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Table of Contents


 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2020

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _________ to _________
Commission File Number 001-32514
DIAMONDROCK HOSPITALITY COMPANY
(Exact Name of Registrant as Specified in Its Charter)
Maryland
 
20-1180098
(State of Incorporation)
 
(I.R.S. Employer Identification No.)
 
 
 
 
 
2 Bethesda Metro Center, Suite 1400,
 Bethesda,
Maryland
 
20814
(Address of Principal Executive Offices)
 
(Zip Code)

(240744-1150
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Securities Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common stock, $0.01 par value per share
DRH
New York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
 
Accelerated filer
 
Non-accelerated filer
 
Smaller reporting company
Emerging growth company
 
 
 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No
The registrant had 199,516,435 shares of its $0.01 par value common stock outstanding as of August 7, 2020.
 



Table of Contents
INDEX
 
 
 
Page No.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 



Table of Contents


PART I. FINANCIAL INFORMATION
Item I.
Financial Statements

DIAMONDROCK HOSPITALITY COMPANY

CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share amounts)

 
June 30, 2020
 
December 31, 2019
ASSETS
(unaudited)
 
 
Property and equipment, net
$
3,029,905

 
$
3,026,769

Right-of-use assets
97,242

 
98,145

Restricted cash
36,359

 
57,268

Due from hotel managers
62,129

 
91,207

Prepaid and other assets
24,795

 
29,853

Cash and cash equivalents
87,837

 
122,524

Total assets
$
3,338,267

 
$
3,425,766

LIABILITIES AND EQUITY
 
 
 
Liabilities:
 
 
 
Mortgage and other debt, net of unamortized debt issuance costs
$
605,034

 
$
616,329

Unsecured term loans, net of unamortized debt issuance costs
398,267

 
398,770

Senior unsecured credit facility
148,985


75,000

Total debt
1,152,286


1,090,099

 
 
 
 
Deferred income related to key money, net
11,144

 
11,342

Unfavorable contract liabilities, net
66,412

 
67,422

Deferred rent
54,186

 
52,012

Lease liabilities
103,588

 
103,625

Due to hotel managers
80,524

 
72,445

Distributions declared and unpaid
138

 
25,815

Accounts payable and accrued expenses
63,424

 
81,944

Total liabilities
1,531,702

 
1,504,704

Equity:
 
 
 
Preferred stock, $0.01 par value; 10,000,000 shares authorized; no shares issued and outstanding

 

Common stock, $0.01 par value; 400,000,000 shares authorized; 199,516,435 and 200,207,795 shares issued and outstanding at June 30, 2020 and December 31, 2019, respectively
1,995

 
2,002

Additional paid-in capital
2,082,601

 
2,089,349

Accumulated deficit
(286,198
)
 
(178,861
)
Total stockholders’ equity
1,798,398

 
1,912,490

Noncontrolling interests
8,167

 
8,572

Total equity
1,806,565

 
1,921,062

Total liabilities and equity
$
3,338,267

 
$
3,425,766


The accompanying notes are an integral part of these consolidated financial statements.

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DIAMONDROCK HOSPITALITY COMPANY

CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(unaudited)
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
 
 
 
 
 
 
 
 
2020
 
2019
 
2020
 
2019
Revenues:
 
 
 
 
 
 
 
Rooms
$
13,099

 
$
181,629

 
$
124,900

 
$
318,282

Food and beverage
3,038

 
60,714

 
46,943

 
111,179

Other
4,242

 
15,575

 
18,531

 
30,832

Total revenues
20,379

 
257,918

 
190,374

 
460,293

Operating Expenses:
 
 
 
 
 
 
 
Rooms
7,143

 
42,922

 
42,796

 
81,741

Food and beverage
4,715

 
36,456

 
35,802

 
69,606

Management fees
(78
)
 
7,317

 
3,399

 
12,657

Franchise fees
793

 
7,208

 
6,589

 
13,067

Other hotel expenses
40,720

 
81,319

 
118,563

 
156,798

Depreciation and amortization
28,783

 
29,335

 
58,883

 
58,331

Corporate expenses
6,826

 
7,403

 
12,383

 
14,467

Business interruption insurance income

 

 

 
(8,822
)
Total operating expenses, net
88,902

 
211,960

 
278,415

 
397,845

Interest and other (income) expense, net
(150
)
 
(105
)
 
249

 
(408
)
Interest expense
11,629

 
12,418

 
32,847

 
24,080

Total other expenses, net
11,479

 
12,313

 
33,096

 
23,672

(Loss) income before income taxes
(80,002
)
 
33,645

 
(121,137
)
 
38,776

Income tax benefit (expense)
6,615

 
(4,571
)
 
13,058

 
(722
)
Net (loss) income
(73,387
)
 
29,074

 
(108,079
)
 
38,054

Less: Net loss (income) attributable to noncontrolling interests
605

 
(114
)
 
738

 
(149
)
Net (loss) income attributable to common stockholders
$
(72,782
)
 
$
28,960

 
$
(107,341
)
 
$
37,905

(Loss) earnings per share:
 
 
 
 
 
 
 
Net (loss) income per share available to common stockholders—basic
$
(0.36
)
 
$
0.14

 
$
(0.53
)
 
$
0.19

Net (loss) income per share available to common stockholders—diluted
$
(0.36
)
 
$
0.14

 
$
(0.53
)
 
$
0.19












The accompanying notes are an integral part of these consolidated financial statements.

