UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO
SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
May 2, 2006
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DiamondRock Hospitality Company |
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(Exact name of registrant as specified in charter) |
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Maryland |
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001-32514 |
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20-1180098 |
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(State or Other Jurisdiction |
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(Commission |
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(IRS Employer |
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6903 Rockledge Drive, Suite 800 |
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Bethesda, MD 20817 |
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(Address of Principal Executive Offices) (Zip Code) |
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(240) 744-1150 |
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(Registrant’s telephone number, including area code) |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
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ITEM 2.01. Completion of Acquisition or Disposition of Assets.
On May 2, 2006, an affiliate of DiamondRock Hospitality Company (“DiamondRock”) completed its acquisition of the 369-room Westin Atlanta North at Perimeter Center in Atlanta, Georgia (the “Westin Perimeter”) for total consideration of $61.5 million. We acquired the Westin Perimeter from an affiliate of Starwood Hotels & Resorts Worldwide and we acted in conjunction with Noble Investment Group. We funded the acquisition entirely with cash.
Noble Management Group, LLC will manage the hotel for us under a franchise from Westin. We intend to spend approximately $3 million in capital expenditures at the hotel over the next year.
ITEM 2.02. Results of Operations and Financial Condition
The information in this Current Report on Form 8-K is furnished under Item 2.02 - “Results of Operations and Financial Condition.” Such information, including the exhibits attached hereto, shall not be deemed “filed” for any purpose, including for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section. The information in this Item 2.02 of this Current Report on Form 8-K shall not be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act regardless of any general incorporation language in such filing.
On May 2, 2006, the Company issued a press release announcing its financial results for the quarter ended March 24, 2006. The text of the press release is attached hereto as Exhibit 99.1 and is incorporated by reference herein.
ITEM 9.01. Financial Statements and Exhibits.
(a) Financial Statements of Business Acquired.
To the extent required by this item, financial statements for Westin Perimeter will be filed as an amendment to this report on Form 8-K/A as soon as practicable but no later than 71 calendar days after the latest date on which this initial Form 8-K is required to be filed.
(b) Pro Forma Financial Information.
To the extent required by this item, pro forma financial information for Westin Perimeter will be filed as an amendment to this report on Form 8-K/A as soon as practicable but no later than 71 calendar days after the latest date on which this initial Form 8-K is required to be filed.
(d) Exhibits.
See Index to Exhibits attached hereto.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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DIAMONDROCK HOSPITALITY COMPANY |
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Date: May 2, 2006 |
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/s/ Michael D. Schecter |
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Michael D. Schecter |
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General Counsel and Secretary |
EXHIBIT INDEX
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Exhibit No. |
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Description |
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99.1 |
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Press release dated May 2, 2006. |
Exhibit 99.1
DiamondRock Hospitality Company Announces Strong First Quarter 2006 Results
BETHESDA, Md., May 2 /PRNewswire-FirstCall/ -- DiamondRock Hospitality Company (the “Company”) (NYSE: DRH) today announced results of operations for the fiscal quarter ended March 24, 2006. DiamondRock Hospitality Company is a self-advised real estate investment trust (REIT) that is an owner and acquirer of premium hotels in North America.
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First Quarter 2006 Highlights |
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RevPAR |
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Pro forma same-store revenue per available room (“RevPAR”) for our current portfolio, including our newly acquired hotels, increased 13.1 percent over the comparable period in 2005. |
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For those hotels that we owned for the entire quarter, same-store RevPAR increased 9.8 percent despite the impact of hotel renovation projects. |
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Hotel Profit Margins |
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Pro forma same-store hotel profit margins for our current portfolio, including our newly acquired hotels, increased approximately 240 basis points. |
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For those hotels that we owned for the entire quarter, same-store hotel profit margins increased approximately 110 basis points despite the impact of hotel renovation projects. |
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Adjusted EBITDA of $20.9 million. |
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Adjusted Funds from Operations (“Adjusted FFO”) of $15.1 million and Adjusted FFO per share of $0.29. |
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We acquired the Chicago Marriott Downtown Magnificent Mile (“Chicago Marriott Downtown”) at the end of the quarter and we acquired the Westin Atlanta North at Perimeter Center (“Westin Atlanta North”) in the second quarter. |
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After quarter end, we completed a very successful secondary equity offering with net proceeds of $238.2 million. |
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William W. McCarten, chairman and chief executive officer, stated, “The first quarter results were very strong despite the impact of hotel renovation projects in the quarter. The performance of the portfolio was enhanced by a number of positive factors: strong industry fundamentals, concentration of our portfolio in high growth markets such as New York, Chicago, and Los Angeles, and the positive benefits of our value-add asset management strategies such as the conversion of one of our Manhattan hotels from an independent brand to a powerful, nationally known brand (Courtyard by Marriott). We remain bullish on the outlook for the balance of 2006.”
Operating Results
Please see “Certain Definitions” and “Non-GAAP Financial Measures” attached to this press release for an explanation of the terms “EBITDA,” “Adjusted EBITDA,” “Hotel Adjusted EBITDA Margin,” “FFO,” “Adjusted FFO” and “Same Store.” Moreover, the discussions of RevPAR, Adjusted EBITDA and Hotel Adjusted EBITDA Margin assume that the acquired hotels were owned by the Company for the comparable reporting periods of 2005.
For the first fiscal quarter, beginning January 1, 2006 and ended March 24, 2006, the Company reported revenues of $83.1 million and net income of $4.4 million (or $0.08 per share). Adjusted EBITDA was $20.9 million. Adjusted FFO and Adjusted FFO per share were $15.1 million and $0.29 per share, respectively.
Entire Portfolio
Pro forma same-store RevPAR for our current portfolio of hotels, including the hotels acquired at or after quarter end, increased 13.1 percent from $98.48 to $111.34 as compared to the same period in 2005, driven by a 10.0 percent increase in the average daily rate and a 1.9 percentage point increase in occupancy.
Pro forma same-store Hotel Adjusted EBITDA Margins for our current portfolio of hotels, including the hotels acquired at or after quarter end, increased approximately 240 basis points (from 23.2 percent to 25.6 percent) over the same period in 2005.
The RevPAR and Hotel Adjusted EBITDA Margins are presented on a pro forma basis as if the Chicago Marriott Downtown and the Westin Atlanta North were acquired on the first day of the first quarter of 2006 and all of our acquisitions that occurred in 2005 occurred on the first day of the first quarter of 2005. Because the Chicago Marriott Downtown and Westin Atlanta North had excellent growth in the first quarter, the inclusion of these hotels increased the overall RevPAR results by 3.3 percentage points and Hotel Adjusted EBITDA Margins by 130 basis points.
Period of Ownership
Same-store RevPAR for the hotels that we owned for the entire quarter increased 9.8 percent from $103.38 to $113.48 as compared to the same period in 2005, driven exclusively by a 9.8 percent increase in the average daily rate. Same-store Hotel Adjusted EBITDA Margins for our hotels increased 110 basis points (from 26.6 percent to 27.7 percent) over the same period in the prior year.
Acquisition of the Chicago Marriott Downtown & Westin Atlanta North
On March 24, 2006, the last day of our fiscal quarter, we acquired the 1,192-room Chicago Marriott Downtown. It is located in the heart of Chicago’s famed retail district on Michigan Avenue known as the “Magnificent Mile.” The contractual purchase price for the hotel was $295 million plus approximately $11 million of net consideration in the form of an assumed property tax liability and other adjustments. The hotel is budgeted to generate over $23.7 million of Adjusted EBITDA for our period of ownership in 2006.
On May 2, 2006, we acquired the 369-room Westin Atlanta North hotel. The Perimeter Center market boasts over 23 million square feet of office space and major demand generators like General Electric, Microsoft, Eli Lilly as well as three world-class hospitals located less than one mile from the hotel. The hotel was acquired for total consideration of $61.5 million. We project the need for approximately $3 million of capital upgrades at the hotel. Upon our acquisition, Noble Management Group, LLC took over management of the hotel pursuant to a new Westin franchise agreement. The hotel is budgeted to generate over $3.7 million of EBITDA for our period of ownership in 2006, and $6.3 million of Adjusted EBITDA over the forward 12 months from our acquisition date.
Secondary Offering
On April 4, 2006, we completed our secondary offering of 19.3 million shares of common stock, including the shares sold pursuant to the over- allotment option of the underwriters. DiamondRock received cash proceeds, after deducting offering costs, of $238.2 million. After this offering, we have 70.1 million shares of common stock outstanding.
