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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Lasalle Hotel Properties (delisted) | NYSE:LHO | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 32.06 | 0 | 01:00:00 |
LaSalle Hotel Properties (NYSE: LHO) today announced results for the quarter ended September 30, 2016. The Company’s results include the following:
Third Quarter Year-to-Date 2016 2015 % Var. 2016 2015 % Var. ($'s in millions except per share/unit data) Net income attributable to common shareholders $ 152.1 $ 44.4 242.6 % $ 213.3 $ 99.9 113.5 % Net income attributable to common shareholders per diluted share $ 1.34 $ 0.39 243.6 % $ 1.88 $ 0.88 113.6 % RevPAR(1) $ 224.98 $ 215.77 4.3 % $ 207.72 $ 202.79 2.4 % Hotel EBITDA Margin(1) 36.8 % 36.5 % 34.5 % 34.1 % Hotel EBITDA Margin Growth(1) 29 bps 35 bps Total Revenue $ 326.9 $ 329.7 -0.8 % $ 938.1 $ 921.9 1.8 % EBITDA(1) $ 219.1 $ 106.5 105.7 % $ 409.6 $ 285.3 43.6 % Adjusted EBITDA(1) $ 115.3 $ 114.6 0.6 % $ 310.8 $ 297.0 4.6 % FFO(1) $ 95.7 $ 90.7 5.5 % $ 253.4 $ 235.0 7.8 % Adjusted FFO(1) $ 96.4 $ 98.8 -2.4 % $ 259.1 $ 246.7 5.0 % FFO per diluted share/unit(1) $ 0.84 $ 0.80 5.0 % $ 2.24 $ 2.07 8.2 % Adjusted FFO per diluted share/unit(1) $ 0.85 $ 0.87 -2.3 % $ 2.29 $ 2.18 5.0 % (1) See tables later in this press release, which list adjustments that reconcile net income attributable to common shareholders to earnings before interest, taxes, depreciation and amortization (“EBITDA”), adjusted EBITDA, funds from operations attributable to common shareholders and unitholders (“FFO”), FFO per share/unit, adjusted FFO, adjusted FFO per share/unit and pro forma 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 income later in this press release. Room revenue per available room ("RevPAR") is presented on a pro forma basis to reflect hotels in the Company's current portfolio. See "Statistical Data for the Hotels - Pro Forma" later in this press release.“Our portfolio performed well in a slow growth operating environment, with softening demand and increasing hotel supply. We benefited from the recovery of business at Park Central Hotel New York and WestHouse Hotel New York, and we are proud that our teams continue to operate with best-in-class efficiency across the portfolio, as evidenced by expense growth being limited to less than one percent year-to-date, excluding Park Central Hotel New York and WestHouse Hotel New York,” said Michael D. Barnello, President and Chief Executive Officer of LaSalle Hotel Properties.
“Following the disposition of two non-core assets during the third quarter, the Company now has an even stronger balance sheet, with a low debt-to-EBITDA ratio, an excellent quality portfolio primarily in core locations, and a well-covered dividend providing a high yield,” added Mr. Barnello.
Park Central Hotel New York and WestHouse Hotel New York Recovery
Excluding Park Central Hotel New York and WestHouse Hotel New York from the third quarter 2016 and the comparable period in 2015, the Company’s third quarter RevPAR grew by 1.5 percent and its hotel EBITDA margin decreased by 50 basis points to 37.6 percent. During the third quarter, the Company regained $5.6 million of the $7.2 million of lost EBITDA from the comparable prior year period.
Third Quarter Results
Year-to-Date Results
Asset Sales
In July, the Company completed two non-core asset sales for $245.0 million. Proceeds from both transactions were used to reduce borrowings on the Company’s senior unsecured credit facility and for general corporate purposes.
Capital Investments
During the quarter, the Company invested $17.5 million of capital in its hotels, which was primarily maintenance expenditures. A portion of the capital investment during the quarter was for deposits on upcoming room renovations at L’Auberge Del Mar and Embassy Suites Philadelphia Center City.
