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8-K - 8-K - Chesapeake Lodging Trustchsp-20160428x8k.htm
 
 
 
 
 
Exhibit 99.1
 
PRESS RELEASE
For Immediate Release
 Contact: Douglas W. Vicari (410) 972-4142
 
 
 


 CHESAPEAKE LODGING TRUST REPORTS FIRST QUARTER RESULTS;
PRO FORMA REVPAR INCREASED 10.1%

ANNAPOLIS, MD, April 28, 2016 – Chesapeake Lodging Trust (NYSE:CHSP), a lodging real estate investment trust (REIT), reported today its financial results for the quarter ended March 31, 2016.
HIGHLIGHTS
RevPAR: 10.1% pro forma increase for the hotel portfolio over the same period in 2015.
Adjusted Hotel EBITDA Margin: 360 basis point pro forma increase to 28.5% for the hotel portfolio over the same period in 2015.
Adjusted Hotel EBITDA: $40.1 million.
Adjusted Corporate EBITDA: $34.8 million.
Adjusted FFO: $26.0 million or $0.44 per diluted common share.
Financings: Subsequent to quarter end, prepaid without penalty its previous Hyatt Regency Boston loan.
CONSOLIDATED FINANCIAL RESULTS
The following is a summary of the consolidated financial results for the three months ended March 31, 2016 and 2015 (in millions, except share and per share amounts):
 
 
 
Three Months Ended March 31,
 
 
2016
 
2015
Total revenue
 
$
140.6

 
$
109.3

 
 
 
 
 
Net income (loss) available to common shareholders
 
$
7.6

 
$
(0.9
)
Net income (loss) per diluted common share
 
$
0.13

 
$
(0.02
)
 
 
 
 
 
Adjusted Hotel EBITDA
 
$
40.1

 
$
25.3

 
 
 
 
 
Adjusted Corporate EBITDA
 
$
34.8

 
$
20.7

 
 
 
 
 
AFFO available to common shareholders
 
$
26.0

 
$
14.3

AFFO per diluted common share
 
$
0.44

 
$
0.26

 
 
 
 
 
Weighted-average number of diluted common shares outstanding
 
59,247,219

 
54,178,494





 
 
 
 
 
 
 
PRESS RELEASE
For Immediate Release
 Contact: Douglas W. Vicari (410) 972-4142
 
 
 







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 March 31, 2016, the Trust owned 22 hotels. Since two of its hotels owned as of March 31, 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 months ended March 31, 2015.
Included in the following table are comparisons of the key operating metrics for the hotel portfolio for the three months ended March 31, 2016 and 2015 (in thousands, except for ADR and RevPAR):

 
 
Three Months Ended March 31,
 
 
2016
 
2015(1)
 
Change
Occupancy
 
78.8
%
 
72.0
%
 
680 bps
ADR
 
$
216.28

 
$
214.86

 
0.7%
RevPAR
 
$
170.35

 
$
154.78

 
10.1%
 
 
 
 
 
 
 
Adjusted Hotel EBITDA
 
$
40,051

 
$
31,668

 
26.5%
Adjusted Hotel EBITDA Margin
 
28.5
%
 
24.9
%
 
360 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.







 
 
 
 
 
 
 
PRESS RELEASE
For Immediate Release
 Contact: Douglas W. Vicari (410) 972-4142
 
 
 







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 January 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 December 31, 2015. On March 16, 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 March 31, 2016. Both dividends were paid on April 15, 2016.
POST-QUARTER 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. The Trust is currently in discussions with a lender on obtaining a commitment for a new mortgage loan to be secured by the Hyatt Regency Boston.
On April 14, 2016, the Trust sold the separate, five-room villa building and related land parcel at the Hyatt Centric Santa Barbara for $2.1 million. The Trust expects to recognize an approximate $0.6 million gain on sale of hotel in the second quarter 2016.











