Market Newsdesk

February 21, 2023 4:36 pm

U.S. Global Investors Receives Expected Nasdaq Notice Regarding Late Filing of Form 10-Q

San Antonio, TX, Feb. 21, 2023 (GLOBE NEWSWIRE) — U.S. Global Investors, Inc. (NASDAQ: GROW) (the “Company”), a registered investment advisory firm with longstanding experience in global markets and specialized sectors, today announces that it received a standard notification letter dated February 16, 2023, (the “Nasdaq notice” or “notice”) from the Nasdaq Listing Qualifications Department of Nasdaq notifying the Company that it is no longer in compliance with Nasdaq Listing Rule 5250 (c)(1), which requires timely filing of all required financial reports with the U. S. Securities and Exchange Commission.

The Nasdaq notice has no immediate impact on the listing or trading of the Company’s common stock on the Nasdaq Capital Market. The notice provides that the Company has until April 17, 2023 (that is, 60 calendar days from the date of the Nasdaq notice) to submit to Nasdaq a plan (the “Compliance Plan”), to regain compliance with the Nasdaq Listing Rules. If Nasdaq accepts the Compliance Plan, Nasdaq can grant the Company an exception to extend for an additional 180 calendar days from the extended due date of the Form 10-Q filing date, or August 14, 2023, to regain compliance. The Company is working diligently to file its Form 10-Q.

This announcement is made in compliance with the Nasdaq Listing Rule 5810(b), which requires prompt disclosure of receipt of a notification of deficiency.

About U.S. Global Investors, Inc.

The story of U.S. Global Investors goes back more than 50 years when it began as an investment club. Today, U.S. Global Investors, Inc. (www.usfunds.com) is a registered investment adviser that focuses on niche markets around the world. Headquartered in San Antonio, Texas, the Company provides investment advisory services to U.S. Global Investors Funds and U.S. Global ETFs.

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Holly Schoenfeldt
U.S. Global Investors, Inc.
210.308.1268
[email protected]

February 21, 2023 4:36 pm

CDW to Participate in the Morgan Stanley Technology, Media & Telecom Conference

CDW to Participate in the Morgan Stanley Technology, Media & Telecom Conference

LINCOLNSHIRE, Ill.–(BUSINESS WIRE)–
CDW Corporation (Nasdaq: CDW), a leading multi-brand provider of information technology solutions to business, government, education and healthcare customers in the United States, the United Kingdom and Canada, today announced that Albert J. Miralles, senior vice president and chief financial officer, CDW, will participate in a question and answer session at the Morgan Stanley Technology, Media & Telecom Conference to be held at the Palace Hotel in San Francisco, California on Tuesday, March 7, 2023, at 3:30 p.m. CT/1:30 p.m. PT. The session will be webcast live on investor.cdw.com. An archived copy of the webcast will be available on the same website for 180 days following the completion of the event.

About CDW

CDW Corporation (Nasdaq: CDW) is a leading multi-brand provider of information technology solutions to business, government, education and healthcare customers in the United States, the United Kingdom and Canada. A Fortune 500 company and member of the S&P 500 Index, CDW was founded in 1984 and employs approximately 15,100 coworkers. For the year ended December 31, 2022, CDW generated Net sales of approximately $24 billion. For more information about CDW, please visit www.CDW.com.

CDWPR-FI

View source version on businesswire.com: https://www.businesswire.com/news/home/20230221005395/en/

Investor Inquiries

Steven O’Brien

Vice President, Investor Relations

(847) 968-0238

[email protected]

Media Inquiries

Sara Granack

Vice President, Corporate Communications

(847) 419-7411

[email protected]

KEYWORDS: Illinois United States North America

INDUSTRY KEYWORDS: Professional Services Technology Data Analytics Software Networks Hardware

MEDIA:

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February 21, 2023 4:34 pm

Pebblebrook Hotel Trust Reports 2022 Results

Pebblebrook Hotel Trust Reports 2022 Results

BETHESDA, Md.–(BUSINESS WIRE)–
Pebblebrook Hotel Trust (NYSE: PEB):

2022 FINANCIAL RESULTS	Net loss of ($85.0) million Same-Property Total RevPAR⁽¹⁾ increased 65.1% vs. 2021 and 93.0% recovered to 2019 Same-Property EBITDA⁽¹⁾ $391.0 million, 123.0% above 2021 and 84.5% recovered to 2019 Adjusted EBITDAre⁽¹⁾ $356.7 million, vs. $99.8 million in 2021 Adjusted FFO⁽¹⁾ per diluted share $1.69 vs. ($0.23) in 2021

Q4 FINANCIAL HIGHLIGHTS	Net loss: ($39.9) million Same-Property Total RevPAR⁽¹⁾ up 27.9% vs. 2021 and 93.9% recovered to 2019 Same-Property ADR⁽¹⁾, exceeded 2021 by 10.8% and 2019 by 18.4% Same-Property EBITDA⁽¹⁾ $65.2 million, 23.3% above 2021 and 73.1% recovered to 2019 Adjusted EBITDAre⁽¹⁾ $57.4 million, 30% above 2021 Adjusted FFO⁽¹⁾ per diluted share $0.20 vs. $0.08 in 2021

HOTEL OPERATING TRENDS	Leisure demand remains robust, with ADR premiums exceeding the prior year and pre-pandemic levels Business transient and group demand continue to recover, and more strongly in urban markets; group pace year-over-year is up significantly for Q1 and all of 2023 Severe winter storms across the country in late December and early January increased cancellations, negatively impacting short-term operating results Have not yet seen any slowdown in demand as a result of macro-economic concerns

PORTFOLIO UPDATES & REPOSITIONINGS	In 2022, acquired the Inn on Fifth Naples and Newport Harbor Island Resort for $330.0 million and sold 4 urban hotels generating $260.9 million in proceeds Completed $108.4 million of capital investments throughout 2022, including the redevelopment, repositioning and transformations of Hotel Vitale into the 1 Hotel San Francisco and Grafton on Sunset into Hotel Ziggy on the Sunset Strip Executed a contract to sell The Heathman Hotel Portland for $45.0 million, which is targeted to close shortly in Q1 2023

Q1 2023 OUTLOOK	Net loss: ($48.6) to ($43.6) million Same-Property RevPAR⁽¹⁾ +15.0 % to +18.0% vs. 2022 Adjusted EBITDAre⁽¹⁾ $46.5 to $51.5 million vs. $46.5 million in 2022 Adjusted FFO⁽¹⁾ per diluted share $0.06 to $0.10, vs. $0.11 in 2022

⁽¹⁾See tables later in this press release for a description of Same-Property information and reconciliations from net income (loss) to non-GAAP financial measures used in the table above and elsewhere in this press release.

“Our portfolio continued to make significant strides in 2022 in its recovery from the pandemic. Our unique lifestyle resorts performed extremely well, with Same-Property EBITDA far exceeding 2019 despite occupancy still a long way from being fully recovered. The rate premiums at our resorts achieved throughout 2022 are continuing into 2023, which is very encouraging. Our urban market hotels saw an accelerating recovery throughout the year, led by our hotels in Boston, San Diego, and Los Angeles. We are seeing further signs of recovery in Washington, DC, San Francisco, Portland, and Chicago, with our urban hotels generating healthy year-over-year increases in revenues and profitability. Despite the concerns with the macro environment, we remain cautiously optimistic in an improving operating environment as we kick off 2023. We also made important progress in our extensive property redevelopment program, completing the transformations of 1 Hotel San Francisco and Hotel Ziggy on the Sunset Strip and commencing the conversion and redevelopment of Hotel Solamar into Margaritaville San Diego Gaslamp Quarter, as well as several other major redevelopment projects that we expect will deliver outsized gains in revenue, EBITDA and valuation in future years.”

–Jon E. Bortz, Chairman, President, and Chief Executive Officer of Pebblebrook Hotel Trust

Fourth Quarter and Year-to-Date Highlights

	Fourth Quarter			Year Ended December 31,
Same-Property and Corporate Highlights	2022	2021 (‘22 vs. ’21 growth)	2019 (‘22 vs.’19 growth)	2022	2021 (‘22 vs.’21 growth)	2019 (‘22 vs.’19 growth)
	($ in millions except per share and RevPAR data)
Net income (loss)	($39.9)	($42.8)	$19.6	($85.0)	($186.4)	$115.7


Same-Property Room Revenues⁽¹⁾	$197.5	$157.3	$213.7	$895.9	$536.4	$972.1
Same-Property Room Revenues variance		25.6%	(7.6%)		67.0%	(7.8%)

Same-Property Total Revenues⁽¹⁾	$310.6	$242.8	$330.2	$1,368.3	$828.9	$1,468.7
Same-Property Total Revenues variance		27.9%	(5.9%)		65.1%	(6.8%)

Same-Property Total Expenses⁽¹⁾	$245.4	$190.0	$241.0	$977.3	$653.6	$1,005.8
Same-Property Total Expenses variance		29.2%	1.8%		49.5%	(2.8%)

Same-Property EBITDA⁽¹⁾	$65.2	$52.9	$89.2	$391.0	$175.3	$462.9
Same-Property EBITDA variance		23.3%	(26.9%)		123.0%	(15.5%)

Adjusted EBITDAre⁽¹⁾	$57.4	$44.0	$102.3	$356.7	$99.8	$486.9
Adjusted EBITDAre variance		30.3%	(43.9%)		257.6%	(26.7%)

Adjusted FFO⁽¹⁾	$25.9	$11.0	$73.4	$221.6	($30.5)	$352.4
Adjusted FFO per diluted share⁽¹⁾	$0.20	$0.08	$0.56	$1.69	($0.23)	$2.69
Adjusted FFO per diluted share variance		150.0%	(64.3%)		NM	(37.2%)

	2022 Monthly Results
Same-Property Portfolio⁽²⁾	Jan	Feb	Mar	Apr	May	Jun	Jul	Aug	Sep	Oct	Nov	Dec
	($ in millions except ADR and RevPAR data)
Occupancy	34%	50%	62%	68%	67%	73%	74%	71%	73%	73%	59%	48%
ADR	$269	$308	$305	$319	$314	$323	$334	$309	$318	$310	$280	$267
RevPAR	$91	$153	$188	$218	$210	$236	$246	$219	$234	$226	$166	$129
Total Revenues	$57.0	$84.9	$116.2	$128.3	$129.4	$138.1	$142.3	$128.2	$133.4	$131.6	$95.5	$83.5
Total Revenues growth rate (‘22 vs. ‘19)	(44%)	(21%)	(9%)	(3%)	(6%)	(1%)	4%	(2%)	5%	(1%)	(10%)	(8%)
EBITDA	($3.1)	$20.5	$38.8	$46.6	$42.9	$49.3	$50.4	$37.4	$43.0	$41.2	$17.4	$6.7
Hotel EBITDA growth rate (’22 vs. ’19)	(115%)	(29%)	(9%)	1%	(11%)	(6%)	2%	(13%)	1%	(12%)	(38%)	(53%)

	NM = Not Meaningful

(1)	See tables later in this press release for a description of same-property information and reconciliations from net income (loss) to non-GAAP financial measures, including Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”), EBITDA for Real Estate (“EBITDAre”), Adjusted EBITDAre, Funds from Operations (“FFO”), FFO per share, Adjusted FFO and Adjusted FFO per share.

	For the details as to which hotels are included in Same-Property Room Revenues, Total Revenues, Expenses and EBITDA appearing in the table above and elsewhere in this press release, refer to the Same-Property Statistical Data table footnotes later in this press release.

	Adjusted EBITDAre, Adjusted FFO and Adjusted FFO per share exclude the amortization of share-based compensation expense. Historical (2021 and 2019 comparable periods) results of such non-GAAP financial measures have been adjusted to reflect the exclusion.

(2)	Includes information for all of the hotels the Company owned as of December 31, 2022, except 1 Hotel San Francisco (which is excluded from January-December given the property’s closure for renovation), Inn on Fifth (which is excluded from January-March given the property’s acquisition on May 11), Gurney’s Newport Resort & Marina (which is excluded from January-June given the property’s acquisition on June 23) and LaPlaya Beach Resort & Club (which is excluded from October-December, given the property’s closure following Hurricane Ian). Excludes information for the hotels the Company has sold during 2022: The Marker San Francisco from April-December (sold on June 28), Sofitel Philadelphia at Rittenhouse Square from July-December (sold on August 2), Hotel Spero from July-December (sold on August 25), and Hotel Vintage Portland from July-December (sold September 14).

“December performed slightly better than November, despite the severe winter storms during the holidays, indicating that overall travel demand continues to recover, despite macro-economic concerns,” continued Mr. Bortz. “For the fourth quarter, compared to 2019, Same-Property Total Revenues were off by 5.9%, with ADR up 18.4%. Same-Property EBITDA compared to 2019 was off 26.9%, partly due to more than $1 million of negative impact from the winter storms at the end of December. In addition, the closure of LaPlaya Beach Resort & Club (“LaPlaya”) in Naples, Florida in late September 2022, due to repairs and remediation from Hurricane Ian, negatively impacted Same-Property RevPAR by approximately 150 basis points and Same-Property EBITDA by more than $12.0 million. On the labor side, our hotel teams have made tremendous gains in hiring managers and hourly employees to fill open positions across our portfolio. While this has increased our fixed cost base, it will allow our properties to operate at higher occupancy levels as hotel demand continues to recover and strengthen in 2023.”

Update on Impact from Hurricane Ian

The Company continues to complete significant repairs and rebuilding at the 189-room LaPlaya Beach Resort & Club, and the property was fully re-energized and reconnected to the permanent electricity grid in late January. The resort’s Bay Tower partially reopened in late January 2023, and the Gulf Tower is expected to partially reopen shortly, barring any issues that remain out of our control that could delay this reopening. The property’s Beach House is forecasted to be fully remediated and restored by the fourth quarter of this year, but delays may further impact this timeline.

The Company anticipates all operational disruption will be covered under the Company’s business interruption and property insurance programs, net of deductibles. A preliminary business interruption settlement of a minimum of $7.2 million for the fourth quarter of 2022 with the Company’s insurance providers is anticipated and is included in the Company’s Q1 2023 outlook. Pebblebrook expects to record additional business interruption settlements in 2023 as these are determined and finalized with its insurance providers.

Capital Investments and Strategic Property Redevelopments

In the fourth quarter of 2022, the Company completed $40.2 million of capital investments throughout its portfolio. The Company completed $108.4 million of capital improvements and projects in 2022.

Since 2018, the Company has invested $567 million across its portfolio, including approximately $230 million in redevelopment projects expected to generate healthy increases in market share, revenues, and cash flow as these properties stabilize, similar to prior transformations.

The Company expects to invest $145.0 to $155.0 million in capital improvements during 2023, which includes completing the redevelopment and repositioning projects at Solamar Hotel (to be converted to Margaritaville Hotel San Diego Gaslamp Quarter), Hilton San Diego Gaslamp Quarter, Jekyll Island Club Resort, Viceroy Santa Monica Hotel, Estancia La Jolla Hotel & Spa, the four guesthouses at Southernmost Beach Resort, as well as the completion of the development of a new outdoor venue and 11 additional alternative lodging units at Skamania Lodge.

Update on Strategic Dispositions

The Company completed four hotel dispositions in 2022 totaling $260.9 million of proceeds. The Company has executed a contract to sell The Heathman Hotel in Portland, Oregon for $45.0 million. The sale of The Heathman Hotel is subject to normal closing conditions, and the Company offers no assurances that this sale will be completed on these terms or at all. The sale is targeted to be completed shortly. Since 2020, the Company has sold 11 urban hotels, including the upcoming anticipated sale of The Heathman Hotel, and acquired 6 leisure-focused resort properties, substantially transforming the Company’s portfolio.

Common and Preferred Share Repurchases

Since late October of 2022, the Company has repurchased 5.5 million common shares, or over 4 percent of the Company’s previously outstanding shares, at an average price of $15.12 per share, a 51% discount to the midpoint of the Company’s most recently published estimated Net Asset Value (“NAV”).

During the fourth quarter, in a single unsolicited transaction, the Company also repurchased 1.0 million shares of its Series H preferred shares for $16.00 per share, a 36% discount to the $25.00 liquidation value per share.

On February 17, 2023 the Company’s board of trustees authorized an additional $150 million common share repurchase program. As a result, the Company currently has a combined $224 million available under its common share repurchase programs. The Company’s board of trustees also authorized a $100 million preferred share repurchase program. This new repurchase program applies to all of the Company’s outstanding series of preferred equity shares. The repurchase programs may be suspended or discontinued at any time, and the Company is not obligated to repurchase any shares.

Balance Sheet and Liquidity

As of December 31, 2022, the Company had $52.3 million of consolidated cash, cash equivalents and restricted cash, in addition to $637.4 million of undrawn availability on its senior unsecured revolving credit facility, for total liquidity of $689.7 million. The Company had $2.4 billion in consolidated debt and convertible notes at an effective weighted-average interest rate of 3.5 percent. $1.9 billion, or 79% of the Company’s total outstanding debt and convertible notes, was at an effective weighted-average fixed interest rate of 2.7 percent, and $0.5 billion, or 21% percent, was at a weighted-average floating rate of 6.3 percent. In January, in a very attractive window in the market, the Company entered into an additional $400 million in swaps for 2- and 3-year maturities at 3.2% and 3.0%, respectively, effectively replacing an equivalent amount maturing in 2023.

Common and Preferred Dividends

On December 15, 2022, the Company declared a quarterly cash dividend of $0.01 per share on its common shares and a regular quarterly cash dividend for the following preferred shares of beneficial interest.

$0.39844 per 6.375% Series E Cumulative Redeemable Preferred Share;
$0.39375 per 6.3% Series F Cumulative Redeemable Preferred Share;
$0.39844 per 6.375% Series G Cumulative Redeemable Preferred Share; and
$0.35625 per 5.7% Series H Cumulative Redeemable Preferred Share.

Update on Curator Hotel & Resort Collection

Curator Hotel & Resort Collection (“Curator”) is a distinct collection of experientially focused small brands and independent lifestyle hotels and resorts worldwide founded by Pebblebrook and several industry-leading independent lifestyle hotel operators. As of December 31, 2022, Curator had 97 member hotels. In the fourth quarter of 2022, Curator strengthened its roster with eight new member hotels. As of December 31, 2022, Curator had 100 master service agreements with preferred vendor partners, providing Curator member hotels with preferred pricing, enhanced operating terms, and early access to curated new technologies.

Q1 2023 Outlook

Based on current trends and assuming no material disruptions to travel caused by the COVID-19 pandemic or worsening macro-economic conditions, the Company’s outlook for Q1 2023 is as follows:

	Q1 2023 Outlook
	Low	High
	($ and shares/units in millions, except per-share and RevPAR data)
Net loss	($48.6)	($43.6)

Adjusted EBITDAre	$46.5	$51.5

Adjusted FFO	$7.3	$12.3
Adjusted FFO per diluted share	$0.06	$0.10

This Q1 2023 Outlook is based, in part, on the following estimates and assumptions:

Same-Property RevPAR	$168	$172
Same-Property RevPAR variance vs. 2022	15.0%	18.0%
Same-Property RevPAR variance vs. 2019	(8.5%)	(6.1%)

Same-Property EBITDA	$50.7	$55.7
Same-Property EBITDA variance vs. 2022	3.0%	13.1%
Same-Property EBITDA variance vs. 2019	(35.6%)	(29.2%)

The Company’s outlook incorporates the estimated negative impact of displaced revenues and EBITDA associated with the ongoing redevelopments and transformations of Solamar Hotel (conversion to Margaritaville Hotel San Diego Gaslamp Quarter), Hilton San Diego Gaslamp Quarter, Estancia La Jolla Hotel & Spa, Viceroy Santa Monica, Jekyll Island Club Resort, and a small renovation project at The Nines Portland. Same-Property RevPAR growth is expected to be negatively impacted by these major transformation projects in the first quarter by 225 to 350 basis points, and Same-Property EBITDA is expected to be reduced by $4.5 million to $6.5 million.

The first quarter outlook also incorporates an estimated $7.2 million for the preliminary business interruption settlement relating to lost income from the fourth quarter of 2022. This amount affects the Company’s Adjusted EBITDAre, Adjusted FFO, and net loss.

Year End 2022 Earnings Call

The Company will conduct its quarterly analyst and investor conference call on Wednesday, February 22, 2023, at 9:00 AM ET. Please dial (877) 407-3982 approximately ten minutes before the call begins to participate. Additionally, a live webcast of the conference call will be available through the Investor Relations section of www.pebblebrookhotels.com. To access the webcast, click on https://investor.pebblebrookhotels.com/news-and-events/webcasts/default.aspx ten minutes before the conference call. A replay of the conference call webcast will be archived and available online.

About Pebblebrook Hotel Trust

Pebblebrook Hotel Trust (NYSE: PEB) is a publicly traded real estate investment trust (“REIT”) and the largest owner of urban and resort lifestyle hotels and resorts in the United States. The Company owns 51 hotels and resorts, totaling approximately 12,800 guest rooms across 15 urban and resort markets. For more information, visit www.pebblebrookhotels.com and follow us at @PebblebrookPEB.

This press release contains certain “forward-looking statements” made pursuant to the safe harbor provisions of the Private Securities Reform Act of 1995. Forward-looking statements are generally identifiable by the use of forward-looking terminology such as “may,” “will,” “should,” “potential,” “intend,” “expect,” “seek,” “anticipate,” “estimate,” “approximately,” “believe,” “could,” “project,” “predict,” “forecast,” “continue,” “assume,” “plan,” references to “outlook” or other similar words or expressions. Forward-looking statements are based on certain assumptions and can include future expectations, future plans and strategies, financial and operating projections and forecasts and other forward-looking information and estimates. Examples of forward-looking statements include the following: descriptions of the Company’s plans or objectives for future capital investment projects, operations or services; forecasts of the Company’s future economic performance; forecasts of hotel industry performance; statements regarding expectations of hotel dispositions; and descriptions of assumptions underlying or relating to any of the foregoing expectations including assumptions regarding the timing of their occurrence. These forward-looking statements are subject to various risks and uncertainties, many of which are beyond the Company’s control, which could cause actual results to differ materially from such statements. These risks and uncertainties include, but are not limited to, the state of the U.S. economy and the supply of hotel properties, and other factors as are described in greater detail in the Company’s filings with the SEC, including, without limitation, the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. Unless legally required, the Company disclaims any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.

For further information about the Company’s business and financial results, please refer to the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors” sections of the Company’s filings with the U.S. Securities and Exchange Commission, including, but not limited to, its Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, copies of which may be obtained at the Investor Relations section of the Company’s website at www.pebblebrookhotels.com.

All information in this press release is as of February 21, 2023. The Company undertakes no duty to update the statements in this press release to conform the statements to actual results or changes in the Company’s expectations.

