BETHESDA, Md., July 25, 2012 -- DiamondRock Hospitality
Company (the "Company") (NYSE: DRH) today announced results of operations for
its second fiscal quarter ended June 15, 2012.
The Company is a lodging-focused real estate investment trust that
currently owns a portfolio of twenty-seven premium hotels in North America.
Recent Developments
- Portfolio Acquisition: On July 12, 2012, the Company acquired a
portfolio of four hotels from
affiliates of Blackstone Real Estate Partners VI ("Blackstone") for a
contractual purchase price of $495 million.
The portfolio consists of the Hilton Boston Downtown, the Westin
Washington D.C. City Center, the Hilton Burlington, and the Westin San
Diego (collectively, the "Portfolio").
- Follow-on Public Offering: The Company
completed a follow-on public offering of its common stock on July 11, 2012. The Company sold 20,000,000
shares of its common stock for net proceeds, after offering costs, of
approximately $200 million.
- Blackstone Strategic Investment: Blackstone
purchased approximately 7.2 million shares of DiamondRock common stock
directly from the Company in connection with the acquisition of the
Portfolio.
Second Quarter 2012 Highlights
- RevPAR Growth: The Company's RevPAR increased
to $139.98, representing 6.5% growth
from the comparable period in 2011.
- Hotel Adjusted EBITDA Margin: The Company's
Hotel Adjusted EBITDA margin improved to 28.20%, an increase of 90
basis points from the comparable period in 2011.
- Adjusted EBITDA: The Company's Adjusted
EBITDA was $48.1 million, an increase of
17% from the comparable period of 2011.
- Adjusted FFO: The Company's Adjusted FFO was $34.2 million and Adjusted FFO per diluted
share was $0.20.
- Dividends: The Company declared and paid a
quarterly dividend of $0.08 per share
during the second quarter.
Mark W. Brugger, Chief
Executive Officer of DiamondRock Hospitality Company, stated, "The
lodging recovery continues to show strength and our portfolio is
performing exceptionally well with year-to-date RevPAR growth of 7.6%.
We see positive demand trends for the balance of 2012 with group pace
up 7.8%. Moreover, our platform continues to execute with the
completion of over $750 million in
transactions year-to-date, including the off-market acquisition of the
four-hotel portfolio from Blackstone. This acquisition achieves our
strategic objectives of improving portfolio quality and expanding brand
and geographic diversification. After this transaction, we continue to
maintain a best-in-class balance sheet with capacity to take advantage
of acquisition opportunities."
Operating Results
Please see "Certain Definitions" and "Non-GAAP Financial
Measures" attached to this press release for an explanation of the
terms "EBITDA," "Adjusted EBITDA," "Hotel Adjusted EBITDA Margin,"
"FFO" and "Adjusted FFO."
The discussions of "Pro Forma RevPAR" and "Pro Forma Hotel
Adjusted EBITDA Margin" assume the Company owned all of its hotels
since January 1, 2011 but exclude (i)
the operating results of the Frenchman's Reef & Morning Star
Marriott Beach Resort ("Frenchman's Reef") due to the impact of the
extensive renovation of the hotel in 2011, (ii) the operating results
of the three-hotel portfolio sold earlier in 2012, and (iii) the
operating results of the Portfolio acquired on July
12, 2012.
For the second quarter beginning March
24, 2012 and ending June 15, 2012,
the Company reported the following:
- RevPAR growth of 6.5% and Hotel Adjusted EBITDA margin
expansion of 90 basis points compared to the comparable period in 2011.
- Adjusted EBITDA of $48.1 million
compared to $41.1 million for the
comparable period in 2011.
- Adjusted FFO of $34.2 million
and Adjusted FFO per diluted share of $0.20
based on 168.3 million diluted weighted average shares compared to $25.6 million and $0.15,
respectively, for the comparable period in 2011.
- Net income of $8.9 million
(or $0.05 per diluted share) compared to
a net loss of $0.6 million (or $0.00 per diluted share) for the comparable
period in 2011.
The Company's second quarter RevPAR growth of 6.5% (from $131.45 to $139.98) was driven by a 4.6%
increase in the average daily rate (from $170.00
to $177.90) and a 1.4 percentage point
increase in occupancy (from 77.3% to 78.7%). The second quarter Hotel
Adjusted EBITDA margin increased 90 basis points (from 27.30% to
28.20%) from the comparable period in 2011.
The second quarter Pro Forma RevPAR increased 5.8% (from $128.65 to $136.07),
which was driven by a 3.7% increase in the average daily rate (from $167.05 to $173.31)
and a 1.5 percentage point increase in occupancy (from 77.0% to 78.5%).
The second quarter Pro Forma Hotel Adjusted EBITDA margin increased 8
basis points (from 28.31% to 28.39%) from the comparable period in
2011.
For the period from January 1, 2012
to June 15, 2012, the Company reported
the following:
- RevPAR growth of 7.6% and Hotel Adjusted EBITDA margin
expansion of 115 basis points compared to the comparable period in
2011.
- Adjusted EBITDA of $71.4 million
compared to $59.9 million for the
comparable period in 2011.
- Adjusted FFO of $49.3 million
and Adjusted FFO per diluted share of $0.29
based on 168.3 million diluted weighted average shares compared to $37.4 million and $0.23,
respectively, for the comparable period in 2011.
- Net income of $11.6 million
(or $0.07 per diluted share) compared to
a net loss of $11.6 million (or $0.07 per diluted share) for the comparable
period in 2011.
The Company's year-to-date RevPAR growth of 7.6% (from $117.21 to $126.10) was driven by a 3.7%
increase in the average daily rate (from $161.15
to $167.06) and a 2.8 percentage point
increase in occupancy (from 72.7% to 75.5%). Year-to-date Hotel
Adjusted EBITDA margin increased 115 basis points (from 23.20% to
24.35%) from the comparable period in 2011.
The year-to-date Pro Forma RevPAR increased 7.0% (from $113.66 to $121.58),
which was driven by a 3.0% increase in the average daily rate (from $157.05 to $161.78)
and a 2.8 percentage point increase in occupancy (from 72.4 percent to
75.2 percent). Year-to-date Pro Forma Hotel Adjusted EBITDA margin
increased 49 basis points (from 23.45% to 23.94%) from the comparable
period in 2011.
Blackstone Portfolio Acquisition
On July 12, 2012, the Company
completed the acquisition of the Portfolio for a contractual purchase
price of $495 million. This high-quality
Portfolio consists of the 362-room Hilton Boston, the 406-room Westin
Washington D.C., the 258-room Hilton Burlington and the 436-room Westin
San Diego. The Portfolio, which is primarily concentrated in high
growth urban markets, is expected to enhance the overall quality of the
Company's portfolio. The Portfolio's forecasted 2012 RevPAR is
approximately $11 above the RevPAR of
the Company's prior 23-hotel portfolio and is expected to generate a
Hotel Adjusted EBITDA margin premium of 900 basis points. The Company
funded the acquisition with a combination of borrowings under its
senior unsecured credit facility, cash on hand, net proceeds from a
public equity offering and the issuance of shares of the Company's
common stock to Blackstone in a private placement.
Follow-on Equity Offering
The Company completed a follow-on public offering of its
common stock during July 2012. The Company sold 20,000,000 shares of
its common stock for net proceeds, after deduction of offering costs,
of approximately $200.1 million.
Blackstone Share Issuance
The Company funded $75 million
of the Portfolio acquisition through the issuance of 7,211,538
unregistered shares of its common stock to affiliates of Blackstone.
Blackstone and the Company entered into a Registration Rights
Agreement, which, among other things, requires the Company to use its
best efforts to register these shares and subjects these shares to a
150-day lock-up period.
Dividends
The Company's Board of Directors declared a quarterly dividend
of $0.08 per share to stockholders of
record as of May 15, 2012. The dividend
was paid on May 29, 2012.
Lexington Hotel Update
The Company has completed its evaluation of branding
alternatives and concluded that the best long-term strategy was the
conversion of the hotel to Marriott International's Autograph
Collection. During 2012, we signed a franchise agreement with Marriott
to convert the hotel upon satisfactory completion of a $32 million capital improvement plan. The
renovation will be comprehensive and touch every aspect of the hotel
that the guest experiences. The expected timing of the conversion is as
follows:
- Radisson will be terminated as of September
15, 2012.
- The hotel will operate as an independent hotel until
completion of the capital improvement plan.
- The Company expects to complete the capital improvement
plan during early 2013.
- The hotel will be re-launched as an Autograph Collection
hotel in mid-2013.
Highgate Hotels will continue to manage the hotel under the
existing hotel management agreement.
Allerton Update
The Allerton Hotel bankruptcy proceedings are ongoing. The
Company presented its objection to the Debtor's Plan of Reorganization
during a hearing that started on July 23,
2012. The Company expects the bankruptcy to be resolved at the end of
2012.
Capital Expenditures
In 2012, the Company expects to spend approximately $50 million on capital improvements at its
hotels, $20 million of which is expected
to be funded from corporate cash. The Company spent approximately $15.2 million for capital improvements as of June 15, 2012. The most significant projects
for 2012 include the following:
- Conrad Chicago:
The Company expects to spend $3.5
million to add 4,100 square feet of new meeting space,
reposition the food and beverage outlets and re-concept the hotel
lobby. The addition of the new meeting space is scheduled to be
completed by the end of the summer of 2012 and the lobby repositioning
in the first quarter of 2013.
- Renaissance Worthington:
The Company expects to spend $1.2
million over the next two years to undertake a comprehensive
restoration of the concrete façade of the hotel.
- Marriott Atlanta Alpharetta: The
Company expects to spend $2.4 million to
renovate the guest rooms at the hotel during the third quarter of 2012.
- Frenchman's Reef: The Company expects
to spend $1.6 million to renovate
certain guest rooms and replace the boat dock. The Company expects
these projects to be completed by early 2013.
In connection with executing the rebranding strategy at the
Lexington Hotel, the Company is currently planning a comprehensive
renovation of the hotel, including the lobby, corridors, guest rooms
and guest bathrooms. The cost of the renovation is expected to be
approximately $32 million and completed
during the first half of 2013.
The Company continues to evaluate an extensive renovation
project at the Chicago Marriott Downtown that, if approved, is expected
to be completed in subsequent years.
In connection with the acquisition of the Portfolio, the
Company expects to spend approximately $56
million for capital improvements at the Portfolio over the next
60 months, including approximately $30 million
to $35 million in the first two years of ownership.
Balance Sheet
The Company continues to maintain its straightforward capital
structure. The Company has no preferred equity outstanding and
continues to own 100% of its properties. During July
2012, the Company's Board of Directors approved an amendment of
the Company's charter to increase the number of authorized shares of
common stock from 200 million to 400 million.
After completing the acquisition of the Portfolio, DiamondRock
continues to maintain one of the most durable and lowest levered
balance sheets among its lodging REIT peers. The Company maintains
balance sheet flexibility with no near term debt maturities, capacity
on its senior unsecured credit facility and 16 of its 27 hotels
unencumbered by mortgage debt. DiamondRock remains committed to its
core strategy of maintaining a simple capital structure with
conservative leverage.
Outlook and Guidance
The Company is providing guidance, but does not undertake to
update it for any developments in its business. Achievement of the
anticipated results is subject to the risks disclosed in the Company's
filings with the Securities and Exchange Commission. The Company's 2012
RevPAR guidance assumes all of the Company's 27 hotels were owned since
January 1, 2011.
The Adjusted EBITDA and Adjusted FFO guidance includes $5.2 million of Adjusted EBITDA and $2.9 million of Adjusted FFO from the three
hotels sold and excludes cash interest payments and legal fees related
to the Allerton Hotel.
