Extended Stay America Announces Third Quarter 2019 Results
- Net Income of
- Adjusted EBITDA1 of
- Franchise pipeline expands 12% to 58 hotels in the Third Quarter
- Repurchased 4.0 million Paired Shares in the Third Quarter
Third Quarter 2019 Highlights
- Net Income of
$53.2 million - Total revenues of
$332.7 million - Comparable system-wide
Revenue Per Available Room (“RevPAR”) declined 1.3% - Adjusted EBITDA of
$156.3 million - Adjusted Funds from Operations (“Adjusted FFO”)1 of
$0.54 per diluted Paired Share - Adjusted Paired Share Income1 of
$0.33 per diluted Paired Share $186 million in capital returns to shareholders for the first nine months of 2019
Extended Stay America’s President and Chief Executive Officer,
Mr. Halkyard continued, “We have increased the pace of capital returns to shareholders in recent months and are on track to return more than 10% of our recent market capitalization to shareholders in 2019 through dividends and Paired Share repurchases. Capital returns remain a top priority for the Company with a strong balance sheet, a dividend yield in excess of 6% and more than
Financial and Operating Results
Total revenues for the three months ended
Comparable system-wide RevPAR for the three months ended
Net income for the three months ended
Adjusted EBITDA for the three months ended
Adjusted FFO for the three months ended
Adjusted Paired Share Income for the three months ended
Capital Expenditures
The Company invested
Hotel and Development Pipeline
As of
Company Owned Pipeline & Recently Opened Hotels as of September 30, 2019 | |||||||||||||||||
Under Option | Pre-Development | Under Construction | Total Pipeline | Opened YTD | |||||||||||||
# Hotels | # Rooms | # Hotels | # Rooms | # Hotels | # Rooms | # Hotels | # Rooms | # Hotels | # Rooms | ||||||||
4 | 496 | 6 | 752 | 9 | 1,140 | 19 | 2,388 | 0 | 0 | ||||||||
Third Party Pipeline & Recently Opened Hotels as of September 30, 2019 | |||||||||||||||||
Commitments | Applications | Executed | Total Pipeline | Opened YTD | |||||||||||||
# Hotels | # Rooms | # Hotels | # Rooms | # Hotels | # Rooms | # Hotels | # Rooms | # Hotels | # Rooms | ||||||||
40 | 4,928 | 7 | 868 | 11 | 1,261 | 58 | 7,057 | 1 | 115 | ||||||||
Definitions | |||||||||||||||||
Under Option | Locations with a signed purchase and sale agreement | ||||||||||||||||
Pre-Development | Land purchased, permitting and/or site work | ||||||||||||||||
Under Construction | Hotel is under construction | ||||||||||||||||
Commitments | Signed commitment to build a certain number of hotels by a third party | ||||||||||||||||
Applications | Third party filed franchise application with deposit | ||||||||||||||||
Executed | Franchise application approved, various stages of pre-development and/or under construction | ||||||||||||||||
Distributions and Share Repurchases
On
2019 Outlook
The Company’s 2019 Outlook is updated as follows:
in millions, except % and # of hotels | Low | High | ||||||
# of hotels owned on 12/31/19 | 556 | |||||||
Total Revenues | $ | 1,205 | $ | 1,215 | ||||
Comparable system-wide RevPAR % Δ1 | -1.75 | % | -1.25 | % | ||||
Net income | $ | 162 | $ | 176 | ||||
Adjusted Paired Share Income/Paired Share | $ | 0.93 | $ | 1.01 | ||||
Adjusted EBITDA2 | $ | 535 | $ | 545 | ||||
Depreciation and amortization | $ | 190 | $ | 195 | ||||
Net interest expense | $ | 129 | $ | 129 | ||||
Effective tax rate | 15.75 | % | 16.75 | % | ||||
Capital expenditures | $ | 235 | $ | 275 | ||||
Expected capital returns | $ | 285 | $ | 315 | ||||
1 Approximately 200 basis point negative impact from hurricane related markets and net renovation displacement | ||||||||
2 Lost contribution of approximately $21 million related to 72 hotel dispositions in 2018 |
Webcast and Conference Call Details
The Company will host a conference call on
Disclosure Regarding Non-GAAP Financial Measures
Forward Looking Statements
This release contains forward-looking statements within the meaning of the federal securities laws. These statements include, but are not limited to, statements related to our expectations regarding our business performance, financial results, liquidity and capital resources, capital expenditures, capital returns, distribution policy and other non-historical statements, including the statements in the “2019 Outlook” section of this release. Forward looking statements involve known and unknown risks, uncertainties and other factors that may cause the Company’s actual results or performance to differ from those projected in the forward-looking statements, possibly materially. For a description of factors that may cause the Company’s actual results or performance to differ from projected results or performance implied by forward-looking statements, please review the information under the headings “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors” included in the Company’s combined annual report on Form 10-K filed with the
About
Extended Stay America® is the leading brand in the mid-priced extended stay segment in the U.S. with 626 hotels.
