BETHESDA, Md.--(February 20, 2013)--LaSalle Hotel Properties
(NYSE: LHO) today announced results for the fourth quarter and year
ended December 31, 2012. The Company’s results include the following:
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Fourth Quarter |
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Year-to-Date |
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2012 |
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2011 |
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2012 |
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2011 |
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($'s
in millions except per share/unit data) |
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Total Revenue |
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$
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215.7
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$
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179.0
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$
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867.1
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$
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719.0
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Net income to
common shareholders |
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$
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10.0
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$
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0.6
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$
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45.1
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$
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12.9
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Net income to
common shareholders per diluted share |
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$
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0.11
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$
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0.01
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$
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0.52
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$
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0.16
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EBITDA(1)
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$
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62.3
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$
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47.1
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$
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253.5
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$
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201.0
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Adjusted EBITDA(1)
|
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$
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62.2
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$
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49.2
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$
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263.2
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$
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204.4
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FFO(1)
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$
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41.4
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$
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28.2
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$
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169.6
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$
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123.3
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Adjusted FFO(1)
|
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$
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41.3
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$
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30.3
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$
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179.3
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$
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127.7
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FFO per diluted
share/unit(1) |
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$
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0.47
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$
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0.34
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$
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1.97
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$
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1.52
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Adjusted FFO per
diluted share/unit(1) |
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$
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0.47
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$
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0.36
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$
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2.08
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$
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1.57
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RevPAR |
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$
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154.88
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|
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$
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149.25
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|
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$
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160.38
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|
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$
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153.39
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RevPAR growth |
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3.8
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%
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4.6
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%
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Hotel EBITDA
Margin |
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30.6
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%
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30.7
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%
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32.1
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%
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31.0
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%
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Hotel EBITDA
Margin growth |
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-17
bps |
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113
bps |
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(1) See tables later in press release, which list
adjustments that reconcile net income to earnings before interest,
taxes, depreciation and amortization ("EBITDA"), adjusted EBITDA, funds
from operations ("FFO"), FFO per share/unit, adjusted FFO, adjusted FFO
per share/unit and hotel EBITDA. EBITDA, adjusted EBITDA, FFO, FFO per
share/unit, adjusted FFO, adjusted FFO per share/unit and hotel EBITDA
are non-GAAP financial measures. See further discussion of these
non-GAAP measures and reconciliations to net income later in this press
release.
Fourth Quarter Highlights
- RevPAR: Room revenue per
available room (“RevPAR”) for the quarter ended December 31, 2012
increased 3.8 percent to $154.88, as a result of a 3.4 percent increase
in average daily rate (“ADR”) to $209.06 and a 0.3 percent increase in
occupancy to 74.1 percent.
- RevPAR excluding Washington, DC:
Excluding Washington, DC, RevPAR during the fourth quarter increased
5.8 percent, comprised of a 4.9 percent improvement in ADR and a 0.9
percent increase in occupancy.
- Hotel EBITDA Margin: The
Company’s hotel EBITDA margin for the fourth quarter was 30.6 percent.
- Adjusted EBITDA: The
Company’s adjusted EBITDA was $62.2 million, an increase of 26.3
percent over the fourth quarter of 2011.
- Adjusted FFO: The Company
generated fourth quarter adjusted FFO of $41.3 million, or $0.47 per
diluted share/unit, compared to $30.3 million or $0.36 per diluted
share/unit for the comparable prior year period. Adjusted FFO per
share/unit increased 30.6 percent.
- Acquisitions: The Company
acquired L’Auberge Del Mar in Del Mar, California for $76.9 million.
The Company also acquired a majority interest in The Liberty Hotel in
Boston, Massachusetts through a joint venture with the original
developer and co-owner, an entity controlled by Dick Friedman of
Carpenter & Company, Inc. The total value of the Liberty
transaction was $170.0 million.
- Capital Markets: On
December 19, 2012, the Company sold 9,200,000 common shares of
beneficial interest, including the full exercise of the underwriters’
option to purchase additional shares, at a price to the public of
$23.70 per share. The majority of the offering’s $209.1 million of net
proceeds were used to acquire a majority interest in The Liberty Hotel.
- Capital Investments: The
Company invested $19.0 million of capital in its hotels, including the
commencement of the renovation of the Park Central Hotel and WestHouse
in Manhattan and Hotel Monaco San Francisco.
- Dividends: On December 14,
2012, the Company declared a fourth quarter 2012 dividend of $0.20 per
common share of beneficial interest.
- Election of Board Member:
The Company announced that Denise Coll has been elected to the
Company’s Board of Trustees, effective March 2, 2013.
“We are very proud of our accomplishments during the fourth
quarter and for the entire year 2012,” said Michael D. Barnello,
President and Chief Executive Officer of LaSalle Hotel Properties. “Our
portfolio delivered another year of outstanding performance, setting
portfolio records in average daily rate, occupancy, RevPAR and hotel
EBITDA margins, resulting in substantial adjusted corporate EBITDA and
adjusted FFO per share growth.”
“We’ve continued to improve our already high-quality portfolio
with acquisitions in key markets and by commencing value-creating
projects like the work we are doing at Park Central and WestHouse in
New York City.”
“Furthermore, we have substantially reduced our cost of debt
from 5.2 percent in 2011 to 4.3 percent in 2012 by executing on two
term loans with very attractive interest rates.”
