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Summit Hotel Properties Reports Third Quarter 2013 Results

Stocks in this article: INN

Estimated Sources and Uses of Cash

On page 17 of this release, the Company provides a schedule of estimated sources and uses of cash. The schedule reflects components of the Company’s balance sheet as of September 30, 2013, as well as subsequently completed or announced hotel acquisitions and dispositions and completed or anticipated financing transactions. The schedule assumes dividends will be paid out of operating cash flow. No assurance can be given that anticipated transactions will be completed within the expected time frame, or at all. The timing of these transactions may change. In addition, the Company may choose not to complete anticipated transactions for various reasons, including reasons beyond the control of the Company.

Fourth Quarter 2013 Outlook

The Company provides guidance for the fourth quarter based on 87 current hotels. 1 This outlook includes activity subsequent to quarter end. Except as described in footnote 1 below, it assumes no additional hotels are acquired or sold in the fourth quarter and no additional issuances of equity securities.

“We expect to see an effect of 45 to 50 basis points of RevPAR disruption due to the government shutdown and the on-going sequestration in the fourth quarter,” Hansen said. “The fourth quarter historically is the slowest for both Summit and the hotel industry, with November and December being the most difficult to predict due to the holiday season. As a result, we have less opportunity to recover the revenue lost in October. This is expected to affect RevPAR and margins. We view this largely as a unique event, assuming the government can get its debt-limit issues under control without further disruptions.”

       
Low-end High-end

Pro forma RevPAR (87) 1, 4

$ 75.00 $ 76.50
Pro forma RevPAR Growth (87) 1, 4 2.5 % 4.5 %
RevPAR (same-store 47) $ 64.50 $ 66.00
RevPAR Growth (same-store 47) 1.5 % 3.5 %

Adjusted FFO 2

$ 10,300 $ 12,100

Adjusted FFO per diluted unit 3

$ 0.12 $ 0.14
Renovation capital deployed $ 15,000 $ 19,000
Income tax expense $ 300 $ 500
 

1 In addition to the Company’s portfolio of 92 hotels (10,913 guestrooms) at September 30, 2013, includes the following five properties purchased subsequent to September 30, 2013 or currently under contract: the 115-guestroom Hampton Inn & Suites, Ventura (Camarillo), Calif.; the 108-guestroom Hampton Inn & Suites, San Diego (Poway), Calif.; the 98-guestroom Hampton Inn, Santa Barbara (Goleta), Calif.; the 178-guestroom Hilton Garden Inn, Houston, Texas; and the 213-guestroom Hyatt Place, Minneapolis, Minn. Also excludes the following ten properties sold subsequent to September 30, 2013 or held for sale at September 30, 2013: the 63-guestroom Fairfield Inn, Boise, Id.; the 63-guestroom Hampton Inn, Boise, Id.; the 60-guestroom AmericInn Hotel & Suites, Salina, Kan.; the 63-guestroom Fairfield Inn, Salina, Kan.; the 89-guestroom AmericInn Hotel & Suites, Fort Smith, Ark.; the 57-guestroom Aspen Hotel & Suites, Fort Smith, Ark; the 178-guestroom Hampton Inn, Fort Smith, Ark; the 57-guestroom Fairfield Inn, Emporia, Kan.; the 58-guestroom Holiday Inn Express, Emporia, Kan.; and the 78-guestroom SpringHill Suites, Little Rock, Ark.

2 Adjusted FFO guidance on 95 hotels assumes additional charges in the range of $0.1 million to $0.3 million that are associated with the consolidation of the Company’s corporate office from Sioux Falls, S.D. to Austin, Texas during fourth quarter 2013.

3 Assumed weighted average diluted common units of 86,210,000 for fourth quarter 2013.

4 Fourth quarter RevPAR guidance anticipates 110 to 160 basis points of RevPAR disruption and $0.6 million to $1.0 million of EBITDA disruption in the fourth quarter due to renovation work at eleven hotels.

Full Year 2013 Outlook

The Company provides guidance for full year 2013 based on 87 current hotels. 1 Except as described in footnote 1 below, it assumes no additional hotels will be acquired or sold in 2013 and no additional issuances of equity securities.

