Xenia Hotels Results

Xenia Hotels & Resorts Reports Second Quarter 2016 Results

Same-Property RevPAR increased 1.8% from the second quarter of 2015 to $162.47, as occupancy remained flat and ADR increased 1.8%. Excluding hotels located in Houston, Same-Property RevPAR increased 3.8% from the second quarter of 2015, as occupancy increased 63 basis points and ADR increased 3.0%.

Xenia Hotels

Xenia Hotels & Resorts, Inc. (NYSE:  XHR)  today announced results for the quarter ended June 30, 2016.  

Second Quarter 2016 Highlights

  • Net Income: Net income attributable to common stockholders was $25.8 million and net income per share was $0.24. 
  • Same-Property RevPAR: Same-Property RevPAR increased 1.8% from the second quarter of 2015 to $162.47, as occupancy remained flat and ADR increased 1.8%. Excluding hotels located in Houston, Same-Property RevPAR increased 3.8% from the second quarter of 2015, as occupancy increased 63 basis points and ADR increased 3.0%. 
  • Same-Property Hotel EBITDA Margin: Same-Property Hotel EBITDA Margin was 36.3%, an increase of 115 basis points from the same period in 2015. 
  • Total Portfolio RevPAR: Total portfolio RevPAR was 8.3% higher than in the second quarter of 2015, reflecting portfolio performance, as well as changes in portfolio composition. 
  • Adjusted EBITDA: Adjusted EBITDA increased $7.7 million to $88.0 million, an increase of 9.6% over the second quarter of 2015. 
  • Adjusted FFO per Diluted Share: Adjusted FFO available to common stockholders increased to $0.65 per diluted share compared to $0.57 per diluted share for the second quarter of 2015, an increase of 14.0%. 
  • Transaction Activity: During the quarter, the Company completed the sale of four hotels for a gross price of $136 million. 
  • Financing Activity: In June, the Company paid off one $22 million mortgage loan. 
  • Dividends: The Company declared its second quarter dividend of $0.275 per share to common stock and unit holders of record on June 30, 2016.

Year to Date Results

For the six months ended June 30, 2016, net income attributable to common stockholders was $17 million, a 90.0% increase over the same period prior year, due largely to one-time separation and other start-up related expenses in 2015, offset by the provision for asset impairment and loss on debt extinguishment incurred during 2016.  Same-Property RevPAR increased 1.3% from the first half of 2015 to $151.54, as occupancy declined 79 basis points and ADR increased 2.4%.  The Company's Same-Property Hotel EBITDA margin was 33.3%, which improved 26 basis points compared to the same period prior year.  The Company's Adjusted EBITDA and Adjusted FFO per diluted share increased 3.7% and 5.9%, respectively, during the first half of 2016 as compared to the same period in 2015. 

"We continue to be focused on our strategy of owning and further improving a high-quality, diversified portfolio of hotels, executing our differentiated approach to portfolio management and maintaining a strong financial profile," said Marcel Verbaas, President and Chief Executive Officer of Xenia.  "While the dynamics in the Houston market continue to be unfavorable, we were able to generate 1.8% Same-Property portfolio RevPAR growth in the second quarter, as our Same-Property portfolio excluding our Houston area assets achieved a healthy 3.8% RevPAR increase.  Our continued efforts to contain costs and optimize our portfolio through unique property initiatives resulted in margin growth of 115 basis points during the quarter, in part due to refunds related to real estate tax appeals. We will maintain our focus on cost control and revenue enhancement opportunities as we look cautiously into the second half of the year and anticipate a period of relatively muted RevPAR growth."

"We are particularly pleased with our acquisition and disposition efforts to improve our portfolio over the past year, as demonstrated by the fact that total portfolio RevPAR during the second quarter exceeded prior year by 8.3%. We have been able to achieve this while further strengthening our balance sheet, resulting in a net senior capital to EBITDA ratio that is among the lowest of our peer group," Mr. Verbaas continued.  "The completion of nearly $310 million of dispositions since last fall has allowed us to maintain this conservative leverage profile, while also providing us with the ability to return capital to our investors through the execution of our share repurchase program. The fact that we were able to sell six hotels on the lower end of the portfolio at a weighted average multiple of 10.8x 2015 EBITDA speaks to the value of our portfolio, particularly when taking into account that this excludes approximately $90 million of total near-term capital investments that we were able to avoid as a result of these dispositions. Adjusted for this required near-term capital, the combined sales price represented a 13.9x 2015 EBITDA multiple."

