|
BETHESDA, Md., April 30, 2012 -- DiamondRock Hospitality
Company (the "Company") (NYSE: DRH) today announced results of
operations for its first fiscal quarter ended March
23, 2012 and raised 2012 guidance to reflect the improving
outlook for its portfolio and the outperformance of guidance and
consensus. The Company is a lodging-focused real estate investment
trust that owns a portfolio of twenty-three premium hotels in North America.
First Quarter 2012 Highlights
- Pro Forma RevPAR :
The Company's Pro Forma RevPAR was $104.50,
an increase of 8.8% from the comparable period in 2011.
- Pro Forma Hotel Adjusted EBITDA Margin : The
Company's Pro Forma Hotel Adjusted EBITDA margin was 17.15%, an
increase of 119 basis points from the comparable period in 2011.
- Adjusted EBITDA : The Company's
Adjusted EBITDA was $23.4 million, an
increase of 24% from the comparable period of 2011.
- Adjusted FFO : The Company's Adjusted FFO
was $15.1 million and Adjusted FFO per
diluted share was $0.09.
- Three-Hotel Portfolio Sale : On March 23, 2012, the Company completed the sale
of a portfolio of three non-core hotels for total proceeds of
approximately $272.5 million, which
consisted of the contractual sales price of $262.5
million and approximately $10 million
of hotel working capital and restricted cash, net of closing costs. The
Company recorded a gain on the transaction of approximately $10 million, which has been excluded from the
Company's Adjusted EBITDA.
- Lexington Mortgage Debt : The Company closed
on a $170.4 million floating-rate loan
secured by a mortgage on the Lexington Hotel New York.
- Prepayment of Courtyard Denver Mortgage :
The Company prepaid $27 million
of mortgage debt secured by the Courtyard Denver Downtown prior to its
scheduled maturity in August 2012.
- Dividends : The Company declared a quarterly
dividend of $0.08 per share during the
first quarter.
Mark W. Brugger, Chief
Executive Officer of DiamondRock Hospitality Company, stated, "The
Company is pleased to report the outstanding first quarter performance
of our portfolio as lodging fundamentals continue to strengthen. The
results were above our original expectations. We are also pleased to
report the closing of the sale of three non-core hotels at attractive
pricing. With the sale complete, DiamondRock has one of the lowest
levered and flexible balance sheets in the industry, which further
enhances our external growth story as an opportunistic acquirer of
hotels in 2012."
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 and (ii) the operating
results of the three-hotel portfolio sold during the first fiscal
quarter.
For the first quarter beginning January
1, 2012 and ending March 23, 2012,
the Company reported the following:
- Pro Forma RevPAR growth of 8.8% and Pro Forma Hotel
Adjusted EBITDA margin expansion of 119 basis points compared to the
comparable period in 2011.
- Revenues of $141.0 million
compared to $122.3 million for the
comparable period in 2011, which includes amounts reported in
discontinued operations.
- Adjusted EBITDA of $23.4 million
compared to $18.9 million for the
comparable period in 2011.
- Adjusted FFO of $15.1 million
and Adjusted FFO per diluted share of $0.09
compared to $11.8 million and $0.07, respectively, for the comparable period
in 2011.
- Net income of $2.6 million
(or $0.02 per diluted share) compared to
a net loss of $11.0 million (or $0.07 per diluted share) for the comparable
period in 2011.
The first quarter Pro Forma RevPAR growth of 8.8% (from $96.04 to $104.50) was driven by a 4.3
percentage point increase in occupancy (from 66.9% to 71.2%) and a 2.3%
increase in the average daily rate (from $143.54
to $146.79). The first quarter Pro Forma
Hotel Adjusted EBITDA margin increased 119 basis points (from 15.96% to
17.15%) from the comparable period in 2011.
If Frenchman's Reef and the pre-sale operations of the three
non-core hotels are included, the Company's first quarter RevPAR growth
is 9.0% (from $98.24 to $107.07) and the
first quarter Hotel Adjusted EBITDA margin increased 152 basis points
(from 18.05% to 19.57%) from the comparable period in 2011. This RevPAR
growth is driven by a 4.3 percentage point increase in occupancy (from
66.6% to 70.9%) and a 2.4% increase in the average daily rate (from $147.44 to $151.04).
Sale of Hotel Portfolio
On March 23, 2012, the Company
completed the sale of a portfolio of three non-core hotels to Inland
American for a contractual sales price of $262.5
million. The portfolio consisted of the Griffin Gate Marriott
Resort and Spa in Lexington, Kentucky,
the Renaissance Waverly in Atlanta, Georgia,
and the Renaissance Austin in Austin, Texas.
The Company received net cash proceeds of $93
million from the disposition, after $180
million of mortgage debt assumption by the buyer. The proceeds
included approximately $10 million for
hotel working capital and cash previously held in restricted escrow
accounts, net of closing costs. The portfolio generated $21.1 million of Adjusted EBITDA for the
Company in 2011 and $5.2 million of
Adjusted EBITDA during the Company's ownership period in 2012. The
Company recorded a net gain on the sale of approximately $10 million, which is excluded from its
reported Adjusted EBITDA.
Lexington Hotel New York
On March 9, 2012, the Company
closed on a $170.4 million loan secured
by a mortgage on the Lexington Hotel New York. The loan bears interest
at a floating rate of one-month LIBOR plus 300 basis points and has an
initial term of three years with two one-year extension options subject
to the satisfaction of certain terms and conditions and payment of an
extension fee. In connection with the financing, the Company purchased
a three-year, 125 basis point LIBOR interest rate cap. The financing
includes $25 million of corporate
recourse, which will be eliminated when the hotel achieves a specified
debt yield test, the capital renovation plan is completed and the
branding requirements for the hotel are met.
On March 23, 2012, the Company
exercised its termination option under the hotel's existing franchise
agreement with Radisson. The hotel will operate under the Radisson
brand through September 15, 2012. The
Company paid Radisson a $750,000
termination fee during the first quarter of 2012, which has been
excluded from the Company's reported Adjusted EBITDA and Adjusted FFO.
Also on March 23, 2012, the Company
executed a franchise agreement with Marriott to affiliate the hotel
with Marriott's Autograph Collection upon the completion of a
comprehensive $30 million property
improvement plan. During the period following the hotel's separation
from the Radisson brand and prior to becoming affiliated with the
Autograph Collection, which is expected to occur in the second quarter
of 2013, the Company expects to operate the Hotel as "The Lexington," an independent hotel. Highgate
Hotels will remain the manager of the hotel.
Dividends
The Company's Board of Directors declared a quarterly dividend
of $0.08 per share to stockholders of
record as of March 23, 2012. The
dividend was paid on April 4, 2012.
