Close

Cart

Total $0.00

Checkout
BETHESDA, Md., Feb. 25, 2014  -- DiamondRock Hospitality Company (the "Company") (NYSE: DRH), a lodging-focused real estate investment trust that owns a portfolio of 26 premium hotels in the United States, today announced results of operations for the fourth quarter and full year ended December 31, 2013.  The Company also announced a 21% increase to its quarterly dividend commencing with the first quarter 2014.

2013 Operating Results        

  • RevPAR: RevPAR was $138.11, an increase of 1.4% from 2012.  Excluding the New York City hotels under renovation during 2013, the Company's RevPAR increased 5.3% from 2012.
  • Hotel Adjusted EBITDA Margin: Hotel Adjusted EBITDA margin was 25.80%, a decrease of 143 basis points from 2012. Excluding the New York City hotels under renovation during 2013, the Company's Hotel Adjusted EBITDA margin increased 45 basis points from 2012.
  • Adjusted EBITDA: Adjusted EBITDA was $196.9 million.
  • Adjusted FFO: Adjusted FFO was $139.3 million and Adjusted FFO per diluted share was $0.71.
  • Dividends: The Company declared four quarterly dividends totaling $0.34 per share during 2013 and returned approximately $65 million to shareholders.
Fourth Quarter 2013 Highlights
  • RevPAR: RevPAR was $139.98, an increase of 3.3% from 2012.
  • Hotel Adjusted EBITDA Margin: Hotel Adjusted EBITDA margin was 25.81%, a decrease of 188 basis points from 2012.
  • Adjusted EBITDA: Adjusted EBITDA was $49.3 million.
  • Adjusted FFO: Adjusted FFO was $33.5 million and Adjusted FFO per diluted share was $0.17.
  • Lexington Hotel Renovation: The Company completed its comprehensive renovation of the Lexington Hotel New York City during the fourth quarter. The feedback from guests and meeting planners post-renovation has been very favorable.
  • Non-Core Hotel Disposition: The Company sold the 487-room Torrance Marriott South Bay for proceeds of approximately $76 million, which represented a 5.8% cap rate on the hotel's net operating income.
  • Salt Lake City Refinancing: The Company entered into a new $63 million mortgage loan secured by the Salt Lake City Marriott. The loan has a term of seven years and bears interest at a fixed rate of 4.25%.
  • Dividends: The Company declared a quarterly dividend of $0.085 per share during the fourth quarter.
Mark W. Brugger, President and Chief Executive Officer of DiamondRock Hospitality Company, stated, "In 2013 we focused on repositioning DiamondRock for meaningful growth in 2014 and beyond. We are pleased to announce that we have substantially completed our $140 million capital program, which included a number of transformational projects such as the comprehensive renovation and rebranding of the Lexington Hotel. Importantly, we don't expect any meaningful renovation disruption in 2014. Our successful strategic initiatives in 2013 have positioned the Company for a strong 2014, as we look for performance to be bolstered by accelerated RevPAR growth, strong group pace, renovation tailwinds and our intensified asset management efforts."

Operating Results     

Please see "Certain Definitions" and "Non-GAAP Financial Measures" attached to this press release for an explanation of the terms "EBITDA," "Adjusted EBITDA," "Hotel Adjusted EBITDA Margin," "FFO" and "Adjusted FFO."

For the quarter ended December 31, 2013 (92 days), the Company reported the following:

1 Excludes the Torrance Marriott South Bay, which was sold in November 2013 and reported in discontinued operations.

2 Pro forma to (a) include the operating results of the Company's Marriott-managed hotels from October 6, 2012 to December 31, 2012 (87 days) and all other hotels from October 1, 2012 to December 31, 2012, (b) assume the hotels acquired in 2012 were owned as of January 1, 2012 and (c) exclude the results of hotels sold.

The year-over-year comparability of the Company's fourth quarter results is impacted by the change in its reporting calendar.  For the Company's Marriott-managed hotels, the 2013 fourth quarter includes 5 more days than the pro forma 2012 fourth quarter, which results in the 2013 fourth quarter including approximately 3% additional available room nights as compared to the pro forma 2012 fourth quarter.

