Chesapeake Lodging Trust (NYSE:CHSP), a lodging real estate
investment trust (REIT), reported today its financial results for
the quarter ended September 30, 2017.
HIGHLIGHTS
- RevPAR: 3.4% decrease for the
22-hotel portfolio and 3.4% decrease for the 15-hotel portfolio
over the same period in 2016.
- Adjusted Hotel
EBITDA Margin: 100 basis point decrease to 33.6%
for the 22-hotel portfolio and 90 basis point decrease to 35.8% for
the 15-hotel portfolio over the same period in 2016.
- Adjusted Hotel
EBITDA: $53.1 million.
- Adjusted
Corporate EBITDA: $48.9 million.
- Net income
available to common shareholders: $14.1 million
or $0.24 per diluted common share.
- Adjusted
FFO: $37.7 million or $0.64 per diluted common
share.
- Preferred
share redemption: Redeemed $125.0 million of
7.75% Series A Cumulative Redeemable Preferred Shares.
- Disposition: Entered into a
definitive agreement to sell the 222-room The Hotel Minneapolis,
Autograph Collection for a sale price of $46.0 million.
“We are pleased with our results for the third quarter which
were in line with the mid-point of our provided outlook despite
negative impacts resulting from Hurricanes Harvey and Irma during
the quarter. Outside of those markets specifically effected by the
recent hurricanes, including Hurricane Nate which negatively
effected our New Orleans hotels in early October, we believe
operating fundamentals for the U.S. lodging industry remain stable
and as a result, we expect our 14-hotel portfolio to resume growth
in RevPAR in the fourth quarter,” said James L. Francis, Chesapeake
Lodging Trust’s President and Chief Executive Officer.
Mr. Francis continued, “Our transformative renovation at the JW
Marriott San Francisco Union Square remains on track with
completion expected in December 2017 and we are encouraged by the
positive guest feedback we have been receiving on the new room
product. Between this renovation and those completed earlier in the
year at both the Denver Marriott City Center and the Boston
Marriott Newton, we believe our hotel portfolio is well positioned
for outperformance relative to the U.S. lodging industry in
2018.”
CONSOLIDATED FINANCIAL RESULTS
The following is a summary of the consolidated financial results
for the three and nine months ended September 30, 2017 and
2016 (in millions, except share and per share amounts):
Three Months Ended
September 30, Nine Months Ended September 30, 2017
2016 2017 2016 Total revenue $ 158.3 $
164.5 $ 455.6 $ 474.6 Net income available to common
shareholders $ 14.1 $ 23.5 $ 38.9 $ 57.3 Net income per diluted
common share $ 0.24 $ 0.40 $ 0.65 $ 0.97 Adjusted Hotel
EBITDA $ 53.1 $ 57.0 $ 146.1 $ 159.6 Adjusted Corporate
EBITDA $ 48.9 $ 52.9 $ 132.3 $ 145.6 AFFO available to
common shareholders $ 37.7 $ 42.1 $ 100.2 $ 112.0 AFFO per diluted
common share $ 0.64 $ 0.71 $ 1.69 $ 1.90 Weighted-average
number of diluted common shares outstanding 59,287,812 58,928,433
59,244,803 58,894,529
HOTEL OPERATING RESULTS
During 2017, the Trust expects the following seven of its 22
hotels to be negatively effected as a result of (1) the expected
negative impact on lodging demand in San Francisco resulting from
the temporary closure and expansion of the Moscone Center and/or
(2) significant guestroom renovations undergoing during the year:
Le Meridien San Francisco, JW Marriott San Francisco Union Square,
Hyatt Centric Fisherman’s Wharf, Hotel Adagio San Francisco,
Autograph Collection, Boston Marriott Newton, Denver Marriott City
Center, and Hyatt Regency Mission Bay Spa and Marina. As such, the
Trust is reporting key operating metrics for a 15-hotel portfolio
in addition to the 22-hotel portfolio. Included in the following
table are comparisons of the key operating metrics for the 22-hotel
portfolio and the 15-hotel portfolio for the three and nine
months ended September 30, 2017 and 2016 (in thousands,
except for ADR and RevPAR):
