Chesapeake Lodging Trust (NYSE:CHSP), a lodging real estate
investment trust (REIT), reported today its financial results for
the quarter ended September 30, 2014.
HIGHLIGHTS
- RevPAR: 11.4% increase for the
16-hotel portfolio and 7.3% increase for the 19-hotel portfolio
over the same period in 2013.
- Adjusted Hotel
EBITDA Margin: 160 basis point increase to 37.7%
for the 16-hotel portfolio and 110 basis point increase to 36.0%
for the 19-hotel portfolio over the same period in 2013.
- Adjusted Hotel
EBITDA: $47.2 million.
- Adjusted
Corporate EBITDA: $43.5 million.
- Adjusted
FFO: $32.8 million or $0.65 per diluted common
share.
- Disposition: Sold the 153-room
Courtyard Anaheim at Disneyland Resort for a sale price of $32.5
million.
- Acquisition: Subsequent to quarter
end, acquired the 337-room JW Marriott San Francisco Union Square
for a purchase price of $147.2 million.
- Financing: Refinanced an existing
$60.0 million loan, replacing it with a $90.0 million, 10-year loan
at 4.30%.
- Equity
Offering: Completed a $144.3 million common share
offering.
“We are extremely pleased with our hotel portfolio’s performance
during the third quarter with our 16-hotel portfolio delivering
RevPAR growth of 11.4%, significantly exceeding the U.S. lodging
industry’s RevPAR growth of 9.2%,” said James L. Francis,
Chesapeake Lodging Trust’s President and Chief Executive Officer.
Mr. Francis continued, “We are also excited about our recent
acquisition of the JW Marriott San Francisco Union Square, our
fourth hotel in the very attractive San Francisco market, which we
were able to partially fund with the reinvestment of proceeds from
the sale of the Courtyard Anaheim at Disneyland Resort, a non-core
asset.”
“We are bullish on our prospects heading into 2015 with the
completion of our portfolio repositioning program, which
encompassed the completion of our comprehensive renovations at the
W Chicago - Lakeshore and the Hyatt Herald Square New York, and
soon to be completed renovation and re-branding of the Le Meridien
New Orleans.”
CONSOLIDATED FINANCIAL RESULTS
The following is a summary of the consolidated financial results
for the three and nine months ended September 30, 2014 and
2013 (in millions, except share and per share amounts):
Three months ended Nine
months ended September 30, September 30, 2014(1)
2013(2) 2014(1) 2013(3) Total revenue $
130.8 $ 122.4 $ 354.5 $ 308.6 Net income available to common
shareholders $ 26.3 $ 16.8 $ 44.8 $ 26.5 Net income per diluted
common share $ 0.52 $ 0.35 $ 0.89 $ 0.56 Adjusted Hotel
EBITDA $ 47.2 $ 42.8 $ 116.3 $ 100.5 Adjusted Corporate
EBITDA $ 43.5 $ 39.9 $ 104.8 $ 90.6 AFFO available to common
shareholders $ 32.8 $ 29.1 $ 76.4 $ 62.6 AFFO per diluted common
share $ 0.65 $ 0.61 $ 1.53 $ 1.34
Weighted-average number of diluted common
shares outstanding
50,567,849 47,885,696 49,758,044 46,759,598 ___________ (1)
Includes results of operations of 19 hotels for the full
period and one hotel for part of the period. (2) Includes results
of operations of 20 hotels for the full period. (3) Includes
results of operations of 15 hotels for the full period and five
hotels for part of the period.
HOTEL OPERATING RESULTS
As of September 30, 2014, the Trust owned 19 hotels. Management
assesses the operating performance of its hotels irrespective of
the hotel owner during the periods compared using the following key
operating metrics: occupancy, ADR, RevPAR, Adjusted Hotel EBITDA,
and Adjusted Hotel EBITDA Margin. The Trust uses the term "pro
forma" to refer to metrics that include, or comparisons of metrics
that are based on, the operating results of hotels under previous
ownership for either a portion of or the entire period. Since five
of the 19 hotels owned as of September 30, 2014 were
acquired at various times during 2013, the key operating metrics
reflect the pro forma operating results of five of those hotels for
the nine months ended September 30, 2013.
