Pebblebrook Hotel Trust (NYSE: PEB):
Q1 FINANCIAL
HIGHLIGHTS
- Net loss: ($22.0) million
- Same-Property Total RevPAR(1) increased 23.8% vs. 2022
- Same-Property EBITDA(1) $59.3 million, 25.4% above 2022
- Adjusted EBITDAre(1) $60.8 million, increased 30.8% vs.
2022
- Adjusted FFO(1) per diluted share $0.18 vs. $0.11 in 2022
HOTEL OPERATING TRENDS
- Business demand, both group and transient, continues to
recover, benefiting our urban markets as well as our resorts; group
revenue pace for Q2-Q4 2023 is up 20% over the prior year, with ADR
ahead by 8.7%
- Leisure demand remains healthy. As expected, Resort ADR
premiums remain far above 2019, but less than last year, as
occupancies recover. Compared with the prior year, Urban ADR
premiums continue to grow, offsetting resort declines.
Same-Property ADR declined by 0.8% as Same-Property Occupancy
climbed 19.4%
- Have not yet seen any slowdown in business or leisure demand
due to macro-economic concerns
PORTFOLIO UPDATES &
REPOSITIONINGS
- During the quarter, completed $135.3 million of property sales,
including The Heathman Hotel in Portland, Oregon for $45 million,
the retail parcel at 909 North Michigan Avenue in Chicago for $27.3
million, and Hotel Colonnade in Coral Gables, Florida for $63
million
- Executed contracts to sell Monaco Seattle for $63.3 million and
Vintage Seattle for $33.7 million. Both individual sales are
targeted to close later in Q2 2023
- Made $26.2 million of capital investments during the quarter,
including the ongoing major renovations of Hilton San Diego Gaslamp
Quarter, Newport Harbor Island Resort, Viceroy Santa Monica, and
Jekyll Island Club Resort and the redevelopment of Hotel Solamar
into Margaritaville Hotel San Diego Gaslamp Quarter
Q2 2023 OUTLOOK
- Net income: $34.0 to $38.9 million
- Same-Property RevPAR(1) +1.0% to +4.0% vs. 2022
- Adjusted EBITDAre(1): $107.5 to $113.0 million
- Adjusted FFO(1) per diluted share: $0.52 to $0.57
(1) See tables later in this press release for a description of
Same-Property information and reconciliations from net income
(loss) to non-GAAP financial measures used in the table above and
elsewhere in this press release.
"First-quarter operating results exceeded
our outlook due to improving demand in a number of urban markets,
including San Francisco, Portland, Chicago, and Washington, DC.
This generated substantial gains in room and non-room revenue with
improved profits across our properties in these markets. Our
resorts benefited from improving occupancies from recovering group
demand with ADR premiums continuing to be far above 2019.
Performance at our West Coast resorts would have been better but
for the endless rains and cold weather on the West Coast throughout
the quarter that negatively affected leisure demand. We completed
three property sales during the quarter in an increasingly
challenging market, and we executed contracts to sell two
additional hotels, both in Seattle, and we expect these sales will
close later in the second quarter. We continue to utilize proceeds
from property sales to reduce our net debt and repurchase our
shares at a significant discount to the underlying saleable private
market value of our portfolio.”
-Jon E. Bortz, Chairman and Chief
Executive Officer of Pebblebrook Hotel Trust
First Quarter Highlights
First Quarter
Same-Property and Corporate
Highlights
2023
2022
(’23 vs. ’22 growth)
($ in millions except per share
and RevPAR data)
Net income (loss)
($22.0)
($100.2)
Same-Property Room Revenues(1)
$185.7
$156.6
Same-Property Room Revenues variance
18.6%
Same-Property Total Revenues(1)
$289.7
$234.1
Same-Property Total Revenues variance
23.8%
Same-Property Total Expenses(1)
$230.4
$186.8
Same-Property Total Expenses variance
23.3%
Same-Property EBITDA(1)
$59.3
$47.3
Same-Property EBITDA variance
25.4%
Adjusted EBITDAre(1)
$60.8
$46.5
Adjusted EBITDAre variance
30.8%
Adjusted FFO(1)
$22.4
$14.0
Adjusted FFO per diluted share(1)
$0.18
$0.11
Adjusted FFO per diluted share
variance
63.6%
2023 Monthly Results
Same-Property Portfolio
Highlights(2)
January
February
March
($ in millions except ADR and
RevPAR data)
Occupancy
47.3%
59.9%
66.9%
ADR
$287
$293
$303
RevPAR
$135.9
$175.2
$202.4
Total Revenues
$80.8
$93.0
$115.9
Total Revenues growth rate (2023 vs.
