DiamondRock Hospitality Company Reports Fourth Quarter And Full Year 2013 Results
Archive HTimes | Mar 03, 2014 | Comments 0
DiamondRock Hospitality Company (the “Company”) (NYSE: DRH), a lodging-focused real estate investment trust that owns a portfolio of 26 premium hotels in the United States, today announced results of operations for the fourth quarter and full year ended December 31, 2013. The Company also announced a 21% increase to its quarterly dividend commencing with the first quarter 2014.
2013 Operating Results
-- RevPAR: RevPAR was $138.11, an increase of 1.4% from 2012. Excluding the
New York City hotels under renovation during 2013, the Company's RevPAR
increased 5.3% from 2012.
-- Hotel Adjusted EBITDA Margin: Hotel Adjusted EBITDA margin was 25.80%, a
decrease of 143 basis points from 2012. Excluding the New York City
hotels under renovation during 2013, the Company's Hotel Adjusted EBITDA
margin increased 45 basis points from 2012.
-- Adjusted EBITDA: Adjusted EBITDA was $196.9 million.
-- Adjusted FFO: Adjusted FFO was $139.3 million and Adjusted FFO per
diluted share was $0.71.
-- Dividends: The Company declared four quarterly dividends totaling $0.34
per share during 2013 and returned approximately $65 million to
shareholders.
Fourth Quarter 2013 Highlights
-- RevPAR: RevPAR was $139.98, an increase of 3.3% from 2012.
-- Hotel Adjusted EBITDA Margin: Hotel Adjusted EBITDA margin was 25.81%, a
decrease of 188 basis points from 2012.
-- Adjusted EBITDA: Adjusted EBITDA was $49.3 million.
-- Adjusted FFO: Adjusted FFO was $33.5 million and Adjusted FFO per diluted
share was $0.17.
-- Lexington Hotel Renovation: The Company completed its comprehensive
renovation of the Lexington Hotel New York City during the fourth
quarter. The feedback from guests and meeting planners post-renovation
has been very favorable.
-- Non-Core Hotel Disposition: The Company sold the 487-room Torrance
Marriott South Bay for proceeds of approximately $76 million, which
represented a 5.8% cap rate on the hotel's net operating income.
-- Salt Lake City Refinancing: The Company entered into a new $63 million
mortgage loan secured by the Salt Lake City Marriott. The loan has a term
of seven years and bears interest at a fixed rate of 4.25%.
-- Dividends: The Company declared a quarterly dividend of $0.085 per share
during the fourth quarter.
Mark W. Brugger, President and Chief Executive Officer of DiamondRock Hospitality Company, stated, “In 2013 we focused on repositioning DiamondRock for meaningful growth in 2014 and beyond. We are pleased to announce that we have substantially completed our $140 million capital program, which included a number of transformational projects such as the comprehensive renovation and rebranding of the Lexington Hotel. Importantly, we don’t expect any meaningful renovation disruption in 2014. Our successful strategic initiatives in 2013 have positioned the Company for a strong 2014, as we look for performance to be bolstered by accelerated RevPAR growth, strong group pace, renovation tailwinds and our intensified asset management efforts.”
Operating Results
Please see “Certain Definitions” and “Non-GAAP Financial Measures” attached to this press release for an explanation of the terms “EBITDA,” “Adjusted EBITDA,” “Hotel Adjusted EBITDA Margin,” “FFO” and “Adjusted FFO.”
For the quarter ended December 31, 2013 (92 days), the Company reported the following:
Fourth Quarter
---------------------------------
2013 2012 Pro Forma(2) Change
--------------
ADR (1) $194.12 $187.04 3.8%
(0.3) percentage
Occupancy (1) 72.1% 72.4% points
RevPAR (1) $139.98 $135.50 3.3%
Total Revenue (1) $201.5 million $190.8 million 5.6%
Hotel Adjusted EBITDA
Margin (1) 25.81% 27.69% (188) basis points
Adjusted EBITDA $49.3 million
Adjusted FFO $33.5 million
Adjusted FFO per
diluted share $0.17
(1) Excludes the Torrance Marriott South Bay, which was sold in November 2013
and reported in discontinued operations.
(2) Pro forma to (a) include the operating results of the Company's
Marriott-managed hotels from October 6, 2012 to December 31, 2012 (87 days)
and all other hotels from October 1, 2012 to December 31, 2012, (b) assume the
hotels acquired in 2012 were owned as of January 1, 2012 and (c) exclude the
results of hotels sold.
The year-over-year comparability of the Company’s fourth quarter results is impacted by the change in its reporting calendar. For the Company’s Marriott-managed hotels, the 2013 fourth quarter includes 5 more days than the pro forma 2012 fourth quarter, which results in the 2013 fourth quarter including approximately 3% additional available room nights as compared to the pro forma 2012 fourth quarter.
For the year ended December 31, 2013, the Company reported the following:
Year Ended December 31,
---------------------------------
2013 2012 Pro Forma(2) Change
--------------
ADR (1) $183.85 $178.50 3.0%
(1.2) percentage
Occupancy (1) 75.1% 76.3% points
RevPAR (1) $138.11 $136.27 1.4%
Total Revenue (1) $799.7 million $779.5 million 2.6%
Hotel Adjusted EBITDA
Margin (1) 25.80% 27.23% (143) basis points
Adjusted EBITDA $196.9 million
Adjusted FFO $139.3 million
Adjusted FFO per
diluted share $0.71
(1) Excludes the Torrance Marriott South Bay, which was sold in November 2013
and reported in discontinued operations.
(2) Pro forma to assume the hotels acquired in 2012 were owned as of January
1, 2012 and exclude the results of hotels sold.
The Company’s operating results for the year ended December 31, 2013 were significantly impacted by the displacement of over 86,000 room nights at its three New York City hotels under renovation, the Lexington Hotel, Courtyard Manhattan Midtown East and Courtyard Fifth Avenue. The renovations of the two Courtyards were completed during the second quarter of 2013 and the renovation of the Lexington Hotel was completed in October 2013. The following are selected operating results for the Company excluding these three hotels:
Year Ended December 31,
---------------------------------
2013 2012 Pro Forma(2) Change
--------------
ADR (1) $176.37 $170.43 3.5%
1.3 percentage
Occupancy (1) 75.7% 74.4% points
RevPAR (1) $133.56 $126.79 5.3%
Total Revenue (1) $718.0 million $680.6 million 5.5%
Hotel Adjusted EBITDA
(1) $191.0 million $177.9 million 7.3%
Hotel Adjusted EBITDA
Margin (1) 26.60% 26.15% 45 basis points
(1) Excludes the Torrance Marriott South Bay, which was sold in November 2013
and reported in discontinued operations.
(2) Pro forma to assume the hotels acquired in 2012 were owned as of January
1, 2012 and exclude the results of hotels sold.
Capital Expenditures
The Company has substantially completed its $140 million capital improvement program. During the year ended December 31, 2013, the Company spent approximately $107.3 million on these capital improvements. The following is an update on the most significant capital projects.
-- Lexington Hotel New York: The Company completed its comprehensive
renovation of the Lexington Hotel in October 2013. The hotel joined
Marriott's Autograph Collection during August 2013 and has increased
average daily rates by approximately $40 from the comparable period in
2012.
-- Manhattan Courtyards: The Company completed the renovation of the guest
rooms, corridors and guest bathrooms at the Courtyard Manhattan/Midtown
East and Courtyard Manhattan/Fifth Avenue. The renovation at the
Courtyard Midtown East included the addition of 5 new guest rooms.