The Company is revising its full year 2012 guidance to
incorporate the post-acquisition results of the Portfolio, the
increased share count from recent equity activity and the most recent
outlook for its hotels' performance for the remainder of the year.
The Company expects its portfolio of 27 hotels to deliver
full-year RevPAR growth of approximately 5.5 to 7.5 percent with modest
growth in the third fiscal quarter followed by strong fourth quarter
growth. The Company expects its third fiscal quarter to be impacted by
the following:
- Worthington Renaissance: The facade project
at the Worthington Renaissance is expected to create $2.0 million of Hotel Adjusted EBITDA
disruption, mostly in the third quarter. This disruption is expected to
negatively impact the Company's third quarter 2012 RevPAR growth by
approximately 60 basis points.
- Chicago Convention Calendar: The Chicago citywide group meeting activity in
2012 is weighted towards the second and fourth fiscal quarters. Group
booking pace at the Chicago Marriott is down approximately 6% for the
third fiscal quarter as a result of the citywide timing. The Company's Chicago hotels will negatively impact its
third quarter RevPAR growth by approximately 70 basis points.
- Minneapolis Convention Calendar: The Hilton
Minneapolis RevPAR growth is facing difficult comparisons in 2012 due
to a difficult convention calendar, which will continue in the third
fiscal quarter. Group booking pace at the Hilton Minneapolis is down
approximately 7% for the third fiscal quarter as a result of the
citywide timing. The Hilton Minneapolis will negatively impact the
Company's third quarter RevPAR growth by approximately 50 basis points.
The Company expects strong RevPAR growth during the fourth
fiscal quarter as a result of the following:
- Chicago Convention Calendar: The fourth
quarter will benefit from the favorable timing of citywide meetings in
Chicago. The fourth fiscal quarter group booking pace for the Chicago
Conrad and Chicago Marriott is up 46% and 14%, respectively.
- Boston Westin Booking Pace: The fourth
quarter will benefit from the strong convention activity at the Boston
Convention and Exhibition Center, as evidenced by fourth quarter group
booking pace being up almost 11%.
- LAX Marriott: The Company expects the LAX
Marriott to outperform during the fourth quarter. The fourth quarter
group booking pace at this hotel is up over 50%.
- New York City:
The Company expects strong fourth quarter performance from its
well-located hotels in New York City.
Based on its outlook, the Company now expects the following
full year 2012 results:
- RevPAR growth of 5.5 percent to 7.5 percent;
- Adjusted EBITDA of $193 million to
$201 million;
- Adjusted FFO of $138 million to
$145 million, which assumes income taxes to range from a benefit
of $1.0 million to an expense of $1.0 million; and
- Adjusted FFO per share of $0.76 to
$0.80 based on 181.3 million diluted weighted average shares.
In addition, the Company expects the following results for the
third fiscal quarter:
- RevPAR growth of 3 percent to 4 percent;
- Adjusted EBITDA of $44.5 million to
$48.5 million;
- Adjusted FFO of $33 million to $36
million, which assumes income tax benefit to range from $1.2 million to $0.1 million; and
- Adjusted FFO per share of $0.18 to
$0.19 based on 187.5 million diluted weighted average shares.
Earnings Call
The Company will host a conference call to discuss its second
quarter results on Wednesday, July 25, 2012,
at 10:00 a.m. Eastern Time (ET). To
participate in the live call, investors are invited to dial
888-680-0879 (for domestic callers) or 617-213-4856 (for international
callers). The participant passcode is 58735834. A live webcast of the
call will be available via the investor relations section of
DiamondRock Hospitality Company's website at www.drhc.com.
A replay of the webcast will also be archived on the website for one
year.
About the Company
DiamondRock Hospitality Company is a self-advised real estate
investment trust (REIT) that is an owner of premium hotel properties.
The Company owns 27 premium hotels with approximately 11,900 rooms and
holds one senior mortgage loan. The Company's hotels are generally
operated under globally recognized brands such as Hilton, Marriott, and Westin. For further
information, please visit DiamondRock Hospitality Company's website at www.drhc.com.
This press release contains forward-looking statements
within the meaning of federal securities laws and regulations. These
forward-looking statements are identified by their use of terms and
phrases such as "believe," "expect," "intend," "project," "forecast,"
"plan" and other similar terms and phrases, including references to
assumptions and forecasts of future results. Forward-looking statements
are not guarantees of future performance and involve known and unknown
risks, uncertainties and other factors which may cause the actual
results to differ materially from those anticipated at the time the
forward-looking statements are made. These risks include, but are not
limited to: national and local economic and business conditions,
including the potential for additional terrorist attacks, that will
affect occupancy rates at the Company's hotels and the demand for hotel
products and services; operating risks associated with the hotel
business; risks associated with the level of the Company's
indebtedness; relationships with property managers; the ability to
compete effectively in areas such as access, location, quality of
accommodations and room rate structures; changes in travel patterns,
taxes and government regulations which influence or determine wages,
prices, construction procedures and costs; risks associated with the
bankruptcy proceedings on the Allerton Hotel; risks associated with the
development of a hotel by a third-party developer; risks associated
with the rebranding of the Lexington Hotel New York; and other risk
factors contained in the Company's filings with the Securities and
Exchange Commission. Although the Company believes the expectations
reflected in such forward-looking statements are based upon reasonable
assumptions, it can give no assurance that the expectations will be
attained or that any deviation will not be material. All information in
this release is as of the date of this release, and the Company
undertakes no obligation to update any forward-looking statement to
conform the statement to actual results or changes in the Company's
expectations.
Reporting Periods for Statement of Operations
The results reported in the Company's consolidated statements
of operations are based on results of its hotels reported by hotel
managers. The Company's hotel managers use different reporting periods.
Marriott International, the manager of most of the Company's
properties, uses a fiscal year ending on the Friday closest to December 31 and reports 12 weeks of operations
for the first three quarters and 16 or 17 weeks for the fourth quarter
of the year for its domestic managed hotels. In contrast, Marriott
International for its non-domestic hotels (including Frenchman's Reef),
Davidson Hotel Company, manager of the Westin Atlanta North, Vail
Resorts, manager of the Vail Marriott, Hilton Hotels Corporation,
manager of the Conrad Chicago and the Hilton Minneapolis, Westin Hotel
Management, L.P., manager of the Westin Boston Waterfront, Alliance
Hospitality Management, manager of the Hilton Garden Inn Chelsea, Sage
Hospitality, manager of the JW Marriott Denver Cherry Creek and the
Courtyard Denver, Highgate Hotels, manager of the Lexington Hotel,
Interstate Hotels and Resorts, manager of the Westin Washington D.C.,
the Westin San Diego and the Hilton Burlington, and WHM, LLC, manager
of the Hilton Boston report results on a monthly basis. Additionally,
the Company, as a REIT, is required by U.S. federal tax laws to report
results on a calendar year basis. As a result, the Company has adopted
the reporting periods used by Marriott International for its domestic
hotels, except that the fiscal year always ends on December 31 to comply with REIT rules. The
first three fiscal quarters end on the same day as Marriott
International's fiscal quarters but the fourth quarter ends on December 31 and full year results, as reported
in the statement of operations, always include the same number of days
as the calendar year.
Two consequences of the reporting cycle the Company has
adopted are: (1) quarterly start dates will usually differ between
years, except for the first quarter which always commences on January 1, and (2) the first and fourth
quarters of operations and year-to-date operations may not include the
same number of days as reflected in prior years.
While the reporting calendar the Company adopted is more
closely aligned with the reporting calendar used by the manager of most
of its properties, one final consequence of the calendar is the Company
is unable to report any results for Frenchman's Reef, Westin Atlanta
North, Vail Marriott, Conrad Chicago, Westin Boston Waterfront, Hilton
Minneapolis, Hilton Garden Inn Chelsea, JW Marriott Denver Cherry
Creek, Courtyard Denver, Lexington Hotel, Westin Washington D.C., the
Westin San Diego and the Hilton Burlington or the Hilton Boston for the
month of operations that ends after its fiscal quarter-end because none
of Vail Resorts, Davidson Hotel Company, Hilton Hotels Corporation,
Westin Hotel Management, L.P., Alliance Hospitality Management, Sage
Hospitality, Highgate Hotels, Interstate Hotels and Resorts, WHM, LLC
and Marriott International (for international hotels) make mid-month
results available. As a result, the quarterly results of operations
include results from these hotels as follows: first quarter (January
and February), second quarter (March to May), third quarter (June to
August) and fourth quarter (September to December). While this does not
affect full-year results, it does affect the reporting of quarterly
results.
Marriott International announced preliminary plans to change
their current fiscal year to a calendar year effective January 1, 2013. Marriott International
expects to make the fiscal year change on a prospective basis and will
not adjust the prior year operating results. The change to Marriott's
fiscal year will not impact the Company's full year results, which are
currently reported on a calendar year. However, the preliminary change
will impact the prior year comparability of each of the Company's 2013
fiscal quarters.
