Securities registered pursuant to Section 12(b) of the Act:

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ý☒ Yes o☐ No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405) of this chapter during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). ý☒ Yes o☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. ~~(Check one):~~

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). o☐ Yes ý☒ No

As of ~~October 20, 2017,~~April 21, 2023, the number of outstanding shares of common stock of Summit Hotel Properties, Inc. was ~~104,276,587.~~

107,469,294.

(inIn thousands, except share amounts)

(inIn thousands, except per share amounts)

(inIn thousands, except share amounts)

Shares
of Preferred
Stock

Preferred
Stock

Shares
of Common
Stock

Common
Stock

Additional
Paid-In Capital

Accumulated Other
Comprehensive
Loss

Retained Earnings
(Deficit) and
Distributions

Total
Stockholders’
Equity

Non-controlling Interests in Operating
Partnership

Total
Equity
Balance at December 31, 2016 9,400,000
$ 94
93,525,469
$ 935
$ 1,011,412
$ (977 ) $ (1,422 ) $ 1,010,042
$ 3,428
$ 1,013,470
Net proceeds from sale of common stock —
—
10,350,000
104
163,516
—
—
163,620
—
163,620
Common stock redemption of common units —
—
52,808
1
466
—
—
467
(467 ) —
Dividends —
—
—
—
—
—
(63,240 ) (63,240 ) (184 ) (63,424 )
Equity-based compensation —
—
397,421
4
4,462
—
—
4,466
17
4,483
Shares acquired to satisfy employee withholding requirements —
—
(59,111 ) (1 ) (960 ) —
—
(961 ) —
(961 )
Other comprehensive income —
—
—
—
—
677
—
677
3
680
Net income —
—
—
—
—
—
89,445
89,445
289
89,734
Balance at September 30, 2017 9,400,000
$ 94
104,266,587
$ 1,043
$ 1,178,896
$ (300 ) $ 24,783
$ 1,204,516
$ 3,086
$ 1,207,602

Balance at December 31, 2015 8,400,000
$ 84
86,793,521
$ 868
$ 894,060
$ (1,666 ) $ (40,635 ) $ 852,711
$ 4,215
$ 856,926
Net proceeds from sale of preferred stock 3,000,000
30
—
—
72,260
—
—
72,290
—
72,290
Common stock redemption of common units —
—
61,056
1
510
—
—
511
(511 ) —
Dividends —
—
—
—
—
—
(47,328 ) (47,328 ) (178 ) (47,506 )
Equity-based compensation —
—
521,995
5
3,180
—
—
3,185
17
3,202
Shares acquired to satisfy employee withholding requirements —
—
(61,622 ) (1 ) (1,264 ) —
—
(1,265 ) —
(1,265 )
Other comprehensive loss —
—
—
—
—
(101 ) —
(101 ) (1 ) (102 )
Net income —
—
—
—
—
—
97,433
97,433
454
97,887
Balance at September 30, 2016 11,400,000
$ 114
87,314,950
$ 873
$ 968,746
$ (1,767 ) $ 9,470
$ 977,436
$ 3,996
$ 981,432


Summit Hotel Properties, Inc. Condensed Consolidated Statements of Cash Flows
(Unaudited)
(In thousands)
	Three Months Ended March 31,
	2023		2022
OPERATING ACTIVITIES
Net loss	$	(1,970)	$	(8,973)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	36,908		36,274
Amortization of debt issuance costs	1,399		1,412

Recoveries of credit losses	(250)		—
Equity-based compensation	1,468		3,698



Non-cash interest income	(143)		(122)
Debt transaction costs	87		—
Other	285		69
Changes in operating assets and liabilities:

Trade receivables, net	(3,055)		(13,726)
Prepaid expenses and other	388		(9,054)
Accounts payable	(38)		900
Accrued expenses and other	(3,073)		15,027
NET CASH PROVIDED BY OPERATING ACTIVITIES	32,006		25,505
INVESTING ACTIVITIES
Acquisitions of lodging properties	—		(272,556)

Improvements to lodging properties	(24,088)		(10,347)




Funding of real estate loans	(1,320)		(1,915)


NET CASH USED IN INVESTING ACTIVITIES	(25,408)		(284,818)
FINANCING ACTIVITIES
Proceeds from borrowing on revolving line of credit	25,000		410,000
Repayments of line of credit borrowings	(10,000)		—
Principal payments on debt	(692)		(329,882)
Proceeds from the sale of non-controlling interests	1,353		674



Financing fees, debt transactions costs and other issuance costs	(634)		(2,588)
Common dividends paid	(4,904)		—
Preferred dividends and distributions paid	(4,625)		(4,305)
Proceeds from contributions by non-controlling interests in joint venture	—		203,703

Distributions to joint venture partners	(790)		—
Repurchase of shares of common stock for withholding requirements	(1,283)		—

NET CASH PROVIDED BY FINANCING ACTIVITIES	3,425		277,602
Net change in cash, cash equivalents and restricted cash	10,023		18,289
CASH, CASH EQUIVALENTS AND RESTRICTED CASH
Beginning of period	61,808		96,944
End of period	$	71,831	$	115,233

RECONCILIATION OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH WITHIN THE CONSOLIDATED BALANCE SHEET TO THE AMOUNTS SHOWN IN THE STATEMENT OF CASH FLOWS ABOVE:
Cash and cash equivalents	60,678		82,397
Restricted cash	11,153		32,836
TOTAL CASH, CASH EQUIVALENTS AND RESTRICTED CASH	$	71,831	$	115,233

See Notes to the Condensed Consolidated Financial Statements

~~Summit Hotel Properties, Inc.~~

~~Condensed Consolidated Statements of Cash Flows~~

For the Nine Months Ended
September 30,
2017 2016
OPERATING ACTIVITIES

Net income $ 89,734
$ 97,887
Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization 62,052
53,715
Amortization of deferred financing costs 1,553
1,625
Loss on impairment of assets —
577
Equity-based compensation 4,483
3,202
Realization of deferred gain (15,000 ) (5,000 )
Gain on disposal of assets, net (28,531 ) (44,997 )
Other 51
(573 )
Changes in operating assets and liabilities:

Restricted cash - operating (2,326 ) (881 )
Trade receivables, net (9,140 ) (5,848 )
Prepaid expenses and other 1,817
1,109
Accounts payable (233 ) 1,215
Accrued expenses and other 9,780
10,348
NET CASH PROVIDED BY OPERATING ACTIVITIES 114,240
112,379
INVESTING ACTIVITIES

Acquisitions of hotel properties (424,734 ) (169,654 )
Investment in hotel properties under development (15,954 ) —
Improvements to hotel properties (25,252 ) (31,098 )
Proceeds from asset dispositions, net of closing costs 120,901
145,366
Funding of real estate loans —
(27,500 )
Proceeds from collection of real estate loans 32,500
7,814
Increase in restricted cash - FF&E reserve (1,726 ) (1,613 )
Decrease in escrow deposits for acquisitions —
6,446
NET CASH USED IN INVESTING ACTIVITIES (314,265 ) (70,239 )
FINANCING ACTIVITIES

Proceeds from issuance of debt 485,000
250,000
Principal payments on debt (365,087 ) (302,546 )
Proceeds from equity offerings, net of issuance costs 163,620
72,290
Dividends paid (63,148 ) (47,506 )
Financing fees on debt (1,642 ) (1,948 )
Repurchase of common shares to satisfy employee withholding requirements (961 ) (1,265 )
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES 217,782
(30,975 )
Net change in cash and cash equivalents 17,757
11,165
CASH AND CASH EQUIVALENTS

Beginning of period 34,694
29,326
End of period $ 52,451
$ 40,491
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

Cash payments for interest $ 20,242
$ 19,425
Accrued acquisition costs and improvements to hotel properties $ 3,482
$ 1,590
Capitalized interest $ 172
$ —
Cash payments for income taxes, net of refunds $ 600
$ 1,135

~~See Notes to the Condensed Consolidated Financial Statements~~

SUMMIT HOTEL PROPERTIES, INC.

~~(UNAUDITED)~~(Unaudited)

Summit Hotel Properties, Inc. (the “Company”) is a self-managed ~~hotel~~lodging property investment company that was organized on June 30, 2010 as a Maryland corporation. The Company holds both general and limited partnership interests in Summit Hotel OP, LP (the “Operating Partnership”), a Delaware limited partnership also organized on June 30, 2010. On February 14, 2011, the Company closed on its initial public offering ("IPO") and completed certain formation transactions, including the merger of Summit Hotel Properties, LLC with and into the Operating Partnership. Unless the context otherwise requires, “we,” “us,” and “our” refer to the Company and its consolidated subsidiaries.

We primarily focus on owning ~~primarily premium-branded, select-service hotels.~~lodging properties with efficient operating models that generate strong margins and investment returns. At ~~September 30, 2017,~~March 31, 2023, our portfolio consisted of ~~79 hotels~~103 lodging properties with a ~~tota~~ltotal of ~~11,590 guestrooms~~15,334 guestrooms located in 24 states. As of March 31, 2023, we own 100% of the outstanding equity interests in 61 of our 103 lodging properties. We own a 51% controlling interest in 39 lodging properties through a joint venture that was formed in July 2019 with GIC (the “GIC Joint Venture”), Singapore’s sovereign wealth fund. 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.

As of March 31, 2023, 86% of our guestrooms were located in the top 50 metropolitan statistical areas (“MSAs”), 91% were located within the top 100 MSAs and over 99% of our guestrooms operated under premium franchise brands owned by Marriott® International, Inc. (“Marriott”), Hilton® Worldwide (“Hilton”), Hyatt® Hotels Corporation (“Hyatt”), and InterContinental® Hotels Group (“IHG”).

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, 2023, we owned, directly and indirectly, approximately 87.0% 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 Series E and Series F preferred units of limited partnership interest. NewcrestImage Holdings, LLC owns all of the issued and outstanding 5.25% Series Z Cumulative Perpetual Preferred Units (Liquidation preference $25 per unit) of the Operating Partnership ("Series Z Preferred Units"), which was issued as part of the NCI Transaction (described below in "Note 3 - Investments in Lodging Property, net"). We collectively refer to preferred units of limited partnership interests of our Operating Partnership as "Preferred Units."

Pursuant to the Operating Partnership’s partnership agreement, we have full, exclusive and complete responsibility and discretion in the management and control of the Operating Partnership, including the ability to cause the Operating Partnership to enter into certain major transactions including acquisitions, dispositions and refinancings, to make distributions to partners and to cause changes in the Operating Partnership’s business activities.

We have elected to be taxed as a real estate investment trust (“REIT”) for federal income tax ~~purposes commencing with our short taxable year ended December 31, 2011.~~purposes. To qualify as a REIT, we cannot operate or manage our ~~hotels.~~lodging properties. Accordingly, all of our ~~hotels~~lodging properties are leased to our taxable REIT subsidiaries (“TRS Lessees”) ~~of our taxable REIT subsidiary (“TRS”)~~. ~~We indirectly own 100% of the outstanding equity interests in all of our TRS Lessees.~~

Basis of Presentation

We prepare our Condensed Consolidated Financial Statements in conformity with U.S. Generally Accepted Accounting Principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X ofunder the Securities ~~and~~ Exchange Act of 1934, as amended (the “Exchange Act”)~~. Accordingly,~~, which requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the Consolidated Financial Statements and reported amounts of revenues and expenses in the reporting period. Actual results could differ from those estimates. As interim statements, the Condensed Consolidated Financial Statements do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring items) considered necessary for a fair presentation in accordance with GAAP have been included. Results for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2023 may not be indicative of the results that may be expected for the full year of ~~2017.~~2023. For further information, please read the Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, ~~2016.~~2022.

~~Segment Disclosure~~The accompanying Condensed Consolidated Financial Statements consolidate the accounts of all entities in which we have a controlling financial interest, as well as variable interest entities for which the Company is the primary beneficiary. All significant intercompany balances and transactions have been eliminated in the Condensed Consolidated Financial Statements.

We evaluate joint venture partnerships to determine if they should be consolidated based on whether the partners exercise joint control. For a joint venture where we exercise primary control and we also own a majority of the equity interests, we consolidate the joint venture partnership. We have consolidated the accounts of our joint venture partnerships in our accompanying Condensed Consolidated Financial Statements.

Real Estate Development Loans

We selectively provide mezzanine financing to developers where we also have the opportunity to acquire the lodging property at or after the completion of the development project. We classify mezzanine loans as Investments in lodging property, net or Investments in real estate loans, net based on the terms of the loan agreements and criteria for classifying an arrangement as a loan or an investment in real estate under Accounting Standards Codification ~~(“ASC”~~("ASC") ~~Topic 280,~~ ~~Segment Reporting, establishes standards for reporting financial and descriptive information about an enterprise’s reportable segments. We~~No. 310, Receivables. At March 31, 2023, we have ~~determined~~one mezzanine loan that we have ~~one reportable segment~~classified in Investments in lodging property, net on our Condensed Consolidated Balance Sheet.

Current Estimate of Credit Losses

Financial assets (or a group of financial assets) such as real estate development loans and other notes receivable are measured at amortized cost and presented at the net amount expected to be collected in accordance with ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326). We record an allowance for ~~activities~~credit losses as a valuation account that is deducted from the amortized cost basis of the financial asset to present the net carrying value at the amount expected to be collected on the financial asset. The measurement of expected credit losses is based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. We routinely evaluate our real estate development loans, notes receivable and interest receivables for collectability. Probable losses on loans are recognized in a valuation account that is deducted from the amortized cost basis of the loans and recorded as Provision for credit losses in our condensed Consolidated Statements of Operations. When we place a loan on non-accrual status, we suspend the recognition of interest income until cash interest payments are received. Generally, we return loans to accrual status when all delinquent interest becomes current, and collectability of interest is reasonably assured. We do not measure an allowance for credit losses for accrued interest receivable. Accrued interest receivable is written-off to bad debt expense when collection is not reasonably assured.

On occasion, we may provide a financial guarantee on behalf of a mezzanine borrower. We record the non-contingent portion of financial guarantees made on behalf of third-parties as a liability at an amount equal to the premium receivable for the guarantee payable to us by the borrower under the practical expedient provided by ASC No. 460, Guarantees. We periodically evaluate the contingent component of a financial guarantee based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that may require us to record a liability related to ~~investing~~the contingent component of a guarantee. We will record a liability for the contingent component of the guarantee when a payment by us under the guarantee is probable and reasonably estimable in ~~real estate. Our investments~~accordance with ASC No. 326, Financial Instruments - Credit Losses.

When we provide mezzanine financing to a developer, we will generally take a purchase option to acquire a majority interest in ~~real estate are geographically diversified and~~ the ~~chief operating decision makers evaluate operating performance on an individual asset level. As each~~property upon completion of ~~our assets has similar economic characteristics, the assets have been aggregated into one reportable segment.~~

~~Investment in Hotel Properties~~

Non-controlling Interests

Non-controlling interests represent the portion of ~~our investment~~equity in a consolidated entity held by owners other than the consolidating parent. Non-controlling interests are reported in the ~~hotel property during~~Condensed Consolidated Balance Sheets within equity, separately from stockholders’ equity. Revenues, expenses and net income attributable to both the ~~construction period.~~

~~value of the property based on discounted cash flows or sales price if the property is under contract and an adjustment is made~~Our Condensed Consolidated Financial Statements include non-controlling interests related to ~~reduce the carrying value of the property to its estimated fair value.~~

~~Intangible Assets~~

~~Variable Interest Entities~~

Redeemable Non-controlling Interests

Redeemable non-controlling interests represent redeemable preferred units issued by our Operating Partnership ("Redeemable Preferred Units"). The Redeemable Preferred Units are presented as temporary equity related to ~~a Parked Asset prior to completion of a 1031 Exchange. As such, a Parked Asset is included in~~our Operating Partnership on our Condensed Consolidated Balance Sheets ~~and Condensed Consolidated Statements~~under the caption of ~~Operations as a consolidated VIE until legal title is transferred to us upon completion~~"Redeemable Non-controlling Interests." See "Note 9 - Equity" for further information. We record Redeemable non-controlling interests at fair value on the issuance date of the ~~1031 Exchange.~~ securities. When the carrying value (the acquisition date fair value adjusted for the non-controlling interest’s share of net income (loss) and dividends) is less than the redemption value, we adjust the redeemable non-controlling interest to equal the redemption value with changes recognized as an adjustment to Accumulated deficit and distributions in excess of retained earnings. Any such adjustment, when necessary, is recorded as of the applicable balance sheet date.

~~Cash and Cash Equivalents~~

Trade Receivables and Credit Policies

We grant credit to qualified customers, generally without collateral, in the form of trade accounts receivable. Trade receivables result from the rental of ~~hotel~~ guestrooms and the sales of food, beverage, and banquet services and are payable under normal trade terms. Trade receivables also include credit and debit card transactions that are in the process of being settled. Trade receivables are stated at the amount billed to the customer and do not accrue interest.

