOR to the Secured Overnight Financing Rate ("SOFR"). Additionally, banking
regulators are encouraging banks to discontinue new LIBOR debt issuance by
December 31, 2021 . Any changes adopted by the FCA or other governing bodies in
the method used for determining LIBOR may result in a sudden or prolonged
increase or decrease in reported LIBOR. If that were to occur, our interest
payments could change. In addition, uncertainty about the extent and manner of
future changes may result in interest rates and/or payments that are higher or
lower than if LIBOR were to remain available in its current form.
Inflation
We rely on the performance of our hotels to increase revenues in order to keep pace with inflation. Generally, our third-party management companies possess the ability to adjust room rates daily, except for group or corporate rates contractually committed to in advance, although competitive pressures and prevailing economic conditions may limit the ability of our third-party management companies to raise rates faster than inflation or even at the same rate. Inflation may affect our expenses, including, without limitation, by increasing costs such as wages, benefits, food, taxes, property and casualty insurance, borrowing costs, utilities, the cost of capital expenditures, etc. Inflation may also reduce the demand for travel, levels of spending in transient or group business and leisure segments, and levels of consumer confidence. In addition, our hotel expenses may increase at higher rates than hotel revenue.
Seasonality
Demand in the lodging industry is affected by recurring seasonal patterns, which are greatly influenced by overall economic cycles, the geographic locations of the hotels and the customer mix at the hotels. The impact of the COVID-19 pandemic and subsequent recovery has and may continue to disrupt our historical seasonal patterns. Subsequent Events InJanuary 2023 ,XHR LP (the "Borrower") entered into a new$675 million senior unsecured credit facility comprised of a$450 million revolving line of credit (the "Revolving Line of Credit"), a$125 million term loan (the "Term Loan$125M ") and a$100 million delayed draw term loan (the "Term Loan$100M " and, together with the Term Loan$125M , the "2023 Term Loans") pursuant to a Revolving Credit and Term Loan Agreement, dated as ofJanuary 10, 2023 , by and among the Borrower,JPMorgan Chase Bank, N.A ., as administrative agent, and the lenders and other parties thereto (the "2023 Credit Agreement"). The Revolving Line of Credit and the Term Loan$125M refinanced in full our existing corporate credit facilities, and as a result of such refinancing, the pledges of equity of certain subsidiaries securing obligations under the Amended Credit Agreements and the Senior Notes were released. The Term Loan$100M was funded onJanuary 17, 2023 and was used to repay in full the mortgage loan collateralized byRenaissance Atlanta Waverly Hotel & Convention Center that was dueAugust 2024 . Proceeds from future Revolving Line of Credit borrowings may be used for working capital, general corporate or other purposes permitted by the 2023 Credit Agreement. The Revolving Line of Credit matures inJanuary 2027 and can be extended up to an additional year. The interest rate on the Revolving Line of Credit is based on a pricing grid with a range of 145 to 275 basis points over the applicable Term SOFR rate as determined by the Company's leverage ratio. The 2023 Term Loans mature inMarch 2026 , can be extended up to an additional year, and bear interest rates consistent with the pricing grid on the Revolving Line of Credit. Additionally, inJanuary 2023 , we amended the mortgage loan collateralized by Andaz Napa to update the variable index from LIBOR-based to Term SOFR and extend the maturity date throughJanuary 2028 .
In January and
New Accounting Pronouncements Not Yet Implemented
See Note 2 to the accompanying consolidated financial statements included herein this Annual Report for additional information related to recently issued accounting pronouncements.
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