Winston (NYSE:WXH)
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Winston Hotels, Inc. (NYSE: WXH), a real estate
investment trust (REIT) and owner of premium limited-service, upscale
extended-stay and full-service hotels, today announced results for the
fourth quarter and year ended December 31, 2005.
Net income available to common shareholders was $1.9 million for
the 2005 fourth quarter, or $0.07 per share, compared to net income
available to common shareholders of $0.9 million, or $0.03 per share,
for the same period a year earlier.
For the year, net loss available to common shareholders was ($1.7)
million, or $(0.07) per share, compared to net income available to
common shareholders of $7.8 million, or $0.30 per share, for the full
year 2004. The full year 2005 results included a non-cash impairment
charge of $12.4 million (net of allocation of minority interest).
Excluding this charge, 2005 net income available to common
shareholders would have been $10.6 million, or $0.39 per share.
Funds from operations (FFO) available to common shareholders for
the 2005 fourth quarter rose 19 percent to $6.4 million, compared to
$5.4 million in the 2004 fourth quarter, or $0.23 and $0.20 per common
share, respectively. Excluding the effects of the non-cash impairment
charge in 2004 and the non-cash income tax expense (benefits) in both
years, the fourth quarter 2005 FFO available to common shareholders
would have been $6.5 million, or $0.23 per share, versus $5.1 million,
or $0.19 per share for the fourth quarter of 2004. The company had
approximately 27.7 million and 27.6 million fully diluted weighted
average common shares outstanding in the 2005 and 2004 reporting
periods, respectively.
For the full year 2005, FFO available to common shareholders
decreased to $16.4 million, or $0.59 per common share, compared to
$26.2 million, or $0.95 per common share for 2004. Excluding the
effects of non-cash impairment charges and non-cash income tax
expense/benefits in both years, as well as non-recurring items in both
years including the effects of the redemption of the Series A
Preferred Stock in 2004, the non-recurring lease agreement acquisition
income earned in 2004, as well as $0.06 per share of additional
interest income relating to the early payoff of the Cornhusker,
Baltimore, Tampa and Kauai hotel loans in 2005, FFO available to
common shareholders would have been $28.3 million, or $1.02 per share
for 2005 versus $25.8 million, or $0.94 per share for 2004. The
company's fully diluted weighted average common shares outstanding was
approximately 27.7 million and 27.6 million in the 2005 and 2004
reporting periods, respectively.
Recent Developments
In February 2006, the company closed on its first loan in a
program with GE Commercial Franchise Finance ("GEFF"), announced last
year, to provide a highly streamlined, cost-effective loan product for
hoteliers. Under the program, GEFF and Winston provide seamless first
mortgage loans for up to 85 percent of a project's cost. Winston
initially funded $0.6 million of the total $2.3 million first loss
piece, or the "B" note, of a $12 million total loan amount for a
to-be-built 140 room Hilton Garden Inn in Columbia, SC. Winston is
obligated to fund the remaining balance of the "B" note ratably over
the projected construction period that has commenced and is expected
to be completed during the fourth quarter of 2006. The underlying
construction-to-five-year-permanent loan, bears interest at an all in
annual yield to the company equal to 30-day LIBOR plus approximately
12 percent.
2005 Highlights
"Winston capitalized on all of its growth initiatives in 2005,
including acquisitions, development/repositioning and hotel debt
financing," said Robert W. Winston, III chief executive officer. "We
continue to see significant opportunities in all of our growth
strategies."
Hotel Acquisitions, Dispositions
"Prices for hotels rose significantly during 2005, but we believe
that we still will be able to acquire premium-branded hotels at
reasonable capitalization rates," said Joe Green, president and chief
financial officer. "In attractive markets where hotels are selling in
excess of replacement costs, we will consider development on a highly
selective basis."
-- In the 2005 fourth quarter, the company acquired five Marriott
Towneplace Suites and one Courtyard by Marriott for an
aggregate cost of $46.9 million.
-- In 2005, the company also acquired the Hampton Inn & Suites in
Baltimore's Inner Harbor for $16.3 million and a 60 percent
interest in the $18 million Stanley Hotel in Estes Park, Colo.
-- During the year, the company sold three hotels that no longer
fit the company's long-term growth strategy, for aggregate net
proceeds of $11.5 million.
Hotel Development
"We develop hotels for our own account and through joint
ventures," Green noted. "In 2005, we began construction on four hotels
at an expected total cost of an aggregate of approximately $62
million. We also were designated a preferred developer for the new
select-service aloft brand by Starwood and currently are reviewing
several potential development sites on which we can build and own
aloft-branded hotels."
-- The company is nearing completion on its conversion of a
former historic apartment building in Kansas City into a
123-room Courtyard by Marriott. The $16.7 million project is
expected to be completed in late April 2006.
-- Construction is well underway on a 121-room, $12.0 million
Hilton Garden Inn in Akron, Ohio, which is expected to open
during the fourth quarter of 2006. Winston expects to
contribute 70 percent of the total equity investment in the
joint-venture project.
-- Construction has begun on the wholly owned, 142-room, $19.6
million Homewood Suites hotel in Princeton, N.J., expected to
open during the first quarter of 2007.