Full Year 2012 Highlights
- RevPAR: RevPAR increased
4.6 percent to $160.38, as a result of a 4.0 percent increase in ADR to
$202.82 and a 0.5 percent increase in occupancy to 79.1 percent. In
2012, the Company achieved its highest-ever reported ADR and RevPAR,
while achieving its highest-ever reported occupancy for the second year
in a row.
- RevPAR excluding Washington, DC:
Excluding Washington, DC, RevPAR for 2012 increased 6.0 percent,
comprised of a 5.3 percent improvement in ADR and a 0.7 percent
increase in occupancy.
- Hotel EBITDA Margin: The
Company’s hotel EBITDA margin was 32.1 percent, which was its
highest-ever reported margin and represents an improvement of 113 basis
points compared to 2011.
- Adjusted EBITDA: The
Company’s adjusted EBITDA was $263.2 million, an increase of 28.8
percent over 2011.
- Adjusted FFO: The Company
generated adjusted FFO of $179.3 million, or $2.08 per diluted
share/unit, compared to $127.7 million or $1.57 per diluted share/unit
during 2011. Adjusted FFO per share/unit increased 32.5 percent.
- Acquisitions: The Company
invested $458.1 million to acquire three properties and the mezzanine
loan secured by two Santa Monica, California hotels during 2012
bringing the three-year acquisition investment total to $1.5 billion.
The 2012 acquisitions include the following:
- Hotel Palomar in Washington, DC
for $143.8 million on March 8;
- The mezzanine loan secured by
Shutters on the Beach and Hotel Casa Del Mar in Santa Monica,
California for $67.4 million on July 13. The Company purchased the debt
instrument for 93.6 percent of the $72.0 million face value of the
loan;
- L’Auberge Del Mar in Del Mar,
California for $76.9 million on December 6; and
- The majority interest in The
Liberty Hotel in Boston, Massachusetts in a transaction valued at
$170.0 million on December 28.
- Capital Markets: The
Company completed several capital markets initiatives during 2012
including the following:
- Throughout 2012, the Company
sold 2,359,108 common shares under its ATM program at an average net
price of $27.11 per share for net proceeds of $64.0 million;
- On March 30, 2012, the Company
retired $59.6 million of mortgage debt secured by Hilton San Diego
Gaslamp Quarter using proceeds from its senior unsecured credit
facility;
- On May 16, 2012, the Company
entered into a new $177.5 million unsecured loan with a seven-year term
maturing on May 16, 2019. The term loan was swapped to a fixed interest
rate for the full seven-year term. The term loan’s interest rate will
be 3.87 percent when the Company’s leverage ratio is between 4.0 and
4.75 times;
- On May 21, 2012, the Company
redeemed all 7.5% Series D Cumulative Redeemable Preferred Shares and
8.0% Series E Cumulative Redeemable Preferred Shares. Total combined
redemption value for the Series D and E Preferred Shares was
approximately $166.8 million; and
- On August 2, 2012, the Company
entered into a new $300.0 million unsecured loan with a five-year term
maturing on August 2, 2017, including a one-year extension subject to
certain conditions. The term loan was swapped to a fixed interest rate
for the full five-year term. The term loan's interest rate will be 2.68
percent when the Company's leverage ratio is between 4.0 and 4.75
times.
- On December 19, 2012, the
Company sold 9,200,000 common shares of beneficial interest, including
the full exercise of the underwriters’ option to purchase additional
shares, at a price to the public of $23.70 per share, resulting in net
proceeds of $209.1 million.
- The Company’s cost of debt was
reduced from 5.2 percent in 2011 to 4.3 percent in 2012. Also, the cost
of debt and preferred was reduced from 6.0 percent in 2011 to 4.9
percent in 2012.
- Capital Investments: The
Company invested $67.9 million of capital in its hotels throughout the
year, completing the 33-room expansion and renovation of Hotel Amarano
Burbank and the renovations of The Liaison Capitol Hill in Washington,
DC, Le Parc Suite Hotel and Le Montrose Suite Hotel in West Hollywood
and The Hotel Roger Williams in New York. The Company’s capital
investments also include the commencement of the renovation of the Park
Central Hotel and WestHouse in Manhattan and Hotel Monaco San
Francisco.
Balance Sheet
As of December 31, 2012, the Company had total outstanding
debt of $1.25 billion, including $153.0 million outstanding on its
senior unsecured credit facility. Total net debt to trailing 12 month
Corporate EBITDA (as defined in the Company’s senior unsecured credit
facility) was 4.2 times as of December 31, 2012 and its fixed charge
coverage ratio was 3.0 times. For the fourth quarter, the Company’s
weighted average interest rate was 4.3 percent. As of December 31,
2012, the Company had $52.5 million of cash and cash equivalents on its
balance sheet and capacity of $619.7 million available on its credit
facilities.
Subsequent Events
On February 20, 2013, the Company entered into an Equity
Distribution Agreement with Raymond James & Associates, Inc. to
establish a new at-the-market (“ATM”) program totaling $250.0 million.
The new ATM program replaces the previous $250.0 million program, of
which $146.0 million remained.
