SUMMIT HOTEL PROPERTIES, INC. Management report and analysis of the financial situation and operating results. (Form 10-K)

Industry trends and outlook

Room-night demand in the U.S. lodging industry is generally correlated to
certain macroeconomic trends. Key drivers of lodging demand include changes in
gross domestic product, corporate profits, capital investments, employment and
more recently, travel-related health and safety restrictions and concerns.
Volatility in the economy and risks arising from global and domestic political
or economic conditions may cause slowing economic growth, which would have an
adverse effect on lodging demand. The global and U.S. economies, and the travel
and lodging industries, have experienced a significant downturn as a result of
the COVID-19 global pandemic, which we refer to as the Pandemic. During the
twelve months ended December 31, 2021, we began to see a significant recovery in
hotel demand driven primarily by leisure travel. Corporate transient and group
demand remains significantly reduced from historical levels and is recovering
more slowly than leisure demand.

Effects of the pandemic on our business

The effects of the Pandemic and the restrictions implemented in response to the
Pandemic have had a significant negative effect on the U.S. and global
economies, including a rapid and sharp decline in all forms of travel, both
domestic and international, and a significant decline in hotel demand. These
conditions resulted in a substantial decline from pre-Pandemic levels in our
revenues, profitability and cash flows from operations.

During the twelve months ended December 31, 2021, we experienced significant
improvement in our business in comparison to the period early in the Pandemic,
driven primarily by leisure travel and to a lesser extent modest improvement in
other demand segments; however, we are still recovering to attain pre-Pandemic
financial and operating performance levels. The improvement was the result of a
significant increase in the administration of vaccines globally as well as the
easing of government restrictions and guidance in most jurisdictions. A recovery
in business travel and group business has been slower to date. We anticipate
that continued improvement in operating trends will be dependent on continued
strength in leisure travel and a recovery of business travel. More broadly, a
return to normalized levels of operations is dependent upon a continuation in
the recovery of our business, further dissipation of concerns related to the
Pandemic, and maintaining a high-quality portfolio aligned with evolving guest
preferences.



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Management actions in response to the effects of the pandemic on our operations

We have taken the following actions to mitigate the negative effects of the pandemic on our consolidated financial position, results of operations and cash flows:

Operational Adjustments

In response to the rapid decline in demand for room nights and loss of revenues
as a result of the Pandemic, we, along with our property managers, evaluated
each hotel in our portfolio and initially adjusted labor and cost structures for
hotels based on existing market conditions. As demand at our hotels has
increased during the year ended December 31, 2021, we have also increased
staffing commensurately.

Financial measures and liquidity

Beginning in March 2020we took significant steps to improve our overall liquidity position in response to the effect of the pandemic on our financial condition, which continued during the year ended December 31, 2021.

At January 12, 2021we sold $287.5 million aggregate principal amount of our 1.50% Convertible Senior Notes due 2026 (the “Convertible Notes”).

On May 1, 2021, the Company contributed a portfolio of six hotels containing 846
guestrooms to our consolidated joint venture with an affiliate of GIC,
Singapore's sovereign wealth fund. The estimated market value of the portfolio
of hotel properties was $172.0 million and GIC contributed $84.3 million in cash
for its 49% interest in the Joint Venture after the completion of the transfer
of the six hotels. Net proceeds from the transaction were used to repay $62.5
million of our senior debt and $20.9 million was applied to our Cash and cash
equivalents balances.

On August 12, 2021, the Company completed the offering of 4,000,000 Series F
preferred shares for net proceeds of $96.6 million, after the underwriting
discount and offering-related expenses of $3.4 million. On September 4, 2021,
using proceeds from the issuance of the Series F preferred shares, the Company
paid $75.0 million to redeem all 3,000,000 of its outstanding 6.45% Series D
Cumulative Redeemable Preferred Stock at a redemption price of $25 per share
plus accrued and unpaid dividends. The remaining net proceeds from the Series F
preferred share offering was used to repay $22.0 million of our senior debt.

See "Part II - Item 7. - Management's Discussion and Analysis of Financial
Condition and Results of Operations - Liquidity and Capital Resources" and "Part
II - Item 8. - Financial Statements and Supplementary Data - Note 6 - Debt," for
additional information.

Health and Well-being

All of our hotels are licensed with national franchise brands and we have worked
closely with our brand partners to develop and implement comprehensive protocols
for the safety and well-being of employees and guests to address a broad
spectrum of pathogens and viruses, including COVID-19 and variants thereof. We
continue to apply advanced cleaning procedures developed during the Pandemic to
all of our hotel properties.

Operating Performance Metrics

We use a variety of performance indicators and other information to evaluate the
financial condition and operating performance of our business. These key
indicators include financial information that is prepared in accordance with
GAAP, as well as other financial information that is not prepared in accordance
with GAAP. In addition, we use other information that may not be financial in
nature, including statistical information and comparative data. We use this
information to measure the performance of individual hotel properties, groups of
hotel properties and/or our business as a whole. We periodically compare
historical information to our internal budgets as well as industry-wide
information. These key indicators include:

•Occupancy - Occupancy represents the total number of guestrooms occupied
divided by the total number of guestrooms available.
•Average Daily Rate (ADR) - ADR represents total room revenues divided by the
total number of guestrooms occupied.
•Revenue Per Available Room (RevPAR) - RevPAR is the product of ADR and
Occupancy.
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Occupancy, ADR and RevPAR are commonly used measures within the hotel industry
to evaluate operating performance. RevPAR is an important metric for monitoring
operating performance at the individual hotel property level and across our
business as a whole. We evaluate individual hotel RevPAR performance on an
absolute basis with comparisons to budget and prior periods, as well as on a
company-wide and market-by-market basis. ADR and RevPAR are based only on room
revenue. Room revenue depends on demand (as measured by occupancy), pricing (as
measured by ADR), and our available supply of hotel guestrooms. Our ADR,
occupancy and RevPAR performance may be affected by macroeconomic factors such
as regional and local employment growth, personal income and corporate earnings,
office vacancy rates and business relocation decisions, air travel and other
business and leisure travel, new hotel property construction, and the pricing
strategies of competitors. In addition, our ADR, occupancy and RevPAR
performance is dependent on the continued success of our franchisors and brands.

Activity of the hotel real estate portfolio

We continuously evaluate alternatives to refine our portfolio to drive growth
and create value. In the normal course of business, we evaluate opportunities to
acquire additional properties that meet our investment criteria and
opportunities to recycle capital through the disposition of properties. As such,
the composition and size of our portfolio of properties may change materially
over time. Significant changes to our portfolio of properties could have a
material effect on our Consolidated Financial Statements.