In addition to assessing the operating performance of its
19-hotel portfolio for the three and nine months ended September
30, 2014, management also assesses the operating performance of a
16-hotel portfolio, which excludes the W Chicago - Lakeshore, the
Hotel New Orleans Downtown (formerly the W New Orleans), and the
Hyatt Herald Square New York (formerly the Holiday Inn New York
City Midtown - 31st Street), as these hotels have undergone or are
undergoing comprehensive renovations during 2014. Included in the
following table are comparisons of the key operating metrics for
the 16-hotel portfolio and the 19-hotel portfolio for
the three and nine months ended September 30,
2014 and 2013 (in thousands, except for ADR and
RevPAR):
Three months ended Nine
months ended September 30, September 30, 2014
2013 Change 2014 2013(1)
Change
16-Hotel
Portfolio(2)
Occupancy 88.8 % 87.2 % 160 bps 85.1 % 82.7 % 240 bps ADR $ 230.18
$ 210.51 9.3% $ 210.65 $ 197.27 6.8% RevPAR $ 204.51 $ 183.58 11.4%
$ 179.27 $ 163.21 9.8% Adjusted Hotel EBITDA $ 42,406 $
36,845 15.1% $ 103,510 $ 88,297 17.2% Adjusted Hotel EBITDA Margin
37.7 % 36.1 % 160 bps 34.1 % 31.8 % 230 bps
19-Hotel
Portfolio
Occupancy 83.8 % 85.2 % (140) bps 81.0 % 81.2 % (20) bps ADR $
226.65 $ 207.65 9.2% $ 208.93 $ 197.29 5.9% RevPAR $ 189.94 $
176.99 7.3% $ 169.31 $ 160.20 5.7% Adjusted Hotel EBITDA $
46,490 $ 42,097 10.4% $ 114,190 $ 103,179 10.7% Adjusted Hotel
EBITDA Margin 36.0 % 34.9 % 110 bps 32.7 % 31.1 % 160 bps
__________ (1) Includes results of operations for certain
hotels prior to their acquisition by the Trust. (2) Excludes the W
Chicago – Lakeshore, the Hotel New Orleans Downtown (formerly the W
New Orleans), and the Hyatt Herald Square New York (formerly the
Holiday Inn New York City Midtown – 31st Street), as these hotels
have undergone or are undergoing comprehensive renovations during
2014.
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.
DISPOSITION
On September 30, 2014, the Trust sold the 153-room Courtyard
Anaheim at Disneyland Resort located in Anaheim,
California for $32.5 million, including sold working capital, which
resulted in a gain on sale of $7.0 million. The Courtyard Anaheim
at Disneyland Resort was one of the Trust’s earliest investments,
acquired in July 2010 for $25.0 million. The $32.5 million sale
price represented a 7.1% trailing twelve month NOI cap rate and
produced a 13.3% unleveraged internal rate of return for the Trust
over its ownership period. In conjunction with the sale of the
Courtyard Anaheim at Disneyland Resort, the Trust executed a 1031
exchange with the acquisition of the JW Marriott San Francisco
Union Square on October 1, 2014.
ACQUISITION
On October 1, 2014, the Trust acquired the 337-room JW Marriott
San Francisco Union Square located in San Francisco, California for
$154.2 million, including an acquired FF&E reserve and working
capital. The Trust assumed the existing management agreement with
Marriott International, Inc., as well as the existing ground lease
covering the property, which expires in January 2083.
MAJOR REPOSITIONINGS
The comprehensive renovation at the 520-room W Chicago –
Lakeshore, which commenced in the third quarter of 2013, was
completed in the second quarter of 2014 with a total expected cost
of approximately $38.0 million.
The comprehensive renovation at the former 410-room W New
Orleans to reposition the hotel commenced in the second quarter of
2014. In July 2014, the Trust and its hotel manager, Starwood
Hotels & Resorts Worldwide, Inc., agreed to remove the W brand
from the hotel for the duration of the renovation and rename it the
Hotel New Orleans Downtown. The Trust continues to expect the
renovation will cost approximately $29.0 million and be completed
in the fourth quarter of 2014, at which time the hotel will be
re-branded as the Le Meridien New Orleans.
The comprehensive renovation at the former 122-room Holiday Inn
New York City Midtown – 31st Street to reposition the hotel as the
Hyatt Herald Square New York, which commenced in the third quarter
of 2014, was completed early in the fourth quarter of 2014 with a
total expected cost of approximately $6.5 million.
FINANCING ACTIVITY
On July 3, 2014, the Trust completed the refinancing of its
$60.0 million term loan secured by the Hyatt Herald Square New York
(formerly the Holiday Inn New York City Midtown – 31st Street) and
the Hyatt Place New York Midtown South. The term loan was
refinanced with a new 10-year, $90.0 million, fixed-rate mortgage
loan secured by the two hotels mentioned previously. The loan
carries a fixed interest rate of 4.30% per annum and requires
interest-only payments for the first two years and principal and
interest payments thereafter based on a 30-year principal
amortization.
CAPITAL MARKETS ACTIVITY
On September 9, 2014, the Trust completed an underwritten public
offering of 4,830,000 common shares, including 630,000 shares sold
pursuant to the underwriters’ exercise of their option to purchase
additional shares. The Trust generated net proceeds of $143.9
million after deducting offering costs.
The Trust has not sold any common shares under its continuous
at-the-market (ATM) program during 2014 and through the date of
this release.
DIVIDENDS
On July 15, 2014, the Trust paid dividends in the amounts of
$0.30 per share to its common shareholders and $0.484375 per share
to its preferred shareholders, both of record as of June 30, 2014.
On September 16, 2014, the Trust declared dividends in the amounts
of $0.30 per share payable to its common shareholders and $0.484375
per share payable to its preferred shareholders, both of record as
of September 30, 2014. Both dividends were paid on October 15,
2014.
