Xenia Hotels & Resorts Reports Fourth Quarter And Full Year 2023 Results
Fourth Quarter 2023 Highlights
-
Net Income: Net income attributable to common stockholders was
$7.6 million , or$0.07 per share -
Adjusted EBITDAre:
$59.4 million , decreased 8.0% compared to the fourth quarter of 2022 -
Adjusted FFO per Diluted Share:
$0.41 , flat compared to the fourth quarter of 2022 - Same-Property Occupancy: 61.9%, decreased 50 basis points compared to the fourth quarter of 2022
-
Same-Property ADR:
$254.56 , decreased 2.7% compared to the fourth quarter of 2022 -
Same-Property RevPAR:
$157.69 , decreased 3.4% compared to the fourth quarter of 2022. ExcludingHyatt Regency Scottsdale Resort & Spa atGainey Ranch , which is undergoing a transformative renovation, RevPAR was$162.51 , an increase of 1.2% compared to the fourth quarter of 2022. -
Same-Property Hotel Net Income :$30.0 million , decreased 8.0% compared to the fourth quarter of 2022. ExcludingHyatt Regency Scottsdale Resort & Spa atGainey Ranch ,Hotel Net Income was$31.0 million , an increase of 14.9% compared to the fourth quarter of 2022. -
Same-Property Hotel EBITDA :$63.7 million , decreased 8.4% compared to the fourth quarter of 2022. ExcludingHyatt Regency Scottsdale Resort & Spa atGainey Ranch ,Same-Property Hotel EBITDA was$63.4 million , an increase of 2.5% compared to the fourth quarter of 2022. -
Same-Property Hotel EBITDA Margin : 25.1%, decreased 162 basis points compared to the fourth quarter of 2022. ExcludingHyatt Regency Scottsdale Resort & Spa atGainey Ranch ,Hotel EBITDA Margin was 25.7%, a decrease of 10 basis points compared to the fourth quarter of 2022. -
Capital Markets Activities & Dividends: The Company repurchased a total of 3,897,777 shares of common stock at a weighted-average price of
$12.57 per share for a total consideration of approximately$49.0 million . The Company also declared its fourth quarter dividend of$0.10 per share to common stockholders of record onDecember 29, 2023 .
"We are pleased that our Adjusted EBITDAre and Adjusted FFO per share exceeded our expectations for the fourth quarter, despite our ongoing transformative renovation at
"Reflecting on 2023, our overall performance was supported by ongoing asset management initiatives as lodging demand across our markets started to normalize. We benefited from good cost control during a time of continued expense pressures and normalization of staffing levels at our assets. On the project management side, we completed several important capital projects, including comprehensive renovations at Kimpton Canary Hotel Santa Barbara,
Full Year 2023 Highlights
-
Net Income: Net income attributable to common stockholders was
$19.1 million , or$0.17 per share -
Adjusted EBITDAre:
$251.7 million , decreased 2.0% compared to 2022 -
Adjusted FFO per Diluted Share:
$1.54 , flat compared to 2022 - Same-Property Occupancy: 65.1%, increased 250 basis points compared to 2022
-
Same-Property ADR:
$260.40 , approximately flat compared to 2022 -
Same-Property RevPAR:
$169.46 , increased 3.9% compared to 2022. ExcludingHyatt Regency Scottsdale Resort & Spa atGainey Ranch , RevPAR was$170.57 , an increase of 6.4% compared to 2022. -
Same-Property Hotel Net Income :$130.4 million , increased 0.1% compared to 2022. ExcludingHyatt Regency Scottsdale Resort & Spa atGainey Ranch ,Hotel Net Income was$121.5 million , an increase of 7.8% compared to 2022. -
Same-Property Hotel EBITDA :$271.5 million , decreased 1.5% compared to 2022. ExcludingHyatt Regency Scottsdale Resort & Spa atGainey Ranch ,Same-Property Hotel EBITDA was$254.7 million , an increase of 3.5% compared to 2022. -
Same-Property Hotel EBITDA Margin : 26.5%, decreased 153 basis points compared to 2022. ExcludingHyatt Regency Scottsdale Resort & Spa atGainey Ranch ,Hotel EBITDA Margin was 26.2%, a decrease of 92 basis points compared to 2022. -
Financing Activity: Entered into a new
$675 million credit facility in the first quarter, proceeds of which were used to pay off the a$125 million term loan and a$99.5 million mortgage loan collateralized byRenaissance Atlanta Waverly Hotel & Convention Center . The mortgage loan collateralized by Andaz Napa was also amended, extending its maturity throughJanuary 2028 . In the second quarter, the variable Term SOFR index on all outstanding variable debt was hedged to fixed. -
Capital Markets Activities & Dividends: The Company repurchased a total of 10,414,262 shares of common stock at a weighted-average price of
$12.74 per share for a total consideration of approximately$132.7 million . The Company also repurchased, and subsequently retired, a total of approximately$35.3 million in the aggregate principal amount of its 6.375% Senior Notes dueAugust 2025 . For the full year 2023, the Company declared a total of$0.40 of dividends per share to common stockholders.
