BETHESDA, Md., Oct. 12, 2012 -- DiamondRock Hospitality
Company (the "Company") (NYSE: DRH) today announced results of
operations for its third fiscal quarter ended September
7, 2012. The Company is a lodging-focused real estate investment
trust that owns a portfolio of twenty-six premium hotels in North America.
Recent Developments
- Sale of the Westin Atlanta Perimeter North :
On October 3, 2012, the Company sold the
non-core 372-room Westin Atlanta Perimeter North.
Third Quarter 2012 Highlights
- Revenue Growth : The Company's Pro Forma
Revenue grew 6.2% from the comparable period in 2011.
- RevPAR Growth :
The Company's Pro Forma RevPAR increased to $139.44,
representing 3.4% growth from the comparable period in 2011.
- Hotel Adjusted EBITDA Margin : The Company's
Pro Forma Hotel Adjusted EBITDA margin improved to 27.86%, an increase
of 59 basis points from the comparable period in 2011.
- Adjusted EBITDA : The Company's
Adjusted EBITDA was $46.0 million, an
increase of 10% from the comparable period in 2011.
- Adjusted FFO : The Company's Adjusted FFO
was $34.4 million and Adjusted FFO per
diluted share was $0.18.
- Dividends : The Company declared a quarterly
dividend of $0.08 per share during the
third quarter.
Mark W. Brugger, Chief
Executive Officer of DiamondRock Hospitality Company, stated, "The
Company's results for the third quarter show solid revenue growth of
over 6 percent and are consistent with our prior expectations. We are
particularly pleased with the profit margin expansion on 3.4% RevPAR
growth as many of our asset management initiatives for cost containment
were fully implemented. Additionally, we continued to execute on our
strategy of improving portfolio quality with our latest disposition,
the sale of the non-core Westin Atlanta Perimeter North. Our total
dispositions for the year now exceed $300
million."
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," "Pro Forma Revenue" and "Pro Forma Hotel Adjusted EBITDA
Margin" assume all of the Company's 27 hotels owned as of September 7, 2012 were owned since January 1, 2011.
For the third quarter beginning June
16, 2012 and ending September 7, 2012,
the Company reported the following:
- Pro Forma RevPAR growth of 3.4% and Pro Forma Hotel
Adjusted EBITDA margin expansion of 59 basis points compared to the
comparable period in 2011.
- Pro Forma Revenue growth of 6.2% to $199.6
million compared to $188.0 million
for the comparable period in 2011, which includes amounts reported in
discontinued operations.
- Adjusted EBITDA of $46.0 million
compared to $41.7 million for the
comparable period in 2011.
- Adjusted FFO of $34.4 million
and Adjusted FFO per diluted share of $0.18
based on 187.0 million diluted weighted average shares compared to $26.2 million and $0.16,
respectively, for the comparable period in 2011.
- Net loss of $44.8 million
(or $0.24 per diluted share) compared to
a net loss of $1.0 million (or $0.01 per diluted share) for the comparable
period in 2011.
The Company's third quarter Pro Forma RevPAR growth of 3.4%
(from $134.82 to $139.44) was driven by
a 4.3% increase in the average daily rate (from $163.22
to $170.20) offset by a 0.7 percentage
point decrease in occupancy (from 82.6% to 81.9%). The third quarter
Pro Forma Hotel Adjusted EBITDA margin increased 59 basis points (from
27.27% to 27.86%) from the comparable period in 2011.
For the Company's period of ownership, third quarter RevPAR
growth was 3.5% driven by a 4.4% increase in the average daily rate
offset by a 0.7 percentage point decrease in occupancy and the third
quarter Hotel Adjusted EBITDA margin increased 69 basis points from the
comparable period in 2011.
For the period from January 1, 2012
to September 7, 2012, the Company
reported the following:
- Pro Forma RevPAR growth of 5.9% and Pro Forma Hotel
Adjusted EBITDA margin expansion of 93 basis points compared to the
comparable period in 2011.
- Pro Forma Revenue growth of 7.4% to $542.3
million compared to $504.9 million
for the comparable period in 2011, which includes amounts reported in
discontinued operations.
- Adjusted EBITDA of $117.4 million
compared to $101.7 million for the
comparable period in 2011.
- Adjusted FFO of $83.7 million
and Adjusted FFO per diluted share of $0.48
based on 174.2 million diluted weighted average shares compared to $63.6 million and $0.38,
respectively, for the comparable period in 2011.
- Net loss of $33.2 million
(or $0.19 per diluted share) compared to
a net loss of $12.6 million (or $0.08 per diluted share) for the comparable
period in 2011.
The Company's year-to-date Pro Forma RevPAR growth of 5.9%
(from $123.60 to $130.94) was driven by
a 4.0% increase in the average daily rate (from $162.47
to $168.96) and a 1.4 percentage point
increase in occupancy (from 76.1% to 77.5%). The Company's year-to-date
Pro Forma Hotel Adjusted EBITDA margin increased 93 basis points (from
25.29% to 26.22%) from the comparable period in 2011.
For the Company's period of ownership, year-to-date RevPAR
growth was 6.1% driven by a 3.9% increase in the average daily rate and
a 1.7 percentage point increase in occupancy and the year-to-date Hotel
Adjusted EBITDA margin increased 101 basis points from the comparable
period in 2011.
Blackstone Portfolio Update
The hotels acquired from affiliates of Blackstone Real Estate
Partners VI ("Blackstone") on July 12, 2012
achieved strong growth during the third quarter. Specific highlights
include:
- Hilton Boston Downtown: The hotel's third
quarter RevPAR of $210.98 grew 9.7% with
Hotel Adjusted EBITDA margin expansion of 138 basis points from the
comparable period of 2011. During the fourth quarter, the Company
expects to replace the current manager, WHM, LLC, with Davidson Hotel
Company ("Davidson"). Davidson, a nationally recognized third party
operator, expects to improve the hotel's market positioning through the
implementation of aggressive revenue management and marketing
strategies. Additionally, the Company expects to engage a broker during
the fourth quarter to lease 4,000 square feet of currently unoccupied
desirable retail space.
- Westin San Diego: The hotel's third quarter
RevPAR of $135.48 grew 9.8% from the
comparable period of 2011. We expect the hotel to benefit from the
opening of the half-million square foot U.S. Federal Courthouse, which
is scheduled for late 2012. In total, there is over $1 billion in new development within 2 blocks
of the hotel slated to come on line over the next 4 years. In addition,
the Company expects to improve the hotel's position in the market
through a comprehensive capital investment program.
- Hilton Burlington: The hotel's third quarter
RevPAR of $162.91 grew 16.3% from the
comparable period of 2011. The hotel achieved Hotel Adjusted EBITDA
margin expansion of 755 basis points from the comparable period of
2011. The hotel expects to achieve strong growth in 2013, with 2013
group booking pace up over 35% from the comparable period of 2012.
- Westin Washington D.C.: The Washington D.C. hotel market has been
challenging in 2012, including the third quarter. The hotel's third
quarter RevPAR of $142.31 was 7.7% below
the comparable period of 2011 and the hotel continues to lose market
share because of its tired condition. The Company is planning a
comprehensive capital investment at the hotel that is expected to
reposition this well-located hotel.
The Company has underwritten significant upside potential at
these hotels, partially through the investment of capital to improve
and reposition the assets in order to capture higher-rated group and
business transient customers. In the aggregate, the Company plans to
invest $35 million in the four hotels
over the next two years. The Company is evaluating the optimal timing
and scope of the capital investment program, but currently expects to
complete the capital investment program for the Westin Washington D.C.
during the middle of 2013 and the capital investment programs for the
Hilton Boston and Hilton Burlington in early 2014. The Company is
evaluating whether to complete the capital investment program for the
Westin San Diego in 2013 or 2014.
Sale of Westin Atlanta Perimeter North
On October 3, 2012, the Company
sold the 372-room Westin Atlanta Perimeter North for a contractual
sales price of $39.6 million to a joint
venture among Carey Watermark Investors Incorporated, The Arden Group,
Inc. and Marcus Hotels & Resorts. Under the Starwood Hotels &
Resorts franchise agreement, the hotel is subject to a property
improvement plan ("PIP") and the purchaser's total investment in the
hotel, after completing the PIP, will be approximately $57 million. The Company used the net sale
proceeds to reduce the amount outstanding on its senior unsecured
credit facility. The Company was advised on the sale by Jones Lang
LaSalle Hotels. The hotel generated $2.5 million
of Hotel Adjusted EBITDA during the year ended December
31, 2011.
Impairment of Hotels
During the quarter ended September 7, 2012, the Company
reviewed the carrying value of the Oak Brook Hills Marriott Resort and
recorded an impairment of $30.4 million
to reduce the carrying value of the hotel to the current estimate of
fair value. Additionally, the Company recorded an impairment of
approximately $14.7 million on the
Westin Atlanta Perimeter North to reduce the carrying value of the
hotel to the estimated net sales proceeds. The impairment and the
results of operations of the hotel are included in discontinued
operations.
Lexington Hotel New York Update
During 2012, the Company signed a franchise agreement with
Marriott to convert the Lexington Hotel to be a member of Marriott's
Autograph Collection upon satisfactory completion of a $32 to $34 million capital improvement plan,
net of the expected financial contribution from Marriott. The
renovation will be comprehensive and touch every aspect of the hotel
that the guest experiences. The Company terminated its franchise
agreement with Radisson on September 15, 2012
and the hotel is operating as an independent hotel until the capital
improvement plan is completed in 2013.
Allerton Update
The Allerton Hotel bankruptcy proceedings are ongoing. The
Company objected to the Debtor's Plan of Reorganization and a hearing
on the Plan commenced on July 23, 2012
and is scheduled to resume in late October. The Company expects the
final resolution of this matter in the second or third quarter of 2013.
Since acquiring the $69 million note for
$60 million, the Company has
received $6.7 million in interest
payments and incurred approximately $4.5 million
in legal fees in connection with this matter.
Dividends
The Company's Board of Directors declared a quarterly dividend
of $0.08 per share to stockholders of
record as of September 7, 2012. The
dividend was paid on September 19, 2012.
Capital Expenditures
In 2012, the Company expects to spend approximately $50 million on capital improvements at its
hotels, $20 million of which is expected
to be funded from corporate cash. The Company has spent approximately $26.4 million for capital improvements as of September 7, 2012. The most significant
projects for 2012 include the following:
- Conrad Chicago :
The Company expects to spend $3.5
million to add 4,100 square feet of new meeting space,
reposition the food and beverage outlets and re-concept the hotel
lobby. The addition of the new meeting space was completed in August 2012 and the lobby repositioning is
scheduled for the first quarter of 2013.
- Renaissance Worthington
: The Company is currently undertaking a
comprehensive restoration of the concrete facade of the hotel. This $1.2 million project was originally scheduled
to be completed in two phases during 2012 and 2013. The Company now
expects to substantially complete the restoration in 2012.
- Marriott Atlanta Alpharetta : The
Company recently completed a $2.4 million
renovation of the guest rooms at the hotel.
- Frenchman's Reef : The Company
expects to spend $1.6 million to
renovate the premium Morning Star guest rooms during the fourth quarter
and upgrade the boat dock in early 2013.
Renovation Disruption
The Company is currently planning renovations of several of
its hotel during 2013. A description of the most significant capital
projects planned for 2013 are as follows:
- Lexington Hotel New York : In
connection with executing the rebranding strategy at the Lexington
Hotel, the Company is currently planning a comprehensive renovation of
the hotel, including the lobby, corridors, guest rooms and guest
bathrooms. The renovation is expected to cost approximately $32 to $34 million, net, and is expected to be
completed by the middle of 2013.
- Manhattan Courtyards : The Company
expects to renovate 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 will also include the public space and the addition of
five new guest rooms. The renovations are expected to cost
approximately $10 million, of which
approximately $7 million will be funded
from existing reserves. The renovations will be substantially complete
in the first quarter of 2013.
- Westin Washington D.C. : The Company
expects to undertake a comprehensive renovation during 2013 to
reposition the hotel to capture higher-rated business, leisure and
group customers. The renovation scope will touch every aspect of the
guest experience, including the guest rooms, corridors, meeting space
and the arrival and restaurant experience.
