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LaSalle Hotel Properties Reports Fourth Quarter And Full Year 2011 Results

Stocks in this article: LHO

LaSalle Hotel Properties (NYSE: LHO) today announced results for the fourth quarter and year ended December 31, 2011. The Company’s results include the following:

  Fourth Quarter   Year-to-Date
2011   2010 2011   2010
($'s in millions except per share/unit data)
Total Revenue $ 179.0 $ 161.7 $ 719.0 $ 600.4
Net income (loss) to common shareholders $ 0.6 $ (17.0 ) $ 12.9 $ (24.8 )
Net income (loss) to common shareholders per diluted share $ 0.01 $ (0.24 ) $ 0.16 $ (0.36 )
EBITDA (1) $ 47.1 $ 27.0 $ 201.0 $ 152.4
Adjusted EBITDA (1) $ 49.2 $ 43.1 $ 204.4 $ 165.0
FFO (1) $ 28.2 $ 23.1 $ 123.3 $ 92.5
Adjusted FFO (1) $ 30.3 $ 26.7 $ 127.7 $ 98.1
FFO per diluted share/unit (1) $ 0.34 $ 0.32 $ 1.52 $ 1.33
Adjusted FFO per diluted share/unit (1) $ 0.36 $ 0.37 $ 1.57 $ 1.41
RevPAR $ 140.10 $ 133.37 $ 147.69 $ 139.11
RevPAR growth 5.0 % 6.2 %
Hotel EBITDA Margin 29.3 % 28.4 % 30.5 % 28.8 %
Hotel EBITDA Margin growth 87bps 173bps

(1) See tables later in press release, which list adjustments that reconcile net income (loss) to earnings before interest, taxes, depreciation and amortization ("EBITDA"), adjusted EBITDA, funds from operations ("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 (loss) later in this press release.

Fourth Quarter Highlights

  • RevPAR: Room revenue per available room (“RevPAR”) for the quarter ended December 31, 2011 increased 5.0 percent to $140.10, as a result of a 5.0 percent increase in average daily rate (“ADR”) to $196.16 and a 0.1 percent increase in occupancy to 71.4 percent. RevPAR at our Washington, DC hotels increased 6.0 percent.
  • RevPAR excluding Indianapolis Marriott Downtown and Lansdowne Resort: The performance of the portfolio was impacted by weak RevPAR at Indianapolis Marriott Downtown and Lansdowne Resort. RevPAR declined at Indianapolis Marriott Downtown due to additional room supply with the construction of a nearly 1000-room competitor which opened in February 2011. Lansdowne Resort also negatively impacted the portfolio’s performance and the Company has recently transitioned the management of this asset to Destination Hotels & Resorts. The portfolio’s RevPAR excluding Indianapolis Marriott Downtown and Lansdowne Resort increased 6.6 percent to $146.11, comprised of a 5.5 percent ADR increase to $201.41 and a 1.1 percent improvement in occupancy to 72.5 percent. By March 2012, the additional supply in Indianapolis will have been in the market for a full year and the Company expects performance at Lansdowne Resort to benefit from the management transition.
  • Hotel EBITDA Margin: The Company’s hotel EBITDA margin for the fourth quarter was 29.3 percent, an 87 basis point improvement compared to the comparable prior year period. The margin increase, excluding the impact of a successful real estate tax appeal for our Chicago properties in the fourth quarter of 2010, was 154 basis points.
  • Adjusted EBITDA: The Company’s adjusted EBITDA was $49.2 million, an increase of 14.1 percent over the fourth quarter of 2010.
  • Adjusted FFO: The Company generated fourth quarter adjusted FFO of $30.3 million, or $0.36 per diluted share/unit, compared to $26.7 million or $0.37 per diluted share/unit for the comparable prior year period.
  • Acquisitions: The Company acquired the Villa Florence in San Francisco on October 5, 2011 for $67.1 million and the Park Central Hotel in New York City on December 29, 2011 for $396.2 million.
  • Capital Markets: The Company completed the following capital markets initiatives during the fourth quarter:
    • On December 14, 2011, the Company entered into a new $750.0 million senior unsecured credit facility. The new facility matures on January 30, 2017, including extensions subject to certain conditions. Additionally, LaSalle Hotel Lessee, Inc., the Company’s taxable REIT subsidiary, refinanced its $25.0 million revolver with no change in capacity, on similar terms as the senior unsecured credit facility.
    • During the fourth quarter, the Company purchased 337,718 of its shares for $6.0 million, an average cost of $17.80.
  • Capital Investments: The Company invested $18.2 million of capital in its hotels, including the continuation of the 33 guestroom expansion at Hotel Amarano Burbank and the commencement of the guestroom renovation at The Liaison Capitol Hill and meeting space renovation at Westin Michigan Avenue.
  • Dividends: On December 15, 2011, the Company declared a fourth quarter 2011 dividend of $0.11 per common share of beneficial interest.

“Our hotels continued to deliver strong results during the fourth quarter,” said Michael D. Barnello, President and Chief Executive Officer of LaSalle Hotel Properties. “Furthermore, we were able to make two acquisitions during the quarter in key US markets and close on our new credit facility with attractive terms, which gives us the capacity and flexibility to make additional opportunistic investments as they emerge.”

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