For additional information or to receive press releases via email, please visit our website at www.pebblebrookhotels.com

Pebblebrook Hotel Trust
Consolidated Balance Sheets
*($ in thousands, except share and per-share data)*
	December 31, 2022			December 31, 2021
	December 31, 2022			December 31, 2021
ASSETS
Assets:
Investment in hotel properties, net	$	5,874,876		$	6,079,333
Hotels held for sale		44,861			–
Cash and cash equivalents		41,040			58,518
Restricted cash		11,229			33,729
Hotel receivables (net of allowance for doubtful accounts of $431 and $1,142, respectively)		45,258			37,045
Prepaid expenses and other assets		116,276			52,565
Total assets	$	6,133,540		$	6,261,190



LIABILITIES AND EQUITY

Liabilities:
Unsecured revolving credit facilities	$	–		$	–
Unsecured term loans, net of unamortized deferred financing costs		1,372,057			1,427,256
Convertible senior notes, net of unamortized debt premium and discount and deferred financing costs		746,326			745,401
Senior unsecured notes, net of unamortized deferred financing costs		49,920			49,838
Mortgage loans, net of unamortized debt discount and deferred financing costs		218,990			219,393
Accounts payable, accrued expenses and other liabilities		250,518			250,584
Lease liabilities – operating leases		320,402			319,426
Deferred revenues		73,603			69,064
Accrued interest		4,535			4,567
Liabilities related to hotels held for sale		428			–
Distribution payable		12,218			11,756
Total liabilities		3,048,997			3,097,285
Commitments and contingencies

Shareholders’ Equity:

Preferred shares of beneficial interest, $0.01 par value (liquidation preference $715,000
and $740,000 at December 31, 2022 and December 31, 2021, respectively), 100,000,000 shares
authorized; 28,600,000 shares issued and outstanding at December 31, 2022 and 29,600,000
shares issued and outstanding at December 31, 2021		286			296
Common shares of beneficial interest, $0.01 par value, 500,000,000 shares authorized;
126,345,293 shares issued and outstanding at December 31, 2022 and 130,813,750 shares issued
and outstanding at December 31, 2021		1,263			1,308
Additional paid-in capital		4,182,359			4,268,042
Accumulated other comprehensive income (loss)		35,724			(19,442	)
Distributions in excess of retained earnings		(1,223,117	)		(1,094,023	)
Total shareholders’ equity		2,996,515			3,156,181
Non-controlling interests		88,028			7,724
Total equity		3,084,543			3,163,905
Total liabilities and equity	$	6,133,540		$	6,261,190

Pebblebrook Hotel Trust
Consolidated Statements of Operations
*($ in thousands, except share and per-share data)*

	Three months ended December 31,						Twelve months ended December 31,
		2022			2021			2022			2021
	*(Unaudited)*
Revenues:
Room	$	202,939		$	158,577		$	910,936		$	483,191
Food and beverage		85,474			62,625			346,702			157,848
Other operating		31,193			26,075			134,253			92,005
Total revenues	$	319,606		$	247,277		$	1,391,891		$	733,044

Expenses:
Hotel operating expenses:
Room	$	58,890		$	41,328		$	225,992		$	127,105
Food and beverage		63,684			43,807			243,543			111,928
Other direct and indirect		106,622			83,478			413,939			257,547
Total hotel operating expenses		229,196			168,613			883,474			496,580
Depreciation and amortization		59,837			58,615			239,583			224,251
Real estate taxes, personal property taxes, property insurance, and ground rent		28,016			27,445			126,134			111,675
General and administrative		9,512			11,363			39,187			38,166
Transaction costs		99			37			430			100
Impairment and other losses		3,763			–			89,882			14,856
(Gain) loss on sale of hotel properties		–			–			(6,194	)		(64,729	)
Other operating expenses		959			485			4,673			1,936
Total operating expenses		331,382			266,558			1,377,169			822,835
Operating income (loss)		(11,776	)		(19,281	)		14,722			(89,791	)
Interest expense		(29,235	)		(23,568	)		(99,988	)		(96,633	)
Other		406			28			562			113
Income (loss) before income taxes		(40,605	)		(42,821	)		(84,704	)		(186,311	)
Income tax (expense) benefit		738			(1	)		(277	)		(61	)
Net income (loss)		(39,867	)		(42,822	)		(84,981	)		(186,372	)
Net income (loss) attributable to non-controlling interests		831			(429	)		2,190			(1,514	)
Net income (loss) attributable to the Company		(40,698	)		(42,393	)		(87,171	)		(184,858	)
Distributions to preferred shareholders		(11,043	)		(11,344	)		(45,074	)		(42,105	)
Issuance costs of redeemed preferred shares		8,186			(12	)		8,186			(8,055	)
Net income (loss) attributable to common shareholders	$	(43,555	)	$	(53,749	)	$	(124,059	)	$	(235,018	)


Net income (loss) per share available to common shareholders, basic	$	(0.34	)	$	(0.41	)	$	(0.95	)	$	(1.80	)
Net income (loss) per share available to common shareholders, diluted	$	(0.34	)	$	(0.41	)	$	(0.95	)	$	(1.80	)

Weighted-average number of common shares, basic		129,116,171			130,813,750			130,453,944			130,804,354
Weighted-average number of common shares, diluted		129,116,171			130,813,750			130,453,944			130,804,354

Pebblebrook Hotel Trust
Reconciliation of Net Income (Loss) to FFO and Adjusted FFO
*($ in thousands, except share and per-share data)*
*(Unaudited)*

	Three months ended December 31,									Twelve months ended December 31,
		2022			2021			2019			2022			2021			2019

Net income (loss)	$	(39,867	)	$	(42,822	)	$	19,572		$	(84,981	)	$	(186,372	)	$	115,725
Adjustments:
Real estate depreciation and amortization		59,751			58,512			57,396			239,231			223,813			234,591
Gain on sale of hotel properties		–			–			(2,819	)		(6,194	)		(64,729	)		(2,819	)
Impairment loss		3,514			–			–			89,633			14,856			–
FFO	$	23,398		$	15,690		$	74,149		$	237,689		$	(12,432	)	$	347,497
Distribution to preferred shareholders and unit holders		(12,207	)		(11,344	)		(8,139	)		(48,049	)		(42,105	)		(32,556	)
Issuance costs of redeemed preferred shares		8,186			(12	)		–			8,186			(8,055	)		–
FFO available to common share and unit holders	$	19,377		$	4,334		$	66,010		$	197,826		$	(62,592	)	$	314,941
Transaction costs		99			37			1,103			430			100			8,679
Non-cash ground rent		1,929			1,960			701			7,737			4,729			3,975
Management/franchise contract transition costs		471			136			1,143			817			271			5,927
Interest expense adjustment for acquired liabilities		542			811			213			2,549			2,127			902
Finance lease adjustment		731			719			1,000			2,906			3,037			3,193
Non-cash amortization of acquired intangibles		(529	)		(543	)		(290	)		(2,149	)		(1,593	)		(1,340	)
Non-cash interest expense		–			442			1,379			49			2,063			6,140
One-time operation suspension expenses		–			–			–			–			132			–
Early extinguishment of debt		7,995			–			–			7,995			1,700			1,698
Amortization of share-based compensation expense		3,195			3,087			2,141			11,349			11,432			8,240
Issuance costs of redeemed preferred shares		(8,186	)		12			–			(8,186	)		8,055			–
Estimated hurricane related repairs and cleanup costs		249			–			–			249			–			–
Adjusted FFO available to common share and unit holders	$	25,873		$	10,995		$	73,400		$	221,572		$	(30,539	)	$	352,355

FFO per common share – basic	$	0.15		$	0.03		$	0.50		$	1.51		$	(0.48	)	$	2.41
FFO per common share – diluted	$	0.15		$	0.03		$	0.50		$	1.51		$	(0.48	)	$	2.40
Adjusted FFO per common share – basic	$	0.20		$	0.08		$	0.56		$	1.69		$	(0.23	)	$	2.69
Adjusted FFO per common share – diluted	$	0.20		$	0.08		$	0.56		$	1.69		$	(0.23	)	$	2.69

Weighted-average number of basic common shares and units		129,993,275			131,674,563			130,854,912			131,331,048			131,665,167			130,841,626
Weighted-average number of fully diluted common shares and units		129,993,275			131,674,563			131,039,450			131,331,048			131,665,167			131,088,262

This press release includes certain non-GAAP financial measures. These measures are not in accordance with, or an alternative to, measures prepared in accordance with GAAP and may be different from similarly titled non-GAAP financial measures used by other companies. In addition, these non-GAAP financial measures are not based on any comprehensive set of accounting rules or principles. Non-GAAP financial measures have limitations in that they do not reflect all of the amounts associated with the Company’s results of operations determined in accordance with GAAP. Funds from Operations (“FFO”) – FFO represents net income (computed in accordance with GAAP), excluding gains or losses from sales of properties, plus real estate-related depreciation and amortization and after adjustments for unconsolidated partnerships. The Company considers FFO a useful measure of performance for an equity REIT because it facilitates an understanding of the Company’s operating performance without giving effect to real estate depreciation and amortization, which assume that the value of real estate assets diminishes predictably over time. Since real estate values have historically risen or fallen with market conditions, the Company believes that FFO provides a meaningful indication of its performance. The Company also considers FFO an appropriate performance measure given its wide use by investors and analysts. The Company computes FFO in accordance with standards established by the Board of Governors of Nareit in its March 1995 White Paper (as amended in November 1999 and April 2002), which may differ from the methodology for calculating FFO utilized by other equity REITs and, accordingly, may not be comparable to that of other REITs. Further, FFO does not represent amounts available for management’s discretionary use because of needed capital replacement or expansion, debt service obligations or other commitments and uncertainties, nor is it indicative of funds available to fund the Company’s cash needs, including its ability to make distributions. The Company presents FFO per diluted share calculations that are based on the outstanding dilutive common shares plus the outstanding Operating Partnership units for the periods presented. The Company also evaluates its performance by reviewing Adjusted FFO because it believes that adjusting FFO to exclude certain recurring and non-recurring items described below provides useful supplemental information regarding the Company’s ongoing operating performance and that the presentation of Adjusted FFO, when combined with the primary GAAP presentation of net income (loss), more completely describes the Company’s operating performance. The Company adjusts FFO available to common share and unit holders for the following items, which may occur in any period, and refers to this measure as Adjusted FFO: – Transaction costs: The Company excludes transaction costs expensed during the period because it believes that including these costs in FFO does not reflect the underlying financial performance of the Company and its hotels. – Non-cash ground rent: The Company excludes the non-cash ground rent expense, which is primarily made up of the straight-line rent impact from a ground lease. – Management/franchise contract transition costs: The Company excludes one-time management and/or franchise contract transition costs expensed during the period because it believes that including these costs in FFO does not reflect the underlying financial performance of the Company and its hotels. – Interest expense adjustment for acquired liabilities: The Company excludes interest expense adjustment for acquired liabilities assumed in connection with acquisitions, because it believes that including these non-cash adjustments in FFO does not reflect the underlying financial performance of the Company. – Finance lease adjustment: The Company excludes the effect of non-cash interest expense from finance leases because it believes that including these non-cash adjustments in FFO does not reflect the underlying financial performance of the Company. – Non-cash amortization of acquired intangibles: The Company excludes the non-cash amortization of acquired intangibles, which includes but is not limited to the amortization of favorable and unfavorable leases or management agreements and above/below market real estate tax reduction agreements because it believes that including these non-cash adjustments in FFO does not reflect the underlying financial performance of the Company. – Non-cash interest expense, one-time operation suspension expenses, early extinguishment of debt, amortization of share-based compensation expense, issuance costs of redeemed preferred shares, and estimated hurricane related repairs and cleanup costs: The Company excludes these items because the Company believes that including these adjustments in FFO does not reflect the underlying financial performance of the Company and its hotels. The Company presents weighted-average number of basic and fully diluted common shares and units by excluding the dilutive effect of shares issuable upon conversion of convertible debt. The Company’s presentation of FFO in accordance with the Nareit White Paper, and as adjusted by the Company, should not be considered as an alternative to net income (computed in accordance with GAAP) as an indicator of the Company’s financial performance or to cash flow from operating activities (computed in accordance with GAAP) as an indicator of its liquidity.

Pebblebrook Hotel Trust
Reconciliation of Net Income (Loss) to EBITDA, EBITDAre and Adjusted EBITDAre
*($ in thousands)*
*(Unaudited)*

	Three months ended December 31,									Twelve months ended December 31,
		2022			2021			2019			2022			2021			2019

Net income (loss)	$	(39,867	)	$	(42,822	)	$	19,572		$	(84,981	)	$	(186,372	)	$	115,725
Adjustments:
Interest expense		29,235			23,568			23,962			99,988			96,633			108,474
Income tax expense (benefit)		(738	)		1			(752	)		277			61			5,172
Depreciation and amortization		59,837			58,615			57,504			239,583			224,251			234,880
EBITDA	$	48,467		$	39,362		$	100,286		$	254,867		$	134,573		$	464,251
Gain on sale of hotel properties		–			–			(2,819	)		(6,194	)		(64,729	)		(2,819	)
Impairment loss		3,514			–			–			89,633			14,856			–
EBITDAre	$	51,981		$	39,362		$	97,467		$	338,306		$	84,700		$	461,432
Transaction costs		99			37			1,103			430			100			8,679
Non-cash ground rent		1,929			1,960			701			7,737			4,729			3,975
Management/franchise contract transition costs		471			136			1,143			817			271			5,927
Non-cash amortization of acquired intangibles		(529	)		(543	)		(290	)		(2,149	)		(1,593	)		(1,340	)
One-time operation suspension expenses		–			–			–			–			132			–
Amortization of share-based compensation expense		3,195			3,087			2,141			11,349			11,432			8,240
Estimated hurricane related repairs and cleanup costs		249			–			–			249			–			–
Adjusted EBITDAre	$	57,395		$	44,039		$	102,265		$	356,739		$	99,771		$	486,913

This press release includes certain non-GAAP financial measures. These measures are not in accordance with, or an alternative to, measures prepared in accordance with GAAP and may be different from similarly titled non-GAAP financial measures used by other companies. In addition, these non-GAAP financial measures are not based on any comprehensive set of accounting rules or principles. Non-GAAP financial measures have limitations in that they do not reflect all of the amounts associated with the Company’s results of operations determined in accordance with GAAP. Earnings before Interest, Taxes, and Depreciation and Amortization (“EBITDA”) – The Company believes that EBITDA provides investors a useful financial measure to evaluate its operating performance, excluding the impact of our capital structure (primarily interest expense) and our asset base (primarily depreciation and amortization). Earnings before Interest, Taxes, and Depreciation and Amortization for Real Estate (“EBITDAre”) – The Company believes that EBITDAre provides investors a useful financial measure to evaluate its operating performance, and the Company presents EBITDAre in accordance with Nareit guidelines, as defined in its September 2017 white paper “Earnings Before Interest, Taxes, Depreciation and Amortization for Real Estate.” EBITDAre adjusts EBITDA for the following items, which may occur in any period, and refers to these measures as Adjusted EBITDAre: (1) gains or losses on the disposition of depreciated property, including gains or losses on change of control; (2) impairment write-downs of depreciated property and of investments in unconsolidated affiliates caused by a decrease in value of depreciated property in the affiliate; and (3) adjustments to reflect the entity’s share of EBITDAre of unconsolidated affiliates. The Company also evaluates its performance by reviewing Adjusted EBITDAre because it believes that adjusting EBITDAre to exclude certain recurring and non-recurring items described below provides useful supplemental information regarding the Company’s ongoing operating performance and that the presentation of Adjusted EBITDAre, when combined with the primary GAAP presentation of net income (loss), more completely describes the Company’s operating performance. The Company adjusts EBITDAre for the following items, which may occur in any period, and refers to these measures as Adjusted EBITDAre: – Transaction costs: The Company excludes transaction costs expensed during the period because it believes that including these costs in EBITDAre does not reflect the underlying financial performance of the Company and its hotels. – Non-cash ground rent: The Company excludes the non-cash ground rent expense, which is primarily made up of the straight-line rent impact from a ground lease. – Management/franchise contract transition costs: The Company excludes one-time management and/or franchise contract transition costs expensed during the period because it believes that including these costs in EBITDAre does not reflect the underlying financial performance of the Company and its hotels. – Non-cash amortization of acquired intangibles: The Company excludes the non-cash amortization of acquired intangibles, which includes but is not limited to the amortization of favorable and unfavorable leases or management agreements and above/below market real estate tax reduction agreements because it believes that including these non-cash adjustments in EBITDAre does not reflect the underlying financial performance of the Company and its hotels. – One-time operation suspension expenses, amortization of share-based compensation expense, and estimated hurricane related repairs and cleanup costs: The Company excludes these items because it believes that including these costs in EBITDAre does not reflect the underlying financial performance of the Company and its hotels. The Company’s presentation of EBITDAre, and as adjusted by the Company, should not be considered as an alternative to net income (computed in accordance with GAAP) as an indicator of the Company’s financial performance or to cash flow from operating activities (computed in accordance with GAAP) as an indicator of its liquidity.

Pebblebrook Hotel Trust
Reconciliation of Q1 2023 Outlook Net Income (Loss) to FFO and Adjusted FFO
*($ in millions, except per share data)*
*(Unaudited)*

	Three months ending March 31, 2023
	Low			High

Net income (loss)	$	(49	)	$	(44	)
Adjustments:
Real estate depreciation and amortization		61			61
(Gain) loss on sale of hotel properties		1			1
Impairment loss		–			–
FFO	$	13		$	18
Distribution to preferred shareholders and unit holders		(12	)		(12	)
FFO available to common share and unit holders	$	1		$	6
Non-cash ground rent		2			2
Amortization of share-based compensation expense		3			3
Other		1			1
Adjusted FFO available to common share and unit holders	$	7		$	12

FFO per common share – diluted	$	0.01		$	0.05
Adjusted FFO per common share – diluted	$	0.06		$	0.10

Weighted-average number of fully diluted common shares and units		126.9			126.9

To supplement the Company’s consolidated financial statements presented in accordance with U.S. GAAP, this press release includes certain non-GAAP financial measures as defined under SEC rules. These measures are not in accordance with, or an alternative to, measures prepared in accordance with GAAP and may be different from similarly titled non-GAAP financial measures used by other companies. In addition, these non-GAAP financial measures are not based on any comprehensive set of accounting rules or principles. Non-GAAP financial measures have limitations in that they do not reflect all of the amounts associated with the Company’s results of operations determined in accordance with GAAP. Funds from Operations (“FFO”) – FFO represents net income (computed in accordance with GAAP), excluding gains or losses from sales of properties, plus real estate-related depreciation and amortization and after adjustments for unconsolidated partnerships. The Company considers FFO a useful measure of performance for an equity REIT because it facilitates an understanding of the Company’s operating performance without giving effect to real estate depreciation and amortization, which assume that the value of real estate assets diminishes predictably over time. Since real estate values have historically risen or fallen with market conditions, the Company believes that FFO provides a meaningful indication of its performance. The Company also considers FFO an appropriate performance measure given its wide use by investors and analysts. The Company computes FFO in accordance with standards established by the Board of Governors of Nareit in its March 1995 White Paper (as amended in November 1999 and April 2002), which may differ from the methodology for calculating FFO utilized by other equity REITs and, accordingly, may not be comparable to that of other REITs. Further, FFO does not represent amounts available for management’s discretionary use because of needed capital replacement or expansion, debt service obligations or other commitments and uncertainties, nor is it indicative of funds available to fund the Company’s cash needs, including its ability to make distributions. The Company presents FFO per diluted share calculations that are based on the outstanding dilutive common shares plus the outstanding Operating Partnership units for the periods presented. The Company also evaluates its performance by reviewing Adjusted FFO because it believes that adjusting FFO to exclude certain recurring and non-recurring items described below provides useful supplemental information regarding the Company’s ongoing operating performance and that the presentation of Adjusted FFO, when combined with the primary GAAP presentation of net income (loss), more completely describes the Company’s operating performance. The Company adjusts FFO for the following items, which may occur in any period, and refers to this measure as Adjusted FFO: – Non-cash ground rent: The Company excludes the non-cash ground rent expense, which is primarily made up of the straight-line rent impact from a ground lease. – Non-cash interest expense: The Company excludes non-cash interest expense because the Company believes that including this adjustment in FFO does not reflect the underlying financial performance of the Company and its hotels. – Amortization of share-based compensation expense: The Company excludes the amortization of share-based compensation expense because the Company believes that including this adjustment in FFO does not reflect the underlying financial performance of the Company and its hotels. – Other: The Company excludes other expenses, which include transaction costs, management/franchise contract transition costs, interest expense adjustment for acquired liabilities, finance lease adjustment and non-cash amortization of acquired intangibles because the Company believes that including these non-cash adjustments in FFO does not reflect the underlying financial performance of the Company and its hotels. The Company’s presentation of FFO in accordance with the Nareit White Paper, and as adjusted by the Company, should not be considered as an alternative to net income (computed in accordance with GAAP) as an indicator of the Company’s financial performance or to cash flow from operating activities (computed in accordance with GAAP) as an indicator of its liquidity. Any differences are a result of rounding.

Pebblebrook Hotel Trust
Reconciliation of Q1 2023 Outlook Net Income (Loss) to EBITDA, EBITDAre and Adjusted EBITDAre
*($ in millions)*
*(Unaudited)*

	Three months ending March 31, 2023
	Low			High

Net income (loss)	$	(49	)	$	(44	)
Adjustments:
Interest expense and income tax expense		28			28
Depreciation and amortization		61			61
EBITDA	$	40		$	45
(Gain) loss on sale of hotel properties		1			1
Impairment loss		–			–
EBITDAre	$	41		$	46
Non-cash ground rent		2			2
Amortization of share-based compensation expense		3			3
Other		1			1
Adjusted EBITDAre	$	47		$	52

To supplement the Company’s consolidated financial statements presented in accordance with U.S. GAAP, this press release includes certain non-GAAP financial measures as defined under SEC rules. These measures are not in accordance with, or an alternative to, measures prepared in accordance with GAAP and may be different from similarly titled non-GAAP financial measures used by other companies. In addition, these non-GAAP financial measures are not based on any comprehensive set of accounting rules or principles. Non-GAAP financial measures have limitations in that they do not reflect all of the amounts associated with the Company’s results of operations determined in accordance with GAAP. Earnings before Interest, Taxes, and Depreciation and Amortization (“EBITDA”) – The Company believes that EBITDA provides investors a useful financial measure to evaluate its operating performance, excluding the impact of our capital structure (primarily interest expense) and our asset base (primarily depreciation and amortization). Earnings before Interest, Taxes, and Depreciation and Amortization for Real Estate (“EBITDAre”) – The Company believes that EBITDAre provides investors a useful financial measure to evaluate its operating performance, and the Company presents EBITDAre in accordance with the National Association of Real Estate Investment Trusts (“Nareit”) guidelines, as defined in its September 2017 white paper “Earnings Before Interest, Taxes, Depreciation and Amortization for Real Estate.” EBITDAre adjusts EBITDA for the following items, which may occur in any period, and refers to these measures as Adjusted EBITDAre: (1) gains or losses of on the disposition of depreciated property, including gains or losses on change of control; (2) impairment write-downs of depreciated property and of investments in unconsolidated affiliates caused by a decrease in value of depreciated property in the affiliate; and (3) adjustments to reflect the entity’s share of EBITDAre of unconsolidated affiliates. The Company also evaluates its performance by reviewing Adjusted EBITDAre because it believes that adjusting EBITDAre to exclude certain recurring and non-recurring items described below provides useful supplemental information regarding the Company’s ongoing operating performance and that the presentation of Adjusted EBITDAre, when combined with the primary GAAP presentation of net income (loss), more completely describes the Company’s operating performance. The Company adjusts EBITDAre for the following items, which may occur in any period, and refers to these measures as Adjusted EBITDAre: – Non-cash ground rent: The Company excludes the non-cash ground rent expense, which is primarily made up of the straight-line rent impact from a ground lease. – Amortization of share-based compensation expense: The Company excludes amortization of share-based compensation expense because the Company believes that including this non-cash adjustment in EBITDAre does not reflect the underlying financial performance of the Company and its hotels. – Other: The Company excludes other expenses, which include transaction costs, management/franchise contract transition costs and non-cash amortization of acquired intangibles because the Company believes that including these non-cash adjustments in EBITDAre does not reflect the underlying financial performance of the Company and its hotels. The Company’s presentation of EBITDAre, and as adjusted by the Company, should not be considered as an alternative to net income (computed in accordance with GAAP) as an indicator of the Company’s financial performance or to cash flow from operating activities (computed in accordance with GAAP) as an indicator of its liquidity. Any differences are a result of rounding.

Pebblebrook Hotel Trust

Same-Property Statistical Data

(Unaudited)

Three months ended
December 31,

Year ended
December 31,

2022

2021

2019

2022

2021

2019

Same-Property Occupancy

60.1%

53.0%

77.2%

62.6%

43.0%

81.3%

2022 vs. 2021 Increase/(Decrease)

13.3%

45.5%

2022 vs. 2019 Increase/(Decrease)

(22.1%)

(23.0%)

Same-Property ADR

$288.82

$260.57

$243.92

$308.00

$268.23

$257.85

2022 vs. 2021 Increase/(Decrease)

10.8%

14.8%

2022 vs. 2019 Increase/(Decrease)

18.4%

19.4%

Same-Property RevPAR

$173.62

$138.23

$188.25

$192.83

$115.44

$209.68

2022 vs. 2021 Increase/(Decrease)

25.6%

67.0%

2022 vs. 2019 Increase/(Decrease)

(7.8%)

(8.0%)

Same-Property Total RevPAR

$272.96

$213.42

$290.83

$294.49

$178.40

$316.78

2022 vs. 2021 Increase/(Decrease)

27.9%

65.1%

2022 vs. 2019 Increase/(Decrease)

(6.1%)

(7.0%)

Notes:

The schedule of hotel results for the three months ended December 31 includes information from all of the hotels the Company owned as of December 31, 2022, except for 1 Hotel San Francisco for Q4 2022, 2021 and 2019 due to its closure for renovation during Q4 2021 and LaPlaya Beach Resort & Club for Q4 2022, 2021 and 2019 due to its closure following Hurricane Ian.