2013 Outlook
The Company is providing its 2013 outlook based on an economic
environment that continues to improve and assuming no acquisitions and
no capital markets activities. The Company’s RevPAR growth and
financial expectations for 2013 are as follows:
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Current Outlook |
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Low-end |
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High-end |
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($'s
in millions except per share/unit data) |
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Excluding
Park Central Hotel
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RevPAR growth |
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3.0%
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6.0%
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Hotel EBITDA
Margins |
|
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31.4%
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32.4%
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|
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Hotel EBITDA
Margin Change |
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0 bps
|
|
100
bps |
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Including
Park Central Hotel
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RevPAR growth |
|
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0.0%
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|
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3.0%
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Hotel EBITDA
Margins |
|
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31.5%
|
|
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32.5%
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Hotel EBITDA
Margin Change |
|
-50
bps |
|
50
bps |
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Entire
Portfolio (Including Park Central Hotel)
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Adjusted EBITDA |
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$
|
275.0
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$
|
295.0
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Adjusted FFO |
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$
|
195.0
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$
|
214.0
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Adjusted FFO per
diluted share/unit |
|
$
|
2.03
|
|
$
|
2.23
|
|
|
Income Tax
Expenses |
|
$
|
4.5
|
|
$
|
5.5
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Capital
Investments
|
|
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Portfolio
Excluding Park Central |
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$
|
70.0
|
|
$
|
75.0
|
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|
Park Central |
|
$
|
60.0
|
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$
|
70.0
|
|
|
Portfolio
Including Park Central |
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$
|
130.0
|
|
$
|
145.0
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2013 First Quarter Outlook
Based on the portfolio’s performance quarter-to-date, the
Company expects first quarter RevPAR, excluding the Park Central Hotel
to increase 4.0 percent to 6.0 percent. The Company expects its
portfolio, including the Park Central Hotel to generate adjusted EBITDA
of $37.0 million to $39.0 million and adjusted FFO per share/unit of
$0.24 to $0.26.
Earnings Call
The Company will conduct its quarterly conference call on
Thursday, February 21, 2013 at 8:30 AM EST. To participate in the
conference call, please dial (888) 466-4587. Additionally, a
live webcast of the conference call will be available through the
Company’s website. To access, log on to http://www.lasallehotels.com. A replay of the
conference call will be archived and available online through the
Investor Relations section of http://www.lasallehotels.com.
LaSalle Hotel Properties is a leading multi-operator real
estate investment trust. The Company owns 40 hotels and a mezzanine
loan secured by two hotels in Santa Monica, CA. The properties are
upscale, full-service hotels, totaling more than 10,600 guest rooms in
13 markets in 9 states and the District of Columbia. The Company
focuses on owning, redeveloping and repositioning upscale, full-service
hotels located in urban, resort and convention markets. LaSalle Hotel
Properties seeks to grow through strategic relationships with premier
lodging companies, including Westin Hotels and Resorts, Hilton Hotels
Corporation, Outrigger Lodging Services, Noble House Hotels &
Resorts, Hyatt Hotels Corporation, Benchmark Hospitality, White Lodging
Services Corporation, Thompson Hotels, Davidson Hotel Company, Denihan
Hospitality Group, the Kimpton Hotel & Restaurant Group, LLC,
Accor, Destination Hotels & Resorts, HEI Hotels & Resorts, JRK
Hotel Group, Inc., Viceroy Hotel Group, Highgate Hotels and Access
Hotels & Resorts.
This press release, together with other statements and
information publicly disseminated by the Company, contains certain
forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended. The Company intends such
forward-looking statements to be covered by the safe harbor provisions
for forward-looking statements contained in the Private Securities
Litigation Reform Act of 1995 and includes this statement for purposes
of complying with these safe harbor provisions. Forward-looking
statements, which are based on certain assumptions and describe the
Company's future plans, strategies and expectations, are generally
identifiable by use of the words “will,” "believe," "expect," "intend,"
"anticipate," "estimate," "project" or similar expressions.
Forward-looking statements in this press release include, among others,
statements about outlook for RevPAR, adjusted FFO, adjusted EBITDA,
hotel EBITDA margins and derivations thereof and the Company’s outlook
for capital investments. You should not rely on forward-looking
statements since they involve known and unknown risks, uncertainties
and other factors that are, in some cases, beyond the Company's control
and which could materially affect actual results, performances or
achievements. Factors that may cause actual results to differ
materially from current expectations include, but are not limited to,
(i) the Company’s dependence on third-party managers of its hotels,
including its inability to implement strategic business decisions
directly, (ii) risks associated with the hotel industry, including
competition, increases in wages, energy costs and other operating
costs, actual or threatened terrorist attacks, downturns in general and
local economic conditions and cancellation of or delays in the
completion of anticipated demand generators, (iii) the availability and
terms of financing and capital and the general volatility of securities
markets, (iv) risks associated with the real estate industry, including
environmental contamination and costs of complying with the Americans
with Disabilities Act and similar laws, (v) interest rate increases,
(vi) the possible failure of the Company to qualify as a REIT and the
risk of changes in laws affecting REITs, (vii) the possibility of
uninsured losses, (viii) risks associated with redevelopment and
repositioning projects, including delays and cost overruns and (ix) the
risk factors discussed in the Company’s Annual Report on Form 10-K as
updated in its Quarterly Reports. Accordingly, there is no
assurance that the Company's expectations will be realized. Except
as otherwise required by the federal securities laws, the Company
disclaims any obligation or undertaking to publicly release any updates
or revisions to any forward-looking statement contained herein (or
elsewhere) to reflect any change in the Company’s expectations with
regard thereto or any change in events, conditions or circumstances on
which any such statement is based.
