Summit Hotel Properties Inc
For the period ended Sep 30, 2024. Filed Nov 4, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Nov 4, 2024
INN$7.00+1.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-07-30.
0001497645-24-000067
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-11-04.
0001497645-24-000077
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 149 previous paragraphs and 152 current paragraphs.
84 unchanged; 54 reworded; 12 added; 10 removed; 1 previous and 2 current paragraphs rearranged.
Tables are not compared: 13 previous and 13 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (12)
Current report
Other income, net for the three months ended September 30, 2023 consists primarily of $0.4 million of third-party tenant income, the realization of approximately $0.6 million of tax rebates related to the NCI Transaction during the period, partially offset by a net casualty loss of $0.4 million.
Current report
Total portfolio food and beverage expenses decreased by $0.5 million as a result of same-store food and beverage expenses remaining flat primarily due to a minimal decrease in same-store revenues, and a $0.5 million decrease in food and beverage expenses due to the net effect of the sale of four lodging properties during the nine months ended September 30, 2024 and five lodging properties in May and December 2023, and the acquisition of two lodging properties during the nine months ended September 30, 2023.
Current report
•Management Fees. Management fees decreased during the nine months ended September 30, 2024 due to the net effect of the sale of four lodging properties during the nine months ended September 30, 2024 and five lodging properties in May and December 2023, and the acquisition of two lodging properties during the nine months ended September 30, 2023, and amendments to certain property management agreements that resulted in lower property management fees for the nine months ended September 30, 2024.
Current report
•Depreciation and Amortization. Depreciation and amortization decreased by $2.3 million during the nine months ended September 30, 2024 compared with the nine months ended September 30, 2023 primarily due to the sale of four lodging properties during the nine months ended September 30, 2024 and five lodging properties in May and December 2023, partially offset by an increase in depreciation and amortization from the reclassification of a lodging property from Assets held for sale and the acquisition of two lodging properties during the nine months ended September 30, 2023.
Current report
•Gain (loss) on Disposal of Assets, net. Gain (loss) on disposal of assets, net of $28.8 million for the nine months ended September 30, 2024 was primarily the result of a $28.3 million gain recorded on the sale of a portfolio of two lodging properties in New Orleans, LA during the nine months ended September 30, 2024.
Current report
Other income, net for the nine months ended September 30, 2023 consists primarily of third-party tenant income of $1.1 million and the realization of $1.5 million of tax rebates related to the NCI Transaction during the period, partially offset by net casualty losses of $1.9 million, and other costs of $0.3 million.
Current report
AFFO applicable to shares of Common Stock and Common Units increased by $1.1 million for the three months ended September 30, 2024 in comparison with the three months ended September 30, 2023 due to lower interest expense, partially offset by a decline in hotel EBITDA of $0.6 million related to the net effect of the disposition of four lodging properties during the nine months ended September 30, 2024 and one lodging property in December 2023, and the acquisition of two lodging properties during the nine months ended September 30, 2023.
Current report
AFFO applicable to shares of Common Stock and Common Units increased by $8.0 million for the nine months ended September 30, 2024 in comparison with the three and nine months ended September 30, 2023 due to modest growth in RevPAR, expense management, and lower interest expense. The increase was also the result of the net effect on hotel EBITDA from the acquisition and disposition activities as described below under Adjusted EBITDArefor the nine months ended September 30, 2024.
Current report
The $1.0 million decrease in Adjusted EBITDAre for the three months ended September 30, 2024 in comparison with the three months ended September 30, 2023 was primarily the result of the disposition of four lodging properties during the nine months ended September 2024 and one lodging property in December 2023, which resulted in a decline in hotel EBITDA of $0.6 million, and a decrease in same-store hotel EBITDA driven by flat revenue and modest expense growth.
Current report
The $6.4 million increase in Adjusted EBITDArefor the nine months ended September 30, 2024 in comparison with the nine months ended September 30, 2023 was due to modest growth in RevPAR from improving demand for business transient and group travel which mitigated the effect of the normalization in leisure demand as well as expense management. The increase in Adjusted EBITDAre was partially offset by a decrease in hotel EBITDA of $0.2 million from net effect of the sale of four lodging properties during the nine months ended September 30, 2024 and five lodging properties in May and December 2023, and the acquisition of two lodging properties during the nine months ended September 30, 2023.
Current report
•Cash provided by (used in) investing activities. The increase in cash provided by investing activities was primarily due to the sale of four lodging properties during the nine months ended September 30, 2024 and the realization of a $9.9 million tax incentive related to the NCI Transaction during the nine months ended September 30, 2024, partially offset by $65.5 million of renovation and development expenditures.
Current report
Cash used in investing activities for the nine months ended September 30, 2023 was due to the acquisitions of the Residence Inn by Marriott - Scottsdale, AZ and the Nordic Lodge - Steamboat Springs, CO in June 2023, the funding of the Onera Mezzanine Loan (as defined in "Note 4 - Investment in Real Estate Loans" to the accompanying Consolidated Financial Statements) of $4.6 million, and $63.0 million of renovation expenditures, partially offset by the sale of four lodging properties during the nine months ended September 30, 2023.