Operating Results

The Company's results include the following:

 

Three Months Ended June 30,

Six Months Ended June 30,

2016

2015

Change

2016

2015

Change

($ amounts in thousands, except hotel statistics and per share amounts)

Net income attributable to common 

stockholders

$

25,768

$

23,739

8.5

%

$

16,851

$

8,869

90.0

%

Net income per share available to 

common stockholders

$

0.24

$

0.21

14.3

%

$

0.15

0.08

87.5

%

Same-Property Number of Hotels

43

43

43

43

Same-Property Number of Rooms

11,199

11,194

5

11,199

11,194

5

Same-Property Occupancy

80.0

%

80.1

%

(1 bps)

76.2

%

77.0

%

(79 bps)

Same-Property Average Daily Rate

$

202.96

$

199.30

1.8

%

$

198.77

$

194.20

2.4

%

Same-Property RevPAR

$

162.47

$

159.55

1.8

%

$

151.54

$

149.59

1.3

%

Same-Property Hotel EBITDA(1)

$

86,799

$

83,342

4.1

%

$

150,241

$

147,818

1.6

%

Same-Property Hotel EBITDA Margin(1)

36.3

%

35.1

%

115 bps

33.3

%

33.0

%

26 bps

Total Portfolio Number of Hotels(2)

46

46

46

46

Total Portfolio Number of Rooms(2)

11,594

12,643

(1,049)

11,594

12,643

(1,049)

Total Portfolio RevPAR(3)

$

162.72

$

150.19

8.3

%

$

150.53

$

142.44

5.7

%

Adjusted EBITDA(1)

$

87,997

$

80,284

9.6

%

$

150,529

$

145,118

3.7

%

Adjusted FFO(1)

$

70,249

$

63,870

10.0

%

$

117,328

$

114,763

2.2

%

Adjusted FFO per diluted share(1)

$

0.65

$

0.57

14.0

%

$

1.08

$

1.02

5.9

%

(1)     See tables later in this press release for reconciliations from net income to Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA"), Adjusted EBITDA, Funds From

          Operations ("FFO"), Adjusted FFO, and Same-Property Hotel EBITDA.  EBITDA, Adjusted EBITDA, FFO, Adjusted FFO, Adjusted FFO per diluted share, Same-Property Hotel EBITDA, 

          and Same-Property Hotel EBITDA Margin are non-GAAP financial measures. 

(2)     As of end of periods presented.

(3)     Results of all hotels as owned during the periods presented, including the results of hotels sold or acquired for the actual period of ownership by the Company.

 

"Same-Property" results include the results for all hotels owned as of June 30, 2016, except for the Grand Bohemian Hotel Charleston and the Grand Bohemian Hotel Mountain Brook, which commenced operations in the second half of 2015, and the Hotel Commonwealth, which underwent a significant expansion project in late 2015.  "Same-Property" results include periods prior to the Company's ownership of the Canary Santa Barbara, RiverPlace Hotel, and Hotel Palomar Philadelphia, and exclude the NOI guaranty payment at the Andaz San Diego.  Results include renovation disruption for multiple capital projects during the periods presented.

Disposition Activity

As previously disclosed, in April the Company sold the DoubleTree by Hilton in Washington DC for a sale price of $65 million, and in May, the Company sold the Embassy Suites Baltimore Hunt Valley for a sale price of $20 million.

In June, the Company completed the sale of the 287-room Marriott Atlanta Century Center / Emory Area in Atlanta, Georgia and the 226-room Hilton Phoenix Suites in Phoenix, Arizona for a combined sale price of $50.8 million, inclusive of $4.5 million of capital in the hotels' reserve accounts which was acquired by the buyer.

Proceeds from dispositions will be utilized for general corporate purposes which may include share repurchases under the Company's existing repurchase authorization, debt repayments and potential acquisitions consistent with the Company's long-term strategy of investing in high-quality assets primarily located in top 25 lodging markets and key leisure destinations.

"We are pleased with the continued successful execution of our previously announced plan to selectively dispose of, and harvest value from, lower-quality assets in the portfolio that no longer fit our target criteria.  During the quarter, we completed four dispositions for over $136 million at a weighted average EBITDA multiple of 10.4x, based on TTM EBITDA as of the end of the first quarter, excluding near-term capital requirements.  Each of the hotels required significant near-term capital investments, collectively totaling nearly $60 million, none of which we felt to be a prudent use of our capital.  Adjusting for this capital, the sale price represents a 14.9x weighted average TTM EBITDA multiple as of the end of the first quarter. On average, these hotels generated RevPAR that was more than 25% below the remainder of the portfolio, demonstrating our continued focus on quality and the improvement of our overall portfolio," commented Mr. Verbaas.

Balance Sheet

In June 2016, the Company paid off the $22 million mortgage loan collateralized by the Courtyard Pittsburgh Downtown.

