Operating Income of $16.5 Million
Adjusted EBITDAre Reaches $46.3 Million; Adjusted FFO Per Share of
$0.22
Full Year 2023 Adjusted EBITDAre and Adjusted
FFO Guidance Midpoint Increased
AUSTIN,
Texas, Nov. 1, 2023 /PRNewswire/ -- Summit
Hotel Properties, Inc. (NYSE: INN) (the "Company"), today announced
results for the three and nine months ended September 30, 2023.
"We are pleased with our financial results for the third quarter
as stable top-line trends accelerated in September driven by strong
urban and midweek demand. Operating expenses grew less than
one percent on a per occupied room basis which enabled us to
maintain gross operating profit margin compared to a year ago
despite cost inflationary headwinds. Given our strong third
quarter financial results and the encouraging operating trends that
have continued into October, we are increasing the midpoint of our
adjusted EBITDA and adjusted FFO guidance range for the full year,"
said Jonathan P. Stanner, the
Company's President and Chief Executive Officer.
"Furthermore, we are proud of the continued progress on our various
balance sheet initiatives during the quarter, including the
refinancing of our $200 million joint
venture credit facility during the quarter which maintains existing
pricing. We now have no material debt maturities until 2025,
a weighted average cost of debt less than 4.8 percent and,
inclusive of preferred equity, approximately 80 percent of our
balance sheet has fixed rate interest rates," commented Mr.
Stanner.
Third Quarter 2023 Summary
- Net Loss: Net loss attributable to common
stockholders was $5.4 million, or
$0.05 per diluted share, compared to
a net loss of $0.5 million, or
$0.00 per diluted share, for the
third quarter of 2022.
- Pro Forma RevPAR: Pro forma RevPAR increased 2.4
percent to $116.91 compared to the
third quarter of 2022. Pro forma ADR decreased 0.2 percent to
$159.35 compared to the same period
in 2022, and pro forma occupancy increased 2.6 percent to 73.4
percent.
- Same Store RevPAR: Same Store RevPAR increased 2.4
percent to $117.85 compared to the
third quarter of 2022. Same store ADR slightly increased to
$159.83, and same store occupancy
increased 2.3 percent to 73.7 percent.
- Pro Forma Hotel EBITDA (1): Pro forma
hotel EBITDA increased 2.6 percent to $62.3
million from $60.7 million in
the same period in 2022. Pro forma hotel EBITDA margin contracted
to 34.3 percent from 34.5 percent in the same period of 2022.
- Same Store Hotel EBITDA (1): Same store
hotel EBITDA increased 2.8 percent to $61.4
million from $59.7 million in
the same period in 2022. Same store hotel EBITDA margin contracted
to 35.4 percent from 35.5 percent in the same period of 2022.
- Adjusted EBITDAre (1): Adjusted
EBITDAre decreased 1.9 percent to $46.3 million from $47.2
million in the third quarter of 2022.
- Adjusted FFO (1): Adjusted FFO was
$26.5 million, or $0.22 per diluted share and unit, compared to
$30.9 million, or $0.25 per diluted share and unit, in the third
quarter of 2022.
The Company's results for the three and nine months ended
September 30, 2023, are as follows
(in thousands, except per share amounts):
|
For the Three Months
Ended
September 30,
|
|
For the Nine Months
Ended
September 30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
(unaudited)
|
|
Net loss attributable
to common stockholders
|
$
(5,438)
|
|
$
(517)
|
|
$ (11,419)
|
|
$
(4,954)
|
|
Net loss per diluted
share
|
$
(0.05)
|
|
$
(0.00)
|
|
$
(0.11)
|
|
$
(0.05)
|
|
Total
revenues
|
$ 181,816
|
|
$ 178,252
|
|
$ 558,692
|
|
$ 503,369
|
|
EBITDAre
(1)
|
$
55,359
|
|
$
54,935
|
|
$ 172,301
|
|
$ 156,111
|
|
Adjusted
EBITDAre (1)
|
$
46,315
|
|
$
47,218
|
|
$ 143,580
|
|
$ 134,731
|
|
FFO
(1)
|
$
22,669
|
|
$
28,085
|
|
$
72,592
|
|
$
69,711
|
|
Adjusted FFO
(1)
|
$
26,546
|
|
$
30,867
|
|
$
85,891
|
|
$
83,630
|
|
FFO per diluted share
and unit (1)
|
$
0.19
|
|
$
0.23
|
|
$
0.59
|
|
$
0.57
|
|
Adjusted FFO per
diluted share and unit (1)
|
$
0.22
|
|
$
0.25
|
|
$
0.70
|
|
$
0.69
|
|
|
|
|
|
|
|
|
|
Pro Forma
(2)
|
|
|
|
|
|
|
|
|
RevPAR
|
$
116.91
|
|
$
114.22
|
|
$
121.75
|
|
$
112.92
|
|
RevPAR
Growth
|
2.4 %
|
|
|
|
7.8 %
|
|
|
|
Hotel EBITDA
|
$
62,300
|
|
$
60,715
|
|
$ 198,540
|
|
$ 183,277
|
|
Hotel EBITDA
margin
|
34.3 %
|
|
34.5 %
|
|
35.5 %
|
|
35.7 %
|
|
Hotel EBITDA margin
growth
|
-25 bps
|
|
|
|
-25 bps
|
|
|
|
|
|
|
|
|
|
|
|
Same Store
(3)
|
|
|
|
|
|
|
|
|
RevPAR
|
$
117.85
|
|
$
115.14
|
|
$
120.99
|
|
$
112.29
|
|
RevPAR
Growth
|
2.4 %
|
|
|
|
7.7 %
|
|
|
|
Hotel EBITDA
|
$
61,360
|
|
$
59,707
|
|
$ 188,810
|
|
$ 174,768
|
|
Hotel EBITDA
margin
|
35.4 %
|
|
35.5 %
|
|
35.8 %
|
|
35.9 %
|
|
Hotel EBITDA margin
growth
|
-12 bps
|
|
|
|
-10 bps
|
|
|
|
|
|
(1)
|
See tables later in
this press release for a discussion and reconciliation of net 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 101 hotels owned as of
September 30, 2023, as if each hotel had been owned by the Company
since January 1, 2022, 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, 2022, 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 95 hotels
owned as of September 30, 2023, and at all times during the three
and nine months ended September 30, 2023, and 2022.
