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Share Name | Share Symbol | Market | Type |
---|---|---|---|
CorePoint Lodging Inc | NYSE:CPLG | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 15.98 | 0 | 01:00:00 |
☒
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Maryland
|
|
|
82-1497742
|
|
(State or other jurisdiction of incorporation or organization)
|
|
|
(I.R.S. Employer Identification No.)
|
|
|
|
|||
125 E. John Carpenter Freeway, Suite 1650
|
||||
|
Irving,
|
Texas
|
75062
|
|
(Address of principal executive offices, including zip code)
|
Title of each class
|
Trading Symbol(s)
|
Name of each exchange on which registered
|
Common Stock, $0.01 par value per share
|
CPLG
|
New York Stock Exchange
|
Large accelerated filer
|
☐
|
Accelerated filer
|
☒
|
Non-accelerated filer
|
☐
|
Smaller reporting company
|
☐
|
|
|
Emerging growth company
|
☒
|
|
|
Page No.
|
|
EXPLANATORY NOTE
|
|
|
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
|
|
|
|
|
PART I.
|
FINANCIAL INFORMATION
|
|
|
|
|
Item 1.
|
Financial Statements
|
|
|
|
|
|
Condensed Consolidated Balance Sheets (Unaudited)
|
|
|
Condensed Consolidated Statements of Operations (Unaudited)
|
|
|
Condensed Consolidated Statements of Equity (Unaudited)
|
|
|
Condensed Consolidated Statements of Cash Flows (Unaudited)
|
|
|
Notes to Condensed Consolidated Financial Statements (Unaudited)
|
|
|
|
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk
|
|
Item 4.
|
Controls and Procedures
|
|
|
|
|
PART II.
|
OTHER INFORMATION
|
|
|
|
|
Item 1.
|
Legal Proceedings
|
|
Item 1A.
|
Risk Factors
|
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
|
Item 3.
|
Defaults Upon Senior Securities
|
|
Item 4.
|
Mine Safety Disclosures
|
|
Item 5.
|
Other Information
|
|
Item 6.
|
Exhibits
|
|
Signatures
|
•
|
the duration and severity of governmental, market and individual responses to the COVID-19 pandemic, including negative effects on our operations, liquidity, access to capital, compliance with lender covenants and our ability to operate as a going concern;
|
•
|
increased operating expenses resulting from the COVID-19 pandemic, including costs related to suspending and then resuming operations at hotels, increased cleaning, additional health and safety supplies, costs of furloughing, re-hiring and retaining staff, and increases in customer acquisition costs and marketing;
|
•
|
inability to execute our non-core hotel transition strategy on satisfactory terms and in a timely manner;
|
•
|
business and financial risks inherent to the lodging industry, including adverse trends in consumer and business travel;
|
•
|
macroeconomic and other factors beyond our control;
|
•
|
contraction in the United States and global economy or low levels of economic growth due to COVID-19 or other macroeconomic effects;
|
•
|
the geographic concentration of our hotels;
|
•
|
inability to compete effectively;
|
•
|
our concentration in the La Quinta brand and any deterioration in the quality or reputation of the La Quinta brand or our relationship with the La Quinta brand;
|
•
|
our dependence on the performance of LQ Management L.L.C. (“LQM”) and other future third-party hotel managers and franchisors;
|
•
|
covenants in our hotel franchise and management agreements that limit or restrict the sale of our hotels or impose brand standards;
|
•
|
inability to maintain good relationships with LQM, La Quinta Franchising LLC (“LQ Franchising”) and other third-party hotel managers and franchisors;
|
•
|
delays or increased expense relating to our efforts to renovate, develop or redevelop our hotels, including restorations related to property damages;
|
•
|
seasonal and cyclical volatility in the lodging industry;
|
•
|
effect of severe weather, natural disasters, or other events resulting in property damage or disruption of hotel operations;
|
•
|
decreases in revenue without corresponding decreases in expenses;
|
•
|
the capital-intensive nature of our business;
|
•
|
risks resulting from significant investments in real estate;
|
•
|
risks posed by our disposition activities, as well as our acquisition, redevelopment, repositioning, renovation and re-branding activities;
|
•
|
risks associated with dispositions of hotel properties, including our ability to successfully contract with qualified buyers and the risk that purchasers may not have access to capital or meet other requirements to complete the purchase;
|
•
|
required capital expenditures and costs associated with, or failure to maintain, brand standards;
|
•
|
the loss of a brand license at one or more of our hotels;
|
•
|
cyber threats and the risk of data breaches or disruptions of our hotel franchisors’, managers’ or our own information technology systems;
|
•
|
the growth of internet reservation channels;
|
•
|
disruptions to the functioning or transition of the reservation systems, accounting systems or other technology programs for our hotels;
|
•
|
the cessation, reduction or taxation of program benefits of loyalty programs or our access to it;
|
•
|
risks of having a number of our hotels subject to ground leases, including risks related to our ability to execute and complete disposition and major renovation activities for hotels subject to ground leases;
|
•
|
unknown or contingent liabilities related to our hotels or any hotels we may acquire in the future;
|
•
|
disruptions to our ability to access capital at times and on terms reasonably acceptable to us;
|
•
|
the loss of senior executives;
|
•
|
risks associated with the employment of hotel personnel, particularly with hotels that employ unionized labor;
|
•
|
the results of the current or future audits by the Internal Revenue Service (“IRS”);
|
•
|
the nature and complexity of our structure and transactions and the related risk of successful challenges to our tax positions by the IRS or state and local taxing authorities;
|
•
|
our substantial indebtedness, upcoming maturities and compliance with terms of the agreements governing our existing indebtedness such as debt service payment requirements, liquidity requirements and other financial requirements, as well as related covenant restrictions limiting new indebtedness, certain investments and restricted payments such as paying dividends on, or repurchasing common stock;
|
•
|
risks related to qualifying and maintaining our qualifications as a real estate investment trust (“REIT”);
|
•
|
our ability to achieve and maintain effective internal control over financial reporting, including with respect to information obtained from our manager; and
|
•
|
the significant influence of affiliates of The Blackstone Group Inc. (“Blackstone”) over us.