       
Low-end High-end

Pro forma RevPAR (87) 1

$ 82.00 $ 84.00

Pro Forma RevPAR Growth (87) 1

4.0 % 6.0 %
RevPAR (same-store 47) $ 72.50 $ 74.00
RevPAR Growth (same-store 47) 5.5 % 7.5 %

Adjusted FFO 2

$ 57,900 $ 59,300

Adjusted FFO per diluted unit 3

$ 0.79 $ 0.81
Renovation capital deployed $ 44,000 $ 48,000
Income tax benefit $ 100 $ 300
 

1 In addition to the Company’s portfolio of 92 hotels (10,913 guestrooms) at September 30, 2013, includes the following five properties purchased subsequent to September 30, 2013 or currently under contract: the 115-guestroom Hampton Inn & Suites, Ventura (Camarillo), Calif.; the 108-guestroom Hampton Inn & Suites, San Diego (Poway), Calif.; the 98-guestroom Hampton Inn, Santa Barbara (Goleta), Calif.; the 178-guestroom Hilton Garden Inn, Houston, Texas; and the 213-guestroom Hyatt Place, Minneapolis, Minn. Also excludes the following ten properties sold subsequent to September 30, 2013 or held for sale at September 30, 2013: the 63-guestroom Fairfield Inn, Boise, Id.; the 63-guestroom Hampton Inn, Boise, Id.; the 60-guestroom AmericInn Hotel & Suites, Salina, Kan.; the 63-guestroom Fairfield Inn, Salina, Kan.; the 89-guestroom AmericInn Hotel & Suites, Fort Smith, Ark.; the 57-guestroom Aspen Hotel & Suites, Fort Smith, Ark.; the 178-guestroom Hampton Inn, Fort Smith, Ark.; the 57-guestroom Fairfield Inn, Emporia, Kan.; the 58-guestroom Holiday Inn Express, Emporia, Kan.; and the 78-guestroom SpringHill Suites, Little Rock, Ark.

2 Adjusted FFO guidance on 95 hotels assumes additional charges in the range of $0.4 million to $0.6 million that are associated with the consolidation of the Company’s corporate office from Sioux Falls, S.D. to Austin, Texas prior to the end of 2013.

3 Assumed weighted average diluted common units of 73,241,000 for full year 2013.

Earnings Call

The Company will conduct its quarterly conference call on Wednesday, November 6, 2013 at 9:00am EST. To participate in the conference call please dial 877-474-9504. The participant passcode for the call is 65328081. Additionally, a live webcast of the call will be available through the Company’s website, www.shpreit.com. A replay of the conference call will be available until 11:59pm EST Wednesday, November 13, 2013 by dialing 888-286-8010; participant passcode 14235131. A replay of the conference call will also be available on the Company’s website until February 6, 2014.

About Summit Hotel Properties

Summit Hotel Properties, Inc. is a publicly traded real estate investment trust focused primarily on acquiring and owning premium-branded select-service hotels in the upscale and upper midscale segments of the lodging industry. As of November 5, 2013, the Company’s portfolio consisted of 92 hotels with a total of 11,002 guestrooms located in 24 states. Additional information about Summit may be found at the Company’s website, www.shpreit.com.

Forward-Looking Statements

This press release contains statements that are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, pursuant to the safe harbor provisions of the Private Securities Reform Act of 1995. Forward-looking statements are generally identifiable by use of forward-looking terminology such as “may,” “will,” “should,” “potential,” “intend,” “expect,” “seek,” “anticipate,” “estimate,” “approximately,” “believe,” “could,” “project,” “predict,” “forecast,” “continue,” “plan” or other similar words or expressions. Forward-looking statements are based on certain assumptions and can include future expectations, future plans and strategies, financial and operating projections or other forward-looking information. Examples of forward-looking statements include the following: projections of the Company’s revenues and expenses, capital expenditures or other financial items; descriptions of the Company’s plans or objectives for future operations, acquisitions, dispositions, financings or services; forecasts of the Company’s future financial performance and potential increases in average daily rate, occupancy, RevPAR, room supply and demand, funds from operations and adjusted funds from operations; US GDP growth; estimated sources and uses of available capital; and descriptions of assumptions underlying or relating to any of the foregoing expectations regarding the timing of their occurrence. These forward-looking statements are subject to various risks and uncertainties, not all of which are known to the Company and many of which are beyond the Company’s control, which could cause actual results to differ materially from such statements. These risks and uncertainties include, but are not limited to, the state of the U.S. economy, supply and demand in the hotel industry and other factors as are described in greater detail in the Company’s filings with the Securities and Exchange Commission (“SEC”), including, without limitation, the Company’s Annual Report on Form 10-K for the year ended December 31, 2012. Unless legally required, the Company disclaims any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.