-- Westin Washington D.C.: A comprehensive $17 million renovation commenced
in October 2013 and was substantially completed in February 2014.
-- Westin San Diego: A comprehensive $14.5 million renovation commenced in
October 2013 and was substantially completed in January 2014.
-- Hilton Minneapolis: A $13 million renovation of the guest rooms, guest
bathrooms and corridors commenced in November 2013 and will be
substantially complete during the first quarter of 2014.
-- Hilton Boston: A $7 million renovation of the guest rooms, corridors,
public areas, and meeting space commenced in October 2013 and was
substantially completed at the end of 2013.
-- Hilton Burlington: A $6 million renovation of the lobby, corridors,
guest rooms and outdoor space commenced in November 2013 and was
substantially completed in February 2014.
The Company expects to spend approximately $95 million on capital improvements at its hotels in 2014, of which approximately $45 million relates to the completion of 2013 capital projects in early 2014 and approximately $50 million relates to new 2014 capital projects.
Salt Lake City Marriott Refinancing
The Company entered into a new $63 million mortgage loan secured by the Salt Lake City Marriott in October 2013. The new loan has a term of seven years and bears interest at a fixed rate of 4.25%. As part of the refinancing, the Company prepaid the $27.3 million mortgage loan previously secured by the hotel, which had a fixed interest rate of 5.5 % and a maturity date of January 2015. The cost of prepaying the loan through defeasance was approximately $1.5 million, which is added back to Adjusted EBITDA and Adjusted FFO. The Company used the proceeds from the new loan to repay the prior loan and to create additional investment capacity for the acquisition of the Hilton Garden Inn Times Square Central.
Sale of Torrance Marriott South Bay
On November 21, 2013, the Company sold the 487-room Torrance Marriott South Bay for approximately $76 million, which included credit for the hotel’s replacement reserve. The proceeds from the sale will be used to create investment capacity for the acquisition of the Hilton Garden Inn Times Square Central. The Torrance Marriott South Bay generated $5.4 million of Hotel Adjusted EBITDA during the year ended December 31, 2013.
Balance Sheet
As of December 31, 2013, the Company had $144.6 million of unrestricted cash on hand and approximately $1.1 billion of total debt, which consists solely 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 $0.085 per share to stockholders of record as of December 31, 2013. The dividend was paid on January 10, 2014. The Company increased its quarterly dividend for 2014 by 21% and its Board of Directors declared a dividend of $0.1025 per share for stockholders of record as of March 31, 2014.
Outlook and Guidance
The Company is providing 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. The Company’s outlook assumes the Hilton Garden Inn Times Square Central opens in August 2014. The 2014 Pro Forma RevPAR growth excludes the Hilton Garden Inn Times Square Central, which is expected to positively impact the Company’s RevPAR by approximately 75 basis points.
Based on the above assumptions, the Company expects its full year 2014 results to be as follows:
Metric Low End High End --------------------------------- --------------- --------------- Pro Forma RevPAR Growth 9 percent 11 percent Adjusted EBITDA $230 million $240 million Adjusted FFO $169 million $176 million Adjusted FFO per share $0.86 per share $0.90 per share (based on 196.5 million shares) --------------------------------- --------------- ---------------
The Company expects approximately 16% of full year 2014 Adjusted EBITDA to be earned during the first quarter of 2014.
The midpoint of the guidance range above implies Hotel Adjusted EBITDA margin growth of over 250 basis points. For comparison purposes, the Company’s Pro Forma RevPAR growth outlook excluding the New York City hotels under renovation during 2013 is 5.5 percent to 7.5 percent.
Earnings Call
The Company will host a conference call to discuss its fourth quarter and full year results on Tuesday, February 25, 2014, at 9:00 a.m. Eastern Time (ET). To participate in the live call, investors are invited to dial 866-318-8618 (for domestic callers) or 617-399-5137 (for international callers). The participant passcode is 29044846. 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 26 premium quality hotels with over 11,100 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.
DIAMONDROCK HOSPITALITY COMPANY
CONSOLIDATED BALANCE SHEETS
As of December 31, 2013 and December 31, 2012
(in thousands, except share and per share amounts)
2013 2012
---------- ----------
ASSETS
Property and equipment, at cost $3,168,088 $3,131,175
Less: accumulated depreciation (600,555) (519,721)
---------- ----------
2,567,533 2,611,454
Deferred financing costs, net 7,702 9,724
Restricted cash 89,106 76,131
Due from hotel managers 69,353 68,532
Note receivable 50,084 53,792
Favorable lease assets, net 39,936 40,972
Prepaid and other assets (1) 79,474 73,814
Cash and cash equivalents 144,584 9,623
---------- ----------
Total assets $3,047,772 $2,944,042
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Mortgage debt $1,091,861 $ 968,731
Senior unsecured credit facility -- 20,000
---------- ----------
Total debt 1,091,861 988,731
Deferred income related to key money, net 23,707 24,362
Unfavorable contract liabilities, net 78,093 80,043
Due to hotel managers 54,225 51,003
Dividends declared and unpaid 16,981 15,911
Accounts payable and accrued expenses (2) 102,214 88,879
---------- ----------
Total other liabilities 275,220 260,198
Stockholders' Equity:
Preferred stock, $0.01 par value; 10,000,000
shares authorized; no shares issued and
outstanding -- --
Common stock, $0.01 par value; 400,000,000 shares
authorized; 195,470,791 and 195,145,707 shares
issued and outstanding at December 31, 2013 and
December 31, 2012, respectively 1,955 1,951
Additional paid-in capital 1,979,613 1,976,200
Accumulated deficit (300,877) (283,038)
---------- ----------
Total stockholders' equity 1,680,691 1,695,113
---------- ----------
Total liabilities and stockholders' equity $3,047,772 $2,944,042
========= =========
(1) Includes $39.4 million of deferred tax assets, $26.9 million for the
Hilton Garden Inn Times Square purchase deposit, $8.1 million of prepaid
expenses and $5.1 million of other assets as of December 31, 2013.
(2) Includes $59.0 million of deferred ground rent, $11.0 million of deferred
tax liabilities, $11.7 million of accrued property taxes, $8.6 million of
accrued capital expenditures and $11.9 million of other accrued
liabilities as of December 31, 2013.
