Xenia Hotels & Resorts, Inc. (NYSE: XHR) today announced results for the quarter ended March 31, 2019.
First Quarter 2019 Highlights
- Net Income: Net income attributable to common stockholders was $16.7 million and net income per diluted share was $0.15.
- Same-Property RevPAR: Same-Property RevPAR increased 4.2% compared to the first quarter of 2018 to $170.28, as a result of a 97 basis point increase in occupancy and a 2.9% increase in ADR.
- Same-Property Hotel EBITDA Margin: Same-Property Hotel EBITDA Margin was 28.9%, an increase of 131 basis points compared to the first quarter of 2018.
- Total Portfolio RevPAR: Total Portfolio RevPAR was $170.28, a 7.2% increase compared to the first quarter of 2018 reflecting portfolio performance and upgrades to overall portfolio quality as a result of transactions that were completed in 2018.
- Adjusted EBITDAre: Adjusted EBITDAre grew $4.4 million to $78.1 million, an increase of 5.9% compared to the first quarter of 2018.
- Adjusted FFO per Diluted Share: Adjusted FFO per diluted share was $0.53, flat compared to the first quarter of 2018, reflecting a 6.8% increase in Adjusted FFO offset by a higher weighted average share and unit count.
- Financing Activity: The Company drew the remaining $85 million on its $150 million unsecured term loan and paid off a $90 million mortgage loan.
- Dividends: The Company declared its first quarter dividend of $0.275 per share to common stockholders of record on March 29, 2019.
"We are pleased with our portfolio's performance during the first quarter as we experienced strong revenue and bottom-line growth, highlighted by our Same-Property RevPAR and Hotel EBITDA increasing by 4.2% and 9.5%, respectively," commented Marcel Verbaas, Chairman and Chief Executive Officer of Xenia. "Strong group demand in a number of our core markets, as well as a reduced level of renovation disruption this year as compared to last year, when our current portfolio's Same-Property RevPAR growth was negatively impacted by approximately 150 basis points, allowed us to drive substantial top-line growth during the quarter. We were particularly pleased with the RevPAR growth at our hotels in markets such as San Francisco, Denver, Atlanta, Houston, and Dallas, with increases of 17.5%, 12.8%, 8.8%, 7.1%, and 6.6%, respectively, as well as the continued recovery of the Key West and Napa markets from the aftermath of the natural disasters that impacted performance last year."
"The continued positive results of our focus on expense controls and portfolio improvements were evident through our first quarter performance as Same-Property Hotel EBITDA Margin increased by 131 basis points for the quarter and Total Portfolio RevPAR was 7.2% higher than last year," Mr. Verbaas continued. "With the timing of Easter this year being similar to 2017, it is notable that our Total Portfolio RevPAR increased by 15.7% compared to the first quarter two years ago, highlighting the significant portfolio enhancements we have been able to achieve through our transactions, renovations and asset management practices. We look forward to continuing to reap the benefits as our newly renovated hotels enhance their competitive positioning and our recently acquired hotels are further integrated into our asset management platform."
Operating Results
The Company's results include the following:
| Three Months Ended March 31, | ||||||||||
| 2019 | 2018 | Change | ||||||||
| ($ amounts in thousands, except hotel statistics and per share amounts) | ||||||||||
| Net income attributable to common stockholders | $ | 16,703 | $ | 55,656 | (70.0) | % | ||||
| Net income per share available to common stockholders - diluted | $ | 0.15 | $ | 0.52 | (71.2) | % | ||||
| Same-Property Number of Hotels | 40 | 40 | — | |||||||
| Same-Property Number of Rooms | 11,167 | 11,165 | 2 | |||||||
| Same-Property Occupancy(1) | 75.1 | % | 74.1 | % | 97 | bps | ||||
| Same-Property Average Daily Rate(1) | $ | 226.72 | $ | 220.40 | 2.9 | % | ||||
| Same-Property RevPAR(1) | $ | 170.28 | $ | 163.41 | 4.2 | % | ||||
| Same-Property Hotel EBITDA(1)(2) | $ | 84,788 | $ | 77,398 | 9.5 | % | ||||
| Same-Property Hotel EBITDA Margin(1)(2) | 28.9 | % | 27.6 | % | 131 | bps | ||||
| Total Portfolio Number of Hotels(3) | 40 | 38 | 2 | |||||||
| Total Portfolio Number of Rooms(3) | 11,167 | 10,852 | 315 | |||||||
| Total Portfolio RevPAR(4) | $ | 170.28 | $ | 158.81 | 7.2 | % | ||||
| Adjusted EBITDAre(2) | $ | 78,086 | $ | 73,735 | 5.9 | % | ||||
| Adjusted FFO(2) | $ | 60,031 | $ | 56,187 | 6.8 | % | ||||
| Adjusted FFO per diluted share | $ | 0.53 | $ | 0.53 | — | % | ||||
| (1) | "Same-Property" includes all hotels owned as of March 31, 2019. "Same-Property" includes periods prior to the Company's ownership of The Ritz-Carlton, Denver, Fairmont Pittsburgh, Park Hyatt Aviara Resort, Golf Club & Spa, and Waldorf Astoria Atlanta Buckhead. "Same-Property" also includes renovation disruption for multiple capital projects during the periods presented and natural disaster disruption at multiple properties in 2018. The pre-acquisition operating results were obtained from the seller and/or the manager of the hotels during the acquisition due diligence process. We have made no adjustments to the historical operating amounts provided to us by the seller and/or the manager, other than to reflect the removal of historical intercompany lease revenue/expense or any other items that are not applicable to us under our ownership. The pre-acquisition operating results are not audited or reviewed by our independent auditors. Pre-acquisition operating results for periods prior to the Company's ownership have not been included in the Company's actual consolidated financial statements and are included only in "Same-Property" for comparison purposes. |
| (2) | See tables later in this press release for reconciliations from net income to Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA"), Earnings Before Interest, Taxes, Depreciation and Amortization for Real Estate ("EBITDAre"), Adjusted EBITDAre, Funds From Operations ("FFO"), Adjusted FFO, and Same-Property Hotel EBITDA. EBITDA, EBITDAre, Adjusted EBITDAre, FFO, Adjusted FFO, Same-Property Hotel EBITDA, and Same-Property Hotel EBITDA Margin are non-GAAP financial measures. |
| (3) | As of end of periods presented. |
| (4) | 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. |
Financings and Balance Sheet
In February, the Company completed the delayed draw of $85 million on its unsecured term loan maturing August 2023, bringing the outstanding balance on the loan to the full $150 million capacity. In March, the Company paid off the $90 million mortgage loan collateralized by Hyatt Regency Santa Clara.
