Summit Hotel Properties, Inc.

Previous wording

•global, national, regional and local economic and political conditions and events, including wars or potential hostilities, such as terrorist attacks, that may affect business transient, group and other travel or consumer behavior;

Current wording

•global, national, regional and local economic and geopolitical conditions and events, including wars or potential hostilities, such as future terrorist attacks, that may negatively affect business transient, group and other travel or consumer behavior;

Previous wording

•macroeconomic conditions related to, and our ability to manage, inflationary pressures for labor, commodities, and other costs of our business;

Current wording

•macroeconomic conditions related to, and our ability to manage, inflationary pressures for commodities, labor and other costs of our business;

Previous wording

•potential changes in operations as a result of new regulations or changes in brand standards;

Current wording

•potential changes in operations, including as a result of new regulations or changes in brand standards;

Previous wording

•default by borrowers to which we lend;

Current wording

•default by borrowers to which we lend or provide seller financing;

Previous wording

•significant increases in the cost of real property taxes and/or insurance;

Current wording

•significant increases in the cost of real property taxes;

Previous wording

•the nature of our structure and transactions such that our federal and state taxes are complex and there is risk of successful challenges to our tax positions by the Internal Revenue Service or other federal and state taxing authorities;

Current wording

•the nature of our structure and transactions such that our federal and state taxes are complex and there is risk of successful challenges to our tax positions by the Internal Revenue Service (“IRS”) or other federal and state taxing authorities;

Previous wording

•availability of and the abilities of our property managers and us to retain qualified personnel at our lodging properties and corporate offices;

Current wording

•availability of and the abilities of our property managers and us to retain qualified personnel at our lodging property 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 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."

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 March 31, 2025, we owned, directly and indirectly, approximately 90% 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 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 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.

Current wording

At March 31, 2025, our portfolio consisted of 97 lodging properties with a total of 14,555 guestrooms located in 25 states of the United States of America. We own our lodging properties in fee simple, except for seven lodging properties which are subject to ground leases or subleases. As of March 31, 2025, we own 100% of the outstanding equity interests in 53 of the 97 lodging properties. We own a 51% controlling interest in 41 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

Our hotel properties primarily operate under premium franchise brands owned by Marriott® International, Inc. (“Marriott”), Hilton® Worldwide (“Hilton”), Hyatt® Hotels Corporation (“Hyatt”) and InterContinental® Hotels Group (“IHG”). We own one glamping property that operates under the independent brand of Onera Escapes ("Onera"), and the Nordic Lodge in Steamboat Springs, CO that we acquired in June 2023, which is an independent lodging property.

Current wording

Our hotel properties primarily operate under premium franchise brands owned by Marriott® International, Inc. (“Marriott”), Hilton® Worldwide (“Hilton”), Hyatt® Hotels Corporation (“Hyatt”) and InterContinental® Hotels Group (“IHG”). We also own two independent lodging properties.

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.

Current wording

Room-night demand in the U.S. lodging industry is generally correlated to certain macroeconomic trends. Key drivers of demand, and therefore lodging revenues, include changes in gross domestic product, corporate profits, capital investments, employment, and consumer and corporate sentiment. From a cost perspective, elevated inflation increased the cost of salaries, wages, supplies, material, freight, insurance and energy in recent years. A portion of these costs were partially offset by increases in average rates for lodging properties. Expense growth has moderated to a pace consistent with historical long-term inflation rates; however, certain costs remain above historical levels and could be further affected by recent tariff activity.

Previous 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.

Current wording

During the three months ended March 31, 2025, we experienced modest same-store revenue growth resulting from stable group travel and business transient demand which offset a reduction in government-related travel as well as inbound international travel. Changes in U.S. financial policies, including recently announced tariffs, have created uncertainty and volatility in the financial markets, which has had a negative effect on consumer and corporate sentiment. This could result in a reduction in near-term lodging demand. 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 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 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:

Current wording

According to current chain scales as defined by Smith Travel Research, Inc. (“STR”), as of March 31, 2025, 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 11,295 guestrooms are categorized as Upscale hotels and 15 of our lodging properties with a total of 2,248 guestrooms are categorized as Upper-midscale hotels. We have one lodging asset that is a 12-unit glamping property and one 47-unit independent lodging property that are not categorized by STR. Lodging property information at March 31, 2025 is as follows:

Previous 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:

Current wording

The portfolio information above for the three months ended March 31, 2025 and 2024 reflects operating results for various portions of each period for certain lodging properties as a result of the acquisition and sales 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 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.

