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, 2014. The Company’s results
include the following:
Fourth Quarter Year-to-Date
2014 2013 % Var. 2014 2013 %
Var. ($'s in millions except per share/unit data) RevPAR
$ 181.49 $ 168.57 7.7% $ 188.09 $ 172.81 8.8% EBITDA Margin 32.0%
30.4% 33.2% 32.1% EBITDA Margin Growth
163 bps
101 bps
Total Revenue $ 269.8 $ 252.0 7.1% $ 1,109.8 $ 977.3 13.6%
EBITDA(1) $ 79.4 $ 68.6 15.7% $ 429.0 $ 290.7 47.6% Adjusted
EBITDA(1) $ 80.5 $ 72.9 10.4% $ 343.8 $ 300.1 14.6% FFO(1) $ 61.9 $
51.5 20.2% $ 259.9 $ 215.2 20.8% Adjusted FFO(1) $ 63.0 $ 55.8
12.9% $ 270.5 $ 224.6 20.4% FFO per diluted share/unit(1) $ 0.58 $
0.50 16.0% $ 2.48 $ 2.21 12.2% Adjusted FFO per diluted
share/unit(1) $ 0.59 $ 0.55 7.3% $ 2.58 $ 2.30 12.2% Net income
attributable to common shareholders $ 22.8 $ 14.7 55.1% $ 197.6 $
71.0 178.3% Net income attributable to common shareholders per
diluted share $ 0.21 $ 0.14 50.0% $ 1.88 $ 0.73 157.5%
(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
- RevPAR: Room revenue per
available room (“RevPAR”) for the quarter ended December 31, 2014
increased 7.7 percent to $181.49, as a result of a 5.7 percent
increase in average daily rate (“ADR”) to $235.04 and a 1.8 percent
improvement in occupancy to 77.2 percent.
- Hotel EBITDA Margin: The
Company’s hotel EBITDA margin for the fourth quarter increased 163
basis points from the comparable prior year period to 32.0
percent.
- Adjusted EBITDA: The Company’s
adjusted EBITDA was $80.5 million, an increase of 10.4 percent over
the fourth quarter of 2013.
- Adjusted FFO: The Company
generated fourth quarter adjusted FFO of $63.0 million, or $0.59
per diluted share/unit, compared to $55.8 million, or $0.55 per
diluted share/unit, for the comparable prior year period, a per
share/unit increase of 7.3 percent.
- Dividend: On December 15, the
Company declared a fourth quarter 2014 dividend of $0.375 per
common share of beneficial interest. The dividend represents an
annual run rate of $1.50 per share and a 3.6 percent yield based on
the closing share price on February 17, 2015.
- Capital Markets: During the
fourth quarter 2014, the Company sold 8,740,000 common shares of
beneficial interest, including the exercise of the underwriters’
option to purchase additional shares, at a public offering price of
$39.90 per share, resulting in net proceeds of $348.5 million.The
Company did not sell any shares under its ATM program during the
fourth quarter or to date in the first quarter of 2015.
- Capital Investments: The Company
invested $40.0 million of capital in its hotels. The Company
commenced renovations at Sofitel Washington, DC, The Grafton on
Sunset in West Hollywood, Hilton San Diego Gaslamp Quarter, Villa
Florence in San Francisco, Hyatt Boston Harbor and Westin
Philadelphia.
“We were pleased to complete 2014 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
14.6 percent during 2014 and adjusted FFO per share was up 12.2
percent.”
“During 2014, we executed two meaningful acquisitions within
highly sought after west coast markets, representing our sixth
asset in San Francisco and our first hotel in Portland,” he
continued. “These investments brought our five-year acquisition
total to $2.0 billion, and we are excited that we were able to
start off 2015 by acquiring our seventh hotel in San Francisco in
January for $350.0 million.”
