Achieves highest-ever first quarter hotel
EBITDA and hotel EBITDA margin
LaSalle Hotel Properties (NYSE: LHO) today announced results for
the quarter ended March 31, 2016. The Company’s results include the
following:
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Mason & Rook Hotel - Washington, DC
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First Quarter
2016 2015 % Var. ($'s in millions except per
share/unit data) RevPAR $ 167.56 $ 164.16 2.1% Hotel EBITDA
Margin(1) 26.5% 26.0% Hotel EBITDA Margin Growth(1)
47 bps
Total Revenue $ 260.1 $ 250.8 3.7% EBITDA(1) $ 62.9 $ 54.4
15.6% Adjusted EBITDA(1) $ 65.0 $ 57.2 13.6% FFO(1) $ 53.6 $ 42.5
26.1% Adjusted FFO(1) $ 55.6 $ 45.3 22.7% FFO per diluted
share/unit(1) $ 0.47 $ 0.38 23.7% Adjusted FFO per diluted
share/unit(1) $ 0.49 $ 0.40 22.5% Net income (loss) attributable to
common shareholders $ 6.0 $ (0.3) Net income attributable to common
shareholders per diluted share $ 0.05 $ 0.00
(1) See tables later in press release, which list adjustments
that reconcile net income (loss) attributable to common
shareholders to earnings before interest, taxes, depreciation and
amortization (“EBITDA”), adjusted EBITDA, funds from operations
attributable to common shareholders and unitholders (“FFO”), FFO
per share/unit, adjusted FFO, adjusted FFO per share/unit and pro
forma 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 (loss)
later in this press release.
“Our Company delivered meaningful FFO per share growth, through
improvements in our hotel EBITDA margin, ramp from last year’s
acquisitions, and further enhancement of our balance sheet,” said
Michael D. Barnello, President and Chief Executive Officer of
LaSalle Hotel Properties. “Our asset management team and operators
were able to keep hotel operating expenses flat compared to last
year, while revenue improved, which led to record-breaking hotel
EBITDA and hotel EBITDA margin, for the first quarter.”
“Meanwhile, we continue to develop excellent guest experiences,
and we are particularly excited about the grand opening of the
Mason & Rook Hotel, in Washington, DC. Mason & Rook
debuted earlier this month at the former Hotel Helix, located in
Washington’s 14th Street Corridor. The area has become an
extremely popular destination in the District and, as such, has
become one of the most densely populated sub-markets in the city,
with numerous new high-end apartment buildings, restaurants, bars,
and retail locations opening steadily over the last several
years. With this renovation and repositioning, we
significantly improved the asset, seizing an excellent opportunity
to capitalize on the demand being generated in the surrounding
neighborhood,” added Mr. Barnello.
First Quarter Results
- RevPAR: Room revenue per
available room (“RevPAR”) for the quarter ended March 31, 2016
increased 2.1 percent to $167.56, driven by a 2.1 percent growth in
occupancy to 75.8 percent and average daily rate (“ADR”) in line
with the prior year at $221.03.
- Hotel EBITDA Margin: The
Company’s hotel EBITDA margin for the first quarter expanded by 47
basis points from the comparable prior year period to 26.5 percent
– a first quarter record for the Company.
- Adjusted EBITDA: The Company’s
adjusted EBITDA was $65.0 million, an increase of 13.6 percent over
the first quarter of 2015.
- Adjusted FFO: The Company
generated first quarter adjusted FFO of $55.6 million, or $0.49 per
diluted share/unit, compared to $45.3 million, or $0.40 per diluted
share/unit, for the comparable prior year period, a per share/unit
increase of 22.5 percent.
Capital Investments
During the quarter, the Company invested $36.2 million of
capital in its hotels. The Company completed renovations at the
Chaminade Resort and Conference Center in Santa Cruz, Gild Hall in
New York City, Hotel Solamar in San Diego, Hotel Amarano Burbank,
The Liberty Hotel in Boston, Lansdowne Resort in Lansdowne, VA,
Hotel Palomar, Washington, DC, the Mason & Rook Hotel in
Washington, DC, and the second phase of the guestrooms at Westin
Michigan Avenue in Chicago.