As of March 31, 2019, the Company had total outstanding debt of $1.1 billion with a weighted average interest rate of 3.90%. Over 80% of the Company's debt has interest rates which are fixed or have been hedged to fixed. In addition, the Company had $74.5 million of cash and cash equivalents, and full availability on its $500 million 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 3.6x as of March 31, 2019.
Capital Markets
During the quarter, the Company did not issue any shares of its common stock through its At-The-Market ("ATM") program. As of March 31, 2019, the Company had $62.6 million remaining available for sale under the ATM program.
Additionally, the Company did not repurchase any shares under its existing share repurchase authorization during the quarter. As of March 31, 2019, the Company had approximately $96.9 million remaining under its share repurchase authorization.
Capital Expenditures
During the three months ended March 31, 2019, the Company invested $13 million in its portfolio. The Company substantially completed the guestroom renovation at Kimpton Hotel Monaco Chicago, the lobby renovation at Kimpton Hotel Monaco Denver, meeting space renovations at Kimpton Hotel Palomar Philadelphia and Marriott Griffin Gate Resort & Spa, and a new food and beverage marketplace at Hyatt Regency Santa Clara. The Company converted under-utilized space to create two additional rooms at Marriott Woodlands Waterway Hotel. During the quarter, the Company continued the construction of the new ballroom at Hyatt Regency Grand Cypress and the project continues to be on track for a fourth quarter 2019 completion.
2019 Outlook and Guidance
The Company has updated its outlook for 2019 based on first quarter performance and the current economic environment. This outlook incorporates all expected renovation disruption, and assumes no additional acquisitions, dispositions, equity offerings, or share repurchases. Same-Property RevPAR change includes all 40 hotels owned as of May 2, 2019.
| 2019 Guidance | Variance to Prior Guidance | |||||||
| Low End | High End | Low End | High End | |||||
| ($ amounts in millions, except per share data) | ||||||||
| Net Income | $65 | $77 | $6 | $2 | ||||
| Same-Property RevPAR Change | 1.0% | 2.5% | 0.50% | —% | ||||
| Adjusted EBITDAre | $292 | $304 | $4 | $— | ||||
| Adjusted FFO | $238 | $250 | $7 | $3 | ||||
| Adjusted FFO per Diluted Share | $2.08 | $2.18 | $0.06 | $0.02 | ||||
| Capital Expenditures | $85 | $105 | $— | $— | ||||
Additional guidance assumptions:
- Disruption due to renovations is expected to negatively impact Same-Property RevPAR Change by approximately 20 basis points.
- General and administrative expense of $21 million to $23 million, excluding non-cash share-based compensation.
- Interest expense of $47 million to $49 million, excluding non-cash loan related costs.
- Income tax expense of approximately $6 million.
- 114.4 million weighted average diluted shares/units.
About Xenia Hotels & Resorts, Inc.
Xenia Hotels & Resorts, Inc. is a self-advised and self-administered REIT that invests primarily in uniquely positioned luxury and upper upscale hotels and resorts, with a focus on the top 25 U.S. lodging markets as well as key leisure destinations in the United States. The Company owns 40 hotels comprising 11,167 rooms across 17 states. Xenia's hotels are primarily in the luxury and upper upscale segments, and operated and/or licensed by industry leaders such as Marriott, Hyatt, Kimpton, Fairmont, Loews, and Hilton, as well as leading independent management companies including The Kessler Collection, Sage Hospitality, and Davidson Hotels & Resorts.
