Chesapeake Lodging Trust Results

Chesapeake Lodging Trust Reports Fourth Quarter 2016 Results

RevPAR: 0.6% decrease for the hotel portfolio over the same period in 2015. Adjusted Hotel EBITDA Margin: 230 basis point decrease to 30.4% for the hotel portfolio over the same period in 2015.

Chesapeake Lodging Trust

Chesapeake Lodging Trust (NYSE:CHSP), a lodging real estate investment trust (REIT), reported today its financial results for the quarter ended December 31, 2016.

HIGHLIGHTS

  • RevPAR: 0.6% decrease for the hotel portfolio over the same period in 2015.
  • Adjusted Hotel EBITDA Margin: 230 basis point decrease to 30.4% for the hotel portfolio over the same period in 2015.
  • Adjusted Hotel EBITDA: $44.1 million.
  • Adjusted Corporate EBITDA: $39.0 million.
  • Net income available to common shareholders: $9.7 million or $0.16 per diluted common share.
  • Adjusted FFO: $28.4 million or $0.48 per diluted common share.

CONSOLIDATED FINANCIAL RESULTS

The following is a summary of the consolidated financial results for the three months and year ended December 31, 2016 and 2015 (in millions, except share and per share amounts):

                       
Three Months Ended December 31, Year Ended December 31,
2016 2015 2016 2015
Total revenue $ 145.1 $ 146.2 $ 619.7 $ 582.6
 
Net income available to common shareholders $ 9.7 $ 12.3 $ 67.0 $ 57.8
Net income per diluted common share $ 0.16 $ 0.21 $ 1.13 $ 0.99
 
Adjusted Hotel EBITDA $ 44.1 $ 47.8 $ 203.7 $ 190.6
 
Adjusted Corporate EBITDA $ 39.0 $ 42.8 $ 184.5 $ 172.5
 
AFFO available to common shareholders $ 28.4 $ 30.7 $ 140.4 $ 127.8
AFFO per diluted common share $ 0.48 $ 0.52 $ 2.39 $ 2.21
 
Weighted-average number of diluted common shares outstanding 58,737,275 59,027,852 58,717,647 57,926,399
 

HOTEL OPERATING RESULTS

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. As of December 31, 2016, the Trust owned 22 hotels. Since two of its hotels owned as of December 31, 2016 were acquired during 2015, the key operating metrics below reflect the pro forma operating results for those hotels for the year ended December 31, 2015.

Included in the following table are comparisons of the key operating metrics for the hotel portfolio for the three months and year ended December 31, 2016 and 2015 (in thousands, except for ADR and RevPAR):

                                   
Three Months Ended December 31, Year Ended December 31,
2016 2015 Change 2016

2015(1)

Change
Occupancy 79.8 % 79.0 % 80 bps 83.9 % 81.3 % 260 bps
ADR $ 218.68 $ 222.41 (1.7)% $ 226.68 $ 228.70 (0.9)%
RevPAR $ 174.56 $ 175.68 (0.6)% $ 190.12 $ 185.88 2.3%
 
Adjusted Hotel EBITDA $ 44,050 $ 47,763 (7.8)% $ 203,681 $ 197,393 3.2%
Adjusted Hotel EBITDA Margin 30.4 % 32.7 % (230) bps 32.9 % 32.7 % 20 bps
 

__________

(1) Includes results of operations for certain hotels prior to their acquisition by the Trust.

Hotel EBITDA, Adjusted Hotel EBITDA, Adjusted Hotel EBITDA Margin, Corporate EBITDA, Adjusted Corporate EBITDA, FFO, FFO available to common shareholders and AFFO available to common shareholders are non-GAAP financial measures within the meaning of the rules of the Securities and Exchange Commission. See the discussion included in this press release for information regarding these non-GAAP financial measures.

CAPITAL MARKETS ACTIVITY

The Trust has not sold any common shares under its continuous at-the-market (ATM) program or repurchased any common shares under its share repurchase program during 2016 and through February 22, 2017.

