UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
________________________________________________________________________
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 3, 2014
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CHESAPEAKE LODGING TRUST
(Exact name of registrant as specified in its charter)
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Maryland | | 001-34572 | | 27-0372343 |
(State or other jurisdiction of incorporation) | | (Commission File Number) | | (IRS Employer Identification No.) |
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1997 Annapolis Exchange Parkway, Suite 410 Annapolis, MD | | 21401 |
(Address of principal executive offices) | | (Zip Code) |
Registrant’s telephone number, including area code: (410) 972-4140
Not Applicable
(Former name or former address, if changed since last report.)
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
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| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02. Results of Operations and Financial Condition.
On November 3, 2014, Chesapeake Lodging Trust issued a press release announcing its financial results for the quarter ended September 30, 2014. A copy of the press release is filed as Exhibit 99.1 to this report and is incorporated by reference herein.
The information contained in this Form 8-K is furnished under “Item 2.02 Results of Operations and Financial Condition” in accordance with SEC Release 33-8216. The information in this Form 8-K and the Exhibit attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
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Exhibit No. | | Exhibit Description |
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99.1 | | Press release dated November 3, 2014. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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Date: November 3, 2014 | | | | CHESAPEAKE LODGING TRUST |
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| | | | By: | | /s/ Graham J. Wootten |
| | | | | | Graham J. Wootten |
| | | | | | Senior Vice President and Chief Accounting Officer |
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| | Exhibit 99.1 |
| | PRESS RELEASE For Immediate Release Contact: Douglas W. Vicari (410) 972-4142 |
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CHESAPEAKE LODGING TRUST REPORTS THIRD QUARTER RESULTS
ANNAPOLIS, MD, November 3, 2014 – Chesapeake Lodging Trust (NYSE:CHSP), a lodging real estate investment trust (REIT), reported today its financial results for the quarter ended September 30, 2014.
HIGHLIGHTS
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• | RevPAR: 11.4% increase for the 16-hotel portfolio and 7.3% increase for the 19-hotel portfolio over the same period in 2013. |
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• | Adjusted Hotel EBITDA Margin: 160 basis point increase to 37.7% for the 16-hotel portfolio and 110 basis point increase to 36.0% for the 19-hotel portfolio over the same period in 2013. |
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• | Adjusted Hotel EBITDA: $47.2 million. |
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• | Adjusted Corporate EBITDA: $43.5 million. |
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• | Adjusted FFO: $32.8 million or $0.65 per diluted common share. |
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• | Disposition: Sold the 153-room Courtyard Anaheim at Disneyland Resort for a sale price of $32.5 million. |
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• | Acquisition: Subsequent to quarter end, acquired the 337-room JW Marriott San Francisco Union Square for a purchase price of $147.2 million. |
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• | Financing: Refinanced an existing $60.0 million loan, replacing it with a $90.0 million, 10-year loan at 4.30%. |
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• | Equity Offering: Completed a $144.3 million common share offering. |
“We are extremely pleased with our hotel portfolio’s performance during the third quarter with our 16-hotel portfolio delivering RevPAR growth of 11.4%, significantly exceeding the U.S. lodging industry’s RevPAR growth of 9.2%,” said James L. Francis, Chesapeake Lodging Trust’s President and Chief Executive Officer. Mr. Francis continued, “We are also excited about our recent acquisition of the JW Marriott San Francisco Union Square, our fourth hotel in the very attractive San Francisco market, which we were able to partially fund with the reinvestment of proceeds from the sale of the Courtyard Anaheim at Disneyland Resort, a non-core asset.”
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| | PRESS RELEASE For Immediate Release Contact: Douglas W. Vicari (410) 972-4142 |
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“We are bullish on our prospects heading into 2015 with the completion of our portfolio repositioning program, which encompassed the completion of our comprehensive renovations at the W Chicago - Lakeshore and the Hyatt Herald Square New York, and soon to be completed renovation and re-branding of the Le Meridien New Orleans.”
CONSOLIDATED FINANCIAL RESULTS
The following is a summary of the consolidated financial results for the three and nine months ended September 30, 2014 and 2013 (in millions, except share and per share amounts):
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| | Three months ended September 30, | | Nine months ended September 30, |
| | 2014(1) | | 2013(2) | | 2014(1) | | 2013(3) |
Total revenue | | $ | 130.8 |
| | $ | 122.4 |
| | $ | 354.5 |
| | $ | 308.6 |
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Net income available to common shareholders | | $ | 26.3 |
| | $ | 16.8 |
| | $ | 44.8 |
| | $ | 26.5 |
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Net income per diluted common share | | $ | 0.52 |
| | $ | 0.35 |
| | $ | 0.89 |
| | $ | 0.56 |
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Adjusted Hotel EBITDA | | $ | 47.2 |
| | $ | 42.8 |
| | $ | 116.3 |
| | $ | 100.5 |
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Adjusted Corporate EBITDA | | $ | 43.5 |
| | $ | 39.9 |
| | $ | 104.8 |
| | $ | 90.6 |
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AFFO available to common shareholders | | $ | 32.8 |
| | $ | 29.1 |
| | $ | 76.4 |
| | $ | 62.6 |
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AFFO per diluted common share | | $ | 0.65 |
| | $ | 0.61 |
| | $ | 1.53 |
| | $ | 1.34 |
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Weighted-average number of diluted common shares outstanding | | 50,567,849 |
| | 47,885,696 |
| | 49,758,044 |
| | 46,759,598 |
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(1) | Includes results of operations of 19 hotels for the full period and one hotel for part of the period. |
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(2) | Includes results of operations of 20 hotels for the full period. |
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(3) | Includes results of operations of 15 hotels for the full period and five hotels for part of the period. |
HOTEL OPERATING RESULTS
As of September 30, 2014, the Trust owned 19 hotels. Management assesses the operating performance of its hotels irrespective of the hotel owner during the periods compared using the following key operating metrics: occupancy, ADR, RevPAR, Adjusted Hotel EBITDA, and Adjusted Hotel EBITDA Margin. The Trust uses the term "pro forma" to refer to metrics that include, or comparisons of metrics that are based on, the operating results of hotels under previous ownership for either a portion of or the entire period. Since five of the 19 hotels owned as of September 30, 2014 were acquired at various times during 2013, the key operating metrics reflect the pro forma operating results of five of those hotels for the nine months ended September 30, 2013.