2014 OUTLOOK
The Trust is updating its 2014 outlook to incorporate its third
quarter results, recent operating trends and fundamentals, the sale
of the Courtyard Anaheim at Disneyland Resort, the acquisition
of the JW Marriott San Francisco Union Square, and the recent
common share offering. The updated outlook assumes no additional
acquisitions, dispositions, or financing transactions (in millions,
except RevPAR and per share amounts):
Fourth Quarter
2014
Outlook Low High
CONSOLIDATED:
Net income available to common shareholders $ 5.5 $ 7.0 Net
income per diluted common share $ 0.10 $ 0.13 Adjusted
Corporate EBITDA $ 33.8 $ 35.3 AFFO available to common
shareholders $ 23.7 $ 25.2 AFFO per diluted common share $ 0.44 $
0.47 Corporate general and administrative expense $ 3.7 $
3.8 Weighted-average number of diluted common shares
outstanding 54.0 54.0
HOTEL PORTFOLIO:
17-Hotel
Portfolio(1)
RevPAR $ 170.00 $ 173.00 Pro forma RevPAR increase over 2013(2) 6.0
% 8.0 % Adjusted Hotel EBITDA $ 32.2 $ 33.6 Adjusted Hotel EBITDA
Margin 30.8 % 31.6 % Pro forma Adjusted Hotel EBITDA Margin
increase over 2013(2) 50 bps 125 bps
20-Hotel
Portfolio
RevPAR $ 166.00 $ 169.00 Pro forma RevPAR increase over 2013(2) 5.0
% 7.0 % Adjusted Hotel EBITDA $ 37.4 $ 39.1 Adjusted Hotel EBITDA
Margin 30.8 % 31.5 % Pro forma Adjusted Hotel EBITDA Margin
increase over 2013(2) 40 bps 115 bps _____________ (1)
Excludes the W Chicago – Lakeshore, the Hotel New Orleans
Downtown (formerly the W New Orleans), and the Hyatt Herald Square
New York (formerly the Holiday Inn New York City Midtown – 31st
Street), as these hotels have undergone or are undergoing
comprehensive renovations during 2014. (2) The comparable 2013
period includes results of operations for certain hotels prior to
their acquisition by the Trust.
Full Year
2014
Updated Outlook Previous Outlook Low High Low
High
CONSOLIDATED: Net income
available to common shareholders $ 50.0 $ 51.4 $ 40.6 $ 44.5 Net
income per diluted common share $ 0.99 $ 1.02 $ 0.83 $ 0.91
Adjusted Corporate EBITDA $ 138.5 $ 140.1 $ 134.0 $ 138.2
AFFO available to common shareholders $ 100.1 $ 101.5 $ 95.3 $ 99.3
AFFO per diluted common share $ 1.98 $ 2.01 $ 1.95 $ 2.03
Corporate general and administrative expense $ 15.2 $ 15.3 $ 14.8 $
15.3 Weighted-average number of diluted common shares
outstanding 50.6 50.6 49.0 49.0
HOTEL
PORTFOLIO(1):
17-Hotel
Portfolio(2)
RevPAR $ 181.00 $ 182.00 $ 169.00 $ 172.00 Pro forma RevPAR
increase over 2013(3) 9.0 % 9.5 % 6.5 % 8.0 % Adjusted Hotel EBITDA
$ 143.6 $ 145.1 $ 131.9 $ 135.6 Adjusted Hotel EBITDA Margin 32.7 %
32.9 % 33.1 % 33.6 % Pro forma Adjusted Hotel EBITDA Margin
increase over 2013(3) 175 bps 195 bps 140 bps 190 bps
20-Hotel
Portfolio
RevPAR $ 173.00 $ 174.00 $ 163.00 $ 166.00 Pro forma RevPAR
increase over 2013(3) 6.0 % 6.5 % 4.0 % 6.0 % Adjusted Hotel EBITDA
$ 159.6 $ 161.3 $ 148.8 $ 153.5 Adjusted Hotel EBITDA Margin 31.8 %
32.0 % 32.1 % 32.5 % Pro forma Adjusted Hotel EBITDA Margin
increase over 2013(3) 120 bps 140 bps 90 bps 140 bps
___________ (1) Updated outlook excludes the Courtyard
Anaheim at Disneyland Resort, which was sold on September 30, 2014,
and includes the JW Marriott San Francisco Union Square, which was
acquired on October 1, 2014. Previous outlook included the
Courtyard Anaheim at Disneyland Resort and did not include the JW
Marriott San Francisco Union Square. (2) Excludes the W Chicago –
Lakeshore, the Hotel New Orleans Downtown (formerly the W New
Orleans), and the Hyatt Herald Square New York (formerly the
Holiday Inn New York City Midtown – 31st Street), as these hotels
have undergone or are undergoing comprehensive renovations during
2014. (3) The comparable 2013 period includes results of operations
for certain hotels prior to their acquisition by the Trust.
NON-GAAP FINANCIAL MEASURES
The Trust reports the following eight non-GAAP financial
measures that it believes are useful to investors as key measures
of its operating performance: (1) Hotel EBITDA,
(2) Adjusted Hotel EBITDA, (3) Adjusted Hotel EBITDA
Margin, (4) Corporate EBITDA, (5) Adjusted Corporate
EBITDA, (6) FFO, (7) FFO available to common shareholders
and (8) AFFO available to common shareholders. Reconciliations
of these non-GAAP financial measures to the most comparable GAAP
measure are included in the accompanying financial tables.
Hotel EBITDA – Hotel EBITDA is defined as total revenues less
total hotel operating expenses. The Trust believes that Hotel
EBITDA provides investors a useful financial measure to evaluate
the Trust’s hotel operating performance.
Adjusted Hotel EBITDA – The Trust further adjusts Hotel EBITDA
for certain additional recurring and non-recurring items.
