Xenia Hotels Results

Xenia Hotels & Resorts Reports Second Quarter 2017 Results

Same-Property RevPAR decreased 1.4% compared to the second quarter of 2016 to $166.18, as occupancy decreased 120 basis points and ADR increased 0.1%. Excluding the Company's Houston-area hotels, Same-Property RevPAR increased 0.3%, as occupancy declined 4 basis points and ADR increased 0.4%.

Xenia Hotels

Xenia Hotels & Resorts, Inc. (NYSE:  XHR)today announced results for the quarter ended June 30, 2017.  

Second Quarter 2017 Highlights

  • Net Income: Net income attributable to common stockholders was $69.4 million, which includes a $49.2 milliongain on the sale of investment properties. Net income per diluted share was $0.65. 
  • Same-Property RevPAR: Same-Property RevPAR decreased 1.4% compared to the second quarter of 2016 to $166.18, as occupancy decreased 120 basis points and ADR increased 0.1%. Excluding the Company's Houston-area hotels, Same-Property RevPAR increased 0.3%, as occupancy declined 4 basis points and ADR increased 0.4%. 
  • Same-Property Hotel EBITDA Margin: Same-Property Hotel EBITDA Margin was 34.2%, a decrease of 32 basis points compared to the second quarter of 2016. Excluding the Company's Houston-area hotels, Same-Property Hotel EBITDA Margin increased 29 basis points. 
  • Total Portfolio RevPAR: Total Portfolio RevPAR was 0.8% higher than in the second quarter of 2016. 
  • Adjusted EBITDA: Adjusted EBITDA declined $8.4 million to $79.6 million, a decrease of 9.6% primarily due to net asset dispositions since the second quarter of 2016. 
  • Adjusted FFO per Diluted Share: Adjusted FFO per diluted share was $0.59, a decrease of 9.2% compared to the second quarter of 2016. 
  • Transaction Activity: The Company acquired one hotel for $205.5 million and sold six hotels for total consideration of $193 million. 
  • Financing Activity: The Company obtained a new $115 million mortgage loan collateralized by the Marriott San Francisco Airport Waterfront and paid off three mortgage loans totaling $128 million. 
  • Dividends: The Company declared its second quarter dividend of $0.275 per share to common stockholders of record on June 30, 2017.

Year to Date Highlights

  • Net Income: Net income attributable to common stockholders was $77.5 million and net income per diluted share was $0.72. 
  • Same-Property RevPAR: Same-Property RevPAR increased 0.7% to $159.52 compared to the six months ended June 30, 2016, as occupancy remained essentially flat and ADR increased 0.6%. Excluding the Company's Houston-area hotels, Same-Property RevPAR increased 1.6%, as occupancy increased 72 basis points and ADR increased 0.7%. 
  • Same-Property Hotel EBITDA Margin: Same-Property Hotel EBITDA Margin was 32.2%, an increase of 33 basis points compared to the six months ended June 30, 2016. Excluding the Company's Houston-area hotels, Same-Property Hotel EBITDA Margin was 32.2% during the six months ended June 30, 2017, an increase of 45 basis points. 
  • Total Portfolio RevPAR: Total Portfolio RevPAR increased 3.4% year over year, reflecting portfolio improvements and portfolio composition. 
  • Adjusted EBITDA: Adjusted EBITDA was $138.7 million, a decrease of 7.9% from 2016. 
  • Adjusted FFO per Diluted Share: The Company generated Adjusted FFO per diluted share of $1.04, a 3.7% decline from 2016.

"We were very pleased with the results of our focus on expense controls during the second quarter, as our hotel operating expenses, exclusive of property taxes, decreased by 1.4% on a Same-Property basis," commented Marcel Verbaas, President and Chief Executive Officer of Xenia. "Meanwhile, our top line performance during the quarter met our expectations, with the impact of the Easter shift into April resulting in a modest RevPAR increase of 0.3% for our Same-Property portfolio excluding our Houston hotels. Our overall Same-Property RevPAR performance was negatively impacted by approximately 170 basis points as a result of market weakness and renovation disruption at our Houstonassets. We expect this negative impact to moderate in the second half of the year since year over year comparisons will be easing and the disruptive guestroom renovation at the Westin Galleria has now been completed." 

"Our ability to reduce hotel operating expenses resulted in our Same-Property Hotel EBITDA margin decreasing by only 32 basis points, despite negative RevPAR growth and a 17.7% increase in property taxes partially due to tax refunds received in the second quarter of 2016. We believe this is a testament to our asset management capability as well as the success of our property optimization process."

"We maintained our disciplined focus on capital allocation during the quarter, with the previously announced acquisition of Hyatt Regency Grand Cypress in Orlando and the disposition of six select service hotels further refining and upgrading our portfolio," Mr. Verbaas continued. "We have preserved our strong balance sheet position and look forward to continuing our positive portfolio momentum in the months ahead."