The Company is currently finalizing the coordination of each
of these renovation projects. The Company plans to schedule each of the
renovations during time periods that will minimize the profit
disruption. However, profit disruption is anticipated during 2013, and
based on the preliminary scope and timing estimates, the Company
expects renovation disruption of $7 to $10
million of Hotel Adjusted EBITDA during the year ended December 31, 2013.
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. The Company maintains balance
sheet flexibility with no near term debt maturities, capacity on its
senior unsecured credit facility and 15 of its 26 hotels unencumbered
by mortgage debt. DiamondRock remains committed to its core strategy of
maintaining a simple capital structure with conservative leverage.
As of September 7, 2012, the
Company had $21.6 million of
unrestricted cash on hand and approximately $1.0
billion of total debt, which consists of $898.5
million of property-specific mortgage debt with no near-term
maturities and $120 million outstanding
on the Company's senior unsecured credit facility. Subsequent to the
end of the quarter, the Company used the proceeds from the sale of the
Westin Atlanta North to repay $35 million
on the credit facility. The Company expects to end the year with
approximately $50 million outstanding on
the 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 includes the Company's 26 hotels and assumes that they
were owned since January 1, 2011.
The Company's 2012 Adjusted EBITDA and Adjusted FFO guidance
includes $8.4 million of Adjusted EBITDA
and $6.0 million of Adjusted FFO for the
period of ownership of the four hotels sold in 2012 and excludes cash
interest payments and legal fees related to the Allerton Hotel.
The Company is revising its full year 2012 guidance to
incorporate the following:
- Sale of the Westin Atlanta Perimeter North: The
sale of the hotel eliminates approximately $1.0
million of Hotel Adjusted EBITDA from the Company's fourth
quarter.
- September Results: September results were
negatively impacted by the timing of Rosh
Hashanah and Yom Kippur. In addition, the Company's portfolio in
New York City was impacted
by lower than expected attendance at the United Nations General
Assembly. In addition, the softness in September demand has added
incremental risk to the fourth quarter results of the Lexington Hotel
due to the hotel currently operating as an independent hotel.
-
Frenchman's Reef: Recent increases in
airfare prices to the USVI as a result of the limitation of government
subsidies have contributed to softening demand at the hotel. In
addition, the hotel will undergo unexpected maintenance during the
fourth quarter. These items have resulted in incremental risk to the
hotel's fourth quarter forecast.
-
Washington D.C.: The Company expects
continued softness in the Washington D.C.
market as a result of lower transient and group demand leading up to
the November election.
-
Worthington Disruption: The facade project
at the Renaissance Worthington was originally scheduled to be completed
in two phases during 2012 and 2013. The Company now expects to complete
the most disruptive work during 2012. Moving the second phase into 2012
will create incremental disruption of approximately $1.0 million, but will eliminate the potential
disruption in 2013.
Based on its outlook, the Company now expects the following
full year 2012 results:
- Pro Forma Room Revenue growth of 6 percent to 7 percent;
- Pro Forma RevPAR growth of 5 percent to 6 percent;
- Adjusted EBITDA of $184 million to
$190 million;
- Adjusted FFO of $133 million to
$137 million, which assumes an income tax benefit ranging from $4.4 million to $2.4 million; and
- Adjusted FFO per share of $0.74 to
$0.76 based on 180.8 million diluted weighted average shares.
In addition, the Company expects the following results for the
fourth fiscal quarter:
- Pro Forma Room Revenue growth of 5 percent to 7 percent;
- Pro Forma RevPAR growth of 3 percent to 5 percent;
- Adjusted EBITDA of $67 million to
$73 million;
- Adjusted FFO of $49 million to $53
million, which assumes an income tax expense ranging from $1.4 million to $3.4 million; and
- Adjusted FFO per share of $0.25 to
$0.27 based on 195.7 million diluted weighted average shares.
Earnings Call
The Company will host a conference call to discuss its third
quarter results on Friday, October 12, 2012,
at 10:00 a.m. Eastern Time (ET). To
participate in the live call, investors are invited to dial
866-730-5771 (for domestic callers) or 857-350-1595 (for international
callers). The participant passcode is 36057575. 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 premium hotel properties.
The Company owns 26 premium hotels with approximately 11,500 rooms and
holds one senior mortgage loan. The Company's hotels are generally
operated under globally recognized brands such as Hilton, Marriott, and Westin. For further
information, please visit DiamondRock Hospitality Company's website at www.drhc.com.
This press release contains forward-looking statements
within the meaning of federal securities laws and regulations. These
forward-looking statements are identified by their use of terms and
phrases such as "believe," "expect," "intend," "project," "forecast,"
"plan" and other similar terms and phrases, including references to
assumptions and forecasts of future results. Forward-looking statements
are not guarantees of future performance and involve known and unknown
risks, uncertainties and other factors which may cause the actual
results to differ materially from those anticipated at the time the
forward-looking statements are made. These risks include, but are not
limited to: national and local economic and business conditions,
including the potential for additional terrorist attacks, that will
affect occupancy rates at the Company's hotels and the demand for hotel
products and services; operating risks associated with the hotel
business; risks associated with the level of the Company's
indebtedness; relationships with property managers; the ability to
compete effectively in areas such as access, location, quality of
accommodations and room rate structures; changes in travel patterns,
taxes and government regulations which influence or determine wages,
prices, construction procedures and costs; risks associated with the
bankruptcy proceedings on the Allerton Hotel; risks associated with the
development of a hotel by a third-party developer; risks associated
with the rebranding of the Lexington Hotel New York; and other risk
factors contained in the Company's filings with the Securities and
Exchange Commission. Although the Company believes the expectations
reflected in such forward-looking statements are based upon reasonable
assumptions, it can give no assurance that the expectations will be
attained or that any deviation will not be material. All information in
this release is as of the date of this release, and the Company
undertakes no obligation to update any forward-looking statement to
conform the statement to actual results or changes in the Company's
expectations.
Reporting Periods for Statement of Operations
The results reported in the Company's consolidated statements
of operations are based on results of its hotels reported by hotel
managers. The Company's hotel managers use different reporting periods.
Marriott International, the manager of most of the Company's
properties, uses a fiscal year ending on the Friday closest to December 31 and reports 12 weeks of operations
for the first three quarters and 16 or 17 weeks for the fourth quarter
of the year for its domestic managed hotels. In contrast, Marriott
International for its non-domestic hotels (including Frenchman's Reef),
Davidson Hotel Company, manager of the Westin Atlanta North, Vail
Resorts, manager of the Vail Marriott, Hilton Hotels Corporation,
manager of the Conrad Chicago and the Hilton Minneapolis, Westin Hotel
Management, L.P., manager of the Westin Boston Waterfront, Alliance
Hospitality Management, manager of the Hilton Garden Inn Chelsea, Sage
Hospitality, manager of the JW Marriott Denver Cherry Creek and the
Courtyard Denver, Highgate Hotels, manager of the Lexington Hotel,
Interstate Hotels and Resorts, manager of the Westin Washington D.C.,
the Westin San Diego and the Hilton Burlington, and WHM, LLC, manager
of the Hilton Boston report results on a monthly basis. Additionally,
the Company, as a REIT, is required by U.S. federal tax laws to report
results on a calendar year basis. As a result, the Company has adopted
the reporting periods used by Marriott International for its domestic
hotels, except that the fiscal year always ends on December 31 to comply with REIT rules. The
first three fiscal quarters end on the same day as Marriott
International's fiscal quarters but the fourth quarter ends on December 31 and full year results, as reported
in the statement of operations, always include the same number of days
as the calendar year.
Two consequences of the reporting cycle the Company has
adopted are: (1) quarterly start dates will usually differ between
years, except for the first quarter which always commences on January 1, and (2) the first and fourth
quarters of operations and year-to-date operations may not include the
same number of days as reflected in prior years.
While the reporting calendar the Company adopted is more
closely aligned with the reporting calendar used by the manager of most
of its properties, one final consequence of the calendar is the Company
is unable to report any results for Frenchman's Reef, Westin Atlanta
North, Vail Marriott, Conrad Chicago, Westin Boston Waterfront, Hilton
Minneapolis, Hilton Garden Inn Chelsea, JW Marriott Denver Cherry
Creek, Courtyard Denver, Lexington Hotel, Westin Washington D.C., the
Westin San Diego and the Hilton Burlington or the Hilton Boston for the
month of operations that ends after its fiscal quarter-end because none
of Vail Resorts, Davidson Hotel Company, Hilton Hotels Corporation,
Westin Hotel Management, L.P., Alliance Hospitality Management, Sage
Hospitality, Highgate Hotels, Interstate Hotels and Resorts, WHM, LLC
and Marriott International (for international hotels) make mid-month
results available. As a result, the quarterly results of operations
include results from these hotels as follows: first quarter (January
and February), second quarter (March to May), third quarter (June to
August) and fourth quarter (September to December). While this does not
affect full-year results, it does affect the reporting of quarterly
results.
Marriott International announced preliminary plans to change
their current fiscal year to a calendar year effective January 1, 2013. Marriott International
expects to make the fiscal year change on a prospective basis and will
not adjust the prior year operating results. The change to Marriott's
fiscal year will not impact the Company's full year results, which are
currently reported on a calendar year. However, the preliminary change
will impact the prior year comparability of each of the Company's 2013
fiscal quarters.