“In addition to our acquisitions activities, we sold two
non-core assets, which were both excellent long-term investments
for the Company. We owned the Hotel Viking for 15 years and it
generated a 10.7 percent unleveraged IRR. We owned the Hilton
Alexandria Old Town for 10 years and it produced a 13.5 percent
unleveraged IRR.”
“U.S. lodging demand continued to exceed our expectations, with
its growth rate accelerating during each successive quarter in
2014. Lodging industry ADR continued on its trajectory of strong
growth as well, as supply growth remained constrained. We continue
to make impactful investments in our hotel portfolio and are
well-positioned to deliver another year of solid results.”
Full Year 2014 Results and
Activities
- RevPAR: RevPAR increased 8.8
percent to $188.09, as a result of a 7.4 percent increase in ADR to
$231.53 and a 1.3 percent improvement in occupancy to 81.2 percent.
In 2014, the Company achieved its highest-ever reported ADR,
occupancy and RevPAR.
- Hotel EBITDA Margin: The
Company’s hotel EBITDA margin was 33.2 percent, which was its
highest-ever reported margin and represents an improvement of 101
basis points compared to 2013.
- Adjusted EBITDA: The Company’s
adjusted EBITDA was $343.8 million, an increase of 14.6 percent
over 2013.
- Adjusted FFO: The Company
generated adjusted FFO of $270.5 million, or $2.58 per diluted
share/unit, a per share/unit increase of 12.2 percent.
- Hotel Acquisitions: The Company
invested $194.3 million to acquire two assets. The 2014
acquisitions include the following:
- Hotel Vitale in San Francisco, CA for
$130.0 million on April 2; and
- The Heathman Hotel in Portland, OR for
$64.3 million on December 18.
- Hotel Dispositions: The Company
sold two non-core properties, resulting in $170.4 million in
proceeds. The 2014 dispositions include the following:
- Hilton Alexandria Old Town in
Alexandria, VA for $93.4 million on June 17; and
- Hotel Viking in Newport, RI for $77.0
million on September 10.
- Mezzanine Loan Repayment: 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.
- Capital Markets: The Company
completed several capital markets initiatives during 2014,
including the following:
- During the first quarter 2014, the
Company refinanced $1.05 billion of debt, reducing the interest
cost on its $750.0 million senior unsecured credit facility and
$300.0 million five-year term loan.
- During the second quarter 2014, the
Company repaid the $8.7 million outstanding mortgage, secured by
Hotel Deca in Seattle, WA.
- During the third quarter 2014, the
Company redeemed all of its outstanding 7.25 percent Series G
Preferred Shares for $58.7 million plus accrued dividends through
the redemption date.
- During the fourth quarter 2014, the
Company sold 8,740,000 common shares of beneficial interest,
including the exercise of the underwriters’ option to purchase
additional shares, at a public offering price of $39.90 per share,
resulting in net proceeds of $348.5 million.
- Capital Investments: The Company
invested $102.1 million of capital in its hotels throughout the
year, completing the renovation of Onyx Hotel in Boston, as well as
Hotel George and The Donovan in Washington, DC. The Company’s 2014
capital expenditures also included the commencement of the
renovations of the Sofitel Washington, DC, The Grafton on Sunset in
West Hollywood, Hilton San Diego Gaslamp Quarter, Villa Florence in
San Francisco, Hyatt Boston Harbor and Westin Philadelphia.
Balance Sheet
As of December 31, 2014, the Company had total outstanding debt
of $1.0 billion, with no outstanding borrowings 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 2.9 times as of December 31, 2014 and its
fixed charge coverage ratio was 4.2 times. After acquiring the Park
Central San Francisco in January 2015, pro forma total net debt to
trailing 12 month Corporate EBITDA was 3.5 times. For the fourth
quarter, the Company’s weighted average interest rate was 3.9
percent. As of December 31, 2014, the Company had capacity of
$772.4 million available on its credit facilities. As of February
18, 2015, the Company has approximately $500 million available on
its credit facilities.
