AUSTIN, Texas, Oct. 30, 2017 /PRNewswire/ -- Summit Hotel
Properties, Inc. (NYSE: INN) (the "Company"), today announced
results for the third quarter of 2017.
"In the third quarter, both our top and bottom line results came
in at or above the high end of our expectations going in to
the quarter despite what was generally a challenging operating
environment. Pro forma RevPAR growth of 1.2 percent in the
quarter further validates our diverse and well-positioned portfolio
as 60 percent of our markets exceeded the STR Upscale average and
our portfolio once again gained market share against our respective
competitive sets," said Dan Hansen,
the Company's Chairman, President and Chief Executive
Officer. "We continued to enhance the flexibility of our
balance sheet during the quarter with the closing of a $225 million unsecured term loan. As a
result, we finished the quarter with over $400 million of liquidity to pursue value
creation opportunities," commented Mr. Hansen.
Third Quarter 2017 Summary
- Net Income: Net income attributable to
common stockholders decreased to $18.2
million, or $0.17 per diluted
share, compared with $22.1 million,
or $0.25 per diluted share, in the
same period of 2016. When excluding the $7.7 million and $10.5
million pretax gain on disposal of assets during the three
months ended September 30, 2017 and
2016, respectively, net income attributable to common stockholders
decreased by $1.1 million as compared
to the same period in 2016.
- Pro Forma RevPAR: Pro forma revenue per available
room ("RevPAR") increased 1.2 percent to $119.13 from the same period in 2016. Pro
forma occupancy increased 2.4 percent to 80.5 percent, which was
partially offset by a 1.1 percent decrease in average daily rate
("ADR") to $148.05.
- Same-Store RevPAR: Same-store RevPAR grew to
$115.04, an increase of 0.6 percent
from the same period in 2016. Same-store occupancy increased
by 2.0 percent to 80.6 percent, which was partially offset by a 1.4
percent decrease in ADR to $142.80
compared to the same period in 2016.
- Pro Forma Hotel EBITDA: Pro forma hotel EBITDA was
$50.5 million, a decrease of 3.4
percent over the same period in 2016. Pro forma hotel EBITDA
margin contracted by 160 basis points to 37.0 percent from 38.6
percent in the same period of 2016. Excluding the effect of
property tax increases, pro forma hotel EBITDA margin contracted by
41 basis points to 38.2 percent.
- Adjusted EBITDA: Adjusted EBITDA increased 13.6
percent to $47.8 million from
$42.1 million in the same period of
2016.
- Adjusted FFO: Adjusted Funds from
Operations ("AFFO") increased 13.6 percent to $36.7 million, or $0.35 per diluted share, from $32.3 million in the same period of 2016.
- Acquisitions: The Company acquired the
255-guestroom AC Hotel by Marriott Atlanta Downtown for an
aggregate purchase price of $57.5
million, or $225,500 per
key.
- Dispositions: The Company sold three hotels
containing a total of 273 guestrooms for an aggregate sales price
of $27.8 million, or an average of
$101,600 per key. The hotels
had a combined RevPAR of $85.03 for
the twelve months ended June 30, 2017
which is a 26.3% discount to the pro forma portfolio's RevPAR for
the same period.
The Company's results for the three and nine months ended
September 30, 2017 and 2016 are as
follows:
|
For the Three
Months Ended
September 30,
|
|
For the Nine
Months Ended
September 30,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
(Unaudited)
|
|
($ in thousands,
except per unit and RevPAR data)
|
Net income
attributable to common stockholders
|
$
18,190
|
|
$
22,090
|
|
$
76,845
|
|
$
84,146
|
Net income per
diluted share and unit
|
$
0.17
|
|
$
0.25
|
|
$
0.78
|
|
$
0.96
|
Total
revenues
|
$
136,587
|
|
$
118,336
|
|
$
383,632
|
|
$
363,613
|
EBITDA
(1)
|
$
53,556
|
|
$
50,453
|
|
$
173,796
|
|
$
173,277
|
Adjusted EBITDA
(1)
|
$
47,831
|
|
$
42,105
|
|
$
135,669
|
|
$
130,382
|
FFO
(1)
|
$
34,004
|
|
$
30,093
|
|
$
95,369
|
|
$
88,638
|
Adjusted FFO
(1)
|
$
36,653
|
|
$
32,266
|
|
$
102,612
|
|
$
97,045
|
FFO per diluted share
and unit (1) (2)
|
$
0.33
|
|
$
0.34
|
|
$
0.96
|
|
$
1.02
|
Adjusted FFO per
diluted share and unit (1) (2)
|
$
0.35
|
|
$
0.37
|
|
$
1.04
|
|
$
1.11
|
|
|
|
|
|
|
|
|
Pro Forma
(3)
|
|
|
|
|
|
|
|
RevPAR
|
$
119.13
|
|
$
117.69
|
|
$
119.18
|
|
$
119.32
|
RevPAR
growth
|
1.2%
|
|
|
|
-0.1%
|
|
|
Hotel
EBITDA
|
$
50,458
|
|
$
52,250
|
|
$
152,282
|
|
$
160,450
|
Hotel EBITDA
margin
|
37.0%
|
|
38.6%
|
|
37.6%
|
|
39.3%
|
Hotel EBITDA margin
growth
|
-160 bps
|
|
|
|
-174 bps
|
|
|
|
|
(1)
|
See tables later
in this press release for a discussion and reconciliation of net
income to non-GAAP financial measures, including earnings before
interest, taxes, depreciation and amortization ("EBITDA"), adjusted
EBITDA, 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
release. Non-GAAP financial measures are
unaudited.
|
|
|
(2)
|
Amounts are based
on 104,149,000 weighted average diluted common shares and units and
87,401,000 weighted average diluted common shares and units for the
three months ended September 30, 2017, and 2016, respectively, and
99,062,000 weighted average diluted common shares and units and
87,319,000 weighted average diluted common shares and units for the
nine months ended September 30, 2017, and 2016, respectively.