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| | PRESS RELEASE For Immediate Release Contact: Douglas W. Vicari (410) 972-4142 |
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In addition to assessing the operating performance of its 19-hotel portfolio for the three and nine months ended September 30, 2014, management also assesses the operating performance of a 16-hotel portfolio, which excludes the W Chicago - Lakeshore, the Hotel New Orleans Downtown (formerly the W New Orleans), and the Hyatt Herald Square New York (formerly the Holiday Inn New York City Midtown - 31st Street), as these hotels have undergone or are undergoing comprehensive renovations during 2014. Included in the following table are comparisons of the key operating metrics for the 16-hotel portfolio and the 19-hotel portfolio for the three and nine months ended September 30, 2014 and 2013 (in thousands, except for ADR and RevPAR):
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| | Three months ended September 30, | | Nine months ended September 30, |
| | 2014 | | 2013 | | Change | | 2014 | | 2013(1) | | Change |
16-Hotel Portfolio(2) | | | | | | | | | | | | |
Occupancy | | 88.8 | % | | 87.2 | % | | 160 bps | | 85.1 | % | | 82.7 | % | | 240 bps |
ADR | | $ | 230.18 |
| | $ | 210.51 |
| | 9.3% | | $ | 210.65 |
| | $ | 197.27 |
| | 6.8% |
RevPAR | | $ | 204.51 |
| | $ | 183.58 |
| | 11.4% | | $ | 179.27 |
| | $ | 163.21 |
| | 9.8% |
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Adjusted Hotel EBITDA | | $ | 42,406 |
| | $ | 36,845 |
| | 15.1% | | $ | 103,510 |
| | $ | 88,297 |
| | 17.2% |
Adjusted Hotel EBITDA Margin | | 37.7 | % | | 36.1 | % | | 160 bps | | 34.1 | % | | 31.8 | % | | 230 bps |
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19-Hotel Portfolio | | | | | | | | | | | | |
Occupancy | | 83.8 | % | | 85.2 | % | | (140) bps | | 81.0 | % | | 81.2 | % | | (20) bps |
ADR | | $ | 226.65 |
| | $ | 207.65 |
| | 9.2% | | $ | 208.93 |
| | $ | 197.29 |
| | 5.9% |
RevPAR | | $ | 189.94 |
| | $ | 176.99 |
| | 7.3% | | $ | 169.31 |
| | $ | 160.20 |
| | 5.7% |
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Adjusted Hotel EBITDA | | $ | 46,490 |
| | $ | 42,097 |
| | 10.4% | | $ | 114,190 |
| | $ | 103,179 |
| | 10.7% |
Adjusted Hotel EBITDA Margin | | 36.0 | % | | 34.9 | % | | 110 bps | | 32.7 | % | | 31.1 | % | | 160 bps |
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(1) | Includes results of operations for certain hotels prior to their acquisition by the Trust. |
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(2) | Excludes the W Chicago – Lakeshore, the Hotel New Orleans Downtown (formerly the W New Orleans), and the Hyatt Herald Square New York (formerly the Holiday Inn New York City Midtown – 31st Street), as these hotels have undergone or are undergoing comprehensive renovations during 2014. |
Hotel EBITDA, Adjusted Hotel EBITDA, Adjusted Hotel EBITDA Margin, Corporate EBITDA, Adjusted Corporate EBITDA, FFO, FFO available to common shareholders and AFFO available to common shareholders are non-GAAP financial measures within the meaning of the rules of the Securities and Exchange Commission. See the discussion included in this press release for information regarding these non-GAAP financial measures.
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| | PRESS RELEASE For Immediate Release Contact: Douglas W. Vicari (410) 972-4142 |
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DISPOSITION
On September 30, 2014, the Trust sold the 153-room Courtyard Anaheim at Disneyland Resort located in Anaheim, California for $32.5 million, including sold working capital, which resulted in a gain on sale of $7.0 million. The Courtyard Anaheim at Disneyland Resort was one of the Trust’s earliest investments, acquired in July 2010 for $25.0 million. The $32.5 million sale price represented a 7.1% trailing twelve month NOI cap rate and produced a 13.3% unleveraged internal rate of return for the Trust over its ownership period. In conjunction with the sale of the Courtyard Anaheim at Disneyland Resort, the Trust executed a 1031 exchange with the acquisition of the JW Marriott San Francisco Union Square on October 1, 2014.
ACQUISITION
On October 1, 2014, the Trust acquired the 337-room JW Marriott San Francisco Union Square located in San Francisco, California for $154.2 million, including an acquired FF&E reserve and working capital. The Trust assumed the existing management agreement with Marriott International, Inc., as well as the existing ground lease covering the property, which expires in January 2083.
MAJOR REPOSITIONINGS
The comprehensive renovation at the 520-room W Chicago – Lakeshore, which commenced in the third quarter of 2013, was completed in the second quarter of 2014 with a total expected cost of approximately $38.0 million.
The comprehensive renovation at the former 410-room W New Orleans to reposition the hotel commenced in the second quarter of 2014. In July 2014, the Trust and its hotel manager, Starwood Hotels & Resorts Worldwide, Inc., agreed to remove the W brand from the hotel for the duration of the renovation and rename it the Hotel New Orleans Downtown. The Trust continues to expect the renovation will cost approximately $29.0 million and be completed in the fourth quarter of 2014, at which time the hotel will be re-branded as the Le Meridien New Orleans.
The comprehensive renovation at the former 122-room Holiday Inn New York City Midtown – 31st Street to reposition the hotel as the Hyatt Herald Square New York, which commenced in the third quarter of 2014, was completed early in the fourth quarter of 2014 with a total expected cost of approximately $6.5 million.
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| | PRESS RELEASE For Immediate Release Contact: Douglas W. Vicari (410) 972-4142 |
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FINANCING ACTIVITY
On July 3, 2014, the Trust completed the refinancing of its $60.0 million term loan secured by the Hyatt Herald Square New York (formerly the Holiday Inn New York City Midtown – 31st Street) and the Hyatt Place New York Midtown South. The term loan was refinanced with a new 10-year, $90.0 million, fixed-rate mortgage loan secured by the two hotels mentioned previously. The loan carries a fixed interest rate of 4.30% per annum and requires interest-only payments for the first two years and principal and interest payments thereafter based on a 30-year principal amortization.
CAPITAL MARKETS ACTIVITY
On September 9, 2014, the Trust completed an underwritten public offering of 4,830,000 common shares, including 630,000 shares sold pursuant to the underwriters’ exercise of their option to purchase additional shares. The Trust generated net proceeds of $143.9 million after deducting offering costs.
The Trust has not sold any common shares under its continuous at-the-market (ATM) program during 2014 and through the date of this release.
DIVIDENDS
On July 15, 2014, the Trust paid dividends in the amounts of $0.30 per share to its common shareholders and $0.484375 per share to its preferred shareholders, both of record as of June 30, 2014. On September 16, 2014, the Trust declared dividends in the amounts of $0.30 per share payable to its common shareholders and $0.484375 per share payable to its preferred shareholders, both of record as of September 30, 2014. Both dividends were paid on October 15, 2014.
