DiamondRock Hospitality Company Reports Fourth Quarter And Full Year 2015 Results

2015 Results Meet Prior Guidance; Provides 2016 Outlook

Feb 23, 2016, 08:00 ET from DiamondRock Hospitality Company

BETHESDA, Md., Feb. 23, 2016 /PRNewswire/ -- DiamondRock Hospitality Company (the "Company") (NYSE: DRH), a lodging-focused real estate investment trust that owns a portfolio of 29 premium hotels in the United States, today announced results of operations for the quarter and year ended December 31, 2015.

2015 Operating Highlights

  • Pro Forma RevPAR: Pro Forma RevPAR was $170.87, an increase of 4.7% from the comparable period of 2014.
  • Pro Forma Hotel Adjusted EBITDA Margin: Pro Forma Hotel Adjusted EBITDA margin was 31.02%, an increase of 113 basis points from 2014.
  • Pro Forma Hotel Adjusted EBITDA: Pro Forma Hotel Adjusted EBITDA was $287.5 million, an increase of 9.1% from 2014.
  • Adjusted EBITDA: Adjusted EBITDA was $265.9 million, an increase of 12.8% from 2014.
  • Adjusted FFO: Adjusted FFO was $203.4 million and Adjusted FFO per diluted share was $1.01.
  • Dividends: The Company declared four quarterly dividends totaling $0.50 per share during 2015, returning approximately $96 million to shareholders.

Fourth Quarter 2015 Highlights

  • Pro Forma RevPAR: Pro Forma RevPAR was $168.32, an increase of 3.1% from the comparable period of 2014.
  • Pro Forma Hotel Adjusted EBITDA Margin: Pro Forma Hotel Adjusted EBITDA margin was 31.26%, an increase of 114 basis points from 2014.
  • Pro Forma Hotel Adjusted EBITDA: Pro Forma Hotel Adjusted EBITDA was $73.1 million, an increase of 8.3% from 2014.
  • Adjusted EBITDA: Adjusted EBITDA was $67.0 million, an increase of 10.2% from 2014.
  • Adjusted FFO: Adjusted FFO was $51.9 million and Adjusted FFO per diluted share was $0.26.
  • Westin Boston Financing: The Company entered into a new $205 million mortgage secured by the Westin Boston Waterfront Hotel in October 2015. The mortgage loan has a term of 10 years and bears interest at a fixed rate of 4.36%.
  • Orlando Loan Prepayment: On October 9, 2015, the Company prepaid the $55.3 million mortgage loan secured by the Orlando Airport Marriott.
  • Repayment of Seller Financing: On November 9, 2015, the Company received full repayment of the $4.0 million loan it provided to the buyer of the Oak Brook Hills Resort in 2014.
  • Share Repurchase Program: On November 4, 2015, the Company's Board of Directors authorized a $150 million share repurchase program.
  • Dividends: The Company declared a dividend of $0.125 per share during the fourth quarter, which was paid on January 12, 2016.

Recent Developments

  • Chicago Marriott Loan Prepayment:  On January 11, 2016, the Company prepaid the $201.7 million mortgage loan secured by the Chicago Marriott Downtown.

Mark W. Brugger, President and Chief Executive Officer of DiamondRock Hospitality Company, stated, "Our portfolio performed well in 2015 and met our expectations from last quarter. The Company had strong execution in the core functions of asset management and finance. Our asset management best practices resulted in 73% profit flow-through from our portfolio and 114 basis points of Hotel Adjusted EBITDA margin growth during the fourth quarter. Our fourth quarter financing activities capped off $355 million of new loans during the year, which enhanced our already strong balance sheet, addressed near-term debt maturities and will save the Company several million dollars in annual interest costs."

Operating Results     

Discussions of "Pro Forma" assumes the Company owned each of its 29 hotels since January 1, 2014 but excludes the Hilton Garden Inn Times Square Central from January 1, 2015 to August 31, 2015, since the hotel opened for business on September 1, 2014.  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, 2015, the Company reported the following:


Fourth Quarter



2015


2014

Change

Pro Forma ADR

$217.23



$215.07


1.0

%

Pro Forma Occupancy

77.5

%


75.9

%

1.6 percentage points

Pro Forma RevPAR

$168.32



$163.19


3.1

%

Pro Forma Revenues

$233.8 million


$224.1 million

4.3

%

Pro Forma Hotel Adjusted EBITDA Margin

31.26

%


30.12

%

114 basis points

Adjusted EBITDA

$67.0 million


$60.8 million

$6.2 million

Adjusted FFO

$51.9 million


$41.8 million

$10.1 million

Adjusted FFO per diluted share

$0.26



$0.21


$0.05


 

The Company's fourth quarter results were held back by its New York City hotels and rebranding disruption at The Gwen Chicago. Excluding these hotels, Pro Forma RevPAR growth was 6.0% and Pro Forma Hotel Adjusted EBITDA margins increased 376 basis points.

For the year ended December 31, 2015, the Company reported the following:


Full Year



2015


2014

Change

Pro Forma ADR

$213.74



$206.58


3.5

%

Pro Forma Occupancy

79.9

%


79.0

%

0.9 percentage points

Pro Forma RevPAR

$170.87



$163.26


4.7

%

Pro Forma Revenues

$926.9 million


$881.9 million

5.1

%

Pro Forma Hotel Adjusted EBITDA Margin

31.02

%


29.89

%

113 basis points

Adjusted EBITDA

$265.9 million


$235.8 million

$30.1 million

Adjusted FFO

$203.4 million


$171.5 million

$31.9 million

Adjusted FFO per diluted share

$1.01



$0.87


$0.14


 

Excluding the Company's New York City hotels and The Gwen Chicago, Pro Forma RevPAR growth was 6.7% and Pro Forma Hotel Adjusted EBITDA margins increased 258 basis points.

Hotel Financing Activity

On October 9, 2015, the Company prepaid the $55.3 million mortgage loan secured by the Orlando Airport Marriott. The prepayment saved approximately $0.7 million of interest expense during the fourth quarter, which was factored into the Company's prior guidance.

On October 27, 2015, the Company entered into a new $205 million mortgage loan secured by the Westin Boston Waterfront Hotel. The new loan has a term of 10 years, a fixed interest rate of 4.36% and will amortize on a 30-year schedule. The proceeds from the loan, as well as a portion of a $60 million draw on its senior unsecured credit facility, were utilized to prepay the $201.7 million mortgage loan secured by the Chicago Marriott Downtown Magnificent Mile on January 11, 2016. The lower interest rate on the new loan is expected to save the Company approximately $2.7 million in net interest expense.

During 2015, the Company completed $355 million of new financings at interest rates approximately 150 basis points below the rates on maturing loans. Since 2011, the Company has lowered its weighted average interest rate from 5.6% to 4.1%, resulting in cumulative annual interest savings of approximately $14 million.

