Exhibit 99.2
DiamondRock Hospitality Company
Supplemental Information
Third Quarter 2005
DiamondRock Hospitality Company
Supplemental Information
Third Quarter 2005
TABLE OF CONTENTS
PAGE
--------------
CORPORATE INFORMATION
The Company 3
Board of Directors and Executive Officers 4
Equity Research Coverage 5
FINANCIAL HIGHLIGHTS
Capitalization 6
Condensed Consolidated Statements of Operations 7
Condensed Consolidated Balance Sheets 8
Condensed Conslidated Statements of Cash Flows 9 - 10
Non-GAAP Financial Measures 11 - 14
Pro Forma Financial Information 15
Debt Summary 16
PORTFOLIO DATA
Portfolio Summary at September 9, 2005 17
Selected Financial and Operating Information by Property 18 - 22
Supplemental Information
Third Quarter 2005
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CORPORATE INFORMATION
The Company
DiamondRock Hospitality Company is a self-advised real estate company that owns,
acquires and invests in upper upscale and upscale hotel properties located
primarily in North America. To a lesser extent, we may invest, on a selective
basis, in premium limited service and extended stay hotel properties in urban
locations. We began operations in July 2004 when we completed a private
placement of our common stock. As of the end of the fiscal quarter, we owned
fourteen hotels, comprising 5,633 rooms, located in the following markets:
Atlanta, Georgia (2 hotels), Fort Worth, Texas, Lexington, Kentucky, Los Angeles
(2 hotels), New York City (2 hotels), Northern California, Oak Brook, Illinois,
Salt Lake City, Washington D.C., St. Thomas, U.S. Virgin Islands, and Vail,
Colorado and for purchase prices aggregating approximately $847.7 million
(including pre-funded capital improvement restricted cash).
Our senior management team has extensive experience and a broad network of
relationships in the hotel industry, which we believe provides us with ongoing
access to hotel property investment opportunities and enables us to quickly
identify and consummate acquisitions. We also have an investment sourcing
relationship with Marriott International, a leading worldwide hotel brand,
franchise and management company. We believe that our ability to implement our
business strategies is greatly enhanced by the continuing source of additional
acquisition opportunities generated by this relationship, as many of the
properties that Marriott brings to our attention are offered to us through "off
market" transactions, meaning that they are not made generally available to
other hospitality companies.
We began operations in July 2004 and became a public reporting company in May
2005. We are listed on the New York Stock Exchange under the symbol "DRH".
Fiscal Year End:
December 31
Number of Full-Time Employees:
14
Corporate Headquarters:
6903 Rockledge Drive, Suite 800
Bethesda, MD 20817
(240) 744-1150
Mark Brugger
Chief Financial Officer
(240) 744-1150
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Supplemental Information
Third Quarter 2005
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Board of Directors and Executive Officers
William W. McCarten
Chairman of the Board, Chief Executive Officer and Director
John L. Williams
President, Chief Operating Officer and Director
Daniel J. Altobello
Director and Chairman of the Compensation Committee
W. Robert Grafton
Lead Director and Chairman of the Audit Committee
Maureen L. McAvey
Director
Gilbert T. Ray
Director and Chairman of the Nominating and Corporate Governance Committee
Mark W. Brugger
Executive Vice President, Chief Financial Officer and Treasurer
Michael D. Schecter
General Counsel and Corporate Secretary
Sean M. Mahoney
Chief Accounting Officer and Corporate Controller
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Third Quarter 2005
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Equity Research Coverage
Firm Analyst Telephone
- ---------------------------------- ----------------------- -----------------
Citigroup Smith Barney Michael Rietbrock (212) 816-7777
Friedman, Billings, Ramsey, & Co. Gustavo Sarago (703) 469-1042
JMP Securities William C. Marks (415) 835-8944
Wachovia Securities Jeffrey J. Donnelly (617) 603-4262
DiamondRock Hospitality is followed by the analysts listed above. Please note
that any opinions, estimates or forecasts regarding DiamondRock Hospitality's
performance made by these analysts are theirs alone and do not represent
opinions, forecasts or predictions of DiamondRock Hospitality or its management.
DiamondRock Hospitality does not by its reference here imply its endorsement of,
or concurrence with, such information, conclusions or recommendations.
