SUMMIT HOTEL PROPERTIES REPORTS FIRST QUARTER 2026 RESULTS

SUMMIT HOTEL PROPERTIES REPORTS FIRST QUARTER 2026 RESULTS First Quarter Operating Income of $14.1 Million; AFFO of $25.5 Million or $0.21 per Share

Increased 2026 Outlook as Sequential RevPAR Improvement Results in Positive First Quarter RevPAR Growth

Accretive Capital Recycling Continues with Agreement to Sell the Courtyard and Residence Inn Dallas (Arlington South)

AUSTIN, Texas, April 30, 2026 /PRNewswire/ -- Summit Hotel Properties, Inc. (NYSE: INN) (the "Company"), today announced results for the three months ended March 31, 2026.

"Operating fundamentals improved meaningfully in the first quarter as positive RevPAR growth in the quarter exceeded our expectations by over 200 basis points. Encouragingly, we experienced sequential improvements in demand within the quarter culminating with March RevPAR growth of over 4%. These positive trends have continued into the second quarter as rate-driven revenue growth has been broad based across markets and segments of our portfolio. Our outlook for the remainder of the year is increasingly positive as we approach what is expected to be a robust summer of travel demand, highlighted by a record setting special events calendar and current operating trends that support an increase to our full year 2026 guidance ranges," said Jonathan Stanner, President and Chief Executive Officer.

"We also continue to successfully allocate capital as we entered into an agreement to sell two wholly-owned assets for $19 million at an implied capitalization rate of 5.0 percent, inclusive of foregone capital investment needs, and repurchased an additional 1.4 million shares during the quarter. Since the inception of our share repurchase program, we have repurchased approximately 5 million shares (approximately 4% of total share outstanding) at an average price of $4.26 per share. Our balance sheet remains well positioned with ample liquidity and no debt maturities until 2028," continued Mr. Stanner.

First Quarter 2026 Summary

The Company's results for the three months ended March 31, 2026 and 2025 are as follows (in thousands, except per share amounts and metrics):

For the Three Months

Ended March 31,

2026

2025

Net loss attributable to common stockholders

$ (10,441)

$ (4,684)

Net loss per diluted share

$ (0.10)

$ (0.04)

Total revenues

$ 185,053

$ 184,478

EBITDAre (1)

$ 55,766

$ 58,449

Adjusted EBITDAre (1)

$ 44,192

$ 45,007

FFO (1)

$ 20,590

$ 23,196

Adjusted FFO (1)

$ 25,525

$ 27,359

FFO per diluted share and unit (1)

$ 0.17

$ 0.19

Adjusted FFO per diluted share and unit (1)

$ 0.21

$ 0.22

Pro Forma (2) and Same Store (3)

RevPAR

$ 126.57

$ 126.28

RevPAR Growth

0.2 %

Hotel EBITDA

$ 63,374

$ 65,105

Hotel EBITDA Margin

34.4 %

35.8 %

Hotel EBITDA Margin Change

(146) bps

(1)

See tables later in this press release for a discussion and reconciliation of Net loss attributable to common stockholders 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 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 94 hotels owned as of March 31, 2026.

(3)

All same store information includes operating and financial results for 94 hotels owned as of January 1, 2025 and at all times during the three months ended March 31, 2026, and 2025.

Transaction Activity

In April 2026, we entered into a purchase and sale agreement to sell the wholly-owned 103-guestroom Courtyard by Marriott, Dallas (Arlington South), TX and the 96-guestroom Residence Inn, Dallas (Arlington South), TX for a combined selling price of $19.0 million. The sales price for the transaction represents a 5.0 percent capitalization rate based on the net operating income for the trailing twelve months ended March 31, 2026, and after consideration of foregone near-term required capital expenditures. The transaction is expected to close in the third quarter of 2026.

In February 2026, the Company completed the sale of the 122-guestroom Hilton Garden Inn Longview, Texas, which was owned by the Company's joint venture with GIC, for $12.3 million. The sales price for the transaction represented a 6.8 percent capitalization rate based on the net operating income for the trailing twelve months ended January 31, 2026, and after consideration of foregone near-term required capital expenditures.

Since 2023, the Company and its affiliates have sold, or are under contract to sell, 15 hotels for a combined sales price of approximately $218 million at a blended capitalization rate of approximately 4.6 percent, inclusive of an estimated $68 million of foregone capital needs, based on the trailing twelve-month net operating income at the time of each sale. The combined RevPAR for the sold hotels was $86, which is an approximate 30 percent discount to the current pro forma portfolio.

