BETHESDA, Md.--(BUSINESS WIRE)--
Pebblebrook Hotel Trust (NYSE: PEB) (the “Company”) today announced that
it has revised its 2016 and second quarter 2016 outlook due to the
completed sales of Viceroy Miami, The Redbury Hotel and the land parcel
at Revere Hotel Boston Common. In addition, the revised outlook
incorporates the expected closing of the $125.0 million, 6.375% Series D
Preferred Shares offering, as well as second quarter-to-date hotel
operating performance. The Company’s revised outlook for 2016 is as
follows:
|
| |
| |
| | New 2016 Outlook
As of June 6, 2016 |
| Variance to Old Outlook
As of April 27, 2016 |
| | Low |
| High |
| Low |
| High |
| |
($ and shares/units in millions, except per share and RevPAR data)
|
Net income (loss) attributable to common shareholders
| | $95.6 |
| $112.6 | | $29.9 |
| $34.9 |
|
Net income (loss) per diluted share available to common shareholders
basic and diluted
| | $1.32 | | $1.55 | | $0.42 | | $0.48 |
| | | | | | | |
|
|
Adjusted EBITDA
| | $272.2 | | $284.2 | | ($3.8) | | ($3.8) |
|
Adjusted EBITDA growth rate
| |
4.9%
| |
9.5%
| | (1.4%) | | (1.5%) |
| | | | | | | |
|
|
Adjusted FFO
| | $189.0 | | $201.0 | | ($5.3) | | ($5.3) |
|
Adjusted FFO per diluted share
| | $2.60 | | $2.76 | | ($0.07) | | ($0.08) |
|
Adjusted FFO per diluted share growth rate
| |
4.0%
| |
10.4%
| | (2.8%) | | (3.2%) |
| | | | | | | |
|
This revised 2016 outlook is based, in part, on the following
estimates and assumptions:
|
| | | | | | | |
|
| U.S. GDP growth rate
| |
1.5%
| |
2.0%
| | - | | - |
| U.S. Hotel Industry RevPAR growth rate
| |
3.0%
| |
5.0%
| | - | | - |
|
Urban Markets RevPAR growth rate
| |
1.0%
| |
3.0%
| | - | | - |
| | | | | | | |
|
|
Same-Property RevPAR
| | $211 | | $215 | | - | | - |
|
Same-Property RevPAR growth rate
| |
2.0%
| |
4.0%
| | - | | - |
|
Same-Property Room Revenue growth rate
| |
2.7%
| |
4.7%
| | - | | - |
| | | | | | | |
|
|
Same-Property EBITDA
| | $296.4 | | $308.4 | | ($4.6) | | ($4.6) |
|
Same-Property EBITDA growth rate
| |
1.7%
| |
5.9%
| | (0.2%) | | (0.1%) |
|
Same-Property EBITDA Margin
| |
34.2%
| |
34.7%
| | 0.6% | | 0.6% |
|
Same-Property EBITDA Margin growth rate
| |
25 bps
| |
75 bps
| | - | | - |
| | | | | | | |
|
|
Corporate cash general and administrative expenses
| | $20.3 | | $20.3 | | - | | - |
|
Corporate non-cash general and administrative expenses
| | $8.4 | | $8.4 | | - | | - |
| | | | | | | |
|
|
Total capital investments related to renovations, capital
maintenance and return on investment projects
| | $100.0 | | $110.0 | | - | | - |
| | | | | | | |
|
|
Weighted-average fully diluted shares and units
| |
72.7
| |
72.7
| | - | | - |
| | | | | | | |
|
|
Estimated gain on sale of assets
| |
35.0
| |
40.0
| | 35.0 | | 40.0 |
| | | | | | | |
|
The Company’s revised outlook for the second quarter of 2016 is as
follows:
|
|
| |
| |
| | New Q2 2016 Outlook
As of June 6, 2016 |
| Variance to Old Outlook
As of April 27,
2016 |
| | Low |
| High |
| Low |
| High |
| |
($ and shares/units in millions, except per share and RevPAR data)
|
Same-Property RevPAR
| | $221 |
| $223 | | - |
| ($3.0) |
|
Same-Property RevPAR growth rate