The schedule of hotel results for the year ended December 31 includes information from all of the hotels the Company owned as of December 31, 2022, except for 1 Hotel San Francisco for Q1, Q2, Q3 and Q4 2022, 2021 and 2019 due to its closure for renovation from Q3 2021 to Q2 2022; the Inn on Fifth for Q1 2022, 2021 and 2019 due to its acquisition on May 11, 2022; Newport Harbor Island Resort for Q1 and Q2 2022, 2021 and 2019 due to its acquisition on June 23, 2022; and LaPlaya Beach Resort & Club for Q4 2022, 2021 and 2019 due to its closure following Hurricane Ian. Additionally, the schedule excludes The Marker San Francisco for Q2, Q3 and Q4 2022, 2021 and 2019 due to its sale on June 28, 2022; Sofitel Philadelphia at Rittenhouse Square for Q3 and Q4 2022, 2021 and 2019 due to its sale on August 2, 2022; Hotel Spero for Q3 and Q4 2022, 2021 and 2019 due to its sale on August 25, 2022 and Hotel Vintage Portland for Q3 and Q4 2022, 2021 and 2019 due to its sale on September 14, 2022.

These hotel results for the respective periods may include information reflecting operational performance prior to the Company’s ownership of the hotels. Any differences are a result of rounding.

The information above has not been audited and is presented only for comparison purposes.

Pebblebrook Hotel Trust
Same-Property Statistical Data – by Market
*(Unaudited)*

	Three months ended December 31,	Year ended December 31,	Three months ended December 31,	Year ended December 31,
	2022 vs. 2021	2022 vs. 2021	2022 vs. 2019	2022 vs. 2019
Same-Property RevPAR variance:
Southern Florida/Georgia	(6.1%)	14.9%	24.7%	39.6%
Other	(9.4%)	25.0%	9.6%	16.5%
San Diego	26.3%	56.8%	13.5%	10.0%
Boston	25.8%	95.7%	(5.9%)	(5.1%)
Los Angeles	23.1%	77.5%	(7.6%)	(10.9%)
Chicago	74.2%	176.5%	(16.2%)	(18.3%)
Portland	35.1%	59.0%	(15.0%)	(19.4%)
Washington DC	96.4%	164.6%	(8.4%)	(26.4%)
Seattle	49.2%	125.3%	(38.0%)	(35.2%)
San Francisco	84.0%	199.2%	(51.6%)	(53.3%)

East Coast	13.7%	49.9%	3.1%	6.9%
West Coast	32.5%	76.9%	(14.2%)	(16.8%)

Notes:
The schedule of hotel results for the three months ended December 31 includes information from all of the hotels the Company owned as of December 31, 2022, except for 1 Hotel San Francisco for Q4 2022, 2021 and 2019 due to its closure for renovation during Q4 2021 and LaPlaya Beach Resort & Club for Q4 2022, 2021 and 2019 due to its closure following Hurricane Ian. The schedule of hotel results for the year ended December 31 includes information from all of the hotels the Company owned as of December 31, 2022, except for 1 Hotel San Francisco for Q1, Q2, Q3 and Q4 2022, 2021 and 2019 due to its closure for renovation from Q3 2021 to Q2 2022; the Inn on Fifth for Q1 2022, 2021 and 2019 due to its acquisition on May 11, 2022; Newport Harbor Island Resort for Q1 and Q2 2022, 2021 and 2019 due to its acquisition on June 23, 2022; and LaPlaya Beach Resort & Club for Q4 2022, 2021 and 2019 due to its closure following Hurricane Ian. Additionally, the schedule excludes The Marker San Francisco for Q2, Q3 and Q4 2022, 2021 and 2019 due to its sale on June 28, 2022; Sofitel Philadelphia at Rittenhouse Square for Q3 and Q4 2022, 2021 and 2019 due to its sale on August 2, 2022; Hotel Spero for Q3 and Q4 2022, 2021 and 2019 due to its sale on August 25, 2022 and Hotel Vintage Portland for Q3 and Q4 2022, 2021 and 2019 due to its sale on September 14, 2022. “Other” includes Newport, RI, Philadelphia, PA and Santa Cruz, CA. These hotel results for the respective periods may include information reflecting operational performance prior to the Company’s ownership of the hotels. Any differences are a result of rounding. The information above has not been audited and is presented only for comparison purposes.

Pebblebrook Hotel Trust
Hotel Operational Data
Schedule of Same-Property Results
*($ in thousands)*
*(Unaudited)*

	Three months ended December 31,									Year ended December 31,
		2022			2021			2019			2022			2021			2019

Same-Property Revenues:
Room	$	197,539		$	157,270		$	213,715		$	895,946		$	536,375		$	972,147
Food and beverage		83,306			60,536			87,517			340,512			189,770			364,812
Other		29,719			25,015			28,947			131,816			102,748			131,746
Total hotel revenues		310,564			242,821			330,179			1,368,274			828,893			1,468,705

Same-Property Expenses:
Room	$	57,224		$	41,458		$	55,362		$	221,464		$	136,446		$	236,572
Food and beverage		60,844			42,592			58,259			236,658			131,199			247,424
Other direct		7,581			6,089			6,194			32,540			23,202			27,993
General and administrative		29,920			24,083			27,562			114,586			80,683			113,947
Information and telecommunication systems		5,004			3,995			5,018			19,127			15,062			20,757
Sales and marketing		25,671			17,509			26,971			97,045			59,983			111,828
Management fees		8,255			6,904			10,196			40,709			22,007			43,915
Property operations and maintenance		13,576			11,706			11,647			50,268			38,647			47,472
Energy and utilities		9,453			8,522			8,361			39,365			31,266			35,314
Property taxes		14,382			15,485			18,135			71,233			69,605			71,424
Other fixed expenses		13,453			11,615			13,274			54,275			45,472			49,164
Total hotel expenses		245,363			189,958			240,979			977,270			653,572			1,005,810

Same-Property EBITDA	$	65,201		$	52,863		$	89,200		$	391,004		$	175,321		$	462,895

Same-Property EBITDA Margin		21.0	%		21.8	%		27.0	%		28.6	%		21.2	%		31.5	%


Notes:
The schedule of hotel results for the three months ended December 31 includes information from all of the hotels the Company owned as of December 31, 2022, except for 1 Hotel San Francisco for Q4 2022, 2021 and 2019 due to its closure for renovation during Q4 2021 and LaPlaya Beach Resort & Club for Q4 2022, 2021 and 2019 due to its closure following Hurricane Ian. The schedule of hotel results for the year ended December 31 includes information from all of the hotels the Company owned as of December 31, 2022, except for 1 Hotel San Francisco for Q1, Q2, Q3 and Q4 2022, 2021 and 2019 due to its closure for renovation from Q3 2021 to Q2 2022; the Inn on Fifth for Q1 2022, 2021 and 2019 due to its acquisition on May 11, 2022; Newport Harbor Island Resort for Q1 and Q2 2022, 2021 and 2019 due to its acquisition on June 23, 2022; and LaPlaya Beach Resort & Club for Q4 2022, 2021 and 2019 due to its closure following Hurricane Ian. Additionally, the schedule excludes The Marker San Francisco for Q2, Q3 and Q4 2022, 2021 and 2019 due to its sale on June 28, 2022; Sofitel Philadelphia at Rittenhouse Square for Q3 and Q4 2022, 2021 and 2019 due to its sale on August 2, 2022; Hotel Spero for Q3 and Q4 2022, 2021 and 2019 due to its sale on August 25, 2022 and Hotel Vintage Portland for Q3 and Q4 2022, 2021 and 2019 due to its sale on September 14, 2022. These hotel results for the respective periods may include information reflecting operational performance prior to the Company’s ownership of the hotels. Any differences are a result of rounding. The information above has not been audited and is presented only for comparison purposes.

Pebblebrook Hotel Trust
2022 Same-Property Inclusion Reference Table

Hotels	Q1	Q2	Q3	Q4

Hotel Monaco Washington DC	X	X	X	X
Skamania Lodge	X	X	X	X
Le Méridien Delfina Santa Monica	X	X	X	X
Sofitel Philadelphia at Rittenhouse Square	X	X
Argonaut Hotel	X	X	X	X
The Westin San Diego Gaslamp Quarter	X	X	X	X
Hotel Monaco Seattle	X	X	X	X
Mondrian Los Angeles	X	X	X	X
W Boston	X	X	X	X
Hotel Zetta San Francisco	X	X	X	X
Hotel Vintage Seattle	X	X	X	X
Hotel Vintage Portland	X	X
W Los Angeles – West Beverly Hills	X	X	X	X
Hotel Zelos San Francisco	X	X	X	X
Embassy Suites San Diego Bay – Downtown	X	X	X	X
The Hotel Zags	X	X	X	X
Hotel Zephyr Fisherman’s Wharf	X	X	X	X
Hotel Zeppelin San Francisco	X	X	X	X
The Nines, a Luxury Collection Hotel, Portland	X	X	X	X
Hotel Colonnade Coral Gables, Autograph Collection	X	X	X	X
Hotel Palomar Los Angeles Beverly Hills	X	X	X	X
Revere Hotel Boston Common	X	X	X	X
LaPlaya Beach Resort & Club	X	X	X
Hotel Zoe Fisherman’s Wharf	X	X	X	X
1 Hotel San Francisco
The Marker San Francisco	X
Hotel Spero	X	X
Harbor Court Hotel San Francisco	X	X	X	X
Chaminade Resort & Spa	X	X	X	X
Viceroy Santa Monica Hotel	X	X	X	X
Le Parc Suite Hotel	X	X	X	X
Montrose West Hollywood	X	X	X	X
Chamberlain West Hollywood Hotel	X	X	X	X
Hotel Ziggy	X	X	X	X
The Westin Copley Place, Boston	X	X	X	X
The Liberty, a Luxury Collection Hotel, Boston	X	X	X	X
Hyatt Regency Boston Harbor	X	X	X	X
George Hotel	X	X	X	X
Viceroy Washington DC	X	X	X	X
Hotel Zena Washington DC	X	X	X	X
Paradise Point Resort & Spa	X	X	X	X
Hilton San Diego Gaslamp Quarter	X	X	X	X
L’Auberge Del Mar	X	X	X	X
San Diego Mission Bay Resort	X	X	X	X
Solamar Hotel	X	X	X	X
The Heathman Hotel	X	X	X	X
Southernmost Beach Resort	X	X	X	X
The Marker Key West Harbor Resort	X	X	X	X
Hotel Chicago Downtown, Autograph Collection	X	X	X	X
The Westin Michigan Avenue Chicago	X	X	X	X
Jekyll Island Club Resort	X	X	X	X
Margaritaville Hollywood Beach Resort	X	X	X	X
Estancia La Jolla Hotel & Spa	X	X	X	X
Inn on Fifth		X	X	X
Newport Harbor Island Resort			X	X

Notes:
A property marked with an “X” in a specific quarter denotes that the same-property operating results of that property are included in the Same-Property Statistical Data and in the Schedule of Same-Property Results. The Company’s fourth quarter Same-Property RevPAR, RevPAR Growth, Total RevPAR, Total RevPAR Growth, ADR, Occupancy, Revenues, Expenses, EBITDA and EBITDA Margin include all of the hotels the Company owned as of December 31, 2022, except for 1 Hotel San Francisco for Q4 2022, 2021 and 2019 due to its closure for renovation during Q4 2021 and LaPlaya Beach Resort & Club for Q4 2022, 2021 and 2019 due to its closure following Hurricane Ian. The Company’s estimates and assumptions for Same-Property RevPAR, RevPAR Growth, Total RevPAR, Total RevPAR Growth, ADR, Occupancy, Revenues, Expenses, EBITDA and EBITDA Margin for the first quarter of 2023 include all of the hotels the Company owned as of February 21, 2023, except for 1 Hotel San Francisco for Q1 2023, 2022 and 2019 due to its closure for renovation during Q1 2022, LaPlaya Beach Resort & Club for Q1 2023, 2022 and 2019 due to its closure following Hurricane Ian, and The Heathman Hotel for Q1 2023, 2022 and 2019 due to its pending sale in Q1 2023. Operating statistics and financial results may include periods prior to the Company’s ownership of the hotels.

Pebblebrook Hotel Trust
Historical Operating Data
*($ in millions except ADR and RevPAR data)*
*(Unaudited)*

Historical Operating Data:
	First Quarter	Second Quarter	Third Quarter	Fourth Quarter	Full Year
	2019	2019	2019	2019	2019

Occupancy	75%	86%	86%	77%	81%
ADR	$253	$272	$269	$248	$261
RevPAR	$189	$234	$231	$191	$211

Hotel Revenues	$332.0	$409.5	$402.8	$350.0	$1,494.3
Hotel EBITDA	$89.2	$145.1	$136.6	$95.2	$466.2
Hotel EBITDA Margin	26.9%	35.4%	33.9%	27.2%	31.2%

	First Quarter	Second Quarter	Third Quarter	Fourth Quarter	Full Year
	2021	2021	2021	2021	2021

Occupancy	22%	43%	54%	52%	43%
ADR	$266	$265	$291	$265	$273
RevPAR	$60	$113	$157	$139	$117

Hotel Revenues	$109.7	$205.4	$280.1	$257.3	$852.4
Hotel EBITDA	($3.4)	$46.4	$84.1	$58.2	$185.4
Hotel EBITDA Margin	(3.1%)	22.6%	30.0%	22.6%	21.7%

	First Quarter	Second Quarter	Third Quarter	Fourth Quarter	Full Year
	2022	2022	2022	2022	2022

Occupancy	49%	69%	72%	59%	62%
ADR	$311	$324	$323	$292	$314
RevPAR	$151	$223	$234	$173	$195

Hotel Revenues	$264.0	$396.9	$411.5	$319.4	$1,391.8
Hotel EBITDA	$61.5	$138.7	$131.0	$62.5	$393.8
Hotel EBITDA Margin	23.3%	34.9%	31.8%	19.6%	28.3%

Notes:
These historical hotel operating results include information for all of the hotels the Company owned as of December 31, 2022, as if they were owned as of January 1, 2019. These historical operating results include periods prior to the Company’s ownership of the hotels. The information above does not reflect the Company’s corporate general and administrative expense, interest expense, property acquisition costs, depreciation and amortization, taxes and other expenses. These hotel results for the respective periods may include information reflecting operational performance prior to the Company’s ownership of the hotels. Any differences are a result of rounding. The information above has not been audited and is presented only for comparison purposes.

Pebblebrook Hotel Trust
Historical Hotel Same-Property Hotel EBITDA by Property
*(Hotel EBITDA $ in millions, Hotel EBITDA per key $ in thousands)*
*(Unaudited)*

	Hotel EBITDA														2022 Hotel EBITDA per Key
Market / Hotel	2010	2011	2012	2013		2014	2015	2016	2017	2018	2019	2020	2021	2022	2022 Hotel EBITDA per Key

Unique Lifestyle Resorts
LaPlaya Beach Resort & Club	$5.7	$7.6	$8.7	$10.7		$12.4	$15.7	$16.2	$11.8	$16.5	$17.7	$14.0	$27.4	$24.8	$131.2
Inn on Fifth	N/A	N/A	N/A	N/A		N/A	N/A	N/A	N/A	N/A	5.1	4.2	9.7	11.9	100.0
Southernmost Beach Resort	9.0	10.4	10.8	14.1		17.6	19.9	21.1	17.9	19.3	21.4	13.1	24.4	24.2	82.6
The Marker Key West Harbor Resort	N/A	N/A	N/A	N/A		N/A	4.8	5.8	4.6	5.6	6.0	3.1	7.9	7.9	82.3
L’Auberge Del Mar	4.6	5.4	5.6	7.7		8.1	9.9	9.3	9.4	9.5	7.3	2.7	8.5	9.0	74.4
Margaritaville Hollywood Beach Resort	N/A	N/A	N/A	N/A		N/A	N/A	N/A	N/A	N/A	17.8	0.4	22.1	24.5	66.4
Newport Harbor Island Resort	N/A	N/A	N/A	N/A		N/A	N/A	N/A	N/A	N/A	7.4	4.2	13.9	13.1	51.0
Estancia La Jolla Hotel & Spa	N/A	N/A	N/A	N/A		N/A	N/A	N/A	N/A	N/A	8.1	(0.3)	4.6	10.6	50.5
Skamania Lodge	4.4	4.8	5.2	6.0		6.8	7.7	8.1	9.0	9.5	10.3	1.2	7.7	12.3	47.3
Chaminade Resort & Spa	3.3	3.6	3.7	4.3		4.7	5.0	4.8	5.2	5.4	4.4	(1.1)	3.3	7.3	46.8
Paradise Point Resort & Spa	8.3	11.8	13.7	14.8		16.1	16.7	14.7	16.8	17.5	15.3	4.6	14.1	20.5	44.4
Jekyll Island Club Resort	N/A	N/A	N/A	N/A		N/A	N/A	N/A	N/A	N/A	5.0	2.7	8.7	7.4	37.0
San Diego Mission Bay Resort	4.4	4.7	5.2	5.5		7.0	7.9	8.3	8.8	8.1	5.5	(4.2)	6.9	9.5	26.6

Unique Lifestyle Resorts Total	$39.7	$48.3	$52.9	$63.1		$72.7	$87.6	$88.3	$83.5	$91.4	$131.3	$44.6	$159.2	$183.0	$59.2

Boston Urban
The Liberty, a Luxury Collection Hotel, Boston	$6.1	$9.6	$13.3	$15.8		$17.2	$18.2	$18.5	$19.0	$21.4	$21.2	$0.3	$10.5	$21.1	$70.8
Revere Hotel Boston Common	3.3	6.1	5.7	9.2		11.7	13.3	12.2	12.6	12.4	11.8	(6.1)	2.8	15.7	44.1
The Westin Copley Place, Boston	21.3	23.5	24.4	25.8		28.7	32.7	33.3	31.5	28.5	32.9	(4.4)	3.0	30.7	38.2
W Boston	3.8	4.4	5.8	6.2		8.1	9.6	9.3	9.2	7.9	8.1	(2.6)	2.4	7.2	30.3
Hyatt Regency Boston Harbor	6.2	6.7	7.3	7.7		9.3	11.1	10.8	10.8	10.7	10.1	(2.2)	1.6	5.6	20.7

Boston Total	$40.7	$50.3	$56.5	$64.7		$75.0	$84.9	$84.1	$83.1	$80.9	$84.1	($15.0)	$20.3	$80.3	$40.9

Miami Urban
Hotel Colonnade Coral Gables, Autograph Collection	$1.9	$2.1	$1.8	$3.1		$3.4	$3.6	$3.9	$4.0	$4.5	$4.1	($0.3)	$3.0	$4.8	$30.6

Miami Total	$1.9	$2.1	$1.8	$3.1		$3.4	$3.6	$3.9	$4.0	$4.5	$4.1	($0.3)	$3.0	$4.8	$30.6

San Diego Urban
The Westin San Diego Gaslamp Quarter	$8.4	$8.2	$9.7	$11.2		$12.7	$14.6	$16.9	$16.0	$14.4	$14.2	($1.3)	$2.2	$12.7	$28.2
Embassy Suites San Diego Bay – Downtown	7.6	8.2	8.8	8.9		9.5	11.3	11.3	11.1	11.7	10.4	(0.2)	4.5	9.1	26.7
Solamar Hotel	5.2	6.3	6.5	6.3		6.5	7.4	7.7	7.3	7.3	7.0	(0.4)	2.1	6.2	26.4
Hilton San Diego Gaslamp Quarter	7.6	8.5	8.8	8.9		9.5	10.5	10.9	11.1	11.6	10.5	(0.4)	0.6	7.1	24.8

San Diego Total	$28.8	$31.2	$33.8	$35.3		$38.2	$43.8	$46.8	$45.5	$45.0	$42.1	($2.3)	$9.4	$35.1	$26.8

Los Angeles Urban
Le Parc Suite Hotel	$4.2	$4.5	$4.7	$5.3		$5.6	$6.1	$7.0	$6.1	$6.1	$5.8	($0.1)	$2.8	$5.5	$35.7
Viceroy Santa Monica Hotel	3.0	5.8	6.9	7.6		8.2	8.4	7.8	7.0	6.6	6.2	(2.9)	1.8	5.4	32.0
Chamberlain West Hollywood Hotel	1.0	3.4	3.8	4.1		4.8	4.8	5.2	4.4	3.1	3.7	(0.2)	1.2	3.5	30.4
Montrose West Hollywood	3.9	4.3	4.2	5.5		5.9	5.9	6.5	5.9	3.9	4.7	0.3	1.0	3.6	27.1
W Los Angeles – West Beverly Hills	5.6	6.9	8.0	8.7		8.9	9.5	12.3	11.5	10.2	8.4	(2.0)	0.7	6.8	22.9
Le Méridien Delfina Santa Monica	5.3	6.8	6.9	8.0	`	9.9	11.7	13.8	13.4	12.7	11.2	(0.8)	2.2	7.0	22.6
Mondrian Los Angeles	7.9	8.9	7.4	8.2		11.0	12.2	12.6	11.8	8.6	7.6	(2.0)	2.1	5.0	21.2
Hotel Palomar Los Angeles Beverly Hills	2.3	2.9	3.9	3.8		4.5	4.2	6.2	4.0	7.4	5.7	(4.2)	(1.2)	3.6	13.6
Hotel Ziggy	1.9	2.2	2.2	2.0		1.5	0.9	2.8	2.8	2.8	2.8	0.0	1.1	1.1	10.2

Los Angeles Total	$35.1	$45.7	$48.0	$53.2		$60.3	$63.7	$74.2	$66.9	$61.4	$56.1	($11.9)	$11.7	$41.5	$23.2

Portland Urban
The Nines, a Luxury Collection Hotel, Portland	$6.2	$8.0	$8.9	$10.8		$12.8	$15.2	$15.6	$15.8	$15.6	$13.0	($0.6)	$3.8	$8.0	$24.2
The Heathman Hotel	1.5	1.6	1.9	2.4		3.0	5.7	4.4	4.3	3.4	4.2	(0.9)	0.4	1.2	7.9
The Hotel Zags	2.7	3.3	3.9	4.5		5.6	6.5	6.7	5.4	3.8	3.3	(1.0)	(0.6)	0.4	2.3

Portland Total	$10.4	$12.9	$14.7	$17.7		$21.4	$27.4	$26.7	$25.5	$22.8	$20.5	($2.5)	$3.6	$9.6	$14.6

Washington DC Urban
George Hotel	$4.2	$4.6	$4.1	$4.1		$4.3	$5.2	$5.7	$6.3	$5.7	$5.3	($0.5)	$0.0	$3.7	$26.6
Hotel Monaco Washington DC	5.5	6.9	7.6	7.9		7.9	8.1	8.1	9.9	8.6	7.9	(1.4)	(0.5)	4.7	25.5
Viceroy Washington DC	3.3	3.6	3.4	3.2		3.2	3.0	3.6	5.8	5.5	4.9	(2.3)	(1.3)	1.1	6.2
Hotel Zena Washington DC	4.0	4.6	3.8	4.3		5.2	5.8	6.1	6.4	5.1	3.8	(2.3)	(2.7)	0.6	3.1

Washington DC Total	$17.0	$19.7	$18.9	$19.5		$20.6	$22.1	$23.5	$28.4	$24.9	$21.9	($6.5)	($4.5)	$10.1	$14.6

Chicago Urban
Hotel Chicago Downtown, Autograph Collection	$5.5	$5.3	$7.3	$8.4		$8.5	$10.4	$12.4	$12.3	$12.6	$12.2	($1.4)	$0.6	$7.4	$20.9
The Westin Michigan Avenue Chicago	14.7	15.8	16.7	16.0		18.0	19.4	17.9	13.1	12.0	9.9	(9.5)	(3.3)	6.5	8.6

Chicago Total	$20.2	$21.1	$24.0	$24.4		$26.5	$29.8	$30.3	$25.4	$24.6	$22.1	($10.9)	($2.7)	$13.9	$12.6

Seattle Urban
Hotel Monaco Seattle	$2.2	$2.9	$3.4	$5.2		$6.2	$6.7	$6.1	$6.1	$6.4	$5.6	($1.7)	($0.6)	$2.1	$11.1
Hotel Vintage Seattle	1.8	2.2	2.4	2.7		2.6	3.5	3.4	3.5	3.5	3.0	(1.5)	(0.6)	1.0	8.0

Seattle Total	$4.0	$5.1	$5.8	$7.9		$8.8	$10.2	$9.5	$9.6	$9.9	$8.6	($3.2)	($1.2)	$3.1	$9.9

San Francisco Urban
Argonaut Hotel	$5.2	$6.5	$8.5	$10.2		$11.8	$13.0	$13.0	$11.7	$12.9	$14.6	($1.5)	$1.5	$7.1	$28.2
Harbor Court Hotel San Francisco	2.7	4.0	3.7	4.9		5.8	6.1	5.6	3.9	4.3	5.6	(0.3)	(1.0)	2.0	15.3
Hotel Zephyr Fisherman’s Wharf	7.3	8.7	11.2	12.1		12.1	12.6	16.2	13.1	13.7	16.8	(1.1)	0.5	4.9	13.6
Hotel Zetta San Francisco	N/A	N/A	N/A	2.8		5.4	6.2	5.6	5.5	6.0	6.0	(0.3)	(1.4)	1.4	12.1
Hotel Zoe Fisherman’s Wharf	N/A	N/A	5.2	6.6		7.9	8.2	7.8	3.6	7.7	8.9	(1.5)	(1.7)	1.3	5.9
Hotel Zelos San Francisco	1.3	3.0	3.8	4.6		6.2	7.3	5.9	7.2	6.9	8.4	(2.5)	(4.6)	(0.1)	(0.5)
Hotel Zeppelin San Francisco	N/A	2.3	2.7	3.4		4.0	4.0	3.3	6.3	7.5	7.7	(1.2)	(1.6)	(1.2)	(6.1)
1 Hotel San Francisco	4.0	6.0	7.4	7.3		8.6	11.0	10.3	9.8	8.0	7.5	(4.0)	(4.9)	(2.9)	(14.5)

San Francisco Total	$20.5	$30.5	$42.5	$51.9		$61.8	$68.4	$67.7	$61.1	$67.0	$75.5	($12.4)	($13.2)	$12.5	$7.4

Urban Total	$178.6	$218.6	$246.0	$277.7		$316.0	$353.9	$366.7	$349.5	$341.0	$335.0	($65.0)	$26.4	$210.9	$21.8

Total Hotel EBITDA	$218.3	$266.9	$298.9	$340.8		$388.7	$441.5	$455.0	$433.0	$432.4	$466.3	($20.4)	$185.6	$393.9	$30.9


Notes:
These historical Same-Property Hotel EBITDA results include available information for all of the hotels the Company owned or had an ownership interest in as of February 21, 2023. These historical operating results include periods prior to the Company’s ownership of the hotels. The information above does not reflect the Company’s corporate general and administrative expense, interest expense, property acquisition costs, depreciation and amortization, taxes and other expenses. The parking garage at Revere Hotel Boston Common was sold on June 23, 2017. The historical results for Revere Hotel Boston Common have been adjusted to reflect the estimated impact of excluding the parking-related income. Border indicates Hotel EBITDA for the year in which the hotel was acquired by the Company. The information above has not been audited and is presented only for comparison purposes. Any differences are a result of rounding.

