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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Chesapeake Lodging Trust | NYSE:CHSP | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 27.17 | 0 | 01:00:00 |
ý
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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MARYLAND
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27-0372343
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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Title of Each Class
|
|
Name of Exchange On Which Registered
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Common Shares of Beneficial Interest, $.01 par value
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New York Stock Exchange
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Large accelerated filer
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ý
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Accelerated filer
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o
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Non-accelerated filer
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o
(Do not check if a smaller reporting company)
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Smaller reporting company
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o
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Emerging growth company
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o
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Page
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PART I
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Business
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||
Risk Factors
|
||
Unresolved Staff Comments
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||
Properties
|
||
Legal Proceedings
|
||
Mine Safety Disclosures
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||
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PART II
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Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
|
||
Selected Financial Data
|
||
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
||
Quantitative and Qualitative Disclosures About Market Risk
|
||
Financial Statements and Supplementary Data
|
||
Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
|
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Controls and Procedures
|
||
Other Information
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PART III
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||
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Directors, Executive Officers and Corporate Governance
|
||
Executive Compensation
|
||
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
|
||
Certain Relationships and Related Transactions, and Director Independence
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Principal Accounting Fees and Services
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PART IV
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Exhibits, Financial Statement Schedules
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||
Form 10-K Summary
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Item 1.
|
Business
|
Item 1A.
|
Risk Factors
|
•
|
require us to maintain minimum debt service coverage ratios;
|
•
|
require us to maintain minimum levels of tangible net worth;
|
•
|
limit our ability to make certain investments;
|
•
|
prevent us from incurring total debt in excess of a percentage of our total asset value;
|
•
|
prohibit us from making annual distributions to our shareholders in excess of 90% of our funds from operations, or FFO, over time, except for such distributions as may be required to enable us to maintain our qualification as a REIT for U.S. federal income tax purposes, and prohibit us from making any distributions to shareholders while there is a continuing event of default;
|
•
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impose concentration limitations on the value and other characteristics of hotels comprising the borrowing base of the revolving credit facility and unsecured term loan; and
|
•
|
limit our ability to engage in a change in control transaction without causing the amounts outstanding under the revolving credit facility and unsecured term loan to become immediately due and payable.
|
•
|
our cash flow from operations will be insufficient to make required payments of principal and interest;
|
•
|
our debt may increase our vulnerability to adverse economic and industry conditions;
|
•
|
we may be required to dedicate a substantial portion of our cash flow from operations to payments on our debt, thereby reducing cash available for distributions to our shareholders, funds available for operations and capital expenditures, future business opportunities or other purposes;
|
•
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the terms of any refinancing may not be as favorable as the terms of the debt being refinanced; and
|
•
|
the terms of our debt may limit our ability to make distributions to our shareholders and therefore adversely affect the market price of our shares.
|
•
|
competition from other hotels and lodging alternatives, including Airbnb, HomeAway and VRBO, in our markets;
|
•
|
development of new hotels in our markets, which could adversely affect occupancy and revenues at the hotels we currently own or may acquire;
|
•
|
dependence on business and commercial travelers and tourism;
|
•
|
consolidation in the lodging industry;
|
•
|
unfavorable changes in convention calendars in our markets which may negatively affect demand for guestrooms at our hotels in those markets;
|
•
|
increases in energy costs and other expenses affecting travel, which may affect travel patterns and reduce the number of business and commercial travelers and tourists;
|
•
|
increases in operating costs due to inflation, increasing labor costs and other factors that may not be offset by increased room rates;
|
•
|
changes in governmental laws and regulations, fiscal policies and zoning ordinances that may increase our costs of compliance with laws and regulations, fiscal policies and ordinances;
|
•
|
adverse effects of international, national, regional and local economic and market conditions;
|
•
|
the value of the U.S. dollar, or U.S. governmental laws, regulations, or executive orders, which may adversely affect the number of international business and commercial travelers and tourists entering the U.S. and in particular the gateway markets in which many of our hotels are located;
|
•
|
unforeseen events beyond our control, such as terrorist attacks, travel related health concerns, including pandemics and epidemics, such as Zika, H1N1 influenza (swine flu), avian bird flu, SARS, and Ebola, civil unrest, political instability, regional hostilities, imposition of taxes or surcharges by regulatory authorities, travel related accidents and unusual weather patterns, including natural disasters, such as hurricanes, tsunamis, earthquakes, floods or fires;
|
•
|
adverse effects of a downturn in the lodging industry; and
|
•
|
risks generally associated with the ownership of hotels and real estate, as we discuss in detail below.
|
•
|
construction cost overruns and delays;
|
•
|
costly delays in or impediments to the receipt of zoning, occupancy and other required governmental permits and authorizations;
|
•
|
a possible shortage of available cash to fund capital improvements and the related possibility that financing for these capital improvements may not be available to us on affordable terms;
|
•
|
uncertainties as to market demand or a loss of market demand after capital improvements have begun; and
|
•
|
possible environmental problems.
|
•
|
construction delays or cost overruns that may increase project costs;
|
•
|
receipt of zoning, occupancy and other required governmental permits and authorizations;
|
•
|
development costs incurred for projects that are not pursued to completion;
|
•
|
unusual weather patterns, including natural disasters, such as hurricanes, tsunamis, earthquakes, floods or fires that could adversely impact a project;
|
•
|
ability to raise capital; and
|
•
|
governmental restrictions on the nature or size of a project.
|
•
|
adverse changes in international, national, regional and local economic and market conditions;
|
•
|
changes in interest rates and in the availability, cost and terms of debt financing;
|
•
|
changes in governmental laws and regulations, fiscal policies and zoning ordinances and the related costs of compliance with laws and regulations, fiscal policies and ordinances;
|
•
|
the ongoing need for capital improvements, particularly in older structures;
|
•
|
changes in operating expenses; and
|
•
|
civil unrest, unusual weather patterns, including natural disasters such as hurricanes, tsunamis, earthquakes, floods or fires, which may result in uninsured losses, and acts of war or terrorism, including the consequences of the terrorist acts, such as those that occurred on September 11, 2001.
|
•
|
actual receipt of an improper benefit or profit in money, property or services; or
|
•
|
active and deliberate dishonesty by the trustee or officer that was established by a final judgment as being material to the cause of action adjudicated.
|
•
|
our inability to invest our available cash;
|
•
|
our inability to realize attractive risk-adjusted returns on our investments;
|
•
|
unanticipated expenses that reduce our cash flow;
|
•
|
defaults in our investment portfolio or decreases in the value of the underlying assets; and
|
•
|
the fact that anticipated operating expense levels may not prove accurate, as actual results may vary from estimates.
|
•
|
actual or anticipated variations in our quarterly results of operations;
|
•
|
changes in market valuations of companies in the hotel or real estate industries;
|
•
|
changes in expectations of future financial performance or changes in estimates of securities analysts;
|
•
|
fluctuations in stock market prices and volumes;
|
•
|
issuances of common or preferred shares or other securities in the future;
|
•
|
the addition or departure of key personnel;
|
•
|
announcements by us or our competitors of acquisitions, investments or strategic alliances; and
|
•
|
unforeseen events beyond our control, such as terrorist attacks, travel related health concerns including pandemics and epidemics, such as Zika, H1N1 influenza (swine flu), avian bird flu, SARS, and Ebola, civil unrest, political instability, regional hostilities, increases in fuel prices, imposition of taxes or surcharges by regulatory authorities, travel related accidents and unusual weather patterns, including natural disasters, such as hurricanes, tsunamis, earthquakes, floods or fires.
|
Item 1B.
|
Unresolved Staff Comments
|
Item 2.
|
Properties
|
Hotel
|
|
Number of
Rooms
|
|
Location
|
|||
1
|
|
Hyatt Regency Boston
|
|
502
|
|
|
Boston, MA
|
2
|
|
Hilton Checkers Los Angeles
|
|
193
|
|
|
Los Angeles, CA
|
3
|
|
Boston Marriott Newton
|
|
430
|
|
|
Newton, MA
|
4
|
|
Le Meridien San Francisco
|
|
360
|
|
|
San Francisco, CA
|
5
|
|
Homewood Suites Seattle Convention Center
|
|
195
|
|
|
Seattle, WA
|
6
|
|
W Chicago – City Center
|
|
403
|
|
|
Chicago, IL
|
7
|
|
Hotel Indigo San Diego Gaslamp Quarter
|
|
210
|
|
|
San Diego, CA
|
8
|
|
Courtyard Washington Capitol Hill/Navy Yard
|
|
204
|
|
|
Washington, DC
|
9
|
|
Hotel Adagio San Francisco, Autograph Collection
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171
|
|
|
San Francisco, CA
|
10
|
|
Hilton Denver City Center
|
|
613
|
|
|
Denver, CO
|
11
|
|
Hyatt Herald Square New York
|
|
122
|
|
|
New York, NY
|
12
|
|
W Chicago – Lakeshore
|
|
520
|
|
|
Chicago, IL
|
13
|
|
Hyatt Regency Mission Bay Spa and Marina
|
|
429
|
|
|
San Diego, CA
|
14
|
|
Hyatt Place New York Midtown South
|
|
185
|
|
|
New York, NY
|
15
|
|
W New Orleans – French Quarter
|
|
97
|
|
|
New Orleans, LA
|
16
|
|
Le Meridien New Orleans
|
|
410
|
|
|
New Orleans, LA
|
17
|
|
Hyatt Centric Fisherman's Wharf
|
|
316
|
|
|
San Francisco, CA
|
18
|
|
Hyatt Centric Santa Barbara
|
|
200
|
|
|
Santa Barbara, CA
|
19
|
|
JW Marriott San Francisco Union Square
|
|
344
|
|
|
San Francisco, CA
|
20
|
|
Royal Palm South Beach Miami, a Tribute Portfolio Resort
|
|
393
|
|
|
Miami Beach, FL
|
21
|
|
Ace Hotel and Theater Downtown Los Angeles
|
|
182
|
|
|
Los Angeles, CA
|
|
|
Total number of rooms
|
|
6,479
|
|
|
|
Item 3.
|
Legal Proceedings
|
Item 4.
|
Mine Safety Disclosures
|
Item 5.
