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 8, 2015
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 8, 2015, DiamondRock Hospitality Company (the “Company”) issued a press release announcing its financial results for the three months ended March 31, 2015. A copy of that press release is furnished 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 8, 2015. | |
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 8, 2015 | 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
DIAMONDROCK HOSPITALITY COMPANY REPORTS FIRST QUARTER 2015 RESULTS AND RAISES FULL YEAR GUIDANCE
BETHESDA, Maryland, Friday, May 8, 2015 – DiamondRock Hospitality Company (the “Company”) (NYSE: DRH), a lodging-focused real estate investment trust that owns a portfolio of 28 premium hotels in the United States, today announced results of operations for the first quarter ended March 31, 2015.
First Quarter 2015 Highlights
• | Pro Forma RevPAR: Pro Forma RevPAR was $150.78, an increase of 7.9% from the comparable period of 2014. |
• | Pro Forma Hotel Adjusted EBITDA Margin: Pro Forma Hotel Adjusted EBITDA margin was 25.41%, an increase of 140 basis points from 2014. |
• | Pro Forma Hotel Adjusted EBITDA: Pro Forma Hotel Adjusted EBITDA was $52.3 million, an increase of 13.6% from 2014. |
• | Adjusted EBITDA: Adjusted EBITDA was $48.5 million, an increase of 30.0% from 2014. |
• | Adjusted FFO: Adjusted FFO was $37.7 million and Adjusted FFO per diluted share was $0.19. |
• | Shorebreak Hotel: The Company acquired the Shorebreak Hotel, a 157-room boutique hotel in Huntington Beach, California, for $58.5 million in February 2015. |
• | Dividends: The Company declared a dividend of $0.125 per share during the first quarter, which was paid on April 10, 2015. |
Recent Developments
• | Hotel Refinancing: The Company refinanced the Renaissance Worthington in April 2015 with a new 10-year $85 million mortgage bearing interest at a fixed rate of 3.66%. |
• | Hotel Rebranding: The Company today announced that it plans to rebrand the hotel currently named the Conrad Chicago to join Starwood's Luxury Collection. The hotel will be managed by a third party pursuant to a franchise agreement. |
Mark W. Brugger, President and Chief Executive Officer of DiamondRock Hospitality Company, stated, “Our portfolio performed well overall during the first quarter, especially our most recent acquisitions, which are all ahead of our underwriting. Eleven of our hotels generated double-digit RevPAR growth during the quarter and our focused asset management initiatives drove meaningful margin expansion. Additionally, we expect to be able to utilize the current favorable interest rate environment to refinance a number of our hotels over the next year to significantly reduce our annual interest expense.”
Operating Results
Discussions of “Pro Forma” assumes the Company owned each of its 28 hotels since January 1, 2014 but excludes the Hilton Garden Inn Times Square Central, since the hotel opened for business on September 1, 2014. 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, 2015, the Company reported the following:
First Quarter | ||||||||||
2015 | 2014 | Change | ||||||||
Pro Forma ADR | $199.45 | $191.28 | 4.3 | % | ||||||
Pro Forma Occupancy | 75.6 | % | 73.1 | % | 2.5 percentage points | |||||
Pro Forma RevPAR | $150.78 | $139.75 | 7.9 | % | ||||||
Pro Forma Hotel Adjusted EBITDA Margin | 25.41 | % | 24.01 | % | 140 basis points | |||||
Adjusted EBITDA | $48.5 million | $37.3 million | $11.2 million | |||||||
Adjusted FFO | $37.7 million | $29.5 million | $8.2 million | |||||||
Adjusted FFO per diluted share | $0.19 | $0.15 | $0.04 | |||||||
Shorebreak Hotel Acquisition
The Company acquired the 157-room Shorebreak Hotel, a lifestyle hotel located beachfront in Southern California for $58.5 million on February 6, 2015. The purchase price now represents a 12.4 multiple on projected 2015 Hotel Adjusted EBITDA, which is ahead of our underwriting. In conjunction with the acquisition, the Company engaged Kimpton Hotel and Restaurant Group to operate the hotel.
ATM Equity Offering Program
The Company sold 524,606 shares of its common stock under its at-the-market ("ATM") equity offering program at an average price of $15.18 for net proceeds of $7.8 million during the first week of 2015. The Company has not sold any additional shares under the ATM program since the first week of 2015.
Hotel Financing Activity
The Company entered into a new $85 million mortgage loan secured by the Renaissance Worthington in April 2015. The new loan has a term of 10 years and bears interest at a fixed rate of 3.66%. The new loan is interest-only for the first two years after which principal will amortize over 30 years. The hotel was previously encumbered by a $52.6 million mortgage loan bearing interest at 5.4%
During the first quarter, the Company notified the lender that it intends to prepay the mortgage loan secured by the Frenchman's Reef & Morning Star Marriott Beach Resort in May 2015. The loan bears interest at a fixed rate of 5.44% and had an outstanding principal balance of $56.3 million as of March 31, 2015. The Company expects to prepay the loan with excess proceeds from the Renaissance Worthington refinancing and corporate cash on hand.
The Company currently expects to refinance the mortgage loan secured by the JW Marriott Denver at Cherry Creek during the second quarter, which represents the Company's 2015 final loan maturity. The existing loan, which was assumed when the Company acquired the hotel in 2011, bears interest at a fixed rate of 6.47% and had an outstanding principal balance of $38.4 million as of March 31, 2015.
The Company expects to have 16 of its 28 hotels unencumbered by debt by the end of the second quarter of 2015.