For information about the Company’s business and financial results, please refer to the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors” sections of the Company’s Annual Report on Form 10-K for the year ended December 31, 2012 and its quarterly and other periodic filings with the SEC. The Company undertakes no duty to update the statements in this release to conform the statements to actual results or changes in the Company’s expectations.

The following condensed consolidated balance sheets and statements of operations are those of Summit Hotel OP, LP (the Operating Partnership) and Summit Hotel Properties, Inc.’s (the REIT) consolidated operating partnership. Such financial results for the periods presented are identical to those of the REIT; however, we believe the reconciliation of FFO, AFFO, EBITDA and Adjusted EBITDA to net income (loss) presented in the Operating Partnership’s statement of operations is more beneficial, as it eliminates the presentation of noncontrolling interests represented by the equity interests held by limited partners of the Operating Partnership, other than the REIT. In addition, FFO and AFFO results on a total per common unit basis provides for a more consistent period over period presentation now and in future periods.

   
SUMMIT HOTEL PROPERTIES
Condensed Consolidated Balance Sheets
September 30, 2013 and December 31, 2012

Amounts in thousands

 
September 30, December 31,
2013 2012
ASSETS
 
Investment in hotel properties, net $ 1,082,395 $ 734,362
Investment in hotel properties under development 20,549 10,303
Land held for development 13,748 15,802
Assets held for sale 33,463 4,836
Cash and cash equivalents 45,474 13,980
Restricted cash 35,437 3,624
Trade receivables 9,685 5,478
Prepaid expenses and other 21,006 5,311
Derivative financial instruments 98 -
Deferred charges, net 9,543 8,895
Deferred tax asset 4,962 3,997
Other assets   3,442     4,201  
TOTAL ASSETS $ 1,279,802   $ 810,789  
 
LIABILITIES AND EQUITY
 
LIABILITIES
Debt $ 400,255 $ 312,613
Accounts payable 9,276 5,013
Accrued expenses 30,767 18,985
Derivative financial instruments   2,047     641  
TOTAL LIABILITIES 442,345 337,252
 
COMMITMENTS AND CONTINGENCIES
 
EQUITY   837,457     473,537  
 
TOTAL LIABILITIES AND EQUITY $ 1,279,802   $ 810,789  
 

   
SUMMIT HOTEL PROPERTIES
Condensed Consolidated Statements of Operations

Amounts in thousands

 
Three months ended September 30, Nine months ended September 30,
2013   2012 2013   2012
REVENUE
Room revenue $ 78,010 $ 41,312 $ 209,774 $ 111,677
Other hotel operations revenue   4,164     1,758     11,228     4,914  
Total Revenues   82,174     43,070     221,002     116,591  
 
EXPENSES
Hotel operating expenses
Rooms 21,927 11,388 59,182 31,490
Other direct 11,072 5,603 28,336 15,047
Other indirect 20,601 11,292 56,171 30,905
Other   183     155     543     473  
Total hotel operating expenses 53,783 28,438 144,232 77,915
Depreciation and amortization 14,029 7,647 37,623 22,094
Corporate general and administrative
Salaries and other compensation 1,874 1,645 6,589 3,563
Other 1,072 824 3,456 2,758
Hotel property acquisition costs 114 245 1,553 1,573
Loss on impairment of assets   1,369     -     1,369     -  
Total Expenses   72,241     38,799     194,822     107,903  
Income (loss) from operations   9,933     4,271     26,180     8,688  
 