On May 1, 2021, the Company contributed a portfolio of six hotels containing 846
guestrooms to our consolidated Joint Venture. The estimated market value of the
portfolio of hotel properties was $172.0 million and GIC, our Joint Venture
partner, paid us $84.3 million in cash to maintain its 49% interest in the joint
venture after the completion of the transfer of the six hotels. See Part II -
Item 8. - Financial Statements and Supplementary Data - Note 3 - Investment in
Hotel Properties, net for additional information.

On July 9, 2021, we acquired a 110-room Residence Inn in Steamboat Springs, CO.
through our Joint Venture for $33.0 million. Additionally, on December 21, 2021,
through our Joint Venture, we acquired a 120-room Embassy Suites in Tucson, AZ.
for $25.5 million.

In January 2022, we completed the NCI Transaction for an aggregate purchase
price of $766.0 million. As part of the same portfolio purchase, we expect to
acquire one additional hotel, the Canopy New Orleans, upon completion of its
construction, which is expected to occur during the first quarter of 2022, for a
purchase price of $56.0 million.

See "Part II - Item 8. - Financial Statements and Supplementary Data -Note 3 -
Investment in Hotel Properties, net" to the Consolidated Financial Statements
for additional information concerning our asset acquisitions, development, and
dispositions.

Hotel revenue and operating expenses

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

Our hotel operating expenses consist primarily of expenses incurred in the
day-to-day operation of our hotel properties. Many of our expenses are fixed,
such as essential hotel staff, real estate taxes, insurance, and depreciation.
These expenses generally do not decrease even if the revenues at our hotel
properties decrease. Room expense includes housekeeping and front office wages
and payroll taxes, reservation systems, room supplies, laundry services and
other costs. Food and beverage expense primarily includes the cost of food, the
cost of beverages and associated labor costs. Other operating expenses include
labor and other costs associated with administrative departments, sales and
marketing, repair and maintenance, utility costs and franchise fees.

As discussed above under "Part II - Item 7. - Management's Discussion and
Analysis of Financial Condition and Results of Operations - Management's Actions
in Response to the Effects of the Pandemic on Our Operations - Operational
Adjustments," in response to the rapid decline in demand for room nights and
loss of revenues throughout the Pandemic, we, along with our property managers,
evaluated each hotel in our portfolio to determine if market conditions
warranted the temporary suspension of operations, and to adjust labor cost
structures for hotels that would continue to operate. Although the vast majority
of our hotels remained open throughout the Pandemic, staffing levels were
temporarily reduced to levels that
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safely and effectively maintain reasonable accommodations for our guests. As
demand at our hotels has increased, we have also increased staffing
commensurately. Our hotels implemented and have continued to modify health and
safety protocols aligned with brand guidelines to allay guest concerns about
COVID-19 and its variants.

Operating results

The following comparisons should be considered in conjunction with the consolidated financial statements included elsewhere in this Form 10-K.

Comparison of 2021 to 2020

The following table contains key operating metrics for our total portfolio and
our same-store portfolio for 2021 compared with 2020 (dollars in thousands,
except ADR and RevPAR).  We define same-store hotels as properties that we owned
as of December 31, 2021 and that we have owned at all times since January 1,
2020.


                                                                                                                            Year-over-Year                                       Year-over-Year
                                             2021                                    2020                                   Dollar Change                                       Percentage Change
                                  Total             Same-Store            Total             Same-Store               Total                Same-Store                    Total                       Same-Store
                                 Portfolio           Portfolio           Portfolio           Portfolio             Portfolio               Portfolio                  Portfolio                     Portfolio
                                (74 hotels)         (72 hotels)         (72 hotels)         (72 hotels)          (74/72 hotels)           (72 hotels)               (74/72 hotels)                 (72 hotels)
Revenues:
Room                           $  334,338          $  331,299          $  215,506          $  215,506          $       118,832          $    115,793                             55.1  %                    53.7  %
Food and beverage                   7,299               7,270               6,444               6,444                      855                   826                             13.3  %                    12.8  %
Other                              20,289              20,218              12,513              12,513                    7,776                 7,705                             62.1  %                    61.6  %
Total                          $  361,926          $  358,787          $  234,463          $  234,463          $       127,463          $    124,324                             54.4  %                    53.0  %

Expenses:
Room                           $   74,781          $   74,187          $   53,784          $   53,784          $        20,997          $     20,403                             39.0  %                    37.9  %
Food and beverage                   4,856               4,815               5,416               5,416                     (560)                 (601)                           (10.3) %                   (11.1) %
Other hotel operating
expenses                          123,626             122,777              96,506              96,504                   27,120                26,273                             28.1  %                    27.2  %
Total                          $  203,263          $  201,779          $  155,706          $  155,704          $        47,557          $     46,075                             30.5  %                    29.6  %

Occupancy                            62.3  %             62.2  %             43.3  %             43.3  %                      n/a                   n/a                          43.6  %                    43.4  %
ADR                            $   129.70          $   129.35          $   120.36          $   120.36          $          9.34          $       8.99                              7.8  %                     7.5  %
RevPAR                         $    80.74          $    80.41          $    52.16          $    52.16          $         28.58          $      28.25                             54.8  %                    54.2  %



The total portfolio information above includes revenues and expenses from the
two hotel properties that we acquired in 2021 (the "2021 Acquired Hotels") from
the date of acquisition through December 31, 2021, and operating information
(occupancy, ADR, and RevPAR) for the period each hotel was owned. Accordingly,
the information does not reflect a full twelve months of operations in 2021 for
the 2021 Acquired Hotels.

Changes compared to the financial year ended December 31, 2021 compared to the year ended
December 31, 2020 were due to the following:

•Revenues. Growth in revenues was primarily driven by an increase in leisure
travel and to a lesser extent modest improvement in other demand segments
resulting from the administration of vaccines globally as well as the easing of
government restrictions in most jurisdictions. See "Part II - Item 7. -
Management's Discussion and Analysis of Financial Condition and Results of
Operations - Effects of Pandemic on Our Business" for further information.
•RevPAR. The increase in RevPAR was due to an improvement in our business that
was primarily driven by an increase in leisure travel and to a lesser extent
modest improvement in other demand segments resulting from the administration of
vaccines globally as well as the easing of government restrictions in most
jurisdictions. The increase in RevPAR during the year ended December 31, 2021
was due to a 43.6% increase in occupancy and a 7.8% increase in ADR in
comparison with the prior year. The increase in occupancy was substantially
greater than the increase in ADR as a result of a much larger decline in
occupancy in the prior year. See "Part II - Item 7. - Management's Discussion
and
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Analysis of Financial Condition and Results of Operations - Effects of Pandemic
on Our Business" for further information.
•Food and Beverage Revenues and Expenses. Food and beverage revenues increased
during the year ended December 31, 2021 as a result of the increase in
occupancy. The increase in food and beverage revenues was lower than the
increase in rooms revenues primarily driven by modified food and beverage
offerings. Food and beverage expenses declined during the year ended December
31, 2021 despite an increase in revenues for the period because the modified
food and beverage offerings reduced product and staffing costs.
•Expenses. The increase in expenses was driven by the increase in occupancy
relative to 2020. The occupancy related increases have been partially offset by
comprehensive cost reduction initiatives, including the reduction of labor and
temporary elimination of certain services and amenities, at all hotels. Although
revenues have significantly improved, we have focused on continuing to achieve
operating efficiencies to manage expenses.

