Summit Hotel Properties, Inc 8-K, filed Feb 28, 2024
Summit Hotel Properties, Inc. (INN)
8-K
2024-02-28
For: 2024-02-28
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Added on
April 09, 2026
About this 8-K
Summit Hotel Properties, Inc filed this 8-K on February 28, 2024.
Items reported
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 28, 2024
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction | (Commission File Number) | (I.R.S. Employer Identification No.) | ||||||
| of incorporation or organization) | ||||||||
(Address of Principal Executive Offices) (Zip Code)
(512 ) 538-2300
(Registrant’s telephone number, including area code)
Not applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter)
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02. Results of Operations and Financial Condition.
On February 28, 2024, Summit Hotel Properties, Inc. (the “Company”) issued a press release announcing the operating results of the Company and its subsidiaries for the fourth quarter and year ended December 31, 2023. The press release referred to supplemental financial information for the fourth quarter and full year 2023 that is available on the Company’s website at www.shpreit.com. A copy of the press release and the supplemental financial information are furnished as Exhibit 99.1 and Exhibit 99.2, respectively, to this Report.
The information in this Report, including the exhibits, is provided under Item 2.02 of Form 8-K and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section. Furthermore, the information in this Report, including the exhibits, shall not be deemed to be incorporated by reference into the filings of the registrant under the Securities Act of 1933 regardless of any general incorporation language in such filings.
Item 9.01. Financial Statements and Exhibits.
| (d) | Exhibits | |||||||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | |||||||
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| SUMMIT HOTEL PROPERTIES, INC. | |||||||||||
| Date: February 28, 2024 | By: | /s/ Christopher R. Eng | |||||||||
| Christopher R. Eng Executive Vice President, General Counsel, Chief Risk Officer and Secretary | |||||||||||
1 | P a g e 13215 Bee Cave Pkwy, Suite B-300, Austin, TX 78738 Telephone: 512-538-2300 Fax: 512-538-2333 www.shpreit.com NEWS RELEASE SUMMIT HOTEL PROPERTIES REPORTS FOUTH QUARTER AND FULL YEAR 2023 RESULTS 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, February 28, 2024 - - - 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.
2 | P a g e • 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.
3 | P a g e 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.
4 | P a g e 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.
5 | P a g e 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.
6 | P a g e 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. 1. To access the conference call, please pre-register using this link. Registrants will receive a confirmation with dial- in details. 2. A live webcast of the conference call can be accessed using this link. A replay of the webcast will be available in the Investors section of the Company’s website, www.shpreit.com, until 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.
7 | P a g e 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. Contact: Adam Wudel SVP – Finance & Capital Markets Summit Hotel Properties, Inc. (512) 538-2325 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.
8 | P a g e 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
9 | P a g e 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
10 | P a g e 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.
11 | P a g e 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
12 | P a g e 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.
13 | P a g e 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.
14 | P a g e 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.
15 | P a g e 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.
16 | P a g e 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
17 | P a g e 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
18 | P a g e Non-GAAP Financial Measures We disclose certain “non-GAAP financial measures,” which are measures of our historical financial performance. Non-GAAP financial measures are financial measures not prescribed by Generally Accepted Accounting Principles ("GAAP"). These measures are as follows: (i) Funds From Operations (“FFO”) and Adjusted Funds from Operations ("AFFO"), (ii) Earnings before Interest, Taxes, Depreciation and Amortization ("EBITDA"), Earnings before Interest, Taxes, Depreciation and Amortization for Real Estate ("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.
19 | P a g e EBITDA, EBITDAre, Adjusted EBITDAre, and Hotel EBITDA In September 2017, Nareit proposed a standardized performance measure, called EBITDAre, which is based on EBITDA and is expected to provide additional relevant information about REITs as real estate companies in support of growing interest among generalist investors. The conclusion was reached that, while dedicated REIT investors have long been accustomed to utilizing the industry’s supplemental measures such as FFO and net operating income (“NOI”) to evaluate the investment quality of REITs as real estate companies, it would be helpful to generalist investors for REITs as real estate companies to also present EBITDAre as a more widely known and understood supplemental measure of performance. EBITDAre is intended to be a supplemental non-GAAP performance measure that is independent of a company’s capital structure and will provide a uniform basis for one measurement of the enterprise value of a company compared to other REITs. EBITDAre, as defined by Nareit, is calculated as EBITDA, excluding: (i) loss and gains on disposition of property and (ii) asset impairments, if any. We believe EBITDAre is useful to an investor in evaluating our operating performance because it provides investors with an indication of our ability to incur and service debt, to satisfy general operating expenses, to make capital expenditures and to fund other cash needs or reinvest cash into our business. We also believe it helps investors meaningfully evaluate and compare the results of our operations from period to period by removing the effect of our asset base (primarily depreciation and amortization) from our operating results. We make additional adjustments to EBITDAre when evaluating our performance because we believe that the exclusion of certain additional non-recurring or unusual items described below provides useful supplemental information to investors regarding our ongoing operating performance. We believe that the presentation of Adjusted EBITDAre, when combined with the primary GAAP presentation of net income, is useful to an investor in evaluating our operating performance because it provides investors with an indication of our ability to incur and service debt, to satisfy general operating expenses, to make capital expenditures and to fund other cash needs or reinvest cash into our business. We also believe it helps investors meaningfully evaluate and compare the results of our operations from period to period by removing the effect of our asset base (primarily depreciation and amortization) from our operating results. With respect to hotel EBITDA, we believe that excluding the effect of corporate-level expenses and non-cash items provides a more complete understanding of the operating results over which individual hotels and operators have direct control. We believe the property-level results provide investors with supplemental information on the ongoing operational performance of our hotels and effectiveness of the third-party management companies operating our business on a property-level basis. We caution investors that amounts presented in accordance with our definitions of EBITDA, EBITDAre, adjusted EBITDAre, and hotel EBITDA may not be comparable to similar measures disclosed by other companies, since not all companies calculate these non-GAAP measures in the same manner. EBITDA, EBITDAre, adjusted EBITDAre, and hotel EBITDA should not be considered as an alternative measure of our net income (loss) or operating performance. EBITDA, EBITDAre, adjusted EBITDAre, and hotel EBITDA may include funds that may not be available for our discretionary use due to functional requirements to conserve funds for capital expenditures and property acquisitions and other commitments and uncertainties. Although we believe that EBITDA, EBITDAre, adjusted EBITDAre, and hotel EBITDA can enhance your understanding of our financial condition and results of operations, these non-GAAP financial measures are not necessarily a better indicator of any trend as compared to a comparable GAAP measure such as net income (loss). Above, we include a quantitative reconciliation of EBITDA, EBITDAre, adjusted EBITDAre and hotel EBITDA to the most directly comparable GAAP financial performance measure, which is net income (loss) and operating income (loss).