DIAMONDROCK
HOSPITALITY COMPANY
CONSOLIDATED BALANCE SHEETS
As
of September 7, 201 2 and December 31, 2011
(in
thousands, except share and per share amounts)
|
|
September
7, 2012
|
|
December
31, 2011
|
|
(Unaudited)
|
|
|
ASSETS
|
|
|
|
Property
and equipment, at cost
|
$
|
3,089,494
|
|
|
$
|
2,667,682
|
|
Less:
accumulated depreciation
|
(482,641)
|
|
|
(433,178)
|
|
|
2,606,853
|
|
|
2,234,504
|
|
Assets
held for sale
|
41,819
|
|
|
263,399
|
|
Deferred
financing costs, net
|
8,261
|
|
|
5,869
|
|
Restricted
cash
|
60,263
|
|
|
53,871
|
|
Due
from hotel managers
|
70,569
|
|
|
50,728
|
|
Note
receivable
|
54,237
|
|
|
54,788
|
|
Favorable
lease assets, net
|
40,746
|
|
|
43,285
|
|
Prepaid
and other assets
|
68,890
|
|
|
65,900
|
|
Cash
and cash equivalents
|
21,604
|
|
|
26,291
|
|
Total
assets
|
$
|
2,973,242
|
|
|
$
|
2,798,635
|
|
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
|
|
|
Liabilities:
|
|
|
|
Mortgage
debt
|
$
|
898,471
|
|
|
$
|
762,933
|
|
Mortgage
debt of assets held for sale
|
—
|
|
|
180,000
|
|
Senior
unsecured credit facility
|
120,000
|
|
|
100,000
|
|
Total
debt
|
1,018,471
|
|
|
1,042,933
|
|
|
|
|
|
Deferred
income related to key money, net
|
24,414
|
|
|
24,593
|
|
Unfavorable
contract liabilities, net
|
80,619
|
|
|
81,914
|
|
Due to
hotel managers
|
49,115
|
|
|
41,676
|
|
Liabilities
of assets held for sale
|
1,735
|
|
|
3,805
|
|
Dividends
declared and unpaid
|
15,871
|
|
|
13,594
|
|
Accounts
payable and accrued expenses
|
81,615
|
|
|
87,963
|
|
Total
other liabilities
|
253,369
|
|
|
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; 400,000,000 shares authorized;
195,141,934 and 167,502,359 shares issued and outstanding at
September 7, 2012 and December 31, 2011, respectively
|
1,951
|
|
|
1,675
|
|
Additional
paid-in capital
|
1,983,404
|
|
|
1,708,427
|
|
Accumulated
deficit
|
(283,953)
|
|
|
(207,945)
|
|
Total
stockholders' equity
|
1,701,402
|
|
|
1,502,157
|
|
Total
liabilities and stockholders' equity
|
$
|
2,973,242
|
|
|
$
|
2,798,635
|
|
DIAMONDROCK
HOSPITALITY COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS
For
the Fiscal Quarters Ended September 7, 2012 and September 9,
2011 and
the
Periods from January 1, 2012 to September 7, 2012 and January 1, 2011
to September 9, 2011
(in
thousands, except share and per share amounts)
|
|
Fiscal
Quarter Ended
|
|
Period
From
|
|
|
|
|
|
January
1, 2012 to
|
|
January
1, 2011 to
|
|
September
7, 2012
|
|
September
9, 2011
|
|
September
7, 2012
|
|
September
9, 2011
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
Revenues:
|
|
|
|
|
|
|
|
Rooms
|
$
|
132,578
|
|
|
$
|
111,984
|
|
|
$
|
338,043
|
|
|
$
|
278,215
|
|
Food
and beverage
|
40,791
|
|
|
36,676
|
|
|
117,415
|
|
|
105,379
|
|
Other
|
10,504
|
|
|
8,177
|
|
|
27,787
|
|
|
20,442
|
|
Total
revenues
|
183,873
|
|
|
156,837
|
|
|
483,245
|
|
|
404,036
|
|
Operating
Expenses:
|
|
|
|
|
|
|
|
Rooms
|
35,428
|
|
|
30,141
|
|
|
92,386
|
|
|
75,043
|
|
Food
and beverage
|
30,008
|
|
|
26,170
|
|
|
85,731
|
|
|
76,177
|
|
Management
fees
|
5,744
|
|
|
4,551
|
|
|
15,313
|
|
|
13,488
|
|
Other
hotel expenses
|
64,098
|
|
|
55,772
|
|
|
171,131
|
|
|
145,887
|
|
Depreciation
and amortization
|
22,612
|
|
|
20,577
|
|
|
62,802
|
|
|
57,170
|
|
Impairment
losses
|
30,376
|
|
|
—
|
|
|
30,844
|
|
|
—
|
|
Hotel
acquisition costs
|
8,314
|
|
|
445
|
|
|
10,345
|
|
|
2,604
|
|
Corporate
expenses
|
6,227
|
|
|
6,453
|
|
|
15,711
|
|
|
14,900
|
|
Total
operating expenses
|
202,807
|
|
|
144,109
|
|
|
484,263
|
|
|
385,269
|
|
Operating
(loss) profit
|
(18,934)
|
|
|
12,728
|
|
|
(1,018)
|
|
|
18,767
|
|
Other
Expenses (Income):
|
|
|
|
|
|
|
|
Interest
income
|
(60)
|
|
|
(24)
|
|
|
(278)
|
|
|
(579)
|
|
Interest
expense
|
12,732
|
|
|
11,281
|
|
|
36,710
|
|
|
30,114
|
|
Gain
on early extinguishment of debt
|
—
|
|
|
—
|
|
|
(144)
|
|
|
—
|
|
Total
other expenses
|
12,672
|
|
|
11,257
|
|
|
36,288
|
|
|
29,535
|
|
(Loss)
income from continuing
operations
before income taxes
|
(31,606)
|
|
|
1,471
|
|
|
(37,306)
|
|
|
(10,768)
|
|
Income
tax benefit (expense)
|
916
|
|
|
(2,239)
|
|
|
4,992
|
|
|
(1,646)
|
|
Loss
from continuing operations
|
(30,690)
|
|
|
(768)
|
|
|
(32,314)
|
|
|
(12,414)
|
|
Loss
from discontinued operations,
net of
income taxes
|
(14,089)
|
|
|
(247)
|
|
|
(905)
|
|
|
(199)
|
|
Net
loss
|
$
|
(44,779)
|
|
|
$
|
(1,015)
|
|
|
$
|
(33,219)
|
|
|
$
|
(12,613)
|
|
Loss
per share:
|
|
|
|
|
|
|
|
Continuing
operations
|
$
|
(0.16)
|
|
|
$
|
(0.01)
|
|
|
$
|
(0.19)
|
|
|
$
|
(0.08)
|
|
Discontinued
operations
|
(0.08)
|
|
|
(0.00)
|
|
|
(0.00)
|
|
|
(0.00)
|
|
Basic
and diluted loss per share
|
$
|
(0.24)
|
|
|
$
|
(0.01)
|
|
|
$
|
(0.19)
|
|
|
$
|
(0.08)
|
|
Non-GAAP Financial Measures
We use the following non-GAAP financial measures that we
believe are useful to investors as key measures of our operating
performance: EBITDA, Adjusted EBITDA, FFO and Adjusted FFO. These
measures should not be considered in isolation or as a substitute for
measures of performance in accordance with GAAP. EBITDA, Adjusted
EBITDA, FFO and Adjusted FFO, as calculated by us, may not be
comparable to other companies that do not define such terms exactly as
the Company.
EBITDA and FFO
EBITDA represents net (loss) income excluding: (1) interest
expense; (2) provision for income taxes, including income taxes
applicable to sale of assets; and (3) depreciation and amortization. We
believe EBITDA is useful to an investor in evaluating our operating
performance because it helps investors evaluate and compare the results
of our operations from period to period by removing the impact of our
capital structure (primarily interest expense) and our asset base
(primarily depreciation and amortization) from our operating results.
In addition, covenants included in our indebtedness use EBITDA as a
measure of financial compliance. We also use EBITDA as one measure in
determining the value of hotel acquisitions and dispositions.
The Company computes FFO in accordance with standards
established by NAREIT, which defines FFO as net (loss) income
determined in accordance with GAAP, excluding gains or losses from
sales of properties and impairment losses, plus depreciation and
amortization. The Company believes that the presentation of FFO
provides useful information to investors regarding its operating
performance because it is a measure of the Company's operations without
regard to specified non-cash items, such as real estate depreciation
and amortization and gain or loss on sale of assets. The Company also
uses FFO as one measure in assessing its results.
Adjustments to EBITDA and FFO
We adjust FFO and EBITDA when evaluating our performance
because we believe that the exclusion of certain additional recurring
and non-recurring items described below provides useful supplemental
information to investors regarding our ongoing operating performance
and that the presentation of Adjusted EBITDA and Adjusted FFO, when
combined with GAAP net income, EBITDA and FFO, is beneficial to an
investor's complete understanding of our operating performance. We
adjust EBITDA and FFO for the following items:
- Non-Cash Ground Rent: We exclude the non-cash
expense incurred from straight lining the rent from our ground lease
obligations and the non-cash amortization of our favorable lease
assets.
- Non-Cash Amortization of Unfavorable Contract Liabilities:
We exclude the non-cash amortization of the unfavorable contract
liabilities recorded in conjunction with our acquisitions of the
Bethesda Marriott Suites, the Chicago Marriott Downtown, the
Renaissance Charleston and the Lexington Hotel New York. The
amortization of the unfavorable contract liabilities does not reflect
the underlying operating performance of our hotels.
- Cumulative Effect of a Change in Accounting Principle:
Infrequently, the Financial Accounting Standards Board (FASB)
promulgates new accounting standards that require the consolidated
statement of operations to reflect the cumulative effect of a change in
accounting principle. We exclude the effect of these one-time
adjustments because they do not reflect its actual performance for that
period.
- Gains from Early Extinguishment of Debt: We exclude
the effect of gains recorded on the early extinguishment of debt
because we believe they do not accurately reflect the underlying
performance of the Company.
- Acquisition Costs: We exclude acquisition
transaction costs expensed during the period because we believe they do
not reflect the underlying performance of the Company.
- Allerton Loan : In
2011, we included cash payments received on the senior loan secured by
the Allerton Hotel in Adjusted EBITDA and Adjusted FFO. GAAP requires
us to record the cash received from the borrower as a reduction of our
basis in the mortgage loan due to the uncertainty over the timing and
amount of cash payments on the loan. Beginning in 2012, due to the
uncertainty of the timing of the bankruptcy resolution, we exclude both
cash interest payments received from the borrower and the legal costs
incurred as a result of the bankruptcy proceedings from our calculation
of Adjusted EBITDA and Adjusted FFO. We have not adjusted our 2011
Adjusted EBITDA and Adjusted FFO calculations to reflect this change in
presentation.
- Other Non-Cash and /or Unusual Items: We exclude the
effect of certain non-cash and/or unusual items because we believe they
do not reflect the underlying performance of the Company. In 2012, we
excluded the franchise termination fee paid to Radisson because we
believe that including it would not be consistent with reflecting the
ongoing performance of the hotel. In 2011, we excluded the accrual for
net key money repayment to Hilton in
conjunction with entering into a termination agreement for the Conrad
Chicago because we believe that including it was not consistent with
reflecting the ongoing performance of the hotel.
In addition, to derive Adjusted EBITDA we exclude gains or
losses on dispositions and impairment losses because we believe that
including them in EBITDA is not consistent with reflecting the ongoing
performance of our hotels. Additionally, the gain or loss on
dispositions and impairment losses represent either accelerated
depreciation or excess depreciation in previous periods, and
depreciation is excluded from EBITDA.
In addition, to derive Adjusted FFO we exclude any fair value
adjustments to debt instruments. Specifically, we exclude the impact of
the non-cash amortization of the debt premium recorded in conjunction
with the acquisition of the JW Marriott Denver at Cherry Creek and fair market value
adjustments to the Company's interest rate cap agreement.
The following tables are reconciliations of our U.S. GAAP net
income (loss) to EBITDA and Adjusted EBITDA (in thousands):
|
Fiscal
Quarter Ended
|
|
Period
from
|
|
September
7,
|
|
September
9,
|
|
January
1, 2012
to
September 7,
|
|
January
1, 2011
to
September 9,
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
Net
loss
|
$
|
(44,779)
|
|
|
$
|
(1,015)
|
|
|
$
|
(33,219)
|
|
|
$
|
(12,613)
|
|
Interest
expense (1)
|
12,732
|
|
|
13,605
|
|
|
39,007
|
|
|
37,088
|
|
Income
tax (benefit) expense (2)
|
(1,063)
|
|
|
1,798
|
|
|
(4,803)
|
|
|
795
|
|
Real
estate depreciation and amortization (3)
|
23,060
|
|
|
23,801
|
|
|
64,149
|
|
|
66,835
|
|
EBITDA
|
(10,050)
|
|
|
38,189
|
|
|
65,134
|
|
|
92,105
|
|
Non-cash
ground rent
|
1,515
|
|
|
1,658
|
|
|
4,621
|
|
|
4,878
|
|
Non-cash
amortization of unfavorable contract
liabilities
|
(432)
|
|
|
(432)
|
|
|
(1,296)
|
|
|
(1,284)
|
|
(Loss)
gain on sale of hotel properties
|
476
|
|
|
—
|
|
|
(9,541)
|
|
|
—
|
|
Gain
on early extinguishment of debt
|
—
|
|
|
—
|
|
|
(144)
|
|
|
—
|
|
Acquisition
costs
|
8,314
|
|
|
445
|
|
|
10,345
|
|
|
2,604
|
|
Allerton
loan interest payments
|
—
|
|
|
1,099
|
|
|
—
|
|
|
1,704
|
|
Allerton
loan legal fees
|
1,106
|
|
|
—
|
|
|
2,017
|
|
|
—
|
|
Franchise
termination fee
|
—
|
|
|
—
|
|
|
750
|
|
|
—
|
|
Accrual
for net key money repayment
|
—
|
|
|
(864)
|
|
|
—
|
|
|
—
|
|
Litigation
settlement
|
—
|
|
|
1,650
|
|
|
—
|
|
|
1,650
|
|
Impairment
losses
|
45,066
|
|
|
—
|
|
|
45,534
|
|
|
—
|
|
Adjusted
EBITDA
|
$
|
45,995
|
|
|
$
|
41,745
|
|
|
$
|
117,420
|
|
|
$
|
101,657
|
|
(1)
|
Amounts
include interest expense included in discontinued operations as
follows: $2.3 million in the fiscal quarter ended September 9, 2011;
$2.3 million in the period from January 1, 2012 to September 7, 2012;
and $7.0 million in the period from January 1, 2011 to September 9,
2011.