Removed paragraphs (10)
Previous report
Same-store portfolio food and beverage expenses increased by $0.2 million as a result of a $0.2 million increase in food and beverage expenses driven by an increase in occupancy, and offset by a $0.4 million decline in food and beverage expenses due to the net effect of the sales and acquisitions of lodging properties.
Previous report
The following table is a comparison of other consolidated income and expenses (dollars in thousands).
Previous report
•Management Fees. Management fees decreased during the current period due to the net effect of the sales and acquisitions of lodging properties, and a re-negotiation of property management agreements with two of our properties managers in the third quarter of 2023 that resulted in lower property management fees in the current period.
Previous report
•Depreciation and Amortization. Depreciation and amortization had a minimal decrease between the six months ended June 30, 2024 and the six months ended June 30, 2023, primarily due to the net effect of the sales and acquisitions of lodging properties and renovation costs incurred during the six months ended June 30, 2023 and thereafter.
Previous report
AFFO applicable to shares of Common Stock and Common Units increased by $3.2 million and $7.0 million for the three and six months ended June 30, 2024 in comparison with the three and six months ended June 30, 2023 primarily as a result of the improvement in our business that was primarily driven by improving demand for business transient and group travel, and the net effect of the sales and acquisitions of lodging properties.
Previous report
The increase in Adjusted EBITDAre for the three and six months ended June 30, 2024 in comparison with the three and six months ended June 30, 2023 is primarily a result of the improvement in our business that was primarily driven by improving demand for business transient and group travel, and the net effect of the sales and acquisitions of lodging properties.
Previous report
We are exposed to interest rate risk through our variable-rate debt. We manage this risk primarily by managing the amount, sources, and duration of our debt funding and through the use of derivative financial instruments. Specifically, we enter into derivative financial instruments to manage our exposure to known or expected cash payments related to our variable-rate debt.
Previous report
In January 2024, subsidiaries of the GIC Joint Venture that are the borrowers under the GIC Joint Venture Term Loan entered into a $100.0 million interest rate swap to fix one-month term SOFR until January 2026. The interest rate swap has an effective date of October 1, 2024 and a termination date of January 13, 2026. Pursuant to the interest rate swap, we will pay a fixed rate of 3.77% and receive the one-month term SOFR floating rate index.
Previous report
During the six months ended June 30, 2024, the fair value of our interest rate swaps increased $5.1 million due to a change in interest rate expectations. Each interest rate swap fixes the interest rates on portions of our variable interest rate indebtedness and converts SOFR from a floating rate to average fixed rates ranging from 2.56% to 3.77%.
Previous report
•Cash provided by (used in) investing activities. The increase in cash provided by investing activities was primarily due to the sales of lodging properties during the six months ended June 30, 2024. Cash used in investing activities for the six months ended June 30, 2023 was due the acquisitions of the Residence Inn by Marriott in Scottsdale, AZ and the Nordic Lodge in June 2023. We incurred a comparable amount of capital expenditures for the renovation of our lodging properties in both periods.
Reworded paragraphs (54)
Previous wording
•availability of and the abilities of our property managers and us to retain qualified personnel at our lodging property and corporate offices;
Current wording
•availability of and the abilities of our property managers and us to retain qualified personnel at our lodging properties and corporate offices;
Previous wording
Summit Hotel Properties, Inc. is a self-managed lodging property investment company that was organized in June 2010 and completed its initial public offering in February 2011. We focus on owning lodging properties with efficient operating models that generate strong margins and investment returns. Our lodging properties are typically located in markets with multiple demand generators such as corporate offices and headquarters, retail centers, airports, state capitols, convention centers, and leisure attractions. Substantially all of our assets are held by, and all of our operations are conducted through, our operating partnership, Summit Hotel OP, LP (the “Operating Partnership”). Through a wholly-owned subsidiary, we are the sole general partner of the Operating Partnership. At June 30, 2024, we owned, directly and indirectly, approximately 87% of the Operating Partnership’s issued and outstanding common units of limited partnership interest (“Common Units”), and all of the Operating Partnership’s issued and outstanding 6.25% Series E and 5.875% Series F preferred units of limited partnership interest. NewcrestImage Image Holdings, LLC owns all of the issued and outstanding 5.25% Series Z Cumulative Perpetual Preferred Units (liquidation preference $25 per unit) of the Operating Partnership ("Series Z Preferred Units"), which was issued as part of the NCI Transaction (as defined in Note 5 -Debt to the accompanying Condensed Consolidated Financial Statements). We collectively refer to preferred units of limited partnership interests of our Operating Partnership as "Preferred Units."
