Chesapeake Lodging Trust (NYSE:CHSP.PRA) Q2 2016 Earnings Conference Call - Preliminary Transcript

Jul 29, 2016 • 11:00 am ET


Chesapeake Lodging Trust (NYSE:CHSP.PRA) Q2 2016 Earnings Conference Call - Preliminary Transcript


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Good morning. My name is Dan, and I will be your conference operator today. At this time, I would like to welcome everyone to the Chesapeake Lodging Trust Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers remarks, there will be a question-and-answer session. [Operator Instructions].

Thank you. Doug Vicari, you may begin your conference.

Douglas Vicari

Okay. Thank you, Dan. Good afternoon and welcome to the Chesapeake Lodging Trust second quarter 2016 earnings call. This is Doug Vicari, Executive Vice President and CFO of Chesapeake. Also on the call this morning are Jim Francis, our President and CEO; and Graham Wootten, our Chief Accounting Officer.

As is our custom, I'll begin with a brief overview of our quarter, including a review of our consolidated results, our summary hotel operating performance, our financial position and an update on our near-term outlook. After I conclude my commentary, Jim will provide greater detail on the performance of our hotel portfolio. He will also provide some general thoughts on the macro industry trends and more specifics regarding the outlook for our hotel performance.

As a reminder, any statement we make this morning about future results and performance or plans and objectives are forward-looking. Actual results may vary as a result of factors, risks and uncertainties over which we have no control. And with that housekeeping behind us, let me begin with a brief review of our highlights and consolidated results for the quarter. So for the quarter, we reported total revenue of $169.4 million and net income available to common shareholders of $26.1 million or $0.44 per diluted share.

Our adjusted corporate EBITDA was $57.9 million, and our adjusted AFFO was $43.9 million or $0.75 per diluted share. Let me move on to our hotel operating statistics. As you're all aware, we pre-announced our RevPAR performance for the second quarter on July 12. And for the quarter our portfolio of 22 hotels produced RevPAR of $208.43, it represents an increase of 2.2% over the prior year and was driven by strong occupancy of 88.1% and an average daily rate of $236.69.

These revenue trends resulted in adjusted hotel EBITDA of $62.6 million and our adjusted hotel EBITDA margin was a very strong 36.9% and that was a 50 basis point increase over the prior year. Our top line results came in below the guidance we provided to the market on April 28. And obviously, we are disappointed with that outcome. However, we were able to increase our occupancy during the quarter.

But where flatten RevPAR's transient pricing strength prove to be inconsistent throughout the period. Additionally we're able to increase our market share during the quarter in comparison to our direct competitors in this environment, given the quality of our assets. Our asset management initiatives also enable us to drive solid flow-through and margin growth, as our EBITDA and AFFO were well within our original guidance ranges. Jim will provide much more detailed information on our individual hotel