"Despite a challenging operating environment and various renovation activity, for the full-year 2023, our Same-Property portfolio achieved a 6.4% RevPAR increase when excluding results at
"We are excited about further opportunities for growth in 2024 and beyond as we expect to benefit from continued recovery across our portfolio, improving results of recently acquired properties, and favorable returns on several meaningful capital projects. We believe that our diversified portfolio will continue to benefit from the expected recovery in business transient and group demand as the year progresses. Additionally, the transformation of
Operating Results
The Company's results include the following:
|
Three Months Ended |
|
|
||
|
2023 |
|
2022 |
|
Change |
|
($ amounts in thousands, except hotel statistics and per share amounts) |
||||
Net income attributable to common stockholders |
$ 7,599 |
|
$ 35,261 |
|
(78.4) % |
Net income per share available to common stockholders - basic and |
$ 0.07 |
|
$ 0.31 |
|
(77.4) % |
|
|
|
|
|
|
Same-Property Number of Hotels(1) |
32 |
|
32 |
|
— |
Same-Property Number of Rooms(1)(5) |
9,514 |
|
9,508 |
|
6 |
Same-Property Occupancy(1) |
61.9 % |
|
62.4 % |
|
(50) bps |
Same-Property Average Daily Rate(1) |
$ 254.56 |
|
$ 261.70 |
|
(2.7) % |
Same-Property RevPAR(1) |
$ 157.69 |
|
$ 163.32 |
|
(3.4) % |
|
$ 29,955 |
|
$ 32,557 |
|
(8.0) % |
|
$ 63,705 |
|
$ 69,533 |
|
(8.4) % |
|
25.1 % |
|
26.8 % |
|
(162) bps |
|
|
|
|
|
|
Total Portfolio Number of Hotels(3) |
32 |
|
32 |
|
— |
Total Portfolio Number of Rooms(3)(5) |
9,514 |
|
9,508 |
|
6 |
Total Portfolio RevPAR(4) |
$ 157.69 |
|
$ 162.93 |
|
(3.2) % |
|
|
|
|
|
|
Adjusted EBITDAre(2) |
$ 59,442 |
|
$ 64,583 |
|
(8.0) % |
Adjusted FFO(2) |
$ 44,045 |
|
$ 46,608 |
|
(5.5) % |
Adjusted FFO per diluted share(2) |
$ 0.41 |
|
$ 0.41 |
|
— % |
1. |
"Same-Property" includes all hotels owned as of |
|
|
2. |
EBITDA, EBITDAre, Adjusted EBITDAre, FFO, Adjusted FFO, and |
|
|
3. |
As of end of periods presented. |
|
|
4. |
Results of all hotels as owned during the periods presented, including the results of hotels sold or acquired for the actual period of ownership by the Company. |
|
|
5. |
Three rooms were added at The Ritz-Carlton, |
|
Year Ended |
|
|||
|
2023 |
|
2022 |
|
Change |
|
($ amounts in thousands, except hotel statistics and per share amounts) |
||||
Net income attributable to common stockholders |
$ 19,142 |
|
$ 55,922 |
|
(65.8) % |
Net income per share available to common stockholders - basic and |
$ 0.17 |
|
$ 0.49 |
|
(65.3) % |
|
|
|
|
|
|
Same-Property Number of Hotels(1) |
32 |
|
32 |
|
— |
Same-Property Number of Rooms(1)(5) |
9,514 |
|
9,508 |
|
6 |
Same-Property Occupancy(1) |
65.1 % |
|
62.6 % |
|
250 bps |
Same-Property Average Daily Rate(1) |
$ 260.40 |
|
$ 260.52 |
|
— % |
Same-Property RevPAR(1) |
$ 169.46 |
|
$ 163.11 |
|
3.9 % |
|
$ 130,379 |
|
$ 130,247 |
|
0.1 % |
|
$ 271,513 |
|
$ 275,614 |
|
(1.5) % |
|
26.5 % |
|
28.0 % |
|
(153) bps |
|
|
|
|
|
|
Total Portfolio Number of Hotels(3) |
32 |
|
32 |
|
— |
Total Portfolio Number of Rooms(3)(5) |
9,514 |
|
9,508 |
|
6 |
Total Portfolio RevPAR(4) |
$ 169.46 |
|
$ 162.75 |
|
4.1 % |
|
|
|
|
|
|
Adjusted EBITDAre(2) |
$ 251,740 |
|
$ 256,988 |
|
(2.0) % |
Adjusted FFO(2) |
$ 170,211 |
|
$ 177,316 |
|
(4.0) % |
Adjusted FFO per diluted share(2) |
$ 1.54 |
|
$ 1.54 |
|
— % |
1. |
"Same-Property" includes all hotels owned as of |
|
|
2. |
EBITDA, EBITDAre, Adjusted EBITDAre, FFO, Adjusted FFO, and |
|
|
3. |
As of end of periods presented. |
|
|
4. |
Results of all hotels as owned during the periods presented, including the results of hotels sold or acquired for the actual period of ownership by the Company. |
|
|
5. |
Three rooms were added at The Ritz-Carlton, |
Liquidity and Balance Sheet
As of
In
The Company has no debt maturities until
Capital Markets
In the quarter, the Company repurchased a total of 3,897,777 shares of common stock at a weighted-average price of
The Company repurchased 463,707 shares of common stock year-to-date through
The Company did not issue any shares of its common stock through its At-The-Market ("ATM") program in the quarter and had
For the year ended
First Quarter 2024 Dividend
The Company's Board of Directors has increased the quarterly cash dividend by 20% to
Capital Expenditures
During the quarter and year ended
-
Grand Bohemian Hotel Orlando , Autograph Collection – Earlier in the year, completed the comprehensive renovation of public spaces including meeting space, lobby, restaurant, bar, Starbucks, and creation of a rooftop bar. A comprehensive renovation of the guest rooms began in the second quarter and was completed in November. -
Park Hyatt Aviara Resort ,Golf Club & Spa – Completed the significant upgrade to the resort's spa and wellness amenities which have reopened as a Miraval Life inBalance Spa . -
Kimpton Hotel Monaco Salt Lake City – Completed the comprehensive renovation of meeting space, lobby, restaurant, bar and guest rooms in the third quarter. -
Kimpton Canary Hotel Santa Barbara – Completed the comprehensive guest room renovation in the second quarter. -
The Ritz-Carlton,
Denver – Completed the renovation and reconfiguration of premium suites resulting in the addition of three keys in the second quarter. - Waldorf Astoria Atlanta Buckhead – Substantially completed the renovation of meeting rooms.
