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| Supplemental Financial Information
May 4, 2015 |
CORPORATE PROFILE, FINANCIAL DISCLOSURES,
AND SAFE HARBOR
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CORPORATE PROFILE, FINANCIAL DISCLOSURES, AND SAFE HARBOR | | | Page 3 |
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May 4, 2015 |
About Sunstone
Sunstone Hotel Investors, Inc. (NYSE:SHO) is a lodging real estate investment trust (REIT) that, as of May 4, 2015, has interests in 30 hotels held for investment comprised of 14,306 rooms. Sunstone’s hotels are primarily in the upper upscale segment and are operated under nationally recognized brands, such as Marriott, Hilton, Hyatt, Fairmont and Sheraton.
Sunstone’s mission is to create meaningful value for our stockholders by becoming the premier hotel owner. Our values include transparency, trust, ethical conduct, communication and discipline. As demand for lodging generally fluctuates with the overall economy, we seek to employ a balanced, cycle-appropriate corporate strategy that encompasses the following:
| · | | Proactive portfolio management; |
| · | | Intensive asset management; |
| · | | Disciplined external growth; and |
| · | | Continued balance sheet strength. |
Corporate Headquarters
120 Vantis, Suite 350
Aliso Viejo, CA 92656
(949) 330-4000
Company Contacts
John Arabia
President and Chief Executive Officer
(949) 382-3008
Bryan Giglia
Chief Financial Officer
(949) 382-3036
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CORPORATE PROFILE, FINANCIAL DISCLOSURES, AND SAFE HARBOR | | | Page 4 |
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| Supplemental Financial Information
May 4, 2015 |
Forward-Looking Statement
This presentation 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 “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “should,” “will” and other similar terms and phrases, including opinions, 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 that 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: volatility in the debt or equity markets affecting our ability to acquire or sell hotel assets; international, national and local economic and business conditions, including the likelihood of a U.S. recession or global economic slowdown, as well as any type of flu or disease-related pandemic, affecting the lodging and travel industry; the ability to maintain sufficient liquidity and our access to capital markets; potential terrorist attacks or civil unrest, which would affect occupancy rates at our hotels and the demand for hotel products and services; operating risks associated with the hotel business; risks associated with the level of our indebtedness and our ability to meet covenants in our debt and equity agreements; relationships with property managers and franchisors; our ability to maintain our properties in a first-class manner, including meeting capital expenditure requirements; our 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; our ability to identify, successfully compete for and complete acquisitions; the performance of hotels after they are acquired; necessary capital expenditures and our ability to fund them and complete them with minimum disruption; our ability to continue to satisfy complex rules in order for us to qualify as a REIT for federal income tax purposes; and other risks and uncertainties associated with our business described 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 forward-looking information in this presentation is as of May 4, 2015, 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.
This presentation should be read in conjunction with the consolidated financial statements and notes thereto included in our most recent reports on Form 10-K and Form 10-Q. Copies of these reports are available on our website at www.sunstonehotels.com and through the SEC’s Electronic Data Gathering Analysis and Retrieval System (“EDGAR”) at www.sec.gov.
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CORPORATE PROFILE, FINANCIAL DISCLOSURES, AND SAFE HARBOR | | | Page 5 |
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| Supplemental Financial Information
May 4, 2015 |
Non-GAAP Financial Measures
We present the following non-GAAP financial measures that we believe are useful to investors as key measures of our operating performance: Earnings Before Interest Expense, Taxes, Depreciation and Amortization, or EBITDA; Adjusted EBITDA (as defined below); Funds From Operations, or FFO; Adjusted FFO Available to Common Stockholders (as defined below); hotel EBITDA; and hotel EBITDA margin. These measures should not be considered in isolation or as a substitute for measures of performance in accordance with GAAP. EBITDA, Adjusted EBITDA, FFO, Adjusted FFO Available to Common Stockholders, hotel EBITDA and hotel EBITDA margin as calculated by us, may not be comparable to other companies that do not define such terms exactly as the Company. These non-GAAP 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.
EBITDA is a commonly used measure of performance in many industries. We believe EBITDA is useful to investors in evaluating our operating performance because this measure 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. We also believe the use of EBITDA facilitates comparisons between us and other lodging REITs, hotel owners who are not REITs and other capital-intensive companies. In addition, certain covenants included in our indebtedness use EBITDA as a measure of financial compliance. We also use EBITDA as a measure in determining the value of hotel acquisitions and dispositions.
Historically, we have adjusted EBITDA when evaluating our performance because we believe that the exclusion of certain additional items described below provides useful information to investors regarding our operating performance and that the presentation of Adjusted EBITDA, when combined with the primary GAAP presentation of net income, is beneficial to an investor’s complete understanding of our operating performance.
We believe that the presentation of FFO provides useful information to investors regarding our operating performance because it is a measure of our operations without regard to specified non-cash items such as real estate depreciation and amortization, amortization of lease intangibles, any real estate impairment loss and any gain or loss on sale of real estate assets, all of which are based on historical cost accounting and may be of lesser significance in evaluating our current performance. Our presentation of FFO conforms to the National Association of Real Estate Investment Trusts’ (“NAREIT”) definition of FFO. This may not be comparable to FFO reported by other REITs that do not define the terms in accordance with the current NAREIT definition, or that interpret the current NAREIT definition differently that we do.
We also present Adjusted FFO Available to Common Stockholders when evaluating our operating performance because we believe that the exclusion of certain additional items described below provides useful supplemental information to investors regarding our ongoing operating performance, and may facilitate comparisons of operating performance between periods and our peer companies.
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CORPORATE PROFILE, FINANCIAL DISCLOSURES, AND SAFE HARBOR | | | Page 6 |
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| Supplemental Financial Information
May 4, 2015 |
We adjust EBITDA and FFO for the following items, which may occur in any period, and refer to these measures as either Adjusted EBITDA or Adjusted FFO Available to Common Stockholders:
| · | | Amortization of favorable and unfavorable contracts: we exclude the non-cash amortization of the favorable management contract asset recorded in conjunction with our acquisition of the Hilton Garden Inn Chicago Downtown/Magnificent Mile, along with the favorable and unfavorable tenant lease contracts, as applicable, recorded in conjunction with our acquisitions of the Boston Park Plaza, the Hilton Garden Inn Chicago Downtown/Magnificent Mile, the Hilton New Orleans St. Charles, the Hyatt Regency San Francisco and the Marriott Wailea. The amortization of favorable and unfavorable contracts does not reflect the underlying performance of our hotels. |
| · | | Ground rent adjustments: we exclude the non-cash expense incurred from straightlining our ground lease obligations as this expense does not reflect the underlying performance of our hotels. |
| · | | Gains or losses from debt transactions: we exclude the effect of finance charges and premiums associated with the extinguishment of debt, including the acceleration of deferred financing costs from the original issuance of the debt being redeemed or retired because, like interest expense, their removal helps investors evaluate and compare the results of our operations from period to period by removing the impact of our capital structure. |
| · | | Acquisition costs: under GAAP, costs associated with completed acquisitions are expensed in the year incurred. We exclude the effect of these costs because we believe they are not reflective of the ongoing performance of the Company. |
| · | | Non-controlling interests: we deduct the non-controlling partner’s pro rata share of any EBITDA or FFO adjustments related to our consolidated Hilton San Diego Bayfront partnership, as well as any preferred dividends earned by investors from an entity that owns the Doubletree Guest Suites Times Square, including related administrative fees. |
| · | | Cumulative effect of a change in accounting principle: from time to time, the 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 these one-time adjustments because they do not reflect our actual performance for that period. |
| · | | Impairment losses: we exclude the effect of impairment losses because we believe that including them in Adjusted EBITDA and Adjusted FFO Available to Common Stockholders is not consistent with reflecting the ongoing performance of our remaining assets. |
| · | | Other adjustments: we exclude other adjustments such as executive severance costs, lawsuit settlement costs, prior year property tax assessments and/or credits, management company transition costs, lease buyouts, and restructurings and departmental closing costs, including severance, because we do not believe these costs reflect our actual performance for that period and/or the ongoing operations of our hotels. |
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CORPORATE PROFILE, FINANCIAL DISCLOSURES, AND SAFE HARBOR | | | Page 7 |
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May 4, 2015 |
In addition, to derive Adjusted EBITDA we exclude the non-cash expense incurred with the amortization of deferred stock compensation as this expense does not reflect the underlying performance of our hotels. We also include an adjustment for the cash ground lease expense recorded on the Hyatt Chicago Magnificent Mile’s building lease. Upon acquisition of this hotel, we determined that the building lease was a capital lease, and, therefore, we include a portion of the capital lease payment each month in interest expense. We include an adjustment for ground lease expense on capital leases in order to more accurately reflect the operating performance of the Hyatt Chicago Magnificent Mile. We also exclude the effect of gains and losses on the disposition of depreciable assets because we believe that including them in Adjusted EBITDA is not consistent with reflecting the ongoing performance of our assets. In addition, material gains or losses from the depreciated value of the disposed assets could be less important to investors given that the depreciated asset value often does not reflect its market value.
To derive Adjusted FFO Available to Common Stockholders, we also exclude the non-cash gains or losses on our derivatives, as well as preferred stock dividends and any original issuance costs associated with the redemption of preferred stock, and any federal and state taxes associated with the application of net operating loss carryforwards. We believe that these items are not reflective of our ongoing finance costs.
Reconciliations of net income (loss) to EBITDA and Adjusted EBITDA are set forth on page 13 of this supplemental package. Reconciliations of net income (loss) to FFO and Adjusted FFO Available to Common Stockholders are set forth on page 14 of this supplemental package.
Our 30 comparable hotels include all hotels held for investment by the Company as of March 31, 2015, and also include prior ownership results for the Marriott Wailea acquired in July 2014.
Presentation of 2014 information conforms to the industry’s Uniform System of Accounts for the Lodging Industry, Eleventh Revised Edition, which became effective in January 2015.
