ANNAPOLIS,
Md.--Feb. 8, 2012-- Chesapeake Lodging Trust (NYSE: CHSP), a
lodging real estate investment trust (REIT), reported today its
financial results for the quarter ended December 31, 2011.
HIGHLIGHTS
- Acquisitions
– Acquired the 613-room Denver Marriott City Center for a
purchase price of $119.0 million and the Holiday
Inn New York City Midtown – 31st Street for a purchase
price of $52.2 million; On January 31, 2012,
announced definitive agreement to acquire the 185-room Hyatt Place New
York Midtown South for a purchase price of $76.5 million.
- Pro Forma
RevPAR – 8.3% increase for comparable 11-hotel portfolio
over the same period in 2010.
- Pro
Forma Adjusted Hotel EBITDA Margin– 280 basis
point increase for comparable 11-hotel portfolio over the same period
in 2010.
- Financings
– Closed on new three-year revolving credit facility, increasing
facility size and reducing cost of borrowing.
- Dividends
– Increased first quarter 2012 dividend by 10% to $0.22
per common share (5% annualized yield).
CONSOLIDATED FINANCIAL RESULTS
The following is a summary of the consolidated financial
results (in millions, except per share amounts):
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Three months ended |
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Year ended |
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December 31, |
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December 31, |
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2011(1)
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2010(2)
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2011(3)
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2010(4)
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Total revenue |
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$ |
56.1 |
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$ |
21.8 |
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|
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|
$ |
172.2 |
|
|
$ |
54.2 |
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Net income
(loss) available to common shareholders |
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$ |
2.9 |
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|
$ |
(1.5 |
) |
|
|
|
$ |
8.8 |
|
|
$ |
(0.8 |
) |
Net income
(loss) per diluted share |
|
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|
$ |
0.09 |
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|
$ |
(0.09 |
) |
|
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|
$ |
0.30 |
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|
$ |
(0.07 |
) |
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FFO available to
common shareholders |
|
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$ |
9.2 |
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|
$ |
0.7 |
|
|
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|
$ |
27.2 |
|
|
$ |
4.0 |
|
FFO per diluted
share |
|
|
|
$ |
0.29 |
|
|
$ |
0.04 |
|
|
|
|
$ |
0.92 |
|
|
$ |
0.36 |
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AFFO available
to common shareholders |
|
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|
$ |
10.1 |
|
|
$ |
3.0 |
|
|
|
|
$ |
32.7 |
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|
$ |
8.1 |
|
AFFO per diluted
share |
|
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|
$ |
0.32 |
|
|
$ |
0.18 |
|
|
|
|
$ |
1.11 |
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|
$ |
0.72 |
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Corporate EBITDA
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|
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$ |
14.4 |
|
|
$ |
1.3 |
|
|
|
|
$ |
40.5 |
|
|
$ |
5.8 |
|
|
|
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|
Adjusted
Corporate EBITDA |
|
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|
$ |
15.3 |
|
|
$ |
3.6 |
|
|
|
|
$ |
46.0 |
|
|
$ |
9.8 |
|
__________________________
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(1)
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Includes results
of operations of ten hotels for the full period and one hotel for part
of the period. |
(2)
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Includes results
of operations of four hotels for the full period and one hotel for part
of the period. |
(3)
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|
Includes results
of operations of five hotels for the full period and six hotels for
part of the period. |
(4)
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Includes results
of operations of five hotels for part of the period. |
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|
“2011 was an exceptional year for Chesapeake on various
fronts,” said James L. Francis, Chesapeake Lodging
Trust’s President and Chief Executive Officer. “We more than doubled
the size of our high-quality hotel portfolio by capitalizing on
attractive acquisition opportunities, added further flexibility to our
revolving credit facility and took advantage of the attractive interest
rate environment, and delivered strong operating results.”
Mr. Francis continued, “Our high-quality hotel portfolio
generated industry exceeding RevPAR growth and, coupled with our
aggressive asset management, produced strong improvements in margin
both during the quarter and for the year.”
HOTEL OPERATING RESULTS
Management assesses the operating performance of its hotels
irrespective of the hotel owner during the periods compared. Included
in the following table are comparisons of, on a pro forma basis,
occupancy, ADR, RevPAR, Adjusted Hotel EBITDA,
and Adjusted Hotel EBITDA Margin, the key
operating metrics that management uses to assess the performance of its
hotels. The key operating metrics include the hotel operating results
of 11 of the Trust’s 12 hotels owned as of December 31, 2011
(in thousands, except pro forma ADR and pro forma RevPAR). The key
operating metrics do not include operating results for the Holiday
Inn New York City Midtown – 31st Street, as the hotel
opened for business on January 19, 2012.