|
Item 1.
|
Financial Statements
|
|
March 31, 2020
|
|
December 31, 2019
|
||||
Assets:
|
|
|
|
||||
Real estate:
|
|
|
|
||||
Land
|
$
|
580
|
|
|
$
|
604
|
|
Buildings and improvements
|
2,081
|
|
|
2,162
|
|
||
Furniture, fixtures, and other equipment
|
328
|
|
|
347
|
|
||
Gross operating real estate
|
2,989
|
|
|
3,113
|
|
||
Less accumulated depreciation
|
(1,186
|
)
|
|
(1,216
|
)
|
||
Net operating real estate
|
1,803
|
|
|
1,897
|
|
||
Construction in progress
|
9
|
|
|
14
|
|
||
Total real estate, net
|
1,812
|
|
|
1,911
|
|
||
|
|
|
|
||||
Right of use assets
|
21
|
|
|
21
|
|
||
Cash and cash equivalents
|
234
|
|
|
101
|
|
||
Accounts receivable
|
26
|
|
|
33
|
|
||
Other assets
|
53
|
|
|
43
|
|
||
Total Assets
|
$
|
2,146
|
|
|
$
|
2,109
|
|
|
|
|
|
||||
Liabilities and Equity:
|
|
|
|
||||
|
|
|
|
||||
Liabilities:
|
|
|
|
||||
Debt, net
|
$
|
979
|
|
|
$
|
915
|
|
Mandatorily redeemable preferred shares
|
15
|
|
|
15
|
|
||
Accounts payable and accrued expenses
|
77
|
|
|
82
|
|
||
Dividends payable
|
11
|
|
|
11
|
|
||
Other liabilities
|
50
|
|
|
43
|
|
||
Deferred tax liabilities
|
7
|
|
|
6
|
|
||
Total Liabilities
|
1,139
|
|
|
1,072
|
|
||
Commitments and contingencies
|
|
|
|
||||
Equity:
|
|
|
|
||||
Common stock, $0.01 par value per share; 1.0 billion shares authorized; 58.1 million and 57.2 million shares issued and outstanding as of March 31, 2020 and December 31, 2019, respectively
|
1
|
|
|
1
|
|
||
Additional paid-in-capital
|
956
|
|
|
954
|
|
||
Retained earnings
|
48
|
|
|
80
|
|
||
Noncontrolling interest
|
2
|
|
|
2
|
|
||
Total Equity
|
1,007
|
|
|
1,037
|
|
||
Total Liabilities and Equity
|
$
|
2,146
|
|
|
$
|
2,109
|
|
|
Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
Revenues:
|
|
|
|
||||
Rooms
|
$
|
143
|
|
|
$
|
204
|
|
Other
|
3
|
|
|
4
|
|
||
Total Revenues
|
146
|
|
|
208
|
|
||
Operating Expenses:
|
|
|
|
||||
Rooms
|
79
|
|
|
93
|
|
||
Other departmental and support
|
24
|
|
|
31
|
|
||
Property tax, insurance and other
|
16
|
|
|
17
|
|
||
Management and royalty fees
|
14
|
|
|
21
|
|
||
Corporate general and administrative
|
8
|
|
|
8
|
|
||
Depreciation and amortization
|
40
|
|
|
44
|
|
||
Impairment loss
|
2
|
|
|
—
|
|
||
Gain on sales of real estate
|
(23
|
)
|
|
—
|
|
||
Gain on casualty
|
(2
|
)
|
|
—
|
|
||
Total Operating Expenses
|
158
|
|
|
214
|
|
||
Operating Loss
|
(12
|
)
|
|
(6
|
)
|
||
Other Income (Expense):
|
|
|
|
||||
Interest expense
|
(14
|
)
|
|
(18
|
)
|
||
Other income, net
|
3
|
|
|
2
|
|
||
Total Other Expenses
|
(11
|
)
|
|
(16
|
)
|
||
Loss before income taxes
|
(23
|
)
|
|
(22
|
)
|
||
Income tax benefit (expense)
|
2
|
|
|
(5
|
)
|
||
Net loss
|
$
|
(21
|
)
|
|
$
|
(27
|
)
|
|
|
|
|
||||
Weighted average common shares outstanding - basic and diluted
