|
BETHESDA, Md., May 10, 2013 -- DiamondRock Hospitality
Company (the "Company") (NYSE: DRH), a lodging-focused real estate
investment trust that owns a portfolio of 27 premium hotels in the United States, today announced results
of operations for the quarter ended March 31,
2013.
First Quarter Highlights
- RevPAR :
The Company's RevPAR was $119.40, an
increase of 2.0% from 2012. Excluding the Company's New York City hotels under renovation, the
Company's RevPAR increased 5.6% from 2012.
- Hotel Adjusted EBITDA Margin
: The Company's Hotel
Adjusted EBITDA margin was 20.98%, a decrease of 38 basis points from
2012. Excluding the Company's New
York City hotels under renovation, the Company's Hotel Adjusted
EBITDA margin was 22.98%, an increase of 93 basis points from 2012.
- Adjusted EBITDA :
The Company's Adjusted EBITDA was $34.3
million.
- Adjusted FFO :
The Company's Adjusted FFO was $26.8 million
and Adjusted FFO per diluted share was $0.14.
- Hotel Financings :
The Company raised $102 million through
two separate secured financings during the first quarter.
- Allerton Settlement :
The Company closed on the settlement of the bankruptcy and related
litigation involving its senior mortgage loan secured by the Allerton
Hotel, receiving a $5.0 million
principal payment and a new $66.0 million
mortgage loan.
- Chief Operating Officer :
On April 1, 2013, Robert Tanenbaum joined the Company as Chief
Operating Officer and Executive Vice President, Asset Management.
- Dividends :
The Company declared a quarterly dividend of $0.085
per share during the first quarter.
Mark W. Brugger,
President and Chief Executive Officer of DiamondRock Hospitality
Company, stated, "Our first quarter operating results were in
line with our expectations as lodging fundamentals continue to be very
solid. We experienced growth in RevPAR, Adjusted EBITDA and Adjusted
FFO despite our operating results being impacted by more than 24,000
displaced rooms at our three New York City
hotels under renovation. We also continued to strengthen our balance
sheet during the quarter by entering into two attractive loans.
DiamondRock is progressing well on the strategic initiatives we
outlined in March to position the Company for future growth through
value-creating capital investments and further balance sheet
enhancements."
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."
For the quarter ended March
31, 2013, the Company reported the following:
|
First Quarter
|
|
|
2013
|
|
2012 Pro Forma1
|
Change
|
|
ADR
|
$169.15
|
|
$162.67
|
4.0%
|
|
Occupancy
|
70.6%
|
|
72.0%
|
(1.4)
percentage points
|
|
RevPAR
|
$119.40
|
|
$117.09
|
2.0%
|
|
Total
Revenue
|
$181.3
million
|
|
$167.0
million
|
8.5%
|
|
Hotel
Adjusted EBITDA Margin
|
20.98%
|
|
21.36%
|
(38)
basis points
|
|
Adjusted
EBITDA
|
$34.3
million
|
|
$31.4
million
|
9.0%
|
|
Adjusted
FFO
|
$26.8
million
|
|
$25.5
million
|
4.9%
|
|
Adjusted
FFO per diluted share
|
$0.14
|
|
$0.15
|
($0.01)
|
|
Net
(Loss) Income
|
($4.1
million)
|
|
$8.9
million
|
($13.0
million)
|
|
(Loss)
Income per diluted share
|
($0.02)
|
|
$0.05
|
($0.07)
|
|
Diluted
Weighted Average Shares
|
195.3
million
|
|
168.2
million
|
27.1
million shares
|
|
|
|
|
|
|
1 Pro
forma to (a) include the operating results of the Company's
Marriott-managed hotels from January 1, 2012 to March 23, 2012 and all
other hotels from January 1, 2012 to March 31, 2012, (b) assume all of
the Company's hotels were owned as of January 1, 2012, and (c) exclude
the operating results of the hotels sold during 2012.
|
The Company's operating results for the
quarter ended March 31, 2013 were
significantly impacted by its three hotels in New
York City under renovation, the Lexington Hotel New York,
Courtyard Manhattan Midtown East and Courtyard Fifth Avenue. The
following are selected operating results for the Company excluding
these three hotels:
|
2013
|
|
2012 Pro Forma
|
Change
|
|
ADR
|
$166.76
|
|
$160.84
|
3.7%
|
|
Occupancy
|
71.4%
|
|
70.1%
|
1.3
percentage points
|
|
RevPAR
|
$119.08
|
|
$112.78
|
5.6%
|
|
Total
Revenue
|
$167.3
million
|
|
$149.7
million
|
11.8%
|
|
Hotel
Adjusted EBITDA Margin
|
22.98%
|
|
22.05%
|
93
basis points
|
|
|
|
|
|
The Company also recorded a severance charge
of approximately $3.1 million during the
quarter in connection with the retirement of John
L. Williams.
Capital Expenditures
As previously announced, the Company plans
to invest approximately $140 million for
capital improvements in 2013 and early 2014. As of March 31, 2013, t he
Company has spent approximately $13.9 million
toward capital improvements at its hotels. The
most significant capital projects are as follows:
- Lexington Hotel New York :
In connection with
executing the rebranding strategy at the Lexington Hotel, the Company
is continuing the comprehensive renovation of the hotel, including the
lobby, corridors, guest rooms and guest bathrooms. The estimated
renovation cost is expected to be approximately $45
million and be substantially complete during the third quarter
of 2013.
- Manhattan Courtyards :
The
Company is continuing the $12.0 million
renovation of the guest rooms and guest bathrooms at the Courtyard
Manhattan/Midtown East and Courtyard
Manhattan/Fifth Avenue. The renovation scope at the
Courtyard Midtown East also includes the public space and the addition
of five new guest rooms. The renovations are on time and on budget and
will be substantially complete during the second quarter of 2013.
- Westin Washington D.C. :
The
Company expects to commence a comprehensive $16.0
million renovation during the fourth quarter of 2013 to
reposition the hotel to capture higher-rated business, leisure and
group customers. The renovation scope will enhance every
aspect of the guest experience, including the guest rooms, corridors,
meeting space and the lobby.
- Westin San Diego :
The Company expects to
commence a comprehensive $14.0 million
renovation beginning in the fourth quarter 2013 of the guestrooms,
corridors, lobby, public areas, and meeting space at the hotel.
- Hilton Minneapolis :
The Company
expects to undertake a $13.0 million
renovation of the guest rooms, guest bathrooms and corridors at the
hotel beginning in late 2013.
- Hilton Boston Downtown :
The Company expects to
undertake a $7.0 million renovation of
the guest rooms, corridors, public areas, and meeting space at the
hotel in early 2014.
- Hilton
Burlington :
The
Company expects to undertake a $6.0 million
renovation of the corridors and guest rooms at the hotel in early 2014.
The Company continues to expect renovation
disruption of $10 to $12 million of
Hotel Adjusted EBITDA during the year ended December
31, 2013, which has been factored into its outlook for 2013
detailed below.
