LaSalle Hotel Properties (NYSE: LHO) today announced results for
the quarter ended September 30, 2017. The Company’s hotel
statistics are presented excluding third quarter results from its
two resorts located in Key West, due to their temporary closure
during and following Hurricane Irma in September 2017. The Company
also provided its hotel statistics for all properties combined,
including the results from the Key West resorts. The Company’s
results are summarized below.
Third Quarter Year-to-Date
2017 2016 % Var. 2017 2016 %
Var. ($'s in millions except per share/unit data) Net
income attributable to common shareholders(1) $ 31.1 $ 152.1 -79.6
% $ 162.7 $ 213.3 -23.7 % Net income attributable to common
shareholders per diluted share(1) $ 0.27 $ 1.34 -79.9 % $ 1.43 $
1.88 -23.9 %
Excludes Key West
in the Third Quarter for Both Years
RevPAR(2) $ 219.38 $ 227.69 -3.6 % $ 208.52 $ 211.70 -1.5 % Hotel
EBITDA Margin(2) 34.8% 36.4% 33.8% 34.5% Hotel EBITDA Margin
Change(2)
-162 bps
-62 bps
All
Properties
RevPAR(2) $ 217.57 $ 228.31 -4.7 % $ 208.03 $ 212.10 -1.9 % Hotel
EBITDA Margin(2) 34.6% 36.6% 33.8% 34.5% Hotel EBITDA Margin
Change(2)
-193 bps
-75 bps
Total Revenues $ 285.9 $ 326.9 -12.5 % $ 847.3 $
938.1 -9.7 % EBITDA(1,2) $ 90.6 $ 219.1 -58.6 % $ 345.4 $ 409.6
-15.7 % Adjusted EBITDA(2) $ 93.5 $ 115.3 -18.9 % $ 265.7 $ 310.8
-14.5 % Note: Adjusted EBITDA in the third quarter of 2016 included
$12.7 million for assets that the Company sold in 2016 and 2017.
Year-to-date adjusted EBITDA in 2016 included $41.4 million for
assets that the Company sold in 2016 and 2017. FFO
attributable to common shareholders and unitholders(2) $ 74.4 $
95.7 -22.3 % $ 212.0 $ 253.4 -16.3 % Adjusted FFO attributable to
common shareholders and unitholders(2) $ 77.4 $ 96.4 -19.7 % $
220.2 $ 259.1 -15.0 % FFO attributable to common shareholders and
unitholders per diluted share/unit(2) $ 0.66 $ 0.84 -21.4 % $ 1.87
$ 2.24 -16.5 % Adjusted FFO attributable to common shareholders and
unitholders per diluted share/unit(2) $ 0.68 $ 0.85 -20.0 % $ 1.94
$ 2.29 -15.3 %
(1)
Year-to-date 2017 net income and EBITDA
(as defined below) included $85.5 million of gains from the sales
of Hotel Deca, Lansdowne Resort, Alexis Hotel, Hotel Triton, and
Westin Philadelphia. Third quarter and year-to-date 2016 net income
and EBITDA included $104.8 million of gain from the sale of
Indianapolis Marriott Downtown.
(2)
See tables later in this press release,
which list adjustments that reconcile net income to earnings before
interest, taxes, depreciation and amortization (“EBITDA”), adjusted
EBITDA, funds from operations (“FFO”), adjusted FFO and pro forma
hotel EBITDA. EBITDA, adjusted EBITDA, FFO, adjusted FFO and pro
forma 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. Room revenue per available room
(“RevPAR”) is presented on a pro forma basis to reflect hotels in
the Company’s current portfolio. See “Statistical Data for the
Hotels - Pro Forma” later in this press release.
“The third quarter included challenges, including growing hotel
supply and less citywide demand in our markets,” said Michael D.
Barnello, President and Chief Executive Officer of LaSalle Hotel
Properties. “In particular, we faced a difficult citywide
comparison in San Francisco and Philadelphia. Philadelphia’s
results were also hurt by the comparison to the Democratic National
Convention in July 2016. Hurricane Irma forced our two resorts in
Key West to close for a period of time, which negatively impacted
RevPAR change by 110 basis points. While the top line results are
disappointing, we are proud of our operators and asset management
team’s ability to find continued efficiencies.”
Third Quarter Results
- Net Income: The Company’s net
income attributable to common shareholders was $31.1 million, which
decreased by $121.0 million from the third quarter of 2016,
predominantly due to a $104.8 million gain relating to the sale of
the Indianapolis Marriott Downtown in July 2016.
