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):
November 4, 2014
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 November 4, 2014, DiamondRock Hospitality Company (the “Company”) issued a press release announcing its financial results for the quarter ended September 30, 2014 (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 November 4, 2014. | |
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: November 4, 2014 | By: | /s/ William J. Tennis | ||||
William J. Tennis | ||||||
Executive Vice President, General Counsel and Corporate Secretary | ||||||
COMPANY CONTACT
Sean Mahoney
(240) 744-1150
FOR IMMEDIATE RELEASE
Tuesday, November 4, 2014
DIAMONDROCK HOSPITALITY COMPANY REPORTS THIRD QUARTER 2014 RESULTS AND RAISES FULL YEAR GUIDANCE
Pro Forma RevPAR Increased 18.6% and Hotel Adjusted EBITDA Increased 39.1%
BETHESDA, Maryland, Tuesday, November 4, 2014 – 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 September 30, 2014.
Operating Highlights
• | Pro Forma RevPAR: Pro Forma RevPAR was $170.88, an increase of 18.6% from the comparable period of 2013. |
• | Pro Forma Hotel Adjusted EBITDA Margin: Pro Forma Hotel Adjusted EBITDA margin was 31.39%, an increase of 531 basis points from the comparable period of 2013. |
• | Pro Forma Hotel Adjusted EBITDA: Pro Forma Hotel Adjusted EBITDA was $71.7 million, an increase of 39.1% from the comparable period of 2013. |
• | Adjusted EBITDA: Adjusted EBITDA was $66.8 million, an increase of 31.0% from the comparable period of 2013. |
• | Adjusted FFO: Adjusted FFO was $48.3 million and Adjusted FFO per diluted share was $0.25. |
• | Hilton Garden Inn Times Square Central Acquisition: The Company acquired the 282-room Hilton Garden Inn Times Square Central in New York for $127.2 million during the third quarter. The hotel opened on September 1, 2014. |
• | Inn at Key West Acquisition: The Company acquired the Inn at Key West, a 106-room boutique hotel, for $47.5 million. |
• | Courtyard Midtown East Refinancing: The Company refinanced the Courtyard Manhattan/Midtown East during the third quarter. The new $86.0 million mortgage has a ten-year term and bears interest at a fixed rate of 4.40%. |
• | Dividends: The Company declared a quarterly dividend of $0.1025 per share during the third quarter. |
Recent Developments
• | Lexington Hotel Loan: The Company amended its existing $170.4 million mortgage loan secured by the Lexington Hotel New York City in early October. The amendment reduced the interest rate and extended the term of the loan. |
Mark W. Brugger, President and Chief Executive Officer of DiamondRock Hospitality Company, stated, “The third quarter was the highest growth quarter in the 10-year history of the Company. We continue to reap the benefits of our urban and resort focus and the payoff from our value-add strategies implemented over the past few years, as well as benefiting from strong lodging fundamentals. Moreover, our industry-leading profit margin expansion is a testament to our asset management initiatives to increase market share and tightly control expenses. The outperformance of our portfolio enables us to raise our full year guidance for the second time this year. We also expect our future results to benefit from the recent acquisitions of the Hilton Garden Inn Times Square Central and the Inn at Key West.”
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.” Discussions of “Pro Forma” exclude the Oak Brook Hills Resort sold in April 2014 and the Hilton Garden Inn Times Square Central, which opened on September 1, 2014, and include the results of operations of the Inn at Key West under previous ownership.
For the quarter ended September 30, 2014, the Company reported the following:
Third Quarter | ||||||||||
2014 | 2013 | Change | ||||||||
Pro Forma ADR | $201.90 | $182.34 | 10.7 | % | ||||||
Pro Forma Occupancy | 84.6 | % | 79.0 | % | 5.6 percentage points | |||||
Pro Forma RevPAR | $170.88 | $144.07 | 18.6 | % | ||||||
Pro Forma Hotel Adjusted EBITDA Margin | 31.39 | % | 26.08 | % | 531 basis points | |||||
Adjusted EBITDA | $66.8 million | $51.0 million | $15.8 million | |||||||
Adjusted FFO | $48.3 million | $35.9 million | $12.4 million | |||||||
Adjusted FFO per diluted share | $0.25 | $0.18 | $0.07 | |||||||
The Lexington Hotel New York City achieved outstanding results in the third quarter, benefiting from its renovation and branding to Marriott's Autograph Collection. Excluding the hotel, which was under renovation during the comparable period of 2013, the Company's Pro Forma RevPAR increased 13.5% from 2013 and Pro Forma Hotel Adjusted EBITDA margin increased 353 basis points from 2013.
For the nine months ended September 30, 2014, the Company reported the following:
Year To Date | ||||||||||
2014 | 2013 | Change | ||||||||
Pro Forma ADR | $195.90 | $182.34 | 7.4 | % | ||||||
Pro Forma Occupancy | 80.9 | % | 76.7 | % | 4.2 percentage points | |||||
Pro Forma RevPAR | $158.43 | $139.93 | 13.2 | % | ||||||
Pro Forma Hotel Adjusted EBITDA Margin | 29.43 | % | 26.42 | % | 301 basis points | |||||
Adjusted EBITDA | $175.0 million | $147.6 million | $27.4 million | |||||||
Adjusted FFO | $129.7 million | $105.8 million | $23.9 million | |||||||
Adjusted FFO per diluted share | $0.66 | $0.54 | $0.12 | |||||||
Hilton Garden Inn Times Square Central Acquisition
On August 29, 2014, the Company acquired the fee-simple condominium interest in the 282-room Hilton Garden Inn Times Square Central for $127.2 million, or $451,000 per key. The hotel opened on September 1, 2014 and is operated by Highgate Hotels, the largest operator of hotels in New York City. The purchase price represents less
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than 12 times the hotel's projected 2015 EBITDA.
Inn at Key West Acquisition
The Company acquired the fee simple interest in the Inn at Key West, a 106-room boutique hotel located in Key West, Florida for $47.5 million, or $448,000 per key. The purchase price represents a 12.1 multiple on forecasted 2014 Hotel Adjusted EBITDA and a 7.6% capitalization rate of the forecasted 2014 net operating income.
Courtyard Manhattan/Midtown East Refinancing
In July 2014, the Company entered into a new 10-year $86 million mortgage loan secured by the Courtyard Manhattan/Midtown East. The loan bears interest at a fixed rate of 4.4% and is interest-only for the first two years, after which principal will amortize over 30 years. The new loan provided more than 100 percent of the proceeds and half the interest rate of the prior loan, as a result of the hotel's strong operating performance and more favorable debt market conditions.
Lexington Hotel New York City Refinancing
In October 2014, the Company amended its existing $170.4 million mortgage loan secured by the Lexington Hotel New York City. The amended loan bears interest at an initial floating rate of LIBOR plus 275 basis points, and features a pricing grid that will further reduce the spread to as low as 175 basis points upon achieving certain hotel cash flow hurdles. The reduced borrowing costs are expected to save the Company between $1.5 million and $2.0 million in annual interest expense. The amended loan extends the term of the loan by 30 months.
Capital Expenditures
The Company continues to expect to spend approximately $95 million on capital improvements at its hotels in 2014, of which approximately $45 million relates to the completion of the $140 million capital improvement program and approximately $50 million relates to new 2014 capital projects.
The Company has spent approximately $56.1 million on capital improvements during the nine months ended September 30, 2014. The majority of the capital improvements related to the substantial completion of the comprehensive renovations of the Westin Washington D.C. City Center, Westin San Diego, Hilton Boston and Hilton Burlington, as well as the guest room renovation at the Hilton Minneapolis.
Balance Sheet
As of September 30, 2014, the Company had $119.1 million of unrestricted cash on hand and approximately $1.1 billion of total debt, which consists of property-specific mortgage debt. The Company has no outstanding borrowings on its $200 million senior unsecured credit facility.
Dividends
The Company’s Board of Directors declared a quarterly dividend of $0.1025 per share to stockholders of record as of September 30, 2014. The dividend was paid on October 10, 2014.
Outlook and Guidance
The Company has provided annual guidance for 2014, 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. Pro Forma RevPAR growth excludes the Hilton Garden Inn Times Square Central, which is expected to increase the Company's RevPAR growth by approximately 75 basis points.
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The Company is increasing its full year 2014 guidance to incorporate its third quarter outperformance and the acquisition of the Inn at Key West. The Company now expects the full year 2014 results to be as follows:
Metric | Previous Guidance | Revised Guidance | ||
Low End | High End | Low End | High End | |
Pro Forma RevPAR Growth | 9.5 percent | 11.5 percent | 11.5 percent | 12.5 percent |
Adjusted EBITDA | $225.5 million | $235.5 million | $232 million | $236 million |
Adjusted FFO | $165 million | $172 million | $172 million | $175 million |
Adjusted FFO per share (based on 196.6 million shares) | $0.84 per share | $0.88 per share | $0.87 per share | $0.89 per share |
The midpoint of the guidance range above implies Hotel Adjusted EBITDA margin growth of over 265 basis points.