|
Year-to-Date 2023 Summary
- Net Loss: Net loss attributable to common
stockholders was $11.4 million, or
$0.11 per diluted share, compared to
a net loss of $5.0 million, or
$0.05 per diluted share, in the same
period of 2022.
- Pro Forma RevPAR: Pro forma RevPAR increased
7.8 percent to $121.75 compared to
the same period of 2022. Pro forma ADR increased 4.0 percent to
$167.22, and pro forma occupancy
increased 3.7 percent to 72.8 percent.
- Same Store RevPAR: Same Store RevPAR
increased 7.7 percent to $120.99
compared to the same period of 2022. Same store ADR increased 4.1
percent to $166.01, and same store
occupancy increased 3.5 percent to 72.9 percent.
- Pro Forma Hotel EBITDA (1): Pro forma
hotel EBITDA increased 8.3 percent to $198.5
million from $183.3 million,
and pro forma hotel EBITDA margin contracted to 35.5 percent from
35.7 percent in the same period of 2022.
- Same Store Hotel EBITDA (1): Same store
hotel EBITDA increased 8.0 percent to $188.8
million from $174.8 million,
and same store hotel EBITDA margin contracted to 35.8 percent from
35.9 percent in the same period of 2022.
- Adjusted EBITDAre (1): Adjusted
EBITDAre increased 6.6 percent to $143.6 million from $134.7
million, in the same period of 2022.
- Adjusted FFO (1): Adjusted FFO
increased 2.7 percent to $85.9
million, or $0.70 per diluted
share and unit, from $83.6 million,
or $0.69 per diluted share and unit,
in the same period of 2022.
Pending Transaction Activity
The Company has entered into a contract to sell the
123-guestroom Hyatt Place Baltimore / Owings Mills. The gross sales
price for the pending disposition is $8.3
million and the transaction is expected to close in the
fourth quarter of 2023. The sales price for the transaction
represents a 4.6 percent capitalization rate based on net operating
income after a 4 percent FF&E reserve for the trailing 12
months ended September 30, 2023. The
Company expects to forego future near-term required capital
expenditures at the hotel as a result of the sale, which would
reduce the all-in capitalization rate to approximately 2.9
percent.
The buyer's earnest money is non-refundable as of November 1, 2023, however the Company can make no
assurances that it will be able to complete the sale transaction
based on the current contractual terms or at all.
Capital Markets & Balance Sheet
On September 19, 2023, the
Company's joint venture with GIC successfully completed the
refinancing of its $200 million
senior credit facility (the "Credit Facility"), which is comprised
of a $125 million revolving credit
facility (the "Revolver") and a $75
million term loan (the "Term Loan"). The new credit
agreement provides for a fully extended maturity date of
September 2028 for both the Revolver
and Term Loan. The interest rate pricing from the prior
credit facility has been maintained at SOFR + 215 basis points for
the Revolver and SOFR + 210 basis points for the Term Loan.
Other terms of the agreement are similar to the joint venture's
previous credit facility agreement. As a result of this
refinancing, the Company has no material debt maturities until the
first quarter of 2025 and its average length to maturity is over
three years when including extension options. Approximately
80 percent of the Company's pro rata debt and preferred equity
capital has a fixed interest rate after giving effect to interest
rate derivative agreements.
On a pro rata basis, the Company currently has the following
outstanding indebtedness and liquidity available:
- Outstanding debt of $1.1 billion
with a weighted average interest rate of 4.75 percent. After giving
effect to interest rate derivative agreements, $849.4 million, or 74 percent, of our outstanding
debt had an average fixed interest rate, and $293.9 million, or 26 percent, had a variable
interest rate.
- Unrestricted cash and cash equivalents of $48.9 million.
- Total liquidity of $435.4
million, including unrestricted cash and cash equivalents
and revolving credit facility availability.
Common and Preferred Dividend Declaration
On October 26, 2023, the Company
declared a quarterly cash dividend of $0.06 per share on its common stock and per
common unit of limited partnership interest in Summit Hotel OP, LP.
The quarterly dividend of $0.06 per
share represents an annualized dividend yield of 4.3 percent based
on the closing price of shares of the common stock on October 31, 2023.
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 November 30,
2023, to holders of record as of November 16, 2023.