Operating Results

The Company's results include the following:

 

Three Months Ended June 30,

Six Months Ended June 30,

2017

2016

Change

2017

2016

Change

($ amounts in thousands, except hotel statistics and per share amounts)

Net income attributable to common stockholders

$

69,418

$

25,768

169.4

%

$

77,531

$

16,851

360.1

%

Net income per share available to common stockholders

$

0.65

$

0.24

170.8

%

$

0.72

$

0.15

380.0

%

Same-Property Number of Hotels

37

37

37

37

Same-Property Number of Rooms

10,775

10,792

(17)

10,775

10,792

(17)

Same-Property Occupancy

78.8

%

80.0

%

(120 bps)

76.6

%

76.6

%

2 bps

Same-Property Average Daily Rate

$

210.89

$

210.64

0.1

%

$

208.21

$

206.90

0.6

%

Same-Property RevPAR

$

166.18

$

168.51

(1.4)

%

$

159.52

$

158.48

0.7

%

Same-Property Hotel EBITDA(1)

$

84,834

$

86,483

(1.9)

%

$

154,902

$

152,296

1.7

%

Same-Property Hotel EBITDA Margin(1)

34.2

%

34.5

%

(32 bps)

32.2

%

31.9

%

33 bps

Total Portfolio Number of Hotels(2)

37

46

(9)

37

46

(9)

Total Portfolio Number of Rooms(2)

10,775

11,594

(819)

10,775

11,594

(819)

Total Portfolio RevPAR(3)

$

164.10

$

162.72

0.8

%

$

155.72

$

150.53

3.4

%

Adjusted EBITDA(1)

$

79,576

$

87,999

(9.6)

%

$

138,685

$

150,531

(7.9)

%

Adjusted FFO(1)

$

63,324

$

70,247

(9.9)

%

$

110,929

$

117,323

(5.5)

%

Adjusted FFO per diluted share

$

0.59

$

0.65

(9.2)

%

$

1.04

$

1.08

(3.7)

%

 

"Same-Property" includes all hotels owned as of June 30, 2017.  "Same-Property" includes periods prior to the Company's ownership of Hotel Commonwealth and Hyatt Regency Grand Cypress, and excludes the NOI guaranty payment at the Andaz San Diego.  "Same-Property" also includes renovation disruption for multiple capital projects during the periods presented.

(1)

See tables later in this press release for reconciliations from net income to Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA"), Adjusted EBITDA, Funds From Operations ("FFO"), Adjusted FFO, and Same-Property Hotel EBITDA.  EBITDA, Adjusted EBITDA, FFO, Adjusted FFO, Same-Property Hotel EBITDA, and Same-Property Hotel EBITDA Margin are non-GAAP financial measures. 

(2)

As of end of periods presented.

(3)

Results of all hotels as owned during the periods presented, including the results of hotels sold or acquired for the actual period of ownership by the Company.

Transactions:

As previously disclosed, in April the Company sold the 122-room Courtyard Birmingham Downtown at UAB for a sale price of $30 million.

In May, the Company completed the acquisition of the 815-room Hyatt Regency Grand Cypress in Orlando, Florida for a purchase price of $205.5 million.

In June, the Company completed the sale of a five hotel portfolio including the 203-room Courtyard Fort Worth Downtown/Blackstone, the 123-room Courtyard Kansas City Country Club Plaza, the 182-room Courtyard Pittsburgh Downtown, the 116-room Hampton Inn & Suites Baltimore Inner Harbor, and the 188-room Residence Inn Baltimore Downtown/Inner Harbor, for total consideration of $163 million.

Subsequent to quarter end, in July, the Company sold the 219-room Marriott West Des Moines for a sale price of $19 million.

"The sale of the Marriott West Des Moines represents a continuation of our capital recycling efforts and refinement of our portfolio," said Mr. Verbaas. "Including this hotel, we have sold seven hotels for total consideration of $212 million this year. We are excited to have effectively replaced these assets through the addition of Hyatt Regency Grand Cypress, a hotel that we believe has significant upside through improved operations and targeted capital investments.  Since our listing in early 2015, we have now completed over $1.2 billion of acquisitions and dispositions that have significantly improved the quality of our portfolio."

Financings and Balance Sheet

In April, the Company closed a $115 million fixed rate mortgage loan collateralized by the Marriott San Francisco Airport Waterfront.  The loan bears an interest rate of 4.63% and matures in May 2027.

Also in April, the Company paid off the $45 million mortgage loan collateralized by the Residence Inn Denver City Center and the $27 million mortgage loan collateralized by the Bohemian Hotel Savannah Riverfront.  In May, the Company paid off the $55 million mortgage loan collateralized by the Fairmont Dallas.  With these pay offs, the Company has addressed all maturities through 2018.

As of June 30, 2017, the Company had total outstanding debt of $1.1 billion with a weighted average interest rate of 3.70%.  In addition, the Company had $201.8 million of cash and cash equivalents, and full availability on its $400 million senior unsecured credit facility.  Total net debt to trailing twelve month Corporate EBITDA (as defined in Section 1.01 of the Company's unsecured credit facility) was 3.2x.

Capital Expenditures

During the three and six months ended June 30, 2017 the Company invested $16 million and $31 million in its portfolio, respectively.  

The Company has now completed the guestroom renovation at the Westin Galleria Houston, and began the renovation of the lobby and transformation of the 24th floor meeting space to include a new fitness center and club lounge.  Also during the quarter, the Company added one key to the now 85-room RiverPlace Hotel in Portland.