Capital Markets Activity

Repayment of Convertible Notes

On February 17, 2026, the Company fully repaid its $287.5 million 1.5% Convertible Notes utilizing its $275.0 million Delayed Draw Term Loan and Corporate Revolver.

Stock Repurchases

During the first quarter, the Company repurchased 1.4 million common shares under its share repurchase program for an aggregate purchase price of $6.0 million, or a weighted average price of approximately $4.17 per share. As of March 31, 2026, approximately $28.6 million remained available for repurchase under this program.

Since the inception of our share repurchase program in 2025, we have repurchased approximately 5.0 million shares (approximately 4% of total share outstanding) at an average price of $4.26 per share.

Balance Sheet Summary

On a pro rata basis as of March 31, 2026, the Company had the following outstanding indebtedness:

Common and Preferred Dividend Declaration

On April 23, 2026, the Company declared a quarterly cash dividend of $0.08 per share on its common stock and per common unit of limited partnership interest in Summit Hotel OP, LP. The quarterly dividend of $0.08 per share represents an annualized dividend yield of 6.4 percent, based on the closing price of shares of the common stock on April 29, 2026.

In addition, the Board of Directors declared a quarterly cash dividend of:

The dividends are payable on May 29, 2026, to holders of record as of May 15, 2026.

2026 Outlook

The Company's updated outlook for the full year 2026 is based on the 94 lodging assets owned as of March 31, 2026, including the Courtyard by Marriott and Residence Inn Dallas (Arlington South) for which we have entered into an agreement to sell the two hotels. The sale is expected to close in the third quarter and will result in approximately $500,000 of foregone Hotel EBITDA from the closing date through the end of the year, which is not reflected in the updated guidance ranges. Based on first quarter actual results and recent operating trends, the Company is increasing the low end and implied midpoint of its guidance ranges. There are no additional acquisitions, dispositions, share repurchases, or capital markets activities assumed in the Company's full year 2026 outlook.

FYE 2026 Outlook

Low

High

Variance

to Prior

Midpoint

% Change

to Prior

Midpoint

Pro Forma RevPAR Growth (1)

0.50 %

3.00 %

0.25 %

— %

Adjusted EBITDAre

$ 170,000

$ 181,000

$ 1,500

0.9 %

Adjusted FFO

$ 90,000

$ 102,000

$ (250)

(0.3) %

Adjusted FFO per share of Common Stock and Common Units

$ 0.75

$ 0.85

$ 0.01

1.3 %

Capital Expenditures, Pro Rata

$ 55,000

$ 65,000

$ —

— %

(1)

All pro forma information includes operating and financial results for 94 lodging assets owned as of March 31, 2026 and excludes the financial results of hotels sold by the Company after January 1, 2025. Pro forma and non-GAAP financial measures are unaudited.

First Quarter 2026 Earnings Conference Call

The Company will conduct its quarterly conference call on May 1, 2026, at 12:00 PM ET.

Supplemental Disclosures

In conjunction with this press release, the Company has furnished a financial supplement with additional disclosures on its website. Visit www.shpreit.com for more information. The Company has no obligation to update any of the information provided to conform to actual results or changes in portfolio, capital structure, or future expectations.

About Summit Hotel Properties

Summit Hotel Properties, Inc. is a publicly traded real estate investment trust focused on owning premium-branded lodging facilities with efficient operating models primarily in the upscale segment of the lodging industry. As of April 30, 2026, the Company's portfolio consisted of 94 assets, 52 of which are wholly owned, with a total of 14,226 guestrooms located in 24 states.

For additional information, please visit the Company's website, www.shpreit.com, and follow on X at @SummitHotel_INN.

Forward-Looking Statements

This press release contains statements that are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are generally identifiable by use of forward-looking terminology such as "may," "will," "should," "potential," "intend," "expect," "seek," "anticipate," "estimate," "approximately," "believe," "could," "project," "predict," "forecast," "continue," "plan," "likely," "would" or other similar words or expressions. Forward-looking statements are based on certain assumptions and can include future expectations, future plans and strategies, financial and operating projections, or other forward-looking information. Examples of forward-looking statements include the following: the Company's ability to realize 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, 2025, filed with the SEC, and its quarterly and other periodic filings with the SEC. The Company undertakes no duty to update the statements in this release to conform the statements to actual results or changes in the Company's expectations.

Summit Hotel Properties, Inc.

