LaSalle Hotel Properties Reports Second Quarter 2011 Results
Achieves 6.3 percent RevPAR growth and
Second Quarter | Year-to-Date | ||||||||||||||
2011 | 2010 | 2011 | 2010 | ||||||||||||
($'s in millions except per share data) | ($'s in millions except per share data) | ||||||||||||||
Total Revenue | $ | 202.6 | $ | 165.7 | $ | 340.9 | $ | 273.9 | |||||||
Net income/(loss) to common shareholders | $ | 16.7 | $ | 8.0 | $ | (2.5 | ) | $ | (17.8 | ) | |||||
Net income/(loss) to common shareholders per diluted share | $ | 0.20 | $ | 0.11 | $ | (0.03 | ) | $ | (0.27 | ) | |||||
EBITDA(1) | $ | 67.2 | $ | 55.5 | $ | 90.5 | $ | 70.3 | |||||||
Adjusted EBITDA(1) | $ | 67.5 | $ | 55.5 | $ | 92.4 | $ | 71.8 | |||||||
FFO(1) | $ | 44.7 | $ | 35.9 | $ | 53.2 | $ | 37.4 | |||||||
Adjusted FFO(1) | $ | 45.0 | $ | 35.9 | $ | 55.0 | $ | 38.8 | |||||||
FFO per diluted share(1) | $ | 0.54 | $ | 0.52 | $ | 0.68 | $ | 0.56 | |||||||
Adjusted FFO per diluted share(1) | $ | 0.55 | $ | 0.52 | $ | 0.70 | $ | 0.58 | |||||||
(1) |
See tables later in press release, which list adjustments that reconcile net income to earnings before interest, taxes, depreciation and amortization ("EBITDA"), adjusted EBITDA, funds from operations ("FFO"), FFO per share, adjusted FFO and adjusted FFO per share. EBITDA, adjusted EBITDA, FFO, FFO per share, adjusted FFO and adjusted FFO per share are non-GAAP financial measures. See further discussion of these non-GAAP measures and reconciliations to net income later in this press release. |
|
Second Quarter Highlights
- RevPAR: Room revenue per available room (“RevPAR”) for the quarter ended
June 30, 2011 increased 6.3 percent to$168.97 , as a result of a 4.6 percent increase in average daily rate (“ADR”) to$202.52 and a 1.6 percent increase in occupancy to 83.4 percent. Hotel EBITDA margin: The Company’s hotel EBITDA margin for the quarter endedJune 30, 2011 was 35.1 percent, which was an improvement of 180 basis points compared to the comparable prior year period.- Adjusted EBITDA: The Company’s adjusted EBITDA was
$67.5 million , an increase of 21.6 percent over the second quarter of 2010. - Adjusted FFO: The Company generated adjusted FFO of
$45.0 million , or$0.55 per diluted share, compared to$35.9 million or$0.52 per diluted share in the second quarter of 2010. - Acquisitions: The Company announced that it entered into a Purchase and Sale Agreement to acquire the
Park Central Hotel in Midtown,Manhattan for$405.5 million . The transaction is now expected to close towards the end of the fourth quarter of 2011 due to seller related reasons. - Capital Markets:
- During
April 2011 , the Company sold 417,037 common shares through its ATM offering program resulting in net proceeds of approximately$11.1 million . - On
April 26, 2011 , the Company sold 7,896,612 common shares in an underwritten public offering, resulting in net proceeds of$216.7 million . These proceeds are intended to partially fund the acquisition of thePark Central Hotel .
- During
- Capital Investments: The Company invested
$10.8 million of capital in its hotels, including the completion of guestroom renovations at theWestin Copley Place hotel,Hotel Rouge ,Topaz Hotel andHotel Viking . - Dividends: On
June 15, 2011 , the Company declared a second quarter 2011 dividend of$0.11 per common share of beneficial interest.