DIAMONDROCK HOSPITALITY COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the Fiscal Quarters Ended December 31, 2013 and December 31, 2012 and
the Years Ended December 31, 2013 and December 31, 2012
(in thousands, except per share amounts)
(unaudited)
Fiscal Quarter Ended December
31, Year Ended December 31,
------------------------------ ---------------------------
2013 2012 2013 2012
-------------- -------------- -------------- -----------
Revenues:
Rooms $ 142,864 $ 183,215 $ 558,751 $ 509,902
Food and
beverage 47,239 61,024 193,043 174,963
Other 11,364 14,993 47,894 42,022
-------------- -------------- -------------- -----------
Total revenues 201,467 259,232 799,688 726,887
-------------- -------------- -------------- -----------
Operating
Expenses:
Rooms 38,573 46,248 151,040 135,437
Food and
beverage 33,194 41,891 136,454 124,890
Management fees 6,621 9,410 25,546 24,307
Other hotel
expenses 71,241 88,396 284,523 254,265
Impairment loss -- -- -- 30,844
Depreciation
and
amortization 25,374 36,409 103,895 97,004
Hotel
acquisition
costs -- 246 -- 10,591
Corporate
expenses 4,971 5,384 23,072 21,095
-------------- -------------- -------------- -----------
Total operating
expenses 179,974 227,984 724,530 698,433
-------------- -------------- -------------- -----------
Operating
profit 21,493 31,248 75,158 28,454
-------------- -------------- -------------- -----------
Other Expenses
(Income):
Interest income (1,724) (29) (6,328) (305)
Interest
expense 14,769 17,061 57,279 53,771
Loss (gain) on
early
extinguishment
of debt 1,492 -- 1,492 (144)
-------------- -------------- -------------- -----------
Total other
expenses, net 14,537 17,032 52,443 53,322
-------------- -------------- -------------- -----------
Income (loss)
from
continuing
operations
before income
taxes 6,956 14,216 22,715 (24,868)
Income tax
(expense)
benefit (128) 1,400 1,113 6,793
-------------- -------------- -------------- -----------
Income (loss)
from
continuing
operations 6,828 15,616 23,828 (18,075)
-------------- --------------
Income from
discontinued
operations,
net of income
taxes 22,727 1,012 25,237 1,483
-------------- -------------- -------------- -----------
Net income
(loss) 29,555 16,628 49,065 (16,592)
============== ============== ============== ===========
Earnings (loss)
earnings per
share:
Continuing
operations $ 0.03 $ 0.08 $ 0.12 $ (0.10)
Discontinued
operations 0.12 0.00 0.13 0.01
-------------- -------------- -------------- -----------
Basic and
diluted
earnings
(loss) per
share $ 0.15 $ 0.08 $ 0.25 $ (0.09)
=== ========= ========== ========== ==========
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: In 2012, due to the uncertainty of the timing of the
bankruptcy resolution, we excluded both cash interest payments received
and the legal costs incurred as a result of the bankruptcy proceedings
from our calculation of Adjusted EBITDA and Adjusted FFO. Due to the
settlement of the bankruptcy proceedings and amended and restated loan,
we commenced recognizing interest income in 2013, which includes the
amortization of the difference between the carrying basis of the old loan
and face value of the new loan. Cash payments received during 2010 and
2011 that were included in Adjusted EBITDA and Adjusted FFO and reduced
the carrying basis of the loan are now deducted from Adjusted EBITDA and
Adjusted FFO on a straight-line basis over the anticipated five-year term
of the new loan.
-- Other Non-Cash and /or Unusual Items: 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,
new hotel pre-opening costs, contract termination fees and severance
costs. In 2012, we excluded the franchise termination fee paid to
Radisson Hotels International, Inc. for the Lexington Hotel New York. In
2013, we excluded the severance costs associated with the departure of
our former President and Chief Operating Officer, as well as the write
off of unamortized key money, net of a termination payment, related to
the termination of the Oak Brook Hills Resort management agreement.
In addition, to derive Adjusted EBITDA we exclude gains or losses on sales of properties and impairment losses because we believe that including them in EBITDA is not consistent with reflecting the ongoing performance of our hotels. Additionally, the gains or losses on sales of properties 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):
Fiscal Quarter Ended Year Ended
December 31, December 31,
------------------------ -------------------
2013 2012 2013 2012
------------- --------- -------- ---------
Net income (loss) $ 29,555 $ 16,628 $ 49,065 $(16,592)
Interest expense (1) 14,769 17,061 57,279 56,068
Income tax expense
(benefit) (2) 928 (1,242) (16) (6,046)
Real estate related
depreciation (3) 25,374 37,350 105,655 101,498
--------- ---------
EBITDA 70,626 69,797 211,983 134,928
Non-cash ground rent 1,677 2,074 6,787 6,694
Non-cash amortization of
favorable and
unfavorable contract
liabilities, net (424) (357) (1,487) (1,653)
(Gain) loss on sale of
hotel properties (22,733) 61 (22,733) (9,479)
Loss (gain) on early
extinguishment of debt 1,492 -- 1,492 (144)
Acquisition costs -- 246 -- 10,591
Reversal of previously
recognized Allerton
income (291) -- (1,163) --
Allerton loan legal fees -- 476 -- 2,493
Write-off of key money (1,082) -- (1,082) --
Franchise termination fee -- -- -- 750
Impairment losses (4) -- -- -- 45,534
Severance costs -- -- 3,065 --
Adjusted EBITDA $ 49,265 $ 72,297 $196,862 $ 189,714
=== ======== ======== ======= ========
(1) Includes $2.3 million of interest expense reported in discontinued
operations for the year ended December 31, 2012.
(2) Includes $0.8 million of income tax expense reported in discontinued
operations for the fiscal quarter ended December 31, 2013 and $1.1
million of income tax expense reported in discontinued operations for the
year ended December 31, 2013. Includes $0.2 million of income tax expense
reported in discontinued operations for the fiscal quarter ended December
31, 2012 and $0.7 million of income tax expense reported in discontinued
operations for the year ended December 31, 2012.
(3) Includes $1.8 million of depreciation expense reported in discontinued
operations for the year ended December 31, 2013. Includes $0.9 million of
depreciation expense reported in discontinued operations for the quarter
ended December 31, 2012 and $4.5 million of depreciation expense reported
in discontinued operations for the year ended December 31, 2012.
(4) Includes impairment losses of $14.7 million reported in discontinued
operations for the year ended December 31, 2012.
Guidance (in 000s)
----------------------
Full Year 2014
----------------------
Low End High End
------------ --------
Net income (1) $ 69,163 $ 76,663
Interest expense 59,200 59,100
Income tax expense (benefit) 1,400 4,500
Real estate related depreciation and amortization 95,500 95,000
EBITDA 225,263 235,263
Non-cash ground rent 6,400 6,400
Non-cash amortization of favorable and unfavorable
contracts, net (1,400) (1,400)
Reversal of previously recognized Allerton income (1,163) (1,163)
Pre-opening costs 900 900
Adjusted EBITDA $ 230,000 $240,000
======== =======
(1) Net income includes approximately $6.6 million of interest income related
to the Allerton loan and approximately $21.0 million of corporate
expenses.
The following tables are reconciliations of our U.S. GAAP net income to FFO and Adjusted FFO (in thousands):
Fiscal Quarter Ended Year Ended
December 31, December 31,
------------------------ -------------------
2013 2012 2013 2012
------------- --------- -------- ---------
Net income (loss) $ 29,555 $ 16,628 $ 49,065 $(16,592)
Real estate related
depreciation (1) 25,374 37,350 105,655 101,498
Impairment losses (2) -- -- -- 45,534
(Gain) loss on sale of
hotel properties (22,733) 61 (22,733) (9,479)
------------- --------- -------- ---------
FFO 32,196 54,039 131,987 120,961
Non-cash ground rent 1,677 2,074 6,787 6,694
Non-cash amortization of
unfavorable contract
liabilities, net (424) (357) (1,487) (1,653)
Loss (gain) on early
extinguishment of debt 1,492 -- 1,492 (144)
Acquisition costs -- 246 -- 10,591
Reversal of previously
recognized Allerton
income (291) -- (1,163) --
Allerton loan legal fees -- 476 -- 2,493
Write-off of key money (1,082) -- (1,082) --
Franchise termination fee -- -- -- 750
Severance costs -- -- 3,065 --
Fair value adjustments to
debt instruments (65) (28) (298) 471
Adjusted FFO $ 33,503 $ 56,450 $139,301 $ 140,163
=== ======== ======== ======= ========
Adjusted FFO per share $ 0.17 $ 0.29 $ 0.71 $ 0.78
=== ======== ======== ======= ========
(1) Includes $1.8 million of depreciation expense reported in discontinued
operations for the year ended December 31, 2013. Includes $0.9 million of
depreciation expense reported in discontinued operations for the quarter
ended December 31, 2012 and $4.5 million of depreciation expense reported
in discontinued operations for the year ended December 31, 2012.