As of June 30, 2016, the Company had total outstanding debt of $1.3 billion with a weighted average interest rate of 3.49%.  In addition, the Company had $278 million of cash and cash equivalents and full availability on its $400 million senior unsecured credit facility.  Total net debt to trailing 12 month Corporate EBITDA (as defined in Section 1.01 of the Company's senior unsecured credit facility) was 3.6x.  

Capital Expenditures

During the second quarter, the Company invested $13 million in its portfolio.  The Company completed the guestroom renovation, the new resort-style pool, and the outdoor function space at the 275-room Marriott Napa Valley Hotel & Spa, and made significant progress on the meeting room and ballroom renovation at the Renaissance Atlanta Waverly Hotel & Convention Center.  The Company also added two keys to the inventory at the Hyatt Key West Resort & Spa as a result of the relocation of the spa at the hotel. 

For the six months ended June 30, 2016, the Company invested over $20 million in its portfolio.  Several significant capital projects are scheduled to commence during the second half of the year, including guestroom renovations at the Andaz San Diego, the Hyatt Key West Resort & Spa, and the Westin Galleria Houston.  

Share Repurchase

During the second quarter, the Company purchased 738,435 shares under its share repurchase authorization for an aggregate purchase price of $11.4 million.  During the six months ended June 30, 2016, the Company purchased 4,128,935 shares under its share repurchase authorization for an aggregate purchase price of $60.7 million. 

Subsequent to quarter end as of July 29, 2016, the Company repurchased an additional 16,613 shares for an aggregate purchase price of  $0.3 million.  The total shares repurchased was 4,145,548, at a weighted average price of $14.71 per share, for total consideration of approximately $61.0 million as of July 29, 2016.  Additionally, the Company had approximately $39.0 millionremaining under its share repurchase authorization.

2016 Outlook and Guidance

The Company's outlook for 2016 is based on the current economic environment, incorporates all expected renovation disruption, and assumes no further acquisitions, dispositions, or share repurchases.  Same-Property RevPAR growth excludes the Grand Bohemian Hotel Charleston and the Grand Bohemian Hotel Mountain Brook, as both properties commenced operations in the second half of 2015, and the Hotel Commonwealth, as the property underwent a significant expansion project in late 2015, as well as the five hotels sold in 2016.  The change to the Company's anticipated Adjusted EBITDA from previously provided guidance is partially attributable to the disposition of the Marriott Atlanta Century Center/Emory Area and Hilton Phoenix Suites, which accounted for approximately $2.5 million of the decrease, offset by a reduction in expected general and administrative expense of $1.0 million, with the balance resulting from changes in the Company's forecast for the remainder of the year.  The change in Adjusted FFO is due to similar factors, as well as a $1.5 million reduction in expected income tax expense.

 

Current 2016 Guidance

Variance to Prior Guidance

Low End

High End

Low End

High End

($ amounts in millions, except per share data)

Net Income

$53

$61

NA

NA

Same-Property RevPAR Growth

0.0%

1.0%

(2.0)%

(3.0)%

Adjusted EBITDA

$288

$296

$(9)

$(15)

Adjusted FFO

$236

$244

$(7)

$(13)

Adjusted FFO per Diluted Share

$2.17

$2.25

$(0.06)

$(0.11)

Capital Expenditures

$57

$64

$(5)

$(8)

 

Guidance assumptions include:

  • Average RevPAR declines of 13% to 16% at the Company's Houston area hotels, primarily due to the impact of continued weakness in the energy market and new supply. Excluding Houston, the Company projects Same-Property RevPAR growth of 2.0% to 3.0%. 
  • General and administrative expense of $21.0 million to $22.0 million, excluding management transition and severance costs and non-cash share-based compensation. 
  • Interest expense of $45.5 million to $46.5 million, excluding non-cash loan related costs. 
  • Income tax expense of $5.5 million to $6.5 million

"Xenia continues to be well-positioned to advantageously allocate capital throughout the lodging cycle.  We believe the Company's high quality asset base and strong leverage profile are two key tools to opportunistically grow value.  We continue to be focused on improving the quality of the portfolio and preserving the strength of the balance sheet, as evidenced by our actions in the second quarter.  Looking ahead, we will continue to focus on those drivers of long-term value creation," stated Atish Shah, Executive Vice President and Chief Financial Officer of Xenia.

"As to the current operating environment, the industry outlook for the remainder of 2016 continues to moderate.  Our reduced full-year guidance reflects that moderation. While revenue growth is challenged by a lack of pricing power, we continue to be focused on margin expansion, solid G&A expense control, and preserving our favorable cost of capital."