|
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
|
|
|
Price Range
|
|
Dividends
Declared
|
||||||||
|
|
High
|
|
Low
|
|
|||||||
2017
|
|
|
|
|
|
|
||||||
First quarter
|
|
$
|
26.92
|
|
|
$
|
22.89
|
|
|
$
|
0.40
|
|
Second quarter
|
|
$
|
25.38
|
|
|
$
|
22.55
|
|
|
$
|
0.40
|
|
Third quarter
|
|
$
|
27.46
|
|
|
$
|
24.08
|
|
|
$
|
0.40
|
|
Fourth quarter
|
|
$
|
29.36
|
|
|
$
|
26.65
|
|
|
$
|
0.40
|
|
2016
|
|
|
|
|
|
|
||||||
First quarter
|
|
$
|
27.18
|
|
|
$
|
21.55
|
|
|
$
|
0.40
|
|
Second quarter
|
|
$
|
26.45
|
|
|
$
|
21.93
|
|
|
$
|
0.40
|
|
Third quarter
|
|
$
|
26.28
|
|
|
$
|
22.52
|
|
|
$
|
0.40
|
|
Fourth quarter
|
|
$
|
27.08
|
|
|
$
|
20.81
|
|
|
$
|
0.40
|
|
|
|
2017
|
|
2016
|
||||||||||
|
|
$
|
|
%
|
|
$
|
|
%
|
||||||
Common shares:
|
|
|
|
|
|
|
|
|
||||||
Ordinary income
|
|
$
|
1.284372
|
|
|
80.28
|
%
|
|
$
|
1.415000
|
|
|
88.44
|
%
|
Return of capital
|
|
0.226452
|
|
|
14.15
|
%
|
|
0.175972
|
|
|
11.00
|
%
|
||
Capital gain distribution
|
|
0.089176
|
|
|
5.57
|
%
|
|
0.009028
|
|
|
0.56
|
%
|
||
|
|
$
|
1.600000
|
|
|
100.00
|
%
|
|
$
|
1.600000
|
|
|
100.00
|
%
|
|
|
|
|
|
|
|
|
|
||||||
Preferred shares:
|
|
|
|
|
|
|
|
|
||||||
Ordinary income
|
|
$
|
0.915919
|
|
|
93.51
|
%
|
|
$
|
1.925216
|
|
|
99.37
|
%
|
Return of capital
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Capital gain distribution
|
|
0.063595
|
|
|
6.49
|
%
|
|
0.012284
|
|
|
0.63
|
%
|
||
|
|
$
|
0.979514
|
|
|
100.00
|
%
|
|
$
|
1.937500
|
|
|
100.00
|
%
|
•
|
our results of operations, including our operating expenses and taxable income;
|
•
|
the timing of the investment of proceeds from future share offerings;
|
•
|
debt service requirements;
|
•
|
capital expenditure requirements for our hotels;
|
•
|
the annual distribution requirement under the REIT provisions of the Internal Revenue Code; and
|
•
|
other factors that our board of trustees may deem relevant.
|
Period
|
|
Total Number of Shares Purchased
(1)
|
|
Average Price Paid Per Share
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
(2)
|
|
Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs
(2)
|
||||||
October 1, 2017—October 31, 2017
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
100,000
|
|
November 1, 2017—November 30, 2017
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
100,000
|
|
December 1, 2017—December 31, 2017
|
|
415
|
|
|
$
|
28.25
|
|
|
—
|
|
|
$
|
100,000
|
|
|
|
415
|
|
|
$
|
28.25
|
|
|
—
|
|
|
|
(1)
|
We provide employees, who have been issued restricted common shares, the option of selling shares to us to satisfy the minimum statutory tax withholding requirements on the date their shares vest. The common shares repurchased during the three months ended
December 31, 2017
related to such repurchases.
|
(2)
|
On September 29, 2015, our board of trustees authorized a share repurchase program pursuant to which we may acquire up to $100.0 million of our common shares. The repurchase program expires in September 2018, but may be suspended or discontinued at any time, and does not obligate us to acquire any particular amount of our shares. As of
December 31, 2017
, we have not repurchased any common shares under the share repurchase program.
|
Item 6.
|
Selected Financial Data
|
|
|
As of December 31,
|
||||||||||||||||||
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
Hotel Portfolio Data:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Number of hotels
|
|
21
|
|
|
22
|
|
|
22
|
|
|
20
|
|
|
20
|
|
|||||
Number of hotel rooms
|
|
6,479
|
|
|
6,694
|
|
|
6,699
|
|
|
6,116
|
|
|
5,932
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
|
$
|
44,314
|
|
|
$
|
43,060
|
|
|
$
|
50,544
|
|
|
$
|
29,326
|
|
|
$
|
28,713
|
|
Restricted cash
|
|
30,602
|
|
|
36,128
|
|
|
40,361
|
|
|
43,387
|
|
|
34,235
|
|
|||||
Investments in hotels, net
|
|
1,858,473
|
|
|
1,918,704
|
|
|
1,963,358
|
|
|
1,617,419
|
|
|
1,461,220
|
|
|||||
Total assets
|
|
1,975,360
|
|
|
2,035,374
|
|
|
2,087,766
|
|
|
1,713,871
|
|
|
1,547,657
|
|
|||||
Long-term debt
|
|
829,552
|
|
|
737,310
|
|
|
769,748
|
|
|
545,659
|
|
|
525,270
|
|
|||||
Total shareholders’ equity
|
|
1,048,428
|
|
|
1,188,675
|
|
|
1,209,557
|
|
|
1,081,982
|
|
|
946,557
|
|
|
|
Year Ended December 31,
|
||||||||||||||||||
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
Statement of Operations Data:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues
|
|
$
|
598,267
|
|
|
$
|
619,699
|
|
|
$
|
582,624
|
|
|
$
|
477,980
|
|
|
$
|
420,177
|
|
Hotel operating expenses, excluding depreciation and amortization
|
|
395,306
|
|
|
415,398
|
|
|
391,502
|
|
|
324,882
|
|
|
284,963
|
|
|||||
Corporate general and administrative
|
|
19,050
|
|
|
19,167
|
|
|
18,046
|
|
|
15,557
|
|
|
13,125
|
|
|||||
Hotel acquisition costs
|
|
—
|
|
|
—
|
|
|
854
|
|
|
3,622
|
|
|
4,222
|
|
|||||
Net income
|
|
76,235
|
|
|
76,706
|
|
|
67,508
|
|
|
60,954
|
|
|
45,318
|
|
|||||
Net income available per common share:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
|
1.12
|
|
|
1.13
|
|
|
1.00
|
|
|
1.01
|
|
|
0.75
|
|
|||||
Diluted
|
|
1.11
|
|
|
1.13
|
|
|
0.99
|
|
|
1.00
|
|
|
0.75
|
|
|||||
Cash dividends declared per common share
|
|
1.60
|
|
|
1.60
|
|
|
1.50
|
|
|
1.20
|
|
|
1.00
|
|
|||||
Weighted-average common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
|
59,029,490
|
|
|
58,717,647
|
|
|
57,474,256
|
|
|
50,488,007
|
|
|
47,295,089
|
|
|||||
Diluted
|
|
59,255,244
|
|
|
58,717,647
|
|
|
57,926,399
|
|
|
50,890,861
|
|
|
47,295,089
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Statement of Cash Flows Data:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash provided by (used in):
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating activities
|
|
143,535
|
|
|
159,570
|
|
|
151,713
|
|
|
119,634
|
|
|
99,962
|
|
|||||
Investing activities
|
|
(3,534
|
)
|
|
(25,754
|
)
|
|
(289,005
|
)
|
|
(209,816
|
)
|
|
(361,558
|
)
|
|||||
Financing activities
|
|
(138,747
|
)
|
|
(141,300
|
)
|
|
158,510
|
|
|
90,795
|
|
|
257,115
|
|
Item 7.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
Hotel
|
|
Location
|
|
Rooms
|
|
Acquisition Date
|
|||
1
|
|
Hyatt Regency Boston
|
|
Boston, MA
|
|
502
|
|
|
March 18, 2010
|
2
|
|
Hilton Checkers Los Angeles
|
|
Los Angeles, CA
|
|
193
|
|
|
June 1, 2010
|
3
|
|
Boston Marriott Newton
|
|
Newton, MA
|
|
430
|
|
|
July 30, 2010
|
4
|
|
Le Meridien San Francisco
|
|
San Francisco, CA
|
|
360
|
|
|
December 15, 2010
|
5
|
|
Homewood Suites Seattle Convention Center
|
|
Seattle, WA
|
|
195
|
|
|
May 2, 2011
|
6
|
|
W Chicago – City Center
|
|
Chicago, IL
|
|
403
|
|
|
May 10, 2011
|
7
|
|
Hotel Indigo San Diego Gaslamp Quarter
|
|
San Diego, CA
|
|
210
|
|
|
June 17, 2011
|
8
|
|
Courtyard Washington Capitol Hill/Navy Yard
|
|
Washington, DC
|
|
204
|
|
|
June 30, 2011
|
9
|
|
Hotel Adagio San Francisco, Autograph Collection
|
|
San Francisco, CA
|
|
171
|
|
|
July 8, 2011
|
10
|
|
Hilton Denver City Center
|
|
Denver, CO
|
|
613
|
|
|
October 3, 2011
|
11
|
|
Hyatt Herald Square New York
|
|
New York, NY
|
|
122
|
|
|
December 22, 2011
|
12
|
|
W Chicago – Lakeshore
|
|
Chicago, IL
|
|
520
|
|
|
August 21, 2012
|
13
|
|
Hyatt Regency Mission Bay Spa and Marina
|
|
San Diego, CA
|
|
429
|
|
|
September 7, 2012
|
14
|
|
Hyatt Place New York Midtown South
|
|
New York, NY
|
|
185
|
|
|
March 14, 2013
|
15
|
|
W New Orleans – French Quarter
|
|
New Orleans, LA
|
|
97
|
|
|
March 28, 2013
|
16
|
|
Le Meridien New Orleans
|
|
New Orleans, LA
|
|
410
|
|
|
April 25, 2013
|
17
|
|
Hyatt Centric Fisherman's Wharf
|
|
San Francisco, CA
|
|
316
|
|
|
May 31, 2013
|
18
|
|
Hyatt Centric Santa Barbara
|
|
Santa Barbara, CA
|
|
200
|
|
|
June 27, 2013
|
19
|
|
JW Marriott San Francisco Union Square
|
|
San Francisco, CA
|
|
344
|
|
|
October 1, 2014
|
20
|
|
Royal Palm South Beach Miami, a Tribute Portfolio Resort
|
|
Miami Beach, FL
|
|
393
|
|
|
March 9, 2015
|
21
|
|
Ace Hotel and Theater Downtown Los Angeles
|
|
Los Angeles, CA
|
|
182
|
|
|
April 30, 2015
|
|
|
|
|
|
|
6,479
|
|
|
|
|
Year Ended December 31,
|
|||||||
|
2017
|
|
2016
|
|
Change
|
|||
Comparable Occupancy
|
83.1
|
%
|
|
83.9
|
%
|
|
(80) bps
|
|
Comparable ADR
|
$
|
225.21
|
|
|
$228.58
|
|
(1.5)%
|
|
Comparable RevPAR
|
$
|
187.22
|
|
|
$191.89
|
|
(2.4)%
|
|
|
|
|
|
|
|
|||
Comparable Adjusted Hotel EBITDA
|
$
|
185,862
|
|
|
$199,169
|
|
(6.7)%
|
|
Comparable Adjusted Hotel EBITDA Margin
|
31.6
|
%
|
|
32.9
|
%
|
|
(130) bps
|
|
Year Ended December 31,
|
||||||
|
2017
|
|
2016
|
||||
Net income
|
$
|
76,235
|
|
|
$
|
76,706
|
|
Add: Interest expense
|
33,939
|
|
|
31,846
|
|
||
Income tax expense
|
3,089
|
|
|
1,999
|
|
||
Depreciation and amortization
|
76,230
|
|
|
74,661
|
|
||
Air rights contract amortization
|
520
|
|
|
520
|
|
||
Corporate general and administrative
|
19,050
|
|
|
19,167
|
|
||
Hotel EBITDA
|
209,063
|
|
|
204,899
|
|
||
Less: Non-cash amortization
(1)
|
(594
|
)
|
|
(620
|
)
|
||
Hilton Denver City Center change in management
(2)
|
(13,769
|
)
|
|
—
|
|
||
Gain on sale of hotel
|
(6,102
|
)
|
|
(598
|
)
|
||
Adjusted Hotel EBITDA
|
188,598
|
|
|
203,681
|
|
||
Less: Hotel EBITDA of hotel sold
(3)
|
(2,736
|
)
|
|
(4,512
|
)
|
||
Comparable Adjusted Hotel EBITDA
(4)
|
$
|
185,862
|
|
|
$
|
199,169
|
|
|
|
|
|
||||
Total revenue
|
$
|
598,267
|
|
|
$
|
619,699
|
|
Less: Total revenue of hotel sold
(3)
|
(10,601
|
)
|
|
(13,832
|
)
|
||
Comparable total revenue
(4)
|
$
|
587,666
|
|
|
$
|
605,867
|
|
|
|
|
|
||||
Comparable Adjusted Hotel EBITDA Margin
(4)
|
31.6
|
%
|
|
32.9
|
%
|
(1)
|
Reflects non-cash amortization of ground lease asset, deferred franchise costs, deferred key money, and unfavorable contract liability.
