0001497645
FALSE
0001497645
2024-05-01
2024-05-01
0001497645
us-gaap:CommonStockMember
2024-05-01
2024-05-01
0001497645
inn:SeriesECumulativeRedeemablePreferredStock001ParValueMember
2024-05-01
2024-05-01
0001497645
inn:SeriesFCumulativeRedeemablePreferredStock001ParValueMember
2024-05-01
2024-05-01
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
May 1, 2024
SUMMIT HOTEL PROPERTIES, INC.
(Exact name of registrant as specified in its charter)
Maryland 001-35074 27-2962512
(State or other jurisdiction (Commission File Number) (I.R.S. Employer Identification No.)
of incorporation or organization)
13215 Bee Cave Parkway
,
Suite B-300
Austin
,
TX
78738
(Address of Principal Executive Offices) (Zip Code)
(
512
)
538-2300
(Registrant's telephone number, including area code)
Not applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of
the following provisions:
Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Trading Symbol(s) Name of each exchange on which registered
Common Stock, $0.01 par value INN New York Stock Exchange
Series E Cumulative Redeemable Preferred Stock, $0.01 par value INN-PE New York Stock Exchange
Series F Cumulative Redeemable Preferred Stock, $0.01 par value INN-PF New York Stock Exchange
Indicate by check mark whether the registrant is an emerging growth company as
defined in Rule 405 of the Securities Act of 1933 ((s)230.405 of this chapter)
or Rule 12b-2 of the Securities Exchange Act of 1934 ((s)240.12b-2 of this
chapter)
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has
elected not to use the extended transition period for complying with any new
or revised financial accounting standards provided pursuant to Section 13(a)
of the Exchange Act.
-------------------------------------------------------------------------------
Item 2.02. Results of Operations and Financial Condition.
On May 1, 2024, Summit Hotel Properties, Inc. (the "Company") issued a press
release announcing the operating results of the Company and its subsidiaries
for the three months ended March 31, 2024.
The press release referred to supplemental financial information for the first
quarter of 2024 that is available on the Company's website at
www.shpreit.com
. A copy of the press release and the supplemental financial information are
furnished as Exhibit 99.1 and Exhibit 99.2, respectively, to this Report.
The information in this Report, including the exhibits, is provided under Item
2.02 of Form 8-K and shall not be deemed "filed" for the purposes of Section
18 of the Securities Exchange Act of 1934 or otherwise subject to the
liabilities of that section. Furthermore, the information in this Report,
including the exhibits, shall not be deemed to be incorporated by reference
into the filings of the registrant under the Securities Act of 1933 regardless
of any general incorporation language in such filings.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
99.1 Press release, issued
May 1
, 2024
, providing consolidated operating results for the three months ended March 31, 2024.
99.2 F
irst
Quarter 202
4
Supplemental Data
104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
-------------------------------------------------------------------------------
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
SUMMIT HOTEL PROPERTIES, INC.
Date: May 1, 2024 By: /s/ Christopher R. Eng
Christopher R. Eng
Executive Vice President, General Counsel,
Chief Risk Officer and Secretary
13215 Bee Cave Pkwy, Suite B-300, Austin, TX 78738
Telephone: 512-538-2300 Fax: 512-538-2333
www.shpreit.com
NEWS RELEASE
SUMMIT HOTEL PROPERTIES REPORTS FIRST QUARTER 2024 RESULTS
Operating Income of $23.5 million for First Quarter 2024
Adjusted EBITDAre Grows 10% to $48.8 million; Adjusted FFO Increases 14% to
$0.24 per Share
Sale of Three Hotels for $84.0 Million Further Deleverages Balance Sheet
Subsequent to Quarter End
Common Dividend Increased 33% to Annualized $0.32 per Share
Austin, Texas, May 1, 2024
- - - Summit Hotel Properties, Inc. (NYSE: INN) (the "Company"), today
announced results for the three months ended March 31, 2024.
"We are pleased with our strong first quarter financial results, highlighted
by 10 percent Adjusted EBITDAre growth and 14 percent Adjusted FFO growth.
RevPAR increased 1.5 percent in our pro forma portfolio during the quarter
which exceeded the total U.S. and upscale RevPAR growth rates by 130 basis
points and 140 basis points, respectively. Hotel EBITDA margins expanded 80
basis points from the first quarter of last year driven by strong cost
controls that led to a decrease in operating expenses on a per occupied room
basis year-over-year," said Jonathan P. Stanner, the Company's President and
Chief Executive Officer.
"Subsequent to quarter end, we successfully completed the sale of three assets
for $84.0 million at an attractive blended capitalization rate of 6.8 percent.
The dispositions will further deleverage the balance sheet, enhance our
liquidity position, and better position the Company for future growth. We have
updated our full year 2024 outlook to incorporate our strong first quarter
results and a continued positive outlook for the remainder of 2024, which
results in an increase in Adjusted EBITDAre and Adjusted FFO after
consideration of adjustments related to recent asset sales. Finally, our Board
of Directors has authorized an increase of our common dividend to $0.32 per
share on an annualized basis, an increase of 33 percent, which reflects the
confidence we have in our operating results and the durability of our cash
flows," continued Mr. Stanner.
First Quarter 2024 Summary
.
Net Loss:
Net loss attributable to common stockholders was $2.1 million, or $0.02 per
diluted share, compared to a net loss of $5.2 million, or $0.05 per diluted
share, for the first quarter of 2023.
.
Pro forma RevPAR:
Pro forma RevPAR increased 1.5 percent to $124.18 compared to the first
quarter of 2023. Pro forma ADR decreased 1.4 percent to $173.01 compared to
the same period in 2023, and pro forma occupancy increased 3.0 percent to 71.8
percent.
.
Same Store RevPAR:
Same Store RevPAR increased 1.7 percent to $123.19 compared to the first
quarter of 2023. Same store ADR decreased 1.3 percent to $171.91 and same
store occupancy increased 3.1 percent to 71.7 percent.
.
Pro Forma Hotel EBITDA
(1)
:
Pro forma hotel EBITDA increased 5.6 percent to $68.6 million from $65.0
million in the same period in 2023. Pro forma hotel EBITDA margin expanded
approximately 80 basis points to 36.5 percent from 35.7 percent in the same
period of 2023.
.
Same Store Hotel EBITDA
(1)
:
Same store hotel EBITDA increased 5.9 percent to $66.7 million from $63.0
million in the same period in 2023. Same store hotel EBITDA margin expanded
approximately 90 basis points to 36.2 percent from 35.3 percent in the same
period of 2023.
.
Adjusted EBITDA
re
(1)
:
Adjusted EBITDA
re
increase 9.8 percent to $48.8 million from $44.4 million in the first quarter
of 2023.
.
Adjusted FFO
(1)
:
Adjusted FFO was $30.0 million, or $0.24 per diluted share, compared to $26.3
million, or $0.22 per diluted share, in the first quarter of 2023.
1 | P a g e
-------------------------------------------------------------------------------
The Company's results for the three months ended March 31, 2024 and 2023 are
as follows (in thousands, except per share amounts and metrics):
For the Three Months Ended
March 31,
2024 2023
Net loss attributable to common stockholders $ (2,116) $ (5,228)
Net loss per diluted share $ (0.02) $ (0.05)
Total revenues $ 188,142 $ 182,383
EBITDAre $ 61,199 $ 55,340
(1)
Adjusted EBITDAre $ 48,801 $ 44,427
(1)
FFO $ 25,488 $ 22,076
(1)
Adjusted FFO $ 29,996 $ 26,260
(1)
FFO per diluted share and unit $ 0.21 $ 0.18
(1) (2)
Adjusted FFO per diluted share and unit $ 0.24 $ 0.22
(1) (2)
Pro Forma
(2)
RevPAR $ 124.18 $ 122.33
RevPAR Growth 1.5%
Hotel EBITDA $ 68,562 $ 64,956
Hotel EBITDA Margin 36.5% 35.7%
Hotel EBITDA Margin Growth 81 bps
Same Store
(3)
RevPAR $ 123.19 $ 121.15
RevPAR Growth 1.7%
Hotel EBITDA $ 66,724 $ 63,007
Hotel EBITDA Margin 36.2% 35.3%
Hotel EBITDA Margin Growth 87 bps
(1) See tables later in this press release for a discussion and reconciliation
of net income (loss) to non-GAAP financial measures, including earnings before
interest, taxes, depreciation, and amortization ("EBITDA"), EBITDAre, adjusted
EBITDAre, funds from operations ("FFO"), FFO per diluted share and unit,
adjusted FFO ("AFFO"), and AFFO per diluted share and unit, as well as a
reconciliation of operating income (loss) to hotel EBITDA. See "Non-GAAP
Financial Measures" at the end of this release.
(2) Unless stated otherwise in this release, all pro forma information
includes operating and financial results for 99 hotels owned as of March 31,
2024, as if each hotel had been owned by the Company since January 1, 2023 and
remained open for the entirety of the measurement period. As a result, all pro
forma information includes operating and financial results for hotels acquired
since January 1, 2023, which may include periods prior to the Company's
ownership. Pro forma and non-GAAP financial measures are unaudited.
(3) All same store information includes operating and financial results for 97
hotels owned as of March 31, 2024, and at all times during the three months
ended March 31, 2024, and 2023.
Transaction Activity
Subsequent to quarter-end, the Company completed the sale of three hotels
containing 529 guestrooms for a gross sales price of $84 million. The
aggregate sales price for the transactions represents a blended 6.8 percent
capitalization rate based the estimated net operating income after a FF&E
reserve for the full year 2024 and after consideration of approximately $13
million of foregone near-term required capital expenditures. Net proceeds from
the transaction were used to repay debt and other general corporate purposes,
which included reducing the Company's corporate revolving credit facility
balance from $55 million to zero. Sales transactions details below:
2 | P a g e
-------------------------------------------------------------------------------
.
The Company sold the Courtyard and SpringHill Suites New Orleans Warehouse
Arts District, containing 410 guestrooms, for a gross sales price of $73
million in April. The aggregate sales price for the transaction represents a
6.7 percent capitalization rate based on the estimated net operating income
after a 5.0 percent FF&E reserve for the full year 2024 and after
consideration of approximately $10 million of foregone near-term required
capital expenditures. The transaction will result in an estimated net gain on
sale of $28 million which will be recorded in the second quarter.
.
Through its joint venture with GIC, the Company sold the 119-guestroom Hilton
Garden Inn College Station for a gross sales price of $11 million in April.
The sales price for the transaction represents a 7.9 percent capitalization
rate based on the estimated net operating income after a 4.0 percent FF&E
reserve for the full year 2024 and after consideration of approximately $3
million of foregone near-term required capital expenditures. Net proceeds from
the transaction were used to repay debt and other general corporate purposes
of the joint venture, including a partial repayment of the GIC joint venture
term loan by $6 million.
Sold Hotels Keys Date Price Capex RevPAR Cap Rate
(1) (2)
Courtyard & SpringHill Suites New Orleans Warehouse Arts District 410 April 2024 73,000 10,250 114 6.7%
Hilton Garden Inn College Station 119 April 2024 11,000 2,975 86 7.9%
Total 529 $ 84,000 $ 13,225 $ 108 6.8%
(1) Reflects estimated near-term foregone capital expenditures for
dispositions and near-term capital requirements for acquisitions.
(2) Capitalization rate for the full year 2024 and after consideration of
estimated near-term capital expenditure requirements.
Capital Markets and Balance Sheet
The Company continues to enhance its balance sheet including successfully
closing the following previously announced transactions:
.
In February 2024, the Company completed a new $200 million senior unsecured
term loan financing (the "2024 Term Loan"). The 2024 Term Loan provides for a
fully extended maturity date of February 2029 and interest rate pricing
ranging from 135 basis points to 235 basis points over the applicable adjusted
term SOFR. Proceeds from the 2024 Term Loan financing, along with asset sale
proceeds, cash on hand, and revolver availability, were used to repay in full
the Company's $225 million term loan that was scheduled to mature in February
2025.
.