|
(2)
|
Amounts
include income tax (expense) benefit included in discontinued
operations as follows: $0.4 million in the quarter ended September 9,
2011; $0.1 million in the quarter ended September 7, 2012; ($0.2
million) in the period from January 1, 2012 to September 7, 2012; and
$0.8 million in the period from January 1, 2011 to September 9, 2011.
|
(3)
|
Amounts
include depreciation expense included in discontinued operations as
follows: $3.2 million in the quarter ended September 7, 2011; $0.4
million in the quarter ended September 7, 2012; $1.3 million in the
period from January 1, 2012 to September 7, 2012 and $9.7 million in
the period from January 1, 2011 to September 9, 2011.
|
|
Guidance
|
|
Quarter
4, 2012
|
|
Full
Year 2012
|
|
Low
End
|
|
High
End
|
|
Low
End
|
|
High
End
|
Net
income (loss)
|
$
|
14,570
|
|
|
$
|
17,570
|
|
|
$
|
(17,245)
|
|
|
$
|
(12,245)
|
|
Interest
expense
|
16,500
|
|
|
16,500
|
|
|
55,000
|
|
|
55,000
|
|
Income
tax expense (benefit)
|
1,400
|
|
|
3,400
|
|
|
(4,400)
|
|
|
(2,400)
|
|
Real
estate related depreciation and amortization
|
32,000
|
|
|
33,000
|
|
|
96,000
|
|
|
95,000
|
|
EBITDA
|
64,470
|
|
|
70,470
|
|
|
129,355
|
|
|
135,355
|
|
Non-cash
ground rent
|
1,900
|
|
|
1,900
|
|
|
6,500
|
|
|
6,500
|
|
Non-cash
amortization of unfavorable contract
liabilities
|
(570)
|
|
|
(570)
|
|
|
(1,850)
|
|
|
(1,850)
|
|
Loss
on sales of hotel properties
|
—
|
|
|
—
|
|
|
5,000
|
|
|
5,000
|
|
Gain
on early extinguishment of debt
|
—
|
|
|
—
|
|
|
(144)
|
|
|
(144)
|
|
Acquisition
costs
|
—
|
|
|
—
|
|
|
10,345
|
|
|
10,345
|
|
Allerton
loan legal fees
|
1,200
|
|
|
1,200
|
|
|
3,200
|
|
|
3,200
|
|
Franchise
termination fee
|
—
|
|
|
—
|
|
|
750
|
|
|
750
|
|
Impairment
losses
|
—
|
|
|
—
|
|
|
30,844
|
|
|
30,844
|
|
Adjusted
EBITDA
|
$
|
67,000
|
|
|
$
|
73,000
|
|
|
$
|
184,000
|
|
|
$
|
190,000
|
|
The following tables are reconciliations of our U.S. GAAP net
income (loss) to FFO and Adjusted FFO (in thousands):
|
Fiscal
Quarter Ended
|
|
Period
from
|
|
September
7,
|
|
September
9,
|
|
January
1, 2012
to
September 7,
|
|
January
1, 2011
to
September 9,
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
Net
loss
|
$
|
(44,779)
|
|
|
$
|
(1,015)
|
|
|
$
|
(33,219)
|
|
|
$
|
(12,613)
|
|
Real
estate related depreciation and amortization(1)
|
23,060
|
|
|
23,801
|
|
|
64,149
|
|
|
66,835
|
|
Impairment
losses
|
45,066
|
|
|
—
|
|
|
45,534
|
|
|
—
|
|
Loss
(gain) on sale of hotel properties
|
476
|
|
|
—
|
|
|
(9,541)
|
|
|
—
|
|
FFO
|
23,823
|
|
|
22,786
|
|
|
66,923
|
|
|
54,222
|
|
Non-cash
ground rent
|
1,515
|
|
|
1,658
|
|
|
4,621
|
|
|
4,878
|
|
Non-cash
amortization of unfavorable contract
liabilities
|
(432)
|
|
|
(432)
|
|
|
(1,296)
|
|
|
(1,284)
|
|
Gain
on early extinguishment of debt
|
—
|
|
|
—
|
|
|
(144)
|
|
|
—
|
|
Acquisition
costs
|
8,314
|
|
|
445
|
|
|
10,345
|
|
|
2,604
|
|
Allerton
loan interest payments
|
—
|
|
|
1,099
|
|
|
—
|
|
|
1,704
|
|
Amortization
of debt premium
|
(82)
|
|
|
(134)
|
|
|
(282)
|
|
|
(161)
|
|
Allerton
loan legal fees
|
1,106
|
|
|
—
|
|
|
2,017
|
|
|
—
|
|
Franchise
termination fee
|
—
|
|
|
—
|
|
|
750
|
|
|
—
|
|
Accrual
for net key money repayment
|
—
|
|
|
(864)
|
|
|
—
|
|
|
—
|
|
Litigation
settlement
|
—
|
|
|
1,650
|
|
|
—
|
|
|
1,650
|
|
Fair
value adjustments to debt instruments
|
180
|
|
|
—
|
|
|
781
|
|
|
—
|
|
Adjusted
FFO
|
$
|
34,424
|
|
|
$
|
26,208
|
|
|
$
|
83,715
|
|
|
$
|
63,613
|
|
Adjusted
FFO per share
|
$
|
0.18
|
|
|
$
|
0.16
|
|
|
$
|
0.48
|
|
|
$
|
0.38
|
|
(1)
|
Amounts
include depreciation expense included in discontinued operations as
follows: $3.2 million in the fiscal quarter ended September 9, 2011;
$0.4 million in the quarter ended September 7, 2012; $1.3 million in
the period from January 1, 2012 to September 7, 2012 and $9.7 million
in the period from January 1, 2011 to September 9, 2011.
|
|
Guidance
|
|
Quarter
4, 2012
|
|
Full
Year 2012
|
|
Low
End
|
|
High
End
|
|
Low
End
|
|
High
End
|
Net
income
|
$
|
14,570
|
|
|
$
|
17,570
|
|
|
$
|
(17,245)
|
|
|
$
|
(12,245)
|
|
Real
estate related depreciation and amortization
|
32,000
|
|
|
33,000
|
|
|
96,000
|
|
|
95,000
|
|
Impairment
losses
|
—
|
|
|
—
|
|
|
30,844
|
|
|
30,844
|
|
Loss
on sales of hotel properties
|
—
|
|
|
—
|
|
|
5,000
|
|
|
5,000
|
|
FFO
|
46,570
|
|
|
50,570
|
|
|
114,599
|
|
|
118,599
|
|
Non-cash
ground rent
|
1,900
|
|
|
1,900
|
|
|
6,500
|
|
|
6,500
|
|
Non-cash
amortization of unfavorable contract
liabilities
|
(570)
|
|
|
(570)
|
|
|
(1,850)
|
|
|
(1,850)
|
|
Gain
on early extinguishment of debt
|
—
|
|
|
—
|
|
|
(144)
|
|
|
(144)
|
|
Acquisition
costs
|
—
|
|
|
—
|
|
|
10,345
|
|
|
10,345
|
|
Allerton
loan legal fees
|
1,200
|
|
|
1,200
|
|
|
3,200
|
|
|
3,200
|
|
Franchise
termination fee
|
—
|
|
|
—
|
|
|
750
|
|
|
750
|
|
Fair
value adjustments to debt instruments
|
(100)
|
|
|
(100)
|
|
|
(400)
|
|
|
(400)
|
|
Adjusted
FFO
|
$
|
49,000
|
|
|
$
|
53,000
|
|
|
$
|
133,000
|
|
|
$
|
137,000
|
|
Adjusted
FFO per share
|
$
|
0.25
|
|
|
$
|
0.27
|
|
|
$
|
0.74
|
|
|
$
|
0.76
|
|
Use and Limitations of Non-GAAP Financial Measures
Our management and Board of Directors use EBITDA, Adjusted
EBITDA, FFO and Adjusted FFO to evaluate the performance of our hotels
and to facilitate comparisons between us and other lodging REITs, hotel
owners who are not REITs and other capital intensive companies. The use
of these non-GAAP financial measures has certain limitations. These
non-GAAP financial measures as presented by us, may not be comparable
to non-GAAP financial measures as calculated by other real estate
companies. These measures do not reflect certain expenses or
expenditures that we incurred and will incur, such as depreciation,
interest and capital expenditures. We compensate for these limitations
by separately considering the impact of these excluded items to the
extent they are material to operating decisions or assessments of our
operating performance. Our reconciliations to the most comparable GAAP
financial measures, and our consolidated statements of operations and
cash flows, include interest expense, capital expenditures, and other
excluded items, all of which should be considered when evaluating our
performance, as well as the usefulness of our non-GAAP financial
measures.
These non-GAAP financial measures are used in addition to and
in conjunction with results presented in accordance with GAAP. They
should not be considered as alternatives to operating profit, cash flow
from operations, or any other operating performance measure prescribed
by GAAP. These non-GAAP financial measures reflect additional ways of
viewing our operations that we believe, when viewed with our GAAP
results and the reconciliations to the corresponding GAAP financial
measures, provide a more complete understanding of factors and trends
affecting our business than could be obtained absent this disclosure.
We strongly encourage investors to review our financial information in
its entirety and not to rely on a single financial measure.
Quarterly Pro Forma Financial Information
The following table is presented to provide investors with
selected historical quarterly operating information to include the
operating results for the Company's current portfolio of 26 hotels as
if they were owned since January 1, 2011
and exclude the four hotels sold during 2012.
|
Quarter
4, 2011
|
|
Full
Year 2011
|
|
Quarter
1, 2012
|
|
Quarter
2, 2012
|
|
Quarter
3, 2012
|
RevPAR
|
$
133.03
|
|
$
127.63
|
|
$
108.46
|
|
$
143.07
|
|
$
141.36
|
Revenues
(in thousands)
|
$
249,607
|
|
$
743,592
|
|
$
129,131
|
|
$
205,980
|
|
$
195,506
|
Hotel
Adjusted EBITDA (in thousands)
|
$
69,421
|
|
$
195,484
|
|
$
23,883
|
|
$
61,031
|
|
$
54,388
|
%
of Full Year
|
35.5%
|
|
100.0%
|
|
11.0%
|
|
28.1%
|
|
25.0%
|
Hotel
Adjusted EBITDA Margin
|
27.81%
|
|
26.29%
|
|
18.49%
|
|
29.63%
|
|
27.82%
|
Available
Rooms
|
1,328,157
|
|
4,131,668
|
|
826,498
|
|
1,007,352
|
|
1,006,716
|
Available Rooms
The following table is presented to provide investors with the
Company's total available rooms for its actual ownership period of all
its owned hotels during 2011 and 2012.
|
2011
|
|
2012
|
Quarter
1
|
818,196
|
|
877,702
|
Quarter
2
|
919,886
|
|
907,072
|
Quarter
3
|
988,589
|
|
981,634
|
Quarter
4
|
1,355,863
|
|
1,368,372
|
Full
Year
|
4,082,534
|
|
4,134,780
|
Certain Definitions
In this release, when we discuss "Hotel Adjusted EBITDA," we
exclude from Hotel EBITDA the non-cash expense incurred by the hotels
due to the straight lining of the rent from our ground lease
obligations, the non-cash amortization of our favorable lease assets,
the non-cash amortization of the unfavorable contract liabilities
recorded in conjunction with the acquisitions of the Bethesda Marriott
Suites, the Chicago Marriott Downtown, the Renaissance Charleston and
the Lexington Hotel New York. Hotel EBITDA represents hotel net income
excluding: (1) interest expense; (2) income taxes; and (3) depreciation
and amortization. Hotel Adjusted EBITDA margins are calculated as Hotel
Adjusted EBITDA divided by total hotel revenues. Net debt is calculated
as total debt outstanding less unrestricted cash.