Consolidated Balance Sheets

(In thousands)

March 31, 2026

December 31, 2025

(Unaudited)

ASSETS

Investments in lodging property, net

$ 2,592,231

$ 2,640,367

Assets held for sale, net

18,405

11,967

Cash and cash equivalents

44,773

36,110

Restricted cash

5,661

5,102

Right-of-use assets, net

31,563

32,028

Trade receivables, net

23,528

17,347

Prepaid expenses and other

14,610

7,104

Deferred charges, net

5,585

10,051

Other assets

18,208

15,954

Total assets

$ 2,754,564

$ 2,776,030

LIABILITIES, REDEEMABLE NON-CONTROLLING INTERESTS

AND EQUITY

Liabilities:

Debt, net of debt issuance costs

$ 1,396,385

$ 1,394,014

Lease liabilities, net

23,749

24,091

Accounts payable

7,128

7,537

Accrued expenses and other

77,682

76,417

Total liabilities

1,504,944

1,502,059

Redeemable non-controlling interests

50,219

Total stockholders' equity

840,406

862,155

Non-controlling interests

358,995

361,597

Total equity

1,199,401

1,223,752

Total liabilities, redeemable non-controlling interests and equity

$ 2,754,564

$ 2,776,030

Summit Hotel Properties, Inc.

Consolidated Statements of Operations

(In thousands, except per share amounts)

For the Three Months

Ended March 31,

2026

2025

(Unaudited)

Revenues:

Room

$ 162,564

$ 163,731

Food and beverage

11,460

10,990

Other

11,029

9,757

Total revenues

185,053

184,478

Expenses:

Room

36,347

36,132

Food and beverage

8,520

7,991

Other lodging property operating expenses

58,650

56,922

Property taxes, insurance and other

13,884

13,311

Management fees

4,221

4,495

Depreciation and amortization

36,774

37,230

Corporate general and administrative

8,845

8,571

Loss on write-down of assets

3,641

—

Total expenses

170,882

164,652

(Loss) gain on disposal of assets, net

(40)

Operating income

14,131

19,827

Other income (expense):

Interest expense

(20,450)

(19,956)

Interest income

246

276

Other income, net

1,052

1,230

Total other expense, net

(19,152)

(18,450)

(Loss) income from continuing operations before income taxes

(5,021)

1,377

Income tax expense

(892)

(754)

Net (loss) income

(5,913)

623

Less - (Loss) income attributable to non-controlling interests

(99)

680

Net loss attributable to Summit Hotel Properties, Inc. before preferred dividends

(5,814)

(57)

Less - Distributions to and accretion of redeemable non-controlling interests

(657)

Less - Preferred dividends

(3,970)

Net loss attributable to common stockholders

$ (10,441)

$ (4,684)

Loss per common share:

Basic and diluted

$ (0.10)

$ (0.04)

Weighted-average common shares outstanding:

Basic and diluted

105,720

108,008

Summit Hotel Properties, Inc.

Reconciliation of Net (Loss) Income to Non-GAAP Measures - EBITDAre

(Unaudited)

(In thousands)

For the Three Months

Ended March 31,

2026

2025

Net (loss) income

$ (5,913)

$ 623

Depreciation and amortization

36,774

37,230

Interest expense

20,450

19,956

Interest income on cash deposits

(118)

(113)

Income tax expense

892

754

EBITDA

52,085

58,450

Loss on write-down of assets

3,641

—

Loss (gain) on disposal of assets and other dispositions, net

(1)

EBITDAre

55,766

58,449

Amortization of key money liabilities

(129)

Equity-based compensation

2,001

1,916

Non-cash lease expense, net

129

133

Casualty losses, net

328

294

Other

—

Income related to non-controlling interests in consolidated joint ventures

(1,168)

(1,283)

Adjustments related to non-controlling interests in consolidated joint ventures

(12,788)

(14,373)

Adjusted EBITDAre

$ 44,192

$ 45,007

Summit Hotel Properties, Inc.