Current wording
Summit Hotel Properties, Inc. is a self-managed lodging property investment company that was organized in June 2010 and completed its initial public offering in February 2011. We focus on owning lodging properties with efficient operating models that generate strong margins and investment returns. Our lodging properties are typically located in markets with multiple demand generators such as corporate offices and headquarters, retail centers, airports, state capitols, convention centers, and leisure attractions. Substantially all of our assets are held by, and all of our operations are conducted through, our operating partnership, Summit Hotel OP, LP (the “Operating Partnership”). Through a wholly-owned subsidiary, we are the sole general partner of the Operating Partnership. At September 30, 2024, we owned, directly and indirectly, approximately 87% of the Operating Partnership’s issued and outstanding common units of limited partnership interest (“Common Units”), and all of the Operating Partnership’s issued and outstanding 6.25% Series E and 5.875% Series F preferred units of limited partnership interest. NewcrestImage Holdings, LLC and NewcrestImage Holdings II, LLC own all of the issued and outstanding 5.25% Series Z Cumulative Perpetual Preferred Units (liquidation preference $25 per unit) of the Operating Partnership ("Series Z Preferred Units"), which was issued as part of the NCI Transaction (as defined in "Note 5 -Debt" to the accompanying Condensed Consolidated Financial Statements). We collectively refer to preferred units of limited partnership interests of our Operating Partnership as "Preferred Units."
Previous wording
At June 30, 2024, our portfolio consisted of 96 lodging properties with a total of 14,256 guestrooms located in 24 states. We own our lodging properties in fee simple, except for seven lodging properties which are subject to ground leases or subleases. As of June 30, 2024, we own 100% of the outstanding equity interests in 54 of the 96 lodging properties. We own a 51% controlling interest in 39 lodging properties through a joint venture that was formed in July 2019 with USFI G-Peak, Ltd. ("GIC"), a private limited company incorporated in the Republic of Singapore (the “GIC Joint Venture”). We also own 90% equity interests in two separate joint ventures (the "Brickell Joint Venture" and the "Onera Joint Venture"). The Brickell Joint Venture owns two lodging properties, and the Onera Joint Venture owns one lodging property.
Current wording
At September 30, 2024, our portfolio consisted of 96 lodging properties with a total of 14,255 guestrooms located in 24 states. We own our lodging properties in fee simple, except for seven lodging properties which are subject to ground leases or subleases. As of September 30, 2024, we own 100% of the outstanding equity interests in 54 of the 96 lodging properties. We own a 51% controlling interest in 39 lodging properties through a joint venture that was formed in July 2019 with USFI G-Peak, Ltd. ("GIC"), a private limited company incorporated in the Republic of Singapore (the “GIC Joint Venture”). We also own 90% equity interests in two separate joint ventures (the "Brickell Joint Venture" and the "Onera Joint Venture"). The Brickell Joint Venture owns two lodging properties, and the Onera Joint Venture owns one lodging property.
Previous wording
Room-night demand in the U.S. lodging industry is generally correlated to certain macroeconomic trends. Key drivers of lodging demand, and therefore hotel revenues, include changes in gross domestic product, corporate profits, capital investments, and employment. From a cost perspective, elevated inflation has been pervasive since 2022, increasing the cost of salaries, wages, supplies, material, freight, insurance and energy. Higher costs from broad inflationary pressures have been partially offset by lodging price increases. While growth rates have decelerated, inflation is still increasing faster than historical norms, which may continue throughout 2024.
Current wording
Room-night demand in the U.S. lodging industry is generally correlated to certain macroeconomic trends. Key drivers of lodging demand, and therefore hotel revenues, include changes in gross domestic product, corporate profits, capital investments, and employment. From a cost perspective, elevated inflation has been pervasive since 2022, increasing the cost of salaries, wages, supplies, material, freight, insurance and energy. Higher costs from broad inflationary pressures have been partially offset by lodging price increases.
Previous wording
During the six months ended June 30, 2024, we experienced continued revenue growth as a result of strong group travel and improvements in business transient demand which offset normalization in leisure demand. We expect room night demand growth, coupled with minimal forecasted supply growth, to drive continued industry RevPAR growth over the next several years.
Current wording
During the nine months ended September 30, 2024, we experienced continued same-store revenue growth as a result of strong group travel and improvements in business transient demand which offset normalization in leisure demand. RevPAR growth decelerated in the third quarter of 2024 from the first half of the year, predominantly driven by the continued normalization of leisure demand over the summer months. The long-term outlook for the industry remains favorable as forecasted room night demand growth and increases in average daily rate, coupled with minimal supply growth, are expected to drive continued industry RevPAR growth over the next several years.
Previous wording
According to current chain scales as defined by Smith Travel Research, Inc. ("STR"), as of June 30, 2024, six of our lodging properties with a total of 953 guestrooms are categorized as Upper-upscale hotels, 74 of our lodging properties with a total of 11,247 guestrooms are categorized as Upscale hotels and 14 of our lodging properties with a total of 1,998 guestrooms are categorized as Upper-midscale hotels. We have one lodging asset that is an 11-unit glamping property, and one 47-unit independent lodging property that are not categorized by STR. Lodging property information as of June 30, 2024 is as follows:
Current wording
According to current chain scales as defined by Smith Travel Research, Inc. ("STR"), as of September 30, 2024, six of our lodging properties with a total of 953 guestrooms are categorized as Upper-upscale hotels, 74 of our lodging properties with a total of 11,247 guestrooms are categorized as Upscale hotels and 14 of our lodging properties with a total of 1,998 guestrooms are categorized as Upper-midscale hotels. We have one lodging asset that is an 11-unit glamping property, and one 46-unit independent lodging property that are not categorized by STR. Lodging property information at September 30, 2024 is as follows:
Previous wording
The following table contains key operating metrics for our total portfolio for thethree months ended June 30, 2024 compared with thethree months ended June 30, 2023 (dollars in thousands, except ADR and RevPAR).
