EX-99.1 2 d925557dex991.htm PRESS RELEASE Press Release

Exhibit 99.1

 

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FOR IMMEDIATE RELEASE

DATE: May 14, 2015

XENIA HOTELS & RESORTS REPORTS FIRST QUARTER 2015 RESULTS

Orlando, FL – May 14, 2015 – Xenia Hotels & Resorts, Inc. (NYSE: XHR) (“Xenia” or the “Company”) today announced results for the three months ended March 31, 2015. The Company’s results include the following:

 

     For the three months ended
March 31,
 
     2015     2014     Change  
     ($ in millions except per share share/unit data)  

Same-Property Number of Hotels

     46        46     

Same-Property Occupancy

     73.9     75.6     (2.3 %) 

Same-Property Average Daily Rate(1)

   $ 182.16      $ 173.39        5.1

Same-Property RevPAR(1)

   $ 134.59      $ 131.13        2.6

Same-Property Hotel EBITDA(2)

   $ 69,881      $ 65,033        7.5

Same-Property Hotel EBITDA Margin(2)

     30.7     29.6     112  bps 

Adjusted EBITDA(2)

   $ 64,727      $ 56,155        15.3

Adjusted FFO(2)

   $ 50,787      $ 41,052        23.7

Adjusted FFO per diluted share(2)

   $ 0.45      $ 0.36        24.2

Net (loss) income to common shareholders(3)

   $ (14,866   $ 2,319        (741.1 %) 

Net (loss) income to common shareholders per diluted share(3)

   $ (0.13   $ 0.02        (743.5 %) 

 

(1) Three months ended March 31, 2014 is unadjusted for changes resulting from the adoption of the 11th edition of the Uniform System of Accounts for the Lodging Industry (“USALI”).
(2) See tables later in this press release for reconciliations from net income (loss) to Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”), Adjusted EBITDA, Funds From Operations (“FFO”), Adjusted FFO, and Adjusted FFO per share/unit. EBITDA, Adjusted EBITDA, FFO, Adjusted FFO per share/unit and hotel EBITDA are non-GAAP financial measures.
(3) Includes $25.3 million of one-time general and administrative expenses. See accompanying notes to the combined consolidated financial statements in the Company’s Form 10Q for more detail.

“Same-Property” results include the results for all hotels owned as of March 31, 2015, except for the two hotels under development, include periods prior to the Company’s ownership of the Aston Waikiki Beach Resort, and exclude the results of operations of the Crowne Plaza Charleston, Doubletree Suites Atlanta Galleria, and Holiday Inn Secaucus, all of which were disposed of in 2014. Results also include renovation and remediation disruption, and exclude the NOI guaranty payment at one hotel.

The Company’s historical financial statements have been “carved out” of InvenTrust Properties Corp.’s (“InvenTrust”) financial statements and reflect significant assumptions and allocations from those financial statements, such as allocations of corporate debt, shared services functions, employee-related costs and other corporate overhead. Based on these presentation matters, these financial statements may not be comparable to prior periods.

 

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First Quarter 2015 Highlights

 

    Separation from InvenTrust: The Company successfully completed the spin-off from its former parent InvenTrust (formerly Inland American Real Estate Trust, Inc.) on February 3.

 

    Listing of Shares on the NYSE: The Company began trading on the New York Stock Exchange under the symbol “XHR” on February 4 and rang The Opening Bell to celebrate the first day of trading.

 

    Completion of Tender Offer: The Company completed its “Dutch Auction” self-tender offer on March 5 and accepted for purchase 1.8 million shares at $21.00 per share for a total purchase price of $36.9 million.

 

    Same-Property RevPAR: Same-Property RevPAR increased 2.6% from the first quarter in 2014 to $134.59, reflecting a 5.1% increase in ADR partially offset by a 2.3% decrease in occupancy. The Company estimates USALI reclassifications negatively impacted RevPAR growth by a minimum of 100 bps. The Company also estimates that RevPAR growth was negatively impacted by approximately 300 bps year-over-year due to the renovation disruption at three of its largest hotels.

