[October 23, 2017] |
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Pebblebrook Hotel Trust Reports Third Quarter 2017 Results
Pebblebrook Hotel Trust (NYSE: PEB) (the "Company") today reported
results for the third quarter ended September 30, 2017. The Company's
results include the following:
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Third Quarter
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Nine Months Ended September 30,
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2017
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2016
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2017
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2016
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($ in millions except per share and RevPAR data)
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Net income (loss)
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$30.6
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($35.5)
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$88.3
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$55.5
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Same-Property RevPAR(1)
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$229.68
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$237.15
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$213.54
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$219.64
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Same-Property RevPAR growth rate
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(3.1%)
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(2.8%)
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Same-Property EBITDA(1)
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$74.7
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$78.2
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$199.7
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$212.3
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Same-Property EBITDA growth rate
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(4.4%)
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(5.9%)
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Same-Property EBITDA Margin(1)
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37.8%
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39.4%
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34.7%
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36.3%
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Adjusted EBITDA(1)
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$70.1
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$80.4
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$186.3
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$215.5
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Adjusted EBITDA growth rate
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(12.8%)
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(13.6%)
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Adjusted FFO(1)
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$55.8
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$60.9
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$146.6
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$160.3
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Adjusted FFO per diluted share(1)
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$0.80
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$0.84
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$2.08
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$2.21
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Adjusted FFO per diluted share growth rate
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(4.8%)
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(5.9%)
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(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.
"During the third quarter, our hotels performed better than our overall
expectations, even with the negative impact from several natural
disasters that occurred during the quarter, as Same-Property EBITDA,
Adjusted EBITDA and Adjusted FFO exceeded our outlook," noted Jon E.
Bortz, Chairman, President and Chief Executive Officer of Pebblebrook
Hotel Trust. "Our recently redeveloped hotels including Union Station
Hotel Nashville and Hotel Zeppelin San Francisco led the portfolio in
the third quarter, as these hotels continue to ramp up their performance
following their recent transformations. In addition, overall
macro-economic factors remain encouraging and would seem to indicate
improvements in the economy and travel demand ahead in 2018. However, we
have not yet seen any noteworthy change in corporate business travel
demand, which is growing modestly. Leisure travel demand remains solid,
but international inbound travel demand continues to exhibit weakness.
As a result, we remain cautious in our outlook for the remainder of 2017
and will remain so until we see demand trends strengthen."
Third Quarter Highlights
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Net Income: The Company's net income was $30.6 million in the
third quarter of 2017, increasing $66.1 million as compared to the
same period of 2016, which was primarily a result of prior year
impairment losses related to property dispositions.
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Same-Property RevPAR and Same-Property Total Revenue per Available
Room: Same-Property RevPAR in the third quarter of 2017 declined
3.1 percent versus the same period of 2016 to $229.68. Excluding San
Francisco, Same-Property RevPAR declined 2.2 percent from the prior
year. Same-Property ADR declined 3.0 percent from the prior year
quarter to $256.56, and Same-Property Occupancy decreased 0.2 percent
to 89.5 percent. Same-Property Total Revenue per Available Room
declined 0.4 percent from the same period of 2016. The Company's
Same-Property RevPAR excludes LaPlaya Beach Resort & Club ("LaPlaya"),
as the hotel was closed for most of September as a result of Hurricane
Irma.
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Same-Property EBITDA: The Company's hotels generated $74.7
million of Same-Property EBITDA for the quarter ended September 30,
2017, declining 4.4 percent from the same period of 2016.
Same-Property Revenues decreased by 0.3 percent, while Same-Property
Expenses grew by 2.4 percent. As a result, Same-Property EBITDA Margin
declined 164 basis points to 37.8 percent for the third quarter of
2017, as compared to the same period last year. These results exclude
LaPlaya during the third quarter.
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Adjusted EBITDA: The Company's Adjusted EBITDA declined to
$70.1 million from $80.4 million in the prior year period, a decrease
of $10.3 million, or 12.8 percent. The decline in Adjusted EBITDA was
largely a result of the $8.4 million of EBITDA from properties
disposed of in the last year.
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Adjusted FFO: The Company's Adjusted FFO declined 8.4 percent
to $55.8 million from $60.9 million in the prior year period. The
Company's Adjusted FFO per diluted share decreased 4.8 percent to
$0.80 compared with the same period of 2016.
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Dividends: On September 15, 2017, the Company declared a
regular quarterly cash dividend of $0.38 per share on its common
shares, a regular quarterly cash dividend of $0.40625 per share on its
6.50% Series C Cumulative Redeemable Preferred Shares and a regular
quarterly cash dividend of $0.39844 per share on its 6.375% Series D
Cumulative Redeemable Preferred Shares.
"Our San Francisco hotels performed slightly better in the quarter than
we forecasted despite the challenges created by the renovation and
expansion of the Moscone Convention Center in San Francisco," said Mr.
Bortz. "The most disruptive phase of the Moscone Center expansion is now
behind us, and we are encouraged by the improving booking activity and
trends for San Francisco in 2018 and the record bookings for 2019.
Same-Property RevPAR for our portfolio declined 3.1 percent in the third
quarter, which was in the upper half of our outlook range of negative
4.5 percent to negative 2.5 percent. Excluding San Francisco,
Same-Property RevPAR decreased 2.2 percent and Same-Property Total
Revenue grew 0.6 percent. Our properties continue to see growth in
non-room revenues such as food and beverage, which we expect will
persist in future quarters."
Update on Impact from Hurricane Irma on LaPlaya
Beach Resort & Club
The Company's 189-room LaPlaya Beach Resort & Club closed starting
September 9, 2017 following a mandatory hurricane evacuation order
issued by Collier County in advance of the arrival of Hurricane Irma in
Naples. The resort incurred primarily wind and water related damage,
which the Company estimates will cost approximately $12.0 to $15.0
million including all repair, remediation, replacement and cleanup work.
The Company maintains property, wind and flood insurance which is
subject to a deductible of up to $2.8 million at LaPlaya.
The Company currently anticipates that the resort will reopen to resort
guests in mid to late November as repair and restoration work is
completed, including the resort's lobby, restaurant, bar, private club
and other public areas, as well as a majority of the resort's
guestrooms. The full restoration of LaPlaya, including the resort's
previously scheduled renovation of the Gulf Tower, is expected to be
completed early in the first quarter of 2018. The Company estimates that
due to disruption caused by Hurricane Irma, LaPlaya's hotel EBITDA was
reduced by $0.1 million in September, and it anticipates approximately
$5.0 million less of EBITDA during the fourth quarter. The Company
maintains business interruption insurance which is subject to a
deductible of approximately $1.1 million, which is expected to be
utilized during the fourth quarter.
In the third quarter, the Company recorded a $2.8 million net impairment
charge for the estimated damage to LaPlaya's assets, less the amount
expected to be received from property insurance proceeds. In addition,
the Company anticipates receiving insurance proceeds for the business
interruption losses sustained as a result of the hurricane. However, the
total business interruption claim will not likely be determined until
sometime in 2018. The business interruption proceeds and the Company's
deductible will not be recorded until these losses are fully determined
and the related insurance proceeds are received.
Strategic Disposition Plan
To date, as part of its strategic disposition plan, the Company has sold
9 hotel properties and 2 non-hotel assets for a total of $676.8 million
in gross proceeds, which falls within the originally announced
disposition goal of between $500.0 million and $1.0 billion in assets.
The Company continues to pursue the selective sale of additional hotels
and real estate as part of its overall strategic disposition plan.
Share Repurchase Program
The Company repurchased 3,800 common shares at an average price of
$31.40 per share during the third quarter, and year-to-date has
repurchased 3.2 million common shares at an average price of $28.77 per
share totaling $93.4 million. Under the $250.0 million common share
repurchase program, the Company is authorized to repurchase an
additional $156.6 million of common shares. The repurchase program may
be suspended or discontinued at any time, and the Company is not
obligated to acquire any particular amount of shares.
Capital Reinvestments
During the third quarter, the Company made $16.2 million of capital
improvements throughout its portfolio and year-to-date the Company has
made $63.5 million of capital improvements. In July, the Company began
its final major redevelopment project at LaPlaya. The renovation
project, which was originally estimated to cost $8.0 million and was
initially scheduled to be completed by the end of the third quarter
2017, includes a renovation of the lobby, restaurant and bar, and all
guestrooms in the resort's Gulf Tower. Due to the impact of Hurricane
Irma, the Company now estimates that the renovation will be completed by
early 2018.
Year-to-Date Highlights
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Net Income: The Company's net income was $88.3 million for the
nine months ended September 30, 2017, an increase of $32.8 million
over the same period of 2016.