About Xenia Hotels & Resorts, Inc.

Xenia Hotels & Resorts, Inc. is a self-advised and self-administered REIT that invests primarily in premium full service, lifestyle and urban upscale hotels, with a focus on the top 25 U.S. lodging markets as well as key leisure destinations in the United States. The Company owns 46 hotels, including 44 wholly owned hotels, comprising 11,594 rooms, across 20 states and the District of Columbia. Xenia's hotels are primarily operated by industry leaders such as Marriott®, Kimpton®, Hyatt®, Starwood®, Aston®, Fairmont®, Hilton® and Loews®, as well as leading independent management companies including Sage Hospitality, The Kessler Collection, Urgo Hotels & Resorts, Davidson Hotels & Resorts and Concord Hospitality. 

 

 

Xenia Hotels & Resorts, Inc.

Condensed Consolidated Balance Sheets

As of June 30, 2016 and December 31, 2015 

($ amounts in thousands, except per share data)

June 30, 2016

December 31, 2015

Assets

(Unaudited)

Investment properties:

  Land

$

343,000

343,000

  Building and other improvements

2,817,370

2,680,591

  Construction in progress

169

Total

$

3,160,370

3,023,760

  Less: accumulated depreciation

(593,247)

(518,961)

Net investment properties

$

2,567,123

2,504,799

Cash and cash equivalents

278,055

122,154

Restricted cash and escrows

83,903

73,021

Accounts and rents receivable, net of allowance of $307 and $243, respectively

27,913

23,529

Intangible assets, net of accumulated amortization of $18,425 and $16,660, 

respectively

78,180

58,059

Deferred tax asset

2,205

2,304

Other assets

17,670

40,683

Assets held for sale

181,396

Total assets (including $76,743 and $77,140, respectively, related to 

consolidated variable interest entities)

$

3,055,049

$

3,005,945

Liabilities

Debt, net of loan discounts, premiums and unamortized deferred financing costs

$

1,266,001

1,094,536

Accounts payable and accrued expenses

77,705

83,211

Distributions payable

30,135

25,684

Other liabilities

48,158

27,510

Liabilities associated with assets held for sale

31,646

Total liabilities (including $48,095 and $48,582, respectively, related to 

consolidated variable interest entities)

1,421,999

1,262,587

Commitments and contingencies

Stockholders' equity

Common stock, $0.01 par value, 500,000,000 shares authorized, 107,624,890 and 

111,671,372 shares issued and outstanding as of June 30, 2016 and December 

31, 2015, respectively

1,077

1,117

Additional paid in capital

1,936,722

1,993,760

Accumulated other comprehensive (loss) income

(12,025)

1,543

Distributions in excess of retained earnings

(311,896)

(268,991)

Total Company stockholders' equity

$

1,613,878

$

1,727,429

Non-controlling interests

19,172

15,929

Total equity

$

1,633,050

$

1,743,358

Total liabilities and equity

$

3,055,049

$

3,005,945

 

 

 

 

Xenia Hotels & Resorts, Inc.

Combined Condensed Consolidated Statements of Operations and Comprehensive Income

For the Three and Six Months Ended June 30, 2016 and 2015

(Unaudited)

($ amounts in thousands, except per share data)

Three Months Ended June 30,

Six Months Ended June 30,

2016

2015

2016

2015

Revenues:

Rooms revenues

$

180,977

$

172,792

$

340,295

$

325,882

Food and beverage revenues

66,329

64,954

129,797

127,207

Other revenues

14,072

13,477

26,321

26,007

Total revenues

$

261,378

$

251,223

$

496,413

$

479,096

Expenses:

Rooms expenses

38,183

37,348

74,958

72,534

Food and beverage expenses

42,009

41,311

84,242

81,498

Other direct expenses

4,086

4,385

8,051

8,651

Other indirect expenses

57,914

56,226

115,881

109,484

Management and franchise fees

13,780

13,618

26,027

25,070

Total hotel operating expenses

$

155,972

$

152,888

$

309,159

$

297,237

Depreciation and amortization

38,318

35,889

77,270

72,276

Real estate taxes, personal property taxes and insurance

10,542

11,805

22,575

23,999

Ground lease expense

1,402

1,322

2,755

2,597

General and administrative expenses

7,674

6,947

18,298

13,992

Acquisition transaction costs

6

856

146

885

Provision for asset impairment

2,396

9,991

Separation and other start-up related expenses

1,165

26,461

Total expenses

$

216,310

$

210,872

$

440,194

$

437,447

Operating income

$

45,068

$

40,351

$

56,219

$

41,649

Gain (loss) on sale of investment properties

(90)

792

Other income

94

30

178

2,717

Interest expense

(12,801)

