Provides 2014 Outlook
LaSalle Hotel Properties (NYSE: LHO) today announced preliminary
results for the fourth quarter and year ended December 31, 2013.
The Company’s preliminary results are as follows:
Fourth Quarter
Year-to-Date 2013
2012
2013 2012 ($'s in millions except per share/unit
data)
Portfolio excluding
Park Central Hotel
RevPAR $ 157.05 $ 149.24 $ 167.39 $ 158.48 RevPAR growth 5.2% 5.6%
Hotel EBITDA Margin 29.9% 32.3% Hotel EBITDA Margin growth 142bps
84bps
Entire Portfolio
(Including Park Central Hotel)
RevPAR $ 163.96 $ 158.78 $ 167.62 $ 163.10 RevPAR growth 3.3% 2.8%
Hotel EBITDA Margin 30.6% 32.2% Hotel EBITDA Margin growth 20bps
19bps Total Revenue $ 252.0 $ 215.7 $ 977.3 $ 867.1
EBITDA(1) $ 68.0 $ 62.3 $ 290.0 $ 253.5 Adjusted EBITDA(1) $ 72.9 $
62.2 $ 300.1 $ 263.2 FFO(1) $ 51.2 $ 41.4 $ 214.9 $ 169.6 Adjusted
FFO(1) $ 56.1 $ 41.3 $ 224.9 $ 179.3 FFO per diluted share/unit(1)
$ 0.50 $ 0.47 $ 2.20 $ 1.97 Adjusted FFO per diluted share/unit(1)
$ 0.55 $ 0.47 $ 2.31 $ 2.08 Net income attributable to common
shareholders $ 14.3 $ 10.0 $ 70.6 $ 45.1 Net income attributable to
common shareholders per diluted share $ 0.14 $ 0.11 $ 0.72 $ 0.52
(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 and
adjusted FFO per share/unit. EBITDA, adjusted EBITDA, FFO, FFO per
share/unit, adjusted FFO and adjusted FFO per share/unit are
non-GAAP financial measures. See further discussion of these
non-GAAP measures and reconciliations to net income later in this
press release.
“We are very pleased with our results during the fourth quarter
as well as the full year 2013,” said Michael D. Barnello, President
and Chief Executive Officer of LaSalle Hotel Properties. “Our
portfolio delivered another year of excellent performance,
achieving new portfolio records in average daily rate, occupancy,
RevPAR and hotel EBITDA margins and we remain encouraged that there
is still substantial room to grow.”
“Additionally, we had a very successful year as we made
meaningful acquisitions in the high-barrier-to-entry, high-demand
markets of San Francisco and Key West and further strengthened our
balance sheet,” he continued. “Given the favorable supply and
demand trends, we remain excited about 2014.”
2014 Outlook
The Company is providing its 2014 outlook, which is based on an
economic environment that continues to improve and assumes no
acquisitions and no capital markets activities. The Company’s
RevPAR growth and financial expectations for 2014 are as
follows:
Current Outlook Low-end High-end
($'s in millions except per share/unit data)
RevPAR growth 5.0% 8.5% Hotel EBITDA Margins 32.5% 33.5%
Hotel EBITDA Margin Change 0 Bps 100 Bps Adjusted EBITDA $
320.0 $ 340.0 Adjusted FFO $ 238.0 $ 259.0 Adjusted FFO per diluted
share/unit $ 2.28 $ 2.48 Capital Expenditures $ 110.0 $ 130.0
Note: For comparison purposes, the RevPAR outlook for the
portfolio excluding Park Central is 3.0 to 6.0 percent.
Other Assumptions
- Casa Del Mar and Shutters on the Beach
mezzanine loan is expected to be paid off in February 2014,
resulting in EBITDA reduction of $6.3 million from 2013 to 2014;
and
- Income taxes increase to a normal run
rate of $8.0 - $10.0 million.
First Quarter 2014
Outlook
Due to the difficult comparison resulting from the presidential
inauguration in Washington, DC last year, the Company expects first
quarter RevPAR to increase 2.0 percent to 5.0 percent.
Hotel Vitale
The Company is under contract to purchase the leasehold interest
in Hotel Vitale in San Francisco, CA for $130.0 million. Hotel
Vitale is a 200-room hotel located on the Embarcadero. Closing of
this transaction is subject to City of San Francisco, as landlord,
approving the assignment of the ground lease. The 2014 Outlook
excludes this potential acquisition.