2023 Outlook
The Company is updating its previously provided outlook for the
full year 2023 based on 101 lodging assets, 57 of which are wholly
owned as of November 1, 2023. The
updated outlook does not contemplate the pending disposition of the
Hyatt Place Owings Mills expected to close late in the fourth
quarter of 2023. There are no additional acquisitions,
dispositions, or capital markets activities assumed in the
Company's full year 2023 outlook beyond the transactions already
completed.
|
|
FYE 2023
Outlook
|
|
|
Low
|
|
High
|
|
Variance to
Prior Midpoint
|
|
% Change to
Prior Midpoint
|
|
Pro Forma RevPAR
(1)
|
|
$
119.25
|
|
$
121.00
|
|
$
-
|
|
-
|
|
Pro Forma RevPAR
Growth (1)
|
|
6.25 %
|
|
7.75 %
|
|
-
|
|
-
|
|
Adjusted
EBITDAre
|
|
$
186,500
|
|
$ 191,600
|
|
$
1,050
|
|
0.6 %
|
|
Adjusted
FFO
|
|
$ 109,000
|
|
$ 114,200
|
|
$
1,450
|
|
1.3 %
|
|
Adjusted FFO per
Diluted Unit
|
|
$
0.89
|
|
$
0.93
|
|
$
0.01
|
|
1.2 %
|
|
Capital Expenditures,
Pro Rata
|
|
$
65,000
|
|
$
75,000
|
|
$
-
|
|
-
|
|
|
|
(1)
|
All pro forma
information includes operating and financial results for 101
lodging assets owned as of November 1, 2023, as if each property
had been owned by the Company since January 1, 2022, and will
continue to be owned through the entire year ending December 31,
2023. As a result, the pro forma information includes operating and
financial results for lodging assets acquired since January 1,
2022, which may include periods prior to the Company's ownership.
Pro forma and non-GAAP financial measures are
unaudited.
|
Third Quarter 2023 Earnings Conference Call
The Company will conduct its quarterly conference call on
Thursday, November 2, 2023, at
1:00 PM ET.
- To access the conference call, please pre-register using
this link. Registrants will receive a confirmation with
dial-in details.
- 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
January 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
properties with efficient operating models primarily in the upscale
segment of the lodging industry. As of November 1, 2023, the Company's portfolio
consisted of 101 assets, 57 of which are wholly owned, with a total
of 15,035 guestrooms located in 24 states.
For additional information, please visit the Company's
website, www.shpreit.com, and follow on X, formerly Twitter,
at @SummitHotel_INN and on Facebook
at facebook.com/SummitHotelProperties.
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, 2022,
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
|
|
(In
thousands)
|
|
|
September 30,
2023
|
|
December 31,
2022
|
|
(unaudited)
|
|
|
|
ASSETS
|
|
|
|
|
Investments in lodging
property, net
|
$ 2,831,247
|
|
$ 2,841,856
|
|
Assets held for sale,
net
|
9,163
|
|
29,166
|
|
Cash and cash
equivalents
|
55,307
|
|
51,255
|
|
Restricted
cash
|
11,268
|
|
10,553
|
|
Right-of-use assets,
net
|
35,215
|
|
35,023
|
|
Trade receivables,
net
|
24,209
|
|
21,015
|
|
Prepaid expenses and
other
|
12,973
|
|
8,378
|
|
Deferred charges,
net
|
7,066
|
|
7,074
|
|
Other
assets
|
28,741
|
|
17,950
|
|
Total
assets
|
$ 3,015,189
|
|
$ 3,022,270
|
|
LIABILITIES,
REDEEMABLE
NON-CONTROLLING INTERESTS AND EQUITY
|
|
|
|
|
Liabilities:
|
|
|
|
|
Debt, net of debt
issuance costs
|
$ 1,444,637
|
|
$ 1,451,796
|
|
Lease liabilities,
net
|
26,102
|
|
25,484
|
|
Accounts
payable
|
6,880
|
|
5,517
|
|
Accrued expenses and
other
|
92,209
|
|
81,304
|
|
Total
liabilities
|
1,569,828
|
|
1,564,101
|
|
|
|
|
|
Redeemable
non-controlling interests
|
50,219
|
|
50,219
|
|
Equity:
|
|
|
|
|
Total stockholders'
equity
|
942,096
|
|
959,813
|
|
Non-controlling
interests
|
453,046
|
|
448,137
|
|
Total
equity
|
1,395,142
|
|
1,407,950
|
|
Total liabilities,
redeemable non-controlling interests and equity
|
$ 3,015,189
|
|
$ 3,022,270
|
|
Summit Hotel
Properties, Inc.
|
|
Condensed
Consolidated Statements of Operations
|
|
(Unaudited)
|
|
(In thousands,
except per share amounts)
|
|
|
For the Three Months
Ended
September 30,
|
|
For the Nine Months
Ended
September 30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
Revenues:
|
|
|
|
|
|
|
|
|
Room
|
$ 161,712
|
|
$ 160,133
|
|
$ 498,982
|
|
$ 455,747
|
|
Food and
beverage
|
9,949
|
|
8,854
|
|
30,848
|
|
22,180
|
|
Other
|
10,155
|
|
9,265
|
|
28,862
|
|
25,442
|
|
Total
revenues
|
181,816
|
|
178,252
|
|
558,692
|
|
503,369
|
|
Expenses:
|
|
|
|
|
|
|
|
|
Room
|
37,510
|
|
37,525
|
|
112,207
|
|
101,718
|
|
Food and
beverage
|
7,684
|
|
7,060
|
|
23,679
|
|
17,187
|
|
Other lodging property
operating expenses
|
55,826
|
|
54,883
|
|
169,780
|
|
154,871
|
|
Property taxes,
insurance and other
|
14,369