Earnings Call
The Company will host a conference call to discuss its third quarter results on Tuesday, November 4, 2014, at 10:00 a.m. Eastern Time (ET). To participate in the live call, investors are invited to dial 866-202-0886 (for domestic callers) or 617-213-8841 (for international callers). The participant passcode is 72798585. 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 thirty days.
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 11,000 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; 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.
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DIAMONDROCK HOSPITALITY COMPANY
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share amounts)
September 30, 2014 | December 31, 2013 | ||||||
(unaudited) | |||||||
ASSETS | |||||||
Property and equipment, net | $ | 2,722,993 | $ | 2,567,533 | |||
Deferred financing costs, net | 8,622 | 7,702 | |||||
Restricted cash | 98,394 | 89,106 | |||||
Due from hotel managers | 89,693 | 69,353 | |||||
Note receivable | — | 50,084 | |||||
Favorable lease assets, net | 34,425 | 39,936 | |||||
Prepaid and other assets (1) | 52,480 | 79,474 | |||||
Cash and cash equivalents | 119,069 | 144,584 | |||||
Total assets | $ | 3,125,676 | $ | 3,047,772 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Liabilities: | |||||||
Mortgage debt | $ | 1,125,309 | $ | 1,091,861 | |||
Senior unsecured credit facility | — | — | |||||
Total debt | 1,125,309 | 1,091,861 | |||||
Deferred income related to key money, net | 22,889 | 23,707 | |||||
Unfavorable contract liabilities, net | 76,689 | 78,093 | |||||
Due to hotel managers | 57,340 | 54,225 | |||||
Dividends declared and unpaid | 20,452 | 16,981 | |||||
Accounts payable and accrued expenses (2) | 100,799 | 102,214 | |||||
Total other liabilities | 278,169 | 275,220 | |||||
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; 195,698,858 and 195,470,791 shares issued and outstanding at September 30, 2014 and December 31, 2013, respectively | 1,957 | 1,955 | |||||
Additional paid-in capital | 1,981,980 | 1,979,613 | |||||
Accumulated deficit | (261,739 | ) | (300,877 | ) | |||
Total stockholders’ equity | 1,722,198 | 1,680,691 | |||||
Total liabilities and stockholders’ equity | $ | 3,125,676 | $ | 3,047,772 | |||
(1) | Includes $39.4 million of deferred tax assets, $7.2 million of prepaid expenses and $5.9 million of other assets as of September 30, 2014. |
(2) | Includes $63.3 million of deferred ground rent, $11.9 million of deferred tax liabilities, $8.8 million of accrued property taxes, $3.3 million of accrued capital expenditures and $13.5 million of other accrued liabilities as of September 30, 2014. |
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DIAMONDROCK HOSPITALITY COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(unaudited)
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||
Revenues: | |||||||||||||||
Rooms | $ | 171,047 | $ | 145,447 | $ | 465,871 | $ | 415,887 | |||||||
Food and beverage | 45,504 | 46,214 | 146,297 | 145,804 | |||||||||||
Other | 12,666 | 12,684 | 37,067 | 36,530 | |||||||||||
Total revenues | 229,217 | 204,345 | 649,235 | 598,221 | |||||||||||
Operating Expenses: | |||||||||||||||
Rooms | 42,534 | 39,250 | 121,783 | 112,467 | |||||||||||
Food and beverage | 32,662 | 33,443 | 101,855 | 103,259 | |||||||||||
Management fees | 8,330 | 7,007 | 22,083 | 18,925 | |||||||||||
Other hotel expenses | 75,180 | 73,082 | 220,335 | 213,282 | |||||||||||
Depreciation and amortization | 25,327 | 25,663 | 75,576 | 78,521 | |||||||||||
Hotel acquisition costs | 1,198 | 23 | 1,279 | 46 | |||||||||||
Corporate expenses | 6,368 | 4,932 | 15,878 | 18,055 | |||||||||||
Gain on insurance proceeds | (554 | ) | — | (1,825 | ) | — | |||||||||
Gain on litigation settlement, net | — | — | (10,999 | ) | — | ||||||||||
Total operating expenses | 191,045 | 183,400 | 545,965 | 544,555 | |||||||||||
Operating profit | 38,172 | 20,945 | 103,270 | 53,666 | |||||||||||
Other Expenses (Income): | |||||||||||||||
Interest income | (156 | ) | (1,659 | ) | (2,766 | ) | (4,603 | ) | |||||||
Interest expense | 14,691 | 14,471 | 43,816 | 42,511 | |||||||||||
Other income, net | (50 | ) | — | (50 | ) | — | |||||||||
Loss (Gain) on sale of hotel property | 40 | — | (1,251 | ) | — | ||||||||||
Gain on hotel property acquisition | (23,894 | ) | — | (23,894 | ) | — | |||||||||
Gain on prepayment of note receivable | — | — | (13,550 | ) | — | ||||||||||
Total other (income) expenses, net | (9,369 | ) | 12,812 | 2,305 | 37,908 | ||||||||||
Income from continuing operations before income taxes | 47,541 | 8,133 | 100,965 | 15,758 | |||||||||||
Income tax (expense) benefit | (3,733 | ) | (454 | ) | (1,203 | ) | 1,241 | ||||||||
Income from continuing operations | 43,808 | 7,679 | 99,762 | 16,999 | |||||||||||
Income from discontinued operations, net of taxes | — | 885 | — | 2,510 | |||||||||||
Net income | $ | 43,808 | $ | 8,564 | $ | 99,762 | $ | 19,509 | |||||||
Basic and diluted earnings per share: | |||||||||||||||
Continuing operations | $ | 0.22 | $ | 0.04 | $ | 0.51 | $ | 0.09 | |||||||
Discontinued operations | — | 0.00 | — | 0.01 | |||||||||||
Basic and diluted earnings per share | $ | 0.22 | $ | 0.04 | $ | 0.51 | $ | 0.10 | |||||||
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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 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 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, 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 or Losses from Early Extinguishment of Debt: We exclude the effect of gains or losses 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: We exclude the gain from the prepayment of the loan in 2014. Prior to the prepayment, cash payments received during 2010 and 2011 that were included in Adjusted EBITDA and Adjusted FFO and reduced the carrying basis of the loan were deducted from Adjusted EBITDA and Adjusted FFO, calculated based on a straight-line basis over the anticipated term of the loan. |
• | Other Non-Cash and /or Unusual Items: From time to time we incur costs or realize gains that we do not believe reflect the underlying performance of the Company. Such items include, but are not limited to, pre-opening costs, contract termination fees, severance costs, and gains from legal settlements, bargain purchase gains, and insurance proceeds. |
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In addition, to derive Adjusted EBITDA we exclude gains or losses on dispositions and impairment losses because we believe that including them in EBITDA does not reflect the ongoing performance of our hotels. Additionally, the gains or losses 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 tables are reconciliations of our U.S. GAAP net income to EBITDA and Adjusted EBITDA (in thousands):
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||
Net income | $ | 43,808 | $ | 8,564 | $ | 99,762 | $ | 19,509 | |||||||