DIAMONDROCK HOSPITALITY COMPANY
CONSOLIDATED BALANCE SHEETS
As of June 15, 2012 and December
31, 2011
(in thousands, except share and per share amounts)
|
June
15, 2012
|
|
December
31, 2011
|
|
(Unaudited)
|
|
|
ASSETS
|
|
|
|
Property
and equipment, at cost
|
$
|
2,681,505
|
|
|
$
|
2,667,682
|
|
Less:
accumulated depreciation
|
(474,302)
|
|
|
(433,178)
|
|
|
2,207,203
|
|
|
2,234,504
|
|
Assets
held for sale
|
—
|
|
|
263,399
|
|
Deferred
financing costs, net
|
8,975
|
|
|
5,869
|
|
Restricted
cash
|
61,026
|
|
|
53,871
|
|
Due
from hotel managers
|
67,433
|
|
|
50,728
|
|
Note
receivable
|
54,485
|
|
|
54,788
|
|
Favorable
lease assets, net
|
42,355
|
|
|
43,285
|
|
Prepaid
and other assets
|
69,875
|
|
|
65,900
|
|
Cash
and cash equivalents
|
104,824
|
|
|
26,291
|
|
Total
assets
|
$
|
2,616,176
|
|
|
$
|
2,798,635
|
|
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
|
|
|
Liabilities:
|
|
|
|
Mortgage
debt
|
$
|
900,624
|
|
|
$
|
762,933
|
|
Mortgage
debt of assets held for sale
|
—
|
|
|
180,000
|
|
Senior
unsecured credit facility
|
—
|
|
|
100,000
|
|
Total
debt
|
900,624
|
|
|
1,042,933
|
|
|
|
|
|
Deferred
income related to key money, net
|
24,408
|
|
|
24,593
|
|
Unfavorable
contract liabilities, net
|
81,050
|
|
|
81,914
|
|
Due to
hotel managers
|
44,049
|
|
|
41,676
|
|
Liabilities
of assets held for sale
|
—
|
|
|
3,805
|
|
Dividends
declared and unpaid
|
155
|
|
|
13,594
|
|
Accounts
payable and accrued expenses
|
79,791
|
|
|
87,963
|
|
Total
other liabilities
|
229,453
|
|
|
253,545
|
|
Stockholders'
Equity:
|
|
|
|
Preferred
stock, $0.01 par value; 10,000,000 shares authorized; no shares issued
and outstanding
|
—
|
|
|
—
|
|
Common
stock, $0.01 par value; 200,000,000 shares authorized; 167,930,396 and
167,502,359 shares issued and outstanding at June 15, 2012 and December
31, 2011, respectively
|
1,679
|
|
|
1,675
|
|
Additional
paid-in capital
|
1,707,879
|
|
|
1,708,427
|
|
Accumulated
deficit
|
(223,459)
|
|
|
(207,945)
|
|
Total
stockholders' equity
|
1,486,099
|
|
|
1,502,157
|
|
Total
liabilities and stockholders' equity
|
$
|
2,616,176
|
|
|
$
|
2,798,635
|
|
DIAMONDROCK HOSPITALITY COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Fiscal Quarters Ended June 15, 2012 and June
17, 2011 and
the Periods from January 1, 2012
to June 15, 2012 and January 1, 2011 to June
17, 2011
(in thousands, except share and per share amounts)
|
Fiscal
Quarter Ended
|
|
Period
From
|
|
|
|
|
|
January
1, 2012 to June 15, 2012
|
|
January
1, 2011 to June 17, 2011
|
|
June
15, 2012
|
|
June
17, 2011
|
|
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
Revenues:
|
|
|
|
|
|
|
|
Rooms
|
$
|
126,973
|
|
|
$
|
101,213
|
|
|
$
|
210,361
|
|
|
$
|
170,496
|
|
Food
and beverage
|
47,907
|
|
|
41,834
|
|
|
79,158
|
|
|
71,012
|
|
Other
|
10,667
|
|
|
7,121
|
|
|
17,450
|
|
|
12,412
|
|
Total
revenues
|
185,547
|
|
|
150,168
|
|
|
306,969
|
|
|
253,920
|
|
Operating
Expenses:
|
|
|
|
|
|
|
|
Rooms
|
33,422
|
|
|
25,894
|
|
|
58,301
|
|
|
46,096
|
|
Food
and beverage
|
33,233
|
|
|
28,797
|
|
|
57,077
|
|
|
51,385
|
|
Management
fees
|
6,616
|
|
|
6,357
|
|
|
9,758
|
|
|
9,105
|
|
Other
hotel expenses
|
61,089
|
|
|
51,655
|
|
|
110,093
|
|
|
93,054
|
|
Depreciation
and amortization
|
20,571
|
|
|
18,887
|
|
|
41,089
|
|
|
37,436
|
|
Impairment
of favorable lease asset
|
468
|
|
|
—
|
|
|
468
|
|
|
—
|
|
Hotel
acquisition costs
|
1,999
|
|
|
1,904
|
|
|
2,031
|
|
|
2,159
|
|
Corporate
expenses
|
5,001
|
|
|
4,373
|
|
|
9,484
|
|
|
8,447
|
|
Total
operating expenses
|
162,399
|
|
|
137,867
|
|
|
288,301
|
|
|
247,682
|
|
Operating
profit
|
23,148
|
|
|
12,301
|
|
|
18,668
|
|
|
6,238
|
|
Other
Expenses (Income):
|
|
|
|
|
|
|
|
Interest
income
|
(154)
|
|
|
(263)
|
|
|
(217)
|
|
|
(555)
|
|
Interest
expense
|
12,510
|
|
|
10,015
|
|
|
23,978
|
|
|
18,833
|
|
Gain
on early extinguishment of debt
|
—
|
|
|
—
|
|
|
(144)
|
|
|
—
|
|
Total
other expenses
|
12,356
|
|
|
9,752
|
|
|
23,617
|
|
|
18,278
|
|
Income
(loss) from continuing operations before income taxes
|
10,792
|
|
|
2,549
|
|
|
(4,949)
|
|
|
(12,040)
|
|
Income
tax (expense) benefit
|
(1,848)
|
|
|
(3,278)
|
|
|
3,926
|
|
|
449
|
|
Income
(loss) from continuing operations
|
8,944
|
|
|
(729)
|
|
|
(1,023)
|
|
|
(11,591)
|
|
Income
(loss) from discontinued operations, net of income taxes
|
—
|
|
|
173
|
|
|
12,582
|
|
|
(8)
|
|
Net
income (loss)
|
$
|
8,944
|
|
|
$
|
(556)
|
|
|
$
|
11,559
|
|
|
$
|
(11,599)
|
|
Earnings
(loss) per share:
|
|
|
|
|
|
|
|
Continuing
operations
|
$
|
0.05
|
|
|
$
|
(0.00)
|
|
|
$
|
(0.01)
|
|
|
$
|
(0.07)
|
|
Discontinued
operations
|
—
|
|
|
0.00
|
|
|
0.08
|
|
|
(0.00)
|
|
Basic
and diluted earnings (loss) per share
|
$
|
0.05
|
|
|
$
|
(0.00)
|
|
|
$
|
0.07
|
|
|
$
|
(0.07)
|
|
Non-GAAP Financial Measures
We use the following non-GAAP financial measures that we
believe are useful to investors as key measures of our operating
performance: EBITDA, Adjusted EBITDA, FFO and Adjusted FFO. These
measures should not be considered in isolation or as a substitute for
measures of performance in accordance with GAAP. EBITDA, Adjusted
EBITDA, FFO and Adjusted FFO, as calculated by us, may not be
comparable to other companies that do not define such terms exactly as
the Company.
EBITDA and FFO
EBITDA represents net (loss) income excluding: (1) interest
expense; (2) provision for income taxes, including income taxes
applicable to sale of assets; and (3) depreciation and amortization. We
believe EBITDA is useful to an investor in evaluating our operating
performance because it helps investors evaluate and compare the results
of our operations from period to period by removing the impact of our
capital structure (primarily interest expense) and our asset base
(primarily depreciation and amortization) from our operating results.
In addition, covenants included in our indebtedness use EBITDA as a
measure of financial compliance. We also use EBITDA as one measure in
determining the value of hotel acquisitions and dispositions.
The Company computes FFO in accordance with standards
established by NAREIT, which defines FFO as net (loss) income
determined in accordance with GAAP, excluding gains or losses from
sales of properties and impairment losses, plus depreciation and
amortization. The Company believes that the presentation of FFO
provides useful information to investors regarding its operating
performance because it is a measure of the Company's operations without
regard to specified non-cash items, such as real estate depreciation
and amortization and gain or loss on sale of assets. The Company also
uses FFO as one measure in assessing its results.
Adjustments to EBITDA and FFO
We adjust FFO and EBITDA when evaluating our performance
because we believe that the exclusion of certain additional recurring
and non-recurring items described below provides useful supplemental
information to investors regarding our ongoing operating performance
and that the presentation of Adjusted EBITDA and Adjusted FFO, when
combined with GAAP net income, EBITDA and FFO, is beneficial to an
investor's complete understanding of our operating performance. We
adjust EBITDA and FFO for the following items:
- Non-Cash Ground Rent: We exclude the non-cash
expense incurred from straight lining the rent from our ground lease
obligations and the non-cash amortization of our favorable lease
assets.
- Non-Cash Amortization of Unfavorable Contract Liabilities:
We exclude the non-cash amortization of the unfavorable contract
liabilities recorded in conjunction with our acquisitions of the
Bethesda Marriott Suites, the Chicago Marriott Downtown, the
Renaissance Charleston and the Lexington Hotel New York. The
amortization of the unfavorable contract liabilities does not reflect
the underlying operating performance of our hotels.
- Cumulative Effect of a Change in Accounting Principle:
Infrequently, the Financial Accounting Standards Board (FASB)
promulgates new accounting standards that require the consolidated
statement of operations to reflect the cumulative effect of a change in
accounting principle. We exclude the effect of these one-time
adjustments because they do not reflect its actual performance for that
period.
- Gains from Early Extinguishment of Debt: We exclude
the effect of gains recorded on the early extinguishment of debt
because we believe they do not accurately reflect the underlying
performance of the Company.
- Acquisition Costs: We exclude acquisition
transaction costs expensed during the period because we believe they do
not reflect the underlying performance of the Company.
- Allerton Loan: In
2011, we included cash payments received on the senior loan secured by
the Allerton Hotel in Adjusted EBITDA and Adjusted FFO. GAAP requires
us to record the cash received from the borrower as a reduction of our
basis in the mortgage loan due to the uncertainty over the timing and
amount of cash payments on the loan. Beginning in 2012, due to the
uncertainty of the timing of the bankruptcy resolution, we exclude both
cash interest payments received from the borrower and the legal costs
incurred as a result of the bankruptcy proceedings from our calculation
of Adjusted EBITDA and Adjusted FFO. We have not adjusted our 2011
Adjusted EBITDA and Adjusted FFO calculations to reflect this change in
presentation.
- Other Non-Cash and /or Unusual Items: We exclude the
effect of certain non-cash and/or unusual items because we believe they
do not reflect the underlying performance of the Company. In 2012, we
excluded the franchise termination fee paid to Radisson because we
believe that including it would not be consistent with reflecting the
ongoing performance of the hotel. In 2011, we excluded the accrual for
net key money repayment to Hilton in
conjunction with entering into a termination agreement for the Conrad
Chicago because we believe that including it was not consistent with
reflecting the ongoing performance of the hotel.
In addition, to derive Adjusted EBITDA we exclude gains or
losses on dispositions and impairment losses because we believe that
including them in EBITDA is not consistent with reflecting the ongoing
performance of our hotels. Additionally, the gain or loss on
dispositions and impairment losses represent either accelerated
depreciation or excess depreciation in previous periods, and
depreciation is excluded from EBITDA.
In addition, to derive Adjusted FFO we exclude any fair value
adjustments to debt instruments. Specifically, we exclude the impact of
the non-cash amortization of the debt premium recorded in conjunction
with the acquisition of the JW Marriott Denver at Cherry Creek and fair market value
adjustments to the Company's interest rate cap agreement.
The following tables are reconciliations of our U.S. GAAP net
income (loss) to EBITDA and Adjusted EBITDA (in thousands):
|
Fiscal
Quarter Ended
|
|
Period
from
|
|
June
15, 2012
|
|
June
17, 2011
|
|
January
1, 2012 to June 15, 2012
|
|
January
1, 2011 to June 17, 2011
|
|
|
|
|
Net
income (loss)
|
$
|
8,944
|
|
|
$
|
(556)
|
|
|
$
|
11,559
|
|
|
$
|
(11,599)
|
|
Interest
expense(1)
|
12,510
|
|
|
12,340
|
|
|
26,274
|
|
|
23,483
|
|
Income
tax expense (benefit)(2)
|
1,848
|
|
|
3,088
|
|
|
(3,740)
|
|
|
(1,003)
|
|
Real
estate related depreciation and amortization(3)
|
20,571
|
|
|
21,682
|
|
|
41,089
|
|
|
43,034
|
|
EBITDA
|
43,873
|
|
|
36,554
|
|
|
75,182
|
|
|
53,915
|
|
Non-cash
ground rent
|
1,575
|
|
|
1,655
|
|
|
3,107
|
|
|
3,221
|
|
Non-cash
amortization of unfavorable contract
liabilities
|
(432)
|
|
|
(426)
|
|
|
(864)
|
|
|
(852)
|
|
Gain
on sale of hotel properties, net of tax
|
—
|
|
|
—
|
|
|
(10,017)
|
|
|
—
|
|
Gain
on early extinguishment of debt
|
—
|
|
|
—
|
|
|
(144)
|
|
|
—
|
|
Acquisition
costs
|
1,999
|
|
|
1,904
|
|
|
2,031
|
|
|
2,159
|
|
Allerton
loan interest payments
|
—
|
|
|
505
|
|
|
—
|
|
|
605
|
|
Allerton
loan legal fees
|
590
|
|
|
—
|
|
|
912
|
|
|
—
|
|
Franchise
termination fee
|
—
|
|
|
—
|
|
|
750
|
|
|
—
|
|
Accrual
for net key money repayment
|
—
|
|
|
864
|
|
|
—
|
|
|
864
|
|
Impairment
of favorable lease asset
|
468
|
|
|
—
|
|
|
468
|
|
|
—
|
|
Adjusted
EBITDA
|
$
|
48,073
|
|
|
$
|
41,056
|
|
|
$
|
71,425
|
|
|
$
|
59,912
|
|
(1)
Amounts include interest expense included in discontinued operations as
follows: $2.3 million in the fiscal quarter ended June 17, 2011; $2.3
million in the period from Janaury 1, 2012 to June 15, 2012; and $4.7
million in the period from January 1, 2011 to June 17, 2011.
