Form 8-K

 

 

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 10, 2013

 

 

DiamondRock Hospitality Company

(Exact name of registrant as specified in charter)

 

 

 

Maryland   001-32514   20-1180098

(State or Other Jurisdiction

of Incorporation)

 

(Commission

File Number)

 

(IRS Employer

Identification No.)

3 Bethesda Metro Center, Suite 1500

Bethesda, MD 20814

(Address of Principal Executive Offices) (Zip Code)

(240) 744-1150

(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):

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 


The information in this Current Report on Form 8-K, including the exhibits attached hereto, is being furnished and 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 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.

 

ITEM 2.02. Results of Operations and Financial Condition.

On May 10, 2013, DiamondRock Hospitality Company (the “Company”) issued a press release announcing its financial results for the quarter ended March 31, 2013 (the “Press Release”). 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.

 

  (d) Exhibits.

The following exhibits are included with this report:

 

Exhibit No.

  

Description

99.1    Press release dated May 10, 2013.


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.

 

  DIAMONDROCK HOSPITALITY COMPANY
Date: May 10, 2013   By:  

/s/ William J. Tennis

    William J. Tennis
   

Executive Vice President, General Counsel and

Corporate Secretary

EX-99.1

Exhibit 99.1

 

LOGO

COMPANY CONTACT

Sean Mahoney

(240) 744-1150

FOR IMMEDIATE RELEASE

FRIDAY, MAY 10, 2013

DIAMONDROCK HOSPITALITY COMPANY REPORTS FIRST QUARTER 2013 RESULTS

BETHESDA, Maryland, Friday, May 10, 2013 – DiamondRock Hospitality Company (the “Company”) (NYSE: DRH), a lodging-focused real estate investment trust that owns a portfolio of 27 premium hotels in the United States, today announced results of operations for the quarter ended March 31, 2013.

First Quarter Highlights

 

   

RevPAR: The Company’s RevPAR was $119.40, an increase of 2.0% from 2012. Excluding the Company’s New York City hotels under renovation, the Company’s RevPAR increased 5.6% from 2012.

 

   

Hotel Adjusted EBITDA Margin: The Company’s Hotel Adjusted EBITDA margin was 20.98%, a decrease of 38 basis points from 2012. Excluding the Company’s New York City hotels under renovation, the Company’s Hotel Adjusted EBITDA margin was 22.98%, an increase of 93 basis points from 2012.

 

   

Adjusted EBITDA: The Company’s Adjusted EBITDA was $34.3 million.

 

   

Adjusted FFO: The Company’s Adjusted FFO was $26.8 million and Adjusted FFO per diluted share was $0.14.

 

   

Hotel Financings: The Company raised $102 million through two separate secured financings during the first quarter.

 

   

Allerton Settlement: The Company closed on the settlement of the bankruptcy and related litigation involving its senior mortgage loan secured by the Allerton Hotel, receiving a $5.0 million principal payment and a new $66.0 million mortgage loan.

 

   

Chief Operating Officer: On April 1, 2013, Robert Tanenbaum joined the Company as Chief Operating Officer and Executive Vice President, Asset Management.

 

   

Dividends: The Company declared a quarterly dividend of $0.085 per share during the first quarter.

Mark W. Brugger, President and Chief Executive Officer of DiamondRock Hospitality Company, stated, “Our first quarter operating results were in line with our expectations as lodging fundamentals continue to be very solid. We experienced growth in RevPAR, Adjusted EBITDA and Adjusted FFO despite our operating results being impacted by more than 24,000 displaced rooms at our three New York City hotels under renovation. We also continued to strengthen our balance sheet during the quarter by entering into two attractive loans. DiamondRock is progressing well on the strategic initiatives we outlined in March to position the Company for future growth through value-creating capital investments and further balance sheet enhancements.”


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” and “Adjusted FFO.”

For the quarter ended March 31, 2013, the Company reported the following:

 

     First Quarter     Change  
     2013     2012 Pro Forma1    

ADR

   $ 169.15      $ 162.67        4.0

Occupancy

     70.6     72.0     (1.4) percentage points   

RevPAR

   $ 119.40      $ 117.09        2.0

Total Revenue

   $ 181.3 million      $ 167.0 million        8.5

Hotel Adjusted EBITDA Margin

     20.98     21.36     (38) basis points   

Adjusted EBITDA

   $ 34.3 million      $ 31.4 million        9.0

Adjusted FFO

   $ 26.8 million      $ 25.5 million        4.9

Adjusted FFO per diluted share

   $ 0.14      $ 0.15      $ (0.01

Net (Loss) Income

   $ (4.1 million   $ 8.9 million      $ (13.0 million

(Loss) Income per diluted share

   $ (0.02   $ 0.05      $ (0.07

Diluted Weighted Average Shares

     195.3 million        168.2 million        27.1 million shares   

 

1

Pro forma to (a) include the operating results of the Company’s Marriott-managed hotels from January 1, 2012 to March 23, 2012 and all other hotels from January 1, 2012 to March 31, 2012, (b) assume all of the Company’s hotels were owned as of January 1, 2012, and (c) exclude the operating results of the hotels sold during 2012.

The Company’s operating results for the quarter ended March 31, 2013 were significantly impacted by its three hotels in New York City under renovation, the Lexington Hotel New York, Courtyard Manhattan Midtown East and Courtyard Fifth Avenue. The following are selected operating results for the Company excluding these three hotels:

 

     2013     2012 Pro Forma     Change  

ADR

   $ 166.76      $ 160.84        3.7

Occupancy

     71.4     70.1     1.3 percentage points   

RevPAR

   $ 119.08      $ 112.78        5.6

Total Revenue

   $ 167.3 million      $ 149.7 million        11.8

Hotel Adjusted EBITDA Margin

     22.98     22.05     93 basis points   

The Company also recorded a severance charge of approximately $3.1 million during the quarter in connection with the retirement of John L. Williams.

Capital Expenditures

As previously announced, the Company plans to invest approximately $140 million for capital improvements in 2013 and early 2014. As of March 31, 2013, the Company has spent approximately $13.9 million toward capital improvements at its hotels. The most significant capital projects are as follows:

 

   

Lexington Hotel New York: In connection with executing the rebranding strategy at the Lexington Hotel, the Company is continuing the comprehensive renovation of the hotel, including the lobby, corridors, guest rooms and guest bathrooms. The estimated renovation cost is expected to be approximately $45 million and be substantially complete during the third quarter of 2013.

