Diluted FFO per Unit increased by 12.5% and Diluted AFFO per Unit increased by 15.4%

VANCOUVER, May 13, 2015 /PRNewswire/ - American Hotel Income Properties REIT LP ("AHIP") (TSX: HOT.UN; OTCQX: AHOTF) announced today its financial results for the three months ended March 31, 2015.  All amounts are expressed in U.S. Dollars unless otherwise noted.

FIRST QUARTER 2015 HIGHLIGHTS

  • Funds from operations ("FFO") for the current quarter were $4.4 million compared to $2.0 million last year, and adjusted funds from operations ("AFFO") were $3.5 million compared to $1.9 million for the same period last year reflecting the addition of 19 hotels comprising over 1,700 guestrooms in both the Oak Tree Inn and Branded hotel segments.

  • For the current quarter, Diluted FFO per Unit – As Reported was up 28.6% to $0.18 (2014 - $0.14). Diluted Core FFO per Unit (which adjusted for securities-based compensation expense) was up 12.5% to $0.18 (2014 - $0.16).

  • For the current quarter, Diluted AFFO per Unit – As Reported was up 15.4% to $0.15 (2014 - $0.13).

  • The portfolio generated RevPAR gains of 9.0% to $55.85 (2014 - $51.23) driven by higher average daily rates ("ADR") for the quarter, which were up 13.8% to $74.99 (2014 - $65.88). This was offset by lower occupancy for the current quarter of 74.5% (2014 – 77.8%), reflecting the change in the portfolio mix between the two reporting periods. In 2015, the stability and high occupancy of the Oak Tree Inn Hotels was offset by the seasonally weak first quarter for the Branded Hotels. However, the Branded Hotels contributed to the higher ADR as these properties benefited from the continued growth in the U.S. lodging industry.

  • Pro-forma RevPAR for the Branded Hotels acquired during 2014, which includes operating results for periods prior to their ownership by AHIP, was up 6.0% in line with 2015 estimates by STR, Inc. ("STR") of forecasted national RevPAR increases of 6.4%. Double-digit increases were achieved in the North Carolina/Florida Portfolio (up 15.2%) and the Virginia Portfolio (up 13.5%). Increases of 5-6% were also achieved in the Texas and North Carolina/Georgia Portfolios. These increases offset temporary decreases in the Pittsburgh and Oklahoma Portfolios due to planned renovations that took rooms out of service and the impacts of new supply and lower oil prices.

  • Same-property occupancy for the Oak Tree Inn Hotels was 80.1% compared to 78.2% in the prior year reflecting the continued strength of the railway industry.

  • EBITDA margin for the quarter increased to 23.1% compared to 19.5% for the prior period.

  • AHIP's debt-to-gross book value at March 31, 2015 was 52.1% compared to 52.6% at March 31, 2014 and the interest coverage ratio for the current quarter was 2.5x compared to 2.4x last year.

  • AHIP continued to pay its regular monthly distribution of Cdn$0.075. With the first quarter typically being the seasonally weakest quarter, AHIP's payout ratio was 125%. The payout ratio will improve as AHIP heads into its seasonally stronger second and third quarters.

  • AHIP acquired one new railway hotel totaling 110 guestrooms in Wellington, Kansas. This hotel is secured by a long term railway contract that guarantees the majority of the available room nights. The hotel was acquired for $7.4 million and was financed using cash on hand, a new variable rate, 10-year mortgage and the issuance of 66,927 Units at Cdn$11.20 per Unit.

  • AHIP embarked on an organic growth strategy to capture additional occupancy at existing high occupancy Oak Tree Inn Hotels by constructing additional hotel rooms. The first expansion will occur in Dexter, Missouri where AHIP's development partner, SunOne Developments Inc., is in the process of constructing a 24-room addition to the existing 109-room hotel that has current occupancy levels over 100%. The expansion is expected to be completed in late 2015 and will be acquired by AHIP for $2.7 million.

  • On April 28, 2015, AHIP completed a Cdn$66.1 million bought deal Unit issuance and is currently evaluating two high quality, nationally branded hotel portfolios and expect to utilize the proceeds over the coming months. AHIP's current market capitalization is approximately Cdn$320 million.

Rob O'Neill, CEO of AHIP, commented "AHIP continues to see exceptional year-over-year growth in its portfolio and earnings in an environment where the U.S. hotel industry is in its 61st consecutive month of record growth.  The strong U.S. dollar continues to provide strong tailwinds for our Canadian dollar denominated distributions and our net asset values.  We continue to implement our strategy of building a solid and reliable income stream for investors by acquiring accretive properties below replacement costs with modest leverage.  We are pleased to report that the average debt of our portfolio is under $45,000 per room and our debt-to-gross book value at quarter end was 52.1%".

The U.S. hotel industry reported positive results for the first quarter of 2015.  STR reported that occupancy was up 3.1% to a first quarter highwater mark of 61.1%, ADR increased by 4.7% to $117.09 and RevPAR rose 8.0% to $71.56.  In addition, demand was up 4.2% in the first quarter, while supply growth was limited to 1.0%.  With the strong start to 2015, STR expects that positive lodging fundamentals will continue during 2015 with annualized occupancy expected to hit record levels of 65% and ADR expected to grow by 5.2% resulting in expected RevPAR growth of 6.4%.  STR further expects 2016 RevPAR to grow by 5.9% led by ADR growth of 5.0%.

