Company achieves highest-ever ADR, Occupancy,
RevPAR and Hotel EBITDA Margin
LaSalle Hotel Properties (NYSE: LHO) today announced results for
the quarter and year ended December 31, 2013. The Company’s results
include the following:
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) $ 68.6 $ 62.3 $ 290.7 $ 253.5 Adjusted EBITDA(1) $ 72.9 $
62.2 $ 300.1 $ 263.2 FFO(1) $ 51.5 $ 41.4 $ 215.2 $ 169.6 Adjusted
FFO(1) $ 55.8 $ 41.3 $ 224.6 $ 179.3 FFO per diluted share/unit(1)
$ 0.50 $ 0.47 $ 2.21 $ 1.97 Adjusted FFO per diluted share/unit(1)
$ 0.55 $ 0.47 $ 2.30 $ 2.08 Net income attributable to common
shareholders $ 14.7 $ 10.0 $ 71.0 $ 45.1 Net income attributable to
common shareholders per diluted share $ 0.14 $ 0.11 $ 0.73 $ 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, 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 Results and
Activities
Results excluding Park Central
Hotel
- RevPAR excluding Park Central
Hotel: Room revenue per available room (“RevPAR”) for the
quarter ended December 31, 2013 increased 5.2 percent to $157.05,
as a result of a 3.3 percent increase in average daily rate (“ADR”)
to $212.21 and a 1.9 percent increase in occupancy to 74.0
percent.
- Hotel EBITDA Margin excluding Park
Central Hotel: The Company’s hotel EBITDA margin for the fourth
quarter was 29.9 percent, a 142 basis point improvement compared to
the comparable prior year period.
Entire Portfolio Results
- RevPAR: RevPAR for the quarter
ended December 31, 2013 increased 3.3 percent to $163.96, as a
result of a 2.5 percent increase in ADR to $218.55 and a 0.7
percent increase in occupancy to 75.0 percent.
- Hotel EBITDA Margin: The
Company’s hotel EBITDA margin for the fourth quarter was 30.6
percent, a 20 basis point increase compared to the comparable prior
year period.
- Adjusted EBITDA: The Company’s
adjusted EBITDA was $72.9 million, an increase of 17.2 percent over
the fourth quarter of 2012. During the fourth quarter of
2013, the Company’s financial results were impacted by $3.3 million
of EBITDA displacement from the Park Central and WestHouse
renovation project.
- Adjusted FFO: The Company
generated fourth quarter adjusted FFO of $55.8 million, or $0.55
per diluted share/unit, compared to $41.3 million or $0.47 per
diluted share/unit for the comparable prior year period.
- Capital Markets: During the
fourth quarter 2013, the Company sold 7,705,000 common shares of
beneficial interest, including the exercise of the underwriters’
option to purchase additional shares, at a public offering price of
$30.05 per share, resulting in net proceeds of $228.4 million.
- Capital Investments: The Company
invested $34.6 million of capital in its hotels, much of which
pertained to the continuation of the Park Central Hotel and
WestHouse renovation in New York City. During the fourth quarter,
the Company also completed a guestroom renovation at Viceroy Santa
Monica. Renovations were commenced at Onyx Hotel in Boston, Hilton
Alexandria Old Town, as well as Hotel George and Donovan House in
Washington, DC.
- Dividends: On December 13, 2013,
the Company declared a fourth quarter 2013 dividend of $0.28 per
common share of beneficial interest.
“We were pleased to complete 2013 with another quarter of strong
results, topping off a successful year for the Company,” said
Michael D. Barnello, President and Chief Executive Officer of
LaSalle Hotel Properties. “LaSalle had a solid year operationally
and with respect to acquisitions and capital markets activities. We
achieved new portfolio records for ADR, Occupancy, RevPAR and hotel
EBITDA margins. As a result, our corporate adjusted EBITDA grew 14
percent during 2013 and AFFO per share was up 11 percent.”
“We opportunistically issued preferred equity at 6.375% and
achieved the lowest coupon on record for a lodging REIT,” he
continued. “We also made meaningful acquisitions in the
high-barrier-to-entry, high-demand markets of San Francisco and Key
West.”
“During the last quarter of 2013, we completed our renovation of
Park Central Hotel and the creation of WestHouse. We are ecstatic
about the product we have to offer at both hotels. The project was
transformational and we are very encouraged about the assets’
prospects for growth.”
“As we look to 2014, we started the year strong by extending the
maturities and lowering interest costs with respect to our $750.0
million revolver and $300.0 million term loan. Furthermore, we have
the ability to expand those instruments by $500.0 million,
collectively, providing additional capacity to execute our business
plan going forward.”