 

    Same-Property Hotel EBITDA Margin: Same-property hotel EBITDA margin was 30.7%, an increase of 112 basis points from the same period in 2014.

 

    Adjusted EBITDA: Adjusted EBITDA was $64.7 million.

 

    Adjusted FFO: Adjusted FFO available to common stockholders per diluted share was $0.45.

 

    Dividends: The Company declared a pro rata quarterly dividend of $0.1457 per share on March 13, which represents an anticipated regular quarterly dividend of $0.23 per share prorated for the period from completion of separation from InvenTrust and the last day of the first quarter. The dividend was paid on April 15, 2015.

 

    Capital Investments: The Company invested $16.4 million in its hotels and completed two significant capital projects. The Hyatt Regency Santa Clara and the Aston Waikiki Beach Resort projects were completed during the quarter and, among other projects, the Company also created three new rooms at the Hyatt Regency Orange County. The Marriott San Francisco Airport Waterfront renovation progressed significantly, with full completion, including the addition of three guest rooms, anticipated in the second quarter of 2015.

“We are pleased with our first quarter results, and more specifically with our ADR growth of 5.1% and strong-flow through at the hotel level.” said Marcel Verbaas, President and Chief Executive Officer of Xenia Hotels & Resorts. “Our strong year-over-year ADR growth helped offset a slight decrease in occupancy due to several significant capital investment projects ongoing throughout the quarter. We are optimistic as we look forward to the remainder of 2015 and are confident in our ability to take advantage of continued positive lodging industry dynamics.”

During the first quarter, the Company had total general and administrative expenses of $7.0 million, which includes $1.7 million of amortization of share-based compensation for management and the board of directors. In addition, the Company had $25.3 million of one-time expenses associated with the separation from InvenTrust, listing on the NYSE, completion of the Dutch tender offer and other start-up costs incurred while transitioning to an independent, publicly-traded company.

 

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Also during the first quarter, the Company recorded business interruption insurance proceeds of $3.7 million related to the estimated losses at the Andaz Napa, which was impacted by the August 2014 earthquake in Northern California. The Company anticipates receiving approximately $5.0 to $6.0 million of business interruption insurance proceeds for losses suffered in 2014. The Company has spent approximately $7.3 million through the end of the first quarter to remediate the damage at the two hotels, all of which is expected to be reimbursed through property insurance proceeds.

Hotels Under Development

The Grand Bohemian Charleston, a 50-room Autograph Collection hotel located in Charleston, South Carolina in which Xenia owns a 75% interest, is expected to open in the third quarter of 2015. Total costs to develop the hotel are estimated to be approximately $30 million, of which $23.9 million has been incurred to date.

The Grand Bohemian Mountain Brook, a 100-room Autograph Collection hotel located in an upscale suburb of Birmingham, Alabama in which Xenia owns a 75% interest, is expected to open in the fourth quarter of 2015. Total costs to develop the hotel are estimated to be approximately $43 million, of which $27.3 million has been incurred to date.

Capital Investments

The Company invested $16.4 million of capital in its hotels during the first quarter 2015 (excluding expenditures to remediate the Napa earthquake damage) and completed two significant capital projects. The Hyatt Regency Santa Clara completed a $7.6 million guest room renovation and the Aston Waikiki Beach Resort completed a $2.3 million pool deck renovation, both of which were started in the fourth quarter of 2014. The $18.3 million Marriott San Francisco Airport Waterfront renovation has also been underway since the fourth quarter of 2014, and significant progress has been made on its guest room renovation and bathroom conversion project, with full completion and the addition of three guest rooms anticipated in the second quarter of 2015. Additionally during the quarter, the Company created three new rooms at the Hyatt Regency Orange County as a result of conversion of a former general manager’s apartment.