OTHER INCOME (EXPENSE)
Interest income 16 18 52 20
Other income (103 ) 22 120 497
Interest expense (5,948 ) (3,938 ) (14,877 ) (11,150 )
Debt transaction costs (103 ) (228 ) (112 ) (651 )
Gain (loss) on disposal of assets 5 (12 ) 11 (199 )
Gain (loss) on derivative financial instruments   -     -     2     (2 )
Total Other Income (Expense)   (6,133 )   (4,138 )   (14,804 )   (11,485 )
Income (loss) from continuing operations before income taxes 3,800 133 11,376 (2,797 )
 
Income tax (expense) benefit   (2,684 )   (21 )   894     195  
 
Income (loss) from continuing operations 1,116 112 12,270 (2,602 )
Income (loss) from discontinued operations   (1,697 )   1,529     (4,297 )   1,081  
Net income (loss) (581 ) 1,641 7,973 (1,521 )
 
Net income (loss) attributable to noncontrolling interests in joint venture   272     -     324     -  
 
Net income (loss) attributable to Summit Hotel OP, LP (853 ) 1,641 7,649 (1,521 )
 
Preferred dividends   (4,147 )   (1,156 )   (10,443 )   (3,469 )
Net income (loss) attributable to common unit holders $ (5,000 ) $ 485   $ (2,794 ) $ (4,990 )
 
Weighted average common units outstanding
Basic   70,917     37,393     68,476     37,385  
Diluted   71,374     37,586     68,870     37,492  
 

   
SUMMIT HOTEL PROPERTIES
Discontinued Operations Summary

Amounts in thousands

 
Three months ended September 30, Nine months ended September 30,
2013   2012 2013   2012
 
REVENUE $ 4,874 $ 9,107 $ 17,129 $ 26,199
 
Hotel operating expenses 3,653 6,315 12,913 19,143
Depreciation and amortization 406 857 1,617 3,067
Loss on impairment of assets   5,785     -     7,285     2,098  
 
Income (loss) from hotel operations (4,970 ) 1,935 (4,686 ) 1,891
Interest expense 24 111 175 729
(Gain) loss on disposal of assets   783     -     (877 )   -  
 
Income (loss) before taxes (5,777 ) 1,824 (3,984 ) 1,162
 
Income tax (expense) benefit   4,080     (295 )   (313 )   (81 )
 
Income (loss) from discontinued operations $ (1,697 ) $ 1,529   $ (4,297 ) $ 1,081  
 

   
SUMMIT HOTEL PROPERTIES
FFO

Amounts in thousands, except per common unit

(Unaudited)

 
Three months ended September 30, Nine months ended September 30,
2013   2012 2013   2012
NET INCOME (LOSS) (581 ) 1,641 7,973 (1,521 )
Preferred dividends (4,147 ) (1,156 ) (10,443 ) (3,469 )
Depreciation and amortization 14,435 8,504 39,240 25,161
Loss on impairment of assets 7,154 - 8,654 2,098
(Gain) loss on disposal of assets 778 12 (888 ) 199
Noncontrolling interest in joint venture (272 ) - (324 ) -
Adjustments related to joint venture   (83 )   -     (222 )   -  
Funds From Operations $ 17,284 $ 9,001 $ 43,990 $ 22,468
Per common unit $ 0.24 $ 0.24 $ 0.64 $ 0.60
 
Equity based compensation 346 268 1,616 783
Hotel property acquisition costs 114 245 1,553 1,573
Debt transaction costs 103 228 112 651
(Gain) loss on derivative   -     -     (2 )   2  
Adjusted Funds From Operations $ 17,847 $ 9,742 $ 47,269 $ 25,477
Per common share/unit $ 0.25 $ 0.26 $ 0.69 $ 0.68
 
Weighted average diluted common units 71,374 37,586 68,870 37,492
 
   
SUMMIT HOTEL PROPERTIES
EBITDA

Amounts in thousands

(Unaudited)

