Operating Income of $58.8 Million for Full Year 2023
Adjusted EBITDAre Climbs 5.1 Percent to
$190.0 Million; Adjusted FFO Per
Share of $0.92 for Full Year
2023
Accretive Dispositions Continue with Sale of
Two Additional Hotels
New $200 Million
Term Loan Financing Completed; No Significant Debt Maturities Until
2026
AUSTIN,
Texas, Feb. 28, 2024 /PRNewswire/ -- Summit Hotel
Properties, Inc. (NYSE: INN) (the "Company"), today announced
results for the fourth quarter and full year ended December 31, 2023.
"We are proud of the Company's many successes in 2023, led by
RevPAR growth of 6.6 percent which outpaced the overall industry by
approximately 170 basis points and was primarily driven by the
strong performance of our urban hotels. We continue to enhance our
portfolio through strategic asset sales, including the sale of six
hotels since the beginning of 2023 for nearly $50 million at an attractive blended
capitalization rate of 2.6 percent after foregone capital
expenditures. A portion of those proceeds were recycled into two
high quality hotels located in high-growth markets, at
capitalization rates over 9 percent on a blended basis. The
improved performance of our portfolio and our ongoing efforts to
prudently allocate capital allowed us to increase our common
dividend by 50 percent during the year," said Jonathan P. Stanner, the Company's President and
Chief Executive Officer.
"Since the beginning of 2023, we have successfully completed
approximately $1 billion of financing
activity that has further enhanced our well-positioned balance
sheet by extending debt maturity dates, maintaining attractive
pricing and preserving overall flexibility to execute on our
strategic initiatives. Most recently, our new $200 million term loan financing replaced our
last remaining meaningful tranche of debt scheduled to mature in
2025. As a result, we have no significant debt maturities until
2026, nearly $400 million of
liquidity, a weighted average cost of debt of approximately 4.75
percent and, inclusive of attractively priced interest rate swaps
and preferred equity, approximately 80 percent of our balance sheet
has fixed interest rates. Our outlook for 2024 remains positive,
supported by stable demand trends and the expectation that growth
in our urban markets will continue to lead portfolio performance,
which we believe is positioned to once again outperform the broader
industry in 2024," commented Mr. Stanner.
Full Year 2023 Summary
- Net Loss: Net loss attributable to common stockholders
was $28.0 million, or $0.27 per diluted share, compared to a net loss
of $16.9 million, or $0.16 per diluted share, in the same period of
2022.
- Pro Forma RevPAR: Pro forma RevPAR increased
6.6 percent to $120.12 compared to
the same period of 2022. Pro forma ADR increased 3.1 percent to
$166.27, and pro forma occupancy
increased 3.4 percent to 72.2 percent.
- Same Store RevPAR: Same Store RevPAR increased 6.6
percent to $119.33 compared to the
same period of 2022. Same store ADR increased 3.2 percent to
$165.09, and same store occupancy
increased 3.3 percent to 72.3 percent.
- Pro Forma Hotel EBITDA (1): Pro forma
hotel EBITDA increased 6.0 percent to $260.5
million from $245.8 million,
and pro forma hotel EBITDA margin contracted to 35.5 percent from
36.1 percent in the same period of 2022.
- Same Store Hotel EBITDA (1): Same store
hotel EBITDA increased 5.8 percent to $246.7
million from $233.2 million,
and same store hotel EBITDA margin contracted to 35.7 percent from
36.2 percent in the same period of 2022.
- Adjusted EBITDAre (1): Adjusted
EBITDAre increased 5.1 percent to $190.0 million from $180.8
million, in the same period of 2022.
- Adjusted FFO (1): Adjusted FFO was
$112.8 million, or $0.92 per diluted share and unit, compared to
$114.0 million, or $0.94 per diluted share and unit in the same
period of last year.
Fourth Quarter 2023 Summary
- Net Loss: Net loss attributable to common stockholders
was $16.6 million, or $0.16 per diluted share, compared to a net loss
of $12.0 million, or $0.11 per diluted share, for the
fourth quarter of 2022.
- Pro Forma RevPAR: Pro forma RevPAR increased 2.9
percent to $114.05 compared to the
fourth quarter of 2022. Pro forma ADR increased 0.4 percent to
$162.10 compared to the same period
in 2022, and pro forma occupancy increased 2.4 percent to 70.4
percent.
- Same Store RevPAR: Same Store RevPAR increased 3.2
percent to $113.11 compared to the
fourth quarter of 2022. Same store ADR increased 0.6 percent
to $160.96, and same store occupancy
increased 2.6 percent to 70.3 percent.
- Pro Forma Hotel EBITDA (1): Pro forma
hotel EBITDA decreased 0.7 percent to $62.4
million from $62.8 million in
the same period in 2022. Pro forma hotel EBITDA margin contracted
to 35.3 percent from 36.8 percent in the same period of 2022.
Adjusting for significant real estate tax credits received in 2022,
pro forma hotel EBITDA margin contracted by approximately 70 basis
points in the fourth quarter.
- Same Store Hotel EBITDA (1): Same store
hotel EBITDA decreased 0.7 percent to $58.3
million from $58.7 million in
the same period in 2022. Same store hotel EBITDA margin contracted
to 35.2 percent from 36.6 percent in the same period of 2022.
Adjusting for significant real estate tax credits received in 2022,
same store hotel EBITDA margin contracted by approximately 60 basis
points in the fourth quarter.
- Adjusted EBITDAre (1): Adjusted
EBITDAre increased 0.6 percent to $46.4 million from $46.1
million in the fourth quarter of 2022.
- Adjusted FFO (1): Adjusted FFO was
$26.9 million, or $0.22 per diluted share and unit, compared to
$30.3 million, or $0.25 per diluted share and unit, in the fourth
quarter of 2022.