In January 2024, subsidiaries of the GIC joint venture entered into a $100
million interest rate swap to fix one-month term SOFR at 3.77 percent until
January 2026, which compares to the current term SOFR rate of 5.32. The
interest rate swap has an effective date of October 1, 2024.
On a pro rata basis as of March 31, 2024, the Company had the following
outstanding indebtedness and liquidity available:
.
Outstanding debt of $1.2 billion with a weighted average interest rate of 4.84
percent. After giving effect to interest rate derivative agreements, $848.8
million, or 73 percent, of our outstanding debt had an average fixed interest
rate, and $309.7 million, or 27 percent, had a variable interest rate.
.
Unrestricted cash and cash equivalents of $49.6 million.
On a pro rata basis as of April 30, 2024, the Company currently estimates it
has the following outstanding indebtedness and liquidity available:
.
As a result of the 2024 Term Loan financing, the Company has no significant
debt maturities until 2026 and has an average length to maturity of
approximately 3.3 years.
.
Outstanding debt of $1.1 billion with a weighted average interest rate of 4.67
percent. After giving effect to interest rate derivative agreements, $848.8
million, or 77 percent, of our outstanding debt had an average fixed interest
rate, and $251.6 million, or 23 percent, had a variable interest rate.
3 | P a g e
-------------------------------------------------------------------------------
.
Unrestricted cash and cash equivalents of $68.1 million.
.
Total liquidity of $434.7 million, including unrestricted cash and cash
equivalents and revolving credit facility availability.
Common Dividend Increased 33% to Annualized $0.32 Per Share
On May 1, 2024, the Company declared a 33 percent increase to its quarterly
cash dividend rate to $0.08 per share on its common stock and per common unit
of limited partnership interest in Summit Hotel OP, LP. The quarterly dividend
of $0.08 per share represents an annualized dividend yield of 5.3 percent,
based on the closing price of shares of the common stock on April 30, 2024.
In addition, the Board of Directors declared a quarterly cash dividend of:
. $0.390625 per share on its 6.25% Series E Cumulative Redeemable
Preferred Stock
. $0.3671875 per share on its 5.875% Series F Cumulative Redeemable
Preferred Stock.
. $0.328125 per unit on its 5.25% Series Z Cumulative Perpetual Preferred
Units
The dividends are payable on May 31, 2024, to holders of record as of May 17,
2024.
2024 Outlook
The Company's updated outlook for the full year 2024 based on 96 lodging
assets, 54 of which were wholly owned as of May 1, 2024. The updated outlook
incorporates all transaction activity closed to date, including the three
hotels sold subsequent to quarter end, and there are no additional
acquisitions, dispositions, or capital markets activities assumed in the
Company's full year 2024 outlook beyond the transactions already completed.
The Company estimates that the sold hotels subsequent to quarter-end would
have contributed approximately $4.0 million of Adjusted EBITDAre for the
remainder of 2024.
FYE 2024 Outlook
Low High Variance to Prior Midpoint % Change to Prior Midpoint
Pro Forma RevPAR Growth 2.00 % 4.00 % - % - %
(1)
Adjusted EBITDAre $ 188,000 $ 200,000 $ - - %
Adjusted FFO $ 111,000 $ 123,000 $ - - %
Adjusted FFO per Diluted Unit $ 0.90 $ 1.00 $ - - %
Capital Expenditures, Pro Rata $ 65,000 $ 85,000 $ - - %
(1) All pro forma information includes operating and financial results for 96
lodging assets owned as of May 1, 2024, as if each property had been owned by
the Company since January 1, 2023 and will continue to be owned through the
entire year ending December 31, 2024. As a result, the pro forma information
includes operating and financial results for lodging assets acquired since
January 1, 2023, which may include periods prior to the Company's ownership.
Pro forma and non-GAAP financial measures are unaudited.
4 | P a g e
-------------------------------------------------------------------------------
First Quarter 2024 Earnings Conference Call
The Company will conduct its quarterly conference call on Thursday, May 2,
2024, at 9:00 AM ET.
1.
To access the conference call, please pre-register using this
link
. Registrants will receive a confirmation with dial-in details.
2.
A live webcast of the conference call can be accessed using this
link
. A replay of the webcast will be available in the Investors section of the
Company's website,
www.shpreit.com
, until July 31, 2024.
Supplemental Disclosures
In conjunction with this press release, the Company has furnished a financial
supplement with additional disclosures on its website. Visit
www.shpreit.com
for more information. The Company has no obligation to update any of the
information provided to conform to actual results or changes in portfolio,
capital structure or future expectations.
About Summit Hotel Properties
Summit Hotel Properties, Inc. is a publicly traded real estate investment
trust focused on owning premium-branded lodging facilities with efficient
operating models primarily in the upscale segment of the lodging industry. As
of May 1, 2024, the Company's portfolio consisted of 96 assets, 54 of which
are wholly owned, with a total of 14,256 guestrooms located in 24 states.
For additional information, please visit the Company's website,
www.shpreit.com
, and follow on Twitter at @SummitHotel_INN and on Facebook at facebook.com/Summ
itHotelProperties.
Contact:
Adam Wudel
SVP - Finance & Capital Markets
Summit Hotel Properties, Inc.
(512) 538-2325
5 | P a g e
-------------------------------------------------------------------------------
Forward-Looking Statements
This press release contains statements that are "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, pursuant
to the safe harbor provisions of the Private Securities Litigation Reform Act
of 1995. Forward-looking statements are generally identifiable by use of
forward-looking terminology such as "may," "will," "should," "potential,"
"intend," "expect," "seek," "anticipate," "estimate," "approximately,"
"believe," "could," "project," "predict," "forecast," "continue," "plan,"
"likely," "would" 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, or other forward-looking information. Examples of forward-looking
statements include the following: the Company's ability to realize growth from
the deployment of renovation capital; projections of the Company's revenues
and expenses, capital expenditures or other financial items; descriptions of
the Company's plans or objectives for future operations, acquisitions,
dispositions, financings, redemptions or services; forecasts of the Company's
future financial performance and potential increases in average daily rate,
occupancy, RevPAR, room supply and demand, EBITDAre, Adjusted EBITDAre, FFO
and AFFO; the Company's outlook with respect to pro forma RevPAR, pro forma
RevPAR growth, RevPAR, RevPAR growth, AFFO, AFFO per diluted share and unit
and renovation capital deployed; and descriptions of assumptions underlying or
relating to any of the foregoing expectations regarding the timing of their
occurrence. These forward-looking statements are subject to various risks and
uncertainties, not all of which are known to the Company and 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, supply and demand in the
hotel industry, and other factors as are described in greater detail in the
Company's filings with the Securities and Exchange Commission ("SEC"). 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 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 Annual
Report on Form 10-K for the year ended December 31, 2023, filed with the SEC,
and its quarterly and other periodic filings with the SEC. The Company
undertakes no duty to update the statements in this release to conform the
statements to actual results or changes in the Company's expectations.
6 | P a g e
-------------------------------------------------------------------------------
Summit Hotel Properties, Inc.
Condensed Consolidated Balance Sheets
(In thousands)
March 31, 2024 December 31, 2023
(Unaudited)
ASSETS
Investments in lodging property, net $ 2,715,009 $ 2,729,049
Investment in lodging property under development 2,364 1,451
Assets held for sale, net 64,019 73,740
Cash and cash equivalents 63,435 37,837
Restricted cash 8,916 9,931
Right-of-use assets, net 34,244 34,814
Trade receivables, net 27,985 21,348
Prepaid expenses and other 17,183 8,865
Deferred charges, net 6,495 6,659
Other assets 21,182 15,554
Total assets $ 2,960,832 $ 2,939,248
LIABILITIES, REDEEMABLE NON-CONTROLLING INTERESTS AND EQUITY
Liabilities:
Debt, net of debt issuance costs $ 1,452,002 $ 1,430,668
Lease liabilities, net 25,413 25,842
Accounts payable 7,303 4,827
Accrued expenses and other 81,719 81,215
Total liabilities 1,566,437 1,542,552
Redeemable non-controlling interests 50,219 50,219
Total stockholders' equity 907,758 911,195
Non-controlling interests 436,418 435,282
Total equity 1,344,176 1,346,477
Total liabilities, redeemable non-controlling interests and equity $ 2,960,832 $ 2,939,248
7 | P a g e
-------------------------------------------------------------------------------
Summit Hotel Properties, Inc.
Condensed Consolidated Statements of Operations
(Unaudited)
(In thousands, except per share amounts)
For the Three Months Ended
March 31,
2024 2023
Revenues:
Room $ 167,431 $ 163,089
Food and 10,833 10,630
beverage
Other 9,878 8,664
Total 188,142 182,383
revenues
Expenses:
Room 35,973 35,909
Food and 8,202 7,955
beverage
Other lodging property 56,261 56,125
operating expenses
Property taxes, 14,285 14,724
insurance and other
Management 4,897 4,805
fees
Depreciation and 36,799 36,908
amortization
Corporate general 8,311 8,005
and administrative
Recoveries of - (250)
credit losses
Total 164,728 164,181
expenses
Gain on disposal 75 -
of assets, net
Operating 23,489 18,202
income
Other income
(expense):
Interest (21,582) (20,909)
expense
Interest 458 306
income
Other income 685 (41)
(loss), net
Total other (20,439) (20,644)
expense, net
Income (loss) from continuing 3,050 (2,442)
operations before income taxes
Income tax (217) 472
(expense) benefit
Net income 2,833 (1,970)
(loss)
Less - (Income) loss attributable (322) 1,369
to non-controlling interests
Net income (loss) attributable to Summit Hotel Properties, 2,511 (601)
Inc. before preferred dividends and distributions
Less - Distributions to and accretion (657) (657)
of redeemable non-controlling interests
Less - Preferred (3,970) (3,970)
dividends
Net loss attributable $ (2,116) $ (5,228)
to common stockholders
Loss per
share:
Basic and $ (0.02) $ (0.05)
Diluted
Weighted-average common
shares outstanding:
Basic and 105,720 105,312
Diluted
8 | P a g e
-------------------------------------------------------------------------------
Summit Hotel Properties, Inc.
Reconciliation of Net Income (Loss) to Non-GAAP Measures - Funds From Operations
(Unaudited)
(In thousands, except per share and unit amounts)
For the Three Months Ended
March 31,
2024 2023
Net income $ 2,833 $ (1,970)
(loss)
Preferred (3,970) (3,970)
dividends
Distributions to and accretion of (657) (657)
redeemable non-controlling interests
(Income) loss related to non-controlling (638) 680
interests in consolidated joint ventures
Net loss applicable to Common (2,432) (5,917)
Stock and Common Units
Real estate-related 35,603 35,727
depreciation
(Gain) loss on disposal of assets (75) 48
and other dispositions, net
Adjustments related to non-controlling (7,608) (7,782)
interests in consolidated joint ventures
FFO applicable to Common 25,488 22,076
Stock and Common Units
Recoveries of - (250)
credit losses
Amortization of 1,619 1,399
debt issuance costs
Amortization of 164 142
franchise fees
Amortization of 911 903
intangible assets, net
Equity-based 1,848 1,468
compensation
Debt transaction 564 87
costs
Non-cash interest (133) (130)
income, net
(1)
Non-cash lease 73 133
expense, net
Casualty (gains) (274) 536
losses, net
Deferred income tax (3) 63
(benefit) expense
Other non-cash 312 711
items, net
Adjustments related to non-controlling (573) (878)
interests in consolidated joint ventures
AFFO applicable to Common $ 29,996 $ 26,260
Stock and Common Units
FFO per share of Common $ 0.21 $ 0.18
Stock and Common Units
AFFO per share of Common $ 0.24 $ 0.22
Stock and Common Units
Weighted-average diluted shares
of Common Stock and Common Units:
FFO and AFFO 122,599 122,010
(2)
(1) Non-cash interest income relates to the amortization of the discount on a
note receivable. The discount on the note receivable was recorded at inception
of the related loan based on the estimated value of the embedded purchase
option in the note receivable.
