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:
Fourth Quarter
Year-to-Date 2012 2011 2012 2011
($'s in millions except per share/unit data) Total Revenue $
215.7 $ 179.0 $ 867.1 $ 719.0 Net income to common shareholders $
10.0 $ 0.6 $ 45.1 $ 12.9 Net income to common shareholders per
diluted share $ 0.11 $ 0.01 $ 0.52 $ 0.16 EBITDA(1) $ 62.3 $ 47.1 $
253.5 $ 201.0 Adjusted EBITDA(1) $ 62.2 $ 49.2 $ 263.2 $ 204.4
FFO(1) $ 41.4 $ 28.2 $ 169.6 $ 123.3 Adjusted FFO(1) $ 41.3 $ 30.3
$ 179.3 $ 127.7 FFO per diluted share/unit(1) $ 0.47 $ 0.34 $ 1.97
$ 1.52 Adjusted FFO per diluted share/unit(1) $ 0.47 $ 0.36 $ 2.08
$ 1.57 RevPAR $ 154.88 $ 149.25 $ 160.38 $ 153.39 RevPAR
growth 3.8 % 4.6 % Hotel EBITDA Margin 30.6 % 30.7 % 32.1 % 31.0 %
Hotel EBITDA Margin growth -17 bps 113 bps
(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 $146.0 million remained.
2013 Outlook
The Company is providing its 2013 outlook based on an economic
environment that continues to improve and assuming no acquisitions
and no capital markets activities. The Company’s RevPAR growth and
financial expectations for 2013 are as follows:
Current Outlook Low-end
High-end ($'s in millions except per share/unit data)
Excluding Park
Central Hotel
RevPAR growth 3.0% 6.0% Hotel EBITDA Margins 31.4% 32.4% Hotel
EBITDA Margin Change 0 bps 100 bps
Including Park
Central Hotel
RevPAR growth 0.0% 3.0% Hotel EBITDA Margins 31.5% 32.5% Hotel
EBITDA Margin Change -50 bps 50 bps
Entire Portfolio
(Including Park Central Hotel)
Adjusted EBITDA $ 275.0 $ 295.0 Adjusted FFO $ 195.0 $ 214.0
Adjusted FFO per diluted share/unit $ 2.03 $ 2.23 Income Tax
Expenses $ 4.5 $ 5.5
Capital
Investments
Portfolio Excluding Park Central $ 70.0 $ 75.0 Park Central $ 60.0
$ 70.0 Portfolio Including Park Central $ 130.0 $ 145.0
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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