Railway companies continue to increase their short term room requirements at selected hotels. For the Oak Tree Inn Hotels portfolio, the number of railway rooms currently guaranteed is approximately 75%.

Hotel transactions continue at a brisk pace in the U.S., fueled by demand for high quality products and availability of low cost debt for hotel transactions, particularly deals with modest leverage. AHIP continues to review its existing debt maturities in an effort to extend the term and reduce refinancing risk during the current low interest rate environment.

FIRST QUARTER 2015 FINANCIAL RESULTS CONFERENCE CALL

AHIP will host a conference call at 4:00 p.m. (Eastern), 1:00 p.m. (Pacific) on Thursday, May 14, 2015, to review the financial results and corporate developments for the three months ended March 31, 2015.

To participate in this conference call, please dial one of the following numbers approximately 10 minutes prior to the commencement of the call, and ask to join the AHIP conference call.

Dial in numbers

Toll free (Canada and U.S.)…………………………………..1-888-390-0546
International or Local Toronto…………………….…………..1-416-764-8688

Conference Call Replay

If you cannot participate on Thursday, May 14, 2015, a replay of the conference call will be available by dialing one of the following replay numbers. You will be able to dial in and listen to the conference call two hours after the call end time, and the replay will be available until Thursday, May 21, 2015.  An audio recording of this conference call will also be available at www.ahipreit.com under the "Presentations and Calls" tab.

Please enter the Replay ID750852 followed by the # key.

Replay dial–in toll free (from Canada and U.S.)……………..1-888-390-0541
International or Local Toronto……………………………..…..1-416-764-8677

NON-IFRS MEASURES

Certain non-IFRS financial measures are included in this news release which include ADR, RevPAR, Pro-forma RevPAR, NOI, EBITDA, EBITDA margin, FFO, FFO per Unit, Core FFO per Unit, AFFO, AFFO per Unit, payout ratio and debt-to-gross book value. These terms are not measures recognized under International Financial Reporting Standards ("IFRS") and do not have standardized meanings prescribed by IFRS. Real estate investment trusts often refer to NOI, EBITDA, FFO, FFO per Unit, Core FFO per Unit, AFFO, AFFO per Unit, and payout ratio as supplemental measures of performance and debt-to-gross book value as a supplemental measure of financial condition.

Debt-to-gross book value, NOI, EBITDA, FFO, FFO per Unit, Core FFO per Unit, AFFO, AFFO per Unit, and payout ratio should not be construed as alternatives to measurements determined in accordance with IFRS as indicators of AHIP's performance or financial condition. AHIP's method of calculating NOI, EBITDA, FFO, FFO per Unit, Core FFO per Unit, AFFO, AFFO per Unit, payout ratio, debt and gross book value may differ from other issuers' methods and accordingly may not be comparable to measures used by other issuers. For further information, please refer to AHIP's Management's Discussion and Analysis ("MD&A") dated May 13, 2015, which is available on SEDAR at www.sedar.com and on AHIP's website at www.ahipreit.com.

Management believes that the computation of FFO per Unit – As Reported includes certain items that are not indicative of the results provided by AHIP's operating portfolio and affect the comparability of AHIP's period-over-period performance. This item includes the impact of securities-based compensation. Therefore, in addition to FFO per Unit – As Reported, management uses Core FFO per Unit to exclude this item. Management believes that Core FFO per Unit is a useful supplemental measure; however, this may not be comparable to the adjusted or modified FFOs per unit of other issuers.

FORWARD-LOOKING INFORMATION

This news release contains forward-looking information within the meaning of applicable securities laws (also known as forward-looking statements). Forward-looking statements generally can be identified by words such as "anticipate", "believe", "continue", "expect", "estimates", "intend", "may", "outlook", "objective", "plans", "should", "will" and similar expressions suggesting future outcomes or events.  Forward-looking-statements include, but are not limited to, statements made or implied relating to the objectives of American Hotel Income Properties REIT LP ("AHIP"), AHIP's strategies to achieve those objectives and AHIP's beliefs, plans, estimates, projections and intentions and similar statements concerning anticipated future events, results, circumstances, performance or expectations that are not historical facts. Some specific forward-looking statements in this news release include, but are not limited to, statements with respect to: the use of the proceeds from AHIP's bought deal offering of Units that closed on April 28, 2015, including, without limitation, to partially fund the potential acquisition of two high quality national branded hotel portfolios, the expansion of the Oak Tree Inn hotel in Dexter, Missouri and the other potential expansion opportunities for Oak Tree Inn railway lodging facilities; references to the cost of the expansion of the Oak Tree Inn hotel in Dexter, Missouri and the targeted date for the completion of the expansion; the expectations of STR with respect to key performance indicators in the U.S. hotel and lodging industry; AHIP management's expectations and outlook with respect to RevPAR, ADR, occupancy rates, cash flows from hotel operations, real estate values and other key performance indicators over the next 24 months; expected impact of oil prices on the overall economy, the U.S. hotel and lodging industry; expected terms of future debt financings; AHIP's review of other potential portfolio acquisition opportunities of branded hotels; the expected timing of the completion of the renovation of certain hotels within the Pittsburgh Portfolio; AHIP's intention to provide stable, sustainable and growing cash flows through operation of its properties and AHIP's other stated objectives; the AHIP's intention to make regular monthly cash distributions and the expected timing of the record and payment dates for monthly distributions.

