Investor Toolkit
Print PagePrint Page
E-mail PageE-mail Page
RSS FeedsRSS Feeds
IR ContactsIR Contacts

Press Release

Printer Friendly Version View printer-friendly version
<< Back
Chesapeake Lodging Trust Reports Second Quarter Results

ANNAPOLIS, Md.--(BUSINESS WIRE)--Jul. 29, 2016-- Chesapeake Lodging Trust (NYSE:CHSP), a lodging real estate investment trust (REIT), reported today its financial results for the quarter ended June 30, 2016.

HIGHLIGHTS

  • RevPAR: 2.2% pro forma increase for the hotel portfolio over the same period in 2015.
  • Adjusted Hotel EBITDA Margin: 50 basis point pro forma increase to 36.9% for the hotel portfolio over the same period in 2015.
  • Adjusted Hotel EBITDA: $62.6 million.
  • Adjusted Corporate EBITDA: $57.9 million.
  • Net income available to common shareholders: $26.1 million or $0.44 per diluted common share.
  • Adjusted FFO: $43.9 million or $0.75 per diluted common share.
  • Financings: Prepaid without penalty its previous Hyatt Regency Boston loan and entered into a new $150.0 million, 10-year loan at 4.25%.

CONSOLIDATED FINANCIAL RESULTS

The following is a summary of the consolidated financial results for the three and six months ended June 30, 2016 and 2015 (in millions, except share and per share amounts):

           
Three Months Ended June 30, Six Months Ended June 30,
2016       2015 2016       2015
Total revenue $ 169.4 $ 162.1 $ 310.0 $ 271.4
 
Net income available to common shareholders $ 26.1 $ 21.6 $ 33.8 $ 20.8
Net income per diluted common share $ 0.44 $ 0.36 $ 0.57 $ 0.36
 
Adjusted Hotel EBITDA $ 62.6 $ 59.4 $ 102.6 $ 84.7
 
Adjusted Corporate EBITDA $ 57.9 $ 54.9 $ 92.6 $ 75.6
 
AFFO available to common shareholders $ 43.9 $ 39.8 $ 69.9 $ 54.2
AFFO per diluted common share $ 0.75 $ 0.68 $ 1.19 $ 0.95
 
Weighted-average number of diluted common shares outstanding 58,864,050 58,956,483 58,836,746 56,783,872
 

HOTEL OPERATING RESULTS

Management assesses the operating performance of its hotels irrespective of the hotel owner during the periods compared using the following key operating metrics: occupancy, ADR, RevPAR, Adjusted Hotel EBITDA, and Adjusted Hotel EBITDA Margin. The Trust uses the term "pro forma" to refer to metrics that include, or comparisons of metrics that are based on, the operating results of hotels under previous ownership for either a portion of or the entire period. As of June 30, 2016, the Trust owned 22 hotels. Since two of its hotels owned as of June 30, 2016 were acquired during 2015, the key operating metrics below reflect the pro forma operating results for those hotels for all, or a certain period, of the three and six months ended June 30, 2015.

Included in the following table are comparisons of the key operating metrics for the hotel portfolio for the three and six months ended June 30, 2016 and 2015 (in thousands, except for ADR and RevPAR):

           
Three Months Ended June 30, Six Months Ended June 30,
2016      

2015(1)

      Change 2016      

2015(1)

      Change
Occupancy 88.1 % 86.0 % 210 bps 83.4 % 79.1 % 430 bps
ADR $ 236.69 $ 237.11 (0.2 )% $ 227.05 $ 227.03 0.0 %
RevPAR $ 208.43 $ 203.99 2.2 % $ 189.39 $ 179.52 5.5 %
 
Adjusted Hotel EBITDA $ 62,597 $ 59,875 4.5 % $ 102,648 $ 91,543 12.1 %
Adjusted Hotel EBITDA Margin 36.9 % 36.4 % 50 bps 33.1 % 31.4 % 170 bps
 
__________
(1)   Includes results of operations for certain hotels prior to their acquisition by the Trust.
 

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

FINANCING ACTIVITY

On April 6, 2016, the Trust prepaid without penalty its previous mortgage loan secured by the Hyatt Regency Boston, which had an outstanding principal balance at the time of $88.2 million, with a borrowing under its revolving credit facility. On June 23, 2016, the Trust entered into a new 10-year, $150.0 million, fixed-rate mortgage loan secured by the Hyatt Regency Boston. The loan carries a fixed interest rate of 4.25% per annum, with principal and interest payments based on a 30-year principal amortization. The Trust used the proceeds from the new loan to repay outstanding borrowings under its revolving credit facility.