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Same-Property RevPAR and Same-Property Total Revenue per
Available Room: Same-Property RevPAR for the nine months ended
September 30, 2017 decreased 2.8 percent versus the same period of
2016 to $213.54. Excluding San Francisco, Same-Property RevPAR
declined 0.5 percent. Year-to-date Same-Property ADR fell 1.4 percent
from the comparable period of 2016 to $249.24, and year-to-date
Same-Property Occupancy declined 1.4 percent to 85.7 percent.
Same-Property Total Revenue per Available Room declined 1.2 percent
from the same period of 2016.
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Same-Property EBITDA: The Company's hotels generated $199.7
million of Same-Property EBITDA for the nine months ended September
30, 2017, down 5.9 percent compared with the same period of 2016.
Same-Property Hotel Revenues declined 1.5 percent, while Same-Property
Hotel Expenses rose just 1.0 percent. As a result, Same-Property
EBITDA Margin for the nine months ended September 30, 2017 declined
162 basis points to 34.7 percent as compared to the same period last
year.
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Adjusted EBITDA: The Company's Adjusted EBITDA declined 13.6
percent, or $29.3 million, to $186.3 million from $215.5 million in
the prior year period. The decline in Adjusted EBITDA was largely a
result of the lost EBITDA from properties disposed of in the last year.
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Adjusted FFO: The Company's Adjusted FFO declined 8.6 percent
to $146.6 million from $160.3 million in the prior year period. The
Company's Adjusted FFO per diluted share decreased 5.9 percent to
$2.08 compared with the same period of 2016.
Capital Markets and Balance Sheet
On October 13, 2017, Pebblebrook closed on new agreements which
refinance and extend the maturities of the Company's unsecured revolving
credit facility and unsecured term loans. The agreements, which are with
a consortium of banks, improve the pricing and terms of the Company's
credit facility and amended term loans. The Company now has no debt
maturities until 2020.
As of September 30, 2017, the Company had $876.2 million in debt at an
effective weighted-average interest rate of 3.3 percent. The Company had
$675.0 million outstanding in the form of unsecured term loans and $30.0
million outstanding on its $450.0 million senior unsecured revolving
credit facility. As of September 30, 2017, the Company had $20.7 million
of cash, cash equivalents and restricted cash.
On September 30, 2017, as defined in the Company's credit agreement, the
Company's fixed charge coverage ratio was 3.6 times and total net debt
to trailing 12-month corporate EBITDA was 3.6 times.
2017 Outlook
The Company's outlook for 2017 has been updated to incorporate both the
Company's third quarter outperformance and the estimated $5.0 million
reduction for LaPlaya in the fourth quarter due to disruption caused by
Hurricane Irma. As a result of the storm, LaPlaya is not included in the
Company's Same-Property statistics in the outlook for the fourth
quarter, and its third and fourth quarters are excluded from the
Same-Property statistics for the full year outlook.
In addition, the 2017 outlook, which assumes no additional acquisitions
or dispositions, includes the Company's various planned capital
investment projects and includes other significant assumptions, is as
follows:
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2017 Outlook as of October 23, 2017
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Variance to Prior Outlook as of
July 27, 2017
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Low
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High
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Low
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High
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($ and shares/units in millions, except per share and RevPAR data)
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Net income
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$90.0
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$93.0
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$7.2
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$4.2
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Adjusted EBITDA
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$228.0
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$231.0
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$1.5
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($1.5)
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Adjusted EBITDA growth rate
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(16.5%)
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(15.4%)
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0.6%
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(0.5%)
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Adjusted FFO
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$173.8
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$176.8
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$2.1
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($0.9)
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Adjusted FFO per diluted share
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$2.48
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$2.52
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$0.03
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($0.01)
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Adjusted FFO per diluted share growth rate
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(10.8%)
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(9.4%)
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1.1%
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(0.4%)
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This 2017 outlook is based, in part, on the following estimates and
assumptions:
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U.S. GDP growth rate
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1.75%
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2.25%
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-
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-
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U.S. Hotel Industry RevPAR growth rate
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2.0%
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3.0%
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-
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-
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Urban Markets RevPAR growth rate
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0.5%
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1.5%
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-
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-
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Same-Property RevPAR
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$208
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$210
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$1
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$1
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Same-Property RevPAR growth rate
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(2.0%)
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(1.0%)
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-
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-
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Same-Property Room Revenue growth rate
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(2.2%)
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(1.2%)
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-
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-
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Same-Property EBITDA
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$249.5
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$252.5
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($0.5)
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($3.5)
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Same-Property EBITDA growth rate
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(6.2%)
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(5.0%)
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1.4%
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0.4%
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Same-Property EBITDA Margin
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33.4%
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33.7%
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0.3%
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0.1%
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Same-Property EBITDA Margin growth rate
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(175 bps)
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(150 bps)
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25 bps
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-
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Corporate cash general and administrative expenses
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$19.2
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$19.2
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($0.9)
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($0.9)
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Corporate non-cash general and administrative expenses
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$5.2
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$5.2
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($1.8)
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($1.8)
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Total capital investments related to renovations, capital
maintenance and return on investment projects
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$80.0
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$90.0
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($10.0)
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($10.0)
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Weighted-average fully diluted shares and units
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70.1
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70.1
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-
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"Due to our outlook for modestly growing but stable business travel and
weak international inbound travel trends, we expect the urban markets to
continue to underperform the greater U.S. hotel industry during the
remainder of 2017," commented Mr. Bortz. "As a result, we are
maintaining our RevPAR outlooks for the industry and urban markets.
Nevertheless, for Pebblebrook, after adjusting for the one-time
disruption at LaPlaya from Hurricane Irma, we are increasing our 2017
outlook range for Same-Property EBITDA, Adjusted EBITDA, Adjusted FFO
and Adjusted FFO per diluted share to reflect our outperformance in the
third quarter."
The Company's outlook for the fourth quarter of 2017 is as follows:
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Fourth Quarter 2017 Outlook
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Low
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High
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($ and shares/units in millions, except per share and RevPAR data)
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Net income
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$1.6
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$4.6
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Same-Property RevPAR
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$188
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$192
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Same-Property RevPAR growth rate
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(0.5%)
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1.5%
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Same-Property Room Revenue growth rate
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(0.4%)
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1.6%
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Same-Property EBITDA
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$49.8
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$52.8
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Same-Property EBITDA growth rate
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(7.1%)
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(1.5%)
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Same-Property EBITDA Margin
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30.0%
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31.0%
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Same-Property EBITDA Margin growth rate
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(150 bps)
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(50 bps)
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Adjusted EBITDA
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$41.7
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$44.7
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Adjusted EBITDA growth rate
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(27.7%)
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(22.5%)
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Adjusted FFO
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$27.2
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$30.2
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Adjusted FFO per diluted share
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$0.39
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$0.43
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Adjusted FFO per diluted share growth rate
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(31.6%)
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(24.6%)
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Weighted-average fully diluted shares and units
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69.5
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69.5
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The Company's outlook for 2017 and the fourth quarter of 2017 assumes no
additional acquisitions or dispositions beyond the hotels the Company
owned as of September 30, 2017. The Company's outlook also incorporates
all of the expected disruption resulting from Hurricane Irma as well as
that associated with the continued renovation and repositioning at
LaPlaya.
The Company's estimates and assumptions, including the Company's outlook
for 2017 and the fourth quarter of 2017, for Same-Property RevPAR,
Same-Property RevPAR growth rate, Same-Property Room Revenue growth
rate, Same-Property EBITDA, Same-Property EBITDA growth rate,
Same-Property EBITDA Margin and Same-Property EBITDA Margin growth rate,
include the hotels owned as of September 30, 2017, as if they had been
owned by the Company for all of 2016 and 2017, except for Hotel Zeppelin
San Francisco, which is not included in the first quarter and LaPlaya
Beach Resort & Club, which is not included in the third and fourth
quarters.
If any of the foregoing estimates and assumptions prove to be
inaccurate, actual results, including the outlook, may vary, and could
vary significantly, from the amounts shown above.
Third Quarter 2017 Earnings Call
The Company will conduct its quarterly analyst and investor conference
call on Tuesday, October 24, 2017 at 10:00 AM ET. To participate in the
conference call, please dial (877) 705-6003 approximately ten minutes
before the call begins. Additionally, a live webcast of the conference
call will be available through the Company's website. To access the
webcast, log on to www.pebblebrookhotels.com
ten minutes prior to the conference call. A replay of the conference
call webcast will be archived and available online through the Investor
Relations section of www.pebblebrookhotels.com.
