DiamondRock Hospitality Company Reports Second Quarter Results

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Cision

Cash Flow Positive Throughout Second Quarter

Acquires Bourbon Orleans Hotel in New Orleans and Henderson Park Inn in Destin, Florida

BETHESDA, Md., Aug. 5, 2021 /PRNewswire/ -- DiamondRock Hospitality Company (the "Company") (NYSE: DRH), a lodging-focused real estate investment trust that owns a portfolio of 31 premium hotels in the United States, today announced results of operations for the quarter ended June 30, 2021.

Second Quarter 2021 Highlights:

  • Net Loss: Net loss was $19.1 million and loss per diluted share was $0.10.

  • Comparable Revenues: Comparable total revenues increased 514.8% from the second quarter of 2020.

  • Comparable RevPAR: Comparable RevPAR was $107.56, an increase of 563.1% from second quarter of 2020.

  • Comparable Hotel Adjusted EBITDA: Comparable Hotel Adjusted EBITDA was $29.0 million, a $31.6 million improvement from the first quarter of 2021.

  • Adjusted EBITDA: Adjusted EBITDA was $19.8 million, a $29.4 million increase from the first quarter of 2021.

  • Adjusted FFO: Adjusted FFO was $11.1 million and Adjusted FFO per diluted share was $0.05.

  • Liquidity: The Company ended the second quarter with $638.9 million total liquidity comprised of $192.9 million of unrestricted corporate cash, $46.0 million of unrestricted cash at its hotels and full capacity under the Company's $400 million revolving credit facility. The Company has remained cash flow positive since March 2021.

  • Dispositions: On April 30, 2021, the Company sold the partially rebuilt Frenchman's Reef Marriott Resort & Spa and Noni Beach, Autograph Collection project in St. Thomas, U.S.V.I. (collectively, "Frenchman's Reef"). On June 30, 2021, the Company sold the Lexington Hotel New York for $185.3 million.

Recent Developments:

  • Hotel Acquisitions: The Company acquired the Bourbon Orleans Hotel in New Orleans, Louisiana on July 29, 2021 and the Henderson Park Inn in Destin, Florida on July 30, 2021. These acquisitions are consistent with the Company's portfolio strategy to invest in high-quality, leisure-oriented properties located in high barrier-to-entry markets. These acquisitions increase the Company's exposure to resort and leisure-oriented hotels to 34.0%.

  • Preliminary July Results: Preliminary RevPAR for July was $166.05, a 373.6% increase from July 2020 and a 11.8% decline from July 2019. Preliminary July ADR was $239.81, a 15.8% increase over July 2020 and a 5.1% increase over July 2019.

"The second quarter demonstrated a rapid return of travel demand and exceeded our internal expectations" said Mark W. Brugger, President and Chief Executive Officer of DiamondRock Hospitality Company. "The majority of our portfolio turned cash flow positive during the quarter and we now expect DiamondRock to be cash flow positive for the full year 2021. In addition to stronger than expected profits, we have made significant portfolio enhancements to position the Company for a strong recovery as travel demand continues to improve. Earlier this year, we sold our development project in the U.S. Virgin Islands and a challenging hotel in New York City and redeployed a portion of those proceeds into one of the best located boutique hotels in the French Quarter of New Orleans and a lifestyle beachfront resort in Destin, Florida. With our strong balance sheet, DiamondRock is focused on external growth as well as internal return-on-investment opportunities like the upbrandings at our Vail and Sonoma resorts."

Operating Results

Please see "Non-GAAP Financial Measures" attached to this press release for an explanation of the terms "EBITDAre," "Adjusted EBITDA," "Hotel Adjusted EBITDA," "Hotel Adjusted EBITDA Margin," "FFO" and "Adjusted FFO" and a reconciliation of these measures to net income. Comparable operating results exclude our 2021 dispositions for all periods presented. See "Reconciliation of Comparable Operating Results" attached to this press release for a reconciliation to historical amounts.


Quarter Ended June 30,


Change From


2021

2020

2019


2020

2019


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

Comparable Operating Results (1)







ADR

$

221.79


$

175.76


$

248.50



26.2

%

(10.7)

%

Occupancy

48.5

%

9.2

%

82.3

%


39.3

%

(33.8)

%

RevPAR

$

107.56


$

16.22


$

204.41



563.1

%

(47.4)

%

Total RevPAR

$

154.45


$

25.16


$

296.90



513.9

%

(48.0)

%

Revenues

$

124.8


$

20.3


$

239.6



514.8

%

(47.9)

%

Hotel Adjusted EBITDA

$

29.0


$

(26.8)


$

83.5



208.2

%

(65.3)

%

Hotel Adjusted EBITDA Margin

23.27

%

(131.63)

%

34.82

%


15,490 bps

(1,155) bps

Available Rooms

807,869


807,625


807,170



244


699









Actual Operating Results







Revenues

$

124.8


$

20.4


$

257.9



511.8

%

(51.6)

%

Net (loss) income

$

(19.1)


$

(73.4)


$

29.1



74.0

%

(165.6)

%

(Loss) income per diluted share

$

(0.10)


$

(0.36)


$

0.14



72.2

%

(171.4)

%

Adjusted EBITDA

$

19.8


$

(37.0)


$

81.1



153.5

%

(75.6)

%

Adjusted FFO

$

11.1


$

(41.0)


$

65.1



127.1

%

(82.9)

%

Adjusted FFO per diluted share

$

0.05


$

(0.20)


$

0.32



125.0

%

(84.4)

%



(1)

The amounts for all periods presented exclude the two hotels sold during 2021, Frenchman's Reef and The Lexington Hotel, and does not adjust for hotels that have suspended operations.