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DIAMONDROCK HOSPITALITY COMPANY

CONSOLIDATED STATEMENTS OF EQUITY
(in thousands, except share and per share amounts)
(unaudited)


Common Stock











Shares

Par Value

Additional Paid-In Capital

Accumulated Deficit

Total Stockholders' Equity

Noncontrolling Interests

Total Equity
Balance at December 31, 2019
200,207,795


$
2,002


$
2,089,349


$
(178,861
)

$
1,912,490


$
8,572


$
1,921,062

Share-based compensation
154,981


1


189




190


238


428

Redemption of Operating Partnership units

 

 
(15
)
 

 
(15
)
 
(186
)
 
(201
)
Common stock repurchased and retired
(1,119,438
)

(11
)

(9,989
)



(10,000
)



(10,000
)
Net loss






(34,559
)

(34,559
)

(133
)

(34,692
)
Balance at March 31, 2020
199,243,338


$
1,992


$
2,079,534


$
(213,420
)

$
1,868,106


$
8,491


$
1,876,597

Share-based compensation
137,616

 
2

 
2,054

 
4

 
2,060

 
281

 
2,341

Sale of common stock in follow-on offerings, net of placement fees and expenses of $10
135,481

 
1

 
1,013

 

 
1,014

 

 
1,014

Net loss

 

 

 
(72,782
)
 
(72,782
)
 
(605
)
 
(73,387
)
Balance at June 30, 2020
199,516,435

 
$
1,995

 
$
2,082,601

 
$
(286,198
)
 
$
1,798,398

 
$
8,167

 
$
1,806,565

 
Common Stock
 
 
 
 
 
 
 
 
 
 
 
Shares
 
Par Value
 
Additional Paid-In Capital
 
Accumulated Deficit
 
Total Stockholders' Equity
 
Noncontrolling Interests
 
Total Equity
Balance at December 31, 2018
204,536,485

 
$
2,045

 
$
2,126,472

 
$
(245,620
)
 
$
1,882,897

 
$
7,696

 
$
1,890,593

Cumulative effect of ASC 842 adoption

 

 

 
(15,286
)
 
(15,286
)
 

 
(15,286
)
Distributions on common stock/units ($0.125 per share)

 

 
113

 
(25,483
)
 
(25,370
)
 
(134
)
 
(25,504
)
Share-based compensation
55,916

 
1

 
1,073

 

 
1,074

 
83

 
1,157

Common stock repurchased and retired
(3,143,922
)
 
(31
)
 
(29,967
)
 

 
(29,998
)
 

 
(29,998
)
Net income

 

 

 
8,945

 
8,945

 
35

 
8,980

Balance at March 31, 2019
201,448,479

 
$
2,015

 
$
2,097,691

 
$
(277,444
)
 
$
1,822,262

 
$
7,680

 
$
1,829,942

Distributions on common stock/units ($0.125 per share)

 

 
120

 
(25,365
)
 
(25,245
)
 
(134
)
 
(25,379
)
Share-based compensation
33,396

 
1

 
1,955

 

 
1,956

 
249

 
2,205

Common stock repurchased and retired
(1,004,589
)
 
(11
)
 
(10,021
)
 

 
(10,032
)
 

 
(10,032
)
Net income

 

 

 
28,960

 
28,960

 
114

 
29,074

Balance at June 30, 2019
200,477,286

 
$
2,005

 
$
2,089,745

 
$
(273,849
)
 
$
1,817,901

 
$
7,909

 
$
1,825,810


The accompanying notes are an integral part of these consolidated financial statements.

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DIAMONDROCK HOSPITALITY COMPANY

CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
 
Six Months Ended June 30,
 
2020
 
2019
 
 
Cash flows from operating activities:
 
 
 
Net (loss) income
$
(108,079
)
 
$
38,054

Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities:
 
 
 
Depreciation and amortization
58,883

 
58,331

Corporate asset depreciation as corporate expenses
117

 
110

Non-cash lease expense and other amortization
3,458

 
3,501

Non-cash interest rate swap fair value adjustment
12,312

 
1,647

Amortization of debt issuance costs
935

 
960

Amortization of deferred income related to key money
(198
)
 
(198
)
Share-based compensation
3,898

 
3,659

Changes in assets and liabilities:
 
 
 
Prepaid expenses and other assets
(5,346
)
 
(6,289
)
Due to/from hotel managers
37,172

 
(20,446
)
Accounts payable and accrued expenses
(23,292
)
 
1,573

Net cash (used in) provided by operating activities
(20,140
)
 
80,902

Cash flows from investing activities:
 
 
 
Capital expenditures for operating hotels
(31,830
)
 
(47,043
)
Capital expenditures for Frenchman's Reef
(37,689
)
 
(42,245
)
Acquisition of interest in the land underlying the Shorebreak Hotel
(1,585
)
 

Proceeds from property insurance
10,663

 

Net cash used in investing activities
(60,441
)
 
(89,288
)
Cash flows from financing activities:
 
 
 
Scheduled mortgage debt principal payments
(7,082
)
 
(6,863
)
Proceeds from sale of common stock, net
1,015

 

Proceeds from mortgage debt
48,000

 

Repayments of mortgage debt
(52,517
)
 

Draws on senior unsecured credit facility
400,000

 
105,000

Repayments of senior unsecured credit facility
(326,015
)
 

Payment of financing costs
(1,410
)
 

Distributions on common stock and units
(25,557
)
 
(51,558
)
Repurchase of common stock
(10,000
)
 
(40,030
)
Redemption of Operating Partnership units
(201
)
 

Shares redeemed to satisfy tax withholdings on vested share-based compensation
(1,248
)
 
(296
)
Net cash provided by financing activities
24,985

 
6,253

Net decrease in cash, cash equivalents, and restricted cash
(55,596
)
 
(2,133
)
Cash, cash equivalents, and restricted cash at beginning of period
179,792

 
91,598

Cash, cash equivalents, and restricted cash at end of period
$
124,196

 
$
89,465









The accompanying notes are an integral part of these consolidated financial statements.

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DIAMONDROCK HOSPITALITY COMPANY

CONSOLIDATED STATEMENTS OF CASH FLOWS - (CONTINUED)
(in thousands)
(unaudited)


Supplemental Disclosure of Cash Flow Information:
 
Six Months Ended June 30,
 
2020
 
2019
Cash paid for interest
$
21,846

 
$
21,409

Cash (refunded) paid for income taxes, net
$
(218
)
 
$
1,160

Capitalized interest
$
2,136

 
$
499

Non-cash cumulative effect of ASC 842 accounting standard adoption
$

 
$
15,286

Non-cash Investing and Financing Activities:
 
 
 
Unpaid dividends and distributions declared
$
138

 
$
25,667


The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the consolidated balance sheets to the amount shown within the consolidated statements of cash flows:

 
June 30, 2020
 
December 31, 2019
Cash and cash equivalents
$
87,837

 
$
122,524

Restricted cash (1)
36,359

 
57,268

Total cash, cash equivalents and restricted cash
$
124,196

 
$
179,792

_____________________________

(1)
Restricted cash primarily consists of reserves for replacement of furniture and fixtures held by our hotel managers and cash held in escrow pursuant to lender requirements.


