Reporting Calendar Change
Effective January 1,
2013, the Company reports its quarterly results of operations on
a calendar cycle. Historically, the Company reported its quarterly
results of operations based on the fiscal calendar used by Marriott
International. Since the Company is not changing its fiscal year, its
2012 financial information will not be restated in its quarterly
filings with the U.S. Securities and Exchange Commission. The following
table highlights the periods presented in the Company's 2012 and 2013
reporting calendars.
|
Quarter
|
2012 Calendar (as previously reported)
|
2013 Calendar
|
|
1st
|
Marriott
|
January
1 – March 23
|
All
|
January
1 – March 31
|
|
Non-Marriott
|
January
1 – February 29
|
|
|
|
2nd
|
Marriott
|
March
24 – June 15
|
All
|
April
1 – June 30
|
|
Non-Marriott
|
March
1 – May 31
|
|
|
|
3rd
|
Marriott
|
June
16 – September 7
|
All
|
July
1 – September 30
|
|
Non-Marriott
|
June
1 – August 31
|
|
|
|
4th
|
Marriott
|
September
8 – December 31
|
All
|
October
1 – December 31
|
|
Non-Marriott
|
September
1 – December 31
|
|
|
The Company cannot fully restate its 2012
operating results because Marriott did not provide 2012 operating
results on a daily basis. Hotel operating results incorporated into the
Company's financial statements are prepared by its hotel managers. The
unavailability of 2012 operating results on a calendar quarter basis
for all of the Company's hotels prevented the restatement of the
Company's 2012 quarterly financial statements. Instead, in comparing
2013 quarterly results to 2012 results, the Company will (i) use the
non-Marriott 2012 results on a calendar quarter basis and (ii) amend
the previously reported Marriott 2012 quarterly results as follows:
- The first quarter of 2012 includes
Marriott operating results from January 1 to
March 23.
- The second quarter of 2012 includes
Marriott operating results from March 24 to
June 15.
- The third quarter of 2012 includes
Marriott operating results from June 16 to
October 5.
- The fourth quarter of 2012 includes the
Marriott operating results from October 6 to
December 31.
The following table reallocates selected
2012 quarterly pro forma operating information as described above into
the 2013 reporting calendar.
|
Quarter 1, 2012
|
Quarter 2, 2012
|
Quarter 3, 2012
|
Quarter 4, 2012
|
|
RevPAR
|
$
117.09
|
$
146.48
|
$
139.56
|
$
133.36
|
|
Revenues
(in thousands)
|
$
167,026
|
$
210,809
|
$
228,371
|
$
196,005
|
|
Hotel
Adjusted EBITDA (in thousands)
|
$
35,685
|
$
64,564
|
$
63,776
|
$
54,085
|
|
% of Full Year
|
16.4%
|
29.6%
|
29.2%
|
24.8%
|
|
Hotel
Adjusted EBITDA Margin
|
21.36%
|
30.63%
|
27.93%
|
27.59%
|
|
Available
Rooms
|
1,004,405
|
1,010,443
|
1,184,252
|
1,034,027
|
Balance Sheet
As of March 31, 2013,
the Company had $77.4 million of
unrestricted cash on hand and approximately $1.1
billion of total debt, which consists of property-specific
mortgage debt and $10.0 million
outstanding on the Company's senior unsecured credit facility.
Subsequent to the end of the quarter, the Company repaid the $10.0 million outstanding on the credit
facility.
Hotel Financings
In March 2013,
the Company raised $102.0 million
through two separate secured, non-recourse financings with different
lenders on attractive terms. The financings include a $31 million mortgage loan secured by The Lodge
at Sonoma Renaissance Resort & Spa with a term of ten years and a
fixed interest rate of 3.96% and a $71 million
mortgage loan secured by the Westin San Diego with a term of ten years
and a fixed interest rate of 3.94%. Principal
repayments on each loan are based on a 30-year amortization schedule.
Dividends
The Company's Board of Directors declared a
quarterly dividend of $0.085 per share
to stockholders of record as of March 28, 2013,
representing a 6% increase over 2012. The dividend was
paid on April 12, 2013.
Outlook and Guidance
The Company is providing annual guidance for
2013, 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 U.S. Securities and
Exchange Commission. The Company's 2013 RevPAR guidance assumes all of
the Company's 27 hotels were owned since January
1, 2012.
The Company is maintaining its 2013
guidance, which was previously provided in connection with the
reporting of its 2012 results in February 2013.
The Company continues to expect the full year 2013 results
to be as follows:
|
Metric
|
Pre-Renovation Guidance
|
Renovation Disruption
|
2013 Guidance
|
|
Pro
Forma RevPAR Growth
|
4
percent to 6 percent
|
3
percent
|
1
percent to 3 percent
|
|
Adjusted
EBITDA
|
$207
million to $215 million
|
$10
million to $12 million
|
$195
million to $205 million
|
|
Adjusted
FFO
|
$146
million to $152 million
|
$7
million to $8 million
|
$138
million to $145 million
|
|
Adjusted
FFO per share
(based
on 195.9 million shares)
|
$0.75
to $0.78
|
$0.04
to $0.05
|
$0.70
to $0.74
|
Earnings Call
The Company will host a conference call to
discuss its first quarter results on Friday,
May 10, 2013, at 11:00 a.m. Eastern Time
(ET). To participate in the live call, investors are
invited to dial 800-901-5241
(for
domestic callers) or 617-786-2963
(for international callers).
The participant passcode is 97572145
. A live webcast of the call will
be available via the investor relations section of DiamondRock
Hospitality Company's website at www.drhc.com
or www.earnings.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 a
leading portfolio of geographically diversified hotels concentrated in
top gateway markets and destination resort locations. The
Company owns 27 premium quality hotels with over 11,500 rooms. The
Company has strategically positioned its hotels to generally be
operated under the leading global brands such as Hilton, Marriott, and
Westin. For further information on the Company and its portfolio,
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
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.
