Summit Hotel Properties Results

Summit Hotel Properties Second Quarter 2017 Revenues Up 1.5 Percent

Summit Hotel Properties Reports Second Quarter 2017 Results

Summit Hotel Properties

Summit Hotel Properties, Inc. (NYSE:  INN) yesterday announced results for the second quarter of 2017. 

"Our capital markets transactions and investment activity during the quarter totaling over $300 million demonstrate our commitment to executing on a strategy of acquiring premium-branded upscale hotels with efficient operating models, while preserving a strong balance sheet," said Dan Hansen, the Company's Chairman, President and Chief Executive Officer.  "While geographic diversification continues to be a hallmark of our portfolio, 30 percent of our portfolio was exposed to the five most challenged hotel markets in the country during the second quarter.  Despite the confluence of adverse circumstances in a handful of our key markets, we were again able to improve our RevPAR index during the quarter which reaffirms our confidence in our revenue management strategies," commented Mr. Hansen.

Second Quarter 2017 Summary

  • Net Income:  Net income attributable to common stockholders increased to $29.8 million, or $0.30 per diluted share, compared with $17.7 million, or $0.20 per diluted share, in the same period of 2016.  When excluding the $16.4 million and $2.7 million pretax gain on disposal of assets during the three months ended June 30, 2017 and 2016, respectively, net income attributable to common stockholders decreased by $1.6 million as compared to the same period in 2016. 
  • Pro Forma RevPAR:  Pro forma revenue per available room ("RevPAR") decreased 2.4 percent to $124.11 from the same period in 2016.  Pro forma average daily rate ("ADR") decreased 1.7 percent to $150.82 from the same period in 2016.  Pro forma occupancy declined 0.8 percent to 82.3 percent. 
  • Same-Store RevPAR:  Same-store RevPAR declined to $118.45, a decrease of 3.5 percent from the same period in 2016.  Same-store ADR decreased 2.5 percent to $144.23 from the same period in 2016.  Same-store occupancy decreased by 1.0 percent to 82.1 percent compared with the same period in 2016. 
  • Pro Forma Hotel EBITDA:  Pro forma hotel EBITDA declined to $54.6 million, a decrease of 7.7 percent over the same period in 2016.  Pro forma hotel EBITDA margin contracted by 215 basis points to 38.8 percent from 40.9 percent in the same period of 2016. 
  • Adjusted EBITDA:  Adjusted EBITDA decreased to $46.8 million from $47.4 million in the same period of 2016, a decline of $0.6 million or 1.2 percent. 
  • Adjusted FFO:  Adjusted Funds from Operations ("AFFO") decreased to $35.8 million, or $0.36 per diluted share, a decline in AFFO of 1.9 percent from the same period in 2016. 
  • Acquisitions:  The Company acquired seven hotels containing 1,254 guestrooms for an aggregate purchase price of $304.3 million, or an average of $242,600 per key.  The seven hotels had a combined RevPAR of $125.16 for the twelve months ended June 30, 2017. 
  • Dispositions:  The Company sold eight hotels containing 741 guestrooms for an aggregate sales price of $77.9 million, or an average of $105,100 per key.  The hotels had a combined RevPAR of $76.16 for the twelve months ended March 31, 2017.

The Company's results for the three and six months ended June 30, 2017 and 2016 are as follows:

 

For the Three Months

Ended June 30,

For the Six Months

Ended June 30,

2017

2016

2017

2016

(Unaudited)

($ in thousands, except per unit and RevPAR data)

Net income attributable to common stockholders

$       29,769

$       17,718

$       58,655

$       62,056

Net income per diluted share and unit

$           0.30

$           0.20

$           0.61

$           0.71

Total revenues

$     129,056

$     127,195

$     247,045

$     245,277

EBITDA (1)

$       61,100

$       46,897

$     120,240

$     122,824

Adjusted EBITDA (1)

$       46,782

$       47,364

$       87,838

$       88,277

FFO (1)

$       33,175

$       32,681

$       61,365

$       58,545

Adjusted FFO (1)

