LaSalle Hotel Properties Reports First Quarter 2013 Results

LaSalle Hotel Properties Reports First Quarter 2013 Results

Company reports strong first quarter results with adjusted FFO per share growth of 29 percent

BETHESDA, Md.--(BUSINESS WIRE)-- LaSalle Hotel Properties (NYS: LHO) today announced results for the quarter ended March 31, 2013. The Company's results include the following:

       
First Quarter
2013 2012

($'s in millions except

per share/unit data)

 

Entire Portfolio (Including Park Central Hotel)

Total Revenue $ 191.7 $ 172.3
EBITDA(1) $ 39.8 $ 30.2
Adjusted EBITDA(1) $ 39.8 $ 34.0
FFO(1) $ 25.7 $ 14.0
Adjusted FFO(1) $ 25.7 $ 17.8
FFO per diluted share/unit(1) $ 0.27 $ 0.16
Adjusted FFO per diluted share/unit(1) $ 0.27 $ 0.21
Net loss attributable to common shareholders $ (7.4) $ (16.1)
Net loss attributable to common shareholders per diluted share $ (0.08) $ (0.19)
 

Portfolio excluding Park Central Hotel

RevPAR $ 134.64 $ 128.10
RevPAR growth 5.1%
Hotel EBITDA Margin 23.1%
Hotel EBITDA Margin growth

 

33 bps

 

Entire Portfolio (Including Park Central Hotel)

RevPAR $ 132.89 $ 128.95
RevPAR growth 3.0%
Hotel EBITDA Margin 22.2%
Hotel EBITDA Margin growth

 

11 bps

 
 
(1) See tables later in press release, which list adjustments that reconcile net loss to earnings before interest, taxes, depreciation and amortization ("EBITDA"), adjusted EBITDA, funds from operations ("FFO"), FFO per share/unit, adjusted FFO, adjusted FFO per share/unit and hotel EBITDA. EBITDA, adjusted EBITDA, FFO, FFO per share/unit, adjusted FFO, adjusted FFO per share/unit and hotel EBITDA are non-GAAP financial measures. See further discussion of these non-GAAP measures and reconciliations to net loss later in this press release.
 

First Quarter Highlights

Results excluding Park Central Hotel

  • RevPAR excluding Park Central: Room revenue per available room ("RevPAR") for the quarter ended March 31, 2013 increased 5.1 percent to $134.64, as a result of a 1.8 percent increase in average daily rate ("ADR") to $186.97 and a 3.3 percent increase in occupancy to 72.0 percent.
  • Hotel EBITDA Margin excluding Park Central: The Company's hotel EBITDA margin for the first quarter was 23.1 percent, a 33 basis point improvement compared to the comparable prior year period.

Entire Portfolio Results

  • RevPAR: RevPAR for the quarter ended March 31, 2013 increased 3.0 percent to $132.89, as a result of a 3.9 percent increase in ADR to $186.11 and a 0.8 percent decrease in occupancy to 71.4 percent.
  • Hotel EBITDA Margin: The Company's hotel EBITDA margin for the first quarter was 22.2 percent, an 11 basis point increase compared to the comparable prior year period.
  • Adjusted EBITDA: The Company's adjusted EBITDA was $39.8 million, an increase of 17.1 percent over the first quarter of 2012.
  • Adjusted FFO: The Company generated first quarter adjusted FFO of $25.7 million, or $0.27 per diluted share/unit, compared to $17.8 million or $0.21 per diluted share/unit for the comparable prior year period, an increase of 28.6 percent in adjusted FFO per diluted share/unit.
  • Capital Markets: During the quarter, the Company issued 4,400,000 of 6.375 percent Series I Cumulative Redeemable Preferred Shares. The Company also announced the redemption of 4,000,000 of its 7.25 percent Series G Cumulative Redeemable Preferred Shares.
  • Capital Investments: The Company invested $16.3 million of capital in its hotels, including the following projects:
    • The completion of the guestroom renovations at Hotel Monaco San Francisco, Hotel Madera in Washington, DC and Hotel Deca in Seattle, WA; and
    • The continuation of the Park Central Hotel and Westhouse renovation in New York City.
  • Dividends: On March 15, 2013, the Company declared a first quarter 2013 dividend of $0.20 per common share of beneficial interest.