Balance Sheet
As of September 30, 2016, the Company had total outstanding debt of $1.1 billion. Total net debt to trailing 12 month Corporate EBITDA (as defined in the financial covenant section of the Company’s senior unsecured credit facility) was 2.8 times, as of September 30, 2016 and its fixed charge coverage ratio was 5.8 times. For the third quarter, the Company’s weighted average interest rate was 2.6 percent, compared to 3.0 percent during the same prior year period. As of September 30, 2016, the Company had $135.0 million of cash and cash equivalents on its balance sheet and capacity of $772.5 million available on its credit facilities.
The Company did not acquire any common shares during the third quarter of 2016 or to date during the fourth quarter of 2016. The Company has $69.8 million of capacity remaining in its share repurchase program.
Dividend
On September 15, 2016, the Company declared a third quarter 2016 dividend of $0.45 per common share of beneficial interest. The dividend represents an annual run rate of $1.80 per share and a 7.2 percent yield based on the closing share price on October 18, 2016.
Earnings Call
The Company will conduct its quarterly conference call on Thursday, October 20, 2016 at 11:00 AM eastern time. To participate in the conference call, please dial (800) 723-6604. Additionally, a live webcast of the conference call will be available through the Company’s website. A replay of the conference call webcast will also be archived and available online through the Investor Relations section of the Company’s website.
About LaSalle Hotel Properties
LaSalle Hotel Properties is a leading multi-operator real estate investment trust. The Company owns 46 properties, which are upscale, full-service hotels, totaling approximately 11,450 guest rooms in 13 markets in nine 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 groups, including Hilton Hotels Corporation, Marriott International, Outrigger Lodging Services, Noble House Hotels & Resorts, Hyatt Hotels Corporation, Benchmark Hospitality, Two Roads Hospitality, Davidson Hotel Company, Kimpton Hotel & Restaurant Group, LLC, Accor, 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," “may,” “plan,” “seek,” “should,” or similar expressions. Forward-looking statements in this press release include, among others, statements about the Company’s asset management strategies, use of sale proceeds and capital expenditure program. 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) risks associated with the hotel industry, including competition for guests and meetings from other hotels and alternative lodging companies, increases in wages, energy costs and other operating costs, potential unionization or union disruption, actual or threatened terrorist attacks, any type of flu or disease-related pandemic and downturns in general and local economic conditions, (ii) the availability and terms of financing and capital and the general volatility of securities markets, (iii) the Company’s dependence on third-party managers of its hotels, including its inability to implement strategic business decisions directly, (iv) risks associated with the real estate industry, including environmental contamination and costs of complying with the Americans with Disabilities Act of 1990, as amended, and similar laws, (v) interest rate increases, (vi) the possible failure of the Company to maintain its qualification 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, (ix) the risk of a material failure, inadequacy, interruption or security failure of the Company’s or the hotel managers’ information technology networks and systems, and (x) 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 Income(in thousands, except share data)
(unaudited)