 
Three months ended September 30, Nine months ended September 30,
2013   2012 2013   2012
NET INCOME (LOSS) $ (581 ) $ 1,641 $ 7,973 $ (1,521 )
Depreciation and amortization 14,435 8,504 39,240 25,161
Interest income (16 ) (18 ) (52 ) (20 )
Interest expense 5,972 4,049 15,052 11,879
Income tax expense (benefit) (1,396 ) 316 (581 ) (114 )
Noncontrolling interest in joint venture (272 ) - (324 ) -
Adjustments related to joint venture   (152 )   -     (397 )   -  
EBITDA $ 17,990 $ 14,492 $ 60,911 $ 35,385
 
 
Equity based compensation 346 268 1,616 783
Hotel property acquisition costs 114 245 1,553 1,573
Loss on impairment of assets 7,154 - 8,654 2,098
Debt transaction costs 103 228 112 651
(Gain) loss on disposal of assets 778 12 (888 ) 199
(Gain) loss on derivatives   -     -     (2 )   2  
ADJUSTED EBITDA $ 26,485 $ 15,245 $ 71,956 $ 40,691
 

   
SUMMIT HOTEL PROPERTIES

Pro Forma Hotel Operational Data 1

Schedule of Property Level Results

Amounts in thousands

(Unaudited)

 
Three months ended September 30, Nine months ended September 30,
2013   2012 2013   2012
REVENUE
Room Revenue $ 78,010 $ 75,528 $ 232,257 $

221,429

Other hotel operations revenue   4,164     3,856     12,685    

11,506

 
Total Revenue   82,173     79,384     244,943    

232,935

 
 
EXPENSES
Hotel operating expenses
Rooms 21,843 21,295 64,733 61,265
Other direct 11,030 10,753 30,994 29,275
Other indirect 20,522 20,007 61,439 60,127
Other   182     178     594     920  
Total Operating expenses   53,577     52,233     157,760     151,587  
 
Hotel EBITDA $ 28,596   $ 27,151   $ 87,183   $ 81,348  
 

1 For purposes of this press release, pro forma information includes operating results for 82 hotels owned as of September 30, 2013 as if each hotel had been owned by the Company since January 1, 2012, which excludes the following ten hotels that were held for sale at September 30, 2013: the 63-guestroom Fairfield Inn, Boise, Id.; the 63-guestroom Hampton Inn, Boise, Id.; the 60-guestroom AmericInn Hotel & Suites, Salina, Kan.; the 63-guestroom Fairfield Inn, Salina, Kan.; the 89-guestroom AmericInn Hotel & Suites, Fort Smith, Ark.; the 57-guestroom Aspen Hotel & Suites, Fort Smith, Ark.; the 178-guestroom Hampton Inn, Fort Smith, Ark.; the 57-guestroom Fairfield Inn, Emporia, Kan.; the 58-guestroom Holiday Inn Express, Emporia, Kan.; and the 78-guestroom SpringHill Suites, Little Rock, Ark. As a result, these pro forma operating measures include operating results for certain hotels prior to the Company’s ownership.

   
SUMMIT HOTEL PROPERTIES

Pro Forma 1 and Same-Store 2 Statistical Data for the Hotels

(Unaudited)

 
Pro forma three months ended September 30, Pro forma nine months ended September 30,
2013   2012 2013   2012
Total Portfolio (82 hotels)
Rooms Occupied 697,150 709,654 2,064,458 2,054,632
Rooms Available 933,555 933,800 2,772,993 2,781,221
Occupancy 74.7 % 76.0 % 74.4 % 73.9 %
ADR $ 111.90 $ 106.43 $ 112.50 $ 107.77
RevPAR $ 83.56 $ 80.88 $ 83.76 $ 79.62
 
Occupancy Growth -132 bps 57 bps
ADR Growth 5.1 % 4.4 %
RevPAR Growth 3.3 % 5.2 %
 
 
Three months ended September 30, Nine months ended September 30,
2013 2012 2013 2012
Same-Store (47 hotels)
Rooms Occupied 363,307 361,124 1,048,190 1,033,061
Rooms Available 478,768 478,860 1,420,692 1,426,291
Occupancy 75.9 % 75.4 % 73.8 % 72.4 %
ADR $ 104.61 $ 99.14 $ 102.74 $ 97.59
RevPAR $ 79.38 $ 74.76 $ 75.80 $ 70.68
 