$       35,793

$       36,500

$       65,959

$       64,779

FFO per diluted share and unit (1) (2)

$           0.33

$           0.37

$           0.64

$           0.67

Adjusted FFO per diluted share and unit (1) (2)

$           0.36

$           0.42

$           0.68

$           0.74

Pro Forma (3)

RevPAR

$       124.11

$       127.18

$       120.39

$       120.75

RevPAR growth

-2.4%

-0.3%

Hotel EBITDA 

$       54,639

$       59,192

$     103,388

$     109,051

Hotel EBITDA margin

38.8%

40.9%

38.0%

39.8%

Hotel EBITDA margin growth

-215 bps

-174 bps

Year-To-Date 2017 Summary

  • Net Income:  Net income attributable to common stockholders decreased to $58.7 million, or $0.61 per diluted share, compared with $62.1 million, or $0.71 per diluted share, in the same period of 2016.  When excluding the $35.8 million and $39.5 million pretax gain on disposal of assets during the six months ended June 30, 2017 and 2016, respectively, net income attributable to common stockholders increased by $0.3 million as compared to the same period in 2016. 
  • Pro Forma RevPAR:  Pro forma revenue per available room ("RevPAR") decreased 0.3 percent from the same period in 2016 to $120.39.  Pro forma average daily rate ("ADR") decreased 0.2 percent from the same period in 2016 to $151.22.  Pro forma occupancy declined 0.1 percent to 79.6 percent. 
  • Same-Store RevPAR:  Same-store RevPAR declined to $115.55, a decrease of 1.5 percent from the same period in 2016.  Same-store ADR decreased 0.8 percent from the same period in 2016 to $145.51.  Same-store occupancy decreased by 0.6 percent to 79.4 percent from the same period in 2016. 
  • Pro Forma Hotel EBITDA:  Pro forma hotel EBITDA declined to $103.4 million, a decrease of 5.2 percent from the same period in 2016.  Pro forma hotel EBITDA margin contracted by 174 basis points to 38.0 percent from the same period of 2016. 
  • Adjusted EBITDA:  Adjusted EBITDA decreased to $87.8 million from $88.3 million in the same period of 2016, a decline of $0.4 million or 0.5 percent. 
  • Adjusted FFO:  Adjusted Funds from Operations ("AFFO") increased to $66.0 million, or $0.68 per diluted share, an increase in AFFO of 1.8 percent from the same period in 2016. 
  • Acquisitions:  The Company acquired nine hotels containing 1,535 guestrooms for an aggregate purchase price of $364.5 million, or an average of $237,400 per key.  The nine hotels had a combined RevPAR of $125.21 for the twelve months ended June 30, 2017. 
  • Dispositions:  The Company sold nine hotels containing 891 guestrooms for an aggregate sales price of $92.4 million, or an average of $103,700 per key.  The hotels had a combined RevPAR of $77.91 for the twelve months ended March 31, 2017.

Acquisitions

On May 23, 2017, the Company acquired the 261-guestroom Courtyard by Marriott Fort Lauderdale, which includes a separate 0.8 acre land parcel and 6,200 square feet of high-quality retail space, for a total purchase price of $85.0 million, or approximately $326,000 per key. 

On June 9, 2017, the Company completed the acquisition of the 181-guestroom Courtyard by Marriott Charlotte City Center for a total purchase price of $56.3 million, or approximately $311,000 per key.

On June 21, 2017, the Company acquired an 812-guestroom, 5-hotel portfolio for a total purchase price of $163.0 million, or approximately $201,000 per key.  The portfolio includes the 203-guestroom Courtyard Fort Worth Downtown/Blackstone, the 123-guestroom Courtyard Kansas City Country Club Plaza, the 182-guestroom Courtyard Pittsburgh Downtown, the 116-guestroom Hampton Inn & Suites Baltimore Inner Harbor, and the 188-guestroom Residence Inn Baltimore Downtown/Inner Harbor. 

