Xenia Hotels & Resorts Reports Second Quarter 2015 Results

Aug 13, 2015, 07:00 ET from Xenia Hotels & Resorts, Inc.

ORLANDO, Fla., Aug. 13, 2015 /PRNewswire/ -- Xenia Hotels & Resorts, Inc. (NYSE: XHR) ("Xenia" or the "Company") today announced results for the second quarter ended June 30, 2015. The Company's results include the following:

Three Months Ended June 30,

Six Months Ended June 30,

2015

2014

Change

2015

2014

Change

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

Same-Property Number of Hotels

46

46

46

46

Same-Property Number of Rooms

12,643

12,636

12,643

12,636

Same-Property Occupancy

79.7

%

80.1

%

(0.5)

%

76.8

%

77.8

%

(1.3)

%

Same-Property Average Daily Rate Adjusted for USALI(1)

$

188.43

$

179.15

5.2

%

$

185.45

$

175.78

5.5

%

Same-Property RevPAR Adjusted for USALI (1)

$

150.19

$

143.44

4.7

%

$

142.44

$

136.73

4.2

%

Same-Property Unadjusted Average Daily Rate (2)

$

188.43

$

180.52

4.4

%

$

185.45

$

177.25

4.6

%

Same-Property Unadjusted RevPAR(2)

$

150.19

$

144.54

3.9

%

$

142.44

$

137.87

3.3

%

Same-Property Hotel EBITDA(3)

$

85,634

$

80,895

5.9

%

$

155,512

$

145,928

6.6

%

Same Property Hotel EBITDA Margin(3)

34.1

%

33.4

%

70

bps

32.5

%

31.6

%

90

bps

Adjusted EBITDA(3)

$

80,174

$

72,479

10.6

%

$

144,902

$

128,634

12.6

%

Adjusted FFO(3)

$

63,760

$

57,128

11.6

%

$

114,547

$

98,180

16.7

%

Adjusted FFO per diluted share(3)

$

0.57

$

0.50

14.0

%

1.02

$

0.87

17.2

%

Net income attributable to common stockholders(4)

$

23,739

$

22,884

3.7

%

$

8,869

$

25,206

(64.8)

%

Net income attributable to common stockholders per diluted share(4)

$

0.21

$

0.20

5.0

%

$

0.08

$

0.22

(63.6)

%

 

(1)

Average Daily Rate ("ADR") and RevPAR for the three and six months ended June 30, 2014 are presented after adjusting for the adoption of the Eleventh Revised Edition of the Uniform System of Accounts for the Lodging Industry ("USALI") as provided by our operators.

(2)

ADR and RevPAR are unadjusted for changes resulting from the adoption of USALI.

(3)

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 Adjusted FFO per share. EBITDA, Adjusted EBITDA, FFO, Adjusted FFO, per share and hotel EBITDA are non-GAAP financial measures.

(4)

Includes $1.2 million and $26.5 million of one-time general and administrative expenses for three months and six months ended June 30, 2015, respectively. See accompanying notes to the combined consolidated financial statements in the Company's Form 10-Q for more detail.

"Same-Property" results include the results for all hotels owned as of June 30, 2015, except for the two hotels under development, include periods prior to the Company's ownership of the Aston Waikiki Beach Resort, and excludes the results of operations of the Crowne Plaza Charleston, Doubletree Suites Atlanta Galleria, and Holiday Inn Secaucus, all of which we disposed of in 2014. Results also include renovation and remediation disruption, and excludes the NOI guaranty payment at the Andaz San Diego.

The Company's financial statements prior to February 3, 2015 have been "carved out" of InvenTrust Properties Corp.'s ("InvenTrust") financial statements and reflect significant assumptions and allocations from those financial statements, such as allocations of corporate debt, shared services functions, employee-related costs and other corporate overhead. Based on these presentation matters, these financial statements may not be comparable to prior periods.

Second Quarter 2015 Highlights

  • Same-Property RevPAR: Same-Property RevPAR, as adjusted by our operators for USALI, increased 4.7% from the second quarter of 2014 to $150.19, driven by a 5.2% ADR increase slightly offset by a 0.5% decrease in occupancy. Unadjusted Same-Property RevPAR increased 3.9%. The Company estimates that RevPAR growth was negatively impacted by approximately 60 bps year-over-year due to the renovation disruption at the Marriott San Francisco Airport Waterfront.
  • Same-Property Hotel EBITDA Margin: Same-Property Hotel EBITDA margin was 34.1%, an increase of 70 basis points from the same period in 2014.
  • Adjusted EBITDA: Adjusted EBITDA grew $7.7 million to $80.2 million, an increase of 10.6% over the second quarter of 2014.
  • Adjusted FFO: Adjusted FFO available to common stockholders increased to $0.57 per diluted share compared to $0.50 per diluted share for the second quarter of 2014, representing an increase of 14.0%.
  • Dividends: The Company declared its second quarter dividend of $0.23 per share on June 4, 2015. The dividend was paid on July 15, 2015.