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| | PRESS RELEASE For Immediate Release Contact: Douglas W. Vicari (410) 972-4142 |
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2014 OUTLOOK
The Trust is updating its 2014 outlook to incorporate its third quarter results, recent operating trends and fundamentals, the sale of the Courtyard Anaheim at Disneyland Resort, the acquisition of the JW Marriott San Francisco Union Square, and the recent common share offering. The updated outlook assumes no additional acquisitions, dispositions, or financing transactions (in millions, except RevPAR and per share amounts):
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Fourth Quarter 2014 | | Outlook |
| | Low | | High |
CONSOLIDATED: | | | | |
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Net income available to common shareholders | | $ | 5.5 |
| | $ | 7.0 |
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Net income per diluted common share | | $ | 0.10 |
| | $ | 0.13 |
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Adjusted Corporate EBITDA | | $ | 33.8 |
| | $ | 35.3 |
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AFFO available to common shareholders | | $ | 23.7 |
| | $ | 25.2 |
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AFFO per diluted common share | | $ | 0.44 |
| | $ | 0.47 |
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Corporate general and administrative expense | | $ | 3.7 |
| | $ | 3.8 |
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Weighted-average number of diluted common shares outstanding | | 54.0 |
| | 54.0 |
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HOTEL PORTFOLIO: | | | | |
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17-Hotel Portfolio(1) | | | | |
RevPAR | | $ | 170.00 |
| | $ | 173.00 |
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Pro forma RevPAR increase over 2013(2) | | 6.0 | % | | 8.0 | % |
Adjusted Hotel EBITDA | | $ | 32.2 |
| | $ | 33.6 |
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Adjusted Hotel EBITDA Margin | | 30.8 | % | | 31.6 | % |
Pro forma Adjusted Hotel EBITDA Margin increase over 2013(2) | | 50 bps |
| | 125 bps |
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20-Hotel Portfolio | | | | |
RevPAR | | $ | 166.00 |
| | $ | 169.00 |
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Pro forma RevPAR increase over 2013(2) | | 5.0 | % | | 7.0 | % |
Adjusted Hotel EBITDA | | $ | 37.4 |
| | $ | 39.1 |
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Adjusted Hotel EBITDA Margin | | 30.8 | % | | 31.5 | % |
Pro forma Adjusted Hotel EBITDA Margin increase over 2013(2) | | 40 bps |
| | 115 bps |
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(1) | Excludes the W Chicago – Lakeshore, the Hotel New Orleans Downtown (formerly the W New Orleans), and the Hyatt Herald Square New York (formerly the Holiday Inn New York City Midtown – 31st Street), as these hotels have undergone or are undergoing comprehensive renovations during 2014. |
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(2) | The comparable 2013 period includes results of operations for certain hotels prior to their acquisition by the Trust. |
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| | PRESS RELEASE For Immediate Release Contact: Douglas W. Vicari (410) 972-4142 |
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Full Year 2014 | | Updated Outlook | | Previous Outlook |
| | Low | | High | | Low | | High |
CONSOLIDATED: | | | | | | | | |
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Net income available to common shareholders | | $ | 50.0 |
| | $ | 51.4 |
| | $ | 40.6 |
| | $ | 44.5 |
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Net income per diluted common share | | $ | 0.99 |
| | $ | 1.02 |
| | $ | 0.83 |
| | $ | 0.91 |
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Adjusted Corporate EBITDA | | $ | 138.5 |
| | $ | 140.1 |
| | $ | 134.0 |
| | $ | 138.2 |
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AFFO available to common shareholders | | $ | 100.1 |
| | $ | 101.5 |
| | $ | 95.3 |
| | $ | 99.3 |
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AFFO per diluted common share | | $ | 1.98 |
| | $ | 2.01 |
| | $ | 1.95 |
| | $ | 2.03 |
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Corporate general and administrative expense | | $ | 15.2 |
| | $ | 15.3 |
| | $ | 14.8 |
| | $ | 15.3 |
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Weighted-average number of diluted common shares outstanding | | 50.6 |
| | 50.6 |
| | 49.0 |
| | 49.0 |
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HOTEL PORTFOLIO(1): | | | | | | | | |
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17-Hotel Portfolio(2) | | | | | | | | |
RevPAR | | $ | 181.00 |
| | $ | 182.00 |
| | $ | 169.00 |
| | $ | 172.00 |
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Pro forma RevPAR increase over 2013(3) | | 9.0 | % | | 9.5 | % | | 6.5 | % | | 8.0 | % |
Adjusted Hotel EBITDA | | $ | 143.6 |
| | $ | 145.1 |
| | $ | 131.9 |
| | $ | 135.6 |
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Adjusted Hotel EBITDA Margin | | 32.7 | % | | 32.9 | % | | 33.1 | % | | 33.6 | % |
Pro forma Adjusted Hotel EBITDA Margin increase over 2013(3) | | 175 bps |
| | 195 bps |
| | 140 bps |
| | 190 bps |
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20-Hotel Portfolio | | | | | | | | |
RevPAR | | $ | 173.00 |
| | $ | 174.00 |
| | $ | 163.00 |
| | $ | 166.00 |
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Pro forma RevPAR increase over 2013(3) | | 6.0 | % | | 6.5 | % | | 4.0 | % | | 6.0 | % |
Adjusted Hotel EBITDA | | $ | 159.6 |
| | $ | 161.3 |
| | $ | 148.8 |
| | $ | 153.5 |
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Adjusted Hotel EBITDA Margin | | 31.8 | % | | 32.0 | % | | 32.1 | % | | 32.5 | % |
Pro forma Adjusted Hotel EBITDA Margin increase over 2013(3) | | 120 bps |
| | 140 bps |
| | 90 bps |
| | 140 bps |
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(1) | Updated outlook excludes the Courtyard Anaheim at Disneyland Resort, which was sold on September 30, 2014, and includes the JW Marriott San Francisco Union Square, which was acquired on October 1, 2014. Previous outlook included the Courtyard Anaheim at Disneyland Resort and did not include the JW Marriott San Francisco Union Square. |
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(2) | Excludes the W Chicago – Lakeshore, the Hotel New Orleans Downtown (formerly the W New Orleans), and the Hyatt Herald Square New York (formerly the Holiday Inn New York City Midtown – 31st Street), as these hotels have undergone or are undergoing comprehensive renovations during 2014. |
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(3) | The comparable 2013 period includes results of operations for certain hotels prior to their acquisition by the Trust. |
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| | PRESS RELEASE For Immediate Release Contact: Douglas W. Vicari (410) 972-4142 |
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NON-GAAP FINANCIAL MEASURES
The Trust reports the following eight non-GAAP financial measures that it believes are useful to investors as key measures of its operating performance: (1) Hotel EBITDA, (2) Adjusted Hotel EBITDA, (3) Adjusted Hotel EBITDA Margin, (4) Corporate EBITDA, (5) Adjusted Corporate EBITDA, (6) FFO, (7) FFO available to common shareholders and (8) AFFO available to common shareholders. Reconciliations of these non-GAAP financial measures to the most comparable GAAP measure are included in the accompanying financial tables.
Hotel EBITDA – Hotel EBITDA is defined as total revenues less total hotel operating expenses. The Trust believes that Hotel EBITDA provides investors a useful financial measure to evaluate the Trust’s hotel operating performance.
Adjusted Hotel EBITDA – The Trust further adjusts Hotel EBITDA for certain additional recurring and non-recurring items. Specifically, the Trust adjusts for non-cash amortization of intangible assets and liabilities, including ground lease assets and unfavorable contract liabilities, deferred franchise costs, and deferred key money, all of which are recurring items. The Trust believes that Adjusted Hotel EBITDA provides investors with another useful financial measure to evaluate the Trust’s hotel operating performance.