Occupancy Growth 47 bps 135 bps
ADR Growth 5.5 % 5.3 %
RevPAR Growth 6.2 % 7.2 %
 

1 For purposes of this press release, pro forma information includes operating results for 82 hotels owned as of September 30, 2013 as if each hotel had been owned by the Company since January 1, 2012, which excludes the following ten hotels that were held for sale at September 30, 2013: the 63-guestroom Fairfield Inn, Boise, Id.; the 63-guestroom Hampton Inn, Boise, Id.; the 60-guestroom AmericInn Hotel & Suites, Salina, Kan.; the 63-guestroom Fairfield Inn, Salina, Kan.; the 89-guestroom AmericInn Hotel & Suites, Fort Smith, Ark.; the 57-guestroom Aspen Hotel & Suites, Fort Smith, Ark.; the 178-guestroom Hampton Inn, Fort Smith, Ark.; the 57-guestroom Fairfield Inn, Emporia, Kan.; the 58-guestroom Holiday Inn Express, Emporia, Kan.; and the 78-guestroom SpringHill Suites, Little Rock, Ark. As a result, these pro forma operating measures include operating results for certain hotels prior to the Company’s ownership.

2 For purposes of this press release, same-store information includes operating results for hotel properties owned at all times by the Company during the three-month and nine-month periods ended September 30, 2013 and 2012 and excludes ten hotels that were held for sale at September 30, 2013.

     
SUMMIT HOTEL PROPERTIES

Pro Forma Statistical Data for the Hotels 1

Amounts in thousands, except ADR and RevPAR

(Unaudited)

 
2012 2013 LTM ended
Q4 Q1   Q2   Q3 09/30/13
 
Room Revenue $ 67,279 $ 73,283 $ 80,964 $ 78,010 $ 299,536
Other Revenue   3,862     4,231     4,291     4,164     16,547  
Total Revenue $ 71,141   $ 77,514   $ 85,255   $ 82,174   $ 316,083  
         
Hotel EBITDA $ 20,882   $ 27,054   $ 31,532   $ 28,597   $ 108,065  
 
Rooms occupied 637,667 648,113 719,195 697,150 2,702,125
Rooms available 933,319 915,879 923,559 933,555 3,706,312
 
Occupancy 68.3 % 70.8 % 77.9 % 74.7 % 72.9 %
ADR $ 105.51 $ 113.07 $ 112.58 $ 111.90 $ 110.85
RevPAR $ 72.09 $ 80.01 $ 87.67 $ 83.56 $ 80.82
 

1 For purposes of this press release, pro forma information includes operating results for 82 hotels owned as of September 30, 2013 as if each hotel had been owned by the Company since January 1, 2012, which excludes the following ten hotels that were held for sale at September 30, 2013: the 63-guestroom Fairfield Inn, Boise, Id.; the 63-guestroom Hampton Inn, Boise, Id.; the 60-guestroom AmericInn Hotel & Suites, Salina, Kan.; the 63-guestroom Fairfield Inn, Salina, Kan.; the 89-guestroom AmericInn Hotel & Suites, Fort Smith, Ark.; the 57-guestroom Aspen Hotel & Suites, Fort Smith, Ark.; the 178-guestroom Hampton Inn, Fort Smith, Ark.; the 57-guestroom Fairfield Inn, Emporia, Kan.; the 58-guestroom Holiday Inn Express, Emporia, Kan.; and the 78-guestroom SpringHill Suites, Little Rock, Ark. As a result, these pro forma operating measures include operating results for certain hotels prior to the Company’s ownership.