DIVIDENDS

On October 14, 2016, the Trust paid dividends in the amounts of $0.40 per share to its common shareholders and $0.484375 per share to its preferred shareholders, both of record as of September 30, 2016. On December 15, 2016, the Trust declared dividends in the amounts of $0.40 per share payable to its common shareholders and $0.484375 per share payable to its preferred shareholders, both of record as of December 30, 2016. Both dividends were paid on January 13, 2017.

2017 OUTLOOK

The Trust's 2017 outlook is as follows (in millions, except RevPAR and per share amounts):

                       
First Quarter Full Year
2017 Outlook 2017 Outlook
Low High Low High
CONSOLIDATED:
 
Net income available to common shareholders $ 1.3 $ 3.1 $ 42.9 $ 48.9
Net income per diluted common share $ 0.02 $ 0.05 $ 0.73 $ 0.83
 
Adjusted Corporate EBITDA $ 27.3 $ 28.9 $ 169.3 $ 176.3
 
AFFO available to common shareholders $ 20.7 $ 22.5 $ 124.2 $ 130.2
AFFO per diluted common share $ 0.35 $ 0.38 $ 2.10 $ 2.20
 
Corporate cash general and administrative expense $ 2.9 $ 3.1 $ 10.3 $ 11.3
Corporate non-cash general and administrative expense $ 2.1 $ 2.1 $ 7.5 $ 7.5
 
Weighted-average number of diluted common shares outstanding 59.0 59.0 59.1 59.1
 
HOTEL PORTFOLIO:
 

22-Hotel Portfolio

RevPAR $ 159.00 $ 163.00 $ 183.00 $ 187.00
RevPAR change as compared to 2016 (6.5 )% (4.5 )% (3.5 )% (1.5 )%
Adjusted Hotel EBITDA $ 32.3 $ 34.0 $ 187.0 $ 195.0
Adjusted Hotel EBITDA Margin 24.7 % 25.5 % 31.2 % 31.9 %
Adjusted Hotel EBITDA Margin change as compared to 2016 (375) bps (300) bps (170) bps (100) bps
 

15-Hotel Portfolio(1)

RevPAR $ 154.00 $ 157.00 $ 185.00 $ 189.00
RevPAR change as compared to 2016 (4.0 )% (2.0 )% (1.0 )% 1.0 %
Adjusted Hotel EBITDA $ 19.4 $ 20.4 $ 121.4 $ 126.6
Adjusted Hotel EBITDA Margin 26.4 % 27.2 % 34.3 % 35.0 %
Adjusted Hotel EBITDA Margin change as compared to 2016 (325) bps (250) bps (115) bps (40) bps
 

__________

(1) Excludes the following seven hotels located in San Francisco and/or undergoing significant guestroom renovations during 2017: Le Meridien San Francisco, JW Marriott San Francisco Union Square, Hyatt Centric Fisherman’s Wharf, Hotel Adagio San Francisco, Autograph Collection, Boston Marriott Newton, Denver Marriott City Center, and Hyatt Regency Mission Bay Spa and Marina.

“Although we are cautiously optimistic for the U.S. lodging industry given the current pro-growth political agenda and the potential for it to lead to a reacceleration in lodging demand growth, we expect 2017 to be a challenging year for our hotel portfolio as a result of actions we are taking to invest in our hotel portfolio for the longer-term along with market specific factors that are expected to negatively impact certain of our hotels,” said James L. Francis, Chesapeake Lodging Trust’s President and Chief Executive Officer. “We are investing in and undergoing guestroom renovations at four of our hotels that we expect will position them for outperformance in the future, however, in the short-term, we expect operational displacement as work is performed. Furthermore, our hotel portfolio is expected to be negatively impacted in 2017 as a result of the planned temporary closure and expansion of the Moscone Center in San Francisco, where we have our largest concentration of portfolio rooms and EBITDA. We are excited for the expansion of the Moscone Center as it will allow the city to attract larger city wide events and groups in the future, however, with the near-term closure we expect lodging demand in the city to be negatively impacted, particularly from April 2017 to September 2017. Despite the revenue pressures we expect to face as we proceed through 2017, we and our hotel operators are intensely focused on cost containment and reduction measures to minimize the impact to the extent possible.”