"We were pleased with the results of the first quarter," said Michael D. Barnello, President and Chief Executive Officer of LaSalle Hotel Properties. "Our Portfolio's RevPAR performed in line with our expectations, while adjusted EBITDA and adjusted FFO were ahead of expectations and grew substantially year-over-year. Furthermore, we were able to issue preferred equity at a record low coupon and reduce our overall cost of capital."

Balance Sheet

As of March 31, 2013, the Company had total outstanding debt of $1.15 billion, including $51.0 million outstanding on its senior unsecured credit facility. Total net debt to trailing 12 month Corporate EBITDA (as defined in the Company's senior unsecured credit facility) was 3.9 times as of March 31, 2013 and its fixed charge coverage ratio was 3.1 times. For the first quarter, the Company's weighted average interest rate was 4.4 percent. As of March 31, 2013, the Company had $37.7 million of cash and cash equivalents on its balance sheet and capacity of $721.7 million available on its credit facilities.

Subsequent Events

On April 5, 2013, the Company redeemed 4,000,000 of the 6,348,888 outstanding 7.25% Series G Preferred Shares.

On April 8, 2013, the Company provided notice to the servicer of the $59.9 million mortgage secured by Hotel Solamar of its intent to pay off the mortgage on June 3, 2013. The mortgage carries an interest rate of 5.49 percent and the Company expects to fund the mortgage pay off with proceeds from its senior unsecured credit facility, which has an interest rate of 1.95 percent based on the current leverage ratio.

2013 Second Quarter Outlook

Based on the portfolio's performance quarter-to-date, the Company expects second quarter RevPAR, excluding the Park Central Hotel, to increase 5.0 percent to 7.0 percent. The Company expects its portfolio, including the Park Central Hotel, to generate adjusted EBITDA of $90.0 million to $93.0 million and adjusted FFO per share/unit of $0.70 to $0.73.

2013 Outlook

The Company maintains its 2013 outlook, which was provided in conjunction with its reporting of 2012 results in February, 2013. The Company's financial expectations for 2013 remain as follows:

   
Current Outlook
Low-end   High-end

($'s in millions except

per share/unit data)

 
 
 

Excluding Park Central Hotel

RevPAR growth 3.0% 6.0%
Hotel EBITDA Margins 31.4% 32.4%
Hotel EBITDA Margin Change

 

0 bps

 

100 bps

Including Park Central Hotel

RevPAR growth 0.0% 3.0%
Hotel EBITDA Margins 31.5% 32.5%
Hotel EBITDA Margin Change

 

-50 bps

 

50 bps

 
 
 
 

Entire Portfolio (Including Park Central Hotel)

Adjusted EBITDA $ 275.0 $ 295.0
Adjusted FFO $ 195.0 $ 214.0
Adjusted FFO per diluted share/unit $ 2.03 $ 2.23
Income Tax Expenses $ 4.5 $ 5.5
 

Capital Investments

Portfolio Excluding Park Central $ 70.0 $ 75.0
Park Central $ 60.0 $ 70.0
Portfolio Including Park Central $ 130.0 $ 145.0
 

Earnings Call

The Company will conduct its quarterly conference call on Thursday, April 18, 2013 at 10:00 AM EDT. To participate in the conference call, please dial (888) 663-2254. Additionally, a live webcast of the conference call will be available through the Company's website. To access, log on to http://www.lasallehotels.com. A replay of the conference call will be archived and available online through the Investor Relations section of http://www.lasallehotels.com.

LaSalle Hotel Properties is a leading multi-operator real estate investment trust. The Company owns 40 hotels and a mezzanine loan secured by two hotels in Santa Monica, CA. The properties are upscale, full-service hotels, totaling more than 10,600 guest rooms in 13 markets in 9 states and the District of Columbia. The Company focuses on owning, redeveloping and repositioning upscale, full-service hotels located in urban, resort and convention markets. LaSalle Hotel Properties seeks to grow through strategic relationships with premier lodging companies, including Westin Hotels and Resorts, Hilton Hotels Corporation, Outrigger Lodging Services, Noble House Hotels & Resorts, Hyatt Hotels Corporation, Benchmark Hospitality, White Lodging Services Corporation, Thompson Hotels, Davidson Hotel Company, Denihan Hospitality Group, the Kimpton Hotel & Restaurant Group, LLC, Accor, Destination Hotels & Resorts, HEI Hotels & Resorts, JRK Hotel Group, Inc., Viceroy Hotel Group, Highgate Hotels and Access Hotels & Resorts.