 

2


   

Manhattan Courtyards: The Company is continuing the $12.0 million renovation of the guest rooms and guest bathrooms at the Courtyard Manhattan/Midtown East and Courtyard Manhattan/Fifth Avenue. The renovation scope at the Courtyard Midtown East also includes the public space and the addition of five new guest rooms. The renovations are on time and on budget and will be substantially complete during the second quarter of 2013.

 

   

Westin Washington D.C.: The Company expects to commence a comprehensive $16.0 million renovation during the fourth quarter of 2013 to reposition the hotel to capture higher-rated business, leisure and group customers. The renovation scope will enhance every aspect of the guest experience, including the guest rooms, corridors, meeting space and the lobby.

 

   

Westin San Diego: The Company expects to commence a comprehensive $14.0 million renovation beginning in the fourth quarter 2013 of the guestrooms, corridors, lobby, public areas, and meeting space at the hotel.

 

   

Hilton Minneapolis: The Company expects to undertake a $13.0 million renovation of the guest rooms, guest bathrooms and corridors at the hotel beginning in late 2013.

 

   

Hilton Boston Downtown: The Company expects to undertake a $7.0 million renovation of the guest rooms, corridors, public areas, and meeting space at the hotel in early 2014.

 

   

Hilton Burlington: The Company expects to undertake a $6.0 million renovation of the corridors and guest rooms at the hotel in early 2014.

The Company continues to expect renovation disruption of $10 to $12 million of Hotel Adjusted EBITDA during the year ended December 31, 2013, which has been factored into its outlook for 2013 detailed below.

Reporting Calendar Change

Effective January 1, 2013, the Company reports its quarterly results of operations on a calendar cycle. Historically, the Company reported its quarterly results of operations based on the fiscal calendar used by Marriott International. Since the Company is not changing its fiscal year, its 2012 financial information will not be restated in its quarterly filings with the U.S. Securities and Exchange Commission. The following table highlights the periods presented in the Company’s 2012 and 2013 reporting calendars.

 

Quarter

  2012 Calendar (as previously reported)   2013 Calendar
1st   Marriott   January 1 – March 23   All   January 1 – March 31
  Non-Marriott   January 1 – February 29    
2nd   Marriott   March 24 – June 15   All   April 1 – June 30
  Non-Marriott   March 1 – May 31    
3rd   Marriott   June 16 – September 7   All   July 1 – September 30
  Non-Marriott   June 1 – August 31    
4th   Marriott   September 8 – December 31   All   October 1 – December 31
  Non-Marriott   September 1 – December 31    

The Company cannot fully restate its 2012 operating results because Marriott did not provide 2012 operating results on a daily basis. Hotel operating results incorporated into the Company’s financial statements are prepared by its hotel managers. The unavailability of 2012 operating results on a calendar quarter basis for all of the Company’s hotels prevented the restatement of the Company’s 2012 quarterly financial statements. Instead, in comparing 2013 quarterly results to 2012 results, the Company will (i) use the non-Marriott 2012 results on a calendar quarter basis and (ii) amend the previously reported Marriott 2012 quarterly results as follows:

 

   

The first quarter of 2012 includes Marriott operating results from January 1 to March 23.

 

   

The second quarter of 2012 includes Marriott operating results from March 24 to June 15.

 

   

The third quarter of 2012 includes Marriott operating results from June 16 to October 5.

 

   

The fourth quarter of 2012 includes the Marriott operating results from October 6 to December 31.

The following table reallocates selected 2012 quarterly pro forma operating information as described above into the 2013 reporting calendar.

 

3


     Quarter 1, 2012     Quarter 2, 2012     Quarter 3, 2012     Quarter 4, 2012  

RevPAR

   $ 117.09      $ 146.48      $ 139.56      $ 133.36   

Revenues (in thousands)

   $ 167,026      $ 210,809      $ 228,371      $ 196,005   

Hotel Adjusted EBITDA (in thousands)

   $ 35,685      $ 64,564      $ 63,776      $ 54,085   

% of Full Year

     16.4     29.6     29.2     24.8

Hotel Adjusted EBITDA Margin

     21.36     30.63     27.93     27.59

Available Rooms

     1,004,405        1,010,443        1,184,252        1,034,027   

Balance Sheet

As of March 31, 2013, the Company had $77.4 million of unrestricted cash on hand and approximately $1.1 billion of total debt, which consists of property-specific mortgage debt and $10.0 million outstanding on the Company’s senior unsecured credit facility. Subsequent to the end of the quarter, the Company repaid the $10.0 million outstanding on the credit facility.

Hotel Financings

In March 2013, the Company raised $102.0 million through two separate secured, non-recourse financings with different lenders on attractive terms. The financings include a $31 million mortgage loan secured by The Lodge at Sonoma Renaissance Resort & Spa with a term of ten years and a fixed interest rate of 3.96% and a $71 million mortgage loan secured by the Westin San Diego with a term of ten years and a fixed interest rate of 3.94%. Principal repayments on each loan are based on a 30-year amortization schedule.

Dividends

The Company’s Board of Directors declared a quarterly dividend of $0.085 per share to stockholders of record as of March 28, 2013, representing a 6% increase over 2012. The dividend was paid on April 12, 2013.

Outlook and Guidance

The Company is providing annual guidance for 2013, but does not undertake to update it for any developments in its business. Achievement of the anticipated results is subject to the risks disclosed in the Company’s filings with the U.S. Securities and Exchange Commission. The Company’s 2013 RevPAR guidance assumes all of the Company’s 27 hotels were owned since January 1, 2012.

The Company is maintaining its 2013 guidance, which was previously provided in connection with the reporting of its 2012 results in February 2013. The Company continues to expect the full year 2013 results to be as follows:

 

Metric

 

Pre-Renovation Guidance

 

Renovation Disruption

 

2013 Guidance

Pro Forma RevPAR Growth   4 percent to 6 percent   3 percent   1 percent to 3 percent
Adjusted EBITDA   $207 million to $215 million   $10 million to $12 million   $195 million to $205 million
Adjusted FFO   $146 million to $152 million   $7 million to $8 million   $138 million to $145 million

Adjusted FFO per share

(based on 195.9 million shares)

  $0.75 to $0.78   $0.04 to $0.05   $0.70 to $0.74

 

4


Earnings Call

The Company will host a conference call to discuss its first quarter results on Friday, May 10, 2013, at 11:00 a.m. Eastern Time (ET). To participate in the live call, investors are invited to dial 800-901-5241 (for domestic callers) or 617-786-2963 (for international callers). The participant passcode is 97572145. A live webcast of the call will be available via the investor relations section of DiamondRock Hospitality Company’s website at www.drhc.com or www.earnings.com. A replay of the webcast will also be archived on the website for one year.