Capital Expenditures

The Company spent approximately $63.0 million on capital improvements at its hotels in 2015, which included the following significant projects:

  • Hilton Boston Downtown: The Company completed a return on investment project at the hotel to create an incremental 41 guest rooms and upgrade additional guest rooms, which created over 90 premium rooms.
  • Chicago Marriott Downtown: The Company commenced a multi-year guest room renovation at the hotel. The first phase of the guest room renovation, which consisted of 140 rooms, including all 25 suites, was successfully completed during the first quarter of 2015. The Company also added Marriott's new prototype F&B grab-and-go outlet in the hotel's lobby, which allowed the hotel to transform room service delivery.

The Company expects to spend approximately $150 million on capital improvements at its hotels in 2016, which includes carryover from certain projects that commenced in 2015.  Significant projects in 2016 include:

  • The Gwen, a Luxury Collection: The Company rebranded the Conrad Chicago to Starwood's Luxury Collection on September 1, 2015. The renovation work associated with the brand conversion, which is expected to cost approximately $25 million, will be completed in two phases. The first phase, consisting of the lobby and other public spaces, commenced in January and is expected to completed by May. The second phase of the renovation, consisting of the guest rooms, will be completed during the seasonally slow winter season beginning in late 2016.
  • Chicago Marriott Downtown: The second phase of the renovation, which consists of upgrading approximately 460 rooms and creating a new state-of-the-art fitness center, commenced in late 2015 and is expected to be completed early in the second quarter of 2016. The remaining guest rooms will be renovated during the seasonally slow winter months over the next two years and is not expected to result in material disruption.
  • The Lodge at Sonoma: The Company expects to renovate the guest rooms at the hotel during the seasonally slow period during late 2016 and early 2017.
  • Charleston Renaissance: The Company expects to renovate the guest rooms at the hotel during the fourth quarter of 2016.
  • Worthington Renaissance: The Company expects to renovate the guest rooms at the hotel during the seasonally slow summer months of 2016.

Repayment of Seller Financing

In connection with the sale of the Oak Brook Hills Resort in April 2014, the Company provided a $4.0 million unsecured loan to the buyer of the hotel. The loan was subordinate to the buyer's senior mortgage loan, and the Company believed the repayment of the loan was remote and fully reserved the loan. On November 9, 2015, upon the hotel meeting certain operating profit thresholds, the buyer repaid the Company's loan in full. The Company recorded a gain of $3.9 million during the fourth quarter, which is excluded from its reported Adjusted EBITDA and Adjusted FFO.

Balance Sheet

As of December 31, 2015, the Company had $213.6 million of unrestricted cash on hand and approximately $1.2 billion of total debt, which consisted of property-specific mortgage debt and no outstanding borrowings on the Company's $200.0 million senior unsecured credit facility.  The Company currently has $60.0 million outstanding on its senior unsecured credit facility.

Share Repurchase Program

On November 4, 2015, the Company's Board of Directors authorized a $150 million share repurchase program. Repurchases under this program will be made in open market or privately negotiated transactions from time to time and in such amounts as market conditions warrant, and subject to regulatory considerations. The Company has not repurchased any shares of its common stock since the program started.

Dividends

The Company's Board of Directors declared a quarterly dividend of $0.125 per share to stockholders of record as of December 31, 2015.  The dividend was paid on January 12, 2016.

Outlook and Guidance

The Company has provided annual guidance for 2016, 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.  Pro Forma RevPAR assumes that all of the Company's 29 hotels were owned since January 1, 2015.

The Company expects its full year 2016 results to be as follows:

Metric

Low End

High End


Pro Forma RevPAR Growth

2 percent

4 percent


Adjusted EBITDA

$265 million

$278 million


Adjusted FFO

$211 million

$221 million


Adjusted FFO per share

(based on 202.1 million shares)

$1.04 per share

$1.09 per share


 

The full year guidance range above reflects income tax expense of $7 million to $11 million, interest expense of $46 million to $47 million and corporate expenses of $24 million to $25 million.

The Company expects approximately 17% to 18% of its full year 2016 Adjusted EBITDA to be earned during the first quarter of 2016.

Selected Quarterly Pro Forma Operating Information

The following table is presented to provide investors with selected quarterly Pro Forma operating information for 2015.  The operating information assumes that all of the Company's 29 hotels were owned since January 1, 2015.


Quarter 1, 2015

Quarter 2, 2015

Quarter 3, 2015

Quarter 4, 2015

Full Year 2015

ADR

$

201.36


$

222.39


$

214.38


$

217.23


$

214.12


Occupancy

76.4

%

84.0

%

83.0

%

77.5

%

80.2

%

RevPAR

$

153.90


$

186.80


$

177.89


$

168.32


$

171.79


Revenues (in thousands)

$

215,971


$

254,256


$

238,516


$

233,840


$

942,583


Hotel Adjusted EBITDA (in thousands)

$

56,752


$

88,997


$

75,242


$

73,076


$

294,067


        % of full Year

19.3

%

30.3

%

25.6

%

24.8

%

100.0

%

Hotel Adjusted EBITDA Margin

26.28

%

35.00

%

31.55

%

31.25

%

31.20

%

Available Rooms

978,255


991,704


1,003,604


1,003,168


3,976,731


 

Earnings Call

The Company will host a conference call to discuss its fourth quarter and full year results on Tuesday, February 23, 2016, at 10:00 a.m. Eastern Time (ET).  To participate in the live call, investors are invited to dial 888-310-1786 (for domestic callers) or 330-863-3357 (for international callers).  The participant passcode is 35693589. 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 one week.

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 29 premium quality hotels with over 10,900 rooms. The Company has strategically positioned its hotels to be operated both under leading global brands such as Hilton, Marriott, and Westin and boutique hotels in the lifestyle segment. 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; 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

(in thousands, except share and per share amounts)






December 31, 2015


December 31, 2014

ASSETS

(unaudited)



Property and equipment, net

$

2,882,176



$

2,764,393


Deferred financing costs, net

8,627



8,023


Restricted cash

59,339



74,730


Due from hotel managers

86,698



79,827


Favorable lease assets, net

23,955



34,274


Prepaid and other assets (1)

46,078



52,739


Cash and cash equivalents

213,584



144,365


Total assets

$

3,320,457



$

3,158,351


LIABILITIES AND STOCKHOLDERS' EQUITY




Liabilities:




Mortgage debt

$

1,177,696



$

1,038,330


Senior unsecured credit facility




Total debt

1,177,696



1,038,330






Deferred income related to key money, net

23,568



21,561


Unfavorable contract liabilities, net

74,657



76,220


Due to hotel managers

65,350



59,169


Dividends declared and unpaid

25,599



20,922


Accounts payable and accrued expenses (2)

128,982



113,162


Total other liabilities

318,156



291,034


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; 200,741,777 and 199,964,041 shares issued and outstanding at December 31, 2015 and 2014, respectively

2,007



2,000


Additional paid-in capital

2,056,878



2,045,755


Accumulated deficit

(234,280)



(218,768)


Total stockholders' equity

1,824,605



1,828,987


Total liabilities and stockholders' equity

$

3,320,457



$

3,158,351




(1)

Includes $34.0 million of deferred tax assets, $7.6 million of prepaid expenses and $4.5 million of other assets as of December 31, 2015.