- RevPAR: Excluding Key West, the
Company’s third quarter RevPAR decreased 3.6% to $219.38, driven by
a 3.6% decline in average daily rate to $243.31 and flat occupancy
at 90.2%.
- Hotel EBITDA Margin: Excluding
Key West, the Company’s hotel EBITDA margin was 34.8%, which was
162 basis points below that of the comparable prior year period.
The Company’s hotel expenses declined by 0.3% from the third
quarter of 2016.
- Adjusted EBITDA: The Company’s
adjusted EBITDA was $93.5 million, a decrease of $21.8 million from
the third quarter of 2016. Third quarter 2016 adjusted EBITDA
included $12.7 million from seven assets the Company sold between
July 2016 and September 2017 (the “Disposed Assets”): Indianapolis
Marriott Downtown, the mezzanine loan on Shutters on the Beach and
Casa Del Mar, Hotel Deca, Lansdowne Resort, Alexis Hotel, Hotel
Triton, and Westin Philadelphia.
- Adjusted FFO: The Company
generated adjusted FFO of $77.4 million, or $0.68 per diluted
share/unit, compared to $96.4 million, or $0.85 per diluted
share/unit, for the comparable prior year period. As with adjusted
EBITDA, the Disposed Assets provided approximately $12.7 million of
adjusted FFO during the third quarter 2016.
Key West Impact Update: After both resorts closed on
September 6, 2017 to comply with all mandatory evacuations of the
island ahead of Hurricane Irma, the Southernmost Beach Resort Key
West partially re-opened on September 15, 2017 and The Marker
Waterfront Resort remains closed. The Company has not identified
any significant structural damage at either of its resorts. While
the Company is still assessing the condition of both properties, it
currently believes that the damage is not significant and is
primarily related to water intrusion. The Company expects The
Marker Waterfront Resort will resume full operations by the end of
October 2017. The Southernmost Beach Resort Key West is expected to
fully re-open its remaining rooms in phases throughout the fourth
quarter. The Company maintains property, flood, fire and business
interruption insurance at its two resorts in Key West. For the
combined properties, insurance is subject to deductibles of
approximately $5.0 million in total, which encompasses both
property and business interruption coverage.
Capital Investments
During the quarter, the Company invested $29.5 million of
capital in its hotels, of which the majority was for ongoing and
upcoming renovations at the end of 2017. The two largest projects
are lifecycle rooms renovations at Westin Copley Place in Boston
and Paradise Point Resort & Spa in San Diego. The Company will
also be completing room renovations this winter at Chamberlain and
Le Montrose in West Hollywood, Serrano Hotel and Harbor Court Hotel
in San Francisco, and Heathman Hotel in Portland.
Year-to-date, the Company has invested $66.6 million of capital
in its hotels, compared to its full year 2017 anticipated capital
expenditures between $130.0 and $150.0 million. While the Company
may not spend its full capital budget during calendar year 2017, it
still expects to fund any remaining balance during the first
quarter 2018, as it completes several ongoing renovations.
Balance Sheet and Capital Markets Activities
- Balance Sheet Summary as of
September 30, 2017: The Company had total outstanding debt of
$1.1 billion, and total net debt to trailing 12 month Corporate
EBITDA (as defined in the financial covenant section of the
Company’s senior unsecured credit facility, adjusted for all cash
and cash equivalents on its balance sheet) was 2.0 times. The
Company’s fixed charge coverage ratio was 5.5 times, and its
weighted average interest rate for the third quarter was 3.0%. The
Company had capacity of $772.6 million available on its credit
facilities, in addition to $444.3 million of cash and cash
equivalents on its balance sheet.
- Interest Rate Hedge: On July 25,
2017, the Company swapped the interest rate on its $300.0 million
senior unsecured term loan to an all-in fixed rate of 3.23% through
loan maturity in January 2022. The previous interest rate swap was
set to mature on August 2, 2017.
- Share Repurchase: The Company
did not acquire any common shares during the third quarter of 2017
or to date during the fourth quarter of 2017.
Dividend
On September 15, 2017, the Company declared a third quarter 2017
dividend of $0.45 per common share of beneficial interest. The
dividend represents an annual run rate of $1.80 per share and a
5.9% yield based on the closing share price on October 18,
2017.
Earnings Call
The Company will conduct its quarterly conference call on
Friday, October 20, 2017 at 11:00 AM eastern time. To participate
in the conference call, please dial (877) 419-6600.