Six Months Ended June 30,


Change From


2021

2020

2019


2020

2019


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

Comparable Operating Results (1)







ADR

$

219.95


$

213.39


$

234.54



3.1

%

(6.2)

%

Occupancy

38.9

%

34.1

%

77.5

%


4.8

%

(38.6)

%

RevPAR

$

85.46


$

72.72


$

181.66



17.5

%

(53.0)

%

Total RevPAR

$

123.03


$

112.47


$

268.35



9.4

%

(54.2)

%

Revenues

$

197.7


$

181.7


$

430.8



8.8

%

(54.1)

%

Hotel Adjusted EBITDA

$

29.7


$

(5.2)


$

131.5



671.2

%

(77.4)

%

Hotel Adjusted EBITDA Margin

15.02

%

(2.88)

%

30.52

%


1,790 bps

(1,550) bps

Available Rooms

1,606,709


1,615,250


1,605,184



(8,541)


1,525









Actual Operating Results







Revenues

$

197.7


$

190.4


$

460.3



3.8

%

(57.0)

%

Net (loss) income

$

(190.7)


$

(108.1)


$

38.1



(76.4)

%

(600.5)

%

(Loss) income per diluted share

$

(0.92)


$

(0.53)


$

0.19



(73.6)

%

(584.2)

%

Adjusted EBITDA

$

10.2


$

(25.2)


$

130.2



140.5

%

(92.2)

%

Adjusted FFO

$

(13.7)


$

(32.6)


$

107.1



58.0

%

(112.8)

%

Adjusted FFO per diluted share

$

(0.06)


$

(0.16)


$

0.53



62.5

%

(111.3)

%



(1)

The amounts for all periods presented exclude the two hotels sold during 2021, Frenchman's Reef and The Lexington Hotel, and does not adjust for hotels that have suspended operations.

Hotel Operations

The following tables provide operating information for the six months ended June 30, 2021 and preliminary operating information for July 2021:


January 2021


February 2021


March 2021


April 2021


May 2021


June 2021


Preliminary July 2021

Comparable Operating Results (1)

Number of Hotels

29



29



29



29



29



29



29


Number of Rooms

8,878



8,878



8,878



8,878



8,878



8,878



8,878


Occupancy

21.7

%


29.6

%


36.1

%


39.1

%


47.5

%


59.0

%


69.2

%

ADR

$192.00



$215.29



$232.94



$224.72



$220.61



$220.83



$239.81


RevPAR

$41.61



$63.72



$84.05



$87.81



$104.77



$130.20



$166.05


Total RevPAR

$62.45



$93.83



$117.72



$128.41



$153.20



$181.77



$228.84


2021 vs 2019 (1)

Occupancy change in bps

(4,227) bps


(4,532) bps


(4,306) bps


(4,213) bps


(3,270) bps


(2,648) bps


(1,333) bps

ADR Rate % change

(4.3)

%


(0.2)

%


(1.1)

%


(7.5)

%


(12.7)

%


(11.6)

%


5.1

%

RevPAR % change

(67.6)

%


(60.6)

%


(54.9)

%


(55.5)

%


(48.3)

%


(39.0)

%


(11.8)

%

Total RevPAR % change

(68.5)

%


(62.0)

%


(57.0)

%


(55.0)

%


(48.8)

%


(40.5)

%


(13.3)

%



(1)

The amounts for all periods presented exclude the two hotels sold during 2021, Frenchman's Reef and The Lexington Hotel, and does not adjust for hotels that have suspended operations.

On January 3, 2021, the Company suspended operations at the Chicago Marriott Downtown Magnificent Mile due to lack of travel demand and new governmental restrictions put in place. The hotel was reopened on April 15, 2021. Following the reopening of the Hilton Garden Inn New York/Times Square Central on May 3, 2021 and the Courtyard New York Manhattan/Fifth Avenue on June 1, 2021, all of the Company's hotels are now open. The Company will continue to aggressively manage costs at all of its hotels and ensure appropriate cleanliness and safety protocols. The Company is carefully monitoring demand trends and adjusted sales strategies and staffing to respond rapidly in a changing environment.

Hotel Dispositions

On June 30, 2021, the Company sold The Lexington Hotel New York for $185.3 million. Including the Company's projected capital expenditures, the sale price represents a 14.2x multiple on 2019 Hotel EBITDA and a 5.4% capitalization rate on 2019 hotel net operating income. The sale reduced the Company's exposure to New York City by almost 48% based on number of rooms. Also in the second quarter, the Company completed the sale of Frenchman's Reef, a partially rebuilt resort in the US Virgin Islands, for $35.0 million in cash consideration, as well as a participation right in the future profits of the hotel once certain return metrics are achieved. The projected cost to complete the rebuild project exceeded $170 million. These two sales combined created significant investment capacity for the Company to pursue its external growth strategy.