The Trust’s 2017 outlook assumes, among other things, balanced U.S. lodging fundamentals with moderate supply growth offset by moderate demand growth resulting from a continuation of U.S. economic growth and trends, including moderate growth in GDP, low levels of unemployment, and stable levels of consumer confidence and corporate profits. The Trust’s 2017 outlook assumes no acquisitions, dispositions, or financing transactions beyond the refinance of the Royal Palm South Beach Miami term loan, which matures on March 9, 2017.

NON-GAAP FINANCIAL MEASURES

The Trust reports the following eight non-GAAP financial measures that it believes are useful to investors as key measures of its operating performance: (1) Hotel EBITDA, (2) Adjusted Hotel EBITDA, (3) Adjusted Hotel EBITDA Margin, (4) Corporate EBITDA, (5) Adjusted Corporate EBITDA, (6) FFO, (7) FFO available to common shareholders and (8) AFFO available to common shareholders. Reconciliations of these non-GAAP financial measures to the most comparable GAAP measure are included in the accompanying financial tables.

Hotel EBITDA – Hotel EBITDA is defined as net income before interest, income taxes, depreciation and amortization, air rights amortization, corporate general and administrative, and hotel acquisition costs. The Trust believes that Hotel EBITDA provides investors a useful financial measure to evaluate the Trust’s hotel operating performance, excluding the impact of the Trust’s capital structure (primarily interest), the Trust’s asset base (primarily depreciation and amortization), and the Trust’s corporate-level expenses (corporate general and administrative and hotel acquisition costs).

Adjusted Hotel EBITDA – The Trust further adjusts Hotel EBITDA for certain additional recurring and non-recurring items. Specifically, the Trust adjusts for non-cash amortization of intangible assets and liabilities, including ground lease assets and unfavorable contract liabilities, deferred franchise costs, and deferred key money, all of which are recurring items, and gain (losses) from sales of real estate, which is a non-recurring item. The Trust believes that Adjusted Hotel EBITDA provides investors with another useful financial measure to evaluate the Trust’s hotel operating performance, excluding the effect of these non-cash items.

Adjusted Hotel EBITDA Margin – Adjusted Hotel EBITDA Margin is defined as Adjusted Hotel EBITDA as a percentage of total revenues. The Trust believes that Adjusted Hotel EBITDA Margin provides investors another useful financial measure to evaluate the Trust’s hotel operating performance.

Corporate EBITDA – Corporate EBITDA is defined as net income before interest, income taxes, and depreciation and amortization. The Trust believes that Corporate EBITDA provides investors a useful financial measure to evaluate the Trust’s operating performance, excluding the impact of the Trust’s capital structure (primarily interest expense) and the Trust’s asset base (primarily depreciation and amortization).

Adjusted Corporate EBITDA – The Trust further adjusts Corporate EBITDA for certain additional recurring and non-recurring items. Specifically, the Trust adjusts for hotel acquisition costs and non-cash amortization of intangible assets and liabilities, including air rights contracts, ground lease assets and unfavorable contract liabilities, deferred franchise costs, and deferred key money, all of which are recurring items, and gains (losses) from sales of real estate, which is a non-recurring item. The Trust believes that Adjusted Corporate EBITDA provides investors with another financial measure of its operating performance that provides for greater comparability of its core operating results between periods.

FFO – The Trust calculates FFO in accordance with standards established by the National Association of Real Estate Investment Trusts (NAREIT), which defines FFO as net income (calculated in accordance with GAAP), excluding depreciation and amortization, impairment charges of depreciable real estate, gains (losses) from sales of real estate, the cumulative effect of changes in accounting principles, and adjustments for unconsolidated partnerships and joint ventures. Historical cost accounting for real estate assets implicitly assumes that the value of real estate assets diminishes predictably over time. Since real estate values instead have historically risen or fallen with market conditions, most industry investors consider presentations of operating results for real estate companies that use historical cost accounting to be insufficient by themselves. By excluding the effect of depreciation and amortization and gains (losses) from sales of real estate, both of which are based on historical cost accounting and which may be of lesser significance in evaluating current performance, the Trust believes that FFO provides investors a useful financial measure to evaluate the Trust’s operating performance.

FFO available to common shareholders – The Trust reduces FFO for preferred share dividends 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.