View source version on businesswire.com: https://www.businesswire.com/news/home/20230221005698/en/

Raymond D. Martz, Chief Financial Officer, Pebblebrook Hotel Trust – (240) 507-1330

KEYWORDS: Maryland United States North America

INDUSTRY KEYWORDS: Commercial Building & Real Estate Lodging Construction & Property Destinations REIT Travel

MEDIA:

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February 21, 2023 4:34 pm

Xperi Inc. Announces Fourth Quarter and Full Year 2022 Results

Xperi Inc. Announces Fourth Quarter and Full Year 2022 Results

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Awarded first design win for TiVo’s video platform in Connected Car

SAN JOSE, Calif.–(BUSINESS WIRE)–
Xperi Inc. (NYSE: XPER) (the “Company” or “Xperi”), an entertainment technology company that invents, develops, and delivers technologies that enable extraordinary experiences, today announced fourth quarter and full year 2022 financial results for the period ended December 31, 2022.

“Our first quarter as an independent company was underscored by substantial market progress, notable design wins, and strong financial performance,” said Jon Kirchner, chief executive officer of Xperi. “Consumers are demanding higher quality digital experiences and our customers and partners are increasingly selecting our independent media platforms to meet that demand. We are intensely focused on expanding our platform adoption and our recent design wins in Smart TV and Connected Car are a testament to the ongoing success of our growth strategy.”

Financial Highlights

Revenue of $136M during the fourth quarter was up 9% from the year-ago period, while full year 2022 revenue of $502M was up 3% from the prior year.
Fourth quarter GAAP Net Loss was ($297M), or ($7.06) per share, and non-GAAP Net Income¹ was $4M, or $0.08 per share.
Adjusted EBITDA¹ was $4M for the fourth quarter, resulting in an Adjusted EBITDA margin of 3%.
The Company booked a non-cash charge of $258M in the fourth quarter for goodwill impairment and real estate restructuring in connection with its year-end review.
Full year results include the Xperi product business on a carve-out basis for the first 9 months, during which time it was part of Xperi Holding Corporation, now known as Adeia Inc. (Nasdaq: ADEA).

¹See discussion of “Non-GAAP Financial Measures” and GAAP to non-GAAP Reconciliation below.

Recent Key Operating Achievements

Media Platform

TiVo’s partner Vestel, the first Smart TV OEM to incorporate the TiVo Operating System (TiVo OS), announced the brand lineup for their Smart TVs Powered by TiVo will be Vestel, Hitachi, JVC, Daewoo, Regal, and Telefunken. These TVs will feature chipsets from market-leader MediaTek.
TiVo OS will be integrated onto Amlogic’s 4K and 2K chipsets designed for Smart TVs, significantly reducing cost and time-to-market for TV OEMs looking to roll-out TiVo’s independent media platform.

Connected Car

Xperi was awarded its first design win for TiVo’s video platform in Connected Car with a major European automobile manufacturer, with vehicles expected to ship in late 2023.
DTS AutoStage is now in production with five car brands and being deployed in more than 100 models across 140 countries, demonstrating the global value of our solution.
The Company was awarded a new design win for DTS AutoSense, Xperi’s Driver Monitoring System (DMS) and Occupant Monitoring System (OMS), with a major Asian automotive OEM, which will significantly expand Xperi’s DMS and OMS footprint beginning in 2024.
Xperi ended 2022 with committed business in Connected Car, consisting of HD Radio, DTS AutoStage, and DTS AutoSense, totaling more than $300M.

Pay TV

TiVo IPTV continued its double-digit subscriber growth in the quarter and finished FY22 with subscribers up 80% and revenue more than doubling compared to FY21.
TiVo’s IPTV platform won the Fierce Innovation Award for Customer Engagement.

Consumer Electronics

DTS:X, Xperi’s immersive audio technology, will be integrated in LG’s new line of OLED and premium LCD TVs, expected to be in the market in the first half of 2023.
The Company announced that Sony Pictures Entertainment, IMAX Corp., and DTS have extended their agreement to distribute multiple new titles in the IMAX Enhanced format, featuring DTS’ premium audio technology.
Xperi announced DTS:X is expected to launch on Disney+ in 2023.

Financial Outlook

The Company is providing the following guidance for fiscal year 2023.

Category ($ in millions)	GAAP Outlook	Non-GAAP Outlook
Revenue	510 to 540	510 to 540
Adjusted EBITDA Margin^1,2	n/a	6% to 10%

¹ See discussion of “Non-GAAP Financial Measures” below.

²With respect to Adjusted EBITDA Margin, the Company has determined that it is unable to provide a quantitative reconciliation of this forward-looking non-GAAP measure to the most directly comparable forward-looking GAAP measure with a reasonable degree of confidence in its accuracy without unreasonable effort, as items including restructuring and impacts from discrete tax adjustments and tax law changes are inherently uncertain and depend on various factors, many of which are beyond the Company’s control.

Conference Call Information

The Company will hold its fourth quarter and full year 2022 earnings conference call at 2:00 PM Pacific Time (5:00 PM Eastern Time) on Tuesday, February 21, 2023. To access the call toll-free, please dial 1-888-660-6513, otherwise dial +1 929-203-0876. The conference ID is 5483252. All participants should dial in 15 minutes prior to the start of the conference call and can use the conference ID to access the call. The Company also suggests using the webcast link to access the call at Q4 Earnings Call Webcast.

Safe Harbor Statement

This press release contains “forward-looking statements” within the meaning of the federal securities laws, including Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are based on information available to the Company as of the date hereof, as well as the Company’s current expectations, assumptions, estimates and projections that involve risks and uncertainties. In some cases, you can identify forward-looking statements by the words “expect,” “anticipate,” “intend,” “plan,” “believe,” “could,” “seek,” “see,” “will,” “may,” “would,” “might,” “potentially,” “estimate,” “continue,” “expect,” “target,” similar expressions or the negatives of these words or other comparable terminology that convey uncertainty of future events or outcomes. These statements involve risks, uncertainties and other factors that may cause actual results, levels of activity, performance, or achievements to be materially different from the information expressed or implied by these forward-looking statements. These risks, uncertainties and other factors are described under the captions “Risk Factors,” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in the documents we file with the Securities and Exchange Commission from time to time. The Company does not assume any obligation to publicly provide revisions or updates to any forward-looking statements, whether as a result of new information, future developments or otherwise, should circumstances change, except as otherwise required by securities and other applicable laws.

About Xperi Inc.

Xperi invents, develops, and delivers technologies that enable extraordinary experiences. Xperi technologies, delivered via its brands and partnerships (DTS®, HD Radio™, TiVo®), and by its startup, Perceive, and IMAX Enhanced, an IMAX and DTS partnership, are integrated into billions of consumer devices and media platforms worldwide, powering smart devices, connected cars and entertainment experiences. Xperi has created a unified ecosystem that reaches highly engaged consumers driving increased value for partners, customers and consumers.

Xperi, DTS, HD Radio, Perceive, TiVo, and their respective logos are trademarks or registered trademarks of affiliated companies and partners of Xperi Inc. in the United States and other countries. All other company, brand and product names may be trademarks or registered trademarks of their respective companies.

Non-GAAP Financial Measures

In addition to disclosing financial results calculated in accordance with U.S. Generally Accepted Accounting Principles (GAAP), the Company’s earnings release contains non-GAAP financial measures adjusted for either one-time or ongoing non-cash acquired intangibles amortization charges; amortization of capitalized cloud computing costs; costs related to actual or planned acquisitions, financing, and divestitures including transaction fees, integration costs, severance, facility closures, and retention bonuses; separation costs; all forms of stock-based compensation; impairment of assets and goodwill; other items not indicative of our ongoing operating performance, and related tax effects for each adjustment. Management believes that the non-GAAP measures used in this release provide investors with important perspectives into the Company’s ongoing business and financial performance and provide a better understanding of our core operating results reflecting our normal business operations. The non-GAAP financial measures disclosed by the Company should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP. Our use of non-GAAP financial measures has certain limitations in that the non-GAAP financial measures we use may not be directly comparable to those reported by other companies. For example, the terms used in this press release, such as Adjusted EBITDA, do not have a standardized meaning. Other companies may use the same or similarly named measures, but exclude different items, which may not provide investors with a comparable view of our performance in relation to other companies. We seek to compensate for the limitation of our non-GAAP presentation by providing a detailed reconciliation of the non-GAAP financial measures to the most directly comparable GAAP measures in the tables attached hereto. Investors are encouraged to review the related GAAP financial measures and the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures. All financial data is presented on a GAAP basis except where the Company indicates its presentation is on a non-GAAP basis.

Set forth below are reconciliations of the Company’s reported GAAP to non-GAAP financial metrics.

SOURCE: XPERI INC.

XPER-E

XPERI INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share amounts) (unaudited)

	Three Months Ended						Twelve Months Ended
	December 31, 2022			December 31, 2021			December 31, 2022			December 31, 2021

Revenue	$	135,531		$	124,745		$	502,260		$	486,483
Operating expenses:
Cost of revenue, excluding depreciation and amortization of intangible assets		37,258			37,643			122,946			125,626
Research and development		57,713			50,498			216,355			194,869
Selling, general and administrative		60,506			51,834			217,402			199,921
Depreciation expense		4,804			5,526			20,501			22,584
Amortization expense		16,044			22,045			62,209			105,311
Impairment of long-lived assets		7,724			–			7,724			–
Goodwill Impairment		250,555			–			604,555			–
Total operating expenses		434,604			167,546			1,251,692			648,311
Operating loss		(299,073	)		(42,801	)		(749,432	)		(161,828	)
Other income, net		2,117			1,078			1,815			1,590
Loss before taxes		(296,956	)		(41,723	)		(747,617	)		(160,238	)
Provision for income taxes		1,090			10,679			13,589			18,840
Net Loss		(298,046	)		(52,402	)		(761,206	)		(179,078	)
Less: net loss attributable to noncontrolling interest		(1,016	)		(630	)		(3,722	)		(3,456	)
Net loss attributable to the Company	$	(297,030	)	$	(51,772	)	$	(757,484	)	$	(175,622	)
Loss per share attributable to the Company:
Basic and Diluted loss per share	$	(7.06	)	$	(1.23	)	$	(18.02	)	$	(4.18	)

Number of Basic and Diluted shares outstanding		42,043			42,024			42,029			42,024

XPERI INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands) (unaudited)

	December 31,			December 31,
	2022			2021
ASSETS
Current assets:
Cash and cash equivalents	$	160,127		$	120,695
Accounts receivable, net		64,712			79,494
Unbilled contracts receivable, net		65,251			50,962
Other current assets		42,174			25,985
Total current assets		332,264			277,136
Long-term unbilled contracts receivable		4,289			3,825
Property and equipment, net		47,827			57,477
Operating lease right-of-use assets		52,901			61,758
Intangible assets, net		264,376			270,934
Long-term deferred tax assets		2,096			1,847
Goodwill		–			536,512
Other long-term assets		33,158			19,223
Total assets	$	736,911		$	1,228,712
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	14,864		$	7,362
Accrued liabilities		110,014			84,404
Deferred revenue		25,363			28,211
Total current liabilities		150,241			119,977
Deferred revenue, less current portion		19,129			23,663
Long-term deferred tax liabilities		20,559			14,428
Long-term debt		50,000			–
Noncurrent operating lease liabilities		42,666			49,017
Other long-term liabilities		5,330			5,670
Total liabilities		287,925			212,755
Commitments and contingencies
Company stockholders’ equity:
Net investment by Former Parent		–			1,025,838
Preferred stock		–			–
Common stock		42			–
Additional paid-in capital		1,136,330			–
Accumulated other comprehensive loss		(4,119	)		(676	)
Accumulated deficit		(668,835	)		–
Total Company stockholders’ equity		463,418			1,025,162
Noncontrolling interest		(14,432	)		(9,205	)
Total equity		448,986			1,015,957
Total liabilities and equity	$	736,911		$	1,228,712

XPERI INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (unaudited)

	Twelve Months Ended
	December 31, 2022			December 31, 2021
Cash flows from operating activities:
Net loss	$	(761,206	)	$	(179,078	)
Adjustments to reconcile net loss to net cash from operating activities:
Depreciation of property and equipment		20,501			22,584
Amortization of intangible assets		62,209			105,311
Stock-based compensation expense		45,303			33,509
Goodwill impairment		604,555			–
Impairment of long-lived assets		7,724			–
Deferred income taxes		(1,602	)		6,913
Other		24			(1,754	)
Changes in operating assets and liabilities:
Accounts receivable		17,505			(2,416	)
Unbilled contracts receivable		(12,473	)		15,475
Other assets		(20,439	)		15,296
Accounts payable		6,633			(4,018	)
Accrued and other liabilities		11,123			(37,249	)
Deferred revenue		(8,302	)		1,974
Net cash from operating activities		(28,445	)		(23,453	)
Cash flows from investing activities:
Purchases of property and equipment		(14,207	)		(8,893	)
Purchases of intangible assets		(166	)		(186	)
Net cash paid for acquisitions		(50,473	)		(12,401	)
Net cash from investing activities		(64,846	)		(21,480	)
Cash flows from financing activities:
Net proceeds from capital contributions by Former Parent		83,235			–
Net transfers from Former Parent		52,802			83,330
Withholding taxes related to net share settlement of restrict awards		(286	)		–
Net cash from financing activities		135,751			83,330
Effect of exchange rate changes on cash and cash equivalents		(3,028	)		(3,326	)
Net increase in cash and cash equivalents		39,432			35,071
Cash and cash equivalents at beginning of period		120,695			85,624
Cash and cash equivalents at end of period	$	160,127		$	120,695
Supplemental disclosure of cash flow information:
Debt incurred in connection with acquisition	$	50,000		$	–
Interest paid	$	756		$	–
Income taxes paid, net of refunds	$	13,416		$	11,801

XPERI INC. GAAP TO NON-GAAP RECONCILIATIONS (in thousands, except per share amounts) (unaudited)

Net income attributable to the Company:
	Three Months Ended
	December 31, 2022

GAAP net loss attributable to the Company	$	(297,030	)

Adjustments to GAAP net loss attributable to the Company:
Stock-based compensation expense:
Cost of revenue		729
Research, development and other		5,266
Selling, general and administrative		9,547
Amortization of intangible assets		16,044
Impairment of long-lived assets		7,724
Goodwill impairment		250,555
Acquisition and separation-related costs:
Transaction and other related costs recorded in selling, general and administrative		2,234
Severance and retention recorded in research, development and other		2,009
Severance and retention recorded in selling, general and administrative		291
Separation-related bonus adjustment recorded in cost of revenue, excluding depreciation and amortization of intangible assets		(24	)
Separation-related bonus adjustment recorded in research and development		(67	)
Separation-related bonus adjustment recorded in selling, general and administrative		91
Non-GAAP tax adjustment (1)		6,340
Non-GAAP net income attributable to the Company	$	3,709


Diluted earnings per share attributable to the Company:
	Three Months Ended
	December 31, 2022

GAAP loss per share attributable to the Company	$	(7.06	)

Adjustments to GAAP loss per share attributable to the Company:
Stock-based compensation expense		0.37
Amortization expense		0.38
Impairment of long-lived assets		0.18
Goodwill impairment		5.96
Acquisition and separation-related costs		0.11
Non-GAAP tax adjustment		0.15
Difference in shares used in the calculation		(0.01	)
Non-GAAP diluted earnings per share attributable to the Company	$	0.08

GAAP weighted average number of shares-basic/diluted		42,043
Non-GAAP weighted average number of shares-diluted		46,470

(1)

The provision for income taxes is adjusted to reflect the net direct and indirect income tax effects of the various non-GAAP pretax adjustments.

XPERI INC. GAAP TO NON-GAAP RECONCILIATIONS (in thousands) (unaudited)

	Three Months Ended
	December 31, 2022

GAAP loss before taxes	$	(296,956	)

Interest expense		839
Depreciation expense		4,804
Amortization of intangible assets		16,044
Amortization of capitalized cloud computing costs		527
Impairment of long-lived assets		7,724
Goodwill impairment		250,555
Acquisition and integration-related costs:
Transaction and other related costs recorded in selling, general and administrative		2,234
Severance and retention recorded in research and development		2,009
Severance and retention recorded in selling, general and administrative		291
Separation-related bonus adjustment recorded in cost of revenue, excluding depreciation and amortization of intangible assets		(24	)
Separation-related bonus adjustment recorded in research and development		(67	)
Separation-related bonus adjustment recorded in selling, general and administrative		91
Stock-based compensation expense:
Cost of revenue		729
Research and development		5,266
Selling, general and administrative		9,547
Non-GAAP Adjusted EBITDA	$	3,613

View source version on businesswire.com: https://www.businesswire.com/news/home/20230221005738/en/

Xperi Investor Contact:

Mike Iburg

VP, Investor Relations

+1 408-321-3827

[email protected]

Media Contact:

Amy Brennan

Senior Director, Corporate Communications

+1 949-518-6846

[email protected]

KEYWORDS: California United States North America

INDUSTRY KEYWORDS: Software Hardware TV and Radio Consumer Electronics Technology Semiconductor Other Technology Entertainment

MEDIA:

Logo

February 21, 2023 4:33 pm

Stitch Fix Announces Date for Second Quarter 2023 Earnings Release and Conference Call

SAN FRANCISCO, Feb. 21, 2023 (GLOBE NEWSWIRE) — Stitch Fix, Inc. (NASDAQ: SFIX), the trusted online personal stylist, today announced that it will release financial results for its second quarter fiscal year 2023 ended January 28, 2023 after market close on Tuesday, March 7, 2023 followed by a conference call at 2:00 p.m. PT / 5:00 p.m. ET to discuss Stitch Fix’s financial results and outlook. The call will be hosted by Katrina Lake, Interim CEO, and Dan Jedda, CFO.

A live webcast of the call will be accessible on the investor relations section of the Stitch Fix website at https://investors.stitchfix.com. To access the call by phone, please register at this registration link. Upon registration, telephone participants will receive the dial-in number along with a unique PIN number that can be used to access the call. A replay of the webcast will also be available for a limited time at https://investors.stitchfix.com.

About Stitch Fix, Inc.

Stitch Fix combines the human touch of expert stylists with the precision of advanced data science to make online personal styling accessible to everyone. Stitch Fix helps millions of clients across the United States and United Kingdom find clothing and accessories they love through a unique model that can extend far beyond the closet to define the future of shopping. For more, visit https://www.stitchfix.com.

IR Contact:

Hayden Blair
[email protected]

PR Contact:

Kathryn Hull
[email protected]

February 21, 2023 4:33 pm

Revolution Medicines to Report Financial Results for Fourth Quarter and Full Year 2022 After Market Close on February 27, 2023

REDWOOD CITY, Calif., Feb. 21, 2023 (GLOBE NEWSWIRE) — Revolution Medicines, Inc. (Nasdaq: RVMD), a clinical-stage oncology company developing novel targeted therapies for RAS-addicted cancers, today announced that it will report financial results for the fourth quarter and full year 2022 on Monday, February 27, 2023, after market close. At 4:30 p.m. Eastern Time that day (1:30 p.m. Pacific Time), Revolution Medicines’ senior management team will host a webcast to discuss the financial results for the quarter and full year, and provide an update on corporate progress.

To listen to the live webcast, or access the archived webcast, please visit: https://ir.revmed.com/events-and-presentations. Following the live webcast, a replay will be available on the company’s website for at least 14 days.

About Revolution Medicines, Inc.

Revolution Medicines is a clinical-stage oncology company developing novel targeted therapies for RAS-addicted cancers. The company’s R&D pipeline comprises RAS(ON) Inhibitors designed to suppress diverse oncogenic variants of RAS proteins, and RAS Companion Inhibitors for use in combination treatment strategies. The company’s RAS(ON) Inhibitors RMC-6236 (RAS^MULTI) and RMC-6291 (KRAS^G12C) are currently in clinical development. Additional RAS(ON) Inhibitors in the company’s pipeline include RMC-9805 (KRAS^G12D) and RMC-0708 (KRAS^Q61H), both of which are currently in IND-enabling development, RMC-8839 (KRAS^G13C), and additional compounds targeting other RAS variants. RAS Companion Inhibitors currently in clinical development include RMC-4630 (SHP2) and RMC-5552 (mTORC1/4EBP1).

Contacts:

For Investors:
Vida Strategic Partners
Stephanie Diaz 
415-675-7401
[email protected]

For Media:
Vida Strategic Partners
Tim Brons
415-675-7402
[email protected]

February 21, 2023 4:32 pm

The Hackett Group Announces Fourth Quarter 2022 Results

The Hackett Group Announces Fourth Quarter 2022 Results

MIAMI–(BUSINESS WIRE)–
The Hackett Group, Inc. (NASDAQ: HCKT), a leading benchmarking, research advisory and strategic consultancy firm that enables organizations to achieve Digital World Class^™ performance, today announced its financial results for the fourth quarter, which ended on December 30, 2022.

Financial Highlights

Total revenue in the fourth quarter of 2022 was $70.1 million and revenue before reimbursements was $68.8 million, which exceeded the high end of our guidance. This compares to total revenue of $70.2 million and revenue before reimbursements of $69.8 million in the fourth quarter of the prior year.
GAAP diluted earnings per share was $0.31 in the fourth quarter of 2022, as compared to $0.50 in the fourth quarter of 2021. GAAP results for the fourth quarter of 2021 included a $7.7 million, or $0.23 per diluted share, tax benefit related to the exercise of 2.9 million outstanding share appreciation rights (SARs).
Adjusted diluted earnings per share, a non-GAAP measure, was $0.36, exceeding the high end of our guidance, as compared to $0.56 in the fourth quarter of 2021. Adjusted diluted earnings per share in the fourth quarter of 2021 included a $7.7 million, or $0.23 per diluted share, tax benefit related to the exercise of 2.9 million outstanding SARs. Excluding this non-recurring tax benefit, adjusted diluted earnings per share in the prior year was $0.33. Adjusted financial information is provided to enhance the understanding of the Company’s financial performance and is reconciled to the Company’s GAAP information in the accompanying tables.
During the fourth quarter of 2022, the Company completed its “Dutch auction” tender offer through which it repurchased 4.9 million shares for a total cost of $115 million, or $23.50 per share, excluding transaction related fees. As of the end of the fourth quarter, the Company’s remaining share repurchase program authorization was $14.7 million.
As of the end of the quarter, the Company had $60.0 million outstanding on its credit facility.
Subsequent to the end of the fourth quarter, the Company’s Board of Directors declared its first quarter 2023 dividend of $0.11 per share for its shareholders of record on March 24, 2023, to be paid on April 7, 2023.