Additionally, the Company made significant progress in the planning of several renovations expected to commence in the second half of the year, including guestroom renovations at the Westin Oaks Houston, Hilton Garden Inn Washington D.C., Hotel Monaco Denver, Hotel Monaco Chicago, Lorien Hotel & Spa, Residence Inn Denver City Center, and Marriott Chicago at Medical District/UIC, as well as meeting space renovations at Hyatt Regency Santa Clara and Loews New Orleans, a lobby and great room transformation at the Marriott San Francisco Airport Waterfront, and restaurant renovations at Hotel Monaco Chicago and RiverPlace Hotel.

Share Repurchases

During the second quarter, the Company repurchased a total of 132,843 shares of common stock for total consideration of $2.3 million. 

Year to date through August 4, 2017, the Company repurchased a total of 240,352 shares of common stock at a weighted average price of $17.07 per share, for total consideration of $4.1 million.  As of August 4, 2017, the Company had approximately $97 million in capacity remaining under its repurchase authorization.

2017 Outlook and Guidance

The Company is updating its guidance for 2017.  The Company's outlook for 2017 is based on the current economic environment, incorporates all expected renovation disruption, and assumes no additional acquisitions, dispositions, equity offerings, or share repurchases.  RevPAR change includes all 36 hotels owned as of August 8, 2017.

 

2017 Guidance

Variance to Prior Guidance

Low End

High End

Low End

High End

($ amounts in millions, except per share data)

Net Income

$88

$98

$52

$49

RevPAR Change

(1.00)%

0.50%

0.75%

0.25%

Adjusted EBITDA

$250

$260

$6

$2

Adjusted FFO

$204

$214

$6

$2

Adjusted FFO per Diluted Share

$1.91

$2.00

$0.06

$0.02

Capital Expenditures

$80

$90

$(5)

$(5)

Additional guidance details:

  • The midpoint of the Company's Adjusted EBITDA guidance was increased due to better than expected food and beverage revenue and hotel operating margin results in the second quarter, and an improved RevPAR outlook for the second half of 2017. The increase was partially offset by the net impact of acquisitions and dispositions completed since the date of prior guidance. 
  • The Company projects average RevPAR declines of 6% to 9% at the Company's Houston-area hotels, due to the impact of continued weakness in corporate demand, the addition of new supply, and disruption due to renovations at the Westin Galleria and Westin Oaks. The Company's Houston-area hotels are expected to negatively impact portfolio RevPAR change by approximately 70 basis points. 
  • Disruption due to renovations is expected to negatively impact portfolio RevPAR change by approximately 50 basis points. 
  • General and administrative expense of $22 million to $24 million, excluding non-cash share-based compensation. 
  • Interest expense of approximately $42 million, excluding non-cash loan related costs. 
  • Income tax expense of approximately $6 million.

 

About Xenia Hotels & Resorts, Inc.

Xenia Hotels & Resorts, Inc. is a self-advised and self-administered REIT that invests primarily in premium full service and lifestyle hotels, with a focus on the top 25 U.S. lodging markets as well as key leisure destinations in the United States. The Company owns 36 hotels, including 34 wholly owned hotels, comprising 10,556 rooms, across 17 states and the District of Columbia. Xenia's hotels are primarily in the luxury and upper upscale segments, and operated and/or licensed by industry leaders such as Marriott®, Hyatt®, Kimpton®, Aston®, Fairmont®, Hilton®, and Loews®, as well as leading independent management companies including Sage Hospitality, The Kessler Collection, Urgo Hotels & Resorts, and Davidson Hotels & Resorts. 

Xenia Hotels & Resorts, Inc.

Consolidated Balance Sheets

As of June 30, 2017 and December 31, 2016

($ amounts in thousands, except per share data)

June 30, 2017

December 31, 2016

Assets

(Unaudited)

Investment properties:

Land

$

335,805

$

331,502

Buildings and other improvements

2,708,251

2,732,062

Total

$

3,044,056

$

3,063,564

Less: accumulated depreciation

(593,508)

(619,975)

Net investment properties

$

2,450,548

$

2,443,589

Cash and cash equivalents

201,815

216,054

Restricted cash and escrows

65,778

70,973

Accounts and rents receivable, net of allowance for doubtful accounts

36,364

22,998

Intangible assets, net of accumulated amortization of $4,785 and $4,324, 

respectively

75,761

76,912

Other assets

26,574

29,819

Assets held for sale

17,243

Total assets (including $72,940 and $74,440, respectively, related to 

consolidated variable interest entities)

$

2,874,083

$

2,860,345

Liabilities

Debt, net of loan discounts and unamortized deferred financing costs

$

1,063,442

$

1,077,132

Accounts payable and accrued expenses

71,871

71,955

Distributions payable

29,893

29,881

Other liabilities

35,224

29,810

Liabilities associated with assets held for sale

1,478

Total liabilities (including $46,804 and $47,828, respectively, related to 

consolidated variable interest entities)

$

1,201,908

$

1,208,778

Commitments and contingencies

Stockholders' equity

Common stock, $0.01 par value, 500,000,000 shares authorized, 106,725,643 

and 106,794,788 shares issued and outstanding as of June 30, 2017 and 

December 31, 2016, respectively

1,068

1,068

Additional paid in capital

1,922,785

1,925,554

Accumulated other comprehensive income

4,845

5,009

Accumulated distributions in excess of net earnings

(283,449)

(302,034)

Total Company stockholders' equity

$

1,645,249

$

1,629,597

Non-controlling interests

26,926

21,970

Total equity

$

1,672,175

$

1,651,567

Total liabilities and equity

$

2,874,083

$

2,860,345

 

 

Xenia Hotels & Resorts, Inc.