ABOUT CHESAPEAKE LODGING TRUST

Chesapeake Lodging Trust is a self-advised lodging real estate investment trust (REIT) focused on investments primarily in upper-upscale hotels in major business and convention markets and, on a selective basis, premium select-service hotels in urban settings or unique locations in the United States. The Trust owns 22 hotels with an aggregate of 6,694 rooms in nine states and the District of Columbia.

 

CHESAPEAKE LODGING TRUST

CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)

 
 
      December 31,
2016       2015
 
ASSETS
Property and equipment, net $ 1,882,869 $ 1,926,944
Intangible assets, net 35,835 36,414
Cash and cash equivalents 43,060 50,544
Restricted cash 36,128 40,361
Accounts receivable, net 19,966 15,603
Prepaid expenses and other assets  

17,516

    17,900  
Total assets $

2,035,374

  $ 2,087,766  
 
LIABILITIES AND SHAREHOLDERS’ EQUITY
Long-term debt $ 737,310 $ 769,748
Accounts payable and accrued expenses

64,581

62,683
Other liabilities   44,808     45,778  
Total liabilities  

846,699

    878,209  
 
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;

59,671,964 shares and 59,659,522 shares issued and outstanding, respectively

597 597
Additional paid-in capital 1,304,364 1,297,877
Cumulative dividends in excess of net income (116,297 ) (88,675 )
Accumulated other comprehensive loss   (39 )   (292 )
Total shareholders’ equity   1,188,675     1,209,557  
Total liabilities and shareholders’ equity $

2,035,374

  $ 2,087,766  
 
 
SUPPLEMENTAL CREDIT INFORMATION:
Fixed charge coverage ratio(1) 3.24 3.04
Leverage ratio(1) 31.9 % 32.6 %
 

______________

(1) Calculated as defined under the Trust’s revolving credit facility.

                       

CHESAPEAKE LODGING TRUST

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except share and per share data)

 
 
Three Months Ended December 31, Year Ended December 31,
2016 2015 2016 2015
(unaudited)
REVENUE
Rooms $ 107,505 $ 108,193 $ 465,796 $ 441,141
Food and beverage 30,135 31,139 125,987 117,171
Other   7,488     6,848     27,916     24,312  
Total revenue   145,128     146,180     619,699     582,624  
 
EXPENSES
Hotel operating expenses:
Rooms 26,383 25,175 108,292 100,245
Food and beverage 22,662 22,895 92,075 87,625
Other direct 1,438 1,809 6,275 7,109
Indirect   50,440     48,383     208,756     196,523  
Total hotel operating expenses 100,923 98,262 415,398 391,502
Depreciation and amortization 18,864 18,581 74,661 69,743
Air rights contract amortization 130 130 520 520
Corporate general and administrative 5,093 4,952 19,167 18,046
Hotel acquisition costs               854  
Total operating expenses   125,010     121,925     509,746     480,665  
 
Operating income 20,118 24,255 109,953 101,959
 
Interest expense (7,954 ) (8,222 ) (31,846 ) (31,856 )
Gain on sale of hotel           598      
 
Income before income taxes 12,164 16,033 78,705 70,103
 
Income tax expense   (17 )   (1,302 )   (1,999 )   (2,595 )
 
Net income 12,147 14,731 76,706 67,508
 
Preferred share dividends   (2,422 )   (2,422 )   (9,688 )   (9,688 )
Net income available to common shareholders $ 9,725   $ 12,309   $ 67,018   $ 57,820  
 
Net income per common share:
Basic $ 0.16 $ 0.21 $ 1.13 $ 1.00
Diluted $ 0.16 $ 0.21 $ 1.13 $ 0.99
 

Weighted-average number of common shares

outstanding:

Basic 58,737,275 58,561,323 58,717,647 57,474,256
Diluted 58,737,275 59,027,852 58,717,647 57,926,399
 
 

CHESAPEAKE LODGING TRUST

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

 
 
      Year Ended December 31,
2016       2015
 
Cash flows from operating activities:
Net income $ 76,706 $ 67,508

Adjustments to reconcile net income to net cash provided by

operating activities:

Depreciation and amortization 74,661 69,743
Air rights contract amortization 520 520
Deferred financing costs amortization 1,850 1,882
Gain on sale of hotel (598 )
Share-based compensation 9,507 7,644
Other (796 ) (781 )
Changes in assets and liabilities:
Accounts receivable, net (4,363 ) (679 )
Prepaid expenses and other assets

329

(4,154 )
Accounts payable and accrued expenses

1,801

4,069
Other liabilities   (47 )   5,961  
Net cash provided by operating activities   159,570     151,713  
 
Cash flows from investing activities:
Acquisition of hotels, net of cash acquired (255,249 )
Disposition of hotel, net of cash sold 2,028
Improvements and additions to hotels (32,015 ) (36,782 )
Change in restricted cash   4,233     3,026  
Net cash used in investing activities   (25,754 )   (289,005 )
 
Cash flows from financing activities:
Proceeds from sale of common shares, net of underwriting fees 153,962
Payment of offering costs related to sale of common shares (284 )
Borrowings under revolving credit facility 185,000 330,000
Repayments under revolving credit facility (235,000 ) (220,000 )
Proceeds from issuance of mortgage debt 150,000
Principal prepayments on mortgage debt (122,220 )
Scheduled principal payments on mortgage debt (10,940 ) (10,271 )
Payment of deferred financing costs (952 ) (2,311 )
Payment of dividends to common shareholders (94,480 ) (81,111 )
Payment of dividends to preferred shareholders (9,688 ) (9,688 )
Repurchase of common shares   (3,020 )   (1,787 )
Net cash provided by (used in) financing activities   (141,300 )   158,510  
Net increase (decrease) in cash (7,484 ) 21,218
Cash and cash equivalents, beginning of period   50,544     29,326  
Cash and cash equivalents, end of period $ 43,060   $ 50,544  
 
 

CHESAPEAKE LODGING TRUST

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

(in thousands, except share and per share data)

(unaudited)

 
 

The following table reconciles net income to Hotel EBITDA, Adjusted Hotel EBITDA, pro forma Adjusted Hotel EBITDA, and pro forma Adjusted Hotel EBITDA Margin for the three months and year ended December 31, 2016 and 2015:

                       
Three Months Ended December 31, Year Ended December 31,
2016 2015 2016 2015
Net income $ 12,147 $ 14,731 $ 76,706 $ 67,508

Add:

Interest expense

7,954 8,222 31,846 31,856
Income tax expense 17 1,302 1,999 2,595
Depreciation and amortization 18,864 18,581 74,661 69,743
Air rights contract amortization 130 130 520 520
Corporate general and administrative 5,093 4,952 19,167 18,046
Hotel acquisition costs               854  
Hotel EBITDA 44,205 47,918 204,899 191,122
 

Less:

Non-cash amortization(1)

(155 ) (155 ) (620 ) (571 )
Gain on sale of hotel           (598 )    
Adjusted Hotel EBITDA 44,050 47,763 203,681 190,551
 

Add:

Prior owner Hotel EBITDA(2)

              6,842  
Pro forma Adjusted Hotel EBITDA $ 44,050   $ 47,763   $ 203,681   $ 197,393  
 
Total revenue $ 145,128 $ 146,180 $ 619,699 $ 582,624

Add:

Prior owner total revenue(2)

              20,286  
Pro forma total revenue $ 145,128   $ 146,180   $ 619,699   $ 602,910  
 
Pro forma Adjusted Hotel EBITDA Margin 30.4 % 32.7 % 32.9 % 32.7 %
 

_____________

(1) Reflects non-cash amortization of ground lease asset, deferred franchise costs, deferred key money, and unfavorable contract liability.

(2) Reflects results of operations for certain hotels prior to our acquisition.