Balance Sheet & Recent Financing Activity
As of the end of the first quarter, we had total assets of $1.4 billion and total debt of $751 million. This debt includes $79.5 million outstanding on a bank term loan obtained in connection with the acquisition of the Chicago Marriott Downtown as well as $33.0 million outstanding on our corporate credit facility. Additionally, we assumed approximately $220 million of floating- rate property specific debt in connection with the acquisition of the Chicago Marriott Downtown hotel.
During the second quarter we repaid the entire balance under our corporate credit facility and the $79.5 million bank term loan with a portion of the proceeds from our secondary equity offering. In addition, we refinanced (with no prepayment penalty) the $220 million floating-rate debt secured by the Chicago Marriott Downtown with a 10-year $220 million fixed-rate loan that bears interest at 5.98%.
As previously announced, Lehman Brothers Bank has provided a commitment to refinance the existing mortgage loan on the Courtyard Manhattan/Fifth Avenue. Pursuant to this commitment, we expect to refinance the existing $23 million floating-rate loan with a $51 million fixed-rate loan that matures in 10 years and will bear interest at 6.48%. The new loan proceeds allow us to finance out more than 150% of our total investment in the hotel. The loan is expected to close in the second quarter.
After completing the expected refinancing of the Courtyard Manhattan/Fifth Avenue, we will have total debt of $666 million. The debt will be comprised entirely of fixed-rate, property-specific mortgages with an average weighted interest rate of 5.7 percent and a weighted average maturity of over 9 years.
Outlook
We are providing updated guidance, but do not undertake to update it for any developments in our business. Achievement of the anticipated results is subject to the risks disclosed in our filings with the Securities and Exchange Commission.
The guidance below includes the estimated disruption impact of the planned $89.5 million of renovations of our hotels during 2006. Furthermore, the RevPAR and Hotel Adjusted EBITDA margin guidance are presented on a pro forma basis as they assume that we owned all of our hotels for the comparable reporting periods of 2005. However, our guidance does not include the results from any hotel that we acquired in 2006 for the period prior to our ownership in 2006 (or the comparable reporting period of 2005). Finally, our guidance does not reflect the impact of any additional hotel acquisitions.
For the period that we own our hotels in 2006, we expect:
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RevPAR to increase 8.5 to 10.5 percent. |
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Hotel Adjusted EBITDA Margins to increase 160 to 210 basis points. |
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Adjusted EBITDA of $122.0 million to $125.0 million. |
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Adjusted FFO of $82.5 million to $85.5 million. The updated Adjusted FFO guidance assumes that the full-year tax expense will increase from $600 thousand to $3.0 million as a result of our 2006 acquisitions and out performance at certain hotels. |
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Adjusted FFO per share of $1.26 to $1.30. |
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Fully diluted weighted average shares outstanding of 66.1 million. |
2006 quarterly results will be partially impacted by our reporting calendar and by the timing of our 2006 capital expenditures.
For the period that we own our hotels in the second quarter of 2006, we expect:
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RevPAR to increase 9.0 to 10.0 percent. |
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Hotel Adjusted EBITDA Margins to increase 110 to 150 basis points. |
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Adjusted EBITDA of $33.0 million to $35.0 million. |
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Adjusted FFO of $22.5 million to $24.5 million. |
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Adjusted FFO per share of $0.33 to $0.36. |
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Fully diluted weighted average shares outstanding of 69.6 million. |
Dividend for First Quarter 2006
On April 11, 2006, a cash dividend of $0.18 per share was paid to shareholders of record as of March 24, 2006, the last day of our fiscal first quarter.
Major Capital Expenditures
We have and continue to make significant capital investments in our hotels. We have approximately $89.5 million of planned capital expenditures during 2006, which reflects a $5.5 million increase from our prior guidance primarily for capital expenditures at the recently acquired Chicago Marriott Downtown and Westin Atlanta North hotels. We spent $11.5 million on capital projects in the first fiscal quarter. The significant capital projects are as follows:
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Bethesda Marriott Suites: We substantially completed all of the planned guest room renovations in the first quarter. |
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Courtyard Manhattan Fifth Avenue: We completed the guestroom and corridor renovation during 2005. The renovation of the lobby and other public spaces will be completed by the second quarter of 2006. |
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Courtyard Manhattan Midtown East: At the end of the first quarter, we substantially completed the renovation of guestrooms, lobby, restaurant and meeting space. |
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Frenchman’s Reef & Morning Star Marriott Beach Resort: We completed in 2005 the replacement of case goods in a portion of the guestrooms. We are currently planning several significant projects at the hotel during 2006, including additional replacement of case goods in select rooms and the renovation of guestrooms, restaurants, and certain meeting space. The work is expected to be done in the third and fourth quarter of this year. |
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Los Angeles Airport Marriott: In 2005, we completed a renovation of the hotel ballroom, conversion of a food outlet to a junior ballroom and renovation of the hotel bar. Additionally, we have accelerated the timing of a complete room renovation from 2007 to 2006. The project will consist of the renovation of the hotel guestrooms and bathrooms and is being funded, in part, by a $1.5 million non-recoverable contribution from Marriott International. The renovation began in April and is scheduled to be completed by November 2006. |
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Oak Brook Hills Marriott Resort: We will begin a significant renovation in the fourth quarter of 2006. The renovation will include the hotel guestrooms and bathrooms, the hotel main ballroom and meeting rooms and the hotel lobby. |
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Orlando Airport Marriott: We will begin a significant renovation in 2006. The renovation will include the hotel guestrooms and bathrooms, the hotel meeting rooms and the hotel lobby. The renovation is scheduled for the third and fourth quarter of 2006. |
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Torrance Marriott: We are currently completing the renovation of the Torrance Marriott. The initial phase of the project consisted of the renovation of the hotel guestroom soft goods and bathrooms and the renovation of the hotel’s main ballroom and meeting rooms, which were completed in January 2006. During the second and third quarter of 2006, renovations will include the hotel lobby and the conversion of a food and beverage outlet to meeting space. |
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Vail Marriott: We are currently designing a major renovation of the hotel ballrooms. |
Earnings Call
We will host a conference call to discuss first quarter and 2006 guidance on Wednesday, May 3, 2006, at 2:00pm Eastern Time (ET). To participate in the live call, investors are invited to dial 1-866-700-6979 (for domestic callers) or 617-213-8836 (for international callers). The participant passcode is 71199149. A live webcast of the call will be available via the investor relations section of DiamondRock Hospitality Company’s website at http://www.drhc.com. A replay of the webcast will also be archived on the website for 30 days.
About the Company
DiamondRock Hospitality Company is a self-advised REIT that is an owner and acquirer of premium hotel properties. We own 17 hotels that are comprised of 7,678 rooms. We have a strategic acquisition sourcing relationship with Marriott International. For further information, please visit our website at http://www.drhc.com.
This press release contains forward-looking statements within the meaning of federal securities laws and regulations. These forward looking statements are identified by their use of terms and phrases such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “should,” “will,” “continue” and other similar terms and phrases, including references to assumptions and forecasts of future results. Forward- looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors which may cause the actual results to differ materially from those anticipated at the time the forward- looking statements are made. These risks include, but are not limited to: national and local economic and business conditions, including the potential for additional terrorist attacks, that will affect occupancy rates at our hotels and the demand for hotel products and services; operating risks associated with the hotel business; risks associated with the level of our indebtedness and our ability to meet covenants in our debt agreements; relationships with property managers; our ability to maintain our properties in a first-class manner, including meeting capital expenditure requirements; our ability to complete planned renovation on budget; our ability to compete effectively in areas such as access, location, quality of accommodations and room rate structures; changes in travel patterns, taxes and government regulations which influence or determine wages, prices, construction procedures and costs; our ability to complete acquisitions; our ability to raise equity capital; the performance of acquired properties after they are acquired; necessary capital expenditures on the acquired properties; and our ability to continue to satisfy complex rules in order for us to qualify as a REIT for federal income tax purposes; and other risks and uncertainties associated with our business described from time to time in our filings with the Securities and Exchange Commission. Although we believe the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that the expectations will be attained or that any deviation will not be material. All information in this release is as of the date of this release, and we undertake no obligation to update any forward-looking statement to conform the statement to actual results or changes in our expectations.