|
DIAMONDROCK HOSPITALITY COMPANY
CONSOLIDATED BALANCE SHEETS
As of March 31, 2013 and December 31, 20 12
(in
thousands, except share and per share amounts)
|
|
|
|
|
|
March 31, 2013
|
|
December 31, 2012
|
|
(unaudited)
|
|
|
|
ASSETS
|
|
|
|
|
Property and equipment,
at cost
|
$
3,153,041
|
$
3,131,175
|
|
Less: accumulated
depreciation
|
(546,390)
|
|
(519,721)
|
|
2,606,651
|
|
2,611,454
|
|
Deferred financing
costs, net
|
9,481
|
|
9,724
|
|
Restricted cash
|
90,107
|
|
76,131
|
|
Due from hotel managers
|
71,208
|
|
68,532
|
|
Note receivable
|
49,495
|
|
53,792
|
|
Favorable lease assets,
net
|
40,711
|
|
40,972
|
|
Prepaid and other assets
(1)
|
71,131
|
|
73,814
|
|
Cash and cash equivalents
|
77,375
|
|
9,623
|
|
Total assets
|
$
3,016,159
|
|
$
|
2,944,042
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
Liabilities:
|
|
|
|
|
Mortgage debt
|
$
|
1,067,661
|
$968,731
|
|
Senior unsecured credit
facility
|
10,000
|
|
20,000
|
|
Total debt
|
1,077,661
|
|
988,731
|
|
|
|
|
|
Deferred income related
to key money, net
|
24,097
|
|
24,362
|
|
Unfavorable contract
liabilities, net
|
79,573
|
|
80,043
|
|
Due to hotel managers
|
50,549
|
|
51,003
|
|
Dividends declared and
unpaid
|
16,862
|
|
15,911
|
|
Accounts payable and
accrued expenses (2)
|
92,876
|
|
88,879
|
|
Total other liabilities
|
263,957
|
|
260,198
|
|
Stockholders' Equity:
|
|
|
|
|
Preferred stock, $0.01
par value; 10,000,000 shares authorized; no shares issued and
outstanding
|
—
|
|
—
|
|
Common stock, $0.01 par
value; 400,000,000 shares authorized; 195,419,755 and 195,145,707
shares issued and outstanding at March 31, 2013 and December 31, 2012,
respectively
|
1,954
|
|
1,951
|
|
Additional paid-in
capital
|
1,976,473
|
|
1,976,200
|
|
Accumulated deficit
|
(303,886)
|
|
(283,038)
|
|
Total stockholders'
equity
|
1,674,541
|
|
1,695,113
|
|
Total liabilities and
stockholders' equity
|
$
|
3,016,159
|
|
$
|
2,944,042
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Includes
$39.4 million of deferred tax assets, $21.9 million for the Hilton
Garden Inn Times Square purchase deposit, $4.3 million of prepaid
expenses and $5.5 million of other assets.
|
|
|
|
|
|
|
|
|
|
|
|
|
(2) Includes
$54.6 million of deferred ground rent, $11.4 million of deferred tax
liabilities, $10.9 million of accrued capital expenditures, $9.2
million of accrued property taxes and $6.8 million of other accrued
liabilities.
|
|
DIAMONDROCK
HOSPITALITY COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Fiscal Quarters Ended March 31, 2013 and
March 23, 2012
(in
thousands, except per share amounts)
|
|
|
|
Fiscal Quarter Ended
|
|
|
|
|
|
March 31, 2013
|
|
March 23, 2012
|
|
(Unaudited)
|
|
(Unaudited)
|
|
Revenues:
|
|
|
|
|
Rooms
|
$
|
124,286
|
|
|
$
|
81,493
|
|
|
Food and beverage
|
45,277
|
|
|
30,211
|
|
|
Other
|
11,740
|
|
|
6,719
|
|
|
Total revenues
|
181,303
|
|
|
118,423
|
|
|
Operating Expenses:
|
|
|
|
|
Rooms
|
36,343
|
|
|
24,354
|
|
|
Food and beverage
|
33,805
|
|
|
23,304
|
|
|
Management fees
|
4,880
|
|
|
3,067
|
|
|
Other hotel expenses
|
69,567
|
|
|
47,785
|
|
|
Depreciation and amortization
|
26,834
|
|
|
20,061
|
|
|
Corporate expenses
|
7,845
|
|
|
4,516
|
|
|
Total operating expenses
|
179,274
|
|
|
123,087
|
|
|
Operating profit (loss)
|
2,029
|
|
|
(4,664)
|
|
|
Other Expenses (Income):
|
|
|
|
|
Interest income
|
(1,285)
|
|
|
(63)
|
|
|
Interest expense
|
13,583
|
|
|
11,468
|
|
|
Gain on early extinguishment of debt
|
—
|
|
|
(144)
|
|
|
Total other expenses
|
12,298
|
|
|
11,261
|
|
|
Loss from continuing operations before income taxes
|
(10,269)
|
|
|
(15,925)
|
|
|
Income tax benefit
|
6,143
|
|
|
5,817
|
|
|
Loss from continuing operations
|
(4,126)
|
|
|
(10,108)
|
|
|
Income from discontinued operations, net of income
taxes
|
—
|
|
|
12,723
|
|
|
Net (loss) income
|
$
|
(4,126)
|
|
|
$
|
2,615
|
|
|
(Loss) earnings per share:
|
|
|
|
|
Continuing operations
|
$
|
(0.02)
|
|
|
$
|
(0.06)
|
|
|
Discontinued operations
|
—
|
|
|
0.08
|
|
|
Basic and diluted (loss) earnings per share
|
$
|
(0.02)
|
|
|
$
|
0.02
|
|
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 EBITDA and FFO 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 (loss), 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 the straight line
recognition of rent from our ground lease obligations and the non-cash
amortization of our favorable lease assets.
- Non-Cash Amortization of Favorable and Unfavorable
Contracts : We exclude the non-cash amortization of
the favorable management contract assets recorded in conjunction with
our acquisitions of the Westin Washington D.C. City Center, Westin San
Diego, and Hilton Burlington and 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
favorable and unfavorable contracts 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 2012, due to the uncertainty of the timing of the
bankruptcy resolution, we excluded both cash interest payments received
and the legal costs incurred as a result of the bankruptcy proceedings
from our calculation of Adjusted EBITDA and Adjusted FFO. Due
to the settlement of the bankruptcy proceedings and amended and
restated loan, we commenced recognizing interest income in 2013, which
includes the amortization of the difference between the carrying basis
of the old loan and face value of the new loan. Cash payments received
during 2010 and 2011 that were included in Adjusted EBITDA and Adjusted
FFO and reduced the carrying basis of the loan will be now be deducted
from Adjusted EBITDA and Adjusted FFO on a straight-line basis over the
anticipated five-year term of the new loan.
- 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
2013, we exclude the severance costs associated with the retirement of
our Chief Operating Officer because these costs do not reflect the
underlying performance of the Company.