The accompanying notes are an integral part of these consolidated financial statements.

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DIAMONDROCK HOSPITALITY COMPANY

Notes to the Consolidated Financial Statements
(Unaudited)

1.
Organization

DiamondRock Hospitality Company (the “Company” or “we”) is a lodging-focused real estate company that owns a portfolio of premium hotels and resorts. Our hotels are concentrated in key gateway cities and in destination resort locations, and the majority of our hotels are operated under a brand owned by one of the leading global lodging brand companies (Marriott International, Inc. (“Marriott”) or Hilton Worldwide (“Hilton”)). We are an owner, as opposed to an operator, of the hotels in our portfolio. As an owner, we receive all of the operating profits or losses generated by our hotels after we pay fees to the hotel managers, which are based on the revenues and profitability of the hotels.

As of June 30, 2020, we owned 31 hotels with 10,102 guest rooms, located in the following markets: Atlanta, Georgia; Boston, Massachusetts (2); Burlington, Vermont; Charleston, South Carolina; Chicago, Illinois (2); Denver, Colorado (2); Fort Lauderdale, Florida; Fort Worth, Texas; Huntington Beach, California; Key West, Florida (2); New York, New York (4); Phoenix, Arizona; Salt Lake City, Utah; San Diego, California; San Francisco, California (2); Sedona, Arizona (2); Sonoma, California; South Lake Tahoe, California; Washington, D.C. (2); St. Thomas, U.S. Virgin Islands; and Vail, Colorado. Our hotel located in St. Thomas, U.S. Virgin Islands, Frenchman's Reef & Morning Star Beach Resort (“Frenchman's Reef”) is closed as a result of damage caused by Hurricane Irma in September 2017.

We conduct our business through a traditional umbrella partnership real estate investment trust, or UPREIT, in which our hotel properties are owned by our operating partnership, DiamondRock Hospitality Limited Partnership, or subsidiaries of our operating partnership. The Company is the sole general partner of our operating partnership and owns 99.6% of the limited partnership units (“common OP units”) of our operating partnership. The remaining 0.4% of the common OP units are held by third parties and executive officers of the Company. See Note 5 for additional disclosures related to common OP units.

COVID-19 Pandemic and Management's Response

In March 2020, the World Health Organization declared the novel coronavirus, or COVID-19, a global pandemic. Since then, the virus has continued to spread throughout the United States and globally. As a result of the pandemic, government mandates and health official recommendations, the demand for lodging has materially decreased. Throughout March and April 2020, we suspended operations at 20 of our hotels. As of June 30, 2020, we had reopened 12 of those hotels. Subsequent to June 30, 2020, we reopened three additional hotels. The hotels that remained open and the hotels that have reopened are operating at historically low occupancy levels. As a result, the COVID-19 pandemic has had a material adverse impact on our operations and financial results for the three and six months ended June 30, 2020. The severity and duration of the COVID-19 pandemic cannot be reasonably estimated at this time, but we expect it will continue to have a material adverse impact on our results of operations, financial position and cash flow in 2020.

We have taken aggressive steps in order to mitigate the ongoing operational and financial impacts on our business. We drew down funds on our $400 million senior unsecured credit facility, suspended our quarterly dividend, canceled or deferred a significant portion of our capital expenditures planned for 2020, paused the reconstruction of Frenchman's Reef and reduced corporate expenses through decreases in executive compensation, employee headcount and other expenses. Additionally, in coordination with our hotel operators, we have developed and implemented action plans to significantly reduce operating costs at each of our hotels. On June 9, 2020, we executed amendments to the credit agreements for our $400 million senior unsecured credit facility and $400 million of unsecured term loans. The amendments provide a waiver of the quarterly-tested financial covenants beginning with the second quarter of 2020 through the first quarter of 2021 and certain other modifications to the covenants thereafter through the fourth quarter of 2021. Please see Note 8 for more information about these amendments.

As of June 30, 2020, the Company had unrestricted cash of $87.8 million and $251.0 million of borrowing capacity on our senior unsecured credit facility.

2.
Summary of Significant Accounting Policies

Basis of Presentation

Our financial statements include all of the accounts of the Company and its subsidiaries in accordance with U.S. GAAP. All intercompany accounts and transactions have been eliminated in consolidation. If the Company determines that it has an interest

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in a variable interest entity within the meaning of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 810, Consolidation, the Company will consolidate the entity when it is determined to be the primary beneficiary of the entity. Our operating partnership meets the criteria of a variable interest entity. The Company is the primary beneficiary and, accordingly, we consolidate our operating partnership.

In our opinion, the accompanying unaudited consolidated financial statements reflect all adjustments necessary to present fairly our financial position as of June 30, 2020, the results of our operations for the three and six months ended June 30, 2020 and 2019, the statements of equity for the three and six months ended June 30, 2020 and 2019, and the cash flows for the six months ended June 30, 2020 and 2019. Interim results are not necessarily indicative of full-year performance because of the impact of seasonal and short-term variations. We believe the disclosures made are adequate to prevent the information presented from being misleading. However, the unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto as of and for the year ended December 31, 2019, included in our Annual Report on Form 10-K filed on February 28, 2020.

Use of Estimates

The preparation of the financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Risks and Uncertainties

The state of the overall economy can significantly impact hotel operational performance and thus, impact our financial position. Should any of our hotels experience a significant decline in operational performance, it may affect our ability to make distributions to our stockholders and service debt or meet other financial obligations.

Currently, one of the most significant risks and uncertainties is the potential length and severity of the ongoing COVID-19 pandemic. The COVID-19 pandemic has reduced travel and adversely affected the hospitality industry in general. We believe that the actual and threatened spread of COVID-19 globally or in the regions in which we operate, or the future widespread outbreak of infectious or contagious disease, will continue to reduce national and international travel in general. The extent to which our business will continue to be affected by COVID-19 will largely depend on future developments, which we cannot predict with a high degree of confidence, and its impact on customer travel, including the duration of the outbreak, the continued spread and treatment of COVID-19, new information and developments that may emerge concerning the severity of COVID-19 and the actions of governments and individuals to contain COVID-19 or mitigate its impact, as well as the effect of any relaxation of current restrictions, among others. To the extent that travel activity in the U.S. continues to be materially and adversely affected by COVID-19, the overall business and financial results of the hospitality industry, as well as the business and financial results of the Company, would similarly continue to be materially and adversely impacted. See Note 1 for additional disclosures related to COVID-19 and its impact on our Company.