For additional information or to receive
press releases via e-mail, please visit our website at www.lasallehotels.com.
|
LASALLE
HOTEL PROPERTIES |
Consolidated
Statements of Operations and Comprehensive Income |
(in thousands, except share
data)
|
(unaudited)
|
|
|
|
|
|
|
|
For
the three months ended |
|
For
the year ended |
|
|
December 31, |
|
December 31, |
|
|
2012 |
|
2011 |
|
2012 |
|
2011 |
Revenues: |
|
|
|
|
|
|
|
|
Hotel operating
revenues: |
|
|
|
|
|
|
|
|
Room |
|
$
|
146,015
|
|
|
$
|
114,953
|
|
|
$
|
595,330
|
|
|
$
|
471,023
|
|
Food and beverage
|
|
54,008 |
|
|
50,333 |
|
|
210,306 |
|
|
193,332 |
|
Other
operating department |
|
14,405 |
|
|
12,276 |
|
|
56,510 |
|
|
49,650 |
|
Total hotel
operating revenues |
|
214,428 |
|
|
177,562 |
|
|
862,146 |
|
|
714,005 |
|
Other
income |
|
1,236 |
|
|
1,417 |
|
|
4,929 |
|
|
5,002 |
|
Total
revenues |
|
215,664 |
|
|
178,979 |
|
|
867,075 |
|
|
719,007 |
|
Expenses: |
|
|
|
|
|
|
|
|
Hotel operating
expenses: |
|
|
|
|
|
|
|
|
Room |
|
38,361 |
|
|
28,946 |
|
|
150,564 |
|
|
115,839 |
|
Food and beverage
|
|
38,406 |
|
|
34,589 |
|
|
149,894 |
|
|
133,838 |
|
Other direct |
|
4,935 |
|
|
4,653 |
|
|
20,778 |
|
|
20,390 |
|
Other
indirect |
|
54,276 |
|
|
46,306 |
|
|
212,001 |
|
|
182,771 |
|
Total hotel
operating expenses |
|
135,978 |
|
|
114,494 |
|
|
533,237 |
|
|
452,838 |
|
Depreciation and
amortization |
|
31,452 |
|
|
27,710 |
|
|
124,363 |
|
|
111,282 |
|
Real estate
taxes, personal property taxes and insurance |
|
11,621 |
|
|
8,955 |
|
|
44,551 |
|
|
35,425 |
|
Ground rent |
|
1,975 |
|
|
1,859 |
|
|
8,588 |
|
|
7,720 |
|
General and
administrative |
|
5,134 |
|
|
4,201 |
|
|
19,769 |
|
|
17,120 |
|
Acquisition
transaction costs |
|
441 |
|
|
1,997 |
|
|
4,498 |
|
|
2,571 |
|
Other
expenses |
|
626 |
|
|
778 |
|
|
3,017 |
|
|
2,527 |
|
Total
operating expenses |
|
187,227 |
|
|
159,994 |
|
|
738,023 |
|
|
629,483 |
|
Operating income |
|
28,437 |
|
|
18,985 |
|
|
129,052 |
|
|
89,524 |
|
Interest income |
|
2,397 |
|
|
26 |
|
|
4,483 |
|
|
48 |
|
Interest
expense |
|
(14,505 |
)
|
|
(10,138 |
)
|
|
(52,896 |
)
|
|
(39,704 |
)
|
Income before
income tax expense and discontinued operations |
|
16,329 |
|
|
8,873 |
|
|
80,639 |
|
|
49,868 |
|
Income
tax expense |
|
(2,142 |
)
|
|
(1,378 |
)
|
|
(9,062 |
)
|
|
(7,048 |
)
|
Income
from continuing operations |
|
14,187 |
|
|
7,495 |
|
|
71,577 |
|
|
42,820 |
|
Discontinued
operations: |
|
|
|
|
|
|
|
|
Income from
operations of properties disposed of, including gain on sale |
|
0 |
|
|
388 |
|
|
0 |
|
|
829 |
|
Income
tax benefit (expense) |
|
0 |
|
|
79 |
|
|
0 |
|
|
(33 |
)
|
Net
income from discontinued operations |
|
0 |
|
|
467 |
|
|
0 |
|
|
796 |
|
Net
income |
|
14,187 |
|
|
7,962 |
|
|
71,577 |
|
|
43,616 |
|
Noncontrolling
interests: |
|
|
|
|
|
|
|
|
Redeemable
noncontrolling interest in loss of consolidated entity |
|
0 |
|
|
0 |
|
|
0 |
|
|
2 |
|
Noncontrolling
interests of common units in Operating Partnership |
|
(57 |
)
|
|
(1 |
)
|
|
(281 |
)
|
|
(1 |
)
|
Net
(income) loss attributable to noncontrolling interests |
|
(57 |
)
|
|
(1 |
)
|
|
(281 |
)
|
|
1 |
|
Net income
attributable to the Company |
|
14,130 |
|
|
7,961 |
|
|
71,296 |
|
|
43,617 |
|
Distributions to
preferred shareholders |
|
(4,166 |
)
|
|
(7,402 |
)
|
|
(21,733 |
)
|
|
(29,952 |
)
|
Issuance
costs of redeemed preferred shares |
|
0 |
|
|
0 |
|
|
(4,417 |
)
|
|
(731 |
)
|
Net