The Company's results for the three months and full year ended
December 31, 2023, are as follows (in
thousands, except per share amounts):
|
For the Three Months
Ended
December 31,
|
|
For the Years
Ended
December 31,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
(unaudited)
|
|
Net loss attributable
to common stockholders
|
$
(16,571)
|
|
$
(11,975)
|
|
$
(27,990)
|
|
$
(16,929)
|
|
Net loss per diluted
share
|
$
(0.16)
|
|
$
(0.11)
|
|
$
(0.27)
|
|
$
(0.16)
|
|
Total
revenues
|
$ 177,435
|
|
$ 172,326
|
|
$ 736,127
|
|
$ 675,695
|
|
EBITDAre
(1)
|
$
56,581
|
|
$
54,498
|
|
$ 228,882
|
|
$ 210,609
|
|
Adjusted
EBITDAre (1)
|
$
46,384
|
|
$
46,084
|
|
$ 189,964
|
|
$ 180,815
|
|
FFO
(1)
|
$
24,186
|
|
$
25,542
|
|
$
96,778
|
|
$
95,253
|
|
Adjusted FFO
(1)
|
$
26,935
|
|
$
30,340
|
|
$ 112,826
|
|
$ 113,970
|
|
FFO per diluted share
and unit (1)
|
$
0.20
|
|
$
0.21
|
|
$
0.79
|
|
$
0.79
|
|
Adjusted FFO per
diluted share and unit (1)
|
$
0.22
|
|
$
0.25
|
|
$
0.92
|
|
$
0.94
|
|
|
|
|
|
|
|
|
|
Pro Forma
(2)
|
|
|
|
|
|
|
|
|
RevPAR
|
$
114.05
|
|
$
110.85
|
|
$
120.12
|
|
$
112.67
|
|
RevPAR
Growth
|
2.9 %
|
|
|
|
6.6 %
|
|
|
|
Hotel EBITDA
|
$
62,363
|
|
$
62,782
|
|
$ 260,536
|
|
$ 245,752
|
|
Hotel EBITDA
margin
|
35.3 %
|
|
36.8 %
|
|
35.5 %
|
|
36.1 %
|
|
Hotel EBITDA margin
change
|
-152 bps
|
|
|
|
-58 bps
|
|
|
|
|
|
|
|
|
|
|
|
Same Store
(3)
|
|
|
|
|
|
|
|
|
RevPAR
|
$
113.11
|
|
$
109.62
|
|
$
119.33
|
|
$
111.90
|
|
RevPAR
Growth
|
3.2 %
|
|
|
|
6.6 %
|
|
|
|
Hotel EBITDA
|
$
58,300
|
|
$
58,693
|
|
$ 246,743
|
|
$
233,154
|
|
Hotel EBITDA
margin
|
35.2 %
|
|
36.6 %
|
|
35.7 %
|
|
36.2 %
|
|
Hotel EBITDA margin
change
|
-148 bps
|
|
|
|
-45 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 100 hotels owned as of December
31, 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 94 hotels
owned as of December 31, 2023, and at all times during the three
and twelve months ended December 31, 2023, and 2022.
|
|
|
Transaction Activity
Dispositions
Subsequent to year-end, the Company completed the sale of the
127-guestroom Hyatt Place Dallas / Plano for a gross sales price of $10.3 million through its joint venture with GIC.
The sales price for the transaction represents a 4.3 percent
capitalization rate based on net operating income after a 4.0
percent FF&E reserve for the trailing 12 months ended
December 31, 2023. The joint venture
will forego approximately $5.2
million of future near-term required capital expenditures at
the hotel as a result of the sale, which reduces the all-in
capitalization rate to approximately 2.9 percent.
Throughout 2023, the Company continued its strategic capital
recycling program that included the sale of five hotels for a gross
sales price of $36.4 million at a
blended capitalization rate of 2.5 percent after consideration of
foregone capital expenditures.
Combined, the Company has sold six hotels for $46.6 million ($41.6
million on a pro rata basis) since the beginning of 2023 at
a blended capitalization rate of 2.6 percent after consideration of
$30.9 million of foregone capital
expenditures.
|
Sold Hotels (2023
& YTD 2024) (1)
|
Keys
|
Date
|
Price
|
Capex
(2)
|
RevPAR(3)
|
Cap Rate
(4)
|
|
Hyatt Place Chicago /
Lombard
|
151
|
May 2023
|
10,500
|
5,700
|
76
|
4.6 %
|
|
Hyatt Place Chicago /
Hoffman Estates
|
126
|
May 2023
|
3,000
|
7,200
|
68
|
0.3 %
|
|
Hilton Garden Inn
Minneapolis / Eden Prairie
|
97
|
May 2023
|
8,200
|
4,300
|
81
|
3.1 %
|
|
Holiday Inn Express
& Suites Minnetonka
|
93
|
May 2023
|
6,400
|
3,300
|
74
|
0.5 %
|
|
Hyatt Place Baltimore /
Owings Mills
|
123
|
Dec 2023
|
8,250
|
5,200
|
69
|
2.6 %
|
|
Hyatt Place Dallas /
Plano
|
127
|
Feb 2024
|
10,250
|
5,200
|
69
|
2.9 %
|
|
Total
|
717
|
|
$ 46,600
|
$ 30,900
|
$
73
|
2.6 %
|
|
|
|
(1)
|
In thousands
except RevPAR data.
|
|
(2)
|
Reflects estimated
near-term foregone capital expenditures for dispositions and
near-term capital requirements for acquisitions.
|
|
(3)
|
Reflects RevPAR
for the twelve-month period immediately prior to sale.
|
|
(4)
|
Capitalization rate
includes estimated near-term capital expenditure requirements
because of the transaction.
|
|
|
Acquisitions
A portion of the net proceeds from asset sales were reinvested
into two acquisitions within the GIC joint venture for a gross
purchase price $42.7 million
($21.8 million on a pro rata basis)
at a forecasted blended capitalization rate of 9.3 percent for the
full year 2024. Both hotels require minimal near-term capital
expenditures.
|
Acquired Hotels
(1)
|
Keys
|
Date
|
Price
|
RevPAR(2)
|
Cap Rate
(3)
|
|
Residence Inn
Scottsdale North
|
120
|
Jun 2023
|
29,000
|
133
|
8.7 %
|
|
Nordic Lodge Steamboat
Springs
|
47
|
Jun 2023
|
13,700
|
148
|
10.5 %
|
|
Total
|
167
|
|
$
42,700
|
$
137
|
9.3 %
|
|
|
|
(1)
|
In thousands
except RevPAR data.
|
|
(2)
|
Reflects 2024
estimated RevPAR.
|
|
(3)
|
Capitalization rate
reflects forecasted 2024 operating performance.
|
|
|
Capital Markets & Balance Sheet
The Company continued to enhance its balance sheet in 2023 and
subsequent to year-end, including successfully closing the
following significant transactions:
- In February 2024, the Company
successfully completed a new $200
million senior unsecured term loan financing (the "2024 Term
Loan"). The 2024 Term Loan provides for a fully extended maturity
date of February 2029 and interest
rate pricing ranging from 135 basis points to 235 basis points over
the applicable adjusted term SOFR. Proceeds from the 2024 Term Loan
financing, along with asset sale proceeds, cash on hand, and
revolver availability, were used to repay in full the Company's
$225 million term loan that was
scheduled to mature in February 2025.