 
 
 
 
 
 
 
PRESS RELEASE
For Immediate Release
 Contact: Douglas W. Vicari (410) 972-4142
 
 
 







2016 OUTLOOK
The Trust is updating its 2016 outlook to incorporate its first quarter results and recent operating trends and fundamentals. The updated outlook assumes no acquisitions, dispositions, or financing transactions beyond the refinance of the Hyatt Regency Boston mortgage loan, which was prepaid without penalty on April 6, 2016, and the Courtyard Washington Capitol Hill/Navy Yard mortgage loan, which is prepayable without penalty on August 1, 2016 (in millions, except RevPAR and per share amounts):
 
Second Quarter 2016
 
Outlook
 
 
Low
 
High
CONSOLIDATED:
 
 
 
 
 
 
 
 
 
Net income available to common shareholders
 
$
24.5

 
$
26.7

Net income per diluted common share
 
$
0.41

 
$
0.45

 
 
 
 
 
Adjusted Corporate EBITDA
 
$
56.7

 
$
59.2

 
 
 
 
 
AFFO available to common shareholders
 
$
42.6

 
$
44.9

AFFO per diluted common share
 
$
0.72

 
$
0.76

 
 
 
 
 
Corporate cash general and administrative expense
 
$
2.6

 
$
2.8

Corporate non-cash general and administrative expense
 
$
2.4

 
$
2.4

 
 
 
 
 
Weighted-average number of diluted common shares outstanding
 
59.2

 
59.2

 
 
 
 
 
22-HOTEL PORTFOLIO:
 
 
 
 
 
 
 
 
 
RevPAR
 
$
212.00

 
$
216.00

Pro forma RevPAR increase over 2015(1)
 
4.0
%
 
6.0
%
Adjusted Hotel EBITDA
 
$
61.7

 
$
64.4

Adjusted Hotel EBITDA Margin
 
36.4
%
 
37.1
%
Pro forma Adjusted Hotel EBITDA Margin increase over 2015(1)
 
0 bps

 
70 bps


_____________
(1)
The comparable 2015 period includes results of operations for certain hotels prior to their acquisition by the Trust.




 
 
 
 
 
 
 
PRESS RELEASE
For Immediate Release
 Contact: Douglas W. Vicari (410) 972-4142
 
 
 







Full Year 2016
 
Updated Outlook
 
Previous Outlook
 
 
Low
 
High
 
Low
 
High
CONSOLIDATED:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income available to common shareholders
 
$
74.3

 
$
80.1

 
$
72.9

 
$
78.6

Net income per diluted common share
 
$
1.26

 
$
1.36

 
$
1.24

 
$
1.34

 
 
 
 
 
 
 
 
 
Adjusted Corporate EBITDA
 
$
193.6

 
$
200.1

 
$
193.6

 
$
200.1

 
 
 
 
 
 
 
 
 
AFFO available to common shareholders
 
$
148.5

 
$
154.3

 
$
147.1

 
$
152.8

AFFO per diluted common share
 
$
2.52

 
$
2.62

 
$
2.50

 
$
2.60

 
 
 
 
 
 
 
 
 
Corporate cash general and administrative expense
 
$
10.0

 
$
10.8

 
$
10.0

 
$
10.8

Corporate non-cash general and administrative expense
 
$
9.4

 
$
9.4

 
$
9.4

 
$
9.4

 
 
 
 
 
 
 
 
 
Weighted-average number of diluted common shares outstanding
 
58.9

 
58.9

 
58.9

 
58.9

 
 
 
 
 
 
 
 
 
22-HOTEL PORTFOLIO:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
RevPAR
 
$
195.00

 
$
199.00

 
$
195.00

 
$
199.00

Pro forma RevPAR increase over 2015(1)
 
5.0
%
 
7.0
%
 
5.0
%
 
7.0
%
Adjusted Hotel EBITDA
 
$
213.0

 
$
220.3

 
$
213.0

 
$
220.3

Adjusted Hotel EBITDA Margin
 
33.7
%
 
34.2
%
 
33.7
%
 
34.2
%
Pro forma Adjusted Hotel EBITDA Margin increase over 2015(1)
 
100 bps

 
150 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 EBITDA – Hotel 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).