income attributable to common shareholders |
|
$
|
9,964
|
|
|
$
|
559
|
|
|
$
|
45,146
|
|
|
$
|
12,934
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LASALLE
HOTEL PROPERTIES |
Consolidated
Statements of Operations and Comprehensive Income - Continued |
(in thousands, except share
data)
|
(unaudited)
|
|
|
|
|
|
|
|
For
the three months ended |
|
For
the year ended |
|
|
December 31, |
|
December 31, |
|
|
2012 |
|
2011 |
|
2012 |
|
2011 |
Earnings per
Common Share - Basic: |
|
|
|
|
|
|
|
|
Net income
attributable to common shareholders before discontinued operations and
excluding amounts attributable to unvested restricted shares |
|
$
|
0.11
|
|
|
$
|
0.00
|
|
|
$
|
0.52
|
|
|
$
|
0.15
|
|
Discontinued
operations |
|
0.00 |
|
|
0.01 |
|
|
0.00 |
|
|
0.01 |
|
Net
income attributable to common shareholders excluding amounts
attributable to unvested restricted shares |
|
$
|
0.11
|
|
|
$
|
0.01
|
|
|
$
|
0.52
|
|
|
$
|
0.16
|
|
Earnings per
Common Share - Diluted: |
|
|
|
|
|
|
|
|
Net income
attributable to common shareholders before discontinued operations and
excluding amounts attributable to unvested restricted shares |
|
$
|
0.11
|
|
|
$
|
0.00
|
|
|
$
|
0.52
|
|
|
$
|
0.15
|
|
Discontinued
operations |
|
0.00 |
|
|
0.01 |
|
|
0.00 |
|
|
0.01 |
|
Net
income attributable to common shareholders excluding amounts
attributable to unvested restricted shares |
|
$
|
0.11
|
|
|
$
|
0.01
|
|
|
$
|
0.52
|
|
|
$
|
0.16
|
|
Weighted
average number of common shares outstanding: |
|
|
|
|
|
|
|
|
Basic |
|
87,186,328 |
|
|
83,417,987 |
|
|
85,757,969 |
|
|
81,155,228 |
|
Diluted |
|
87,325,471 |
|
|
83,530,710 |
|
|
85,897,274 |
|
|
81,326,304 |
|
|
|
|
|
|
|
|
|
|
Comprehensive
Income: |
|
|
|
|
|
|
|
|
Net income |
|
$
|
14,187
|
|
|
$
|
7,962
|
|
|
$
|
71,577
|
|
|
$
|
43,616
|
|
Other
comprehensive income (loss): |
|
|
|
|
|
|
|
|
Unrealized
income (loss) on interest rate derivative instruments |
|
775 |
|
|
0 |
|
|
(7,759 |
)
|
|
0 |
|
Comprehensive
income |
|
14,962 |
|
|
7,962 |
|
|
63,818 |
|
|
43,616 |
|
Noncontrolling
interests: |
|
|
|
|
|
|
|
|
Redeemable
noncontrolling interest in loss of consolidated entity |
|
0 |
|
|
0 |
|
|
0 |
|
|
2 |
|
Noncontrolling
interests of common units in Operating Partnership |
|
(62 |
)
|
|
(1 |
)
|
|
(257 |
)
|
|
(1 |
)
|
Comprehensive
income attributable to noncontrolling interests |
|
(62 |
)
|
|
(1 |
)
|
|
(257 |
)
|
|
1 |
|
Comprehensive
income attributable to the Company |
|
$
|
14,900
|
|
|
$
|
7,961
|
|
|
$
|
63,561
|
|
|
$
|
43,617
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LASALLE
HOTEL PROPERTIES |
FFO
and EBITDA |
(in thousands, except
share/unit data)
|
(unaudited)
|
|
|
|
|
|
|
|
For
the three months ended |
|
For
the year ended |
|
|
December 31, |
|
December 31, |
|
|
2012 |
|
2011 |
|
2012 |
|
2011 |
Net income
attributable to common shareholders |
|
$
|
9,964 |
|
|
$
|
559 |
|
|
$
|
45,146 |
|
|
$
|
12,934
|
|
Depreciation |
|
31,326 |
|
|
27,566 |
|
|
123,809 |
|
|
110,760 |
|
Amortization of
deferred lease costs |
|
100 |
|
|
93 |
|
|
371 |
|
|
318 |
|
Noncontrolling
interests: |
|
|
|
|
|
|
|
|
Redeemable
noncontrolling interest in consolidated entity |
|
0 |
|
|
0 |
|
|
0 |
|
|
(2 |
)
|
Noncontrolling
interests of common units in Operating Partnership |
|
57 |
|
|
1 |
|
|
281 |
|
|
1 |
|
Less: Net
gain on sale of property |
|
0 |
|
|
0 |
|
|
0 |
|
|
(760 |
)
|
FFO |
|
$
|
41,447 |
|
|
$
|
28,219 |
|
|
$
|