Basic earnings (loss) per share (“EPS”) is computed by dividing net income (loss) available to common stockholders by the weighted-average number of shares of common stock outstanding for the period. We apply the two-class method of computing earnings (loss) per share, which requires the calculation of separate earnings (loss) per share amounts for participating securities. Under the two-class computation method, net losses are not allocated to participating securities unless the holder of the security has a contractual obligation to share in the losses. Any anti-dilutive securities are excluded from the basic per-share calculation.

Diluted EPS is computed by dividing net income (loss) available to common stockholders, as adjusted for dilutive securities, by the weighted-average number of shares of common stock outstanding plus dilutive securities. Any anti-dilutive securities are excluded from the diluted per-share calculation.

Basic and diluted loss per share for the three months ended March 31, 2023 and 2022 are calculated as Net loss attributable to common stockholders for each respective period divided by weighted-average shares of common stock outstanding for each respective period as all other securities are antidilutive. Potentially dilutive shares include unvested restricted share grants, unvested performance share grants, shares of common stock issuable upon conversion of convertible debt and shares of common stock issuable upon conversion of Common Units of our Operating Partnership.

Our Condensed Consolidated Financial Statements are prepared in conformity with GAAP, which requires us to make estimates based on assumptions about current and, for some estimates, future economic and market conditions that affect reported amounts and related disclosures in our Condensed Consolidated Financial Statements. Although our current estimates contemplate current and expected future conditions, as applicable, it is reasonably possible that actual conditions could materially differ from our expectations, which could materially affect our consolidated financial position and results of operations.

New Accounting Standards

In March 2020, the Financial Accounting Standards Board issued ASU No. 2020-04, Reference Rate Reform (Topic 848). ASU No. 2020-04 contains practical expedients for reference rate reform related activities that affect debt, leases, derivatives and other contracts. The guidance in ASU No. 2020-04 is optional and may be elected over time as reference rate reform activities occur. During the year ended December 31, 2020, the Company elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives. Application of these expedients preserves the presentation of derivatives consistent with past presentation. The implementation of ASU No. 2020-04 did not have a material effect on our consolidated financial position or results of operations.

In September 2022, the Financial Accounting Standards Board issued ASU No. 2022-04, Liabilities - Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations, to enhance transparency around the use of supplier finance programs. The provisions for this update are effective for annual and interim periods beginning after December 31, 2022. Effective January 1, 2023, the Company adopted ASU 2022-04. The standard did not have a material effect on the Company's condensed consolidated financial statements.

NOTE 3 - INVESTMENTS IN LODGING PROPERTY, NET

~~Deferred Charges,~~Investments in Lodging Property, net

~~Initial franchise fees are capitalized~~Investments in lodging property, net is as follows (in thousands):


	March 31, 2023		December 31, 2022
Lodging buildings and improvements	$	2,776,110	$	2,764,355
Land	365,770		365,770
Furniture, fixtures and equipment	256,681		250,575
Construction in progress	65,252		62,471
Intangible assets	39,954		39,954
Real estate development loan, net	519		—
	3,504,286		3,483,125
Less accumulated depreciation	(727,339)		(690,573)
	$	2,776,947	$	2,792,552

Depreciation and amortization expense related to our lodging properties was $36.8 million and $36.1 million for the three months ended March 31, 2023 and 2022, respectively.

Real Estate Development Loans

Onera Mezzanine Loan

In January 2023, we entered into an agreement with affiliates of Onera Opportunity Fund I, LP ("Onera") to provide a mezzanine loan to fund up to $4.6 million for the development of a glamping property (the "Onera Mezzanine Loan"). The Onera Mezzanine Loan is secured by a second mortgage on the property that is subordinate to the senior lender for the development project. The loan matures 24 months from the closing date of the transaction and may be extended for an additional 12 months at the borrower's option. Additionally, we issued a $3.0 million letter of credit to the senior lender of the project as additional support for Onera's construction loan. We also have an option to purchase 90% of the equity of the entity that owns the development property upon completion of construction or upon the one-year anniversary of such completion at a pre-determined price (the "Onera Purchase Option"). The development is expected to be completed in the second half of 2024. As of March 31, 2023, we funded $1.3 million of our total $4.6 million commitment under the mezzanine loan. The balance of the Onera Mezzanine Loan is recorded net of the unamortized discount related to the carrying amount of the Onera Purchase Option of $0.8 million at March 31, 2023, and is classified as Investments in lodging property, net in our Condensed Consolidated Balance Sheets at March 31, 2023.

We recorded the Onera Purchase Option related to the Onera Mezzanine Loan at its estimated fair value of $0.9 million on the transaction date using the Black-Scholes model in Other assets and as a contra-asset to Investments in lodging property, net. The recorded amount of the Onera Purchase Option is being amortized over the term of the ~~franchise agreement using the straight-line method.~~

~~Deferred Financing Fees~~

~~Non-controlling Interests~~Brickell Mezzanine Loan

~~Non-controlling interests represent~~During the ~~portion~~year ended December 31, 2019, we executed a mezzanine loan, as amended, to a developer (the "Brickell Mezzanine Loan") to fund up to $29.9 million for a mixed-use development project that included the AC Hotel by Marriott and Element Miami Brickell Hotel in Miami, FL (together the "AC/Element Hotel"), retail space, and parking. As of ~~equity in~~March 31, 2022, we had funded $29.6 million of our total $29.9 million commitment, and we funded the full commitment thereafter. In connection with the Brickell Mezzanine Loan, we received an option to purchase a ~~consolidated entity held by owners other than the consolidating parent. Non-controlling interests are reported~~90% interest in the ~~Condensed Consolidated Balance Sheets within equity, separately from stockholders’ equity. Revenue, expenses and net income attributable~~AC/Element Hotel (the “Initial Purchase Option”). We also have the right to ~~both~~purchase the ~~Company and the non-controlling interests are reported~~remaining interest in the ~~Condensed Consolidated Statements of Operations.~~

~~Revenue Recognition~~

~~Occupancy, Sales and Other Taxes~~

~~Equity-Based Compensation~~

~~Derivative Financial Instruments and Hedging~~

We ~~assess~~recorded the ~~effectiveness of each hedging relationship by comparing changes in~~Brickell Purchase Option at its estimated fair value ~~or cash flows~~ of $2.8 million on the ~~derivative financial instrument with~~transaction date using the ~~changes~~Black-Scholes model in ~~fair value or cash flows of the designated hedged item or transaction.~~

Our estimate of the fair values of the Onera Purchase Option and the Brickell Purchase Option under the Black-Scholes model requires significant judgment and estimates primarily related to the volatility of our stock price and expected levels of future dividends on our common stock. Although our estimates contemplate current and expected future conditions, as applicable, it is reasonably possible that actual conditions could materially differ from our expectations.

Lodging Property Acquisitions

During the quarter ended March 31, 2022, the Operating Partnership and the GIC Joint Venture closed on a transaction (the "NCI Transaction") with NewcrestImage Holdings, LLC and NewcrestImage Holdings II, LLC (together, "NewcrestImage"), to purchase from NewcrestImage a portfolio of 27 lodging properties, containing an aggregate of 3,709 guestrooms, and two parking structures, containing 1,002 spaces, and various financial incentives for an aggregate purchase price of $822.0 million, paid in the ~~equity section~~form of ~~our Condensed Consolidated Balance Sheets and reclassified~~15,864,674 Common Units (deemed value of $10.0853 per unit), 2,000,000 Series Z Preferred Units, cash draws totaling $410.0 million from a term loan entered into by subsidiaries of the GIC Joint Venture, the assumption by a subsidiary of the GIC Joint Venture of approximately $6.5 million in PACE loan debt, $5.9 million of cash contributed to ~~interest expense in our Condensed Consolidated Statements of Operations~~escrow in the ~~period~~prior year by GIC, as a limited partner in ~~which~~ the ~~hedged item affects earnings. The ineffective~~Joint Venture, and approximately $185.2 million cash contributed by GIC at closing. GIC also contributed to the GIC Joint Venture an additional $18.5 million in cash for estimated pre-acquisition costs related to the NCI Transaction, a portion of ~~changes in fair value is recognized in current earnings in other income (expense) in the Condensed Consolidated Statements of Operations.~~

~~Taxable income related to our TRS is subject to federal, state~~We valued the Common Units and ~~local income taxes~~Series Z Preferred Units at ~~applicable tax rates. Our consolidated income tax provision includes~~fair market value on the ~~income tax provision related to the operations~~closing dates of the ~~TRS as well as state~~NCI Transaction, which resulted in us recording the issued Common Units and ~~local income taxes related to~~Series Z Preferred Units at $157.5 million and $50.0 million, respectively. The Common Units were recorded at the ~~Operating Partnership.~~

~~Fair Value Measurement~~

The GIC Joint Venture assumed $335.2 million of debt in connection with the NCI Transaction and immediately repaid $328.7 million of the assumed debt on the closing date using proceeds from borrowings on the GIC Joint Venture Term Loan (as described in Note 5 - Debt). We recorded debt assumed in connection with the NCI Transaction at its face amount, which approximated fair market value on the closing date.

The GIC Joint Venture recorded the NCI Transaction as an asset acquisition and allocated the aggregate purchase price paid for the NCI Transaction to the net assets acquired based on their relative fair ~~value measurement.~~

~~Use of Estimates~~

A summary of the lodging properties acquired during the ~~reporting period. Actual results could differ from those estimates.~~

~~New Accounting Standards~~

~~NOTE 3 - INVESTMENT IN HOTEL PROPERTIES, NET~~

~~Investment in Hotel Properties, net~~


Date Acquired	Franchise/Brand	Location	Guestrooms	Purchase Price
January 13, 2022	Portfolio of properties - twenty-six lodging properties and two parking garages (1)	Various	3,533	$	766,000
March 23, 2022	Canopy Hotels by Hilton (1)	New Orleans, LA	176	56,000

			3,709	$	822,000

September 30, 2017 December 31, 2016
Land $ 237,652
$ 178,423
Hotel buildings and improvements 1,745,059
1,433,389
Intangible assets 22,764
6,602
Construction in progress 13,602
22,490
Furniture, fixtures and equipment 152,562
129,437
2,171,639
1,770,341
Less - accumulated depreciation and amortization (268,690 ) (225,219 )
$ 1,902,949
$ 1,545,122

Favorable leases ⁽²⁾

Unfavorable leases ⁽²⁾

~~Investment in Hotel Properties Under Development~~

~~Assets Held for Sale~~

~~Other Asset Sales~~

At December 31, 2015, we held two notes receivable totaling $2.7 million related to seller-financing for the sale in a prior year of two hotel properties in Emporia, KS (each an "Emporia Property"). The loans had matured and the buyer was in payment default under the terms of the loans. We were awarded legal title to one Emporia Property through foreclosure. We also purchased an additional note receivable from the first priority lien holder for the Emporia Property for which foreclosure proceedings were ongoing to facilitate the completion of the reacquisition of this Emporia Property through a foreclosure. On April 15, 2016, we completed the sale of the reacquired Emporia Property to a third-party purchaser that was unrelated to the prior owner. On May 18, 2016, we completed the sale of the first and second lien notes related to the remaining Emporia Property to the same purchaser. The aggregate selling price of the Emporia Properties was approximately $4.5 million. As a result of the foreclosure activities and the sale of the notes, we have no further interest in either Emporia Property.

~~Hotel Property Acquisitions~~

The allocation of the aggregate purchase prices to the fair value of assets and liabilities acquired for the above acquisitions is as follows (in thousands):

Total assets acquired ~~totaled $169.7 million due to the purchase at settlement of $0.7 million of net liabilities.~~ (1)

~~Under ASU No. 2017-01, all hotel purchases completed in 2017 were deemed~~

(1) Total assets acquired is based on an aggregate purchase price of $822.0 million plus the following items related to be the ~~acquisition~~NCI Transaction: interest swap breakage fees and debt defeasance costs of ~~assets. Therefore, acquisition~~$3.5 million, a reduction to the value of the Common Units issued on the closing date of $2.5 million, plus transaction costs of $3.0 million, and intangible assets totaling $9.1 million acquired outside of escrow.

Acquisition costs related to ~~these transactions~~the NCI Transaction have been capitalized as part of the recorded ~~amount~~amounts of the acquired assets.

~~Total revenues and net income for hotel properties acquired in~~There were no acquisitions during the ~~nine~~three months ended ~~September 30, 2017 and 2016, which are included in our Condensed Consolidated Statements of Operations, are~~March 31, 2023.

Intangible assets, net is as follows (in thousands):


	March 31, 2023		December 31, 2022
Indefinite-lived intangible assets:
Air rights	$	10,754	$	10,754
Other	80		80
	10,834		10,834
Finite-lived intangible assets:

Tax incentives	19,750		19,750
Key money	9,370		9,370


	29,120		29,120
Intangible assets	39,954		39,954
Less accumulated amortization	(6,149)		(5,110)
Intangible assets, net	$	33,805	$	34,844

We recorded amortization expense related to intangible assets of approximately $1.0 million and $0.9 million for the three months ended March 31, 2023 and 2022, respectively.

2017 Acquisitions ⁽¹⁾

2016 Acquisitions ⁽²⁾

2017 Acquisitions ⁽¹⁾

2016 Acquisitions ⁽²⁾
For the For the For the For the

Three Months Ended
September 30,

Three Months Ended
September 30,
Nine Months Ended September 30,
Nine Months Ended
September 30,
2017 2017 2016 2017 2017 2016
Revenues $ 20,913
$ 9,233
$ 8,071
$ 28,283
$ 25,929
$ 18,582
Net income $ 1,960
$ 1,734
$ 2,568
$ 3,816
$ 4,965
$ 5,284
Future amortization expense related to intangible assets is as follows (in thousands):


For the Year Ending December 31,	Amount
2023	$	4,331
2024	3,620
2025	1,625
2026	1,625
2027	1,506
Thereafter	10,264
	$	22,971

Assets Held for Sale

Assets held for sale, net at March 31, 2023 and December 31, 2022 include certain properties that are under contract for sale and expected to close during the second or third quarters of 2023 or are being marketed for sale as follows (in thousands):


~~(1)~~			Net income for the 2017 Acquisitions includes depreciation expense, real estate tax expense, interest expense, and other corporate expenses totaling $7.0 million and $8.5 million for three and nine months ended September 30, 2017, respectively.Carrying Amount

Under Contract For Sale:
~~(2)~~ Portfolio of four lodging properties	Net income for the 2016 Acquisitions includes depreciation expense, real estate tax expense, interest expense, and other corporate expenses totaling $3.0 million and $1.9 million for three months ended September 30, 2017 and 2016, respectively, and $8.2 million and $4.6 million for the nine months ended September 30, 2017 and 2016, respectively.$	27,669
Portfolio of two lodging properties	49,853
Parcel of undeveloped land - San Antonio, TX	1,225
	78,747
Marketed For Sale:
Parcel of undeveloped land - Flagstaff, AZ	425
	$	79,172

~~The results~~We continue to incur limited renovation costs for certain properties recorded as Assets held for sale, net. During the three months ended March 31, 2023, we incurred approximately $0.6 million of ~~operations of acquired hotel properties are included in~~such renovation costs that have been capitalized during the ~~Condensed Consolidated Statements of Operations beginning on their respective acquisition dates. The following unaudited pro forma information includes operating results for 79 hotels owned~~period as of September 30, 2017 as if all such hotels had been owned by us since January 1, 2016. For hotels acquired by us after January 1, 2016 (the "Acquired Hotels"), we have included in the pro forma information the financial results of eachpart of the Acquired Hotels for the period from January 1, 2016 to the date the Acquired Hotels were purchased by us (the "Preacquisition Period"). The financial results for the Pre-Acquisition Period were provided by the third-party owner of such Acquired Hotel prior to purchase by us and such information has not been audited or reviewed by our auditors or adjusted by us. For hotels sold by us between January 1, 2016 and September 30, 2017 (the "Disposed Hotels"), the unaudited pro forma information excludes the financial results of eachcarrying amounts of the ~~Disposed Hotels~~related properties recorded as Assets held for sale, net.

NOTE 4 — REAL ESTATE LOANS, NET

Investment in real estate loans, net is as follows (in thousands):


	March 31, 2023		December 31, 2022
Real estate loan	$	1,250	$	1,250
Allowance for credit losses	(1,000)		(1,250)

	$	250	$	—

On June 29, 2018, we sold the ~~period~~Holiday Inn in Duluth, GA and the Hilton Garden Inn in Duluth, GA for an aggregate selling price of ownership by us from January 1, 2016 through the date that the Disposed Hotels were sold by us. The unaudited pro forma information is included to enable comparison of results for the current reporting period to results for the comparable period of the prior year and is not indicative of what actual results of operations would have been had the hotel acquisitions and dispositions taken place on or before January 1, 2016. The pro forma amounts exclude the gain$24.9 million. We provided seller financing totaling $3.6 million on the sale of ~~hotel~~these properties ~~during~~under two, 3.5-year second mortgage notes with a blended interest rate of 7.38% that are further collateralized by a personal guarantee from the ~~three~~principal of the borrower. During the year ended December 31, 2020, we recorded an allowance for credit losses in an amount equal to the outstanding balance of the loans due to a borrower default caused by the negative effects of the COVID-19 pandemic. On June 1, 2021, we amended the terms of the seller-financing loans and ~~nine months~~extended the maturity dates of each loan to December 31, 2022. Under the modified loan terms, interest accrues monthly at a rate of 9.00% per annum, including 5.00% payable in cash and 4.00% paid-in-kind.

