Market Overview

Chatham Lodging Trust Announces Second Quarter 2018 Results

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Delivers FFO at Upper End of Guidance Range

Chatham Lodging Trust (NYSE:CLDT), a lodging real estate investment
trust (REIT) that invests in upscale, extended-stay hotels and
premium-branded, select-service hotels and owns 135 hotels wholly or
through joint ventures, today announced results for the second quarter
ended June 30, 2018. The company also provided updated guidance for 2018.

Second Quarter 2018 Key Metrics

  • Portfolio Revenue per Available Room (RevPAR) - Increased 0.8
    percent to $143, compared to the 2017 second quarter, for Chatham's
    40, wholly owned hotels. Average daily rate (ADR) improved 0.6 percent
    to $172, and occupancy also rose 0.2 percent to 83 percent.
  • Net Income - Improved $8.4 million to $13.5 million. Net income
    per diluted share was $0.29 versus $0.13 in the 2017 second quarter.
  • Adjusted EBITDA - Advanced $2.5 million to $37.6 million, at
    the upper end of its guidance.
  • Adjusted FFO - Rose $2.2 million, to $27.4 million, versus
    $25.2 million in the 2017 second quarter. Adjusted FFO per diluted
    share was $0.59, above consensus and compared to guidance of
    $0.56-$0.59 per share.
  • Operating Margins - Gross operating profit margins declined 50
    basis points to 48.9 percent. Hotel EBITDA margins were off 70 basis
    points to 41.5 percent, within its range of guidance.
  • Balance Sheet - Continued to de-lever, paying down $2.8 million
    of net debt in the quarter and reducing leverage to 33 percent.

Consolidated Financial Results

The following is a summary of the consolidated financial results for the
three and six months ended June 30, 2018. RevPAR, ADR and occupancy for
2018 and 2017 are based on hotels owned as of June 30, 2018 ($ in
millions, except per share, RevPAR, ADR, occupancy and margins):

        Three Months Ended       Six Months Ended
June 30, June 30,
2018   2017 2018   2017
Net income $13.5 $5.1 $16.4 $9.7
Diluted net income per common share $0.29 $0.13 $0.35 $0.25
RevPAR $143 $142 $133 $134
ADR $172 $171 $167 $167
Occupancy 83% 83% 79% 80%
Adjusted EBITDA $37.6 $35.1 $64.0 $63.2
GOP Margin 48.9% 49.4% 46.8% 48.3%
Hotel EBITDA Margin 41.5% 42.2% 39.1% 41.1%
AFFO $27.4 $25.2 $43.9 $43.3
AFFO per diluted share $0.59 $0.65 $0.95 $1.11
Dividends per share $0.33 $0.33 $0.66 $0.66
 

Operating Results

"Our second quarter results finished at the upper end of our FFO per
share guidance expectations, driven by a combination of RevPAR growth
above the midpoint of our guidance and strong performance by our joint
venture portfolios," said Jeffrey H. Fisher, Chatham's president and
chief executive officer. "In the 2018 second quarter, RevPAR at our
joint venture hotels improved 3.3 percent, benefitting from the
significant capital invested into the Inland portfolio in 2016 and 2017.
Within the Chatham portfolio, as I mentioned last quarter, we're seeing
some improving market conditions across the portfolio, especially in
markets that have absorbed most of the competitive new supply. In fact,
approximately one-third of our hotels saw RevPAR rise more than 5
percent, and approximately one-half of our portfolio saw RevPAR rise
more than 3 percent."

Second quarter RevPAR performance for certain of Chatham's key markets:

  • Florida hotels saw RevPAR advanced 10.2 percent.
  • Silicon Valley RevPAR rose 0.5 percent to $190.
  • RevPAR jumped 9.6 percent at its four Houston hotels.
  • Two Los Angeles-area hotels experienced a RevPAR increase of 3.5
    percent.
  • RevPAR at the company's three Washington D.C. hotels increased 3.6
    percent.

"Markets for us where RevPAR grew more than 5 percent during the quarter
were Marina Del Rey and downtown San Diego, Calif.; downtown Washington
D.C.; Farmington, Conn.; Maitland, Fla.; Holtsville, New Rochelle and
White Plains, NY.; Washington, Pa.; and, finally, San Antonio, Texas,"
Fisher commented. "RevPAR growth remains strong thus far in the third
quarter, with July RevPAR up approximately 3 percent. However, I should
remind everyone that we will face tough comps in September as we will be
comparing to strong results in Houston and Florida due to hurricane
related business in 2017."