Subsequent Event
On January 23, 2015, the Company acquired the fee simple
interest in the 681-room Westin Market Street in San Francisco for
$350.0 million. At closing, the Company renamed the hotel Park
Central San Francisco. Highgate Hotels will continue to manage the
asset as an independent hotel on behalf of the Company.
2015 Outlook
The Company is providing its 2015 outlook, which is based on an
economic environment that continues to improve and assumes no
additional acquisitions, dispositions or capital markets
activities. The Company’s RevPAR growth and financial expectations
for 2015 are as follows:
Current Outlook Low-end
High-end ($'s in millions except per share/unit data)
RevPAR growth 4.5%
6.5% *
Hotel EBITDA Margin Change
50 bps
150 bps
Adjusted EBITDA $ 377.0 $ 395.0 Adjusted FFO $ 304.0 $ 322.5
Adjusted FFO per diluted share/unit $ 2.67 $ 2.84 Income Tax
Expense $ 3.0 $ 6.0 Capital Expenditures $ 130.0 $ 175.0
*As a note to the Company’s RevPAR Outlook, 2015 will be
negatively affected by the short-term RevPAR impact associated with
removing the Westin flag at Park Central San Francisco. The Company
estimates this RevPAR impact will be 50 to 75 basis points for the
full year, which is already included in the guidance above. Despite
the RevPAR impact at Park Central San Francisco, EBITDA will be
positively affected from the outset, based on expense savings from
operating as an independent hotel and the implementation of the
Company’s asset management best practices.
First Quarter 2015
Outlook
The Company expects first quarter RevPAR to increase 4.0 percent
to 5.0 percent, which is negatively impacted by 100 to 125 basis
points due to Park Central San Francisco, as mentioned above as a
note to the Company’s RevPAR Outlook. The Company expects its
portfolio to generate adjusted EBITDA of $51.0 million to $54.0
million and adjusted FFO per share/unit of $0.35 to $0.37.
Investor Presentation
An updated copy of the investor presentation is available under
the Investor Relations section of the Company’s website,
http://www.lasallehotels.com. This presentation includes new case
studies. The previous case studies are included in our 2014
Investor Day presentation, which will remain on the Company’s
website as well.
Earnings Call
The Company will conduct its quarterly conference call on
Thursday, February 19, 2015 at 11:00 AM eastern time. To
participate in the conference call, please dial (877)
857-6163. 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 46 hotels. The properties are
upscale, full-service hotels, totaling more than 11,900 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
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, 2014 2013
2014 2013 Revenues: Hotel
operating revenues: Room $ 186,096 $ 171,748 $ 773,801 $ 667,444
Food and beverage 63,735 63,285 253,656 238,682 Other operating
department 17,895 15,229 74,000
63,230 Total hotel operating revenues 267,726
250,262 1,101,457 969,356 Other income 2,081
1,781 8,321 7,937 Total revenues
269,807 252,043 1,109,778
977,293
Expenses: Hotel operating expenses:
Room 49,457 45,766 196,952 170,555 Food and beverage 45,700 43,984
183,530 165,855 Other direct 5,300 5,279 23,800 22,445 Other
indirect 64,584 62,341 264,508
237,386 Total hotel operating expenses 165,041
157,370 668,790 596,241 Depreciation and amortization 39,148 36,809
155,035 143,991 Real estate taxes, personal property taxes and
insurance 14,595 14,751 57,805 53,374 Ground rent 3,648 2,582
14,667 11,117 General and administrative 6,028 5,777 23,832 22,001
