Operating Income of $23.5 million for First Quarter 2024 Adjusted EBITDAre Grows 10% to $48.8 million; Adjusted FFO Increases 14% to $0.24 per Share Sale of Three Hotels for $84.0 Million Further Deleverages Balance Sheet Subsequent to Quarter End Common Dividend Increased 33% to Annualized $0.32 per Share AUSTIN, Texas, May 1, 2024 /PRNewswire/ -- Summit Hotel Properties, Inc. (NYSE:INN) (the "Company"), today announced results for the three months ended March 31, 2024. "We are pleased with our strong first quarter financial results, highlighted by 10 percent Adjusted EBITDAre growth and 14 percent Adjusted FFO growth.  RevPAR increased 1.5 percent in our pro forma portfolio during the quarter which exceeded the total U.S. and upscale RevPAR growth rates by 130 basis points and 140 basis points, respectively. Hotel EBITDA margins expanded 80 basis points from the first quarter of last year driven by strong cost controls that led to a decrease in operating expenses on a per occupied room basis year-over-year," said Jonathan P. Stanner, the Company's President and Chief Executive Officer. "Subsequent to quarter end, we successfully completed the sale of three assets for $84.0 million at an attractive blended capitalization rate of 6.8 percent. The dispositions will further deleverage the balance sheet, enhance our liquidity position, and better position the Company for future growth.   We have updated our full year 2024 outlook to incorporate our strong first quarter results and a continued positive outlook for the remainder of 2024, which results in an increase in Adjusted EBITDAre and Adjusted FFO after consideration of adjustments related to recent asset sales.  Finally, our Board of Directors has authorized an increase of our common dividend to $0.32 per share on an annualized basis, an increase of 33 percent, which reflects the confidence we have in our operating results and the durability of our cash flows," continued Mr. Stanner. First Quarter 2024 Summary Net Loss: Net loss attributable to common stockholders was $2.1 million, or $0.02 per diluted share, compared to a net loss of $5.2 million, or $0.05 per diluted share, for the first quarter of 2023. Pro forma RevPAR: Pro forma RevPAR increased 1.5 percent to $124.18 compared to the first quarter of 2023. Pro forma ADR decreased 1.4 percent to $173.01 compared to the same period in 2023, and pro forma occupancy increased 3.0 percent to 71.8 percent. Same Store RevPAR: Same Store RevPAR increased 1.7 percent to $123.19 compared to the first quarter of 2023. Same store ADR decreased 1.3 percent to $171.91 and same store occupancy increased 3.1 percent to 71.7 percent. Pro Forma Hotel EBITDA(1): Pro forma hotel EBITDA increased 5.6 percent to $68.6 million from $65.0 million in the same period in 2023. Pro forma hotel EBITDA margin expanded approximately 80 basis points to 36.5 percent from 35.7 percent in the same period of 2023. Same Store Hotel EBITDA(1): Same store hotel EBITDA increased 5.9 percent to $66.7 million from $63.0 million in the same period in 2023. Same store hotel EBITDA margin expanded approximately 90 basis points to 36.2 percent from 35.3 percent in the same period of 2023. Adjusted EBITDAre(1): Adjusted EBITDAre increase 9.8 percent to $48.8 million from $44.4 million in the first quarter of 2023. Adjusted FFO(1): Adjusted FFO was $30.0 million, or $0.24 per diluted share, compared to $26.3 million, or $0.22 per diluted share, in the first quarter of 2023. The Company's results for the three months ended March 31, 2024 and 2023 are as follows (in thousands, except per share amounts and metrics): For the Three Months Ended March 31, 2024 2023 Net loss attributable to common stockholders $             (2,116) $             (5,228) Net loss per diluted share $               (0.02) $               (0.05) Total revenues $          188,142 $          182,383 EBITDAre (1) $            61,199 $            55,340 Adjusted EBITDAre (1) $            48,801 $            44,427 FFO (1) $            25,488 $            22,076 Adjusted FFO (1) $            29,996 $            26,260 FFO per diluted share and unit (1) (2) $                 0.21 $                 0.18 Adjusted FFO per diluted share and unit (1) (2) $                 0.24 $                 0.22 Pro Forma (2) RevPAR $            124.18 $            122.33 RevPAR Growth 1.5 % Hotel EBITDA $            68,562 $            64,956 Hotel EBITDA Margin 36.5 % 35.7 % Hotel EBITDA Margin Growth                81bps Same Store (3) RevPAR $            123.19 $            121.15 RevPAR Growth 1.7 % Hotel EBITDA $            66,724 $            63,007 Hotel EBITDA Margin 36.2 % 35.3 % Hotel