About the Company

DiamondRock Hospitality Company is a self-advised real estate investment trust (REIT) that is an owner of a leading portfolio of geographically diversified hotels concentrated in top gateway markets and destination resort locations. The Company owns 27 premium quality hotels with over 11,500 rooms. The Company has strategically positioned its hotels to generally be operated under the leading global brands such as Hilton, Marriott, and Westin. For further information on the Company and its portfolio, please visit DiamondRock Hospitality Company’s website at 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 “believe,” “expect,” “intend,” “project,” “forecast,” “plan” 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 the Company’s hotels and the demand for hotel products and services; operating risks associated with the hotel business; risks associated with the level of the Company’s indebtedness; relationships with property managers; the 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; risks associated with the development of a hotel by a third-party developer; risks associated with the rebranding of the Lexington Hotel New York; and other risk factors contained in the Company’s filings with the Securities and Exchange Commission. Although the Company believes 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 the Company undertakes no obligation to update any forward-looking statement to conform the statement to actual results or changes in the Company’s expectations.

 

5


DIAMONDROCK HOSPITALITY COMPANY

CONSOLIDATED BALANCE SHEETS

As of March 31, 2013 and December 31, 2012

(in thousands, except share and per share amounts)

 

     March 31, 2013     December 31, 2012  
     (unaudited)        
ASSETS     

Property and equipment, at cost

   $ 3,153,041      $ 3,131,175   

Less: accumulated depreciation

     (546,390     (519,721
  

 

 

   

 

 

 
     2,606,651        2,611,454   

Deferred financing costs, net

     9,481        9,724   

Restricted cash

     90,107        76,131   

Due from hotel managers

     71,208        68,532   

Note receivable

     49,495        53,792   

Favorable lease assets, net

     40,711        40,972   

Prepaid and other assets (1)

     71,131        73,814   

Cash and cash equivalents

     77,375        9,623   
  

 

 

   

 

 

 

Total assets

   $ 3,016,159      $ 2,944,042   
  

 

 

   

 

 

 
LIABILITIES AND STOCKHOLDERS’ EQUITY     

Liabilities:

    

Mortgage debt

   $ 1,067,661      $ 968,731   

Senior unsecured credit facility

     10,000        20,000   
  

 

 

   

 

 

 

Total debt

     1,077,661        988,731   

Deferred income related to key money, net

     24,097        24,362   

Unfavorable contract liabilities, net

     79,573        80,043   

Due to hotel managers

     50,549        51,003   

Dividends declared and unpaid

     16,862        15,911   

Accounts payable and accrued expenses (2)

     92,876        88,879   
  

 

 

   

 

 

 

Total other liabilities

     263,957        260,198   

Stockholders’ Equity:

    

Preferred stock, $0.01 par value; 10,000,000 shares authorized; no shares issued and outstanding

     —          —     

Common stock, $0.01 par value; 400,000,000 shares authorized; 195,419,755 and 195,145,707 shares issued and outstanding at March 31, 2013 and December 31, 2012, respectively

     1,954        1,951   

Additional paid-in capital

     1,976,473        1,976,200   

Accumulated deficit

     (303,886     (283,038
  

 

 

   

 

 

 

Total stockholders’ equity

     1,674,541        1,695,113   
  

 

 

   

 

 

 

Total liabilities and stockholders’ equity

   $ 3,016,159      $ 2,944,042   
  

 

 

   

 

 

 

 

(1) Includes $39.4 million of deferred tax assets, $21.9 million for the Hilton Garden Inn Times Square purchase deposit, $4.3 million of prepaid expenses and $5.5 million of other assets.
(2) Includes $54.6 million of deferred ground rent, $11.4 million of deferred tax liabilities, $10.9 million of accrued capital expenditures, $9.2 million of accrued property taxes and $6.8 million of other accrued liabilities.

 

6


DIAMONDROCK HOSPITALITY COMPANY

CONSOLIDATED STATEMENTS OF OPERATIONS

For the Fiscal Quarters Ended March 31, 2013 and March 23, 2012

(in thousands, except per share amounts)

 

     Fiscal Quarter Ended  
     March 31, 2013     March 23, 2012  
     (Unaudited)     (Unaudited)  

Revenues:

    

Rooms

   $ 124,286      $ 81,493   

Food and beverage

     45,277        30,211   

Other

     11,740        6,719   
  

 

 

   

 

 

 

Total revenues

     181,303        118,423   
  

 

 

   

 

 

 

Operating Expenses:

    

Rooms

     36,343        24,354   

Food and beverage

     33,805        23,304   

Management fees

     4,880        3,067   

Other hotel expenses

     69,567        47,785   

Depreciation and amortization

     26,834        20,061   

Corporate expenses

     7,845        4,516   
  

 

 

   

 

 

 

Total operating expenses

     179,274        123,087   
  

 

 

   

 

 

 

Operating profit (loss)

     2,029        (4,664
  

 

 

   

 

 

 

Other Expenses (Income):

    

Interest income

     (1,285     (63

Interest expense

     13,583        11,468   

Gain on early extinguishment of debt

     —          (144
  

 

 

   

 

 

 

Total other expenses

     12,298        11,261   
  

 

 

   

 

 

 

Loss from continuing operations before income taxes

     (10,269     (15,925

Income tax benefit

     6,143        5,817   
  

 

 

   

 

 

 

Loss from continuing operations

     (4,126     (10,108

Income from discontinued operations, net of income taxes

     —          12,723   
  

 

 

   

 

 

 

Net (loss) income

   $ (4,126   $ 2,615   
  

 

 

   

 

 

 

(Loss) earnings per share:

    

Continuing operations

   $ (0.02   $ (0.06

Discontinued operations

     —          0.08   
  

 

 

   

 

 

 

Basic and diluted (loss) earnings per share

   $ (0.02   $ 0.02   
  

 

 

   

 

 

 

 

7


Non-GAAP Financial Measures

We use the following non-GAAP financial measures that we believe are useful to investors as key measures of our operating performance: EBITDA, Adjusted EBITDA, FFO and Adjusted FFO. These measures should not be considered in isolation or as a substitute for measures of performance in accordance with GAAP. EBITDA, Adjusted EBITDA, FFO and Adjusted FFO, as calculated by us, may not be comparable to other companies that do not define such terms exactly as the Company.

EBITDA and FFO

EBITDA represents net (loss) income 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. In addition, covenants included in our indebtedness use EBITDA as a measure of financial compliance. We also use EBITDA as one measure in determining the value of hotel acquisitions and dispositions.