“In spite of the increasing macro-economic headwinds we experienced during the second half of the year, we reported strong annual operating results with operating income up 19% for the year,” stated Ted A. Fernandez, Chairman & CEO of The Hackett Group, Inc. “We achieved our results while continuing to increase our investments in program development and sales resources for our expanding IP as-a-Service, research advisory and market intelligence offerings, which were up over 20% for the year.”

Business Outlook for the First Quarter of 2023

Based on the Company’s current outlook:

The Company estimates total revenue before reimbursements for the first quarter of 2023 will be in the range of $69.0 million to $70.5 million.
The Company estimates adjusted diluted earnings per share for the first quarter of 2023 to be in the range of $0.35 and $0.38, assuming a GAAP effective tax rate of 22%.

Conference Call and Webcast Details

On Tuesday, February 21, 2023, senior management will discuss fourth quarter results in a conference call at 5:00 P.M. ET. The number for the conference call is (800) 593-0486, [Passcode: Fourth Quarter]. For International callers, please dial (517) 308-9371. Please dial in at least 5-10 minutes prior to start time. If you are unable to participate on the conference call, a rebroadcast will be available beginning at 8:00 P.M. ET on Tuesday, February 21, 2023 and will run through 5:00 P.M. ET on Tuesday, March 7, 2023. To access the rebroadcast, please dial (866) 510-4837. For International callers, please dial (203) 369-1943.

In addition, The Hackett Group will also be webcasting this conference call live. To participate, simply visit http://www.thehackettgroup.com/about/investor-relations/ approximately 10 minutes prior to the start of the call and click on the conference call link provided. An online replay of the call will be available after 8:00 P.M. ET on Tuesday, February 21, 2023 and will run through 5:00 P.M. ET on Tuesday, March 7, 2023. To access the replay, visit www.thehackettgroup.com.

Use of Non-GAAP Financial Measures

The Company provides adjusted earnings results (which exclude the loss from discontinued operations, non-cash stock based compensation expense, acquisition-related compensation expense, acquisition-related non-cash stock based compensation expense, restructuring charges and reversals, amortization of intangible assets and includes a GAAP tax rate) as a complement to results provided in accordance with Generally Accepted Accounting Principles (GAAP). These non-GAAP results are provided to enhance the users’ overall understanding of the Company’s current financial performance and its prospects for the future. The Company believes the non-GAAP results provide useful information to both management and investors and by excluding certain expenses that it believes are not indicative of its core operating results. The non-GAAP measures are included to provide investors and management with an alternative method for assessing operating results in a manner that is focused on the performance of its ongoing primary operations and to provide a consistent basis for comparison between quarters. Further, these non-GAAP results are one of the primary indicators management uses for planning and forecasting. The presentation of this additional non-GAAP information should be considered in addition to, and not as a substitute for or superior to, any results prepared in accordance with GAAP. See the reconciliation of actual results titled “Reconciliation of GAAP to Non-GAAP Measures” in the accompanying tables.

The Company believes that the presentation of non-GAAP financial information on a forward-looking basis, including the guidance contained in this release, provides important supplemental information to management and investors regarding its anticipated results of operations. The Company is unable to provide a reconciliation of GAAP measures to corresponding forward-looking non-GAAP measures without unreasonable effort due to the high variability and low visibility of most of the items that have been excluded from these non-GAAP measures. For example, non-cash stock-based compensation expense is impacted by the Company’s future hiring needs, the type and volume of equity awards necessary for such future hiring, and the price at which the Company’s stock will trade in those future periods. In addition, the provision or benefit for income taxes is impacted by non-recurring income tax adjustments, valuation allowance on deferred tax assets, and the income tax effect of non-GAAP exclusions. The effects of these reconciling items may be significant, as the items that are being excluded are difficult to predict.

About The Hackett Group

The Hackett Group, Inc. (NASDAQ: HCKT) is a leading benchmarking, research advisory and strategic consultancy firm that enables organizations to achieve Digital World Class^™ performance.

Drawing upon our unparalleled intellectual property from more than 25,000 benchmark studies and our Hackett-Certified^® best practices repository from the world’s leading businesses – including 97% of the Dow Jones Industrials, 93% of the Fortune 100, 73% of the DAX 30 and 52% of the FTSE 100 – captured through our leading benchmarking platform, Quantum Leap^® and our Digital Transformation Platform, we accelerate digital transformations, including enterprise cloud implementations.

More information on The Hackett Group is available at: www.thehackettgroup.com, [email protected], or by calling (770) 225-3600.

The Hackett Group, Hackett-Certified, quadrant logo, World Class Defined and Enabled, Quantum Leap and Digital Excelleration are the registered marks of The Hackett Group.

Cautionary Statement Regarding “Forward-Looking” Statements

This release contains “forward-looking” statements within the meaning of Section 27A of the Securities Act of 1933 as amended and Section 21E of the Securities Exchange Act of 1934, as amended. Statements including without limitation, words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” seeks,” “estimates,” or other similar phrases or variations of such words or similar expressions indicating, present or future anticipated or expected occurrences or outcomes are intended to identify such forward-looking statements. Forward-looking statements are not statements of historical fact and involve known and unknown risks, uncertainties and other factors that may cause the Company’s actual results, performance or achievements to be materially different from the results, performance or achievements expressed or implied by the forward-looking statements. Factors that may impact such forward-looking statements include without limitation, the ability of The Hackett Group to effectively market its digital transformation and other consulting services, competition from other consulting and technology companies that may have or develop in the future, similar offerings, the commercial viability of The Hackett Group and its services as well as other risk detailed in The Hackett Group’s reports filed with the United States Securities and Exchange Commission. The Hackett Group does not undertake any duty to update this release or any forward-looking statements contained herein.

The Hackett Group, Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
*(in thousands, except per share data)*
*(unaudited)*
	Quarter Ended						Twelve Months Ended
	December 30,			December 31,			December 30,			December 31,
		2022			2021			2022			2021
Revenue:
Revenue before reimbursements	$	68,817		$	69,776		$	289,688		$	277,583
Reimbursements		1,300			456			4,054			1,226
Total revenue		70,117			70,232			293,742			278,809

Costs and expenses:
Cost of service:
Personnel costs before reimbursable expenses (includes $1,401, $6,201, $1,470 and $6,766 of non-cash stock based compensation expense in the quarters and twelve months ended December 30, 2022 and December 31, 2021, respectively)		39,208			42,301			174,112			171,920
Reimbursable expenses		1,300			456			4,054			1,226
Total cost of service		40,508			42,757			178,166			173,146

Selling, general and administrative costs (includes $1,038, $4,066, $841 and $3,356 of non-cash stock based compensation expense in the quarters and twelve months ended December 30, 2022 and December 31, 2021, respectively)		15,986			15,474			60,979			59,187
Restructuring charge and asset impairment		–			–			(651	)		–
Total costs and operating expenses		56,494			58,231			238,494			232,333

Operating income		13,623			12,001			55,248			46,476

Other expense, net:
Interest expense, net		(74	)		(19	)		(144	)		(95	)

Income from continuing operations before income taxes		13,549			11,982			55,104			46,381
Income tax expense (benefit) (1)		3,833			(4,539	)		14,302			4,829
Income from continuing operations		9,716			16,521			40,802			41,552
Loss from discontinued operations (net of taxes)		–			–			–			(7	)
Net income	$	9,716		$	16,521		$	40,802		$	41,545

Weighted average common shares outstanding:
Basic		30,812			29,970			31,400			30,021
Diluted		31,474			32,916			31,962			32,883

GAAP basic net income per common share:
Income per common share from continuing operations	$	0.32		$	0.55		$	1.30		$	1.38
Loss per common share from discontinued operations		–			–			–			(0.00	)
GAAP basic net income per common share	$	0.32		$	0.55		$	1.30		$	1.38

GAAP diluted net income per common share:
Income per common share from continuing operations	$	0.31		$	0.50		$	1.28		$	1.26
Loss per common share from discontinued operations		–			–			–			(0.00	)
GAAP diluted net income per common share	$	0.31		$	0.50		$	1.28		$	1.26

(1) The fourth quarter and full year of 2021 included a tax benefit of $7.7 million related to the exercise of 2.9 million SARs.

The Hackett Group, Inc.
CONDENSED CONSOLIDATED BALANCE SHEETS
*(in thousands)*
*(unaudited)*
	December 30,		December 31,
		2022		2021
ASSETS
Current assets:
Cash	$	30,255	$	45,794
Accounts receivable and contract assets, net		48,376		50,616
Prepaid expenses and other current assets		2,535		5,766
Total current assets		81,166		102,176
Property and equipment, net		19,359		18,026
Other assets		268		620
Goodwill		83,502		85,070
Operating lease right-of-use assets		698		1,649
Total assets	$	184,993	$	207,541

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	8,741	$	7,677
Accrued expenses and other liabilities		36,712		30,297
Contract liabilities (deferred revenue)		13,278		14,616
Operating lease liabilities		870		2,299
Total current liabilities		59,601		54,889
Long-term deferred tax liability, net		6,877		7,325
Long-term debt		59,653		–
Operating lease liabilities		584		1,474
Total liabilities		126,715		63,688

Shareholders’ equity		58,278		143,853
Total liabilities and shareholders’ equity	$	184,993	$	207,541

The Hackett Group, Inc.
SEGMENT PROFIT
*(in thousands)*
*(unaudited)*

		Quarter Ended				Twelve Months Ended
		December 30,		December 31,		December 30,			December 31,
			2022		2021		2022			2021
	Global S&BT (1):
	Total revenue (4)	$	40,901	$	39,268	$	169,660		$	146,224
	Segment profit (5)		15,380		14,805		61,319			49,321
	Oracle Solutions (2):
	Total revenue (4)	$	17,155	$	19,123	$	76,320		$	74,886
	Segment profit (5)		3,188		3,554		15,335			15,662
	SAP Solutions (3):
	Total revenue (4)	$	12,061	$	11,841	$	47,762		$	57,699
	Segment profit (5)		3,589		3,352		12,827			18,843
	Total Company:
	Total revenue (4)	$	70,117	$	70,232	$	293,742		$	278,809

	Total segment profit	$	22,157	$	21,711	$	89,481		$	83,826
	Items not allocated to segment level (5):
	Corporate general and administrative expenses		5,281		6,357		21,180			22,840
	Non-cash stock based compensation expense		2,439		2,311		10,267			10,122
	Acquisition-related compensation expense		–		–		–			11
	Depreciation and amortization		814		1,042		3,437			4,377
	Restructuring charge and asset impairment		–		–		(651	)		–
	Interest expense, net		74		19		144			95
	Income from continuing operations before taxes	$	13,549	$	11,982	$	55,104		$	46,381

	(1) Global S&BT includes the results of our strategic businesses consulting practices, including S&BT Consulting, Benchmarking, Business Advisory Services, IP as-a-Service and OneStream.
	(2) Oracle Solutions includes the results of our EPM/ERP and AMS practices.
	(3) SAP Solutions includes the results of our SAP applications and related SAP service offerings.
	(4) Total revenue includes reimbursable expenses, which are project travel-related expenses passed through to a client with no associated operating margin.
	(5) Segment profits consist of the revenue generated by the segment, less the direct costs of revenue and selling, general and administrative expenses that are incurred directly by the segment. Items not allocated to the segment level include corporate costs related to administrative functions that are performed in a centralized manner that are not attributable to a particular segment. These administrative function costs include corporate general and administrative expenses, non-cash stock based compensation, depreciation and amortization expense, restructuring charge and asset impairment and interest expense. Corporate general and administrative expenses primarily include costs related to business support functions including accounting and finance, human resources, legal, information technology and office administration. Corporate general and administrative expenses exclude one-time, non-recurring expenses and benefits.

The Hackett Group, Inc.
RECONCILIATION OF GAAP TO NON-GAAP MEASURES
*(in thousands, except per share data)*
*(unaudited)*

	Quarter Ended				Twelve Months Ended
	December 30,		December 31,		December 30,			December 31,
		2022		2021		2022			2021
GAAP NET INCOME	$	9,716	$	16,521	$	40,802		$	41,545
Adjustments (1):
Loss from discontinued operations		–		–		–			7
Non-cash stock based compensation expense (2)		2,436		2,283		10,252			9,716
Acquisition-related compensation expense (3)		–		–		–			11
Acquisition-related non-cash stock based compensation expense (3)		3		28		15			406
Restructuring charge and asset impairment		–		–		(651	)		–
Amortization of intangible assets (4)		–		233		154			1,016
ADJUSTED NET INCOME BEFORE INCOME TAXES ON ADJUSTMENTS (1)		12,155		19,065		50,572			52,701
Tax effect of adjustments above (5)		687		646		2,562			2,796
ADJUSTED NET INCOME (1)	$	11,468	$	18,419	$	48,010		$	49,905

GAAP diluted net income per common share	$	0.31	$	0.50	$	1.28		$	1.26
Adjusted diluted net income per common share (1)	$	0.36	$	0.56	$	1.50		$	1.52
Weighted average common and common equivalent shares outstanding		31,474		32,916		31,962			32,883

(1) The Company provides adjusted earnings results (which exclude the loss from discontinued operations, non-cash stock based compensation expense, acquisition-related compensation expense, acquisition-related non-cash stock based compensation expense, restructuring charge and asset impairment, amortization of intangible assets and include a GAAP tax rate) as a complement to results provided in accordance with Generally Accepted Accounting Principles (GAAP). These non-GAAP results are provided to enhance the users’ overall understanding of the Company’s current financial performance and its prospects for the future. The Company believes the non-GAAP results provide useful information to both management and investors and by excluding certain expenses that it believes are not indicative of its core operating results. The non-GAAP measures are included to provide investors and management with an alternative method for assessing operating results in a manner that is focused on the performance of ongoing operations and to provide a more consistent basis for comparison between quarters. Further, these non-GAAP results are one of the primary indicators management uses for planning and forecasting in future periods. In addition, since the Company has historically reported non-GAAP results to the investment community, it believes the continued inclusion of non-GAAP results provides consistency in its financial reporting. The presentation of this additional information should not be considered in isolation or as a substitute for results prepared in accordance with GAAP.
(2) Non-cash stock based compensation expense is accounted for under Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation-Stock Compensation. The Company excludes non-cash stock based compensation expense and the related tax effects for the purposes of adjusted net income and adjusted diluted earnings per share. The Company believes that non-GAAP measures of profitability, which exclude non-cash stock based compensation expense, are widely used by investors.
(3) The Company incurs cash and non-cash stock based compensation expense for acquisition related consideration that is recognized over time under GAAP. The Company believes excluding these amounts more consistently presents its ongoing results of operations because they are related to acquisitions and not due to normal operating activities. The acquisition-related non-cash stock based compensation expense is also accounted for under Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation-Stock Compensation.
(4) The Company has incurred expense on amortization of intangible assets related to various acquisitions. The Company excludes the effect of the amortization of intangibles from our adjusted results in order to more consistently present its ongoing results of operations.
(5) The adjustment for the income tax expense is based on the accounting treatment and income tax rate for the jurisdiction of each item. For the quarter end periods the impact of non-cash stock based compensation expense was $0.7 million and $0.6 million in 2022 and 2021, respectively and the impact of intangible amortization was $46 thousand in 2021. For the twelve month periods the impact of non-cash stock based compensation expense was $2.7 million and $2.5 million in 2022 and 2021, respectively; the impact of intangible amortization was $32 thousand and $201 thousand in 2022 and 2021, respectively and the impact on the restructuring charge was $172 thousand in 2022.

The Hackett Group, Inc.
SUPPLEMENTAL FINANCIAL DATA
*(unaudited)*

	Quarter Ended
	December 30,			September 30,			December 31,
		2022			2022			2021
*Revenue Concentration:*
(% of total revenue)
Top customer		5	%		7	%		6	%
Top 5 customers		16	%		18	%		15	%
Top 10 customers		26	%		26	%		22	%

*Key Metrics and Other Financial Data:*

Total Company:
Consultant headcount		1,120			1,121			1,106
Total headcount		1,345			1,342			1,308
Days sales outstanding (DSO)		63			66			66
Cash provided by operating activities (in thousands)	$	24,827		$	9,789		$	19,885
Depreciation (in thousands)	$	814		$	838		$	809
Amortization (in thousands)	$	–		$	–		$	233
Capital expenditures (in thousands)	$	1,494		$	896		$	986

Remaining Plan authorization:
Shares purchased (in thousands) (1)		4,889			–			10
Cost of shares repurchased (in thousands) (1)	$	115,937		$	—		$	224
Average price per share of shares purchased	$	23.71		$	—		$	21.64
Remaining Plan authorization (in thousands) (2)	$	14,672		$	10,609		$	11,244

Shares Purchased to Satisfy Employee Net Vesting Obligations:
Shares purchased (in thousands)		31			3			998
Cost of shares purchased (in thousands)	$	646		$	69		$	19,767
Average price per share of shares purchased	$	20.93		$	21.05		$	19.81

(1) Includes the shares repurchased through the Tender Offer transaction in December from which the Company acquired 4.9 million shares at $23.71 per share, or $115.9 million, inclusive of transaction related fees.
(2) The Company’s Board of Directors approved an additional $120.0 million to its share repurchase plan in November 2022.

View source version on businesswire.com: https://www.businesswire.com/news/home/20230221005740/en/

Robert A. Ramirez, CFO, 305-375-8005 or [email protected]

KEYWORDS: United States North America Florida

INDUSTRY KEYWORDS: Professional Services Data Management Other Professional Services Technology Other Technology Networks Consulting

MEDIA:

February 21, 2023 4:32 pm

Public Storage Reports Results for the Fourth Quarter and Year Ended December 31, 2022

Public Storage Reports Results for the Fourth Quarter and Year Ended December 31, 2022

GLENDALE, Calif.–(BUSINESS WIRE)–
Public Storage (NYSE:PSA) announced today operating results for the fourth quarter and year ended December 31, 2022.

“Public Storage’s industry-leading platform achieved record financial results in 2022,” said Joe Russell, President and Chief Executive Officer. “I want to thank the entire team for their focus and determination throughout the year. We enter 2023 in a position of strength, with our digital and operating model transformation enhancing the industry’s highest direct operating margins, strong-growth properties in our non-same store pool comprising more than 25% of the portfolio, and a balance sheet positioned to fund broad opportunity across acquisitions, development, and redevelopment. Our ability to drive unmatched levels of performance and profitability uniquely positions us for growth and value creation into the future.”

Highlights for the Three Months Ended December 31, 2022

Reported net income allocable to common shareholders of $2.06 per diluted share.
Reported core FFO allocable to common shareholders (“Core FFO”) of $4.16 per diluted share, an increase of 17.5% relative to the same period in 2021. We sold our entire equity investment in PS Business Parks, Inc. (“PSB”) in July 2022 and since then no longer recognize any further equity in earnings of PSB. Core FFO per diluted share increased 22.4% excluding the contribution from our equity investment in PSB to Core FFO per diluted share.
Increased Same Store (as defined below) direct net operating income by 15.0%, resulting from a 13.0% increase in Same Store revenues.
Achieved 81.2% Same Store direct net operating income margin, an increase of 1.8% relative to the same period in 2021.
Acquired 30 self-storage facilities with 1.6 million net rentable square feet for $228.6 million. Subsequent to December 31, 2022, we acquired or were under contract to acquire eight self-storage facilities with 0.5 million net rentable square feet, for $70.5 million.
Opened three newly developed facilities and completed various expansion projects with 0.5 million net rentable square feet costing $101.2 million. At December 31, 2022, we had various facilities in development and expansion with 4.6 million net rentable square feet estimated to cost $979.6 million.

Highlights for the Year Ended December 31, 2022

Reported net income allocable to common shareholders of $23.50 per diluted share.
Reported Core FFO of $15.92 per diluted share, an increase of 23.1% from 2021. Core FFO per diluted share increased 26.1% excluding the contribution from our equity investment in PSB to Core FFO per diluted share.
Increased Same Store direct net operating income by 17.1%, resulting from a 14.8% increase in Same Store revenues.
Acquired 74 self-storage facilities with 4.7 million net rentable square feet for $730.5 million.
Opened eight newly developed facilities and various expansion projects with 1.4 million net rentable square feet costing $227.2 million.
Distributed a one-time dividend of $13.15 per common share, totaling $2.3 billion, in August 2022 in connection with the sale of our equity investment in PSB, upon completion of its merger transaction with affiliates of Blackstone Real Estate on July 20, 2022.

Operating Results for the Three Months Ended December 31, 2022

For the three months ended December 31, 2022, net income allocable to our common shareholders was $362.6 million or $2.06 per diluted common share, compared to $558.1 million or $3.17 per diluted common share in the same period in 2021, representing a decrease of $195.5 million or $1.11 per diluted common share. The decrease is due primarily to (i) a $177.2 million decrease in foreign currency exchange gains and losses primarily associated with our Euro denominated notes payable and (ii) a $143.9 million decrease in equity in earnings of unconsolidated real estate entities due to the sale of our equity investment in PSB, partially offset by (iii) a $137.7 million increase in self-storage net operating income.

The $137.7 million increase in self-storage net operating income in the three months ended December 31, 2022 as compared to the same period in 2021 is a result of an $87.2 million increase attributable to our Same Store Facilities and a $50.5 million increase attributable to our Non-Same Store Facilities (as defined below). Revenues for the Same Store Facilities increased 13.0% or $94.4 million in the three months ended December 31, 2022 as compared to the same period in 2021, due primarily to higher realized annual rent per occupied square foot, partially offset by a decline in occupancy. Cost of operations for the Same Store Facilities increased by 4.1% or $7.2 million in the three months ended December 31, 2022 as compared to the same period in 2021, due primarily to increased property tax expense, marketing expense, and other direct property costs, partially offset by a decrease in on-site property manager payroll expense. The increase in net operating income of $50.5 million for the Non-Same Store Facilities is due primarily to the impact of facilities acquired in 2021 and the fill-up of recently developed and expanded facilities.

Operating Results for the Year Ended December 31, 2022

For 2022, net income allocable to our common shareholders was $4,142.3 million or $23.50 per diluted common share, compared to $1,732.4 million or $9.87 per diluted common share in 2021, representing an increase of $2,409.9 million or $13.63 per diluted common share. The increase is due primarily to (i) a $2.1 billion gain on sale of our equity investment in PSB and (ii) a $614.3 million increase in self-storage net operating income, partially offset by (iii) a $174.7 million increase in depreciation and amortization expense, (iv) a $125.1 million decrease in equity in earnings of unconsolidated real estate entities due to sale of our equity investment in PSB, and (v) a $45.5 million increase in interest expense.

The $614.3 million increase in self-storage net operating income in 2022 as compared to 2021 is a result of a $370.1 million increase attributable to our Same Store Facilities and a $244.2 million increase attributable to our Non-Same Store Facilities. Revenues for the Same Store Facilities increased 14.8% or $409.9 million in 2022 as compared to 2021, due primarily to higher realized annual rent per occupied square foot, partially offset by a decline in occupancy. Cost of operations for the Same Store Facilities increased by 5.7% or $39.9 million in 2022 as compared to 2021, due primarily to increased property tax expense, on-site property manager payroll expense, marketing expense, other direct property costs, and centralized management costs. The increase in net operating income of $244.2 million for the Non-Same Store Facilities is due primarily to the impact of facilities acquired in 2021 and the fill-up of recently developed and expanded facilities.

Funds from Operations

Funds from Operations (“FFO”) and FFO per share are non-GAAP measures defined by the Nareit. We believe that FFO and FFO per share are useful to REIT investors and analysts in measuring our performance because Nareit’s definition of FFO excludes items included in net income that do not relate to or are not indicative of our operating and financial performance. FFO represents net income before depreciation and amortization, which is excluded because it is based upon historical costs and assumes that building values diminish ratably over time, while we believe that real estate values fluctuate due to market conditions. FFO also excludes gains or losses on sale of real estate assets and real estate impairment charges, which are also based upon historical costs and are impacted by historical depreciation. FFO and FFO per share are not a substitute for net income or earnings per share. FFO is not a substitute for net cash flow in evaluating our liquidity or ability to pay dividends, because it excludes investing and financing activities presented on our consolidated statements of cash flows. In addition, other REITs may compute these measures differently, so comparisons among REITs may not be helpful.

For the three months ended December 31, 2022, FFO was $3.38 per diluted common share as compared to $3.67 in the same period in 2021, representing a decrease of 7.9%.

For the year ended December 31, 2022, FFO was $16.46 per diluted common share, as compared to $13.36 in the same period in 2021, representing an increase of 23.2%.

