• | Comparable Hotel2 Revenue Per Available Room (“RevPAR”) grew 2.4% to $53.04 |
• | Net Income of $49.7 million |
• | Adjusted EBITDA increased 5.0% to $172.8 million |
• | Adjusted Paired Share Income1 per diluted Paired Share of $0.31 |
• | Comparable Hotel RevPAR grew 2.3% to $49.44 |
• | Net income of $65.8 million |
• | Adjusted EBITDA increased 5.2% to $302.5 million |
• | Adjusted Paired Share Income per diluted Paired Share of $0.46 |
Full Year 2017 | Updated Outlook | Previous Outlook | |||||||||||||||||
in millions, except % | Low | High | Low | High | |||||||||||||||
Total Revenues | $ | 1,278 | $ | 1,303 | $ | 1,285 | $ | 1,310 | |||||||||||
Comparable RevPAR % Δ | 1.5% | 3.5% | 1.5% | 3.5% | |||||||||||||||
Net Income | $ | 161 | $ | 174 | $ | 175 | $ | 188 | |||||||||||
Adjusted EBITDA | $ | 620 | $ | 635 | $ | 625 | $ | 640 | |||||||||||
Adjusted EBITDA % Δ | 0.7% | 3.1% | 1.5% | 4.0% | |||||||||||||||
Depreciation and Amortization | $ | 233 | $ | 233 | $ | 233 | $ | 233 | |||||||||||
Net Interest Expense | $ | 130 | $ | 130 | $ | 130 | $ | 130 | |||||||||||
Effective Tax Rate | 23% | 24% | 23% | 24% | |||||||||||||||
Capital Expenditures | $ | 150 | $ | 180 | $ | 150 | $ | 180 |
Contacts | ||||
Investors: | Media: | |||
Rob Ballew | Terry Atkins | |||
(980) 345-1546 | (980) 345-1648 | |||
investorrelations@esa.com | tatkins@esa.com |
EXTENDED STAY AMERICA, INC. | ||||||||||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||||||
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2017 AND 2016 | ||||||||||||||||||||
(In thousands) | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||||||
June 30, | June 30, | |||||||||||||||||||
2017 | 2016 | % Variance | 2017 | 2016 | % Variance | |||||||||||||||
REVENUES: | ||||||||||||||||||||
$ | 332,608 | $ | 327,833 | 1.5% | Room revenues | $ | 618,416 | $ | 610,970 | 1.2% | ||||||||||
5,755 | 4,956 | 16.1% | Other hotel revenues | 10,938 | 9,377 | 16.6% | ||||||||||||||
338,363 | 332,789 | 1.7% | Total revenues | 629,354 | 620,347 | 1.5% | ||||||||||||||
OPERATING EXPENSES: | ||||||||||||||||||||
148,911 | 149,078 | (0.1)% | Hotel operating expenses | 290,571 | 294,638 | (1.4)% | ||||||||||||||
25,430 | 23,988 | 6.0% | General and administrative expenses | 51,737 | 48,940 | 5.7% | ||||||||||||||
57,804 | 55,011 | 5.1% | Depreciation and amortization | 115,475 | 108,319 | 6.6% | ||||||||||||||
7,934 | — | n/a | Impairment of long-lived assets | 20,357 | — | n/a | ||||||||||||||
240,079 | 228,077 | 5.3% | Total operating expenses | 478,140 | 451,897 | 5.8% | ||||||||||||||
(1,897 | ) | — | n/a | LOSS ON SALE OF HOTEL PROPERTIES | (1,897 | ) | — | n/a | ||||||||||||
2,055 | — | n/a | OTHER INCOME | 2,056 | 18 | 11,322.2% | ||||||||||||||
98,442 | 104,712 | (6.0)% | INCOME FROM OPERATIONS | 151,373 | 168,468 | (10.1)% | ||||||||||||||
1,073 | 114 | 841.2% | OTHER NON-OPERATING EXPENSE (INCOME) | (148 | ) | (764 | ) | (80.6)% | ||||||||||||
31,701 | 35,764 | (11.4)% | INTEREST EXPENSE, NET | 65,307 | 82,749 | (21.1)% | ||||||||||||||
65,668 | 68,834 | (4.6)% | INCOME BEFORE INCOME TAX EXPENSE | 86,214 | 86,483 | (0.3)% | ||||||||||||||
15,943 | 7,448 | 114.1% | INCOME TAX EXPENSE | 20,426 | 10,344 | 97.5% | ||||||||||||||
49,725 | 61,386 | (19.0)% | NET INCOME | 65,788 | 76,139 | (13.6)% | ||||||||||||||
2,050 | (657 | ) | (412.0)% | NET LOSS (INCOME) ATTRIBUTABLE TO NONCONTROLLING INTERESTS (1) | 9,088 | 1,636 | 455.5% | |||||||||||||