Interest expense | 14,691 | 14,471 | 43,816 | 42,511 | |||||||||||
Income tax expense (benefit) (1) | 3,733 | 593 | 1,203 | (944 | ) | ||||||||||
Real estate related depreciation and amortization (2) | 25,327 | 26,254 | 75,576 | 80,280 | |||||||||||
EBITDA | 87,559 | 49,882 | 220,357 | 141,356 | |||||||||||
Non-cash ground rent | 1,588 | 1,700 | 4,880 | 5,111 | |||||||||||
Non-cash amortization of favorable and unfavorable contract liabilities, net | (353 | ) | (354 | ) | (1,058 | ) | (1,063 | ) | |||||||
Loss (Gain) on sale of hotel property | 40 | — | (1,251 | ) | — | ||||||||||
Gain on hotel property acquisition | (23,894 | ) | — | (23,894 | ) | — | |||||||||
Loss on early extinguishment of debt | 61 | — | 61 | — | |||||||||||
Gain on insurance proceeds | (554 | ) | — | (1,825 | ) | — | |||||||||
Gain on litigation settlement (3) | — | — | (10,999 | ) | — | ||||||||||
Gain on prepayment of note receivable | — | — | (13,550 | ) | — | ||||||||||
Reversal of previously recognized Allerton income | — | (291 | ) | (453 | ) | (872 | ) | ||||||||
Hotel acquisition costs | 1,198 | 23 | 1,279 | 46 | |||||||||||
Pre-opening costs (4) | 381 | — | 667 | — | |||||||||||
Severance costs (5) | 788 | — | 788 | 3,065 | |||||||||||
Adjusted EBITDA | $ | 66,814 | $ | 50,960 | $ | 175,002 | $ | 147,643 | |||||||
(1) | Includes $0.1 million and $0.3 million of income tax expense reported in discontinued operations for the three and nine months ended September 30, 2013, respectively. |
(2) | Includes $0.6 million and $1.8 million of depreciation expense reported in discontinued operations for the three and nine months ended September 30, 2013, respectively. |
(3) | Includes $14.0 million of settlement proceeds, net of a $1.2 million contingency fee paid to our legal counsel and $1.8 million of legal fees and other costs incurred over the course of the legal proceedings for the nine months ended September 30, 2014. The $1.8 million of legal fees and other costs were previously recorded as corporate expenses and the repayment of those costs through the settlement proceeds is recorded as a reduction of corporate expenses. |
(4) | Classified as other hotel expenses on the consolidated statements of operations. |
(5) | Classified as corporate expenses on the consolidated statements of operations. |
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Full Year 2014 Guidance | |||||||
Low End | High End | ||||||
Net income | $ | 117,577 | $ | 119,577 | |||
Interest expense | 58,500 | 58,500 | |||||
Income tax expense | 1,100 | 2,100 | |||||
Real estate related depreciation and amortization | 99,000 | 100,000 | |||||
EBITDA | 276,177 | 280,177 | |||||
Non-cash ground rent | 6,400 | 6,400 | |||||
Non-cash amortization of favorable and unfavorable contracts, net | (1,400 | ) | (1,400 | ) | |||
Gain on sale of hotel property | (1,251 | ) | (1,251 | ) | |||
Gain on hotel property acquisition | (23,894 | ) | (23,894 | ) | |||
Loss on early extinguishment of debt | 61 | 61 | |||||
Severance costs | 788 | 788 | |||||
Gain on insurance proceeds | (1,825 | ) | (1,825 | ) | |||
Gain on litigation settlement | (10,999 | ) | (10,999 | ) | |||
Gain on prepayment of note receivable | (13,550 | ) | (13,550 | ) | |||
Reversal of previously recognized Allerton income | (453 | ) | (453 | ) | |||
Hotel acquisition costs | 1,279 | 1,279 | |||||
Pre-opening costs | 667 | 667 | |||||
Adjusted EBITDA | $ | 232,000 | $ | 236,000 | |||
The following tables are reconciliations of our U.S. GAAP net income to FFO and Adjusted FFO (in thousands):
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||
Net income | $ | 43,808 | $ | 8,564 | $ | 99,762 | $ | 19,509 | |||||||
Real estate related depreciation and amortization (1) | 25,327 | 26,254 | 75,576 | 80,280 | |||||||||||
Loss (Gain) on sale of hotel property | 40 | — | (1,251 | ) | — | ||||||||||
FFO | 69,175 | 34,818 | 174,087 | 99,789 | |||||||||||
Non-cash ground rent | 1,588 | 1,700 | 4,880 | 5,111 | |||||||||||
Non-cash amortization of unfavorable contract liabilities, net | (353 | ) | (354 | ) | (1,058 | ) | (1,063 | ) | |||||||
Gain on hotel property acquisition | (23,894 | ) | — | (23,894 | ) | — | |||||||||
Loss on early extinguishment of debt | 61 | — | 61 | — | |||||||||||
Gain on insurance proceeds | (554 | ) | — | (1,825 | ) | — | |||||||||
Gain on litigation settlement (2) | — | — | (10,999 | ) | — | ||||||||||
Gain on prepayment of note receivable | — | — | (13,550 | ) | — | ||||||||||
Hotel acquisition costs | 1,198 | 23 | 1,279 | 46 | |||||||||||
Pre-opening costs | 381 | — | 667 | — | |||||||||||
Reversal of previously recognized Allerton income | — | (291 | ) | (453 | ) | (872 | ) | ||||||||
Severance costs | 788 | — | 788 | 3,065 | |||||||||||
Fair value adjustments to debt instruments | (90 | ) | (42 | ) | (265 | ) | (233 | ) | |||||||
Adjusted FFO | $ | 48,300 | $ | 35,854 | $ | 129,718 | $ | 105,843 | |||||||
Adjusted FFO per share | $ | 0.25 | $ | 0.18 | $ | 0.66 | $ | 0.54 | |||||||
(1) | Includes $0.6 million and $1.8 million of depreciation expense reported in discontinued operations for the three and nine months ended September 30, 2013, respectively. |
9
(2) | Includes $14.0 million of settlement proceeds, net of a $1.2 million contingency fee paid to our legal counsel and $1.8 million of legal fees and other costs incurred over the course of the legal proceedings for the nine months ended September 30, 2014. The $1.8 million of legal fees and other costs were previously recorded as corporate expenses and the repayment of those costs through the settlement proceeds is recorded as a reduction of corporate expenses. |
Full Year 2014 Guidance | |||||||
Low End | High End | ||||||
Net income | $ | 117,577 | $ | 119,577 | |||
Real estate related depreciation and amortization | 99,000 | 100,000 | |||||
Gain on sale of hotel property | (1,251 | ) | (1,251 | ) | |||
FFO | 215,326 | 218,326 | |||||
Non-cash ground rent | 6,400 | 6,400 | |||||
Non-cash amortization of favorable and unfavorable contracts, net | (1,400 | ) | (1,400 | ) | |||
Gain on insurance proceeds | (1,825 | ) | (1,825 | ) | |||
Gain on hotel property acquisition | (23,894 | ) | (23,894 | ) | |||
Loss on early extinguishment of debt | 61 | 61 | |||||
Severance costs | 788 | 788 | |||||
Gain on litigation settlement | (10,999 | ) | (10,999 | ) | |||
Gain on prepayment of note receivable | (13,550 | ) | (13,550 | ) | |||
Reversal of previously recognized Allerton income | (453 | ) | (453 | ) | |||
Hotel acquisition costs | 1,279 | 1,279 | |||||
Pre-opening costs | 667 | 667 | |||||
Fair value adjustments to debt instruments | (400 | ) | (400 | ) | |||
Adjusted FFO | $ | 172,000 | $ | 175,000 | |||
Adjusted FFO per share | $ | 0.87 | $ | 0.89 | |||
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 and other contracts, and the non-cash amortization of our unfavorable contract liabilities. 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.