The following table includes consolidated other income and expenses for 2021 versus 2020 (in thousands of dollars).

                                                         For the Years 

Ended the 31st of December,

                                                              2021                         2020             Dollar Change           Percentage Change
Property taxes, insurance and other            $         41,350                         $ 44,691          $       (3,341)                        (7.5) %
Management fees                                           9,858                            6,276                   3,582                         57.1  %
Depreciation and amortization                           105,955                          109,619                  (3,664)                        (3.3) %
Corporate general and administrative                     29,428                           20,985                   8,443                         40.2  %

Transaction costs                                         3,849                                -                   3,849                             (1)
(Reversal of) provision for credit
losses                                                   (2,632)                           4,821                  (7,453)                            

(1)

Loss on impairment and write-off of
assets                                                    4,361                            1,759                   2,602                        147.9  %
Gain (loss) on disposal of assets, net                      240                              (16)                    256                             (1)
Interest expense                                         43,368                           43,300                      68                          0.2  %
Other income, net                                         9,523                            4,841                   4,682                         96.7  %
Income tax expense                                        1,473                            1,376                      97                          7.0  %



(1)  Not meaningful.

Changes compared to the financial year ended December 31, 2021 compared to the year ended
December 31, 2020 were due to the following:

•Property Taxes, Insurance and Other. This decrease is primarily due to a
reduction in property taxes due to lower property tax assessments for 2021,
which were based on our lower operating performance during 2020 as a result of
the negative effects of the Pandemic.
•Management Fees. The increase in management fees during the current period is
primarily due to increased consolidated revenues as our business has experienced
a steady improvement in performance during 2021.
•Depreciation and Amortization. This decrease is due to the effect of certain
assets becoming fully amortized, offset by capital expenditures and the
acquisition of two hotel properties during the second half of 2021.
•Corporate General and Administrative. Corporate general and administrative
expense increased $8.4 million, including $4.0 million related to executive
transition costs recorded during the fourth quarter of 2021. The remaining
increase is primarily due to higher incentive and other compensation costs.
•Transaction Costs. During 2021, we incurred costs of $2.1 million in transfer
taxes and legal fees related to the contribution of six hotels to our Joint
Venture. GIC, our Joint Venture partner, paid 49%, or $0.9 million, of the $1.8
million transfer tax which is reflected in non-controlling interest on our
Consolidated Statement of Operations. We also incurred $1.7 million in
transaction costs in pursuit of the acquisition of a company with a portfolio of
hotel properties that ultimately was not consummated.
•(Reversal of) Provision for Credit Losses. During 2021, we reached an agreement
with the borrowers of the mezzanine loans on two of the remaining real estate
development projects for the full repayment of the loans during the fourth
quarter of 2021. Accordingly, the Company reversed the $2.6 million allowance
for credit losses related to these two loans during 2021. See "Part II - Item 8.
- Financial Statements and Supplementary Data - Note 4 - Investment in Real
Estate Loans" for further information.
•Loss on Impairment and Write-off of Assets. During 2021, we reached an
agreement with the borrowers of the mezzanine loans on two of the remaining real
estate development projects for the full repayment of the loans in the
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fourth quarter of 2021, which resulted in us foregoing the exercise of the
purchase options. As such, the Company recorded a Loss on impairment during 2021
to write-off the carrying amounts of the purchase options totaling $4.4 million.
•Gain (loss) on Disposal of Assets. The gain on disposal of assets, net for 2021
is primarily due to the recovery of certain amounts related to sold properties
that were written off in a prior period.
•Interest Expense. Interest expense was consistent with 2020 as an increase in
amortization of deferred financing costs was offset by a reduction in our
weighted average interest rate, primarily related to the Convertible Notes
Offering.
•Other Income. This increase is primarily due to the interest income recorded on
our mezzanine loans as a result of the interest payments made in connection with
the loan amendments completed during 2021. See "Part II - Item 8. - Financial
Statements and Supplementary Data - Note 4 - Investment in Real Estate Loans"
for further information. The Company also received COVID-19 relief grants from
certain jurisdictions in which we operate which were recorded as Other income
during 2021.
•Income Tax Expense. In 2021, we recorded a $1.5 million income tax expense
primarily attributable to current federal and state income taxes of our TRSs. In
2020, we recorded Income tax expense of $1.4 million which related to i)
deferred tax expense of $2.0 million related to the establishment of a valuation
allowance on deferred tax assets of certain TRSs which were in a 3-year
cumulative loss position, ii) $1.0 million income tax benefit from federal net
operating loss carrybacks, and iii) $0.4 million income tax expense related to
taxable income in our TRS entities.

For information about our key operating metrics and results of operations for
the year ended 2020 compared to the year ended 2019, refer to "Part II - Item 7.
- Management's Discussion and Analysis of Financial Conditions and Results of
Operations - Results of Operations" of the Company's Annual Report on Form 10-K
for the year ended December 31, 2020 filed with the SEC.

Non-GAAP Financial Measures

We disclose certain "non-GAAP financial measures," which are measures of our
historical financial performance. Non-GAAP financial measures are financial
measures not prescribed by Generally Accepted Accounting Principles ("GAAP").
These measures are as follows: (i) Funds From Operations ("FFO") and Adjusted
Funds from Operations ("AFFO"), (ii) Earnings before Interest, Taxes,
Depreciation and Amortization ("EBITDA"), Earnings before Interest, Taxes,
Depreciation and Amortization for Real Estate ("EBITDAre") and Adjusted EBITDAre
(as described below). We caution investors that amounts presented in accordance
with our definitions of non-GAAP financial measures may not be comparable to
similar measures disclosed by other companies, since not all companies calculate
these non-GAAP financial measures in the same manner. Our non-GAAP financial
measures should be considered along with, but not as alternatives to, net income
(loss) as a measure of our operating performance. Our non-GAAP financial
measures may include funds that may not be available for our discretionary use
due to functional requirements to conserve funds for capital expenditures,
property acquisitions, debt service obligations and other commitments and
uncertainties. Although we believe that our non-GAAP financial measures can
enhance the understanding of our financial condition and results of operations,
these non-GAAP financial measures are not necessarily better indicators of any
trend as compared to a comparable measure prescribed by GAAP such as net income
(loss).