About Pebblebrook Hotel Trust
Pebblebrook Hotel Trust is a publicly traded real estate investment
trust ("REIT") organized to opportunistically acquire and invest
primarily in upper upscale, full-service hotels located in urban markets
in major gateway cities. The Company owns 28 hotels, with a total of
6,970 guest rooms. The Company owns hotels located in 9 states and the
District of Columbia, including: Los Angeles, California (Beverly Hills,
Santa Monica and West Hollywood); San Diego, California; San Francisco,
California; Washington, DC; Coral Gables, Florida; Naples, Florida;
Buckhead, Georgia; Boston, Massachusetts; Minneapolis, Minnesota;
Portland, Oregon; Philadelphia, Pennsylvania; Nashville, Tennessee;
Columbia River Gorge, Washington; and Seattle, Washington. For more
information, please visit us at www.pebblebrookhotels.com
and follow us on Twitter at @PebblebrookPEB.
This press release contains certain "forward-looking statements" made
pursuant to the safe harbor provisions of the Private Securities Reform
Act of 1995. Forward-looking statements are generally
identifiable by use of forward-looking terminology such as "may,"
"will," "should," "potential," "intend," "expect," "seek," "anticipate,"
"estimate," "approximately," "believe," "could," "project," "predict,"
"forecast," "continue," "assume," "plan," references to "outlook" or
other similar words or expressions. Forward-looking statements
are based on certain assumptions and can include future expectations,
future plans and strategies, financial and operating projections and
forecasts and other forward-looking information and estimates. Examples
of forward-looking statements include the following: projections and
forecasts of U.S. GDP growth, U.S. hotel industry RevPAR growth, the
Company's net income, FFO, EBITDA, Adjusted FFO, Adjusted EBITDA,
RevPAR, EBITDA Margin, EBITDA Margin growth and their Same-Property
equivalents, and the Company's expenses, share count or other financial
items; descriptions of the Company's plans or objectives for future
operations, acquisitions, dispositions or services; forecasts of the
Company's future economic performance and its share of future markets;
forecasts of hotel industry performance; estimates of costs and
durations of renovation or restoration projects; estimates of insurance
recoveries; and descriptions of assumptions underlying or relating to
any of the foregoing expectations including assumptions regarding the
timing of their occurrence. These forward-looking statements are
subject to various risks and uncertainties, many of which are beyond the
Company's control, which could cause actual results to differ materially
from such statements. These risks and uncertainties include, but
are not limited to, the state of the U.S. economy and the supply of
hotel properties, and other factors as are described in greater detail
in the Company's filings with the Securities and Exchange Commission,
including, without limitation, the Company's Annual Report on Form 10-K
for the year ended December 31, 2016. Unless legally required,
the Company disclaims any obligation to update any forward-looking
statements, whether as a result of new information, future events or
otherwise.
For further information about the Company's business and financial
results, please refer to the "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and "Risk Factors"
sections of the Company's SEC filings, including, but not limited to,
its Annual Report on Form 10-K and Quarterly Reports on Form 10-Q,
copies of which may be obtained at the Investor Relations section of the
Company's website at www.pebblebrookhotels.com.
All information in this press release is as of October 23, 2017. The
Company undertakes no duty to update the statements in this press
release to conform the statements to actual results or changes in the
Company's expectations.
For additional information or to receive press releases via email,
please visit our website at www.pebblebrookhotels.com
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Pebblebrook Hotel Trust
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Consolidated Balance Sheets
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($ in thousands, except for per share data)
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September 30, 2017
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December 31, 2016
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(Unaudited)
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ASSETS
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Assets:
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Investment in hotel properties, net
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$
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2,464,186
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$
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2,672,654
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Ground lease asset, net
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29,185
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29,627
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Cash and cash equivalents
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14,185
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33,410
|
|
Restricted cash
|
|
|
6,473
|
|
|
|
7,419
|
|
Hotel receivables (net of allowance for doubtful accounts of $356
and $494, respectively)
|
|
|
35,757
|
|
|
|
27,687
|
|
Prepaid expenses and other assets
|
|
|
43,902
|
|
|
|
38,462
|
|
Total assets
|
|
$
|
2,593,688
|
|
|
$
|
2,809,259
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
Senior unsecured revolving credit facilities
|
|
$
|
30,000
|
|
|
$
|
82,000
|
|
Term loans, net of unamortized deferred financing costs
|
|
|
672,391
|
|
|
|
671,793
|
|
Senior unsecured notes, net of unamortized deferred financing costs
|
|
|
99,513
|
|
|
|
99,460
|
|
Mortgage debt, net of unamortized loan premiums and deferred
financing costs
|
|
|
71,027
|
|
|
|
142,998
|
|
Accounts payable and accrued expenses
|
|
|
150,100
|
|
|
|
149,283
|
|
Advance deposits
|
|
|
20,045
|
|
|
|
19,110
|
|
Accrued interest
|
|
|
3,250
|
|
|
|
2,284
|
|
Distribution payable
|
|
|
31,711
|
|
|
|
33,215
|
|
Total liabilities
|
|
|
1,078,037
|
|
|
|
1,200,143
|
|
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|
Equity:
|
|
|
|
|
Preferred shares of beneficial interest, $0.01 par value
(liquidation preference $250,000 at September 30, 2017 and at
December 31, 2016), 100,000,000 shares authorized; 10,000,000
shares issued and outstanding at September 30, 2017 and December
31, 2016
|
|
|
100
|
|
|
|
100
|
|
Common shares of beneficial interest, $0.01 par value, 500,000,000
shares authorized; 68,812,575 issued and outstanding at September
30, 2017 and 71,922,904 issued and outstanding at December 31, 2016
|
|
|
688
|
|
|
|
719
|
|
Additional paid-in capital
|
|
|
1,683,785
|
|
|
|
1,776,404
|
|
Accumulated other comprehensive income (loss)
|
|
|
(768
|
)
|
|
|
(2,312
|
)
|