Additionally, a live webcast of the conference call will be
available through the Company’s website. A replay of the conference
call webcast will also be archived and available online through the
Investor Relations section of the Company’s website.
About LaSalle Hotel Properties
LaSalle Hotel Properties is a leading multi-operator real estate
investment trust. The Company owns 41 properties, which are
upscale, full-service hotels, totaling approximately 10,400 guest
rooms in 11 markets in seven 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 groups, including
Hilton Hotels Corporation, Marriott International, Outrigger
Lodging Services, Noble House Hotels & Resorts, Hyatt Hotels
Corporation, Benchmark Hospitality, Two Roads Hospitality, Davidson
Hotel Company, Kimpton Hotel & Restaurant Group, LLC, Accor,
HEI Hotels & Resorts, JRK Hotel Group, Inc., Viceroy Hotel
Group, Highgate Hotels, Access Hotels & Resorts, and Provenance
Hotels.
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," “may,” “plan,” “seek,” “should,” or similar expressions.
Forward-looking statements in this press release include, among
others, statements about the Company’s asset management strategies,
resorts in Key West, and capital expenditure program. 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) risks associated
with the hotel industry, including competition for guests and
meetings from other hotels and alternative lodging companies,
increases in wages, energy costs and other operating costs,
potential unionization or union disruption, actual or threatened
terrorist attacks, any type of flu or disease-related pandemic and
downturns in general and local economic conditions, (ii) the
availability and terms of financing and capital and the general
volatility of securities markets, (iii) the Company’s dependence on
third-party managers of its hotels, including its inability to
implement strategic business decisions directly, (iv) risks
associated with the real estate industry, including environmental
contamination and costs of complying with the Americans with
Disabilities Act of 1990, as amended, and similar laws, (v)
interest rate increases, (vi) the possible failure of the Company
to maintain its qualification 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, (ix) the risk of a
material failure, inadequacy, interruption or security failure of
the Company’s or the hotel managers’ information technology
networks and systems, and (x) 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 nine months ended September 30,
September 30, 2017 2016
2017 2016 Revenues: Hotel
operating revenues: Room $ 209,019 $ 237,757 $ 609,769 $ 664,463
Food and beverage 50,191 61,718 161,803 197,090 Other operating
department 24,243 25,892 66,728
70,992 Total hotel operating revenues 283,453
325,367 838,300 932,545 Other income 2,403
1,569 9,005 5,582 Total revenues
285,856 326,936 847,305
938,127
Expenses: Hotel operating expenses:
Room 55,474 59,342 163,068 170,596 Food and beverage 37,628 44,307
116,908 137,209 Other direct 2,793 4,562 9,631 13,218 Other
indirect 69,207 78,734 212,040
230,932 Total hotel operating expenses 165,102
186,945 501,647 551,955 Depreciation and amortization 43,355 48,022
134,684 144,491 Real estate taxes, personal property taxes and
insurance 16,663 13,913 46,867 47,023 Ground rent 4,788 4,570
11,996 12,491 General and administrative 6,475 6,076 19,946 19,549
Other expenses 3,179 1,007 6,656
5,512 Total operating expenses 239,562
260,533 721,796 781,021
Operating income 46,294 66,403 125,509 157,106 Interest
income 951 167 1,408 3,497 Interest expense (10,026 ) (10,332 )
(29,276 ) (33,681 ) Loss from extinguishment of debt 0
0 (1,706 ) 0 Income
before income tax expense 37,219 56,238 95,935 126,922 Income tax
expense (1,978 ) (3,109 ) (2,208 )
(5,099 ) Income before net gain on sale of properties and sale of
note receivable 35,241 53,129 93,727 121,823 Net gain on sale of
properties and sale of note receivable 31
104,549 85,545 104,549 Net
income 35,272 157,678 179,272
226,372 Net income attributable to
noncontrolling interests: Noncontrolling interests in consolidated
entities 0 0 (8 ) (8 ) Noncontrolling interests of common units in
Operating Partnership (49 ) (203 ) (242 )
(299 ) Net income attributable to noncontrolling interests
(49 ) (203 ) (250 ) (307 ) Net income
attributable to the Company 35,223 157,475 179,022 226,065
Distributions to preferred shareholders (4,116 ) (5,405 ) (13,908 )
(12,802 ) Issuance costs of redeemed preferred shares 0
0 (2,401 ) 0 Net income
