Net Income of $0.05 Per Common Share
100.0% Increase in Normalized FFO to $0.54 Per Common Share
26.3% Increase in Adjusted EBITDAre to $173.5 Million
NEWTON, Mass.–(BUSINESS WIRE)–Service Properties Trust (Nasdaq: SVC) today announced its financial results for the quarter ended September 30, 2022.
Todd Hargreaves, President and Chief Investment Officer of SVC, made the following statement:
“Hotel operating trends continued to recover in the third quarter, driven by increased bookings at our urban and suburban select service hotels. Comparable RevPAR increased by 29.6% over the prior year quarter. The solid performance of our operators generated a 77.1% increase in comparable hotel EBITDA over the same period last year.
Business activity at our hotels in September and October increased, led by mid-week booking improvement. We expect to benefit further in the coming quarters from the continued business travel recovery, particularly at our full service and select service hotels. With ongoing hotel fundamentals improving, over $750 million of available liquidity and steady cash flows from our net lease portfolio, we increased our quarterly dividend to $0.20 per common share, which reflects our confidence in the business going forward.”
Results for the Quarter Ended September 30, 2022:
|
Three Months Ended September 30, |
||||||
|
2022 |
|
2021 |
||||
|
($ in thousands, except per share data) |
||||||
Net income (loss) |
$ |
7,500 |
|
$ |
(59,714 |
) |
|
Net income (loss) per common share |
$ |
0.05 |
|
$ |
(0.36 |
) |
|
Normalized FFO (1) |
$ |
88,458 |
|
$ |
43,781 |
|
|
Normalized FFO per common share (1) |
$ |
0.54 |
|
$ |
0.27 |
|
|
Adjusted EBITDAre (1) |
$ |
173,455 |
|
$ |
137,324 |
|
(1) |
Additional information and reconciliations of net income (loss) determined in accordance with U.S. generally accepted accounting principles, or GAAP, to certain non-GAAP measures, including FFO, Normalized FFO, EBITDA, EBITDAre and Adjusted EBITDAre for the quarters ended September 30, 2022 and 2021 appear later in this press release. |
- Net income (loss): Net income for the quarter ended September 30, 2022 was $7.5 million, or $0.05 per diluted common share, compared to a net loss of $59.7 million, or $0.36 per diluted common share, for the quarter ended September 30, 2021. Net income for the quarter ended September 30, 2022 includes $23.1 million, or $0.14 per diluted common share, of net unrealized gains on equity securities and a $1.2 million, or $0.01 per diluted common share, loss on asset impairment. Net loss for the quarter ended September 30, 2021 includes $24.3 million, or $0.15 per diluted common share, of net unrealized gains on equity securities and $3.1 million, or $0.02 per diluted common share, of transaction related costs. The weighted average number of diluted common shares outstanding was 164.7 million and 164.6 million for the quarters ended September 30, 2022 and 2021, respectively.
- Normalized FFO: Normalized FFO for the quarter ended September 30, 2022 were $88.5 million, or $0.54 per diluted common share, compared to Normalized FFO of $43.8 million, or $0.27 per diluted common share, for the quarter ended September 30, 2021.
- Adjusted EBITDAre: Adjusted EBITDAre for the quarter ended September 30, 2022 compared to the quarter ended September 30, 2021 increased 26.3% to $173.5 million.
Hotel Portfolio:
As of September 30, 2022, SVC’s 242 hotels were operated by subsidiaries of Sonesta Holdco Corporation, or Sonesta (200 hotels), Hyatt Hotels Corporation, or Hyatt (17 hotels), Radisson Hospitality, Inc., or Radisson (eight hotels), Marriott International, Inc., or Marriott (16 hotels), and InterContinental Hotels Group, plc, or IHG (one hotel).
