Chesapeake Lodging Trust (NYSE:CHSP), a lodging real estate
investment trust (REIT), reported today its financial results for
the quarter ended December 31, 2014.
HIGHLIGHTS
- RevPAR: 7.5% pro forma increase for
the 17-hotel portfolio and 4.9% pro forma increase for the 20-hotel
portfolio over the same period in 2013.
- Adjusted Hotel
EBITDA Margin: 70 basis point pro forma increase
to 31.0% for the 17-hotel portfolio and 20 basis point pro forma
increase to 30.5% for the 20-hotel portfolio over the same period
in 2013.
- Adjusted Hotel
EBITDA: $37.7 million.
- Adjusted
Corporate EBITDA: $33.7 million.
- Adjusted
FFO: $24.0 million or $0.44 per diluted common
share.
- Acquisitions: Acquired the 337-room
JW Marriott San Francisco Union Square for a purchase price of
$147.2 million. Subsequent to quarter end, entered into a
definitive agreement to acquire the 393-room James Royal Palm
located in Miami Beach, Florida for a purchase price of $278.0
million.
- Dividends: Increased first quarter
2015 dividend by 17% to $0.35 per common share (3.8% annualized
yield based on the closing price of the Trust’s common shares on
February 18, 2015).
“We are very excited to announce our entrance into the highly
desirable Miami South Beach market with the pending acquisition of
The James Royal Palm,” said James L. Francis, Chesapeake Lodging
Trust’s President and Chief Executive Officer. “The Royal Palm,
which recently underwent a comprehensive renovation, has an
irreplaceable oceanfront location at the intersection of Collins
Avenue and 15th Street.” Mr. Francis continued, “We believe the
hotel has significant upside potential in both revenue and
profitability and we are happy to partner with both HEI Hotels
& Resorts, as the new hotel manager, and Starwood Hotels &
Resorts, as the franchisor, on this project.”
CONSOLIDATED FINANCIAL RESULTS
The following is a summary of the consolidated financial results
for the three months and year ended December 31, 2014 and 2013
(in millions, except share and per share amounts):
Three Months Ended
December 31,
Year
Ended December
31,
2014(1) 2013(1) 2014(2)
2013(3) Total revenue $ 123.5 $ 111.6 $ 478.0 $ 420.2 Net
income available to common shareholders $ 6.4 $ 9.1 $ 51.3 $ 35.6
Net income per diluted common share $ 0.12 $ 0.18 $ 1.00 $ 0.75
Adjusted Hotel EBITDA $ 37.7 $ 34.4 $ 154.0 $ 134.9
Adjusted Corporate EBITDA $ 33.7 $ 31.2 $ 138.4 $ 121.8 AFFO
available to common shareholders $ 24.0 $ 21.6 $ 100.4 $ 84.2 AFFO
per diluted common share $ 0.44 $ 0.44 $ 1.97 $ 1.78
Weighted-average number of diluted common shares outstanding
54,262,749 48,884,102 50,890,861 47,295,089 ___________ (1)
Includes results of operations of 20 hotels for the full
period. (2) Includes results of operations of 19 hotels for the
full period and two hotels for part of the period. (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 December 31, 2014, the Trust owned 20 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 one
of our hotels owned as of December 31, 2014 was acquired during
2014 and five of our hotels owned as of December 31, 2014 were
acquired at various times during 2013, the key operating metrics
reflect the pro forma operating results for those hotels for all,
or a certain period, of the years ended December 31, 2014 and
2013.
In addition to assessing the operating performance of its
20-hotel portfolio for the three months and year ended December 31,
2014, management also assesses the operating performance of a
17-hotel portfolio, which excludes the W Chicago – Lakeshore, the
Le Meridien New Orleans, and the Hyatt Herald Square New York, as
these hotels were undergoing comprehensive renovations during 2014.