169,607 |
|
|
$
|
123,251
|
|
Management
transition and severance costs |
|
(93 |
)
|
|
0 |
|
|
1,447 |
|
|
579 |
|
Preferred share
issuance costs |
|
0 |
|
|
0 |
|
|
4,417 |
|
|
731 |
|
Acquisition
transaction costs |
|
441 |
|
|
1,997 |
|
|
4,498 |
|
|
2,571 |
|
Tax adjustment
related to disposition |
|
0 |
|
|
0 |
|
|
0 |
|
|
244 |
|
Non-cash ground
rent |
|
112 |
|
|
115 |
|
|
454 |
|
|
347 |
|
Mezzanine
loan discount amortization |
|
(583 |
)
|
|
0 |
|
|
(1,074 |
)
|
|
0 |
|
Adjusted
FFO |
|
$
|
41,324 |
|
|
$
|
30,331 |
|
|
$
|
179,349 |
|
|
$
|
127,723
|
|
|
|
|
|
|
|
|
|
|
Weighted
Average number of common shares and units outstanding: |
|
|
|
|
|
|
|
|
Basic |
|
87,482,628 |
|
|
83,427,649 |
|
|
86,054,269 |
|
|
81,157,663 |
|
Diluted |
|
87,621,771 |
|
|
83,540,372 |
|
|
86,193,574 |
|
|
81,328,739 |
|
|
|
|
|
|
|
|
|
|
FFO per
diluted share/unit |
|
$
|
0.47 |
|
|
$
|
0.34 |
|
|
$
|
1.97 |
|
|
$
|
1.52
|
|
Adjusted FFO
per diluted share/unit |
|
$
|
0.47 |
|
|
$
|
0.36 |
|
|
$
|
2.08 |
|
|
$
|
1.57
|
|
|
|
|
|
|
|
|
For the three months ended |
|
For
the year ended |
|
|
December 31, |
|
December 31, |
|
|
2012 |
|
2011 |
|
2012 |
|
2011 |
Net income
attributable to common shareholders |
|
$
|
9,964
|
|
|
$
|
559
|
|
|
$
|
45,146
|
|
|
$
|
12,934
|
|
Interest expense |
|
14,505 |
|
|
10,138 |
|
|
52,896 |
|
|
39,704 |
|
Income tax
expense (1) |
|
2,142 |
|
|
1,299 |
|
|
9,062 |
|
|
7,081 |
|
Depreciation and
amortization |
|
31,452 |
|
|
27,710 |
|
|
124,363 |
|
|
111,282 |
|
Noncontrolling
interests: |
|
|
|
|
|
|
|
|
Redeemable
noncontrolling interest in consolidated entity |
|
0 |
|
|
0 |
|
|
0 |
|
|
(2 |
)
|
Noncontrolling
interests of common units in Operating Partnership |
|
57 |
|
|
1 |
|
|
281 |
|
|
1 |
|
Distributions
to preferred shareholders |
|
4,166 |
|
|
7,402 |
|
|
21,733 |
|
|
29,952 |
|
EBITDA |
|
$
|
62,286
|
|
|
$
|
47,109
|
|
|
$
|
253,481
|
|
|
$
|
200,952
|
|
Management
transition and severance costs |
|
(93 |
) |
|
0 |
|
|
1,447 |
|
|
579 |
|
Preferred share
issuance costs |
|
0 |
|
|
0 |
|
|
4,417 |
|
|
731 |
|
Acquisition
transaction costs |
|
441 |
|
|
1,997 |
|
|
4,498 |
|
|
2,571 |
|
Net gain on sale
of property |
|
0 |
|
|
0 |
|
|
0 |
|
|
(760 |
)
|
Non-cash ground
rent |
|
112 |
|
|
115 |
|
|
454 |
|
|
347 |
|
Mezzanine
loan discount amortization |
|
(583 |
) |
|
0 |
|
|
(1,074 |
) |
|
0 |
|
Adjusted EBITDA
|
|
$
|
62,163
|
|
|
$
|
49,221
|
|
|
$
|
263,223
|
|
|
$
|
204,420
|
|
Corporate expense
|
|
6,618 |
|
|
4,823 |
|
|
23,622 |
|
|
19,792 |
|
Interest and
other income |
|
(3,526 |
) |
|
(1,442 |
) |
|
(9,212 |
) |
|
(5,093 |
)
|
Hotel
level adjustments, net |
|
(806 |
) |
|
10,952 |
|
|
(2,818 |
) |
|
37,665 |
|
Hotel
EBITDA |
|
$
|
64,449
|
|
|
$
|
63,554
|
|
|
$
|
274,815
|
|
|
$
|
256,784
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Includes amounts from discontinued operations.
With respect to Hotel EBITDA, the Company believes that
excluding the effect of corporate-level expenses, non-cash items, and
the portion of these items related to unconsolidated entities, provides
a more complete understanding of the operating results over which
individual hotels and operators have direct control. We believe
property-level results provide investors with supplemental information
on the ongoing operational performance of our hotels and effectiveness
of the third-party management companies operating our business on a
property-level basis.