Three Months Ended September 30,
Nine Months Ended September 30, 2017
2016 Change 2017 2016
Change
22-Hotel
Portfolio
Occupancy 88.5 % 88.8 % (30) bps 83.9 % 85.2 % (130) bps ADR $
226.10 $ 233.19 (3.0)% $ 224.57 $ 229.20 (2.0)% RevPAR $ 200.12 $
207.12 (3.4)% $ 188.46 $ 195.34 (3.5)% Adjusted Hotel EBITDA $
53,123 $ 56,983 (6.8)% $ 146,067 $ 159,631 (8.5)% Adjusted Hotel
EBITDA Margin 33.6 % 34.6 % (100) bps 32.1 % 33.6 % (150) bps
15-Hotel
Portfolio
Occupancy 88.5 % 88.3 % 20 bps 85.5 % 84.9 % 60 bps ADR $ 220.66 $
228.81 (3.6)% $ 219.67 $ 225.06 (2.4)% RevPAR $ 195.29 $ 202.12
(3.4)% $ 187.78 $ 191.18 (1.8)% Adjusted Hotel EBITDA $ 32,427 $
34,747 (6.7)% $ 92,602 $ 98,319 (5.8)% Adjusted Hotel EBITDA Margin
35.8 % 36.7 % (90) bps 35.1 % 36.1 % (100) bps
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.
CAPITAL MARKETS ACTIVITY
On July 17, 2017, the Trust redeemed all 5,000,000 shares of its
issued and outstanding 7.75% Series A Cumulative Redeemable
Preferred Shares at a redemption amount of $25.00 per share, plus
accrued and unpaid dividends, with a borrowing under its revolving
credit facility.
DISPOSITION ACTIVITY
On November 2, 2017, the Trust announced that it had entered
into a definitive agreement to sell the 222-room The Hotel
Minneapolis, Autograph Collection located in Minneapolis, Minnesota
for a sale price of $46.0 million, or approximately $207,000 per
key, subject to customary working capital pro-rations at closing.
Completion of the proposed sale is expected within the next 30
days, subject to customary closing requirements and conditions.
DIVIDENDS
On July 14, 2017, the Trust paid dividends in the amounts of
$0.40 per share to its common shareholders and $0.484375 per share
to its preferred shareholders, both of record as of June 30, 2017.
On September 18, 2017, the Trust declared a dividend in the amount
of $0.40 per share payable to its common shareholders of record as
of September 29, 2017. The dividend was paid on October 13,
2017.
2017 OUTLOOK
The Trust is updating its 2017 outlook to incorporate its second
quarter results, recent trends and fundamentals, the redemption of
its 7.75% Series A Cumulative Redeemable Preferred Shares, and the
pending sale of The Hotel Minneapolis, Autograph Collection. The
outlook assumes no future acquisitions, additional dispositions, or
financing transactions (in millions, except RevPAR and per share
amounts):
Fourth Quarter
2017
Outlook Low High
CONSOLIDATED: Net income available to common
shareholders $ 15.5 $ 17.5 Net income per diluted common share $
0.26 $ 0.29 Adjusted Corporate EBITDA $ 37.1 $ 39.3
AFFO available to common shareholders $ 28.1 $ 30.0 AFFO per
diluted common share $ 0.47 $ 0.51 Corporate cash general
and administrative expense $ 2.3 $ 2.5 Corporate non-cash general
and administrative expense $ 1.8 $ 1.8 Weighted-average
number of diluted common shares outstanding 59.3 59.3
HOTEL PORTFOLIO(1):
21-Hotel
Portfolio
Comparable RevPAR $ 174.00 $ 178.00 Comparable RevPAR change as
compared to 2016 (1.0 )% 1.0 % Comparable Adjusted Hotel EBITDA $
40.8 $ 43.0 Comparable Adjusted Hotel EBITDA Margin 29.3 % 30.3 %
Comparable Adjusted Hotel EBITDA Margin change as compared to 2016
(100) bps 0 bps
14-Hotel
Portfolio
Comparable RevPAR $ 178.00 $ 181.00 Comparable RevPAR change as
compared to 2016 0.0% 2.0 % Comparable Adjusted Hotel EBITDA $ 26.9
$ 28.3 Comparable Adjusted Hotel EBITDA Margin 33.3 % 34.3 %
Comparable Adjusted Hotel EBITDA Margin change as compared to 2016
(25) bps 75 bps
_____________
(1) The Trust uses the term “comparable” to refer to metrics
that include only those hotels owned for the entirety of the two
periods being compared. Since The Hotel Minneapolis, Autograph
Collection, is under contract to be sold with completion of the
proposed sale expected in Q4 2017, it has been excluded in the
updated outlook for the hotel portfolio metrics for Q4 and full
year 2017.