Reporting Periods for Statement of Operations
The results we report in our consolidated statements of operations are based on results of our hotels reported to us by our hotel managers. Our hotel managers use different reporting periods. Marriott International, the manager of the majority of our hotel properties, uses a fiscal year ending on the Friday closest to December 31 and reports twelve weeks of operations for the first three quarters and sixteen or seventeen weeks for the fourth quarter of the year for its domestic managed hotels. In contrast, Marriott International for its non-domestic hotels (including Frenchman’s Reef), Noble Management Group, LLC, our manager of the Westin Atlanta North hotel, and Vail Resorts, our manager of the Vail Marriott, report results on a monthly basis. Additionally, the Company, as a REIT, is required by tax law to report results on a calendar year. As a result, the Company has adopted the reporting periods used by Marriott International for its domestic hotels, except that the fiscal year always ends on December 31 to comply with REIT rules. The first three fiscal quarters end on the same day as Marriott International’s fiscal quarters but our fourth quarter ends on December 31 and our full year results, as reported in our statement of operations, always includes the same number of days as the calendar year.
Two consequences of the reporting cycle we have adopted are: (1) quarterly start dates will usually differ between years, except for the first quarter which always commences on January 1, and (2) our first and fourth quarters of operations and year-to-date operations may not include the same number of days as reflected in prior years.
While the reporting calendar we adopted is more closely aligned with the reporting calendar used by the manager of a majority of our properties, one final consequence of our calendar is we are unable to report any results for Frenchman’s Reef, Westin Atlanta North or for the Vail Marriott for the month of operations that ends after our fiscal quarter-end because neither Vail Resorts, Noble Management Group, LLC (the manager of the Westin Atlanta North hotel) nor Marriott International make mid-month results available to us. As a result, our quarterly results of operations include results from Frenchman’s Reef, Westin Atlanta North and the Vail Marriott as follows: first quarter (January and February), second quarter (March to May), third quarter (June to August) and fourth quarter (September to December). While this does not affect full-year results, it does affect the reporting of quarterly results.
Ground Leases
Three of our hotels are subject to ground leases: Bethesda Marriott Suites, Courtyard Manhattan Fifth Avenue, and Salt Lake City Downtown Marriott. In addition, part of a parking structure at a fourth hotel and two golf courses at two additional hotels are also subject to ground leases. In accordance with GAAP, the Company records rent expense on a straight-line basis for ground leases that provide minimal rental payments that increase in pre-established amounts over the remaining term of the ground lease. For the first quarter 2006, contractual cash rent payable on the ground leases totaled $0.4 million and the Company recorded approximately $2.1 million in ground rent expense. The non-cash portion of ground rent expense recorded for the first fiscal quarter was $1.7 million.
DIAMONDROCK HOSPITALITY COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
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March 24, 2006 |
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December 31, 2005 |
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(Unaudited) |
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ASSETS |
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Property and equipment, at cost |
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$ |
1,299,290,024 |
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$ |
899,309,856 |
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Less: accumulated depreciation |
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(37,832,310 |
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(28,747,457 |
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1,261,457,714 |
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870,562,399 |
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Deferred financing costs, net |
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2,771,551 |
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2,846,661 |
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Restricted cash |
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23,373,763 |
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23,109,153 |
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Due from hotel managers |
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45,012,152 |
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38,964,986 |
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Favorable lease asset, net |
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10,476,609 |
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10,601,577 |
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Prepaid and other assets |
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14,524,944 |
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10,495,765 |
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Cash and cash equivalents |
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13,301,764 |
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9,431,741 |
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Total assets |
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$ |
1,370,918,497 |
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$ |
966,012,282 |
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LIABILITIES AND SHAREHOLDERS’ EQUITY |
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Liabilities: |
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Debt, at face amount |
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$ |
748,080,832 |
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$ |
428,394,735 |
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Debt premium |
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2,744,957 |
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2,782,322 |
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Total debt |
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750,825,789 |
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431,177,057 |
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Deferred income related to key money, net |
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10,243,951 |
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10,311,322 |
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Unfavorable contract liability, net |
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89,165,354 |
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5,384,431 |
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Due to hotel managers |
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27,914,641 |
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22,790,896 |
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Dividends declared and unpaid |
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9,286,766 |
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8,896,101 |
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Accounts payable and accrued expenses |
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24,484,030 |
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24,064,047 |
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Total other liabilities |
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161,094,742 |
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71,446,797 |
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Shareholders’ Equity: |
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Preferred stock, $.01 par value; 10,000,000 shares authorized; no shares issued and outstanding |
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— |
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— |
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Common stock, $.01 par value; 100,000,000 shares authorized; 50,819,864 and 50,819,864 shares issued and outstanding at March 24, 2006 and December 31, 2005, respectively |
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508,199 |
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508,199 |
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Additional paid-in capital |
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492,540,387 |
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491,951,223 |
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Accumulated deficit |
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(34,050,620 |
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(29,070,994 |
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Total shareholders’ equity |
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458,997,966 |
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463,388,428 |
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Total liabilities and shareholders’ equity |
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$ |
1,370,918,497 |
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$ |
966,012,282 |
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DIAMONDROCK HOSPITALITY COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
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Period from |
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Period from |
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(Unaudited) |
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(Unaudited) |
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Rooms |
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$ |
54,514,752 |
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$ |
18,668,351 |
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Food and beverage |
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24,069,962 |
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6,414,097 |
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Other |
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4,537,436 |
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1,266,333 |
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Total revenues |
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83,122,150 |
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26,348,781 |
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Operating Expenses: |
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Rooms |
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12,834,640 |
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4,987,281 |
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Food and beverage |
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16,889,295 |
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5,081,237 |
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Management fees |
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2,916,396 |
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898,165 |
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Other hotel expenses |
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28,907,387 |
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11,614,685 |
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Depreciation and amortization |
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9,047,108 |
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4,362,146 |
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Corporate expenses |
|
|
2,566,888 |
|
|
2,009,430 |
|
|
Total operating expenses |
|
|
73,161,714 |
|
|
28,952,944 |
|
|
Operating profit (loss) |
|
|
9,960,436 |
|
|
(2,604,163 |
) |
|
Other Expenses (Income): |
|
|
|
|
|
|
|
|
Interest income |
|
|
(183,369 |
) |
|
(276,778 |
) |
|
Interest expense |
|
|
5,807,705 |
|
|
2,854,269 |
|
|
Total other expenses |
|
|
5,624,336 |
|
|
2,577,491 |
|
|
Income (loss) before income taxes |
|
|
4,336,100 |
|
|
(5,181,654 |
) |
|
Income tax (benefit) expense |
|
|
(29,914 |
) |
|
79,857 |
|
|
Net income (loss) |
|
$ |
4,366,014 |
|
$ |
(5,261,511 |
) |
|
Earnings (loss) per share: |
|
|
|
|
|
|
|
|
Basic and diluted |
|
$ |
0.08 |
|
$ |
(0.25 |
) |
DIAMONDROCK HOSPITALITY COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
|
Period from |
|
Period from |
|
||
|
|
|
|
|
|
|
||
|
|
|
|
(Unaudited) |
|
|
(Unaudited) |
|
|
Cash flows from operating activities: |
|
|
|
|
|
|
|
|
Net income (loss) |
|
$ |
4,366,014 |
|
$ |
(5,261,511 |
) |
|
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: |
|
|
|
|
|
|
|
|
Real estate depreciation |
|
|
9,047,108 |
|
|
4,362,146 |
|
|
Corporate asset depreciation as corporate expenses |
|
|
22,000 |
|
|
— |
|
|
Non-cash straight line ground rent |
|
|
1,711,196 |
|
|
1,589,728 |
|
|
Non-cash financing costs as interest |
|
|
184,238 |
|
|
171,024 |
|
|
Market value adjustment to interest rate caps |
|
|
(18,911 |
) |
|
(8,445 |
) |
|
Amortization of debt premium and unfavorable contract liability |
|
|
(69,258 |
) |
|
(71,320 |
) |
|
Amortization of deferred income |
|
|
(67,371 |
) |
|
(33,791 |
) |
|
Stock-based compensation |
|
|
577,164 |
|
|
548,845 |
|
|
Deferred income tax benefit |
|
|
(29,914 |
) |
|
79,857 |
|
|
Changes in assets and liabilities: |
|
|
|
|
|
|
|
|
Prepaid expenses and other assets |
|
|
(170,354 |
) |
|
104,998 |
|
|
Due to/from hotel managers |
|
|
(923,421 |
) |
|
(3,269,371 |
) |
|
Accounts payable and accrued expenses |
|
|
(2,083,472 |
) |
|
(469,952 |
) |
|
Net cash provided by (used in) operating activities |
|
|
12,545,019 |
|
|
(2,257,792 |
) |
|
Cash flows from investing activities: |
|
|
|
|
|
|
|
|
Hotel acquisitions |
|
|
(85,916,406 |
) |
|
(71,866,549 |
) |
|
Hotel capital expenditures |
|
|
(11,534,755 |
) |
|
— |
|
|
Receipt of deferred Key Money |
|
|
— |
|
|
4,000,000 |
|
|
Change in restricted cash |
|
|
1,952,171 |
|
|
661,659 |
|
|
Purchase deposits and pre-acquisition costs |
|
|
— |
|
|
(6,415,275 |
) |
|
Net cash used in investing activities |
|
|
(95,498,990 |
) |
|
(73,620,165 |
) |
|
Cash flows from financing activities: |
|
|
|
|
|
|
|
|
Proceeds from mortgage debt |
|
|
— |
|
|
44,000,000 |
|
|
Draws on senior secured credit facility |
|
|
24,000,000 |
|
|
— |
|
|
Draws on short-term loan |
|
|
79,500,000 |
|
|
— |
|
|
Repayments of senior secured credit facility |
|
|
(3,000,000 |
) |
|
— |
|
|
Scheduled mortgage debt principal payments |
|
|
(813,903 |
) |
|
(660,896 |
) |
|
Payment of financing costs |
|
|
(109,128 |
) |
|
(640,196 |
) |
|
Payment of dividends |
|
|
(8,942,975 |
) |
|
— |
|
|
Payment of lender deposits |
|
|
(3,810,000 |
) |
|
— |
|
|
Net cash provided by financing activities |
|
|
86,823,994 |
|
|
42,698,908 |
|
|
Net increase (decrease) in cash and cash equivalents |
|
$ |
3,870,023 |
|
$ |
(33,179,049 |
) |
|
Cash and cash equivalents, beginning of period |
|
|
9,431,741 |
|
|
76,983,107 |
|
|
Cash and cash equivalents, end of period |
|
$ |
13,301,764 |
|
$ |
43,804,058 |
|
|
Supplemental Disclosure of Cash Flow Information: |
|
|
|
|
|
|
|
|
Cash paid for interest |
|
$ |
5,520,983 |
|
$ |
2,470,138 |
|
|
Cash paid for income taxes |
|
$ |
802,260 |
|
$ |
1,114,363 |
|
Non-GAAP Financial Measures
We use the following four non-GAAP financial measures that we believe are useful to investors as key measures of our operating performance: (1) EBITDA (2) Adjusted EBITDA, (3) FFO and (4) Adjusted FFO.