Gross operating profit margins were down 50 basis points compared to the
2017 second quarter. The primary reason for the margin decline was
attributable to payroll and benefit costs that increased 3.5 percent and
reduced margins by 30 basis points. Small increases in repair and
maintenance costs were offset by reduced utilities costs and travel
agency commissions.

"With modest RevPAR growth, as well as the pressure from rising labor
costs adversely impacting margins, it is notable that we were able to
minimize margin erosion by only 50 basis points," stated Dennis Craven,
Chatham's chief operating officer. "Our ability to work with Island
Hospitality to enhance room revenue, implement other revenue initiatives
and aggressively monitor other controllable costs was vital to our
performance in the quarter and will benefit us moving forward. Rising
labor costs remain the primary contributing factor to our margin
erosion, and we are hyper-focused on being as efficient as possible in
our labor model."

Strategic Capital Recycling Program and Hotel Investments

In November 2017, the company contracted to acquire the
under-construction, 96-room Residence Inn Charleston Summerville, S.C.,
for $21 million. The hotel sits adjacent to the 96-room Courtyard by
Marriott that Chatham acquired in the same month. These hotels are
located in Nexton, an emerging, mixed-use community in the heart of a
rapidly expanding area just outside of Charleston. The hotels will be
the highest quality and closest accommodations to Volvo's second
American factory which is expected to open later this year. Volvo
already announced plans for a second factory on its nearby campus.
Chatham expects to close on the acquisition by August 31, 2018. RevPAR
at the company's Courtyard by Marriott Charleston Summerville, S.C., in
the 2018 second quarter was up approximately four percent.

During the second quarter, the company substantially completed the
renovations of the Homewood Suites Billerica, Mass., and Hyatt Place
Pittsburgh. The company commenced the renovation of the Residence Inn
Mountain View, Calif., in the second quarter and expects to complete
those upgrades during the 2018 third quarter. The company will commence
the renovation of the Homewood Suites Dallas, Texas, in the third
quarter and expects to complete those improvements in the fourth
quarter. Chatham intends to invest approximately $25 million renovating
and upgrading its hotels in 2018.

Capital Markets & Capital Structure

As of June 30, 2018, the company had net debt of $525.0 million (total
consolidated debt less unrestricted cash). Total debt outstanding was
$533.0 million at an average interest rate of 4.6 percent, comprised of
$506.0 million of fixed-rate mortgage debt at an average interest rate
of 4.7 percent and $27.0 million outstanding on the company's $250
million senior unsecured revolving credit facility, which currently
carries a 4.0 percent interest rate.

Chatham's leverage ratio was approximately 33.3 percent on June 30,
2018, based on the ratio of the company's net debt to hotel investments
at cost. The weighted average maturity date for Chatham's fixed-rate
debt is February 2024 with the earliest maturity in 2021. As of June 30,
2018, Chatham's proportionate share of joint venture debt and
unrestricted cash was $165.4 million and $2.5 million, respectively. At
Chatham's current leverage level, the borrowing cost under the new
facility is LIBOR plus 1.65 percent.

On June 30, 2018, as defined in the company's credit agreement,
Chatham's fixed charge coverage ratio, including its interest in the two
joint ventures with Colony NorthStar, was 3.3 times, and total net debt
to trailing 12-month corporate EBITDA was 5.4 times. Excluding its
interest in the two joint ventures, Chatham's fixed charge coverage
ratio was 3.6 times, and net debt to trailing 12-month corporate EBITDA
was 4.7 times.

"During the quarter, we reduced our net debt by $2.8 million, bringing
the year-to-date reduction to $6.2 million, and we have also reduced our
leverage ratio to 33 percent," remarked Jeremy Wegner, Chatham's chief
financial officer. "Our cash flow is strong, including distributions
from our joint ventures, and we will continue to reduce our net debt
until we deploy capital into more accretive hotel investments."