We also present “Core FFO” and “Core FFO per share,” non-GAAP measures that represent FFO and FFO per share excluding the impact of (i) foreign currency exchange gains and losses, (ii) charges related to the redemption of preferred securities, and (iii) certain other non-cash and/or nonrecurring income or expense items primarily representing, with respect to the periods presented below, the impact of loss contingency accruals and casualties, unrealized gain on private equity investments and our equity share of merger transaction costs, severance of a senior executive, lease termination income, and casualties from our equity investees. We review Core FFO and Core FFO per share to evaluate our ongoing operating performance, and we believe they are used by investors and REIT analysts in a similar manner. However, Core FFO and Core FFO per share are not substitutes for net income and net income per share. Because other REITs may not compute Core FFO or Core FFO per share in the same manner as we do, may not use the same terminology, or may not present such measures, Core FFO and Core FFO per share may not be comparable among REITs.

The following table reconciles net income to FFO and Core FFO and reconciles diluted earnings per share to FFO per share and Core FFO per share (unaudited):

	Three Months Ended December 31,								Year Ended December 31,
		2022			2021		Percentage Change			2022			2021		Percentage Change

	(Amounts in thousands, except per share data)
Reconciliation of Net Income to FFO and Core FFO:
Net income allocable to common shareholders	$	362,622		$	558,058		(35.0	)%	$	4,142,288		$	1,732,444		139.1	%
Eliminate items excluded from FFO:
Depreciation and amortization		224,438			204,131					881,569			709,349
Depreciation from unconsolidated real estate investments		9,837			19,244					54,822			73,729
Depreciation allocated to noncontrolling interests and restricted share unitholders		(1,781	)		(1,002	)				(6,622	)		(4,415	)
Gains on sale of real estate investments, including our equity share from investments		—			(134,116	)				(54,403	)		(165,272	)
Gain on sale of equity investment in PS Business Parks, Inc.		—			—					(2,116,839	)		—
FFO allocable to common shares	$	595,116		$	646,315		(7.9	)%	$	2,900,815		$	2,345,835		23.7	%
Eliminate the impact of items excluded from Core FFO, including our equity share from investments:
Foreign currency exchange (gain) loss		138,956			(38,203	)				(98,314	)		(111,787	)
Preferred share redemption charge		—			14,615					—			31,604
Property losses and tenant claims due to casualties (a)		(1,301	)		—					4,817			4,909
Other items		(760	)		—					(338	)		(543	)
Core FFO allocable to common shares	$	732,011		$	622,727		17.5	%	$	2,806,980		$	2,270,018		23.7	%

Reconciliation of Diluted Earnings per Share to FFO per Share and Core FFO per Share:
Diluted earnings per share	$	2.06		$	3.17		(35.0	)%	$	23.50		$	9.87		138.1	%
Eliminate amounts per share excluded from FFO:
Depreciation and amortization		1.32			1.26					5.27			4.44
Gains on sale of real estate investments, including our equity share from investments		—			(0.76	)				(0.31	)		(0.95	)
Gain on sale of equity investment in PS Business Parks, Inc.		—			—					(12.00	)		—
FFO per share	$	3.38		$	3.67		(7.9	)%	$	16.46		$	13.36		23.2	%
Eliminate the per share impact of items excluded from Core FFO, including our equity share from investments:
Foreign currency exchange (gain) loss		0.79			(0.22	)				(0.57	)		(0.64	)
Preferred share redemption charge		—			0.09					—			0.18
Property losses and tenant claims due to casualties (a)		(0.01	)		—					0.03			0.03
Other items		—			—					—			—
Core FFO per share	$	4.16		$	3.54		17.5	%	$	15.92		$	12.93		23.1	%
Exclude the contribution from our equity investment in PS Business Parks, Inc. to Core FFO per share		—			(0.14	)				(0.33	)		(0.57	)
Core FFO per share, excluding the impact of PS Business Parks, Inc.	$	4.16		$	3.40		22.4	%	$	15.59		$	12.36		26.1	%

Diluted weighted average common shares		176,144			176,079					176,280			175,568

(a)

Property losses and tenant claims due to casualties were related to Hurricane Ian for the three months and year ended December 31, 2022, and Hurricane Ida for the same periods in 2021. The related charges were included in general and administrative expenses and ancillary cost of operations on the Selected Consolidated Income Statement Data.

Property Operations – Same Store Facilities

The Same Store Facilities consist of facilities that have been owned and operated on a stabilized level of occupancy, revenues, and cost of operations since January 1, 2020. The composition of our Same Store Facilities allows us to more effectively evaluate the ongoing performance of our self-storage portfolio in 2020, 2021, and 2022 and exclude the impact of fill-up of unstabilized facilities, which can significantly affect operating trends. We believe the Same Store information is used by investors and analysts in a similar manner. However, because other REITs may not compute Same Store Facilities in the same manner as we do, may not use the same terminology, or may not present such a measure, Same Store Facilities may not be comparable among REITs. The following table summarizes the historical operating results of these 2,276 facilities (149.1 million net rentable square feet) that represent approximately 73% of the aggregate net rentable square feet of our U.S. consolidated self-storage portfolio at December 31, 2022 (unaudited):

	Three Months Ended December 31,								Year Ended December 31,
		2022			2021		Percentage Change			2022			2021		Percentage Change

	(Dollar amounts in thousands, except for per square foot data)
Revenues (a):
Rental income	$	792,227		$	702,973		12.7	%	$	3,074,192		$	2,683,116		14.6	%
Late charges and administrative fees		26,695			21,529		24.0	%		101,015			82,147		23.0	%
Total revenues		818,922			724,502		13.0	%		3,175,207			2,765,263		14.8	%

Direct cost of operations (a):
Property taxes		65,697			63,929		2.8	%		279,388			267,961		4.3	%
On-site property manager payroll		29,600			32,053		(7.7	)%		119,139			114,426		4.1	%
Repairs and maintenance		15,223			13,539		12.4	%		58,468			52,703		10.9	%
Utilities		9,943			9,335		6.5	%		43,457			40,548		7.2	%
Marketing		13,615			9,130		49.1	%		45,906			39,682		15.7	%
Other direct property costs		19,904			18,191		9.4	%		80,991			73,646		10.0	%
Total direct cost of operations		153,982			146,177		5.3	%		627,349			588,966		6.5	%
Direct net operating income (b)		664,940			578,325		15.0	%		2,547,858			2,176,297		17.1	%
Indirect cost of operations (a):
Supervisory payroll		(8,464	)		(9,230	)	(8.3	)%		(35,017	)		(37,058	)	(5.5	)%
Centralized management costs		(15,665	)		(15,322	)	2.2	%		(61,922	)		(55,350	)	11.9	%
Share-based compensation		(3,297	)		(3,464	)	(4.8	)%		(14,203	)		(17,255	)	(17.7	)%
Net operating income (c)	$	637,514		$	550,309		15.8	%	$	2,436,716		$	2,066,634		17.9	%

Gross margin (before indirect costs, depreciation and amortization expense)		81.2	%		79.8	%	1.8	%		80.2	%		78.7	%	1.9	%

Gross margin (before depreciation and amortization expense)		77.8	%		76.0	%	2.4	%		76.7	%		74.7	%	2.7	%

Weighted average for the period:
Square foot occupancy		93.4	%		95.9	%	(2.6	)%		94.9	%		96.3	%	(1.5	)%
Realized annual rental income per (d):
Occupied square foot	$	22.74		$	19.66		15.7	%	$	21.73		$	18.67		16.4	%
Available square foot	$	21.25		$	18.85		12.7	%	$	20.61		$	17.99		14.6	%
At December 31:
Square foot occupancy										92.4	%		94.8	%	(2.5	)%
Annual contract rent per occupied square foot (e)									$	23.02		$	19.96		15.3	%

	(a)		Revenues and cost of operations do not include tenant reinsurance and merchandise sales and expenses generated at the facilities.
	(b)		Direct net operating income (“Direct NOI”), a subtotal within NOI, is a non-GAAP financial measure that excludes the impact of supervisory payroll, centralized management costs, and share-based compensation in addition to depreciation and amortization expense. We utilize direct net operating income in evaluating property performance and in evaluating property operating trends as compared to our competitors.
	(c)		See attached reconciliation of self-storage NOI to net income.
	(d)		Realized annual rent per occupied square foot is computed by dividing annualized rental income, before late charges and administrative fees, by the weighted average occupied square feet for the period. Realized annual rent per available square foot (“REVPAF”) is computed by dividing annualized rental income, before late charges and administrative fees, by the total available rentable square feet for the period. These measures exclude late charges and administrative fees in order to provide a better measure of our ongoing level of revenue. Late charges are dependent upon the level of delinquency, and administrative fees are dependent upon the level of move-ins. In addition, the rates charged for late charges and administrative fees can vary independently from rental rates. These measures take into consideration promotional discounts, which reduce rental income.
	(e)		Annual contract rent represents the agreed upon monthly rate that is paid by our tenants in place at the time of measurement. Contract rates are initially set in the lease agreement upon move-in, and we adjust them from time to time with notice. Contract rent excludes other fees that are charged on a per-item basis, such as late charges and administrative fees, does not reflect the impact of promotional discounts, and does not reflect the impact of rents that are written off as uncollectible.

Property Operations – Non-Same Store Facilities

In addition to the 2,276 Same Store Facilities, we have 593 facilities that were not stabilized with respect to occupancies, revenues, or cost of operations since January 1, 2020 or that we did not own as of January 1, 2020, including 368 facilities that were acquired, 62 newly developed facilities, 91 facilities that have been expanded or are targeted for expansion, and 72 facilities that are unstabilized because they are undergoing fill-up or were damaged in casualty events (collectively, the “Non-Same Store Facilities”). Operating data, metrics, and further commentary with respect to these facilities, including detail by vintage, are included in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” under “Analysis of Net Income – Self-Storage Operations” in our December 31, 2022 Form 10-K.

Investing and Capital Activities

During the three months ended December 31, 2022, we closed the acquisition of 30 self-storage facilities (26 in Florida, and one each in Indiana, Kansas, Ohio, and Utah) with 1.6 million net rentable square feet for $228.6 million. These include the Neighborhood Storage portfolio in the Ocala, Florida market, consisting of 28 properties with 1.2 million net rentable square feet, with 26 properties closed in December 2022 for $179.8 million and two properties that are under construction and expected to close in early 2023.

During 2022, we closed the acquisition of 74 self-storage facilities (28 in Florida, ten in Oklahoma, seven in Texas, four in North Carolina, three in South Carolina, two each in Alabama, Arizona, Indiana, Maryland, Nevada, and Ohio, and one each in Colorado, Georgia, Iowa, Kansas, Minnesota, New Jersey, Oregon, Pennsylvania, Tennessee, and Utah) with 4.7 million net rentable square feet for $730.5 million.

Additionally, on July 8, 2022, we acquired from PSB the commercial interests in five properties at three sites jointly occupied with our self-storage facilities located in Maryland and Virginia, for $47.3 million.

Subsequent to December 31, 2022, we acquired or were under contract to acquire eight self-storage facilities across five states with 0.5 million net rentable square feet, for $70.5 million.

During 2021, we acquired a portfolio of 48 properties (4.1 million net rentable square feet) operated under the brand name of ezStorage for $1.8 billion. These facilities generated revenues of $100.8 million, NOI of $79.9 million (including Direct NOI of $82.7 million), and average square footage occupancy of 89.6% for 2022.

During 2021, we acquired a portfolio of 56 properties (7.5 million net rentable square feet) operated under the brand name of All Storage for $1.5 billion. These facilities generated revenues of $79.2 million, NOI of $48.4 million (including Direct NOI of $51.2 million), and average square footage occupancy of 79.4% for 2022.

During the three months ended December 31, 2022, we opened three newly developed facilities and completed various expansion projects (0.5 million net rentable square feet – 0.2 million in Florida, and 0.1 million each in New Jersey, Maryland, and Michigan) costing $101.2 million. During 2022, we opened eight newly developed facilities and completed various expansion projects (1.4 million net rentable square feet – 0.4 million in Florida, 0.2 million each in Michigan and Minnesota, 0.1 million each in Illinois, Kentucky, Maryland, New Jersey, and Texas, and 0.1 million in various other states combined) costing $227.2 million. At December 31, 2022, we had various facilities in development (2.1 million net rentable square feet) estimated to cost $492.3 million and various expansion projects (2.5 million net rentable square feet) estimated to cost $487.3 million. Our aggregate 4.6 million net rentable square foot pipeline of development and expansion facilities includes 1.7 million in California, 0.6 million in Texas, 0.4 million in Maryland, 0.3 million each in Florida and Hawaii, 0.2 million each in New Jersey and Washington, and 0.9 million in other states. The remaining $606.6 million of development costs for these projects is expected to be incurred primarily in the next 18 to 24 months.

On July 20, 2022, we sold our entire equity investment in PSB upon the closing of the merger of PSB with affiliates of Blackstone Real Estate. We received a total of $2.7 billion of cash proceeds and recognized a gain of $2.1 billion. In connection with the sale of our equity investment in PSB, on August 4, 2022, we paid a special cash dividend of $13.15 per common share, totaling approximately $2.3 billion.

As previously announced, our Board of Trustees declared a 50% increase in the Company’s regular common quarterly dividend from $2.00 to $3.00 per common share. The Board also declared dividends with respect to our various series of preferred shares. All the dividends are payable on March 30, 2023 to shareholders of record as of March 15, 2023.

Outlook for the Year Ending December 31, 2023

Set forth below are our current expectations with respect to full year 2023 Core FFO per share and certain underlying assumptions, excluding the impact of the proposed acquisition of Life Storage. In reliance on the exception provided by applicable SEC rules, we do not provide guidance for GAAP net income per share, the most comparable GAAP financial measure, or a reconciliation of 2023 Core FFO per share to GAAP net income per share because we are unable to reasonably predict the following items which are included in GAAP net income: (i) gains or losses on sales of real estate investments, (ii) foreign currency exchange gains and losses, (iii) charges related to the redemption of preferred securities, and (iv) certain other significant non-cash and/or nonrecurring income or expense items. The actual amounts for any and all of these items could significantly impact our 2023 GAAP net income and, as disclosed in our historical financial results, have significantly impacted GAAP net income in prior periods. Our expectations on self-storage operations reflect the following updated 2023 Same Store and Non-Same Store pools for properties we owned at December 31, 2022: (i) 2,348 Same Store Facilities (155.5 million net rentable square feet) that we have owned and operated on a stabilized level of occupancy, revenues, and cost of operations since January 1, 2021, which generated NOI of $2,517.3 million in 2022 and (ii) 521 Non-Same Store Facilities (48.7 million net rentable square feet) that were not stabilized with respect to occupancy, revenues, or cost of operations since January 1, 2021 or that we did not own as of January 1, 2021, which generated NOI of $448.5 million in 2022.

	Guidance Ranges for 2023
	Low	High
	($ amounts in thousands, except per share data)
Same Store:
Revenue growth	2.50%	5.00%
Expense growth	4.75%	6.75%
Net operating income growth	1.20%	5.10%

Acquisitions	$750,000
Development openings	$375,000
Non-Same Store net operating income	$510,000	$530,000
Ancillary net operating income	$169,000	$174,000
General and administrative expense	$100,000	$106,000
Interest expense	$177,000
Preferred dividends	$195,000
Capital expenditures	$450,000

Core FFO per share	$16.10	$16.80
Core FFO per share growth from 2022 Core FFO per share	1.1%	5.5%
Core FFO per share growth from 2022 Core FFO per share, excluding the impact of PS Business Parks, Inc.	3.3%	7.8%

Incremental Non-Same Store NOI to stabilization (2024 and beyond)	$80,000

Leadership Announcements

We are today announcing the following leadership developments:

Appointment of Executive Officer

David Lee, our Chief Operating Officer, has been appointed as an executive officer of Public Storage to serve as our principal operating officer, effective immediately. Mr. Lee joined us in November 2021 following nearly 20 years in roles of increasing responsibility with The UPS Store.

Shurgard Self Storage Limited (“Shurgard”)

Effective with Shurgard’s Annual General Meeting of Shareholders to be held on May 10, 2023, Shurgard will reduce the size of its board of directors from eleven to nine directors, and we and the New York State Common Retirement Fund (“NYCRF”) have agreed to each designate one director to serve on Shurgard’s board of directors, instead of two designees each as provided for by agreement among us, NYCRF, and Shurgard.

In connection therewith, Ronald L. Havner, Jr. and Daniel C. Staton, who currently serve as Chairman of and a director on Shurgard’s board of directors, respectively, and as our representatives on Shurgard’s board, will not stand for re-election. Mr. Havner will become Chairman Emeritus and serve in a non-voting, advisory role through which Shurgard will continue to be able to draw upon Mr. Havner’s extensive leadership experience and company and industry knowledge. Tom Boyle, our Chief Financial Officer and Chief Investment Officer, will be our proposed designee for election at Shurgard’s annual meeting.

Fourth Quarter Conference Call

A conference call is scheduled for February 22, 2023 at 9:00 a.m. (PST) to discuss the fourth quarter earnings results. The domestic dial-in number is (800) 274-8461, and the international dial-in number is (203) 518-9708 (conference ID number for either domestic or international is PSAQ422). A simultaneous audio webcast may be accessed by using the link at www.publicstorage.com under “About Us, Investor Relations, News and Events, Event Calendar.” A replay of the conference call may be accessed through March 1, 2023 by calling (800) 934-3638 (domestic), (402) 220-1150 (international) or by using the link at www.publicstorage.com under “About Us, Investor Relations, News and Events, Event Calendar.”

About Public Storage

Public Storage, a member of the S&P 500 and FT Global 500, is a REIT that primarily acquires, develops, owns, and operates self-storage facilities. At December 31, 2022, we had: (i) interests in 2,869 self-storage facilities located in 40 states with approximately 204 million net rentable square feet in the United States and (ii) a 35% common equity interest in Shurgard Self Storage Limited (Euronext Brussels:SHUR), which owned 266 self-storage facilities located in seven Western European nations with approximately 15 million net rentable square feet operated under the Shurgard® brand. Our headquarters are located in Glendale, California.

This press release, our Form 10-K for the year ended December 31, 2022, a financial supplement, and additional information about Public Storage are available on our website, www.publicstorage.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements relating to our 2023 outlook and all underlying assumptions, our proposal to acquire Life Storage, our expected acquisition, disposition, development, and redevelopment activity, supply and demand for our self-storage facilities, information relating to operating trends in our markets, expectations regarding operating expenses, including property tax changes, expectations regarding the impacts from inflation and a potential future recession, our strategic priorities, expectations with respect to financing activities, rental rates, cap rates, and yields, leasing expectations, our credit ratings, and all other statements other than statements of historical fact. Such statements are based on management’s beliefs and assumptions made based on information currently available to management and may be identified by the use of the words “outlook,” “guidance,” “expects,” “believes,” “anticipates,” “should,” “estimates,” and similar expressions. These forward-looking statements involve known and unknown risks and uncertainties, which may cause our actual results and performance to be materially different from those expressed or implied in the forward-looking statements. Risks and uncertainties that may impact future results and performance include, but are not limited to those described in Part 1, Item 1A, “Risk Factors” in our most recent Annual Report on Form 10-K that will be filed with the Securities and Exchange Commission (the “SEC”) on February 21, 2023 and in our other filings with the SEC. These include changes in demand for our facilities, impacts of natural disasters, adverse changes in laws and regulations including governing property tax, evictions, rental rates, minimum wage levels, and insurance, our ability to consummate acquisition transactions, including our proposed acquisition of Life Storage, and to realize the intended benefits of such transactions, adverse economic effects from the COVID-19 Pandemic, international military conflicts, or similar events impacting public health and/or economic activity, increases in the costs of our primary customer acquisition channels, adverse impacts to us and our customers from inflation, unfavorable foreign currency rate fluctuations, changes in federal or state tax laws related to the taxation of REITs, security breaches, including ransomware, or a failure of our networks, systems, or technology. These forward looking statements speak only as of the date of this press release or as of the dates indicated in the statements. All of our forward-looking statements, including those in this press release, are qualified in their entirety by this cautionary statement. We expressly disclaim any obligation to update publicly or otherwise revise any forward-looking statements, whether as a result of new information, new estimates, or other factors, events, or circumstances after the date of these forward looking statements, except when expressly required by law. Given these risks and uncertainties, you should not rely on any forward-looking statements in this press release, or which management may make orally or in writing from time to time, neither as predictions of future events nor guarantees of future performance.

PUBLIC STORAGE SELECTED CONSOLIDATED INCOME STATEMENT DATA (Amounts in thousands, except per share data) (Unaudited)

	Three Months Ended December 31,						Year Ended December 31,
		2022			2021			2022			2021

Revenues:
Self-storage facilities	$	1,028,353		$	869,716		$	3,946,028		$	3,203,566
Ancillary operations		60,189			54,600			236,135			212,258
		1,088,542			924,316			4,182,163			3,415,824

Expenses:
Self-storage cost of operations		241,256			220,331			980,209			852,030
Ancillary cost of operations		18,401			16,524			72,698			68,568
Depreciation and amortization		226,538			205,289			888,146			713,428
General and administrative		33,341			22,258			114,742			101,254
Interest expense		36,141			29,794			136,319			90,774
		555,677			494,196			2,192,114			1,826,054

Other increases (decreases) to net income:
Interest and other income		14,173			2,985			40,567			12,306
Equity in earnings of unconsolidated real estate entities		6,852			150,711			106,981			232,093
Foreign currency exchange gain (loss)		(138,956	)		38,203			98,314			111,787
Gain on sale of real estate		—			—			1,503			13,683
Gain on sale of equity investment in PS Business Parks, Inc.		—			—			2,128,860			—
Net income		414,934			622,019			4,366,274			1,959,639
Allocation to noncontrolling interests		(2,574	)		(2,309	)		(17,127	)		(6,376	)
Net income allocable to Public Storage shareholders		412,360			619,710			4,349,147			1,953,263
Allocation of net income to:
Preferred shareholders – distributions		(48,674	)		(48,079	)		(194,390	)		(186,579	)
Preferred shareholders – redemptions		—			(11,925	)		—			(28,914	)
Restricted share units		(1,064	)		(1,648	)		(12,469	)		(5,326	)
Net income allocable to common shareholders	$	362,622		$	558,058		$	4,142,288		$	1,732,444

Per common share:
Net income per common share – Basic	$	2.07		$	3.19		$	23.64		$	9.91
Net income per common share – Diluted	$	2.06		$	3.17		$	23.50		$	9.87
Weighted average common shares – Basic		175,345			175,071			175,257			174,858
Weighted average common shares – Diluted		176,144			176,079			176,280			175,568

PUBLIC STORAGE SELECTED CONSOLIDATED BALANCE SHEET DATA (Amounts in thousands, except share and per share data)

	December 31, 2022			December 31, 2021
ASSETS	(Unaudited)

Cash and equivalents	$	775,253		$	734,599
Real estate facilities, at cost:
Land		5,273,073			5,134,060
Buildings		18,946,053			17,673,773
		24,219,126			22,807,833
Accumulated depreciation		(8,554,155	)		(7,773,308	)
		15,664,971			15,034,525
Construction in process		372,992			272,471
		16,037,963			15,306,996

Investments in unconsolidated real estate entities		275,752			828,763
Goodwill and other intangible assets, net		232,517			302,894
Other assets		230,822			207,656
Total assets	$	17,552,307		$	17,380,908


LIABILITIES AND EQUITY

Notes payable	$	6,870,826		$	7,475,279
Accrued and other liabilities		514,680			482,091
Total liabilities		7,385,506			7,957,370

Redeemable noncontrolling interests		—			68,249

Equity:
Public Storage shareholders’ equity:
Preferred Shares, $0.01 par value, 100,000,000 shares authorized, 174,000 shares issued (in series) and outstanding, (164,000 at December 31, 2021) at liquidation preference		4,350,000			4,100,000
Common Shares, $0.10 par value, 650,000,000 shares authorized, 175,265,668 shares issued and outstanding (175,134,455 shares at December 31, 2021)		17,527			17,513
Paid-in capital		5,896,423			5,821,667
Accumulated deficit		(110,231	)		(550,416	)
Accumulated other comprehensive loss		(80,317	)		(53,587	)
Total Public Storage shareholders’ equity		10,073,402			9,335,177
Noncontrolling interests		93,399			20,112
Total equity		10,166,801			9,355,289
Total liabilities, redeemable noncontrolling interests and equity	$	17,552,307		$	17,380,908

PUBLIC STORAGE SELECTED FINANCIAL DATA Computation of Funds Available for Distribution (Unaudited – amounts in thousands except per share data)

	Three Months Ended December 31,						Year Ended December 31,
		2022			2021			2022			2021
FFO allocable to common shares	$	595,116		$	646,315		$	2,900,815		$	2,345,835
Eliminate effect of items included in FFO but not FAD:
Share-based compensation expense in excess of cash paid		8,268			9,549			39,876			46,796
Foreign currency exchange (gain) loss		138,956			(38,203	)		(98,314	)		(111,787	)
Impact of preferred share redemption charges, including equity investment share		—			14,615			—			31,604
Less: Capital expenditures to maintain real estate facilities		(123,063	)		(106,559	)		(452,316	)		(284,200	)
FAD (a)	$	619,277		$	525,717		$	2,390,061		$	2,028,248

Distributions paid to common shareholders:
Regular	$	350,256		$	349,940		$	1,400,998		$	1,398,206
Special (b)		—			—			2,302,414			—
Total distributions paid to common shareholders	$	350,256		$	349,940		$	3,703,412		$	1,398,206
Distribution payout ratio		56.6	%		66.6	%		155.0	%		68.9	%
Distribution payout ratio (on regular dividends only) (c)		56.6	%		66.6	%		58.6	%		68.9	%
Distributions per common share:
Regular	$	2.00		$	2.00		$	8.00		$	8.00
Special (b)	$	—		$	—		$	13.15		$	—

	(a)		FAD represents FFO adjusted to exclude certain non-cash charges and to deduct capital expenditures. We utilize FAD in evaluating our ongoing cash flow available for investment, debt repayment and common distributions. We believe investors and analysts utilize FAD in a similar manner. FAD is not a substitute for GAAP net cash flow in evaluating our liquidity or ability to pay dividends, because it excludes investing and financing activities presented on our statements of cash flows. In addition, other REITs may compute this measure differently, so comparisons among REITs may not be helpful.
	(b)		A special dividend of $13.15 per common share was paid on August 4, 2022, in connection with the gain on sale of our equity investment in PSB on July 20, 2022.
	(c)		Supplemental payout ratio, excluding the impact of the special dividend, which was due to the gain on sale of our equity investment in PSB. This supplemental measure is presented to portray regular dividends, because FAD excludes the gain on sale of our equity investment in PSB.