EARNINGS RELEASE SUPPLEMENT FOURTH QUARTER 2023 (UNAUDITED) FEBRUARY 27, 2024
Table of Contents Section I Forward-Looking Statements and Non-GAAP Financial Measure Disclosures Section II Corporate Financial Schedules Section III Operating & Property-Level Schedules Section IV Capitalization and Debt Schedules Section V Asset Listing 2
Forward-Looking Statements We make forward-looking statements in this presentation that are subject to risks and uncertainties. These forward-looking statements include information about possible or assumed future results of our business, financial condition, liquidity, results of operations, plans, and objectives. When we use the words “believe,” “expect,” “anticipate,” “estimate,” “plan,” “continue,” “intend,” “should,” “may,” or similar expressions, we intend to identify forward-looking statements. Statements regarding the following subjects, among others, may be forward-looking by their nature: • our ability to increase our dividend per share of common stock; • the state of the U.S. economy generally or in specific geographic regions in which we operate, and the effect of general economic conditions on the lodging industry and our business in particular; • market trends in our industry, interest rates, real estate values and the capital markets; • our business and investment strategy and, particularly, our ability to identify and complete hotel acquisitions and dispositions; • our projected operating results; • actions and initiatives of the U.S. government and changes to U.S. government policies and the execution and impact of such actions, initiatives and policies; • our ability to manage our relationships with our management companies and franchisors; • our ability to maintain our existing and future financing arrangements; • changes in the value of our properties; • the impact of and changes in governmental regulations, tax law and rates, accounting guidance and similar matters; • our ability to satisfy the requirements for qualification as a REIT under the U.S. Tax Code; • our ability to repay or refinance our indebtedness as it matures or becomes callable by lenders; • the availability of qualified personnel; • our ability to make distributions to our stockholders in the future; • the general volatility of the market price of our securities; and • the degree and nature of our competition. Forward-looking statements are based on our beliefs, assumptions and expectations of our future performance, taking into account information currently available to us. You should not place undue reliance on these forward-looking statements. These beliefs, assumptions and expectations can change as a result of many possible events or factors, not all of which are known to us. These factors are discussed under “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2023, and in other documents we have filed with the Securities and Exchange Commission. If a change occurs, our business, financial condition, liquidity and results of operations may vary materially from those expressed in our forward-looking statements. Any forward-looking statement is effective only as of the date on which it is made. New risks and uncertainties arise over time, and it is not possible for us to predict those events or how they may affect us. Except as required by law we are not obligated to, and do not intend to, publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Additionally, this presentation contains certain unaudited historical and pro forma information and metrics which are based or calculated from historical data that is maintained or produced by Summit Hotel Properties, Inc. or third parties. This presentation contain statistics and other data that may have been obtained from, or compiled from, information made available by third-parties. 3
Non-GAAP Financial Measures We disclose certain “non-GAAP financial measures,” which are measures of our historical financial performance. Non-GAAP financial measures are financial measures not prescribed by Generally Accepted Accounting Principles ("GAAP"). These measures are as follows: (i) Funds From Operations (“FFO”) and Adjusted Funds from Operations ("AFFO"), (ii) Earnings before Interest, Taxes, Depreciation and Amortization ("EBITDA"), Earnings before Interest, Taxes, Depreciation and Amortization for Real Estate ("EBITDAre") and Adjusted EBITDAre (as described below). We caution investors that amounts presented in accordance with our definitions of non-GAAP financial measures may not be comparable to similar measures disclosed by other companies, since not all companies calculate these non-GAAP financial measures in the same manner. Our non-GAAP financial measures should be considered along with, but not as alternatives to, net income (loss) as a measure of our operating performance. Our non-GAAP financial measures may include funds that may not be available for our discretionary use due to functional requirements to conserve funds for capital expenditures, property acquisitions, debt service obligations and other commitments and uncertainties. Although we believe that our non-GAAP financial measures can enhance the understanding of our financial condition and results of operations, these non-GAAP financial measures are not necessarily better indicators of any trend as compared to a comparable measure prescribed by GAAP such as net income (loss). FFO and AFFO As defined by Nareit, FFO represents net income or loss (computed in accordance with GAAP), excluding preferred dividends, gains (or losses) from sales of real property, impairment losses on real estate assets, items classified by GAAP as extraordinary, the cumulative effect of changes in accounting principles, plus depreciation and amortization related to real estate assets, and adjustments for unconsolidated partnerships, and joint ventures. AFFO represents FFO excluding amortization of deferred financing costs, franchise fees, equity-based compensation expense, transaction costs, debt transaction costs, premiums on redemption of preferred shares, losses from net casualties, non-cash interest income and non-cash income tax related adjustments to our deferred tax asset. Unless otherwise indicated, we present FFO and AFFO applicable to our common shares and common units. We present FFO and AFFO because we consider FFO and AFFO an important supplemental measure of our operational performance and believe it is frequently used by securities analysts, investors and other interested parties in the evaluation of REITs, many of which present FFO and AFFO when reporting their results. FFO and AFFO are intended to exclude GAAP historical cost depreciation and