DiamondRock Hospitality Company Reports Second Quarter 2014 Results And Raises Full Year Guidance

Pro Forma RevPAR Increased 11.9% and Hotel Adjusted EBITDA Increased 17.3%

Aug 08, 2014, 08:00 ET from DiamondRock Hospitality Company

BETHESDA, Md., Aug. 8, 2014 /PRNewswire/ -- DiamondRock Hospitality Company (the "Company") (NYSE: DRH), a lodging-focused real estate investment trust that owns a portfolio of 25 premium hotels in the United States, today announced results of operations for the quarter ended June 30, 2014.

Highlights

  • Pro Forma RevPAR: Pro Forma RevPAR was $169.21, an increase of 11.9% from 2013.
  • Pro Forma Hotel Adjusted EBITDA Margin: Pro Forma Hotel Adjusted EBITDA margin was 32.53%, an increase of 243 basis points from 2013.
  • Pro Forma Hotel Adjusted EBITDA: Pro Forma Hotel Adjusted EBITDA was $74.7 million, an increase of 17.3% from 2013.
  • Adjusted EBITDA: Adjusted EBITDA was $70.9 million, an increase of 13.6% from 2013.
  • Adjusted FFO: Adjusted FFO was $51.9 million and Adjusted FFO per diluted share was $0.26.
  • Dividends: The Company declared a quarterly dividend of $0.1025 per share during the second quarter.

Recent Developments

  • Allerton Prepayment: The $58.5 million senior mortgage loan secured by the Allerton Hotel Chicago was prepaid at par during the second quarter.
  • Litigation Settlement: The Company settled a litigation claim against certain contractors involved with the original construction of the Westin Boston Waterfront Hotel, which resulted in a net gain of $11.0 million during the second quarter.
  • Hotel Refinancing: The Company refinanced the Courtyard Manhattan/Midtown East in July 2014 with a new $86.0 million mortgage bearing interest at 4.4%.

Mark W. Brugger, President and Chief Executive Officer of DiamondRock Hospitality Company, stated, "Our strong second quarter results reflect the initial impact of our significant investments to reposition DiamondRock's portfolio of the past year. Additionally, the combination of our successful internal initiatives to drive performance and an extended lodging recovery enable us to raise our full year guidance.  The Company will benefit from the forthcoming acquisition of the Hilton Garden Inn Times Square Central and recent actions taken to lower our cost of capital. As we continue to execute on our strategy, strengthen our portfolio, and reap the benefits of completed renovations, we remain confident in our ability to deliver growth and strong shareholder returns across the full lodging cycle."

Operating Results     

Please see "Certain Definitions" and "Non-GAAP Financial Measures" attached to this press release for an explanation of the terms "EBITDA," "Adjusted EBITDA," "Hotel Adjusted EBITDA Margin," "FFO" and "Adjusted FFO." Discussions of "Pro Forma" exclude the Oak Brook Hills Resort, which was sold in April 2014.

For the quarter ended June 30, 2014, the Company reported the following:

 Second Quarter

2014

2013

Change

Pro Forma ADR

$202.15

$190.20

6.3 %

Pro Forma Occupancy

83.7 %

79.5 %

4.2 percentage points

Pro Forma RevPAR

$169.21

$151.27

11.9 %

Pro Forma Hotel Adjusted EBITDA Margin

32.53 %

30.10 %

243 basis points

Adjusted EBITDA

$70.9 million

$62.4 million

$8.5 million

Adjusted FFO

$51.9 million

$43.2 million

$8.7 million

Adjusted FFO per diluted share

$0.26

$0.22

$0.04

 

For the six months ended June 30, 2014, the Company reported the following:

Year To Date

2014

2013

Change

Pro Forma ADR

$192.20

$182.10

5.5 %

Pro Forma Occupancy

78.8 %

75.4 %

3.4 percentage points

Pro Forma RevPAR

$151.53

$137.37

10.3 %

Pro Forma Hotel Adjusted EBITDA Margin

28.04 %

26.29 %

175 basis points

Adjusted EBITDA

$108.2 million

$96.7 million

$11.5 million

Adjusted FFO

$81.4 million

$70.0 million

$11.4 million

Adjusted FFO per diluted share

$0.41

$0.36

$0.05

 

Hilton Garden Inn Times Square Update

The Company is under contract to purchase the 282-room hotel being constructed in Times Square for a fixed price of approximately $127 million, or $450,000 per key. The hotel will be branded a Hilton Garden Inn and be operated by Highgate Hotels, the largest operator of hotels in New York City.  The balance of the acquisition price, which is approximately $100 million, is expected to be with corporate cash on hand.  The Company currently expects the hotel to open during September and continues to expect the hotel to generate approximately $5.0 million of Hotel Adjusted EBITDA during 2014.

Courtyard Manhattan/Midtown East Refinancing

In July 2014, the Company entered into a new $86 million mortgage loan secured by the Courtyard Manhattan/Midtown East.  The new loan has a term of 10 years and bears interest at a fixed rate of 4.4%. The new loan is interest-only for the first two years after which principal will amortize over 30 years. The hotel was previously encumbered by a $41.3 million mortgage loan bearing interest at 8.81%.

Sale of Oak Brook Hills Resort        

As disclosed in its previous earnings announcement, the Company sold the 386-room Oak Brook Hills Resort to an unaffiliated third party for $30.1 million on April 14, 2014. In connection with the sale, the Company provided $4 million of seller financing.  The Company recognized a net gain on the sale of the hotel of approximately $1.3 million, which is excluded from Adjusted EBITDA and Adjusted FFO.

Allerton Loan Prepayment

The $58.5 million senior mortgage loan secured by the Allerton Hotel Chicago was prepaid at par on May 21, 2014.  In connection with the prepayment, the Company recognized a gain of $13.6 million, which is excluded from Adjusted EBITDA and Adjusted FFO.

Westin Boston Waterfront Hotel Litigation Settlement

In May 2014, the Company settled a legal action alleging certain issues related to the original construction of the Westin Boston Waterfront Hotel with the contractors and their insurers for $14.0 million in full and complete satisfaction of its claims against the contractors.  The settlement resulted in a net gain of $11.0 million, which is excluded from Adjusted EBITDA and Adjusted FFO. The Company recorded the settlement net of a $1.2 million contingency fee paid to 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 during the three months ended June 30, 2014.

Capital Expenditures

The Company has spent approximately $40.4 million on capital improvements during the six months ended June 30, 2014. The majority of the capital improvements related to the substantial completion of the Company's $140 million capital improvement program, which included the comprehensive renovations of the Westin Washington D.C. City Center, Westin San Diego, Hilton Boston and Hilton Burlington, as well as the guest room renovation at the Hilton Minneapolis.

The Company continues to expect to spend approximately $95 million on capital improvements at its hotels in 2014, of which approximately $45 million relates to the completion of the $140 million capital improvement program and approximately $50 million relates to new 2014 capital projects. The Company does not expect any material disruption from capital projects in 2014.