Joint Venture Investments

During the 2018 second quarter, the Innkeepers and Inland joint ventures
contributed Adjusted EBITDA and Adjusted FFO of approximately $5.1
million and $2.8 million, respectively, compared to 2017 second quarter
Adjusted EBITDA and FFO of approximately $4.8 million and $2.7 million,
respectively. Both Adjusted EBITDA and Adjusted FFO were $0.1 million
above the company's previous guidance for the quarter.

Chatham received distributions from its joint venture investments of
$1.8 million during the 2018 second quarter.

Dividend

Chatham currently pays a monthly dividend of $0.11 per common share.
Chatham's 2018 dividend per share of $1.32 represents approximately 70
percent of its 2018 adjusted FFO per share, based on the midpoint of its
guidance for 2018.

2018 Guidance

The company provides guidance, but does not undertake to update it for
any developments in its business. Achievement of the results is subject
to the risks disclosed in the company's filings with the Securities and
Exchange Commission.

The company's 2018 guidance reflects the following assumptions:

  • Industrywide RevPAR growth of 1 to 3 percent in 2018
    • Marriott International forecast North American RevPAR growth of 1
      to 2 percent; Hilton Hotels & Resorts estimated North American
      RevPAR growth of 1 to 3 percent
    • STR projected industry RevPAR growth of 2.9 percent
  • Acquisition of the 96-room Residence Inn by Marriott Charleston
    Summerville, S.C., on August 31, 2018, for $21.0 million
  • Renovations commencing at the following hotels:
    • Residence Inn Mountain View, Calif., commencing in the second
      quarter
    • Homewood Suites Dallas, Texas, beginning in the third quarter
    • Residence Inn Sunnyvale, Calif., #1, Residence Inn Tysons Corner,
      Va., and the Homewood Suites Farmington, Conn., starting in the
      fourth quarter
  • No additional acquisitions, dispositions, debt or equity issuance
        Q3 2018         2018 Forecast
RevPAR $144 to $146 $131 to $133
RevPAR growth -1.0% to +0.5% -1.5% to 0.0%
Total hotel revenue $85.6 to $86.8 M $310.7 to $315.1 M
Net income $12.2 to $14.0 M $28.4 to $32.0 M
Net income per diluted share $0.26 to $0.30 $0.61 to $0.69
Adjusted EBITDA $37.6 to $39.2 M $127.1 to $130.8 M
Adjusted FFO $27.0 to $28.8 M $86.0 to $89.7 M
Adjusted FFO per diluted share $0.58 to $0.62 $1.85 to $1.93
Hotel EBITDA margins 41.0% to 42.0% 38.8% to 39.3%
Corporate cash administrative expenses $2.3 M $9.7 M
Corporate non-cash administrative expenses $1.0 M $4.2 M
Interest expense (excluding fee amortization) $6.6 M $26.1 M
Non-cash amortization of deferred fees $0.3 M $1.2 M
Income taxes $0.0 M $0.0 M
Chatham's share of JV EBITDA $4.8 to $5.0 M $16.3 to $16.7 M
Chatham's share of JV FFO $2.3 to $2.5 M $6.7 to $7.1 M
Weighted average shares/units outstanding 46.5 M 46.5 M
 
    Funds from operations (FFO), Adjusted FFO (AFFO), EBITDA and
Adjusted EBITDA are non-GAAP financial measures within the meaning
of the rules of the Securities and Exchange Commission. See the
discussion included in this press release for information regarding
these non-GAAP financial measures.

Earnings Call

The company will hold its second quarter 2018 conference later today at
10:00 a.m. Eastern Time. Shareholders and other interested parties may
listen to a simultaneous webcast of the conference call on the Internet
by logging onto either www.chathamlodgingtrust.com
or www.streetevents.com
or may participate in the conference call by dialing 1-877-407-0789 and
referencing Chatham Lodging Trust. A recording of the call will be
available by telephone until 11:59 p.m. ET on Wednesday, August 8, 2018,
by dialing 1-844-512-2921, reference number 13681589. A replay of the
conference call will be posted on Chatham's website.

About Chatham Lodging Trust

Chatham Lodging Trust is a self-advised, publicly-traded real estate
investment trust focused primarily on investing in upscale,
extended-stay hotels and premium-branded, select-service hotels. The
company owns interests in 135 hotels totaling 18,519 rooms/suites,
comprised of 40 properties it wholly owns with an aggregate of 6,020
rooms/suites in 15 states and the District of Columbia and a minority
investment in two joint ventures that own 95 hotels with an aggregate of
12,499 rooms/suites. Additional information about Chatham may be found
at chathamlodgingtrust.com.

