Pebblebrook Hotel Trust (NYSE: PEB) (the “Company”) today
provided an update on recent operating trends.
Please visit
https://investor.pebblebrookhotels.com/investor-presentations-1 to
view the updated presentation the Company issued on its website
with additional details on the current operating trends.
Additionally, based upon a preliminary review of operating and
financial results, the Company has updated its fourth quarter 2022
outlook as follows:
Revised Q4 2022 Outlook (As of
12/20/2022)
Prior Outlook (As of
10/27/2022)
Variance to Prior
Outlook
Low
High
Low
High
Low
High
($ and shares/units in millions,
except per share and RevPAR data)
Net loss
($39.9)
($35.9)
($32.2)
($24.2)
($7.7)
($11.7)
Adjusted EBITDAre
$52.0
$56.0
$63.8
$71.8
($11.8)
($15.8)
Adjusted FFO(1)
$16.5
$20.5
$24.2
$32.2
($7.7)
($11.7)
Adjusted FFO per diluted share(1)
$0.13
$0.16
$0.18
$0.24
($0.05)
($0.08)
Same Property RevPAR
$173
$175
$183
$188
($10)
($13)
Same Property RevPAR variance vs.
2019(1)
(8.0%)
(7.0%)
(3.0%)
0.0%
(5.0%)
(7.0%)
Same Property RevPAR variance vs.
2021(1)
25.2%
26.6%
32.1%
36.2%
(6.9%)
(9.6%)
Same Property EBITDA(1)
$61.0
$65.0
$75.0
$83.0
($14.0)
($18.0)
Same Property EBITDA variance vs.
2019(1)
(31.6%)
(27.1%)
(15.9%)
(7.0%)
(15.7%)
(20.1%)
Based on the above Q4 2022 outlook, the implied full-year 2022
outlook is as follows:
Revised Full Year 2022 Outlook
(As of 12/20/2022)
Prior Outlook (As of
10/27/2022)
Variance to Prior
Outlook
Low
High
Low
High
Low
High
($ and shares/units in millions,
except per share and RevPAR data)
Net loss
($85.1)
($81.1)
($77.4)
($69.4)
($7.7)
($11.7)
Adjusted EBITDAre
$351.2
$355.2
$363.0
$371.0
($11.8)
($15.8)
Adjusted FFO(1)
$212.1
$216.1
$219.8
$227.8
($7.7)
($11.7)
Adjusted FFO per diluted share(1)
$1.61
$1.64
$1.66
$1.72
($0.05)
($0.08)
Same Property RevPAR
$193
$193
$195
$196
($2)
($3)
Same Property RevPAR variance vs.
2019(1)
(8.0%)
(7.75%)
(7.0%)
(6.5%)
(1.0%)
(1.25%)
Same Property RevPAR variance vs.
2021(1)
67.2%
67.2%
68.9%
69.8%
(1.7%)
(2.6%)
Same Property EBITDA(1)
$386.8
$390.8
$400.8
$408.8
($14.0)
($18.0)
Same Property EBITDA variance vs.
2019(1)
(16.4%)
(15.6%)
(13.4%)
(11.7%)
(3.0%)
(3.9%)
(1) See tables later in this press release
for a description of same-property information and reconciliations
from net income (loss) to non-GAAP financial measures, including
Earnings Before Interest, Taxes, Depreciation and Amortization
("EBITDA"), Adjusted EBITDAre, Adjusted Funds from Operations
("FFO") and Adjusted FFO per share.
For the details as to which hotels are
included in Same-Property Revenue Per Available Room (“RevPAR”) and
Same-Property EBITDA appearing in the table, refer to the
Same-Property Inclusion Reference Table later in this press
release.
While November’s Same-Property operating results significantly
exceeded last year’s performance, they were below the previously
provided outlook due to a negative impact from Hurricane Nicole and
weaker business and leisure demand during the second half of the
month, which may relate to new seasonal patterns around holidays
due to hybrid work. As a result, the Company is reducing its fourth
quarter and full year 2022 outlook, accordingly. The Company
continues to complete repair and remediation work at LaPlaya Beach
Resort & Club in Naples, Florida. The Company has negotiated an
installment of $25.0 million of insurance proceeds to date. The
resort remains closed during this rebuilding effort and is
currently targeted for a partial re-opening sometime in Q1
2023.
About Pebblebrook Hotel
Trust
Pebblebrook Hotel Trust (NYSE: PEB) is a publicly traded real
estate investment trust (“REIT”) and the largest owner of urban and
resort lifestyle hotels and resorts in the United States. The
Company owns 51 hotels and resorts, totaling approximately 12,800
guest rooms across 15 urban and resort markets. For more
information, visit www.pebblebrookhotels.com and follow us at
@PebblebrookPEB.