Dispositions

On April 27, 2017, the Company completed the sale of seven hotels containing 651 guestrooms to an affiliate of Hospitality Investors Trust, Inc. (formerly known as American Realty Capital Hospitality Trust, Inc.) ("HIT") for an aggregate sales price of $66.8 million, or $102,500 per key.

On June 2, 2017, the Company completed the sale of the 90-guestroom Courtyard El Paso Airport located in El Paso, Texas for $11.2 million.  The hotel was sold to a buyer unaffiliated with HIT and completed the Company's previously announced transaction to sell 26 hotels.

Capital Investment

The Company invested $5.7 million in capital improvements during the three months ended June 30, 2017.  For the properties renovated during the quarter, the scope of work ranged from common space improvements to complete guestroom renovations, including furniture, soft goods and guest bathrooms.

Capital Markets & Balance Sheet

During the second quarter, the Company executed on the following capital markets transactions to fund strategic growth and preserve its strong balance sheet:

  • On May 15, 2017, the Company completed a follow-on public offering of 10,350,000 shares of common stock, which included the underwriters' full exercise of their option to purchase additional shares.  Net proceeds, after the underwriting discount and offering-related expenses, totaled $163.8 million. 
  • On June 30, 2017, the Company entered into a $47.6 million secured, non-recourse loan.  The loan includes a delayed draw feature, at no additional cost, whereby $25.0 million of the total loan commitment must be drawn within 90 days of the closing date, and the remaining loan commitment must be drawn by December 31, 2017.  The loan provides for a fixed interest rate of 4.44 percent and interest only payments for 18 months following the closing date.  After the 18-month interest only period, the loan will amortize on a 25-year schedule through the maturity date of July 1, 2027.  As of June 30, 2017, nothing has been drawn on the facility. 
  • On June 30, 2017, the Company repaid a $7.5 million mortgage loan with no prepayment penalty.  As a result, the Company does not have any debt maturing through 2018.

At June 30, 2017, the Company had the following:

  • Total outstanding debt of $739.4 million with a weighted average interest rate of 3.71 percent. 
  • Maximum borrowing capacity of $450.0 million under its senior unsecured credit facility, including both the revolver and term loan portions of the facility, with $300.0 million outstanding and $150.0 million available to borrow.

At July 25, 2017, the Company had the following:

  • Total outstanding debt of $768.8 million with a weighted average interest rate of 3.67 percent. 
  • Maximum borrowing capacity of $450.0 million under its senior unsecured credit facility, including both the revolver and term loan portions of the facility, with $330.0 million outstanding and $120.0 million available to borrow.

Dividends

On July 28, 2017, the Company declared a quarterly cash dividend of $0.17 per share on its common stock and per common unit of limited partnership interest in Summit Hotel OP, LP.  The annualized dividend of $0.68 per common share and per common unit represents an annual yield of 3.8 percent based on the August 1, 2017 closing stock price.

In addition, the Company declared a quarterly cash dividend of:

  • $0.4921875 per share on its 7.875% Series B Cumulative Redeemable Preferred Stock. 
  • $0.4453125 per share on its 7.125% Series C Cumulative Redeemable Preferred Stock. 
  • $0.403125 per share on its 6.45% Series D Cumulative Redeemable Preferred Stock.

The dividends are payable on August 31, 2017 to holders of record as of August 16, 2017.

Subsequent Events

Acquisition Update

On July 13, 2017, the Company completed the acquisition of the 255-guestroom AC Hotel by Marriott Atlanta Downtown (the "Hotel") for a total purchase price of $57.5 million, or $225,500 per key, and entered into a management agreement with Interstate Hotels & Resorts.  Opened as an AC Hotel by Marriott in May 2017, the Hotel recently underwent a complete renovation and repositioning of approximately $20 million, or $78,400 per key.  The AC Hotel by Marriott is one of Marriott's newest distinctive brands offering a stylish, yet very efficient and purposeful feel.

The Company estimates a stabilized capitalization rate of 7.8 percent based on management's current estimate of net operating income during the second year of ownership.  The Company estimates that the hotel will contribute approximately $1.6 million of EBITDA for the remainder of 2017 as stabilization continues.