attributable to common shareholders $ 31,107 $ 152,070
$ 162,713 $ 213,263
LASALLE HOTEL PROPERTIES
Consolidated Statements of Operations
and Comprehensive Income - Continued
(in thousands, except share data)
(unaudited)
For the three months ended
For the nine months ended September 30,
September 30, 2017 2016
2017 2016 Earnings per Common Share
- Basic: Net income attributable to common shareholders
excluding amounts attributable to unvested restricted shares $ 0.27
$ 1.34 $ 1.44 $ 1.89
Earnings per
Common Share - Diluted: Net income attributable to common
shareholders excluding amounts attributable to unvested restricted
shares $ 0.27 $ 1.34 $ 1.43 $ 1.88
Weighted average number of common shares outstanding: Basic
113,007,475 112,811,403 112,961,365 112,781,732 Diluted 113,383,360
113,159,844 113,343,711 113,138,897
Comprehensive
Income: Net income $ 35,272 $ 157,678 $ 179,272 $ 226,372 Other
comprehensive income: Unrealized gain (loss) on interest rate
derivative instruments 517 3,172 (34 ) (17,051 ) Reclassification
adjustment for amounts recognized in net income 547
1,637 2,030 5,147 36,336
162,487 181,268 214,468 Comprehensive income attributable to
noncontrolling interests: Noncontrolling interests in consolidated
entities 0 0 (8 ) (8 ) Noncontrolling interests of common units in
Operating Partnership (51 ) (209 ) (245 )
(284 ) Comprehensive income attributable to noncontrolling
interests (51 ) (209 ) (253 ) (292 )
Comprehensive income attributable to the Company $ 36,285 $
162,278 $ 181,015 $ 214,176
LASALLE HOTEL PROPERTIES
FFO and EBITDA
(in thousands, except share/unit data)
(unaudited)
For the three months ended
For the nine months ended September 30,
September 30, 2017 2016
2017 2016 Net income $ 35,272 $ 157,678
$ 179,272 $ 226,372 Depreciation 43,205 47,888 134,264 144,088
Amortization of deferred lease costs 104 82 274 244 Less: Gain on
sale of properties less costs associated with sale of note
receivable (31 ) (104,549 ) (85,545 )
(104,549 )
FFO $ 78,550 $
101,099 $ 228,265 $ 266,155
Distributions to preferred shareholders (4,116 ) (5,405 ) (13,908 )
(12,802 ) Issuance costs of redeemed preferred shares 0
0 (2,401 ) 0
FFO
attributable to common shareholders and unitholders $
74,434 $ 95,694 $ 211,956
$ 253,353 Pre-opening, management transition and
severance expenses 126 231 377 4,295 Issuance costs of redeemed
preferred shares 0 0 2,401 0 Loss from extinguishment of debt 0 0
1,706 0 Estimated hurricane related repairs and cleanup costs 2,338
0 2,338 0 Non-cash ground rent 459 472
1,384 1,420
Adjusted FFO
attributable to common shareholders and unitholders $
77,357 $ 96,397 $
220,162 $ 259,068 Weighted
average number of common shares and units outstanding: Basic
113,152,698 112,956,626 113,106,588 112,926,955 Diluted 113,528,583
113,305,067 113,488,934 113,284,120
FFO attributable to common
shareholders and unitholders per diluted share/unit $ 0.66 $
0.84 $ 1.87 $ 2.24
Adjusted FFO attributable to common
shareholders and unitholders per diluted share/unit $ 0.68 $
0.85 $ 1.94 $ 2.29
For the three months ended
For the nine months ended September 30, September
30, 2017 2016 2017 2016 Net income
$ 35,272 $ 157,678 $ 179,272 $ 226,372 Interest expense 10,026
10,332 29,276 33,681 Income tax expense 1,978 3,109 2,208 5,099
Depreciation and amortization 43,355 48,022
134,684 144,491
EBITDA
$ 90,631 $ 219,141 $
345,440 $ 409,643 Pre-opening, management
transition and severance expenses 126 231 377 4,295 Loss from
extinguishment of debt 0 0 1,706 0 Estimated hurricane related
repairs and cleanup costs 2,338 0 2,338 0 Gain on sale of
properties less costs associated with sale of note receivable (31 )
(104,549 ) (85,545 ) (104,549 ) Non-cash ground rent 459
472 1,384 1,420
Adjusted EBITDA $ 93,523 $
115,295 $ 265,700 $ 310,809
Corporate expense 7,498 6,949 24,666 21,358 Interest and other
income (3,354 ) (1,736 ) (10,414 ) (9,079 ) Pro forma hotel level
adjustments, net(1) 567 (12,655 )
(7,091 ) (36,830 )
Hotel EBITDA for all properties
$ 98,234 $ 107,853 $
272,861 $ 286,258 Pro forma hotel level
adjustment related to Key West(2) (2,322 ) (4,559 )
(2,322 ) (4,559 )
Hotel EBITDA excluding Key
West $ 95,912 $ 103,294
$ 270,539 $ 281,699
(1)
Pro forma excludes (i) Mason & Rook Hotel for the first quarter
in both 2016 and 2017 because the hotel was closed for renovation
during the entire first quarter of 2016, and (ii) Hotel Deca,
Lansdowne Resort, Alexis Hotel, Hotel Triton and Westin
Philadelphia due to their dispositions in 2017 and Indianapolis
Marriott Downtown due to its disposition in July 2016.