As a result of the 2024 Term Loan financing, the Company has no
significant debt maturities until 2026 and has an average length to
maturity of approximately 3.6 years. Other terms of the agreement
are similar to the Company's previous senior unsecured term
loan.
- In January 2024, subsidiaries of
the GIC joint venture entered into a $100
million forward starting interest rate swap to fix one-month
term SOFR at 3.765 percent until January
2026, which compares to the current term SOFR rate of 5.33
percent. The interest rate swap has an effective date of
October 1, 2024.
- In September 2023, the Company's
joint venture with GIC successfully completed the refinancing of
its $200 million senior credit
facility, which is comprised of a $125
million revolving credit facility and a $75 million term loan. The new credit agreement
provides for a fully extended maturity date of September 2028.
- In June 2023, the Company
successfully completed the refinancing of its $600 million senior unsecured credit facility,
which is comprised of a $400 million
senior unsecured revolving credit facility and $200 million senior unsecured term loan. The
amended and restated credit agreement provides for a maturity date
of June 2028 for both the revolver
and term loan, including extension options.
- In March 2023, subsidiaries of
the GIC joint venture entered into two $100
million interest rate swaps to fix one-month term SOFR at
3.354 percent until January 2026. The
interest rate swaps had an effective date of July 1, 2023.
On a pro rata basis, the Company had the following outstanding
indebtedness and liquidity available at year-end 2023:
- Outstanding debt of $1.1 billion
with a weighted average interest rate of approximately 4.75
percent. After giving effect to interest rate derivative
agreements, $849.2 million, or 75
percent, of our outstanding debt had an average fixed interest
rate, and $283.8 million, or 25
percent, had a variable interest rate.
- Unrestricted cash and cash equivalents of $29.1 million.
- Total liquidity of $396.3
million, including unrestricted cash and cash equivalents
and revolving credit facility availability.
Common and Preferred Dividend Declaration
On January 25, 2024, 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 3.7 percent based
on the closing price of shares of the common stock on February 27, 2024.
In addition, the Board of Directors declared a quarterly cash
dividend of:
- $0.390625 per share on its 6.25%
Series E Cumulative Redeemable Preferred Stock
- $0.3671875 per share on its
5.875% Series F Cumulative Redeemable Preferred Stock
- $0.328125 per unit on its 5.25%
Series Z Cumulative Perpetual Preferred Units
The dividends are payable on February 29,
2024, to holders of record as of February 15, 2024.
2024 Outlook
The Company is providing its outlook for the full year 2024
based on 99 lodging assets after consideration of the Hyatt Place
Dallas / Plano sale, 56 of which
are wholly owned as of February 28,
2024. There are no additional acquisitions, dispositions, or
capital markets activities assumed in the Company's full year 2024
outlook beyond the transactions already completed.
|
|
FYE 2024
Outlook
|
|
Summit
Operational
|
|
Low
|
|
High
|
|
Pro Forma RevPAR
Growth (1)
|
|
2.00 %
|
|
4.00 %
|
|
Adjusted
EBITDAre
|
|
$
188,000
|
|
$
200,000
|
|
Adjusted
FFO
|
|
$
111,000
|
|
$
123,000
|
|
Adjusted FFO per
Diluted Unit
|
|
$
0.90
|
|
$
1.00
|
|
Capital Expenditures,
Pro Rata
|
|
$ 65,000
|
|
$ 85,000
|
|
|
|
(1)
|
All pro forma
information includes operating and financial results for 99 lodging
assets owned as of February 28, 2024, as if each property had been
owned by the Company since January 1, 2023, and will continue to be
owned through the entire year ending December 31, 2024. As a
result, the pro forma information includes operating and financial
results for lodging assets acquired since January 1, 2023, which
may include periods prior to the Company's ownership. Pro forma and
non-GAAP financial measures are unaudited.
|
|
|
Fourth Quarter 2023 Earnings Conference Call
The Company will conduct its quarterly conference call on
Thursday, February 29, 2024, at
9:00 AM 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
April 30, 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 February 28, 2024, the Company's portfolio
consisted of 99 assets, 56 of which are wholly owned, with a total
of 14,785 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, 2023,
filed with the SEC, and its quarterly and other periodic filings
with the SEC. The Company undertakes no duty to update the
statements in this release to conform the statements to actual
results or changes in the Company's expectations.
|
Summit Hotel
Properties, Inc.