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
||||||||||||||||||
|
|
2022 |
|
2021 |
|
Change |
|
2022 |
|
2021 |
|
Change |
||||||||||
|
|
($ in thousands, except hotel statistics) |
||||||||||||||||||||
Comparable Hotels |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
No. of hotels |
|
|
240 |
|
|
|
240 |
|
|
— |
|
|
|
239 |
|
|
|
239 |
|
|
— |
|
No. of rooms or suites |
|
|
40,246 |
|
|
|
40,246 |
|
|
— |
|
|
|
39,874 |
|
|
|
39,874 |
|
|
— |
|
Occupancy |
|
|
65.9 |
% |
|
|
59.3 |
% |
|
6.6 |
pts |
|
|
62.0 |
% |
|
|
51.2 |
% |
|
10.8 |
pts |
ADR |
|
$ |
140.05 |
|
|
$ |
120.08 |
|
|
16.6 |
% |
|
$ |
133.41 |
|
|
$ |
107.79 |
|
|
23.8 |
% |
Hotel RevPAR |
|
$ |
92.29 |
|
|
$ |
71.21 |
|
|
29.6 |
% |
|
$ |
82.71 |
|
|
$ |
55.19 |
|
|
49.9 |
% |
Hotel operating revenues (1) |
|
$ |
398,399 |
|
|
$ |
296,521 |
|
|
34.4 |
% |
|
$ |
1,046,980 |
|
|
$ |
680,787 |
|
|
53.8 |
% |
Hotel operating expenses (1) |
|
$ |
317,247 |
|
|
$ |
250,698 |
|
|
26.5 |
% |
|
$ |
864,702 |
|
|
$ |
647,694 |
|
|
33.5 |
% |
Hotel EBITDA (1) |
|
$ |
81,152 |
|
|
$ |
45,823 |
|
|
77.1 |
% |
|
$ |
182,278 |
|
|
$ |
33,093 |
|
|
n/m |
|
Hotel EBITDA margin |
|
|
20.4 |
% |
|
|
15.5 |
% |
|
4.9 |
pts |
|
|
17.4 |
% |
|
|
4.9 |
% |
|
12.5 |
pts |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
All Hotels |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
No. of hotels |
|
|
242 |
|
|
|
304 |
|
|
(62 |
) |
|
|
242 |
|
|
|
304 |
|
|
(62 |
) |
No. of rooms or suites |
|
|
40,563 |
|
|
|
48,439 |
|
|
(7,876 |
) |
|
|
40,563 |
|
|
|
48,439 |
|
|
(7,876 |
) |
Occupancy |
|
|
65.8 |
% |
|
|
60.1 |
% |
|
5.7 |
pts |
|
|
61.9 |
% |
|
|
52.2 |
% |
|
9.7 |
pts |
ADR |
|
$ |
140.05 |
|
|
$ |
114.55 |
|
|
22.3 |
% |
|
$ |
134.19 |
|
|
$ |
102.84 |
|
|
30.5 |
% |
Hotel RevPAR |
|
$ |
92.15 |
|
|
$ |
68.84 |
|
|
33.9 |
% |
|
$ |
83.06 |
|
|
$ |
53.68 |
|
|
54.7 |
% |
Hotel operating revenues (1)(2) |
|
$ |
400,453 |
|
|
$ |
338,375 |
|
|
18.3 |
% |
|
$ |
1,116,843 |
|
|
$ |
787,463 |
|
|
41.8 |
% |
Hotel operating expenses (1)(2) |
|
$ |
321,509 |
|
|
$ |
287,265 |
|
|
11.9 |
% |
|
$ |
942,678 |
|
|
$ |
744,638 |
|
|
26.6 |
% |
Hotel EBITDA (1)(2) |
|
$ |
78,944 |
|
|
$ |
51,110 |
|
|
54.5 |
% |
|
$ |
174,165 |
|
|
$ |
42,825 |
|
|
n/m |
|
Hotel EBITDA margin |
|
|
19.7 |
% |
|
|
15.1 |
% |
|
4.6 |
pts |
|
|
15.6 |
% |
|
|
5.4 |
% |
|
10.2 |
pts |
(1) |
Reconciliations of hotel operating revenues and hotel operating expenses used to determine Hotel EBITDA from hotel operating revenues and hotel operating expenses determined in accordance with GAAP for the periods ended September 30, 2022 and 2021 appear later in this press release. |
|
(2) |
Results of all hotels as owned during the periods presented, including the results of hotels sold by SVC for the period owned by SVC. |
Recent operating statistics for SVC’s hotels are as follows:
Comparable Hotels
|
|
240 Hotels, 40,246 rooms |
|
2022 vs 2019 |
|||||||||
|
|
Occupancy |
|
Average Daily Rate |
|
RevPAR |
|
Occupancy |
|
Average Daily Rate |
|
RevPAR |
|
July |
|
68.1% |
|
$144.61 |
|
$98.48 |
|
(11.5)Pts |
|
4.1 |
% |
|
(10.9)% |
August |
|
63.2% |
|
$134.44 |
|
$84.97 |
|
(15.2)Pts |
|
(0.8 |
)% |
|
(20.0)% |
September |
|
66.3% |
|
$140.74 |
|
$93.31 |
|
(9.3)Pts |
|
2.0 |
% |
|
(10.5)% |
All Hotels
|
|
242 Hotels, 40,563 rooms |
|
2022 vs 2019 |
|||||||||
|
|
Occupancy |
|
Average Daily Rate |
|
RevPAR |
|
Occupancy |
|
Average Daily Rate |
|
RevPAR |
|
July |
|
68.0% |
|
$144.61 |
|
$98.33 |
|
(11.6)Pts |
|
4.2 |
% |
|
(11.0)% |
August |
|
63.1% |
|
$134.44 |
|
$84.83 |
|
(15.3)Pts |
|
(0.8 |
)% |
|
(20.2)% |
September |
|
66.2% |
|
$140.74 |
|
$93.17 |
|
(9.5)Pts |
|
2.1 |
% |
|
(10.7)% |
Preliminary October 2022 occupancy, ADR and RevPAR for SVC’s 241 hotels as of November 3, 2022 were 66.5%, $143.42 and $95.37, respectively.
