Chesapeake Lodging Trust (NYSE:CHSP.PRA) Q3 2016 Earnings Conference Call - Preliminary Transcript

Nov 01, 2016 • 05:00 pm ET

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Chesapeake Lodging Trust (NYSE:CHSP.PRA) Q3 2016 Earnings Conference Call - Preliminary Transcript

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Presentation
Operator
Operator

Good afternoon. My name is Alex, and I will be your conference operator today. At this time, I would like to welcome everyone to the Chesapeake Lodging Trust Third Quarter Earnings Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. (Operator Instructions). Thank you.

Doug Vicari, you may begin your conference.

Executive
Douglas Vicari

Thank you, Alex. Good afternoon and welcome to the Chesapeake Lodging Trust third quarter earnings call. This is Doug Vicari, Executive Vice President and CFO of Chesapeake. Also on the call this afternoon 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 afternoon 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 did report total revenue of $164.5 million and net income available to common shareholders of $23.5 million, or $0.40 per diluted share.

Our adjusted corporate EBITDA was 52.9 million and our adjusted FFO was 42.1 million or $0.71 per diluted share. Let me now briefly highlight some of our key operating statistics. For the quarter our portfolio of 22 hotels produced RevPAR of $207.12 that represented decrease of 0.7% versus the prior year. Our occupancy for the period was a strong 88.8% that represents an increase of 90 basis points while our average daily rate was $233.19 and that was a decline of 1.7% versus the prior year. These top line trends resulted in adjusted hotel EBITDA of 57 million and our adjusted hotel EBITDA margin was 34.6% that represented 60 basis point decrease versus the prior year.

Our overall results for the quarter came in below the guidance we provided to the market on July 29th and obviously we are disappointed with that outcome. Transient pricing pressure continues to be a headwind during the quarter as corporate travel trends continue to be inconsistent and difficult to forecast. Our asset management initiatives enable us to manage our flow through and our margin performance as efficiently as possible given the revenue decline was in the form of increased occupancy and declining ADR.

We do see these headwinds continuing as we work through the fourth quarter and these trends are reflected in our updated guidance. Jim will provide much more detailed information