"We are pleased with our second quarter results as we were able to significantly increase our Adjusted EBITDA and Adjusted FFO," said Marcel Verbaas, President and Chief Executive Officer of Xenia. "The fact that our adjusted same-property ADR and RevPAR increased by 5.2% and 4.7%, respectively, despite headwinds in the Houston market and the disruption from our Marriott San Francisco Airport Waterfront renovation, is reflective of the overall strength of our portfolio. Lodging market fundamentals remain strong and we are anticipating continued positive results for the remainder of the year."

Year to Date Results

For the six months ended June 30, 2015, Same-Property RevPAR as provided by our operators adjusted for USALI increased 4.2% from the first half of 2014 to $142.44 with ADR growth of 5.5% offset by a slight decline in occupancy of 1.3%. Unadjusted Same-Property RevPAR increased 3.3%. The Company's Same-Property Hotel EBITDA Margin was 32.5%, which improved 90 basis points compared to the same period in prior year. The Company's Adjusted EBITDA and Adjusted FFO per diluted share increased 12.6% and 17.2%, respectively, during the first half of 2015 as compared to the same period in 2014. The Company estimates that RevPAR growth was negatively impacted by approximately 155 bps year-over-year due to the renovation disruption at the Marriott San Francisco Airport Waterfront, the Aston Waikiki Beach Resort, the Andaz Napa and the Hyatt Regency Santa Clara.

Acquisitions

Subsequent to the end of the quarter, the Company completed the acquisition of three high-quality lifestyle boutique hotels for a combined purchase price of $245 million. The 84-room RiverPlace Hotel located in downtown Portland, the 97-room Canary Hotel located in downtown Santa Barbara, and the 230-room Hotel Palomar located in downtown Philadelphia will all continue to be managed by Kimpton Hotels & Resorts.

Additionally, in August 2015 the Company announced it had entered into a purchase agreement to acquire the Hotel Commonwealth in Boston for a purchase price of $136 million. The transaction is subject to customary closing conditions and the completion of the current hotel expansion, including a new 96-room wing with 7,000 square feet of additional meeting space, and is expected to close early in 2016. The hotel will continue to be managed by Sage Hospitality.

"We are very excited to have added the three Kimpton hotels and look forward to adding the Hotel Commonwealth upon completion of its expansion project" added Mr. Verbaas. "These acquisitions exemplify the continued execution of our strategy to own a diverse portfolio of high quality assets in top lodging markets and key leisure destinations. We are looking forward to working with Kimpton and Sage to build on the already strong results at these outstanding lifestyle boutique hotels."

Hotels Under Development

The Grand Bohemian Charleston, a 50-room Autograph Collection hotel located in Charleston, South Carolina in which the Company owns a 75% interest, is expected to open in the third quarter of 2015. Total costs to develop the hotel are estimated to be approximately $31 million, of which $28 million has been incurred to date.

The Grand Bohemian Mountain Brook, a 100-room Autograph Collection hotel located in an upscale suburb of Birmingham, Alabama in which the Company owns a 75% interest, is expected to open in the fourth quarter of 2015. Total costs to develop the hotel are estimated to be approximately $44 million, of which $34.5 million has been incurred to date.

Capital Investments

The Company invested $11.7 million of capital in its hotels during the second quarter (excluding expenditures to remediate the Napa earthquake damage) and completed its $18 million renovation of the Marriott San Francisco Airport Waterfront renovation, which included the addition of three guest rooms to the hotel. An additional room was also recently added at the Hyatt Regency Santa Clara and the earthquake remediation at the two Napa hotels has been completed at a total cost of approximately $9.5 million, most of which is related to the Andaz Napa. We will begin a comprehensive renovation of the guest rooms at the Napa Valley Marriott Hotel & Spa in December, which is expected to be completed in the first quarter of 2016.

Balance Sheet

During the quarter, the Company paid off the $55.2 million mortgage encumbering the Hilton Garden Inn Washington D.C. Downtown. As of June 30, 2015, the Company had total outstanding debt of $1.1 billion, with no outstanding borrowings on its $400 million senior unsecured credit facility and a weighted average interest rate of 3.93%. In connection with the acquisition of the three hotels in July 2015, the Company borrowed $127 million on its revolving line of credit. Total net debt to trailing 12 month pro forma Corporate EBITDA (as defined in the Company's senior unsecured credit facility) was 3.5x as of June 30, 2015. As of June 30, 2015, the Company had $197 million of cash and cash equivalents.

2015 Outlook and Guidance

The Company has updated its outlook for 2015, incorporating the recent acquisitions of the RiverPlace Hotel, the Canary Hotel and the Hotel Palomar which are expected to generate EBITDA of $7 million to $8 million for the remainder of 2015. Additionally the Company's outlook for 2015 is based on the current economic environment, incorporates all expected renovation disruption, assumes no further acquisitions or dispositions, includes the completion of its two development properties, and takes into consideration its second quarter performance.