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 the Company's outlook for capital investments. You should not rely on forward-looking statements since they involve known and unknown risks, uncertainties and other factors that are, in some cases, beyond the Company's control and which could materially affect actual results, performances or achievements. Factors that may cause actual results to differ materially from current expectations include, but are not limited to, (i) the Company's dependence on third-party managers of its hotels, including its inability to implement strategic business decisions directly, (ii) risks associated with the hotel industry, including competition, increases in wages, energy costs and other operating costs, actual or threatened terrorist attacks, downturns in general and local economic conditions and cancellation of or delays in the completion of anticipated demand generators, (iii) the availability and terms of financing and capital and the general volatility of securities markets, (iv) risks associated with the real estate industry, including environmental contamination and costs of complying with the Americans with Disabilities Act and similar laws, (v) interest rate increases, (vi) the possible failure of the Company to qualify as a REIT and the risk of changes in laws affecting REITs, (vii) the possibility of uninsured losses, (viii) risks associated with redevelopment and repositioning projects, including delays and cost overruns and (ix) the risk factors discussed in the Company's Annual Report on Form 10-K as updated in its Quarterly Reports. Accordingly, there is no assurance that the Company's expectations will be realized. Except as otherwise required by the federal securities laws, the Company disclaims any obligation or undertaking to publicly release any updates or revisions to any forward-looking statement contained herein (or elsewhere) to reflect any change in the Company's expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.

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 and Comprehensive Loss

(in thousands, except share data)

(unaudited)

 
 
    For the three months ended
March 31,
2013     2012
Revenues:
Hotel operating revenues:
Room $ 126,988 $ 114,692
Food and beverage 49,846 44,615
Other operating department   13,384     11,856  
Total hotel operating revenues 190,218 171,163
Other income   1,486     1,156  
Total revenues   191,704     172,319  
Expenses:
Hotel operating expenses:
Room 37,584 33,853
Food and beverage 37,304 34,262
Other direct 5,022 4,626
Other indirect   53,735     48,041  
Total hotel operating expenses 133,645 120,782
Depreciation and amortization 33,121 30,152
Real estate taxes, personal property taxes and insurance 12,354 10,811
Ground rent 2,495 1,776
General and administrative 5,147 4,614
Acquisition transaction costs 0 3,594
Other expenses   641     551  
Total operating expenses   187,403     172,280  
Operating income 4,301 39
Interest income 2,369 10
Interest expense   (14,017 )   (11,778 )
Loss before income tax benefit (7,347 ) (11,729 )
Income tax benefit   5,017     2,992  
Net loss (2,330 ) (8,737 )
Noncontrolling interests of common units in Operating Partnership   0     22  
Net loss attributable to the Company (2,330 ) (8,715 )
Distributions to preferred shareholders   (5,065 )   (7,402 )
Net loss attributable to common shareholders $ (7,395 ) $ (16,117 )
 
 
LASALLE HOTEL PROPERTIES
Consolidated Statements of Operations and Comprehensive Loss - Continued

(in thousands, except share data)

(unaudited)

 
 
    For the three months ended
March 31,
2013     2012
Earnings per Common Share - Basic:
Net loss attributable to common shareholders excluding amounts attributable to unvested restricted shares $ (0.08 ) $ (0.19 )
Earnings per Common Share - Diluted:
Net loss attributable to common shareholders excluding amounts attributable to unvested restricted shares $ (0.08 ) $ (0.19 )
Weighted average number of common shares outstanding:
Basic 95,166,029 84,499,856
Diluted 95,166,029 84,499,856
 
Comprehensive Loss:
Net loss $ (2,330 ) $ (8,737 )
Other comprehensive income:
Unrealized gain on interest rate derivative instruments   1,519     0  
Comprehensive loss (811 ) (8,737 )
Noncontrolling interests of common units in Operating Partnership   (5 )   22  
Comprehensive loss attributable to the Company $ (816 ) $ (8,715 )
 
 
LASALLE HOTEL PROPERTIES
FFO and EBITDA

(in thousands, except share/unit data)

(unaudited)

 
 
    For the three months ended
March 31,
2013     2012
Net loss attributable to common shareholders $ (7,395

Increase your money and finance knowledge from home

Bonds for Beginners

Learn about fixed income investments.

View Course »

Professional Vs Do it Yourself Investing

Should you get advice or DYI?

View Course »

Add a Comment

*0 / 3000 Character Maximum