In June, the Company commenced the approximately
- Pool complex, pool bars, and amenities – Full renovation, including significant redesign of the pool, pool deck, and pool bars. The adult pool and H2Oasis pool bar were completed in mid-January and the remainder of the pool complex is expected to be completed and fully operational by the end of the first quarter.
- Guest rooms and corridors – Full renovation of all guest rooms including new case goods, soft goods, and fan coil units. In order to minimize disruption, guest rooms are being completed on a continual phased basis with over 150 already completed, and the remaining, including the addition of five guest rooms, expected to be completed by the end of the third quarter.
-
Arizona Ballroom expansion and meeting space renovation – Expansion of theArizona Ballroom by approximately 12,000 square feet. Renovation of existing ballrooms, meeting rooms, and pre-function spaces, all expected to be completed by the end of 2024. - Public spaces and food & beverage outlets – Major renovation of all areas, including lobby, reconcepting and redesign of all food & beverage venues, including the addition of a specialty dining venue, expanded outdoor dining space, all expected to be completed by the end of the third quarter.
- Building façade, infrastructure, and grounds – Redesign of several elements of the building façade, replacement of all exterior lighting, redesign of existing solar panels, new exterior signage, and a redesign of the parking facilities, all expected to be completed by the end of 2024.
Full Year 2024 Outlook and Guidance
The Company is providing its full year 2024 outlook. The range below reflects the Company's limited visibility in forecasting due to macroeconomic uncertainty and is based on the current economic environment and does not take into account any unanticipated impacts to the business or operations. Furthermore, this guidance assumes no additional acquisitions, dispositions, equity issuances, or share and/or senior note repurchases. The Same-Property (32 Hotel) RevPAR change shown includes all hotels owned as of
|
Full Year 2024 Guidance |
|
|
Low End |
High End |
|
($ in millions, except stats and |
|
Net Income |
|
|
Same-Property (32 Hotel) RevPAR Change (vs. 2023) |
2.0 % |
5.0 % |
Excluding
|
2.5 % |
5.5 % |
Adjusted EBITDAre |
|
|
Adjusted FFO |
|
|
Adjusted FFO per Diluted Share |
|
|
Capital Expenditures |
|
|
Full year 2024 guidance is inclusive of the following assumptions:
- Disruption due to renovations is expected to negatively impact Adjusted EBITDAre and Adjusted FFO by approximately
$14 million , or approximately$4 million less than the impact of disruption due to renovations in 2023 - General and administrative expense of approximately
$25 million , excluding non-cash share-based compensation - Interest expense of approximately
$77 million , excluding non-cash loan related costs - Income tax expense of approximately
$2 million -
$65 -$70 million of capital expenditures forHyatt Regency Scottsdale Resort & Spa atGainey Ranch - 104.0 million weighted-average diluted shares/units
Supplemental Financial Information
Please refer to the Company's Supplemental Financial Information package for the Fourth Quarter 2023 available online through the Press Release section of the Company's Investor Relations website for additional financial information.
Fourth Quarter 2023 Earnings Call
The Company will conduct its quarterly conference call on
About
This press release, together with other statements and information publicly disseminated by the Company, contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The Company intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and includes this statement for purposes of complying with these safe harbor provisions. Forward-looking statements are not historical facts but are based on certain assumptions of management and describe the Company's future plans, strategies and expectations. Forward-looking statements are generally identifiable by use of words such as "may," "could," "expect," "intend," "plan," "seek," "anticipate," "believe," "estimate," "guidance," "predict," "potential," "continue," "likely," "will," "would," "illustrative," references to "outlook" and "guidance" and variations of these terms and similar expressions, or the negative of these terms or similar expressions. Forward-looking statements in this press release include, among others, statements about our plans, strategies, or other future events, the outlook related to macroeconomic factors and general economic uncertainty and a potential contraction in the
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
All information in this press release is as of the date of its release. 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.
Availability of Information on Xenia's Website
Investors and others should note that Xenia routinely announces material information to investors and the marketplace using
For additional information or to receive press releases via email, please visit our website at www.xeniareit.com.