$ | 51,775 | $ | 60,729 | (14.7)% | NET INCOME ATTRIBUTABLE TO EXTENDED STAY AMERICA, INC COMMON SHAREHOLDERS | $ | 74,876 | $ | 77,775 | (3.7)% | ||||||||||
$ | 0.27 | $ | 0.30 | NET INCOME PER EXTENDED STAY AMERICA, INC. COMMON SHARE - DILUTED | $ | 0.39 | $ | 0.38 | ||||||||||||
193,944 | 201,689 | WEIGHTED-AVERAGE EXTENDED STAY AMERICA, INC. COMMON SHARES OUTSTANDING - DILUTED | 194,372 | 203,029 | ||||||||||||||||
(1) Noncontrolling interest in Extended Stay America, Inc. include approximately 43% and 45% of ESH REIT's common equity as of June 30, 2017 and 2016, respectively. | ||||||||||||||||||||
CONSOLIDATED BALANCE SHEET DATA | ||||||||||||||||||||
AS OF JUNE 30, 2017 AND DECEMBER 31, 2016 | ||||||||||||||||||||
(In thousands) | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
June 30, | December 31, | |||||||||||||||||||
2017 | 2016 | |||||||||||||||||||
Cash and cash equivalents | $ | 56,232 | $ | 84,158 | ||||||||||||||||
Restricted cash | $ | 21,325 | $ | 21,614 | ||||||||||||||||
Total assets | $ | 4,071,151 | $ | 4,180,304 | ||||||||||||||||
Total debt, net of unamortized deferred financing costs and debt discounts (2) | $ | 2,544,643 | $ | 2,606,476 | ||||||||||||||||
Total equity | $ | 1,325,029 | $ | 1,377,239 | ||||||||||||||||
(2) Unamortized deferred financing costs and debt discounts totaled approximately $52.8 million and $56.5 million as of June 30, 2017 and December 31, 2016, respectively. | ||||||||||||||||||||
EXTENDED STAY AMERICA, INC. | |||||||||||||||
COMPARABLE HOTEL OPERATING METRICS(1) | |||||||||||||||
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2017 AND 2016 | |||||||||||||||
(Unaudited) | |||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2017 | 2016 | Variance | 2017 | 2016 | Variance | ||||||||||
625 | 625 | — | Number of hotels | 625 | 625 | — | |||||||||
68,780 | 68,780 | — | Number of rooms | 68,780 | 68,780 | — | |||||||||
78.9% | 76.7% | 220 bps | Comparable Hotel Occupancy | 74.7% | 73.2% | 150 bps | |||||||||
$67.21 | $67.53 | (0.5)% | Comparable Hotel ADR | $66.15 | $66.04 | 0.2% | |||||||||
$53.04 | $51.81 | 2.4% | Comparable Hotel RevPAR | $49.44 | $48.31 | 2.3% | |||||||||
Comparable Hotel Inventory: | |||||||||||||||
625 | 530 | 95 | Renovated Extended Stay America | 625 | 530 | 95 | |||||||||
— | 95 | (95) | Unrenovated Extended Stay America | — | 95 | (95) | |||||||||
625 | 625 | — | Comparable Hotel number of hotels | 625 | 625 | — | |||||||||
Comparable Hotel Renovation Displacement Data (in thousands, except percentages): | |||||||||||||||
6,279 | 6,316 | (37 | ) | Comparable Hotel available room nights | 12,523 | 12,632 | (109 | ) | |||||||
8 | 57 | (49 | ) | Comparable Hotel room nights displaced from renovation | 97 | 179 | (82 | ) | |||||||
0.1% | 0.9% | (80 | ) bps | % of Comparable Hotel available room nights displaced | 0.8% | 1.4% | (60 | ) bps | |||||||
(1) Comparable Hotel operating metrics include the results of 625 Extended Stay America hotels owned and operated during the full three and six month periods ended June 30, 2017 and 2016. | |||||||||||||||
EXTENDED STAY AMERICA, INC. | ||||||||||||||||||||
NON-GAAP RECONCILIATION OF ROOM REVENUES, OTHER HOTEL REVENUES AND | ||||||||||||||||||||
HOTEL OPERATING EXPENSES TO HOTEL OPERATING PROFIT AND HOTEL OPERATING MARGIN | ||||||||||||||||||||
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2017 AND 2016 | ||||||||||||||||||||
(In thousands) | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||||||
June 30, | June 30, | |||||||||||||||||||
2017 | 2016 | Variance | 2017 | 2016 | Variance | |||||||||||||||