amortization, which assumes that the value of real estate assets diminishes ratably over time. Historically, however, real estate values have risen or fallen with market conditions. Because FFO and AFFO exclude depreciation and amortization related to real estate assets, gains and losses from real property dispositions and impairment losses on real estate assets, and certain transaction costs related to lodging property acquisition activities and debt, FFO and AFFO provide performance measures that, when compared year over year, reflect the effect to operations from trends in occupancy, guestroom rates, operating costs, development activities and interest costs, providing perspective not immediately apparent from net income. Our computation of FFO differs slightly from the computation of Nareit-defined FFO related to the reporting of depreciation and amortization expense on assets at our corporate offices, which is de minimus. Our computation of FFO may also differ from the methodology for calculating FFO used by other equity REITs and, accordingly, may not be comparable to such other REITs. FFO and AFFO should not be considered as an alternative to net income (loss) (computed in accordance with GAAP) as an indicator of our liquidity, nor is it indicative of funds available to fund our cash needs, including our ability to pay dividends or make distributions. Where indicated in this Earnings Release Supplement, FFO is based on our computation of FFO and not the computation of Nareit-defined FFO unless otherwise noted. 4
Non-GAAP Financial Measures (cont.) EBITDAre and Adjusted EBITDAre In September 2017, Nareit proposed a standardized performance measure, called EBITDAre, which is based on EBITDA and is expected to provide additional relevant information about REITs as real estate companies in support of growing interest among generalist investors. The conclusion was reached that, while dedicated REIT investors have long been accustomed to utilizing the industry’s supplemental measures such as FFO and net operating income (“NOI”) to evaluate the investment quality of REITs as real estate companies, it would be helpful to generalist investors for REITs as real estate companies to also present EBITDAre as a more widely known and understood supplemental measure of performance. EBITDAre is intended to be a supplemental non-GAAP performance measure that is independent of a company’s capital structure and will provide a uniform basis for one measurement of the enterprise value of a company compared to other REITs. EBITDAre, as defined by Nareit, is calculated as EBITDA, excluding: (i) loss and gains on disposition of property and (ii) asset impairments, if any. We believe EBITDAre is useful to an investor in evaluating our operating performance because it provides investors with an indication of our ability to incur and service debt, to satisfy general operating expenses, to make capital expenditures and to fund other cash needs or reinvest cash into our business. We also believe it helps investors meaningfully evaluate and compare the results of our operations from period to period by removing the effect of our asset base (primarily depreciation and amortization) from our operating results. We make additional adjustments to EBITDAre when evaluating our performance because we believe that the exclusion of certain additional non- recurring or unusual items described below provides useful supplemental information to investors regarding our ongoing operating performance. We believe that the presentation of Adjusted EBITDAre, when combined with the primary GAAP presentation of net income, is useful to an investor in evaluating our operating performance because it provides investors with an indication of our ability to incur and service debt, to meet general operating expenses, to make capital expenditures and to fund other cash needs, or reinvest cash into our business. We also believe it helps investors meaningfully evaluate and compare the results of our operations from period to period by removing the effect of our asset base (primarily depreciation and amortization) from our operating results. 5
Table of Contents Section I Forward-Looking Statements and Non-GAAP Financial Measure Disclosures Section II Corporate Financial Schedules Section III Operating & Property-Level Schedules Section IV Capitalization and Debt Schedules Section V Asset Listing 6
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 growth -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 growth -148 bps -45 bps Summary Financial Results (Unaudited) (1) See tables later in this presentation 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 presentation. (2) Unless stated otherwise in this presentation, 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 94 hotels owned as of December 31, 2023, with operating and financial results for the three months ended December 31, 2023 and 2022. (Amounts in thousands, except per share metrics and statistics) 7
2023 Pro Forma Operating Data (1) 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) 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$ Summary Pro Forma Operating Results (Unaudited) (1) 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. 8 (Amounts in thousands, except statistics)
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 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) 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 - (417) - (417) Other non-cash items, net (258) - 455 - Adjusted EBITDAre 46,384$ 46,084$ 189,964$ 180,815$ Adjusted EBITDAre Reconciliation (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. 9 (Amounts 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$ 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 Stock 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 Stock 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 and other (11) 12 13 749 Debt transaction costs 43 362 395 1,528 Non-cash interest income, net (1) (134) - (531) (113) Non-cash lease expense, net 113 131 481 505 Casualty losses, net 261 1,451 2,112 2,505 Change 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 (2) 122,486 121,923 122,355 121,163 Adjusted FFO Reconciliation (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. 10 (Amounts in thousands, except per share metrics)