|
(2)
|
Reflects (1) a non-cash write-off of an unfavorable contract liability, (2) a settlement gain, and (3) transition-related expenses, all of which are in connection with the change in management at the Hilton Denver City Center (formerly the Denver Marriott City Center).
|
(3)
|
Reflects results of operations for The Hotel Minneapolis, Autograph Collection, which was sold on November 8, 2017.
|
(4)
|
We use the term "comparable" to refer to metrics that include only those hotels owned for the entirety of the two periods being compared.
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Net income
|
$
|
76,235
|
|
|
$
|
76,706
|
|
|
$
|
67,508
|
|
Add: Interest expense
|
33,939
|
|
|
31,846
|
|
|
31,856
|
|
|||
Income tax expense
|
3,089
|
|
|
1,999
|
|
|
2,595
|
|
|||
Depreciation and amortization
|
76,230
|
|
|
74,661
|
|
|
69,743
|
|
|||
Corporate EBITDA
|
189,493
|
|
|
185,212
|
|
|
171,702
|
|
|||
Add: Hotel acquisition costs
|
—
|
|
|
—
|
|
|
854
|
|
|||
Less: Non-cash amortization
(1)
|
(74
|
)
|
|
(101
|
)
|
|
(51
|
)
|
|||
Hilton Denver City Center change in management
(2)
|
(13,769
|
)
|
|
—
|
|
|
—
|
|
|||
Gain on sale of hotel
|
(6,102
|
)
|
|
(598
|
)
|
|
—
|
|
|||
Adjusted Corporate EBITDA
|
$
|
169,548
|
|
|
$
|
184,513
|
|
|
$
|
172,505
|
|
(1)
|
Reflects non-cash amortization of ground lease asset, deferred franchise costs, deferred key money, unfavorable contract liability, and air rights contract.
|
(2)
|
Reflects (1) a non-cash write-off of an unfavorable contract liability, (2) a settlement gain, and (3) transition-related expenses, all of which are in connection with the change in management at the Hilton Denver City Center (formerly the Denver Marriott City Center).
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Net income
|
$
|
76,235
|
|
|
$
|
76,706
|
|
|
$
|
67,508
|
|
Add: Depreciation and amortization
|
76,230
|
|
|
74,661
|
|
|
69,743
|
|
|||
Less: Gain on sale of hotel
|
(6,102
|
)
|
|
(598
|
)
|
|
—
|
|
|||
FFO
|
146,363
|
|
|
150,769
|
|
|
137,251
|
|
|||
Less: Preferred share dividends
|
(5,274
|
)
|
|
(9,688
|
)
|
|
(9,688
|
)
|
|||
Write-off of issuance costs of redeemed preferred shares
|
(4,419
|
)
|
|
—
|
|
|
—
|
|
|||
Dividends declared on unvested time-based awards
|
(494
|
)
|
|
(561
|
)
|
|
(560
|
)
|
|||
Undistributed earnings allocated to unvested time-based awards
|
—
|
|
|
—
|
|
|
—
|
|
|||
FFO available to common shareholders
|
136,176
|
|
|
140,520
|
|
|
127,003
|
|
|||
Add: Write-off of issuance costs of redeemed preferred shares
|
4,419
|
|
|
—
|
|
|
—
|
|
|||
Tax Cuts and Jobs Act income tax adjustment
|
1,057
|
|
|
—
|
|
|
—
|
|
|||
Hotel acquisition costs
|
—
|
|
|
—
|
|
|
854
|
|
|||
Less: Non-cash amortization
(1)
|
(74
|
)
|
|
(101
|
)
|
|
(51
|
)
|
|||
Hilton Denver City Center change in management
(2)
|
(13,018
|
)
|
|
—
|
|
|
—
|
|
|||
AFFO available to common shareholders
|
$
|
128,560
|
|
|
$
|
140,419
|
|
|
$
|
127,806
|
|
|
|
|
|
|
|
||||||
FFO available per common share:
|
|
|
|
|
|
||||||
Basic
|
$
|
2.31
|
|
|
$
|
2.39
|
|
|
$
|
2.21
|
|
Diluted
|
$
|
2.30
|
|
|
$
|
2.39
|
|
|
$
|
2.19
|
|
AFFO available per common share:
|
|
|
|
|
|
||||||
Basic
|
$
|
2.18
|
|
|
$
|
2.39
|
|
|
$
|
2.22
|
|
Diluted
|
$
|
2.17
|
|
|
$
|
2.39
|
|
|
$
|
2.21
|
|
(1)
|
Reflects non-cash amortization of ground lease asset, deferred franchise costs, deferred key money, unfavorable contract liability, and air rights contract.
|
(2)
|
Reflects (1) a non-cash write-off of an unfavorable contract liability, (2) a settlement gain, and (3) transition-related expenses, all of which are in connection with the change in management at the Hilton Denver City Center (formerly the Denver Marriott City Center).
|
|
|
Payments Due by Period
|
||||||||||||||||||
Contractual Obligations
|
|
Total
|
|
Less Than
One Year
|
|
One to
Three Years
|
|
Three to
Five Years
|
|
More Than
Five Years
|
||||||||||
Revolving credit facility, including interest
(1)
|
|
$
|
67,603
|
|
|
$
|
2,070
|
|
|
$
|
65,533
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Term loan, including interest
(1)
|
|
259,705
|
|
|
7,902
|
|
|
15,826
|
|
|
235,977
|
|
|
—
|
|
|||||
Secured loans, including interest
|
|
667,679
|
|
|
35,034
|
|
|
190,821
|
|
|
109,139
|
|
|
332,685
|
|
|||||
Corporate office lease
|
|
1,363
|
|
|
289
|
|
|
601
|
|
|
473
|
|
|
—
|
|
|||||
Ground leases
(2)
|
|
205,488
|
|
|
4,101
|
|
|
8,201
|
|
|
8,213
|
|
|
184,973
|
|
|||||
|
|
$
|
1,201,838
|
|
|
$
|
49,396
|
|
|
$
|
280,982
|
|
|
$
|
353,802
|
|
|
$
|
517,658
|
|
(1)
|
Assumes no additional borrowings and interest payments are based on the interest rate in effect at
December 31, 2017
. Also assumes that no extension options, if any, are exercised. See Note 7, "Long-Term Debt," to our consolidated financial statements for additional information relating to our revolving credit facility and term loan.
|
(2)
|
The ground leases for the Hyatt Regency Mission Bay Spa and Marina and the JW Marriott San Francisco Union Square provide for the greater of
|
Item 7A.
|
Quantitative and Qualitative Disclosures About Market Risk
|
Item 8.
|
Financial Statements and Supplementary Data
|
Item 9.
|
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
|
Item 9A.
|
Controls and Procedures
|
Item 9B.
|
Other Information
|
Item 10.
|
Directors, Executive Officers and Corporate Governance
|
Item 11.
|
Executive Compensation
|
Item 12.
|
Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters
|
Item 13.
|
Certain Relationships and Related Transactions, and Director Independence
|
Item 14.
|
Principal Accounting Fees and Services
|
Item 15.
|
Exhibits, Financial Statement Schedules
|
1.
|
Financial Statements
|
2.
|
Financial Statement Schedules
|
3.