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Third Quarter 2005
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Capitalization
Capitalization September 9, 2005
- -------------------------------------------------------------------- --------------------
Common shares outstanding per balance sheet 50,819,864
Unvested restricted stock held by management and employees 738,000
Share grants under deferred compensation plan held by corporate
officers 383,608
--------------------
Combined shares outstanding 51,941,472
Common stock price at September 9, 2005 $ 11.70
--------------------
Common equity capitalization $ 607,715,222
Consolidated debt 366,013,177
Cash and cash equivalents (9,968,037)
--------------------
Total enterprise value $ 963,760,362
====================
Dividend Per Share
- --------------------------------------------------------------------
Common dividend declared (holders of record on September 9, 2005) $ 0.1725
====================
Share Reconciliation
- --------------------------------------------------------------------
Common shares outstanding, held by third parties 46,199,293
Common shares outstanding, held by Marriott International 4,428,571
Common shares outstanding, held by management and directors 192,000
--------------------
Subtotal 50,819,864
Unvested restricted stock held by management and employees 738,000
Share grants under deferred compensation plan held by corporate
officers 383,608
--------------------
Combined shares outstanding 51,941,472
====================
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Supplemental Information
Third Quarter 2005
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DIAMONDROCK HOSPITALITY COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the Fiscal Quarter Ended September 9, 2005, the Period
from January 1, 2005 to September 9, 2005, and the Fiscal Quarter Ended
September 10, 2004 and Period from May 6, 2004 (Incorporation)
to September 10, 2004
Period from Fiscal Quarter Ended
Fiscal Quarter January 1, September 10, 2004
Ended 2005 to and Period from May 6,
September 9, 2005 September 9, 2005 2004 (Incorporation) to
September 10, 2004
(Unaudited) (Unaudited) (Unaudited)
Rooms $ 43,007,699 $ 85,509,567 $ -
Food and beverage 17,607,225 31,812,477 -
Other 4,792,077 7,949,454 -
----------------- --------------------------------------------
Total revenues 65,407,001 125,271,498 -
----------------- -------------------------------------------
Operating Expenses:
Rooms 10,853,919 21,439,976 -
Food and beverage 13,658,368 24,420,522 -
Management fees 2,171,128 4,280,139 -
Other hotel expenses 24,887,133 49,247,846 -
Depreciation and amortization 7,369,396 16,072,526 9,168
Corporate expenses 2,452,887 10,399,626 1,715,699
----------------- -------------------------------------------
Total operating expenses 61,392,831 125,860,635 1,724,867
----------------- --------------------------------------------
Operating profit (loss) 4,014,170 (589,137) (1,724,867)
----------------- -------------------------------------------
Other Expenses (Income):
Interest income (654,201) (1,215,028) (452,300)
Interest expense 4,156,249 10,640,988 -
----------------- -------------------------------------------
Total other expenses/(income) 3,502,048 9,425,960 (452,300)
----------------- --------------------------------------------
Income (loss) before income taxes 512,122 (10,015,097) (1,272,567)
Income tax benefit 1,684,346 1,125,499 552,294
----------------- -------------------------------------------
Net income (loss) $ 2,196,468 $ (8,889,598) $ (720,273)
================= ===========================================
Earnings (loss) per share:
Basic and diluted $ 0.04 $ (0.27) $ (0.05)
================= ===========================================
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DIAMONDROCK HOSPITALITY COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
September 9, 2005 and December 31, 2004
ASSETS
September 9,
2005 December 31, 2004
---------------- -----------------
(Unaudited)
Property and equipment, at cost $ 811,084,017 $ 286,727,306
Less: accumulated depreciation (17,300,783) (1,084,867)
---------------- -----------------
793,783,234 285,642,439