Specifically, the Trust adjusts for non-cash amortization of
intangible assets and liabilities, including ground lease assets
and unfavorable contract liabilities, deferred franchise costs, and
deferred key money, all of which are recurring items. The Trust
believes that Adjusted Hotel EBITDA provides investors with another
useful financial measure to evaluate the Trust’s hotel operating
performance.
Adjusted Hotel EBITDA Margin – Adjusted Hotel EBITDA Margin is
defined as Adjusted Hotel EBITDA as a percentage of total revenues.
The Trust believes that Adjusted Hotel EBITDA Margin provides
investors another useful financial measure to evaluate the Trust’s
hotel operating performance.
Corporate EBITDA – Corporate EBITDA is defined as net income
before interest, income taxes, and depreciation and amortization.
The Trust believes that Corporate EBITDA provides investors a
useful financial measure to evaluate the Trust’s operating
performance, excluding the impact of the Trust’s capital structure
(primarily interest expense) and the Trust’s asset base (primarily
depreciation and amortization).
Adjusted Corporate EBITDA – The Trust further adjusts Corporate
EBITDA for certain additional recurring and non-recurring items.
Specifically, the Trust adjusts for hotel acquisition costs and
non-cash amortization of intangible assets and liabilities,
including air rights contracts, ground lease assets and unfavorable
contract liabilities, deferred franchise costs, and deferred key
money, all of which are recurring items, and gains (losses) from
sales of real estate, which is a non-recurring item. The Trust
believes that Adjusted Corporate EBITDA provides investors with
another financial measure of its operating performance that
provides for greater comparability of its core operating results
between periods.
FFO – The Trust calculates FFO in accordance with standards
established by the National Association of Real Estate Investment
Trusts (NAREIT), which defines FFO as net income (calculated in
accordance with GAAP), excluding depreciation and amortization,
impairment charges of depreciable real estate, gains (losses) from
sales of real estate, the cumulative effect of changes in
accounting principles, and adjustments for unconsolidated
partnerships and joint ventures. Historical cost accounting for
real estate assets implicitly assumes that the value of real estate
assets diminishes predictably over time. Since real estate values
instead have historically risen or fallen with market conditions,
most industry investors consider presentations of operating results
for real estate companies that use historical cost accounting to be
insufficient by themselves. By excluding the effect of depreciation
and amortization and gains (losses) from sales of real estate, both
of which are based on historical cost accounting and which may be
of lesser significance in evaluating current performance, the Trust
believes that FFO provides investors a useful financial measure to
evaluate the Trust’s operating performance.
FFO available to common shareholders – The Trust reduces FFO for
preferred share dividends and dividends declared on and earnings
allocated to unvested time-based awards (consistent with
adjustments required by GAAP in reporting net income available to
common shareholders and related per share amounts). FFO available
to common shareholders provides investors another financial measure
to evaluate the Trust’s operating performance after taking into
account the interests of holders of the Trust’s preferred shares
and unvested time-based awards.
AFFO available to common shareholders – The Trust further
adjusts FFO available to common shareholders for certain additional
recurring and non-recurring items that are not in NAREIT’s
definition of FFO. Specifically, the Trust adjusts for hotel
acquisition costs and non-cash amortization of intangible assets
and liabilities, including air rights contracts, ground lease
assets and unfavorable contract liabilities, deferred franchise
costs, and deferred key money, all of which are recurring items.
The Trust believes that AFFO available to common shareholders
provides investors with another financial measure of its operating
performance that provides for greater comparability of its core
operating results between periods.
CONFERENCE CALL
The Trust will host a conference call on Monday, November 3,
2014 at 5:00 p.m. Eastern Time to discuss its financial results.
Interested individuals are invited to listen to the call by dialing
(877) 683-0303 (U.S./Canadian callers) or (706) 643-5037
(International callers). The conference call ID is 15295377. A
simultaneous webcast of the call will be available on the Trust’s
website at www.chesapeakelodgingtrust.com. It is recommended
that participants call or log on 10 minutes ahead of the scheduled
start time to ensure proper connection.
A replay of the conference call will be available two hours
after the live call until midnight on November 10, 2014. To access
the replay, dial (855) 859-2056 (U.S./Canadian callers) or
(404) 537-3406 (International callers). The conference call ID
is 15295377. A webcast replay and transcript of the conference call
will be archived and available on the Trust’s website for 12
months.
ABOUT CHESAPEAKE LODGING TRUST
Chesapeake Lodging Trust is a self-advised lodging real estate
investment trust (REIT) focused on investments primarily in
upper-upscale hotels in major business and convention markets and,
on a selective basis, premium select-service hotels in urban
settings or unique locations in the United States. The Trust owns
20 hotels with an aggregate of 6,116 rooms in eight states and the
District of Columbia. Additional information can be found on the
Trust’s website at www.chesapeakelodgingtrust.com.
Note: This press release contains forward-looking statements
within the meaning of federal securities regulations. These
forward-looking statements are identified by their use of terms and
phrases such as “anticipate,” “believe,” “could,” “estimate,”
“expect,” “intend,” “may,” “should,” “plan,” “predict,” “project,”
“will,” “continue” and other similar terms and phrases, including
references to assumptions and forecasts, such as the Trust’s
expectations regarding the future Hotel EBITDA and Adjusted Hotel
EBITDA of its existing hotels and the Trust’s 2014 outlook, and the
Trust’s expectation of its ability and the cost and timing of
completing various renovations at its existing hotels.