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 table is a reconciliation of our U.S. GAAP
net loss to EBITDA and Adjusted EBITDA (in thousands):
|
Fiscal Quarter Ended
|
|
|
March 31, 2013
|
|
March 23, 2012 Pro Forma (1)
|
|
March 23, 2012
As Reported (2)
|
|
|
|
|
|
|
Net (loss) income
|
$
|
(4,126)
|
|
|
$
|
8,901
|
|
|
$
|
2,615
|
|
|
|
Interest expense (3)
|
13,583
|
|
|
11,466
|
|
|
13,765
|
|
|
|
Income tax benefit (4)
|
(6,143)
|
|
|
(5,588)
|
|
|
(5,588)
|
|
|
|
Real estate related depreciation and amortization
(5)
|
26,834
|
|
|
24,464
|
|
|
20,518
|
|
|
|
EBITDA
|
30,148
|
|
|
39,243
|
|
|
31,310
|
|
|
|
Non-cash ground rent
|
1,693
|
|
|
1,575
|
|
|
1,531
|
|
|
|
Non-cash amortization of favorable and unfavorable
contracts, net
|
(354)
|
|
|
(317)
|
|
|
(432)
|
|
|
|
Gain on sale of hotel properties
|
—
|
|
|
(10,017)
|
|
|
(10,017)
|
|
|
|
Gain on early extinguishment of debt
|
—
|
|
|
(144)
|
|
|
(144)
|
|
|
|
Acquisition costs
|
9
|
|
|
33
|
|
|
33
|
|
|
|
Reversal of previously recognized Allerton income
|
(291)
|
|
|
—
|
|
|
—
|
|
|
|
Allerton loan legal fees
|
—
|
|
|
322
|
|
|
322
|
|
|
|
Franchise termination fee
|
—
|
|
|
750
|
|
|
750
|
|
|
|
Severance costs (6)
|
3,065
|
|
|
—
|
|
|
—
|
|
|
|
Adjusted EBITDA
|
$
|
34,270
|
|
|
$
|
31,445
|
|
|
$
|
23,353
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Pro
forma to (a) include the operating results of the Company's
Marriott-managed hotels from January 1, 2012 to March 23, 2012 and all
other hotels from January 1, 2012 to March 31, 2012, (b) assume all of
the Company's 27 hotels were owned as of January 1, 2012, and (c)
exclude the operating results of the hotels sold during 2012.
|
|
|
(2) As
reported in the Company's Quarterly Report on Form 10-Q filed with the
SEC on April 30, 2012.
|
|
|
(3) Amounts
include interest expense included in discontinued operations as
follows: $2.3 million in the fiscal quarter ended March 23, 2012 As
Reported.
|
|
|
(4) Amounts
include income tax expense included in discontinued operations as
follows: $0.2 million in the fiscal quarter ended March 23, 2012 As
Reported.
|
|
|
(5) Amounts
include depreciation expense included in discontinued operations as
follows: $0.5 million in the fiscal
quarter ended March 23, 2012 As Reported.
|
|
|
(6) Severance
costs recognized in connection with the retirement of John L. Williams
as Chief Operating Officer.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Guidance
|
|
Pre-Renovation 2013
|
|
2013
|
|
Low End
|
|
High End
|
|
Low End
|
|
High End
|
|
Net income (1)
|
$
|
33,358
|
|
|
$
|
40,358
|
|
|
$
|
25,358
|
|
|
$
|
33,358
|
|
|
Interest expense
|
59,000
|
|
|
58,400
|
|
|
59,000
|
|
|
58,400
|
|
|
Income tax expense (benefit)
|
1,600
|
|
|
4,200
|
|
|
(2,400)
|
|
|
1,200
|
|
|
Real estate related depreciation and amortization
|
107,000
|
|
|
106,000
|
|
|
107,000
|
|
|
106,000
|
|
|
EBITDA
|
200,958
|
|
|
208,958
|
|
|
188,958
|
|
|
198,958
|
|
|
Non-cash ground rent
|
6,400
|
|
|
6,400
|
|
|
6,400
|
|
|
6,400
|
|
|
Non-cash amortization of favorable and unfavorable
contracts, net
|
(1,400)
|
|
|
(1,400)
|
|
|
(1,400)
|
|
|
(1,400)
|
|
|
Key money write-off
|
(860)
|
|
|
(860)
|
|
|
(860)
|
|
|
(860)
|
|
|
Reversal of previously recognized Allerton income
|
(1,163)
|
|
|
(1,163)
|
|
|
(1,163)
|
|
|
(1,163)
|
|
|
Severence costs (2)
|
3,065
|
|
|
3,065
|
|
|
3,065
|
|
|
3,065
|
|
|
Adjusted EBITDA
|
$
|
207,000
|
|
|
$
|
215,000
|
|
|
$
|
195,000
|
|
|
$
|
205,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Net income includes approximately $6.1 million of
interest income related to the Allerton loan.
|
|
(2) Severance
costs recognized in connection with the retirement of John L. Williams
as Chief Operating Officer.
|
The following tables are reconciliations of our U.S.
GAAP net income (loss) to FFO and Adjusted FFO (in thousands):
|
Fiscal Quarter Ended
|
|
|
March 31, 2013
|
|
March 23, 2012 Pro Forma (1)
|
|
March 23, 2012
As Reported (2)
|
|
|
|
|
|
|
Net (loss)
|
$
|
(4,126)
|
|
|
$
|
8,901
|
|
|
$
|
2,615
|
|
|
|
Real estate related depreciation and amortization
(3)
|
26,834
|
|
|
24,464
|
|
|
20,518
|
|
|
|
Gain on sale of hotel properties
|
—
|
|
|
(10,017)
|
|
|
(10,017)
|
|
|
|
FFO
|
22,708
|
|
|
23,348
|
|
|
13,116
|
|
|
|
Non-cash ground rent
|
1,693
|
|
|
1,575
|
|
|
1,531
|
|
|
|
Non-cash amortization of unfavorable contract
liabilities
|
(354)
|
|
|
(317)
|
|
|
(432)
|
|
|
|
Gain on early extinguishment of debt
|
—
|
|
|
(144)
|
|
|
(144)
|
|
|
|
Acquisition costs
|
9
|
|
|
33
|
|
|
33
|
|
|
|
Reversal of previously recognized Allerton income
|
(291)
|
|
|
—
|
|
|
—
|
|
|
|
Allerton loan legal fees
|
—
|
|
|
322
|
|
|
322
|
|
|
|
Franchise termination fee
|
—
|
|
|
750
|
|
|
750
|
|
|
|
Severance costs (4)
|
3,065
|
|
|
—
|
|
|
—
|
|
|
|
Fair value adjustments to debt instruments
|
(65)
|
|
|
(47)
|
|
|
(47)
|
|
|
|
Adjusted FFO
|
$
|
26,765
|
|
|
$
|
25,520
|
|
|
$
|
15,129
|
|
|
|
Adjusted FFO per share
|
$
|
0.14
|
|
|
$
|
0.15
|
|
|
$
|
0.09
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Pro
forma to (a) include the operating results of the Company's
Marriott-managed hotels from January 1, 2012 to March 23, 2012 and all
other hotels from January 1, 2012 to March 31, 2012, (b) assume all of
the Company's 27 hotels were owned as of January 1, 2012, and (c)
exclude the operating results of the hotels sold during 2012.
|
|
(2) As
reported in the Company's Quarterly Report on Form 10-Q filed with the
SEC on April 30, 2012.
|
|
(3) Amounts
include depreciation expense included in discontinued operations as
follows: $0.5 million in the fiscal
quarter ended March 23, 2012 As Reported.
|
|
(4) Severance
costs recognized in connection with the retirement of John L. Williams
as Chief Operating Officer.