The Company includes the outstanding common units of limited
partnership interests ("OP Units") in Summit Hotel OP, LP, the
Company's operating partnership, held by limited partners other
than the Company in the determination of weighted average diluted
common shares and units 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.
|
|
|
(3)
|
Unless stated
otherwise in this release, all pro forma information includes
operating and financial results for 79 hotels owned as of September
30, 2017, as if each hotel had been owned by the Company since
January 1, 2016. As a result, all pro forma information
includes operating and financial results for hotels acquired since
January 1, 2016, which includes periods prior to the Company's
ownership. Pro forma and non-GAAP financial measures are
unaudited.
|
Year-To-Date 2017 Summary
- Net Income: Net income attributable to
common stockholders decreased to $76.8
million, or $0.78 per diluted
share, compared with $84.1 million,
or $0.96 per diluted share, in the
same period of 2016. When excluding the $43.5 million and $50.0
million pretax gain on disposal of assets during the nine
months ended September 30, 2017 and
2016, respectively, net income attributable to common stockholders
decreased by $0.8 million as compared
to the same period in 2016.
- Pro Forma RevPAR: Pro forma revenue per available
room ("RevPAR") decreased 0.1 percent from the same period in 2016
to $119.18. Pro forma average
daily rate ("ADR") decreased 0.4 percent from the same period in
2016 to $150.70. Pro forma
occupancy increased 0.3 percent to 79.1 percent.
- Same-Store RevPAR: Same-store RevPAR declined to
$115.87, a decrease of 0.8 percent
from the same period in 2016. Same-store ADR decreased 1.0
percent from the same period in 2016 to $145.20. Same-store occupancy increased by
0.2 percent to 79.8 percent from the same period in 2016.
- Pro Forma Hotel EBITDA: Pro forma hotel EBITDA was
$152.3 million, a decrease of 5.1
percent from the same period in 2016. Pro forma hotel EBITDA
margin contracted by 174 basis points to 37.6 percent from the same
period of 2016.
- Adjusted EBITDA: Adjusted EBITDA increased 4.1
percent to $135.7 million from
$130.4 million in the same period of
2016.
- Adjusted FFO: Adjusted Funds from
Operations ("AFFO") increased to $102.6
million, or $1.04 per diluted
share, an increase in AFFO of 5.7 percent from the same period in
2016.
- Acquisitions: The Company acquired ten hotels
containing 1,790 guestrooms for an aggregate purchase price of
$422.0 million, or an average of
$235,700 per key.
- Dispositions: The Company sold twelve hotels
containing 1,164 guestrooms for an aggregate sales price of
$120.2 million, or an average of
$103,200 per key.
Acquisitions
On July 13, 2017, the Company
completed the acquisition of the 255-guestroom AC Hotel by Marriott
Atlanta Downtown (the "Hotel") for a total purchase price of
$57.5 million, or $225,500 per key, and entered into a management
agreement with Interstate Hotels & Resorts. Opened as an
AC Hotel by Marriott in May 2017, the
Hotel recently underwent a complete renovation and repositioning of
approximately $20 million, or
$78,400 per key. The AC Hotel
by Marriott is one of Marriott's newest distinctive brands offering
a stylish, yet very efficient and purposeful feel.
The Hotel's prime location in the heart of Downtown Atlanta will benefit from various
business and leisure demand generators. Atlanta is home to 27 of the Fortune 1000
companies and benefits from Hartsfield-Jackson Atlanta
International Airport, the busiest airport in the world servicing
more than 100 million passengers per year. Major corporations and
organizations such as the American Cancer Society, Ernst &
Young, Georgia Power, Georgia-Pacific, Coca-Cola and Turner
Broadcasting System are all located within one mile of the
Hotel. Significant leisure demand generators such as the
Georgia Aquarium, World of Coca-Cola, College Football Hall of
Fame, CNN Studios, and SkyView Atlanta are also within walking
distance. The recently opened 75,000-seat Mercedes-Benz
Stadium, the new home of the NFL's Atlanta Falcons and MLS' Atlanta
United, is located only steps from the hotel.
Dispositions
On July 21, 2017, the Company
completed the sale of a 273-guestroom, three-hotel portfolio
located in suburban Fort Worth,
Texas for a total sales price of $27.8 million, or approximately $102,000 per key. The portfolio included
the 105-guestroom Hampton Inn & Suites Fort Worth West I-30,
the 98-guestroom Hilton Garden Inn Fort Worth/Fossil Creek, and the
70-guestroom Fairfield Inn & Suites Fort Worth West I-30.
The sale resulted in a net gain of $8.1
million and represented a capitalization rate of 7.9 percent
on the hotels' net operating income, including planned capital
improvements, for the trailing twelve months ended June 30, 2017.
Capital Investment
The Company invested $11.3 million
and $25.3 million in capital
improvements during the three and nine months ended September 30, 2017, respectively. The scope
of work ranged from common space improvements to complete guestroom
renovations, including furniture, soft goods and guest
bathrooms. Through the remainder of 2017, the Company expects
to invest another $15.0 million to $20.0
million in capital improvements.