Included in the following table are comparisons of the key
operating metrics for the 17-hotel portfolio and the 20-hotel
portfolio for the three months and
year ended December 31, 2014 and 2013 (in
thousands, except for ADR and RevPAR):
Three Months Ended
December 31, Year Ended December 31, 2014
2013(1)
Change
2014(1)
2013(1)
Change
17-Hotel
Portfolio(2)
Occupancy 77.8 % 78.3 % (50) bps 83.4 % 81.8 % 160 bps ADR $ 222.07
$ 205.30 8.2 % $ 218.72 $ 203.61 7.4 % RevPAR $ 172.68 $ 160.68 7.5
% $ 182.35 $ 166.59 9.5 % Adjusted Hotel EBITDA $ 33,073 $
30,704 7.7 % $ 144,955 $ 126,087 15.0 % Adjusted Hotel EBITDA
Margin 31.0 % 30.3 % 70 bps 32.9 % 30.9 % 200 bps
20-Hotel
Portfolio
Occupancy 75.5 % 77.2 % (170) bps 79.9 % 80.4 % (50) bps ADR $
219.65 $ 204.82 7.2 % $ 216.21 $ 202.81 6.6 % RevPAR $ 165.95 $
158.13 4.9 % $ 172.80 $ 163.12 5.9 % Adjusted Hotel EBITDA $
37,695 $ 36,373 3.6 % $ 160,258 $ 146,639 9.3 % Adjusted Hotel
EBITDA Margin 30.5 % 30.3 % 20 bps 31.8 % 30.5 % 130 bps
__________ (1) Includes results of operations for certain
hotels prior to their acquisition by the Trust. (2) Excludes the W
Chicago – Lakeshore, the Le Meridien New Orleans, and the Hyatt
Herald Square New York, as these hotels were 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.
ACQUISITIONS
On October 1, 2014, the Trust acquired the 337-room JW Marriott
San Francisco Union Square located in San Francisco, California for
$154.1 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.
On February 19, 2015, the Trust announced that it had
entered into a definitive agreement to acquire the 393-room James
Royal Palm located in Miami Beach, Florida for a
purchase price of $278.0 million. The Trust expects the hotel will
be managed by HEI Hotels & Resorts and be affiliated with
Starwood Hotels and Resorts' new Collection brand. The Trust
expects the acquisition to close in the first quarter 2015, subject
to customary closing conditions, but can give no assurance that the
acquisition will be consummated during that time period, or at
all.
MAJOR REPOSITIONINGS
The comprehensive renovation at the former 410-room W New
Orleans to reposition the hotel as the Le Meridien New Orleans,
which commenced in the second quarter of 2014, was completed in the
fourth quarter of 2014 with a total expected cost of approximately
$26.0 million.
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 in the fourth quarter of 2014 with a total
expected cost of approximately $6.5 million.
CAPITAL MARKETS ACTIVITY
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 October 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 September 30,
2014. On December 12, 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 December 31, 2014. Both dividends were paid on January
15, 2014.
On January 26, 2015, the Trust declared dividends in the amounts
of $0.35 per share to its common shareholders and $0.484375 per
share to its preferred shareholders, both of record as of March 31,
2015. The dividends will be paid on April 15, 2015.
2015 OUTLOOK
The Trust reaffirms its previously provided full year 2015
outlook and is incorporating its first quarter 2015 outlook as
follows (in millions, except RevPAR and per share amounts):
First Quarter Full Year
2015 Outlook 2015 Outlook Low High Low
High
CONSOLIDATED: Net income (loss)
available to common shareholders $ (1.9 ) $ (1.2 ) $ 62.9 $ 68.2
Net income (loss) per diluted common share $ (0.03 ) $ (0.02 ) $
1.16 $ 1.25 Adjusted Corporate EBITDA $ 18.4 $ 19.3 $ 158.0
$ 163.8 AFFO available to common shareholders $ 12.2 $ 12.9
$ 119.9 $ 125.2 AFFO per diluted common share $ 0.22 $ 0.24 $ 2.20
$ 2.30 Corporate cash general and administrative expense $
2.6 $ 2.7 $ 9.4 $ 10.2 Corporate non-cash general and
administrative expense $ 1.8 $ 1.8 $ 7.6 $ 7.6
Weighted-average number of diluted common shares outstanding 54.4
54.4 54.5 54.5
HOTEL PORTFOLIO: RevPAR $
143.00 $ 145.00 $ 186.00 $ 189.00 Pro forma RevPAR increase over
2014(1) 3.0 %
4.0
% 7.5 % 9.5 % Adjusted Hotel EBITDA $ 22.8 $ 23.8 $ 175.0 $ 181.5
Adjusted Hotel EBITDA Margin 21.8 % 22.3 % 32.5 % 33.0 % Pro forma
Adjusted Hotel EBITDA Margin increase (decrease) over 2014(1) (100)
bps (50) bps 75 bps 125 bps _____________ (1) The
comparable 2014 period includes results of operations for one hotel
prior to its acquisition by the Trust.