Contacts
Investors or Media:
Rob Ballew
(980) 345-1546
investorrelations@esa.com
1 See “Disclosure Regarding Non-GAAP Financial Measures” for an explanation of non-GAAP measures included in this release (i.e.,
EXTENDED STAY AMERICA, INC. | |||||||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||||||||||
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2019 AND 2018 | |||||||||||||||||||||
(In thousands, except per share data) | |||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||||
2019 | 2018 | % Variance | 2019 | 2018 | % Variance | ||||||||||||||||
REVENUES: | |||||||||||||||||||||
$ | 320,669 | $ | 340,917 | (5.9 | )% | Room revenues | $ | 899,329 | $ | 958,075 | (6.1 | )% | |||||||||
6,475 | 5,943 | 9.0 | % | Other hotel revenues | 17,848 | 16,710 | 6.8 | % | |||||||||||||
1,351 | 864 | 56.4 | % | Franchise and management fees | 4,023 | 2,140 | 88.0 | % | |||||||||||||
328,495 | 347,724 | (5.5 | )% | 921,200 | 976,925 | (5.7 | )% | ||||||||||||||
4,200 | 3,352 | 25.3 | % | Other revenues from franchised and managed properties | 12,821 | 8,419 | 52.3 | % | |||||||||||||
332,695 | 351,076 | (5.2 | )% | Total revenues | 934,021 | 985,344 | (5.2 | )% | |||||||||||||
OPERATING EXPENSES: | |||||||||||||||||||||
152,913 | 156,341 | (2.2 | )% | Hotel operating expenses | 437,111 | 443,025 | (1.3 | )% | |||||||||||||
22,292 | 21,242 | 4.9 | % | General and administrative expenses | 67,606 | 69,710 | (3.0 | )% | |||||||||||||
49,748 | 52,138 | (4.6 | )% | Depreciation and amortization | 147,543 | 159,652 | (7.6 | )% | |||||||||||||
2,679 | - | n/a | Impairment of long-lived assets | 2,679 | 43,600 | (93.9 | )% | ||||||||||||||
227,632 | 229,721 | (0.9 | )% | 654,939 | 715,987 | (8.5 | )% | ||||||||||||||
4,699 | 3,449 | 36.2 | % | Other expenses from franchised and managed properties | 14,342 | 8,762 | 63.7 | % | |||||||||||||
232,331 | 233,170 | (0.4 | )% | Total operating expenses | 669,281 | 724,749 | (7.7 | )% | |||||||||||||
- | 3,517 | n/a | GAIN ON SALE OF HOTEL PROPERTIES | - | 41,599 | n/a | |||||||||||||||
3 | 39 | (92.3 | )% | OTHER INCOME | 31 | 501 | (93.8 | )% | |||||||||||||
100,367 | 121,462 | (17.4 | )% | INCOME FROM OPERATIONS | 264,771 | 302,695 | (12.5 | )% | |||||||||||||
101 | (251 | ) | (140.2 | )% | OTHER NON-OPERATING EXPENSE (INCOME) | (248 | ) | 48 | (616.7 | )% | |||||||||||
36,535 | 31,007 | 17.8 | % | INTEREST EXPENSE, NET | 95,905 | 95,072 | 0.9 | % | |||||||||||||
63,731 | 90,706 | (29.7 | )% | INCOME BEFORE INCOME TAX EXPENSE | 169,114 | 207,575 | (18.5 | )% | |||||||||||||
10,501 | 15,014 | (30.1 | )% | INCOME TAX EXPENSE | 27,822 | 35,218 | (21.0 | )% | |||||||||||||
53,230 | 75,692 | (29.7 | )% | NET INCOME | 141,292 | 172,357 | (18.0 | )% | |||||||||||||
(12,159 | ) | (3,790 | ) | 220.8 | % | NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS | (24,790 | ) | (20,547 | ) | 20.7 | % | |||||||||
$ | 41,071 | $ | 71,902 | (42.9 | )% | NET INCOME ATTRIBUTABLE TO EXTENDED STAY AMERICA, INC. COMMON SHAREHOLDERS | $ | 116,502 | $ | 151,810 | (23.3 | )% | |||||||||
$ | 0.22 | $ | 0.38 | (42.2 | )% | NET INCOME PER EXTENDED STAY AMERICA, INC. COMMON SHARE - DILUTED | $ | 0.62 | $ | 0.80 | (22.5 | )% | |||||||||