Balance Sheet and Capital Markets Activities
As of March 31, 2016, the Company had total outstanding debt of
$1.47 billion, including $343.0 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 3.6 times as of March 31, 2016 and its fixed
charge coverage ratio was 5.3 times. As of March 31, 2016, the
Company had $9.4 million of cash and cash equivalents on its
balance sheet and capacity of $429.4 million available on its
credit facilities.
During the quarter, the Company repaid $286.2 million of
mortgage debt on three of its hotels. On January 4, 2016, the
Company prepaid the mortgages on Westin Michigan Avenue in Chicago
and Indianapolis Marriott Downtown, which had remaining balances of
$131.3 million and $96.1 million, respectively. On February 11,
2016, the Company prepaid the mortgage on The Roger in New York
City, which had a remaining balance of $58.8 million. There were no
prepayment penalties incurred with the repayment of these three
mortgages.
For the first quarter, the Company’s weighted average interest
rate was 2.5 percent, compared to 3.7 percent during the same prior
year period.
Dividend
On March 10, 2016, the Company declared a first quarter 2016
dividend of $0.45 per common share of beneficial interest. The
dividend represents an annual run rate of $1.80 per share and a 7.4
percent yield based on the closing share price on April 20,
2016.
Earnings Call
The Company will conduct its quarterly conference call on
Friday, April 22, 2016 at 10:00 AM eastern time. To participate in
the conference call, please dial (888) 395-3241.
Additionally, a live webcast of the conference call will be
available through the Company’s website. A replay of the conference
call webcast will also be archived and available online through the
Investor Relations section of the Company’s website.
About LaSalle Hotel Properties
LaSalle Hotel Properties is a leading multi-operator real estate
investment trust. The Company owns 47 hotels and a mezzanine loan
secured by two hotels in Santa Monica, California. The properties
are upscale, full-service hotels, totaling more than 12,000 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, Destination Hotels,
Davidson Hotel Company, the Kimpton Hotel & Restaurant Group,
Accor, 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
Company’s asset management strategies and certain renovation
projects. You should not rely on forward-looking statements since
they involve known and unknown risks, uncertainties and other
factors that are, in some cases, beyond the Company's control and
which could materially affect actual results, performances or
achievements. Factors that may cause actual results to differ
materially from current expectations include, but are not limited
to, (i) risks associated with the hotel industry, including
competition for guests and meetings from other hotel and
alternative lodging companies, increases in wages, energy costs and
other operating costs, potential unionization or union disruption,
actual or threatened terrorist attacks, any type of flu or
disease-related pandemic and downturns in general and local
economic conditions, (ii) the availability and terms of financing
and capital and the general volatility of securities markets, (iii)
the Company’s dependence on third-party managers of its hotels,
including its inability to implement strategic business decisions
directly, (iv) risks associated with the real estate industry,
including environmental contamination and costs of complying with
the Americans with Disabilities Act and similar laws, (v) interest
rate increases, (vi) the possible failure of the Company to
maintain its qualification as a REIT and the risk of changes in
laws affecting REITs, (vii) the possibility of uninsured losses,
(viii) risks associated with redevelopment and repositioning
projects, including delays and cost overruns, (ix) the risk of a
material failure, inadequacy, interruption or security failure of
the Company’s or the hotel managers’ information technology
networks and systems, and (x) the risk factors discussed in the
Company’s Annual Report on Form 10-K as updated in its Quarterly
Reports. Accordingly, there is no assurance that the Company's
expectations will be realized. Except as otherwise required by the
federal securities laws, the Company disclaims any obligation or
undertaking to publicly release any updates or revisions to any
forward-looking statement contained herein (or elsewhere) to
reflect any change in the Company’s expectations with regard
thereto or any change in events, conditions or circumstances on
which any such statement is based.