PUBLIC STORAGE SELECTED FINANCIAL DATA Reconciliation of Self-Storage Net Operating Income to Net Income (Unaudited – amounts in thousands)

	Three Months Ended December 31,						Year Ended December 31,
		2022			2021			2022			2021

Self-storage revenues for:
Same Store Facilities	$	818,922		$	724,502		$	3,175,207		$	2,765,263
Acquired facilities		112,034			66,862			402,892			161,364
Newly developed and expanded facilities		71,908			56,561			269,245			197,058
Other non-same store facilities		25,489			21,791			98,684			79,881
Self-storage revenues		1,028,353			869,716			3,946,028			3,203,566

Self-storage cost of operations for:
Same Store Facilities		181,408			174,193			738,491			698,629
Acquired facilities		33,962			22,228			135,911			57,921
Newly developed and expanded facilities		19,480			17,319			79,466			70,029
Other non-same store facilities		6,406			6,591			26,341			25,451
Self-storage cost of operations		241,256			220,331			980,209			852,030

Self-storage NOI for:
Same Store Facilities		637,514			550,309			2,436,716			2,066,634
Acquired facilities		78,072			44,634			266,981			103,443
Newly developed and expanded facilities		52,428			39,242			189,779			127,029
Other non-same store facilities		19,083			15,200			72,343			54,430
Self-storage NOI (a)		787,097			649,385			2,965,819			2,351,536
Ancillary revenues		60,189			54,600			236,135			212,258
Ancillary cost of operations		(18,401	)		(16,524	)		(72,698	)		(68,568	)
Depreciation and amortization		(226,538	)		(205,289	)		(888,146	)		(713,428	)
General and administrative expense		(33,341	)		(22,258	)		(114,742	)		(101,254	)
Interest and other income		14,173			2,985			40,567			12,306
Interest expense		(36,141	)		(29,794	)		(136,319	)		(90,774	)
Equity in earnings of unconsolidated real estate entities		6,852			150,711			106,981			232,093
Gain on sale of real estate		—			—			1,503			13,683
Gain on sale of equity investment in PS Business Parks, Inc.		—			—			2,128,860			—
Foreign currency exchange gain (loss)		(138,956	)		38,203			98,314			111,787
Net income on our income statement	$	414,934		$	622,019		$	4,366,274		$	1,959,639

(a)

Net operating income or “NOI” is a non-GAAP financial measure that excludes the impact of depreciation and amortization expense, which is based upon historical costs and assumes that building values diminish ratably over time, while we believe that real estate values fluctuate due to market conditions. We utilize NOI in determining current property values, evaluating property performance, and in evaluating operating trends. We believe that investors and analysts utilize NOI in a similar manner. NOI is not a substitute for net income, operating cash flow, or other related GAAP financial measures, in evaluating our operating results. This table reconciles from NOI for our self-storage facilities to the net income presented on our income statement.

View source version on businesswire.com: https://www.businesswire.com/news/home/20230220005349/en/

Ryan Burke

(818) 244-8080, Ext. 1141

KEYWORDS: California United States North America

INDUSTRY KEYWORDS: Other Construction & Property Commercial Building & Real Estate Construction & Property REIT

MEDIA:

February 21, 2023 4:32 pm

Flowserve Corporation Reports Fourth Quarter and Full Year 2022 Results

Flowserve Corporation Reports Fourth Quarter and Full Year 2022 Results

Reported and Adjusted Fourth Quarter Earnings Per Share (EPS) of 92 cents and 63 cents, respectively
Fourth quarter bookings increased 14.2% year-over-year to $1.11 billion
Full year 2022 Reported and Adjusted EPS of $1.44 and $1.10, respectively
3D growth strategy, combined with supportive project environment, delivered full year 2022 bookings of $4.45 billion, up 17.8% year-over-year
Year-end backlog of $2.74 billion increased 36.5% year-over-year, establishing the foundation for strong expected revenue and Adjusted EPS growth in 2023
Velan acquisition accelerates 3D strategy and enhances the FCD portfolio; expected to close by the end of the second quarter of 2023

DALLAS–(BUSINESS WIRE)–
Flowserve Corporation (NYSE: FLS), a leading provider of flow control products and services for the global infrastructure markets, today announced its financial results for the fourth quarter and full year ended December 31, 2022.

Fourth Quarter 2022 Highlights (all comparisons to the 2021 fourth quarter, unless otherwise noted)

Reported Earnings Per Share (EPS) of $0.92 and Adjusted EPS¹ of $0.63
- Reported EPS includes a net after-tax adjusted gain of $38.3 million, comprised of tax valuation allowance release of $59.3 million, reversal of previous reserve accruals totaling $5.9 million and a net realignment benefit of $1.9 million, partially offset by additional Russia exit related charges of $9.8 million and below-the-line currency expense of $19.0 million

Total bookings were $1.11 billion, up 14.2%, or 19.4% on a constant currency basis
- Original equipment bookings were $556.1 million, or 50% of total bookings, up 18.5%, or 24.0% on a constant currency basis
- Aftermarket bookings were $550.6 million, or 50% of total bookings, up 10.1%, or 15.1% on a constant currency basis

Sales were $1.04 billion, up 13.0%, or 18.6% on a constant currency basis
- Original equipment sales were $499.8 million, up 14.3%, or 20.3% on a constant currency basis
- Aftermarket sales were $539.1 million, up 11.9%, or 16.9% on a constant currency basis

Reported gross and operating margins were 28.4% and 10.1%, respectively
- Adjusted gross and operating margins² were 28.8% and 10.8%, respectively

Backlog at December 31, 2022 was $2.74 billion, up 36.5% versus December 31, 2021, or up 39.2% on a constant currency basis

Full Year 2022 Highlights (all comparisons to full year 2021, unless otherwise noted)

Reported Earnings Per Share (EPS) of $1.44 and Adjusted EPS¹ of $1.10
- Reported EPS includes a net after-tax adjusted gain of $44.3 million, comprised of tax valuation allowance release of $59.3 million, the reversal of previous reserve accruals totaling $8.0 million, below-the-line currency gain of $8.1 million and realignment net benefit of $2.0 million, partially offset by Russia exit related charges of $30.9 million and a discrete asset write-down of $2.3 million

Total bookings were $4.45 billion, up 17.8%, or 22.7% on a constant currency basis
- Original equipment bookings were $2.28 billion, or 51% of total bookings, up 27.1%, or 32.3% on a constant currency basis
- Aftermarket bookings were $2.16 billion, or 49% of total bookings, up 9.4%, or 14.0% on a constant currency basis

Sales were $3.62 billion, up 2.1%, or 6.8% on a constant currency basis
- Original equipment sales were $1.71 billion, up 0.1%, or 5.1% on a constant currency basis
- Aftermarket sales were $1.91 billion, up 3.9%, or 8.4% on a constant currency basis

“We demonstrated improved operational performance in the fourth quarter, resulting in the highest quarterly level of revenue since 2019 and expanded year-over-year adjusted operating margin. In addition, we delivered another quarter of strong bookings that increased our near-record backlog,” said Scott Rowe, Flowserve’s President and Chief Executive Officer. “Our Diversification, Decarbonization and Digitization growth strategy, which is directly aligned to serve the needs of a changing energy landscape, is delivering results and accelerating our growth. Our recently announced acquisition of Velan Inc. will also further our 3D strategy, while enhancing our FCD valve offerings, with highly complementary products in the nuclear, cryogenic and defense markets following close.”

Rowe concluded, “In 2023, I am confident we can build on our fourth quarter momentum while continuing to capitalize on supportive end-markets, which reflect the need for increased energy security and enhanced decarbonization investments. With our near record $2.7 billion backlog, continued executional improvement and planned cost initiatives to address inflationary pressures, we fully expect our results in 2023 will generate significant long-term value for all stakeholders.”

2023 Guidance³Flowserve reaffirms its Reported and Adjusted EPS guidance for 2023, which was initiated on February 10, 2023, as well as certain other financial metrics, as shown in the table below.

						2023 Target Range
Revenue Growth						Up 9.0% to 11.0%
Reported Earnings Per Share						$1.40 – $1.65
Adjusted Earnings Per Share						$1.50 – $1.75
Net Interest Expense						$55 – $60 million
Adjusted Tax Rate						18% – 20%
Capital Expenditures						$75 – $85 million

This outlook excludes any contribution from the expected acquisition of Velan Inc., announced previously. Additionally, Flowserve’s 2023 Adjusted EPS target range also excludes expected adjusted items including realignment charges of approximately $20 million, as well as the potential impact of below-the-line foreign currency effects and certain other discrete items which may arise during the course of the year.

Fourth Quarter and Full Year 2022 Results Conference Call

Flowserve will host its conference call with the financial community on Wednesday, February 22^nd at 11:00 AM Eastern. Scott Rowe, president and chief executive officer, as well as other members of the management team will be presenting. The call can be accessed by shareholders and other interested parties at www.flowserve.com under the “Investor Relations” section.

¹	See Reconciliation of Non-GAAP Measures table for detailed reconciliation of reported results to adjusted measures.
²	Adjusted gross and operating margins are calculated by dividing adjusted gross profit and adjusted operating income, respectively, by revenues. Adjusted gross profit and adjusted operating income are derived by excluding the adjusted items. See reconciliation of Non-GAAP Measures table for detailed reconciliation.
³	Adjusted 2023 EPS excludes realignment expenses, the impact from other specific discrete items and below-the-line foreign currency effects and utilizes year-end 2022 FX rates and approximately 131.5 million fully diluted shares.
^_	FX impact is calculated by comparing the difference between the actual average FX rates of 2022 and the year-end 2022 spot rates both as applied to our 2023 expectations, divided by the number of shares expected for 2023.

About Flowserve

Flowserve Corp. is one of the world’s leading providers of fluid motion and control products and services. Operating in more than 50 countries, the company produces engineered and industrial pumps, seals and valves as well as a range of related flow management services. More information about Flowserve can be obtained by visiting the company’s Web site at www.flowserve.com.

Safe Harbor Statement: This news release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, as amended. Words or phrases such as, “may,” “should,” “expects,” “could,” “intends,” “plans,” “anticipates,” “estimates,” “believes,” “forecasts,” “predicts” or other similar expressions are intended to identify forward-looking statements, which include, without limitation, earnings forecasts, statements relating to our business strategy and statements of expectations, beliefs, future plans and strategies and anticipated developments concerning our industry, business, operations and financial performance and condition.

The forward-looking statements included in this news release are based on our current expectations, projections, estimates and assumptions. These statements are only predictions, not guarantees. Such forward-looking statements are subject to numerous risks and uncertainties that are difficult to predict. These risks and uncertainties may cause actual results to differ materially from what is forecast in such forward-looking statements, and include, without limitation, the following: the impact of the global outbreak of COVID-19 on our business and operations; a portion of our bookings may not lead to completed sales, and our ability to convert bookings into revenues at acceptable profit margins; changes in global economic conditions and the potential for unexpected cancellations or delays of customer orders in our reported backlog; our dependence on our customers’ ability to make required capital investment and maintenance expenditures; if we are not able to successfully execute and realize the expected financial benefits from our strategic transformation and realignment initiatives or integrate and realize the synergies of any acquisition, our business could be adversely affected; risks associated with cost overruns on fixed-fee projects and in taking customer orders for large complex custom engineered products; the substantial dependence of our sales on the success of the oil and gas, chemical, power generation and water management industries; the adverse impact of volatile raw materials prices on our products and operating margins; economic, political and other risks associated with our international operations, including military actions, trade embargoes, epidemics or pandemics or changes to tariffs or trade agreements that could affect customer markets, particularly North African, Russian and Middle Eastern markets and global oil and gas producers, and non-compliance with U.S. export/re-export control, foreign corrupt practice laws, economic sanctions and import laws and regulations; increased aging and slower collection of receivables, particularly in Latin America and other emerging markets; our exposure to fluctuations in foreign currency exchange rates, including in hyperinflationary countries such as Venezuela and Argentina; our furnishing of products and services to nuclear power plant facilities and other critical processes; potential adverse consequences resulting from litigation to which we are a party, such as litigation involving asbestos-containing material claims; expectations regarding acquisitions and the integration of acquired businesses; our relative geographical profitability and its impact on our utilization of deferred tax assets, including foreign tax credits; the potential adverse impact of an impairment in the carrying value of goodwill or other intangible assets; our dependence upon third-party suppliers whose failure to perform timely could adversely affect our business operations; the highly competitive nature of the markets in which we operate; environmental compliance costs and liabilities; potential work stoppages and other labor matters; access to public and private sources of debt financing; our inability to protect our intellectual property in the U.S., as well as in foreign countries; obligations under our defined benefit pension plans; our internal control over financial reporting may not prevent or detect misstatements because of its inherent limitations, including the possibility of human error, the circumvention or overriding of controls, or fraud; the recording of increased deferred tax asset valuation allowances in the future or the impact of tax law changes on such deferred tax assets could affect our operating results; our information technology infrastructure could be subject to service interruptions, data corruption, cyber-based attacks or network security breaches, which could disrupt our business operations and result in the loss of critical and confidential information; ineffective internal controls could impact the accuracy and timely reporting of our business and financial results; and other factors described from time to time in our filings with the Securities and Exchange Commission.

All forward-looking statements included in this news release are based on information available to us on the date hereof, and we assume no obligation to update any forward-looking statement.

The Company reports its financial results in accordance with U.S. generally accepted accounting principles (GAAP). However, management believes that non-GAAP financial measures which exclude certain non-recurring items present additional useful comparisons between current results and results in prior operating periods, providing investors with a clearer view of the underlying trends of the business. Management also uses these non-GAAP financial measures in making financial, operating, planning and compensation decisions and in evaluating the Company’s performance. Throughout our materials we refer to non-GAAP measures as “Adjusted.” Non-GAAP financial measures, which may be inconsistent with similarly captioned measures presented by other companies, should be viewed in addition to, and not as a substitute for, the Company’s reported results prepared in accordance with GAAP.




CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
	Three Months Ended December 31,
(Amounts in thousands, except per share data)		2022			2021

Sales	$	1,038,959		$	919,456
Cost of sales		(743,718	)		(652,362	)
Gross profit		295,241			267,094
Selling, general and administrative expense		(193,588	)		(187,111	)
Net earnings from affiliates		3,647			5,147
Operating income		105,300			85,130
Interest expense		(12,909	)		(11,770	)
Loss on extinguishment of debt		–			(38,003	)
Interest income		1,025			871
Other expense, net		(28,711	)		(15,425	)
Earnings before income taxes		64,705			20,803
(Provision for) benefit from income taxes		60,257			(1,335	)
Net earnings, including noncontrolling interests		124,962			19,468
Less: Net earnings attributable to noncontrolling interests		(3,633	)		(2,738	)
Net earnings attributable to Flowserve Corporation	$	121,329		$	16,730

Net earnings per share attributable to Flowserve Corporation common shareholders:
Basic		0.93			0.13
Diluted		0.92			0.13

Weighted average shares – basic		130,710			130,245
Weighted average shares – diluted		131,560			130,829





RECONCILIATION OF NON-GAAP MEASURES
(Unaudited)

	Three Months Ended December 31, 2022
(Amounts in thousands, except per share data)	As Reported (a)			Realignment (1)				Other Items				As Adjusted

Sales	$	1,038,959		$	–			$	–			$	1,038,959
Gross profit		295,241			(481	)			(3,646	)	(3)		299,368
Gross margin		28.4	%		–				–				28.8	%

Selling, general and administrative expense		(193,588	)		480				(2,885	)	(4)		(191,183	)
Net earnings from affiliates		3,647			–				–				3,647

Operating income		105,300			(1	)			(6,531	)			111,832
Operating income as a percentage of sales		10.1	%		–				–				10.8	%

Interest and other expense, net		(40,595	)		–				(25,206	)	(5)		(15,389	)

Earnings before income taxes		64,705			(1	)			(31,737	)			96,443
(Provision for) benefit from income taxes		60,257			1,866		(2)		68,144		(6)		(9,753	)
Tax Rate		-93.1	%		186600.0	%			214.7	%			10.1	%

Net earnings attributable to Flowserve Corporation	$	121,329		$	1,865			$	36,407			$	83,057

Net earnings per share attributable to Flowserve Corporation common shareholders:
Basic	$	0.93		$	0.01			$	0.28			$	0.64
Diluted		0.92			0.01				0.28				0.63

Basic number of shares used for calculation		130,710			130,710				130,710				130,710
Diluted number of shares used for calculation		131,560			131,560				131,560				131,560

(a) Reported in conformity with U.S. GAAP

Notes:
(1) Represents realignment adjustments incurred as a result of realignment programs
(2) Includes tax impact of items above and reversal of realignment exit tax ($2.1 million)
(3) Represents incremental reserve of Russia related financial exposures ($8.1 million) and reversals of expenses that were adjusted for Non-GAAP measures in previous periods ($4.5 million)
(4) Represents incremental reserve of Russia related financial exposures ($5.5 million) and reversals of expenses that were adjusted for Non-GAAP measures in previous periods ($2.6 million)
(5) Represents below-the-line foreign exchange impacts
(6) Includes tax impact of items above and tax benefit due to the release of tax valuation allowance ($59.3 million)





RECONCILIATION OF NON-GAAP MEASURES
(Unaudited)

	Three Months Ended December 31, 2021
(Amounts in thousands, except per share data)	As Reported (a)			Realignment (1)				Other Items				As Adjusted

Sales	$	919,456		$	–			$	–			$	919,456
Gross profit		267,094			(1,031	)			–				268,125
Gross margin		29.0	%		–				–				29.2	%

Selling, general and administrative expense		(187,111	)		808				–				(187,919	)
Gain on sale of business		–			–				–				–
Net earnings from affiliates		5,147			–				–				5,147

Operating income		85,130			(223	)			–				85,353
Operating income as a percentage of sales		9.3	%		–				–				9.3	%

Interest and other expense, net		(64,327	)		–				(51,355	)	(3)		(12,972	)

Earnings before income taxes		20,803			(223	)			(51,355	)			72,381
(Provision for) benefit from income taxes		(1,335	)		(1,396	)	(2)		10,788		(4)		(10,727	)
Tax Rate		6.4	%		-626.0	%			21.0	%			14.8	%

Net earnings attributable to Flowserve Corporation	$	16,730		$	(1,619	)		$	(40,567	)		$	58,916

Net earnings per share attributable to Flowserve Corporation common shareholders:
Basic	$	0.13		$	(0.01	)		$	(0.31	)		$	0.45
Diluted		0.13			(0.01	)			(0.31	)			0.45

Basic number of shares used for calculation		130,245			130,245				130,245				130,245
Diluted number of shares used for calculation		130,829			130,829				130,829				130,829

(a) Reported in conformity with U.S. GAAP

Notes:
(1) Represents realignment expense incurred as a result of realignment programs
(2) Includes tax impact of items above
(3) Represents below-the-line foreign exchange impacts and of expense as a result of early extinguishment of debt and duplicate interest expense ($38.7 million)
(4) Includes tax impact of items above





SEGMENT INFORMATION
(Unaudited)

FLOWSERVE PUMP DIVISION	Three Months Ended December 31,
(Amounts in millions, except percentages)		2022			2021
Bookings	$	786.2		$	693.5
Sales		739.4			648.9
Gross profit		217.1			198.3
Gross profit margin		29.4	%		30.6	%
SG&A		130.1			140.9
Segment operating income		90.7			62.5
Segment operating income as a percentage of sales		12.3	%		9.6	%

FLOW CONTROL DIVISION	Three Months Ended December 31,
(Amounts in millions, except percentages)		2022			2021
Bookings	$	324.9		$	278.8
Sales		301.8			272.8
Gross profit		87.5			80.3
Gross profit margin		29.0	%		29.4	%
SG&A		49.4			50.3
Segment operating income		38.1			30.0
Segment operating income as a percentage of sales		12.6	%		11.0	%





CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
	Year Ended December 31,
(Amounts in thousands, except per share data)		2022			2021			2020

Sales	$	3,615,120		$	3,541,060		$	3,728,134
Cost of sales		(2,620,825	)		(2,491,335	)		(2,611,365	)
Gross profit		994,295			1,049,725			1,116,769
Selling, general and administrative expense		(815,545	)		(797,076	)		(878,245	)
Gain on sale of business		–			1,806			–
Net earnings from affiliates		18,469			16,304			11,753
Operating income		197,219			270,759			250,277
Interest expense		(46,247	)		(57,617	)		(56,185	)
Loss on extinguishment of debt		–			(46,176	)		(1,201	)
Interest income		3,963			2,764			4,175
Other income (expense), net		(559	)		(36,142	)		5,226
Earnings before income taxes		154,376			133,588			202,292
(Provision for) benefit from income taxes		43,639			2,594			(61,417	)
Net earnings, including noncontrolling interests		198,015			136,182			140,875
Less: Net earnings attributable to noncontrolling interests		(9,326	)		(10,233	)		(10,455	)
Net earnings attributable to Flowserve Corporation	$	188,689		$	125,949		$	130,420

Net earnings per share attributable to Flowserve Corporation common shareholders:
Basic	$	1.44		$	0.97		$	1.00
Diluted		1.44			0.96			1.00

Weighted average shares – basic		130,630			130,305			130,395
Weighted average shares – diluted		131,315			130,857			131,050





RECONCILIATION OF NON-GAAP MEASURES
(Unaudited)

	Twelve Months Ended December 31, 2022
(Amounts in thousands, except per share data)	As Reported (a)			Realignment (1)				Other Items				As Adjusted

Sales	$	3,615,120		$	–			$	–			$	3,615,120
Gross profit		994,295			(355	)			(13,490	)	(3)		1,008,140
Gross margin		27.5	%		–				–				27.9	%

Selling, general and administrative expense		(815,545	)		520				(13,591	)	(4)		(802,474	)
Net earnings from affiliates		18,469			–				–				18,469

Operating income		197,219			165				(27,081	)			224,135
Operating income as a percentage of sales		5.5	%		–				–				6.2	%

Interest and other expense, net		(42,843	)		–				9,694		(5)		(52,537	)

Earnings before income taxes		154,376			165				(17,387	)			171,598
(Provision for) benefit from income taxes		43,639			1,799		(2)		59,689		(6)		(17,849	)
Tax Rate		-28.3	%		-1090.3	%			343.3	%			10.4	%

Net earnings attributable to Flowserve Corporation	$	188,689		$	1,964			$	42,302			$	144,423

Net earnings per share attributable to Flowserve Corporation common shareholders:
Basic	$	1.44		$	0.02			$	0.31			$	1.11
Diluted		1.44			0.01				0.33				1.10

Basic number of shares used for calculation		130,630			130,630				130,630				130,630
Diluted number of shares used for calculation		131,315			131,315				131,315				131,315