|
Exhibits
|
Exhibit Number
|
|
Description of Exhibit
|
3.1
+
|
|
Articles of Amendment and Restatement of Declaration of Trust of Registrant
|
|
|
|
|
Articles Supplementary to the Articles of Amendment and Restatement of Declaration of Trust (incorporated by reference to Exhibit 3.1.1 to the Registrant's Current Report on Form 8-K filed on April 1, 2014)
|
|
|
|
|
|
Articles of Amendment to Articles of Amendment and Restatement of Declaration of Trust (incorporated by reference to Exhibit 3.1 to the Registrant's Current Report on Form 8-K filed on May 22, 2017)
|
|
|
|
|
|
Amended and Restated Bylaws, as amended through December 15, 2016 (incorporated by reference to Exhibit 3.2 to the Registrant's Current Report on Form 8-K filed on December 15, 2016)
|
|
|
|
|
|
Employment Agreement between Registrant and James L. Francis, dated January 27, 2015 (incorporated by reference to Exhibit 10.1 to the Registrant's Annual Report on Form 10-K for the period ended December 31, 2014)*
|
|
|
|
|
|
Employment Agreement between Registrant and Douglas W. Vicari, dated January 27, 2015 (incorporated by reference to Exhibit 10.2 to the Registrant's Annual Report on Form 10-K for the period ended December 31, 2014)*
|
|
|
|
|
|
Employment Agreement between Registrant and D. Rick Adams, dated January 27, 2015 (incorporated by reference to Exhibit 10.3 to the Registrant's Annual Report on Form 10-K for the period ended December 31, 2014)*
|
|
|
|
|
|
Employment Agreement between Registrant and Graham J. Wootten, dated January 27, 2015 (incorporated by reference to Exhibit 10.4 to the Registrant's Annual Report on Form 10-K for the period ended December 31, 2014)*
|
|
|
|
|
10.5
+
|
|
Form of Restricted Share Award Agreement for Executive Officers*
|
|
|
|
10.6
+
|
|
Form of Restricted Share Agreement for Trustees*
|
|
|
|
10.7
+
|
|
Form of Indemnification Agreement between Registrant and its Trustees and Executive Officers
|
|
|
|
|
Limited Partnership Agreement of Chesapeake Lodging, L.P. (incorporated by reference to Exhibit 10.8 to Amendment No. 1 to the Registrant's Registration Statement on Form S-11 filed on October 5, 2010)
|
|
|
|
|
|
Amendment No. 1 to the Limited Partnership Agreement of Chesapeake Lodging, L.P. (incorporated by reference to Exhibit 10.1 to the Registrant's Current Report on Form 8-K filed on July 13, 2012)
|
|
|
|
|
|
Chesapeake Lodging Trust Equity Plan (incorporated by reference to Exhibit 10.1 to the Registrant’s Registration Statement on Form S-8 filed on January 27, 2010)*
|
|
|
|
|
|
Amendment to the Chesapeake Lodging Trust Equity Plan (incorporated by reference to Exhibit 10.1 to the Registrant's Current Report on Form 8-K filed on May 30, 2012)*
|
|
|
|
|
|
Promissory Note, dated July 27, 2012, by CHSP Denver LLC in favor of Western National Life Insurance Company (incorporated by reference to Exhibit 10.4 to the Registrant's Quarterly Report on Form 10-Q for the period ended September 30, 2012)
|
|
|
Fee and Leasehold Deed of Trust and Security Agreement by CHSP Denver LLC, as grantor, to the Public Trustee of the (City and) County of Denver, Colorado, as trustee, for the use and benefit of Western National Life Insurance Company, as beneficiary, dated July 25, 2012 (incorporated by reference to Exhibit 10.5 to the Registrant's Quarterly Report on Form 10-Q for the period ended September 30, 2012)
|
|
|
|
|
|
Loan Agreement, dated July 11, 2013, by and between CHSP San Francisco LLC, as borrower, and PNC Bank, National Association, as lender (incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q for the period ended September 30, 2013)
|
|
|
|
|
|
Loan Agreement, dated July 11, 2013, by and between CHSP Chicago LLC, as borrower, and Goldman Sachs Mortgage Company, as lender (incorporated by reference to Exhibit 10.2 to the Registrant’s Quarterly Report on Form 10-Q for the period ended September 30, 2013)
|
|
|
|
|
|
Loan Agreement, dated July 3, 2014, by and between CHSP 31st Street LLC and CHSP 36th Street LLC, as borrowers, and Goldman Sachs Mortgage Company, as lender (incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q for the period ended September 30, 2014)
|
|
|
|
|
|
Fourth Amended and Restated Credit Agreement, dated March 4, 2015, by and among Chesapeake Lodging, L.P., as borrower, the financial institutions party thereto and their assignees under section 13.6, as lenders, and Wells Fargo Bank, N.A., as administrative agent (incorporated by reference to Exhibit 10.6 to the Registrant’s Quarterly Report on Form 10-Q for the period ended March 31, 2015)
|
|
|
|
|
|
First Amendment to Fourth Amended and Restated Credit Agreement, dated April 21, 2017, by and among Chesapeake Lodging, L.P., as borrower, the financial institutions party thereto and their assignees under section 13.6, as lenders, and Wells Fargo Bank, N.A., as administrative agent (incorporated by reference to Exhibit 10.1 to the Registrant's Quarterly Report on Form 10-Q for the period ended June 30, 2017)
|
|
|
|
|
|
Loan Agreement, dated June 23, 2016, by and between CHSP Boston II LLC, as borrower, and Metropolitan Life Insurance Company, as lender (incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q for the period ended June 30, 2016)
|
|
|
|
|
|
Term Loan Agreement, dated April 21, 2017, by and among Chesapeake Lodging, L.P., as borrower, the financial institutions party thereto and their assignees under Section 13.6, as lenders, and Wells Fargo Bank, N.A., as administrative agent (incorporated by reference to Exhibit 10.2 to the Registrant's Quarterly Report on Form 10-Q for the period ended June 30, 2017)
|
|
|
|
|
21.1
†
|
|
List of Subsidiaries of Registrant
|
|
|
|
23.1
†
|
|
Consent of Ernst & Young LLP
|
|
|
|
31.1
†
|
|
Rule 13a-14(a)/15d-14(a) Certification of President and Chief Executive Officer
|
|
|
|
31.2
†
|
|
Rule 13a-14(a)/15d-14(a) Certification of Executive Vice President and Chief Financial Officer
|
|
|
|
32.1
†
|
|
Section 1350 Certification of President and Chief Executive Officer
|
|
|
|
32.2
†
|
|
Section 1350 Certification of Executive Vice President and Chief Financial Officer
|
|
|
|
101.INS XBRL†
|
|
Instance Document
|
|
|
|
101.SCH XBRL†
|
|
Taxonomy Extension Schema Document
|
|
|
|
101.CAL XBRL†
|
|
Taxonomy Extension Calculation Linkbase Document
|
|
|
|
101.DEF XBRL†
|
|
Taxonomy Extension Definition Linkbase Document
|
|
|
|
101.LAB XBRL†
|
|
Taxonomy Extension Label Linkbase Document
|
|
|
|
101.PRE XBRL†
|
|
Taxonomy Extension Presentation Linkbase Document
|
|
|
|
†
|
|
Filed herewith
|
|
|
|
+
|
|
Incorporated by reference to the same-numbered exhibit to Amendment No. 2 to the Registrant’s IPO Registration Statement on Form S-11 filed on November 24, 2009
|
|
|
|
*
|
|
Denotes management or trustee compensation plan or arrangement
|
Item 16.
|
Form 10-K Summary
|
|
CHESAPEAKE LODGING TRUST
|
||
|
|
|
|
Date: February 15, 2018
|
By:
|
|
/
S
/ D
OUGLAS
W. V
ICARI
|
|
|
|
Douglas W. Vicari
|
|
|
|
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)
|
Signature
|
|
Title
|
|
Date
|
|
|
|
||
/s/ T
HOMAS
A. N
ATELLI
|
|
Chairman of the Board of Trustees
|
|
February 15, 2018
|
Thomas A. Natelli
|
|
|
||
|
|
|
|
|
/s/ J
AMES
L. F
RANCIS
|
|
President, Chief Executive Officer and Trustee (Principal Executive Officer)
|
|
February 15, 2018
|
James L. Francis
|
|
|
||
|
|
|
|
|
/s/ D
OUGLAS
W. V
ICARI
|
|
Executive Vice President, Chief Financial Officer, and Trustee (Principal Financial Officer)
|
|
February 15, 2018
|
Douglas W. Vicari
|
|
|
||
|
|
|
|
|
/s/ T
HOMAS
D. E
CKERT
|
|
Trustee
|
|
February 15, 2018
|
Thomas D. Eckert
|
|
|
||
|
|
|
|
|
/s/ G
EORGE
F. M
C
K
ENZIE
|
|
Trustee
|
|
February 15, 2018
|
George F. McKenzie
|
|
|
||
|
|
|
|
|
/s/ J
OHN
W. H
ILL
|
|
Trustee
|
|
February 15, 2018
|
John W. Hill
|
|
|
||
|
|
|
|
|
/s/ J
EFFREY
D. N
UECHTERLEIN
|
|
Trustee
|
|
February 15, 2018
|
Jeffrey D. Nuechterlein
|
|
|
||
|
|
|
|
|
/s/ G
RAHAM
J. W
OOTTEN
|
|
Senior Vice President and Chief Accounting Officer (Principal Accounting Officer)
|
|
February 15, 2018
|
Graham J. Wootten
|
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
|
|
December 31,
|
||||||
|
|
2017
|
|
2016
|
||||
ASSETS
|
|
|
|
|
||||
Property and equipment, net
|
|
$
|
1,823,217
|
|
|
$
|
1,882,869
|
|
Intangible assets, net
|
|
35,256
|
|
|
35,835
|
|
||
Cash and cash equivalents
|
|
44,314
|
|
|
43,060
|
|
||
Restricted cash
|
|
30,602
|
|
|
36,128
|
|
||
Accounts receivable, net of allowance for doubtful accounts
of $116 and $157, respectively
|
|
20,769
|
|
|
19,966
|
|
||
Prepaid expenses and other assets
|
|
21,202
|
|
|
17,516
|
|
||
Total assets
|
|
$
|
1,975,360
|
|
|
$
|
2,035,374
|
|
|
|
|
|
|
||||
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
|
||||
Long-term debt
|
|
$
|
829,552
|
|
|
$
|
737,310
|
|
Accounts payable and accrued expenses
|
|