Adjusted Hotel EBITDA Margin – Adjusted Hotel EBITDA Margin is defined as Adjusted Hotel EBITDA as a percentage of total revenues. The Trust believes that Adjusted Hotel EBITDA Margin provides investors another useful financial measure to evaluate the Trust’s hotel operating performance.
Corporate EBITDA – Corporate EBITDA is defined as net income before interest, income taxes, and depreciation and amortization. The Trust believes that Corporate EBITDA provides investors a useful financial measure to evaluate the Trust’s operating performance, excluding the impact of the Trust’s capital structure (primarily interest expense) and the Trust’s asset base (primarily depreciation and amortization).
Adjusted Corporate EBITDA – The Trust further adjusts Corporate EBITDA for certain additional recurring and non-recurring items. Specifically, the Trust adjusts for hotel acquisition costs and non-cash amortization of intangible assets and liabilities, including air rights contracts, ground lease assets and unfavorable contract liabilities, deferred franchise costs, and deferred key money, all of which are recurring items, and gains (losses) from sales of real estate, which is a non-recurring item. The Trust believes that Adjusted Corporate EBITDA provides investors with another financial measure of its operating performance that provides for greater comparability of its core operating results between periods.
FFO – The Trust calculates FFO in accordance with standards established by the National Association of Real Estate Investment Trusts (NAREIT), which defines FFO as net income (calculated in accordance with GAAP), excluding depreciation and amortization, impairment charges of depreciable real estate, gains
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| | PRESS RELEASE For Immediate Release Contact: Douglas W. Vicari (410) 972-4142 |
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(losses) from sales of real estate, the cumulative effect of changes in accounting principles, and adjustments for unconsolidated partnerships and joint ventures. Historical cost accounting for real estate assets implicitly assumes that the value of real estate assets diminishes predictably over time. Since real estate values instead have historically risen or fallen with market conditions, most industry investors consider presentations of operating results for real estate companies that use historical cost accounting to be insufficient by themselves. By excluding the effect of depreciation and amortization and gains (losses) from sales of real estate, both of which are based on historical cost accounting and which may be of lesser significance in evaluating current performance, the Trust believes that FFO provides investors a useful financial measure to evaluate the Trust’s operating performance.
FFO available to common shareholders – The Trust reduces FFO for preferred share dividends and dividends declared on and earnings allocated to unvested time-based awards (consistent with adjustments required by GAAP in reporting net income available to common shareholders and related per share amounts). FFO available to common shareholders provides investors another financial measure to evaluate the Trust’s operating performance after taking into account the interests of holders of the Trust’s preferred shares and unvested time-based awards.
AFFO available to common shareholders – The Trust further adjusts FFO available to common shareholders for certain additional recurring and non-recurring items that are not in NAREIT’s definition of FFO. Specifically, the Trust adjusts for hotel acquisition costs and non-cash amortization of intangible assets and liabilities, including air rights contracts, ground lease assets and unfavorable contract liabilities, deferred franchise costs, and deferred key money, all of which are recurring items. The Trust believes that AFFO available to common shareholders provides investors with another financial measure of its operating performance that provides for greater comparability of its core operating results between periods.
CONFERENCE CALL
The Trust will host a conference call on Monday, November 3, 2014 at 5:00 p.m. Eastern Time to discuss its financial results. Interested individuals are invited to listen to the call by dialing (877) 683-0303 (U.S./Canadian callers) or (706) 643-5037 (International callers). The conference call ID is 15295377. A simultaneous webcast of the call will be available on the Trust’s website at www.chesapeakelodgingtrust.com. It is recommended that participants call or log on 10 minutes ahead of the scheduled start time to ensure proper connection.
A replay of the conference call will be available two hours after the live call until midnight on November 10, 2014. To access the replay, dial (855) 859-2056 (U.S./Canadian callers) or (404) 537-3406 (International callers). The conference call ID is 15295377. A webcast replay and transcript of the conference call will be archived and available on the Trust’s website for 12 months.
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| | PRESS RELEASE For Immediate Release Contact: Douglas W. Vicari (410) 972-4142 |
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ABOUT CHESAPEAKE LODGING TRUST
Chesapeake Lodging Trust is a self-advised lodging real estate investment trust (REIT) focused on investments primarily in upper-upscale hotels in major business and convention markets and, on a selective basis, premium select-service hotels in urban settings or unique locations in the United States. The Trust owns 20 hotels with an aggregate of 6,116 rooms in eight states and the District of Columbia. Additional information can be found on the Trust’s website at www.chesapeakelodgingtrust.com.
Note: This press release contains forward-looking statements within the meaning of federal securities regulations. These forward-looking statements are identified by their use of terms and phrases such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “should,” “plan,” “predict,” “project,” “will,” “continue” and other similar terms and phrases, including references to assumptions and forecasts, such as the Trust’s expectations regarding the future Hotel EBITDA and Adjusted Hotel EBITDA of its existing hotels and the Trust’s 2014 outlook, and the Trust’s expectation of its ability and the cost and timing of completing various renovations at its existing hotels. Forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors which may cause the actual results to differ materially from those anticipated at the time the forward-looking statements are made. These risks include, but are not limited to: the Trust’s ability to complete renovations timely and within expected costs; the Trust’s ability to continue to satisfy complex rules in order for it to remain a REIT for federal income tax purposes; and other risks and uncertainties associated with the Trust’s business described in its filings with the SEC. Although the Trust believes the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that the expectations will be attained or that any deviation will not be material. All information in this release is as of November 3, 2014, and the Trust undertakes no obligation to update any forward-looking statement to conform the statement to actual results or changes in the Trust’s expectations, except as required by law.