(2) 

Includes $70.2 million of deferred ground rent, $21.2 million of deferred tax liabilities, $13.3 million of accrued property taxes, $11.6 million of accrued capital expenditures and $12.7 million of other accrued liabilities as of December 31, 2015.

 

 

DIAMONDROCK HOSPITALITY COMPANY

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)






Three Months Ended
December 31,


Year Ended
December 31,


2015


2014


2015


2014

Revenues:

(unaudited)


(unaudited)


(unaudited)



Rooms

$

168,849



$

162,999



$

673,578



$

628,870


Food and beverage

52,511



48,780



208,173



195,077


Other

12,439



11,848



49,239



48,915


Total revenues

233,799



223,627



930,990



872,862


Operating Expenses:








Rooms

40,654



41,088



163,549



162,870


Food and beverage

34,253



33,547



137,297



135,402


Management fees

7,967



7,945



30,633



30,027


Other hotel expenses

80,236



75,492



317,623



295,826


Depreciation and amortization

26,125



24,074



101,143



99,650


Impairment losses





10,461




Hotel acquisition costs

4



898



949



2,177


Corporate expenses

6,272



6,387



24,061



22,267


Gain on insurance proceeds







(1,825)


Gain on litigation settlement, net







(10,999)


Total operating expenses, net

195,511



189,431



785,716



735,395


Operating profit

38,288



34,196



145,274



137,467










Interest income

(174)



(151)



(359)



(3,027)


Interest expense

13,721



14,462



52,684



58,278


Other income, net

(34)





(329)




Gain on repayments of notes receivable

(3,927)





(3,927)



(13,550)


Loss on early extinguishment of debt



1,555





1,616


Gain on sales of hotel properties, net



(49,719)





(50,969)


Gain on hotel property acquisition







(23,894)


Total other expenses (income), net

9,586



(33,853)



48,069



(31,546)


Income before income taxes

28,702



68,049



97,205



169,013


Income tax expense

(2,999)



(4,433)



(11,575)



(5,636)


Net income

$

25,703



$

63,616



$

85,630



$

163,377


Earnings per share:








Basic earnings per share

$

0.14



$

0.32



$

0.43



$

0.83


Diluted earnings per share

$

0.14



$

0.32



$

0.43



$

0.83










Weighted-average number of common shares outstanding:








Basic

200,856,136


196,568,830


200,796,678


195,943,813

Diluted

201,516,336


197,406,834


201,459,934


196,682,981

 

 

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 favorable and unfavorable contract assets and liabilities recorded in conjunction with certain acquisitions. 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 our 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 Hotel and Oak Brook Hills Resort Loan: We excluded the gains from the repayments of the Allerton loan in 2014 and the Oak Brooks Hills Resort loan in 2015 because we believe that they do not reflect the underlying performance of the Company.
  • 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, hotel pre-opening costs, hotel manager transition costs, lease preparation costs, contract termination fees, severance costs, gains or losses from legal settlements, bargain purchase gains, and gains from insurance proceeds.

In addition, to derive Adjusted EBITDA we exclude gains or losses on dispositions and impairment losses because we believe that including them in EBITDA does not reflect the ongoing performance of our hotels. Additionally, the gains or losses on dispositions 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. Furthermore, the gain on repayment of note receivable in 2015, which is related to the Oak Brook Hills Resort loan, is reported net of income tax expense.

The following tables are reconciliations of our GAAP net income to EBITDA and Adjusted EBITDA (in thousands):    


Three Months Ended  
December 31,


Year Ended 
December 31,


2015


2014


2015


2014

Net income

$

25,703



$

63,616



$

85,630



$

163,377


Interest expense

13,721



14,462



52,684



58,278


Income tax expense

2,999



4,433



11,575



5,636


Real estate related depreciation and amortization

26,125



24,074



101,143



99,650


EBITDA

68,548



106,585



251,032



326,941


Non-cash ground rent

1,461



1,573



5,915



6,453


Non-cash amortization of favorable and unfavorable contract liabilities, net

(516)



(353)



(1,651)



(1,410)


Impairment losses





10,461




Gain on insurance proceeds







(1,825)


Gain on hotel property acquisition







(23,894)


Loss on early extinguishment of debt



1,555





1,616


Gain on sales of hotel properties, net



(49,719)





(50,969)


Gain on litigation settlement (1)







(10,999)


Gain on repayment of notes receivable

(3,927)





(3,927)



(13,550)


Reversal of previously recognized Allerton income







(453)


Hotel acquisition costs

4



898



949



2,177


Hotel manager transition and pre-opening costs (2)

420



286



1,708



953


Lease preparation costs (3)

1,061





1,061




Severance costs (4)

(100)



(53)



328



736


Adjusted EBITDA

$

66,951



$

60,772



$

265,876



$

235,776




(1) 

Includes $14.0 million of settlement proceeds, net of a $1.2 million contingency fee paid to our legal counsel and $1.8 million of legal fees and other costs incurred over the course of the legal proceedings.  The $1.8 million of legal fees and other costs were previously recorded as corporate expenses and the repayment of those costs through the settlement proceeds is recorded as a reduction of corporate expenses.

(2) 

Classified as other hotel expenses on the consolidated statements of operations.

(3) 

Represents the costs incurred to remove tenant improvements from a recently vacated retail space at the Lexington Hotel.

(4) 

Amounts recognized in 2015 are classified as other hotel expenses on the consolidated statements of operations.  Amounts recognized in 2014 are classified as corporate expenses on the consolidated statements of operations.

 

 


Full Year 2016 Guidance


Low End


High End

Net income

$

107,500



$

118,500


Interest expense

47,000



46,000


Income tax expense

7,000



11,000


Real estate related depreciation and amortization

100,500



99,500


EBITDA

262,000



275,000


Non-cash ground rent

4,800



4,800


Non-cash amortization of favorable and unfavorable contracts, net

(1,800)



(1,800)


Adjusted EBITDA

$

265,000



$

278,000


 

 

The following tables are reconciliations of our GAAP net income to FFO and Adjusted FFO (in thousands):


Three Months Ended 
December 31,


Year Ended
December 31,










2015


2014


2015


2014

Net income

$

25,703



$

63,616



$

85,630



$

163,377


Real estate related depreciation and amortization

26,125



24,074



101,143



99,650


Gain on sales of hotel properties, net



(49,719)





(50,969)


Impairment losses





10,461




FFO

51,828



37,971



197,234



212,058


Non-cash ground rent

1,461



1,573



5,915



6,453


Non-cash amortization of favorable and unfavorable contract liabilities, net

(516)



(353)



(1,651)



(1,410)


Gain on insurance proceeds







(1,825)


Gain on hotel property acquisition







(23,894)


Loss on early extinguishment of debt



1,555





1,616


Gain on litigation settlement (1)







(10,999)


Gain on repayment of notes receivable (2)

(2,317)





(2,317)



(13,550)


Hotel acquisition costs

4



898



949



2,177


Hotel manager transition and pre-opening costs (3)

420



286



1,708



953


Reversal of previously recognized Allerton income







(453)


Severance costs (4)

(100)



(53)



328



736


Lease preparation costs (5)

1,061





1,061




Fair value adjustments to debt instruments

10



(90)



125



(355)


Adjusted FFO

$

51,851



$

41,787



$

203,352



$

171,507


Adjusted FFO per diluted share

$

0.26



$

0.21



$

1.01



$

0.87




(1)

Includes $14.0 million of settlement proceeds, net of a $1.2 million contingency fee paid to our legal counsel and $1.8 million of legal fees and other costs incurred over the course of the legal proceedings.  The $1.8 million of legal fees and other costs were previously recorded as corporate expenses and the repayment of those costs through the settlement proceeds is recorded as a reduction of corporate expenses.