65,783
|
|
|
64,581
|
|
||
Other liabilities
|
|
31,597
|
|
|
44,808
|
|
||
Total liabilities
|
|
926,932
|
|
|
846,699
|
|
||
Commitments and contingencies (Note 15)
|
|
|
|
|
||||
Preferred shares, $.01 par value; 100,000,000 shares authorized;
Series A Cumulative Redeemable Preferred Shares; no shares and
5,000,000 shares issued and outstanding, respectively
|
|
—
|
|
|
50
|
|
||
Common shares, $.01 par value; 400,000,000 shares authorized;
59,941,088 shares and 59,671,964 shares issued and outstanding, respectively
|
|
599
|
|
|
597
|
|
||
Additional paid-in capital
|
|
1,190,250
|
|
|
1,304,364
|
|
||
Cumulative dividends in excess of net income
|
|
(144,734
|
)
|
|
(116,297
|
)
|
||
Accumulated other comprehensive income (loss)
|
|
2,313
|
|
|
(39
|
)
|
||
Total shareholders’ equity
|
|
1,048,428
|
|
|
1,188,675
|
|
||
Total liabilities and shareholders’ equity
|
|
$
|
1,975,360
|
|
|
$
|
2,035,374
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||
REVENUE
|
|
|
|
|
|
|
||||||
Rooms
|
|
$
|
450,812
|
|
|
$
|
465,796
|
|
|
$
|
441,141
|
|
Food and beverage
|
|
118,715
|
|
|
125,987
|
|
|
117,171
|
|
|||
Other
|
|
28,740
|
|
|
27,916
|
|
|
24,312
|
|
|||
Total revenue
|
|
598,267
|
|
|
619,699
|
|
|
582,624
|
|
|||
|
|
|
|
|
|
|
||||||
EXPENSES
|
|
|
|
|
|
|
||||||
Hotel operating expenses:
|
|
|
|
|
|
|
||||||
Rooms
|
|
107,183
|
|
|
108,292
|
|
|
100,245
|
|
|||
Food and beverage
|
|
88,454
|
|
|
92,075
|
|
|
87,625
|
|
|||
Other direct
|
|
5,457
|
|
|
6,275
|
|
|
7,109
|
|
|||
Indirect
|
|
194,212
|
|
|
208,756
|
|
|
196,523
|
|
|||
Total hotel operating expenses
|
|
395,306
|
|
|
415,398
|
|
|
391,502
|
|
|||
Depreciation and amortization
|
|
76,230
|
|
|
74,661
|
|
|
69,743
|
|
|||
Air rights contract amortization
|
|
520
|
|
|
520
|
|
|
520
|
|
|||
Corporate general and administrative
|
|
19,050
|
|
|
19,167
|
|
|
18,046
|
|
|||
Hotel acquisition costs
|
|
—
|
|
|
—
|
|
|
854
|
|
|||
Total operating expenses
|
|
491,106
|
|
|
509,746
|
|
|
480,665
|
|
|||
Operating income
|
|
107,161
|
|
|
109,953
|
|
|
101,959
|
|
|||
Interest expense
|
|
(33,939
|
)
|
|
(31,846
|
)
|
|
(31,856
|
)
|
|||
Gain on sale of hotel
|
|
6,102
|
|
|
598
|
|
|
—
|
|
|||
Income before income taxes
|
|
79,324
|
|
|
78,705
|
|
|
70,103
|
|
|||
Income tax expense
|
|
(3,089
|
)
|
|
(1,999
|
)
|
|
(2,595
|
)
|
|||
Net income
|
|
76,235
|
|
|
76,706
|
|
|
67,508
|
|
|||
Preferred share dividends
|
|
(5,274
|
)
|
|
(9,688
|
)
|
|
(9,688
|
)
|
|||
Write-off of issuance costs of redeemed preferred shares
|
|
(4,419
|
)
|
|
—
|
|
|
—
|
|
|||
Net income available to common shareholders
|
|
$
|
66,542
|
|
|
$
|
67,018
|
|
|
$
|
57,820
|
|
|
|
|
|
|
|
|
||||||
Net income available per common share:
|
|
|
|
|
|
|
||||||
Basic
|
|
$
|
1.12
|
|
|
$
|
1.13
|
|
|
$
|
1.00
|
|
Diluted
|
|
$
|
1.11
|
|
|
$
|
1.13
|
|
|
$
|
0.99
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||
Net income
|
|
$
|
76,235
|
|
|
$
|
76,706
|
|
|
$
|
67,508
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
||||||
Unrealized gains (losses) on cash flow hedge instruments
|
|
1,235
|
|
|
(331
|
)
|
|
(1,065
|
)
|
|||
Reclassification of unrealized losses on cash flow hedge
instruments to interest expense
|
|
1,117
|
|
|
584
|
|
|
773
|
|
|||
Comprehensive income
|
|
$
|
78,587
|
|
|
$
|
76,959
|
|
|
$
|
67,216
|
|
|
|
Preferred Shares
|
|
Common Shares
|
|
Additional Paid-In Capital
|
|
Cumulative
Dividends in
Excess of Net Income
|
|
Accumulated
Other
Comprehensive Income (Loss)
|
|
|
||||||||||||||||||
|
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
|
|
|
Total
|
|||||||||||||||||
Balances at December 31, 2014
|
|
5,000,000
|
|
|
$
|
50
|
|
|
54,818,064
|
|
|
$
|
548
|
|
|
$
|
1,138,391
|
|
|
$
|
(57,007
|
)
|
|
$
|
—
|
|
|
$
|
1,081,982
|
|
Sale of common shares, net of underwriting fees and offering costs
|
|
—
|
|
|
—
|
|
|
4,600,000
|
|
|
46
|
|
|
153,632
|
|
|
—
|
|
|
—
|
|
|
153,678
|
|
||||||
Repurchase of common shares
|
|
—
|
|
|
—
|
|
|
(47,804
|
)
|
|
—
|
|
|
(1,787
|
)
|
|
—
|
|
|
—
|
|
|
(1,787
|
)
|
||||||
Issuance of restricted common shares
|
|
—
|
|
|
—
|
|
|
292,270
|
|
|
3
|
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Issuance of unrestricted common shares
|
|
—
|
|
|
—
|
|
|
2,926
|
|
|
—
|
|
|
83
|
|
|
—
|
|
|
—
|
|
|
83
|
|
||||||
Forfeiture of restricted common shares
|
|
—
|
|
|
—
|
|
|
(5,934
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Amortization of deferred compensation
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,561
|
|
|
—
|
|
|
—
|
|
|
7,561
|
|
||||||
Declaration of dividends on common shares
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(89,488
|
)
|
|
—
|
|
|
(89,488
|
)
|
||||||
Declaration of dividends on preferred shares
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9,688
|
)
|
|
—
|
|
|
(9,688
|
)
|
||||||
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
67,508
|
|
|
—
|
|
|
67,508
|
|
||||||
Other comprehensive loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(292
|
)
|
|
(292
|
)
|
||||||
Balances at December 31, 2015
|
|
5,000,000
|
|
|
$
|
50
|
|
|
59,659,522
|
|
|
$
|
597
|
|
|
$
|
1,297,877
|
|
|
$
|
(88,675
|
)
|
|
$
|
(292
|
)
|
|
$
|
1,209,557
|
|
Repurchase of common shares
|
|
—
|
|
|
—
|
|
|
(117,129
|
)
|
|
(1
|
)
|
|
(3,019
|
)
|
|
—
|
|
|
—
|
|
|
(3,020
|
)
|
||||||
Issuance of restricted common shares
|
|
—
|
|
|
—
|
|
|
448,146
|
|
|
4
|
|
|
(4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Issuance of unrestricted common shares
|
|
—
|
|
|
—
|
|
|
3,467
|
|
|
—
|
|
|
85
|
|
|
—
|
|
|
—
|
|
|
85
|
|
||||||
Forfeiture of restricted common shares
|
|
—
|
|
|
—
|
|
|
(322,042
|
)
|
|
(3
|
)
|
|
3
|
|
|
1,516
|
|
|
—
|
|
|
1,516
|
|
||||||
Amortization of deferred compensation
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9,422
|
|
|
—
|
|
|
—
|
|
|
9,422
|
|
||||||
Declaration of dividends on common shares
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(96,156
|
)
|
|
—
|
|
|
(96,156
|
)
|
||||||
Declaration of dividends on preferred shares
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9,688
|
)
|
|
—
|
|
|
(9,688
|
)
|
||||||
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
76,706
|
|
|
—
|
|
|
76,706
|
|
||||||
Other comprehensive income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
253
|
|
|
253
|
|
||||||
Balances at December 31, 2016
|
|
5,000,000
|
|
|
$
|
50
|
|
|
59,671,964
|
|
|
$
|
597
|
|
|
$
|
1,304,364
|
|
|
$
|
(116,297
|
)
|
|
$
|
(39
|
)
|
|
$
|
1,188,675
|
|
Redemption of preferred shares
|
|
(5,000,000
|
)
|
|
(50
|
)
|
|
—
|
|
|
—
|
|
|
(120,531
|
)
|
|
(4,419
|
)
|
|
—
|
|
|
(125,000
|
)
|
||||||
Repurchase of common shares
|
|
—
|
|
|
—
|
|
|
(40,919
|
)
|
|
—
|
|
|
(1,078
|
)
|
|
—
|
|
|
—
|
|
|
(1,078
|
)
|
||||||
Issuance of restricted common shares
|
|
—
|
|
|
—
|
|
|
481,068
|
|
|
4
|
|
|
(4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Issuance of unrestricted common shares
|
|
—
|
|
|
—
|
|
|
3,327
|
|
|
—
|
|
|
85
|
|
|
—
|
|
|
—
|
|
|
85
|
|
||||||
Forfeiture of restricted common shares
|
|
—
|
|
|
—
|
|
|
(174,352
|
)
|
|
(2
|
)
|
|
2
|
|
|
820
|
|
|
—
|
|
|
820
|
|
||||||
Amortization of deferred compensation
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,412
|
|
|
—
|
|
|
—
|
|
|
7,412
|
|
||||||
Declaration of dividends on common shares
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(96,176
|
)
|
|
—
|
|
|
(96,176
|
)
|
||||||
Declaration of dividends on preferred shares
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,897
|
)
|
|
—
|
|
|
(4,897
|
)
|
||||||
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
76,235
|
|
|
—
|
|
|
76,235
|
|
||||||
Other comprehensive income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,352
|
|
|
2,352
|
|
||||||
Balances at December 31, 2017
|
|
—
|
|
|
$
|
—
|
|
|
59,941,088
|
|
|
$
|
599
|
|
|
$
|
1,190,250
|
|
|
$
|
(144,734
|
)
|
|
$
|
2,313
|
|
|
$
|
1,048,428
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
||||||
Net income
|
|
$
|
76,235
|
|
|
$
|
76,706
|
|
|
$
|
67,508
|
|
Adjustments to reconcile net income to net cash provided by
operating activities:
|
|
|
|
|
|
|
||||||
Depreciation and amortization
|
|
76,230
|
|
|
74,661
|
|
|
69,743
|
|
|||
Air rights contract amortization
|
|
520
|
|
|
520
|
|
|
520
|
|
|||
Write-off of unfavorable contract liability
|
|
(11,815
|
)
|
|
—
|
|
|
—
|
|
|||
Deferred financing costs amortization
|
|
1,682
|
|
|
1,850
|
|
|
1,882
|
|
|||
Gain on sale of hotel
|
|
(6,102
|
)
|
|
(598
|
)
|
|
—
|
|
|||
Share-based compensation
|
|
7,497
|
|
|
9,507
|
|
|
7,644
|
|
|||
Other
|
|
(593
|
)
|
|
(796
|
)
|
|
(781
|
)
|
|||
Changes in assets and liabilities:
|
|
|
|
|
|
|
||||||
Accounts receivable, net
|
|
(1,093
|
)
|
|
(4,363
|
)
|
|
(679
|
)
|
|||
Prepaid expenses and other assets
|
|
(1,976
|
)
|
|
329
|
|
|
(4,154
|
)
|
|||