CHESAPEAKE LODGING TRUST
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
|
| | | | | | | | |
| | September 30, 2014 | | December 31, 2013 |
| | (unaudited) | | |
ASSETS | | | | |
Property and equipment, net | | $ | 1,427,673 |
| | $ | 1,422,439 |
|
Intangible assets, net | | 37,137 |
| | 38,781 |
|
Cash and cash equivalents | | 180,495 |
| | 28,713 |
|
Restricted cash | | 40,035 |
| | 34,235 |
|
Accounts receivable, net | | 21,900 |
| | 13,011 |
|
Prepaid expenses and other assets | | 52,413 |
| | 10,478 |
|
Deferred financing costs, net | | 6,531 |
| | 6,501 |
|
Total assets | | $ | 1,766,184 |
| | $ | 1,554,158 |
|
| | | | |
LIABILITIES AND SHAREHOLDERS’ EQUITY | | | | |
Long-term debt | | $ | 589,287 |
| | $ | 531,771 |
|
Accounts payable and accrued expenses | | 51,200 |
| | 45,982 |
|
Other liabilities | | 32,897 |
| | 29,848 |
|
Total liabilities | | 673,384 |
| | 607,601 |
|
| | | | |
Commitments and contingencies | | | | |
| | | | |
Preferred shares, $.01 par value; 100,000,000 shares authorized; Series A Cumulative Redeemable Preferred Shares; 5,000,000 shares issued and outstanding ($127,422 liquidation preference) | | 50 |
| | 50 |
|
Common shares, $.01 par value; 400,000,000 shares authorized; 54,878,586 shares and 49,574,005 shares issued and outstanding, respectively | | 549 |
| | 496 |
|
Additional paid-in capital | | 1,139,179 |
| | 991,417 |
|
Cumulative dividends in excess of net income | | (46,978 | ) | | (45,339 | ) |
Accumulated other comprehensive loss | | — |
| | (67 | ) |
Total shareholders’ equity | | 1,092,800 |
| | 946,557 |
|
Total liabilities and shareholders’ equity | | $ | 1,766,184 |
| | $ | 1,554,158 |
|
| | | | |
| | | | |
SUPPLEMENTAL CREDIT INFORMATION: | | | | |
Fixed charge coverage ratio(1) | | 2.61 |
| | 2.67 |
|
Leverage ratio(1) | | 33.3 | % | | 33.5 | % |
______________
| |
(1) | Calculated as defined under the Trust’s revolving credit facility. |
CHESAPEAKE LODGING TRUST
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share data)
(unaudited)
|
| | | | | | | | | | | | | | | | |
| | Three Months Ended September 30, | | Nine Months Ended September 30, |
| | 2014 | | 2013 | | 2014 | | 2013 |
REVENUE | | | | | | | | |
Rooms | | $ | 102,473 |
| | $ | 95,547 |
| | $ | 271,430 |
| | $ | 234,037 |
|
Food and beverage | | 22,883 |
| | 21,955 |
| | 69,214 |
| | 62,180 |
|
Other | | 5,484 |
| | 4,941 |
| | 13,835 |
| | 12,397 |
|
Total revenue | | 130,840 |
| | 122,443 |
| | 354,479 |
| | 308,614 |
|
| | | | | | | | |
EXPENSES | | | | | | | | |
Hotel operating expenses: | | | | | | | | |
Rooms | | 21,985 |
| | 20,861 |
| | 61,930 |
| | 54,047 |
|
Food and beverage | | 17,860 |
| | 17,558 |
| | 52,800 |
| | 47,292 |
|
Other direct | | 2,234 |
| | 2,333 |
| | 6,013 |
| | 6,040 |
|
Indirect | | 42,641 |
| | 38,780 |
| | 118,423 |
| | 100,485 |
|
Total hotel operating expenses | | 84,720 |
| | 79,532 |
| | 239,166 |
| | 207,864 |
|
Depreciation and amortization | | 12,466 |
| | 12,335 |
| | 37,488 |
| | 32,012 |
|
Air rights contract amortization | | 130 |
| | 130 |
| | 390 |
| | 390 |
|
Corporate general and administrative | | 3,694 |
| | 2,936 |
| | 11,505 |
| | 9,921 |
|
Hotel acquisition costs | | 60 |
| | 59 |
| | 60 |
| | 4,195 |
|
Total operating expenses | | 101,070 |
| | 94,992 |
| | 288,609 |
| | 254,382 |
|
| | | | | | | | |
Operating income | | 29,770 |
| | 27,451 |
| | 65,870 |
| | 54,232 |
|
| | | | | | | | |
Interest income | | 8 |
| | 4 |
| | 8 |
| | 247 |
|
Interest expense | | (6,963 | ) | | (7,199 | ) | | (20,477 | ) | | (18,986 | ) |
Gain on sale of hotel | | 7,006 |
| | — |
| | 7,006 |
| | — |
|
Loss on early extinguishment of debt | | — |
| | (372 | ) | | — |
| | (372 | ) |
| | | | | | | | |
Income before income taxes | | 29,821 |
| | 19,884 |
| | 52,407 |
| | 35,121 |
|
| | | | | | | | |
Income tax expense | | (1,133 | ) | | (641 | ) | | (292 | ) | | (1,331 | ) |
| | | | | | | | |
Net income | | 28,688 |
| | 19,243 |
| | 52,115 |
| | 33,790 |
|
| | | | | | | | |
Preferred share dividends | | (2,422 | ) | | (2,422 | ) | | (7,266 | ) | | (7,266 | ) |
Net income available to common shareholders | | $ | 26,266 |
| | $ | 16,821 |
| | $ | 44,849 |
| | $ | 26,524 |
|
| | | | | | | | |
Net income per common share: | | | | | | | | |
Basic | | $ | 0.52 |
| | $ | 0.35 |
| | $ | 0.90 |
| | $ | 0.56 |
|
Diluted | | $ | 0.52 |
| | $ | 0.35 |
| | $ | 0.89 |
| | $ | 0.56 |
|
| | | | | | | | |
Weighted-average number of common shares outstanding: | | | | | | | | |
Basic | | 50,141,513 |
| | 47,885,696 |
| | 49,364,637 |
| | 46,759,598 |
|
Diluted | | 50,567,849 |
| | 47,885,696 |
| | 49,758,044 |
| | 46,759,598 |
|
CHESAPEAKE LODGING TRUST
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited) |
| | | | | | | | |
| | Nine Months Ended September 30, |
| | 2014 | | 2013 |
Cash flows from operating activities: | | | | |
Net income | | $ | 52,115 |
| | $ | 33,790 |
|
Adjustments to reconcile net income to net cash provided by operating activities: | | | | |
Depreciation and amortization | | 37,488 |
| | 32,012 |
|
Air rights contract amortization | | 390 |
| | 390 |
|
Deferred financing costs amortization | | 1,950 |
| | 2,102 |
|
Gain on sale of hotel | | (7,006 | ) | | — |
|
Loss on early extinguishment of debt | | — |
| | 372 |
|
Share-based compensation | | 4,311 |
| | 3,458 |
|
Other | | 771 |
| | (155 | ) |
Changes in assets and liabilities: | | | | |
Accounts receivable, net | | (8,958 | ) | | (9,628 | ) |
Prepaid expenses and other assets | | 26 |
| | (1,194 | ) |
Accounts payable and accrued expenses | | 4,629 |
| | 10,467 |
|
Other liabilities | | (22 | ) | | 782 |
|
Net cash provided by operating activities | | 85,694 |
| | 72,396 |
|
| | | | |
Cash flows from investing activities: | | | | |
Acquisition of hotels, net of cash acquired | | — |
| | (331,058 | ) |
Disposition of hotel, net of cash sold | | 31,933 |
| | — |
|
Deposit on hotel acquisition | | (42,142 | ) | | — |
|