Current wording
The following table contains key operating metrics for our portfolio for thethree months ended September 30, 2024 compared with thethree months ended September 30, 2023 (dollars in thousands, except ADR and RevPAR).
Previous wording
The total portfolio information above for the six months ended June 30, 2024 and 2023 reflects operating results for various portions of each period for certain lodging properties as a result of the sales and acquisitions of lodging properties. The following table details how the acquisition and disposition transactions affect each reporting period:
Current wording
The portfolio information above for the three months ended September 30, 2024 and 2023 reflects operating results for various portions of each period for certain lodging properties as a result of the sales of lodging properties. The following table details how the disposition transactions affect each reporting period:
Previous wording
•Revenues and RevPAR. Room revenues for our total portfolio during the second quarter of 2024 compared with the second quarter of 2023 decreased by $1.2 million as a result of a $5.4 million increase in same-store revenues driven by improving business transient and group demand, offset by a $6.6 million decline in room revenues due to the net effect of the sales and acquisitions of lodging properties. For the applicable periods, the number of properties in our total portfolio declined from 101 lodging properties at June 30, 2023 to 96 lodging properties at June 30, 2024.
Current wording
•Revenues and RevPAR. Room revenues for our total portfolio during the third quarter of 2024 compared with the third quarter of 2023 decreased by $4.3 million as a result of a $0.3 million increase in same-store revenues driven by improving business transient and group demand which mitigated the effect of the normalization in leisure demand, offset by a $4.6 million decrease in room revenues due to the sale of four lodging properties during the nine months ended September 30, 2024 and the sale of one lodging property in December 2023. For the applicable periods, the number of properties in our total portfolio declined from 101 lodging properties at September 30, 2023 to 96 lodging properties at September 30, 2024.
Previous wording
The increase in RevPAR for our total portfolio during the second quarter of 2024 compared with the second quarter of 2023 was due to a 2.9% increase in occupancy and a 1.7% increase in ADR driven by improving business transient and group demand. The result was a 4.7% increase in RevPAR for the three months ended June 30, 2024 in comparison with the same period of the prior year. On a same store basis, the improvements in our business resulted in an increase of 2.4% in occupancy and an increase of 0.9% in ADR in the second quarter of 2024, which resulted in a 3.3% increase in same-store RevPAR. See "Industry Trends and Outlook" for further information.
Current wording
The 2.7% increase in RevPAR for our total portfolio during the third quarter of 2024 compared with the third quarter of 2023 was due to a 0.4% increase in occupancy and a 2.3% increase in ADR. The increase in RevPAR is partially the result of the sale of four lodging properties during the nine months ended September 30, 2024 and the sale of one lodging property in December 2023, all of which generally had lower nominal RevPAR than the remaining portfolio. On a same store basis, we experienced a decrease of 1.0% in occupancy and an increase of 1.2% in ADR in the third quarter of 2024, which resulted in a 0.2% increase in same-store RevPAR. See "Industry Trends and Outlook" for further information.
Previous wording
•Room Expenses. Room expenses for our total portfolio for the second quarter of 2024 compared with the second quarter of 2023 decreased by $0.7 million as a result of a $1.1 million increase in same-store room expenses driven by a 2.4% increase in same-store occupancy, offset by a $1.8 million decline in room expenses due to the net effect of the sales and acquisitions of lodging properties.
Current wording
•Room Expenses. Room expenses for our total portfolio for the third quarter of 2024 compared with the third quarter of 2023 decreased $0.2 million as a result of a $1.3 million increase in same-store room expenses driven by increases in hourly wages combined with normalized staffing levels, offset by a $1.5 million decrease in room expenses due to the effect of the sale of four lodging properties during the nine months ended September 30, 2024 and the sale of one lodging property in December 2023.
Previous wording
•Food and Beverage Revenues and Expenses. The $0.2 million decrease in total portfolio food and beverage revenues during the second quarter of 2024 compared with the second quarter of 2023 was driven by the net effect of the sales and acquisitions of lodging properties. Same-store food and beverage revenues were flat for the three months ended June 30, 2024 and 2023.
Current wording
•Food and Beverage Revenues and Expenses. The $0.7 million decrease in total portfolio food and beverage revenues during the third quarter of 2024 compared with the third quarter of 2023 was driven by a $0.5 million decrease in same-store food and beverage revenues as a result of a 1.0% decrease in occupancy, coupled with a $0.2 million decrease in food and beverage revenues as a result of the sale of four lodging properties during the nine months ended September 30, 2024 and the sale of one lodging property in December 2023.
Previous wording
Total portfolio food and beverage expenses decreased by $0.4 million as a result of a $0.2 million decrease in same-store food and beverage expenses driven by successful expense management related to food and beverage costs, and a $0.2 million decline in food and beverage expenses due to the net effect of the sales and acquisitions of lodging properties.