Hotel EBITDA includes all properties owned as of December 31,
2012 for the Company's period of ownership in 2012 and the comparable
period in 2011. Exceptions: Hotel EBITDA excludes March period of
ownership for Hotel Palomar, Washington, DC and partial December
ownership of L'Auberge Del Mar and The Liberty Hotel. Hotel EBITDA for
all stated periods excludes any properties the Company has sold.
|
LASALLE
HOTEL PROPERTIES |
Hotel
Operational Data |
Schedule
of Property Level Results |
(in thousands)
|
(unaudited)
|
|
|
|
|
|
|
|
For
the three months ended |
|
For
the year ended |
|
|
December 31, |
|
December 31, |
|
|
2012 |
|
2011 |
|
2012 |
|
2011 |
Revenues: |
|
|
|
|
|
|
|
|
Room |
|
$
|
145,209
|
|
|
$
|
139,405
|
|
|
$
|
592,785
|
|
|
$
|
563,856
|
Food and beverage
|
|
53,138 |
|
|
53,717 |
|
|
208,935 |
|
|
211,577 |
Other |
|
12,473 |
|
|
13,646 |
|
|
53,629 |
|
|
52,926 |
Total
hotel revenues |
|
210,820 |
|
|
206,768 |
|
|
855,349 |
|
|
828,359 |
|
|
|
|
|
|
|
|
|
Expenses: |
|
|
|
|
|
|
|
|
Room |
|
38,157 |
|
|
35,608 |
|
|
149,772 |
|
|
143,725 |
Food and beverage
|
|
37,815 |
|
|
37,629 |
|
|
148,892 |
|
|
149,832 |
Other direct |
|
4,503 |
|
|
4,668 |
|
|
20,195 |
|
|
20,877 |
General and
administrative |
|
17,332 |
|
|
17,076 |
|
|
66,862 |
|
|
65,744 |
Sales and
marketing |
|
13,565 |
|
|
13,624 |
|
|
56,109 |
|
|
54,432 |
Management fees |
|
7,802 |
|
|
7,305 |
|
|
29,192 |
|
|
28,342 |
Property
operations and maintenance |
|
7,585 |
|
|
7,473 |
|
|
30,532 |
|
|
30,103 |
Energy and
utilities |
|
5,572 |
|
|
6,739 |
|
|
23,442 |
|
|
25,231 |
Property taxes |
|
10,514 |
|
|
9,590 |
|
|
40,491 |
|
|
39,135 |
Other
fixed expenses |
|
3,526 |
|
|
3,502 |
|
|
15,047 |
|
|
14,154 |
Total
hotel expenses |
|
146,371 |
|
|
143,214 |
|
|
580,534 |
|
|
571,575 |
|
|
|
|
|
|
|
|
|
Hotel
EBITDA |
|
$
|
64,449
|
|
|
$
|
63,554
|
|
|
$
|
274,815
|
|
|
$
|
256,784
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note:
This schedule includes operating data for all properties owned
as of December 31, 2012 for the Company's period of ownership in 2012
and the comparable period in 2011. Exceptions: The schedule excludes
the March period of ownership for Hotel Palomar, Washington, DC and
partial December ownership of L'Auberge Del Mar and The Liberty Hotel.
All stated periods exclude any properties the Company has sold. Hotel
EBITDA margin is calculated by dividing hotel EBITDA for the period by
the total hotel revenues for the period.
LASALLE
HOTEL PROPERTIES |
Statistical Data for the Hotels |
(unaudited)
|
|
|
|
|
|
|
|
For
the three months ended |
|
For
the year ended |
|
|
December 31, |
|
December 31, |
|
|
2012 |
|
2011 |
|
2012 |
|
2011 |
Total Portfolio |
|
|
|
|
|
|
|
|
Occupancy |
|
74.1 |
%
|
|
73.8 |
%
|
|
79.1 |
%
|
|
78.7 |
%
|
Increase |
|
0.3 |
%
|
|
|
|
0.5 |
%
|
|
|
ADR |
|
$
|
209.06
|
|
|
$
|
202.11
|
|
|
$
|
202.82
|
|
|
$
|
194.94
|
|
Increase |
|
3.4 |
%
|
|
|
|
4.0 |
%
|
|
|
RevPAR |
|
$
|
154.88
|
|
|
$
|
149.25
|
|
|
$
|
160.38
|
|
|
$
|
153.39
|
|
Increase |
|
3.8 |
%
|
|
|
|
4.6 |
%
|
|
|
Note:
This schedule includes operating data for all properties owned
as of December 31, 2012 for the Company's period of ownership in 2012
and the comparable period in 2011. All stated periods exclude any
properties the Company has sold.