10
DIAMONDROCK HOSPITALITY COMPANY
HOTEL OPERATING DATA
Schedule of Property Level Results - Pro Forma (1)
(in thousands)
(unaudited)
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||
2014 | 2013 | % Change | 2014 | 2013 | % Change | ||||||||||||||||
Revenues: | |||||||||||||||||||||
Rooms | $ | 170,067 | $ | 143,212 | 18.8 | % | $ | 467,906 | $ | 412,608 | 13.4 | % | |||||||||
Food and beverage | 45,609 | 42,466 | 7.4 | % | 145,621 | 137,892 | 5.6 | % | |||||||||||||
Other | 12,658 | 11,886 | 6.5 | % | 37,030 | 34,963 | 5.9 | % | |||||||||||||
Total revenues | 228,334 | 197,564 | 15.6 | % | 650,557 | 585,463 | 11.1 | % | |||||||||||||
Operating Expenses: | |||||||||||||||||||||
Rooms departmental expenses | $ | 42,353 | $ | 38,448 | 10.2 | % | $ | 121,469 | $ | 110,465 | 10.0 | % | |||||||||
Food and beverage departmental expenses | 32,728 | 31,135 | 5.1 | % | 101,122 | 97,666 | 3.5 | % | |||||||||||||
Other direct departmental | 4,720 | 5,115 | (7.7 | )% | 14,845 | 15,652 | (5.2 | )% | |||||||||||||
General and administrative | 17,177 | 15,931 | 7.8 | % | 50,223 | 45,993 | 9.2 | % | |||||||||||||
Utilities | 7,226 | 7,600 | (4.9 | )% | 20,978 | 21,411 | (2.0 | )% | |||||||||||||
Repairs and maintenance | 9,204 | 8,898 | 3.4 | % | 27,324 | 26,685 | 2.4 | % | |||||||||||||
Sales and marketing | 15,178 | 13,494 | 12.5 | % | 43,748 | 39,050 | 12.0 | % | |||||||||||||
Franchise fees | 4,264 | 3,275 | 30.2 | % | 11,389 | 9,108 | 25.0 | % | |||||||||||||
Base management fees | 5,649 | 4,745 | 19.1 | % | 16,057 | 14,057 | 14.2 | % | |||||||||||||
Incentive management fees | 2,668 | 2,080 | 28.3 | % | 6,117 | 4,550 | 34.4 | % | |||||||||||||
Property taxes | 10,074 | 10,112 | (0.4 | )% | 29,727 | 30,572 | (2.8 | )% | |||||||||||||
Ground rent | 3,735 | 3,650 | 2.3 | % | 11,183 | 10,916 | 2.4 | % | |||||||||||||
Other fixed expenses | 2,926 | 2,799 | 4.5 | % | 8,618 | 8,386 | 2.8 | % | |||||||||||||
Pre-opening costs | 381 | — | 100.0 | % | 667 | — | 100.0 | % | |||||||||||||
Total hotel operating expenses | $ | 158,283 | $ | 147,282 | 7.5 | % | $ | 463,467 | $ | 434,511 | 6.7 | % | |||||||||
Hotel EBITDA | 70,051 | 50,282 | 39.3 | % | 187,090 | 150,952 | 23.9 | % | |||||||||||||
Non-cash ground rent | 1,588 | 1,592 | (0.3 | )% | 4,757 | 4,787 | (0.6 | )% | |||||||||||||
Non-cash amortization of unfavorable contract liabilities | (353 | ) | (354 | ) | (0.3 | )% | (1,058 | ) | (1,063 | ) | (0.5 | )% | |||||||||
Pre-opening costs (2) | 381 | — | 100.0 | % | 667 | — | 100.0 | % | |||||||||||||
Hotel Adjusted EBITDA | $ | 71,667 | $ | 51,520 | 39.1 | % | $ | 191,456 | $ | 154,676 | 23.8 | % | |||||||||
(1) | Pro forma to exclude sold hotels and the Hilton Garden Inn Times Square Central, as this hotel was newly built in 2014, and include the results of operations of acquired hotels under previous ownership for the periods presented. |
(2) | Classified as other hotel expenses on the consolidated statements of operations. |
11
Market Capitalization as of September 30, 2014 | ||||
(in thousands) | ||||
Enterprise Value | ||||
Common equity capitalization (at September 30, 2014 closing price of $12.68/share) | $ | 2,489,788 | ||
Consolidated debt | 1,125,309 | |||
Cash and cash equivalents | (119,069) | |||
Total enterprise value | $ | 3,496,028 | ||
Share Reconciliation | ||||
Common shares outstanding | 195,699 | |||
Unvested restricted stock held by management and employees | 559 | |||
Share grants under deferred compensation plan held by directors | 98 | |||
Combined shares outstanding | 196,356 | |||
Debt Summary as of September 30, 2014 | ||||||||||
(dollars in thousands) | ||||||||||
Property | Interest Rate | Term | Outstanding Principal | Maturity | ||||||
Courtyard Manhattan / Midtown East | 4.400% | Fixed | $ | 86,000 | August 2024 | |||||
Lexington Hotel New York | LIBOR + 3.00 | Variable | 170,368 | March 1, 2015 (1) | ||||||
Los Angeles Airport Marriott | 5.300% | Fixed | 82,600 | July 2015 | ||||||
Renaissance Worthington | 5.400% | Fixed | 53,102 | July 2015 | ||||||
JW Marriott Denver at Cherry Creek | 6.470% | Fixed | 38,940 | July 2015 | ||||||
Frenchman’s Reef Marriott | 5.440% | Fixed | 56,871 | August 2015 | ||||||
Orlando Airport Marriott | 5.680% | Fixed | 56,145 | January 2016 | ||||||
Chicago Marriott Downtown | 5.975% | Fixed | 206,006 | April 2016 | ||||||
Courtyard Manhattan / Fifth Avenue | 6.480% | Fixed | 49,132 | June 2016 | ||||||
Salt Lake City Marriott Downtown | 4.250% | Fixed | 61,829 | November 2020 | ||||||
Hilton Minneapolis | 5.464% | Fixed | 93,454 | May 2021 | ||||||
Westin Washington D.C. City Center | 3.990% | Fixed | 71,090 | January 2023 | ||||||
The Lodge at Sonoma | 3.960% | Fixed | 30,242 | April 2023 | ||||||
Westin San Diego | 3.940% | Fixed | 69,258 | April 2023 | ||||||
Debt premium (2) | 272 | |||||||||
Total mortgage debt | $ | 1,125,309 | ||||||||
Senior unsecured credit facility | LIBOR + 1.90 | Variable | — | January 2017 (3) | ||||||
Total debt | $ | 1,125,309 | ||||||||
(1) The loan may be extended for two additional one-year terms subject to the satisfaction of certain conditions and the payment of an extension fee.
(2) Non-cash GAAP adjustment recorded upon the assumption of the mortgage loan secured by the JW Marriott Denver Cherry Creek.
(3) The credit facility may be extended for an additional year upon the payment of applicable fees and the satisfaction of certain customary conditions.
12
Operating Statistics – Third Quarter | |||||||||||||||||||||||||||||||
ADR | Occupancy | RevPAR | Hotel Adjusted EBITDA Margin | ||||||||||||||||||||||||||||
3Q 2014 | 3Q 2013 | B/(W) | 3Q 2014 | 3Q 2013 | B/(W) | 3Q 2014 | 3Q 2013 | B/(W) | 3Q 2014 | 3Q 2013 | B/(W) | ||||||||||||||||||||
Atlanta Alpharetta Marriott | $ | 162.47 | $ | 146.73 | 10.7 | % | 72.9 | % | 73.6 | % | (0.7 | )% | $ | 118.52 | $ | 108.01 | 9.7 | % | 35.25 | % | 28.62 | % | 663 bps | ||||||||
Bethesda Marriott Suites | $ | 157.01 | $ | 149.13 | 5.3 | % | 64.9 | % | 57.6 | % | 7.3 | % | $ | 101.85 | $ | 85.83 | 18.7 | % | 18.68 | % | 13.37 | % | 531 bps | ||||||||
Boston Westin | $ | 232.34 | $ | 196.29 | 18.4 | % | 87.2 | % | 83.2 | % | 4.0 | % | $ | 202.52 | $ | 163.22 | 24.1 | % | 31.74 | % | 25.01 | % | 673 bps | ||||||||
Hilton Boston Downtown | $ | 287.81 | $ | 242.44 | 18.7 | % | 95.7 | % | 91.5 | % | 4.2 | % | $ | 275.46 | $ | 221.73 | 24.2 | % | 41.93 | % | 36.90 | % | 503 bps | ||||||||
Hilton Burlington | $ | 209.97 | $ | 187.29 | 12.1 | % | 88.5 | % | 90.1 | % | (1.6 | )% | $ | 185.80 | $ | 168.70 | 10.1 | % | 50.21 | % | 48.08 | % | 213 bps | ||||||||