Current wording
Total portfolio food and beverage expenses decreased by $0.4 million as a result of a $0.2 million decrease in same-store food and beverage expenses driven by lower same-store food and beverage revenues resulting from a 1.0% decrease in occupancy, and a $0.2 million decrease in food and beverage expenses due to the effect of the sale of four lodging properties during the nine months ended September 30, 2024 and the sale of one lodging property in December 2023.
Previous wording
•Other Lodging Property Operating Revenues and Expenses. Other lodging property and operating revenues for our total portfolio during the second quarter of 2024 compared with the second quarter of 2023 increased by $0.8 million as a result of a $1.1 million increase in same-store other lodging property operating revenues driven by an increase in parking and resort fees as a result of higher occupancy, offset by a $0.3 million decline in other lodging property operating revenues due to the net effect of the sales and acquisitions of lodging properties.
Current wording
•Other Lodging Property Operating Revenues and Expenses. Other lodging property and operating revenues for our total portfolio during the third quarter of 2024 compared with the third quarter of 2023 remained flat as a result of a $0.2 million increase in same-store other lodging property operating revenues driven by an increase in parking and resort fees, offset by a $0.2 million decline in other lodging property operating revenues due to the effect of the sale of four lodging properties during the nine months ended September 30, 2024 and the sale of one lodging property in December 2023.
Previous wording
The $0.4 million decrease in other lodging property operating expenses for the total portfolio for the three months ended June 30, 2024 in comparison with the three months ended June 30, 2023 was attributable to a $1.7 million increase in same-store other lodging property operating expenses driven by increased marketing costs, labor costs, credit card commissions and other increases primarily from higher same-store occupancy, offset by a $2.1 million decline in other lodging property operating expenses due to the net effect of the sales and acquisitions of lodging properties.
Current wording
The $0.5 million increase in other lodging property operating expenses for the total portfolio for the three months ended September 30, 2024 in comparison with the three months ended September 30, 2023 was attributable to a $2.5 million increase in same-store other lodging property operating expenses. This increase was driven by labor costs, credit card commissions, sales and marketing costs, and utilities. These increases were offset by a $2.0 million decrease in other lodging property operating expenses due to the effect of the sale of four lodging properties during the nine months ended September 30, 2024 and the sale of one lodging property in December 2023.
Previous wording
•Property Taxes, Insurance and Other. The decrease in Property taxes, insurance and other during the three months ended June 30, 2024 is primarily due to an increase in property tax refunds and lower property assessments of $0.5 million as a result of successful appeal efforts to reduce property tax assessments, coupled with a reduction of state franchise taxes and other tax accruals during the period of $0.3 million, and a decrease in property and casualty insurance premiums.
Current wording
•Property Taxes, Insurance and Other. The decrease in Property taxes, insurance and other during the three months ended September 30, 2024 is primarily due to an increase in property tax refunds of $0.6 million as a result of successful appeal efforts to reduce property tax assessments, coupled with a reduction of state franchise taxes and other tax accruals during the period of $0.5 million.
Previous wording
•Management Fees. Management fees decreased during the current period due to the net effect of the sales and acquisitions of lodging properties, and a re-negotiation of certain property management agreements in 2023 and 2024 that resulted in lower property management fees in the current period.
Current wording
•Management Fees. Management fees decreased during the current period due to the effect of the sale of four lodging properties during the nine months ended September 30, 2024 and the sale of one lodging property in December 2023, and amendments to certain property management agreements that resulted in lower average management fees in the current period.
Previous wording
•Depreciation and Amortization. Depreciation and amortization had a minimal decrease during the three months ended June 30, 2024 compared to the three months ended June 30, 2023, which was primarily the net effect of the sales and acquisitions of lodging properties, and renovation costs incurred during the three months ended June 30, 2023 and thereafter.
Current wording
•Depreciation and Amortization. Depreciation and amortization decreased by $1.2 million during the three months ended September 30, 2024 compared to the three months ended September 30, 2023, primarily due to the effect of the sale of four lodging properties during the nine months ended September 30, 2024 and the sale of one lodging property in December 2023, partially offset by additional depreciation and amortization related to the reclassification of a lodging property from Assets held for sale and renovation costs incurred during the three months ended September 30, 2023 and thereafter.
Previous wording
•Corporate General and Administrative. Corporate general and administrative expenses decreased during the three months ended June 30, 2024 primarily due to a decrease in legal and professional fees and a decrease in corporate employee-related costs.
Current wording
•Corporate General and Administrative. Corporate general and administrative expenses decreased by $0.7 million during the three months ended September 30, 2024 primarily due to a decrease in legal and professional fees and corporate employee-related costs.
Previous wording
•Interest Expense. Interest expense decreased during the three months ended June 30, 2024 due to lower average outstanding debt for the current period compared with the three months ended June 30, 2023.
Current wording
•Interest Expense. Interest expense decreased by $1.6 million during the three months ended September 30, 2024 primarily due to lower average outstanding debt for the current period compared with the three months ended September 30, 2023.