|
LASALLE
HOTEL PROPERTIES |
Statistical
Data for the Hotels |
(unaudited)
|
|
Prior Year Operating Data
Including Park Central Hotel
|
|
|
|
|
|
|
|
|
|
|
|
|
|
First
Quarter |
|
Second
Quarter |
|
Third
Quarter |
|
Fourth
Quarter |
|
Full
Year |
|
|
2012 |
|
2012 |
|
2012 |
|
2012 |
|
2012 |
Occupancy |
|
72.0 |
%
|
|
83.9 |
%
|
|
86.4 |
%
|
|
74.3 |
%
|
|
79.2 |
%
|
ADR |
|
$
|
179.19
|
|
|
$
|
219.00
|
|
|
$
|
208.84
|
|
|
$
|
212.87
|
|
|
$
|
205.78
|
|
RevPAR |
|
$
|
128.95
|
|
|
$
|
183.69
|
|
|
$
|
180.42
|
|
|
$
|
158.24
|
|
|
$
|
162.89
|
|
|
Prior Year Operating Data
Excluding Park Central Hotel
|
|
|
|
|
|
|
|
|
|
|
|
|
|
First
Quarter |
|
Second
Quarter |
|
Third
Quarter |
|
Fourth
Quarter |
|
Full
Year |
|
|
2012 |
|
2012 |
|
2012 |
|
2012 |
|
2012 |
Occupancy |
|
69.7 |
%
|
|
82.6 |
%
|
|
85.4 |
%
|
|
72.3 |
%
|
|
77.5 |
%
|
ADR |
|
$
|
183.73
|
|
|
$
|
216.69
|
|
|
$
|
207.59
|
|
|
$
|
204.45
|
|
|
$
|
203.95
|
|
RevPAR |
|
$
|
128.10
|
|
|
$
|
179.00
|
|
|
$
|
177.28
|
|
|
$
|
147.90
|
|
|
$
|
158.12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note:
The schedules above include operating data for all properties
owned as of December 31, 2012, unless otherwise noted.
Non-GAAP Financial Measures
FFO, EBITDA and Hotel EBITDA
The Company considers the non-GAAP measures of FFO (including
FFO per share/unit), EBITDA and hotel EBITDA to be key supplemental
measures of the Company's performance and should be considered along
with, but not as alternatives to, net income or loss as a measure of
the Company's operating performance. Historical cost accounting for
real estate assets implicitly assumes that the value of real estate
assets diminishes predictably over time. Since real estate values
instead have historically risen or fallen with market conditions, most
real estate industry investors consider FFO, EBITDA and hotel EBITDA to
be helpful in evaluating a real estate company's operations.
The White Paper on FFO approved by NAREIT in April 2002, as
revised in 2011, defines FFO as net income or loss (computed in
accordance with GAAP), excluding gains or losses from sales of
properties, impairment write-downs and items classified by GAAP as
extraordinary, plus real estate-related depreciation and amortization
(excluding amortization of deferred finance costs) and after comparable
adjustments for the Company's portion of these items related to
unconsolidated entities and joint ventures. The Company computes FFO
consistent with standards established by NAREIT, which may not be
comparable to FFO reported by other REITs that do not define the term
in accordance with the current NAREIT definition or that interpret the
current NAREIT definition differently than the Company.
With respect to FFO, the Company believes that excluding the
effect of extraordinary items, real estate-related depreciation and
amortization, and the portion of these items related to unconsolidated
entities, all of which are based on historical cost accounting and
which may be of limited significance in evaluating current performance,
can facilitate comparisons of operating performance between periods and
between REITs, even though FFO does not represent an amount that
accrues directly to common shareholders. However, FFO may not be
helpful when comparing the Company to non-REITs.
With respect to EBITDA, the Company believes that excluding
the effect of non-operating expenses and non-cash charges, and the
portion of these items related to unconsolidated entities, all of which
are also based on historical cost accounting and may be of limited
significance in evaluating current performance, can help eliminate the
accounting effects of depreciation and amortization, and financing
decisions and facilitate comparisons of core operating profitability
between periods and between REITs, even though EBITDA also does not
represent an amount that accrues directly to common shareholders.
With respect to hotel EBITDA, the Company believes that
excluding the effect of corporate-level expenses, non-cash items, and
the portion of these items related to unconsolidated entities, provides
a more complete understanding of the operating results over which
individual hotels and operators have direct control. We believe
property-level results provide investors with supplemental information
on the ongoing operational performance of our hotels and effectiveness
of the third-party management companies operating our business on a
property-level basis.
FFO, EBITDA and hotel EBITDA do not represent cash generated
from operating activities as determined by GAAP and should not be
considered as alternatives to net income or loss, cash flows from
operations or any other operating performance measure prescribed by
GAAP. FFO, EBITDA and hotel EBITDA are not measures of the Company's
liquidity, nor are FFO, EBITDA and hotel EBITDA indicative of funds
available to fund the Company's cash needs, including its ability to
make cash distributions. These measurements do not reflect cash
expenditures for long-term assets and other items that have been and
will be incurred. FFO, EBITDA and hotel EBITDA may include funds that
may not be available for management's discretionary use due to
functional requirements to conserve funds for capital expenditures,
property acquisitions, and other commitments and uncertainties. To
compensate for this, management considers the impact of these excluded
items to the extent they are material to operating decisions or the
evaluation of the Company's operating performance.
Adjusted FFO and Adjusted EBITDA
The Company presents adjusted FFO (including adjusted FFO per
share/unit) and adjusted EBITDA, which adjusts for certain additional
items including gains on sale of property and impairment losses (to the
extent included in EBITDA), acquisition transaction costs, costs
associated with the departure of executive officers, costs associated
with the recognition of issuance costs related to the calling of
preferred shares and certain other items. The Company excludes these
items as it believes it allows for meaningful comparisons with other
REITs and between periods and is more indicative of the ongoing
performance of its assets. As with FFO, EBITDA, and hotel EBITDA, the
Company’s calculation of adjusted FFO and adjusted EBITDA may be
different from similar adjusted measures calculated by other REITs.
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