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What changed in ASHFORD HOSPITALITY TRUST INC's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of ASHFORD HOSPITALITY TRUST INC's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+375 added−320 removedSource: 10-K (2025-03-21) vs 10-K (2024-03-14)

Top changes in ASHFORD HOSPITALITY TRUST INC's 2024 10-K

375 paragraphs added · 320 removed · 244 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeAs of December 31, 2023, we held interests in the following assets: • 90 consolidated hotel properties, which represent 20,549 total rooms; • Four consolidated operating hotel properties, which represent 405 total rooms owned through a 99.4% ownership interest in Stirling REIT OP, LP (“Stirling OP”), which was formed by Stirling Hotels & Resorts, Inc.
Biggest changeAs of December 31, 2024, we held interests in the following assets: • 68 consolidated operating hotel properties, which represent 17,051 total rooms; • one consolidated operating hotel property, which represents 188 total rooms through a 29.3% owned investment in a consolidated entity; • Four consolidated operating hotel properties, which represent 405 total rooms owned through a 98.8% ownership interest in Stirling REIT OP, LP (“Stirling OP”), which was formed by Stirling Inc. to acquire and own a diverse portfolio of stabilized income-producing hotels and resorts; and • an investment in an entity that owns the Meritage Resort and Spa and the Grand Reserve at the Meritage (the “Meritage Investment”) in Napa, CA, with a carrying value of approximately $7.6 million.
Declaration of dividends in 2024 on our preferred stock may require a determination by our board of directors, at the time of any determination, that the Company would continue to have positive equity on a fair value basis, among other considerations. Our board of directors will continue to review our dividend policy and make future announcements with respect thereto.
Declaration of dividends in 2025 on our preferred stock may require a determination by our board of directors, at the time of any determination, that the Company would continue to have positive equity on a fair value basis, among other considerations. Our board of directors will continue to review our dividend policy and make future announcements with respect thereto.
See note 17 to our consolidated financial statements. Mr. Monty J. Bennett is chairman and chief executive officer of Ashford Inc. and, together with his father Mr. Archie Bennett, Jr., as of December 31, 2023, holds a controlling interest in Ashford Inc.
See note 17 to our consolidated financial statements. Mr. Monty J. Bennett is chairman and chief executive officer of Ashford Inc. and, together with his father Mr. Archie Bennett, Jr., as of December 31, 2024, holds a controlling interest in Ashford Inc.
Advisory services which would otherwise be provided by employees are provided by subsidiaries of Ashford Inc. and by our appointed officers. Subsidiaries of Ashford Inc. have approximately 105 full-time employees who provide advisory services to us.
Advisory services which would otherwise be provided by employees are provided by subsidiaries of Ashford Inc. and by our appointed officers. Subsidiaries of Ashford Inc. have approximately 101 full-time employees who provide advisory services to us.
We do not anticipate paying any dividends on our outstanding common stock for any quarter during 2024 and expect to pay dividends on our outstanding Preferred Stock (as defined below) during 2024.
We do not anticipate paying any dividends on our outstanding common stock for any quarter during 2025 and expect to pay dividends on our outstanding Preferred Stock (as defined below) during 2025.
As of December 31, 2023, our 90 hotel properties and four Stirling OP hotel properties were leased or owned by our wholly owned or majority owned subsidiaries that are treated as taxable REIT subsidiaries for U.S. federal income tax purposes (collectively, these subsidiaries are referred to as “Ashford TRS”).
As of December 31, 2024, our 69 hotel properties and four Stirling OP hotel properties were leased or owned by our wholly owned or majority owned subsidiaries that are treated as taxable REIT subsidiaries for U.S. federal income tax purposes (collectively, these subsidiaries are referred to as “Ashford TRS”).
These products and services include, but are not limited to, design and construction services, debt placement and related services, audio visual services, real estate advisory and brokerage services, insurance policies covering general liability, workers’ compensation and business automobile claims, insurance claims services, hypoallergenic premium rooms, broker-dealer and distribution services, mobile key technology and cash management services.
These products and services include, but are not limited to, design and construction services, debt placement and related services, audiovisual services, real estate advisory and brokerage services, insurance policies covering general liability, workers’ compensation and business automobile claims and insurance claims services, hypoallergenic premium rooms, watersport activities, broker-dealer and distribution services, mobile key technology and cash management services.
To the extent that it is consistent with maintaining our REIT status, we may maintain accumulated earnings of Ashford TRS in that entity. On December 5, 2023, our board of directors reviewed and approved our 2024 dividend policy.
To the extent that it is consistent with maintaining our REIT status, we may maintain accumulated earnings of Ashford TRS in that entity. On December 10, 2024, our board of directors reviewed and approved our 2025 dividend policy.
As of December 31, 2023, our portfolio consisted of 94 consolidated operating hotel properties, 87 of which operated under franchise licenses or brand management agreements, which provided for the right to operate each hotel under the applicable brand. See Item 2 Properties, below for a complete listing of all hotels by brand.
As of December 31, 2024, our portfolio consisted of 73 consolidated operating hotel properties, 68 of which operated under franchise licenses or brand management agreements, which provided for the right to operate each hotel under the applicable brand. See Item 2 Properties, below for a complete listing of all hotels by brand.
As of December 31, 2023, the Company had a deficit in stockholders’ equity of approximately $345.9 million and had not generated current earnings from which a dividend is potentially payable since the year ended December 31, 2015.
As of December 31, 2024, the Company had a deficit in stockholders’ equity of approximately $419.2 million and had not generated current earnings from which a dividend is potentially payable since the year ended December 31, 2015.
Series D Convertible Preferred Stock, which, along with all unpaid accrued and accumulated dividends thereon, was convertible (at a conversion price of $117.50 per share) into an additional approximate 4,229,668 shares of Ashford Inc. common stock, which if converted as of December 31, 2023, would have increased the Bennetts’ ownership interest in Ashford Inc. to 65.0%.
Series D Convertible Preferred Stock, which, along with all unpaid accrued and accumulated dividends thereon, was convertible (at a conversion price of $117.50 per share) into an additional approximate 4,395,281 shares of Ashford Inc. common stock, which if converted as of December 31, 2024, would have increased the Bennetts’ ownership interest in Ashford Inc. to 84.9%.
As of March 12, 2024, the Company had no accumulated unpaid dividends on its outstanding preferred stock.
As of March 19, 2025, the Company had no accumulated unpaid dividends on its outstanding preferred stock.
All of the hotel properties in our portfolio are currently asset-managed by Ashford LLC. We do not have any employees.
All of the hotel properties in our portfolio are currently asset-managed by Ashford LLC. We do not have any employees. All of the services that might be provided by employees are provided to us by Ashford LLC.
Our assessment of market conditions will determine asset reallocation strategies. While we seek to capitalize on favorable market fundamentals, conditions beyond our control may have an impact on overall profitability, our investment opportunities and our investment returns.
Our assessment of market conditions will determine asset reallocation strategies. While we seek to capitalize on favorable market fundamentals, conditions beyond our control may have an impact on overall profitability, our investment 4 opportunities and our investment returns. We will continue to seek ways to benefit from the cyclical nature of the hotel industry.
As of December 31, 2023, the Bennetts owned approximately 610,261 shares of Ashford Inc. common stock, which represented an approximate 19.0% ownership interest in Ashford Inc., and owned 18,758,600 shares of Ashford Inc.
As of December 31, 2024, the Bennetts owned approximately 809,937 shares of Ashford Inc. common stock, which represented an approximate 46.6% ownership interest in Ashford Inc., and owned 18,758,600 shares of Ashford Inc.
Direct Hotel Investments —In selecting hotels to acquire, we target hotels that offer either a high current return or the opportunity to increase in value through repositioning, capital investments, market-based recovery, or improved management practices.
Our board of directors may change any or all of these strategies at any time without stockholder approval or notice. Direct Hotel Investments —In selecting hotels to acquire, we target hotels that offer either a high current return or the opportunity to increase in value through repositioning, capital investments, market-based recovery, or improved management practices.
We will continue to seek ways to benefit from the cyclical nature of the hotel industry. 4 To take full advantage of future investment opportunities in the lodging industry, we intend to seek our investment opportunities according to the asset allocation strategies described below.
To take full advantage of future investment opportunities in the lodging industry, we intend to seek our investment opportunities according to the asset allocation strategies described below. However, due to ongoing changes in market conditions, we will continually evaluate the appropriateness of our investment strategies.
The 18,758,600 shares of Series D Convertible Preferred Stock owned by Mr. Monty J. Bennett and Mr. Archie Bennett, Jr. include 360,000 shares owned by trusts. Liquidity As of December 31, 2023, the Company held cash and cash equivalents of $165.2 million and restricted cash of $146.3 million (including amounts held for sale).
The 18,758,600 shares of Series D Convertible Preferred Stock owned by Mr. Monty J. Bennett and Mr. Archie Bennett, Jr. include 360,000 shares owned by trusts.
Remington Hospitality, a subsidiary of Ashford Inc., manages 61 of our 90 hotel properties and three of the four Stirling OP hotel properties. Third-party management companies manage the remaining hotel properties. Ashford Inc. also provides other products and services to us or our hotel properties through certain entities in which Ashford Inc. has an ownership interest.
Ashford Inc. also provides other products and services to us or our hotel properties through certain entities in which Ashford Inc. has an ownership interest.
All of the services that might be provided by employees are provided to us by Ashford LLC. 3 We do not operate any of our hotel properties directly; instead, we contractually engage hotel management companies to operate them for us under management contracts.
We do not operate any of our hotel properties directly; instead, we contractually engage hotel management companies to operate them for us under management contracts. Remington Hospitality, a subsidiary of Ashford Inc., manages 50 of our 69 3 hotel properties and three of the four Stirling OP hotel properties. Third-party management companies manage the remaining hotel properties.
Removed
(“Stirling Inc.”) to acquire and own a diverse portfolio of stabilized income-producing hotels and resorts.
Added
Ashford Inc. has filed a Rule 13e-3 Transaction Statement on Schedule 13E-3 and, on July 29, 2024, effected a reverse and forward stock split as part of a plan to deregister Ashford Inc.’s common stock under the Exchange Act and delist its common stock from the NYSE American LLC (the “NYSE American”).
Removed
See note 4 to our consolidated financial statements; • one consolidated hotel property under development through a 32.5% owned investment in a consolidated entity; • 15.1% ownership in OpenKey with a carrying value of $1.6 million; and • an investment in an entity that owns the Meritage Resort and Spa and the Grand Reserve at the Meritage (the “Meritage Investment”) in Napa, CA, with a carrying value of approximately $8.4 million.
Added
The last day of trading of Ashford Inc. common stock on the NYSE American was July 26, 2024. Liquidity As of December 31, 2024, the Company held cash and cash equivalents of $112.9 million and restricted cash of $107.6 million (including amounts held for sale). The vast majority of the restricted cash comprises lender and manager held reserves.
Removed
The vast majority of the restricted cash comprises lender and manager held reserves.
Removed
However, due to ongoing changes in market conditions, we will continually evaluate the appropriateness of our investment strategies. Our board of directors may change any or all of these strategies at any time without stockholder approval or notice.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThese officers and directors of ours may influence us to sell, not sell, or refinance certain properties, even if such actions or inactions might be financially advantageous to our stockholders, or to enter into tax deferred exchanges with the proceeds of such sales when such a reinvestment might not otherwise be in our best interest. 23 We are a party to a master hotel management agreement and a hotel management exclusivity agreement with Remington Hospitality and a master project management agreement and a project management exclusivity agreement with Premier, which describes the terms of Remington Hospitality’s and Premier’s, respectively, services to our hotels, as well as any future hotels we may acquire that may or may not be property managed by Remington Hospitality or project managed by Premier.
Biggest changeThese officers and directors of ours may influence us to sell, not sell, or refinance certain properties, even if such actions or inactions might be financially advantageous to our stockholders, or to enter into tax deferred exchanges with the proceeds of such sales when such a reinvestment might not otherwise be in our best interest.
For example, our board of directors can do the following: • amend or revise at any time our dividend policy with respect to our common stock or preferred stock (including by eliminating, failing to declare, or significantly reducing dividends on these securities); • terminate our advisor under certain conditions pursuant to the advisory agreement, subject to the payment of a termination fee; • amend or revise at any time and from time to time our investment, financing, borrowing and dividend policies and our policies with respect to all other activities, including growth, debt, capitalization and operations, subject to the limitations and restrictions provided in our advisory agreement and mutual exclusivity agreement; • amend our policies with respect to conflicts of interest provided that such changes are consistent with applicable legal requirements; • subject to the terms of our charter, prevent the ownership, transfer and/or accumulation of shares in order to protect our status as a REIT or for any other reason deemed to be in the best interests of us and our stockholders; • issue additional shares without obtaining stockholder approval, which could dilute the ownership of our then-current stockholders; • subject to the terms of any outstanding classes or series of preferred stock, classify or reclassify any unissued shares of our common stock or preferred stock and set the preferences, rights and other terms of such classified or reclassified shares, without obtaining stockholder approval; • employ and compensate affiliates (subject to disinterested director approval); • direct our resources toward investments that do not ultimately appreciate over time; and • determine that it is not in our best interests to attempt to qualify, or to continue to qualify, as a REIT.
For example, our board of directors can do the following: • amend or revise at any time our dividend policy with respect to our common stock or preferred stock (including by eliminating, failing to declare, or significantly reducing dividends on these securities); • terminate our advisor under certain conditions pursuant to the advisory agreement, subject to the payment of a termination fee; • amend or revise at any time and from time to time our investment, financing, borrowing and dividend policies and our policies with respect to all other activities, including growth, debt, capitalization and operations, subject to the limitations and restrictions provided in our advisory agreement and mutual exclusivity agreement; • amend our policies with respect to conflicts of interest provided that such changes are consistent with applicable legal requirements; • subject to the terms of our charter, prevent the ownership, transfer and/or accumulation of shares in order to protect our status as a REIT or for any other reason deemed to be in the best interests of us and our stockholders; • issue additional shares without obtaining stockholder approval, which could dilute the ownership of our then-current stockholders; • subject to the terms of any outstanding classes or series of preferred stock, classify or reclassify any unissued shares of our common stock or preferred stock and set the preferences, rights and other terms of such classified or reclassified shares, without obtaining stockholder approval; • employ and compensate affiliates (subject to disinterested director approval); 38 • direct our resources toward investments that do not ultimately appreciate over time; and • determine that it is not in our best interests to attempt to qualify, or to continue to qualify, as a REIT.
These provisions include: • “business combination” provisions that, subject to limitations, prohibit certain business combinations between us and an “interested stockholder” (defined generally as any person who beneficially owns 10% or more of the voting power of our shares or an affiliate thereof) for five years after the most recent date on which the stockholder becomes an interested stockholder, and thereafter impose special stockholder voting requirements on these business combinations, unless certain fair price requirements set forth in the MGCL are satisfied; and • “control share” provisions that provide that “control shares” of our company (defined as outstanding shares which, when aggregated with other shares controlled by the stockholder, entitle the stockholder to exercise one of three increasing ranges of voting power in electing directors) acquired in a “control share acquisition” (defined as the direct or indirect acquisition of ownership or control of outstanding “control shares”) have no voting rights except to the 37 extent approved by our stockholders by the affirmative vote of at least two-thirds of all the votes entitled to be cast on the matter, excluding all interested shares.
These provisions include: • “business combination” provisions that, subject to limitations, prohibit certain business combinations between us and an “interested stockholder” (defined generally as any person who beneficially owns 10% or more of the voting power of our shares or an affiliate thereof) for five years after the most recent date on which the stockholder becomes an interested stockholder, and thereafter impose special stockholder voting requirements on these business combinations, unless certain fair price requirements set forth in the MGCL are satisfied; and • “control share” provisions that provide that “control shares” of our company (defined as outstanding shares which, when aggregated with other shares controlled by the stockholder, entitle the stockholder to exercise one of three increasing ranges of voting power in electing directors) acquired in a “control share acquisition” (defined as the direct or indirect acquisition of ownership or control of outstanding “control shares”) have no voting rights except to the extent approved by our stockholders by the affirmative vote of at least two-thirds of all the votes entitled to be cast on the matter, excluding all interested shares.
Mortgages and other investments are often obtained through a competitive bidding process. In addition, competitors may seek to establish relationships with the financial institutions and other firms from which we intend to purchase such assets. Competition may result in higher prices for mortgage assets, lower yields, and a narrower spread of yields over our borrowing costs.
Mortgages and other investments 13 are often obtained through a competitive bidding process. In addition, competitors may seek to establish relationships with the financial institutions and other firms from which we intend to purchase such assets. Competition may result in higher prices for mortgage assets, lower yields, and a narrower spread of yields over our borrowing costs.
In making this determination, our advisor, using substantial discretion, will consider the investment strategy and guidelines of each entity with respect to acquisition of properties, portfolio concentrations, tax consequences, regulatory restrictions, liquidity requirements and other factors deemed appropriate. In making the allocation 22 determination, our advisor has no obligation to make any such investment opportunity available to us.
In making this determination, our advisor, using substantial discretion, will consider the investment strategy and guidelines of each entity with respect to acquisition of properties, portfolio concentrations, tax consequences, regulatory restrictions, liquidity requirements and other factors deemed appropriate. In making the allocation determination, our advisor has no obligation to make any such investment opportunity available to us.
If we fail to satisfy the REIT gross income tests, unless our failure was due to reasonable cause and not due to willful neglect such that a REIT “savings clause” applied, we could lose our REIT status for U.S. federal income tax purposes. Complying with REIT requirements may force us to liquidate otherwise attractive investments.
If we fail to satisfy the REIT gross income tests, unless our failure was due to reasonable cause and not due to willful neglect such that a REIT “savings clause” applied, we could lose our REIT status for U.S. federal income tax purposes. 33 Complying with REIT requirements may force us to liquidate otherwise attractive investments.
Acquisitions of any property or additional portfolios of properties could generate additional operating expenses for us. Any future acquisitions may also require us to enter into property improvement plans that will increase our use of cash and could disrupt performance. As we acquire additional assets, we will be subject to the operational risks associated with owning those assets.
Acquisitions of any property or additional portfolios of properties could generate additional operating expenses for us. Any future acquisitions may also require us to enter into property improvement plans that will increase our use of cash and could disrupt performance. As we acquire additional 11 assets, we will be subject to the operational risks associated with owning those assets.
Because U.S. federal income tax laws restrict REITs and their subsidiaries from operating or managing hotels, third parties must operate our hotels. A REIT may lease its hotels to taxable REIT subsidiaries in which the REIT can own up to a 100% 12 interest. A taxable REIT subsidiary (“TRS”) pays corporate-level income tax and may retain any after-tax income.
Because U.S. federal income tax laws restrict REITs and their subsidiaries from operating or managing hotels, third parties must operate our hotels. A REIT may lease its hotels to taxable REIT subsidiaries in which the REIT can own up to a 100% interest. A taxable REIT subsidiary (“TRS”) pays corporate-level income tax and may retain any after-tax income.
We may offer more flexible terms on our mortgage loans than some providers of commercial mortgage loans, and as a result, we may have more difficulty selling or participating our loans to secondary purchasers than would these more traditional lenders. 28 We may be required to expend funds to correct defects or to make improvements before a property can be sold.
We may offer more flexible terms on our mortgage loans than some providers of commercial mortgage loans, and as a result, we may have more difficulty selling or participating our loans to secondary purchasers than would these more traditional lenders. We may be required to expend funds to correct defects or to make improvements before a property can be sold.
However the receipt of a transfer pricing study does not prevent the IRS from challenging the arm’s length nature of the lease terms between a REIT and its TRS 32 lessees. Consequently, there can be no assurance that we will be able to avoid application of the 100% excise tax discussed above.
However the receipt of a transfer pricing study does not prevent the IRS from challenging the arm’s length nature of the lease terms between a REIT and its TRS lessees. Consequently, there can be no assurance that we will be able to avoid application of the 100% excise tax discussed above.
In addition, we may in certain circumstances be liable for the actions of our third-party partners or co-venturers. 11 Our business strategy depends on our continued growth. We may fail to integrate recent and additional investments into our operations or otherwise manage our future growth, which may adversely affect our operating results.
In addition, we may in certain circumstances be liable for the actions of our third-party partners or co-venturers. Our business strategy depends on our continued growth. We may fail to integrate recent and additional investments into our operations or otherwise manage our future growth, which may adversely affect our operating results.
To the extent that such technologies play an increased role in day-to-day business and the necessity for business-related travel decreases, hotel room demand may decrease and we may be adversely affected. Our hotels may be subject to unknown or contingent liabilities which could cause us to incur substantial costs.