The Company's 2015 capital expenditure range includes its renovation projects, but excludes earthquake damage remediation at the Napa hotels. The Company's financial expectations for 2015 are as follows:

Revised Guidance

Low End

High End

($ in millions)

RevPAR growth adjusted for USALI

5.0%

6.0%

Adjusted EBITDA

$288.0

$297.0

Adjusted FFO

$227.0

$236.0

Capital Expenditures

$45.0

$55.0

Quarter 2015 Earnings Call

The Company will conduct its quarterly conference call on Thursday, August 13, 2015 at 11:00 AM eastern time. To participate in the conference call, please dial (855) 656-0921. Additionally, a live webcast of the conference call will be available through the Company's website, www.xeniareit.com. A replay of the conference call will be archived and available online through the Investor Relations section of the Company's website for 90 days.

About Xenia Hotels & Resorts, Inc.

Xenia Hotels & Resorts, Inc. is a self-advised and self-administered REIT that invests primarily in premium full service, lifestyle and urban upscale 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 49 hotels, comprising 13,054 rooms, across 20 states and the District of Columbia, and has a majority interest in two hotels under development. Xenia's hotels are primarily operated by industry leaders such as Marriott®, Hilton®, Hyatt®, Starwood®, Kimpton®, Aston®, Fairmont® and Loews®, as well as leading independent management companies, under various nationally recognized brands. For more information on Xenia's business, refer to the Company website at www.xeniareit.com.

This press release, together with other statements and information publicly disseminated by the Company, contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The Company intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and includes this statement for purposes of complying with these safe harbor provisions. Forward-looking statements are not historical facts but are based on certain assumptions of management and describe the Company's future plans, strategies and expectations. Forward-looking statements are generally identifiable by use of words such as "may," "could," "expect," "intend," "plan," "seek," "anticipate," "believe," "estimate," "guidance," "predict," "potential," "continue," "likely," "will," "would," "illustrative," references to "outlook," and variations of these terms and similar expressions, or the negative of these terms or similar expressions. Forward-looking statements in this press release include, among others, statements about our plans, strategies, the outlook for RevPAR, Adjusted EBITDA, Adjusted FFO, capital expenditures and derivations thereof, financial performance, prospects or future events. Such forward-looking statements are necessarily based upon estimates and assumptions that, while considered reasonable by us and our management, are inherently uncertain. As a result, our actual results, performance or achievements may differ materially from those expressed or implied by these forward-looking statements, which are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors that are, in some cases, beyond the Company's control and which could materially affect actual results, performances or achievements. Factors that may cause actual results to differ materially from current expectations include, but are not limited to, (i) the Company's dependence on third-party managers of its hotels, including its inability to implement strategic business decisions directly, (ii) risks associated with the hotel industry, including competition, increases in wages, energy costs and other operating costs, actual or threatened terrorist attacks, downturns in general and local economic conditions and cancellation of or delays in the completion of anticipated demand generators, (iii) the availability and terms of financing and capital and the general volatility of securities markets, (iv) risks associated with the real estate industry, including environmental contamination and costs of complying with the Americans with Disabilities Act and similar laws, (v) interest rate increases, (vi) the possible failure of the Company to qualify as a REIT and the risk of changes in laws affecting REITs, (vii) the possibility of uninsured losses, (viii) risks associated with redevelopment and repositioning projects, including delays and cost overruns and (ix) the risk factors discussed in the Company's Annual Report on Form 10-K as updated in its Quarterly Reports. Accordingly, there is no assurance that the Company's expectations will be realized. We caution you not to place undue reliance on any forward-looking statements, which are made only as of the date of this press release. We do not undertake or assume any obligation to update publicly any of these forward-looking statements to reflect actual results, new information or future events, changes in assumptions or changes in other factors affecting forward-looking statements, except to the extent required by applicable law. If we update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements.

For further information about the Company's business and financial results, please refer to the "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Risk Factors" sections of the Company's SEC filings, including, but not limited to, its Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, copies of which may be obtained at the Investor Relations section of the Company's website at www.xeniareit.com.

All information in this press release is as of the date of its release. The Company undertakes no duty to update the statements in this press release to conform the statements to actual results or changes in the Company's expectations.

Contact:

Andrew Welch, Chief Financial Officer, Xenia Hotels & Resorts, (407) 317-6950

For additional information or to receive press releases via email, please visit our website at www.xeniareit.com.

 

 

Xenia Hotels & Resorts, Inc.

Combined Condensed Consolidated Balance Sheet

As of June 30, 2015 and December 31, 2014

($ amounts in thousands, except per share data, and unaudited)

June 30, 2015

December 31, 2014

Assets:

Investment properties:

Land

$

337,093

$

338,313

Building and other improvements

2,739,186

2,710,647

Construction in progress

62,599

39,736

     Total

$

3,138,878

$

3,088,696

Less: accumulated depreciation

(576,406)

(505,986)

Net investment properties

$

2,562,472

$

2,582,710

Cash and cash equivalents

197,300

163,053

Restricted cash and escrows

85,925

87,296

Accounts and rents receivable, net of allowance of $286 and $251, respectively

31,283

26,504

Intangible assets, net of accumulated amortization of $15,562 and $15,143, respectively