FFO and AFFO

As defined by Nareit, FFO represents net income or loss (computed in accordance
with GAAP), excluding preferred dividends, gains (or losses) from sales of real
property, impairment losses on real estate assets, items classified by GAAP as
extraordinary, the cumulative effect of changes in accounting principles, plus
depreciation and amortization related to real estate assets, and adjustments for
unconsolidated partnerships, and joint ventures. AFFO represents FFO excluding
amortization of deferred financing costs, franchise fees, equity-based
compensation expense, debt transaction costs, premiums on redemption of
preferred shares, losses from net casualties, non-cash interest income and
non-cash income tax related adjustments to our deferred tax asset. Unless
otherwise indicated, we present FFO and AFFO applicable to our common shares and
common units. We present FFO and AFFO because we consider FFO and AFFO an
important supplemental measure of our operational performance and believe it is
frequently used by securities analysts, investors and other interested parties
in the evaluation of REITs, many of which present FFO and AFFO when reporting
their results. FFO and AFFO are intended to exclude GAAP historical cost
depreciation and amortization, which assumes that the value of real estate
assets diminishes ratably over time. Historically, however, real estate values
have risen or fallen with market conditions. Because FFO and AFFO exclude
depreciation and amortization related to real estate assets, gains and losses
from real property dispositions and impairment losses on real estate assets, FFO
and AFFO provide performance measures that, when compared year over year,
reflect the effect to operations from trends in occupancy, guestroom rates,
operating costs, development activities and interest costs, providing
perspective not immediately apparent from net income. Our computation of FFO
differs slightly from the computation of Nareit-defined FFO related to the
reporting of corporate depreciation and amortization expense, and adjustments
related to provision for credit losses. Our computation of FFO may also differ
from the methodology for
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calculating FFO used by other equity REITs and, accordingly, may not be
comparable to such other REITs. FFO and AFFO should not be considered as an
alternative to net income (loss) (computed in accordance with GAAP) as an
indicator of our liquidity, nor is it indicative of funds available to fund our
cash needs, including our ability to pay dividends or make distributions.  Where
indicated in this Annual Report on Form 10-K, FFO is based on our computation of
FFO and not the computation of Nareit-defined FFO unless otherwise noted.

The following is a reconciliation of our GAAP net income to FFO and AFFO for the
years ended December 31, 2021, 2020 and 2019 (in thousands, except per
share/unit amounts):
                                                                     2021               2020                2019
Net (loss) income                                                $ (68,584)         $ (149,245)         $  82,348
Preferred dividends                                                (15,431)            (14,838)           (14,838)
Premium on redemption of preferred stock                            (2,710)                  -                  -
Loss related to non-controlling interests in joint venture           2,896               5,635                419

Net income (loss) applicable to common shares and common units

                                                              (83,829)           (158,448)            67,929
Real estate-related depreciation                                   105,462             109,159             99,013
Loss on impairment and write-off of assets                           4,361               1,759              2,521
(Gain) loss on disposal of assets, net                                (240)                 16            (45,418)

Adjustments related to non-controlling interests in a consolidated joint venture

                                          (8,454)             (5,949)            (1,554)
FFO applicable to common shares and common units                    17,300             (53,463)           122,491
(Reversal of) provision for credit losses (1)                       (2,632)              4,821                  -
Amortization of lease-related intangible assets, net                    87                  86                127
Amortization of deferred financing costs                             4,353               2,267              1,485
Amortization of franchise fees                                         493                 460                432
Equity-based compensation                                           10,681    (2)        6,476              6,219
Executive transition costs                                           1,065    (3)            -                  -
Transaction costs                                                    3,849                   -                  -
Debt transaction costs                                                 220                 365              1,892
Premium on redemption of preferred stock                             2,710                   -                  -
Non-cash interest income                                            (1,042)             (2,848)            (2,477)
Non-cash lease expense, net                                            521                 329                494
Casualty losses (recoveries), net                                      468               1,132               (239)
Increase in deferred tax asset valuation allowance                       -               2,056                  -

Adjustments related to non-controlling interests in a consolidated joint venture

                                          (1,291)               (341)               (68)
Other                                                                    -                  91                  -
AFFO applicable to common shares and common units                $  36,782          $  (38,569)         $ 130,356
FFO per common share/common unit                                 $    0.16          $    (0.51)         $    1.17
AFFO per common share/common unit (4)                            $    0.35          $    (0.37)         $    1.25
Weighted average diluted common shares/common units:
FFO and AFFO (5)(6)                                                105,455             104,320            104,363



(1)    The adjustment for (Reversal of) provision for credit losses has been
reclassified from the calculation of FFO applicable to common shares and common
units to the calculation of AFFO applicable to common shares and common units
for the years ended December 31, 2020 and 2019 to conform to the current period
presentation.
(2)   The total equity-based compensation expense for 2021 includes $2.9 million
of incremental expense related to the modification of certain restricted stock
awards as a result of the retirement of our Executive Chairman.
(3)   Executive transition costs are cash payments due to our former Executive
Chairman due to the non-renewal of his employment contract in December 2021.
(4)   AFFO for the year ended December 31, 2021 has not been adjusted for
interest related to the Convertible Notes for purposes of calculating AFFO per
common share/common unit because we intend to settle the principal portion of
the Convertible Notes in cash and we did not include in the denominator of our
calculation of AFFO per common share/common unit the potential dilutive effect
of shares that would be issued if the principal portion of the Convertible Notes
were converted into shares of our common stock.
(5)    Includes Common Units in the Operating Partnership held by limited
partners (other than us and our subsidiaries) because the Common Units are
redeemable for cash or, at our election, shares of our common stock.
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(6)   The weighted average diluted common shares/common units used to calculate
FFO and AFFO per common share/common unit for the year ended December 31, 2021
includes the dilutive effect of our outstanding restricted stock awards. These
shares were excluded from our weighted average shares outstanding used to
calculate net loss per share because they would have been antidilutive. The
weighted average common shares/common units used to calculate FFO and AFFO per
common share/common unit for the year ended December 31, 2021 exclude the
potential dilution related to our Convertible Notes as we intend to settle the
principal value of the Convertible Notes in cash.