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CORPORATE PROFILE, FINANCIAL DISCLOSURES, AND SAFE HARBOR | | | Page 8 |
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May 4, 2015 |
CORPORATE FINANCIAL INFORMATION
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CORPORATE FINANCIAL INFORMATION | | | Page 9 |
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| Supplemental Financial Information
May 4, 2015 |
Condensed Consolidated Balance Sheets
Q1 2015 – Q1 2014
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(In thousands) | | March 31, 2015 (1) | | December 31, 2014 (2) | | September 30, 2014 (3) | | June 30, 2014 (4) | | March 31, 2014 (5) |
Assets | | | | | | | | | | |
Investment in hotel properties: | | | | | | | | | | | | | | | |
Land | | $ | 570,011 | | $ | 570,011 | | $ | 570,011 | | $ | 450,304 | | $ | 439,304 |
Buildings & improvements | | | 3,245,398 | | | 3,237,596 | | | 3,216,923 | | | 3,013,911 | | | 2,986,687 |
Furniture, fixtures, & equipment | | | 457,249 | | | 450,057 | | | 447,712 | | | 432,572 | | | 422,676 |
Other | | | 242,508 | | | 217,389 | | | 236,739 | | | 218,300 | | | 224,863 |
| | | 4,515,166 | | | 4,475,053 | | | 4,471,385 | | | 4,115,087 | | | 4,073,530 |
Less accumulated depreciation & amortization | | | (978,041) | | | (936,924) | | | (924,857) | | | (884,192) | | | (845,751) |
| | | 3,537,125 | | | 3,538,129 | | | 3,546,528 | | | 3,230,895 | | | 3,227,779 |
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Other assets, net | | | 31,832 | | | 32,091 | | | 32,292 | | | 47,449 | | | 38,871 |
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Current assets: | | | | | | | | | | | | | | | |
Cash and cash equivalents | | | 156,972 | | | 222,096 | | | 135,427 | | | 360,702 | | | 94,792 |
Restricted cash | | | 87,260 | | | 82,074 | | | 93,124 | | | 87,975 | | | 82,748 |
Other current assets, net | | | 68,168 | | | 50,575 | | | 61,959 | | | 55,939 | | | 52,852 |
Total assets | | $ | 3,881,357 | | $ | 3,924,965 | | $ | 3,869,330 | | $ | 3,782,960 | | $ | 3,497,042 |
*Footnotes on following page.
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CORPORATE FINANCIAL INFORMATION | | | Page 10 |
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| Supplemental Financial Information
May 4, 2015 |
Condensed Consolidated Balance Sheets
Q1 2015 – Q1 2014 (cont.)
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(In thousands) | | March 31, 2015 (1) | | December 31, 2014 (2) | | September 30, 2014 (3) | | June 30, 2014 (4) | | March 31, 2014 (5) |
Liabilities | | | | | | | | | | |
Current liabilities: | | | | | | | | | | | | | | | |
Current portion of notes payable | | $ | 235,970 | | $ | 121,328 | | $ | 159,696 | | $ | 122,835 | | $ | 24,008 |
Other current liabilities | | | 115,668 | | | 177,656 | | | 119,683 | | | 107,198 | | | 102,320 |
Total current liabilities | | | 351,638 | | | 298,984 | | | 279,379 | | | 230,033 | | | 126,328 |
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Notes payable, less current portion | | | 1,187,447 | | | 1,307,964 | | | 1,226,796 | | | 1,269,587 | | | 1,374,394 |
Capital lease obligations, less current portion | | | 15,576 | | | 15,576 | | | 15,576 | | | 15,576 | | | 15,577 |
Other liabilities | | | 34,670 | | | 33,607 | | | 34,934 | | | 34,106 | | | 40,610 |
Total liabilities | | | 1,589,331 | | | 1,656,131 | | | 1,556,685 | | | 1,549,302 | | | 1,556,909 |
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Equity | | | | | | | | | | | | | | | |
Stockholders' equity: | | | | | | | | | | | | | | | |
8% Series D cumulative redeemable preferred stock | | | 115,000 | | | 115,000 | | | 115,000 | | | 115,000 | | | 115,000 |
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Common stock, $0.01 par value, 500,000,000 shares authorized | | | 2,075 | | | 2,048 | | | 2,035 | | | 1,994 | | | 1,814 |
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Additional paid in capital | | | 2,454,720 | | | 2,418,567 | | | 2,397,196 | | | 2,335,709 | | | 2,071,421 |
Retained earnings | | | 304,525 | | | 305,503 | | | 292,250 | | | 260,410 | | | 218,542 |
Cumulative dividends | | | (637,279) | | | (624,545) | | | (547,851) | | | (535,281) | | | (522,911) |
Total stockholders' equity | | | 2,239,041 | | | 2,216,573 | | | 2,258,630 | | | 2,177,832 | | | 1,883,866 |
Non-controlling interest in consolidated joint ventures | | | 52,985 | | | 52,261 | | | 54,015 | | | 55,826 | | | 56,267 |
Total equity | | | 2,292,026 | | | 2,268,834 | | | 2,312,645 | | | 2,233,658 | | | 1,940,133 |
Total liabilities and equity | | $ | 3,881,357 | | $ | 3,924,965 | | $ | 3,869,330 | | $ | 3,782,960 | | $ | 3,497,042 |
| (1) | | As presented on Form 10-Q to be filed in May 2015. |
| (2) | | As presented on Form 10-K filed February 19, 2015. |
| (3) | | As presented on Form 10-Q filed November 4, 2014. |
| (4) | | As presented on Form 10-Q filed August 8, 2014. |
| (5) | | As presented on Form 10-Q filed May 7, 2014. |
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CORPORATE FINANCIAL INFORMATION | | | Page 11 |
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| Supplemental Financial Information
May 4, 2015 |
Consolidated Statements of Operations
Q1 2015/2014
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(In thousands, except per share data) | | | 2015 | | | 2014 |
Revenues | | | | | | |
Room | | $ | 193,291 | | $ | 167,529 |
Food and beverage | | | 72,184 | | | 64,429 |
Other operating | | | 18,910 | | | 15,473 |
Total revenues | | | 284,385 | | | 247,431 |
Operating expenses | | | | | | |
Room | | | 53,842 | | | 48,321 |
Food and beverage | | | 50,219 | | | 47,539 |
Other operating | | | 5,131 | | | 5,023 |
Advertising and promotion | | | 15,360 | | | 12,971 |
Repairs and maintenance | | | 11,558 | | | 10,881 |
Utilities | | | 8,985 | | | 8,289 |
Franchise costs | | | 8,600 | | | 8,077 |
Property tax, ground lease and insurance | | | 23,613 | | | 19,052 |
Property general and administrative | | | 34,449 | | | 28,809 |
Corporate overhead | | | 14,253 | | | 6,559 |
Depreciation and amortization | | | 40,707 | | | 37,615 |
Total operating expenses | | | 266,717 | | | 233,136 |
Operating income | | | 17,668 | | | 14,295 |
Interest and other income | | | 946 | | | 716 |
Interest expense | | | (17,326) | | | (18,283) |
Income (loss) before income taxes | | | 1,288 | | | (3,272) |
Income tax provision | | | (85) | | | (224) |
Net income (loss) | | | 1,203 | | | (3,496) |
Income from consolidated joint ventures attributable to non-controlling interests | | | (2,181) | | | (2,234) |
Preferred stock dividends | | | (2,300) | | | (2,300) |
Loss attributable to common stockholders | | $ | (3,278) | | $ | (8,030) |
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Basic and diluted per share amounts: | | | | | | |
Basic and diluted loss attributable to common stockholders per common share | | $ | (0.02) | | $ | (0.04) |
Basic and diluted weighted average common shares outstanding | | | 206,600 | | | 181,061 |
Dividends declared per common share | | $ | 0.05 | | $ | 0.05 |
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CORPORATE FINANCIAL INFORMATION | | | Page 12 |
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| Supplemental Financial Information
May 4, 2015 |
Reconciliation of Net Income (Loss) to EBITDA and Adjusted EBITDA
Q1 2015/2014
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| | Three Months Ended March 31, |
(In thousands) | | | 2015 | | | 2014 |
Net income (loss) | | $ | 1,203 | | $ | (3,496) |
Operations held for investment: | | | | | | |
Depreciation and amortization | | | 40,707 | | | 37,615 |
Amortization of lease intangibles | | | 1,028 | | | 1,028 |
Interest expense | | | 17,326 | | | 18,283 |
Income tax provision | | | 85 | | | 224 |
Non-controlling interests: | | | | | | |
Income from consolidated joint ventures attributable to non-controlling interests | | | (2,181) | | | (2,234) |
Depreciation and amortization | | | (847) | | | (821) |
Interest expense | | | (378) | | | (567) |
EBITDA | | | 56,943 | | | 50,032 |
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Operations held for investment: | | | | | | |
Amortization of deferred stock compensation | | | 2,895 | | | 1,372 |
Amortization of favorable and unfavorable contracts, net | | | (221) | | | 46 |
Non-cash straightline lease expense | | | 504 | | | 512 |
Capital lease obligation interest - cash ground rent | | | (351) | | | (351) |
Gain on sale of assets | | | — | | | (6) |
Closing costs - completed acquisitions | | | — | | | 56 |
Prior year property tax adjustments, net | | | (188) | | | (2,878) |
Boston Park Plaza relaunch costs | | | 683 | | | — |
Lease termination costs | | | 300 | | | — |
Costs associated with CEO severance | | | 5,257 | | | — |
Non-controlling interests: | | | | | | |
Non-cash straightline lease expense | | | (113) | | | (113) |
Prior year property tax adjustments, net | | | — | | | 696 |
| | | 8,766 | | | (666) |
Adjusted EBITDA | | $ | 65,709 | | $ | 49,366 |
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CORPORATE FINANCIAL INFORMATION | | | Page 13 |
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| Supplemental Financial Information
May 4, 2015 |
Reconciliation of Net Income (Loss) to FFO and Adjusted FFO Available to Common Stockholders
Q1 2015/2014
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| | Three Months Ended March 31, |
(In thousands, except per share data) | | | 2015 | | | 2014 |
Net income (loss) | | $ | 1,203 | | $ | (3,496) |
Operations held for investment: | | | | | | |
