American Hotel Income Properties REIT LP Reports Third Quarter Results
VANCOUVER, BC --(Marketwired - November 08, 2017) -
(All numbers are in U.S. dollars unless otherwise indicated)
American Hotel Income Properties REIT LP (" AHIP ", "the Company ") (TSX:HOT-UN.TO) (TSX:HOT-DB-U.TO) , which has 115 select-service hotels located across the United States, announced today its financial results for the three and nine months ended September 30, 2017.
During the third quarter, revenues more than doubled, to $90.3 million, EBITDA rose by 107.6% to $30.1 million, funds from operations (" FFO ") increased by 93.0% to $19.3 million, while adjusted funds from operations (" AFFO ") rose 87.6% to $16.7 million, in each case, as a result of the addition of new hotels.
"Our third quarter results reflect the impact of the 33 premium branded hotels we acquired in the last 12 months, which improved the geographic diversification of our properties and supported our overall RevPAR growth of 25.2%. Revenue and EBITDA more than doubled from the same quarter last year, while our payout ratio improved to 76%," said Rob O'Neill, CEO, AHIP. "Our recently announced agreement with Wyndham to rebrand 46 of our Rail Hotels will further bolster our occupancy rates and complement our rail crew contract revenue by leveraging Wyndham's strong reservations network, brand recognition and customer rewards program to increase the productive capacity of our unused Rail Hotel guestrooms. We believe the incremental revenue and earnings accretion from this strategy will enhance the margins of our Rail Hotel Portfolio and create additional value for our Unitholders."
Ian McAuley, President of AHIP added, "During the third quarter our Hotel Manager and their dedicated hotel staff successfully navigated the surge of guests seeking accommodation in Florida during Hurricane Irma. We are grateful to confirm that our properties sustained only minor damage due to the storm and would like to thank our hotel guests for their confidence and business during that challenging time. The increased occupancy rates at several of our Florida hotels, provided a strong contribution to our third quarter performance."
Mr. McAuley continued: "To better cater to our unitholders' needs and provide more clarity in a changing currency environment, we are pleased to announce the addition of a new U.S. dollar ticker (HOT.U), that will trade alongside our existing Canadian dollar ticker (HOT.UN) on the TSX. This new investment option will provide our unitholders with the choice of investing in either currency, and will also provide our unitholders with a unit price benchmark resistant to Canadian and U.S. dollar foreign exchange impacts. The new ticker will begin trading on the TSX on November 10, 2017."
THREE MONTHS ENDED SEPTEMBER 30, 2017 FINANCIAL HIGHLIGHTS
NINE MONTHS ENDED SEPTEMBER 30, 2017 FINANCIAL HIGHLIGHTS
THIRD QUARTER DEVELOPMENTS
The information in this news release should be read in conjunction with AHIP's unaudited condensed consolidated interim financial statements and management's discussion and analysis (" MD&A ") for the three and nine months ended September 30, 2017 which are available on AHIP's website at www.ahipreit.com and on SEDAR at www.sedar.com .
Q3 2017 FINANCIAL RESULTS CONFERENCE CALL
Management will host a conference call at 4:00 p.m. (Eastern), 1:00 p.m. (Pacific) on Thursday, November 9, 2017 to review the financial results and corporate results for the three and nine months ended September 30, 2017.
To participate in this conference call, please dial one of the following numbers at least five minutes prior to the commencement of the call, and ask to join the American Hotel Income Properties' Q3 2017 earnings call.
|Dial in numbers:||North America Toll free:||1-877-291-4570|
|International or local Toronto:||1-647-788-4919|
CONFERENCE CALL REPLAY
If you cannot participate on Thursday, November 9, 2017, a replay of the conference call will be available by dialing one of the following replay numbers. You will be able to dial in and listen to the conference call replay two hours after the call end time, and the replay will be available until Thursday, November 30, 2017. An audio recording of this conference call will also be available at www.ahipreit.com under the "News and Events" tab.
Please enter replay PIN number 7084529 followed by the # key.
|Replay dial in numbers:||North America Toll free:||1-800-585-8367|
|International or local Toronto:||1-416-621-4642|
Certain non-IFRS financial measures are included in this news release, which include NOI, EBITDA, FFO, Diluted FFO per Unit, AFFO, Diluted AFFO per Unit, interest coverage ratio, AFFO payout ratio and debt-to-gross book value. These terms are not measures recognized under International Financial Reporting Standards (" IFRS ") and do not have standardized meanings prescribed by IFRS. Real estate issuers often refer to NOI, FFO, Diluted FFO per Unit, AFFO, Diluted AFFO per Unit, and AFFO payout ratio as supplemental measures of performance and interest coverage ratio and debt-to-gross book value as supplemental measures of financial condition.