| Xenia Hotels & Resorts, Inc. | |||||
| Condensed Consolidated Balance Sheets | |||||
| As of March 31, 2019 and December 31, 2018 | |||||
| ($ amounts in thousands, except per share data) | |||||
| March 31, 2019 | December 31, 2018 | ||||
| Assets | (Unaudited) | (Audited) | |||
| Investment properties: | |||||
| Land | $ | 477,350 | $ | 477,350 | |
| Buildings and other improvements | 3,124,658 | 3,113,745 | |||
| Total | $ | 3,602,008 | $ | 3,591,095 | |
| Less: accumulated depreciation | (754,681) | (715,949) | |||
| Net investment properties | $ | 2,847,327 | $ | 2,875,146 | |
| Cash and cash equivalents | 74,462 | 91,413 | |||
| Restricted cash and escrows | 69,784 | 70,195 | |||
| Accounts and rents receivable, net of allowance for doubtful accounts | 63,305 | 34,804 | |||
| Intangible assets, net of accumulated amortization | 37,291 | 61,541 | |||
| Other assets | 89,068 | 36,988 | |||
| Total assets | $ | 3,181,237 | $ | 3,170,087 | |
| Liabilities | |||||
| Debt, net of loan discounts and unamortized deferred financing costs | $ | 1,149,916 | $ | 1,155,088 | |
| Accounts payable and accrued expenses | 91,745 | 84,967 | |||
| Distributions payable | 31,725 | 31,574 | |||
| Other liabilities | 74,294 | 45,753 | |||
| Total liabilities | $ | 1,347,680 | $ | 1,317,382 | |
| Commitments and Contingencies | |||||
| Stockholders' equity | |||||
| Common stock, $0.01 par value, 500,000,000 shares authorized, 112,639,858 and 112,583,990 shares issued and outstanding as of March 31, 2019 and December 31, 2018, respectively | 1,127 | 1,126 | |||
| Additional paid in capital | 2,059,694 | 2,059,699 | |||
| Accumulated other comprehensive income | 6,460 | 12,742 | |||
| Accumulated distributions in excess of net earnings | (263,978) | (249,654) | |||
| Total Company stockholders' equity | $ | 1,803,303 | $ | 1,823,913 | |
| Non-controlling interests | 30,254 | 28,792 | |||
| Total equity | $ | 1,833,557 | $ | 1,852,705 | |
| Total liabilities and equity | $ | 3,181,237 | $ | 3,170,087 | |
| Xenia Hotels & Resorts, Inc. | ||||||||
| Condensed Consolidated Statements of Operations and Comprehensive Income | ||||||||
| For the Three Months Ended March 31, 2019 and 2018 | ||||||||
| (Unaudited) | ||||||||
| ($ amounts in thousands, except per share data) | ||||||||
| Three Months Ended March 31, | ||||||||
| 2019 | 2018 | |||||||
| Revenues: | ||||||||
| Rooms revenues | $ | 171,141 | $ | 162,582 | ||||
| Food and beverage revenues | 103,463 | 86,415 | ||||||
| Other revenues | 19,083 | 15,501 | ||||||
| Total revenues | $ | 293,687 | $ | 264,498 | ||||
| Expenses: | ||||||||
| Rooms expenses | 40,656 | 39,044 | ||||||
| Food and beverage expenses | 63,414 | 52,975 | ||||||
| Other direct expenses | 7,117 | 4,474 | ||||||
| Other indirect expenses | 72,393 | 63,326 | ||||||
| Management and franchise fees | 12,309 | 11,560 | ||||||
| Total hotel operating expenses | $ | 195,889 | $ | 171,379 | ||||
| Depreciation and amortization | 40,000 | 38,801 | ||||||
| Real estate taxes, personal property taxes and insurance | 13,059 | 11,859 | ||||||
| Ground lease expense | 1,090 | 1,565 | ||||||
| General and administrative expenses | 7,575 | 8,060 | ||||||
| Total expenses | $ | 257,613 | $ | 231,664 | ||||
| Operating income | $ | 36,074 | $ | 32,834 | ||||
| Gain on sale of investment properties | — | 42,284 | ||||||
| Other income | 95 | 387 | ||||||
| Interest expense | (12,587) | (13,717) | ||||||
| Loss on extinguishment of debt | (213) | (81) | ||||||
| Net income before income taxes | $ | 23,369 | $ | 61,707 | ||||
| Income tax expense | (6,093) | (4,664) | ||||||
| Net income | $ | 17,276 | $ | 57,043 | ||||
| Non-controlling interests in consolidated real estate entities | — | 179 | ||||||
| Non-controlling interests of common units in Operating Partnership | (573) | (1,566) | ||||||
| Net income attributable to non-controlling interests | $ | (573) | $ | (1,387) | ||||
| Net income attributable to common stockholders | $ | 16,703 | $ | 55,656 | ||||
| Xenia Hotels & Resorts, Inc. | ||||||
| Condensed Consolidated Statements of Operations and Comprehensive Income - Continued | ||||||
| For the Three Months Ended March 31, 2019 and 2018 | ||||||
| (Unaudited) | ||||||
| ($ amounts in thousands, except per share data) | ||||||
| Three Months Ended March 31, | ||||||
| 2019 | 2018 | |||||
| Basic and diluted earnings per share | ||||||
| Net income per share available to common stockholders - basic and diluted | $ | 0.15 | $ | 0.52 | ||
| Weighted average number of common shares (basic) | 112,619,144 | 106,792,350 | ||||
| Weighted average number of common shares (diluted) | 112,907,539 | 107,010,343 | ||||
| Comprehensive Income: | ||||||
| Net income | $ | 17,276 | $ | 57,043 | ||
| Other comprehensive income: | ||||||
| Unrealized (loss) gain on interest rate derivative instruments | (5,084) | 8,816 | ||||
| Reclassification adjustment for amounts recognized in net income (interest expense) | (1,413) | (54) | ||||
| $ | 10,779 | $ | 65,805 | |||
| Comprehensive (income) loss attributable to non-controlling interests: | ||||||
| Non-controlling interests in consolidated real estate entities | — | 179 | ||||
| Non-controlling interests of common units in Operating Partnership | (358) | (1,802) | ||||
| Comprehensive income attributable to non-controlling interests | $ | (358) | $ | (1,623) | ||
| Comprehensive income attributable to the Company | $ | 10,421 | $ | 64,182 | ||
Non-GAAP Financial Measures
The Company considers the following non-GAAP financial measures to be useful to investors as key supplemental measures of operating performance: EBITDA, EBITDAre, Adjusted EBITDAre, 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, EBITDAre and Adjusted EBITDAre
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.