DISPOSITION ACTIVITY

On April 14, 2016, the Trust sold the separate, five-room villa building and related land parcel at the Hyatt Centric Santa Barbara for a sale price of $2.1 million. The Trust recognized a $0.6 million gain on sale.

CAPITAL MARKETS ACTIVITY

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

DIVIDENDS

On April 15, 2016, the Trust paid dividends in the amounts of $0.40 per share to its common shareholders and $0.484375 per share to its preferred shareholders, both of record as of March 31, 2016. On May 17, 2016, the Trust declared dividends in the amounts of $0.40 per share payable to its common shareholders and $0.484375 per share payable to its preferred shareholders, both of record as of June 30, 2016. Both dividends were paid on July 15, 2016.

2016 OUTLOOK

The Trust is updating its 2016 outlook to incorporate its second quarter results and recent operating trends and fundamentals. The updated outlook assumes no acquisitions, dispositions, or financing transactions beyond the prepayment without penalty of the Courtyard Washington Capitol Hill/Navy Yard mortgage loan on August 1, 2016 (in millions, except RevPAR and per share amounts):

     

Third Quarter 2016

Outlook
Low       High
CONSOLIDATED:
 
Net income available to common shareholders $ 23.7 $ 25.8
Net income per diluted common share $ 0.40 $ 0.44
 
Adjusted Corporate EBITDA $ 53.5 $ 55.8
 
AFFO available to common shareholders $ 42.5 $ 44.6
AFFO per diluted common share $ 0.72 $ 0.76
 
Corporate cash general and administrative expense $ 2.1 $ 2.3
Corporate non-cash general and administrative expense $ 2.4 $ 2.4
 
Weighted-average number of diluted common shares outstanding 58.9 58.9
 
22-HOTEL PORTFOLIO:
 
RevPAR $ 209.00 $ 213.00
RevPAR increase over 2015 0.0 % 2.0 %
Adjusted Hotel EBITDA $ 58.0 $ 60.5
Adjusted Hotel EBITDA Margin 35.2 % 36.0 %
Adjusted Hotel EBITDA Margin increase over 2015 0 bps 75 bps
 
           

Full Year 2016

Updated Outlook Previous Outlook
Low       High Low       High
CONSOLIDATED:
 
Net income available to common shareholders $ 69.6 $ 74.6 $ 74.3 $ 80.1
Net income per diluted common share $ 1.18 $ 1.27 $ 1.26 $ 1.36
 
Adjusted Corporate EBITDA $ 188.0 $ 193.5 $ 193.6 $ 200.1
 
AFFO available to common shareholders $ 143.7 $ 148.7 $ 148.5 $ 154.3
AFFO per diluted common share $ 2.45 $ 2.53 $ 2.52 $ 2.62
 
Corporate cash general and administrative expense $ 9.5 $ 10.0 $ 10.0 $ 10.8
Corporate non-cash general and administrative expense $ 9.5 $ 9.5 $ 9.4 $ 9.4
 
Weighted-average number of diluted common shares outstanding 58.7 58.7 58.9 58.9
 
22-HOTEL PORTFOLIO:
 
RevPAR $ 191.00 $ 194.00 $ 195.00 $ 199.00
Pro forma RevPAR increase over 2015(1) 3.0 % 4.5 % 5.0 % 7.0 %
Adjusted Hotel EBITDA $ 207.0 $ 213.0 $ 213.0 $ 220.3
Adjusted Hotel EBITDA Margin 33.2 % 33.7 % 33.7 % 34.2 %
Pro forma Adjusted Hotel EBITDA Margin increase over 2015(1) 50 bps 100 bps 100 bps 150 bps
 
___________
(1)   The comparable 2015 period includes results of operations for certain hotels prior to their acquisition by the Trust.
 

