Company: PEB
Filing Date: 2025-11-05
Form Type: 10-Q
Source: 0001474098-25-000138
Chunk: 4

Company: Pebblebrook Hotel Trust
Filing Date: 2025-11-05
Form: 10-Q
Item: Item 2
Chunk 4
---
 real estate related depreciation and amortization, gains (losses) from sales of real estate, impairments of real estate assets (including impairment of real estate related joint ventures), the cumulative effect of changes in accounting principles and adjustments for unconsolidated affiliates. Historical cost accounting for real estate assets implicitly assumes that the value of real estate assets diminishes predictably over time. Since real estate values instead have historically risen or fallen with market conditions, most industry investors consider presentations of operating results for real estate companies that use historical cost accounting to be insufficient by themselves. By excluding the effect of real estate related depreciation and amortization including our share of the joint venture depreciation and amortization, gains (losses) from sales of real estate and impairments of real estate assets (including impairment of real estate related joint ventures), all of which are based on historical cost accounting and which may be of lesser significance in evaluating current performance, we believe that FFO provides investors a useful financial measure to evaluate our operating performance. 

Adjusted FFO is defined as FFO, as adjusted for transaction costs, non-cash ground rent on operating and capital leases, management/franchise contract transition costs, interest expense adjustment for acquired liabilities, finance lease adjustment, non-cash amortization of acquired intangibles, gain on insurance settlement, early extinguishment of debt, amortization of share-based compensation expense, issuance costs of redeemed preferred shares, repurchase of preferred shares, hurricane-related costs, non-cash interest expense and deferred tax asset provision (benefit). We believe Adjusted FFO provides useful supplemental information regarding our ongoing operating performance. 

The following table reconciles net income (loss) to FFO, FFO available to common share and unit holders and Adjusted FFO available to common share and unit holders for the three and nine months ended September 30, 2025 and 2024 (in thousands):

 For the three months ended September 30,For the nine months ended September 30, 2025202420252024Net income (loss)$(32,353)$45,145 $(45,248)$49,864 Adjustments:Real estate depreciation and amortization57,544 57,466 172,615 171,807 Impairment46,497 1,908 46,497 1,908 FFO$71,688 $104,519 $173,864 $223,579 Distribution to preferred shareholders and unit holders(11,776)(11,795)(