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Three months ended |
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Year ended |
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December 31, |
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December 31, |
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2011 |
|
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2010 |
|
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Change |
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2011 |
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2010 |
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|
Change |
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Pro forma
occupancy |
|
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|
74.4 |
% |
|
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|
71.5 |
% |
|
|
290 bps |
|
|
|
|
77.6 |
% |
|
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|
75.1 |
% |
|
|
250 bps |
Pro forma ADR |
|
|
|
$ |
177.94 |
|
|
|
$ |
170.97 |
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|
4.1% |
|
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|
$ |
175.13 |
|
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|
$ |
165.89 |
|
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|
5.6% |
Pro forma RevPAR
|
|
|
|
$ |
132.39 |
|
|
|
$ |
122.22 |
|
|
|
8.3% |
|
|
|
$ |
135.90 |
|
|
|
$ |
124.60 |
|
|
|
9.1% |
|
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|
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|
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|
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Pro forma
Adjusted Hotel EBITDA |
|
|
|
$ |
18,779 |
|
|
|
$ |
16,301 |
|
|
|
15.2% |
|
|
|
$ |
71,477 |
|
|
|
$ |
60,734 |
|
|
|
17.7% |
Pro forma
Adjusted Hotel EBITDA Margin |
|
|
|
|
31.9 |
% |
|
|
|
29.1 |
% |
|
|
280 bps |
|
|
|
|
31.7 |
% |
|
|
|
29.1 |
% |
|
|
260 bps |
|
Funds from operations (FFO), Adjusted FFO (AFFO), net income
before interest, income taxes, and depreciation and amortization
(Corporate EBITDA), Adjusted Corporate EBITDA, Hotel EBITDA,
Adjusted Hotel EBITDA and Adjusted
Hotel EBITDA Margin 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.
ACQUISITION ACTIVITY
On October 3, 2011, the Trust acquired the
613-room Denver Marriott City Center located in Denver, Colorado
for approximately $120.1 million, including acquired
working capital. The Trust funded the acquisition with available cash
on hand and by borrowing under its revolving credit facility. The Trust
has assumed the existing management agreement with Marriott
International, Inc. to continue operating the hotel.
On December 22, 2011, the Trust acquired the
122-room Holiday Inn New York City Midtown – 31st
Street located in New
York, New York for $52.6 million, including
acquired working capital. The Trust funded the acquisition with a
borrowing under its revolving credit facility. The Trust entered into a
management agreement with Real Hospitality Group to operate
the hotel. The newly developed hotel opened for business on January
19, 2012.
FINANCING ACTIVITY
On October 14, 2011, the Trust amended its
credit agreement providing for a new three-year secured revolving
credit facility. The maximum amount that the Trust may borrow under the
facility increased from $150.0 million to $200.0 million
and provides for the possibility of further future increases, up to a
maximum of $300.0 million, in accordance with certain
terms. The amount that the Trust can borrow under the revolving credit
facility is based on the value of the Trust's hotels included in the
borrowing base, as defined in the credit agreement. The interest rate
for borrowings under the new facility was reduced to LIBOR, plus 2.75%
- 3.75% (the spread over LIBOR based on the Trust’s consolidated
leverage ratio), as compared to LIBOR plus 3.75%, subject to a LIBOR
floor of 2.00%, under the previous facility. The amended credit
agreement contains standard financial covenants, including certain
leverage ratios, coverage ratios, and a minimum tangible net worth
requirement. Subject to certain conditions, the facility allows for a
one-year extension.
DIVIDENDS
On October 14, 2011, the Trust paid a
dividend of $0.20 per share to its common shareholders
of record as of September 30, 2011. On December
15, 2011, the Trust declared a dividend in the amount of $0.20
per share payable to its common shareholders of record as of December
31, 2011. The dividend was paid on January 13, 2012.
On February 8, 2012, the Trust declared a
dividend in the amount of $0.22 per share payable to
its common shareholders of record as of March 31, 2012.
The dividend will be paid on April 13, 2012.