EBITDA represents net income (loss) excluding: (1) interest expense; (2) provision for income taxes, including income taxes applicable to sale of assets; and (3) depreciation and amortization. We believe EBITDA is useful to an investor in evaluating our operating performance because it helps investors evaluate and compare the results of our operations from period to period by removing the impact of our capital structure (primarily interest expense) and our asset base (primarily depreciation and amortization) from our operating results. We also use EBITDA as one measure in determining the value of hotel acquisitions and dispositions.
|
|
|
Historical |
|
||||
|
|
|
|
|
||||
|
|
|
Fiscal Quarter |
|
Fiscal Quarter |
|
||
|
|
|
|
|
|
|
||
|
Net income (loss) |
|
$ |
4,366,014 |
|
$ |
(5,261,511 |
) |
|
Interest expense |
|
|
5,807,705 |
|
|
2,854,269 |
|
|
Income tax (benefit) expense |
|
|
(29,914 |
) |
|
79,857 |
|
|
Depreciation and amortization |
|
|
9,047,108 |
|
|
4,362,146 |
|
|
EBITDA |
|
$ |
19,190,913 |
|
$ |
2,034,761 |
|
|
|
|
|
|
||||
|
|
|
Forecast Second Quarter 2006 |
|
||||
|
|
|
|
|
||||
|
|
|
Low End |
|
High End |
|
||
|
|
|
|
|
|
|
||
|
Net income |
|
$ |
9,200,000 |
|
$ |
11,200,000 |
|
|
Interest expense |
|
|
9,500,000 |
|
|
9,500,000 |
|
|
Income tax expense |
|
|
1,000,000 |
|
|
1,000,000 |
|
|
Depreciation and amortization |
|
|
12,000,000 |
|
|
12,000,000 |
|
|
EBITDA |
|
$ |
31,700,000 |
|
$ |
33,700,000 |
|
|
|
|
|
|
||||
|
|
|
Forecast Full Year 2006 |
|
||||
|
|
|
|
|
||||
|
|
|
Low End |
|
High End |
|
||
|
|
|
|
|
|
|
||
|
Net income |
|
$ |
26,400,000 |
|
$ |
29,400,000 |
|
|
Interest expense |
|
|
36,500,000 |
|
|
36,500,000 |
|
|
Income tax expense |
|
|
3,000,000 |
|
|
3,000,000 |
|
|
Depreciation and amortization |
|
|
50,000,000 |
|
|
50,000,000 |
|
|
EBITDA |
|
$ |
115,900,000 |
|
$ |
118,900,000 |
|
|
|
|
|
|
||||
|
|
|
Chicago Marriott Downtown 2006 Budget |
|
||||
|
|
|
|
|
||||
|
|
|
Ownership Period |
|
Full Year 2006 |
|
||
|
|
|
|
|
|
|
||
|
Net income |
|
$ |
4,900,000 |
|
$ |
2,100,000 |
|
|
Interest expense |
|
|
10,000,000 |
|
|
12,800,000 |
|
|
Income tax expense |
|
|
800,000 |
|
|
400,000 |
|
|
Depreciation and amortization |
|
|
8,000,000 |
|
|
10,500,000 |
|
|
EBITDA |
|
$ |
23,700,000 |
|
$ |
25,800,000 |
|
|
|
|
|
|
||||
|
|
|
Westin Atlanta North |
|
||||
|
|
|
|
|
||||
|
|
|
May - Dec. 2006 |
|
Forward 12 Months |
|
||
|
|
|
|
|
|
|
||
|
Net income |
|
$ |
2,350,000 |
|
$ |
4,300,000 |
|
|
Income tax expense |
|
|
50,000 |
|
|
100,000 |
|
|
Depreciation and amortization |
|
|
1,300,000 |
|
|
1,900,000 |
|
|
EBITDA |
|
$ |
3,700,000 |
|
$ |
6,300,000 |
|
Management also evaluates our performance by reviewing Adjusted EBITDA because the Company believes that the exclusion of certain additional recurring and non-recurring items described below provides useful supplemental information regarding our ongoing operating performance and that the presentation of Adjusted EBITDA, when combined with the primary GAAP presentation of net income, is beneficial to a complete understanding of our operating performance. We adjust EBITDA for the following items, which may occur in any period, and refer to this measure as Adjusted EBITDA:
|
|
* |
Non-Cash Ground Rent: We exclude the non-cash expense incurred from straight lining the rent from our ground lease obligations and the non-cash amortization of our favorable lease asset. |
|
|
|
|
|
|
* |
The impact of the non-cash amortization of the unfavorable contract liabilities recorded in conjunction with our acquisitions of the Bethesda Marriott Suites and the Chicago Marriott Downtown. The amortization of the unfavorable contract liabilities does not reflect the underlying performance of the Company. |
|
|
|
|
|
|
* |
Cumulative effect of a change in accounting principle: Infrequently, the Financial Accounting Standards Board (FASB) promulgates new accounting standards that require the consolidated statement of operations to reflect the cumulative effect of a change in accounting principle. We exclude these one-time adjustments because they do not reflect our actual performance for that period. |
|
|
|
|
|
|
* |
Impairment Losses: We exclude the effect of impairment losses recorded because we believe that including them in EBITDA is not consistent with reflecting the ongoing performance of our remaining assets. In addition, we believe that impairment charges are similar to gains (losses) on dispositions and depreciation expense, both of which are also excluded from EBITDA. |
|
|
|
Historical |
|
||||
|
|
|
|
|
||||
|
|
|
Fiscal Quarter |
|
Fiscal Quarter |
|
||
|
|
|
|
|
|
|
||
|
EBITDA |
|
$ |
19,190,913 |
|
$ |
2,034,761 |
|
|
Non-cash ground rent |
|
|
1,711,196 |
|
|
1,589,728 |
|
|
Non-cash amortization of unfavorable contract liabilities |
|
|
(31,893 |
) |
|
(33,955 |
) |
|
Adjusted EBITDA |
|
$ |
20,870,216 |
|
$ |
3,590,534 |
|
|
|
|
|
|
||||
|
|
|
Forecast Second Quarter 2006 |
|
||||
|
|
|
|
|
||||
|
|
|
Low End |
|
High End |
|
||
|
|
|
|
|
|
|
||
|
EBITDA |
|
$ |
31,700,000 |
|
$ |
33,700,000 |
|
|
Non-cash ground rent |
|
|
1,700,000 |
|
|
1,700,000 |
|
|
Non-cash amortization of unfavorable contract liabilities |
|
|
(400,000 |
) |
|
(400,000 |
) |
|
Adjusted EBITDA |
|
$ |
33,000,000 |
|
$ |
35,000,000 |
|
|
|
|
|
|
||||
|
|
|
Forecast Full Year 2006 |
|
||||
|
|
|
|
|
||||
|
|
|
Low End |
|
High End |
|
||
|
|
|
|
|
|
|
||
|
EBITDA |
|
$ |
115,900,000 |
|
$ |
118,900,000 |
|
|
Non-cash ground rent |
|
|
7,500,000 |
|
|
7,500,000 |
|
|
Non-cash amortization of unfavorable contract liabilities |
|
|
(1,400,000 |
) |
|
(1,400,000 |
) |
|
Adjusted EBITDA |
|
$ |
122,000,000 |
|
$ |
125,000,000 |
|
We compute FFO in accordance with standards established by NAREIT, which defines FFO as net income (loss) (determined in accordance with GAAP), excluding gains (losses) from sales of property, plus depreciation and amortization and after adjustments for unconsolidated partnerships and joint ventures (which are calculated to reflect FFO on the same basis). We believe that the presentation of FFO provides useful information to investors regarding our operating performance because it is a measure of our operations without regard to specified non-cash items, such as real estate depreciation and amortization and gain or loss on sale of assets. We also use FFO as one measure in determining our results after taking into account the impact of our capital structure.