Debt-to-gross book value, NOI, EBITDA, FFO, Diluted FFO per Unit, AFFO, Diluted AFFO per Unit, interest coverage ratio and payout ratio should not be construed as alternatives to measurements determined in accordance with IFRS as indicators of AHIP's performance or financial condition. AHIP's method of calculating NOI, EBITDA, FFO, Diluted FFO per Unit, AFFO, Diluted AFFO per Unit, interest coverage ratio, AFFO payout ratio and debt-to-gross book value may differ from other issuers' methods and accordingly may not be comparable to measures used by other issuers. For further information, including reconciliations of certain of these non-IFRS financial measures to the closest comparable IFRS measure, please refer to AHIP's MD&A dated November 7, 2017, which is available on SEDAR at www.sedar.com and on AHIP's website at www.ahipreit.com.
Certain statements in this news release may constitute "forward-looking" information that involves known and unknown risks, uncertainties and other factors, and it may cause actual results, performance or achievements or industry results, to be materially different from any future results, performance or achievements or industry results expressed or implied by such forward-looking information. Forward-looking information generally can be identified by the use of terms and phrases such as "anticipate", "believe", "could", "estimate", "expect", "feel", "intend", "may", "plan", "predict", "project", "subject to", "will", "would", and similar terms and phrases, including references to assumptions. Some of the specific forward-looking statements in this news release include, but are not limited to, statements with respect to: management's belief that the agreement with Wyndham will bolster occupancy rates at AHIP's Rail Hotels, increase the productive capacity of unused Rail Hotel guestrooms, enhance the margins for the Rail Hotel Portfolio and create additional value for Unitholders; AHIP gaining access to Wyndham's world-class reservations network, brand recognition and customer rewards program to drive incremental transient guests and revenues at the rebranded hotels; the rebranding of 46 hotels in AHIP's Rail Hotel portfolio under Wyndham's Baymont Inn and Suites®, Travelodge®, and Super 8® brands; the rebranding of the Rail Hotel in Whitefish, Montana under one of Wyndham's brands; the expected costs and timing of the rebranding; the Fargo hotel remaining a Days Inn; the trading of AHIP's units in U.S. dollars on the TSX, the expected benefits thereof and the timing of the commencement of such trading option; the expectation that the new Master Agreement will allow both parties to expedite future contracts and contract renewals; the long term commitment of the rail partner that is party to the new Master Agreement to using AHIP's hotels for future rail crew lodging needs; and AHIP's long-term objectives.
Forward-looking information is based on a number of key expectations and assumptions made by AHIP, including, without limitation: a reasonably stable North American economy and stock market; the continued strength of the U.S. lodging industry; AHIP will be able to successfully integrate properties acquired into its portfolio; capital markets will provide AHIP with readily available access to equity and/or debt financing on terms acceptable to AHIP; the accuracy of third party reports with respect to lodging industry data; the value of the U.S. dollar; the successful rebranding of AHIP's Rail Hotels; the rebranding of AHIP's Rail Hotels achieving its intended results; the costs and timing of the rebranding being consistent with management's current estimates; the ability to successfully integrate the new Rail Hotel acquisitions into AHIP's existing portfolio of rail hotels; AHIP's rail partner not terminating the Master Agreement and continuing to rely on AHIP for its future rail crew lodging needs;. Although the forward-looking information contained in this news release is based on what AHIP's management believes to be reasonable assumptions, AHIP cannot assure investors that actual results will be consistent with such information.
Forward-looking statements are provided for the purpose of presenting information about management's current expectations and plans relating to the future and readers are cautioned that such statements may not be appropriate for other purposes. Forward-looking statements involve significant risks and uncertainties and should not be read as guarantees of future performance or results. Those risks and uncertainties include, among other things, risks related to: general economic conditions; future growth potential; Unit prices; liquidity; tax risk; tax laws currently in effect remaining unchanged; ability to access capital markets; competition for real property investments; environmental matters; the value of the U.S. dollar; and changes in legislation or regulations. Management believes that the expectations reflected in forward-looking statements are based upon reasonable assumptions and information currently available; however, management can give no assurance that actual results will be consistent with these forward-looking statements. Additional information about risks and uncertainties is contained in AHIP's MD&A dated November 7, 2017 and annual information form for the year ended December 31, 2016, copies of which are available on SEDAR at www.sedar.com.