POST-QUARTER ACTIVITY
On January 31, 2012, the Trust announced it
had entered into a definitive agreement to acquire the 185-room Hyatt
Place New York Midtown South located in New York, New York
for a purchase price of $76.5 million, or approximately
$414,000 per key. The hotel is currently under
development at 52-54 West 36th Street, between 5th
Avenue and 6th Avenue. Closing on the proposed acquisition
is expected to occur following completion of the hotel by the seller,
anticipated in the third quarter 2012, and satisfaction of customary
closing conditions.
2012 OUTLOOK
Based on the operating trends and fundamentals of the Trust’s
current 12-hotel portfolio and the Hyatt Place New York Midtown South
that is expected to close in the third quarter 2012, the Trust
estimates these assets will produce the following results for 2012:
- Pro forma RevPAR to increase in
the range of 6.5% to 8.5% over 2011;
- Net income available to common
shareholders will range from $19.2 million to $22.1 million;
- Adjusted Hotel EBITDA
will range from $82.3 million to $85.6 million; and
- AFFO per diluted share will range
from $1.55 to $1.64.
“Our well-positioned hotel portfolio concentrated in major
markets will benefit from strong convention calendars and growing
corporate and international tourism demand in 2012. Coupled with
little-to-no supply growth in our current markets, we expect the
portfolio to generate strong returns on investment and to produce
meaningful free cash flow for our shareholders,” said James L.
Francis.
NON-GAAP FINANCIAL MEASURES
The Trust reports the following seven non-GAAP financial
measures that it believes are useful to investors as key measures of
its operating performance: (1) FFO, (2) AFFO, (3) Corporate EBITDA, (4)
Adjusted Corporate EBITDA, (5) Hotel EBITDA, (6) Adjusted
Hotel EBITDA and (7) Adjusted Hotel EBITDA Margin.
A reconciliation of these non-GAAP financial measures is included in
the accompanying financial tables.
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, 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.
AFFO – The Trust further adjusts FFO 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 unfavorable contract
liabilities. The Trust believes that AFFO provides investors with
another financial measure of its operating performance that provides
for greater comparability of its core operating results between
periods.
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 unfavorable contract
liabilities. 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.
Hotel EBITDA – Hotel EBITDA
is defined as total revenues less total hotel operating expenses. The
Trust believes that Hotel EBITDA provides
investors a useful financial measure to evaluate the Trust’s hotel
operating performance.
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 unfavorable contract
liabilities. The Trust believes that Adjusted Hotel EBITDA
provides investors with another useful financial measure to evaluate
the Trust’s hotel operating performance.
Adjusted Hotel EBITDA Margin – Adjusted
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.
CONFERENCE CALL
The Trust will host a conference call on Wednesday,
February 8, 2012 at 5:30 p.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
44853546. 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 February 15, 2012.
To access the replay, dial (855) 859-2056 (U.S./Canadian callers) or
(404) 537-3406 (International callers). The conference call ID is
44853546. 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 and extended-stay hotels in urban settings or
unique locations in the
United States. The Trust owns 12 hotels with an aggregate of
3,516 rooms in six 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 expectations regarding
the future Hotel EBITDA and Adjusted
Hotel EBITDA of its existing and to be acquired hotels and
the Trust’s 2012 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: our ability to complete acquisitions; our ability to
continue to satisfy complex rules in order for us to remain a REIT for
federal income tax purposes; and other risks and uncertainties
associated with our business described in the Trust’s 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 February 8, 2012, 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.