|
|
|
Historical |
|
||||
|
|
|
|
|
||||
|
|
|
Fiscal Quarter |
|
Fiscal Quarter |
|
||
|
|
|
|
|
|
|
||
|
Net income (loss) |
|
$ |
4,366,014 |
|
$ |
(5,261,511 |
) |
|
Real estate related depreciation and amortization |
|
|
9,047,108 |
|
|
4,362,146 |
|
|
FFO |
|
$ |
13,413,122 |
|
$ |
(899,365 |
) |
|
FFO per Share (Basic and Diluted) |
|
$ |
0.26 |
|
$ |
(0.04 |
) |
|
|
|
|
|
||||
|
|
|
Forecast Second Quarter 2006 |
|
||||
|
|
|
|
|
||||
|
|
|
Low End |
|
High End |
|
||
|
|
|
|
|
|
|
||
|
Net income |
|
$ |
9,200,000 |
|
$ |
11,200,000 |
|
|
Real estate related depreciation and amortization |
|
|
12,000,000 |
|
|
12,000,000 |
|
|
FFO |
|
$ |
21,200,000 |
|
$ |
23,200,000 |
|
|
|
|
|
|
||||
|
|
|
Forecast Full Year 2006 |
|
||||
|
|
|
|
|
||||
|
|
|
Low End |
|
High End |
|
||
|
|
|
|
|
|
|
||
|
Net income |
|
$ |
26,400,000 |
|
$ |
29,400,000 |
|
|
Real estate related depreciation and amortization |
|
|
50,000,000 |
|
|
50,000,000 |
|
|
FFO |
|
$ |
76,400,000 |
|
$ |
79,400,000 |
|
Management also evaluates our performance by reviewing Adjusted FFO because the Company believes that the exclusion of certain additional recurring and non-recurring items described below provides useful supplemental information regarding our ongoing operating performance and that the presentation of Adjusted FFO, when combined with the primary GAAP presentation of net income, is beneficial to a complete understanding of our operating performance. We adjust FFO for the following items, which may occur in any period, and refer to this measure as Adjusted FFO:
|
|
* |
Non-Cash Ground Rent: We exclude the non-cash expense incurred from straight lining the rent from our ground lease obligations and the non-cash amortization of our favorable lease asset. |
|
|
|
|
|
|
* |
The impact of the non-cash amortization of the unfavorable contract liabilities recorded in conjunction with our acquisitions of the Bethesda Marriott Suites and the Chicago Marriott Downtown. The amortization of the unfavorable contract liabilities does not reflect the underlying performance of the Company. |
|
|
|
|
|
|
* |
Cumulative effect of a change in accounting principle: Infrequently, the Financial Accounting Standards Board (FASB) promulgates new accounting standards that require the consolidated statement of operations to reflect the cumulative effect of a change in accounting principle. We exclude these one-time adjustments because they do not reflect our actual performance for that period. |
|
|
|
|
|
|
* |
Impairment Losses: We exclude the effect of impairment losses recorded because we believe that including them in EBITDA is not consistent with reflecting the ongoing performance of our remaining assets. In addition, we believe that impairment charges are similar to gains (losses) on dispositions and depreciation expense, both of which are also excluded from EBITDA. |
|
|
|
Historical |
|
||||
|
|
|
|
|
||||
|
|
|
Fiscal Quarter |
|
Fiscal Quarter |
|
||
|
|
|
|
|
|
|
||
|
FFO |
|
$ |
13,413,122 |
|
$ |
(899,365 |
) |
|
Non-cash ground rent |
|
|
1,711,196 |
|
|
1,589,728 |
|
|
Non-cash amortization of unfavorable contract liabilities |
|
|
(31,893 |
) |
|
(33,955 |
) |
|
Adjusted FFO |
|
$ |
15,092,425 |
|
$ |
656,408 |
|
|
Adjusted FFO per Share (Basic and Diluted) |
|
$ |
0.29 |
|
$ |
0.03 |
|
|
|
|
|
|
||||
|
|
|
Forecast Second Quarter 2006 |
|
||||
|
|
|
|
|
||||
|
|
|
Low End |
|
High End |
|
||
|
|
|
|
|
|
|
||
|
FFO |
|
$ |
21,200,000 |
|
$ |
23,200,000 |
|
|
Non-cash ground rent |
|
|
1,700,000 |
|
|
1,700,000 |
|
|
Non-cash amortization of unfavorable contract liabilities |
|
|
(400,000 |
) |
|
(400,000 |
) |
|
Adjusted FFO |
|
$ |
22,500,000 |
|
$ |
24,500,000 |
|
|
|
|
|
|
||||
|
|
|
Forecast Full Year 2006 |
|
||||
|
|
|
|
|
||||
|
|
|
Low End |
|
High End |
|
||
|
|
|
|
|
|
|
||
|
FFO |
|
$ |
76,400,000 |
|
$ |
79,400,000 |
|
|
Non-cash ground rent |
|
|
7,500,000 |
|
|
7,500,000 |
|
|
Non-cash amortization of unfavorable contract liabilities |
|
|
(1,400,000 |
) |
|
(1,400,000 |
) |
|
Adjusted FFO |
|
$ |
82,500,000 |
|
$ |
85,500,000 |
|
Certain Definitions
In this release, when we discuss our hotels on a “Same Store” basis, we are discussing all of our hotels except the newly built SpringHill Suites Atlanta Buckhead, which we exclude for all periods prior to its opening in July of 2005 and the comparable period in 2006.
In this release, when we discuss “Hotel Adjusted EBITDA,” we exclude from Hotel EBITDA the non-cash expense incurred by the hotel due to the straight lining of the rent from our ground lease obligations and the non-cash amortization of our favorable lease asset. Hotel EBITDA represents hotel net income (loss) excluding: (1) interest expense; (2) income taxes; and (3) depreciation and amortization. Hotel Adjusted EBITDA margins are calculated as Hotel Adjusted EBITDA divided by total hotel revenues.