62,448

64,541

Deferred tax asset

1,883

2,393

Other assets

48,098

29,254

Total assets (including $63,292 and $41,054, respectively, related to consolidated variable interest entities)

$

2,989,409

$

2,955,751

Liabilities

Debt

1,127,187

1,295,048

Accounts payable and accrued expenses

81,576

88,356

Distributions payable

25,684

Other liabilities

51,190

51,426

Total liabilities (including $41,476 and $27,679, respectively, related to consolidated variable interest entities)

$

1,285,637

$

1,434,830

Commitments and contingencies

Stockholders' Equity

Preferred stock, $0.01 par value, (liquidation preference of $1,000) 50,000,000 shares authorized, 125 shares issued and outstanding as of June 30, 2015 and 0 shares authorized,  issued or outstanding as of December 31, 2014

$

Common stock, $0.01 par value, 500,000,000 shares authorized, 111,671,372 issued and outstanding as of June 30, 2015 and 100,000 shares authorized, 1,000 issued and outstanding as of December 31, 2014

1,117

Additional paid in capital

1,992,266

1,781,427

Distributions in excess of retained earnings

(297,330)

(264,161)

Total Company stockholders' equity

$

1,696,053

$

1,517,266

Non-controlling interests

7,719

3,655

Total equity

$

1,703,772

$

1,520,921

Total liabilities and equity

$

2,989,409

$

2,955,751

See accompanying notes to the combined condensed consolidated financial statements in the Company's Form 10-Q.

 

 

Xenia Hotels & Resorts, Inc.

Combined Condensed Consolidated Statements of Operations

For the Three and Six Months Ended June 30, 2015 and 2014

($ amounts in thousands, except per share data, and unaudited)

Three Months Ended June 30,

Six Months Ended June 30,

2015

2014

2015

2014

Revenues:

   Room revenues

$

172,792

$

170,257

$

325,882

$

316,740

   Food and beverage revenues

64,954

61,727

127,207

119,339

   Other revenues

13,477

15,128

26,007

29,559

Total revenues

$

251,223

$

247,112

$

479,096

$

465,638

Expenses:

   Room expenses

37,348

36,478

72,534

69,622

   Food and beverage expenses

41,311

40,632

81,498

79,749

   Other direct expenses

4,385

8,317

8,651

16,474

   Other indirect expenses

56,226

53,497

109,484

103,809

   Management and franchise fees

13,618

14,284

25,070

26,590

Total hotel operating expenses

152,888

153,208

297,237

296,244

   Depreciation and amortization

35,889

36,512

72,276

70,396

   Real estate taxes, personal property taxes and insurance

11,805

10,745

23,999

21,563

   Ground lease expense

1,322

1,484

2,597

2,538

   General and administrative expenses

6,947

8,297

13,992

13,756

   Business management fees

1,474

   Acquisition transaction costs

856

10

885

1,130

   Provision for asset impairment

2,998

   Separation and other start-up related expenses

1,165

26,461

Total expenses

$

210,872

$

210,256

$

437,447

$

410,099

Operating income

$

40,351

$

36,856

$

41,649

$

55,539

   Gain on sale of investment property

962

962

   Other income (expense)

(148)

(1,070)

2,434

(945)

   Interest expense

(13,048)

(14,710)

(26,230)

(29,158)

   Equity in (losses) and gain on consolidation of unconsolidated entity, net

(32)

4,216

Income before income taxes

$

27,155

$

22,006

$

17,853

$

30,614

   Income tax expense

(3,405)

(2,006)

(8,484)

(3,924)

Net income from continuing operations

$

23,750

$

20,000

$

9,369

$

26,690

Net income (loss) from discontinued operations

2,884

(489)

(1,484)

Net income

$

23,750

$

22,884

$

8,880

$

25,206

   Net income attributable to non-controlling interests

(3)

(3)

Net income attributable to the Company

$

23,747

$

22,884

$

8,877

$

25,206

   Distributions to preferred stockholders

(8)

(8)

Net income attributable to common stockholders

$

23,739

$

22,884

$

8,869

$

25,206

Basic earnings per share

   Income from continuing operations available to common stockholders

$

0.21

$

0.18

$

0.08

$

0.23

   Income (loss) from discontinued operations available to common stockholders

$

$

0.02

$

$

(0.01)

   Net income per share available to common stockholders (basic)

$

0.21

$

0.20

$

0.08

$

0.22

Weighted average number of common shares (basic)

111,676,096

113,397,997

112,316,767

113,397,997

 

 

Three Months Ended June 30,

Six Months Ended June 30,

2015

2014

2015

2014

Diluted earnings per share

Income from continuing operations available to common stockholders

$

0.21

$

0.18

$

0.08

$

0.23

Income (loss) from discontinued operations available to common stockholders

$

$

0.02

$

$

(0.01)

Net income per share available to common stockholders (diluted)

$

0.21

$

0.20

$

0.08

$

0.22

Weighted average number of common shares (diluted)

111,914,085

113,397,997

112,460,712

113,397,997

See accompanying notes to the combined condensed consolidated financial statements in the Company's Form 10-Q.