Distributions in excess of retained earnings
|
|
|
(172,576
|
)
|
|
|
(169,227
|
)
|
Total shareholders' equity
|
|
|
1,511,229
|
|
|
|
1,605,684
|
|
Non-controlling interests
|
|
|
4,422
|
|
|
|
3,432
|
|
Total equity
|
|
|
1,515,651
|
|
|
|
1,609,116
|
|
Total liabilities and equity
|
|
$
|
2,593,688
|
|
|
$
|
2,809,259
|
|
|
|
|
|
|
|
Pebblebrook Hotel Trust
|
Consolidated Statements of Operations
|
($ in thousands, except for per share data)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
Room
|
|
$
|
144,770
|
|
|
$
|
152,693
|
|
|
$
|
412,862
|
|
|
$
|
432,547
|
|
Food and beverage
|
|
|
42,839
|
|
|
|
42,564
|
|
|
|
134,858
|
|
|
|
142,933
|
|
Other operating
|
|
|
14,184
|
|
|
|
13,706
|
|
|
|
41,968
|
|
|
|
42,000
|
|
Total revenues
|
|
$
|
201,793
|
|
|
$
|
208,963
|
|
|
$
|
589,688
|
|
|
$
|
617,480
|
|
|
|
|
|
|
|
|
|
|
Expenses:
|
|
|
|
|
|
|
|
|
Hotel operating expenses:
|
|
|
|
|
|
|
|
|
Room
|
|
$
|
34,453
|
|
|
$
|
34,541
|
|
|
$
|
102,076
|
|
|
$
|
100,860
|
|
Food and beverage
|
|
|
29,913
|
|
|
|
28,917
|
|
|
|
91,403
|
|
|
|
95,486
|
|
Other direct and indirect
|
|
|
52,504
|
|
|
|
53,468
|
|
|
|
158,953
|
|
|
|
164,795
|
|
Total hotel operating expenses
|
|
|
116,870
|
|
|
|
116,926
|
|
|
|
352,432
|
|
|
|
361,141
|
|
Depreciation and amortization
|
|
|
25,210
|
|
|
|
25,407
|
|
|
|
77,456
|
|
|
|
76,327
|
|
Real estate taxes, personal property taxes, property insurance, and
ground rent
|
|
|
11,345
|
|
|
|
12,360
|
|
|
|
37,095
|
|
|
|
37,253
|
|
General and administrative
|
|
|
4,467
|
|
|
|
6,779
|
|
|
|
17,045
|
|
|
|
19,936
|
|
Impairment and other losses
|
|
|
3,191
|
|
|
|
12,148
|
|
|
|
4,240
|
|
|
|
12,148
|
|
Total operating expenses
|
|
|
161,083
|
|
|
|
173,620
|
|
|
|
488,268
|
|
|
|
506,805
|
|
Operating income (loss)
|
|
|
40,710
|
|
|
|
35,343
|
|
|
|
101,420
|
|
|
|
110,675
|
|
Interest income
|
|
|
1
|
|
|
|
627
|
|
|
|
97
|
|
|
|
1,872
|
|
Interest expense
|
|
|
(8,969
|
)
|
|
|
(10,257
|
)
|
|
|
(28,015
|
)
|
|
|
(32,490
|
)
|
Other
|
|
|
132
|
|
|
|
1,548
|
|
|
|
132
|
|
|
|
(324
|
)
|
Gain on sale of hotel properties
|
|
|
290
|
|
|
|
-
|
|
|
|
14,877
|
|
|
|
40,326
|
|
Equity in earnings (loss) of joint venture
|
|
|
-
|
|
|
|
(61,268
|
)
|
|
|
-
|
|
|
|
(64,501
|
)
|
Income (loss) before income taxes
|
|
|
32,164
|
|
|
|
(34,007
|
)
|
|
|
88,511
|
|
|
|
55,558
|
|
Income tax (expense) benefit
|
|
|
(1,593
|
)
|
|
|
(1,528
|
)
|
|
|
(181
|
)
|
|
|
(18
|
)
|
Net income (loss)
|
|
|
30,571
|
|
|
|
(35,535
|
)
|
|
|
88,330
|
|
|
|
55,540
|
|
Net income (loss) attributable to non-controlling interests
|
|
|
128
|
|
|
|
(112
|
)
|
|
|
341
|
|
|
|
194
|
|
Net income (loss) attributable to the Company
|
|
|
30,443
|
|
|
|
(35,423
|
)
|
|
|
87,989
|
|
|
|
55,346
|
|
Distributions to preferred shareholders
|
|
|
(4,023
|
)
|
|
|
(5,553
|
)
|
|
|
(12,070
|
)
|
|
|
(15,638
|
)
|
Issuance costs of redeemed preferred shares
|
|
|
-
|
|
|
|
(2,921
|
)
|
|
|
-
|
|
|
|
(7,090
|
)
|
Net income (loss) attributable to common shareholders
|
|
$
|
26,420
|
|
|
$
|
(43,897
|
)
|
|
$
|
75,919
|
|
|
$
|
32,618
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per share available to common shareholders, basic
|
|
$
|
0.38
|
|
|
$
|
(0.61
|
)
|
|
$
|
1.08
|
|
|
$
|
0.45
|
|
Net income (loss) per share available to common shareholders, diluted
|
|
$
|
0.38
|
|
|
$
|
(0.61
|
)
|
|
$
|
1.08
|
|
|
$
|
0.45
|
|
|
|
|
|
|
|
|
|
|
Weighted-average number of common shares, basic
|
|
|
68,814,805
|
|
|
|
71,922,904
|
|
|
|
69,854,618
|
|
|
|
71,894,313
|
|
Weighted-average number of common shares, diluted
|
|
|
69,202,920
|
|
|
|
71,922,904
|
|
|
|
70,228,074
|
|
|
|
72,376,349
|
|
|
|
|
|
|
|
|
|
|
|
Pebblebrook Hotel Trust
|
Reconciliation of Net Income (Loss) to FFO and Adjusted FFO
|
($ in thousands, except per share data)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$
|
30,571
|
|
|
$
|
(35,535
|
)
|
|
$
|
88,330
|
|
|
$
|
55,540
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
25,155
|
|
|
|
25,350
|
|
|
|
77,284
|
|
|
|
76,152
|
|
Depreciation and amortization from joint venture
|
|
|
-
|
|
|
|
2,233
|
|
|
|
-
|
|
|
|
6,700
|
|
Gain on sale of hotel properties
|
|
|
(290
|
)
|
|
|
-
|
|
|
|
(14,877
|
)
|
|
|
(40,326
|
)
|
Impairment loss
|
|
|
2,800
|
|
|
|
12,148
|
|
|
|
3,849
|
|
|
|
12,148
|
|
Impairment loss from joint venture
|
|
|
-
|
|
|
|
62,622
|
|
|
|
-
|
|
|
|
62,622
|
|
FFO
|
|
$
|
58,236
|
|
|
$
|
66,818
|
|
|
$
|
154,586
|
|
|
$
|
172,836
|
|
Distribution to preferred shareholders
|
|
|
(4,023
|
)
|
|
|
(5,553
|
)
|
|
|
(12,070
|
)
|
|
|
(15,638
|
)
|
Issuance costs of redeemed preferred shares
|
|
|
-
|
|
|
|
(2,921
|
)
|
|
|
-
|
|
|
|
(7,090
|
)
|
FFO available to common share and unit holders
|
|
$
|
54,213
|
|
|
$
|
58,344
|
|
|
$
|
142,516
|
|
|
$
|
150,108
|
|
Hotel acquisition and disposition costs
|
|
|
14
|
|
|
|
(17
|
)
|
|
|
71
|
|
|
|
-
|
|
Non-cash ground rent
|
|
|
734
|
|
|
|
742
|
|
|
|
2,201
|
|
|
|
2,019
|
|
Management/franchise contract transition costs
|
|
|
-
|
|
|
|
-
|
|
|
|
85
|
|
|
|
79
|
|
Interest expense adjustment for acquired liabilities
|
|
|
192
|
|
|
|
50
|
|
|
|
387
|
|
|
|
(396
|
)
|
Capital lease adjustment
|
|
|
140
|
|
|
|
134
|
|
|
|
414
|
|
|
|
396
|
|
Non-cash amortization of acquired intangibles
|
|
|
215
|
|
|
|
240
|
|
|
|
697
|
|
|
|
726
|
|
Issuance costs of redeemed preferred shares
|
|
|
-
|
|
|
|
2,921
|
|
|
|
-
|
|
|
|
7,090
|
|
Estimated hurricane related repairs and cleanup costs
|
|
|
391
|
|
|
|
-
|
|
|
|
391
|
|
|
|
-
|
|
Other
|
|
|
(132
|
)
|
|
|
(1,548
|
)
|
|
|
(132
|
)
|
|
|
324
|
|
Adjusted FFO available to common share and unit holders
|
|
$
|
55,767
|
|
|
$
|
60,866
|
|
|
$
|
146,630
|
|
|
$
|
160,346
|
|
|
|
|
|
|
|
|
|
|
FFO per common share - basic
|
|
$
|
0.79
|
|
|
$
|
0.81
|
|
|
$
|
2.03
|
|
|
$
|
2.08
|
|
FFO per common share - diluted
|
|
$
|
0.78
|
|
|
$
|
0.80
|
|
|
$
|
2.02
|
|
|
$
|
2.07
|
|
Adjusted FFO per common share - basic
|
|
$
|
0.81
|
|
|
$
|
0.84
|
|
|
$
|
2.09
|
|
|
$
|
2.22
|
|
Adjusted FFO per common share - diluted
|
|
$
|
0.80
|
|
|
$
|
0.84
|
|
|
$
|
2.08
|
|
|
$
|
2.21
|
|
|
|
|
|
|
|
|
|
|
Weighted-average number of basic common shares and units
|
|
|
69,051,156
|
|
|
|
72,159,255
|
|
|
|
70,090,969
|
|
|
|
72,130,664
|
|
Weighted-average number of fully diluted common shares and units
|
|
|
69,439,271
|
|
|
|
72,604,269
|
|
|
|
70,464,425
|
|
|
|
72,612,700
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
To supplement the Company's consolidated financial statements
presented in accordance with U.S. generally accepted accounting
principles ("GAAP"), this press release includes certain non-GAAP
financial measures as defined under Securities and Exchange
Commission ("SEC") rules.
|
|
These measures are not in accordance with, or an alternative to,
measures prepared in accordance with GAAP and may be different
from similarly titled non-GAAP financial measures used by other
companies. In addition, these non-GAAP financial measures are not
based on any comprehensive set of accounting rules or principles.