Real estate depreciation and amortization | | | 40,310 | | | 37,226 |
Amortization of lease intangibles | | | 1,028 | | | 1,028 |
Gain on sale of assets | | | — | | | (6) |
Non-controlling interests: | | | | | | |
Income from consolidated joint ventures attributable to non-controlling interests | | | (2,181) | | | (2,234) |
Real estate depreciation and amortization | | | (847) | | | (821) |
FFO | | | 39,513 | | | 31,697 |
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Operations held for investment: | | | | | | |
Preferred stock dividends | | | (2,300) | | | (2,300) |
Amortization of favorable and unfavorable contracts, net | | | (221) | | | 46 |
Non-cash straightline lease expense | | | 504 | | | 512 |
Non-cash interest related to gain on derivatives, net | | | — | | | (109) |
Closing costs - completed acquisitions | | | — | | | 56 |
Prior year property tax adjustments, net | | | (188) | | | (2,878) |
Boston Park Plaza relaunch costs | | | 683 | | | — |
Lease termination costs | | | 300 | | | — |
Costs associated with CEO severance | | | 5,257 | | | — |
Amortization of deferred stock compensation associated with CEO severance | | | 1,623 | | | — |
Non-controlling interests: | | | | | | |
Non-cash straightline lease expense | | | (113) | | | (113) |
Prior year property tax adjustments, net | | | — | | | 696 |
| | | 5,545 | | | (4,090) |
Adjusted FFO available to common stockholders | | $ | 45,058 | | $ | 27,607 |
FFO per diluted share | | $ | 0.19 | | $ | 0.17 |
Adjusted FFO available to common stockholders per diluted share | | $ | 0.22 | | $ | 0.15 |
Basic weighted average shares outstanding | | | 206,600 | | | 181,061 |
Shares associated with unvested restricted stock awards | | | 398 | | | 469 |
Diluted weighted average shares outstanding | | | 206,998 | | | 181,530 |
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CORPORATE FINANCIAL INFORMATION | | | Page 14 |
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| Supplemental Financial Information
May 4, 2015 |
Pro Forma Consolidated Statements of Operations
Q1 2015 – Q2 2014, FY 2014
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| | Three Months Ended (1) | | Year Ended (1) |
(Unaudited and in thousands) | | | March 31, | | | Dec. 31, | | | Sept. 30, | | | June 30, | | | Dec. 31, | |
| | | 2015 | | | 2014 | | | 2014 | | | 2014 | | | 2014 | |
Revenues | | | | | | | | | | | | | | | | | |
Room | | | $ | 193,291 | | $ | 204,208 | | $ | 224,926 | | $ | 223,843 | | $ | 833,383 | |
Food and beverage | | | | 72,184 | | | 71,190 | | | 69,134 | | | 76,531 | | | 284,519 | |
Other operating | | | | 18,910 | | | 18,719 | | | 19,918 | | | 18,436 | | | 73,938 | |
Total revenues | | | 284,385 | | | 294,117 | | | 313,978 | | | 318,810 | | | 1,191,840 | |
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Operating Expenses | | | | | | | | | | | | | | | | | |
Room | | | | 53,842 | | | 54,513 | | | 57,064 | | | 55,327 | | | 218,198 | |
Food and beverage | | | | 50,219 | | | 51,242 | | | 50,575 | | | 52,429 | | | 204,148 | |
Other expenses | | | | 107,696 | | | 105,046 | | | 107,480 | | | 105,469 | | | 416,278 | |
Corporate overhead | | | | 14,253 | | | 7,329 | | | 7,177 | | | 7,674 | | | 28,739 | |
Depreciation and amortization | | | | 40,707 | | | 40,257 | | | 40,000 | | | 40,103 | | | 160,105 | |
Total operating expenses | | | 266,717 | | | 258,387 | | | 262,296 | | | 261,002 | | | 1,027,468 | |
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Operating Income | | | | 17,668 | | | 35,730 | | | 51,682 | | | 57,808 | | | 164,372 | |
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Interest and other income | | | | 946 | | | 891 | | | 981 | | | 891 | | | 3,479 | |
Interest expense | | | | (17,326) | | | (17,649) | | | (18,052) | | | (18,331) | | | (72,315) | |
Loss on extinguishment of debt | | | | — | | | (4,107) | | | (531) | | | — | | | (4,638) | |
Income before income taxes and discontinued operations | | | | 1,288 | | | 14,865 | | | 34,080 | | | 40,368 | | | 90,898 | |
Income tax (provision) benefit | | | | (85) | | | (258) | | | 413 | | | (110) | | | (179) | |
Income from continuing operations | | | | 1,203 | | | 14,607 | | | 34,493 | | | 40,258 | | | 90,719 | |
Income (loss) from discontinued operations | | | | — | | | (350) | | | — | | | 5,199 | | | 4,849 | |
Net Income | | | $ | 1,203 | | $ | 14,257 | | $ | 34,493 | | $ | 45,457 | | $ | 95,568 | |
Adjusted EBITDA (2) | | | $ | 65,709 | | $ | 77,838 | | $ | 92,270 | | $ | 98,504 | | $ | 324,973 | |
| (1) | | Includes the Company's ownership results and prior ownership results for the 30 hotel comparable portfolio held for investment by the Company as of March 31, 2015. Includes the reduction of ground lease expense on the Fairmont Newport Beach due to the Company's land acquisition in June 2014, along with prior ownership results for the Marriott Wailea acquired on July 17, 2014. Data for each 2014 period presented has been adjusted to conform to the industry's Uniform System of Accounts for the Lodging Industry, Eleventh Revised Edition, which became effective January 1, 2015. |
| (2) | | The Adjusted EBITDA reconciliation for Q1 2015 can be found on page 13 of this supplemental package. The Adjusted EBITDA reconciliations for Q4 2014 and full year 2014 can be found in the supplemental package furnished on Form 8-K to the SEC on February 17, 2015. The Adjusted EBITDA reconciliations for Q3 2014 and Q2 2014 can be found in the supplemental packages furnished on Form 8-K to the SEC on November 3, 2014, and August 7, 2014, respectively. |
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CORPORATE FINANCIAL INFORMATION | | | Page 15 |
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May 4, 2015 |
EARNINGS GUIDANCE
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EARNINGS GUIDANCE | | | Page 16 |
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| Supplemental Financial Information
May 4, 2015 |
Earnings Guidance for Q2 and FY 2015
The Company is providing guidance at this time, but does not undertake to make updates for any unanticipated developments in its business or changes in the operating environment. Achievement of the anticipated results is subject to risks and uncertainties, including those disclosed in the Company’s filings with the Securities and Exchange Commission. The Company’s guidance does not take into account the impact of any unannounced hotel acquisitions, dispositions, re-brandings, management changes, transition costs, early lease termination costs, prior year property tax assessments and/or credits, debt repurchases or unannounced financings during 2015. The guidance presented takes into account various accounting changes as stipulated by the industry’s Uniform System of Accounts for the Lodging Industry, Eleventh Revised Edition (the “USALI Eleventh Revised Edition”), which became effective in January 2015. Guidance for 2015 Comparable Hotel RevPAR and Comparable Hotel EBITDA Margins has been presented to reflect growth rates compared to prior year as if these 2014 statistics included the USALI Eleventh Revised Edition changes. Actual Comparable Hotel RevPAR and Comparable Hotel EBITDA Margin change from prior year will differ slightly. The Company is presenting 2014 Comparable Hotel RevPAR and Comparable Hotel EBITDA Margins on an as reported basis and on a pro forma basis, which will include the USALI Eleventh Revised Edition changes.
For the second quarter of 2015, the Company expects:
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Metric | Quarter Ended June 30, 2015 Guidance |
Comparable Hotel RevPAR Growth | + 6.0% - 7.5% |
Net Income ($ millions) | $47 - $51 |
Adjusted EBITDA ($ millions) | $103 - $107 |
Adjusted FFO Available to Common Stockholders ($ millions) | $83 - $87 |
Adjusted FFO Available to Common Stockholders per Diluted Share | $0.40 - $0.42 |
Diluted Weighted Average Shares Outstanding | 207,800,000 |
For the full year of 2015, the Company expects:
| | | |
Metric | Prior Full Year 2015 Guidance (1) | Revised Full Year 2015 Guidance | Change in Full Year 2015 Guidance Midpoint |
Comparable Hotel RevPAR Growth | + 5.0% - 7.0% | + 5.0% - 7.0% | 0.00% |
Net Income ($ millions) | $117 - $139 | $109 - $123 | $(12) |
Adjusted EBITDA ($ millions) | $336 - $356 | $344 - $356 | +$4 |
Adjusted FFO Available to Common Stockholders ($ millions) | $254 - $274 | $262 - $274 | +$4 |
Adjusted FFO Available to Common Stockholders per Diluted Share | $1.22 - $1.32 | $1.26 - $1.32 | +$0.02 |
Diluted Weighted Average Shares Outstanding | 207,400,000 | 207,700,000 | 300,000 |
| (1) | | Reflects guidance presented on February 17, 2015. |
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EARNINGS GUIDANCE | | | Page 17 |
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| Supplemental Financial Information
May 4, 2015 |
Earnings Guidance for Q2 and FY 2015
Second quarter and full year 2015 guidance are based in part on the following assumptions:
| · | | Full year guarantee payment of $2 million related to the Marriott Wailea. |
| · | | Full year Comparable Hotel EBITDA Margin (as compared to 2014 adjusted for the USALI Eleventh Revised Edition) expansion of approximately 50 to 100 basis points, which excludes any guarantee payments. |
| · | | Full year corporate overhead expense (excluding stock amortization and one-time expenses related to acquisition closing costs and severance charges) of approximately $22.5 million to $23.5 million. |
| · | | Full year interest expense of approximately $66 million to $67 million, including approximately $3 million in amortization of deferred financing fees. |