(13,048)

(25,640)

(26,230)

Loss on extinguishment of debt

(35)

(178)

(4,778)

(283)

Net income before income taxes

$

32,236

$

27,155

$

26,771

$

17,853

Income tax expense

(6,095)

(3,405)

(9,800)

(8,484)

Net income from continuing operations

$

26,141

$

23,750

$

16,971

$

9,369

Net loss from discontinued operations

(489)

Net income

$

26,141

$

23,750

$

16,971

$

8,880

Non-controlling interests in consolidated real estate entities

(43)

120

Non-controlling interests of common units in Operating 

Partnership

(330)

(3)

(240)

(3)

Net income attributable to non-controlling interests

$

(373)

$

(3)

$

(120)

$

(3)

Net income attributable to the Company

$

25,768

$

23,747

$

16,851

$

8,877

Distributions to preferred stockholders

(8)

(8)

Net income attributable to common stockholders

$

25,768

$

23,739

$

16,851

$

8,869

 

 

 

 

Xenia Hotels & Resorts, Inc.

Combined Condensed Consolidated Statements of Operations and Comprehensive Income - Continued

For the Three and Six Months Ended June 30, 2016 and 2015 

(Unaudited)

($ amounts in thousands, except per share data)

Three Months Ended June 30,

Six Months Ended June 30,

2016

2015

2016

2015

Basic and diluted earnings per share

Income from continuing operations available to common 

stockholders

$

0.24

$

0.21

$

0.15

$

0.08

Income from discontinued operations available to common 

stockholders

$

$

Net income per share available to common stockholders

$

0.24

$

0.21

$

0.15

$

0.08

Weighted average number of common shares (basic)

107,936,336

111,676,096

108,813,649

112,316,767

Weighted average number of common shares (diluted)

108,048,155

111,914,085

108,910,761

112,460,712

Comprehensive Income:

Net income

$

26,141

$

23,750

$

16,971

$

8,880

Other comprehensive income:

  Unrealized loss on interest rate derivative instruments

(5,286)

(15,645)

  Reclassification adjustment for amounts recognized in net 

  income (interest expense)

973

1,898

$

21,828

$

23,750

$

3,224

$

8,880

Comprehensive income attributable to non-controlling interests:

Non-controlling interests in consolidated real estate entities

(43)

120

Non-controlling interests of common units in Operating 

Partnership

(274)

(3)

(61)

(3

Comprehensive income attributable to non-controlling interests

$

(317)

$

(3)

$

59

$

(3

Comprehensive income attributable to the Company

$

21,511

$

23,747

$

3,283

$

8,877

 

Non-GAAP Financial Measures

The Company considers the following useful non-GAAP financial measures to investors as key supplemental measures of operating performance: EBITDA, Adjusted EBITDA, Same Property Hotel EBITDA, Same-Property Hotel EBITDA Margin, FFO, Adjusted FFO, and Adjusted FFO per diluted share.  These non-GAAP financial measures should be considered along with, but not as alternatives to, net income or loss, operating profit, cash from operations, or any other operating performance measure as prescribed per GAAP.

EBITDA and Adjusted EBITDA

EBITDA is a commonly used measure of performance in many industries and is defined as net income or loss (calculated in accordance with GAAP) excluding interest expense, provision for income taxes (including income taxes applicable to sale of assets) and depreciation and amortization.  The Company considers EBITDA useful to an investor regarding results of operations, in evaluating and facilitating comparisons of operating performance between periods and between REITs by removing the impact of capital structure (primarily interest expense) and asset base (primarily depreciation and amortization) from operating results, even though EBITDA does not represent an amount that accrues directly to common stockholders.  In addition, EBITDA is used as one measure in determining the value of hotel acquisitions and dispositions and along with FFO and Adjusted FFO, it is used by management in the annual budget process for compensation programs. The Company presents EBITDA attributable to common stock and unit holders, which includes its Operating Partnership units because its Operating Partnership units may be redeemed for common stock.  The Company believes it is meaningful for the investor to understand EBITDA attributable to all common stock and Operating Partnership units.

The Company further adjusts EBITDA for certain additional items such as hotel property acquisitions and pursuit costs, amortization of share-based compensation, equity investment adjustments, the cumulative effect of changes in accounting principles, impairment of real estate assets, operating results from properties sold and other costs it believes do not represent recurring operations and are not indicative of the performance of its underlying hotel property entities.  The Company believes Adjusted EBITDA provides investors with another financial measure in evaluating and facilitating comparison of operating performance between periods and between REITs that report similar measures.

