Xenia Hotels & Resorts Reports Second Quarter 2017 Results

ORLANDO, Fla., Aug. 8, 2017

Second Quarter 2017 Highlights

• Net Income: Net income attributable to common stockholders was $69.4 million, which includes a $49.2 million gain on the sale of investment properties. Net income per diluted share was $0.65.
• Same-Property RevPAR: Same-Property RevPAR decreased 1.4% compared to the second quarter of 2016 to $166.18, as occupancy decreased 120 basis points and ADR increased 0.1%. Excluding the Company's Houston-area hotels, Same-Property RevPAR increased 0.3%, as occupancy declined 4 basis points and ADR increased 0.4%.
• Same-Property Hotel EBITDA Margin: Same-Property Hotel EBITDA Margin was 34.2%, a decrease of 32 basis points compared to the second quarter of 2016. Excluding the Company's Houston-area hotels, Same-Property Hotel EBITDA Margin increased 29 basis points.
• Total Portfolio RevPAR: Total Portfolio RevPAR was 0.8% higher than in the second quarter of 2016.
• Adjusted EBITDA: Adjusted EBITDA declined $8.4 million to $79.6 million, a decrease of 9.6% primarily due to net asset dispositions since the second quarter of 2016.
• Adjusted FFO per Diluted Share: Adjusted FFO per diluted share was $0.59, a decrease of 9.2% compared to the second quarter of 2016.
• Transaction Activity: The Company acquired one hotel for $205.5 million and sold six hotels for total consideration of $193 million.
• Financing Activity: The Company obtained a new $115 million mortgage loan collateralized by the Marriott San Francisco Airport Waterfront and paid off three mortgage loans totaling $128 million.
• Dividends: The Company declared its second quarter dividend of $0.275 per share to common stockholders of record on June 30, 2017.

Year to Date Highlights

• Net Income: Net income attributable to common stockholders was $77.5 million and net income per diluted share was $0.72.
• Same-Property RevPAR: Same-Property RevPAR increased 0.7% to $159.52 compared to the six months ended June 30, 2016, as occupancy remained essentially flat and ADR increased 0.6%. Excluding the Company's Houston-area hotels, Same-Property RevPAR increased 1.6%, as occupancy increased 72 basis points and ADR increased 0.7%.
• Same-Property Hotel EBITDA Margin: Same-Property Hotel EBITDA Margin was 32.2%, an increase of 33 basis points compared to the six months ended June 30, 2016. Excluding the Company's Houston-area hotels, Same-Property Hotel EBITDA Margin was 32.2% during the six months ended June 30, 2017, an increase of 45 basis points.
• Total Portfolio RevPAR: Total Portfolio RevPAR increased 3.4% year over year, reflecting portfolio improvements and portfolio composition.
• Adjusted EBITDA: Adjusted EBITDA was $138.7 million, a decrease of 7.9% from 2016.
• Adjusted FFO per Diluted Share: The Company generated Adjusted FFO per diluted share of $1.04, a 3.7% decline from 2016.

"We were very pleased with the results of our focus on expense controls during the second quarter, as our hotel operating expenses, exclusive of property taxes, decreased by 1.4% on a Same-Property basis," commented Marcel Verbaas, President and Chief Executive Officer of Xenia. "Meanwhile, our top line performance during the quarter met our expectations, with the impact of the Easter shift into April resulting in a modest RevPAR increase of 0.3% for our Same-Property portfolio excluding our Houston hotels. Our overall Same-Property RevPAR performance was negatively impacted by approximately 170 basis points as a result of market weakness and renovation disruption at our Houston assets. We expect this negative impact to moderate in the second half of the year since year over year comparisons will be easing and the disruptive guestroom renovation at the Westin Galleria has now been completed."

"Our ability to reduce hotel operating expenses resulted in our Same-Property Hotel EBITDA margin decreasing by only 32 basis points, despite negative RevPAR growth and a 17.7% increase in property taxes partially due to tax refunds received in the second quarter of 2016. We believe this is a testament to our asset management capability as well as the success of our property optimization process."

"We maintained our disciplined focus on capital allocation during the quarter, with the previously announced acquisition of Hyatt Regency Grand Cypress in Orlando and the disposition of six select service hotels further refining and upgrading our portfolio," Mr. Verbaas continued. "We have preserved our strong balance sheet position and look forward to continuing our positive portfolio momentum in the months ahead."

Operating Results