Receipt of deposit on hotel acquisition | | — |
| | 700 |
|
Improvements and additions to hotels | | (67,500 | ) | | (19,510 | ) |
Repayment of hotel construction loan | | — |
| | 7,810 |
|
Change in restricted cash | | (5,680 | ) | | (8,066 | ) |
Net cash used in investing activities | | (83,389 | ) | | (350,124 | ) |
| | | | |
Cash flows from financing activities: | | | | |
Proceeds from sale of common shares, net of underwriting fees | | 144,320 |
| | 169,855 |
|
Payment of offering costs related to sale of common shares | | (378 | ) | | (406 | ) |
Borrowings under revolving credit facility | | 85,000 |
| | 105,000 |
|
Repayments under revolving credit facility | | (50,000 | ) | | (125,000 | ) |
Proceeds from issuance of mortgage debt | | 90,000 |
| | 312,500 |
|
Principal prepayment on mortgage debt | | — |
| | (130,000 | ) |
Scheduled principal payments on mortgage debt | | (67,326 | ) | | (3,321 | ) |
Payment of deferred financing costs | | (1,980 | ) | | (3,075 | ) |
Payment of dividends to common shareholders | | (42,455 | ) | | (31,899 | ) |
Payment of dividends to preferred shareholders | | (7,266 | ) | | (7,266 | ) |
Repurchase of common shares | | (438 | ) | | (1,098 | ) |
Net cash provided by financing activities | | 149,477 |
| | 285,290 |
|
Net increase in cash | | 151,782 |
| | 7,562 |
|
Cash and cash equivalents, beginning of period | | 28,713 |
| | 33,194 |
|
Cash and cash equivalents, end of period | | $ | 180,495 |
| | $ | 40,756 |
|
CHESAPEAKE LODGING TRUST
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(in thousands, except per share data)
(unaudited)
The following table calculates Hotel EBITDA, Adjusted Hotel EBITDA, and Adjusted Hotel EBITDA Margin for the 16-hotel portfolio and the 19-hotel portfolio for the three and nine months ended September 30, 2014 and 2013:
|
| | | | | | | | | | | | | | | | |
| | Three Months Ended September 30, | | Nine Months Ended September 30, |
| | 2014 | | 2013 | | 2014 | | 2013(1) |
16-Hotel Portfolio(2) | | | | | | | | |
Total revenue | | $ | 112,624 |
| | $ | 102,185 |
| | $ | 303,399 |
| | $ | 277,645 |
|
Less: Total hotel operating expenses | | 71,336 |
| | 65,265 |
| | 200,855 |
| | 189,122 |
|
Hotel EBITDA | | 41,288 |
| | 36,920 |
| | 102,544 |
| | 88,523 |
|
| | | | | | | | |
Add: Non-cash amortization(3) | | 1,118 |
| | (75 | ) | | 966 |
| | (226 | ) |
Adjusted Hotel EBITDA | | $ | 42,406 |
| | $ | 36,845 |
| | $ | 103,510 |
| | $ | 88,297 |
|
| | | | | | | | |
Adjusted Hotel EBITDA Margin | | 37.7 | % | | 36.1 | % | | 34.1 | % | | 31.8 | % |
| | | | | | | | |
19-Hotel Portfolio | | | | | | | | |
Total revenue | | $ | 129,038 |
| | $ | 120,705 |
| | $ | 349,313 |
| | $ | 331,758 |
|
Less: Total hotel operating expenses | | 83,666 |
| | 78,533 |
| | 236,089 |
| | 228,353 |
|
Hotel EBITDA | | 45,372 |
| | 42,172 |
| | 113,224 |
| | 103,405 |
|
| | | | | | | | |
Add: Non-cash amortization(3) | | 1,118 |
| | (75 | ) | | 966 |
| | (226 | ) |
Adjusted Hotel EBITDA | | $ | 46,490 |
| | $ | 42,097 |
| | $ | 114,190 |
| | $ | 103,179 |
|
| | | | | | | | |
Adjusted Hotel EBITDA Margin | | 36.0 | % | | 34.9 | % | | 32.7 | % | | 31.1 | % |
_____________
| |
(1) | Includes results of operations for certain hotels prior to their acquisition by the Trust. |
| |
(2) | Excludes the W Chicago – Lakeshore, the Hotel New Orleans Downtown (formerly the W New Orleans), and the Hyatt Herald Square New York (formerly the Holiday Inn New York City Midtown – 31st Street), as these hotels have undergone or are undergoing comprehensive renovations during 2014. |
| |
(3) | Includes non-cash amortization of ground lease asset, deferred franchise costs, deferred key money, and unfavorable contract liability. |
The following table calculates Hotel EBITDA and Adjusted Hotel EBITDA contributed by the Trust’s hotel portfolio for the three and nine months ended September 30, 2014 and 2013:
|
| | | | | | | | | | | | | | | | |
| | Three Months Ended September 30, | | Nine Months Ended September 30, |
| | 2014 | | 2013 | | 2014 | | 2013 |
Total revenue | | $ | 130,840 |
| | $ | 122,443 |
| | $ | 354,479 |
| | $ | 308,614 |
|
Less: Total hotel operating expenses | | 84,720 |
| | 79,532 |
| | 239,166 |
| | 207,864 |
|
Hotel EBITDA | | 46,120 |
| | 42,911 |
| | 115,313 |
| | 100,750 |
|
| | | | | | | | |
Add: Non-cash amortization(1) | | 1,119 |
| | (74 | ) | | 970 |
| | (222 | ) |
Adjusted Hotel EBITDA | | $ | 47,239 |
| | $ | 42,837 |
| | $ | 116,283 |
| | $ | 100,528 |
|
_____________
| |
(1) | Includes non-cash amortization of ground lease asset, deferred franchise costs, deferred key money, and unfavorable contract liability. |
CHESAPEAKE LODGING TRUST
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(in thousands, except per share data)
(unaudited)
The following table reconciles net income to Corporate EBITDA and Adjusted Corporate EBITDA for the three and nine months ended September 30, 2014 and 2013:
|
| | | | | | | | | | | | | | | | |
| | Three Months Ended September 30, | | Nine Months Ended September 30, |
| | 2014 | | 2013 | | 2014 | | 2013 |
Net income | | $ | 28,688 |
| | $ | 19,243 |
| | $ | 52,115 |
| | $ | 33,790 |
|
Add: Depreciation and amortization | | 12,466 |
| | 12,335 |
| | 37,488 |
| | 32,012 |
|
Interest expense | | 6,963 |
| | 7,199 |
| | 20,477 |
| | 18,986 |
|
Loss on early extinguishment of debt | | — |
| | 372 |
| | — |
| | 372 |
|
Income tax expense | | 1,133 |
| | 641 |
| | 292 |
| | 1,331 |
|
Less: Interest income | | (8 | ) | | (4 | ) | | (8 | ) | | (247 | ) |
Corporate EBITDA | | 49,242 |
| | 39,786 |
| | 110,364 |
| | 86,244 |
|
| | | | | | | | |
Add: Hotel acquisition costs | | 60 |
| | 59 |
| | 60 |
| | 4,195 |
|
Non-cash amortization(1) | | 1,248 |
| | 55 |
| | 1,359 |
| | 167 |
|
Less: Gain on sale of hotel | | (7,006 | ) | | — |
| | (7,006 | ) | | — |
|
Adjusted Corporate EBITDA | | $ | 43,544 |
| | $ | 39,900 |
| | $ | 104,777 |
| | $ | 90,606 |
|
____________
| |