Market Capitalization as of March 24, 2006
|
Enterprise Value |
|
March 24, 2006 |
|
|
|
|
|
|
|
|
|
Common equity capitalization (at 3/24/06 closing price of $12.97/share) |
|
$ |
673,943,444 |
|
|
Consolidated debt |
|
|
750,825,789 |
|
|
Cash and cash equivalents |
|
|
(13,301,764 |
) |
|
Total enterprise value |
|
$ |
1,411,467,469 |
|
|
Dividend Per Share |
|
|
|
|
|
Common dividend declared (holders of record on March 24, 2006) |
|
$ |
0.18 |
|
|
Share Reconciliation |
|
|
|
|
|
Common shares outstanding, held by third parties |
|
|
46,199,193 |
|
|
Common shares outstanding, held by Marriott International |
|
|
4,428,571 |
|
|
Common shares outstanding, held by management and directors |
|
|
192,100 |
|
|
Subtotal |
|
|
50,819,864 |
|
|
Unvested restricted stock held by management and employees |
|
|
747,000 |
|
|
Share grants under deferred compensation plan held by corporate officers |
|
|
394,851 |
|
|
Combined shares outstanding |
|
|
51,961,715 |
|
Debt Summary at March 24, 2006
(dollars in thousands)
|
Property |
|
Interest Rate |
|
Spread to LIBOR |
|
Outstanding |
|
Maturity |
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||
|
Courtyard Manhattan/ Midtown East |
|
|
5.195 |
% |
|
Fixed |
|
$ |
43,899 |
|
|
December 2009 |
|
|
Salt Lake City Marriott Downtown |
|
|
5.500 |
% |
|
Fixed |
|
|
37,733 |
|
|
December 2014 |
|
|
Courtyard Manhattan/ Fifth Avenue |
|
|
7.45 |
% |
|
270 |
bps |
|
23,000 |
|
|
January 2007 |
|
|
Marriott Griffin Gate Resort |
|
|
5.110 |
% |
|
Fixed |
|
|
30,281 |
|
|
January 2010 |
|
|
Bethesda Marriott Suites |
|
|
7.690 |
% |
|
Fixed |
|
|
19,168 |
|
|
February 2023 |
|
|
Los Angeles Airport Marriott |
|
|
5.300 |
% |
|
Fixed |
|
|
82,600 |
|
|
June 2015 |
|
|
Marriott Frenchman’s Reef |
|
|
5.440 |
% |
|
Fixed |
|
|
62,500 |
|
|
July 2015 |
|
|
Renaissance Worthington |
|
|
5.400 |
% |
|
Fixed |
|
|
57,400 |
|
|
June 2015 |
|
|
Orlando Airport Marriott |
|
|
5.680 |
% |
|
Fixed |
|
|
59,000 |
|
|
December 2015 |
|
|
Chicago Marriott Downtown |
|
|
6.54 |
% |
|
155 |
bps |
|
220,000 |
|
|
March 2008 |
|
|
Wachovia Short-term Chicago Bridge loan |
|
|
6.14 |
% |
|
145 |
bps |
|
79,500 |
|
|
May 2006 |
|
|
Credit Facility Borrowings |
|
|
6.14 |
% |
|
145 |
bps |
|
33,000 |
|
|
July 2008 |
|
|
Total Debt (excluding Debt Premium) |
|
|
|
|
|
|
|
|
748,081 |
|
|
|
|
Portfolio Composition and Projected Total Investment
|
Property |
|
Location |
|
Number of |
|
2005 |
|
|||
|
|
|
|
|
|
|
|
|
|||
|
Atlanta Alpharetta Marriott |
|
|
Atlanta, GA |
|
|
318 |
|
$ |
38,833,000 |
|
|
Westin Atlanta North |
|
|
Atlanta, GA |
|
|
369 |
|
|
|
|
|
Bethesda Marriott Suites |
|
|
Bethesda, MD |
|
|
272 |
|
|
42,185,000 |
|
|
Chicago Marriott Downtown |
|
|
Chicago, IL |
|
|
1,192 |
|
|
|
|
|
Courtyard Manhattan / Fifth Avenue |
|
|
New York, NY |
|
|
185 |
|
|
41,832,000 |
|
|
Courtyard Manhattan / Midtown East |
|
|
New York, NY |
|
|
307 |
|
|
75,382,000 |
|
|
Frenchman’s Reef & Morning Star Marriott Beach Resort |
|
|
St. Thomas, USVI |
|
|
504 |
|
|
76,106,000 |
|
|
Los Angeles Airport Marriott |
|
|
Los Angeles, CA |
|
|
1,004 |
|
|
114,681,000 |
|
|
Marriott Griffin Gate Resort |
|
|
Lexington, KY |
|
|
408 |
|
|
49,779,000 |
|
|
Oak Brook Hills Marriott Resort |
|
|
Oak Brook, IL |
|
|
384 |
|
|
66,165,000 |
|
|
Orlando Airport Marriott |
|
|
Orlando, FL |
|
|
486 |
|
|
71,154,000 |
|
|
Renaissance Worthington Hotel Fort Worth |
|
|
Fort Worth, TX |
|
|
504 |
|
|
80,811,000 |
|
|
Salt Lake City Marriott Downtown |
|
|
Salt Lake City, UT |
|
|
510 |
|
|
51,123,000 |
|
|
SpringHill Suites Atlanta Buckhead |
|
|
Atlanta, GA |
|
|
220 |
|
|
34,341,000 |
|
|
The Lodge at Sonoma, a Renaissance Resort and Spa |
|
|
Sonoma, CA |
|
|
182 |
|
|
32,430,000 |
|
|
Torrance Marriott |
|
|
Los Angeles County, CA |
|
|
487 |
|
|
67,421,000 |
|
|
Vail Marriott Mountain Resort and Spa |
|
|
Vail, CO |
|
|
346 |
|
|
65,259,000 |
|
|
Total |
|
|
|
|
|
7,678 |
|
$ |
907,502,000 |
|
|
Property |
|
2006 Hotel |
|
2006 Budgeted |
|
Y/E 2006 |
|
Projected |
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||
|
Atlanta Alpharetta Marriott |
|
$ |
|
|
$ |
290,000 |
|
$ |
39,123,000 |
|
$ |
123,028 |
|
|
Westin Atlanta North |
|
|
62,614,000 |
|
|
2,100,000 |
|
|
64,714,000 |
|
|
175,377 |
|
|
Bethesda Marriott Suites |
|
|
|
|
|
5,872,000 |
|
|
48,057,000 |
|
|
176,680 |
|
|
Chicago Marriott Downtown |
|
|
308,200,000 |
|
|
2,150,000 |
|
|
310,350,000 |
|
|
260,361 |
|
|
Courtyard Manhattan/ Fifth Avenue |
|
|
|
|
|
2,539,000 |
|
|
44,371,000 |
|
|
239,843 |
|
|
Courtyard Manhattan/ Midtown East |
|
|
|
|
|
2,827,000 |
|
|
78,209,000 |
|
|
254,752 |
|
|
Frenchman’s Reef & Morning Star Marriott Beach Resort |
|
|
|
|
|
10,870,000 |
|
|
86,976,000 |
|
|
172,571 |
|
|
Los Angeles Airport Marriott |
|
|
|
|
|
18,428,000 |
|
|
133,109,000 |
|
|
132,579 |
|
|
Marriott Griffin Gate Resort |
|
|
|
|
|
1,933,000 |
|
|
51,712,000 |
|
|
126,745 |
|
|
Oak Brook Hills Marriott Resort |
|
|
|
|
|
11,761,000 |
|
|
77,926,000 |
|
|
202,932 |
|
|
Orlando Airport Marriott |
|
|
|
|
|
12,235,000 |
|
|
83,389,000 |
|
|
171,582 |
|
|
Renaissance Worthington Hotel Fort Worth |
|
|
|
|
|
3,106,000 |
|
|
83,917,000 |
|
|
166,502 |
|
|
Salt Lake City Marriott Downtown |
|
|
|
|
|
3,726,000 |
|
|
54,849,000 |
|
|
107,547 |
|
|
SpringHill Suites Atlanta Buckhead |
|
|
|
|
|
40,000 |
|
|
34,381,000 |
|
|
156,277 |
|
|
The Lodge at Sonoma, a Renaissance Resort and Spa |
|
|
|
|
|
512,000 |
|
|
32,942,000 |
|
|
181,000 |
|
|
Torrance Marriott |
|
|
|