Full Year
2017
Updated Outlook Previous
Outlook Low High Low
High
CONSOLIDATED: Net
income available to common shareholders $ 54.1 $ 56.0 $ 45.3
$ 49.8 Net income per diluted common share $ 0.91 $ 0.95 $
0.77 $ 0.84 Adjusted Corporate EBITDA $ 169.4 $ 171.5 $
169.0 $ 174.3 AFFO available to common shareholders $ 128.2
$ 130.2 $ 127.8 $ 132.3 AFFO per diluted common share $ 2.16 $ 2.20
$ 2.16 $ 2.24 Corporate cash general and administrative
expense $ 10.4 $ 10.6 $ 10.5 $ 11.3 Corporate non-cash general and
administrative expense $ 7.5 $ 7.5 $ 7.5 $ 7.5
Weighted-average number of diluted common shares outstanding 59.3
59.3 59.1 59.1
HOTEL
PORTFOLIO(1):
21-Hotel
Portfolio
Comparable RevPAR $ 186.00 $ 187.00 Comparable RevPAR change as
compared to 2016 (2.8 )% (2.3 )% Comparable Adjusted Hotel EBITDA $
184.4 $ 186.6 Comparable Adjusted Hotel EBITDA Margin 31.5 % 31.7 %
Comparable Adjusted Hotel EBITDA Margin change as compared to 2016
(140) bps (115) bps
14-Hotel
Portfolio
Comparable RevPAR $ 188.00 $ 189.00 Comparable RevPAR change as
compared to 2016 (1.0 )% (0.5 )% Comparable Adjusted Hotel EBITDA $
117.1 $ 118.4 Comparable Adjusted Hotel EBITDA Margin 34.9 % 35.1 %
Comparable Adjusted Hotel EBITDA Margin change as compared to 2016
(70) bps (45) bps
_____________
(1) The Trust uses the term “comparable” to refer to metrics
that include only those hotels owned for the entirety of the two
periods being compared. Since The Hotel Minneapolis, Autograph
Collection, is under contract to be sold with completion of the
proposed sale expected in Q4 2017, it has been excluded in the
updated outlook for the hotel portfolio metrics for Q4 and full
year 2017.
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 net income before
interest, income taxes, depreciation and amortization, air rights
amortization, corporate general and administrative, and hotel
acquisition costs. The Trust believes that Hotel EBITDA provides
investors a useful financial measure to evaluate the Trust’s hotel
operating performance, excluding the impact of the Trust’s capital
structure (primarily interest), the Trust’s asset base (primarily
depreciation and amortization), and the Trust’s corporate-level
expenses (corporate general and administrative and hotel
acquisition costs).
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, and gain
(losses) from sales of real estate, which is a non-recurring item.