“We are very pleased with the performance of our portfolio during the quarter,” said
Year-to-Date Highlights
For the six months ended
Balance Sheet
As of
2011 Outlook
The Company maintains its RevPAR growth and EBITDA margin expectations for the full year and has updated its outlook to reflect the issuance of common stock to date, as follows:
Low-end | High-end | |||||||
($'s in millions except per share data) | ||||||||
RevPAR growth | 6.0% | 8.0% | ||||||
Adjusted EBITDA | $ | 196.0 | $ | 206.0 | ||||
Adjusted FFO | $ | 120.1 | $ | 128.1 | ||||
Adjusted FFO per diluted share | $ | 1.47 | $ | 1.57 | ||||
Portfolio hotel EBITDA margins | 30.0% | 31.0% | ||||||
Total capital investments | $ | 65.0 | $ | 70.0 | ||||
The Company’s outlook excludes the Park Central acquisition.
Earnings Call
The Company will conduct its quarterly conference call on
This press release, together with other statements and information publicly disseminated by the Company, contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The Company intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and includes this statement for purposes of complying with these safe harbor provisions. Forward-looking statements, which are based on certain assumptions and describe the Company's future plans, strategies and expectations, are generally identifiable by use of the words “will,” "believe," "expect," "intend," "anticipate," "estimate," "project" or similar expressions. Forward-looking statements in this press release include, among others, statements about outlook for RevPAR, adjusted FFO, adjusted EBITDA and derivations thereof and related assumptions and the Company’s expectation of the closing date of the
For additional information or to receive press releases via e-mail, please visit our website at www.lasallehotels.com.
LASALLE HOTEL PROPERTIES | ||||||||||||||||||||
Consolidated Statements of Operations | ||||||||||||||||||||
(in thousands, except share data) | ||||||||||||||||||||
(unaudited) | ||||||||||||||||||||
For the three months ended | For the six months ended | |||||||||||||||||||
June 30, | June 30, | |||||||||||||||||||
Revenues: | 2011 | 2010 | 2011 | 2010 | ||||||||||||||||
Hotel operating revenues: | ||||||||||||||||||||
Room | $ | 134,005 | $ | 108,002 | $ | 222,918 | $ | 175,678 | ||||||||||||
Food and beverage | 54,203 | 44,414 | 92,445 | 74,424 | ||||||||||||||||
Other operating department | 13,161 | 11,770 | 23,118 | 20,543 | ||||||||||||||||
Total hotel operating revenues | 201,369 | 164,186 | 338,481 | 270,645 | ||||||||||||||||
Other income | 1,181 | 1,520 | 2,419 | 3,225 | ||||||||||||||||
Total revenues | 202,550 | 165,706 | 340,900 | 273,870 | ||||||||||||||||
Expenses: | ||||||||||||||||||||
Hotel operating expenses: | ||||||||||||||||||||
Room | 30,631 | 24,275 | 55,973 | 43,336 | ||||||||||||||||
Food and beverage | 35,746 | 29,490 | 64,580 | 52,195 | ||||||||||||||||
Other direct | 5,466 | 5,128 | 9,842 | 8,944 | ||||||||||||||||
Other indirect | 48,111 | 38,824 | 88,054 | 70,883 | ||||||||||||||||
Total hotel operating expenses | 119,954 | 97,717 | 218,449 | 175,358 | ||||||||||||||||
Depreciation and amortization | 27,999 | 26,329 | 55,807 | 52,075 | ||||||||||||||||
Real estate taxes, personal property taxes and insurance | 8,786 | 8,383 | 17,271 | 16,423 | ||||||||||||||||
Ground rent | 2,033 | 1,432 | 3,376 | 2,835 | ||||||||||||||||
General and administrative | 3,928 | 3,931 | 8,734 | 7,586 | ||||||||||||||||
Acquisition transaction costs | 245 | 16 | 421 | 1,471 | ||||||||||||||||
Other expenses | 502 | 617 | 1,081 | 1,742 | ||||||||||||||||
Total operating expenses | 163,447 | 138,425 | 305,139 | 257,490 | ||||||||||||||||
