Exhibit 99.2
UNAUDITED PRO FORMA FINANCIAL INFORMATION OF
SUMMIT HOTEL PROPERTIES, INC. AND SUMMIT HOTEL OP, LP
Summit Hotel Properties, Inc. (the “Company”) is a self-advised hotel 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 January 14, 2013, the Company closed on its second follow-on common stock offering and issued 17,250,000 shares of common stock for net proceeds of $148.1 million. The Company contributed the net proceeds to the Operating Partnership in exchange for common units. The Operating Partnership used the proceeds to fund the acquisition of the three Hyatt hotels discussed below that were under contract to purchase, pay down the principal balance of its senior secured revolving credit facility, and for general corporate purposes.
On January 22, 2013, the Company purchased from affiliates of Hyatt Hotels Corporation (“Hyatt”), a portfolio of three hotels (the “Hyatt 3 Portfolio”) containing an aggregate of 426 guestrooms for $36.1 million. The Company had previously acquired from Hyatt a portfolio of eight hotels on October 5, 2012. Collectively the eleven hotels acquired from Hyatt are referred to as the Hyatt 11 Portfolio.
On March 11, 2013, the Company purchased a portfolio of five Marriott hotels in New Orleans, LA (the “New Orleans Marriott Portfolio”) containing an aggregate of 823 guestrooms for $135.0 million.
The unaudited pro forma consolidated balance sheets of the Company and the Operating Partnership as of December 31, 2012 are presented as if the second follow-on common stock offering, the acquisition of the Hyatt 3 Portfolio, and the acquisition of the New Orleans Marriott Portfolio had occurred on December 31, 2012. The unaudited pro forma consolidated statements of operations for the Company and the Operating Partnership for the year ended December 31, 2012 are presented as if the second follow-on common stock offering, the acquisition of the Hyatt 11 Portfolio, and the acquisition of the New Orleans Marriott Portfolio had been completed at the beginning of 2012.
The unaudited pro forma financial information is not necessarily indicative of what the Company’s and the Operating Partnership’s results of operations would have been assuming the second follow-on common stock offering, the acquisition of the Hyatt 11 Portfolio, and the acquisition of the New Orleans Marriott Portfolio had been completed at the beginning of 2012, nor is it indicative of the results of operations for future periods. The unaudited pro forma financial information reflects the preliminary application of purchase accounting to the acquisition of the Hyatt 3 Portfolio and the New Orleans Marriott Portfolio. The preliminary purchase accounting may be adjusted if any of the assumptions underlying the purchase accounting change. In management’s opinion, all adjustments necessary to reflect the effects of the second follow-on common stock offering, the acquisition of the Hyatt 11 Portfolio, and the acquisition of the New Orleans Marriott Portfolio have been made. This unaudited pro forma financial information should be read in conjunction with the historical financial statements included in the Company’s and the Operating Partnership’s Annual Report on Form 10-K for the year ended December 31, 2012.
Summit Hotel Properties, Inc.
Unaudited Pro Forma Consolidated Balance Sheet
December 31, 2012
(in thousands)
| | Historic Summit
Hotel Properties,
Inc. | | Issuance of
17,250,000
Shares of
Common Stock
(1) | | Acquisition of
Hyatt 3 Portfolio
(2) | | Acquisition of
New Orleans