For the three months ended For the nine months ended September 30, September 30, 2016 2015 2016 2015 Revenues: Hotel operating revenues: Room $ 237,757 $ 233,993 $ 664,463 $ 647,031 Food and beverage 61,718 68,688 197,090 205,083 Other operating department 25,892 24,472 70,992 64,049 Total hotel operating revenues 325,367 327,153 932,545 916,163 Other income 1,569 2,557 5,582 5,736 Total revenues 326,936 329,710 938,127 921,899 Expenses: Hotel operating expenses: Room 59,342 56,283 170,596 161,002 Food and beverage 44,307 48,268 137,209 142,455 Other direct 4,562 4,960 13,218 13,807 Other indirect 78,734 78,070 230,932 226,949 Total hotel operating expenses 186,945 187,581 551,955 544,213 Depreciation and amortization 48,022 46,208 144,491 135,002 Real estate taxes, personal property taxes and insurance 13,913 17,045 47,023 49,331 Ground rent 4,570 4,491 12,491 12,164 General and administrative 6,076 6,173 19,549 18,941 Acquisition transaction costs 0 55 0 499 Other expenses 1,007 9,149 5,512 12,753 Total operating expenses 260,533 270,702 781,021 772,903 Operating income 66,403 59,008 157,106 148,996 Interest income 167 1,294 3,497 1,301 Interest expense (10,332 ) (13,250 ) (33,681 ) (40,790 ) Income before income tax (expense) benefit 56,238 47,052 126,922 109,507 Income tax (expense) benefit (3,109 ) 490 (5,099 ) (216 ) Income before net gain on sale of property and sale of note receivable 53,129 47,542 121,823 109,291 Net gain on sale of property and sale of note receivable 104,549 0 104,549 0 Net income 157,678 47,542 226,372 109,291 Net income attributable to noncontrolling interests: Noncontrolling interests in consolidated entities 0 0 (8 ) (8 ) Noncontrolling interests of common units in Operating Partnership (203 ) (75 ) (299 ) (229 ) Net income attributable to noncontrolling interests (203 ) (75 ) (307 ) (237 ) Net income attributable to the Company 157,475 47,467 226,065 109,054 Distributions to preferred shareholders (5,405 ) (3,043 ) (12,802 ) (9,127 ) Net income attributable to common shareholders $ 152,070 $ 44,424 $ 213,263 $ 99,927 LASALLE HOTEL PROPERTIES Consolidated Statements of Operations and Comprehensive Income - Continued(in thousands, except share data)
(unaudited)
For the three months ended For the nine months ended September 30, September 30, 2016 2015 2016 2015 Earnings per Common Share - Basic: Net income attributable to common shareholders excluding amounts attributable to unvested restricted shares $ 1.34 $ 0.39 $ 1.89 $ 0.88 Earnings per Common Share - Diluted: Net income attributable to common shareholders excluding amounts attributable to unvested restricted shares $ 1.34 $ 0.39 $ 1.88 $ 0.88 Weighted average number of common shares outstanding: Basic 112,811,403 112,731,358 112,781,732 112,702,693 Diluted 113,159,844 113,137,284 113,138,897 113,113,859 Comprehensive Income: Net income $ 157,678 $ 47,542 $ 226,372 $ 109,291 Other comprehensive income: Unrealized gain (loss) on interest rate derivative instruments 3,172 (4,245 ) (17,051 ) (8,617 ) Reclassification adjustment for amounts recognized in net income 1,637 1,071 5,147 3,210 162,487 44,368 214,468 103,884 Comprehensive income attributable to noncontrolling interests: Noncontrolling interests in consolidated entities 0 0 (8 ) (8 ) Noncontrolling interests of common units in Operating Partnership (209 ) (71 ) (284 ) (221 ) Comprehensive income attributable to noncontrolling interests (209 ) (71 ) (292 ) (229 ) Comprehensive income attributable to the Company $ 162,278 $ 44,297 $ 214,176 $ 103,655 LASALLE HOTEL PROPERTIES FFO and EBITDA(in thousands, except share/unit data)
(unaudited)