The Company computes FFO in accordance with standards established by NAREIT, which defines FFO as net (loss) income determined in accordance with GAAP, excluding gains or losses from sales of properties and impairment losses, plus depreciation and amortization. The Company believes that the presentation of FFO provides useful information to investors regarding its operating performance because it is a measure of the Company’s operations without regard to specified non-cash items, such as real estate depreciation and amortization and gain or loss on sale of assets. The Company also uses FFO as one measure in assessing its results.

Adjustments to EBITDA and FFO

We adjust EBITDA and FFO when evaluating our performance because we believe that the exclusion of certain additional recurring and non-recurring items described below provides useful supplemental information to investors regarding our ongoing operating performance and that the presentation of Adjusted EBITDA and Adjusted FFO, when combined with GAAP net income (loss), EBITDA and FFO, is beneficial to an investor’s complete understanding of our operating performance. We adjust EBITDA and FFO for the following items:

 

   

Non-Cash Ground Rent: We exclude the non-cash expense incurred from the straight line recognition of rent from our ground lease obligations and the non-cash amortization of our favorable lease assets.

 

   

Non-Cash Amortization of Favorable and Unfavorable Contracts: We exclude the non-cash amortization of the favorable management contract assets recorded in conjunction with our acquisitions of the Westin Washington D.C. City Center, Westin San Diego, and Hilton Burlington and the non-cash amortization of the unfavorable contract liabilities recorded in conjunction with our acquisitions of the Bethesda Marriott Suites, the Chicago Marriott Downtown, the Renaissance Charleston and the Lexington Hotel New York. The amortization of the favorable and unfavorable contracts does not reflect the underlying operating performance of our hotels.

 

   

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 the effect of these one-time adjustments because they do not reflect its actual performance for that period.

 

   

Gains from Early Extinguishment of Debt: We exclude the effect of gains recorded on the early extinguishment of debt because we believe they do not accurately reflect the underlying performance of the Company.

 

   

Acquisition Costs: We exclude acquisition transaction costs expensed during the period because we believe they do not reflect the underlying performance of the Company.

 

   

Allerton Loan: In 2012, due to the uncertainty of the timing of the bankruptcy resolution, we excluded both cash interest payments received and the legal costs incurred as a result of the bankruptcy proceedings from our calculation of Adjusted EBITDA and Adjusted FFO. Due to the settlement of the bankruptcy proceedings and amended and restated loan, we commenced recognizing interest income in 2013, which includes the amortization of the difference between the carrying basis of the old loan and face value of the new loan. Cash payments received during 2010 and 2011 that were included in Adjusted EBITDA and Adjusted FFO and reduced the carrying basis of the loan will be now be deducted from Adjusted EBITDA and Adjusted FFO on a straight-line basis over the anticipated five-year term of the new loan.

 

   

Other Non-Cash and /or Unusual Items: We exclude the effect of certain non-cash and/or unusual items because we believe they do not reflect the underlying performance of the Company. In 2012, we excluded the franchise termination fee paid to Radisson because we believe that including it would not be consistent with reflecting the ongoing performance of the hotel. In 2013, we exclude the severance costs associated with the retirement of our Chief Operating Officer because these costs do not reflect the underlying performance of the Company.

 

8


In addition, to derive Adjusted EBITDA we exclude gains or losses on dispositions and impairment losses because we believe that including them in EBITDA is not consistent with reflecting the ongoing performance of our hotels. Additionally, the gain or loss on dispositions and impairment losses represent either accelerated depreciation or excess depreciation in previous periods, and depreciation is excluded from EBITDA.

In addition, to derive Adjusted FFO we exclude any fair value adjustments to debt instruments. Specifically, we exclude the impact of the non-cash amortization of the debt premium recorded in conjunction with the acquisition of the JW Marriott Denver at Cherry Creek and fair market value adjustments to the Company’s interest rate cap agreement.

The following table is a reconciliation of our U.S. GAAP net loss to EBITDA and Adjusted EBITDA (in thousands):

 

     Fiscal Quarter Ended  
     March 31, 2013     March 23, 2012
Pro Forma (1)
    March 23, 2012
As Reported (2)
 

Net (loss) income

   $ (4,126   $ 8,901      $ 2,615   

Interest expense (3)

     13,583        11,466        13,765   

Income tax benefit (4)

     (6,143     (5,588     (5,588

Real estate related depreciation and amortization (5)

     26,834        24,464        20,518   
  

 

 

   

 

 

   

 

 

 

EBITDA

     30,148        39,243        31,310   

Non-cash ground rent

     1,693        1,575        1,531   

Non-cash amortization of favorable and unfavorable contracts, net

     (354     (317     (432

Gain on sale of hotel properties

     —          (10,017     (10,017

Gain on early extinguishment of debt

     —          (144     (144

Acquisition costs

     9        33        33   

Reversal of previously recognized Allerton income

     (291     —          —     

Allerton loan legal fees

     —          322        322   

Franchise termination fee

     —          750        750   

Severance costs (6)

     3,065        —          —     
  

 

 

   

 

 

   

 

 

 

Adjusted EBITDA

   $ 34,270      $ 31,445      $ 23,353   
  

 

 

   

 

 

   

 

 

 

 

(1) Pro forma to (a) include the operating results of the Company’s Marriott-managed hotels from January 1, 2012 to March 23, 2012 and all other hotels from January 1, 2012 to March 31, 2012, (b) assume all of the Company’s 27 hotels were owned as of January 1, 2012, and (c) exclude the operating results of the hotels sold during 2012.
(2) As reported in the Company’s Quarterly Report on Form 10-Q filed with the SEC on April 30, 2012.
(3) Amounts include interest expense included in discontinued operations as follows: $2.3 million in the fiscal quarter ended March 23, 2012 As Reported.
(4) Amounts include income tax expense included in discontinued operations as follows: $0.2 million in the fiscal quarter ended March 23, 2012 As Reported.
(5) Amounts include depreciation expense included in discontinued operations as follows: $0.5 million in the fiscal quarter ended March 23, 2012 As Reported.
(6) Severance costs recognized in connection with the retirement of John L. Williams as Chief Operating Officer.