Marriott Portfolio
(3) | | Pro Forma
Summit Hotel
Properties, Inc. | |
ASSETS | | | | | | | | | | | |
| | | | | | | | | | | |
Investment in hotel properties, net | | $ | 734,362 | | $ | — | | $ | 36,125 | | $ | 135,000 | | $ | 905,487 | |
Investment in hotel properties under development | | 10,303 | | — | | — | | — | | 10,303 | |
Land held for development | | 15,802 | | — | | — | | — | | 15,802 | |
Assets held for sale | | 4,836 | | — | | — | | — | | 4,836 | |
Cash and cash equivalents | | 13,980 | | 90,100 | | (35,931 | ) | (48,018 | ) | 20,131 | |
Restricted cash | | 3,624 | | — | | — | | 1,785 | | 5,409 | |
Trade receivables | | 5,478 | | — | | 551 | | 1,006 | | 7,035 | |
Prepaid expenses and other | | 5,311 | | — | | 103 | | 1,593 | | 7,007 | |
Deferred charges, net | | 8,895 | | — | | — | | 630 | | 9,525 | |
Deferred tax asset | | 3,997 | | — | | — | | — | | 3,997 | |
Other assets | | 4,201 | | — | | — | | 200 | | 4,401 | |
TOTAL ASSETS | | $ | 810,789 | | $ | 90,100 | | $ | 848 | | $ | 92,196 | | $ | 993,933 | |
| | | | | | | | | | | |
LIABILITIES AND EQUITY | | | | | | | | | | | |
| | | | | | | | | | | |
LIABILITIES | | | | | | | | | | | |
Debt | | $ | 312,613 | | $ | (58,000 | ) | $ | — | | $ | 84,789 | | $ | 339,402 | |
Accounts payable | | 5,013 | | — | | 42 | | 6,044 | | 11,099 | |
Accrued expenses | | 18,985 | | — | | 891 | | 1,568 | | 21,444 | |
Derivative financial instruments | | 641 | | — | | — | | — | | 641 | |
TOTAL LIABILITIES | | 337,252 | | (58,000 | ) | 933 | | 92,401 | | 372,586 | |
| | | | | | | | | | | |
COMMITMENTS AND CONTINGENCIES | | | | | | | | | | | |
| | | | | | | | | | | |
EQUITY | | | | | | | | | | | |
Preferred stock, $.01 par value per share, 100,000,000 shares authorized: | | | | | | | | | | | |
9.25% Series A - 2,000,000 shares issued and outstanding at December 31, 2012 and 2011 (liquidation preference of $50,393 at December 31, 2012 and 2011) | | 20 | | — | | — | | — | | 20 | |
7.875% Series B - 3,000,000 shares issued and outstanding at December 31, 2012 (liquidation preference of $75,324 at December 31, 2012) | | 30 | | — | | — | | — | | 30 | |
Common stock, $.01 par value per share, 450,000,000 shares authorized, 46,159,652 and 27,278,000 shares issued and outstanding at December 31, 2012 and 2011, respectively | | 462 | | 173 | | — | | — | | 635 | |
Additional paid-in capital | | 468,820 | | 147,927 | | — | | — | | 616,747 | |
Accumulated other comprehensive income (loss) | | (528 | ) | — | | — | | — | | (528 | ) |
Accumulated deficit and distributions | | (31,985 | ) | — | | (85 | ) | (205 | ) | (32,275 | ) |
Total stockholders’ equity | | 436,819 | | 148,100 | | (85 | ) | (205 | ) | 584,629 | |
Noncontrolling interests | | 36,718 | | — | | — | | — | | 36,718 | |
TOTAL EQUITY | | 473,537 | | 148,100 | | (85 | ) | (205 | ) | 621,347 | |
| | | | | | | | | | | |
TOTAL LIABILITIES AND EQUITY | | $ | 810,789 | | $ | 90,100 | | $ | 848 | | $ | 92,196 | | $ | 993,933 | |
See Notes to Unaudited Pro Forma Financial Information
2
Summit Hotel Properties, Inc.
Unaudited Pro Forma Consolidated Statement of Operations
For the Year Ended December 31, 2012
(in thousands, except per share)
| | Historical
Summit Hotel
Properties, Inc. | | Historic Hyatt 11
Portfolio (4) | | Historic New
Orleans Marriott
Portfolio | | Pro Forma
Adjustments | | Pro Forma
Summit Hotel
Properties, Inc. | |
| | | | | | | | | | | |
REVENUES | | | | | | | | | | | |
Room revenue | | $ | 181,598 | | $ | 33,300 | | $ | 30,076 | | $ | — | | $ | 244,974 | |