Non-GAAP financial measures have limitations in that they do not
reflect all of the amounts associated with the Company's results
of operations determined in accordance with GAAP.
|
|
Funds from Operations ("FFO") - FFO represents net income
(computed in accordance with GAAP), excluding gains or losses from
sales of properties, plus real estate-related depreciation and
amortization and after adjustments for unconsolidated
partnerships. The Company considers FFO a useful measure of
performance for an equity REIT because it facilitates an
understanding of the Company's operating performance without
giving effect to real estate depreciation and amortization, which
assume that the value of real estate assets diminishes predictably
over time. Since real estate values have historically risen or
fallen with market conditions, the Company believes that FFO
provides a meaningful indication of its performance. The Company
also considers FFO an appropriate performance measure given its
wide use by investors and analysts. The Company computes FFO in
accordance with standards established by the Board of Governors of
NAREIT in its March 1995 White Paper (as amended in November 1999
and April 2002), which may differ from the methodology for
calculating FFO utilized by other equity REITs and, accordingly,
may not be comparable to that of other REITs. Further, FFO does
not represent amounts available for management's discretionary use
because of needed capital replacement or expansion, debt service
obligations or other commitments and uncertainties, nor is it
indicative of funds available to fund the Company's cash needs,
including its ability to make distributions. The Company presents
FFO per diluted share calculations that are based on the
outstanding dilutive common shares plus the outstanding Operating
Partnership units for the periods presented.
|
|
The Company also evaluates its performance by reviewing Adjusted
FFO because it believes that adjusting FFO to exclude certain
recurring and non-recurring items described below provides useful
supplemental information regarding the Company's ongoing operating
performance and that the presentation of Adjusted FFO, when
combined with the primary GAAP presentation of net income (loss),
more completely describes the Company's operating performance. The
Company adjusts FFO for the following items, which may occur in
any period, and refers to this measure as Adjusted FFO:
|
|
- Hotel acquisition and disposition costs: The Company excludes
acquisition and disposition transaction costs expensed during the
period because it believes that including these costs in FFO does
not reflect the underlying financial performance of the Company
and its hotels.
|
- Non-cash ground rent: The Company excludes the non-cash ground
rent expense, which is primarily made up of the straight-line rent
impact from a ground lease.
|
- Management/franchise contract transition costs: The Company
excludes one-time management and/or franchise contract transition
costs expensed during the period because it believes that
including these costs in FFO does not reflect the underlying
financial performance of the Company and its hotels.
|
- Interest expense adjustment for acquired liabilities: The
Company excludes interest expense adjustment for acquired
liabilities assumed in connection with acquisitions, because it
believes that including these non-cash adjustments in FFO does not
reflect the underlying financial performance of the Company.
|
- Capital lease adjustment: The Company excludes the effect of
non-cash interest expense from capital leases because it believes
that including these non-cash adjustments in FFO does not reflect
the underlying financial performance of the Company.
|
- Non-cash amortization of acquired intangibles: The Company
excludes the non-cash amortization of acquired intangibles, which
includes but is not limited to the amortization of favorable and
unfavorable leases and above/below market real estate tax
reduction agreements because it believes that including these
non-cash adjustments in FFO does not reflect the underlying
financial performance of the Company.
|
- Issuance costs of redeemed preferred shares: The Company
excludes issuance costs of redeemed preferred shares during the
period because it believes that including these adjustments in FFO
does not reflect the underlying financial performance of the
Company and its hotels.
|
- Estimated hurricane related repairs and cleanup costs: The
Company excludes estimated hurricane related repairs and cleanup
costs during the period because it believes that including these
adjustments in FFO does not reflect the underlying financial
performance of the Company and its hotels.
|
- Other: The Company excludes the ineffective portion of the
change in fair value of the hedging instruments during the period
because it believes that including these non-cash adjustments in
FFO does not reflect the underlying financial performance of the
Company and its hotels.
|
|
The Company's presentation of FFO in accordance with the NAREIT
White Paper, and as adjusted by the Company, should not be
considered as an alternative to net income (computed in accordance
with GAAP) as an indicator of the Company's financial performance
or to cash flow from operating activities (computed in accordance
with GAAP) as an indicator of its liquidity.
|
|
|
|
|
|
|
|
|
|
|
Pebblebrook Hotel Trust
|
Reconciliation of Net Income (Loss) to EBITDA and Adjusted EBITDA
|
($ in thousands)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$
|
30,571
|
|
|
$
|
(35,535
|
)
|
|
$
|
88,330
|
|
|
$
|
55,540
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
8,969
|
|
|
|
10,257
|
|
|
|
28,015
|
|
|
|
32,490
|
|
Interest expense from joint venture
|
|
|
-
|
|
|
|
2,301
|
|
|
|
-
|
|
|
|
6,859
|
|
Income tax expense (benefit)
|
|
|
1,593
|
|
|
|
1,528
|
|
|
|
181
|
|
|
|
18
|
|
Depreciation and amortization
|
|
|
25,210
|
|
|
|
25,407
|
|
|
|
77,456
|
|
|
|
76,327
|
|
Depreciation and amortization from joint venture
|
|
|
-
|
|
|
|
2,233
|
|
|
|
-
|
|
|
|
6,700
|
|
EBITDA
|
|
$
|
66,343
|
|
|
$
|
6,191
|
|
|
$
|
193,982
|
|
|
$
|
177,934
|
|
Hotel acquisition and disposition costs
|
|
|
14
|
|
|
|
(17
|
)
|
|
|
71
|
|
|
|
-
|
|
Non-cash ground rent
|
|
|
734
|
|
|
|
742
|
|
|
|
2,201
|
|
|
|
2,019
|
|
Management/franchise contract transition costs
|
|
|
-
|
|
|
|
-
|
|
|
|
85
|
|
|
|
79
|
|
Non-cash amortization of acquired intangibles
|
|
|
215
|
|
|
|
240
|
|
|
|
697
|
|
|
|
726
|
|
Gain on sale of hotel properties
|
|
|
(290
|
)
|
|
|
-
|
|
|
|
(14,877
|
)
|
|
|
(40,326
|
)
|
Impairment loss
|
|
|
2,800
|
|
|
|
12,148
|
|
|
|
3,849
|
|
|
|
12,148
|
|
Impairment loss from joint venture
|
|
|
-
|
|
|
|
62,622
|
|
|
|
-
|
|
|
|
62,622
|
|
Estimated hurricane related repairs and cleanup costs
|
|
|
391
|
|
|
|
-
|
|
|
|
391
|
|
|
|
-
|
|
Other
|
|
|
(132
|
)
|
|
|
(1,548
|
)
|
|
|
(132
|
)
|
|
|
324
|
|
Adjusted EBITDA
|
|
$
|
70,075
|
|
|
$
|
80,378
|
|
|
$
|
186,267
|
|
|
$
|
215,526
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
To supplement the Company's consolidated financial statements
presented in accordance with U.S. generally accepted accounting
principles ("GAAP"), this press release includes certain non-GAAP
financial measures as defined under Securities and Exchange
Commission ("SEC") rules.
|
|
These measures are not in accordance with, or an alternative to,
measures prepared in accordance with GAAP and may be different
from similarly titled non-GAAP measures used by other companies.
In addition, these non-GAAP measures are not based on any
comprehensive set of accounting rules or principles. Non-GAAP
measures have limitations in that they do not reflect all of the
amounts associated with the Company's results of operations
determined in accordance with GAAP.
|
|
Earnings before Interest, Taxes, and Depreciation and Amortization
("EBITDA") - The Company believes that EBITDA provides investors a
useful financial measure to evaluate its operating performance,
excluding the impact of our capital structure (primarily interest
expense) and our asset base (primarily depreciation and
amortization).
|
|
The Company also evaluates its performance by reviewing Adjusted
EBITDA because it believes that adjusting EBITDA to exclude
certain recurring and non-recurring items described below provides
useful supplemental information regarding the Company's ongoing
operating performance and that the presentation of Adjusted
EBITDA, when combined with the primary GAAP presentation of net
income (loss), more completely describes the Company's operating
performance. The Company adjusts EBITDA for the following items,
which may occur in any period, and refers to these measures as
Adjusted EBITDA:
|
|
- Hotel acquisition and disposition costs: The Company excludes
acquisition and disposition transaction costs expensed during the
period because it believes that including these costs in EBITDA
does not reflect the underlying financial performance of the
Company and its hotels.
|
- Non-cash ground rent: The Company excludes the non-cash ground
rent expense, which is primarily made up of the straight-line rent
impact from a ground lease.
|
- Management/franchise contract transition costs: The Company
excludes one-time management and/or franchise contract transition
costs expensed during the period because it believes that
including these costs in EBITDA does not reflect the underlying
financial performance of the Company and its hotels.
|
- Non-cash amortization of acquired intangibles: The Company
excludes the non-cash amortization of acquired intangibles, which
includes but is not limited to the amortization of favorable and
unfavorable leases and above/below market real estate tax
reduction agreements because it believes that including these
non-cash adjustments in EBITDA does not reflect the underlying
financial performance of the Company and its hotels.
|
- Gain on sale of hotel properties: The Company excludes Gain on
sale of hotel properties because it believes that including this
adjustment in EBITDA does not reflect the underlying financial
performance of the Company and its hotels.