EBITDA Margin Growth                87bps (1) See tables later in this press release for a discussion and reconciliation of net income (loss) to non-GAAP financial measures, including earnings before interest, taxes, depreciation, and amortization ("EBITDA"), EBITDAre, adjusted EBITDAre, funds from operations ("FFO"), FFO per diluted share and unit, adjusted FFO ("AFFO"), and AFFO per diluted share and unit, as well as a reconciliation of operating income (loss) to hotel EBITDA. See "Non-GAAP Financial Measures" at the end of this release. (2) Unless stated otherwise in this release, all pro forma information includes operating and financial results for 99 hotels owned as of March 31, 2024, as if each hotel had been owned by the Company since January 1, 2023 and remained open for the entirety of the measurement period. As a result, all pro forma information includes operating and financial results for hotels acquired since January 1, 2023, which may include periods prior to the Company's ownership. Pro forma and non-GAAP financial measures are unaudited. (3) All same store information includes operating and financial results for 97 hotels owned as of March 31, 2024, and at all times during the three months ended March 31, 2024, and 2023. Transaction Activity Subsequent to quarter-end, the Company completed the sale of three hotels containing 529 guestrooms for a gross sales price of $84 million. The aggregate sales price for the transactions represents a blended 6.8 percent capitalization rate based the estimated net operating income after a FF&E reserve for the full year 2024 and after consideration of approximately $13 million of foregone near-term required capital expenditures. Net proceeds from the transaction were used to repay debt and other general corporate purposes, which included reducing the Company's corporate revolving credit facility balance from $55 million to zero. Sales transactions details below: The Company sold the Courtyard and SpringHill Suites New Orleans Warehouse Arts District, containing 410 guestrooms, for a gross sales price of $73 million in April. The aggregate sales price for the transaction represents a 6.7 percent capitalization rate based on the estimated net operating income after a 5.0 percent FF&E reserve for the full year 2024 and after consideration of approximately $10 million of foregone near-term required capital expenditures. The transaction will result in an estimated net gain on sale of $28 million which will be recorded in the second quarter. Through its joint venture with GIC, the Company sold the 119-guestroom Hilton Garden Inn College Station for a gross sales price of $11 million in April. The sales price for the transaction represents a 7.9 percent capitalization rate based on the estimated net operating income after a 4.0 percent FF&E reserve for the full year 2024 and after consideration of approximately $3 million of foregone near-term required capital expenditures. Net proceeds from the transaction were used to repay debt and other general corporate purposes of the joint venture, including a partial repayment of the GIC joint venture term loan by $6 million. Sold Hotels Keys Date Price Capex (1) RevPAR Cap Rate (2) Courtyard & SpringHill Suites New Orleans Warehouse Arts District 410 April 2024 73,000 10,250 114 6.7 % Hilton Garden Inn College Station 119 April 2024 11,000 2,975 86 7.9 % Total 529 $ 84,000 $ 13,225 $          108 6.8 % (1) Reflects estimated near-term foregone capital expenditures for dispositions and near-term capital requirements for acquisitions. (2) Capitalization rate for the full year 2024 and after consideration of estimated near-term capital expenditure requirements. Capital Markets and Balance Sheet The Company continues to enhance its balance sheet including successfully closing the following previously announced transactions: In February 2024, the Company completed a new $200 million senior unsecured term loan financing (the "2024 Term Loan"). The 2024 Term Loan provides for a fully extended maturity date of February 2029 and interest rate pricing ranging from 135 basis points to 235 basis points over the applicable adjusted term SOFR. Proceeds from the 2024 Term Loan financing, along with asset sale proceeds, cash on hand, and revolver availability, were used to repay in full the Company's $225 million term loan that was scheduled to mature in February 2025. In January 2024, subsidiaries of the GIC joint venture entered into a $100 million interest rate swap to fix one-month term SOFR at 3.77 percent until January 2026, which compares to the current term SOFR rate of 5.32. The interest rate swap has an effective date