 

9


     Guidance  
     Pre-Renovation 2013     2013  
     Low End     High End     Low End     High End  

Net income (1)

   $ 33,358      $ 40,358      $ 25,358      $ 33,358   

Interest expense

     59,000        58,400        59,000        58,400   

Income tax expense (benefit)

     1,600        4,200        (2,400     1,200   

Real estate related depreciation and amortization

     107,000        106,000        107,000        106,000   
  

 

 

   

 

 

   

 

 

   

 

 

 

EBITDA

     200,958        208,958        188,958        198,958   

Non-cash ground rent

     6,400        6,400        6,400        6,400   

Non-cash amortization of favorable and unfavorable contracts, net

     (1,400     (1,400     (1,400     (1,400

Key money write-off

     (860     (860     (860     (860

Reversal of previously recognized Allerton income

     (1,163     (1,163     (1,163     (1,163

Severence costs (2)

     3,065        3,065        3,065        3,065   
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA

   $ 207,000      $ 215,000      $ 195,000      $ 205,000   
  

 

 

   

 

 

   

 

 

   

 

 

 

 

(1) Net income includes approximately $6.1 million of interest income related to the Allerton loan.
(2) Severance costs recognized in connection with the retirement of John L. Williams as Chief Operating Officer.

The following tables are reconciliations of our U.S. GAAP net income (loss) to FFO and Adjusted FFO (in thousands):

 

     Fiscal Quarter Ended  
     March 31, 2013     March 23, 2012
Pro Forma (1)
    March 23, 2012
As Reported (2)
 

Net (loss)

   $ (4,126   $ 8,901      $ 2,615   

Real estate related depreciation and amortization (3)

     26,834        24,464        20,518   

Gain on sale of hotel properties

     —          (10,017     (10,017
  

 

 

   

 

 

   

 

 

 

FFO

     22,708        23,348        13,116   

Non-cash ground rent

     1,693        1,575        1,531   

Non-cash amortization of unfavorable contract liabilities

     (354     (317     (432

Gain on early extinguishment of debt

     —          (144     (144

Acquisition costs

     9        33        33   

Reversal of previously recognized Allerton income

     (291     —          —     

Allerton loan legal fees

     —          322        322   

Franchise termination fee

     —          750        750   

Severance costs (4)

     3,065        —          —     

Fair value adjustments to debt instruments

     (65     (47     (47
  

 

 

   

 

 

   

 

 

 

Adjusted FFO

   $ 26,765      $ 25,520      $ 15,129   
  

 

 

   

 

 

   

 

 

 

Adjusted FFO per share

   $ 0.14      $ 0.15      $ 0.09   
  

 

 

   

 

 

   

 

 

 

 

(1) Pro forma to (a) include the operating results of the Company’s Marriott-managed hotels from January 1, 2012 to March 23, 2012 and all other hotels from January 1, 2012 to March 31, 2012, (b) assume all of the Company’s 27 hotels were owned as of January 1, 2012, and (c) exclude the operating results of the hotels sold during 2012.
(2) As reported in the Company’s Quarterly Report on Form 10-Q filed with the SEC on April 30, 2012.
(3) Amounts include depreciation expense included in discontinued operations as follows: $0.5 million in the fiscal quarter ended March 23, 2012 As Reported.
(4) Severance costs recognized in connection with the retirement of John L. Williams as Chief Operating Officer.

 

10


     Guidance  
     Pre-Renovation 2013     2013  
     Low End     High End     Low End     High End  

Net income (1)

   $ 33,358      $ 40,358      $ 25,358      $ 33,358   

Real estate related depreciation and amortization

     107,000        106,000        107,000        106,000   
  

 

 

   

 

 

   

 

 

   

 

 

 

FFO

     140,358        146,358        132,358        139,358   

Non-cash ground rent

     6,400        6,400        6,400        6,400   

Non-cash amortization of favorable and unfavorable contracts, net

     (1,400     (1,400     (1,400     (1,400

Key money write-off

     (860     (860     (860     (860

Reveral of previously recognized Allerton income

     (1,163     (1,163     (1,163     (1,163

Severence costs (2)

     3,065        3,065        3,065        3,065   

Debt premium amortization

     (400     (400     (400     (400
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted FFO

   $ 146,000      $ 152,000      $ 138,000      $ 145,000   
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted FFO per share

   $ 0.75      $ 0.78      $ 0.70      $ 0.74   
  

 

 

   

 

 

   

 

 

   

 

 

 

 

(1) Net income includes approximately $6.1 million of interest income related to the Allerton loan.
(2) Severance costs recognized in connection with the retirement of John L. Williams as Chief Operating Officer.

Use and Limitations of Non-GAAP Financial Measures

Our management and Board of Directors use EBITDA, Adjusted EBITDA, FFO and Adjusted FFO to evaluate the performance of our hotels and to facilitate comparisons between us and other lodging REITs, hotel owners who are not REITs and other capital intensive companies. The use of these non-GAAP financial measures has certain limitations. These non-GAAP financial measures as presented by us, may not be comparable to non-GAAP financial measures as calculated by other real estate companies. These measures do not reflect certain expenses or expenditures that we incurred and will incur, such as depreciation, interest and capital expenditures. We compensate for these limitations by separately considering the impact of these excluded items to the extent they are material to operating decisions or assessments of our operating performance. Our reconciliations to the most comparable GAAP financial measures, and our consolidated statements of operations and cash flows, include interest expense, capital expenditures, and other excluded items, all of which should be considered when evaluating our performance, as well as the usefulness of our non-GAAP financial measures.

These non-GAAP financial measures are used in addition to and in conjunction with results presented in accordance with GAAP. They should not be considered as alternatives to operating profit, cash flow from operations, or any other operating performance measure prescribed by GAAP. These non-GAAP financial measures reflect additional ways of viewing our operations that we believe, when viewed with our GAAP results and the reconciliations to the corresponding GAAP financial measures, provide a more complete understanding of factors and trends affecting our business than could be obtained absent this disclosure. We strongly encourage investors to review our financial information in its entirety and not to rely on a single financial measure.

Certain Definitions

In this release, when we discuss “Hotel Adjusted EBITDA,” we exclude from Hotel EBITDA the non-cash expense incurred by the hotels due to the straight lining of the rent from our ground lease obligations, the non-cash amortization of our favorable lease assets, the non-cash amortization of the unfavorable contract liabilities recorded in conjunction with the acquisitions of the Bethesda Marriott Suites, the Chicago Marriott Downtown, the Renaissance Charleston and the Lexington Hotel New York. Hotel EBITDA represents hotel net income 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. Net debt is calculated as total debt outstanding less unrestricted cash.