Capital Expenditures

The Company invested approximately $16.9 million in capital improvements at its operating hotels during the six months ended June 30, 2021. The Company spent approximately $2.7 million on the rebuild of Frenchman's Reef during the six months ended June 30, 2021 and has no further obligation to fund any additional amounts related to the rebuild following the sale of the property on April 30, 2021.

The Company expects to spend approximately $55 million on necessary capital improvements and a select few transformational projects with attractive returns on investment in 2021. Significant projects include the following:

  • The Lodge at Sonoma: The Company completed an upgrade renovation to reposition and rebrand the hotel to an Autograph Collection Hotel. The renovation includes a new restaurant by celebrity chef Michael Mina.

  • Vail Marriott Mountain Resort: The Company plans to complete the final phase of a multi-year renovation to rebrand the resort as The Hythe Vail, a Luxury Collection Hotel in the fourth quarter of 2021.

  • JW Marriott Denver Cherry Creek: The Company plans to complete renovations in the second half of 2021 to rebrand the hotel as Hotel Clio, a Luxury Collection Hotel at the start of 2022.

  • Margaritaville Beach House Key West: The Company plans to invest $3 million to convert the Barbary Beach House Key West to the Margaritaville Beach Resort Key West in the fall of 2021.

Balance Sheet and Liquidity

As of June 30, 2021, the Company's liquidity was $638.9 million and is comprised of $192.9 million of unrestricted corporate cash, $46.0 million of unrestricted cash at its hotels and $400.0 million of capacity on its senior unsecured credit facility. As of June 30, 2021, the Company had $1.0 billion of total debt outstanding, which consisted of $590.1 million of property-specific, non-recourse mortgage debt, $400.0 million of unsecured term loans and no outstanding borrowings on its $400.0 million senior unsecured credit facility. The Company has no debt maturities until 2022. The acquisitions of the Bourbon Orleans and the Henderson Park Inn were funded by unrestricted corporate cash on hand.

Dividends

The Company declared a quarterly dividend of $0.515625 per share on its 8.250% Series A Cumulative Redeemable Preferred Stock to shareholders of record as of June 18, 2021. This dividend was paid on June 30, 2021. The Company has suspended its quarterly common stock cash dividends. The resumption in quarterly common dividends will be determined by the Company's Board of Directors after considering the Company's obligations under its various financing agreements, projected taxable income, compliance with its debt covenants, long-term operating projections, expected capital requirements and risks affecting the Company's business.

Earnings Call

The Company will host a conference call to discuss its second quarter results on Friday, August 6, 2021, at 8:00 a.m. Eastern Time (ET). To participate in the live call, investors are invited to dial 844-287-6622 (for domestic callers) or 530-379-4559 (for international callers). The participant passcode is 1363067. A live webcast of the call will be available via the investor relations section of DiamondRock Hospitality Company's website at www.drhc.com or www.earnings.com. A replay of the webcast will also be archived on the website for one week.

About the Company

DiamondRock Hospitality Company is a self-advised real estate investment trust (REIT) that is an owner of a leading portfolio of geographically diversified hotels concentrated in top gateway markets and destination resort locations. The Company currently owns 31 premium quality hotels with over 9,100 rooms. The Company has strategically positioned its hotels to be operated both under leading global brand families as well as unique boutique hotels in the lifestyle segment. For further information on the Company and its portfolio, please visit DiamondRock Hospitality Company's website at www.drhc.com.

This press release contains forward-looking statements within the meaning of federal securities laws and regulations. These forward-looking statements are identified by their use ...of terms and phrases such as "believe," "expect," "intend," "project," "forecast," "plan" and other similar terms and phrases, including references to assumptions and forecasts of futu...

DIAMONDROCK HOSPITALITY COMPANY
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share amounts)



June 30, 2021


December 31, 2020

ASSETS

(unaudited)



Property and equipment, net

$

2,439,555



$

2,817,356


Right-of-use assets

99,982



96,673


Restricted cash

26,686



23,050


Due from hotel managers

89,326



69,495


Prepaid and other assets (1)

20,582



28,403


Cash and cash equivalents

192,942



111,796


Total assets

$

2,869,073



$

3,146,773


LIABILITIES AND EQUITY




Liabilities:




Mortgage and other debt, net of unamortized debt issuance costs

$

587,972



$

595,149


Unsecured term loans, net of unamortized debt issuance costs

398,275



398,550


Senior unsecured credit facility



55,000


Total debt

986,247



1,048,699






Lease liabilities

106,480



104,973


Deferred rent

58,633



56,344


Due to hotel managers

86,071



95,548


Unfavorable contract liabilities, net

63,916



64,796


Accounts payable and accrued expenses (2)

33,502



46,542


Deferred income related to key money, net

7,809



10,946


Total liabilities

1,342,658



1,427,848


Equity:




Preferred stock, $0.01 par value; 10,000,000 shares authorized;




8.250% Series A Cumulative Redeemable Preferred Stock (liquidation preference $25.00 per share), 4,760,000 shares issued and outstanding at June 30, 2021 and December 31, 2020

48



48


Common stock, $0.01 par value; 400,000,000 shares authorized; 210,303,850 and 210,073,514 shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively

2,103



2,101


Additional paid-in capital

2,288,070



2,285,491


Accumulated deficit

(771,318)



(576,531)


Total stockholders' equity

1,518,903



1,711,109


Noncontrolling interests

7,512



7,816


Total equity

1,526,415



1,718,925


Total liabilities and equity

$

2,869,073



$

3,146,773




(1)

Includes $9.0 million and $10.7 million of prepaid expenses and $11.6 million and $15.3 million of other assets as of June 30, 2021 and December 31, 2020, respectively, and $2.4 million of insurance receivables as of December 31, 2020.

