Extended Stay America announced consolidated results for the third quarter ended September 30, 2015. Total revenues increased 6.5% over the comparable period in 2014 to $360.5 million.
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Total revenues for the nine months ended September 30, 2015 increased 6.2% over the comparable period in 2014 to $988.4 million.
Revenue per available room (RevPAR) for the three months ended September 30, 2015 grew 6.5% over the comparable period in 2014, driven by an improvement in average daily rate (ADR) of 8% while occupancy decreased to 78.3% compared to 79.3% in the comparable period in 2014.
RevPAR for the nine months ended September 30, 2015 grew 6.5% over the comparable period in 2014, driven by an improvement in ADR of 7.6% while occupancy decreased to 75.3% compared to 76.1% in the comparable period in 2014.
Hotel Operating Margin1 for the three months ended September 30, 2015 was 56.2% compared to 53.1% in the comparable period in 2014. Hotel operating margin flow-through, defined as the change in Hotel Operating Profit1 divided by the change in total room and other hotel revenues, was 105.2% for the three months ended September 30, 2015.
Hotel Operating Margin1 for the nine months ended September 30, 2015 was 54.8% compared to 52.1% in the comparable period in 2014. Hotel operating margin flow-through for the nine months ended September 30, 2015 was 97.5%.
Adjusted EBITDA for the three months ended September 30, 2015 increased $18.3 million to $181.4 million, representing 11.2% growth over the comparable period in 2014. Adjusted EBITDA1 excludes non-cash equity-based compensation of $3 million, loss on disposal of assets of $1.3 million, asset impairment of $9 million, and other non-operating expense of $1.1 million.
Adjusted EBITDA1 for the nine months ended September 30, 2015 increased $42.7 million to $476 million, representing 9.8% growth over the comparable period in 2014.
Net income for the three months ended September 30, 2015 was $58.2 million compared to $60.2 million in the comparable period in 2014, a decrease of 3.3%. The decline in net income in the third quarter was due to an asset impairment of $9 million and a higher tax rate driven primarily by a provision to return true up for 2014.
Income tax expense for the three months ended September 30, 2015 was $21.3 million compared to $19 million in the comparable period in 2014.
Net income for the nine months ended September 30, 2015 was $150.9 million compared to $122.6 million in the comparable period in 2014, an increase of 23.1%. Income tax expense for the nine months ended September 30, 2015 was $48.1 million compared to $38.2 million in the comparable period in 2014.
Adjusted Paired Share Income1 for the three months ended September 30, 2015 was $66.6 million, or $0.33 per diluted Paired Share, compared to $59.9 million, or $0.29 per diluted Paired Share, in the comparable period in 2014.
Adjusted Paired Share Income for the nine months ended September 30, 2015 was $163.8 million, or $0.80 per diluted Paired Share, compared to $137 million, or $0.67 per diluted Paired Share, in the comparable period in 2014. Adjusted Paired Share Income1, a non-GAAP measure, represents net income, as adjusted, attributable to the consolidated enterprise, whose representative equity security is a Paired Share.
A Paired Share entitles its holder to participate in 100% of the common equity and earnings of both Extended Stay America, Inc. and ESH Hospitality, Inc. ■