|
56.5
|
|
|
58.6
|
|
||
|
|
|
|
||||
Basic and diluted loss per share
|
$
|
(0.37
|
)
|
|
$
|
(0.47
|
)
|
|
Common Stock
|
|
Additional
Paid-in-
Capital
|
|
Retained
Earnings
|
|
Noncontrolling
Interest
|
|
Total
Equity
|
|||||||||||||
|
Shares
|
|
Par Value
|
|
|
|
|
|
|
|
|
|||||||||||
Balance as of January 1, 2019
|
59.5
|
|
|
$
|
1
|
|
|
$
|
974
|
|
|
$
|
319
|
|
|
$
|
3
|
|
|
$
|
1,297
|
|
Cumulative effect of a change in accounting principle
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(27
|
)
|
|
—
|
|
|
(27
|
)
|
|||||
Dividends on common stock ($0.20 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
(12
|
)
|
|
—
|
|
|
(12
|
)
|
|||||
Equity-based compensation
|
0.4
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|||||
Purchase of common stock
|
(0.7
|
)
|
|
—
|
|
|
(9
|
)
|
|
—
|
|
|
—
|
|
|
(9
|
)
|
|||||
Balance as of March 31, 2019
|
59.2
|
|
|
$
|
1
|
|
|
$
|
967
|
|
|
$
|
281
|
|
|
$
|
3
|
|
|
$
|
1,252
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Balance as of January 1, 2020
|
57.2
|
|
|
$
|
1
|
|
|
$
|
954
|
|
|
$
|
80
|
|
|
$
|
2
|
|
|
$
|
1,037
|
|
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(21
|
)
|
|
—
|
|
|
(21
|
)
|
|||||
Dividends on common stock ($0.20 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
(11
|
)
|
|
—
|
|
|
(11
|
)
|
|||||
Equity-based compensation
|
0.9
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|||||
Balance as of March 31, 2020
|
58.1
|
|
|
$
|
1
|
|
|
$
|
956
|
|
|
$
|
48
|
|
|
$
|
2
|
|
|
$
|
1,007
|
|
|
Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net loss
|
$
|
(21
|
)
|
|
$
|
(27
|
)
|
Adjustments to reconcile net loss to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
40
|
|
|
46
|
|
||
Amortization of deferred costs and other assets
|
5
|
|
|
4
|
|
||
Impairment loss
|
2
|
|
|
—
|
|
||
Gain on casualty
|
(2
|
)
|
|
—
|
|
||
Gain on sales of real estate
|
(23
|
)
|
|
—
|
|
||
Equity-based compensation expense
|
2
|
|
|
2
|
|
||
Changes in assets and liabilities:
|
|
|
|
||||
Accounts receivable
|
2
|
|
|
(4
|
)
|
||
Other assets
|
(2
|
)
|
|
7
|
|
||
Accounts payable and accrued expenses
|
2
|
|
|
(1
|
)
|
||
Other liabilities
|
—
|
|
|
3
|
|
||
Net cash provided by operating activities
|
5
|
|
|
30
|
|
||
Cash flows from investing activities:
|
|
|
|
||||
Capital expenditures, primarily investments in existing real estate
|
(9
|
)
|
|
(22
|
)
|
||
Lender and other escrows
|
(2
|
)
|
|
—
|
|
||
Insurance proceeds related to real estate casualties
|
2
|
|
|
2
|
|
||
Proceeds from sales of real estate
|
90
|
|
|
5
|
|
||
Net cash provided by (used in) investing activities
|
81
|
|
|
(15
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Proceeds from debt
|
110
|
|
|
—
|
|
||
Repayment of debt
|
(50
|
)
|