DIAMONDROCK
HOSPITALITY COMPANY
PRO
FORMA HOTEL OPERATING DATA
Schedule
of Property Level Results
(in
thousands)
(unaudited)
|
|
Fiscal
Quarter Ended
|
|
|
Period
From
|
|
|
|
September
7,
2012
|
|
September
9,
2011
|
|
%
Change
|
|
January
1,
2012
to
September
7,
2012
|
|
January
1,
2011
to
September
9,
2011
|
|
%
Change
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
Rooms
|
$
145,152
|
|
$
136,529
|
|
6.3%
|
|
$
383,816
|
|
$
357,683
|
|
7.3%
|
Food
and beverage
|
43,298
|
|
41,512
|
|
4.3%
|
|
127,675
|
|
121,283
|
|
5.3%
|
Other
|
11,186
|
|
9,982
|
|
12.1%
|
|
30,855
|
|
25,890
|
|
19.2%
|
Total
revenues
|
199,636
|
|
188,023
|
|
6.2%
|
|
542,346
|
|
504,856
|
|
7.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
Rooms
departmental expenses
|
38,170
|
|
34,482
|
|
10.7%
|
|
101,971
|
|
93,019
|
|
9.6%
|
Food
and beverage
departmental
expenses
|
31,667
|
|
29,454
|
|
7.5%
|
|
91,945
|
|
86,637
|
|
6.1%
|
Other
direct departmental
|
5,483
|
|
5,380
|
|
1.9%
|
|
15,114
|
|
14,234
|
|
6.2%
|
General
and administrative
|
15,844
|
|
15,212
|
|
4.2%
|
|
44,615
|
|
42,321
|
|
5.4%
|
Utilities
|
7,404
|
|
7,354
|
|
0.7%
|
|
19,703
|
|
19,879
|
|
(0.9%)
|
Repairs
and maintenance
|
8,833
|
|
8,358
|
|
5.7%
|
|
24,641
|
|
23,868
|
|
3.2%
|
Sales
and marketing
|
17,460
|
|
16,460
|
|
6.1%
|
|
46,838
|
|
43,686
|
|
7.2%
|
Base
management fees
|
5,276
|
|
4,999
|
|
5.5%
|
|
14,571
|
|
13,665
|
|
6.6%
|
Incentive
management fees
|
1,140
|
|
1,377
|
|
(17.2%)
|
|
2,893
|
|
2,865
|
|
1.0%
|
Property
taxes
|
8,070
|
|
9,396
|
|
(14.1%)
|
|
24,996
|
|
24,990
|
|
0.0%
|
Ground
rent
|
3,468
|
|
3,385
|
|
2.5%
|
|
10,003
|
|
9,696
|
|
3.2%
|
Other
fixed expenses
|
2,276
|
|
2,071
|
|
9.9%
|
|
6,090
|
|
5,870
|
|
3.7%
|
Total
hotel operating expenses
|
145,091
|
|
137,928
|
|
5.2%
|
|
403,380
|
|
380,730
|
|
5.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
Hotel
EBITDA
|
54,545
|
|
50,095
|
|
8.9%
|
|
138,966
|
|
124,126
|
|
12.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-cash
ground rent
|
1,515
|
|
1,620
|
|
(6.5%)
|
|
4,504
|
|
4,842
|
|
(7.0%)
|
Non-cash
amortization of
unfavorable
contract liabilities
|
(432)
|
|
(432)
|
|
0.0%
|
|
(1,278)
|
|
(1,278)
|
|
0.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
Hotel
Adjusted EBITDA
|
$
55,628
|
|
$
51,283
|
|
8.5%
|
|
$
142,192
|
|
$
127,690
|
|
11.4%
|
N
OTE:
|
|
The
pro forma operating data above includes the operating results for the
Company's portfolio of 27 hotels owned as of September 7, 2012 assuming
they were owned since January 1, 2011 and excludes the operating
results of the three hotels sold on March 23, 2012.
|
Market
Capitalization as of September 7, 2012
(in
thousands, except per share data)
|
|
|
|
Enterprise
Value
|
|
|
|
|
|
Common
equity capitalization (at September 7, 2012 closing price of
$10.02/share)
|
|
$
1,962,786
|
Consolidated
debt
|
|
1,018,471
|
Cash
and cash equivalents
|
|
(21,604)
|
|
|
|
Total
enterprise value
|
|
$
2,959,653
|
|
|
|
|
|
|
Share
Reconciliation
|
|
|
|
|
|
Common
shares outstanding
|
|
195,142
|
|
|
|
Unvested
restricted stock held by management and employees
|
|
692
|
Share
grants under deferred compensation plan held by directors
|
53
|
|
|
|
Combined
shares outstanding
|
|
195,887
|
Debt
Summary as of September 7, 2012
|
(dollars
in thousands)
|
|
|
|
|
|
|
|
|
|
Property
|
|
Interest
Rate
|
|
Term
|
|
Outstanding
Principal
|
|
Maturity
|
|
|
|
|
|
|
|
|
|
Courtyard
Manhattan / Midtown East
|
|
8.810%
|
|
Fixed
|
|
$
42,029
|
|
October
2014
|
Salt
Lake City Marriott Downtown
|
|
5.500%
|
|
Fixed
|
|
29,173
|
|
January
2015
|
Courtyard
Manhattan / Fifth Avenue
|
|
6.480%
|
|
Fixed
|
|
50,355
|
|
June
2016
|
Los
Angeles Airport Marriott
|
|
5.300%
|
|
Fixed
|
|
82,600
|
|
July
2015
|
Frenchman's
Reef Marriott
|
5.440%
|
|
Fixed
|
|
59,014
|
|
August
2015
|
Renaissance
Worthington
|
|
5.400%
|
|
Fixed
|
|
54,985
|
|
July
2015
|
Orlando
Airport Marriott
|
|
5.680%
|
|
Fixed
|
|
57,838
|
|
January
2016
|
Chicago
Marriott Downtown
|
|
5.975%
|
|
Fixed
|
|
212,445
|
|
April
2016
|
Hilton
Minneapolis
|
|
5.464%
|
|
Fixed
|
|
97,547
|
|
April
2021
|
JW
Marriott Denver Cherry Creek
|
|
6.470%
|
|
Fixed
|
|
41,103
|
|
July
2015
|
Lexington
Hotel New York
|
|
LIBOR +
3.00
|
|
Variable
|
|
170,368
|
|
March
2015
|
Debt
premium (1)
|
|
|
|
|
|
1,014
|
|
|
Total
mortgage debt
|
|
|
|
|
|
898,471
|
|
|
|
|
|
|
|
|
|
|
|
Senior
unsecured credit facility
|
|
LIBOR
+ 2.50
|
|
Variable
|
|
120,000
|
|
August
2014
|
Total
debt
|
|
|
|
$
1,018,471
|
|
|
(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 – Third Quarter (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ADR
|
|
Occupancy
|
|
RevPAR
|
|
Hotel
Adjusted EBITDA Margin
|
|
|
3Q
2012
|
3Q
2011
|
B/(W)
|
|
3Q
2012
|
3Q
2011
|
B/(W)
|
|
3Q
2012
|
3Q
2011
|
B/(W)
|
|
3Q
2012
|
3Q
2011
|
B/(W)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Atlanta
Alpharetta
|
|
$
136.26
|
$
133.08
|
2.4%
|
|
64.7%
|
67.2%
|
(2.5%)
|
|
$ 88.19
|
$ 89.46
|
(1.4%)
|
|
23.28%
|
26.65%
|
-337
bps
|
Westin
Atlanta North (2)
|
|
$
106.76
|
$
106.95
|
(0.2%)
|
|
77.8%
|
76.2%
|
1.6%
|
|
$ 83.02
|
$ 81.44
|
1.9%
|
|
30.00%
|
14.10%
|
1590
bps
|
Bethesda
Marriott Suites
|
|
$
153.12
|
$
148.97
|
2.8%
|
|
67.9%
|
61.7%
|
6.2%
|
|
$
103.90
|
$ 91.94
|
13.0%
|
|
23.81%
|
16.69%
|
712 bps
|
Boston
Westin (2)
|
|
$
193.65
|
$
198.48
|
(2.4%)
|
|
88.9%
|
83.1%
|
5.8%
|
|
$
172.08
|
$
164.90
|
4.4%
|
|
26.49%
|
28.75%
|
-226
bps
|
Hilton
Boston Downtown (2)
|
|
$
239.06
|
$
224.48
|
6.5%
|
|
88.3%
|
85.7%
|
2.6%
|
|
$
210.98
|
$
192.39
|
9.7%
|
|
44.10%
|
42.72%
|
138 bps
|
Hilton
Burlington (2)
|
|
$
184.08
|
$
164.05
|
12.2%
|
|
88.5%
|
85.4%
|
3.1%
|
|
$
162.91
|
$
140.07
|
16.3%
|
|
47.57%
|
40.02%
|
755 bps
|
Renaissance
Charleston
|
|
$
170.28
|
$
154.80
|
10.0%
|
|
83.5%
|
86.2%
|
(2.7%)
|
|
$
142.17
|
$
133.36
|
6.6%
|
|
30.72%
|
27.41%
|
331 bps
|
Hilton
Garden Inn Chelsea (2)
|
|
$
207.11
|
$
207.11
|
0.0%
|
|
97.5%
|
95.2%
|
2.3%
|
|
$
201.89
|
$
197.27
|
2.3%
|
|
41.52%
|
45.04%
|
-352
bps
|
Chicago
Marriott
|
|
$
194.50
|
$
178.04
|
9.2%
|
|
81.5%
|
85.6%
|
(4.1%)
|
|
$
158.45
|
$
152.46
|
3.9%
|
|
23.61%
|
24.78%
|
-117
bps
|
Chicago
Conrad (2)
|
|
$
222.89
|
$
210.88
|
5.7%
|
|
90.5%
|
93.8%
|
(3.3%)
|
|
$
201.81
|
$
197.82
|
2.0%
|
|
38.62%
|
37.64%
|
98 bps
|
Courtyard
Denver Downtown (2)
|
|
$
164.87
|
$
163.04
|
1.1%
|
|
89.2%
|
90.2%
|
(1.0%)
|
|
$
147.06
|
$
147.02
|
0.0%
|
|
48.32%
|
47.74%
|
58 bps
|
Courtyard
Fifth Avenue
|
|
$
259.54
|
$
244.40
|
6.2%
|
|
95.6%
|
90.1%
|
5.5%
|
|
$
248.01
|
$
220.19
|
12.6%
|
|
30.87%
|
25.37%
|
550 bps
|
Courtyard
Midtown East
|
|
$
252.05
|
$
247.58
|
1.8%
|
|
91.9%
|
88.7%
|
3.2%
|
|
$
231.66
|
$
219.68
|
5.5%
|
|
32.96%
|
31.49%
|
147 bps
|
Frenchman's
Reef (2)
|
|
$
187.18
|
$
187.66
|
(0.3%)
|
|
85.0%
|
90.7%
|
(5.7%)
|
|
$
159.02
|
$
170.19
|
(6.6%)
|
|
13.92%
|
(53.68%)
|
6760
bps
|
JW
Marriott Denver Cherry Creek (2)
|
|
$
236.33
|
$
242.93
|
(2.7%)
|
|
80.9%
|
77.7%
|
3.2%
|
|
$
191.18
|
$
188.85
|
1.2%
|
|
33.71%
|
35.24%
|
-153
bps
|
Los
Angeles Airport
|
|
$
109.84
|
$
103.61
|
6.0%
|
|
89.4%
|
90.9%
|
(1.5%)
|
|
$ 98.17
|
$ 94.15
|
4.3%
|
|
17.21%
|
16.02%
|
119 bps
|
Hilton
Minneapolis (2)
|
|
$
152.74
|
$
150.53
|
1.5%
|
|
84.6%
|
89.7%
|
(5.1%)
|
|
$
129.17
|
$
135.04
|
(4.3%)
|
|
34.12%
|
37.15%
|
-303
bps
|
Oak
Brook Hills
|
|
$
119.74
|
$
116.53
|
2.8%
|
|
65.4%
|
64.6%
|
0.8%
|
|
$ 78.31
|
$ 75.26
|
4.1%
|
|
15.55%
|
16.45%
|
-90 bps
|
Orlando
Airport Marriott
|
|
$ 93.11
|
$ 88.73
|
4.9%
|
|
64.1%
|
68.6%
|
(4.5%)
|
|
$ 59.65
|
$ 60.91
|
(2.1%)
|
|
14.91%
|
7.19%
|
772 bps
|
Salt
Lake City Marriott
|
|
$
138.15
|
$
129.37
|
6.8%
|
|
60.3%
|
58.2%
|
2.1%
|
|
$ 83.35
|
$ 75.34
|
10.6%
|
|
22.86%
|
25.38%
|
-252
bps
|
The
Lodge at Sonoma
|
|
$
272.83
|
$
245.22
|
11.3%
|
|
82.5%
|
83.3%
|
(0.8%)
|
|
$
225.15
|
$
204.31
|
10.2%
|
|
30.58%
|
28.13%
|
245 bps
|
Torrance
Marriott South Bay
|
|
$
110.25
|
$
105.14
|
4.9%
|
|
86.8%
|
86.5%
|
0.3%
|
|
$ 95.69
|
$ 90.91
|
5.3%
|
|
25.89%
|
28.12%
|
-223
bps
|
Vail
Marriott (2)
|
|
$
154.84
|
$
150.15
|
3.1%
|
|
73.6%
|
71.0%
|
2.6%
|
|
$
113.91
|
$
106.56
|
6.9%
|
|
23.83%
|
21.51%
|
232 bps
|
Radisson
Lexington Hotel New York (2)
|
|
$
198.64
|
$
195.16
|
1.8%
|
|
96.9%
|
97.6%
|
(0.7%)
|
|
$
192.48
|
$
190.53
|
1.0%
|
|
33.40%
|
35.93%
|
-253
bps
|
Westin
San Diego (2)
|
|
$
147.03
|
$
140.61
|
4.6%
|
|
92.1%
|
87.8%
|
4.3%
|
|
$
135.48
|
$
123.41
|
9.8%
|
|
31.39%
|
32.03%
|
-64 bps
|
Westin
Washington D.C. City Center (2)
|
|
$
174.90
|
$
182.70
|
(4.3%)
|
|
81.4%
|
84.4%
|
(3.0%)
|
|
$
142.31
|
$
154.16
|
(7.7%)
|
|
33.59%
|
35.89%
|
-230
bps
|
Renaissance
Worthington
|
|
$
154.93
|
$
144.24
|
7.4%
|
|
56.8%
|
70.8%
|
(14.0%)
|
|
$ 88.08
|
$
102.09
|
(13.7%)
|
|
13.58%
|
20.23%
|
-665
bps
|
Total/Weighted
Average
|
|
$
170.20
|
$
163.22
|
4.3%
|
|
81.9%
|
82.6%
|
-0.7%
|
|
$
139.44
|
$
134.82
|
3.4%
|
|
27.86%
|
27.27%
|
59 bps
|
(1)
|
The
pro forma operating data includes the operating results for the
Company's hotels assuming they were owned since January 1, 2011.