Summit Wholly-Owned GIC Joint Venture (2) Other Joint Ventures (2) Combined GIC JV Pro Rata Adj Other JVs Pro Rata Adj Pro Rata SEC Filing - 10Q/K Q4 2023 Q4 2022 Q4 2023 Q4 2022 Q4 2023 Q4 2022 Q4 2023 Q4 2022 Q4 2023 Q4 2022 Q4 2023 Q4 2022 Q4 2023 Q4 2022 Rooms sold 579,058 594,975 371,171 348,307 20,730 19,869 970,959 963,151 Rooms available 843,115 887,340 513,452 498,088 25,300 24,930 1,381,867 1,410,358 Occupancy 68.7% 67.1% 72.3% 69.9% 81.9% 79.7% 70.3% 68.3% ADR 166.76$ 162.21$ 151.49$ 152.08$ 207.09$ 208.36$ 161.78$ 159.50$ RevPAR 114.53$ 108.77$ 109.51$ 106.35$ 169.68$ 166.06$ 113.67$ 108.92$ Room revenue 96,561 96,512 56,227 52,971 4,293 4,140 157,081 153,623 Other revenue 10,332 9,596 7,158 6,953 2,864 2,154 20,354 18,703 Total revenue 106,893$ 106,108$ 63,385$ 59,924$ 7,157$ 6,294$ 177,435$ 172,326$ Hotel EBITDA 36,082$ 35,237$ 23,501$ 24,853$ 2,695$ 1,959$ 62,278$ 62,049$ % margin 33.8% 33.2% 37.1% 41.5% 37.7% 31.1% 35.1% 36.0% Net (loss) income (8,137)$ (7,904)$ (13,679)$ (4,356)$ 549$ 178$ (21,267)$ (12,082)$ 6,786$ 2,916$ (55)$ (18)$ (14,536)$ (9,184)$ Depreciation and amortization 20,174 20,001 17,370 16,711 1,080 986 38,624 37,698 (8,511) (8,188) (108) (99) 30,005 29,411 Interest expense 8,417 7,885 12,183 10,681 1,021 813 21,621 19,379 (5,970) (5,234) (102) (81) 15,549 14,064 Interest income (169) (35) (9) (10) - - (178) (45) 4 5 - - (174) (40) Income tax expense (benefit) 401 (2,316) 718 1,280 - - 1,119 (1,036) (352) (627) - - 767 (1,663) EBITDA 20,686$ 17,631$ 16,583$ 24,306$ 2,650$ 1,977$ 39,919$ 43,914$ (8,043)$ (11,128)$ (265)$ (198)$ 31,611$ 32,588$ Loss on write-down or impairment of assets 11,270 10,420 5,391 - - - 16,661 10,420 (2,642) - - - 14,019 10,420 Loss (gain) on disposal of assets and other dispositions, net (7) 177 8 (13) - - 1 164 (4) 6 - - (3) 170 EBITDAre 31,949$ 28,228$ 21,982$ 24,293$ 2,650$ 1,977$ 56,581$ 54,498$ (10,689)$ (11,122)$ (265)$ (198)$ 45,627$ 43,178$ Recoveries of provisions for credit losses (730) - - - - - (730) - - - - - (730) - Amortization of key money liabilities (51) (27) (51) (51) (18) (18) (120) (96) 25 25 2 2 (93) (69) Equity-based compensation 1,829 1,376 - - - - 1,829 1,376 - - - - 1,829 1,376 Transaction costs and other 1 12 (12) - - - (11) 12 6 - - - (5) 12 Debt transaction costs 44 362 (1) - - - 43 362 - - - - 43 362 Non-cash interest income (1) (134) - - - - - (134) - - - - - (134) - Non-cash lease expense, net 104 121 9 10 - - 113 131 (4) (5) - - 109 126 Casualty losses, net (283) 1,581 544 (130) - - 261 1,451 (267) 64 - - (6) 1,515 Special allocation related to sale of joint venture - (417) - - - - - (417) - - - - - (417) Other (256) 2 (2) (2) - - (258) - 2 1 - - (256) 1 Adjusted EBITDAre 32,473$ 31,238$ 22,469$ 24,120$ 2,632$ 1,959$ 57,574$ 57,317$ (10,927)$ (11,037)$ (263)$ (196)$ 46,384$ 46,084$ Reconciliation to Adjusted EBITDAre – By Ownership Interest (Unaudited) Q4 2023 (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) GIC Joint Venture is 51% owned by Summit while Other Joint Ventures are 90% owned by Summit. 11 (Amounts in thousands, except statistics)
Summit Wholly-Owned GIC Joint Venture (2) Other Joint Ventures (2) Combined GIC JV Pro Rata Adj Other JVs Pro Rata Adj Pro Rata SEC Filing - 10Q/K FYE 2023 FYE 2022 FYE 2023 FYE 2022 FYE 2023 FYE 2022 FYE 2023 FYE 2022 FYE 2023 FYE 2022 FYE 2023 FYE 2022 FYE 2023 FYE 2022 Rooms sold 2,416,720 2,442,311 1,479,685 1,361,179 78,664 39,063 3,975,069 3,842,553 Rooms available 3,410,723 3,520,394 2,010,814 1,941,252 100,375 54,762 5,521,912 5,516,408 Occupancy 70.9% 69.4% 73.6% 70.1% 78.4% 71.3% 72.0% 69.7% ADR 168.39$ 162.28$ 157.06$ 151.28$ 212.28$ 181.76$ 165.04$ 158.58$ RevPAR 119.32$ 112.59$ 115.58$ 106.08$ 166.37$ 129.65$ 118.81$ 110.46$ Room revenue 406,960 396,350 232,404 205,920 16,699 7,100 656,063 609,370 Other revenue 41,421 36,010 28,078 25,596 10,565 4,719 80,064 66,325 Total revenue 448,381$ 432,360$ 260,482$ 231,516$ 27,264$ 11,819$ 736,127$ 675,695$ Hotel EBITDA 149,478$ 146,846$ 99,920$ 89,034$ 8,624$ 2,581$ 258,022$ 238,461$ % margin 33.3% 34.0% 38.4% 38.5% 31.6% 21.8% 35.1% 35.3% Net (loss) income 2,081$ (3,969)$ (30,589)$ 6,364$ 392$ (1,178)$ (28,116)$ 1,217$ 14,863$ (2,439)$ (39)$ 118$ (13,292)$ (1,104)$ Depreciation and amortization 78,122 81,170 68,636 66,760 4,166 2,230 150,924 150,160 (33,632) (32,712) (417) (223) 116,875 117,225 Interest expense 34,198 35,016 48,692 28,995 3,908 1,570 86,798 65,581 (23,859) (14,208) (391) (157) 62,548 51,216 Interest income (523) (53) (45) (12) - - (568) (65) 22 6 - - (546) (59) Income tax expense (benefit) 428 500 2,370 3,111 - - 2,798 3,611 (1,161) (1,524) - - 1,637 2,087 EBITDA 114,306$ 112,664$ 89,064$ 105,218$ 8,466$ 2,622$ 211,836$ 220,504$ (43,767)$ (50,877)$ (847)$ (262)$ 167,222$ 169,365$ Loss on write-down or impairment of assets 11,270 10,420 5,391 - - - 16,661 10,420 (2,642) - - - 14,019 10,420 Loss (gain) on disposal of assets and other dispositions, net 338 190 47 (20,505) - - 385 (20,315) (23) 10,047 - - 362 (10,268) EBITDAre 125,914$ 123,274$ 94,502$ 84,713$ 8,466$ 2,622$ 228,882$ 210,609$ (46,432)$ (40,830)$ (847)$ (262)$ 181,603$ 169,517$ Recoveries of provisions for credit losses (1,230) (1,100) - - - - (1,230) (1,100) - - - - (1,230) (1,100) Amortization of key money liabilities (220) (128) (206) (193) (72) (42) (498) (363) 101 95 7 4 (390) (264) Equity-based compensation 7,742 8,446 - - - - 7,742 8,446 - - - - 7,742 8,446 Transaction costs and other 14 12 (1) 737 - - 13 749 - (361) - - 13 388 Debt transaction costs 270 1,492 125 36 - - 395 1,528 (61) (18) - - 334 1,510 Non-cash interest income (1) (531) (113) - - - - (531) (113) - - - - (531) (113) Non-cash lease expense, net 438 476 43 29 - - 481 505 (21) (14) - - 460 491 Casualty losses, net 789 2,203 1,214 302 109 - 2,112 2,505 (595) (148) (11) - 1,506 2,357 Special allocation related to sale of joint venture - (417) - - - - - (417) - - - - - (417) Other 457 - (1) - (1) - 455 - 2 - - - 457 - Adjusted EBITDAre 133,643$ 134,145$ 95,676$ 85,624$ 8,502$ 2,580$ 237,821$ 222,349$ (47,006)$ (41,276)$ (851)$ (258)$ 189,964$ 180,815$ Reconciliation to Adjusted EBITDAre – By Ownership Interest (Unaudited) FYE 2023 (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) GIC Joint Venture is 51% owned by Summit while Other Joint Ventures are 90% owned by Summit. 12 (Amounts in thousands, except statistics)