Forward-looking statements are not guarantees of future performance
and involve known and unknown risks, uncertainties and other
factors which may cause the actual results to differ materially
from those anticipated at the time the forward-looking statements
are made. These risks include, but are not limited to: the Trust’s
ability to complete renovations timely and within expected costs;
the Trust’s ability to continue to satisfy complex rules in order
for it to remain a REIT for federal income tax purposes; and other
risks and uncertainties associated with the Trust’s business
described in its filings with the SEC. Although the Trust believes
the expectations reflected in such forward-looking statements are
based upon reasonable assumptions, it can give no assurance that
the expectations will be attained or that any deviation will not be
material. All information in this release is as of November 3,
2014, and the Trust undertakes no obligation to update any
forward-looking statement to conform the statement to actual
results or changes in the Trust’s expectations, except as required
by law.
CHESAPEAKE LODGING
TRUST CONSOLIDATED BALANCE SHEETS (in thousands,
except share data) September 30, 2014
December 31, 2013 (unaudited) ASSETS Property and equipment, net $
1,427,673 $ 1,422,439 Intangible assets, net 37,137 38,781 Cash and
cash equivalents 180,495 28,713 Restricted cash 40,035 34,235
Accounts receivable, net 21,900 13,011 Prepaid expenses and other
assets 52,413 10,478 Deferred financing costs, net 6,531
6,501 Total assets $ 1,766,184 $ 1,554,158
LIABILITIES AND SHAREHOLDERS’ EQUITY Long-term debt $
589,287 $ 531,771 Accounts payable and accrued expenses 51,200
45,982 Other liabilities 32,897 29,848 Total
liabilities 673,384 607,601 Commitments and
contingencies
Preferred shares, $.01 par value;
100,000,000 shares authorized; Series A Cumulative Redeemable
Preferred Shares; 5,000,000 shares issued and outstanding ($127,422
liquidation preference)
50 50
Common shares, $.01 par value; 400,000,000
shares authorized; 54,878,586 shares and 49,574,005 shares issued
and outstanding, respectively
549 496 Additional paid-in capital 1,139,179 991,417 Cumulative
dividends in excess of net income (46,978 ) (45,339 ) Accumulated
other comprehensive loss — (67 ) Total shareholders’ equity
1,092,800 946,557 Total liabilities and shareholders’
equity $ 1,766,184 $ 1,554,158
SUPPLEMENTAL CREDIT INFORMATION: Fixed charge coverage ratio(1)
2.61 2.67 Leverage ratio(1) 33.3 % 33.5 % ______________ (1)
Calculated as defined under the Trust’s revolving credit
facility.
CHESAPEAKE LODGING TRUST
CONSOLIDATED STATEMENTS OF
OPERATIONS
(in thousands, except share and per
share data)
(unaudited)
Three
Months Ended September 30, Nine Months Ended September 30, 2014
2013 2014 2013 REVENUE
Rooms $ 102,473 $ 95,547 $ 271,430 $ 234,037 Food and beverage
22,883 21,955 69,214 62,180 Other 5,484 4,941 13,835
12,397 Total revenue 130,840 122,443
354,479 308,614 EXPENSES Hotel operating
expenses: Rooms 21,985 20,861 61,930 54,047 Food and beverage
17,860 17,558 52,800 47,292 Other direct 2,234 2,333 6,013 6,040
Indirect 42,641 38,780 118,423 100,485
Total hotel operating expenses 84,720 79,532 239,166 207,864
Depreciation and amortization 12,466 12,335 37,488 32,012 Air
rights contract amortization 130 130 390 390 Corporate general and
administrative 3,694 2,936 11,505 9,921 Hotel acquisition costs 60
59 60 4,195 Total operating expenses
101,070 94,992 288,609 254,382
Operating income 29,770 27,451 65,870 54,232 Interest income
8 4 8 247 Interest expense (6,963 ) (7,199 ) (20,477 ) (18,986 )
Gain on sale of hotel 7,006 — 7,006 — Loss on early extinguishment
of debt — (372 ) — (372 ) Income before income
taxes 29,821 19,884 52,407 35,121 Income tax expense (1,133
) (641 ) (292 ) (1,331 ) Net income 28,688 19,243 52,115
33,790 Preferred share dividends (2,422 ) (2,422 ) (7,266 )
(7,266 ) Net income available to common shareholders $ 26,266
$ 16,821 $ 44,849 $ 26,524 Net
income per common share: Basic $ 0.52 $ 0.35 $ 0.90 $ 0.56 Diluted
$ 0.52 $ 0.35 $ 0.89 $ 0.56
Weighted-average number of common shares
outstanding:
Basic 50,141,513 47,885,696 49,364,637 46,759,598 Diluted
50,567,849 47,885,696 49,758,044 46,759,598
CHESAPEAKE LODGING TRUST CONSOLIDATED STATEMENTS OF CASH
FLOWS (in thousands) (unaudited)
Nine Months Ended September 30, 2014
2013 Cash flows from operating activities: Net income
$ 52,115 $ 33,790
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 37,488 32,012 Air rights contract
amortization 390 390 Deferred financing costs amortization 1,950
2,102 Gain on sale of hotel (7,006 ) — Loss on early extinguishment
of debt — 372 Share-based compensation 4,311 3,458 Other 771 (155 )
Changes in assets and liabilities: Accounts receivable, net (8,958