This press release contains certain “forward-looking statements”
made pursuant to the safe harbor provisions of the Private
Securities Reform Act of 1995. Forward-looking statements are
generally identifiable by the use of forward-looking terminology
such as “may,” “will,” “should,” “potential,” “intend,” “expect,”
“seek,” “anticipate,” “estimate,” “approximately,” “believe,”
“could,” “project,” “predict,” “forecast,” “continue,” “assume,”
“plan,” references to “outlook” or other similar words or
expressions. Forward-looking statements are based on certain
assumptions and can include future expectations, future plans and
strategies, financial and operating projections and forecasts and
other forward-looking information and estimates. Examples of
forward-looking statements include the following: descriptions of
the Company’s plans or objectives for future capital investment
projects, operations or services; forecasts of the Company’s future
economic performance; forecasts of hotel industry performance; and
descriptions of assumptions underlying or relating to any of the
foregoing expectations including assumptions regarding the timing
of their occurrence. These forward-looking statements are subject
to various risks and uncertainties, many of which are beyond the
Company’s control, which could cause actual results to differ
materially from such statements. These risks and uncertainties
include, but are not limited to, the state of the U.S. economy and
the supply of hotel properties, and other factors as are described
in greater detail in the Company’s filings with the SEC, including,
without limitation, the Company’s Annual Report on Form 10-K for
the year ended December 31, 2021. Unless legally required, the
Company disclaims any obligation to update any forward-looking
statements, whether as a result of new information, future events
or otherwise.
For further information about the Company’s business and
financial results, please refer to the "Management’s Discussion and
Analysis of Financial Condition and Results of Operations” and
“Risk Factors” sections of the Company’s filings with the U.S.
Securities and Exchange Commission, including, but not limited to,
its Annual Report on Form 10-K and Quarterly Reports on Form 10-Q,
copies of which may be obtained at the Investor Relations section
of the Company’s website at www.pebblebrookhotels.com.
All information in this press release is as of December 20,
2022. The Company undertakes no duty to update the statements in
this press release to conform the statements to actual results or
changes in the Company’s expectations.
For additional information or to receive press
releases via email, please visit our website at
www.pebblebrookhotels.com
Pebblebrook Hotel Trust Reconciliation of Q4 2022
and Full Year 2022 Outlook Net Income (Loss) to FFO and Adjusted
FFO ($ in millions, except per share data)
(Unaudited) Three months endingDecember 31,
2022 Year endingDecember 31, 2022 Low High
Low High Net income (loss)
$
(40
)
$
(36
)
$
(85
)
$
(81
)
Adjustments: Real estate depreciation and amortization
62
62
241
241
(Gain) loss on sale of hotel properties
-
-
(6
)
(6
)
Impairment loss
-
-
86
86
FFO
$
22
$
26
$
236
$
240
Distribution to preferred shareholders and unit holders
(13
)
(13
)
(48
)
(48
)
FFO available to common share and unit holders
$
9
$
13
$
188
$
192
Non-cash ground rent
2
2
8
8
Amortization of share-based compensation expense
3
3
11
11
Other
3
3
5
5
Adjusted FFO available to common share and unit holders
$
17
$
21
$
212
$
216
FFO per common share - diluted
$
0.07
$
0.10
$
1.42
$
1.45
Adjusted FFO per common share - diluted
$
0.13
$
0.16
$
1.61
$
1.64
Weighted-average number of fully diluted common shares and
units
132.0
132.0
132.1
132.1
To supplement the Company’s consolidated financial
statements presented in accordance with U.S. GAAP, this press
release includes certain non-GAAP financial measures as defined
under SEC rules.These measures are not in accordance with, or an
alternative to, measures prepared in accordance with GAAP and may
be different from similarly titled non-GAAP financial measures used
by other companies. In addition, these non-GAAP financial measures
are not based on any comprehensive set of accounting rules or
principles. Non-GAAP financial measures have limitations in that
they do not reflect all of the amounts associated with the
Company’s results of operations determined in accordance with
GAAP.Funds from Operations (“FFO”) - FFO represents net income
(computed in accordance with GAAP), excluding gains or losses from
sales of properties, plus real estate-related depreciation and
amortization and after adjustments for unconsolidated partnerships.