The following table reconciles net income to Corporate EBITDA and Adjusted Corporate EBITDA for the three months and year ended December 31, 2016 and 2015:

                       
Three Months Ended December 31, Year Ended December 31,
2016 2015 2016 2015
Net income $ 12,147 $ 14,731 $ 76,706 $ 67,508

Add:

Interest expense

7,954 8,222 31,846 31,856
Income tax expense 17 1,302 1,999 2,595
Depreciation and amortization   18,864     18,581     74,661     69,743  
Corporate EBITDA 38,982 42,836 185,212 171,702
 

Add:

Hotel acquisition costs

854

Less:

Non-cash amortization(1)

(25 ) (25 ) (101 ) (51 )
Gain on sale of hotel           (598 )    
Adjusted Corporate EBITDA $ 38,957   $ 42,811   $ 184,513   $ 172,505  
 

____________

(1) Reflects non-cash amortization of ground lease asset, deferred franchise costs, deferred key money, unfavorable contract liability, and air rights contract.

The following table reconciles net income to FFO, FFO available to common shareholders, and AFFO available to common shareholders for the three months and year ended December 31, 2016 and 2015:

                       
Three Months Ended December 31, Year Ended December 31,
2016 2015 2016 2015
Net income $ 12,147 $ 14,731 $ 76,706 $ 67,508

Add:

Depreciation and amortization

18,864 18,581 74,661 69,743

Less:

Gain on sale of hotel

          (598 )    
FFO 31,011 33,312 150,769 137,251
 

Less:

Preferred share dividends

(2,422 ) (2,422 ) (9,688 ) (9,688 )
Dividends declared on unvested time-based awards (126 ) (134 ) (561 ) (560 )
Undistributed earnings allocated to unvested time-based awards                
FFO available to common shareholders 28,463 30,756 140,520 127,003
 

Add:

Hotel acquisition costs

854

Less:

Non-cash amortization(1)

  (25 )   (25 )   (101 )   (51 )
AFFO available to common shareholders $ 28,438   $ 30,731   $ 140,419   $ 127,806  
 
FFO per common share:
Basic $ 0.48 $ 0.53 $ 2.39 $ 2.21
Diluted $ 0.48 $ 0.52 $ 2.39 $ 2.19
 
AFFO per common share:
Basic $ 0.48 $ 0.52 $ 2.39 $ 2.22
Diluted $ 0.48 $ 0.52 $ 2.39 $ 2.21
 

____________

(1) Reflects non-cash amortization of ground lease asset, deferred franchise costs, deferred key money, unfavorable contract liability, and air rights contract.

The following table reconciles forecasted net income to Hotel EBITDA, Adjusted Hotel EBITDA, and Adjusted Hotel EBITDA Margin for the 22-hotel portfolio for the three months ending March 31, 2017 and year ending December 31, 2017:

                       

Three Months Ending

March 31, 2017

Year Ending

December 31, 2017

Low High Low High
Net income $ 3,850 $ 5,600 $ 53,100 $ 59,100

Add:

Interest expense

7,940 7,940 32,900 32,900
Income tax expense (benefit) (3,900 ) (4,100 ) 2,000 3,000
Depreciation and amortization 19,440 19,440 81,350 81,350
Air rights contract amortization 130 130 520 520
Corporate general and administrative   4,950     5,150     17,750     18,750  
Hotel EBITDA 32,410 34,160 187,620 195,620
 

Less:

Non-cash amortization(1)

  (160 )   (160 )   (620 )   (620 )
Adjusted Hotel EBITDA $ 32,250   $ 34,000   $ 187,000   $ 195,000  
 
Total revenue $ 130,400 $ 133,400 $ 600,000 $ 612,000
 
Adjusted Hotel EBITDA Margin 24.7 % 25.5 % 31.2 % 31.9 %
 

_____________

(1) Reflects non-cash amortization of ground lease asset, deferred franchise costs, deferred key money, and unfavorable contract liability.

The following table reconciles forecasted net income to Corporate EBITDA and Adjusted Corporate EBITDA for the three months ending March 31, 2017 and year ending December 31, 2017:

                       

Three Months Ending

March 31, 2017

Year Ending

December 31, 2017

Low High Low High
Net income $ 3,850 $ 5,600 $ 53,100 $ 59,100

Add:

Interest expense

7,940 7,940 32,900 32,900
Income tax expense (benefit) (3,900 ) (4,100 ) 2,000 3,000
Depreciation and amortization   19,440     19,440     81,350     81,350  
Corporate EBITDA 27,330 28,880 169,350 176,350
 

Less:

Non-cash amortization(1)

  (30 )   (30 )   (100 )   (100 )
Adjusted Corporate EBITDA $ 27,300   $ 28,850   $ 169,250   $ 176,250  
 

____________

(1) Reflects non-cash amortization of ground lease asset, deferred franchise costs, deferred key money, unfavorable contract liability, and air rights contract.