| |
1.0%
| |
2.25%
| | - | | (1.25%) |
|
Same-Property Room Revenue growth rate
| |
1.6%
| |
2.8%
| | 0.1% | | (1.3%) |
| | | | | | | |
|
|
Same-Property EBITDA
| | $80.2 | | $82.7 | | ($1.3) | | ($2.3) |
|
Same-Property EBITDA growth rate
| |
(2.5%)
| |
0.5%
| | 0.1% | | (1.1%) |
|
Same-Property EBITDA Margin
| |
36.3%
| |
36.8%
| | 0.8% | | 0.8% |
|
Same-Property EBITDA Margin growth rate
| |
(50 bps)
| |
0 bps
| | - | | - |
| | | | | | | |
|
|
Adjusted EBITDA
| | $74.0 | | $76.5 | | ($0.5) | | ($1.5) |
|
Adjusted EBITDA growth rate
| |
0.0%
| |
3.4%
| | (0.7%) | | (2.0%) |
| | | | | | | |
|
|
Adjusted FFO
| | $52.7 | | $55.2 | | ($0.8) | | ($1.8) |
|
Adjusted FFO per diluted share
| | $0.72 | | $0.76 | | ($0.01) | | ($0.02) |
|
Adjusted FFO per diluted share growth rate
| |
0.0%
| |
5.6%
| | (2.8%) | | (2.7%) |
| | | | | | | |
|
|
Weighted-average fully diluted shares and units
| |
72.7
| |
72.7
| | - | | - |
| | | | | | | |
|
“We are very pleased with our recently announced property sales and
preferred equity offering, all of which have been incorporated into our
updated outlook,” said Jon Bortz, Chairman, President and Chief
Executive Officer of Pebblebrook Hotel Trust. “We are also updating our
second quarter outlook to reflect our quarter-to-date hotel operating
performance. Our same-property RevPAR growth for April was 1.5% and May
was approximately 4.0 to 4.5%. Our performance in May was slightly
weaker than our forecast and reflects the softer overall industry
results for May. Since we expect this weaker than expected performance
to continue in June, we are slightly reducing the high end of our second
quarter outlook.”
The Company’s outlook for 2016 and the second quarter of 2016 assumes no
additional acquisitions or dispositions beyond the hotels the Company
owned as of June 6, 2016 and reflects the Company’s 49 percent interest
in its six-hotel joint venture (the “Manhattan Collection”). As a result
of the sales of Viceroy Miami and The Redbury Hotel, Same-Property
numbers reflect the removal of those properties for the second quarter
and the remainder of the year. The Company’s outlook also incorporates
all of the expected disruption associated with the various renovations
and repositionings at our properties, including The Westin Colonnade,
Coral Gables, Union Station Hotel Nashville, Autograph Collection,
Revere Hotel Boston Common, the Tuscan Fisherman’s Wharf, a Best Western
Plus Hotel, Hotel Palomar Los Angeles Beverly Hills and Mondrian Los
Angeles, all of which already have or are expected to commence
renovations in 2016 or early 2017.
The Company’s estimates and assumptions, including the Company’s outlook
for second quarter 2016, 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 June 6, 2016, as if they had been owned by the Company for all of
2015 and 2016, except for Hotel Vintage Portland, which is not included
in the first quarter, Hotel Zeppelin San Francisco, which is not
included in the first and fourth quarters and Viceroy Miami and The
Redbury Hotel, both of which are not included in the second, 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.