Capital Expenditures
In 2012, the Company expects to spend approximately $45 million on capital improvements at its
hotels, $16 million of which is expected
to be funded from corporate cash. The Company spent approximately $6.8 million for capital improvements during
the first quarter. 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 take place
during the summer of 2012 and the lobby repositioning in the first
quarter of 2013.
- Courtyard Midtown East
: The Company expects to spend approximately $2.0 million to renovate the lobby and
restaurant, as well as relocate the fitness center and add 5 additional
rooms to the hotel.
- Renaissance Worthington
: The Company expects to spend $1.2 million over the next two years to
undertake a comprehensive repair of the concrete facade of the hotel.
- Marriott Atlanta Alpharetta : The
Company expects to spend $2.4 million to
renovate the guestrooms at the hotel during the third quarter of 2012.
In conjunction 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 $30 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.
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.
As of March 23, 2012, the
Company had $128.6 million of
unrestricted cash on hand and $903.3 million
of total debt, which consists solely of property-specific mortgage debt
with no near-term maturities. Twelve of the Company's 23 hotels are
unencumbered by mortgage debt and the Company has no borrowings
outstanding on its $200 million
corporate credit facility.
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 23 hotels were owned since
January 1, 2011 and excludes
Frenchman's Reef due to the partial closure for renovation during 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 increasing its full year 2012 guidance to
reflect the outperformance of its hotels during the first quarter, its
reassessment of potential disruption at the Chicago Marriott Downtown
and Renaissance Worthington, and an improved outlook for the
portfolio's performance for the remainder of the year.
Based on its outlook, the Company now expects the following
full year 2012 results:
- RevPAR growth of 6 percent to 8 percent;
- Adjusted EBITDA of $177 million to
$186 million;
- Adjusted FFO of $123.5 million to
$129.5 million, which assumes the income tax provision to range
from a benefit of $1.0 million to an
expense of $2.0 million; and
- Adjusted FFO per share of $0.73 to
$0.77 based on 168.4 million diluted weighted average shares.
In addition, the Company expects the following results for its
second fiscal quarter:
- RevPAR growth of 5 percent to 7 percent;
- Adjusted EBITDA of $47 million to
$50 million;
- Adjusted FFO of $32 million to $35
million, which assumes an income tax provision of $2 million to $3 million; and
- Adjusted FFO per share of $0.19 to
$0.21 based on 168.4 million diluted weighted average shares.
Earnings Call
The Company will host a conference call to discuss its first
quarter and full year results on Monday, April
30, 2012, at 2:00 p.m. Eastern Time
(ET). To participate in the live call, investors are invited to dial
888-713-4199 (for domestic callers) or 617-213-4861 (for international
callers). The participant passcode is 40014947. 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 23 premium hotels with approximately 10,400 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, and Highgate Hotels, manager of the Lexington Hotel,
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 or the Lexington Hotel 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 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.
|
DIAMONDROCK
HOSPITALITY COMPANY
CONSOLIDATED BALANCE SHEETS
As of March 23, 201 2 and December 31, 2011
(in thousands, except share and per share amounts)
|
|
|
|
|
|
March
23, 2012
|
|
December
31, 2011
|
|
(unaudited)
|
|
|
|
ASSETS
|
|
|
|
|
Property
and equipment, at cost
|
$
|
2,673,080
|
|
|
$
|
2,667,682
|
|
|
Less:
accumulated depreciation
|
(453,882)
|
|
|
(433,178)
|
|
|
2,219,198
|
|
|
2,234,504
|
|
|
Assets
held for sale
|
—
|
|
|
263,399
|
|
|
Restricted
cash
|
56,099
|
|
|
53,871
|
|
|
Due
from hotel managers
|
51,674
|
|
|
50,728
|
|
|
Note
receivable
|
54,788
|
|
|
54,788
|
|
|
Favorable
lease assets, net
|
43,054
|
|
|
43,285
|
|
|
Prepaid
and other assets
|
67,372
|
|
|
65,900
|
|
|
Cash
and cash equivalents
|
128,570
|
|
|
26,291
|
|
|
Deferred
financing costs, net
|
9,697
|
|
|
5,869
|
|
|
Total
assets
|
$
|
2,630,452
|
|
|
$
|
2,798,635
|
|
|
|
|
|
|
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
|
|
|
|
Liabilities:
|
|
|
|
|
Mortgage
debt
|
$
|
903,331
|
|
|
$
|
762,933
|
|
|
Mortgage
debt of assets held for sale
|
—
|
|
|
180,000
|
|
|
Senior
unsecured credit facility
|
—
|
|
|
100,000
|
|
|
Total
debt
|
903,331
|
|
|
1,042,933
|
|
|
Deferred
income related to key money, net
|
24,445
|
|
|
24,593
|
|
|
Unfavorable
contract liabilities, net
|
81,483
|
|
|
81,914
|
|
|
Due to
hotel managers
|
41,740
|
|
|
41,676
|
|
|
Liabilities
of assets held for sale
|
—
|
|
|
3,805
|
|
|
Dividends
declared and unpaid
|
13,600
|
|
|
13,594
|
|
|
Accounts
payable and accrued expenses
|
76,549
|
|
|
87,963
|
|
|
Total
other liabilities
|
237,817
|
|
|
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;
167,918,292 and 167,502,359 shares issued and outstanding at March 23,
2012 and December 31, 2011, respectively
|
1,679
|
|
|
1,675
|
|
|
Additional
paid-in capital
|
1,706,490
|
|
|
1,708,427
|
|
|
Accumulated
deficit
|
(218,865)
|
|
|
(207,945)
|
|
|
Total
stockholders' equity
|
1,489,304
|
|
|
1,502,157
|
|
|
Total
liabilities and stockholders' equity
|
$
|
2,630,452
|
|
|
$
|
2,798,635
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DIAMONDROCK
HOSPITALITY COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Fiscal Quarters Ended March 23, 2012
and March 25, 2011
(in thousands, except share and per share amounts)
|
|
|
|
|
|
Fiscal
Quarter Ended
March 23, 2012
|
|
Fiscal
Quarter Ended
March 25, 2011
|
|
Revenues:
|
(unaudited)
|
|
(unaudited)
|
|
Rooms
|
$
|
83,388
|
|
|
$
|
69,283
|
|
|
Food
and beverage
|
31,251
|
|
|
29,179
|
|
|
Other
|
6,783
|
|
|
5,291
|
|
|
Total
revenues
|
121,422
|
|
|
103,753
|
|
|
Operating
Expenses:
|
|
|
|
|
Rooms
|
24,879
|
|
|
20,202
|
|
|
Food
and beverage
|
23,844
|
|
|
22,588
|
|
|
Management
fees
|
3,142
|
|
|
2,748
|
|
|
Other
hotel expenses
|
49,003
|
|
|
41,399
|
|
|
Depreciation
and amortization
|
20,518
|
|
|
18,549
|
|
|
Hotel
acquisition costs
|
33
|
|
|
256
|
|
|
Corporate
expenses
|
4,483
|
|
|
4,074
|
|
|
Total
operating expenses
|
125,902
|
|
|
109,816
|
|
|
Operating
loss
|
(4,480)
|
|
|
(6,063)
|
|
|
Interest
income
|
(63)
|
|
|
(291)
|
|
|
Interest
expense
|
11,468
|
|
|
8,818
|
|
|
Gain
on early extinguishment of debt
|
(144)
|
|
|
—
|
|
|
Total
other expenses
|
11,261
|
|
|
8,527
|
|
|
Loss
from continuing operations before income taxes
|
(15,741)
|
|
|
(14,590)
|
|
|
Income
tax benefit
|
5,774
|
|
|
3,727
|
|
|
Loss
from continuing operations
|
(9,967)
|
|
|
(10,863)
|
|
|
Income
(loss) from discontinued operations, net of income taxes
|
12,582
|
|
|
(181)
|
|
|
Net
income (loss)
|
$
|
2,615
|
|
|
$
|
(11,044)
|
|
|
|
|
|
|
Earnings
(loss) per share:
|
|
|
|
|
Continuing
operations
|
$
|
(0.06)
|
|
|
$
|
(0.07)
|
|
|
Discontinued
operations
|
0.08
|
|
|
0.00
|
|
|
Basic
and diluted earnings (loss) per share
|
$
|
0.02
|
|
|
$
|
(0.07)
|
|
|
|
|
|
|
Weighted-average
number of common shares outstanding:
|
|
|
|
|
Basic
|
167,666,741
|
|
|
163,997,743
|
|
|
Diluted
|
168,172,549
|
|
|
163,997,743
|
|
Non-GAAP Financial Measures
The Company uses the following four non-GAAP financial
measures that it believes are useful to investors as key measures of
its operating performance: (1) EBITDA, (2) FFO, (3) Adjusted EBITDA and
(4) Adjusted 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.