Balance Sheet

As of March 31, 2015, the Company had total outstanding debt of $1.2 billion, with no outstanding borrowings on its $400 million senior unsecured credit facility and a weighted average interest rate of 4.01%. Total net debt to trailing 12 month pro forma Corporate EBITDA (as defined in the Company’s senior unsecured credit facility) was 3.7x as of March 31, 2015. As of March 31, 2015, the Company had $238.1 million of cash and cash equivalents.

 

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2015 Outlook and Guidance

The Company’s outlook for 2015 is based on the current economic environment, incorporates all expected renovation disruption, assumes no acquisitions or dispositions, and includes the completion of its two development properties, both of which are anticipated in the second half of the year. The Company’s 2015 capital expenditure range includes the renovation projects during the quarter, but excludes earthquake damage remediation at the Andaz Napa. The Company’s financial expectations for 2015 are as follows:

 

     Low End     High End  
     ($ in millions)  

RevPAR growth

     5.0     7.0

Adjusted EBITDA

   $ 275.0      $ 295.0   

Adjusted FFO

   $ 212.0      $ 232.0   

Capital Expenditures

   $ 50.0      $ 60.0   

First Quarter 2015 Earnings Call

The Company will conduct its quarterly conference call on Thursday, May 14, 2015 at 11:00 AM eastern time. To participate in the conference call, please dial (888) 317-6016. Additionally, a live webcast of the conference call will be available through the Company’s website, www.xeniareit.com. A replay of the conference call will be archived and available online through the Investor Relations section of the company’s website for 90 days.

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. As of March 31, 2015 we owned 46 hotels, comprising 12,639 rooms, across 19 states and the District of Columbia, and had a majority interest in two hotels under development. Our hotels are primarily operated by industry leaders such as Marriott®, Hilton®, Hyatt®, Starwood®, Kimpton®, Aston®, Fairmont® and Loews®, as well as leading independent management companies, under various nationally recognized brands. For more information on our business, refer to the company website at www.xeniareit.com.

This press release, together with other statements and information publicly disseminated by the Company, contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The Company intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and includes this statement for purposes of complying with these safe harbor provisions. Forward-looking statements are not historical facts but are based on certain assumptions of management and describe the Company’s future plans, strategies and expectations. Forward-looking statements are generally identifiable by use of words such as “may,” “could,” “expect,” “intend,” “plan,” “seek,” “anticipate,” “believe,” “estimate,” “guidance,” “predict,” “potential,” “continue,” “likely,” “will,” “would,” “illustrative” and variations of these terms and similar expressions, or the negative of these terms or similar expressions. Forward-looking statements in this press release include, among others, statements about our plans, strategies, the outlook for RevPAR, adjusted FFO, adjusted EBITDA and derivations thereof, financial performance, prospects or future events. Such forward-looking

 

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statements are necessarily based upon estimates and assumptions that, while considered reasonable by us and our management, are inherently uncertain. As a result, our actual results, performance or achievements may differ materially from those expressed or implied by these forward-looking statements, which are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors that are, in some cases, beyond the Company’s control and which could materially affect actual results, performances or achievements. Factors that may cause actual results to differ materially from current expectations include, but are not limited to, (i) the Company’s dependence on third-party managers of its hotels, including its inability to implement strategic business decisions directly, (ii) risks associated with the hotel industry, including competition, increases in wages, energy costs and other operating costs, actual or threatened terrorist attacks, downturns in general and local economic conditions and cancellation of or delays in the completion of anticipated demand generators, (iii) the availability and terms of financing and capital and the general volatility of securities markets, (iv) risks associated with the real estate industry, including environmental contamination and costs of complying with the Americans with Disabilities Act and similar laws, (v) interest rate increases, (vi) the possible failure of the Company to qualify as a REIT and the risk of changes in laws affecting REITs, (vii) the possibility of uninsured losses, (viii) risks associated with redevelopment and repositioning projects, including delays and cost overruns and (ix) the risk factors discussed in the Company’s Annual Report on Form 10-K as updated in its Quarterly Reports. Accordingly, there is no assurance that the Company’s expectations will be realized. We caution you not to place undue reliance on any forward-looking statements, which are made only as of the date of this press release. We do not undertake or assume any obligation to update publicly any of these forward-looking statements to reflect actual results, new information or future events, changes in assumptions or changes in other factors affecting forward-looking statements, except to the extent required by applicable law. If we update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements.