|
|
Consolidated Balance
Sheets
|
|
(In
thousands)
|
|
|
December 31,
2023
|
|
December 31,
2022
|
|
|
|
|
|
ASSETS
|
|
|
|
|
Investments in lodging
property, net
|
$ 2,729,049
|
|
$ 2,841,856
|
|
Investments in hotel
properties under development
|
1,451
|
|
-
|
|
Assets held for sale,
net
|
73,740
|
|
29,166
|
|
Cash and cash
equivalents
|
37,837
|
|
51,255
|
|
Restricted
cash
|
9,931
|
|
10,553
|
|
Right-of-use assets,
net
|
34,814
|
|
35,023
|
|
Trade receivables,
net
|
21,348
|
|
21,015
|
|
Prepaid expenses and
other
|
8,865
|
|
8,378
|
|
Deferred charges,
net
|
6,659
|
|
7,074
|
|
Other
assets
|
15,554
|
|
17,950
|
|
Total
assets
|
$ 2,939,248
|
|
$ 3,022,270
|
|
LIABILITIES,
REDEEMABLE
NON-CONTROLLING INTERESTS, AND EQUITY
|
|
|
|
|
Liabilities:
|
|
|
|
|
Debt, net of debt
issuance costs
|
$
1,430,668
|
|
$ 1,451,796
|
|
Lease liabilities,
net
|
25,842
|
|
25,484
|
|
Accounts
payable
|
4,827
|
|
5,517
|
|
Accrued expenses and
other
|
81,215
|
|
81,304
|
|
Total
liabilities
|
1,542,552
|
|
1,564,101
|
|
|
|
|
|
Redeemable
non-controlling interests
|
50,219
|
|
50,219
|
|
|
|
|
|
Total stockholders'
equity
|
911,195
|
|
959,813
|
|
Non-controlling
interests
|
435,282
|
|
448,137
|
|
Total
equity
|
1,346,477
|
|
1,407,950
|
|
Total liabilities,
redeemable non-controlling interests, and equity
|
$ 2,939,248
|
|
$ 3,022,270
|
|
Summit Hotel
Properties, Inc.
|
|
Consolidated
Statements of Operations
|
|
(Unaudited)
|
|
(In thousands,
except per share amounts)
|
|
|
For the Three Months
Ended
December 31,
|
|
For the Years
Ended
December 31,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
Revenues:
|
|
|
|
|
|
|
|
|
Room
|
$ 157,081
|
|
$ 153,623
|
|
$ 656,063
|
|
$ 609,370
|
|
Food and
beverage
|
10,665
|
|
9,937
|
|
41,513
|
|
32,117
|
|
Other
|
9,689
|
|
8,766
|
|
38,551
|
|
34,208
|
|
Total
revenues
|
177,435
|
|
172,326
|
|
736,127
|
|
675,695
|
|
Expenses:
|
|
|
|
|
|
|
|
|
Room
|
35,798
|
|
35,281
|
|
148,005
|
|
136,999
|
|
Food and
beverage
|
7,901
|
|
7,710
|
|
31,580
|
|
24,897
|
|
Other lodging property
operating expenses
|
55,121
|
|
53,104
|
|
224,901
|
|
207,975
|
|
Property taxes,
insurance and other
|
11,859
|
|
9,885
|
|
55,167
|
|
49,921
|
|
Management
fees
|
4,478
|
|
4,297
|
|
18,452
|
|
17,442
|
|
Depreciation and
amortization
|
38,624
|
|
37,698
|
|
150,924
|
|
150,160
|
|
Corporate general and
administrative
|
7,305
|
|
7,022
|
|
32,530
|
|
30,765
|
|
Transaction
costs
|
(11)
|
|
12
|
|
13
|
|
749
|
|
Loss on write-down of
assets
|
16,661
|
|
10,420
|
|
16,661
|
|
10,420
|
|
Recoveries of credit
losses
|
(730)
|
|
-
|
|
(1,230)
|
|
(1,100)
|
|
Total
expenses
|
177,006
|
|
165,429
|
|
677,003
|
|
628,228
|
|
(Loss) gain on
disposal of assets, net
|
(1)
|
|
(164)
|
|
(337)
|
|
20,315
|
|
Operating
income
|
428
|
|
6,733
|
|
58,787
|
|
67,782
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
Interest
expense
|
(21,621)
|
|
(19,379)
|
|
(86,798)
|
|
(65,581)
|
|
Interest
income
|
498
|
|
83
|
|
1,688
|
|
1,544
|
|
Other income (loss),
net
|
547
|
|
(555)
|
|
1,005
|
|
1,083
|
|
Total other expense,
net
|
(20,576)
|
|
(19,851)
|
|
(84,105)
|
|
(62,954)
|
|
(Loss) income from
continuing operations before income taxes
|
(20,148)
|
|
(13,118)
|
|
(25,318)
|
|
4,828
|
|
Income tax (expense)
benefit
|
(1,119)
|
|
1,036
|
|
(2,798)
|
|
(3,611)
|
|
Net (loss)
income
|
(21,267)
|
|
(12,082)
|
|
(28,116)
|
|
1,217
|
|
Less - Loss
attributable to non-controlling interests
|
9,321
|
|
4,730
|
|
18,627
|
|
249
|
|
Net (loss) income
attributable to Summit Hotel Properties, Inc. before preferred
dividends and distributions
|
(11,946)
|
|
(7,352)
|
|
(9,489)
|
|
1,466
|
|
Less - Distributions to
and accretion of redeemable non-controlling interests
|
(656)
|
|
(654)
|
|
(2,626)
|
|
(2,520)
|
|
Less - Preferred
dividends
|
(3,969)
|
|
(3,969)
|
|
(15,875)
|
|
(15,875)
|
|
Net loss attributable
to common stockholders
|
$ (16,571)
|
|
$
(11,975)
|
|
$ (27,990)
|
|
$ (16,929)
|
|
Loss per
share:
|
|
|
|
|
|
|
|
|
Basic and
Diluted
|
$
(0.16)
|
|
$
(0.11)
|
|
$
(0.27)
|
|
$
(0.16)
|
|
Weighted average common
shares outstanding:
|
|
|
|
|
|
|
|
|
Basic and
Diluted
|