Other hotel operations revenue | | 7,944 | | 112 | | 2,442 | | — | | 10,498 | |
Total Revenues | | 189,542 | | 33,412 | | 32,518 | | — | | 255,472 | |
| | | | | | | | | | | |
EXPENSES | | | | | | | | | | | |
Hotel operating expenses | | | | | | | | | | | |
Rooms | | 54,083 | | 10,191 | | 6,394 | | — | | 70,668 | |
Other direct | | 25,125 | | 3,883 | | 4,354 | | — | | 33,362 | |
Other indirect | | 51,062 | | 10,157 | | 9,762 | | (700 | )(5) | 70,281 | |
Other | | 911 | | 55 | | 50 | | — | | 1,016 | |
Total hotel operating expenses | | 131,181 | | 24,286 | | 20,560 | | (700 | ) | 175,327 | |
Depreciation and amortization | | 34,263 | | 8,696 | | 2,977 | | 3,714 | (6) | 49,650 | |
Corporate general and administrative: | | | | | | | | | | | |
Salaries and other compensation | | 6,039 | | — | | — | | — | | 6,039 | |
Other | | 3,534 | | — | | — | | — | | 3,534 | |
Hotel property acquisition costs | | 3,050 | | — | | — | | (304 | )(7) | 2,746 | |
Loss on impairment of assets | | 660 | | — | | — | | — | | 660 | |
Total Expenses | | 178,727 | | 32,982 | | 23,537 | | 2,710 | | 237,956 | |
| | | | | | | | | | | |
INCOME (LOSS) FROM OPERATIONS | | 10,815 | | 430 | | 8,981 | | (2,710 | ) | 17,516 | |
| | | | | | | | | | | |
OTHER INCOME (EXPENSE) | | | | | | | | | | | |
Interest income | | 35 | | — | | — | | — | | 35 | |
Other income | | 731 | | — | | — | | — | | 731 | |
Interest expense | | (15,585 | ) | — | | (4,194 | ) | 3,312 | (8) | (16,467 | ) |
Debt transaction costs | | (661 | ) | — | | — | | — | | (661 | ) |
Gain (loss) on disposal of assets | | (198 | ) | (128 | ) | — | | — | | (326 | ) |
Gain (loss) on derivative financial instruments | | (2 | ) | — | | — | | — | | (2 | ) |
Total Other Income (Expense) | | (15,680 | ) | (128 | ) | (4,194 | ) | 3,312 | | (16,690 | ) |
| | | | | | | | | | | |
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES | | (4,865 | ) | 302 | | 4,787 | | 602 | | 826 | |
| | | | | | | | | | | |
INCOME TAX (EXPENSE) BENEFIT | | 1,238 | | — | | — | | — | | 1,238 | |
| | | | | | | | | | | |
INCOME (LOSS) FOR CONTINUING OPERATIONS | | (3,627 | ) | 302 | | 4,787 | | 602 | | 2,064 | |
| | | | | | | | | | | |
NET INCOME (LOSS) FROM CONTINUING OPERATIONS ATTRIBUTABLE TO NONCONTROLLING INTERESTS | | (1,429 | ) | — | | — | | 982 | (9) | (447 | ) |
| | | | | | | | | | | |
NET INCOME (LOSS) FROM CONTINUING OPERATIONS ATTRIBUTABLE TO SUMMIT HOTEL PROPERITES INC. | | (2,198 | ) | 302 | | 4,787 | | (380 | ) | 2,511 | |
| | | | | | | | | | | |
PREFERRED DIVIDENDS | | (4,625 | ) | — | | — | | — | | (4,625 | ) |
| | | | | | | | | | | |
NET INCOME (LOSS) FROM CONTINUING OPERATIONS ATTRIBUTABLE TO COMMON STOCKHOLDERS | | $ | (6,823 | ) | $ | 302 | | $ | 4,787 | | $ | (380 | ) | $ | (2,114 | ) |
| | | | | | | | | | | |
WEIGHTED AVERGE COMMON SHARES OUTSTANDING | | | | | | | | | | | |
Basic | | 33,717 | | | | | | 17,250 | (10) | 50,967 | |
| | | | | | | | | | | |
Diluted | | 33,849 | | | | | | 17,250 | (10) | 51,099 | |
| | | | | | | | | | | |
EARNINGS PER SHARE | | | | | | | | | | | |
Basic and diluted net income (loss) per share from continuing operations | | $ | (0.20 | ) | | | | | | | $ | (0.04 | ) |
See Notes to Unaudited Pro Forma Financial Information
3
Summit Hotel OP, LP
Unaudited Pro Forma Consolidated Balance Sheet
December 31, 2012
(in thousands)
| | Historic
Summit Hotel
OP, LP | | Issuance of
17,250,000
Common Units
(1) | | Acquisition of
Hyatt 3 Portfolio
(2) | | Acquisition of
New Orleans
Marriott Portfolio
(3) | | Pro Forma
Summit Hotel
OP, LP | |
ASSETS | | | | | | | | | | | |
| | | | | | | | | | | |