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|
CHESAPEAKE
LODGING TRUST |
|
|
|
CONSOLIDATED
BALANCE SHEETS |
|
|
|
(in
thousands, except share data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, |
|
|
|
2011 |
|
|
2010 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ASSETS |
|
|
|
|
|
|
Property and
equipment, net |
|
|
$ |
879,224 |
|
|
|
$ |
364,940 |
|
Intangible
assets, net |
|
|
|
39,982 |
|
|
|
|
35,694 |
|
Cash and cash
equivalents |
|
|
|
20,960 |
|
|
|
|
10,551 |
|
Restricted cash |
|
|
|
15,034 |
|
|
|
|
2,588 |
|
Accounts
receivable, net |
|
|
|
6,302 |
|
|
|
|
4,186 |
|
Prepaid expenses
and other assets |
|
|
|
4,370 |
|
|
|
|
4,606 |
|
Deferred
financing costs, net |
|
|
|
5,266 |
|
|
|
|
2,743 |
|
Total
assets |
|
|
$ |
971,138 |
|
|
|
$ |
425,308 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY |
|
|
|
|
|
|
Long-term debt |
|
|
$
|
407,736 |
|
|
|
$ |
105,000 |
|
Accounts payable
and accrued expenses |
|
|
|
21,475 |
|
|
|
|
11,160 |
|
Other
liabilities |
|
|
|
21,798 |
|
|
|
|
3,892 |
|
Total
liabilities |
|
|
|
451,009 |
|
|
|
|
120,052 |
|
|
|
|
|
|
|
|
Commitments and
contingencies |
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred shares, $.01 par value;
100,000,000 shares authorized; no shares issued and outstanding,
respectively
|
|
|
|
-
|
|
|
|
|
- |
|
Common shares, $.01 par value;
400,000,000 shares authorized; 32,161,620 shares and 18,435,670 shares
issued and outstanding, respectively
|
|
|
|
322 |
|
|
|
|
184 |
|
Additional
paid-in capital |
|
|
|
543,861 |
|
|
|
|
311,303 |
|
Cumulative
dividends in excess of net income |
|
|
|
(22,924 |
) |
|
|
|
(6,231 |
) |
Accumulated other comprehensive loss |
|
|
|
(1,130 |
) |
|
|
|
- |
|
Total
shareholders' equity |
|
|
|
520,129 |
|
|
|
|
305,256 |
|
|
|
|
|
|
|
|
Total
liabilities and shareholders' equity |
|
|
$ |
971,138 |
|
|
|
$ |
425,308 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CHESAPEAKE
LODGING TRUST |
|
|
|
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED
STATEMENTS OF OPERATIONS |
|
|
|
|
|
|
|
|
|
|
|
|
|
(in
thousands, except share and per share data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31, |
|
|
Year Ended December 31, |
|
|
|
|
2011 |
|
|
2010 |
|
|
2011 |
|
|
2010 |
|
|
|
|
(unaudited) |
|
|
|
|
|
|
REVENUE |
|
|
|
|
|
|
|
|
|
|
|
|
|
Rooms |
|
|
|
$ |
40,967 |
|
|
|
$ |
14,365 |
|
|
|
$ |
128,730 |
|
|
|
$ |
38,530 |
|
Food and
beverage |
|
|
|
|
13,389 |
|
|
|
|
6,659 |
|
|
|
|
37,781 |
|
|
|
|
13,758 |
|
Other |
|
|
|
|
1,774 |
|
|
|
|
742 |
|
|
|
|
5,680 |
|
|
|
|
1,906 |
|
Total
revenue |
|
|
|
|
56,130 |
|
|
|
|
21,766 |
|
|
|
|
172,191 |
|
|
|
|
54,194 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EXPENSES |
|
|
|
|
|
|
|
|
|
|
|
|
|
Hotel operating
expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Rooms |
|
|
|
|
9,562 |
|
|
|
|
3,706 |
|
|
|
|
30,110 |
|
|
|
|
9,104 |
|
Food and
beverage |
|
|
|
|
9,224 |
|
|
|
|
4,332 |
|
|
|
|
27,682 |
|
|
|
|
9,414 |
|
Other direct |
|
|
|
|
899 |
|
|
|
|
422
|
|
|
|
|
2,785 |
|
|
|
|
1,053 |
|
Indirect
|
|
|
|
|
18,638 |
|
|
|
|
7,299 |
|
|
|
|
55,550 |
|
|
|
|
17,770 |
|
Total hotel
operating expenses |
|
|
|
|
38,323 |
|
|
|
|
15,759 |
|
|
|
|
116,127 |
|
|
|
|
37,341 |