(2) The Company includes the outstanding OP units issued by Summit Hotel OP,
LP, the Company's operating partnership, held by limited partners other than
the Company because the OP units are redeemable for cash or, at the Company's
option, shares of the Company's common stock on a one-for-one basis.
9 | P a g e
-------------------------------------------------------------------------------
Summit Hotel Properties, Inc.
Reconciliation of Weighted Average Diluted Common Shares
(Unaudited)
(In thousands)
For the Three Months Ended
March 31,
2024 2023
Weighted-average shares of 105,720 105,312
Common Stock outstanding
Dilutive effect of unvested 223 138
restricted stock awards
Dilutive effect of shares of Common Stock 25,278 24,324
issuable upon conversion of convertible debt
Adjusted weighted diluted 131,221 129,774
shares of Common Stock
Non-GAAP adjustment for dilutive 15,951 15,977
effects of Common Units
Non-GAAP adjustment for dilutive 705 583
effects of restricted stock awards
Non-GAAP adjustment for dilutive effect of shares of (25,278) (24,324)
Common Stock issuable upon conversion of convertible debt
Non-GAAP weighted diluted share 122,599 122,010
of Common Stock and Common Units
10 | P a g e
-------------------------------------------------------------------------------
Summit Hotel Properties, Inc.
Reconciliation of Net Income (Loss) to Non-GAAP Measures - EBITDA
re
(Unaudited)
(In thousands)
For the Three Months Ended
March 31,
2024 2023
Net income $ 2,833 $ (1,970)
(loss)
Depreciation and 36,799 36,908
amortization
Interest 21,582 20,909
expense
Interest income (157) (83)
on cash deposits
Income tax expense 217 (472)
(benefit)
EBITDA 61,274 55,292
(Gain) loss on disposal of assets (75) 48
and other dispositions, net
EBITDA 61,199 55,340
re
Recoveries of - (250)
credit losses
Amortization of key (121) (136)
money liabilities
Equity-based 1,848 1,468
compensation
Debt transaction 564 87
costs
Non-cash interest (133) (130)
income, net
(1)
Non-cash lease 73 133
expense, net
Casualty (gains) (274) 536
losses, net
(Income) loss related to non-controlling (638) 680
interests in consolidated joint ventures
Other non-cash 312 711
items, net
Adjustments related to non-controlling (14,029) (14,012)
interests in consolidated joint ventures
Adjusted $ 48,801 $ 44,427
EBITDA
re
(1) Non-cash interest income relates to the amortization of the discount on a
note receivable. The discount on the note receivable was recorded at inception
of the related loan based on the estimated value of the embedded purchase
option in the note receivable.
11 | P a g e
-------------------------------------------------------------------------------
Summit Hotel Properties, Inc.
Pro Forma Hotel Operating Data
(Unaudited)
(Dollars in thousands)
For the Three Months Ended
March 31,
Pro Forma 2024 2023
Operating Data
Pro forma $ 167,073 $ 162,771
room revenue
Pro forma other hotel $ 20,692 $ 19,171
operations revenue
Pro forma total 187,765 181,942
revenues
Pro forma total hotel $ 119,203 $ 116,986
operating expenses
Pro forma 68,562 64,956
hotel EBITDA
Pro forma hotel 36.5 % 35.7 %
EBITDA Margin
Reconciliations of Non-GAAP financial measures
to comparable GAAP financial measures
Revenue:
Total $ 188,142 $ 182,383
revenues
Total revenues - 3,438
- acquisitions
(1)
Total revenues (377) (3,879)
- dispositions
(2)
Pro forma total 187,765 181,942
revenues
Hotel Operating
Expenses:
Hotel operating $ 119,618 $ 119,518
expenses
Hotel operating - 1,489
expenses - acquisitions
(1)
Hotel operating (415) (4,021)
expenses - dispositions
(2)
Pro forma hotel 119,203 116,986
operating expense
Hotel EBITDA:
Operating 23,489 18,202
income
Gain on disposal (75) -
of assets, net
Recoveries of - (250)
credit losses
Corporate general 8,311 8,005
and administrative
Depreciation and 36,799 36,908
amortization
Hotel EBITDA 68,524 62,865
Hotel EBITDA - (1,838) -
acquisitions
(1)
Hotel EBITDA - 38 142
dispositions
(2)
Same Store $ 66,724 $ 63,007
hotel EBITDA
Hotel EBITDA - 1,838 1,949
acquisitions
(3)
Pro forma $ 68,562 $ 64,956
hotel EBITDA
(1) For any hotels acquired by the Company after January 1, 2023 (the
"Acquired Hotels"), the Company has excluded the financial results of each of
the Acquired Hotels for the period the Acquired Hotels were purchased by the
Company to March 31, 2024 (the "Acquisition Period") in determining same-store
hotel EBITDA.
(2) For hotels sold by the Company between January 1, 2023, and March 31, 2024
(the "Disposed Hotels"), the Company has excluded the financial results of
each of the Disposed Hotels for the period beginning on January 1, 2023, and
ending on the date the Disposed Hotels were sold by the Company (the
"Disposition Period") in determining same-store hotel EBITDA.
(3) Unaudited pro forma information includes operating results for 99 hotels
owned as of March 31, 2024, as if all such hotels had been owned by the
Company since January 1, 2023. For hotels acquired by the Company after
January 1, 2023 (the "Acquired Hotels"), the Company has included in the pro
forma information the financial results of each of the Acquired Hotels for the
period from January 1, 2023, to March 31, 2024. The financial results for the
Acquired Hotels include information provided by the third-party owner of such
Acquired Hotel prior to purchase by the Company and have not been audited or
reviewed by our auditors or adjusted by us. The pro forma information is
included to enable comparison of results for the current reporting period to
results for the comparable period of the prior year and are not indicative of
future results.
12 | P a g e
-------------------------------------------------------------------------------
Summit Hotel Properties, Inc.
Pro Forma Hotel Operating Data
(Unaudited)
(In thousands, except operating statistics)
Trailing
Twelve
2023 2024 Months Ended
Pro Forma Q2 Q3 Q4 Q1 March 31,
Operating Data 2024
(1)
Pro forma $ 172,120 $ 160,094 $ 155,615 $ 167,073 $ 654,902
room revenue
Pro forma other hotel 20,216 20,051 20,300 20,692 81,259
operations revenue
Pro forma total 192,336 180,145 175,915 187,765 736,161
revenues
Pro forma total hotel 121,556 118,121 113,714 119,203 472,594
operating expenses
Pro forma 70,780 62,024 62,201 68,562 263,567
hotel EBITDA
Pro forma hotel 36.8 % 34.4 % 35.4 % 36.5 % 35.8 %
EBITDA Margin
Pro Forma
Statistics
(1)
Rooms 1,016,494 999,226 956,235 965,659 3,937,614
sold
Rooms 1,345,344 1,360,189 1,360,220 1,345,435 5,411,188
available
Occupancy 75.6 % 73.5 % 70.3 % 71.8 % 72.8 %
ADR $ 169.33 $ 160.22 $ 162.74 $ 173.01 $ 166.32
RevPAR $ 127.94 $ 117.70 $ 114.40 $ 124.18 $ 121.03
Actual
Statistics
Rooms 1,039,045 1,014,851 970,959 969,479 3,994,334
sold
Rooms 1,376,796 1,383,189 1,381,867 1,351,150 5,493,002
available
Occupancy 75.5 % 73.4 % 70.3 % 71.8 % 72.7 %
ADR $ 167.64 $ 159.35 $ 161.78 $ 172.70 $ 165.34
RevPAR $ 126.51 $ 116.91 $ 113.67 $ 123.92 $ 120.23
Reconciliations of Non-GAAP financial measures
to comparable GAAP financial measures
Revenue:
Total $ 194,493 $ 181,816 $ 177,435 $ 188,142 $ 741,886
revenues
Total revenues 1,278 - - - 1,278
- acquisitions
(1)
Total revenues (3,435) (1,671) (1,520) (377) (7,003)
- dispositions
(2)
Pro forma total 192,336 180,145 175,915 187,765 736,161
revenues
Hotel Operating
Expenses:
Hotel operating 123,864 119,566 115,157 119,618 478,205
expenses
Hotel operating 789 - - - 789
expenses - acquisitions
(1)
Hotel operating (3,097) (1,445) (1,443) (415) (6,400)
expenses - dispositions
(2)
Pro forma hotel 121,556 118,121 113,714 119,203 472,594
operating expenses
Hotel
EBITDA:
Operating 23,681 16,476 428 23,489 64,074
income
Loss (gain) on disposal 320 16 1 (75) 262
of assets, net
Loss on impairment and - - 16,661 - 16,661
write-off of assets
Recoveries of - (250) (730) - (980)
credit losses
Hotel acquisition and 18 - (11) - 7
transition costs
Corporate general 9,100 8,126 7,305 8,311 32,842
and administrative
Depreciation and 37,510 37,882 38,624 36,799 150,815
amortization
Hotel 70,629 62,250 62,278 68,524 263,681
EBITDA
Hotel EBITDA - (69) (505) (876) (1,838) (3,288)
acquisitions
(1)
Hotel EBITDA - (338) (226) (77) 38 (603)
dispositions
(2)
Same store 70,222 61,519 61,325 66,724 259,790
hotel EBITDA
Hotel EBITDA - 558 505 876 1,838 3,777
acquisitions
(3)
Pro forma $ 70,780 $ 62,024 $ 62,201 $ 68,562 $ 263,567
hotel EBITDA
(1) For any hotels acquired by the Company after October 1, 2023 (the
"Acquired Hotels"), the Company has excluded the financial results of each of
the Acquired Hotels for the period the Acquired Hotels were purchased by the
Company to March 31, 2024 (the "Acquisition Period") in determining same-store
hotel EBITDA.
(2) For hotels sold by the Company between October 1, 2023, and March 31, 2024
(the "Disposed Hotels"), the Company has excluded the financial results of
each of the Disposed Hotels for the period beginning on April 1, 2023 and
ending on the date the Disposed Hotels were sold by the Company (the
"Disposition Period") in determining same-store hotel EBITDA.
(3) Unaudited pro forma information includes operating results for 99 hotels
owned as of March 31, 2024, as if all such hotels had been owned by the
Company since October 1, 2023. For hotels acquired by the Company after July
1, 2023 (the "Acquired Hotels"), the Company has included in the pro forma
information the financial results of each of the Acquired Hotels for the
period from July 1, 2023, to March 31, 2024. The financial results for the
Acquired Hotels include information provided by the third-party owner of such
Acquired Hotel prior to purchase by the Company and have not been audited or
reviewed by our auditors or adjusted by us. The pro forma information is
included to enable comparison of results for the current reporting period to
results for the comparable period of the prior year and are not indicative of
future results.
13 | P a g e
-------------------------------------------------------------------------------
Summit Hotel Properties, Inc.
Pro Forma and Same Store Data
(Unaudited)
For the Three Months Ended
March 31,
2024 2023
Pro Forma
(1)
Rooms sold 965,659 927,262
Rooms available 1,345,435 1,330,560
Occupancy 71.8 % 69.7 %
ADR $ 173.01 $ 175.54
RevPAR $ 124.18 $ 122.33
Occupancy change 3.0 %
ADR change (1.4) %
RevPAR change 1.5 %
For the Three Months Ended
March 31,
2024 2023
Same-Store
(2)
Rooms sold 953,275 914,654
Rooms available 1,330,238 1,315,530
Occupancy 71.7 % 69.5 %
ADR $ 171.91 $ 174.25
RevPAR $ 123.19 $ 121.15
Occupancy change 3.1 %
ADR change (1.3) %
RevPAR change 1.7 %
(1) Unaudited pro forma information includes operating results for 99 hotels
owned as of March 31, 2024, as if each hotel had been owned by the Company
since January 1, 2023. As a result, these pro forma operating and financial
measures include operating results for certain hotels for periods prior to the
Company's ownership.
(2) Same-store information includes operating results for 97 hotels owned by
the Company as of January 1, 2023, and at all times during the three months
ended March 31, 2024, and 2023.