To the extent that such technologies play an increased role in day-to-day business and the necessity for business-related travel decreases, hotel room demand may decrease and we may be adversely affected. 19 Our hotels may be subject to unknown or contingent liabilities which could cause us to incur substantial costs.
The 31 changes enacted that have increased our state and local income tax burden include the taxation of modified gross receipts (as opposed to net taxable income), the suspension of and/or limitation on the use of net operating loss deductions, increases in tax rates and fees, the addition of surcharges, and the taxation of our partnership income at the entity level.
The changes enacted that have increased our state and local income tax burden include the taxation of modified gross receipts (as opposed to net taxable income), the suspension of and/or limitation on the use of net operating loss deductions, increases in tax rates and fees, the addition of surcharges, and the taxation of our partnership income at the entity level.
The more favorable rates applicable to regular corporate qualified dividends could cause investors who are taxed at individual rates to perceive investments in REITs to be relatively less attractive than investments in the stocks of non-REIT corporations that pay dividends, which could adversely affect the value of the shares of REITs, including our stock.
The more favorable rates applicable to regular corporate qualified dividends could cause investors who are taxed at individual rates to perceive investments in REITs to be relatively less attractive than investments in the stocks 32 of non-REIT corporations that pay dividends, which could adversely affect the value of the shares of REITs, including our stock.
Although a safe harbor to the characterization of the sale of real property by a REIT as a prohibited transaction is available, we cannot assure you that we can comply with the safe harbor or that we will avoid owning property that may be characterized as held primarily for sale to customers in the ordinary course of business.
Although a safe harbor to the characterization of the sale of real property by a REIT as a prohibited transaction is available, we cannot assure you that we can comply with the safe harbor or that we will avoid owning property that may be characterized as 34 held primarily for sale to customers in the ordinary course of business.
In doing so, we have made decisions with respect to what deductibles, policy limits, and terms are reasonable based on management’s experience, our risk profile, the loss history of our hotel managers and our properties, the nature of our properties and our businesses, our loss prevention efforts, the cost of insurance and other factors.
In doing so, we have made decisions with respect to what deductibles, policy limits, and terms are 29 reasonable based on management’s experience, our risk profile, the loss history of our hotel managers and our properties, the nature of our properties and our businesses, our loss prevention efforts, the cost of insurance and other factors.
These instruments involve risks, such as the risk that the counterparties may fail to honor their obligations under these arrangements, that these arrangements may not be effective in reducing our exposure to interest rate changes or other risks and that a court could rule that such agreements are not legally enforceable.
These instruments involve risks, such as the risk 16 that the counterparties may fail to honor their obligations under these arrangements, that these arrangements may not be effective in reducing our exposure to interest rate changes or other risks and that a court could rule that such agreements are not legally enforceable.
In addition, we generally do not require our borrowers to obtain environmental insurance on the properties they own that secure their loans from us. Numerous treaties, laws and regulations have been enacted to regulate or limit carbon emissions.
In addition, we 28 generally do not require our borrowers to obtain environmental insurance on the properties they own that secure their loans from us. Numerous treaties, laws and regulations have been enacted to regulate or limit carbon emissions.
Accordingly, our stockholders will have limited control over changes in our policies and those changes could adversely affect our financial condition, results of operations, the market price of our stock and our ability to make distributions to our stockholders. 39 Our rights and the rights of our stockholders to take action against our directors and officers are limited.
Accordingly, our stockholders will have limited control over changes in our policies and those changes could adversely affect our financial condition, results of operations, the market price of our stock and our ability to make distributions to our stockholders. Our rights and the rights of our stockholders to take action against our directors and officers are limited.
We cannot assure you that our hedging strategy and the instruments that we use 17 will adequately offset the risk of interest rate volatility or other risks or that our hedging transactions will not result in losses that may reduce the overall return on your investment.
We cannot assure you that our hedging strategy and the instruments that we use will adequately offset the risk of interest rate volatility or other risks or that our hedging transactions will not result in losses that may reduce the overall return on your investment.
For these reasons, there can be no assurances as to the value to be realized by the Company from these transactions or any future similar transactions. The hotel business is seasonal, which affects our results of operations from quarter to quarter. The hotel industry is seasonal in nature.
For these reasons, there can be no assurances as to the value to be realized by the Company from these transactions or any future similar transactions. 18 The hotel business is seasonal, which affects our results of operations from quarter to quarter. The hotel industry is seasonal in nature.
If an underlying entity cannot generate adequate cash 25 flow to meet such entity’s debt obligations (which may include leveraged obligations in excess of its aggregate assets), it may default on its loan agreements or be forced into bankruptcy.
If an underlying entity cannot generate adequate cash flow to meet such entity’s debt obligations (which may include leveraged obligations in excess of its aggregate assets), it may default on its loan agreements or be forced into bankruptcy.
We are unable to predict how this or any other future legislative or regulatory proposals or programs will be administered or implemented or in what form, or whether any additional or similar changes to statutes or regulations, including the interpretation or implementation thereof, will occur in the future.
We are unable to 14 predict how this or any other future legislative or regulatory proposals or programs will be administered or implemented or in what form, or whether any additional or similar changes to statutes or regulations, including the interpretation or implementation thereof, will occur in the future.
Bennett, our chairman, is also the chief executive officer, chairman and a significant stockholder of our advisor and is the chairman of Braemar. Our advisory agreement requires our advisor to present investments that satisfy our investment guidelines to us before presenting them to Braemar or any future client of our advisor.
Bennett, our chairman, is also the chief executive officer, chairman and a significant stockholder of our advisor and is the chairman of Braemar. Our advisory agreement requires our advisor to present investments that satisfy our 21 investment guidelines to us before presenting them to Braemar or any future client of our advisor.
Any of these consequences could have a material adverse effect on our consolidated financial position, results of operations and cash flows. 26 The assets associated with certain of our derivative transactions may not constitute qualified REIT assets and the related income may not constitute qualified REIT income.
Any of these consequences could have a material adverse effect on our consolidated financial position, results of operations and cash flows. The assets associated with certain of our derivative transactions may not constitute qualified REIT assets and the related income may not constitute qualified REIT income.
We may not recover 27 some or all of our investment in these loans. In addition, mezzanine loans may have higher loan-to-value ratios than conventional mortgage loans resulting in less equity in the property and increasing the risk of loss of principal.
We may not recover some or all of our investment in these loans. In addition, mezzanine loans may have higher loan-to-value ratios than conventional mortgage loans resulting in less equity in the property and increasing the risk of loss of principal.
In addition, unless we can purchase the fee simple interest in the underlying land and improvements or extend the terms of these ground leases before their expiration, we will lose our right to operate these properties and our interest in the improvements upon expiration of the ground 18 leases.
In addition, unless we can purchase the fee simple interest in the underlying land and improvements or extend the terms of these ground leases before their expiration, we will lose our right to operate these properties and our interest in the improvements upon expiration of the ground leases.
Our inability to accurately assess investment yields may result in our purchasing assets that do not perform as well as expected, which may adversely affect the price of our securities. Volatility of values of mortgaged properties may adversely affect our mortgage loans.
Our inability to accurately assess investment yields may result in our purchasing assets that do not perform as well as expected, which may adversely affect the price of our securities. 26 Volatility of values of mortgaged properties may adversely affect our mortgage loans.
A corporation of which a TRS directly or indirectly owns more than 35% of the voting power or value of the stock will automatically be treated as a TRS. Overall, no more than 20% of the value of a REIT’s assets may consist of stock or securities of one or more TRSs.
A corporation of which a TRS directly or indirectly owns more than 35% of the voting 31 power or value of the stock will automatically be treated as a TRS. Overall, no more than 20% of the value of a REIT’s assets may consist of stock or securities of one or more TRSs.
These risks are discussed more fully below and include, but are not limited to, risks related to: • general volatility of the capital markets and the market price of our common stock and preferred stock; • catastrophic events or geopolitical conditions, such as the conflict between Russia and Ukraine and the more recent Israel-Hamas war; • availability, terms, and deployment of capital; • unanticipated increases in financing and other costs, including changes in interest rates or inflation; • actual and potential conflicts of interest with Ashford Inc. and its subsidiaries (including Ashford LLC, Remington Hospitality and Premier), Braemar, Stirling Inc., our executive officers and our non-independent directors; • changes in personnel of Ashford LLC or the lack of availability of qualified personnel; • changes in governmental regulations, accounting rules, tax rates and similar matters; • legislative and regulatory changes, including changes to the Code, and related rules, regulations and interpretations governing the taxation of real estate investment trusts; • limitations imposed on our business and our ability to satisfy complex rules in order for us to qualify as a REIT for U.S. federal income tax purposes; and • future sales and issuances of our common stock or other securities might result in dilution and could cause the price of our common stock to decline.
These risks are discussed more fully below and include, but are not limited to, risks related to: • general volatility of the capital markets and the market price of our common stock and preferred stock; • catastrophic events or geopolitical conditions, such as the conflict between Russia and Ukraine, the Israel-Hamas war and changes to tariffs or trade policies; • availability, terms, and deployment of capital; • unanticipated increases in financing and other costs, including changes in interest rates or inflation; • actual and potential conflicts of interest with Ashford Inc. and its subsidiaries (including Ashford LLC, Remington Hospitality and Premier), Braemar, Stirling Inc., our executive officers and our non-independent directors; • changes in personnel of Ashford LLC or the lack of availability of qualified personnel; • changes in governmental regulations, accounting rules, tax rates and similar matters; • legislative and regulatory changes, including changes to the Code, and related rules, regulations and interpretations governing the taxation of real estate investment trusts; • limitations imposed on our business and our ability to satisfy complex rules in order for us to qualify as a REIT for U.S. federal income tax purposes; and • future sales and issuances of our common stock or other securities might result in dilution and could cause the price of our common stock to decline.
As a result of all of these factors, our failure to qualify as a REIT could impair our ability to raise capital, expand our business, and make distributions to our stockholders and could adversely affect the value of our securities.
As a result of all of these factors, 30 our failure to qualify as a REIT could impair our ability to raise capital, expand our business, and make distributions to our stockholders and could adversely affect the value of our securities.
Upon liquidation, holders of our debt securities or preferred units and lenders with respect to other borrowings will receive a distribution of our available assets prior to the holders of shares of preferred stock or common stock.
Upon liquidation, holders of our debt securities or preferred units and lenders with 37 respect to other borrowings will receive a distribution of our available assets prior to the holders of shares of preferred stock or common stock.
In addition, in periods of weak demand, as may occur during a general economic recession, profitability is negatively affected by the fixed costs of operating hotels. We also face competition from services such as home sharing companies and apartment operators offering short-term rentals. We did not pay dividends on our common stock in fiscal year 2023.
In addition, in periods of weak demand, as may occur during a general economic recession, profitability is negatively affected by the fixed costs of operating hotels. We also face competition from services such as home sharing companies and apartment operators offering short-term rentals. We did not pay dividends on our common stock in fiscal year 2024.
To the extent that we satisfy the distribution requirement, but distribute less than 100% 34 of our taxable income, we will be subject to federal corporate income tax on our undistributed taxable income.
To the extent that we satisfy the distribution requirement, but distribute less than 100% of our taxable income, we will be subject to federal corporate income tax on our undistributed taxable income.
We and our 35 stockholders could be adversely affected by any such change in the U.S. federal income tax laws, regulations or administrative interpretations.
We and our stockholders could be adversely affected by any such change in the U.S. federal income tax laws, regulations or administrative interpretations.
These actions can be taken without 36 obtaining stockholder approval. Our issuance of additional classes of common stock or preferred stock could substantially dilute the interests of the holders of our common stock.
These actions can be taken without obtaining stockholder approval. Our issuance of additional classes of common stock or preferred stock could substantially dilute the interests of the holders of our common stock.
However, given the authority and/or operational latitude provided to Remington Hospitality under the master hotel management agreement and to Premier under the master project management agreement, and Mr. Monty J.
However, given the authority 22 and/or operational latitude provided to Remington Hospitality under the master hotel management agreement and to Premier under the master project management agreement, and Mr. Monty J.
In addition, we may incur mortgage debt by obtaining loans secured by a portfolio of some or all of the hotels that we own or acquire. If necessary or advisable, we also may borrow funds to make distributions to our stockholders to maintain our qualification as a REIT for U.S. federal income tax purposes.
We may incur mortgage debt by obtaining loans secured by a portfolio of some or all of the hotels that we own or acquire. If necessary or advisable, we also may borrow funds to make distributions to our stockholders to maintain our qualification as a REIT for U.S. federal income tax purposes.
Covenants, “cash trap” provisions or other terms in our mortgage loans and our senior secured credit facility, as well as any future credit facility, could limit our flexibility and adversely affect our financial condition or our qualification as a REIT. Some of our loan agreements and our senior secured credit facility contain financial and other covenants.
Covenants, “cash trap” provisions or other terms in our mortgage loans, as well as any future credit facility, could limit our flexibility and adversely affect our financial condition or our qualification as a REIT. Some of our loan agreements contain financial and other covenants.
Economic conditions may be affected by numerous factors, including but not limited to, the pace of economic growth and/or recessionary concerns, inflation, increases in the levels of unemployment, energy prices, changes in currency exchange rates, uncertainty about government fiscal and tax policy, geopolitical events, the regulatory environment and the availability of credit and interest rates.
Economic conditions may be affected by numerous factors, including but not limited to, the pace of economic growth and/or recessionary concerns, inflation, increases in the levels of unemployment, energy prices, tariffs and trade barriers, changes in currency exchange rates, uncertainty about government fiscal and tax policy, geopolitical events, the regulatory environment and the availability of credit and interest rates.
We do not expect to pay dividends on our common stock for the foreseeable future. We did not pay dividends on our common stock in fiscal year 2023. We do not expect to pay dividends on our common stock for the foreseeable future. We do not anticipate paying any dividends on our outstanding common stock for any quarter during 2024.
We do not expect to pay dividends on our common stock for the foreseeable future. We did not pay dividends on our common stock in fiscal year 2024. We do not expect to pay dividends on our common stock for the foreseeable future. We do not anticipate paying any dividends on our outstanding common stock for any quarter during 2025.
However, if other banks and financial institutions enter receivership or become insolvent in the future in response to financial conditions affecting the banking system and financial markets, our ability to access our existing cash, cash equivalents and investments may be threatened and could have a material adverse effect on our business and financial condition.
If our financial institutions enter receivership or become insolvent in the future in response to financial conditions affecting the banking system and financial markets, our ability to access our existing cash, cash equivalents and investments may be threatened and could have a material adverse effect on our business and financial condition.
During 2023, approximately 12% of our total hotel revenue was generated from nine hotels located in the Washington D.C. area, one of several key U.S. markets considered vulnerable to terrorist attack. Our financial and operating performance may be adversely affected by potential terrorist attacks. Terrorist attacks in the future may cause our results to differ materially from anticipated results.
During 2024, approximately 15% of our total hotel revenue was generated from nine hotels located in the Washington D.C. area, one of several key U.S. markets considered vulnerable to terrorist attack. Our financial and operating performance may be adversely affected by potential terrorist attacks. Terrorist attacks in the future may cause our results to differ materially from anticipated results.
As of December 31, 2023, 26 of our hotels are in cash traps. There is refinancing risk associated with our debt. We finance our long-term growth and liquidity needs with debt financings having staggered maturities, and use variable-rate debt or a mix of fixed and variable-rate debt as appropriate based on favorable interest rates, principal amortization and other terms.
As of December 31, 2024, 12 of our hotels are in cash traps. There is refinancing risk associated with our debt. We finance our long-term growth and liquidity needs with debt financings having staggered maturities, and use variable-rate debt or a mix of fixed and variable-rate debt as appropriate based on favorable interest rates, principal amortization and other terms.
Moreover, interest rate hedging could fail to protect us or adversely affect us because, among other things: • available interest rate hedging may not correspond directly with the interest rate risk for which protections is sought; • the duration of the hedge may not match the duration of the related liability; • the party owing money in the hedging transaction may default on its obligation to pay; • the credit quality of the party owing money on the hedge may be downgraded to such an extent that it impairs our ability to sell or assign our side of the hedging transaction; and • the value of derivatives used for hedging may be adjusted from time to time in accordance with generally accepted accounting principles (“GAAP”) to reflect changes in fair value and such downward adjustments, or “market-to-market loss,” would reduce our stockholders’ equity.
Moreover, interest rate hedging could fail to protect us or adversely affect us because, among other things: • available interest rate hedging may not correspond directly with the interest rate risk for which protections is sought; • the duration of the hedge may not match the duration of the related liability; • the party owing money in the hedging transaction may default on its obligation to pay; • the credit quality of the party owing money on the hedge may be downgraded to such an extent that it impairs our ability to sell or assign our side of the hedging transaction; and • the value of derivatives used for hedging may be adjusted from time to time in accordance with generally accepted accounting principles (“GAAP”) to reflect changes in fair value and such downward adjustments, or “market-to-market loss,” would reduce our stockholders’ equity. 24 Hedging involves both risks and costs, including transaction costs, which may reduce our overall returns on our investments.
Future issuances of securities, including our common stock and preferred stock, could reduce existing investors’ relative voting power and percentage of ownership and may dilute our share value. Our charter authorizes the issuance of up to 400,000,000 shares of common stock and 50,000,000 shares of preferred stock.
Future issuances of securities, including our common stock and preferred stock, could reduce existing investors’ relative voting power and percentage of ownership and may dilute our share value. Our charter authorizes the issuance of up to 395,000,000 shares of common stock and 55,000,000 shares of preferred stock.
Changes in laws, regulations, or policies may adversely affect our business. The laws and regulations governing our business or the regulatory or enforcement environment at the federal level or in any of the states in which we operate may change at any time and may have an adverse effect on our business.
The laws and regulations governing our business or the regulatory or enforcement environment at the federal level or in any of the states in which we operate may change at any time and may have an adverse effect on our business.
As of December 31, 2023, Remington Hospitality managed 61 of our 90 hotel properties and three of the four Stirling OP hotel properties and provides other services. Mr. Monty J. Bennett is chairman and chief executive officer of Ashford Inc. and, together with his father Mr.
As of December 31, 2024, Remington Hospitality managed 50 of our 69 hotel properties and three of the four Stirling OP hotel properties and provides other services. Mr. Monty J. Bennett is chairman and chief executive officer of Ashford Inc. and, together with his father Mr.
As of December 31, 2023, the Company had a deficit in stockholders’ equity of approximately $345.9 million and had not generated current earnings from which a dividend is potentially payable since the year ended December 31, 2015.
As of December 31, 2024, the Company had a deficit in stockholders’ equity of approximately $419.2 million and had not generated current earnings from which a dividend is potentially payable since the year ended December 31, 2015.
Series D Convertible Preferred Stock, which, along with all unpaid accrued and accumulated dividends thereon, was convertible (at a conversion price of $117.50 per share) into an additional approximate 4,229,668 shares of Ashford Inc. common stock, which if converted as of December 31, 2023, would have increased the Bennetts’ ownership interest in Ashford Inc. to 65.0%.
Series D Convertible Preferred Stock, which, along with all unpaid accrued and accumulated dividends thereon, was convertible (at a conversion price of $117.50 per share) into an additional approximate 4,395,281 shares of Ashford Inc. common stock, which if converted as of December 31, 2024, would have increased the Bennetts’ ownership interest in Ashford Inc. to 84.9%.
Accordingly, there can be no assurance that: • the insurance coverage thresholds that we have obtained will fully protect us against insurable losses (i.e., losses may exceed coverage limits); • we will not incur large deductibles that will adversely affect our earnings; • we will not incur losses from risks that are not insurable or that are not economically insurable; or • current coverage thresholds will continue to be available at reasonable rates. 30 In the future, we may choose not to maintain terrorism or other insurance policies on any of our properties.
Accordingly, there can be no assurance that: • the insurance coverage thresholds that we have obtained will fully protect us against insurable losses (i.e., losses may exceed coverage limits); • we will not incur large deductibles that will adversely affect our earnings; • we will not incur losses from risks that are not insurable or that are not economically insurable; or • current coverage thresholds will continue to be available at reasonable rates.
Our advisor manages other entities and may direct attractive investment opportunities away from us. If we change our investment guidelines, our advisor is not restricted from advising clients with similar investment guidelines. Our executive officers also serve as key employees and as officers of our advisor and Braemar, and will continue to do so. Furthermore, Mr. Monty J.
If we change our investment guidelines, our advisor is not restricted from advising clients with similar investment guidelines. Our executive officers also serve as key employees and as officers of our advisor and Braemar, and will continue to do so. Furthermore, Mr. Monty J.
In addition, the total amount of costs and expenses that may be incurred with respect to liabilities associated with these hotels may exceed our expectations, and we may experience other unanticipated adverse effects, all of which may adversely affect our financial condition, results of operations, the market price of our common stock and our ability to make distributions to our stockholders. 20 Future terrorist attacks or changes in terror alert levels could materially and adversely affect us.