|
Depreciation and
amortization |
|
|
|
|
6,312 |
|
|
|
|
2,241 |
|
|
|
|
18,382 |
|
|
|
|
4,793 |
|
Air rights
contract amortization |
|
|
|
|
130 |
|
|
|
|
130 |
|
|
|
|
520 |
|
|
|
|
411 |
|
Corporate
general and administrative: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Share-based
compensation |
|
|
|
|
808 |
|
|
|
|
429 |
|
|
|
|
3,094 |
|
|
|
|
1,689 |
|
Hotel
acquisition costs |
|
|
|
|
811 |
|
|
|
|
2,149 |
|
|
|
|
5,081 |
|
|
|
|
3,597 |
|
Other |
|
|
|
|
1,674 |
|
|
|
|
2,000 |
|
|
|
|
6,902 |
|
|
|
|
5,396 |
|
Total
operating expenses |
|
|
|
|
48,058 |
|
|
|
|
22,708 |
|
|
|
|
150,106 |
|
|
|
|
53,227 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss) |
|
|
|
|
8,072 |
|
|
|
|
(942 |
) |
|
|
|
22,085 |
|
|
|
|
967 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income |
|
|
|
|
5 |
|
|
|
|
24 |
|
|
|
|
145 |
|
|
|
|
120 |
|
Interest expense
|
|
|
|
|
(4,863 |
) |
|
|
|
(1,012 |
) |
|
|
|
(12,868 |
) |
|
|
|
(2,344 |
) |
Loss on
early extinguishment of debt |
|
|
|
|
- |
|
|
|
|
- |
|
|
|
|
(208 |
) |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss)
before income taxes |
|
|
|
|
3,214 |
|
|
|
|
(1,930 |
) |
|
|
|
9,154 |
|
|
|
|
(1,257 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
tax benefit (expense) |
|
|
|
|
(273 |
) |
|
|
|
458 |
|
|
|
|
(118 |
) |
|
|
|
583 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income (loss) |
|
|
|
$ |
2,941 |
|
|
|
$ |
(1,472 |
) |
|
|
$ |
9,036 |
|
|
|
$ |
(674 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EARNINGS PER
SHARE: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss) |
|
|
|
$ |
2,941 |
|
|
|
$ |
(1,472 |
) |
|
|
$ |
9,036 |
|
|
|
$ |
(674 |
) |
Less: Dividends declared on
unvested time-based awards
|
|
|
|
|
(61 |
) |
|
|
|
(43 |
) |
|
|
|
(242 |
) |
|
|
|
(85 |
) |
Less: Undistributed earnings
allocated to unvested time-based awards
|
|
|
|
|
- |
|
|
|
|
- |
|
|
|
|
- |
|
|
|
|
- |
|
Net
income (loss) available to common shareholders |
|
|
|
$ |
2,880 |
|
|
|
$ |
(1,515 |
) |
|
|
$ |
8,794 |
|
|
|
$ |
(759 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss) per common share - basic and diluted |
|
|
|
$ |
0.09 |
|
|
|
$ |
(0.09 |
) |
|
|
$ |
0.30 |
|
|
|
$ |
(0.07 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average number of common
shares outstanding - basic and diluted
|
|
|
|
|
31,794,886 |
|
|
|
|
16,999,861 |
|
|
|
|
29,413,841 |
|
|
|
|
11,236,120 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CHESAPEAKE
LODGING TRUST |
|
|
|
|
|
|
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS |
|
|
|
|
|
|
|
(in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, |
|
|
|
|
2011 |
|
|
2010 |
|
|
|
|
|
|
|
|
Cash flows from
operating activities: |
|
|
|
|
|
|
|
Net income
(loss) |
|
|
|
$ |
9,036 |
|
|
|
$ |
(674 |
) |
Adjustments to reconcile net
income (loss) to net cash provided by operating activities:
|
|
|
|
|
|
|
|
Depreciation and
amortization |
|
|
|
|
18,382 |
|
|
|
|
4,793 |
|
Air rights
contract amortization |
|
|
|
|
520 |
|
|
|
|
411 |
|
Ground lease
asset amortization |
|
|
|
|
20 |
|
|
|
|
- |
|
Deferred
financing costs amortization |
|
|
|
|
2,189 |
|
|
|
|
641 |
|
Premium on
mortgage loan amortization |
|
|
|
|
(105 |
) |
|
|
|
- |
|