For additional information or to receive press releases via
e-mail, please visit our website at www.lasallehotels.com.
LASALLE HOTEL PROPERTIES
Consolidated Statements of Operations
and Comprehensive Loss
(in thousands, except share data)
(unaudited)
For the three months ended
March 31, 2016 2015
Revenues: Hotel operating revenues: Room $ 181,420 $ 170,591
Food and beverage 56,347 60,915 Other operating department
20,643 18,017 Total hotel operating revenues
258,410 249,523 Other income 1,694 1,280
Total revenues 260,104 250,803
Expenses: Hotel operating expenses: Room 52,291 48,721 Food
and beverage 42,908 45,118 Other direct 3,683 3,920 Other indirect
71,915 70,002 Total hotel operating
expenses 170,797 167,761 Depreciation and amortization 47,628
42,878 Real estate taxes, personal property taxes and insurance
16,191 15,934 Ground rent 3,813 3,662 General and administrative
5,830 6,267 Acquisition transaction costs 0 447 Other expenses
2,178 2,345 Total operating expenses
246,437 239,294 Operating income 13,667
11,509 Interest income 1,654 6 Interest expense (11,867 )
(13,645 ) Income (loss) before income tax benefit 3,454
(2,130 ) Income tax benefit 5,620 4,868
Net income 9,074 2,738 Noncontrolling interests of common units in
Operating Partnership (15 ) (15 ) Net income
attributable to the Company 9,059 2,723 Distributions to preferred
shareholders (3,042 ) (3,042 ) Net income (loss)
attributable to common shareholders $ 6,017 $ (319 )
LASALLE HOTEL PROPERTIES
Consolidated Statements of Operations
and Comprehensive Loss - Continued
(in thousands, except share data)
(unaudited)
For the three months ended
March 31, 2016 2015 Earnings
per Common Share - Basic: Net income attributable to common
shareholders excluding amounts attributable to unvested restricted
shares $ 0.05 $ 0.00
Earnings per Common Share -
Diluted: Net income attributable to common shareholders
excluding amounts attributable to unvested restricted shares $ 0.05
$ 0.00
Weighted average number of common shares
outstanding: Basic 112,748,492 112,647,715 Diluted 113,108,158
112,647,715
Comprehensive Loss: Net income $ 9,074 $
2,738 Other comprehensive loss: Unrealized loss on interest rate
derivative instruments (14,252 ) (4,398 ) Reclassification
adjustment for amounts recognized in net income 1,780
1,070 (3,398 ) (590 ) Noncontrolling interests of
common units in Operating Partnership 1 (6 )
Comprehensive loss attributable to the Company $ (3,397 ) $ (596 )
LASALLE HOTEL PROPERTIES
FFO and EBITDA
(in thousands, except share/unit data)
(unaudited)
For the three months ended
March 31, 2016 2015 Net income
(loss) attributable to common shareholders $ 6,017 $ (319 )
Depreciation 47,494 42,752 Amortization of deferred lease costs 80
75 Noncontrolling interests of common units in Operating
Partnership 15 15
FFO attributable
to common shareholders and unitholders $ 53,606
$ 42,523 Pre-opening, management transition and
severance expenses 1,546 1,847 Acquisition transaction costs 0 447
Non-cash ground rent 477 493
Adjusted FFO attributable to common shareholders and
unitholders $ 55,629 $
45,310 Weighted average number of common shares
and units outstanding: Basic 112,893,715 112,944,015 Diluted
113,253,381 113,349,541
FFO attributable to common shareholders
and unitholders per diluted share/unit $ 0.47 $ 0.38
Adjusted FFO attributable to common shareholders and unitholders
per diluted share/unit $ 0.49 $ 0.40
For the three months ended March 31, 2016
2015 Net income (loss) attributable to common shareholders $
6,017 $ (319 ) Interest expense 11,867 13,645 Income tax benefit
(5,620 ) (4,868 ) Depreciation and amortization 47,628 42,878
Noncontrolling interests of common units in Operating Partnership
15 15 Distributions to preferred shareholders 3,042
3,042
EBITDA $ 62,949 $
54,393 Pre-opening, management transition and severance
expenses 1,546 1,847 Acquisition transaction costs 0 447 Non-cash
ground rent 477 493
Adjusted
EBITDA $ 64,972 $ 57,180 Corporate
expense 6,724 6,986 Interest and other income (3,349 ) (1,286 ) Pro
forma hotel level adjustments, net(1) (48 ) 3,757
Hotel EBITDA $ 68,299 $
66,637
(1) Pro forma to include the results of operations of the Park
Central San Francisco and The Marker Waterfront Resort under
previous ownership for the comparable period in 2015, and exclude
the Mason & Rook Hotel for the period the hotel was closed for
renovation in 2016 and the comparable period in 2015.