Current wording

•Revenues and RevPAR. Room revenues for our total portfolio during the first quarter of 2025 compared with the first quarter of 2024 decreased by $3.7 million as a result of a $4.3 million decrease in room revenues due to the net effect of the sale of five lodging properties during the year ended December 31, 2024 (the "2024 Sold Properties") and the acquisition of two lodging properties during the year ended December 31, 2024 (the "2024 Acquired Properties"), partially offset by a $0.6 million increase in same-store revenues driven by stable business transient and group demand, which mitigated the effect of the reduced government-related and inbound international travel.

Previous 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.

Current wording

•Room Expenses. Room expenses for our total portfolio for the first quarter of 2025 compared with the first quarter of 2024 increased $0.2 million as a result of a $0.7 million increase in same-store room expenses primarily driven by an increase of 0.8% in same-store occupancy, offset by a net $0.5 million decrease in room expenses due to the net effect of the sale of the 2024 Sold Properties and the acquisition of the 2024 Acquired Properties.

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 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.

Current wording

•Food and Beverage Revenues and Expenses. Total portfolio food and beverage revenues increased $0.2 million for the first quarter of 2025 compared with the first quarter of 2024 due to a $0.2 million increase in same-store food and beverage revenues as a result of a 0.8% increase in occupancy. Total portfolio food and beverage expenses decreased by $0.2 million primarily as a result of a $0.2 million decrease in same-store food and beverage expenses due to the modification of various breakfast programs and the benefit from certain special events during the three months ended March 31, 2025 that resulted in a modest reduction in food and beverage expenses of 2.6% compared to the same period of the prior year.

Previous 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.

Current wording

•Other Lodging Property Operating Revenues and Expenses. Other lodging property and operating revenues for our total portfolio during the first quarter of 2025 compared with the first quarter of 2024 decreased $0.1 million as a result of a $0.2 million decline in other lodging property operating revenues due to the net effect of the sale of the 2024 Sold Properties and the acquisition of the 2024 Acquired Properties, partially offset by a $0.1 million increase in same-store other lodging property operating revenues driven by an increase in parking and resort fees.

Previous 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.

Current wording

The $0.7 million increase in other lodging property operating expenses for the total portfolio for the three months ended March 31, 2025 in comparison with the three months ended March 31, 2024 was attributable to a $1.6 million increase in same-store other lodging property operating expenses. This increase was driven by labor costs, sales and marketing costs, and utilities. These increases were partially offset by a $0.9 million decrease in other lodging property operating expenses due to the net effect of the sale of the 2024 Sold Properties and the acquisition of the 2024 Acquisition Properties.

Previous 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.

Current wording

•Property Taxes, Insurance and Other. The decrease in Property taxes, insurance and other during the three months ended March 31, 2025 is primarily the result of lower property taxes of approximately $0.2 million due to the net effect of the sale of the 2024 Sold Properties and the acquisition of the 2024 Acquired Properties, an increase in property tax refunds of $0.3 million as a result of successful appeal efforts to reduce property tax assessments, combined with a $0.4 million decrease in insurance costs.

Previous 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.

Current wording

•Corporate General and Administrative. Corporate general and administrative expenses increased by $0.3 million during the three months ended March 31, 2025 primarily due to an increase in corporate employee-related costs.

Previous 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.

Current wording

•Interest Expense. Interest expense decreased by $1.6 million during the three months ended March 31, 2025 primarily due to lower average interest rates coupled with a decrease in our average outstanding debt for the current period compared with the three months ended March 31, 2024.

Previous 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.