|
|
13,373
|
|
43,308
|
|
40,036
|
|
Management
fees
|
4,177
|
|
4,308
|
|
13,974
|
|
13,145
|
|
Depreciation and
amortization
|
37,882
|
|
38,130
|
|
112,300
|
|
112,462
|
|
Corporate general and
administrative
|
8,126
|
|
6,532
|
|
25,225
|
|
23,743
|
|
Transaction
costs
|
-
|
|
56
|
|
24
|
|
737
|
|
Recoveries of credit
losses
|
(250)
|
|
(850)
|
|
(500)
|
|
(1,100)
|
|
Total
expenses
|
165,324
|
|
161,017
|
|
499,997
|
|
462,799
|
|
(Loss) gain on
disposal of assets, net
|
(16)
|
|
(5)
|
|
(336)
|
|
20,479
|
|
Operating
income
|
16,476
|
|
17,230
|
|
58,359
|
|
61,049
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
Interest
expense
|
(22,020)
|
|
(17,645)
|
|
(65,177)
|
|
(46,202)
|
|
Interest
income
|
474
|
|
65
|
|
1,190
|
|
1,461
|
|
Other income (loss),
net
|
661
|
|
(481)
|
|
458
|
|
1,638
|
|
Total other expense,
net
|
(20,885)
|
|
(18,061)
|
|
(63,529)
|
|
(43,103)
|
|
(Loss) income from
continuing operations before income taxes
|
(4,409)
|
|
(831)
|
|
(5,170)
|
|
17,946
|
|
Income tax
expense
|
(1,360)
|
|
(210)
|
|
(1,679)
|
|
(4,647)
|
|
Net (loss)
income
|
(5,769)
|
|
(1,041)
|
|
(6,849)
|
|
13,299
|
|
Loss (income)
attributable to non-controlling interests
|
4,955
|
|
5,148
|
|
9,306
|
|
(4,481)
|
|
Net (loss) income
attributable to Summit Hotel Properties, Inc. before preferred
dividends and distributions
|
(814)
|
|
4,107
|
|
2,457
|
|
8,818
|
|
Distributions to and
accretion of redeemable non-controlling interests
|
(656)
|
|
(656)
|
|
(1,970)
|
|
(1,866)
|
|
Preferred
dividends
|
(3,968)
|
|
(3,968)
|
|
(11,906)
|
|
(11,906)
|
|
Net loss attributable
to common stockholders
|
$
(5,438)
|
|
$
(517)
|
|
$ (11,419)
|
|
$
(4,954)
|
|
Loss per
share:
|
|
|
|
|
|
|
|
|
Basic and
Diluted
|
$
(0.05)
|
|
$
(0.00)
|
|
$
(0.11)
|
|
$
(0.05)
|
|
Weighted-average common
shares outstanding:
|
|
|
|
|
|
|
|
|
Basic and
Diluted
|
105,650
|
|
105,232
|
|
105,510
|
|
105,110
|
|
Summit Hotel
Properties, Inc.
|
|
Reconciliation of
Net Loss 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,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
Net (loss)
income
|
$
(5,769)
|
|
$
(1,041)
|
|
$
(6,849)
|
|
$
13,299
|
|
Preferred
dividends
|
(3,968)
|
|
(3,968)
|
|
(11,906)
|
|
(11,906)
|
|
Distributions to and
accretion of redeemable non-controlling interests
|
(656)
|
|
(656)
|
|
(1,970)
|
|
(1,866)
|
|
Loss (income) related
to non-controlling interests in consolidated joint
ventures
|
4,442
|
|
3,730
|
|
8,093
|
|
(5,219)
|
|
Net loss applicable
to Common Stock and Common Units
|
$
(5,951)
|
|
$
(1,935)
|
|
$ (12,632)
|
|
$
(5,692)
|
|
Real estate-related
depreciation
|
36,697
|
|
36,804
|
|
108,751
|
|
108,959
|
|
Loss (gain) on disposal
of assets and other dispositions, net
|
16
|
|
5
|
|
384
|
|
(20,479)
|
|
Adjustments related to
non-controlling interests in consolidated joint ventures
|
(8,093)
|
|
(6,789)
|
|
(23,911)
|
|
(13,077)
|
|
FFO applicable to
Common Stock and Common Units
|
$
22,669
|
|
$
28,085
|
|
$
72,592
|
|
$
69,711
|
|
Recoveries of credit
losses
|
(250)
|
|
(850)
|
|
(500)
|
|
(1,100)
|
|
Amortization of debt
issuance costs
|
1,594
|
|
1,413
|
|
4,379
|
|
4,238
|
|
Amortization of
franchise fees
|
153
|
|
167
|
|
439
|
|
504
|
|
Amortization of
intangible assets, net
|
911
|
|
892
|
|
2,733
|
|
2,732
|
|
Equity-based
compensation
|
1,867
|
|
1,231
|
|
5,913
|
|
7,070
|
|
Transaction costs and
other
|
-
|
|
56
|
|
24
|
|
737
|
|
Debt transaction
costs
|
90
|
|
1,131
|
|
352
|
|
1,166
|
|
Non-cash interest
income, net (1)
|
(134)
|
|
-
|
|
(397)
|
|
(113)
|
|
Non-cash lease expense,
net
|
106
|
|
115
|
|
368
|
|
374
|
|
Casualty losses,
net
|
380
|
|
750
|
|
1,851
|
|
1,054
|
|
Other non-cash items,
net
|
-
|
|
-
|
|
768
|
|
-
|
|
Adjustments related to
non-controlling interests in consolidated joint ventures
|
(840)
|
|
(2,123)
|
|
(2,631)
|
|
(2,743)
|
|
AFFO applicable to
Common Stock and Common Units
|
$
26,546
|
|
$
30,867
|
|
$
85,891
|
|
$
83,630
|
|
FFO per share of
Common Stock and Common Units
|
$
0.19
|
|
$
0.23
|
|
$
0.59
|
|
$
0.57
|
|
AFFO per share of
Common Stock and Common Units
|
$
0.22
|
|
$
0.25
|
|
$
0.70
|
|
$
0.69
|
|
Weighted-average
diluted shares of Common Stock and Common Units
|
|
|
|
|
|
|
|
|
FFO and AFFO
(2)
|
122,513
|
|
121,265
|
|
122,312
|
|
121,289
|
|
|
|
(1)
|
Non-cash interest
income relates to the amortization of the discount on certain notes
receivable. The discount on these notes receivable was recorded at
inception of the related loans based on the estimated value of the
embedded purchase options in the notes 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.