In addition, the total amount of costs and expenses that may be incurred with respect to liabilities associated with these hotels may exceed our expectations, and we may experience other unanticipated adverse effects, all of which may adversely affect our financial condition, results of operations, the market price of our common stock and our ability to make distributions to our stockholders.
The lodging industry historically has been highly cyclical in nature. Fluctuations in lodging demand and, therefore, hotel operating performance, are caused largely by general economic and local market conditions, which subsequently affect levels of business and leisure travel.
Fluctuations in lodging demand and, therefore, hotel operating performance, are caused largely by general economic and local market conditions, which subsequently affect levels of business and leisure travel.
Archie Bennett, Jr., as of December 31, 2023, holds a controlling interest in Ashford Inc. As of December 31, 2023, the Bennetts owned approximately 610,261 shares of Ashford Inc. common stock, which represented an approximate 19.0% ownership interest in Ashford Inc., and owned 18,758,600 shares of Ashford Inc.
Archie Bennett, Jr., as of December 31, 2024, holds a controlling interest in Ashford Inc. As of December 31, 2024, the Bennetts owned approximately 809,937 shares of Ashford Inc. common stock, which represented an approximate 46.6% ownership interest in Ashford Inc., and owned 18,758,600 shares of Ashford Inc.
Despite these steps, there can be no assurance that we will not suffer a significant data security incident in the future, that unauthorized parties will not gain access to sensitive data stored on our systems or that any such incident will be discovered in a timely manner. 14 In addition, the use of social media could cause us to suffer brand damage or information leakage.
Despite these steps, there can be no assurance that we will not suffer a significant data security incident in the future, that unauthorized parties will not gain access to sensitive data stored on our systems or that any such incident will be discovered in a timely manner.
If the decline in real estate asset values and/or income occurs quickly, this may be especially difficult to accomplish. This difficulty may be exacerbated by the illiquid nature of any non-qualifying assets that we may own. We may have to make investment decisions that we otherwise would not make absent the REIT and Investment Company Act considerations.
If the decline in real estate asset values and/or income occurs quickly, this may be especially difficult to accomplish. This difficulty may be exacerbated by the illiquid nature of any non-qualifying assets that we may own.
Negative posts or comments about us, our hotel managers or our hotels on any social networking website could damage our or our hotels’ reputations. In addition, employees or others might disclose non-public sensitive information relating to our business through external media channels. The continuing evolution of social media will present us with new challenges and risks.
In addition, the use of social media could cause us to suffer brand damage or information leakage. Negative posts or comments about us, our hotel managers or our hotels on any social networking website could damage our or our hotels’ reputations. In addition, employees or others might disclose non-public sensitive information relating to our business through external media channels.
Our fiduciary duties as the general partner of our operating partnership could create conflicts of interest, which may impede business decisions that could benefit our stockholders. We, as the general partner of our operating partnership, have fiduciary duties to the other limited partners in our operating partnership, the discharge of which may conflict with the interests of our stockholders.
We, as the general partner of our operating partnership, have fiduciary duties to the other limited partners in our operating partnership, the discharge of which may conflict with the interests of our stockholders.
The Dodd-Frank Act and the rules adopted thereunder could significantly increase the cost of derivative contracts (including from swap recordkeeping and reporting requirements and through requirements to post margin with respect to our swaps, which could adversely affect our available liquidity), materially alter the terms of derivative contracts, reduce the availability of derivatives to protect against risks we encounter, reduce our ability to monetize or restructure our existing derivative contracts, and increase our exposure to less creditworthy counterparties.
As a result, it is not possible at this time to predict with certainty the full effects of the Dodd-Frank Act, the CFTC’s rules and the SEC’s rules on us and the timing of such effects. 25 The Dodd-Frank Act and the rules adopted thereunder could significantly increase the cost of derivative contracts (including from swap recordkeeping and reporting requirements and through requirements to post margin with respect to our swaps, which could adversely affect our available liquidity), materially alter the terms of derivative contracts, reduce the availability of derivatives to protect against risks we encounter, reduce our ability to monetize or restructure our existing derivative contracts, and increase our exposure to less creditworthy counterparties.
The termination fee makes it more difficult for us to terminate our advisory agreement. These provisions significantly increase the cost to us of terminating our advisory agreement, thereby limiting our ability to terminate our advisor without cause.
The termination fee makes it more difficult for us to terminate our advisory agreement. These provisions significantly increase the cost to us of terminating our advisory agreement, thereby limiting our ability to terminate our advisor without cause. Our advisor manages other entities and may direct attractive investment opportunities away from us.
For example, we are unable to modify the rights of limited partners to receive distributions as set forth in the operating partnership agreement in a manner that adversely affects their rights without their consent, even though such modification might be in the best interest of our stockholders. 24 In addition, conflicts may arise when the interests of our stockholders and the limited partners of our operating partnership diverge, particularly in circumstances in which there may be an adverse tax consequence to the limited partners.
For example, we are unable to modify the rights of limited partners to receive distributions as set forth in the operating partnership agreement in a manner that adversely affects their rights without their consent, even though such modification might be in the best interest of our stockholders.
As of December 31, 2023, our outstanding indebtedness consists of our $183.1 million senior secured credit facility and approximately $3.2 billion in property-level debt, including approximately $3.1 billion of variable interest rate debt. Higher interest rates in the past few years have negatively impacted nearly all commercial real estate managers, including the Company.
As of December 31, 2024, our outstanding indebtedness consisted of approximately $2.7 billion in property-level debt, including approximately $2.5 billion of variable interest rate debt. Higher interest rates in the past few years have negatively impacted nearly all commercial real estate managers, including the Company.
In addition, the disruption of the existing travel plans of a significant number of travelers upon the occurrence of certain events, such as severe weather conditions, actual or threatened terrorist activity, war or travel-related health events, could result in significant additional costs and decrease our revenues, in each case, leading to constrained liquidity.
In addition, the disruption of the existing travel plans of a significant number of travelers upon the occurrence of certain events, such as severe weather conditions, actual or threatened terrorist activity, war or travel-related health events, could result in significant additional costs and decrease our revenues, in each case, leading to constrained liquidity. 17 Some of our hotels are subject to ground leases; if we are found to be in breach of a ground lease or are unable to renew a ground lease, our business could be materially and adversely affected.
As a result, we may have to reduce distributions or enter into short-term borrowings in certain quarters in order to make distributions to our stockholders, and we can provide no assurances that such borrowings will be available on favorable terms, if at all. 19 The cyclical nature of the lodging industry may cause fluctuations in our operating performance, which could have a material adverse effect on us.
As a result, we may have to reduce distributions or enter into short-term borrowings in certain quarters in order to make distributions to our stockholders, and we can provide no assurances that such borrowings will be available on favorable terms, if at all.
Hedging involves both risks and costs, including transaction costs, which may reduce our overall returns on our investments. These costs increase as the period covered by the hedging relationship increases and during periods of rising and volatile interest rates. These costs will also limit the amount of cash available for distributions to stockholders.
These costs increase as the period covered by the hedging relationship increases and during periods of rising and volatile interest rates. These costs will also limit the amount of cash available for distributions to stockholders.
Economic conditions in the United States could have a material adverse impact on our earnings and financial condition. Our business could be adversely affected by unstable economic and political conditions within the United States and foreign jurisdictions and geopolitical conflicts, such as the conflict between Russia and Ukraine and the more recent Israel- 9 Hamas war.
Our business could be adversely affected by unstable economic and political conditions within the United States and foreign jurisdictions and geopolitical conflicts, such as the conflict between Russia and Ukraine and the Israel-Hamas war. 9 Because economic conditions in the United States may affect demand within the hospitality industry, current and future economic conditions in the United States, including slower growth, stock market volatility and recession fears, could have a material adverse impact on our earnings and financial condition.
RISKS RELATED TO OUR CORPORATE STRUCTURE Our charter, the partnership agreement of our operating partnership and Maryland law contain provisions that may delay or prevent a change of control transaction. Our charter contains 9.8% ownership limits.
We may have to make investment decisions that we otherwise would not make absent the REIT and Investment Company Act considerations. 35 RISKS RELATED TO OUR CORPORATE STRUCTURE Our charter, the partnership agreement of our operating partnership and Maryland law contain provisions that may delay or prevent a change of control transaction. Our charter contains 9.8% ownership limits.
During the quarter ended September 30, 2023, we had a cyber incident that resulted in the potential exposure of certain employee personal information. We have completed an investigation and have identified certain employee information that may have been exposed, but we have not identified that any customer information was exposed. All systems have been restored.
During the quarter ended September 30, 2023, we had a cyber incident that resulted in the potential exposure of certain personal information. We have completed an investigation and have identified certain information that may have been exposed and notified potentially impacted individuals pursuant to applicable state guidelines. All systems have been restored.
Previous terrorist attacks and subsequent terrorist alerts have adversely affected the U.S. travel and hospitality industries since 2001, often disproportionately to the effect on the overall economy.
Future terrorist attacks or changes in terror alert levels could materially and adversely affect us. Previous terrorist attacks and subsequent terrorist alerts have adversely affected the U.S. travel and hospitality industries since 2001, often disproportionately to the effect on the overall economy.
The use of debt to finance future acquisitions could restrict operations, inhibit our ability to grow our business and revenues, and negatively affect our business and financial results. We intend to incur additional debt in connection with future hotel acquisitions. We may, in some instances, borrow under our senior secured credit facility or borrow new funds to acquire hotels.
The use of debt to finance future acquisitions could restrict operations, inhibit our ability to grow our business and revenues, and negatively affect our business and financial results. We intend to incur additional debt in connection with future hotel acquisitions.
These conditions could adversely affect our financial position, results of operations, and cash flows or the market price of our stock. Higher interest rates have increased our debt payments and such debt payments may remain high.
It may be difficult to refinance or extend the maturity of such loans on terms acceptable to us, or at all. These conditions could adversely affect our financial position, results of operations, and cash flows or the market price of our stock. 15 Higher interest rates have increased our debt payments and such debt payments may remain high.
Accordingly, we only own a long-term leasehold rather than a fee simple interest, with respect to all or a portion of the real property at these hotels.
Some of our hotels are on land subject to ground leases, at least three of which cover the entire property. Accordingly, we only own a long-term leasehold rather than a fee simple interest, with respect to all or a portion of the real property at these hotels.
Sales of substantial amounts of common stock, or the perception that these sales could occur, may adversely affect prevailing market prices for our securities. 38 We also may issue from time to time additional shares of our securities or units of our operating partnership in connection with the acquisition of properties and we may grant additional demand or piggyback registration rights in connection with these issuances.
We also may issue from time to time additional shares of our securities or units of our operating partnership in connection with the acquisition of properties and we may grant additional demand or piggyback registration rights in connection with these issuances.
Accordingly, we may issue up to an additional 360,374,789 shares of common stock and 39,620,735 shares of preferred stock. Future issuances of common stock or preferred stock could decrease the relative voting power of our common stock or preferred stock and may cause substantial dilution in the ownership percentage of our then-existing holders of common or preferred stock.
Future issuances of common stock or preferred stock could decrease the relative voting power of our common stock or preferred stock and may cause substantial dilution in the ownership percentage of our then-existing holders of common or preferred stock.
If we were to reject such an investment opportunity, either Braemar or Remington Hospitality could pursue the opportunity and compete with us. In such a case, Mr. Monty J. Bennett, our chairman, in his capacity as chairman of Braemar or chief executive officer of Ashford Inc. could be in a position of directly competing with us.
If we were to reject such an investment opportunity, either Braemar or Remington Hospitality could pursue the opportunity and compete with us. In such a case, Mr. Monty J.
Also, the failure of our operating partnership to qualify as a partnership would cause it to become subject to federal and state corporate income tax, which would reduce significantly the amount of cash available for debt service and for distribution to its partners, including us. 33 Note that although partnerships have traditionally not been subject to U.S. federal income tax at the entity level as described above, new audit rules, will generally apply to the partnership.
Also, the failure of our operating partnership to qualify as a partnership would cause it to become subject to federal and state corporate income tax, which would reduce significantly the amount of cash available for debt service and for distribution to its partners, including us.
Such changes may put us at a competitive disadvantage compared to some of our major competitors, to the extent we are unable to pass the tax costs through to our customers. 29 On August 16, 2022, the Inflation Reduction Act of 2022 (“IRA”) was signed into law, with tax provisions primarily focused on implementing a 15% corporate alternative minimum tax on global adjusted financial statement income and a 1% excise tax on share repurchases.
On August 16, 2022, the Inflation Reduction Act of 2022 (“IRA”) was signed into law, with tax provisions primarily focused on implementing a 15% corporate alternative minimum tax on global adjusted financial statement income and a 1% excise tax on share repurchases.
We believe that we have complied with the insurance maintenance requirements under the current governing loan documents and we intend to comply with any such requirements in any future loan documents. However, a lender may disagree, in which case the lender could obtain additional coverage thresholds and seek payment from us, or declare us in default under the loan documents.
However, a lender may disagree, in which case the lender could obtain additional coverage thresholds and seek payment from us, or declare us in default under the loan documents.
Our board of directors may designate the rights, terms and preferences of our authorized but unissued common shares or preferred shares at its discretion, including conversion and voting preferences without stockholder approval.
Our board of directors may designate the rights, terms and preferences of our authorized but unissued common shares or preferred shares at its discretion, including conversion and voting preferences without stockholder approval. SEC regulations limit the funds we can raise during 12 months under a shelf registration statement on Form S-3.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

9 edited+3 added−0 removed1 unchanged
Biggest changeThe information security program is overseen by the Chief Financial Officer, Vice President of IT, and the Information Security Manager.
Biggest changeManagement, provided by Ashford Inc., is ultimately responsible for assessing and managing the Company’s cybersecurity risk. The information security program is overseen by the Chief Financial Officer of Ashford Inc. and the Chief Technology Officer for Remington Hospitality.
The IT Security Department carries out risk management primarily by outsourcing risks to those companies and agencies that specialize in handling such risks and that have the appropriate resources to do so.
Remington Hospitality’s IT Security Department carries out risk management primarily by outsourcing risks to those companies and agencies that specialize in handling such risks and that have the appropriate resources to do so.
These processes cover areas such as, but not limited to, risk management, access control, anti-virus management, sensitive data management, electronic communication, risk/security reporting, incident response planning and business continuation planning.
These processes cover areas such as, but not limited to, risk management, access control, anti-virus management, electronic communication, risk/security reporting, incident response planning and business continuity planning.
Additionally, the IT Department assesses and improves the Company’s cybersecurity risk management processes on an annual basis by: (i) engaging its cyber insurance broker, AON, plc, to complete a benchmarking evaluation to compare the Company’s cybersecurity posture against peers and (ii) engaging cyber risk readiness and response company, Netdiligence®, to conduct vulnerability and penetration testing, which produces a report that specifies any possible risk area and devices.
Additionally, Remington Hospitality’s IT Department assesses and improves the Company’s cybersecurity risk management processes on an annual basis by: (i) engaging consultants to complete a benchmarking evaluation to compare its cybersecurity posture against peers; and (ii) engaging a cybersecurity risk readiness and response company to conduct vulnerability and penetration testing, which produces a report that specifies any possible risk area and devices.
As of the date of this report, we are not aware of any material risks from cybersecurity threats that have materially affected or are reasonably likely to materially affect the Company, including our business strategy, results of operations, or financial conditions, except as otherwise noted. Governance. Management is ultimately responsible for assessing and managing the Company’s cybersecurity risk.
As of the date of this report, we are not aware of any material risks from cybersecurity threats that have materially affected or are reasonably likely to materially affect the Company, including our business strategy, results of operations, or financial conditions, except as otherwise noted. Governance.
The Information Security Manager provides a weekly report to the Vice President of IT, which contains an overview of the activity in the department, any United States Computer Emergency Readiness Team alerts processed and all findings from the preventative maintenance tools. The Vice President of IT provides such report to the Chief Financial Officer on a quarterly basis.
The Chief Technology Officer of Remington Hospitality reviews weekly reports that contain an overview of the activity in the department, any United States Computer Emergency Readiness Team alerts processed and all findings from the preventative maintenance tools. The Chief Technology Officer provides such report to the Chief Financial Officer on a quarterly basis.
Item 1C. Cybersecurity Risk Management and Strategy. The Company’s information security program consists of various processes designed to ensure that the Company and its electronic assets are shielded from cyber events that may compromise the Company’s ability to successfully execute its business on a day-to-day basis.
Their programs consist of various processes designed to ensure that the Company and its electronic assets are shielded from cyber events that may compromise the Company’s ability to successfully execute its business on a day-to-day basis.
The Audit Committee of the Board is then briefed each quarter on the occurrence of any cybersecurity incidents. The Board will also be provided an overview of the information security program on an annual basis, including updates on the IT team, IT training, implementation of IT controls, cybersecurity testing, the incident response process and the cybersecurity assets of the Company.
The board of directors will also be provided an overview of the information security program on an annual basis, including updates on Remington Hospitality’s IT team, IT training, implementation, IT controls, cybersecurity testing, the incident response process and the cybersecurity assets of the Company. 40
The information technology department (“IT Department”), which includes the cybersecurity department (“IT Security Department”), is responsible for implementing such processes and coordinating with the Human Resources Department to align training and onboarding efforts with such processes.
The information technology department of Remington Hospitality (“IT Department”), which includes a cybersecurity department (“IT Security Department”), is responsible for implementing processes and coordinating with the Human Resources Department to align training and onboarding efforts of Ashford Inc. and Remington Hospitality employees handling the Company’s electronic assets.
Added
Item 1C. Cybersecurity Risk Management and Strategy. The Company relies on Ashford Inc. and the Company’s managers to protect the electronic assets of the Company.
Added
A Cyber Incident Response Team comprised of Ashford Inc. and Remington Hospitality employees meets bi-weekly to review incidents that have occurred and/or impacted the Company’s electronic assets.
Added
The Audit Committee of the board of directors is then briefed each quarter on the occurrence of any cybersecurity incidents.