14 | P a g e
-------------------------------------------------------------------------------
Summit Hotel Properties, Inc.
Reconciliation of Net Income to Non-GAAP Measures - EBITDA for Financial Outlook
(in thousands)
(Unaudited)
Low High
Net income $ 29,100 $ 43,900
Depreciation and amortization 149,300 149,300
Interest expense 83,200 83,200
Interest income (200) (200)
Income tax expense 2,900 2,900
EBITDA $ 264,300 $ 279,100
Gain on disposal of assets and other dispositions, net (28,300) (28,300)
EBITDAre $ 236,000 $ 250,800
Equity-based compensation 8,300 8,300
Debt transaction costs 900 900
Other non-cash items, net (10,300) (10,300)
Loss related to non-controlling interests in consolidated joint ventures 3,400 600
Adjustments related to non-controlling interests in consolidated joint ventures (50,300) (50,300)
Adjusted EBITDAre $ 188,000 $ 200,000
15 | P a g e
-------------------------------------------------------------------------------
Summit Hotel Properties, Inc.
Reconciliation of Net Income to Non-GAAP Measures - Funds From Operations for Financial Outlook
(in thousands except per share and unit)
(Unaudited)
FYE 2024 Outlook
Low High
Net income $ 29,100 $ 43,900
Preferred dividends (15,900) (15,900)
Distributions to and accretion of redeemable non-controlling interests (2,600) (2,600)
Loss related to non-controlling interests in consolidated joint ventures 3,400 600
Net income applicable to Common Stock and Common Units $ 14,000 $ 26,000
Real estate-related depreciation 147,600 147,600
Gain on disposal of assets and other dispositions, net (28,300) (28,300)
Adjustments related to non-controlling interests in consolidated joint ventures (32,300) (32,300)
FFO applicable to Common Stock and Common Units $ 101,000 $ 113,000
Amortization of debt issuance costs 6,000 6,000
Amortization of franchise fees 600 600
Equity-based compensation 8,300 8,300
Debt transaction costs 900 900
Other non-cash items, net (9,300) (9,300)
Adjustments related to non-controlling interests in consolidated joint ventures 3,500 3,500
AFFO applicable to Common Stock and Common Units $ 111,000 $ 123,000
Weighted average diluted shares of Common Stock and Common Units for FFO and AFFO 122,900 122,900
FFO per Common Stock and Common Units $ 0.82 $ 0.92
AFFO per Common Stock and Common Units $ 0.90 $ 1.00
16 | P a g e
-------------------------------------------------------------------------------
Non-GAAP Financial Measures
We disclose certain "non-GAAP financial measures," which are measures of our
historical financial performance. Non-GAAP financial measures are financial
measures not prescribed by Generally Accepted Accounting Principles ("GAAP").
These measures are as follows: (i) Funds From Operations ("FFO") and Adjusted
Funds from Operations ("AFFO"), (ii) Earnings before Interest, Taxes,
Depreciation and Amortization ("EBITDA"), Earnings before Interest, Taxes,
Depreciation and Amortization for Real Estate ("EBITDA
re
"), Adjusted EBITDA
re
, and hotel EBITDA (as described below). We caution investors that amounts
presented in accordance with our definitions of non-GAAP financial measures
may not be comparable to similar measures disclosed by other companies, since
not all companies calculate these non-GAAP financial measures in the same
manner. Our non-GAAP financial measures should be considered along with, but
not as alternatives to, net income (loss) as a measure of our operating
performance. Our non-GAAP financial measures may include funds that may not be
available for our discretionary use due to functional requirements to conserve
funds for capital expenditures, property acquisitions, debt service
obligations and other commitments and uncertainties. Although we believe that
our non-GAAP financial measures can enhance the understanding of our financial
condition and results of operations, these non-GAAP financial measures are not
necessarily better indicators of any trend as compared to a comparable measure
prescribed by GAAP such as net income (loss).
Funds From Operations ("FFO") and Adjusted FFO ("AFFO")
As defined by Nareit, FFO represents net income or loss (computed in
accordance with GAAP), excluding preferred dividends, gains (or losses) from
sales of real property, impairment losses on real estate assets, items
classified by GAAP as extraordinary, the cumulative effect of changes in
accounting principles, plus depreciation and amortization related to real
estate assets, and adjustments for unconsolidated partnerships, and joint
ventures. AFFO represents FFO excluding amortization of deferred financing
costs, franchise fees, equity-based compensation expense, debt transaction
costs, premiums on redemption of preferred shares, losses from net casualties,
non-cash lease expense, non-cash interest income and non-cash income tax
related adjustments to our deferred tax assets. Unless otherwise indicated, we
present FFO and AFFO applicable to our common shares and common units. We
present FFO and AFFO because we consider FFO and AFFO an important
supplemental measure of our operational performance and believe it is
frequently used by securities analysts, investors, and other interested
parties in the evaluation of REITs, many of which present FFO and AFFO when
reporting their results. FFO and AFFO are intended to exclude GAAP historical
cost depreciation and amortization, which assumes that the value of real
estate assets diminishes ratably over time. Historically, however, real estate
values have risen or fallen with market conditions. Because FFO and AFFO
exclude depreciation and amortization related to real estate assets, gains and
losses from real property dispositions and impairment losses on real estate
assets, FFO and AFFO provide performance measures that, when compared year
over year, reflect the effect to operations from trends in occupancy,
guestroom rates, operating costs, development activities and interest costs,
providing perspective not immediately apparent from net income. Our
computation of FFO differs slightly from the computation of Nareit-defined FFO
related to the reporting of corporate depreciation and amortization expense.
Our computation of FFO may also differ from the methodology for calculating
FFO used by other equity REITs and, accordingly, may not be comparable to such
other REITs. FFO and AFFO should not be considered as an alternative to net
income (loss) (computed in accordance with GAAP) as an indicator of our
liquidity, nor is it indicative of funds available to fund our cash needs,
including our ability to pay dividends or make distributions. Where indicated
in this release, FFO is based on our computation of FFO and not the
computation of Nareit-defined FFO unless otherwise noted.
17 | P a g e
-------------------------------------------------------------------------------
EBITDA, EBITDAre, Adjusted EBITDAre, and Hotel EBITDA
In September 2017, Nareit proposed a standardized performance measure, called
EBITDAre, which is based on EBITDA and is expected to provide additional
relevant information about REITs as real estate companies in support of
growing interest among generalist investors. The conclusion was reached that,
while dedicated REIT investors have long been accustomed to utilizing the
industry's supplemental measures such as FFO and net operating income ("NOI")
to evaluate the investment quality of REITs as real estate companies, it would
be helpful to generalist investors for REITs as real estate companies to also
present EBITDAre as a more widely known and understood supplemental measure of
performance. EBITDAre is intended to be a supplemental non-GAAP performance
measure that is independent of a company's capital structure and will provide
a uniform basis for one measurement of the enterprise value of a company
compared to other REITs.
EBITDAre, as defined by Nareit, is calculated as EBITDA, excluding: (i) loss
and gains on disposition of property and (ii) asset impairments, if any. We
believe EBITDAre is useful to an investor in evaluating our operating
performance because it provides investors with an indication of our ability to
incur and service debt, to satisfy general operating expenses, to make capital
expenditures and to fund other cash needs or reinvest cash into our business.
We also believe it helps investors meaningfully evaluate and compare the
results of our operations from period to period by removing the effect of our
asset base (primarily depreciation and amortization) from our operating
results.
We make additional adjustments to EBITDAre when evaluating our performance
because we believe that the exclusion of certain additional non-recurring or
unusual items described below provides useful supplemental information to
investors regarding our ongoing operating performance. We believe that the
presentation of Adjusted EBITDAre, when combined with the primary GAAP
presentation of net income, is useful to an investor in evaluating our
operating performance because it provides investors with an indication of our
ability to incur and service debt, to satisfy general operating expenses, to
make capital expenditures and to fund other cash needs or reinvest cash into
our business. We also believe it helps investors meaningfully evaluate and
compare the results of our operations from period to period by removing the
effect of our asset base (primarily depreciation and amortization) from our
operating results.
With respect to hotel EBITDA, we believe that excluding the effect of
corporate-level expenses and non-cash items provides a more complete
understanding of the operating results over which individual hotels and
operators have direct control. We believe the property-level results provide
investors with supplemental information on the ongoing operational performance
of our hotels and effectiveness of the third-party management companies
operating our business on a property-level basis.
We caution investors that amounts presented in accordance with our definitions
of EBITDA, EBITDAre, adjusted EBITDAre, and hotel EBITDA may not be comparable
to similar measures disclosed by other companies, since not all companies
calculate these non-GAAP measures in the same manner. EBITDA, EBITDAre,
adjusted EBITDAre, and hotel EBITDA should not be considered as an alternative
measure of our net income (loss) or operating performance. EBITDA, EBITDAre,
adjusted EBITDAre, and hotel EBITDA may include funds that may not be
available for our discretionary use due to functional requirements to conserve
funds for capital expenditures and property acquisitions and other commitments
and uncertainties. Although we believe that EBITDA, EBITDAre, adjusted
EBITDAre, and hotel EBITDA can enhance your understanding of our financial
condition and results of operations, these non-GAAP financial measures are not
necessarily a better indicator of any trend as compared to a comparable GAAP
measure such as net income (loss). Above, we include a quantitative
reconciliation of EBITDA, EBITDAre, adjusted EBITDAre and hotel EBITDA to the
most directly comparable GAAP financial performance measure, which is net
income (loss) and operating income (loss).
18 | P a g e
1 Earnings Release Supplement First Quarter 2024 (UNAUDITED) May 1, 2024
-------------------------------------------------------------------------------
2 Table of Contents Section I Section II Section III Section IV Section VI
Forward-Looking Statements and Non-GAAP Financial Measure Disclosures
Corporate Financial Schedules Operating & Property-Level Schedules
Capitalization and Debt Schedules Asset Listing
-------------------------------------------------------------------------------
3 Forward-Looking Statements We make forward-looking statements in this
presentation that are subject to risks and uncertainties. These forward-looking
statements include information about possible or assumed future results of our
business, financial condition, liquidity, results of operations, plans, and
objectives. When we use the words "believe," "expect," "anticipate,"
"estimate," "plan," "continue," "intend," "should," "may," or similar
expressions, we intend to identify forward-looking statements. Statements
regarding the following subjects, among others, may be forward-looking by
their nature: . our ability to increase our dividend per share of common
stock; . the state of the U.S. economy generally or in specific geographic
regions in which we operate, and the effect of general economic conditions on
the lodging industry and our business in particular; . market trends in our
industry, interest rates, real estate values and the capital markets; . our
business and investment strategy and, particularly, our ability to identify
and complete hotel acquisitions and dispositions; . our projected operating
results; . actions and initiatives of the U.S. government and changes to U.S.
government policies and the execution and impact of such actions, initiatives
and policies; . our ability to manage our relationships with our management
companies and franchisors; . our ability to maintain our existing and future
financing arrangements; . changes in the value of our properties; . the impact
of and changes in governmental regulations, tax law and rates, accounting
guidance and similar matters; . our ability to satisfy the requirements for
qualification as a REIT under the U.S. Tax Code; . our ability to repay or
refinance our indebtedness as it matures or becomes callable by lenders; . the
availability of qualified personnel; . our ability to make distributions to
our stockholders in the future; . the general volatility of the market price
of our securities; and . the degree and nature of our competition.
Forward-looking statements are based on our beliefs, assumptions and
expectations of our future performance, taking into account information
currently available to us. You should not place undue reliance on these
forward-looking statements. These beliefs, assumptions and expectations can
change as a result of many possible events or factors, not all of which are
known to us. These factors are discussed under "Item 1A. Risk Factors" in our
Annual Report on Form 10-K for the year ended December 31, 2023, and in other
documents we have filed with the Securities and Exchange Commission. If a
change occurs, our business, financial condition, liquidity and results of
operations may vary materially from those expressed in our forward-looking
statements. Any forward-looking statement is effective only as of the date on
which it is made. New risks and uncertainties arise over time, and it is not
possible for us to predict those events or how they may affect us. Except as
required by law we are not obligated to, and do not intend to, publicly update
or revise any forward-looking statements, whether as a result of new
information, future events or otherwise. Additionally, this presentation
contains certain unaudited historical and pro forma information and metrics
which are based or calculated from historical data that is maintained or
produced by Summit Hotel Properties, Inc. or third parties. This presentation
contain statistics and other data that may have been obtained from, or
compiled from, information made available by third-parties.