of October 1, 2024. On a pro rata basis as of March 31, 2024, the Company had the following outstanding indebtedness and liquidity available: Outstanding debt of $1.2 billion with a weighted average interest rate of 4.84 percent. After giving effect to interest rate derivative agreements, $848.8 million, or 73 percent, of our outstanding debt had an average fixed interest rate, and $309.7 million, or 27 percent, had a variable interest rate. Unrestricted cash and cash equivalents of $49.6 million. On a pro rata basis as of April 30, 2024, the Company currently estimates it has the following outstanding indebtedness and liquidity available: As a result of the 2024 Term Loan financing, the Company has no significant debt maturities until 2026 and has an average length to maturity of approximately 3.3 years. Outstanding debt of $1.1 billion with a weighted average interest rate of 4.67 percent. After giving effect to interest rate derivative agreements, $848.8 million, or 77 percent, of our outstanding debt had an average fixed interest rate, and $251.6 million, or 23 percent, had a variable interest rate. Unrestricted cash and cash equivalents of $68.1 million. Total liquidity of $434.7 million, including unrestricted cash and cash equivalents and revolving credit facility availability. Common Dividend Increased 33% to Annualized $0.32 Per Share On May 1, 2024, the Company declared a 33 percent increase to its quarterly cash dividend rate to $0.08 per share on its common stock and per common unit of limited partnership interest in Summit Hotel OP, LP. The quarterly dividend of $0.08 per share represents an annualized dividend yield of 5.3 percent, based on the closing price of shares of the common stock on April 30, 2024. In addition, the Board of Directors declared a quarterly cash dividend of: $0.390625 per share on its 6.25% Series E Cumulative Redeemable Preferred Stock $0.3671875 per share on its 5.875% Series F Cumulative Redeemable Preferred Stock. $0.328125 per unit on its 5.25% Series Z Cumulative Perpetual Preferred Units The dividends are payable on May 31, 2024, to holders of record as of May 17, 2024. 2024 Outlook The Company's updated outlook for the full year 2024 based on 96 lodging assets, 54 of which were wholly owned as of May 1, 2024. The updated outlook incorporates all transaction activity closed to date, including the three hotels sold subsequent to quarter end, and there are no additional acquisitions, dispositions, or capital markets activities assumed in the Company's full year 2024 outlook beyond the transactions already completed.  The Company estimates that the sold hotels subsequent to quarter-end would have contributed approximately $4.0 million of Adjusted EBITDAre for the remainder of 2024. FYE 2024 Outlook Low High Variance to Prior Midpoint % Change to Prior Midpoint Pro Forma RevPAR Growth (1) 2.00 % 4.00 % — % — % Adjusted EBITDAre $        188,000 $        200,000 $                  — — % Adjusted FFO $        111,000 $        123,000 $                  — — % Adjusted FFO per Diluted Unit $              0.90 $              1.00 $                  — — % Capital Expenditures, Pro Rata $          65,000 $          85,000 $                  — — % (1) All pro forma information includes operating and financial results for 96 lodging assets owned as of May 1, 2024, as if each property had been owned by the Company since January 1, 2023 and will continue to be owned through the entire year ending December 31, 2024. As a result, the pro forma information includes operating and financial results for lodging assets acquired since January 1, 2023, which may include periods prior to the Company's ownership. Pro forma and non-GAAP financial measures are unaudited. First Quarter 2024 Earnings Conference Call The Company will conduct its quarterly conference call on Thursday, May 2, 2024, at 9:00 AM ET. To access the conference call, please pre-register using this link. Registrants will receive a confirmation with dial-in details. A live webcast of the conference call can be accessed using this link. A replay of the webcast will be available in the Investors section of the Company's website, www.shpreit.com, until July 31, 2024. Supplemental Disclosures In conjunction with this press release, the Company has furnished a financial supplement with additional disclosures on its website. Visit www.shpreit.com for more information. The Company has no obligation to update any of the information provided to conform to actual results or changes in portfolio, capital structure or future expectations. About Summit Hotel Properties Summit Hotel Properties, Inc. is a publicly traded real estate