(2)
The Marker Waterfront Resort and Southernmost Beach Resort Key West
are excluded from the third quarter in both 2016 and 2017 due to
their closure during Hurricane Irma in early September 2017 and for
a period following the storm due to subsequent building repairs and
clean up.
LASALLE HOTEL PROPERTIES
Hotel Operational Data
Schedule of Property Level Results -
Pro Forma(1)
(in thousands)
(unaudited)
For the three months ended
For the nine months ended September 30,
September 30, 2017 2016
2017 2016 Revenues: Room $
209,195 $ 219,499 $ 590,193 $ 603,719 Food and beverage 50,209
53,817 152,720 165,605 Other 24,260 21,719
64,572 59,480 Total hotel
revenues 283,664 295,035 807,485
828,804
Expenses: Room 55,530
54,951 158,299 157,358 Food and beverage 37,624 39,230 111,332
118,847 Other direct 2,782 2,734 7,697 7,575 General and
administrative 19,198 20,016 57,340 58,149 Information and
telecommunications systems 3,979 3,858 12,065 11,618 Sales and
marketing 18,330 19,166 54,974 55,771 Management fees 9,964 11,084
27,464 27,499 Property operations and maintenance 9,114 9,005
27,006 26,528 Energy and utilities 7,007 7,086 19,499 19,339
Property taxes 15,047 13,197 40,952 40,319 Other fixed expenses(2)
6,855 6,855 17,996
19,543 Total hotel expenses 185,430
187,182 534,624 542,546
Hotel EBITDA $ 98,234 $
107,853 $ 272,861 $
286,258 Hotel EBITDA Margin 34.6
% 36.6 % 33.8 % 34.5
%
(1)
This schedule includes the operating data for the three and nine
months ended September 30, 2017 for all properties owned by the
Company as of September 30, 2017. Mason & Rook Hotel is
excluded from the first quarter in both 2016 and 2017 because the
hotel was closed for renovation during the entire first quarter of
2016. Pro forma excludes the results of operations of Hotel Deca,
Lansdowne Resort, Alexis Hotel, Hotel Triton and Westin
Philadelphia due to their dispositions in 2017 and Indianapolis
Marriott Downtown due to its disposition in July 2016.
(2)
Other fixed expenses includes ground rent expense, but excludes
ground rent payments for The Roger and Harbor Court in all periods
due to the hotels being subject to capital leases of land and
building under GAAP. At The Roger, the base ground rent payments
were $99 and $298 for the three and nine months ended September 30,
2017 and 2016, respectively. At Harbor Court, the base and
participating ground rent payments were $335 and $921 for the three
and nine months ended September 30, 2017, respectively, and $334
and $1,004 for the three and nine months ended September 30, 2016,
respectively.