|
(2)
Amounts include income tax provision included in discontinued
operations as follows: $0.2 million of income tax expense in the fiscal
quarter ended June 17, 2011; $0.2 million of income tax benefit in the
period from January 1, 2012 to June 15, 2012; and $0.6 million of
income tax expense in the period from Janaury 1, 2011 to June 17, 2011.
|
(3)
Amounts include depreciation expense included in discontinued
operations as follows: $2.8 million in the fiscal quarter ended June
17, 2011 and $5.6 million in the period from January 1, 2011 to June
17, 2011.
|
|
Guidance
|
|
Quarter
3, 2012
|
|
Full
Year 2012
|
|
Low
End
|
|
High
End
|
|
Low
End
|
|
High
End
|
Net
income
|
$
|
50
|
|
|
$
|
3,550
|
|
|
$
|
31,893
|
|
|
$
|
39,893
|
|
Interest
expense
|
12,600
|
|
|
12,500
|
|
|
56,200
|
|
|
55,200
|
|
Income
tax expense (benefit)
|
(1,200)
|
|
|
(100)
|
|
|
(1,000)
|
|
|
1,000
|
|
Real
estate related depreciation and amortization
|
23,500
|
|
|
23,000
|
|
|
98,000
|
|
|
97,000
|
|
EBITDA
|
34,950
|
|
|
38,950
|
|
|
185,093
|
|
|
193,093
|
|
Non-cash
ground rent
|
1,500
|
|
|
1,500
|
|
|
6,500
|
|
|
6,500
|
|
Non-cash
amortization of unfavorable contract
liabilities
|
(450)
|
|
|
(450)
|
|
|
(1,850)
|
|
|
(1,850)
|
|
Gain
on sale of hotel properties, net of tax
|
—
|
|
|
—
|
|
|
(10,017)
|
|
|
(10,017)
|
|
Gain
on early extinguishment of debt
|
—
|
|
|
—
|
|
|
(144)
|
|
|
(144)
|
|
Acquisition
costs
|
8,000
|
|
|
8,000
|
|
|
10,000
|
|
|
10,000
|
|
Allerton
loan legal fees
|
500
|
|
|
500
|
|
|
2,200
|
|
|
2,200
|
|
Franchise
termination fee
|
—
|
|
|
—
|
|
|
750
|
|
|
750
|
|
Impairment
of favorable lease asset
|
—
|
|
|
—
|
|
|
468
|
|
|
468
|
|
Adjusted
EBITDA
|
$
|
44,500
|
|
|
$
|
48,500
|
|
|
$
|
193,000
|
|
|
$
|
201,000
|
|
The following tables are reconciliations of our U.S. GAAP net
income (loss) to FFO and Adjusted FFO (in thousands):
|
Fiscal
Quarter Ended
|
|
Period
from
|
|
|
|
|
|
January
1, 2012 to June 15, 2012
|
|
January
1, 2011 to June 17, 2011
|
|
June
15, 2012
|
|
June
17, 2011
|
|
|
Net
income (loss)
|
$
|
8,944
|
|
|
$
|
(556)
|
|
|
$
|
11,559
|
|
|
$
|
(11,599)
|
|
Real
estate related depreciation and amortization(1)
|
20,571
|
|
|
21,682
|
|
|
41,089
|
|
|
43,034
|
|
Impairment
of favorable lease asset
|
468
|
|
|
—
|
|
|
468
|
|
|
—
|
|
Gain
on sale of hotel properties, net of tax
|
—
|
|
|
—
|
|
|
(10,017)
|
|
|
—
|
|
FFO
|
29,983
|
|
|
21,126
|
|
|
43,099
|
|
|
31,435
|
|
Non-cash
ground rent
|
1,575
|
|
|
1,655
|
|
|
3,107
|
|
|
3,221
|
|
Non-cash
amortization of unfavorable contract
liabilities
|
(432)
|
|
|
(426)
|
|
|
(864)
|
|
|
(852)
|
|
Gain
on early extinguishment of debt
|
—
|
|
|
—
|
|
|
(144)
|
|
|
—
|
|
Acquisition
costs
|
1,999
|
|
|
1,904
|
|
|
2,031
|
|
|
2,159
|
|
Allerton
loan interest payments
|
—
|
|
|
505
|
|
|
—
|
|
|
605
|
|
Allerton
loan legal fees
|
590
|
|
|
—
|
|
|
912
|
|
|
—
|
|
Franchise
termination fee
|
—
|
|
|
—
|
|
|
750
|
|
|
—
|
|
Accrual
for net key money repayment
|
—
|
|
|
864
|
|
|
—
|
|
|
864
|
|
Fair
value adjustments to debt instruments
|
448
|
|
|
—
|
|
|
401
|
|
|
—
|
|
Adjusted
FFO
|
$
|
34,163
|
|
|
$
|
25,628
|
|
|
$
|
49,292
|
|
|
$
|
37,432
|
|
Adjusted
FFO per share
|
$
|
0.20
|
|
|
$
|
0.15
|
|
|
$
|
0.29
|
|
|
$
|
0.23
|
|
(1)
Amounts include depreciation expense included in discontinued
operations as follows: $2.8 million in the fiscal quarter ended June
17, 2011 and $5.6 million in the period from January 1, 2011 to June
17, 2011.
|
|
Guidance
|
|
Quarter
3, 2012
|
|
Full
Year 2012
|
|
Low
End
|
|
High
End
|
|
Low
End
|
|
High
End
|
Net
income
|
$
|
50
|
|
|
$
|
3,550
|
|
|
$
|
31,893
|
|
|
$
|
39,893
|
|
Real
estate related depreciation and amortization(1)
|
23,500
|
|
|
23,000
|
|
|
98,000
|
|
|
97,000
|
|
Impairment
of favorable lease asset
|
—
|
|
|
—
|
|
|
468
|
|
|
468
|
|
Gain
on sale of hotel properties, net of tax
|
—
|
|
|
—
|
|
|
(10,017)
|
|
|
(10,017)
|
|
FFO
|
23,550
|
|
|
26,550
|
|
|
120,344
|
|
|
127,344
|
|
Non-cash
ground rent
|
1,500
|
|
|
1,500
|
|
|
6,500
|
|
|
6,500
|
|
Non-cash
amortization of unfavorable contract
liabilities
|
(450)
|
|
|
(450)
|
|
|
(1,850)
|
|
|
(1,850)
|
|
Gain
on early extinguishment of debt
|
—
|
|
|
—
|
|
|
(144)
|
|
|
(144)
|
|
Acquisition
costs
|
8,000
|
|
|
8,000
|
|
|
10,000
|
|
|
10,000
|
|
Allerton
loan legal fees
|
500
|
|
|
500
|
|
|
2,200
|
|
|
2,200
|
|
Franchise
termination fee
|
—
|
|
|
—
|
|
|
750
|
|
|
750
|
|
Fair
value adjustments to debt instruments
|
(100)
|
|
|
(100)
|
|
|
200
|
|
|
200
|
|
Adjusted
FFO
|
$
|
33,000
|
|
|
$
|
36,000
|
|
|
$
|
138,000
|
|
|
$
|
145,000
|
|
Adjusted
FFO per share
|
$
|
0.18
|
|
|
$
|
0.19
|
|
|
$
|
0.76
|
|
|
$
|
0.80
|
|
Use and Limitations of Non-GAAP Financial Measures
Our management and Board of Directors use EBITDA, Adjusted
EBITDA, FFO and Adjusted FFO to evaluate the performance of our hotels
and to facilitate comparisons between us and other lodging REITs, hotel
owners who are not REITs and other capital intensive companies. The use
of these non-GAAP financial measures has certain limitations. These
non-GAAP financial measures as presented by us, may not be comparable
to non-GAAP financial measures as calculated by other real estate
companies. These measures do not reflect certain expenses or
expenditures that we incurred and will incur, such as depreciation,
interest and capital expenditures. We compensate for these limitations
by separately considering the impact of these excluded items to the
extent they are material to operating decisions or assessments of our
operating performance. Our reconciliations to the most comparable GAAP
financial measures, and our consolidated statements of operations and
cash flows, include interest expense, capital expenditures, and other
excluded items, all of which should be considered when evaluating our
performance, as well as the usefulness of our non-GAAP financial
measures.
These non-GAAP financial measures are used in addition to and
in conjunction with results presented in accordance with GAAP. They
should not be considered as alternatives to operating profit, cash flow
from operations, or any other operating performance measure prescribed
by GAAP. These non-GAAP financial measures reflect additional ways of
viewing our operations that we believe, when viewed with our GAAP
results and the reconciliations to the corresponding GAAP financial
measures, provide a more complete understanding of factors and trends
affecting our business than could be obtained absent this disclosure.
We strongly encourage investors to review our financial information in
its entirety and not to rely on a single financial measure.
Quarterly Pro Forma Financial Information
The following table is presented to provide investors with
selected historical quarterly operating information to include the
operating results for the Company's current portfolio of 27 hotels as
if they were owned since January 1, 2011
and exclude the three hotels sold on March 23,
2012.
|
Quarter
3, 2011
|
|
Quarter
4, 2011
|
|
Full
Year 2011
|
|
Quarter
1, 2012
|
|
Quarter
2, 2012
|
RevPAR
|
$
134.82
|
|
$
130.99
|
|
$
125.98
|
|
$
107.84
|
|
$
141.25
|
Revenues
(in thousands)
|
$
188,024
|
|
$
254,790
|
|
$
759,645
|
|
$
132,132
|
|
$
210,576
|
Hotel
Adjusted EBITDA (in thousands)
|
$
51,193
|
|
$
69,893
|
|
$
197,365
|
|
$
24,469
|
|
$
61,910
|
%
of Full Year
|
25.9%
|
|
35.4%
|
|
100.0%
|
|
10.8%
|
|
27.4%
|
Hotel
Adjusted EBITDA Margin
|
27.23%
|
|
27.43%
|
|
25.98%
|
|
18.52%
|
|
29.40%
|
Available
Rooms
|
1,012,672
|
|
1,373,541
|
|
4,267,448
|
|
848,818
|
|
1,041,576
|
Available Rooms
The following table is presented to provide investors with the
Company's total available rooms for its actual ownership period of all
its owned hotels during 2011 and 2012.
|
2011
|
|
2012
|
Quarter
1
|
818,196
|
|
877,702
|
Quarter
2
|
919,886
|
|
907,072
|
Quarter
3
|
988,589
|
|
981,634
|
Quarter
4
|
1,355,863
|
|
1,402,905
|
Full
Year
|
4,082,534
|
|
4,169,313
|
Certain Definitions
In this release, when we discuss "Hotel Adjusted EBITDA," we
exclude from Hotel EBITDA the non-cash expense incurred by the hotels
due to the straight lining of the rent from our ground lease
obligations, the non-cash amortization of our favorable lease assets,
the non-cash amortization of the unfavorable contract liabilities
recorded in conjunction with the acquisitions of the Bethesda Marriott
Suites, the Chicago Marriott Downtown, the Renaissance Charleston and
the Lexington Hotel New York. Hotel EBITDA represents hotel net income
excluding: (1) interest expense; (2) income taxes; and (3) depreciation
and amortization. Hotel Adjusted EBITDA margins are calculated as Hotel
Adjusted EBITDA divided by total hotel revenues. Net debt is calculated
as total debt outstanding less unrestricted cash.