(2)

Includes $11.6 million and $15.2 million of accrued property taxes, $2.5 million and $3.9 million of accrued capital expenditures and $19.4 million and $24.8 million of other accrued liabilities as of June 30, 2021 and December 31, 2020, respectively, and $2.6 million of deferred tax liabilities as of December 31, 2020.

DIAMONDROCK HOSPITALITY COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share amounts)
(unaudited)



Three Months Ended June 30,


Six Months Ended June 30,


2021


2020


2021


2020

Revenues:








Rooms

$

86,896



$

13,099



$

137,308



$

124,900


Food and beverage

25,614



3,038



39,539



46,943


Other

12,281



4,242



20,881



18,531


Total revenues

124,791



20,379



197,728



190,374


Operating Expenses:








Rooms

21,466



7,143



35,294



42,796


Food and beverage

19,573



4,715



31,134



35,802


Management fees

2,291



(78)



3,410



3,399


Franchise fees

3,735



793



6,182



6,589


Other hotel expenses

51,874



40,720



100,809



118,563


Depreciation and amortization

24,692



28,783



51,654



58,883


Impairment losses

4,145





126,697




Corporate expenses

8,290



6,826



15,449



12,383


Total operating expenses, net

136,066



88,902



370,629



278,415










Interest and other (income) expense, net

(315)



(150)



(471)



249


Interest expense

10,710



11,629



19,194



32,847


Total other expenses, net

10,395



11,479



18,723



33,096


Loss before income taxes

(21,670)



(80,002)



(191,624)



(121,137)


Income tax benefit

2,551



6,615



938



13,058


Net loss

(19,119)



(73,387)



(190,686)



(108,079)


Less: Net loss attributable to noncontrolling interests

86



605



806



738


Net loss attributable to the Company

(19,033)



(72,782)



(189,880)



(107,341)


Distributions to preferred stockholders

(2,454)





(4,908)




Net loss attributable to common stockholders

$

(21,487)



$

(72,782)



$

(194,788)



$

(107,341)


Loss per share:








Net loss per share available to common stockholders - basic

$

(0.10)



$

(0.36)



$

(0.92)



$

(0.53)


Net loss per share available to common stockholders - diluted

$

(0.10)



$

(0.36)



$

(0.92)



$

(0.53)










Weighted-average number of common shares outstanding:








Basic

211,966,308



200,797,317



211,819,758



201,002,576

Diluted

211,966,308



200,797,317



211,819,758



201,002,576

Non-GAAP Financial Measures

We use the following non-GAAP financial measures that we believe are useful to investors as key measures of our operating performance: EBITDA, EBITDAre, Adjusted EBITDA, Hotel EBITDA, Hotel Adjusted EBITDA, FFO and Adjusted FFO. These measures should not be considered in isolation or as a substitute for measures of performance in accordance with U.S. GAAP. EBITDA, EBITDAre, Adjusted EBITDA, Hotel EBITDA, Hotel Adjusted EBITDA, FFO and Adjusted FFO, as calculated by us, may not be comparable to other companies that do not define such terms exactly as the Company.

Use and Limitations of Non-GAAP Financial Measures

Our management and Board of Directors use EBITDA, EBITDAre, Adjusted EBITDA, Hotel EBITDA, Hotel Adjusted EBITDA, FFO and Adjusted FFO to evaluate the performance of our hotels and to facilitate comparisons between us and other lodging REITs, hotel owners who are not REITs and other capital intensive companies. The use of these non-GAAP financial measures has certain limitations. These non-GAAP financial measures as presented by us, may not be comparable to non-GAAP financial measures as calculated by other real estate companies. These measures do not reflect certain expenses or expenditures that we incurred and will incur, such as depreciation, interest and capital expenditures. We compensate for these limitations by separately considering the impact of these excluded items to the extent they are material to operating decisions or assessments of our operating performance. Our reconciliations to the most comparable U.S. GAAP financial measures, and our consolidated statements of operations and cash flows, include interest expense, capital expenditures, and other excluded items, all of which should be considered when evaluating our performance, as well as the usefulness of our non-GAAP financial measures.

These non-GAAP financial measures are used in addition to and in conjunction with results presented in accordance with U.S. GAAP. They should not be considered as alternatives to operating profit, cash flow from operations, or any other operating performance measure prescribed by U.S. GAAP. These non-GAAP financial measures reflect additional ways of viewing our operations that we believe, when viewed with our U.S. GAAP results and the reconciliations to the corresponding U.S. GAAP financial measures, provide a more complete understanding of factors and trends affecting our business than could be obtained absent this disclosure. We strongly encourage investors to review our financial information in its entirety and not to rely on a single financial measure.

