BETHESDA, Md.–LaSalle Hotel Properties (NYSE: LHO) today announced results for the quarter ended September 30, 2015. The Company’s results are summarized below in two tables. The results in Table 1 reflect the Company’s entire portfolio. Table 2 isolates the negative impact of a one-time event at Park Central New York and WestHouse (collectively “PCNY/WH”) and normalizes the Company’s third quarter performance excluding this event. Throughout this release, the Company estimates the negative impact based on the PCNY/WH actual results for August and September 2015 versus their forecast for that period as of August 1, 2015.
(1) See tables later in press release, which list adjustments that reconcile net income attributable to common shareholders to earnings before interest, taxes, depreciation and amortization (“EBITDA”), adjusted EBITDA, funds from operations attributable to common shareholders and unitholders (“FFO”), FFO per share/unit, adjusted FFO, adjusted FFO per share/unit and hotel EBITDA. EBITDA, adjusted EBITDA, FFO, FFO per share/unit, adjusted FFO, adjusted FFO per share/unit and hotel EBITDA are non-GAAP financial measures. See further discussion of these non-GAAP measures and reconciliations to net income later in this press release.
(2) Third quarter 2014 EBITDA and net income include a $49.7 million disposition gain from the 2014 sale of the Hotel Viking. Year-to-date 2014 EBITDA and net income include the Hotel Viking disposition gain and a $43.5 million disposition gain from the 2014 sale of the Hilton Alexandria Old Town.
(1) As a note to the PCNY/WH interruption impact, income taxes decreased by approximately $3.0 million, which mitigated part of the $7.2 million adjusted EBITDA decline and led to an adjusted FFO reduction of $4.2 million.
Third Quarter Results and Activities
- RevPAR: RevPAR for the quarter ended September 30, 2015 decreased 2.4 percent to $210.74, as a result of a 0.3 percent increase in average daily rate (“ADR”) to $245.71 and a 2.7 percent decrease in occupancy to 85.8 percent. Excluding the lost revenue at PCNY/WH in August and September 2015, RevPAR would have increased by 0.8 percent.
- Hotel EBITDA Margin: The Company’s hotel EBITDA margin for the third quarter decreased 9 basis points from the comparable prior year period to 36.3 percent. Excluding the impact at PCNY/WH, the Company’s hotel EBITDA margin for the third quarter would have increased by 116 basis points from the comparable prior year period to 37.6 percent.
- Adjusted EBITDA: The Company’s adjusted EBITDA was $114.6 million, an increase of 5.2 percent over the third quarter of 2014. Excluding the impact at PCNY/WH, the Company’s adjusted EBITDA would have been $121.8 million, which would have been an increase of 11.8 percent over the third quarter of 2014.
- Adjusted FFO: The Company generated third quarter adjusted FFO of $98.8 million, or $0.87 per diluted share/unit, compared to $88.3 million, or $0.85 per diluted share/unit, for the comparable prior year period, a per share/unit increase of 2.4 percent. Excluding the impact at PCNY/WH, the Company would have generated third quarter adjusted FFO of $103.0 million, or $0.91 per diluted share/unit.
- New Mezzanine Loan: On July 20, the Company provided an $80.0 million junior mezzanine loan (the “Mezzanine Loan”) secured by equity interests in two hotels: Shutters on the Beach and Casa Del Mar, in Santa Monica, California. The interest only Mezzanine Loan bears interest at a variable rate equal to LIBOR plus 775 basis points, which translates to 7.95 percent as of October 21, 2015. The Mezzanine Loan has an initial two-year term, with five one-year extension options. The Mezzanine Loan is subordinate to a $235.0 million first mortgage loan and a $90.0 million senior mezzanine loan secured by the properties that both also have an initial two-year term, with five one-year extension options.
- Westin Copley Place Refinancing: Also on July 20, the Company closed on a new $225.0 million loan secured by the Westin Copley Place. The interest rate will range from LIBOR plus 175 basis points to LIBOR plus 200 basis points, depending on Westin Copley Place’s net cash flow (as defined in the loan agreement). At the current interest rate of LIBOR plus 200 basis points, which translates to 2.20 percent, the Company would save approximately $6.0 million of interest expense annually compared to its previous loan on Westin Copley Place. The loan matures in January 2021, including three extension options, pursuant to certain terms and conditions.
- Dividend: On September 15, the Company declared a third quarter 2015 dividend of $0.45 per common share of beneficial interest. The dividend represents an annual run rate of $1.80 per share and a 5.8 percent yield based on the closing share price on October 21, 2015.
- Share Repurchase: During the third quarter, the Company acquired 184,742 common shares through its share repurchase program at a cost of $5.7 million and a weighted average price of $30.81 per share. The Company has $69.8 million of capacity remaining in its share repurchase program.
- Capital Investments: The Company invested $31.8 million of capital in its hotels, including $14.3 million of deposits for renovations scheduled to begin during the fourth quarter of 2015.
To view full third quarter financial results please visit:
http://phx.corporate-ir.net/phoenix.zhtml?c=63030&p=irol-news1&nyo=0