Net Lease Retail Portfolio:
SVC’s net lease retail portfolio is summarized as follows:
|
|
As of September 30, 2022 |
Number of properties |
|
769 |
Industries |
|
21 |
Tenants |
|
178 |
Brands |
|
136 |
Square feet |
|
13.4 million |
Occupancy |
|
98.1% |
Weighted average lease term (by annual minimum rent) |
|
9.8 years |
Rent Coverage |
|
2.88x |
During the quarter ended September 30, 2022, SVC recorded reserves for uncollectible revenues of $0.4 million for certain of its net lease tenants. During the quarter ended September 30, 2021, SVC reduced reserves for uncollectible revenues of $5.4 million for certain of its net lease tenants.
Recent Investment Activities:
During the quarter ended September 30, 2022, SVC sold five hotels with 603 keys for an aggregate sales price of $29.7 million, excluding closing costs, and six net lease properties with an aggregate of 14,056 rentable square feet for an aggregate sales price of $1.1 million, excluding closing costs. From October 1, 2022 through November 3, 2022, SVC sold one hotel with 120 keys for an aggregate sales price of $6.0 million, excluding closing costs.
During the quarter ended September 30, 2022, SVC entered into agreements to sell 16 Marriott branded hotels with 2,155 keys located in nine states for an aggregate sales price of $137.3 million and four Sonesta branded hotels with 546 keys located in four states for an aggregate sales price of $25.2 million. These pending sales are subject to conditions; as a result, these sales may not occur, may be delayed or their terms may change. SVC expects the majority of these sales to be completed by the end of the first quarter of 2023. SVC continues to market one additional hotel with 219 keys for sale and three net lease properties with an aggregate of 8,575 rentable square feet.
Capital expenditures made at certain of SVC’s properties for the quarter ended September 30, 2022 were $24.4 million.
Liquidity and Financing Activities:
As of November 1, 2022, SVC had approximately $114.0 million of cash and cash equivalents and $705.0 million undrawn under its revolving credit facility.
As previously announced, in October 2022, SVC and its lenders amended the agreement governing its revolving credit facility to, among other things, remove restrictions on paying common dividends and issuing secured debt previously agreed to during the existing waiver period, subject to certain conditions, and requires SVC to maintain minimum liquidity levels to address near term debt maturities. SVC also exercised its option to extend the maturity date of its revolving credit facility by six months to July 15, 2023.
Common Dividend:
On October 13, 2022, SVC announced a regular quarterly common dividend of $0.20 per share ($0.80 per share per year) payable to shareholders of record on October 24, 2022; this dividend will be paid on or about November 17, 2022.
Conference Call:
On November 4, 2022 at 10:00 a.m. Eastern Time, Todd Hargreaves, President and Chief Investment Officer and Brian Donley, Chief Financial Officer and Treasurer, will host a conference call to discuss SVC’s third quarter 2022 financial results. The conference call telephone number is (877) 329-3720. Participants calling from outside the United States and Canada should dial (412) 317-5434. No pass code is necessary to access the call from either number. Participants should dial in about 15 minutes prior to the scheduled start of the call. A replay of the conference call will be available through Friday, November 11, 2022. To access the replay, dial (412) 317-0088. The replay pass code is 9258276.
