Pebblebrook Hotel Trust Reports Q2 2014 Net Income of $16.6M; Same-Property RevPAR Increased 9.2%
July 25, 2014 9:26am
(1) See tables later in this press release for a description of same-property information and reconciliations from net income (loss) to non-GAAP financial measures, including Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA"), Adjusted EBITDA, Funds from Operations ("FFO"), FFO per share, Adjusted FFO and Adjusted FFO per share.
For the details as to which hotels are included in Same-Property Revenue Per Available Room (“RevPAR”), Average Daily Rate (“ADR”), Occupancy, Revenues, Expenses, EBITDA and EBITDA Margins appearing in the table above and elsewhere in this press release, refer to the Same-Property Inclusion Reference Table later in this press release.
"We’re very excited about the terrific performance of our portfolio in the second quarter, as we continued to outperform the hotel industry’s strong growth,” said Jon E. Bortz, Chairman, President and Chief Executive Officer of Pebblebrook Hotel Trust. “Our hotels continue to realize healthy increases in travel demand from the business and leisure transient segments, as well as ongoing strength from inbound international travel. In addition, the group demand rebound that we experienced in the year accelerated in the second quarter. These positive demand trends, coupled with strong pricing power, contributed to the robust increases in our income and our cash flow. Based on the strong performance experienced in the overall industry and our portfolio during the first half of 2014, as well as the group and transient pace for the second half of the year, we are increasing our outlook for the U.S. hotel industry and our portfolio.”
Second Quarter Highlights
Capital Reinvestment and Asset Management
During the second quarter, the Company invested $10.1 million in capital improvements throughout its portfolio, including the Company’s 49 percent interest in its six hotel joint venture with Denihan Hospitality Group (the “Manhattan Collection”). The Company’s capital improvements included $1.9 million at Hotel Palomar San Francisco, $1.0 million at Hotel Vintage Seattle, $0.9 million at Radisson Hotel Fisherman’s Wharf, and $0.7 million at W Los Angeles - Westwood.
As of the end of the second quarter, the Company has completed the addition of four guest rooms at the Embassy Suites San Diego Bay Downtown and the comprehensive renovation and repositioning of the 125-room Hotel Vintage Park Seattle, which has been renamed Hotel Vintage Seattle. The Company has also substantially completed the restaurant and lobby renovations along with the addition of five guest rooms at the 201-room Hotel Palomar San Francisco.
During the fourth quarter of 2014, the Company plans to commence a comprehensive renovation and repositioning at the 355-room Radisson Hotel Fisherman’s Wharf, a guest rooms and public areas renovation of the 258-room W Los Angeles-Westwood, including the potential addition of 39 guest rooms, and a lobby and atrium renovation at the 341-room Embassy Suites San Diego Bay Downtown.
“We’re thrilled with the acquisition of these two terrific hotels located in our West Coast target markets of San Francisco and Portland,” commented Mr. Bortz. “We believe these properties offer great opportunities for outsized RevPAR growth, margin expansion and value creation through opportunistic capital investment and the implementation of our asset management and best practice initiatives in collaboration with our operating partners.”
As of June 30, 2014, the Company had $579.8 million in consolidated debt and $225.4 million in unconsolidated, non-recourse, secured debt at weighted-average interest rates of 4.2 percent and 3.6 percent, respectively. The Company’s total combined consolidated and unconsolidated weighted-average interest rate on its debt is 4.1 percent. The Company had $100.0 million outstanding in the form of an unsecured term loan and had a $36.0 million balance outstanding on its $200.0 million senior unsecured revolving credit facility. As of June 30, 2014, the Company had $53.8 million of consolidated cash, cash equivalents and restricted cash and $16.2 million of unconsolidated cash, cash equivalents and restricted cash. The unconsolidated debt, cash, cash equivalents and restricted cash amounts represent the Company’s 49 percent pro rata interest in the Manhattan Collection.
On June 30, 2014, as defined in the Company’s credit agreement, the Company’s fixed charge coverage ratio was 2.4 times and total net debt to trailing 12-month corporate EBITDA was 4.1 times. The Company’s total debt to total gross assets ratio was 30 percent. Excluding its interest in the off-balance sheet Manhattan Collection, the Company’s fixed charge coverage ratio was 2.4 times, total net debt to trailing 12-month corporate EBITDA was 3.5 times and total debt to total assets ratio was 27 percent.
The Company has increased its outlook for 2014, incorporating the expected impact of the Company’s various capital investment projects, the recent acquisitions of the Prescott Hotel and The Nines Hotel, the Company’s second quarter performance, and it assumes continued improvement in economic activity, positive business travel trends and other significant assumptions. The Company’s revised outlook for 2014 is as follows:
The Company’s outlook for 2014 and third quarter 2014 reflects the Company’s 49 percent pro rata interest in the Manhattan Collection.
The Company’s estimates and assumptions for Same-Property RevPAR, Same-Property RevPAR growth rate, Same-Property EBITDA, Same-Property EBITDA Margin and Same-Property EBITDA Margin growth rate for 2014 include the hotels owned as of July 24, 2014, as if they had been owned by the Company for the entire years of 2013 and 2014, except for the Prescott Hotel and The Nines Hotel, which are not included in the first and second quarters of 2013 and 2014. The Company’s 2014 outlook assumes no additional acquisitions beyond the hotels the Company owned as of July 24, 2014.
To view corresponding tables for this release please visit:
Tags: pebblebrook hotel trust,
q2 2014 results
Contact: Raymond D. Martz,
Chief Financial Officer
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