The Company considers FFO a useful measure of performance for an
equity REIT because it facilitates an understanding of the
Company's operating performance without giving effect to real
estate depreciation and amortization, which assume that the value
of real estate assets diminishes predictably over time. Since real
estate values have historically risen or fallen with market
conditions, the Company believes that FFO provides a meaningful
indication of its performance. The Company also considers FFO an
appropriate performance measure given its wide use by investors and
analysts. The Company computes FFO in accordance with standards
established by the Board of Governors of Nareit in its March 1995
White Paper (as amended in November 1999 and April 2002), which may
differ from the methodology for calculating FFO utilized by other
equity REITs and, accordingly, may not be comparable to that of
other REITs. Further, FFO does not represent amounts available for
management’s discretionary use because of needed capital
replacement or expansion, debt service obligations or other
commitments and uncertainties, nor is it indicative of funds
available to fund the Company’s cash needs, including its ability
to make distributions. The Company presents FFO per diluted share
calculations that are based on the outstanding dilutive common
shares plus the outstanding Operating Partnership units for the
periods presented.The Company also evaluates its performance by
reviewing Adjusted FFO because it believes that adjusting FFO to
exclude certain recurring and non-recurring items described below
provides useful supplemental information regarding the Company's
ongoing operating performance and that the presentation of Adjusted
FFO, when combined with the primary GAAP presentation of net income
(loss), more completely describes the Company's operating
performance. The Company adjusts FFO for the following items, which
may occur in any period, and refers to this measure as Adjusted
FFO:- Non-cash ground rent: The Company excludes the non-cash
ground rent expense, which is primarily made up of the
straight-line rent impact from a ground lease.- Non-cash interest
expense: The Company excludes non-cash interest expense because the
Company believes that including this adjustment in FFO does not
reflect the underlying financial performance of the Company and its
hotels.- Amortization of share-based compensation expense: The
Company excludes the amortization of share-based compensation
expense because the Company believes that including this adjustment
in FFO does not reflect the underlying financial performance of the
Company and its hotels.- Other: The Company excludes other
expenses, which include transaction costs, management/franchise
contract transition costs, interest expense adjustment for acquired
liabilities, finance lease adjustment and non-cash amortization of
acquired intangibles because the Company believes that including
these non-cash adjustments in FFO does not reflect the underlying
financial performance of the Company and its hotels.The Company’s
presentation of FFO in accordance with the Nareit White Paper, and
as adjusted by the Company, should not be considered as an
alternative to net income (computed in accordance with GAAP) as an
indicator of the Company’s financial performance or to cash flow
from operating activities (computed in accordance with GAAP) as an
indicator of its liquidity.Any differences are a result of
rounding.
Pebblebrook Hotel Trust Reconciliation
of Q4 2022 and Full Year 2022 Outlook Net Income (Loss) to EBITDA,
EBITDAre and Adjusted EBITDAre ($ in millions)
(Unaudited) Three months endingDecember 31,
2022 Year endingDecember 31, 2022 Low High
Low High Net income (loss)
$
(40
)
$
(36
)
$
(85
)
$
(81
)
Adjustments: Interest expense and income tax expense
24
24
96
96
Depreciation and amortization
62
62
241
241
EBITDA
$
46
$
50
$
252
$
256
(Gain) loss on sale of hotel properties
-
-
(6
)
(6
)
Impairment loss
-
-
86
86
EBITDAre
$
46
$
50
$
332
$
336
Non-cash ground rent
2
2
8
8
Amortization of share-based compensation expense
3
3
11
11
Other
1
1
-
-
Adjusted EBITDAre
$
52
$
56
$
351
$
355
To supplement the Company’s consolidated financial
statements presented in accordance with U.S. GAAP, this press
release includes certain non-GAAP financial measures as defined
under SEC rules.These measures are not in accordance with, or an
alternative to, measures prepared in accordance with GAAP and may
be different from similarly titled non-GAAP financial measures used
by other companies. In addition, these non-GAAP financial measures
are not based on any comprehensive set of accounting rules or
principles. Non-GAAP financial measures have limitations in that
they do not reflect all of the amounts associated with the
Company’s results of operations determined in accordance with
GAAP.Earnings before Interest, Taxes, and Depreciation and
Amortization ("EBITDA") - The Company believes that EBITDA provides
investors a useful financial measure to evaluate its operating
performance, excluding the impact of our capital structure
(primarily interest expense) and our asset base (primarily
depreciation and amortization).Earnings before Interest, Taxes, and
Depreciation and Amortization for Real Estate ("EBITDAre") - The
Company believes that EBITDAre provides investors a useful
financial measure to evaluate its operating performance, and the
Company presents EBITDAre in accordance with the National
Association of Real Estate Investment Trusts ("Nareit") guidelines,
as defined in its September 2017 white paper "Earnings Before
Interest, Taxes, Depreciation and Amortization for Real Estate."