The Trust believes that Adjusted Hotel EBITDA provides investors
with another useful financial measure to evaluate the Trust’s hotel
operating performance, excluding the effect of these items.
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, write-off of issuance costs of redeemed
preferred shares, 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,
and the write-off of issuance costs of redeemed preferred shares,
which is a non-recurring item. 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,
November 2, 2017 at 11:00 a.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 3040539. 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 9, 2017. To access
the replay, dial (855) 859-2056 (U.S./Canadian callers) or
(404) 537-3406 (International callers). The conference call ID
is 3040539. 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
22 hotels with an aggregate of 6,694 rooms in nine 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
expectation that the disposition will be consummated on the terms
described and within the anticipated timetable, and the Trust’s
fourth quarter and full year 2017 outlook. 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: U.S. economic
conditions generally and the real estate market and the lodging
industry specifically; management and performance of the Trust's
hotels; supply and demand for hotel rooms in the Trust's markets;
the Trust's competition; the Trust’s ability to continue to satisfy
complex rules in order for it to remain a REIT for federal income
tax purposes; the effects of any acquisitions, dispositions or
financing transactions the Trust may undertake; 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 2,
2017, 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, 2017 December 31, 2016 (unaudited)
ASSETS Property and equipment, net $ 1,828,303 $ 1,882,869
Intangible assets, net 35,401 35,835 Cash and cash equivalents
43,568 43,060 Restricted cash 34,168 36,128 Accounts receivable,
net 28,273 19,966 Prepaid expenses and other assets 19,005 17,516
Assets held for sale 40,179 — Total assets $
2,028,897 $ 2,035,374 LIABILITIES AND
SHAREHOLDERS’ EQUITY Long-term debt $ 877,352 $ 737,310 Accounts
payable and accrued expenses 68,074 64,581 Other liabilities 42,075
44,808 Liabilities related to assets held for sale 1,451 —
Total liabilities 988,952 846,699
Commitments and contingencies
Preferred shares, $.01 par value;
100,000,000 shares authorized;Series A Cumulative Redeemable
Preferred Shares; no shares and5,000,000 shares issued and
outstanding, respectively
— 50
Common shares, $.01 par value; 400,000,000
shares authorized;60,115,071 shares and 59,671,964 shares issued
and outstanding, respectively
601 597 Additional paid-in capital 1,188,435 1,304,364 Cumulative
dividends in excess of net income (149,110 ) (116,297 ) Accumulated
other comprehensive income (loss) 19 (39 ) Total
shareholders’ equity 1,039,945 1,188,675 Total
liabilities and shareholders’ equity $ 2,028,897 $ 2,035,374
SUPPLEMENTAL CREDIT INFORMATION: Fixed charge
coverage ratio(1) 2.93 3.24 Leverage ratio(1) 40.5 % 31.9 %
______________
(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 EndedSeptember 30,
Nine Months EndedSeptember 30,
2017 2016 2017 2016
REVENUE Rooms $ 123,241 $ 127,552 $ 344,410 $ 358,291 Food and
beverage 27,172 29,633 89,620 95,852 Other 7,864 7,344
21,582 20,428 Total revenue 158,277
164,529 455,612 474,571 EXPENSES Hotel
operating expenses: Rooms 28,132 28,532 80,822 81,909 Food and
beverage 21,306 22,536 66,694 69,413 Other direct 1,480 1,690 4,136
4,837 Indirect 54,081 54,633 157,428 158,316
Total hotel operating expenses 104,999 107,391 309,080