$ | 332,608 | $ | 327,833 | 1.5% | Room revenues | $ | 618,416 | $ | 610,970 | 1.2% | ||||||||||
5,755 | 4,956 | 16.1% | Other hotel revenues | 10,938 | 9,377 | 16.6% | ||||||||||||||
338,363 | 332,789 | 1.7% | Total hotel revenues | 629,354 | 620,347 | 1.5% | ||||||||||||||
146,363 | 146,973 | (0.4)% | Hotel operating expenses (1) | 284,553 | 289,637 | (1.8)% | ||||||||||||||
$ | 192,000 | $ | 185,816 | 3.3% | Hotel Operating Profit | $ | 344,801 | $ | 330,710 | 4.3% | ||||||||||
56.7 | % | 55.8 | % | 90 bps | Hotel Operating Margin | 54.8 | % | 53.3 | % | 150 bps | ||||||||||
(1) Excludes loss on disposal of assets of approximately $2.5 million, $2.1 million, $6.0 million and $5.0 million, respectively. |
EXTENDED STAY AMERICA, INC. | |||||||||||||||||
NON-GAAP RECONCILIATION OF NET INCOME TO EBITDA AND ADJUSTED EBITDA | |||||||||||||||||
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2017 AND 2016 | |||||||||||||||||
(In thousands) | |||||||||||||||||
(Unaudited) | |||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||
June 30, | June 30, | ||||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||||
$ | 49,725 | $ | 61,386 | Net income | $ | 65,788 | $ | 76,139 | |||||||||
31,701 | 35,764 | Interest expense, net | 65,307 | 82,749 | |||||||||||||
15,943 | 7,448 | Income tax expense | 20,426 | 10,344 | |||||||||||||
57,804 | 55,011 | Depreciation and amortization | 115,475 | 108,319 | |||||||||||||
155,173 | 159,609 | EBITDA | 266,996 | 277,551 | |||||||||||||
3,646 | 2,939 | Equity-based compensation | 6,329 | 5,619 | |||||||||||||
1,073 | (1) | 114 | (2) | Other non-operating expense (income) | (148 | ) | (3) | (764 | ) | (4) | |||||||
7,934 | — | Impairment of long-lived assets | 20,357 | — | |||||||||||||
1,897 | — | Loss on sale of hotel properties | 1,897 | — | |||||||||||||
3,125 | (5) | 1,997 | (6) | Other expenses | 7,019 | (7) | 5,052 | (8) | |||||||||
$ | 172,848 | $ | 164,659 | Adjusted EBITDA | $ | 302,450 | $ | 287,458 | |||||||||
5.0 | % | % growth | 5.2 | % | |||||||||||||
(1) Includes loss related to interest rate swap of approximately $1.5 million and foreign currency transaction gain $0.4 million. | |||||||||||||||||
(2) Includes foreign currency transaction loss of approximately $0.1 million. | |||||||||||||||||
(3) Includes foreign currency transaction gain of approximately $0.4 million and loss related to interest rate swap of approximately $0.3 million. | |||||||||||||||||
(4) Includes foreign currency transaction gain of approximately $0.8 million. | |||||||||||||||||
(5) Includes loss on disposal of assets of approximately $2.5 million and costs incurred in connection with the second quarter 2017 secondary offerings of approximately $0.6 million. | |||||||||||||||||
(6) Includes loss on disposal of assets of approximately $2.1 million and transaction costs of approximately $(0.1) million due to the revision of an estimate related to the sale of 53 hotel properties in December 2015. | |||||||||||||||||
(7) Includes loss on disposal of assets of approximately $6.0 million and costs incurred in connection with the first and second quarter 2017 secondary offerings of approximately $1.0 million. | |||||||||||||||||
(8) Includes loss on disposal of assets of approximately $5.0 million and transaction costs of approximately $0.1 million due to the revision of an estimate related to the sale of the 53 hotel properties in December 2015. | |||||||||||||||||
EXTENDED STAY AMERICA, INC. | |||||||||||||||||