187,015 | 189,253 | WEIGHTED-AVERAGE EXTENDED STAY AMERICA, INC. COMMON SHARES OUTSTANDING - DILUTED | 188,317 | 190,111 | |||||||||||||||||
CONSOLIDATED BALANCE SHEET DATA | |||||||||||||||||||||
AS OF SEPTEMBER 30, 2019 AND DECEMBER 31, 2018 | |||||||||||||||||||||
(In thousands) | |||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||
September 30, | December 31, | ||||||||||||||||||||
2019 | 2018 | ||||||||||||||||||||
Cash and cash equivalents | $ | 489,767 | $ | 287,458 | |||||||||||||||||
Restricted cash | $ | 13,572 | $ | 15,878 | |||||||||||||||||
Total assets | $ | 4,155,377 | $ | 3,924,210 | |||||||||||||||||
Total debt, net of unamortized deferred financing costs and debt discounts (1) | $ | 2,639,498 | $ | 2,402,637 | |||||||||||||||||
Total equity | $ | 1,266,471 | $ | 1,310,639 | |||||||||||||||||
(1) Unamortized deferred financing costs and debt discounts totaled $48.5 million and $41.1 million as of September 30, 2019 and December 31, 2018, respectively. | |||||||||||||||||||||
EXTENDED STAY AMERICA, INC. | ||||||||||||||||||||||
OPERATING METRICS | ||||||||||||||||||||||
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2019 AND 2018 | ||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||
COMPARABLE SYSTEM-WIDE OPERATING METRICS (1) | ||||||||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||||||
September 30, | September 30, | |||||||||||||||||||||
2019 | 2018 | Variance | 2019 | 2018 | Variance | |||||||||||||||||
624 | 624 | - | Number of hotels (as of September 30) | 623 | 623 | - | ||||||||||||||||
68,749 | 68,749 | - | Number of rooms (as of September 30) | 68,634 | 68,634 | - | ||||||||||||||||
80.8 | % | 80.1 | % | 70 bps | Comparable System-Wide Occupancy(1) | 77.3 | % | 76.1 | % | 120 bps | ||||||||||||
$ | 67.87 | $ | 69.27 | (2.0 | )% | Comparable System-Wide ADR(1) | $ | 67.02 | $ | 68.77 | (2.5 | )% | ||||||||||
$ | 54.81 | $ | 55.51 | (1.3 | )% | Comparable System-Wide RevPAR(1) | $ | 51.83 | $ | 52.31 | (0.9 | )% | ||||||||||
COMPARABLE COMPANY-OWNED OPERATING METRICS (2) | ||||||||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||||||
September 30, | September 30, | |||||||||||||||||||||
2019 | 2018 | Variance | 2019 | 2018 | Variance | |||||||||||||||||
553 | 553 | - | Number of hotels (as of September 30) | 552 | 552 | - | ||||||||||||||||
61,379 | 61,379 | - | Number of rooms (as of September 30) | 61,264 | 61,264 | - | ||||||||||||||||
80.8 | % | 80.7 | % | 10 bps | Comparable Company-Owned Occupancy(2) | 77.4 | % | 76.7 | % | 70 bps | ||||||||||||
$ | 70.09 | $ | 71.23 | (1.6 | )% | Comparable Company-Owned ADR(2) | $ | 69.15 | $ | 70.62 | (2.1 | )% | ||||||||||
$ | 56.66 | $ | 57.46 | (1.4 | )% | Comparable Company-Owned RevPAR(2) | $ | 53.55 | $ | 54.20 | (1.2 | )% | ||||||||||
Renovation Displacement Data (in thousands, except percentages): | ||||||||||||||||||||||
5,647 | 5,647 | - | Total available room nights | 16,725 | 16,725 | - | ||||||||||||||||
10 | - | 10 | Room nights displaced from renovation | 45 | - | 45 | ||||||||||||||||
0.2 | % | 0.0 | % | 20 bps | % of available room nights displaced | 0.3 | % | 0.0 | % | 30 bps | ||||||||||||
COMPANY-OWNED OPERATING METRICS (3) | ||||||||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||||||