(1) | Includes non-cash amortization of ground lease asset, deferred franchise costs, deferred key money, unfavorable contract liability, and air rights contract. |
CHESAPEAKE LODGING TRUST
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(in thousands, except per share data)
(unaudited)
The following table reconciles net income to FFO, FFO available to common shareholders, and AFFO available to common shareholders for the three and nine months ended September 30, 2014 and 2013:
|
| | | | | | | | | | | | | | | | |
| | Three Months Ended September 30, | | Nine Months Ended September 30, |
| | 2014 | | 2013 | | 2014 | | 2013 |
Net income | | $ | 28,688 |
| | $ | 19,243 |
| | $ | 52,115 |
| | $ | 33,790 |
|
Add: Depreciation and amortization | | 12,466 |
| | 12,335 |
| | 37,488 |
| | 32,012 |
|
Less: Gain on sale of hotel | | (7,006 | ) | | — |
| | (7,006 | ) | | — |
|
FFO | | 34,148 |
| | 31,578 |
| | 82,597 |
| | 65,802 |
|
| | | | | | | | |
Less: Preferred share dividends | | (2,422 | ) | | (2,422 | ) | | (7,266 | ) | | (7,266 | ) |
Dividends declared on unvested time-based awards | | (128 | ) | | (98 | ) | | (385 | ) | | (276 | ) |
Undistributed earnings allocated to unvested time-based awards | | (84 | ) | | (33 | ) | | — |
| | — |
|
FFO available to common shareholders | | 31,514 |
| | 29,025 |
| | 74,946 |
| | 58,260 |
|
| | | | | | | | |
Add: Hotel acquisition costs | | 60 |
| | 59 |
| | 60 |
| | 4,195 |
|
Non-cash amortization(1) | | 1,248 |
| | 55 |
| | 1,359 |
| | 167 |
|
AFFO available to common shareholders | | $ | 32,822 |
| | $ | 29,139 |
| | $ | 76,365 |
| | $ | 62,622 |
|
| | | | | | | | |
FFO per common share: | | | | | | | | |
Basic | | $ | 0.63 |
| | $ | 0.61 |
| | $ | 1.52 |
| | $ | 1.25 |
|
Diluted | | $ | 0.62 |
| | $ | 0.61 |
| | $ | 1.51 |
| | $ | 1.25 |
|
| | | | | | | | |
AFFO per common share: | | | | | | | | |
Basic | | $ | 0.65 |
| | $ | 0.61 |
| | $ | 1.55 |
| | $ | 1.34 |
|
Diluted | | $ | 0.65 |
| | $ | 0.61 |
| | $ | 1.53 |
| | $ | 1.34 |
|
____________
| |
(1) | Includes non-cash amortization of ground lease asset, deferred franchise costs, deferred key money, unfavorable contract liability, and air rights contract. |
CHESAPEAKE LODGING TRUST
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(in thousands, except per share data)
(unaudited)
The following table calculates forecasted Hotel EBITDA and Adjusted Hotel EBITDA for the 17-hotel portfolio and the 20-hotel portfolio for the three months ending December 31, 2014:
|
| | | | | | | | | | | | | | | | |
| | Three Months Ending December 31, 2014 |
| | 17-Hotel Portfolio(1) | | 20-Hotel Portfolio |
| | Low | | High | | Low | | High |
Total revenue | | $ | 104,350 |
| | $ | 106,470 |
| | $ | 121,600 |
| | $ | 124,100 |
|
Less: Total hotel operating expenses | | 72,120 |
| | 72,790 |
| | 84,120 |
| | 84,920 |
|
Hotel EBITDA | | 32,230 |
| | 33,680 |
| | 37,480 |
| | 39,180 |
|
| | | | | | | | |
Less: Non-cash amortization(2) | | (80 | ) | | (80 | ) | | (80 | ) | | (80 | ) |
Adjusted Hotel EBITDA | | $ | 32,150 |
| | $ | 33,600 |
| | $ | 37,400 |
| | $ | 39,100 |
|
_____________
| |
(1) | Excludes the W Chicago – Lakeshore, the Hotel New Orleans Downtown (formerly the W New Orleans), and the Hyatt Herald Square New York (formerly the Holiday Inn New York City Midtown – 31st Street), as these hotels have undergone or are undergoing comprehensive renovations during 2014. |
| |
(2) | Includes non-cash amortization of ground lease asset, deferred franchise costs, deferred key money, and unfavorable contract liability. |
The following table reconciles forecasted net income to Corporate EBITDA and Adjusted Corporate EBITDA for the three months ending December 31, 2014:
|
| | | | | | | | |
| | Three Months Ending December 31, 2014 |
| | Low | | High |
Net income | | $ | 8,040 |
| | $ | 9,490 |
|
Add: Depreciation and amortization | | 14,340 |
| | 14,340 |
|
Interest expense | | 6,880 |
| | 6,880 |
|
Income tax expense | | 610 |
| | 710 |
|
Less: Interest income | | — |
| | — |
|
Corporate EBITDA | | 29,870 |
| | 31,420 |
|
| | | | |
Add: Hotel acquisition costs | | 3,830 |
| | 3,830 |
|
Non-cash amortization(1) | | 50 |
| | 50 |
|
Adjusted Corporate EBITDA | | $ | 33,750 |
| | $ | 35,300 |
|
_____________
| |
(1) | Includes non-cash amortization of ground lease asset, deferred franchise costs, deferred key money, unfavorable contract liability, and air rights contract. |
CHESAPEAKE LODGING TRUST
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(in thousands, except per share data)
(unaudited)
The following table reconciles forecasted net income to FFO, FFO available to common shareholders, and AFFO available to common shareholders for the three months ending December 31, 2014:
|
| | | | | | | | |
| | Three Months Ending December 31, 2014 |
| | Low | | High |
Net income | | $ | 8,040 |
| | $ | 9,490 |
|
Add: Depreciation and amortization | | 14,340 |
| | 14,340 |
|
FFO | | 22,380 |
| | 23,830 |
|
| | | | |
Less: Preferred share dividends | | (2,420 | ) | | (2,420 | ) |
Dividends declared on unvested time-based awards | | (120 | ) | | (120 | ) |
Undistributed earnings allocated to unvested time-based awards | | — |
| | — |
|
FFO available to common shareholders | | 19,840 |
| | 21,290 |
|
| | | | |
Add: Hotel acquisition costs | | 3,830 |
| | 3,830 |
|
Non-cash amortization(1) | | 50 |
| | 50 |
|
AFFO available to common shareholders | | $ | 23,720 |
| | $ | 25,170 |
|
| | | | |
FFO per common share: | | | | |
Basic | | $ | 0.37 |
| | $ | 0.40 |
|
Diluted | | $ | 0.37 |
| | $ | 0.39 |
|
| | | | |
AFFO per common share: | | | | |
Basic | | $ | 0.44 |
| | $ | 0.47 |
|
Diluted | | $ | 0.44 |
| | $ | 0.47 |
|
| | | | |
Weighted-average number of common shares outstanding: | | | | |
Basic | | 53,825 |
| | 53,825 |
|
Diluted | | 54,000 |
| | 54,000 |
|
_____________
| |
(1) | Includes non-cash amortization of ground lease asset, deferred franchise costs, deferred key money, unfavorable contract liability, and air rights contract. |