Deferred financing costs, net 2,925,759 1,344,378
Restricted cash 33,035,939 17,482,515
Due from hotel managers 34,543,143 2,626,262
Favorable lease asset, net 12,214,838 -
Purchase deposits and pre-acquisition costs - 3,272,219
Prepaid and other assets 4,464,554 4,340,259
Cash and cash equivalents 9,968,037 76,983,107
---------------- -----------------
Total assets $ 890,935,504 $ 391,691,179
================ =================
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Debt, at face amount $ 363,181,035 $ 177,827,573
Debt premium 2,832,142 2,944,237
---------------- -----------------
Total debt 366,013,177 180,771,810
Deferred income related to key money, net 6,383,518 2,490,385
Unfavorable lease liability, net 5,426,955 5,776,946
Due to hotel managers 21,649,144 3,985,795
Dividends declared and unpaid 8,893,732 -
Accounts payable and accrued expenses 12,270,323 3,078,825
---------------- -----------------
Total other liabilities 54,623,672 15,331,951
---------------- -----------------
Shareholders' Equity:
Preferred stock, $.01 par value; 10,000,000 shares
authorized; no shares issued and outstanding - -
Common stock, $.01 par value; 100,000,000 shares
authorized; 50,819,864 and 21,020,100 shares issued
and outstanding at September 9, 2005 and December 31,
2004, respectively 508,199 210,201
Additional paid-in capital 491,450,709 197,494,842
Accumulated deficit (21,660,253) (2,117,625)
---------------- -----------------
Total shareholders' equity 470,298,655 195,587,418
---------------- -----------------
Total liabilities and shareholders' equity $ 890,935,504 $ 391,691,179
================ =================
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Supplemental Information
Third Quarter 2005
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DIAMONDROCK HOSPITALITY COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Period from January 1, 2005 to September 9, 2005
and the Period from May 6, 2004 (Incorporation)
to September 10, 2004
Period from
May 6, 2004
Period from (Incorporation)
January 1, 2005 to to September 10,
September 9, 2005 2004
----------------------------------------
Cash flows from operating activities: (Unaudited) (Unaudited)
Net loss $ (8,889,598) $ (720,273)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Real estate depreciation 16,072,526 9,167
Corporate asset depreciation as corporate expenses 75,166
Non-cash straight line ground rent 4,839,677 -
Non-cash financing costs as interest 1,100,820 -
Market value adjustment to interest rate caps (11,402) -
Amortization of favorable lease asset 70,601 -
Amortization of debt premium and unfavorable lease
liability (209,835) -
Amortization of deferred income (106,867) -
Stock-based compensation 5,582,077 645,000
Income tax benefit (1,125,499) (552,294)
Changes in assets and liabilities:
Prepaid expenses and other assets 1,012,604 (204,170)
Due to/from hotel managers (11,837,240) -
Accounts payable and accrued expenses 4,069,073 388,914
----------------------------------------
Net cash provided by (used in) operating activities 10,642,103 (433,656)
----------------------------------------
Cash flows from investing activities:
Hotel acquisitions (530,905,343) (81,302)
Hotel capital expenditures (9,646,244) -
Receipt of deferred key money 4,000,000 -
Cash paid for restricted cash at acquisition (17,740,652) -
Purchase deposits and pre-acquisition costs - (1,096,221)
----------------------------------------
Net cash used in investing activities (554,292,239) (1,177,523)
----------------------------------------
Cash flows from financing activities:
Proceeds from mortgage debt 246,500,000 -
Draws on senior secured credit facility 5,000,000 -
Repayments of mortgage debt (56,948,685) -
Scheduled mortgage debt principal payments (2,146,538) -
Payment of financing costs (2,682,201) -
Proceeds from sale of common stock 291,799,785 197,376,548
Payment of dividends (1,680,656) -
Payment of costs related to sale of common stock (3,206,639) (1,028,588)
----------------------------------------
Net cash provided by financing activities 476,635,066 196,347,960
----------------------------------------
The accompanying notes are an integral part of these condensed consolidated
financial statements.