A reconciliation of weighted average diluted common shares to non-GAAP weighted
average diluted common shares/common units for FFO and AFFO is as follows (in
thousands):

                                                                2021                  2020                  2019
Weighted average dilutive common shares outstanding             104,471               104,141               103,887
Dilutive effect of restricted stock awards                          402                    52                    52

Dilutive effect of shares issuable upon conversion of convertible debt

                                              23,256                     -                     -
Adjusted weighted average dilutive common shares
outstanding                                                     128,129               104,193               103,939

Non-GAAP adjustment for dilutive effects of common units

                                                               144                   179                   241
Non-GAAP adjustment for dilutive effects of
restricted stock awards                                             438                   (52)                  183
Non-GAAP adjustment for dilutive effect of shares
issuable upon conversion of convertible debt                    (23,256)                    -                     -
Non-GAAP weighted dilutive common shares/common
units outstanding                                               105,455               104,320               104,363



During the year ended December 31, 2021, AFFO applicable to common shares and
common units increased $75.4 million over the prior year due to an improvement
in our business that was primarily driven by an increase in leisure travel and
to a lesser extent modest improvement in other demand segments resulting from
the administration of vaccines globally as well as the easing of government
restrictions in most jurisdictions. See "Part II - Item 7. - Management's
Discussion and Analysis of Financial Condition and Results of Operations -
Effects of Pandemic on Our Business" for further information.

For information about our AFFO for the year ended 2020 compared to the year
ended 2019, refer to "Part II - Item 7. - Management's Discussion and Analysis
of Financial Condition and Results of Operations - Non-GAAP Financial Measures"
of the Company's Annual Report on Form 10-K for the year ended December 31, 2020
filed with the SEC.

EBITDA, EBITDAre and adjusted EBITDAre

EBITDA

EBITDA represents net income or loss, excluding: (i) interest, (ii) income tax
expense and (iii) depreciation and amortization. We believe EBITDA is useful to
an investor in evaluating our operating performance because it provides
investors with an indication of our ability to incur and service debt, to
satisfy general operating expenses, to make capital expenditures and to fund
other cash needs or reinvest cash into our business. We also believe it helps
investors meaningfully evaluate and compare the results of our operations from
period to period by removing the effect of our asset base (primarily
depreciation and amortization) from our operating results. Our management team
also uses EBITDA as one measure in determining the value of acquisitions and
dispositions.

EBITDAre and adjusted EBITDAre

In September 2017, Nareit proposed a standardized performance measure, called
EBITDAre, which is based on EBITDA and is expected to provide additional
relevant information about REITs as real estate companies in support of growing
interest among generalist investors. The conclusion was reached that, while
dedicated REIT investors have long been accustomed to utilizing the industry's
supplemental measures such as FFO and net operating income ("NOI") to evaluate
the investment quality of REITs as real estate companies, it would be helpful to
generalist investors for REITs as real estate companies to also present
EBITDAre as a more widely known and understood supplemental measure of
performance. EBITDAre is intended to be a supplemental non-GAAP performance
measure that is independent of a company's capital structure and will provide a
uniform basis for one measurement of the enterprise value of a company compared
to other REITs.

EBITDAre, as defined by Nareit, is calculated as EBITDA, excluding: (i) loss and
gains on disposition of property and (ii) asset impairments, if any. We believe
EBITDAre is useful to an investor in evaluating our operating performance
because it provides investors with an indication of our ability to incur and
service debt, to satisfy general operating expenses, to make
                                       48
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capital expenditures and to fund other cash needs or reinvest cash into our
business. We also believe it helps investors meaningfully evaluate and compare
the results of our operations from period to period by removing the effect of
our asset base (primarily depreciation and amortization) from our operating
results.

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

The following is a reconciliation of our GAAP net income and EBITDA for the years ended December 31, 20212020 and 2019 (in thousands):

                                                                     2021               2020                2019
Net (loss) income                                                $ (68,584)         $ (149,245)         $  82,348
Depreciation and amortization                                      105,955             109,619             99,445
Interest expense                                                    43,368              43,300             41,030
Interest income                                                         (8)               (145)              (278)
Income tax expense                                                   1,473               1,376              1,500
EBITDA                                                              82,204               4,905            224,045
Loss on impairment and write-off of assets                           4,361               1,759              2,521
(Gain) loss on disposal of assets, net                                (240)                 16            (45,418)
EBITDAre                                                            86,325               6,680            181,148
(Reversal of) provision for credit losses(1)                        (2,632)              4,821                  -
Amortization of lease-related intangible assets, net                    87                  86                127
Equity-based compensation                                           10,681    (2)        6,476              6,219
Executive transition costs                                           1,065    (3)            -                  -
Transaction costs                                                    3,849                   -                  -
Debt transaction costs                                                 220                 365              1,892

Non-cash interest income                                            (1,042)             (2,848)            (2,477)
Non-cash lease expense, net                                            521                 329                494
Casualty losses (recoveries), net                                      468               1,132               (239)
Loss related to non-controlling interests in joint venture           2,896               5,635                419
Adjustments related to non-controlling interests in
consolidated joint venture                                         (11,943)             (8,353)            (2,320)
Other                                                                    -                  91                  -
Adjusted EBITDAre                                                $  90,495          $   14,414          $ 185,263



(1)   The adjustment for (Reversal of) provision for credit losses has been
reclassified from the calculation of EBITDAre to the calculation of Adjusted
EBITDAre for the years ended December 31, 2020 and 2019 to conform to the
current period presentation.
(2)   The total equity-based compensation expense for 2021 includes $2.9 million
of incremental expense related to the modification of certain restricted stock
awards as a result of the retirement of our Executive Chairman.
(3)   Executive transition costs are cash payments due to our former Executive
Chairman due to the non-renewal of his employment contract in December 2021.

During the year ended December 31, 2021, Adjusted EBITDAre increased $76.1
million from the prior year primarily due to an improvement in our business that
was primarily driven by an increase in leisure travel and to a lesser extent
modest improvement in other demand segments resulting from the administration of
vaccines globally as well as the easing of government restrictions in most
jurisdictions. See "Part II - Item 7. - Management's Discussion and Analysis of
Financial Condition and Results of Operations - Effects of Pandemic on Our
Business" for further information.

For information about our Adjusted EBITDAre for the year ended 2020 compared to
the year ended 2019, refer to "Part II - Item 7. - Management's Discussion and
Analysis of Financial Condition and Results of Operations - Non-GAAP
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Financial Measures” of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020 filed with the SECOND.