105,666
|
|
105,235
|
|
105,548
|
|
105,142
|
|
Dividends per common
share
|
$0.06
|
|
$0.04
|
|
$0.22
|
|
$0.08
|
|
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
December 31,
|
|
For the Years
Ended
December 31,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
Net (loss)
income
|
$
(21,267)
|
|
$ (12,082)
|
|
$ (28,116)
|
|
$
1,217
|
|
Preferred
dividends
|
(3,969)
|
|
(3,969)
|
|
(15,875)
|
|
(15,875)
|
|
Distributions to and
accretion of redeemable non-controlling interests
|
(656)
|
|
(654)
|
|
(2,626)
|
|
(2,520)
|
|
Loss (income) related
to non-controlling interests in consolidated joint
ventures
|
6,731
|
|
2,898
|
|
14,824
|
|
(2,321)
|
|
Net loss applicable
to common shares and common units
|
$
(19,161)
|
|
$ (13,807)
|
|
$ (31,793)
|
|
$ (19,499)
|
|
Real estate-related
depreciation
|
37,436
|
|
36,533
|
|
146,187
|
|
145,492
|
|
Loss on write-down or
impairment of assets
|
16,661
|
|
10,420
|
|
16,661
|
|
10,420
|
|
Loss (gain) on disposal
of assets and other dispositions, net
|
1
|
|
164
|
|
385
|
|
(20,315)
|
|
Adjustments related to
non-controlling interests in consolidated joint ventures
|
(10,751)
|
|
(7,768)
|
|
(34,662)
|
|
(20,845)
|
|
FFO applicable to
common shares and common units
|
$
24,186
|
|
$
25,542
|
|
$
96,778
|
|
$
95,253
|
|
Recoveries of
provisions for credit losses
|
(730)
|
|
-
|
|
(1,230)
|
|
(1,100)
|
|
Amortization of
deferred financing costs
|
1,531
|
|
1,470
|
|
5,910
|
|
5,708
|
|
Amortization of
franchise fees
|
156
|
|
159
|
|
595
|
|
663
|
|
Amortization of
intangible assets, net
|
909
|
|
911
|
|
3,642
|
|
3,643
|
|
Equity-based
compensation
|
1,829
|
|
1,376
|
|
7,742
|
|
8,446
|
|
Transaction
costs
|
(11)
|
|
12
|
|
13
|
|
749
|
|
Debt transaction
costs
|
43
|
|
362
|
|
395
|
|
1,528
|
|
Non-cash interest
income
|
(134)
|
|
-
|
|
(531)
|
|
(113)
|
|
Non-cash lease expense,
net
|
113
|
|
131
|
|
481
|
|
505
|
|
Casualty losses,
net
|
261
|
|
1,451
|
|
2,112
|
|
2,505
|
|
Decrease in deferred
tax asset valuation allowance
|
21
|
|
-
|
|
84
|
|
-
|
|
Adjustments related to
non-controlling interests in consolidated joint ventures
|
(981)
|
|
(657)
|
|
(3,612)
|
|
(3,400)
|
|
Special allocation
related to sale of joint venture
|
-
|
|
(417)
|
|
-
|
|
(417)
|
|
Other non-cash items,
net
|
(258)
|
|
-
|
|
447
|
|
-
|
|
AFFO applicable to
Common Stock and Common Units
|
$
26,935
|
|
$
30,340
|
|
$
112,826
|
|
$
113,970
|
|
FFO per share of
Common Stock and Common Units
|
$
0.20
|
|
$
0.21
|
|
$
0.79
|
|
$
0.79
|
|
AFFO per share of
Common Stock and Common Units
|
$
0.22
|
|
$
0.25
|
|
$
0.92
|
|
$
0.94
|
|
Weighted average
diluted shares of Common Stock and Common Units
|
|
|
|
|
|
|
|
|
FFO and AFFO
(1)
|
122,486
|
|
121,923
|
|
122,355
|
|
121,163
|
|
|
|
(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.
|
|
Summit Hotel
Properties, Inc.
|
|
Reconciliation of
Weighted Average Diluted Common Shares
|
|
(Unaudited)
|
|
(In
thousands)
|
|
|
For the Three Months
Ended
December 31,
|
|
For the Years
Ended
December 31,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
Weighted average
dilutive common shares outstanding
|
105,666
|
|
105,235
|
|
105,548
|
|
105,142
|
|
Dilutive effect of
restricted stock awards
|
206
|
|
105
|
|
226
|
|
221
|
|
Dilutive effect of
performance stock awards
|
-
|
|
-
|
|
-
|
|
7
|
|
Dilutive effect of
Common Units of Operating Partnership
|
15,958
|
|
52
|
|
15,970
|
|
-
|
|
Dilutive effect of
shares issuable upon conversion of convertible debt
|
25,037
|
|
24,193
|
|
24,678
|
|
24,193
|
|
Adjusted weighted
average dilutive common shares outstanding
|
146,867
|
|
129,585
|
|
146,422
|
|
129,563
|
|
|
|
|
|
|
|
|
|
Non-GAAP adjustment for
dilutive effects of common units
|
-
|
|
15,981
|
|
-
|
|
15,360
|
|
Non-GAAP adjustment for
dilutive effects of restricted stock awards
|
656
|
|
550
|
|
611
|
|
433
|
|
Non-GAAP adjustment for
dilutive effect of shares issuable upon conversion of convertible
debt
|
(25,037)
|
|
(24,193)
|
|
(24,678)
|
|
(24,193)
|
|
Non-GAAP weighted
dilutive common shares/common units outstanding
|
122,486
|
|
121,923
|
|
122,355
|
|
121,163
|
|
Summit Hotel
Properties, Inc.