2022)
58.7%
20.2%
9.6%
Hotel EBITDA
$6.0
$18.7
$34.6
(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"), EBITDA
for Real Estate ("EBITDAre"), Adjusted EBITDAre, Funds from
Operations ("FFO"), FFO per share, Adjusted FFO and Adjusted FFO
per share.
Adjusted EBITDAre, Adjusted FFO and Adjusted FFO per share
exclude the amortization of share-based compensation expense.
Historical and comparable period results of such non-GAAP financial
measures have been adjusted to reflect the exclusion.
(2) Includes information for all the hotels the Company owned as
of March 31, 2023, except for the following:
- 1 Hotel San Francisco
- LaPlaya Beach Resort & Club
“Our urban hotels led the portfolio growth this quarter, with
occupancy up 22.1 percent and ADR rising by 8.7 percent. Total
RevPAR at our urban hotels increased 38.4 percent, and their EBITDA
more than doubled over the prior-year period,” noted Mr. Bortz.
“San Francisco and Washington, DC were our most improved urban
markets during the quarter. San Francisco benefited from healthy
citywide and corporate group demand as well as improved business
transient demand. Our hotels in Washington, DC saw significantly
improved business transient, group, and convention demand, as
occupancy levels doubled versus the prior year period.”
In addition to several winter storms during Q1, the Company’s
hotel operating results were also negatively impacted by the
disruption from several ongoing redevelopment projects. These
renovations displaced approximately 275 basis points of
Same-Property RevPAR growth, approximately $6.8 million of hotel
revenues, and approximately $5.0 million of Same-Property
EBITDA.
Update on Impact from Hurricane Ian
The Company continues to complete significant repairs and
rebuilding at the 189-room LaPlaya Beach Resort & Club. The
resort’s Bay Tower (40 rooms) reopened during the first quarter.
The Gulf Tower (70 rooms) partially reopened in April. The
property’s Beach House (79 rooms) remains closed but is on track to
be fully remediated, restored and reopened by the end of this year.
The resort is currently operating with limited resort services and
amenities, but we expect these to be restored over the next three
months as rebuilding these facilities is completed.
The Company anticipates all operational disruption will be
covered under the Company’s business interruption and property
insurance programs, net of deductibles. A preliminary business
interruption settlement of $8.1 million was recorded in Q1 related
to lost income from Q4 2022. The Company anticipates an additional
preliminary business interruption settlement of approximately $10.0
million to be approved in Q2 2023 relating to lost business from Q1
2023. Pebblebrook expects to record additional business
interruption settlements in 2023 as these are determined and
finalized with its insurance providers.
Update on Strategic Dispositions
The Company completed three property dispositions during the
quarter, generating $135.3 million of sales proceeds. This included
The Heathman Hotel (151 rooms) in Portland, Oregon, for $45.0
million, Hotel Colonnade (157 rooms) in Coral Gables, Florida, for
$63.0 million, and the retail parcel located at 909 North Michigan
Avenue in Chicago, Illinois, adjacent to the Company’s Westin
Michigan Avenue for $27.3 million.
The Company has executed individual contracts to sell Monaco
Seattle (189 rooms) for $63.3 million and Vintage Seattle (125
rooms) for $33.7 million to separate non-affiliated third parties.
Each property sale is subject to normal closing conditions. The
Company offers no assurances that these sales will be completed on
these terms or at all. The property sales are targeted to be
completed later in the second quarter of 2023.