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, FFO and Adjusted FFO. 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. 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 further adjusts EBITDA for certain additional items such as hotel property acquisitions and pursuit costs, amortization of share-based compensation, equity investment adjustments, the cumulative effect of changes in accounting principles, impairment of real estate assets, operating results from properties sold 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.

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 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, operating results from properties that are sold 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.

 

 

Xenia Hotels & Resorts, Inc.

Reconciliation of Net Income to EBITDA and Adjusted EBITDA

For the Three and Six Months Ended June 30, 2015 and 2014

($ amounts in thousands and unaudited)

Three Months Ended June 30,

Six Months Ended June 30,

2015

2014

2015

2014

Net income attributable to the Company

$

23,747

$

22,884

$

8,877

$

25,206

Adjustments:

Interest expense

13,048

14,710

26,230

29,158

Interest expense from unconsolidated entity

34

Interest expense from discontinued operations

7,947

15,831

Income tax expense

3,405

2,006

8,484

3,924

Depreciation and amortization related to investment properties

35,889

36,512

72,276

70,396

Depreciation and amortization related to investment in unconsolidated entity

102

Depreciation and amortization of discontinued operations

12,702

25,305

EBITDA

$

76,089

$

96,761

$

115,867

$

169,956

Reconciliation to Adjusted EBITDA

Impairment of investment properties

2,998

Gain on sale of investment property

(962)

(962)

Loss on extinguishment of debt

178

1,081

283

1,081

Gain on consolidation of investment in unconsolidated entity

(4,481)

Acquisition and pursuit costs

856

10

885

1,130

Amortization of share-based compensation expense

1,774

3,448

Gain from excess property insurance recovery

(276)

Business interruption proceeds net of hotel related expenses(1)

154

(2,170)

EBITDA adjustment for three hotels sold in 2014 (2)

(42)

(878)

(85)

(1,436)

EBITDA adjustment for Suburban Select Service Portfolio (3)

(23,533)

489

(39,652)

Other non-recurring expenses (4)

1,165

26,461

Adjusted EBITDA

$

80,174

$

72,479

$

144,902

$

128,634

 

(1)

The business interruption insurance recovery for 2014 for the six months ended June 30, 2015 was $3.7 million, which is net of $1.5 million of hotel related expenses, attributable to those hotels impacted by the August 2014 Napa Earthquake.

(2)

The following three hotels were disposed of in 2014: Crowne Plaza Charleston, Doubletree Suites Atlanta Galleria, and Holiday Inn Secaucus.

(3)

On November 17, 2014, InvenTrust sold the Suburban Select Service Portfolio for an aggregate gross disposition price of $1.1 billion. Prior to the sale transaction, the Company oversaw the Suburban Select Service Portfolio. This sale reflected a strategic shift and had a major impact on our consolidated financial statements; therefore the operations of these 52 hotels are reflected as discontinued operations on the combined condensed consolidated statements of operations for the three and six months ended June 30, 2015 and 2014.

(4)

For the three and six months June 30, 2015, other non-recurring expenses include one-time costs related to the listing of our common stock on the NYSE, such as legal, audit fees and other professional fees, costs related to the Tender Offer described in Note 10 in the combined condensed consolidated financial statements in the Company's Form 10-Q as of June 30, 2015 and 2014, and other start-up costs incurred while transitioning to a stand-alone, publicly-traded company.

 

 

Xenia Hotels & Resorts, Inc.

Reconciliation of Net Income to FFO and Adjusted FFO

For the Three and Six Months Ended June 30, 2015 and 2014

($ amounts in thousands and unaudited)

Three Months Ended June 30,

Six Months Ended June 30,

2015

2014

2015

2014

Net income attributable to the Company

$

23,747

$

22,884

8,877

25,206

Adjustments:

Depreciation and amortization related to investment properties

35,889

36,512

72,276

70,396

Depreciation and amortization related to investment in unconsolidated entity

102

Depreciation and amortization of discontinued operations

12,702

25,305

Impairment of investment property

2,998

Gain on sale of investment property

(962)

(962)

Gain on consolidation of investment in unconsolidated entity

(4,481)

FFO

$

59,636

$

71,136

$

81,153

$

118,564

Distribution to preferred shareholders

(8)

(8)

$

FFO available to common share and unit holders

$

59,628

$

71,136

$

81,145

$

118,564

Reconciliation to Adjusted FFO

Loss on extinguishment of debt

$

178

$

1,081

$

283

$

1,081

Acquisition and pursuit costs

856

10

885

1,130

Loan related costs (1)

1,022

1,264

2,191

2,414

Amortization of share-based compensation expense

1,774

3,448

Income tax related to restructuring (2)

(975)

1,900

Business interruption proceeds net of hotel related expenses (3)

154

(2,170)

Less FFO adjustment for three hotels sold in 2014 (4)

(42)

(777)

(85)

(1,188)

Less FFO adjustment for Suburban Select Service Portfolio (5)

(15,586)

489

(23,821)

Other non-recurring expenses (6)

1,165

26,461

Adjusted FFO

$

63,760

$

57,128

$

114,547

$

98,180

 

(1)

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

(2)

For the six months ended June 30, 2015, the Company recognized income tax expense of $8.5 million, of which $1.9 million related to a gain on the transfer of a hotel between legal entities resulting in a more optimal structure in connection with the Company's intention to elect to be taxed as a REIT. During the three months ended June 30, 2015, the Company revised its estimated tax for the restructuring which resulted in a reduction of the related expense of $1.0 million.