Accounts payable and accrued expenses
|
|
1,283
|
|
|
1,801
|
|
|
4,069
|
|
|||
Other liabilities
|
|
1,667
|
|
|
(47
|
)
|
|
5,961
|
|
|||
Net cash provided by operating activities
|
|
143,535
|
|
|
159,570
|
|
|
151,713
|
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
|
||||||
Acquisition of hotels, net of cash acquired
|
|
—
|
|
|
—
|
|
|
(255,249
|
)
|
|||
Disposition of hotels, net of cash sold
|
|
45,991
|
|
|
2,028
|
|
|
—
|
|
|||
Improvements and additions to hotels
|
|
(55,051
|
)
|
|
(32,015
|
)
|
|
(36,782
|
)
|
|||
Change in restricted cash
|
|
5,526
|
|
|
4,233
|
|
|
3,026
|
|
|||
Net cash used in investing activities
|
|
(3,534
|
)
|
|
(25,754
|
)
|
|
(289,005
|
)
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
|
||||||
Proceeds from sale of common shares, net of underwriting fees
|
|
—
|
|
|
—
|
|
|
153,962
|
|
|||
Payment of offering costs related to sale of common shares
|
|
—
|
|
|
—
|
|
|
(284
|
)
|
|||
Redemption of preferred shares
|
|
(125,000
|
)
|
|
—
|
|
|
—
|
|
|||
Borrowings under revolving credit facility
|
|
315,000
|
|
|
185,000
|
|
|
330,000
|
|
|||
Repayments under revolving credit facility
|
|
(310,000
|
)
|
|
(235,000
|
)
|
|
(220,000
|
)
|
|||
Proceeds from issuance of unsecured term loan
|
|
225,000
|
|
|
—
|
|
|
—
|
|
|||
Proceeds from issuance of mortgage debt
|
|
—
|
|
|
150,000
|
|
|
—
|
|
|||
Principal prepayments on mortgage debt
|
|
—
|
|
|
(122,220
|
)
|
|
—
|
|
|||
Scheduled principal payments on mortgage debt
|
|
(137,657
|
)
|
|
(10,940
|
)
|
|
(10,271
|
)
|
|||
Payment of deferred financing costs
|
|
(1,783
|
)
|
|
(952
|
)
|
|
(2,311
|
)
|
|||
Payment of dividends to common shareholders
|
|
(95,909
|
)
|
|
(94,480
|
)
|
|
(81,111
|
)
|
|||
Payment of dividends to preferred shareholders
|
|
(7,320
|
)
|
|
(9,688
|
)
|
|
(9,688
|
)
|
|||
Repurchase of common shares
|
|
(1,078
|
)
|
|
(3,020
|
)
|
|
(1,787
|
)
|
|||
Net cash provided by (used in) financing activities
|
|
(138,747
|
)
|
|
(141,300
|
)
|
|
158,510
|
|
|||
Net increase (decrease) in cash
|
|
1,254
|
|
|
(7,484
|
)
|
|
21,218
|
|
|||
Cash and cash equivalents, beginning of period
|
|
43,060
|
|
|
50,544
|
|
|
29,326
|
|
|||
Cash and cash equivalents, end of period
|
|
$
|
44,314
|
|
|
$
|
43,060
|
|
|
$
|
50,544
|
|
Supplemental disclosure of cash flow information:
|
|
|
|
|
|
|
||||||
Cash paid for interest
|
|
$
|
31,828
|
|
|
$
|
30,620
|
|
|
$
|
29,668
|
|
Cash paid for income taxes
|
|
$
|
2,927
|
|
|
$
|
1,995
|
|
|
$
|
4,479
|
|
Assumption of mortgage debt related to hotel acquisition
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
125,000
|
|
Hotel
|
|
Location
|
|
Rooms
|
|
Net Assets Acquired
|
|
Acquisition Date
|
|||
Royal Palm South Beach Miami, a Tribute Portfolio Resort
(1)
|
|
Miami Beach, FL
|
|
393
|
|
|
$
|
153,662
|
|
|
March 9, 2015
|
Ace Hotel and Theater Downtown Los Angeles
|
|
Los Angeles, CA
|
|
182
|
|
|
101,687
|
|
|
April 30, 2015
|
|
|
|
|
|
575
|
|
|
$
|
255,349
|
|
|
|
(1)
|
As part of the acquisition, the Trust assumed a
$125.0 million
term loan with a carrying value that approximated its fair value at the date of acquisition. The Trust repaid the term loan at maturity on March 9, 2017. See Note 7, "Long-Term Debt," for additional information.
|
Land and land improvements
|
|
$
|
64,462
|
|
Buildings and leasehold improvements
|
|
294,498
|
|
|
Furniture, fixtures and equipment
|
|
20,518
|
|
|
Cash
|
|
100
|
|
|
Accounts receivable, net
|
|
1,823
|
|
|
Prepaid expenses and other assets
|
|
3,162
|
|
|
Accounts payable and accrued expenses
|
|
(4,089
|
)
|
|
Other liabilities
|
|
(125
|
)
|
|
Mortgage loan
|
|
(125,000
|
)
|
|
Net assets acquired
|
|
$
|
255,349
|
|
|
|
December 31,
|
||||||
|
|
2017
|
|
2016
|
||||
Land and land improvements
|
|
$
|
316,815
|
|
|
$
|
319,039
|
|
Buildings and leasehold improvements
|
|
1,628,945
|
|
|
1,634,432
|
|
||
Furniture, fixtures and equipment
|
|
228,492
|
|
|
197,815
|
|
||
Construction-in-progress
|
|
6,640
|
|
|
21,399
|
|
||
|
|
2,180,892
|
|
|
2,172,685
|
|
||
Less: accumulated depreciation and amortization
|
|
(357,675
|
)
|
|
(289,816
|
)
|
||
Property and equipment, net
|
|
$
|
1,823,217
|
|
|
$
|
1,882,869
|
|
|
|
December 31,
|
||||||
|
|
2017
|
|
2016
|
||||
Intangible assets:
|
|
|
|
|
||||
Air rights contract
(1)
|
|
$
|
36,105
|
|
|
$
|
36,105
|
|
Favorable ground leases
(2)
|
|
3,568
|
|
|
3,568
|
|
||
|
|
39,673
|
|
|
39,673
|
|
||
Less: accumulated amortization
|
|
(4,417
|
)
|
|
(3,838
|
)
|
||
Intangible assets, net
|
|
$
|
35,256
|
|
|
$
|
35,835
|
|
|
|
|
|
|
||||
Intangible liability:
|
|
|
|
|
||||
Unfavorable contract liability
(2)
|
|
$
|
—
|
|
|
$
|
14,236
|
|
Less: accumulated amortization
|
|
—
|
|
|
(2,061
|
)
|
||
Intangible liability, net (included within other liabilities)
|
|
$
|
—
|
|
|
$
|
12,175
|
|
(1)
|
In conjunction with the acquisition of the Hyatt Regency Boston on March 18, 2010, the Trust acquired an air rights contract which expires in
September 2079
and that requires no payments through maturity. The Trust recorded the fair value of the air rights contract of
$36.1 million
as an intangible asset and is amortizing the value over the term of the contract.
|
(2)
|
In conjunction with the acquisition of the Hilton Denver City Center (formerly the Denver Marriott City Center) on October 3, 2011, the Trust assumed
three
lease agreements for land parcels underlying a portion of the hotel with initial terms ending
July 2068
,
February 2072
and
April 2072
. The Trust concluded that the terms of
two
of the
three
ground leases were below market terms and recorded an aggregate of
$4.8 million
of favorable ground lease assets at the time. On July 29, 2014, the Trust terminated
one
of the
two
ground leases with below market terms in connection with acquiring the associated land parcel. The Trust is amortizing the remaining favorable ground lease asset over the life of the respective lease and including within indirect hotel operating expenses in the consolidated statements of operations. Also in conjunction with the acquisition of the Hilton Denver City Center, the Trust assumed a management agreement with a non-cancelable term ending
December 2047
. The Trust concluded that the management agreement terms were above market terms and recorded a
$14.2 million
unfavorable contract liability at the time, which the Trust amortized over the remaining non-cancelable term and included within indirect hotel operating expenses in the consolidated statements of operations. The Trust recognized an
$11.8 million
write-off of unfavorable contract liability in connection with the change in management at the Hilton Denver City Center on December 1, 2017, which is also included within indirect hotel operating expenses in the consolidated statement of operations for the year ended December 31, 2017.
|
|
|
|
Original Principal Amount
|
|
|
|
Interest Rate
|
|
Principal Amortization Period
|
|
December 31,
|
||||||||
|
Origination
|
|
|
Maturity
|
|
|
|
2017
|
|
2016
|
|||||||||
Unsecured:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Revolving credit facility
(1)
|
July 2010
|
|
n/a
|
|
March 2019
|
|
Floating
|
|
n/a
|
|
$
|
65,000
|
|
|
$
|
60,000
|
|
||
Term loan
(2)
|
April 2017
|
|
$
|
225,000
|
|
|
April 2022
|
|
Floating
|
|
n/a
|
|
225,000
|
|
|
—
|
|
||
Secured:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Royal Palm South Beach Miami, a Tribute Portfolio Resort
(3)
|
March 2015
|
|
$
|
125,000
|
|
|
March 2017
|
|
Floating
|
|
n/a
|
|
—
|
|
|
125,000
|
|
||
Boston Marriott Newton
|
May 2013
|
|
$
|
60,000
|
|
|
June 2020
|
|
3.63%
|
|
25
|
|
52,941
|
|
|
54,614
|
|
||
Le Meridien San Francisco
|
July 2013
|
|
$
|
92,500
|
|
|
August 2020
|
|
3.50%
|
|
25
|
|
81,875
|
|
|
84,476
|
|
||
Hilton Denver City Center
(4)
|
July 2012
|
|
$
|
70,000
|
|
|
August 2022
|
|
4.90%
|
|
30
|
|
63,748
|
|
|
65,048
|
|
||
Hilton Checkers Los Angeles
|
February 2013
|
|
$
|
32,000
|
|
|
March 2023
|
|
4.11%
|
|
30
|
|
29,260
|
|
|
29,884
|
|
||
W Chicago – City Center
|
July 2013
|
|
$
|
93,000
|
|
|
August 2023
|
|
4.25%
|
|
25
|
|
83,320
|
|
|
85,720
|
|
||
Hyatt Herald Square New York/Hyatt Place New York Midtown South
|
July 2014
|
|
$
|
90,000
|
|
|
July 2024
|
|
4.30%
|
|
30
|
|
87,938
|
|
|
89,414
|
|
||
Hyatt Regency Boston
|
June 2016
|
|
$
|
150,000
|
|
|
July 2026
|
|
4.25%
|
|
30
|
|
146,166
|
|
|
148,749
|
|
||
|
|
|
|
|
|
|
|
|
|
|
835,248
|
|
|
742,905
|
|
||||
Unamortized deferred financing costs
|
|
|
|
|
|
|
|
|
|
(5,696
|
)
|
|
(5,595
|
)
|
|||||
Long-term debt
|
|
|
|
|
|
|
|
|
|
|
$
|
829,552
|
|
|
$
|
737,310
|
|
(1)
|
The Trust may exercise an option to extend the maturity by
one
year, subject to certain customary conditions. As of
December 31, 2017
, the interest rate in effect was
3.14%
. See below for additional information related to the revolving credit facility.