A live audio webcast of the conference call will also be available in a listen-only mode on SVC’s website, www.svcreit.com. Participants wanting to access the webcast should visit SVC’s website about five minutes before the call. The archived webcast will be available for replay on SVC’s website for about one week after the call. The transcription, recording and retransmission in any way of SVC’s third quarter conference call is strictly prohibited without the prior written consent of SVC.
Supplemental Data:
A copy of SVC’s Third Quarter 2022 Supplemental Operating and Financial Data is available for download at SVC’s website, www.svcreit.com. SVC’s website is not incorporated as part of this press release.
Service Properties Trust (Nasdaq: SVC) is a real estate investment trust, or REIT, with over $11 billion invested in two asset categories: hotels and service-focused retail net lease properties. As of September 30, 2022, SVC owned 242 hotels with over 40,000 guest rooms throughout the United States and in Puerto Rico and Canada, the majority of which are extended stay and select service. As of September 30, 2022, SVC also owned 769 retail service-focused net lease properties totaling over 13.4 million square feet throughout United States. SVC is managed by The RMR Group (Nasdaq: RMR), an alternative asset management company with over $37 billion in assets under management as of September 30, 2022 and more than 35 years of institutional experience in buying, selling, financing and operating commercial real estate. SVC is headquartered in Newton, MA. For more information, visit www.svcreit.com.
Non-GAAP Financial Measures and Certain Definitions:
SVC presents certain “non-GAAP financial measures” within the meaning of the applicable Securities and Exchange Commission, or SEC, rules, including funds from operations, or FFO, Normalized FFO, earnings before interest, taxes, depreciation and amortization, or EBITDA, Hotel EBITDA, EBITDA for real estate, or EBITDAre, and Adjusted EBITDAre. These measures do not represent cash generated by operating activities in accordance with GAAP and should not be considered alternatives to net income (loss) as indicators of SVC’s operating performance or as measures of SVC’s liquidity. These measures should be considered in conjunction with net income (loss) as presented in SVC’s condensed consolidated statements of income (loss). SVC considers these non-GAAP measures to be appropriate supplemental measures of operating performance for a REIT, along with net income (loss). SVC believes these measures provide useful information to investors because by excluding the effects of certain historical amounts, such as depreciation and amortization expense, they may facilitate a comparison of SVC’s operating performance between periods and with other REITs and, in the case of Hotel EBITDA, reflecting only those income and expense items that are generated and incurred at the hotel level may help both investors and management to understand the operations of SVC’s hotels. SVC believes that Hotel EBITDA provides useful information to management and investors as a key measure of the profitability of its hotel operations.
Please see the pages attached hereto for a more detailed statement of SVC’s operating results and financial condition and for an explanation of SVC’s calculation of FFO and Normalized FFO, EBITDA, Hotel EBITDA, EBITDAre and Adjusted EBITDAre and a reconciliation of those amounts to amounts determined in accordance with GAAP.
Average Daily Rate, or ADR, represents rooms revenue divided by the total number of room nights sold in a given period. ADR provides useful insight on pricing at SVC’s hotels and is a measure widely used in the hotel industry.
Comparable Hotels Data: SVC presents RevPAR, ADR, and occupancy for the periods presented on a comparable basis to facilitate comparisons between periods. SVC generally defines comparable hotels as those that were owned by it on September 30, 2022 and were open and operating for the entire periods being compared. For the three and nine months ended September 30, 2022 and 2021, SVC’s comparable results excluded three hotels that had suspended operations during part of the periods presented.
Hotel EBITDA: Hotel EBITDA is calculated as hotel operating revenues less hotel operating expenses of all managed and leased hotels, prior to any adjustments required for presentation in SVC’s condensed consolidated statements of income (loss) in accordance with GAAP.
Hotel EBITDA Margin: Hotel EBITDA Margin is Hotel EBITDA as a percentage of hotel operating revenues.
Occupancy represents the total number of room nights sold divided by the total number of room nights available at a hotel or group of hotels. Occupancy is an important measure of the utilization rate and demand of SVC’s hotels.
Rent Coverage: SVC defines Rent Coverage as earnings before interest, taxes, depreciation, amortization and rent, or EBITDAR, divided by the annual minimum rent due to SVC weighted by the minimum rent of the property to total minimum rents of the net lease portfolio. EBITDAR amounts used to determine rent coverage are generally for the latest twelve-month period reported based on the most recent operating information, if any, furnished by the tenant. Operating statements furnished by the tenant often are unaudited and, in certain cases, may not have been prepared in accordance with GAAP and are not independently verified by SVC. Tenants that do not report operating information are excluded from the rent coverage calculations. In instances where SVC does not have financial information for the most recent quarter from its tenants, it has calculated an implied EBITDAR for the 2022 third quarter using industry benchmark data to reflect current operating trends. SVC believes using this industry benchmark data provides a reasonable estimate of recent operating results and rent coverage for those tenants.