DIAMONDROCK HOSPITALITY COMPANY
PRO FORMA HOTEL OPERATING DATA
Schedule of Property Level Results
(in thousands)
(unaudited)
|
Fiscal
Quarter Ended
|
|
|
Period
From
|
|
|
|
June
15,
2012
|
|
June
17, 2011
|
|
%
Change
|
|
January
1, 2012 to June 15, 2012
|
|
January
1, 2011 to June 17, 2011
|
|
%
Change
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
Rooms
|
$
126,973
|
|
$
118,005
|
|
7.6%
|
|
$
210,361
|
|
$
194,632
|
|
8.1%
|
Food
and beverage
|
47,907
|
|
43,276
|
|
10.7%
|
|
79,158
|
|
73,461
|
|
7.8%
|
Other
|
10,667
|
|
7,978
|
|
33.7%
|
|
17,450
|
|
13,830
|
|
26.2%
|
Total
revenues
|
185,547
|
|
169,259
|
|
9.6%
|
|
306,969
|
|
281,923
|
|
8.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
Rooms
departmental expenses
|
33,422
|
|
30,591
|
|
9.3%
|
|
58,301
|
|
53,701
|
|
8.6%
|
Food
and beverage departmental expenses
|
33,233
|
|
29,825
|
|
11.4%
|
|
57,077
|
|
53,118
|
|
7.5%
|
Other
direct departmental
|
4,736
|
|
4,069
|
|
16.4%
|
|
8,516
|
|
7,458
|
|
14.2%
|
General
and administrative
|
14,838
|
|
13,979
|
|
6.1%
|
|
26,414
|
|
25,121
|
|
5.1%
|
Utilities
|
5,863
|
|
6,082
|
|
(3.6%)
|
|
11,007
|
|
11,112
|
|
(0.9%)
|
Repairs
and maintenance
|
7,845
|
|
7,665
|
|
2.3%
|
|
14,096
|
|
13,886
|
|
1.5%
|
Sales
and marketing
|
13,935
|
|
13,025
|
|
7.0%
|
|
23,967
|
|
22,339
|
|
7.3%
|
Base
management fees
|
4,924
|
|
4,499
|
|
9.4%
|
|
8,006
|
|
7,384
|
|
8.4%
|
Incentive
management fees
|
1,692
|
|
1,414
|
|
19.7%
|
|
1,752
|
|
1,488
|
|
17.7%
|
Property
taxes
|
7,789
|
|
7,204
|
|
8.1%
|
|
14,460
|
|
12,657
|
|
14.2%
|
Ground
rent
|
3,532
|
|
3,430
|
|
3.0%
|
|
6,536
|
|
6,312
|
|
3.5%
|
Other
fixed expenses
|
2,551
|
|
2,522
|
|
1.1%
|
|
4,350
|
|
4,384
|
|
(0.8%)
|
Total
hotel operating expenses
|
134,360
|
|
124,305
|
|
8.1%
|
|
234,482
|
|
218,960
|
|
7.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
Hotel
EBITDA
|
51,187
|
|
44,954
|
|
13.9%
|
|
72,487
|
|
62,963
|
|
15.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-cash
ground rent
|
1,575
|
|
1,694
|
|
(7.0%)
|
|
3,110
|
|
3,300
|
|
(5.8%)
|
Non-cash
amortization of unfavorable contract liabilities
|
(432)
|
|
(432)
|
|
0.0%
|
|
(864)
|
|
(864)
|
|
0.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
Hotel
Adjusted EBITDA
|
$
52,330
|
|
$
46,216
|
|
13.2%
|
|
$
74,733
|
|
$
65,399
|
|
14.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NOTE:
The pro forma operating data above includes the operating
results for the Company's portfolio of 23 hotels owned as of June 15, 2012 assuming they were owned since January 1, 2011 and excludes the operating
results of the three hotels sold on March 23,
2012.
Market Capitalization as of June 15, 2012
(in
thousands, except per share data)
|
|
|
|
Enterprise
Value
|
|
|
|
|
|
Common
equity capitalization (at June 15, 2012 closing price of $10.19/share)
|
|
$
1,718,807
|
Consolidated
debt
|
|
900,624
|
Cash
and cash equivalents
|
|
(104,824)
|
|
|
|
Total
enterprise value
|
|
$
2,514,607
|
|
|
|
|
|
|
Share
Reconciliation
|
|
|
|
|
|
Common
shares outstanding
|
|
167,930
|
|
|
|
Unvested
restricted stock held by management and employees
|
|
693
|
Share
grants under deferred compensation plan held by directors
|
53
|
|
|
|
Combined
shares outstanding
|
|
168,676
|
Debt
Summary as of June 15, 2012
|
(dollars
in thousands)
|
|
|
|
|
|
|
|
|
|
Property
|
|
Interest
Rate
|
|
Term
|
|
Outstanding
Principal
|
|
Maturity
|
|
|
|
|
|
|
|
|
|
Courtyard
Manhattan / Midtown East
|
|
8.810%
|
|
Fixed
|
|
$
42,122
|
|
October
2014
|
Salt
Lake City Marriott Downtown
|
|
5.500%
|
|
Fixed
|
|
29,436
|
|
January
2015
|
Courtyard
Manhattan / Fifth Avenue
|
|
6.480%
|
|
Fixed
|
|
50,445
|
|
June
2016
|
Los
Angeles Airport Marriott
|
|
5.300%
|
|
Fixed
|
|
82,600
|
|
July
2015
|
Frenchman's
Reef Marriott
|
5.440%
|
|
Fixed
|
|
59,174
|
|
August
2015
|
Renaissance
Worthington
|
|
5.400%
|
|
Fixed
|
|
55,126
|
|
July
2015
|
Orlando
Airport Marriott
|
|
5.680%
|
|
Fixed
|
|
57,964
|
|
January
2016
|
Chicago
Marriott Downtown
|
|
5.975%
|
|
Fixed
|
|
212,922
|
|
April
2016
|
Hilton
Minneapolis
|
|
5.464%
|
|
Fixed
|
|
98,016
|
|
April
2021
|
JW
Marriott Denver Cherry Creek
|
|
6.470%
|
|
Fixed
|
|
41,354
|
|
July
2015
|
Lexington
Hotel New York
|
|
LIBOR
+
3.00
|
|
Variable
|
|
170,368
|
|
March
2015
|
Debt
premium (1)
|
|
|
|
|
|
1,097
|
|
|
Total
mortgage debt
|
|
|
|
|
|
900,624
|
|
|
|
|
|
|
|
|
|
|
|
Senior
unsecured credit facility
|
|
LIBOR
+
2.75
|
|
Variable
|
|
-
|
|
August
2014
|
Total
debt
|
|
|
|
$
900,624
|
|
|
(1)
Non-cash GAAP adjustment recorded upon the assumption of the JW
Marriott Denver at Cherry Creek mortgage debt in 2011.
|
|
|
|
|
|
|
|
|
|
|
Pro
Forma Operating Statistics – Second Quarter (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ADR
|
|
Occupancy
|
|
RevPAR
|
|
Hotel
Adjusted EBITDA Margin
|
|
|
2Q
2012
|
2Q
2011
|
B/(W)
|
|
2Q
2012
|
2Q
2011
|
B/(W)
|
|
2Q
2012
|
2Q
2011
|
B/(W)
|
|
2Q
2012
|
2Q
2011
|
B/(W)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Atlanta
Alpharetta
|
|
$
137.08
|
$
131.89
|
3.9%
|
|
69.3%
|
69.7%
|
(0.4%)
|
|
$ 95.04
|
$ 91.95
|
3.4%
|
|
32.55%
|
29.41%
|
314 bps
|
Westin
Atlanta North (2)
|
|
$
105.91
|
$
107.68
|
(1.6%)
|
|
82.8%
|
73.8%
|
9.0%
|
|
$ 87.70
|
$ 79.51
|
10.3%
|
|
21.93%
|
16.66%
|
527 bps
|
Bethesda
Marriott Suites
|
|
$
164.59
|
$
175.36
|
(6.1%)
|
|
77.0%
|
78.3%
|
(1.3%)
|
|
$
126.77
|
$
137.38
|
(7.7%)
|
|
32.02%
|
35.00%
|
-298
bps
|
Boston
Westin (2)
|
|
$
211.08
|
$
196.99
|
7.2%
|
|
77.8%
|
75.9%
|
1.9%
|
|
$
164.12
|
$
149.59
|
9.7%
|
|
26.30%
|
28.87%
|
-257
bps
|
Renaissance
Charleston
|
|
$
208.44
|
$
190.81
|
9.2%
|
|
91.2%
|
92.7%
|
(1.5%)
|
|
$
190.08
|
$
176.81
|
7.5%
|
|
41.79%
|
42.12%
|
-33 bps
|
Hilton
Garden Inn Chelsea (2)
|
|
$
209.02
|
$
208.56
|
0.2%
|
|
96.3%
|
94.3%
|
2.0%
|
|
$
201.37
|
$
196.64
|
2.4%
|
|
44.57%
|
47.50%
|
-293
bps
|
Chicago
Marriott
|
|
$
219.46
|
$
212.30
|
3.4%
|
|
79.2%
|
74.8%
|
4.4%
|
|
$
173.85
|
$
158.89
|
9.4%
|
|
29.41%
|
27.58%
|
183 bps
|
Chicago
Conrad (2)
|
|
$
200.60
|
$
183.19
|
9.5%
|
|
81.2%
|
90.4%
|
(9.2%)
|
|
$
162.93
|
$
165.68
|
(1.7%)
|
|
26.85%
|
29.32%
|
-247
bps
|
Courtyard
Denver Downtown (2)
|
|
$
162.40
|
$
154.24
|
5.3%
|
|
84.5%
|
73.5%
|
11.0%
|
|
$
137.22
|
$
113.39
|
21.0%
|
|
47.36%
|
42.89%
|
447 bps
|
Courtyard
Fifth Avenue
|
|
$
280.54
|
$
273.59
|
2.5%
|
|
88.3%
|
88.7%
|
(0.4%)
|
|
$
247.79
|
$
242.65
|
2.1%
|
|
30.90%
|
35.00%
|
-410
bps
|
Courtyard
Midtown East
|
|
$
283.42
|
$
274.79
|
3.1%
|
|
86.1%
|
86.5%
|
(0.4%)
|
|
$
244.06
|
$
237.81
|
2.6%
|
|
38.59%
|
40.67%
|
-208
bps
|
Frenchman's
Reef (2)
|
|
$
264.01
|
$
236.65
|
11.6%
|
|
82.1%
|
85.1%
|
(3.0%)
|
|
$
216.74
|
$
201.37
|
7.6%
|
|
26.33%
|
12.57%
|
1376
bps
|
JW
Marriott Denver Cherry Creek (2)
|
|
$
222.44
|
$
227.82
|
(2.4%)
|
|
73.9%
|
71.4%
|
2.5%
|
|
$
164.28
|
$
162.77
|
0.9%
|
|
29.03%
|
25.73%
|
330 bps
|
Los
Angeles Airport
|
|
$
111.87
|
$
102.00
|
9.7%
|
|
85.0%
|
84.6%
|
0.4%
|
|
$ 95.06
|
$ 86.34
|
10.1%
|
|
21.38%
|
18.66%
|
272 bps
|
Hilton
Minneapolis (2)
|
|
$
139.47
|
$
139.44
|
0.0%
|
|
72.6%
|
73.3%
|
(0.7%)
|
|
$
101.26
|
$
102.28
|
(1.0%)
|
|
25.91%
|
29.44%
|
-353
bps
|
Oak
Brook Hills
|
|
$
113.55
|
$
114.85
|
(1.1%)
|
|
59.6%
|
62.1%
|
(2.5%)
|
|
$ 67.65
|
$ 71.32
|
(5.1%)
|
|
8.74%
|
18.22%
|
-948
bps
|
Orlando
Airport Marriott
|
|
$
105.42
|
$ 99.93
|
5.5%
|
|
74.7%
|
73.6%
|
1.1%
|
|
$ 78.75
|
$ 73.50
|
7.1%
|
|
23.87%
|
17.80%
|
607 bps
|
Salt
Lake City Marriott
|
|
$
131.35
|
$
125.83
|
4.4%
|
|
66.3%
|
63.9%
|
2.4%
|
|
$ 87.13
|
$ 80.47
|
8.3%
|
|
26.52%
|
27.65%
|
-113
bps
|
The
Lodge at Sonoma
|
|
$
223.57
|
$
205.20
|
9.0%
|
|
77.4%
|
76.5%
|
0.9%
|
|
$
172.94
|
$
157.07
|
10.1%
|
|
20.32%
|
18.02%
|
230 bps
|
Torrance
Marriott South Bay
|
|
$
109.01
|
$
105.69
|
3.1%
|
|
85.6%
|
79.0%
|
6.6%
|
|
$ 93.35
|
$ 83.46
|
11.8%
|
|
27.04%
|
25.18%
|
186 bps
|
Vail
Marriott (2)
|
|
$
248.07
|
$
245.67
|
1.0%
|
|
54.6%
|
51.4%
|
3.2%
|
|
$
135.33
|
$
126.17
|
7.3%
|
|
23.26%
|
21.48%
|
178 bps
|
Radisson
Lexington Hotel New York (2)
|
|
$
212.45
|
$
196.69
|
8.0%
|
|
94.1%
|
96.9%
|
(2.8%)
|
|
$
199.91
|
$
190.65
|
4.9%
|
|
36.36%
|
37.12%
|
-76 bps
|
Renaissance
Worthington
|
|
$
156.48
|
$
160.33
|
(2.4%)
|
|
75.7%
|
69.4%
|
6.3%
|
|
$
118.39
|
$
111.26
|
6.4%
|
|
33.22%
|
28.65%
|
457 bps
|
Total/Weighted
Average
|
|
$
177.90
|
$
170.00
|
4.6%
|
|
78.7%
|
77.3%
|
1.4%
|
|
$
139.98
|
$
131.45
|
6.5%
|
|
28.20%
|
27.30%
|
90 bps
|
Pro
Forma Total/Weighted Average (3)
|
|
$
173.31
|
$
167.05
|
3.7%
|
|
78.5%
|
77.0%
|
1.5%
|
|
$
136.07
|
$
128.65
|
5.8%
|
|
28.39%
|
28.31%
|
8 bps
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
The pro forma operating data includes the operating results for the
Company's hotels assuming they were owned since January 1, 2011.