Operating income | 39,103 | 27,281 | 35,761 | 16,380 | ||||||||||||||||
Interest income | 5 | 19 | 14 | 52 | ||||||||||||||||
Interest expense | (9,928 | ) | (8,724 | ) | (19,710 | ) | (17,498 | ) | ||||||||||||
Income (loss) before income tax expense and discontinued operations | 29,180 | 18,576 | 16,065 | (1,066 | ) | |||||||||||||||
Income tax expense | (5,069 | ) | (4,216 | ) | (2,545 | ) | (2,505 | ) | ||||||||||||
Income (loss) from continuing operations | 24,111 | 14,360 | 13,520 | (3,571 | ) | |||||||||||||||
Discontinued operations: | ||||||||||||||||||||
Income (loss) from operations of properties disposed of | 44 | 273 | (319 | ) | (1,457 | ) | ||||||||||||||
Income tax (expense) benefit | (18 | ) | 55 | 132 | 539 | |||||||||||||||
Net income (loss) from discontinued operations | 26 | 328 | (187 | ) | (918 | ) | ||||||||||||||
Net income (loss) | 24,137 | 14,688 | 13,333 | (4,489 | ) | |||||||||||||||
Redeemable noncontrolling interest in (income) loss of consolidated entity | - | (9 | ) | 2 | 19 | |||||||||||||||
Net income (loss) attributable to the Company | 24,137 | 14,679 | 13,335 | (4,470 | ) | |||||||||||||||
Distributions to preferred shareholders | (7,402 | ) | (6,688 | ) | (15,148 | ) | (13,377 | ) | ||||||||||||
Issuance costs of redeemed preferred shares | - | - | (731 | ) | - | |||||||||||||||
Net income (loss) attributable to common shareholders | $ | 16,735 | $ | 7,991 | $ | (2,544 | ) | $ | (17,847 | ) | ||||||||||
LASALLE HOTEL PROPERTIES | ||||||||||||||||||||
Consolidated Statements of Operations - Continued | ||||||||||||||||||||
(in thousands, except share data) | ||||||||||||||||||||
(unaudited) | ||||||||||||||||||||
For the three months ended | For the six months ended | |||||||||||||||||||
June 30, | June 30, | |||||||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||||||
Earnings per Common Share - Basic: | ||||||||||||||||||||
Net income (loss) attributable to common shareholders before discontinued operations and excluding amounts attributable to unvested restricted shares |
$ | $ | 0.11 | $ | (0.03 | ) | $ | (0.25 | ) | |||||||||||
Discontinued operations | - | - | - | (0.02 | ) | |||||||||||||||
Net income (loss) attributable to common shareholders excluding amounts attributable to unvested restricted shares |
$ | 0.20 | $ | 0.11 | $ | (0.03 | ) | $ | (0.27 | ) | ||||||||||
Earnings per Common Share - Diluted: | ||||||||||||||||||||
Net income (loss) attributable to common shareholders before discontinued operations and excluding amounts attributable to unvested restricted shares |
$ | 0.20 | $ | 0.11 | $ | (0.03 | ) | $ | (0.25 | ) | ||||||||||
Discontinued operations | - | - | - | (0.02 | ) | |||||||||||||||
Net income (loss) attributable to common shareholders excluding amounts attributable to unvested restricted shares |
$ | 0.20 | $ | 0.11 | $ | (0.03 | ) | $ | (0.27 | ) | ||||||||||
Weighted average number of common shares outstanding: | </td> | |||||||||||||||||||
Basic | 82,220,410 | 69,296,793 | 78,233,731 | 67,151,207 | ||||||||||||||||
Diluted | 82,372,022 | 69,398,026 | 78,233,731 | 67,151,207 | ||||||||||||||||
LASALLE HOTEL PROPERTIES | ||||||||||||||||||||
FFO and EBITDA | ||||||||||||||||||||
(in thousands, except share data) | ||||||||||||||||||||
(unaudited) | ||||||||||||||||||||
For the three months ended | For the six months ended | |||||||||||||||||||
June 30, | June 30, | |||||||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||||||
Net income (loss) attributable to common shareholders | $ | 16,735 | $ | 7,991 | $ | (2,544 | ) | $ | (17,847 | ) | ||||||||||
Depreciation(1) | 27,873 | 27,800 | 55,550 | 55,050 | ||||||||||||||||