The Hotel's prime location in the heart of Downtown Atlanta will benefit from various business and leisure demand generators. Atlanta is home to 27 of the Fortune 1000 companies and benefits from Hartfield-Jackson Atlanta International Airport, the busiest airport in the world servicing more than 100 million passengers per year. Major corporations and organizations such as the American Cancer Society, EY, Georgia Power, Georgia-Pacific, Coca-Cola and Turner Broadcasting System are located within one mile of the Hotel.  The Georgia Aquarium, World of Coca-Cola, College Football Hall of Fame, CNN Studios, and SkyView Atlanta are also within walking distance.  Scheduled to open this month, the 75,000-seat Mercedes-Benz Stadium, the new home of the NFL's Atlanta Falcons and MLS' Atlanta United, is further located only steps from the hotel. 

Disposition Update

On July 21, 2017, the Company completed the sale of a 273-guestroom, 3-hotel portfolio located in suburban Fort Worth, Texas for a total sales price of $27.8 million, or approximately $102,000 per key.  The portfolio sold included the 105-guestroom Hampton Inn & Suites Fort Worth West I-30, the 98-guestroom Hilton Garden Inn Fort Worth/Fossil Creek, and the 70-guestroom Fairfield Inn & Suites Fort Worth West I-30.  The sales price represented a capitalization rate of 7.9 percent on the hotels' net operating income, including planned capital improvements, for the trailing twelve months ended June 30, 2017.  The Company estimates that the hotels would have contributed approximately $1.2 million of EBITDA during the remainder of 2017.

2017 Outlook

"Due to the weaker than expected average daily rate growth realized in the second quarter and lack of visibility that persists, we are reducing our full year outlook for RevPAR and adjusted FFO," commented Mr. Hansen.  "Despite what has been a challenging operating environment in the first half of the year, we remain optimistic about the long-term outlook for our portfolio.  We have invested well over $200 million in capital improvements to our portfolio over the last five years and acquired well-located hotels with significant upside that cater well to the needs of today's guests.  Our portfolio continues to be well-positioned to capitalize on improvements in industry fundamentals."

The Company is providing its outlook for the third quarter and full year 2017 based on its 79 hotels owned as of August 2, 2017.  There are no future acquisitions, dispositions, or capital markets activities assumed in the Company's outlook for the third quarter and full year 2017.

 

THIRD QUARTER 2017

($ in thousands, except RevPAR and per unit data)

Low

High

Pro forma RevPAR (79) 1

$116.50

$119.00

Pro forma RevPAR growth (79) 1

(1.00%)

1.00%

RevPAR (same-store 65) 2

$112.00

$114.50

RevPAR growth (same-store 65) 2

(2.00%)

0.00%

Adjusted FFO 

$33,300

$36,400

Adjusted FFO per diluted unit 3

$0.32

$0.35

 

FULL YEAR 2017

($ in thousands, except RevPAR and per unit data)

Low

High

Pro forma RevPAR (79) 1

$115.75

$117.00

Pro forma RevPAR growth (79) 1

0.00%

1.00%

RevPAR (same-store 65) 2

$112.25

$113.50

RevPAR growth (same-store 65) 2

(1.00%)

0.00%

Adjusted FFO 

$128,300

$134,300

Adjusted FFO per diluted unit 3

$1.28

$1.34

Capital improvements

$35,000

$45,000

 

(1)

As of August 2, 2017, the Company owned 79 hotels.  The pro forma outlook information includes operating estimates for 79 hotels as if each hotel had been owned since January 1, 2016.

(2)

As of August 2, 2017, the Company owned 65 same-store hotels.  The same-store outlook information includes operating estimates for 65 hotels owned by the Company as of January 1, 2016.

(3)

Assumes weighted average diluted common shares and units outstanding of 104,100,000 for the third quarter 2017 and 100,200,000 for the full year 2017. 

About Summit Hotel Properties

Summit Hotel Properties, Inc. is a publicly-traded real estate investment trust focused on owning premium-branded hotels with efficient operating models primarily in the upscale segment of the lodging industry.  As of August 2, 2017, the Company's portfolio consisted of 79 hotels with a total of 11,590 guestrooms located in 24 states.  