We then calculate EBITDAre in accordance with standards established by the National Association of Real Estate Investment Trusts ("Nareit"). Nareit defines EBITDAre as EBITDA plus or minus losses and gains on the disposition of depreciated property, including gains/losses on change of control, plus impairment write-downs of depreciated property and of investments in unconsolidated affiliates caused by a decrease in value of the depreciated property in the affiliate, and adjustments to reflect the entity's share of EBITDAre of unconsolidated affiliates.
We further adjust EBITDAre to exclude the impact of non-controlling interests in consolidated entities other than our Operating Partnership units because our Operating Partnership units may be redeemed for common stock. We believe it is meaningful for the investor to understand Adjusted EBITDAre attributable to all common stock and Operating Partnership unit holders. We also adjust EBITDAre for certain additional items such as hotel acquisition and terminated transaction costs, amortization of share-based compensation, the cumulative effect of changes in accounting principles, and other costs we believe do not represent recurring operations and are not indicative of the performance of our underlying hotel property entities. We believe Adjusted EBITDAre attributable to common stock and unit holders provides investors with another financial measure in evaluating and facilitating comparison of operating performance between periods and between REITs that report similar measures.
Same-Property Hotel EBITDA and Same-Property Hotel EBITDA Margin
Same-Property hotel data includes the actual operating results for all hotels owned as of the end of the reporting period. We then adjust the Same-Property hotel data for comparability purposes by including pre-acquisition operating results of asset(s) acquired during the period, which provides the investor a basis for understanding the acquisition(s) historical operating trends and seasonality. The pre-acquisition operating results for the comparable period are obtained from the seller and/or manager of the hotels during the acquisition due diligence process and have not been audited or reviewed by our independent auditors. We further adjust the Same-Property hotel data to remove dispositions during the respective reporting periods, and, in certain cases, hotels that are not fully open due to renovation, re-positioning, or disruption or whose room counts have materially changed during either the current or prior year as these historical operating results are not indicative of or expected to be comparable to the operating performance of our hotel portfolio on a prospective basis.
Same-Property Hotel EBITDA represents net income excluding: (1) interest expense, (2) income taxes, (3) depreciation and amortization, (4) corporate-level costs and expenses, (5) hotel acquisition and terminated transaction costs, and (6) certain state and local excise taxes resulting from our ownership structure. We believe that Same-Property Hotel EBITDA provides our investors a useful financial measure to evaluate our hotel operating performance, excluding the impact of our capital structure (primarily interest), our asset base (primarily depreciation and amortization), income taxes, and our corporate-level expenses (corporate expenses and hotel acquisition and terminated transaction costs). We believe property-level results provide investors with supplemental information on the ongoing operational performance of our hotels and the effectiveness of our third-party management companies that operate our business on a property-level basis. Same-Property Hotel EBITDA Margin is calculated by dividing Same-Property Hotel EBITDA by Same-Property Total Revenues.
As a result of these adjustments the Same-Property hotel data we present does not represent our total revenues, expenses, operating profit or net income and should not be used to evaluate our performance as a whole. Management compensates for these limitations by separately considering the impact of these excluded items to the extent they are material to operating decisions or assessments of our operating performance. Our consolidated statements of operations include such amounts, all of which should be considered by investors when evaluating our performance.
We include Same-Property hotel data as supplemental information for investors. Management believes that providing Same-Property hotel data is useful to investors because it represents comparable operations for our portfolio as it exists at the end of the respective reporting periods presented, which allows investors and management to evaluate the period-to-period performance of our hotels and facilitates comparisons with other hotel REITs and hotel owners. In particular, these measures assist management and investors in distinguishing whether increases or decreases in revenues and/or expenses are due to growth or decline of operations at Same-Property hotels or from other factors, such as the effect of acquisitions or dispositions.
FFO and Adjusted FFO
The Company calculates FFO in accordance with standards established by Nareit, as amended in the December 2018 restatement whitepaper, 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 acquisition and terminated transaction 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 diluted weighted average common share count used for the calculation of Adjusted FFO per diluted share differs from diluted weighted average common share count used to derive net income per share available to common stockholders. The Company calculates Adjusted FFO per diluted share by dividing the Adjusted FFO by the diluted weighted average number of shares of common stock outstanding plus the weighted average vested Operating Partnership units for the three months ended March 31, 2019. For the three months ended March 31, 2018, Adjusted FFO per diluted share is calculated by dividing the Adjusted FFO by the diluted weighted average number of shares of common stock. Any anti-dilutive securities are excluded from the diluted earnings per-share calculation.