 
 
 
 
 
 
 
PRESS RELEASE
For Immediate Release
 Contact: Douglas W. Vicari (410) 972-4142
 
 
 







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 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.
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




 
 
 
 
 
 
 
PRESS RELEASE
For Immediate Release
 Contact: Douglas W. Vicari (410) 972-4142
 
 
 







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 Thursday, April 28, 2016 at 5:00 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 75010701. 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 May 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 75010701. 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 second 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




 
 
 
 
 
 
 
PRESS RELEASE
For Immediate Release
 Contact: Douglas W. Vicari (410) 972-4142
 
 
 







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 April 28, 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)
 



 
 
March 31, 2016
 
December 31, 2015
 
 
(unaudited)
 
 
 
 
 
 
 
ASSETS
 
 
 
 
Property and equipment, net
 
$
1,912,310

 
$
1,926,944

Intangible assets, net
 
36,269

 
36,414

Cash and cash equivalents
 
46,955

 
50,544

Restricted cash
 
43,129

 
40,361

Accounts receivable, net
 
21,587

 
15,603

Prepaid expenses and other assets
 
23,662

 
17,900

Total assets
 
$
2,083,912

 
$
2,087,766

 
 
 
 
 
LIABILITIES AND SHAREHOLDERS’ EQUITY
 
 
 
 
Long-term debt
 
$
777,512

 
$
769,748

Accounts payable and accrued expenses
 
65,409

 
62,683

Other liabilities
 
45,794

 
45,778

Total liabilities
 
888,715

 
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;
60,083,747 shares and 59,659,522 shares issued and outstanding, respectively
 
601

 
597

Additional paid-in capital
 
1,300,053

 
1,297,877

Cumulative dividends in excess of net income
 
(105,060
)
 
(88,675
)
Accumulated other comprehensive loss
 
(447
)
 
(292
)
Total shareholders’ equity
 
1,195,197

 
1,209,557

Total liabilities and shareholders’ equity
 
$
2,083,912

 
$
2,087,766

 
 
 
 
 
 
 
 
 
 
SUPPLEMENTAL CREDIT INFORMATION:
 
 
 
 
Fixed charge coverage ratio(1)
 
3.23

 
3.04

Leverage ratio(1)
 
31.9
%
 
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 March 31,
 
 
2016
 
2015
REVENUE
 
 
 
 
Rooms
 
$
103,772

 
$
81,594

Food and beverage
 
30,555

 
23,398

Other
 
6,284

 
4,298

Total revenue
 
140,611

 
109,290

 
 
 
 
 
EXPENSES
 
 
 
 
Hotel operating expenses:
 
 
 
 
Rooms
 
25,501

 
21,100

Food and beverage
 
22,766

 
18,466

Other direct
 
1,558

 
1,333

Indirect
 
50,580

 
43,005

Total hotel operating expenses
 
100,405

 
83,904

Depreciation and amortization
 
18,484

 
14,927

Air rights contract amortization
 
130

 
130

Corporate general and administrative
 
5,266

 
4,577

Hotel acquisition costs
 

 
369

Total operating expenses
 
124,285

 
103,907

 
 
 
 
 
Operating income
 
16,326

 
5,383

 
 
 
 
 
Interest expense
 
(8,210
)
 
(7,179
)
 
 
 
 
 
Income (loss) before income taxes
 
8,116

 
(1,796
)
 
 
 
 
 
Income tax benefit
 
1,954

 
3,348

 
 
 
 
 
Net income
 
10,070

 
1,552

 
 
 
 
 
Preferred share dividends
 
(2,422
)
 
(2,422
)
Net income (loss) available to common shareholders
 
$
7,648

 
$
(870
)
 
 
 
 
 
Net income (loss) per common share–basic and diluted
 
$
0.13

 
$
(0.02
)
 
 
 
 
 
Weighted-average number of common shares outstanding:
 
 
 
 
Basic
 
58,681,525

 
54,178,494

Diluted
 
59,247,219

 
54,178,494














CHESAPEAKE LODGING TRUST
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)


 
 
 
Three Months Ended March 31,
 
 
2016
 
2015
 
 
 
 
 
Cash flows from operating activities:
 
 
 
 
Net income
 
$
10,070

 
$
1,552

Adjustments to reconcile net income to net cash provided by
operating activities:
 
 
 
 
Depreciation and amortization
 
18,484

 
14,927

Air rights contract amortization
 
130

 
130

Deferred financing costs amortization
 
466

 
474

Share-based compensation
 
2,374

 
1,792

Other
 
(221
)
 
(146
)
Changes in assets and liabilities:
 
 
 
 
Accounts receivable, net
 
(5,984
)
 
(3,711
)
Prepaid expenses and other assets
 
(2,562
)
 
(5,973
)
Accounts payable and accrued expenses
 
2,323

 
(2,531
)
Other liabilities
 
(11
)
 