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Supplemental Information
Third Quarter 2005
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DIAMONDROCK HOSPITALITY COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Continued) For the Period from January 1, 2005 to September 9,
2005 and the Period from May 6, 2004
(Incorporation) to September 10, 2004
Period from
May 6, 2004
Period from (Incorporation)
January 1, 2005 to to September 10,
September 9, 2005 2004
Net (decrease) increase in cash and cash
equivalents (67,015,070) 194,736,781
Cash and cash equivalents, beginning of period 76,983,107 -
----------------------------------------
Cash and cash equivalents, end of period $ 9,968,037 $ 194,736,781
========================================
Supplemental Disclosure of Cash Flow Information:
Cash paid for interest $ 9,283,715 $ -
========================================
Cash paid for income taxes $ 1,114,363 $ -
========================================
Non-Cash Investing and Financing Activities:
Repayments of mortgage debt with restricted cash $ 7,051,315 $ -
========================================
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Third Quarter 2005
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Non-GAAP Financial Measures
We use the following four non-GAAP financial measures that we believe are
useful to investors as key measures of our operating performance: (1) EBITDA (2)
Adjusted EBITDA, (3) FFO and (4) Adjusted FFO.
EBITDA represents net income (loss) excluding: (1) interest expense; (2)
provision for income taxes, including income taxes applicable to sale of assets;
and (3) depreciation and amortization. We believe EBITDA is useful to an
investor in evaluating our operating performance because it helps investors
evaluate and compare the results of our operations from period to period by
removing the impact of our capital structure (primarily interest expense) and
our asset base (primarily depreciation and amortization) from our operating
results. We also use EBITDA as one measure in determining the value of hotel
acquisitions and dispositions.
Historical
-------------------------------------------
Fiscal Period from
Quarter Ended January 1, 2005 to
September 9, 2005 September 9, 2005
--------------------- --------------------
Net income (loss) $ 2,196,468 $ (8,889,598)
Interest expense 4,156,249 10,640,988
Income tax benefit (1,684,346) (1,125,499)
Depreciation and amortization 7,369,396 16,072,526
--------------------- --------------------
EBITDA $ 12,037,767 $ 16,698,417
===================== ====================
Forecast Full Year 2005
-------------------------------------------
Low End High End
--------------------- --------------------
Net loss $ (10,336,250) $ (8,336,250)
Interest expense 17,400,000 17,400,000
Income tax benefit (1,750,000) (1,750,000)
Depreciation and amortization 27,800,000 27,800,000
--------------------- --------------------
EBITDA $ 33,113,750 $ 35,113,750
===================== ====================
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Third Quarter 2005
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Management also evaluates our performance by reviewing Adjusted EBITDA
because the Company believes that the exclusion of certain additional recurring
and non-recurring items described below provides useful supplemental information
regarding our ongoing operating performance and that the presentation of
Adjusted EBITDA, when combined with the primary GAAP presentation of net income,
is beneficial to a complete understanding of our operating performance. We
adjust EBITDA for the following items, which may occur in any period, and refer
to this measure as Adjusted EBITDA:
o Non-Cash Ground Rent: We exclude the non-cash expense incurred from
straight lining the rent from our ground lease obligations and the
non-cash amortization of our favorable lease asset.
o The impact of fully vested irrevocable commitments to issue 382,500
shares of stock to our five senior executive officers made in
connection with the initial public offering and expensed in the second
quarter. These were grants and do not reflect the underlying
performance of the Company.
o Cumulative effect of a change in accounting principle -- Infrequently,
the Financial Accounting Standards Board (FASB) promulgates new
accounting standards that require the consolidated statement of
operations to reflect the cumulative effect of a change in accounting
principle. We exclude these one-time adjustments because they do not
reflect our actual performance for that period.
o Impairment Losses -- We exclude the effect of impairment losses
recorded because we believe that including them in EBITDA is not
consistent with reflecting the ongoing performance of our remaining
assets. In addition, we believe that impairment charges are similar to
gains (losses) on dispositions and depreciation expense, both of which
are also excluded from EBITDA.
Historical
------------------------------------------
Fiscal Period from
Quarter Ended January 1, 2005 to
September 9 , 2005 September 9 , 2005
-------------------- --------------------
EBITDA $ 12,037,767 $ 16,698,417
Non-cash ground rent 1,730,168 4,910,278
Initial public offering stock grants -- 3,736,250
-------------------- --------------------
Adjusted EBITDA $ 13,767,935 $ 25,344,945
==================== ====================
Forecast Full Year 2005
------------------------------------------
Low End High End
-------------------- --------------------
EBITDA $ 33,113,750 $ 35,113,750
Non-cash ground rent 7,150,000 7,150,000
Initial public offering stock grants 3,736,250 3,736,250
-------------------- --------------------
Adjusted EBITDA $ 44,000,000 $ 46,000,000
==================== ====================
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We compute FFO in accordance with standards established by NAREIT, which
defines FFO as net income (loss) (determined in accordance with GAAP), excluding
gains (losses) from sales of property, plus depreciation and amortization and
after adjustments for unconsolidated partnerships and joint ventures (which are
calculated to reflect FFO on the same basis). 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 and
gain or loss on sale of assets. We also use FFO as one measure in determining
our results after taking into account the impact of our capital structure.