Cash and capital resources

Due to the Pandemic, we entered into modifications of our 2018 Senior Credit
Facility during the years ended December 31, 2020 and 2021, which included a
waiver of covenants through March 31, 2022 and restricted our ability to use
advances on the $400 Million Revolver for certain purposes; however, we continue
to be able to access the $400 Million Revolver to fund operations, for growth
opportunities and to execute our business plan. Upon expiration of our covenant
waivers in March 2022, the capacity available under the $400 Million Revolver
may be restricted based upon our quarterly achievement of certain liquidity or
other financial metrics. See "Part II - Item 8. - Financial Statements and
Supplementary Data - Note 6 - Debt," for additional information concerning our
2018 Senior Credit Facility.

Our short-term liquidity requirements consist primarily of operating expenses
and other expenditures directly associated with our hotel properties, recurring
maintenance and capital expenditures necessary to maintain our hotel properties
in accordance with internal and brand standards, capital expenditures to improve
our hotel properties, hotel development costs, acquisitions, interest payments,
settlement of interest rate swaps, scheduled principal payments on outstanding
indebtedness, restricted cash funding obligations, mezzanine loan funding
commitments, our Joint Venture acquisitions and capital requirements,
contractual lease payments, corporate overhead, and distributions to our
stockholders when declared. We have approximately $62.0 million of debt under
our 2017 Term Loan maturing in November 2022. We have adequate liquidity to fund
this maturity. Our corporate overhead primarily consists of employee
compensation expenses, professional fees and corporate insurance and rent
expenses. Cash requirements for our corporate overhead expenses (excluding
non-cash stock-based compensation), which are generally paid from operating cash
flows, were $18.7 million, $14.5 million and $17.4 million for the years ended
December 31, 2021, 2020 and 2019, respectively. We generally expect our
corporate overhead expenses to remain consistent with the level of our operating
activities and market conditions for goods and services.

Our long-term liquidity requirements consist primarily of the costs of acquiring
additional hotel properties, renovations and other non-recurring capital
expenditures that periodically are made with respect to our hotel properties,
dividend distributions and scheduled debt payments, including maturing loans.

To satisfy the requirements for qualification as a REIT, we must meet a number
of organizational and operational requirements, including a requirement that we
distribute annually at least 90% of our REIT taxable income to our stockholders,
determined without regard to the deduction for dividends paid and excluding any
net capital gains. We intend to distribute a sufficient amount of our taxable
income to maintain our status as a REIT and to avoid tax on undistributed
income. Because we anticipate distributing a substantial amount of our available
cash from operations, if sufficient funds are not available to us from hotel
dispositions, our senior revolving credit and term loan facilities and other
loans, we may need to raise additional capital to grow our business.

The net proceeds from our January 12, 2021 sale of the Convertible Notes, after
deducting underwriting discounts and commissions and estimated 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 related
capped call transactions. 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 2017 Term Loan.

The effective strike price of the capped call transactions is initially $15.26,
which represents a premium of 75.0% over the last reported sale price of the
common stock on the New York Stock Exchange on January 7, 2021, and is subject
to certain adjustments under the terms of the capped call transactions. See
"Part II - Item 8. - Financial Statements and Supplementary Data - Note 6 -
Debt," for additional information concerning the Convertible Notes, Convertible
Notes Offering and the capped call Transactions.

On May 1, 2021, the Company contributed a portfolio of six hotels containing 846
guestrooms to our consolidated joint venture with an affiliate of GIC,
Singapore's sovereign wealth fund. The estimated market value of the portfolio
of hotel properties was $172.0 million and GIC contributed $84.3 million in cash
for its 49% interest in our Joint Venture after the completion of the transfer
of the six hotels. Net proceeds from the transaction were used to repay $62.5
million of our senior debt and $20.9 million was recorded as Cash and cash
equivalents.

At July 9, 2021we acquired the 110 rooms Hostel Residence by Marriott in
Steamboat Springs, CO for $33.0 million through our joint venture.

                                       50
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On August 12, 2021, the Company sold 4,000,000 Series F preferred shares for net
proceeds of $96.6 million, after the underwriting discount and offering-related
expenses of $3.4 million. On September 4, 2021, using proceeds from the issuance
of the Series F preferred shares, the Company paid $75.0 million to redeem all
3,000,000 of its outstanding 6.45% Series D Cumulative Redeemable Preferred
Stock at a redemption price of $25 per share plus accrued and unpaid dividends.
The remaining net proceeds from the Series F preferred share offering was used
to repay $22.0 million of our senior debt.

On December 21, 2021, we acquired the 120-guestroom Embassy Suites by Hilton in
Tucson, AZ for $25.5 million through our Joint Venture. The Joint Venture
acquired the property with a combination of cash and an assumed loan that had a
balance of approximately $13.3 million. The loan has a fixed interest rate of
4.99% and a maturity date of June 2028.

On January 13, 2022, the Operating Partnership and our Joint Venture completed
the NCI Transaction, paid in the form of 15,314,494 Common Units, 1,958,429
Series Z Preferred Units, $382.0 million cash draw from a term loan entered into
by subsidiaries of the Joint Venture, the assumption by a subsidiary of the
Joint Venture of approximately $6.5 million in PACE loan debt and approximately
$174.1 million cash contributed by GIC, as a limited partner in the Joint
Venture. In connection with the NCI Transaction, GIC will contribute to the
Joint Venture an estimated additional $10.9 million in cash, a portion of which
will be distributed to the Operating Partnership after transaction costs payable
by the Operating Partnership are deducted.

In connection with the NCI Transaction, the Operating Partnership and the Joint
Venture expect to acquire the Canopy New Orleans upon completion of its
construction, which is expected to occur during the first quarter of 2022, for a
purchase price of $56.0 million, to be paid in the form of 550,180 Common Units,
41,571 Series Z Preferred Units, $21.4 million cash and $28.0 million cash
proceeds from a delayed draw on the term loan entered into by subsidiaries of
the Joint Venture.

We currently have an outstanding mezzanine loan on a real estate development
project to fund up to an aggregate of $29.9 million for the development of two
hotel properties. The real estate development loan, which closed in the third
quarter of 2019, has $27.7 million funded as of December 31, 2021, has $2.2
million remaining to be funded, and has a stated interest rate of 9.0% and a
maturity date of May 15, 2022. See "Part II - Item 8. - Financial Statements and
Supplementary Data - Note 4 - Investment in Real Estate Loans" for additional
information concerning these loans and our rights to acquire ownership of the
properties.