Investment in hotel properties, net | | $ | 734,362 | | $ | — | | $ | 36,125 | | $ | 135,000 | | $ | 905,487 | |
Investment in hotel properties under development | | 10,303 | | — | | — | | — | | 10,303 | |
Land held for development | | 15,802 | | — | | — | | — | | 15,802 | |
Assets held for sale | | 4,836 | | — | | — | | — | | 4,836 | |
Cash and cash equivalents | | 13,980 | | 90,100 | | (35,931 | ) | (48,018 | ) | 20,131 | |
Restricted cash | | 3,624 | | — | | — | | 1,785 | | 5,409 | |
Trade receivables | | 5,478 | | — | | 551 | | 1,006 | | 7,035 | |
Prepaid expenses and other | | 5,311 | | — | | 103 | | 1,593 | | 7,007 | |
Deferred charges, net | | 8,895 | | — | | — | | 630 | | 9,525 | |
Deferred tax asset | | 3,997 | | — | | — | | — | | 3,997 | |
Other assets | | 4,201 | | — | | — | | 200 | | 4,401 | |
TOTAL ASSETS | | $ | 810,789 | | $ | 90,100 | | $ | 848 | | $ | 92,196 | | $ | 993,933 | |
| | | | | | | | | | | |
LIABILITIES AND EQUITY | | | | | | | | | | | |
| | | | | | | | | | | |
LIABILITIES | | | | | | | | | | | |
Debt | | $ | 312,613 | | $ | (58,000 | ) | $ | — | | 84,789 | | $ | 339,402 | |
Accounts payable | | 5,013 | | — | | 42 | | 6,044 | | 11,099 | |
Accrued expenses | | 18,985 | | — | | 891 | | 1,568 | | 21,444 | |
Derivative financial instruments | | 641 | | — | | — | | — | | 641 | |
TOTAL LIABILITIES | | 337,252 | | (58,000 | ) | 933 | | 92,401 | | 372,586 | |
| | | | | | | | | | | |
COMMITMENTS AND CONTINGENCIES | | | | | | | | | | | |
| | | | | | | | | | | |
EQUITY | | | | | | | | | | | |
Summit Hotel Properties, Inc., 46,159,652 and 27,278,000 common units outstanding at December 31, 2012 and 2011, respectively, and 5,000,000 and 2,000,000 preferred units outstanding at December 31, 2012 and 2011, respectively (preferred units liquidation preference of $125,717 and $50,393 at December 31, 2012 and 2011, respectively) | | 436,819 | | 148,100 | | (70 | ) | (170 | ) | 584,679 | |
Unaffiliated limited partners, 5,226,375 and 10,100,000 common units outstanding at December 31, 2012 and 2011, respectively | | 36,718 | | — | | (15 | ) | (35 | ) | 36,668 | |
TOTAL EQUITY | | 473,537 | | 148,100 | | (85 | ) | (205 | ) | 621,347 | |
| | | | | | | | | | | |
TOTAL LIABILITIES AND EQUITY | | $ | 810,789 | | $ | 90,100 | | $ | 848 | | $ | 92,196 | | $ | 993,933 | |
See Notes to Unaudited Pro Forma Financial Information
4
Summit Hotel OP, LP
Unaudited Pro Forma Consolidated Statement of Operations
For the Year Ended December 31, 2012
(in thousands, except per unit)
| | Historical Summit
Hotel OP, LP | | Historic Hyatt 11
Portfolio (4) | | Historic New
Orleans Marriott
Portfolio | | Pro Forma
Adjustments | | Pro Forma
Summit Hotel
OP, LP | |
| | | | | | | | | | | |
REVENUE | | | | | | | | | | | |
Room revenue | | $ | 181,598 | | $ | 33,300 | | $ | 30,076 | | $ | — | | $ | 244,974 | |
Other hotel operations revenue | | 7,944 | | 112 | | 2,442 | | — | | 10,498 | |
Total Revenue | | 189,542 | | 33,412 | | 32,518 | | — | | 255,472 | |
| | | | | | | | | | | |
EXPENSES | | | | | | | | | | | |
Hotel operating expenses | | | | | | | | | | | |
Rooms | | 54,083 | | 10,191 | | 6,394 | | — | | 70,668 | |
Other direct | | 25,125 | | 3,883 | | 4,354 | | — | | 33,362 | |
Other indirect | | 51,062 | | 10,157 | | 9,762 | | (700 | )(5) | 70,281 | |
Other | | 911 | | 55 | | 50 | | — | | 1,016 | |
Total hotel operating expenses | | 131,181 | | 24,286 | | 20,560 | | (700 | ) | 175,327 | |
Depreciation and amortization | | 34,263 | | 8,696 | | 2,977 | | 3,714 | (6) | 49,650 | |
Corporate general and administrative: | | | | | | | | | | | |