For the year ended December 31, 2013, the Company reported the following:

1 Excludes the Torrance Marriott South Bay, which was sold in November 2013 and reported in discontinued operations.

2 Pro forma to assume the hotels acquired in 2012 were owned as of January 1, 2012 and exclude the results of hotels sold.

The Company's operating results for the year ended December 31, 2013 were significantly impacted by the displacement of over 86,000 room nights at its three New York City hotels under renovation, the Lexington Hotel, Courtyard Manhattan Midtown East and Courtyard Fifth Avenue. The renovations of the two Courtyards were completed during the second quarter of 2013 and the renovation of the Lexington Hotel was completed in October 2013.  The following are selected operating results for the Company excluding these three hotels:

1 Excludes the Torrance Marriott South Bay, which was sold in November 2013 and reported in discontinued operations.

2 Pro forma to assume the hotels acquired in 2012 were owned as of January 1, 2012 and exclude the results of hotels sold.

Capital Expenditures

The Company has substantially completed its $140 million capital improvement program. During the year ended December 31, 2013, the Company spent approximately $107.3 million on these capital improvements. The following is an update on the most significant capital projects.

  • Lexington Hotel New York: The Company completed its comprehensive renovation of the Lexington Hotel in October 2013. The hotel joined Marriott's Autograph Collection during August 2013 and has increased average daily rates by approximately $40 from the comparable period in 2012.
  • Manhattan Courtyards:  The Company completed the renovation of the guest rooms, corridors and guest bathrooms at the Courtyard Manhattan/Midtown East and Courtyard Manhattan/Fifth Avenue.  The renovation at the Courtyard Midtown East included the addition of 5 new guest rooms.
  • Westin Washington D.C.:  A comprehensive $17 million renovation commenced in October 2013 and was substantially completed in February 2014.
  • Westin San Diego: A comprehensive $14.5 million renovation commenced in October 2013 and was substantially completed in January 2014.
  • Hilton Minneapolis: A $13 million renovation of the guest rooms, guest bathrooms and corridors commenced in November 2013 and will be substantially complete during the first quarter of 2014.
  • Hilton Boston: A $7 million renovation of the guest rooms, corridors, public areas, and meeting space commenced in October 2013 and was substantially completed at the end of 2013.
  • Hilton Burlington:  A $6 million renovation of the lobby, corridors, guest rooms and outdoor space commenced in November 2013 and was substantially completed in February 2014.
The Company expects to spend approximately $95 million on capital improvements at its hotels in 2014, of which approximately $45 million relates to the completion of 2013 capital projects in early 2014 and approximately $50 million relates to new 2014 capital projects.
Salt Lake City Marriott Refinancing

The Company entered into a new $63 million mortgage loan secured by the Salt Lake City Marriott in October 2013. The new loan has a term of seven years and bears interest at a fixed rate of 4.25%. As part of the refinancing, the Company prepaid the $27.3 million mortgage loan previously secured by the hotel, which had a fixed interest rate of 5.5 % and a maturity date of January 2015. The cost of prepaying the loan through defeasance was approximately $1.5 million, which is added back to Adjusted EBITDA and Adjusted FFO. The Company used the proceeds from the new loan to repay the prior loan and to create additional investment capacity for the acquisition of the Hilton Garden Inn Times Square Central.

Sale of Torrance Marriott South Bay

On November 21, 2013, the Company sold the 487-room Torrance Marriott South Bay for approximately $76 million, which included credit for the hotel's replacement reserve. The proceeds from the sale will be used to create investment capacity for the acquisition of the Hilton Garden Inn Times Square Central.  The Torrance Marriott South Bay generated $5.4 million of Hotel Adjusted EBITDA during the year ended December 31, 2013.

Balance Sheet

As of December 31, 2013, the Company had $144.6 million of unrestricted cash on hand and approximately $1.1 billion of total debt, which consists solely of property-specific mortgage debt.  The Company has no outstanding borrowings on its $200 million senior unsecured credit facility.