| Xenia Hotels & Resorts, Inc. | |||||
| Reconciliation of Net Income to EBITDA, EBITDAre, Adjusted EBITDAre and Same-Property Hotel EBITDA | |||||
| For the Three Months Ended March 31, 2019 and 2018 | |||||
| (Unaudited) | |||||
| ($ amounts in thousands) | |||||
| Three Months Ended March 31, | |||||
| 2019 | 2018 | ||||
| Net income | $ | 17,276 | $ | 57,043 | |
| Adjustments: | |||||
| Interest expense | 12,587 | 13,717 | |||
| Income tax expense | 6,093 | 4,664 | |||
| Depreciation and amortization | 40,000 | 38,801 | |||
| EBITDA | $ | 75,956 | $ | 114,225 | |
| Gain on sale of investment properties | — | (42,284) | |||
| EBITDAre | $ | 75,956 | $ | 71,941 | |
| Reconciliation to Adjusted EBITDAre | |||||
| Non-controlling interests in consolidated real estate entities | — | 179 | |||
| Adjustments related to non-controlling interests in consolidated real estate entities | — | (342) | |||
| Depreciation and amortization related to corporate assets | (103) | (104) | |||
| Loss on extinguishment of debt | 213 | 81 | |||
| Amortization of share-based compensation expense | 1,894 | 2,070 | |||
| Amortization of above and below market ground leases and straight-line rent expense | 126 | 115 | |||
| Other non-recurring expenses | — | (205) | |||
| Adjusted EBITDAre attributable to common stock and unit holders | $ | 78,086 | $ | 73,735 | |
| Corporate-level costs and expenses | 6,618 | 6,552 | |||
| Income from sold properties | 65 | (5,743) | |||
| Pro forma hotel level adjustments, net(1) | 19 | 2,854 | |||
| Same-Property Hotel EBITDA attributable to common stock and unit holders(2) | $ | 84,788 | $ | 77,398 | |
| (1) | Adjusted to include the results of The Ritz-Carlton, Denver, Fairmont Pittsburgh, Park Hyatt Aviara Resort, Golf Club & Spa, and Waldorf Astoria Atlanta Buckhead for periods prior to Company ownership. | ||||||
| (2) | See the reconciliation of Total Revenues and Total Expenses on a consolidated GAAP basis to Total Same-Property Revenues and Total Same-Property Expenses and the calculation of Same-Property Hotel EBITDA and Hotel EBITDA Margin for the three months ended March 31, 2019 on page 15. | ||||||
| Xenia Hotels & Resorts, Inc. | |||||
| Reconciliation of Net Income to FFO and Adjusted FFO | |||||
| For the Three Months Ended March 31, 2019 and 2018 | |||||
| (Unaudited) | |||||
| ($ amounts in thousands) | |||||
| Three Months Ended March 31, | |||||
| 2019 | 2018 | ||||
| Net income | $ | 17,276 | $ | 57,043 | |
| Adjustments: | |||||
| Depreciation and amortization related to investment properties | 39,897 | 38,697 | |||
| Gain on sale of investment properties | — | (42,284) | |||
| Non-controlling interests in consolidated real estate entities | — | 179 | |||
| Adjustments related to non-controlling interests in consolidated real estate entities | — | (226) | |||
| FFO attributable to common stock and unit holders | $ | 57,173 | $ | 53,409 | |
| Reconciliation to Adjusted FFO | |||||
| Loss on extinguishment of debt | 213 | 81 | |||
| Loan related costs, net of adjustment related to non-controlling interests(1) | 625 | 717 | |||
| Amortization of share-based compensation expense | 1,894 | 2,070 | |||
| Amortization of above and below market ground leases and straight-line rent expense | 126 | 115 | |||
| Other non-recurring expenses | — | (205) | |||
| Adjusted FFO attributable to common stock and unit holders | $ | 60,031 | $ | 56,187 | |
| (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 EBITDAre | ||
| for Current Full Year 2019 Guidance | ||
| ($ amounts in millions) | ||
| Guidance Midpoint | ||
| Net income | $71 | |
| Adjustments: | ||
| Interest expense | 51 | |
| Income tax expense | 6 | |
| Depreciation and amortization | 160 | |
| EBITDA | $288 | |
| EBITDAre | $288 | |
| Amortization of share-based compensation expense | 10 | |
| Adjusted EBITDAre | $298 | |
| Reconciliation of Net Income to Adjusted FFO | ||
| for Current Full Year 2019 Guidance | ||
| ($ amounts in millions) | ||
| Guidance Midpoint | ||
| Net income | $71 | |
| Adjustments: | ||
| Depreciation and amortization related to investment properties | 160 | |
| FFO | $231 | |
| Amortization of share-based compensation expense | 10 | |
| Other(1) | 3 | |
| Adjusted FFO | $244 | |
| (1) | Includes amortization of above and below market ground leases and straight-line rent and loan related costs. | |
| Xenia Hotels & Resorts, Inc. | |||||||||
| Debt Summary | |||||||||
| ($ amounts in thousands) | |||||||||
| Rate Type | Rate(1) | Maturity Date | Outstanding as of March 31, 2019 | ||||||