Amortization of deferred lease costs | 74 | 95 | 156 | 192 | ||||||||||||||||
Redeemable noncontrolling interest in consolidated entity | - | 9 | (2 | ) | (19 | ) | ||||||||||||||
FFO | $ | 44,682 | $ | 35,895 | $ | 53,160 | $ | 37,376 | ||||||||||||
Preferred share issuance costs | - | - | 731 | - | ||||||||||||||||
Acquisition transaction costs | 245 | 16 | 421 | 1,471 | ||||||||||||||||
Costs associated with CFO departure | - | - | 579 | - | ||||||||||||||||
Non-cash ground rent | 116 | - | 116 | - | ||||||||||||||||
Adjusted FFO | $ | 45,043 | $ | 35,911 | $ | 55,007 | $ | 38,847 | ||||||||||||
Weighted average number of common shares and units outstanding: |
||||||||||||||||||||
Basic | 82,220,410 | 69,296,793 | 78,233,731 | 67,151,207 | ||||||||||||||||
Diluted | 82,372,022 | 69,398,026 | 78,425,976 | 67,252,826 | ||||||||||||||||
FFO per diluted share | $ | 0.54 | $ | 0.52 | $ | 0.68 | $ | 0.56 | ||||||||||||
Adjusted FFO per diluted share | $ | 0.55 | $ | 0.52 | $ | 0.70 | $ | 0.58 | ||||||||||||
For the three months ended | For the six months ended | |||||||||||||||||||
June 30, | June 30, | |||||||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||||||
Net income (loss) attributable to common shareholders | $ | 16,735 | $ | 7,991 | $ | (2,544 | ) | $ | (17,847 | ) | ||||||||||
Interest expense(1) | 9,928 | 8,725 | 19,710 | 17,501 | ||||||||||||||||
Income tax expense(1) | 5,087 | 4,161 | 2,413 | 1,966 | ||||||||||||||||
Depreciation and amortization(1) | 27,999 | 27,938 | 55,807 | 55,326 | ||||||||||||||||
Redeemable noncontrolling interest in consolidated entity | - | 9 | (2 | ) | (19 | ) | ||||||||||||||
Distributions to preferred shareholders | 7,402 | 6,688 | 15,148 | 13,377 | ||||||||||||||||
EBITDA | $ | 67,151 | $ | 55,512 | $ | 90,532 | $ | 70,304 | ||||||||||||
Preferred share issuance costs | - | - | 731 | - | ||||||||||||||||
Acquisition transaction costs | 245 | 16 | 421 | 1,471 | ||||||||||||||||
Costs associated with CFO departure | - | - | 579 | - | ||||||||||||||||
Non-cash ground rent | 116 | - | 116 | - | ||||||||||||||||
Adjusted EBITDA | $ | 67,512 | $ | 55,528 | $ | 92,379 | $ | 71,775 | ||||||||||||
Corporate expense | 4,717 | 4,974 | 9,840 | 10,127 | ||||||||||||||||
Interest and other income(1) | (1,231 | ) | (1,550 | ) | (2,478 | ) | (3,302 | ) | ||||||||||||
Hotel level adjustments, net | (499 | ) | 3,972 | (876 | ) | 7,965 | ||||||||||||||
Hotel EBITDA | $ | 70,499 | $ | 62,924 | $ | 98,865 | $ | 86,565 | ||||||||||||
(1) Includes amounts from discontinued operations. |
With respect to Hotel EBITDA, the Company believes that excluding the effect of corporate-level expenses, non-cash items, and the portion of these items related to unconsolidated entities, provides a more complete understanding of the operating results over which individual hotels and operators have direct control. We believe property-level results provide investors with supplemental information on the ongoing operational performance of our hotels and effectiveness of the third-party management companies operating our business on a property-level basis. |
Hotel EBITDA includes the operating data for all properties for the three and six months ended June 30, 2011, except those disposed of and the March 2011 period of ownership of Viceroy Santa Monica. Hotel EBITDA includes adjustments made for presentation of comparable information. |
LASALLE HOTEL PROPERTIES | ||||||||||||||||
Hotel Operational Data | ||||||||||||||||
Schedule of Property Level Results | ||||||||||||||||
(in thousands) | ||||||||||||||||
(unaudited) | ||||||||||||||||