|
|
Summit Hotel
Properties, Inc.
|
|
Reconciliation of
Weighted Average Diluted Common Shares
|
|
(Unaudited)
|
|
(In
thousands)
|
|
|
For the Three Months
Ended
September 30,
|
|
For the Nine Months
Ended
September 30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
Weighted-average shares
of Common Stock outstanding
|
105,650
|
|
105,232
|
|
105,510
|
|
105,110
|
|
Dilutive effect of
unvested restricted stock awards
|
44
|
|
49
|
|
187
|
|
195
|
|
Dilutive effect of
Common Units of Operating Partnership
|
15,970
|
|
15,984
|
|
15,974
|
|
15,984
|
|
Dilutive effect of
shares of Common Stock issuable upon conversion of convertible
debt
|
24,801
|
|
24,086
|
|
24,557
|
|
24,086
|
|
Adjusted weighted
diluted shares of Common Stock
|
146,465
|
|
145,351
|
|
146,228
|
|
145,375
|
|
|
|
|
|
|
|
|
|
Non-GAAP adjustment for
dilutive effects of restricted stock awards
|
849
|
|
-
|
|
641
|
|
-
|
|
Non-GAAP adjustment for
dilutive effect of shares of Common Stock issuable upon conversion
of convertible debt
|
(24,801)
|
|
(24,086)
|
|
(24,557)
|
|
(24,086)
|
|
Non-GAAP weighted
diluted share of Common Stock and Common Units
|
122,513
|
|
121,265
|
|
122,312
|
|
121,289
|
|
Summit Hotel
Properties, Inc.
|
|
Reconciliation of
Net Loss to Non-GAAP Measures – EBITDAre
|
|
(Unaudited)
|
|
(In
thousands)
|
|
|
For the Three Months
Ended
September 30,
|
|
For the Nine Months
Ended
September 30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
Net (loss)
income
|
$
(5,769)
|
|
$
(1,041)
|
|
$
(6,849)
|
|
$
13,299
|
|
Depreciation and
amortization
|
37,882
|
|
38,130
|
|
112,300
|
|
112,462
|
|
Interest
expense
|
22,020
|
|
17,645
|
|
65,177
|
|
46,202
|
|
Interest
income
|
(150)
|
|
(14)
|
|
(390)
|
|
(20)
|
|
Income tax
expense
|
1,360
|
|
210
|
|
1,679
|
|
4,647
|
|
EBITDA
|
$
55,343
|
|
$
54,930
|
|
$
171,917
|
|
$
176,590
|
|
Loss (gain) on disposal
of assets and other dispositions, net
|
16
|
|
5
|
|
384
|
|
(20,479)
|
|
EBITDAre
|
$
55,359
|
|
$
54,935
|
|
$
172,301
|
|
$
156,111
|
|
Recoveries of credit
losses
|
(250)
|
|
(850)
|
|
(500)
|
|
(1,100)
|
|
Amortization of key
money liabilities
|
(121)
|
|
(144)
|
|
(378)
|
|
(267)
|
|
Equity-based
compensation
|
1,867
|
|
1,231
|
|
5,913
|
|
7,070
|
|
Transaction costs and
other
|
-
|
|
56
|
|
24
|
|
737
|
|
Debt transaction
costs
|
90
|
|
1,131
|
|
352
|
|
1,166
|
|
Non-cash interest
income, net (1)
|
(134)
|
|
-
|
|
(397)
|
|
(113)
|
|
Non-cash lease expense,
net
|
106
|
|
115
|
|
368
|
|
374
|
|
Casualty losses,
net
|
380
|
|
750
|
|
1,851
|
|
1,054
|
|
Loss (income) related
to non-controlling interests in consolidated joint
ventures
|
4,442
|
|
3,730
|
|
8,093
|
|
(5,219)
|
|
Other non-cash items,
net
|
-
|
|
-
|
|
713
|
|
-
|
|
Adjustments related to
non-controlling interests in consolidated joint ventures
|
(15,424)
|
|
(13,736)
|
|
(44,760)
|
|
(25,082)
|
|
Adjusted
EBITDAre
|
$
46,315
|
|
$
47,218
|
|
$
143,580
|
|
$
134,731
|
|
|
|
(1)
|
Non-cash interest
income relates to the amortization of the discount on certain notes
receivable. The discount on these notes receivable was recorded at
inception of the related loans based on the estimated value of the
embedded purchase options in the notes receivable.
|
|
Summit Hotel
Properties, Inc.