September 30, | September 30, | |||||||||||||||||||||
2019 | 2018 | Variance | 2019 | 2018 | Variance | |||||||||||||||||
554 | 567 | (13 | ) | Number of hotels (as of September 30) | 554 | 567 | (13 | ) | ||||||||||||||
61,486 | 62,748 | (1,262 | ) | Number of rooms (as of September 30) | 61,486 | 62,748 | (1,262 | ) | ||||||||||||||
80.8 | % | 80.2 | % | 60 bps | Company-Owned Occupancy(3) | 77.4 | % | 76.0 | % | 140 bps | ||||||||||||
$ | 70.10 | $ | 69.85 | 0.4 | % | Company-Owned ADR(3) | $ | 69.15 | $ | 69.24 | (0.1 | )% | ||||||||||
$ | 56.66 | $ | 56.02 | 1.1 | % | Company-Owned RevPAR(3) | $ | 53.53 | $ | 52.65 | 1.7 | % | ||||||||||
(1) Includes hotels owned, franchised or managed for the full three and nine months ended September 30, 2019 and 2018, respectively. | ||||||||||||||||||||||
(2) Includes hotels owned and operated by the Company for the full three and nine months ended September 30, 2019 and 2018, respectively. | ||||||||||||||||||||||
(3) Include results of operations of the Company's owned and operated hotels during the periods presented, which is summarized below: | ||||||||||||||||||||||
Date | Number of Hotels (Sold) Acquired |
Number of Rooms |
Number of Owned Hotels |
Number of Owned Rooms |
|||
January 1, 2018 | - | - | 624 | 68,620 | |||
February 2018 | (25) | (2,430) | 599 | 66,190 | |||
March 2018 | (1) | (101) | 598 | 66,089 | |||
May 2018 | 1 | 115 | 599 | 66,204 | |||
September 2018 | (32) | (3,456) | 567 | 62,748 | |||
November 2018 | 1 | 107 | 568 | 62,855 | |||
November 2018 | (14) | (1,369) | 554 | 61,486 | |||
September 30, 2019 | - | - | 554 | 61,486 | |||
EXTENDED STAY AMERICA, INC. | |||||||||||||
NON-GAAP RECONCILIATION OF NET INCOME TO HOTEL OPERATING PROFIT AND HOTEL OPERATING MARGIN | |||||||||||||
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2019 AND 2018 | |||||||||||||
(In thousands) | |||||||||||||
(Unaudited) | |||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||
September 30, | September 30, | ||||||||||||
2019 | 2018 | Variance | 2019 | 2018 | Variance | ||||||||
$ 53,230 | $ 75,692 | (29.7)% | Net income | $ 141,292 | $ 172,357 | (18.0)% | |||||||
10,501 | 15,014 | (30.1)% | Income tax expense | 27,822 | 35,218 | (21.0)% | |||||||
36,535 | 31,007 | 17.8% | Interest expense, net | 95,905 | 95,072 | 0.9% | |||||||
101 | (251) | (140.2)% | Other non-operating expense (income) | (248) | 48 | (616.7)% | |||||||
(3) | (39) | (92.3)% | Other income | (31) | (501) | (93.8)% | |||||||
- | (3,517) | n/a | Gain on sale of hotel properties | - | (41,599) | n/a | |||||||
2,679 | - | n/a | Impairment of long-lived assets | 2,679 | 43,600 | (93.9)% | |||||||
49,748 | 52,138 | (4.6)% | Depreciation and amortization | 147,543 | 159,652 | (7.6)% | |||||||
22,292 | 21,242 | 4.9% | General and administrative expenses | 67,606 | 69,710 | (3.0)% | |||||||
1,660 | 1,949 | (14.8)% | Loss on disposal of assets(1) | 5,037 | 2,617 | 92.5% | |||||||
(1,351) | (864) | 56.4% | Franchise and management fees | (4,023) | (2,140) | 88.0% | |||||||
499 | 97 | 414.4% | Other expenses from franchised and managed properties, net of other revenues | 1,521 | 343 | 343.4% | |||||||