Revenue per Available Room, or RevPAR, represents rooms revenue divided by the total number of room nights available to guests for a given period. RevPAR is an industry metric correlated to occupancy and ADR and helps measure revenue performance over comparable periods.
SERVICE PROPERTIES TRUST CONDENSED CONSOLIDATED BALANCE SHEETS (dollars in thousands, except share data) (unaudited) |
||||||||
|
|
As of September 30, |
|
As of December 31, |
||||
|
|
2022 |
|
2021 |
||||
ASSETS |
|
|
|
|
||||
Real estate properties: |
|
|
|
|
||||
Land |
|
$ |
1,903,619 |
|
|
$ |
1,918,385 |
|
Buildings, improvements and equipment |
|
|
7,669,058 |
|
|
|
8,307,248 |
|
Total real estate properties, gross |
|
|
9,572,677 |
|
|
|
10,225,633 |
|
Accumulated depreciation |
|
|
(2,929,193 |
) |
|
|
(3,281,659 |
) |
Total real estate properties, net |
|
|
6,643,484 |
|
|
|
6,943,974 |
|
Acquired real estate leases and other intangibles, net |
|
|
259,503 |
|
|
|
283,241 |
|
Assets held for sale |
|
|
142,972 |
|
|
|
515,518 |
|
Cash and cash equivalents |
|
|
67,246 |
|
|
|
944,043 |
|
Restricted cash |
|
|
10,891 |
|
|
|
3,375 |
|
Equity method investments |
|
|
113,168 |
|
|
|
62,687 |
|
Investment in equity securities |
|
|
63,896 |
|
|
|
61,159 |
|
Due from related persons |
|
|
58,292 |
|
|
|
48,168 |
|
Other assets, net |
|
|
273,261 |
|
|
|
291,150 |
|
Total assets |
|
$ |
7,632,713 |
|
|
$ |
9,153,315 |
|
|
|
|
|
|
||||
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
|
||||
Revolving credit facility |
|
$ |
95,000 |
|
|
$ |
1,000,000 |
|
Senior unsecured notes, net |
|
|
5,652,590 |
|
|
|
6,143,022 |
|
Accounts payable and other liabilities |
|
|
414,870 |
|
|
|
433,448 |
|
Due to related persons |
|
|
18,335 |
|
|
|
21,539 |
|
Total liabilities |
|
|
6,180,795 |
|
|
|
7,598,009 |
|
|
|
|
|
|
||||
Commitments and contingencies |
|
|
|
|
||||
|
|
|
|
|
||||
Shareholders’ equity: |
|
|
|
|
||||
Common shares of beneficial interest, $.01 par value; 200,000,000 shares authorized; 165,453,584 and 165,092,333 shares issued and outstanding, respectively |
|
|
1,654 |
|
|
|
1,651 |
|
Additional paid in capital |
|
|
4,554,358 |
|
|
|
4,552,558 |
|
Cumulative other comprehensive income |
|
|
1,513 |
|
|
|
779 |
|
Cumulative net income available for common shareholders |
|
|
2,534,688 |
|
|
|
2,635,660 |
|
Cumulative common distributions |
|
|
(5,640,295 |
) |
|
|
(5,635,342 |
) |
Total shareholders’ equity |
|
|
1,451,918 |
|
|
|
1,555,306 |
|
Total liabilities and shareholders’ equity |
|
$ |
7,632,713 |
|
|
$ |
9,153,315 |
|
SERVICE PROPERTIES TRUST CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS) (amounts in thousands, except per share data) (unaudited) |
||||||||||||||||
|
|
|
|
|
|
|
|
|
||||||||
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
||||||||||||
|
|
2022 |
|
2021 |
|
2022 |
|
2021 |
||||||||
Revenues: |
|
|
|
|
|
|
|
|
||||||||
Hotel operating revenues (1) |