-- Winston recently broke ground on a 119-room, $13.3 million
Hilton Garden Inn in Wilmington, N.C. The wholly owned hotel
is expected to open during the second quarter of 2007.
Hotel Debt Financing Program
-- For the full year, the company closed on five loans totaling
approximately $23 million, including $14.0 million of four
senior participation interests in certain mezzanine loans
originated by Credit Suisse First Boston and purchased by the
company in the fourth quarter of 2005.
-- In 2005, four loans with outstanding balances in the aggregate
of $16 million, were repaid to the company, prior to their
maturity date, resulting in prepayment and related fees
totaling $1.6 million, or approximately $0.06 per share.
Financing
-- The company expanded its line of credit with GE Capital in
2005 from $155 million to $215 million. Winston had
approximately $68 million available under the line as of
December 31, 2005.
-- In 2005, the company financed four of its existing hotel loans
under its $50 million master repurchase agreement with
Marathon Structured Finance Fund, L.P. (Marathon), borrowing
approximately $9 million. Availability under the Marathon
master repurchase agreement is approximately $41 million.
-- Winston established two new credit facilities with Marathon
totaling $13.2 million to finance hotel loans under the
company's hotel debt financing program.
Same Store Operating Statistics
Revenue per available room (RevPAR) in the 2005 fourth quarter
improved 8.3 percent, led by a 6.8 percent improvement in average
daily room rate (ADR) and a 1.4 percent increase in occupancy,
compared to the same period a year earlier. Fourth quarter 2005
operating margins decreased slightly to 38.4 percent from 38.7 percent
in the same period for the previous year, as they were negatively
impacted by non-recurring legal fees, rising utility costs and higher
franchise fees, offset by pro-active strategies resulting in a
decrease in labor costs. The increase in utility costs was generated
solely by rate increases, which was mitigated by implementing various
energy-saving measures.
The following table details the "same store" operating statistics,
which includes 44 hotels that were open throughout both the three and
twelve months ended December 31, 2005 and the three and twelve months
ended December 31, 2004 (includes 41 wholly owned hotels and three
jointly owned hotels, including the Ponte Vedra, Fla. Hampton Inn, the
West Des Moines, Iowa Fairfield Inn & Suites and the Houston, Texas
SpringHill Suites by Marriott).
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*T
Same Store Operating Statistics
----------------------------------------------------------------------
Three Months Ended
December, 31,
-------------------------------
2005 2004 Change
--------- --------- ------
Hotel room revenues $ 32,367 $ 30,045 7.7%
RevPAR $ 56.72 $ 52.35 8.3%
Occupancy 64.6% 63.7% 1.4%
Average Daily rate $ 87.78 $ 82.22 6.8%
Gross Operating Profit margin 38.4% 38.7% -0.3% pts.
Twelve Months Ended
December, 31,
--------------------------------
2005 2004 Change
--------- --------- ------
Hotel room revenues $135,150 $126,836 6.6%
RevPAR $ 59.44 $ 55.56 7.0%
Occupancy 68.4% 68.4% 0.0%
Average Daily rate $ 86.86 $ 81.25 6.9%
Gross Operating Profit margin 41.0% 41.1% -0.1% pts.
----------------------------------------------------------------------
*T
Dividends
During the 2005 fourth quarter, the company declared a regular
cash dividend of $0.15 per common share and a cash dividend of $0.50
per share of Series B Preferred Stock. The non-cash impairment charge
and the non-cash tax expense do not affect the company's ability to
pay out dividends pursuant to its dividend policy. "We continue to
evaluate our policy on a quarterly basis and currently are comfortable
with the payout level of our current common stock dividend," said
Robert W. Winston, III, chief executive officer.
2006 First Quarter Outlook and Guidance
For the 2006 first quarter, the company forecasts net income per
share available to common shareholders of ($0.02) to $0.00. On a same
store basis, the company expects 2006 first quarter RevPAR to increase
5 to 7 percent, compared to the prior year's first quarter, as well as
a slight increase in gross operating profit margins for the first
quarter of 2006, compared to the previous year's first quarter.
FFO per share available to common shareholders is expected to be
between $0.16 and $0.18 for the 2006 first quarter. "We expect the
gross operating profit from our hotel portfolio for the first quarter
2006 to increase over 2005 by $0.08 to $0.10 per share," Green said.
"However, we expect this gain to be offset by higher interest expense,
general and administrative costs and, management fees, coupled with
lower interest income from hotel loans and the negative impact of the
seasonality of the operations of the Stanley Hotel in Estes Park,
Colo. "We believe that the anticipated negative impacts in the first
quarter will be more than offset in the remaining three quarters of
the year," Green said. "For example, the Stanley generates most of its
profit in the second and third quarters, and we expect it to be
accretive for the full year."
This guidance assumes no hotel acquisitions, and no hotel
dispositions, developments or placements of hotel debt during the 2006
first quarter.
2006 Yearly Outlook and Guidance
For the year ended December 31, 2006, the company forecasts net
income per share available to common shareholders of $0.26 to $0.32.
On a same store basis, the company expects 2006 RevPAR to increase 5
to 7 percent, compared to the prior year.