NON-GAAP RECONCILIATION OF NET INCOME ATTRIBUTABLE TO EXTENDED STAY AMERICA, INC. | |||||||||||||||||
COMMON SHAREHOLDERS TO FUNDS FROM OPERATIONS, ADJUSTED FUNDS FROM OPERATIONS | |||||||||||||||||
AND ADJUSTED FUNDS FROM OPERATIONS PER DILUTED PAIRED SHARE | |||||||||||||||||
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2017 AND 2016 | |||||||||||||||||
(In thousands, expect per share and per Paired Share data) | |||||||||||||||||
(Unaudited) | |||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||
June 30, | June 30, | ||||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||||
$ | 0.27 | $ | 0.30 | Net income per Extended Stay America, Inc. common share - diluted | $ | 0.39 | $ | 0.38 | |||||||||
$ | 51,775 | $ | 60,729 | Net income attributable to Extended Stay America, Inc. common shareholders | $ | 74,876 | $ | 77,775 | |||||||||
(2,054 | ) | 653 | Noncontrolling interests attributable to Class B common shares of ESH REIT | (9,096 | ) | (1,644 | ) | ||||||||||
56,649 | 53,918 | Real estate depreciation and amortization | 113,182 | 106,118 | |||||||||||||
7,934 | — | Impairment of long-lived assets | 20,357 | — | |||||||||||||
1,897 | — | Loss on sale of hotel properties | 1,897 | — | |||||||||||||
(15,423 | ) | (11,754 | ) | Tax effect of adjustments to net income attributable to Extended Stay America, Inc. common shareholders | (31,697 | ) | (23,708 | ) | |||||||||
$ | 100,778 | $ | 103,546 | Funds from Operations | $ | 169,519 | $ | 158,541 | |||||||||
— | — | Debt modification and extinguishment costs | 1,168 | 12,103 | |||||||||||||
1,495 | — | Loss on interest rate swap | 253 | — | |||||||||||||
(347 | ) | — | Tax effect of adjustments to Funds from Operations | (330 | ) | (2,772 | ) | ||||||||||
$ | 101,926 | $ | 103,546 | Adjusted Funds from Operations | $ | 170,610 | $ | 167,872 | |||||||||
$ | 0.53 | $ | 0.51 | Adjusted Funds from Operations per Paired Share- diluted | $ | 0.88 | $ | 0.83 | |||||||||
193,944 | 201,689 | Weighted average Paired Shares outstanding – diluted | 194,372 | 203,029 | |||||||||||||
EXTENDED STAY AMERICA, INC. | |||||||||||||||||
NON-GAAP RECONCILIATION OF NET INCOME ATTRIBUTABLE TO EXTENDED STAY AMERICA, INC. | |||||||||||||||||
COMMON SHAREHOLDERS TO PAIRED SHARE INCOME, ADJUSTED PAIRED SHARE | |||||||||||||||||
INCOME AND ADJUSTED PAIRED SHARE INCOME PER DILUTED PAIRED SHARE | |||||||||||||||||
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2017 AND 2016 | |||||||||||||||||
(In thousands, expect per share and per Paired Share data) | |||||||||||||||||
(Unaudited) | |||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||||
$ | 0.27 | $ | 0.30 | Net income per Extended Stay America, Inc. common share - diluted | $ | 0.39 | $ | 0.38 | |||||||||
$ | 51,775 | $ | 60,729 | Net income attributable to Extended Stay America, Inc. common shareholders | $ | 74,876 | $ | 77,775 | |||||||||
(2,054 | ) | 653 | Noncontrolling interests attributable to Class B common shares of ESH REIT | (9,096 | ) | (1,644 | ) | ||||||||||
49,721 | 61,382 | Paired Share Income | 65,780 | 76,131 | |||||||||||||
— | — | Debt modification and extinguishment costs | 1,168 | 12,103 | |||||||||||||
1,073 | (1) | 114 | (2) | Other non-operating expense (income) | (148 | ) | (3) | (764 | ) | (4) | |||||||
7,934 | — | Impairment of long-lived assets | 20,357 | — | |||||||||||||
1,897 | — | Loss on sale of hotel properties | 1,897 | — | |||||||||||||
3,125 | (5) | 1,997 | (6) | Other expenses | 7,019 | (7) | 5,052 | (8) | |||||||||