Net proceeds from the Company’s dispositions will be used for
general corporate purposes, including reducing the Company’s
outstanding debt and repurchasing common and preferred shares.
Common Share Repurchases
Since our last Earnings Release in late February 2023, the
Company has repurchased 3.0 million common shares at an average
price of $13.85 per share. On a cumulative basis since October
2022, the Company has repurchased 8.5 million common shares, or
approximately 6.4 percent of the Company’s previous outstanding
share count, at an average price of $14.66 per share, representing
an approximate 48% discount to the midpoint of the Company's most
recently published estimated Net Asset Value (“NAV”).
Capital Investments and Strategic Property
Redevelopments
During the first quarter, the Company completed $26.2 million of
capital investments throughout its portfolio. The Company expects
to invest a total of $145.0 to $155.0 million in capital
improvements in 2023, which includes completing the redevelopment
and repositioning projects at Hotel Solamar (to be converted to
Margaritaville Hotel San Diego Gaslamp Quarter), Hilton San Diego
Gaslamp Quarter, Jekyll Island Club Resort, Viceroy Santa Monica
Hotel, Estancia La Jolla Hotel & Spa, the four guesthouses at
Southernmost Beach Resort, as well as the development of a new
outdoor venue and 11 additional alternative lodging units at
Skamania Lodge. We also expect to commence the comprehensive
redevelopment and repositioning of Newport Harbor Island Resort in
the fourth quarter.
Balance Sheet and Liquidity
As of March 31, 2023, the Company had $146.5 million of
consolidated cash, cash equivalents and restricted cash, in
addition to $636.9 million of undrawn availability on its senior
unsecured revolving credit facility, for total liquidity of $783.4
million. The Company had $2.4 billion in consolidated debt and
convertible notes at an effective weighted-average interest rate of
4.1 percent. $1.7 billion, or 71% of the Company’s total
outstanding debt and convertible notes, was at an effective
weighted-average fixed interest rate of 3.0 percent, and $0.7
billion, or 29% percent, was at a weighted-average floating
interest rate of 6.9 percent.
Common and Preferred Dividends
On March 15, 2023, the Company declared a quarterly cash
dividend of $0.01 per share on its common shares and a regular
quarterly cash dividend for the following preferred shares of
beneficial interest.
- $0.39844 per 6.375% Series E Cumulative Redeemable Preferred
Share;
- $0.39375 per 6.3% Series F Cumulative Redeemable Preferred
Share;
- $0.39844 per 6.375% Series G Cumulative Redeemable Preferred
Share; and
- $0.35625 per 5.7% Series H Cumulative Redeemable Preferred
Share.
Update on Curator Hotel & Resort Collection
Curator Hotel & Resort Collection (“Curator”) is a distinct
collection of experientially focused small brands and independent
lifestyle hotels and resorts worldwide founded by Pebblebrook and
several industry-leading independent lifestyle hotel operators. As
of March 31, 2023, Curator had 97 member hotels and 102 master
service agreements with preferred vendor partners, providing
Curator member hotels with preferred pricing, enhanced operating
terms, and early access to curated new technologies.
Q2 2023 Outlook
Based on current trends and assuming no material disruptions to
travel caused by pandemics or worsening macro-economic conditions,
the Company’s outlook for Q2 2023 is as follows:
Q2 2023 Outlook
Low
High
($ and shares/units in millions, except
per share and RevPAR data)
Net income
$34.0
$38.9
Adjusted EBITDAre
$107.5
$113.0
Adjusted FFO
$65.0
$70.5
Adjusted FFO per diluted share
$0.52
$0.57
This Q2 2023 Outlook is based, in part, on
the following estimates and assumptions:
Same-Property RevPAR
$227.6
$234.4
Same-Property RevPAR variance vs. 2022
1.0%
4.0%
Same-Property EBITDA
$108.0
$113.0
Same-Property EBITDA variance vs. 2022
(15.4%)
(11.5%)
The Company’s Same-Property RevPAR and Same-Property EBITDA
assumptions exclude properties expected to be sold in Q2 2023.