| Marriott Charleston Town Center | Fixed | 3.85% | July 2020 | 15,258 | |||||
| Marriott Dallas City Center | Fixed(2) | 4.05% | January 2022 | 51,000 | |||||
| Kimpton Hotel Palomar Philadelphia | Fixed(2) | 4.14% | January 2023 | 58,750 | |||||
| Renaissance Atlanta Waverly Hotel & Convention Center | Partially Fixed(3) | 3.98% | August 2024 | 100,000 | |||||
| Andaz Napa | Variable | 4.39% | September 2024 | 56,000 | |||||
| The Ritz-Carlton, Pentagon City | Fixed(4) | 4.95% | January 2025 | 65,000 | |||||
| Residence Inn Boston Cambridge | Fixed | 4.48% | November 2025 | 61,630 | |||||
| Grand Bohemian Hotel Orlando, Autograph Collection | Fixed | 4.53% | March 2026 | 59,037 | |||||
| Marriott San Francisco Airport Waterfront | Fixed | 4.63% | May 2027 | 115,000 | |||||
| Total Mortgage Loans | 4.38% | (5) | $ | 581,675 | |||||
| Senior Unsecured Credit Facility | Variable | 4.00% | February 2022 | (6) | — | ||||
| Term Loan $175M | Partially Fixed(7) | 2.79% | February 2021 | 175,000 | |||||
| Term Loan $125M | Partially Fixed(7) | 3.28% | October 2022 | 125,000 | |||||
| Term Loan $150M | Variable | 3.95% | August 2023 | 150,000 | |||||
| Term Loan $125M | Partially Fixed(8) | 3.72% | September 2024 | 125,000 | |||||
| Mortgage Loan Discounts, net(9) | (65) | ||||||||
| Unamortized Deferred Financing Costs, net | (6,694) | ||||||||
| Total Debt, net of mortgage loan discounts and unamortized deferred financing costs | 3.90% | (5) | $ | 1,149,916 | |||||
| (1) | Variable index is one-month LIBOR. Interest rates as of March 31, 2019. |
| (2) | A variable interest loan for which the interest rate has been fixed for the entire term. |
| (3) | A variable interest loan for which the interest rate has been fixed on $90 million of the balance through January 2022, after which the rate reverts to variable. |
| (4) | A variable interest loan for which the interest rate has been fixed through January 2023. |
| (5) | Weighted average interest rate as of March 31, 2019. |
| (6) | The maturity of the senior unsecured credit facility can be extended through February 2023 at the Company's discretion and may require the payment of an extension fee. |
| (7) | A variable interest loan for which LIBOR has been fixed for certain interest periods throughout the term of the loan. The spread to LIBOR may vary, as it is determined by the Company's leverage ratio. |
| (8) | A variable interest loan for which LIBOR has been fixed for certain interest periods through September 2022. The spread to LIBOR may vary, as it is determined by the Company's leverage ratio. |
| (9) | Loan discounts recognized upon loan modification, net of accumulated amortization. |
| Xenia Hotels & Resorts, Inc. | |||||||||||
| Same-Property(1) Hotel EBITDA and Hotel EBITDA Margin | |||||||||||
| For the Three Months Ended March 31, 2019 and 2018 | |||||||||||
| ($ amounts in thousands) | |||||||||||
| Three Months Ended March 31, | |||||||||||
| 2019 | 2018 | Change | |||||||||
| Same-Property Revenues(1): | |||||||||||
| Rooms revenues | $ | 171,141 | $ | 164,409 | 4.1 | % | |||||
| Food and beverage revenues | 103,463 | 98,404 | 5.1 | % | |||||||
| Other revenues | 19,088 | 18,072 | 5.6 | % | |||||||
| Total Same-Property revenues | $ | 293,692 | $ | 280,885 | 4.6 | % | |||||
| Same-Property Expenses(1): | |||||||||||
| Rooms expenses | $ | 40,655 | $ | 40,340 | 0.8 | % | |||||
| Food and beverage expenses | 63,405 | 62,390 | 1.6 | % | |||||||
| Other direct expenses | 7,117 | 7,188 | (1.0) | % | |||||||
| Other indirect expenses | 71,381 | 68,691 | 3.9 | % | |||||||
| Management and franchise fees | 12,308 | 11,698 | 5.2 | % | |||||||
| Real estate taxes, personal property taxes and insurance | 13,059 | 12,148 | 7.5 | % | |||||||
| Ground lease expense | 979 | 1,032 | (5.1) | % | |||||||
| Total Same-Property hotel operating expenses | $ | 208,904 | $ | 203,487 | 2.7 | % | |||||
| Same-Property Hotel EBITDA(1) | $ | 84,788 | $ | 77,398 | 9.5 | % | |||||
| Same-Property Hotel EBITDA Margin(1) | 28.9 | % | 27.6 | % | 131 | bps | |||||
| (1) | "Same-Property" includes all hotels owned as of March 31, 2019. "Same-Property" includes periods prior to the Company's ownership of The Ritz-Carlton, Denver, Fairmont Pittsburgh, Park Hyatt Aviara Resort, Golf Club & Spa, and Waldorf Astoria Atlanta Buckhead. "Same-Property" also includes renovation disruption for multiple capital projects during the periods presented and natural disaster disruption at multiple properties in 2018. The following is a reconciliation of Total Revenues and Total Expenses consolidated on a GAAP basis to Total Same-Property Revenues and Total Same-Property Expenses for the three months ended March 31, 2019: |