|
(4
|
)
|
||
Payment of property insurance financing
|
(2
|
)
|
|
—
|
|
||
Dividends on common stock
|
(11
|
)
|
|
(12
|
)
|
||
Purchase of common stock
|
—
|
|
|
(6
|
)
|
||
Net cash provided by (used in) financing activities
|
47
|
|
|
(22
|
)
|
||
Increase (decrease) in cash and cash equivalents
|
133
|
|
|
(7
|
)
|
||
Cash and cash equivalents at the beginning of the period
|
101
|
|
|
68
|
|
||
Cash and cash equivalents at the end of the period
|
$
|
234
|
|
|
$
|
61
|
|
|
March 31, 2020
|
|
December 31, 2019
|
||||
|
Hotels
|
|
Rooms
|
|
Hotels
|
|
Rooms
|
Owned
|
247
|
|
32,100
|
|
270
|
|
34,800
|
Joint Venture
|
1
|
|
200
|
|
1
|
|
200
|
Totals
|
248
|
|
32,300
|
|
271
|
|
35,000
|
|
March 31, 2020
|
|
March 31, 2019
|
||||||||||||
|
Number of Hotels
|
|
Percentage of Total Hotels
|
|
Percentage of Total Revenue
|
|
Number of Hotels
|
|
Percentage of Total Hotels
|
|
Percentage of Total Revenue
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
||||
Texas
|
47
|
|
19
|
%
|
|
18
|
%
|
|
68
|
|
22
|
%
|
|
21
|
%
|
Florida
|
45
|
|
18
|
%
|
|
25
|
%
|
|
49
|
|
16
|
%
|
|
22
|
%
|
California
|
21
|
|
8
|
%
|
|
12
|
%
|
|
21
|
|
6
|
%
|
|
10
|
%
|
Total
|
113
|
|
45
|
%
|
|
55
|
%
|
|
138
|
|
44
|
%
|
|
53
|
%
|
|
March 31, 2020
|
|
December 31, 2019
|
||||
Lender and other escrows
|
$
|
21
|
|
|
$
|
20
|
|
Prepaid expenses
|
17
|
|
|
10
|
|
||
Intangible assets, net
|
4
|
|
|
4
|
|
||
Federal and state tax receivables
|
4
|
|
|
—
|
|
||
Other assets, primarily hotel supplies
|
7
|
|
|
9
|
|
||
Total other assets
|
$
|
53
|
|
|
$
|
43
|
|
|
March 31, 2020
|
|
December 31, 2019
|
|
Interest Rate (1)
|
|
Maturity Date
|
||||
CMBS Facility
|
$
|
871
|
|
|
$
|
921
|
|
|
One-month LIBOR + 2.75%
|
|
June 2020(2)
|
Revolving Facility
|
110
|
|
|
—
|
|
|
One-month LIBOR + 4.50%
|
|
May 2020(3)
|
||
|
981
|
|
|
921
|
|
|
|
|
|
||
Less deferred finance costs
|
(2
|
)
|
|
(6
|
)
|
|
|
|
|
||
Total debt, net
|
$
|
979
|
|
|
$
|
915
|
|
|
|
|
|
(1)
|
One-month LIBOR at March 31, 2020 and December 31, 2019 was 0.99% and 1.76%, respectively.
|
(2)
|
After maturity in June 2020, includes five one-year extension options at our option, provided there is no event of default existing as of the commencement of the applicable extension period and the CorePoint CMBS Borrower (as defined below) either extends the current interest rate cap or purchases a new interest rate cap covering the extension period at a strike price as set forth in the CMBS Loan Agreement (as defined below).
|
(3)
|
After maturity in May 2020, includes a one-year extension option at our option, subject to certain conditions, including that the maturity of the CMBS Facility be extended to a date no earlier than the maturity of the Revolving Facility (as defined below).