|
(2)
The hotel reports results on a monthly basis. The data presented is
based upon the Company's reporting calendar for the second quarter and
includes the months of March, April and May.
|
(3)
The pro forma total excludes the Frenchman's Reef & Morning Star
Marriott Beach Resort due to the renovation in 2011.
|
Pro
Forma Operating Statistics – Year to Date (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ADR
|
|
Occupancy
|
|
RevPAR
|
|
Hotel
Adjusted EBITDA Margin
|
|
|
YTD
2012
|
YTD
2011
|
B/(W)
|
|
YTD
2012
|
YTD
2011
|
B/(W)
|
|
YTD
2012
|
YTD
2011
|
B/(W)
|
|
YTD
2012
|
YTD
2011
|
B/(W)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Atlanta
Alpharetta
|
|
$
140.78
|
$
134.19
|
4.9%
|
|
68.3%
|
68.4%
|
(0.1%)
|
|
$ 96.13
|
$ 91.77
|
4.8%
|
|
34.32%
|
31.50%
|
282 bps
|
Westin
Atlanta North (2)
|
|
$
107.84
|
$
108.56
|
(0.7%)
|
|
80.3%
|
70.0%
|
10.3%
|
|
$ 86.60
|
$ 75.95
|
14.0%
|
|
21.73%
|
15.49%
|
624 bps
|
Atlanta
Waverly (3)
|
|
$
132.02
|
$
133.36
|
(1.0%)
|
|
73.8%
|
67.6%
|
6.2%
|
|
$ 97.48
|
$ 90.13
|
8.2%
|
|
26.33%
|
23.55%
|
278 bps
|
Renaissance
Austin (3)
|
|
$
154.28
|
$
148.11
|
4.2%
|
|
73.9%
|
71.4%
|
2.5%
|
|
$
114.06
|
$
105.69
|
7.9%
|
|
38.50%
|
35.14%
|
336 bps
|
Bethesda
Marriott Suites
|
|
$
169.28
|
$
175.60
|
(3.6%)
|
|
64.5%
|
66.5%
|
(2.0%)
|
|
$
109.15
|
$
116.80
|
(6.5%)
|
|
27.17%
|
29.05%
|
-188
bps
|
Boston
Westin (2)
|
|
$
196.64
|
$
185.47
|
6.0%
|
|
68.6%
|
64.7%
|
3.9%
|
|
$
134.95
|
$
120.00
|
12.5%
|
|
18.30%
|
19.03%
|
-73 bps
|
Renaissance
Charleston
|
|
$
190.30
|
$
176.19
|
8.0%
|
|
85.7%
|
84.1%
|
1.6%
|
|
$
163.09
|
$
148.26
|
10.0%
|
|
36.40%
|
35.45%
|
95 bps
|
Hilton
Garden Inn Chelsea (2)
|
|
$
187.69
|
$
187.66
|
0.0%
|
|
93.4%
|
90.1%
|
3.3%
|
|
$
175.24
|
$
169.09
|
3.6%
|
|
37.93%
|
40.97%
|
-304
bps
|
Chicago
Marriott
|
|
$
193.36
|
$
189.57
|
2.0%
|
|
67.6%
|
62.9%
|
4.7%
|
|
$
130.68
|
$
119.19
|
9.6%
|
|
18.91%
|
17.75%
|
116 bps
|
Chicago
Conrad (2)
|
|
$
185.34
|
$
170.74
|
8.6%
|
|
72.1%
|
78.8%
|
(6.7%)
|
|
$
133.72
|
$
134.60
|
(0.7%)
|
|
14.59%
|
18.55%
|
-396
bps
|
Courtyard
Denver Downtown (2)
|
|
$
154.07
|
$
148.71
|
3.6%
|
|
83.0%
|
71.7%
|
11.3%
|
|
$
127.88
|
$
106.69
|
19.9%
|
|
44.54%
|
39.47%
|
507 bps
|
Courtyard
Fifth Avenue
|
|
$
250.04
|
$
243.45
|
2.7%
|
|
86.2%
|
83.7%
|
2.5%
|
|
$
215.56
|
$
203.69
|
5.8%
|
|
22.51%
|
24.47%
|
-196
bps
|
Courtyard
Midtown East
|
|
$
248.19
|
$
241.91
|
2.6%
|
|
82.6%
|
80.5%
|
2.1%
|
|
$
204.99
|
$
194.68
|
5.3%
|
|
29.53%
|
29.67%
|
-14 bps
|
Frenchman's
Reef (2)
|
|
$
272.42
|
$
253.11
|
7.6%
|
|
82.7%
|
82.1%
|
0.6%
|
|
$
225.43
|
$
207.72
|
8.5%
|
|
28.46%
|
20.04%
|
842 bps
|
Griffin
Gate Marriott (3)
|
|
$
118.51
|
$
113.30
|
4.6%
|
|
45.8%
|
43.9%
|
1.9%
|
|
$ 54.31
|
$ 49.78
|
9.1%
|
|
(2.46%)
|
0.97%
|
-343
bps
|
JW
Marriott Denver Cherry Creek (2)
|
|
$
218.94
|
$
224.86
|
(2.6%)
|
|
71.4%
|
67.8%
|
3.6%
|
|
$
156.39
|
$
152.39
|
2.6%
|
|
25.76%
|
23.53%
|
223 bps
|
Los
Angeles Airport
|
|
$
109.98
|
$
105.19
|
4.6%
|
|
87.3%
|
84.0%
|
3.3%
|
|
$ 96.05
|
$ 88.36
|
8.7%
|
|
20.77%
|
18.48%
|
229 bps
|
Hilton
Minneapolis (2)
|
|
$
130.46
|
$
130.59
|
(0.1%)
|
|
67.5%
|
68.1%
|
(0.6%)
|
|
$ 88.09
|
$ 88.97
|
(1.0%)
|
|
20.34%
|
24.83%
|
-449
bps
|
Oak
Brook Hills
|
|
$
112.58
|
$
111.74
|
0.8%
|
|
54.7%
|
49.4%
|
5.3%
|
|
$ 61.57
|
$ 55.18
|
11.6%
|
|
3.47%
|
3.08%
|
39 bps
|
Orlando
Airport Marriott
|
|
$
110.82
|
$
104.61
|
5.9%
|
|
79.2%
|
81.5%
|
(2.3%)
|
|
$ 87.81
|
$ 85.23
|
3.0%
|
|
28.53%
|
26.98%
|
155 bps
|
Salt
Lake City Marriott
|
|
$
135.38
|
$
126.18
|
7.3%
|
|
68.8%
|
60.8%
|
8.0%
|
|
$ 93.10
|
$ 76.75
|
21.3%
|
|
31.44%
|
25.50%
|
594 bps
|
The
Lodge at Sonoma
|
|
$
207.18
|
$
189.95
|
9.1%
|
|
64.8%
|
64.7%
|
0.1%
|
|
$
134.33
|
$
122.93
|
9.3%
|
|
11.42%
|
5.93%
|
549 bps
|
Torrance
Marriott South Bay
|
|
$
109.92
|
$
105.87
|
3.8%
|
|
83.2%
|
78.4%
|
4.8%
|
|
$ 91.49
|
$ 83.01
|
10.2%
|
|
25.40%
|
23.11%
|
229 bps
|
Vail
Marriott (2)
|
|
$
284.27
|
$
278.73
|
2.0%
|
|
64.2%
|
62.7%
|
1.5%
|
|
$
182.38
|
$
174.76
|
4.4%
|
|
35.26%
|
34.19%
|
107 bps
|
Radisson
Lexington Hotel New York (2)
|
|
$
184.13
|
$
170.71
|
7.9%
|
|
93.3%
|
94.0%
|
(0.7%)
|
|
$
171.70
|
$
160.45
|
7.0%
|
|
30.20%
|
28.58%
|
162 bps
|
Renaissance
Worthington
|
|
$
156.28
|
$
166.72
|
(6.3%)
|
|
76.7%
|
71.8%
|
4.9%
|
|
$
119.79
|
$
119.78
|
0.0%
|
|
33.21%
|
34.51%
|
-130
bps
|
Total/Weighted
Average
|
|
$
165.39
|
$
159.66
|
3.6%
|
|
74.9%
|
72.0%
|
2.9%
|
|
$
123.80
|
$
115.00
|
7.7%
|
|
24.47%
|
23.27%
|
120 bps
|
Comparable
Total/Weighted Average (4)
|
|
$
167.06
|
$
161.15
|
3.7%
|
|
75.5%
|
72.7%
|
2.8%
|
|
$
126.10
|
$
117.21
|
7.6%
|
|
24.35%
|
23.20%
|
115 bps
|
Pro
Forma Total/Weighted Average (5)
|
|
$
161.78
|
$
157.05
|
3.0%
|
|
75.2%
|
72.4%
|
2.8%
|
|
$
121.58
|
$
113.66
|
7.0%
|
|
23.94%
|
23.45%
|
49 bps
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
The pro forma operating data includes the operating results for the
Company's hotels assuming they were owned since January 1, 2011.