Consolidated Statements of Operations and Comprehensive Income

For the Three and Six Months Ended June 30, 2017 and 2016

(Unaudited)

($ amounts in thousands, except per share data)

Three Months Ended June 30,

Six Months Ended June 30,

2017

2016

2017

2016

Revenues:

Rooms revenues

$

164,868

$

180,977

$

309,319

$

340,295

Food and beverage revenues

66,552

66,329

128,376

129,797

Other revenues

12,972

14,072

25,157

26,321

Total revenues

$

244,392

$

261,378

$

462,852

$

496,413

Expenses:

Rooms expenses

35,349

38,183

68,979

74,958

Food and beverage expenses

41,798

42,009

80,982

84,242

Other direct expenses

3,303

4,086

6,309

8,051

Other indirect expenses

55,292

57,914

108,330

115,881

Management and franchise fees

11,722

13,780

23,100

26,027

Total hotel operating expenses

$

147,464

$

155,972

$

287,700

$

309,159

Depreciation and amortization

36,625

38,318

73,104

77,270

Real estate taxes, personal property taxes and insurance

10,696

10,542

22,056

22,575

Ground lease expense

1,409

1,402

2,785

2,755

General and administrative expenses

7,993

7,674

16,605

18,298

Acquisition transaction costs

1,260

6

1,265

146

Provision for asset impairment

2,396

9,991

Total expenses

$

205,447

$

216,310

$

403,515

$

440,194

Operating income

$

38,945

$

45,068

$

59,337

$

56,219

Gain (loss) on sale of investment properties

49,176

(90)

49,176

792

Other income

186

94

338

178

Interest expense

(11,146)

(12,801)

(21,297)

(25,640)

Loss on extinguishment of debt

(274)

(35)

(274)

(4,778)

Net income before income taxes

$

76,887

$

32,236

$

87,280

$

26,771

Income tax expense

(5,889)

(6,095)

(8,055)

(9,800)

Net income

$

70,998

$

26,141

$

79,225

$

16,971

Non-controlling interests in consolidated real estate entities

(126)

(43)

(54)

120

Non-controlling interests of common units in Operating Partnership

(1,454)

(330)

(1,640)

(240)

Net income attributable to non-controlling interests

$

(1,580)

$

(373)

$

(1,694)

$

(120)

Net income attributable to common stockholders

$

69,418

$

25,768

$

77,531

$

16,851

 

Xenia Hotels & Resorts, Inc.

Consolidated Statements of Operations and Comprehensive Income - Continued

For the Three and Six Months Ended June 30, 2017 and 2016 

(Unaudited)

 ($ amounts in thousands, except per share data)

Three Months Ended June 30,

Six Months Ended June 30,

2017

2016

2017

2016

Basic and diluted earnings per share

Net income per share available to common stockholders

$

0.65

$

0.24

$

0.72

$

0.15

Weighted average number of common shares (basic)

106,769,003

107,936,336

106,806,664

108,813,649

Weighted average number of common shares (diluted)

107,005,884

108,048,155

107,033,619

108,910,761

Comprehensive Income:

Net income

$

70,998

$

26,141

$

79,225

$

16,971

Other comprehensive income (loss):

Unrealized loss on interest rate derivative instruments

(2,815)

(5,286)

(1,672)

(15,645)

Reclassification adjustment for amounts recognized in net income (interest expense)

693

973

1,505

1,898

$

68,876

$

21,828

$

79,058

$

3,224

Comprehensive (income) loss attributable to non-controlling interests:

Non-controlling interests in consolidated real estate entities

(126)

(43)

(54)

120

Non-controlling interests of common units in Operating Partnership

(1,411)

(274)

(1,637)

(61)

Comprehensive (income) loss attributable to non-controlling interests

$

(1,537)

$

(317)

$

(1,691)

$

59

Comprehensive income attributable to the Company

$

67,339

$

21,511

$

77,367

$

3,283

Non-GAAP Financial Measures

The Company considers the following useful non-GAAP financial measures to investors as key supplemental measures of operating performance: EBITDA, Adjusted EBITDA, Same Property Hotel EBITDA, Same-Property Hotel EBITDA Margin, FFO, Adjusted FFO, and Adjusted FFO per diluted share.  These non-GAAP financial measures should be considered along with, but not as alternatives to, net income or loss, operating profit, cash from operations, or any other operating performance measure as prescribed per GAAP.