Renaissance Charleston | $ | 197.16 | $ | 176.17 | 11.9 | % | 90.0 | % | 89.7 | % | 0.3 | % | $ | 177.36 | $ | 157.97 | 12.3 | % | 30.52 | % | 29.81 | % | 71 bps | ||||||||
Hilton Garden Inn Chelsea | $ | 233.09 | $ | 239.38 | (2.6 | )% | 94.7 | % | 95.8 | % | (1.1 | )% | $ | 220.68 | $ | 229.28 | (3.8 | )% | 37.56 | % | 46.26 | % | -870 bps | ||||||||
Chicago Marriott | $ | 217.76 | $ | 209.24 | 4.1 | % | 87.1 | % | 83.9 | % | 3.2 | % | $ | 189.64 | $ | 175.45 | 8.1 | % | 28.81 | % | 27.25 | % | 156 bps | ||||||||
Chicago Conrad | $ | 243.90 | $ | 225.00 | 8.4 | % | 89.4 | % | 87.2 | % | 2.2 | % | $ | 217.94 | $ | 196.28 | 11.0 | % | 44.26 | % | 37.25 | % | 701 bps | ||||||||
Courtyard Denver Downtown | $ | 196.97 | $ | 170.92 | 15.2 | % | 88.1 | % | 88.7 | % | (0.6 | )% | $ | 173.48 | $ | 151.55 | 14.5 | % | 50.03 | % | 47.11 | % | 292 bps | ||||||||
Courtyard Fifth Avenue | $ | 291.18 | $ | 275.20 | 5.8 | % | 93.2 | % | 94.3 | % | (1.1 | )% | $ | 271.29 | $ | 259.56 | 4.5 | % | 30.30 | % | 28.50 | % | 180 bps | ||||||||
Courtyard Midtown East | $ | 299.15 | $ | 277.65 | 7.7 | % | 92.6 | % | 89.0 | % | 3.6 | % | $ | 276.90 | $ | 247.14 | 12.0 | % | 34.88 | % | 35.64 | % | -76 bps | ||||||||
Frenchman's Reef | $ | 182.89 | $ | 186.76 | (2.1 | )% | 79.3 | % | 75.3 | % | 4.0 | % | $ | 145.09 | $ | 140.70 | 3.1 | % | 8.00 | % | 4.85 | % | 315 bps | ||||||||
JW Marriott Denver Cherry Creek | $ | 265.91 | $ | 248.79 | 6.9 | % | 86.4 | % | 84.5 | % | 1.9 | % | $ | 229.72 | $ | 210.14 | 9.3 | % | 35.28 | % | 33.39 | % | 189 bps | ||||||||
Inn at Key West | $ | 167.40 | $ | 162.41 | 3.1 | % | 84.5 | % | 75.4 | % | 9.1 | % | $ | 141.48 | $ | 122.42 | 15.6 | % | 38.87 | % | 40.70 | % | -183 bps | ||||||||
Lexington Hotel New York | $ | 251.18 | $ | 228.06 | 10.1 | % | 97.4 | % | 51.9 | % | 45.5 | % | $ | 244.59 | $ | 118.47 | 106.5 | % | 37.88 | % | (0.22 | )% | 3810 bps | ||||||||
Los Angeles Airport Marriott | $ | 138.58 | $ | 113.31 | 22.3 | % | 91.9 | % | 92.1 | % | (0.2 | )% | $ | 127.31 | $ | 104.33 | 22.0 | % | 24.80 | % | 19.32 | % | 548 bps | ||||||||
Hilton Minneapolis | $ | 162.15 | $ | 152.49 | 6.3 | % | 86.0 | % | 80.5 | % | 5.5 | % | $ | 139.37 | $ | 122.79 | 13.5 | % | 33.63 | % | 30.23 | % | 340 bps | ||||||||
Orlando Airport Marriott | $ | 96.30 | $ | 92.97 | 3.6 | % | 65.6 | % | 63.2 | % | 2.4 | % | $ | 63.18 | $ | 58.79 | 7.5 | % | 5.53 | % | 8.28 | % | -275 bps | ||||||||
Hotel Rex | $ | 250.10 | $ | 210.75 | 18.7 | % | 90.5 | % | 89.2 | % | 1.3 | % | $ | 226.27 | $ | 187.94 | 20.4 | % | 44.64 | % | 36.90 | % | 774 bps | ||||||||
Salt Lake City Marriott | $ | 152.40 | $ | 140.63 | 8.4 | % | 71.9 | % | 66.8 | % | 5.1 | % | $ | 109.52 | $ | 94.00 | 16.5 | % | 33.44 | % | 31.05 | % | 239 bps | ||||||||
The Lodge at Sonoma | $ | 313.77 | $ | 300.32 | 4.5 | % | 90.5 | % | 84.6 | % | 5.9 | % | $ | 283.90 | $ | 254.15 | 11.7 | % | 36.21 | % | 33.85 | % | 236 bps | ||||||||
Hilton Garden Inn Times Square Central | $ | 295.52 | N/A | N/A | 70.9 | % | N/A | N/A | $ | 209.59 | N/A | N/A | 46.64 | % | N/A | N/A | |||||||||||||||
Vail Marriott | $ | 163.79 | $ | 159.09 | 3.0 | % | 75.4 | % | 70.5 | % | 4.9 | % | $ | 123.57 | $ | 112.20 | 10.1 | % | 23.83 | % | 12.37 | % | 1146 bps | ||||||||
Westin San Diego | $ | 175.78 | $ | 155.68 | 12.9 | % | 87.0 | % | 89.5 | % | (2.5 | )% | $ | 152.93 | $ | 139.38 | 9.7 | % | 33.80 | % | 30.86 | % | 294 bps | ||||||||
Westin Washington D.C. City Center | $ | 199.17 | $ | 162.25 | 22.8 | % | 85.3 | % | 77.9 | % | 7.4 | % | $ | 169.90 | $ | 126.35 | 34.5 | % | 33.01 | % | 25.16 | % | 785 bps | ||||||||
Renaissance Worthington | $ | 171.72 | $ | 164.34 | 4.5 | % | 66.8 | % | 64.9 | % | 1.9 | % | $ | 114.63 | $ | 106.70 | 7.4 | % | 26.90 | % | 26.12 | % | 78 bps | ||||||||
Pro Forma Total (1) | $ | 201.90 | $ | 182.34 | 10.7 | % | 84.6 | % | 79.0 | % | 5.6 | % | $ | 170.88 | $ | 144.07 | 18.6 | % | 31.39 | % | 26.08 | % | 531 bps | ||||||||
Pro Forma Total Excluding Lexington (2) | $ | 197.79 | $ | 180.27 | 9.7 | % | 83.7 | % | 80.9 | % | 2.8 | % | $ | 165.58 | $ | 145.87 | 13.5 | % | 30.86 | % | 27.33 | % | 353 bps | ||||||||
(1) Excludes the Hilton Garden Inn Times Square Central, which opened on September 1, 2014. Includes operating results for all other hotels assuming they were owned since January 1, 2013.
(2) Excludes the Lexington Hotel New York under renovation during the third quarter of 2013.
13
Operating Statistics – Year to Date | |||||||||||||||||||||||||||||||
ADR | Occupancy | RevPAR | Hotel Adjusted EBITDA Margin | ||||||||||||||||||||||||||||
YTD 2014 | YTD 2013 | B/(W) | YTD 2014 | YTD 2013 | B/(W) | YTD 2014 | YTD 2013 | B/(W) | YTD 2014 | YTD 2013 | B/(W) | ||||||||||||||||||||
Atlanta Alpharetta Marriott | $ | 164.68 | $ | 148.05 | 11.2 | % | 71.3 | % | 75.5 | % | (4.2 | )% | $ | 117.47 | $ | 111.73 | 5.1 | % | 35.28 | % | 33.88 | % | 140 bps | ||||||||
Bethesda Marriott Suites | $ | 164.29 | $ | 164.37 | — | % | 65.8 | % | 60.2 | % | 5.6 | % | $ | 108.10 | $ | 98.88 | 9.3 | % | 24.35 | % | 22.84 | % | 151 bps | ||||||||
Boston Westin | $ | 225.22 | $ | 199.77 | 12.7 | % | 79.8 | % | 77.9 | % | 1.9 | % | $ | 179.79 | $ | 155.57 | 15.6 | % | 27.92 | % | 24.08 | % | 384 bps | ||||||||
Hilton Boston Downtown | $ | 253.15 | $ | 221.07 | 14.5 | % | 90.9 | % | 83.3 | % | 7.6 | % | $ | 230.04 | $ | 184.25 | 24.9 | % | 36.87 | % | 33.01 | % | 386 bps | ||||||||
Hilton Burlington | $ | 169.51 | $ | 161.32 | 5.1 | % | 77.1 | % | 75.3 | % | 1.8 | % | $ | 130.75 | $ | 121.53 | 7.6 | % | 41.89 | % | 41.21 | % | 68 bps | ||||||||
Renaissance Charleston | $ | 204.47 | $ | 190.07 | 7.6 | % | 91.0 | % | 87.7 | % | 3.3 | % | $ | 186.07 | $ | 166.76 | 11.6 | % | 34.38 | % | 34.36 | % | 2 bps | ||||||||
Hilton Garden Inn Chelsea | $ | 218.42 | $ | 223.23 | (2.2 | )% | 94.5 | % | 96.6 | % | (2.1 | )% | $ | 206.36 | $ | 215.62 | (4.3 | )% | 38.01 | % | 44.19 | % | -618 bps | ||||||||
Chicago Marriott | $ | 206.30 | $ | 205.34 | 0.5 | % | 75.7 | % | 76.6 | % | (0.9 | )% | $ | 156.08 | $ | 157.32 | (0.8 | )% | 23.32 | % | 23.37 | % | -5 bps | ||||||||
Chicago Conrad | $ | 222.81 | $ | 215.81 | 3.2 | % | 83.4 | % | 82.8 | % | 0.6 | % | $ | 185.77 | $ | 178.75 | 3.9 | % | 34.29 | % | 31.38 | % | 291 bps | ||||||||
Courtyard Denver Downtown | $ | 188.15 | $ | 168.83 | 11.4 | % | 84.3 | % | 84.9 | % | (0.6 | )% | $ | 158.70 | $ | 143.40 | 10.7 | % | 48.40 | % | 45.33 | % | 307 bps | ||||||||
Courtyard Fifth Avenue | $ | 271.59 | $ | 266.73 | 1.8 | % | 89.2 | % | 77.3 | % | 11.9 | % | $ | 242.36 | $ | 206.12 | 17.6 | % | 24.33 | % | 18.03 | % | 630 bps | ||||||||
Courtyard Midtown East | $ | 274.68 | $ | 263.70 | 4.2 | % | 90.8 | % | 80.2 | % | 10.6 | % | $ | 249.50 | $ | 211.53 | 18.0 | % | 32.17 | % | 27.49 | % | 468 bps | ||||||||