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Hotel Rebranding
The Company plans to rebrand the hotel currently known as the Conrad Chicago to join Starwood's Luxury Collection during the third quarter of 2015. The Company has engaged a respected third-party manager to manage the hotel upon conversion to the Luxury Collection.
Capital Expenditures
The Company currently expects to spend approximately $85 million on capital improvements at its hotels in 2015. Significant projects include the following:
• | Hilton Boston Downtown: The Company renovated approximately 90 rooms at the hotel, creating an incremental 41 guest rooms, as a return on investment project. The project is substantially complete and, as expected, negatively impacted the Company's Pro Forma RevPAR growth during the first quarter by approximately 50 basis points. |
• | Chicago Marriott Downtown: The Company is planning to complete a multi-year guest room renovation at the hotel. Marriott is contributing to the cost of the renovation through an amendment to the hotel's management agreement to reduce management fees for the remaining term of the management agreement. The amendment is expected to reduce management fees by approximately $1.8 million in 2015. The first phase of the guest room renovation, which consisted of 200 rooms, including all 25 suites, was successfully completed during the first quarter of 2015. The Company also added Marriott's new prototype F&B grab-and-go outlet in the hotel's lobby. The second phase of the guest room renovation will be completed during the seasonally slow winter months over the next three years and is not expected to result in material disruption. |
• | The Lodge at Sonoma: The Company expects to renovate the guest rooms at the hotel during the seasonally slow winter months of late 2015 and early 2016. |
• | Luxury Collection Hotel Chicago: The Company expects to renovate and reposition the hotel currently known as the Conrad Chicago during the next two seasonally slow winter seasons in connection with the rebranding. The Company is currently finalizing the cost and timing of this project. |
The Company spent approximately $20.0 million on capital improvements during the quarter ended March 31, 2015, primarily related to the addition of 41 rooms at the Hilton Boston Downtown and the first phase of guest room renovation at the Chicago Marriott Downtown.
Balance Sheet
As of March 31, 2015, the Company had $87.2 million of unrestricted cash on hand and approximately $1.0 billion of total debt, which consisted solely of property-specific mortgage debt and no outstanding borrowings on the Company's $200 million senior unsecured credit facility.
Dividends
The Company’s Board of Directors declared a quarterly dividend of $0.125 per share to stockholders of record as of March 31, 2015. The dividend was paid on April 10, 2015 and represents a 22% increase over the prior quarterly dividend.
Outlook and Guidance
The Company has provided annual guidance for 2015, 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 and Pro Forma Hotel Adjusted EBITDA margin growth assume that all of the Company's 28 hotels were owned since January 1, 2014 but excludes the Hilton Garden Inn Times Square Central until September 1, 2015, since the hotel opened on September 1, 2014.
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The Company is increasing its full year 2015 guidance to reflect first quarter performance. The Company now expects its full year 2015 results to be as follows:
Previous Guidance | Current Guidance | ||||
Metric | Low End | High End | Low End | High End | |
Pro Forma RevPAR Growth | 6 percent | 7 percent | 6 percent | 7 percent | |
Adjusted EBITDA | $262 million | $272 million | $264 million | $274 million | |
Adjusted FFO | $201 million | $207 million | $201 million | $206 million | |
Adjusted FFO per share (based on 201 million shares) | $1.00 per share | $1.03 per share | $1.00 per share | $1.02 per share | |
The midpoint of the guidance range above implies Pro Forma Hotel Adjusted EBITDA margin growth in the range of 100 to 150 basis points. In addition, the Company expects the following:
• | Corporate expenses of $23.5 million to $24.0 million, which is in line with previous guidance; |
• | Income tax expense of $10.4 million to $15.6 million, which has increased from previous guidance as a result of hotel outperformance; |
• | Interest expense of $52.3 million to $52.5 million, which assumes the completion of the refinancing of the Company's 2015 debt maturities; and |
• | Depreciation expense of $97 million to $98 million |
The following table is presented to provide investors with selected quarterly Pro Forma operating information for 2014. The operating information assumes that all of the Company's 28 hotels containing 10,709 rooms were owned since January 1, 2014, with the exception of the Hilton Garden Inn Times Square Central, which opened for business on September 1, 2014.