SUMMIT HOTEL PROPERTIES, INC.

Condensed Consolidated Balance Sheets

(Amounts in thousands)

June 30,

2017

December 31, 

2016

(Unaudited)

ASSETS

  Investment in hotel properties, net

$  1,857,548

$  1,545,122

  Investment in hotel properties under development

12,665

-

  Land held for development

2,942

5,742

  Assets held for sale

20,820

62,695

  Investment in real estate loans, net

10,145

17,585

  Cash and cash equivalents

29,819

34,694

  Restricted cash

25,560

24,881

  Trade receivables, net

17,939

11,807

  Prepaid expenses and other

8,731

6,474

  Deferred charges, net

4,618

3,727

  Other assets

5,754

5,778

          Total assets

$  1,996,541

$  1,718,505

LIABILITIES AND EQUITY

Liabilities:

  Debt, net of debt issuance costs

$     735,206

$     652,414

  Accounts payable

7,647

4,623

  Accrued expenses and other

47,549

46,880

  Derivative financial instruments

595

1,118

          Total liabilities

790,997

705,035

          Total stockholders' equity

1,202,262

1,010,042

  Non-controlling interests in operating partnership

3,282

3,428

          Total equity

1,205,544

1,013,470

          Total liabilities and equity

$  1,996,541

$  1,718,505

 

SUMMIT HOTEL PROPERTIES, INC.

Condensed Consolidated Statements of Operations

(Amounts in thousands, except per share amounts) 

 For the Three Months Ended 

June 30,

 For the Six Months Ended

June 30,

2017

2016

2017

2016

Revenues:

  Room

$      120,514

$      119,285

$      230,864

$      229,880

  Other hotel operations revenue

8,542

7,910

16,181

15,397

Total revenues

129,056

127,195

247,045

245,277

Expenses:

Hotel operating expenses:

Room

29,303

26,985

57,817

54,254

Other direct

16,619

16,843

32,409

33,083

Other indirect

33,577

32,929

64,477

63,558

Total hotel operating expenses

79,499

76,757

154,703

150,895

Depreciation and amortization

19,732

17,685

38,458

35,828

Corporate general and administrative

5,310

5,391

10,448

9,970

Hotel property acquisition costs

-

1,728

354

2,282

Total expenses

104,541

101,561

203,963

198,975

Operating income

24,515

25,634

43,082

46,302

Other income (expense):

Interest expense

(6,927)

(7,123)

(13,718)

(14,606)

Gain on disposal of assets, net

16,350

2,726

35,806

39,506

Other income, net

568

853

2,963

1,193

Total other income (expense)

9,991

(3,544)

25,051

26,093

Income from continuing operations before income taxes

34,506

22,090

68,133

72,395

Income tax expense

(423)

(135)

(844)

(1,706)

Net income

34,083

21,955

67,289

70,689

Less - Income attributable to Operating Partnership

(114)

(90)

(234)

(339)

Net income attributable to Summit Hotel Properties, Inc.

33,969

21,865

67,055

70,350

Preferred dividends

(4,200)

(4,147)

(8,400)

(8,294)

Net income attributable to common stockholders

$       29,769

$       17,718

$       58,655

$       62,056

Earnings per share:

Basic

$           0.30

$           0.20

$           0.61

$           0.72

Diluted

$           0.30

$           0.20

$           0.61

$           0.71

Weighted average common shares outstanding:

Basic 

98,184

86,433

95,488

86,396

Diluted

98,706

87,355

95,983

87,264

 

SUMMIT HOTEL PROPERTIES, INC.