|
|
Reconciliation of
Net Loss to Non-GAAP Measures – EBITDAre
|
|
(Unaudited)
|
|
(In
thousands)
|
|
|
For the Three Months
Ended
December 31,
|
|
For the Years
Ended
December 31,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
Net (loss)
income
|
$
(21,267)
|
|
$ (12,082)
|
|
$ (28,116)
|
|
$
1,217
|
|
Depreciation and
amortization
|
38,624
|
|
37,698
|
|
150,924
|
|
150,160
|
|
Interest
expense
|
21,621
|
|
19,379
|
|
86,798
|
|
65,581
|
|
Interest
income
|
(178)
|
|
(45)
|
|
(568)
|
|
(65)
|
|
Income tax expense
(benefit)
|
1,119
|
|
(1,036)
|
|
2,798
|
|
3,611
|
|
EBITDA
|
$
39,919
|
|
$
43,914
|
|
$
211,836
|
|
$
220,504
|
|
Loss on write-down of
assets
|
16,661
|
|
10,420
|
|
16,661
|
|
10,420
|
|
Loss (gain) on disposal
of assets and other dispositions, net
|
1
|
|
164
|
|
385
|
|
(20,315)
|
|
EBITDAre
|
$
56,581
|
|
$
54,498
|
|
$
228,882
|
|
$
210,609
|
|
Recoveries of
provisions for credit losses
|
(730)
|
|
-
|
|
(1,230)
|
|
(1,100)
|
|
Amortization of key
money liabilities
|
(120)
|
|
(96)
|
|
(498)
|
|
(363)
|
|
Equity-based
compensation
|
1,829
|
|
1,376
|
|
7,742
|
|
8,446
|
|
Transaction costs and
other
|
(11)
|
|
12
|
|
13
|
|
749
|
|
Debt transaction
costs
|
43
|
|
362
|
|
395
|
|
1,528
|
|
Non-cash interest
income (1)
|
(134)
|
|
-
|
|
(531)
|
|
(113)
|
|
Non-cash lease expense,
net
|
113
|
|
131
|
|
481
|
|
505
|
|
Casualty losses,
net
|
261
|
|
1,451
|
|
2,112
|
|
2,505
|
|
Loss (income) related
to non-controlling interests in consolidated joint
ventures
|
6,731
|
|
2,898
|
|
14,824
|
|
(2,321)
|
|
Adjustments related to
non-controlling interests in consolidated joint ventures
|
(17,921)
|
|
(14,131)
|
|
(62,681)
|
|
(39,213)
|
|
Special allocation
related to sale of joint venture asset
|
-
|
|
(417)
|
|
-
|
|
(417)
|
|
Other
|
(258)
|
|
-
|
|
455
|
|
-
|
|
Adjusted
EBITDAre
|
$
46,384
|
|
$
46,084
|
|
$
189,964
|
|
$
180,815
|
|
|
|
(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
December 31,
|
|
For the Years
Ended
December 31,
|
|
Pro Forma Operating
Data (1,2)
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
Pro forma room
revenue
|
$
156,459
|
|
$
152,049
|
|
$
653,777
|
|
$
611,499
|
|
Pro forma other hotel
operating revenue
|
20,339
|
|
18,563
|
|
79,871
|
|
69,473
|
|
Pro forma total
revenues
|
176,798
|
|
170,612
|
|
733,648
|
|
680,972
|
|
Pro forma total hotel
operating expenses
|
114,435
|
|
107,830
|
|
473,112
|
|
435,220
|
|
Pro forma hotel
EBITDA
|
$
62,363
|
|
$
62,782
|
|
$
260,536
|
|
$
245,752
|
|
Pro forma hotel
EBITDA Margin
|
35.3 %
|
|
36.8 %
|
|
35.5 %
|
|
36.1 %
|
|
|
|
|
|
|
|
|
|
|
Reconciliations of
Non-GAAP financial measures to comparable GAAP financial
measures
|
|
|
|
|
|
|
|
|
|
|
Revenue:
|
|
|
|
|
|
|
|
|
Total
revenues
|
$
177,435
|
|
$
172,326
|
|
$
736,127
|
|
$
675,695
|
|
Total revenues -
acquisitions (1)
|
-
|
|
2,090
|
|
4,715
|
|
23,182
|
|
Total revenues -
dispositions (2)
|
(637)
|
|
(3,804)
|
|
(7,194)
|
|
(17,905)
|
|
Pro forma total
revenues
|
176,798
|
|
170,612
|
|
733,648
|
|
680,972
|
|
|
|
|
|
|
|
|
|
Hotel Operating
Expenses:
|
|
|
|
|
|
|
|
|
Total hotel operating
expenses
|
115,157
|
|
110,277
|
|
478,105
|
|
437,234
|
|
Hotel operating
expenses - acquisitions (1)
|
(1)
|
|
901
|
|
2,278
|
|
13,486
|
|
Hotel operating
expenses - dispositions (2)
|
(721)
|
|
(3,348)
|
|
(7,271)
|
|
(15,500)
|
|
Pro forma hotel
operating expenses
|
114,435
|
|
107,830
|
|
473,112
|
|
435,220
|
|
|
|
|
|
|
|
|
|
Hotel
EBITDA:
|
|
|
|
|
|
|
|
|
Operating
income
|
428
|
|
6,733
|
|
58,787
|
|
67,782
|
|
Loss (gain) on disposal
of assets, net
|
1
|
|
164
|
|
337
|
|
(20,315)
|
|
Recoveries of
provisions for credit losses
|
(730)
|
|
-
|
|
(1,230)
|
|
(1,100)
|
|
Loss on write-down or
impairment of assets
|
16,661
|
|
10,420
|
|
16,661
|
|
10,420
|
|
Transaction costs and
other
|
(11)
|
|
12
|
|
13
|
|
749
|
|
Corporate general and
administrative
|
7,305
|
|
7,022
|
|
32,530
|
|
30,765
|
|
Depreciation and
amortization
|
38,624
|
|
37,698
|
|
150,924
|
|
150,160
|
|
Hotel
EBITDA
|
62,278
|
|
62,049
|
|
258,022
|
|
238,461
|
|
Hotel EBITDA -
acquisitions (1)
|
(4,062)
|
|
(2,900)
|
|
(11,356)
|
|
(2,902)
|
|
Hotel EBITDA -
dispositions (2)
|
84
|
|
(456)
|
|
77
|
|
(2,405)
|
|
Same store hotel
EBITDA
|
$
58,300
|
|
$
58,693
|
|
$
246,743
|
|
$
233,154
|
|
Hotel EBITDA -
acquisitions (3)
|
4,063
|
|
4,089
|
|
13,793
|
|
12,598
|
|
Pro forma hotel
EBITDA
|
$
62,363
|
|
$
62,782
|
|
$
260,536
|
|
$
245,752
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 December 31, 2023 (the "Acquisition
Period") in determining same-store hotel EBITDA.