Capital Markets & Balance Sheet
During the third quarter and subsequent to quarter end, the
Company executed on the following capital markets transactions:
- On September 26, 2017, the
Company entered into a new $225
million unsecured term loan. The loan includes an
accordion feature that, subject to certain conditions, allows the
Company to request an increase in lender commitments up to an
aggregate of $400 million. The
unsecured term loan matures on November 25,
2022, carries an interest rate based on a pricing grid
ranging from 145 basis points to 220 basis points plus LIBOR
depending upon the Company's leverage ratio, includes a delayed
draw feature, and is prepayable without penalty at any time.
At closing, the Company received an initial loan advance of
$125 million and may draw the
remaining $100 million at any time
prior to September 20, 2018.
Net proceeds from the initial loan advance were utilized to pay
down outstanding advances under the Company's unsecured revolving
credit facility.
- On October 2, 2017, the Company
entered into two separate $100
million interest rate swap agreements with an effective date
of January 29, 2018, to partially fix
the interest rate on a portion of its variable interest rate
unsecured indebtedness. The swaps convert LIBOR from a
floating rate to an average fixed rate of 1.98% through
January 31, 2023.
At September 30, 2017, the Company
had the following:
- Total outstanding debt of $777.5
million with a weighted average interest rate of 3.78
percent.
- Undrawn capacity on its unsecured credit facilities and other
debt instruments totaling $382.6
million.
- Total net debt, which the Company defines as total outstanding
debt less cash and cash equivalents, to trailing twelve month pro
forma adjusted EBITDA of 3.9x.
At October 20, 2017, the Company
had the following:
- Total outstanding debt of $781.8
million with a weighted average interest rate of 3.78
percent.
- Undrawn capacity on its unsecured credit facilities and other
debt instruments totaling $377.6
million.
Dividends
On October 30, 2017, the Company
declared a quarterly cash dividend of $0.17 per share on its common stock and per
common unit of limited partnership interest in Summit Hotel OP,
LP. The annualized dividend of $0.68 per common share and per common unit
represents an annual yield of 4.3 percent based on the October 27, 2017 closing stock price.
In addition, the Company declared a quarterly cash dividend
of:
- $0.4921875 per share on its
7.875% Series B Cumulative Redeemable Preferred Stock.
- $0.4453125 per share on its
7.125% Series C Cumulative Redeemable Preferred Stock.
- $0.403125 per share on its 6.45%
Series D Cumulative Redeemable Preferred Stock.
The dividends are payable on November 30,
2017 to holders of record as of November 16, 2017.
2017 Outlook
The Company is providing its outlook for the fourth quarter and
full year 2017 based on its 79 hotels owned as of October 30, 2017. There are no future
acquisitions, dispositions, or capital markets activities assumed
in the Company's outlook for the fourth quarter and full year
2017.
FOURTH QUARTER
2017
|
($ in thousands,
except RevPAR and per unit data)
|
|
Low
|
|
High
|
Pro forma RevPAR (79)
1
|
$107.75
|
|
$109.75
|
Pro forma RevPAR
growth (79) 1
|
2.00%
|
|
4.00%
|
RevPAR (same-store
65) 2
|
$103.50
|
|
$105.50
|
RevPAR growth
(same-store 65) 2
|
0.00%
|
|
2.00%
|
Adjusted
FFO
|
$27,200
|
|
$30,200
|
Adjusted FFO per
diluted unit 3
|
$0.26
|
|
$0.29
|
|
FULL YEAR
2017
|
($ in thousands,
except RevPAR and per unit data)
|
|
Low
|
|
High
|
Pro forma RevPAR (79)
1
|
$116.25
|
|
$116.75
|
Pro forma RevPAR
growth (79) 1
|
0.25%
|
|
0.75%
|
RevPAR (same-store
65) 2
|
$112.50
|
|
$113.00
|
RevPAR growth
(same-store 65) 2
|
(0.75%)
|
|
(0.25%)
|
Adjusted
FFO
|
$129,800
|
|
$132,800
|
Adjusted FFO per
diluted unit 3
|
$1.29
|
|
$1.32
|
Capital
improvements
|
$40,000
|
|
$45,000
|
|
|
(1)
|
As of October 30,
2017, the Company owned 79 hotels. The pro forma outlook
information includes operating estimates for 79 hotels as if each
hotel had been owned since January 1, 2016.
|
|
|
(2)
|
As of October 30,
2017, the Company owned 65 same-store hotels. The same-store
outlook information includes operating estimates for 65 hotels
owned by the Company as of January 1, 2016.
|
|
|
(3)
|
Assumes weighted
average diluted common shares and units outstanding of 104,200,000
for the fourth quarter 2017 and 100,300,000 for the full year
2017.
|
Third Quarter 2017 Earnings Conference Call
The Company will conduct its quarterly conference call on
Tuesday, October 31, 2017, at
9:00 a.m. (ET). To participate
in the conference call, please dial 877-930-8101. The
conference identification code for the call is 95308312.
Additionally, a live webcast of the quarterly conference call will
be available through the Company's website, www.shpreit.com.
A replay of the quarterly conference call webcast will be
available until 11:59 PM ET Tuesday,
November 7, 2017, by dialing 855-859-2056, conference
identification code 95308312. A replay will also be available
in the Investor Relations section of the Company's website until
February 28, 2018.
About Summit Hotel Properties
Summit Hotel Properties, Inc. is a publicly-traded real estate
investment trust focused on owning premium-branded hotels with
efficient operating models primarily in the upscale segment of the
lodging industry. As of October 30,
2017, the Company's portfolio consisted of 79 hotels with a
total of 11,590 guestrooms located in 24 states.