Consolidated Balance Sheets
As of ($ amounts in thousands, except per share data) |
|||
|
|||
|
|
|
|
Assets |
(Unaudited) |
|
(Audited) |
Investment properties: |
|
|
|
Land |
$ 460,307 |
|
$ 460,536 |
Buildings and other improvements |
3,097,711 |
|
3,086,785 |
Total |
$ 3,558,018 |
|
$ 3,547,321 |
Less: accumulated depreciation |
(963,052) |
|
(945,786) |
Net investment properties |
$ 2,594,966 |
|
$ 2,601,535 |
Cash and cash equivalents |
164,725 |
|
305,103 |
Restricted cash and escrows |
58,350 |
|
60,807 |
Accounts and rents receivable, net of allowance for doubtful accounts |
32,432 |
|
37,562 |
Intangible assets, net of accumulated amortization |
4,898 |
|
5,060 |
Other assets |
46,856 |
|
69,988 |
Total assets |
$ 2,902,227 |
|
$ 3,080,055 |
Liabilities |
|
|
|
Debt, net of loan premiums, discounts and unamortized deferred financing costs |
$ 1,394,906 |
|
$ 1,429,105 |
Accounts payable and accrued expenses |
102,389 |
|
107,097 |
Distributions payable |
10,788 |
|
11,455 |
Other liabilities |
76,647 |
|
72,390 |
Total liabilities |
$ 1,584,730 |
|
$ 1,620,047 |
Commitments and Contingencies |
|
|
|
Stockholders' equity |
|
|
|
Common stock, |
$ 1,024 |
|
$ 1,126 |
Additional paid in capital |
1,934,775 |
|
2,063,273 |
Accumulated other comprehensive income |
2,439 |
|
— |
Accumulated distributions in excess of net earnings |
(647,246) |
|
(623,216) |
|
$ 1,290,992 |
|
$ 1,441,183 |
Non-controlling interests |
26,505 |
|
18,825 |
Total equity |
$ 1,317,497 |
|
$ 1,460,008 |
Total liabilities and equity |
$ 2,902,227 |
|
$ 3,080,055 |
Consolidated Statements of Operations and Comprehensive Income
For the Three Months and Years Ended ($ amounts in thousands, except per share data) |
|||||||
|
|||||||
|
Three Months Ended |
|
Year Ended |
||||
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
(Unaudited) |
|
(Unaudited) |
|
(Unaudited) |
|
(Audited) |
Revenues: |
|
|
|
|
|
|
|
Rooms revenues |
$ 138,023 |
|
$ 144,897 |
|
$ 588,278 |
|
$ 576,279 |
Food and beverage revenues |
94,142 |
|
97,123 |
|
354,114 |
|
337,792 |
Other revenues |
21,215 |
|
21,121 |
|
83,051 |
|
83,536 |
Total revenues |
$ 253,380 |
|
$ 263,141 |
|
$ 1,025,443 |
|
$ 997,607 |
Expenses: |
|
|
|
|
|
|
|
Rooms expenses |
36,408 |
|
35,786 |
|
145,274 |
|
137,589 |
Food and beverage expenses |
61,516 |
|
62,595 |
|
235,961 |
|
224,391 |
Other direct expenses |
5,920 |
|
6,032 |
|
23,467 |
|
23,847 |
Other indirect expenses |
65,937 |
|
68,483 |
|
263,833 |
|
249,992 |
Management and franchise fees |
8,417 |
|
8,698 |
|
35,235 |
|
36,456 |
Total hotel operating expenses |
$ 178,198 |
|
$ 181,594 |
|
$ 703,770 |
|
$ 672,275 |
Depreciation and amortization |
31,698 |
|
33,521 |
|
132,023 |
|
132,648 |
Real estate taxes, personal property taxes and insurance |
12,295 |
|
10,936 |
|
50,491 |
|
44,388 |
Ground lease expense |
771 |
|
758 |
|
3,016 |
|
2,793 |
General and administrative expenses |
8,839 |
|
8,409 |
|
37,219 |
|
34,250 |
Gain on business interruption insurance |
— |
|
— |
|
(218) |
|
(2,487) |
Other operating expenses |
714 |
|
1,070 |
|
1,530 |
|
1,070 |
Impairment and other losses |
— |
|
— |
|
— |
|
1,278 |
Total expenses |
$ 232,515 |
|
$ 236,288 |
|
$ 927,831 |
|
$ 886,215 |
Operating income |
$ 20,865 |
|
$ 26,853 |
|
$ 97,612 |
|
$ 111,392 |
Gain on sale of investment properties |
— |
|
27,286 |
|
— |
|
27,286 |
Other income |
3,683 |
|
1,507 |
|
9,895 |
|
4,178 |
Interest expense |
(20,689) |
|
(21,253) |
|
(84,997) |
|
(82,727) |
Loss on extinguishment of debt |
— |
|
— |
|
(1,189) |
|
(294) |
Net income before income taxes |
$ 3,859 |
|
$ 34,393 |
|
$ 21,321 |
|
$ 59,835 |
Income tax (expense) benefit |
3,935 |
|
1,943 |
|
(1,447) |
|
(2,205) |
Net income |
$ 7,794 |
|
$ 36,336 |
|
$ 19,874 |
|
$ 57,630 |
Net income attributable to non-controlling interests |
(195) |
|
(1,075) |
|
(732) |
|
(1,708) |
Net income attributable to common stockholders |
$ 7,599 |
|
$ 35,261 |
|
$ 19,142 |
|
$ 55,922 |
Consolidated Statements of Operations and Comprehensive Income - Continued
For the Three Months and Years Ended ($ amounts in thousands, except per share data) |
|||||||
|
|||||||
|
Three Months Ended |
|
Year Ended |
||||
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
(Unaudited) |
|
(Unaudited) |
|
(Unaudited) |
|
(Audited) |
Basic and diluted income per share: |
|
|
|
|
|
||
Net income per share available to common stockholders - |
$ 0.07 |
|
$ 0.31 |
|
$ 0.17 |
|
$ 0.49 |
Weighted-average number of common shares (basic) |
104,767,518 |
|
113,273,383 |
|
108,192,148 |
|
114,068,733 |
Weighted-average number of common shares (diluted) |
104,980,819 |
|
113,515,951 |
|
108,412,485 |
|
114,418,177 |
|
|
|
|
|
|
|
|
Comprehensive income: |
|
|
|
|
|
|
|
Net income |
$ 7,794 |
|
$ 36,336 |
|
$ 19,874 |
|
$ 57,630 |
Other comprehensive income: |
|
|
|
|
|
|
|
Unrealized gain (loss) on interest rate derivative instruments |
(2,362) |
|
— |
|
5,220 |
|
2,932 |
Reclassification adjustment for amounts recognized in net |