The Company’s outlook incorporates the estimated negative impact
of displaced revenues and EBITDA associated with the ongoing
redevelopments and transformations of Solamar Hotel (conversion to
Margaritaville Hotel San Diego Gaslamp Quarter), Hilton San Diego
Gaslamp Quarter, Estancia La Jolla Hotel & Spa, Viceroy Santa
Monica, Jekyll Island Club Resort, and a small renovation project
at The Nines Portland. Same-Property RevPAR growth is expected to
be negatively impacted by these major transformation projects in
the second quarter by approximately 150 basis points, and
Same-Property EBITDA is expected to be reduced by approximately
$5.5 million.
The second quarter outlook also incorporates an estimated $10.0
million for an additional preliminary business interruption
settlement at LaPlaya relating to lost income from the first
quarter of 2023. This amount affects the Company’s Adjusted
EBITDAre, Adjusted FFO, and net income.
First Quarter 2023 Earnings Call
The Company will conduct its quarterly analyst and investor
conference call on Thursday, April 27, 2023, at 10:00 AM ET. Please
dial (877) 407-3982 approximately ten minutes before the call
begins to participate. A live webcast of the conference call will
also be available through the Investor Relations section of
www.pebblebrookhotels.com. To access the webcast,
click on https://investor.pebblebrookhotels.com/news-
and-events/webcasts/default.aspx ten minutes before the conference
call. A replay of the conference call webcast will be archived and
available online.
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 49 hotels
and resorts, totaling approximately 12,500 guest rooms across 14
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;
statements regarding expectations of hotel dispositions; use of
proceeds; 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, 2022. 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 March 31, 2023.
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
Consolidated Balance
Sheets
($ in thousands, except share
and per-share data)
March 31, 2023
December 31, 2022
(Unaudited)
ASSETS
Assets: Investment in hotel properties, net
$
5,703,446
$
5,874,876
Hotels held for sale
70,859
44,861
Cash and cash equivalents
138,515
41,040
Restricted cash
8,034
11,229
Hotel receivables (net of allowance for doubtful accounts of $292
and $431, respectively)
43,422
45,258
Prepaid expenses and other assets
113,459
116,276
Total assets
$
6,077,735
$
6,133,540
LIABILITIES AND EQUITY
Liabilities: Unsecured term loans, net of unamortized
deferred financing costs
1,372,794
1,372,057
Convertible senior notes, net of unamortized debt premium and
discount and deferred financing costs
746,560
746,326
Senior unsecured notes, net of unamortized deferred financing costs
49,940
49,920
Mortgage loans, net of unamortized debt discount and deferred
financing costs
218,723
218,990
Accounts payable, accrued expenses and other liabilities
258,934
250,518
Lease liabilities - operating leases
320,469
320,402
Deferred revenues
82,450
73,603
Accrued interest
9,359
4,535
Liabilities related to hotels held for sale
2,214
428
Distribution payable
12,181
12,218
Total liabilities
3,073,624
3,048,997
Commitments and contingencies
Shareholders' Equity:
Preferred shares of beneficial interest, $0.01 par value
(liquidation preference $715,000 at March 31, 2023 and December 31,
2022), 100,000,000 shares authorized; 28,600,000 shares issued and
outstanding at March 31, 2023 and December 31, 2022
286
286
Common shares of beneficial interest, $0.01 par value, 500,000,000
shares authorized; 123,632,667 shares issued and outstanding at
March 31, 2023 and 126,345,293 shares issued and outstanding at
December 31, 2022
1,236
1,263
Additional paid-in capital
4,142,491
4,182,359
Accumulated other comprehensive income (loss)
29,891
35,724
Distributions in excess of retained earnings
(1,258,275
)
(1,223,117
)
Total shareholders' equity
2,915,629
2,996,515
Non-controlling interests
88,482
88,028
Total equity
3,004,111
3,084,543
Total liabilities and equity
$
6,077,735
$
6,133,540
Pebblebrook Hotel
Trust
Consolidated Statements of
Operations
($ in thousands, except share
and per-share data)
(Unaudited)
Three months ended March
31,
2023
2022
Revenues: Room
$
196,374
$
168,632
Food and beverage
75,763
62,424
Other operating
33,582
27,012
Total revenues
$
305,719
$
258,068
Expenses: Hotel operating expenses: Room
$
56,424
$
42,463