FFO per share available to common shareholders for the year ended
December 31, 2006 is expected to be between $1.04 and $1.10 ($1.13
excluding the expected impact of non-cash income tax expense in 2006).
This guidance assumes no hotel acquisitions, or dispositions,
developments or placements of hotel debt during the year ended
December 31, 2006, except for the operations and related debt of the
Courtyard by Marriott hotel in Kansas City, Mo., which is expected to
open by the end of April. Moreover the guidance does not include any
results from the company's assumption that it will replace some of its
current variable rate debt with fixed-rate financing.
"We believe interest rates will continue to rise and therefore
believe the timing is right to lock in long-term rates," Green noted.
"Accordingly, the company is considering several proposals to
refinance approximately $160 million of its current portfolio with
10-year fixed rate financing. We expect to complete the refinancing by
July 1st of this year."
Green also pointed out, "We have active pipelines in all of our
growth strategies and anticipate consummating accretive transactions
in 2006. However, timing of complex financings, acquisitions and
development transactions is very difficult to predict with reasonable
accuracy. We are comfortable with our base assumptions for 2006 and
expect improvement in our operations. We expect that 2006 will be a
productive year for the company."
Winston Hotels' 2005 fourth quarter investor conference call is
scheduled for 10 a.m. EST today, February 16, 2006. The call also will
be simulcast over the Internet via the company's Web site,
www.winstonhotels.com. The replay will be available on the company's
Web site for 30 days and via telephone for seven days by calling
800-475-6701, access code 816910.
About the Company
As of December 31, 2005, the company owned or was invested in 56
hotel properties in 17 states having an aggregate of 7,668 rooms. This
included 49 wholly owned properties with an aggregate of 6,720 rooms,
a 60 percent ownership interest in a joint-venture that owns one hotel
with 138 rooms, a 49 percent ownership interest in a joint venture
that owns one hotel with 118 rooms, a 48.78 percent ownership interest
in a joint venture that owns one hotel with 147 rooms, and a 13.05
percent ownership interest in a joint venture that owns four hotels
with an aggregate of 545 rooms. As of December 31, 2005 the company
had hotel loans receivable totaling $38.1 million. The company does
not hold an ownership interest in any of the hotels for which it has
provided financing. For more information about Winston Hotels, visit
the company's Web site at www.winstonhotels.com.
Notes About Forward-Looking Statements
In addition to historical information, this press release contains
forward-looking statements. The reader can identify these statements
by use of words like "may," "will," "expect," "project," "anticipate,"
"estimate," "target," "believe," or "continue" or similar expressions,
including without limitation its acquisition, disposition and
development plans for hotel properties, its hotel lending plans, its
dividend policy, and its estimated net income available to common
shareholders, net income available to common shareholders per share,
FFO available to common shareholders, FFO available to common
shareholders per share and RevPAR. These statements represent the
company's judgment and are subject to risks and uncertainties that
could cause actual operating results to differ materially from those
expressed or implied in the forward looking statements including, but
not limited to, changes in general economic conditions, lower
occupancy rates, lower average daily rates, acquisition risks,
development risks including risk of construction delay, cost overruns,
occupancy and governmental permits, zoning, the increase of
development costs in connection with projects that are not pursued to
completion, the risk of non-payment of subordinated loans, or the
failure to make additional hotel debt investments and investments in
hotels. Other risks are discussed in the company's filings with the
Securities and Exchange Commission, including but not limited to its
Annual Report on Form 10-K for the year ended December 31, 2004.
Notes About Non-GAAP Financial Measures
This press release includes certain non-GAAP financial measures as
defined under Securities and Exchange Commission ("SEC") rules. As
required by SEC rules, the company has provided a reconciliation in
this press release of each non-GAAP financial measure to its most
directly comparable GAAP measure. We believe that these non-GAAP
measures, when combined with the company's primary GAAP presentations
required by the SEC, help improve our equity holders' ability to
understand our operating performance and make it easier to compare the
results of our company with other hotel REITs. A description of each
is provided below.
FFO and FFO Available to Common Shareholders
The company reports FFO in accordance with the definition of the
National Association of Real Estate Investment Trusts ("NAREIT").
NAREIT defines FFO as net income (loss) (determined in accordance with
generally accepted accounting principles, or "GAAP"), excluding gains
(losses) from sales of property, plus depreciation and amortization,
and after adjustments for unconsolidated partnerships and joint
ventures (which are calculated to reflect FFO on the same basis). The
company further subtracts preferred stock dividends and loss on
redemption of Series A Preferred Stock from FFO to calculate FFO
available to common shareholders. FFO available to common shareholders
is a performance measure used by the company in its budgeting and
forecasting models, it is discussed during Board meetings, and is
considered when making decisions regarding acquisitions, sales of
properties and other investments, and is a metric in determining
executive compensation. The calculation of FFO and FFO available to
common shareholders may vary from entity to entity, and as such the
presentation of FFO and FFO available to common shareholders by the
company may not be comparable to other similarly titled measures of
other reporting companies. FFO and FFO available to common
shareholders are not intended to represent cash flows for the period.
FFO and FFO available to common shareholders have not been presented
as an alternative to net income, and should not be considered in
isolation or as a substitute for measures of performance prepared in
accordance with GAAP.