Quarter 1, 2014 | Quarter 2, 2014 | Quarter 3, 2014 | Quarter 4, 2014 | Full Year 2014 | |||||||||||
ADR | $ | 191.28 | $ | 209.00 | $ | 207.39 | $ | 214.89 | $ | 206.01 | |||||
Occupancy | 73.1 | % | 83.1 | % | 83.6 | % | 75.7 | % | 78.9 | % | |||||
RevPAR | $ | 139.75 | $ | 173.75 | $ | 173.35 | $ | 162.59 | $ | 162.48 | |||||
Revenues (in thousands) | $ | 191,616 | $ | 229,385 | $ | 224,300 | $ | 220,130 | $ | 865,431 | |||||
Hotel Adjusted EBITDA (in thousands) | $ | 46,011 | $ | 75,368 | $ | 69,935 | $ | 66,005 | $ | 257,319 | |||||
% of full Year | 17.9 | % | 29.3 | % | 27.2 | % | 25.6 | % | 100.0 | % | |||||
Hotel Adjusted EBITDA Margin | 24.01 | % | 32.86 | % | 31.18 | % | 29.98 | % | 29.73 | % | |||||
Available Rooms | 936,270 | 946,673 | 965,536 | 983,020 | 3,831,499 | ||||||||||
Earnings Call
The Company will host a conference call to discuss its first quarter results on Friday, May 8, 2015, at 10:00 a.m. Eastern Time (ET). To participate in the live call, investors are invited to dial 866-953-6858 (for domestic callers) or 617-399-3482 (for international callers). The participant passcode is 23025941. 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 28 premium quality hotels with over 10,700 rooms. The Company has strategically positioned its hotels to be operated both under leading global brands such as Hilton, Marriott, and Westin and
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boutique hotels in the lifestyle segment. 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; 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)
(unaudited)
March 31, 2015 | December 31, 2014 | ||||||
ASSETS | |||||||
Property and equipment, net | $ | 2,816,015 | $ | 2,764,393 | |||
Deferred financing costs, net | 7,738 | 8,023 | |||||
Restricted cash | 61,817 | 74,730 | |||||
Due from hotel managers | 88,561 | 79,827 | |||||
Favorable lease assets, net | 33,338 | 34,274 | |||||
Prepaid and other assets (1) | 52,040 | 52,739 | |||||
Cash and cash equivalents | 87,155 | 144,365 | |||||
Total assets | $ | 3,146,664 | $ | 3,158,351 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Liabilities: | |||||||
Mortgage debt | $ | 1,034,660 | $ | 1,038,330 | |||
Senior unsecured credit facility | — | — | |||||
Total debt | 1,034,660 | 1,038,330 | |||||
Deferred income related to key money, net | 21,294 | 21,561 | |||||
Unfavorable contract liabilities, net | 76,101 | 76,220 | |||||
Due to hotel managers | 62,636 | 59,169 | |||||
Dividends declared and unpaid | 25,414 | 20,922 | |||||
Accounts payable and accrued expenses (2) | 105,872 | 113,162 | |||||
Total other liabilities | 291,317 | 291,034 | |||||
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; 200,711,085 and 199,964,041 shares issued and outstanding at March 31, 2015 and December 31, 2014, respectively | 2,007 | 2,000 | |||||
Additional paid-in capital | 2,052,091 | 2,045,755 | |||||
Accumulated deficit | (233,411 | ) | (218,768 | ) | |||
Total stockholders’ equity | 1,820,687 | 1,828,987 | |||||
Total liabilities and stockholders’ equity | $ | 3,146,664 | $ | 3,158,351 | |||
(1) Includes $40.5 million of deferred tax assets, $5.0 million of prepaid expenses and $6.5 million of other assets as of March 31, 2015.
(2) Includes $66.1 million of deferred ground rent, $17.2 million of deferred tax liabilities, $10.3 million of accrued property taxes, $4.6 million of accrued capital expenditures and $7.7 million of other accrued liabilities as of March 31, 2015.
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DIAMONDROCK HOSPITALITY COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(unaudited)
Three Months Ended March 31, | |||||||
2015 | 2014 | ||||||
Revenues: | |||||||
Rooms | $ | 144,637 | $ | 129,736 | |||
Food and beverage | 52,333 | 48,611 | |||||
Other | 11,918 | 11,737 | |||||
Total revenues | 208,888 | 190,084 | |||||
Operating Expenses: | |||||||
Rooms | 38,464 | 38,105 | |||||
Food and beverage | 35,547 | 34,500 | |||||
Management fees | 6,201 | 5,293 | |||||
Other hotel expenses | 76,505 | 72,476 | |||||
Depreciation and amortization | 24,337 | 25,123 | |||||
Hotel acquisition costs | 232 | — | |||||
Corporate expenses | 5,410 | 5,188 | |||||
Gain on insurance proceeds | — | (663 | ) | ||||
Impairment of favorable lease asset | 786 | — | |||||
Total operating expenses | 187,482 | 180,022 | |||||
Operating income | 21,406 | 10,062 | |||||
Interest income | (90 | ) | (1,652 | ) | |||
Interest expense | 13,219 | 14,525 | |||||
Other income, net | (38 | ) | — | ||||
Total other expenses, net | 13,091 | 12,873 | |||||
Income (loss) before income taxes | 8,315 | (2,811 | ) | ||||
Income tax benefit | 2,326 | 6,848 | |||||
Net income | $ | 10,641 | $ | 4,037 | |||
Earnings per share: | |||||||
Basic and diluted earnings per share | $ | 0.05 | $ | 0.02 | |||
Weighted-average number of common shares outstanding: | |||||||
Basic | 200,645,518 | 195,623,959 | |||||
Diluted | 201,122,233 | 196,405,055 | |||||
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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 favorable and unfavorable contract assets and liabilities recorded in conjunction with certain acquisitions. 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 our 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. |
• | 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, hotel pre-opening costs, hotel manager transition costs, contract termination fees, severance costs, gains or losses from legal settlements, bargain purchase gains, and insurance proceeds. |
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.
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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 any fair market value adjustments to the Company's interest rate cap agreement.