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 35 hotels, including 29 wholly
owned hotels with a total of 7,235 guest rooms and a 49% joint venture
interest in six hotels with a total of 1,787 guest rooms. The Company
owns, or has an ownership interest in, hotels located in 11 states and
the District of Columbia, including: San Francisco, California; Los
Angeles, California (Beverly Hills, Santa Monica and West Hollywood);
Boston, Massachusetts; New York, New York; San Diego, California;
Portland, Oregon; Buckhead, Georgia; Naples, Florida; Seattle,
Washington; Coral Gables, Florida; Washington, DC; Philadelphia,
Pennsylvania; Columbia River Gorge, Washington; Nashville, Tennessee;
Bethesda, Maryland and Minneapolis, Minnesota. 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 and EBITDA Margin growth, and the Company’s
expenses, share count or other financial items; descriptions of the
Company’s plans or objectives for future operations, acquisitions or
services; forecasts of the Company’s future economic performance and its
share of future markets; forecasts of hotel industry performance;
reference to the expected closing of the Company's offering of Series D
Preferred Shares; 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, 2015.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 June 6, 2016.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
|
|
| Pebblebrook Hotel Trust |
| Reconciliation of Outlook of Net Income (Loss) to FFO and
Adjusted FFO |
| (in millions, except per share data) |
| (Unaudited) |
|
| |
| |
| |
| |
| | Three months ended
June 30, 2016 |
| Year ended
December 31, 2016 |
| | Low | | High | | Low | | High |
| | | | | | | |
|
|
Net income (loss)
| |
$
|
61
| | |
$
|
69
| | |
$
|
118
| | |
$
|
135
| |
|
Adjustments:
| | | | | | | | |
|
Depreciation and amortization (including joint venture)
| | |
30
| | | |
30
| | | |
118
| | | |
118
| |
|
Gain on sale of assets
| |
|
(35
|
)
| |
|
(40
|
)
| |
|
(35
|
)
| |
|
(40
|
)
|
| FFO | | $ | 56 |
| | $ | 59 |
| | $ | 201 |
| | $ | 213 |
|
|
Distribution to preferred shareholders
| | |
(4
|
)
| | |
(4
|
)
| | |
(22
|
)
| | |
(22
|
)
|
|
Issuance costs of redeemed preferred shares
| |
|
-
|
| |
|
-
|
| |
|
(4
|
)
| |
|
(4
|
)
|
| FFO available to common share and unit holders | | $ | 52 |
| | $ | 54 |
| | $ | 175 |
| | $ | 187 |
|
|
Non-cash ground rent
| | |
1
| | | |
1
| | | |
3
| | | |
3
| |
|
Issuance costs of redeemed preferred shares
| | |
-
| | | |
-
| | | |
4
| | | |
4
| |
|
Other
| |
|
0
|
| |
|
0
|
| |
|
7
|
| |
|
7
|
|
| Adjusted FFO available to common share and unit holders | | $ | 53 |
| | $ | 55 |
| | $ | 189 |
| | $ | 201 |
|
| | | | | | | |
|
| FFO per common share - diluted | |
$
|
0.71
| | |
$
|
0.75
| | |
$
|
2.41
| | |
$
|
2.57
| |
| Adjusted FFO per common share - diluted | |
$
|
0.72
| | |
$
|
0.76
| | |
$
|
2.60
| | |
$
|
2.76
| |
| | | | | | | |
|
|
Weighted-average number of fully diluted common shares and units
| | |
72.7
| | | |
72.7
| | | |
72.7
| | | |
72.7
| |
| | | | | | | | | | | | | | | |
|
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.
|
|
|
Funds from Operations (“FFO”) - FFO represents net income
(computed in accordance with GAAP), 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 these measures 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 and non-cash amortization of
acquired intangibles, 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 ended
June 30, 2016 |
| Year ended
December 31, 2016 |
| | Low |
| High |
| Low |
| High |
| | | | | | | |
|
|
Net income (loss)
| |
$
|
61
| | |
$
|
69
| | |
$
|
118
| | |
$
|
135
| |
|
Adjustments:
| | | | | | | | |
|
Interest expense and income tax expense (including joint venture)
| | |
17
| | | |
17
| | | |
62
| | | |
62
| |
|
Depreciation and amortization (including joint venture)
| |
|
30
|
| |
|
30
|
| |
|
118
|
| |
|
118
|
|
| EBITDA | | $ | 108 |
| | $ | 115 |
| | $ | 297 |
| | $ | 314 |
|
|
Gain on sale of assets
| | |
(35
|
)
| | |
(40
|
)
| | |
(35
|
)
| | |
(40
|
)
|
|
Non-cash ground rent
| | |
1
| | | |
1
| | | |
3
| | | |
3
| |
|
Other
| |
|
0
|
| |
|
0
|
| |
|
7
|
| |
|
7
|
|
| Adjusted EBITDA | | $ | 74 |
| | $ | 76 |
| | $ | 272 |
| | $ | 284 |
|
| | | | | | | | | | | | | | | |
|
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:
|
|
|
- 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 and non-cash amortization of acquired
intangibles, 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.
|
|
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20160606006525/en/
Pebblebrook Hotel Trust
Raymond D. Martz, Chief Financial Officer
240-507-1330
Source: Pebblebrook Hotel Trust