Non-GAAP Financial Measures

Included in this press release are certain "non-GAAP financial
measures," within the meaning of Securities and Exchange Commission
(SEC) rules and regulations, that are different from measures calculated
and presented in accordance with GAAP (generally accepted accounting
principles). The company considers the following non-GAAP financial
measures useful to investors as key supplemental measures of its
operating performance: (1) FFO, (2) Adjusted FFO, (3) EBITDA, (5)
EBITDAre (6) Adjusted EBITDA and (7) Adjusted Hotel EBITDA. These
non-GAAP financial measures should be considered along with, but not as
alternatives to, net income or loss as prescribed by GAAP as a measure
of its operating performance.

FFO As Defined by NAREIT 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 gains or losses from sales of real estate, impairment
write-downs, the cumulative effect of changes in accounting principles,
plus depreciation and amortization (excluding amortization of deferred
financing costs), and after adjustments for unconsolidated partnerships
and joint ventures following the same approach. The company believes
that the presentation of FFO provides useful information to investors
regarding its operating performance because it measures its performance
without regard to specified non-cash items such as real estate
depreciation and amortization, gain or loss on sale of real estate
assets and certain other items that the company believes are not
indicative of the property level performance of its hotel properties.
The company believes that these items reflect historical cost of its
asset base and its acquisition and disposition activities and are less
reflective of its ongoing operations, and that by adjusting to exclude
the effects of these items, FFO is useful to investors in comparing its
operating performance between periods and between REITs that also report
using the NAREIT definition.

The company calculates Adjusted FFO by further adjusting FFO for
certain additional items that are not addressed in NAREIT's definition
of FFO, including other charges, losses on the early extinguishment of
debt and similar items related to its unconsolidated real estate
entities that it believes do not represent costs related to hotel
operations.
The company believes that Adjusted FFO provides
investors with another financial measure that may facilitate comparisons
of operating performance between periods and between REITs that make
similar adjustments to FFO.

EBITDA, EBITDAre, Adjusted EBITDA and Adjusted Hotel EBITDA

The company calculates EBITDA for purposes of the credit facility
debt as net income or loss excluding: (1) interest expense; (2)
provision for income taxes, including income taxes applicable to sale of
assets; (3) depreciation and amortization; and (4) unconsolidated real
estate entity items including interest, depreciation and amortization
excluding gains and losses from sales of real estate. The company
believes EBITDA is useful to investors in evaluating and facilitating
comparisons of its operating performance because it helps investors
compare the company's operating performance between periods and between
REITs by removing the impact of its capital structure (primarily
interest expense) and asset base (primarily depreciation and
amortization) from its operating results. In addition, the company uses
EBITDA as one measure in determining the value of hotel acquisitions and
dispositions.

The company calculates EBITDAre in accordance with NAREIT guidelines,
which defines EBITDAre as net income or loss excluding interest expense,
income tax expense, depreciation and amortization expense, gains or
losses from sales of real estate, impairment, and adjustments for
unconsolidated joint ventures.
We believe that the presentation
of EBITDAre provides useful information to investors regarding the
Company's operating performance and can facilitate comparisons of
operating performance between periods and between REITs.

The company calculates Adjusted EBITDA by further adjusting EBITDA
for certain additional items, including other charges, losses on the
early extinguishment of debt, amortization of non-cash share-based
compensation and similar items related to its unconsolidated real estate
entities, which it believes are not indicative of the performance of its
underlying hotel properties entities. The company believes that Adjusted
EBITDA provides investors with another financial measure that may
facilitate comparisons of operating performance between periods and
between REITs that report similar measures.

Adjusted Hotel EBITDA is defined as net income before interest,
income taxes, depreciation and amortization, corporate general and
administrative, impairment loss, loss on early extinguishment of debt,
interest and other income and income or loss from unconsolidated real
estate entities.
The Company presents Adjusted Hotel EBITDA
because the Company believes it is useful to investors in comparing its
hotel operating performance between periods and comparing its Adjusted
Hotel EBITDA margins to those of our peer companies.
Adjusted
Hotel EBITDA represents the results of operations for its wholly owned
hotels only
.