-------------------------------------------------------------------------------
4 Non-GAAP Financial Measures We disclose certain "non-GAAP financial
measures," which are measures of our historical financial performance.
Non-GAAP financial measures are financial measures not prescribed by Generally
Accepted Accounting Principles ("GAAP"). These measures are as follows: (i)
Funds From Operations ("FFO") and Adjusted Funds from Operations ("AFFO"),
(ii) Earnings before Interest, Taxes, Depreciation and Amortization
("EBITDA"), Earnings before Interest, Taxes, Depreciation and Amortization for
Real Estate ("EBITDAre") and Adjusted EBITDAre (as described below). We
caution investors that amounts presented in accordance with our definitions of
non-GAAP financial measures may not be comparable to similar measures
disclosed by other companies, since not all companies calculate these non-GAAP
financial measures in the same manner. Our non-GAAP financial measures should
be considered along with, but not as alternatives to, net income (loss) as a
measure of our operating performance. Our non-GAAP financial measures may
include funds that may not be available for our discretionary use due to
functional requirements to conserve funds for capital expenditures, property
acquisitions, debt service obligations and other commitments and uncertainties.
Although we believe that our non- GAAP financial measures can enhance the
understanding of our financial condition and results of operations, these
non-GAAP financial measures are not necessarily better indicators of any trend
as compared to a comparable measure prescribed by GAAP such as net income
(loss). FFO and AFFO As defined by Nareit, FFO represents net income or loss
(computed in accordance with GAAP), excluding preferred dividends, gains (or
losses) from sales of real property, impairment losses on real estate assets,
items classified by GAAP as extraordinary, the cumulative effect of changes in
accounting principles, plus depreciation and amortization related to real
estate assets, and adjustments for unconsolidated partnerships, and joint
ventures. AFFO represents FFO excluding amortization of deferred financing
costs, franchise fees, equity-based compensation expense, transaction costs,
debt transaction costs, premiums on redemption of preferred shares, losses
from net casualties, non-cash interest income and non-cash income tax related
adjustments to our deferred tax asset. Unless otherwise indicated, we present
FFO and AFFO applicable to our common shares and common units. We present FFO
and AFFO because we consider FFO and AFFO an important supplemental measure of
our operational performance and believe it is frequently used by securities
analysts, investors and other interested parties in the evaluation of REITs,
many of which present FFO and AFFO when reporting their results. FFO and AFFO
are intended to exclude GAAP historical cost depreciation and amortization,
which assumes that the value of real estate assets diminishes ratably over
time. Historically, however, real estate values have risen or fallen with
market conditions. Because FFO and AFFO exclude depreciation and amortization
related to real estate assets, gains and losses from real property
dispositions and impairment losses on real estate assets, and certain
transaction costs related to lodging property acquisition activities and debt,
FFO and AFFO provide performance measures that, when compared year over year,
reflect the effect to operations from trends in occupancy, guestroom rates,
operating costs, development activities and interest costs, providing
perspective not immediately apparent from net income. Our computation of FFO
differs slightly from the computation of Nareit-defined FFO related to the
reporting of depreciation and amortization expense on assets at our corporate
offices, which is de minimus. Our computation of FFO may also differ from the
methodology for calculating FFO used by other equity REITs and, accordingly,
may not be comparable to such other REITs. FFO and AFFO should not be
considered as an alternative to net income (loss) (computed in accordance with
GAAP) as an indicator of our liquidity, nor is it indicative of funds
available to fund our cash needs, including our ability to pay dividends or
make distributions. Where indicated in this Earnings Release Supplement, FFO
is based on our computation of FFO and not the computation of Nareit- defined
FFO unless otherwise noted.
-------------------------------------------------------------------------------
5 Non-GAAP Financial Measures (cont.) EBITDAre and Adjusted EBITDAre In
September 2017, Nareit proposed a standardized performance measure, called
EBITDAre, which is based on EBITDA and is expected to provide additional
relevant information about REITs as real estate companies in support of
growing interest among generalist investors. The conclusion was reached that,
while dedicated REIT investors have long been accustomed to utilizing the
industry's supplemental measures such as FFO and net operating income ("NOI")
to evaluate the investment quality of REITs as real estate companies, it would
be helpful to generalist investors for REITs as real estate companies to also
present EBITDAre as a more widely known and understood supplemental measure of
performance. EBITDAre is intended to be a supplemental non-GAAP performance
measure that is independent of a company's capital structure and will provide
a uniform basis for one measurement of the enterprise value of a company
compared to other REITs. EBITDAre, as defined by Nareit, is calculated as
EBITDA, excluding: (i) loss and gains on disposition of property and (ii)
asset impairments, if any. We believe EBITDAre is useful to an investor in
evaluating our operating performance because it provides investors with an
indication of our ability to incur and service debt, to satisfy general
operating expenses, to make capital expenditures and to fund other cash needs
or reinvest cash into our business. We also believe it helps investors
meaningfully evaluate and compare the results of our operations from period to
period by removing the effect of our asset base (primarily depreciation and
amortization) from our operating results. We make additional adjustments to
EBITDAre when evaluating our performance because we believe that the exclusion
of certain additional non-recurring or unusual items described below provides
useful supplemental information to investors regarding our ongoing operating
performance. We believe that the presentation of Adjusted EBITDAre, when
combined with the primary GAAP presentation of net income, is useful to an
investor in evaluating our operating performance because it provides investors
with an indication of our ability to incur and service debt, to meet general
operating expenses, to make capital expenditures and to fund other cash needs,
or reinvest cash into our business. We also believe it helps investors
meaningfully evaluate and compare the results of our operations from period to
period by removing the effect of our asset base (primarily depreciation and
amortization) from our operating results.
-------------------------------------------------------------------------------
6 Table of Contents Section I Section II Section III Section IV Section VI
Forward-Looking Statements and Non-GAAP Financial Measure Disclosures
Corporate Financial Schedules Operating & Property-Level Schedules
Capitalization and Debt Schedules Asset Listing
-------------------------------------------------------------------------------
7 Summary Financial Results (Unaudited) For the Three Months Ended March 31,
(Amounts in thousands, except per share metrics and statistics) 2024 2023 Net
loss attributable to common stockholders $ (2,116) $ (5,228) Net loss per
diluted share $ (0.02) $ (0.05) Total revenues $ 188,142 $ 182,383 EBITDAre
(1) $ 61,199 $ 55,340 Adjusted EBITDAre (1) $ 48,801 $ 44,427 FFO (1) $ 25,488
$ 22,076 Adjusted FFO (1) $ 29,996 $ 26,260 FFO per diluted share and unit (1)
$ 0.21 $ 0.18 Adjusted FFO per diluted share and unit (1) $ 0.24 $ 0.22 Pro
Forma (2) RevPAR $ 124.18 $ 122.33 RevPAR Growth 1.5 % Hotel EBITDA $ 68,562 $
64,956 Hotel EBITDA Margin 36.5 % 35.7 % Hotel EBITDA Margin Growth 81 bps
Same Store (3) RevPAR $ 123.19 $ 121.15 RevPAR Growth 1.7 % Hotel EBITDA $
66,724 $ 63,007 Hotel EBITDA Margin 36.2 % 35.3 % Hotel EBITDA Margin Growth
87 bps 1. See tables later in this presentation for a discussion and
reconciliation of Net income (loss) to non-GAAP financial measures, including
earnings before interest, taxes, depreciation, and amortization ("EBITDA"),
EBITDAre, adjusted EBITDAre, funds from operations ("FFO"), FFO per diluted
share and unit, adjusted FFO ("AFFO"), and AFFO per diluted share and unit, as
well as a reconciliation of Operating income to hotel EBITDA. See "Non-GAAP
Financial Measures" at the end of this presentation. 2. Unless stated
otherwise in this presentation, all pro forma information includes operating
and financial results for 99 lodging properties owned as of March 31, 2024, as
if each hotel had been owned by the Company since January 1, 2023 and remained
open for the entirety of the measurement period. As a result, all pro forma
information includes operating and financial results for hotels acquired since
January 1, 2023, which may include periods prior to the Company's ownership.
Pro forma and non- GAAP financial measures are unaudited. 3. All same store
information includes 97 lodging properties owned as of March 31, 2024, with
operating and financial results for the three months ended March 31, 2024 and
2023.
-------------------------------------------------------------------------------
8 Summary Pro Forma Operating Results (Unaudited) 1. Unaudited pro forma
information includes operating results for 99 hotels owned as of March 31,
2024, as if all such hotels had been owned by the Company since January 1,
2023. For hotels acquired by the Company after January 1, 2023 (the "Acquired
Hotels"), the Company has included in the pro forma information the financial
results of each of the Acquired Hotels for the period from January 1, 2023, to
March 31, 2024. The financial results for the Acquired Hotels include
information provided by the third-party owner of such Acquired Hotel prior to
purchase by the Company and have not been audited or reviewed by our auditors
or adjusted by us. The pro forma information is included to enable comparison
of results for the current reporting period to results for the comparable
period of the prior year and are not indicative of future results. Trailing
Twelve (Amounts in thousands, except operating statistics) 2023 2024 Months
Ended Pro Forma Operating Data (1) Q2 Q3 Q4 Q1 March 31, 2024 Pro forma room
revenue $ 172,120 $ 160,094 $ 155,615 $ 167,073 $ 654,902 Pro forma other
hotel operations revenue 20,216 20,051 20,300 20,692 81,259 Pro forma total
revenues 192,336 180,145 175,915 187,765 736,161 Pro forma total hotel
operating expenses 121,556 118,121 113,714 119,203 472,594 Pro forma hotel
EBITDA 70,780 62,024 62,201 68,562 263,567 Pro forma hotel EBITDA Margin 36.8
% 34.4 % 35.4 % 36.5 % 35.8 % Pro Forma Statistics (1) Rooms sold 1,016,494
999,226 956,235 965,659 3,937,614 Rooms available 1,345,344 1,360,189
1,360,220 1,345,435 5,411,188 Occupancy 75.6 % 73.5 % 70.3 % 71.8 % 72.8 % ADR
$ 169.33 $ 160.22 $ 162.74 $ 173.01 $ 166.32 RevPAR $ 127.94 $ 117.70 $ 114.40
$ 124.18 $ 121.03 Actual Statistics Rooms sold 1,039,045 1,014,851 970,959
969,479 3,994,334 Rooms available 1,376,796 1,383,189 1,381,867 1,351,150
5,493,002 Occupancy 75.5 % 73.4 % 70.3 % 71.8 % 72.7 % ADR $ 167.64 $ 159.35 $
161.78 $ 172.70 $ 165.34 RevPAR $ 126.51 $ 116.91 $ 113.67 $ 123.92 $ 120.23
-------------------------------------------------------------------------------
9 Adjusted EBITDAre Reconciliation (Unaudited) (Amounts in thousands) For the
Three Months Ended March 31, 2024 2023 Net income (loss) $ 2,833 $ (1,970)
Depreciation and amortization 36,799 36,908 Interest expense 21,582 20,909
Interest income on cash deposits (157) (83) Income tax expense (benefit) 217
(472) EBITDA 61,274 55,292 (Gain) loss on disposal of assets and other
dispositions, net (75) 48 EBITDAre 61,199 55,340 Recoveries of credit losses -
(250) Amortization of key money liabilities (121) (136) Equity-based
compensation 1,848 1,468 Debt transaction costs 564 87 Non-cash interest
income, net (133) (130) Non-cash lease expense, net 73 133 Casualty (gains)
losses, net (274) 536 (Income) loss related to non-controlling interests in
consolidated joint ventures (638) 680 Other non-cash items, net 312 711
Adjustments related to non-controlling interests in consolidated joint
ventures (14,029) (14,012) Adjusted EBITDAre $ 48,801 $ 44,427
-------------------------------------------------------------------------------
10 Adjusted FFO Reconciliation (Unaudited) (Amounts in thousands, except per
share metrics) For the Three Months Ended March 31, 2024 2023 Net income
(loss) $ 2,833 $ (1,970) Preferred dividends (3,970) (3,970) Distributions to
and accretion of redeemable non-controlling interests (657) (657) (Income)
loss related to non-controlling interests in consolidated joint ventures (638)
680 Net loss applicable to Common Stock and Common Units (2,432) (5,917) Real
estate-related depreciation 35,603 35,727 (Gain) loss on disposal of assets
and other dispositions, net (75) 48 Adjustments related to non-controlling
interests in consolidated joint ventures (7,608) (7,782) FFO applicable to
Common Stock and Common Units 25,488 22,076 Recoveries of credit losses -
(250) Amortization of debt issuance costs 1,619 1,399 Amortization of
franchise fees 164 142 Amortization of intangible assets, net 911 903
Equity-based compensation 1,848 1,468 Debt transaction costs 564 87 Non-cash
interest income, net (133) (130) Non-cash lease expense, net 73 133 Casualty
(gains) losses, net (274) 536 Deferred income tax (benefit) expense (3) 63
Other non-cash items, net 312 711 Adjustments related to non-controlling
interests in consolidated joint ventures (573) (878) AFFO applicable to Common
Stock and Common Units $ 29,996 $ 26,260 FFO per share of Common Stock and
Common Units $ 0.21 $ 0.18 AFFO per share of Common Stock and Common Units $
0.24 $ 0.22 Weighted-average diluted shares of Common Stock and Common Units:
FFO and AFFO 122,599 122,010
-------------------------------------------------------------------------------
11 Reconciliation to Adjusted EBITDAre - By Ownership Interest (Unaudited) 1.
GIC Joint Venture is 51% owned by Summit while Other Joint Ventures are 90%
owned by Summit. Q1 2024 Summit GIC Other GIC JV Other JVs (Amounts in
thousands, except statistics) Wholly-Owned Joint Venture (1) Joint Ventures
(1) Combined Pro Rata Adj Pro Rata Adj Pro Rata 1Q 2024 1Q 2023 1Q 2024 1Q
2023 1Q 2024 1Q 2023 1Q 2024 1Q 2023 1Q 2024 1Q 2023 1Q 2024 1Q 2023 1Q 2024
1Q 2023 Number Rooms Sold 566,988 576,950 380,958 351,943 21,533 21,321
969,479 950,214 Number of Rooms Available 824,096 868,050 502,029 487,260
25,025 24,750 1,351,150 1,380,060 Occupancy 68.8 % 66.5 % 75.9 % 72.2 % 86.0 %
86.1 % 71.8 % 68.9 % Average Daily Rate $ 169.64 $ 168.03 $ 171.32 $ 171.89 $
277.76 $ 264.86 $ 172.70 $ 171.63 Room Revenue PAR $ 116.72 $ 111.68 $ 130.00
$ 124.15 $ 239.00 $ 228.16 $ 123.92 $ 118.18 Room Revenue 96,186 96,947 65,264
60,495 5,981 5,647 167,431 $ 163,089 Other revenue 9,867 9,603 7,843 6,976
3,001 2,715 20,711 19,294 Total Revenue $ 106,053 $ 106,550 $ 73,107 $ 67,471
$ 8,982 $ 8,362 $ 188,142 $ 182,383 Hotel EBITDA 34,295 31,866 30,662 27,581
3,567 3,418 68,524 62,865 % margin 32.3 % 29.9 % 41.9 % 40.9 % 39.7 % 40.9 %
36.4 % 34.5 % Net income (loss) 13 (1,493) 913 (1,933) 1,907 1,456 $ 2,833 $
(1,970) $ (447) $ 826 $ (191) $ (146) $ 2,195 $ (1,290) Depreciation and
amortization 19,290 19,194 16,426 16,697 1,083 1,017 36,799 36,908 (8,049)
(8,182) (108) (102) 28,642 28,624 Interest expense 8,587 8,256 11,991 11,748
1,004 905 21,582 20,909 (5,876) (5,757) (100) (91) 15,606 15,061 Interest
income (149) (76) (8) (7) - - (157) (83) 4 3 - - (153) (80) Income tax benefit
25 - 192 (472) - - 217 (472) (94) 231 - - 123 (241) EBITDA $ 27,766 $ 25,881 $
29,514 $ 26,033 $ 3,994 $ 3,378 $ 61,274 $ 55,292 $ (14,462) $ (12,879) $
(399) $ (339) $ 46,413 $ 42,074 Loss (gain) on disposal of assets and other
dispositions, net - 26 (75) 22 - - (75) 48 37 (11) - - (38) 37 EBITDAre $
27,766 $ 25,907 $ 29,439 $ 26,055 $ 3,994 $ 3,378 $ 61,199 $ 55,340 $ (14,425)
$ (12,890) $ (399) $ (339) $ 46,375 $ 42,111 Recoveries of credit losses -
(250) - - - - - (250) - - - - - (250) Amortization of key money liabilities
(52) (67) (51) (51) (18) (18) (121) (136) 25 25 2 2 (94) (109) Equity-based
compensation 1,848 1,468 - - - - 1,848 1,468 - - - - 1,848 1,468 Debt
transaction costs 550 35 14 52 - - 564 87 (7) (25) - - 557 62 Non-cash
interest income (133) (130) - - - - (133) (130) - - - - (133) (130) Non-cash
lease expense, net 103 121 (30) 12 - - 73 133 15 (6) - - 88 127 Casualty
losses (gains), net 310 305 (163) 201 (421) 30 (274) 536 80 (98) 42 (3) (152)
435 Non-cash items and other 312 711 - - - - 312 711 - 2 - - 312 713 Adjusted
EBITDAre $ 30,704 $ 28,100 $ 29,209 $ 26,269 $ 3,555 $ 3,390 $ 63,468 $ 57,759
$ (14,312) $ (12,992) $ (355) $ (340) $ 48,801 $ 44,427
-------------------------------------------------------------------------------
12 Reconciliation to Adjusted FFO - By Ownership Interest (Unaudited) 1. GIC
Joint Venture is 51% owned by Summit while Other Joint Ventures are 90% owned
by Summit. Summit GIC Other GIC JV Other JVs 1Q 2024 Wholly-Owned Joint
Venture (1) Joint Ventures (1) Combined Pro Rata Adj Pro Rata Adj Pro Rata
(Amounts in thousands, except statistics) 1Q 2024 1Q 2023 1Q 2024 1Q 2023 1Q
2024 1Q 2023 1Q 2024 1Q 2023 1Q 2024 1Q 2023 1Q 2024 1Q 2023 1Q 2024 1Q 2023
Net income (loss) 13 (1,493) 913 (1,933) 1,907 1,456 2,833 (1,970) (447) 826
(191) (146) 2,195 (1,290) Preferred dividends (3,970) (3,970) - - - - (3,970)
(3,970) - - - - (3,970) (3,970) Distributions to and accretion of redeemable
non- controlling interests (657) (657) - - - - (657) (657) - - - - (657) (657)
Net loss applicable to common shares and common units $ (4,614) $ (6,120) $
913 $ (1,933) $ 1,907 $ 1,456 $ (1,794) $ (6,597) $ (447) $ 826 $ (191) $
(146) $ (2,432) $ (5,917) Real estate-related depreciation 19,153 19,072
15,385 15,656 1,065 999 35,603 35,727 (7,538) (7,671) (107) (100) 27,958
27,956 Disposition of assets, net - 26 (75) 22 - - (75) 48 37 (11) - - (38) 37
FFO applicable to common shares and common units $ 14,539 $ 12,978 $ 16,223 $
13,745 $ 2,972 $ 2,455 $ 33,734 $ 29,178 $ (7,948) $ (6,856) $ (298) $ (246) $
25,488 $ 22,076 Recoveries of credit losses - (250) - - - - - (250) - - - - -
(250) Equity Based Compensation 1,848 1,468 - - - - 1,848 1,468 - - - - 1,848
1,468 Amortization of Deferred Financing Costs 1,159 919 445 465 15 15 1,619
1,399 (218) (228) (2) (2) 1,399 1,169 Amortization of Franchise Fees 85 63 79
79 - - 164 142 (39) (39) - - 125 103 Amortization of intangible assets - (8)