Item 2. Properties

Properties — owned and leased real estate

7 edited+1 added−2 removed1 unchanged
Biggest changeWorth, TX Full service 294 100 294 67.20 % $ 182.03 $ 122.33 Hampton Inn (7) Buford, GA Select service 92 100 92 86.46 % $ 152.79 $ 132.10 Hampton Inn Lawrenceville, GA Select service 85 100 85 79.70 % $ 120.19 $ 95.78 Hampton Inn Evansville, IN Select service 140 100 140 55.10 % $ 125.96 $ 69.41 Hampton Inn Parsippany, NJ Select service 152 100 152 65.80 % $ 139.06 $ 91.49 Marriott Beverly Hills, CA Full service 260 100 260 86.70 % $ 267.52 $ 231.92 Marriott Arlington, VA Full service 703 100 703 75.30 % $ 208.99 $ 157.40 Marriott Dallas, TX Full service 265 100 265 73.80 % $ 145.33 $ 107.25 Marriott Fremont, CA Full service 357 100 357 67.90 % $ 156.62 $ 106.29 Marriott Memphis, TN Full service 232 100 232 74.40 % $ 165.76 $ 123.28 Marriott Irving, TX Full service 499 100 499 77.50 % $ 162.11 $ 125.59 Marriott Omaha, NE Full service 300 100 300 56.40 % $ 142.15 $ 80.21 Marriott Sugarland, TX Full service 300 100 300 81.90 % $ 153.70 $ 125.84 SpringHill Suites by Marriott Baltimore, MD Select service 133 100 133 73.00 % $ 108.03 $ 78.91 SpringHill Suites by Marriott Kennesaw, GA Select service 90 100 90 71.50 % $ 135.96 $ 97.27 SpringHill Suites by Marriott Manhattan Beach, CA Select service 164 100 164 76.60 % $ 142.07 $ 108.84 SpringHill Suites by Marriott Plymouth Meeting, PA Select service 199 100 199 47.20 % $ 116.10 $ 54.83 SpringHill Suites by Marriott (7) Buford, GA Select service 97 100 97 70.19 % $ 137.67 $ 96.56 Fairfield Inn by Marriott Kennesaw, GA Select service 86 100 86 65.10 % $ 124.67 $ 81.10 Courtyard by Marriott Bloomington, IN Select service 117 100 117 69.60 % $ 146.49 $ 102.01 Courtyard by Marriott - Tremont Boston, MA Select service 315 100 315 76.80 % $ 273.59 $ 210.02 Courtyard by Marriott Columbus, IN Select service 90 100 90 39.70 % $ 104.60 $ 41.56 Courtyard by Marriott Denver, CO Select service 202 100 202 88.00 % $ 155.43 $ 136.71 Courtyard by Marriott Manchester, CT Select service 90 100 90 76.10 % $ 147.34 $ 112.16 Courtyard by Marriott Gaithersburg, MD Select service 210 100 210 69.00 % $ 168.43 $ 116.19 Courtyard by Marriott Crystal City, VA Select service 272 100 272 78.70 % $ 176.75 $ 139.19 Courtyard by Marriott Overland Park, KS Select service 168 100 168 56.80 % $ 134.03 $ 76.17 Courtyard by Marriott Foothill Ranch, CA Select service 156 100 156 76.80 % $ 151.48 $ 116.41 Courtyard by Marriott Alpharetta, GA Select service 154 100 154 62.10 % $ 125.41 $ 77.92 Courtyard by Marriott Oakland, CA Select service 156 100 156 74.40 % $ 135.58 $ 100.81 Courtyard by Marriott Scottsdale, AZ Select service 180 100 180 72.30 % $ 183.17 $ 132.40 Courtyard by Marriott Plano, TX Select service 153 100 153 51.60 % $ 146.29 $ 75.43 Courtyard by Marriott Newark, CA Select service 181 100 181 71.70 % $ 125.72 $ 90.17 Courtyard by Marriott Basking Ridge, NJ Select service 235 100 235 51.80 % $ 160.00 $ 82.83 Marriott Residence Inn Evansville, IN Select service 78 100 78 80.20 % $ 111.23 $ 89.18 Marriott Residence Inn Orlando, FL Select service 350 100 350 75.30 % $ 143.89 $ 108.29 Marriott Residence Inn Falls Church, VA Select service 159 100 159 81.40 % $ 161.83 $ 131.65 Marriott Residence Inn San Diego, CA Select service 150 100 150 82.60 % $ 197.08 $ 162.84 Marriott Residence Inn Salt Lake City, UT Select service 144 100 144 54.70 % $ 149.29 $ 81.61 Marriott Residence Inn Las Vegas, NV Select service 256 100 256 80.40 % $ 175.13 $ 140.87 Marriott Residence Inn Phoenix, AZ Select service 200 100 200 67.70 % $ 138.05 $ 93.52 Marriott Residence Inn Plano, TX Select service 126 100 126 58.70 % $ 104.10 $ 61.06 Marriott Residence Inn Newark, CA Select service 168 100 168 79.50 % $ 140.55 $ 111.73 Marriott Residence Inn (7) Jacksonville, FL Select service 120 100 120 71.66 % $ 138.54 $ 99.27 Marriott Residence Inn (7) Manchester, CT Select service 96 100 96 79.84 % $ 155.64 $ 124.26 TownePlace Suites by Marriott Manhattan Beach, CA Select service 143 100 143 78.00 % $ 150.42 $ 117.26 One Ocean Atlantic Beach, FL Full service 193 100 193 67.30 % $ 266.40 $ 179.30 Sheraton Hotel Minneapolis, MN Full service 220 100 220 53.20 % $ 135.30 $ 72.03 Sheraton Hotel Indianapolis, IN Full service 378 100 378 56.40 % $ 163.30 $ 92.05 42 Hotel Property Location Service Type Total Rooms % Owned Owned Rooms Year Ended December 31, 2023 Occupancy ADR RevPAR Sheraton Hotel Anchorage, AK Full service 370 100 370 70.20 % $ 188.57 $ 132.32 Sheraton Hotel San Diego, CA Full service 260 100 260 83.30 % $ 159.38 $ 132.71 Hyatt Regency Coral Gables, FL Full service 254 100 254 73.20 % $ 242.70 $ 177.64 Hyatt Regency Hauppauge, NY Full service 358 100 358 60.60 % $ 163.48 $ 99.03 Hyatt Regency Savannah, GA Full service 351 100 351 91.40 % $ 225.61 $ 206.11 Renaissance Nashville, TN Full service 674 100 674 83.10 % $ 277.31 $ 230.33 Annapolis Historic Inn Annapolis, MD Full service 124 100 124 64.40 % $ 190.95 $ 122.92 Lakeway Resort & Spa Austin, TX Full service 168 100 168 54.30 % $ 246.52 $ 133.90 Silversmith Chicago, IL Full service 144 100 144 58.70 % $ 194.88 $ 114.45 The Churchill Washington, D.C.
Biggest changeWorth, TX Full-service 294 100 294 65.30 % $ 187.25 $ 122.19 Hampton Inn (7) Buford, GA Select-service 92 100 92 79.26 % $ 144.44 $ 114.48 Hampton Inn Evansville, IN Select-service 140 100 140 59.50 % $ 126.55 $ 75.24 Hampton Inn Parsippany, NJ Select-service 152 100 152 66.40 % $ 137.29 $ 91.09 Marriott Beverly Hills, CA Full-service 260 100 260 91.90 % $ 261.45 $ 240.33 Marriott Arlington, VA Full-service 703 100 703 75.00 % $ 222.67 $ 166.93 Marriott Dallas, TX Full-service 265 100 265 65.20 % $ 158.83 $ 103.58 Marriott Fremont, CA Full-service 357 100 357 68.30 % $ 162.73 $ 111.22 Marriott Memphis, TN Full-service 232 100 232 71.20 % $ 161.68 $ 115.12 Marriott Irving, TX Full-service 499 100 499 72.60 % $ 173.98 $ 126.37 Marriott Omaha, NE Full-service 300 100 300 60.10 % $ 140.25 $ 84.26 Marriott Sugarland, TX Full-service 303 100 303 72.20 % $ 161.79 $ 116.78 SpringHill Suites by Marriott (7) Buford, GA Select-service 97 100 97 76.34 % $ 137.23 $ 104.77 Courtyard by Marriott Bloomington, IN Select-service 117 100 117 60.20 % $ 163.00 $ 98.09 Courtyard by Marriott - Tremont Boston, MA Select-service 315 100 315 77.80 % $ 286.76 $ 223.10 Courtyard by Marriott Denver, CO Select-service 202 100 202 86.00 % $ 150.61 $ 129.59 Courtyard by Marriott Gaithersburg, MD Select-service 210 100 210 67.30 % $ 174.59 $ 117.56 Courtyard by Marriott Crystal City, VA Select-service 272 100 272 80.50 % $ 178.68 $ 143.84 Courtyard by Marriott Overland Park, KS Select-service 168 100 168 55.50 % $ 136.37 $ 75.68 Courtyard by Marriott Foothill Ranch, CA Select-service 156 100 156 75.30 % $ 146.28 $ 110.19 Courtyard by Marriott Alpharetta, GA Select-service 154 100 154 58.90 % $ 115.91 $ 68.22 Marriott Residence Inn Evansville, IN Select-service 78 100 78 67.90 % $ 110.17 $ 74.78 Marriott Residence Inn Orlando, FL Select-service 350 100 350 74.20 % $ 147.08 $ 109.15 41 Hotel Property Location Service Type Total Rooms % Owned Owned Rooms Year Ended December 31, 2024 Occupancy ADR RevPAR Marriott Residence Inn Falls Church, VA Select-service 159 100 159 79.90 % $ 175.30 $ 140.11 Marriott Residence Inn San Diego, CA Select-service 150 100 150 85.50 % $ 192.47 $ 164.47 Marriott Residence Inn (7) Jacksonville, FL Select-service 120 100 120 74.62 % $ 137.09 $ 102.29 Marriott Residence Inn (7) Manchester, CT Select-service 96 100 96 73.79 % $ 155.88 $ 115.03 Sheraton Hotel Minneapolis, MN Full-service 220 100 220 45.70 % $ 144.30 $ 66.02 Sheraton Hotel Indianapolis, IN Full-service 378 100 378 58.60 % $ 186.02 $ 109.07 Sheraton Hotel Anchorage, AK Full-service 370 100 370 73.40 % $ 203.23 $ 149.22 Sheraton Hotel San Diego, CA Full-service 260 100 260 90.40 % $ 166.37 $ 150.34 Hyatt Regency Coral Gables, FL Full-service 254 100 254 76.50 % $ 243.09 $ 185.86 Hyatt Regency Hauppauge, NY Full-service 358 100 358 58.10 % $ 167.18 $ 97.10 Hyatt Regency Savannah, GA Full-service 351 100 351 89.30 % $ 221.68 $ 197.89 Renaissance Nashville, TN Full-service 674 100 674 78.20 % $ 286.17 $ 223.78 Annapolis Historic Inn Annapolis, MD Full-service 124 100 124 62.10 % $ 195.64 $ 121.41 Lakeway Resort & Spa Austin, TX Full-service 168 100 168 50.40 % $ 220.03 $ 110.88 Silversmith Chicago, IL Full-service 144 100 144 66.00 % $ 204.19 $ 134.85 The Churchill Washington, D.C.
(5) The lease expires in 2054 and includes the lease of the land, hotel and conference center (including the building, improvements, furniture, fixtures and equipment). (6) The lease expires in 2120 and includes the lease of the land and building. The property is under development. (7) Property owned by Stirling OP, but consolidated by the Company.
(5) The lease expires in 2054 and includes the lease of the land, hotel and conference center (including the building, improvements, furniture, fixtures and equipment). (6) The lease expires in 2120 and includes the lease of the land and building. (7) Hotel property owned by Stirling OP, but consolidated by the Company. 42
Item 2. Properties OFFICES. We lease our headquarters located at 14185 Dallas Parkway, Suite 1200, Dallas, Texas 75254. HOTEL PROPERTIES. As of December 31, 2023, our portfolio consisted of 90 hotel properties, four Stirling OP hotel properties and one hotel property under development that were included in our consolidated operations.
Item 2. Properties OFFICES. We lease our headquarters located at 14185 Dallas Parkway, Suite 1200, Dallas, Texas 75254. HOTEL PROPERTIES. As of December 31, 2024, our portfolio consisted of 68 operating hotel properties, one consolidated operating hotel property through a 29.3% owned investment in a consolidated entity and four Stirling OP hotel properties that were included in our consolidated operations.
The agreement with Marriott calls for the hotel to be converted to a Tribute Portfolio property by December 31, 2024. (2) The ground lease expires in 2084. (3) The Company entered into a franchise agreement with Marriott to convert the La Concha Key West Hotel in Key West, Florida to an Autograph Collection property.
The conversion was completed in November 2024. (2) The ground lease expires in 2084. (3) The Company entered into a franchise agreement with Marriott to convert the La Concha Key West Hotel in Key West, Florida to an Autograph Collection property. The conversion was completed in December 2024. (4) The ground lease expires in 2083.
The following table presents certain information related to our hotel properties: Hotel Property Location Service Type Total Rooms % Owned Owned Rooms Year Ended December 31, 2023 Occupancy ADR RevPAR Fee Simple Properties Embassy Suites Austin, TX Full service 150 100 150 72.60 % $ 162.03 $ 117.66 Embassy Suites Dallas, TX Full service 150 100 150 66.30 % $ 137.94 $ 91.49 Embassy Suites Herndon, VA Full service 150 100 150 73.90 % $ 171.17 $ 126.45 Embassy Suites Las Vegas, NV Full service 220 100 220 83.90 % $ 169.31 $ 142.05 Embassy Suites Houston, TX Full service 150 100 150 68.10 % $ 152.16 $ 103.60 Embassy Suites West Palm Beach, FL Full service 160 100 160 76.90 % $ 188.13 $ 144.69 Embassy Suites Philadelphia, PA Full service 263 100 263 73.90 % $ 163.71 $ 120.93 Embassy Suites Arlington, VA Full service 269 100 269 77.80 % $ 216.80 $ 168.74 Embassy Suites Portland, OR Full service 276 100 276 56.90 % $ 166.44 $ 94.71 Embassy Suites Santa Clara, CA Full service 258 100 258 59.80 % $ 227.67 $ 136.21 Embassy Suites Orlando, FL Full service 174 100 174 86.90 % $ 169.13 $ 146.97 Hilton Garden Inn Jacksonville, FL Select service 119 100 119 73.70 % $ 139.91 $ 103.15 Hilton Garden Inn Austin, TX Select service 254 100 254 59.80 % $ 214.69 $ 128.39 Hilton Garden Inn Baltimore, MD Select service 158 100 158 73.60 % $ 124.66 $ 91.70 Hilton Garden Inn Virginia Beach, VA Select service 176 100 176 75.70 % $ 163.04 $ 123.49 Hilton Houston, TX Full service 242 100 242 64.80 % $ 133.34 $ 86.39 Hilton St.
The following table presents certain information related to our hotel properties: Hotel Property Location Service Type Total Rooms % Owned Owned Rooms Year Ended December 31, 2024 Occupancy ADR RevPAR Fee Simple Properties Embassy Suites Austin, TX Full-service 150 100 150 67.40 % $ 158.64 $ 106.95 Embassy Suites Dallas, TX Full-service 150 100 150 59.00 % $ 139.55 $ 82.27 Embassy Suites Herndon, VA Full-service 150 100 150 79.60 % $ 165.35 $ 131.58 Embassy Suites Las Vegas, NV Full-service 220 100 220 86.80 % $ 176.29 $ 152.94 Embassy Suites Houston, TX Full-service 150 100 150 71.60 % $ 150.53 $ 107.74 Embassy Suites West Palm Beach, FL Full-service 160 100 160 73.30 % $ 192.42 $ 141.06 Embassy Suites Philadelphia, PA Full-service 263 100 263 68.30 % $ 168.79 $ 115.28 Embassy Suites Arlington, VA Full-service 269 100 269 79.50 % $ 225.50 $ 179.32 Embassy Suites Portland, OR Full-service 276 100 276 59.30 % $ 166.51 $ 98.66 Embassy Suites Santa Clara, CA Full-service 258 100 258 65.10 % $ 243.82 $ 158.63 Embassy Suites Orlando, FL Full-service 174 100 174 88.90 % $ 167.14 $ 148.55 Hilton Garden Inn Jacksonville, FL Select-service 119 100 119 64.80 % $ 136.15 $ 88.25 Hilton Garden Inn Austin, TX Select-service 254 100 254 58.60 % $ 207.13 $ 121.32 Hilton Garden Inn Baltimore, MD Select-service 158 100 158 74.70 % $ 127.25 $ 95.08 Hilton Garden Inn Virginia Beach, VA Select-service 176 100 176 71.40 % $ 162.46 $ 116.05 Hilton Houston, TX Full-service 242 100 242 68.60 % $ 138.08 $ 94.74 Hilton St.
Worth, TX Full service 39 100 39 61.10 % $ 182.91 $ 111.84 Westin Princeton, NJ Full service 296 100 296 69.20 % $ 181.29 $ 125.46 Hotel Indigo Atlanta, GA Full service 141 100 141 59.10 % $ 164.20 $ 96.99 Ritz-Carlton Atlanta, GA Full service 444 100 444 66.20 % $ 293.99 $ 194.61 La Posada de Santa Fe Santa Fe, NM Full service 157 100 157 77.90 % $ 284.32 $ 221.44 Leasehold Properties La Concha Key West (2) (3) Key West, FL Full service 160 100 160 67.70 % $ 352.12 $ 238.26 Renaissance (4) Palm Springs, CA Full service 410 100 410 70.40 % $ 196.15 $ 138.13 Hilton (5) Marietta, GA Full service 200 100 200 66.60 % $ 172.19 $ 114.72 Le Meridien (6) Fort Worth, TX Full service 188 33 61 N/A N/A N/A Total 21,142 21,015 70.71 % $ 184.53 $ 130.48 ________ (1) The Company entered into a new franchise agreement with Marriott to convert the Le Pavillon in New Orleans, Louisiana to a Tribute Portfolio property.
Full-service 240 100 240 68.00 % $ 206.30 $ 140.31 Le Pavillon (1) New Orleans, LA Full-service 226 100 226 49.90 % $ 168.41 $ 84.08 Westin Princeton, NJ Full-service 296 100 296 69.50 % $ 186.28 $ 129.40 Hotel Indigo Atlanta, GA Full-service 141 100 141 54.40 % $ 157.87 $ 85.95 Ritz-Carlton Atlanta, GA Full-service 444 100 444 63.80 % $ 298.87 $ 190.82 La Posada de Santa Fe Santa Fe, NM Full-service 157 100 157 76.40 % $ 286.90 $ 219.14 Leasehold Properties Autograph La Concha (2) (3) Key West, FL Full-service 160 100 160 63.70 % $ 347.15 $ 221.17 Renaissance (4) Palm Springs, CA Full-service 410 100 410 68.00 % $ 200.23 $ 136.13 Hilton (5) Marietta, GA Full-service 200 100 200 64.20 % $ 173.58 $ 111.46 Le Meridien (6) Fort Worth, TX Full-service 188 29 55 46.10 % $ 206.18 $ 95.07 Total 17,644 17,511 69.60 % $ 190.76 $ 132.85 ________ (1) The Company entered into a new franchise agreement with Marriott to convert the Le Pavillon in New Orleans, Louisiana to a Tribute Portfolio property.
Petersburg, FL Full service 333 100 333 71.20 % $ 198.33 $ 141.28 Hilton Santa Fe, NM Full service 158 100 158 77.30 % $ 224.16 $ 173.31 41 Hotel Property Location Service Type Total Rooms % Owned Owned Rooms Year Ended December 31, 2023 Occupancy ADR RevPAR Hilton Bloomington, MN Full service 300 100 300 57.10 % $ 131.91 $ 75.25 Hilton Costa Mesa, CA Full service 486 100 486 79.80 % $ 152.34 $ 121.61 Hilton Boston, MA Full service 390 100 390 90.90 % $ 290.84 $ 264.27 Hilton Parsippany, NJ Full service 353 100 353 42.70 % $ 167.58 $ 71.60 Hilton Tampa, FL Full service 238 100 238 81.20 % $ 175.67 $ 142.73 Hilton Alexandria, VA Full service 252 100 252 65.10 % $ 210.87 $ 137.27 Hilton Santa Cruz, CA Full service 178 100 178 76.90 % $ 182.98 $ 140.67 Hilton Ft.
Petersburg, FL Full-service 333 100 333 72.30 % $ 200.57 $ 145.10 Hilton Santa Fe, NM Full-service 158 100 158 80.30 % $ 225.15 $ 180.82 Hilton Bloomington, MN Full-service 300 100 300 58.60 % $ 129.87 $ 76.16 Hilton Costa Mesa, CA Full-service 486 100 486 76.10 % $ 155.17 $ 118.08 Hilton Parsippany, NJ Full-service 353 100 353 42.00 % $ 169.72 $ 71.23 Hilton Tampa, FL Full-service 238 100 238 78.50 % $ 181.48 $ 142.49 Hilton Alexandria, VA Full-service 252 100 252 66.20 % $ 217.08 $ 143.61 Hilton Santa Cruz, CA Full-service 178 100 178 74.60 % $ 172.86 $ 128.98 Hilton Ft.
Removed
Full service 173 100 173 66.70 % $ 194.98 $ 130.04 The Melrose Washington, D.C. Full service 240 100 240 74.40 % $ 200.33 $ 148.99 Le Pavillon (1) New Orleans, LA Full service 226 100 226 45.80 % $ 157.69 $ 72.28 The Ashton Ft.
Added
Full-service 173 100 173 62.60 % $ 205.17 $ 128.51 The Melrose Washington, D.C.
Removed
The agreement with Marriott calls for the hotel to operate under Marriott White Label beginning on November 15, 2023 and to be converted to an Autograph property by April 1, 2025. (4) The ground lease expires in 2083.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

9 edited+7 added−2 removed4 unchanged
Biggest changeWe believe that we maintain a sufficient level of insurance coverage related to such events, and the related incremental costs incurred to date are immaterial. In February of 2024, two class action lawsuits were filed related to the cyber incident. The suits are currently pending in the U.S. District Court for the Northern District of Texas.
Biggest changeIn February of 2024, two class action lawsuits were filed, one in the U.S. District Court for the Northern District of Texas and a second in the 68th District Court for Dallas County related to the cyber incident. The lawsuit filed in the 68th District Court was subsequently dismissed and refiled in the U.S.
If we ultimately do not prevail in one or more of these legal matters, and the associated realized losses exceed our current estimates of the range of potential losses, our consolidated financial position, results of operations, or cash flows could be materially adversely affected in future periods. ITEM 4. Mine Safety Disclosures None. PART II
If we ultimately do not prevail in one or more of these legal matters, and the associated realized losses exceed our current estimates of the range of potential losses, our consolidated financial position, results of operations, or cash flows could be materially adversely affected in future periods. 43 Item 4. Mine Safety Disclosures None. PART II
To the extent the claims giving rise to these legal proceedings are not covered by insurance, they relate to the following general types of claims: employment matters, tax matters and matters relating to compliance with applicable law (for example, the Americans with Disability Act and similar state laws).
To the extent the claims giving rise to these legal proceedings are not covered by insurance, they relate to the following general types of claims: employment matters, tax matters and matters relating to compliance with applicable law (for example, the Americans with Disabilities Act and similar state laws).