EBITDA and Adjusted EBITDA

EBITDA is a commonly used measure of performance in many industries and is defined as net income or loss (calculated in accordance with GAAP) excluding interest expense, provision for income taxes (including income taxes applicable to sale of assets) and depreciation and amortization, as well as similar adjustments for unconsolidated partnership and joint ventures.  The Company considers EBITDA useful to an investor regarding results of operations, in evaluating and facilitating comparisons of operating performance between periods and between REITs by removing the impact of capital structure (primarily interest expense) and asset base (primarily depreciation and amortization) from operating results, even though EBITDA does not represent an amount that accrues directly to common stockholders.  In addition, EBITDA is used as one measure in determining the value of hotel acquisitions and dispositions and along with FFO and Adjusted FFO, it is used by management in the annual budget process for compensation programs. The Company presents EBITDA attributable to common stock and unit holders, which includes its Operating Partnership units because its Operating Partnership units may be redeemed for common stock.  The Company believes it is meaningful for the investor to understand EBITDA attributable to all common stock and Operating Partnership units.

The Company further adjusts EBITDA for certain additional items such as hotel property acquisitions and pursuit costs, amortization of share-based compensation, the cumulative effect of changes in accounting principles, impairment of real estate assets, and other costs it believes do not represent recurring operations and are not indicative of the performance of its underlying hotel property entities.  The Company believes Adjusted EBITDA provides investors with another financial measure in evaluating and facilitating comparison of operating performance between periods and between REITs that report similar measures.

Hotel EBITDA and Hotel EBITDA Margin

The Company calculates Hotel EBITDA in accordance with the current edition of USALI, which is defined as net income or loss (calculated in accordance with GAAP) after adding back replacement reserves.  Hotel EBITDA Margin is calculated by dividing Hotel EBITDA by Total Revenues.

FFO and Adjusted FFO

The Company calculates FFO in accordance with standards established by the National Association of Real Estate Investment Trusts (NAREIT), which defines FFO as net income or loss (calculated in accordance with GAAP), excluding real estate-related depreciation, amortization and impairments, gains (losses) from sales of real estate, the cumulative effect of changes in accounting principles, similar adjustments for unconsolidated partnerships and joint ventures, and items classified by GAAP as extraordinary. 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. The Company believes that the presentation of FFO provides useful supplemental information to investors regarding operating performance by excluding the effect of real estate depreciation and amortization, gains (losses) from sales for real estate, impairments of real estate assets, extraordinary items and the portion of these items related to unconsolidated entities, all of which are based on historical cost accounting and which may be of lesser significance in evaluating current performance.  The Company believes that the presentation of FFO can facilitate comparisons of operating performance between periods and between REITs, even though FFO does not represent an amount that accrues directly to common stockholders.  The calculation of FFO may not be comparable to measures calculated by other companies who do not use the NAREIT definition of FFO or do not calculate FFO per diluted share in accordance with NAREIT guidance.  Additionally, FFO may not be helpful when comparing Xenia to non-REITs.  The Company presents FFO attributable to common stock and unit holders, which includes its Operating Partnership units because its Operating Partnership units may be redeemed for common stock.  The Company believes it is meaningful for the investor to understand FFO attributable to all common stock and Operating Partnership units.

The Company further adjusts FFO for certain additional items that are not in NAREIT's definition of FFO such as hotel property acquisition and pursuit costs, amortization of debt origination costs and share-based compensation, and other expenses it believes do not represent recurring operations.  The Company believes that Adjusted FFO provides investors with useful supplemental information that may facilitate comparisons of ongoing operating performance between periods and between REITs that make similar adjustments to FFO and is beneficial to investors' complete understanding of operating performance.

Adjusted FFO per diluted share

The Company calculates Adjusted FFO per diluted share by dividing the Adjusted FFO for the respective period by the diluted weighted average number of common stock shares for the corresponding period.  The Company's diluted weighted average number of common shares outstanding is calculated by taking the weighted average of the common stock outstanding for the respective period plus the effect of any dilutive securities.  Any anti-dilutive securities are excluded from the diluted earnings per-share calculation.

 

Xenia Hotels & Resorts, Inc.

Reconciliation of Net Income to EBITDA, Adjusted EBITDA and Same-Property Hotel EBITDA

For the Three and Six Months Ended June 30, 2017 and 2016

(Unaudited)

($ amounts in thousands)

Three Months Ended June 30,

Six Months Ended June 30,

2017

2016

2017

2016

Net income

$

70,998

$

26,141

$

79,225

$

16,971

Adjustments:

Interest expense

11,146

12,801

21,297

25,640

Income tax expense

5,889

6,095

8,055

9,800

Depreciation and amortization related to investment properties

36,522

38,318

72,881

77,270

Non-controlling interests in consolidated real estate entities

(126)

(43)

(54)

120

Adjustments related to non-controlling interests in consolidated real estate entities

(330)

(314)

(652)

(625)

EBITDA attributable to common stock and unit holders

$

124,099

$

82,998

$

180,752

$

129,176

Reconciliation to Adjusted EBITDA and Same-Property Hotel EBITDA

Impairment of investment properties

2,396

9,991

(Gain) loss on sale of investment property

(49,176)

90

(49,176)

(792)

Loss on extinguishment of debt

274

35

274

4,778

Acquisition transaction costs

1,260

6

1,265

146

Amortization of share-based compensation expense

2,951

2,307

5,182

5,004

Amortization of above and below market ground leases and straight-line rent expense

168

167

388

338

Management transition and severance expenses

1,890

Adjusted EBITDA attributable to common stock and unit holders

$

79,576

$

87,999

$

138,685

$

150,531

Corporate expenses

5,505

5,703

12,134

11,868

Income from sold properties

(4,283)

(11,096)

(7,477)

(20,419)

Pro forma hotel level adjustments, net(1)

4,036

3,877

11,560

10,316

Same-Property Hotel EBITDA attributable to common stock and unit holders

$

84,834

$

86,483

$

154,902

$

152,296

 

(1)

Same-Property Hotel EBITDA adjusted to include the results of the Hotel Commonwealth and Hyatt Regency Grand Cypress for periods prior to Company ownership, and exclude the NOI guaranty payment at the Andaz San Diego.