Unfavorable
contract liability amortization |
|
|
|
|
(98 |
) |
|
|
|
- |
|
Loss on early
extinguishment of debt |
|
|
|
|
208 |
|
|
|
|
- |
|
Share-based
compensation |
|
|
|
|
3,094 |
|
|
|
|
1,689 |
|
Changes in
assets and liabilities: |
|
|
|
|
|
|
|
Accounts
receivable, net |
|
|
|
|
1,371 |
|
|
|
|
(1,531 |
) |
Prepaid expenses
and other assets |
|
|
|
|
(363 |
) |
|
|
|
(909 |
) |
Accounts payable
and accrued expenses |
|
|
|
|
2,472 |
|
|
|
|
7,566 |
|
Other
liabilities |
|
|
|
|
(18 |
) |
|
|
|
213 |
|
Net cash
provided by operating activities |
|
|
|
|
36,708 |
|
|
|
|
12,199 |
|
|
|
|
|
|
|
|
|
Cash flows from
investing activities: |
|
|
|
|
|
|
|
Acquisition of
hotels, net of cash acquired |
|
|
|
|
(483,702 |
) |
|
|
|
(404,197 |
) |
Deposit on hotel
acquisitions |
|
|
|
|
-
|
|
|
|
|
(2,000
|
) |
Receipt of
deposit on hotel acquisitions |
|
|
|
|
2,000 |
|
|
|
|
-
|
|
Improvements and
additions to hotels |
|
|
|
|
(3,389 |
) |
|
|
|
(2,414 |
) |
Change
in restricted cash |
|
|
|
|
(6,900 |
) |
|
|
|
(2,588 |
) |
Net cash
used in investing activities |
|
|
|
|
(491,991 |
) |
|
|
|
(411,199 |
) |
|
|
|
|
|
|
|
|
Cash flows from
financing activities: |
|
|
|
|
|
|
|
Proceeds from
sale of common shares, net of underwriting fees |
|
|
|
|
230,291 |
|
|
|
|
312,158 |
|
Payment of
offering costs related to sale of common shares |
|
|
|
|
(491 |
) |
|
|
|
(2,134 |
) |
Net borrowings
under revolving credit facility |
|
|
|
|
100,000 |
|
|
|
|
45,000 |
|
Proceeds from
issuance of mortgage debt |
|
|
|
|
225,000 |
|
|
|
|
60,000 |
|
Principal
prepayment on mortgage debt |
|
|
|
|
(60,000 |
) |
|
|
|
-
|
|
Scheduled
principal payments on mortgage debt |
|
|
|
|
(781 |
) |
|
|
|
-
|
|
Payment of
deferred financing costs |
|
|
|
|
(4,920 |
) |
|
|
|
(3,384 |
) |
Purchase of
interest rate cap |
|
|
|
|
(262 |
) |
|
|
|
-
|
|
Payment of
dividends to common shareholders |
|
|
|
|
(22,936 |
) |
|
|
|
(1,862 |
) |
Repurchase of
common shares |
|
|
|
|
(209 |
) |
|
|
|
(1 |
) |
Repayment of related-party loan |
|
|
|
|
- |
|
|
|
|
(249 |
) |
Net cash
provided by financing activities |
|
|
|
|
465,692 |
|
|
|
|
409,528 |
|
Net increase in
cash |
|
|
|
|
10,409 |
|
|
|
|
10,528 |
|
Cash and
cash equivalents, beginning of period |
|
|
|
|
10,551 |
|
|
|
|
23 |
|
Cash and
cash equivalents, end of period |
|
|
|
$ |
20,960 |
|
|
|
$ |
10,551 |
|
|
|
|
|
|
|
|
|
|
CHESAPEAKE
LODGING TRUST |
RECONCILIATION
OF NON-GAAP FINANCIAL MEASURES |
(in
thousands, except per share data) |
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following table reconciles
net income (loss) available to common shareholders to FFO and AFFO
available to common shareholders for the three months and year ended
December 31, 2011 and 2010:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31, |
|
Year Ended December 31, |
|
|
|
|
|
2011 |
|
|
|
2010 |
|
|
|
2011 |
|
|
|
2010 |
|
|
|
|
|
|
|
|
|
|
|
|
Net
income (loss) available to common shareholders |
|
$ |
2,880 |
|
|
$ |
(1,515 |
) |
|
$ |
8,794 |
|
|
$ |
(759 |
) |
Add: |
|
Depreciation and amortization |
|
|
6,312 |
|
|
|
2,241 |
|
|
|
18,382 |
|
|
|
4,793 |
|
FFO
available to common shareholders |
|
|
9,192 |
|
|
|
726 |
|
|
|
27,176 |
|
|
|
4,034 |
|
|
|
|
|
|
|
|
|