|
- Impairment loss and Impairment loss from joint venture: The
Company excludes impairment loss and impairment loss from joint
venture because it believes that including this adjustment in
EBITDA does not reflect the underlying financial performance of
the Company and its hotels.
|
- Estimated hurricane related repairs and cleanup costs: The
Company excludes estimated hurricane related repairs and cleanup
costs during the period because it believes that including these
adjustments in EBITDA does not reflect the underlying financial
performance of the Company and its hotels.
|
- Other: The Company excludes the ineffective portion of the
change in fair value of the hedging instruments during the period
because it believes that including these non-cash adjustments in
EBITDA does not reflect the underlying financial performance of
the Company and its hotels.
|
|
The Company's presentation of EBITDA, and as adjusted by the
Company, should not be considered as an alternative to net income
(computed in accordance with GAAP) as a indicator of the Company's
financial performance or to cash flow from operating activities
(computed in accordance with GAAP) as an indicator of its
liquidity.
|
|
|
|
|
|
|
|
|
|
|
Pebblebrook Hotel Trust
|
Reconciliation of Outlook of Net Income (Loss) to FFO and
Adjusted FFO
|
($ in millions, except per share data)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Three months ending December 31, 2017
|
|
Year ending December 31, 2017
|
|
|
Low
|
|
High
|
|
Low
|
|
High
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$
|
2
|
|
|
$
|
5
|
|
|
$
|
90
|
|
|
$
|
93
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
28
|
|
|
|
28
|
|
|
|
105
|
|
|
|
105
|
|
Gain on sale of hotel properties
|
|
|
-
|
|
|
|
-
|
|
|
|
(15
|
)
|
|
|
(15
|
)
|
Impairment loss
|
|
|
-
|
|
|
|
-
|
|
|
|
4
|
|
|
|
4
|
|
FFO
|
|
$
|
29
|
|
|
$
|
32
|
|
|
$
|
184
|
|
|
$
|
187
|
|
Distribution to preferred shareholders
|
|
|
(4
|
)
|
|
|
(4
|
)
|
|
|
(16
|
)
|
|
|
(16
|
)
|
Issuance costs of redeemed preferred shares
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
FFO available to common share and unit holders
|
|
$
|
25
|
|
|
$
|
28
|
|
|
$
|
168
|
|
|
$
|
171
|
|
Non-cash ground rent
|
|
|
1
|
|
|
|
1
|
|
|
|
3
|
|
|
|
3
|
|
Other
|
|
|
1
|
|
|
|
1
|
|
|
|
3
|
|
|
|
3
|
|
Adjusted FFO available to common share and unit holders
|
|
$
|
27
|
|
|
$
|
30
|
|
|
$
|
174
|
|
|
$
|
177
|
|
|
|
|
|
|
|
|
|
|
FFO per common share - diluted
|
|
$
|
0.36
|
|
|
$
|
0.41
|
|
|
$
|
2.39
|
|
|
$
|
2.44
|
|
Adjusted FFO per common share - diluted
|
|
$
|
0.39
|
|
|
$
|
0.43
|
|
|
$
|
2.48
|
|
|
$
|
2.52
|
|
|
|
|
|
|
|
|
|
|
Weighted-average number of fully diluted common shares and units
|
|
|
69.5
|
|
|
|
69.5
|
|
|
|
70.1
|
|
|
|
70.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
To supplement the Company's consolidated financial statements
presented in accordance with U.S. generally accepted accounting
principles ("GAAP"), this press release includes certain non-GAAP
financial measures as defined under Securities and Exchange
Commission ("SEC") rules.
|
|
These measures are not in accordance with, or an alternative to,
measures prepared in accordance with GAAP and may be different
from similarly titled non-GAAP financial measures used by other
companies. In addition, these non-GAAP financial measures are not
based on any comprehensive set of accounting rules or principles.
Non-GAAP financial measures have limitations in that they do not
reflect all of the amounts associated with the Company's results
of operations determined in accordance with GAAP.
|
|
Funds from Operations ("FFO") - FFO represents net income
(computed in accordance with GAAP), excluding gains or losses from
sales of properties, plus real estate-related depreciation and
amortization and after adjustments for unconsolidated
partnerships. The Company considers FFO a useful measure of
performance for an equity REIT because it facilitates an
understanding of the Company's operating performance without
giving effect to real estate depreciation and amortization, which
assume that the value of real estate assets diminishes predictably
over time. Since real estate values have historically risen or
fallen with market conditions, the Company believes that FFO
provides a meaningful indication of its performance. The Company
also considers FFO an appropriate performance measure given its
wide use by investors and analysts. The Company computes FFO in
accordance with standards established by the Board of Governors of
NAREIT in its March 1995 White Paper (as amended in November 1999
and April 2002), which may differ from the methodology for
calculating FFO utilized by other equity REITs and, accordingly,
may not be comparable to that of other REITs. Further, FFO does
not represent amounts available for management's discretionary use
because of needed capital replacement or expansion, debt service
obligations or other commitments and uncertainties, nor is it
indicative of funds available to fund the Company's cash needs,
including its ability to make distributions. The Company presents
FFO per diluted share calculations that are based on the
outstanding dilutive common shares plus the outstanding Operating
Partnership units for the periods presented.
|
|
The Company also evaluates its performance by reviewing Adjusted
FFO because it believes that adjusting FFO to exclude certain
recurring and non-recurring items described below provides useful
supplemental information regarding the Company's ongoing operating
performance and that the presentation of Adjusted FFO, when
combined with the primary GAAP presentation of net income (loss),
more completely describes the Company's operating performance. The
Company adjusts FFO for the following items, which may occur in
any period, and refers to this measure as Adjusted FFO:
|
|
- Non-cash ground rent: The Company excludes the non-cash ground
rent expense, which is primarily made up of the straight-line rent
impact from a ground lease.
|
- Other: The Company excludes Other expenses, which include hotel
acquisition and disposition costs, management/franchise contract
transition costs, interest expense adjustment for acquired
liabilities, capital lease adjustment, non-cash amortization of
acquired intangibles and estimated hurricane related repairs and
cleanup costs, in addition to the ineffective portion of the
change in fair value of the hedging instruments during the period,
because the Company believes that including these non-cash
adjustments in FFO does not reflect the underlying financial
performance of the Company and its hotels.
|
|
The Company's presentation of FFO in accordance with the NAREIT
White Paper, and as adjusted by the Company, should not be
considered as an alternative to net income (computed in accordance
with GAAP) as an indicator of the Company's financial performance
or to cash flow from operating activities (computed in accordance
with GAAP) as an indicator of its liquidity.
|
|
Any differences are a result of rounding.
|
|
|
|
|
|
|
|
|
|
|
Pebblebrook Hotel Trust
|
Reconciliation of Outlook of Net Income (Loss) to EBITDA and
Adjusted EBITDA
|
($ in millions)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Three months ending December 31, 2017
|
|
Year ending December 31, 2017
|
|
|
Low
|
|
High
|
|
Low
|
|
High
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$
|
2
|
|
$
|
5
|
|
$
|
90
|
|
|
$
|
93
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
Interest expense and income tax expense
|
|
|
11
|
|
|
11
|
|
|
39
|
|
|
|
39
|
|
Depreciation and amortization
|
|
|
28
|
|
|
28
|
|
|
105
|
|
|
|
105
|
|
EBITDA
|
|
$
|
41
|
|
$
|
44
|
|
$
|
234
|
|
|
$
|
237
|
|
Gain on sale of hotel properties
|
|
|
-
|
|
|
-
|
|
|
(15
|
)
|
|
|
(15
|
)
|
Non-cash ground rent
|
|
|
1
|
|
|
1
|
|
|
3
|
|
|
|
3
|
|
Impairment loss
|
|
|
-
|
|
|
-
|
|
|
4
|
|
|
|
4
|
|
Other
|
|
|
0
|
|
|
0
|
|
|
2
|
|
|
|
2
|
|
Adjusted EBITDA
|
|
$
|
42
|
|
$
|
45
|
|
$
|
228
|
|
|
$
|
231
|
|
|
|
|
|
|
|
|
|
|
To supplement the Company's consolidated financial statements
presented in accordance with U.S. generally accepted accounting
principles ("GAAP"), this press release includes certain non-GAAP
financial measures as defined under Securities and Exchange
Commission ("SEC") rules.
|
|
These measures are not in accordance with, or an alternative to,
measures prepared in accordance with GAAP and may be different
from similarly titled non-GAAP financial measures used by other
companies. In addition, these non-GAAP financial measures are not
based on any comprehensive set of accounting rules or principles.