911 911 - - 911 903 (446) (446) - - 465 457 Debt Transaction Costs 550 35 14
52 - - 564 87 (7) (25) - - 557 62 Deferred income tax (benefit) expense - -
(3) 63 - - (3) 63 1 (31) - - (2) 32 Non-Cash Interest Income (133) (130) - - -
- (133) (130) - - - - (133) (130) Non-Cash Lease expense, net 103 121 (30) 12
- - 73 133 15 (6) - - 88 127 Casualty losses (gains), net 310 305 (163) 201
(421) 30 (274) 536 80 (98) 42 (3) (152) 435 Non-Cash Items and Other 312 711 -
- - - 312 711 1 - - - 313 711 AFFO applicable to common shares and common
units $ 18,773 $ 16,212 $ 17,476 1 7 4 $ 15,528 $ 2,566 $ 2,500 $ 38,815 $
34,240 $ (8,561) $ (7,729) $ (258) $ (251) $ 29,996 $ 26,260 FFO per share of
Common Stock and Common Units $ 0.21 $ 0.18 AFFO per share of Common Stock and
Common Units $ 0.24 $ 0.22 Weighted-average diluted shares of Common Stock and
Common Units 122,599 122,010
-------------------------------------------------------------------------------
13 Full Year 2024 Outlook (Unaudited) 1. All pro forma information includes
operating and financial results for 96 hotels owned as of March 31, 2024, as
if each hotel had been owned by the Company since January 1, 2023 and will
continue to be owned through the entire year ending December 31, 2024. As a
result, the pro forma information includes operating and financial results for
hotels acquired since January 1, 2023, which may include periods prior to the
Company's ownership. Pro forma and non-GAAP measures are unaudited. FYE 2024
Outlook (Amounts in thousands, except per share metrics and statistics) Low
High Variance to Prior Midpoint % Change to Prior Midpoint Pro Forma RevPAR
Growth (1) 2.00 % 4.00 % - % - % Adjusted EBITDAre $ 188,000 $ 200,000 $ - - %
Adjusted FFO $ 111,000 $ 123,000 $ - - % Adjusted FFO per Diluted Unit $ 0.90
$ 1.00 $ - - % Capital Expenditures, Pro Rata $ 65,000 $ 85,000 $ - - %
-------------------------------------------------------------------------------
14 Table of Contents Section I Section II Section III Section IV Section VI
Forward-Looking Statements and Non-GAAP Financial Measure Disclosures
Corporate Financial Schedules Operating & Property-Level Schedules
Capitalization and Debt Schedules Asset Listing
-------------------------------------------------------------------------------
15 Pro Forma Operating Results - By Ownership Interest (Unaudited) 1.
Unaudited pro forma information includes operating results for 99 hotels owned
as of March 31, 2024, as if all such hotels had been owned by the Company
since January 1, 2023. For any hotels acquired by the Company after January 1,
2023 (the "Acquired Hotels"), the Company has included in the pro forma
information the financial results of each of the Acquired Hotels for the
period from January 1, 2023, to the date the Acquired Hotels were purchased by
the Company (the "Pre-acquisition Period"). The financial results for the
Pre-acquisition Period were provided by the third-party owner of such Acquired
Hotel prior to purchase by the Company and have not been audited or reviewed
by our auditors or adjusted by us. The pro forma information is included to
enable comparison of results for the current reporting period to results for
the comparable period of the prior year and are not indicative of future
results. Q1 2024 INN Wholly-Owned (56 Hotels) GIC Joint Venture (40 Hotels)
Other Joint Ventures (3 Hotels) Pro Forma (99 Hotels) (Amounts in thousands,
except statistics) 2024 2023 2024 2023 2024 2023 2024 2023 Pro Forma Operating
Data (1) Occupancy 68.8 % 67.3 % 76.0 % 72.8 % 86.0 % 86.1 % 71.8 % 69.7 % ADR
$ 169.63 $ 171.28 $ 172.12 $ 176.74 $ 277.74 $ 264.85 $ 173.01 $ 175.54 RevPAR
$ 116.71 $ 115.30 $ 130.79 $ 128.68 $ 238.99 $ 228.15 $ 124.18 $ 122.33
Occupancy change 2.2 % 4.4 % (0.1) % 3.0 % ADR change (1.0) % (2.6) % 4.9 %
(1.4) % RevPAR change 1.2 % 1.6 % 4.7 % 1.5 % Pro forma total revenues $
106,048 $ 103,424 $ 72,735 $ 70,156 $ 8,982 $ 8,362 $ 187,765 $ 181,942 Pro
forma hotel EBITDA $ 34,301 $ 32,130 $ 30,694 $ 29,408 $ 3,567 $ 3,418 $
68,562 $ 64,956 Pro forma hotel EBITDA Margin 32.3 % 31.1 % 42.2 % 41.9 % 39.7
% 40.9 % 36.5 % 35.7 %
-------------------------------------------------------------------------------
16 Summary Pro Forma Operating Results (Unaudited) 1. Unaudited pro forma
information includes operating results for 99 hotels owned as of March 31,
2024, as if all such hotels had been owned by the Company since January 1,
2023. For any hotels acquired by the Company after January 1, 2023 (the
"Acquired Hotels"), the Company has included in the pro forma information the
financial results of each of the Acquired Hotels for the period from January
1, 2023, to the date the Acquired Hotels were purchased by the Company (the
"Pre-acquisition Period"). The financial results for the Pre-acquisition
Period were provided by the third-party owner of such Acquired Hotel prior to
purchase by the Company and have not been audited or reviewed by our auditors
or adjusted by us. The pro forma information is included to enable comparison
of results for the current reporting period to results for the comparable
period of the prior year and are not indicative of future results. Pro Forma
(99) Hotels - 2024 (1) Jan Feb Mar Q1 Occupancy 64.3 % 72.5 % 78.6 % 71.8 %
ADR $ 164.17 $ 174.61 $ 178.88 $ 173.01 RevPAR $ 105.59 $ 126.55 $ 140.54 $
124.18 2023 Variance Occupancy change vs 2023 4.3 % 4.0 % 1.1 % 3.0 % ADR
change vs 2023 1.1 % (2.8) % (2.1) % (1.4) % RevPAR change vs 2023 5.4 % 1.1 %
(1.0) % 1.5 %
-------------------------------------------------------------------------------
17 Summary Same Store Operating Results (Unaudited) 1. Unaudited pro forma
information includes operating results for 97 same store hotels owned as of
March 31, 2024 as if all such hotels had been owned by the Company since
January 1, 2023. Same Store (97) Hotels - 2024 (1) Jan Feb Mar Q1 Occupancy
64.2 % 72.4 % 78.5 % 71.7 % ADR $ 163.32 $ 173.21 $ 177.81 $ 171.91 RevPAR $
104.89 $ 125.32 $ 139.50 $ 123.19 2023 Variance Occupancy change vs 2023 4.5 %
4.1 % 1.1 % 3.1 % ADR change vs 2023 1.2 % (2.6) % (2.1) % (1.3) % RevPAR
change vs 2023 5.8 % 1.4 % (1.0) % 1.7 %
-------------------------------------------------------------------------------
18 Summary Joint Venture Operating Results (Unaudited) 1. Unaudited pro forma
information includes operating results for 43 JV hotels owned as of March 31,
2024, as if all such hotels had been owned by the Company since January 1,
2023. For any hotels acquired by the Company after January 1, 2023 (the
"Acquired Hotels"), the Company has included in the pro forma information the
financial results of each of the Acquired Hotels for the period from January
1, 2023, to the date the Acquired Hotels were purchased by the Company (the
"Pre-acquisition Period"). The financial results for the Pre-acquisition
Period were provided by the third-party owner of such Acquired Hotel prior to
purchase by the Company and have not been audited or reviewed by our auditors
or adjusted by us. The pro forma information is included to enable comparison
of results for the current reporting period to results for the comparable
period of the prior year and are not indicative of future results. GIC JV (40)
Hotels - 2024 (1) Jan Feb Mar Q1 Occupancy 69.1 % 76.5 % 82.4 % 76.0 % ADR $
165.86 $ 175.35 $ 174.55 $ 172.12 RevPAR $ 114.62 $ 134.13 $ 143.83 $ 130.79
2023 Variance Occupancy change vs 2023 5.7 % 5.6 % 2.2 % 4.4 % ADR change vs
2023 0.5 % (5.6) % (2.5) % (2.6) % RevPAR change vs 2023 6.3 % (0.2) % (0.3) %
1.6 % Other JVs (3) Hotels - 2024 (1) Jan Feb Mar Q1 Occupancy 81.6 % 87.0 %
89.6 % 86.0 % ADR $ 255.74 $ 294.23 $ 282.80 $ 277.74 RevPAR $ 208.65 $ 256.08
$ 253.34 $ 238.99 2023 Variance Occupancy change vs 2023 1.9 % (0.2) % (1.8) %
(0.1) % ADR change vs 2023 10.4 % 5.7 % 0.1 % 4.9 % RevPAR change vs 2023 12.5
% 5.5 % (1.7) % 4.7 %
-------------------------------------------------------------------------------
19 Table of Contents Section I Section II Section III Section IV Section VI
Forward-Looking Statements and Non-GAAP Financial Measure Disclosures
Corporate Financial Schedules Operating & Property-Level Schedules
Capitalization and Debt Schedules Asset Listing
-------------------------------------------------------------------------------
20 Capitalization - Total Enterprise Value (Unaudited) (Amounts in thousands,
except common share price & dividends) March 31, 2024 December 31, 2023
September 30, 2023 June 30, 2023 March 31, 2023 Common Share Price & Dividends
At quarter ended $ 6.51 $ 6.72 $ 5.80 $ 6.51 $ 7.00 High during quarter ended
$ 6.95 $ 6.98 $ 6.87 $ 7.26 $ 8.81 Low during quarter ended $ 6.15 $ 5.31 $
5.40 $ 6.01 $ 6.17 Common dividends per share $ 0.06 $ 0.06 $ 0.06 $ 0.06 $
0.04 Common Shares & Units Common shares outstanding 108,198 107,593 107,573
107,570 107,470 Common units outstanding 15,949 15,949 15,970 15,977 15,977
Total common shares and units outstanding 124,147 123,542 123,543 123,547
123,447 Capitalization Market value of common equity at quarter end $ 808,197
$ 830,202 $ 716,549 $ 804,291 $ 864,129 Par value of preferred equity - 6.250%
Series E 160,000 160,000 160,000 160,000 160,000 Par value of preferred equity
- 5.875% Series F 100,000 100,000 100,000 100,000 100,000 Par value of
preferred equity - 5.250% Series Z 50,000 50,000 50,000 50,000 50,000
Consolidated total debt 1,467,349 1,445,839 1,461,340 1,466,936 1,477,432
Less: Consolidated unrestricted cash (63,435) (37,837) (55,307) (58,456)
(60,678) Consolidated total enterprise value $ 2,522,111 $ 2,548,204 $
2,432,582 $ 2,522,771 $ 2,590,883 Noncontrolling interest in consolidated
total debt - GIC JV (304,159) (308,151) (308,182) (308,262) (308,291)
Noncontrolling interest in consolidated total debt - Other JVs (4,700) (4,700)
(4,700) (4,700) (4,700) Noncontrolling interest in consolidated total cash -
GIC JV 13,334 8,498 11,896 13,077 14,455 Noncontrolling interest in
consolidated total cash - Other JVs 485 260 253 301 298 Pro rata total
enterprise value $ 2,227,070 $ 2,244,111 $ 2,131,849 $ 2,223,187 $ 2,292,645
-------------------------------------------------------------------------------
21 As of March 31, 2024 Number of Pro Rata Pro Rata Pro Rata (amounts in
thousands) Base Interest Fixed/ Fully-Extended Encumbered Principal
Non-controlling Principal Disposition Principal Spread Rate Rate Variable
Maturity Date Properties Outstanding Interests Outstanding Adjustments (1)
Outstanding Adj Senior Credit Facility $400 Million Revolver 1.95% 5.43% 7.38%
Variable 06/21/2028 n/a 55,000 - 55,000 (55,000) - $200 Million Term Loan
1.90% 5.43% 7.33% Variable 06/21/2028 n/a 200,000 - 200,000 - 200,000 Total
Senior Credit and Term Loan Facility $ 255,000 $ - $ 255,000 $ (55,000) $
200,000 $200 Million Unsecured Term Loan 1.90% 5.42% 7.32% Variable 02/26/2029
n/a $ 200,000 $ - $ 200,000 $ - $ 200,000 Convertible Notes n/a n/a 1.50%
Fixed 02/15/2026 n/a $ 287,500 $ - $ 287,500 $ - $ 287,500 Secured Mortgage
Indebtedness Metabank (Bayside) n/a n/a 4.44% Fixed 07/01/2027 3 42,400 -
42,400 - 42,400 Bank of the Cascades (First Interstate Bank) 2.00% 5.32% 7.32%
Variable 12/19/2024 1 7,358 - 7,358 - 7,358 n/a n/a 4.30% Fixed 12/19/2024
7,358 - 7,358 - 7,358 Total Mortgage Loans 4 $ 57,116 $ - $ 57,116 $ - $
57,116 $ 799,616 $ - $ 799,616 $ (55,000) $ 744,616 Brickell Joint Venture
Mortgage Loan City National Bank of Florida 3.00% 5.32% 8.32% Variable
06/09/2025 2 47,000 (4,700) 42,300 - 42,300 GIC Joint Venture Credit Facility
and Term Loans $125 Million Revolver 2.15% 5.43% 7.58% Variable 09/15/2028 n/a
125,000 (61,250) 63,750 - 63,750 $75 Million Term Loan 2.10% 5.43% 7.53%
Variable 09/15/2028 n/a 75,000 (36,750) 38,250 - 38,250 $410 Million Term Loan
2.75% 5.44% 8.19% Variable 01/13/2027 n/a 402,021 (196,990) 205,031 (3,053)
201,978 Wells Fargo CMBS Loan n/a n/a 4.99% Fixed 06/06/2028 1 12,720 (6,233)
6,487 - 6,487 PACE Loan n/a n/a 6.10% Fixed 07/31/2040 1 5,992 (2,936) 3,056 -
3,056 Total GIC Joint Venture Credit Facility and Term Loans 2 $ 620,733 $
(304,159) $ 316,574 $ (3,053) $ 313,521 Total Joint Venture Debt 4 $ 667,733 $
(308,859) $ 358,874 $ (3,053) $ 355,821 Total Debt 8 $ 1,467,349 $ (308,859) $
1,158,490 $ (58,053) $ 1,100,437 Debt Schedule - Part I (Unaudited) (1)
Related to the disposition of three assets which occurred subsequent to March
31, 2024.