NON-GAAP FINANCIAL MEASURES

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

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

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

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

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

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

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

FFO available to common shareholders – The Trust reduces FFO for preferred share dividends and dividends declared on and earnings allocated to unvested time-based awards (consistent with adjustments required by GAAP in reporting net income available to common shareholders and related per share amounts). FFO available to common shareholders provides investors another financial measure to evaluate the Trust’s operating performance after taking into account the interests of holders of the Trust’s preferred shares and unvested time-based awards.

AFFO available to common shareholders – The Trust further adjusts FFO available to common shareholders for certain additional recurring and non-recurring items that are not in NAREIT’s definition of FFO. Specifically, the Trust adjusts for hotel acquisition costs and non-cash amortization of intangible assets and liabilities, including air rights contracts, ground lease assets and unfavorable contract liabilities, deferred franchise costs, and deferred key money, all of which are recurring items. The Trust believes that AFFO available to common shareholders provides investors with another financial measure of its operating performance that provides for greater comparability of its core operating results between periods.

CONFERENCE CALL

The Trust will host a conference call on Friday, July 29, 2016 at 11:00 a.m. Eastern Time to discuss its financial results. Interested individuals are invited to listen to the call by dialing (877) 683-0303 (U.S./Canadian callers) or (706) 643-5037 (International callers). The conference call ID is 47390763. A simultaneous webcast of the call will be available on the Trust’s website at www.chesapeakelodgingtrust.com. It is recommended that participants call or log on 10 minutes ahead of the scheduled start time to ensure proper connection.

A replay of the conference call will be available two hours after the live call until midnight on August 5, 2016. To access the replay, dial (855) 859-2056 (U.S./Canadian callers) or (404) 537-3406 (International callers). The conference call ID is 47390763. A webcast replay and transcript of the conference call will be archived and available on the Trust’s website for 12 months.

ABOUT CHESAPEAKE LODGING TRUST

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

Note: This press release contains forward-looking statements within the meaning of federal securities regulations. These forward-looking statements are identified by their use of terms and phrases such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “should,” “plan,” “predict,” “project,” “will,” “continue” and other similar terms and phrases, including references to assumptions and forecasts, such as the Trust’s third quarter and full year 2016 outlook. Forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors which may cause the actual results to differ materially from those anticipated at the time the forward-looking statements are made. These risks include, but are not limited to: U.S. economic conditions generally and the real estate market and the lodging industry specifically; management and performance of the Trust's hotels; supply and demand for hotel rooms in the Trust's markets; the Trust's competition; the Trust’s ability to continue to satisfy complex rules in order for it to remain a REIT for federal income tax purposes; the effects of any acquisitions, dispositions or financing transactions the Trust may undertake; and other risks and uncertainties associated with the Trust’s business described in its filings with the SEC. Although the Trust believes the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that the expectations will be attained or that any deviation will not be material. All information in this release is as of July 29, 2016, and the Trust undertakes no obligation to update any forward-looking statement to conform the statement to actual results or changes in the Trust’s expectations, except as required by law.

           
CHESAPEAKE LODGING TRUST
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
 
June 30, 2016 December 31, 2015
(unaudited)
 
ASSETS
Property and equipment, net $ 1,897,638 $ 1,926,944
Intangible assets, net 36,124 36,414
Cash and cash equivalents 55,512 50,544
Restricted cash 44,231 40,361
Accounts receivable, net 25,307 15,603
Prepaid expenses and other assets 21,024   17,900  
Total assets $ 2,079,836   $ 2,087,766  
 
LIABILITIES AND SHAREHOLDERS’ EQUITY
Long-term debt $ 766,667 $ 769,748
Accounts payable and accrued expenses 67,896 62,683
Other liabilities 45,566   45,778  
Total liabilities 880,129   878,209  
 