Although the company presents FFO, Adjusted FFO, EBITDA, EBITDAre,
Adjusted EBITDA and Adjusted Hotel EBITDA because it believes they are
useful to investors in comparing the company's operating performance
between periods and between REITs that report similar measures, these
measures have limitations as analytical tools. Some of these limitations
are:

  • FFO, Adjusted FFO, EBITDA, EBITDAre, Adjusted EBITDA and Adjusted
    Hotel EBITDA do not reflect the company's cash expenditures, or future
    requirements, for capital expenditures or contractual commitments;
  • FFO, Adjusted FFO, EBITDA, EBITDAre, Adjusted EBITDA and Adjusted
    Hotel EBITDA do not reflect changes in, or cash requirements for, the
    company's working capital needs;
  • FFO, Adjusted FFO, EBITDA, EBITDAre, Adjusted EBITDA and Adjusted
    Hotel EBITDA do not reflect funds available to make cash distributions;
  • EBITDA, EBITDAre, Adjusted EBITDA and Adjusted Hotel EBITDA do not
    reflect the significant interest expense, or the cash requirements
    necessary to service interest or principal payments, on the company's
    debts;
  • Although depreciation and amortization are non-cash charges, the
    assets being depreciated and amortized may need to be replaced in the
    future, and FFO, Adjusted FFO, EBITDA, EBITDAre, Adjusted EBITDA and
    Adjusted Hotel EBITDA do not reflect any cash requirements for such
    replacements;
  • Non-cash compensation is and will remain a key element of the
    company's overall long-term incentive compensation package, although
    the company excludes it as an expense when evaluating its ongoing
    operating performance for a particular period using adjusted EBITDA;
  • Adjusted FFO, Adjusted EBITDA and Adjusted Hotel EBITDA do not
    reflect the impact of certain cash charges (including acquisition
    transaction costs) that result from matters the company considers not
    to be indicative of the underlying performance of its hotel
    properties; and
  • Other companies in the company's industry may calculate FFO,
    Adjusted FFO, EBITDA, EBITDAre, Adjusted EBITDA and Adjusted Hotel
    EBITDA differently than the company does, limiting their usefulness as
    a comparative measure.

In addition, FFO, Adjusted FFO, EBITDA, EBITDAre, Adjusted EBITDA and
Adjusted Hotel EBITDA do not represent cash generated from operating
activities as determined by GAAP and should not be considered as
alternatives to net income or loss, cash flows from operations or any
other operating performance measure prescribed by GAAP. FFO, Adjusted
FFO, EBITDA, EBITDAre, Adjusted EBITDA and Adjusted Hotel EBITDA are not
measures of the Company's liquidity. Because of these limitations, FFO,
Adjusted FFO, EBITDA, EBITDAre, Adjusted EBITDA and Adjusted Hotel
EBITDA should not be considered in isolation or as a substitute for
performance measures calculated in accordance with GAAP. The Company
compensates for these limitations by relying primarily on its GAAP
results and using FFO, Adjusted FFO, EBITDA, EBITDAre, Adjusted EBITDA
and Adjusted Hotel EBITDA only supplementally. The Company's
consolidated financial statements and the notes to those statements
included elsewhere are prepared in accordance with GAAP.

The company's reconciliation of FFO, Adjusted FFO, EBITDA, EBITDAre,
Adjusted EBITDA and Adjusted Hotel EBITDA to net income attributable to
common shareholders, as determined under GAAP, is set forth below.