|
(2)
|
The term loan bears interest equal to LIBOR plus
1.45%
-
2.20%
(the spread over LIBOR based on the Trust’s consolidated leverage ratio). Contemporaneous with the closing of the term loan, the Trust entered into an interest rate swap to fix LIBOR at
1.86%
for the
five
-year term (as of December 31,
2017
, the effective interest rate on the term loan was
3.46%
). Under the terms of this interest rate swap, the Trust pays fixed interest of
1.86%
per annum on a notional amount of
$225.0 million
and receives floating rate interest equal to one-month LIBOR. The effective date of this interest rate swap was
April 21, 2017
and it will mature on
April 21, 2022
.
|
(3)
|
On March 9, 2015, in connection with the acquisition of the Royal Palm South Beach Miami, a Tribute Portfolio Resort, the Trust assumed an existing loan agreement with an outstanding principal balance of
$125.0 million
. The term loan was amended and restated at the time of assumption and provided for a new
two
-year term. The term loan bore interest equal to one-month LIBOR plus
2.40%
. Contemporaneous with the assumption of the term loan, the Trust entered into an interest rate swap to effectively fix the interest rate on the term loan for the new
two
-year term at
3.34%
per annum. Under the terms of this interest rate swap, the Trust paid fixed interest of
0.94%
per annum on a notional amount of
$125.0 million
and received floating rate interest equal to one-month LIBOR. The effective date of this interest rate swap was
March 9, 2015
and it matured on
March 9, 2017
. The Trust repaid the term loan at maturity on March 9, 2017.
|
(4)
|
The loan has a term of
30
years, but is callable by the lender after
10
years, and the Trust expects the lender to call the loan at that time. The indicated maturity is based on the date the loan is callable by the lender.
|
Year
|
|
Amounts
|
||
2018
|
|
$
|
12,959
|
|
2019
|
|
78,732
|
|
|
2020
|
|
135,316
|
|
|
2021
|
|
10,233
|
|
|
2022
|
|
291,635
|
|
|
Thereafter
|
|
306,373
|
|
|
|
|
$
|
835,248
|
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Administrative and general
|
$
|
51,436
|
|
|
$
|
52,509
|
|
|
$
|
47,145
|
|
Advertising and sales
|
43,017
|
|
|
43,457
|
|
|
41,501
|
|
|||
Repairs and maintenance
|
20,956
|
|
|
20,905
|
|
|
19,801
|
|
|||
Utilities
|
15,601
|
|
|
15,695
|
|
|
15,283
|
|
|||
Franchise fees
|
10,141
|
|
|
10,212
|
|
|
9,362
|
|
|||
Management fees
(1)
|
7,975
|
|
|
24,460
|
|
|
21,959
|
|
|||
Property and other taxes
|
32,922
|
|
|
29,456
|
|
|
28,781
|
|
|||
Insurance, leases and other
|
12,164
|
|
|
12,062
|
|
|
12,691
|
|
|||
Indirect hotel operating expenses
|
$
|
194,212
|
|
|
$
|
208,756
|
|
|
$
|
196,523
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||
Numerator:
|
|
|
|
|
|
|
||||||
Net income available to common shareholders
|
|
$
|
66,542
|
|
|
$
|
67,018
|
|
|
$
|
57,820
|
|
Less: Dividends declared on unvested time-based awards
|
|
(494
|
)
|
|
(561
|
)
|
|
(560
|
)
|
|||
Less: Undistributed earnings allocated to unvested time-based awards
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Net income available to common shareholders, excluding amounts attributable to unvested time-based awards
|
|
$
|
66,048
|
|
|
$
|
66,457
|
|
|
$
|
57,260
|
|
|
|
|
|
|
|
|
||||||
Denominator:
|
|
|
|
|
|
|
||||||
Weighted-average number of common shares outstanding–basic
|
|
59,029,490
|
|
|
58,717,647
|
|
|
57,474,256
|
|
|||
Effect of dilutive unvested performance-based awards
|
|
225,754
|
|
|
—
|
|
|
452,143
|
|
|||
Weighted-average number of common shares outstanding–diluted
|
|
59,255,244
|
|
|
58,717,647
|
|
|
57,926,399
|
|
|||
|
|
|
|
|
|
|
||||||
Net income available per common share:
|
|
|
|
|
|
|
||||||
Basic
|
|
$
|
1.12
|
|
|
$
|
1.13
|
|
|
$
|
1.00
|
|
Diluted
|
|
$
|
1.11
|
|
|
$
|
1.13
|
|
|
$
|
0.99
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||
First Quarter
|
|
$
|
0.484375
|
|
|
$
|
0.484375
|
|
|
$
|
0.484375
|
|
Second Quarter
|
|
0.484375
|
|
|
0.484375
|
|
|
0.484375
|
|
|||
Third Quarter
|
|
0.010764
|
|
|
0.484375
|
|
|
0.484375
|
|
|||
Fourth Quarter
|
|
—
|
|
|
0.484375
|
|
|
0.484375
|
|
|||
|
|
$
|
0.979514
|
|
|
$
|
1.937500
|
|
|
$
|
1.937500
|
|
Trust TSR as % of Index or 2017 Performance Peer Group Total Return
|
|
Payout
(% of Maximum)
|
<67%
|
|
0%
|
67%
|
|
25%
|
100%
|
|
50%
|
≥133%
|
|
100%
|
|
|
Number of
Shares
|
|
Weighted-Average
Grant-Date
Fair Value
|
|||
Restricted common shares as of December 31, 2014
|
|
927,552
|
|
|
$
|
15.87
|
|
Granted
|
|
292,270
|
|
|
$
|
25.36
|
|
Vested
|
|
(156,618
|
)
|
|
$
|
22.76
|
|
Forfeited
|
|
(5,934
|
)
|
|
$
|
29.80
|
|
Restricted common shares as of December 31, 2015
|
|
1,057,270
|
|
|
$
|
17.40
|
|
Granted
|
|
448,146
|
|
|
$
|
15.58
|
|
Vested
|
|
(407,390
|
)
|
|
$
|
17.66
|
|
Forfeited
|
|
(322,042
|
)
|
|
$
|
11.39
|
|
Restricted common shares as of December 31, 2016
|
|
775,984
|
|
|
$
|
18.71
|
|
Granted
|
|
481,068
|
|
|
$
|
15.89
|
|
Vested
|
|
(187,185
|
)
|
|
$
|
26.21
|
|
Forfeited
|
|
(174,352
|
)
|
|
$
|
17.13
|
|
Restricted common shares as of December 31, 2017
|
|
895,515
|
|
|
$
|
15.93
|
|
|
|
Fair Value at December 31, 2017
|
||||||||||||||
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||
Assets:
|
|
|
|
|
|
|
|
|
||||||||
Interest rate swap (included within prepaid expenses and other assets)
|
|
$
|
2,313
|
|
|
$
|
—
|
|
|
$
|
2,313
|
|
|
$
|
—
|
|
|
|
$
|
2,313
|
|
|
$
|
—
|
|
|
$
|
2,313
|
|
|
$
|
—
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||
Current:
|
|
|
|
|
|
|
||||||
Federal
|
|
$
|
1,454
|
|
|
$
|
1,472
|
|
|
$
|
3,366
|
|
State
|
|
1,074
|
|
|
274
|
|
|
580
|
|
|||
|
|
2,528
|
|
|
1,746
|
|
|
3,946
|
|
|||
Deferred:
|
|
|
|
|
|
|
||||||
Federal
|
|
654
|
|
|
220
|
|
|
(1,158
|
)
|
|||
State
|
|
(93
|
)
|
|
33
|
|
|
(193
|
)
|
|||
|
|
561
|
|
|
253
|
|
|
(1,351
|
)
|
|||
Income tax expense
|
|
$
|
3,089
|
|
|
$
|
1,999
|
|
|
$
|
2,595
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||
Statutory federal income tax expense
|
|
$
|
26,970
|
|
|
$
|
26,760
|
|
|
$
|
23,833
|
|
Effect of non-taxable REIT income
|
|
(21,496
|
)
|
|
(24,902
|
)
|
|
(21,441
|
)
|
|||
Write-off of unfavorable contract liability
|
|
(4,017
|
)
|
|
—
|
|
|
—
|
|
|||
Tax Cuts and Jobs Act income tax adjustment
|
|
1,057
|
|
|
—
|
|
|
—
|
|
|||
State income tax expense, net of federal taxes
|
|
648
|
|
|
206
|
|
|
252
|
|
|||
Other
|
|
(73
|
)
|
|
(65
|
)
|
|
(49
|
)
|
|||
Income tax expense
|
|
$
|
3,089
|
|
|
$
|
1,999
|
|
|
$
|
2,595
|
|
|
|
December 31,
|
||||||
|
|
2017
|
|
2016
|
||||
Deferred tax asset:
|
|
|
|
|
||||
Deferred income–key money
|
|
$
|
1,858
|
|
|
$
|
2,299
|
|
Net operating loss carryforwards
|
|
133
|
|
|
282
|
|
||
Employee-related compensation
|
|
255
|
|
|
270
|
|
||
|
|
2,246
|
|
|
2,851
|
|
||
Deferred tax liability:
|
|
|
|
|
||||
Other
|
|
30
|
|
|
75
|
|
||
|
|
30
|
|
|
75
|
|
||
Net deferred tax asset
|
|
$
|
2,216
|
|
|
$
|
2,776
|
|
|
|
Quarter Ended - 2017
|
||||||||||||||
|
|
March 31
|
|
June 30
|
|
September 30
|
|
December 31
|
||||||||
|
|
(in thousands, except per share data)
|
||||||||||||||
Total revenue
|
|
$
|
134,874
|
|
|
$
|
162,461
|
|
|
$
|
158,277
|
|
|
$
|
142,655
|
|
Total operating expenses
|
|
122,584
|
|
|
129,222
|
|
|
128,714
|
|
|
110,586
|
|
||||
Operating income
|
|
12,290
|
|
|
33,239
|
|
|
29,563
|
|
|
32,069
|
|
||||
Net income
|
|
8,019
|
|
|
21,661
|
|
|
18,953
|
|
|
27,602
|
|
||||
Net income available to common shareholders, excluding amounts attributable to unvested time-based awards
(1)
|
|
5,473
|
|
|
19,116
|
|
|
13,980
|
|
|
27,459
|
|
||||
Net income available per common share:
(2)
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
0.09
|
|
|
0.32
|
|
|
0.24
|
|
|
0.47
|
|
||||
Diluted
|
|
0.09
|
|
|
0.32
|
|
|
0.24
|
|
|
0.46
|
|
|
|
Quarter Ended - 2016
|
||||||||||||||
|
|
March 31
|
|
June 30
|
|
September 30
|
|
December 31
|
||||||||
|
|
(in thousands, except per share data)
|
||||||||||||||
Total revenue
|
|
$
|
140,611
|
|
|
$
|
169,431
|
|
|
$
|
164,529
|
|
|
$
|
145,128
|
|
Total operating expenses
|
|
124,285
|
|
|
130,153
|
|
|
130,298
|
|
|
125,010
|
|
||||
Operating income
|
|
16,326
|
|
|
39,278
|
|
|
34,231
|
|
|
20,118
|
|
||||
Net income
|
|
10,070
|
|
|
28,542
|
|
|
25,947
|
|
|
12,147
|
|
||||
Net income available to common shareholders, excluding amounts attributable to unvested time-based awards
(1)
|
|
7,504
|
|
|
25,959
|
|
|
23,379
|
|
|
9,599
|
|
||||
Net income available per common share—basic and diluted
(2)
|
|
0.13
|
|
|
0.44
|
|
|
0.40
|
|
|
0.16
|
|
(1)
|
The sum of amounts for the four quarters may differ from the annual amount due to the required method of computing the two-class method in the respective periods.