Previous wording
•Other Income, net. Other income, net for the six months ended June 30, 2024 consists primarily of $0.7 million in state grants awarded during the period, and net casualty income of $0.9 million. Other income for the six months ended June 30, 2024 also includes third-party tenant income of $1.3 million, and the realization of approximately $0.8 million of tax incentives related to the NCI Transaction, partially offset by other net expense items totaling $0.7 million.
Current wording
•Other Income, net. Other income, net for the three months ended September 30, 2024 consists primarily of $0.5 million of third-party tenant income, the realization of approximately $0.8 million of tax rebates related to the NCI Transaction during the period, partially offset by a net casualty loss of $0.2 million.
Previous wording
•Income Tax Expense. Income taxes in interim quarters are based on an estimated annual effective tax rate. The Company recorded a $2.4 million income tax expense during the three months ended June 30, 2024, which represents an increase of $1.6 million when compared with the same period in the previous year. Seasonality in quarterly net income (loss), and changes in the forecasted earnings causes variability in income taxes recorded in each quarter.
Current wording
•Income Tax Expense. Income taxes in interim quarters are based on an estimated annual effective tax rate. The Company recorded a $0.3 million income tax expense during the three months ended September 30, 2024, which represents a decrease of $1.0 million when compared with the same period in the previous year. Seasonality in quarterly net income (loss), and changes in the forecasted earnings causes variability in income taxes recorded in each quarter.
Previous wording
Comparison of the Six Months Ended June 30, 2024 with the Six Months Ended June 30, 2023
Current wording
Comparison of the Nine Months Ended September 30, 2024 with the Nine Months Ended September 30, 2023
Previous wording
The following table contains key operating metrics for our total portfolio for the six months ended June 30, 2024 compared with the six months ended June 30, 2023 (dollars in thousands, except ADR and RevPAR):
Current wording
The following table contains key operating metrics for our portfolio for the nine months ended September 30, 2024 compared with the nine months ended September 30, 2023 (dollars in thousands, except ADR and RevPAR):
Previous wording
The total portfolio information above for the three months ended June 30, 2024 and 2023 reflects operating results for various portions of each period for certain lodging properties as a result of the sales and acquisitions of lodging properties. The following table details how the acquisition and disposition transactions affect each reporting period:
Current wording
The total portfolio information above for the nine months ended September 30, 2024 and 2023 reflects operating results for various portions of each period for certain lodging properties as a result of the sales and acquisitions of lodging properties. The following table details how the acquisition and disposition transactions affect each reporting period:
Previous wording
•Revenues and RevPAR. Room revenues for our total portfolio for the six months ended June 30, 2024 compared with the six months ended June 30, 2023 increased by $3.2 million as a result of a $9.2 million increase in same-store revenues driven by improving business transient and group demand, offset by a $6.0 million decline in room revenues due to the net effect of the sales and acquisitions of lodging properties. For the applicable periods, the number of properties in our total portfolio declined from 101 lodging properties at June 30, 2023 to 96 lodging properties at June 30, 2024.
Current wording
•Revenues and RevPAR. Room revenues for our total portfolio for the nine months ended September 30, 2024 compared with the nine months ended September 30, 2023 decreased by $1.1 million as a result of a $10.6 million decrease in room revenues due to the net effect of the sale of four lodging properties during the nine months ended September 30, 2024 and five lodging properties in May and December 2023, all of which generally had lower nominal RevPAR than the remaining portfolio, and the acquisition of two lodging properties during the nine months ended September 30, 2023, partially offset by a $9.5 million increase in same-store revenues driven by improving business transient and group demand which mitigated the effect of the normalization in leisure demand. For the applicable periods, the number of properties in our total portfolio declined from 101 lodging properties at September 30, 2023 to 96 lodging properties at September 30, 2024.
Previous wording
The increase in RevPAR for our total portfolio for the six months ended June 30, 2024 compared with the six months ended June 30, 2023 was due to a 3.5% increase in our occupancy and a 1.2% increase in ADR driven by improving business transient and group demand. The result was an increase in RevPAR of 4.7% for the six months ended June 30, 2023 in comparison with the same period of the prior year. On a same store basis, the improvements in our business resulted in an increase of approximately 2.5% in occupancy, partially offset by a 0.2% decrease in ADR during the six months ended June 30, 2024, which resulted in a 2.3% increase in same-store RevPAR.
Current wording
The 4.1% increase in RevPAR for our total portfolio for the nine months ended September 30, 2024 compared with the nine months ended September 30, 2023 was due to a 2.3% increase in our occupancy and a 1.6% increase in ADR driven by improving business transient and group demand. On a same-store basis, the improvements in our business from business transient and group business resulted in an increase of approximately 1.3% in occupancy and a 0.3% increase in ADR during the nine months ended September 30, 2024, which resulted in a 1.6% increase in same-store RevPAR.
Previous wording
•Room Expenses. Room expenses for our total portfolio for the six months ended June 30, 2024 compared with the six months ended June 30, 2023 decreased by $0.7 million as a result of a $2.1 million increase in same-store room expenses driven by a 2.5% increase in same-store occupancy, offset by a $2.8 million decline in room expenses due to the net effect of the sales and acquisitions of lodging properties.