Forward-Looking Statement Safe Harbor

Note: This press release contains forward-looking statements within
the meaning of federal securities regulations. These forward-looking
statements are identified by their use of terms and phrases such as
"anticipate," "believe," "could," "estimate," "expect," "intend," "may,"
"should," "plan," "predict," "project," "will," "continue" and other
similar terms and phrases, including references to assumption and
forecasts of future results. Forward-looking statements are not
guarantees of future performance and involve known and unknown risks,
uncertainties and other factors which may cause the actual results to
differ materially from those anticipated at the time the forward-looking
statements are made. These risks include, but are not limited to:
national and local economic and business conditions, including the
effect on travel of potential terrorist attacks, that will affect
occupancy rates at the company's hotels and the demand for hotel
products and services; operating risks associated with the hotel
business; risks associated with the level of the company's indebtedness
and its ability to meet covenants in its debt agreements; relationships
with property managers; the company's ability to maintain its properties
in a second-class manner, including meeting capital expenditure
requirements; the company's ability to compete effectively in areas such
as access, location, quality of accommodations and room rate structures;
changes in travel patterns, taxes and government regulations which
influence or determine wages, prices, construction procedures and costs;
the company's ability to complete acquisitions and dispositions; and the
company's ability to continue to satisfy complex rules in order for the
company to remain a REIT for federal income tax purposes and other risks
and uncertainties associated with the company's business described in
the company's filings with the SEC. Although the company believes the
expectations reflected in such forward-looking statements are based upon
reasonable assumptions, it can give no assurance that the expectations
will be attained or that any deviation will not be material. All
information in this release is as of the date hereof, and the company
undertakes no obligation to update any forward-looking statement to
conform the statement to actual results or changes in the company's
expectations.

CHATHAM LODGING TRUST
Consolidated Balance Sheets

(In thousands, except share and per share data)

 
  June 30,
2018
  December 31, 2017
(unaudited)
Assets:
Investment in hotel properties, net $ 1,308,571 $ 1,320,082
Cash and cash equivalents 8,077 9,333
Restricted cash 27,881 27,166
Investment in unconsolidated real estate entities 22,776 24,389
Hotel receivables (net of allowance for doubtful accounts of $234
and $200,
respectively) 6,976 4,047
Deferred costs, net 5,351 4,646
Prepaid expenses and other assets 4,439 2,523
Deferred tax asset, net 30   30  
Total assets $ 1,384,101   $ 1,392,216  
Liabilities and Equity:
Mortgage debt, net $ 504,072 $ 506,316
Revolving credit facility 27,000 32,000
Accounts payable and accrued expenses 31,358 31,692
Distributions and losses in excess of investments of unconsolidated
real estate
entities 7,562 6,582
Distributions payable 5,431   5,846  
Total liabilities 575,423   582,436  
Commitments and contingencies
Equity:
Shareholders' Equity:
Preferred shares, $0.01 par value, 100,000,000 shares authorized and
unissued at
June 30, 2018 and December 31, 2017
Common shares, $0.01 par value, 500,000,000 shares authorized;
45,876,812 and
45,375,266 shares issued and outstanding at June 30, 2018 and
December 31, 2017,
respectively 459 450
Additional paid-in capital 882,752 871,730
Retained earnings (distributions in excess of retained earnings) (83,079 ) (69,018 )
Total shareholders' equity 800,132   803,162  
Noncontrolling interests:
Noncontrolling interest in Operating Partnership 8,546   6,618  
Total equity 808,678   809,780  
Total liabilities and equity $ 1,384,101   $ 1,392,216  
 
CHATHAM LODGING TRUST
Consolidated Statements of Operations

(In thousands, except share and per share data)

(unaudited)

 
  For the three months ended   For the six months ended
June 30, June 30,
2018   2017 2018   2017
Revenue:
Room $ 78,274 $ 72,801 $ 144,525 $ 137,194
Food and beverage 2,212 1,473 4,310 2,975
Other 3,527 2,967 6,554 5,413
Cost reimbursements from unconsolidated real estate entities 2,577   2,402   5,234   4,896  
Total revenue 86,590   79,643   160,623   150,478  
Expenses:
Hotel operating expenses:
Room 15,945 15,024 30,499 28,529
Food and beverage 1,739 1,212 3,479 2,464
Telephone 415 387 874 795
Other hotel operating 796 710 1,517 1,310
General and administrative 6,781 5,974 12,814 11,628
Franchise and marketing fees 6,575 6,089 12,100 11,391
Advertising and promotions 1,485 1,270 3,050 2,602
Utilities 2,446 2,352 5,146 4,722
Repairs and maintenance 3,637 3,179 7,261 6,431
Management fees 2,807 2,588 5,243 4,835
Insurance 339     295   672     628  
Total hotel operating expenses 42,965 39,080 82,655 75,335
Depreciation and amortization 11,921 11,714 23,958 23,718
Impairment loss 6,663 6,663
Property taxes, ground rent and insurance 6,180 5,573 11,955 10,361
General and administrative 3,547 3,287 7,169 6,555
Other charges 264 15 250 15
Reimbursed costs from unconsolidated real estate entities 2,577   2,402   5,234   4,896  
Total operating expenses 67,454   68,734   131,221   127,543  
Operating income 19,136 10,909 29,402 22,935
Interest and other income 15 6 17 18
Interest expense, including amortization of deferred fees (6,667 ) (6,773 ) (13,298 ) (13,765 )
Loss on sale of hotel property (1 ) (18 )
Income from unconsolidated real estate entities 1,004   927   250   842  
Income before income tax expense 13,487 5,069 16,353 10,030
Income tax expense       (317 )
Net income 13,487 5,069 16,353 9,713
Net income attributable to noncontrolling interests (100 ) (35 ) (120 ) (66 )
Net income attributable to common shareholders $ 13,387   $ 5,034   $ 16,233   $ 9,647  
 