Same-Property Hotel EBITDA and Same-Property Hotel EBITDA Margin

"Same-Property" results include the results for all hotels owned as of June 30, 2016, except for the Grand Bohemian Hotel Charleston and the Grand Bohemian Hotel Mountain Brook, which commenced operations in the second half of 2015, and the Hotel Commonwealth, which underwent a significant expansion project in late 2015.  "Same-Property" results include periods prior to the Company's ownership of the Canary Santa Barbara, RiverPlace Hotel and Hotel Palomar Philadelphia, and exclude the NOI guaranty payment at the Andaz San Diego.  Results include renovation disruption for multiple capital projects during the periods presented.

The Company calculates Hotel EBITDA in accordance with USALI, which is defined as net income or loss (calculated in accordance with GAAP) after adding back replacement reserves.  Hotel EBITDA Margin is calculated by dividing Hotel EBITDA by Total Operating Revenues.

FFO and Adjusted FFO

The Company calculates FFO in accordance with standards established by the National Association of Real Estate Investment Trusts (NAREIT), which defines FFO as net income or loss (calculated in accordance with GAAP), excluding real estate-related depreciation, amortization and impairments, gains (losses) from sales of real estate, the cumulative effect of changes in accounting principles, similar adjustments for unconsolidated partnerships and joint ventures, and items classified by GAAP as extraordinary. Historical cost accounting for real estate assets implicitly assumes that the value of real estate assets diminishes predictably over time.  Since real estate values instead have historically risen or fallen with market conditions, most industry investors consider presentations of operating results for real estate companies that use historical cost accounting to be insufficient by themselves.  The Company believes that the presentation of FFO provides useful supplemental information to investors regarding operating performance by excluding the effect of real estate depreciation and amortization, gains (losses) from sales for real estate, impairments of real estate assets, extraordinary items and the portion of these items related to unconsolidated entities, all of which are based on historical cost accounting and which may be of lesser significance in evaluating current performance.  The Company believes that the presentation of FFO can facilitate comparisons of operating performance between periods and between REITs, even though FFO does not represent an amount that accrues directly to common stockholders.  The calculation of FFO may not be comparable to measures calculated by other companies who do not use the NAREIT definition of FFO or do not calculate FFO per diluted share in accordance with NAREIT guidance.  Additionally, FFO may not be helpful when comparing Xenia to non-REITs.  The Company presents FFO attributable to common stock and unit holders, which includes its Operating Partnership units because its Operating Partnership units may be redeemed for common stock.  The Company believes it is meaningful for the investor to understand FFO attributable to all common stock and Operating Partnership units.

The Company further adjusts FFO for certain additional items that are not in NAREIT's definition of FFO such as hotel property acquisition and pursuit costs, amortization of debt origination costs and share-based compensation, operating results from properties that are sold and other expenses it believes do not represent recurring operations.  The Company believes that Adjusted FFO provides investors with useful supplemental information that may facilitate comparisons of ongoing operating performance between periods and between REITs that make similar adjustments to FFO and is beneficial to investors' complete understanding of operating performance.

Adjusted FFO per diluted share

The Company calculates Adjusted FFO per diluted share by dividing the Adjusted FFO for the respective period by the diluted weighted average number of common stock shares for the corresponding period.  The Company's diluted weighted average number of common shares outstanding is calculated by taking the weighted average of the common stock outstanding for the respective period plus the effect of any dilutive securities.  Any anti-dilutive securities are excluded from the diluted earnings per-share calculation.

 

 

 

 

 

Xenia Hotels & Resorts, Inc.

Reconciliation of Net Income to EBITDA, Adjusted EBITDA and Same-Property Hotel EBITDA

For the Three and Six Months Ended June 30, 2016 and 2015

($ amounts in thousands)

Three Months Ended June 30,

Six Months Ended June 30,

2016

2015

2016

2015

Net income

$

26,141

$

23,750

$

16,971

$

8,880

Adjustments:

Interest expense

12,801

13,048

25,640

26,230

Income tax expense

6,095

3,405

9,800

8,484

Depreciation and amortization related to investment properties

38,318

35,889

77,270

72,276

Non-controlling interests in consolidated real estate entities

(43)

120

Adjustments related to non-controlling interests in consolidated 

real estate entities

(314)

(625)

EBITDA attributable to common stock and unit holders

$

82,998

$

76,092

$

129,176

$

115,870

Reconciliation to Adjusted EBITDA and Hotel EBITDA

Impairment of investment properties

2,396

9,991

Loss (gain) on sale of investment property

90

(792)

Loss on extinguishment of debt

35

178

4,778

283

Acquisition and pursuit costs

6

856

146

885

Amortization of share-based compensation expense

2,307

1,774

5,004

3,448

Amortization of above and below market ground leases

165

107

336

213

Gain from excess property insurance recovery

(276)