Reconciliation of Net (Loss) Income to Non-GAAP Measures - Funds From Operations

(Unaudited)

(In thousands, except per share and unit amounts)

For the Three Months

Ended March 31,

2026

2025

Net (loss) income

$ (5,913)

$ 623

Preferred dividends

(3,970)

Distributions to and accretion of redeemable non-controlling interests

(657)

Income related to non-controlling interests in consolidated joint ventures

(1,168)

(1,283)

Net loss applicable to common shares and Common Units

(11,708)

(5,287)

Real estate-related depreciation

36,214

36,663

Loss on write-down of assets

3,641

—

Loss (gain) on disposal of assets and other dispositions, net

(1)

FFO adjustments related to non-controlling interests in consolidated joint ventures

(7,597)

(8,179)

FFO applicable to common shares and Common Units

20,590

23,196

Amortization of deferred financing costs

1,997

1,673

Amortization of franchise fees

169

175

Amortization of intangible assets, net

262

Equity-based compensation

2,001

1,916

Non-cash lease expense, net

129

133

Casualty losses, net

328

294

Deferred tax expense

467

325

Other

—

AFFO adjustments related to non-controlling interests in consolidated joint ventures

(471)

(615)

AFFO applicable to common shares and Common Units

$ 25,525

$ 27,359

FFO per share of common share/Common Unit

$ 0.17

$ 0.19

AFFO per common share/Common Unit

$ 0.21

$ 0.22

Weighted-average diluted common shares/Common Units

120,829

124,636

Summit Hotel Properties, Inc.

Reconciliation of Weighted Average Diluted Common Shares

(Unaudited)

(In thousands)

For the Three Months

Ended March 31,

2026

2025

Weighted average common shares outstanding - basic and diluted

105,720

108,008

Adjusted for:

Non-GAAP adjustment for restricted stock awards (1)

2,100

2,573

Non-GAAP adjustment for dilutive effects of Common Units (2)

13,009

14,055

Non-GAAP weighted diluted share of common stock and Common Units

120,829

124,636

(1)

Adjustment reflects the difference between the total weighted-average unvested restricted time-based shares outstanding as of the reporting date and the weighted-average restricted time-based shares computed for diluted earnings per share under the treasury stock method, plus the difference between the estimated total weighted average unvested restricted performance-based shares expected to vest based on achievement of the performance measures as if the vesting date were the reporting date and the estimated weighted-average unvested restricted performance-based shares computed for diluted earnings per share under the treasury stock method.

(2)

The Company includes the outstanding Common Units issued by our Operating Partnership held by limited partners other than the Company because the Common 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.

Pro Forma Hotel Operating Data

(Unaudited)

(Dollars in thousands)

For the Three Months

Ended March 31,

Pro Forma Operating Data: (1)

2026

2025

Pro forma room revenue

$ 162,052

$ 161,424

Pro forma other hotel operations revenue

22,394

20,347

Pro forma total revenues

184,446

181,771

Pro forma total hotel operating expenses

121,072

116,666

Pro forma hotel EBITDA

$ 63,374

$ 65,105

Pro forma hotel EBITDA Margin

34.4 %

35.8 %

Reconciliations of Non-GAAP financial measures to comparable GAAP financial measures

Revenue:

Total revenues

$ 185,053

$ 184,478

Total revenues - dispositions

(607)

(2,707)

Pro forma total revenues (1)

184,446

181,771

Hotel Operating Expenses:

Hotel operating expenses

$ 121,622

$ 118,851

Hotel operating expenses - dispositions

(550)

(2,185)

Pro forma hotel operating expense (1)

121,072

116,666

Hotel EBITDA:

Operating income

14,131

19,827

Loss (gain) on disposal of assets and other dispositions, net

(1)

Loss on write-down of assets

3,641

—

Corporate general and administrative

8,845

8,571

Depreciation and amortization

36,774

37,230

Hotel EBITDA

63,431

65,627

Hotel EBITDA - dispositions (2)

(57)

(522)

Pro forma hotel EBITDA (1)

$ 63,374

$ 65,105

(1)

Unaudited pro forma information includes operating results for 94 hotels owned as of March 31, 2026. For any hotels sold by the Company after January 1, 2025 (the "Disposed Hotels"), the Company excludes the financial results of each of the Disposed Hotels from January 1, 2025 to the date the Disposed Hotels were sold by the Company in determining pro forma total revenues and pro forma hotel operating expenses. The pro forma information is included to enable comparison of results for the current reporting period to results for the comparable period of the prior year and are not indicative of future results.

(2)

For hotels sold by the Company between January 1, 2025, and March 31, 2026, the Company has excluded the financial results of each of the Disposed Hotels for the period beginning on January 1, 2025, and ending on the date the Disposed Hotels were sold by the Company (the "Disposition Period") in determining pro forma hotel EBITDA.

Summit Hotel Properties, Inc.