Food and beverage
58,672
46,050
Other direct and indirect
99,214
85,847
Total hotel operating expenses
214,310
174,360
Depreciation and amortization
58,369
59,100
Real estate taxes, personal property taxes, property insurance, and
ground rent
28,904
30,457
General and administrative
9,988
9,708
Impairment
-
60,983
(Gain) loss on sale of hotel properties
(6,635
)
-
Business interruption insurance income
(8,089
)
-
Other operating expenses
3,670
1,123
Total operating expenses
300,517
335,731
Operating income (loss)
5,202
(77,663
)
Interest expense
(27,430
)
(22,572
)
Other
183
19
Income (loss) before income taxes
(22,045
)
(100,216
)
Income tax (expense) benefit
-
-
Net income (loss)
(22,045
)
(100,216
)
Net income (loss) attributable to non-controlling interests
883
(686
)
Net income (loss) attributable to the Company
(22,928
)
(99,530
)
Distributions to preferred shareholders
(10,988
)
(11,344
)
Net income (loss) attributable to common shareholders
$
(33,916
)
$
(110,874
)
Net income (loss) per share available to common
shareholders, basic
$
(0.27
)
$
(0.85
)
Net income (loss) per share available to common shareholders,
diluted
$
(0.27
)
$
(0.85
)
Weighted-average number of common shares, basic
125,488,415
130,904,299
Weighted-average number of common shares, diluted
125,488,415
130,904,299
Considerations Regarding Non-GAAP Financial Measures
This press release includes certain non-GAAP financial measures.
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.
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 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
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 FFO and Adjusted EBITDAre
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 and Adjusted
EBITDAre, when combined with the primary GAAP presentation of net
income (loss), more completely describes the Company's operating
performance. The Company adjusts FFO available to common share and
unit holders for the following items, which may occur in any
period, and refers to this measure as Adjusted FFO and Adjusted
EBITDAre:
- Transaction costs: The Company
excludes transaction costs expensed during the period because it
believes that including these costs in FFO does not reflect the
underlying financial performance of the Company and its hotels.
- 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.
- Management/franchise contract
transition costs: The Company excludes one-time management
and/or franchise contract transition costs expensed during the
period because it believes that including these costs in FFO and
Adjusted EBITDAre does not reflect the underlying financial
performance of the Company and its hotels.
- Interest expense adjustment for
acquired liabilities: The Company excludes interest expense
adjustment for acquired liabilities assumed in connection with
acquisitions, because it believes that including these non-cash
adjustments in FFO and Adjusted EBITDAre does not reflect the
underlying financial performance of the Company.
- Finance lease adjustment: The
Company excludes the effect of non-cash interest expense from
finance leases because it believes that including these non-cash
adjustments in FFO and Adjusted EBITDAre does not reflect the
underlying financial performance of the Company.
- Non-cash amortization of acquired
intangibles: The Company excludes the non-cash amortization of
acquired intangibles, which includes but is not limited to the
amortization of favorable and unfavorable leases or management
agreements and above/below market real estate tax reduction
agreements because it believes that including these non-cash
adjustments in FFO and Adjusted EBITDAre does not reflect the
underlying financial performance of the Company.
- Non-cash interest expense, one-time
operation suspension expenses, early extinguishment of debt,
amortization of share-based compensation expense, issuance costs of
redeemed preferred shares, and hurricane-related repairs costs:
The Company excludes these items because the Company believes that
including these adjustments in FFO does not reflect the underlying
financial performance of the Company and its hotels.
- One-time operation suspension
expenses, amortization of share-based compensation expense, and
hurricane-related costs: The Company excludes these items
because it believes that including these costs in EBITDAre does not
reflect the underlying financial performance of the Company and its
hotels.