(10
)
Net cash provided by operating activities
 
25,069

 
6,504

 
 
 
 
 
Cash flows from investing activities:
 
 
 
 
Acquisition of hotel, net of cash acquired
 

 
(153,592
)
Deposit on hotel acquisition
 

 
(6,150
)
Improvements and additions to hotels
 
(3,850
)
 
(12,917
)
Change in restricted cash
 
(2,768
)
 
2,631

Net cash used in investing activities
 
(6,618
)
 
(170,028
)
 
 
 
 
 
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
 

 
(184
)
Borrowings under revolving credit facility
 
25,000

 
190,000

Repayments under revolving credit facility
 
(15,000
)
 
(155,000
)
Scheduled principal payments on mortgage debt
 
(2,649
)
 
(2,584
)
Payment of deferred financing costs
 

 
(2,321
)
Deposit on loan application
 
(3,200
)
 

Payment of dividends to common shareholders
 
(23,575
)
 
(16,281
)
Payment of dividends to preferred shareholders
 
(2,422
)
 
(2,422
)
Repurchase of common shares
 
(194
)
 
(1,690
)
Net cash provided by (used in) financing activities
 
(22,040
)
 
163,480

Net decrease in cash
 
(3,589
)
 
(44
)
Cash and cash equivalents, beginning of period
 
50,544

 
29,326

Cash and cash equivalents, end of period
 
$
46,955

 
$
29,282







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 months ended March 31, 2016 and 2015:
 
 
Three Months Ended March 31,
 
 
2016
 
2015
Net income
 
$
10,070

 
$
1,552

Add: Interest expense
 
8,210

 
7,179

Depreciation and amortization
 
18,484

 
14,927

Air rights contract amortization
 
130

 
130

Corporate general and administrative
 
5,266

 
4,577

Hotel acquisition costs
 

 
369

Less: Income tax benefit
 
(1,954
)
 
(3,348
)
Hotel EBITDA
 
40,206

 
25,386

 
 
 
 
 
Less: Non-cash amortization(1)
 
(155
)
 
(81
)
Adjusted Hotel EBITDA
 
40,051

 
25,305

 
 
 
 
 
Add: Prior owner Hotel EBITDA(2)
 

 
6,363

Pro forma Adjusted Hotel EBITDA
 
$
40,051

 
$
31,668

 
 
 
 
 
Total revenue
 
$
140,611

 
$
109,290

Add: Prior owner total revenue(2)
 

 
18,044

Pro forma total revenue
 
$
140,611

 
$
127,334

 
 
 
 
 
Pro forma Adjusted Hotel EBITDA Margin
 
28.5
%
 
24.9
%
_____________
(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.







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 Corporate EBITDA and Adjusted Corporate EBITDA for the three months ended March 31, 2016 and 2015:
 
 
Three Months Ended March 31,
 
 
2016
 
2015
Net income
 
$
10,070

 
$
1,552

Add: Interest expense
 
8,210

 
7,179

Depreciation and amortization
 
18,484

 
14,927

Less: Income tax benefit
 
(1,954
)
 
(3,348
)
Corporate EBITDA
 
34,810

 
20,310

 
 
 
 
 
Add: Hotel acquisition costs
 

 
369

Less: Non-cash amortization(1)
 
(25
)
 
49

Adjusted Corporate EBITDA
 
$
34,785

 
$
20,728

____________ 
(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 months ended March 31, 2016 and 2015:
 
 
Three Months Ended March 31,
 
 
2016
 
2015
Net income
 
$
10,070

 
$
1,552

Add: Depreciation and amortization
 
18,484

 
14,927

FFO
 
28,554

 
16,479

 
 
 
 
 
Less: Preferred share dividends
 
(2,422
)
 
(2,422
)
Dividends declared on unvested time-based awards
 
(144
)
 
(137
)
Undistributed earnings allocated to unvested time-based awards
 

 

FFO available to common shareholders
 
25,988

 
13,920

 
 
 
 
 
Add: Hotel acquisition costs
 

 
369

Non-cash amortization(1)
 
(25
)
 
49

AFFO available to common shareholders
 
$
25,963

 
$
14,338

 
 
 
 
 
FFO per common share–basic and diluted
 
$
0.44

 
$
0.26

 
 
 
 