Pro Forma Hotel Operating Data

(Unaudited)

(In thousands, except operating statistics)

2025

2026

Trailing Twelve

Months Ended

March 31, 2026

Pro Forma Operating Data: (1)

Pro forma room revenue

$ 167,436

$ 153,213

$ 151,612

$ 162,052

$ 634,313

Pro forma other hotel operations revenue

21,806

20,316

21,497

22,394

86,013

Pro forma total revenues

189,242

173,529

173,109

184,446

720,326

Pro forma total hotel operating expenses

121,988

120,465

118,069

121,072

481,594

Pro forma hotel EBITDA

$ 67,254

$ 53,064

$ 55,040

$ 63,374

$ 238,732

Pro forma hotel EBITDA Margin

35.5 %

30.6 %

31.8 %

34.4 %

33.1 %

Pro Forma Statistics: (1)

Rooms sold

1,004,861

963,934

929,979

916,304

3,815,078

Rooms available

1,292,566

1,308,700

1,280,340

5,190,306

Occupancy

77.7 %

73.7 %

71.1 %

71.6 %

73.5 %

ADR

$ 166.63

$ 158.95

$ 163.03

$ 176.85

$ 166.26

RevPAR

$ 129.54

$ 117.07

$ 115.85

$ 126.57

$ 122.21

Actual Statistics:

Rooms sold

1,029,583

987,833

941,803

920,670

3,879,889

Rooms available

1,324,598

1,341,084

1,325,524

1,286,440

5,277,646

Occupancy

77.7 %

73.7 %

71.1 %

71.6 %

73.5 %

ADR

$ 165.70

$ 158.25

$ 162.60

$ 176.57

$ 165.63

RevPAR

$ 128.79

$ 116.57

$ 115.53

$ 126.37

$ 121.76

Reconciliations of Non-GAAP financial measures to comparable GAAP financial measures

Revenue:

Total revenues

$ 192,917

$ 177,117

$ 174,960

$ 185,053

$ 730,047

Total revenues - dispositions

(3,675)

(3,588)

(1,851)

(607)

(9,721)

Pro forma total revenues (1)

189,242

173,529

173,109

184,446

720,326

Hotel Operating Expenses:

Hotel operating expenses

124,614

122,998

119,644

121,622

488,878

Hotel operating expenses - dispositions

(2,626)

(2,533)

(1,575)

(550)

(7,284)

Pro forma hotel operating expenses (1)

121,988

120,465

118,069

121,072

481,594

Hotel EBITDA:

Operating income

22,684

8,583

14,591

14,131

59,989

Loss (gain) on disposal of assets, net

(6,715)

(6,538)

Loss on write-down of assets

—

1,833

3,641

5,474

Corporate general and administrative

8,280

7,845

8,120

8,845

33,090

Depreciation and amortization

37,259

37,634

37,487

36,774

149,154

Hotel EBITDA

68,303

54,119

55,316

63,431

241,169

Hotel EBITDA - dispositions (2)

(1,049)

(1,055)

(276)

(57)

(2,437)

Pro forma hotel EBITDA (1)

$ 67,254

$ 53,064

$ 55,040

$ 63,374

$ 238,732

(1)

Unaudited pro forma information includes operating results for 94 hotels owned as of March 31, 2026 as if all such hotels had been owned by the Company since April 1, 2025. For any hotels sold by the Company after April 1, 2025, the Company excludes the financial results of each of those hotels from April 1, 2025 to the date the hotels were sold by the Company in determining pro forma total revenues and pro forma hotel operating expenses. The pro forma information is included to enable comparison of results for the current reporting period to results for the comparable period of the prior year and are not indicative of future results.

(2)

For hotels sold by the Company between April 1, 2025, and March 31, 2026, the Company has excluded the financial results of each of the hotels for the period beginning on April 1, 2025, and ending on the date the hotels were sold by the Company in determining pro forma hotel EBITDA.

Summit Hotel Properties, Inc.

Pro Forma and Same Store Data

(Unaudited)

For the Three Months

Ended March 31,

2026

2025

Pro Forma (1) and Same Store (2)

Rooms sold

916,304

926,656

Rooms available

1,280,340

1,278,270

Occupancy

71.6 %

72.5 %

ADR

$ 176.85

$ 174.20

RevPAR

$ 126.57

$ 126.28

Occupancy change

(1.3) %

ADR change

1.5 %

RevPAR change

0.2 %

(1)

Unaudited pro forma information includes operating results for 94 hotels owned as of March 31, 2026.