$ 175,891 | $ 192,468 | (8.6)% | Hotel Operating Profit | $ 485,103 | $ 534,377 | (9.2)% | |||||||
$ 320,669 | $ 340,917 | (5.9)% | Room revenues | $ 899,329 | $ 958,075 | (6.1)% | |||||||
6,475 | 5,943 | 9.0% | Other hotel revenues | 17,848 | 16,710 | 6.8% | |||||||
$ 327,144 | $ 346,860 | (5.7)% | Total room and other hotel revenues | $ 917,177 | $ 974,785 | (5.9)% | |||||||
53.8% | 55.5% | (170) bps | Hotel Operating Margin | 52.9% | 54.8% | (190) bps | |||||||
|
|||||||||||||
NON-GAAP RECONCILIATION OF NET INCOME TO COMPARABLE HOTEL(2) | |||||||||||||
OPERATING PROFIT AND COMPARABLE HOTEL OPERATING MARGIN | |||||||||||||
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2019 AND 2018 | |||||||||||||
(In thousands) | |||||||||||||
(Unaudited) | |||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||
September 30, | September 30, | ||||||||||||
2019 | 2018 | Variance | 2019 | 2018 | Variance | ||||||||
$ 53,230 | $ 75,692 | (29.7)% | Net income | $ 141,292 | $ 172,357 | (18.0)% | |||||||
10,501 | 15,014 | (30.1)% | Income tax expense | 27,822 | 35,218 | (21.0)% | |||||||
36,535 | 31,007 | 17.8% | Interest expense, net | 95,905 | 95,072 | 0.9% | |||||||
101 | (251) | (140.2)% | Other non-operating expense (income) | (248) | 48 | (616.7)% | |||||||
(3) | (39) | (92.3)% | Other income | (31) | (501) | (93.8)% | |||||||
- 0 | (3,517) | n/a | Gain on sale of hotel properties | - 0 | (41,599) | n/a | |||||||
2,679 | - 0 | n/a | Impairment of long-lived assets | 2,679 | 43,600 | (93.9)% | |||||||
49,748 | 52,138 | (4.6)% | Depreciation and amortization | 147,543 | 159,652 | (7.6)% | |||||||
22,292 | 21,242 | 4.9% | General and administrative expenses | 67,606 | 69,710 | (3.0)% | |||||||
1,660 | 1,949 | (14.8)% | Loss on disposal of assets(1) | 5,037 | 2,617 | 92.5% | |||||||
(1,351) | (864) | 56.4% | Franchise and management fees | (4,023) | (2,140) | 88.0% | |||||||
499 | 97 | 414.4% | Other expenses from franchised and managed properties, net of other revenues | 1,521 | 343 | 343.4% | |||||||
(289) | (6,751) | (95.7)% | Hotel operating profit of hotels not owned for entirety of periods presented | (1,235) | (20,518) | (94.0)% | |||||||
$ 175,602 | $ 185,717 | (5.4)% | Comparable Hotel Operating Profit(2) | $ 483,868 | $ 513,859 | (5.8)% | |||||||
$ 320,669 | $ 340,917 | (5.9)% | Room revenues | $ 899,329 | $ 958,075 | (6.1)% | |||||||
6,475 | 5,943 | 9.0% | Other hotel revenues | 17,848 | 16,710 | 6.8% | |||||||
(571) | (16,363) | (96.5)% | Total revenues of hotels not owned for entirety of periods presented | (2,877) | (51,788) | (94.4)% | |||||||
$ 326,573 | $ 330,497 | (1.2)% | Comparable total room and other hotel revenues | $ 914,300 | $ 922,997 | (0.9)% | |||||||
53.8% | 56.2% | (240) bps | Comparable Hotel Operating Margin(2) | 52.9% | 55.7% | (280) bps | |||||||
(1) Included in hotel operating expenses in the unaudited condensed consolidated statements of operations. | |||||||||||||
(2) Includes results of 553 and 552 hotels owned and operated during the full three and nine months ended September 30, 2019 and 2018, respectively. | |||||||||||||
EXTENDED STAY AMERICA, INC. | ||||||||||||||||||
NON-GAAP RECONCILIATION OF NET INCOME TO EBITDA AND ADJUSTED EBITDA | ||||||||||||||||||