The Trust’s 2015 outlook contemplates the expected revenue and
Hotel EBITDA displacement from guestroom renovations taking place
during the first quarter at the 502-room Hyatt Regency Boston, the
360-room Le Meridien San Francisco and the 313-room Hyatt
Fisherman’s Wharf. The Trust estimates that the negative impact on
RevPAR growth for the first quarter and full year 2015 will be
approximately 650 basis points and 150 basis points, respectively,
and the negative impact on Adjusted Hotel EBITDA Margin growth for
the first quarter and full year 2015 will be approximately 200
basis points and 25 basis points, respectively, resulting in Hotel
EBITDA displacement of approximately $3.25 million for the first
quarter and full year 2015.
The Trust’s 2015 outlook also includes a 17% increase in
estimated real estate tax expense as a result of actual and
expected real estate reassessments at certain of its hotels for
2015. The Trust estimates that the negative impact on Adjusted
Hotel EBITDA Margin growth for 2015 will be approximately 70 basis
points.
The Trust’s 2015 outlook does not assume the pending acquisition
of The James Royal Palm and related acquisition financing or any
additional acquisitions, dispositions, or financing transactions.
See the accompanying financial tables for quarterly pro forma hotel
operating results for the 20-hotel portfolio for 2014.
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 (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 Thursday, February 19,
2015 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 73149662. 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 February 26, 2015. To access
the replay, dial (855) 859-2056 (U.S./Canadian callers) or
(404) 537-3406 (International callers). The conference call ID
is 73149662. A webcast replay and transcript of the conference call
will be archived and available on the Trust’s website for 12
months.
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, the Trust's 2015 outlook, and the
time for completing, if at all, the pending acquisition described.
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 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 February 19,
2015, 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)
December 31, 2014 2013
ASSETS Property and equipment, net $ 1,580,427 $ 1,422,439
Intangible assets, net 36,992 38,781 Cash and cash equivalents
29,326 28,713 Restricted cash 43,387 34,235 Accounts receivable,
net 13,102 13,011 Prepaid expenses and other assets 10,637 10,478
Deferred financing costs, net 6,064 6,501 Total
assets $ 1,719,935 $ 1,554,158 LIABILITIES AND
SHAREHOLDERS’ EQUITY Long-term debt $ 551,723 $ 531,771 Accounts
payable and accrued expenses 53,442 45,982 Other liabilities 32,788
29,848 Total liabilities 637,953 607,601
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;
54,818,064 shares and 49,574,005 shares
issued and outstanding, respectively
548 496 Additional paid-in capital 1,138,391 991,417 Cumulative
dividends in excess of net income (57,007 ) (45,339 ) Accumulated
other comprehensive loss —
(67
)
Total shareholders’ equity 1,081,982
946,557
Total liabilities and shareholders’ equity $ 1,719,935 $
1,554,158 SUPPLEMENTAL CREDIT INFORMATION:
Fixed charge coverage ratio(1) 2.65 2.67 Leverage ratio(1) 31.1 %
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) Three Months
Ended December 31, Year Ended December 31, 2014
2013 2014 2013 (unaudited)
REVENUE Rooms $ 93,297 $ 82,397
$ 364,727 $ 316,434 Food and beverage 25,093 24,704 94,307 86,884
Other 5,111 4,462 18,946 16,859 Total
revenue 123,501 111,563 477,980 420,177
EXPENSES Hotel operating expenses: Rooms 22,515 19,664
84,445 73,711 Food and beverage 19,016 17,798 71,816 65,090 Other
direct 2,019 2,002 8,032 8,042 Indirect 42,166 37,635
160,589 138,120 Total hotel operating expenses 85,716
77,099 324,882 284,963 Depreciation and amortization 14,079 12,457
51,567 44,469 Air rights contract amortization 130 130 520 520
Corporate general and administrative 4,052 3,204 15,557 13,125
Hotel acquisition costs 3,562 27 3,622 4,222
Total operating expenses 107,539 92,917
396,148 347,299 Operating income 15,962 18,646
81,832 72,878 Interest income — — 8 247 Interest expense
(6,880 ) (6,794 ) (27,357 ) (25,780 ) Gain on sale of hotel — —
7,006 — Loss on early extinguishment of debt — — —
(372 ) Income before income taxes 9,082 11,852 61,489