The Company believes EBITDA is useful to an investor in evaluating its
operating performance because it helps investors evaluate and compare
the results of its operations from period to period by removing the
impact of the Company's capital structure (primarily interest expense)
and its asset base (primarily depreciation and amortization) from its
operating results. The Company also uses EBITDA as one measure in
determining the value of hotel acquisitions and dispositions.
|
|
|
|
Historical
(in 000s)
|
|
|
Fiscal
Quarter Ended
|
|
|
March
23, 2012
|
|
March
25, 2011
|
|
|
Net
income (loss)
|
$ 2,615
|
|
$
(11,044)
|
|
|
Interest
expense (1)
|
13,765
|
|
11,143
|
|
|
Income
tax benefit (2)
|
(5,588)
|
|
(4,091)
|
|
|
Depreciation
and amortization (3)
|
20,518
|
|
21,352
|
|
|
EBITDA
|
$
31,310
|
|
$
17,360
|
|
|
(1)
Amounts include interest expense included in discontinued operations as
follows: $2.3 million in the fiscal quarter ended March 23, 2012 and
$2.3
million in the fiscal quarter ended March 25, 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
March 23, 2012 and $0.4 million of income tax benefit in the fiscal
quarter ended March 25, 2011.
|
|
(3)
Amounts include depreciation expense included in discontinued
operations as follows: $2.8 million in the fiscal quarter ended March
25, 2011.
|
|
Guidance
(in 000s)
|
|
Quarter
2, 2012
|
|
Full
Year 2012
|
|
Low
End
|
|
High
End
|
|
Low
End
|
|
High
End
|
|
Net
income
|
$
9,650
|
|
$
12,650
|
|
$
36,128
|
|
$
43,128
|
|
Interest
expense
|
12,900
|
|
11,900
|
|
54,000
|
|
54,000
|
|
Income
tax expense (benefit)
|
2,000
|
|
3,000
|
|
(1,000)
|
|
2,000
|
|
Depreciation
and amortization
|
21,000
|
|
21,000
|
|
91,000
|
|
90,000
|
|
EBITDA
|
$
45,550
|
|
$
48,550
|
|
$
180,128
|
|
$
189,128
|
The Company also evaluates its performance by reviewing
Adjusted EBITDA because it believes that the exclusion of certain
additional recurring and non-recurring items described below provides
useful supplemental information regarding the Company's ongoing
operating performance and that the presentation of Adjusted EBITDA,
when combined with the primary GAAP presentation of net income (loss),
is beneficial to a complete understanding of the Company's operating
performance. The Company adjusts EBITDA for the following items, which
may occur in any period, and refers to this measure as Adjusted EBITDA:
- Non-Cash Ground Rent: The Company excludes the non-cash
expense incurred from straight lining the rent from its ground lease
obligations and the non-cash amortization of its favorable lease
assets.
- The impact of the non-cash amortization of the unfavorable
contract liabilities recorded in conjunction with the Company's
acquisitions of the Bethesda Marriott Suites, the Chicago Marriott
Downtown, the Renaissance Charleston and the Radisson Lexington. The
amortization of the unfavorable contract liabilities does not reflect
the underlying performance of the Company.
- 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. The Company excludes these one-time adjustments
because they do not reflect its actual performance for that period.
- Gains from Early Extinguishment of Debt: The Company
excludes the effect of gains recorded on the early extinguishment of
debt because it believes that including them in EBITDA is not
consistent with reflecting the ongoing performance of its hotels.
- Impairment Losses: The Company excludes the effect of
impairment losses recorded because it believes that including them in
EBITDA is not consistent with reflecting the ongoing performance of its
hotels. In addition, the Company believes that impairment charges are
similar to depreciation expense, which is also excluded from EBITDA.
- Gains or Losses on Dispositions: The Company excludes the
effect of gains or losses on dispositions from EBITDA because it
believes that including them is not consistent with reflecting the
ongoing performance of its remaining hotels.
- Acquisition Costs: The Company excludes acquisition
transaction costs expensed during the period because it believes that
including these costs in EBITDA is not consistent with the underlying
performance of the Company.
- Allerton Loan: In 2011, the Company included cash payments
received on its senior loan secured by the Allerton Hotel in Adjusted
EBITDA. GAAP requires the Company to record the cash received from the
borrower as a reduction of its 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, the Company excludes both cash interest payments
received from the borrower and the legal costs incurred as a result of
the bankruptcy proceedings from its calculation of Adjusted EBITDA.