“Our industry continues to operate in a favorable environment,
with an improving economy, continued lodging industry demand growth
and limited supply growth. We continue to make impactful
investments in our hotel portfolio and are positioned to deliver
another year of solid results.”
Full Year 2013 Results and
Activities
Results excluding Park Central
Hotel
- RevPAR: RevPAR increased 5.6
percent to $167.39, as a result of a 3.1 percent increase in
occupancy to 80.0 percent and a 2.4 percent increase in ADR to
$209.19.
- Hotel EBITDA Margin: The
Company’s hotel EBITDA margin was 32.3 percent, which represents an
improvement of 84 basis points compared to 2012.
Entire Portfolio Results
- RevPAR: RevPAR increased 2.8
percent to $167.62, as a result of a 2.7 percent increase in ADR to
$211.52 and a 0.1 percent increase in occupancy to 79.2 percent. In
2013, the Company achieved its highest-ever reported ADR, Occupancy
and RevPAR.
- Hotel EBITDA Margin: The
Company’s hotel EBITDA margin was 32.2 percent, which was its
highest-ever reported margin and represents an improvement of 19
basis points compared to 2012.
- Adjusted EBITDA: The Company’s
adjusted EBITDA was $300.1 million, an increase of 14.0 percent
over 2012. During 2013, the Company’s financial results were
impacted by $11.3 million of EBITDA displacement from the Park
Central and WestHouse renovation project.
- Adjusted FFO: The Company
generated adjusted FFO of $224.6 million, or $2.30 per diluted
share/unit, an increase of 10.6 percent over the prior year.
- Acquisitions: The Company
invested $303.8 million to acquire four assets. The 2013
acquisitions include the following:
- Hotel Triton and Harbor Court Hotel,
both in San Francisco, CA for $47.8 million on August 1;
- Serrano Hotel in San Francisco, CA for
$71.5 million on August 21; and
- Southernmost Hotel Collection in Key
West, FL for $184.5 million on August 27.
- Capital Markets: The Company
completed several capital markets initiatives during 2013 including
the following:
- During first quarter 2013, the Company
sold 4,400,000 Series I Cumulative Redeemable Preferred Shares at a
6.375 percent coupon, resulting in proceeds of $110.0 million.
- During the second quarter 2013, the
Company redeemed 4,000,000 Series G Cumulative Redeemable Preferred
Shares, which were subject to a 7.25 percent coupon.
- During May 2013, the Company sold
721,706 common shares through its ATM program for net proceeds of
$19.7 million.
- During the fourth quarter 2013, the
Company sold 7,705,000 common shares of beneficial interest,
including the exercise of the underwriters’ option to purchase
additional shares, at a public offering price of $30.05 per share,
resulting in net proceeds of $228.4 million.
- Capital Investments: The Company
invested $119.4 million of capital in its hotels throughout the
year, completing the Park Central and WestHouse renovation in
Manhattan, the renovation of Hotel Monaco San Francisco, Hotel
Madera in Washington, DC, Hotel Deca in Seattle and the Viceroy
Santa Monica. The Company’s 2013 capital expenditures include $57.8
million of costs for the Park Central and WestHouse project. The
Company’s capital investments also include the commencement of the
renovation of the Onyx Hotel in Boston, Hilton Alexandria Old Town,
as well as Hotel George and Donovan House in Washington, DC.
Balance Sheet
As of December 31, 2013, the Company had total outstanding debt
of $1.3 billion, including $220.0 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 3.9 times as of December 31, 2013 and its
fixed charge coverage ratio was 3.4 times. For the fourth quarter,
the Company’s weighted average interest rate was 3.7 percent. As of
December 31, 2013, the Company had $13.4 million of cash and cash
equivalents on its balance sheet and capacity of $552.1 million
available on its credit facilities.
Subsequent Events
In January 2014, the Company refinanced $1.05 billion of debt,
reducing the interest cost on its $750.0 million revolver and
$300.0 million five-year term loan. The maturities were extended to
January 2019, including two six-month extension options for the
revolver, subject to certain conditions. The revolver and term loan
include accordion features which, subject to certain conditions,
entitle the Company to request additional lender commitments,
allowing for total commitments up to $1.05 billion for the revolver
and $500.0 million for the term loan.
The interest rate for the new revolver is based on a pricing
grid with a range of 170 to 245 basis points over LIBOR, based on
the Company’s leverage ratio and is currently LIBOR plus 170 basis
points, or 1.86 percent. Pricing for the term loan is LIBOR plus
160 to 235 basis points, based on the Company’s leverage ratio. The
term loan remains swapped, locking in LIBOR through August 2017,
resulting in a current interest rate of 2.38 percent.