| · | | Full year expense of approximately $0.7 million in one-time costs related to the Boston Park Plaza retail, meeting space and lobby relaunch, and $0.3 million in one-time costs related to an early lease termination at the Boston Park Plaza. |
| · | | Full year hotel revenue disruption of $0.5 million to $1.0 million related to cancellations resulting from civil unrest in Baltimore, Maryland. |
| · | | Full year preferred dividends of $9.2 million for the Series D cumulative redeemable preferred stock. |
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EARNINGS GUIDANCE | | | Page 18 |
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| Supplemental Financial Information
May 4, 2015 |
Reconciliation of Net Income to Adjusted EBITDA and Adjusted FFO Available to Common Stockholders
Q2 and FY 2015
Reconciliation of Net Income to Adjusted EBITDA
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| | | Quarter Ended | | | Year Ended |
| | | June 30, 2015 | | | December 31, 2015 |
(In thousands, except per share data) | | | Low | | | High | | | Low | | | High |
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Net income | | $ | 46,500 | | $ | 50,900 | | $ | 108,800 | | $ | 123,100 |
Depreciation and amortization | | | 40,500 | | | 40,500 | | | 162,000 | | | 162,000 |
Amortization of lease intangibles | | | 1,000 | | | 1,000 | | | 4,000 | | | 4,000 |
Interest expense | | | 16,300 | | | 16,300 | | | 66,400 | | | 66,700 |
Income tax provision | | | 100 | | | 100 | | | 1,000 | | | 1,000 |
Non-controlling interests | | | (3,300) | | | (3,700) | | | (11,700) | | | (14,300) |
Amortization of deferred stock compensation | | | 1,900 | | | 1,900 | | | 7,100 | | | 7,100 |
Non-cash straightline lease expense | | | 400 | | | 400 | | | 1,700 | | | 1,700 |
Capital lease obligation interest - cash ground rent | | | (400) | | | (400) | | | (1,400) | | | (1,400) |
Prior year property tax adjustments, net | | | — | | | — | | | (200) | | | (200) |
Boston Park Plaza relaunch costs | | | — | | | — | | | 700 | | | 700 |
Lease termination costs | | | — | | | — | | | 300 | | | 300 |
Costs associated with CEO severance | | | — | | | — | | | 5,300 | | | 5,300 |
Adjusted EBITDA | | $ | 103,000 | | $ | 107,000 | | $ | 344,000 | | $ | 356,000 |
Reconciliation of Net Income to Adjusted FFO Available to Common Stockholders
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Net income | | $ | 46,500 | | $ | 50,900 | | $ | 108,800 | | $ | 123,100 |
Real estate depreciation and amortization | | | 39,900 | | | 39,900 | | | 159,400 | | | 159,400 |
Amortization of lease intangibles | | | 1,000 | | | 1,000 | | | 4,000 | | | 4,000 |
Non-controlling interests | | | (2,900) | | | (3,200) | | | (10,400) | | | (12,700) |
Preferred stock dividends | | | (2,300) | | | (2,300) | | | (9,200) | | | (9,200) |
Non-cash straightline lease expense | | | 400 | | | 400 | | | 1,700 | | | 1,700 |
Prior year property tax adjustments, net | | | — | | | — | | | (200) | | | (200) |
Boston Park Plaza relaunch costs | | | — | | | — | | | 700 | | | 700 |
Lease termination costs | | | — | | | — | | | 300 | | | 300 |
Costs associated with CEO severance | | | — | | | — | | | 5,300 | | | 5,300 |
Amortization of deferred stock compensation associated with CEO severance | | | — | | | — | | | 1,600 | | | 1,600 |
Adjusted FFO available to common stockholders | | $ | 82,600 | | $ | 86,700 | | $ | 262,000 | | $ | 274,000 |
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Adjusted FFO available to common stockholders per diluted share | | $ | 0.40 | | $ | 0.42 | | $ | 1.26 | | $ | 1.32 |
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Diluted weighted average shares outstanding | | | 207,800 | | | 207,800 | | | 207,700 | | | 207,700 |
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EARNINGS GUIDANCE | | | Page 19 |
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| Supplemental Financial Information
May 4, 2015 |
CAPITALIZATION
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| Supplemental Financial Information
May 4, 2015 |
Comparative Capitalization
Q1 2015 – Q1 2014
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| | | March 31, | | | Dec. 31, | | | Sept. 30, | | | June 30, | | | March 31, | |
(In thousands, except per share data) | | | 2015 | | | 2014 | | | 2014 | | | 2014 | | | 2014 | |
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Common Share Price & Dividends | | | | | | | | | | | | | | | | |
At the end of the quarter | | $ | 16.67 | | $ | 16.51 | | $ | 13.82 | | $ | 14.93 | | $ | 13.73 | |
High during quarter ended | | $ | 17.98 | | $ | 17.17 | | $ | 15.17 | | $ | 15.25 | | $ | 14.00 | |
Low during quarter ended | | $ | 16.18 | | $ | 13.42 | | $ | 13.71 | | $ | 13.22 | | $ | 12.46 | |
Common dividends per share (1) | | $ | 0.05 | | $ | 0.36 | | $ | 0.05 | | $ | 0.05 | | $ | 0.05 | |
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Common Shares & Units | | | | | | | | | | | | | | | | |
Common shares outstanding (2) | | | 208,686 | | | 206,650 | | | 205,397 | | | 205,432 | | | 183,349 | |
Units outstanding | | | — | | | — | | | — | | | — | | | — | |
Total common shares and units outstanding | | | 208,686 | | | 206,650 | | | 205,397 | | | 205,432 | | | 183,349 | |
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Capitalization | | | | | | | | | | | | | | | | |
Market value of common equity | | $ | 3,478,793 | | $ | 3,411,792 | | $ | 2,838,583 | | $ | 3,067,094 | | $ | 2,517,379 | |
Liquidation value of preferred equity - Series D | | | 115,000 | | | 115,000 | | | 115,000 | | | 115,000 | | | 115,000 | |
Consolidated debt (3) | | | 1,324,078 | | | 1,429,292 | | | 1,386,492 | | | 1,392,422 | | | 1,398,402 | |
Consolidated total capitalization | | | 4,917,871 | | | 4,956,084 | | | 4,340,075 | | | 4,574,516 | | | 4,030,781 | |
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Non-controlling interest in consolidated debt | | | (56,897) | | | (57,074) | | | (57,248) | | | (57,435) | | | (57,650) | |
Pro rata total capitalization | | $ | 4,860,974 | | $ | 4,899,010 | | $ | 4,282,827 | | $ | 4,517,081 | | $ | 3,973,131 | |
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Consolidated debt to total capitalization | | | 26.9 | % | | 28.8 | % | | 31.9 | % | | 30.4 | % | | 34.7 | % |
Pro rata debt to pro rata total capitalization | | | 26.1 | % | | 28.0 | % | | 31.0 | % | | 29.6 | % | | 33.7 | % |
Consolidated debt and preferred equity to total capitalization | | | 29.3 | % | | 31.2 | % | | 34.6 | % | | 33.0 | % | | 37.5 | % |
Pro rata debt and preferred equity to total capitalization | | | 28.4 | % | | 30.4 | % | | 33.7 | % | | 32.1 | % | | 36.6 | % |
| (1) | | Fourth quarter 2014 dividends were paid in a combination of cash and shares of the Company's common stock, pursuant to elections by individual stockholders. |
| (2) | | Reflects shares outstanding at respective dates. Common shares outstanding at June 30, 2014 includes the effects of the Company's direct issuance of 4,034,970 shares to the seller of the Marriott Wailea in July 2014. |
| (3) | | First quarter 2015 includes the effects of the Company's May 1, 2015 repayment of debt secured by four of its hotels: the Marriott Houston, the Marriott Park City, the Marriott Philadelphia and the Marriott Tysons Corner. |
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| Supplemental Financial Information
May 4, 2015 |
Consolidated Debt Summary Schedule
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(In thousands) | | | | Interest Rate / | | Maturity | | | March 31, 2015 | | | Subsequent | | | May 4, 2015 | | | Balance At |
Debt | | Collateral | | Spread | | Date | | | Balance | | | Event (1) | | | Balance | | | Maturity |
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Fixed Rate Debt | | | | | | | | | | | | | | | | | | |
Secured Mortgage Debt | | Marriott Houston | | 5.34% | | 05/01/2015 | | $ | 20,763 | | $ | (20,763) | | $ | — | | $ | 20,706 |
Secured Mortgage Debt | | Marriott Park City | | 5.34% | | 05/01/2015 | | | 13,535 | | | (13,535) | | | — | | | 13,498 |
Secured Mortgage Debt | | Marriott Philadelphia | | 5.34% | | 05/01/2015 | | | 24,525 | | | (24,525) | | | — | | | 24,457 |
Secured Mortgage Debt | | Marriott Tysons Corner | | 5.34% | | 05/01/2015 | | | 40,516 | | | (40,516) | | | — | | | 40,404 |
Secured Mortgage Debt | | Renaissance Harborplace | | 5.13% | | 01/01/2016 | | | 87,985 | | | — | | | 87,985 | | | 85,227 |
Secured Mortgage Debt | | Hilton North Houston | | 5.66% | | 03/11/2016 | | | 31,105 | | | — | | | 31,105 | | | 30,579 |
Secured Mortgage Debt | | Renaissance Orlando at SeaWorld® | | 5.52% | | 07/01/2016 | | | 75,344 | | | — | | | 75,344 | | | 72,418 |
Secured Mortgage Debt | | Embassy Suites Chicago | | 5.58% | | 03/01/2017 | | | 69,075 | | | — | | | 69,075 | | | 65,756 |
Secured Mortgage Debt | | Marriott Boston Long Wharf | | 5.58% | | 04/11/2017 | | | 176,000 | | | — | | | 176,000 | | | 176,000 |
Secured Mortgage Debt | | Boston Park Plaza | | 4.40% | | 02/01/2018 | | | 115,917 | | | — | | | 115,917 | | | 109,813 |
Secured Mortgage Debt | | Hilton Times Square | | 4.97% | | 11/01/2020 | | | 86,321 | | | — | | | 86,321 | | | 76,145 |
Secured Mortgage Debt | | Renaissance Washington DC | | 5.95% | | 05/01/2021 | | | 123,678 | | | — | | | 123,678 | | | 106,855 |
Secured Mortgage Debt | | JW Marriott New Orleans | | 4.15% | | 12/11/2024 | | | 89,620 | | | — | | | 89,620 | | | 72,071 |
Secured Mortgage Debt | | Embassy Suites La Jolla | | 4.12% | | 01/06/2025 | | | 64,809 | | | — | | | 64,809 | | | 51,987 |