LASALLE HOTEL PROPERTIES
Hotel Operational Data
Schedule of Property Level Results -
Pro Forma(1)
(in thousands)
(unaudited)
For the three months ended
March 31, 2016 2015
Revenues: Room $ 181,422 $ 175,604 Food and beverage 56,347
62,690 Other 20,266 18,013 Total hotel
revenues 258,035 256,307
Expenses: Room 52,290 49,465 Food and beverage 42,909 46,005
Other direct 3,661 3,806 General and administrative 20,182 19,969
Information and telecommunications systems 4,382 4,278 Sales and
marketing 20,859 20,437 Management fees 7,631 7,679 Property
operations and maintenance 9,829 9,826 Energy and utilities 7,271
7,748 Property taxes 14,379 14,130 Other fixed expenses
6,343 6,327 Total hotel expenses
189,736 189,670
Hotel EBITDA
$ 68,299 $ 66,637
Hotel EBITDA Margin 26.5 % 26.0
%
(1) This schedule includes the operating data for the three
months ended March 31, 2016 for all properties owned by the Company
as of March 31, 2016. Park Central San Francisco and The Marker
Waterfront Resort are included for the full first quarter in both
2015 and 2016. Mason & Rook Hotel is excluded from the first
quarter in both 2015 and 2016 because the hotel was closed for
renovation during the entire first quarter of 2016.
LASALLE HOTEL PROPERTIES
Statistical Data for the Hotels - Pro
Forma(1)
(unaudited)
For the three months ended
March 31, 2016 2015 Total
Portfolio Occupancy 75.8 % 74.2 % Increase 2.1 % ADR $ 221.03 $
221.10 Decrease 0.0 %
RevPAR $ 167.56 $
164.16 Increase 2.1 %
For the three months ended March 31, 2016 Market
Detail RevPAR Variance % Los Angeles 19.3% San Francisco
11.5% New York 4.2% Philadelphia 2.9% Washington, DC 2.3% Other(2)
-2.0% Seattle -3.3% Chicago -5.9% San Diego -6.4% Boston -9.2%
(1) Pro forma to include the results of operations of the Park
Central San Francisco and The Marker Waterfront Resort under
previous ownership for the comparable period in 2015, and exclude
the Mason & Rook Hotel for the period the hotel was closed for
renovation in 2016 and the comparable period in 2015.
(2) Other includes Indianapolis, IN, Portland, OR, Santa Cruz,
CA, Lansdowne, VA and Key West, FL.
Non-GAAP Financial Measures
FFO, EBITDA and Hotel EBITDA
The Company considers the non-GAAP measures of FFO (including
FFO per share/unit), EBITDA and hotel EBITDA to be key supplemental
measures of the Company's performance and should be considered
along with, but not as alternatives to, net income or loss as a
measure of the Company's operating performance. Historical cost
accounting for real estate assets implicitly assumes that the value
of real estate assets diminishes predictably over time. Since real
estate values instead have historically risen or fallen with market
conditions, most real estate industry investors consider FFO,
EBITDA and hotel EBITDA to be helpful in evaluating a real estate
company's operations.