(3,255 | ) | (460 | ) | Tax effect of adjustments to Paired Share Income | (7,093 | ) | (3,730 | ) | |||||||||
$ | 60,495 | $ | 63,033 | Adjusted Paired Share Income | $ | 88,980 | $ | 88,792 | |||||||||
$ | 0.31 | $ | 0.31 | Adjusted Paired Share Income per Paired Share – diluted | $ | 0.46 | $ | 0.44 | |||||||||
193,944 | 201,689 | Weighted average Paired Shares outstanding – diluted | 194,372 | 203,029 | |||||||||||||
(1) Includes loss related to interest rate swap of approximately $1.5 million and foreign currency transaction gain of approximately $0.4 million. | |||||||||||||||||
(2) Includes foreign currency transaction loss of approximately $0.1 million. | |||||||||||||||||
(3) Includes foreign currency transaction gain of approximately $0.4 million and loss related to interest rate swap of approximately $0.3 million. | |||||||||||||||||
(4) Includes foreign currency transaction gain of approximately $0.8 million. | |||||||||||||||||
(5) Includes loss on disposal of assets of approximately $2.5 million and costs incurred in connection with the second quarter 2017 secondary offerings of approximately $0.6 million. | |||||||||||||||||
(6) Includes loss on disposal of assets of approximately $2.1 million and transaction costs of approximately $(0.1) million due to the revision of an estimate related to the sale of 53 hotel properties in December 2015. | |||||||||||||||||
(7) Includes loss on disposal of assets of approximately $6.0 million and costs incurred in connection with the first and second quarter 2017 secondary offerings of approximately $1.0 million. | |||||||||||||||||
(8) Includes loss on disposal of assets of approximately $5.0 million and transaction costs of approximately $0.1 million due to the revision of an estimate related to the sale of the 53 hotel properties in December 2015. | |||||||||||||||||
EXTENDED STAY AMERICA, INC. | ||||||||||||||
TOTAL REVENUES AND NON-GAAP RECONCILIATION OF NET INCOME TO EBITDA AND ADJUSTED EBITDA | ||||||||||||||
FOR YEARS ENDED DECEMBER 31, 2016 (ACTUAL) AND 2017 (OUTLOOK) | ||||||||||||||
(In thousands) | ||||||||||||||
(Unaudited) | ||||||||||||||
Year Ended | Year Ending December 31, 2017 | |||||||||||||
December 31, 2016 | (Outlook) | |||||||||||||
(Actual) | Low | High | ||||||||||||
$ | 1,270,593 | Total revenues | $ | 1,278,000 | $ | 1,303,000 | ||||||||
$ | 163,352 | Net income | $ | 160,659 | $ | 174,323 | ||||||||
164,537 | Interest expense, net | 130,000 | 130,000 | |||||||||||
34,351 | Income tax expense | 50,735 | 52,071 | |||||||||||
221,309 | Depreciation and amortization | 232,500 | 232,500 | |||||||||||
583,549 | EBITDA | 573,894 | 588,894 | |||||||||||
12,000 | Equity-based compensation | 12,500 | 12,500 | |||||||||||
(1,576 | ) | Other non-operating income | (148 | ) | (148 | ) | ||||||||
9,828 | Impairment of long-lived assets | 20,357 | 20,357 | |||||||||||
— | Loss on sale of hotel properties | 1,897 | 1,897 | |||||||||||
11,857 | (1) | Other expenses | 11,500 | (2) | 11,500 | (2) | ||||||||
$ | 615,658 | Adjusted EBITDA | $ | 620,000 | $ | 635,000 | ||||||||
% growth | 0.7 | % | 3.1 | % | ||||||||||
(1) | Includes loss on disposal of assets of approximately $10.7 million, costs incurred in connection with the fourth quarter 2016 secondary offerings of approximately $1.1 million and transaction costs of approximately $0.1 million due to the revision of an estimate related to the sale of 53 hotel properties in December 2015. | |||||||||||||
(2) | Includes loss on disposal of assets and other non-operating transaction costs. |