 

Xenia Hotels & Resorts, Inc.

Reconciliation of Net Income to FFO and Adjusted FFO

For the Three and Six Months Ended June 30, 2017 and 2016

(Unaudited)

($ amounts in thousands)

Three Months Ended June 30,

Six Months Ended June 30,

2017

2016

2017

2016

Net income

$

70,998

$

26,141

$

79,225

$

16,971

Adjustments:

Depreciation and amortization related to investment properties

36,522

38,318

72,881

77,270

Impairment of investment property

2,396

9,991

Gain (loss) on sale of investment property

(49,176)

90

(49,176)

(792)

Non-controlling interests in consolidated real estate entities

(126)

(43)

(54)

120

Adjustments related to non-controlling interests in consolidated real estate entities

(226)

(224)

(451)

(448)

FFO attributable to common stock and unit holders

$

57,992

$

66,678

$

102,425

$

103,112

Reconciliation to Adjusted FFO

Loss on extinguishment of debt

274

35

274

4,778

Acquisition transaction costs

1,260

6

1,265

146

Loan related costs(1)

683

1,058

1,402

2,062

Adjustment related to non-controlling interests loan related costs

(4)

(4)

(7)

(7)

Amortization of share-based compensation expense

2,951

2,307

5,182

5,004

Amortization of above and below market ground leases and straight-line rent expense

168

167

388

338

Management transition and severance expenses

1,890

Adjusted FFO attributable to common stock and unit holders

$

63,324

$

70,247

$

110,929

$

117,323

 

(1)

Loan related costs included amortization of debt discounts, premiums and deferred loan origination costs.

 

 

Xenia Hotels & Resorts, Inc.

Reconciliation of Net Income to Adjusted EBITDA

for Current Full Year 2017 Guidance

($ amounts in millions)

Guidance 

Midpoint

Net income

$93

Adjustments:

Depreciation and amortization related to investment properties

149

Interest expense

45

Income tax expense

6

Adjustments related to non-controlling interests

(1)

EBITDA attributable to common stock and unit holders

$292

(Gain) loss on sale of investment property

(49)

Amortization of share-based compensation expense

10

Other(1)

2

Adjusted EBITDA attributable to common stock and unit holders

$255

 

(1)

Includes amortization of above and below market ground leases and straight-line rent, acquisition and pursuit costs, and loss on extinguishment of debt.

 

Reconciliation of Net Income to Adjusted FFO

for Current Full Year 2017 Guidance

($ amounts in millions)

Guidance 

Midpoint

Net income

$93

Adjustments:

Depreciation and amortization related to investment properties

149

(Gain) loss on sale of investment property

(49)

Adjustments related to non-controlling interests

(1)

FFO attributable to common stock and unit holders

$192

Amortization of share-based compensation expense

10

Other(2)

7

Adjusted FFO attributable to common stock and unit holders

$209

 

(2)

Includes amortization of above and below market ground leases and straight-line rent, acquisition and pursuit costs, loss on extinguishment of debt, and loan related costs.

 

 

Xenia Hotels & Resorts, Inc.

Debt Summary

($ amounts in thousands)

Rate 

Type

Rate(1)

Initial 

Maturity 

Date

Fully Extended 

Maturity

 Date(2)

Outstanding

as of

June 30, 2017

Hotel Monaco Denver

Fixed(3)

2.98%

January 2019

January 2020

$

41,000

Andaz Napa

Fixed(3)

2.99%

March 2019

March 2020

38,000

Marriott Charleston Town Center

 Fixed

3.85%

July 2020

July 2020

16,157

Grand Bohemian Hotel Charleston (VIE)

 Variable

3.73%

November 2020

November 2020

19,321

Loews New Orleans Hotel

 Variable

3.58%

February 2019

November 2020

37,500

Grand Bohemian Hotel Mountain Brook (VIE)

 Variable

3.73%

December 2019

December 2020

25,558

Andaz Savannah

 Variable

3.23%

January 2019

January 2021

21,500

Hotel Monaco Chicago

 Variable

3.48%

January 2019

January 2021

21,644

Westin Galleria Houston & Westin Oaks Houston 

at The Galleria

 Variable

3.73%

May 2019

May 2021

110,000

Marriott Dallas City Center

Fixed(3)

4.05%

January 2022

January 2022

51,000

Hyatt Regency Santa Clara

Fixed(3)

3.81%

January 2022

January 2022

90,000

Hotel Palomar Philadelphia

Fixed(3)

4.14%

January 2023

January 2023

60,000

Residence Inn Boston Cambridge

 Fixed

4.48%

November 2025

November 2025

63,000

Grand Bohemian Hotel Orlando

 Fixed

4.53%

March 2026

March 2026

60,000

Marriott San Francisco Airport Waterfront

 Fixed

4.63%

May 2027

May 2027

115,000

Total Mortgage Loans

3.95%

(4)