The White Paper on FFO approved by NAREIT in April 2002, as
revised in 2011, defines FFO as net income or loss (computed in
accordance with GAAP), excluding gains or losses from sales of
properties and items classified by GAAP as extraordinary, plus real
estate-related depreciation and amortization and impairment
writedowns, and after comparable adjustments for the Company's
portion of these items related to unconsolidated entities and joint
ventures. The Company computes FFO consistent with standards
established by NAREIT, which may not be comparable to FFO reported
by other REITs that do not define the term in accordance with the
current NAREIT definition or that interpret the current NAREIT
definition differently than the Company.
With respect to FFO, the Company believes that excluding the
effect of extraordinary items, real estate-related depreciation and
amortization and impairments, and the portion of these items
related to unconsolidated entities, all of which are based on
historical cost accounting and which may be of limited significance
in evaluating current performance, can facilitate comparisons of
operating performance between periods and between REITs, even
though FFO does not represent an amount that accrues directly to
common shareholders. However, FFO may not be helpful when comparing
the Company to non-REITs.
With respect to EBITDA, the Company believes that excluding the
effect of non-operating expenses and non-cash charges, and the
portion of these items related to unconsolidated entities, all of
which are also based on historical cost accounting and may be of
limited significance in evaluating current performance, can help
eliminate the accounting effects of depreciation and amortization,
and financing decisions and facilitate comparisons of core
operating profitability between periods and between REITs, even
though EBITDA also does not represent an amount that accrues
directly to common shareholders.
With respect to hotel EBITDA, the Company believes that
excluding the effect of corporate-level expenses, non-cash items,
and the portion of these items related to unconsolidated entities,
provides a more complete understanding of the operating results
over which individual hotels and operators have direct control. The
Company believes property-level results provide investors with
supplemental information on the ongoing operational performance of
its hotels and effectiveness of the third-party management
companies operating its business on a property-level basis.
FFO, EBITDA and hotel EBITDA do not represent cash generated
from operating activities as determined by GAAP and should not be
considered as alternatives to net income or loss, cash flows from
operations or any other operating performance measure prescribed by
GAAP. FFO, EBITDA and hotel EBITDA are not measures of the
Company's liquidity, nor are FFO, EBITDA and hotel EBITDA
indicative of funds available to fund the Company's cash needs,
including its ability to make cash distributions. These
measurements do not reflect cash expenditures for long-term assets
and other items that have been and will be incurred. FFO, EBITDA
and hotel EBITDA may include funds that may not be available for
management's discretionary use due to functional requirements to
conserve funds for capital expenditures, property acquisitions, and
other commitments and uncertainties. To compensate for this,
management considers the impact of these excluded items to the
extent they are material to operating decisions or the evaluation
of the Company's operating performance.
Adjusted FFO and Adjusted EBITDA
The Company presents adjusted FFO (including adjusted FFO per
share/unit) and adjusted EBITDA, which adjusts for certain
additional items including gains on sale of property and impairment
losses (to the extent included in EBITDA), acquisition transaction
costs, costs associated with the departure of executive officers,
costs associated with the recognition of issuance costs related to
the calling of preferred shares and certain other items. The
Company excludes these items as it believes it allows for
meaningful comparisons with other REITs and between periods and is
more indicative of the ongoing performance of its assets. As with
FFO, EBITDA, and hotel EBITDA, the Company’s calculation of
adjusted FFO and adjusted EBITDA may be different from similar
adjusted measures calculated by other REITs.
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version on businesswire.com: http://www.businesswire.com/news/home/20160421006644/en/
LaSalle Hotel PropertiesBruce A. Riggins or Max D. Leinweber,
301-941-1500
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