 

11


DIAMONDROCK HOSPITALITY COMPANY

PRO FORMA HOTEL OPERATING DATA

Schedule of Property Level Results

(in thousands)

(unaudited)

 

     Fiscal Quarter Ended        
     March 31,
2013
    March 23,
2012
    %
Change
 

Revenues:

      

Rooms

   $ 124,286      $ 117,603        5.7

Food and beverage

     45,277        39,901        13.5

Other

     11,740        9,522        23.3
  

 

 

   

 

 

   

 

 

 

Total revenues

     181,303        167,026        8.5

Operating Expenses:

      

Rooms departmental expenses

     36,343        32,802        10.8

Food and beverage departmental expenses

     33,805        30,039        12.5

Other direct departmental

     5,661        5,005        13.1

General and administrative

     15,728        14,623        7.6

Utilities

     7,108        6,996        1.6

Repairs and maintenance

     9,145        8,444        8.3

Sales and marketing

     15,702        15,399        2.0

Base management fees

     4,412        4,127        6.9

Incentive management fees

     468        60        680.0

Property taxes

     9,805        9,271        5.8

Ground rent

     3,770        3,487        8.1

Other fixed expenses

     2,649        2,346        12.9
  

 

 

   

 

 

   

 

 

 

Total hotel operating expenses

     144,596        132,599        9.0

Hotel EBITDA

     36,707        34,427        6.6

Non-cash ground rent

     1,693        1,575        7.5

Non-cash amortization of favorable and unfavorable contracts, net

     (354     (317     11.7
  

 

 

   

 

 

   

 

 

 

Hotel Adjusted EBITDA

   $ 38,046      $ 35,685        6.6
  

 

 

   

 

 

   

 

 

 

NOTE:

The pro forma operating data above includes the operating results for the Company’s portfolio of 27 hotels owned as of March 31, 2013 assuming they were owned since January 1, 2012. The fiscal quarter ended March 23, 2012 includes the operating results of the Company’s Marriott-managed hotels from January 1, 2012 to March 23, 2012 and all other hotels from January 1, 2012 to March 31, 2012.

 

12


Market Capitalization as of March 31, 2013

(in thousands, except per share data)

 

Enterprise Value

      

Common equity capitalization (at March 31, 2013 closing price of $9.31/share)

   $ 1,825,505   

Consolidated debt

     1,077,661   

Cash and cash equivalents

     (77,375
  

 

 

 

Total enterprise value

   $ 2,825,791   
  

 

 

 

Share Reconciliation

      

Common shares outstanding

     195,420   

Unvested restricted stock held by management and employees

     606   

Share grants under deferred compensation plan held by directors

     54   
  

 

 

 

Combined shares outstanding

     196,080   
  

 

 

 

Debt Summary as of March 31, 2013

(dollars in thousands)

 

Property    Interest
Rate
    Term    Outstanding
Principal
     Maturity

Courtyard Manhattan / Midtown East

     8.810   Fixed    $ 41,836       October 2014

Salt Lake City Marriott Downtown

     5.500   Fixed      28,227       January 2015

Courtyard Manhattan / Fifth Avenue

     6.480   Fixed      50,020       June 2016

Los Angeles Airport Marriott

     5.300   Fixed      82,600       July 2015

Frenchman’s Reef Marriott

     5.440   Fixed      58,429       August 2015

Renaissance Worthington

     5.400   Fixed      54,471       July 2015

Orlando Airport Marriott

     5.680   Fixed      57,375       January 2016

Chicago Marriott Downtown

     5.975   Fixed      210,686       April 2016

Hilton Minneapolis

     5.464   Fixed      96,544       May 2021

JW Marriott Denver Cherry Creek

     6.470   Fixed      40,588       July 2015

Lexington Hotel New York

    

 

LIBOR +

3.00   

  

  

  Variable      170,368       March 2015

Westin Washington D.C. City Center

     3.990   Fixed      73,703       January 2023

The Lodge at Sonoma

     3.960   Fixed      31,000       April 2023

Westin San Diego

     3.940   Fixed      71,000       April 2023

Debt premium (1)

          814      
       

 

 

    

Total mortgage debt

          1,067,661      
       

 

 

    

Senior unsecured credit facility

    

 

LIBOR +

1.90   

 

  

  Variable      10,000       January 2017
       

 

 

    

Total debt

      $ 1,077,661      
       

 

 

    

 

(1) Non-cash GAAP adjustment recorded upon the assumption of the JW Marriott Denver at Cherry Creek mortgage debt in 2011.

 

13


Pro Forma Operating Statistics – First Quarter (1)

 

     ADR     Occupancy     RevPAR     Hotel Adjusted EBITDA Margin  
     1Q 2013      1Q 2012      B/(W)     1Q 2013     1Q 2012     B/(W)     1Q 2013      1Q 2012     B/(W)     1Q 2013     1Q 2012     B/(W)  

Atlanta Alpharetta

   $ 146.57       $ 144.64         1.3     73.0     67.2     5.8   $ 106.94       $ 97.23        10.0     35.25     36.00     -75 bps   

Bethesda Marriott Suites

   $ 177.66       $ 176.34         0.7     48.7     51.8     (3.1 %)    $ 86.58       $ 91.33        (5.2 %)      19.07     20.67     -160 bps   

Boston Westin

   $ 173.64       $ 179.89         (3.5 %)      63.6     59.9     3.7   $ 110.40       $ 107.67        2.5     6.35     5.44     91 bps   

Hilton Boston Downtown

   $ 168.98       $ 168.66         0.2     73.2     68.4     4.8   $ 123.61       $ 115.40        7.1     17.18     20.45     -327 bps   

Hilton Burlington

   $ 122.20       $ 119.30         2.4     62.2     59.8     2.4   $ 76.01       $ 71.36        6.5     23.04     14.55     849 bps   

Renaissance Charleston

   $ 183.37       $ 169.41         8.2     81.0     80.1     0.9   $ 148.55       $ 135.77        9.4     32.63     29.51     312 bps   

Hilton Garden Inn Chelsea

   $ 179.34       $ 163.27         9.8     96.1     91.2     4.9   $ 172.38       $ 148.83        15.8     33.28     29.30     398 bps   

Chicago Marriott

   $ 161.90       $ 155.86         3.9     62.7     55.8     6.9   $ 101.53       $ 86.99        16.7     8.74     (2.52 %)      1126 bps   

Chicago Conrad

   $ 165.03       $ 162.54         1.5     71.4     65.1     6.3   $ 117.80       $ 105.80        11.3     (0.17 %)      (1.88 %)      171 bps   

Courtyard Denver Downtown

   $ 152.88       $ 146.30         4.5     79.7     81.7     (2.0 %)    $ 121.80       $ 119.57        1.9     37.93     40.82     -289 bps   