On September 15, 2022, we received a $0.6 million payment to repay one of the two loans in full. We also extended the maturity date of the remaining loan to December 31, 2023. During the year ended ~~September 30, 2017~~December 31, 2022, the remaining loan and ~~2016, respectively. This information does not purport~~underlying collateral were transferred to the control of the estate of the principal borrower who was also the personal guarantor on the loan. The outstanding principal balance of the remaining seller-financing loan continues to be ~~indicative~~fully reserved pending further performance by the borrower under the modified terms of ~~or represent results~~the loan. In April 2023, we received a scheduled principal payment of ~~operations for future periods.~~$0.3 million on the loan.

The ~~unaudited condensed pro forma financial information for the 79 hotel properties owned~~seller-financing loan,net is included in Prepaid expenses and other in our Condensed Consolidated Balance Sheets at ~~September 30, 2017 for the three~~March 31, 2023 and ~~nine months ended September 30, 2017 and 2016 is as follows (in thousands, except per share):~~December 31, 2022.

For the
Three Months Ended
September 30,

For the
Nine Months Ended
September 30,
2017 2016 2017 2016
Revenues $ 136,369
$ 135,373
$ 405,289
$ 408,104
Income from hotel operations $ 50,458
$ 52,250
$ 152,282
$ 160,450
Net income before taxes⁽¹⁾
$ 14,234
$ 25,181
$ 58,044
$ 79,569
Net income ⁽¹⁾
$ 14,465
$ 26,426
$ 57,431
$ 76,108
Net income attributable to common stockholders, net of amount allocated to participating securities ⁽¹⁾
$ 10,162
$ 21,275
$ 44,359
$ 62,357
Basic and diluted net income per share attributable to common stockholders ⁽¹⁾
$ 0.10

$ 0.25
$ 0.45
$ 0.72
Diluted net income per share attributable to common stockholders ⁽¹⁾
$ 0.10
$ 0.24
$ 0.45
$ 0.71


~~(1)~~	Pro Forma amounts include depreciation expense, real estate tax expense, interest expense, income tax expense, and other corporate expenses totaling $46.2 million and $34.3 million for three months ended September 30, 2017 and 2016, respectively, and $124.3 million and $110.9 million for the nine months ended September 30, 2017 and 2016, respectively.

NOTE 45 - DEBT

At September 30, 2017 our indebtedness is comprised of borrowings under a $450.0 million senior unsecured credit facility, the 2015 Term Loan (as defined below), the 2017 Term Loan (as defined below), and indebtedness secured by first priority mortgage liens on various hotel properties. At December 31, 2016, our indebtedness is comprised of borrowings under a $450.0 million senior unsecured credit facility, the 2015 Term Loan (as defined below), and indebtedness secured by first priority mortgage liens on various hotel properties. The weighted average interest rate, after giving effect to our interest rate derivative, for all borrowings was 3.78% at September 30, 2017 and 3.69% at December 31, 2016.

Debt, net of debt issuance costs, is as follows (in thousands):


	March 31, 2023		December 31, 2022
Revolving debt	$	155,000	$	140,000
Term loans	910,000		910,000
Convertible notes	287,500		287,500
Mortgage loans	124,932		125,624
	1,477,432		1,463,124
Unamortized debt issuance costs	(10,309)		(11,328)
Debt, net of debt issuance costs	$	1,467,123	$	1,451,796

The weighted-average interest rate, after giving effect to our interest rate derivatives, for all borrowings was 5.35% at March 31, 2023 and 5.04% at December 31, 2022. There are currently no defaults under any of the Company's mortgage loan agreements.

September 30, 2017 December 31, 2016
Revolving debt $ 40,000
$ 50,000
Term loans 415,000
290,000
Mortgage loans 322,464
317,550
777,464
657,550
Unamortized debt issuance costs (5,189 ) (5,136 )
Debt, net of debt issuance costs $ 772,275
$ 652,414
We have entered into interest rate swaps to fix the interest rates on a portion of our variable interest rate indebtedness. In March 2023, subsidiaries of the GIC Joint Venture that are the borrowers under the GIC Joint Venture Term Loan entered into two $100.0 million interest rate swaps to fix one-month term SOFR until January 2026. The interest rate swaps have an effective date of July 1, 2023 and a termination date of January 13, 2026. See "Note 7 - Derivative Financial Instruments and Hedging" to the Condensed Consolidated Financial Statements for additional information.

Our total fixed-rate and variable-rate debt, after ~~giving effect to~~considering our interest rate derivative agreements that are currently effective, is as follows (in thousands):


	March 31, 2023		Percentage	December 31, 2022		Percentage
Fixed-rate debt (1)	$	757,808	51%	$	758,433	52%
Variable-rate debt	719,624		49%	704,691		48%
	$	1,477,432		$	1,463,124

September 30, 2017 December 31, 2016
Fixed-rate debt $ 365,446
$ 359,867
Variable-rate debt 412,018
297,683
$ 777,464
$ 657,550
(1) At March 31, 2023, debt related to our wholly-owned properties and our pro rata share of joint venture debt has a fixed-rate debt ratio of approximately 73% of our total pro rata indebtedness when taking into consideration interest rate swaps entered into during the three months ended March 31, 2023 when they become effective in July 2023.

Information about the fair value of our fixed-rate debt that is not recorded at fair value is as follows (in thousands):

September 30, 2017 December 31, 2016

Carrying
Value
Fair Value
Carrying
Value
Fair Value Valuation Technique
Fixed-rate debt $ 290,446
$ 293,207
$ 284,867
$ 283,416
Level 2 - Market approach


	March 31, 2023				December 31, 2022
	Carrying Value		Fair Value		Carrying Value		Fair Value		Valuation Technique
Convertible notes	$	287,500	$	246,750	$	287,500	$	247,126	Level 1 - Market approach
Mortgage loans	70,307		61,999		70,933		61,447		Level 2 - Market approach
	$	357,807	$	308,749	$	358,433	$	308,573

Detailed information about our gross debt at March 31, 2023 and 2022 is as follows:


Lender	Interest Rate	Maturity Date	Number of Encumbered Properties		March 31, 2023			December 31, 2022
OPERATING PARTNERSHIP DEBT:
2018 Senior Credit Facility
Bank of America, NA
$400 Million Revolver (1)(2)	6.86% Variable	September 30, 2023	n/a		$	30,000		$	15,000
$200 Million Term Loan (1)(3)	6.81% Variable	April 1, 2024	n/a		200,000			200,000
Total Senior Credit and Term Loan Facility				230,000			215,000

Term Loans

KeyBank National Association Term Loan (1)	6.64% Variable	February 14, 2025	n/a		225,000			225,000

Convertible Notes	1.50% Fixed	February 15, 2026	n/a		287,500			287,500

Secured Mortgage Indebtedness




MetaBank	4.44% Fixed	July 1, 2027	3		43,518			43,917









Bank of the Cascades (First Interstate Bank) (4)	6.60% Variable	December 19, 2024	1		7,624			7,691
	4.30% Fixed	December 19, 2024	—		7,624			7,691





Total Mortgage Loans			4		58,766			59,299
					801,266			786,799

JOINT VENTURE DEBT:
Brickell Joint Venture Mortgage Loan
City National Bank of Florida	7.86% Variable	June 30, 2025	2		47,000			47,000

GIC Joint Venture Credit Facility and Term Loans
Bank of America, N.A.
$125 Million Revolver (5)	6.99% Variable	October 8, 2023	n/a		125,000			125,000
$75 Million Term Loan (5)	6.94% Variable	October 8, 2023	n/a		75,000			75,000
Bank of America, N.A. (6)	7.63% Variable	January 13, 2026	n/a		410,000			410,000
Wells Fargo	4.99% Fixed	June 6, 2028	1		12,969			13,032
PACE loan	6.10% Fixed	July 31, 2040	1		6,197			6,293
Total GIC Joint Venture Credit Facility and Term Loans			2		629,166			629,325
Total Joint Venture Debt			4		$	676,166		$	676,325
Total Debt			8		$	1,477,432		$	1,463,124

(1) The 2018 Senior Credit Facility and Term Loans are supported by a borrowing base of 57 unencumbered hotel properties and a pledge of the equity securities of the entities that own and operate the 57 unencumbered hotels.

(2) We have exercised our option to extend the maturity date for the $400 Million Revolver to September 30, ~~2017~~2023 and ~~December~~we have additional options to extend the maturity date to March 31, 2016, we had $75.0 million of debt with variable interest rates that had been converted to fixed interest rates through a derivative financial instrument which is carried at fair value. Differences between carrying value and fair value of our fixed-rate debt are primarily due to changes in interest rates. Inherently, fixed-rate debt is2025, subject to ~~fluctuations in fair value as a result~~certain conditions.

(3) The maturity date for the $200 Million Term Loan can be extended to April 1, 2025 at the Company’s option, subject to certain conditions.

(4) The Bank of ~~changes~~Cascades mortgage loan is comprised of two promissory notes that are secured by the same collateral and cross-defaulted.

(5) The $125 million Revolver and the $75 million Term Loan are secured by pledges of the equity in the ~~current market rate~~entities (and affiliated entities) that own 11 lodging properties.

(6) The GIC Joint Venture's $410 million term loan with Bank of ~~interest on~~America, N.A. is secured by pledges of the ~~valuation date. For additional information on our use of derivatives as interest rate hedges, refer to "Note 5 — Derivative Financial Instruments and Hedging."~~equity in the entities (and affiliated entities) that own 27 lodging properties.

~~$450 Million~~

2018 Senior ~~Unsecured~~ Credit Facility

On ~~January 15, 2016,~~December 6, 2018, the Operating Partnership, as borrower, the Company, as parent guarantor, and each party executing the loan documentation as a subsidiary guarantor, entered into a ~~$450.0~~$600.0 million senior ~~unsecured~~ credit facility (the ~~“2016 Unsecured~~“2018 Senior Credit Facility”)~~, which replaced the previous $300.0 million senior unsecured credit facility that was in place.~~ with Deutsche Bank AG New York Branch, as administrative agent, and a syndicate of lenders. The ~~2016 Unsecured~~2018 Senior Credit Facility is comprised of a ~~$300.0~~$400.0 million ~~revolving credit~~revolver (the "$400 Million Revolver") and a $200.0 million term loan facility (the “$~~300 Million Revolver”) and a $150.0 million term loan (the “$150~~200 Million Term Loan”). ~~At September 30, 2017, the maximum amount of borrowing provided by the 2016 Unsecured Credit Facility was~~ ~~$450.0 million, of which we had $190.0 million borrowed and $260.0 million available to borrow.~~

The ~~2016 Unsecured~~2018 Senior Credit Facility has an accordion feature which ~~will allow~~allows the Company to increase the total commitments by an aggregate of up to ~~$150.0~~$300.0 million. ~~The $300~~At March 31, 2023, our $200 million Term Loan was fully funded, and our $400 Million Revolver ~~will mature on March 31, 2020 and can be extended~~had $30.0 million in outstanding borrowings. As of April 30, 2023, our $400 Million Revolver had $25.0 million in outstanding borrowings due to repayments subsequent to March 31, ~~2021 at the Company’s option, subject to certain conditions. The $150 Million Term Loan will mature on March 31, 2021.~~

The Company pays interest on revolving credit advances at varying rates based upon, at the Company’s option, either (i) 1-, 2-, 3- or 6-month LIBOR, plus a margin of between 1.50% and 2.25%, depending upon the Company’s leverage ratio (as defined in the 2016 Unsecured Credit Facility agreement), or (ii) the applicable base rate, which is the greatest of the administrative agent’s prime rate, the federal funds rate plus 0.50%, and 1-month LIBOR plus 1.00%, plus a base rate margin of between 0.50% and 1.25%, depending upon the Company’s leverage ratio. The interest rate at September 30, 2017 was 2.88%.

~~Financial and Other Covenants. We are required to comply with a series of financial and other covenants to borrow under this credit facility. At September 30, 2017, we were in compliance with all required covenants.~~

~~Unencumbered Assets. The 2016 Unsecured Credit Facility is unsecured. However, borrowings~~2023. Borrowings under the ~~2016 Unsecured~~2018 Senior Credit Facility are limited by the value of ~~hotel assets that qualify~~the Unencumbered Assets, detailed below. On July 21, 2022, Bank of America, N.A. entered into successor administrative agent documentation to succeed Deutsche Bank AG New York Branch as ~~unencumbered assets. At September 30, 2017,~~administrative agent on the 2018 Senior Credit Facility.

Amendments to the 2018 Senior Credit Facility

Between May 2020 and July 2022, the Company ~~had 46 unencumbered hotel properties (the "Unencumbered Properties") supporting the 2016 Unsecured Credit Facility.~~

~~An interest rate swap~~ entered into ~~on September 5, 2013 with a notional value of $75.0 million,~~several amendments to the 2018 Senior Credit Facility (the “Credit Facility Amendments”).

The Credit Facility Amendments provided two additional six-month maturity date extension options, subject to certain conditions for the $400 Million Revolver and $200 Million Term Loan. The $400 Million Revolver had an ~~effective date of January 2, 2014 and a~~original maturity date of October 1, 2018 remains outstanding. This interest rate swap was designated as a cash flow hedge and effectively fixes LIBOR at 2.04% which results in a fixed interest rate of 3.49% on $75.0 million of the $150 Million Term Loan.

~~Unsecured Term Loans~~

~~2015 Term Loan~~

~~On April 7, 2015,~~March 31, 2023, but we have exercised our Operating Partnership, as borrower, the Company, as parent guarantor, and each party executing the term loan documentation as a subsidiary guarantor, entered into a $125.0 million unsecured term loan (the “2015 Term Loan”). The 2015 Term Loan matures on April 7, 2022 and has an accordion feature which allows usoption to ~~increase the total commitments by an aggregate of $75.0 million prior to~~extend the maturity date to September 30, 2023. We have additional options to extend the maturity date to March 31, 2025, subject to certain conditions. ~~At closing, we were advanced~~The $200 million Term Loan will mature on April 1, 2024 and can be extended to April 1, 2025 at the ~~full $125.0 million amount~~Company's option, subject to certain conditions.

On July 21, 2022, the interest rate on the 2018 Senior Credit Facility was transitioned from LIBOR to the Secured Overnight Financing Rate (“SOFR”). The interest rate on the 2018 Senior Credit Facility is based on a pricing grid ranging from 140 basis points to 240 basis points plus SOFR plus a 10 basis point credit spread adjustment for the $400 Million Revolver and 135 basis points to 235 basis points plus SOFR plus a 10 basis point credit spread adjustment for the $200 Million Term Loan, depending on the Company's leverage ratio (as defined in the loan documents). For purposes of the ~~2015 Term Loan~~2018 Senior Credit Facility, SOFR is subject to a floor of 25 basis points.

The Credit Facility Amendments require the borrower and ~~on April 21, 2015, we were advanced $15.0 million upon exercise~~certain subsidiaries to pledge to the secured parties all of the ~~accordion. All proceeds were used~~equity interests in the entities that own all properties included in the unencumbered asset pool supporting the facility (“Unencumbered Properties”), as well as the equity interests in the TRS Lessees related to ~~pay down~~such Unencumbered Properties until the ~~principal balance of our $225.0 million revolving credit facility provided under~~borrower meets certain conditions for their release. The Credit Facility Amendments also permitted the ~~former $300.0 million senior unsecured credit facility. We pay interest on advances equal~~Company to complete the ~~sum of LIBOR or~~Convertible Notes Offering (defined below), the ~~administrative agent’s prime rate and the applicable margin. Interest~~Series F preferred shares offering (defined below), close on the ~~outstanding balance of $140 million is currently being paid at an annual rate of 3.18% based on LIBOR at September 30, 2017.~~NCI Transaction and enter into equity transactions and indebtedness related thereto.

~~Borrowings under the 2015 Term Loan are limited by the value of hotel assets that qualify as unencumbered assets. As of~~ ~~September 30, 2017,~~ ~~the 46 Unencumbered Properties also supported the 2015 Term Loan.~~

~~2017~~2018 Term Loan

On ~~September 26, 2017,~~February 15, 2018, our Operating Partnership, as borrower, the Company, as parent guarantor, and each party executing the term loan documentation as a subsidiary guarantor, entered into a $225.0 million ~~unsecured~~ term loan (the ~~"2017~~“2018 Term ~~Loan"~~Loan”) with KeyBank National Association, as administrative agent, Deutsche Bank AG New York Branch and Bank of America, N.A., as co-syndication agents, KeyBanc Capital Markets, Inc., Deutsche Bank Securities, Inc., and Merrill Lynch Pierce Fenner & Smith, as joint bookrunners and joint lead arrangers, and a syndicate of lenders ~~including KeyBank National Association, Deutsche Bank AG New York Branch, Bank~~listed in the loan documents, which is fully drawn as of America, N.A., Capital One, National Association, PNC Bank, National Association, Regions Bank, Raymond James Bank, N.A., Royal Bank of Canada, Branch Banking and Trust Company, and U.S. Bank National Association.