- Other Non-Cash and /or Unusual Items: The Company excludes
the effect of certain non-cash and/or unusual items because it believes
that including these costs in EBITDA is not consistent with the
underlying performance of the Company. In 2012, the Company excluded
the franchise termination fee paid to Radisson because it believes that
including it would not be consistent with reflecting the ongoing
performance of its hotels.
|
Historical
(in 000s)
|
|
|
Fiscal
Quarter Ended
|
|
|
|
March
23,
2012
|
|
March
25,
2011
|
|
|
|
|
|
EBITDA
|
$
31,310
|
|
$
17,360
|
|
|
|
|
|
Non-cash
ground rent
|
1,531
|
|
1,566
|
|
|
|
|
|
Non-cash
amortization of unfavorable contract liabilities
|
(432)
|
|
(426)
|
|
|
|
|
|
Gain
on sale of hotel properties
|
(10,017)
|
|
-
|
|
|
|
|
|
Gain
on early extinguishment of debt
|
(144)
|
|
-
|
|
|
|
|
|
Franchise
termination fee
|
750
|
|
-
|
|
|
|
|
|
Allerton
loan legal fees
|
322
|
|
-
|
|
|
|
|
|
Allerton
loan interest payments
|
-
|
|
100
|
|
|
|
|
|
Acquisition
costs
|
33
|
|
256
|
|
|
|
|
|
Adjusted
EBITDA
|
$
23,353
|
|
$
18,856
|
|
|
|
|
|
Guidance
(in 000s)
|
|
Quarter
2, 2012
|
|
Full
Year 2012
|
|
Low
End
|
|
High
End
|
|
Low
End
|
|
High
End
|
|
EBITDA
|
$
45,550
|
|
$
48,550
|
|
$
180,128
|
|
$
189,128
|
|
Non-cash
ground rent
|
1,400
|
|
1,400
|
|
6,100
|
|
6,100
|
|
Non-cash
amortization of unfavorable contract liabilities
|
(450)
|
|
(450)
|
|
(1,850)
|
|
(1,850)
|
|
Gain
on sale of hotel properties
|
-
|
|
-
|
|
(10,017)
|
|
(10,017)
|
|
Gain
on early extinguishment of debt
|
-
|
|
-
|
|
(144)
|
|
(144)
|
|
Franchise
termination fee
|
-
|
|
-
|
|
750
|
|
750
|
|
Allerton
loan legal fees
|
500
|
|
500
|
|
2,000
|
|
2,000
|
|
Acquisition
costs
|
-
|
|
-
|
|
33
|
|
33
|
|
Adjusted
EBITDA
|
$
47,000
|
|
$
50,000
|
|
$
177,000
|
|
$
186,000
|
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.
|
Historical
(in 000s)
|
|
|
Fiscal
Quarter Ended
|
|
|
|
March
23,
2012
|
|
March
25,
2011
|
|
|
|
|
|
Net
income (loss)
|
$ 2,615
|
|
$
(11,044)
|
|
|
|
|
|
Real
estate related depreciation and amortization (1)
|
20,518
|
|
21,352
|
|
|
|
|
|
Gain
on sale of hotel properties
|
(10,017)
|
|
-
|
|
|
|
|
|
FFO
|
$
13,116
|
|
$
10,308
|
|
|
|
|
|
FFO
per share (basic and diluted)
|
$ 0.08
|
|
$ 0.06
|
|
|
|
|
|
(1)
Amounts include depreciation expense included in discontinued
operations as follows: $2.8 million in the fiscal quarter ended March
25, 2011.
|
|
Guidance
(in 000s)
|
|
Quarter
2, 2012
|
|
Full
Year 2012
|
|
Low
End
|
|
High
End
|
|
Low
End
|
|
High
End
|
|
Net
income
|
$ 9,650
|
|
$
12,650
|
|
$
36,128
|
|
$
43,128
|
|
Gain
on sale of hotel properties
|
-
|
|
-
|
|
(10,017)
|
|
(10,017)
|
|
Real
estate related depreciation and amortization
|
21,000
|
|
21,000
|
|
91,000
|
|
90,000
|
|
FFO
|
$
30,650
|
|
$
33,650
|
|
$
117,111
|
|
$
123,111
|
|
FFO
per share (basic and diluted)
|
$ 0.18
|
|
$ 0.20
|
|
$ 0.70
|
|
$ 0.73
|
The Company also evaluates its performance by reviewing
Adjusted FFO because it believes that the exclusion of certain
additional recurring and non-recurring items described below provides
useful supplemental information regarding the Company's ongoing
operating performance and that the presentation of Adjusted FFO, when
combined with the primary GAAP presentation of net income (loss), is
beneficial to a complete understanding of the Company's operating
performance. The Company adjusts FFO for the following items, which may
occur in any period, and refers to this measure as Adjusted FFO:
- Non-Cash Ground Rent: The Company excludes the non-cash
expense incurred from straight lining the rent from its ground lease
obligations and the non-cash amortization of its favorable lease
assets.
- The impact of the non-cash amortization of the unfavorable
contract liabilities recorded in conjunction with the Company's
acquisitions of the Bethesda Marriott Suites, the Chicago Marriott
Downtown, the Renaissance Charleston and the Radisson Lexington. The
amortization of the unfavorable contract liabilities does not reflect
the underlying performance of the Company.
- Fair Value Adjustments to Debt Instruments: The impact of
the non-cash amortization of the debt premiums recorded in conjunction
with the acquisitions of the JW Marriott Denver at Cherry Creek and
Courtyard Denver Downtown and any fair market value adjustments to the
Company's interest rate cap agreement.
- 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. The Company excludes these one-time adjustments
because they do not reflect its actual performance for that period.
- Gains from Early Extinguishment of Debt: The Company
excludes the effect of gains recorded on the early extinguishment of
debt because it believes that including them in FFO is not consistent
with reflecting the ongoing performance of its hotels.
- Acquisition Costs: The Company excludes acquisition
transaction costs expensed during the period because it believes that
including these costs in FFO is not consistent with the underlying
performance of the Company.
- Allerton Loan: In 2011, the Company included cash payments
received on its senior loan secured by the Allerton Hotel in Adjusted
FFO. GAAP requires the Company to record the cash received from the
borrower as a reduction of its 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, the Company excludes both cash interest payments
received from the borrower and the legal costs incurred as a result of
the bankruptcy proceedings from its calculation of Adjusted FFO.