The following tables are reconciliations of our GAAP net income to EBITDA and Adjusted EBITDA (in thousands):
Three Months Ended March 31, | |||||||
2015 | 2014 | ||||||
Net income | $ | 10,641 | $ | 4,037 | |||
Interest expense | 13,219 | 14,525 | |||||
Income tax benefit | (2,326 | ) | (6,848 | ) | |||
Real estate related depreciation and amortization | 24,337 | 25,123 | |||||
EBITDA | 45,871 | 36,837 | |||||
Non-cash ground rent | 1,507 | 1,696 | |||||
Non-cash amortization of favorable and unfavorable contract liabilities, net | (353 | ) | (353 | ) | |||
Impairment of favorable lease asset | 786 | — | |||||
Gain on insurance proceeds | — | (663 | ) | ||||
Reversal of previously recognized Allerton income | — | (291 | ) | ||||
Hotel acquisition costs | 232 | 36 | |||||
Hotel manager transition and pre-opening costs (1) | 467 | 14 | |||||
Adjusted EBITDA | $ | 48,510 | $ | 37,276 | |||
(1) | Classified as other hotel expenses on the consolidated statements of operations. |
Full Year 2015 Guidance | |||||||
Low End | High End | ||||||
Net income | $ | 96,714 | $ | 102,714 | |||
Interest expense | 52,500 | 52,300 | |||||
Income tax expense | 10,400 | 15,600 | |||||
Real estate related depreciation and amortization | 98,000 | 97,000 | |||||
EBITDA | 257,614 | 267,614 | |||||
Non-cash ground rent | 5,700 | 5,700 | |||||
Non-cash amortization of favorable and unfavorable contracts, net | (1,400 | ) | (1,400 | ) | |||
Impairment of favorable lease asset | 786 | 786 | |||||
Hotel acquisition costs | 300 | 300 | |||||
Hotel manager transition and pre-opening costs | 1,000 | 1,000 | |||||
Adjusted EBITDA | $ | 264,000 | $ | 274,000 | |||
The following tables are reconciliations of our GAAP net income to FFO and Adjusted FFO (in thousands):
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Three Months Ended March 31, | |||||||
2015 | 2014 | ||||||
Net income | $ | 10,641 | $ | 4,037 | |||
Real estate related depreciation and amortization | 24,337 | 25,123 | |||||
Impairment of favorable lease asset | 786 | — | |||||
FFO | 35,764 | 29,160 | |||||
Non-cash ground rent | 1,507 | 1,696 | |||||
Non-cash amortization of favorable and unfavorable contract liabilities, net | (353 | ) | (353 | ) | |||
Gain on insurance proceeds | — | (663 | ) | ||||
Hotel acquisition costs | 232 | 36 | |||||
Hotel manager transition and pre-opening costs (1) | 467 | 14 | |||||
Reversal of previously recognized Allerton income | — | (291 | ) | ||||
Fair value adjustments to debt instruments | 80 | (85 | ) | ||||
Adjusted FFO | $ | 37,697 | $ | 29,514 | |||
Adjusted FFO per diluted share | $ | 0.19 | $ | 0.15 | |||
(1) | Classified as other hotel expenses on the consolidated statements of operations. |
Full Year 2015 Guidance | |||||||
Low End | High End | ||||||
Net income | $ | 96,714 | $ | 102,714 | |||
Real estate related depreciation and amortization | 98,000 | 97,000 | |||||
Impairment of favorable lease asset | 786 | 786 | |||||
FFO | 195,500 | 200,500 | |||||
Non-cash ground rent | 5,700 | 5,700 | |||||
Non-cash amortization of favorable and unfavorable contract liabilities, net | (1,400 | ) | (1,400 | ) | |||
Hotel acquisition costs | 300 | 300 | |||||
Hotel manager transition and pre-opening costs | 1,000 | 1,000 | |||||
Fair value adjustments to debt instruments | (100 | ) | (100 | ) | |||
Adjusted FFO | $ | 201,000 | $ | 206,000 | |||
Adjusted FFO per diluted share | $ | 1.00 | $ | 1.02 | |||
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
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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.
11
DIAMONDROCK HOSPITALITY COMPANY
HOTEL OPERATING DATA
Schedule of Property Level Results - Pro Forma (1)
(unaudited and in thousands)
Three Months Ended March 31, | ||||||||||
2015 | 2014 | % Change | ||||||||
ADR | $ | 199.45 | $ | 191.28 | 4.3 | % | ||||
Occupancy | 75.6 | % | 73.1 | % | 2.5 | % | ||||
RevPAR | $ | 150.78 | $ | 139.75 | 7.9 | % | ||||
Revenues: | ||||||||||
Rooms | $ | 141,166 | $ | 130,847 | 7.9 | % | ||||
Food and beverage | 52,658 | 49,506 | 6.4 | % | ||||||
Other | 11,890 | 11,263 | 5.6 | % | ||||||
Total revenues | 205,714 | 191,616 | 7.4 | % | ||||||
Operating Expenses: | ||||||||||
Rooms departmental expenses | $ | 37,580 | $ | 36,421 | 3.2 | % | ||||
Food and beverage departmental expenses | 35,852 | 34,295 | 4.5 | % | ||||||
Other direct departmental | 4,436 | 5,119 | (13.3 | )% | ||||||
General and administrative | 17,208 | 15,917 | 8.1 | % | ||||||
Utilities | 7,063 | 7,209 | (2.0 | )% | ||||||
Repairs and maintenance | 8,978 | 8,975 | — | % | ||||||