314,475 Depreciation and amortization 19,369 18,703 57,252 55,797
Air rights contract amortization 130 130 390 390 Corporate general
and administrative 4,216 4,074 13,798 14,074
Total operating expenses 128,714 130,298
380,520 384,736 Operating income 29,563 34,231
75,092 89,835 Interest expense (9,020 ) (8,122 ) (24,989 )
(23,892 ) Gain on sale of hotel — — —
598 Income before income taxes 20,543 26,109 50,103
66,541 Income tax expense (1,590 ) (162 ) (1,470 ) (1,982 )
Net income 18,953 25,947 48,633 64,559 Preferred
share dividends (430 ) (2,422 ) (5,274 ) (7,266 ) Write-off of
issuance costs of redeemed preferred shares (4,419 ) —
(4,419 ) — Net income available to common shareholders $
14,104 $ 23,525 $ 38,940 $ 57,293
Net income per common share—basic and diluted $ 0.24 $ 0.40
$ 0.65 $ 0.97 Weighted-average number of common shares
outstanding: Basic 59,043,425 58,729,338 59,024,497 58,711,056
Diluted 59,287,812 58,928,433 59,244,803 58,894,529
CHESAPEAKE LODGING TRUST
CONSOLIDATED STATEMENTS OF CASH
FLOWS
(in thousands)
(unaudited)
Nine Months Ended September 30, 2017
2016 Cash flows from operating activities: Net income $
48,633 $ 64,559 Adjustments to reconcile net income to net cash
provided by operating activities: Depreciation and amortization
57,252 55,797 Air rights contract amortization 390 390 Deferred
financing costs amortization 1,248 1,409 Gain on sale of hotel —
(598 ) Share-based compensation 5,671 7,150 Other (465 ) (642 )
Changes in assets and liabilities: Accounts receivable, net (8,825
) (11,209 ) Prepaid expenses and other assets (1,907 ) 585 Accounts
payable and accrued expenses 5,089 4,605 Other liabilities 173
(33 ) Net cash provided by operating activities 107,259
122,013 Cash flows from investing activities:
Disposition of hotel — 2,028 Improvements and additions to hotels
(41,952 ) (17,562 ) Change in restricted cash 1,960 (810 )
Net cash used in investing activities (39,992 ) (16,344 )
Cash flows from financing activities: Redemption of preferred
shares (125,000 ) — Borrowings under revolving credit facility
300,000 175,000 Repayments under revolving credit facility (250,000
) (215,000 ) Proceeds from issuance of unsecured term loan 225,000
— Proceeds from issuance of mortgage debt — 150,000 Principal
prepayments on mortgage debt — (122,220 ) Scheduled principal
payments on mortgage debt (134,435 ) (7,847 ) Payment of deferred
financing costs (1,771 ) (935 ) Payment of dividends to common
shareholders (72,168 ) (70,842 ) Payment of dividends to preferred
shareholders (7,320 ) (7,266 ) Repurchase of common shares (1,065 )
(194 ) Net cash used in financing activities (66,759 ) (99,304 )
Net increase in cash 508 6,365 Cash and cash equivalents, beginning
of period 43,060 50,544 Cash and cash equivalents,
end of period $ 43,568 $ 56,909
CHESAPEAKE LODGING TRUST
RECONCILIATION OF NON-GAAP FINANCIAL
MEASURES
(in thousands, except share and per
share data)
(unaudited)
The following table reconciles net income to Hotel EBITDA,
Adjusted Hotel EBITDA, and Adjusted Hotel EBITDA Margin for the
22-hotel portfolio for the three and nine months ended
September 30, 2017 and 2016:
Three Months Ended September 30,
Nine Months Ended September 30, 2017
2016 2017 2016 Net income $ 18,953 $ 25,947 $
48,633 $ 64,559 Add: Interest expense 9,020 8,122 24,989 23,892
Income tax expense 1,590 162 1,470 1,982 Depreciation and
amortization 19,369 18,703 57,252 55,797 Air rights contract
amortization 130 130 390 390 Corporate general and administrative
4,216 4,074 13,798 14,074 Hotel EBITDA
53,278 57,138 146,532 160,694 Less: Non-cash amortization(1)
(155 ) (155 ) (465 ) (465 ) Gain on sale of hotel — —