 
AFFO per common share–basic and diluted
 
$
0.44

 
$
0.26

____________ 
(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
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(in thousands, except share and per share data)
(unaudited)

The following table reconciles forecasted net income to Hotel EBITDA, Adjusted Hotel EBITDA, and Adjusted Hotel EBITDA Margin for the three months ending June 30, 2016 and year ending December 31, 2016:
 
Three Months Ending June 30, 2016
 
Year Ending December 31, 2016
 
Low
 
High
 
Low
 
High
Net income
$
27,060

 
$
29,310

 
$
84,560

 
$
90,310

Add: Interest expense
7,880

 
7,880

 
32,310

 
32,310

Income tax expense
3,650

 
3,850

 
2,500

 
3,250

Depreciation and amortization
18,720

 
18,720

 
74,860

 
74,860

Air rights contract amortization
130

 
130

 
520

 
520

Corporate general and administrative
4,970

 
5,170

 
19,420

 
20,170

Hotel EBITDA
62,410

 
65,060

 
214,170

 
221,420

 
 
 
 
 
 
 
 
Less: Non-cash amortization(1)
(160
)
 
(160
)
 
(620
)
 
(620
)
Gain on sale of hotel
(550
)
 
(550
)
 
(550
)
 
(550
)
Adjusted Hotel EBITDA
$
61,700

 
$
64,350

 
$
213,000

 
$
220,250

 
 
 
 
 
 
 
 
Total revenue
$
169,400

 
$
173,400

 
$
631,500

 
$
643,500

 
 
 
 
 
 
 
 
Adjusted Hotel EBITDA Margin
36.4
%
 
37.1
%
 
33.7
%
 
34.2
%
_____________
(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 June 30, 2016 and year ending December 31, 2016:
 
Three Months Ending June 30, 2016
 
Year Ending December 31, 2016
 
Low
 
High
 
Low
 
High
Net income
$
27,060

 
$
29,310

 
$
84,560

 
$
90,310

Add: Interest expense
7,880

 
7,880

 
32,310

 
32,310

Income tax expense
3,650

 
3,850

 
2,500

 
3,250

Depreciation and amortization
18,720

 
18,720

 
74,860

 
74,860

Corporate EBITDA
57,310

 
59,760

 
194,230

 
200,730

 
 
 
 
 
 
 
 
Less: Non-cash amortization(1)
(30
)
 
(30
)
 
(100
)
 
(100
)
Gain on sale of hotel
(550
)
 
(550
)
 
(550
)
 
(550
)
Adjusted Corporate EBITDA
$
56,730

 
$
59,180

 
$
193,580

 
$
200,080

____________
(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
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(in thousands, except share and per share data)
(unaudited)

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 June 30, 2016 and year ending December 31, 2016:
 
Three Months Ending June 30, 2016
 
Year Ending December 31, 2016
 
Low
 
High
 
Low
 
High
Net income
$
27,060

 
$
29,310

 
$
84,560

 
$
90,310

Add: Depreciation and amortization
18,720

 
18,720

 
74,860

 
74,860

Less: Gain on sale of hotel
(550
)
 
(550
)
 
(550
)
 
(550
)
FFO
45,230

 
47,480

 
158,870

 
164,620

 
 
 
 
 
 
 
 
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
42,650

 
44,900

 
148,620

 
154,370

 
 
 
 
 
 
 
 
Less: Non-cash amortization(1)
(30
)
 
(30
)
 
(100
)
 
(100
)
AFFO available to common shareholders
$
42,620

 
$
44,870

 
$
148,520

 
$
154,270

 
 
 
 
 
 
 
 
FFO per common share:
 
 
 
 
 
 
 
Basic
$
0.73

 
$
0.76

 
$
2.53

 
$
2.63

Diluted
$
0.72

 
$
0.76

 
$
2.52

 
$
2.62

 
 
 
 
 
 
 
 
AFFO per common share:
 
 
 
 
 
 
 
Basic
$
0.73

 
$
0.76

 
$
2.53

 
$
2.63

Diluted
$
0.72

 
$
0.76

 
$
2.52

 
$
2.62

 
 
 
 
 
 
 
 
Weighted-average number of common shares outstanding:
 
 
 
 
 
 
 
Basic
58,722

 
58,722

 
58,765

 
58,765

Diluted
59,248

 
59,248

 
58,860

 
58,860

____________ 
(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