|
|
|
|
(2)
|
For hotels sold by
the Company between January 1, 2022, and December 31, 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 100 hotels owned as of
December 31, 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
December 31, 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)
|
|
|
2023
|
|
|
|
|
Pro Forma Operating
Data (1,2)
|
Q1
|
|
Q2
|
|
Q3
|
|
Q4
|
|
Year Ended
December 31, 2023
|
|
|
Pro forma room
revenue
|
$
163,493
|
|
$
172,972
|
|
$
160,853
|
|
$
156,459
|
|
$
653,777
|
|
|
Pro forma other hotel
operating revenue
|
19,202
|
|
20,250
|
|
20,080
|
|
20,339
|
|
79,871
|
|
|
Pro forma total
revenues
|
182,695
|
|
193,222
|
|
180,933
|
|
176,798
|
|
733,648
|
|
|
Pro forma total hotel
operating expenses
|
117,617
|
|
122,273
|
|
118,787
|
|
114,435
|
|
473,112
|
|
|
Pro forma hotel
EBITDA
|
$
65,078
|
|
$
70,949
|
|
$
62,146
|
|
$
62,363
|
|
$
260,536
|
|
|
Pro forma hotel
EBITDA Margin
|
35.6 %
|
|
36.7 %
|
|
34.3 %
|
|
35.3 %
|
|
35.5 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pro Forma Statistics
(1,2)
|
|
|
|
|
|
|
|
|
|
|
|
Rooms sold
|
934,438
|
|
1,025,004
|
|
1,007,287
|
|
965,187
|
|
3,931,916
|
|
|
Rooms
available
|
1,341,990
|
|
1,356,901
|
|
1,371,873
|
|
1,371,904
|
|
5,442,668
|
|
|
Occupancy
|
69.6 %
|
|
75.5 %
|
|
73.4 %
|
|
70.4 %
|
|
72.2 %
|
|
|
ADR
|
$
174.96
|
|
$
168.75
|
|
$
159.69
|
|
$
162.10
|
|
$
166.27
|
|
|
RevPAR
|
$
121.83
|
|
$
127.48
|
|
$
117.25
|
|
$
114.05
|
|
$
120.12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Actual
Statistics
|
|
|
|
|
|
|
|
|
|
|
|
Rooms sold
|
950,214
|
|
1,039,045
|
|
1,014,851
|
|
970,959
|
|
3,975,069
|
|
|
Rooms
available
|
1,380,060
|
|
1,376,796
|
|
1,383,189
|
|
1,381,867
|
|
5,521,912
|
|
|
Occupancy
|
68.9 %
|
|
75.5 %
|
|
73.4 %
|
|
70.3 %
|
|
72.0 %
|
|
|
ADR
|
$
171.63
|
|
$
167.64
|
|
$
159.35
|
|
$
161.78
|
|
$
165.04
|
|
|
RevPAR
|
$
118.18
|
|
$
126.51
|
|
$
116.91
|
|
$
113.67
|
|
$
118.81
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliations of
Non-GAAP financial measures to comparable GAAP financial
measures
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
Total
revenues
|
$
182,383
|
|
$
194,493
|
|
$
181,816
|
|
$
177,435
|
|
$
736,127
|
|
|
Total revenues from
acquisitions (1)
|
3,438
|
|
1,278
|
|
(1)
|
|
-
|
|
4,715
|
|
|
Total revenues from
dispositions (2)
|
(3,126)
|
|
(2,549)
|
|
(882)
|
|
(637)
|
|
(7,194)
|
|
|
Pro forma total
revenues
|
182,695
|
|
193,222
|
|
180,933
|
|
176,798
|
|
733,648
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hotel Operating
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
Total hotel operating
expenses
|
119,518
|
|
123,864
|
|
119,566
|
|
115,157
|
|
478,105
|
|
|
Total hotel operating
expenses from acquisitions (1)
|
1,491
|
|
791
|
|
(3)
|
|
(1)
|
|
2,278
|
|
|
Total hotel operating
expenses from dispositions (2)
|
(3,392)
|
|
(2,382)
|
|
(776)
|
|
(721)
|
|
(7,271)
|
|
|
Pro forma total
hotel operating expenses
|
117,617
|
|
122,273
|
|
118,787
|
|
114,435
|
|
473,112
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hotel
EBITDA:
|
|
|
|
|
|
|
|
|
|
|
|
Operating
income
|
18,202
|
|
23,681
|
|
16,476
|
|
428
|
|
58,787
|
|
|
Loss (gain) on disposal
of assets, net
|
-
|
|
320
|
|
16
|
|
1
|
|
337
|
|
|
Recoveries of
provisions for credit losses
|
(250)
|
|
-
|
|
(250)
|
|
(730)
|
|
(1,230)
|
|
|
Loss on write-down or
impairment of assets
|
-
|
|
-
|
|
-
|
|
16,661
|
|
16,661
|
|
|
Transaction costs and
other
|
6
|
|
18
|
|
-
|
|
(11)
|
|
13
|
|
|
Corporate general and
administrative
|
7,999
|
|
9,100
|
|
8,126
|
|
7,305
|
|
32,530
|
|
|
Depreciation and
amortization
|
36,908
|
|
37,510
|
|
37,882
|
|
38,624
|
|
150,924
|
|
|
Hotel
EBITDA
|
62,865
|
|
70,629
|
|
62,250
|
|
62,278
|
|
258,022
|
|
|
Hotel EBITDA from
acquisitions (1)
|
(3,911)
|
|
(2,445)
|
|
(938)
|
|
(4,062)
|
|
(11,356)
|
|
|
Hotel EBITDA from
dispositions (2)
|
266
|
|
(167)
|
|
(106)
|
|
84
|
|
77
|
|
|
Same store hotel
EBITDA
|
$
59,220
|
|
$
68,017
|
|
$
61,206
|
|
$
58,300
|
|
$
246,743
|
|
|
Hotel EBITDA from
acquisitions (3)
|
5,858
|
|
2,932
|
|
940
|
|
4,063
|
|
13,793
|
|
|
Pro forma hotel
EBITDA
|
$
65,078
|
|
$
70,949
|
|
$
62,146
|
|
$
62,363
|
|
$
260,536
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
For any hotels
acquired by the Company after January 1, 2023 (the "Acquired
Hotels"), the Company has excluded the financial results of each of
the Acquired Hotels for the period the Acquired Hotels were
purchased by the Company to December 31, 2023 (the "Acquisition
Period") in determining same-store hotel EBITDA.
|
|
|
|
(2)
|
For hotels sold by
the Company between January 1, 2023, and December 31, 2023 (the
"Disposed Hotels"), the Company has excluded the financial results
of each of the Disposed Hotels for the period beginning on January
1, 2023, and ending on the date the Disposed Hotels were sold by
the Company (the "Disposition Period") in determining same-store
hotel EBITDA.