For additional information, please visit the Company's website,
www.shpreit.com, and follow the Company on Twitter at
@SummitHotel_INN.
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 embedded
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, 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, 2016,
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.
SUMMIT HOTEL
PROPERTIES, INC.
Condensed
Consolidated Balance Sheets
(Amounts in
thousands)
|
|
|
September 30,
2017
|
|
December 31,
2016
|
|
(Unaudited)
|
|
|
ASSETS
|
|
|
|
Investment in
hotel properties, net
|
$
1,902,949
|
|
$
1,545,122
|
Investment in
hotel properties under development
|
18,754
|
|
-
|
Land held for
development
|
2,942
|
|
5,742
|
Assets held
for sale
|
1,193
|
|
62,695
|
Investment in
real estate loans, net
|
-
|
|
17,585
|
Cash and cash
equivalents
|
52,451
|
|
34,694
|
Restricted
cash
|
28,933
|
|
24,881
|
Trade
receivables, net
|
20,899
|
|
11,807
|
Prepaid
expenses and other
|
5,294
|
|
6,474
|
Deferred
charges, net
|
4,669
|
|
3,727
|
Other
assets
|
5,794
|
|
5,778
|
Total assets
|
$
2,043,878
|
|
$
1,718,505
|
LIABILITIES AND
EQUITY
|
|
|
|
Liabilities:
|
|
|
|
Debt, net of
debt issuance costs
|
$
772,275
|
|
$
652,414
|
Accounts
payable
|
7,257
|
|
4,623
|
Accrued
expenses and other
|
56,306
|
|
46,880
|
Derivative
financial instruments
|
438
|
|
1,118
|
Total liabilities
|
836,276
|
|
705,035
|
|
|
|
|
Total stockholders' equity
|
1,204,516
|
|
1,010,042
|
Non-controlling interests in operating partnership
|
3,086
|
|
3,428
|
Total equity
|
1,207,602
|
|
1,013,470
|
Total liabilities and equity
|
$
2,043,878
|
|
$
1,718,505
|
SUMMIT HOTEL
PROPERTIES, INC.
Condensed
Consolidated Statements of Operations
(Amounts in
thousands, except per share amounts)
|
|
|
For the
Three Months Ended
September 30,
|
|
For the Nine
Months Ended
September 30,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Revenues:
|
(unaudited)
|
Room
|
$
127,246
|
|
$
110,777
|
|
$
358,110
|
|
$
340,657
|
Other hotel
operations revenue
|
9,341
|
|
7,559
|
|
25,522
|
|
22,956
|
Total
revenues
|
136,587
|
|
118,336
|
|
383,632
|
|
363,613
|
Expenses:
|
|
|
|
|
|
|
|
Hotel operating
expenses:
|
|
|
|
|
|
|
|
Room
|
33,404
|
|
28,705
|
|
91,221
|
|
82,959
|
Other
direct
|
16,846
|
|
15,513
|
|
49,255
|
|
48,596
|
Other
indirect
|
35,820
|
|
29,312
|
|
100,297
|
|
92,870
|
Total hotel operating
expenses
|
86,070
|
|
73,530
|
|
240,773
|
|
224,425
|
Depreciation and
amortization
|
23,594
|
|
17,887
|
|
62,052
|
|
53,715
|
Corporate general and
administrative
|
4,550
|
|
4,388
|
|
14,998
|
|
14,358
|
Hotel property
acquisition costs
|
-
|
|
527
|
|
354
|
|
2,809
|
Loss on impairment of
assets
|
-
|
|
577
|
|
-
|
|
577
|
Total
expenses
|
114,214
|
|
96,909
|
|
318,177
|
|
295,884
|
Operating
income
|
22,373
|
|
21,427
|
|
65,455
|
|
67,729
|
Other income
(expense):
|
|
|
|
|
|
|
|
Interest
expense
|
(7,768)
|
|
(6,626)
|
|
(21,486)
|
|
(21,232)
|
Gain on disposal of
assets, net
|
7,725
|
|
10,491
|
|
43,531
|
|
49,997
|
Other income
(expense), net
|
(116)
|
|
661
|
|
2,847
|
|
1,854
|
Total other income
(expense)
|
(159)
|
|
4,526
|
|
24,892
|
|
30,619
|
Income from
continuing operations before income taxes
|
22,214
|
|
25,953
|
|
90,347
|
|
98,348
|
Income tax benefit
(expense)
|
231
|
|
1,245
|
|
(613)
|
|
(461)
|
Net income
|
22,445
|
|
27,198
|
|
89,734
|
|
97,887
|
Less - Income
attributable to Operating Partnership
|
(55)
|
|
(115)
|
|
(289)
|
|
(454)
|
Net income
attributable to Summit Hotel Properties, Inc.
|
22,390
|
|
27,083
|
|
89,445
|
|
97,433
|
Preferred
dividends
|
(4,200)
|
|
(4,993)
|
|
(12,600)
|
|
(13,287)
|
Net income
attributable to common stockholders
|
$
18,190
|
|
$
22,090
|
|
$
76,845
|
|
$
84,146
|
Earnings per
share:
|
|
|
|
|
|
|
|
Basic
|
$
0.18
|
|
$
0.25
|
|
$
0.78
|
|
$
0.97
|
Diluted
|
$
0.17
|
|
$
0.25
|
|
$
0.78
|
|
$
0.96
|
Weighted average
common shares outstanding:
|
|
|
|
|
|
|
|
Basic
|
103,253
|
|
86,492
|
|
98,105
|
|
86,428
|
Diluted
|
103,632
|
|
87,401
|
|
98,471
|
|
87,319
|
SUMMIT HOTEL
PROPERTIES, INC.