) (9,628 ) Prepaid expenses and other assets 26 (1,194 ) Accounts
payable and accrued expenses 4,629 10,467 Other liabilities (22 )
782 Net cash provided by operating activities 85,694
72,396 Cash flows from investing activities:
Acquisition of hotels, net of cash acquired — (331,058 )
Disposition of hotel, net of cash sold 31,933 — Deposit on hotel
acquisition (42,142 ) — Receipt of deposit on hotel acquisition —
700 Improvements and additions to hotels (67,500 ) (19,510 )
Repayment of hotel construction loan — 7,810 Change in restricted
cash (5,680 ) (8,066 ) Net cash used in investing activities
(83,389 ) (350,124 ) Cash flows from financing activities:
Proceeds from sale of common shares, net of underwriting fees
144,320 169,855 Payment of offering costs related to sale of common
shares (378 ) (406 ) Borrowings under revolving credit facility
85,000 105,000 Repayments under revolving credit facility (50,000 )
(125,000 ) Proceeds from issuance of mortgage debt 90,000 312,500
Principal prepayment on mortgage debt — (130,000 ) Scheduled
principal payments on mortgage debt (67,326 ) (3,321 ) Payment of
deferred financing costs (1,980 ) (3,075 ) Payment of dividends to
common shareholders (42,455 ) (31,899 ) Payment of dividends to
preferred shareholders (7,266 ) (7,266 ) Repurchase of common
shares (438 ) (1,098 ) Net cash provided by financing activities
149,477 285,290 Net increase in cash 151,782 7,562
Cash and cash equivalents, beginning of period 28,713 33,194
Cash and cash equivalents, end of period $ 180,495 $
40,756
CHESAPEAKE LODGING TRUST
RECONCILIATION OF NON-GAAP FINANCIAL
MEASURES
(in thousands, except per share
data)
(unaudited)
The following table calculates Hotel EBITDA, Adjusted
Hotel EBITDA, and Adjusted Hotel EBITDA Margin for the 16-hotel
portfolio and the 19-hotel portfolio for the three and nine months
ended September 30, 2014 and 2013:
Three Months Ended September 30, Nine Months
Ended September 30, 2014 2013 2014
2013(1)
16-Hotel
Portfolio(2)
Total revenue $ 112,624 $ 102,185 $ 303,399 $ 277,645 Less: Total
hotel operating expenses 71,336 65,265 200,855
189,122 Hotel EBITDA 41,288 36,920 102,544 88,523
Add: Non-cash amortization(3) 1,118 (75 ) 966 (226 )
Adjusted Hotel EBITDA $ 42,406 $ 36,845 $ 103,510
$ 88,297 Adjusted Hotel EBITDA Margin 37.7 %
36.1 % 34.1 % 31.8 %
19-Hotel
Portfolio
Total revenue $ 129,038 $ 120,705 $ 349,313 $ 331,758 Less: Total
hotel operating expenses 83,666 78,533 236,089
228,353 Hotel EBITDA 45,372 42,172 113,224 103,405
Add: Non-cash amortization(3) 1,118 (75 ) 966 (226 )
Adjusted Hotel EBITDA $ 46,490 $ 42,097 $ 114,190
$ 103,179 Adjusted Hotel EBITDA Margin 36.0 %
34.9 % 32.7 % 31.1 % _____________ (1) Includes
results of operations for certain hotels prior to their acquisition
by the Trust. (2) Excludes the W Chicago – Lakeshore, the Hotel New
Orleans Downtown (formerly the W New Orleans), and the Hyatt Herald
Square New York (formerly the Holiday Inn New York City Midtown –
31st Street), as these hotels have undergone or are undergoing
comprehensive renovations during 2014. (3) Includes non-cash
amortization of ground lease asset, deferred franchise costs,
deferred key money, and unfavorable contract liability.
The following table calculates Hotel EBITDA and Adjusted
Hotel EBITDA contributed by the Trust’s hotel portfolio for the
three and nine months ended September 30, 2014 and 2013:
Three Months Ended
September 30, Nine Months Ended September 30, 2014
2013 2014 2013 Total revenue $ 130,840
$ 122,443 $ 354,479 $ 308,614 Less: Total hotel operating expenses
84,720 79,532 239,166 207,864 Hotel
EBITDA 46,120 42,911 115,313 100,750 Add: Non-cash
amortization(1) 1,119 (74 ) 970 (222 ) Adjusted Hotel
EBITDA $ 47,239 $ 42,837 $ 116,283 $ 100,528
_____________ (1) Includes non-cash
amortization of ground lease asset, deferred franchise costs,
deferred key money, and unfavorable contract liability.
The following table reconciles net income to Corporate
EBITDA and Adjusted Corporate EBITDA for the three and nine months
ended September 30, 2014 and 2013:
Three Months Ended September 30, Nine Months Ended
September 30, 2014 2013 2014
2013 Net income $ 28,688 $
19,243 $ 52,115 $ 33,790
Add:
Depreciation and amortization
12,466 12,335 37,488 32,012 Interest expense 6,963 7,199 20,477
18,986 Loss on early extinguishment of debt — 372 — 372 Income tax
expense 1,133 641 292 1,331
Less:
Interest income
(8 ) (4 ) (8 ) (247 ) Corporate EBITDA 49,242 39,786 110,364 86,244
Add:
Hotel acquisition costs
60 59 60 4,195 Non-cash amortization(1) 1,248 55 1,359 167
Less:
Gain on sale of hotel
(7,006 ) — (7,006 ) — Adjusted Corporate EBITDA $
43,544 $ 39,900 $ 104,777 $ 90,606
____________
(1)
Includes non-cash amortization of ground
lease asset, deferred franchise costs, deferred key money,
unfavorable contract liability, and air rights contract.