Balance Sheet

As of June 30, 2014, the Company had $253.9 million of unrestricted cash on hand and approximately $1.1 billion of total debt, which consists primarily of property-specific mortgage debt as well as $41.3 million outstanding borrowings under the Company's $200 million senior unsecured credit facility.  As of today, the Company has over $240 million of unrestricted cash on hand and no outstanding borrowings under its senior unsecured credit facility.

Dividends

The Company's Board of Directors declared a quarterly dividend of $0.1025 per share to stockholders of record as of June 30, 2014.  The dividend was paid on July 10, 2014.

Outlook and Guidance

The Company is providing annual guidance for 2014, but does not undertake to update it for any developments in its business.  Achievement of the anticipated results is subject to the risks disclosed in the Company's filings with the U.S. Securities and Exchange Commission.  The Company's outlook assumes the Hilton Garden Inn Times Square Central opens in September 2014.  The 2014 Pro Forma RevPAR growth excludes the Hilton Garden Inn Times Square Central, which is expected to positively impact the Company's RevPAR by approximately 75 basis points.

The Company is increasing its full year 2014 guidance to incorporate its second quarter outperformance.  The Company now expects the full year 2014 results to be as follows:

Metric

Previous Guidance

Revised Guidance

Low End

High End

Low End

High End

Pro Forma RevPAR Growth

 

9 percent

11 percent

9.5 percent

11.5 percent

Adjusted EBITDA

 

$223 million

$233 million

$225.5 million

$235.5 million

Adjusted FFO

 

$163 million

$170 million

$165 million

$172 million

Adjusted FFO per share

(based on 196.5 million shares)

$0.83 per share

$0.87 per share

$0.84 per share

$0.88 per share

 

The Company expects approximately 26% of full year 2014 Adjusted EBITDA and Adjusted FFO to be earned during the third quarter 2014.

The midpoint of the guidance range above implies Hotel Adjusted EBITDA margin growth of over 265 basis points.  The Company also increased its Pro Forma RevPAR growth outlook excluding the New York City hotels under renovation during 2013 to 6 percent to 8 percent.

Earnings Call

The Company will host a conference call to discuss its second quarter results on Friday, August 8, 2014, at 10:00 a.m. Eastern Time (ET).  To participate in the live call, investors are invited to dial 866-318-8613 (for domestic callers) or 617-399-5132 (for international callers).  The participant passcode is 15358818. A live webcast of the call will be available via the investor relations section of DiamondRock Hospitality Company's website at www.drhc.com or www.earnings.com. A replay of the webcast will also be archived on the website for thirty days.

About the Company

DiamondRock Hospitality Company is a self-advised real estate investment trust (REIT) that is an owner of a leading portfolio of geographically diversified hotels concentrated in top gateway markets and destination resort locations.  The Company owns 25 premium quality hotels with over 10,700 rooms. The Company has strategically positioned its hotels to generally be operated under the leading global brands such as Hilton, Marriott, and Westin. For further information on the Company and its portfolio, please visit DiamondRock Hospitality Company's website at www.drhc.com.

This press release contains forward-looking statements within the meaning of federal securities laws and regulations. These forward-looking statements are identified by their use of terms and phrases such as "believe," "expect," "intend," "project," "forecast," "plan" and other similar terms and phrases, including references to assumptions and forecasts of future results.  Forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors which may cause the actual results to differ materially from those anticipated at the time the forward-looking statements are made.  These risks include, but are not limited to: national and local economic and business conditions, including the potential for additional terrorist attacks, that will affect occupancy rates at the Company's hotels and the demand for hotel products and services; operating risks associated with the hotel business; risks associated with the level of the Company's indebtedness; relationships with property managers; the ability to compete effectively in areas such as access, location, quality of accommodations and room rate structures; changes in travel patterns, taxes and government regulations which influence or determine wages, prices, construction procedures and costs; risks associated with the development of a hotel by a third-party developer; and other risk factors contained in the Company's filings with the Securities and Exchange Commission. Although the Company believes the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that the expectations will be attained or that any deviation will not be material. All information in this release is as of the date of this release, and the Company undertakes no obligation to update any forward-looking statement to conform the statement to actual results or changes in the Company's expectations.

 

DIAMONDROCK HOSPITALITY COMPANY CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share amounts)

June 30, 2014

December 31, 2013

(unaudited)

ASSETS

Property and equipment, at cost

$

3,159,166

$

3,168,088

Less: accumulated depreciation

(623,339)

(600,555)

2,535,827

2,567,533

Deferred financing costs, net

6,310

7,702

Restricted cash

95,672

89,106

Due from hotel managers

81,819

69,353

Note receivable

50,084

Favorable lease assets, net

34,576

39,936

Prepaid and other assets (1)

83,618

79,474

Cash and cash equivalents

253,900

144,584

Total assets

$

3,091,722

$

3,047,772

LIABILITIES AND STOCKHOLDERS' EQUITY

Liabilities:

Mortgage debt

$

1,084,412

$

1,091,861

Senior unsecured credit facility

41,320

Total debt

1,125,732

1,091,861

Deferred income related to key money, net

23,162

23,707

Unfavorable contract liabilities, net

77,157

78,093

Due to hotel managers

51,531

54,225

Dividends declared and unpaid

20,395

16,981

Accounts payable and accrued expenses (2)

96,626

102,214

Total other liabilities

268,871

275,220

Stockholders' Equity:

Preferred stock, $0.01 par value; 10,000,000 shares authorized; no shares issued and outstanding

Common stock, $0.01 par value; 400,000,000 shares authorized; 195,698,858 and 195,470,791 shares issued and outstanding at June 30, 2014 and December 31, 2013, respectively

1,957

1,955

Additional paid-in capital

1,980,498

1,979,613

Accumulated deficit

(285,336)

(300,877)

Total stockholders' equity

1,697,119

1,680,691

Total liabilities and stockholders' equity

$

3,091,722

$

3,047,772

(1) Includes $39.4 million of deferred tax assets, $26.9 million of purchase deposits on the Hilton Garden Inn Times Square, $9.8 million of prepaid expenses and $7.5 million of other assets as of June 30, 2014. (2) Includes $61.9 million of deferred ground rent, $8.3 million of deferred tax liabilities, $9.7 million of accrued property taxes, $5.2 million of accrued capital expenditures and $11.5 million of other accrued liabilities as of June 30, 2014.