Commitments and contingencies
 

Preferred shares, $.01 par value; 100,000,000 shares authorized;

Series A Cumulative Redeemable Preferred Shares; 5,000,000 shares issued and outstanding ($127,422 liquidation preference)

50 50

Common shares, $.01 par value; 400,000,000 shares authorized; 60,101,531 shares and 59,659,522 shares issued and outstanding, respectively

601 597
Additional paid-in capital 1,302,443 1,297,877
Cumulative dividends in excess of net income (102,981 ) (88,675 )
Accumulated other comprehensive loss (406 ) (292 )
Total shareholders’ equity 1,199,707   1,209,557  
Total liabilities and shareholders’ equity $ 2,079,836   $ 2,087,766  
 
 
SUPPLEMENTAL CREDIT INFORMATION:
Fixed charge coverage ratio(1) 3.34 3.04
Leverage ratio(1) 32.3 % 32.6 %
 
______________
(1)   Calculated as defined under the Trust’s revolving credit facility.
 
           
CHESAPEAKE LODGING TRUST
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share data)
(unaudited)
 
Three Months Ended June 30, Six Months Ended June 30,
2016       2015 2016       2015
REVENUE
Rooms $ 126,967 $ 122,966 $ 230,739 $ 204,560
Food and beverage 35,664 33,014 66,219 56,412
Other 6,800   6,165   13,084   10,463  
Total revenue 169,431   162,145   310,042   271,435  
 
EXPENSES
Hotel operating expenses:
Rooms 27,876 26,144 53,377 47,244
Food and beverage 24,111 23,495 46,877 41,961
Other direct 1,589 1,906 3,147 3,239
Indirect 53,103   51,024   103,683   94,029  
Total hotel operating expenses 106,679 102,569 207,084 186,473
Depreciation and amortization 18,610 17,929 37,094 32,856
Air rights contract amortization 130 130 260 260
Corporate general and administrative 4,734 4,498 10,000 9,075
Hotel acquisition costs   466     835  
Total operating expenses 130,153   125,592   254,438   229,499  
 
Operating income 39,278 36,553 55,604 41,936
 
Interest expense (7,560 ) (8,168 ) (15,770 ) (15,347 )
Gain on sale of hotel 598     598    
 
Income before income taxes 32,316 28,385 40,432 26,589
 
Income tax expense (3,774 ) (4,340 ) (1,820 ) (992 )
 
Net income 28,542 24,045 38,612 25,597
 
Preferred share dividends (2,422 ) (2,422 ) (4,844 ) (4,844 )
Net income available to common shareholders $ 26,120   $ 21,623   $ 33,768   $ 20,753  
 
Net income per common share:
Basic $ 0.44 $ 0.37 $ 0.57 $ 0.36
Diluted $ 0.44 $ 0.36 $ 0.57 $ 0.36
 
Weighted-average number of common shares outstanding:
Basic 58,722,104 58,544,392 58,701,815 56,373,504
Diluted 58,864,050 58,956,483 58,836,746 56,783,872
 
     
CHESAPEAKE LODGING TRUST
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
 
Six Months Ended June 30,
2016       2015
 
Cash flows from operating activities:
Net income $ 38,612 $ 25,597

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization 37,094 32,856
Air rights contract amortization 260 260
Deferred financing costs amortization 936 939
Gain on sale of hotel (598 )
Share-based compensation 4,764 3,743
Other (442 ) (392 )
Changes in assets and liabilities:
Accounts receivable, net (9,704 ) (13,309 )
Prepaid expenses and other assets (3,126 ) (6,584 )
Accounts payable and accrued expenses 4,407 6,403
Other liabilities (22 ) 5,981  
Net cash provided by operating activities 72,181   55,494  
 
Cash flows from investing activities:
Acquisition of hotels, net of cash acquired (255,249 )
Disposition of hotel, net of cash sold 2,028
Improvements and additions to hotels (9,217 ) (24,361 )
Change in restricted cash (3,870 ) 4,841  
Net cash used in investing activities (11,059 ) (274,769 )
 