Summit Wholly-Owned GIC Joint Venture (3) Other Joint Ventures (3) Combined GIC JV Pro Rata Adj Other JVs Pro Rata Adj Pro Rata Q4 2023 Q4 2022 Q4 2023 Q4 2022 Q4 2023 Q4 2022 Q4 2023 Q4 2022 Q4 2023 Q4 2022 Q4 2023 Q4 2022 Q4 2023 Q4 2022 Net (loss) income (8,137)$ (7,904)$ (13,679)$ (4,356)$ 549$ 178$ (21,267)$ (12,082)$ 6,786 2,916 (55) (18) (14,536)$ (9,184)$ Preferred dividends (3,969) (3,969) - - - - (3,969) (3,969) - - - - (3,969) (3,969) Distributions to and accretion of redeemable non-controlling interests (656) (654) - - - - (656) (654) - - - - (656) (654) Net loss applicable to Common Stock and Common Units (12,762)$ (12,527)$ (13,679)$ (4,356)$ 549$ 178$ (25,892)$ (16,705)$ 6,786$ 2,916$ (55)$ (18)$ (19,161)$ (13,807)$ Real estate-related depreciation 20,049 19,897 16,325 15,668 1,062 968 37,436 36,533 (7,999) (7,677) (106) (97) 29,331 28,759 Loss on write-down or impairment of assets 11,270 10,420 5,391 - - - 16,661 10,420 (2,642) - - - 14,019 10,420 Loss (gain) on disposal of assets and other dispositions, net (7) 177 8 (13) - - 1 164 (4) 6 - - (3) 170 FFO applicable to Common Stock and Common Units 18,550$ 17,967$ 8,045$ 11,299$ 1,611$ 1,146$ 28,206$ 30,412$ (3,859)$ (4,755)$ (161)$ (115)$ 24,186$ 25,542$ Recoveries of provisions for credit losses (730) - - - - - (730) - - - - - (730) - Amortization of deferred financing costs 1,070 990 446 465 15 15 1,531 1,470 (219) (228) (2) (2) 1,310 1,240 Amortization of franchise fees 73 78 83 81 - - 156 159 (41) (40) - - 115 119 Amortization of intangible assets, net (2) - 911 911 - - 909 911 (446) (446) - - 463 465 Equity-based compensation 1,829 1,376 - - - - 1,829 1,376 - - - - 1,829 1,376 Transaction costs and other 1 12 (12) - - - (11) 12 6 - - - (5) 12 Debt transaction costs 44 362 (1) - - - 43 362 - - - - 43 362 Non-cash interest income (1) (134) - - - - - (134) - - - - - (134) - Non-cash lease expense, net 104 121 9 10 - - 113 131 (4) (5) - - 109 126 Casualty losses, net (283) 1,581 544 (130) - - 261 1,451 (267) 64 - - (6) 1,515 Change in deferred tax asset valuation allowance - - 21 - - - 21 - (10) - - - 11 - Special allocation related to sale of joint venture - (417) - - - - - (417) - - - - - (417) Other (257) - (1) (1) - 1 (258) - 2 - - - (256) - AFFO applicable to Common Stock and Common Units 20,265$ 22,070$ 10,045$ 12,635$ 1,626$ 1,162$ 31,936$ 35,867$ (4,838)$ (5,410)$ (163)$ (117)$ 26,935$ 30,340$ FFO per Common Stock and Common Units 0.20$ 0.21$ AFFO per Common Stock and Common Units 0.22$ 0.25$ Weighted average diluted shares of Common Stock and Common Units FFO and AFFO (2) 122,486 121,923 Reconciliation to Adjusted FFO – By Ownership Interest (Unaudited) Q4 2023 (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. (3) GIC Joint Venture is 51% owned by Summit while Other Joint Ventures are 90% owned by Summit. 13 (Amounts in thousands, except per share metrics)
Summit Wholly-Owned GIC Joint Venture (3) Other Joint Ventures (3) Combined GIC JV Pro Rata Adj Other JVs Pro Rata Adj Pro Rata FYE 2023 FYE 2022 FYE 2023 FYE 2022 FYE 2023 FYE 2022 FYE 2023 FYE 2022 FYE 2023 FYE 2022 FYE 2023 FYE 2022 FYE 2023 FYE 2022 Net (loss) income 2,081$ (3,969)$ (30,589)$ 6,364$ 392$ (1,178)$ (28,116)$ 1,217$ 14,863 (2,439) (39) 118 (13,292)$ (1,104)$ Preferred dividends (15,875) (15,875) - - - - (15,875) (15,875) - - - - (15,875) (15,875) Distributions to and accretion of redeemable non-controlling interests (2,626) (2,520) - - - - (2,626) (2,520) - - - - (2,626) (2,520) Net loss applicable to Common Stock and Common Units (16,420)$ (22,364)$ (30,589)$ 6,364$ 392$ (1,178)$ (46,617)$ (17,178)$ 14,863$ (2,439)$ (39)$ 118$ (31,793)$ (19,499)$ Real estate-related depreciation 77,628 80,705 64,465 62,599 4,094 2,188 146,187 145,492 (31,588) (30,673) (409) (219) 114,190 114,600 Loss on write-down or impairment of assets 11,270 10,420 5,391 - - - 16,661 10,420 (2,642) - - - 14,019 10,420 Loss (gain) on disposal of assets and other dispositions, net 338 190 47 (20,505) - - 385 (20,315) (23) 10,047 - - 362 (10,268) FFO applicable to Common Stock and Common Units 72,816$ 68,951$ 39,314$ 48,458$ 4,486$ 1,010$ 116,616$ 118,419$ (19,390)$ (23,065)$ (448)$ (101)$ 96,778$ 95,253$ Recoveries of provisions for credit losses (1,230) (1,100) - - - - (1,230) (1,100) - - - - (1,230) (1,100) Amortization of deferred financing costs 3,941 3,815 1,909 1,858 60 35 5,910 5,708 (935) (910) (6) (4) 4,969 4,794 Amortization of franchise fees 274 338 321 325 - - 595 663 (157) (159) - - 438 504 Amortization of intangible assets, net (1) - 3,643 3,643 - - 3,642 3,643 (1,785) (1,785) - - 1,857 1,858 Equity-based compensation 7,742 8,446 - - - - 7,742 8,446 - - - - 7,742 8,446 Transaction costs and other 14 12 (1) 737 - - 13 749 - (361) - - 13 388 Debt transaction costs 270 1,492 125 36 - - 395 1,528 (61) (18) - - 334 1,510 Non-cash interest income (1) (531) (113) - - - - (531) (113) - - - - (531) (113) Non-cash lease expense, net 438 476 43 29 - - 481 505 (21) (14) - - 460 491 Casualty losses, net 789 2,203 1,214 302 109 - 2,112 2,505 (595) (148) (11) - 1,506 2,357 Change in deferred tax asset valuation allowance - - 84 - - - 84 - (41) - - - 43 - Special allocation related to sale of joint venture - (417) - - - - - (417) - - - - - (417) Other 447 - - - - - 447 - - (1) - - 447 (1) AFFO applicable to Common Stock and Common Units 84,969$ 84,103$ 46,652$ 55,388$ 4,655$ 1,045$ 136,276$ 140,536$ (22,985)$ (26,461)$ (465)$ (105)$ 112,826$ 113,970$ FFO per Common Stock and Common Units 0.79$ 0.79$ AFFO per Common Stock and Common Units 0.92$ 0.94$ Weighted average diluted shares of Common Stock and Common Units FFO and AFFO (2) 122,355 121,163 Reconciliation to Adjusted FFO – By Ownership Interest (Unaudited) FYE 2023 (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. (3) GIC Joint Venture is 51% owned by Summit while Other Joint Ventures are 90% owned by Summit. 14 (Amounts in thousands, except per share metrics)
FYE 2024 Outlook 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$ Full Year 2024 Outlook (Unaudited) (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. 15 (Amounts in thousands, except per share metrics and statistics)
Table of Contents Section I Forward-Looking Statements and Non-GAAP Financial Measure Disclosures Section II Corporate Financial Schedules Section III Operating & Property-Level Schedules Section IV Capitalization and Debt Schedules Section V Asset Listing 16
INN Wholly-Owned (56 Hotels) GIC Joint Venture (41 Hotels) Other Joint Ventures (3 Hotels) Pro Forma (100 Hotels) 2023 2022 2023 2022 2023 2022 2023 2022 Pro Forma Operating Data (1) Occupancy 68.8% 67.5% 72.3% 70.1% 81.9% 79.7% 70.4% 68.7% ADR 167.35$ 165.26$ 151.48$ 152.56$ 207.07$ 212.02$ 162.10$ 161.40$ RevPAR 115.15$ 111.51$ 109.51$ 106.93$ 169.67$ 169.08$ 114.05$ 110.85$ Occupancy change 2.0% 3.1% 2.7% 2.4% ADR change 1.3% -0.7% -2.3% 0.4% RevPAR change 3.3% 2.4% 0.3% 2.9% Pro forma total revenues 106,257$ 102,304$ 63,385$ 61,901$ 7,157$ 6,406$ 176,798$ 170,612$ Pro forma hotel EBITDA 36,167$ 34,781$ 23,501$ 25,971$ 2,695$ 2,030$ 62,363$ 62,782$ Pro forma hotel EBITDA Margin 34.0% 34.0% 37.1% 42.0% 37.7% 31.7% 35.3% 36.8% Pro Forma Operating Results – By Ownership Interest (Unaudited) (1) 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 any 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 the date the Acquired Hotels were purchased by the Company (the “Pre-acquisition Period”). The financial results for the Pre-acquisition Period were provided by the third-party owner of such Acquired Hotel prior to purchase by the Company and have not been audited or reviewed by our auditors or adjusted by us. The pro forma information is included to enable comparison of results for the current reporting period to results for the comparable period of the prior year and are not indicative of future results. Q4 2023 17 (Amounts in thousands, except statistics)