March 31, 2023. The ~~2017~~2018 Term Loan has an accordion feature ~~which~~that allows us to increase the total commitments by ~~an aggregate of $175.0~~$150.0 million prior to the maturity date of February 14, 2025, subject to certain conditions.

Amendments to the 2018 Term Loan. Between May 2020 and July 2022, the Company entered into several amendments to the 2018 Term Loan. The ~~2017~~amendments to the 2018 Term Loan ~~matures on November 25, 2022.~~are substantially the same as the Credit Facility Amendments described above. There was no modification to the maturity date of the 2018 Term Loan.

We pay interest on advances at varying rates, based upon, at our option, either (i) ~~1, 2, 3,~~daily, 1-, 3-, or 6-month ~~LIBOR,~~SOFR (subject to a floor of 25 basis points), plus a ~~LIBOR~~SOFR adjustment equal to 10 basis points and an applicable margin between ~~1.45%~~135 and ~~2.20%,~~215 basis points, depending upon our leverage ratio (as defined in the loan documents), or (ii) the applicable base rate, which is the greatest of the administrative agent’s prime rate, the federal funds rate plus 0.50%, and 1-month LIBOR plus 1.00%, plus a base rate margin between 0.45% and 1.20%, depending upon our leverage ratio.. We are required to pay other fees, including ~~customary~~ arrangement and administrative fees.

Financial and Other ~~Covenants.~~ ~~In addition, we~~Covenants. We are required to comply with ~~a series of~~various financial and other covenants ~~in order~~ to ~~borrow~~draw and maintain borrowings under the ~~2017~~2018 Term Loan. The 2018 Term Loan Amendments provided for certain financial and other covenants under the 2018 Term Loan to be waived or adjusted. The waivers and adjustments were the same as under the amendments to the Company’s 2018 Senior Credit Facility. At ~~September 30, 2017~~March 31, 2023, we ~~are~~were in compliance with all financial covenants.

Unencumbered Assets. The ~~2017~~2018 Term Loan ~~is unsecured. However,~~Amendments require the borrower and certain subsidiaries to pledge to the secured parties all of the equity interests in the entities that own the Unencumbered Properties, as well as the equity interests in the TRS Lessees related to such Unencumbered Properties until the borrower meets certain conditions for the release of such pledges. During the period that the pledges are in place, as well as at all other times during the term of the facility, borrowings under the ~~term loan~~2018 Term Loan are limited by the value of ~~hotel assets~~the Unencumbered Assets.

Convertible Senior Notes and Capped Call Options

On January 7, 2021, we entered into an underwriting agreement (the “Convertible Notes Offering”) pursuant to which the Company agreed to offer and sell $287.5 million aggregate principal amount of 1.50% convertible senior notes due 2026 (the “Convertible Notes"). The net proceeds from the Convertible Notes Offering, after deducting underwriting discounts and commissions and offering expenses payable by the Company (including net proceeds from the full exercise by the underwriters of their over-allotment option to purchase additional Convertible Notes), were approximately $280.0 million before consideration of the Capped Call Transactions (as described below). These proceeds were used to pay the cost of the Capped Call Transactions and to partially repay outstanding obligations under the 2018 Senior Credit Facility and another term loan.

The Convertible Notes bear interest at a rate of 1.50% per year, payable semi-annually in arrears on February 15 and August 15 of each year, beginning on August 15, 2021. The Convertible Notes will mature on February 15, 2026 (the “Maturity Date”), unless earlier converted, purchased or redeemed. Prior to August 15, 2025, the Convertible Notes will be convertible only upon certain circumstances and during certain periods. On or after August 15, 2025 and through the Maturity Date, holders may convert any of their Convertible Notes into shares of the Company’s common stock, at the applicable conversion rate at any time prior to the close of business on the second scheduled trading day prior to the Maturity Date, unless the Convertible Notes have been previously purchased or redeemed by the Company. The Company recorded coupon interest expense of $1.1 million for each of the three months ended March 31, 2023 and 2022. The Company incurred debt issuance costs related to the Convertible Notes Offering of $7.6 million of which $0.4 million was amortized for each of the three months ended March 31, 2023 and 2022. Including the amortization of the debt issuance costs, the effective interest rate on the Convertible Notes was approximately 2.00% for the three months ended March 31, 2023 and 2022. The unamortized discount related to the Convertible Notes was $4.3 million and $4.7 million at March 31, 2023 and December 31, 2022, respectively.

The initial conversion rate of the Convertible Notes is 83.4028 shares of common stock per $1,000 principal amount of Convertible Notes, which is equivalent to an initial conversion price of $11.99 per share of common stock based on the 37.5% base conversion premium on the reference price of $8.72 per share. In no event will the conversion rate exceed 114.6788 shares of common stock per $1,000 principal amount of Convertible Notes, subject to certain adjustments defined in the Convertible Notes Offering. Commensurate with the declaration of dividends on our common stock and Common Units on February 28, 2023, the conversion rate of the Convertible Notes was adjusted to 84.6064 shares of common stock per $1,000 principal amount of Convertible Notes.

On January 7, 2021, in connection with the pricing of the Convertible Notes, and on January 8, 2021, in connection with the full exercise by the Underwriters of their option to purchase additional Convertible Notes pursuant to the Underwriting Agreement, the Company entered into privately negotiated capped call transactions (the “Capped Call Transactions”) with certain of the underwriters or their respective affiliates and another financial institution (the “Capped Call Counterparties”). The Capped Call Transactions initially cover, subject to anti-dilution adjustments substantially similar to those applicable to the Convertible Notes, the number of shares of common stock underlying the Convertible Notes. The Capped Call Transactions are generally expected to reduce the potential dilution to holders of shares of common stock upon conversion of the Convertible Notes or offset the potential cash payments that ~~qualify as unencumbered assets. As of September 30, 2017,~~ the ~~46 Unencumbered Properties also supported the 2017 Term Loan.~~

~~We have the ability~~Company could be required to ~~delay draws~~make in excess of the principal amount of any converted Convertible Notes upon conversion thereof, with such reduction or offset subject to a cap.

The effective strike price of the ~~term loan and, in addition to making~~Capped Call Transactions was initially $15.26, which represented a ~~draw at closing, we may make up to three additional draws prior to September 20, 2018. Beginning December 25, 2017, we pay a facility unused fee~~premium of ~~0.25% per annum~~75.0% over the last reported sale price of our common stock on the ~~unused principal amount~~New York Stock Exchange on January 7, 2021 and is subject to certain adjustments under the terms of the ~~loan.~~Capped Call transactions. The current strike price is $15.04 due to the adjustments related to the dividends paid during the three months ended March 31, 2023 and the year ended December 31, 2022.

~~On September 26, 2017,~~

MetaBank and Other Mortgage Loans

At March 31, 2023 and December 31, 2022, we ~~drew $125.0~~had mortgage loans totaling $124.9 million ~~of the $225.0~~and $125.6 million, ~~available under the 2017 Term Loan and used the proceeds to pay down the principal balance of our $300 Million Revolver.~~respectively, that are secured primarily by first mortgage liens on eight lodging properties.

Metabank Loan

On June 30, 2017, weSummit Meta 2017, LLC (“SM-17”), a subsidiary of our Operating Partnership, entered into a $47.6 million secured, non-recourse loan with ~~Metabank~~MetaBank (the ~~"Metabank~~"MetaBank Loan"). The Metabank Loan includes a delayed draw feature, at no additional cost, whereby $25.0 million of the total loan commitment must be drawn within 90 days of the closing date and the remaining loan commitment must be drawn by December 31, 2017. At September 30, 2017, we had drawn $25.0 million on the Metabank Loan. The MetabankMetaBank Loan provides for a fixed interest rate of 4.44%, amortizes over 25 years, and ~~interest only payments for 18 months following the closing date. After this 18 month period, the loan is amortized~~matures on ~~a 25-year amortization schedule through the maturity date of~~ July 1, 2027. The ~~Metabank~~MetaBank Loan is secured by ~~the Residence Inn in Salt Lake City, UT, the Four Points by Sheraton Hotel & Suites in South San Francisco, CA,~~three lodging properties and ~~the Hyatt Place in Mesa, AZ. The Metabank Loan~~ is subject to a prepayment penalty if prepaid prior to April 1, 2027. In or around December 2021, MetaBank sold the MetaBank Loan to Bayside MB CRE Loans, LLC (“Bayside”). On October 25, 2022, SM-17 received a letter from Bayside’s counsel alleging various events of default under the MetaBank Loan, primarily related to certain non-monetary covenants. SM-17 engaged legal counsel which sent a written response to Bayside disputing that any events of default have occurred. On April 18, 2023, SM-17 received a second letter from Bayside's counsel reasserting their allegations of default. SM-17 continues to dispute that any events of default have occurred.

~~Term~~Commercial Mortgage-backed Securities Mortgage Loans

During 2022, we entered into agreements to fully defease four commercial mortgage-backed securities ("CMBS") mortgage loans that were outstanding at March 31, 2022. The aggregate outstanding balances of the loans at the defeasance dates totaled $87.3 million. The loans were defeased by placing into trust an amount sufficient to cover future principal and interest payments. The defeasance resulted in the 11 lodging properties that collateralized the CMBS mortgage loans becoming unencumbered.

GIC Joint Venture Credit Facility

On October 8, 2019, Summit JV MR 1, LLC (the “Borrower”), as borrower, and Summit Hospitality JV, LP (the “Parent” or "GIC Joint Venture"), as parent of the Borrower, and each party executing the credit facility documentation as a subsidiary guarantor, entered into a $200.0 million credit facility (the “GIC Joint Venture Credit Facility”) with Bank of America, N.A., as administrative agent and sole initial lender, and BofA Securities, Inc., as sole lead arranger and sole bookrunner. The Operating Partnership and the Company are not borrowers or guarantors of the GIC Joint Venture Credit Facility. The GIC Joint Venture Credit Facility is guaranteed by all of the Borrower’s existing and future subsidiaries, subject to certain exceptions.

The GIC Joint Venture Credit Facility is comprised of a $125.0 million revolving credit facility (the “$125 Million Revolver”) and a $75.0 million term loan (the “$75 Million Term Loan”). The GIC Joint Venture Credit Facility has an accordion feature which allows us to increase the total commitments by up to $300.0 million, for aggregate potential borrowings of up to $500.0 million. At ~~September 30, 2017,~~March 31, 2023, we had ~~$737.5~~$125.0 million ~~in secured~~outstanding under the $125 Million Revolver.

The $125 Million Revolver and ~~unsecured term loans outstanding (including~~ the ~~$150~~$75 Million Term Loan will mature on October 8, 2023. Each individually can be extended for a single consecutive twelve-month period at the ~~2015 Term Loan,~~option of the ~~2017 Term Loan~~GIC Joint Venture, subject to certain conditions.

Amendment to $200 Million GIC Joint Venture Credit Facility

On February 15, 2023, the Borrower entered into the Fifth Amendment to Credit Agreement (the "Fifth Amendment") to, among other things, convert the reference rate used in interest rate calculations from LIBOR to adjusted term or daily SOFR (using a 10-basis point credit spread adjustment), with Borrower's option to borrow base rate advances, term SOFR advances or daily SOFR advances.

Revolving advances using adjusted term SOFR and ~~the Metabank Loan described above)~~adjusted daily SOFR have an interest rate margin of 2.15%, and term loan advances using adjusted term SOFR and adjusted daily SOFR have an interest rate margin of 2.1%. ~~Term loans totaling $322.5 million are~~Both adjusted daily SOFR and adjusted term SOFR have a floor of zero percent.

The GIC Joint Venture Credit Facility is secured primarily by a first priority pledge of the Borrower's equity interests in the subsidiaries that own the 11-lodging property borrowing base assets, and the related TRS entities, which wholly own the TRS Lessees that lease each of the borrowing base assets.

GIC Joint Venture Term Loan

In connection with the NCI Transaction, on January 13, 2022, Summit JV MR 2, LLC, Summit JV MR 3, LLC and Summit NCI NOLA BR 184, LLC (each of which is a subsidiary of the GIC Joint Venture, and are collectively, the “Term Loan Borrower”), the GIC Joint Venture, as parent guarantor, and each party executing the credit facility documentation as a subsidiary guarantor, entered into a $410.0 million senior secured term loan facility (the “GIC Joint Venture Term Loan”) with Bank of America, N.A., as administrative agent and initial lender, Wells Fargo Bank, National Association, as syndication agent and an initial lender, and BofA Securities, Inc. and Wells Fargo Securities, LLC, as joint lead arrangers and joint bookrunners.

Neither the Operating Partnership nor the Company are borrowers or guarantors of the GIC Joint Venture Term Loan. The GIC Joint Venture Term Loan is guaranteed by the GIC Joint Venture and all of the Term Loan Borrower's existing and future subsidiaries, subject to certain exceptions.

The GIC Joint Venture Term Loan provides for a $410.0 million term loan and has an accordion feature which permits an increase in the total commitments by up to $190.0 million, for aggregate potential borrowings of up to $600.0 million. The GIC Joint Venture Term Loan will mature on January 13, 2026 and can be extended for one 12-month period at the option of the GIC Joint Venture, subject to certain conditions.

As of March 31, 2023, we had $410.0 million outstanding on the GIC Joint Venture Term Loan bearing interest at a floating rate of SOFR plus 2.86%.

The GIC Joint Venture Term Loan is secured primarily by a first priority pledge of the Term Loan Borrower's equity interests in the subsidiaries that hold a direct or indirect interest in the 27 lodging properties and two parking facilities purchased in the NCI Transaction that constitute borrowing base assets. The GIC Joint Venture Term Loan contains terms, conditions and covenants for typical for similar credit facilities.

PACE Loan

As part of the NCI Transaction, a subsidiary of the GIC Joint Venture assumed a Property Assessed Clean Energy ("PACE") loan of approximately $6.5 million.The loan bears fixed interest at 6.10%, has an amortization period of 20 years, and matures on July 31, 2040. The PACE loan is secured by an assessment lien imposed by the County of Tarrant, Texas for the benefit of the lender. As of March 31, 2023, we had $6.2 million outstanding on the PACE loan.

Brickell Mortgage Loan

In June 2022, the Company entered into a joint venture (the "Brickell Joint Venture") with C-F Brickell, LLC, a Delaware limited liability company ("C-F Brickell") that was the developer of the AC/Element Hotel, to facilitate the exercise of the Initial Purchase Option to acquire a 90% equity interest in the Brickell Joint Venture, which owned a 100% interest in the AC/Element Hotel. On June 10, 2022, the Brickell Joint Venture entered into a $47.0 million mortgage ~~liens~~loan and non-recourse guaranty with City National Bank of Florida (the "City National Bank Loan") to finance the dual-branded 264-guestroom AC/Element Hotel. The City National Bank Loan provides for an interest rate equal to one-month LIBOR plus 300 basis points. Payment terms include an interest-only period through June 30, 2024 and the loan will amortize based on a 25-year schedule from July 1, 2024 through the maturity date of June 30, 2025. The City National Bank Loan is prepayable at any time without penalty.

Financial Guarantee

During the three months ended March 31, 2023, we issued a $3.0 million letter of credit to the senior lender of a glamping project for which we provided the Onera Mezzanine Loan as additional support on behalf of the developer. We recorded the non-contingent portion of financial guarantee as a liability of $0.2 million on the transaction date, which is the premium receivable for the guarantee payable to us by the borrower. The liability is being amortized using the straight-line method into interest income over the term of the letter of credit and is recorded in Accrued expenses and other in our Condensed Consolidated Balance Sheet at March 31, 2023.

At March 31, 2023, any payment under the contingent portion of the guarantee is not probable nor reasonably estimable. Therefore, no liability for the contingent portion of the guarantee is recorded at March 31, 2023.

Property and Casualty Insurance Premium Financing

During the three months ended March 31, 2023, we financed our property and casualty insurance premium totaling $10.9 million through our insurance broker. The financing arrangement requires monthly payments of $1.0 million over an 11-month period at an annual financing rate of 4.89%. The outstanding principal amount of the financing may be prepaid at any time prior to the end of the financing period. The balance of the financing is $9.9 million at March 31, 2023 and is recorded in Accrued expenses and other in our Condensed Consolidated Balance Sheet.

NOTE 6 - LEASES

The Company has operating leases related to the land under certain ~~hotel properties.~~ lodging properties, conference centers, parking spaces, automobiles, our corporate office and other miscellaneous office equipment. These leases have remaining terms of 1 year to 75.3 years, some of which include options to extend the leases for additional years. The exercise of lease renewal options is at our sole discretion. As of March 31, 2023 and December 31, 2022, the weighted-average operating lease term was approximately 33 and 34 years, respectively. Certain leases also include options to purchase the leased property. As of March 31, 2023 and December 31, 2022, our weighted-average incremental borrowing rate for leases was 4.8%.

Certain of our lease agreements include rental payments based on a percentage of revenue over contractual levels and others include rental payments adjusted periodically for inflation. Our lease agreements do not contain any material residual value guarantees or restrictive covenants that materially affect our business. In addition, we lease certain owned real estate to third parties. We recorded gross third-party tenant income of $0.7 million and $0.5 million during the three months ended March 31, 2023 and 2022, respectively, which were recorded in Other income, net in our Condensed Consolidated Statement of Operations.