|
|
March 31, 2020
|
|
December 31, 2019
|
||||
Due to hotel manager
|
$
|
34
|
|
|
$
|
26
|
|
Real estate taxes
|
14
|
|
|
22
|
|
||
Sales and occupancy taxes
|
5
|
|
|
7
|
|
||
Interest
|
2
|
|
|
2
|
|
||
Other accounts payable and accrued expenses
|
22
|
|
|
25
|
|
||
Total accounts payable and accrued expenses
|
$
|
77
|
|
|
$
|
82
|
|
|
|
|
|
||||
Operating lease liabilities
|
$
|
24
|
|
|
$
|
25
|
|
Property insurance financing
|
9
|
|
|
2
|
|
||
Below market leases, net
|
4
|
|
|
5
|
|
||
Other liabilities
|
13
|
|
|
11
|
|
||
Total other liabilities
|
$
|
50
|
|
|
$
|
43
|
|
Year
|
Amount
|
||
2020 (remaining nine months)
|
$
|
3
|
|
2021
|
3
|
|
|
2022
|
3
|
|
|
2023
|
3
|
|
|
2024
|
3
|
|
|
2025
|
2
|
|
|
Thereafter
|
58
|
|
|
|
$
|
75
|
|
|
Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
Operating lease revenues:
|
|
|
|
||||
Rooms
|
$
|
143
|
|
|
$
|
204
|
|
Other
|
1
|
|
|
1
|
|
||
Total lease revenues
|
144
|
|
|
205
|
|
||
|
|
|
|
||||
Customer revenues
|
2
|
|
|
3
|
|
||
Total revenues
|
$
|
146
|
|
|
$
|
208
|
|
|
RSAs
|
|
PSUs
|
|
RSUs
|
|||||||||||||||
|
Number of
Shares
|
|
Weighted-Average
Grant Date
Fair Value
|
|
Number of
Shares
|
|
Weighted-Average
Grant Date
Fair Value
|
|
Number of
Shares
|
|
Weighted-Average
Grant Date
Fair Value
|
|||||||||
Outstanding at January 1, 2020
|
653,790
|
|
|
$
|
20.30
|
|
|
368,969
|
|
|
$
|
6.99
|
|
|
5,072
|
|
|
$
|
6.05
|
|
Granted
|
856,559
|
|
|
3.90
|
|
|
979,482
|
|
|
5.42
|
|
|
101
|
|
|
10.25
|
|
|||
Vested
|
(3,241
|
)
|
|
10.25
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Outstanding at March 31, 2020
|
1,507,108
|
|
|
$
|
11.00
|
|
|
1,348,451
|
|
|
$
|
5.85
|
|
|
5,173
|
|
|
$
|
6.13
|
|
|
RSAs
|
|
PSUs
|
|
RSUs
|
|||||||||||||||
|
Number of
Shares
|
|
Weighted-Average
Grant Date
Fair Value
|
|
Number of
Shares
|
|
Weighted-Average
Grant Date
Fair Value
|
|
Number of
Shares
|
|
Weighted-Average
Grant Date
Fair Value
|
|||||||||
Outstanding at January 1, 2019
|
884,068
|
|
|
$
|
20.50
|
|
|
—
|
|
|
$
|
—
|
|
|
14,624
|
|
|
$
|
5.77
|
|
Granted
|
351,276
|
|
|
10.58
|
|
|
447,527
|
|
|
6.99
|
|
|
239
|
|
|
12.43
|
|
|||
Vested
|
(74,810
|
)
|
|
3.00
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Forfeited
|
(811
|
)
|
|
6.85
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Outstanding at March 31, 2019
|
1,159,723
|
|
|
$
|
18.64
|
|
|
447,527
|
|
|
$
|
6.99
|
|
|
14,863
|
|
|
$
|
5.88
|
|
|
Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
Current tax benefit (expense)
|
$
|
4
|
|
|
$
|
(5
|
)
|
Deferred tax expense
|
(2
|
)
|
|
—
|
|
||
Total income tax benefit (expense)
|
$
|
2
|
|
|
$
|
(5
|
)
|
|
March 31, 2020
|
|
December 31, 2019
|
||||||||||||
|
Carrying
Amount
|
|
Fair
Value
|
|
Carrying
Amount
|
|
Fair
Value
|
||||||||
Debt - CMBS Facility(1)(2)
|
$
|
871
|
|
|
$
|
749
|
|
|
$
|
921
|
|
|
$
|
921
|
|
Debt - Revolving Facility(1)(2)
|
$
|
110
|
|
|
$
|
91
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Mandatorily redeemable preferred shares(1)
|
$
|
15
|
|
|
$
|
8
|
|
|
$
|
15
|
|
|
$
|
15
|
|
(1)
|
Classified as Level 3 under the fair value hierarchy.
|
(2)
|
Carrying amount excludes deferred finance costs of $2 million as of March 31, 2020 and $6 million as of December 31, 2019.
|
|
Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
Supplemental disclosure of cash flow information:
|
|
|
|
||||
Interest paid during the period
|
$
|
10
|
|
|
$
|
14
|
|
Income taxes paid during the period, net of refunds
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
||||
Non-cash investing and financing activities:
|
|
|
|
||||
Capital expenditures included in accounts payable and accrued expenses
|
$
|
—
|
|
|
$
|
10
|
|
Transfer of real estate from construction in progress to operating real estate
|
$
|
—
|
|
|
$
|
9
|
|
Dividends payable on common stock
|
$
|
11
|
|
|
$
|
12
|
|
Recognition of right of use operating lease assets and operating lease liabilities
|
$
|
—
|
|
|
$
|
27
|
|
Financing of property insurance prepaids
|
$
|
9
|
|
|
$
|
—
|
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
|
Amount (1)
|
|
Sales Metrics (1)
|
|||
Revenues (2)
|
$
|
37.2
|
|
|
2.7x
|
|
RevPAR (3)
|
$
|
37.33
|
|
|
N/A
|
|
Hotel Adjusted EBITDAre (4)
|
$
|
3.0
|
|
|
33.8x
|
|
FFO (5)
|
$
|
0.7
|
|
|
1.4
|
%
|
Capital expenditures (6)
|
$
|
2.2
|
|
|
N/A
|
|
Gain on sales of real estate
|
$
|
22.9
|
|
|
N/A
|
|
(1)
|
Hotel Adjusted EBITDAre and FFO are non-GAAP financial measures. See “Non-GAAP Financial Measures” below for definitions and limitations of these terms. The related “Sales Metrics,” which are common in the lodging industry in evaluating dispositions, as further defined below, are referred to as the revenue multiple, EBITDAre multiple and FFO yield. Amounts presented are the aggregated amounts and for Sales Metrics are based on a weighted average for each category using unrounded dollar amounts.