 

DIAMONDROCK HOSPITALITY COMPANY

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)

(unaudited)

Three Months Ended June 30,

Six Months Ended June 30,

2014

2013

2014

2013

Revenues:

Rooms

$

165,088

$

150,059

$

294,824

$

270,439

Food and beverage

52,182

55,573

100,793

99,590

Other

12,664

12,382

24,401

23,847

Total revenues

229,934

218,014

420,018

393,876

Operating Expenses:

Rooms

41,143

38,037

79,248

73,217

Food and beverage

34,693

36,974

69,193

69,816

Management fees

8,459

7,184

13,752

11,918

Other hotel expenses

72,393

72,543

144,869

140,200

Depreciation and amortization

25,126

26,607

50,249

52,858

Corporate expenses

4,690

5,301

9,878

13,146

Gain on insurance proceeds

(608)

(1,271)

Gain on litigation settlement, net

(10,999)

(10,999)

Total operating expenses

174,897

186,646

354,919

361,155

Operating profit

55,037

31,368

65,099

32,721

Other Expenses (Income):

Interest income

(957)

(1,659)

(2,609)

(2,944)

Interest expense

14,600

14,456

29,125

28,040

Gain on sale of hotel property

(1,290)

(1,290)

Gain on prepayment of note receivable

(13,550)

(13,550)

Total other (income) expenses, net

(1,197)

12,797

11,676

25,096

Income from continuing operations before income taxes

56,234

18,571

53,423

7,625

Income tax (expense) benefit

(4,318)

(4,451)

2,530

1,695

Income from continuing operations

51,916

14,120

55,953

9,320

Income from discontinued operations, net of taxes

952

1,625

Net income

51,916

15,072

55,953

10,945

Earnings earnings per share:

Continuing operations

$

0.27

$

0.07

$

0.29

$

0.05

Discontinued operations

0.01

0.01

Basic earnings per share

$

0.27

$

0.08

$

0.29

$

0.06

 

Non-GAAP Financial Measures

We use the following non-GAAP financial measures that we believe are useful to investors as key measures of our operating performance: EBITDA, Adjusted EBITDA, FFO and Adjusted FFO. These measures should not be considered in isolation or as a substitute for measures of performance in accordance with GAAP.  EBITDA, Adjusted EBITDA, FFO and Adjusted FFO, as calculated by us, may not be comparable to other companies that do not define such terms exactly as the Company.

EBITDA and FFO

EBITDA represents net income excluding: (1) interest expense; (2) provision for income taxes, including income taxes applicable to sale of assets; and (3) depreciation and amortization. We believe EBITDA is useful to an investor in evaluating our operating performance because it helps investors evaluate and compare the results of our operations from period to period by removing the impact of our capital structure (primarily interest expense) and our asset base (primarily depreciation and amortization) from our operating results. In addition, covenants included in our indebtedness use EBITDA as a measure of financial compliance. We also use EBITDA as one measure in determining the value of hotel acquisitions and dispositions.

The Company computes FFO in accordance with standards established by NAREIT, which defines FFO as net income determined in accordance with GAAP, excluding gains or losses from sales of properties and impairment losses, plus depreciation and amortization. The Company believes that the presentation of FFO provides useful information to investors regarding its operating performance because it is a measure of the Company's operations without regard to specified non-cash items, such as real estate depreciation and amortization and gain or loss on sale of assets.  The Company also uses FFO as one measure in assessing its results.

Adjustments to EBITDA and FFO

We adjust EBITDA and FFO when evaluating our performance because we believe that the exclusion of certain additional recurring and non-recurring items described below provides useful supplemental information to investors regarding our ongoing operating performance and that the presentation of Adjusted EBITDA and Adjusted FFO, when combined with GAAP net income, EBITDA and FFO, is beneficial to an investor's complete understanding of our operating performance.  We adjust EBITDA and FFO for the following items:

  • Non-Cash Ground Rent: We exclude the non-cash expense incurred from the straight line recognition of rent from our ground lease obligations and the non-cash amortization of our favorable lease assets.
  • Non-Cash Amortization of Favorable and Unfavorable Contracts: We exclude the non-cash amortization of the favorable management contract assets recorded in conjunction with our acquisitions of the Westin Washington D.C. City Center, Westin San Diego, and Hilton Burlington and the non-cash amortization of the unfavorable contract liabilities recorded in conjunction with our acquisitions of the Bethesda Marriott Suites, the Chicago Marriott Downtown, the Renaissance Charleston and the Lexington Hotel New York. The amortization of the favorable and unfavorable contracts does not reflect the underlying operating performance of our hotels.
  • Cumulative Effect of a Change in Accounting Principle: Infrequently, the Financial Accounting Standards Board (FASB) promulgates new accounting standards that require the consolidated statement of operations to reflect the cumulative effect of a change in accounting principle. We exclude the effect of these one-time adjustments because they do not reflect its actual performance for that period.
  • Gains or Losses from Early Extinguishment of Debt: We exclude the effect of gains or losses recorded on the early extinguishment of debt because we believe they do not accurately reflect the underlying performance of the Company.
  • Acquisition Costs: We exclude acquisition transaction costs expensed during the period because we believe they do not reflect the underlying performance of the Company.
  • Allerton Loan: We exclude the gain from the prepayment of the loan in 2014. Prior to the prepayment, cash payments received during 2010 and 2011 that were included in Adjusted EBITDA and Adjusted FFO and reduced the carrying basis of the loan were deducted from Adjusted EBITDA and Adjusted FFO, calculated based on a straight-line basis over the anticipated term of the loan.
  • Other Non-Cash and /or Unusual Items: From time to time we incur costs or realize gains that we do not believe reflect the underlying performance of the Company. Such items include, but are not limited to, pre-opening costs, contract termination fees, severance costs, and gains from legal settlements, including the $11.0 million gain on the settlement of the Westin Boston Waterfront litigation, or 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.  Specifically, we exclude the impact of the non-cash amortization of the debt premium recorded in conjunction with the acquisition of the JW Marriott Denver at Cherry Creek and fair market value adjustments to the Company's interest rate cap agreement.

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

Three Months Ended June 30,

Six Months Ended June 30,

2014

2013

2014

2013

Net income (loss)

$

51,916

$

15,072

$

55,953

$

10,945

Interest expense

14,600

14,456

29,125

28,040

Income tax expense (benefit) (1)

4,318

4,606

(2,530)

(1,537)

Real estate related depreciation and amortization (2)

25,126

27,193

50,249

54,026

EBITDA

95,960

61,327

132,797

91,474

Non-cash ground rent

1,596

1,717

3,292

3,410

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

(353)

(354)

(705)

(709)

Gain on sale of hotel property

(1,290)

(1,290)

Gain on insurance proceeds

(608)

(1,271)

Gain on litigation settlement (3)

(10,999)

(10,999)

Gain on prepayment of note receivable

(13,550)

(13,550)

Reversal of previously recognized Allerton income

(162)

(291)

(453)

(581)

Acquisition costs

45

14

81

24

Pre-opening costs

272

286

Severance costs

3,065

Adjusted EBITDA

$

70,911

$

62,413

$

108,188

$

96,683

(1)     Includes $0.2 million of income tax expense reported in discontinued operations for the three and six months ended June 30, 2013. (2)     Includes $0.6 million and $1.2 million of depreciation expense reported in discontinued operations for the three and six months ended June 30, 2013, respectively.  (3)     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 during the three months ended June 30, 2014.