|
|
|
Add: |
|
Hotel
acquisition costs |
|
|
811 |
|
|
|
2,149 |
|
|
|
5,081 |
|
|
|
3,597 |
|
|
|
Non-cash
amortization(1) |
|
|
60 |
|
|
|
135 |
|
|
|
470 |
|
|
|
421 |
|
AFFO available to common shareholders |
|
$ |
10,063 |
|
|
$ |
3,010 |
|
|
$ |
32,727 |
|
|
$ |
8,052 |
|
|
|
|
|
|
|
|
|
|
|
|
FFO
per common share - basic and diluted |
|
$ |
0.29 |
|
|
$
|
0.04
|
|
|
$ |
0.92 |
|
|
$ |
0.36 |
|
|
|
|
|
|
|
|
|
|
|
|
AFFO
per common share - basic and diluted |
|
$ |
0.32 |
|
|
$ |
0.18 |
|
|
$ |
1.11 |
|
|
$ |
0.72 |
|
|
|
|
|
|
|
|
|
|
|
|
(1)
Includes non-cash amortization of ground lease asset, deferred
franchise costs, unfavorable contract liability, and air rights
contract. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following table reconciles
net income (loss) to Corporate EBITDA and Adjusted Corporate EBITDA for
the three months and year ended December 31, 2011 and 2010:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31, |
|
Year Ended December 31, |
|
|
|
|
|
2011 |
|
|
|
2010 |
|
|
|
2011 |
|
|
|
2010 |
|
|
|
|
|
|
|
|
|
|
|
|
Net
income (loss) |
|
$ |
2,941 |
|
|
$ |
(1,472 |
) |
|
$
|
9,036
|
|
|
$ |
(674 |
) |
Add: |
|
Depreciation and
amortization |
|
|
6,312 |
|
|
|
2,241 |
|
|
|
18,382 |
|
|
|
4,793 |
|
|
|
Interest expense
|
|
|
4,863 |
|
|
|
1,012 |
|
|
|
12,868 |
|
|
|
2,344 |
|
|
|
Loss on early
extinguishment of debt |
|
|
-
|
|
|
|
- |
|
|
|
208
|
|
|
|
-
|
|
|
|
Income tax
expense (benefit) |
|
|
273 |
|
|
|
(458 |
) |
|
|
118 |
|
|
|
(583 |
) |
Less: |
|
Interest
income |
|
|
(5 |
) |
|
|
(24 |
) |
|
|
(145 |
) |
|
|
(120 |
) |
Corporate EBITDA |
|
|
14,384 |
|
|
|
1,299 |
|
|
|
40,467 |
|
|
|
5,760 |
|
|
|
|
|
|
|
|
|
|
|
|
Add: |
|
Hotel
acquisition costs |
|
|
811 |
|
|
|
2,149 |
|
|
|
5,081 |
|
|
|
3,597 |
|
|
|
Non-cash
amortization(1) |
|
|
60 |
|
|
|
135 |
|
|
|
470 |
|
|
|
421 |
|
Adjusted Corporate EBITDA |
|
$ |
15,255 |
|
|
$ |
3,583 |
|
|
$ |
46,018 |
|
|
$ |
9,778 |
|
|
|
|
|
|
|
|
|
|
|
|
(1)
Includes non-cash amortization of ground lease asset, deferred
franchise costs, unfavorable contract liability, and air rights
contract. |
|
|
|
|
|
|
|
|
|
|
|
The following table calculates
for comparable 11-hotel portfolio owned during the quarter pro forma
Hotel EBITDA, Adjusted Hotel EBITDA and Adjusted Hotel EBITDA Margin
for the three months and year ended December 31, 2011 and 2010:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31, |
|
Year Ended December 31, |
|
|
|
|
|
2011 |
|
|
|
2010 |
|
|
|
2011 |
|
|
|
2010 |
|
|
|
|
|
|
|
|
|
|
|
|
Total revenue |
|
$ |
58,956 |
|
|
$ |
55,971 |
|
|
$ |
225,613 |
|
|
$ |
208,504 |
|
Less: Total hotel operating expenses |
|
|
40,107 |
|
|
|
39,675 |
|
|
|
154,086 |
|
|
|
147,780 |
|
Hotel EBITDA |
|
|
18,849 |
|
|
|
16,296 |
|
|
|
71,527 |
|
|
|
60,724 |
|
|
|
|
|
|
|
|
|
|
|
|
Less: |
|
Non-cash
amortization(1) |
|
|
(70 |
) |
|
|
5 |
|
|
|
(50 |
) |
|
|
10 |
|
Adjusted Hotel EBITDA |
|
$ |
18,779 |
|
|
$ |
16,301 |
|
|
$ |
71,477 |
|
|
$ |
60,734 |
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Hotel EBITDA Margin |
|
|
31.9 |
% |
|
|
29.1 |
% |
|
|
31.7 |
% |
|
|
29.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
(1)
Includes non-cash amortization of ground lease asset, deferred