(2) Includes impairment losses of $14.7 million reported in discontinued
operations in the year ended December 31, 2012.
Guidance (in 000s)
Full Year 2014
----------------------
Low End High End
------------ --------
Net income (1) $ 69,163 $ 76,663
Real estate related depreciation and amortization 95,500 95,000
FFO 164,663 171,663
Non-cash ground rent 6,400 6,400
Non-cash amortization of favorable and unfavorable
contracts, net (1,400) (1,400)
Reversal of previously recognized Allerton income (1,163) (1,163)
Pre-opening costs 900 900
Fair value adjustments to debt instruments (400) (400)
Adjusted FFO $ 169,000 $176,000
======== =======
Adjusted FFO per share $ 0.86 $ 0.90
======== =======
(1) Net income includes approximately $6.6 million of interest income related
to the Allerton loan and approximately $21.0 million of corporate
expenses.
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, the non-cash amortization of the unfavorable contract liabilities recorded in conjunction with the acquisitions of the Bethesda Marriott Suites, the Chicago Marriott Downtown, the Renaissance Charleston and the Lexington Hotel New York. Hotel EBITDA represents hotel net income excluding: (1) interest expense; (2) income taxes; and (3) depreciation and amortization. Hotel Adjusted EBITDA margins are calculated as Hotel Adjusted EBITDA divided by total hotel revenues. Net debt is calculated as total debt outstanding less unrestricted cash.
DIAMONDROCK HOSPITALITY COMPANY
HOTEL OPERATING DATA
Schedule of Property Level Results
(in thousands)
(unaudited)
Quarter Ended December 31, Year Ended December 31,
----------------------------- -----------------------------
Pro Pro
Forma % Forma %
2013 2012 (1) Change 2013 2012 (2) Change
-------- -------- --------- -------- -------- ---------
Revenues:
Rooms $142,864 $134,365 6.3% $558,751 $552,568 1.1%
Food and
beverage 47,239 45,148 4.6% 193,043 181,891 6.1%
Other 11,364 11,258 0.9% 47,894 44,998 6.4%
-------- -------- ----- -------- -------- -----
Total revenues 201,467 190,771 5.6% 799,688 779,457 2.6%
-------- -------- ----- -------- -------- -----
Operating
Expenses:
Rooms
departmental
expenses $ 38,573 $ 34,347 12.3% $151,040 $144,111 4.8%
Food and
beverage
departmental
expenses 33,194 31,445 5.6% 136,454 129,361 5.5%
Other direct
departmental 5,092 4,896 4.0% 21,933 20,941 4.7%
General and
administrative 16,903 15,151 11.6% 64,204 61,759 4.0%
Utilities 6,466 6,675 (3.1)% 28,163 27,764 1.4%
Repairs and
maintenance 9,457 8,511 11.1% 36,808 34,670 6.2%
Sales and
marketing 18,060 16,076 12.3% 67,582 66,728 1.3%
Base management
fees 4,949 4,973 (0.5)% 19,324 19,745 (2.1)%
Incentive
management
fees 1,672 1,834 (8.8)% 6,222 5,557 12.0%
Property taxes 9,324 8,775 6.3% 40,045 36,462 9.8%
Ground rent 3,746 3,513 6.6% 14,985 14,603 2.6%
Other fixed
expenses 3,277 3,008 8.9% 11,886 10,856 9.5%
Total hotel
operating
expenses $150,713 $139,204 8.3% $598,646 $572,557 4.6%
------- ------- ----- ------- ------- -----
Hotel EBITDA 50,754 51,567 (1.6)% 201,042 206,900 (2.8)%
-------- -------- ----- -------- -------- -----
Non-cash ground
rent 1,677 1,583 5.9% 6,787 6,783 0.1%
Non-cash
amortization
of unfavorable
contract
liabilities (424) (317) 33.8% (1,487) (1,409) 5.5%
-------- -------- ----- -------- -------- -----
Hotel Adjusted
EBITDA $ 52,007 $ 52,833 (1.6)% $206,342 $212,274 (2.8)%
======= ======= ===== ======= ======= =====
(1) Pro forma to (a) include the operating results of the Company's
Marriott-managed hotels from October 6, 2012 to December 31, 2012 and all
other hotels from October 1, 2012 to December 31, 2012, (b) assume the
hotels acquired in 2012 were owned as of January 1, 2012, and (c) exclude
the operating results of hotels sold.
(2) Pro forma to (a) assume the hotels acquired in 2012 were owned as of
January 1, 2012, and (b) exclude the operating results of hotels sold.
Market Capitalization as of December 31, 2013
(in thousands, except per share data)
Enterprise Value
------------------------------------------------------
Common equity capitalization (at December 31, 2013
closing price of $11.55/share) $ 2,265,302
Consolidated debt 1,091,861
Cash and cash equivalents (144,584)
--------------------
Total enterprise value $ 3,212,579
========= =========
Share Reconciliation
------------------------------------------------------
Common shares outstanding 195,471
Unvested restricted stock held by management and
employees 583
Share grants under deferred compensation plan held by
directors 76
--------------------
Combined shares outstanding 196,130
====================
Debt Summary as of December 31, 2013
(dollars in thousands)
Interest Outstanding
Property Rate Term Principal Maturity
---------------------------- -------- -------- ------------- -------------
Courtyard Manhattan /
Midtown East 8.810% Fixed $ 41,530 October 2014
Salt Lake City Marriott
Downtown 4.250% Fixed 62,771 November 2020
Courtyard Manhattan / Fifth
Avenue 6.480% Fixed 49,591 June 2016
Los Angeles Airport Marriott 5.300% Fixed 82,600 July 2015
Frenchman's Reef Marriott 5.440% Fixed 57,671 August 2015
Renaissance Worthington 5.400% Fixed 53,804 July 2015
Orlando Airport Marriott 5.680% Fixed 56,778 January 2016
Chicago Marriott Downtown 5.975% Fixed 208,417 April 2016
Hilton Minneapolis 5.464% Fixed 94,874 May 2021
JW Marriott Denver at Cherry
Creek 6.470% Fixed 39,692 July 2015
LIBOR +
Lexington Hotel New York 3.00 Variable 170,368 March 2015
Westin Washington D.C. City
Center 3.990% Fixed 72,421 January 2023
The Lodge at Sonoma 3.960% Fixed 30,607 April 2023
Westin San Diego 3.940% Fixed 70,194 April 2023
Debt premium (1) 543
-------------
Total mortgage debt $ 1,091,861
=========
Senior unsecured credit LIBOR +
facility 1.90 Variable - January 2017
-------------
Total debt $ 1,091,861
=========
(1) Non-cash GAAP adjustment recorded upon the assumption of the mortgage
loan secured by the JW Marriott Denver Cherry Creek in 2011.