|
|
Guidance
|
|
Pre-Renovation 2013
|
|
2013
|
|
Low End
|
|
High End
|
|
Low End
|
|
High End
|
|
Net income (1)
|
$
|
33,358
|
|
|
$
|
40,358
|
|
|
$
|
25,358
|
|
|
$
|
33,358
|
|
|
Real estate related depreciation and amortization
|
107,000
|
|
|
106,000
|
|
|
107,000
|
|
|
106,000
|
|
|
FFO
|
140,358
|
|
|
146,358
|
|
|
132,358
|
|
|
139,358
|
|
|
Non-cash ground rent
|
6,400
|
|
|
6,400
|
|
|
6,400
|
|
|
6,400
|
|
|
Non-cash amortization of favorable and unfavorable
contracts, net
|
(1,400)
|
|
|
(1,400)
|
|
|
(1,400)
|
|
|
(1,400)
|
|
|
Key money write-off
|
(860)
|
|
|
(860)
|
|
|
(860)
|
|
|
(860)
|
|
|
Reveral of previously recognized Allerton income
|
(1,163)
|
|
|
(1,163)
|
|
|
(1,163)
|
|
|
(1,163)
|
|
|
Severence costs (2)
|
3,065
|
|
|
3,065
|
|
|
3,065
|
|
|
3,065
|
|
|
Debt premium amortization
|
(400)
|
|
|
(400)
|
|
|
(400)
|
|
|
(400)
|
|
|
Adjusted FFO
|
$
|
146,000
|
|
|
$
|
152,000
|
|
|
$
|
138,000
|
|
|
$
|
145,000
|
|
|
Adjusted FFO per share
|
$
|
0.75
|
|
|
$
|
0.78
|
|
|
$
|
0.70
|
|
|
$
|
0.74
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Net
income includes approximately $6.1 million of interest income related
to the Allerton loan.
|
|
|
(2) Severance
costs recognized in connection with the retirement of John L. Williams
as Chief Operating Officer.
|
|
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.
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
|
|
|
|
|
March 31, 2013
|
|
March 23, 2012
|
|
% Change
|
|
|
Revenues:
|
|
|
|
|
|
|
|
Rooms
|
$
124,286
|
|
$
117,603
|
|
5.7%
|
|
|
Food and beverage
|
45,277
|
|
39,901
|
|
13.5%
|
|
|
Other
|
11,740
|
|
9,522
|
|
23.3%
|
|
|
Total revenues
|
181,303
|
|
167,026
|
|
8.5%
|
|
|
|
|
|
|
|
|
|
Operating Expenses:
|
|
|
|
|
|
|
|
Rooms departmental expenses
|
36,343
|
|
32,802
|
|
10.8%
|
|
|
Food and beverage departmental expenses
|
33,805
|
|
30,039
|
|
12.5%
|
|
|
Other direct departmental
|
5,661
|
|
5,005
|
|
13.1%
|
|
|
General and administrative
|
15,728
|
|
14,623
|
|
7.6%
|
|
|
Utilities
|
7,108
|
|
6,996
|
|
1.6%
|
|
|
Repairs and maintenance
|
9,145
|
|
8,444
|
|
8.3%
|
|
|
Sales and marketing
|
15,702
|
|
15,399
|
|
2.0%
|
|
|
Base management fees
|
4,412
|
|
4,127
|
|
6.9%
|
|
|
Incentive management fees
|
468
|
|
60
|
|
680.0%
|
|
|
Property taxes
|
9,805
|
|
9,271
|
|
5.8%
|
|
|
Ground rent
|
3,770
|
|
3,487
|
|
8.1%
|
|
|
Other fixed expenses
|
2,649
|
|
2,346
|
|
12.9%
|
|
|
Total hotel operating expenses
|
144,596
|
|
132,599
|
|
9.0%
|
|
|
|
|
|
|
|
|
|
Hotel EBITDA
|
36,707
|
|
34,427
|
|
6.6%
|
|
|
Non-cash ground rent
|
1,693
|
|
1,575
|
|
7.5%
|
|
|
Non-cash amortization of
favorable and unfavorable contracts, net
|
(354)
|
|
(317)
|
|
11.7%
|
|
|
Hotel Adjusted EBITDA
|
$
38,046
|
|
$
35,685
|
|
6.6%
|
|
|
|
|
|
|
|
|
|
NOTE:
|
|
|
|
|
|
|
|
|
|
The pro forma operating data above includes the operating results for the Company's portfolio
of 27
hotels owned as of March 31, 2013 assuming they were owned since
January 1, 2012. The fiscal
quarter ended March 23, 2012 includes the operating results of the
Company's Marriott-managed hotels
from January 1, 2012 to March 23, 2012 and all other hotels from
January 1, 2012 to March 31, 2012.
|
|
Market Capitalization as of March 31, 2013
(in thousands, except per share data)
|
|
|
|
|
Enterprise Value
|
|
|
|
|
|
|
Common equity capitalization (at March 31, 2013 closing price of $9.31/share)
|
|
$
1,825,505
|
|
Consolidated debt
|
|
1,077,661
|
|
Cash and cash equivalents
|
|
(77,375)
|
|
|
|
|
Total enterprise value
|
|
$
2,825,791
|
|
|
|
|
|
|
|
Share Reconciliation
|
|
|
|
|
|
|
Common shares outstanding
|
|
195,420
|
|
|
|
|
Unvested restricted stock held by management and
employees
|
|
606
|
|
Share grants under deferred compensation plan held
by directors
|
54
|
|
|
|
|
Combined shares outstanding
|
|
196,080
|
|
Debt Summary as of March 31, 2013
|
|
(dollars in thousands)
|
|
|
|
|
|
|
|
|
|
|
Property
|
|
Interest Rate
|
|
Term
|
|
Outstanding Principal
|
|
Maturity
|
|
|
|
|
|
|
|
|
|
|
Courtyard Manhattan / Midtown East
|
|
8.810%
|
|
Fixed
|
|
$
41,836
|
|
October 2014
|
|
Salt Lake City Marriott Downtown
|
|
5.500%
|
|
Fixed
|
|
28,227
|
|
January 2015
|
|
Courtyard Manhattan / Fifth Avenue
|
|
6.480%
|
|
Fixed
|
|
50,020
|
|
June 2016
|
|
Los Angeles Airport Marriott
|
|
5.300%
|
|
Fixed
|
|
82,600
|
|
July 2015
|
|
Frenchman's Reef Marriott