(2)

Gain on repayment of note receivable in 2015 is related to the repayment of the Oak Brook Hills Resort loan, is reported net of income tax expense.

(3) 

Classified as other hotel expenses on the consolidated statements of operations.

(4) 

Amounts recognized in 2015 are classified as other hotel expenses on the consolidated statements of operations.  Amounts recognized in 2014 are classified as corporate expenses on the consolidated statements of operations.

(5) 

Represents the costs incurred to remove tenant improvements from a recently vacated retail space at the Lexington Hotel.

 

 


Full Year 2016 Guidance


Low End


High End

Net income

$

107,500



$

118,500


Real estate related depreciation and amortization

100,500



99,500


FFO

208,000



218,000


Non-cash ground rent

4,800



4,800


Non-cash amortization of favorable and unfavorable contract liabilities, net

(1,800)



(1,800)


Adjusted FFO

$

211,000



$

221,000


Adjusted FFO per diluted share

$

1.04



$

1.09


 

 

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, and the non-cash amortization of our unfavorable contract liabilities. 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 - Pro Forma (1)

(unaudited and in thousands)       






Three Months Ended December 31,


Year Ended December 31,


2015


2014


%
Change


2015


2014


%
Change













ADR

$

217.23



$

215.07



1.0

%


$

213.74



$

206.58



3.5

%

Occupancy

77.5

%


75.9

%


1.6

%


79.9

%


79.0

%


0.9

%

RevPAR

$

168.32



$

163.19



3.1

%


$

170.87



$

163.26



4.7

%













Revenues:












Rooms

$

168,849



$

163,186



3.5

%


$

667,778



$

636,488



4.9

%

Food and beverage

52,511



49,386



6.3

%


209,491



197,962



5.8

%

Other

12,439



11,541



7.8

%


49,627



47,470



4.5

%

Total revenues

$

233,799



$

224,113



4.3

%


$

926,896



$

881,920



5.1

%

Operating Expenses:












Rooms departmental expenses

$

40,654



$

40,383



0.7

%


$

162,019



$

159,954



1.3

%

Food and beverage departmental expenses

34,253



33,548



2.1

%


138,297



135,881



1.8

%

Other direct departmental

4,103



4,967



(17.4)

%


17,199



19,543



(12.0)

%

General and administrative

18,832



17,651



6.7

%


72,716



68,422



6.3

%

Utilities

6,207



6,870



(9.7)

%


27,141



28,251



(3.9)

%

Repairs and maintenance

9,548



9,417



1.4

%


36,928



37,167



(0.6)

%

Sales and marketing

16,363



15,711



4.1

%


64,726



59,944



8.0

%

Franchise fees

6,043



4,873



24.0

%


21,714



17,363



25.1

%

Base management fees

5,906



5,593



5.6

%


23,148



22,029



5.1

%

Incentive management fees

2,091



2,473



(15.4)

%


7,440



8,347



(10.9)

%

Property taxes

11,657



10,012



16.4

%


45,995



40,171



14.5

%

Ground rent

3,774



3,757



0.5

%


15,149



15,012



0.9

%

Other fixed expenses

2,236



2,573



(13.1)

%


11,284



11,158



1.1

%

Severance costs

(100)





(100.0)

%


328





100.0

%

Lease preparation costs (2)

1,061





100.0

%


1,061





100.0

%

Hotel manager transition and pre-opening costs

420



286



46.9

%


1,708



953



79.2

%

Total hotel operating expenses

163,048



158,114



3.1

%


646,853



624,195



3.6

%

Hotel EBITDA

$

70,751



$

65,999



7.2

%


$

280,043



$

257,725



8.7

%

Non-cash ground rent

1,461



1,573



(7.1)

%


5,945



6,330



(6.1)

%

Non-cash amortization of unfavorable contract liabilities

(516)



(353)



46.2

%


(1,570)



(1,410)



11.3

%

Severance costs

(100)





(100.0)

%


328





100.0

%

Lease preparation costs (2)

1,061





100.0

%


1,061





100.0

%

Hotel manager transition and pre-opening costs (3)

420



286



46.9

%


1,708



953



79.2

%

Hotel Adjusted EBITDA

$

73,077



$

67,505



8.3

%


$

287,515



$

263,598



9.1

%



(1) 

Pro forma assumes the Company owned each of its 29 hotels since January 1, 2014 but excludes the Hilton Garden Inn Times Square Central from January 1, 2015 to August 31, 2015, since the hotel opened for business on September 1, 2014.

(2)

Represents the costs incurred to remove tenant improvements from a recently vacated retail space at the Lexington Hotel.

(3)

Classified as other hotel expenses on the consolidated statements of operations.

 

 

Market Capitalization as of December 31, 2015

(in thousands)


Enterprise Value






Common equity capitalization (at December 31, 2015 closing price of $9.65/share)


$

1,942,843

Consolidated debt


1,177,696

Cash and cash equivalents


(213,584)

Total enterprise value


$

2,906,955

Share Reconciliation






Common shares outstanding


200,742

Unvested restricted stock held by management and employees


475

Share grants under deferred compensation plan held by directors


114

Combined shares outstanding


201,331

 

 


Debt Summary as of February 23, 2016

(dollars in thousands)


Property


Interest
Rate


Term


Outstanding
Principal


Maturity

Courtyard Manhattan / Fifth Avenue


6.48%


Fixed


48,203


June 2016

Marriott Salt Lake City Downtown


4.25%


Fixed


59,748


November 2020

Hilton Minneapolis


5.46%


Fixed


90,281


May 2021

Westin Washington D.C. City Center


3.99%


Fixed


68,468


January 2023

The Lodge at Sonoma, a Renaissance Resort & Spa


3.96%


Fixed


29,440


April 2023

Westin San Diego


3.94%


Fixed


67,415


April 2023

Courtyard Manhattan / Midtown East


4.40%


Fixed


86,000


August 2024

Renaissance Worthington


3.66%


Fixed


85,000


May 2025

JW Marriott Denver at Cherry Creek


4.33%


Fixed


65,000


July 2025

Westin Boston Waterfront Hotel


4.36%


Fixed


204,216


November 2025

Total Weighted-Average Interest Fixed Rate Debt


4.51%




$

803,771












Lexington Hotel New York


LIBOR + 2.25


Variable


170,368


October 2017 (1)

Total mortgage debt






$

974,139



Senior unsecured credit facility


LIBOR + 1.75


Variable


60,000


January 2017 (2)

Total debt




$

1,034,139



Total Weighted-Average Interest Rate


4.08%









(1)

The loan may be extended for two additional one-year terms subject to the satisfaction of certain conditions and the payment of an extension fee.