— (598 ) Adjusted Hotel EBITDA $ 53,123 $ 56,983
$ 146,067 $ 159,631 Total revenue $ 158,277 $
164,529 $ 455,612 $ 474,571 Adjusted Hotel EBITDA Margin
33.6 % 34.6 % 32.1 % 33.6 %
_____________
(1) Reflects 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 and nine months ended
September 30, 2017 and 2016:
Three Months Ended September 30,
Nine Months Ended September 30, 2017
2016 2017 2016 Net income $ 18,953 $ 25,947 $
48,633 $ 64,559 Add: Interest expense 9,020 8,122 24,989 23,892
Income tax expense 1,590 162 1,470 1,982 Depreciation and
amortization 19,369 18,703 57,252 55,797
Corporate EBITDA 48,932 52,934 132,344 146,230 Less:
Non-cash amortization(1) (25 ) (26 ) (76 ) (76 ) Gain on sale of
hotel — — — (598 ) Adjusted Corporate EBITDA $
48,907 $ 52,908 $ 132,268 $ 145,556
_____________
(1) Reflects 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 and nine months ended September 30, 2017 and
2016:
Three Months EndedSeptember 30,
Nine Months EndedSeptember 30,
2017 2016 2017 2016 Net
income $ 18,953 $ 25,947 $ 48,633 $ 64,559 Add: Depreciation and
amortization 19,369 18,703 57,252 55,797 Less: Gain on sale of
hotel — — — (598 ) FFO 38,322 44,650 105,885
119,758 Less: Preferred share dividends (430 ) (2,422 )
(5,274 ) (7,266 ) Write-off of issuance costs of redeemed preferred
shares (4,419 ) — (4,419 ) — Dividends declared on unvested
time-based awards (124 ) (146 ) (371 ) (435 ) Undistributed
earnings allocated to unvested time-based awards — —
— — FFO available to common shareholders 33,349
42,082 95,821 112,057 Add: Write-off of issuance costs of
redeemed preferred shares 4,419 — 4,419 — Less: Non-cash
amortization(1) (25 ) (26 ) (76 ) (76 ) AFFO available to common
shareholders $ 37,743 $ 42,056 $ 100,164 $
111,981 FFO per common share: Basic $ 0.56 $ 0.72 $
1.62 $ 1.91 Diluted $ 0.56 $ 0.71 $ 1.62 $ 1.90 AFFO per
common share: Basic $ 0.64 $ 0.72 $ 1.70 $ 1.91 Diluted $ 0.64 $
0.71 $ 1.69 $ 1.90
_____________
(1) Reflects 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 Hotel
EBITDA, Adjusted Hotel EBITDA, and Adjusted Hotel EBITDA Margin for
the 21-hotel portfolio for the three months and year ending
December 31, 2017:
Three Months EndingDecember 31, 2017
Year EndingDecember 31, 2017
Low High Low High Net
income $ 15,620 $ 17,570 $ 64,270 $ 66,220 Add: Interest expense
8,990 8,990 33,980 33,980 Income tax expense (benefit) (50 ) 150
1,420 1,620 Depreciation and amortization 18,840 18,840 76,090
76,090 Air rights contract amortization 130 130 520 520 Corporate
general and administrative 4,130 4,330 17,930
18,130 Hotel EBITDA 47,660 50,010 194,210 196,560
Less: Non-cash amortization(1) (160 ) (160 ) (640 ) (640 ) Gain on
sale of hotel (6,250 ) (6,250 ) (6,250 ) (6,250 ) Adjusted Hotel
EBITDA 41,250 43,600 187,320 189,670 Less: Hotel EBITDA of hotel to
be sold(2) (500 ) (600 ) (2,920 ) (3,020 ) Comparable Adjusted
Hotel EBITDA(3) $ 40,750 $ 43,000 $ 184,400 $
186,650 Total revenue $ 140,400 $ 143,500 $ 596,010 $
599,110 Less: Total revenue of hotel to be sold(2) (1,400 ) (1,600
) (10,560 ) (10,760 ) Comparable total revenue(3) $ 139,000
$ 141,900 $ 585,450 $ 588,350
Comparable Adjusted Hotel EBITDA Margin(3) 29.3 % 30.3 % 31.5 %
31.7 %
_____________
(1) Reflects non-cash amortization of ground lease asset,
deferred franchise costs, deferred key money, and unfavorable
contract liability. (2) Reflects results of operations for The
Hotel Minneapolis, Autograph Collection, which is under contract to
be sold with completion of the sale expected in Q4 2017. (3) The
Trust uses the term "comparable" to refer to metrics that include
only those hotels owned for the entirety of the two periods being
compared.