Reconciliation of Net Income to Non-GAAP Measures – Funds From
Operations
(Unaudited)
(In thousands
except per share and unit amounts)
|
|
|
For the Three
Months Ended
September 30,
|
|
For the Nine
Months Ended
September 30,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
Net
income
|
$
22,445
|
|
$
27,198
|
|
$
89,734
|
|
$
97,887
|
Preferred
dividends
|
(4,200)
|
|
(4,993)
|
|
(12,600)
|
|
(13,287)
|
Net income
applicable to common shares and units
|
18,245
|
|
22,205
|
|
77,134
|
|
84,600
|
Net income per
common share and unit
|
$
0.18
|
|
$
0.25
|
|
$
0.78
|
|
$
0.97
|
|
|
|
|
|
|
|
|
Real estate-related
depreciation (1)
|
23,484
|
|
17,802
|
|
61,766
|
|
53,458
|
Loss on impairment of
assets
|
-
|
|
577
|
|
-
|
|
577
|
Gain on disposal of
assets
|
(7,725)
|
|
(10,491)
|
|
(43,531)
|
|
(49,997)
|
FFO applicable to
common shares and units
|
34,004
|
|
30,093
|
|
95,369
|
|
88,638
|
FFO per common
share and unit
|
$
0.33
|
|
$
0.34
|
|
$
0.96
|
|
$
1.02
|
|
|
|
|
|
|
|
|
Amortization of
deferred financing costs
|
539
|
|
522
|
|
1,553
|
|
1,625
|
Amortization of
franchise fees (1)
|
110
|
|
85
|
|
286
|
|
257
|
Equity-based
compensation
|
1,489
|
|
1,020
|
|
4,483
|
|
3,202
|
Hotel property
acquisition costs
|
-
|
|
527
|
|
354
|
|
2,809
|
Debt transaction
costs
|
23
|
|
38
|
|
180
|
|
514
|
Gain on derivative
instruments
|
-
|
|
(19)
|
|
-
|
|
-
|
Loss from net
casualties
|
488
|
|
-
|
|
387
|
|
-
|
Adjusted Funds
From Operations
|
$
36,653
|
|
$
32,266
|
|
$
102,612
|
|
$
97,045
|
AFFO per common
share and unit
|
$
0.35
|
|
$
0.37
|
|
$
1.04
|
|
$
1.11
|
|
|
|
|
|
|
|
|
Weighted average
diluted common units (2)
|
104,149
|
|
87,401
|
|
99,062
|
|
87,319
|
|
|
(1)
|
The total of these
line items represents depreciation and amortization as reported on
the Company's Condensed Consolidated Statements of Operations for
the periods presented.
|
|
|
(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.
|
SUMMIT HOTEL
PROPERTIES, INC.
Reconciliation of
Net Income to Non-GAAP Measures – EBITDA
(Unaudited)
(Amounts in
thousands)
|
|
|
For the Three
Months Ended
September 30,
|
|
For the Nine
Months Ended
September 30,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Net
income
|
$
22,445
|
|
$
27,198
|
|
$
89,734
|
|
$
97,887
|
Depreciation and
amortization
|
23,594
|
|
17,887
|
|
62,052
|
|
53,715
|
Interest
expense
|
7,768
|
|
6,626
|
|
21,486
|
|
21,232
|
Interest
income
|
(20)
|
|
(13)
|
|
(89)
|
|
(18)
|
Income tax (benefit)
expense
|
(231)
|
|
(1,245)
|
|
613
|
|
461
|
EBITDA
|
$
53,556
|
|
$
50,453
|
|
$
173,796
|
|
$
173,277
|
|
|
|
|
|
|
|
|
Equity-based
compensation
|
1,489
|
|
1,020
|
|
4,483
|
|
3,202
|
Hotel property
acquisition costs
|
-
|
|
527
|
|
354
|
|
2,809
|
Loss on impairment of
assets
|
-
|
|
577
|
|
-
|
|
577
|
Debt transaction
costs
|
23
|
|
38
|
|
180
|
|
514
|
Gain on disposal of
assets
|
(7,725)
|
|
(10,491)
|
|
(43,531)
|
|
(49,997)
|
Gain on derivative
instruments
|
-
|
|
(19)
|
|
-
|
|
-
|
Loss from net
casualties
|
488
|
|
-
|
|
387
|
|
-
|
Adjusted
EBITDA
|
$
47,831
|
|
$
42,105
|
|
$
135,669
|
|
$
130,382
|
SUMMIT HOTEL
PROPERTIES, INC.