|
|
7,450,000 |
|
|
74,871,000 |
|
|
153,739 |
|
|
Vail Marriott Mountain Resort and Spa |
|
|
|
|
|
3,690,000 |
|
|
68,949,000 |
|
|
199,275 |
|
|
Total |
|
$ |
370,814,000 |
|
$ |
89,529,000 |
|
$ |
1,367,845,000 |
|
$ |
178,151 |
|
|
|
|
|
(1) |
As of December 31, 2005. |
|
(2) |
2006 Budgeted Capital Expenditures represents capital expenditures regardless of whether they will be paid for through an escrow account or owner funding. |
|
(3) |
Total projected investments for each hotel property is the gross book value of the hotel as of December 31, 2005 plus budgeted 2006 capital improvements. |
Pro Forma Operating Statistics (1)
|
|
|
ADR |
|
Occupancy |
|
||||||||||||||
|
|
|
|
|
|
|
||||||||||||||
|
|
|
1Q 2006 |
|
1Q 2005 |
|
B/(W) |
|
1Q 2006 |
|
1Q 2005 |
|
B/(W) |
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Atlanta Alpharetta |
|
$ |
143.94 |
|
$ |
132.74 |
|
|
8.4 |
% |
|
62.3 |
% |
|
61.8 |
% |
|
0.5 |
% |
|
Westin Atlanta North(2) |
|
$ |
145.74 |
|
$ |
133.20 |
|
|
9.4 |
% |
|
61.5 |
% |
|
62.8 |
% |
|
(1.3 |
)% |
|
Bethesda Marriott Suites |
|
$ |
180.23 |
|
$ |
172.09 |
|
|
4.7 |
% |
|
59.1 |
% |
|
61.0 |
% |
|
(1.9 |
)% |
|
Buckhead SpringHill Suites |
|
$ |
117.35 |
|
|
N/A |
|
|
N/A |
|
|
68.2 |
% |
|
N/A |
|
|
N/A |
|
|
Chicago Marriott |
|
$ |
165.51 |
|
$ |
151.21 |
|
|
9.5 |
% |
|
64.1 |
% |
|
51.8 |
% |
|
12.3 |
% |
|
Courtyard Fifth Avenue |
|
$ |
198.50 |
|
$ |
166.79 |
|
|
19.0 |
% |
|
85.4 |
% |
|
77.8 |
% |
|
7.6 |
% |
|
Courtyard Midtown East |
|
$ |
206.48 |
|
$ |
184.82 |
|
|
11.7 |
% |
|
64.9 |
% |
|
84.9 |
% |
|
(20.1 |
) % |
|
Frenchman’s Reef (2) |
|
$ |
282.73 |
|
$ |
266.77 |
|
|
6.0 |
% |
|
82.3 |
% |
|
82.9 |
% |
|
(0.6 |
) % |
|
Griffin Gate Marriott |
|
$ |
109.24 |
|
$ |
101.42 |
|
|
7.7 |
% |
|
49.1 |
% |
|
52.1 |
% |
|
(3.0 |
) % |
|
Los Angeles Airport |
|
$ |
113.42 |
|
$ |
103.67 |
|
|
9.4 |
% |
|
84.2 |
% |
|
80.7 |
% |
|
3.4 |
% |
|
Oak Brook Hills (3) |
|
$ |
130.45 |
|
$ |
109.28 |
|
|
19.4 |
% |
|
38.4 |
% |
|
37.2 |
% |
|
1.2 |
% |
|
Orlando Airport Marriott (3) |
|
$ |
125.32 |
|
$ |
113.11 |
|
|
10.8 |
% |
|
81.7 |
% |
|
92.0 |
% |
|
(10.3 |
) % |
|
Salt Lake City Marriott |
|
$ |
129.57 |
|
$ |
123.03 |
|
|
5.3 |
% |
|
78.3 |
% |
|
68.6 |
% |
|
9.7 |
% |
|
Sonoma Renaissance |
|
$ |
167.45 |
|
$ |
161.67 |
|
|
3.6 |
% |
|
58.4 |
% |
|
54.7 |
% |
|
3.7 |
% |
|
Torrance Marriott |
|
$ |
107.92 |
|
$ |
106.09 |
|
|
1.7 |
% |
|
79.7 |
% |
|
81.8 |
% |
|
(2.2 |
) % |
|
Vail Marriott (2) |
|
$ |
302.06 |
|
$ |
261.42 |
|
|
15.5 |
% |
|
88.9 |
% |
|
80.0 |
% |
|
8.9 |
% |
|
Renaissance Worthington |
|
$ |
165.78 |
|
$ |
146.91 |
|
|
12.8 |
% |
|
78.8 |
% |
|
78.2 |
% |
|
0.6 |
% |
|
|
|
RevPAR |
|
Hotel Adjusted EBITDA Margin |
|
||||||||||||||
|
|
|
|
|
|
|
||||||||||||||
|
|
|
1Q 2006 |
|
1Q 2005 |
|
B/(W) |
|
1Q 2006 |
|
1Q 2005 |
|
B/(W) |
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Atlanta Alpharetta |
|
$ |
89.69 |
|
$ |
81.99 |
|
|
9.4 |
% |
|
33.8 |
% |
|
31.8 |
% |
|
2.01 |
% |
|
Westin Atlanta North (2) |
|
$ |
89.64 |
|
$ |
83.70 |
|
|
7.1 |
% |
|
28.3 |
% |
|
25.8 |
% |
|
2.56 |
% |
|
Bethesda Marriott Suites |
|
$ |
106.48 |
|
$ |
104.96 |
|
|
1.5 |
% |
|
17.1 |
% |
|
24.1 |
% |
|
(7.04 |
) % |
|
Buckhead SpringHill Suites |
|
$ |
79.99 |
|
|
N/A |
|
|
N/A |
|
|
40.9 |
% |
|
N/A |
|
|
N/A |
|
|
Chicago Marriott |
|
$ |
106.09 |
|
$ |
78.32 |
|
|
35.4 |
% |
|
14.3 |
% |
|
1.0 |
% |
|
13.29 |
% |
|
Courtyard Fifth Avenue |
|
$ |
169.46 |
|
$ |
129.79 |
|
|
30.6 |
% |
|
21.5 |
% |
|
25.2 |
% |
|
(3.69 |
) % |
|
Courtyard Midtown East |
|
$ |
133.93 |
|
$ |
156.98 |
|
|
(14.7 |
) % |
|
10.3 |
% |
|
27.8 |
% |
|
(17.59 |
) % |
|
Frenchman’s Reef (2) |
|
$ |
232.58 |
|
$ |
221.15 |
|
|
5.2 |
% |
|
34.3 |
% |
|
36.6 |
% |
|
(2.31 |
) % |
|
Griffin Gate Marriott |
|
$ |
53.66 |
|
$ |
52.85 |
|
|
1.5 |
% |
|
6.8 |
% |
|
3.8 |
% |
|
3.00 |
% |
|
Los Angeles Airport |
|
$ |
95.47 |
|
$ |
83.71 |
|
|
14.0 |
% |
|
32.5 |
% |
|
27.8 |
% |
|
4.68 |
% |
|
Oak Brook Hills (3) |
|
$ |
50.09 |
|
$ |
40.65 |
|
|
23.2 |
% |
|
(2.6 |
) % |
|
(2.7 |
) % |
|
0.02 |
% |
|
Orlando Airport Marriott (3) |
|
$ |
102.35 |
|
$ |
104.05 |
|
|
(1.6 |
) % |
|
36.2 |
% |
|
36.4 |
% |
|
(0.18 |
) % |
|
Salt Lake City Marriott |
|
$ |
101.49 |
|
$ |
84.43 |
|
|
20.2 |
% |
|
32.2 |
% |
|
25.6 |
% |
|
6.59 |
% |
|
Sonoma Renaissance |
|
$ |
97.85 |
|
$ |
88.50 |
|
|
10.6 |
% |
|
2.2 |
% |
|
(7.6 |
) % |
|
9.83 |
% |
|
Torrance Marriott |
|
$ |
85.97 |
|
$ |
86.83 |
|
|
(1.0 |
) % |
|
25.0 |
% |
|
26.2 |
% |
|
(1.21 |
) % |
|
Vail Marriott (2) |
|
$ |
268.51 |
|
$ |
209.13 |
|
|
28.4 |
% |
|
46.3 |
% |
|
43.9 |
% |
|
2.38 |
% |
|
Renaissance Worthington |
|
$ |
130.67 |
|
$ |
114.88 |
|
|
13.8 |
% |
|
30.7 |
% |
|
25.9 |
% |
|
4.76 |
% |
|
|
|
|
(1) |
In some cases, DiamondRock was not the owner of the hotel during all or part of the respective quarter. Data provided is based on the best currently available data. |
|
(2) |
The hotel reports results on a monthly basis. The figures presented are based on the Company’s reporting calendar for the first quarter and include only the months of January and February. |
|
(3) |
During 2005, the property was operated on a monthly financial reporting basis. Therefore, the figures presented for 2005 reflect a calendar quarter of January 1, 2005 - March 31, 2005. |
Hotel Adjusted EBITDA Reconciliation (1)
|
|
|
1st Quarter 2006 |
|
||||||||||||||||
|
|
|
|
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
Plus: |
|
Plus: |
|
Plus: |
|