Frenchman's Reef | $ | 245.64 | $ | 243.33 | 0.9 | % | 86.6 | % | 84.1 | % | 2.5 | % | $ | 212.78 | $ | 204.57 | 4.0 | % | 24.48 | % | 21.22 | % | 326 bps | ||||||||
JW Marriott Denver Cherry Creek | $ | 254.60 | $ | 240.79 | 5.7 | % | 83.3 | % | 81.0 | % | 2.3 | % | $ | 212.11 | $ | 195.05 | 8.7 | % | 32.84 | % | 30.47 | % | 237 bps | ||||||||
Inn at Key West | $ | 209.88 | $ | 190.87 | 10.0 | % | 89.1 | % | 85.3 | % | 3.8 | % | $ | 186.99 | $ | 162.81 | 14.9 | % | 53.94 | % | 52.07 | % | 187 bps | ||||||||
Lexington Hotel New York | $ | 235.04 | $ | 200.80 | 17.1 | % | 90.8 | % | 53.7 | % | 37.1 | % | $ | 213.43 | $ | 107.85 | 97.9 | % | 30.28 | % | (4.76 | )% | 3504 bps | ||||||||
Los Angeles Airport Marriott | $ | 129.68 | $ | 113.56 | 14.2 | % | 91.4 | % | 87.8 | % | 3.6 | % | $ | 118.48 | $ | 99.73 | 18.8 | % | 22.91 | % | 21.21 | % | 170 bps | ||||||||
Hilton Minneapolis | $ | 147.18 | $ | 145.04 | 1.5 | % | 76.3 | % | 75.0 | % | 1.3 | % | $ | 112.26 | $ | 108.79 | 3.2 | % | 26.24 | % | 28.12 | % | -188 bps | ||||||||
Orlando Airport Marriott | $ | 107.50 | $ | 100.94 | 6.5 | % | 78.6 | % | 75.1 | % | 3.5 | % | $ | 84.53 | $ | 75.82 | 11.5 | % | 23.64 | % | 22.76 | % | 88 bps | ||||||||
Hotel Rex | $ | 210.61 | $ | 189.84 | 10.9 | % | 86.0 | % | 84.9 | % | 1.1 | % | $ | 181.07 | $ | 161.11 | 12.4 | % | 35.43 | % | 32.16 | % | 327 bps | ||||||||
Salt Lake City Marriott | $ | 147.13 | $ | 143.26 | 2.7 | % | 69.8 | % | 69.9 | % | (0.1 | )% | $ | 102.68 | $ | 100.20 | 2.5 | % | 32.16 | % | 33.79 | % | -163 bps | ||||||||
The Lodge at Sonoma | $ | 268.86 | $ | 255.28 | 5.3 | % | 78.7 | % | 75.8 | % | 2.9 | % | $ | 211.58 | $ | 193.49 | 9.3 | % | 28.54 | % | 25.71 | % | 283 bps | ||||||||
Hilton Garden Inn Times Square Central | $ | 295.52 | N/A | N/A | 70.9 | % | N/A | N/A | $ | 209.59 | N/A | N/A | 46.64 | % | N/A | N/A | |||||||||||||||
Vail Marriott | $ | 249.56 | $ | 230.31 | 8.4 | % | 70.3 | % | 71.8 | % | (1.5 | )% | $ | 175.39 | $ | 165.44 | 6.0 | % | 35.11 | % | 30.28 | % | 483 bps | ||||||||
Westin San Diego | $ | 167.86 | $ | 154.40 | 8.7 | % | 85.5 | % | 87.2 | % | (1.7 | )% | $ | 143.53 | $ | 134.63 | 6.6 | % | 32.33 | % | 32.40 | % | -7 bps | ||||||||
Westin Washington D.C. City Center | $ | 206.31 | $ | 189.21 | 9.0 | % | 74.5 | % | 78.0 | % | (3.5 | )% | $ | 153.65 | $ | 147.66 | 4.1 | % | 31.21 | % | 32.22 | % | -101 bps | ||||||||
Renaissance Worthington | $ | 176.00 | $ | 171.00 | 2.9 | % | 69.6 | % | 65.1 | % | 4.5 | % | $ | 122.46 | $ | 111.34 | 10.0 | % | 32.76 | % | 30.86 | % | 190 bps | ||||||||
Pro Forma Total (1) | $ | 195.90 | $ | 182.34 | 7.4 | % | 80.9 | % | 76.7 | % | 4.2 | % | $ | 158.43 | $ | 139.93 | 13.2 | % | 29.43 | % | 26.42 | % | 301 bps | ||||||||
Pro Forma Total Excluding NYC Renovations (2) | $ | 187.92 | $ | 177.07 | 6.1 | % | 79.6 | % | 78.3 | % | 1.3 | % | $ | 149.65 | $ | 138.69 | 7.9 | % | 29.37 | % | 27.91 | % | 146 bps | ||||||||
(1) Excludes the Oak Brook Hills Resort sold in April 2014 and the Hilton Garden Inn Times Square Central, which opened on September 1, 2014. Includes operating results for all other hotels assuming they were owned since January 1, 2013.
(2) Excludes the three hotels in New York City under renovation during the nine months ended September 30, 2013; the Lexington Hotel New York, Courtyard Manhattan Midtown East and Courtyard Fifth Avenue.
14
Hotel Adjusted EBITDA Reconciliation | ||||||||||||||||||||
Third Quarter 2014 | ||||||||||||||||||||
Plus: | Plus: | Plus: | Equals: | |||||||||||||||||
Total Revenues | Net Income / (Loss) | Depreciation | Interest Expense | Non-Cash Adjustments (1) | Hotel Adjusted EBITDA | |||||||||||||||
Atlanta Alpharetta Marriott | $ | 4,468 | $ | 1,169 | $ | 406 | $ | — | $ | — | $ | 1,575 | ||||||||
Bethesda Marriott Suites | $ | 3,495 | $ | (1,248 | ) | $ | 360 | $ | — | $ | 1,541 | $ | 653 | |||||||
Boston Westin | $ | 22,176 | $ | 4,842 | $ | 2,186 | $ | — | $ | 10 | $ | 7,038 | ||||||||
Hilton Boston Downtown | $ | 9,853 | $ | 3,008 | $ | 1,081 | $ | — | $ | 42 | $ | 4,131 | ||||||||
Hilton Burlington | $ | 5,475 | $ | 2,290 | $ | 436 | $ | — | $ | 23 | $ | 2,749 | ||||||||
Renaissance Charleston | $ | 3,300 | $ | 633 | $ | 406 | $ | — | $ | (32 | ) | $ | 1,007 | |||||||
Hilton Garden Inn Chelsea | $ | 3,517 | $ | 836 | $ | 485 | $ | — | $ | — | $ | 1,321 | ||||||||
Chicago Marriott | $ | 29,390 | $ | 2,574 | $ | 3,074 | $ | 3,218 | $ | (398 | ) | $ | 8,468 | |||||||
Chicago Conrad | $ | 8,605 | $ | 2,848 | $ | 961 | $ | — | $ | — | $ | 3,809 | ||||||||
Courtyard Denver Downtown | $ | 3,018 | $ | 1,231 | $ | 279 | $ | — | $ | — | $ | 1,510 | ||||||||
Courtyard Fifth Avenue | $ | 4,660 | $ | 64 | $ | 452 | $ | 844 | $ | 52 | $ | 1,412 | ||||||||
Courtyard Midtown East | $ | 8,331 | $ | 1,384 | $ | 686 | $ | 836 | $ | — | $ | 2,906 | ||||||||
Frenchman's Reef | $ | 12,376 | $ | (1,388 | ) | $ | 1,563 | $ | 815 | $ | — | $ | 990 | |||||||
JW Marriott Denver Cherry Creek | $ | 6,293 | $ | 1,131 | $ | 521 | $ | 568 | $ | — | $ | 2,220 | ||||||||
Inn at Key West | $ | 1,564 | $ | 518 | $ | 90 | $ | — | $ | — | $ | 608 | ||||||||
Lexington Hotel New York | $ | 17,219 | $ | 1,470 | $ | 3,274 | $ | 1,748 | $ | 31 | $ | 6,523 | ||||||||
Los Angeles Airport Marriott | $ | 17,808 | $ | 2,317 | $ | 964 | $ | 1,135 | $ | — | $ | 4,416 | ||||||||
Minneapolis Hilton | $ | 14,846 | $ | 1,390 | $ | 2,403 | $ | 1,328 | $ | (129 | ) | $ | 4,992 | |||||||
Orlando Airport Marriott | $ | 4,264 | $ | (1,172 | ) | $ | 588 | $ | 820 | $ | — | $ | 236 | |||||||
Hotel Rex | $ | 2,146 | $ | 818 | $ | 140 | $ | — | $ | — | $ | 958 | ||||||||
Salt Lake City Marriott | $ | 7,157 | $ | 956 | $ | 743 | $ | 694 | $ | — | $ | 2,393 | ||||||||
The Lodge at Sonoma | $ | 7,507 | $ | 2,016 | $ | 390 | $ | 312 | $ | — | $ | 2,718 | ||||||||
Hilton Garden Inn Times Square Central | $ | 1,786 | $ | 574 | $ | 259 | $ | — | $ | — | $ | 833 | ||||||||
Vail Marriott | $ | 6,719 | $ | 1,093 | $ | 508 | $ | — | $ | — | $ | 1,601 | ||||||||
Westin San Diego | $ | 8,144 | $ | 869 | $ | 1,132 | $ | 706 | $ | 46 | $ | 2,753 | ||||||||
Westin Washington D.C. City Center | $ | 7,826 | $ | 479 | $ | 1,292 | $ | 765 | $ | 47 | $ | 2,583 | ||||||||
Renaissance Worthington | $ | 8,177 | $ | 824 | $ | 631 | $ | 743 | $ | 2 | $ | 2,200 | ||||||||
Pro Forma Total (2) | $ | 228,334 | $ | 30,952 | $ | 25,051 | $ | 14,532 | $ | 1,235 | $ | 71,667 | ||||||||
Pro Forma Total Excluding Lexington (3) | $ | 211,115 | $ | 29,482 | $ | 21,777 | $ | 12,784 | $ | 1,204 | $ | 65,144 | ||||||||
(1) 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.