(1,147) |
|
(97) |
|
(2,690) |
|
1,600 |
|
$ 4,285 |
|
$ 36,239 |
|
$ 22,404 |
|
$ 62,162 |
Comprehensive (income) loss attributable to non-controlling |
(26) |
|
3 |
|
(823) |
|
(2,151) |
Comprehensive income attributable to the Company |
$ 4,259 |
|
$ 36,242 |
|
$ 21,581 |
|
$ 60,011 |
Non-GAAP Financial Measures
The Company considers the following non-GAAP financial measures to be useful to investors as key supplemental measures of its operating performance: EBITDA, EBITDAre, Adjusted EBITDAre,
EBITDA, EBITDAre and Adjusted EBITDAre
EBITDA is a commonly used measure of performance in many industries and is defined as net income or loss (calculated in accordance with GAAP) excluding interest expense, provision for income taxes (including income taxes applicable to sale of assets) and depreciation and amortization. The Company considers EBITDA useful to investors in evaluating and facilitating comparisons of its 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, even though EBITDA does not represent an amount that accrues directly to common stockholders. In addition, EBITDA is used as one measure in determining the value of hotel acquisitions and dispositions and, along with FFO and Adjusted FFO, is used by management in the annual budget process for compensation programs.
The Company calculates EBITDAre in accordance with standards established by the
The Company further adjusts EBITDAre to exclude the impact of non-controlling interests in consolidated entities other than its Operating Partnership Units because its Operating Partnership Units may be redeemed for common stock. The Company also adjusts EBITDAre for certain additional items such as depreciation and amortization related to corporate assets, terminated transaction and pre-opening expenses, amortization of share-based compensation, non-cash ground rent and straight-line rent expense, the cumulative effect of changes in accounting principles, and other costs it believes do not represent recurring operations and are not indicative of the performance of its underlying hotel property entities. The Company believes it is meaningful for investors to understand Adjusted EBITDAre attributable to all common stock and unit holders. The Company believes Adjusted EBITDAre attributable to common stock and unit holders provides investors with another useful financial measure in evaluating and facilitating comparison of operating performance between periods and between REITs that report similar measures.
Same-Property hotel data includes the actual operating results for all hotels owned as of the end of the reporting period. The Company then adjusts the Same-Property hotel data for comparability purposes by including pre-acquisition operating results of asset(s) acquired during the period, which provides investors a basis for understanding the acquisition(s) historical operating trends and seasonality. The pre-acquisition operating results for the comparable period are obtained from the seller and/or manager of the hotel(s) during the acquisition due diligence process and have not been audited or reviewed by our independent auditors. The Company further adjusts the Same-Property hotel data to remove dispositions during the respective reporting periods, and, in certain cases, hotels that are not fully open due to significant renovation, re-positioning, or disruption or whose room counts have materially changed during either the current or prior year as these historical operating results are not indicative of or expected to be comparable to the operating performance of the hotel portfolio on a prospective basis.
As a result of these adjustments the Same-Property hotel data presented does not represent the Company's total revenues, expenses, operating profit or net income and should not be used to evaluate performance as a whole. Management compensates for these limitations by separately considering the impact of these excluded items to the extent they are material to operating decisions or assessments of operating performance. Our consolidated statements of operations and comprehensive income include such amounts, all of which should be considered by investors when evaluating our performance.
We include Same-Property hotel data as supplemental information for investors. Management believes that providing Same-Property hotel data is useful to investors because it represents comparable operations for our portfolio as it exists at the end of the respective reporting periods presented, which allows investors and management to evaluate the period-to-period performance of our hotels and facilitates comparisons with other hotel REITs and hotel owners. In particular, these measures assist management and investors in distinguishing whether increases or decreases in revenues and/or expenses are due to growth or decline of operations at Same-Property hotels or from other factors, such as the effect of acquisitions or dispositions.