Contact:

Lisa Ramey, Vice President Finance, Xenia Hotels & Resorts, (407) 317-6950

For additional information or to receive press releases via email, please visit our website at

www.xeniareit.com

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Xenia Hotels & Resorts, Inc.

Combined Condensed Consolidated Balance Sheets

As of March 31, 2015 and December 31, 2014

($ amounts in thousands, except per share data)

 

     March 31, 2015     December 31, 2014  
     (unaudited)        

Assets

    

Investment properties:

    

Land

   $ 337,093      $ 338,313   

Building and other improvements

     2,727,741        2,710,647   

Construction in progress

     50,840        39,736   
  

 

 

   

 

 

 

Total

$ 3,115,674    $ 3,088,696   

Less: accumulated depreciation

  (541,245   (505,986
  

 

 

   

 

 

 

Net investment properties

$ 2,574,429    $ 2,582,710   

Cash and cash equivalents

  238,132      163,053   

Restricted cash and escrows

  82,944      87,296   

Accounts and rents receivable, net of allowance of $285 and $251, respectively

  35,032      26,504   

Intangible assets, net of accumulated amortization of $14,567 and $15,143, respectively

  63,303      64,541   

Deferred tax asset

  443      2,393   

Other assets

  36,124      29,254   
  

 

 

   

 

 

 

Total assets (including $52,097 and $41,054, respectively, related to consolidated variable interest entities)

$ 3,030,407    $ 2,955,751   
  

 

 

   

 

 

 

Liabilities

Debt

$ 1,178,213    $ 1,295,048   

Accounts payable and accrued expenses

  80,036      88,356   

Distributions payable

  16,270      —     

Other liabilities

  53,749      51,426   
  

 

 

   

 

 

 

Total liabilities (including $35,309 and $27,679, respectively, related to consolidated variable interest entities)

$ 1,328,268    $ 1,434,830   

Commitments and contingencies

Stockholders’ Equity

Preferred stock, $0.01 par value, 50,000,000 shares authorized, 125 shares issued and outstanding as of March 31, 2015 and 0 shares authorized, issued or outstanding as of December 31, 2014

$ —      $ —     

Common stock, $0.01 par value, 500,000,000 shares authorized, 111,664,641 issued and outstanding as of March 31, 2015 and 100,000 shares authorized, 1,000 issued and outstanding as of December 31, 2014

  1,117      —     

Additional paid in capital

  1,992,080      1,781,427   

Distributions in excess of retained earnings

  (295,297   (264,161
  

 

 

   

 

 

 

Total Company stockholders’ equity

$ 1,697,900    $ 1,517,266   
  

 

 

   

 

 

 

Non-controlling interests

  4,239      3,655   
  

 

 

   

 

 

 

Total equity

$ 1,702,139    $ 1,520,921   
  

 

 

   

 

 

 

Total liabilities and equity

$ 3,030,407    $ 2,955,751   
  

 

 

   

 

 

 

See accompanying notes to the combined condensed consolidated financial statements in the Company’s Form 10-Q

 

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Xenia Hotels & Resorts, Inc.