 

Full Year 2014 Guidance

Low End

High End

Net income

$

91,463

$

98,963

Interest expense

59,200

59,100

Income tax expense

900

4,000

Real estate related depreciation and amortization

95,500

95,000

EBITDA

247,063

257,063

Non-cash ground rent

6,400

6,400

Non-cash amortization of favorable and unfavorable contracts, net

(1,400)

(1,400)

Gain on sale of hotel property

(1,290)

(1,290)

Gain on insurance proceeds

(1,271)

(1,271)

Gain on litigation settlement

(10,999)

(10,999)

Gain on prepayment of note receivable

(13,550)

(13,550)

Reversal of previously recognized Allerton income

(453)

(453)

Acquisition costs

200

200

Pre-opening costs

800

800

Adjusted EBITDA

$

225,500

$

235,500

 

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

Three Months Ended June 30,

Six Months Ended June 30,

2014

2013

2014

2013

Net income (loss)

$

51,916

$

15,072

$

55,953

$

10,945

Real estate related depreciation and amortization (1)

25,126

27,193

50,249

54,026

  Gain on sale of hotel property

(1,290)

(1,290)

FFO

75,752

42,265

104,912

64,971

Non-cash ground rent

1,596

1,717

3,292

3,410

Non-cash amortization of unfavorable contract liabilities, net

(353)

(354)

(705)

(709)

Gain on insurance proceeds

(608)

(1,271)

Gain on litigation settlement (2)

(10,999)

(10,999)

Gain on prepayment of note receivable

(13,550)

(13,550)

Acquisition costs

45

14

81

24

Pre-opening costs

272

286

Reversal of previously recognized Allerton income

(162)

(291)

(453)

(581)

Severance costs

3,065

Fair value adjustments to debt instruments

(90)

(125)

(175)

(191)

Adjusted FFO

$

51,903

$

43,226

$

81,418

$

69,989

Adjusted FFO per share

$

0.26

$

0.22

$

0.41

$

0.36

(1)     Includes $0.6 million and $1.2 million of depreciation expense reported in discontinued operations for the three and six months ended June 30, 2013, respectively.  (2)     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 during the three months ended June 30, 2014.

 

Full Year 2014 Guidance

Low End

High End

Net income

$

91,463

$

98,963

Real estate related depreciation and amortization

95,500

95,000

Gain on sale of hotel property

(1,290)

(1,290)

FFO

185,673

192,673

Non-cash ground rent

6,400

6,400

Non-cash amortization of favorable and unfavorable contracts, net

(1,400)

(1,400)

Gain on insurance proceeds

(1,271)

(1,271)

Gain on litigation settlement

(10,999)

(10,999)

Gain on prepayment of note receivable

(13,550)

(13,550)

Reversal of previously recognized Allerton income

(453)

(453)

Acquisition costs

200

200

Pre-opening costs

800

800

Fair value adjustments to debt instruments

(400)

(400)

Adjusted FFO

$

165,000

$

172,000

Adjusted FFO per share

$

0.84

$

0.88

 

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)

(in thousands)

(unaudited)

Three Months Ended June 30,

Six Months Ended June 30,

2014

2013

% Change

2014

2013

% Change

Revenues:

Rooms

$

164,944

$

147,198

12.1

%

$

293,807

$

265,878

10.5

%

Food and beverage

52,010

52,681

(1.3)

%

99,604

95,046

4.8

%

Other

12,687

11,721

8.2

%

24,349

23,061

5.6

%

Total revenues

229,641

211,600

8.5

%

417,760

383,985

8.8

%

Operating Expenses:

Rooms departmental expenses

$

41,120

$

37,103

10.8

%

$

78,680

$

71,601

9.9

%

Food and beverage departmental expenses

34,572

34,947

(1.1)

%

68,118

66,269

2.8

%

Other direct departmental

4,763

5,278

(9.8)

%

10,083

10,505

(4.0)

%

General and administrative

17,001

15,062

12.9

%

32,842

29,848

10.0

%

Utilities

6,346

6,801

(6.7)

%

13,517

13,579

(0.5)

%

Repairs and maintenance

8,986

9,037

(0.6)

%

17,884

17,609

1.6

%

Sales and marketing

15,147

13,490

12.3

%

28,452

25,417

11.9

%

Franchise fees

3,817

2,985

27.9

%

7,125

5,833

22.1

%

Base management fees

5,581

5,010

11.4

%

10,270

9,191

11.7

%

Incentive management fees

2,876

2,003

43.6

%

3,441

2,470

39.3

%

Property taxes

9,428

10,831

(13.0)

%

19,593

20,403

(4.0)

%

Ground rent

3,730

3,605

3.5

%

7,448

7,266

2.5

%

Other fixed expenses

2,806

3,014

(6.9)

%

5,622

5,517

1.9

%

Total hotel operating expenses

$

156,173

$

149,166

4.7

%

$

303,075

$

285,508

6.2

%

Hotel EBITDA

73,468

62,434

17.7

%

114,685

98,477

16.5

%

Non-cash ground rent

1,580

1,609

(1.8)

%

3,169

3,195

(0.8)

%

Non-cash amortization of unfavorable contract liabilities

(353)

(354)

(0.3)

%

(705)

(709)

(0.6)

%

Hotel Adjusted EBITDA

$

74,695

$

63,689

17.3

%

$

117,149

$

100,963

16.0

%

(1)       Pro forma to exclude hotels sold in 2014 and 2013.

 

Market Capitalization as of June 30, 2014

(in thousands)

Enterprise Value

Common equity capitalization (at June 30, 2014 closing price of  $12.82/share)

$

2,517,274

Consolidated debt

1,125,732

Cash and cash equivalents

(253,900)

Total enterprise value

$

3,389,106

Share Reconciliation

Common shares outstanding

195,699

Unvested restricted stock held by management and employees

559

Share grants under deferred compensation plan held by directors

97

Combined shares outstanding

196,355

 

Debt Summary as of June 30, 2014

(dollars in thousands)

Property

Interest Rate

Term

Outstanding Principal

Maturity

Courtyard Manhattan / Midtown East (1)