Pro Forma Operating Statistics -- Fourth Quarter (1)
ADR Occupancy RevPAR Hotel Adjusted EBITDA Margin
--------------------------- ------------------------------ ---------------------------- -----------------------------------
4Q 2013 4Q 2012 B/(W) 4Q 2013 4Q 2012 B/(W) 4Q 2013 4Q 2012 B/(W) 4Q 2013 4Q 2012 B/(W)
------- ------- --------- -------- -------- ---------- ------- ------- ---------- ------------ --------- ----------
Atlanta
Alpharetta
Marriott $148.33 $138.92 6.8% 69.0% 64.8% 4.2% $102.37 $ 89.99 13.8% 37.41% 27.95% 946 bps
Bethesda
Marriott
Suites $152.65 $167.73 (9.0)% 66.9% 60.8% 6.1% $102.19 $102.04 0.1% 23.43% 24.08% -65 bps
Boston
Westin $235.69 $226.21 4.2% 64.4% 63.1% 1.3% $151.71 $142.83 6.2% 26.14% 25.28% 86 bps
Hilton
Boston
Downtown $246.06 $228.79 7.5% 71.7% 63.2% 8.5% $176.35 $144.58 22.0% 28.36% 26.56% 180 bps
Hilton
Burlington $153.42 $146.53 4.7% 70.5% 71.1% (0.6)%% $108.16 $104.24 3.8% 35.57% 33.10% 247 bps
Renaissance
Charleston $194.86 $171.36 13.7% 86.7% 83.7% 3.0% $168.96 $143.36 17.9% 37.01% 31.34% 567 bps
Hilton
Garden Inn
Chelsea $258.71 $262.00 (1.3)% 93.9% 98.5% (4.6)% $242.95 $258.15 (5.9)% 48.34% 50.80% -246 bps
Chicago
Marriott $207.30 $205.61 0.8% 75.0% 74.9% 0.1% $155.51 $153.95 1.0% 23.48% 26.61% -313 bps
Chicago
Conrad $223.92 $228.29 (1.9)% 77.8% 79.9% (2.1)% $174.24 $182.38 (4.5)% 34.46% 30.07% 439 bps
Courtyard
Denver
Downtown $167.12 $160.72 4.0% 78.8% 81.8% (3.0)% $131.75 $131.41 0.3% 43.53% 44.75% -122 bps
Courtyard
Fifth
Avenue $304.14 $315.61 (3.6)% 88.4% 96.5% (8.1)% $268.83 $304.67 (11.8)% 30.00% 39.29% -929 bps
Courtyard
Midtown
East $307.83 $308.72 (0.3)% 88.3% 89.5% (1.2)% $271.68 $276.28 (1.7)% 41.16% 40.48% 68 bps
Frenchman's
Reef $227.75 $211.33 7.8% 76.3% 72.9% 3.4% $173.68 $154.00 12.8% 16.11% 13.25% 286 bps
JW Marriott
Denver
Cherry
Creek $234.65 $229.00 2.5% 78.6% 77.8% 0.8% $184.49 $178.06 3.6% 30.13% 28.99% 114 bps
Los Angeles
Airport
Marriott $112.63 $107.68 4.6% 82.8% 83.0% (0.2)% $ 93.22 $ 89.40 4.3% 13.32% 15.57% -225 bps
Hilton
Minneapolis $147.35 $150.08 (1.8)% 64.2% 67.9% (3.7)% $ 94.60 $101.93 (7.2)% 22.63% 27.18% -455 bps
Oak Brook
Hills
Resort $120.94 $119.53 1.2% 42.1% 45.7% (3.6)% $ 50.94 $ 54.60 (6.7)% (10.10)% 2.41% -1251 bps
Orlando
Airport
Marriott $ 96.68 $ 98.78 (2.1)% 76.6% 70.3% 6.3% $ 74.07 $ 69.45 6.7% 24.80% 23.06% 174 bps
Hotel Rex $181.95 $182.92 (0.5)% 83.2% 79.4% 3.8% $151.38 $145.20 4.3% 27.24% 35.85% -861 bps
Salt Lake
City
Marriott $138.71 $123.70 12.1% 58.8% 60.6% (1.8)% $ 81.59 $ 75.01 8.8% 23.79% 24.63% -84 bps
The Lodge at
Sonoma $250.39 $229.58 9.1% 69.4% 69.9% (0.5)% $173.77 $160.44 8.3% 25.71% 22.63% 308 bps
Torrance
Marriott
South Bay $115.36 $110.81 4.1% 85.8% 77.5% 8.3% $ 99.00 $ 85.92 15.2% 22.98% 25.76% -278 bps
Vail
Marriott $296.20 $250.41 18.3% 55.6% 50.6% 5.0% $164.69 $126.76 29.9% 30.01% 19.83% 1018 bps
Lexington
Hotel New
York $268.22 $232.56 15.3% 87.7% 95.5% (7.8)% $235.30 $222.18 5.9% 28.59% 44.90% -1631 bps
Westin San
Diego $150.16 $144.22 4.1% 69.5% 74.7% (5.2)% $104.29 $107.66 (3.1)% 19.62% 26.00% -638 bps
Westin
Washington
D.C. City
Center $203.40 $194.98 4.3% 60.0% 68.0% (8.0)% $121.98 $132.67 (8.1)% 28.26% 30.63% -237 bps
Renaissance
Worthington $169.94 $172.43 (1.4)% 66.4% 61.4% 5.0% $112.77 $105.88 6.5% 30.19% 28.83% 136 bps
Total $191.90 $185.22 3.6% 72.4% 72.6% (0.2)% $139.01 $134.39 3.4% 25.77% 27.67% -190 bps
====== ====== ===== ==== ==== ====== ====== ====== ====== ======= ===== ==========
Total
Excluding
Torrance
(2) $194.12 $187.04 3.8% 72.1% 72.4% (0.3)% $139.98 $135.50 3.3% 25.81% 27.69% -188 bps
====== ====== ===== ==== ==== ====== ====== ====== ====== ======= ===== ==========
(1) The pro forma operating data includes the operating results for each of
the Company's hotels assuming they were owned since January 1, 2012. 4Q
2012 includes the operating results of the Company's Marriott-managed
hotels from October 6, 2012 to December 31, 2012 (87 days) and all other
hotels from October 1, 2012 to December 31, 2012.
(2) Excludes the Torrance Marriott South Bay that was sold during 2013.