Current wording

•Other Income, net. Other income, net for the three months ended March 31, 2025 consists primarily of $0.7 million of third-party tenant income, the realization of approximately $0.7 million of tax rebates related to the NCI Transaction during the period, partially offset by a net casualty loss of $0.3 million.

Previous wording

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 wording

Other income, net for the three months ended March 31, 2024 consists primarily of $0.6 million of third-party tenant income, the realization of approximately $0.4 million of tax rebates related to the NCI Transaction during the period, and net casualty income of $0.3 million, partially offset by debt transaction costs of $0.6 million related to the replacement of a term loan during the first quarter of 2024.

Previous 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.

Current wording

•Income Tax Expense. The Company recorded a $0.8 million income tax expense during the three months ended March 31, 2025, which represents an increase of $0.5 million when compared with the same period in the previous year. Income tax expense varies based on changes in our forecasted effective tax rate over the course of the year and variability in quarterly net income (loss).

Previous wording

As defined by the National Association of Real Estate Investment Trusts ("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 Stock and Common Units. We present FFO and AFFO because we consider FFO and AFFO important supplemental measures of our operational performance and believe they are 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, which is de minimus. Our computation of FFO may also differ from the methodology for calculating FFO used by other equity REITs and, accordingly, may not be comparable to such other REITs. FFO and AFFO should not be considered as alternatives to net income (loss) (computed in accordance with GAAP), as an indicator of our liquidity, nor are they indicative of funds available to meet our cash needs, including our ability to pay dividends or make distributions. Where indicated in this Quarterly Report on Form 10-Q, FFO is based on our computation of FFO and not the computation of Nareit-defined FFO unless otherwise noted.

Current wording

As defined by the National Association of Real Estate Investment Trusts (“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 Stock and Common Units. We present FFO and AFFO because we consider FFO and AFFO important supplemental measures of our operational performance and believe they are 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, which is de minimis. 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 alternatives to net income (loss) (computed in accordance with GAAP), as an indicator of our liquidity, nor are they indicative of funds available to meet our cash needs, including our ability to pay dividends or make distributions. Where indicated in this Quarterly Report on Form 10-Q, FFO is based on our computation of FFO and not the computation of Nareit-defined FFO unless otherwise noted.

Previous 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):

Current wording

The following is an unaudited reconciliation of our Net 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 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.

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 March 31, 2025 and 2024 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.

Previous wording

(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.

Current wording

(3) The weighted-average shares of Common Stock and Common Units used to calculate FFO and AFFO per share of Common Stock and Common Unit for the three months ended March 31, 2025 and 2024 exclude the potential dilution related to our Convertible Notes as we intend to settle the Convertible Notes at maturity in cash.

Previous wording

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 wording

AFFO applicable to shares of common stock and Common Units decreased by $2.6 million for the three months ended March 31, 2025 compared with the three months ended March 31, 2024 due to a decrease in hotel EBITDA from the net effect of the sale of the 2024 Sold Properties and the acquisition of the 2024 Acquired Properties, partially offset by modest growth in same-store RevPAR and hotel EBITDA and lower interest expense.

Previous wording

We make additional adjustments to EBITDAre when evaluating our performance, such as adjustments related to the provision for credit losses, because we believe that the exclusion of certain additional non-recurring or certain non-cash items described below provides useful supplemental information to investors regarding our ongoing operating performance. We believe that the presentation of Adjusted EBITDAre, when combined with the primary GAAP presentation of net income, is useful to an investor in evaluating our operating performance because it provides investors with an indication of our ability to incur and service debt, to satisfy general operating expenses, to make capital expenditures and to fund other cash needs or reinvest cash into our business. We also believe it helps investors meaningfully evaluate and compare the results of our operations from period to period by removing the effect of our asset base (primarily depreciation and amortization) from our operating results.

Current wording

We make additional adjustments to EBITDAre when evaluating our performance, such as adjustments related to the provision for credit losses, because we believe that the exclusion of certain additional non-recurring or certain non-cash 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.