|
(2)
|
The
hotel reports results on a monthly basis. The data presented is based
upon the Company's reporting calendar for the third quarter and
includes the months of June, July, and August.
|
Pro
Forma Operating Statistics – Year to Date (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ADR
|
|
Occupancy
|
|
RevPAR
|
|
Hotel
Adjusted EBITDA Margin
|
|
|
YTD
2012
|
YTD
2011
|
B/(W)
|
|
YTD
2012
|
YTD
2011
|
B/(W)
|
|
YTD
2012
|
YTD
2011
|
B/(W)
|
|
YTD
2012
|
YTD
2011
|
B/(W)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Atlanta
Alpharetta
|
|
$
139.32
|
$
133.83
|
4.1%
|
|
67.1%
|
68.0%
|
(0.9%)
|
|
$ 93.47
|
$ 91.00
|
2.7%
|
|
31.04%
|
29.97%
|
107 bps
|
Westin
Atlanta North (2)
|
|
$
107.44
|
$
107.92
|
(0.4%)
|
|
79.3%
|
72.3%
|
7.0%
|
|
$ 85.25
|
$ 78.03
|
9.3%
|
|
24.64%
|
14.97%
|
967 bps
|
Atlanta
Waverly (3)
|
|
$
132.02
|
$
133.36
|
(1.0%)
|
|
73.8%
|
67.6%
|
6.2%
|
|
$ 97.48
|
$ 90.13
|
8.2%
|
|
26.33%
|
23.55%
|
278 bps
|
Renaissance
Austin (3)
|
|
$
154.28
|
$
148.11
|
4.2%
|
|
73.9%
|
71.4%
|
2.5%
|
|
$
114.06
|
$
105.69
|
7.9%
|
|
38.50%
|
35.14%
|
336 bps
|
Bethesda
Marriott Suites
|
|
$
163.69
|
$
167.16
|
(2.1%)
|
|
65.6%
|
64.9%
|
0.7%
|
|
$
107.40
|
$
108.51
|
(1.0%)
|
|
26.08%
|
25.50%
|
58 bps
|
Boston
Westin (2)
|
|
$
195.33
|
$
191.18
|
2.2%
|
|
76.3%
|
71.7%
|
4.6%
|
|
$
148.95
|
$
137.00
|
8.7%
|
|
21.59%
|
23.21%
|
-162
bps
|
Hilton
Boston Downtown (2)
|
|
$
215.93
|
$
198.73
|
8.7%
|
|
79.8%
|
78.8%
|
1.0%
|
|
$
172.25
|
$
156.66
|
10.0%
|
|
38.21%
|
36.81%
|
140 bps
|
Hilton
Burlington (2)
|
|
$
156.74
|
$
143.46
|
9.3%
|
|
73.8%
|
67.3%
|
6.5%
|
|
$
115.72
|
$ 96.49
|
19.9%
|
|
37.46%
|
27.36%
|
1010
bps
|
Renaissance
Charleston
|
|
$
183.72
|
$
168.95
|
8.7%
|
|
85.0%
|
84.8%
|
0.2%
|
|
$
156.09
|
$
143.30
|
8.9%
|
|
34.81%
|
33.13%
|
168 bps
|
Hilton
Garden Inn Chelsea (2)
|
|
$
195.21
|
$
195.28
|
0.0%
|
|
94.9%
|
92.1%
|
2.8%
|
|
$
185.29
|
$
179.76
|
3.1%
|
|
39.39%
|
42.65%
|
-326
bps
|
Chicago
Marriott
|
|
$
193.79
|
$
184.90
|
4.8%
|
|
72.2%
|
70.5%
|
1.7%
|
|
$
139.97
|
$
130.28
|
7.4%
|
|
20.60%
|
20.43%
|
17 bps
|
Chicago
Conrad (2)
|
|
$
201.55
|
$
187.61
|
7.4%
|
|
79.1%
|
84.5%
|
(5.4%)
|
|
$
159.39
|
$
158.54
|
0.5%
|
|
26.56%
|
27.78%
|
-122
bps
|
Courtyard
Denver Downtown (2)
|
|
$
158.33
|
$
154.93
|
2.2%
|
|
85.3%
|
78.7%
|
6.6%
|
|
$
135.11
|
$
121.96
|
10.8%
|
|
46.06%
|
43.20%
|
286 bps
|
Courtyard
Fifth Avenue
|
|
$
253.44
|
$
243.78
|
4.0%
|
|
89.3%
|
85.8%
|
3.5%
|
|
$
226.42
|
$
209.19
|
8.2%
|
|
25.58%
|
24.78%
|
80 bps
|
Courtyard
Midtown East
|
|
$
249.58
|
$
243.92
|
2.3%
|
|
85.7%
|
83.2%
|
2.5%
|
|
$
213.92
|
$
203.01
|
5.4%
|
|
30.77%
|
30.34%
|
43 bps
|
Frenchman's
Reef (2)
|
|
$
239.75
|
$
239.39
|
0.2%
|
|
83.6%
|
83.7%
|
(0.1%)
|
|
$
200.39
|
$
200.46
|
0.0%
|
|
23.84%
|
8.75%
|
1509
bps
|
Griffin
Gate Marriott (3)
|
|
$
118.51
|
$
113.30
|
4.6%
|
|
45.8%
|
43.9%
|
1.9%
|
|
$ 54.31
|
$ 49.78
|
9.1%
|
|
(2.46%)
|
0.97%
|
-343
bps
|
JW
Marriott Denver Cherry Creek (2)
|
|
$
226.01
|
$
232.29
|
(2.7%)
|
|
75.0%
|
71.5%
|
3.5%
|
|
$
169.51
|
$
166.20
|
2.0%
|
|
29.18%
|
28.53%
|
65 bps
|
Los
Angeles Airport
|
|
$
109.93
|
$
104.64
|
5.1%
|
|
88.0%
|
86.3%
|
1.7%
|
|
$ 96.76
|
$ 90.29
|
7.2%
|
|
19.62%
|
17.65%
|
197 bps
|
Hilton
Minneapolis (2)
|
|
$
140.06
|
$
139.47
|
0.4%
|
|
73.9%
|
76.3%
|
(2.4%)
|
|
$
103.58
|
$
106.41
|
(2.7%)
|
|
26.44%
|
30.41%
|
-397
bps
|
Oak
Brook Hills
|
|
$
115.27
|
$
113.64
|
1.4%
|
|
58.3%
|
54.5%
|
3.8%
|
|
$ 67.17
|
$ 61.87
|
8.6%
|
|
8.33%
|
8.61%
|
-28 bps
|
Orlando
Airport Marriott
|
|
$
105.70
|
$ 99.90
|
5.8%
|
|
74.2%
|
77.2%
|
(3.0%)
|
|
$ 78.39
|
$ 77.12
|
1.6%
|
|
25.00%
|
22.05%
|
295 bps
|
Salt
Lake City Marriott
|
|
$
136.23
|
$
127.22
|
7.1%
|
|
65.9%
|
60.0%
|
5.9%
|
|
$ 89.84
|
$ 76.28
|
17.8%
|
|
28.88%
|
25.45%
|
343 bps
|
The
Lodge at Sonoma
|
|
$
232.80
|
$
211.60
|
10.0%
|
|
70.8%
|
70.9%
|
(0.1%)
|
|
$
164.72
|
$
150.06
|
9.8%
|
|
19.46%
|
15.29%
|
417 bps
|
Torrance
Marriott South Bay
|
|
$
110.04
|
$
105.61
|
4.2%
|
|
84.4%
|
81.1%
|
3.3%
|
|
$ 92.89
|
$ 85.64
|
8.5%
|
|
25.57%
|
24.91%
|
66 bps
|
Vail
Marriott (2)
|
|
$
231.23
|
$
226.25
|
2.2%
|
|
67.7%
|
65.8%
|
1.9%
|
|
$
156.56
|
$
148.94
|
5.1%
|
|
31.55%
|
30.21%
|
134 bps
|
Radisson
Lexington Hotel New York (2)
|
|
$
189.73
|
$
180.19
|
5.3%
|
|
94.6%
|
95.4%
|
(0.8%)
|
|
$
179.53
|
$
171.84
|
4.5%
|
|
30.17%
|
31.65%
|
-148
bps
|
Westin
San Diego (2)
|
|
$
151.82
|
$
143.80
|
5.6%
|
|
81.1%
|
80.4%
|
0.7%
|
|
$
123.06
|
$
115.66
|
6.4%
|
|
31.36%
|
32.97%
|
-161
bps
|
Westin
Washington D.C. City Center (2)
|
|
$
193.69
|
$
195.46
|
(0.9%)
|
|
74.7%
|
77.2%
|
(2.5%)
|
|
$
144.76
|
$
150.82
|
(4.0%)
|
|
35.82%
|
36.69%
|
-87 bps
|
Renaissance
Worthington
|
|
$
155.91
|
$
159.30
|
(2.1%)
|
|
70.0%
|
71.5%
|
(1.5%)
|
|
$
109.18
|
$
113.88
|
(4.1%)
|
|
28.34%
|
30.66%
|
-232
bps
|
Total/Weighted
Average
|
|
$
167.95
|
$
161.59
|
3.9%
|
|
77.0%
|
75.5%
|
1.5%
|
|
$
129.40
|
$
122.04
|
6.0%
|
|
26.23%
|
25.26%
|
97 bps
|
Comparable
Total/Weighted Average (4)
|
|
$
168.96
|
$
162.47
|
4.0%
|
|
77.5%
|
76.1%
|
1.4%
|
|
$
130.94
|
$
123.60
|
5.9%
|
|
26.22%
|
25.29%
|
93 bps
|
(1)
|
The
pro forma operating data includes the operating results for the
Company's hotels assuming they were owned since January 1, 2011.