Pro Forma Hotel
Operating Data
(Unaudited)
(Dollars in
thousands)
|
|
|
For the Three
Months Ended
September 30,
|
|
For the Nine
Months Ended
September 30,
|
Pro Forma
Operating Data (1) (2)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
Pro forma room
revenue
|
$
127,025
|
|
$
125,450
|
|
$
377,099
|
|
$
377,977
|
Pro forma other hotel
operations revenue
|
9,344
|
|
9,923
|
|
28,190
|
|
30,127
|
Pro forma total
revenues
|
136,369
|
|
135,373
|
|
405,289
|
|
408,104
|
Pro forma total hotel
operating expenses
|
85,911
|
|
83,123
|
|
253,007
|
|
247,654
|
Pro forma hotel EBITDA
|
$
50,458
|
|
$
52,250
|
|
$
152,282
|
|
$
160,450
|
Pro forma hotel EBITDA Margin
|
37.0%
|
|
38.6%
|
|
37.6%
|
|
39.3%
|
|
Reconciliations
of Non-GAAP financial measures to comparable GAAP financial
measures
|
|
|
|
|
|
|
|
|
Revenue:
|
|
|
|
|
|
|
|
Total
revenues
|
$
136,587
|
|
$
118,336
|
|
$
383,632
|
|
$
363,613
|
Total revenues from
acquisitions (1)
|
200
|
|
25,877
|
|
35,061
|
|
80,717
|
Total revenues from
dispositions (2)
|
(418)
|
|
(8,840)
|
|
(13,404)
|
|
(36,226)
|
Pro forma total
revenues
|
136,369
|
|
135,373
|
|
405,289
|
|
408,104
|
|
|
|
|
|
|
|
|
Hotel Operating
Expenses:
|
|
|
|
|
|
|
|
Total hotel operating
expenses
|
86,070
|
|
73,530
|
|
240,773
|
|
224,425
|
Total hotel operating
expenses from acquisitions (1)
|
206
|
|
15,845
|
|
21,938
|
|
48,691
|
Total hotel operating
expenses from dispositions (2)
|
(365)
|
|
(6,252)
|
|
(9,704)
|
|
(25,462)
|
Pro forma total
hotel operating expenses
|
85,911
|
|
83,123
|
|
253,007
|
|
247,654
|
|
|
|
|
|
|
|
|
Hotel
EBITDA:
|
|
|
|
|
|
|
|
Operating
income
|
$
22,373
|
|
$
21,427
|
|
$
65,455
|
|
$
67,729
|
Loss on impairment of
assets
|
-
|
|
577
|
|
-
|
|
577
|
Hotel property
acquisition costs
|
-
|
|
527
|
|
354
|
|
2,809
|
Corporate general and
administrative expenses
|
4,550
|
|
4,388
|
|
14,998
|
|
14,358
|
Depreciation and
amortization
|
23,594
|
|
17,887
|
|
62,052
|
|
53,715
|
Hotel
EBITDA
|
50,517
|
|
44,806
|
|
142,859
|
|
139,188
|
Hotel EBITDA from
acquisitions (1)
|
(6)
|
|
10,032
|
|
13,123
|
|
32,026
|
Hotel EBITDA from
dispositions (2)
|
(53)
|
|
(2,588)
|
|
(3,700)
|
|
(10,764)
|
Pro forma hotel
EBITDA
|
$
50,458
|
|
$
52,250
|
|
$
152,282
|
|
$
160,450
|
|
|
(1)
|
Pro forma
information includes operating results for 79 hotels owned as of
September 30, 2017 as if all such hotels had been owned by the
Company since January 1, 2016. For hotels acquired by the
Company after January 1, 2016 (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, 2016 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.
|
|
|
(2)
|
For hotels sold by
the Company between January 1, 2016 and September 30, 2017 (the
"Disposed Hotels"), the pro forma information excludes the
financial results of each of the Disposed Hotels for the period of
ownership by the Company from January 1, 2016 through the date that
the Disposed Hotels were sold by the Company.
|
SUMMIT HOTEL
PROPERTIES, INC.
Pro Forma Hotel
Operating Data
(Unaudited)
(Dollars in
thousands, except operating metrics)
|
|
|
2016
|
|
2017
|
|
Trailing
Twelve
Months Ended
Sept 30, 2017
|
Pro Forma
Operating Data (1) (2)
|
Q4
|
|
Q1
|
|
Q2
|
|
Q3
|
|
|
|
|
|
|
|
|
|
|
|
Pro forma room
revenue
|
$
112,523
|
|
$
120,174
|
|
$
129,900
|
|
$
127,025
|
|
$
489,622
|
Pro forma other hotel
operations revenue
|
8,596
|
|
9,045
|
|
9,802
|
|
9,344
|
|
36,787
|
Pro forma total
revenues
|
121,119
|
|
129,219
|
|
139,702
|
|
136,369
|
|
526,409
|
Pro forma total hotel
operating expenses
|
77,110
|
|
81,470
|
|
85,627
|
|
85,911
|
|
330,118
|
Pro forma hotel
EBITDA
|
$
44,009
|
|
$
47,749
|
|
$
54,075
|
|
$
50,458
|
|
$
196,291
|
Pro forma hotel
EBITDA Margin
|
36.3%
|
|
37.0%
|
|
38.7%
|
|
37.0%
|
|
37.3%
|
|
|
|
|
|
|
|
|
|
|
Pro Forma
Statistics (1) (2)
|
|
|
|
|
|
|
|
|
|
Rooms
occupied
|
774,433
|
|
787,870
|
|
856,406
|
|
857,975
|
|
3,276,684
|
Rooms
available
|
1,065,636
|
|
1,043,100
|
|
1,054,687
|
|
1,066,280
|
|
4,229,703
|
Occupancy
|
72.7%
|
|
75.5%
|
|
81.2%
|
|
80.5%
|
|
77.5%
|
ADR
|
$
145.30
|
|
$
152.53
|
|
$
151.68
|
|
$
148.05
|
|
$
149.43
|
RevPAR
|
$
105.59
|
|
$
115.21
|
|
$
123.16
|
|
$
119.13
|
|
$
115.76
|
|
|
|
|
|
|
|
|
|
|
Actual
Statistics
|
|
|
|
|
|
|
|
|
|
Rooms
occupied
|
737,390
|
|
761,358
|
|
813,577
|
|
860,672
|
|
3,172,997
|
Rooms
Available
|
1,002,482