Combined Condensed Consolidated Statements of Operations

For the three months ended March 31, 2015 and 2014

($ amounts in thousands, except per share data, and unaudited)

 

     For the three months ended  
     March 31, 2015     March 31, 2014  

Revenues:

    

Room revenues

   $ 153,090      $ 146,482   

Food and beverage revenues

     62,253        57,612   

Other revenues

     12,531        14,431   
  

 

 

   

 

 

 

Total revenues

$ 227,874    $ 218,525   
  

 

 

   

 

 

 

Expenses:

Room expenses

  35,187      33,144   

Food and beverage expenses

  40,187      39,117   

Other direct expenses

  4,265      8,158   

Other indirect expenses

  53,258      50,312   

Management and franchise fees

  11,451      12,306   
  

 

 

   

 

 

 

Total hotel operating expenses

  144,348      143,037   

Depreciation and amortization

  36,387      33,884   

Real estate taxes, personal property taxes and insurance

  12,193      10,818   

Ground lease expense

  1,275      1,054   

General and administrative expenses

  7,045      5,459   

Business management fees

  —        1,474   

Acquisition transaction costs

  29      1,120   

Provision for asset impairment

  —        2,998   

Separation and other start-up related expenses

  25,296      —     
  

 

 

   

 

 

 

Total expenses

$ 226,573    $ 199,844   
  

 

 

   

 

 

 

Operating income

$ 1,301    $ 18,681   
  

 

 

   

 

 

 

Other income

  2,582      125   

Interest expense

  (13,181   (14,448

Equity in losses and gain on consolidation of unconsolidated entity, net

  —        4,248   
  

 

 

   

 

 

 

(Loss) income before income taxes

$ (9,298 $ 8,606   
  

 

 

   

 

 

 

Income tax expense

  (5,079   (1,919
  

 

 

   

 

 

 

Net (loss) income from continuing operations

$ (14,377 $ 6,687   
  

 

 

   

 

 

 

Net (loss) from discontinued operations

  (489   (4,368
  

 

 

   

 

 

 

Net (loss) income

$ (14,866 $ 2,319   
  

 

 

   

 

 

 

Net (loss) income per share available to common stockholders, basic and diluted

$ (0.13 $ 0.02   
  

 

 

   

 

 

 

Weighted average number of common shares basic and diluted

  112,964,557      113,397,997   
  

 

 

   

 

 

 

See accompanying notes to the combined condensed consolidated financial statements in the Company’s Form 10-Q

 

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Non-GAAP Financial Measures

The Company considers the following non-GAAP financial measures useful to investors as key supplemental measures of operating performance: EBITDA, Adjusted EBITDA, FFO and Adjusted FFO. 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 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.

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 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.

 

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Xenia Hotels & Resorts, Inc.

Reconciliation of Net Income (Loss) to EBITDA and Adjusted EBITDA

For the three months ended March 31, 2015 and 2014

($ amounts in thousands, except per share data, and unaudited)

 

     For the three months ended
March 31,
 
     2015     2014  

Net (loss) income

   $ (14,866   $ 2,319   

Adjustments:

    

Interest expense

     13,181        14,448   

Interest expense from unconsolidated entity

     —          34   

Interest expense from discontinued operations

     —          7,808   

Income tax expense

     5,079        1,919   

Depreciation and amortization related to investment properties

     36,387        33,884   

Depreciation and amortization related to investment in unconsolidated entity

     —          102   

Depreciation and amortization of discontinued operations

     —          12,602   
  

 

 

   

 

 

 

EBITDA

$ 39,781    $ 73,116   

Reconciliation to Adjusted EBITDA

Impairment of investment properties

  —        2,998   

Loss on extinguishment of debt

  105      —     

Gain on consolidation of investment in unconsolidated entity

  —        (4,481

Acquisition and pursuit costs

  29      1,120   

Amortization of share-based compensation expense

  1,674      —     

Gain from excess property insurance recovery

  (276   —     

Business interruption proceeds net of hotel related expenses (1)

  (2,324   —     

EBITDA adjustment for three hotels sold in 2014 (2)

  (47   (555

EBITDA adjustment for Suburban Select Service Portfolio (3)

  489      (16,043

Other non-recurring expenses (4)

  25,296      —     
  

 

 

   

 

 

 

Adjusted EBITDA

$ 64,727    $ 56,155   
  

 