Although AHIP believes that the expectations reflected in the forward-looking information contained in this news release are reasonable, AHIP can give no assurance that these expectations will prove to have been correct, and since forward-looking information inherently involves risks and uncertainties, undue reliance should not be placed on such information. The estimates and assumptions, which may prove to be incorrect, include, but are not limited to, the various assumptions set forth in this news release as well as the following: capital markets will provide AHIP with readily available access to equity and/or debt financing on terms acceptable to AHIP; AHIP's future level of indebtedness and AHIP's future growth potential will remain consistent with AHIP's current expectations; there will be no changes to tax laws adversely affecting AHIP's financing capability, operations, activities, structure or distributions; AHIP will retain and continue to attract qualified and knowledgeable personnel as AHIP expands its portfolio and business; the impact of the current economic climate and the current global financial conditions on AHIP's operations, including AHIP's financing capability and asset value, will remain consistent with AHIP's current expectations; there will be no material changes to government and environmental regulations adversely affecting AHIP's operations; and conditions in the international and, in particular, the U.S. hotel and lodging industry, including competition for acquisitions, will be consistent with the economic climate.

Forward-looking statements are provided for the purpose of presenting information about management's current expectations and plans relating to the future and readers are cautioned that such statements may not be appropriate for other purposes. Certain material factors or assumptions are applied in making forward-looking statements and actual results may differ materially from those expressed or implied in such forward-looking statements. In addition, forward-looking statements involve significant risks and uncertainties and should not be read as guarantees of future performance or results. Those risks and uncertainties include, among other things, risks related to: general economic conditions and consumer confidence; the growth in the U.S. hotel and lodging industry; Unit prices; liquidity; tax risks; ability to access debt and capital markets; financing risks; changes in interest rates; real property risks including environmental risks; the degree and nature of competition; ability to acquire accretive hotel investments; ability to integrate new hotels; construction of new hotels; renewal of rail contracts; environmental matters; and changes in legislation. Additional information about risks and uncertainties is contained in AHIP's MD&A and in AHIP's annual information form ("AIF") for the year ended December 31, 2014, a copy of which is available on SEDAR at www.sedar.com.

The forward-looking information contained in this news release is expressly qualified in its entirety by these cautionary statements. All forward-looking statements in this news release are made as of May 13, 2015. AHIP does not undertake any obligation to update any such forward looking information, whether as a result of new information, future events or otherwise, except as required by applicable law.

ABOUT AMERICAN HOTEL INCOME PROPERTIES REIT LP

AHIP's diversified and well-balanced property portfolio is comprised of 61 hotels located in 24 states, representing 5,228 available guestrooms.  The Oak Tree Inn Hotel segment, serving the U.S. freight railway industry, consists of 38 hotels comprising 2,881 guestrooms and 26 Penny's Diner restaurants.  The Branded Hotel segment consists of 23 hotels comprising 2,347 guestrooms and is affiliated with leading hotel brands including Marriott and Hilton.

AHIP is a limited partnership formed under the Limited Partnerships Act (Ontario) to invest in hotel real estate properties located substantially in the United States and engaged primarily in the railway employee accommodation, transportation and branded, select service lodging sectors.

AHIP's long-term objectives are to: (i) generate stable and growing cash distributions from hotel properties substantially in the U.S.; (ii) enhance the value of its assets and maximize the long-term value of the hotel properties through active management; and (iii) expand its asset base and increase its AFFO per unit through an accretive acquisition program, participation in strategic development opportunities and improvements to its properties through targeted value-added capital expenditure programs.

ADDITIONAL INFORMATION

Additional information relating to AHIP, including AHIP's condensed consolidated interim financial statements for the three months ended March 31, 2015 and 2014, AHIP's MD&A dated May 13, 2015, and other public filings are available on SEDAR at www.sedar.com.

THE TORONTO STOCK EXCHANGE HAS NOT REVIEWED AND DOES NOT ACCEPT RESPONSIBILITY FOR THE ADEQUACY OR THE ACCURACY OF THIS NEWS RELEASE.

SOURCE American Hotel Income Properties REIT LP

Copyright 2015 PR Newswire

American Hotel Income Pr... (QX) (USOTC:AHOTF)
Historical Stock Chart
Von Nov 2024 bis Dez 2024 Click Here for more American Hotel Income Pr... (QX) Charts.
American Hotel Income Pr... (QX) (USOTC:AHOTF)
Historical Stock Chart
Von Dez 2023 bis Dez 2024 Click Here for more American Hotel Income Pr... (QX) Charts.