8.810%

Fixed

$

41,315

October 2014

Lexington Hotel New York

LIBOR + 3.00

Variable

170,368

March 2015

Los Angeles Airport Marriott

5.300%

Fixed

82,600

July 2015

Renaissance Worthington

5.400%

Fixed

53,334

July 2015

JW Marriott Denver at Cherry Creek

6.470%

Fixed

39,226

July 2015

Frenchman's Reef Marriott

5.440%

Fixed

57,136

August 2015

Orlando Airport Marriott

5.680%

Fixed

56,353

January 2016

Chicago Marriott Downtown

5.975%

Fixed

206,799

April 2016

Courtyard Manhattan / Fifth Avenue

6.480%

Fixed

49,282

June 2016

Salt Lake City Marriott Downtown

4.250%

Fixed

62,179

November 2020

Hilton Minneapolis

5.464%

Fixed

93,980

May 2021

Westin Washington D.C. City Center

3.990%

Fixed

71,533

January 2023

The Lodge at Sonoma

3.960%

Fixed

30,377

April 2023

Westin San Diego

3.940%

Fixed

69,568

April 2023

Debt premium (2)

362

Total mortgage debt

$

1,084,412

Senior unsecured credit facility (3)

LIBOR + 1.90

Variable

41,320

January 2017

Total debt

$

1,125,732

(1) We prepaid the mortgage loan in full on July 1, 2014. (2) Non-cash GAAP adjustment recorded upon the assumption of the mortgage loan secured by the JW Marriott Denver Cherry Creek in 2011. (3) Draw on the credit facility was used to fund the prepayment of the mortgage loan secured by the Courtyard Manhattan/Midtown East on July 1, 2014.  As    permitted under our credit facility, the mortgage was transferred to the credit facility until the closing of the new mortgage loan on July 18, 2014.

 

Operating Statistics – Second Quarter

ADR

Occupancy

RevPAR

Hotel Adjusted EBITDA Margin

2Q 2014

2Q 2013

B/(W)

2Q 2014

2Q 2013

B/(W)

2Q 2014

2Q 2013

B/(W)

2Q 2014

2Q 2013

B/(W)

Atlanta Alpharetta Marriott

$

160.85

$

150.62

6.8

%

73.9

%

79.8

%

(5.9)

%

$

118.83

$

120.23

(1.2)

%

35.49

%

37.27

%

-178 bps

Bethesda Marriott Suites

$

169.79

$

167.70

1.2

%

77.6

%

74.1

%

3.5

%

$

131.68

$

124.24

6.0

%

33.70

%

32.39

%

131 bps

Boston Westin

$

244.25

$

222.10

10.0

%

87.1

%

86.7

%

0.4

%

$

212.79

$

192.52

10.5

%

34.51

%

33.37

%

114 bps

Hilton Boston Downtown

$

281.25

$

242.09

16.2

%

94.0

%

85.2

%

8.8

%

$

264.32

$

206.33

28.1

%

42.31

%

38.56

%

375 bps

Hilton Burlington

$

164.39

$

161.90

1.5

%

78.5

%

73.4

%

5.1

%

$

129.06

$

118.88

8.6

%

42.16

%

43.37

%

-121 bps

Renaissance Charleston

$

232.47

$

209.51

11.0

%

95.4

%

92.4

%

3.0

%

$

221.86

$

193.65

14.6

%

41.13

%

39.40

%

173 bps

Hilton Garden Inn Chelsea

$

245.18

$

249.87

(1.9)

%

97.3

%

97.9

%

(0.6)

%

$

238.45

$

244.59

(2.5)

%

45.70

%

49.99

%

-429 bps

Chicago Marriott

$

228.09

$

233.79

(2.4)

%

81.6

%

83.1

%

(1.5)

%

$

186.21

$

194.17

(4.1)

%

30.03

%

28.24

%

179 bps

Chicago Conrad

$

248.55

$

246.72

0.7

%

88.8

%

89.7

%

(0.9)

%

$

220.61

$

221.26

(0.3)

%

40.14

%

41.80

%

-166 bps

Courtyard Denver Downtown

$

192.74

$

181.22

6.4

%

83.5

%

86.4

%

(2.9)

%

$

161.03

$

156.53

2.9

%

51.23

%

49.40

%

183 bps

Courtyard Fifth Avenue

$

299.58

$

284.76

5.2

%

89.7

%

72.8

%

16.9

%

$

268.74

$

207.21

29.7

%

31.90

%

19.66

%

1224 bps

Courtyard Midtown East

$

299.12

$

285.49

4.8

%

93.4

%

77.2

%

16.2

%

$

279.36

$

220.26

26.8

%

38.96

%

30.37

%

859 bps

Frenchman's Reef

$

218.75

$

223.59

(2.2)

%

89.4

%

86.6

%

2.8

%

$

195.47

$

193.58

1.0

%

22.24

%

18.61

%

363 bps

JW Marriott Denver Cherry Creek

$

260.20

$

245.56

6.0

%

84.2

%

82.7

%

1.5

%

$

219.17

$

202.99

8.0

%

33.34

%

31.72

%

162 bps

Lexington Hotel New York

$

259.45

$

215.96

20.1

%

94.0

%

50.6

%

43.4

%

$

243.98

$

109.17

123.5

%

37.96

%

(3.02)

%

4098 bps

Los Angeles Airport Marriott

$

125.61

$

113.41

10.8

%

89.1

%

89.3

%

(0.2)

%

$

111.88

$

101.24

10.5

%

21.17

%

26.23

%

-506 bps

Hilton Minneapolis

$

153.53

$

158.82

(3.3)

%

85.8

%

82.6

%

3.2

%

$

131.68

$

131.24

0.3

%

31.84

%

35.39

%

-355 bps

Oak Brook Hills Resort

$

84.52

$

123.39

(31.5)

%

33.8

%

62.2

%

(28.4)

%

$

28.58

$

76.73

(62.8)

%

(69.02)

%

7.97

%

-7699 bps

Orlando Airport Marriott

$

101.68

$

96.83

5.0

%

79.7

%

75.5

%

4.2

%

$

81.03

$

73.12

10.8

%

22.16

%

26.15

%

-399 bps

Hotel Rex

$

193.88

$

183.81

5.5

%

89.0

%

88.2

%

0.8

%

$

172.64

$

162.17

6.5

%

33.83

%

32.64

%

119 bps

Salt Lake City Marriott

$

141.95

$

141.94

%

70.2

%

75.5

%

(5.3)

%

$

99.71

$

107.10

(6.9)

%

32.34

%

34.91

%

-257 bps

The Lodge at Sonoma

$

261.79

$

252.76

3.6

%

86.5

%

79.4

%

7.1

%

$

226.35

$

200.81

12.7

%

32.33

%

27.94

%

439 bps

Vail Marriott

$

160.65

$

137.79

16.6

%

48.8

%

55.9

%

(7.1)

%

$

78.40

$

77.01

1.8

%

7.61

%

(1.99)

%

960 bps

Westin San Diego

$

163.55

$

152.30

7.4

%

87.4

%

87.4

%

%

$

143.02

$

133.09

7.5

%

32.50

%

34.32

%

-182 bps

Westin Washington D.C. City Center

$

213.86

$

212.42

0.7

%

83.5

%

86.0

%

(2.5)

%

$

178.60

$

182.76

(2.3)

%

38.29

%

40.22

%

-193 bps

Renaissance Worthington

$

176.59

$

174.64

1.1

%

70.0

%

65.7

%

4.3

%

$

123.63

$

114.69

7.8

%

34.60

%

34.56

%

4 bps

Total

$

201.91

$

189.94

6.3

%

83.4

%

79.4

%

4.0

%

$

168.49

$

150.89

11.7

%

32.40

%

30.01

%

239 bps

Pro Forma Total (1)

$

202.15

$

190.20

6.3

%

83.7

%

79.5

%

4.2

%

$

169.21

$

151.27

11.9

%

32.53

%

30.10

%

243 bps

Pro Forma Total Excluding NYC Renovations (2)

$

191.42

$

184.42

3.8

%

82.5

%

81.9

%

0.6

%

$

157.87

$

151.07

4.5

%

31.81

%

31.58

%

23 bps

(1)  Excludes the Oak Brook Hills Resort sold in April 2014. (2)  Also excludes the three New York City hotels under renovation in 2013.