EBITDA, EBITDAre and FFO

EBITDA represents net income (calculated in accordance with U.S. GAAP) excluding: (1) interest expense; (2) provision for income taxes, including income taxes applicable to sale of assets; and (3) depreciation and amortization. The Company computes EBITDAre in accordance with the National Association of Real Estate Investment Trusts ("Nareit") guidelines, as defined in its September 2017 white paper "Earnings Before Interest, Taxes, Depreciation and Amortization for Real Estate." EBITDAre represents net income (calculated in accordance with U.S. GAAP) adjusted for: (1) interest expense; (2) provision for income taxes, including income taxes applicable to sale of assets; (3) depreciation and amortization; (4) gains or losses on the disposition of depreciated property including gains or losses on change of control; (5) impairment write-downs of depreciated property and of investments in unconsolidated affiliates caused by a decrease in value of depreciated property in the affiliate; and (6) adjustments to reflect the entity's share of EBITDAre of unconsolidated affiliates.

We believe EBITDA and EBITDAre are useful to an investor in evaluating our operating performance because they help investors evaluate and compare the results of our operations from period to period by removing the impact of our capital structure (primarily interest expense) and our asset base (primarily depreciation and amortization, and in the case of EBITDAre, impairment and gains or losses on dispositions of depreciated property) from our operating results. In addition, covenants included in our debt agreements use EBITDA as a measure of financial compliance. We also use EBITDA and EBITDAre as measures in determining the value of hotel acquisitions and dispositions.

The Company computes FFO in accordance with standards established by the Nareit, which defines FFO as net income determined in accordance with U.S. GAAP, excluding gains or losses from sales of properties and impairment losses, plus real estate related depreciation and amortization. The Company believes that the presentation of FFO provides useful information to investors regarding its operating performance because it is a measure of the Company's operations without regard to specified non-cash items, such as real estate related depreciation and amortization and gains or losses on the sale of assets. The Company also uses FFO as one measure in assessing its operating results.

Hotel EBITDA

Hotel EBITDA represents net income excluding: (1) interest expense, (2) income taxes, (3) depreciation and amortization, (4) corporate general and administrative expenses (shown as corporate expenses on the consolidated statements of operations), and (5) hotel acquisition costs. We believe that Hotel EBITDA provides our investors a useful financial measure to evaluate our hotel operating performance, excluding the impact of our capital structure (primarily interest), our asset base (primarily depreciation and amortization), and our corporate-level expenses (corporate expenses and hotel acquisition costs). With respect to Hotel EBITDA, we believe that excluding the effect of corporate-level expenses provides a more complete understanding of the operating results over which individual hotels and third-party management companies have direct control. We believe property-level results provide investors with supplemental information on the ongoing operational performance of our hotels and effectiveness of the third-party management companies operating our business on a property-level basis.

Adjustments to EBITDAre, FFO and Hotel EBITDA

We adjust EBITDAre, FFO and Hotel EBITDA when evaluating our performance because we believe that the exclusion of certain additional items described below provides useful supplemental information to investors regarding our ongoing operating performance and that the presentation of Adjusted EBITDA, Adjusted FFO and Hotel Adjusted EBITDA when combined with U.S. GAAP net income, EBITDAre, FFO and Hotel EBITDA, is beneficial to an investor's complete understanding of our consolidated and property-level operating performance. Hotel Adjusted EBITDA margins are calculated as Hotel Adjusted EBITDA divided by total hotel revenues. We adjust EBITDAre, FFO and Hotel EBITDA for the following items:

  • Non-Cash Lease Expense and Other Amortization: We exclude the non-cash expense incurred from the straight line recognition of expense from our ground leases and other contractual obligations and the non-cash amortization of our favorable and unfavorable contracts, originally recorded in conjunction with certain hotel acquisitions. We exclude these non-cash items because they do not reflect the actual cash amounts due to the respective lessors and service providers in the current period and they are of lesser significance in evaluating our actual performance for that period.

  • Cumulative Effect of a Change in Accounting Principle: The Financial Accounting Standards Board promulgates new accounting standards that require or permit the consolidated statement of operations to reflect the cumulative effect of a change in accounting principle. We exclude the effect of these adjustments, which include the accounting impact from prior periods, because they do not reflect the Company's actual underlying performance for the current period.

  • Gains or Losses from Early Extinguishment of Debt: We exclude the effect of gains or losses recorded on the early extinguishment of debt because these gains or losses result from transaction activity related to the Company's capital structure that we believe are not indicative of the ongoing operating performance of the Company or our hotels.

  • Hotel Acquisition Costs: We exclude hotel acquisition costs expensed during the period because we believe these transaction costs are not reflective of the ongoing performance of the Company or our hotels.

  • Severance Costs: We exclude corporate severance costs, or reversals thereof, incurred with the termination of corporate-level employees and severance costs incurred at our hotels related to lease terminations or structured severance programs because we believe these costs do not reflect the ongoing performance of the Company or our hotels.