46,973 Income tax expense (243 ) (324 ) (535 ) (1,655 )
Net income 8,839 11,528 60,954 45,318 Preferred share
dividends (2,422 ) (2,422 ) (9,688 ) (9,688 ) Net income available
to common shareholders $ 6,417 $ 9,106 $ 51,266
$ 35,630 Net income per common share: Basic $
0.12 $ 0.18 $ 1.01 $ 0.75 Diluted $ 0.12 $ 0.18 $ 1.00 $ 0.75
Weighted-average number of common shares
outstanding:
Basic 53,821,483 48,884,102 50,488,007 47,295,089 Diluted
54,262,749 48,884,102 50,890,861 47,295,089
CHESAPEAKE LODGING TRUST CONSOLIDATED
STATEMENTS OF CASH FLOWS (in thousands)
Year Ended December 31, 2014 2013 Cash
flows from operating activities: Net income $ 60,954 $ 45,318
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 51,567 44,469 Air rights contract
amortization 520 520 Deferred financing costs amortization 2,448
2,837 Gain on sale of hotel (7,006 ) — Loss on early extinguishment
of debt — 372 Share-based compensation 5,803 4,612 Other 625 (295 )
Changes in assets and liabilities: Accounts receivable, net 1,277
(2,543 ) Prepaid expenses and other assets (290 ) (3,305 ) Accounts
payable and accrued expenses 3,766 7,203 Other liabilities (30 )
774 Net cash provided by operating activities 119,634
99,962 Cash flows from investing activities:
Acquisition of hotels, net of cash acquired (152,292 ) (331,058 )
Disposition of hotel, net of cash sold 31,822 — Receipt of deposit
on hotel acquisition — 700 Improvements and additions to hotels
(87,182 ) (28,235 ) Repayment of hotel construction loan — 7,810
Change in restricted cash (2,164 ) (10,775 ) Net cash used in
investing activities (209,816 ) (361,558 ) Cash flows from
financing activities: Proceeds from sale of common shares, net of
underwriting fees 144,320 189,862 Payment of offering costs related
to sale of common shares (392 ) (468 ) Borrowings under revolving
credit facility 100,000 105,000 Repayments under revolving credit
facility (100,000 ) (155,000 ) Proceeds from issuance of mortgage
debt 90,000 312,500 Principal prepayment on mortgage debt —
(130,000 ) Scheduled principal payments on mortgage debt (69,837 )
(5,726 ) Payment of deferred financing costs (2,011 ) (3,080 )
Payment of dividends to common shareholders (58,892 ) (44,516 )
Payment of dividends to preferred shareholders (9,688 ) (9,688 )
Repurchase of common shares (2,705 ) (1,769 ) Net cash provided by
financing activities 90,795 257,115 Net increase
(decrease) in cash 613 (4,481 ) Cash and cash equivalents,
beginning of period 28,713 33,194 Cash and cash
equivalents, end of period $ 29,326 $ 28,713
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 17-hotel portfolio
and the 20-hotel portfolio for the three months and year ended
December 31, 2014 and 2013: Three
Months Ended December 31, Year Ended December
31, 2014 2013(1) 2014(1)
2013(1)
17-Hotel
Portfolio(2)
Total revenue $ 106,539 $ 101,412 $ 441,231 $ 407,598 Less: Total
hotel operating expenses 73,385 70,632 297,161
281,209 Hotel EBITDA 33,154 30,780 144,070 126,389
Less: Non-cash amortization(3) (81 ) (76 ) 885 (302 )
Adjusted Hotel EBITDA $ 33,073 $ 30,704 $ 144,955
$ 126,087 Adjusted Hotel EBITDA Margin 31.0 %
30.3 % 32.9 % 30.9 %
20-Hotel
Portfolio
Total revenue $ 123,501 $ 119,904 $ 504,107 $ 480,204 Less: Total
hotel operating expenses 85,725 83,455 344,734
333,263 Hotel EBITDA 37,776 36,449 159,373 146,941
Less: Non-cash amortization(3) (81 ) (76 ) 885 (302 )
Adjusted Hotel EBITDA $ 37,695 $ 36,373 $ 160,258
$ 146,639 Adjusted Hotel EBITDA Margin 30.5 %
30.3 % 31.8 % 30.5 % _____________ (1) Includes
results of operations for certain hotels prior to their acquisition
by the Trust. (2) Excludes the W Chicago – Lakeshore, the Le
Meridien New Orleans, and the Hyatt Herald Square New York, as
these hotels were 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
months and year ended December 31, 2014 and 2013:
Three Months Ended
December 31, Year Ended December 31, 2014 2013
2014 2013 Total revenue $ 123,501 $ 111,563 $
477,980 $ 420,177 Less: Total hotel operating expenses 85,716
77,099 324,882 284,963 Hotel EBITDA
37,785 34,464 153,098 135,214 Less: Non-cash amortization(1)
(81 ) (75 ) 889 (297 ) Adjusted Hotel EBITDA $ 37,704
$ 34,389 $ 153,987 $ 134,917 ______________
(1) Includes non-cash amortization of ground lease asset,
deferred franchise costs, deferred key money, and unfavorable
contract liability.