FFO and Adjusted FFO
The Company calculates FFO in accordance with standards established by Nareit, as amended in the 2018 Restatement White Paper, which defines FFO as net income or loss (calculated in accordance with GAAP), excluding real estate-related depreciation, amortization and impairments, gains or losses from sales of real estate, the cumulative effect of changes in accounting principles, similar adjustments for unconsolidated partnerships and consolidated variable interest entities, and items classified by GAAP as extraordinary. Historical cost accounting for real estate assets implicitly assumes that the value of real estate assets diminishes predictably over time. Since real estate values instead have historically risen or fallen with market conditions, most industry investors consider presentations of operating results for real estate companies that use historical cost accounting to be insufficient by themselves. The Company believes that the presentation of FFO provides useful supplemental information to investors regarding operating performance by excluding the effect of real estate depreciation and amortization, gains or losses from sales for real estate, impairments of real estate assets, extraordinary items and the portion of these items related to unconsolidated entities, all of which are based on historical cost accounting and which may be of lesser significance in evaluating current performance. The Company believes that the presentation of FFO can facilitate comparisons of operating performance between periods and between REITs, even though FFO does not represent an amount that accrues directly to common stockholders. The calculation of FFO may not be comparable to measures calculated by other companies who do not use the Nareit definition of FFO or do not calculate FFO per diluted share in accordance with Nareit guidance. Additionally, FFO may not be helpful when comparing Xenia to non-REITs. The Company presents FFO attributable to common stock and unit holders, which includes its Operating Partnership Units because its Operating Partnership Units may be redeemed for common stock. The Company believes it is meaningful for investors to understand FFO attributable to common stock and unit holders.
The Company further adjusts FFO for certain additional items that are not in Nareit's definition of FFO such as terminated transaction and pre-opening expenses, amortization of debt origination costs and share-based compensation, non-cash ground rent and straight-line rent expense, and other items we believe do not represent recurring operations. The Company believes that Adjusted FFO provides investors with useful supplemental information that may facilitate comparisons of ongoing operating performance between periods and between REITs that make similar adjustments to FFO and is beneficial to investors' complete understanding of our operating performance.
Adjusted FFO per diluted share
The diluted weighted-average common share count used for the calculation of Adjusted FFO per diluted share differs from diluted weighted-average common share count used to derive net income or loss per share available to common stockholders. The Company calculates Adjusted FFO per diluted share by dividing the Adjusted FFO by the diluted weighted-average number of shares of common stock outstanding plus the weighted-average vested Operating Partnership Units. Any anti-dilutive securities are excluded from the diluted earnings per share calculation.
Reconciliation of Net Income to EBITDA, EBITDAre, Adjusted EBITDAre and
For the Three Months Ended (Unaudited) ($ amounts in thousands) |
|||
|
|||
|
Three Months Ended |
||
|
2023 |
|
2022 |
Net income |
$ 7,794 |
|
$ 36,336 |
Adjustments: |
|
|
|
Interest expense |
20,689 |
|
21,253 |
Income tax benefit |
(3,935) |
|
(1,943) |
Depreciation and amortization |
31,698 |
|
33,521 |
EBITDA |
$ 56,246 |
|
$ 89,167 |
Gain on sale of investment properties |
— |
|
(27,286) |
EBITDAre |
$ 56,246 |
|
$ 61,881 |
|
|
|
|
Reconciliation to Adjusted EBITDAre |
|
|
|
Depreciation and amortization related to corporate assets |
$ (78) |
|
$ (133) |
Amortization of share-based compensation expense |
3,307 |
|
2,813 |
Non-cash ground rent and straight-line rent expense |
(33) |
|
9 |
Other non-recurring expenses |
— |
|
13 |
Adjusted EBITDAre attributable to common stock and unit holders |
$ 59,442 |
|
$ 64,583 |
Corporate-level costs and expenses |
4,355 |
|
5,818 |
Pro forma hotel adjustments, net(1) |
(92) |
|
(868) |
|
$ 63,705 |
|
$ 69,533 |
1. |
Includes adjustments for revenues and expenses from hotels that were acquired or sold during the periods presented. |
|
|
2. |
See the reconciliation of Total Revenues and |
Reconciliation of Net Income to EBITDA, EBITDAre, Adjusted EBITDAre and