Pro Forma Operating Statistics -- Full Year (1)
ADR Occupancy RevPAR Hotel Adjusted EBITDA Margin
--------------------------- ------------------------------ ---------------------------- ---------------------------------
YTD YTD YTD YTD
2013 2012 B/(W) YTD 2013 YTD 2012 B/(W) 2013 2012 B/(W) YTD 2013 YTD 2012 B/(W)
------- ------- --------- -------- -------- ---------- ------- ------- ---------- ---------- --------- ----------
Atlanta
Alpharetta
Marriott $148.12 $139.59 6.1% 73.8% 66.0% 7.8% $109.37 $ 92.11 18.7% 34.72% 29.90% 482 bps
Bethesda
Marriott
Suites $161.18 $166.08 (3.0)% 61.9% 64.8% (2.9)% $ 99.71 $107.69 (7.4)% 23.00% 26.08% -308 bps
Boston
Westin $207.60 $203.85 1.8% 74.5% 73.3% 1.2% $154.60 $149.46 3.4% 24.59% 23.39% 120 bps
Hilton
Boston
Downtown $226.68 $220.59 2.8% 80.4% 76.0% 4.4% $182.26 $167.68 8.7% 31.89% 35.92% -403 bps
Hilton
Burlington $159.43 $156.57 1.8% 74.1% 73.8% 0.3% $118.16 $115.55 2.3% 39.87% 37.13% 274 bps
Renaissance
Charleston $191.27 $180.50 6.0% 87.5% 85.1% 2.4% $167.31 $153.58 8.9% 35.05% 34.36% 69 bps
Hilton
Garden Inn
Chelsea $231.99 $217.77 6.5% 95.9% 96.1% (0.2)% $222.51 $209.30 6.3% 45.34% 44.02% 132 bps
Chicago
Marriott $205.83 $200.80 2.5% 76.2% 74.1% 2.1% $156.86 $148.78 5.4% 23.40% 23.50% -10 bps
Chicago
Conrad $217.76 $212.28 2.6% 81.6% 80.6% 1.0% $177.61 $171.18 3.8% 32.14% 29.52% 262 bps
Courtyard
Denver
Downtown $168.42 $159.29 5.7% 83.4% 84.6% (1.2)% $140.47 $134.83 4.2% 44.89% 45.46% -57 bps
Courtyard
Fifth
Avenue $277.14 $274.04 1.1% 80.1% 91.7% (11.6)% $221.92 $251.29 (11.7)% 21.68% 30.96% -928 bps
Courtyard
Midtown
East $275.73 $269.79 2.2% 82.3% 86.7% (4.4)% $226.81 $233.91 (3.0)% 31.66% 34.59% -293 bps
Frenchman's
Reef $239.69 $228.17 5.0% 82.1% 78.7% 3.4% $196.78 $179.48 9.6% 20.09% 19.51% 58 bps
JW Marriott
Denver
Cherry
Creek $239.27 $227.24 5.3% 80.4% 76.4% 4.0% $192.39 $173.69 10.8% 30.38% 29.72% 66 bps
Los Angeles
Airport
Marriott $113.33 $109.11 3.9% 86.5% 86.7% (0.2)% $ 98.09 $ 94.64 3.6% 19.33% 18.49% 84 bps
Hilton
Minneapolis $145.56 $143.19 1.7% 72.3% 72.6% (0.3)% $105.21 $103.99 1.2% 26.86% 27.12% -26 bps
Oak Brook
Hills
Resort $122.44 $120.39 1.7% 56.8% 56.6% 0.2% $ 69.55 $ 68.12 2.1% 8.78% 9.69% -91 bps
Orlando
Airport
Marriott $ 99.85 $103.82 (3.8)% 75.5% 72.2% 3.3% $ 75.38 $ 74.97 0.5% 23.29% 23.53% -24 bps
Hotel Rex $187.88 $178.93 5.0% 84.4% 84.8% (0.4)% $158.66 $151.72 4.6% 30.99% 36.58% -559 bps
Salt Lake
City
Marriott $142.26 $134.07 6.1% 67.1% 66.4% 0.7% $ 95.51 $ 89.07 7.2% 31.54% 29.64% 190 bps
The Lodge at
Sonoma $254.13 $235.86 7.7% 74.2% 72.1% 2.1% $188.52 $170.05 10.9% 25.71% 21.81% 390 bps
Torrance
Marriott
South Bay $116.79 $110.53 5.7% 84.4% 83.5% 0.9% $ 98.57 $ 92.25 6.9% 25.13% 26.07% -94 bps
Vail
Marriott $243.94 $225.47 8.2% 67.7% 63.7% 4.0% $165.25 $143.72 15.0% 30.21% 27.82% 239 bps
Lexington
Hotel New
York $224.92 $205.70 9.3% 62.4% 94.8% (32.4)% $140.26 $195.01 (28.1)% 9.03% 35.99% -2696 bps
Westin San
Diego $153.50 $149.32 2.8% 82.7% 79.3% 3.4% $126.98 $118.40 7.2% 29.72% 30.03% -31 bps
Westin
Washington
D.C. City
Center $192.13 $193.77 (0.8)% 73.5% 73.2% 0.3% $141.19 $141.93 (0.5)% 31.35% 34.44% -309 bps
Renaissance
Worthington $170.73 $161.04 6.0% 65.4% 68.3% (2.9)% $111.70 $109.93 1.6% 30.68% 29.26% 142 bps
------ ------ ----- ---- ---- ------ ------ ------ ------ ----- ----- ----------
Total $181.03 $175.71 3.0% 75.5% 76.6% (1.1)% $136.62 $134.62 1.5% 25.79% 27.20% -141 bps
====== ====== ===== ==== ==== ====== ====== ====== ====== ===== ===== ==========
Total
Excluding
Torrance
(2) $183.85 $178.50 3.0% 75.1% 76.3% (1.2)% $138.11 $136.27 1.4% 25.80% 27.23% -143 bps
====== ====== ===== ==== ==== ====== ====== ====== ====== ===== ===== ==========
Total
Excluding
NY
Renovations
and
Torrance
(3) $176.37 $170.43 3.5% 75.7% 74.4% 1.3% $133.56 $126.79 5.3% 26.60% 26.15% 45 bps
====== ====== ===== ==== ==== ====== ====== ====== ====== ===== ===== ==========
(1) The pro forma operating data includes the operating results for each of
the Company's hotels assuming they were owned since January 1, 2012.
(2) Excludes the Torrance Marriott South Bay that was sold during 2013.
(3) Excludes three hotels in New York City under renovation during the year
ended December 31, 2013; the Lexington Hotel New York, Courtyard
Manhattan Midtown East and Courtyard Fifth Avenue as well as the Torrance
Marriott South Bay that was sold during 2013.
Hotel Adjusted EBITDA Reconciliation
Fourth Quarter 2013
-----------------------------------------------------------------------------
Plus: Plus: Plus: Equals:
Net Non-Cash Hotel
Total Income / Interest Adjustments Adjusted
Revenues (Loss) Depreciation Expense (1) EBITDA
--------- -------- -------------- ---------- ------------- -------------
Atlanta
Alpharetta
Marriott $ 4,306 $ 1,207 $ 404 $ -- $ -- $ 1,611
Bethesda
Marriott
Suites $ 3,743 $(1,028) $ 371 $ -- $ 1,534 $ 877
Boston
Westin $ 18,768 $ 2,743 $ 2,160 $ -- $ 3 $ 4,906
Hilton
Boston
Downtown $ 6,371 $ 255 $ 1,510 $ -- $ 42 $ 1,807
Hilton
Burlington $ 3,365 $ 325 $ 849 $ -- $ 23 $ 1,197
Renaissance
Charleston $ 3,207 $ 814 $ 405 $ -- $ (32) $ 1,187
Hilton
Garden Inn
Chelsea $ 3,879 $ 1,373 $ 502 $ -- $ -- $ 1,875
Chicago
Marriott $ 24,959 $ 395 $ 2,627 $ 3,233 $ (395) $ 5,860
Chicago
Conrad $ 6,655 $ 1,335 $ 958 $ -- $ -- $ 2,293
Courtyard
Denver
Downtown $ 2,325 $ 743 $ 269 $ -- $ -- $ 1,012
Courtyard
Fifth
Avenue $ 4,597 $ 45 $ 430 $ 852 $ 52 $ 1,379
Courtyard
Midtown
East $ 8,198 $ 1,719 $ 679 $ 976 $ -- $ 3,374
Frenchman's
Reef $ 13,868 $ (193) $ 1,601 $ 826 $ -- $ 2,234
JW Marriott
Denver
Cherry
Creek $ 5,595 $ 591 $ 515 $ 580 $ -- $ 1,686
Los Angeles
Airport
Marriott $ 13,950 $ (404) $ 1,127 $ 1,135 $ -- $ 1,858
Minneapolis
Hilton $ 11,462 $ (587) $ 1,963 $ 1,351 $ (133) $ 2,594
Oak Brook
Hills
Resort $ 4,376 $(1,059) $ 510 $ -- $ 107 $ (442)
Orlando
Airport
Marriott $ 5,251 $ (321) $ 794 $ 829 $ -- $ 1,302
Hotel Rex $ 1,520 $ 181 $ 233 $ -- $ -- $ 414
Salt Lake
City
Marriott $ 5,869 $ 17 $ 755 $ 624 $ -- $ 1,396
The Lodge at
Sonoma $ 5,375 $ 694 $ 372 $ 316 $ -- $ 1,382
Vail
Marriott $ 7,104 $ 1,524 $ 608 $ -- $ -- $ 2,132
Lexington
Hotel New
York $ 16,444 $ (172) $ 3,132 $ 1,781 $ (40) $ 4,701
Westin San
Diego $ 5,908 $ (726) $ 1,124 $ 715 $ 46 $ 1,159
Westin
Washington
D.C. City
Center $ 5,754 $ 1 $ 802 $ 778 $ 45 $ 1,626
Renaissance
Worthington $ 8,618 $ 1,172 $ 675 $ 753 $ 2 $ 2,602
-------- ------- --- --------- ------ --- -------- ------------
Total (2) $ 201,467 $ 10,644 $ 25,375 $ 14,749 $ 1,254 $ 52,007
======== ======= === ========= ====== === ======== ============
(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 favorable lease assets, and the non-cash
amortization of unfavorable contract liabilities.