Non-GAAP financial measures have limitations in that they do not
reflect all of the amounts associated with the Company's results
of operations determined in accordance with GAAP.
|
|
Earnings before Interest, Taxes, and Depreciation and Amortization
("EBITDA") - The Company believes that EBITDA provides investors a
useful financial measure to evaluate its operating performance,
excluding the impact of our capital structure (primarily interest
expense) and our asset base (primarily depreciation and
amortization).
|
|
The Company also evaluates its performance by reviewing Adjusted
EBITDA because it believes that adjusting EBITDA to exclude
certain recurring and non-recurring items described below provides
useful supplemental information regarding the Company's ongoing
operating performance and that the presentation of Adjusted
EBITDA, when combined with the primary GAAP presentation of net
income (loss), more completely describes the Company's operating
performance. The Company adjusts EBITDA for the following items,
which may occur in any period, and refers to this measure as
Adjusted EBITDA:
|
|
- Non-cash ground rent: The Company excludes the non-cash ground
rent expense, which is primarily made up of the straight-line rent
impact from a ground lease.
|
- Impairment loss: The Company excludes impairment loss because it
believes that including this adjustment in EBITDA does not reflect
the underlying financial performance of the Company and its hotels.
|
- Other: The Company excludes Other expenses, which include hotel
acquisition and disposition costs, management/franchise contract
transition costs, non-cash amortization of acquired intangibles
and estimated hurricane related repairs and cleanup costs, in
addition to the ineffective portion of the change in fair value of
the hedging instruments during the period, because the Company
believes that including these non-cash adjustments in EBITDA does
not reflect the underlying financial performance of the Company
and its hotels.
|
|
The Company's presentation of EBITDA, and as adjusted by the
Company, should not be considered as an alternative to net income
(computed in accordance with GAAP) as an indicator of the
Company's financial performance or to cash flow from operating
activities (computed in accordance with GAAP) as an indicator of
its liquidity.
|
|
Any differences are a result of rounding.
|
|
|
Pebblebrook Hotel Trust
|
Same-Property Statistical Data
|
(Unaudited)
|
|
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
|
|
Same-Property Occupancy
|
|
89.5%
|
|
89.7%
|
|
85.7%
|
|
86.9%
|
Increase/(Decrease)
|
|
(0.2%)
|
|
|
|
(1.4%)
|
|
|
Same-Property ADR
|
|
$256.56
|
|
$264.46
|
|
$249.24
|
|
$252.83
|
Increase/(Decrease)
|
|
(3.0%)
|
|
|
|
(1.4%)
|
|
|
Same-Property RevPAR
|
|
$229.68
|
|
$237.15
|
|
$213.54
|
|
$219.64
|
Increase/(Decrease)
|
|
(3.1%)
|
|
|
|
(2.8%)
|
|
|
|
|
|
|
|
|
|
|
|
Notes:
|
This schedule of hotel results for the three months ended
September 30 includes information from all of the hotels the
Company owned as of September 30, 2017, except for LaPlaya Beach
Resort & Club in both 2017 and 2016 because it was closed during
the third quarter of 2017 due to the impact from Hurricane Irma.
This schedule of hotel results for the nine months ended September
30 includes information from all of the hotels the Company owned
as of September 30, 2017, excludes Hotel Zeppelin San Francisco
for Q1 in both 2017 and 2016 because it was closed during the
first quarter of 2016 for renovation, excludes Dumont NYC for Q2
and Q3 in both 2017 and 2016 because the Company sold this
property during the second quarter of 2017 and excludes LaPlaya
Beach Resort & Club for Q3 in both 2017 and 2016 because it was
closed during the third quarter of 2017 due to the impact from
Hurricane Irma.
|
|
These hotel results for the respective periods may include
information reflecting operational performance prior to the
Company's ownership of the hotels. Any differences are a result of
rounding.
|
|
The information above has not been audited and is presented only
for comparison purposes.
|
|
|
Pebblebrook Hotel Trust
|
Same Property Statistical Data - by Market
|
(Unaudited)
|
|
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
|
|
2017
|
|
2017
|
RevPAR Variance:
|
|
|
|
|
Boston
|
|
0.5
|
%
|
|
(0.3
|
%)
|
Seattle
|
|
0.4
|
%
|
|
5.0
|
%
|
Portland
|
|
(0.2
|
%)
|
|
0.0
|
%
|
San Diego
|
|
(0.8
|
%)
|
|
3.0
|
%
|
Other
|
|
(3.5
|
%)
|
|
0.6
|
%
|
Los Angeles
|
|
(5.2
|
%)
|
|
(5.1
|
%)
|
San Francisco
|
|
(5.6
|
%)
|
|
(9.0
|
%)
|
|
|
|
|
|
West Coast
|
|
(3.6
|
%)
|
|
(4.1
|
%)
|
East Coast
|
|
(5.0
|
%)
|
|
(1.0
|
%)
|
|
|
|
|
|
|
|
Notes:
|
This schedule of hotel results for the three months ended
September 30 includes information from all of the hotels the
Company owned as of September 30, 2017, except for LaPlaya Beach
Resort & Club in both 2017 and 2016 because it was closed during
the third quarter of 2017 due to the impact from Hurricane Irma.
This schedule of hotel results for the nine months ended September
30 includes information from all of the hotels the Company owned
as of September 30, 2017, excludes Hotel Zeppelin San Francisco
for Q1 in both 2017 and 2016 because it was closed during the
first quarter of 2016 for renovation, excludes Dumont NYC for Q2
and Q3 in both 2017 and 2016 because the Company sold this
property during the second quarter of 2017 and excludes LaPlaya
Beach Resort & Club for Q3 in both 2017 and 2016 because it was
closed during the third quarter of 2017 due to the impact from
Hurricane Irma.
|
|
"Other" includes Atlanta (Buckhead), GA, Coral Gables, FL,
Minneapolis, MN, Naples, FL, Nashville, TN, Philadelphia, PA and
Washington DC.
|
|
These hotel results for the respective periods may include
information reflecting operational performance prior to the
Company's ownership of the hotels. Any differences are a result of
rounding.
|
|
The information above has not been audited and is presented only
for comparison purposes.
|
|
|
Pebblebrook Hotel Trust
|
Hotel Operational Data
|
Schedule of Same-Property Results
|
($ in thousands)
|
(Unaudited)
|
|
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
|
|
Same-Property Revenues:
|
|
|
|
|
|
|
|
|
Room
|
|
$
|
143,289
|
|
|
$
|
147,835
|
|
|
$
|
403,438
|
|
|
$
|
416,469
|
|
Food and beverage
|
|
|
41,643
|
|
|
|
39,787
|
|
|
|
133,546
|
|
|
|
132,372
|
|
Other
|
|
|
12,829
|
|
|
|
10,752
|
|
|
|
39,131
|
|
|
|
36,167
|
|
Total hotel revenues
|
|
|
197,761
|
|
|
|
198,374
|
|
|
|
576,115
|
|
|
|
585,008
|
|
|
|
|
|
|
|
|
|
|
Same-Property Expenses:
|
|
|
|
|
|
|
|
|
Room
|
|
$
|
33,913
|
|
|
$
|
33,387
|
|
|
$
|
99,054
|
|
|
$
|
98,028
|
|
Food and beverage
|
|
|
28,579
|
|
|
|
26,656
|
|
|
|
90,044
|
|
|
|
87,785
|
|
Other direct
|
|
|
2,397
|
|
|
|
2,547
|
|
|
|
8,613
|
|
|
|
9,014
|
|
General and administrative
|
|
|
14,176
|
|
|
|
13,933
|
|
|
|
43,450
|
|
|
|
43,715
|
|
Information and telecommunication systems
|
|
|
2,476
|
|
|
|
2,396
|
|
|
|
8,040
|
|
|
|
7,570
|
|
Sales and marketing
|
|
|
14,789
|
|
|
|
14,366
|
|
|
|
45,042
|
|
|
|
44,313
|
|
Management fees
|
|
|
5,838
|
|
|
|
5,827
|
|
|
|
17,064
|
|
|
|
17,097
|
|
Property operations and maintenance
|
|
|
5,143
|
|
|
|
5,004
|
|
|
|
16,260
|
|
|
|
16,174
|
|
Energy and utilities
|
|
|
4,543
|
|
|
|
4,449
|
|
|
|
12,593
|
|
|
|
12,776
|
|
Property taxes
|
|
|
6,422
|
|
|
|
7,141
|
|
|
|
21,726
|
|
|
|
22,615
|
|
Other fixed expenses
|
|
|
4,811
|
|
|
|
4,518
|
|
|
|
14,492
|
|
|
|
13,645
|
|
Total hotel expenses
|
|
|
123,087
|
|
|
|
120,224
|
|
|
|
376,378
|
|
|
|
372,732
|
|
|
|
|
|
|
|
|
|
|
Same-Property EBITDA
|
|
$
|
74,674
|
|
|
$
|
78,150
|
|
|
$
|
199,737
|
|
|
$
|
212,276
|
|
|
|
|
|
|
|
|
|
|
Same-Property EBITDA Margin
|
|
|
37.8
|
%
|
|
|
39.4
|
%
|
|
|
34.7
|
%
|
|
|
36.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes:
|
This schedule of hotel results for the three months ended
September 30 includes information from all of the hotels the
Company owned as of September 30, 2017, except for LaPlaya Beach
Resort & Club in both 2017 and 2016 because it was closed during
the third quarter of 2017 due to the impact from Hurricane Irma.