Property and Equipment

Investment purchases of hotel properties, land, land improvements, building and furniture, fixtures and equipment and identifiable intangible assets that are not businesses are accounted for as asset acquisitions and recorded at relative fair value based upon total accumulated cost of the acquisition. Direct acquisition-related costs are capitalized as a component of the acquired assets. Property and equipment purchased after the hotel acquisition date is recorded at cost. Replacements and improvements are capitalized, while repairs and maintenance are expensed as incurred. Upon the sale or retirement of a fixed asset, the cost and related accumulated depreciation are removed from the Company’s accounts and any resulting gain or loss is included in the statements of operations.

Depreciation is computed using the straight-line method over the estimated useful lives of the assets, generally 5 to 40 years for buildings, land improvements, and building improvements and 1 to 10 years for furniture, fixtures and equipment. Leasehold improvements are amortized over the shorter of the lease term or the useful lives of the related assets.

We review our investments in hotel properties for impairment whenever events or changes in circumstances indicate that the carrying value of the hotel properties may not be recoverable. Events or circumstances that may cause a review include, but are not limited to, adverse changes in the demand for lodging at the properties, current or projected losses from operations, and an expectation that the property is more likely than not to be sold significantly before the end of its useful life. Management performs an analysis to determine if the estimated undiscounted future cash flows from operations and the proceeds from the

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ultimate disposition of a hotel, less costs to sell, exceed its carrying value. If the estimated undiscounted future cash flows are less than the carrying amount of the asset, an adjustment to reduce the carrying amount to the related hotel’s estimated fair market value is recorded and an impairment loss is recognized. As a result of the COVID-19 pandemic, we reviewed each of our hotel properties for impairment as of June 30, 2020 and concluded the carrying value of each of the hotel properties is recoverable. Due to the continuing effects of the pandemic, however, estimated future cash flows could further decline and result in the recognition of an impairment charge on one or more of our hotel properties in future periods.

We will classify a hotel as held for sale in the period that we have made the decision to dispose of the hotel, a binding agreement to purchase the property has been signed under which the buyer has committed a significant amount of nonrefundable cash and no significant financing or other contingencies exist which could cause the transaction to not be completed in a timely manner. If these criteria are met, we will record an impairment loss if the fair value less costs to sell is lower than the carrying amount of the hotel and related assets and will cease recording depreciation expense. We will classify the assets and related liabilities as held for sale on the balance sheet.

Cash and Cash Equivalents

We consider all highly liquid investments with an original maturity of three months or less to be cash equivalents.

Revenue Recognition

Revenues from operations of the hotels are recognized when the goods or services are provided. Revenues consist of room sales, food and beverage sales, and other hotel department revenues, such as telephone, parking, gift shop sales and resort fees. Rooms revenue is recognized over the length of stay that the hotel room is occupied by the customer. Food and beverage revenue is recognized at the point in time in which the goods and/or services are rendered to the customer, such as for restaurant dining services or banquet services. Other revenues are recognized at the point in time or over the time period that goods or services are provided to the customer. Certain ancillary services are provided by third parties and we assess whether we are the principal or agent in these arrangements. If we are the principal, we recognize revenue based upon the gross sales price.

Advance deposits are recorded as liabilities when a customer or group of customers provides a deposit for a future stay or banquet event at our hotels. Advance deposits are converted to revenue when the services are provided to the customer or when a customer with a noncancelable reservation fails to arrive for part or all of the reservation. Conversely, advance deposits are generally refundable upon guest cancellation of the related reservation within an established period of time prior to the reservation.

Earnings (Loss) Per Share

Basic earnings (loss) per share is calculated by dividing net income by the weighted-average number of common shares outstanding during the period. Diluted earnings (loss) per share is calculated by dividing net income (loss) by the weighted-average number of common shares outstanding during the period plus other potentially dilutive securities such as stock grants or shares issuable in the event of conversion of common OP units. No adjustment is made for shares that are anti-dilutive during a period.

Share-based Compensation

We account for share-based employee compensation using the fair value based method of accounting. We record the cost of awards with service or market conditions based on the grant-date fair value of the award. That cost is recognized over the period during which an employee is required to provide service in exchange for the award. No compensation cost is recognized for equity instruments for which employees do not render the requisite service.

Income Taxes

We account for income taxes using the asset and liability method. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to the differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities from a change in tax rates is recognized in earnings during the period in which the new rate is enacted. However, deferred tax assets are recognized only to the extent that it is more likely than not that they will be realized based on consideration of all available evidence, including the future reversals of existing taxable temporary differences, future projected taxable income and tax planning strategies. Valuation allowances are provided if, based upon the weight of the available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.


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We have elected to be treated as a real estate investment trust (“REIT”) under the provisions of the Internal Revenue Code of 1986, as amended, which requires that we distribute at least 90% of our taxable income annually to our stockholders and comply with certain other requirements. In addition to paying federal and state taxes on any retained income, we may be subject to taxes on “built-in gains” on sales of certain assets. Our taxable REIT subsidiaries will generally be subject to federal, state, local, and/or foreign income taxes.

In order for the income from our hotel property investments to constitute “rents from real properties” for purposes of the gross income tests required for REIT qualification, the income we earn cannot be derived from the operation of any of our hotels. Therefore, we lease each of our hotel properties to a wholly owned subsidiary of Bloodstone TRS, Inc., our taxable REIT subsidiary (“TRS”), except for Frenchman’s Reef, which is owned by a Virgin Islands corporation that we have elected to be treated as a TRS, and Cavallo Point, The Lodge at the Golden Gate (“Cavallo Point”), which is leased to a wholly owned subsidiary of the Company, which we have elected to be treated as a TRS.

We had no accruals for tax uncertainties as of June 30, 2020 and December 31, 2019.