Acquisition transaction costs 528 (41 ) 2,379 2,646 Other expenses
539 5,443 7,369
9,361 Total operating expenses 229,527
222,691 929,877 838,731
Operating income 40,280 29,352 179,901 138,562 Interest income 11
2,467 1,812 9,679 Interest expense (13,585 ) (14,999 ) (56,628 )
(57,516 ) Loss from extinguishment of debt 0 0
(2,487 ) 0 Income before income tax
(expense) benefit 26,706 16,820 122,598 90,725 Income tax (expense)
benefit (818 ) 2,011 (2,306 )
(470 ) Income before gain on sale of properties 25,888 18,831
120,292 90,255 Gain on sale of properties 0 0
93,205 0 Net income 25,888
18,831 213,497 90,255 Net income attributable to noncontrolling
interests: Noncontrolling interests in consolidated entities (8 )
(9 ) (16 ) (17 ) Noncontrolling interests of common units in
Operating Partnership (79 ) (60 ) (636 )
(303 ) Net income attributable to noncontrolling interests
(87 ) (69 ) (652 ) (320 ) Net income
attributable to the Company 25,801 18,762 212,845 89,935
Distributions to preferred shareholders (3,042 ) (4,107 ) (14,333 )
(17,385 ) Issuance costs of redeemed preferred shares 0
0 (951 ) (1,566 ) Net income
attributable to common shareholders $ 22,759 $ 14,655
$ 197,561 $ 70,984
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, 2014 2013
2014 2013 Earnings per Common Share
- Basic: Net income attributable to common shareholders
excluding amounts attributable to unvested restricted shares $ 0.22
$ 0.14 $ 1.89 $ 0.73
Earnings per
Common Share - Diluted: Net income attributable to common
shareholders excluding amounts attributable to unvested restricted
shares $ 0.21 $ 0.14 $ 1.88 $ 0.73
Weighted average number of common shares outstanding: Basic
105,550,157 101,585,583 104,188,785 97,041,484 Diluted 105,902,098
101,820,954 104,545,895 97,228,671
Comprehensive
Income: Net income $ 25,888 $ 18,831 $ 213,497 $ 90,255 Other
comprehensive (loss) income: Unrealized (loss) gain on interest
rate derivative instruments (1,329 ) 1,025 544 8,127
Reclassification adjustment for amounts recognized in net income
(1,113 ) 1,095 (4,410 ) 4,248
23,446 20,951 209,631 102,630 Comprehensive income
attributable to noncontrolling interests: Noncontrolling interests
in consolidated entities (8 ) (9 ) (16 ) (17 ) Noncontrolling
interests of common units in Operating Partnership (72 )
(65 ) (625 ) (340 ) Comprehensive income
attributable to noncontrolling interests (80 ) (74 )
(641 ) (357 ) Comprehensive income attributable to
the Company $ 23,366 $ 20,877 $ 208,990 $
102,273
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, 2014 2013
2014 2013 Net income attributable to
common shareholders $ 22,759 $ 14,655 $ 197,561 $ 70,984
Depreciation 39,012 36,706 154,585 143,560 Amortization of deferred
lease costs 86 86 347 355 Noncontrolling interests: Noncontrolling
interests in consolidated entities 8 9 16 17 Noncontrolling
interests of common units in Operating Partnership 79 60 636 303
Less: Net gain on sale of properties 0 0
(93,205 ) 0
FFO $
61,944 $ 51,516 $ 259,940
$ 215,219 Pre-opening, management transition and
severance expenses 6 4,693 3,884 6,420 Preferred share issuance
costs 0 0 951 1,566 Acquisition transaction costs 528 (41 ) 2,379
2,646 Loss from extinguishment of debt 0 0 2,487 0 Non-cash ground
rent 497 324 1,820 1,305 Mezzanine loan discount amortization
0 (669 ) (986 ) (2,524 )
Adjusted FFO $ 62,975 $
55,823 $ 270,475 $
224,632 Weighted average number of common shares
and units outstanding: Basic 105,846,457 101,881,883
