Item 1. Legal Proceedings.
We are involved in various claims and lawsuits arising in the ordinary course of business, some of which include claims for substantial sums, including proceedings involving tort and other general liability claims, employee claims and consumer protection claims. Most occurrences involving liability, claims of negligence and employees are covered by insurance with solvent insurance carriers. For those matters not covered by insurance, which include commercial matters, we recognize a liability when we believe the loss is probable and can be reasonably estimated. The ultimate results of claims and litigation cannot be predicted with certainty. We believe we have adequate reserves against such matters. We currently believe that the ultimate outcome of such lawsuits and proceedings will not, individually or in the aggregate, have a material adverse effect on our consolidated financial position, results of operations or liquidity. However, depending on the amount and timing, an unfavorable resolution of some or all of these matters could materially affect our future results of operations in a particular period.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
2(a): Unregistered Sales of Equity Securities and Use of Proceeds
None.
2(b): Use of Proceeds from Registered Securities
None.
2(c): Purchases of Equity Securities
During the nine months ended September 30, 2024, repurchases made pursuant to our stock repurchase program were as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| Period | | Total number of shares purchased(1) | | Weighted average price paid per share(2) | | Total number of shares purchased as part of publicly announced plans or programs(3) | | Maximum number (or approximate dollar value) of common shares that may yet be purchased under the plans or programs (in millions)(3) |
| January 1, 2024 through January 31, 2024 | | — | | $ | — | | | — | | $ | 150 | |
| February 1, 2024 through February 29, 2024 | | 162,539 | | $ | 15.39 | | | — | | $ | 150 | |
| March 1, 2024 through March 31, 2024 | | — | | $ | — | | | — | | $ | 150 | |
| April 1, 2024 through April 30, 2024 | | 106 | | $ | 17.12 | | | — | | $ | 150 | |
| May 1, 2024 through May 31, 2024 | | 1,483 | | $ | 15.95 | | | — | | $ | 150 | |
| June 1, 2024 through June 30, 2024 | | 1,663,340 | | $ | 15.01 | | | 1,662,959 | | $ | 125 | |
| July 1, 2024 through July 31, 2024 | | 260 | | $ | 14.48 | | | — | | $ | 125 | |
| August 1, 2024 through August 31, 2024 | | 2,524,173 | | $ | 13.85 | | | 2,524,001 | | $ | 90 | |
| September 1, 2024 through September 30, 2024 | | 242 | | $ | 14.44 | | | — | | $ | 90 | |
| Total | | 4,352,143 | | | | 4,186,960 | | |
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(1)The number of shares purchased represents shares of common stock repurchased under the applicable previously announced stock repurchase program as well as 165,183 shares of common stock surrendered by certain of our employees to satisfy their federal and state tax obligations associated with the vesting of restricted common stock.
(2)The weighted average price paid per share for shares of common stock surrendered by certain employees is based on the closing price of our common stock on the trading date immediately prior to the date of delivery of the shares. The weighted average price paid per share for shares repurchased excludes commissions paid.
(3)On February 17, 2023, our Board of Directors authorized and approved a $300 million stock repurchase program, which expires on February 21, 2025.
Item 3. Defaults Upon Senior Securities.
In June 2023, we ceased making debt service payments toward the SF Mortgage Loan, and we have received a notice of default from the servicer. As of October 30, 2024, the total arrearage related to the SF Mortgage Loan, including interest and fees was $84 million, of which $39 million is default interest. In October 2023, the trustee for the SF Mortgage Loan filed a lawsuit against the borrowers under the SF Mortgage Loan. In connection with the lawsuit, the court has appointed a receiver to take control of the Hilton San Francisco Hotels, which serve as security for the SF Mortgage Loan, and their operations, and thus, we have no further economic interest in the operations of the hotels. The receiver will operate and has authority over the hotels and, until no later than March 31, 2025, has the ability to sell the hotels. The lawsuit contemplates the receivership will end with a non-judicial foreclosure by July 15, 2025, if the hotels are not sold within the predetermined sale period.