franchise costs, and unfavorable contract liability. |
|
|
|
|
|
|
|
The
following table calculates forecasted Hotel EBITDA and Adjusted Hotel
EBITDA for the year ending December 31, 2012: |
|
|
|
|
|
|
|
|
|
2012 |
|
|
|
Low |
|
High |
|
|
|
|
|
|
Total revenue |
|
$ |
251,850 |
|
|
$ |
256,900 |
|
Less:
|
Total hotel operating expenses
|
|
|
169,270 |
|
|
|
171,020 |
|
Hotel EBITDA |
|
|
82,580 |
|
|
|
85,880 |
|
|
|
|
|
|
|
Less: |
Non-cash
amortization(1) |
|
|
(280 |
) |
|
|
(280 |
) |
Adjusted Hotel EBITDA |
|
$ |
82,300 |
|
|
$ |
85,600 |
|
|
|
|
|
|
|
(1)
Includes non-cash amortization of ground lease asset, deferred
franchise costs, and unfavorable contract liability. |
|
|
|
|
|
|
|
|
|
|
|
|
The following table reconciles
forecasted net income available to common shareholders to FFO and AFFO
available to common shareholders for the year ending December 31, 2012:
|
|
|
|
2012 |
|
|
|
Low |
|
High |
|
|
|
|
|
|
Net
income available to common shareholders |
|
$ |
19,220 |
|
|
$ |
22,070 |
|
Add: |
Depreciation and amortization |
|
|
27,660 |
|
|
|
27,660 |
|
FFO
available to common shareholders |
|
|
46,880 |
|
|
|
49,730 |
|
|
|
|
|
|
|
Add: |
Hotel
acquisition costs |
|
|
2,480 |
|
|
|
2,480 |
|
|
Non-cash
amortization(1) |
|
|
240 |
|
|
|
240 |
|
AFFO available to common shareholders |
|
$ |
49,600 |
|
|
$ |
52,450 |
|
|
|
|
|
|
|
FFO
per diluted common share |
|
$ |
1.47 |
|
|
$ |
1.56 |
|
|
|
|
|
|
|
AFFO
per diluted common share |
|
$ |
1.55 |
|
|
$ |
1.64 |
|
|
|
|
|
|
|
Weighted-average number of diluted common shares outstanding |
|
|
31,905 |
|
|
|
31,905 |
|
|
|
|
|
|
|
(1)
Includes non-cash amortization of ground lease asset, deferred
franchise costs, unfavorable contract liability, and air rights
contract. |
|
|
|
|
CHESAPEAKE
LODGING TRUST |
CURRENT
HOTEL PORTFOLIO |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchase Price |
|
|
Hotel |
|
Location |
|
Rooms |
|
(in millions) |
|
Acquisition Date |
|
|
|
|
|
|
|
|
|
|
|
|
1 |
|
Hyatt Regency
Boston |
|
Boston, MA |
|
502 |
|
$ |
112.00 |
|
|
March 18, 2010 |
2 |
|
Hilton Checkers
Los Angeles |
|
Los Angeles, CA |
|
188 |
|
|
46.00 |
|
|
June 1, 2010 |
3 |
|
Courtyard
Anaheim at Disneyland Resort |
|
Anaheim, CA |
|
153 |
|
|
25.00 |
|
|
July 30, 2010 |
4 |
|
Boston Marriott
Newton |
|
Newton, MA |
|
430 |
|
|
77.25 |
|
|
July 30, 2010 |
5 |
|
Le Meridien San
Francisco |
|
San Francisco,
CA |
|
360 |
|
|
143.00 |
|
|
December 15,
2010 |
6 |
|
Homewood Suites
Seattle Convention Center |
|
Seattle, WA |
|
195 |
|
|
53.00 |
|
|
May 2, 2011 |
7 |
|
W Chicago - City
Center |
|
Chicago, IL |
|
368 |
|
|
128.80 |
|
|
May 10, 2011 |
8 |
|
Hotel Indigo San
Diego Gaslamp Quarter |
|
San Diego, CA |
|
210 |
|
|
55.50 |
|
|
June 17, 2011 |
9 |
|
Courtyard
Washington Capitol Hill/Navy Yard |
|
Washington, DC |
|
204 |
|
|
68.00 |
|
|
June 30, 2011 |
10
|
|
Hotel Adagio |
|
San Francisco,
CA |
|
171 |
|
|
42.25 |
|
|
July 8, 2011 |
11
|
|
Denver Marriott
City Center |
|
Denver, CO |
|
613 |
|
|
119.00 |
|
|
October 3, 2011 |
12
|
|
Holiday Inn New
York City Midtown - 31st Street |
|
New York, NY |
|
122 |
|
|
52.20 |
|
|
December 22,
2011 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,516 |
|
$ |
922.00 |
|
|
|