Sales and marketing | 15,143 | 13,485 | 12.3 | % | ||||||
Franchise fees | 4,437 | 3,308 | 34.1 | % | ||||||
Base management fees | 5,011 | 4,863 | 3.0 | % | ||||||
Incentive management fees | 1,100 | 565 | 94.7 | % | ||||||
Property taxes | 10,937 | 10,277 | 6.4 | % | ||||||
Ground rent | 3,782 | 3,742 | 1.1 | % | ||||||
Other fixed expenses | 3,072 | 2,665 | 15.3 | % | ||||||
Hotel manager transition and pre-opening costs | 467 | 14 | 3,236 | % | ||||||
Total hotel operating expenses | $ | 155,066 | $ | 146,855 | 5.6 | % | ||||
Hotel EBITDA | 50,648 | 44,761 | 13.2 | % | ||||||
Non-cash ground rent | 1,507 | 1,589 | (5.2 | )% | ||||||
Non-cash amortization of unfavorable contract liabilities | (353 | ) | (353 | ) | — | % | ||||
Hotel manager transition and pre-opening costs (2) | 467 | 14 | 3,236 | % | ||||||
Hotel Adjusted EBITDA | $ | 52,269 | $ | 46,011 | 13.6 | % | ||||
(1) | Pro forma assumes the Company owned each of its 28 hotels since January 1, 2014 but excludes the Hilton Garden Inn Times Square Central, since the hotel opened for business on September 1, 2014. |
(2) | Classified as other hotel expenses on the consolidated statements of operations. |
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Market Capitalization as of March 31, 2015 | ||||
(in thousands) | ||||
Enterprise Value | ||||
Common equity capitalization (at March 31, 2015 closing price of $14.13/share) | $ | 2,844,161 | ||
Consolidated debt | 1,034,660 | |||
Cash and cash equivalents | (87,155) | |||
Total enterprise value | $ | 3,791,666 | ||
Share Reconciliation | ||||
Common shares outstanding | 200,711 | |||
Unvested restricted stock held by management and employees | 475 | |||
Share grants under deferred compensation plan held by directors | 99 | |||
Combined shares outstanding | 201,285 | |||
Debt Summary as of March 31, 2015 | ||||||||||
(dollars in thousands) | ||||||||||
Property | Interest Rate | Term | Outstanding Principal | Maturity | ||||||
JW Marriott Denver at Cherry Creek | 6.47% | Fixed | $ | 38,354 | July 2015 | |||||
Renaissance Worthington (1) | 5.40% | Fixed | 52,605 | July 2015 | ||||||
Frenchman’s Reef & Morning Star Marriott Beach Resort | 5.44% | Fixed | 56,306 | August 2015 | ||||||
Orlando Airport Marriott | 5.68% | Fixed | 55,693 | January 2016 | ||||||
Chicago Marriott Downtown Magnificent Mile | 5.98% | Fixed | 204,280 | April 2016 | ||||||
Courtyard Manhattan / Fifth Avenue | 6.48% | Fixed | 48,798 | June 2016 | ||||||
Marriott Salt Lake City Downtown | 4.25% | Fixed | 61,096 | November 2020 | ||||||
Hilton Minneapolis | 5.46% | Fixed | 92,337 | May 2021 | ||||||
Westin Washington D.C. City Center | 3.99% | Fixed | 70,168 | January 2023 | ||||||
The Lodge at Sonoma, a Renaissance Resort & Spa | 3.96% | Fixed | 29,959 | April 2023 | ||||||
Westin San Diego | 3.94% | Fixed | 68,606 | April 2023 | ||||||
Courtyard Manhattan / Midtown East | 4.40% | Fixed | 86,000 | August 2024 | ||||||
Total Weighted-Average Interest Fixed Rate Debt | 5.28% | $ | 864,202 | |||||||
Lexington Hotel New York | LIBOR + 2.25 | Variable | 170,368 | October 2017 (2) | ||||||
Debt premium (3) | 90 | |||||||||
Total mortgage debt | $ | 1,034,660 | ||||||||
Senior unsecured credit facility | LIBOR + 1.90 | Variable | — | January 2017 (4) | ||||||
Total debt | $ | 1,034,660 | ||||||||
Total Weighted-Average Interest Rate | 4.82% | |||||||||
(1) Prepaid in April 2015.
(2) 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.
(3) Recorded upon the assumption of the mortgage loan secured by the JW Marriott Denver Cherry Creek.
(4) The credit facility may be extended for an additional year upon the payment of applicable fees and the satisfaction of certain customary conditions.
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Pro Forma Operating Statistics – First Quarter | |||||||||||||||||||||||||||||||
ADR | Occupancy | RevPAR | Hotel Adjusted EBITDA Margin | ||||||||||||||||||||||||||||
1Q 2015 | 1Q 2014 | B/(W) | 1Q 2015 | 1Q 2014 | B/(W) | 1Q 2015 | 1Q 2014 | B/(W) | 1Q 2015 | 1Q 2014 | B/(W) | ||||||||||||||||||||
Atlanta Alpharetta Marriott | $ | 174.77 | $ | 171.40 | 2.0 | % | 68.3 | % | 67.1 | % | 1.2 | % | $ | 119.30 | $ | 115.01 | 3.7 | % | 36.14 | % | 35.13 | % | 101 bps | ||||||||
Bethesda Marriott Suites | $ | 169.81 | $ | 165.22 | 2.8 | % | 56.7 | % | 54.9 | % | 1.8 | % | $ | 96.20 | $ | 90.66 | 6.1 | % | 20.12 | % | 17.56 | % | 256 bps | ||||||||
Boston Westin | $ | 204.26 | $ | 189.65 | 7.7 | % | 72.8 | % | 65.0 | % | 7.8 | % | $ | 148.73 | $ | 123.19 | 20.7 | % | 20.37 | % | 12.49 | % | 788 bps | ||||||||