Current wording
•Room Expenses. Room expenses for our total portfolio for the nine months ended September 30, 2024 compared with the nine months ended September 30, 2023 decreased by $0.9 million as a result of a $3.3 million increase in same-store room expenses driven by a 1.3% increase in same-store occupancy, offset by a $4.2 million decline in room expenses due to the net effect of the sale of four lodging properties during the nine months ended September 30, 2024 and five lodging properties in May and December 2023, and the acquisition of two lodging properties during the nine months ended September 30, 2023.
Previous wording
•Food and Beverage Revenues and Expenses. Total portfolio food and beverage revenues were flat during the six months ended June 30, 2024 and 2023 as a result of an increase in same-store food and beverage revenues of $0.3 million driven by an increase in occupancy and group-related catering, offset by a $0.3 million decrease in food and beverage revenues due to the net effect of the sales and acquisitions of lodging properties.
Current wording
•Food and Beverage Revenues and Expenses. Total portfolio food and beverage revenues for the nine months ended September 30, 2024 compared with the nine months ended September 30, 2023 decreased by $0.7 million as a result of a $0.2 million decrease in same-store food and beverage revenues and a $0.5 million decrease in expenses due to the net effect of the sale of four lodging properties during the nine months ended September 30, 2024 and five lodging properties in May and December 2023, and the acquisition of two lodging properties during the nine months ended September 30, 2023.
Previous wording
•Other Revenues and Other Lodging Property Operating Expenses. Other lodging property operating revenues for our total portfolio during the six months ended June 30, 2024 compared with the six months ended June 30, 2023 increased by $2.0 million as a result of a $2.2 million increase in same-store other lodging property and operating revenues driven by an increase in parking and resort fees as a result of higher occupancy, offset by a $0.2 million decline in other lodging property operating revenues due to the net effect of the sales and acquisitions of lodging properties.
Current wording
•Other Revenues and Other Lodging Property Operating Expenses. Other lodging property operating revenues for our total portfolio during the nine months ended September 30, 2024 compared with the nine months ended September 30, 2023 increased by $2.0 million as a result of a $2.5 million increase in same-store other lodging property and operating revenues related to an increase in parking and resort fees due to higher occupancy, partially offset by a $0.5 million decrease in other lodging property operating revenues driven by the net effect the sale of four lodging properties during the nine months ended September 30, 2024 and five lodging properties in May and December 2023, and the acquisition of two lodging properties during the nine months ended September 30, 2023.
Previous wording
The $0.2 million decrease in other lodging property operating expenses for the total portfolio for the six months ended June 30, 2024 in comparison with the six months ended June 30, 2023 was attributable to a $2.7 million increase in same-store other lodging property operating expenses driven by increased marketing costs, labor costs, credit card commissions and other increases primarily from higher occupancy, offset by a $2.9 million decline in other lodging property operating expenses due to the net effect of the sales and acquisitions of lodging properties.
Current wording
The $0.3 million increase in other lodging property operating expenses for the total portfolio for the nine months ended September 30, 2024 in comparison with the nine months ended September 30, 2023 was driven by increased labor costs, credit card commissions, sales and marketing costs, and utilities. These increases were partially offset by a $4.9 million decrease in other lodging property operating expenses due to the net effect of the sale of four lodging properties during the nine months ended September 30, 2024 and five lodging properties in May and December 2023, and the acquisition of two lodging properties during the nine months ended September 30, 2023.
Previous wording
•Property Taxes, Insurance and Other. The decrease in Property taxes, insurance and other during the six months ended June 30, 2024 is primarily due to an increase in property tax refunds of $0.6 million as a result of successful appeal efforts to reduce property tax assessments, coupled with a reduction of state franchise taxes and other tax accruals during the period of $0.5 million, partially offset by an increase in property and casualty insurance premiums of $0.3 million.
Current wording
•Property Taxes, Insurance and Other. The $2.5 million decrease in Property taxes, insurance and other during the nine months ended September 30, 2024 is primarily due to an increase in property tax refunds of $1.4 million as a result of successful appeal efforts to reduce property tax assessments, coupled with a reduction of state franchise taxes and other tax accruals during the period of $1.1 million.
Previous wording
•Corporate General and Administrative. Corporate general and administrative expenses were flat for the six months ended June 30, 2024 compared with the six months ended June 30, 2023 due to an increase in employee compensation and non-cash stock-based compensation expenses of $0.8 million during the six months ended June 30, 2024, mostly offset by a decrease in legal and professional fees of $0.7 million.
Current wording
•Corporate General and Administrative. Corporate general and administrative expenses decreased by $0.7 million during the nine months ended September 30, 2024 compared with the nine months ended September 30, 2023 due to a decrease in legal and professional fees of $1.0 million, partially offset by a $0.3 million increase in corporate employee-related costs.
Previous wording
•Interest Expense. Interest expense decreased during the six months ended June 30, 2024 due to lower average outstanding debt for the current period compared with the same period of the prior year.
Current wording
•Interest Expense. Interest expense decreased by $2.3 million during the nine months ended September 30, 2024 primarily due to lower average outstanding debt for the current period compared with the same period of the prior year.