Fair Value Measurements

In evaluating fair value, U.S. GAAP outlines a valuation framework and creates a fair value hierarchy that distinguishes between market assumptions based on market data (observable inputs) and a reporting entity’s own assumptions about market data (unobservable inputs). The hierarchy ranks the observability of inputs used to determine fair value, which are then classified and disclosed in one of the three categories. The three levels are as follows:

Level 1 - Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities
Level 2 - Inputs include quoted prices in active markets for similar assets and liabilities, quoted prices for identical
or similar assets in markets that are not active and model-derived valuations whose inputs are observable
Level 3 - Model-derived valuations with unobservable inputs

Intangible Assets and Liabilities

Intangible assets and liabilities are recorded on non-market contracts assumed as part of the acquisition of certain hotels. We review the terms of agreements assumed in conjunction with the purchase of a hotel to determine if the terms are favorable or unfavorable compared to an estimated market agreement at the acquisition date. Favorable contract assets or unfavorable contract liabilities are recorded at the acquisition date and amortized using the straight-line method over the term of the agreement. We do not amortize intangible assets with indefinite useful lives, but we review these assets for impairment annually or at interim periods if events or circumstances indicate that the asset may be impaired.

Comprehensive Income

We do not have any comprehensive income other than net income. If we have any comprehensive income in future periods, such that a statement of comprehensive income would be necessary, such statement will be reported as one statement with the consolidated statement of operations.

Derivative Instruments

In the normal course of business, we are exposed to the effects of interest rate changes. We may enter into derivative instruments, including interest rate swaps and caps, to manage or hedge interest rate risk. Derivative instruments are recorded at fair value on the balance sheet date. We have not elected hedge accounting treatment for the changes in the fair value of derivatives. Changes in the fair value of derivatives are recorded each period and are included in interest expense in the consolidated statements of operations.

Noncontrolling Interests

The noncontrolling interest is the portion of equity in our consolidated operating partnership not attributable, directly or indirectly, to the Company. Such noncontrolling interests are reported on the consolidated balance sheets within equity, separately from the Company’s equity. On the consolidated statements of operations, revenues, expenses and net income or loss from our less-than-wholly-owned operating partnership are reported within the consolidated amounts, including both the amounts attributable to the Company and noncontrolling interests. Income or loss is allocated to noncontrolling interests based on their weighted average ownership percentage for the applicable period. Consolidated statements of equity include beginning balances, activity for the period and ending balances for stockholders’ equity, noncontrolling interests and total equity.

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Restricted Cash

Restricted cash primarily consists of reserves for replacement of furniture and fixtures generally held by our hotel managers and cash held in escrow pursuant to lender requirements.

Debt Issuance Costs

Financing costs are recorded at cost as a component of the debt carrying amount and consist of loan fees and other costs incurred in connection with the issuance of debt. Amortization of debt issuance costs is computed using a method that approximates the effective interest method over the remaining life of the debt and is included in interest expense in the accompanying consolidated statements of operations. Debt issuance costs related to our Revolving Credit Facility (defined in Note 8) are included within prepaid and other assets on the accompanying consolidated balance sheets. These debt issuance costs are amortized ratably over the term of the Revolving Credit Facility, regardless of whether there are any outstanding borrowings, and the amortization is included in interest expense in the accompanying consolidated statements of operations.

Due to/from Hotel Managers

The due from hotel managers consists of hotel level accounts receivable, periodic hotel operating distributions receivable from managers and prepaid and other assets held by the hotel managers on our behalf. The due to hotel managers represents liabilities incurred by the hotel on behalf of us in conjunction with the operation of our hotels which are legal obligations of the Company.

Key Money

Key money received in conjunction with entering into hotel management or franchise agreements or completing specific capital projects is deferred and amortized over the term of the hotel management agreement, the term of the franchise agreement, or other systematic and rational period, if appropriate. Deferred key money is classified as deferred income in the accompanying consolidated balance sheets and amortized as an offset to management fees or franchise fees.

Leases

We determine if an arrangement is a lease or contains an embedded lease at inception. For agreements with both lease and nonlease components (e.g., common-area maintenance costs), we do not separate the nonlease components from the lease components, but account for these components as one. We determine the lease classification (operating or finance) at lease inception.

Right-of-use assets and lease liabilities are recognized based on the present value of the future lease payments over the lease term at the commencement date. The discount rate used to determine the present value of the lease payments is our incremental borrowing rate as of the lease commencement date, as the implicit rate is not readily determinable. The right-of-use assets also include any initial direct costs and any lease payments made at or before the commencement date, and is reduced for any unrestricted incentives received at or before the commencement date.

Options to extend or terminate the lease are included in the recognition of our right-of-use assets and lease liabilities when it is reasonably certain that we will exercise the option. Variable payments that are based on an index or a rate are included in the recognition of our right-of-use assets and lease liabilities using the index or rate at lease commencement; however, changes to these lease payments due to rate or index updates are recorded as rent expense in the period incurred. Contingent rentals based on a percentage of sales in excess of stipulated amounts are not included in the measurement of the lease liability and right-of-use asset but will be recognized as variable lease expense when they are incurred. Leases that contain provisions that increase the fixed minimum lease payments based on previously incurred variable lease payments related to performance will be remeasured, as these payments now represent an increase in the fixed minimum payments for the remainder of the lease term. However, leases with provisions that increase minimum lease payments based on changes in a reference index or rate (e.g. Consumer Price Index) will not be remeasured as such changes do not constitute a resolution of a contingency.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of our cash and cash equivalents. We maintain cash and cash equivalents with various financial institutions. We perform periodic evaluations of the relative credit standing of these financial institutions and limit the amount of credit exposure with any one institution.

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Segment Reporting

Each one of our hotels is an operating segment. We evaluate each of our properties on an individual basis to assess performance, the level of capital expenditures, and acquisition or disposition transactions. Our evaluation of individual properties is not focused on property type (e.g. urban, suburban, or resort), brand, geographic location, or industry classification.

We aggregate our operating segments using the criteria established by U.S. GAAP, including the similarities of our product offering, types of customers and method of providing service. All of our properties react similarly to economic stimulus, such as business investment, changes in Gross Domestic Product, and changes in travel patterns. As such, all our operating segments meet the aggregation criteria, resulting in a single reportable segment represented by our consolidated financial results.

Accounting for Impact of Natural Disasters

Assets destroyed or damaged as a result of natural disasters or other involuntary events are written off or reduced in carrying value to their salvage value. When recovery of all or a portion of the amount of property damage loss or other covered expenses through insurance proceeds is demonstrated to be probable, a receivable is recorded and offsets the loss or expense up to the amount of the total loss or expense. No gain is recorded until all contingencies related to the insurance claim have been resolved. Income resulting from business interruption insurance is not recognized until all contingencies related to the insurance recoveries are resolved.