INN Wholly-Owned (56 Hotels) GIC Joint Venture (41 Hotels) Other Joint Ventures (3 Hotels) Pro Forma (100 Hotels) 2023 2022 2023 2022 2023 2022 2023 2022 Pro Forma Operating Data (1) Occupancy 71.2% 69.7% 73.6% 69.9% 78.4% 73.3% 72.2% 69.9% ADR 169.97$ 165.37$ 158.06$ 151.95$ 212.28$ 212.28$ 166.27$ 161.27$ RevPAR 121.03$ 115.29$ 116.37$ 106.29$ 166.37$ 155.52$ 120.12$ 112.67$ Occupancy change 2.1% 5.3% 7.0% 3.4% ADR change 2.8% 4.0% 0.0% 3.1% RevPAR change 5.0% 9.5% 7.0% 6.6% Pro forma total revenues 441,187$ 416,297$ 265,197$ 241,035$ 27,264$ 23,639$ 733,648$ 680,972$ Pro forma hotel EBITDA 149,555$ 144,696$ 102,357$ 93,499$ 8,624$ 7,556$ 260,536$ 245,752$ Pro forma hotel EBITDA Margin 33.9% 34.8% 38.6% 38.8% 31.6% 32.0% 35.5% 36.1% Pro Forma Operating Results – By Ownership Interest (Unaudited) (1) 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 any 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 the date the Acquired Hotels were purchased by the Company (the “Pre-acquisition Period”). The financial results for the Pre-acquisition Period were provided by the third-party owner of such Acquired Hotel prior to purchase by the Company and have not been audited or reviewed by our auditors or adjusted by us. The pro forma information is included to enable comparison of results for the current reporting period to results for the comparable period of the prior year and are not indicative of future results. FYE 2023 18 (Amounts in thousands, except statistics)
Pro Forma (100) Hotels - 2023 (1) Q1 Q2 Q3 Oct Nov Dec Q4 FYE Occupancy 69.6% 75.5% 73.4% 77.0% 70.8% 63.3% 70.4% 72.2% ADR 174.96$ 168.75$ 159.69$ 176.53$ 158.91$ 148.02$ 162.10$ 166.27$ RevPAR 121.83$ 127.48$ 117.25$ 135.88$ 112.47$ 93.73$ 114.05$ 120.12$ 2022 Variance Occupancy change vs 2022 7.5% 1.6% 2.6% 1.2% 2.9% 3.5% 2.4% 3.4% ADR change vs 2022 11.2% 1.9% -0.2% 2.1% 0.4% -1.6% 0.4% 3.1% RevPAR change vs 2022 19.5% 3.5% 2.4% 3.3% 3.3% 1.9% 2.9% 6.6% Summary Pro Forma Operating Results (Unaudited) (1) 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 any 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 the date the Acquired Hotels were purchased by the Company (the “Pre-acquisition Period”). The financial results for the Pre-acquisition Period were provided by the third-party owner of such Acquired Hotel prior to purchase by the Company and have not been audited or reviewed by our auditors or adjusted by us. The pro forma information is included to enable comparison of results for the current reporting period to results for the comparable periods of the prior years and are not indicative of future results. 19
Summary Same Store Operating Results (Unaudited) (1) Unaudited same store information includes operating results for 94 same store hotels owned as of December 31, 2023, as if all such hotels had been owned by the Company since January 1, 2022. For any hotels acquired by the Company after January 1, 2022 (the “Acquired Hotels”), the Company has included in the same store information the financial results of each of the Acquired Hotels for the period from January 1, 2022, to the date the Acquired Hotels were purchased by the Company (the “Pre-acquisition Period”). The financial results for the Pre-acquisition Period were provided by the third-party owner of such Acquired Hotel prior to purchase by the Company and have not been audited or reviewed by our auditors or adjusted by us. The same store information is included to enable comparison of results for the current reporting period to results for the comparable periods of the prior years and are not indicative of future results. 20 Same Store (94) Hotels - 2023 (1) Q1 Q2 Q3 Oct Nov Dec Q4 FYE Occupancy 69.3% 75.7% 73.8% 77.1% 70.7% 63.0% 70.3% 72.3% ADR 171.37$ 168.13$ 160.19$ 176.52$ 157.80$ 145.35$ 160.96$ 165.09$ RevPAR 118.75$ 127.32$ 118.21$ 136.09$ 111.60$ 91.58$ 113.11$ 119.33$ 2022 Variance Occupancy change vs 2022 7.5% 1.4% 2.3% 1.2% 3.1% 3.8% 2.6% 3.3% ADR change vs 2022 11.1% 2.2% 0.0% 2.3% 0.5% -1.5% 0.6% 3.2% RevPAR change vs 2022 19.4% 3.6% 2.4% 3.5% 3.7% 2.2% 3.2% 6.6%
GIC JV (41) Hotels - 2023 (1) Q1 Q2 Q3 Oct Nov Dec Q4 FYE Occupancy 72.6% 76.5% 73.2% 75.5% 72.7% 68.7% 72.3% 73.6% ADR 175.25$ 156.03$ 149.97$ 162.65$ 151.03$ 139.68$ 151.48$ 158.06$ RevPAR 127.19$ 119.33$ 109.71$ 122.74$ 109.85$ 95.95$ 109.51$ 116.37$ 2022 Variance Occupancy change vs 2022 7.2% 5.1% 5.8% -0.7% 4.6% 6.1% 3.1% 5.3% ADR change vs 2022 12.3% 3.4% 0.9% 1.1% 0.4% -3.7% -0.7% 4.0% RevPAR change vs 2022 20.4% 8.7% 6.8% 0.4% 5.1% 2.2% 2.4% 9.5% Other JVs (3) Hotels - 2023 (1) Q1 Q2 Q3 Oct Nov Dec Q4 FYE Occupancy 86.1% 75.9% 69.7% 82.8% 83.5% 79.5% 81.9% 78.4% ADR 264.85$ 208.83$ 158.57$ 181.29$ 194.16$ 247.07$ 207.07$ 212.28$ RevPAR 228.15$ 158.41$ 110.50$ 150.18$ 162.20$ 196.38$ 169.67$ 166.37$ 2022 Variance Occupancy change vs 2022 12.2% 5.8% 7.4% 3.4% 4.1% 0.7% 2.7% 7.0% ADR change vs 2022 8.6% -5.7% -4.6% -2.3% -9.3% 4.3% -2.3% 0.0% RevPAR change vs 2022 21.8% -0.2% 2.5% 1.0% -5.5% 5.1% 0.3% 7.0% Summary Joint Venture Operating Results (Unaudited) (1) Unaudited joint venture information includes operating results for 44 JV hotels owned as of December 31, 2023, as if all such hotels had been owned by the Company since January 1, 2022. For any hotels acquired by the Company after January 1, 2022 (the “Acquired Hotels”), the Company has included in the joint venture information the financial results of each of the Acquired Hotels for the period from January 1, 2022, to the date the Acquired Hotels were purchased by the Company (the “Pre-acquisition Period”). The financial results for the Pre-acquisition Period were provided by the third-party owner of such Acquired Hotel prior to purchase by the Company and have not been audited or reviewed by our auditors or adjusted by us. The joint venture 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. 21
Table of Contents Section I Forward-Looking Statements and Non-GAAP Financial Measure Disclosures Section II Corporate Financial Schedules Section III Operating & Property-Level Schedules Section IV Capitalization and Debt Schedules Section V Asset Listing 22