CHESAPEAKE LODGING TRUST
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(in thousands, except per share data)
(unaudited)
The following table calculates forecasted Hotel EBITDA and Adjusted Hotel EBITDA for the 17-hotel portfolio and the 20-hotel portfolio for the year ending December 31, 2014:
|
| | | | | | | | | | | | | | | | |
| | Year Ending December 31, 2014 |
| | 17-Hotel Portfolio(1) | | 20-Hotel Portfolio |
| | Low | | High | | Low | | High |
Total revenue | | $ | 439,000 |
| | $ | 441,100 |
| | $ | 502,100 |
| | $ | 504,700 |
|
Less: Total hotel operating expenses | | 296,260 |
| | 296,910 |
| | 343,430 |
| | 344,330 |
|
Hotel EBITDA | | 142,740 |
| | 144,190 |
| | 158,670 |
| | 160,370 |
|
| | | | | | | | |
Add: Non-cash amortization(2) | | 890 |
| | 890 |
| | 890 |
| | 890 |
|
Adjusted Hotel EBITDA | | $ | 143,630 |
| | $ | 145,080 |
| | $ | 159,560 |
| | $ | 161,260 |
|
_____________
| |
(1) | Excludes the W Chicago – Lakeshore, the Hotel New Orleans Downtown (formerly the W New Orleans), and the Hyatt Herald Square New York (formerly the Holiday Inn New York City Midtown – 31st Street), as these hotels have undergone or are undergoing comprehensive renovations during 2014. |
| |
(2) | Includes non-cash amortization of ground lease asset, deferred franchise costs, deferred key money, and unfavorable contract liability. |
The following table reconciles forecasted net income to Corporate EBITDA and Adjusted Corporate EBITDA for the year ending December 31, 2014:
|
| | | | | | | | |
| | Year Ending December 31, 2014 |
| | Low | | High |
Net income | | $ | 60,160 |
| | $ | 61,610 |
|
Add: Depreciation and amortization | | 51,830 |
| | 51,830 |
|
Interest expense | | 27,360 |
| | 27,360 |
|
Income tax expense | | 900 |
| | 1,000 |
|
Less: Interest income | | (10 | ) | | (10 | ) |
Corporate EBITDA | | 140,240 |
| | 141,790 |
|
| | | | |
Add: Hotel acquisition costs | | 3,890 |
| | 3,890 |
|
Non-cash amortization(1) | | 1,410 |
| | 1,410 |
|
Less: Gain on sale of hotel | | (7,010 | ) | | (7,010 | ) |
Adjusted Corporate EBITDA | | $ | 138,530 |
| | $ | 140,080 |
|
____________
| |
(1) | Includes non-cash amortization of ground lease asset, deferred franchise costs, deferred key money, unfavorable contract liability, and air rights contract. |
CHESAPEAKE LODGING TRUST
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(in thousands, except per share data)
(unaudited)
The following table reconciles forecasted net income to FFO, FFO available to common shareholders, and AFFO available to common shareholders for the year ending December 31, 2014:
|
| | | | | | | | |
| | Year Ending December 31, 2014 |
| | Low | | High |
Net income | | $ | 60,160 |
| | $ | 61,610 |
|
Add: Depreciation and amortization | | 51,830 |
| | 51,830 |
|
Less: Gain on sale of hotel | | (7,010 | ) | | (7,010 | ) |
FFO | | 104,980 |
| | 106,430 |
|
Less: Preferred share dividends | | (9,690 | ) | | (9,690 | ) |
Dividends declared on unvested time-based awards | | (500 | ) | | (500 | ) |
Undistributed earnings allocated to unvested time-based awards | | — |
| | — |
|
FFO available to common shareholders | | 94,790 |
| | 96,240 |
|
| | | | |
Add: Hotel acquisition costs | | 3,890 |
| | 3,890 |
|
Non-cash amortization(1) | | 1,410 |
| | 1,410 |
|
AFFO available to common shareholders | | $ | 100,090 |
| | $ | 101,540 |
|
| | | | |
FFO per common share: | | | | |
Basic | | $ | 1.88 |
| | $ | 1.91 |
|
Diluted | | $ | 1.87 |
| | $ | 1.90 |
|
| | | | |
AFFO per common share: | | | | |
Basic | | $ | 1.98 |
| | $ | 2.01 |
|
Diluted | | $ | 1.98 |
| | $ | 2.01 |
|
| | | | |
Weighted-average number of common shares outstanding: | | | | |
Basic | | 50,490 |
| | 50,490 |
|
Diluted | | 50,620 |
| | 50,620 |
|
____________
| |
(1) | Includes non-cash amortization of ground lease asset, deferred franchise costs, deferred key money, unfavorable contract liability, and air rights contract. |
CHESAPEAKE LODGING TRUST
CURRENT HOTEL PORTFOLIO
|
| | | | | | | | |
Hotel | | Location | | Rooms | | Acquisition Date |
1 | | Hyatt Regency Boston | | Boston, MA | | 502 | | March 18, 2010 |
2 | | Hilton Checkers Los Angeles | | Los Angeles, CA | | 193 | | June 1, 2010 |
3 | | Boston Marriott Newton | | Newton, MA | | 430 | | July 30, 2010 |
4 | | Le Meridien San Francisco | | San Francisco, CA | | 360 | | December 15, 2010 |
5 | | Homewood Suites Seattle Convention Center | | Seattle, WA | | 195 | | May 2, 2011 |
6 | | W Chicago – City Center | | Chicago, IL | | 403 | | May 10, 2011 |
7 | | Hotel Indigo San Diego Gaslamp Quarter | | San Diego, CA | | 210 | | June 17, 2011 |
8 | | Courtyard Washington Capitol Hill/Navy Yard | | Washington, DC | | 204 | | June 30, 2011 |
9 | | Hotel Adagio San Francisco, Autograph Collection | | San Francisco, CA | | 171 | | July 8, 2011 |
10 | | Denver Marriott City Center | | Denver, CO | | 613 | | October 3, 2011 |
11 | | Hyatt Herald Square New York (formerly the Holiday Inn New York City Midtown – 31st Street) | | New York, NY | | 122 | | December 22, 2011 |
12 | | W Chicago – Lakeshore | | Chicago, IL | | 520 | | August 21, 2012 |
13 | | Hyatt Regency Mission Bay Spa and Marina | | San Diego, CA | | 429 | | September 7, 2012 |
14 | | The Hotel Minneapolis, Autograph Collection | | Minneapolis, MN | | 222 | | October 30, 2012 |
15 | | Hyatt Place New York Midtown South | | New York, NY | | 185 | | March 14, 2013 |
16 | | W New Orleans – French Quarter | | New Orleans, LA | | 97 | | March 28, 2013 |
17 | | Hotel New Orleans Downtown (formerly the W New Orleans) | | New Orleans, LA | | 410 | | April 25, 2013 |
18 | | Hyatt Fisherman’s Wharf | | San Francisco, CA | | 313 | | May 31, 2013 |
19 | | Hyatt Santa Barbara | | Santa Barbara, CA | | 200 | | June 27, 2013 |
20 | | JW Marriott San Francisco Union Square | | San Francisco, CA | | 337 | | October 1, 2014 |
| | | | | | 6,116 | | |
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