Frenchman's Reef has been closed since September 2017, when the hotel was significantly damaged by Hurricane Irma. For the six months ended June 30, 2019, we recognized $8.8 million of business interruption insurance income related to Frenchman's Reef. We settled our insurance claim for Hurricane Irma in December 2019, and for the six months ended June 30, 2020, we did not recognize any business interruption insurance income.

3.
Property and Equipment

Property and equipment as of June 30, 2020 and December 31, 2019 consists of the following (in thousands):

 
June 30, 2020
 
December 31, 2019
Land
$
618,210

 
$
617,695

Land improvements
7,994

 
7,994

Buildings and site improvements
2,766,924

 
2,751,590

Furniture, fixtures and equipment
536,348

 
534,802

Construction in progress
171,205

 
126,464

 
4,100,681

 
4,038,545

Less: accumulated depreciation
(1,070,776
)
 
(1,011,776
)
 
$
3,029,905

 
$
3,026,769



On March 2, 2020, we acquired the remaining 4.5% interest in the land underlying the Shorebreak Hotel located in Huntington Beach, California, for a purchase price of $1.6 million. We now own 100% of the interest in the land underlying the hotel.

As of June 30, 2020 and December 31, 2019, we had accrued capital expenditures of $5.2 million and $13.1 million, respectively.

4. Leases

We are subject to operating leases, the most significant of which are ground leases. We are the lessee to ground leases under eight of our hotels and one parking garage as of June 30, 2020. The lease liabilities for our operating leases assume the exercise of all available extension options, as we believe they are reasonably certain to be exercised. As of June 30, 2020, our operating leases have a weighted-average remaining lease term of 66 years and a weighted-average discount rate of 5.77%.

The components of operating lease expense, which is included in other hotel expenses in our consolidated statements of operations, and cash paid for amounts included in the measurement of lease liabilities, are as follows (in thousands):

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Three Months Ended June 30,
 
Six Months Ended June 30,
 
 
2020
 
2019
 
2020
 
2019
Operating lease cost
 
$
2,763

 
$
2,832

 
$
5,571

 
$
5,582

Variable lease payments
 
$
2

 
$
489

 
$
239

 
$
826

Cash paid for amounts included in the measurement of operating lease liabilities

 
$
803

 
$
798

 
$
1,610

 
$
1,586



Maturities of lease liabilities are as follows (in thousands):
Year Ending December 31,
 
As of June 30, 2020
2020 (excluding the six months ended June 30, 2020)
 
$
1,604

2021
 
3,496

2022
 
3,940

2023
 
3,997

2024
 
3,976

Thereafter
 
759,124

Total lease payments
 
776,137

Less imputed interest
 
(672,549
)
Total lease liabilities
 
$
103,588



5. Equity

Common Shares

We are authorized to issue up to 400 million shares of common stock, $0.01 par value per share. Each outstanding share of common stock entitles the holder to one vote on all matters submitted to a vote of stockholders. Holders of our common stock are entitled to receive dividends out of assets legally available for the payment of dividends when authorized by our board of directors.

We have an “at-the-market” equity offering program (the “ATM Program”), pursuant to which we may issue and sell shares of our common stock from time to time, having an aggregate offering price of up to $200 million. During the three and six months ended June 30, 2020, we sold 135,481 shares of common stock at an average price of $7.56 per share for proceeds of $1.0 million, net of approximately $10 thousand in fees paid to the applicable sales agent. As of August 7, 2020, shares of common stock having an aggregate offering price of up to $199.0 million remained available for sale under the ATM Program.

Our board of directors has approved a share repurchase program (the “Share Repurchase Program”) authorizing us to repurchase shares of our common stock having an aggregate price of up to $250 million. Repurchases under the Share Repurchase Program are made in open market or privately negotiated transactions as permitted by federal securities laws and other legal requirements. This authority may be exercised from time to time and in such amounts as market conditions warrant, and subject to regulatory considerations. The timing, manner, price and actual number of shares repurchased will depend on a variety of factors, including stock price, corporate and regulatory requirements, market conditions, and other corporate liquidity requirements and priorities. The Share Repurchase Program may be suspended or terminated at any time without prior notice. During the first quarter of 2020, we repurchased 1,119,438 shares of our common stock at an average price of $8.91 per share for a total purchase price of $10.0 million. These shares were all repurchased prior to March 4, 2020. We retired all repurchased shares on their respective settlement dates. We have suspended share repurchases and, pursuant to our Amended Credit Agreements (as defined in Note 8), may not repurchase shares while our financial covenant requirements are waived on our senior unsecured credit facility and unsecured term loans. As of August 7, 2020, we have $165.2 million of authorized capacity remaining under our share repurchase program.

Preferred Shares

We are authorized to issue up to 10 million shares of preferred stock, $0.01 par value per share. Our board of directors is required to set for each class or series of preferred stock the terms, preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends or other distributions, qualifications, and terms or conditions of redemption. As of June 30, 2020 and December 31, 2019, there were no shares of preferred stock outstanding.

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Operating Partnership Units

In connection with our acquisition of Cavallo Point in December 2018, we issued 796,684 common OP units to third parties, otherwise unaffiliated with the Company, at $11.76 per unit. Each common OP unit is redeemable at the option of the holder. Holders of common OP units have certain redemption rights, which enable them to cause our operating partnership to redeem their units in exchange for cash per unit equal to the market price of our common stock, at the time of redemption, or, at our option, for shares of our common stock on a one-for-one basis, subject to adjustment upon the occurrence of stock splits, mergers, consolidations or similar pro-rata share transactions.

Long-Term Incentive Partnership units (“LTIP units”), which are also referred to as profits interest units, may be issued to eligible participants under the 2016 Plan (as defined in Note 6 below) for the performance of services to or for the benefit of our operating partnership. LTIP units are a class of partnership unit in our operating partnership and will receive, whether vested or not, the same per-unit distributions as the outstanding common OP units, which equal per-share dividends on shares of our common stock. Initially, LTIP units have a capital account balance of zero, do not receive an allocation of operating income (loss), and do not have full parity with common OP units with respect to liquidating distributions. If such parity is reached, vested LTIP units are converted into an equal number of common OP units, and thereafter will possess all of the rights and interests of common OP units, including the right to exchange the common OP units for cash per unit equal to the market price of our common stock, at the time of redemption, or, at our option, for shares of our common stock on a one-for-one basis, subject to adjustment upon the occurrence of stock splits, mergers, consolidations or similar pro-rata share transactions. See Note 6 for additional disclosures related to LTIP units.