  • Hotel Manager Transition Items: We exclude the transition items associated with a change in hotel manager because we believe these items do not reflect the ongoing performance of the Company or our hotels.

  • Other Items: From time to time we incur costs or realize gains that we consider outside the ordinary course of business and that we do not believe reflect the ongoing performance of the Company or our hotels. Such items may include, but are not limited to, the following: pre-opening costs incurred with newly developed hotels; lease preparation costs incurred to prepare vacant space for marketing; management or franchise contract termination fees; gains or losses from legal settlements; costs incurred related to natural disasters; and gains on property insurance claim settlements, other than income related to business interruption insurance.

In addition, to derive Adjusted FFO we exclude any fair value adjustments to interest rate swaps. We exclude these non-cash amounts because they do not reflect the underlying performance of the Company.

Reconciliations of Non-GAAP Measures

EBITDA, EBITDAre and Adjusted EBITDA

The following tables are reconciliations of our GAAP net income to EBITDA, EBITDAre and Adjusted EBITDA (in thousands):


Three Months Ended June 30,


2021


2020


2019

Net (loss) income

$

(19,119)



$

(73,387)



$

29,074


Interest expense

10,710



11,629



12,418


Income tax (benefit) expense

(2,551)



(6,615)



4,571


Real estate related depreciation and amortization

24,692



28,783



29,335


EBITDA

13,732



(39,590)



75,398


Impairment losses

4,145






EBITDAre

17,877



(39,590)



75,398


Non-cash lease expense and other amortization

1,671



1,708



1,784


Professional fees and pre-opening costs related to Frenchman's Reef (1)

478



122



3,700


Hotel manager transition items



334



171


Severance costs (2)

(226)



393




Adjusted EBITDA

$

19,800



$

(37,033)



$

81,053



Six Months Ended June 30,


2021


2020


2019

Net (loss) income

$

(190,686)



$

(108,079)



$

38,054


Interest expense

19,194



32,847



24,080


Income tax (benefit) expense

(938)



(13,058)



722


Real estate related depreciation and amortization

51,654



58,883



58,331


EBITDA

(120,776)



(29,407)



121,187


Impairment losses

126,697






EBITDAre

5,921



(29,407)



121,187


Non-cash lease expense and other amortization

3,343



3,458



3,499


Professional fees and pre-opening costs related to Frenchman's Reef (1)

1,053



(175)



5,067


Hotel manager transition items

128



561



468


Severance costs (2)

(216)



393




Adjusted EBITDA

$

10,229



$

(25,170)



$

130,221




(1)

Represents pre-opening costs related to the re-opening of Frenchman's Reef, as well as legal and professional fees and other costs incurred at Frenchman's Reef as a result of Hurricane Irma that are not covered by insurance.

(2)

Consists of severance costs incurred with the elimination of positions at our hotels, which are classified within other hotel expenses on the consolidated statement of operations.

Hotel EBITDA and Hotel Adjusted EBITDA

The following table is a reconciliation of our GAAP net income to Hotel EBITDA and Hotel Adjusted EBITDA (in thousands):


Three Months Ended June 30,


2021


2020


2019

Net (loss) income

$

(19,119)



$

(73,387)



$

29,074


Interest expense

10,710



11,629



12,418


Income tax (benefit) expense

(2,551)



(6,615)



4,571


Real estate related depreciation and amortization

24,692



28,783



29,335


EBITDA

13,732



(39,590)



75,398


Corporate expenses

8,290



6,826



7,403


Interest and other (income) expense, net

(315)



(150)



(105)


Professional fees and pre-opening costs related to Frenchman's Reef (1)

478



122



3,700


Impairment losses

4,145






Hotel EBITDA

26,330



(32,792)



86,396


Non-cash lease expense and other amortization

1,671



1,708



1,784


Hotel manager transition items



334



171


Severance costs (2)

(226)



393




Hotel Adjusted EBITDA

$

27,775



$

(30,357)



$

88,351



Six Months Ended June 30,


2021


2020


2019

Net (loss) income

$

(190,686)



$

(108,079)



$

38,054


Interest expense

19,194



32,847



24,080


Income tax (benefit) expense

(938)



(13,058)



722


Real estate related depreciation and amortization

51,654



58,883



58,331


EBITDA

(120,776)



(29,407)



121,187


Corporate expenses

15,449



12,383



14,467


Interest and other (income) expense, net

(471)



249



(408)


Professional fees and pre-opening costs related to Frenchman's Reef (1)

1,053



(175)



5,067


Impairment losses

126,697






Hotel EBITDA

21,952



(16,950)



140,313


Non-cash lease expense and other amortization

3,343



3,458



3,499


Hotel manager transition items

128



561



468


Severance costs (2)

(216)



393




Hotel Adjusted EBITDA

$

25,207



$

(12,538)



$

144,280




(1)

Represents pre-opening costs related to the re-opening of Frenchman's Reef, as well as legal and professional fees and other costs incurred at Frenchman's Reef as a result of Hurricane Irma that are not covered by insurance.

(2)

Consists of severance costs incurred with the elimination of positions at our hotels, which are classified within other hotel expenses on the consolidated statement of operations.