|
|
5.440%
|
|
Fixed
|
|
58,429
|
|
August 2015
|
|
Renaissance Worthington
|
|
5.400%
|
|
Fixed
|
|
54,471
|
|
July 2015
|
|
Orlando Airport Marriott
|
|
5.680%
|
|
Fixed
|
|
57,375
|
|
January 2016
|
|
Chicago Marriott Downtown
|
|
5.975%
|
|
Fixed
|
|
210,686
|
|
April 2016
|
|
Hilton Minneapolis
|
|
5.464%
|
|
Fixed
|
|
96,544
|
|
May 2021
|
|
JW Marriott Denver Cherry Creek
|
|
6.470%
|
|
Fixed
|
|
40,588
|
|
July 2015
|
|
Lexington Hotel New York
|
|
LIBOR +
3.00
|
|
Variable
|
|
170,368
|
|
March 2015
|
|
Westin Washington D.C. City Center
|
|
3.990%
|
|
Fixed
|
|
73,703
|
|
January 2023
|
|
The Lodge at Sonoma
|
|
3.960%
|
|
Fixed
|
|
31,000
|
|
April 2023
|
|
Westin San Diego
|
|
3.940%
|
|
Fixed
|
|
71,000
|
|
April 2023
|
|
Debt premium (1)
|
|
|
|
|
|
814
|
|
|
|
Total mortgage
debt
|
|
|
|
|
|
1,067,661
|
|
|
|
|
|
|
|
|
|
|
|
|
Senior unsecured credit facility
|
|
LIBOR +
1.90
|
|
Variable
|
|
10,000
|
|
January 2017
|
|
Total debt
|
|
|
|
|
|
$
1,077,661
|
|
|
|
(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 – First Quarter (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ADR
|
|
Occupancy
|
|
RevPAR
|
|
Hotel Adjusted EBITDA Margin
|
|
|
1Q 2013
|
1Q 2012
|
B/(W)
|
|
1Q 2013
|
1Q 2012
|
B/(W)
|
|
1Q 2013
|
1Q 2012
|
B/(W)
|
|
1Q 2013
|
1Q 2012
|
B/(W)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Atlanta Alpharetta
|
|
$
146.57
|
$
144.64
|
1.3%
|
|
73.0%
|
67.2%
|
5.8%
|
|
$
106.94
|
$ 97.23
|
10.0%
|
|
35.25%
|
36.00%
|
-75 bps
|
|
Bethesda Marriott Suites
|
|
$
177.66
|
$
176.34
|
0.7%
|
|
48.7%
|
51.8%
|
(3.1%)
|
|
$ 86.58
|
$ 91.33
|
(5.2%)
|
|
19.07%
|
20.67%
|
-160 bps
|
|
Boston Westin
|
|
$
173.64
|
$
179.89
|
(3.5%)
|
|
63.6%
|
59.9%
|
3.7%
|
|
$
110.40
|
$
107.67
|
2.5%
|
|
6.35%
|
5.44%
|
91 bps
|
|
Hilton Boston Downtown
|
|
$
168.98
|
$
168.66
|
0.2%
|
|
73.2%
|
68.4%
|
4.8%
|
|
$
123.61
|
$
115.40
|
7.1%
|
|
17.18%
|
20.45%
|
-327 bps
|
|
Hilton Burlington
|
|
$
122.20
|
$
119.30
|
2.4%
|
|
62.2%
|
59.8%
|
2.4%
|
|
$ 76.01
|
$ 71.36
|
6.5%
|
|
23.04%
|
14.55%
|
849 bps
|
|
Renaissance Charleston
|
|
$
183.37
|
$
169.41
|
8.2%
|
|
81.0%
|
80.1%
|
0.9%
|
|
$
148.55
|
$
135.77
|
9.4%
|
|
32.63%
|
29.51%
|
312 bps
|
|
Hilton Garden Inn Chelsea
|
|
$
179.34
|
$
163.27
|
9.8%
|
|
96.1%
|
91.2%
|
4.9%
|
|
$
172.38
|
$
148.83
|
15.8%
|
|
33.28%
|
29.30%
|
398 bps
|
|
Chicago Marriott
|
|
$
161.90
|
$
155.86
|
3.9%
|
|
62.7%
|
55.8%
|
6.9%
|
|
$
101.53
|
$ 86.99
|
16.7%
|
|
8.74%
|
(2.52%)
|
1126 bps
|
|
Chicago Conrad
|
|
$
165.03
|
$
162.54
|
1.5%
|
|
71.4%
|
65.1%
|
6.3%
|
|
$
117.80
|
$
105.80
|
11.3%
|
|
(0.17%)
|
(1.88%)
|
171 bps
|
|
Courtyard Denver Downtown
|
|
$
152.88
|
$
146.30
|
4.5%
|
|
79.7%
|
81.7%
|
(2.0%)
|
|
$
121.80
|
$
119.57
|
1.9%
|
|
37.93%
|
40.82%
|
-289 bps
|
|
Courtyard Fifth Avenue
|
|
$
233.46
|
$
217.61
|
7.3%
|
|
64.4%
|
84.1%
|
(19.7%)
|
|
$
150.38
|
$
182.95
|
(17.8%)
|
|
(2.60%)
|
11.08%
|
-1368 bps
|
|
Courtyard Midtown East
|
|
$
223.41
|
$
209.34
|
6.7%
|
|
74.2%
|
79.0%
|
(4.8%)
|
|
$
165.72
|
$
165.45
|
0.2%
|
|
10.81%
|
16.28%
|
-547 bps
|
|
Frenchman's Reef
|
|
$
310.60
|
$
289.27
|
7.4%
|
|
90.5%
|
85.2%
|
5.3%
|
|
$
280.98
|
$
246.37
|
14.0%
|
|
32.38%
|
32.80%
|
-42 bps
|
|
JW Marriott Denver Cherry Creek
|
|
$
225.41
|
$
214.53
|
5.1%
|
|
76.1%
|
69.0%
|
7.1%
|
|
$
171.59
|
$
148.02
|
15.9%
|
|
25.46%
|
23.03%
|
243 bps
|
|
Los Angeles Airport
|
|
$
114.01
|
$
108.18
|
5.4%
|
|
82.0%
|
89.7%
|
(7.7%)
|
|
$ 93.50
|
$ 97.06
|
(3.7%)
|
|
17.86%
|
20.12%
|
-226 bps
|
|
Hilton Minneapolis
|
|
$
116.42
|
$
120.40
|
(3.3%)
|
|
61.6%
|
61.7%
|
(0.1%)
|
|
$ 71.77
|
$ 74.24
|
(3.3%)
|
|
13.23%
|
11.93%
|
130 bps
|
|
Oak Brook Hills
|
|
$
111.49
|
$
111.40
|
0.1%
|
|
43.9%
|
49.7%
|
(5.8 %)
|
|
$ 48.96
|
$ 55.41
|
(11.6%)
|
|
(13.89%)
|
(3.42%)
|
-1047 bps
|
|
Orlando Airport Marriott
|
|
$
110.48
|
$
115.69
|
(4.5%)
|
|
86.9%
|
83.8%
|
3.1%
|
|
$ 95.96
|
$ 96.99
|
(1.1%)
|
|
29.19%
|
32.58%
|
-339 bps
|
|
Hotel Rex
|
|
$
172.09
|
$
174.97
|
(1.6%)
|
|
77.1%
|
77.7%
|
(0.6%)
|
|
$
132.61
|
$
135.88
|
(2.4%)
|
|
25.11%
|
32.12%
|
-701 bps
|
|
Salt Lake City Marriott
|
|
$
147.41
|
$
139.18
|
5.9%
|
|
67.5%
|
71.2%
|
(3.7%)
|
|
$ 99.57
|
$ 99.13
|
0.4%
|
|
35.30%
|
35.68%
|
-38 bps
|
|
The Lodge at Sonoma
|
|
$
196.72
|
$
182.58
|
7.7%
|
|
63.1%
|
52.2%
|
10.9%
|
|
$
124.08
|
$ 95.25
|
30.3%
|
|
8.63%
|
(3.10%)
|
1173 bps
|
|