Cash flows from financing activities:
Proceeds from sale of common shares, net of underwriting fees 153,962
Payment of offering costs related to sale of common shares (254 )
Borrowings under revolving credit facility 130,000 310,000
Repayments under revolving credit facility (190,000 ) (175,000 )
Proceeds from issuance of mortgage debt 150,000
Principal prepayment on mortgage debt (88,190 )
Scheduled principal payments on mortgage debt (4,877 ) (5,103 )
Payment of deferred financing costs (844 ) (2,302 )
Payment of dividends to common shareholders (47,205 ) (36,906 )
Payment of dividends to preferred shareholders (4,844 ) (4,844 )
Repurchase of common shares (194 ) (1,690 )
Net cash provided by (used in) financing activities (56,154 ) 237,863  
Net increase in cash 4,968 18,588
Cash and cash equivalents, beginning of period 50,544   29,326  
Cash and cash equivalents, end of period $ 55,512   $ 47,914  
 
 

CHESAPEAKE LODGING TRUST

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

(in thousands, except share and per share data)

(unaudited)

 
The following table reconciles net income to Hotel EBITDA, Adjusted Hotel EBITDA, pro forma Adjusted Hotel EBITDA, and pro forma Adjusted Hotel EBITDA Margin for the three and six months ended June 30, 2016 and 2015:
           
Three Months Ended June 30, Six Months Ended June 30,
2016       2015 2016       2015
Net income $ 28,542 $ 24,045 $ 38,612 $ 25,597

Add:

Interest expense

7,560 8,168 15,770 15,347
Income tax expense 3,774 4,340 1,820 992
Depreciation and amortization 18,610 17,929 37,094 32,856
Air rights contract amortization 130 130 260 260
Corporate general and administrative 4,734 4,498 10,000 9,075
Hotel acquisition costs   466     835  
Hotel EBITDA 63,350 59,576 103,556 84,962
 

Less:

Non-cash amortization(1)

(155 ) (180 ) (310 ) (261 )
Gain on sale of hotel (598 )   (598 )  
Adjusted Hotel EBITDA 62,597 59,396 102,648 84,701
 

Add:

Prior owner Hotel EBITDA(2)

  479     6,842  
Pro forma Adjusted Hotel EBITDA $ 62,597   $ 59,875   $ 102,648   $ 91,543  
 
Total revenue $ 169,431 $ 162,145 $ 310,042 $ 271,435

Add:

Prior owner total revenue(2)

  2,242     20,286  
Pro forma total revenue $ 169,431   $ 164,387   $ 310,042   $ 291,721  
 
Pro forma Adjusted Hotel EBITDA Margin 36.9 % 36.4 % 33.1 % 31.4 %
 
_____________
(1)   Reflects non-cash amortization of ground lease asset, deferred franchise costs, deferred key money, and unfavorable contract liability.
(2) Reflects results of operations for certain hotels prior to our acquisition.
 

The following table reconciles net income to Corporate EBITDA and Adjusted Corporate EBITDA for the three and six months ended June 30, 2016 and 2015:

           
Three Months Ended June 30, Six Months Ended June 30,
2016       2015 2016       2015
Net income $ 28,542 $ 24,045 $ 38,612 $ 25,597

Add:

Interest expense

7,560 8,168 15,770 15,347
Income tax expense 3,774 4,340 1,820 992
Depreciation and amortization 18,610   17,929   37,094   32,856  
Corporate EBITDA 58,486 54,482 93,296 74,792
 

Add:

Hotel acquisition costs

466 835

Less:

Non-cash amortization(1)

(25 ) (50 ) (50 ) (1 )
Gain on sale of hotel (598 )   (598 )  
Adjusted Corporate EBITDA $ 57,863   $ 54,898   $ 92,648   $ 75,626  
 
____________
(1)   Reflects non-cash amortization of ground lease asset, deferred franchise costs, deferred key money, unfavorable contract liability, and air rights contract.
 