The following table reconciles net income to Corporate EBITDA
and Adjusted Corporate EBITDA for the three months and year ended
December 31, 2014 and 2013:
Three Months Ended
December 31, Year Ended December 31, 2014 2013
2014 2013 Net income $ 8,839 $ 11,528 $ 60,954
$ 45,318
Add:
Depreciation and amortization
14,079 12,457 51,567 44,469
Interest expense
6,880 6,794 27,357 25,780
Loss on early extinguishment of
debt
— — — 372
Income tax expense
243 324 535 1,655
Less:
Interest income
— — (8 ) (247 ) Corporate EBITDA 30,041 31,103
140,405 117,347
Add:
Hotel acquisition costs
3,562 27 3,622 4,222
Non-cash amortization(1)
49 56 1,408 223
Less:
Gain on sale of hotel
— — (7,006 ) — Adjusted Corporate EBITDA $
33,652 $ 31,186 $ 138,429 $ 121,792
______________ (1) Includes non-cash amortization of ground
lease asset, deferred franchise costs, deferred key money,
unfavorable contract liability, and air rights contract.
The following table reconciles net income to FFO, FFO available
to common shareholders, and AFFO available to common shareholders
for the three months and year ended December 31, 2014 and 2013:
Three Months Ended December 31,
Year Ended December 31, 2014 2013 2014
2013 Net income $ 8,839 $ 11,528 $ 60,954 $
45,318
Add:
Depreciation and amortization
14,079 12,457 51,567 44,469
Less:
Gain on sale of hotel
— — (7,006 ) — FFO 22,918 23,985 105,515
89,787
Less:
Preferred share dividends
(2,422 ) (2,422 ) (9,688 ) (9,688 )
Dividends declared on unvested
time-based awards
(114 ) (85 ) (499 ) (361 )
Undistributed earnings allocated to
unvested time-based awards
— — — — FFO available to common
shareholders 20,382 21,478 95,328 79,738
Add:
Hotel acquisition costs
3,562 27 3,622 4,222
Non-cash amortization(1)
49 56 1,408 223 AFFO available to
common shareholders $ 23,993 $ 21,561 $ 100,358
$ 84,183 FFO per common share: Basic $ 0.38 $
0.44 $ 1.89 $ 1.69 Diluted $ 0.38 $ 0.44 $ 1.87 $ 1.69 AFFO
per common share: Basic $ 0.45 $ 0.44 $ 1.99 $ 1.78 Diluted $ 0.44
$ 0.44 $ 1.97 $ 1.78 ______________ (1) Includes non-cash
amortization of ground lease asset, deferred franchise costs,
deferred key money, unfavorable contract liability, and air rights
contract.
The following table calculates forecasted Hotel EBITDA and
Adjusted Hotel EBITDA for the three months ending March 31,
2015:
Three Months Ending March 31, 2015 Low
High Total revenue $ 104,400 $ 106,580 Less: Total
hotel operating expenses 81,520 82,700 Hotel EBITDA
22,880 23,880 Less: Non-cash amortization(1) (80 ) (80 )
Adjusted Hotel EBITDA $ 22,800 $ 23,800
______________ (1) 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 March 31, 2015:
Three Months Ending March 31, 2015 Low
High Net income $ 690 $ 1,390
Add:
Depreciation and amortization
14,000 14,000
Interest expense
6,740 6,740
Less:
Interest income
— —
Income tax benefit
(3,080 ) (2,880 ) Corporate EBITDA 18,350 19,250
Add:
Hotel acquisition costs
— —
Non-cash amortization(1)
50 50 Adjusted Corporate EBITDA $ 18,400 $
19,300 ______________ (1) Includes non-cash
amortization of ground lease asset, deferred franchise costs,
deferred key money, unfavorable contract liability, and air rights
contract.