FFO is a supplemental industry-wide measure of REIT operating
performance, the definition of which was first proposed by NAREIT in
1991 (and clarified in 1995, 1999 and 2002) in response to perceived
drawbacks associated with the presentation of net income under GAAP as
applied to REITs. Since the introduction of the definition by NAREIT,
the term has come to be widely used by REITs. Historical GAAP 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 industry investors have considered presentations of
operating results for real estate companies that use historical GAAP
cost accounting to be insufficient by themselves. Accordingly, the
company believes FFO and FFO available to common shareholders
(combined with the company's primary GAAP presentations required by
the SEC) improve our investors' ability to understand the company's
operating performance.
Operating Margin
Operating margin is determined by dividing gross operating profit,
for the hotels whose operating results are included in the company's
consolidated statement of operations, by total revenue.
RevPAR
RevPAR is an acronym for Revenue Per Available Room, which is
determined by multiplying average daily rate by occupancy percentage
for any given period. RevPAR does not include food and beverage or
other ancillary revenues, such as parking, telephone, or other guest
services generated by the property. Similar to the reporting periods
for the company's statement of operations, hotel operating statistics
(i.e., RevPAR, average daily rate and average occupancy) are always
reported on a quarter to date and/or year to date basis.
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*T
WINSTON HOTELS, INC.
CONSOLIDATED BALANCE SHEETS
As of December 31, 2005 and 2004
($ in thousands, except per share amounts)
December 31, December 31,
2005 2004
----------------------------------------------------------------------
ASSETS
Land $ 55,758 $ 46,215
Buildings and improvements 421,948 382,458
Furniture and equipment 63,048 54,661
----------------------------------------------------------------------
Operating properties 540,754 483,334
Less accumulated depreciation 139,222 134,261
----------------------------------------------------------------------
401,532 349,073
Properties under development 25,139 3,962
----------------------------------------------------------------------
Net investment in hotel properties 426,671 353,035
Assets held for sale 10,832 7,037
Corporate furniture fixtures and equipment,
net 371 397
Cash 15,047 4,115
Accounts receivable, net 3,820 2,676
Notes receivable 38,050 30,849
Investment in joint ventures 1,795 2,512
Deferred expenses, net 6,807 3,759
Prepaid expenses and other assets 12,557 7,976
Deferred tax asset 11,471 12,024
----------------------------------------------------------------------
Total assets $ 527,421 $424,380
======================================================================
LIABILITIES, MINORITY INTEREST AND SHAREHOLDERS' EQUITY
Lines of credit $ 157,896 $ 66,850
Mortgage loans 99,874 88,075
Accounts payable and accrued expenses 27,261 13,066
Distributions payable 6,011 5,994
----------------------------------------------------------------------
Total liabilities 291,042 173,985
----------------------------------------------------------------------
Minority interest 12,804 10,154
----------------------------------------------------------------------
Commitments and contingencies - -
Shareholders' equity:
Preferred stock, Series B, $.01 par value,
5,000,000 shares authorized, 3,680,000
shares issued and outstanding (liquidation
preference of $93,840) 37 37
Common stock, $.01 par value, 50,000,000
shares authorized, 26,509,002 and 26,397,574
shares issued and outstanding 265 264
Additional paid-in capital 325,238 323,947
Unearned compensation (1,454) (1,145)
Distributions in excess of earnings (100,511) (82,862)
----------------------------------------------------------------------
Total shareholders' equity 223,575 240,241
----------------------------------------------------------------------
Total liabilities, minority interest and
shareholders' equity $ 527,421 $424,380
======================================================================
WINSTON HOTELS, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
Three Months Ended
December 31,
2005 2004
----------------------------------------------------------------------
Operating revenue:
Rooms $35,094 $28,599
Food and beverage 3,166 2,105
Other operating departments 1,148 818
Joint venture fee income 63 58
----------------------------------------------------------------------
Total operating revenue 39,471 31,580
----------------------------------------------------------------------
Hotel operating expenses:
Rooms 7,835 6,628
Food and beverage 2,356 1,584
Other operating departments 922 667
Undistributed operating expenses:
Property operating expenses 8,355 6,478
Real estate taxes and property and casualty
insurance 1,757 1,434
Franchise costs 2,533 2,093
Maintenance and repair 2,176 1,699
Management fees 1,310 709
General and administrative 1,792 1,568
Depreciation 5,033 4,163
Amortization 471 439
----------------------------------------------------------------------
Total operating expenses 34,540 27,462
----------------------------------------------------------------------
Operating income 4,931 4,118
----------------------------------------------------------------------
Interest and other income 2,236 850
Interest expense (3,981) (2,057)
----------------------------------------------------------------------
Income before allocation to minority
interest in Partnership, income taxes, and
equity in income of unconsolidated joint
ventures 3,186 2,911
Income allocation to minority interest in
Partnership (93) (72)
(Income) loss allocation to minority interest in
consolidated joint ventures 129 (45)
Income tax benefit (expense) (83) 486
Equity in income of unconsolidated joint ventures 583 24
----------------------------------------------------------------------
Income from continuing operations 3,722 3,304
Discontinued operations:
Income (loss) from discontinued operations 49 (211)
Loss on impairment of asset held for sale - (391)
----------------------------------------------------------------------
Net income 3,771 2,702
Preferred stock distribution (1,840) (1,840)