December 31, September 30, June 30, March 31, December 31, (in thousands, except per share data) 2023 2023 2023 2023 2022 Common Share Price & Dividends At quarter ended 6.72$ 5.80$ 6.51$ 7.00$ 7.22$ High during quarter ended 6.98$ 6.87$ 7.26$ 8.81$ 8.75$ Low during quarter ended 5.31$ 5.40$ 6.01$ 6.17$ 6.66$ Common dividends per share 0.06$ 0.06$ 0.06$ 0.04$ 0.04$ Common Shares & Units Common shares outstanding 107,593 107,573 107,570 107,470 106,902 Common units outstanding 15,949 15,970 15,977 15,977 15,977 Total common shares and units outstanding 123,542 123,543 123,547 123,447 122,879 Capitalization Market value of common equity at quarter end 830,202$ 716,549$ 804,291$ 864,129$ 887,186$ Par value of preferred equity - 6.250% Series E 160,000 160,000 160,000 160,000 160,000 Par value of preferred equity - 5.875% Series F 100,000 100,000 100,000 100,000 100,000 Par value of preferred equity - 5.250% Series Z 50,000 50,000 50,000 50,000 50,000 Consolidated total debt 1,445,839 1,461,340 1,466,936 1,477,432 1,463,124 Less: consolidated unrestricted cash (37,837) (55,307) (58,456) (60,678) (51,255) Consolidated total enterprise value 2,548,204$ 2,432,582$ 2,522,771$ 2,590,883$ 2,609,055$ Noncontrolling interest in consolidated total debt - GIC JV (308,151) (308,182) (308,262) (308,291) (308,369) Noncontrolling interest in consolidated total debt - Other JVs (4,700) (4,700) (4,700) (4,700) (4,700) Noncontrolling interest in consolidated total cash - GIC JV 8,498 11,896 13,077 14,455 12,937 Noncontrolling interest in consolidated total cash - Other JVs 260 253 301 298 259 Pro rata total enterprise value 2,244,111$ 2,131,849$ 2,223,187$ 2,292,645$ 2,309,182$ Capitalization – Total Enterprise Value (Unaudited) 23
(amounts in thousands) Spread Base Rate Interest Rate Fixed / Variable Fully-Extended Maturity Date Number of Encumbered Properties Principal Outstanding Noncontrolling Interests Pro Rata Principal Outstanding Senior Credit Facility $400 Million Revolver (1) 1.95% 5.46% 7.41% Variable June 21, 2028 n/a - - - $200 Million Term Loan (1) 1.90% 5.46% 7.36% Variable June 21, 2028 n/a 200,000 - 200,000 Total Senior Credit and Term Loan Facility 200,000$ -$ 200,000$ $225 Million Unsecured Term Loan (2,3) 1.75% 5.46% 7.21% Variable February 14, 2025 n/a 225,000$ -$ 225,000$ Convertible Notes n/a n/a 1.50% Fixed February 15, 2026 n/a 287,500$ -$ 287,500$ Secured Mortgage Indebtedness Metabank (Bayside) n/a n/a 4.44% Fixed July 01, 2027 3 42,611 - 42,611 Bank of the Cascades (First Interstate Bank) (2) 2.00% 5.33% 7.33% Variable December 19, 2024 1 7,425 - 7,425 n/a n/a 4.30% Fixed December 19, 2024 7,425 - 7,425 Total Mortgage Loans 4 57,461$ -$ 57,461$ 4 769,961$ -$ 769,961$ Brickell Joint Venture Mortgage Loan City National Bank of Florida (3) 3.00% 5.35% 8.35% Variable June 09, 2025 2 47,000 (4,700) 42,300 GIC Joint Venture Credit Facility and Term Loans $125 Million Revolver (2) 2.15% 5.46% 7.61% Variable September 15, 2028 n/a 125,000 (61,250) 63,750 $75 Million Term Loan (2) 2.10% 5.46% 7.56% Variable September 15, 2028 n/a 75,000 (36,750) 38,250 $410 Million Term Loan (2) 2.75% 5.47% 8.22% Variable January 13, 2027 n/a 410,000 (200,900) 209,100 Wells Fargo CMBS Loan n/a n/a 4.99% Fixed June 06, 2028 1 12,785 (6,265) 6,520 Twain Financial PACE Loan n/a n/a 6.10% Fixed July 31, 2040 1 6,093 (2,985) 3,108 Total GIC Joint Venture Credit Facility and Term Loans 2 628,878$ (308,150)$ 320,728$ Total Joint Venture Debt 4 675,878$ (312,850)$ 363,028$ Total Debt 8 1,445,839$ (312,850)$ 1,132,989$ Debt Schedule – Part I (Unaudited) (1) Interest rate is based on a variable spread plus 1-month term SOFR plus a 0.1% SOFR adjustment after being converted from a 30-day LIBOR-based loan. (2) Interest rate is based on a spread plus 1-month term SOFR. (3) The 2025 term loan was refinanced in February 2024 for $200 million with an extended-maturity date of February 2029. As of December 31, 2023 24
(amounts in thousands) Principal Amount Outstanding Fixed Debt Outstanding Variable Debt Outstanding Effective Interest Rate Total Debt 1,445,839$ 356,415$ 1,089,424$ 6.35% Noncontrolling Interests in Joint Ventures (312,850) (9,251) (303,599) Pro Rata Debt 1,132,989$ 347,164$ 785,825$ 5.91% % of Pro Rata Debt 100% 31% 69% Adjustment for Effective Swaps 0 502,000 (502,000) Pro Rata Debt Including Swaps 1,132,989$ 849,164$ 283,825$ 4.76% % of Pro Rata Debt Including Swaps 100% 75% 25% Interest Rate Swaps (1) Notional Value Swap Rate Effective Date Maturity Date Regions - 2018 - $75mm 75,000 2.8570% September 28, 2018 September 30, 2024 Regions - 2018 - $125mm 125,000 2.9170% December 31, 2018 December 31, 2025 Capital One - 2022 - $100mm 100,000 2.6000% January 31, 2023 January 31, 2027 Regions - 2022 - $100mm 100,000 2.5625% January 31, 2023 January 31, 2029 Current Wholly-Owned Swaps 400,000$ 2.7379% October 22, 2026 Capital One - 2023 - $100mm 100,000 3.3540% July 01, 2023 January 13, 2026 Wells Fargo - 2023 - $100mm 100,000 3.3540% July 01, 2023 January 13, 2026 Current JV Swaps 200,000$ 3.3540% January 13, 2026 Total Swaps 600,000$ 2.9433% July 20, 2026 Debt Schedule – Part II (Unaudited) As of December 31, 2023 25 (1) On January 19, 2024, the Company’s joint venture with GIC entered into a new 100-million interest rate swap at a fixed rate of 3.765%, an effective date of October 1, 2024, and a maturity date of January 13, 2026.
$200 $225 $288 $0 $102 $209 $7 $3 $42 $15 $43 $0 $100 $200 $300 $400 $500 2023 2024 2025 2026 2027 2028 2029+ Pro Rata Debt Maturity Ladder $400M Senior Revolver $200M Senior Term Loan $225M Senior Term Loan Convertible Senior Notes $200M GIC JV Credit Facility $410M GIC JV Term Loan GIC JV Mortgage Debt Brickell JV Mortgage Debt Mortgage Debt Debt Schedule – Part III (Unaudited) (1) Amounts are in millions ($) and assumes fully-extended maturities for all loans. Reflects pro rata debt totals. (2) The 2025 term loan was refinanced in February 2024 for $200 million with an extended-maturity date of February 2029. 26 As of December 31, 2023 (2)
Table of Contents Section I Forward-Looking Statements and Non-GAAP Financial Measure Disclosures Section II Corporate Financial Schedules Section III Operating & Property-Level Schedules Section IV Capitalization and Debt Schedules Section V Asset Listing 27