Business interruption insurance recoveries, net(1)

154

(2,170)

EBITDA adjustment for hotels sold prior to spin-off

(42)

404

Management transition and severance expenses

1,890

Other non-recurring expenses(2)

1,165

26,461

Adjusted EBITDA attributable to common stock and unit 

holders

$

87,997

$

80,284

$

150,529

$

145,118

Corporate expenses

5,685

5,294

11,871

10,791

Income from sold properties

(1,753)

(7,652)

(5,959)

(15,583)

Pro forma hotel level adjustments, net(3)

(5,130)

5,416

(6,200)

7,492

Same-Property Hotel EBITDA attributable to common stock 

and unit holders

$

86,799

$

83,342

$

150,241

$

147,818

(1)    The business interruption insurance proceeds received during the six months ended June 30, 2015 was $3.7 million, which is net of $1.5 million of hotel related 

         expenses attributable to those hotels impacted by the August 2014 Napa Earthquake.

(2)     For the three and six months ended June 30, 2015, other non-recurring expenses include one-time costs related to the listing of our common stock on the NYSE, 

          such as legal and other professional fees, costs related to our tender offer, and other start-up costs incurred while transitioning to a stand-alone, 

          publicly-traded company.   

(3)     Pro forma to include the results of operations of the Canary Santa Barbara, RiverPlace Hotel, and Hotel Palomar Philadelphia for the three and six months ended 

          June 30, 2015, which are periods prior to Company ownership, and to exclude the results of operations of the Grand Bohemian Hotel Charleston and the Grand 

          Bohemian Hotel Mountain Brook, which commenced operations in the second half of 2015, and the Hotel Commonwealth, which underwent a significant 

          expansion project in late 2015, for the three and six months ended June 30, 2016.

 

 

 

 

Xenia Hotels & Resorts, Inc.

Reconciliation of Net Income to FFO and Adjusted FFO

For the Three and Six Months Ended June 30, 2016 and 2015

($ amounts in thousands)

Three Months Ended June 30,

Six Months Ended June 30,

2016

2015

2016

2015

Net income

$

26,141

$

23,750

$

16,971

$

8,880

Adjustments:

Depreciation and amortization related to investment 

properties

38,318

35,889

77,270

72,276

Impairment of investment property

2,396

9,991

Loss (gain) on sale of investment property

90

(792)

Non-controlling interests in consolidated real estate entities

(43)

120

Adjustments related to non-controlling interests in 

consolidated real estate entities

(224)

(448)

FFO attributable to the Company

$

66,678

$

59,639

$

103,112

$

81,156

Distribution to preferred shareholders

(8)

(8

FFO attributable to common stock and unit holders

$

66,678

$

59,631

$

103,112

$

81,148

Reconciliation to Adjusted FFO

Loss on extinguishment of debt

35

178

4,778

283

Acquisition and pursuit costs

6

856

146

885

Loan related costs(1)

1,058

1,022

2,062

2,191

Amortization of share-based compensation expense

2,307

1,774

5,004

3,448

Amortization of above and below market ground leases

165

107

336

213

Income tax related to restructuring(2)

(975)

1,900

Business interruption proceeds net of hotel related expenses(3)

154

(2,170

FFO adjustment for hotels sold prior to spin-off

(42)

404

Management transition and severance expenses

1,890

Other non-recurring expenses (4)

1,165

26,461

Adjusted FFO attributable to common stock and unit 

holders

$

70,249

$

63,870

$

117,328

$

114,763

(1)     Loan related costs included amortization of debt discounts, premiums and deferred loan origination costs.

(2)     For the three and six months ended June 30, 2015, the Company recognized income tax expense of $3.4 million and $8.5 million, respectively, 

          of which $1.9 million for the six months related to a gain on the transfer of a hotel between legal entities resulting in a more optimal structure 

          in connection with the Company's intention to elect to be taxed as a REIT.   During the three months ended June 30, 2015, the company 

          revised its estimated tax for restructuring which resulted in a reduction of the related expense of $1.0 million.

(3)     The business interruption insurance recovery proceeds received during the six months ended June 30, 2015 was $3.7 million which was net of 

          $1.5 million of hotel related expenses attributable to those hotels impacted by the August 2014 Napa Earthquake.

(4)     For the three and six months ended June 30, 2015, other non-recurring expenses include one-time costs related to the listing of our common 

          stock on the NYSE, such as legal and other professional fees, costs related to our tender offer, and other start-up costs incurred while 

          transitioning to a stand-alone, publicly-traded company. 

 

 

 

 

Xenia Hotels & Resorts, Inc.