(3)

The business interruption insurance recovery for the six months ended June 30, 2015 was $3.7 million, which was net of $1.5 million of hotel related expenses, attributable to those hotels impacted by the August 2014 Napa Earthquake.

(4)

The following three hotels were disposed of in 2014: Crowne Plaza Charleston, Doubletree Suites Atlanta Galleria, and Holiday Inn Secaucus.

(5)

On November 17, 2014, InvenTrust sold the Suburban Select Service Portfolio for an aggregate gross disposition price of $1.1 billion. Prior to the sale transaction, the Company oversaw the Suburban Select Service Portfolio. This sale reflected a strategic shift and had a major impact on our consolidated financial statements; therefore the operations of these 52 hotels are reflected as discontinued operations on the combined condensed consolidated statements of operations for the three and six months ended June 30, 2015 and 2014.

(6)

For the three and six months ended June 30, 2015, other non-recurring expenses include one-time costs related to the listing of our common stock on the NYSE, such as legal, audit fees and other professional fees, costs related to the Tender Offer described in Note 10 in the combined condensed consolidated financial statements in the Company's Form 10-Q as of June 30, 2015 and 2014, and other start-up costs incurred while transitioning to a stand-alone, publicly-traded company.

 

 

Xenia Hotels & Resorts, Inc.

Debt Summary as of June 30, 2015

($ in thousands)

Rate Type (1)

Rate

Fully Extended Maturity Rate (2)

Outstanding as of June 30, 2015

Mortgage Loans

Hilton Garden Inn Chicago North Shore / Evanston

 Fixed

5.94%

June 2016

$

18,627

Grand Bohemian Hotel Orlando

 Fixed

5.82%

October 2016

49,832

Marriott Woodlands Waterway Hotel & Convention Center

 Fixed

4.50%

December 2016

73,337

Renaissance Atlanta Waverly Hotel & Convention Center

 Fixed

5.50%

December 2016

97,000

Renaissance Austin Hotel

 Fixed

5.51%

December 2016

83,000

Hyatt Regency Orange County

 Fixed

5.25%

January 2017

62,346

Residence Inn Boston Cambridge

 Fixed

5.50%

February 2017

30,466

Courtyard Pittsburgh Downtown

 Fixed

4.00%

March 2017

22,940

Hampton Inn & Suites Denver Downtown

 Fixed

5.25%

March 2017

13,478

Marriott Griffin Gate Resort & Spa

 Variable

2.69%

March 2017

34,738

Marriott San Francisco Airport Waterfront

 Fixed

5.40%

April 2017

53,243

Courtyard Birmingham Downtown at UAB

 Fixed

5.25%

April 2017

13,503

Hilton University of Florida Conference Center Gainesville

 Fixed

6.46%

February 2018

27,775

Residence Inn Denver City Center

 Variable

2.44%

April 2018

45,210

Bohemian Hotel Savannah Riverfront

 Variable

2.54%

December 2018

27,480

Fairmont Dallas

 Variable

2.19%

April 2019

56,559

Andaz Savannah

 Variable

2.19%

January 2020

21,500

Hotel Monaco Denver

 Variable

2.29%

January 2020

41,000

Andaz Napa

 Variable

2.29%

March 2020

30,500

Marriott Dallas City Center

 Variable

2.44%

May 2020

40,090

Marriott Charleston Town Center

 Fixed

3.85%

July 2020

17,108

Hyatt Regency Santa Clara

 Variable

2.19%

September 2020

60,200

Grand Bohemian Charleston - Kessler JV (3)

 Variable

2.69%

November 2020

17,091

Loews New Orleans Hotel

 Variable

2.54%

November 2020

37,500

Grand Bohemian Mountain Brook - Kessler JV (4)

 Variable

2.69%

December 2020

17,614

Hotel Monaco Chicago

 Variable

2.44%

January 2021

26,000

Westin Galleria & Oaks Houston

 Variable

3.34%

May 2021

110,000

Total Mortgage Loans (5)

3.93%

$

1,128,137

Mortgage Loan Premium / (Discounts) (6)

(950)

Line of Credit

Total Debt

$

1,127,187

 

(1)

Floating index is one month LIBOR. The Company does not have any hedging instruments in place.

(2)

Loan extension is at the discretion of Xenia. The majority of loans require minimum debt service coverage ratio and/or loan to value maximums and payment of extension fee.

(3)

The project construction loan has a total draw capacity of $20.0 million.

(4)

The project construction loan has a total draw capacity of $26.3 million.

(5)

Weighted average interest rate.

(6)

Loan premiums/(discounts) on assumed mortgages recorded in purchase accounting.

 

 

Xenia Hotels & Resorts, Inc.