|
$ |
400,453 |
|
|
$ |
338,375 |
|
|
$ |
1,116,843 |
|
|
$ |
787,463 |
|
Rental income (2) |
|
|
97,798 |
|
|
|
98,724 |
|
|
|
290,949 |
|
|
|
286,742 |
|
Total revenues |
|
|
498,251 |
|
|
|
437,099 |
|
|
|
1,407,792 |
|
|
|
1,074,205 |
|
|
|
|
|
|
|
|
|
|
||||||||
Expenses: |
|
|
|
|
|
|
|
|
||||||||
Hotel operating expenses (1)(3) |
|
|
318,266 |
|
|
|
285,233 |
|
|
|
933,803 |
|
|
|
723,769 |
|
Other operating expenses |
|
|
3,511 |
|
|
|
4,437 |
|
|
|
9,162 |
|
|
|
11,758 |
|
Depreciation and amortization |
|
|
101,514 |
|
|
|
124,163 |
|
|
|
306,147 |
|
|
|
370,208 |
|
General and administrative |
|
|
11,293 |
|
|
|
14,231 |
|
|
|
35,743 |
|
|
|
40,840 |
|
Transaction related costs (4) |
|
|
— |
|
|
|
3,149 |
|
|
|
1,920 |
|
|
|
28,934 |
|
Loss on asset impairment, net (5) |
|
|
1,172 |
|
|
|
— |
|
|
|
9,720 |
|
|
|
2,110 |
|
Total expenses |
|
|
435,756 |
|
|
|
431,213 |
|
|
|
1,296,495 |
|
|
|
1,177,619 |
|
|
|
|
|
|
|
|
|
|
||||||||
(Loss) gain on sale of real estate, net (6) |
|
|
(164 |
) |
|
|
94 |
|
|
|
44,235 |
|
|
|
10,934 |
|
Unrealized gains on equity securities, net (7) |
|
|
23,056 |
|
|
|
24,348 |
|
|
|
2,737 |
|
|
|
20,367 |
|
Interest income |
|
|
1,442 |
|
|
|
203 |
|
|
|
2,735 |
|
|
|
485 |
|
Interest expense (including amortization of debt issuance costs and debt discounts and premiums of $4,595, $5,877, $15,529 and $15,123, respectively) |
|
|
(81,740 |
) |
|
|
(92,458 |
) |
|
|
(263,904 |
) |
|
|
(273,227 |
) |
Loss on early extinguishment of debt (8) |
|
|
— |
|
|
|
— |
|
|
|
(791 |
) |
|
|
— |
|
Income (loss) before income taxes and equity in earnings of an investee |
|
|
5,089 |
|
|
|
(61,927 |
) |
|
|
(103,691 |
) |
|
|
(344,855 |
) |
Income tax (expense) benefit |
|
|
(390 |
) |
|
|
55 |
|
|
|
(1,558 |
) |
|
|
(1,009 |
) |
Equity in earnings of an investee (9) |
|
|
2,801 |
|
|
|
2,158 |
|
|
|
4,277 |
|
|
|
50 |
|
Net income (loss) |
|
$ |
7,500 |
|
|
$ |
(59,714 |
) |
|
$ |
(100,972 |
) |
|
$ |
(345,814 |
) |
|
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares outstanding (basic and diluted) |
|
|
164,745 |
|
|
|
164,590 |
|
|
|
164,697 |
|
|
|
164,532 |
|
|
|
|
|
|
|
|
|
|
||||||||
Net income (loss) per common share (basic and diluted) |
|
$ |
0.05 |
|
|
$ |
(0.36 |
) |
|
$ |
(0.61 |
) |
|
$ |
(2.10 |
) |
See Notes on page 12. |
||||||||||||||||
SERVICE PROPERTIES TRUST RECONCILIATIONS OF FUNDS FROM OPERATIONS, NORMALIZED FUNDS FROM OPERATIONS, EBITDA, EBITDAre AND ADJUSTED EBITDAre (amounts in thousands, except per share data) (unaudited) |
|||||||||||||||||
|
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
|
2022 |
2021 |
2022 |
2021 |
|||||||||||||
Calculation of FFO and Normalized FFO: (10) |
|||||||||||||||||
Net income (loss) |
$ |
7,500 |
|
$ |
(59,714 |
) |
$ |
(100,972 |
) |
$ |
(345,814 |
) |
|||||
Add (Less): |
Depreciation and amortization |
|
101,514 |
|
|
124,163 |
|
|
306,147 |
|
|
370,208 |
|||||