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 March 31, 2015:
Three Months Ending March 31, 2015 Low
High Net income $ 690 $ 1,390
Add:
Depreciation and amortization
14,000 14,000 FFO 14,690 15,390
Less:
Preferred share dividends
(2,420 ) (2,420 )
Dividends declared on unvested
time-based awards
(140 ) (140 )
Undistributed earnings allocated to
unvested time-based awards
— — FFO available to common shareholders 12,130
12,830
Add:
Hotel acquisition costs
— —
Non-cash amortization(1)
50 50 AFFO available to common shareholders $ 12,180
$ 12,880 FFO per common share: Basic $ 0.22 $
0.24 Diluted $ 0.22 $ 0.24 AFFO per common share: Basic $
0.23 $ 0.24 Diluted $ 0.22 $ 0.24 Weighted-average number of
common shares outstanding: Basic 53,959 53,959 Diluted 54,434
54,434 ______________ (1) Includes non-cash amortization of
ground lease asset, deferred franchise costs, deferred key money,
unfavorable contract liability, and air rights contract.
The following table calculates forecasted Hotel EBITDA and
Adjusted Hotel EBITDA for the year ending December 31,
2015:
Year Ending December 31, 2015 Low
High Total revenue $ 537,800 $ 549,300 Less:
Total hotel operating expenses 362,480 367,480 Hotel
EBITDA 175,320 181,820 Add: Non-cash amortization(1) (320 )
(320 ) Adjusted Hotel EBITDA $ 175,000 $ 181,500
______________ (1) 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, 2015:
Year Ending December 31, 2015 Low
High Net income $ 73,140 $ 78,390
Add:
Depreciation and amortization
56,810 56,810
Interest expense
27,100 27,100
Income tax expense
750 1,250
Less:
Interest income
— — Corporate EBITDA 157,800 163,550
Add:
Hotel acquisition costs
— —
Non-cash amortization(1)
200 200 Adjusted Corporate EBITDA $ 158,000 $ 163,750
______________ (1) Includes non-cash amortization of ground
lease asset, deferred franchise costs, deferred key money,
unfavorable contract liability, and air rights contract.
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, 2015:
Year Ending December 31, 2015 Low
High Net income $ 73,140 $ 78,390
Add:
Depreciation and amortization
56,810 56,810 FFO 129,950 135,200
Less:
Preferred share dividends
(9,690 ) (9,690 )
Dividends declared on unvested
time-based awards
(530 ) (530 )
Undistributed earnings allocated to
unvested time-based awards
— — FFO available to common shareholders 119,730
124,980
Add:
Hotel acquisition costs
— —
Non-cash amortization(1)
200 200 AFFO available to common shareholders $
119,930 $ 125,180 FFO per common share: Basic
$ 2.22 $ 2.31 Diluted $ 2.20 $ 2.29 AFFO per common share:
Basic $ 2.22 $ 2.32 Diluted $ 2.20 $ 2.30 Weighted-average
number of common shares outstanding: Basic 53,990 53,990 Diluted
54,465 54,465 ______________ (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
SUPPLEMENTAL HOTEL OPERATING
RESULTS
(in thousand, except ADR and
RevPAR)
(unaudited)
The following table includes the Trust's
2014 hotel operating results for the 20-hotel portfolio:
Three Months Ended
Year Ended
March 31,2014
June 30, 2014
September 30,2014
December 31,2014
December 31,2014
20-Hotel
Portfolio(1)
Occupancy 74.5 % 85.3 % 84.3 % 75.5 % 79.9 % ADR $ 186.66 $ 221.64
$ 233.25 $ 219.65 $ 216.21 RevPAR $ 139.15 $ 188.96 $ 196.58 $
165.95 $ 172.80 Total revenue $ 102,508 $ 137,651 $ 140,447
$ 123,501 $ 504,107 Less: Total hotel operating expenses 79,025
88,223 91,761 85,725 344,734
Hotel EBITDA 23,483 49,428 48,686 37,776 159,373 Less:
Non-cash amortization(2) (76 ) (76 ) 1,118 (81 ) 885
Adjusted Hotel EBITDA $ 23,407 $ 49,352 $ 49,804
$ 37,695 $ 160,258 _____________
(1)
The hotel operating results for the three
months ended March 31, 2014, June 30, 2014, and September 30, 2014,
and for the year ended December 31, 2014, includes results of
operations for one hotel prior to its acquisition by the Trust.
(2)
Includes non-cash amortization of ground
lease asset, deferred franchise costs, deferred key money, and
unfavorable contract liability.
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 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 Le Meridien
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
Chesapeake Lodging TrustDouglas W. Vicari, 410-972-4142
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