Salaries and other compensation | | 6,039 | | — | | — | | — | | 6,039 | |
Other | | 3,534 | | — | | — | | — | | 3,534 | |
Hotel property acquisition costs | | 3,050 | | — | | — | | (304 | )(7) | 2,746 | |
Loss on impairment of assets | | 660 | | — | | — | | — | | 660 | |
Total Expenses | | 178,727 | | 32,982 | | 23,537 | | 2,710 | | 237,956 | |
| | | | | | | | | | | |
INCOME (LOSS) FROM OPERATIONS | | 10,815 | | 430 | | 8,981 | | (2,710 | ) | 17,516 | |
| | | | | | | | | | | |
OTHER INCOME (EXPENSE) | | | | | | | | | | | |
Interest income | | 35 | | — | | — | | — | | 35 | |
Other income | | 731 | | — | | — | | — | | 731 | |
Interest expense | | (15,585 | ) | — | | (4,194 | ) | 3,312 | (8) | (16,467 | ) |
Debt transaction costs | | (661 | ) | — | | — | | — | | (661 | ) |
Gain (loss) on disposal of assets | | (198 | ) | (128 | ) | — | | — | | (326 | ) |
Gain (loss) on derivative financial instruments | | (2 | ) | — | | — | | — | | (2 | ) |
Total Other Income (Expense) | | (15,680 | ) | (128 | ) | (4,194 | ) | 3,312 | | (16,690 | ) |
| | | | | | | | | | | |
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES | | (4,865 | ) | 302 | | 4,787 | | 602 | | 826 | |
| | | | | | | | | | | |
INCOME TAX (EXPENSE) BENEFIT | | 1,238 | | — | | — | | — | | 1,238 | |
| | | | | | | | | | | |
INCOME (LOSS) FROM CONTINUING OPERATIONS | | (3,627 | ) | 302 | | 4,787 | | 602 | | 2,064 | |
| | | | | | | | | | | |
PREFERRED DIVIDENDS | | (4,625 | ) | — | | — | | — | | (4,625 | ) |
| | | | | | | | | | | |
NET INCOME (LOSS) FROM CONTINUING OPERATIONS ATTRIBUTABLE TO COMMON UNIT HOLDERS | | $ | (8,252 | ) | $ | 302 | | $ | 4,787 | | $ | 602 | | $ | (2,561 | ) |
| | | | | | | | | | | |
WEIGHTED AVERGE COMMON UNITS OUTSTANDING | | | | | | | | | | | |
Basic | | 40,780 | | | | | | 17,250 | (10) | 58,030 | |
| | | | | | | | | | | |
Diluted | | 40,912 | | | | | | 17,250 | (10) | 58,162 | |
| | | | | | | | | | | |
EARNINGS PER UNIT | | | | | | | | | | | |
Basic and diluted net income (loss) per unit from continuing operations | | $ | (0.20 | ) | | | | | | | $ | (0.04 | ) |
See Notes to Unaudited Pro Forma Financial Information
5
Summit Hotel Properties, Inc. and Summit Hotel OP, LP
Notes to Unaudited Pro Forma Financial Information
(dollars in thousands)
(1) Reflects the issuance of 17,250,000 shares of common stock by the Company and 17,250,000 common units by the Operating Partnership as if they occurred on December 31, 2012. Net proceeds, after deducting the underwriting discount and estimated offering costs were $148.1 million, $58.0 million of which was used to pay off borrowings under the senior secured revolving credit facility.
(2) Reflects the acquisition of the Hyatt 3 Portfolio for a purchase price of $36.1 million as if it occurred on December 31, 2012. The acquisition was funded with proceeds from the Company’s second follow-on common stock offering. The following is a summary of the Hyatt 3 Portfolio.
Brand | | Location | | Number of
Guestrooms | |
| | | | | |
Hyatt Place | | Chicago (Hoffman Estates), IL | | 126 | |
Hyatt Place | | Orlando (Convention), FL | | 149 | |
Hyatt Place | | Orlando (Universal), FL | | 151 | |
| | | | 426 | |
The following is a summary of assets and liabilities acquired, including an estimate of the Company’s initial allocation of the aggregate purchase price for the Hyatt 3 Portfolio, and the net cash disbursed in connection with the acquisition. The purchase price allocation is based on preliminary information and is, therefore, subject to change.