Earnings Call
The Company will release its final financial results for the
Fourth Quarter 2013 after the market closes on Wednesday, February
19, 2014. The Company will conduct its quarterly conference call on
Thursday, February 20, 2014 at 11:00 AM eastern time. To
participate in the conference call, please dial (866)
598-9773. 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 45 hotels and a mezzanine loan
secured by two hotels in Santa Monica, CA. The properties are
upscale, full-service hotels, totaling approximately 11,400 guest
rooms in 14 markets in 10 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, Commune Hotels and Resorts, 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.
For additional information or to receive press
releases via e-mail, please visit our website at
www.lasallehotels.com.
LASALLE HOTEL PROPERTIES Preliminary FFO
and EBITDA
(in millions, except per share/unit
data)
(unaudited)
For the three months ended For the year ended
December 31, December 31, 2013
2012 2013 2012 Net income attributable
to common shareholders $ 14.3 $ 10.0 $ 70.6 $ 45.1 Depreciation
36.7 31.3 143.6 123.8 Amortization of deferred lease costs 0.1 0.1
0.4 0.4 Noncontrolling interests of common units in Operating
Partnership 0.1 0 0.3 0.3
FFO
$ 51.2 $ 41.4 $ 214.9
$ 169.6 Pre-opening, management transition and
severance expenses 5.3 0 7.0 1.4 Preferred share issuance costs 0 0
1.6 4.4 Acquisition transaction costs 0 0.4 2.6 4.5 Non-cash ground
rent 0.3 0.1 1.3 0.5 Mezzanine loan discount amortization (0.7 )
(0.6 ) (2.5 ) (1.1 )
Adjusted FFO $ 56.1
$ 41.3 $ 224.9
$ 179.3 Weighted Average number of common
shares and units outstanding: Basic 101.9 87.5 97.3 86.1
Diluted 102.1 87.6 97.5 86.2
FFO per diluted share/unit $
0.50 $ 0.47 $ 2.20 $ 1.97
Adjusted FFO per diluted
share/unit $ 0.55 $ 0.47 $ 2.31 $ 2.08
For the three months ended For the year ended
December 31, December 31, 2013 2012
2013 2012 Net income attributable to common
shareholders $ 14.3 $ 10.0 $ 70.6 $ 45.1 Interest expense 15.0 14.5
57.5 52.9 Income tax (benefit) expense
(2.3
)
2.1 0.2 9.1 Depreciation and amortization 36.8 31.5 144.0 124.4
Noncontrolling interests of common units in Operating Partnership
0.1 0.1 0.3 0.3 Distributions to preferred shareholders 4.1
4.1 17.4 21.7
EBITDA $
68.0 $ 62.3 $ 290.0 $
253.5 Pre-opening, management transition and severance
expenses 5.3 0 7.0 1.4 Preferred share issuance costs 0 0 1.6 4.4
Acquisition transaction costs 0 0.4 2.6 4.5 Non-cash ground rent
0.3 0.1 1.3 0.5 Mezzanine loan discount amortization (0.7 ) (0.6 )
(2.5 ) (1.1 )
Adjusted EBITDA $ 72.9
$ 62.2 $ 300.1 $
263.2
Note: Totals may not foot due to rounding.
LASALLE HOTEL PROPERTIES Preliminary
Statistical Data for the Hotels
(unaudited)
For the three months ended For the year ended
December 31, December 31, 2013
2012 2013 2012 Total Portfolio
Occupancy 75.0 % 74.5 % 79.2 % 79.2 % Increase 0.7 % 0.1 % ADR $
218.55 $ 213.14 $ 211.52 $ 206.03 Increase 2.5 % 2.7 %
RevPAR $ 163.96 $ 158.78
$ 167.62 $ 163.10 Increase
3.3 % 2.8 %
Note:
This schedule includes operating data for all properties owned
as of December 31, 2013 for the Company's period of ownership in
2013 and the comparable period in 2012. The above numbers exclude
partial ownership for the month of August for Southernmost.
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.
LaSalle Hotel PropertiesBruce A. Riggins or Kenneth G. Fuller,
301-941-1500
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