The following table reconciles forecasted net income to
Corporate EBITDA and Adjusted Corporate EBITDA for the three months
and year ending December 31, 2017:
Three Months EndingDecember 31, 2017
Year EndingDecember 31, 2017
Low High Low High Net
income $ 15,620 $ 17,570 $ 64,270 $ 66,220 Add: Interest expense
8,990 8,990 33,980 33,980 Income tax expense (benefit) (50 ) 150
1,420 1,620 Depreciation and amortization 18,840 18,840
76,090 76,090 Corporate EBITDA 43,400 45,550
175,760 177,910 Less: Non-cash amortization(1) (30 ) (30 )
(120 ) (120 ) Gain on sale of hotel (6,250 ) (6,250 ) (6,250 )
(6,250 ) Adjusted Corporate EBITDA $ 37,120 $ 39,270
$ 169,390 $ 171,540
_____________
(1) Reflects 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 and year ending December 31,
2017:
Three Months Ending
December 31, 2017
Year EndingDecember 31, 2017
Low High Low High Net
income $ 15,620 $ 17,570 $ 64,270 $ 66,220 Add: Depreciation and
amortization 18,840 18,840 76,090 76,090 Less: Gain on sale of
hotel (6,250 ) (6,250 ) (6,250 ) (6,250 ) FFO 28,210 30,160 134,110
136,060 Less: Preferred share dividends — — (5,270 ) (5,270
) Write-off of issuance costs of redeemed preferred shares — —
(4,420 ) (4,420 ) Dividends declared on unvested time-based awards
(120 ) (120 ) (490 ) (490 ) Undistributed earnings allocated to
unvested time-based awards — — — — FFO
available to common shareholders 28,090 30,040 123,930 125,880
Add: Write-off of issuance costs of
redeemed preferred shares
— — 4,420 4,420 Less: Non-cash amortization(1) (30 ) (30 ) (120 )
(120 ) AFFO available to common shareholders $ 28,060 $
30,010 $ 128,230 $ 130,180 FFO per
common share: Basic $ 0.48 $ 0.51 $ 2.10 $ 2.13 Diluted $ 0.47 $
0.51 $ 2.09 $ 2.12 AFFO per common share: Basic $ 0.48 $
0.51 $ 2.17 $ 2.21 Diluted $ 0.47 $ 0.51 $ 2.16 $ 2.20
Weighted-average number of common shares outstanding: Basic 59,044
59,044 59,026 59,026 Diluted 59,322 59,322 59,263 59,263
_____________
(1) Reflects 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 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(1) 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
Centric Fisherman’s Wharf San Francisco, CA 316 May 31, 2013 19
Hyatt Centric Santa Barbara Santa Barbara, CA 200 June 27, 2013 20
JW Marriott San Francisco Union Square San Francisco, CA 337
October 1, 2014 21 Royal Palm South Beach Miami, a Tribute
Portfolio Resort Miami Beach, FL 393 March 9, 2015 22 Ace Hotel and
Theater Downtown Los Angeles Los Angeles, CA 182 April 30, 2015
6,694
_____________
(1) Hotel is under contract to be sold with completion of
the sale expected in Q4 2017.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20171102005880/en/
Chesapeake Lodging TrustDouglas W. Vicari, 571-349-9452
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