|
(2)
|
The
hotel reports results on a monthly basis. The data presented is based
upon the Company's reporting calendar and includes the months of
January through August.
|
(3)
|
The
hotel was sold on March 23, 2012. The 2011 operating results presented
are for the ownership period comparable to the Company's 2012 ownership
period.
|
(4)
|
The
comparable total excludes the three hotels sold on March 23, 2012.
|
Pro
Forma Hotel Adjusted EBITDA Reconciliation
|
|
|
|
|
|
|
|
|
|
|
|
Third
Quarter 2012 (1)
|
|
|
|
|
|
Plus:
|
Plus:
|
Plus:
|
Equals:
|
|
|
Total
Revenues
|
|
Net
Income / (Loss)
|
Depreciation
|
Interest
Expense
|
Non-Cash
Adjustments
(2)
|
Hotel
Adjusted EBITDA
|
Atlanta
Alpharetta
|
|
$ 3,174
|
|
$ 459
|
$ 280
|
$ -
|
$ -
|
$ 739
|
Westin
Atlanta North (3)
|
|
$ 4,130
|
|
$ 791
|
$ 448
|
$ -
|
$ -
|
$ 1,239
|
Bethesda
Marriott Suites
|
|
$ 3,297
|
|
$
(1,126)
|
$ 478
|
$ -
|
$ 1,433
|
$ 785
|
Boston
Westin (3)
|
|
$
19,258
|
|
$ 3,173
|
$ 1,927
|
$ -
|
$ 2
|
$ 5,102
|
Hilton
Boston Downtown (3)
|
|
$ 7,546
|
|
$ 2,266
|
$ 1,062
|
$ -
|
$ -
|
$ 3,328
|
Hilton
Burlington (3)
|
|
$ 4,726
|
|
$ 1,826
|
$ 422
|
$ -
|
$ -
|
$ 2,248
|
Renaissance
Charleston
|
|
$ 2,376
|
|
$ 404
|
$ 355
|
$ -
|
$ (29)
|
$ 730
|
Hilton
Garden Inn Chelsea (3)
|
|
$ 3,244
|
|
$ 910
|
$ 437
|
$ -
|
$ -
|
$ 1,347
|
Chicago
Marriott
|
|
$
22,227
|
|
$ (650)
|
$ 3,247
|
$ 3,015
|
$ (365)
|
$ 5,247
|
Chicago
Conrad (3)
|
|
$ 7,956
|
|
$ 2,286
|
$ 787
|
$ -
|
$ -
|
$ 3,073
|
Courtyard
Denver Downtown (3)
|
|
$ 2,564
|
|
$ 1,002
|
$ 237
|
$ -
|
$ -
|
$ 1,239
|
Courtyard
Fifth Avenue
|
|
$ 3,903
|
|
$ (75)
|
$ 433
|
$ 799
|
$ 48
|
$ 1,205
|
Courtyard
Midtown East
|
|
$ 6,304
|
|
$ 614
|
$ 554
|
$ 910
|
$ -
|
$ 2,078
|
Frenchman's
Reef (3)
|
|
$
12,784
|
|
$ (502)
|
$ 1,504
|
$ 778
|
$ -
|
$ 1,780
|
JW
Marriott Denver Cherry Creek (3)
|
|
$ 5,601
|
|
$ 905
|
$ 426
|
$ 557
|
$ -
|
$ 1,888
|
Los
Angeles Airport
|
|
$
12,879
|
|
$ (179)
|
$ 1,347
|
$ 1,048
|
$ -
|
$ 2,216
|
Minneapolis
Hilton (3)
|
|
$
14,415
|
|
$ 2,050
|
$ 1,770
|
$ 1,266
|
$ (168)
|
$ 4,918
|
Oak
Brook Hills
|
|
$ 5,987
|
|
$ 78
|
$ 728
|
$ -
|
$ 125
|
$ 931
|
Orlando
Airport Marriott
|
|
$ 3,663
|
|
$ (924)
|
$ 691
|
$ 779
|
$ -
|
$ 546
|
Salt
Lake City Marriott
|
|
$ 4,881
|
|
$ 65
|
$ 666
|
$ 385
|
$ -
|
$ 1,116
|
The
Lodge at Sonoma
|
|
$ 5,281
|
|
$ 1,258
|
$ 357
|
$ -
|
$ -
|
$ 1,615
|
Torrance
Marriott South Bay
|
|
$ 5,245
|
|
$ 623
|
$ 735
|
$ -
|
$ -
|
$ 1,358
|
Vail
Marriott (3)
|
|
$ 5,983
|
|
$ 870
|
$ 556
|
$ -
|
$ -
|
$ 1,426
|
Radisson
Lexington Hotel New York (3)
|
|
$
13,292
|
|
$ 199
|
$ 2,392
|
$ 1,816
|
$ 33
|
$ 4,440
|
Westin
San Diego (3)
|
|
$ 7,059
|
|
$ 1,384
|
$ 832
|
$ -
|
$ -
|
$ 2,216
|
Westin
Washington D.C. City Center (3)
|
|
$ 6,522
|
|
$ 1,196
|
$ 995
|
$ -
|
$ -
|
$ 2,191
|
Renaissance
Worthington
|
|
$ 5,339
|
|
$ (652)
|
$ 665
|
$ 710
|
$ 2
|
$ 725
|
Total
|
|
$
199,636
|
|
$
18,251
|
$
24,331
|
$
12,063
|
$ 1,081
|
$
55,628
|
(1)
|
The
pro forma operating data includes the operating results for the
Company's hotels assuming they were owned since January 1, 2011.
|
(2)
|
The
non-cash adjustments include expenses incurred by the hotels due to the
straight lining of the rent from ground lease obligations, the non-cash
amortization of favorable lease assets, and the non-cash amortization
of unfavorable contract liabilities.
|
(3)
|
The
hotel reports results on a monthly basis. The amounts presented are
based on the Company's reporting calendar for the third quarter and
include the months of June, July, and August.
|
Pro
Forma Hotel Adjusted EBITDA Reconciliation
|
|
|
Third
Quarter 2011 (1)
|
|
|
|
|
|
Plus:
|
Plus:
|
Plus:
|
Equals:
|
|
|
Total
Revenues
|
|
Net
Income / (Loss)
|
Depreciation
|
Interest
Expense
|
Non-Cash
Adjustments
(2)
|
Hotel
Adjusted EBITDA
|
Atlanta
Alpharetta
|
|
$ 3,347
|
|
$ 603
|
$ 289
|
$ -
|
$ -
|
$ 892
|
Westin
Atlanta North (3)
|
|
$ 4,149
|
|
$ 150
|
$ 435
|
$ -
|
$ -
|
$ 585
|
Bethesda
Marriott Suites
|
|
$ 2,978
|
|
$
(1,430)
|
$ 481
|
$ -
|
$ 1,446
|
$ 497
|
Boston
Westin (3)
|
|
$
18,809
|
|
$ 2,424
|
$ 2,866
|
$ -
|
$ 117
|
$ 5,407
|
Hilton
Boston Downtown (3)
|
|
$ 7,585
|
|
$ 2,178
|
$ 1,062
|
$ -
|
$ -
|
$ 3,240
|
Hilton
Burlington (3)
|
|
$ 4,163
|
|
$ 1,244
|
$ 422
|
$ -
|
$ -
|
$ 1,666
|
Renaissance
Charleston
|
|
$ 2,255
|
|
$ 306
|
$ 341
|
$ -
|
$ (29)
|
$ 618
|
Hilton
Garden Inn Chelsea (3)
|
|
$ 3,146
|
|
$ 981
|
$ 436
|
$ -
|
$ -
|
$ 1,417
|
Chicago
Marriott
|
|
$
22,299
|
|
$ (155)
|
$ 2,956
|
$ 3,090
|
$ (365)
|
$ 5,526
|
Chicago
Conrad (3)
|
|
$ 7,717
|
|
$ 1,760
|
$ 1,145
|
$ -
|
$ -
|
$ 2,905
|
Courtyard
Denver Downtown (3)
|
|
$ 2,564
|
|
$ 625
|
$ 264
|
$ 335
|
$ -
|
$ 1,224
|
Courtyard
Fifth Avenue
|
|
$ 3,492
|
|
$ (418)
|
$ 439
|
$ 817
|
$ 48
|
$ 886
|
Courtyard
Midtown East
|
|
$ 6,017
|
|
$ 447
|
$ 531
|
$ 917
|
$ -
|
$ 1,895
|
Frenchman's
Reef (3)
|
|
$ 3,694
|
|
$
(3,540)
|
$ 971
|
$ 586
|
$ -
|
$
(1,983)
|
JW
Marriott Denver Cherry Creek (3)
|
|
$ 5,425
|
|
$ 920
|
$ 418
|
$ 574
|
$ -
|
$ 1,912
|
Los
Angeles Airport
|
|
$
12,394
|
|
$ (269)
|
$ 1,195
|
$ 1,060
|
$ -
|
$ 1,986
|
Minneapolis
Hilton (3)
|
|
$
15,402
|
|
$ 2,885
|
$ 1,698
|
$ 1,290
|
$ (151)
|
$ 5,722
|
Oak
Brook Hills
|
|
$ 5,770
|
|
$ 92
|
$ 732
|
$ -
|
$ 125
|
$ 949
|
Orlando
Airport Marriott
|
|
$ 3,449
|
|
$
(1,302)
|
$ 751
|
$ 799
|
$ -
|
$ 248
|
Salt
Lake City Marriott
|
|
$ 4,744
|
|
$ 165
|
$ 629
|
$ 410
|
$ -
|
$ 1,204
|
The
Lodge at Sonoma
|
|
$ 4,814
|
|
$ 1,032
|
$ 322
|
$ -
|
$ -
|
$ 1,354
|
Torrance
Marriott South Bay
|
|
$ 5,387
|
|
$ 784
|
$ 731
|
$ -
|
$ -
|
$ 1,515
|
Vail
Marriott (3)
|
|
$ 5,375
|
|
$ 644
|
$ 512
|
$ -
|
$ -
|
$ 1,156
|
Radisson
Lexington Hotel New York (3)
|
|
$
13,149
|
|
$ 2,334
|
$ 2,354
|
$ 3
|
$ 33
|
$ 4,724
|
Westin
San Diego (3)
|
|
$ 6,529
|
|
$ 1,259
|
$ 832
|
$ -
|
$ -
|
$ 2,091
|
Westin
Washington D.C. City Center (3)
|
|
$ 7,350
|
|
$ 1,643
|
$ 995
|
$ -
|
$ -
|
$ 2,638
|
Renaissance
Worthington
|
|
$ 6,020
|
|
$ (140)
|
$ 626
|
$ 729
|
$ 3
|
$ 1,218
|
Total
|
|
$
188,023
|
|
$
15,222
|
$
24,433
|
$
10,610
|
$ 1,227
|
$
51,283
|
(1)
|
The
pro forma operating data includes the operating results for the
Company's hotels assuming they were owned as of January 1, 2011.
|
(2)
|
The
non-cash adjustments include expenses incurred by the hotels due to the
straight lining of the rent from ground lease obligations, the non-cash
amortization of our favorable lease assets and the non-cash
amortization of our unfavorable contract liabilities.
|
(3)
|
The
hotel reports results on a monthly basis. The amounts presented are
based on the Company's reporting calendar for the second quarter and
include the months of June, July, and August.