During the three months ended March 31, 2023 and 2022, the Company's total operating lease cost was $1.1 million and $1.0 million, respectively, and the operating cash payments on operating leases were $1.0 million and $0.9 million, respectively. Operating lease maturities as of March 31, 2023 are as follows (in thousands):


For the Year Ending December 31,	Amount
2023	$	1,637
2024	2,144
2025	2,165
2026	2,199
2027	2,282
Thereafter	37,955
Total lease payments (1)	48,382
Less: Imputed interest	(22,073)
Total	$	26,309

(1)Certain payments above include future increases to the minimum fixed rent based on the Consumer Price Index in effect at the initial measurement of the lease balances.

NOTE 57 - DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING

Information about our derivative financial instruments at ~~September 30, 2017~~March 31, 2023 and December 31, ~~2016~~2022 is as follows (dollars in thousands):


				Notional Amount				Fair Value
Contract date	Effective Date	Expiration Date	Average Annual Effective Fixed Rate	March 31, 2023		December 31, 2022		March 31, 2023		December 31, 2022
October 2, 2017	January 29, 2018	January 31, 2023	1.98%	$	—	$	100,000	$	—	$	208
October 2, 2017	January 29, 2018	January 31, 2023	1.98%	—		100,000		—		210
June 11, 2018	September 28, 2018	September 30, 2024	2.86%	75,000		75,000		1,674		2,219
June 11, 2018	December 31, 2018	December 31, 2025	2.92%	125,000		125,000		2,924		4,211
July 26, 2022	January 31, 2023	January 31, 2027	2.60%	100,000		100,000		3,060		4,366
July 26, 2022	January 31, 2023	January 31, 2029	2.56%	100,000		100,000		3,723		5,627
March 24, 2023	July 1, 2023	January 13, 2026	3.35%	100,000		—		541		—
March 24, 2023	July 1, 2023	January 13, 2026	3.35%	100,000		—		532		—
				$	600,000	$	600,000	$	12,454	$	16,841

September 30, 2017 December 31, 2016

Number of
Instruments

Notional
Amount
Fair Value
Number of
Instruments

Notional
Amount
Fair Value
Interest rate swaps (liability) 1
$ 75,000
$ (438 ) 1
$ 75,000
$ (1,118 )
1
$ 75,000
$ (438 ) 1
$ 75,000
$ (1,118 )
At March 31, 2023 and December 31, 2022, we had $400.0 million of debt with variable interest rates that had been converted to fixed interest rates through derivative financial instruments which are carried at fair value. Differences between carrying value and fair value of our fixed-rate debt are primarily due to changes in interest rates. Inherently, fixed-rate debt is subject to fluctuations in fair value as a result of changes in the current market rate of interest on the valuation date.

On March 24, 2023, subsidiaries of the GIC Joint Venture that are the borrowers under the GIC Joint Venture Term Loan entered into two $100.0 million interest rate swaps to fix one-month term SOFR until January 2026. The interest rate swaps have an effective date of July 1, 2023 and a termination date of January 13, 2026. Pursuant to the interest rate swaps, we will pay a fixed rate of 3.354% and receive the one-month term SOFR floating rate index.

Our interest rate ~~swap has~~swaps have been designated as a cash flow ~~hedge~~hedges and isare valued using a market approach, which is a Level 2 valuation technique. At ~~September 30, 2017~~March 31, 2023 and December 31, ~~2016,~~2022 our interest rate ~~swap was~~swaps were in ~~a liability~~an asset position. ~~The~~Derivative assets related to our interest rate ~~swap expires on October 1, 2018.~~swaps are recorded in Other assets in our Condensed Consolidated Balance Sheets. We are not required to post any collateral related to ~~this agreement~~these agreements and are not in breach of any financial provisions of the ~~agreement.~~agreements.

Changes in the fair value of the hedging instruments are deferred in Other comprehensive income and are reclassified as Interest expense in our Condensed Consolidated Statements of Operations in the period in which the hedged item affects earnings. In the next twelve months, we estimate that $9.2 million will be reclassified from Other comprehensive income and recorded as a decrease to interest expense.

The table below details the ~~presentation~~location in the financial statements of the realized and unrealized gain or loss ~~recognized on~~related to derivative financial instruments designated as cash flow hedges (in thousands):

For the Three Months Ended
September 30, For the Nine Months Ended
September 30,
2017 2016 2017 2016
Gain (loss) recognized in accumulated other comprehensive income on derivative financial instruments (effective portion) $ 2
$ 248
$ 92
$ (1,008 )
Loss reclassified from accumulated other comprehensive income to interest expense (effective portion) $ (155 ) $ (297 ) $ (588 ) $ (906 )
Gain recognized in Other Expense (ineffective portion) $ —
$ 19
$ —
$ —


	Three Months Ended March 31,
	2023		2022
(Loss) gain recognized in Accumulated other comprehensive loss on derivative financial instruments	$	(2,439)	$	9,813
Gain (loss) reclassified from Accumulated other comprehensive loss to Interest expense	$	1,949	$	(2,300)
Total interest expense and other finance expense presented in the Condensed Consolidated Statement of Operations in which the effects of cash flow hedges are recorded	$	20,909	$	13,439

Amounts reported in accumulated other comprehensive income related to derivative financial instruments will be reclassified to interest expense as interest payments are made on the hedged variable-rate debt. In the next twelve months, we estimate that an additional $0.4 million will be reclassified from Other Comprehensive Income and recorded as an increase to interest expense.

NOTE 68 - EQUITY

Common Stock

The Company is authorized to issue up to 500,000,000 shares of common stock, $0.01 par value per ~~share.~~share ("Common Stock"). Each outstanding share of our ~~common stock~~Common Stock entitles the holder to one vote on all matters submitted to a vote of stockholders, including the election of directors and, except as may be provided with respect to any other class or series of stock, the holders of such shares possess the exclusive voting power.

On May 9, ~~2017,~~2022, the Company and the Operating Partnership entered into an ~~underwriting~~equity distribution agreement (the ~~“Underwriting~~“Equity Distribution Agreement”) with ~~Raymond James & Associates, Inc.~~a group of underwriters as sales agents for the Company, principals and ~~Deutsche Bank Securities Inc.,~~with certain exceptions, forward sellers (collectively the “Managers”) and certain banks as forward purchasers, providing for the ~~representatives of the several underwriters named therein, relating to the issuance~~offer and sale of ~~9,000,000~~ shares of the Company’s ~~common stock, $0.01 par value per share (“~~Common ~~Stock”), at~~Stock, having a public offering price of $16.50 per share, less an underwriting discount of $0.66 per share. Pursuant to the terms of the Underwriting Agreement, the Company granted the underwriters a 30-day option to purchase up to an additional 1,350,000 shares of common stock on the same terms, which the underwriters exercised in full on May 10, 2017. The closing of the offering occurred on May 15, 2017 for net proceeds of $163.8 million, after the underwriting discount and offering-related expenses of $7.0 million.

On May 25, 2017, the Company and the Operating Partnership entered into separate sales agreements (collectively, the “Sales Agreements”) with each of Robert W. Baird & Co. Incorporated, Raymond James & Associates, Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Deutsche Bank Securities Inc., RBC Capital Markets, LLC, KeyBanc Capital Markets Inc., Canaccord Genuity Inc., Jefferies LLC, BB&T Capital Markets, a division of BB&T Securities, LLC, and BTIG, LLC (collectively, the “Sales Agents”), pursuant to which the Company may sell the Company’s shares of common stock, $0.01 par value per share, having anmaximum aggregate offering price of up to ~~$200.0 million~~$200,000,000 through or to the Managers, as the Company’s sales agents or, if applicable, as forward sellers, or directly to the Managers, as principals (the ~~“Shares”~~“2022 ATM Program”), from time to time through the Sales Agents, each acting as a sales agent and/or principal. At the same time, the Company terminated each of the sales agreements entered into in connection with its prior at-the-market offering program, which was established in August 2016 and under which 6,151,514.To date, we have not sold any shares of ~~the Company’s common stock were sold for net proceeds of approximately $89.1 million.~~

~~Pursuant to the Sales Agreements, the Shares may be offered and sold through any Sales Agent in transactions that are deemed to be “at the market” offerings as defined in Rule 415~~our Common Stock under the Securities Act of 1933, as amended, including sales made directly on the New York Stock Exchange or sales made to or through a market maker other than on an exchange or, with the prior consent of the Company, in privately negotiated transactions. Each Sales Agent will be entitled to compensation equal to up to 2.0% of the gross proceeds of the Shares sold through such Sales Agent from time to time under the related Sales Agreement. The Company has no obligation to sell any of the Shares under the Sales Agreements and may at any time suspend solicitations and offers under, or terminate, any of the Sales Agreements.2022 ATM Program.

Changes in ~~common stock~~Common Stock during the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2023 and ~~2016~~2022 were as follows:


	For the Three Months Ended March 31,
	2023	2022
Beginning shares of Common Stock outstanding	106,901,576	106,337,724


Grants under the Equity Plan	873,563	626,312



Performance share and other forfeitures	(137,193)	(3,173)
Shares retained for employee tax withholding requirements	(168,083)	—
Ending shares of Common Stock outstanding	107,469,863	106,960,863

For the
Nine Months Ended
September 30,
2017 2016
Beginning common shares outstanding 93,525,469
86,793,521
Stock Offering 10,350,000
—
Grants under the Equity Plan 366,679
446,686
Common Unit redemptions 52,808
61,056
Exercise of stock options —
37,684
Annual grants to independent directors 28,426
32,180
Common stock issued for director fees 3,553
5,851
Forfeitures (1,237 ) (406 )
Shares retained for employee tax withholding requirements (59,111 ) (61,622 )
Ending common shares outstanding 104,266,587
87,314,950

Preferred Stock

The Company is authorized to issue up to 100,000,000 shares of preferred stock, $0.01 par value per share, of which ~~90,600,000~~89,600,000 is currently undesignated, ~~3,000,000~~6,400,000 shares have been designated as ~~7.875%~~6.25% Series B Cumulative Redeemable Preferred Stock (the “Series B preferred shares”), 3,400,000 shares have been designated as 7.125% Series C Cumulative Redeemable Preferred Stock (the “Series C preferred shares”), and 3,000,000 shares have been designated as 6.45% Series DE Cumulative Redeemable Preferred Stock (the "Series ~~D preferred shares"~~E Preferred Stock") and 4,000,000 shares have been designated as 5.875% Series F Cumulative Redeemable Preferred Stock (the "Series F Preferred Stock").

The Company completed the offering of 3,000,000 Series D preferred shares on June 28, 2016 for net proceeds of $72.3 million, after the underwriting discount and offering-related expenses of $2.7 million.

~~On October 28, 2016, the Company paid $50.7 million to redeem all 2,000,000 of its outstanding Series A preferred shares at a redemption price of $25 per share plus accrued and unpaid dividends.~~

The Company's outstanding shares of preferred stock (collectively, “Preferred Shares”) rank senior to our ~~common stock~~Common Stock and on parity with each other with respect to the payment of dividends and distributions of assets in the event of a liquidation, dissolution, or winding up. The Preferred Shares do not have ~~any~~ maturity ~~date~~dates and are not subject to mandatory redemption or sinking fund requirements. The Series E Preferred Stock is redeemable by the Company at its election. The Company may not redeem the Series ~~B preferred shares, Series C preferred shares or Series D preferred shares~~F Preferred Stock prior to ~~December 11, 2017, March 20, 2018, and June 28, 2021, respectively,~~August 12, 2026, except in limited circumstances relating to the Company’s continuing qualification as a REIT or in connection with certain changes in control. ~~After those dates,~~When redeemable, the Company may, at its option, redeem the applicable Preferred Shares, in whole or from time to time in part, by payment of $25 per share, plus any accumulated, accrued and unpaid distributions up to, but not including, the date of redemption. If the Company does not exercise its rights to redeem the Preferred Shares upon certain changes in control, the holders of the Preferred Shares have the right to convert some or all of their shares into a number of the Company’s ~~common shares~~Common Stock based on a defined formula, subject to a share cap, or alternative consideration. The share cap on each share of Series ~~B preferred share~~E Preferred Stock is ~~5.6497~~3.1686 shares of ~~common stock,~~Common Stock and each share of Series ~~C preferred share~~F Preferred Stock is ~~5.1440~~5.875 shares of ~~common stock, and each Series D preferred share is 3.9216 shares of common stock,~~Common Stock, all subject to certain adjustments.

The Company pays dividends at an annual rate of ~~$1.96875~~$1.5625 for each Series ~~B preferred share, $1.78125~~E Preferred Stock and $1.46875 for each share of Series ~~C preferred share, and $1.6125 for each Series D preferred share.~~F Preferred Stock. Dividend payments are made quarterly in arrears on or about the last day of February, May, August and November of each year.

NOTE 9 - NON-CONTROLLING INTERESTS AND REDEEMABLE NON-CONTROLLING INTERESTS

Non-controlling Interests in Operating Partnership

Pursuant to the limited partnership agreement of our Operating Partnership, ~~beginning on February 14, 2012,~~ the unaffiliated third parties who hold Common Units ~~in our Operating Partnership~~ have the right to cause us to request that we redeem their Common Units in exchange for cash based upon the fair value of an equivalent number of our shares of ~~common stock~~Common Stock at the time of redemption; however, the Company has the option to redeem Common Units with shares of our ~~common stock~~Common Stock on a one-for-one basis. The number of shares of our ~~common stock~~Common Stock issuable upon redemption of Common Units may be adjusted upon the occurrence of certain events such as share dividend payments, share subdivisions or combinations. On January 13, 2022 and March 23, 2022, in connection with the NCI Transaction, the Operating Partnership issued an aggregate of 15,864,674 Common Units as partial consideration for the purchase.

At ~~September 30, 2017~~both March 31, 2023 and December 31, ~~2016,~~2022, NewcrestImage and other unaffiliated third parties collectively owned ~~343,905 and 396,713~~15,976,807 Common Units, which represents approximately 13% of the ~~Operating Partnership, respectively, representing less than a 1% limited partnership interest in the Operating Partnership for each period.~~outstanding Common Units.

We classify outstanding Common Units held by unaffiliated third parties as non-controlling interests, ~~in the Operating Partnership,~~ a component of equity in the Company’s Condensed Consolidated Balance Sheets. The portion of net income (loss) allocated to these Common Units is ~~reported~~included on the Company’s Condensed Consolidated ~~Statement~~Statements of Operations as ~~net~~Net income (loss) attributable to non-controlling ~~interests of the Operating Partnership.~~interests.

~~Leasehold Venture~~Non-controlling Interests in Consolidated Joint Ventures

At March 31, ~~2016, we owned~~2023, the Company is a partner with a majority equity interest in three joint ventures as described below. We classify the non-controlling interests in our joint ventures as a component of equity in the Company’s Condensed Consolidated Balance Sheets. The portion of net income (loss) allocated to these non-controlling interests is included on the Company’s Condensed Consolidated Statements of Operations as Net income (loss) attributable to non-controlling interests.

GIC Joint Venture

In July 2019, the Company entered into the GIC Joint Venture to acquire assets that align with the Company’s current investment strategy and criteria. The Company serves as general partner and asset manager of the GIC Joint Venture and intends to invest 51% of the equity capitalization of the limited partnership, with GIC investing the remaining 49%. The Company earns fees for providing services to the GIC Joint Venture and has the potential to earn incentive fees based on the GIC Joint Venture achieving certain return thresholds. As of March 31, 2023, the GIC Joint Venture owns 39 lodging properties containing 5,414 guestrooms in nine states.

The GIC Joint Venture owns the lodging properties through master REITs (“Master REIT”) and subsidiary REITs (“Subsidiary REIT”). All of the lodging properties owned by the GIC Joint Venture are leased to taxable REIT subsidiaries of the Subsidiary REITs (“Subsidiary REIT TRSs”). To qualify as a REIT, the Master REIT and each Subsidiary REIT must meet all of the REIT requirements provided in the Internal Revenue Code. Taxable income related to the Subsidiary REIT TRSs is subject to federal, state and local income taxes at applicable tax rates.

Brickell Joint Venture

In June 2022, the Company entered into the Brickell Joint Venture to facilitate the exercise of the Initial Purchase Option to acquire a 90% equity interest in the AC/Element Hotel. Our joint venture partner, C-F Brickell, owns the remaining 10% equity interest in the Brickell Joint Venture. The Company has an option to purchase the remaining 10% equity interest in the Brickell Joint Venture from C-F Brickell in December 2026 with the exercise of a second purchase option at its market value on the exercise date. The Company serves as the managing member of the Brickell Joint Venture.