For the three months ended For the nine months ended September 30, September 30, 2016 2015 2016 2015 Net income attributable to common shareholders $ 152,070 $ 44,424 $ 213,263 $ 99,927 Depreciation 47,888 46,080 144,088 134,622 Amortization of deferred lease costs 82 72 244 219 Noncontrolling interests: Noncontrolling interests in consolidated entities 0 0 8 8 Noncontrolling interests of common units in Operating Partnership 203 75 299 229 Less: Gain on sale of property less costs associated with sale of note receivable (104,549 ) 0 (104,549 ) 0 FFO attributable to common shareholders and unitholders $ 95,694 $ 90,651 $ 253,353 $ 235,005 Pre-opening, management transition and severance expenses 231 7,562 4,295 9,712 Acquisition transaction costs 0 55 0 499 Non-cash ground rent 472 483 1,420 1,463 Adjusted FFO attributable to common shareholders and unitholders $ 96,397 $ 98,751 $ 259,068 $ 246,679 Weighted average number of common shares and units outstanding: Basic 112,956,626 112,876,581 112,926,955 112,920,964 Diluted 113,305,067 113,282,507 113,284,120 113,332,130 FFO attributable to common shareholders and unitholders per diluted share/unit $ 0.84 $ 0.80 $ 2.24 $ 2.07 Adjusted FFO attributable to common shareholders and unitholders per diluted share/unit $ 0.85 $ 0.87 $ 2.29 $ 2.18 For the three months ended For the nine months ended September 30, September 30, 2016 2015 2016 2015 Net income attributable to common shareholders $ 152,070 $ 44,424 $ 213,263 $ 99,927 Interest expense 10,332 13,250 33,681 40,790 Income tax expense (benefit) 3,109 (490 ) 5,099 216 Depreciation and amortization 48,022 46,208 144,491 135,002 Noncontrolling interests: Noncontrolling interests in consolidated entities 0 0 8 8 Noncontrolling interests of common units in Operating Partnership 203 75 299 229 Distributions to preferred shareholders 5,405 3,043 12,802 9,127 EBITDA $ 219,141 $ 106,510 $ 409,643 $ 285,299 Pre-opening, management transition and severance expenses 231 7,562 4,295 9,712 Acquisition transaction costs 0 55 0 499 Gain on sale of property less costs associated with sale of note receivable (104,549 ) 0 (104,549 ) 0 Non-cash ground rent 472 483 1,420 1,463 Adjusted EBITDA $ 115,295 $ 114,610 $ 310,809 $ 296,973 Corporate expense 6,949 7,969 21,358 22,617 Interest and other income (1,736 ) (3,849 ) (8,862 ) (7,035 ) Pro forma hotel level adjustments, net(1) (1,495 ) (4,136 ) (11,750 ) (10,375 ) Hotel EBITDA $ 119,013 $ 114,594 $ 311,555 $ 302,180 (1) Pro forma to include the results of operations of the Park Central San Francisco and The Marker Waterfront Resort under previous ownership for the comparable period in 2015, and exclude the Mason & Rook Hotel for the period the hotel was closed for renovation in 2016 and the comparable period in 2015. Pro forma excludes Indianapolis Marriott Downtown due to its sale in July 2016. LASALLE HOTEL PROPERTIES Hotel Operational DataSchedule of Property Level Results - Pro Forma(1)
(in thousands)
(unaudited)
For the three months ended For the nine months ended September 30, September 30, 2016 2015 2016 2015 Revenues: Room $ 237,183 $ 227,371 $ 648,721 $ 630,588 Food and beverage 61,246 64,145 186,262 193,240 Other 25,387 22,741 68,213 61,166 Total hotel revenues 323,816 314,257 903,196 884,994 Expenses: Room 59,083 55,522 167,444 158,594 Food and beverage 43,997 45,491 131,559 136,341 Other direct 4,450 4,451 12,454 12,611 General and administrative 21,986 20,711 63,619 61,164 Information and telecommunications systems 4,237 4,232 12,792 12,363 Sales and marketing 20,885 19,646 61,828 59,460 Management fees 11,389 10,164 28,893 28,675 Property operations and maintenance 9,863 9,735 28,926 28,780 Energy and utilities 7,733 7,821 21,197 21,881 Property taxes 13,895 14,889 42,471 42,946 Other fixed expenses 7,285 7,001 20,458 19,999 Total hotel expenses 204,803 199,663 591,641 582,814 Hotel EBITDA $ 119,013 $ 114,594 $ 311,555 $ 302,180 Hotel EBITDA Margin 36.8 % 36.5 % 34.5 % 34.1 % (1) This schedule includes the operating data for the three and nine months ended September 30, 2016 for all properties owned by the Company as of September 30, 2016. Park Central San Francisco and The Marker Waterfront Resort are included for the full first quarter in both 2015 and 2016. Mason & Rook Hotel is excluded from the first quarter in both 2015 and 2016 because the hotel was closed for renovation during the entire first quarter of 2016. Indianapolis Marriott Downtown is excluded from all periods presented due to its sale in July 2016. LASALLE HOTEL PROPERTIESStatistical Data for the Hotels - Pro Forma(1)