----------------------------------------------------------------------
Net income available to common shareholders $ 1,931 $ 862
======================================================================
Basic weighted average number of common shares
outstanding 26,314 26,234
----------------------------------------------------------------------
Diluted weighted average number of common shares
outstanding 27,654 27,556
----------------------------------------------------------------------
Income (loss) per common share diluted:
Income from continuing operations $ 0.07 $ 0.05
Loss from discontinued operations - (0.02)
----------------------------------------------------------------------
Net income available to common shareholders 0.07 0.03
----------------------------------------------------------------------
Per share dividends to common shareholders $ 0.15 $ 0.15
----------------------------------------------------------------------
WINSTON HOTELS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
Years ended December 31,
2005 2004
----------------------------------------------------------------------
Operating revenue:
Rooms $136,472 $117,475
Food and beverage 10,239 7,589
Other operating departments 4,069 3,516
Percentage lease revenue - 701
Joint venture fee income 250 181
----------------------------------------------------------------------
Total operating revenue 151,030 129,462
----------------------------------------------------------------------
Hotel operating expenses:
Rooms 29,886 25,822
Food and beverage 7,697 5,715
Other operating departments 3,070 2,632
Undistributed operating expenses:
Property operating expenses 29,736 25,705
Real estate taxes and property and casualty
insurance 7,038 6,148
Franchise costs 9,910 8,492
Maintenance and repair 7,838 6,575
Management fees 4,264 2,914
General and administrative 7,943 6,858
Depreciation 18,285 15,957
Amortization 1,519 1,405
----------------------------------------------------------------------
Total operating expenses 127,186 108,223
----------------------------------------------------------------------
Operating income 23,844 21,239
----------------------------------------------------------------------
Interest and other income 7,045 2,196
Interest expense (11,633) (7,157)
----------------------------------------------------------------------
Income before allocation to minority
interest in Partnership,
allocation to minority interest in
consolidated joint ventures,
income taxes, and equity in income
(loss)
of unconsolidated joint ventures 19,256 16,278
Income allocation to minority interest in
Partnership (537) (398)
Income allocation to minority interest in
consolidated joint ventures (410) (255)
Income tax benefit (expense) (593) 1,540
Equity in income (loss) of unconsolidated
joint ventures 625 (61)
----------------------------------------------------------------------
Income from continuing operations 18,341 17,104
Discontinued operations:
Income (loss) from discontinued operations (704) 204
Net gain on sale of discontinued operations 366 15
Loss on impairment of asset held for sale (12,386) (440)
----------------------------------------------------------------------
Net income 5,617 16,883
Preferred stock distribution (7,360) (7,315)
Loss on redemption of Series A preferred stock - (1,720)
----------------------------------------------------------------------
Net income (loss) available to
common shareholders $ (1,743) $ 7,848
======================================================================
Basic weighted average number of common shares
outstanding 26,302 26,224
----------------------------------------------------------------------
Diluted weighted average number of common
shares outstanding 26,302 27,555
----------------------------------------------------------------------
Income (loss) per common share basic and
diluted:
Income from continuing operations $ 0.41 $ 0.31
Income (loss) from discontinued operations (0.48) (0.01)
----------------------------------------------------------------------
Net income (loss) available to common
shareholders $ (0.07) $ 0.30
----------------------------------------------------------------------
Per share dividends to common shareholders $ 0.60 $ 0.60
----------------------------------------------------------------------
WINSTON HOTELS, INC.
RECONCILIATION AND CALCULATION OF FFO, FFO AVAILABLE TO COMMON
SHAREHOLDERS AND FFO AVAILABLE TO COMMON SHAREHOLDERS PER SHARE
($ in thousands, except per share amounts)
Three Months Twelve Months
Ended Ended
December 31, December 31,
------------------ -----------------
2005 2004 2005 2004
--------- ------- ------- -------
Net income $ 3,771 $ 2,702 $ 5,617 $16,883
Gain on sale of discontinued
operations - - (383) (16)
Gain on sale of unconsolidated
joint venture hotel (551) - (551) -
Minority interest in Partnership
allocation of income (loss) 96 79 (96) 398
Minority interest in Partnership
allocation of gain
on sale of discontinued
operations - - 17 1
Minority interest in Partnership
allocation of gain
on sale of unconsolidated joint
venture hotel 26 - 26 -
Minority interest in Partnership
allocation of income
(loss) from discontinued
operations (25) (18) (33) 9
Depreciation 4,620 3,901 16,962 15,222
Depreciation from discontinued
operations 91 510 1,302 2,189
Depreciation from joint ventures 229 90 889 501
--------- ------- ------- -------
FFO 8,257 7,264 23,750 35,187
Loss on redemption of Series A
preferred stock - - - (1,720)
Preferred stock dividend (1,840) (1,840) (7,360) (7,315)
--------- ------- ------- -------
FFO Available to Common
Shareholders $ 6,417 $ 5,424 $16,390 $26,152
========= ======== ======== ========
Weighted average common shares
outstanding assuming dilution 27,654 27,556 27,680 27,555
--------- ------- ------- -------
FFO Available to Common
Shareholders per share $ 0.23 $ 0.20 $ 0.59 $ 0.95
========= ======== ======== ========
========= ======== ======== ========
Common dividend per share $ 0.15 $ 0.15 $ 0.60 $ 0.60
========= ======== ======== ========
*T
Excluding the effects of the non-cash impairment in 2004 and
income tax expense (benefits) in both years, the fourth quarter 2005
FFO available to common shareholders would have been $0.23 per share,
versus $0.19 per share for the fourth quarter of 2004.