|
(2)
|
Revenues represent the revenues for the trailing twelve-month period from the calendar quarter end date preceding the particular hotel’s disposition. The Sales Metric referred to as the revenue multiple is calculated as the gross sales price divided by such revenues. Closing costs and other costs due from the sale have averaged approximately 10% of the gross sales price.
|
(3)
|
RevPAR represents the weighted average RevPAR for the trailing twelve-month period. Our weighted average Comparable Hotel RevPAR for the three months ended March 31, 2020 is $48.20.
|
(4)
|
Hotel Adjusted EBITDAre represents Hotel Adjusted EBITDAre for the trailing twelve-month period from the calendar quarter end date preceding the particular hotel’s disposition. The Sales Metric referred to as the Hotel Adjusted EBITDAre multiple is calculated as gross sales price divided by such calculated Hotel Adjusted EBITDAre.
|
(5)
|
FFO represents the FFO for the trailing twelve-month period from the calendar quarter end date preceding the particular hotel’s disposition. The FFO amount includes the related annualized interest expense based on the actual debt principal paid down for each hotel sale using the March 31, 2020 interest rate of 3.74%. The FFO amount includes only directly associated hotel expenses and does not include any allocated general and administrative or other corporate expenses. The Sales Metric referred to as FFO yield is calculated as such calculated FFO divided by the gross sales price less the actual debt principal paid down.
|
(6)
|
Capital expenditures represent capital expenditures for the trailing twelve-month period from the calendar quarter end date preceding the particular hotel’s disposition.
|
|
Number of Hotels
|
|
ADR
|
|
Occupancy
|
|||
Upper upscale
|
3
|
|
$
|
165.50
|
|
|
71.4
|
%
|
Upscale
|
17
|
|
$
|
130.64
|
|
|
63.3
|
%
|
Upper midscale
|
51
|
|
$
|
104.38
|
|
|
64.1
|
%
|
Midscale
|
136
|
|
$
|
83.19
|
|
|
63.3
|
%
|
Economy
|
41
|
|
$
|
62.37
|
|
|
60.2
|
%
|
Total
|
248
|
|
$
|
90.23
|
|
|
63.1
|
%
|
•
|
do not reflect changes in, or cash requirements for, our working capital needs;
|
•
|
do not reflect our interest expense, or the cash requirements necessary to service interest or principal payments, on our indebtedness;
|
•
|
do not reflect our tax expense or the cash requirements to pay our taxes;
|
•
|
do not reflect historical cash expenditures or future requirements for capital expenditures or contractual commitments;
|
•
|
EBITDAre, Adjusted EBITDAre and Hotel Adjusted EBITDAre do not include gains or losses on the disposition of properties which may be material to our operating performance and cash flow;
|
•
|
Adjusted EBITDAre and Hotel Adjusted EBITDAre do not reflect the impact on earnings or changes resulting from matters that we consider not to be indicative of our future operations, including but not limited to impairment, acquisition and disposition activities and restructuring expenses;
|
•
|
although depreciation, amortization and impairment are non-cash charges, the assets being depreciated, amortized or impaired will often have to be replaced, upgraded or repositioned in the future, and EBITDA, EBITDAre, Adjusted EBITDAre, and Hotel Adjusted EBITDAre do not reflect any cash requirements for such replacements; and
|
•
|
other companies in our industry may calculate EBITDA, EBITDAre, Adjusted EBITDAre, and Hotel Adjusted EBITDAre differently, limiting their usefulness as comparative measures.