For the Years Ended (Unaudited) ($ amounts in thousands) |
|||
|
|||
|
Year Ended |
||
|
2023 |
|
2022 |
Net income |
$ 19,874 |
|
$ 57,630 |
Adjustments: |
|
|
|
Interest expense |
84,997 |
|
82,727 |
Income tax expense |
1,447 |
|
2,205 |
Depreciation and amortization |
132,023 |
|
132,648 |
EBITDA |
$ 238,341 |
|
$ 275,210 |
Gain on sale of investment properties |
— |
|
(27,286) |
EBITDAre |
$ 238,341 |
|
$ 247,924 |
|
|
|
|
Reconciliation to Adjusted EBITDAre |
|
|
|
Depreciation and amortization related to corporate assets |
$ (348) |
|
$ (444) |
Gain on insurance recoveries(1) |
(535) |
|
(3,550) |
Loss on extinguishment of debt |
1,189 |
|
294 |
Amortization of share-based compensation expense |
13,168 |
|
11,411 |
Non-cash ground rent and straight-line rent expense |
(75) |
|
44 |
Other non-recurring expenses(2) |
— |
|
1,309 |
Adjusted EBITDAre attributable to common stock and unit holders |
$ 251,740 |
|
$ 256,988 |
Corporate-level costs and expenses |
19,850 |
|
23,942 |
Pro forma hotel level adjustments, net(3) |
(77) |
|
(5,316) |
|
$ 271,513 |
|
$ 275,614 |
1. |
During the years ended |
|
|
2. |
During the year ended |
|
|
3. |
Includes adjustments for revenues and expenses from hotels that were acquired or sold during the periods presented. Includes pre-acquisition historical operating results for |
|
|
4. |
See the reconciliation of Total Revenues and |
Reconciliation of Net Income to FFO and Adjusted FFO
For the Three Months Ended (Unaudited) ($ amounts in thousands) |
|||
|
|||
|
Three Months Ended |
||
|
2023 |
|
2022 |
Net income |
$ 7,794 |
|
$ 36,336 |
Adjustments: |
|
|
|
Depreciation and amortization related to investment properties |
31,620 |
|
33,388 |
Gain on sale of investment properties |
— |
|
(27,286) |
FFO attributable to common stock and unit holders |
$ 39,414 |
|
$ 42,438 |
|
|
|
|
Reconciliation to Adjusted FFO |
|
|
|
Loan related costs, net of adjustment related to non-controlling interests(1) |
1,357 |
|
1,335 |
Amortization of share-based compensation expense |
3,307 |
|
2,813 |
Non-cash ground rent and straight-line rent expense |
(33) |
|
9 |
Other non-recurring expenses |
— |
|
13 |
Adjusted FFO attributable to common stock and unit holders |
$ 44,045 |
|
$ 46,608 |
Weighted-average shares outstanding - Diluted(2) |
106,643 |
|
114,621 |
Adjusted FFO per diluted share |
$ 0.41 |
|
$ 0.41 |
1. |
Loan related costs include amortization of debt premiums, discounts and deferred loan origination costs. |
|
|
2. |
Diluted weighted-average number of shares of common stock outstanding plus the weighted-average vested Operating Partnership Units for the respective periods presented in thousands. |
Reconciliation of Net Income to FFO and Adjusted FFO
For the Years Ended (Unaudited) ($ amounts in thousands) |
|||
|
|||
|
Year Ended |
||
|
2023 |
|
2022 |
Net income |
$ 19,874 |
|
$ 57,630 |
Adjustments: |
|
|
|
Depreciation and amortization related to investment properties |
131,675 |
|
132,204 |
Gain on sale of investment properties |
— |
|
(27,286) |
FFO attributable to common stock and unit holders |
$ 151,549 |
|
$ 162,548 |
|
|
|
|
Reconciliation to Adjusted FFO |
|
|
|
Gain on insurance recoveries(1) |
(535) |
|
(3,550) |
Loss on extinguishment of debt |
1,189 |
|
294 |
Loan related costs, net of adjustment related to non-controlling interests(2) |
4,915 |
|
5,260 |
Amortization of share-based compensation expense |
13,168 |
|
11,411 |
Non-cash ground rent and straight-line rent expense |
(75) |
|
44 |
Other non-recurring expenses(3) |
— |
|
1,309 |
Adjusted FFO attributable to common stock and unit holders |
$ 170,211 |
|
$ 177,316 |
Weighted-average shares outstanding - Diluted(4) |
110,187 |
|
115,490 |
Adjusted FFO per diluted share |
$ 1.54 |
|
$ 1.54 |
1. |
During the years ended |
|
|
2. |
Loan related costs included amortization of debt premiums, discounts and deferred loan origination costs. |
|
|
3. |
During the year ended |
|
|
4. |
Diluted weighted-average number of shares of common stock outstanding plus the weighted-average vested Operating Partnership Units for the respective periods presented in thousands. |
Reconciliation of Net Income to Adjusted EBITDAre for Full Year 2024 Guidance ($ amounts in millions) |
|
|
|
|
Guidance |
|
|
Net income |
$ 25 |
Adjustments: |
|
Interest expense(1) |
82 |
Income tax expense |
2 |
Depreciation and amortization |
132 |
EBITDA and EBITDAre |
$ 241 |
Amortization of share-based compensation expense |
13 |
Other |
— |
Adjusted EBITDAre |
$ 254 |
Reconciliation of Net Income to Adjusted FFO for Full Year 2024 Guidance ($ amounts in millions) |
|
|
|
|
Guidance |
|
|
Net income |
$ 25 |
Adjustments: |
|
Depreciation and amortization related to investment properties |
132 |
FFO |
$ 157 |