- Other Non-Cash and /or Unusual Items: The Company excludes
the effect of certain non-cash and/or unusual items because it believes
that including these costs in FFO is not consistent with the underlying
performance of the Company. In 2012, the Company excluded the
termination fee paid to Radisson because it believes that including it
would not be consistent with reflecting the ongoing performance of its
hotels.
|
Historical
(in 000s)
|
|
|
Fiscal
Quarter Ended
|
|
|
|
March
23,
2012
|
|
March
25,
2011
|
|
|
|
|
|
FFO
|
$
13,116
|
|
$
10,308
|
|
|
|
|
|
Non-cash
ground rent
|
1,531
|
|
1,566
|
|
|
|
|
|
Non-cash
amortization of unfavorable contract liabilities
|
(432)
|
|
(426)
|
|
|
|
|
|
Fair
value adjustments to debt instruments
|
(47)
|
|
-
|
|
|
|
|
|
Gain
on early extinguishment of debt
|
(144)
|
|
-
|
|
|
|
|
|
Franchise
termination fee
|
750
|
|
-
|
|
|
|
|
|
Allerton
loan legal fees
|
322
|
|
-
|
|
|
|
|
|
Allerton
loan interest payments
|
-
|
|
100
|
|
|
|
|
|
Acquisition
costs
|
33
|
|
256
|
|
|
|
|
|
Adjusted
FFO
|
$
15,129
|
|
$
11,804
|
|
|
|
|
|
Adjusted
FFO per share (diluted)
|
$ 0.09
|
|
$ 0.07
|
|
|
|
|
|
Guidance
(in 000s)
|
|
Quarter
2, 2012
|
|
Full
Year 2012
|
|
Low
End
|
|
High
End
|
|
Low
End
|
|
High
End
|
|
FFO
|
$
30,650
|
|
$
33,650
|
|
$
117,111
|
|
$
123,111
|
|
Non-cash
ground rent
|
1,400
|
|
1,400
|
|
6,100
|
|
6,100
|
|
Non-cash
amortization of unfavorable contract liabilities
|
(450)
|
|
(450)
|
|
(1,850)
|
|
(1,850)
|
|
Fair
value adjustments to debt instruments
|
(100)
|
|
(100)
|
|
(500)
|
|
(500)
|
|
Gain
on early extinguishment of debt
|
-
|
|
-
|
|
(144)
|
|
(144)
|
|
Franchise
termination fee
|
-
|
|
-
|
|
750
|
|
750
|
|
Allerton
loan legal fees
|
-
|
|
-
|
|
2,000
|
|
2,000
|
|
Acquisition
costs
|
500
|
|
500
|
|
33
|
|
33
|
|
Adjusted
FFO
|
$
32,000
|
|
$
35,000
|
|
$
123,500
|
|
$
129,500
|
|
Adjusted
FFO per share (diluted)
|
$ 0.19
|
|
$ 0.21
|
|
$ 0.73
|
|
$ 0.77
|
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 hotels as if they were owned since January 1, 2011 but exclude Frenchman's Reef
and the three hotels sold on March 23, 2012.
|
Quarter
2, 2011
|
Quarter
3, 2011
|
|
Quarter
4, 2011
|
|
Full
Year 2011
|
Quarter
1, 2012
|
|
|
RevPAR
|
$
128.65
|
$
131.53
|
|
$
129.59
|
|
$
123.01
|
$
104.50
|
|
|
Revenues
(in thousands)
|
$
158,488
|
$
158,702
|
|
$
213,055
|
|
$
633,273
|
$
110,524
|
|
|
Hotel
Adjusted EBITDA (in thousands)
|
$
44,822
|
$
43,832
|
|
$
60,721
|
|
$
165,821
|
$
18,954
|
|
|
%
of Full Year
|
27.0%
|
26.4%
|
|
36.6%
|
|
100.0%
|
10.5%
|
|
|
Hotel
Adjusted EBITDA Margin
|
28.28%
|
27.62%
|
|
28.50%
|
|
26.18%
|
17.15%
|
|
|
Available
Rooms
|
863,096
|
863,096
|
|
1,154,207
|
|
3,614,960
|
732,418
|
|
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
|
|
907,072
|
|
Quarter
4
|
1,355,863
|
|
1,224,541
|
|
Full
Year
|
4,082,534
|
|
3,916,387
|
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
23, 2012
|
|
March
25, 2011
|
|
%
Change
|
|
|
Revenues:
|
|
|
|
|
|
|
|
Rooms
|
$
76,539
|
|
$
70,549
|
|
8.5%
|
|
|
Food
and beverage
|
28,282
|
|
27,140
|
|
4.2%
|
|
|
Other
|
5,703
|
|
5,339
|
|
6.8%
|
|
|
Total
revenues
|
110,524
|
|
103,028
|
|
7.3%
|
|
|
|
|
|
|
|
|
|
Operating
Expenses:
|
|
|
|
|
|
|
|
Rooms
|
23,633
|
|
21,853
|
|
8.1%
|
|
|
Food
and beverage
|
21,647
|
|
20,960
|
|
3.3%
|
|
|
Other
direct departmental
|
3,344
|
|
3,246
|
|
3.0%
|
|
|
General
and administrative
|
10,714
|
|
10,388
|
|
3.1%
|
|
|
Utilities
|
4,072
|
|
4,347
|
|
(6.3%)
|
|
|
Repairs
and maintenance
|
5,790
|
|
5,649
|
|
2.5%
|
|
|
Sales
and marketing
|
9,426
|
|
8,760
|
|
7.6%
|
|
|
Base
management fees
|
2,758
|
|
2,567
|
|
7.4%
|
|
|
Incentive
management fees
|
60
|
|
74
|
|
(18.9%)
|
|
|
Property
taxes
|
6,606
|
|
5,455
|
|
21.1%
|
|
|
Ground
rent
|
3,004
|
|
2,882
|
|
4.2%
|
|
|
Other
fixed expenses
|
1,615
|
|
1,575
|
|
2.5%
|
|
|
Total
hotel operating expenses
|
92,669
|
|
87,756
|
|
5.6%
|
|
|
|
|
|
|
|
|
|
Hotel
EBITDA
|
17,855
|
|
15,272
|
|
16.9%
|
|
|
|
|
|
|
|
|
|
Non-cash
ground rent
|
1,531
|
|
1,606
|
|
(4.7%)
|
|
|
Non-cash
amortization of unfavorable contract liabilities
|
(432)
|
|
(432)
|
|
0.0%
|
|
|
Hotel
Adjusted EBITDA
|
$
18,954
|
|
$
16,446
|
|
15.2%
|
|
|
|
|
|
|
|
|
|
NOTE:
|
|
The
pro forma operating data above includes the operating results for the
Company's hotels assuming they were owned since January 1, 2011 but
excludes the Frenchman's Reef & Morning Star Marriott Beach Resort
due to the extensive 2011 renovation and the operating results of the
three hotels sold on March 23, 2012.