 

Operating Statistics – Year to Date

ADR

Occupancy

RevPAR

Hotel Adjusted EBITDA Margin

YTD 2014

YTD 2013

B/(W)

YTD 2014

YTD 2013

B/(W)

YTD 2014

YTD 2013

B/(W)

YTD 2014

YTD 2013

B/(W)

Atlanta Alpharetta Marriott

$

165.84

$

148.70

11.5

%

70.5

%

76.4

%

(5.9)

%

$

116.93

$

113.62

2.9

%

35.30

%

36.28

%

-98 bps

Bethesda Marriott Suites

$

167.91

$

171.63

(2.2)

%

66.3

%

61.5

%

4.8

%

$

111.28

$

105.51

5.5

%

26.97

%

26.80

%

17 bps

Boston Westin

$

221.08

$

201.73

9.6

%

76.1

%

75.2

%

0.9

%

$

168.24

$

151.69

10.9

%

25.90

%

23.62

%

228 bps

Hilton Boston Downtown

$

234.08

$

208.53

12.3

%

88.4

%

79.2

%

9.2

%

$

206.96

$

165.20

25.3

%

33.51

%

30.41

%

310 bps

Hilton Burlington

$

144.01

$

143.80

0.1

%

71.4

%

67.8

%

3.6

%

$

102.78

$

97.56

5.4

%

34.73

%

35.45

%

-72 bps

Renaissance Charleston

$

208.13

$

197.37

5.5

%

91.5

%

86.7

%

4.8

%

$

190.49

$

171.22

11.3

%

36.19

%

36.44

%

-25 bps

Hilton Garden Inn Chelsea

$

210.94

$

215.12

(1.9)

%

94.4

%

97.0

%

(2.6)

%

$

199.08

$

208.68

(4.6)

%

38.26

%

43.07

%

-481 bps

Chicago Marriott

$

199.04

$

203.06

(2.0)

%

69.8

%

72.9

%

(3.1)

%

$

139.02

$

148.11

(6.1)

%

19.81

%

21.07

%

-126 bps

Chicago Conrad

$

210.89

$

210.74

0.1

%

80.3

%

80.6

%

(0.3)

%

$

169.42

$

169.82

(0.2)

%

27.56

%

27.85

%

-29 bps

Courtyard Denver Downtown

$

183.36

$

167.70

9.3

%

82.5

%

83.0

%

(0.5)

%

$

151.19

$

139.26

8.6

%

47.41

%

44.35

%

306 bps

Courtyard Fifth Avenue

$

260.95

$

260.81

0.1

%

87.2

%

68.6

%

18.6

%

$

227.66

$

178.95

27.2

%

20.70

%

10.28

%

1042 bps

Courtyard Midtown East

$

261.88

$

255.23

2.6

%

90.0

%

75.7

%

14.3

%

$

235.57

$

193.14

22.0

%

30.56

%

22.02

%

854 bps

Frenchman's Reef

$

273.65

$

267.81

2.2

%

90.3

%

88.5

%

1.8

%

$

247.18

$

237.04

4.3

%

29.76

%

26.16

%

360 bps

JW Marriott Denver Cherry Creek

$

248.52

$

236.45

5.1

%

81.7

%

79.2

%

2.5

%

$

203.16

$

187.38

8.4

%

31.46

%

28.85

%

261 bps

Lexington Hotel New York

$

225.90

$

187.61

20.4

%

87.5

%

54.6

%

32.9

%

$

197.60

$

102.45

92.9

%

25.57

%

(7.64)

%

3321 bps

Los Angeles Airport Marriott

$

125.11

$

113.69

10.0

%

91.1

%

85.7

%

5.4

%

$

114.00

$

97.39

17.1

%

21.91

%

22.20

%

-29 bps

Hilton Minneapolis

$

138.01

$

140.82

(2.0)

%

71.4

%

72.2

%

(0.8)

%

$

98.48

$

101.67

(3.1)

%

21.57

%

26.97

%

-540 bps

Oak Brook Hills Resort

$

101.88

$

113.51

(10.2)

%

25.1

%

46.2

%

(21.1)

%

$

25.57

$

52.47

(51.3)

%

(71.01)

%

(9.73)

%

-6128 bps

Orlando Airport Marriott

$

111.88

$

104.10

7.5

%

85.3

%

81.2

%

4.1

%

$

95.39

$

84.48

12.9

%

29.83

%

27.85

%

198 bps

Hotel Rex

$

188.90

$

178.38

5.9

%

83.7

%

82.7

%

1.0

%

$

158.09

$

147.47

7.2

%

29.04

%

29.22

%

-18 bps

Salt Lake City Marriott

$

144.34

$

144.51

(0.1)

%

68.7

%

71.5

%

(2.8)

%

$

99.21

$

103.36

(4.0)

%

31.49

%

35.10

%

-361 bps

The Lodge at Sonoma

$

240.46

$

228.11

5.4

%

72.7

%

71.3

%

1.4

%

$

174.83

$

162.66

7.5

%

22.96

%

20.10

%

286 bps

Vail Marriott

$

298.18

$

265.54

12.3

%

67.7

%

72.5

%

(4.8)

%

$

201.73

$

192.51

4.8

%

39.42

%

36.37

%

305 bps

Westin San Diego

$

163.72

$

153.72

6.5

%

84.7

%

86.0

%

(1.3)

%

$

138.75

$

132.22

4.9

%

31.52

%

33.15

%

-163 bps

Westin Washington D.C. City Center

$

210.80

$

202.87

3.9

%

69.0

%

78.1

%

(9.1)

%

$

145.39

$

158.49

(8.3)

%

30.16

%

35.13

%

-497 bps

Renaissance Worthington

$

178.05

$

174.38

2.1

%

71.0

%

65.2

%

5.8

%

$

126.44

$

113.70

11.2

%

35.26

%

33.00

%

226 bps

Total

$

191.62

$

181.24

5.7

%

77.8

%

74.9

%

2.9

%

$

149.00

$

135.66

9.8

%

27.51

%

25.90

%

161 bps

Pro Forma Total (1)

$

192.20

$

182.10

5.5

%

78.8

%

75.4

%

3.4

%

$

151.53

$

137.37

10.3

%

28.04

%

26.29

%

175 bps

Pro Forma Total Excluding NYC Renovations (2)

$

185.10

$

178.08

3.9

%

77.6

%

77.1

%

0.5

%

$

143.72

$

137.35

4.6

%

28.29

%

28.08

%

21 bps

(1)    Excludes the Oak Brook Hills Resort sold in April 2014. (2)    Also excludes the three New York City hotels under renovation in 2013.