The Company presents weighted-average
number of basic and fully diluted common shares and units by
excluding the dilutive effect of shares issuable upon conversion of
convertible debt.
The Company’s presentation of FFO and
Adjusted EBITDAre 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. 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.
Pebblebrook Hotel
Trust
Reconciliation of Net Income
(Loss) to FFO and Adjusted FFO
($ in thousands, except share
and per-share data)
(Unaudited)
Three months ended March
31,
2023
2022
Net income (loss)
$
(22,045
)
$
(100,216
)
Adjustments: Real estate depreciation and amortization
58,284
59,010
Gain on sale of hotel properties
(6,635
)
-
Impairment loss
-
60,983
FFO
$
29,604
$
19,777
Distribution to preferred shareholders and unit holders
(12,152
)
(11,344
)
Issuance costs of redeemed preferred shares
-
-
FFO available to common share and unit holders
$
17,452
$
8,433
Transaction costs
53
15
Non-cash ground rent
1,906
1,938
Management/franchise contract transition costs
112
263
Interest expense adjustment for acquired liabilities
541
722
Finance lease adjustment
734
722
Non-cash amortization of acquired intangibles
(4,049
)
(542
)
Non-cash interest expense
-
49
Amortization of share-based compensation expense
2,879
2,355
Hurricane-related costs
2,785
-
Adjusted FFO available to common share and unit holders
$
22,413
$
13,955
FFO per common share - basic
$
0.14
$
0.06
FFO per common share - diluted
$
0.14
$
0.06
Adjusted FFO per common share - basic
$
0.18
$
0.11
Adjusted FFO per common share - diluted
$
0.18
$
0.11
Weighted-average number of basic common shares and units
126,496,795
131,765,112
Weighted-average number of fully diluted common shares and units
126,496,795
131,765,112
See “Considerations Regarding Non-GAAP
Financial Measures” of this press release for important
considerations regarding our use of non-GAAP financial
measures.
Pebblebrook Hotel
Trust
Reconciliation of Net Income
(Loss) to EBITDA, EBITDAre and Adjusted EBITDAre
($ in thousands)
(Unaudited)
Three months ended March
31,
2023
2022
Net income (loss)
$
(22,045
)
$
(100,216
)
Adjustments: Interest expense
27,430
22,572
Income tax expense (benefit)
-
-
Depreciation and amortization
58,369
59,100
EBITDA
$
63,754
$
(18,544
)
Gain on sale of hotel properties
(6,635
)
-
Impairment loss
-
60,983
EBITDAre
$
57,119
$
42,439
Transaction costs
53
15
Non-cash ground rent
1,906
1,938
Management/franchise contract transition costs
112
263
Non-cash amortization of acquired intangibles
(4,049
)
(542
)
Amortization of share-based compensation expense
2,879
2,355
Hurricane-related costs
2,785
-
Adjusted EBITDAre
$
60,805
$
46,468
See “Considerations Regarding Non-GAAP
Financial Measures” of this press release for important
considerations regarding our use of non-GAAP financial measures.
Any differences are a result of rounding.
Pebblebrook Hotel
Trust
Reconciliation of Q2 2023
Outlook Net Income (Loss) to FFO and Adjusted FFO
($ in millions, except per
share data)
(Unaudited)
Three months ending June 30,
2023
Low
High
Net income (loss)
$
34
$
39
Adjustments: Real estate depreciation and amortization
59
59
(Gain) loss on sale of hotel properties
(23
)
(23
)
Impairment loss
-
-
FFO
$
70
$
75
Distribution to preferred shareholders and unit holders
(12
)
(12
)
FFO available to common share and unit holders
$
58
$
63
Non-cash ground rent
2
2
Amortization of share-based compensation expense
3
3
Other
2
2
Adjusted FFO available to common share and unit holders
$
65
$
70
FFO per common share - diluted
$
0.47
$
0.51
Adjusted FFO per common share - diluted
$
0.52
$
0.57
Weighted-average number of fully diluted common shares and
units
124.2
124.2
See “Considerations Regarding Non-GAAP
Financial Measures” of this press release for important
considerations regarding our use of non-GAAP financial measures.