Outstanding Indebtedness

Subsequent to year-end, at February 11, 2022, we had $200.0 million outstanding
on our $200 Million Term Loan, $62.0 million outstanding on our 2017 Term Loan
and $225.0 million outstanding on our 2018 Term Loan. Each of the credit
facilities was supported by the 46 hotel properties included in the credit
facility borrowing base and a pledge of the equity securities in each of the
entities which own one of the 46 hotel properties, and the respective TRS
Lessees. We also had an aggregate of $149.4 million of mortgage loans
outstanding and $287.5 million of Convertible Notes outstanding.

Subsequent to year-end, at February 11, 2022, our Joint Venture had $143.5
million outstanding under our Joint Venture Credit Facility, which included
borrowings of $75.0 million on its $75 Million Term Loan and $68.5 million on
its $125 million revolving line of credit. The Joint Venture Credit Facility is
secured primarily by a first priority pledge of the Borrower's equity interests
in the subsidiaries that hold the five hotel borrowing base assets, and the
related TRS entities, which wholly own the TRS lessees that lease each of the
borrowing base assets. As of February 11, 2022, our Joint Venture also owns
seven hotel properties that are not collateral for the Joint Venture's senior
unsecured credit facility. As of February 11, 2022, our Joint Venture also had
$382.0 million outstanding on a term loan and $6.4 million outstanding on a PACE
loan entered into in connection with the NCI Transaction and a mortgage loan
totaling $13.2 million.

At December 31, 2021, we have scheduled debt principal amortization payments
during the next twelve months totaling $4.3 million and debt maturities totaling
$62.0 million. Currently, we have the capacity to pay these scheduled principal
debt payments using cash on hand or availability on our $400 Million Revolver.

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


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On February 5, 2021, the Company entered into certain amendments of the 2018
Senior Credit Facility, the 2018 Term Loan and the 2017 Term Loan that give us
full access to the $400 Million Revolver (subject to certain conditions),
provide for financial covenant waivers through March 31, 2022, and modify
certain financial covenant measures through December 31, 2023. Additionally, on
April 29, 2021, we amended the Joint Venture Credit Facility to provide for
certain financial covenant waivers and adjustments as described in "Part II -
Item 8. - Financial Statements and Supplementary Data - Note 6 - Debt" to the
Condensed Consolidated Financial Statements. Our outstanding indebtedness
requires us to comply with various financial and other covenants. At
December 31, 2021, we and our Joint Venture are in compliance with all loan
covenants.

See "Part II - Item 8. - Financial Statements and Supplementary Data - Note 6 -
Debt" for additional information concerning our loans, loan amendments and our
financing arrangements.

   A summary of our debt at December 31, 2021 is as follows (dollars in
thousands):

                                                                      Amortization                                           Number of               Principal Amount
Lender                                       Interest Rate           Period (Years)            Maturity Date            Encumbered Properties          

Exceptional

$600 Million Senior Credit and Term
Loan Facility (1)
Deutsche Bank AG New York Branch
$400 Million Revolver                     2.65% Variable                   n/a                 March 31, 2023                    n/a                 $ 

$200 Million Term Loan                    2.60% Variable                   n/a                 April 1, 2024                     n/a                   

200,000

Total Senior Credit and Term Loan
Facility                                                                                                                                                

200,000

Joint Venture Credit Facility (2)
Bank of America, N.A.
$125 Million Revolver                     2.55% Variable                   n/a                October 8, 2023                    n/a                   

68,500

$75 Million Term Loan                     2.50% Variable                   n/a                October 8, 2023                    n/a                   

75,000

Total Joint Venture Credit Facility                                                                                                                        143,500

Term Loans (1)
KeyBank National Association
Term Loan                                 2.70% Variable                   n/a               November 25, 2022                   n/a                   

62,000

KeyBank National Association
Term Loan                                 2.40% Variable                   n/a               February 14, 2025                   n/a                   

225,000

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

287,500

Secured Mortgage Indebtedness
KeyBank National Association              4.46% Fixed                      30                 February 1, 2023                    3                         18,545
                                          4.52% Fixed                      30                  April 1, 2023                      3                         19,024
                                          4.30% Fixed                      30                  April 1, 2023                      3                         18,358
                                          4.95% Fixed                      30                  August 1, 2023                     2                         33,155
MetaBank                                  4.44% Fixed                      25                   July 1, 2027                      3                         45,070

Bank of Cascades (3)                      2.10% Variable                   25                December 19, 2024                    1                          7,957
                                          4.30% Fixed                      25                December 19, 2024                    -                          7,957
Wells Fargo                               4.99% Fixed                      30                   June 6, 2028                      1                         13,249
Total Mortgage Loans                                                                                                             16                        163,315
Total Debt                                                                                                                                           $   1,081,315



(1) The 2018 Senior Credit Facility and Term Loans are supported by a borrowing
base of 46 unencumbered hotel properties and a pledge of the equity securities
of the entities that own and operate the 46 unencumbered hotels.
(2) The Joint Venture Credit Facility is secured by pledges of the equity in the
entities (and affiliated entities) that own five of the hotels owned by the
Joint Venture.
(3) The Bank of Cascades mortgage loan is comprised of two promissory notes that
are secured by the same collateral and cross-defaulted.

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As part of the NCI transaction concluded in January 2022we incurred the following debt (in thousands of dollars):

                                                                     Amortization                                           Number of               Principal Amount
Lender                                      Interest Rate           Period (Years)            Maturity Date            Encumbered Properties           

Exceptional

Term Loan (1)
Bank of America, N.A.                    2.91% Variable                   n/a                January 13, 2026                   n/a                 $ 

382,000

PACE Loan (2)
Twain Community Partners II LLC          6.10% Fixed                      20                  July 31, 2040                      1                           6,479
Total Debt                                                                                                                                          $      388,479



(1) The Bank of America term loan is secured by a pledge of the equity interests
in the subsidiaries that own and operate the borrowing base assets financed by
the facility.
(2) The PACE loan is secured by an assessment lien imposed by the County of
Tarrant, Texas for the benefit of the lender.

Capital expenditure

During the year ended December 31, 2021we financed $20.4 million in capital expenditure. We plan to spend approx. $60.0 million for $80.0 million capital expenditures across our portfolio in 2022. We expect to fund these expenditures through a combination of cash, working capital, borrowings as part of our $400 million Revolver, or other potential sources of capital, insofar as we have them.