|
|
990,913
|
|
986,998
|
|
1,069,100
|
|
4,049,493
|
Occupancy
|
73.6%
|
|
76.8%
|
|
82.4%
|
|
80.5%
|
|
78.4%
|
ADR
|
$
139.16
|
|
$
144.94
|
|
$
148.13
|
|
$
147.84
|
|
$
145.20
|
RevPAR
|
$
102.36
|
|
$
111.36
|
|
$
122.10
|
|
$
119.02
|
|
$
113.77
|
|
Reconciliations
of non-GAAP financial measures to comparable GAAP financial
measures
|
|
Revenue:
|
|
|
|
|
|
|
|
|
|
Total
revenues
|
$
110,322
|
|
$
117,989
|
|
$
129,056
|
|
$
136,587
|
|
$
493,954
|
Total revenues from
acquisitions (1)
|
18,927
|
|
19,965
|
|
14,895
|
|
200
|
|
53,987
|
Total revenues from
dispositions (2)
|
(8,130)
|
|
(8,735)
|
|
(4,249)
|
|
(418)
|
|
(21,532)
|
Pro forma total
revenues
|
$
121,119
|
|
$
129,219
|
|
$
139,702
|
|
$
136,369
|
|
$
526,409
|
|
|
|
|
|
|
|
|
|
|
Hotel Operating
Expenses:
|
|
|
|
|
|
|
|
|
|
Total hotel operating
expenses
|
71,256
|
|
75,204
|
|
79,499
|
|
86,070
|
|
312,029
|
Total hotel operating
expenses from acquisitions (1)
|
11,691
|
|
12,472
|
|
9,260
|
|
206
|
|
33,629
|
Total hotel operating
expenses from dispositions (2)
|
(5,837)
|
|
(6,206)
|
|
(3,132)
|
|
(365)
|
|
(15,540)
|
Total pro forma
hotel operating expenses
|
77,110
|
|
81,470
|
|
85,627
|
|
85,911
|
|
330,118
|
|
|
|
|
|
|
|
|
|
|
Hotel
EBITDA:
|
|
|
|
|
|
|
|
|
|
Operating
income
|
$
14,758
|
|
$
18,567
|
|
$
24,515
|
|
$
22,373
|
|
$
80,213
|
Hotel property
acquisition costs
|
683
|
|
354
|
|
-
|
|
-
|
|
1,037
|
Corporate general and
administrative expenses
|
4,934
|
|
5,138
|
|
5,310
|
|
4,550
|
|
19,932
|
Depreciation and
amortization
|
18,691
|
|
18,726
|
|
19,732
|
|
23,594
|
|
80,743
|
Hotel
EBITDA
|
39,066
|
|
42,785
|
|
49,557
|
|
50,517
|
|
181,925
|
Hotel EBITDA from
acquisitions (1)
|
7,236
|
|
7,493
|
|
5,635
|
|
(6)
|
|
20,358
|
Hotel EBITDA from
dispositions (2)
|
(2,293)
|
|
(2,529)
|
|
(1,117)
|
|
(53)
|
|
(5,992)
|
Pro forma hotel
EBITDA
|
$
44,009
|
|
$
47,749
|
|
$
54,075
|
|
$
50,458
|
|
$
196,291
|
|
|
(1)
|
Pro forma
information includes operating results for 79 hotels owned as of
September 30, 2017 as if all such hotels had been owned by the
Company since October 1, 2016. For hotels acquired by the
Company after October 1, 2016 (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 October 1, 2016 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.
|
|
|
(2)
|
For hotels sold by
the Company between October 1, 2016 and September 30, 2017 (the
"Disposed Hotels"), the pro forma information excludes the
financial results of each of the Disposed Hotels for the period of
ownership by the Company from October 1, 2016 through the date that
the Disposed Hotels were sold by the Company.
|
SUMMIT HOTEL
PROPERTIES, INC.
Pro Forma and
Same-Store Data
(Unaudited)
|
|
|
For the Three
Months Ended
September 30,
|
|
For the Nine
Months Ended
September 30,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Pro Forma
1 (79 hotels)
|
|
|
|
|
|
|
|
Rooms
occupied
|
857,975
|
|
837,628
|
|
2,502,251
|
|
2,497,953
|
Rooms
available
|
1,066,280
|
|
1,065,946
|
|
3,164,067
|
|
3,167,865
|
Occupancy
|
80.5%
|
|
78.6%
|
|
79.1%
|
|
78.9%
|
ADR
|
$
148.05
|
|
$
149.77
|
|
$
150.70
|
|
$
151.31
|
RevPAR
|
$
119.13
|
|
$
117.69
|
|
$
119.18
|
|
$
119.32
|
|
|
|
|
|
|
|
|
Occupancy
change
|
2.4%
|
|
|
|
0.3%
|
|
|
ADR
change
|
-1.1%
|
|
|
|
-0.4%
|
|
|
RevPAR
change
|
1.2%
|
|
|
|
-0.1%
|
|
|
|
|
For the Three
Months Ended
September 30,
|
|
For the Nine
Months Ended
September 30,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Same-Store
2 (65 hotels)
|
|
|
|
|
|
|
|
Rooms
occupied
|
670,849
|
|
657,474
|
|
1,971,825
|
|
1,973,084
|
Rooms
available
|
832,692
|
|
832,048
|
|
2,470,920
|
|
2,478,056
|
Occupancy
|
80.6%
|
|
79.0%
|
|
79.8%
|
|
79.6%
|
ADR
|
$
142.80
|
|
$
144.77
|
|
$
145.20
|
|
$
146.66
|
RevPAR
|
$
115.04
|
|
$
114.39
|
|
$
115.87
|
|
$
116.78
|
|
|
|
|
|
|
|
|
Occupancy
change
|
2.0%
|
|
|
|
0.2%
|
|
|
ADR
change
|
-1.4%
|
|
|
|
-1.0%
|
|
|
RevPAR
change
|
0.6%
|
|
|
|
-0.8%
|
|
|
|
|
(1)
|
Pro forma
information includes operating results for 79 hotels owned as of
September 30, 2017, as if each hotel had been owned by the Company
since January 1, 2016. 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 65 hotels owned by the
Company as of January 1, 2016, and at all times during the three
and nine months ended September 30, 2017, and 2016.
|
SUMMIT HOTEL
PROPERTIES, INC.