FFO and Adjusted FFO

The following tables are reconciliations of our GAAP net income to FFO and Adjusted FFO (in thousands):


Three Months Ended June 30,


2021


2020


2019

Net (loss) income

$

(19,119)



$

(73,387)



$

29,074


Real estate related depreciation and amortization

24,692



28,783



29,335


Impairment losses, net of tax

6,945






FFO

12,518



(44,604)



58,409


Distribution to preferred stockholders

(2,454)






FFO available to common stock and unit holders

10,064



(44,604)



58,409


Non-cash lease expense and other amortization

1,671



1,708



1,784


Professional fees and pre-opening costs related to Frenchman's Reef (1)

478



122



3,700


Hotel manager transition items



334



171


Severance costs (2)

(226)



393




Fair value adjustments to interest rate swaps

(838)



1,000



1,075


Adjusted FFO available to common stock and unit holders

$

11,149



$

(41,047)



$

65,139


Adjusted FFO available to common stock and unit holders, per diluted share

$

0.05



$

(0.20)



$

0.32



Six Months Ended June 30,


2021


2020


2019

Net (loss) income

$

(190,686)



$

(108,079)



$

38,054


Real estate related depreciation and amortization

51,654



58,883



58,331


Impairment losses, net of tax

129,497






FFO

(9,535)



(49,196)



96,385


Distribution to preferred stockholders

(4,908)






FFO available to common stock and unit holders

(14,443)



(49,196)



96,385


Non-cash lease expense and other amortization

3,343



3,458



3,499


Professional fees and pre-opening costs related to Frenchman's Reef (1)

1,053



(175)



5,067


Hotel manager transition items

128



561



468


Severance costs (2)

(216)



393




Fair value adjustments to interest rate swaps

(3,569)



12,312



1,647


Adjusted FFO available to common stock and unit holders

$

(13,704)



$

(32,647)



$

107,066


Adjusted FFO available to common stock and unit holders, per diluted share

$

(0.06)



$

(0.16)



$

0.53




(1)

Represents pre-opening costs related to the re-opening of Frenchman's Reef, as well as legal and professional fees and other costs incurred at Frenchman's Reef as a result of Hurricane Irma that are not covered by insurance.

(2)

Consists of severance costs incurred with the elimination of positions at our hotels, which are classified within other hotel expenses on the consolidated statement of operations.

Reconciliation of Comparable Operating Results

The following presents the revenues, Hotel Adjusted EBITDA and Hotel Adjusted EBITDA Margin together with comparable prior year results, which excludes the results for our 2021 dispositions (in thousands):


Three Months Ended June 30,


2021


2020


2019

Revenues

$

124,791



$

20,379



$

257,918


Hotel revenues from sold hotels (1)

(18)



(56)



(18,275)


Comparable Revenues

$

124,773



$

20,323



$

239,643








Hotel Adjusted EBITDA

$

27,775



$

(30,357)



$

88,351


Hotel Adjusted EBITDA from sold hotels (1)

1,263



3,600



(4,895)


Comparable Hotel Adjusted EBITDA

$

29,038



$

(26,757)



$

83,456








Hotel Adjusted EBITDA Margin

22.26

%


(148.96)

%


34.26

%

Comparable Hotel Adjusted EBITDA Margin

23.27

%


(131.66)

%


34.83

%


Six Months Ended June 30,


2021


2020


2019

Revenues

$

197,728



$

190,374



$

460,293


Hotel revenues from sold hotels (1)

(60)



(8,703)



(29,534)


Comparable Revenues

$

197,668



$

181,671



$

430,759








Hotel Adjusted EBITDA

$

25,207



$

(12,538)



$

144,280


Hotel Adjusted EBITDA from sold hotels (1)

4,486



7,303



(12,815)


Comparable Hotel Adjusted EBITDA

$

29,693



$

(5,235)



$

131,465








Hotel Adjusted EBITDA Margin

12.75

%


(6.59)

%


31.35

%

Comparable Hotel Adjusted EBITDA Margin

15.02

%


(2.88)

%


30.52

%



(1)

Amounts represent the operating results of Frenchman's Reef and The Lexington Hotel.

Selected Quarterly Comparable Operating Information

The following tables are presented to provide investors with selected quarterly comparable operating information. The operating information includes historical quarterly operating results for our 31-hotel portfolio, which includes our 2021 acquisitions and excludes our 2021 dispositions.