Any differences are a result of rounding.
Pebblebrook Hotel
Trust
Reconciliation of Q2 2023
Outlook Net Income (Loss) to EBITDA, EBITDAre and Adjusted
EBITDAre
($ in millions)
(Unaudited)
Three months ending June 30,
2023
Low
High
Net income (loss)
$
34
$
39
Adjustments: Interest expense and income tax expense
32
32
Depreciation and amortization
59
59
EBITDA
$
125
$
130
(Gain) loss on sale of hotel properties
(23
)
(23
)
Impairment loss
-
-
EBITDAre
$
102
$
107
Non-cash ground rent
2
2
Amortization of share-based compensation expense
3
3
Other
1
1
Adjusted EBITDAre
$
108
$
113
See “Considerations Regarding Non-GAAP
Financial Measures” of this press release for important
considerations regarding our use of non-GAAP financial measures.
Any differences are a result of rounding.
Pebblebrook Hotel
Trust
Same-Property Statistical
Data
(Unaudited)
Three months ended March
31,
2023
2022
Same-Property Occupancy
58.0
%
48.5
%
2023 vs. 2022 Increase/(Decrease)
19.6
%
Same-Property ADR
$
295.02
$
297.31
2023 vs. 2022 Increase/(Decrease)
(0.8
%)
Same-Property RevPAR
$
171.05
$
144.33
2023 vs. 2022 Increase/(Decrease)
18.5
%
Same-Property Total RevPAR
$
266.92
$
215.69
2023 vs. 2022 Increase/(Decrease)
23.8
%
Notes: The schedule of hotel
results for the three months ended March 31 includes information
from all of the hotels the Company owned as of March 31, 2023,
except for the following:
- Q1 Same-Property Exclusions: 1 Hotel San Francisco,
LaPlaya Beach Resort & Club
These hotel results for the respective periods may include
information reflecting operational performance prior to the
Company's ownership of the hotels. Any differences are a result of
rounding. The information above has not been audited and is
presented only for comparison purposes.
Pebblebrook Hotel
Trust
Same-Property Statistical Data
- by Market
(Unaudited)
Three months ended March
31,
2023 vs. 2022
Same-Property RevPAR variance: Washington DC
126.6
%
San Francisco
117.5
%
Seattle
71.6
%
Chicago
50.7
%
Portland
34.5
%
San Diego
19.9
%
Los Angeles
14.9
%
Boston
9.8
%
Other
1.4
%
Southern Florida/Georgia
(7.6
%)
Urban
32.8
%
Resorts
(1.1
%)
Notes: The schedule of hotel
results for the three months ended March 31 includes information
from all of the hotels the Company owned as of March 31, 2023,
except for the following:
- Q1 Same-Property Exclusions: 1 Hotel San Francisco,
LaPlaya Beach Resort & Club
"Other" includes Newport, RI and Santa Cruz, CA. These hotel
results for the respective periods may include information
reflecting operational performance prior to the Company's ownership
of the hotels. Any differences are a result of rounding. The
information above has not been audited and is presented only for
comparison purposes.
Pebblebrook Hotel
Trust
Hotel Operational Data
Schedule of Same-Property
Results
($ in thousands)
(Unaudited)
Three months ended March
31,
2023
2022
Same-Property Revenues: Room
$
185,659
$
156,647
Food and beverage
72,504
53,318
Other
31,555
24,131
Total hotel revenues
289,718
234,096
Same-Property Expenses: Room
$
53,441
$
39,878
Food and beverage
55,112
40,909
Other direct
7,569
6,273
General and administrative
26,681
21,322
Information and telecommunication systems
4,978
4,129
Sales and marketing
23,984
17,754
Management fees
8,063
7,404
Property operations and maintenance
12,605
10,779
Energy and utilities
10,496
8,871
Property taxes
15,177
18,356
Other fixed expenses
12,340
11,130
Total hotel expenses
230,446
186,805
Same-Property EBITDA
$
59,272
$
47,291
Same-Property EBITDA Margin
20.5
%
20.2
%
Notes:
The schedule of hotel results for the
three months ended March 31 includes information from all of the
hotels the Company owned as of March 31, 2023, except for the
following:
- Q1 Same-Property Exclusions: 1 Hotel San Francisco,
LaPlaya Beach Resort & Club
These hotel results for the respective
periods may include information reflecting operational performance
prior to the Company's ownership of the hotels. Any differences are
a result of rounding.