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2019 AND 2018 | ||||||||||||||||||
(In thousands) | ||||||||||||||||||
(Unaudited) | ||||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||
September 30, | September 30, | |||||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||||
$ | 53,230 | $ | 75,692 | Net income | $ | 141,292 | $ | 172,357 | ||||||||||
36,535 | 31,007 | Interest expense, net | 95,905 | 95,072 | ||||||||||||||
10,501 | 15,014 | Income tax expense | 27,822 | 35,218 | ||||||||||||||
49,748 | 52,138 | Depreciation and amortization | 147,543 | 159,652 | ||||||||||||||
150,014 | 173,851 | EBITDA | 412,562 | 462,299 | ||||||||||||||
1,876 | 1,811 | Equity-based compensation | 6,131 | 5,999 | ||||||||||||||
2,679 | - | Impairment of long-lived assets | 2,679 | 43,600 | ||||||||||||||
- | (3,517 | ) | Gain on sale of hotel properties | - | (41,599 | ) | ||||||||||||
1,756 | 1,532 | Other expense(1) | 4,907 | 2,879 | ||||||||||||||
$ | 156,325 | $ | 173,677 | Adjusted EBITDA | $ | 426,279 | $ | 473,178 | ||||||||||
NON-GAAP RECONCILIATION OF NET INCOME TO EBITDA AND COMPARABLE ADJUSTED EBITDA(2) | ||||||||||||||||||
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2019 AND 2018 | ||||||||||||||||||
(In thousands) | ||||||||||||||||||
(Unaudited) | ||||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||
September 30, | September 30, | |||||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||||
$ | 53,230 | $ | 75,692 | Net income | $ | 141,292 | $ | 172,357 | ||||||||||
36,535 | 31,007 | Interest expense, net | 95,905 | 95,072 | ||||||||||||||
10,501 | 15,014 | Income tax expense | 27,822 | 35,218 | ||||||||||||||
49,748 | 52,138 | Depreciation and amortization | 147,543 | 159,652 | ||||||||||||||
150,014 | 173,851 | EBITDA | 412,562 | 462,299 | ||||||||||||||
(289 | ) | (6,751 | ) | Adjusted Property EBITDA of hotels not owned for entirety of periods presented | (1,235 | ) | (20,518 | ) | ||||||||||
1,876 | 1,811 | Equity-based compensation | 6,131 | 5,999 | ||||||||||||||
2,679 | - | Impairment of long-lived assets | 2,679 | 43,600 | ||||||||||||||
- | (3,517 | ) | Gain on sale of hotel properties | - | (41,599 | ) | ||||||||||||
1,756 | 1,532 | Other expense(1) | 4,907 | 2,879 | ||||||||||||||
$ | 156,036 | $ | 166,926 | Comparable Adjusted EBITDA(2) | $ | 425,044 | $ | 452,660 | ||||||||||
(1) Includes loss on disposal of assets, non-operating expense (income), including foreign currency transaction costs, and certain costs associated with acquisitions and dispositions. Loss on disposal of assets totaled $1.7 million, $1.9 million, $5.0 million and $2.6 million, respectively. | ||||||||||||||||||
(2) Includes results of 553 and 552 hotels owned and operated during the full three and nine months ended September 30, 2019 and 2018, respectively. | ||||||||||||||||||
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 NINE MONTHS ENDED SEPTEMBER 30, 2019 AND 2018 | |||||||||||||||||||
(In thousands, except per share and per Paired Share data) | |||||||||||||||||||
(Unaudited) | |||||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||||||
$ | 0.22 | $ | 0.38 | Net income per Extended Stay America, Inc. common share - diluted | $ | 0.62 | $ | 0.80 | |||||||||||