Reconciliation of Net Income to Adjusted EBITDA

for Current Full Year 2016 Guidance

($ amounts in millions)

Guidance Midpoint

Net income attributable to the Company

$

57

Adjustments:

Depreciation and amortization related to investment properties

154

Interest expense

50

Income tax expense

6

Adjustments related to non-controlling interests

(1)

EBITDA attributable to common stock and unit holders

$

266

Gain on sale and impairment of investment property

9

Amortization of share-based compensation expense

9

Loss on extinguishment of debt

5

Other(1)

3

Adjusted EBITDA attributable to common stock and unit holders

$

292

(1) Includes management transition and severance expenses, amortization of above and below market ground 

      leases, and acquisition and pursuit costs.

 

 

 

 

Reconciliation of Net Income to Adjusted FFO

for Current Full Year 2016 Guidance

($ amounts in millions)

Guidance Midpoint

Net income attributable to the Company

$

57

Adjustments:

Depreciation and amortization related to investment properties

154

Gain on sale and impairment of investment property

9

Adjustments related to non-controlling interests

(1)

FFO attributable to common stock and unit holders

$

219

Amortization of share-based compensation expense

9

Loss on extinguishment of debt

5

Other(2)

7

Adjusted FFO attributable to common stock and unit holders

$

240

(2) Includes loan related costs, management transition and severance expenses, amortization of above and below 

      market ground leases, and acquisition and pursuit costs.

 

 

 

 

Xenia Hotels & Resorts, Inc.

Debt Summary

($ amounts in thousands)

Rate Type

Rate(1)

Fully Extended 

Maturity Date(2)

Outstanding as of 

June 30, 2016

  Renaissance Atlanta Waverly Hotel & Convention Center

 Fixed

5.50%

December 2016

$

97,000

  Renaissance Austin Hotel

 Fixed

5.51%

December 2016

83,000

  Marriott Griffin Gate Resort & Spa

 Variable

2.96%

March 2017

34,000

  Courtyard Birmingham Downtown at UAB

 Fixed

5.25%

April 2017

13,198

  Residence Inn Denver City Center

 Variable

2.71%

April 2018

45,210

  Bohemian Hotel Savannah Riverfront

 Variable

2.81%

December 2018

27,480

  Fairmont Dallas

 Variable

2.45%

April 2019

55,863

  Andaz Savannah

 Variable

2.46%

January 2020

21,500

  Hotel Monaco Denver

 Variable

2.56%

January 2020

41,000

  Andaz Napa

 Variable

2.56%

March 2020

38,000

  Marriott Dallas City Center

 Variable

2.71%

May 2020

40,090

  Marriott Charleston Town Center

 Fixed

3.85%

July 2020

16,642

  Hyatt Regency Santa Clara

 Variable

2.46%

September 2020

60,200

  Grand Bohemian Hotel Charleston (JV)

 Variable

2.95%

November 2020

19,909

  Loews New Orleans Hotel

 Variable

2.81%

November 2020

37,500

  Grand Bohemian Hotel Mountain Brook (JV)

 Variable

2.96%

December 2020

26,250

  Hotel Monaco Chicago

 Variable

2.70%

January 2021

24,144

  Westin Galleria & Oaks Houston

 Variable

2.96%

May 2021

110,000

  Hotel Palomar Philadelphia

Fixed(3)

4.14%

January 2023

60,000

  Residence Inn Boston Cambridge

 Fixed

4.48%

November 2025

63,000

  Grand Bohemian Hotel Orlando

 Fixed

4.53%

March 2026

60,000

  Total Mortgage Loans

3.60%

(4)

$

973,986

  Mortgage Loan (Discounts)(5)

(535)

  Unamortized Deferred Financing Costs

(7,450)

Senior Unsecured Credit Facility

 Variable

2.25%

February 2020

Term Loan $175M

Fixed(6)

2.79%

February 2021

175,000

Term Loan $125M

Fixed(6)

3.63%

October 2022

125,000

Total Debt

3.49%

(4)

$

1,266,001

(1)     Variable index is one month LIBOR. 

(2)     Loan extension is at the discretion of Xenia. The majority of loans require minimum Debt Service Coverage Ratio and/or Loan to Value 

         maximums and payment of an extension fee. 

(3)     A variable interest loan for which LIBOR has been fixed for the entire term.

(4)     Weighted average interest rate as of June 30, 2016. 

(5)     Loan premiums/(discounts) on assumed mortgages recorded in purchase accounting.

(6)     A variable interest loan for which LIBOR has been fixed for the entire term.  The spread to LIBOR may vary, as it is determined by the 

         Company's leverage ratio.

 

 

 



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