Onera Joint Venture

In October 2022, the Company entered into a joint venture ~~that owned~~with Onera (the "Onera Joint Venture"), developers of alternative accommodation properties, with the acquisition of a 90% equity interest in the Onera Joint Venture for $5.2 million in cash, plus additional contingent consideration limited to a maximum of $1.8 million, payable to the seller based on performance of the property for the 12-month period ending July 31, 2023. The Onera Joint Venture owns a 100% fee simple interest in ~~a hotel~~real property and ~~we also owned~~improvements located in Fredericksburg, Texas consisting of 11 glamping lodging units and a ~~minority interest in a related joint venture (“Leasehold Venture”)~~6.4-acre parcel of

undeveloped land that ~~held a leasehold interest~~will be developed as phase two of the lodging site in the ~~property. On June 30, 2016, our joint venture partner in~~future. The Company serves as the ~~Leasehold Venture exercised a put option to sell its joint venture interest in the Leasehold Venture to us for $0.4 million. We finalized the transaction in July 2016 and we now own 100%~~managing member of the ~~fee simple interest~~Onera Joint Venture.

Redeemable Non-controlling Interests

In connection with the NCI Transaction, Summit Hotel GP, LLC, a wholly-owned subsidiary of the Company and ~~leasehold interest~~the sole general partner of the Operating Partnership, on its own behalf as general partner of the Operating Partnership and on behalf of the limited partners of the Operating Partnership, on January 13, 2022, entered into the Tenth Amendment (the “Tenth Amendment”) to the First Amended and Restated Agreement of Limited Partnership of the Operating Partnership, to provide for the issuance of up to 2,000,000 Series Z Preferred Units. The Series Z Preferred Units rank on a parity with the Operating Partnership’s Series E and Series F Preferred Units and holders will receive quarterly distributions at a rate of 5.250% per year. From issuance until the tenth anniversary of their issuance, the Series Z Preferred Units will be redeemable at the holder’s request at any time, or in connection with a change of control of the ~~hotel property effective July~~Company, for, at the Company’s election, cash or shares of the Company’s 5.250% Series Z Cumulative Perpetual Preferred Stock (which will be designated and authorized following notice of redemption by holder of the Series Z Preferred Units) on a one-for-one basis. After the fifth anniversary of their issuance, the Company may redeem the Series Z Preferred Units for cash at a redemption amount of $25 per unit. For a 90-day period immediately following both the tenth and the eleventh anniversaries of their issuance or in connection with a change of control of the Company, the Series Z Preferred Units will be redeemable at the holder’s request for cash at a redemption amount of $25 per unit. On January 13, 2022 and March 23, 2022, in connection with the NCI Transaction, the Operating Partnership issued an aggregate of 2,000,000 Series Z Preferred Units as partial consideration for the purchase. At March 31, ~~2016.~~2023, the redeemable Series Z Preferred Units issued in connection with the NCI Transaction are recorded as temporary equity and reflected as Redeemable non-controlling interests on our Consolidated Condensed Balance Sheet.

NOTE 710 - FAIR VALUE MEASUREMENT

The following table presents information about our financial instruments measured at fair value on a recurring basis at ~~September 30, 2017~~March 31, 2023 and December 31, ~~2016.~~2022. In instances in which the inputs used to measure fair value fall into different levels of the fair value hierarchy, we classify assets and liabilities based on the lowest level of input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability.

Disclosures concerning financial instruments measured at fair value are as follows (in thousands):

Fair Value Measurements at September 30, 2017 using
Level 1 Level 2 Level 3 Total
Liabilities:

Interest rate swaps $ —
$ 438
$ —
$ 438


	Fair Value Measurements at March 31, 2023 using
	Level 1		Level 2		Level 3		Total
Assets:
Interest rate swaps	$	—	$	12,454	$	—	$	12,454
Purchase options related to real estate loans	—		—		931		931


	Fair Value Measurements at December 31, 2022 using
	Level 1		Level 2		Level 3		Total
Assets:
Interest rate swaps	$	—	$	16,841	$	—	$	16,841

The Onera Purchase Option does not have a readily determinable fair value. The fair value was estimated using the Black-Scholes model and was based on unobservable inputs for which there is little or no market information available. As such, we were required to develop assumptions to determine the fair value of the Onera Purchase Option as follows (dollar amounts in thousands):



Exercise price	$	8,206
First option exercise date (1)	10/1/2024
Expected volatility	52.20		%
Risk free rate	4.15		%
Expected annualized equity dividend yield	—		%

(1)The first option exercise date is the date used for estimating the fair value of the purchase option. The Onera Purchase Option is exercisable when the lodging facility is fully constructed and open for business and expires one year from the date that it is initially exercisable.

All of our ~~hotel~~lodging properties (with the exception of the Onera Joint Venture property) operate under franchise agreements with major hotel franchisors. The terms of our franchise agreements generally range from 10 to 20 years with various extension provisions. Each franchisor receives franchise fees ranging from 2% to 6% of each ~~hotel~~lodging property’s gross revenue, and some agreements require that we pay marketing fees of up to 4% of gross revenue. In addition, some of these franchise agreements require that we deposit a percentage of the hotel property’s gross revenue, generally not more than 5%, into a reserve fund for capital expenditures. We also pay fees to our franchisors for services ~~such as~~related to reservation and information systems. ~~During the three months ended September 30, 2017 and 2016, we~~We expensed fees related to our franchise agreements of ~~$11.4~~$13.0 million and ~~$9.3~~$10.1 million ~~respectively. During~~for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2023 and ~~2016, we expensed fees related to our franchise agreements of $30.8 million and $28.3 million,~~2022, respectively.

Our ~~hotel~~lodging properties operate pursuant to management agreements with various professional third-party management companies. The terms of our management agreements range from ~~three~~month-to-month to 25twenty-five years with various extension provisions. Each management company receives a base management fee, ~~generally~~which is a percentage of total ~~hotel~~lodging property revenues. In some cases, there are also monthly fees for certain services, such as accounting, based on the number of guestrooms. Generally, there are also incentive fees based on attaining certain financial thresholds. Management fee expenses were $4.8 million and $3.8 million for the three months ended ~~September 30, 2017~~March 31, 2023 and ~~2016 were $4.2 million and $4.2 million, respectively. Management fee expenses for the nine months ended September 30, 2017 and 2016 were $14.0 million and $14.9 million,~~2022, respectively.

We are involved from time to time in litigation arising in the ordinary course of business. WeThere are currently involved in litigation related to the settlement of a contractual obligation related to the purchase of a hotel property in 2012. We have accrued the amount of our expected liability to settle the contractual obligation at September 30, 2017. We are not currently aware of anyno pending legal actions ~~against us~~ that we believe would have a material effect on our financial ~~condition~~position or results of operations.

Our currently outstanding equity-based awards were issued under the Summit Hotel Properties, Inc. 2011 Equity Incentive Plan, as amended and restated effective May 13, 2021 (the "Equity Plan"), which provides for the granting of stock options, stock appreciation rights, restricted stock, restricted stock units, dividend equivalent rights, and other equity-based awards or incentive awards.

~~Stock Options Granted Under our Equity Plan~~

~~On March 6, 2017, we granted~~The following table summarizes time-based restricted stock award activity under our Equity Plan for the three months ended March 31, 2023:


	Number of Shares	Weighted-Average Grant Date Fair Value		Aggregate Current Value
		(per share)		(in thousands)
Non-vested at December 31, 2022	654,804	$	9.85	$	5,909
Granted	447,656	7.66
Vested	(193,144)	9.71

Non-vested at March 31, 2023	909,316	$	8.83	$	6,229

The awards ~~for 16,079 shares of common stock~~granted to ~~certain of~~ our non-executive ~~employees. The awards~~employees prior to 2022 vest over a four-year period based on ~~continued~~continuous service (20% on ~~March 9, 2018, 2019~~the first, second and ~~2020,~~third anniversary of the grant date and 40% on ~~March 9, 2021)~~the fourth anniversary of the grant date).

The awards granted to our executive officers generally vest over a three-year period based on continuous service (25% on the first and second anniversary of the grant date and 50% on the third anniversary of the grant date) or in certain circumstances upon a change in control.

The holders of these awards have the right to vote ~~the related~~their unvested restricted shares of ~~common stock~~Common Stock and receive all dividends declared and paid whether or not vested. The fair value of time-based restricted stock awards granted is calculated based on the market value of our ~~common stock~~Common Stock on the date of grant.

OnThe following table summarizes performance-based restricted stock activity under the Equity Plan for the three months ended March ~~6, 2017, we granted~~31, 2023:

(1) The amounts included in this column represent the expected future value of the performance-based restricted stock awards ~~for 180,039 shares of common stock to our executive officers. On April 18, 2017, we granted a performance-based restricted stock award for 30,322 shares of common stock to an executive officer.~~ calculated using the Monte Carlo simulation valuation model.

Our performance-based restricted stock awards are market-based awards and are accounted for based on the fair value of our ~~common stock~~Common Stock on the grant date. The fair value of the performance-based restricted stock awards granted was estimated using a Monte Carlo simulation valuation model. These awards ~~generally~~cliff vest on the third anniversary of the grants based on our ~~percentile ranking~~total shareholder return relative to the total shareholder return of companies within the ~~SNL~~Dow Jones U.S. ~~REIT Hotel~~Hotels Index at the end of the period ~~beginning on March 6, 2017 and ending on the earlier of March 6,~~

The number of shares the executive officers may earn under these awards range from zero shares to twice the number of shares granted based on our percentile ranking within the index at the end of the measurement period. In addition, a portion of the performance-based shares may be earned based on the Company's absolute total shareholder return calculated during the performance period.

The holders of these ~~grants~~awards have the right to vote ~~the granted~~their unvested restricted shares of ~~common stock~~Common Stock and any dividends declared ~~will be accumulated~~accrue and will be subject to the same vesting conditions as the awards. Further, if additional shares are earned based on our percentile ranking within the index, dividend payments will be issued as if the additional shares had been held throughout the measurement period.

~~(1) The amounts included in this column represent the expected future value of the performance-based restricted stock awards calculated using the Monte Carlo simulation valuation model.~~

~~Director Stock Awards Made Pursuant to Our Equity Plan~~

Equity-based compensation expense included in Corporate ~~General~~general and ~~Administrative~~administrative expenses in the Condensed Consolidated Statements of Operations for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2023 and ~~2016~~2022 was as follows (in thousands):


	For the Three Months Ended March 31,
	2023		2022
Time-based restricted stock	$	690	$	992
Performance-based restricted stock	778		2,674
Director stock	—		32
	$	1,468	$	3,698

For the
Three Months Ended
September 30,

For the
Nine Months Ended
September 30,
2017 2016 2017 2016
Time-based restricted stock $ 541
$ 419
$ 1,607
$ 1,176
Performance-based restricted stock 849
576
2,333
1,532
Stock options —
—
—
55
Director stock 99
25
543
439
$ 1,489
$ 1,020
$ 4,483
$ 3,202
The Company's former Executive Vice President and Chief Operating Officer departed the Company in March 2022. The Company recorded $1.3 million of additional stock-based compensation expense during the period related to the modification of certain stock award agreements. This amount was comprised of $0.4 million related to time-based restricted stock awards and $0.9 million related to performance-based restricted stock awards.

Additionally, during the three months ended March 31, 2022, we granted a new member of our Board of Directors 3,234 shares of fully vested shares of our Common Stock at $9.94 per share.

We recognize equity-based compensation expense ratably over the vesting periods. The amount of expense may be subject to adjustment in future periods due to a change in the forfeiture assumptions.

Unrecognized equity-based compensation expense for all non-vested awards pursuant to our Equity Plan was ~~$8.1~~$14.5 million at ~~September 30, 2017~~March 31, 2023 and will be recorded as follows (in thousands):

Total 2017 2018 2019 2020 2021
Time-based restricted stock $ 3,293
$ 541
$ 1,603
$ 949
$ 190
$ 10
Performance-based restricted stock 4,826
850
2,374
1,401
201
—
$ 8,119
$ 1,391
$ 3,977
$ 2,350
$ 391
$ 10

We have elected to be taxed as a REIT. As a REIT, we are generally not subject to corporate-level income taxes on taxable income we distribute to our shareholders.

Income taxes for the interim periods presented have been included in our Condensed Consolidated Financial Statements on the basis of an estimated annual effective tax rate. Our effective tax rate is affected by the mix of earnings and losses by taxing jurisdictions. Our earnings, other than fromrelated to our TRS ~~are not generally~~Lessees is subject to federal, state and local taxes at applicable corporate tax rates. Our consolidated tax provision includes the income tax provision related to the operations of the TRS Lessees as well as state ~~corporate~~and local income taxes ~~due~~related to our REIT election, provided that we distribute 100% of our taxable income to our shareholders. However, there are a limited number of local and state jurisdictions that tax the taxable income of the Operating Partnership. Accordingly, we provide for income taxes in these jurisdictions for the Operating Partnership.

Where required, we account for federal and state income taxes using the asset and liability method. Deferred tax assets and liabilities are recognized for: i) the future tax consequences attributable to differences between carrying amounts of existing assets and liabilities based on GAAP and the respective carrying amounts for tax purposes, and ii) operating losses and tax-credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date of the change in tax rates. However, deferred tax assets are recognized only to the extent that it is more likely than not they will be realized based on consideration of available evidence. Valuation allowances are provided if, based upon the weight of the available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.

We consider all available evidence, both positive and negative, to determine whether, based on the weight of that evidence, a valuation allowance for deferred tax assets is needed. Certain of our TRS Lessees have incurred operating losses and are in a three-year cumulative loss measured on a rolling twelve quarter basis. A cumulative loss is significant negative evidence that the realizability of our deferred tax assets at March 31, 2023 is not reasonably assured. Therefore, we have recorded a valuation allowance against substantially all our deferred tax assets at March 31, 2023.

The Company recorded an income tax benefit ~~related to net income from continuing operations~~ of ~~$0.2~~$0.5 million and ~~$1.2~~$2.0 million for the three months ended ~~September 30, 2017~~March 31, 2023 and ~~2016, respectively,~~2022, respectively.

We file U.S. and anstate income tax ~~expense related~~returns in jurisdictions with varying statutes of limitations. In general, we are not subject to ~~net income from continuing operations~~tax examinations by tax authorities for years before 2018. In the normal course of ~~$0.6 million~~business, we are subject to examination by federal, state, and ~~$0.5 million for the nine months ended September 30, 2017 and 2016, respectively.~~

We ~~apply the two-class method~~consider all highly liquid investments purchased with an original maturity of ~~computing earnings per share, which requires the calculation~~three months or less to be cash equivalents. Restricted cash consists of ~~separate earnings per share amounts~~certain funds maintained in escrow for ~~our non-vested time-based restricted stock awards with non-forfeitable dividends~~property taxes, insurance, and for our common stock. Our non-vested time-based restricted stock awards with non-forfeitable rights to dividends are considered securities which participate in undistributed earnings with common stock. Under the two-class computation method, net losses are not allocated to participating securities unless the holder of the security has a contractual obligation to share in the losses. Our non-vested time-based restricted stock awards with non-forfeitable dividends do not have such an obligation so they are not allocated losses.certain capital expenditures.

restricted ~~stock awards of 464,924 shares and 449,027 shares~~cash reserves.

Supplemental cash flow information for the three months ended ~~September 30, 2017~~March 31, 2023 and 2016, respectively, and 464,924 shares and 449,027 shares for the nine months ended September 30, 2017 and 2016, respectively, which were excluded from the denominator of the diluted earnings per share2022 is as ~~the awards had not achieved the requisite performance conditions for vesting at each period end.~~follows:


	Three Months Ended March 31,
	2023		2022

Cash payments for interest	$	21,436	$	11,213
Accrued acquisitions and improvements to lodging properties	$	5,384	$	3,749

Cash payments for income taxes, net of refunds	$	110	$	60
Debt assumed to complete acquisition of properties	$	—	$	335,205
Assumption of leases and other assets and liabilities in connection with the acquisition of a portfolio of properties	$	—	$	9,206


Insurance premium financing	$	10,877	$	—

Non-controlling interests in operating partnership issued to complete acquisition of a portfolio of properties	$	—	$	157,513
Redeemable non-controlling interests in operating partnership issued to complete acquisition of a portfolio of properties	$	—	$	50,000

On ~~October 30, 2017,~~April 27, 2023, our Board of Directors declared quarterly cash dividends and distributions of $0.06 per share on our Common Stock and per Common Unit of the Operating Partnership and cash dividends of ~~$0.17~~$0.390625 per share of ~~common stock, $0.4921875 per share of 7.875%~~6.25% Series ~~B Cumulative Redeemable Preferred Stock, $0.4453125 per share of 7.125% Series C~~E Cumulative Redeemable Preferred Stock and ~~$0.403125~~$0.3671875 per share of ~~6.45%~~5.875% Series DF Cumulative Redeemable Preferred Stock. ~~These~~The Board of Directors also declared on behalf of the Operating Partnership, a cash distribution of $0.328125 per share of the Operating Partnership's unregistered 5.25% Series Z Cumulative Perpetual Preferred Units. The dividends and distributions are payable on ~~November 30, 2017~~May 31, 2023 to ~~stockholders~~holders of record ~~on November 16, 2017.~~as of May 17, 2023.

Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with our audited Consolidated Financial Statements and Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Form 10-K for the year ended December 31, ~~2016~~2022 and our unaudited ~~interim~~ Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q.