$ | 41,071 | $ | 71,902 | Net income attributable to Extended Stay America, Inc. common shareholders | $ | 116,502 | $ | 151,810 | |||||||||||
12,155 | 3,786 | Noncontrolling interests attributable to Class B common shares of ESH REIT | 24,778 | 20,535 | |||||||||||||||
48,247 | 50,807 | Real estate depreciation and amortization | 143,335 | 155,788 | |||||||||||||||
2,679 | - | Impairment of long-lived assets | 2,679 | 43,600 | |||||||||||||||
- | (3,517 | ) | Gain on sale of hotel properties | - | (41,599 | ) | |||||||||||||
(8,250 | ) | (7,897 | ) | Tax effect of adjustments to net income attributable to Extended Stay America, Inc. common shareholders | (23,132 | ) | (26,502 | ) | |||||||||||
95,902 | 115,081 | Funds from Operations | 264,162 | 303,632 | |||||||||||||||
6,716 | - | Debt modification and extinguishment costs | 6,716 | 1,621 | |||||||||||||||
(1,088 | ) | - | Tax effect of adjustments to Funds from Operations | (1,088 | ) | (274 | ) | ||||||||||||
$ | 101,530 | $ | 115,081 | Adjusted Funds from Operations | $ | 269,790 | $ | 304,979 | |||||||||||
$ | 0.54 | $ | 0.61 | Adjusted Funds from Operations per Paired Share – diluted | $ | 1.43 | $ | 1.60 | |||||||||||
187,015 | 189,253 | Weighted average Paired Shares outstanding – diluted | 188,317 | 190,111 | |||||||||||||||
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 NINE MONTHS ENDED SEPTEMBER 30, 2019 AND 2018 | ||||||||||||||||||
(In thousands, except per share and per Paired Share data) | ||||||||||||||||||
(Unaudited) | ||||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||
September 30, | September 30, | |||||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||||
$ | 0.22 | $ | 0.38 | Net income per Extended Stay America, Inc. common share - diluted | $ | 0.62 | $ | 0.80 | ||||||||||
$ | 41,071 | $ | 71,902 | Net income attributable to Extended Stay America, Inc. common shareholders | $ | 116,502 | $ | 151,810 | ||||||||||
12,155 | 3,786 | Noncontrolling interests attributable to Class B common shares of ESH REIT | 24,778 | 20,535 | ||||||||||||||
53,226 | 75,688 | Paired Share Income | 141,280 | 172,345 | ||||||||||||||
6,716 | - | Debt modification and extinguishment costs | 6,716 | 1,621 | ||||||||||||||
2,679 | - | Impairment of long-lived assets | 2,679 | 43,600 | ||||||||||||||
- | (3,517 | ) | Gain on sale of hotel properties | - | (41,599 | ) | ||||||||||||
1,756 | 1,532 | Other expense(1) | 4,907 | 2,879 | ||||||||||||||
(1,806 | ) | 331 | Tax effect of adjustments to Paired Share Income | (2,299 | ) | (1,088 | ) | |||||||||||
$ | 62,571 | $ | 74,034 | Adjusted Paired Share Income | $ | 153,283 | $ | 177,758 | ||||||||||
$ | 0.33 | $ | 0.39 | Adjusted Paired Share Income per Paired Share – diluted | $ | 0.81 | $ | 0.94 | ||||||||||
187,015 | 189,253 | Weighted average Paired Shares outstanding – diluted | 188,317 | 190,111 | ||||||||||||||
(1) Includes loss on disposal of assets, non-operating expense (income), including foreign currency transaction costs, and certain costs associated with acquisitions and dispositions. Loss on disposal of assets totaled $1.7 million, $1.9 million, $5.0 million and $2.6 million, respectively. | ||||||||||||||||||
EXTENDED STAY AMERICA, INC. | |||||||||||