Total Fixed Rate Debt | | | | | | | | | 1,019,193 | | | (99,339) | | | 919,854 | | | 945,916 |
Secured Mortgage Debt | | Doubletree Guest Suites Times Square | | L + 3.25% | | 10/07/2018 | | | 176,634 | | | — | | | 176,634 | | | 167,738 |
Secured Mortgage Debt | | Hilton San Diego Bayfront | | L + 2.25% | | 08/08/2019 | | | 227,590 | | | — | | | 227,590 | | | 213,513 |
Credit Facility | | Unsecured | | L + 1.55% - 2.30% | | 04/02/2019 | | | — | | | — | | | — | | | — |
Total Variable Rate Debt | | | | | | | | | 404,224 | | | — | | | 404,224 | | | 381,251 |
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TOTAL CONSOLIDATED DEBT | | | | | | | | $ | 1,423,417 | | $ | (99,339) | | $ | 1,324,078 | | $ | 1,327,167 |
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Preferred Stock | | | | | | | | | | | | | | | | | | |
Series D cumulative redeemable preferred | | | | 8.00% | | perpetual | | $ | 115,000 | | $ | — | | $ | 115,000 | | | |
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Debt Statistics | | | | | | | | | | | | | | | | | | |
% Fixed Rate Debt | | | | | | | | | 71.6 | % | | | | | 69.5 | % | | |
% Floating Rate Debt | | | | | | | | | 28.4 | % | | | | | 30.5 | % | | |
Average Interest Rate (2) | | | | | | | | | 4.5 | % | | | | | 4.3 | % | | |
Weighted Average Maturity of Debt | | | | | | | | | 3.8 years | | | | | | 3.9 years | | | |
| (1) | | Subsequent Event includes the Company's May 1, 2015 repayment of debt secured by four of its hotels (the Marriott Houston, the Marriott Park City, the Marriott Philadelphia and the Marriott Tysons Corner), and excludes scheduled loan amortization payments on the Company's remaining debt. |
| (2) | | Average Interest Rate on variable-rate debt obligations is calculated based on the variable rates at March 31, 2015, and includes the effect of the Company's interest rate derivative agreements. |
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| Supplemental Financial Information
May 4, 2015 |
Consolidated Amortization and Debt Maturity Schedule
| (1) | | Principal Payment at Maturity and Scheduled Principal Amortization excludes the Company's debt secured by the Marriott Houston, the Marriott Park City, the Marriott Philadelphia and the Marriott Tysons Corner due to its repayment on May 1, 2015. |
| (2) | | Percent of Current Total Capitalization is calculated by dividing the sum of scheduled principal amortization and maturity payments by the March 31, 2015 consolidated total capitalization as presented on page 21. |
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| Supplemental Financial Information
May 4, 2015 |
PROPERTY-LEVEL DATA
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PROPERTY LEVEL DATA | | | Page 24 |
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May 4, 2015 |
Property-Level Data
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Hotel | | Location | | Brand | | Number of
Rooms | | % of Total
Rooms | | Ownership
Interest | | Interest | | Leasehold
Maturity (1) | | Year Acquired |
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| 1 | | Hilton San Diego Bayfront | | California | | Hilton | | 1,190 | | 8.32% | | 75% | | Leasehold | | 2071 | | 2011 |
| 2 | | Boston Park Plaza | | Massachusetts | | Independent | | 1,054 | | 7.37% | | 100% | | Fee Simple | | | | 2013 |
| 3 | | Renaissance Washington DC | | Washington DC | | Marriott | | 807 | | 5.64% | | 100% | | Fee Simple | | | | 2005 |
| 4 | | Hyatt Regency San Francisco | | California | | Hyatt | | 804 | | 5.61% | | 100% | | Fee Simple | | | | 2013 |
| 5 | | Renaissance Orlando at SeaWorld® (2) | | Florida | | Marriott | | 781 | | 5.46% | | 100% | | Fee Simple | | | | 2005 |
| 6 | | Renaissance Harborplace | | Maryland | | Marriott | | 622 | | 4.35% | | 100% | | Leasehold | | 2085 | | 2005 |
| 7 | | Marriott Wailea | | | Hawaii | | Marriott | | 541 | | 3.78% | | 100% | | Fee Simple | | | | 2014 |
| 8 | | Renaissance Los Angeles Airport | | California | | Marriott | | 501 | | 3.50% | | 100% | | Fee Simple | | | | 2007 |
| 9 | | JW Marriott New Orleans (3) | | Louisiana | | Marriott | | 496 | | 3.47% | | 100% | | Leasehold | | 2081 | | 2011 |
| 10 | | Hilton North Houston | | Texas | | Hilton | | 480 | | 3.36% | | 100% | | Fee Simple | | | | 2002 |
| 11 | | Doubletree Guest Suites Times Square | | New York | | Hilton | | 468 | | 3.27% | | 100% | | Leasehold | | 2127 | | 2011 |
| 12 | | Marriott Quincy | | Massachusetts | | Marriott | | 464 | | 3.24% | | 100% | | Fee Simple | | | | 2007 |
| 13 | | Hilton Times Square | | New York | | Hilton | | 460 | | 3.22% | | 100% | | Leasehold | | 2091 | | 2006 |
| 14 | | Fairmont Newport Beach | | California | | Fairmont | | 444 | | 3.10% | | 100% | | Fee Simple | | | | 2005 |
| 15 | | Hyatt Chicago Magnificent Mile | | Illinois | | Hyatt | | 419 | | 2.93% | | 100% | | Leasehold | | 2097 | | 2012 |
| 16 | | Marriott Boston Long Wharf | | Massachusetts | | Marriott | | 412 | | 2.88% | | 100% | | Fee Simple | | | | 2007 |
| 17 | | Hyatt Regency Newport Beach | | California | | Hyatt | | 407 | | 2.85% | | 100% | | Leasehold | | 2048 | | 2002 |
| 18 | | Marriott Tysons Corner | | Virginia | | Marriott | | 396 | | 2.77% | | 100% | | Fee Simple | | | | 2002 |
| 19 | | Marriott Houston | | Texas | | Marriott | | 390 | | 2.73% | | 100% | | Fee Simple | | | | 2002 |
| 20 | | Renaissance Long Beach | | California | | Marriott | | 374 | | 2.61% | | 100% | | Fee Simple | | | | 2005 |
| 21 | | Embassy Suites Chicago | | Illinois | | Hilton | | 368 | | 2.57% | | 100% | | Fee Simple | | | | 2002 |
| 22 | | Hilton Garden Inn Chicago Downtown/Magnificent Mile | | Illinois | | Hilton | | 361 | | 2.52% | | 100% | | Fee Simple | | | | 2012 |
| 23 | | Renaissance Westchester | | New York | | Marriott | | 348 | | 2.43% | | 100% | | Fee Simple | | | | 2010 |
| 24 | | Embassy Suites La Jolla | | California | | Hilton | | 340 | | 2.38% | | 100% | | Fee Simple | | | | 2006 |
| 25 | | Marriott Philadelphia | | Pennsylvania | | Marriott | | 289 | | 2.02% | | 100% | | Fee Simple | | | | 2002 |
| 26 | | Hilton New Orleans St. Charles | | Louisiana | | Hilton | | 252 | | 1.76% | | 100% | | Fee Simple | | | | 2013 |
| 27 | | Marriott Portland | | Oregon | | Marriott | | 249 | | 1.74% | | 100% | | Fee Simple | | | | 2000 |
| 28 | | Sheraton Cerritos | | California | | Sheraton | | 203 | | 1.42% | | 100% | | Leasehold | | 2087 | | 2005 |
| 29 | | Marriott Park City | | Utah | | Marriott | | 199 | | 1.39% | | 100% | | Fee Simple | | | | 1999 |
| 30 | | Courtyard by Marriott Los Angeles | | California | | Marriott | | 187 | | 1.31% | | 100% | | Leasehold | | 2096 | | 1999 |
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| | Total portfolio | | | | | | 14,306 | | 100% | | | | | | | | |
| (1) | | Assumes the full exercise of all lease extensions. |
| (2) | | Reflects 100% economic interest in the Renaissance Orlando at SeaWorld®. |
| (3) | | Hotel is subject to a ground lease that expires in 2081. In addition, it is also subject to a municipal air rights lease that matures in 2044 that applies only to certain balcony space and is not integral to the hotel operation. |
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PROPERTY LEVEL DATA | | | Page 25 |
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May 4, 2015 |
PROPERTY-LEVEL OPERATING STATISTICS
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PROPERTY-LEVEL OPERATING STATISTICS | | | Page 26 |
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| Supplemental Financial Information
May 4, 2015 |
Property-Level Operating Statistics
Q1 2015/2014
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| | Hotels sorted by number of rooms | | ADR | | Occupancy | | RevPAR | |
| | | | For the Three Months Ended March 31, | | For the Three Months Ended March 31, | | For the Three Months Ended March 31, | |
| | | | 2015 | | 2014 | | Variance | | 2015 | | 2014 | | Variance | | 2015 | | 2014 | | Variance | |
| 1 | | Hilton San Diego Bayfront | | | $ | 226.63 | | $ | 211.36 | | 7.2% | | 88.8% | | 88.8% | | 0.0% | | $ | 201.25 | | $ | 187.69 | | 7.2% | |
| 2 | | Boston Park Plaza (1) | | | $ | 139.07 | | $ | 119.50 | | 16.4% | | 57.0% | | 73.0% | | -21.9% | | $ | 79.27 | | $ | 87.24 | | -9.1% | |
| 3 | | Renaissance Washington DC | | | $ | 219.22 | | $ | 214.03 | | 2.4% | | 74.6% | | 76.6% | | -2.6% | | $ | 163.54 | | $ | 163.95 | | -0.2% | |
| 4 | | Hyatt Regency San Francisco (1) | | | $ | 273.43 | | $ | 255.75 | | 6.9% | | 85.0% | | 69.7% | | 22.0% | | $ | 232.42 | | $ | 178.26 | | 30.4% | |
| 5 | | Renaissance Orlando at SeaWorld ® | | | $ | 175.78 | | $ | 168.30 | | 4.4% | | 78.4% | | 81.4% | | -3.7% | | $ | 137.81 | | $ | 137.00 | | 0.6% | |
| 6 | | Renaissance Harborplace | | | $ | 144.64 | | $ | 149.77 | | -3.4% | | 69.8% | | 59.7% | | 16.9% | | $ | 100.96 | | $ | 89.41 | | 12.9% | |
| 7 | | Marriott Wailea | | | $ | 308.02 | | $ | 279.35 | | 10.3% | | 94.0% | | 94.2% | | -0.2% | | $ | 289.54 | | $ | 263.15 | | 10.0% | |
| 8 | | Renaissance Los Angeles Airport | | | $ | 142.75 | | $ | 124.36 | | 14.8% | | 88.4% | | 92.2% | | -4.1% | | $ | 126.19 | | $ | 114.66 | | 10.1% | |
| 9 | | JW Marriott New Orleans | | | $ | 215.73 | | $ | 216.10 | | -0.2% | | 86.3% | | 81.5% | | 5.9% | | $ | 186.17 | | $ | 176.12 | | 5.7% | |
| 10 | | Hilton North Houston | | | $ | 118.28 | | $ | 118.78 | | -0.4% | | 85.6% | | 85.0% | | 0.7% | | $ | 101.25 | | $ | 100.96 | | 0.3% | |
| 11 | | Doubletree Guest Suites Times Square | | | $ | 239.16 | | $ | 258.62 | | -7.5% | | 95.9% | | 94.7% | | 1.3% | | $ | 229.35 | | $ | 244.91 | | -6.4% | |