Reconciliation of Net Income to Non-GAAP Measures – Funds From Operations

(Unaudited)

(In thousands except per share and unit amounts)

For the Three Months

Ended June 30,

For the Six Months

Ended June 30,

2017

2016

2017

2016

Net income

$       34,083

$       21,955

$       67,289

$       70,689

Preferred dividends

(4,200)

(4,147)

(8,400)

(8,294)

Net income applicable to common shares and units

29,883

17,808

58,889

62,395

Net income per common share and unit

$           0.30

$           0.20

$           0.61

$           0.72

Real estate-related depreciation (1)

19,642

17,599

38,282

35,656

Gain on disposal of assets

(16,350)

(2,726)

(35,806)

(39,506)

FFO applicable to common shares and units

33,175

32,681

61,365

58,545

FFO per common share and unit

$           0.33

$           0.37

$           0.64

$           0.67

Amortization of deferred financing costs

496

540

1,014

1,103

Amortization of franchise fees (1)

90

86

176

172

Equity based compensation

1,864

1,389

2,994

2,182

Hotel property acquisition costs

-

1,728

354

2,282

Debt transaction costs

3

57

157

476

Loss on derivative instruments

-

19

-

19

(Gain) loss from net casualty recoveries

165

-

(101)

-

Adjusted Funds From Operations

$       35,793

$       36,500

$       65,959

$       64,779

AFFO per common share and unit

$           0.36

$           0.42

$           0.68

$           0.74

Weighted average diluted common units (2)

99,079

87,355

96,366

87,264

 

(1) 

The total of these line items represents depreciation and amortization as reported on the Company's Condensed Consolidated Statements of Operations for the periods presented.

(2)

The Company includes the outstanding OP units issued by Summit Hotel OP, LP, the Company's operating partnership, held by limited partners other than the Company because the OP units are redeemable for cash or, at the Company's option, shares of the Company's common stock on a one-for-one basis.

 

SUMMIT HOTEL PROPERTIES, INC.

Reconciliation of Net Income to Non-GAAP Measures – EBITDA

(Unaudited)

(Amounts in thousands)

For the Three Months

Ended June 30,

For the Six Months

Ended June 30,

2017

2016

2017

2016

Net income

$       34,083

$       21,955

$       67,289

$       70,689

Depreciation and amortization

19,732

17,685

38,458

35,828

Interest expense

6,927

7,123

13,718

14,606

Interest income

(65)

(1)

(69)

(5)

Income tax expense

423

135

844

1,706

EBITDA

$       61,100

$       46,897

$     120,240

$     122,824

Equity based compensation

1,864

1,389

2,994

2,182

Hotel property acquisition costs

-

1,728

354

2,282

Debt transaction costs

3

57

157

476

Gain on disposal of assets

(16,350)

(2,726)

(35,806)

(39,506)

Loss on derivative instruments

-

19

-

19

(Gain) loss from net casualty recoveries

165

-

(101)

-

Adjusted EBITDA

$       46,782

$       47,364

$       87,838

$       88,277

 

SUMMIT HOTEL PROPERTIES, INC.

Pro Forma (1) Operational and Statistical Data

(Unaudited)

(Dollars in thousands, except operating metrics)

For the Three Months

Ended June 30,

For the Six Months

Ended June 30,

2017

2016

2017

2016

REVENUES

Room

$     131,101

$     134,266

$     252,940

$     254,101

Other hotel operations revenue

9,729

10,306

18,810

19,971

Total revenues

140,830

144,572

271,750

274,072

EXPENSES

Hotel operating expenses

Room

31,270

29,276

61,452

57,604

Other direct

20,349

23,288

40,992

44,883

Other indirect

34,572

32,816

65,918

62,534

Total hotel operating expenses

86,191

85,380

168,362

165,021

Hotel EBITDA

$       54,639

$       59,192

$     103,388

$     109,051

 

2016

2017

TTM Ended

Q3

Q4

Q1

Q2

June 30, 2017

Room

$     126,811

$     114,088

$     121,839

$     131,101

$     493,839

Other hotel operations revenue

9,946

8,630

9,081

9,729

37,386

Total revenues

$     136,757

$     122,718

$     130,920

$     140,830

$     531,225

Hotel EBITDA

$       52,986

$       44,931

$       48,749

$       54,639

$     201,305

Hotel EBITDA Margin

38.7%

36.6%

37.2%

38.8%

37.9%

Rooms occupied

850,499

788,526

803,388

869,275

3,311,688

Rooms available

1,067,292

1,067,292

1,044,720

1,056,325

4,235,629

Occupancy

79.7%

73.9%

76.9%

82.3%

78.2%

ADR

$       149.10

$       144.69

$       151.66

$       150.82

$       149.12

RevPAR

$       118.82

$       106.89

$       116.62

$       124.11

$       116.59

 