Loss on asset impairment, net (5) |
|
1,172 |
|
|
— |
|
|
9,720 |
|
|
2,110 |
|
|||||
Loss (gain) on sale of real estate, net (6) |
|
164 |
|
|
(94 |
) |
|
(44,235 |
) |
|
(10,934 |
) |
|||||
Unrealized gains on equity securities, net (7) |
|
(23,056 |
) |
|
(24,348 |
) |
|
(2,737 |
) |
|
(20,367 |
) |
|||||
Adjustments to reflect SVC’s share of FFO attributable to an investee (9) |
|
1,103 |
|
|
369 |
|
|
2,674 |
|
|
1,868 |
|
|||||
FFO |
|
88,397 |
|
|
40,376 |
|
|
170,597 |
|
|
(2,929 |
) |
|||||
Add (Less): |
Transaction related costs (4) |
|
— |
|
|
3,149 |
|
|
1,920 |
|
|
28,934 |
|
||||
Loss on early extinguishment of debt (8) |
|
— |
|
|
— |
|
|
791 |
|
|
— |
|
|||||
|
Adjustments to reflect SVC’s share of Normalized FFO attributable to an investee (9) |
|
61 |
|
|
256 |
|
|
899 |
|
|
1,619 |
|
||||
Normalized FFO |
$ |
88,458 |
|
$ |
43,781 |
|
$ |
174,207 |
|
$ |
27,624 |
|
|||||
|
|||||||||||||||||
Weighted average common shares outstanding (basic and diluted) |
|
164,745 |
|
|
164,590 |
|
|
164,697 |
|
|
164,532 |
|
|||||
|
|||||||||||||||||
Basic and diluted per common share amounts: |
|||||||||||||||||
Net income (loss) per share |
$ |
0.05 |
|
$ |
(0.36 |
) |
$ |
(0.61 |
) |
$ |
(2.10 |
) |
|||||
|
FFO |
$ |
0.54 |
|
$ |
0.25 |
|
$ |
1.04 |
|
$ |
(0.02 |
) |
||||
Normalized FFO |
$ |
0.54 |
|
$ |
0.27 |
|
$ |
1.06 |
|
$ |
0.17 |
|
|||||
Distributions declared per share |
$ |
0.01 |
|
$ |
0.01 |
|
$ |
0.02 |
|
$ |
0.03 |
|
|||||
Calculation of EBITDA, EBITDAre and Adjusted EBITDAre: (11) |
|
|
|
|
|||||||||||||
Net income (loss) |
$ |
7,500 |
|
$ |
(59,714 |
) |
$ |
(100,972 |
) |
$ |
(345,814 |
) |
|||||
Add (Less): |
Interest expense |
|
81,740 |
|
|
92,458 |
|
|
263,904 |
|
|
273,227 |
|
||||
Income tax expense (benefit) |
|
390 |
|
|
(55 |
) |
|
1,558 |
|
|
1,009 |
|
|||||
Depreciation and amortization |
|
101,514 |
|
|
124,163 |
|
|
306,147 |
|
|
370,208 |
|
|||||
EBITDA |
|
191,144 |
|
|
156,852 |
|
|
470,637 |
|
|
298,630 |
|
|||||
Add (Less): |
Loss on asset impairment, net (5) |
|
1,172 |
|
|
— |
|
|
9,720 |
|
|
2,110 |
|
||||
Loss (gain) on sale of real estate, net (6) |
|
164 |
|
|
(94 |
) |
|
(44,235 |
) |
|
(10,934 |
) |
|||||
Adjustments to reflect SVC’s share of EBITDAre attributable to an investee (9) |
|
2,787 |
|
|
464 |
|
|
5,541 |
|
|
2,123 |
|
|||||
EBITDAre |
|
195,267 |
|
|
157,222 |
|
|
441,663 |
|
|
291,929 |
|
|||||
Add (Less): |
Transaction related costs (4) |
|
— |
|
|
3,149 |
|
|
1,920 |
|
|
28,934 |
|
||||
Unrealized gains on equity securities, net (7) |
|
(23,056 |
) |
|
(24,348 |
) |
|
(2,737 |
) |
|
(20,367 |
) |
|||||
Loss on early extinguishment of debt (8) |
|
— |
|
|
— |
|
|
791 |
|
|
— |
|
|||||
Adjustments to reflect SVC’s share of Adjusted EBITDAre attributable to an investee (9) |
|
272 |
|
|
256 |
|
|
1,566 |
|
|
1,619 |
|
|||||
General and administrative expense paid in common shares (12) |
|
972 |
|
|
1,045 |
|
|
2,266 |