Courtyard Fifth Avenue

   $ 233.46       $ 217.61         7.3     64.4     84.1     (19.7 %)    $ 150.38       $ 182.95        (17.8 %)      (2.60 %)      11.08     -1368 bps   

Courtyard Midtown East

   $ 223.41       $ 209.34         6.7     74.2     79.0     (4.8 %)    $ 165.72       $ 165.45        0.2     10.81     16.28     -547 bps   

Frenchman’s Reef

   $ 310.60       $ 289.27         7.4     90.5     85.2     5.3   $ 280.98       $ 246.37        14.0     32.38     32.80     -42 bps   

JW Marriott Denver Cherry Creek

   $ 225.41       $ 214.53         5.1     76.1     69.0     7.1   $ 171.59       $ 148.02        15.9     25.46     23.03     243 bps   

Los Angeles Airport

   $ 114.01       $ 108.18         5.4     82.0     89.7     (7.7 %)    $ 93.50       $ 97.06        (3.7 %)      17.86     20.12     -226 bps   

Hilton Minneapolis

   $ 116.42       $ 120.40         (3.3 %)      61.6     61.7     (0.1 %)    $ 71.77       $ 74.24        (3.3 %)      13.23     11.93     130 bps   

Oak Brook Hills

   $ 111.49       $ 111.40         0.1     43.9     49.7     (5.8 %)    $ 48.96       $ 55.41        (11.6 %)      (13.89 %)      (3.42 %)      -1047 bps   

Orlando Airport Marriott

   $ 110.48       $ 115.69         (4.5 %)      86.9     83.8     3.1   $ 95.96       $ 96.99        (1.1 %)      29.19     32.58     -339 bps   

Hotel Rex

   $ 172.09       $ 174.97         (1.6 %)      77.1     77.7     (0.6 %)    $ 132.61       $ 135.88        (2.4 %)      25.11     32.12     -701 bps   

Salt Lake City Marriott

   $ 147.41       $ 139.18         5.9     67.5     71.2     (3.7 %)    $ 99.57       $ 99.13        0.4     35.30     35.68     -38 bps   

The Lodge at Sonoma

   $ 196.72       $ 182.58         7.7     63.1     52.2     10.9   $ 124.08       $ 95.25        30.3     8.63     (3.10 %)      1173 bps   

Torrance Marriott South Bay

   $ 117.38       $ 110.90         5.8     75.9     80.8     (4.9 %)    $ 89.10       $ 89.61        (0.6 %)      23.08     23.64     -56 bps   

Vail Marriott

   $ 346.39       $ 323.15         7.2     89.3     83.7     5.6   $ 309.29       $ 270.54        14.3     50.06     46.85     321 bps   

Lexington Hotel New York

   $ 162.94       $ 154.04         5.8     58.7     92.1     (33.4 %)    $ 95.66       $ 141.86        (32.6 %)      (12.91 %)      16.24     -2915 bps   

Westin San Diego

   $ 155.20       $ 154.27         0.6     84.6     73.7     10.9   $ 131.34       $ 113.64        15.6     31.92     31.08     84 bps   

Westin Washington D.C. City Center

   $ 191.02       $ 195.26         (2.2 %)      70.1     63.5     6.6   $ 133.95       $ 124.04        8.0     28.37     32.17     -380 bps   

Renaissance Worthington

   $ 174.11       $ 156.09         11.5     64.7     77.7     (13.0 %)    $ 112.71       $ 121.21        (7.0 %)      31.34     33.22     -188 bps   
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

   $ 169.15       $ 162.67         4.0     70.6     72.0     (1.4 %)    $ 119.40       $ 117.09        2.0     20.98     21.36     -38 bps   
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Excluding NY Renovations (2)

   $ 166.76       $ 160.84         3.7     71.4     70.1     1.3   $ 119.08       $ 112.78        5.6     22.98     22.05     93 bps   
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(1) The pro forma operating data includes the operating results for the Company’s 27 hotels assuming they were owned since January 1, 2012.
(2) Excludes the three hotels in New York City currently under renovation; the Lexington Hotel New York, Courtyard Manhattan Midtown East and Courtyard Fifth Avenue.

 

14


Pro Forma Hotel Adjusted EBITDA Reconciliation

 

     First Quarter 2013 (1)  
                  Plus:      Plus:      Plus:     Equals:  
     Total Revenues      Net Income / (Loss)     Depreciation      Interest Expense      Non-Cash Adjustments
(2)
    Hotel Adjusted EBITDA  