 

   

 

 

 

 

(1) The business interruption insurance recovery for the three months ended March 31, 2015 was $3.7 million, which is net of hotel $1.4 million related expenses, attributable to the two hotels impacted by the August 2014 Napa Earthquake.
(2) The following three hotels were disposed of in 2014: Crowne Plaza Charleston, Doubletree Suites Atlanta Galleria, and Holiday Inn Secaucus.
(3) On November 17, 2014, InvenTrust sold the Suburban Select Service Portfolio for an aggregate gross disposition price of $1.1 billion. Prior to the sale transaction, the Company oversaw the Suburban Select Service Portfolio. This sale reflected a strategic shift and had a major impact on our consolidated financial statements; therefore the operations of these 52 hotels are reflected as discontinued operations on the combined condensed consolidated statements of operations for the three months ended March 31, 2015 and 2014.
(4) For the three months ended March 31, 2015, other non-recurring expenses include one-time costs related to the listing of our common stock on the NYSE, such as legal, audit fees and other professional fees, costs related to the Tender Offer described in Note 10 in the combined condensed consolidated financial statements as of March 31, 2015 and 2014, and other start-up costs incurred while transitioning to a stand-alone, publicly-traded company.

 

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Xenia Hotels & Resorts, Inc.

Reconciliation of Net Income (Loss) to FFO and Adjusted FFO

For the three months ended March 31, 2015 and 2014

($ amounts in thousands, except per share data, and unaudited)

 

     For the three months ended
March 31,
 
     2015     2014  

Net (loss) income

   $ (14,866   $ 2,319   

Adjustments:

    

Depreciation and amortization related to investment properties

     36,387        33,884   

Depreciation and amortization related to investment in unconsolidated entity

     —          102   

Depreciation and amortization of discontinued operations

     —          12,602   

Impairment of investment property

     —          2,998   

Gain on consolidation of investment in unconsolidated entity

   $ —        $ (4,481
  

 

 

   

 

 

 

FFO

$ 21,521    $ 47,424   

Reconciliation to Adjusted FFO

Loss on extinguishment of debt

$ 105    $ —     

Acquisition and pursuit costs

  29      1,120   

Loan related costs (1)

  1,169      1,150   

Amortization of share-based compensation expense

  1,674      —     

Income tax related to restructuring (2)

  2,875      —     

Business interruption proceeds net of hotel related expenses (3)

  (2,324   —     

Less FFO adjustment for three hotels sold in 2014 (4)

  (47   (407

Less FFO adjustment for Suburban Select Service Portfolio (5)

  489      (8,235

Other non-recurring expenses (6)

  25,296      —     
  

 

 

   

 

 

 

Adjusted FFO

$ 50,787    $ 41,052   
  

 

 

   

 

 

 

 

(1) Loan related costs included amortization of debt discounts, premiums and deferred loan origination costs.
(2) For the three months ended March 31, 2015, the Company recognized income tax expense of $5.1 million, of which $2.9 million 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.
(3) The business interruption insurance recovery for the three months ended March 31, 2015 was $3.7 million, which was net of $1.4 million hotel related expenses, attributable to the two hotels impacted by the August 2014 Napa Earthquake.
(4) The following three hotels were disposed of in 2014: Crowne Plaza Charleston, Doubletree Suites Atlanta Galleria, and Holiday Inn Secaucus.
(5) On November 17, 2014, InvenTrust sold the Suburban Select Service Portfolio for an aggregate gross disposition price of $1.1 billion. Prior to the sale transaction, the Company oversaw the Suburban Select Service Portfolio. This sale reflected a strategic shift and had a major impact on our consolidated financial statements; therefore the operations of these 52 hotels are reflected as discontinued operations on the combined condensed consolidated statements of operations for the three months ended March 31, 2015 and 2014.
(6) For the three months ended March 31, 2015, other non-recurring expenses include one-time costs related to the listing of our common stock on the NYSE, such as legal, audit fees and other professional fees, costs related to the Tender Offer described in Note 10 in the combined condensed consolidated financial statements as of March 31, 2015 and 2014, and other start-up costs incurred while transitioning to a stand-alone, publicly-traded company.