On February 10, 2014, the mezzanine loan on Casa del Mar and
Shutters on the Beach was repaid by the borrower. The Company
received repayment of the principal amount, which was $72.0
million. The Company acquired the mezzanine loan on July 13, 2012
for $67.4 million. Inclusive of interest payments, the Company’s
net profit on its investment was $14.7 million, over 19 months,
which represented a 14.2 percent unleveraged IRR. Proceeds from the
repayment were used to reduce the outstanding balance on the
Company’s revolver.
Hotel Vitale
The Company is under contract to purchase the leasehold interest
in Hotel Vitale in San Francisco, CA for $130.0 million. Hotel
Vitale is a 200-room hotel located on the Embarcadero. Closing of
this transaction is subject to City of San Francisco, as landlord,
approving the assignment of the ground lease. The 2014 outlook
excludes this potential acquisition.
2014 Outlook
The Company is providing its 2014 outlook, which is based on an
economic environment that continues to improve and assumes no
acquisitions and no capital markets activities. The acquisition of
Hotel Vitale is not included in the 2014 outlook. The Company’s
RevPAR growth and financial expectations for 2014 are as
follows:
Current Outlook Low-end
High-end ($'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
- The Casa Del Mar and Shutters on the
Beach mezzanine loan payoff results in EBITDA reduction of $6.3
million from 2013 to 2014; and
- Income taxes increase to a normalized
run rate of $8.0 - $10.0 million compared to $0.5 million in
2013.
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. The Company
expects its portfolio to generate adjusted EBITDA of $42.5 million
to $45.5 million and adjusted FFO per share/unit of $0.29 to
$0.32.
Earnings Call
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. 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.
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 the
closing of the purchase of Hotel Vitale, outlook for RevPAR,
adjusted FFO, adjusted EBITDA and derivations thereof. 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, 2013
2012 2013 2012 Revenues: Hotel
operating revenues: Room $ 171,748 $ 146,015 $ 667,444 $ 595,330
Food and beverage 63,285 54,008 238,682 210,306 Other operating
department 15,229 14,405 63,230 56,510
Total hotel operating revenues 250,262 214,428 969,356 862,146
Other income 1,781 1,236 7,937 4,929
Total revenues 252,043 215,664 977,293 867,075
Expenses: Hotel operating expenses: Room 45,766
38,361 170,555 150,564 Food and beverage 43,984 38,406 165,855
149,894 Other direct 5,279 4,935 22,445 20,778 Other indirect
62,341 54,276 237,386 212,001 Total
hotel operating expenses 157,370 135,978 596,241 533,237
Depreciation and amortization 36,809 31,452 143,991 124,363 Real
estate taxes, personal property taxes and insurance 14,751 11,621
53,374 44,551 Ground rent 2,582 1,975 11,117 8,588 General and
administrative 5,777 5,134 22,001 19,769 Acquisition transaction
costs (41 ) 441 2,646 4,498 Other expenses 5,443 626
9,361 3,017 Total operating expenses 222,691
187,227 838,731 738,023 Operating income
29,352 28,437 138,562 129,052 Interest income 2,467 2,397 9,679
4,483 Interest expense (14,999 ) (14,505 ) (57,516 ) (52,896 )
Income before income tax benefit (expense) 16,820 16,329 90,725
80,639 Income tax benefit (expense) 2,011 (2,142 ) (470 )
(9,062 ) Net income 18,831 14,187 90,255
71,577 Net income attributable to noncontrolling interests:
Noncontrolling interests in consolidated entities (9 ) 0 (17 ) 0
Noncontrolling interests of common units in Operating Partnership
(60 ) (57 ) (303 ) (281 ) Net income attributable to noncontrolling
interests (69 ) (57 ) (320 ) (281 ) Net income attributable to the
Company 18,762 14,130 89,935 71,296 Distributions to preferred
shareholders (4,107 ) (4,166 ) (17,385 ) (21,733 ) Issuance costs
of redeemed preferred shares 0 0 (1,566 ) (4,417 )
Net income attributable to common shareholders $ 14,655 $
9,964 $ 70,984 $ 45,146
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, 2013
2012 2013 2012 Earnings per Common
Share - Basic: Net income attributable to common shareholders
excluding amounts attributable to unvested restricted shares $ 0.14
$ 0.11 $ 0.73 $ 0.52
Earnings per
Common Share - Diluted: Net income attributable to common
shareholders excluding amounts attributable to unvested restricted