For the three months ended | For the six months ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Revenues: | ||||||||||||||||
Room | $ | 133,989 | $ | 126,077 | $ | 222,254 | $ | 208,505 | ||||||||
Food and beverage | 54,194 | 50,529 | 92,188 | 85,729 | ||||||||||||
Other | 12,715 | 12,375 | 22,168 | 21,476 | ||||||||||||
Total hotel revenues | 200,898 | 188,981 | 336,610 | 315,710 | ||||||||||||
Expenses: | ||||||||||||||||
Room | 30,587 | 29,320 | 55,684 | 52,757 | ||||||||||||
Food and beverage | 35,758 | 34,012 | 64,354 | 60,712 | ||||||||||||
Other direct | 5,375 | 5,456 | 9,660 | 9,618 | ||||||||||||
General and administrative | 14,306 | 13,984 | 26,997 | 26,009 | ||||||||||||
Sales and marketing | 13,239 | 12,832 | 24,590 | 23,805 | ||||||||||||
Management fees | 7,761 | 7,288 | 11,523 | 10,937 | ||||||||||||
Property operations and maintenance | 6,681 | 6,435 | 12,826 | 12,351 | ||||||||||||
Energy and utilities | 5,133 | 5,043 | 10,254 | 10,379 | ||||||||||||
Property taxes | 7,934 | 8,282 | 15,610 | 16,340 | ||||||||||||
Other fixed expenses | 3,625 | 3,405 | 6,247 | 6,237 | ||||||||||||
Total hotel expenses | 130,399 | 126,057 | 237,745 | 229,145 | ||||||||||||
Hotel EBITDA | $ | 70,499 | $ | 62,924 | $ | 98,865 | $ | 86,565 | ||||||||
Note: |
This schedule includes the operating data for the three and six months ended June 30, 2011 for all properties owned by the Company as of June 30, 2011. Sofitel, Monaco, Westin Philadelphia, Embassy Suites Philadelphia, Hotel Roger Williams, and Chamberlain West Hollywood are shown in 2010 for their comparative period of ownership in 2011. Viceroy Santa Monica operating data is included for the three months ended June 30, 2011 and its comparative period of ownership in 2010. Both 2010 and 2011 exclude Sheraton Bloomington, and 2010 excludes Westin City Center Dallas and Seaview Resort. |
LASALLE HOTEL PROPERTIES | ||||||||||||||||
Statistical Data for the Hotels | ||||||||||||||||
(unaudited) | ||||||||||||||||
For the three months ended | For the six months ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Occupancy | 83.4% | 82.1% | 75.2% | 74.2% | ||||||||||||
Increase | 1.6% | 1.4% | ||||||||||||||
ADR | $ | 202.52 | $ | 193.69 | $ | 189.04 | $ | 179.74 | ||||||||
Increase | 4.6% | 5.2% | ||||||||||||||
RevPAR | $ | 168.97 | $ | 158.99 | $ | 142.23 | $ | 133.43 | ||||||||
Increase | 6.3% | 6.6% | ||||||||||||||
Note: |
This schedule includes the operating data for the three and six months ended June 30, 2011 for all properties owned by the Company as of June 30, 2011. Sofitel, Monaco, Westin Philadelphia, Embassy Suites Philadelphia, Hotel Roger Williams, and Chamberlain West Hollywood are shown in 2010 for their comparative period of ownership in 2011. Viceroy Santa Monica operating data is included for the three months ended June 30, 2011 and its comparative period of ownership in 2010. Both 2010 and 2011 exclude Sheraton Bloomington, and 2010 excludes Westin City Center Dallas and Seaview Resort. |
Non-GAAP Financial Measures
FFO, EBITDA and
The Company considers the non-GAAP measures of FFO (including FFO per share), EBITDA and hotel EBITDA to be key supplemental measures of the Company's performance and should be considered along with, but not as alternatives to, net income or loss as a measure of the Company's operating performance. Historical cost accounting for real estate assets implicitly assumes that the value of real estate assets diminishes predictably over time. Since real estate values instead have historically risen or fallen with market conditions, most real estate industry investors consider FFO, EBITDA and hotel EBITDA to be helpful in evaluating a real estate company's operations.