TOTAL REVENUES AND NON-GAAP RECONCILIATION OF NET INCOME TO EBITDA AND COMPARABLE ADJUSTED EBITDA | |||||||||||
FOR THE YEARS ENDED DECEMBER 31, 2018 (ADJUSTED) AND 2019 (OUTLOOK) | |||||||||||
(In thousands) | |||||||||||
(Unaudited) | |||||||||||
Year Ended | Year Ending December 31, 2019 | ||||||||||
December 31, 2018 | (Outlook) | ||||||||||
(Adjusted)(1) | Low | High | |||||||||
$ | 1,204,429 | Total revenues | $ | 1,205,000 | $ | 1,215,000 | |||||
$ | 211,756 | Net income | $ | 161,772 | $ | 176,353 | |||||
124,870 | Interest expense, net | 129,000 | 129,000 | ||||||||
42,076 | Income tax expense | 32,549 | 32,968 | ||||||||
209,329 | Depreciation and amortization | 195,000 | 190,000 | ||||||||
588,031 | EBITDA | 518,321 | 528,321 | ||||||||
(21,422 | ) | Adjusted Property EBITDA of hotels not owned for entirety of period presented | - | - | |||||||
7,724 | Equity-based compensation | 8,000 | 8,000 | ||||||||
43,600 | Impairment of long-lived assets | 2,679 | 2,679 | ||||||||
(42,478 | ) | Gain on sale of hotel properties | - | - 0 | |||||||
2,860 | Other expense(2) | 6,000 | 6,000 | ||||||||
$ | 578,315 | Comparable Adjusted EBITDA | $ | 535,000 | $ | 545,000 | |||||
(1) 2018 results adjusted to reflect results of 552 hotels owned and operated for the full year ended December 31, 2018. | |||||||||||
(2) Includes loss on disposal of assets, non-operating (income) expense, including foreign currency transaction costs, and certain costs associated with acquisitions, dispositions and capital transactions. | |||||||||||
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 YEARS ENDED DECEMBER 31, 2018 (ACTUAL) AND 2019 (OUTLOOK) | |||||||||||||
(In thousands, except per share and per Paired Share data) | |||||||||||||
(Unaudited) | |||||||||||||
Year Ended | Year Ending December 31, 2019 | ||||||||||||
December 31, 2018 | (Outlook) | ||||||||||||
(Actual) | Low | High | |||||||||||
$ | 0.59 | Net income per Extended Stay America, Inc. common share - diluted | $ | 0.38 | $ | 0.43 | |||||||
$ | 112,864 | Net income attributable to Extended Stay America, Inc. common shareholders | $ | 71,234 | $ | 79,893 | |||||||
98,876 | Noncontrolling interests attributable to Class B common shares of ESH REIT | 90,522 | 96,444 | ||||||||||
211,740 | Paired Share Income | 161,756 | 176,337 | ||||||||||
1,621 | Debt modification and extinguishment costs | 6,716 | 6,716 | ||||||||||
43,600 | Impairment of long-lived assets | 2,679 | 2,679 | ||||||||||
(42,478 | ) | Gain on sale of hotel properties | - | - | |||||||||
2,860 | Other expense(1) | 6,000 | 6,000 | ||||||||||
(937 | ) | Tax effect of adjustments to Paired Share Income | (2,579 | ) | (2,425 | ) | |||||||
$ | 216,406 | Adjusted Paired Share Income | $ | 174,572 | $ | 189,307 | |||||||
$ | 1.14 | Adjusted Paired Share Income per Paired Share – diluted | $ | 0.93 | $ | 1.01 | |||||||
189,821 | Weighted average Paired Shares outstanding – diluted | 187,000 | 187,000 | ||||||||||
(1) Includes loss on disposal of assets, non-operating (income) expense, including foreign currency transaction costs, and certain costs associated with acquisitions, dispositions and capital transactions. | |||||||||||||
Source: Extended Stay America, Inc.