|
Market Capitalization as of March 23, 2012
(in
thousands, except per share data)
|
|
|
|
|
Enterprise
Value
|
|
|
|
|
|
|
Common
equity capitalization (at March 23, 2012 closing price of $9.89/share)
|
|
$
1,667,880
|
|
Consolidated
debt
|
|
903,331
|
|
Cash
and cash equivalents
|
|
(128,570)
|
|
|
|
|
Total
enterprise value
|
|
$
2,442,641
|
|
|
|
|
|
|
|
Share
Reconciliation
|
|
|
|
|
|
|
Common
shares outstanding
|
|
167,918
|
|
|
|
|
Unvested
restricted stock held by management and employees
|
|
691
|
|
Share
grants under deferred compensation plan held by directors
|
34
|
|
|
|
|
Combined
shares outstanding
|
|
168,643
|
|
Debt
Summary as of March 23, 2012
|
|
(dollars
in thousands)
|
|
|
|
|
|
|
|
|
|
|
Property
|
|
Interest
Rate
|
|
Term
|
|
Outstanding
Principal
|
|
Maturity
|
|
|
|
|
|
|
|
|
|
|
Courtyard
Manhattan / Midtown East
|
|
8.810%
|
|
Fixed
|
|
$
42,213
|
|
October
2014
|
|
Salt
Lake City Marriott Downtown
|
|
5.500%
|
|
Fixed
|
|
29,823
|
|
January
2015
|
|
Courtyard
Manhattan / Fifth Avenue
|
|
6.480%
|
|
Fixed
|
|
50,573
|
|
June
2016
|
|
Los
Angeles Airport Marriott
|
|
5.300%
|
|
Fixed
|
|
82,600
|
|
July
2015
|
|
Marriott
Frenchman's Reef
|
5.440%
|
|
Fixed
|
|
59,407
|
|
August
2015
|
|
Renaissance
Worthington
|
|
5.400%
|
|
Fixed
|
|
55,330
|
|
July
2015
|
|
Orlando
Airport Marriott
|
|
5.680%
|
|
Fixed
|
|
58,146
|
|
January
2016
|
|
Chicago
Marriott Downtown
|
|
5.975%
|
|
Fixed
|
|
213,611
|
|
April
2016
|
|
Hilton
Minneapolis
|
|
5.464%
|
|
Fixed
|
|
98,479
|
|
April
2021
|
|
JW
Marriott Denver Cherry Creek
|
|
6.470%
|
|
Fixed
|
|
41,602
|
|
July
2015
|
|
Lexington
Hotel New York
|
|
LIBOR
+
3.00
|
|
Variable
|
|
170,368
|
|
March
2015
|
|
Debt
premium (1)
|
|
|
|
|
|
1,179
|
|
|
|
Total
mortgage debt
|
|
|
|
|
|
903,331
|
|
|
|
|
|
|
|
|
|
|
|
|
Senior
Unsecured Credit Facility
|
|
LIBOR
+
3.00
|
|
Variable
|
|
-
|
|
August
2014
|
|
Total
Debt
|
|
|
|
$
903,331
|
|
|
|
(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
2012
|
1Q
2011
|
B/(W)
|
|
1Q
2012
|
1Q
2011
|
B/(W)
|
|
1Q
20112
|
1Q
2011
|
B/(W)
|
|
1Q
2012
|
1Q
2011
|
B/(W)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Atlanta
Alpharetta
|
|
$
144.64
|
$
136.59
|
5.9%
|
|
67.2%
|
67.1%
|
0.1%
|
|
$ 97.23
|
$ 91.60
|
6.1%
|
|
36.00%
|
33.54%
|
246 bps
|
|
Westin
Atlanta North (3)
|
|
$
111.03
|
$
110.15
|
0.8%
|
|
76.5%
|
63.9%
|
12.6%
|
|
$ 84.92
|
$ 70.40
|
20.6%
|
|
21.43%
|
13.52%
|
791 bps
|
|
Atlanta
Waverly (2)
|
|
$
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 (2)
|
|
$
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
|
|
$
176.34
|
$
175.96
|
0.2%
|
|
51.8%
|
54.7%
|
(2.9%)
|
|
$ 91.33
|
$ 96.22
|
(5.1%)
|
|
20.67%
|
20.78%
|
-11 bps
|
|
Boston
Westin (3)
|
|
$
165.15
|
$
156.57
|
5.5%
|
|
54.6%
|
47.2%
|
7.4%
|
|
$ 90.23
|
$ 73.87
|
22.1%
|
|
(4.71%)
|
(10.59%)
|
588 bps
|
|
Renaissance
Charleston
|
|
$
169.41
|
$
158.29
|
7.0%
|
|
80.1%
|
75.6%
|
4.5%
|
|
$
135.77
|
$
119.72
|
13.4%
|
|
29.51%
|
25.63%
|
388 bps
|
|
Hilton
Garden Inn Chelsea (3)
|
|
$
152.21
|
$
150.89
|
0.9%
|
|
88.8%
|
83.6%
|
5.2%
|
|
$
135.17
|
$
126.13
|
7.2%
|
|
22.93%
|
25.25%
|
-232
bps
|
|
Chicago
Marriott
|
|
$
155.86
|
$
156.15
|
(0.2%)
|
|
55.8%
|
50.9%
|
4.9%
|
|
$ 86.99
|
$ 79.48
|
9.4%
|
|
(2.52%)
|
(1.02%)
|
-150
bps
|
|
Chicago
Conrad (3)
|
|
$
152.71
|
$
141.83
|
7.7%
|
|
58.2%
|
60.7%
|
(2.5%)
|
|
$ 88.94
|
$ 86.16
|
3.2%
|
|
(20.70%)
|
(12.89%)
|
-781
bps
|
|
Courtyard
Denver Downtown (3)
|
|
$
140.70
|
$
139.53
|
0.8%
|
|
80.7%
|
69.0%
|
11.7%
|
|
$
113.57
|
$ 96.25
|
18.0%
|
|
39.28%
|
33.21%
|
607 bps
|
|
Courtyard
Fifth Avenue
|
|
$
217.61
|
$
209.46
|
3.9%
|
|
84.1%
|
78.6%
|
5.5%
|
|
$
182.95
|
$
164.72
|
11.1%
|
|
11.08%
|
8.88%
|
220 bps
|
|
Courtyard
Midtown East
|
|
$
209.34
|
$
203.66
|
2.8%
|
|
79.0%
|
74.4%
|
4.6%
|
|
$
165.45
|
$
151.55
|
9.2%
|
|
16.28%
|
12.77%
|
351 bps
|
|
Frenchman's
Reef (3)
|
|
$
285.06
|
$
275.05
|
3.6%
|
|
83.8%
|
78.4%
|
5.4%
|
|
$
238.74
|
$
215.51
|
10.8%
|
|
31.69%
|
28.41%
|
328 bps
|
|
Griffin
Gate Marriott (2)
|
|
$
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 (3)
|
|
$
213.07
|
$
219.54
|
(2.9%)
|
|
67.7%
|
62.0%
|
5.7%
|
|
$
144.30
|
$
136.22
|
5.9%
|
|
19.93%
|
19.65%
|
28 bps
|
|
Los
Angeles Airport
|
|
$
108.18
|
$
108.43
|
(0.2%)
|
|
89.7%
|
83.3%
|
6.4%
|
|
$ 97.06
|
$ 90.38
|
7.4%
|
|
20.12%
|
18.28%
|
184 bps
|
|
Hilton
Minneapolis (3)
|
|
$
113.66
|
$
113.72
|
(0.1%)
|
|
59.7%
|