The information above has not been audited
and is presented only for comparison purposes.
Pebblebrook Hotel
Trust
Historical Operating
Data
($ in millions except ADR and
RevPAR data)
(Unaudited)
Historical Operating Data:
First Quarter
Second Quarter
Third Quarter
Fourth Quarter
Full Year
2019
2019
2019
2019
2019
Occupancy
75
%
86
%
86
%
77
%
81
%
ADR
$
254
$
274
$
271
$
250
$
263
RevPAR
$
190
$
235
$
233
$
192
$
213
Hotel Revenues
$
325.2
$
402.9
$
396.9
$
343.3
$
1,468.4
Hotel EBITDA
$
86.9
$
143.0
$
135.0
$
93.0
$
457.9
Hotel EBITDA Margin
26.7
%
35.5
%
34.0
%
27.1
%
31.2
%
First Quarter
Second Quarter
Third Quarter
Fourth Quarter
Full Year
2022
2022
2022
2022
2022
Occupancy
48
%
69
%
73
%
59
%
62
%
ADR
$
312
$
326
$
325
$
293
$
315
RevPAR
$
151
$
225
$
236
$
173
$
197
Hotel Revenues
$
258.2
$
391.1
$
407.0
$
313.4
$
1,369.8
Hotel EBITDA
$
59.5
$
136.9
$
130.5
$
60.9
$
387.8
Hotel EBITDA Margin
23.0
%
35.0
%
32.1
%
19.4
%
28.3
%
First Quarter
2023
Occupancy
57
%
ADR
$
300
RevPAR
$
172
Hotel Revenues
$
300.0
Hotel EBITDA
$
58.4
Hotel EBITDA Margin
19.5
%
Notes:
These historical hotel operating results
include information for all of the hotels the Company owned as of
March 31, 2023, as if they were owned as of January 1, 2019. These
historical operating results include periods prior to the Company's
ownership of the hotels. The information above does not reflect the
Company's corporate general and administrative expense, interest
expense, property acquisition costs, depreciation and amortization,
taxes and other expenses.
These hotel results for the respective
periods may include information reflecting operational performance
prior to the Company's ownership of the hotels. Any differences are
a result of rounding.
The information above has not been audited
and is presented only for comparison purposes.
Pebblebrook Hotel Trust 2023 Same-Property
Inclusion Reference Table Hotels Q1
Q2 Q3 Q4 Hotel Monaco Seattle
X
Hotel Vintage Seattle
X
LaPlaya Beach Resort & Club 1 Hotel San Francisco
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 first quarter Same-Property RevPAR, RevPAR Growth,
Total RevPAR, Total RevPAR Growth, ADR, Occupancy, Revenues,
Expenses, EBITDA and EBITDA Margin include all of the hotels the
Company owned as of March 31, 2023, except for the following:- 1
Hotel San Francisco- LaPlaya Beach Resort & Club
The Company's first quarter Same-Property
RevPAR, RevPAR Growth, Total RevPAR, Total RevPAR Growth, ADR,
Occupancy, Revenues, Expenses, EBITDA and EBITDA Margin include all
of the hotels the Company owned as of March 31, 2023, except for
the following: - 1 Hotel San Francisco - LaPlaya Beach Resort &
Club - Hotel Monaco Seattle - Hotel Vintage Seattle
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/20230426005857/en/
Raymond D. Martz, Chief Financial Officer, Pebblebrook Hotel
Trust - (240) 507-1330
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