Income per Common Share - Basic:
Net income attributable to common shareholders $ 0.29   $ 0.13   0.35   $ 0.25  
Income per Common Share - Diluted:
Net income attributable to common shareholders $ 0.29   0.13   $ 0.35   0.25  
Weighted average number of common shares outstanding:
Basic 45,867,625 38,525,306 45,811,023 38,443,663
Diluted 46,084,688 38,749,661 46,006,561 38,659,189
Distributions paid per common share: $ 0.33 $ 0.33 $ 0.66 $ 0.66
CHATHAM LODGING TRUST
FFO and EBITDA

(In thousands, except share and per share data)

 
  For the three months ended   For the six months ended
June 30, June 30,
2018   2017 2018   2017
Funds From Operations ("FFO"):
Net income $ 13,487 $ 5,069 $ 16,353 $ 9,713
Loss on sale of hotel property 1 18
Depreciation 11,863 11,661 23,841 23,611
Impairment loss 6,663 6,663
Adjustments for unconsolidated real estate entity items 1,757   1,763   3,434   3,234
FFO attributable to common share and unit holders 27,108 25,156 43,646 43,221
Other charges 264 15 250 15
Adjustments for unconsolidated real estate entity items 3   8   15   15
Adjusted FFO attributable to common share and unit holders $ 27,375   $ 25,179   $ 43,911   $ 43,251
Weighted average number of common shares and units
Basic 46,230,092 38,795,416 46,158,176 38,707,640
Diluted 46,447,156 39,019,771 46,353,714 38,923,165
 
  For the three months ended   For the six months ended
June 30, June 30,
2018   2017 2018   2017

Earnings Before Interest, Taxes, Depreciation and

Amortization ("EBITDA"):

Net income $ 13,487 $ 5,069 $ 16,353 $ 9,713
Interest expense 6,667 6,773 13,298 13,765
Income tax expense 317
Depreciation and amortization 11,921 11,714 23,958 23,718
Adjustments for unconsolidated real estate entity items 4,052   3,825   7,962   7,137
EBITDA 36,127 27,381 61,571 54,650
Impairment loss 6,663 6,663
Loss on sale of hotel property 1     18  
EBITDAre 36,128 34,044 61,589 61,313
Other charges 264 15 250 15
Adjustments for unconsolidated real estate entity items 25 28 14 42
Share based compensation 1,196   999   2,114   1,786
Adjusted EBITDA $ 37,613   $ 35,086   $ 63,967   $ 63,156
 
CHATHAM LODGING TRUST
ADJUSTED HOTEL EBITDA

(In thousands, except share and per share data)

 
                  For the three months ended   For the six months ended
June 30,   June 30,
2018   2017   2018   2017
 
Net Income $ 13,487 $ 5,069 $ 16,353 $ 9,713
Add: Interest expense 6,667 6,773 13,298 13,765
Income tax expense 317
Depreciation and amortization 11,921 11,714 23,958 23,718
Corporate general and administrative 3,547 3,287 7,169 6,555
Other charges 264 15 250 15
Impairment loss 6,663 6,663
Loss on sale of hotel property 1 18
Less: Interest and other income (15 ) (6 ) (17 ) (18 )
Income from unconsolidated real estate entities (1,004 ) (927 ) (250 ) (842 )
Adjusted Hotel EBITDA $ 34,868   $ 32,588   $ 60,779   $ 59,886  
 

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