Date of Report (Date of Earliest Event Reported): | June 6, 2016 |
Maryland | 001-34571 | 27-1055421 |
_____________________ (State or other jurisdiction | _____________ (Commission | ______________ (I.R.S. Employer |
of incorporation) | File Number) | Identification No.) |
7315 Wisconsin Avenue, 1100 West, Bethesda, Maryland | 20814 | |
________________________________ (Address of principal executive offices) | ___________ (Zip Code) |
Registrant’s telephone number, including area code: | (240) 507-1300 |
Exhibit No. | Description | |
99.1 | Press release, dated June 6, 2016, providing the Company's revised 2016 and second quarter 2016 outlook. |
PEBBLEBROOK HOTEL TRUST | ||||
June 8, 2016 | By: | /s/ Raymond D. Martz | ||
Name: | Raymond D. Martz | |||
Title: | Executive Vice President, Chief Financial Officer, Treasurer and Secretary |
Exhibit | ||
Number | Description | |
99.1 | Press release, dated June 6, 2016, providing the Company's revised 2016 and second quarter 2016 outlook. |
New 2016 Outlook | Variance to Old Outlook | |||||||||||||
As of June 6, 2016 | 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 | Variance to Old Outlook | |||||||||||||
As of June 6, 2016 | 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 | — | — |
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 | Year ended | |||||||||||||||
June 30, 2016 | 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 | Year ended | |||||||||||||||
June 30, 2016 | 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. | ||||||||||||||||