Historical
-----------------------------------------
Fiscal Quarter Period from
Ended January 1, 2005 to
September 9, 2005 September 9, 2005
------------------- -------------------
Net income (loss) $ 2,196,468 $ (8,889,598)
Real estate related depreciation and
amortization 7,369,396 16,072,526
------------------- -------------------
FFO $ 9,565,864 $ 7,182,928
=================== ===================
FFO per Share (Basic and Diluted) $ 0.19 $ 0.21
=================== ===================
Forecast Full Year 2005
-----------------------------------------
Low End High End
------------------- -------------------
Net loss $ (10,336,250) $ (8,336,250)
Real estate related depreciation and
amortization 27,800,000 27,800,000
------------------- -------------------
FFO $ 17,463,750 $ 19,463,750
=================== ===================
Management also evaluates our performance by reviewing Adjusted FFO because
the Company believes that the exclusion of certain additional recurring and
non-recurring items described below provides useful supplemental information
regarding our ongoing operating performance and that the presentation of
Adjusted FFO, when combined with the primary GAAP presentation of net income, is
beneficial to a complete understanding of our operating performance. We adjust
FFO for the following items, which may occur in any period, and refer to this
measure as Adjusted FFO:
o Non-Cash Ground Rent: We exclude the non-cash expense incurred from
straight lining the rent from our ground lease obligations and the
non-cash amortization of our favorable lease asset.
o The impact of fully vested irrevocable commitments to issue 382,500
shares of stock to our five senior executive officers made in
connection with the initial public offering and expensed in the second
quarter. The impact of these grants do not reflect the underlying
performance of the Company.
o Cumulative effect of a change in accounting principle -- Infrequently,
the Financial Accounting Standards Board (FASB) promulgates new
accounting standards that require the consolidated statement of
operations to reflect the cumulative effect of a change in accounting
principle. We exclude these one-time adjustments because they do not
reflect our actual performance for that period.
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Third Quarter 2005
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o Impairment Losses -- We exclude the effect of impairment losses
recorded because we believe that including them in EBITDA is not
consistent with reflecting the ongoing performance of our remaining
assets. In addition, we believe that impairment charges are similar to
gains (losses) on dispositions and depreciation expense, both of which
are also excluded from EBITDA.
Historical
-------------------------------------------
Fiscal Period from
Quarter Ended January 1, 2005 to
September 9 , 2005 September 9 , 2005
-------------------- --------------------
FFO $ 9,565,864 $ 7,182,928
Non-cash ground rent 1,730,168 4,910,278
Initial public offering stock grants -- 3,736,250
-------------------- --------------------
Adjusted FFO $ 11,296,032 $ 15,829,456
==================== ====================
Adjusted FFO per Share (Basic and Diluted) $ 0.22 $ 0.47
==================== ====================
Forecast Full Year 2005
-------------------------------------------
Low End High End
-------------------- --------------------
FFO $ 17,463,750 $ 19,463,750
Non-cash ground rent 7,150,000 7,150,000
Initial public offering stock grants 3,736,250 3,736,250
-------------------- --------------------
Adjusted FFO $ 28,350,000 $ 30,350,000
==================== ====================
Certain Definitions
In this supplemental, when we discuss the "twelve hotels" we are discussing all
of our hotels except SpringHill Suites Buckhead (Atlanta) and the Oak Brook
Hills Marriott Resort and when we discuss the "fourteen hotels" we are
discussing all of our hotels. We exclude the two hotels from our discussion to
enable our investors to compare our performance on a same store basis with the
guidance we provided at the end of the second quarter. We excluded the
SpringHill Suites Buckhead from our prior guidance as it had been open only
since July 2005 and has no comparable period in the prior year. We excluded the
Oak Brook Hills Marriott Resort because the Company excluded the results in
certain guidance provided when the Company released second quarter results. At
that time, the Company had not completed its audit of the property and the hotel
was undergoing a brand conversion.