(2) Excludes the Hilton Garden Inn Times Square Central, which opened on September 1, 2014. Includes operating results for all other hotels assuming they were owned since January 1, 2013.
(3) Excludes the Lexington Hotel New York under renovation during the third quarter of 2013.
15
Pro Forma Hotel Adjusted EBITDA Reconciliation | ||||||||||||||||||||
Third Quarter 2013 | ||||||||||||||||||||
Plus: | Plus: | Plus: | Equals: | |||||||||||||||||
Total Revenues | Net Income / (Loss) | Depreciation | Interest Expense | Non-Cash Adjustments (1) | Hotel Adjusted EBITDA | |||||||||||||||
Atlanta Alpharetta Marriott | $ | 4,291 | $ | 823 | $ | 405 | $ | — | $ | — | $ | 1,228 | ||||||||
Bethesda Marriott Suites | $ | 3,014 | $ | (1,530 | ) | $ | 376 | $ | — | $ | 1,557 | $ | 403 | |||||||
Boston Westin | $ | 18,878 | $ | 2,595 | $ | 2,124 | $ | — | $ | 2 | $ | 4,721 | ||||||||
Hilton Boston Downtown | $ | 8,020 | $ | 1,476 | $ | 1,441 | $ | — | $ | 42 | $ | 2,959 | ||||||||
Hilton Burlington | $ | 4,960 | $ | 1,518 | $ | 844 | $ | — | $ | 23 | $ | 2,385 | ||||||||
Renaissance Charleston | $ | 2,905 | $ | 493 | $ | 405 | $ | — | $ | (32 | ) | $ | 866 | |||||||
Hilton Garden Inn Chelsea | $ | 3,595 | $ | 1,057 | $ | 606 | $ | — | $ | — | $ | 1,663 | ||||||||
Chicago Marriott | $ | 28,087 | $ | 1,511 | $ | 3,308 | $ | 3,232 | $ | (396 | ) | $ | 7,655 | |||||||
Chicago Conrad | $ | 7,511 | $ | 1,833 | $ | 965 | $ | — | $ | — | $ | 2,798 | ||||||||
Courtyard Denver Downtown | $ | 2,647 | $ | 981 | $ | 266 | $ | — | $ | — | $ | 1,247 | ||||||||
Courtyard Fifth Avenue | $ | 4,449 | $ | (71 | ) | $ | 433 | $ | 854 | $ | 52 | $ | 1,268 | |||||||
Courtyard Midtown East | $ | 7,495 | $ | 1,018 | $ | 675 | $ | 978 | $ | — | $ | 2,671 | ||||||||
Frenchman's Reef | $ | 11,257 | $ | (1,895 | ) | $ | 1,611 | $ | 830 | $ | — | $ | 546 | |||||||
JW Marriott Denver Cherry Creek | $ | 5,954 | $ | 881 | $ | 521 | $ | 586 | $ | — | $ | 1,988 | ||||||||
Inn at Key West | $ | 1,366 | $ | 466 | $ | 90 | $ | — | $ | — | $ | 556 | ||||||||
Lexington Hotel New York | $ | 9,014 | $ | (4,396 | ) | $ | 2,664 | $ | 1,682 | $ | 30 | $ | (20 | ) | ||||||
Los Angeles Airport Marriott | $ | 15,326 | $ | 574 | $ | 1,252 | $ | 1,135 | $ | — | $ | 2,961 | ||||||||
Minneapolis Hilton | $ | 13,656 | $ | 958 | $ | 1,944 | $ | 1,359 | $ | (133 | ) | $ | 4,128 | |||||||
Orlando Airport Marriott | $ | 3,927 | $ | (1,319 | ) | $ | 812 | $ | 832 | $ | — | $ | 325 | |||||||
Hotel Rex | $ | 1,824 | $ | 442 | $ | 231 | $ | — | $ | — | $ | 673 | ||||||||
Salt Lake City Marriott | $ | 6,538 | $ | 882 | $ | 756 | $ | 392 | $ | — | $ | 2,030 | ||||||||
The Lodge at Sonoma | $ | 6,535 | $ | 1,524 | $ | 370 | $ | 318 | $ | — | $ | 2,212 | ||||||||
Vail Marriott | $ | 5,669 | $ | 89 | $ | 612 | $ | — | $ | — | $ | 701 | ||||||||
Westin San Diego | $ | 7,301 | $ | 420 | $ | 1,068 | $ | 718 | $ | 47 | $ | 2,253 | ||||||||
Westin Washington D.C. City Center | $ | 5,895 | $ | (401 | ) | $ | 1,055 | $ | 783 | $ | 46 | $ | 1,483 | |||||||
Renaissance Worthington | $ | 7,450 | $ | 498 | $ | 690 | $ | 756 | $ | 2 | $ | 1,946 | ||||||||
Pro Forma Total (2) | $ | 197,564 | $ | 10,427 | $ | 25,524 | $ | 14,455 | $ | 1,240 | $ | 51,520 | ||||||||
Pro Forma Total Excluding Lexington (3) | $ | 188,550 | $ | 14,823 | $ | 22,860 | $ | 12,773 | $ | 1,210 | $ | 51,540 | ||||||||
(1) | 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. |
(2) | Includes operating results for each of the Company's hotels assuming they were owned since January 1, 2013. |
(3) Excludes the Lexington Hotel New York under renovation during the third quarter of 2013.