104,485,085 97,337,784 Diluted 106,198,398 102,117,254 104,842,195
97,524,971
FFO per diluted share/unit $ 0.58 $ 0.50 $ 2.48 $
2.21
Adjusted FFO per diluted share/unit $ 0.59 $ 0.55 $
2.58 $ 2.30
For the three months ended
For the year ended December 31, December 31,
2014 2013 2014 2013 Net income
attributable to common shareholders $ 22,759 $ 14,655 $ 197,561 $
70,984 Interest expense 13,585 14,999 56,628 57,516 Loss from
extinguishment of debt 0 0 2,487 0 Income tax expense (benefit) 818
(2,011 ) 2,306 470 Depreciation and amortization 39,148 36,809
155,035 143,991 Noncontrolling interests: Noncontrolling interests
in consolidated entities 8 9 16 17 Noncontrolling interests of
common units in Operating Partnership 79 60 636 303 Distributions
to preferred shareholders 3,042 4,107
14,333 17,385
EBITDA $
79,439 $ 68,628 $ 429,002
$ 290,666 Pre-opening, management transition and
severance expenses 6 4,693 3,884 6,420 Preferred share issuance
costs 0 0 951 1,566 Acquisition transaction costs 528 (41 ) 2,379
2,646 Net gain on sale of properties 0 0 (93,205 ) 0 Non-cash
ground rent 497 324 1,820 1,305 Mezzanine loan discount
amortization 0 (669 ) (986 )
(2,524 )
Adjusted EBITDA $ 80,470 $
72,935 $ 343,845 $ 300,079
Corporate expense 6,761 7,842 29,056 29,112 Interest and other
income (1,406 ) (4,037 ) (8,685 ) (16,340 ) Hotel level
adjustments, net (671 ) (515 ) (8,077 )
9,735
Hotel EBITDA $ 85,154
$ 76,225 $ 356,139
$ 322,586
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,
2014 for the Company's period of ownership in 2014 and the
comparable period in 2013.
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, 2014 2013
2014 2013 Revenues: Room $
185,854 $ 172,633 $ 758,958 $ 697,182 Food and beverage 62,509
63,628 243,968 244,404 Other 17,587 14,611
71,314 62,152 Total hotel
revenues 265,950 250,872
1,074,240 1,003,738
Expenses:
Room 49,368 46,051 194,026 179,935 Food and beverage 44,478 44,778
175,337 172,151 Other direct 5,128 5,086 22,672 22,570 General and
administrative 22,224 20,400 85,294 79,441 Sales and marketing
16,396 15,848 67,712 63,313 Management fees 8,492 8,771 35,939
34,287 Property operations and maintenance 9,164 8,898 36,068
35,115 Energy and utilities 6,733 6,474 28,251 26,285 Property
taxes 13,254 13,020 51,136 47,907 Other fixed expenses 5,559
5,321 21,666 20,148
Total hotel expenses 180,796 174,647
718,101 681,152
Hotel
EBITDA $ 85,154 $ 76,225
$ 356,139 $ 322,586
Hotel EBITDA Margin 32.0 %
30.4 % 33.2 % 32.1 %
Note:
This schedule includes the operating data for all properties
owned by the Company as of December 31, 2014. Harbor Court, Triton,
Serrano, and Southernmost are shown in 2013 for their comparative
period of ownership in 2014. Vitale excludes April 2014 ownership
and the comparative period of April 2013. Excludes all Old Town and
Hotel Viking ownership in 2014 and comparative period. 2014
Heathman ownership excluded. 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, 2014 2013
2014 2013 Total Portfolio Occupancy
77.2 % 75.8 % 81.2 % 80.2 % Increase 1.8 % 1.3 % ADR $ 235.04 $
222.34 $ 231.53 $ 215.50 Increase 5.7 % 7.4 %
RevPAR
$ 181.49 $ 168.57 $
188.09 $ 172.81 Increase 7.7
% 8.8 %
Note:
This schedule includes operating data for all properties owned
as of December 31, 2014 for the Company's period of ownership in
2014 and the comparable period in 2013.
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. 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, 301-941-1500
LaSalle (NYSE:LHO)
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