shares $ 0.14 $ 0.11 $ 0.73 $ 0.52
Weighted average number of common shares outstanding: Basic
101,585,583 87,186,328 97,041,484 85,757,969 Diluted 101,820,954
87,325,471 97,228,671 85,897,274
Comprehensive
Income: Net income $ 18,831 $ 14,187 $ 90,255 $ 71,577 Other
comprehensive income (loss): Unrealized gain (loss) on interest
rate derivative instruments 2,120 775 12,375
(7,759 ) Comprehensive income 20,951 14,962 102,630 63,818
Comprehensive income attributable to noncontrolling interests:
Noncontrolling interests in consolidated entities (9 ) 0 (17 ) 0
Noncontrolling interests of common units in Operating Partnership
(65 ) (62 ) (340 ) (257 ) Comprehensive income attributable to
noncontrolling interests (74 ) (62 ) (357 ) (257 ) Comprehensive
income attributable to the Company $ 20,877 $ 14,900
$ 102,273 $ 63,561
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, 2013
2012 2013 2012 Net income attributable
to common shareholders $ 14,655 $ 9,964 $ 70,984 $ 45,146
Depreciation 36,706 31,326 143,560 123,809 Amortization of deferred
lease costs 86 100 355 371 Noncontrolling interests: Noncontrolling
interests in consolidated entities 9 0 17 0 Noncontrolling
interests of common units in Operating Partnership 60 57
303 281
FFO $
51,516 $ 41,447 $ 215,219
$ 169,607 Pre-opening, management transition and
severance expenses 4,693 (93 ) 6,420 1,447 Preferred share issuance
costs 0 0 1,566 4,417 Acquisition transaction costs (41 ) 441 2,646
4,498 Non-cash ground rent 324 112 1,305 454 Mezzanine loan
discount amortization (669 ) (583 ) (2,524 ) (1,074 )
Adjusted
FFO $ 55,823 $ 41,324
$ 224,632 $ 179,349
Weighted Average number of common shares and units
outstanding: Basic 101,881,883 87,482,628 97,337,784 86,054,269
Diluted 102,117,254 87,621,771 97,524,971 86,193,574
FFO per
diluted share/unit $ 0.50 $ 0.47 $ 2.21 $ 1.97
Adjusted FFO
per diluted share/unit $ 0.55 $ 0.47 $ 2.30 $ 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 $ 14,655 $ 9,964 $ 70,984 $ 45,146 Interest expense
14,999 14,505 57,516 52,896 Income tax (benefit) expense (2,011 )
2,142 470 9,062 Depreciation and amortization 36,809 31,452 143,991
124,363 Noncontrolling interests: Noncontrolling interests in
consolidated entities 9 0 17 0 Noncontrolling interests of common
units in Operating Partnership 60 57 303 281 Distributions to
preferred shareholders 4,107 4,166 17,385
21,733
EBITDA $ 68,628 $
62,286 $ 290,666 $ 253,481
Pre-opening, management transition and severance expenses 4,693 (93
) 6,420 1,447 Preferred share issuance costs 0 0 1,566 4,417
Acquisition transaction costs (41 ) 441 2,646 4,498 Non-cash ground
rent 324 112 1,305 454 Mezzanine loan discount amortization (669 )
(583 ) (2,524 ) (1,074 )
Adjusted EBITDA $
72,935 $ 62,163 $ 300,079
$ 263,223 Corporate expense 7,842 6,618 29,112 23,621
Interest and other income (4,037 ) (3,526 ) (16,340 ) (9,212 )
Hotel level adjustments, net (146 ) 8,203 (1,082 ) 25,068
Hotel EBITDA $ 76,594 $
73,458 $ 311,769 $
302,700
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,
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 Serrano and Southernmost.
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, 2013
2012 2013 2012 Revenues: Room $
171,748 $ 166,327 $ 666,633 $ 649,884 Food and beverage 63,284
61,480 238,502 237,060 Other 15,249 13,784 62,662
58,322 Total hotel revenues 250,281 241,591
967,797 945,266
Expenses: Room
45,766 43,282 170,405 163,796 Food and beverage 43,984 43,676
165,727 167,936 Other direct 5,173 4,990 21,961 21,739 General and
administrative 20,494 20,209 76,636 74,220 Sales and marketing
15,994 15,748 63,298 62,072 Management fees 8,770 8,819 32,830
32,107 Property operations and maintenance 8,910 9,103 33,483
33,862 Energy and utilities 6,488 6,352 25,846 25,817 Property
taxes 13,160 11,530 48,174 44,188 Other fixed expenses 4,948
4,424 17,668 16,829 Total hotel expenses
173,687 168,133 656,028 642,566
Hotel EBITDA $ 76,594 $
73,458 $ 311,769 $
302,700 Hotel EBITDA Margin 30.6
% 30.4 % 32.2 % 32.0
% 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
Serrano and Southernmost. Palomar DC, L'Auberge, Liberty, Harbor
Court, Triton, Serrano, and Southernmost are shown in 2012 for
their comparative period of ownership in 2013. 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, 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
LaSalle (NYSE:LHO)
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