$

769,680

Mortgage Loan Discounts, net(5)

(286)

Unamortized Deferred Financing Costs, net

(5,952)

Senior Unsecured Credit Facility

 Variable

2.73%

February 2019

February 2020

Term Loan $175M

Partially 

Fixed(6)

2.74%

February 2021

February 2021

175,000

Term Loan $125M

Partially 

Fixed(6)

3.53%

October 2022

October 2022

125,000

Total Debt, net of mortgage loan discounts and 

unamortized deferred financing costs

3.70%

(4)

$

1,063,442

 

(1)

Variable index is one month LIBOR. Interest rates as of June 30, 2017.

(2)

The majority of loans require minimum Debt Service Coverage Ratio and/or Loan to Value maximums in order to be extended.  If the requirements are met, loan extension is at the discretion of Xenia and may require payment of an extension fee. 

(3)

A variable interest loan for which the interest rate has been fixed for the entire term.

(4)

Weighted average interest rate. 

(5)

Loan discounts upon issuance of new mortgage loan or modification.

(6)

A variable interest loan for which LIBOR has been fixed for the entire term.  The spread to LIBOR may vary, as it is determined by the Company's leverage ratio.

 

Xenia Hotels & Resorts, Inc.

Same-Property(1) Hotel EBITDA and Hotel EBITDA Margin

For the Three and Six Months Ended June 30, 2017 and 2016

($ amounts in thousands)

Three Months Ended June 30,

Six Months Ended June 30,

2017

2016

Change

2017

2016

Change

Revenues:

Room revenues

$

163,000

$

165,481

(1.5)

%

$

311,353

$

311,227

%

Food and beverage revenues

71,393

70,723

0.9

%

142,797

139,279

2.5

%

Other revenues

13,732

14,383

(4.5)

%

26,224

26,709

(1.8)

%

Total revenues

$

248,125

$

250,587

(1.0)

%

$

480,374

$

477,215

0.7

%

Expenses:

Room expenses

$

35,477

$

36,169

(1.9)

%

$

70,372

$

70,641

(0.4)

%

Food and beverage expenses

45,057

45,280

(0.5)

%

89,686

90,273

(0.7)

%

Other direct expenses

3,547

4,420

(19.8)

%

6,890

8,527

(19.2)

%

Other indirect expenses

55,568

54,995

1.0

%

110,874

109,296

1.4

%

Management and franchise fees

11,256

11,972

(6.0)

%

22,579

22,748

(0.7)

%

Real estate taxes, personal property taxes and insurance

11,133

10,039

10.9

%

22,597

21,032

7.4

%

Ground lease expense

1,253

1,229

2.0

%

2,474

2,402

3.0

%

Total hotel operating expenses

$

163,291

$

164,104

(0.5)

%

$

325,472

$

324,919

0.2

%

Hotel EBITDA

$

84,834

$

86,483

(1.9)

%

$

154,902

$

152,296

1.7

%

Hotel EBITDA Margin

34.2

%

34.5

%

(32 bps)

32.2

%

31.9

%

33 bps

 

(1)

"Same-Property" includes all hotels owned as of June 30, 2017.  "Same-Property" includes periods prior to the Company's ownership of Hotel Commonwealth and Hyatt Regency Grand Cypress, and excludes the NOI guaranty payment at the Andaz San Diego.  "Same-Property" also includes renovation disruption for multiple capital projects during the periods presented.

 

 

Xenia Hotels & Resorts, Inc.

Portfolio Data by Market

As of June 30, 2017(1)

As of June 30, 2017

Market(2)

% of Hotel 

EBITDA(3)

Number of 

Hotels

Number of 

Rooms

Houston, TX

10%

3

1,218

Orlando, FL

9%

3

1,177

San Francisco/San Mateo, CA

8%

1

688

Dallas, TX

7%

2

961

Oahu Island, HI

6%

1

645

Boston, MA

6%

2

466

San Jose/Santa Cruz, CA

6%

1

505

Denver, CO

5%

2

417

California North

5%

2

416

Atlanta, GA

5%

1

522

Washington, DC-MD-VA

4%

2

407

Other

29%

17

3,353

Total

100%

37

10,775

 

(1)

"Same-Property" includes all hotels owned as of June 30, 2017.  "Same-Property" includes periods prior to the Company's ownership of Hotel Commonwealth and Hyatt Regency Grand Cypress, and excludes the NOI guaranty payment at the Andaz San Diego.  "Same-Property" also includes renovation disruption for multiple capital projects during the periods presented.

(2)

As defined by STR, Inc.

(3)

Percentage of 2016 Hotel EBITDA.  Includes periods prior to the Company's ownership of Hotel Commonwealth in Boston, MA and Hyatt Regency Grand Cypress in Orlando, FL.

 

Xenia Hotels & Resorts, Inc.