Unless stated otherwise or the context otherwise requires, references in this report to “we,” “our,” “us,” “our company” or “the company” mean Summit Hotel Properties, Inc. and its consolidated subsidiaries.

Cautionary Statement about Forward-Looking Statements

This report contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and include this statement for purposes of complying with these safe harbor provisions. Forward-looking statements, which are based on certain assumptions and describe our future plans, strategies and expectations, are generally identifiable by use of the words “may,” “could,” “expect,” “intend,” “plan,” “seek,” “anticipate,” “believe,” “estimate,” “predict,” “forecast,” “project,” “potential,” “continue,” “likely,” “will,” “would” or similar expressions. Forward-looking statements in this report include, among others, statements about our business strategy, including acquisition and development strategies, industry trends, estimated revenues and expenses, ability to realize deferred tax assets and expected liquidity needs and sources (including capital expenditures and the ability to obtain financing or raise capital). You should not rely on forward-looking statements since they involve known and unknown risks, uncertainties and other factors that are, in some cases, beyond our control and which could materially affect actual results, performances or achievements. Factors that may cause actual results to differ materially from current expectations include, but are not limited to:

•the effects of the novel Coronavirus ("COVID-19") and its variants (the "Pandemic") and other infectious disease outbreaks;

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

•financing risks, including the risk of leverage and the corresponding risk of default on our existing indebtedness and potential inability to refinance or extend the maturities of our existing ~~indebtedness as well as the risk of~~ indebtedness;

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

•global, national, regional and local economic and geopolitical ~~conditions;~~conditions and events, including wars or potential hostilities, such as terrorist attacks, that may affect travel;

~~levels of spending for business and leisure travel, as well as consumer confidence;~~

•the effect of competing alternative accommodations on our business;

•levels of spending for business and leisure travel;

•macroeconomic conditions related to, and our ability to manage, inflationary pressures for commodities, labor and other costs of our business as well as consumer purchasing power and overall behavior, or a potential recessionary environment, which could adversely affect our costs, liquidity, consumer confidence, and demand for travel and lodging;

•adverse changes in, ~~or declining rates of growth with respect to,~~ occupancy, average daily rate (“ADR”) and revenue per available room (“RevPAR”) and other ~~hotel~~lodging property operating metrics;

~~hostilities, including future terrorist attacks, or fear of hostilities that affect travel;~~

•the degree and nature of our competition;

•increased interest ~~rates and~~rates;

•increased operating costs, including but not limited to labor costs;

•increased renovation costs, which may cause actual renovation costs to exceed our current estimates;

•supply-chain disruption, which may reduce access to operating supplies or construction materials and increase related costs;

•changes in zoning ~~laws and significant~~ laws;

•increases in real property ~~taxes;~~taxes that are significantly higher than our expectations;

•risks associated with ~~potential hotel~~lodging property acquisitions, including the ability to ramp up and stabilize newly acquired ~~hotels~~lodging properties with limited or no operating history or that require substantial amounts of capital improvements for us to earn ~~stabilized~~ economic returns consistent with our expectations at the time of acquisition;

•risks associated with dispositions of ~~hotel properties;~~lodging properties, including our ability to successfully complete the sale of lodging properties under contract to be sold, including the risk that the purchaser may not have access to the capital needed to complete the purchase;

•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;

•the recognition of taxable gains from the sale of ~~hotel~~lodging properties as a result of the inability to complete certain like-kind exchanges in accordance with Section 1031 of the Internal Revenue Code of 1986, as amended (the “IRC”);

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

•our failure to maintain our qualification as a real estate investment trust (“REIT”) under the IRC;

•changes in our business or investment strategy;

•availability, terms and deployment of capital;

•general volatility of the capital markets and the market price of our common ~~stock;~~stock ("Common Stock");

•environmental uncertainties and risks related to natural disasters;

•our ability to recover fully under third-party indemnities or our existing insurance policies for insurable losses and our ability to maintain adequate or full replacement cost ~~“all-risk”~~"all-risk" property

•our ability to obtain insurance policies on our properties on commercially reasonable terms;

•the effect on our business or customer confidence of a data breach or significant disruption of ~~hotel~~property operator information technology networks as a result of ~~cyber attacks beyond~~cyber-attacks that are greater than insurance coverages or indemnities from service providers;

•our ability to effectively manage our joint ventures with our joint venture partners;

•current and future changes to the IRC;

•our ability to continue to effectively enhance our Environmental, Social and Governance ("ESG") program to achieve expected social, environment and governance objectives and goals; and

•the other factors discussed under the heading ~~“Risk Factors”~~"Risk Factors" included in our Annual Report on Form 10-K for the year ended December 31, ~~2016.~~

Accordingly, there is no assurance that our expectations will be realized. Except as otherwise required by the federal securities laws, we disclaim any ~~obligations~~obligation or undertaking to publicly release any updates or revisions to any forward-looking statement contained herein (or elsewhere) to reflect any change in our expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.

~~The vast majority~~ Substantially all of our ~~hotels~~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, 2023, we owned, directly and indirectly, approximately 87.0% 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 Series E and Series F preferred units of limited partnership interest. NewcrestImage Image Holdings, LLC owns all of the issued and outstanding 5.25% Series Z Cumulative Perpetual Preferred Units (Liquidation preference $25 per unit) of the Operating Partnership ("Series Z Preferred Units"), which was issued as part of the NCI Transaction (described in "Note 3 - Investments in Lodging Property, net" to the Condensed Consolidated Financial Statements.). We collectively refer to preferred units of limited partnership interests of our Operating Partnership as "Preferred Units."

At March 31, 2023, our portfolio consisted of 103 lodging properties with a total of 15,334 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 March 31, 2023, we own 100% of the outstanding equity interests in 61 of our 103 lodging properties. We own a 51% controlling interest in 39 lodging properties through a joint venture that was formed in July 2019 with GIC (the “GIC Joint Venture”), Singapore’s sovereign wealth fund. 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.

We have elected to be taxed as a ~~REIT~~real estate investment trust ("REIT") for federal income tax purposes commencing with our short taxable year ended December 31, 2011. To qualify as a REIT, we cannot operate or manage our ~~hotels.~~lodging properties. Accordingly, all of our ~~hotels~~lodging properties are leased to ~~wholly-owned subsidiaries (our “TRS lessees”) of Summit Hotel TRS, Inc.,~~ our taxable REIT ~~subsidiary.~~subsidiaries ("TRS Lessees"). All of our ~~hotels~~lodging properties are operated pursuant to ~~hotel~~lodging property management agreements between our TRS ~~lessees~~Lessees and professional, third-party ~~hotel~~lodging property management companies that are not affiliated with us as follows:


Management Company	Number of Properties	Number of Guestrooms
Affiliates of Aimbridge Hospitality, including Interstate Management Company, LLC	62	9,166
OTO Development, LLC	15	2,164

Stonebridge Realty Advisors, Inc. and affiliates	8	1,143
Affiliates of Marriott, including Courtyard Management Corporation, SpringHill SMC Corporation and Residence Inn by Marriott, Inc.	6	973
Crestline Hotels & Resorts, LLC	4	570
White Lodging Services Corporation	2	453
Hersha Hospitality Management	2	338




Concord Hospitality Enterprises	2	264
InterContinental Hotel Group Resources, Inc., an affiliate of IHG	1	252
Blink Data Services, LLC	1	11
Total	103	15,334

Our typical ~~hotel~~lodging property management agreement requires us to pay a base fee to our ~~hotel~~lodging property manager calculated as a percentage of ~~hotel~~lodging property revenues. In addition, our ~~hotel~~typical lodging property management agreements generally provide that the ~~hotel~~lodging property manager can earn an incentive fee for ~~revenue or~~hotel-level Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA") over certain thresholds ~~or based on~~of a required investment return ~~over the owner's preferred return.~~to us. Our TRS ~~lessees~~Lessees may employ other ~~hotel~~lodging property managers in the future. We currently do ~~not, and will~~ not have any ownership or economic interest in any of the ~~hotel~~lodging property management companies engaged by our TRS ~~lessees.~~Lessees. However, we have a purchase option to acquire a 10% to 15% equity interest in the entity that owns the Onera brand, which is an affiliate of Blink Data Services, LLC., if we reach certain investment thresholds in Onera-branded properties.

Our revenues are derived from ~~hotel~~lodging property operations and consist of room revenue, food and beverage revenue and other ~~hotel~~lodging property operations revenue. ~~As a result of~~Revenues from our ~~focus on select-service hotels, substantially all of our revenues are related to the sales of hotel guestrooms. Our~~ other ~~hotel~~lodging property operations ~~revenue consists~~consist of ancillary revenues related to ~~food and beverage sales,~~ meeting rooms and other ~~guest~~customer services provided at certain of our ~~hotel~~lodging properties.



Maryland						27-2962512
(State or other jurisdiction						(I.R.S. Employer Identification No.)
of incorporation or organization)



Large accelerated filer	x☒	Accelerated filer	o☐
Non-accelerated filer	o ☐	Smaller reporting company	o☐
~~(Do not check if a smaller reporting company)~~		Emerging growth company	o☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.			o☐



		Page
PART I — FINANCIAL INFORMATION

Item 1.	Financial Statements	1

	Condensed Consolidated Balance Sheets — ~~September 30, 2017 (Unaudited)~~March 31, 2023 (Unaudited) and December 31, ~~2016~~2022	1
	Condensed Consolidated Statements of Operations ~~(Unaudited)~~(U naudited) —Three Mont hs Ended March 31, 2023and ~~Nine Months Ended September 30, 2017 and 2016~~2022	2
	Condensed Consolidated Statements of ~~Comprehensive~~Comprehensiv e Income ~~(Unaudited)~~ (Loss ) (U naudited)—Three Mon ths Ended March 31, 2023and ~~Nine Months Ended September 30, 2017 and 2016~~ 2022	3
	Condensed Consolidated Statements of Changes in Equity ~~(Unaudited)~~ and Redeemable Non-controlling Interests (U naudited) — ~~Nine Months~~Three Mo nths Ended ~~September 30, 2017~~March 31, 2023 and ~~2016~~2022	4
	Condensed Consolidated Statements of Cash Flows ~~(Unaudited)~~ (U naudited) — ~~Nine Months~~Three Mo nths Ended ~~September 30, 2017~~March 31, 2023 and ~~2016~~2022	5
	Notes to the Condensed Consolidated Financial Statements (U naudited)	6

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2931

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	4647

Item 4.	Controls and Procedures	4648

PART II — OTHER INFORMATION

Item 1.	Legal Proceedings	4749

Item 1A1A..	Risk Factors	4749

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	4749

Item 3.	Defaults Upon Senior Securities	4749

Item 4.	Mine Safety Disclosures	4749

Item 5.	Other Information	4749

Item 6.	Exhibits	4850


	March 31, 2023		December 31, 2022
	(Unaudited)
ASSETS
Investments in lodging property, net	$	2,776,947	$	2,792,552


Assets held for sale, net	79,172		78,576

Cash and cash equivalents	60,678		51,255
Restricted cash	11,153		10,553
Right-of-use assets, net	35,697		35,023
Trade receivables, net	24,070		21,015
Prepaid expenses and other	19,348		8,378

Deferred charges, net	6,932		7,074

Other assets	14,260		17,844
Total assets	$	3,028,257	$	3,022,270

LIABILITIES, REDEEMABLE NON-CONTROLLING INTERESTS AND EQUITY
Liabilities:
Debt, net of debt issuance costs	$	1,467,123	$	1,451,796
Lease liabilities, net	26,309		25,484
Accounts payable	5,460		5,517
Accrued expenses and other	86,499		81,304

Total liabilities	1,585,391		1,564,101
Commitments and contingencies (Note 11)
Redeemable non-controlling interests	50,219		50,219
Equity:
Preferred stock, $0.01 par value per share, 100,000,000 shares authorized:


6.25% Series E - 6,400,000 shares issued and outstanding at March 31, 2023 and December 31, 2022 (aggregate liquidation preference of $160,861 at March 31, 2023 and December 31, 2022, respectively)	64		64
5.875% Series F - 4,000,000 shares issued and outstanding at March 31, 2023 and December 31, 2022 (aggregate liquidation preference of $100,506 at March 31, 2023 and December 31, 2022, respectively)	40		40
Common stock, $0.01 par value per share, 500,000,000 shares authorized, 107,469,863 and 106,901,576 shares issued and outstanding at March 31, 2023 and December 31, 2022, respectively	1,075		1,069
Additional paid-in capital	1,232,457		1,232,302
Accumulated other comprehensive income	10,270		14,538
Accumulated deficit and distributions in excess of retained earnings	(297,687)		(288,200)
Total stockholders’ equity	946,219		959,813


Non-controlling interests	446,428		448,137
Total equity	1,392,647		1,407,950
Total liabilities, redeemable non-controlling interests and equity	$	3,028,257	$	3,022,270



	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2017			2016			2017			2016
Revenues:
Room	$	127,246		$	110,777		$	358,110		$	340,657
Other hotel operations revenue	9,341			7,559			25,522			22,956
Total revenues	136,587			118,336			383,632			363,613
Expenses:
Hotel operating expenses:
Room	33,404			28,705			91,221			82,959
Other direct	16,846			15,513			49,255			48,596
Other indirect	35,820			29,312			100,297			92,870
Total hotel operating expenses	86,070			73,530			240,773			224,425
Depreciation and amortization	23,594			17,887			62,052			53,715
Corporate general and administrative	4,550			4,388			14,998			14,358
Hotel property acquisition costs	—			527			354			2,809
Loss on impairment of assets	—			577			—			577
Total expenses	114,214			96,909			318,177			295,884
Operating income	22,373			21,427			65,455			67,729
Other income (expense):
Interest expense	(7,768		)	(6,626		)	(21,486		)	(21,232		)
Gain on disposal of assets, net	7,725			10,491			43,531			49,997
Other income (expense), net	(116		)	661			2,847			1,854
Total other income (expense)	(159		)	4,526			24,892			30,619
Income from continuing operations before income taxes	22,214			25,953			90,347			98,348
Income tax benefit (expense)	231			1,245			(613		)	(461		)
Net income	22,445			27,198			89,734			97,887
Less - Income attributable to non-controlling interests in operating partnership	(55		)	(115		)	(289		)	(454		)
Net income attributable to Summit Hotel Properties, Inc.	22,390			27,083			89,445			97,433
Preferred dividends	(4,200		)	(4,993		)	(12,600		)	(13,287		)
Net income attributable to common stockholders	$	18,190		$	22,090		$	76,845		$	84,146
Earnings per share:
Basic	$	0.18		$	0.25		$	0.78		$	0.97
Diluted	$	0.17		$	0.25		$	0.78		$	0.96
Weighted average common shares outstanding:
Basic	103,253			86,492			98,105			86,428
Diluted	103,632			87,401			98,471			87,319


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



	September 30, 2017			December 31, 2016
	(Unaudited)
ASSETS
Investment in hotel properties, net	$	1,902,949		$	1,545,122
Investment in hotel properties under development	18,754			—
Land held for development	2,942			5,742
Assets held for sale	1,193			62,695
Investment in real estate loans, net	—			17,585
Cash and cash equivalents	52,451			34,694
Restricted cash	28,933			24,881
Trade receivables, net	20,899			11,807
Prepaid expenses and other	5,294			6,474
Deferred charges, net	4,669			3,727
Other assets	5,794			5,778
Total assets	$	2,043,878		$	1,718,505
LIABILITIES AND EQUITY
Liabilities:
Debt, net of debt issuance costs	$	772,275		$	652,414
Accounts payable	7,257			4,623
Accrued expenses and other	56,306			46,880
Derivative financial instruments	438			1,118
Total liabilities	836,276			705,035

Commitments and contingencies (Note 8)

Equity:
Preferred stock, $.01 par value per share, 100,000,000 shares authorized:
7.875% Series B - 3,000,000 shares issued and outstanding at September 30, 2017 and December 31, 2016 (aggregate liquidation preference of $75,492 at September 30, 2017 and $75,509 at December 31, 2016)	30			30
7.125% Series C - 3,400,000 shares issued and outstanding at September 30, 2017 and December 31, 2016 (aggregate liquidation preference of $85,505 at September 30, 2017 and $85,522 at December 31, 2016)	34			34
6.45% Series D - 3,000,000 shares issued and outstanding at September 30, 2017 and December 31, 2016 (aggregate liquidation preference of $75,403 at September 30, 2017 and $75,417 at December 31, 2016)	30			30
Common stock, $.01 par value per share, 500,000,000 shares authorized, 104,266,587 and 93,525,469 shares issued and outstanding at September 30, 2017 and December 31, 2016, respectively	1,043			935
Additional paid-in capital	1,178,896			1,011,412
Accumulated other comprehensive loss	(300		)	(977		)
Retained earnings (deficit) and distributions	24,783			(1,422		)
Total stockholders’ equity	1,204,516			1,010,042
Non-controlling interests in operating partnership	3,086			3,428
Total equity	1,207,602			1,013,470
Total liabilities and equity	$	2,043,878		$	1,718,505