 

Hotel Adjusted EBITDA Reconciliation

Second Quarter 2014

Plus:

Plus:

Plus:

Equals:

Total Revenues

Net Income / (Loss)

Depreciation

Interest Expense

Non-Cash Adjustments (1)

Hotel Adjusted EBITDA

Atlanta Alpharetta Marriott

$

4,581

$

1,219

$

407

$

$

$

1,626

Bethesda Marriott Suites

$

4,413

$

(414)

$

360

$

$

1,541

$

1,487

Boston Westin

$

25,514

$

6,611

$

2,191

$

$

2

$

8,804

Hilton Boston Downtown

$

9,305

$

2,833

$

1,062

$

$

42

$

3,937

Hilton Burlington

$

3,961

$

1,225

$

422

$

$

23

$

1,670

Renaissance Charleston

$

4,075

$

1,300

$

408

$

$

(32)

$

1,676

Hilton Garden Inn Chelsea

$

3,766

$

1,229

$

492

$

$

$

1,721

Chicago Marriott

$

29,534

$

2,820

$

3,255

$

3,192

$

(397)

$

8,870

Chicago Conrad

$

8,188

$

2,322

$

965

$

$

$

3,287

Courtyard Denver Downtown

$

2,754

$

1,137

$

274

$

$

$

1,411

Courtyard Fifth Avenue

$

4,543

$

120

$

439

$

838

$

52

$

1,449

Courtyard Midtown East

$

8,318

$

1,585

$

685

$

971

$

$

3,241

Frenchman's Reef

$

16,246

$

1,240

$

1,563

$

810

$

$

3,613

JW Marriott Denver Cherry Creek

$

6,032

$

922

$

517

$

572

$

$

2,011

Lexington Hotel New York

$

17,124

$

1,473

$

3,265

$

1,732

$

31

$

6,501

Los Angeles Airport Marriott

$

16,762

$

1,449

$

977

$

1,123

$

$

3,549

Minneapolis Hilton

$

14,833

$

1,108

$

2,423

$

1,321

$

(129)

$

4,723

Oak Brook Hills Resort

$

297

$

(220)

$

$

$

15

$

(205)

Orlando Airport Marriott

$

5,546

$

(184)

$

599

$

814

$

$

1,229

Hotel Rex

$

1,673

$

372

$

194

$

$

$

566

Salt Lake City Marriott

$

6,759

$

750

$

745

$

691

$

$

2,186

The Lodge at Sonoma

$

6,517

$

1,415

$

382

$

310

$

$

2,107

Vail Marriott

$

4,101

$

(201)

$

513

$

$

$

312

Westin San Diego

$

7,446

$

576

$

1,097

$

701

$

46

$

2,420

Westin Washington D.C. City Center

$

8,093

$

1,042

$

1,249

$

761

$

47

$

3,099

Renaissance Worthington

$

9,557

$

1,924

$

643

$

738

$

2

$

3,307

Total

$

229,938

$

33,653

$

25,127

$

14,574

$

1,243

$

74,490

Pro Forma Total (2)

$

229,641

$

33,873

$

25,127

$

14,574

$

1,228

$

74,695

(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)       Excludes the Oak Brook Hills Resort sold in April 2014.

 

Pro Forma Hotel Adjusted EBITDA Reconciliation

Second Quarter 2013

Plus:

Plus:

Plus:

Equals:

Total Revenues

Net Income / (Loss)

Depreciation

Interest Expense

Non-Cash Adjustments (1)

Hotel Adjusted EBITDA

Atlanta Alpharetta Marriott

$

4,848

$

1,399

$

408

$

$

$

1,807

Bethesda Marriott Suites

$

4,189

$

(575)

$

375

$

$

1,557

$

1,357

Boston Westin

$

24,595

$

6,076

$

2,128

$

$

3

$

8,207

Hilton Boston Downtown

$

7,401

$

1,376

$

1,436

$

$

42

$

2,854

Hilton Burlington

$

3,618

$

704

$

842

$

$

23

$

1,569

Renaissance Charleston

$

3,533

$

1,026

$

398

$

$

(32)

$

1,392

Hilton Garden Inn Chelsea

$

3,873

$

1,462

$

474

$

$

$

1,936

Chicago Marriott

$

29,911

$

2,328

$

3,317

$

3,201

$

(398)

$

8,448

Chicago Conrad

$

8,374

$

2,576

$

924

$

$

$

3,500

Courtyard Denver Downtown

$

2,686

$

1,064

$

263

$

$

$

1,327

Courtyard Fifth Avenue

$

3,504

$

(648)

$

436

$

848

$

53

$

689

Courtyard Midtown East

$

6,418

$

346

$

622

$

981

$

$

1,949

Frenchman's Reef

$

16,843

$

657

$

1,654

$

824

$

$

3,135

JW Marriott Denver Cherry Creek

$

5,748

$

746

$

488

$

589

$

$

1,823

Lexington Hotel New York

$

7,623

$

(5,125)

$

3,184

$

1,681

$

30

$

(230)

Los Angeles Airport Marriott

$

15,192

$

1,490

$

1,372

$

1,123

$

$

3,985

Minneapolis Hilton

$

15,481

$

2,309

$

1,936

$

1,349

$

(116)

$

5,478

Oak Brook Hills Resort

$

816

$

12

$

38

$

$

15

$

65

Orlando Airport Marriott

$

4,918

$

(335)

$

795

$

826

$

$

1,286

Hotel Rex

$

1,596

$

291

$

230

$

$

$

521

Salt Lake City Marriott

$

7,001

$

1,315

$

735

$

394

$

$

2,444

The Lodge at Sonoma

$

5,609

$

883

$

369

$

315

$

$

1,567

Vail Marriott

$

4,381

$

(692)

$

605

$

$

$

(87)

Westin San Diego

$

7,570

$

774

$

1,064

$

713

$

47

$

2,598

Westin Washington D.C. City Center

$

8,188

$

880

$

1,590

$

777

$

46

$

3,293

Renaissance Worthington

$

8,500

$

1,486

$

699

$

751

$

2

$

2,938

Total

$

212,416

$

21,825

$

26,382

$

14,372

$

1,272

$

63,754

Pro Forma Total (2)

$

211,600

$

21,813

$

26,344

$

14,372

$

1,257

$

63,689

(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)       Excludes the Oak Brook Hills Resort sold in April 2014.