The following table reconciles net income to FFO, FFO
available to common shareholders, and AFFO available to common
shareholders for the three and nine months ended September 30, 2014
and 2013: Three Months
Ended September 30, Nine Months Ended September 30, 2014
2013 2014
2013 Net income $ 28,688 $ 19,243 $ 52,115 $ 33,790
Add:
Depreciation and amortization
12,466 12,335 37,488 32,012
Less:
Gain on sale of hotel
(7,006 ) — (7,006 ) — FFO 34,148 31,578 82,597 65,802
Less:
Preferred share dividends
(2,422 ) (2,422 ) (7,266 ) (7,266 ) Dividends declared on unvested
time-based awards (128 ) (98 ) (385 ) (276 ) Undistributed earnings
allocated to unvested time-based awards (84 ) (33 ) — —
FFO available to common shareholders 31,514 29,025 74,946
58,260
Add:
Hotel acquisition costs
60 59 60 4,195 Non-cash amortization(1) 1,248 55
1,359 167 AFFO available to common shareholders $
32,822 $ 29,139 $ 76,365 $ 62,622
FFO per common share: Basic $ 0.63 $ 0.61 $ 1.52 $ 1.25
Diluted $ 0.62 $ 0.61 $ 1.51 $ 1.25 AFFO per common share:
Basic $ 0.65 $ 0.61 $ 1.55 $ 1.34 Diluted $ 0.65 $ 0.61 $ 1.53 $
1.34 ____________
(1)
Includes non-cash amortization of ground
lease asset, deferred franchise costs, deferred key money,
unfavorable contract liability, and air rights contract.
The following table calculates forecasted Hotel
EBITDA and Adjusted Hotel EBITDA for the 17-hotel portfolio and the
20-hotel portfolio for the three months ending December 31, 2014:
Three Months Ending December 31, 2014 17-Hotel
Portfolio(1) 20-Hotel Portfolio Low
High Low High Total revenue $
104,350 $ 106,470 $ 121,600 $ 124,100 Less: Total hotel operating
expenses 72,120 72,790 84,120 84,920
Hotel EBITDA 32,230 33,680 37,480 39,180 Less: Non-cash
amortization(2) (80 ) (80 ) (80 ) (80 ) Adjusted Hotel EBITDA $
32,150 $ 33,600 $ 37,400 $ 39,100
_____________ (1) Excludes the W Chicago – Lakeshore, the
Hotel New Orleans Downtown (formerly the W New Orleans), and the
Hyatt Herald Square New York (formerly the Holiday Inn New York
City Midtown – 31st Street), as these hotels have undergone or are
undergoing comprehensive renovations during 2014. (2) Includes
non-cash amortization of ground lease asset, deferred franchise
costs, deferred key money, and unfavorable contract liability.
The following table reconciles forecasted net income to
Corporate EBITDA and Adjusted Corporate EBITDA for the three months
ending December 31, 2014: Three Months Ending
December 31, 2014 Low High Net income $ 8,040
$ 9,490
Add:
Depreciation and amortization
14,340 14,340 Interest expense 6,880 6,880
Income tax expense
610 710
Less:
Interest income
— — Corporate EBITDA 29,870 31,420
Add:
Hotel acquisition costs
3,830 3,830 Non-cash amortization(1) 50 50 Adjusted
Corporate EBITDA $ 33,750 $ 35,300 _____________ (1)
Includes non-cash amortization of ground lease asset, deferred
franchise costs, deferred key money, unfavorable contract
liability, and air rights contract. The following table
reconciles forecasted net income to FFO, FFO available to common
shareholders, and AFFO available to common shareholders for the
three months ending December 31, 2014: Three
Months Ending December 31, 2014 Low High Net
income $ 8,040 $ 9,490
Add:
Depreciation and amortization
14,340 14,340 FFO 22,380 23,830
Less:
Preferred share dividends
(2,420 ) (2,420 ) Dividends declared on unvested time-based awards
(120 ) (120 ) Undistributed earnings allocated to unvested
time-based awards — — FFO available to common
shareholders 19,840 21,290
Add:
Hotel acquisition costs
3,830 3,830
Non-cash amortization(1)
50 50 AFFO available to common shareholders $ 23,720
$ 25,170 FFO per common share: Basic $ 0.37 $
0.40 Diluted $ 0.37 $ 0.39 AFFO per common share: Basic $
0.44 $ 0.47 Diluted $ 0.44 $ 0.47 Weighted-average number of
common shares outstanding: Basic 53,825 53,825 Diluted 54,000
54,000 _____________ (1) Includes non-cash amortization of
ground lease asset, deferred franchise costs, deferred key money,
unfavorable contract liability, and air rights contract. The
following table calculates forecasted Hotel EBITDA and Adjusted
Hotel EBITDA for the 17-hotel portfolio and the 20-hotel portfolio
for the year ending December 31, 2014: Year
Ending December 31, 2014 17-Hotel Portfolio(1)
20-Hotel Portfolio Low High Low
High Total revenue $ 439,000 $ 441,100 $ 502,100 $ 504,700
Less:
Total hotel operating expenses
296,260 296,910 343,430 344,330 Hotel EBITDA
142,740 144,190 158,670 160,370
Add:
Non-cash amortization(2)
890 890 890 890 Adjusted Hotel EBITDA $
143,630 $ 145,080 $ 159,560 $ 161,260
_____________ (1) Excludes the W Chicago – Lakeshore, the
Hotel New Orleans Downtown (formerly the W New Orleans), and the
Hyatt Herald Square New York (formerly the Holiday Inn New York
City Midtown – 31st Street), as these hotels have undergone or are
undergoing comprehensive renovations during 2014. (2) Includes
non-cash amortization of ground lease asset, deferred franchise
costs, deferred key money, and unfavorable contract liability.