(2)

The credit facility may be extended for an additional year upon the payment of applicable fees and the satisfaction of certain customary conditions.      

 

 


Pro Forma Operating Statistics – Fourth Quarter



ADR


Occupancy


RevPAR


Hotel Adjusted EBITDA Margin



4Q 2015

4Q 2014

B/(W)


4Q 2015

4Q 2014

B/(W)


4Q 2015

4Q 2014

B/(W)


4Q 2015

4Q 2014

B/(W)

Atlanta Alpharetta Marriott


$

168.92


$

156.78


7.7

%


66.9

%

70.6

%

(3.7)

%


$

113.06


$

110.73


2.1

%


32.24

%

33.14

%

-90 bps

Bethesda Marriott Suites


$

159.65


$

167.41


(4.6)

%


65.4

%

67.7

%

(2.3)

%


$

104.49


$

113.37


(7.8)

%


24.23

%

27.94

%

-371 bps

Boston Westin


$

249.00


$

253.31


(1.7)

%


72.4

%

62.1

%

10.3

%


$

180.37


$

157.19


14.7

%


33.01

%

29.38

%

363 bps

Hilton Boston Downtown


$

275.67


$

273.43


0.8

%


80.9

%

77.9

%

3.0

%


$

223.14


$

213.00


4.8

%


38.16

%

35.89

%

227 bps

Hilton Burlington


$

164.97


$

167.53


(1.5)

%


76.7

%

70.3

%

6.4

%


$

126.48


$

117.74


7.4

%


40.65

%

35.68

%

497 bps

Renaissance Charleston


$

200.84


$

206.57


(2.8)

%


81.9

%

90.4

%

(8.5)

%


$

164.55


$

186.70


(11.9)

%


35.73

%

35.97

%

-24 bps

Hilton Garden Inn Chelsea


$

256.57


$

254.58


0.8

%


97.9

%

93.9

%

4.0

%


$

251.21


$

239.01


5.1

%


40.84

%

38.86

%

198 bps

Chicago Marriott


$

226.57


$

220.43


2.8

%


70.2

%

73.0

%

(2.8)

%


$

159.13


$

160.91


(1.1)

%


26.56

%

24.18

%

238 bps

Chicago Gwen


$

210.42


$

236.52


(11.0)

%


75.1

%

83.6

%

(8.5)

%


$

158.13


$

197.67


(20.0)

%


14.81

%

35.18

%

-2037 bps

Courtyard Denver Downtown


$

199.38


$

189.64


5.1

%


75.8

%

81.6

%

(5.8)

%


$

151.15


$

154.80


(2.4)

%


48.50

%

47.59

%

91 bps

Courtyard Fifth Avenue


$

288.74


$

304.92


(5.3)

%


91.8

%

91.4

%

0.4

%


$

264.92


$

278.78


(5.0)

%


26.76

%

34.75

%

-799 bps

Courtyard Midtown East


$

296.05


$

311.35


(4.9)

%


93.3

%

92.4

%

0.9

%


$

276.13


$

287.65


(4.0)

%


37.54

%

39.95

%

-241 bps

Fort Lauderdale Westin


$

181.10


$

175.14


3.4

%


83.8

%

81.3

%

2.5

%


$

151.83


$

142.40


6.6

%


34.93

%

20.03

%

1490 bps

Frenchman's Reef


$

226.93


$

230.72


(1.6)

%


78.9

%

79.3

%

(0.4)

%


$

178.95


$

183.02


(2.2)

%


22.01

%

16.90

%

511 bps

JW Marriott Denver Cherry Creek


$

259.26


$

253.39


2.3

%


82.9

%

79.8

%

3.1

%


$

214.98


$

202.30


6.3

%


39.16

%

30.70

%

846 bps

Inn at Key West


$

200.91


$

199.53


0.7

%


71.7

%

88.5

%

(16.8)

%


$

144.15


$

176.53


(18.3)

%


33.23

%

52.18

%

-1895 bps

Key West Sheraton Suites


$

242.83


$

224.26


8.3

%


79.9

%

88.9

%

(9.0)

%


$

193.91


$

199.30


(2.7)

%


40.54

%

37.88

%

266 bps

Lexington Hotel New York


$

275.82


$

279.30


(1.2)

%


94.5

%

96.6

%

(2.1)

%


$

260.74


$

269.92


(3.4)

%


29.16

%

38.74

%

-958 bps

Hilton Minneapolis


$

153.29


$

142.59


7.5

%


77.4

%

65.7

%

11.7

%


$

118.71


$

93.63


26.8

%


28.43

%

18.68

%

975 bps

Orlando Airport Marriott


$

109.70


$

104.97


4.5

%


79.9

%

78.9

%

1.0

%


$

87.68


$

82.77


5.9

%


25.19

%

24.38

%

81 bps

Hotel Rex


$

228.89


$

226.66


1.0

%


76.0

%

83.6

%

(7.6)

%


$

173.92


$

189.52


(8.2)

%


33.39

%

35.87

%

-248 bps

Salt Lake City Marriott


$

154.13


$

144.64


6.6

%


63.2

%

64.8

%

(1.6)

%


$

97.41


$

93.79


3.9

%


26.80

%

27.70

%

-90 bps

Shorebreak


$

198.68


$

196.24


1.2

%


74.0

%

73.1

%

0.9

%


$

146.95


$

143.50


2.4

%


25.91

%

18.68

%

723 bps

The Lodge at Sonoma


$

290.87


$

263.44


10.4

%


79.3

%

78.8

%

0.5

%


$

230.59


$

207.62


11.1

%


27.76

%

26.81

%

95 bps

Hilton Garden Inn Times Square Central


$

300.04


$

282.51


6.2

%


97.9

%

99.0

%

(1.1)

%


$

293.88


$

279.67


5.1

%


49.94

%

54.63

%

-469 bps

Vail Marriott


$

289.38


$

260.15


11.2

%


49.7

%

50.2

%

(0.5)

%


$

143.88


$

130.61


10.2

%


23.45

%

22.50

%

95 bps

Westin San Diego


$

179.44


$

160.22


12.0

%


82.7

%

75.0

%

7.7

%


$

148.38


$

120.08


23.6

%


32.50

%

30.09

%

241 bps

Westin Washington D.C. City Center


$

199.69


$

214.54


(6.9)

%


86.4

%

72.6

%

13.8

%


$

172.62


$

155.77


10.8

%


35.49

%

29.79

%

570 bps

Renaissance Worthington


$

181.38


$

176.80


2.6

%


67.5

%

64.5

%

3.0

%


$

122.49


$

114.08


7.4

%


31.20

%

29.71

%

149 bps

Pro Forma Total (1)


$

217.23


$

215.07


1.0

%


77.5

%

75.9

%

1.6

%


$

168.32


$

163.19


3.1

%


31.26

%

30.12

%

114 bps

































(1) 

Assumes all hotels were owned as of January 1, 2014.