The following table reconciles forecasted net income to FFO, FFO available to common shareholders, and AFFO available to common shareholders for the three months ending March 31, 2017 and year ending December 31, 2017:

                       

Three Months Ending

March 31, 2017

Year Ending

December 31, 2017

Low High Low High
Net income $ 3,850 $ 5,600 $ 53,100 $ 59,100

Add:

Depreciation and amortization

  19,440     19,440     81,350     81,350  
FFO 23,290 25,040 134,450 140,450
 

Less:

Preferred share dividends

(2,420 ) (2,420 ) (9,690 ) (9,690 )
Dividends declared on unvested time-based awards (120 ) (120 ) (490 ) (490 )
Undistributed earnings allocated to unvested time-based awards                
FFO available to common shareholders 20,750 22,500 124,270 130,270
 

Less:

Non-cash amortization(1)

  (30 )   (30 )   (100 )   (100 )
AFFO available to common shareholders $ 20,720   $ 22,470   $ 124,170   $ 130,170  
 
FFO per common share:
Basic $ 0.35 $ 0.38 $ 2.11 $ 2.21
Diluted $ 0.35 $ 0.38 $ 2.10 $ 2.20
 
AFFO per common share:
Basic $ 0.35 $ 0.38 $ 2.10 $ 2.21
Diluted $ 0.35 $ 0.38 $ 2.10 $ 2.20
 
Weighted-average number of common shares outstanding:
Basic 58,992 58,992 59,024 59,024
Diluted 59,031 59,031 59,093 59,093
 

____________

(1) Reflects non-cash amortization of ground lease asset, deferred franchise costs, deferred key money, unfavorable contract liability, and air rights contract.

                 

CHESAPEAKE LODGING TRUST

CURRENT HOTEL PORTFOLIO

 
 
Hotel Location Rooms Acquisition Date
1       Hyatt Regency Boston Boston, MA 502 March 18, 2010
2 Hilton Checkers Los Angeles Los Angeles, CA 193 June 1, 2010
3 Boston Marriott Newton Newton, MA 430 July 30, 2010
4 Le Meridien San Francisco San Francisco, CA 360 December 15, 2010
5 Homewood Suites Seattle Convention Center Seattle, WA 195 May 2, 2011
6 W Chicago – City Center Chicago, IL 403 May 10, 2011
7 Hotel Indigo San Diego Gaslamp Quarter San Diego, CA 210 June 17, 2011
8 Courtyard Washington Capitol Hill/Navy Yard Washington, DC 204 June 30, 2011
9 Hotel Adagio San Francisco, Autograph Collection San Francisco, CA 171 July 8, 2011
10 Denver Marriott City Center Denver, CO 613 October 3, 2011
11 Hyatt Herald Square New York New York, NY 122 December 22, 2011
12 W Chicago – Lakeshore Chicago, IL 520 August 21, 2012
13 Hyatt Regency Mission Bay Spa and Marina San Diego, CA 429 September 7, 2012
14 The Hotel Minneapolis, Autograph Collection Minneapolis, MN 222 October 30, 2012
15 Hyatt Place New York Midtown South New York, NY 185 March 14, 2013
16 W New Orleans – French Quarter New Orleans, LA 97 March 28, 2013
17 Le Meridien New Orleans New Orleans, LA 410 April 25, 2013
18 Hyatt Centric Fisherman’s Wharf San Francisco, CA 316 May 31, 2013
19 Hyatt Centric Santa Barbara Santa Barbara, CA 200 June 27, 2013
20 JW Marriott San Francisco Union Square San Francisco, CA 337 October 1, 2014
21 Royal Palm South Beach Miami, a Tribute Portfolio Resort Miami Beach, FL 393 March 9, 2015
22 Ace Hotel and Theater Downtown Los Angeles Los Angeles, CA 182 April 30, 2015
6,694
 



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