|
(2)
|
The sum of per share amounts for the four quarters may differ from the annual per share amount due to the required method of computing weighted-average number of common shares outstanding in the respective periods.
|
Description
|
|
Encumbrances
|
|
Initial Cost
|
|
Costs Capitalized
Subsequent to
Acquisition
|
|
Gross Amount at End of Year
|
|
Accumulated
Depreciation
|
|
Year of
Acquisition
|
|
Depreciation
Life
|
||||||||||||||||||||||
|
Land
|
|
Buildings and
Improvements
|
|
|
Land
|
|
Buildings and
Improvements
|
|
Total
|
|
|||||||||||||||||||||||||
Hyatt Regency Boston
Boston, Massachusetts
|
|
$
|
146,166
|
|
|
$
|
—
|
|
|
$
|
71,462
|
|
|
$
|
11,691
|
|
|
$
|
75
|
|
|
$
|
83,078
|
|
|
$
|
83,153
|
|
|
$
|
17,195
|
|
|
2010
|
|
40 years
|
Hilton Checkers Los Angeles
Los Angeles, California
|
|
29,260
|
|
|
9,010
|
|
|
32,710
|
|
|
2,443
|
|
|
9,036
|
|
|
35,127
|
|
|
44,163
|
|
|
6,918
|
|
|
2010
|
|
40 years
|
||||||||
Boston Marriott Newton
Newton, Massachusetts
|
|
52,941
|
|
|
11,800
|
|
|
56,450
|
|
|
9,352
|
|
|
12,014
|
|
|
65,588
|
|
|
77,602
|
|
|
11,229
|
|
|
2010
|
|
40 years
|
||||||||
Le Meridien San Francisco
San Francisco, California
|
|
81,875
|
|
|
28,737
|
|
|
100,734
|
|
|
5,765
|
|
|
28,770
|
|
|
106,466
|
|
|
135,236
|
|
|
19,267
|
|
|
2010
|
|
40 years
|
||||||||
Homewood Suites Seattle Convention Center
Seattle, Washington
|
|
—
|
|
|
6,266
|
|
|
44,004
|
|
|
1,701
|
|
|
6,267
|
|
|
45,704
|
|
|
51,971
|
|
|
7,641
|
|
|
2011
|
|
40 years
|
||||||||
W Chicago – City Center
Chicago, Illinois
|
|
83,320
|
|
|
29,800
|
|
|
93,464
|
|
|
7,384
|
|
|
29,812
|
|
|
100,836
|
|
|
130,648
|
|
|
17,810
|
|
|
2011
|
|
40 years
|
||||||||
Hotel Indigo San Diego Gaslamp Quarter
San Diego, California
|
|
—
|
|
|
8,300
|
|
|
43,000
|
|
|
915
|
|
|
8,308
|
|
|
43,907
|
|
|
52,215
|
|
|
7,239
|
|
|
2011
|
|
40 years
|
||||||||
Courtyard Washington Capitol Hill/Navy Yard
Washington, DC
|
|
—
|
|
|
9,661
|
|
|
57,930
|
|
|
1,591
|
|
|
9,661
|
|
|
59,521
|
|
|
69,182
|
|
|
9,850
|
|
|
2011
|
|
40 years
|
||||||||
Hotel Adagio San Francisco, Autograph Collection
San Francisco, California
|
|
—
|
|
|
7,900
|
|
|
33,973
|
|
|
6,083
|
|
|
7,987
|
|
|
39,969
|
|
|
47,956
|
|
|
7,544
|
|
|
2011
|
|
40 years
|
||||||||
Hilton Denver City Center
Denver, Colorado
|
|
63,748
|
|
|
3,500
|
|
|
118,209
|
|
|
14,684
|
|
|
4,076
|
|
|
132,317
|
|
|
136,393
|
|
|
20,084
|
|
|
2011
|
|
40 years
|
||||||||
Hyatt Herald Square New York
New York, New York
|
|
(1
|
)
|
|
14,350
|
|
|
36,325
|
|
|
6,398
|
|
|
14,386
|
|
|
42,687
|
|
|
57,073
|
|
|
6,808
|
|
|
2011
|
|
40 years
|
||||||||
W Chicago – Lakeshore
Chicago, Illinois
|
|
—
|
|
|
40,000
|
|
|
80,800
|
|
|
27,498
|
|
|
40,139
|
|
|
108,159
|
|
|
148,298
|
|
|
17,510
|
|
|
2012
|
|
40 years
|
||||||||
Hyatt Regency Mission Bay Spa and Marina
San Diego, California
|
|
—
|
|
|
—
|
|
|
57,633
|
|
|
6,876
|
|
|
—
|
|
|
64,509
|
|
|
64,509
|
|
|
8,309
|
|
|
2012
|
|
40 years
|
||||||||
Hyatt Place New York Midtown South
New York, New York
|
|
(1
|
)
|
|
18,470
|
|
|
55,002
|
|
|
340
|
|
|
18,482
|
|
|
55,330
|
|
|
73,812
|
|
|
6,700
|
|
|
2013
|
|
40 years
|
||||||||
W New Orleans – French Quarter
New Orleans, Louisiana
|
|
—
|
|
|
4,092
|
|
|
19,468
|
|
|
322
|
|
|
4,098
|
|
|
19,784
|
|
|
23,882
|
|
|
2,346
|
|
|
2013
|
|
40 years
|
||||||||
Le Meridien New Orleans
New Orleans, Louisiana
|
|
—
|
|
|
4,700
|
|
|
54,875
|
|
|
17,109
|
|
|
4,703
|
|
|
71,981
|
|
|
76,684
|
|
|
9,814
|
|
|
2013
|
|
40 years
|
||||||||
Hyatt Centric Fisherman's Wharf
San Francisco, California
|
|
—
|
|
|
24,200
|
|
|
74,400
|
|
|
5,224
|
|
|
24,219
|
|
|
79,605
|
|
|
103,824
|
|
|
9,432
|
|
|
2013
|
|
40 years
|
||||||||
Hyatt Centric Santa Barbara
Santa Barbara, California
|
|
—
|
|
|
30,225
|
|
|
23,989
|
|
|
3,240
|
|
|
30,259
|
|
|
27,195
|
|
|
57,454
|
|
|
3,224
|
|
|
2013
|
|
40 years
|
||||||||
JW Marriott San Francisco Union Square
San Francisco, California
|
|
—
|
|
|
—
|
|
|
139,150
|
|
|
10,291
|
|
|
—
|
|
|
149,441
|
|
|
149,441
|
|
|
11,379
|
|
|
2014
|
|
40 years
|
||||||||
Royal Palm South Beach Miami, a Tribute Portfolio Resort
Miami Beach, Florida
|
|
—
|
|
|
40,100
|
|
|
222,230
|
|
|
2,835
|
|
|
40,153
|
|
|
225,012
|
|
|
265,165
|
|
|
15,954
|
|
|
2015
|
|
40 years
|
||||||||
Ace Hotel and Theater Downtown Los Angeles
Los Angeles, California
|
|
—
|
|
|
24,362
|
|
|
72,268
|
|
|
223
|
|
|
24,370
|
|
|
72,483
|
|
|
96,853
|
|
|
4,835
|
|
|
2015
|
|
40 years
|
||||||||
Totals
|
|
$
|
545,248
|
|
|
$
|
315,473
|
|
|
$
|
1,488,076
|
|
|
$
|
141,965
|
|
|
$
|
316,815
|
|
|
$
|
1,628,699
|
|
|
$
|
1,945,514
|
|
|
$
|
221,088
|
|
|
|
|
|
(1)
|
This hotel secures a mortgage loan issued in
July 2014
, which had an outstanding principal balance of
$87,938
as of
December 31, 2017
.
|
Balance as of December 31, 2014
|
$
|
1,567,242
|
|
Acquisitions
|
358,960
|
|
|
Capital expenditures and transfers from construction-in-progress
|
21,300
|
|
|
Balance as of December 31, 2015
|
1,947,502
|
|
|
Capital expenditures and transfers from construction-in-progress
|
7,034
|
|
|
Disposition
|
(1,390
|
)
|
|
Balance as of December 31, 2016
|
1,953,146
|
|
|
Capital expenditures and transfers from construction-in-progress
|
35,336
|
|
|
Disposition
|
(42,968
|
)
|
|
Balance as of December 31, 2017
|
$
|
1,945,514
|
|
Balance as of December 31, 2014
|
$
|
91,741
|
|
Depreciation and amortization
|
42,970
|
|
|
Balance as of December 31, 2015
|
134,711
|
|
|
Depreciation and amortization
|
45,199
|
|
|
Disposition
|
(42
|
)
|
|
Balance as of December 31, 2016
|
179,868
|
|
|
Depreciation and amortization
|
46,235
|
|
|
Disposition
|
(5,015
|
)
|
|
Balance as of December 31, 2017
|
$
|
221,088
|
|
1 Year Chesapeake Lodging Chart |
1 Month Chesapeake Lodging Chart |
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