60.0%
|
(0.3%)
|
|
$ 67.88
|
$ 68.21
|
(0.5%)
|
|
8.92%
|
15.45%
|
-653
bps
|
|
Oak
Brook Hills
|
|
$
111.40
|
$
106.48
|
4.6%
|
|
49.7%
|
36.7%
|
13.0%
|
|
$ 55.41
|
$ 39.04
|
41.9%
|
|
(3.42%)
|
(29.26%)
|
2584
bps
|
|
Orlando
Airport Marriott
|
|
$
115.69
|
$
108.46
|
6.7%
|
|
83.8%
|
89.4%
|
(5.6%)
|
|
$ 96.99
|
$ 96.96
|
0.0%
|
|
32.58%
|
33.67%
|
-109
bps
|
|
Salt
Lake City Marriott
|
|
$
139.18
|
$
126.57
|
10.0%
|
|
71.2%
|
57.7%
|
13.5%
|
|
$ 99.13
|
$ 73.04
|
35.7%
|
|
35.68%
|
23.20%
|
1248
bps
|
|
The
Lodge at Sonoma
|
|
$
182.58
|
$
167.88
|
8.8%
|
|
52.2%
|
52.9%
|
(0.7%)
|
|
$ 95.25
|
$ 88.78
|
7.3%
|
|
(3.10%)
|
(12.64%)
|
954 bps
|
|
Torrance
Marriott South Bay
|
|
$
110.90
|
$
106.05
|
4.6%
|
|
80.8%
|
77.8%
|
3.0%
|
|
$ 89.61
|
$ 82.55
|
8.6%
|
|
23.64%
|
20.87%
|
277 bps
|
|
Vail
Marriott (3)
|
|
$
322.71
|
$
311.68
|
3.5%
|
|
78.9%
|
80.4%
|
(1.5%)
|
|
$
254.63
|
$
250.53
|
1.6%
|
|
45.54%
|
44.46%
|
108 bps
|
|
Radisson
Lexington Hotel New York (3)
|
|
$
139.69
|
$
126.80
|
10.2%
|
|
92.0%
|
89.4%
|
2.6%
|
|
$
128.45
|
$
113.38
|
13.3%
|
|
8.51%
|
6.89%
|
162 bps
|
|
Renaissance
Worthington
|
|
$
156.09
|
$
172.68
|
(9.6%)
|
|
77.7%
|
74.3%
|
3.4%
|
|
$
121.21
|
$
128.29
|
(5.5%)
|
|
33.22%
|
39.72%
|
-650
bps
|
|
Total/Weighted
Average
|
|
$
151.04
|
$
147.44
|
2.4%
|
|
70.9%
|
66.6%
|
4.3%
|
|
$
107.07
|
$ 98.24
|
9.0%
|
|
19.57%
|
18.05%
|
152 bps
|
|
Comparable
Total/Weighted Average (4)
|
|
$
146.79
|
$
143.54
|
2.3%
|
|
71.2%
|
66.9%
|
4.3%
|
|
$
104.50
|
$ 96.04
|
8.8%
|
|
17.15%
|
15.96%
|
119 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 was sold on March 23, 2012.
|
|
(3)
The hotel reports results on a monthly basis. The data presented is
based upon the Company's reporting calendar for the first quarter and
includes
the months of January and February.
|
|
(4)
The comparable 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
|
|
|
|
|
|
|
|
|
|
|
|
First
Quarter 2012 (1)
|
|
|
|
|
|
|
Plus:
|
Plus:
|
Equals:
|
|
|
Total
Revenues
|
|
Net
Income / (Loss)
|
Plus:
Depreciation
|
Interest
Expense
|
Non-Cash
Adjustments (2)
|
Hotel
Adjusted EBITDA
|
|
Atlanta
Alpharetta
|
|
$ 3,847
|
|
$ 1,092
|
$ 293
|
$ -
|
$ -
|
$ 1,385
|
|
Westin
Atlanta North (3)
|
|
$ 3,000
|
|
$ 186
|
$ 457
|
$ -
|
$ -
|
$ 643
|
|
Atlanta
Waverly (4)
|
|
$ 7,755
|
|
$ 805
|
$ -
|
$ 1,237
|
$ -
|
$ 2,042
|
|
Renaissance
Austin (4)
|
|
$ 8,385
|
|
$ 2,167
|
$ -
|
$ 1,061
|
$ -
|
$ 3,228
|
|
Bethesda
Marriott Suites
|
|
$ 2,946
|
|
$
(1,312)
|
$ 479
|
$ -
|
$ 1,442
|
$ 609
|
|
Boston
Westin (3)
|
|
$ 7,403
|
|
$
(2,589)
|
$ 2,238
|
$ -
|
$ 2
|
$ (349)
|
|
Renaissance
Charleston
|
|
$ 2,325
|
|
$ 368
|
$ 347
|
$ -
|
$ (29)
|
$ 686
|
|
Hilton
Garden Inn Chelsea (3)
|
|
$ 1,435
|
|
$ (108)
|
$ 437
|
$ -
|
$ -
|
$ 329
|
|
Chicago
Marriott
|
|
$
13,039
|
|
$
(5,589)
|
$ 2,652
|
$ 2,974
|
$ (365)
|
$ (328)
|
|
Chicago
Conrad (3)
|
|
$ 2,068
|
|
$
(1,194)
|
$ 766
|
$ -
|
$ -
|
$ (428)
|
|
Courtyard
Denver Downtown (3)
|
|
$ 1,311
|
|
$ 104
|
$ 236
|
$ 175
|
$ -
|
$ 515
|
|
Courtyard
Fifth Avenue
|
|
$ 2,853
|
|
$ (941)
|
$ 425
|
$ 784
|
$ 48
|
$ 316
|
|
Courtyard
Midtown East
|
|
$ 4,534
|
|
$ (702)
|
$ 546
|
$ 894
|
$ -
|
$ 738
|
|
Frenchman's
Reef (3)
|
|
$
10,898
|
|
$ 1,231
|
$ 1,440
|
$ 783
|
$ -
|
$ 3,454
|
|
Griffin
Gate Marriott (4)
|
|
$ 3,462
|
|
$ (84)
|
$ -
|
$ -
|
$ (1)
|
$ (85)
|
|
JW
Marriott Denver Cherry Creek (3)
|
|
$ 2,669
|
|
$ (435)
|
$ 419
|
$ 548
|
$ -
|
$ 532
|
|
Los
Angeles Airport
|
|
$
13,103
|
|
$ 266
|
$ 1,347
|
$ 1,023
|
$ -
|
$ 2,636
|
|
Minneapolis
Hilton (3)
|
|
$ 5,933
|
|
$
(2,313)
|
$ 1,741
|
$ 1,262
|
$ (161)
|
$ 529
|
|
Oak
Brook Hills
|
|
$ 3,861
|
|
$ (992)
|
$ 735
|
$ -
|
$ 125
|
$ (132)
|
|
Orlando
Airport Marriott
|
|
$ 5,608
|
|
$ 361
|
$ 700
|
$ 766
|
$ -
|
$ 1,827
|
|
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 (3)
|
|
$ 6,711
|
|
$ 2,522
|
$ 534
|
$ -
|
$ -
|
$ 3,056
|
|
Radisson
Lexington Hotel New York (3)
|
|
$ 5,957
|
|
$
(2,250)
|
$ 2,361
|
$ 363
|
$ 33
|
$ 507
|
|
Renaissance
Worthington
|
|
$ 7,990
|
|
$ 1,290
|
$ 658
|
$ 700
|
$ 6
|
$ 2,654
|
|
Total
|
|
$
141,024
|
|
$
(6,914)
|
$
20,518
|
$
12,955
|
$ 1,100
|
$
27,593
|
|
Comparable
Total (5)
|
|
$
110,524
|
|
$
(11,033)
|
$
19,078
|
$ 9,874
|
$ 1,101
|
$
18,954
|
|
(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 our 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 first quarter and
include
the months of January and February.