 

Hotel Adjusted EBITDA Reconciliation

Year to Date 2014

Plus:

Plus:

Plus:

Equals:

Total Revenues

Net Income / (Loss)

Depreciation

Interest Expense

Non-Cash Adjustments (1)

Hotel Adjusted EBITDA

Atlanta Alpharetta Marriott

$

9,164

$

2,425

$

810

$

$

$

3,235

Bethesda Marriott Suites

$

7,564

$

(1,774)

$

723

$

$

3,091

$

2,040

Boston Westin

$

41,898

$

6,460

$

4,386

$

$

4

$

10,850

Hilton Boston Downtown

$

14,764

$

2,690

$

2,173

$

$

84

$

4,947

Hilton Burlington

$

6,374

$

1,296

$

873

$

$

45

$

2,214

Renaissance Charleston

$

7,036

$

1,803

$

806

$

$

(63)

$

2,546

Hilton Garden Inn Chelsea

$

6,302

$

1,428

$

983

$

$

$

2,411

Chicago Marriott

$

45,991

$

(2,830)

$

6,370

$

6,364

$

(794)

$

9,110

Chicago Conrad

$

12,751

$

1,599

$

1,915

$

$

$

3,514

Courtyard Denver Downtown

$

5,161

$

1,902

$

545

$

$

$

2,447

Courtyard Fifth Avenue

$

7,662

$

(1,056)

$

869

$

1,670

$

103

$

1,586

Courtyard Midtown East

$

13,987

$

954

$

1,375

$

1,945

$

$

4,274

Frenchman's Reef

$

38,594

$

6,794

$

3,077

$

1,615

$

$

11,486

JW Marriott Denver Cherry Creek

$

11,249

$

1,359

$

1,031

$

1,149

$

$

3,539

Lexington Hotel New York

$

27,787

$

(2,943)

$

6,526

$

3,460

$

63

$

7,106

Los Angeles Airport Marriott

$

33,601

$

3,175

$

1,953

$

2,234

$

$

7,362

Minneapolis Hilton

$

23,474

$

(1,977)

$

4,663

$

2,636

$

(258)

$

5,064

Oak Brook Hills Resort

$

2,263

$

(2,113)

$

383

$

$

123

$

(1,607)

Orlando Airport Marriott

$

12,507

$

883

$

1,226

$

1,622

$

$

3,731

Hotel Rex

$

3,096

$

484

$

415

$

$

$

899

Salt Lake City Marriott

$

13,753

$

1,449

$

1,505

$

1,377

$

$

4,331

The Lodge at Sonoma

$

10,321

$

988

$

764

$

618

$

$

2,370

Vail Marriott

$

17,588

$

5,894

$

1,040

$

$

$

6,934

Westin San Diego

$

14,719

$

966

$

2,185

$

1,398

$

91

$

4,640

Westin Washington D.C. City Center

$

13,350

$

48

$

2,364

$

1,519

$

95

$

4,026

Renaissance Worthington

$

19,067

$

3,959

$

1,288

$

1,472

$

4

$

6,723

Total

$

420,023

$

33,863

$

50,248

$

29,079

$

2,588

$

115,542

Pro Forma Total (2)

$

417,760

$

35,976

$

49,865

$

29,079

$

2,465

$

117,149

(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)       Excludes the Oak Brook Hills Resort sold in April 2014.

 

Hotel Adjusted EBITDA Reconciliation

Year to Date 2013

Plus:

Plus:

Plus:

Equals:

Total Revenues

Net Income / (Loss)

Depreciation

Interest Expense

Non-Cash Adjustments (1)

Hotel Adjusted EBITDA

Atlanta Alpharetta Marriott

$

9,379

$

2,590

$

813

$

$

$

3,403

Bethesda Marriott Suites

$

7,235

$

(2,058)

$

882

$

$

3,115

$

1,939

Boston Westin

$

38,481

$

4,837

$

4,247

$

$

5

$

9,089

Hilton Boston Downtown

$

11,964

$

686

$

2,868

$

$

84

$

3,638

Hilton Burlington

$

5,927

$

373

$

1,683

$

$

45

$

2,101

Renaissance Charleston

$

6,298

$

1,572

$

786

$

$

(63)

$

2,295

Hilton Garden Inn Chelsea

$

6,606

$

1,898

$

947

$

$

$

2,845

Chicago Marriott

$

47,326

$

(2,175)

$

6,556

$

6,386

$

(796)

$

9,971

Chicago Conrad

$

12,540

$

1,657

$

1,836

$

$

$

3,493

Courtyard Denver Downtown

$

4,798

$

1,605

$

523

$

$

$

2,128

Courtyard Fifth Avenue

$

6,039

$

(1,927)

$

750

$

1,689

$

109

$

621

Courtyard Midtown East

$

11,183

$

(690)

$

1,200

$

1,953

$

$

2,463

Frenchman's Reef

$

37,314

$

4,865

$

3,254

$

1,643

$

$

9,762

JW Marriott Denver Cherry Creek

$

10,591

$

905

$

966

$

1,184

$

$

3,055

Lexington Hotel New York

$

14,305

$

(10,863)

$

6,346

$

3,361

$

63

$

(1,093)

Los Angeles Airport Marriott

$

29,331

$

1,558

$

2,720

$

2,233

$

$

6,511

Minneapolis Hilton

$

24,979

$

439

$

3,872

$

2,691

$

(266)

$

6,736

Oak Brook Hills Resort

$

4,294

$

(842)

$

300

$

$

124

$

(418)

Orlando Airport Marriott

$

11,187

$

(49)

$

1,520

$

1,645

$

$

3,116

Hotel Rex

$

2,930

$

394

$

462

$

$

$

856

Salt Lake City Marriott

$

13,710

$

2,551

$

1,471

$

790

$

$

4,812

The Lodge at Sonoma

$

9,445

$

812

$

733

$

353

$

$

1,898

Vail Marriott

$

16,659

$

4,858

$

1,201

$

$

$

6,059

Westin San Diego

$

14,886

$

1,987

$

2,117

$

737

$

94

$

4,935

Westin Washington D.C. City Center

$

14,332

$

211

$

3,177

$

1,555

$

92

$

5,035

Renaissance Worthington

$

16,540

$

2,554

$

1,403

$

1,497

$

4

$

5,458

Total

$

388,279

$

17,748

$

52,633

$

27,717

$

2,610

$

100,545

Pro Forma Total (2)

383,985

$

18,590

$

52,333

$

27,717

$

2,486

$

100,963

(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)     Excludes the Oak Brook Hills Resort sold in April 2014.

 

SOURCE DiamondRock Hospitality Company



RELATED LINKS

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