| Three Months Ended December 31, | |||||||
| 2019 | 2018 | ||||||
| Total Revenues - GAAP | $ | 293,687 | $ | 264,498 | |||
| Hotel revenues from prior ownership(a) | — | 31,560 | |||||
| Hotel revenues from sold hotels | 5 | (15,173) | |||||
| Other revenues | — | — | |||||
| Total Same-Property Revenues | $ | 293,692 | $ | 280,885 | |||
| Total Hotel Operating Expenses - GAAP | $ | 195,889 | $ | 171,379 | |||
| Real estate taxes, personal property taxes and insurance | 13,059 | 11,859 | |||||
| Ground lease expense, net(b) | 979 | 1,455 | |||||
| Other expense / (income) | (63) | (60) | |||||
| Corporate-level costs and expenses | (883) | (423) | |||||
| Hotel expenses from prior ownership(a) | (19) | 28,706 | |||||
| Hotel expenses from sold hotels | (58) | (9,429) | |||||
| Total Same-Property Hotel Operating Expenses | $ | 208,904 | $ | 203,487 | |||
| (a) | The pre-acquisition operating results were obtained from the seller and/or the manager of the hotels during the acquisition due diligence process. We have made no adjustments to the historical operating amounts provided to us by the seller and/or the manager, other than to reflect the removal of historical intercompany lease revenue/expense or any other items that are not applicable to us under our ownership. The pre-acquisition operating results are not audited or reviewed by our independent auditors. Pre-acquisition operating results for periods prior to the Company's ownership have not been included in the Company's actual consolidated financial statements and are included only in "Same-Property" for comparison purposes. | ||
| (b) | Excludes amortization of ground lease intangibles. |
| Xenia Hotels & Resorts, Inc. | |||||
| Portfolio Data by Market | |||||
| As of March 31, 2019 | |||||
| Market(1) | % of Hotel EBITDA(2) | Number of Hotels | Number of Rooms | ||
| Orlando, FL | 10% | 3 | 1,141 | ||
| Houston, TX | 9% | 3 | 1,220 | ||
| Phoenix, AZ | 9% | 2 | 612 | ||
| San Francisco/San Mateo, CA | 7% | 1 | 688 | ||
| Dallas, TX | 7% | 2 | 961 | ||
| San Jose-Santa Cruz, CA | 6% | 1 | 505 | ||
| Boston, MA | 6% | 2 | 466 | ||
| California North | 5% | 2 | 416 | ||
| Atlanta, GA(2) | 5% | 2 | 649 | ||
| San Diego, CA(2) | 4% | 2 | 486 | ||
| Other(2) | 32% | 20 | 4,023 | ||
| Total | 100% | 40 | 11,167 | ||
| (1) | As defined by STR, Inc. |
| (2) | Percentage of 2018 Same-Property Hotel EBITDA. Includes periods prior to the Company's ownership of Waldorf Astoria Atlanta Buckhead in "Atlanta, GA", Park Hyatt Aviara Resort, Golf Club & Spa in "San Diego, CA", and Fairmont Pittsburgh and The Ritz-Carlton, Denver in "Other." |
| Xenia Hotels & Resorts, Inc. | |||||||||||||||||||||||||
| Same-Property(1) Statistical Data by Market | |||||||||||||||||||||||||
| For the Three Months Ended March 31, 2019 and 2018 | |||||||||||||||||||||||||
| Three Months Ended | Three Months Ended | ||||||||||||||||||||||||
| March 31, 2019 | March 31, 2018 | % Change | |||||||||||||||||||||||
| Occupancy | ADR | RevPAR | Occupancy | ADR | RevPAR | RevPAR | |||||||||||||||||||
| Market(2) | |||||||||||||||||||||||||
| Orlando, FL | 83.7 | % | $ | 226.91 | $ | 189.84 | 82.1 | % | $ | 232.02 | $ | 190.38 | (0.3) | % | |||||||||||
| Houston, TX | 73.7 | % | 181.84 | 133.96 | 67.1 | % | 186.38 | 125.11 | 7.1 | % | |||||||||||||||
| Phoenix, AZ | 81.8 | % | 374.44 | 306.38 | 85.7 | % | 346.91 | 297.17 | 3.1 | % | |||||||||||||||
| San Francisco/San Mateo, CA | 90.3 | % | 254.31 | 229.67 | 85.5 | % | 228.62 | 195.53 | 17.5 | % | |||||||||||||||
| Dallas, TX | 72.2 | % | 199.60 | 144.06 | 70.0 | % | 193.00 | 135.11 | 6.6 | % | |||||||||||||||
| San Jose-Santa Cruz, CA | 79.6 | % | 278.77 | 221.99 | 83.9 | % | 259.54 | 217.66 | 2.0 | % | |||||||||||||||
| Boston, MA | 81.3 | % | 188.20 | 153.08 | 75.2 | % | 197.67 | 148.71 | 2.9 | % | |||||||||||||||
| California North | 70.6 | % | 228.31 | 161.13 | 72.5 | % | 213.74 | 154.95 | 4.0 | % | |||||||||||||||
| Atlanta, GA | 75.6 | % | 217.23 | 164.26 | 80.8 | % | 186.82 | 151.01 | 8.8 | % | |||||||||||||||
| San Diego, CA | 69.4 | % | 267.98 | 186.08 | 72.7 | % | 257.69 | 187.38 | (0.7) | % | |||||||||||||||
| Other | 70.0 | % | 209.59 | 146.67 | 69.2 | % | 206.73 | 143.06 | 2.5 | % | |||||||||||||||
| Total | 75.1 | % | $ | 226.72 | $ | 170.28 | 74.1 | % | $ | 220.40 | $ | 163.41 | 4.2 | % | |||||||||||