(2)

Same-store information includes operating results for 94 hotels owned by the Company as of January 1, 2025, and at all times during the three months ended March 31, 2026, and 2025.

Summit Hotel Properties, Inc.

Reconciliation of Net Loss to Non-GAAP Measures - EBITDA for Financial Outlook

(In thousands)

(Unaudited)

FYE 2026 Outlook

Low

High

Net loss

$ (32,900)

$ (18,400)

Depreciation and amortization

147,600

Interest expense

86,900

85,900

Interest income

(500)

Income tax expense

3,700

EBITDA

204,800

218,300

Loss on write-down of assets

3,600

EBITDAre

208,400

221,900

Equity-based compensation

8,900

Debt transaction costs

100

Other non-cash items, net

900

Loss related to non-controlling interests in consolidated joint ventures

3,700

1,200

Adjustments related to non-controlling interests in consolidated joint ventures

(52,000)

Adjusted EBITDAre

$ 170,000

$ 181,000

Summit Hotel Properties, Inc.

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

(In thousands except per share and unit)

(Unaudited)

FYE 2026 Outlook

Low

High

Net loss

$ (32,900)

$ (18,400)

Preferred dividends

(15,900)

Distributions to and accretion of redeemable non-controlling interests

(2,600)

Loss related to non-controlling interests in consolidated joint ventures

3,700

1,200

Net loss applicable to common shares and Common Units

(47,700)

(35,700)

Real estate-related depreciation

145,300

Loss on write-down of assets

3,600

FFO Adjustments related to non-controlling interests in consolidated joint ventures

(30,500)

FFO applicable to common shares and Common Units

70,700

82,700

Amortization of deferred financing costs

7,300

Amortization of franchise fees

700

Equity-based compensation

8,900

Debt transaction costs

100

Other non-cash items, net

4,200

AFFO Adjustments related to non-controlling interests in consolidated joint ventures

(1,900)

AFFO applicable to common shares and Common Units

$ 90,000

$ 102,000

Weighted average diluted common shares/Common Units for FFO and AFFO

120,400

FFO per common share and Common Unit

$ 0.59

$ 0.69

AFFO per common share/Common Unit

$ 0.75

$ 0.85

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"), 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, debt transaction costs, premiums on redemption of preferred shares, losses from net casualties, non-cash lease expense, non-cash interest income and non-cash income tax related adjustments to our deferred tax assets. 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, 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 corporate depreciation and amortization expense. Our computation of FFO may also differ from the methodology for calculating FFO used by other equity REITs and, accordingly, may not be comparable to such other REITs. FFO and AFFO should not be considered as an alternative to net income (loss) (computed in accordance with GAAP) as an indicator of our liquidity, nor is it indicative of funds available to fund our cash needs, including our ability to pay dividends or make distributions. Where indicated in this release, FFO is based on our computation of FFO and not the computation of Nareit-defined FFO unless otherwise noted.

EBITDA, EBITDAre, Adjusted EBITDAre, and Hotel EBITDA

In September 2017, Nareit proposed a standardized performance measure, called EBITDAre, which is based on EBITDA and is expected to provide additional relevant information about REITs as real estate companies in support of growing interest among generalist investors. The conclusion was reached that, while dedicated REIT investors have long been accustomed to utilizing the industry's supplemental measures such as FFO and net operating income ("NOI") to evaluate the investment quality of REITs as real estate companies, it would be helpful to generalist investors for REITs as real estate companies to also present EBITDAre as a more widely known and understood supplemental measure of performance. EBITDAre is intended to be a supplemental non-GAAP performance measure that is independent of a company's capital structure and will provide a uniform basis for one measurement of the enterprise value of a company compared to other REITs.

EBITDAre, as defined by Nareit, is calculated as EBITDA, excluding: (i) loss and gains on disposition of property and (ii) asset impairments, if any. We believe EBITDAre is useful to an investor in evaluating our operating performance because it provides investors with an indication of our ability to incur and service debt, to satisfy general operating expenses, to make capital expenditures and to fund other cash needs or reinvest cash into our business. We also believe it helps investors meaningfully evaluate and compare the results of our operations from period to period by removing the effect of our asset base (primarily depreciation and amortization) from our operating results.

We make additional adjustments to EBITDAre when evaluating our performance because we believe that the exclusion of certain additional non-recurring or unusual items described below provides useful supplemental information to investors regarding our on-going 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 on-going 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).

SOURCE Summit Hotel Properties, Inc.