Excluding the effects of non-cash impairment charges and non-cash
income tax expense/benefits in both years, as well as non-recurring
items in both years including the effects of the redemption of the
Series A Preferred Stock in 2004, the non-recurring lease agreement
acquisition income earned in 2004, as well as the $0.06 per share of
additional interest income relating to the early payoff of the
Cornhusker, Baltimore, Tampa and Kauai hotel loans in 2005, FFO
available to common shareholders would have been $28.3 million, or
$1.02 per share for 2005 versus $25.8 million, or $0.94 per share for
2004.
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WINSTON HOTELS, INC.
2006 FIRST QUARTER AND YEARLY GUIDANCE
RECONCILIATION OF NET INCOME TO
FFO AVAILABLE TO COMMON SHAREHOLDERS (a)
($ in thousands, except per share amounts)
Quarter Ended Year Ended
March 31, 2006 December 31, 2006
--------------------------------------
Guidance Range Guidance Range
Low High Low High
--------- -------- ---------- --------
Net income $ 1,200 $ 1,800 $ 14,600 $16,200
Minority interest - - 300 400
Depreciation 5,100 5,100 21,200 21,200
Depreciation from joint
ventures 100 100 200 200
Preferred stock dividend (1,840) (1,840) (7,360) (7,360)
--------- -------- ---------- --------
FFO Available to Common
Shareholders $ 4,560 $ 5,160 $ 28,940 $30,640
========= ======== ========= ========
Weighted average common
shares assuming dilution 27,900 27,900 27,900 27,900
FFO Available to Common
Shareholders per share $ 0.16 $ 0.18 $ 1.04 $ 1.10
(a) Assumes no hotel acquisitions, and no hotel dispositions,
developments or placements of hotel debt, except for the operations
and related debt of the Courtyard by Marriott hotel in Kansas City, MO
opening in April.
Winston Hotels, Inc.
Three and Twelve Months Ended December 31, Same Store RevPAR
Statistics
Total for 44 Hotels
Quarter Ending
December
-----------------
2005 2004 % CH
----- ----- -----
Combined Brands
------------------------------------------------
Comfort Inn/Suites & Quality Suites 39.31 38.49 2.1%
Courtyard, Fairfield Inn, Residence Inn 55.37 46.26 19.7%
Hampton Inn/Suites 56.45 51.19 10.3%
Hilton Garden Inn 70.50 71.61 -1.6%
Holiday Inn Express/Select 55.41 50.45 9.8%
Homewood Suites 66.65 62.63 6.4%
Region
------------------------------------------------
South Atlantic 52.18 48.44 7.7%
East North Central 70.69 72.92 -3.1%
West South Central 53.95 35.42 52.3%
West North Central 51.23 46.55 10.1%
Mountain 52.70 52.98 -0.5%
New England 62.09 61.89 0.3%
Middle Atlantic 76.54 76.14 0.5%
Segment
------------------------------------------------
Upscale 64.22 59.00 8.8%
Mid-scale w/ F&B 58.74 54.30 8.2%
Mid-scale w/o F&B 48.62 45.23 7.5%
Service
------------------------------------------------
Limited-service 48.62 45.23 7.5%
Full-service 62.08 59.40 4.5%
Extended-stay 64.63 55.69 16.1%
All Hotels 56.72 52.35 8.3%
Twelve Months Ended
December
-------------------
2005 2004 % CH
------ ------ -----
Combined Brands
------------------------------------------------
Comfort Inn/Suites & Quality Suites $44.50 $46.22 -3.7%
Courtyard, Fairfield Inn, Residence Inn $57.36 $48.67 17.9%
Hampton Inn/Suites $58.96 $53.23 10.8%
Hilton Garden Inn $74.63 $74.88 -0.3%
Holiday Inn Express/Select $57.33 $52.86 8.5%
Homewood Suites $67.92 $64.72 4.9%
Region
------------------------------------------------
South Atlantic $55.52 $52.45 5.9%
East North Central $74.46 $74.05 0.6%
West South Central $49.59 $38.36 29.3%
West North Central $55.30 $52.52 5.3%
Mountain $55.20 $50.77 8.7%
New England $66.88 $64.97 2.9%
Middle Atlantic $82.07 $78.50 4.5%
Segment
------------------------------------------------
Upscale $66.20 $61.43 7.8%
Mid-scale w/ F&B $59.50 $58.03 2.5%
Mid-scale w/o F&B $52.70 $49.06 7.4%
Service
------------------------------------------------
Limited-service $52.70 $49.06 7.4%
Full-service $65.01 $63.25 2.8%
Extended-stay $64.34 $56.54 13.8%
All Hotels $59.44 $55.56 7.0%
*T
The above presentation includes 41 of the company's 49 wholly
owned hotels as of December 31, 2005, as well as three joint venture
hotels the company held an ownership interest in throughout the
periods presented. These joint venture hotels include the Ponte Vedra,
Fla. Hampton Inn, the West Des Moines, Iowa Fairfield Inn & Suites and
the Houston, Tex. SpringHill Suites by Marriott. It excludes wholly
owned properties which were sold prior to December 31, 2005, the
Roanoke, Va. Courtyard by Marriott which was acquired in December
2004, the Hampton Inn & Suites Baltimore Inner Harbor in Maryland
which was acquired in September 2005 and the six hotels acquired in
October 2005.