-------------------------------------------------------------------------------
22 Debt Schedule - Part II (Unaudited) As of March 31, 2024 (amounts in
thousands) Principal Amount Fixed Debt Variable Debt Effective Interest
Outstanding Outstanding Outstanding Rate Total Debt $ 1,467,349 $ 355,970 $
1,111,379 6.36 % Non-controlling Interests in Joint Ventures (308,859) (9,169)
(299,690) Pro Rata Debt $ 1,158,490 $ 346,801 $ 811,689 5.95 % % of Pro Rata
Debt 100 % 30 % 70 % Pro Rata Adjustment for Swaps in Effect - 502,000
(502,000) Pro Rata Debt Including Swaps $ 1,158,490 $ 848,801 $ 309,689 4.84 %
% of Pro Rata Debt Including Swaps 100 % 73 % 27 % Notional Effective Maturity
Interest Rate Swaps Value Swap Rate Date Date Regions - 2018 - $75mm $ 75,000
2.8600 % September 28, 2018 September 30, 2024 Regions - 2018 - 125mm 125,000
2.9170 % December 31, 2018 December 31, 2025 Capital One - 2022 - $100mm
100,000 2.6000 % January 31, 2023 January 31, 2027 Regions - 2022 - $100mm
100,000 2.5625 % January 31, 2023 January 31, 2029 Capital One - 2023 - $100mm
100,000 3.3540 % July 1, 2023 January 13, 2026 Wells Fargo - 2023 - $100mm
100,000 3.3540 % July 1, 2023 January 13, 2026 Current Swaps $ 600,000 2.9436
% Wells Fargo - 2024 - $100mm $ 100,000 3.7650 % October 1, 2024 January 13,
2026 Total Swaps $ 700,000 3.0609 %
-------------------------------------------------------------------------------
23 Debt Schedule - Part III (Unaudited) (1) Amounts are in millions ($) and
assumes fully-extended maturities for all loans. Reflects pro rata debt
totals. Pro Rata Debt Maturity Ladder at March 31, 2024 $55 $288 $200 $102 $42
$200$205 $15 $42 $6 $3 $400M Senior Revolver Convertible Senior Notes $200M
Senior Term Loan $200M GIC JV Credit Facility Brickell JV Mortgage Debt $200M
Senior Term Loan $410M GIC JV Term Loan Mortgage Debt 2024 2025 2026 2027 2028
2029 2030 $0 $100 $200 $300 $400 (1)
-------------------------------------------------------------------------------
24 Table of Contents Section I Section II Section III Section IV Section VI
Forward-Looking Statements and Non-GAAP Financial Measure Disclosures
Corporate Financial Schedules Operating & Property-Level Schedules
Capitalization and Debt Schedules Asset Listing
-------------------------------------------------------------------------------
25 Asset Listing (Unaudited) Hotels Rooms STR Chain Scale STR Location INN
Wholly-Owned (100% Ownership) Hyatt Place - Denver South/Park Meadows 1 127
Upscale Suburban Hyatt Place - Denver Tech Center 1 126 Upscale Suburban Hyatt
Place - Scottsdale/Old Town 1 126 Upscale Resort Holiday Inn Express & Suites
- San Francisco/Fisherman's Wharf 1 252 Upper Midscale Urban Courtyard -
Dallas/Arlington South 1 103 Upscale Suburban Residence Inn - Dallas/Arlington
South 1 96 Upscale Suburban Hyatt Place - Orlando/Convention Center 1 151
Upscale Resort Hyatt Place - Orlando/Universal 1 150 Upscale Resort Hyatt
Place - Minneapolis/Downtown 1 213 Upscale Urban Springhill Suites - Nashville
MetroCenter 1 78 Upscale Urban Courtyard - New Orleans Downtown Near the
French Quarter 1 140 Upscale Urban Hyatt Place - Portland Airport/Cascade
Station 1 136 Upscale Airport Residence Inn - Portland Airport at Cascade
Station 1 124 Upscale Airport Courtyard - New Orleans/Metairie 1 153 Upscale
Airport Staybridge Suites - Denver/Cherry Creek 1 121 Upscale Suburban Hyatt
House - Denver Tech Center 1 135 Upscale Suburban Courtyard - Atlanta Downtown
1 150 Upscale Urban Hyatt Place - Garden City 1 122 Upscale Suburban Courtyard
- New Orleans Downtown/Convention Center 1 202 Upscale Urban Residence Inn -
New Orleans/Metairie 1 120 Upscale Airport SpringHill Suites - New Orleans
Downtown 1 208 Upscale Urban Hilton Garden Inn - Greenville 1 120 Upscale
Suburban Fairfield Inn & Suites - Louisville Downtown 1 140 Upper Midscale
Urban
-------------------------------------------------------------------------------
26 Asset Listing (Unaudited) Hotels Rooms STR Chain Scale STR Location INN
Wholly-Owned (100% Ownership), (cont.) SpringHill Suites - Louisville Downtown
1 198 Upscale Urban SpringHill Suites - Indianapolis Downtown 1 156 Upscale
Urban Courtyard - Indianapolis Downtown 1 297 Upscale Urban Hampton Inn &
Suites - San Diego/Poway 1 108 Upper Midscale Suburban Hampton Inn & Suites -
Camarillo 1 116 Upper Midscale Suburban Hilton Garden Inn - Houston/Galleria
Area 1 182 Upscale Urban Doubletree by Hilton San Francisco Airport North
Bayfront 1 210 Upscale Airport Four Points - San Francisco Airport 1 101
Upscale Airport Hilton Garden Inn - Houston/Energy Corridor 1 190 Upscale
Suburban Hampton Inn & Suites - Austin/Downtown/Convention Center 1 209 Upper
Midscale Urban Hampton Inn & Suites - Minneapolis/Downtown 1 211 Upper
Midscale Urban Residence Inn - Bridgewater/Branchburg 1 101 Upscale Suburban
Hyatt House - Across From Universal Orlando Resort 1 168 Upscale Resort
Residence Inn - Baltimore/Hunt Valley 1 141 Upscale Suburban Hotel Indigo -
Asheville Downtown 1 116 Upper Upscale Small Metro/Town Courtyard - Atlanta
Decatur Downtown/Emory 1 179 Upscale Suburban Courtyard - Nashville
Vanderbilt/West End 1 226 Upscale Urban Residence Inn - Atlanta Midtown/Peachtre
e at 17th 1 160 Upscale Urban Hyatt House - Miami Airport 1 163 Upscale
Airport Marriott - Boulder 1 165 Upper Upscale Urban Hyatt Place -
Chicago/Downtown-The Loop 1 206 Upscale Urban Hyatt Place - Phoenix/Mesa 1 152
Upscale Suburban Courtyard - Fort Lauderdale Beach 1 261 Upscale Resort
-------------------------------------------------------------------------------
27 Asset Listing (Unaudited) Hotels Rooms STR Chain Scale STR Location INN
Wholly-Owned (100% Ownership), (cont.) Courtyard - Charlotte City Center 1 181
Upscale Urban Hampton Inn & Suites - Baltimore Inner Harbor 1 116 Upper
Midscale Urban Residence Inn - Baltimore Downtown/Inner Harbor 1 189 Upscale
Urban Courtyard - Kansas City Country Club Plaza 1 123 Upscale Suburban
Courtyard - Fort Worth Downtown/Blackstone 1 203 Upscale Urban AC Hotel -
Atlanta Downtown 1 255 Upscale Urban Hilton Garden Inn - Waltham 1 148 Upscale
Suburban Residence Inn - Cleveland Downtown 1 175 Upscale Urban Courtyard -
New Haven at Yale 1 207 Upscale Urban Residence Inn - Boston/Watertown 1 150
Upscale Suburban INN Wholly-Owned (100% Ownership) 56 9,056
-------------------------------------------------------------------------------
28 Asset Listing (Unaudited) Hotels Rooms STR Chain Scale STR Location GIC
Joint Venture (51% Ownership) Courtyard - Scottsdale North 1 153 Upscale
Resort Springhill Suites - Scottsdale North 1 121 Upscale Resort Hampton Inn &
Suites - Tampa/Ybor City/Downtown 1 138 Upper Midscale Urban Homewood Suites -
Aliso Viejo/Laguna Beach 1 129 Upscale Suburban Courtyard - Pittsburgh
Downtown 1 183 Upscale Urban Homewood Suites - Tucson/St. Philip's Plaza
University 1 122 Upscale Resort Hampton Inn & Suites - Silverthorne 1 88 Upper
Midscale Resort Hilton Garden Inn - San Jose / Milpitas 1 161 Upscale Suburban
Residence Inn - Portland Downtown / Riverplace 1 258 Upscale Urban Residence
Inn - Portland / Hillsboro 1 122 Upscale Suburban Residence Inn - Steamboat
Springs 1 110 Upscale Small Metro/Town Embassy Suites - Tucson / Paloma
Village 1 120 Upper Upscale Resort Residence Inn - Scottsdale North 1 120
Upscale Resort AC Hotel - Dallas Downtown 1 128 Upscale Urban Residence Inn -
Dallas Downtown 1 121 Upscale Urban Hampton Inn & Suites - Dallas Downtown 1
176 Upper Midscale Urban SpringHill Suites - Dallas Downtown 1 148 Upscale
Urban Hilton Garden Inn - Grapevine at Silver Lake Crossing 1 152 Upscale
Airport Holiday Inn Express & Suites - DFW / Grapevine 1 95 Upper Midscale
Airport Courtyard - Dallas DFW Airport / North Grapevine 1 181 Upscale Airport
TownePlace Suites - Dallas / Grapevine 1 120 Upper Midscale Airport Hyatt
Place - Dallas / Grapevine 1 125 Upscale Airport
-------------------------------------------------------------------------------
29 Asset Listing (Unaudited) Hotels Rooms STR Chain Scale STR Location GIC
Joint Venture (51% Ownership) AC Hotel - Dallas / Frisco 1 150 Upscale
Suburban Residence Inn - Dallas / Frisco 1 150 Upscale Suburban Canopy Hotel -
Dallas / Frisco Station 1 150 Upper Upscale Suburban Residence Inn - Tyler 1
119 Upscale Small Metro/Town Hilton Garden Inn - Longview 1 122 Upscale Small
Metro/Town AC Hotel - Houston Downtown 1 195 Upscale Urban Hilton Garden Inn -
College Station 1 119 Upscale Small Metro/Town Homewood Suites - Midland 1 118
Upscale Suburban Hyatt Place - Lubbock 1 125 Upscale Urban Courtyard -
Amarillo Downtown 1 107 Upscale Suburban Embassy Suites - Amarillo Downtown 1
226 Upper Upscale Suburban AC Hotel - Oklahoma City / Bricktown 1 142 Upscale
Urban Hyatt Place - Oklahoma City / Bricktown 1 134 Upscale Urban Holiday Inn
Express & Suites - Oklahoma City Downtown / Bricktown 1 124 Upper Midscale
Urban SpringHill Suites - New Orleans Downtown / Canal Street 1 74 Upscale
Urban TownePlace Suites - New Orleans Downtown / Canal Street 1 105 Upper
Midscale Urban Canopy Hotel - New Orleans Downtown 1 176 Upper Upscale Urban
The Nordic Lodge - Steamboat Springs 1 47 Independent Small Metro/Town GIC
Joint Venture (51% Ownership) 40 5,454
-------------------------------------------------------------------------------
30 Asset Listing (Unaudited) (1) Asset listing excludes two parking garages
located in Dallas, TX and Frisco, TX. Hotels Rooms STR Chain Scale STR
Location Other Joint Ventures (90% Ownership) AC Hotels by Marriott - Miami
Brickell 1 156 Upscale Urban Element - Miami Brickell 1 108 Upscale Urban
Onera - Fredericksburg 1 11 Independent Small Metro/Town Other Joint Ventures
(90% Ownership) 3 275 Pro Forma 99 14,785
-------------------------------------------------------------------------------
31
-------------------------------------------------------------------------------
{graphic omitted}
{graphic omitted}
{graphic omitted}
{graphic omitted}
{graphic omitted}
{graphic omitted}
{graphic omitted}
{graphic omitted}
{graphic omitted}
{graphic omitted}
{graphic omitted}
{graphic omitted}
{graphic omitted}
{graphic omitted}
{graphic omitted}
{graphic omitted}
{graphic omitted}
{graphic omitted}
{graphic omitted}
{graphic omitted}
{graphic omitted}
{graphic omitted}
{graphic omitted}
{graphic omitted}
{graphic omitted}
{graphic omitted}
{graphic omitted}
{graphic omitted}
{graphic omitted}
{graphic omitted}
{graphic omitted}
{graphic omitted}
{graphic omitted}
{graphic omitted}