|
|
Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
Net loss
|
$
|
(21
|
)
|
|
$
|
(27
|
)
|
Interest expense
|
14
|
|
|
18
|
|
||
Income tax (benefit) expense
|
(2
|
)
|
|
5
|
|
||
Depreciation and amortization
|
40
|
|
|
44
|
|
||
EBITDA
|
31
|
|
|
40
|
|
||
Impairment loss
|
2
|
|
|
—
|
|
||
Gain on sales of real estate
|
(23
|
)
|
|
—
|
|
||
Gain on casualty
|
(2
|
)
|
|
—
|
|
||
EBITDAre
|
8
|
|
|
40
|
|
||
Equity-based compensation expense
|
2
|
|
|
2
|
|
||
Spin-Off and reorganization expenses
|
—
|
|
|
1
|
|
||
Other, net
|
—
|
|
|
—
|
|
||
Adjusted EBITDAre
|
$
|
10
|
|
|
$
|
43
|
|
Corporate general and administrative expenses
|
5
|
|
|
5
|
|
||
Hotel Adjusted EBITDAre
|
$
|
15
|
|
|
$
|
48
|
|
•
|
Other, net for the three months ended March 31, 2020 and 2019 includes adjustments to exclude business interruption insurance proceeds of $2 million and $1 million, respectively. These proceeds are offset by $2 million and $1 million for the three months ended March 31, 2020 and 2019, respectively, for other expenses that are not representative of our current or future operating performance.
|
•
|
Corporate general and administrative expenses include the additional corporate-level expenses not already adjusted in calculating Adjusted EBITDAre.
|
|
Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
Net loss
|
$
|
(21
|
)
|
|
$
|
(27
|
)
|
Depreciation and amortization
|
40
|
|
|
44
|
|
||
Impairment loss
|
2
|
|
|
—
|
|
||
Gain on sales of real estate
|
(23
|
)
|
|
—
|
|
||
Gain on casualty
|
(2
|
)
|
|
—
|
|
||
Nareit defined FFO attributable to common stockholders
|
(4
|
)
|
|
17
|
|
||
Equity-based compensation expense
|
2
|
|
|
2
|
|
||
Noncash income tax expense
|
2
|
|
|
—
|
|
||
Amortization expense of deferred financing costs
|
4
|
|
|
4
|
|
||
Spin-Off and reorganization expenses
|
—
|
|
|
1
|
|
||
Other, net
|
—
|
|
|
—
|
|
||
Adjusted FFO attributable to common stockholders
|
$
|
4
|
|
|
$
|
24
|
|
|
|
|
|
||||
Weighted average number of shares outstanding, diluted
|
57.9
|
|
|
59.5
|
|
•
|
Other, net for the three months ended March 31, 2020 and 2019 includes adjustments to exclude business interruption insurance proceeds of $2 million and $1 million, respectively. These proceeds are offset by $2 million and $1 million for the three months ended March 31, 2020 and 2019, respectively, for other expenses that are not representative of our current or future operating performance.
|
•
|
Weighted average number of shares outstanding, diluted presented above may differ from weighted average number of shares outstanding, diluted presented for GAAP purposes when there is a net loss and all potentially dilutive securities are anti-dilutive.
|
|
|
Comparable Hotels
|
|
Non-comparable Hotels (1)
|
|
Total
|
||||||||||||||||||
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||||||
Total Revenues
|
|
$
|
140
|
|
|
$
|
179
|
|
|
$
|
6
|
|
|
$
|
29
|
|
|
$
|
146
|
|
|
$
|
208
|
|
Property-level expenses
|
|
(123
|
)
|
|
(133
|
)
|
|
(8
|
)
|
|
(27
|
)
|
|
(131
|
)
|
|
(160
|
)
|
||||||
Hotel Adjusted EBITDAre
|
|
$
|
17
|
|
|
$
|
46
|
|
|
$
|
(2
|
)
|
|
$
|
2
|
|
|
$
|
15
|
|
|
$
|
48
|
|
(1)
|
Non-comparable hotels include sold hotels and hotels that sustained substantial property damage or other business interruption due to hurricane, fire or other natural disasters. Of the 248 hotels in our portfolio as of March 31, 2020, 241 have been classified as Comparable Hotels. We sold 23 operating hotels during the first quarter of 2020. As of March 31, 2020, seven of our hotels were classified as non-comparable.
|
|
Week Ended May 16,
|
|
Week Ended April 25,
|
|
Week Ended March 28,
|
||||||
|
2020
|
|
2020
|
|
2020
|
||||||
Occupancy
|
35.9
|
%
|
|
23.3
|
%
|
|
19.9
|
%
|
|||
ADR
|
$
|
64.45
|
|
|
$
|
63.58
|
|
|
$
|
72.30
|
|
RevPAR
|
$
|
23.16
|
|
|
$
|
14.80
|
|
|
$
|
14.40
|
|
|
|
Increases in Interest Rates
|
||||||||||||||
|
|
2.0%
|
|
1.5%
|
|
1.0%
|
|
0.5%
|
||||||||
CMBS Facility
|
|
$
|
(17
|
)
|
|
$
|
(13
|
)
|
|
$
|
(9
|
)
|
|
$
|
(4
|
)
|
Revolving Facility
|
|
(2
|
)
|
|
(2
|
)
|
|
(1
|
)
|
|
(1
|
)
|
||||
Interest rate cap
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total
|
|
$
|
(19
|
)
|
|
$
|
(15
|
)
|
|
$
|
(10
|
)
|
|
$
|
(5
|
)
|
Item 1.