| 12 | | Marriott Quincy | | | $ | 145.91 | | $ | 141.99 | | 2.8% | | 60.8% | | 61.6% | | -1.3% | | $ | 88.71 | | $ | 87.47 | | 1.4% | |
| 13 | | Hilton Times Square | | | $ | 226.44 | | $ | 244.51 | | -7.4% | | 99.4% | | 99.2% | | 0.2% | | $ | 225.08 | | $ | 242.55 | | -7.2% | |
| 14 | | Fairmont Newport Beach | | | $ | 157.73 | | $ | 148.10 | | 6.5% | | 79.4% | | 79.6% | | -0.3% | | $ | 125.24 | | $ | 117.89 | | 6.2% | |
| 15 | | Hyatt Chicago Magnificent Mile | | | $ | 145.42 | | $ | 137.08 | | 6.1% | | 65.7% | | 50.0% | | 31.4% | | $ | 95.54 | | $ | 68.54 | | 39.4% | |
| 16 | | Marriott Boston Long Wharf | | | $ | 246.54 | | $ | 221.82 | | 11.1% | | 78.5% | | 80.2% | | -2.1% | | $ | 193.53 | | $ | 177.90 | | 8.8% | |
| 17 | | Hyatt Regency Newport Beach | | | $ | 156.97 | | $ | 148.40 | | 5.8% | | 83.9% | | 85.0% | | -1.3% | | $ | 131.70 | | $ | 126.14 | | 4.4% | |
| 18 | | Marriott Tysons Corner | | | $ | 150.98 | | $ | 149.89 | | 0.7% | | 73.6% | | 71.0% | | 3.7% | | $ | 111.12 | | $ | 106.42 | | 4.4% | |
| 19 | | Marriott Houston | | | $ | 125.84 | | $ | 120.73 | | 4.2% | | 82.5% | | 80.7% | | 2.2% | | $ | 103.82 | | $ | 97.43 | | 6.6% | |
| 20 | | Renaissance Long Beach (1) | | | $ | 166.84 | | $ | 149.72 | | 11.4% | | 78.6% | | 67.0% | | 17.3% | | $ | 131.14 | | $ | 100.31 | | 30.7% | |
| 21 | | Embassy Suites Chicago | | | $ | 149.10 | | $ | 134.02 | | 11.3% | | 81.9% | | 77.0% | | 6.4% | | $ | 122.11 | | $ | 103.20 | | 18.3% | |
| 22 | | Hilton Garden Inn Chicago Downtown/Magnificent Mile (1) | | | $ | 131.05 | | $ | 114.36 | | 14.6% | | 69.5% | | 56.1% | | 23.9% | | $ | 91.08 | | $ | 64.16 | | 42.0% | |
| 23 | | Renaissance Westchester | | | $ | 137.63 | | $ | 138.39 | | -0.5% | | 70.5% | | 66.3% | | 6.3% | | $ | 97.03 | | $ | 91.75 | | 5.8% | |
| 24 | | Embassy Suites La Jolla | | | $ | 171.99 | | $ | 162.34 | | 5.9% | | 84.6% | | 83.7% | | 1.1% | | $ | 145.50 | | $ | 135.88 | | 7.1% | |
| 25 | | Marriott Philadelphia | | | $ | 161.90 | | $ | 159.73 | | 1.4% | | 64.6% | | 66.7% | | -3.1% | | $ | 104.59 | | $ | 106.54 | | -1.8% | |
| 26 | | Hilton New Orleans St. Charles | | | $ | 194.00 | | $ | 190.53 | | 1.8% | | 86.3% | | 80.2% | | 7.6% | | $ | 167.42 | | $ | 152.81 | | 9.6% | |
| 27 | | Marriott Portland | | | $ | 173.59 | | $ | 150.17 | | 15.6% | | 81.5% | | 81.4% | | 0.1% | | $ | 141.48 | | $ | 122.24 | | 15.7% | |
| 28 | | Sheraton Cerritos | | | $ | 135.10 | | $ | 125.39 | | 7.7% | | 91.5% | | 92.7% | | -1.3% | | $ | 123.62 | | $ | 116.24 | | 6.3% | |
| 29 | | Marriott Park City | | | $ | 233.55 | | $ | 221.22 | | 5.6% | | 83.0% | | 83.0% | | 0.0% | | $ | 193.85 | | $ | 183.61 | | 5.6% | |
| 30 | | Courtyard by Marriott Los Angeles | | | $ | 156.21 | | $ | 151.08 | | 3.4% | | 94.0% | | 97.5% | | -3.6% | | $ | 146.84 | | $ | 147.30 | | -0.3% | |
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| | Actual/Comparable Portfolio (2) | | $ | 188.59 | | $ | 179.10 | | 5.3% | | 79.6% | | 78.3% | | 1.7% | | $ | 150.12 | | $ | 140.24 | | 7.0% | |
| (1) | | Operating statistics for the first quarter 2015 are impacted by a major renovation at the Boston Park Plaza. Operating statistics for the first quarter of 2014 are impacted by major renovations at the following hotels: the Hilton Garden Inn Chicago Downtown/Magnificent Mile; the Hyatt Regency San Francisco; and the Renaissance Long Beach. |
| (2) | | Actual/Comparable Portfolio includes all 30 hotels held for investment by the Company as of March 31, 2015. Includes prior ownership results as applicable for the Marriott Wailea acquired July 17, 2014. Operating statistics for the first quarter of 2014 have been adjusted to conform to the industry's Uniform System of Accounts for the Lodging Industry, Eleventh Revised Edition, which became effective January 1, 2015. |
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PROPERTY-LEVEL OPERATING STATISTICS | | | Page 27 |
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May 4, 2015 |
OPERATING STATISTICS BY BRAND & GEOGRAPHY
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OPERATING STATISTICS BY BRAND & GEOGRAPHY | | | Page 28 |
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May 4, 2015 |
Comparable Portfolio Operating Statistics by Brand
Q1 2015/2014
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| | | | For the Three Months Ended March 31, | |
| | | | 2015 | | 2014 | | | |
| | # of Hotels | | Occ | | ADR | | RevPAR | | Occ | | ADR | | RevPAR | | RevPAR Change | |
Marriott (1) | | 16 | | 78.2% | | $ | 187.49 | | $ | 146.62 | | 77.0% | | $ | 178.62 | | $ | 137.62 | | 6.5% | |
Hilton | | 8 | | 87.6% | | $ | 194.82 | | $ | 170.66 | | 85.2% | | $ | 192.94 | | $ | 164.34 | | 3.8% | |
Hyatt | | 3 | | 79.8% | | $ | 215.73 | | $ | 172.15 | | 68.5% | | $ | 200.13 | | $ | 137.02 | | 25.6% | |
Other (2) | | 3 | | 67.0% | | $ | 144.19 | | $ | 96.61 | | 77.1% | | $ | 128.06 | | $ | 98.74 | | -2.2% | |
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Actual/Comparable Portfolio (3) | | 30 | | 79.6% | | $ | 188.59 | | $ | 150.12 | | 78.3% | | $ | 179.10 | | $ | 140.24 | | 7.0% | |
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| (1) | | Marriott includes prior ownership results for the Marriott Wailea acquired July 17, 2014. |
| (2) | | Other includes the Fairmont Newport Beach, the Sheraton Cerritos and the Boston Park Plaza. |
| (3) | | Actual/Comparable Portfolio includes all 30 hotels held for investment by the Company as of March 31, 2015. Includes prior ownership results as applicable for the Marriott Wailea acquired July 17, 2014. Operating statistics for the first quarter of 2014 have been adjusted to conform to the industry's Uniform System of Accounts for the Lodging Industry, Eleventh Revised Edition, which became effective January 1, 2015. |
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OPERATING STATISTICS BY BRAND & GEOGRAPHY | | | Page 29 |
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May 4, 2015 |
Comparable Portfolio Property-Level Trailing 12 Month EBITDA Contribution by Brand
Note: Includes 30 hotel Comparable Portfolio
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OPERATING STATISTICS BY BRAND & GEOGRAPHY | | | Page 30 |
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Comparable Portfolio Operating Statistics by Region
Q1 2015/2014
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| | | | For the Three Months Ended March 31, | |
| | | | 2015 | | 2014 | | | |
| | # of Hotels | | Occ | | | ADR | | | RevPAR | | Occ | | | ADR | | | RevPAR | | RevPAR Change | |
California | | 9 | | 85.9% | | $ | 196.29 | | $ | 168.61 | | 82.8% | | $ | 179.89 | | $ | 148.95 | | 13.2% | |
Other West (1) | | 5 | | 86.6% | | $ | 198.58 | | $ | 171.97 | | 86.1% | | $ | 184.99 | | $ | 159.28 | | 8.0% | |
Midwest | | 3 | | 72.1% | | $ | 142.40 | | $ | 102.67 | | 60.6% | | $ | 129.26 | | $ | 78.33 | | 31.1% | |
East | | 13 | | 74.9% | | $ | 187.18 | | $ | 140.20 | | 76.2% | | $ | 183.36 | | $ | 139.72 | | 0.3% | |
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Actual/Comparable Portfolio (2) | | 30 | | 79.6% | | $ | 188.59 | | $ | 150.12 | | 78.3% | | $ | 179.10 | | $ | 140.24 | | 7.0% | |
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| (1) | | Other West includes prior ownership results for the Marriott Wailea acquired July 17, 2014. |
| (2) | | Actual/Comparable Portfolio includes all 30 hotels held for investment by the Company as of March 31, 2015. Includes prior ownership results as applicable for the Marriott Wailea acquired July 17, 2014. Operating statistics for the first quarter of 2014 have been adjusted to conform to the industry's Uniform System of Accounts for the Lodging Industry, Eleventh Revised Edition, which became effective January 1, 2015. |
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OPERATING STATISTICS BY BRAND & GEOGRAPHY | | | Page 31 |
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May 4, 2015 |
PROPERTY-LEVEL EBITDA & EBITDA MARGINS
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PROPERTY-LEVEL EBITDA & EBITDA MARGINS | | | Page 32 |
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May 4, 2015 |
Property-Level EBITDA
Q1 2015/2014
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| | Hotels sorted by number of rooms | | | For the Three Months Ended March 31, | |
| | (In thousands) | | | 2015 | | | 2014 | | |
| | | | | Hotel EBITDA (2) | | | Hotel EBITDA (2) | % Change | |
1 | | Hilton San Diego Bayfront (1) (4) | | $ | 14,051 | | $ | 14,903 | -6% | |
2 | | Boston Park Plaza (3) | | | (1,704) | | | (836) | -104% | |
3 | | Renaissance Washington DC | | | 4,900 | | | 5,213 | -6% | |
4 | | Hyatt Regency San Francisco (4) | | | 5,443 | | | 1,474 | 269% | |
5 | | Renaissance Orlando at SeaWorld ® | | | 7,818 | | | 7,011 | 12% | |
6 | | Renaissance Harborplace | | | 1,401 | | | 1,312 | 7% | |
7 | | Marriott Wailea | | | 7,809 | | | 6,821 | 14% | |
8 | | Renaissance Los Angeles Airport | | | 1,799 | | | 1,712 | 5% | |
9 | | JW Marriott New Orleans | | | 4,234 | | | 4,234 | 0% | |
10 | | Hilton North Houston (3) | | | 1,936 | | | 1,905 | 2% | |
11 | | Doubletree Guest Suites Times Square (1) | | | 1,191 | | | 1,923 | -38% | |
12 | | Marriott Quincy | | | 1,012 | | | 693 | 46% | |
13 | | Hilton Times Square | | | 909 | | | 1,784 | -49% | |
14 | | Fairmont Newport Beach (4) | | | 2,159 | | | 1,758 | 23% | |
15 | | Hyatt Chicago Magnificent Mile | | | (670) | | | (1,307) | 49% | |
16 | | Marriott Boston Long Wharf | | | 2,953 | | | 2,349 | 26% | |