|
|
Pro Forma Hotel
Operating Data
|
|
(Unaudited)
|
|
(In
thousands)
|
|
|
For the Three Months
Ended
September 30,
|
|
For the Nine Months
Ended
September 30,
|
|
Pro Forma Operating
Data (1,2)
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
Pro forma room
revenue
|
$
161,713
|
|
$
157,960
|
|
$
499,694
|
|
$
461,743
|
|
Pro forma other hotel
operating revenue
|
20,104
|
|
17,964
|
|
59,602
|
|
51,016
|
|
Pro forma total
revenues
|
181,817
|
|
175,924
|
|
559,296
|
|
512,759
|
|
Pro forma total hotel
operating expenses
|
119,517
|
|
115,209
|
|
360,756
|
|
329,482
|
|
Pro forma hotel
EBITDA
|
$
62,300
|
|
$
60,715
|
|
$
198,540
|
|
$
183,277
|
|
Pro forma hotel
EBITDA Margin
|
34.3 %
|
|
34.5 %
|
|
35.5 %
|
|
35.7 %
|
|
|
|
|
|
|
|
|
|
Reconciliations of
Non-GAAP financial measures to comparable GAAP financial
measures
|
|
|
|
|
|
|
|
|
|
|
Revenue:
|
|
|
|
|
|
|
|
|
Total
revenues
|
$
181,816
|
|
$
178,252
|
|
$
558,692
|
|
$
503,369
|
|
Total revenues -
acquisitions (1)
|
(1)
|
|
1,934
|
|
4,715
|
|
21,091
|
|
Total revenues -
dispositions (2)
|
2
|
|
(4,262)
|
|
(4,111)
|
|
(11,701)
|
|
Pro forma total
revenues
|
181,817
|
|
175,924
|
|
559,296
|
|
512,759
|
|
|
|
|
|
|
|
|
|
Hotel Operating
Expenses:
|
|
|
|
|
|
|
|
|
Total hotel operating
expenses
|
119,566
|
|
117,149
|
|
362,948
|
|
326,957
|
|
Hotel operating
expenses - acquisitions (1)
|
(2)
|
|
1,131
|
|
2,277
|
|
12,585
|
|
Hotel operating
expenses - dispositions (2)
|
(47)
|
|
(3,071)
|
|
(4,469)
|
|
(10,060)
|
|
Pro forma hotel
operating expenses
|
119,517
|
|
115,209
|
|
360,756
|
|
329,482
|
|
|
|
|
|
|
|
|
|
Hotel
EBITDA:
|
|
|
|
|
|
|
|
|
Operating
income
|
16,476
|
|
17,230
|
|
58,359
|
|
61,049
|
|
Loss (gain) on disposal
of assets, net
|
16
|
|
5
|
|
336
|
|
(20,479)
|
|
Recoveries of credit
losses
|
(250)
|
|
(850)
|
|
(500)
|
|
(1,100)
|
|
Transaction
costs
|
-
|
|
56
|
|
24
|
|
737
|
|
Corporate general and
administrative
|
8,126
|
|
6,532
|
|
25,225
|
|
23,743
|
|
Depreciation and
amortization
|
37,882
|
|
38,130
|
|
112,300
|
|
112,462
|
|
Hotel
EBITDA
|
62,250
|
|
61,103
|
|
195,744
|
|
176,412
|
|
Hotel EBITDA -
acquisitions (1)
|
(938)
|
|
(205)
|
|
(7,292)
|
|
(3)
|
|
Hotel EBITDA -
dispositions (2)
|
49
|
|
(1,191)
|
|
358
|
|
(1,641)
|
|
Same store hotel
EBITDA
|
$
61,361
|
|
$
59,707
|
|
$
188,810
|
|
$
174,768
|
|
Hotel EBITDA -
acquisitions (3)
|
939
|
|
1,008
|
|
9,730
|
|
8,509
|
|
Pro forma hotel
EBITDA
|
$
62,300
|
|
$
60,715
|
|
$
198,540
|
|
$
183,277
|
|
|
|
|
|
|
|
|
|
|
(1)
|
For any hotels
acquired by the Company after January 1, 2022 (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 September 30, 2023 (the "Acquisition
Period") in determining same-store hotel EBITDA.
|
|
|
|
(2)
|
For hotels sold by
the Company between January 1, 2022, and September 30, 2023 (the
"Disposed Hotels"), the Company has excluded the financial results
of each of the Disposed Hotels for the period beginning on January
1, 2022, 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 101 hotels owned as of
September 30, 2023, as if all such hotels had been owned by the
Company since January 1, 2022. For hotels acquired by the Company
after January 1, 2022 (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, 2022, to
September 30, 2023. 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.
|
|
Summit Hotel
Properties, Inc.
|
|
Pro Forma Hotel
Operating Data
|
|
(Unaudited)
|
|
(In thousands,
except operating statistics)
|
|
|
2022
|
|
2023
|
|
Trailing
Twelve
|
|
Pro Forma Operating
Data (1,2)
|
Q4
|
|
Q1
|
|
Q2
|
|
Q3
|
|
Months
Ended
Sept 30, 2023
|
|
Pro forma room
revenue
|
$
152,776
|
|
$
164,144
|
|
$
173,837
|
|
$
161,713
|
|
$
652,470
|
|
Pro forma other hotel
operating revenue
|
18,597
|
|
19,225
|
|
20,273
|
|
20,104
|
|
78,199
|
|
Pro forma total
revenues
|
171,373
|
|
183,369
|
|
194,110
|
|
181,817
|
|
730,669
|
|
Pro forma total hotel
operating expenses
|
108,447
|
|
118,246
|
|
122,993
|
|
119,517
|
|
469,203
|
|
Pro forma hotel
EBITDA