Hilton Boston Downtown | $ | 207.50 | $ | 179.94 | 15.3 | % | 68.7 | % | 82.8 | % | (14.1 | )% | $ | 142.59 | $ | 148.96 | (4.3 | )% | 14.49 | % | 18.50 | % | -401 bps | ||||||||
Hilton Burlington | $ | 130.09 | $ | 118.80 | 9.5 | % | 63.0 | % | 64.1 | % | (1.1 | )% | $ | 81.99 | $ | 76.21 | 7.6 | % | 21.19 | % | 22.60 | % | -141 bps | ||||||||
Renaissance Charleston | $ | 195.94 | $ | 181.31 | 8.1 | % | 89.7 | % | 87.6 | % | 2.1 | % | $ | 175.71 | $ | 158.78 | 10.7 | % | 30.25 | % | 29.31 | % | 94 bps | ||||||||
Hilton Garden Inn Chelsea | $ | 161.81 | $ | 174.12 | (7.1 | )% | 87.7 | % | 91.5 | % | (3.8 | )% | $ | 141.96 | $ | 159.26 | (10.9 | )% | 9.84 | % | 27.21 | % | -1737 bps | ||||||||
Chicago Marriott | $ | 166.30 | $ | 157.63 | 5.5 | % | 57.2 | % | 57.9 | % | (0.7 | )% | $ | 95.07 | $ | 91.31 | 4.1 | % | (3.57 | )% | 1.46 | % | -503 bps | ||||||||
Chicago Conrad | $ | 172.24 | $ | 163.84 | 5.1 | % | 63.4 | % | 71.8 | % | (8.4 | )% | $ | 109.14 | $ | 117.67 | (7.2 | )% | (3.99 | )% | 4.97 | % | -896 bps | ||||||||
Courtyard Denver Downtown | $ | 188.54 | $ | 173.63 | 8.6 | % | 75.1 | % | 81.3 | % | (6.2 | )% | $ | 141.56 | $ | 141.23 | 0.2 | % | 42.73 | % | 43.00 | % | -27 bps | ||||||||
Courtyard Fifth Avenue | $ | 212.12 | $ | 219.61 | (3.4 | )% | 83.8 | % | 84.8 | % | (1.0 | )% | $ | 177.79 | $ | 186.13 | (4.5 | )% | 0.37 | % | 4.42 | % | -405 bps | ||||||||
Courtyard Midtown East | $ | 209.10 | $ | 221.21 | (5.5 | )% | 85.1 | % | 86.5 | % | (1.4 | )% | $ | 178.01 | $ | 191.30 | (6.9 | )% | 11.64 | % | 18.22 | % | -658 bps | ||||||||
Fort Lauderdale Westin | $ | 228.38 | $ | 229.54 | (0.5 | )% | 96.8 | % | 91.2 | % | 5.6 | % | $ | 221.18 | $ | 209.39 | 5.6 | % | 41.45 | % | 34.87 | % | 658 bps | ||||||||
Frenchman's Reef | $ | 332.10 | $ | 327.97 | 1.3 | % | 89.6 | % | 91.3 | % | (1.7 | )% | $ | 297.45 | $ | 299.47 | (0.7 | )% | 33.68 | % | 35.23 | % | -155 bps | ||||||||
JW Marriott Denver Cherry Creek | $ | 259.25 | $ | 235.98 | 9.9 | % | 74.2 | % | 79.2 | % | (5.0 | )% | $ | 192.29 | $ | 186.97 | 2.8 | % | 27.34 | % | 29.29 | % | -195 bps | ||||||||
Inn at Key West | $ | 283.02 | $ | 252.32 | 12.2 | % | 94.3 | % | 95.4 | % | (1.1 | )% | $ | 266.88 | $ | 240.68 | 10.9 | % | 62.73 | % | 62.98 | % | -25 bps | ||||||||
Lexington Hotel New York | $ | 179.33 | $ | 186.43 | (3.8 | )% | 89.0 | % | 80.8 | % | 8.2 | % | $ | 159.68 | $ | 150.69 | 6.0 | % | 4.76 | % | 5.68 | % | -92 bps | ||||||||
Hilton Minneapolis | $ | 122.27 | $ | 114.31 | 7.0 | % | 66.5 | % | 56.8 | % | 9.7 | % | $ | 81.33 | $ | 64.91 | 25.3 | % | 6.93 | % | 3.96 | % | 297 bps | ||||||||
Orlando Airport Marriott | $ | 140.54 | $ | 120.93 | 16.2 | % | 89.8 | % | 90.9 | % | (1.1 | )% | $ | 126.23 | $ | 109.91 | 14.8 | % | 40.34 | % | 35.93 | % | 441 bps | ||||||||
Hotel Rex | $ | 227.49 | $ | 183.18 | 24.2 | % | 78.1 | % | 78.3 | % | (0.2 | )% | $ | 177.74 | $ | 143.39 | 24.0 | % | 29.64 | % | 23.33 | % | 631 bps | ||||||||
Salt Lake City Marriott | $ | 159.39 | $ | 146.86 | 8.5 | % | 73.3 | % | 67.2 | % | 6.1 | % | $ | 116.76 | $ | 98.70 | 18.3 | % | 34.62 | % | 30.67 | % | 395 bps | ||||||||
Shorebreak | $ | 205.58 | $ | 185.57 | 10.8 | % | 79.2 | % | 77.9 | % | 1.3 | % | $ | 162.72 | $ | 144.48 | 12.6 | % | 21.27 | % | 21.24 | % | 3 bps | ||||||||
The Lodge at Sonoma | $ | 214.81 | $ | 208.74 | 2.9 | % | 74.7 | % | 58.8 | % | 15.9 | % | $ | 160.45 | $ | 122.73 | 30.7 | % | 14.63 | % | 6.94 | % | 769 bps | ||||||||
Hilton Garden Inn Times Square Central | $ | 180.70 | N/A | N/A | 94.1 | % | N/A | N/A | $ | 170.12 | N/A | N/A | 34.84 | % | N/A | N/A | |||||||||||||||
Vail Marriott | $ | 391.28 | $ | 376.44 | 3.9 | % | 91.5 | % | 86.7 | % | 4.8 | % | $ | 357.99 | $ | 326.43 | 9.7 | % | 51.19 | % | 49.10 | % | 209 bps | ||||||||
Westin San Diego | $ | 187.69 | $ | 163.92 | 14.5 | % | 81.2 | % | 82.0 | % | (0.8 | )% | $ | 152.44 | $ | 134.43 | 13.4 | % | 35.42 | % | 30.53 | % | 489 bps | ||||||||
Westin Washington D.C. City Center | $ | 206.96 | $ | 206.03 | 0.5 | % | 72.7 | % | 54.3 | % | 18.4 | % | $ | 150.50 | $ | 111.81 | 34.6 | % | 26.49 | % | 17.61 | % | 888 bps | ||||||||
Renaissance Worthington | $ | 183.43 | $ | 179.48 | 2.2 | % | 74.7 | % | 72.0 | % | 2.7 | % | $ | 136.96 | $ | 129.28 | 5.9 | % | 38.46 | % | 35.92 | % | 254 bps | ||||||||
Pro Forma Total (1) | $ | 199.45 | $ | 191.28 | 4.3 | % | 75.6 | % | 73.1 | % | 2.5 | % | $ | 150.78 | $ | 139.75 | 7.9 | % | 25.41 | % | 24.01 | % | 140 bps | ||||||||
(1) Assumes we owned each of our 28 hotels (10,709 rooms) since January 1, 2014 but excludes the Hilton Garden Inn Times Square Central (282 rooms), which opened for business on September 1, 2014.