investment trust focused on owning premium-branded lodging facilities with efficient operating models primarily in the upscale segment of the lodging industry. As of May 1, 2024, the Company's portfolio consisted of 96 assets, 54 of which are wholly owned, with a total of 14,256 guestrooms located in 24 states. For additional information, please visit the Company's website, www.shpreit.com, and follow on Twitter at @SummitHotel_INN and on Facebook at facebook.com/SummitHotelProperties. Forward-Looking Statements This press release contains statements that are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are generally identifiable by use of forward-looking terminology such as "may," "will," "should," "potential," "intend," "expect," "seek," "anticipate," "estimate," "approximately," "believe," "could," "project," "predict," "forecast," "continue," "plan," "likely," "would" or other similar words or expressions. Forward-looking statements are based on certain assumptions and can include future expectations, future plans and strategies, financial and operating projections, or other forward-looking information. Examples of forward-looking statements include the following: the Company's ability to realize growth from the deployment of renovation capital; projections of the Company's revenues and expenses, capital expenditures or other financial items; descriptions of the Company's plans or objectives for future operations, acquisitions, dispositions, financings, redemptions or services; forecasts of the Company's future financial performance and potential increases in average daily rate, occupancy, RevPAR, room supply and demand, EBITDAre, Adjusted EBITDAre, FFO and AFFO; the Company's outlook with respect to pro forma RevPAR, pro forma RevPAR growth, RevPAR, RevPAR growth, AFFO, AFFO per diluted share and unit and renovation capital deployed; and descriptions of assumptions underlying or relating to any of the foregoing expectations regarding the timing of their occurrence. These forward-looking statements are subject to various risks and uncertainties, not all of which are known to the Company and many of which are beyond the Company's control, which could cause actual results to differ materially from such statements. These risks and uncertainties include, but are not limited to, the state of the U.S. economy, supply and demand in the hotel industry, and other factors as are described in greater detail in the Company's filings with the Securities and Exchange Commission ("SEC"). Unless legally required, the Company disclaims any obligation to update any forward-looking statements, whether as a result of new information, future events, or otherwise. For information about the Company's business and financial results, please refer to the "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Risk Factors" sections of the Company's Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC, and its quarterly and other periodic filings with the SEC. The Company undertakes no duty to update the statements in this release to conform the statements to actual results or changes in the Company's expectations.   Summit Hotel Properties, Inc. Condensed Consolidated Balance Sheets (In thousands) March 31, 2024 December 31, 2023 (Unaudited) ASSETS Investments in lodging property, net $        2,715,009 $        2,729,049 Investment in lodging property under development 2,364 1,451 Assets held for sale, net 64,019 73,740 Cash and cash equivalents 63,435 37,837 Restricted cash 8,916 9,931 Right-of-use assets, net 34,244 34,814 Trade receivables, net 27,985 21,348 Prepaid expenses and other 17,183 8,865 Deferred charges, net 6,495 6,659 Other assets 21,182 15,554 Total assets $        2,960,832 $        2,939,248 LIABILITIES, REDEEMABLE NON-CONTROLLING INTERESTS AND EQUITY Liabilities: Debt, net of debt issuance costs $        1,452,002 $        1,430,668 Lease liabilities, net 25,413 25,842 Accounts payable 7,303 4,827 Accrued expenses and other 81,719 81,215 Total liabilities 1,566,437 1,542,552 Redeemable non-controlling interests 50,219 50,219 Total stockholders' equity 907,758 911,195 Non-controlling interests 436,418 435,282 Total equity 1,344,176 1,346,477 Total liabilities, redeemable non-controlling interests and equity $        2,960,832 $        2,939,248   Summit Hotel Properties, Inc. Condensed Consolidated Statements of Operations (Unaudited) (In thousands, except per share amounts) For the Three Months Ended March 31, 2024 2023 Revenues: Room $           167,431 $           163,089 Food and beverage 10,833 10,630 Other 9,878 8,664 Total revenues 188,142 182,383 Expenses: Room 35,973 35,909 Food and beverage