Cash flow analysis

The following table summarizes the changes in cash flows for the years ended
December 31, 2021 and December 31, 2020 (in thousands):

                                                                      For the Years Ended December 31,
                                                                          2021                          2020              Change

Net cash provided by (used in) operating activities $66,051

                        $ (42,052)         $ 108,103
Net cash used in investing activities                                (74,244)                         (30,710)           (43,534)
Net cash provided by financing activities                             66,241                           41,825             24,416
Net change in cash, cash equivalents and restricted
cash                                                        $         58,048                        $ (30,937)         $  88,985


Changes from the year ended December 31, 2021 compared to the year ended
December 31, 2020 were due to the following:

•Cash provided by (used in) operating activities. This increase primarily
resulted from a decrease in net loss of $77.8 million, after adjusting for
non-cash items, such as depreciation and amortization and gains on the sale of
assets, and net changes in working capital of $30.3 million. The net changes in
working capital were primarily due to decreases in accrued expenses during the
year ended December 31, 2020 driven by reduced operating activity resulting from
the negative effects of the Pandemic. Accrued expenses increased during the year
ended December 31, 2021 due to an increase in accruals at our hotel properties
driven by an increase in operating activity as we recover from the Pandemic. The
overall increase is due to an improvement in our business that has been
primarily driven by leisure travel and to a lesser extent modest improvement in
other demand segments in 2021.
•Cash used in investing activities. This increase in cash used in investing
activities is primarily due to the acquisition of two hotel properties in 2021
totaling $59.0 million and an increase in escrow deposits and deferred
acquisition costs totaling $10.6 million. These expenditures were partially
offset by an increase in the net repayments of mezzanine loans receivable of
$21.6 million and a decline in capital expenditures of $2.3 million. Capital
expenditures were lower during 2021 compared with 2020 because much of the
capital expenditures for 2020 were incurred early in the year prior to the
Pandemic, after which capital expenditures were reduced to preserve liquidity.
•Cash provided by financing activities. Cash provided by financing activities
for the year ended December 31, 2021 was primarily the result of contributions
from our joint venture partner of $115.5 million and net proceeds from the
issuance of preferred stock of $96.6 million, partially offset by the redemption
of preferred stock totaling $75.0 million, net repayments of debt of $20.2
million including the proceeds from the issuance and sale of the Convertible
Notes which were used to partially repay the $400 Million Revolver and 2017 Term
Loan, the purchase of capped call options related to the Convertible Notes of
$21.1 million, debt financing fees of $11.4 million and dividend payments of
$15.5 million. Cash provided by financing activities for the year ended
December 31, 2020 was primarily the result
                                       53
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net debt of $78.8 million. Net borrowings were partially offset by dividend payments of approximately $34.2 million and financing costs of $2.8 million.

For information about our consolidated cash flows for the year ended 2020
compared to the year ended 2019, refer to "Part II - Item 7. - Management's
Discussion and Analysis of Financial Conditions and Results of Operations - Cash
Flow Analysis" of the Company's Annual Report on Form 10-K for the year ended
December 31, 2020 filed with the SEC.

Critical accounting estimates

Asset impairment

Each quarter, we evaluate the net carrying amounts of our long-term assets for
impairment when impairment indicators are present. We evaluate for impairment
triggers based on qualitative factors such as macroeconomic trends, trends
related to demand for travel and lodging, and current and projected trends
related to local market conditions. We also evaluate for impairment triggers
based on quantitative factors such as historical and projected revenue and
profitability performance trends. When an impairment indicator is identified, we
perform a recoverability analysis based on estimated future undiscounted cash
flows for the asset. Forecasted undiscounted cash flows require substantial
management judgment related to estimates of future revenues, which is based on
historical results, our expectations related to revenue trends and future
performance of the asset, our assessment of current and future market conditions
and competition, our expectations related to performance of the overall economy,
and third-party industry published forecasts. Revenue performance has been
volatile as a result of the Pandemic making revenue forecasts particularly
challenging in the current environment. Future revenue performance is highly
dependent on matters outside of our control such as dissipation of concerns
related to the Pandemic, continued easing of government restrictions and
guidance, restoration of consumer confidence, and a recovery in corporate and
overall travel-related demand.

Main accounting policies and new accounting standards

See “Part II – Item 8. – Financial statements and additional data – Note 2 – Basis of presentation and significant accounting policies.”

cyber security

The hospitality industry and certain of the major brand and franchise companies
have experienced cybersecurity breaches. We are not aware of any material
cybersecurity losses at any of our properties. We manage cybersecurity risks
with our franchisors and property management companies. An important part of our
cybersecurity risk mitigation efforts includes maintaining cybersecurity
insurance and indemnifications in certain of our property management agreements.
Our Board of Directors provides on-going oversight of management's approach to
managing cybersecurity risks.

Recent Developments

Leadership and Board Transitions

Effective January 1, 2022, we have made certain changes to the management team and our Board of Directors, as described below. See “Part III – Item 10. – Directors, Executive Officers and Corporate Governance”.

Hotel real estate portfolio transactions

In January, 2022, the Operating Partnership and the Joint Venture completed the
NCI Transaction, paid in the form of 15,314,494 Common Units, 1,958,429 Series Z
Preferred Units, $382.0 million cash draw from a term loan entered into by
subsidiaries of the Joint Venture, the assumption by a subsidiary of the Joint
Venture of approximately $6.5 million in PACE loan debt and approximately $174.1
million cash contributed by GIC, as a limited partner in the Joint Venture. In
connection with the NCI Transaction, GIC will contribute to the Joint Venture an
estimated additional $10.9 million in cash, a portion of which will be
distributed to the Operating Partnership after transaction costs payable by the
Operating Partnership are deducted.

The Operating Partnership and the Joint Venture expect to acquire the Canopy New
Orleans upon completion of its construction, which is expected to occur during
the first quarter of 2022, for a purchase price of $56.0 million, to be paid in
the form of 550,180 Common Units, 41,571 Series Z Preferred Units, $21.4 million
cash and $28.0 million cash proceeds from a delayed draw on the term loan
entered into by subsidiaries of the Joint Venture.

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Stock trading

On January 28, 2022, our board of directors declared cash dividends of $0.390625
per share of 6.25% Series E Cumulative Redeemable Preferred Stock and $0.3671875
per share of 5.875% Series F Cumulative Redeemable Preferred Stock.

Our board of directors also declared on behalf of the Operating Partnership, a
cash dividend of $0.171354 per unit of the Operating Partnership's 5.25% Series
Z Cumulative Perpetual Preferred Units that were issued on January 13, 2022 as
part of the NCI Transaction.

These dividends are payable February 28, 2022 to shareholders of record on
February 14, 2022.

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