 

 

Pro Forma Operating Statistics – Full Year



ADR


Occupancy


RevPAR


Hotel Adjusted EBITDA Margin



2015

2014

B/(W)


2015

2014

B/(W)


2015

2014

B/(W)


2015

2014

B/(W)

Atlanta Alpharetta Marriott


$

165.19


$

162.70


1.5

%


72.9

%

71.2

%

1.7

%


$

120.41


$

115.77


4.0

%


35.45

%

34.75

%

70 bps

Bethesda Marriott Suites


$

166.92


$

165.09


1.1

%


66.7

%

66.3

%

0.4

%


$

111.32


$

109.43


1.7

%


26.08

%

25.30

%

78 bps

Boston Westin


$

242.09


$

231.05


4.8

%


78.7

%

75.3

%

3.4

%


$

190.49


$

174.09


9.4

%


31.68

%

28.27

%

341 bps

Hilton Boston Downtown


$

284.07


$

257.70


10.2

%


83.8

%

87.6

%

(3.8)

%


$

238.16


$

225.75


5.5

%


39.36

%

36.64

%

272 bps

Hilton Burlington


$

171.23


$

169.05


1.3

%


78.2

%

75.4

%

2.8

%


$

133.87


$

127.47


5.0

%


40.72

%

40.47

%

25 bps

Renaissance Charleston


$

214.33


$

205.00


4.6

%


88.4

%

90.8

%

(2.4)

%


$

189.51


$

186.23


1.8

%


36.18

%

34.79

%

139 bps

Hilton Garden Inn Chelsea


$

230.79


$

227.49


1.5

%


95.3

%

94.3

%

1.0

%


$

219.97


$

214.59


2.5

%


33.97

%

38.24

%

-427 bps

Chicago Marriott


$

220.81


$

209.77


5.3

%


74.2

%

75.0

%

(0.8)

%


$

163.89


$

157.30


4.2

%


24.44

%

23.52

%

92 bps

Chicago Gwen


$

218.19


$

226.27


(3.6)

%


74.7

%

83.4

%

(8.7)

%


$

162.98


$

188.77


(13.7)

%


23.60

%

34.53

%

-1093 bps

Courtyard Denver Downtown


$

203.39


$

188.52


7.9

%


79.5

%

83.7

%

(4.2)

%


$

161.75


$

157.72


2.6

%


47.95

%

48.18

%

-23 bps

Courtyard Fifth Avenue


$

268.65


$

280.14


(4.1)

%


89.5

%

89.8

%

(0.3)

%


$

240.46


$

251.54


(4.4)

%


22.72

%

27.24

%

-452 bps

Courtyard Midtown East


$

269.83


$

284.04


(5.0)

%


90.6

%

91.2

%

(0.6)

%


$

244.38


$

259.12


(5.7)

%


31.94

%

34.35

%

-241 bps

Fort Lauderdale Westin


$

181.87


$

179.83


1.1

%


85.7

%

82.8

%

2.9

%


$

155.93


$

148.94


4.7

%


33.38

%

21.94

%

1144 bps

Frenchman's Reef


$

248.64


$

242.12


2.7

%


82.8

%

84.8

%

(2.0)

%


$

205.97


$

205.28


0.3

%


24.19

%

22.79

%

140 bps

JW Marriott Denver Cherry Creek


$

268.64


$

254.30


5.6

%


81.4

%

82.4

%

(1.0)

%


$

218.61


$

209.64


4.3

%


35.09

%

32.31

%

278 bps

Inn at Key West


$

220.78


$

207.28


6.5

%


84.3

%

88.9

%

(4.6)

%


$

186.22


$

184.35


1.0

%


48.53

%

53.52

%

-499 bps

Key West Sheraton Suites


$

254.59


$

235.84


8.0

%


88.3

%

88.2

%

0.1

%


$

224.72


$

207.93


8.1

%


42.39

%

38.14

%

425 bps

Lexington Hotel New York


$

248.16


$

246.72


0.6

%


93.3

%

92.3

%

1.0

%


$

231.62


$

227.67


1.7

%


27.19

%

32.79

%

-560 bps

Hilton Minneapolis


$

148.85


$

146.15


1.8

%


77.6

%

73.6

%

4.0

%


$

115.44


$

107.56


7.3

%


24.75

%

24.51

%

24 bps

Orlando Airport Marriott


$

116.93


$

106.86


9.4

%


78.9

%

78.7

%

0.2

%


$

92.21


$

84.09


9.7

%


28.30

%

23.83

%

447 bps

Hotel Rex


$

236.40


$

214.57


10.2

%


82.8

%

85.4

%

(2.6)

%


$

195.84


$

183.20


6.9

%


36.05

%

35.56

%

49 bps

Salt Lake City Marriott


$

157.23


$

146.54


7.3

%


71.1

%

68.5

%

2.6

%


$

111.82


$

100.44


11.3

%


32.71

%

31.12

%

159 bps

Shorebreak


$

224.73


$

210.35


6.8

%


79.5

%

80.9

%

(1.4)

%


$

178.67


$

170.23


5.0

%


30.73

%

27.22

%

351 bps

The Lodge at Sonoma


$

279.80


$

267.50


4.6

%


82.7

%

78.7

%

4.0

%


$

231.39


$

210.59


9.9

%


28.82

%

28.10

%

72 bps

Hilton Garden Inn Times Square Central (1)


$

306.84


$

284.97


7.7

%


97.8

%

92.1

%

5.7

%


$

300.13


$

262.43


14.4

%


48.91

%

53.07

%

-416 bps

Vail Marriott


$

266.93


$

251.62


6.1

%


66.2

%

65.2

%

1.0

%


$

176.71


$

164.10


7.7

%


33.73

%

32.60

%

113 bps

Westin San Diego


$

185.87


$

166.12


11.9

%


85.2

%

82.8

%

2.4

%


$

158.36


$

137.62


15.1

%


33.72

%

31.81

%

191 bps

Westin Washington D.C. City Center


$

211.55


$

208.35


1.5

%


83.7

%

74.0

%

9.7

%


$

177.09


$

154.18


14.9

%


35.77

%

30.86

%

491 bps

Renaissance Worthington


$

181.30


$

176.19


2.9

%


69.6

%

68.3

%

1.3

%


$

126.22


$

120.35


4.9

%


34.42

%

32.00

%

242 bps

Pro Forma Total (2)


$

213.74


$

206.58


3.5

%


79.9

%

79.0

%

0.9

%


$

170.87


$

163.26


4.7

%


31.02

%

29.89

%

113 bps

































(1) 

The hotel opened for business on September 1, 2014.  Amounts for 2015 include operations from September 1, 2015 to December 31, 2015 to reflect the comparable period of 2014.

(2) 

Assumes all hotels were owned as of January 1, 2014 but excludes the Hilton Garden Inn Times Square Central (282 rooms) from January 1, 2015 to August 31, 2015 to reflect the comparable period of 2014.