(2) Excludes the Torrance Marriott South Bay that was sold during 2013.
Pro Forma Hotel Adjusted EBITDA Reconciliation
Fourth Quarter 2012 (1)
-----------------------------------------------------------------------------
Plus: Plus: Plus: Equals:
Net Non-Cash Hotel
Total Income / Interest Adjustments Adjusted
Revenues (Loss) Depreciation Expense (2) EBITDA
--------- -------- -------------- ---------- ------------- -------------
Atlanta
Alpharetta
Marriott $ 3,664 $ 652 $ 372 $ -- $ -- $ 1,024
Bethesda
Marriott
Suites $ 3,443 $(1,115) $ 479 $ -- $ 1,465 $ 829
Boston
Westin $ 18,369 $ 2,704 $ 1,938 $ -- $ 2 $ 4,644
Hilton
Boston
Downtown $ 5,256 $ (391) $ 1,745 $ -- $ 42 $ 1,396
Hilton
Burlington $ 3,281 $ 32 $ 1,031 $ -- $ 23 $ 1,086
Renaissance
Charleston $ 2,572 $ 479 $ 356 $ -- $ (29) $ 806
Hilton
Garden Inn
Chelsea $ 4,142 $ 1,667 $ 437 $ -- $ -- $ 2,104
Chicago
Marriott $ 24,452 $ 702 $ 3,128 $ 3,041 $ (365) $ 6,506
Chicago
Conrad $ 6,758 $ 1,184 $ 848 $ -- $ -- $ 2,032
Courtyard
Denver
Downtown $ 2,297 $ 789 $ 239 $ -- $ -- $ 1,028
Courtyard
Fifth
Avenue $ 4,953 $ 810 $ 283 $ 805 $ 48 $ 1,946
Courtyard
Midtown
East $ 7,754 $ 1,665 $ 535 $ 939 $ -- $ 3,139
Frenchman's
Reef $ 12,977 $ (598) $ 1,535 $ 783 $ -- $ 1,720
JW Marriott
Denver
Cherry
Creek $ 5,160 $ 494 $ 435 $ 567 $ -- $ 1,496
Los Angeles
Airport
Marriott $ 12,681 $ (403) $ 1,316 $ 1,061 $ -- $ 1,974
Minneapolis
Hilton $ 12,169 $ 402 $ 1,771 $ 1,303 $ (169) $ 3,307
Oak Brook
Hills
Resort $ 4,270 $ (76) $ 68 $ -- $ 111 $ 103
Orlando
Airport
Marriott $ 4,640 $ (431) $ 716 $ 785 $ -- $ 1,070
Hotel Rex $ 1,470 $ 253 $ 274 $ -- $ -- $ 527
Salt Lake
City
Marriott $ 5,229 $ 215 $ 690 $ 383 $ -- $ 1,288
The Lodge at
Sonoma $ 4,433 $ 660 $ 343 $ -- $ -- $ 1,003
Vail
Marriott $ 5,382 $ 513 $ 554 $ -- $ -- $ 1,067
Lexington
Hotel New
York $ 15,336 $ (850) $ 5,884 $ 1,808 $ 44 $ 6,886
Westin San
Diego $ 6,192 $ 265 $ 1,298 $ -- $ 47 $ 1,610
Westin
Washington
D.C. City
Center $ 6,235 $ 341 $ 1,523 $ -- $ 46 $ 1,910
Renaissance
Worthington $ 7,656 $ 826 $ 664 $ 715 $ 2 $ 2,207
-------- ------- --- --------- ------ --- -------- ------------
Total (3) $ 190,771 $ 10,789 $ 28,462 $ 12,190 $ 1,267 $ 52,833
======== ======= === ========= ====== === ======== ============
(1) The pro forma operating data includes the operating results for each the
Company's hotels assuming they were owned as of January 1, 2012 and
includes the operating results of the Company's Marriott-managed hotels
from October 6, 2012 to December 31, 2012 and all other hotels from
October 1, 2012 to December 31, 2012.
(2) The non-cash adjustments include expenses incurred by the hotels due to
the straight lining of the rent from ground lease obligations, the
non-cash amortization of our favorable lease assets and the non-cash
amortization of our unfavorable contract liabilities.
(3) Excludes the Torrance Marriott South Bay that was sold during 2013.