|
$
62,926
|
|
$
65,123
|
|
$
71,117
|
|
$
62,300
|
|
$
261,466
|
|
Pro forma hotel
EBITDA Margin
|
36.7 %
|
|
35.5 %
|
|
36.6 %
|
|
34.3 %
|
|
35.8 %
|
|
|
|
|
|
|
|
|
|
|
|
Pro Forma Statistics
(1,2)
|
|
|
|
|
|
|
|
|
|
|
Rooms sold
|
948,793
|
|
940,790
|
|
1,032,690
|
|
1,014,851
|
|
3,937,124
|
|
Rooms
available
|
1,382,983
|
|
1,353,060
|
|
1,368,094
|
|
1,383,189
|
|
5,487,326
|
|
Occupancy
|
68.6 %
|
|
69.5 %
|
|
75.5 %
|
|
73.4 %
|
|
71.7 %
|
|
ADR
|
$
161.02
|
|
$
174.47
|
|
$
168.33
|
|
$
159.35
|
|
$
165.72
|
|
RevPAR
|
$
110.47
|
|
$
121.31
|
|
$
127.06
|
|
$
116.91
|
|
$
118.90
|
|
|
|
|
|
|
|
|
|
|
|
Actual
Statistics
|
|
|
|
|
|
|
|
|
|
|
Rooms sold
|
963,151
|
|
950,214
|
|
1,039,045
|
|
1,014,851
|
|
3,967,261
|
|
Rooms
available
|
1,410,358
|
|
1,380,060
|
|
1,376,796
|
|
1,383,189
|
|
5,550,403
|
|
Occupancy
|
68.3 %
|
|
68.9 %
|
|
75.5 %
|
|
73.4 %
|
|
71.5 %
|
|
ADR
|
$
159.50
|
|
$
171.63
|
|
$
167.64
|
|
$
159.35
|
|
$
164.50
|
|
RevPAR
|
$
108.92
|
|
$
118.18
|
|
$
126.51
|
|
$
116.91
|
|
$
117.58
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliations of
Non-GAAP financial measures to comparable GAAP financial
measures:
|
|
Revenue:
|
|
|
|
|
|
|
|
|
|
|
Total
revenues
|
$
172,326
|
|
$
182,383
|
|
$
194,493
|
|
$
181,816
|
|
$
731,018
|
|
Total revenues from
acquisitions (1)
|
2,090
|
|
3,438
|
|
1,278
|
|
(1)
|
|
6,805
|
|
Total revenues from
dispositions (2)
|
(3,043)
|
|
(2,452)
|
|
(1,661)
|
|
2
|
|
(7,154)
|
|
Pro forma total
revenues
|
171,373
|
|
183,369
|
|
194,110
|
|
181,817
|
|
730,669
|
|
|
|
|
|
|
|
|
|
|
|
Hotel Operating
Expenses:
|
|
|
|
|
|
|
|
|
|
|
Total hotel operating
expenses
|
110,277
|
|
119,518
|
|
123,864
|
|
119,566
|
|
473,225
|
|
Total hotel operating
expenses from acquisitions (1)
|
900
|
|
1,489
|
|
790
|
|
(2)
|
|
3,177
|
|
Total hotel operating
expenses from dispositions (2)
|
(2,730)
|
|
(2,761)
|
|
(1,661)
|
|
(47)
|
|
(7,199)
|
|
Pro forma total
hotel operating expenses
|
108,447
|
|
118,246
|
|
122,993
|
|
119,517
|
|
469,203
|
|
|
|
|
|
|
|
|
|
|
|
Hotel
EBITDA:
|
|
|
|
|
|
|
|
|
|
|
Operating
income
|
6,733
|
|
18,202
|
|
23,681
|
|
16,476
|
|
65,092
|
|
Loss on disposal of
assets and other dispositions, net
|
164
|
|
-
|
|
320
|
|
16
|
|
500
|
|
Loss on write down of
assets
|
10,420
|
|
-
|
|
-
|
|
-
|
|
10,420
|
|
Recoveries of credit
losses
|
-
|
|
(250)
|
|
-
|
|
(250)
|
|
(500)
|
|
Transaction
costs
|
12
|
|
6
|
|
18
|
|
-
|
|
36
|
|
Corporate general and
administrative
|
7,022
|
|
7,999
|
|
9,100
|
|
8,126
|
|
32,247
|
|
Depreciation and
amortization
|
37,698
|
|
36,908
|
|
37,510
|
|
37,882
|
|
149,998
|
|
Hotel
EBITDA
|
62,049
|
|
62,865
|
|
70,629
|
|
62,250
|
|
257,793
|
|
Hotel EBITDA from
acquisitions (1)
|
(2,899)
|
|
(3,909)
|
|
(2,445)
|
|
(938)
|
|
(10,191)
|
|
Hotel EBITDA from
dispositions (2)
|
(313)
|
|
309
|
|
-
|
|
49
|
|
45
|
|
Same store hotel
EBITDA
|
$
58,837
|
|
$
59,265
|
|
$
68,184
|
|
$
61,361
|
|
$
247,647
|
|
Hotel EBITDA from
acquisitions (3)
|
4,089
|
|
5,858
|
|
2,933
|
|
939
|
|
13,819
|
|
Pro forma hotel
EBITDA
|
$
62,926
|
|
$
65,123
|
|
$
71,117
|
|
$
62,300
|
|
$
261,466
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
For any hotels
acquired by the Company after October 1, 2022 (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 September 30, 2023 (the
"Acquisition Period") in determining same-store hotel
EBITDA.
|
|
|
|
(2)
|
For hotels sold by
the Company between October 1, 2022, and September 30, 2023
(the "Disposed Hotels"), the Company has excluded the financial
results of each of the Disposed Hotels for the period beginning on
October 1, 2022, 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 101 hotels owned as of
September 30, 2023, as if all such hotels had been owned by
the Company since October 1, 2022. For hotels acquired by the
Company after October 1, 2022 (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, 2022, to
September 30, 2023. 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.