This schedule of hotel results for the nine months ended September
30 includes information from all of the hotels the Company owned
as of September 30, 2017, excludes Hotel Zeppelin San Francisco
for Q1 in both 2017 and 2016 because it was closed during the
first quarter of 2016 for renovation, excludes both Dumont NYC and
the Parking Garage at Revere Hotel Boston Common for Q2 and Q3 in
both 2017 and 2016 because the Company sold these properties
during the second quarter of 2017 and excludes LaPlaya Beach
Resort & Club for Q3 in both 2017 and 2016 because it was closed
during the third quarter of 2017 due to the impact from Hurricane
Irma.
|
|
These hotel results for the respective periods may include
information reflecting operational performance prior to the
Company's ownership of the hotels. Any differences are a result of
rounding.
|
|
The information above has not been audited and is presented only
for comparison purposes.
|
|
|
Pebblebrook Hotel Trust
|
Same-Property Inclusion Reference Table
|
|
Hotels
|
|
Q1
|
|
Q2
|
|
Q3
|
|
Q4
|
|
|
|
|
|
|
|
|
|
Sir Francis Drake
|
|
X
|
|
X
|
|
X
|
|
X
|
InterContinental Buckhead Atlanta
|
|
X
|
|
X
|
|
X
|
|
X
|
Hotel Monaco Washington DC
|
|
X
|
|
X
|
|
X
|
|
X
|
The Grand Hotel Minneapolis
|
|
X
|
|
X
|
|
X
|
|
X
|
Skamania Lodge
|
|
X
|
|
X
|
|
X
|
|
X
|
Le Méridien Delfina Santa Monica
|
|
X
|
|
X
|
|
X
|
|
X
|
Sofitel Philadelphia
|
|
X
|
|
X
|
|
X
|
|
X
|
Argonaut Hotel
|
|
X
|
|
X
|
|
X
|
|
X
|
The Westin San Diego Gaslamp Quarter
|
|
X
|
|
X
|
|
X
|
|
X
|
Hotel Monaco Seattle
|
|
X
|
|
X
|
|
X
|
|
X
|
Mondrian Los Angeles
|
|
X
|
|
X
|
|
X
|
|
X
|
W Boston
|
|
X
|
|
X
|
|
X
|
|
X
|
Hotel Zetta San Francisco
|
|
X
|
|
X
|
|
X
|
|
X
|
Hotel Vintage Seattle
|
|
X
|
|
X
|
|
X
|
|
X
|
Hotel Vintage Portland
|
|
X
|
|
X
|
|
X
|
|
X
|
W Los Angeles - West Beverly Hills
|
|
X
|
|
X
|
|
X
|
|
X
|
Hotel Zelos San Francisco
|
|
X
|
|
X
|
|
X
|
|
X
|
Embassy Suites San Diego Bay - Downtown
|
|
X
|
|
X
|
|
X
|
|
X
|
Hotel Modera
|
|
X
|
|
X
|
|
X
|
|
X
|
Hotel Zephyr Fisherman's Wharf
|
|
X
|
|
X
|
|
X
|
|
X
|
Hotel Zeppelin San Francisco
|
|
|
|
X
|
|
X
|
|
X
|
The Nines, a Luxury Collection Hotel, Portland
|
|
X
|
|
X
|
|
X
|
|
X
|
Hotel Colonnade Coral Gables, a Tribute Portfolio Hotel
|
|
X
|
|
X
|
|
X
|
|
X
|
Hotel Palomar Los Angeles Beverly Hills
|
|
X
|
|
X
|
|
X
|
|
X
|
Union Station Hotel Nashville, Autograph Collection
|
|
X
|
|
X
|
|
X
|
|
X
|
Revere Hotel Boston Common
|
|
X
|
|
X
|
|
X
|
|
X
|
Parking Garage at Revere Hotel Boston Common
|
|
X
|
|
|
|
|
|
|
LaPlaya Beach Resort & Club
|
|
X
|
|
X
|
|
|
|
|
Hotel Zoe San Francisco
|
|
X
|
|
X
|
|
X
|
|
X
|
Dumont NYC
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes:
|
A property marked with an "X" in a specific quarter denotes that
the same-property operating results of that property are included
in the Same-Property Statistical Data and in the Schedule of
Same-Property Results.
|
|
The Company's third quarter Same-Property RevPAR, RevPAR Growth,
ADR, Occupancy, Revenues, Expenses, EBITDA and EBITDA Margin
include all of the hotels the Company owned as of September 30,
2017, except for LaPlaya Beach Resort & Club in both 2017 and 2016
because it was closed during the third quarter of 2017 due to the
impact from Hurricane Irma. Operating statistics and financial
results may include periods prior to the Company's ownership of
the hotels.
|
|
The Company's estimates and assumptions for Same Property RevPAR,
RevPAR Growth, ADR, Occupancy, Revenues, Expenses, EBITDA and
EBITDA Margin for the Company's 2017 outlook include all of the
hotels the Company owned as of September 30, 2017, except for
Hotel Zeppelin San Francisco for Q1 in both 2017 and 2016 because
it was closed during the first quarter of 2016 for renovation and
LaPlaya Beach Resort & Club for Q3 and Q4 in both 2017 and 2016
because it was closed during the third and fourth quarters of 2017
due to the impact from Hurricane Irma. The operating statistics
and financial results in this press release may include periods
prior to the Company's ownership of the hotels.
|
|
|
Pebblebrook Hotel Trust
|
Historical Operating Data
|
($ in millions except Occupancy, ADR and RevPAR data)
|
(Unaudited)
|
|
Historical Operating Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
First Quarter
|
|
Second Quarter
|
|
Third Quarter
|
|
Fourth Quarter
|
|
Full Year
|
|
|
2016
|
|
2016
|
|
2016
|
|
2016
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
Occupancy
|
|
83%
|
|
88%
|
|
89%
|
|
81%
|
|
85%
|
ADR
|
|
$240
|
|
$255
|
|
$264
|
|
$235
|
|
$249
|
RevPAR
|
|
$199
|
|
$224
|
|
$234
|
|
$190
|
|
$212
|
|
|
|
|
|
|
|
|
|
|
|
Hotel Revenues
|
|
$181.5
|
|
$200.5
|
|
$204.2
|
|
$180.7
|
|
$766.9
|
Hotel EBITDA
|
|
$58.4
|
|
$74.5
|
|
$78.8
|
|
$57.8
|
|
$269.5
|
Hotel EBITDA Margin
|
|
32.2%
|
|
37.2%
|
|
38.6%
|
|
32.0%
|
|
35.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
First Quarter
|
|
Second Quarter
|
|
Third Quarter
|
|
|
|
|
|
|
2017
|
|
2017
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Occupancy
|
|
81%
|
|
87%
|
|
88%
|
|
|
|
|
ADR
|
|
$243
|
|
$251
|
|
$256
|
|
|
|
|
RevPAR
|
|
$196
|
|
$218
|
|
$226
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hotel Revenues
|
|
$177.6
|
|
$200.1
|
|
$201.9
|
|
|
|
|
Hotel EBITDA
|
|
$54.5
|
|
$71.6
|
|
$74.6
|
|
|
|
|
Hotel EBITDA Margin
|
|
30.7%
|
|
35.8%
|
|
36.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes:
|
These historical hotel operating results include information for
all of the hotels the Company owned as of September 30, 2017.
These historical operating results include periods prior to the
Company's ownership of the hotels. The information above does not
reflect the Company's corporate general and administrative
expense, interest expense, property acquisition costs,
depreciation and amortization, taxes and other expenses. Any
differences are a result of rounding.
|
|
The information above has not been audited and is presented only
for comparison purposes.
|
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20171023006209/en/
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|