(1) 

Pro forma information includes operating results for 81 hotels owned as of June 30, 2017 as if each hotel had been owned by the Company since January 1, 2016.  As a result, these pro forma operating and financial measures include operating results for certain hotels for periods prior to the Company's ownership.

 

SUMMIT HOTEL PROPERTIES, INC.

Pro Forma and Same-Store Data

(Unaudited)

For the Three Months

Ended June 30,

For the Six Months

Ended June 30,

2017

2016

2017

2016

Pro Forma 1 (81 hotels)

Rooms occupied

869,275

875,399

1,672,663

1,676,470

Rooms available

1,056,325

1,055,689

2,101,045

2,104,285

Occupancy

82.3%

82.9%

79.6%

79.7%

ADR

$       150.82

$       153.38

$       151.22

$       151.57

RevPAR

$       124.11

$       127.18

$       120.39

$       120.75

Occupancy growth

-0.8%

-0.1%

ADR growth

-1.7%

-0.2%

RevPAR growth

-2.4%

-0.3%

For the Three Months

Ended June 30,

For the Six Months

Ended June 30,

2017

2016

2017

2016

Same-Store 2 (68 hotels)

Rooms occupied

696,779

703,351

1,340,142

1,355,290

Rooms available

848,481

847,847

1,687,641

1,695,694

Occupancy

82.1%

83.0%

79.4%

79.9%

ADR

$       144.23

$       147.90

$       145.51

$       146.74

RevPAR

$       118.45

$       122.69

$       115.55

$       117.28

Occupancy growth

-1.0%

-0.6%

ADR growth

-2.5%

-0.8%

RevPAR growth

-3.5%

-1.5%

 

(1) 

Pro forma information includes operating results for 81 hotels owned as of June 30, 2017, as if each hotel had been owned by the Company since January 1, 2016.  As a result, these pro forma operating and financial measures include operating results for certain hotels for periods prior to the Company's ownership.

(2) 

Same-store information includes operating results for 68 hotels owned by the Company as of January 1, 2016, and at all times during the three and six months ended June 30, 2017, and 2016.

 

SUMMIT HOTEL PROPERTIES, INC. 

Reconciliation of Net Income to Non-GAAP Measures – Funds From Operations for Financial Outlook

(Unaudited)  

(Amounts in thousands except per share and unit) 

For the Three Months Ending

September 30, 2017

For the Year Ending

December 31, 2017

Low

High

Low

High

Net income

$       21,500

$       24,600

$       98,900

$     104,900

Preferred dividends

(4,200)

(4,200)

(16,800)

(16,800)

Net income applicable to common shares and units

17,300

20,400

82,100

88,100

Net income per common share and unit

$           0.17

$           0.20

$           0.82

$           0.88

Real estate-related depreciation (1)

21,200

21,200

80,600

80,600

Gain on disposal of assets

(7,600)

(7,600)

(43,400)

(43,400)

FFO applicable to common shares and units

30,900

34,000

119,300

125,300

FFO per common share and unit

$           0.30

$           0.33

$           1.19

$           1.25

Amortization of deferred financing costs

500

500

1,900

1,900

Amortization of franchise fees (1)

100

100

400

400

Equity based compensation

1,600

1,600

6,000

6,000

Hotel property acquisition costs

-

-

400

400

Debt transaction costs

200

200

400

400

Gain from net casualty recoveries

-

-

(100)

(100)

Adjusted Funds From Operations

$       33,300

$       36,400

$     128,300

$     134,300

AFFO per common share and unit

$           0.32

$           0.35

$           1.28

$           1.34

Weighted average diluted common units (1)

104,100

104,100

100,200

100,200

 

(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.



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