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

For the Three and Six Months Ended June 30, 2015 and 2014

($ in thousands and unaudited)

Three Months Ended June 30,

Six Months Ended June 30,

2015

2014

Change

2015

2014

Change

Revenues:

Room revenues

$

172,792

$

166,204

4.0

%

$

325,882

$

315,329

3.3

%

Food and beverage revenues

64,954

61,036

6.4

%

127,207

117,987

7.8

%

Other revenues

13,479

15,037

(10.4)

%

25,875

28,924

(10.5)

%

Total revenues

$

251,225

$

242,277

3.7

%

$

478,964

$

462,240

3.6

%

Expenses:

Room expenses

$

37,348

$

35,507

5.2

%

$

72,536

$

69,445

4.5

%

Food and beverage expenses

41,311

39,993

3.3

%

81,496

78,473

3.9

%

Other direct expenses

4,455

7,326

(39.2)

%

8,633

14,693

(41.2)

%

Other indirect expenses

55,716

52,852

5.4

%

109,121

103,810

5.1

%

Management and franchise fees

13,618

14,022

(2.9)

%

25,071

26,219

(4.4)

%

Real estate taxes, personal property taxes and insurance

11,821

10,480

12.8

%

23,998

21,248

12.9

%

Ground lease expense

1,322

1,202

10.0

%

2,597

2,424

7.1

%

Total hotel operating expenses

$

165,591

$

161,382

2.6

%

$

323,452

$

316,312

2.3

%

Hotel EBITDA

$

85,634

$

80,895

5.9

%

$

155,512

$

145,928

6.6

%

Hotel EBITDA Margin

34.1

%

33.4

%

70

bps

32.5

%

31.6

%

90

bps

 

(1)

"Same-Property" results include the results for all hotels owned as of June 30, 2015, except for the two hotels under development, include periods prior to the Company's ownership of the Aston Waikiki Beach Resort, and exclude the results of operations of the Crowne Plaza Charleston, Doubletree Suites Atlanta Galleria, and Holiday Inn Secaucus, all of which were disposed of in 2014. Results also include renovation and remediation disruption, and exclude the NOI guaranty payment at the Andaz San Diego.

 

 

Xenia Hotels & Resorts, Inc.

Same-Property(1) Hotel Statistical Data by Geography

For the Three and Six Months Ended June 30, 2015 and 2014

(unaudited)

As of June 30, 2015

Region

Number of Hotels

Number of Rooms

South Atlantic

(Includes Florida, Georgia, Maryland, Virginia, West Virginia and Washington, D.C.)

15

3,269

West South Central

(Includes Louisiana and Texas)

9

3,339

Pacific

(Includes California and Hawaii)

7

3,066

Mountain

(Includes Arizona, Colorado, and Utah)

5

1,016

Other

(Includes Alabama, Illinois, Iowa, Kentucky, Massachusetts, Missouri and Pennsylvania)

10

1,953

Total

46

12,643

 

Hotel Statistics Adjusted for USALI

Three Months Ended

Three Months Ended

June 30, 2015

June 30, 2014

% Change

Occupancy

ADR

RevPAR

Occupancy

ADR

RevPAR

RevPAR

Region

South Atlantic

81.0

%

$

186.67

$

151.26

81.3

%

$

176.58

$

143.58

5.3

%

West South Central

74.6

%

$

190.24

$

141.92

73.9

%

$

189.25

$

139.95

1.4

%

Pacific

82.3

%

$

196.14

$

161.36

84.2

%

$

180.60

$

151.99

6.2

%

Mountain

83.0

%

$

174.73

$

145.06

82.4

%

$

165.28

$

136.21

6.5

%

Other

80.5

%

$

183.50

$

147.67

80.8

%

$

172.70

$

139.57

5.8

%

Total

79.7

%

$

188.43

$

150.19

80.1

%

$

179.15

$

143.44

4.7

%

 

Six Months Ended

Six Months Ended

June 30, 2015

June 30, 2014

% Change

Occupancy

ADR

RevPAR

Occupancy

ADR

RevPAR

RevPAR

Region

South Atlantic

79.2

%

$

183.33

$

145.25

79.3

%

$

173.73

$

137.76

5.4

%

West South Central

75.0

%

$

192.47

$

144.34

75.2

%

$

188.29

$

141.65

1.9

%

Pacific

76.9

%

$

194.07

$

149.15

81.8

%

$

178.22

$

145.73

2.3

%

Mountain

81.9

%

$

176.50

$

144.51

81.4

%

$

165.55

$

134.71

7.3

%

Other

73.1

%

$

167.98

$

122.88

71.5

%

$

158.75

$

113.52

8.2

%

Total

76.8

%

$

185.45

$

142.44

77.8

%

$

175.78

$

136.73

4.2

%

 

 