Previous wording

The following is an unaudited reconciliation of our Net (loss) income, determined in accordance with GAAP, to EBITDA, EBITDAre and Adjusted EBITDAre, (in thousands):

Current wording

The following is an unaudited reconciliation of our Net income, determined in accordance with GAAP, to EBITDA, EBITDAre and Adjusted EBITDAre, (in thousands):

Previous wording

Our short-term cash obligations consist primarily of operating expenses and other expenditures directly associated with our lodging properties, recurring maintenance and capital expenditures necessary to maintain our lodging properties in accordance with internal and brand standards, capital expenditures to improve our lodging properties, interest payments, settlement of interest rate swaps, scheduled principal payments on outstanding indebtedness, restricted cash funding obligations, our joint venture acquisitions and capital requirements, contractual lease payments, corporate overhead, and dividends and distributions to our stockholders and unitholders when declared and paid. Our corporate overhead primarily consists of employee compensation expenses, professional fees, corporate insurance and rent expenses. Cash requirements for our corporate overhead expenses (excluding non-cash equity-based compensation), which are generally paid from operating cash flows, were $18.2 million and $19.3 million, for the nine months ended September 30, 2024 and 2023, respectively. We generally expect our corporate overhead expenses to remain consistent with the level of our operating activities and market conditions for goods and services.

Current wording

Our short-term cash obligations consist primarily of operating expenses and other expenditures directly associated with our lodging properties, recurring maintenance and capital expenditures necessary to maintain our lodging properties in accordance with internal and brand standards, capital expenditures to improve our lodging properties, interest payments, settlement of interest rate swaps, scheduled principal payments on outstanding indebtedness, restricted cash funding obligations, our joint venture acquisitions and capital requirements, contractual lease payments, corporate overhead, and dividends and distributions to our stockholders and unitholders when declared and paid. Our corporate overhead primarily consists of employee compensation expenses, professional fees, corporate insurance and rent expenses. Cash requirements for our corporate overhead expenses (excluding non-cash equity-based compensation), which are generally paid from operating cash flows, were $6.7 million and $6.5 million, for the three months ended March 31, 2025 and 2024, respectively. We generally expect our corporate overhead expenses to remain consistent with the level of our operating activities and market conditions for goods and services.

Previous wording

Our sources of cash are primarily from operating cash flows, sales of lodging properties, principal and interest payments from borrowers on notes receivable, and debt financing.

Current wording

Our sources of cash are primarily from operating cash flows, sales of lodging properties, principal and interest payments from borrowers on notes receivable, and debt financing including available balances on our revolving loans.

Previous wording

We have obtained financing through debt instruments having staggered maturities and intend to continue to do so in the future. Our debt includes, and may include in the future, debt secured by equity pledges, debt secured by first priority mortgage liens on certain lodging properties and unsecured debt. We believe that we will have adequate liquidity to meet the requirements for scheduled maturities and principal repayments. However, we can provide no assurance that we will be able to refinance our indebtedness as it becomes due and, if refinanced, whether such refinancing will be available on favorable terms.

Current wording

We have obtained financing through debt instruments having staggered maturities and intend to continue to do so in the future. Our debt includes, and may include in the future, debt secured by equity pledges, debt secured by first priority mortgage liens on certain lodging properties and unsecured debt. Our outstanding indebtedness requires us to comply with various financial and other covenants. We are in compliance with our various financial and other covenants and expect to continue to be in compliance over the next four quarters. We believe that we will have adequate liquidity to meet the requirements for scheduled maturities and principal repayments. However, we can provide no assurance that we will be able to refinance our indebtedness as it becomes due and, if refinanced, whether such refinancing will be available on favorable terms.

Previous wording

At September 30, 2024, we had no borrowings under our $400 Million Revolver, $200.0 million outstanding on our $200 Million Term Loan, and $200.0 million outstanding on our 2024 Term Loan (each of such credit facilities are defined in "Note 5 - Debt" to the accompanying Condensed Consolidated Financial Statements). Each of the credit facilities was supported by the 53 lodging properties included in the credit facility borrowing base. We also had $287.5 million of Convertible Notes (as defined in "Note 5 - Debt" to the accompanying Condensed Consolidated Financial Statements) outstanding.