|
|
2,490 |
|
|||||
Adjusted EBITDAre |
$ |
173,455 |
|
$ |
137,324 |
|
$ |
445,469 |
|
$ |
304,605 |
|
|||||
|
|
|
|
|
|||||||||||||
See Notes on page 12. |
|||||||||||||||||
SERVICE PROPERTIES TRUST CALCULATION AND RECONCILIATION OF HOTEL EBITDA Comparable Hotels (amounts in thousands) (unaudited) |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|||||||||||||
|
2022 |
|
2021 |
|
2022 |
|
2021 |
|||||||||
Number of hotels |
|
240 |
|
|
|
240 |
|
|
|
239 |
|
|
|
239 |
|
|
Room revenues |
$ |
339,106 |
|
|
$ |
257,885 |
|
|
$ |
891,053 |
|
|
$ |
596,479 |
|
|
Food and beverage revenues |
|
42,624 |
|
|
|
25,151 |
|
|
|
110,115 |
|
|
|
51,062 |
|
|
Other revenues |
|
16,669 |
|
|
|
13,485 |
|
|
|
45,812 |
|
|
|
33,246 |
|
|
Hotel operating revenues – comparable hotels |
|
398,399 |
|
|
|
296,521 |
|
|
|
1,046,980 |
|
|
|
680,787 |
|
|
Rooms expenses |
|
103,580 |
|
|
|
80,589 |
|
|
|
273,928 |
|
|
|
196,795 |
|
|
Food and beverage expenses |
|
34,497 |
|
|
|
20,851 |
|
|
|
86,475 |
|
|
|
43,897 |
|
|
Other direct and indirect expenses |
|
131,456 |
|
|
|
110,795 |
|
|
|
367,242 |
|
|
|
300,147 |
|
|
Management fees |
|
14,847 |
|
|
|
10,826 |
|
|
|
39,341 |
|
|
|
24,042 |
|
|
Real estate taxes, insurance and other |
|
30,246 |
|
|
|
26,226 |
|
|
|
90,700 |
|
|
|
79,589 |
|
|
FF&E reserves (13) |
|
2,621 |
|
|
|
1,411 |
|
|
|
7,016 |
|
|
|
3,224 |
|
|
Hotel operating expenses – comparable hotels |
|
317,247 |
|
|
|
250,698 |
|
|
|
864,702 |
|
|
|
647,694 |
|
|
Hotel EBITDA – comparable hotels |
$ |
81,152 |
|
|
$ |
45,823 |
|
|
$ |
182,278 |
|
|
$ |
33,093 |
|
|
Hotel EBITDA Margin |
|
20.4 |
% |
|
|
15.5 |
% |
|
|
17.4 |
% |
|
|
4.9 |
% |
|
|
|
|
|
|
|
|
|
|||||||||
Hotel operating revenues (GAAP) (1) |
$ |
400,453 |
|
|
$ |
338,375 |
|
|
$ |
1,116,843 |
|
|
$ |
787,463 |
|
|
Add (Less): |
|
|
|
|
|
|
|
|||||||||
Hotel operating revenues from non-comparable hotels |
|
(2,054 |
) |
|
|
(41,854 |
) |
|
|
(69,863 |
) |
|
|
(106,676 |
) |
|
Hotel operating revenues – comparable hotels |
$ |
398,399 |
|
|
$ |
296,521 |
|
|
$ |
1,046,980 |
|
|
$ |
680,787 |
|
|
|
|
|
|
|
|
|
|
|||||||||
Hotel operating expenses (GAAP) (1) |
$ |
318,266 |
|
|
$ |
285,233 |
|
|
$ |
933,803 |
|
|
$ |
723,769 |
|
|
Add (Less): |
|
|
|
|
|
|
|
|||||||||
Hotel operating expenses from non-comparable hotels |
|
(4,261 |
) |
|
|
(36,567 |
) |
|
|
(76,738 |
) |
|
|
(95,618 |
) |
|
Reduction for security deposit and guaranty fundings, net (3) |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
15,698 |
|
|
FF&E reserves from managed hotel operations (13) |
|
2,621 |
|
|
|
1,411 |
|
|
|
7,016 |
|
|
|
3,224 |
|
|
Other (14) |
|
621 |
|
|
|
621 |
|
|
|
621 |
|
|
|
621 |
|
|
Hotel operating expenses – comparable hotels |
$ |
317,247 |
|
|
$ |
250,698 |
|
|
$ |
864,702 |
|
|
$ |
647,694 |
|
|
See Notes on page 12. |
||||||||||||||||
Contacts
Stephen Colbert, Director, Investor Relations
(617) 231-3223