	Redeemable Non-controlling Interests		Shares of Preferred Stock	Preferred Stock		Shares of Common Stock	Common Stock		Additional Paid-In Capital		Accumulated Other Comprehensive Income (Loss)		Accumulated Deficit and Distributions		Total Shareholders’ Equity		Non-controlling Interests		Total Equity
Balance at December 31, 2022	$	50,219	10,400,000	$	104	106,901,576	$	1,069	$	1,232,302	$	14,538	$	(288,200)	$	959,813	$	448,137	$	1,407,950

Adjustment of redeemable non-controlling interests to redemption value	657		—	—		—	—		—		—		(657)		(657)		—		(657)

Sale of non-controlling interests in joint venture	—		—	—		—	—		—		—		—		—		1,353		1,353



Dividends and distributions on common stock and common units	—		—	—		—	—		—		—		(4,259)		(4,259)		(639)		(4,898)
Preferred dividends and distributions	(657)		—	—		—	—		—		—		(3,970)		(3,970)		—		(3,970)
Joint venture partner distributions	—		—	—		—	—		—		—		—		—		(790)		(790)
Equity-based compensation	—		—	—		736,370	7		1,461		—		—		1,468		—		1,468
Shares of common stock acquired for employee withholding requirements	—		—	—		(168,083)	(1)		(1,282)		—		—		(1,283)		—		(1,283)
Other	—		—	—		—	—		(24)		—		—		(24)		(144)		(168)
Other comprehensive loss	—		—	—		—	—		—		(4,268)		—		(4,268)		(120)		(4,388)
Net loss	—		—	—		—	—		—		—		(601)		(601)		(1,369)		(1,970)
Balance at March 31, 2023	$	50,219	10,400,000	$	104	107,469,863	$	1,075	$	1,232,457	$	10,270	$	(297,687)	$	946,219	$	446,428	$	1,392,647

Balance at December 31, 2021	$	—	10,400,000	$	104	106,337,724	$	1,063	$	1,225,184	$	(15,639)	$	(262,639)	$	948,073	$	159,119	$	1,107,192
Redeemable non-controlling interests in operating partnership issued for the acquisition of a portfolio of lodging properties	50,000		—	—		—	—		—		—		—		—		—		—
Adjustment of redeemable non-controlling interests to redemption value	555		—	—		—	—		—		—		(555)		(555)		—		(555)
Non-controlling interests in operating partnership issued for the acquisition of a portfolio of lodging properties	—		—	—		—	—		—		—		—		—		157,513		157,513
Sale of non-controlling interests in joint venture	—		—	—		—	—		—		—		—		—		674		674
Contributions by non-controlling interest in joint venture	—		—	—		—	—		1,218		—		—		1,218		202,485		203,703



Preferred dividends and distributions	(335)		—	—		—	—		—		—		(3,970)		(3,970)		—		(3,970)

Equity-based compensation	—		—	—		623,139	6		3,692		—		—		3,698		—		3,698


Other comprehensive income	—		—	—		—	—		—		10,736		—		10,736		1,377		12,113
Net loss	—		—	—		—	—		—		—		(7,854)		(7,854)		(1,119)		(8,973)
Balance at March 31, 2022	$	50,220	10,400,000	$	104	106,960,863	$	1,069	$	1,230,094	$	(4,903)	$	(275,018)	$	951,346	$	520,049	$	1,471,395



~~Classification~~		~~Estimated Useful Lives~~
~~Buildings and improvements~~		~~6 to 40 years~~
~~Furniture, fixtures and equipment~~		~~2 to 15 years~~



~~Level 1:~~		~~Observable inputs such as quoted prices in active markets.~~
~~Level 2:~~		~~Directly or indirectly observable inputs, other than quoted prices in active markets.~~
~~Level 3:~~		~~Unobservable inputs in which there is little or no market information, which require a reporting entity to develop its own assumptions.~~



~~Market approach:~~		~~Prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities.~~
~~Cost approach:~~		~~Amount required to replace the service capacity of an asset (replacement cost).~~
~~Income approach:~~		~~Techniques used to convert future amounts to a single amount based on market expectations (including present-value, option-pricing, and excess-earnings models).~~



	September 30, 2017			December 31, 2016
Intangible assets:
Air rights ⁽¹⁾	$	10,754		$	—
Favorable leases ⁽²⁾	10,569			6,032
In-place lease agreements	1,361			570
Other	80			—
	22,764			6,602
Less accumulated amortization	(796		)	(348		)
Intangible assets, net	$	21,968		$	6,254

Intangible liabilities:
Unfavorable leases ⁽²⁾	$	5,002		$	5,002
Less accumulated amortization	(261		)	(190		)
Intangible liabilities, net	$	4,741		$	4,812


~~(1)~~	~~In conjunction with the acquisition of the Courtyard by Marriott - Charlotte, NC, the Company acquired certain air rights related to the hotel property.~~



~~Hotel~~	~~Location~~	~~Guestrooms~~
~~Courtyard by Marriott~~	~~Jackson, MS~~	~~117~~
~~Courtyard by Marriott~~	~~Germantown, TN~~	93
~~Fairfield Inn & Suites~~	~~Germantown, TN~~	80
~~Homewood Suites~~	~~Ridgeland, MS~~	91
~~Residence Inn~~	~~Jackson, MS~~	~~100~~
~~Residence Inn~~	~~Germantown, TN~~	78
~~Staybridge Suites~~	~~Ridgeland, MS~~	92
~~Total~~		~~651~~


~~(1)~~	~~The net assets acquired totaled $424.8 million due to the purchase at settlement of $0.6 million of net working capital and other assets and capitalized transaction costs of $2.2 million.~~


~~(2)~~	~~The net assets acquired totaled $169.7 million due to the purchase at settlement of $0.7 million of net liabilities.~~



	For the Nine Months Ended September 30,
	2017				2016
Land	$	63,339			$	23,288
Hotel buildings and improvements	328,395				143,195
Intangible assets	16,162				442
Furniture, fixtures and equipment	16,294				2,948
Other assets	1,937				504
Total assets acquired	426,127				170,377
Less - other liabilities assumed	(1,354		)		(723		)
Net assets acquired	$	424,773		(1)	$	169,654		(2)


~~(1)~~Land			~~The net assets acquired totaled $424.8 million due to the purchase at settlement of $0.6 million of net working capital and other assets and capitalized transaction costs of $2.2 million.~~

$	52,797
~~(2)~~Lodging buildings and improvements		~~The net~~	676,607
Furniture, fixtures and equipment			76,729
Incentives and other intangibles			23,670
Other assets			5,318
Total assets acquired ~~totaled $169.7 million due to the purchase at settlement of $0.7 million of net liabilities.~~ (1)			835,121
Less debt assumed			(335,205)
Less lease liabilities assumed			(5,441)
Less other liabilities			(3,920)
Net assets acquired			$	490,555



	2017 Acquisitions ⁽¹⁾		2016 Acquisitions ⁽²⁾				2017 Acquisitions ⁽¹⁾		2016 Acquisitions ⁽²⁾
	For the		For the				For the		For the
	Three Months Ended September 30,		Three Months Ended September 30,				Nine Months Ended September 30,		Nine Months Ended September 30,
	2017		2017		2016		2017		2017		2016
Revenues	$	20,913	$	9,233	$	8,071	$	28,283	$	25,929	$	18,582
Net income	$	1,960	$	1,734	$	2,568	$	3,816	$	4,965	$	5,284



	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2017		2016		2017		2016
Revenues	$	136,369	$	135,373	$	405,289	$	408,104
Income from hotel operations	$	50,458	$	52,250	$	152,282	$	160,450
Net income before taxes⁽¹⁾	$	14,234	$	25,181	$	58,044	$	79,569
Net income ⁽¹⁾	$	14,465	$	26,426	$	57,431	$	76,108
Net income attributable to common stockholders, net of amount allocated to participating securities ⁽¹⁾	$	10,162	$	21,275	$	44,359	$	62,357
Basic and diluted net income per share attributable to common stockholders ⁽¹⁾	$	0.10	$	0.25	$	0.45	$	0.72
Diluted net income per share attributable to common stockholders ⁽¹⁾	$	0.10	$	0.24	$	0.45	$	0.71



	September 30, 2017		December 31, 2016
Fixed-rate debt	$	365,446	$	359,867
Variable-rate debt	412,018		297,683
	$	777,464	$	657,550



	September 30, 2017						December 31, 2016
	Number of Instruments	Notional Amount		Fair Value			Number of Instruments	Notional Amount		Fair Value
Interest rate swaps (liability)	1	$	75,000	$	(438	)	1	$	75,000	$	(1,118	)
	1	$	75,000	$	(438	)	1	$	75,000	$	(1,118	)



	Number of Shares		Weighted Average Grant Date Fair Value		Aggregate Current Value
			(per share)		(in thousands)
Non-vested at December 31, 2016	357,845		$	11.90	$	5,736
Granted	156,318		15.52
Vested	(120,366	)	11.29
Forfeited	(1,237	)	13.57
Non-vested at September 30, 2017	392,560		$	13.52	$	6,277


	Number of Shares	Weighted-Average Grant Date Fair Value (1)		Aggregate Current Value
		(per share)		(in thousands)
Non-vested at December 31, 2022	1,006,974	$	11.76	$	7,270
Granted	425,907	10.08
Vested	(239,416)	9.38
Forfeited	(137,193)	9.38
Non-vested at March 31, 2023	1,056,272	$	11.93	$	7,235



	Number of Shares		Weighted Average Grant Date Fair Value (1)		Aggregate Current Value
			(per share)		(in thousands)
Non-vested at December 31, 2016	449,027		$	14.90	$	7,198
Granted	210,361		17.13
Vested	(39,959	)	7.12
Non-vested at September 30, 2017	619,429		$	16.16	$	9,905



	Total		2017		2018		2019		2020		2021
Time-based restricted stock	$	3,293	$	541	$	1,603	$	949	$	190	$	10
Performance-based restricted stock	4,826		850		2,374		1,401		201		—
	$	8,119	$	1,391	$	3,977	$	2,350	$	391	$	10


Franchise/Brand	Number of Lodging Properties	Number of Guestrooms
Marriott
Courtyard by Marriott	17	3,049
Residence Inn by Marriott	15	2,136
AC Hotel by Marriott	6	1,026
SpringHill Suites by Marriott	7	983
TownePlace Suites	2	225
Marriott	1	165
Fairfield Inn & Suites by Marriott	1	140
Element by Marriott	1	108
Four Points by Sheraton	1	101
Total Marriott	51	7,933
Hilton
Hilton Garden Inn	9	1,291
Hampton Inn & Suites	8	1,162

Homewood Suites	3	369
Embassy Suites	2	346
Canopy Hotel	2	326
DoubleTree by Hilton	1	210
Total Hilton	25	3,704
Hyatt
Hyatt Place	17	2,419
Hyatt House	3	466
Total Hyatt	20	2,885
IHG
Holiday Inn Express & Suites	4	564

Staybridge Suites	1	121
Hotel Indigo	1	116
Total IHG	6	801
Independent
Onera	1	11
Total	103	15,334



Franchise/Brand	Number of Hotel Properties	Number of Guestrooms
Marriott/Starwood ⁽¹⁾
AC Hotel by Marriott	1	255
Courtyard by Marriott	14	2,553
Fairfield Inn & Suites by Marriott	1	140
Four Points by Sheraton	1	101
Marriott	1	157
Residence Inn by Marriott	8	1,119
SpringHill Suites by Marriott	6	874
Total Marriott/Starwood	32	5,199
Hilton
DoubleTree by Hilton	1	210
Hampton Inn	3	327
Hampton Inn & Suites	8	1,127
Hilton Garden Inn	8	1,048
Homewood Suites	1	129
Total Hilton	21	2,841
Hyatt
Hyatt House	2	298
Hyatt Place	16	2,310
Total Hyatt	18	2,608
IHG
Holiday Inn	1	143
Holiday Inn Express	1	66
Holiday Inn Express & Suites	3	433
Hotel Indigo	1	115
Staybridge Suites	1	121
Total IHG	7	878
Carlson
Country Inn & Suites by Carlson	1	64
Total	79	11,590


	For the Three Months Ended March 31,												Quarter-over-Quarter				Quarter-over-Quarter
	2023						2022						Dollar Change				Percentage Change
	Total Portfolio (103 properties)			Same-Store Portfolio (99 properties)			Total Portfolio (101 properties)¹			Same-Store Portfolio (99 properties)¹			Total Portfolio (103/101 properties)		Same-Store Portfolio (99 properties)		Total Portfolio (103/101 properties)		Same-Store Portfolio (99 properties)
Revenues:
Room	$	163,089		$	155,747		$	128,810		$	130,544		$	34,279	$	25,203	26.6	%	19.3	%
Food and beverage	10,630			8,268			5,662			5,897			4,968		2,371		87.7	%	40.2	%
Other	8,664			7,995			7,397			7,530			1,267		465		17.1	%	6.2	%
Total	$	182,383		$	172,010		$	141,869		$	143,971		$	40,514	$	28,039	28.6	%	19.5	%

Expenses:
Room	$	35,909		$	34,541		$	28,410		$	28,920		$	7,499	$	5,621	26.4	%	19.4	%
Food and beverage	7,955			6,385			4,114			4,633			3,841		1,752		93.4	%	37.8	%
Other lodging property operating expenses	56,125			53,628			46,277			46,332			9,848		7,296		21.3	%	15.7	%
Total	$	99,989		$	94,554		$	78,801		$	79,885		$	21,188	$	14,669	26.9	%	18.4	%

Operational Statistics:
Occupancy	68.9		%	68.7		%	64.2		%	64.0		%	n/a		n/a		7.3	%	7.3	%
ADR	$	171.63		$	169.33		$	152.79		$	152.30		$	18.84	$	17.03	12.3	%	11.2	%
RevPAR	$	118.18		$	116.28		$	98.05		$	97.46		$	20.13	$	18.82	20.5	%	19.3	%



	For the Three Months Ended September 30,												Quarter-over-Quarter					Quarter-over-Quarter
	2017						2016						Dollar Change					Percentage/Basis Point Change
	Total Portfolio (79 hotels)			Same-Store Portfolio (65 hotels)			Total Portfolio (80 hotels)			Same-Store Portfolio (65 hotels)			Total Portfolio (79/80 hotels)		Same-Store Portfolio (65 hotels)			Total Portfolio (79/80 hotels)			Same-Store Portfolio (65 hotels)
Total revenues	$	136,587		$	101,912		$	118,336		$	101,425		$	18,251	$	487		15.4	%		0.5	%
Hotel operating expenses	$	86,070		$	64,957		$	73,530		$	63,238		$	12,540	$	1,719		17.1	%		2.7	%
Occupancy	80.5		%	80.6		%	78.8		%	79.0		%	n/a		n/a			166		bps	155		bps
ADR	$	147.84		$	142.80		$	142.84		$	144.77		$	5.00	$	(1.97	)	3.5	%		(1.4	)%
RevPAR	$	119.02		$	115.04		$	112.63		$	114.39		$	6.39	$	0.65		5.7	%		0.6	%



	For the Three Months Ended September 30,				Percentage		Percentage of Revenue
	2017		2016		Change		2017		2016
Rooms expense	$	25,451	$	24,867	2.3	%	25.0	%	24.5	%
Other direct expense	12,942		13,055		(0.9	)%	12.7	%	12.9	%
Other indirect expense	26,564		25,316		4.9	%	26.1	%	25.0	%
Total hotel operating expenses	$	64,957	$	63,238	2.7	%	63.7	%	62.3	%


	For the Three Months Ended March 31, 2023
	2023		2022		Dollar Change		Percentage Change
Property taxes, insurance and other	$	14,724	$	13,138	$	1,586	12.1	%
Management fees	4,805		3,795		1,010		26.6	%
Depreciation and amortization	36,908		36,274		634		1.7	%
Corporate general and administrative	8,005		9,137		(1,132)		(12.4)	%




Interest expense	20,909		13,439		7,470		55.6	%
Other income, net	265		1,742		(1,477)		nm¹
Income tax benefit	(472)		(2,000)		1,528		(76.4)	%



	For the Nine Months Ended September 30,												Period-over-Period					Period-over-Period
	2017						2016 ⁽¹⁾						Dollar Change					Percentage/Basis Point Change
	Total Portfolio (79 hotels)			Same-Store Portfolio (65 hotels)			Total Portfolio (80 hotels)			Same-Store Portfolio (65 hotels)			Total Portfolio (79/80 hotels)		Same-Store Portfolio (65 hotels)			Total Portfolio (79/80 hotels)			Same-Store Portfolio (65 hotels)
Total revenues	$	383,632		$	305,209		$	363,613		$	308,805		$	20,019	$	(3,596	)	5.5	%		(1.2	)%
Hotel operating expenses	$	240,773		$	192,617		$	224,425		$	189,395		$	16,348	$	3,222		7.3	%		1.7	%
Occupancy	79.9		%	79.8		%	79.3		%	79.6		%	n/a		n/a			62		bps	18		bps
ADR	$	147.03		$	145.20		$	142.57		$	146.66		$	4.46	$	(1.46	)	3.1	%		(1.0	)%
RevPAR	$	117.53		$	115.87		$	113.08		$	116.78		$	4.45	$	(0.91	)	3.9	%		(0.8	)%