Atlanta Alpharetta

   $ 4,530       $ 1,191      $ 406       $ —         $ —        $ 1,597   

Bethesda Marriott Suites

   $ 3,046       $ (1,483   $ 507       $ —         $ 1,557      $ 581   

Boston Westin

   $ 13,886       $ (1,239   $ 2,119       $ —         $ 2      $ 882   

Hilton Boston Downtown

   $ 4,564       $ (690   $ 1,432       $ —         $ 42      $ 784   

Hilton Burlington

   $ 2,309       $ (332   $ 841       $ —         $ 23      $ 532   

Renaissance Charleston

   $ 2,764       $ 546      $ 388       $ —         $ (32   $ 902   

Hilton Garden Inn Chelsea

   $ 2,734       $ 436      $ 474       $ —         $ —        $ 910   

Chicago Marriott

   $ 17,422       $ (4,504   $ 3,239       $ 3,185       $ (397   $ 1,523   

Chicago Conrad

   $ 4,166       $ (919   $ 912       $ —         $ —        $ (7

Courtyard Denver Downtown

   $ 2,112       $ 541      $ 260       $ —         $ —        $ 801   

Courtyard Fifth Avenue

   $ 2,535       $ (1,279   $ 314       $ 842       $ 57      $ (66

Courtyard Midtown East

   $ 4,764       $ (1,035   $ 577       $ 973       $ —        $ 515   

Frenchman’s Reef

   $ 20,471       $ 4,209      $ 1,600       $ 819       $ —        $ 6,628   

JW Marriott Denver Cherry Creek

   $ 4,843       $ 159      $ 479       $ 595       $ —        $ 1,233   

Los Angeles Airport

   $ 14,140       $ 68      $ 1,348       $ 1,110       $ —        $ 2,526   

Minneapolis Hilton

   $ 9,498       $ (1,871   $ 1,936       $ 1,342       $ (150   $ 1,257   

Oak Brook Hills

   $ 3,478       $ (854   $ 262       $ —         $ 109      $ (483

Orlando Airport Marriott

   $ 6,269       $ 286      $ 725       $ 819       $ —        $ 1,830   

Hotel Rex

   $ 1,334       $ 103      $ 232       $ —         $ —        $ 335   

Salt Lake City Marriott

   $ 6,708       $ 1,236      $ 736       $ 396       $ —        $ 2,368   

The Lodge at Sonoma

   $ 3,836       $ (71   $ 364       $ 38       $ —        $ 331   

Torrance Marriott South Bay

   $ 5,441       $ 674      $ 582       $ —         $ —        $ 1,256   

Vail Marriott

   $ 12,278       $ 5,550      $ 596       $ —         $ —        $ 6,146   

Lexington Hotel New York

   $ 6,676       $ (5,737   $ 3,162       $ 1,680       $ 33      $ (862

Westin San Diego

   $ 7,315       $ 1,213      $ 1,053       $ 23       $ 46      $ 2,335   

Westin Washington D.C. City Center

   $ 6,144       $ (669   $ 1,587       $ 778       $ 47      $ 1,743   

Renaissance Worthington

   $ 8,040       $ 1,068      $ 704       $ 746       $ 2      $ 2,520   
  

 

 

    

 

 

   

 

 

    

 

 

    

 

 

   

 

 

 

Total

   $ 181,303       $ (3,403   $ 26,835       $ 13,346       $ 1,339      $ 38,046   
  

 

 

    

 

 

   

 

 

    

 

 

    

 

 

   

 

 

 

Total Excluding NY Renovations (3)

   $ 167,328       $ 4,648      $ 22,782       $ 9,851       $ 1,249      $ 38,459   
  

 

 

    

 

 

   

 

 

    

 

 

    

 

 

   

 

 

 

 

(1) The pro forma operating data includes the operating results for the Company’s 27 hotels assuming they were owned since January 1, 2012.
(2) The non-cash adjustments include expenses incurred by the hotels due to the straight lining of the rent from ground lease obligations, the non-cash amortization of favorable lease assets, and the non-cash amortization of unfavorable contract liabilities.
(3) Excludes the three hotels in New York City currently under renovation; the Lexington Hotel New York, Courtyard Manhattan Midtown East and Courtyard Fifth Avenue.

 

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Pro Forma Hotel Adjusted EBITDA Reconciliation

 

     First Quarter 2012 (1)  
                  Plus:      Plus:      Plus:     Equals:  
     Total Revenues      Net Income /(Loss)     Depreciation      Interest Expense      Non-Cash Adjustments
(2)
    Hotel Adjusted EBITDA  

Atlanta Alpharetta

   $ 3,847       $ 1,092      $ 293       $ —         $ —        $ 1,385   

Bethesda Marriott Suites

   $ 2,946       $ (1,310   $ 479       $ —         $ 1,440      $ 609   

Boston Westin

   $ 13,330       $ (1,515   $ 2,238       $ —         $ 2      $ 725   

Hilton Boston Downtown

   $ 4,366       $ (458   $ 1,309       $ —         $ 42      $ 893   

Hilton Burlington

   $ 2,151       $ (483   $ 773       $ —         $ 23      $ 313   

Renaissance Charleston

   $ 2,325       $ 368      $ 347       $ —         $ (29   $ 686   

Hilton Garden Inn Chelsea

   $ 2,389       $ 263      $ 437       $ —         $ —        $ 700   

Chicago Marriott

   $ 13,039       $ (5,587   $ 2,652       $ 2,974       $ (367   $ (328

Chicago Conrad

   $ 3,781       $ (837   $ 766       $ —         $ —        $ (71

Courtyard Denver Downtown

   $ 2,092       $ 443      $ 236       $ 175       $ —        $ 854   

Courtyard Fifth Avenue

   $ 2,853       $ (941   $ 425       $ 784       $ 48      $ 316   

Courtyard Midtown East

   $ 4,534       $ (702   $ 546       $ 894       $ —        $ 738   

Frenchman’s Reef

   $ 17,154       $ 3,404      $ 1,440       $ 783       $ —        $ 5,627   

JW Marriott Denver Cherry Creek

   $ 4,225       $ 6      $ 419       $ 548       $ —        $ 973   

Los Angeles Airport

   $ 13,103       $ 266      $ 1,347       $ 1,023       $ —        $ 2,636   

Minneapolis Hilton

   $ 9,269       $ (1,736   $ 1,741       $ 1,262       $ (161   $ 1,106   

Oak Brook Hills

   $ 3,861       $ (992   $ 735       $ —         $ 125      $ (132

Orlando Airport Marriott

   $ 5,608       $ 361      $ 700       $ 766       $ —        $ 1,827   

Hotel Rex

   $ 1,342       $ 225      $ 206       $ —         $ —        $ 431   

Salt Lake City Marriott

   $ 6,175       $ 1,183      $ 635       $ 385       $ —        $ 2,203   

The Lodge at Sonoma

   $ 2,773       $ (423   $ 337       $ —         $ —        $ (86

Torrance Marriott South Bay

   $ 4,983       $ 443      $ 735       $ —         $ —        $ 1,178   

Vail Marriott

   $ 10,819       $ 4,535      $ 534       $ —         $ —        $ 5,069   

Lexington Hotel New York

   $ 9,931       $ (1,147   $ 2,361       $ 363       $ 36      $ 1,613   

Westin San Diego

   $ 6,380       $ 963      $ 973       $ —         $ 47      $ 1,983   

Westin Washington D.C. City Center

   $ 5,760       $ 665      $ 1,142       $ —         $ 46      $ 1,853   

Renaissance Worthington

   $ 7,990       $ 1,290      $ 658       $ 700       $ 6      $ 2,654   
  

 

 

    

 

 

   

 

 

    

 

 

    

 

 

   

 

 

 

Total

   $ 167,026       $ (624   $ 24,464       $  10,657       $ 1,258      $ 35,685   
  

 

 

    

 

 

   

 

 

    

 

 

    

 

 

   

 

 

 

Total Excluding NY Renovations (3)

   $ 149,708       $ 2,166      $ 21,132       $ 8,616       $ 1,174      $ 33,018   
  

 

 

    

 

 

   

 

 

    

 

 

    

 

 

   

 

 

 

 

(1) The pro forma operating data includes the operating results for the Company’s 27 hotels assuming they were owned as of January 1, 2012.
(2) The non-cash adjustments include expenses incurred by the hotels due to the straight lining of the rent from ground lease obligations, the non-cash amortization of our favorable lease assets and the non-cash amortization of our unfavorable contract liabilities.
(3) Excludes the three hotels in New York City currently under renovation; the Lexington Hotel New York, Courtyard Manhattan Midtown East and Courtyard Fifth Avenue.

 

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