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Pro Forma Hotel Adjusted EBITDA Reconciliation | ||||||||||||||||||||
First Quarter 2015 | ||||||||||||||||||||
Plus: | Plus: | Plus: | Equals: | |||||||||||||||||
Total Revenues | Net Income / (Loss) | Depreciation | Interest Expense | Non-Cash Adjustments (1) | Hotel Adjusted EBITDA | |||||||||||||||
Atlanta Alpharetta Marriott | $ | 4,864 | $ | 1,365 | $ | 393 | $ | — | $ | — | $ | 1,758 | ||||||||
Bethesda Marriott Suites | $ | 3,325 | $ | (1,261 | ) | $ | 389 | $ | — | $ | 1,541 | $ | 669 | |||||||
Boston Westin | $ | 20,093 | $ | 1,846 | $ | 2,245 | $ | — | $ | 2 | $ | 4,093 | ||||||||
Hilton Boston Downtown | $ | 5,260 | $ | (365 | ) | $ | 1,085 | $ | — | $ | 42 | $ | 762 | |||||||
Hilton Burlington | $ | 2,629 | $ | 82 | $ | 452 | $ | — | $ | 23 | $ | 557 | ||||||||
Renaissance Charleston | $ | 3,150 | $ | 593 | $ | 392 | $ | — | $ | (32 | ) | $ | 953 | |||||||
Hilton Garden Inn Chelsea | $ | 2,256 | $ | (140 | ) | $ | 362 | $ | — | $ | — | $ | 222 | |||||||
Chicago Marriott | $ | 16,099 | $ | (4,877 | ) | $ | 1,563 | $ | 3,136 | $ | (397 | ) | $ | (575 | ) | |||||
Chicago Conrad | $ | 4,058 | $ | (1,031 | ) | $ | 869 | $ | — | $ | — | $ | (162 | ) | ||||||
Courtyard Denver Downtown | $ | 2,427 | $ | 754 | $ | 283 | $ | — | $ | — | $ | 1,037 | ||||||||
Courtyard Fifth Avenue | $ | 2,994 | $ | (1,311 | ) | $ | 448 | $ | 822 | $ | 52 | $ | 11 | |||||||
Courtyard Midtown East | $ | 5,302 | $ | (1,066 | ) | $ | 685 | $ | 998 | $ | — | $ | 617 | |||||||
Fort Lauderdale Westin | $ | 15,154 | $ | 5,155 | $ | 1,127 | $ | — | — | $ | 6,282 | |||||||||
Frenchman's Reef | $ | 21,070 | $ | 4,736 | $ | 1,570 | $ | 790 | $ | — | $ | 7,096 | ||||||||
JW Marriott Denver Cherry Creek | $ | 5,637 | $ | 454 | $ | 529 | $ | 558 | $ | — | $ | 1,541 | ||||||||
Inn at Key West | $ | 2,860 | $ | 1,621 | $ | 173 | $ | — | $ | — | $ | 1,794 | ||||||||
Lexington Hotel New York | $ | 11,323 | $ | (4,190 | ) | $ | 3,329 | $ | 1,370 | $ | 30 | $ | 539 | |||||||
Minneapolis Hilton | $ | 9,769 | $ | (2,753 | ) | $ | 2,347 | $ | 1,285 | $ | (202 | ) | $ | 677 | ||||||
Orlando Airport Marriott | $ | 8,683 | $ | 2,146 | $ | 561 | $ | 796 | $ | — | $ | 3,503 | ||||||||
Hotel Rex | $ | 1,714 | $ | 366 | $ | 142 | $ | — | $ | — | $ | 508 | ||||||||
Salt Lake City Marriott | $ | 7,435 | $ | 1,165 | $ | 737 | $ | 672 | $ | — | $ | 2,574 | ||||||||
Shorebreak | $ | 3,254 | $ | 459 | $ | 233 | $ | — | — | $ | 692 | |||||||||
The Lodge at Sonoma | $ | 5,453 | $ | 119 | $ | 376 | $ | 303 | $ | — | $ | 798 | ||||||||
Hilton Garden Inn Times Square Central | $ | 4,432 | $ | 767 | $ | 777 | $ | — | $ | — | $ | 1,544 | ||||||||
Vail Marriott | $ | 14,581 | $ | 6,979 | $ | 485 | $ | — | $ | — | $ | 7,464 | ||||||||
Westin San Diego | $ | 9,049 | $ | 1,460 | $ | 1,015 | $ | 684 | $ | 46 | $ | 3,205 | ||||||||
Westin Washington D.C. City Center | $ | 6,851 | $ | (162 | ) | $ | 1,190 | $ | 740 | $ | 47 | $ | 1,815 | |||||||
Renaissance Worthington | $ | 10,424 | $ | 2,706 | $ | 580 | $ | 721 | $ | 2 | $ | 4,009 | ||||||||
Pro Forma Total (2) | $ | 205,714 | $ | 14,850 | $ | 23,560 | $ | 12,875 | $ | 1,154 | $ | 52,269 | ||||||||
(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) Assumes we owned each of our 28 hotels since January 1, 2014 but excludes the Hilton Garden Inn Times Square Central, which opened for business on September 1, 2014.