Torrance Marriott South Bay
|
|
$
117.38
|
$
110.90
|
5.8%
|
|
75.9%
|
80.8%
|
(4.9%)
|
|
$ 89.10
|
$ 89.61
|
(0.6%)
|
|
23.08%
|
23.64%
|
-56 bps
|
|
Vail Marriott
|
|
$
346.39
|
$
323.15
|
7.2%
|
|
89.3%
|
83.7%
|
5.6%
|
|
$
309.29
|
$
270.54
|
14.3%
|
|
50.06%
|
46.85%
|
321 bps
|
|
Lexington Hotel New York
|
|
$
162.94
|
$
154.04
|
5.8%
|
|
58.7%
|
92.1%
|
(33.4%)
|
|
$ 95.66
|
$
141.86
|
(32.6%)
|
|
(12.91%)
|
16.24%
|
-2915 bps
|
|
Westin San Diego
|
|
$
155.20
|
$
154.27
|
0.6%
|
|
84.6%
|
73.7%
|
10.9%
|
|
$
131.34
|
$
113.64
|
15.6%
|
|
31.92%
|
31.08%
|
84 bps
|
|
Westin Washington D.C. City Center
|
|
$
191.02
|
$
195.26
|
(2.2%)
|
|
70.1%
|
63.5%
|
6.6%
|
|
$
133.95
|
$
124.04
|
8.0%
|
|
28.37%
|
32.17%
|
-380 bps
|
|
Renaissance Worthington
|
|
$
174.11
|
$
156.09
|
11.5%
|
|
64.7%
|
77.7%
|
(13.0%)
|
|
$
112.71
|
$
121.21
|
(7.0%)
|
|
31.34%
|
33.22%
|
-188 bps
|
|
Total
|
|
$
169.15
|
$
162.67
|
4.0%
|
|
70.6%
|
72.0%
|
(1.4%)
|
|
$
119.40
|
$
117.09
|
2.0%
|
|
20.98%
|
21.36%
|
-38 bps
|
|
Total Excluding NY Renovations (2)
|
|
$
166.76
|
$
160.84
|
3.7%
|
|
71.4%
|
70.1%
|
1.3%
|
|
$
119.08
|
$
112.78
|
5.6%
|
|
22.98%
|
22.05%
|
93 bps
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) The
pro forma operating data includes the
operating results for the Company's 27 hotels assuming they were owned
since January 1, 2012.
|
|
(2) Excludes
the three hotels in New York City currently under renovation; the
Lexington Hotel New York, Courtyard Manhattan Midtown East and
Courtyard Fifth Avenue.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pro Forma Hotel Adjusted EBITDA Reconciliation
|
|
|
|
|
|
First Quarter 2013 (1)
|
|
|
|
|
|
Plus:
|
Plus:
|
Plus:
|
Equals:
|
|
|
Total Revenues
|
|
Net Income / (Loss)
|
Depreciation
|
Interest Expense
|
Non-Cash Adjustments
(2)
|
Hotel Adjusted EBITDA
|
|
Atlanta Alpharetta
|
|
$ 4,530
|
|
$ 1,191
|
$ 406
|
$ -
|
$ -
|
$ 1,597
|
|
Bethesda Marriott Suites
|
|
$ 3,046
|
|
$
(1,483)
|
$ 507
|
$ -
|
$ 1,557
|
$ 581
|
|
Boston Westin
|
|
$
13,886
|
|
$
(1,239)
|
$ 2,119
|
$ -
|
$ 2
|
$ 882
|
|
Hilton Boston Downtown
|
|
$ 4,564
|
|
$ (690)
|
$ 1,432
|
$ -
|
$ 42
|
$ 784
|
|
Hilton Burlington
|
|
$ 2,309
|
|
$ (332)
|
$ 841
|
$ -
|
$ 23
|
$ 532
|
|
Renaissance Charleston
|
|
$ 2,764
|
|
$ 546
|
$ 388
|
$ -
|
$ (32)
|
$ 902
|
|
Hilton Garden Inn Chelsea
|
|
$ 2,734
|
|
$ 436
|
$ 474
|
$ -
|
$ -
|
$ 910
|
|
Chicago Marriott
|
|
$
17,422
|
|
$
(4,504)
|
$ 3,239
|
$ 3,185
|
$ (397)
|
$ 1,523
|
|
Chicago Conrad
|
|
$ 4,166
|
|
$ (919)
|
$ 912
|
$ -
|
$ -
|
$ (7)
|
|
Courtyard Denver Downtown
|
|
$ 2,112
|
|
$ 541
|
$ 260
|
$ -
|
$ -
|
$ 801
|
|
Courtyard Fifth Avenue
|
|
$ 2,535
|
|
$
(1,279)
|
$ 314
|
$ 842
|
$ 57
|
$ (66)
|
|
Courtyard Midtown East
|
|
$ 4,764
|
|
$
(1,035)
|
$ 577
|
$ 973
|
$ -
|
$ 515
|
|
Frenchman's Reef
|
|
$
20,471
|
|
$ 4,209
|
$ 1,600
|
$ 819
|
$ -
|
$ 6,628
|
|
JW Marriott Denver Cherry Creek
|
|
$ 4,843
|
|
$ 159
|
$ 479
|
$ 595
|
$ -
|
$ 1,233
|
|
Los Angeles Airport
|
|
$
14,140
|
|
$ 68
|
$ 1,348
|
$ 1,110
|
$ -
|
$ 2,526
|
|
Minneapolis Hilton
|
|
$ 9,498
|
|
$
(1,871)
|
$ 1,936
|
$ 1,342
|
$ (150)
|
$ 1,257
|
|
Oak Brook Hills
|
|
$ 3,478
|
|
$ (854)
|
$ 262
|
$ -
|
$ 109
|
$ (483)
|
|
Orlando Airport Marriott
|
|
$ 6,269
|
|
$ 286
|
$ 725
|
$ 819
|
$ -
|
$ 1,830
|
|
Hotel Rex
|
|
$ 1,334
|
|
$ 103
|
$ 232
|
$ -
|
$ -
|
$ 335
|
|
Salt Lake City Marriott
|
|
$ 6,708
|
|
$ 1,236
|
$ 736
|
$ 396
|
$ -
|
$ 2,368
|
|
The Lodge at Sonoma
|
|
$ 3,836
|
|
$ (71)
|
$ 364
|
$ 38
|
$ -
|
$ 331
|
|
Torrance Marriott South Bay
|
|
$ 5,441
|
|
$ 674
|
$ 582
|
$ -
|
$ -
|
$ 1,256
|
|
Vail Marriott
|
|
$
12,278
|
|
$ 5,550
|
$ 596
|
$ -
|
$ -
|
$ 6,146
|
|
Lexington Hotel
New York
|
|
$ 6,676
|
|
$
(5,737)
|
$ 3,162
|
$ 1,680
|
$ 33
|
$ (862)
|
|
Westin San Diego
|
|
$ 7,315
|
|
$ 1,213
|
$ 1,053
|
$ 23
|
$ 46
|
$ 2,335
|
|
Westin Washington D.C. City Center
|
|
$ 6,144
|
|
$ (669)
|
$ 1,587
|
$ 778
|
$ 47
|
$ 1,743
|
|
Renaissance Worthington
|
|
$ 8,040
|
|
$ 1,068
|
$ 704
|
$ 746
|
$ 2
|
$ 2,520
|
|
Total
|
|
$
181,303
|
|
$
(3,403)
|
$
26,835
|
$
13,346
|
$ 1,339
|
$
38,046
|
|
Total Excluding NY Renovations (3)
|
|
$
167,328
|
|
$ 4,648
|
$
22,782
|
$ 9,851
|
$ 1,249
|
$
38,459
|
|
|
|
|
|
|
|
|
|
|
(1) The
pro forma operating data includes the
operating results for the Company's 27 hotels assuming they were owned
since January 1, 2012.