 

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11

 

Xenia Hotels & Resorts, Inc.

Debt Summary as of March 31, 2015

($ in thousands)

 

     Rate Type (a)    Rate     Fully Extended
Maturity Date (b)
     Outstanding as of
March 31, 2015
 

Mortgage Loans

          

Hilton Garden Inn Washington DC Downtown

   Fixed      5.45     October 2015       $ 55,500   

Hilton Garden Inn Chicago North Shore/Evanston

   Fixed      5.94     June 2016         18,699  

Grand Bohemian Hotel Orlando

   Fixed      5.82     October 2016         50,059   

Marriott Woodlands Waterway Hotel & Convention Center

   Fixed      4.50     December 2016         73,695   

Renaissance Atlanta Waverly Hotel & Convention Center

   Fixed      5.50     December 2016         97,000   

Renaissance Austin Hotel

   Fixed      5.51     December 2016         83,000   

Hyatt Regency Orange County

   Fixed      5.25     January 2017         62,693  

Residence Inn Boston Cambridge

   Fixed      5.50     February 2017         30,591   

Courtyard Pittsburgh Downtown

   Fixed      4.00     March 2017         23,097  

Hampton Inn & Suites Denver Downtown

   Fixed      5.25     March 2017         13,552   

Marriott Griffin Gate Resort & Spa

   Variable      2.68     March 2017         34,920  

Marriott San Francisco Airport Waterfront

   Fixed      5.40     April 2017         53,449   

Courtyard Birmingham Downtown at UAB

   Fixed      5.25     April 2017         13,577  

Hilton University of Florida Conference Center Gainesville

   Fixed      6.46     February 2018         27,775  

Residence Inn Denver City Center

   Variable      2.43     April 2018         45,210   

Bohemian Hotel Savannah Riverfront

   Variable      2.53     December 2018         27,480   

Fairmont Dallas

   Variable      2.18     April 2019         56,727  

Andaz Savannah

   Variable      2.18     January 2020         21,500  

Hotel Monaco Denver

   Variable      2.28     January 2020         41,000   

Andaz Napa

   Variable      2.28     March 2020         30,500  

Marriott Dallas City Center

   Variable      2.43     May 2020         40,090  

Marriott Charleston Town Center

   Fixed      3.85     July 2020         17,108  

Hyatt Regency Santa Clara

   Variable      2.18     September 2020         60,200  

Grand Bohemian Charleston - Kessler JV(c)

   Variable      2.68     November 2020         14,203  

Loews New Orleans Hotel

   Variable      2.53     November 2020         37,500   

Grand Bohemian Mountain Brook - Kessler JV(d)

   Variable      2.68     December 2020         14,477  

Hotel Monaco Chicago

   Variable      2.43     January 2021         26,000  

Westin Galleria & Oaks Houston

   Variable      3.33     May 2021         110,000   
     

 

 

      

 

 

 

Total Mortgage Loans

  4.01 % (f)  $ 1,179,602   

Mortgage Loan Premium / (Discounts)(e)

  (1,389

Line of Credit

  —     
          

 

 

 

Total Debt

$ 1,178,213  
          

 

 

 

 

(a) Floating index is one month LIBOR. The Company does not have any hedging instruments in place.
(b) 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 extension fee.
(c) The project construction loan has a total available balance of $20.0 million.
(d) The project construction loan has a total available balance of $26.3 million.
(e) Loan premiums/(discounts) on assumed mortgages recorded in purchase accounting.
(f) Weighted average interest rate.

 

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12

 

Xenia Hotels & Resorts, Inc.