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Pro Forma Hotel Adjusted EBITDA Reconciliation | ||||||||||||||||||||
First Quarter 2014 | ||||||||||||||||||||
Plus: | Plus: | Plus: | Equals: | |||||||||||||||||
Total Revenues | Net Income / (Loss) | Depreciation | Interest Expense | Non-Cash Adjustments (1) | Hotel Adjusted EBITDA | |||||||||||||||
Atlanta Alpharetta Marriott | $ | 4,583 | $ | 1,207 | $ | 403 | $ | — | $ | — | $ | 1,610 | ||||||||
Bethesda Marriott Suites | $ | 3,150 | $ | (1,360 | ) | $ | 363 | $ | — | $ | 1,550 | $ | 553 | |||||||
Boston Westin | $ | 16,383 | $ | (151 | ) | $ | 2,195 | $ | — | $ | 2 | $ | 2,046 | |||||||
Hilton Boston Downtown | $ | 5,458 | $ | (143 | ) | $ | 1,111 | $ | — | $ | 42 | $ | 1,010 | |||||||
Hilton Burlington | $ | 2,412 | $ | 71 | $ | 451 | $ | — | $ | 23 | $ | 545 | ||||||||
Renaissance Charleston | $ | 2,961 | $ | 502 | $ | 398 | $ | — | $ | (32 | ) | $ | 868 | |||||||
Hilton Garden Inn Chelsea | $ | 2,536 | $ | 199 | $ | 491 | $ | — | $ | — | $ | 690 | ||||||||
Chicago Marriott | $ | 16,457 | $ | (5,650 | ) | $ | 3,115 | $ | 3,172 | $ | (397 | ) | $ | 240 | ||||||
Chicago Conrad | $ | 4,563 | $ | (723 | ) | $ | 950 | $ | — | $ | — | $ | 227 | |||||||
Courtyard Denver Downtown | $ | 2,407 | $ | 765 | $ | 270 | $ | — | $ | — | $ | 1,035 | ||||||||
Courtyard Fifth Avenue | $ | 3,119 | $ | (1,176 | ) | $ | 430 | $ | 832 | $ | 52 | $ | 138 | |||||||
Courtyard Midtown East | $ | 5,669 | $ | (631 | ) | $ | 690 | $ | 974 | $ | — | $ | 1,033 | |||||||
Fort Lauderdale Westin | $ | 14,695 | $ | 4,029 | $ | 1,095 | $ | — | $ | — | $ | 5,124 | ||||||||
Frenchman's Reef | $ | 22,348 | $ | 5,554 | $ | 1,514 | $ | 805 | $ | — | $ | 7,873 | ||||||||
JW Marriott Denver Cherry Creek | $ | 5,217 | $ | 437 | $ | 514 | $ | 577 | $ | — | $ | 1,528 | ||||||||
Inn at Key West | $ | 2,507 | $ | 1,417 | $ | 162 | $ | — | $ | — | $ | 1,579 | ||||||||
Lexington Hotel New York | $ | 10,663 | $ | (4,414 | ) | $ | 3,261 | $ | 1,728 | $ | 31 | $ | 606 | |||||||
Minneapolis Hilton | $ | 8,641 | $ | (3,085 | ) | $ | 2,241 | $ | 1,315 | $ | (129 | ) | $ | 342 | ||||||
Orlando Airport Marriott | $ | 6,960 | $ | 1,066 | $ | 627 | $ | 808 | $ | — | $ | 2,501 | ||||||||
Hotel Rex | $ | 1,423 | $ | 111 | $ | 221 | $ | — | $ | — | $ | 332 | ||||||||
Salt Lake City Marriott | $ | 6,994 | $ | 699 | $ | 760 | $ | 686 | $ | — | $ | 2,145 | ||||||||
Shorebreak | $ | 3,140 | $ | 202 | $ | 465 | $ | — | — | $ | 667 | |||||||||
The Lodge at Sonoma | $ | 3,804 | $ | (427 | ) | $ | 383 | $ | 308 | $ | — | $ | 264 | |||||||
Vail Marriott | $ | 13,487 | $ | 6,095 | $ | 527 | $ | — | $ | — | $ | 6,622 | ||||||||
Westin San Diego | $ | 7,272 | $ | 389 | $ | 1,088 | $ | 697 | $ | 46 | $ | 2,220 | ||||||||
Westin Washington D.C. City Center | $ | 5,257 | $ | (994 | ) | $ | 1,115 | $ | 758 | $ | 47 | $ | 926 | |||||||
Renaissance Worthington | $ | 9,510 | $ | 2,035 | $ | 645 | $ | 734 | $ | 2 | $ | 3,416 | ||||||||
Pro Forma Total (2) | $ | 191,616 | $ | 6,024 | $ | 25,485 | $ | 13,394 | $ | 1,237 | $ | 46,011 | ||||||||
(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) | Assumes we owned each of the above hotels since January 1, 2014. |
16