|
(2)
The hotel reports results on a monthly basis. The data presented is
based upon the Company's reporting calendar and includes the months of
January through May.
|
(3)
The hotel was sold on March 23, 2012. The 2011 operating results
presented are for the ownership period comparable to the Company's 2012
ownership period.
|
(4)
The comparable total excludes the three hotels sold on March 23, 2012.
|
(5)
The pro forma total excludes the Frenchman's Reef & Morning Star
Marriott Beach Resort and the three hotels sold on March 23, 2012.
|
Pro
Forma Hotel Adjusted EBITDA Reconciliation
|
|
|
|
|
|
|
|
|
|
|
|
Second
Quarter 2012 (1)
|
|
|
|
|
|
Plus:
|
Plus:
|
Plus:
|
Equals:
|
|
|
Total
Revenues
|
|
Net
Income / (Loss)
|
Depreciation
|
Interest
Expense
|
Non-Cash
Adjustments (2)
|
Hotel
Adjusted EBITDA
|
Atlanta
Alpharetta
|
|
$ 3,638
|
|
$ 879
|
$ 305
|
$ -
|
$ -
|
$ 1,184
|
Westin
Atlanta North (3)
|
|
$ 4,596
|
|
$ 567
|
$ 441
|
$ -
|
$ -
|
$ 1,008
|
Bethesda
Marriott Suites
|
|
$ 3,932
|
|
$ (667)
|
$ 479
|
$ -
|
$ 1,447
|
$ 1,259
|
Boston
Westin (3)
|
|
$
21,308
|
|
$ 3,685
|
$ 1,917
|
$ -
|
$ 2
|
$ 5,604
|
Renaissance
Charleston
|
|
$ 3,173
|
|
$ 1,005
|
$ 350
|
$ -
|
$ (29)
|
$ 1,326
|
Hilton
Garden Inn Chelsea (3)
|
|
$ 3,239
|
|
$ 1,007
|
$ 437
|
$ -
|
$ -
|
$ 1,444
|
Chicago
Marriott
|
|
$
26,587
|
|
$ 2,216
|
$ 2,991
|
$ 2,981
|
$ (365)
|
$ 7,823
|
Chicago
Conrad (3)
|
|
$ 5,956
|
|
$ 830
|
$ 768
|
$ -
|
$ -
|
$ 1,598
|
Courtyard
Denver Downtown (3)
|
|
$ 2,405
|
|
$ 904
|
$ 235
|
$ -
|
$ -
|
$ 1,139
|
Courtyard
Fifth Avenue
|
|
$ 3,887
|
|
$ (68)
|
$ 430
|
$ 792
|
$ 48
|
$ 1,202
|
Courtyard
Midtown East
|
|
$ 6,647
|
|
$ 1,116
|
$ 548
|
$ 901
|
$ -
|
$ 2,565
|
Frenchman's
Reef (3)
|
|
$
16,479
|
|
$ 2,116
|
$ 1,451
|
$ 772
|
$ -
|
$ 4,339
|
JW
Marriott Denver Cherry Creek (3)
|
|
$ 4,743
|
|
$ 403
|
$ 420
|
$ 554
|
$ -
|
$ 1,377
|
Los
Angeles Airport
|
|
$
13,805
|
|
$ 574
|
$ 1,340
|
$ 1,037
|
$ -
|
$ 2,951
|
Minneapolis
Hilton (3)
|
|
$
12,190
|
|
$ 254
|
$ 1,748
|
$ 1,272
|
$ (116)
|
$ 3,158
|
Oak
Brook Hills
|
|
$ 5,046
|
|
$ (415)
|
$ 731
|
$ -
|
$ 125
|
$ 441
|
Orlando
Airport Marriott
|
|
$ 4,863
|
|
$ (300)
|
$ 688
|
$ 773
|
$ -
|
$ 1,161
|
Salt
Lake City Marriott
|
|
$ 5,297
|
|
$ 374
|
$ 646
|
$ 385
|
$ -
|
$ 1,405
|
The
Lodge at Sonoma
|
|
$ 4,548
|
|
$ 574
|
$ 350
|
$ -
|
$ -
|
$ 924
|
Torrance
Marriott South Bay
|
|
$ 5,363
|
|
$ 713
|
$ 737
|
$ -
|
$ -
|
$ 1,450
|
Vail
Marriott (3)
|
|
$ 5,749
|
|
$ 802
|
$ 535
|
$ -
|
$ -
|
$ 1,337
|
Radisson
Lexington Hotel New York (3)
|
|
$
13,898
|
|
$ 491
|
$ 2,363
|
$ 2,166
|
$ 33
|
$ 5,053
|
Renaissance
Worthington
|
|
$ 8,198
|
|
$ 1,359
|
$ 661
|
$ 704
|
$ (1)
|
$ 2,723
|
Total
|
|
$
185,547
|
|
$
18,419
|
$
20,571
|
$
12,337
|
$ 1,144
|
$
52,330
|
Pro
Forma Total (4)
|
|
$
169,068
|
|
$
16,303
|
$
19,120
|
$
11,565
|
$ 1,144
|
$
47,987
|
(1)
The pro forma operating data includes the operating results for the
Company's hotels assuming they were owned since January 1, 2011.
|
(2)
The non-cash adjustments include expenses incurred by the hotels due to
the straight lining of the rent from ground lease obligations, the
non-cash amortization of favorable lease assets, and the non-cash
amortization of unfavorable contract liabilities.
|
(3)
The hotel reports results on a monthly basis. The amounts presented are
based on the Company's reporting calendar for the second quarter and
include the months of March, April and May.
|
(4)
The pro forma total excludes the Frenchman's Reef & Morning Star
Marriott Beach Resort due to the renovation in 2011.
|
Pro
Forma Hotel Adjusted EBITDA Reconciliation
|
|
|
Second
Quarter 2011 (1)
|
|
|
|
|
|
Plus:
|
Plus:
|
Plus:
|
Equals:
|
|
|
Total
Revenues
|
|
Net
Income / (Loss)
|
Depreciation
|
Interest
Expense
|
Non-Cash
Adjustments (2)
|
Hotel
Adjusted EBITDA
|
Atlanta
Alpharetta
|
|
$ 3,570
|
|
$ 762
|
$ 288
|
$ -
|
$ -
|
$ 1,050
|
Westin
Atlanta North (3)
|
|
$ 4,220
|
|
$ 288
|
$ 415
|
$ -
|
$ -
|
$ 703
|
Bethesda
Marriott Suites
|
|
$ 4,271
|
|
$ (434)
|
$ 483
|
$ -
|
$ 1,446
|
$ 1,495
|
Boston
Westin (3)
|
|
$
18,731
|
|
$ 2,428
|
$ 2,863
|
$ -
|
$ 117
|
$ 5,408
|
Renaissance
Charleston
|
|
$ 3,001
|
|
$ 961
|
$ 332
|
$ -
|
$ (29)
|
$ 1,264
|
Hilton
Garden Inn Chelsea (3)
|
|
$ 3,158
|
|
$ 1,076
|
$ 424
|
$ -
|
$ -
|
$ 1,500
|
Chicago
Marriott
|
|
$
23,699
|
|
$ 893
|
$ 2,949
|
$ 3,059
|
$ (365)
|
$ 6,536
|
Chicago
Conrad (3)
|
|
$ 6,133
|
|
$ 662
|
$ 1,136
|
$ -
|
$ -
|
$ 1,798
|
Courtyard
Denver Downtown (3)
|
|
$ 2,010
|
|
$ 293
|
$ 234
|
$ 335
|
$ -
|
$ 862
|
Courtyard
Fifth Avenue
|
|
$ 3,863
|
|
$ 67
|
$ 439
|
$ 798
|
$ 48
|
$ 1,352
|
Courtyard
Midtown East
|
|
$ 6,462
|
|
$ 1,189
|
$ 530
|
$ 909
|
$ -
|
$ 2,628
|
Frenchman's
Reef (3)
|
|
$
10,771
|
|
$ (329)
|
$ 978
|
$ 705
|
$ -
|
$ 1,354
|
JW
Marriott Denver Cherry Creek (3)
|
|
$ 4,676
|
|
$ 212
|
$ 417
|
$ 574
|
$ -
|
$ 1,203
|
Los
Angeles Airport
|
|
$
12,349
|
|
$ (247)
|
$ 1,516
|
$ 1,035
|
$ -
|
$ 2,304
|
Minneapolis
Hilton (3)
|
|
$
12,450
|
|
$ 1,104
|
$ 1,694
|
$ 983
|
$ (116)
|
$ 3,665
|
Oak
Brook Hills
|
|
$ 5,577
|
|
$ 156
|
$ 735
|
$ -
|
$ 125
|
$ 1,016
|
Orlando
Airport Marriott
|
|
$ 4,394
|
|
$ (755)
|
$ 754
|
$ 783
|
$ -
|
$ 782
|
Salt
Lake City Marriott
|
|
$ 5,056
|
|
$ 366
|
$ 628
|
$ 404
|
$ -
|
$ 1,398
|
The
Lodge at Sonoma
|
|
$ 3,996
|
|
$ 398
|
$ 322
|
$ -
|
$ -
|
$ 720
|
Torrance
Marriott South Bay
|
|
$ 5,004
|
|
$ 523
|
$ 737
|
$ -
|
$ -
|
$ 1,260
|
Vail
Marriott (3)
|
|
$ 5,246
|
|
$ 620
|
$ 507
|
$ -
|
$ -
|
$ 1,127
|
Radisson
Lexington Hotel New York (3)
|
|
$
13,155
|
|
$ 2,561
|
$ 2,289
|
$ -
|
$ 33
|
$ 4,883
|
Renaissance
Worthington
|
|
$ 7,467
|
|
$ 797
|
$ 625
|
$ 714
|
$ 3
|
$ 2,139
|
Total
|
|
$
169,259
|
|
$
13,591
|
$
21,295
|
$
10,299
|
$ 1,262
|
$
46,216
|
Pro
Forma Total (4)
|
|
$
158,488
|
|
$
13,920
|
$
20,317
|
$ 9,594
|
$ 1,262
|
$
44,867
|
(1)
The pro forma operating data includes the operating results for the
Company's hotels assuming they were owned as of January 1, 2011.
|
(2)
The non-cash adjustments include expenses incurred by the hotels due to
the straight lining of the rent from ground lease obligations, the
non-cash amortization of our favorable lease assets and the non-cash
amortization of our unfavorable contract liabilities.
|
(3)
The hotel reports results on a monthly basis. The amounts presented are
based on the Company's reporting calendar for the second quarter and
include the months of March, April and May.
|
(4)
The pro forma total excludes the Frenchman's Reef & Morning Star
Marriott Beach Resort due to the renovation in 2011.