Same-Property(1) Hotel EBITDA and Hotel EBITDA Margin

($ in thousands and unaudited)

 

     For the three months ended
March 31,
 
     2015     2014     Change  

Revenues:

      

Room revenues

   $ 153,090      $ 149,125        2.7 %

Food and beverage revenues

     62,253       56,951       9.3 %

Other revenues

     12,398       13,887       (10.7 %) 
  

 

 

   

 

 

   

 

 

 

Total revenues

$ 227,741    $ 219,963      3.5 %

Expenses:

Room expenses

$ 35,188    $ 33,938      3.7 %

Food and beverage expenses

  40,185     38,479     4.4 %

Other direct expenses

  4,265     8,284     (48.5 %) 

Other indirect expenses

  53,301     50,040      6.5

Management and franchise fees

  11,452     12,197     (6.1 %)

Real estate taxes, personal property taxes and insurance

  12,194     10,770     13.2

Ground lease expense

  1,275     1,222     4.3 %
  

 

 

   

 

 

   

 

 

 

Total hotel operating expenses

$ 157,860    $ 154,930      1.9 %
  

 

 

   

 

 

   

 

 

 

Hotel EBITDA

$ 69,881    $ 65,033      7.5
  

 

 

   

 

 

   

 

 

 

Hotel EBITDA Margin

  30.7   29.6   112  bps 

 

(1) “Same-Property” results include the results for all hotels owned as of March 31, 2015, except for the two hotels under development, include periods prior to the Company’s ownership of the Aston Waikiki Beach Resort, and exclude the results of operations of the Crowne Plaza Charleston, Doubletree Suites Atlanta Galleria, and Holiday Inn Secaucus, all of which were disposed of in 2014. Results also include renovation and remediation disruption, and exclude the NOI guaranty payment at one hotel.

 

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13

 

Xenia Hotels & Resorts, Inc.

Same-Property(1) Hotel Statistical Data by Geography

(unaudited)

 

     As of March 31, 2015  
     Number of      Number of  
     Hotels      Rooms  

Region

     

South Atlantic

     

(Incl. Georgia, Florida, Maryland, Virginia, West Virginia, and Washington, D.C.)

     15        3,269  

West South Central

     

(Incl. Louisiana and Texas)

     9        3,339  

Pacific

     

(Incl. California and Hawaii)

     7        3,062  

Mountain

     

(Incl. Arizona, Colorado, and Utah)

     5        1,016  

Other

     

(Incl. Alabama, Kentucky, Illinois, Iowa, Massachusetts, Missouri, and Pennsylvania)

     10        1,953  
  

 

 

    

 

 

 

Total

  46      12,639  

 

     For the three months ended March 31,  
     2015      2014      % Change  
     Occupancy     ADR      RevPAR      Occupancy     ADR      RevPAR      RevPAR  

Region

                  

South Atlantic

     77.4   $ 179.70       $ 139.17         77.4   $ 171.25       $ 132.47         5.1 %

West South Central

     75.4   $ 194.69       $ 146.79         76.7   $ 186.83       $ 143.38         2.4 %

Pacific

     71.4   $ 191.65       $ 136.77         79.4   $ 180.94       $ 143.70         (4.8 %) 

Mountain

     80.7   $ 178.33       $ 143.95         80.9   $ 164.60       $ 133.19         8.1 %

Other

     65.7   $ 148.77       $ 97.81         62.1   $ 140.34       $ 87.18         12.2 %
  

 

 

   

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

Total

  73.9 $ 182.16    $ 134.59      75.6 $ 173.39    $ 131.13      2.6 %

 

(1) “Same-Property” results include the results for all hotels owned as of March 31, 2015, except for the two hotels under development, include periods prior to the Company’s ownership of the Aston Waikiki Beach Resort, and exclude the results of operations of the Crowne Plaza Charleston, Doubletree Suites Atlanta Galleria, and Holiday Inn Secaucus, all of which were disposed of in 2014. Results also include renovation and remediation disruption, and exclude the NOI guaranty payment at one hotel.

 

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