16
Hotel Adjusted EBITDA Reconciliation | ||||||||||||||||||||
Year to Date 2014 | ||||||||||||||||||||
Plus: | Plus: | Plus: | Equals: | |||||||||||||||||
Total Revenues | Net Income / (Loss) | Depreciation | Interest Expense | Non-Cash Adjustments (1) | Hotel Adjusted EBITDA | |||||||||||||||
Atlanta Alpharetta Marriott | $ | 13,632 | $ | 3,594 | $ | 1,216 | $ | — | $ | — | $ | 4,810 | ||||||||
Bethesda Marriott Suites | $ | 11,058 | $ | (3,022 | ) | $ | 1,083 | $ | — | $ | 4,632 | $ | 2,693 | |||||||
Boston Westin | $ | 64,074 | $ | 11,302 | $ | 6,571 | $ | — | $ | 14 | $ | 17,887 | ||||||||
Hilton Boston Downtown | $ | 24,617 | $ | 5,699 | $ | 3,253 | $ | — | $ | 125 | $ | 9,077 | ||||||||
Hilton Burlington | $ | 11,849 | $ | 3,586 | $ | 1,309 | $ | — | $ | 68 | $ | 4,963 | ||||||||
Renaissance Charleston | $ | 10,336 | $ | 2,436 | $ | 1,212 | $ | — | $ | (95 | ) | $ | 3,553 | |||||||
Hilton Garden Inn Chelsea | $ | 9,818 | $ | 2,264 | $ | 1,468 | $ | — | $ | — | $ | 3,732 | ||||||||
Chicago Marriott | $ | 75,380 | $ | (256 | ) | $ | 9,444 | $ | 9,583 | $ | (1,192 | ) | $ | 17,579 | ||||||
Chicago Conrad | $ | 21,355 | $ | 4,447 | $ | 2,876 | $ | — | $ | — | $ | 7,323 | ||||||||
Courtyard Denver Downtown | $ | 8,178 | $ | 3,134 | $ | 824 | $ | — | $ | — | $ | 3,958 | ||||||||
Courtyard Fifth Avenue | $ | 12,322 | $ | (992 | ) | $ | 1,321 | $ | 2,514 | $ | 155 | $ | 2,998 | |||||||
Courtyard Midtown East | $ | 22,318 | $ | 2,338 | $ | 2,061 | $ | 2,781 | $ | — | $ | 7,180 | ||||||||
Frenchman's Reef | $ | 50,970 | $ | 5,406 | $ | 4,641 | $ | 2,430 | $ | — | $ | 12,477 | ||||||||
JW Marriott Denver Cherry Creek | $ | 17,541 | $ | 2,490 | $ | 1,553 | $ | 1,717 | $ | — | $ | 5,760 | ||||||||
Inn at Key West | $ | 6,033 | $ | 2,984 | $ | 270 | $ | — | $ | — | $ | 3,254 | ||||||||
Lexington Hotel New York | $ | 45,006 | $ | (1,473 | ) | $ | 9,799 | $ | 5,208 | $ | 94 | $ | 13,628 | |||||||
Los Angeles Airport Marriott | $ | 51,410 | $ | 5,492 | $ | 2,917 | $ | 3,369 | $ | — | $ | 11,778 | ||||||||
Minneapolis Hilton | $ | 38,320 | $ | (587 | ) | $ | 7,066 | $ | 3,964 | $ | (388 | ) | $ | 10,055 | ||||||
Orlando Airport Marriott | $ | 16,770 | $ | (290 | ) | $ | 1,814 | $ | 2,441 | $ | — | $ | 3,965 | |||||||
Hotel Rex | $ | 5,242 | $ | 1,302 | $ | 555 | $ | — | $ | — | $ | 1,857 | ||||||||
Salt Lake City Marriott | $ | 20,910 | $ | 2,405 | $ | 2,248 | $ | 2,071 | $ | — | $ | 6,724 | ||||||||
The Lodge at Sonoma | $ | 17,828 | $ | 3,004 | $ | 1,154 | $ | 930 | $ | — | $ | 5,088 | ||||||||
Hilton Garden Inn Times Square Central | $ | 1,786 | $ | 574 | $ | 259 | $ | — | $ | — | $ | 833 | ||||||||
Vail Marriott | $ | 24,307 | $ | 6,986 | $ | 1,548 | $ | — | $ | — | $ | 8,534 | ||||||||
Westin San Diego | $ | 22,863 | $ | 1,834 | $ | 3,317 | $ | 2,104 | $ | 137 | $ | 7,392 | ||||||||
Westin Washington D.C. City Center | $ | 21,176 | $ | 527 | $ | 3,657 | $ | 2,284 | $ | 142 | $ | 6,610 | ||||||||
Renaissance Worthington | $ | 27,244 | $ | 4,783 | $ | 1,920 | $ | 2,215 | $ | 6 | $ | 8,924 | ||||||||
Pro Forma Total (2) | $ | 650,557 | $ | 69,393 | $ | 75,097 | $ | 43,611 | $ | 3,698 | $ | 191,456 | ||||||||
Pro Forma Total Excluding NYC Renovations (3) | $ | 570,911 | $ | 69,520 | $ | 61,916 | $ | 33,108 | $ | 3,449 | $ | 167,650 | ||||||||
(1) | 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. |
(2) | Excludes the Oak Brook Hills Resort sold in April 2014 and the Hilton Garden Inn Times Square Central, which opened on September 1, 2014. Includes operating results for all other hotels assuming they were owned since January 1, 2013. |
(3) | Excludes the three hotels in New York City under renovation during the nine months ended September 30, 2013; the Lexington Hotel New York, Courtyard Manhattan Midtown East and Courtyard Fifth Avenue. |
17
Hotel Adjusted EBITDA Reconciliation | ||||||||||||||||||||
Year to Date 2013 | ||||||||||||||||||||
Plus: | Plus: | Plus: | Equals: | |||||||||||||||||
Total Revenues | Net Income / (Loss) | Depreciation | Interest Expense | Non-Cash Adjustments (1) | Hotel Adjusted EBITDA | |||||||||||||||
Atlanta Alpharetta Marriott | $ | 13,670 | $ | 3,413 | $ | 1,218 | $ | — | $ | — | $ | 4,631 | ||||||||
Bethesda Marriott Suites | $ | 10,249 | $ | (3,588 | ) | $ | 1,257 | $ | — | $ | 4,672 | $ | 2,341 | |||||||
Boston Westin | $ | 57,358 | $ | 7,431 | $ | 6,372 | $ | — | $ | 7 | $ | 13,810 | ||||||||
Hilton Boston Downtown | $ | 19,985 | $ | 2,163 | $ | 4,309 | $ | — | $ | 125 | $ | 6,597 | ||||||||
Hilton Burlington | $ | 10,887 | $ | 1,891 | $ | 2,527 | $ | — | $ | 68 | $ | 4,486 | ||||||||
Renaissance Charleston | $ | 9,203 | $ | 2,065 | $ | 1,192 | $ | — | $ | (95 | ) | $ | 3,162 | |||||||
Hilton Garden Inn Chelsea | $ | 10,201 | $ | 2,955 | $ | 1,553 | $ | — | $ | — | $ | 4,508 | ||||||||
Chicago Marriott | $ | 75,420 | $ | (665 | ) | $ | 9,864 | $ | 9,618 | $ | (1,192 | ) | $ | 17,625 | ||||||
Chicago Conrad | $ | 20,051 | $ | 3,491 | $ | 2,801 | $ | — | $ | — | $ | 6,292 | ||||||||
Courtyard Denver Downtown | $ | 7,445 | $ | 2,586 | $ | 789 | $ | — | $ | — | $ | 3,375 | ||||||||
Courtyard Fifth Avenue | $ | 10,488 | $ | (1,998 | ) | $ | 1,184 | $ | 2,544 | $ | 161 | $ | 1,891 | |||||||
Courtyard Midtown East | $ | 18,677 | $ | 328 | $ | 1,874 | $ | 2,932 | $ | — | $ | 5,134 | ||||||||
Frenchman's Reef | $ | 48,571 | $ | 2,970 | $ | 4,864 | $ | 2,473 | $ | — | $ | 10,307 | ||||||||
JW Marriott Denver Cherry Creek | $ | 16,545 | $ | 1,785 | $ | 1,487 | $ | 1,770 | $ | — | $ | 5,042 | ||||||||
Inn at Key West | $ | 5,279 | $ | 2,479 | $ | 270 | $ | — | $ | — | $ | 2,749 | ||||||||
Lexington Hotel New York | $ | 23,315 | $ | (15,255 | ) | $ | 9,010 | $ | 5,044 | $ | 92 | $ | (1,109 | ) | ||||||
Los Angeles Airport Marriott | $ | 44,658 | $ | 2,133 | $ | 3,972 | $ | 3,368 | $ | — | $ | 9,473 | ||||||||
Minneapolis Hilton | $ | 38,635 | $ | 1,396 | $ | 5,816 | $ | 4,050 | $ | (399 | ) | $ | 10,863 | |||||||
Orlando Airport Marriott | $ | 15,114 | $ | (1,368 | ) | $ | 2,332 | $ | 2,476 | $ | — | $ | 3,440 | |||||||
Hotel Rex | $ | 4,754 | $ | 836 | $ | 693 | $ | — | $ | — | $ | 1,529 | ||||||||
Salt Lake City Marriott | $ | 20,248 | $ | 3,433 | $ | 2,227 | $ | 1,182 | $ | — | $ | 6,842 | ||||||||
The Lodge at Sonoma | $ | 15,980 | $ | 2,336 | $ | 1,103 | $ | 670 | $ | — | $ | 4,109 | ||||||||
Vail Marriott | $ | 22,328 | $ | 4,947 | $ | 1,813 | $ | — | $ | — | $ | 6,760 | ||||||||
Westin San Diego | $ | 22,186 | $ | 2,407 | $ | 3,185 | $ | 1,455 | $ | 141 | $ | 7,188 | ||||||||
Westin Washington D.C. City Center | $ | 20,227 | $ | (190 | ) | $ | 4,232 | $ | 2,338 | $ | 138 | $ | 6,518 | |||||||
Renaissance Worthington | $ | 23,989 | $ | 3,052 | $ | 2,093 | $ | 2,253 | $ | 6 | $ | 7,404 | ||||||||
Pro Forma Total (2) | $ | 585,463 | $ | 31,033 | $ | 78,037 | $ | 42,173 | $ | 3,724 | $ | 154,676 | ||||||||
Pro Forma Total Excluding NYC Renovations (3) | $ | 532,983 | $ | 47,958 | $ | 65,969 | $ | 31,653 | $ | 3,471 | $ | 148,760 | ||||||||
(1) | 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. |
(2) | Excludes the Oak Brook Hills Resort sold in April 2014 and includes operating results all other hotels assuming they were owned since January 1, 2013. |
(3) | Excludes the three hotels in New York City under renovation during the nine months ended September 30, 2013; the Lexington Hotel New York, Courtyard Manhattan Midtown East and Courtyard Fifth Avenue. |
18