Item 3. Legal Proceedings On December 20, 2016, a class action lawsuit was filed against one of the Company’s hotel management companies in the Superior Court of the State of California in and for the County of Contra Costa alleging violations of certain California employment laws, which class action affects nine hotels owned by subsidiaries of the Company.
On December 20, 2016, a class action lawsuit was filed against one of the Company’s hotel management companies in the Superior Court of the State of California in and for the County of Contra Costa alleging violations of certain California employment laws, which class action affects nine hotels owned by subsidiaries of the Company.
Notices to potential class members were sent out on February 2, 2021. Potential class members had until April 4, 2021 to opt out of the class; however, the total number of employees in the class has not been definitively determined and is the subject of continuing discovery.
Notices to potential class members were sent out on February 2, 2021. Potential class members had until April 4, 2021 to opt out of the class; however, the total number of employees in the class has not been definitively determined and is the subject of continuing discovery. The opt-out period has been extended until such time that discovery has concluded.
The opt out period has been extended until such time that discovery has concluded. In May 2023 the trial court requested additional briefing from the parties to determine whether the case should be maintained, dismissed, or the class de-certified. After submission of the briefs, the court requested that the parties submit stipulations for the court to rule upon.
In May 2023, the trial court requested additional briefing from the parties to determine whether the case should be maintained, dismissed, or the class de-certified. After submission of the briefs, the court requested that the parties submit stipulations for the court to rule upon.
During the quarter ended September 30, 2023, we had a cyber incident that resulted in the potential exposure of certain employee personal information. We have completed an investigation and have identified certain employee information that may have been exposed, but we have not identified that any customer information was exposed. All systems have been restored.
During the quarter ended September 30, 2023, we had a cyber incident that resulted in the potential exposure of certain personal information. We have completed an investigation and have identified certain information that may have been exposed and notified potentially impacted individuals pursuant to applicable state guidelines. All systems have been restored.
As of December 31, 2023, no amounts have been accrued. 43 We are also engaged in other legal proceedings that have arisen but have not been fully adjudicated.
A tentative settlement was reached subject to the parties finalizing the agreement and court approval. As of December 31, 2024, the estimated settlement liability amount has been accrued. We are also engaged in other legal proceedings that have arisen but have not been fully adjudicated.
On February 13, 2024, the judge ordered the parties to submit additional briefing related to on-site breaks.
On February 13, 2024, the judge ordered the parties to submit additional briefing related to on-site breaks. A tentative settlement has been reached subject to the respective parties obtaining various approvals. On August 4, 2020, a lawsuit, Benjamin Zermeno v.
Removed
While we believe it is reasonably possible that we may incur a loss associated with this litigation, because there remains uncertainty under California law with respect to a significant legal issue, discovery relating to class members continues, and the trial judge retains discretion to award lower penalties than set forth in the applicable California employment laws, we do not believe that any potential loss to the Company is reasonably estimable at this time.
Added
Item 3. Legal Proceedings Palm Beach Florida Hotel and Office Building Limited Partnership, et al. v. Nantucket Enterprises, Inc. This litigation involves a landlord tenant dispute from 2008. This litigation was resolved in 2017 with the determination and reimbursement of attorney’s fees being the only remaining dispute.
Removed
We intend to vigorously defend these matters and do not believe that any potential loss is reasonably estimable at this time. It is reasonably possible that the Company may incur additional costs related to the matter, but we are unable to predict with certainty the ultimate amount or range of potential loss.
Added
The negotiations relating to the potential payment of the remaining attorneys’ fees remained open, pending the appeal of a contempt order against the Maraist Law Firm for failing to produce their fee records. We previously accrued approximately $504,000 in legal fees.
Added
In September 2024, a settlement was reached to resolve the prevailing party’s legal fees in the amount of $1.4 million. As a result an additional accrual of approximately $896,000 was recorded and is included in “other hotel expenses” on our consolidated statement of operations for the year ended December 31, 2024.
Added
Beverly Hills Marriott, was filed in Alameda County Superior Court as a PAGA representative action alleging various wage and hour violations of all Remington managed California properties. The plaintiff’s individual claims were compelled to arbitration. On August 18, 2022, another lawsuit, Cristina Catalano v. Beverly Hills Marriott and Mr.
Added
C, was filed as a PAGA representative action alleging various wage and hour violations of all Remington managed California properties. The co-defendant separately settled and the individual arbitration has also settled. A private mediation was held on December 27, 2024 to globally resolve the three outstanding matters.
Added
District Court for the Northern District of Texas. On March 12, 2024, the court ordered the two cases be consolidated. The consolidated case is currently pending in the U.S. District Court for the Northern District of Texas. The parties have reached an agreement, subject to final Court approval, to resolve the class action suit.
Added
The amount of the class settlement is approximately $485,000. Ashford Inc. expects the entire settlement amount to be reimbursed through insurance coverage. The hearing for final Court approval of the settlement is scheduled for August 27, 2025.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

11 edited+5 added−1 removed4 unchanged
Biggest changeDistributions paid per share were characterized as follows for the following fiscal years: 2023 2022 2021 Amount % Amount % Amount % Preferred Stock – Series D: Ordinary taxable dividend $ — — % $ — — % $ — — % Capital gain distribution — — % — — % — — % Return of capital 2.1125 100.0000 % 2.1125 100.0000 % 3.1686 100.0000 % Total $ 2.1125 (1) 100.0000 % $ 2.1125 (1) 100.0000 % $ 3.1686 (1) 100.0000 % Preferred Stock – Series F: Ordinary taxable dividend $ — — % $ — — % $ — — % Capital gain distribution — — % — — % — — % Return of capital 1.8438 100.0000 % 1.8438 100.0000 % 2.7654 100.0000 % Total $ 1.8438 (1) 100.0000 % $ 1.8438 (1) 100.0000 % $ 2.7654 (1) 100.0000 % Preferred Stock – Series G: Ordinary taxable dividend $ — — % $ — — % $ — — % Capital gain distribution — — % — — % — — % Return of capital 1.8438 100.0000 % 1.8438 100.0000 % 2.7654 100.0000 % Total $ 1.8438 (1) 100.0000 % $ 1.8438 (1) 100.0000 % $ 2.7654 (1) 100.0000 % Preferred Stock – Series H: Ordinary taxable dividend $ — — % $ — — % $ — — % Capital gain distribution — — % — — % — — % Return of capital 1.8750 100.0000 % 1.8750 100.0000 % 2.8125 100.0000 % Total $ 1.8750 (1) 100.0000 % $ 1.8750 (1) 100.0000 % $ 2.8125 (1) 100.0000 % Preferred Stock – Series I: Ordinary taxable dividend $ — — % $ — — % $ — — % Capital gain distribution — — % — — % — — % Return of capital 1.8750 100.0000 % 1.8750 100.0000 % 2.8125 100.0000 % Total $ 1.8750 (1) 100.0000 % $ 1.8750 (1) 100.0000 % $ 2.8125 (1) 100.0000 % Preferred Stock – Series J: Ordinary taxable dividend $ — — % $ — — % $ — — % Capital gain distribution — — % — — % — — % Return of capital 1.9998 100.0000 % 0.1666 100.0000 % — — % Total $ 1.9998 (1) (4) 100.0000 % $ 0.1666 (1) (5) 100.0000 % $ — — % Preferred Stock – Series K (2) : Ordinary taxable dividend $ — — % $ — — % $ — — % Capital gain distribution — — % — — % — — % Return of capital 2.0540 100.0000 % — — % — — % Total $ 2.0540 (1) (4) 100.0000 % $ — — % $ — — % Preferred Stock – Series K (3) : Ordinary taxable dividend $ — — % $ — — % $ — — % Capital gain distribution — — % — — % — — % Return of capital 1.8790 100.0000 % — — % — — % Total $ 1.8790 (1) (4) 100.0000 % $ — — % $ — — % ____________________ (1) The fourth quarter 2021 preferred distributions paid January 14, 2022 to stockholders of record as of December 31, 2021 are treated as 2022 distributions for tax purposes.
Biggest changeDistributions paid per share were characterized as follows for the following fiscal years: 2024 2023 2022 Amount % Amount % Amount % Preferred Stock – Series D: Ordinary taxable dividend $ — — % $ — — % $ — — % Capital gain distribution 0.9383 44.4202 % — — % — — % Return of capital 1.1741 55.5798 % 2.1125 100.0000 % 2.1125 100.0000 % Total $ 2.1124 (1) 100.0000 % $ 2.1125 (1) 100.0000 % $ 2.1125 (1) 100.0000 % Preferred Stock – Series F: Ordinary taxable dividend $ — — % $ — — % $ — — % Capital gain distribution 0.8189 44.4202 % — — % — — % Return of capital 1.0247 55.5798 % 1.8438 100.0000 % 1.8438 100.0000 % Total $ 1.8436 (1) 100.0000 % $ 1.8438 (1) 100.0000 % $ 1.8438 (1) 100.0000 % Preferred Stock – Series G: Ordinary taxable dividend $ — — % $ — — % $ — — % Capital gain distribution 0.8189 44.4202 % — — % — — % Return of capital 1.0247 55.5798 % 1.8438 100.0000 % 1.8438 100.0000 % Total $ 1.8436 (1) 100.0000 % $ 1.8438 (1) 100.0000 % $ 1.8438 (1) 100.0000 % Preferred Stock – Series H: Ordinary taxable dividend $ — — % $ — — % $ — — % Capital gain distribution 0.8329 44.4202 % — — % — — % Return of capital 1.0421 55.5798 % 1.8750 100.0000 % 1.8750 100.0000 % Total $ 1.8750 (1) 100.0000 % $ 1.8750 (1) 100.0000 % $ 1.8750 (1) 100.0000 % Preferred Stock – Series I: Ordinary taxable dividend $ — — % $ — — % $ — — % Capital gain distribution 0.8329 44.4202 % — — % — — % Return of capital 1.0421 55.5798 % 1.8750 100.0000 % 1.8750 100.0000 % Total $ 1.8750 (1) 100.0000 % $ 1.8750 (1) 100.0000 % $ 1.8750 (1) 100.0000 % Preferred Stock – Series J: Ordinary taxable dividend $ — — % $ — — % $ — — % 44 Capital gain distribution 0.8884 44.4202 % — — % — — % Return of capital 1.1116 55.5798 % 1.9998 100.0000 % 0.1666 100.0000 % Total $ 2.0000 (1) (11) 100.0000 % $ 1.9998 (1) (12) 100.0000 % $ 0.1666 (1) (13) 100.0000 % Preferred Stock – Series K (2) : Ordinary taxable dividend $ — — % $ — — % $ — — % Capital gain distribution 0.9236 44.4202 % — — % — — % Return of capital 1.1556 55.5798 % 2.0540 100.0000 % — — % Total $ 2.0792 (1) (11) 100.0000 % $ 2.0540 (1) (12) 100.0000 % $ — — % Preferred Stock – Series K (3) : Ordinary taxable dividend $ — — % $ — — % $ — — % Capital gain distribution 0.9208 44.4202 % — — % — — % Return of capital 1.1521 55.5798 % 1.8790 100.0000 % — — % Total $ 2.0729 (1) (11) 100.0000 % $ 1.8790 (1) (12) 100.0000 % $ — — % Preferred Stock – Series K (4) : Ordinary taxable dividend $ — — % $ — — % $ — — % Capital gain distribution 0.9180 44.4202 % — — % — — % Return of capital 1.1487 55.5798 % 1.8790 100.0000 % — — % Total $ 2.0667 (1) (11) 100.0000 % $ 1.8790 (1) (12) 100.0000 % $ — — % Preferred Stock – Series K (5) : Ordinary taxable dividend $ — — % $ — — % $ — — % Capital gain distribution 0.9152 44.4202 % — — % — — % Return of capital 1.1452 55.5798 % 1.8790 100.0000 % — — % Total $ 2.0604 (1) (11) 100.0000 % $ 1.8790 (1) (12) 100.0000 % $ — — % Preferred Stock – Series K (6) : Ordinary taxable dividend $ — — % $ — — % $ — — % Capital gain distribution 0.9125 44.4202 % — — % — — % Return of capital 1.1417 55.5798 % 1.8790 100.0000 % — — % Total $ 2.0542 (1) (11) 100.0000 % $ 1.8790 (1) (12) 100.0000 % $ — — % Preferred Stock – Series K (7) : Ordinary taxable dividend $ — $ — — % $ — — % Capital gain distribution 0.8347 44.4202 % — — % — — % Return of capital 1.0444 55.5798 % — — % — — % Total $ 1.8791 (1) (11) 100.0000 % $ — — % $ — — % Preferred Stock – Series K (8) : Ordinary taxable dividend $ — — % $ — — % $ — — % Capital gain distribution 0.6071 44.4202 % — — % — — % Return of capital 0.7596 55.5798 % — — % — — % Total $ 1.3667 (1) (11) 100.0000 % $ — — % $ — — % Preferred Stock – Series K (9) : Ordinary taxable dividend $ — — % $ — — % $ — — % Capital gain distribution 0.3794 44.4202 % — — % — — % Return of capital 0.4747 55.5798 % — — % — — % Total $ 0.8541 (1) (11) 100.0000 % $ — — % $ — — % Preferred Stock – Series K (10) : Ordinary taxable dividend $ — — % $ — — % $ — — % Capital gain distribution 0.1518 44.4202 % — — % — — % Return of capital 0.1899 55.5798 % — — % — — % Total $ 0.3417 (1) (11) 100.0000 % $ — — % $ — — % ____________________ (1) The fourth quarter 2022 preferred distributions paid January 17, 2023 to stockholders of record as of December 30, 2022 are treated as 2023 distributions for tax purposes.
This, in turn, may depend upon receipt of lease payments with respect to our properties from indirect, wholly owned subsidiaries of our operating partnership and the management of our properties by our hotel managers and general business conditions. 44 Characterization of Distributions For income tax purposes, distributions paid consist of ordinary income, capital gains, return of capital or a combination thereof.
This, in turn, may depend upon receipt of lease payments with respect to our properties from indirect, wholly owned subsidiaries of our operating partnership and the management of our properties by our hotel managers and general business conditions. Characterization of Distributions For income tax purposes, distributions paid consist of ordinary income, capital gains, return of capital or a combination thereof.
Stockholders who wish to request a list of companies in the FTSE NAREIT Lodging & Resorts Index may send written requests to Ashford Hospitality Trust, Inc., Attention: Stockholder Relations, 14185 Dallas Parkway, Suite 1200, Dallas, Texas 75254. 46 The stock price performance shown below on the graph is not necessarily indicative of future price performance.
Stockholders who wish to request a list of companies in the FTSE NAREIT Lodging & Resorts Index may send written requests to Ashford Hospitality Trust, Inc., Attention: Stockholder Relations, 14185 Dallas Parkway, Suite 1200, Dallas, Texas 75254. The stock price performance shown below on the graph is not necessarily indicative of future price performance.
The number of shares subject to issuance under the PSUs (if any) will depend on the ultimate actual performance level, and the Company in its discretion may settle the 2022 and 2023 PSUs in cash rather than shares of common stock.
The number of shares subject to issuance under the PSUs (if any) will depend on the ultimate actual performance level, and the Company in its discretion may settle the 2023 PSUs in cash rather than shares of common stock.
For the year ended December 31, 2023 we did not declare or pay common stock dividends. On December 5, 2023, the board of directors approved our dividend policy for 2024, which continued the suspension of the Company’s common stock dividend into 2024. The board of directors will continue to review our dividend policy and make future announcements with respect thereto.
For the year ended December 31, 2024 we did not declare or pay common stock dividends. On December 10, 2024, the board of directors approved our dividend policy for 2025, which continued the suspension of the Company’s common stock dividend into 2025. The board of directors will continue to review our dividend policy and make future announcements with respect thereto.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities (a) Market Price of and Dividends on Registrant’s Common Equity and Related Stockholder Matters Market Price and Dividend Information Our common stock is listed and traded on the New York Stock Exchange under the symbol “AHT.” On March 12, 2024, there were 472 registered holders of record of our common stock.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities (a) Market Price of and Dividends on Registrant’s Common Equity and Related Stockholder Matters Market Price and Dividend Information Our common stock is listed and traded on the New York Stock Exchange under the symbol “AHT.” On March 19, 2025, there were 268 registered holders of record of our common stock.
(5) Distributions per share reflects the annual rate per share for distributions reportable in 2022. 45 Equity Compensation Plan Information The following table sets forth certain information with respect to securities authorized and available for issuance under our equity compensation plans as of December 31, 2023: Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights (1) Weighted-Average Exercise Price Of Outstanding Options, Warrants, And Rights Number of Securities Remaining Available for Future Issuance Equity compensation plans approved by security holders 497,000 N/A 649,000 (2) Equity compensation plans not approved by security holders None N/A None Total 497,000 N/A 649,000 ____________________ (1) Consists of rights to acquire our common stock subject to the satisfaction of service and or performance vesting conditions (with the amount shown assuming the maximum level of performance under the 2022 and 2023 PSU awards).
Equity Compensation Plan Information The following table sets forth certain information with respect to securities authorized and available for issuance under our equity compensation plans as of December 31, 2024: Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights (1) Weighted-Average Exercise Price Of Outstanding Options, Warrants, And Rights Number of Securities Remaining Available for Future Issuance Equity compensation plans approved by security holders 16,461 N/A 16,000 (2) Equity compensation plans not approved by security holders None N/A None Total 16,461 N/A 16,000 ____________________ (1) Consists of rights to acquire our common stock subject to the satisfaction of service and or performance vesting conditions (with the amount shown assuming the maximum level of performance under the 2023 PSU awards).
The fourth quarter 2022 preferred distributions paid January 17, 2023 to stockholders of record as of December 30, 2022 are treated as 2023 distributions for tax purposes. The fourth quarter 2023 preferred distributions paid January 16, 2024 to stockholders of record as of December 29, 2023 are treated as 2024 distributions for tax purposes.
The fourth quarter 2023 preferred distributions paid January 16, 2024 to stockholders of record as of December 29, 2024 are treated as 2024 distributions for tax purposes. The fourth quarter 2024 preferred distributions paid January 15, 2025 to stockholders of record as of December 31, 2024 are treated as 2025 distributions for tax purposes.
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN Among Ashford Hospitality Trust, Inc., the S&P Index and the FTSE NAREIT Lodging & Resorts Index Purchases of Equity Securities by the Issuer The following table provides the information with respect to purchases of shares of our common stock during each of the months in the fourth quarter of 2023 : Period Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plan (1) Maximum Dollar Value of Shares That May Yet Be Purchased Under the Plan (1) Common stock: October 1 to October 31 61 $ — — $ 200,000 November 1 to November 30 211 — — 200,000 December 1 to December 31 26 — — 200,000 Total 298 $ — — ____________________ (1) There is no cost associated with the forfeiture of 61, 211 and 26 restricted shares of our common stock in October, November and December, respectively.
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN Among Ashford Hospitality Trust, Inc., the S&P Index and the FTSE NAREIT Lodging & Resorts Index 47 Purchases of Equity Securities by the Issuer The following table provides the information with respect to purchases and forfeitures of shares of our common stock during each of the months in the fourth quarter of 2024: Period Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plan (1) Maximum Dollar Value of Shares That May Yet Be Purchased Under the Plan (1) Common stock: October 1 - October 31 — $ — — $ 200,000 November 1 - November 30 — — — 200,000 December - December 31 — — — 200,000 Total — $ — — ____________________ (1) On April 6, 2022 the board of directors approved a stock repurchase program pursuant to which the board of directors granted a repurchase authorization to acquire shares of the Company’s common stock and preferred stock having an aggregate value of up to $200 million.
Performance Graph The following graph compares the percentage change in the cumulative total stockholder return on our common stock with the cumulative total return of the S&P 500 Stock Index and the FTSE NAREIT Lodging & Resorts Index for the period from December 31, 2018 through December 31, 2023, assuming an initial investment of $100 in stock on December 31, 2018 with reinvestment of dividends.
(2) As of December 31, 2024, there were approximately 16,000 shares of our common stock, or securities convertible into approximately 16,000 shares of our common stock that remained available for issuance under our 2021 Stock Incentive Plan. 46 Performance Graph The following graph compares the percentage change in the cumulative total stockholder return on our common stock with the cumulative total return of the S&P 500 Stock Index and the FTSE NAREIT Lodging & Resorts Index for the period from December 31, 2019 through December 31, 2024, assuming an initial investment of $100 in stock on December 31, 2019 with reinvestment of dividends.
(2) Preferred Stock - Series K: (CUSIP #04410D867) (3) Preferred Stock - Series K: (CUSIP #04410D792, 04410D727, 04410D651, and 04410D578) (4) Distributions per share reflects the annual rate per share for distributions reportable in 2023.