Dividends

The Company's Board of Directors declared a quarterly dividend of $0.085 per share to stockholders of record as of December 31, 2013.  The dividend was paid on January 10, 2014.  The Company increased its quarterly dividend for 2014 by 21% and its Board of Directors declared a dividend of $0.1025 per share for stockholders of record as of March 31, 2014.

Outlook and Guidance

The Company is providing annual guidance for 2014, but does not undertake to update it for any developments in its business.  Achievement of the anticipated results is subject to the risks disclosed in the Company's filings with the U.S. Securities and Exchange Commission.  The Company's outlook assumes the Hilton Garden Inn Times Square Central opens in August 2014.  The 2014 Pro Forma RevPAR growth excludes the Hilton Garden Inn Times Square Central, which is expected to positively impact the Company's RevPAR by approximately 75 basis points.

Based on the above assumptions, the Company expects its full year 2014 results to be as follows:

The Company expects approximately 16% of full year 2014 Adjusted EBITDA to be earned during the first quarter of 2014.

The midpoint of the guidance range above implies Hotel Adjusted EBITDA margin growth of over 250 basis points.  For comparison purposes, the Company's Pro Forma RevPAR growth outlook excluding the New York City hotels under renovation during 2013 is 5.5 percent to 7.5 percent.

To view all tables corresponding to this release please visit http://investor.drhc.com/phoenix.zhtml?c=181049&p=irol-irhome

About DiamondRock Hospitality

DiamondRock Hospitality Company is a self-advised real estate investment trust (REIT) that is an owner of a leading portfolio of geographically diversified hotels concentrated in top gateway markets and destination resort locations.  The Company owns 26 premium quality hotels with over 11,100 rooms. The Company has strategically positioned its hotels to generally be operated under the leading global brands such as Hilton, Marriott, and Westin. For further information on the Company and its portfolio, please visit DiamondRock Hospitality Company's website at www.drhc.com.

Contact: Sean M. Mahoney

info@drhc.com / (240) 744-1150

Related News

Briony Quinn Promoted to Senior Vice President & Treasurer at DiamondRock Hospitality Company

DiamondRock Names Jay Johnson New Executive Vice President & Chief Financial Officer

DiamondRock Acquires L'Auberge de Sedona and Orchards Inn Sedona for $97 Million

DiamondRock Names Thomas Healy Chief Operating Officer and Executive Vice President of Asset Management

DiamondRock Hospitality Completes Final Phase of Historic Lexington New York City's $50 Million Renovation

DiamondRock Completes Sale of Hilton Garden Inn Chelsea / New York City for $65 million and the Hilton Minneapolis for $143 million

DiamondRock Acquires The Shorebreak Hotel in Huntington Beach, California for $58.5 Million

DiamondRock Appoints Dustin Resnick as Vice President, Acquisitions & Investments

DiamondRock to Acquire the 432-room Westin Beach Resort & Spa, Fort Lauderdale in FL for $149M

DiamondRock Hospitality Agrees to Sell the 1,004-room Los Angeles Airport Marriott for $160M

Summit Hotel Properties Reports Fourth Quarter and Full Year 2013 Results

Orient-Express Hotels Reports Q4 2013 Results; Same Store RevPAR up 9%

Ryman Hospitality Properties Reports Fourth Quarter & Full Year 2013 Results

Hilton Worldwide Reports Fourth Quarter and Full Year 2013 Results

RLJ Lodging Trust Q4 & Full Year 2013 Results Report Net Income $27.4M & Pro Forma RevPar Up 7.2%

Strategic Hotels & Resorts Reports Fourth Quarter And Full Year 2013 Results

Extended Stay America Announces Fourth Quarter and Full Year 2013 Results; Q4 RevPAR Up 5.7%

Hersha Hospitality Trust Announces Full-Year and Fourth Quarter 2013 Results

FelCor Reports Fourth Quarter 2013 Earnings; RevPAR Increased 7.7% for Comparable Hotels

Hospitality Properties Trust Reports Q4 Net Income of $27.6M & Full Year 2013 Net Income of $101M

All News »

Please login or register to post a comment.