       
SUMMIT HOTEL PROPERTIES
Estimated Sources and Uses of Cash
September 30, 2013 and Subsequent Events

Amounts in thousands

 
      Sources     Uses
Net Cash Available at September 30, 2013
Cash and Cash Equivalents $ 45,470 $ -
 
Completed Transactions (Subsequent to September 30, 2013)
Unsecured Revolving Credit Facility Borrowing Capacity (1) 225,000 -
Outstanding Borrowings on Revolving Credit Facility (2, 3) (700 ) -
 
Hotel Acquisitions
Ventura (Camarillo), Calif. Hampton Inn & Suites (4) - 15,750
San Diego (Poway), Calif. Hampton Inn & Suites (5) - 15,150
 
Hotel Dispositions
Various Hotels (6, 7) 6,200 -
 
Land Parcel Dispositions
El Paso, Texas (8) 2,400 -
 
Anticipated Transactions
Hotel Acquisitions
Santa Barbara (Goleta), Calif. Hampton Inn (10) - 27,900
Houston, Texas Hilton Garden Inn (11) - 37,500
Minneapolis, Minn. Hyatt Place (12) - 10,700
 
Hotel Dispositions
Various Hotels (13, 14, 15, 16, 17, 18, 19, 20) 24,100 -
 
Land Parcel Dispositions
Houston, Texas (9) 2,500 -
Boise, Id. (21) 750 -
 
Debt Financings
Unsecured Term Debt Facility (1) 75,000 -
Santa Barbara (Goleta), Calif. Hampton Inn loan assumption (10) 12,100 -
Houston, Texas Hilton Garden Inn loan assumption (11) 17,900 -
 
Anticipated Capital Expenditures
Scheduled Q4 2013 Cap Ex (22) - 17,000
 
Estimated Net Cash Available After Completed and Anticipated Transactions Described Above
Cash and Cash Equivalents - 62,420
Unsecured Credit Facility Borrowing Capacity (1) - 225,000
Outstanding Borrowings on Revolving Credit Facility (2, 3)       -         (700 )
Total     $ 410,720       $ 410,720  
 

Note: The Company ’s announced or anticipated acquisitions, dispositions, and financing activities outlined above are subject to satisfactory completion of the Company’s and lender’s due diligence and satisfaction of customary closing conditions, and the Company can give no assurance that the anticipated activities will be consummated.