| (1) | "Same-Property" includes all hotels owned as of March 31, 2019. "Same-Property" includes periods prior to the Company's ownership of The Ritz-Carlton, Denver, Fairmont Pittsburgh, Park Hyatt Aviara Resort, Golf Club & Spa, and Waldorf Astoria Atlanta Buckhead. "Same-Property" also includes renovation disruption for multiple capital projects during the periods presented and natural disaster disruption at multiple properties in 2018. The pre-acquisition operating results were obtained from the seller and/or the manager of the hotels during the acquisition due diligence process. We have made no adjustments to the historical operating amounts provided to us by the seller and/or the manager, other than to reflect the removal of historical intercompany lease revenue/expense or any other items that are not applicable to us under our ownership. The pre-acquisition operating results are not audited or reviewed by our independent auditors. Pre-acquisition operating results for periods prior to the Company's ownership have not been included in the Company's actual consolidated financial statements and are included only in "Same-Property" for comparison purposes. |
| (2) | As defined by STR, Inc. Market rank based on Portfolio Data by Market as presented on the prior page. |
| Xenia Hotels & Resorts, Inc. | ||||||||||||||||||||
| Same-Property(1) Historical Operating Data | ||||||||||||||||||||
| ($ amounts in thousands, except ADR and RevPAR) | ||||||||||||||||||||
| First Quarter | Second Quarter | Third Quarter | Fourth Quarter | Full Year | ||||||||||||||||
| 2019 | 2019 | 2019 | 2019 | 2019 | ||||||||||||||||
| Occupancy | 75.1 | % | ||||||||||||||||||
| ADR | $ | 226.72 | ||||||||||||||||||
| RevPAR | $ | 170.28 | ||||||||||||||||||
| Hotel Revenues | $ | 293,692 | ||||||||||||||||||
| Hotel EBITDA | $ | 84,788 | ||||||||||||||||||
| Hotel EBITDA Margin | 28.9 | % | ||||||||||||||||||
| First Quarter | Second Quarter | Third Quarter | Fourth Quarter | Full Year | ||||||||||||||||
| 2018 | 2018 | 2018 | 2018 | 2018 | ||||||||||||||||
| Occupancy | 74.1 | % | 79.2 | % | 75.4 | % | 72.4 | % | 75.3 | % | ||||||||||
| ADR | $ | 220.40 | $ | 225.65 | $ | 212.64 | $ | 219.33 | $ | 219.56 | ||||||||||
| RevPAR | $ | 163.41 | $ | 178.79 | $ | 160.27 | $ | 158.70 | $ | 165.27 | ||||||||||
| Hotel Revenues | $ | 280,885 | $ | 300,286 | $ | 264,617 | $ | 281,114 | $ | 1,126,902 | ||||||||||
| Hotel EBITDA | $ | 77,398 | $ | 92,639 | $ | 67,077 | $ | 77,550 | $ | 314,664 | ||||||||||
| Hotel EBITDA Margin | 27.6 | % | 30.9 | % | 25.3 | % | 27.6 | % | 27.9 | % | ||||||||||
| First Quarter | Second Quarter | Third Quarter | Fourth Quarter | Full Year | ||||||||||||||||
| 2017 | 2017 | 2017 | 2017 | 2017 | ||||||||||||||||
| Occupancy | 74.0 | % | 77.4 | % | 77.2 | % | 73.0 | % | 75.4 | % | ||||||||||
| ADR | $ | 222.48 | $ | 223.43 | $ | 206.54 | $ | 214.03 | $ | 216.55 | ||||||||||
| RevPAR | $ | 164.72 | $ | 172.99 | $ | 159.54 | $ | 156.19 | $ | 163.33 | ||||||||||
| Hotel Revenues | $ | 283,613 | $ | 292,368 | $ | 260,142 | $ | 275,739 | $ | 1,111,862 | ||||||||||
| Hotel EBITDA | $ | 79,494 | $ | 88,388 | $ | 67,240 | $ | 74,772 | $ | 309,894 | ||||||||||
| Hotel EBITDA Margin | 28.0 | % | 30.2 | % | 25.8 | % | 27.1 | % | 27.9 | % | ||||||||||
| (1) | "Same-Property" includes all hotels owned as of March 31, 2019. "Same-Property" includes periods prior to the Company's ownership of Hyatt Regency Grand Cypress, Hyatt Regency Scottsdale Resort & Spa at Gainey Ranch, Royal Palms Resort & Spa, The Ritz-Carlton, Pentagon City, The Ritz-Carlton, Denver, Fairmont Pittsburgh, Park Hyatt Aviara Resort, Golf Club & Spa, and Waldorf Astoria Atlanta Buckhead. "Same-Property" also includes renovation disruption for multiple capital projects during the periods presented and natural disaster disruption at multiple properties. These amounts include pre-acquisition operating results. The pre-acquisition operating results were obtained from the seller and/or the manager of the hotels during the acquisition due diligence process. We have made no adjustments to the historical operating amounts provided to us by the seller and/or the manager, other than to reflect the removal of historical intercompany lease revenue/expense or any other items that are not applicable to us under our ownership. The pre-acquisition operating results are not audited or reviewed by our independent auditors. Pre-acquisition operating results for periods prior to the Company's ownership have not been included in the Company's actual consolidated financial statements and are included only in "Same-Property" for comparison purposes. |
SOURCE Xenia Hotels & Resorts, Inc.