(2) Preferred Stock - Series K: (CUSIP #04410D867) (3) Preferred Stock - Series K: (CUSIP #04410D792) (4) Preferred Stock - Series K: (CUSIP #04410D727) (5) Preferred Stock - Series K: (CUSIP #04410D651) (6) Preferred Stock - Series K: (CUSIP #04410D578) 45 (7) Preferred Stock - Series K: (CUSIP #04410D511) (8) Preferred Stock - Series K: (CUSIP #04410D438) (9) Preferred Stock - Series K: (CUSIP #04410D362) (10) Preferred Stock - Series K: (CUSIP #04410D289) (11) Distributions per share reflects the annual rate per share for distributions reportable in 2024.
Removed
(2) As of December 31, 2023, there were approximately 649,000 shares of our common stock, or securities convertible into approximately 649,000 shares of our common stock that remained available for issuance under our 2021 Stock Incentive Plan.
Added
(12) Distributions per share reflects the annual rate per share for distributions reportable in 2023. (13) Distributions per share reflects the annual rate per share for distributions reportable in 2022.
Added
The board of directors’ authorization replaced the previous repurchase authorization that the board of directors authorized in December 2017.
Added
During the period between October 1, 2024 and December 31, 2024, the Company exchanged a total of approximately 13,000 shares of its common stock for an aggregate of 5,000 shares of preferred stock with certain holders of its 8.45% Series D Cumulative Preferred Stock, 7.375% Series F Cumulative Preferred Stock, 7.375% Series G Cumulative Preferred Stock, 7.50% Series H Cumulative Preferred Stock and 7.50% Series I Cumulative Preferred Stock.
Added
The issuance of the shares of the common stock was made by the Company pursuant to the exemption from the registration requirements of Section 3(a)(9) of the Securities Act on the basis that these offers constituted an exchange with existing holders of the Company’s securities.
Added
No commission or other remuneration was paid to any party for soliciting such exchange and the transactions did not involve a public offering. In consideration for the common share issuances, the Company received the preferred shares from the stockholders, which preferred shares were cancelled and of no further effect. Item 6. Reserved

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

89 edited+96 added−43 removed78 unchanged
Biggest changeThus, changes in ADR have a more significant impact on operating margins than changes in occupancy. 51 The following table summarizes the changes in key line items from our consolidated statements of operations for the years ended December 31, 2023 and 2022 (in thousands): Year Ended December 31, Favorable (Unfavorable) Change 2023 2022 2021 2023 to 2022 2022 to 2021 Total revenue $ 1,367,533 $ 1,240,859 $ 805,411 $ 126,674 $ 435,448 Total hotel expenses (925,437) (835,993) (576,806) (89,444) (259,187) Property taxes, insurance and other (70,226) (67,338) (67,904) (2,888) 566 Depreciation and amortization (187,807) (201,797) (218,851) 13,990 17,054 Advisory service fee (48,927) (49,897) (52,313) 970 2,416 Corporate, general and administrative (16,181) (9,879) (16,153) (6,302) 6,274 Gain (loss) on consolidation of VIE and disposition of assets 11,488 300 1,449 11,188 (1,149) Operating income (loss) 130,443 76,255 (125,167) 54,188 201,422 Equity in earnings (loss) of unconsolidated entities (1,134) (804) (558) (330) (246) Interest income 8,978 4,777 207 4,201 4,570 Other income (expense) 310 415 760 (105) (345) Interest expense and amortization of discounts and loan costs (366,148) (226,995) (156,119) (139,153) (70,876) Write-off of premiums, loan costs and exit fees (3,469) (3,536) (10,612) 67 7,076 Gain (loss) on extinguishment of debt 53,386 — 11,896 53,386 (11,896) Realized and unrealized gain (loss) on derivatives (2,200) 15,166 14,493 (17,366) 673 Income tax benefit (expense) (900) (6,336) (5,948) 5,436 (388) Net income (loss) (180,734) (141,058) (271,048) (39,676) 129,990 (Income) loss from consolidated entities attributable to noncontrolling interests 6 — 73 6 (73) Net (income) loss attributable to redeemable noncontrolling interests in operating partnership 2,239 1,233 3,970 1,006 (2,737) Net income (loss) attributable to the Company $ (178,489) $ (139,825) $ (267,005) $ (38,664) $ 127,180 52 Comparison of Year Ended December 31, 2023 with Year Ended December 31, 2022 All hotel properties owned during the years ended December 31, 2023 and 2022 have been included in our results of operations during the respective periods in which they were owned.
Biggest changeThus, changes in ADR have a more significant impact on operating margins than changes in occupancy. 53 The following table summarizes the changes in key line items from our consolidated statements of operations for the year ended December 31, 2024 and 2023 (in thousands): Year Ended December 31, Favorable (Unfavorable) Change 2024 2023 2022 2024 to 2023 2023 to 2022 Total revenue $ 1,172,459 $ 1,367,533 $ 1,240,859 $ (195,074) $ 126,674 Total hotel expenses (815,356) (925,437) (835,993) 110,081 (89,444) Property taxes, insurance and other (64,103) (70,226) (67,338) 6,123 (2,888) Depreciation and amortization (152,776) (187,807) (201,797) 35,031 13,990 Impairment charges (59,331) — — (59,331) — Advisory service fee (58,606) (48,927) (49,897) (9,679) 970 Corporate, general and administrative (24,662) (16,181) (9,879) (8,481) (6,302) Gain (loss) on consolidation of VIE and disposition of assets and hotel properties 94,406 11,488 300 82,918 11,188 Gain (loss) on derecognition of assets 167,177 — — 167,177 — Operating income (loss) 259,208 130,443 76,255 128,765 54,188 Equity in earnings (loss) of unconsolidated entities (2,370) (1,134) (804) (1,236) (330) Interest income 6,942 8,978 4,777 (2,036) 4,201 Other income (expense) 108 310 415 (202) (105) Interest expense and amortization of discounts and loan costs (273,359) (326,970) (207,916) 53,611 (119,054) Interest expense associated with hotels in receivership (45,592) (39,178) (19,079) (6,414) (20,099) Write-off of premiums, loan costs and exit fees (5,245) (3,469) (3,536) (1,776) 67 Gain (loss) on extinguishment of debt 2,774 53,386 — (50,612) 53,386 Realized and unrealized gain (loss) on derivatives (6,480) (2,200) 15,166 (4,280) (17,366) Income tax benefit (expense) (997) (900) (6,336) (97) 5,436 Net income (loss) (65,011) (180,734) (141,058) 115,723 (39,676) (Income) loss from consolidated entities attributable to noncontrolling interests 4,028 6 — 4,022 6 Net (income) loss attributable to redeemable noncontrolling interests in operating partnership 683 2,239 1,233 (1,556) 1,006 Net income (loss) attributable to the Company $ (60,300) $ (178,489) $ (139,825) $ 118,189 $ (38,664) 54 All hotel properties held during the years ended December 31, 2024 and 2023 have been included in our results of operations during the respective periods in which they were held.
The original lenders previously transferred the loans to a securitization trust. On March 1, 2024, the Company received notice that the hotel properties securing the KEYS A and KEYS B loan pools have been transferred to a court-appointed receiver.
The original lenders previously transferred the loans to a securitization trust. On March 1, 2024, the Company received notice that the hotel properties securing the KEYS A and KEYS B loan pools have been transferred to a court-appointed receiver.
Based on our primary business objectives and forecasted operating conditions, our current key priorities and financial strategies include, among other things: • preserving capital and maintaining significant cash and cash equivalents liquidity; • disposition of non-core hotel properties; • acquisition of hotel properties, in whole or in part, that we expect will be accretive to our portfolio; • pursuing capital market activities and implementing strategies to enhance long-term stockholder value; • accessing cost effective capital, including through the issuance of non-traded preferred securities; • opportunistically exchanging preferred stock into common stock; • implementing selective capital improvements designed to increase profitability and maintain the quality of our assets; • implementing effective asset management strategies to minimize operating costs and increase revenues; • financing or refinancing hotels on competitive terms; • modifying or extending property-level indebtedness; • utilizing hedges, derivatives and other strategies to mitigate risks; • pursuing opportunistic value-add additions to our hotel portfolio; and • making other investments or divestitures that our board of directors deems appropriate.
Based on our primary business objectives and forecasted operating conditions, our current key priorities and financial strategies include, among other things: • preserving capital and maintaining significant cash and cash equivalents liquidity; • disposition of non-core hotel properties; • acquisition of hotel properties, in whole or in part, that we expect will be accretive to our portfolio; • pursuing capital market activities and implementing strategies to enhance long-term stockholder value; • accessing cost effective capital, including through the issuance of non-traded preferred securities; • opportunistically exchanging preferred stock into common stock; • implementing selective capital improvements designed to increase profitability and maintain the quality of our assets; • implementing effective asset management strategies to minimize operating costs and increase revenues; 48 • financing or refinancing hotels on competitive terms; • modifying or extending property-level indebtedness; • utilizing hedges, derivatives and other strategies to mitigate risks; • pursuing opportunistic value-add additions to our hotel portfolio; and • making other investments or divestitures that our board of directors deems appropriate.
In accordance with authoritative accounting guidance, we account for income taxes related to Ashford TRS using the 60 asset and liability method under which deferred tax assets and liabilities are recognized for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases.
In accordance with authoritative accounting guidance, we account for income taxes related to Ashford TRS using the asset and liability method under which deferred tax assets and liabilities are recognized for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases.
We present EBITDA, EBITDAre and Adjusted EBITDAre because we believe they are useful to an investor in evaluating our operating performance because it provides investors with an indication of our ability to incur and service debt, to satisfy general operating expenses, to make capital expenditures and to fund other cash needs or reinvest cash into our business.
We present EBITDA, EBITDAre and Adjusted EBITDAre because we believe they are useful to an investor in evaluating our operating performance because it provides investors with an indication of our ability to incur and service debt, to satisfy 66 general operating expenses, to make capital expenditures and to fund other cash needs or reinvest cash into our business.
However, we have no formal commitment or understanding to invest in additional assets, and there can be no 56 assurance that we will successfully make additional investments. We may, when conditions are suitable, consider additional capital raising opportunities. Our existing hotel properties are mostly located in developed areas with competing hotel properties.
However, we have no formal commitment or understanding to invest in additional assets, and there can be no assurance that we will successfully make additional investments. We may, when conditions are suitable, consider additional capital raising opportunities. Our existing hotel properties are mostly located in developed areas with competing hotel properties.
Distributions to our stockholders are generally taxable to our stockholders as ordinary income. However, since a portion of our investments are equity ownership interests in hotels, which result in depreciation and non-cash charges against our income, a portion of our distributions may constitute a non-taxable return of capital, to the extent of a stockholder’s tax basis in the stock.
Distributions to our stockholders are generally taxable to our stockholders as ordinary income. However, since a portion of our investments are equity ownership interests in hotels, which result in depreciation and non-cash charges against our income, a portion of our distributions may constitute a non-taxable return of capital, to the extent of a 64 stockholder’s tax basis in the stock.
The Company’s cash and cash equivalents also includes property-level 55 operating cash deposited with commercial banks that have been designated as a Global Systemically Important Bank (“G-SIB”) by the Financial Stability Board (“FSB”) and a small amount deposited with other commercial banks.
The Company’s cash and cash equivalents also includes property-level operating cash deposited with commercial banks that have been designated as a Global Systemically Important Bank (“G-SIB”) by the Financial Stability Board (“FSB”) and a small amount deposited with other commercial banks.
FFO is calculated on the basis defined by NAREIT, which is net income (loss) attributable to common stockholders, computed in accordance with GAAP, excluding gains or losses on consolidation of VIE and disposition of assets, plus depreciation and amortization of real estate assets, impairment charges on real estate assets, and after adjustments for unconsolidated entities and noncontrolling interests in the operating partnership.
FFO is calculated on the basis defined by NAREIT, which is net income (loss) attributable to common stockholders, computed in accordance with GAAP, excluding gains or losses on consolidation of VIE and disposition of assets and hotel properties, plus depreciation and amortization of real estate assets, impairment charges on real estate assets, and after adjustments for unconsolidated entities and noncontrolling interests in the operating partnership.
Discussions of 2022 items and year-to-year comparisons between 2022 and 2021 that are not included in this Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.
Discussions of 2023 items and year-to-year comparisons between 2023 and 2022 that are not included in this Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.
We do not anticipate paying any dividends on our outstanding common stock for any quarter during 2024 and expect to pay dividends on our outstanding Preferred Stock during 2024. Our board of directors will continue to review our dividend policy and make future announcements with respect thereto.
We do not anticipate paying any dividends on our outstanding common stock for any quarter during 2025 and expect to pay dividends on our outstanding preferred stock during 2025. Our board of directors will continue to review our dividend policy and make future announcements with respect thereto.
Based on when a hotel property was acquired or disposed, operating results for certain hotel properties are not comparable for the years ended December 31, 2023 and 2022. The hotel properties listed below are not comparable hotel properties for the periods indicated and all other hotel properties are considered comparable hotel properties.
Based on when a hotel property was acquired or disposed, operating results for certain hotel properties are not comparable for the years ended December 31, 2024 and 2023. The hotel properties listed below are not comparable hotel properties for the periods indicated and all other hotel properties are considered comparable hotel properties.
In 2023, the advisory services fee was comprised of a base advisory fee of $33.2 million, equity-based compensation of $3.3 million associated with equity grants of our common stock, PSUs, LTIP units and Performance LTIP units awarded to the officers and employees of Ashford Inc. and reimbursable expenses of $12.5 million.
In 2023, the advisory services fee was comprised of a base advisory fee of $33.2 million, equity-based compensation of $3.3 million associated with equity grants of our common stock, PSUs, LTIP units and Performance LTIP units awarded to the officers and employees of Ashford Inc. and reimbursable expenses of $12.5 million. Corporate, General and Administrative.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations This section of this Form 10-K generally discusses 2023 and 2022 items and year-to-year comparisons between 2023 and 2022.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations This section of this Form 10-K generally discusses 2024 and 2023 items and year-to-year comparisons between 2024 and 2023.
Additionally, our portfolio consists of f our consolidated operating hotel properties, which represent 405 total rooms owned through a 99.4% ownership interest in Stirling OP, which was formed by Stirling Inc. to acquire and own a diverse portfolio of stabilized income-producing hotels and resorts. Currently, all of our hotel properties are located in the United States.
Additionally, our portfolio consists of f our consolidated operating hotel properties, which represent 405 total rooms owned through a 98.8% ownership interest in Stirling OP, which was formed by Stirling Inc. to acquire and own a diverse portfolio of stabilized income-producing hotels and resorts. Currently, all of our hotel properties are located in the United States.
In 2023, we recognized an unrealized loss of $44.0 million associated with interest rate caps and an unrealized loss of $9,000 from the revaluation of the embedded debt derivative in the Oaktree Agreement, partially offset by a realized gain of $41.8 million related to payments from counterparties on interest rate caps.
In 2023, we recognized an unrealized loss of $44.0 million associated with interest rate caps and an unrealized loss of $9,000 from the revaluation of the embedded debt derivative in the Oaktree Agreement, partially offset by a realized gain of $41.8 million related to payments from counterparties on interest rate caps. Income Tax (Expense) Benefit.
Our calculation of Adjusted FFO excludes write-off of premiums, loan costs and exit fees, other income/expense, net, transaction and conversion costs, legal, advisory and settlement costs, stock/unit-based compensation, gains/losses on insurance settlements and non-cash items such as deemed dividends on redeemable preferred stock, amortization of loan costs, amortization of credit facility exit fee, default interest and late fees, unrealized gains/losses on derivative instruments, gains/losses on extinguishment of debt, and our portion of adjustments to FFO related to unconsolidated entities.
Our calculation of Adjusted FFO excludes write-off of premiums, loan costs and exit fees, other income/expense, net, transaction and conversion costs, legal, advisory and settlement costs, stock/unit-based compensation, gains/losses on insurance settlements and non-cash items such as deemed dividends on redeemable preferred stock, amortization of loan costs, amortization of credit facility exit fee, default interest and late fees, unrealized gains/losses on derivative instruments, gains/losses on extinguishment of debt and preferred stock, severance, and interest expense associated with hotels in receivership and our portion of adjustments to FFO related to unconsolidated entities.
NOLs become subject to an annual limitation in the event of certain cumulative changes in the ownership of significant shareholders over a three-year period in excess of 50%, as defined under Section 382 of the Internal Revenue Code. The remaining $4.0 million of our TRS NOLs are not subject to the limitations of Section 382.
NOLs become subject to an annual limitation in the event of certain cumulative changes in the ownership of significant shareholders over a three-year period in excess of 50%, as defined under Section 382 of the Internal Revenue Code. The remaining $55.8 million of our TRS NOLs are not subject to the limitations of Section 382.
In December 2023, the FASB issued ASU 2023-09 "Income Taxes (Topics 740): Improvements to Income Tax Disclosures" to expand the disclosure requirements for income taxes, specifically related to the rate reconciliation and income 61 taxes paid. ASU 2023-09 is effective for our annual periods beginning January 1, 2025, with early adoption permitted.
RECENTLY ISSUED ACCOUNTING STANDARDS In December 2023, the FASB issued ASU 2023-09 "Income Taxes (Topics 740): Improvements to Income Tax Disclosures" to expand the disclosure requirements for income taxes, specifically related to the rate reconciliation and income taxes paid. ASU 2023-09 is effective for our annual periods beginning January 1, 2025, with early adoption permitted.
We classify interest and penalties related to underpayment of income taxes as income tax expense. We and our subsidiaries file income tax returns in the U.S. federal jurisdiction and various states and cities. Tax years 2019 through 2023 remain subject to potential examination by certain federal and state taxing authorities.
We classify interest and penalties related to underpayment of income taxes as income tax expense. We and our subsidiaries file income tax returns in the U.S. federal jurisdiction and various states and cities. Tax years 2020 through 2024 remain subject to potential examination by certain federal and state taxing authorities.
In addition, the analysis utilized by us in determining our deferred tax asset valuation allowance involves considerable management judgment and assumptions. See note 20 to our consolidated financial statements. At December 31, 2023 and 2022, we recorded a valuation allowance of $29.3 million and $31.2 million, respectively on the net deferred tax assets of our taxable REIT subsidiaries.
In addition, the analysis utilized by us in determining our deferred tax asset valuation allowance involves considerable management judgment and assumptions. See note 20 to our consolidated financial statements. At December 31, 2024 and 2023, we recorded a valuation allowance of $37.6 million and $29.3 million, respectively on the net deferred tax assets of our taxable REIT subsidiaries.
In addition, we exclude impairment on real estate, gain/loss on consolidation of VIE and disposition of assets and gain/loss of unconsolidated entities to calculate EBITDAre, as defined by NAREIT.
In addition, we exclude impairment on real estate, gain/loss on consolidation of VIE and disposition of assets and hotel properties, gain/loss on derecognition of assets and gain/loss of unconsolidated entities to calculate EBITDAre, as defined by NAREIT.
To the extent that it is consistent with maintaining our REIT status, we may maintain accumulated earnings of Ashford TRS in that entity. On December 5, 2023, our board of directors reviewed and approved our 2024 dividend policy.
To the extent that it is consistent with maintaining our REIT status, we may maintain accumulated earnings of Ashford TRS in that entity. On December 10, 2024, our board of directors reviewed and approved our 2025 dividend policy.
Cash flows provided by operations were impacted by changes in hotel operations, our hotel dispositions in 2022 and 2023, our hotel acquisition in 2022 as well as the timing of collecting receivables from hotel guests, paying vendors, settling with derivative counterparties, settling with related parties and settling with hotel managers. Net Cash Flows Provided by (Used in) Investing Activities.
Cash flows provided by (used in) operations were impacted by changes in hotel operations, our hotel dispositions and derecognized assets, as well as the timing of collecting receivables from hotel guests, paying vendors, settling with derivative counterparties, settling with related parties and settling with hotel managers. Net Cash Flows Provided by (Used in) Investing Activities.
On April 6, 2022, the board of directors approved a stock repurchase program (the “Repurchase Program”) pursuant to which the board of directors granted a repurchase authorization to acquire shares of the Company’s common stock and preferred stock having an aggregate value of up to $200 million.
On April 6, 2022, the board of directors approved a stock repurchase program (the “Repurchase Program”) pursuant to which the board of directors granted a repurchase authorization to acquire shares of the Company’s common stock and preferred stock having an aggregate value of up to $200 million. No shares have been repurchased under the Repurchase Program.