Hotels Rooms STR Chain Scale STR Location INN Wholly-Owned (100% Ownership) Courtyard - New Orleans/Metairie 1 153 Upscale Airport Doubletree by Hilton San Francisco Airport North Bayfront 1 210 Upscale Airport Four Points - San Francisco Airport 1 101 Upscale Airport Hyatt House - Miami Airport 1 163 Upscale Airport Hyatt Place - Portland Airport/Cascade Station 1 136 Upscale Airport Residence Inn - New Orleans/Metairie 1 120 Upscale Airport Residence Inn - Portland Airport at Cascade Station 1 124 Upscale Airport Courtyard - Fort Lauderdale Beach 1 261 Upscale Resort Hyatt House - Across From Universal Orlando Resort 1 168 Upscale Resort Hyatt Place - Orlando/Convention Center 1 151 Upscale Resort Hyatt Place - Orlando/Universal 1 150 Upscale Resort Hyatt Place - Scottsdale/Old Town 1 126 Upscale Resort Hotel Indigo - Asheville Downtown 1 116 Upper Upscale Small Metro/Town Courtyard - Atlanta Decatur Downtown/Emory 1 179 Upscale Suburban Courtyard - Dallas/Arlington South 1 103 Upscale Suburban Courtyard - Kansas City Country Club Plaza 1 123 Upscale Suburban Hampton Inn & Suites - Camarillo 1 116 Upper Midscale Suburban Hampton Inn & Suites - San Diego/Poway 1 108 Upper Midscale Suburban Hilton Garden Inn - Greenville 1 120 Upscale Suburban Hilton Garden Inn - Houston/Energy Corridor 1 190 Upscale Suburban Hilton Garden Inn - Waltham 1 148 Upscale Suburban Hyatt House - Denver Tech Center 1 135 Upscale Suburban Hyatt Place - Denver South/Park Meadows 1 127 Upscale Suburban Hyatt Place - Denver Tech Center 1 126 Upscale Suburban Hyatt Place - Garden City 1 122 Upscale Suburban Hyatt Place - Phoenix/Mesa 1 152 Upscale Suburban Residence Inn - Baltimore/Hunt Valley 1 141 Upscale Suburban Residence Inn - Boston/Watertown 1 150 Upscale Suburban Residence Inn - Bridgewater/Branchburg 1 101 Upscale Suburban Residence Inn - Dallas/Arlington South 1 96 Upscale Suburban Staybridge Suites - Denver/Cherry Creek 1 121 Upscale Suburban Asset Listing (Unaudited) 28
Hotels Rooms STR Chain Scale STR Location INN Wholly-Owned (100% Ownership), (cont.) AC Hotel - Atlanta Downtown 1 255 Upscale Urban Courtyard - Atlanta Downtown 1 150 Upscale Urban Courtyard - Charlotte City Center 1 181 Upscale Urban Courtyard - Fort Worth Downtown/Blackstone 1 203 Upscale Urban Courtyard - Indianapolis Downtown 1 297 Upscale Urban Courtyard - Nashville Vanderbilt/West End 1 226 Upscale Urban Courtyard - New Haven at Yale 1 207 Upscale Urban Courtyard - New Orleans Downtown Near the French Quarter 1 140 Upscale Urban Courtyard - New Orleans Downtown/Convention Center 1 202 Upscale Urban Fairfield Inn & Suites - Louisville Downtown 1 140 Upper Midscale Urban Hampton Inn & Suites - Austin/Downtown/Convention Center 1 209 Upper Midscale Urban Hampton Inn & Suites - Baltimore Inner Harbor 1 116 Upper Midscale Urban Hampton Inn & Suites - Minneapolis/Downtown 1 211 Upper Midscale Urban Hilton Garden Inn - Houston/Galleria Area 1 182 Upscale Urban Holiday Inn Express & Suites - San Francisco/Fisherman's Wharf 1 252 Upper Midscale Urban Hyatt Place - Chicago/Downtown-The Loop 1 206 Upscale Urban Hyatt Place - Minneapolis/Downtown 1 213 Upscale Urban Marriott - Boulder 1 165 Upper Upscale Urban Residence Inn - Atlanta Midtown/Peachtree at 17th 1 160 Upscale Urban Residence Inn - Baltimore Downtown/Inner Harbor 1 189 Upscale Urban Residence Inn - Cleveland Downtown 1 175 Upscale Urban SpringHill Suites - Indianapolis Downtown 1 156 Upscale Urban SpringHill Suites - Louisville Downtown 1 198 Upscale Urban Springhill Suites - Nashville MetroCenter 1 78 Upscale Urban SpringHill Suites - New Orleans Downtown 1 208 Upscale Urban INN Wholly-Owned (100% Ownership) 56 9,056 Asset Listing (Unaudited) 29
Hotels Rooms STR Chain Scale STR Location GIC Joint Venture (51% Ownership) (1) Courtyard - Dallas DFW Airport / North Grapevine 1 181 Upscale Airport Hilton Garden Inn - Grapevine at Silver Lake Crossing 1 152 Upscale Airport Holiday Inn Express & Suites - DFW / Grapevine 1 95 Upper Midscale Airport Hyatt Place - Dallas / Grapevine 1 125 Upscale Airport TownePlace Suites - Dallas / Grapevine 1 120 Upper Midscale Airport Courtyard - Scottsdale North 1 153 Upscale Resort Embassy Suites - Tucson / Paloma Village 1 120 Upper Upscale Resort Hampton Inn & Suites - Silverthorne 1 88 Upper Midscale Resort Homewood Suites - Tucson/St. Philip's Plaza University 1 122 Upscale Resort Residence Inn - Scottsdale North 1 120 Upscale Resort Springhill Suites - Scottsdale North 1 121 Upscale Resort Hilton Garden Inn - College Station 1 119 Upscale Small Metro/Town Hilton Garden Inn - Longview 1 122 Upscale Small Metro/Town Nordic Lodge - Steamboat Springs 1 47 Independent Small Metro/Town Residence Inn - Steamboat Springs 1 110 Upscale Small Metro/Town Residence Inn - Tyler 1 119 Upscale Small Metro/Town AC Hotel - Dallas / Frisco 1 150 Upscale Suburban Canopy Hotel - Dallas / Frisco Station 1 150 Upper Upscale Suburban Courtyard - Amarillo Downtown 1 107 Upscale Suburban Embassy Suites - Amarillo Downtown 1 226 Upper Upscale Suburban Hilton Garden Inn - San Jose / Milpitas 1 161 Upscale Suburban Homewood Suites - Aliso Viejo/Laguna Beach 1 129 Upscale Suburban Homewood Suites - Midland 1 118 Upscale Suburban Hyatt Place - Dallas / Plano (2) 1 127 Upscale Suburban Residence Inn - Dallas / Frisco 1 150 Upscale Suburban Residence Inn - Portland / Hillsboro 1 122 Upscale Suburban AC Hotel - Dallas Downtown 1 128 Upscale Urban AC Hotel - Houston Downtown 1 195 Upscale Urban AC Hotel - Oklahoma City / Bricktown 1 142 Upscale Urban Canopy Hotel - New Orleans Downtown 1 176 Upper Upscale Urban Courtyard - Pittsburgh Downtown 1 183 Upscale Urban Asset Listing (Unaudited) (1) Asset listing excludes two parking garages located in Dallas, TX and Frisco, TX. (2) The Hyatt Place Dallas / Plano was sold in February 2024. 30
Hotels Rooms STR Chain Scale STR Location GIC Joint Venture (51% Ownership) (1) Hampton Inn & Suites - Dallas Downtown 1 176 Upper Midscale Urban Hampton Inn & Suites - Tampa/Ybor City/Downtown 1 138 Upper Midscale Urban Holiday Inn Express & Suites - Oklahoma City Downtown / Bricktown 1 124 Upper Midscale Urban Hyatt Place - Lubbock 1 125 Upscale Urban Hyatt Place - Oklahoma City / Bricktown 1 134 Upscale Urban Residence Inn - Dallas Downtown 1 121 Upscale Urban Residence Inn - Portland Downtown / Riverplace 1 258 Upscale Urban SpringHill Suites - Dallas Downtown 1 148 Upscale Urban SpringHill Suites - New Orleans Downtown / Canal Street 1 74 Upscale Urban TownePlace Suites - New Orleans Downtown / Canal Street 1 105 Upper Midscale Urban GIC Joint Venture (51% Ownership) (1) 41 5,581 Other Joint Ventures (90% Ownership) Onera - Fredericksburg 1 11 N/A N/A AC Hotel - Miami Downtown / Brickell 1 156 Upscale Urban Element - Miami Downtown / Brickell 1 108 Upscale Urban Other Joint Ventures (90% Ownership) 3 275 Total Portfolio 100 14,912 Asset Listing (Unaudited) (1) Asset listing excludes two parking garages located in Dallas, TX and Frisco, TX. 31