Equals: |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
Total |
|
Net |
|
Depreciation |
|
Interest |
|
Non-Cash |
|
Hotel |
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Atlanta Alpharetta |
|
$ |
3,562 |
|
$ |
880 |
|
$ |
324 |
|
$ |
— |
|
$ |
— |
|
$ |
1,203 |
|
|
Westin Atlanta North (3) |
|
$ |
3,116 |
|
$ |
883 |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
883 |
|
|
Bethesda Marriott Suites |
|
$ |
3,240 |
|
$ |
(1,790 |
) |
$ |
517 |
|
$ |
348 |
|
$ |
1,478 |
|
$ |
553 |
|
|
Buckhead SpringHill Suites |
|
$ |
1,614 |
|
$ |
395 |
|
$ |
266 |
|
$ |
— |
|
$ |
— |
|
$ |
660 |
|
|
Chicago Marriott |
|
$ |
16,201 |
|
$ |
(3,069 |
) |
$ |
2,337 |
|
$ |
3,051 |
|
$ |
— |
|
$ |
2,319 |
|
|
Courtyard Fifth Avenue |
|
$ |
2,669 |
|
$ |
(311 |
) |
$ |
385 |
|
$ |
428 |
|
$ |
72 |
|
$ |
574 |
|
|
Courtyard Midtown East |
|
$ |
3,593 |
|
$ |
(705 |
) |
$ |
626 |
|
$ |
447 |
|
$ |
— |
|
$ |
368 |
|
|
Frenchman’s Reef(3) |
|
$ |
9,818 |
|
$ |
1,571 |
|
$ |
1,000 |
|
$ |
800 |
|
$ |
— |
|
$ |
3,371 |
|
|
Griffin Gate Marriott |
|
$ |
3,730 |
|
$ |
(619 |
) |
$ |
514 |
|
$ |
357 |
|
$ |
1 |
|
$ |
254 |
|
|
Los Angeles Airport |
|
$ |
13,897 |
|
$ |
2,468 |
|
$ |
1,027 |
|
$ |
1,020 |
|
$ |
— |
|
$ |
4,515 |
|
|
Oak Brook Hills |
|
$ |
3,828 |
|
$ |
(1,025 |
) |
$ |
799 |
|
$ |
— |
|
$ |
125 |
|
$ |
(101 |
) |
|
Orlando Airport Marriott |
|
$ |
6,299 |
|
$ |
494 |
|
$ |
1,012 |
|
$ |
776 |
|
$ |
— |
|
$ |
2,282 |
|
|
Salt Lake City Marriott |
|
$ |
6,522 |
|
$ |
1,047 |
|
$ |
584 |
|
$ |
467 |
|
$ |
— |
|
$ |
2,099 |
|
|
Sonoma Renaissance |
|
$ |
2,865 |
|
$ |
(350 |
) |
$ |
414 |
|
$ |
— |
|
$ |
— |
|
$ |
63 |
|
|
Torrance Marriott |
|
$ |
5,046 |
|
$ |
780 |
|
$ |
482 |
|
$ |
— |
|
$ |
— |
|
$ |
1,263 |
|
|
Vail Marriott (3) |
|
$ |
7,224 |
|
$ |
2,813 |
|
$ |
529 |
|
$ |
— |
|
$ |
— |
|
$ |
3,342 |
|
|
Renaissance Worthington |
|
$ |
9,142 |
|
$ |
1,554 |
|
$ |
531 |
|
$ |
722 |
|
$ |
— |
|
$ |
2,806 |
|
|
|
|
|
(1) |
In some cases, DiamondRock was not the owner of the hotel during all or part of the respective quarter. Data provided is based on the best currently available data. |
|
(2) |
Where applicable, also includes the amortization of unfavorable contract or lease liability. |
|
(3) |
The hotel reports results on a monthly basis. The figures presented are based on the Company’s reporting calendar for the first quarter and include only the months of January and February. |
Hotel Adjusted EBITDA Reconciliation (1)
|
|
|
1st Quarter 2005 |
|
||||||||||||||||
|
|
|
|
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
Plus: |
|
Plus: |
|
Plus: |
|
Equals: |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
Total |
|
|
Net |
|
|
Depreciation |
|
|
Interest |
|
|
Non-Cash |
|
|
Hotel |
|
|
|
|
|
|
|
|
|
||||||||||||
|
Atlanta Alpharetta |
|
$ |
3,430 |
|
$ |
783 |
|
$ |
307 |
|
$ |
— |
|
$ |
— |
|
$ |
1,090 |
|
|
Westin Atlanta North (3) |
|
$ |
3,156 |
|
$ |
814 |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
814 |
|
|
Bethesda Marriott Suites |
|
$ |
3,231 |
|
$ |
(1,559 |
) |
$ |
509 |
|
$ |
345 |
|
$ |
1,484 |
|
$ |
779 |
|
|
Buckhead SpringHill Suites |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
|
Chicago Marriott |
|
$ |
12,309 |
|
$ |
(5,261 |
) |
$ |
2,337 |
|
$ |
3,051 |
|
$ |
— |
|
$ |
127 |
|
|
Courtyard Fifth Avenue |
|
$ |
2,069 |
|
$ |
(367 |
) |
$ |
507 |
|
$ |
309 |
|
$ |
72 |
|
$ |
521 |
|
|
Courtyard Midtown East |
|
$ |
4,294 |
|
$ |
(134 |
) |
$ |
778 |
|
$ |
552 |
|
$ |
— |
|
$ |
1,195 |
|
|
Frenchman’s Reef(3) |
|
$ |
9,280 |
|
$ |
1,962 |
|
$ |
589 |
|
$ |
850 |
|
$ |
— |
|
$ |
3,401 |
|
|
Griffin Gate Marriott |
|
$ |
3,545 |
|
$ |
(697 |
) |
$ |
458 |
|
$ |
373 |
|
$ |
1 |
|
$ |
135 |
|
|
Los Angeles Airport |
|
$ |
12,371 |
|
$ |
1,491 |
|
$ |
883 |
|
$ |
1,067 |
|
$ |
— |
|
$ |
3,441 |
|
|
Oak Brook Hills (4) |
|
$ |
3,743 |
|
$ |
(1,114 |
) |
$ |
876 |
|
$ |
— |
|
$ |
138 |
|
$ |
(100 |
) |
|
Orlando Airport Marriott (4) |
|
$ |
7,177 |
|
$ |
1,284 |
|
$ |
555 |
|
$ |
774 |
|
$ |
— |
|
$ |
2,613 |
|
|
Salt Lake City Marriott |
|
$ |
5,486 |
|
$ |
339 |
|
$ |
561 |
|
$ |
504 |
|
$ |
— |
|
$ |
1,404 |
|
|
Sonoma Renaissance |
|
$ |
2,643 |
|
$ |
(864 |
) |
$ |
411 |
|
$ |
251 |
|
$ |
— |
|
$ |
(201 |
) |
|
Torrance Marriott |
|
$ |
5,329 |
|
$ |
(295 |
) |
$ |
1,136 |
|
$ |
557 |
|
$ |
— |
|
$ |
1,398 |
|
|
Vail Marriott (3) |
|
$ |
6,096 |
|
$ |
2,121 |
|
$ |
554 |
|
$ |
— |
|
$ |
— |
|
$ |
2,675 |
|
|
Renaissance Worthington |
|
$ |
8,157 |
|
$ |
731 |
|
$ |
643 |
|
$ |
741 |
|
$ |
— |
|
$ |
2,116 |
|
|
|
|
|
(1) |
In some cases, DiamondRock was not the owner of the hotel during all or part of the respective quarter. Data provided is based on the best currently available data. |
|
(2) |
Where applicable, also includes the amortization of unfavorable contract or lease liability. |
|
(3) |
The hotel reports results on a monthly basis. The figures presented are based on the Company’s reporting calendar for the first quarter and include only the months of January and February. |
|
(4) |
During 2005, the property was operated on a monthly financial reporting basis. Therefore, the figures presented for 2005 reflect a calendar quarter of January 1, 2005 - March 31, 2005. |
SOURCE DiamondRock Hospitality Company
-0- 05/02/2006
/CONTACT: Mark W. Brugger of DiamondRock Hospitality Company, +1-240-744-1150/
/Photo: NewsCom: http://www.newscom.com/cgi-bin/prnh/20040708/DCTH028
AP Archive: http://photoarchive.ap.org
PRN Photo Desk photodesk@prnewswire.com/
/Web site: http://www.diamondrockhospitality.com/