The forward-looking information contained herein is expressly qualified in its entirety by this cautionary statement. Forward-looking information reflects management's current beliefs and is based on information currently available to AHIP. The forward-looking information is made as of the date of this news release and AHIP assumes no obligation to update or revise such information to reflect new events or circumstances, except as may be required by applicable law.
Additional information relating to AHIP, including AHIP's unaudited condensed consolidated interim financial statements for the three and nine months ended September 30, 2017, AHIP's MD&A dated November 7, 2017, and other public filings are available on SEDAR at www.sedar.com .
ABOUT AMERICAN HOTEL INCOME PROPERTIES REIT LP
American Hotel Income Properties REIT LP (TSX:HOT-UN.TO) (TSX:HOT-DB-U.TO) , or AHIP, is a limited partnership formed to invest in hotel real estate properties located substantially in the United States. AHIP currently has 115 hotels, and is actively engaged in growing its portfolio of premium branded, select-service hotels in larger secondary markets that have diverse and stable demand. AHIP hotels operate under brands affiliated with Marriott, Hilton, IHG, Wyndham and Choice Hotels through license agreements. The company's long-term objectives are to build on its proven track record of successful investment, deliver reliable and consistent U.S. dollar denominated distributions to unitholders, and generate value through the continued growth of its diversified hotel portfolio. More information is available at www.ahipreit.com.
|THIRD QUARTER HIGHLIGHTS AND KEY PERFORMANCE INDICATORS|
|(US$000s unless noted and except per Unit amounts)||Three months ended September 30, 2017||Three months ended September 30, 2016||Nine months ended September 30, 2017||Nine months ended September 30, 2016|
|Number of rooms (1)||11,570||7,119||11,570||7,119|
|Number of properties (1)||113||80||113||80|
|Number of restaurants (1)||41||31||41||31|
|Average daily room rate||$||99.16||$||81.72||$||95.54||$||83.05|
|Revenue per available room||$||77.25||$||61.70||$||72.04||$||60.46|
|Net operating income||$||34,018||$||17,261||$||80,604||$||49,354|
|Net income and comprehensive income||$||8,816||$||3,880||$||5,702||$||5,882|
|EBITDA Margin %||33.3||%||32.5||%||31.3||%||31.2||%|
|Funds from operations (FFO)||$||19,306||$||10,023||$||45,429||$||27,686|
|Diluted FFO per Unit||$||0.25||$||0.24||$||0.68||$||0.74|
|Adjusted funds from operations (AFFO)||$||16,653||$||8,874||$||38,986||$||24,284|
|Diluted AFFO per Unit||$||0.21||$||0.21||$||0.58||$||0.65|
|AFFO Payout Ratio||76.1||%||82.5||%||84.0||%||77.1||%|
|Debt-to-Gross Book Value (1)||53.7||%||43.9||%||53.7||%||43.9||%|
|Interest Coverage Ratio||3.6x||4.0x||3.4x||3.8x|
|Weighted average loan face interest rate (1)||4.61||%||4.56||%||4.61||%||4.56||%|
|Weighted average loan term to maturity (1)||7.8 years||7.5 years||7.8 years||7.5 years|
|Number of Units outstanding (1)||78,033,606||45,086,159||78,033,606||45,086,159|
|Diluted weighted average number of Units outstanding||78,253,220||42,483,493||66,853,148||37,537,524|
|Same property Occupancy rate (3)||76.5||%||75.5||%||74.2||%||72.9||%|
|Same property Average daily room rate (3)||$||79.43||$||82.09||$||80.04||$||83.24|
|Same property RevPAR (3)||$||60.76||$||61.98||$||59.39||$||60.68|
|Same property Revenues (3)||$||42,709||$||43,416||$||123,484||$||125,896|
|Same property Net operating income (3)||$||14,827||$||16,291||$||42,452||$||46,812|
|Same property NOI Margin % (3)||34.7||%||37.5||%||34.4||%||37.2||%|
(1) At period end.
(2) Aggregate amount of debt at face value divided by annualized EBITDA.
(3) Same-property metrics only represent 71% of AHIP's hotels for Q3 2017 (as at Sept. 30, 2017)
For further information, please contact:
For American Hotel Income Properties REIT LP:
Director, Investor Relations