17 | | Hyatt Regency Newport Beach | | | 2,215 | | | 1,691 | 31% | |
18 | | Marriott Tysons Corner | | | 1,532 | | | 1,551 | -1% | |
19 | | Marriott Houston (3) | | | 1,439 | | | 1,308 | 10% | |
20 | | Renaissance Long Beach (4) | | | 1,897 | | | 893 | 112% | |
21 | | Embassy Suites Chicago (4) | | | 1,009 | | | 615 | 64% | |
22 | | Hilton Garden Inn Chicago Downtown/Magnificent Mile (4) | | | 320 | | | (341) | 194% | |
23 | | Renaissance Westchester | | | 330 | | | 173 | 91% | |
24 | | Embassy Suites La Jolla | | | 2,232 | | | 1,953 | 14% | |
25 | | Marriott Philadelphia | | | 710 | | | 590 | 20% | |
26 | | Hilton New Orleans St. Charles | | | 1,799 | | | 1,740 | 3% | |
27 | | Marriott Portland | | | 1,596 | | | 1,338 | 19% | |
28 | | Sheraton Cerritos | | | 909 | | | 837 | 9% | |
29 | | Marriott Park City | | | 1,981 | | | 1,847 | 7% | |
30 | | Courtyard by Marriott Los Angeles | | | 1,019 | | | 988 | 3% | |
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| | Actual/Comparable Portfolio (5) | | $ | 74,229 | | $ | 66,132 | 12% | |
*Footnotes on page 34
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PROPERTY-LEVEL EBITDA & EBITDA MARGINS | | | Page 33 |
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| Supplemental Financial Information
May 4, 2015 |
Property-Level EBITDA
Q1 2015/2014 Footnotes
| (1) | | Reflects 100% ownership. |
| (2) | | Reconciliations to Net Income (Loss) provided on pages 37 and 38. |
| (3) | | Hotel EBITDA for the first quarter of 2015 is impacted by a major renovation at the Boston Park Plaza, and by a total of $0.2 million in non-current year property tax credits, net of appeal fees, received at the following hotels: the Marriott Houston $84,000; and the Hilton North Houston $104,000. |
| (4) | | Hotel EBITDA for the first quarter of 2014 is impacted by major renovations at the following hotels: the Hilton Garden Inn Chicago Downtown/Magnificent Mile; the Hyatt Regency San Francisco; and the Renaissance Long Beach. Hotel EBITDA for the first quarter of 2014 is also impacted by a total of $2.9 million in non-current year property tax credits, net of appeal fees, received at the following hotels: the Embassy Suites Chicago $12,000; the Fairmont Newport Beach $83,000; and the Hilton San Diego Bayfront $2.8 million. |
| (5) | | Actual/Comparable Portfolio includes all 30 hotels held for investment by the Company as of March 31, 2015. Data for the three months ended March 31, 2014 has been adjusted to conform to the industry's Uniform System of Accounts for the Lodging Industry, Eleventh Revised Edition, which became effective January 1, 2015. |
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PROPERTY-LEVEL EBITDA & EBITDA MARGINS | | | Page 34 |
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May 4, 2015 |
Property-Level EBITDA Margins
Q1 2015/2014
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| | Hotels sorted by number of rooms | | | For the Three Months Ended March 31, | |
| | | | | 2015 Hotel EBITDA | | | 2014 Hotel EBITDA | Change in | |
| | | | | Margin | | | Margin | bps | |
1 | | Hilton San Diego Bayfront (1) (3) | | | 37.9% | | | 44.7% | (680) bps | |
2 | | Boston Park Plaza (2) | | | -19.7% | | | -7.5% | (1,220) bps | |
3 | | Renaissance Washington DC | | | 25.9% | | | 26.8% | (90) bps | |
4 | | Hyatt Regency San Francisco (3) | | | 22.6% | | | 8.3% | 1,430 bps | |
5 | | Renaissance Orlando at SeaWorld ® | | | 37.8% | | | 35.3% | 250 bps | |
6 | | Renaissance Harborplace | | | 15.5% | | | 15.8% | (30) bps | |
7 | | Marriott Wailea | | | 41.0% | | | 39.0% | 200 bps | |
8 | | Renaissance Los Angeles Airport | | | 23.6% | | | 23.7% | (10) bps | |
9 | | JW Marriott New Orleans | | | 38.4% | | | 41.3% | (290) bps | |
10 | | Hilton North Houston (2) | | | 29.1% | | | 27.4% | 170 bps | |
11 | | Doubletree Guest Suites Times Square (1) | | | 9.8% | | | 15.4% | (560) bps | |
12 | | Marriott Quincy | | | 17.4% | | | 12.2% | 520 bps | |
13 | | Hilton Times Square | | | 8.5% | | | 15.8% | (730) bps | |
14 | | Fairmont Newport Beach (3) | | | 25.8% | | | 23.6% | 220 bps | |
15 | | Hyatt Chicago Magnificent Mile | | | -12.3% | | | -33.2% | 2,090 bps | |
16 | | Marriott Boston Long Wharf | | | 27.5% | | | 23.2% | 430 bps | |
17 | | Hyatt Regency Newport Beach | | | 25.4% | | | 20.9% | 450 bps | |
18 | | Marriott Tysons Corner | | | 28.7% | | | 30.6% | (190) bps | |
19 | | Marriott Houston (2) | | | 31.4% | | | 27.9% | 350 bps | |
20 | | Renaissance Long Beach (3) | | | 29.3% | | | 17.9% | 1,140 bps | |
21 | | Embassy Suites Chicago (3) | | | 20.6% | | | 14.6% | 600 bps | |
22 | | Hilton Garden Inn Chicago Downtown/Magnificent Mile (3) | | | 9.6% | | | -14.2% | 2,380 bps | |
23 | | Renaissance Westchester | | | 7.1% | | | 4.1% | 300 bps | |
24 | | Embassy Suites La Jolla | | | 42.1% | | | 40.1% | 200 bps | |
25 | | Marriott Philadelphia | | | 17.4% | | | 14.1% | 330 bps | |
26 | | Hilton New Orleans St. Charles | | | 41.6% | | | 44.3% | (270) bps | |
27 | | Marriott Portland | | | 41.4% | | | 39.6% | 180 bps | |
28 | | Sheraton Cerritos | | | 27.3% | | | 26.7% | 60 bps | |
29 | | Marriott Park City | | | 44.6% | | | 42.1% | 250 bps | |
30 | | Courtyard by Marriott Los Angeles | | | 34.6% | | | 33.8% | 80 bps | |
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| | Actual/Comparable Portfolio (4) | | | 26.3% | | | 25.1% | 120 bps | |
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| | Adjusted Actual/Comparable Portfolio (5) | | | 26.2% | | | 24.0% | 220 bps | |
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*Footnotes on page 36
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PROPERTY-LEVEL EBITDA & EBITDA MARGINS | | | Page 35 |
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| Supplemental Financial Information
May 4, 2015 |
Property-Level EBITDA Margins
Q1 2015/2014 Footnotes
| (1) | | Reflects 100% ownership. |
| (2) | | Hotel EBITDA for the first quarter of 2015 is impacted by a major renovation at the Boston Park Plaza, and by a total of $0.2 million in non-current year property tax credits, net of appeal fees, received at the following hotels: the Marriott Houston $84,000; and the Hilton North Houston $104,000. |
| (3) | | Hotel EBITDA for the first quarter of 2014 is impacted by major renovations at the following hotels: the Hilton Garden Inn Chicago Downtown/Magnificent Mile; the Hyatt Regency San Francisco; and the Renaissance Long Beach. Hotel EBITDA for the first quarter of 2014 is also impacted by a total of $2.9 million in non-current year property tax credits, net of appeal fees, received at the following hotels: the Embassy Suites Chicago $12,000; the Fairmont Newport Beach $83,000; and the Hilton San Diego Bayfront $2.8 million. |
| (4) | | Actual/Comparable Portfolio includes all 30 hotels held for investment by the Company as of March 31, 2015. Data for the three months ended March 31, 2014 has been adjusted to conform to the industry's Uniform System of Accounts for the Lodging Industry, Eleventh Revised Edition, which became effective January 1, 2015 |
| (5) | | Adjusted Actual/Comparable Portfolio represents the 30 hotel Actual/Comparable Portfolio adjusted to exclude the non-current year property tax related items noted in Footnotes 2 and 3 above. Excluding these non-current year property tax items, Actual/Comparable Portfolio EBITDA margins would have been 26.2% and 24.0% for the three months ended March 31, 2015 and 2014, respectively. |
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PROPERTY-LEVEL EBITDA & EBITDA MARGINS | | | Page 36 |
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May 4, 2015 |
Property-Level EBITDA Reconciliation Q1 2015
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| | Hotels sorted by number of rooms | | | For the Three Months Ended March 31, 2015 | |
| | (In thousands) | | | | | | Plus: | | Plus: | | Plus: | | Equals: | | Hotel | |
| | | | Total | | Net Income / | | Other | | | | | | Hotel | | EBITDA | |
| | | | Revenues | | (Loss) | | Adjustments (2) | | Depreciation | | Interest Expense | | EBITDA | | Margins | |
1 | | Hilton San Diego Bayfront (1) | | $ | 37,112 | | $ | 8,703 | | $ | 450 | | $ | 3,388 | | $ | 1,510 | | $ | 14,051 | | 37.9% | |
2 | | Boston Park Plaza (3) | | | 8,637 | | | (6,364) | | | — | | | 3,369 | | | 1,291 | | | (1,704) | | -19.7% | |
3 | | Renaissance Washington DC | | | 18,931 | | | 641 | | | — | | | 2,393 | | | 1,866 | | | 4,900 | | 25.9% | |
4 | | Hyatt Regency San Francisco | | | 24,053 | | | 2,449 | | | — | | | 2,994 | | | — | | | 5,443 | | 22.6% | |
5 | | Renaissance Orlando at SeaWorld ® | | | 20,670 | | | 4,514 | | | — | | | 2,256 | | | 1,048 | | | 7,818 | | 37.8% | |
6 | | Renaissance Harborplace | | | 9,058 | | | (1,469) | | | — | | | 1,717 | | | 1,153 | | | 1,401 | | 15.5% | |
7 | | Marriott Wailea | | | 19,065 | | | 5,344 | | | — | | | 2,465 | | | — | | | 7,809 | | 41.0% | |
8 | | Renaissance Los Angeles Airport | | | 7,616 | | | 1,120 | | | — | | | 679 | | | — | | | 1,799 | | 23.6% | |
9 | | JW Marriott New Orleans | | | 11,037 | | | 1,944 | | | 1 | | | 1,343 | | | 946 | | | 4,234 | | 38.4% | |
10 | | Hilton North Houston (3) | | | 6,657 | | | 570 | | | — | | | 915 | | | 451 | | | 1,936 | | 29.1% | |
11 | | Doubletree Guest Suites Times Square (1) | | | 12,125 | | | (3,064) | | | 994 | | | 1,583 | | | 1,678 | | | 1,191 | | 9.8% | |
12 | | Marriott Quincy | | | 5,809 | | | (107) | | | — | | | 1,119 | | | — | | | 1,012 | | 17.4% | |
13 | | Hilton Times Square | | | 10,683 | | | (2,918) | | | 87 | | | 2,526 | | | 1,214 | | | 909 | | 8.5% | |