Same-Property(1) Statistical Data by Market

For the Three and Six Months Ended June 30, 2017 and 2016

Three Months Ended

Three Months Ended

June 30, 2017

June 30, 2016

% Change

Occupancy

ADR

RevPAR

Occupancy

ADR

RevPAR

RevPAR

Market(2)

Houston, TX

60.6

%

$

183.24

$

110.97

70.9

%

$

192.14

$

136.28

(18.6)

%

Orlando, FL

80.5

%

186.88

150.44

77.9

%

188.26

146.70

2.5

%

San Francisco/San Mateo, CA

89.6

%

217.85

195.10

88.0

%

234.36

206.19

(5.4)

%

Dallas, TX

64.3

%

185.78

119.46

68.8

%

193.56

133.21

(10.3)

%

Oahu Island, HI

88.0

%

158.55

139.45

89.2

%

157.83

140.82

(1.0)

%

Boston, MA

89.0

%

315.02

280.44

87.9

%

300.59

264.29

6.1

%

San Jose/Santa Cruz, CA

81.3

%

255.95

208.14

84.8

%

241.64

204.84

1.6

%

Denver, CO

89.8

%

198.59

178.37

88.6

%

203.28

180.06

(0.9)

%

California North

79.3

%

308.25

244.51

70.4

%

291.37

205.22

19.1

%

Atlanta, GA

81.5

%

153.04

124.73

78.8

%

147.27

115.99

7.5

%

Washington, DC-MD-VA

91.5

%

263.67

241.30

93.8

%

263.47

247.20

(2.4)

%

Other

81.1

%

217.30

176.24

82.1

%

216.81

178.02

(1.0)

%

Total

78.8

%

$

210.89

$

166.18

80.0

%

$

210.64

$

168.51

(1.4)

%

 

Six Months Ended

Six Months Ended

June 30, 2017

June 30, 2016

% Change

Occupancy

ADR

RevPAR

Occupancy

ADR

RevPAR

RevPAR

Market(2)

Houston, TX

65.2

%

$

193.07

$

125.94

70.7

%

$

194.01

$

137.12

(8.2)

%

Orlando, FL

81.1

%

203.89

165.32

79.4

%

201.18

159.75

3.5

%

San Francisco/San Mateo, CA

85.6

%

228.57

195.62

84.5

%

237.99

201.09

(2.7)

%

Dallas, TX

66.3

%

191.93

127.23

67.0

%

196.99

131.97

(3.6)

%

Oahu Island, HI

85.9

%

162.98

140.00

88.1

%

161.49

142.25

(1.6)

%

Boston, MA

79.4

%

267.72

212.46

77.3

%

264.19

204.14

4.1

%

San Jose/Santa Cruz, CA

77.9

%

261.27

203.46

80.5

%

251.90

202.88

0.3

%

Denver, CO

82.6

%

187.07

154.60

80.7

%

190.71

153.86

0.5

%

California North

74.6

%

269.60

201.04

62.8

%

257.71

161.81

24.2

%

Atlanta, GA

81.0

%

153.61

124.44

78.7

%

148.28

116.68

6.7

%

Washington, DC-MD-VA

87.0

%

252.71

219.89

87.5

%

238.06

208.23

5.6

%

Other

76.8

%

211.02

162.02

76.9

%

209.69

161.20

0.5

%

Total

76.6

%

$

208.21

$

159.52

76.6

%

$

206.90

$

158.48

0.7

%

 

(1)

"Same-Property" includes all hotels owned as of June 30, 2017.  "Same-Property" includes periods prior to the Company's ownership of Hotel Commonwealth and Hyatt Regency Grand Cypress, and excludes the NOI guaranty payment at the Andaz San Diego.  "Same-Property" also includes renovation disruption for multiple capital projects during the periods presented.

(2)

As defined by STR, Inc. Market rank based on Portfolio Data by Market as presented on prior page.

 

 

Xenia Hotels & Resorts, Inc.

Same-Property(1) Historical Operating Data

($ amounts in thousands, except ADR and RevPAR)

First Quarter

Second Quarter

Third Quarter

Fourth Quarter

Full Year

2017

2017

2017

2017

2017

Occupancy

74.4

%

78.8

%

ADR

$

205.33

$

210.89

RevPAR

$

152.78

$

166.18

Hotel Revenues

$

232,249

$

248,125

Hotel EBITDA

$

70,068

$

84,834

Hotel EBITDA Margin

30.2

%

34.2

%

First Quarter

Second Quarter

Third Quarter

Fourth Quarter

Full Year

2016

2016

2016

2016

2016

Occupancy

73.2

%

80.0

%

78.5

%

71.3

%

75.7

%

ADR

$

202.82

$

210.64

$

201.43

$

200.50

$

203.96

RevPAR

$

148.45

$

168.51

$

158.20

$

142.88

$

154.49

Hotel Revenues

$

226,628

$

250,587

$

229,574

$

222,042

$

928,831

Hotel EBITDA

$

65,813

$

86,483

$

70,900

$

65,854

$

289,050

Hotel EBITDA Margin

29.0

%

34.5

%

30.9

%

29.7

%

31.1

%

 

(1)

"Same-Property" includes all hotels owned as of June 30, 2017.  "Same-Property" includes periods prior to the Company's ownership of Hotel Commonwealth and Hyatt Regency Grand Cypress, and excludes the NOI guaranty payment at the Andaz San Diego.  "Same-Property" also includes renovation disruption for multiple capital projects during the periods presented.



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