Quarter 1, 2019

Quarter 2, 2019

Quarter 3, 2019

Quarter 4, 2019

Full Year 2019

ADR

$

219.47


$

248.90


$

236.57


$

241.30


$

237.05


Occupancy

72.7

%

82.5

%

81.6

%

76.0

%

78.2

%

RevPAR

$

159.65


$

205.33


$

192.99


$

183.45


$

185.44


Total RevPAR

$

240.00


$

297.31


$

271.43


$

265.12


$

268.54


Revenues (in thousands)

$

197,032


$

246,875


$

227,987


$

222,692


$

894,586


Hotel Adjusted EBITDA (in thousands)

$

49,794


$

86,216


$

70,566


$

65,256


$

271,832


Hotel Adjusted EBITDA Margin

25.27

%

34.92

%

30.95

%

29.30

%

30.39

%

Available Rooms

820,964


830,375


839,960


839,960


3,331,259



Quarter 1, 2020

Quarter 2, 2020

Quarter 3, 2020

Quarter 4, 2020

Full Year 2020

ADR

$

220.21


$

182.83


$

209.07


$

204.26


$

211.78


Occupancy

58.9

%

9.2

%

19.9

%

23.2

%

27.8

%

RevPAR

$

129.70


$

16.75


$

41.55


$

47.47


$

58.79


Total RevPAR

$

199.94


$

26.09


$

62.18


$

72.34


$

90.01


Revenues (in thousands)

$

166,112


$

21,677


$

52,231


$

60,760


$

300,780


Hotel Adjusted EBITDA (in thousands)

$

22,901


$

(27,200)


$

(14,259)


$

(4,727)


$

(23,285)


Hotel Adjusted EBITDA Margin

13.79

%

(125.48)

%

(27.30)

%

(7.78)

%

(7.74)

%

Available Rooms

830,830


830,830


839,960


839,960


3,341,580



Quarter 1, 2021

Quarter 2, 2021

ADR

$

217.87


$

221.73


Occupancy

28.6

%

48.3

%

RevPAR

$

62.25


$

107.09


Total RevPAR

$

90.13


$

153.37


Revenues (in thousands)

$

74,064


$

127,459


Hotel Adjusted EBITDA (in thousands)

$

(58)


$

29,569


Hotel Adjusted EBITDA Margin

(0.08)

%

23.20

%

Available Rooms

821,790


831,074



Market Capitalization as of June 30, 2021

(in thousands)

Enterprise Value






Common equity capitalization (at June 30, 2021 closing price of $9.70/share)


$

2,070,237


Preferred equity capitalization (at liquidation value of $25.00/share)


119,000


Consolidated debt (face amount)


990,141


Cash and cash equivalents


(192,942)


Total enterprise value


$

2,986,436


Share Reconciliation






Common shares outstanding


210,304


Operating partnership units


956


Unvested restricted stock held by management and employees


1,424


Share grants under deferred compensation plan


1,698


Combined shares and units


214,382


Debt Summary as of June 30, 2021

(dollars in thousands)

Loan


Interest Rate as of June 30, 2021


Term


Outstanding Principal


Maturity

Salt Lake City Marriott Downtown at City Creek


LIBOR + 3.25 (1)


Variable


46,350



January 2022 (2)

Westin Washington D.C. City Center


3.99%


Fixed


57,106



January 2023

The Lodge at Sonoma Resort


3.96%


Fixed


25,966



April 2023

Westin San Diego Downtown


3.94%


Fixed


59,436



April 2023

Courtyard New York Manhattan / Midtown East


4.40%


Fixed


78,713



August 2024

Worthington Renaissance Fort Worth Hotel


3.66%


Fixed


78,338



May 2025

JW Marriott Denver Cherry Creek


4.33%


Fixed


59,423



July 2025

Westin Boston Seaport District


4.36%


Fixed


184,809



November 2025

Unamortized debt issuance costs






(2,169)




Total mortgage and other debt, net of unamortized debt issuance costs






587,972













Unsecured term loan


LIBOR + 2.40% (3)


Variable


350,000



July 2024

Unsecured term loan


LIBOR + 2.40% (4)


Fixed


50,000



October 2023

Unamortized debt issuance costs






(1,725)




Unsecured term loans, net of unamortized debt issuance costs




398,275













Senior unsecured credit facility


LIBOR + 2.55% (5)


Variable




July 2023 (6)










Total debt, net of unamortized debt issuance costs






$

986,247




Weighted-average interest rate of fixed rate debt


4.25

%







Total weighted-average interest rate


3.97

%



















(1)

LIBOR is subject to a floor of 1.0%.

(2)

The loan may be extended for an additional year upon satisfaction of certain conditions.

(3)

The Company entered into an interest rate swap agreement in July 2019 to fix LIBOR at 1.70% for $175 million of the term loan through July 2024. LIBOR is subject to a floor of 0.25%.

(4)

The Company entered into an interest rate swap agreement in January 2019 to fix LIBOR at 2.41% through October 2023.

(5)

LIBOR is subject to a floor of 0.25%.

(6)

May be extended for an additional year upon the payment of applicable fees and the satisfaction of certain customary conditions.



Monthly Operating Statistics (1)


Number of Rooms

ADR


Occupancy


RevPAR


April 2021

April 2020

B/(W) 2020


April 2021

April 2020

B/(W) 2020


April 2021

April 2020

B/(W) 2020














Total Open for Entire Period - 26 Hotels

7,207


$

226.38


$

123.03


84.0

%


47.1

%

7.2

%

39.9

%


$

106.52


$

8.90


1,096.9

%














Resorts - 12 Hotels

2,215


$

343.72


$

65.76


422.7

%


64.3

%

6.3

%

58.0

%


$

220.87


$

4.14


5,235.0

%














Total - 29 Hotels

8,878


$

224.72


$

122.82


83.0

%


39.1

%

5.9

%

33.2

%


$

87.81