There were 855,191 and 792,131 common OP units held by unaffiliated third parties and executive officers of the Company as of June 30, 2020 and December 31, 2019, respectively. There were 243,809 and 244,366 LTIP units outstanding as of June 30, 2020 and December 31, 2019, respectively. All vested LTIP units have reached economic parity with common OP units and have been converted into common OP units.

Dividends and Distributions

We have paid the following dividends to holders of our common stock and distributions to holders of common OP units and LTIP units during 2020:
Payment Date
 
Record Date
 
Dividend
per Share
January 13, 2020
 
January 2, 2020
 
$
0.125



Our board of directors suspended the quarterly dividend commencing with the first quarter dividend that would have been paid in April 2020. We expect to pay a dividend in January 2021 sufficient to cover 100% of our taxable income, if any, for the year ending December 31, 2020.

6. Stock Incentive Plans

We are authorized to issue up to 6,082,664 shares of our common stock under our 2016 Equity Incentive Plan (the “2016 Plan”), of which we have issued or committed to issue 3,053,153 shares as of June 30, 2020.

Restricted Stock Awards

Restricted stock awards issued to our officers and employees generally vest over a three-year period from the date of the grant based on continued employment. We measure compensation expense for the restricted stock awards based upon the fair market value of our common stock at the date of grant. Compensation expense is recognized on a straight-line basis over the vesting period and is included in corporate expenses in the accompanying consolidated statements of operations. A summary of our restricted stock awards from January 1, 2020 to June 30, 2020 is as follows:

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Number of
Shares
 
Weighted-
Average Grant
Date Fair
Value
Unvested balance at January 1, 2020
472,999

 
$
10.40

Granted
343,410

 
9.41

Vested
(229,664
)
 
10.55

Forfeited
(13,683
)
 
9.99

Unvested balance at June 30, 2020
573,062

 
$
9.76



The remaining share awards are expected to vest as follows: 8,202 shares during 2020, 247,019 shares during 2021, 141,836 during 2022 and 176,005 during 2023. As of June 30, 2020, the unrecognized compensation cost related to restricted stock awards was $4.6 million and the weighted-average period over which the unrecognized compensation expense will be recorded is approximately 27 months. We recorded $0.6 million of compensation expense related to restricted stock awards for the three months ended June 30, 2020 and 2019. We recorded $1.3 million and $1.4 million of compensation expense related to restricted stock awards for the six months ended June 30, 2020 and 2019, respectively.
Performance Stock Units

Performance stock units (“PSUs”) are restricted stock units that vest three years from the date of grant. Each executive officer is granted a target number of PSUs (the “PSU Target Award”). The actual number of shares of common stock issued to each executive officer is based on the Company's achievement of certain performance targets. Fifty percent of the PSUs are based on relative total stockholder return and 50% on hotel market share improvement. The achievement of certain levels of total stockholder return relative to the total stockholder return of a peer group of publicly-traded lodging REITs is measured over a three-year performance period. There is no payout of shares of our common stock if our total stockholder return falls below the 30th percentile of the total stockholder returns of the peer group. The maximum number of shares of common stock issued to an executive officer is equal to 150% of the PSU Target Award and is earned if our total stockholder return is equal to or greater than the 75th percentile of the total stockholder returns of the peer group. The number of PSUs earned is limited to 100% of the PSU Target Award if the Company's total stockholder return is negative for the three-year performance period. The improvement in market share for each of our hotels is measured over a three-year performance period based on a report prepared for each hotel by STR Global, a well-recognized and universally accepted benchmarking service for the hospitality industry.

We measure compensation expense for the PSUs based upon the fair market value of the award at the grant date. Compensation expense is recognized on a straight-line basis over the three-year performance period and is included in corporate expenses in the accompanying consolidated statements of operations. The grant date fair value of the portion of the PSUs based on our relative total stockholder return is determined using a Monte Carlo simulation performed by a third-party valuation firm. The grant date fair value of the portion of the PSUs based on hotel market share improvement is the closing price of our common stock on the grant date.

On February 25, 2020, our board of directors granted 352,035 PSUs to our executive officers. The grant date fair value of the portion of the PSUs based on our relative total stockholder return was $8.52 using the assumptions of volatility of 21.4% and a risk-free rate of 1.16%. The grant date fair value of the portion of the PSUs based on hotel market share was $9.58, which was the closing stock price of our common stock on such date.

A summary of our PSUs from January 1, 2020 to June 30, 2020 is as follows:
 
Number of
Target Units
 
Weighted-
Average Grant
Date Fair
Value
Unvested balance at January 1, 2020
796,532

 
$
11.16

Granted
352,035

 
9.02

Additional units from dividends
9,556

 
10.42

Vested (1)
(245,937
)
 
11.00

Unvested balance at June 30, 2020
912,186

 
$
9.63


______________________
(1)
The number of shares of common stock earned for the PSUs vested in 2020 was equal to 123.07% of the PSU Target Award.

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The remaining unvested PSUs are expected to vest as follows: 290,927 units during 2021, 269,224 units during 2022 and 352,035 during 2023. The number of shares earned upon vesting is subject to the attainment of the performance goals described above. As of June 30, 2020, the unrecognized compensation cost related to the PSUs was $4.8 million and is expected to be recognized on a straight-line basis over a weighted average period of 26 months. We recorded $0.7 million of compensation expense related to the PSUs for each of the three months ended June 30, 2020 and 2019. We recorded $1.4 million and $1.3 million of compensation expense related to the PSUs for the six months ended June 30, 2020 and 2019, respectively.

LTIP Units

LTIP units are designed to offer executives a long-term incentive comparable to restricted stock, while allowing them to enjoy a more favorable income tax treatment. Each LTIP unit awarded is deemed equivalent to an award of one share of common stock reserved under the 2016 Plan. At the time of award, LTIP units do not have full economic parity with common OP units, but can achieve such parity over time upon the occurrence of specified events in accordance with partnership tax rules.
On February 25, 2020, our board of directors granted 80,898 LTIP units to certain of our executive officers. Other executive officers of the Company elected to receive restricted stock in lieu of LTIP units. The grant date fair value of the LTIP unit was the closing price of our common stock on the grant date.