EBITDAre adjusts EBITDA for the following items, which may occur in
any period, and refers to these measures as Adjusted EBITDAre: (1)
gains or losses of on the disposition of depreciated property,
including gains or losses on change of control; (2) impairment
write-downs of depreciated property and of investments in
unconsolidated affiliates caused by a decrease in value of
depreciated property in the affiliate; and (3) adjustments to
reflect the entity's share of EBITDAre of unconsolidated
affiliates.The Company also evaluates its performance by reviewing
Adjusted EBITDAre because it believes that adjusting EBITDAre to
exclude certain recurring and non-recurring items described below
provides useful supplemental information regarding the Company's
ongoing operating performance and that the presentation of Adjusted
EBITDAre, when combined with the primary GAAP presentation of net
income (loss), more completely describes the Company's operating
performance. The Company adjusts EBITDAre for the following items,
which may occur in any period, and refers to these measures as
Adjusted EBITDAre:- Non-cash ground rent: The Company excludes the
non-cash ground rent expense, which is primarily made up of the
straight-line rent impact from a ground lease.- Amortization of
share-based compensation expense: The Company excludes amortization
of share-based compensation expense because the Company believes
that including this non-cash adjustment in EBITDAre does not
reflect the underlying financial performance of the Company and its
hotels.- Other: The Company excludes other expenses, which include
transaction costs, management/franchise contract transition costs
and non-cash amortization of acquired intangibles because the
Company believes that including these non-cash adjustments in
EBITDAre does not reflect the underlying financial performance of
the Company and its hotels.The Company’s presentation of EBITDAre,
and as adjusted by the Company, should not be considered as an
alternative to net income (computed in accordance with GAAP) as an
indicator of the Company’s financial performance or to cash flow
from operating activities (computed in accordance with GAAP) as an
indicator of its liquidity.Any differences are a result of
rounding.
Pebblebrook Hotel Trust 2022
Same-Property Inclusion Reference Table Hotels
Q1 Q2 Q3 Q4 Hotel Monaco
Washington DC X X X X Skamania Lodge X X X X Le Méridien Delfina
Santa Monica X X X X Sofitel Philadelphia at Rittenhouse Square X X
Argonaut Hotel X X X X The Westin San Diego Gaslamp Quarter X X X X
Hotel Monaco Seattle X X X X Mondrian Los Angeles X X X X W Boston
X X X X Hotel Zetta San Francisco X X X X Hotel Vintage Seattle X X
X X Hotel Vintage Portland X X W Los Angeles - West Beverly Hills X
X X X Hotel Zelos San Francisco X X X X Embassy Suites San Diego
Bay - Downtown X X X X The Hotel Zags X X X X Hotel Zephyr
Fisherman's Wharf X X X X Hotel Zeppelin San Francisco X X X X The
Nines, a Luxury Collection Hotel, Portland X X X X Hotel Colonnade
Coral Gables, Autograph Collection X X X X Hotel Palomar Los
Angeles Beverly Hills X X X X Revere Hotel Boston Common X X X X
LaPlaya Beach Resort & Club X X X Hotel Zoe Fisherman's Wharf X
X X X 1 Hotel San Francisco The Marker San Francisco X Hotel Spero
X X Harbor Court Hotel San Francisco X X X X Chaminade Resort &
Spa X X X X Viceroy Santa Monica Hotel X X X X Le Parc Suite Hotel
X X X X Montrose West Hollywood X X X X Chamberlain West Hollywood
Hotel X X X X Hotel Ziggy X X X X The Westin Copley Place, Boston X
X X X The Liberty, a Luxury Collection Hotel, Boston X X X X Hyatt
Regency Boston Harbor X X X X George Hotel X X X X Viceroy
Washington DC X X X X Hotel Zena Washington DC X X X X Paradise
Point Resort & Spa X X X X Hilton San Diego Gaslamp Quarter X X
X X L'Auberge Del Mar X X X X San Diego Mission Bay Resort X X X X
Solamar Hotel X X X X The Heathman Hotel X X X X Southernmost Beach
Resort X X X X The Marker Key West Harbor Resort X X X X Hotel
Chicago Downtown, Autograph Collection X X X X The Westin Michigan
Avenue Chicago X X X X Jekyll Island Club Resort X X X X
Margaritaville Hollywood Beach Resort X X X X Estancia La Jolla
Hotel & Spa X X X X Inn on Fifth X X X Newport Harbor Island
Resort X X
Notes: A property
marked with an "X" in a specific quarter denotes that the
same-property operating results of that property are included in
the Same-Property Statistical Data and in the Schedule of
Same-Property Results.The Company's estimates and assumptions for
Same-Property RevPAR, RevPAR Growth, Total RevPAR, Total RevPAR
Growth, ADR, Occupancy, Revenues, Expenses, EBITDA and EBITDA
Margin for the fourth quarter of 2022 include all of the hotels the
Company owned as of December 20, 2022, except for 1 Hotel San
Francisco for Q4 2022, 2021 and 2019 due to its closure for
renovation during Q4 2021, and LaPlaya Beach Resort & Club for
Q4 2022, 2021 and 2019 due to its closure following Hurricane Ian
during Q4 2022.Operating statistics and financial results may
include periods prior to the Company's ownership of the hotels.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20221220005684/en/
Raymond D. Martz, Chief Financial Officer, Pebblebrook Hotel
Trust - (240) 507-1330
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