We then further adjust EBITDAre to exclude certain additional items such as write-off of premiums, loan costs and exit fees, other income/expense, net, transaction and conversion costs, legal, advisory and settlement costs, advisory services incentive fee, gains/losses on insurance settlements and stock/unit-based compensation and non-cash items such as amortization of unfavorable contract liabilities, realized and unrealized gains/losses on derivative instruments, gains/losses on extinguishment of debt, as well as our portion of adjustments to EBITDAre of unconsolidated entities.
We then further adjust EBITDAre to exclude certain additional items such as write-off of premiums, loan costs and exit fees, other income/expense, net, transaction and conversion costs, stock/unit-based compensation and non-cash items, such as amortization of unfavorable contract liabilities, realized and unrealized gains/losses on derivative instruments, gains/losses on extinguishment of debt, severance, as well as our portion of adjustments to EBITDAre of unconsolidated entities.
Our estimated future obligations as of December 31, 2023 include both current and long-term obligations. With respect to our indebtedness, as discussed in note 7 to our consolidated financial statements, we have current obligations of $3.1 billion and long-term obligations of $316.3 million.
Our estimated future obligations as of December 31, 2024 include both current and long-term obligations. With respect to our indebtedness, as discussed in note 7 to our consolidated financial statements, we have current obligations of $2.1 billion and long-term obligations of $577.7 million.
Net cash flows provided by operating activities, pursuant to our consolidated statements of cash flows, which includes changes in balance sheet items, were $14.4 million and $39.2 million for the years ended December 31, 2023 and 2022, respectively.
Net cash flows provided by (used in) operating activities, pursuant to our consolidated statements of cash flows, which includes changes in balance sheet items, were $(23.6) million and $14.4 million for the years ended December 31, 2024 and 2023, respectively.
Utilization of the REIT NOLs subject to Section 382 are limited to approximately $37.2 million per year through 2025, and $9.4 million per year thereafter. $425.2 million of our NOLs will begin to expire in 2024 and are available to offset future taxable income, if any, through 2036.
Utilization of the REIT NOLs subject to Section 382 are limited to approximately $37.2 million per year through 2025, and $9.4 million per year thereafter. $424.6 million of our net operating loss carryforwards will begin to expire in 2029 and are 65 available to offset future taxable income, if any, through 2036.
In total $9.6 million of our TRS NOLs are subject to expiration and will begin to expire in 2024. The remainder were generated after December 31, 2017 and are not subject to expiration under the Tax Cuts and Jobs Act.
In total $3.0 million of our TRS NOLs are subject to expiration and will begin to expire in 2025. The remainder was generated after December 31, 2017 and are not subject to expiration under the Tax Cuts and Jobs Act.
At December 31, 2023, we had TRS net operating loss carryforwards (“NOLs") for U.S. federal income tax purposes of $94.2 million, however $90.2 million of our NOLs are subject to limitation in the amount of approximately $7.3 million per year through 2025, and $1.2 million per year thereafter under Section 382 of the Internal Revenue Code.
At December 31, 2024, we had TRS NOLs for U.S. federal income tax purposes of $139.4 million, however $83.6 million of our NOLs are subject to limitation in the amount of approximately $7.3 million per year through 2025, and $1.2 million per year thereafter under Section 382 of the Internal Revenue Code.
Gain on extinguishment of debt was $53.4 million in 2023 related to the deed in lieu of foreclosure transaction for the KEYS Pool F loan. Realized and Unrealized Gain (Loss) on Derivatives. Realized and unrealized gain on derivatives changed $17.4 million from a gain of $15.2 million in 2022 to a loss of $2.2 million in 2023.
In 2023, the gain on extinguishment of debt was $53.4 million related to the deed in lieu of foreclosure transaction for the KEYS Pool F loan. Realized and Unrealized Gain (Loss) on Derivatives. Realized and unrealized loss on derivatives increased $4.3 million from $2.2 million in 2023 to $6.5 million in 2024.
See “Non-GAAP Financial Measures.” Principal Factors Affecting Our Results of Operations The principal factors affecting our operating results include overall demand for hotel rooms compared to the supply of available hotel rooms, and the ability of our third-party management companies to increase or maintain revenues while controlling expenses.
See “Non-GAAP Financial Measures.” Principal Factors Affecting Our Results of Operations The principal factors affecting our operating results include overall demand for hotel rooms compared to the supply of available hotel rooms, and the ability of our third-party management companies to increase or maintain revenues while controlling expenses. 52 Demand —The demand for lodging, including business travel, is directly correlated to the overall economy; as GDP increases, lodging demand typically increases.
As of December 31, 2023, $21.7 million was also due to the Company from third-party hotel managers, most of which is held by one of the Company’s managers and is available to fund hotel operating costs. At December 31, 2023, our net debt to gross assets was 70.2%.
As of December 31, 2024, $21.6 million (including amounts held for sale) was also due to the Company from third-party hotel managers, most of which is held by one of the Company’s managers and is available to fund hotel operating costs. At December 31, 2024, our net debt to gross assets was 69.5%.
LIQUIDITY AND CAPITAL RESOURCES Liquidity As of December 31, 2023 , the Company held cash and cash equivalents of $165.2 million and restricted cash of $146.3 million (including amounts held for sale), the vast majority of which is comprised of lender and manager-held reserves.
LIQUIDITY AND CAPITAL RESOURCES Liquidity As of December 31, 2024 , the Company held cash and cash equivalents of $112.9 million and restricted cash of $107.6 million (including amounts held for sale), the vast majority of which is comprised of lender and manager-held reserves.
Direct expenses were 31.0% of total hotel revenue for 2023 and 30.8% for 2022.
Direct expenses were 31.2% of total hotel revenue for 2024 and 31.0% for 2023.
Our loans currently in cash traps may remain subject to cash trap provisions for a substantial period of time which could limit our flexibility and adversely affect our financial condition or our qualification as a REIT.
At December 31, 2024, 12 of our hotels were in cash traps and approximately $2.6 million of our restricted cash was subject to these cash traps. 59 Our loans currently in cash traps may remain subject to cash trap provisions for a substantial period of time, which could limit our flexibility and adversely affect our financial condition or our qualification as a REIT.
On March 4, 2022, the Company filed an initial registration statement on Form S-3 with the SEC, as amended on April 29, 2022, related to the Company’s non-traded Series J Preferred Stock and Series K Preferred Stock.
The Company is in active discussions with the lender regarding a multi-year extension of the mortgage loan. Equity Transactions On March 4, 2022, the Company filed an initial registration statement on Form S-3 with the SEC, as amended on April 29, 2022, related to the Company’s non-traded Series J Preferred Stock and Series K Preferred Stock.
However, to facilitate a clear understanding of our historical operating results, we believe that FFO and Adjusted FFO should be considered along with our net income or loss and cash flows reported in the consolidated financial statements. 63 The following table reconciles net income (loss) to FFO and Adjusted FFO (in thousands): Year Ended December 31, 2023 2022 2021 Net income (loss) $ (180,734) $ (141,058) $ (271,048) (Income) loss attributable to noncontrolling interest in consolidated entities 6 — 73 Net (income) loss attributable to redeemable noncontrolling interests in operating partnership 2,239 1,233 3,970 Preferred dividends (15,921) (12,433) (252) Deemed dividends on redeemable preferred stock (2,673) (946) — Gain (loss) on extinguishment of preferred stock 3,390 — (607) Net income (loss) attributable to common stockholders (193,693) (153,204) (267,864) Depreciation and amortization of real estate 187,807 201,797 218,708 (Gain) loss on consolidation of VIE and disposition of assets (11,488) (300) (449) Net income (loss) attributable to redeemable noncontrolling interests in operating partnership (2,239) (1,233) (3,970) Equity in (earnings) loss of unconsolidated entities 1,134 804 558 Company’s portion of FFO of unconsolidated entities (668) (771) (556) FFO available to common stockholders and OP unitholders (19,147) 47,093 (53,573) Deemed dividends on redeemable preferred stock 2,673 946 — (Gain) loss on extinguishment of preferred stock (3,390) — 607 Transaction and conversion costs 3,856 (2,300) 3,407 Write-off of premiums, loan costs and exit fees 3,469 3,536 10,612 Unrealized (gain) loss on derivatives 44,041 (10,781) (14,493) Stock/unit-based compensation 4,027 5,998 10,095 Legal, advisory and settlement costs 1,181 1,936 7,371 Other (income) expense, net (310) (412) (1,760) Amortization of term loan exit fee 18,616 11,948 7,076 Amortization of loan costs 12,735 9,672 12,597 Uninsured remediation costs — — 341 (Gain) loss on extinguishment of debt (53,386) — (11,896) Dead deal costs — — 689 Default interest and late fees 12,553 — — (Gain) loss on insurance settlements (505) (342) — Company’s portion of adjustments to FFO of unconsolidated entities 2 16 16 Adjusted FFO available to common stockholders and OP unitholders $ 26,415 $ 67,310 $ (28,911) 64
However, to facilitate a clear understanding of our historical operating results, we believe that FFO and Adjusted FFO should be considered along with our net income or loss and cash flows reported in the consolidated financial statements. 68 The following table reconciles net income (loss) to FFO and Adjusted FFO (in thousands): Year Ended December 31, 2024 2023 2022 Net income (loss) $ (65,011) $ (180,734) $ (141,058) (Income) loss attributable to noncontrolling interest in consolidated entities 4,028 6 — Net (income) loss attributable to redeemable noncontrolling interests in operating partnership 683 2,239 1,233 Preferred dividends (22,686) (15,921) (12,433) Deemed dividends on redeemable preferred stock (2,906) (2,673) (946) Gain (loss) on extinguishment of preferred stock 3,370 3,390 — Net income (loss) attributable to common stockholders (82,522) (193,693) (153,204) Depreciation and amortization of real estate 152,776 187,807 201,797 Gain (loss) on consolidation of VIE and disposition of assets and hotel properties (94,406) (11,488) (300) (Gain) loss on derecognition of assets (167,177) — — Net income (loss) attributable to redeemable noncontrolling interests in operating partnership (683) (2,239) (1,233) Equity in (earnings) loss of unconsolidated entities 2,370 1,134 804 Impairment charges on real estate 59,331 — — Company’s portion of FFO of unconsolidated entities (932) (668) (771) FFO available to common stockholders and OP unitholders (131,243) (19,147) 47,093 Deemed dividends on redeemable preferred stock 2,906 2,673 946 (Gain) loss on extinguishment of preferred stock (3,370) (3,390) — Transaction and conversion costs 10,809 3,856 (2,300) Write-off of premiums, loan costs and exit fees 5,245 3,469 3,536 Unrealized (gain) loss on derivatives 32,790 44,041 (10,781) Stock/unit-based compensation 2,097 4,027 5,998 Legal, advisory and settlement costs 3,230 1,181 1,936 Other (income) expense, net (108) (310) (412) Amortization of term loan exit fee 844 18,616 11,948 Amortization of loan costs 13,591 12,735 9,672 (Gain) loss on insurance settlements (73) (505) (342) (Gain) loss on extinguishment of debt (2,774) (53,386) — Interest expense associated with hotels in receivership 40,045 — — Severance 2,824 — — Default interest and late fees — 12,553 — Company’s portion of adjustments to FFO of unconsolidated entities 125 2 16 Adjusted FFO available to common stockholders and OP unitholders $ (23,062) $ 26,415 $ 67,310 69
At December 31, 2023, Ashford Hospitality Trust, Inc., our REIT, had NOLs for U.S. federal income tax purposes of $1.2 billion based on the latest filed tax returns.
At December 31, 2024, we had NOLs for U.S. federal income tax purposes of $1.4 billion based on the latest filed tax returns.
In 2022, the advisory services fee was comprised of a base advisory fee of $34.8 million, equity-based compensation of $5.2 million associated with equity grants of our common stock and LTIP units awarded to the officers and employees of Ashford Inc. and reimbursable expenses of $9.9 million. Corporate, General and Administrative.
In 2024, the advisory services fee was comprised of a base advisory fee of $32.5 million, equity-based compensation of $1.8 million associated with equity grants of our common stock, PSUs, LTIP units and Performance LTIP units awarded to the officers and employees of Ashford Inc., reimbursable expenses of $23.9 million and a performance participation fee of $454,000 associated with the Stirling OP advisory agreement with Ashford Inc.
For the year ended December 31, 2022, net cash flows used in financing activities were $101.5 million.
Net Cash Flows Provided by (Used in) Financing Activities. For the year ended December 31, 2024, net cash flows used in financing activities were $258.8 million.
Other hotel revenue, which consists mainly of Internet access, parking, and spa revenue, increased $5.4 million, or 8.1%, to $72.7 million in 2023 compared to 2022.
Other hotel revenue, which consists mainly of Internet access, parking, and spa revenue, decreased $4.9 million, or 6.8%, to $67.8 million in 2024 compared to 2023.
While the industry is expected to have supply growth below historical averages, we may experience supply growth, in certain markets, in excess of national averages that may negatively impact performance. Beginning in 2020, the COVID-19 pandemic had a direct impact on supply. As the economy recovers from COVID-19, we have experienced supply growth in certain markets.
While the industry is expected to have supply growth below historical averages, we may experience supply growth, in certain markets, in excess of national averages that may negatively impact performance.
Other revenue decreased $83,000, or 2.9%, to $2.8 million in 2023 compared to 2022. Hotel Operating Expenses. Hotel operating expenses increased $89.4 million, or 10.7%, to $925.4 million in 2023 compared to 2022. Hotel operating expenses consist of direct expenses from departments associated with revenue streams and indirect expenses associated with support departments and management fees.
Other revenue decreased $476,000, or 17.0%, to $2.3 million in 2024 compared to 2023. Hotel Operating Expenses. Hotel operating expenses decreased $110.1 million, or 11.9%, to $815.4 million in 2024 compared to 2023. Hotel operating expenses consist of direct expenses from departments associated with revenue streams and indirect expenses associated with support departments and management fees.
We are currently evaluating the potential effect that the updated standard will have on our financial statement disclosures. NON-GAAP FINANCIAL MEASURES The following non-GAAP presentations of EBITDA, EBITDAre, Adjusted EBITDAre, FFO and Adjusted FFO are presented to help our investors evaluate our operating performance.
NON-GAAP FINANCIAL MEASURES The following non-GAAP presentations of EBITDA, EBITDAre, Adjusted EBITDAre, FFO and Adjusted FFO are presented to help our investors evaluate our operating performance.
We may incur indebtedness to meet distribution requirements imposed on REITs under the Code to the extent that working capital and cash flow from our investments are insufficient to fund required distributions. INFLATION We rely entirely on the performance of our hotel properties and the ability of the hotel properties’ managers to increase revenues to keep pace with inflation.
We may incur indebtedness to meet distribution requirements imposed on REITs under the Code to the extent that working capital and cash flow from our investments are insufficient to fund required distributions. We may pay dividends in excess of our cash flow.
Net loss attributable to the Company increased $38.7 million from $139.8 million for the year ended December 31, 2022 (“2022”) to $178.5 million for the year ended December 31, 2023 (“2023”) as a result of the factors discussed below. 53 Revenue. Rooms revenue from our hotel properties increased $85.2 million, or 8.7%, to $1.1 billion in 2023 compared to 2022.
Net loss attributable to the Company decreased $118.2 million from $178.5 million for the year ended December 31, 2023 (“2023”) to $60.3 million for the year ended December 31, 2024 (“2024”) as a result of the factors discussed below. Revenue. Rooms revenue from our hotel properties decreased $169.4 million, or 16.0%, to $889.8 million in 2024 compared to 2023.
Gain (Loss) on Consolidation of VIE and Disposition of Assets. Gain on consolidation of VIE and disposition of assets increased $11.2 million, from $300,000 in 2022 to $11.5 million in 2023.
Gain (Loss) on Consolidation of VIE and Disposition of Assets and Hotel Properties. Gain on consolidation of VIE and disposition of assets and hotel properties increased $82.9 million, from $11.5 million in 2023 to $94.4 million in 2024.
Depreciation and amortization decreased $14.0 million or 6.9%, to $187.8 million in 2023 compared to 2022, which consisted of lower depreciation of $9.7 million from our comparable hotel properties primarily related to fully depreciated assets, $246,000 from the Stirling hotel properties and $4.5 million from our Hotel Dispositions partially offset by an increase of $512,000 from our Hotel Acquisition.
Depreciation and amortization decreased $35.0 million or 18.7%, to $152.8 million in 2024 compared to 2023, which consisted of lower depreciation of $19.9 million from our Hotel Dispositions, $11.4 million from the KEYS A and B properties that went into receivership and $6.3 million from our comparable hotel properties, primarily related to fully depreciated assets, partially offset by an increase of $1.0 million from our Stirling hotel properties and $1.5 million from the Le Meridien that opened in August 2024.
Advisory Services Fee. Advisory services fee decreased $970,000, or 1.9%, to $48.9 million in 2023 compared to 2022. The advisory services fee represents fees incurred in connection with the advisory agreements between Ashford Inc. and the Company and between Ashford Inc. and Stirling OP.
The advisory services fee represents fees incurred in connection with the advisory agreements between Ashford Inc. and the Company and between Ashford Inc. and Stirling OP.
Equity in loss of unconsolidated entities was $1.1 million in 2023, which consisted of equity in loss of $528,000 from OpenKey and $606,000 from an investment in an entity that owns the 54 Meritage Resort and Spa and the Grand Reserve at the Meritage in Napa, California and $804,000 in 2022, which consisted of our share of loss of $668,000 in OpenKey and $136,000 in the Meritage investment.
Equity in loss of unconsolidated entities was $2.4 million in 2024, which consisted of equity in loss of $566,000 million from OpenKey, $795,000 from an investment in an entity that owns the Meritage Resort and Spa and the Grand Reserve at the Meritage in Napa, California and a $1.0 million impairment charge on OpenKey.
As of March 12, 2024, the Company has issued approximately 4.1 million shares of Series J Preferred Stock and received net proceeds of approximately $91.3 million and approximately 240,000 shares of Series K Preferred Stock and received net proceeds of approximately $5.8 million.
As of March 19, 2025, the Company has issued approximately 7.4 million shares (exclusive of the dividend reinvestment plan shares) of Series J Preferred Stock and received net proceeds of approximately $166.8 million and approximately 720,000 shares (exclusive of the dividend reinvestment plan shares) of Series K Preferred Stock and received net proceeds of approximately $17.5 million.
Cash outflows primarily consisted of $50.9 million for repayments of indebtedness, $3.1 million for payments of loan costs and exit fees, $12.4 million of payments for preferred dividends, $316,000 of purchases of common stock and $40.1 million of payments for derivatives, partially offset by $1.6 million of borrowings on indebtedness, $1.1 million of net proceeds from preferred stock offerings and $2.9 million of proceeds from in-the-money interest rate caps.
Cash outflows primarily consisted of $388.3 million for repayments of indebtedness, $20.9 million for payments of loan costs and exit fees, $20.4 million of payments for preferred dividends, $16.3 million of payments for derivatives and distributions to a non-controlling interest in a consolidated entity of $2.5 million, partially offset by $63.8 million of borrowing on indebtedness, $84.8 million of net proceeds from preferred stock offerings, $8.8 million of net proceeds from common stock offerings, proceeds of $27.8 million from counterparties from in-the-money interest rate caps and contributions of $4.9 million from a non-controlling interest in a consolidated entity.
Our comparable hotel properties experienced an increase of 4.3% in room rates and an increase of 325 basis points in occupancy. Food and beverage revenue increased $36.2 million, or 18.4%, to $232.8 million in 2023 compared to 2022.
Our comparable hotel properties experienced an increase of 1.7% in room rates and a decrease of 89 basis points in occupancy. Food and beverage revenue decreased $20.2 million, or 8.7%, to $212.6 million in 2024 compared to 2023.
We have amortization payments of approximately $2.2 million due in the next twelve months. As discussed in note 19 to our consolidated financial statements, under our operating and finance leases we have current obligations of $5.5 million and long-term obligations of $253.3 million. Additionally, we have short-term capital commitments of $59.7 million.
As discussed in note 19 to our consolidated financial statements, under our operating and finance leases we have current obligations of $7.2 million and long-term obligations of $704.1 million.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES Our significant accounting policies are fully described in note 2 to our consolidated financial statements included in Item 8. Financial Statements and Supplementary Data.
Our general and administrative costs, real estate and personal property taxes, property and casualty insurance, labor costs and utilities are subject to inflation as well. CRITICAL ACCOUNTING POLICIES AND ESTIMATES Our significant accounting policies are fully described in note 2 to our consolidated financial statements included in Item 8. Financial Statements and Supplementary Data.