The above presentation excludes two joint venture hotels, in which
the company owns a 13.05 percent interest, through its Charlesbank
joint venture. These joint venture hotels include the Shelton, Conn.
Courtyard by Marriott acquired in March 2004 and the West Des Moines,
Iowa Quality Suites acquired in August 2004. It also excludes the
Chapel Hill, N.C. Courtyard by Marriott which opened in September
2004, in which the company owns a 48.78 percent interest and the
Stanley Hotel in Estes Park, Colo., which was acquired September 2005,
in which the company owns a 60 percent interest. These properties were
not open throughout each of the periods presented; therefore they are
excluded from the table above.
-0-
*T
Winston Hotels, Inc.
Three and Twelve Months Ended December 31, Same Store ADR Statistics
Total for 44 Hotels
Quarter Ending
December
---------------------
2005 2004 % CH
------- ------- -----
Combined Brands
------------------------------------------------
Comfort Inn/Suites & Quality Suites $ 64.57 $ 62.36 3.5%
Courtyard, Fairfield Inn, Residence Inn $ 86.05 $ 77.43 11.1%
Hampton Inn/Suites $ 87.25 $ 79.54 9.7%
Hilton Garden Inn $109.74 $106.87 2.7%
Holiday Inn Express/Select $ 88.62 $ 83.43 6.2%
Homewood Suites $ 93.33 $ 89.53 4.2%
Region
------------------------------------------------
South Atlantic $ 81.18 $ 75.25 7.9%
East North Central $111.21 $104.82 6.1%
West South Central $ 80.92 $ 72.91 11.0%
West North Central $ 73.65 $ 65.98 11.6%
Mountain $ 86.55 $ 81.21 6.6%
New England $ 98.14 $ 97.94 0.2%
Middle Atlantic $115.16 $107.50 7.1%
Segment
------------------------------------------------
Upscale $ 95.63 $ 91.35 4.7%
Mid-scale w/ F&B $ 88.66 $ 86.23 2.8%
Mid-scale w/o F&B $ 78.93 $ 71.84 9.9%
Service
------------------------------------------------
Limited-service $ 78.93 $ 71.84 9.9%
Full-service $ 96.58 $ 93.84 2.9%
Extended-stay $ 90.56 $ 84.66 7.0%
All Hotels $ 87.78 $ 82.22 6.8%
Twelve Months Ended
December
--------------------
2005 2004 % CH
------- ------- -----
Combined Brands
--------------------------------------------------
Comfort Inn/Suites & Quality Suites $ 66.55 $ 63.70 4.5%
Courtyard, Fairfield Inn, Residence Inn $ 84.26 $ 79.14 6.5%
Hampton Inn/Suites $ 84.98 $ 77.68 9.4%
Hilton Garden Inn $109.40 $103.98 5.2%
Holiday Inn Express/Select $ 88.50 $ 82.51 7.3%
Homewood Suites $ 93.55 $ 88.02 6.3%
Region
--------------------------------------------------
South Atlantic $ 80.62 $ 74.43 8.3%
East North Central $105.87 $100.23 5.6%
West South Central $ 78.11 $ 75.82 3.0%
West North Central $ 77.03 $ 71.53 7.7%
Mountain $ 86.32 $ 79.09 9.1%
New England $ 98.46 $ 95.77 2.8%
Middle Atlantic $114.09 $106.59 7.0%
Segment
--------------------------------------------------
Upscale $ 95.10 $ 90.31 5.3%
Mid-scale w/ F&B $ 90.20 $ 86.12 4.7%
Mid-scale w/o F&B $ 77.56 $ 71.10 9.1%
Service
--------------------------------------------------
Limited-service $ 77.56 $ 71.10 9.1%
Full-service $ 96.81 $ 92.57 4.6%
Extended-stay $ 89.91 $ 84.17 6.8%
All Hotels $ 86.86 $ 81.25 6.9%
*T
The above presentation includes 41 of the company's 49 wholly
owned hotels as of December 31, 2005, as well as three joint venture
hotels the company held an ownership interest in throughout the
periods presented. These joint venture hotels include the Ponte Vedra,
Fla. Hampton Inn, the West Des Moines, Iowa Fairfield Inn & Suites and
the Houston, Tex. SpringHill Suites by Marriott. It excludes wholly
owned properties which were sold prior to December 31, 2005, the
Roanoke, Va. Courtyard by Marriott which was acquired in December
2004, the Hampton Inn & Suites Baltimore Inner Harbor in Maryland
which was acquired in September 2005 and the six hotels acquired in
October 2005.