|
|
(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) Excludes
the three hotels in New York City currently under renovation; the
Lexington Hotel New York, Courtyard Manhattan Midtown East and
Courtyard Fifth Avenue.
|
|
|
Pro Forma Hotel Adjusted EBITDA Reconciliation
|
|
|
First Quarter 2012 (1)
|
|
|
|
|
|
Plus:
|
Plus:
|
Plus:
|
Equals:
|
|
|
Total Revenues
|
|
Net Income / (Loss)
|
Depreciation
|
Interest Expense
|
Non-Cash Adjustments
(2)
|
Hotel Adjusted EBITDA
|
|
Atlanta Alpharetta
|
|
$ 3,847
|
|
$ 1,092
|
$ 293
|
$ -
|
$ -
|
$ 1,385
|
|
Bethesda Marriott Suites
|
|
$ 2,946
|
|
$
(1,310)
|
$ 479
|
$ -
|
$ 1,440
|
$ 609
|
|
Boston Westin
|
|
$
13,330
|
|
$
(1,515)
|
$ 2,238
|
$ -
|
$ 2
|
$ 725
|
|
Hilton Boston Downtown
|
|
$ 4,366
|
|
$ (458)
|
$ 1,309
|
$ -
|
$ 42
|
$ 893
|
|
Hilton Burlington
|
|
$ 2,151
|
|
$ (483)
|
$ 773
|
$ -
|
$ 23
|
$ 313
|
|
Renaissance Charleston
|
|
$ 2,325
|
|
$ 368
|
$ 347
|
$ -
|
$ (29)
|
$ 686
|
|
Hilton Garden Inn Chelsea
|
|
$ 2,389
|
|
$ 263
|
$ 437
|
$ -
|
$ -
|
$ 700
|
|
Chicago Marriott
|
|
$
13,039
|
|
$
(5,587)
|
$ 2,652
|
$ 2,974
|
$ (367)
|
$ (328)
|
|
Chicago Conrad
|
|
$ 3,781
|
|
$ (837)
|
$ 766
|
$ -
|
$ -
|
$ (71)
|
|
Courtyard Denver Downtown
|
|
$ 2,092
|
|
$ 443
|
$ 236
|
$ 175
|
$ -
|
$ 854
|
|
Courtyard Fifth Avenue
|
|
$ 2,853
|
|
$ (941)
|
$ 425
|
$ 784
|
$ 48
|
$ 316
|
|
Courtyard Midtown East
|
|
$ 4,534
|
|
$ (702)
|
$ 546
|
$ 894
|
$ -
|
$ 738
|
|
Frenchman's Reef
|
|
$
17,154
|
|
$ 3,404
|
$ 1,440
|
$ 783
|
$ -
|
$ 5,627
|
|
JW Marriott Denver Cherry Creek
|
|
$ 4,225
|
|
$ 6
|
$ 419
|
$ 548
|
$ -
|
$ 973
|
|
Los Angeles Airport
|
|
$
13,103
|
|
$ 266
|
$ 1,347
|
$ 1,023
|
$ -
|
$ 2,636
|
|
Minneapolis Hilton
|
|
$ 9,269
|
|
$
(1,736)
|
$ 1,741
|
$ 1,262
|
$ (161)
|
$ 1,106
|
|
Oak Brook Hills
|
|
$ 3,861
|
|
$ (992)
|
$ 735
|
$ -
|
$ 125
|
$ (132)
|
|
Orlando Airport Marriott
|
|
$ 5,608
|
|
$ 361
|
$ 700
|
$ 766
|
$ -
|
$ 1,827
|
|
Hotel Rex
|
|
$ 1,342
|
|
$ 225
|
$ 206
|
$ -
|
$ -
|
$ 431
|
|
Salt Lake City Marriott
|
|
$ 6,175
|
|
$ 1,183
|
$ 635
|
$ 385
|
$ -
|
$ 2,203
|
|
The Lodge at Sonoma
|
|
$ 2,773
|
|
$ (423)
|
$ 337
|
$ -
|
$ -
|
$ (86)
|
|
Torrance Marriott South Bay
|
|
$ 4,983
|
|
$ 443
|
$ 735
|
$ -
|
$ -
|
$ 1,178
|
|
Vail Marriott
|
|
$
10,819
|
|
$ 4,535
|
$ 534
|
$ -
|
$ -
|
$ 5,069
|
|
Lexington Hotel New York
|
|
$ 9,931
|
|
$
(1,147)
|
$ 2,361
|
$ 363
|
$ 36
|
$ 1,613
|
|
Westin San Diego
|
|
$ 6,380
|
|
$ 963
|
$ 973
|
$ -
|
$ 47
|
$ 1,983
|
|
Westin Washington D.C. City Center
|
|
$ 5,760
|
|
$ 665
|
$ 1,142
|
$ -
|
$ 46
|
$ 1,853
|
|
Renaissance Worthington
|
|
$ 7,990
|
|
$ 1,290
|
$ 658
|
$ 700
|
$ 6
|
$ 2,654
|
|
Total
|
|
$
167,026
|
|
$ (624)
|
$
24,464
|
$
10,657
|
$ 1,258
|
$
35,685
|
|
Total Excluding NY Renovations (3)
|
|
$
149,708
|
|
$ 2,166
|
$
21,132
|
$ 8,616
|
$ 1,174
|
$
33,018
|
|
|
|
|
|
|
|
|
|
|
(1) The
pro forma operating data includes the operating results for the
Company's 27 hotels assuming they were owned as of January 1, 2012.
|
|
(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) Excludes
the three hotels in New York City currently under renovation; the
Lexington Hotel New York, Courtyard Manhattan Midtown East and
Courtyard Fifth Avenue.
|
|