Hotel Adjusted EBITDA Reconciliation
Full Year 2013
------------------------------------------------------------------------------
Plus: Plus: Plus: Equals:
Net Non-Cash Hotel
Total Income / Interest Adjustments Adjusted
Revenues (Loss) Depreciation Expense (1) EBITDA
--------- --------- -------------- ---------- ------------- -------------
Atlanta
Alpharetta
Marriott $ 17,976 $ 4,620 $ 1,622 $ -- $ -- $ 6,242
Bethesda
Marriott
Suites $ 13,992 $ (4,616) $ 1,628 $ -- $ 6,206 $ 3,218
Boston
Westin $ 76,126 $ 10,175 $ 8,532 $ -- $ 9 $ 18,716
Hilton
Boston
Downtown $ 26,356 $ 2,418 $ 5,819 $ -- $ 167 $ 8,404
Hilton
Burlington $ 14,252 $ 2,215 $ 3,376 $ -- $ 91 $ 5,682
Renaissance
Charleston $ 12,410 $ 2,880 $ 1,596 $ -- $ (126) $ 4,350
Hilton
Garden Inn
Chelsea $ 14,081 $ 4,328 $ 2,056 $ -- $ -- $ 6,384
Chicago
Marriott $ 100,380 $ (269) $ 12,490 $ 12,851 $ (1,587) $ 23,485
Chicago
Conrad $ 26,706 $ 4,825 $ 3,759 $ -- $ -- $ 8,584
Courtyard
Denver
Downtown $ 9,770 $ 3,329 $ 1,057 $ -- $ -- $ 4,386
Courtyard
Fifth
Avenue $ 15,085 $ (1,953) $ 1,614 $ 3,396 $ 213 $ 3,270
Courtyard
Midtown
East $ 26,875 $ 2,048 $ 2,553 $ 3,908 $ -- $ 8,509
Frenchman's
Reef $ 62,439 $ 2,777 $ 6,465 $ 3,299 $ -- $ 12,541
JW Marriott
Denver
Cherry
Creek $ 22,139 $ 2,376 $ 2,001 $ 2,349 $ -- $ 6,726
Los Angeles
Airport
Marriott $ 58,608 $ 1,729 $ 5,099 $ 4,503 $ -- $ 11,331
Minneapolis
Hilton $ 50,097 $ 809 $ 7,779 $ 5,401 $ (532) $ 13,457
Oak Brook
Hills
Resort $ 22,412 $ 271 $ 1,265 $ -- $ 431 $ 1,967
Orlando
Airport
Marriott $ 20,365 $ (1,689) $ 3,126 $ 3,305 $ -- $ 4,742
Hotel Rex $ 6,274 $ 1,017 $ 927 $ -- $ -- $ 1,944
Salt Lake
City
Marriott $ 26,117 $ 3,450 $ 2,982 $ 1,806 $ -- $ 8,238
The Lodge at
Sonoma $ 21,355 $ 3,030 $ 1,475 $ 986 $ -- $ 5,491
Vail
Marriott $ 29,432 $ 6,471 $ 2,421 $ -- $ -- $ 8,892
Lexington
Hotel New
York $ 39,757 $(15,427) $ 12,142 $ 6,824 $ 52 $ 3,591
Westin San
Diego $ 28,095 $ 1,682 $ 4,309 $ 2,171 $ 187 $ 8,349
Westin
Washington
D.C. City
Center $ 25,981 $ (188) $ 5,034 $ 3,116 $ 182 $ 8,144
Renaissance
Worthington $ 32,608 $ 4,223 $ 2,768 $ 3,006 $ 8 $ 10,005
-------- -------- --- --------- ------ --------- ------------
Total (2) $ 799,688 $ 40,531 $ 103,895 $ 56,921 $ 5,301 $ 206,342
======== ======== === ========= ====== ========= ============
Total
Excluding
NY
Renovations
(3) $ 717,971 $ 55,863 $ 87,586 $ 42,793 $ 5,036 $ 190,972
======== ======== === ========= ====== ========= ============
(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 favorable lease assets, and the non-cash
amortization of unfavorable contract liabilities.
(2) Excludes the Torrance Marriott South Bay that was sold during 2013.
(3) Excludes three hotels in New York City under renovation during the year
ended December 31, 2013; the Lexington Hotel New York, Courtyard
Manhattan Midtown East and Courtyard Fifth Avenue.
Pro Forma Hotel Adjusted EBITDA Reconciliation
Full Year 2012 (1)
-----------------------------------------------------------------------------
Plus: Plus: Plus: Equals:
Net Non-Cash Hotel
Total Income / Interest Adjustments Adjusted
Revenues (Loss) Depreciation Expense (2) EBITDA
--------- -------- -------------- ---------- ------------- -------------
Atlanta
Alpharetta
Marriott $ 15,340 $ 3,237 $ 1,350 $ -- $ -- $ 4,587
Bethesda
Marriott
Suites $ 14,928 $(4,447) $ 2,073 $ -- $ 6,267 $ 3,893
Boston
Westin $ 72,755 $ 8,312 $ 8,700 $ -- $ 7 $ 17,019
Hilton
Boston
Downtown $ 24,225 $ 2,864 $ 5,671 $ -- $ 167 $ 8,702
Hilton
Burlington $ 14,000 $ 1,758 $ 3,349 $ -- $ 91 $ 5,198
Renaissance
Charleston $ 11,379 $ 2,512 $ 1,524 $ -- $ (126) $ 3,910
Hilton
Garden Inn
Chelsea $ 13,387 $ 3,999 $ 1,894 $ -- $ -- $ 5,893
Chicago
Marriott $ 96,735 $(1,663) $ 12,978 $ 13,003 $ (1,581) $ 22,737
Chicago
Conrad $ 25,580 $ 4,083 $ 3,469 $ -- $ -- $ 7,552
Courtyard
Denver
Downtown $ 9,393 $ 3,067 $ 1,028 $ 175 $ -- $ 4,270
Courtyard
Fifth
Avenue $ 17,202 $ (17) $ 1,693 $ 3,443 $ 207 $ 5,326
Courtyard
Midtown
East $ 27,787 $ 3,291 $ 2,372 $ 3,949 $ -- $ 9,612
Frenchman's
Reef $ 55,752 $ 1,086 $ 6,421 $ 3,372 $ -- $ 10,879
JW Marriott
Denver
Cherry
Creek $ 20,076 $ 1,686 $ 1,867 $ 2,414 $ -- $ 5,967
Los Angeles
Airport
Marriott $ 56,728 $ 173 $ 5,800 $ 4,514 $ -- $ 10,487
Minneapolis
Hilton $ 49,075 $ 835 $ 7,622 $ 5,524 $ (671) $ 13,310
Oak Brook
Hills
Resort $ 21,946 $ (863) $ 2,504 $ -- $ 486 $ 2,127
Orlando
Airport
Marriott $ 20,047 $(1,665) $ 3,024 $ 3,359 $ -- $ 4,718
Hotel Rex $ 5,960 $ 1,288 $ 892 $ -- $ -- $ 2,180
Salt Lake
City
Marriott $ 24,136 $ 2,613 $ 2,876 $ 1,664 $ -- $ 7,153
The Lodge at
Sonoma $ 18,994 $ 2,637 $ 1,506 $ -- $ -- $ 4,143
Vail
Marriott $ 25,503 $ 4,731 $ 2,363 $ -- $ -- $ 7,094
Lexington
Hotel New
York $ 53,905 $(1,238) $ 13,798 $ 6,695 $ 145 $ 19,400
Westin San
Diego $ 26,288 $ 3,489 $ 4,217 $ -- $ 189 $ 7,895
Westin
Washington
D.C. City
Center $ 26,196 $ 3,889 $ 4,950 $ -- $ 182 $ 9,021
Renaissance
Worthington $ 32,140 $ 3,460 $ 2,871 $ 3,061 $ 11 $ 9,403
-------- ------- --- --------- ------ --------- ------------
Total (3) $ 779,457 $ 49,117 $ 106,812 $ 51,173 $ 5,374 $ 212,274
======== ======= === ========= ====== ========= ============
Total
Excluding
NY
Renovations
(4) $ 680,563 $ 47,081 $ 88,949 $ 37,086 $ 5,022 $ 177,936
======== ======= === ========= ====== ========= ============
(1) The pro forma operating data includes the operating results for each of
the Company's hotels assuming they were owned since January 1, 2012.
(2) The non-cash adjustments include expenses incurred by the hotels due to
the straight lining of the rent from ground lease obligations, the
non-cash amortization of our favorable lease assets and the non-cash
amortization of our unfavorable contract liabilities.
(3) Excludes the Torrance Marriott South Bay that was sold during 2013.
(4) Excludes three hotels in New York City under renovation during the year
ended December 31, 2013; the Lexington Hotel New York, Courtyard
Manhattan Midtown East and Courtyard Fifth Avenue.
SOURCE DiamondRock Hospitality Company
Source: online.wsj.com
Reseacher: Felix sun
Filed Under: Companies