LASALLE HOTEL PROPERTIES
Hotel Operational Data
Schedule of Property Level Results -
Pro Forma (Excludes Key West in the Third Quarter for Both
Years)(1)
(in thousands)
(unaudited)
For the three months ended
For the nine months ended September 30,
September 30, 2017 2016
2017 2016 Revenues: Room $
203,710 $ 211,425 $ 584,708 $ 595,645 Food and beverage 48,617
51,681 151,128 163,469 Other 23,268 20,485
63,579 58,246 Total hotel
revenues 275,595 283,591 799,415
817,360
Expenses: Room 54,062
53,149 156,831 155,557 Food and beverage 36,380 37,694 110,087
117,310 Other direct 2,685 2,588 7,600 7,429 General and
administrative 18,542 19,202 56,684 57,335 Information and
telecommunications systems 3,877 3,719 11,963 11,479 Sales and
marketing 18,003 18,767 54,647 55,372 Management fees 9,636 10,608
27,137 27,024 Property operations and maintenance 8,630 8,494
26,522 26,017 Energy and utilities 6,727 6,820 19,219 19,072
Property taxes 14,786 12,921 40,691 40,043 Other fixed expenses(2)
6,355 6,335 17,495
19,023 Total hotel expenses 179,683
180,297 528,876 535,661
Hotel EBITDA $ 95,912 $
103,294 $ 270,539 $
281,699 Hotel EBITDA Margin 34.8
% 36.4 % 33.8 % 34.5
%
(1)
This schedule includes the operating data for the three and nine
months ended September 30, 2017 for all properties owned by the
Company as of September 30, 2017. Mason & Rook Hotel is
excluded from the first quarter in both 2016 and 2017 because the
hotel was closed for renovation during the entire first quarter of
2016. The Marker Waterfront Resort and Southernmost Beach Resort
Key West are excluded from the third quarter in both 2016 and 2017
due to their closure during Hurricane Irma in early September 2017
and for a period following the storm due to subsequent building
repairs and clean up. Pro forma excludes the results of operations
of Hotel Deca, Lansdowne Resort, Alexis Hotel, Hotel Triton and
Westin Philadelphia due to their dispositions in 2017 and
Indianapolis Marriott Downtown due to its disposition in July 2016.
(2)
Other fixed expenses includes ground rent expense, but excludes
ground rent payments for The Roger and Harbor Court in all periods
due to the hotels being subject to capital leases of land and
building under GAAP. At The Roger, the base ground rent payments
were $99 and $298 for the three and nine months ended September 30,
2017 and 2016, respectively. At Harbor Court, the base and
participating ground rent payments were $335 and $921 for the three
and nine months ended September 30, 2017, respectively, and $334
and $1,004 for the three and nine months ended September 30, 2016,
respectively.
LASALLE HOTEL PROPERTIES
Statistical Data for the Hotels - Pro
Forma(1)
(unaudited)
For the three months ended
For the nine months ended September 30,
September 30, 2017 2016
2017 2016 Total Portfolio Occupancy
90.2 % 90.2 % 85.3 % 85.7 % Decrease 0.0 % (0.4 )% ADR $ 243.31 $
252.32 $ 244.35 $ 247.16 Decrease (3.6 )% (1.1 )%
RevPAR
$ 219.38 $ 227.69 $
208.52 $ 211.70 Decrease (3.6
)% (1.5 )%
For the three months ended
September 30, 2017
For the nine months ended
September 30, 2017
Market Detail RevPAR Variance % Boston (3.3)% 1.9%
Chicago (8.0)% (5.1)% Los Angeles (4.8)% (6.0)% New York (1.0)%
(0.7)% Other(2) (0.4)% 0.8% San Diego Downtown (1.2)% 2.4% San
Francisco (4.0)% (7.5)% Washington, DC (6.7)% 3.5%
(1)
This schedule includes the statistical data for the three and nine
months ended September 30, 2017 for all properties owned by the
Company as of September 30, 2017. Mason & Rook Hotel is
excluded from the first quarter in both 2016 and 2017 because the
hotel was closed for renovation during the entire first quarter of
2016. The Marker Waterfront Resort and Southernmost Beach Resort
Key West are excluded from the third quarter in both 2016 and 2017
due to their closure during Hurricane Irma in early September 2017
and for a period following the storm due to subsequent building
repairs and clean up. Pro forma excludes the results of Hotel Deca,
Lansdowne Resort, Alexis Hotel, Hotel Triton and Westin
Philadelphia due to their dispositions in 2017 and Indianapolis
Marriott Downtown due to its disposition in July 2016.
(2)
Other includes The Heathman Hotel in Portland, Chaminade Resort in
Santa Cruz, Embassy Suites Philadelphia - Center City in
Philadelphia, L’Auberge Del Mar in Del Mar, and The Hilton San
Diego Resort and Paradise Point Resort in San Diego.
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 and items classified by GAAP as extraordinary, plus real
estate-related depreciation and amortization and impairment
writedowns, 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 impairments, 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. The
Company believes property-level results provide investors with
supplemental information on the ongoing operational performance of
its hotels and effectiveness of the third-party management
companies operating its 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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version on businesswire.com: http://www.businesswire.com/news/home/20171019006475/en/
LaSalle Hotel PropertiesKenneth G. Fuller or Max D.
Leinweber301/941-1500
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