(unaudited)
For the three months ended For the nine months ended September 30, September 30, 2016 2015 2016 2015 Total Portfolio Occupancy 89.5 % 86.2 % 85.0 % 83.0 % Increase 3.9 % 2.4 % ADR $ 251.26 $ 250.29 $ 244.36 $ 244.20 Increase 0.4 % 0.1 % RevPAR $ 224.98 $ 215.77 $ 207.72 $ 202.79 Increase 4.3 % 2.4 % For the three months For the nine months ended September 30, ended September 30, 2016 2016 Market Detail RevPAR Variance % Boston 3.6% 0.3% Chicago 1.9% 0.5% Key West 9.0% 5.1% Los Angeles 7.8% 14.2% New York 29.9% 7.6% Other(2)-1.4%
-4.1%
Philadelphia 16.5% 5.9%San Diego Downtown
8.1%
1.2%
San Francisco -7.7% 0.4% Seattle -7.1% -3.6% Washington, DC(3) 5.9% 2.9% (1) Pro forma to include the results of operations of the Park Central San Francisco and The Marker Waterfront Resort under previous ownership for the comparable period in 2015, and exclude the Mason & Rook Hotel for the period the hotel was closed for renovation in 2016 and the comparable period in 2015. Pro forma to exclude results of operations of the Indianapolis Marriott Downtown due to its sale in July 2016.(2) Other includes The Heathman Hotel in Portland, OR, Chaminade Resort in Santa Cruz, CA, Lansdowne Resort in Lansdowne, VA, L’Auberge Del Mar in Del Mar, CA, and Hilton San Diego Resort and Paradise Point Resort in San Diego, CA.
(3) For the three months ended September 30, 2016 and 2015, Washington, DC RevPAR includes the Mason & Rook Hotel. However, for the nine months ended September 30, 2016 and 2015, the Mason & Rook Hotel is excluded from the three months ended March 31, 2016 and 2015, due to the hotel closure and renovation in 2016.
Non-GAAP Financial Measures
FFO, EBITDA and Hotel EBITDA
The Company considers the non-GAAP measures of FFO (including FFO per share/unit), 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 April 2002, as revised in 2011, defines FFO as net income or loss (computed in accordance with GAAP), excluding gains or losses from sales of properties and items classified by GAAP as extraordinary, plus real estate-related depreciation and amortization and impairment writedowns, and after comparable adjustments for the Company's portion of these items related to unconsolidated entities and joint ventures. The Company computes FFO consistent with standards established by NAREIT, which may not be comparable to FFO reported by other REITs that do not define the term in accordance with the current NAREIT definition or that interpret the current NAREIT definition differently than the Company.
With respect to FFO, the Company believes that excluding the effect of extraordinary items, real estate-related depreciation and amortization and impairments, 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. The Company believes property-level results provide investors with supplemental information on the ongoing operational performance of its hotels and effectiveness of the third-party management companies operating its business on a property-level basis.
FFO, EBITDA and hotel EBITDA do not represent cash generated from operating activities as determined by GAAP and should not be considered as alternatives to net income or loss, 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/unit) and adjusted EBITDA, which adjusts for certain additional items including gains on sale of property and impairment losses (to the extent included in EBITDA), 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.
View source version on businesswire.com: http://www.businesswire.com/news/home/20161019006444/en/
LaSalle Hotel PropertiesKenneth G. Fuller or Max D. Leinweber , 301-941-1500
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