The above presentation excludes two joint venture hotels, in which
the company owns a 13.05 percent interest, through its Charlesbank
joint venture. These joint venture hotels include the Shelton, Conn.
Courtyard by Marriott acquired in March 2004 and the West Des Moines,
Iowa Quality Suites acquired in August 2004. It also excludes the
Chapel Hill, N.C. Courtyard by Marriott which opened in September
2004, in which the company owns a 48.78 percent interest and the
Stanley Hotel in Estes Park, Colo., which was acquired September 2005,
in which the company owns a 60 percent interest. These properties were
not open throughout each of the periods presented; therefore they are
excluded from the table above.
-0-
*T
Winston Hotels, Inc.
Three and Twelve Months Ended December 31, Same Store Occupancy
Statistics
Total for 44 Hotels
Quarter Ending
December
-----------------
2005 2004 % CH
----- ----- -----
Combined Brands
---------------------------------------------------
Comfort Inn/Suites & Quality Suites 60.9% 61.7% -1.3%
Courtyard, Fairfield Inn, Residence Inn 64.3% 59.8% 7.5%
Hampton Inn/Suites 64.7% 64.4% 0.5%
Hilton Garden Inn 64.2% 67.0% -4.2%
Holiday Inn Express/Select 62.5% 60.5% 3.3%
Homewood Suites 71.4% 70.0% 2.0%
Region
---------------------------------------------------
South Atlantic 64.3% 64.4% -0.2%
East North Central 63.6% 69.6% -8.6%
West South Central 66.7% 48.6% 37.2%
West North Central 69.6% 70.6% -1.4%
Mountain 60.9% 65.2% -6.6%
New England 63.3% 63.2% 0.2%
Middle Atlantic 66.5% 70.8% -6.1%
Segment
---------------------------------------------------
Upscale 67.2% 64.6% 4.0%
Mid-scale w/ F&B 66.3% 63.0% 5.2%
Mid-scale w/o F&B 61.6% 63.0% -2.2%
Service
---------------------------------------------------
Limited-service 61.6% 63.0% -2.2%
Full-service 64.3% 63.3% 1.6%
Extended-stay 71.4% 65.8% 8.5%
All Hotels 64.6% 63.7% 1.4%
Twelve Months
Ended December
-----------------
2005 2004 % CH
----- ----- -----
Combined Brands
-------------------------------------------------
Comfort Inn/Suites & Quality Suites 66.9% 72.6% -7.9%
Courtyard, Fairfield Inn, Residence Inn 68.1% 61.5% 10.7%
Hampton Inn/Suites 69.4% 68.5% 1.3%
Hilton Garden Inn 68.2% 72.0% -5.3%
Holiday Inn Express/Select 64.8% 64.1% 1.1%
Homewood Suites 72.6% 73.5% -1.2%
Region
-------------------------------------------------
South Atlantic 68.9% 70.5% -2.3%
East North Central 70.3% 73.9% -4.9%
West South Central 63.5% 50.6% 25.5%
West North Central 71.8% 73.4% -2.2%
Mountain 64.0% 64.2% -0.3%
New England 67.9% 67.8% 0.1%
Middle Atlantic 71.9% 73.6% -2.3%
Segment
-------------------------------------------------
Upscale 69.6% 68.0% 2.4%
Mid-scale w/ F&B 66.0% 67.4% -2.1%
Mid-scale w/o F&B 67.9% 69.0% -1.6%
Service
-------------------------------------------------
Limited-service 67.9% 69.0% -1.6%
Full-service 67.2% 68.3% -1.6%
Extended-stay 71.6% 67.2% 6.5%
All Hotels 68.4% 68.4% 0.0%
*T
The above presentation includes 41 of the company's 49 wholly
owned hotels as of December 31, 2005, as well as three joint venture
hotels the company held an ownership interest in throughout the
periods presented. These joint venture hotels include the Ponte Vedra,
Fla. Hampton Inn, the West Des Moines, Iowa Fairfield Inn & Suites and
the Houston, Tex. SpringHill Suites by Marriott. It excludes wholly
owned properties which were sold prior to December 31, 2005, the
Roanoke, Va. Courtyard by Marriott which was acquired in December
2004, the Hampton Inn & Suites Baltimore Inner Harbor in Maryland
which was acquired in September 2005 and the six hotels acquired in
October 2005.
The above presentation excludes two joint venture hotels, in which
the company owns a 13.05 percent interest, through its Charlesbank
joint venture. These joint venture hotels include the Shelton, Conn.
Courtyard by Marriott acquired in March 2004 and the West Des Moines,
Iowa Quality Suites acquired in August 2004. It also excludes the
Chapel Hill, N.C. Courtyard by Marriott which opened in September
2004, in which the company owns a 48.78 percent interest and the
Stanley Hotel in Estes Park, Colo., which was acquired September 2005,
in which the company owns a 60 percent interest. These properties were
not open throughout each of the periods presented; therefore they are
excluded from the table above.