Reconciliation of Net Income to Non-GAAP Measures – Funds From
Operations for Financial Outlook
(Unaudited)
(Amounts in
thousands except per share and unit)
|
|
|
For the Three
Months Ending
December 31, 2017
|
|
For the Year
Ending
December 31, 2017
|
|
Low
|
|
High
|
|
Low
|
|
High
|
Net
income
|
$
6,300
|
|
$
9,300
|
|
$
95,900
|
|
$
98,900
|
Preferred
dividends
|
(4,200)
|
|
(4,200)
|
|
(16,800)
|
|
(16,800)
|
Net income
applicable to common shares and units
|
2,100
|
|
5,100
|
|
79,100
|
|
82,100
|
Net income per
common share and unit
|
$
0.02
|
|
$
0.05
|
|
$
0.79
|
|
$
0.82
|
|
|
|
|
|
|
|
|
Real estate-related
depreciation
|
22,900
|
|
22,900
|
|
84,700
|
|
84,700
|
Gain on disposal of
assets
|
-
|
|
-
|
|
(43,500)
|
|
(43,500)
|
FFO applicable to
common shares and units
|
25,000
|
|
28,000
|
|
120,300
|
|
123,300
|
FFO per common
share and unit
|
$
0.24
|
|
$
0.27
|
|
$
1.20
|
|
$
1.23
|
|
|
|
|
|
|
|
|
Amortization of
deferred financing costs
|
600
|
|
600
|
|
2,100
|
|
2,100
|
Amortization of
franchise fees
|
100
|
|
100
|
|
400
|
|
400
|
Equity-based
compensation
|
1,500
|
|
1,500
|
|
6,000
|
|
6,000
|
Hotel property
acquisition costs
|
-
|
|
-
|
|
400
|
|
400
|
Debt transaction
costs
|
-
|
|
-
|
|
200
|
|
200
|
Loss from net
casualty recoveries
|
-
|
|
-
|
|
400
|
|
400
|
Adjusted Funds
From Operations
|
$
27,200
|
|
$
30,200
|
|
$
129,800
|
|
$
132,800
|
AFFO per common
share and unit
|
$
0.26
|
|
$
0.29
|
|
$
1.29
|
|
$
1.32
|
|
|
|
|
|
|
|
|
Weighted average
diluted common units (1)
|
104,200
|
|
104,200
|
|
100,300
|
|
100,300
|
|
|
(1)
|
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.
|
Non-GAAP Financial Measures
Funds From Operations ("FFO") and Adjusted FFO
("AFFO")
As defined by the National Association of Real Estate Investment
Trusts ("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. Unless otherwise indicated, we present FFO
applicable to our common shares and common units. We present
FFO because we consider it 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 when reporting their
results. FFO is 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 excludes depreciation and amortization related to real
estate assets, gains and losses from real property dispositions and
impairment losses on real estate assets, it provides a performance
measure that, when compared year over year, reflects 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 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 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. References to FFO are based on our computation
of FFO and not the computation of NAREIT-defined FFO unless
otherwise noted.
We further adjust FFO for certain additional items that are not
included in the definition of FFO, such as hotel transaction and
pursuit costs, equity-based compensation, loan transaction costs,
prepayment penalties and certain other expenses, which we refer to
as AFFO. We believe that AFFO provides investors with another
financial measure that may facilitate comparisons of operating
performance between periods and between REITs.
We caution investors that amounts presented in accordance with
our definitions of FFO and AFFO may not be comparable to similar
measures disclosed by other companies, since not all companies
calculate these non-GAAP measures in the same manner. FFO and AFFO
should be considered along with, but not as an alternative to, net
income (loss) as a measure of our operating performance. FFO and
AFFO 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 FFO and AFFO 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 GAAP measure such as net income
(loss). Above we have included a quantitative reconciliation of FFO
and AFFO to the most directly comparable GAAP financial performance
measure, which is net income (loss). Dollar amounts in such
reconciliation are in thousands.
EBITDA, Adjusted EBITDA, and Hotel EBITDA
EBITDA represents net income or loss, excluding (i) interest,
(ii) income tax expense and (iii) depreciation and amortization. We
believe EBITDA is useful to investors 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. Our management also uses EBITDA as one measure
in determining the value of acquisitions and dispositions. We
further adjust EBITDA by adding back hotel transaction and pursuit
costs, equity-based compensation, impairment losses, and certain
other nonrecurring expenses. We believe that adjusted EBITDA
provides investors with another financial measure that may
facilitate comparisons of operating performance between periods and
between REITs.
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, adjusted EBITDA, 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, adjusted EBITDA, and hotel EBITDA should not
be considered as an alternative measure of our net income (loss) or
operating performance. EBITDA, adjusted EBITDA, 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, adjusted EBITDA,
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, adjusted
EBITDA and hotel EBITDA to the most directly comparable GAAP
financial performance measure, which is net income (loss) and
operating income (loss).
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SOURCE Summit Hotel Properties, Inc.