14 | | Fairmont Newport Beach | | | 8,372 | | | 1,026 | | | — | | | 1,133 | | | — | | | 2,159 | | 25.8% | |
15 | | Hyatt Chicago Magnificent Mile | | | 5,440 | | | (2,156) | | | — | | | 1,486 | | | — | | | (670) | | -12.3% | |
16 | | Marriott Boston Long Wharf | | | 10,737 | | | (1,607) | | | — | | | 2,101 | | | 2,459 | | | 2,953 | | 27.5% | |
17 | | Hyatt Regency Newport Beach | | | 8,724 | | | 1,351 | | | — | | | 864 | | | — | | | 2,215 | | 25.4% | |
18 | | Marriott Tysons Corner | | | 5,330 | | | 186 | | | — | | | 797 | | | 549 | | | 1,532 | | 28.7% | |
19 | | Marriott Houston (3) | | | 4,578 | | | 578 | | | — | | | 579 | | | 282 | | | 1,439 | | 31.4% | |
20 | | Renaissance Long Beach | | | 6,479 | | | 1,116 | | | — | | | 781 | | | — | | | 1,897 | | 29.3% | |
21 | | Embassy Suites Chicago | | | 4,894 | | | (878) | | | — | | | 914 | | | 973 | | | 1,009 | | 20.6% | |
22 | | Hilton Garden Inn Chicago Downtown/Magnificent Mile | | | 3,343 | | | (410) | | | — | | | 730 | | | — | | | 320 | | 9.6% | |
23 | | Renaissance Westchester | | | 4,668 | | | (509) | | | — | | | 839 | | | — | | | 330 | | 7.1% | |
24 | | Embassy Suites La Jolla | | | 5,302 | | | 671 | | | — | | | 881 | | | 680 | | | 2,232 | | 42.1% | |
25 | | Marriott Philadelphia | | | 4,080 | | | (103) | | | — | | | 479 | | | 334 | | | 710 | | 17.4% | |
26 | | Hilton New Orleans St. Charles | | | 4,326 | | | 1,406 | | | — | | | 393 | | | — | | | 1,799 | | 41.6% | |
27 | | Marriott Portland | | | 3,855 | | | 1,189 | | | — | | | 407 | | | — | | | 1,596 | | 41.4% | |
28 | | Sheraton Cerritos | | | 3,324 | | | 493 | | | — | | | 416 | | | — | | | 909 | | 27.3% | |
29 | | Marriott Park City | | | 4,439 | | | 1,343 | | | — | | | 453 | | | 185 | | | 1,981 | | 44.6% | |
30 | | Courtyard by Marriott Los Angeles | | | 2,944 | | | 709 | | | — | | | 310 | | | — | | | 1,019 | | 34.6% | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | Actual/Comparable Portfolio (4) | | $ | 282,288 | | $ | 15,768 | | $ | 1,532 | | $ | 40,310 | | $ | 16,619 | | $ | 74,229 | | 26.3% | |
*Footnotes on page 39
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PROPERTY-LEVEL EBITDA & EBITDA MARGINS | | | Page 37 |
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| Supplemental Financial Information
May 4, 2015 |
Property-Level EBITDA Reconciliation Q1 2014
| | | | | | | | | | | | | | | | | | | | | | | | |
| | Hotels sorted by number of rooms | | | For the Three Months Ended March 31, 2014 | |
| | (In thousands) | | | | | | Plus: | | Plus: | | Plus: | | Equals: | | Hotel | |
| | | | Total | | Net Income / | | Other | | | | | | Hotel | | EBITDA | |
| | | | Revenues | | (Loss) | | Adjustments (5) | | Depreciation | | Interest Expense | | EBITDA | | Margins | |
1 | | Hilton San Diego Bayfront (1) (3) | | $ | 33,351 | | $ | 8,902 | | $ | 450 | | $ | 3,285 | | $ | 2,266 | | $ | 14,903 | | 44.7% | |
2 | | Boston Park Plaza | | | 11,154 | | | (5,005) | | | — | | | 2,856 | | | 1,313 | | | (836) | | -7.5% | |
3 | | Renaissance Washington DC | | | 19,419 | | | 909 | | | — | | | 2,405 | | | 1,899 | | | 5,213 | | 26.8% | |
4 | | Hyatt Regency San Francisco (3) | | | 17,863 | | | (1,262) | | | — | | | 2,736 | | | — | | | 1,474 | | 8.3% | |
5 | | Renaissance Orlando at SeaWorld ® | | | 19,876 | | | 3,753 | | | — | | | 2,180 | | | 1,078 | | | 7,011 | | 35.3% | |
6 | | Renaissance Harborplace | | | 8,299 | | | (1,584) | | | — | | | 1,697 | | | 1,199 | | | 1,312 | | 15.8% | |
7 | | Marriott Wailea | | | | 17,504 | | | 4,691 | | | — | | | 2,130 | | | — | | | 6,821 | | 39.0% | |
8 | | Renaissance Los Angeles Airport | | | 7,232 | | | 999 | | | — | | | 713 | | | — | | | 1,712 | | 23.7% | |
9 | | JW Marriott New Orleans | | | 10,248 | | | 2,456 | | | 1 | | | 1,339 | | | 438 | | | 4,234 | | 41.3% | |
10 | | Hilton North Houston | | | 6,962 | | | 526 | | | — | | | 920 | | | 459 | | | 1,905 | | 27.4% | |
11 | | Doubletree Guest Suites Times Square (1) | | | 12,489 | | | (2,170) | | | 997 | | | 1,359 | | | 1,737 | | | 1,923 | | 15.4% | |
12 | | Marriott Quincy | | | 5,686 | | | (457) | | | — | | | 1,150 | | | — | | | 693 | | 12.2% | |
13 | | Hilton Times Square | | | 11,257 | | | (2,079) | | | 92 | | | 2,551 | | | 1,220 | | | 1,784 | | 15.8% | |
14 | | Fairmont Newport Beach (3) | | | 7,435 | | | 597 | | | — | | | 1,161 | | | — | | | 1,758 | | 23.6% | |
15 | | Hyatt Chicago Magnificent Mile | | | 3,941 | | | (2,910) | | | — | | | 1,603 | | | — | | | (1,307) | | -33.2% | |
16 | | Marriott Boston Long Wharf | | | 10,113 | | | (2,223) | | | — | | | 2,113 | | | 2,459 | | | 2,349 | | 23.2% | |
17 | | Hyatt Regency Newport Beach | | | 8,101 | | | 829 | | | — | | | 862 | | | — | | | 1,691 | | 20.9% | |
18 | | Marriott Tysons Corner | | | 5,076 | | | 166 | | | — | | | 818 | | | 567 | | | 1,551 | | 30.6% | |
19 | | Marriott Houston | | | 4,686 | | | 455 | | | — | | | 562 | | | 291 | | | 1,308 | | 27.9% | |
20 | | Renaissance Long Beach (3) | | | 4,978 | | | 188 | | | — | | | 705 | | | — | | | 893 | | 17.9% | |
21 | | Embassy Suites Chicago (3) | | | 4,221 | | | (1,314) | | | — | | | 934 | | | 995 | | | 615 | | 14.6% | |
22 | | Hilton Garden Inn Chicago Downtown/Magnificent Mile (3) | | | 2,396 | | | (1,353) | | | — | | | 1,012 | | | — | | | (341) | | -14.2% | |
23 | | Renaissance Westchester | | | 4,213 | | | (586) | | | — | | | 759 | | | — | | | 173 | | 4.1% | |
24 | | Embassy Suites La Jolla | | | 4,871 | | | (78) | | | — | | | 909 | | | 1,122 | | | 1,953 | | 40.1% | |
25 | | Marriott Philadelphia | | | 4,194 | | | (230) | | | — | | | 475 | | | 345 | | | 590 | | 14.1% | |
26 | | Hilton New Orleans St. Charles | | | 3,926 | | | 1,194 | | | — | | | 546 | | | — | | | 1,740 | | 44.3% | |
27 | | Marriott Portland | | | 3,379 | | | 923 | | | — | | | 415 | | | — | | | 1,338 | | 39.6% | |
28 | | Sheraton Cerritos | | | 3,129 | | | 422 | | | — | | | 415 | | | — | | | 837 | | 26.7% | |
29 | | Marriott Park City | | | 4,389 | | | 1,216 | | | — | | | 440 | | | 191 | | | 1,847 | | 42.1% | |
30 | | Courtyard by Marriott Los Angeles | | | 2,926 | | | 682 | | | — | | | 306 | | | — | | | 988 | | 33.8% | |
| | | | | | | | | | | | | | | | | | | | | | | |
| | Comparable Portfolio (4) | | | 263,314 | | | 7,657 | | | 1,540 | | | 39,356 | | | 17,579 | | | 66,132 | | 25.1% | |
| | | | | | | | | | | | | | | | | | | | | | | |
| | Less: Prior Ownership (6) | | | | | | | | | | | | | | | | | | | | | |
| | Marriott Wailea | | | 17,504 | | | 4,691 | | | — | | | 2,130 | | | — | | | 6,821 | | 39.0% | |
| | | | | | | | | | | | | | | | | | | | | | | |
| | Actual Portfolio (7) | | $ | 245,810 | | $ | 2,966 | | $ | 1,540 | | $ | 37,226 | | $ | 17,579 | | $ | 59,311 | | 24.1% | |
*Footnotes on page 39
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PROPERTY-LEVEL EBITDA & EBITDA MARGINS | | | Page 38 |
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| Supplemental Financial Information
May 4, 2015 |
Property-Level EBITDA Reconciliation
Q1 2015/2014 Footnotes
| (1) | | Includes 100% of the operating results for both the Doubletree Guest Suites Times Square and the Hilton San Diego Bayfront. |
| (2) | | Other Adjustments for the three months ended March 31, 2015 include: a total of $1.0 million in amortization of lease intangibles at the Doubletree Guest Suites Times Square, Hilton Times Square and JW Marriott New Orleans; and a total of $0.5 million in non-cash straightline lease expense at the Doubletree Guest Suites Times Square, Hilton San Diego Bayfront, Hilton Times Square and JW Marriott New Orleans. |
| (3) | | Hotel EBITDA for the first quarter of 2015 is impacted by a major renovation at the Boston Park Plaza, and by a total of $0.2 million in non-current year property tax credits, net of appeal fees, received at the following hotels: the Marriott Houston $84,000; and the Hilton North Houston $104,000. Hotel EBITDA for the first quarter of 2014 is impacted by major renovations at the following hotels: the Hilton Garden Inn Chicago Downtown/Magnificent Mile; the Hyatt Regency San Francisco; and the Renaissance Long Beach. Hotel EBITDA for the first quarter of 2014 is also impacted by a total of $2.9 million in non-current year property tax credits, net of appeal fees, received at the following hotels: the Embassy Suites Chicago $12,000; the Fairmont Newport Beach $83,000; and the Hilton San Diego Bayfront $2.8 million. |
| (4) | | Actual/Comparable Portfolio includes all 30 hotels held for investment by the Company as of March 31, 2015. |
| (5) | | Other Adjustments for the three months ended March 31, 2014 include: a total of $1.0 million in amortization of lease intangibles at the Doubletree Guest Suites Times Square, Hilton Times Square and JW Marriott New Orleans; and a total of $0.5 million in non-cash straightline lease expense at the Doubletree Guest Suites Times Square, Hilton San Diego Bayfront, Hilton Times Square and JW Marriott New Orleans. |
| (6) | | Prior Ownership for the three months ended March 31, 2014 includes prior ownership results and the Company's pro forma depreciation expense for the Marriott Wailea acquired July 17, 2014. |
| (7) | | Actual Portfolio includes all 29 hotels held for investment by the Company as of March 31, 2014, adjusted to conform to the industry's Uniform System of Accounts for the Lodging Industry, Eleventh Revised Edition, which became effective January 1, 2015 |
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PROPERTY-LEVEL EBITDA & EBITDA MARGINS | | | Page 39 |
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