 

 

Pro Forma Hotel Adjusted EBITDA Reconciliation




Fourth Quarter 2015









Plus:


Plus:


Plus:


Equals:




Total Revenues



Net Income / (Loss)


Depreciation


Interest Expense


Non-Cash
Adjustments(1)


Hotel Adjusted
EBITDA


Atlanta Alpharetta Marriott


$

4,745



$

1,166


$

364


$


$


$

1,530


Bethesda Marriott Suites


$

3,656



$

(1,014)


$

359


$


$

1,541


$

886


Boston Westin


$

23,399



$

3,866


$

2,193


$

1,664


$

2


$

7,725


Hilton Boston Downtown


$

8,865



$

2,168


$

1,191


$


$

24


$

3,383


Hilton Burlington


$

4,315



$

1,275


$

463


$


$

16


$

1,754


Renaissance Charleston


$

2,891



$

806


$

259


$


$

(32)


$

1,033


Hilton Garden Inn Chelsea


$

3,964



$

1,257


$

362


$


$


$

1,619


Chicago Marriott


$

25,623



$

1,142


$

2,950


$

3,110


$

(397)


$

6,805


Chicago Gwen


$

6,232



$

(532)


$

1,455


$


$


$

923


Courtyard Denver Downtown


$

2,658



$

1,004


$

285


$


$


$

1,289


Courtyard Fifth Avenue


$

4,541



$

(124)


$

447


$

831


$

61


$

1,215


Courtyard Midtown East


$

8,293



$

1,423


$

671


$

1,019


$


$

3,113


Fort Lauderdale Westin


$

10,739



$

2,576


$

1,175


$


$


$

3,751


Frenchman's Reef


$

14,454



$

1,516


$

1,666


$


$


$

3,182


JW Marriott Denver Cherry Creek


$

6,397



$

1,256


$

522


$

727


$


$

2,505


Inn at Key West


$

1,652



$

372


$

177


$


$


$

549


Key West Sheraton Suites


$

3,966



$

1,096


$

512


$


$


$

1,608


Lexington Hotel New York


$

18,094



$

(292)


$

3,349


$

1,251


$

969


$

5,277


Minneapolis Hilton


$

14,718



$

1,629


$

1,468


$

1,290


$

(202)


$

4,185


Orlando Airport Marriott


$

6,418



$

949


$

572


$

96


$


$

1,617


Hotel Rex


$

1,707



$

428


$

142


$


$


$

570


Salt Lake City Marriott


$

6,563



$

360


$

725


$

674


$


$

1,759


Shorebreak


$

3,103



$

443


$

376


$


$

(15)


$

804


The Lodge at Sonoma


$

6,697



$

1,172


$

382


$

305


$


$

1,859


Hilton Garden Inn Times Square Central


$

7,742



$

3,089


$

777


$


$


$

3,866


Vail Marriott


$

6,725



$

1,100


$

477


$


$


$

1,577


Westin San Diego


$

8,125



$

895


$

1,025


$

690


$

31


$

2,641


Westin Washington D.C. City Center


$

8,036



$

893


$

1,218


$

741


$


$

2,852


Renaissance Worthington


$

9,481



$

1,565


$

564


$

827


$

2


$

2,958


Pro Forma Total (2)


$

233,799



$

31,484


$

26,126


$

13,225


$

2,000


$

73,077




(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 our favorable lease assets, the non-cash amortization of our unfavorable contract liabilities, union severance payments and lease preparation costs.

(2) 

Assumes all hotels were owned as of January 1, 2014.

 

 

Pro Forma Hotel Adjusted EBITDA Reconciliation




Fourth Quarter 2014









Plus:


Plus:


Plus:


Equals:




Total Revenues



Net Income / (Loss)


Depreciation


Interest Expense


Non-Cash
Adjustments (1)


Hotel Adjusted
EBITDA


Atlanta Alpharetta Marriott


$

4,584



$

1,114


$

405


$


$


$

1,519


Bethesda Marriott Suites


$

3,912



$

(810)


$

362


$


$

1,541


$

1,093


Boston Westin


$

20,491



$

3,808


$

2,217


$


$

(5)


$

6,020


Hilton Boston Downtown


$

7,680



$

1,636


$

1,078


$


$

42


$

2,756


Hilton Burlington


$

3,915



$

924


$

450


$


$

23


$

1,397


Renaissance Charleston


$

3,547



$

901


$

407


$


$

(32)


$

1,276


Hilton Garden Inn Chelsea


$

3,816



$

1,121


$

362


$


$


$

1,483


Chicago Marriott


$

26,244



$

937


$

2,595


$

3,210


$

(397)


$

6,345


Chicago Gwen


$

7,447



$

1,673


$

947


$


$


$

2,620


Courtyard Denver Downtown


$

2,698



$

1,005


$

279


$


$


$

1,284


Courtyard Fifth Avenue


$

4,768



$

314


$

449


$

842


$

52


$

1,657


Courtyard Midtown East


$

8,650



$

1,754


$

684


$

1,018


$


$

3,456


Fort Lauderdale Westin


$

10,491



$

1,006


$

1,095


$


$


$

2,101


Frenchman's Reef


$

14,616



$

102


$

1,556


$

812


$


$

2,470


JW Marriott Denver Cherry Creek


$

5,788



$

694


$

520


$

563


$


$

1,777


Inn at Key West


$

1,878



$

890


$

90


$


$


$

980


Key West Sheraton Suites


$

4,023



$

1,011


$

513


$


$


$

1,524


Lexington Hotel New York


$

19,026



$

2,608


$

3,364


$

1,367


$

31


$

7,370


Minneapolis Hilton


$

11,384



$

(1,508)


$

2,442


$

1,321


$

(129)


$

2,126


Orlando Airport Marriott


$

5,480



$

(51)


$

571


$

816


$


$

1,336


Hotel Rex


$

1,837



$

520


$

139


$


$


$

659


Salt Lake City Marriott


$

6,314



$

316


$

743


$

690


$


$

1,749


Shorebreak


$

3,084



$

126


$

465


$


$

(15)


$

576


The Lodge at Sonoma


$

6,027



$

901


$

404


$

311


$


$

1,616


Hilton Garden Inn Times Square Central


$

7,329



$

3,227


$

777


$


$


$

4,004


Vail Marriott


$

6,040



$

855


$

504


$


$


$

1,359


Westin San Diego


$

6,978



$

695


$

656


$

703


$

46


$

2,100


Westin Washington D.C. City Center


$

7,104



$

584


$

725


$

760


$

47


$

2,116


Renaissance Worthington


$

8,962



$

1,324


$

597


$

740


$

2


$

2,663


Pro Forma Total (2)


$

224,113



$

27,677


$

25,396


$

13,153


$

1,206


$

67,505




(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 our favorable lease assets and the non-cash amortization of our unfavorable contract liabilities.

(2)  

Assumes all hotels were owned as of January 1, 2014.