Current wording

At March 31, 2025, we had $30.0 million in borrowings under our $400 Million Revolver, $200.0 million outstanding on our $200 Million Term Loan, and $200.0 million outstanding on our Regions Bank 2024 Term Loan Facility (each of such credit facilities are defined in “Note 5 - Debt” to the accompanying Condensed Consolidated Financial Statements). Each of the credit facilities was supported by the 53 lodging properties included in the credit facility borrowing base. We also had $287.5 million of Convertible Notes (as defined in “Note 5 - Debt” to the accompanying Condensed Consolidated Financial Statements) outstanding.

Previous wording

At September 30, 2024, the GIC Joint Venture had $200.0 million outstanding under the GIC Joint Venture Credit Facility (as defined in "Note 5 - Debt" to the accompanying Condensed Consolidated Financial Statements), which included borrowings of $75.0 million on its $75 Million Term Loan and $125.0 million on its $125 Million Revolver. The GIC Joint Venture Credit Facility is secured primarily by a first priority pledge of the equity interests in the subsidiaries that own the 13 lodging property borrowing base assets, and the related TRS entities, which wholly own the TRS Lessees. See "Note 5 - Debt" to the accompanying Condensed Consolidated Financial Statements for additional information.

Current wording

At March 31, 2025, the GIC Joint Venture had $250.0 million outstanding under the GIC Joint Venture Credit Facility (as defined in “Note 5 - Debt” to the accompanying Condensed Consolidated Financial Statements), which included borrowings of $125.0 million on its $125 Million Term Loan and $125.0 million on its $125 Million Revolver. The GIC Joint Venture Credit Facility is secured primarily by a first priority pledge of the equity interests in the subsidiaries that own the 15 lodging property borrowing base assets, and the related TRS entities, which wholly own the TRS Lessees. See “Note 5 - Debt” to the accompanying Condensed Consolidated Financial Statements for additional information.

Previous wording

To complete the NCI Transaction during the first quarter of 2022, the GIC Joint Venture entered into the $410.0 million GIC Joint Venture Term Loan (as defined in "Note 5 - Debt" to the accompanying Condensed Consolidated Financial Statements) that was originally secured by the 27 lodging properties and two parking garages acquired in the transaction, and assumed a Property Assessed Clean Energy ("PACE") loan totaling $6.5 million. The outstanding balance of the PACE loan is $5.9 million at September 30, 2024.

Current wording

To complete the NCI Transaction during the first quarter of 2022, the GIC Joint Venture entered into the $410.0 million GIC Joint Venture Term Loan (as defined in “Note 5 - Debt” to the accompanying Condensed Consolidated Financial Statements) that was originally secured by the 27 lodging properties and two parking garages acquired in the transaction, and assumed a Property Assessed Clean Energy (“PACE”) loan totaling $6.5 million. The outstanding balances of the GIC Venture Term Loan and the PACE loan at March 31, 2025 are $396.0 million and $5.8 million, respectively.

Previous wording

Additionally, the GIC Joint Venture has a mortgage loan outstanding totaling $12.6 million at September 30, 2024 related to the acquisition of the Embassy Suites in Tucson, AZ in December 2021.

Current wording

At March 31, 2025, the Brickell Joint Venture has a mortgage loan outstanding totaling $45.6 million related to the acquisition of the dual-branded 264-guestroom AC Hotel by Marriott and Element Hotel in Miami, FL, and the GIC Joint Venture has a mortgage loan outstanding totaling $12.5 million related to the acquisition of the Embassy Suites in Tucson, AZ in December 2021.

Previous wording

(2) The $125 Million Revolver and the $75 Million Term Loan are secured by pledges of the equity in the entities and affiliated entities that own 13 lodging properties.

Current wording

(2) The $125 Million Revolver and the $125 Million Term Loan are secured by pledges of the equity in the entities that own 15 lodging properties and affiliated entities.