|
Pro
Forma Hotel Adjusted EBITDA Reconciliation
|
|
|
|
|
|
|
|
|
|
|
|
Year
to Date 2012 (1)
|
|
|
|
|
|
Plus:
|
Plus:
|
Plus:
|
Equals:
|
|
|
Total
Revenues
|
|
Net
Income / (Loss)
|
Depreciation
|
Interest
Expense
|
Non-Cash
Adjustments
(2)
|
Hotel
Adjusted EBITDA
|
Atlanta
Alpharetta
|
|
$
10,660
|
|
$ 2,430
|
$ 879
|
$ -
|
$ -
|
$ 3,309
|
Westin
Atlanta North (3)
|
|
$
11,727
|
|
$ 1,543
|
$ 1,346
|
$ -
|
$ -
|
$ 2,889
|
Atlanta
Waverly (4)
|
|
$ 7,755
|
|
$ 805
|
$ -
|
$ 1,237
|
$ -
|
$ 2,042
|
Renaissance
Austin (4)
|
|
$ 8,385
|
|
$ 2,167
|
$ -
|
$ 1,061
|
$ -
|
$ 3,228
|
Bethesda
Marriott Suites
|
|
$
10,175
|
|
$
(3,105)
|
$ 1,436
|
$ -
|
$ 4,323
|
$ 2,654
|
Boston
Westin (3)
|
|
$
47,969
|
|
$ 4,269
|
$ 6,082
|
$ -
|
$ 5
|
$
10,356
|
Hilton
Boston Downtown (3)
|
|
$
16,697
|
|
$ 3,193
|
$ 3,187
|
$ -
|
$ -
|
$ 6,380
|
Hilton
Burlington (3)
|
|
$ 9,221
|
|
$ 2,188
|
$ 1,266
|
$ -
|
$ -
|
$ 3,454
|
Renaissance
Charleston
|
|
$ 7,874
|
|
$ 1,777
|
$ 1,051
|
$ -
|
$ (87)
|
$ 2,741
|
Hilton
Garden Inn Chelsea (3)
|
|
$ 7,919
|
|
$ 1,808
|
$ 1,311
|
$ -
|
$ -
|
$ 3,119
|
Chicago
Marriott
|
|
$
61,853
|
|
$
(4,023)
|
$ 8,891
|
$ 8,970
|
$
(1,095)
|
$
12,743
|
Chicago
Conrad (3)
|
|
$
15,981
|
|
$ 1,923
|
$ 2,321
|
$ -
|
$ -
|
$ 4,244
|
Courtyard
Denver Downtown (3)
|
|
$ 6,281
|
|
$ 2,010
|
$ 708
|
$ 175
|
$ -
|
$ 2,893
|
Courtyard
Fifth Avenue
|
|
$
10,643
|
|
$
(1,084)
|
$ 1,288
|
$ 2,375
|
$ 143
|
$ 2,722
|
Courtyard
Midtown East
|
|
$
17,484
|
|
$ 1,028
|
$ 1,648
|
$ 2,704
|
$ -
|
$ 5,380
|
Frenchman's
Reef (3)
|
|
$
40,161
|
|
$ 2,845
|
$ 4,395
|
$ 2,333
|
$ -
|
$ 9,573
|
Griffin
Gate Marriott (4)
|
|
$ 3,462
|
|
$ (84)
|
$ -
|
$ -
|
$ (1)
|
$ (85)
|
JW
Marriott Denver Cherry Creek (3)
|
|
$
13,014
|
|
$ 873
|
$ 1,265
|
$ 1,659
|
$ -
|
$ 3,797
|
Los
Angeles Airport
|
|
$
39,785
|
|
$ 662
|
$ 4,034
|
$ 3,108
|
$ -
|
$ 7,804
|
Minneapolis
Hilton (3)
|
|
$
32,538
|
|
$ (10)
|
$ 5,259
|
$ 3,800
|
$ (445)
|
$ 8,604
|
Oak
Brook Hills
|
|
$
14,894
|
|
$
(1,329)
|
$ 2,195
|
$ -
|
$ 375
|
$ 1,241
|
Orlando
Airport Marriott
|
|
$
14,134
|
|
$ (863)
|
$ 2,079
|
$ 2,318
|
$ -
|
$ 3,534
|
Salt
Lake City Marriott
|
|
$
16,353
|
|
$ 1,621
|
$ 1,947
|
$ 1,155
|
$ -
|
$ 4,723
|
The
Lodge at Sonoma
|
|
$
12,602
|
|
$ 1,408
|
$ 1,044
|
$ -
|
$ -
|
$ 2,452
|
Torrance
Marriott South Bay
|
|
$
15,590
|
|
$ 1,779
|
$ 2,207
|
$ -
|
$ -
|
$ 3,986
|
Vail
Marriott (3)
|
|
$
18,443
|
|
$ 4,193
|
$ 1,625
|
$ -
|
$ -
|
$ 5,818
|
Radisson
Lexington Hotel New York (3)
|
|
$
33,147
|
|
$
(1,559)
|
$ 7,116
|
$ 4,344
|
$ 100
|
$
10,001
|
Westin
San Diego (3)
|
|
$
17,952
|
|
$ 3,134
|
$ 2,495
|
$ -
|
$ -
|
$ 5,629
|
Westin
Washington D.C. City Center (3)
|
|
$
17,722
|
|
$ 3,364
|
$ 2,984
|
$ -
|
$ -
|
$ 6,348
|
Renaissance
Worthington
|
|
$
21,527
|
|
$ 1,997
|
$ 1,983
|
$ 2,113
|
$ 8
|
$ 6,101
|
Total
|
|
$
561,948
|
|
$
34,960
|
$
72,042
|
$
37,352
|
$ 3,326
|
$
147,377
|
Comparable
Total (4)
|
|
$
542,346
|
|
$
32,072
|
$
72,042
|
$
35,054
|
$ 3,327
|
$
142,192
|
(1)
|
The
pro forma operating data includes the operating results for the
Company's hotels assuming they were owned since January 1, 2011.
|
(2)
|
The
non-cash adjustments include expenses incurred by the hotels due to the
straight lining of the rent from ground lease obligations, the non-cash
amortization of favorable lease assets, and the non-cash amortization
of unfavorable contract liabilities.
|
(3)
|
The
hotel reports results on a monthly basis. The amounts presented are
based on the Company's reporting calendar and includes the months of
January to August.
|
(4)
|
The
hotel was sold on March 23, 2012 and the comparable total excludes
these hotels.
|
Pro
Forma Hotel Adjusted EBITDA Reconciliation
|
|
|
|
|
|
|
|
|
|
|
|
Year
to Date 2011 (1)
|
|
|
|
|
|
Plus:
|
Plus:
|
Plus:
|
Equals:
|
|
|
Total
Revenues
|
|
Net
Income / (Loss)
|
Depreciation
|
Interest
Expense
|
Non-Cash
Adjustments
(2)
|
Hotel
Adjusted EBITDA
|
Atlanta
Alpharetta
|
|
$
10,588
|
|
$ 2,311
|
$ 862
|
$ -
|
$ -
|
$ 3,173
|
Westin
Atlanta North (3)
|
|
$
10,869
|
|
$ 349
|
$ 1,278
|
$ -
|
$ -
|
$ 1,627
|
Atlanta
Waverly (4)
|
|
$ 7,332
|
|
$ 476
|
$ -
|
$ 1,251
|
$ -
|
$ 1,727
|
Renaissance
Austin (4)
|
|
$ 7,669
|
|
$ 1,621
|
$ -
|
$ 1,074
|
$ -
|
$ 2,695
|
Bethesda
Marriott Suites
|
|
$
10,332
|
|
$
(3,160)
|
$ 1,452
|
$ -
|
$ 4,343
|
$ 2,635
|
Boston
Westin (3)
|
|
$
43,761
|
|
$ 1,168
|
$ 8,637
|
$ -
|
$ 351
|
$
10,156
|
Hilton
Boston Downtown (3)
|
|
$
16,824
|
|
$ 3,006
|
$ 3,187
|
$ -
|
$ -
|
$ 6,193
|
Hilton
Burlington (3)
|
|
$ 7,887
|
|
$ 892
|
$ 1,266
|
$ -
|
$ -
|
$ 2,158
|
Renaissance
Charleston
|
|
$ 7,307
|
|
$ 1,505
|
$ 1,003
|
$ -
|
$ (87)
|
$ 2,421
|
Hilton
Garden Inn Chelsea (3)
|
|
$ 7,615
|
|
$ 1,966
|
$ 1,282
|
$ -
|
$ -
|
$ 3,248
|
Chicago
Marriott
|
|
$
58,405
|
|
$
(5,386)
|
$ 9,218
|
$ 9,198
|
$
(1,095)
|
$
11,935
|
Chicago
Conrad (3)
|
|
$
15,952
|
|
$ 1,015
|
$ 3,417
|
$ -
|
$ -
|
$ 4,432
|
Courtyard
Denver Downtown (3)
|
|
$ 5,673
|
|
$ 622
|
$ 824
|
$ 1,005
|
$ -
|
$ 2,451
|
Courtyard
Fifth Avenue
|
|
$ 9,958
|
|
$
(1,405)
|
$ 1,316
|
$ 2,414
|
$ 143
|
$ 2,468
|
Courtyard
Midtown East
|
|
$
16,677
|
|
$ 709
|
$ 1,593
|
$ 2,757
|
$ -
|
$ 5,059
|
Frenchman's
Reef (3)
|
|
$
24,100
|
|
$
(2,883)
|
$ 2,902
|
$ 2,089
|
$ -
|
$ 2,108
|
Griffin
Gate Marriott (4)
|
|
$ 3,286
|
|
$ 33
|
$ -
|
$ -
|
$ (1)
|
$ 32
|
JW
Marriott Denver Cherry Creek (3)
|
|
$
12,727
|
|
$ 652
|
$ 1,258
|
$ 1,721
|
$ -
|
$ 3,631
|
Los
Angeles Airport
|
|
$
36,999
|
|
$ (620)
|
$ 4,020
|
$ 3,131
|
$ -
|
$ 6,531
|
Minneapolis
Hilton (3)
|
|
$
33,980
|
|
$ 3,463
|
$ 5,074
|
$ 2,273
|
$ (475)
|
$
10,335
|
Oak
Brook Hills
|
|
$
13,955
|
|
$
(1,382)
|
$ 2,209
|
$ -
|
$ 375
|
$ 1,202
|
Orlando
Airport Marriott
|
|
$
13,857
|
|
$
(1,571)
|
$ 2,260
|
$ 2,367
|
$ -
|
$ 3,056
|
Salt
Lake City Marriott
|
|
$
14,572
|
|
$ 601
|
$ 1,885
|
$ 1,223
|
$ -
|
$ 3,709
|
The
Lodge at Sonoma
|
|
$
11,411
|
|
$ 772
|
$ 973
|
$ -
|
$ -
|
$ 1,745
|
Torrance
Marriott South Bay
|
|
$
15,057
|
|
$ 1,547
|
$ 2,204
|
$ -
|
$ -
|
$ 3,751
|
Vail
Marriott (3)
|
|
$
17,115
|
|
$ 3,642
|
$ 1,529
|
$ -
|
$ -
|
$ 5,171
|
Radisson
Lexington Hotel New York (3)
|
|
$
31,490
|
|
$ 2,792
|
$ 7,064
|
$ 9
|
$ 103
|
$ 9,968
|
Westin
San Diego (3)
|
|
$
16,920
|
|
$ 3,083
|
$ 2,495
|
$ -
|
$ -
|
$ 5,578
|
Westin
Washington D.C. City Center (3)
|
|
$
18,907
|
|
$ 3,953
|
$ 2,984
|
$ -
|
$ -
|
$ 6,937
|
Renaissance
Worthington
|
|
$
21,918
|
|
$ 2,673
|
$ 1,877
|
$ 2,161
|
$ 8
|
$ 6,719
|
Total
|
|
$
523,143
|
|
$
22,444
|
$
74,069
|
$
32,673
|
$ 3,665
|
$
132,144
|
Comparable
Total (4)
|
|
$
504,856
|
|
$
20,314
|
$
74,069
|
$
30,348
|
$ 3,666
|
$
127,690
|
(1)
|
The
pro forma operating data includes the operating results for the
Company's hotels assuming they were owned since January 1, 2011.
|
(2)
|
The
non-cash adjustments include expenses incurred by the hotels due to the
straight lining of the rent from ground lease obligations, the non-cash
amortization of favorable lease assets, and the non-cash amortization
of unfavorable contract liabilities.
|
(3)
|
The
hotel reports results on a monthly basis. The amounts presented are
based on the Company's reporting calendar includes the months of
January through August.
|
(4)
|
The
hotel was sold on March 23, 2012 and the comparable total excludes
these hotels. The 2011 operating results presented in the table are for
the ownership period comparable to the Company's 2012 ownership period.
|
|