|
|
|
|
(3)
|
Unaudited pro forma
information includes operating results for 100 hotels owned as of
December 31, 2023, as if all such hotels had been owned by the
Company since January 1, 2023. For hotels acquired by the Company
after January 1, 2023 (the "Acquired Hotels"), the Company has
included in the pro forma information the financial results of each
of the Acquired Hotels for the period from January 1, 2023, to
December 31, 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
December 31,
|
|
For the Years
Ended
December 31,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
Pro Forma
(100)
|
|
|
|
|
|
|
|
|
Rooms sold
|
965,187
|
|
942,042
|
|
3,931,916
|
|
3,791,830
|
|
Rooms
available
|
1,371,904
|
|
1,371,667
|
|
5,442,668
|
|
5,427,241
|
|
Occupancy
|
70.4 %
|
|
68.7 %
|
|
72.2 %
|
|
69.9 %
|
|
ADR
|
$
162.10
|
|
$
161.40
|
|
$
166.27
|
|
$
161.27
|
|
RevPAR
|
$
114.05
|
|
$
110.85
|
|
$
120.12
|
|
$
112.67
|
|
|
|
|
|
|
|
|
|
Occupancy
change
|
2.4 %
|
|
|
|
3.4 %
|
|
|
|
ADR
change
|
0.4 %
|
|
|
|
3.1 %
|
|
|
|
RevPAR
change
|
2.9 %
|
|
|
|
6.6 %
|
|
|
|
|
|
|
|
|
|
|
|
For the Three
Months
Ended December 31,
|
|
For the Year
Ended
December 31,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
Same-Store
(94)
|
|
|
|
|
|
|
|
|
Rooms sold
|
924,088
|
|
900,795
|
|
3,770,854
|
|
3,649,914
|
|
Rooms
available
|
1,315,048
|
|
1,314,956
|
|
5,217,098
|
|
5,216,914
|
|
Occupancy
|
70.3 %
|
|
68.5 %
|
|
72.3 %
|
|
70.0 %
|
|
ADR
|
$
160.96
|
|
$
160.02
|
|
$
165.09
|
|
$
159.94
|
|
RevPAR
|
$
113.11
|
|
$
109.62
|
|
$
119.33
|
|
$
111.90
|
|
|
|
|
|
|
|
|
|
Occupancy
change
|
2.6 %
|
|
|
|
3.3 %
|
|
|
|
ADR
change
|
0.6 %
|
|
|
|
3.2 %
|
|
|
|
RevPAR
change
|
3.2 %
|
|
|
|
6.6 %
|
|
|
|
|
|
(1)
|
Unaudited pro forma
information includes operating results for 100 hotels owned as of
December 31, 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 94 hotels owned by the
Company as of January 1, 2022, and at all times during the three
and twelve months ended December, 2023, and 2022.
|
|
Summit Hotel
Properties, Inc.
|
|
Reconciliation of
Net (Loss) Income to Non-GAAP Measures – EBITDA for Financial
Outlook
|
|
(in
thousands)
|
|
(Unaudited)
|
|
|
|
FYE 2024
Outlook
|
|
|
Low
|
|
High
|
|
Net loss
|
|
$
(4,000)
|
|
$
10,900
|
|
Depreciation and
amortization
|
|
153,200
|
|
153,200
|
|
Interest
expense
|
|
85,100
|
|
85,100
|
|
Interest
income
|
|
-
|
|
-
|
|
Income tax
expense
|
|
3,000
|
|
3,000
|
|
EBITDA
|
|
$
237,300
|
|
$
252,200
|
|
Loss on disposal of
assets and other dispositions, net
|
|
-
|
|
-
|
|
EBITDAre
|
|
$
237,300
|
|
$
252,200
|
|
Equity-based
compensation
|
|
8,400
|
|
8,400
|
|
Debt transaction
costs
|
|
500
|
|
500
|
|
Non-recurring and
other non-cash items, net
|
|
(9,900)
|
|
(9,900)
|
|
Loss related to
non-controlling interests in consolidated joint ventures
|
|
5,000
|
|
2,100
|
|
Adjustments related to
non-controlling interests in consolidated joint ventures
|
|
(53,300)
|
|
(53,300)
|
|
Adjusted
EBITDAre
|
|
$
188,000
|
|
$
200,000
|
|
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 2024
Outlook
|
|
|
Low
|
|
High
|
|
Net loss
|
|
$
(4,000)
|
|
$
10,900
|
|
Preferred
dividends
|
|
(15,900)
|
|
(15,900)
|
|
Distributions to and
accretion of redeemable non-controlling interests
|
|
(2,600)
|
|
(2,600)
|
|
Loss related to
non-controlling interests in consolidated joint ventures
|
|
5,000
|
|
2,100
|
|
Net loss applicable
to Common Stock and Common Units
|
|
$
(17,500)
|
|
$
(5,500)
|
|
Real estate-related
depreciation
|
|
152,600
|
|
152,600
|
|
Loss on disposal of
assets and other dispositions, net
|
|
0
|
|
0
|
|
Adjustments related to
non-controlling interests in consolidated joint ventures
|
|
(33,300)
|
|
(33,300)
|
|
FFO applicable to
Common Stock and Common Units
|
|
$
101,800
|
|
$
113,800
|
|
Amortization of
deferred financing costs
|
|
5,900
|
|
5,900
|
|
Amortization of
franchise fees
|
|
600
|
|
600
|
|
Equity-based
compensation
|
|
8,400
|
|
8,400
|
|
Debt transaction
costs
|
|
500
|
|
500
|
|
Non-recurring and
other non-cash items, net
|
|
(9,900)
|
|
(9,900)
|
|
Adjustments related to
non-controlling interests in consolidated joint ventures
|
|
3,700
|
|
3,700
|
|
AFFO applicable to
Common Stock and Common Units
|
|
$
111,000
|
|
$
123,000
|
|
Weighted average
diluted shares of Common Stock and Common Units for FFO and
AFFO
|
|
123,000
|
|
123,000
|
|
FFO per Common
Stock and Common Units
|
|
$
0.83
|
|
$
0.93
|
|
AFFO per Common
Stock and Common Units
|
|
$
0.90
|
|
$
1.00
|
|
|
|
|
|
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.