The following table reconciles net income to FFO, FFO available to common shareholders, and AFFO available to common shareholders for the three and six months ended June 30, 2016 and 2015:

           
Three Months Ended June 30, Six Months Ended June 30,
2016       2015 2016       2015
Net income $ 28,542 $ 24,045 $ 38,612 $ 25,597

Add:

Depreciation and amortization

18,610 17,929 37,094 32,856

Less:

Gain on sale of hotel

(598 )   (598 )  
FFO 46,554 41,974 75,108 58,453
 

Less:

Preferred share dividends

(2,422 ) (2,422 ) (4,844 ) (4,844 )
Dividends declared on unvested time-based awards (146 ) (136 ) (289 ) (273 )
Undistributed earnings allocated to unvested time-based awards (15 ) (7 )    
FFO available to common shareholders 43,971 39,409 69,975 53,336
 

Add:

Hotel acquisition costs

466 835
Non-cash amortization(1) (25 ) (50 ) (50 ) (1 )
AFFO available to common shareholders $ 43,946   $ 39,825   $ 69,925   $ 54,170  
 
FFO per common share:
Basic $ 0.75 $ 0.67 $ 1.19 $ 0.95
Diluted $ 0.75 $ 0.67 $ 1.19 $ 0.94
 
AFFO per common share:
Basic $ 0.75 $ 0.68 $ 1.19 $ 0.96
Diluted $ 0.75 $ 0.68 $ 1.19 $ 0.95
 
____________
(1)   Reflects non-cash amortization of ground lease asset, deferred franchise costs, deferred key money, unfavorable contract liability, and air rights contract.
 

The following table reconciles forecasted net income to Hotel EBITDA, Adjusted Hotel EBITDA, and Adjusted Hotel EBITDA Margin for the three months ending September 30, 2016 and year ending December 31, 2016:

           

Three Months Ending
September 30, 2016

Year Ending
December 31, 2016

Low       High Low       High
Net income $ 26,240 $ 28,340 $ 79,800 $ 84,800

Add:

Interest expense

8,120 8,120 31,820 31,820
Income tax expense 300 500 2,250 2,750
Depreciation and amortization 18,830 18,830 74,820 74,820
Air rights contract amortization 130 130 520 520
Corporate general and administrative 4,490   4,690   19,010   19,510  
Hotel EBITDA 58,110 60,610 208,220 214,220
 

Less:

Non-cash amortization(1)

(160 ) (160 ) (620 ) (620 )
Gain on sale of hotel     (600 ) (600 )
Adjusted Hotel EBITDA $ 57,950   $ 60,450   $ 207,000   $ 213,000  
 
Total revenue $ 164,650 $ 168,150 $ 622,700 $ 631,200
 
Adjusted Hotel EBITDA Margin 35.2 % 36.0 % 33.2 % 33.7 %
 
_____________
(1)   Reflects non-cash amortization of ground lease asset, deferred franchise costs, deferred key money, and unfavorable contract liability.
 

The following table reconciles forecasted net income to Corporate EBITDA and Adjusted Corporate EBITDA for the three months ending September 30, 2016 and year ending December 31, 2016:

           

Three Months Ending
September 30, 2016

Year Ending
December 31, 2016

Low       High Low       High
Net income $ 26,240 $ 28,340 $ 79,800 $ 84,800

Add:

Interest expense

8,120 8,120 31,820 31,820
Income tax expense 300 500 2,250 2,750
Depreciation and amortization 18,830   18,830   74,820   74,820  
Corporate EBITDA 53,490 55,790 188,690 194,190
 

Less:

Non-cash amortization(1)

(30 ) (30 ) (100 ) (100 )
Gain on sale of hotel     (600 ) (600 )
Adjusted Corporate EBITDA $ 53,460   $ 55,760   $ 187,990   $ 193,490  
 
____________
(1)   Reflects non-cash amortization of ground lease asset, deferred franchise costs, deferred key money, unfavorable contract liability, and air rights contract.
 