 

 

Pro Forma Hotel Adjusted EBITDA Reconciliation




Full Year 2015









Plus:


Plus:


Plus:


Equals:




Total Revenues



Net Income / (Loss)


Depreciation


Interest Expense


Non-Cash
Adjustments(1)


Hotel Adjusted
EBITDA


Atlanta Alpharetta Marriott


$

19,690



$

5,458


$

1,523


$


$


$

6,981


Bethesda Marriott Suites


$

15,116



$

(3,699)


$

1,476


$


$

6,165


$

3,942


Boston Westin


$

94,402



$

19,365


$

8,866


$

1,664


$

9


$

29,904


Hilton Boston Downtown


$

36,376



$

9,536


$

4,643


$


$

137


$

14,316


Hilton Burlington


$

16,708



$

4,888


$

1,832


$


$

84


$

6,804


Renaissance Charleston


$

13,169



$

3,501


$

1,390


$


$

(126)


$

4,765


Hilton Garden Inn Chelsea


$

13,895



$

3,272


$

1,448


$


$


$

4,720


Chicago Marriott


$

103,292



$

4,495


$

9,802


$

12,536


$

(1,589)


$

25,244


Chicago Gwen


$

25,660



$

2,262


$

3,793


$


$


$

6,055


Courtyard Denver Downtown


$

11,212



$

4,240


$

1,136


$


$


$

5,376


Courtyard Fifth Avenue


$

16,376



$

(1,846)


$

1,794


$

3,314


$

458


$

3,720


Courtyard Midtown East


$

29,289



$

2,589


$

2,722


$

4,043


$


$

9,354


Fort Lauderdale Westin


$

44,058



$

10,144


$

4,563


$


$


$

14,707


Frenchman's Reef


$

64,383



$

7,979


$

6,433


$

1,164


$


$

15,576


JW Marriott Denver Cherry Creek


$

25,304



$

4,213


$

2,099


$

2,568


$


$

8,880


Inn at Key West


$

8,373



$

3,364


$

699


$


$


$

4,063


Key West Sheraton Suites


$

18,118



$

5,630


$

2,050


$


$


$

7,680


Lexington Hotel New York


$

64,836



$

(2,143)


$

13,376


$

5,196


$

1,203


$

17,632


Minneapolis Hilton


$

54,247



$

1,426


$

7,645


$

5,164


$

(808)


$

13,427


Orlando Airport Marriott


$

26,646



$

2,757


$

2,285


$

2,500


$


$

7,542


Hotel Rex


$

7,531



$

2,148


$

567


$


$


$

2,715


Salt Lake City Marriott


$

28,894



$

3,764


$

2,987


$

2,699


$


$

9,450


Shorebreak


$

14,286



$

3,099


$

1,349


$


$

(58)


$

4,390


The Lodge at Sonoma


$

26,546



$

4,926


$

1,506


$

1,218


$


$

7,650


Hilton Garden Inn Times Square Central


$

10,486



$

4,093


$

1,036


$


$


$

5,129


Vail Marriott


$

32,787



$

9,121


$

1,939


$


$


$

11,060


Westin San Diego


$

34,295



$

4,562


$

4,078


$

2,756


$

168


$

11,564


Westin Washington D.C. City Center


$

32,248



$

3,716


$

4,754


$

2,970


$

95


$

11,535


Renaissance Worthington


$

38,673



$

7,864


$

2,303


$

3,137


$

8


$

13,312


Pro Forma Total (2)


$

926,896



$

130,724


$

100,094


$

50,929


$

5,746


$

287,515




(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 our favorable lease assets, the non-cash amortization of our unfavorable contract liabilities, union severance payments and lease preparation costs.

(2)

Assumes all hotels were owned as of January 1, 2014 but excludes the Hilton Garden Inn Times Square Central from January 1, 2015 to August 31, 2015.

 

 

Pro Forma Hotel Adjusted EBITDA Reconciliation




Full Year 2014









Plus:


Plus:


Plus:


Equals:




Total Revenues



Net Income / (Loss)


Depreciation


Interest Expense


Non-Cash
Adjustments(1)


Hotel Adjusted
EBITDA


Atlanta Alpharetta Marriott


$

18,216



$

4,709


$

1,621


$


$


$

6,330


Bethesda Marriott Suites


$

14,970



$

(3,832)


$

1,445


$


$

6,174


$

3,787


Boston Westin


$

84,564



$

15,110


$

8,789


$


$

9


$

23,908


Hilton Boston Downtown


$

32,297



$

7,335


$

4,331


$


$

167


$

11,833


Hilton Burlington


$

15,764



$

4,530


$

1,759


$


$

91


$

6,380


Renaissance Charleston


$

13,883



$

3,337


$

1,619


$


$

(126)


$

4,830


Hilton Garden Inn Chelsea


$

13,635



$

3,385


$

1,829


$


$


$

5,214


Chicago Marriott


$

101,624



$

661


$

12,039


$

12,793


$

(1,589)


$

23,904


Chicago Gwen


$

28,802



$

6,120


$

3,824


$


$


$

9,944


Courtyard Denver Downtown


$

10,877



$

4,138


$

1,102


$


$


$

5,240


Courtyard Fifth Avenue


$

17,091



$

(678)


$

1,770


$

3,356


$

207


$

4,655


Courtyard Midtown East


$

30,968



$

4,092


$

2,745


$

3,799


$


$

10,636


Fort Lauderdale Westin


$

43,634



$

5,195


$

4,380


$


$


$

9,575


Frenchman's Reef


$

65,586



$

5,508


$

6,197


$

3,242


$


$

14,947


JW Marriott Denver Cherry Creek


$

23,329



$

3,184


$

2,073


$

2,281


$


$

7,538


Inn at Key West


$

7,911



$

3,874


$

360


$


$


$

4,234


Key West Sheraton Suites


$

16,528



$

4,252


$

2,052


$


$


$

6,304


Lexington Hotel New York


$

64,033



$

1,135


$

13,163


$

6,575


$

125


$

20,998


Minneapolis Hilton


$

49,704



$

(2,094)


$

9,508


$

5,285


$

(517)


$

12,182


Orlando Airport Marriott


$

22,251



$

(341)


$

2,385


$

3,258


$


$

5,302


Hotel Rex


$

7,079



$

1,822


$

695


$


$


$

2,517


Salt Lake City Marriott


$

27,223



$

2,721


$

2,991


$

2,761


$


$

8,473


Shorebreak


$

14,308



$

2,092


$

1,860


$


$

(58)


$

3,894


The Lodge at Sonoma


$

23,854



$

3,905


$

1,558


$

1,241


$


$

6,704


Hilton Garden Inn Times Square Central


$

9,115



$

3,801


$

1,036


$


$


$

4,837


Vail Marriott


$

30,347



$

7,841


$

2,052


$


$


$

9,893


Westin San Diego


$

29,841



$

2,529


$

3,973


$

2,807


$

182


$

9,491


Westin Washington D.C. City Center


$

28,280



$

1,111


$

4,382


$

3,044


$

189


$

8,726


Renaissance Worthington


$

36,206



$

6,107


$

2,516


$

2,955


$

8


$

11,586


Pro Forma Total (2)


$

881,920



$

101,549


$

104,054


$

53,397


$

4,862


$

263,598




(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 our favorable lease assets and the non-cash amortization of our unfavorable contract liabilities.

(2)

Assumes all hotels were owned as of January 1, 2014.

 

SOURCE DiamondRock Hospitality Company



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http://www.diamondrockhospitality.com