A summary of our LTIP units from January 1, 2020 to June 30, 2020 is as follows:

 
Number of Units
 
Weighted-
Average Grant
Date Fair
Value
Unvested balance at January 1, 2020
244,366

 
$
10.65

Granted
80,898

 
9.58

Vested (1)
(81,455
)
 
10.65

Unvested balance at June 30, 2020
243,809

 
$
10.29

______________________
(1)
As of June 30, 2020, all vested LTIP units have been converted to common OP units.

The remaining unvested LTIP units are expected to vest as follows: 108,421 units during 2021, 108,422 units during 2022 and 26,966 units during 2023. As of June 30, 2020, of the 325,264 LTIP units granted, 81,455 LTIP units have vested.

As of June 30, 2020, the unrecognized compensation cost related to LTIP unit awards was $2.1 million and the weighted-average period over which the unrecognized compensation expense will be recorded is approximately 24 months. We recorded $0.3 million and $0.2 million of compensation expense related to LTIP unit awards for the three months ended June 30, 2020 and 2019, respectively. We recorded $0.5 million and $0.3 million of compensation expense related to LTIP unit awards for the six months ended June 30, 2020 and 2019, respectively.

7. Earnings (Loss) Per Share

Basic earnings (loss) per share is calculated by dividing net income (loss) available to common stockholders by the weighted-average number of common shares outstanding. Diluted earnings (loss) per share is calculated by dividing net income (loss) available to common stockholders that has been adjusted for dilutive securities, by the weighted-average number of common shares outstanding including dilutive securities.

Unvested share-based awards that contain nonforfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities and are included in the computation of earnings per share pursuant to the two-class method. Accordingly, distributed and undistributed earnings attributable to unvested share-based compensation (participating securities) have been excluded, as applicable, from net income or loss available to common stockholders used in the basic and diluted earnings per share calculations.

The following is a reconciliation of the calculation of basic and diluted earnings (loss) per share (in thousands, except share and per share data):

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Three Months Ended June 30,
 
Six Months Ended June 30,
 
2020
 
2019
 
2020
 
2019
Numerator:
 
 
 
 
 
 
 
Net (loss) income attributable to common stockholders
$
(72,782
)
 
$
28,960

 
$
(107,341
)
 
$
37,905

Dividends declared on unvested share-based compensation

 
(35
)
 

 
(70
)
Net (loss) income available to common stockholders
$
(72,782
)
 
$
28,925

 
$
(107,341
)
 
$
37,835

Denominator:
 
 
 
 
 
 
 
Weighted-average number of common shares outstanding—basic
200,797,317

 
202,405,507

 
201,002,576

 
202,610,178

Effect of dilutive securities:
 
 
 
 
 
 
 
Unvested restricted common stock

 
68,995

 

 
58,084

Shares related to unvested PSUs

 
426,137

 

 
438,228

Weighted-average number of common shares outstanding—diluted
200,797,317

 
202,900,639

 
201,002,576

 
203,106,490

Earnings (loss) per share:


 
 
 
 
 
 
Net (loss) income per share available to common stockholders—basic
$
(0.36
)
 
$
0.14

 
$
(0.53
)
 
$
0.19

Net (loss) income per share available to common stockholders—diluted
$
(0.36
)
 
$
0.14

 
$
(0.53
)
 
$
0.19



For the six months ended June 30, 2020, 171,458 of unvested PSUs were excluded from diluted weighted-average common shares outstanding, as their effect would be anti-dilutive.

The common OP units held by the noncontrolling interest holders have been excluded from the denominator of the diluted earnings (loss) per share calculation as there would be no effect on the amounts since the common OP units' share of income or loss would also be added or subtracted to derive net income (loss) available to common stockholders.

8. Debt

The following table sets forth information regarding the Company’s debt as of June 30, 2020 and December 31, 2019 (dollars in thousands):

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Principal Balance as of
Loan
 
Interest Rate as of June 30, 2020
 
Maturity Date
 
June 30, 2020
 
December 31, 2019
Salt Lake City Marriott Downtown mortgage loan (repaid on June 25, 2020)
 
4.25%
 
November 2020
 
$

 
$
53,273

Salt Lake City Marriott Downtown mortgage loan
 
LIBOR + 3.25% (1)
 
January 2022 (2)
 
48,000

 

Westin Washington, D.C. City Center mortgage loan
 
3.99%
 
January 2023
 
59,427

 
60,550

The Lodge at Sonoma, a Renaissance Resort & Spa mortgage loan
 
3.96%
 
April 2023
 
26,675

 
26,963

Westin San Diego mortgage loan
 
3.94%
 
April 2023
 
61,064

 
61,851

Courtyard Manhattan / Midtown East mortgage loan
 
4.40%
 
August 2024
 
80,330

 
81,107

Renaissance Worthington mortgage loan
 
3.66%
 
May 2025
 
80,067

 
80,904

JW Marriott Denver at Cherry Creek mortgage loan
 
4.33%
 
July 2025
 
60,659

 
61,253

Westin Boston Waterfront Hotel mortgage loan
 
4.36%
 
November 2025
 
188,804

 
190,725

New Market Tax Credit loan (3)
 
5.17%
 
December 2020
 
2,943

 
2,943

Unamortized debt issuance costs
 
 
 
 
 
(2,935
)
 
(3,240
)
Total mortgage and other debt, net of unamortized debt issuance costs
 
 
 
 
 
605,034

 
616,329

 
 
 
 
 
 
 
 
 
Unsecured term loan
 
LIBOR + 2.35% (4)
 
October 2023
 
50,000

 
50,000

Unsecured term loan
 
LIBOR + 2.35% (5)
 
July 2024
 
350,000

 
350,000

Unamortized debt issuance costs
 
 
 
 
 
(1,733
)
 
(1,230
)
Unsecured term loans, net of unamortized debt issuance costs
 
 
 
 
 
398,267

 
398,770

 
 
 
 
 
 
 
 
 
Senior unsecured credit facility
 
LIBOR + 2.40% (6)
 
July 2023 (7)
 
148,985

 
75,000