The White Paper on FFO approved by NAREIT in
With respect to FFO, the Company believes that excluding the effect of extraordinary items, real estate-related depreciation and amortization, and the portion of these items related to unconsolidated entities, all of which are based on historical cost accounting and which may be of limited significance in evaluating current performance, can facilitate comparisons of operating performance between periods and between REITs, even though FFO does not represent an amount that accrues directly to common shareholders. However, FFO may not be helpful when comparing the Company to non-REITs.
With respect to EBITDA, the Company believes that excluding the effect of non-operating expenses and non-cash charges, and the portion of these items related to unconsolidated entities, all of which are also based on historical cost accounting and may be of limited significance in evaluating current performance, can help eliminate the accounting effects of depreciation and amortization, and financing decisions and facilitate comparisons of core operating profitability between periods and between REITs, even though EBITDA also does not represent an amount that accrues directly to common shareholders.
With respect to hotel EBITDA, the Company believes that excluding the effect of corporate-level expenses, non-cash items, and the portion of these items related to unconsolidated entities, provides a more complete understanding of the operating results over which individual hotels and operators have direct control. We believe property-level results provide investors with supplemental information on the ongoing operational performance of our hotels and effectiveness of the third-party management companies operating our business on a property-level basis.
FFO, EBITDA and hotel EBITDA do not represent cash generated from operating activities determined by GAAP and should not be considered as alternatives to net income, cash flows from operations or any other operating performance measure prescribed by GAAP. FFO, EBITDA and hotel EBITDA are not measures of the Company's liquidity, nor are FFO, EBITDA and hotel EBITDA indicative of funds available to fund the Company's cash needs, including its ability to make cash distributions. These measurements do not reflect cash expenditures for long-term assets and other items that have been and will be incurred. FFO, EBITDA and hotel EBITDA may include funds that may not be available for management's discretionary use due to functional requirements to conserve funds for capital expenditures, property acquisitions, and other commitments and uncertainties. To compensate for this, management considers the impact of these excluded items to the extent they are material to operating decisions or the evaluation of the Company's operating performance.
Adjusted FFO and Adjusted EBITDA
The Company presents adjusted FFO (including adjusted FFO per share) and adjusted EBITDA, which adjusts for certain additional items including gains on sale of property (to the extent included in FFO or EBITDA), impairment losses, acquisition transaction costs, costs associated with the departure of executive officers, costs associated with the recognition of issuance costs related to the calling of preferred shares and certain other items. The Company excludes these items as it believes it allows for meaningful comparisons with other REITs and between periods and is more indicative of the ongoing performance of its assets. As with FFO, EBITDA, and hotel EBITDA, the Company’s calculation of adjusted FFO and adjusted EBITDA may be different from similar adjusted measures calculated by other REITs.
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