SUMMIT HOTEL PROPERTIES Estimated Sources and Uses of Cash

  1. On October 10, 2013, the Company refinanced its previously secured credit facility into an unsecured credit facility. In addition to a $225.0 million revolving credit facility, the facility includes a $75.0 million term loan component. The Company anticipates fully funding the term loan prior to year-end 2013.
  2. Unsecured credit facility was entered into on October 10, 2013.
  3. Includes $0.7 million standby letters of credit.
  4. On October 1, 2013, the Company acquired the 115-guestroom Hampton Inn and Suites in Ventura (Camarillo), Calif. for $15.7 million.
  5. On October 8, 2013, the Company acquired the 108-guestroom Hampton Inn and Suites in San Diego (Poway), Calif. for $15.2 million.
  6. On October 30, 2013, the Company sold the 57-guestroom Fairfield Inn located in Emporia, Kan. for $1.7 million. The amount shown in the table reflects the contractual sales price (prior to adjustments and expenses).
  7. On November 1, 2013, the Company sold the 78-guestroom SpringHill Suites in Little Rock, Ark. for $4.5 million. The amount shown in the table reflects the contractual sales price (prior to adjustments and expenses).
  8. On November 5, 2013, the Company sold a 5.0 acre parcel of land in El Paso, Texas for $2.4 million. The amount shown in the table reflects the contractual sales price (prior to adjustments and expenses).
  9. The Company anticipates selling a 2.8 acre parcel of land in Houston, Texas, which is currently under contract, in the fourth quarter of 2013 for $2.5 million. The amount shown in the table reflects the contractual sales price (prior to adjustments and expenses).
  10. The Company anticipates acquiring the 98-guestroom Hampton Inn in Santa Barbara (Goleta), Calif., which currently is under contract, in the fourth quarter of 2013 for $27.9 million. The Company anticipates assuming mortgage debt of $12.1 million in connection with the acquisition of the hotel.
  11. The Company anticipates acquiring the 178-guestroom Hilton Garden Inn in Houston, Texas, which currently is under contract, in the fourth quarter of 2013 for $37.5 million. The Company anticipates assuming mortgage debt of $17.9 million in connection with the acquisition of the hotel.
  12. The Company anticipates acquiring the 213-guestroom Hyatt Place in Minneapolis, Minn. in the fourth quarter of 2013. Subject to certain conditions, including the successful conversion of the property that is estimated to be completed in the fourth quarter of 2013, the Company plans to purchase the property by funding an additional $10.7 million and entering into a management agreement with a Hyatt affiliate.
  13. The Company anticipates selling the 63-guestroom Fairfield Inn in Salina, Kan., which currently is under contract, during the fourth quarter of 2013 for $1.9 million. The amount shown in the table reflects the contractual sales price (prior to adjustments and expenses).
  14. The Company anticipates selling the 60-guestroom AmericInn Hotel & Suites in Salina, Kan., which currently is under contract, during the fourth quarter of 2013 for $1.0 million. The amount shown in the table reflects the contractual sales price (prior to adjustments and expenses).
  15. The Company anticipates selling the 57-guestroom Holiday Inn Express in Emporia, Kan., which currently is under contract, during the fourth quarter of 2013 for $1.7 million. The amount shown in the table reflects the contractual sales price (prior to adjustments and expenses).
  16. The Company anticipates selling the 63-guestroom Hampton Inn in Boise, Id., which currently is under contract, during the fourth quarter of 2013 for $4.3 million. The amount shown in the table reflects the contractual sales price (prior to adjustments and expenses).
  17. The Company anticipates selling the 63-guestroom Fairfield Inn in Boise, Id., which currently is under contract, during the fourth quarter of 2013 for $3.0 million. The amount shown in the table reflects the contractual sales price (prior to adjustments and expenses).
  18. The Company anticipates selling the 57-guestroom Aspen Hotel & Suites in Fort Smith, Ark., which currently is under contract, during the fourth quarter of 2013 for $1.3 million. The amount shown in the table reflects the contractual sales price (prior to adjustments and expenses).
  19. The Company anticipates selling the 178-guestroom Hampton Inn in Fort Smith, Ark., which currently is under contract, during the fourth quarter of 2013 for $9.6 million. The amount shown in the table reflects the contractual sales price (prior to adjustments and expenses).
  20. The Company anticipates selling the 89-guestroom AmericInn Hotel & Suites in Fort Smith, Ark., which currently is under contract, during the fourth quarter of 2013 for $1.3 million. The amount shown in the table reflects the contractual sales price (prior to adjustments and expenses).
  21. The Company anticipates selling a 4.1 acre parcel of land in Boise, Id., which currently is under contract, in the fourth quarter 2013 for $0.8 million. The amount shown in the table reflects the contractual sales price (prior to adjustments and expenses).
  22. Capital expenditures are provided at the mid-point of the Company’s fourth quarter guidance.

Non-GAAP Financial Measures

FFO and Adjusted FFO (“AFFO”)

As defined by the National Association of Real Estate Investment Trusts, or NAREIT, funds from operations, or FFO, represents net income or loss (computed in accordance with GAAP), excluding gains (or losses) from sales of property, plus depreciation and amortization. We present FFO because we consider it an important supplemental measure of our operational performance and believe it is frequently used by securities analysts, investors and other interested parties in the evaluation of REITs, many of which present FFO when reporting their results. FFO is 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 excludes depreciation and amortization unique to real estate, gains and losses from property dispositions and impairment losses, it provides a performance measure that, when compared year over year, reflects the effect to operations from trends in occupancy, room rates, operating costs, development activities and interest costs, providing perspective not immediately apparent from net income. Our computation of FFO may differ from the methodology for calculating FFO utilized by other equity REITs and, accordingly, may not be comparable to such other REITs because the amount of depreciation and amortization we add back to net income or loss includes amortization of deferred financing costs and amortization of franchise royalty fees. FFO should not be considered as an alternative to net income (loss) (computed in accordance with GAAP) as an indicator of our liquidity, nor is it indicative of funds available to fund our cash needs, including our ability to pay dividends or make distributions.

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