Amortization of share-based compensation expense |
13 |
Other(1) |
5 |
Adjusted FFO |
$ 175 |
1. |
Includes non-cash loan amortization costs. |
Debt Summary as of (Unaudited) ($ amounts in thousands) |
|||||||
|
|||||||
|
Rate Type |
|
Rate(1) |
|
Maturity Date |
|
Outstanding as |
|
|
|
|
|
|
|
|
Mortgage Loans |
|
|
|
|
|
|
|
|
Fixed |
|
4.53 % |
|
|
|
$ 54,522 |
|
Fixed |
|
4.63 % |
|
|
|
108,111 |
Andaz Napa(2) |
Fixed(2) |
|
5.72 % |
|
|
|
55,000 |
Total Mortgage Loans |
|
|
4.88 % |
(3) |
|
|
$ 217,633 |
Corporate Credit Facilities |
|
|
|
|
|
|
|
Corporate Credit Facility Term Loan(4) |
Fixed(5) |
|
5.50 % |
|
|
|
$ 125,000 |
Corporate Credit Facility Term Loan(4) |
Fixed(5) |
|
5.50 % |
|
|
|
100,000 |
Revolving Line of Credit(6) |
Variable |
|
7.11 % |
|
|
|
— |
Total Corporate Credit Facilities |
|
|
|
|
|
|
$ 225,000 |
2020 Senior Notes |
Fixed |
|
6.38 % |
|
|
|
464,747 |
2021 Senior Notes |
Fixed |
|
4.88 % |
|
|
|
500,000 |
Loan premiums, discounts and unamortized deferred |
|
|
|
|
|
|
(12,474) |
Total Debt, net of loan premiums, discounts and unamortized |
|
|
|
|
|
|
|
deferred financing costs |
|
|
5.47 % |
(3) |
|
|
$ 1,394,906 |
1. |
Represents annual interest rates. |
|
|
2. |
A variable interest loan for which SOFR has been fixed through |
|
|
3. |
Weighted-average interest rate. |
|
|
4. |
A variable interest loan for which the credit spread may vary, as it is determined by the Company's leverage ratio. |
|
|
5. |
A variable interest loan for which SOFR has been fixed through |
|
|
6. |
The Revolving Line of Credit had undrawn capacity of |
|
|
7. |
Includes loan premiums, discounts and deferred financing costs, net of accumulated amortization. |
Same-Property(1)
For the Three Months and Years Ended ($ amounts in thousands) |
|||||||||||
|
|||||||||||
|
Three Months Ended |
|
Year Ended |
||||||||
|
2023 |
|
2022 |
|
Change |
|
2023 |
|
2022 |
|
Change |
Same-Property Occupancy(1) |
61.9 % |
|
62.4 % |
|
(50) bps |
|
65.1 % |
|
62.6 % |
|
250 bps |
Same-Property Average Daily Rate(1) |
$ 254.56 |
|
$ 261.70 |
|
(2.7) % |
|
$ 260.40 |
|
$ 260.52 |
|
— % |
Same-Property RevPAR(1) |
$ 157.69 |
|
$ 163.32 |
|
(3.4) % |
|
$ 169.46 |
|
$ 163.11 |
|
3.9 % |
Same-Property Revenues(1): |
|
|
|
|
|
|
|
|
|
|
|
Rooms revenues |
$ 138,023 |
|
$ 142,800 |
|
(3.3) % |
|
$ 588,278 |
|
$ 566,093 |
|
3.9 % |
Food and beverage revenues |
94,142 |
|
96,064 |
|
(2.0) % |
|
354,133 |
|
335,346 |
|
5.6 % |
Other revenues |
21,215 |
|
20,940 |
|
1.3 % |
|
83,051 |
|
82,639 |
|
0.5 % |
Total Same-Property revenues |
$ 253,380 |
|
$ 259,804 |
|
(2.5) % |
|
$ 1,025,462 |
|
$ 984,078 |
|
4.2 % |
Same-Property Expenses(1): |
|
|
|
|
|
|
|
|
|
|
|
Rooms expenses |
$ 36,408 |
|
$ 35,290 |
|
3.2 % |
|
$ 145,239 |
|
$ 135,418 |
|
7.3 % |
Food and beverage expenses |
61,516 |
|
61,710 |
|
(0.3) % |
|
235,919 |
|
222,770 |
|
5.9 % |
Other direct expenses |
5,920 |
|
5,945 |
|
(0.4) % |
|
23,497 |
|
23,496 |
|
— % |
Other indirect expenses |
64,224 |
|
66,923 |
|
(4.0) % |
|
260,376 |
|
244,646 |
|
6.4 % |
Management and franchise fees |
8,417 |
|
8,556 |
|
(1.6) % |
|
35,235 |
|
35,664 |
|
(1.2) % |
Real estate taxes, personal property taxes and insurance |
12,406 |
|
11,076 |
|
12.0 % |
|
50,614 |
|
43,624 |
|
16.0 % |
Ground lease expense |
784 |
|
771 |
|
1.7 % |
|
3,069 |
|
2,846 |
|
7.8 % |
Total Same-Property hotel operating expenses |
$ 189,675 |
|
$ 190,271 |
|
(0.3) % |
|
$ 753,949 |
|
$ 708,464 |
|
6.4 % |
|
$ 63,705 |
|
$ 69,533 |
|
(8.4) % |
|
$ 271,513 |
|
$ 275,614 |
|
(1.5) % |
|
25.1 % |
|
26.8 % |
|
(162) bps |
26.5 % |
|
28.0 % |
|
(153) bps |
1. |
"Same-Property" includes all properties owned as of |
|
Three Months Ended |
|
Year Ended |
||||
|
2023 |
|
2022 |
|
2023 |
|
2022 |
Total Revenues - GAAP |
$ 253,380 |
|
$ 263,141 |
|
$ 1,025,443 |
|
$ 997,607 |
Pro forma hotel level adjustments(a) |
— |
|
(3,337) |
|
19 |
|
(13,529) |
Total Same-Property Revenues |
$ 253,380 |
|
$ 259,804 |
|
$ 1,025,462 |
|
$ 984,078 |
|
|
|
|
|
|
|
|
|
$ 178,198 |
|
$ 181,594 |
|
$ 703,770 |
|
$ 672,275 |
Real estate taxes, personal property taxes and insurance |
12,295 |
|
10,936 |
|
50,491 |
|
44,388 |
Ground lease expense, net(b) |
785 |
|
771 |
|
3,069 |
|
2,846 |
Other income |
(1,374) |
|
(32) |
|
(1,596) |
|
(227) |
Corporate-level costs and expenses |
(360) |
|
(540) |
|
(1,710) |
|
(1,808) |
Pro forma hotel level adjustments, net(a) |
131 |
|
(2,458) |
|
(75) |
|
(9,010) |
|
$ 189,675 |
|
$ 190,271 |
|
$ 753,949 |
|
$ 708,464 |
a. |
Includes adjustments for revenues and expenses from hotels that were acquired or sold during the periods presented. Includes pre-acquisition historical operating results for |
|
|
b. |
Excludes non-cash ground rent expense. |
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