The following table reconciles forecasted net income to
Corporate EBITDA and Adjusted Corporate EBITDA for the year ending
December 31, 2014: Year Ending December 31,
2014 Low High Net income $ 60,160 $ 61,610
Add:
Depreciation and amortization
51,830 51,830 Interest expense 27,360 27,360 Income tax expense 900
1,000
Less:
Interest income
(10 ) (10 ) Corporate EBITDA 140,240 141,790
Add:
Hotel acquisition costs
3,890 3,890 Non-cash amortization(1) 1,410 1,410
Less:
Gain on sale of hotel
(7,010 ) (7,010 ) Adjusted Corporate EBITDA $ 138,530 $
140,080 ____________ (1) Includes non-cash
amortization of ground lease asset, deferred franchise costs,
deferred key money, unfavorable contract liability, and air rights
contract. The following table reconciles forecasted net
income to FFO, FFO available to common shareholders, and AFFO
available to common shareholders for the year ending December 31,
2014: Year Ending December 31, 2014 Low
High Net income $ 60,160 $ 61,610
Add:
Depreciation and amortization
51,830 51,830
Less:
Gain on sale of hotel
(7,010 ) (7,010 ) FFO 104,980 106,430
Less:
Preferred share dividends
(9,690 ) (9,690 ) Dividends declared on unvested time-based awards
(500 ) (500 ) Undistributed earnings allocated to unvested
time-based awards — — FFO available to common
shareholders 94,790 96,240
Add:
Hotel acquisition costs
3,890 3,890 Non-cash amortization(1) 1,410 1,410 AFFO
available to common shareholders $ 100,090 $ 101,540
FFO per common share: Basic $ 1.88 $ 1.91 Diluted $ 1.87 $
1.90 AFFO per common share: Basic $ 1.98 $ 2.01 Diluted $
1.98 $ 2.01 Weighted-average number of common shares
outstanding: Basic 50,490 50,490 Diluted 50,620 50,620 ____________
(1) Includes non-cash amortization of ground lease asset,
deferred franchise costs, deferred key money, unfavorable contract
liability, and air rights contract.
CHESAPEAKE LODGING
TRUST CURRENT HOTEL PORTFOLIO Hotel
Location Rooms Acquisition Date 1 Hyatt Regency Boston
Boston, MA 502 March 18, 2010 2 Hilton Checkers Los Angeles Los
Angeles, CA 193 June 1, 2010 3 Boston Marriott Newton Newton, MA
430 July 30, 2010 4 Le Meridien San Francisco San Francisco, CA 360
December 15, 2010 5 Homewood Suites Seattle Convention Center
Seattle, WA 195 May 2, 2011 6 W Chicago – City Center Chicago, IL
403 May 10, 2011 7 Hotel Indigo San Diego Gaslamp Quarter San
Diego, CA 210 June 17, 2011 8 Courtyard Washington Capitol
Hill/Navy Yard Washington, DC 204 June 30, 2011 9 Hotel Adagio San
Francisco, Autograph Collection San Francisco, CA 171 July 8, 2011
10 Denver Marriott City Center Denver, CO 613 October 3, 2011 11
Hyatt Herald Square New York (formerly the Holiday Inn New York
City Midtown – 31st Street) New York, NY 122 December 22, 2011 12 W
Chicago – Lakeshore Chicago, IL 520 August 21, 2012 13 Hyatt
Regency Mission Bay Spa and Marina San Diego, CA 429 September 7,
2012 14 The Hotel Minneapolis, Autograph Collection Minneapolis, MN
222 October 30, 2012 15 Hyatt Place New York Midtown South New
York, NY 185 March 14, 2013 16 W New Orleans – French Quarter New
Orleans, LA 97 March 28, 2013 17 Hotel New Orleans Downtown
(formerly the W New Orleans) New Orleans, LA
410
April 25, 2013 18 Hyatt Fisherman’s Wharf San Francisco, CA 313 May
31, 2013 19 Hyatt Santa Barbara Santa Barbara, CA 200 June 27, 2013
20 JW Marriott San Francisco Union Square San Francisco, CA 337
October 1, 2014 6,116
Chesapeake Lodging TrustDouglas W. Vicari, 410-972-4142
Chesapeake Lodging (NYSE:CHSP)
Historical Stock Chart
From Apr 2024 to May 2024
Chesapeake Lodging (NYSE:CHSP)
Historical Stock Chart
From May 2023 to May 2024