Unadjusted Hotel Statistics

Three Months Ended

Three Months Ended

June 30, 2015

June 30, 2014

% Change

Occupancy

ADR

RevPAR

Occupancy

ADR

RevPAR

RevPAR

Region

South Atlantic

81.0

%

$

186.67

$

151.26

81.3

%

$

177.46

$

144.29

4.8

%

West South Central

74.6

%

$

190.24

$

141.92

73.9

%

$

189.25

$

139.95

1.4

%

Pacific

82.3

%

$

196.14

$

161.36

84.2

%

$

185.08

$

155.77

3.6

%

Mountain

83.0

%

$

174.73

$

145.06

82.4

%

$

165.28

$

136.21

6.5

%

Other

80.5

%

$

183.50

$

147.67

80.8

%

$

172.69

$

139.56

5.8

%

Total

79.7

%

$

188.43

$

150.19

80.1

%

$

180.52

$

144.54

3.9

%

Six Months Ended

Six Months Ended

June 30, 2015

June 30, 2014

% Change

Occupancy

ADR

RevPAR

Occupancy

ADR

RevPAR

RevPAR

Region

South Atlantic

79.2

%

$

183.33

$

145.25

79.3

%

$

174.56

$

138.42

4.9

%

West South Central

75.0

%

$

192.47

$

144.34

75.2

%

$

188.29

$

141.65

1.9

%

Pacific

76.9

%

$

194.07

$

149.15

81.8

%

$

183.16

$

149.77

(0.4)

%

Mountain

81.9

%

$

176.50

$

144.51

81.4

%

$

165.55

$

134.71

7.3

%

Other

73.1

%

$

167.98

$

122.88

71.5

%

$

158.75

$

113.52

8.2

%

Total

76.8

%

$

185.45

$

142.44

77.8

%

$

177.25

$

137.87

3.3

%

 

 

(1)

"Same-Property" results include the results for all hotels owned as of June 30, 2015, except for the two hotels under development, include periods prior to the Company's ownership of the Aston Waikiki Beach Resort, and exclude the results of operations of the Crowne Plaza Charleston, Doubletree Suites Atlanta Galleria, and Holiday Inn Secaucus, all of which were disposed of in 2014. Results also include renovation and remediation disruption, and exclude the NOI guaranty payment at the Andaz San Diego.

 

 

Xenia Hotels & Resorts, Inc.

Historical Same-Property(1) Hotel EBITDA by Property

For the Year Ended December 31, 2014

($ in millions and unaudited)

Year Ended December 31, 2014

Andaz Napa

$

2,261

Andaz San Diego

3,338

Andaz Savannah

3,961

Aston Waikiki Beach Hotel

17,838

Bohemian Hotel Celebration

1,966

Bohemian Hotel Savannah Riverfront

4,366

Courtyard Birmingham Downtown at UAB

2,345

Courtyard Fort Worth Downtown/Blackstone

3,385

Courtyard Kansas City Country Club Plaza

2,437

Courtyard Pittsburgh Downtown

4,413

DoubleTree by Hilton Hotel Washington DC

4,121

Embassy Suites Baltimore North/Hunt Valley

2,399

Fairmont Dallas

9,166

Grand Bohemian Hotel Orlando

7,157

Hampton Inn & Suites Baltimore Inner Harbor

1,871

Hampton Inn & Suites Denver Downtown

3,611

Hilton Garden Inn Chicago North Shore/Evanston

2,861

Hilton Garden Inn Washington DC Downtown

9,052

Hilton Phoenix Suites

2,838

Hilton St. Louis Downtown at the Arch

2,207

Hilton University of Florida Conference Center Gainesville

3,563

Homewood Suites by Hilton Houston Near the Galleria

4,159

Hotel Monaco Chicago

4,241

Hotel Monaco Denver

6,960

Hotel Monaco Salt Lake City

4,728

Hyatt Key West Resort & Spa

8,028

Hyatt Regency Orange County

11,005

Hyatt Regency Santa Clara

12,903

Loews New Orleans Hotel

5,759

Lorien Hotel & Spa

2,883

Marriott Atlanta Century Center/Emory Area

2,783

Marriott Charleston Town Center

3,184

Marriott Chicago at Medical District/UIC

2,085

Marriott Dallas City Center

7,793

Marriott Griffin Gate Resort & Spa

6,524

Marriott Napa Valley Hotel & Spa

6,806

Marriott San Francisco Airport Waterfront

16,484

Marriott West Des Moines

2,550

Marriott Woodlands Waterway Hotel & Convention Center

18,107

Renaissance Atlanta Waverly Hotel & Convention Center

10,481

Renaissance Austin Hotel

10,925

Residence Inn Baltimore Downtown/Inner Harbor

4,216

Residence Inn Boston Cambridge

7,320

Residence Inn Denver City Center

7,597

Westin Galleria Houston & Westin Oaks Houston at The Galleria

21,024

Total Hotel EBITDA

$

283,701

 

 

(1)

"Same-Property" Hotel EBITDA include results for the year ended December 31, 2014 for all hotels owned as of June 30, 2015, except for the two hotels under development, and include periods prior to the Company's ownership of Aston Waikiki Beach Resort. Results also include renovation and remediation disruption and exclude the NOI guaranty payment of $1.4 million at the Andaz San Diego.

 

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SOURCE Xenia Hotels & Resorts, Inc.