|
|
(4)
The hotel was sold on March 23, 2012.
|
|
(5)
The comparable 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
|
|
|
First
Quarter 2011 (1)
|
|
|
|
|
|
Plus:
|
Plus:
|
Plus:
|
Equals:
|
|
|
Total
Revenues
|
|
Net
Income / (Loss)
|
Depreciation
|
Interest
Expense
|
Non-Cash
Adjustments (2)
|
Hotel
Adjusted EBITDA
|
|
Atlanta
Alpharetta
|
|
$ 3,670
|
|
$ 946
|
$ 285
|
$ -
|
$ -
|
$ 1,231
|
|
Westin
Atlanta North (3)
|
|
$ 2,500
|
|
$ (90)
|
$ 428
|
$ -
|
$ -
|
$ 338
|
|
Atlanta
Waverly (4)
|
|
$ 7,332
|
|
$ 476
|
$ -
|
$ 1,251
|
$ -
|
$ 1,727
|
|
Renaissance
Austin (4)
|
|
$ 7,669
|
|
$ 1,621
|
$ -
|
$ 1,074
|
$ -
|
$ 2,695
|
|
Bethesda
Marriott Suites
|
|
$ 3,084
|
|
$
(1,296)
|
$ 486
|
$ -
|
$ 1,451
|
$ 641
|
|
Boston
Westin (3)
|
|
$ 6,221
|
|
$
(3,684)
|
$ 2,908
|
$ -
|
$ 117
|
$ (659)
|
|
Renaissance
Charleston
|
|
$ 2,052
|
|
$ 224
|
$ 331
|
$ -
|
$ (29)
|
$ 526
|
|
Hilton
Garden Inn Chelsea (3)
|
|
$ 1,311
|
|
$ (91)
|
$ 422
|
$ -
|
$ -
|
$ 331
|
|
Chicago
Marriott
|
|
$
12,407
|
|
$
(6,124)
|
$ 3,313
|
$ 3,049
|
$ (365)
|
$ (127)
|
|
Chicago
Conrad (3)
|
|
$ 2,102
|
|
$
(1,408)
|
$ 1,137
|
$ -
|
$ -
|
$ (271)
|
|
Courtyard
Denver Downtown (3)
|
|
$ 1,099
|
|
$ (204)
|
$ 234
|
$ 335
|
$ -
|
$ 365
|
|
Courtyard
Fifth Avenue
|
|
$ 2,602
|
|
$
(1,055)
|
$ 439
|
$ 799
|
$ 48
|
$ 231
|
|
Courtyard
Midtown East
|
|
$ 4,197
|
|
$ (927)
|
$ 532
|
$ 931
|
$ -
|
$ 536
|
|
Frenchman's
Reef (3)
|
|
$ 9,634
|
|
$ 986
|
$ 953
|
$ 798
|
$ -
|
$ 2,737
|
|
Griffin
Gate Marriott (4)
|
|
$ 3,286
|
|
$ 33
|
$ -
|
$ -
|
$ (1)
|
$ 32
|
|
JW
Marriott Denver Cherry Creek (3)
|
|
$ 2,626
|
|
$ (475)
|
$ 417
|
$ 574
|
$ -
|
$ 516
|
|
Los
Angeles Airport
|
|
$
12,256
|
|
$ (104)
|
$ 1,308
|
$ 1,036
|
$ -
|
$ 2,240
|
|
Minneapolis
Hilton (3)
|
|
$ 6,129
|
|
$ (527)
|
$ 1,682
|
$ -
|
$ (208)
|
$ 947
|
|
Oak
Brook Hills
|
|
$ 2,608
|
|
$
(1,630)
|
$ 742
|
$ -
|
$ 125
|
$ (763)
|
|
Orlando
Airport Marriott
|
|
$ 6,014
|
|
$ 486
|
$ 755
|
$ 784
|
$ -
|
$ 2,025
|
|
Salt
Lake City Marriott
|
|
$ 4,772
|
|
$ 70
|
$ 628
|
$ 409
|
$ -
|
$ 1,107
|
|
The
Lodge at Sonoma
|
|
$ 2,602
|
|
$ (658)
|
$ 329
|
$ -
|
$ -
|
$ (329)
|
|
Torrance
Marriott South Bay
|
|
$ 4,666
|
|
$ 239
|
$ 735
|
$ -
|
$ -
|
$ 974
|
|
Vail
Marriott (3)
|
|
$ 6,494
|
|
$ 2,378
|
$ 509
|
$ -
|
$ -
|
$ 2,887
|
|
Radisson
Lexington Hotel New York (3)
|
|
$ 5,185
|
|
$
(1,965)
|
$ 2,289
|
$ -
|
$ 33
|
$ 357
|
|
Renaissance
Worthington
|
|
$ 8,431
|
|
$ 2,003
|
$ 626
|
$ 717
|
$ 3
|
$ 3,349
|
|
Total
|
|
$
130,949
|
|
$
(10,776)
|
$
21,488
|
$
11,757
|
$ 1,174
|
$
23,637
|
|
Comparable
Total (5)
|
|
$
103,028
|
|
$
(13,892)
|
$
20,535
|
$ 8,634
|
$ 1,175
|
$
16,446
|
|
(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 our ground lease obligations, the
on-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 data presented is
based upon the Company's reporting calendar for the fourth quarter and
includes
the months of January and February.
|
|
(4)
The hotel was sold on March 23, 2012. The 2011 operating results
reflected are for the ownership period comparable to the Company's 2012
ownership period.
|
|
(5)
The comparable total excludes the Frenchman's Reef & Morning Star
Marriott Beach Resort and the three hotels sold during on March 23,
2012.
|
|