Assets and Liabilities Acquired
Land | | $ | 5,058 | |
Hotel buildings and improvements | | 28,901 | |
Furniture, fixtures and equipment | | 2,166 | |
Total purchase price | | 36,125 | |
Cash acquired | | 317 | |
Other assets | | 654 | |
Total assets acquired | | 37,096 | |
Other liabilities | | 933 | |
Net assets acquired | | $ | 36,163 | |
Net Cash Disbursed
Purchase price | | $ | 36,125 | |
Acquisition costs | | 85 | |
Net working capital | | 38 | |
| | $ | 36,248 | |
Use of proceeds from common stock offering | | $ | 36,248 | |
Borrowings under senior secured revolving credit facility | | — | |
| | $ | 36,248 | |
(3) Reflects the acquisition of the New Orleans Marriott Portfolio for a purchase price of $135.0 million as if it occurred on December 31, 2012. The acquisition was funded with proceeds from the Company’s second follow-on common stock offering and borrowings under its senior secured revolving credit facility. The following is a summary of the New Orleans Marriott Portfolio.
Brand | | Location | | Number of
Guestrooms |
| | | | |
SpringHill Suites | | New Orleans, LA | | 208 |
Courtyard | | New Orleans, LA | | 202 |
Courtyard | | New Orleans, LA | | 140 |
Courtyard | | New Orleans (Metairie), LA | | 153 |
Residence Inn | | New Orleans (Metairie), LA | | 120 |
| | | | 823 |
6
Summit Hotel Properties, Inc. and Summit Hotel OP, LP
Notes to Unaudited Pro Forma Financial Information
(dollars in thousands)
The following is a summary of assets and liabilities acquired, including an estimate of the Company’s initial allocation of the aggregate purchase price for the New Orleans Marriott Portfolio, and the net cash disbursed in connection with the acquisition. The purchase price allocation is based on preliminary information and is, therefore, subject to change.
Assets and Liabilities Acquired
Land | | $ | 10,100 | |
Hotel buildings and improvements | | 122,400 | |
Furniture, fixtures and equipment | | 2,500 | |
Total purchase price | | 135,000 | |
Cash and restricted cash acquired | | 7,619 | |
Other assets | | 3,429 | |
Total assets acquired | | 146,048 | |
Other liabilities | | 7,612 | |
Net assets acquired | | $ | 138,436 | |
Net Cash Disbursed
Purchase price | | $ | 135,000 | |
Acquisition costs | | 205 | |
Net working capital | | 3,436 | |
| | $ | 138,641 | |
Use of proceeds from common stock offering | | $ | 53,852 | |
Borrowings under senior secured revolving credit facility | | 84,789 | |
| | $ | 138,641 | |
(4) The Historical Hyatt 11 Portfolio includes the operating results of the Hyatt 11 Portfolio for the nine months ended September 30, 2012, plus the operating results of the Hyatt 3 Portfolio for the three months ended December 31, 2012.
(5) Reflects adjustment to management and franchise fees for the difference between historical fees of the Hyatt 11 Portfolio and the fees the Company has contracted to pay.
(6) Reflects adjustment to depreciation resulting from the change in basis of assets acquired in the Hyatt 11 Portfolio and the New Orleans Marriott Portfolio. The new basis is depreciated using a straight-line method over 22 to 40 years for hotel buildings and improvements and 2 to 15 years for furniture, fixtures and equipment.
(7) Reflects the removal of acquisition costs of $304 thousand related to the Hyatt 11 Portfolio.
(8) Reflects the change in interest expense resulting from the elimination of the historical debt on the New Orleans Marriott Portfolio and the change in borrowings under the Company’s senior secured revolving credit facility related to the second follow-on common stock offering and the acquisition of the New Orleans Marriott Portfolio.
(9) Reflects the allocation of earnings from the Hyatt 11 Portfolio and the New Orleans Marriott Portfolio and the effect of pro forma adjustments to noncontrolling interest.
(10)Reflects the issuance of 17,250,000 shares of common stock by the Company and 17,250,000 common units by the Operating Partnership as if they had occurred on January 1, 2012.
7