|
Legal Proceedings
|
Item 1A.
|
Risk Factors
|
•
|
contraction in the U.S. economy or low levels of economic growth, which could adversely affect our revenues and profitability as well as limit or slow our future growth;
|
•
|
many of the expenses associated with owning hotels, such as debt-service payments, property taxes, insurance, utilities and employee wages and benefits, as well as expenses related to being an independent public company, being inflexible and not necessarily decreasing in tandem with a reduction in revenue at the hotels;
|
•
|
the capital intensity of our business;
|
•
|
reductions in our ability to maintain or improve our portfolio or act in accordance with applicable brand standards;
|
•
|
reduction in the availability of financing and other liquidity sources; and
|
•
|
changes to estimates or projections used to assess the fair value of our assets, or operating results that are lower than our current estimates at certain properties, which may cause us to incur impairment charges that could adversely affect our results of operations.
|
(a)
|
Unregistered Sales of Securities
|
(b)
|
Use of Proceeds
|
(c)
|
Issuer Purchases of Equity Securities
|
Period
|
Total Number
of
Shares
Purchased (1)
|
|
Average
Price
Paid per
Share
|
|
Total Number of
Shares
Purchased as
Part of Publicly
Announced
Program (2)
|
|
Maximum
Approximate Dollar Value of
Shares that May
Yet Be
Purchased
Under the Program (2)
|
||||
January 1 through January 30, 2020
|
1,335
|
|
|
$
|
10.25
|
|
|
—
|
|
|
$21,060,769
|
February 1 through February 29, 2020
|
—
|
|
|
—
|
|
|
—
|
|
|
$21,060,769
|
|
March 1 through March 31, 2020
|
—
|
|
|
—
|
|
|
—
|
|
|
$21,060,769
|
|
Total
|
1,335
|
|
|
$
|
10.25
|
|
|
—
|
|
|
|
(1)
|
Reflects shares purchased to satisfy tax withholding obligations incurred upon the vesting of restricted stock under our 2018 Omnibus Incentive Plan. There were no shares purchased under our share repurchase program during the quarter ended March 31, 2020.
|
(2)
|
On March 21, 2019, our board of directors authorized a $50 million share repurchase program. We may purchase shares of common stock in the open market, in privately negotiated transactions or in such other manner as determined by it, including through repurchase plans complying with the rules and regulations of the SEC. The share repurchase program does not obligate us to repurchase any dollar amount or number of shares of common stock and the program may be suspended or discontinued at any time.
|
Item 3.
|
Defaults Upon Senior Securities
|
Item 4.
|
Mine Safety Disclosures
|
Item 5.
|
Other Information
|
Item 6.
|
Exhibits
|
Exhibit
No.
|
Description
|
|
|
2.1
|
|
10.1
|
|
10.2
|
|
10.3
|
|
10.4
|
|
31.1
|
|
31.2
|
|
32.1
|
|
32.2
|
|
101
|
The following materials from the Company’s Quarterly Report on Form 10-Q for the three months ended March 31, 2020 formatted in Inline Extensible Business Reporting Language (iXBRL): (i) the Consolidated Statements of Operations, (ii) the Consolidated Balance Sheets, (iii) the Consolidated Statements of Cash Flows, (iv) the Consolidated Statements of Equity and (v) related notes.
|
104
|
Cover Page Interactive Data file (formatted as Inline XBRL and contained in Exhibit 101)
|
|
|
COREPOINT LODGING INC.
|
|
|
|
(Registrant)
|
|
|
|
|
|
Date:
|
May 20, 2020
|
By:
|
/s/ Keith A. Cline
|
|
|
|
Keith A. Cline
|
|
|
|
President and Chief Executive Officer
|
|
|
|
(Principal Executive Officer)
|
|
|
|
|
Date:
|
May 20, 2020
|
By:
|
/s/ Daniel E. Swanstrom II
|
|
|
|
Daniel E. Swanstrom II
|
|
|
|
Executive Vice President and Chief Financial Officer
|
|
|
|
(Principal Financial Officer)
|
|
|
|
|
Date:
|
May 20, 2020
|
By:
|
/s/ Howard Garfield
|
|
|
|
Howard Garfield
|
|
|
|
Senior Vice President, Chief Accounting Officer and Treasurer
|
|
|
|
(Principal Accounting Officer)
|
1 Year CorePoint Lodging Chart |
1 Month CorePoint Lodging Chart |
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