The following table reconciles net income (loss) to EBITDA, EBITDAre and Adjusted EBITDAre (in thousands): Year Ended December 31, 2023 2022 2021 Net income (loss) $ (180,734) $ (141,058) $ (271,048) Interest expense and amortization of discounts and loan costs 366,148 226,995 156,119 Depreciation and amortization 187,807 201,797 218,851 Income tax expense (benefit) 900 6,336 5,948 Equity in (earnings) loss of unconsolidated entities 1,134 804 558 Company’s portion of EBITDA of unconsolidated entities 231 (674) (554) EBITDA 375,486 294,200 109,874 (Gain) loss on consolidation of VIE and disposition of assets (11,488) (300) (449) EBITDAre 363,998 293,900 109,425 Amortization of unfavorable contract liabilities (15) 181 211 Transaction and conversion costs 3,856 (2,300) 3,033 Write-off of premiums, loan costs and exit fees 3,469 3,536 10,612 Realized and unrealized (gain) loss on derivatives 2,200 (10,781) (14,493) Stock/unit-based compensation 4,027 5,998 10,095 Legal, advisory and settlement costs 1,181 1,936 7,371 Other (income) expense, net (310) (4,797) (1,760) Dead deal costs — — 689 (Gain) loss on insurance settlements (505) (342) — (Gain) loss on extinguishment of debt (53,386) — (11,896) Uninsured remediation costs — — 341 Company’s portion of adjustments to EBITDAre of unconsolidated entities 2 16 16 Adjusted EBITDAre $ 324,517 $ 287,347 $ 113,644 62 We calculate FFO and Adjusted FFO in the following table.
The following table reconciles net income (loss) to EBITDA, EBITDAre and Adjusted EBITDAre (in thousands): Year Ended December 31, 2024 2023 2022 Net income (loss) $ (65,011) $ (180,734) $ (141,058) Interest expense and amortization of discounts and loan costs 273,359 326,970 207,916 Interest expense associated with hotels in receivership 45,592 39,178 19,079 Depreciation and amortization 152,776 187,807 201,797 Income tax expense (benefit) 997 900 6,336 Equity in (earnings) loss of unconsolidated entities 2,370 1,134 804 Company’s portion of EBITDA of unconsolidated entities 436 231 (674) EBITDA 410,519 375,486 294,200 Impairment charges on real estate 59,331 — — Gain (loss) on consolidation of VIE and disposition of assets and hotel properties (94,406) (11,488) (300) Gain (loss) on derecognition of assets (167,177) — — EBITDAre 208,267 363,998 293,900 Amortization of unfavorable contract liabilities (122) (15) 181 Transaction and conversion costs 10,809 3,856 (2,300) Write-off of premiums, loan costs and exit fees 5,245 3,469 3,536 Realized and unrealized (gain) loss on derivatives 6,480 2,200 (10,781) Stock/unit-based compensation 2,097 4,027 5,998 Legal, advisory and settlement costs 3,230 1,181 1,936 Other (income) expense, net (108) (310) (4,797) (Gain) loss on insurance settlements (73) (505) (342) (Gain) loss on extinguishment of debt (2,774) (53,386) — Severance 2,824 — — Company’s portion of adjustments to EBITDAre of unconsolidated entities 6 2 16 Adjusted EBITDAre $ 235,881 $ 324,517 $ 287,347 67 We calculate FFO and Adjusted FFO in the following table.
The Company adopted the standards upon the respective effective dates. There was no material impact as a result of this adoption. RECENTLY ISSUED ACCOUNTING STANDARDS In November 2023, the FASB issued ASU 2023-07 "Segment Reporting (Topic 280):Improvements to Reportable Segment Disclosures" which expands annual and interim disclosure requirements for reportable segments, primarily through enhanced disclosures about significant segment expenses.
RECENTLY ADOPTED ACCOUNTING STANDARDS In November 2023, the FASB issued ASU 2023-07 "Segment Reporting (Topic 280):Improvements to Reportable Segment Disclosures" which expands annual and interim disclosure requirements for reportable segments, primarily through enhanced disclosures about significant segment expenses. We adopted the standard effective for the year ended December 31, 2024. See note 24 to our consolidated financial statements.
Direct expenses increased $41.4 million in 2023 compared to 2022, comprised of an increase of $40.0 million from our comparable hotel properties and an increase of $3.4 million from our Hotel Acquisition, partially offset by a decrease of $1.9 million from our Hotel Dispositions and $126,000 from the Stirling hotel properties.
Direct expenses decreased $58.0 million in 2024 compared to 2023, comprised of a decrease of $43.5 million from our Hotel Dispositions and $20.7 million from the KEYS A and B properties that went into receivership partially offset by an increase of $4.9 million from our comparable hotel properties, $151,000 from the Stirling properties, and $1.2 million from the Le Meridien that opened in August 2024.
Our noncontrolling interest partners in consolidated entities were allocated a loss of $6,000 in 2023. Net (Income) Loss Attributable to Redeemable Noncontrolling Interests in Operating Partnership. Noncontrolling interests in operating partnership were allocated net losses of $2.2 million and $1.2 million in 2023 and 2022, respectively.
Our noncontrolling interest partners in consolidated entities were allocated a loss of $6,000 in 2023. At December 31, 2024, noncontrolling interests in consolidated entities represented an ownership interest of 70.7% in 815 Commerce MM and 1.20% in Stirling OP. See note 2 to our consolidated financial statements. Net (Income) Loss Attributable to Redeemable Noncontrolling Interests in Operating Partnership.
Property taxes, insurance and other expense increased $2.9 million or 4.3%, to $70.2 million in 2023 compared to 2022, which was primarily due to an increase of $3.2 million from our comparable hotel properties, $55,000 from the Stirling hotel properties and $135,000 from our Hotel Acquisition partially offset by a decrease of $497,000 from our Hotel Dispositions. Depreciation and Amortization.
Property taxes, insurance and other expense decreased $6.1 million or 8.7%, to $64.1 million in 2024 compared to 2023, which was primarily due to a decrease of $7.2 million from our Hotel Dispositions and $4.5 million from the KEYS A and B properties that went into receivership, partially offset by an increase of $5.2 million from our comparable hotel properties, $178,000 from the Stirling hotel properties and $279,000 from the Le Meridien that opened in August 2024.
Below is a summary of the hotel properties securing the KEYS Pool A loan and KEYS Pool B loan: KEYS A Loan Pool Courtyard Columbus Tipton Lakes – Columbus, IN Courtyard Old Town – Scottsdale, AZ Residence Inn Hughes Center – Las Vegas, NV Residence Inn Phoenix Airport – Phoenix, AZ Residence Inn San Jose Newark – Newark, CA SpringHill Suites Manhattan Beach – Hawthorne, CA SpringHill Suites Plymouth Meeting – Plymouth Meeting, PA KEYS B Loan Pool Courtyard Basking Ridge – Basking Ridge, NJ Courtyard Newark Silicon Valley – Newark, CA Courtyard Oakland Airport – Oakland, CA Courtyard Plano Legacy Park – Plano, TX Residence Inn Plano – Plano, TX SpringHill Suites BWI Airport – Baltimore, MD TownePlace Suites Manhattan Beach – Hawthorne, CA On November 16, 2023, we refinanced the $6.2 million loan secured by the Residence Inn Manchester, $9.1 million loan secured by the Residence Inn Jacksonville, and $21.9 million mortgage loan secured by the Hampton Inn Buford and the SpringHill Suites Buford.
Below is a summary of the hotel properties securing the KEYS Pool A loan and Keys Pool B loan: KEYS A Loan Pool Courtyard Columbus Tipton Lakes – Columbus, IN Courtyard Old Town – Scottsdale, AZ Residence Inn Hughes Center – Las Vegas, NV Residence Inn Phoenix Airport – Phoenix, AZ Residence Inn San Jose Newark – Newark, CA SpringHill Suites Manhattan Beach – Hawthorne, CA SpringHill Suites Plymouth Meeting – Plymouth Meeting, PA KEYS B Loan Pool Courtyard Basking Ridge – Basking Ridge, NJ Courtyard Newark Silicon Valley – Newark, CA Courtyard Oakland Airport – Oakland, CA Courtyard Plano Legacy Park – Plano, TX Residence Inn Plano – Plano, TX SpringHill Suites BWI Airport – Baltimore, MD TownePlace Suites Manhattan Beach – Hawthorne, CA We derecognized the hotel properties securing the KEYS Pool A and KEYS Pool B loans from our consolidated balance sheet in March 2024, when the receiver took control of the hotel properties, and accordingly recognized a gain of $133.9 million, which is included in “gain (loss) on derecognition of assets” in our consolidated statements of operations and recorded a contract asset of $378.2 million, which represented the liabilities we expect to be released from upon final resolution with the lenders on the KEYS Pool A and KEYS Pool B mortgage loans in exchange for the transfer of ownership of the respective hotel properties.
Write-off of premiums, loan costs and exit fees decreased $67,000 to $3.5 million in 2023 compared to 2022. In 2023, we incurred fees of $3.5 million related to loan refinances, modifications and exit fees. In 2022, we recognized Lismore fees of $768,000 related to the Lismore Agreement and fees of $2.0 million related to loan modifications and extensions.
Write-off of premiums, loan costs and exit fees increased $1.8 million to $5.2 million in 2024 compared to 2023. In 2024, we incurred fees of approximately $4.4 million related to loan refinances and modifications and wrote-off $817,000 of unamortized loan costs.
In 2022, we recorded an unrealized gain of $4.2 million from the revaluation of the embedded debt derivative in the Oaktree Credit Agreement, an unrealized gain of $6.6 million from interest rate caps and a realized gain of $4.4 million related to payments from counterparties on interest rate caps. Income Tax (Expense) Benefit.
In 2024, we recognized an unrealized loss of $27.1 million associated with interest rate caps, an unrealized loss of $320,000 associated with interest rate floors and an unrealized loss of $5.4 million from the revaluation of the embedded debt derivative in the Oaktree Agreement partially offset by a realized gain of $26.3 million related to payments from counterparties on interest rate caps.
Below is a summary of the hotel properties securing the KEYS Pool A loan and Keys Pool B loan: KEYS A Loan Pool Courtyard Columbus Tipton Lakes – Columbus, IN Courtyard Old Town – Scottsdale, AZ Residence Inn Hughes Center – Las Vegas, NV Residence Inn Phoenix Airport – Phoenix, AZ Residence Inn San Jose Newark – Newark, CA SpringHill Suites Manhattan Beach – Hawthorne, CA SpringHill Suites Plymouth Meeting – Plymouth Meeting, PA KEYS B Loan Pool Courtyard Basking Ridge – Basking Ridge, NJ Courtyard Newark Silicon Valley – Newark, CA Courtyard Oakland Airport – Oakland, CA Courtyard Plano Legacy Park – Plano, TX Residence Inn Plano – Plano, TX SpringHill Suites BWI Airport – Baltimore, MD TownePlace Suites Manhattan Beach – Hawthorne, CA On November 9, 2023, the Company sold the Sheraton Bucks County in Langhorne, Pennsylvania for $13.8 million in cash.
Below is a summary of the hotel properties securing the KEYS Pool A loan and KEYS Pool B loan: KEYS A Loan Pool Courtyard Columbus Tipton Lakes – Columbus, IN Courtyard Old Town – Scottsdale, AZ Residence Inn Hughes Center – Las Vegas, NV Residence Inn Phoenix Airport – Phoenix, AZ Residence Inn San Jose Newark – Newark, CA SpringHill Suites Manhattan Beach – Hawthorne, CA SpringHill Suites Plymouth Meeting – Plymouth Meeting, PA KEYS B Loan Pool Courtyard Basking Ridge – Basking Ridge, NJ Courtyard Newark Silicon Valley – Newark, CA Courtyard Oakland Airport – Oakland, CA Courtyard Plano Legacy Park – Plano, TX Residence Inn Plano – Plano, TX SpringHill Suites BWI Airport – Baltimore, MD TownePlace Suites Manhattan Beach – Hawthorne, CA We derecognized the hotel properties securing the KEYS Pool A and KEYS Pool B loans from our consolidated balance sheet in March 2024, when the receiver took control of the hotel properties, and accordingly recognized a gain of $133.9 million, which is included in “gain (loss) on derecognition of assets” in our consolidated statements of operations and recorded a contract asset of $378.2 million, which represented the liabilities we expect to be released from upon final resolution with the lenders on the KEYS Pool A and KEYS Pool B mortgage loans in exchange for the transfer of ownership of the respective hotel properties.
This increase is attributable to higher sales of food and beverage of $33.3 million at our comparable hotel properties and an increase of $3.2 million from our Hotel Acquisition partially offset by a decrease of $245,000 from our Hotel Dispositions.
This decrease is attributable to $20.1 million from our Hotel Dispositions and $2.0 million from the KEYS A and B properties that went into receivership, partially offset by higher sales of food and beverage of $1.4 million at our comparable hotel properties and $413,000 from the Le Meridien that opened in August 2024.
We recorded no impairment charges for the years ended December 31, 2023, 2022 and 2021. See note 5 to our consolidated financial statements. Income Taxes —As a REIT, we generally are not subject to federal corporate income tax on the portion of our net income (loss) that does not relate to taxable REIT subsidiaries.
Income Taxes —As a REIT, we generally are not subject to federal corporate income tax on the portion of our net income (loss) that does not relate to taxable REIT subsidiaries. However, Ashford TRS is treated as a TRS for U.S. federal income tax purposes.
The Company repaid approximately $19 million of principal on its mortgage loan partially secured by the hotel property. On March 12, 2024, we entered into the Third Amended and Restated Advisory Agreement with Ashford LLC (the “Third Amended and Restated Advisory Agreement”).
The Company repaid approximately $19 million of principal on its mortgage loan partially secured by the hotel property.
On March 6, 2024, the Company completed the sale of the Residence Inn in Salt Lake City, Utah for approximately $19.2 million.
As a result the contract asset and corresponding indebtedness associated with hotels in receivership and accrued interest associated with hotels in receivership were reduced for the amounts attributable to each hotel. On March 6, 2024, the Company completed the sale of the Residence Inn in Salt Lake City, Utah for approximately $19.2 million.
Income tax expense decreased $5.4 million, from $6.3 million in 2022 to $900,000 in 2023. This decrease was primarily due to a decrease in the profitability of our Ashford TRS entities in 2023 compared to 2022. (Income) Loss from Consolidated Entities Attributable to Noncontrolling Interests .
Income tax expense increased $97,000, from $900,000 in 2023 to $997,000 in 2024. This increase was primarily due to gains on property dispositions in 2024. (Income) Loss from Consolidated Entities Attributable to Noncontrolling Interests . Our noncontrolling interest partners in consolidated entities were allocated a loss of $4.0 million in 2024.
During a cash trap, certain disbursements from these hotel operating cash receipts would require consent of our lenders. At December 31, 2023, 26 of our hotels were in cash traps and approximately $3.9 million of our restricted cash was subject to these cash traps.
During a cash trap, certain disbursements from these hotel operating cash receipts would require consent of our lenders.
The increase was primarily due to a $110.3 million increase in interest expense at our comparable hotel properties primarily due to higher interest rates on our variable rate debt, lower credits to interest expense of $18.7 million related to the amortization credit of default interest and late charges recorded on mortgage loans previously in default, $6.0 million primarily attributable to the amortization of the Oaktree debt discount and higher interest expense in 2023 of $4.5 million from our Hotel Dispositions primarily attributable default interest and late charges.
The decrease was primarily due to lower cash interest expense and amortization of loan costs of $33.0 million on the Oaktree loan attributable to a lower principal balance and the Oaktree deferred loan costs becoming fully amortized, $24.8 million from our Hotel Dispositions and lower default interest and late charges recorded on mortgage loans previously in default of $5.0 million.
ASU 2023-07 is effective for our annual periods beginning January 1, 2024, and for interim periods beginning January 1, 2025, with early adoption permitted. We are currently evaluating the potential effect that the updated standard will have on our financial statement disclosures.
We are currently evaluating the potential effect that the updated standard will have on our financial statement disclosures.
As of December 31, 2023, we have $824.2 million of mortgage loans that have final maturities in 2024 (of which $180.7 million relates to KEYS Pool A and $174.4 million relates to KEYS Pool B). We hold extension options for the remaining mortgage loans due in the next twelve months.
As of December 31, 2024, we have $1.8 billion of mortgage loans that have final maturities in 2025. We hold extension options for the remaining mortgage loans due in the next twelve months. Additionally, we have amortization payments of approximately $133,000 due in the next twelve months.
Indirect expenses and management fees increased $48.1 million in 2023 compared to 2022, comprised of an increase of $45.9 million from our comparable hotel properties and $4.7 million from our Hotel Acquisition partially offset by $2.4 million from our Hotel Dispositions and $101,000 from the Stirling hotel properties. Property Taxes, Insurance and Other.
Indirect expenses and management fees decreased $52.1 million in 2024 compared to 2023, comprised of a decrease of $50.6 million from our Hotel Dispositions, $30.3 million from the KEYS A and B properties that went into receivership partially offset by an increase of $25.7 million from our comparable hotel properties, $500,000 from the Stirling hotel properties and $2.6 million from the Le Meridien that opened in August 2024.
This increase is attributable to higher rooms revenue of $84.7 million at our comparable hotel properties as our hotel properties recover from the effects of the COVID-19 pandemic and an increase of $8.2 million from our Hotel Acquisition partially offset by a decrease of $7.6 million from our Hotel Dispositions and $85,000 from the Stirling hotel properties.
This decrease is attributable to $111.0 million from our Hotel Dispositions, $69.5 million from the KEYS A and B properties that went into receivership partially offset by higher rooms revenue of $8.4 million at our comparable hotel properties, $509,000 from the Stirling hotel properties and $2.2 million from the Le Meridien that opened in August 2024.
EXECUTIVE OVERVIEW General As of December 31, 2023, our portfolio consisted of 90 consolidated operating hotel properties which represents 20,549 total rooms.
EXECUTIVE OVERVIEW General As of December 31, 2024, our portfolio consisted of 68 consolidated operating hotel properties, which represent 17,051 total rooms. One consolidated operating hotel property, which represents 188 total rooms is owned through a 29.3% investment in a consolidated entity.
This increase is attributable to higher other revenue of $6.1 million from our comparable hotel properties as our hotel properties recover from the effects of the COVID-19 pandemic, an increase of $356,000 from our Hotel Acquisition and $43,000 from the Stirling hotel properties, partially offset by a decrease of $1.1 million from our Hotel Dispositions.
This decrease is attributable to $10.4 million from our Hotel Dispositions, $2.8 million from the KEYS A and B properties that went into receivership, and $7,000 from the Stirling properties, partially offset by higher other revenue of $8.1 million from our comparable hotel properties and $140,000 from the Le Meridien that opened in August 2024.
In 2023 and 2022 we recorded miscellaneous income of $310,000 and $415,000, respectively. Interest Expense and Amortization of Discounts and Loan Costs. Interest expense and amortization of discounts and loan costs increased $139.2 million, or 61.3%, to $366.1 million in 2023 compared to 2022.
The decrease in interest income in 2024 was primarily attributable to lower excess cash balances in 2024 compared to 2023. Other Income (Expense). In 2024 and 2023 we recorded miscellaneous income of $108,000 and $310,000, respectively. Interest Expense and Amortization of Discounts and Loan Costs.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeAt December 31, 2023, our total indebtedness of $3.4 billion included $3.1 billion of variable-rate debt. The impact on our results of operations of a 25-basis point change in interest rate on the outstanding balance of variable-rate debt at December 31, 2023 would be approximately $7.7 million per year.
Biggest changeAt December 31, 2024, our total indebtedness of $2.7 billion included $2.5 billion of variable-rate debt. The impact on our results of operations of a 25-basis point change in interest rate on the outstanding balance of variable-rate debt at December 31, 2024 would be approximately $6.4 million per year.
As a result, the ultimate realized gain or loss with respect to interest rate fluctuations will depend on exposures that arise during the period, the hedging strategies in place at the time, and the related interest rates. 65
As a result, the ultimate realized gain or loss with respect to interest rate fluctuations will depend on exposures that arise during the period, the hedging strategies in place at the time, and the related interest rates. 70
As the information presented above includes only those exposures that existed at December 31, 2023, it does not consider exposures or positions that could arise after that date. Accordingly, the information presented herein has limited predictive value.
As the information presented above includes only those exposures that existed at December 31, 2024, it does not consider exposures or positions that could arise after that date. Accordingly, the information presented herein has limited predictive value.
However, we currently have various interest rate caps in place that limit this exposure. Interest rate changes have no impact on the remaining $338.8 million of fixed-rate debt. The above amounts were determined based on the impact of hypothetical interest rates on our borrowings and assume no changes in our capital structure.
However, we currently have various interest rate caps in place that limit this exposure. Interest rate changes have no impact on the remaining $159.6 million of fixed-rate debt. The above amounts were determined based on the impact of hypothetical interest rates on our borrowings and assume no changes in our capital structure.

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