(a) Reported in conformity with U.S. GAAP

Notes:
(1) Represents realignment adjustments incurred as a result of realignment programs
(2) Includes tax impact of items above and reversal of realignment exit tax ($2.1 million)
(3) Represents the reserve of Russia related financial exposures ($18.2 million) and reversals of expenses that were adjusted for Non-GAAP measures in previous periods ($4.7 million)
(4) Represents the reserve of Russia related financial exposures ($15.7 million), a discrete asset write-down ($3.0 million) and reversals of expenses that were adjusted for Non-GAAP measures in previous periods ($5.1 million)
(5) Represents below-the-line foreign exchange impacts
(6) Includes tax impact of items above and tax benefit due to the release of tax valuation allowance ($59.3 million)





RECONCILIATION OF NON-GAAP MEASURES
(Unaudited)

	Year Ended December 31, 2021
(Amounts in thousands, except per share data)	As Reported (a)			Realignment (1)				Other Items				As Adjusted

Sales	$	3,541,060		$	–			$	–			$	3,541,060
Gross profit		1,049,725			(16,844	)			–				1,066,568
Gross margin		29.6	%		–				–				30.1	%

Selling, general and administrative expense		(797,076	)		(5,646	)			–				(791,431	)
Gain on sale of business		1,806			–				1,806		(3)		–
Net earnings from affiliates		16,304			–				–				16,304

Operating income		270,759			(22,490	)			1,806				291,441
Operating income as a percentage of sales		7.6	%		–				–				8.2	%

Interest and other expense, net		(137,171	)		–				(75,188	)	(4)		(61,982	)

Earnings before income taxes		133,588			(22,490	)			(73,382	)			229,459
(Provision for) benefit from income taxes		2,594			7,070		(2)		33,522		(5)		(37,997	)
Tax Rate		-1.9	%		31.4	%			45.7	%			16.6	%

Net earnings attributable to Flowserve Corporation	$	125,949		$	(15,420	)		$	(39,860	)		$	181,229

Net earnings per share attributable to Flowserve Corporation common shareholders:
Basic	$	0.97		$	(0.12	)		$	(0.30	)		$	1.39
Diluted		0.96			(0.12	)			(0.30	)			1.38

Basic number of shares used for calculation		130,305			130,305				130,305				130,305
Diluted number of shares used for calculation		130,857			130,857				130,857				130,857

(a) Reported in conformity with U.S. GAAP

Notes:
(1) Represents realignment expense incurred as a result of realignment programs
(2) Includes tax impact of items above and realignment related tax release
(3) Represents final settlement gain on sale of business in 2018
(4) Represents below-the-line foreign exchange impacts and expense as a result of early extinguishment of debt and duplicate interest expense ($47.7 million)
(5) Includes tax impact of items above and tax benefit related to legal entity restructuring of foreign holding companies ($17.9 million)





SEGMENT INFORMATION
(Unaudited)

FLOWSERVE PUMP DIVISION	Year Ended December 31,
(Amounts in millions, except percentages)		2022			2021			2020
Bookings	$	3,214.7		$	2,675.7		$	2,358.4
Sales		2,522.5			2,470.8			2,675.7
Gross profit		728.1			760.4			811.4
Gross profit margin		28.9	%		30.8	%		30.3	%
SG&A		538.5			535.6			552.2
Gain on sale of business		–			1.8			–
Segment operating income		208.0			243.2			271.0
Segment operating income as a percentage of sales		8.2	%		9.8	%		10.1	%


FLOW CONTROL DIVISION	Year Ended December 31,
(Amounts in millions, except percentages)		2022			2021			2020
Bookings	$	1,247.2		$	1,112.8		$	1,065.8
Sales		1,100.6			1,075.9			1,057.5
Gross profit		305.5			316.7			321.9
Gross profit margin		27.8	%		29.4	%		30.4	%
SG&A		192.1			197.4			196.3
Segment operating income		113.4			119.7			125.6
Segment operating income as a percentage of sales		10.3	%		11.1	%		11.9	%





Fourth Quarter and Full Year 2022 – Segment Results
(dollars in millions, comparison vs. 2021 fourth quarter and full year, unaudited)

	FPD						FCD
	4th Qtr			YTD			4th Qtr			YTD
Bookings	$	786.2		$	3,214.7		$	324.9		$	1,247.2
– vs. prior year		13.4	%		20.1	%		16.5	%		12.1	%
– on constant currency		18.7	%		25.2	%		21.4	%		16.5	%

Sales	$	739.4		$	2,522.5		$	301.8		$	1,100.6
– vs. prior year		13.9	%		2.1	%		10.6	%		2.3	%
– on constant currency		19.3	%		6.8	%		16.6	%		6.9	%

Gross Profit	$	217.1		$	728.1		$	87.5		$	305.5
– vs. prior year		9.5	%		-4.2	%		9.0	%		-3.5	%

Gross Margin (% of sales)		29.4	%		28.9	%		29.0	%		27.8	%
– vs. prior year (in basis points)	(120) bps			(190) bps			(40) bps			(160) bps

Operating Income	$	90.7		$	208.0		$	38.1		$	113.4
– vs. prior year		45.1	%		-14.5	%		27.0	%		-5.3	%
– on constant currency		52.9	%		-9.4	%		33.4	%		-2.0	%

Operating Margin (% of sales)		12.3	%		8.2	%		12.6	%		10.3	%
– vs. prior year (in basis points)	270 bps			(160) bps			160 bps			(80) bps

Adjusted Operating Income *	$	96.6		$	229.3		$	38.7		$	119.4
– vs. prior year		53.1	%		-10.7	%		26.9	%		-2.5	%
– on constant currency		60.8	%		-5.9	%		33.1	%		0.7	%

Adj. Oper. Margin (% of sales)*		13.1	%		9.1	%		12.8	%		10.8	%
– vs. prior year (in basis points)	340 bps			(130) bps			160 bps			(60) bps

Backlog	$	2,008.9					$	745.5

* Adjusted Operating Income and Adjusted Operating Margin exclude realignment charges and other specific discrete items





CONSOLIDATED BALANCE SHEETS
(Unaudited)
	December 31,			December 31,
(Amounts in thousands, except per share data)		2022			2021

ASSETS
Current assets:
Cash and cash equivalents	$	434,971		$	658,452
Accounts receivable, net		868,632			739,210
Contract assets, net		233,457			195,598
Inventories, net		803,198			678,287
Prepaid expenses and other		110,714			117,130
Total current assets		2,450,972			2,388,677
Property, plant and equipment, net		500,945			515,927
Operating lease right-of-use assets, net		174,980			193,863
Goodwill		1,168,124			1,196,479
Deferred taxes		149,290			44,049
Other intangible assets, net		134,503			152,463
Other assets, net		211,820			258,310
Total assets	$	4,790,634		$	4,749,768

LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	476,747		$	410,062
Accrued liabilities		427,578			445,092
Contract liabilities		256,963			202,965
Debt due within one year		49,335			41,058
Operating lease liabilities		32,528			32,628
Total current liabilities		1,243,151			1,131,805
Long-term debt due after one year		1,224,151			1,261,770
Operating lease liabilities		155,196			166,786
Retirement obligations and other liabilities		309,529			352,062
Shareholders’ equity:
Common shares, $1.25 par value		220,991			220,991
Shares authorized – 305,000
Shares issued – 176,793 and 176,793, respectfully
Capital in excess of par value		507,484			506,386
Retained earnings		3,774,209			3,691,023
Treasury shares, at cost – 46,359 and 46,794 shares, respectively		(2,036,882	)		(2,057,706	)
Deferred compensation obligation		6,979			7,214
Accumulated other comprehensive loss		(647,788	)		(563,589	)
Total Flowserve Corporation shareholders’ equity		1,824,993			1,804,319
Noncontrolling interests		33,614			33,026
Total equity		1,858,607			1,837,345
Total liabilities and equity	$	4,790,634		$	4,749,768





CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
	Year Ended December 31,
(Amounts in thousands)		2022			2021			2020

Cash flows – Operating activities:
Net earnings, including noncontrolling interests	$	198,015		$	136,182		$	140,875
Adjustments to reconcile net earnings to net cash provided (used) by operating activities:
Depreciation		77,636			85,175			86,175
Amortization of intangible and other assets		13,317			14,647			14,578
Loss on extinguishment of debt		–			46,176			1,201
Stock-based compensation		25,530			29,478			27,252
Foreign currency, asset write downs and other non-cash adjustments		(27,758	)		29,772			4,277
Change in assets and liabilities:
Accounts receivable, net		(152,011	)		(8,675	)		45,648
Inventories, net		(147,492	)		(32,124	)		15,306
Contract assets, net		(41,768	)		74,333			4,258
Prepaid expenses and other assets, net		17,461			1,302			34,262
Accounts payable		78,968			(19,505	)		(22,571	)
Contract liabilities		61,684			14,196			(34,066	)
Accrued liabilities and income taxes payable		(5,226	)		(13,948	)		50,203
Retirement obligations and other		(1,430	)		(15,690	)		3,636
Net deferred taxes		(136,936	)		(91,200	)		(60,497	)
Net cash flows provided (used) by operating activities		(40,010	)		250,119			310,537
Cash flows – Investing activities:
Capital expenditures		(76,287	)		(54,936	)		(57,405	)
Proceeds from disposal of assets		4,422			2,663			15,705
Proceeds from termination of cross-currency swap		66,004			–			–
Affiliate investment activity		(225	)		(7,204	)		–
Net cash flows provided (used) by investing activities		(6,086	)		(59,477	)		(41,700	)
Cash flows – Financing activities:
Payments on senior notes		–			(1,243,548	)		(191,258	)
Proceeds from issuance of senior notes		–			498,280			498,280
Payments on long-term debt		(32,500	)		(7,500	)		–
Proceeds from issuance of long-term debt		–			300,000			–
Payment of deferred loan cost		–			(6,739	)		(4,572	)
Proceeds from short-term financing		45,000			–			–
Payments on short-term financing		(45,000	)		–			–
Proceeds under other financing arrangements		1,733			1,408			2,285
Payments under other financing arrangements		(1,790	)		(2,086	)		(5,088	)
Payments related to tax withholding for stock-based compensation		(4,683	)		(5,984	)		(4,607	)
Repurchases of common shares		–			(17,531	)		(32,112	)
Payments of dividends		(104,549	)		(104,604	)		(104,159	)
Other		(8,223	)		(11,403	)		(11,182	)
Net cash flows provided (used) by financing activities		(150,012	)		(599,707	)		147,587
Effect of exchange rate changes on cash		(27,373	)		(27,757	)		7,870
Net change in cash and cash equivalents		(223,481	)		(436,822	)		424,294
Cash and cash equivalents at beginning of year		658,452			1,095,274			670,980
Cash and cash equivalents at end of year	$	434,971		$	658,452		$	1,095,274
Income taxes paid (net of refunds)	$	60,085		$	65,621		$	75,342
Interest paid		41,629			72,247			57,041





CONSOLIDATED QUARTERLY FINANCIAL DATA
(Unaudited)
(Amounts in millions, except per share data)
	2022
Quarter	4th		3rd		2nd		1st
Sales		1,039.0		872.9		882.2		821.1
Gross profit		295.2		239.6		249.8		209.6
Earnings before income taxes		64.7		42.5		57.7		(10.5	)
Net earnings attributable to Flowserve Corporation		121.3		38.4		44.8		(15.8	)
Earnings per share(1):
Basic	$	0.93	$	0.29	$	0.34	$	(0.12	)
Diluted	$	0.92	$	0.29	$	0.34	$	(0.12	)


	2021
Quarter	4th		3rd		2nd		1st
Sales	$	919.5	$	866.1	$	898.2	$	857.3
Gross profit		267.1		253.5		278.2		250.9
Earnings before income taxes		20.8		41.4		50.5		21.0
Net earnings attributable to Flowserve Corporation		16.7		49.8		45.4		14.1
Earnings per share (1):
Basic	$	0.13	$	0.38	$	0.35	$	0.11
Diluted	$	0.13	$	0.38	$	0.35	$	0.11

(1) Earnings per share is computed independently for each of the quarters presented. The sum of the quarters may not equal the total year amount due to the impact of changes in weighted average quarterly shares outstanding or rounding.

View source version on businesswire.com: https://www.businesswire.com/news/home/20230221005707/en/

Jay Roueche, Vice President, Investor Relations & Treasurer (972) 443-6560

Mike Mullin, Director, Investor Relations (214) 697-8568

KEYWORDS: United States North America Texas

INDUSTRY KEYWORDS: Engineering Other Energy Oil/Gas Manufacturing Energy Other Manufacturing Machinery

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February 21, 2023 4:31 pm

First Trust High Yield Opportunities 2027 Term Fund Declares its Monthly Common Share Distribution of $0.1269 Per Share for March

First Trust High Yield Opportunities 2027 Term Fund Declares its Monthly Common Share Distribution of $0.1269 Per Share for March

WHEATON, Ill.–(BUSINESS WIRE)–
First Trust High Yield Opportunities 2027 Term Fund (the “Fund”) (NYSE: FTHY) has declared the Fund’s regularly scheduled monthly common share distribution in the amount of $0.1269 per share payable on March 27, 2023, to shareholders of record as of March 3, 2023. The ex-dividend date is expected to be March 2, 2023. The monthly distribution information for the Fund appears below.

First Trust High Yield Opportunities 2027 Term Fund (FTHY):

Distribution per share:………………………………………………………………………………………………… $0.1269

Distribution Rate based on the February 17, 2023 NAV of $15.70:…………………………………………. 9.70%

Distribution Rate based on the February 17, 2023 closing market price of $14.39:……………………. 10.58%

This distribution will consist of net investment income earned by the Fund and return of capital and may also consist of net short-term realized capital gains. The final determination of the source and tax status of all distributions paid in 2023 will be made after the end of 2023 and will be provided on Form 1099-DIV.

The Fund has a practice of seeking to maintain a relatively stable, attractive monthly distribution which may be changed periodically. First Trust Advisors L.P. (“FTA”) believes the practice helps maintain the Fund’s competitiveness and may benefit the Fund’s market price and premium/discount to the Fund’s NAV. The practice has no impact on the Fund’s investment strategy and may reduce the Fund’s NAV.

The Fund is a diversified, closed-end management investment company. The Fund’s investment objective is to provide current income. Under normal market conditions, the Fund will seek to achieve its investment objective by investing at least 80% of its managed assets in high yield debt securities of any maturity that are rated below investment grade at the time of purchase or unrated securities determined by First Trust Advisors L.P. (“FTA”) to be of comparable quality. High yield debt securities include U.S. and non-U.S. corporate debt obligations and senior, secured floating rate loans (“Senior Loans”). Securities rated below investment grade are commonly referred to as “junk” or “high yield” securities and are considered speculative with respect to the issuer’s capacity to pay interest and repay principal. There can be no assurance that the Fund will achieve its investment objective or that the Fund’s investment strategies will be successful.

First Trust Advisors L.P. (“FTA”) is a federally registered investment advisor and serves as the Fund’s investment advisor. FTA and its affiliate First Trust Portfolios L.P. (“FTP”), a FINRA registered broker-dealer, are privately-held companies that provide a variety of investment services. FTA has collective assets under management or supervision of approximately $200 billion as of January 31, 2023 through unit investment trusts, exchange-traded funds, closed-end funds, mutual funds and separate managed accounts. FTA is the supervisor of the First Trust unit investment trusts, while FTP is the sponsor. FTP is also a distributor of mutual fund shares and exchange-traded fund creation units. FTA and FTP are based in Wheaton, Illinois.

Principal Risk Factors: Risks are inherent in all investing. Certain risks applicable to the Fund are identified below, which includes the risk that you could lose some or all of your investment in the Fund. The principal risks of investing in the Fund are spelled out in the Fund’s annual shareholder reports. The order of the below risk factors does not indicate the significance of any particular risk factor. The Fund also files reports, proxy statements and other information that is available for review.

Past performance is no assurance of future results. Investment return and market value of an investment in the Fund will fluctuate. Shares, when sold, may be worth more or less than their original cost. There can be no assurance that the Fund’s investment objectives will be achieved. The Fund may not be appropriate for all investors.

Securities held by a fund, as well as shares of a fund itself, are subject to market fluctuations caused by factors such as general economic conditions, political events, regulatory or market developments, changes in interest rates and perceived trends in securities prices. Shares of a fund could decline in value or underperform other investments as a result of the risk of loss associated with these market fluctuations. In addition, local, regional or global events such as war, acts of terrorism, spread of infectious diseases or other public health issues, recessions, or other events could have a significant negative impact on a fund and its investments. Such events may affect certain geographic regions, countries, sectors and industries more significantly than others. In February 2022, Russia invaded Ukraine which has caused and could continue to cause significant market disruptions and volatility within the markets in Russia, Europe, and the United States. The hostilities and sanctions resulting from those hostilities could have a significant impact on certain fund investments as well as fund performance. The COVID-19 global pandemic and the ensuing policies enacted by governments and central banks have caused and may continue to cause significant volatility and uncertainty in global financial markets. While the U.S. has resumed “reasonably” normal business activity, many countries continue to impose lockdown measures. Additionally, there is no guarantee that vaccines will be effective against emerging variants of the disease.

The Fund will typically invest in securities rated below investment grade, which are commonly referred to as “junk” or “high yield” securities and considered speculative because of the credit risk of their issuers. Such issuers are more likely than investment grade issuers to default on their payments of interest and principal owed to the Fund, and such defaults could reduce the Fund’s NAV and income distributions. An economic downturn would generally lead to a higher non-payment rate, and a high yield security may lose significant market value before a default occurs. Moreover, any specific collateral used to secure a high yield security may decline in value or become illiquid, which would adversely affect the high yield security’s value.

The debt securities in which the Fund invests are subject to certain risks, including issuer risk, reinvestment risk, prepayment risk, credit risk, and interest rate risk. Issuer risk is the risk that the value of fixed-income securities may decline for a number of reasons which directly relate to the issuer. Reinvestment risk is the risk that income from the Fund’s portfolio will decline if the Fund invests the proceeds from matured, traded or called bonds at market interest rates that are below the Fund portfolio’s current earnings rate. Prepayment risk is the risk that, upon a prepayment, the actual outstanding debt on which the Fund derives interest income will be reduced. Credit risk is the risk that an issuer of a security will be unable or unwilling to make dividend, interest and/or principal payments when due and that the value of a security may decline as a result. Interest rate risk is the risk that fixed-income securities will decline in value because of changes in market interest rates.

Senior Loans are structured as floating rate instruments in which the interest rate payable on the obligation fluctuates with interest rate changes. As a result, the yield on Senior Loans will generally decline in a falling interest rate environment, causing the Fund to experience a reduction in the income it receives from a Senior Loan. In addition, the market value of Senior Loans may fall in a declining interest rate environment and may also fall in a rising interest rate environment if there is a lag between the rise in interest rates and the reset. Many Senior Loans have a minimum base rate, or floor (typically, a “LIBOR floor”), which will be used if the actual base rate is below the minimum base rate. To the extent the Fund invests in such Senior Loans, the Fund may not benefit from higher coupon payments during periods of increasing interest rates as it otherwise would from investments in Senior Loans without any floors until rates rise to levels above the LIBOR floors. As a result, the Fund may lose some of the benefits of incurring leverage. Specifically, if the Fund’s borrowings have floating dividend or interest rates, its costs of leverage will increase as rates increase. In this situation, the Fund will experience increased financing costs without the benefit of receiving higher income. This in turn may result in the potential for a decrease in the level of income available for dividends or distributions to be made by the Fund.

The senior loan market has seen a significant increase in loans with weaker lender protections including, but not limited to, limited financial maintenance covenants or, in some cases, no financial maintenance covenants (i.e., “covenant-lite loans”) that would typically be included in a traditional loan agreement and general weakening of other restrictive covenants applicable to the borrower such as limitations on incurrence of additional debt, restrictions on payments of junior debt or restrictions on dividends and distributions. Weaker lender protections such as the absence of financial maintenance covenants in a loan agreement and the inclusion of “borrower-favorable” terms may impact recovery values and/or trading levels of senior loans in the future. The absence of financial maintenance covenants in a loan agreement generally means that the lender may not be able to declare a default if financial performance deteriorates. This may hinder the Fund’s ability to reprice credit risk associated with a particular borrower and reduce the Fund’s ability to restructure a problematic loan and mitigate potential loss. As a result, the Fund’s exposure to losses on investments in senior loans may be increased, especially during a downturn in the credit cycle or changes in market or economic conditions.

To the extent a fund invests in floating or variable rate obligations that use the London Interbank Offered Rate (“LIBOR”) as a reference interest rate, it is subject to LIBOR Risk. The United Kingdom’s Financial Conduct Authority, which regulates LIBOR has ceased making LIBOR available as a reference rate over a phase-out period that began December 31, 2021. There is no assurance that any alternative reference rate, including the Secured Overnight Financing Rate (“SOFR”) will be similar to or produce the same value or economic equivalence as LIBOR or that instruments using an alternative rate will have the same volume or liquidity. The unavailability or replacement of LIBOR may affect the value, liquidity or return on certain fund investments and may result in costs incurred in connection with closing out positions and entering into new trades. Any potential effects of the transition away from LIBOR on the fund or on certain instruments in which the fund invests can be difficult to ascertain, and they may vary depending on a variety of factors, and they could result in losses to the fund.

A second lien loan may have a claim on the same collateral pool as the first lien or it may be secured by a separate set of assets. Second lien loans are typically secured by a second priority security interest or lien on specified collateral securing the borrower’s obligation under the interest and present a greater degree of investment risk. These loans are also subject to the risk that borrower cash flow and property securing the loan may be insufficient to meet scheduled payments after giving effect to those loans with a higher priority. These loans also have greater price volatility than those loans with a higher priority and may be less liquid. However, second lien loans often pay interest at higher rates than first lien loans reflecting such additional risks.

The Fund intends to terminate on or about August 1, 2027. Because the assets of the Fund will be liquidated in connection with the termination, the Fund may be required to sell portfolio securities when it otherwise would not, including at times when market conditions are not favorable, which may cause the Fund to lose money. The Fund is not a “target term” Fund and its primary objective is to provide high current income. As a result, the Fund may not return the Fund’s initial public offering price of $20.00 per share at its termination.

Investing in securities of non-U.S. issuers, which are generally denominated in non-U.S. currencies, may involve certain risks not typically associated with investing in securities of U.S. issuers, including but not limited to economic risks, political risks, and currency risks.

Investing in emerging market countries, as compared to foreign developed markets, involves substantial additional risk due to more limited information about the issuer and/or the security (including limited financial and accounting information); higher brokerage costs; different accounting, auditing and financial reporting standards; less developed legal systems and thinner trading markets; the possibility of currency blockages or transfer restrictions; an emerging market country’s dependence on revenue from particular commodities or international aid; and the risk of expropriation, nationalization or other adverse political or economic developments.

Use of leverage can result in additional risk and cost, and can magnify the effect of any losses.

The Fund’s portfolio is subject to credit risk, interest rate risk, liquidity risk, prepayment risk and reinvestment risk. Interest rate risk is the risk that fixed-income securities will decline in value because of changes in market interest rates. Credit risk is the risk that an issuer of a security will be unable or unwilling to make dividend, interest and/or principal payments when due and that the value of a security may decline as a result. Credit risk may be heightened for the Fund because it invests in below investment grade securities. Liquidity risk is the risk that the fund may have difficulty disposing of senior loans if it seeks to repay debt, pay dividends or expenses, or take advantage of a new investment opportunity. Prepayment risk is the risk that, upon a prepayment, the actual outstanding debt on which the Fund derives interest income will be reduced. The Fund may not be able to reinvest the proceeds received on terms as favorable as the prepaid loan. Reinvestment risk is the risk that income from the Fund’s portfolio will decline if the Fund invests the proceeds from matured, traded or called instruments at market interest rates that are below the Fund’s portfolio’s current earnings rate.

The risks of investing in the Fund are spelled out in the shareholder report and other regulatory filings.

The information presented is not intended to constitute an investment recommendation for, or advice to, any specific person. By providing this information, First Trust is not undertaking to give advice in any fiduciary capacity within the meaning of ERISA, the Internal Revenue Code or any other regulatory framework. Financial professionals are responsible for evaluating investment risks independently and for exercising independent judgment in determining whether investments are appropriate for their clients.

The Fund’s daily closing New York Stock Exchange price and net asset value per share as well as other information can be found at https://www.ftportfolios.com or by calling 1-800-988-5891.

View source version on businesswire.com: https://www.businesswire.com/news/home/20230221005863/en/

Press Inquiries Ryan Issakainen 630-765-8689

Analyst Inquiries Jeff Margolin 630-915-6784

Broker Inquiries Sales Team 866-848-9727

KEYWORDS: United States North America Illinois

INDUSTRY KEYWORDS: Professional Services Finance

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