|
|
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,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
Pro Forma
(101)
|
|
|
|
|
|
|
|
|
Rooms sold
|
1,014,851
|
|
989,042
|
|
2,988,331
|
|
2,871,416
|
|
Rooms
available
|
1,383,189
|
|
1,382,944
|
|
4,104,343
|
|
4,089,153
|
|
Occupancy
|
73.4 %
|
|
71.5 %
|
|
72.8 %
|
|
70.2 %
|
|
ADR
|
$
159.35
|
|
$
159.71
|
|
$
167.22
|
|
$
160.81
|
|
RevPAR
|
$
116.91
|
|
$
114.22
|
|
$
121.75
|
|
$
112.92
|
|
|
|
|
|
|
|
|
|
Occupancy
change
|
2.6 %
|
|
|
|
3.7 %
|
|
|
|
ADR
change
|
-0.2 %
|
|
|
|
4.0 %
|
|
|
|
RevPAR
change
|
2.4 %
|
|
|
|
7.8 %
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months
Ended
September 30,
|
|
For the Nine Months
Ended
September 30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
Same-Store
(95)
|
|
|
|
|
|
|
|
|
Rooms sold
|
977,982
|
|
955,889
|
|
2,868,368
|
|
2,770,747
|
|
Rooms
available
|
1,326,333
|
|
1,326,272
|
|
3,935,629
|
|
3,935,537
|
|
Occupancy
|
73.7 %
|
|
72.1 %
|
|
72.9 %
|
|
70.4 %
|
|
ADR
|
$
159.83
|
|
$
159.75
|
|
$
166.01
|
|
$
159.50
|
|
RevPAR
|
$
117.85
|
|
$
115.14
|
|
$
120.99
|
|
$
112.29
|
|
|
|
|
|
|
|
|
|
Occupancy
change
|
2.3 %
|
|
|
|
3.5 %
|
|
|
|
ADR
change
|
0.0 %
|
|
|
|
4.1 %
|
|
|
|
RevPAR
change
|
2.4 %
|
|
|
|
7.7 %
|
|
|
|
|
|
(1)
|
Unaudited pro forma
information includes operating results for 101 hotels owned as of
September 30, 2023, as if each hotel had been owned by the
Company since January 1, 2022. 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 95 hotels owned by the
Company as of January 1, 2022, and at all times during the three
and nine months ended September 30, 2023, and 2022.
|
|
Summit Hotel
Properties, Inc.
|
|
Reconciliation of
Net (Loss) Income to Non-GAAP Measures – EBITDA for Financial
Outlook
|
|
(in
thousands)
|
|
(Unaudited)
|
|
|
|
FYE 2023
Outlook
|
|
|
Low
|
|
High
|
|
Net loss
|
|
$ (15,800)
|
|
$
(9,400)
|
|
Depreciation and
amortization
|
|
150,900
|
|
150,900
|
|
Interest
expense
|
|
86,400
|
|
86,300
|
|
Interest
income
|
|
(400)
|
|
(400)
|
|
Income tax
expense
|
|
2,900
|
|
2,900
|
|
EBITDA
|
|
$
224,000
|
|
$
230,300
|
|
Loss on disposal of
assets and other dispositions, net
|
|
400
|
|
400
|
|
EBITDAre
|
|
$
224,400
|
|
$
230,700
|
|
Recoveries of credit
losses
|
|
(500)
|
|
(500)
|
|
Amortization of key
money liabilities
|
|
(400)
|
|
(400)
|
|
Equity-based
compensation
|
|
7,700
|
|
7,700
|
|
Transaction costs and
other
|
|
100
|
|
100
|
|
Debt transaction
costs
|
|
400
|
|
400
|
|
Other non-cash items,
net
|
|
2,500
|
|
2,500
|
|
Loss related to
non-controlling interests in consolidated joint ventures
|
|
12,000
|
|
10,800
|
|
Adjustments related to
non-controlling interests in consolidated joint ventures
|
|
(59,700)
|
|
(59,700)
|
|
Adjusted
EBITDAre
|
|
$
186,500
|
|
$
191,600
|
|
Summit Hotel
Properties, Inc.
|
|
Reconciliation of
Net (Loss) Income to Non-GAAP Measures – Funds From Operations for
Financial Outlook
|
|
(In thousands except
per share and unit)
|
|
(Unaudited)
|
|
|
|
FYE 2023
Outlook
|
|
|
Low
|
|
High
|
|
Net loss
|
|
$
(15,800)
|
|
$
(9,400)
|
|
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
|
|
12,000
|
|
10,800
|
|
Net loss applicable
to Common Stock and Common Units
|
|
$ (22,300)
|
|
$ (17,100)
|
|
Real estate-related
depreciation
|
|
149,200
|
|
149,200
|
|
Loss on disposal of
assets and other dispositions, net
|
|
400
|
|
400
|
|
Adjustments related to
non-controlling interests in consolidated joint ventures
|
|
(32,600)
|
|
(32,600)
|
|
FFO applicable to
Common Stock and Common Units
|
|
$
94,700
|
|
$
99,900
|
|
Recoveries of credit
losses
|
|
(500)
|
|
(500)
|
|
Amortization of debt
issuance costs
|
|
5,300
|
|
5,300
|
|
Amortization of
franchise fees
|
|
600
|
|
600
|
|
Amortization of
intangible assets, net
|
|
2,700
|
|
2,700
|
|
Equity-based
compensation
|
|
7,700
|
|
7,700
|
|
Transaction costs and
other
|
|
100
|
|
100
|
|
Debt transaction
costs
|
|
400
|
|
400
|
|
Other non-cash items,
net
|
|
600
|
|
600
|
|
Adjustments related to
non-controlling interests in consolidated joint ventures
|
|
(2,600)
|
|
(2,600)
|
|
AFFO applicable to
Common Stock and Common Units
|
|
$
109,000
|
|
$
114,200
|
|
Wtd avg diluted shares
of Common Stock and Common Units for FFO and AFFO
|
|
122,500
|
|
122,500
|
|
FFO per share of
Common Stock and Common Units
|
|
$
0.77
|
|
$
0.82
|
|
AFFO per share of
Common Stock and Common Units
|
|
$
0.89
|
|
$
0.93
|
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, 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,
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 release, FFO is based
on our computation of FFO and not the computation of Nareit-defined
FFO unless otherwise noted.
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).
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SOURCE SUMMIT HOTEL PROPERTIES, INC.
