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 & Resorts, Inc. (NYSE: XHR)today announced results for the quarter ended June 30, 2017.
Second Quarter 2017 Highlights
Year to Date Highlights
“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) |
$(5) |
||||
Additional guidance details:
About Xenia Hotels & Resorts, Inc.
Xenia Hotels & Resorts, Inc. is a self-advised and self-administered REIT that invests primarily in premium full service and lifestyle hotels, with a focus on the top 25 U.S. lodging markets as well as key leisure destinations in the United States. The Company owns 36 hotels, including 34 wholly owned hotels, comprising 10,556 rooms, across 17 states and the District of Columbia. Xenia’s hotels are primarily in the luxury and upper upscale segments, and operated and/or licensed by industry leaders such as Marriott®, Hyatt®, Kimpton®, Aston®, Fairmont®, Hilton®, and Loews®, as well as leading independent management companies including Sage Hospitality, The Kessler Collection, Urgo Hotels & Resorts, and Davidson Hotels & Resorts.
|
Xenia Hotels & Resorts, Inc. Consolidated Balance Sheets As of June 30, 2017 and December 31, 2016 ($ 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, |
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 |
$ |
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 |
$ |
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 |
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 |
||
|
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 |
||
|
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 |
Rate(1) |
Initial |
Fully Extended Date(2) |
Outstanding as of |
|||||||
|
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 |
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 |
2.74% |
February 2021 |
February 2021 |
175,000 |
||||||
|
Term Loan $125M |
Partially |
3.53% |
October 2022 |
October 2022 |
125,000 |
||||||
|
Total Debt, net of mortgage loan discounts and |
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 |
Number of |
Number of |
||
|
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) |
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|
First Quarter |
Second Quarter |
Third Quarter |
Fourth Quarter |
Full Year |
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|
2017 |
2017 |
2017 |
2017 |
2017 |
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|
Occupancy |
74.4 |
% |
78.8 |
% |
— |
— |
— |
|||||||||||||
|
ADR |
$ |
205.33 |
$ |
210.89 |
— |
— |
— |
|||||||||||||
|
RevPAR |
$ |
152.78 |
$ |
166.18 |
— |
— |
— |
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|
Hotel Revenues |
$ |
232,249 |
$ |
248,125 |
— |
— |
— |
|||||||||||||
|
Hotel EBITDA |
$ |
70,068 |
$ |
84,834 |
— |
— |
— |
|||||||||||||
|
Hotel EBITDA Margin |
30.2 |
% |
34.2 |
% |
— |
— |
— |
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|
First Quarter |
Second Quarter |
Third Quarter |
Fourth Quarter |
Full Year |
||||||||||||||||
|
2016 |
2016 |
2016 |
2016 |
2016 |
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|
Occupancy |
73.2 |
% |
80.0 |
% |
78.5 |
% |
71.3 |
% |
75.7 |
% |
||||||||||
|
ADR |
$ |
202.82 |
$ |
210.64 |
$ |
201.43 |
$ |
200.50 |
$ |
203.96 |
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|
RevPAR |
$ |
148.45 |
$ |
168.51 |
$ |
158.20 |
$ |
142.88 |
$ |
154.49 |
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|
Hotel Revenues |
$ |
226,628 |
$ |
250,587 |
$ |
229,574 |
$ |
222,042 |
$ |
928,831 |
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|
Hotel EBITDA |
$ |
65,813 |
$ |
86,483 |
$ |
70,900 |
$ |
65,854 |
$ |
289,050 |
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|
Hotel EBITDA Margin |
29.0 |
% |
34.5 |
% |
30.9 |
% |
29.7 |
% |
31.1 |
% |
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|
(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. |