Previous wording
•Gain on Extinguishment of Debt. The gain on extinguishment of debt for the three months ended June 30, 2024 was the result of the repayment of the MetaBank Loan in June 2024 prior to its scheduled maturity date, which resulted in a gain on extinguishment of debt of $3.0 million after legal fees and unamortized debt issuance costs that were written-off on the closing date. See Note 5 - Debt to the accompanying Condensed Consolidated Financial Statements.
Current wording
•Gain on Extinguishment of Debt. The gain on extinguishment of debt for the nine months ended September 30, 2024 was the result of the repayment of the MetaBank Loan (as defined in "Note 5 - Debt" to the accompanying Condensed Consolidated Financial Statements) in June 2024 prior to its scheduled maturity date, which resulted in a gain on extinguishment of debt of $3.0 million after legal fees and unamortized debt issuance costs that were written-off on the closing date.
Previous wording
•Other Income, net. Other income, net for the three months ended June 30, 2024 consists primarily of $0.7 million of third-party tenant income, $0.4 million in state grants awarded during the period, and net casualty income of $0.6 million.
Current wording
•Other Income, net. Other income, net for the nine months ended September 30, 2024 consists primarily of third-party tenant income of $1.7 million, the realization of $1.5 million of tax rebates related to the NCI Transaction (as defined in "Note 5 - Debt" to the accompanying Condensed Consolidated Financial Statements) during the period, and net casualty income of $0.6 million.
Previous wording
•Income Tax Expense (Benefit). Income taxes in interim quarters are based on an estimated annual effective tax rate. The Company recorded $2.6 million in income tax expense for the six months ended June 30, 2024, which represents an increase of $2.3 million from the six months ended June 30, 2023. Seasonality in quarterly net income (loss), and changes in the forecasted earnings causes variability in income taxes recorded in each quarter.
Current wording
•Income Tax Expense. Income taxes in interim quarters are based on an estimated annual effective tax rate. The Company recorded $2.9 million in income tax expense for the nine months ended September 30, 2024, which represents an increase of $1.2 million from the nine months ended September 30, 2023. Seasonality in quarterly net income (loss), and changes in the forecasted earnings causes variability in income taxes recorded in each quarter.
Previous wording
The following is an unaudited reconciliation of our Net income (loss), determined in accordance with GAAP, to FFO and AFFO (in thousands, except per share/unit amounts):
Current wording
The following is an unaudited reconciliation of our Net (loss) income, determined in accordance with GAAP, to FFO and AFFO (in thousands, except per share/unit amounts):
Previous wording
(1) The weighted-average diluted shares of Common Stock and Common Units used to calculate FFO and AFFO per share of Common Stock and Common Units for the three and six months ended June 30, 2023 includes the dilutive effect of our outstanding restricted stock awards. These shares were excluded from our weighted-average shares outstanding used to calculate net loss per share because they would have been antidilutive. The weighted-average shares of Common Stock and Common Units used to calculate FFO and AFFO per share of Common Stock and Common Units for the three and six months ended June 30, 2024 and 2023 exclude the potential dilution related to our Convertible Notes as we intend to settle the principal value of the Convertible Notes in cash.
Current wording
(1) The weighted-average diluted shares of Common Stock and Common Units used to calculate FFO and AFFO per share of Common Stock and Common Units for the three months ended September 30, 2024 and the three and nine months ended September 30, 2023 includes the dilutive effect of our outstanding restricted stock awards. These shares were excluded from our weighted-average shares outstanding used to calculate net loss per share because they would have been antidilutive. The weighted-average shares of Common Stock and Common Units used to calculate FFO and AFFO per share of Common Stock and Common Units for the three and nine months ended September 30, 2024 and 2023 exclude the potential dilution related to our Convertible Notes as we intend to settle the principal value of the Convertible Notes in cash.
Previous wording
The following is an unaudited reconciliation of weighted-average diluted shares of Common Stock to non-GAAP weighted-average diluted shares of Common Stock and Common Units for FFO and AFFO (in thousands):
Current wording
The following is an unaudited reconciliation of weighted-average diluted shares of Common Stock to non-GAAP weighted-average diluted shares of Common Shares and Common Units for FFO and AFFO (in thousands):
Showing the first 40 of 54 pairs. Open the source sections for the rest.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
The following table includes other consolidated income and expenses for the nine months ended September 30, 2024 compared with the nine months ended September 30, 2023 (dollars in thousands):
Current report — wording carried from elsewhere
(1) The weighted-average shares of Common Stock and Common Units used to calculate FFO and AFFO per share of Common Stock and Common Units for the three and nine months ended September 30, 2024 and 2023 exclude the potential dilution related to our Convertible Notes as we intend to settle the principal amount of the Convertible Notes in cash.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
•Gain on Extinguishment of Debt. The gain on extinguishment of debt for the six months ended June 30, 2024 was the result of the repayment of the MetaBank Loan in June 2024 prior to its scheduled maturity date, which resulted in a gain on extinguishment of debt of $3.0 million after legal fees and unamortized debt issuance costs that were written-off on the closing date. See Note 5 - Debt to the accompanying Condensed Consolidated Financial Statements.