The following table reconciles forecasted net income to FFO, FFO available to common shareholders, and AFFO available to common shareholders for the three months ending September 30, 2016 and year ending December 31, 2016:

           

Three Months Ending
September 30, 2016

Year Ending
December 31, 2016

Low       High Low       High
Net income $ 26,240 $ 28,340 $ 79,800 $ 84,800

Add:

Depreciation and amortization

18,830 18,830 74,820 74,820

Less:

Gain on sale of hotel

    (600 ) (600 )
FFO 45,070 47,170 154,020 159,020
 

Less:

Preferred share dividends

(2,420 ) (2,420 ) (9,690 ) (9,690 )
Dividends declared on unvested time-based awards (150 ) (150 ) (560 ) (560 )
Undistributed earnings allocated to unvested time-based awards (10 ) (10 )    
FFO available to common shareholders 42,490 44,590 143,770 148,770
 

Less:

Non-cash amortization(1)

(30 ) (30 ) (100 ) (100 )
AFFO available to common shareholders $ 42,460   $ 44,560   $ 143,670   $ 148,670  
 
FFO per common share:
Basic $ 0.72 $ 0.76 $ 2.45 $ 2.53
Diluted $ 0.72 $ 0.76 $ 2.45 $ 2.53
 
AFFO per common share:
Basic $ 0.72 $ 0.76 $ 2.45 $ 2.53
Diluted $ 0.72 $ 0.76 $ 2.45 $ 2.53
 
Weighted-average number of common shares outstanding:
Basic 58,730 58,730 58,733 58,733
Diluted 58,887 58,887 58,733 58,733
 
____________
(1)   Reflects non-cash amortization of ground lease asset, deferred franchise costs, deferred key money, unfavorable contract liability, and air rights contract.
                 
CHESAPEAKE LODGING TRUST
CURRENT HOTEL PORTFOLIO
 
 
 
Hotel   Location Rooms Acquisition Date
1   Hyatt Regency Boston Boston, MA 502 March 18, 2010
2 Hilton Checkers Los Angeles Los Angeles, CA 193 June 1, 2010
3 Boston Marriott Newton Newton, MA 430 July 30, 2010
4 Le Meridien San Francisco San Francisco, CA 360 December 15, 2010
5 Homewood Suites Seattle Convention Center Seattle, WA 195 May 2, 2011
6 W Chicago – City Center Chicago, IL 403 May 10, 2011
7 Hotel Indigo San Diego Gaslamp Quarter San Diego, CA 210 June 17, 2011
8 Courtyard Washington Capitol Hill/Navy Yard Washington, DC 204 June 30, 2011
9 Hotel Adagio San Francisco, Autograph Collection San Francisco, CA 171 July 8, 2011
10 Denver Marriott City Center Denver, CO 613 October 3, 2011
11 Hyatt Herald Square New York New York, NY 122 December 22, 2011
12 W Chicago – Lakeshore Chicago, IL 520 August 21, 2012
13 Hyatt Regency Mission Bay Spa and Marina San Diego, CA 429 September 7, 2012
14 The Hotel Minneapolis, Autograph Collection Minneapolis, MN 222 October 30, 2012
15 Hyatt Place New York Midtown South New York, NY 185 March 14, 2013
16 W New Orleans – French Quarter New Orleans, LA 97 March 28, 2013
17 Le Meridien New Orleans New Orleans, LA 410 April 25, 2013
18 Hyatt Centric Fisherman’s Wharf San Francisco, CA 316 May 31, 2013
19 Hyatt Centric Santa Barbara Santa Barbara, CA 200 June 27, 2013
20 JW Marriott San Francisco Union Square San Francisco, CA 337 October 1, 2014
21 Royal Palm South Beach Miami, a Tribute Portfolio Resort Miami Beach, FL 393 March 9, 2015
22 Ace Hotel and Theater Downtown Los Angeles Los Angeles, CA 182 April 30, 2015
6,694

Source: Chesapeake Lodging Trust

Chesapeake Lodging Trust
Douglas W. Vicari, 410-972-4142