|
Pro
Forma Hotel Adjusted EBITDA Reconciliation
|
|
|
|
|
|
|
|
|
|
|
|
Year
to Date 2012 (1)
|
|
|
|
|
|
Plus:
|
Plus:
|
Plus:
|
Equals:
|
|
|
Total
Revenues
|
|
Net
Income / (Loss)
|
Depreciation
|
Interest
Expense
|
Non-Cash
Adjustments (2)
|
Hotel
Adjusted EBITDA
|
Atlanta
Alpharetta
|
|
$ 7,486
|
|
$ 1,971
|
$ 598
|
$ -
|
$ -
|
$ 2,569
|
Westin
Atlanta North (3)
|
|
$ 7,597
|
|
$ 753
|
$ 898
|
$ -
|
$ -
|
$ 1,651
|
Atlanta
Waverly (4)
|
|
$ 7,755
|
|
$ 805
|
$ -
|
$ 1,237
|
$ -
|
$ 2,042
|
Renaissance
Austin (4)
|
|
$ 8,385
|
|
$ 2,167
|
$ -
|
$ 1,061
|
$ -
|
$ 3,228
|
Bethesda
Marriott Suites
|
|
$ 6,878
|
|
$
(1,979)
|
$ 958
|
$ -
|
$ 2,890
|
$ 1,869
|
Boston
Westin (3)
|
|
$
28,711
|
|
$ 1,096
|
$ 4,155
|
$ -
|
$ 3
|
$ 5,254
|
Renaissance
Charleston
|
|
$ 5,498
|
|
$ 1,373
|
$ 696
|
$ -
|
$ (58)
|
$ 2,011
|
Hilton
Garden Inn Chelsea (3)
|
|
$ 4,675
|
|
$ 899
|
$ 874
|
$ -
|
$ -
|
$ 1,773
|
Chicago
Marriott
|
|
$
39,626
|
|
$
(3,373)
|
$ 5,643
|
$ 5,955
|
$ (730)
|
$ 7,495
|
Chicago
Conrad (3)
|
|
$ 8,025
|
|
$ (363)
|
$ 1,534
|
$ -
|
$ -
|
$ 1,171
|
Courtyard
Denver Downtown (3)
|
|
$ 3,716
|
|
$ 1,008
|
$ 472
|
$ 175
|
$ -
|
$ 1,655
|
Courtyard
Fifth Avenue
|
|
$ 6,740
|
|
$
(1,009)
|
$ 855
|
$ 1,576
|
$ 95
|
$ 1,517
|
Courtyard
Midtown East
|
|
$
11,181
|
|
$ 414
|
$ 1,094
|
$ 1,794
|
$ -
|
$ 3,302
|
Frenchman's
Reef (3)
|
|
$
27,377
|
|
$ 3,346
|
$ 2,890
|
$ 1,555
|
$ -
|
$ 7,791
|
Griffin
Gate Marriott (4)
|
|
$ 3,462
|
|
$ (84)
|
$ -
|
$ -
|
$ (1)
|
$ (85)
|
JW
Marriott Denver Cherry Creek (3)
|
|
$ 7,412
|
|
$ (32)
|
$ 839
|
$ 1,102
|
$ -
|
$ 1,909
|
Los
Angeles Airport
|
|
$
26,906
|
|
$ 841
|
$ 2,688
|
$ 2,060
|
$ -
|
$ 5,589
|
Minneapolis
Hilton (3)
|
|
$
18,123
|
|
$
(2,059)
|
$ 3,489
|
$ 2,534
|
$ (277)
|
$ 3,687
|
Oak
Brook Hills
|
|
$ 8,907
|
|
$
(1,407)
|
$ 1,466
|
$ -
|
$ 250
|
$ 309
|
Orlando
Airport Marriott
|
|
$
10,471
|
|
$ 61
|
$ 1,388
|
$ 1,538
|
$ -
|
$ 2,987
|
Salt
Lake City Marriott
|
|
$
11,472
|
|
$ 1,556
|
$ 1,281
|
$ 770
|
$ -
|
$ 3,607
|
The
Lodge at Sonoma
|
|
$ 7,321
|
|
$ 150
|
$ 686
|
$ -
|
$ -
|
$ 836
|
Torrance
Marriott South Bay
|
|
$
10,345
|
|
$ 1,156
|
$ 1,472
|
$ -
|
$ -
|
$ 2,628
|
Vail
Marriott (3)
|
|
$
12,460
|
|
$ 3,324
|
$ 1,069
|
$ -
|
$ -
|
$ 4,393
|
Radisson
Lexington Hotel New York (3)
|
|
$
19,855
|
|
$
(1,758)
|
$ 4,724
|
$ 2,529
|
$ 67
|
$ 5,562
|
Renaissance
Worthington
|
|
$
16,188
|
|
$ 2,649
|
$ 1,318
|
$ 1,403
|
$ 6
|
$ 5,376
|
Total
|
|
$
326,572
|
|
$
11,505
|
$
41,087
|
$
25,289
|
$ 2,245
|
$
79,918
|
Comparable
Total (4)
|
|
$
306,969
|
|
$ 8,617
|
$
41,087
|
$
22,991
|
$ 2,246
|
$
74,733
|
Pro
Forma Total (5)
|
|
$
279,593
|
|
$ 5,271
|
$
38,197
|
$
21,436
|
$ 2,246
|
$
66,942
|
(1)
The pro forma operating data includes the operating results for the
Company's hotels assuming they were owned since January 1, 2011.
|
(2)
The non-cash adjustments include expenses incurred by the hotels due to
the straight lining of the rent from ground lease obligations, the
non-cash amortization of favorable lease assets, and the non-cash
amortization of unfavorable contract liabilities.
|
(3)
The hotel reports results on a monthly basis. The amounts presented are
based on the Company's reporting calendar and includes the months of
January to May.
|
(4)
The hotel was sold on March 23, 2012 and the comparable total excludes
these hotels.
|
(5)
The pro forma total excludes the Frenchman's Reef & Morning Star
Marriott Beach Resort and the three hotels sold on March 23, 2012.
|
Pro Forma Hotel Adjusted EBITDA Reconciliation
|
|
|
|
|
|
|
|
|
|
|
|
Year
to Date 2011 (1)
|
|
|
|
|
|
Plus:
|
Plus:
|
Plus:
|
Equals:
|
|
|
Total
Revenues
|
|
Net
Income / (Loss)
|
Depreciation
|
Interest
Expense
|
Non-Cash
Adjustments (2)
|
Hotel
Adjusted EBITDA
|
Atlanta
Alpharetta
|
|
$ 7,241
|
|
$ 1,708
|
$ 573
|
$ -
|
$ -
|
$ 2,281
|
Westin
Atlanta North (3)
|
|
$ 6,720
|
|
$ 198
|
$ 843
|
$ -
|
$ -
|
$ 1,041
|
Atlanta
Waverly (4)
|
|
$ 7,332
|
|
$ 476
|
$ -
|
$ 1,251
|
$ -
|
$ 1,727
|
Renaissance
Austin (4)
|
|
$ 7,669
|
|
$ 1,621
|
$ -
|
$ 1,074
|
$ -
|
$ 2,695
|
Bethesda
Marriott Suites
|
|
$ 7,354
|
|
$
(1,731)
|
$ 970
|
$ -
|
$ 2,897
|
$ 2,136
|
Boston
Westin (3)
|
|
$
24,952
|
|
$
(1,256)
|
$ 5,771
|
$ -
|
$ 234
|
$ 4,749
|
Renaissance
Charleston
|
|
$ 5,052
|
|
$ 1,186
|
$ 663
|
$ -
|
$ (58)
|
$ 1,791
|
Hilton
Garden Inn Chelsea (3)
|
|
$ 4,469
|
|
$ 985
|
$ 846
|
$ -
|
$ -
|
$ 1,831
|
Chicago
Marriott
|
|
$
36,106
|
|
$
(5,231)
|
$ 6,262
|
$ 6,108
|
$ (730)
|
$ 6,409
|
Chicago
Conrad (3)
|
|
$ 8,235
|
|
$ (745)
|
$ 2,273
|
$ -
|
$ -
|
$ 1,528
|
Courtyard
Denver Downtown (3)
|
|
$ 3,109
|
|
$ 89
|
$ 468
|
$ 670
|
$ -
|
$ 1,227
|
Courtyard
Fifth Avenue
|
|
$ 6,466
|
|
$ (988)
|
$ 878
|
$ 1,597
|
$ 95
|
$ 1,582
|
Courtyard
Midtown East
|
|
$
10,660
|
|
$ 262
|
$ 1,062
|
$ 1,839
|
$ -
|
$ 3,163
|
Frenchman's
Reef (3)
|
|
$
20,406
|
|
$ 656
|
$ 1,931
|
$ 1,503
|
$ -
|
$ 4,090
|
Griffin
Gate Marriott (4)
|
|
$ 3,286
|
|
$ 33
|
$ -
|
$ -
|
$ (1)
|
$ 32
|
JW
Marriott Denver Cherry Creek (3)
|
|
$ 7,302
|
|
$ (264)
|
$ 834
|
$ 1,149
|
$ -
|
$ 1,719
|
Los
Angeles Airport
|
|
$
24,605
|
|
$ (350)
|
$ 2,825
|
$ 2,071
|
$ -
|
$ 4,546
|
Minneapolis
Hilton (3)
|
|
$
18,578
|
|
$ 577
|
$ 3,376
|
$ 983
|
$ (324)
|
$ 4,612
|
Oak
Brook Hills
|
|
$ 8,185
|
|
$
(1,475)
|
$ 1,477
|
$ -
|
$ 250
|
$ 252
|
Orlando
Airport Marriott
|
|
$
10,408
|
|
$ (269)
|
$ 1,509
|
$ 1,568
|
$ -
|
$ 2,808
|
Salt
Lake City Marriott
|
|
$ 9,828
|
|
$ 437
|
$ 1,256
|
$ 813
|
$ -
|
$ 2,506
|
The
Lodge at Sonoma
|
|
$ 6,598
|
|
$ (260)
|
$ 651
|
$ -
|
$ -
|
$ 391
|
Torrance
Marriott South Bay
|
|
$ 9,670
|
|
$ 762
|
$ 1,473
|
$ -
|
$ -
|
$ 2,235
|
Vail
Marriott (3)
|
|
$
11,740
|
|
$ 2,998
|
$ 1,016
|
$ -
|
$ -
|
$ 4,014
|
Radisson
Lexington Hotel New York (3)
|
|
$
18,341
|
|
$ 596
|
$ 4,578
|
$ -
|
$ 67
|
$ 5,241
|
Renaissance
Worthington
|
|
$
15,898
|
|
$ 2,800
|
$ 1,251
|
$ 1,431
|
$ 5
|
$ 5,487
|
Total
|
|
$
300,210
|
|
$ 2,815
|
$
42,786
|
$
22,056
|
$ 2,435
|
$
69,853
|
Comparable
Total (4)
|
|
$
281,923
|
|
$ 685
|
$
42,786
|
$
19,731
|
$ 2,436
|
$
65,399
|
Pro
Forma Total (5)
|
|
$
261,517
|
|
$ 29
|
$
40,855
|
$
18,228
|
$ 2,436
|
$
61,309
|
(1)
The pro forma operating data includes the operating results for the
Company's hotels assuming they were owned since January 1, 2011.
|
(2)
The non-cash adjustments include expenses incurred by the hotels due to
the straight lining of the rent from ground lease obligations, the
non-cash amortization of favorable lease assets, and the non-cash
amortization of unfavorable contract liabilities.
|
(3)
The hotel reports results on a monthly basis. The amounts presented are
based on the Company's reporting calendar includes the months of
January through May.
|
(4)
The hotel was sold on March 23, 2012 and the comparable total excludes
these hotels. The 2011 operating results presented in the table are for
the ownership period comparable to the Company's 2012 ownership period.
|
(5)
The pro forms total excludes the Frenchman's Reef & Morning Star
Marriott Beach Resort and the three hotels sold on March 23, 2012.
|
|