In this release, when we discuss "Hotel Adjusted EBITDA", we exclude from Hotel
EBITDA the non-cash expense incurred by the hotel due to the straight lining of
the rent from our ground lease obligations and the non-cash amortization of our
favorable lease asset. Hotel EBITDA represents hotel net income (loss)
excluding: (1) interest expense; (2) income taxes; and (3) depreciation and
amortization. Hotel Adjusted EBITDA margins are calculated as Hotel Adjusted
EBITDA divided by total hotel revenues.
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DiamondRock Hospitality Company
Pro Forma Financial Information for the Fiscal Quarters Ended September
9, 2005 and September 10, 2004 and the Periods from January 3, 2004
to September 10, 2004 and January 1, 2005 to September 9, 2005
The acquired properties are included in our results of operations from the
respective dates of acquisition. The following unaudited pro forma results
of operations reflect these transactions as if each had occurred on the first
day of the fiscal period presented. In our opinion, all significant adjustments
necessary to reflect the effects of the acquisitions have been made; however, a
preliminary allocation of the purchase price to land and buildings was made, and
we will finalize the allocation after all information is obtained.
Period from Period from
Fiscal Fiscal January 1, 2005 January 3, 2004 to
Quarter Ended Quarter Ended to September 9, September 10,
September 9, 2005 September 10, 2004 2005 2004
-------------------------------------- --------------------------------------
Revenues $ 72,515,200 $ 68,265,825 $ 226,125,395 $ 210,289,146
Hotel level expenses 57,712,154 55,115,445 172,088,221 165,435,239
Depreciation and
amortization 7,949,197 7,634,092 24,173,933 23,328,370
Corporate expenses 2,452,887 2,200,000 10,399,626 6,400,000
Interest expenses, net 4,049,953 4,747,736 12,986,275 14,324,860
Income tax benefit 1,949,897 907,570 2,706,346 4,946,017
-------------------------------------- --------------------------------------
Net income (loss) $ 2,300,906 $ (523,878) $ 9,183,686 $ 5,746,694
====================================== ======================================
EBITDA $ 13,004,360 $ 10,950,380 $ 44,852,576 $ 38,453,907
====================================== ======================================
Adjusted EBITDA $ 14,801,109 $ 12,747,129 $ 53,842,257 $ 43,707,338
====================================== ======================================
FFO $ 10,250,103 $ 7,110,214 $ 33,357,619 $ 29,075,064
====================================== ======================================
Adjusted FFO $ 12,046,852 $ 8,906,963 $ 42,347,300 $ 34,328,495
====================================== ======================================
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Debt Summary
(dollars in thousands)
Interest Spread to Outstanding
Property Rate LIBOR Principal Maturity
- ------------------------------------------------------ ------------ ------------ -------------- -----------------------------
Courtyard Manhattan / Midtown East 5.195% Fixed $ 44,354 December 2009
Marriott Salt Lake City Downtown 5.500% Fixed 38,290 December 2014
Courtyard Manhattan / Fifth Avenue 6.325% 270bps 23,000 January 2007
Marriott Griffin Gate Resort 5.110% Fixed 30,597 January 2010
Bethesda Marriott Suites 7.690% Fixed 19,440 February 2023
Marriott Los Angeles Airport 5.300% Fixed 82,600 June 2015
Marriott Frenchman's Reef & Morning Star Beach Resort 5.440% Fixed 62,500 July 2015
Renaissance Worthington 5.400% Fixed 57,400 June 2015
Credit Facility Borrowings (as of September 9, 2005) 5.120% 145bps 5,000 July 2008
--------------
Total Debt (excluding Debt Premium) 5.52% (weighted average) 363,181 8.35 yrs. (weighted average)
==============
Fixed Interest Rate Debt to Total Debt 92.3%
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PORTFOLIO DATA
Portfolio Summary at September 9, 2005
% of
Property Location Rooms Total
- ------------------------------------------------------ ----------------------------- --------- --------
Marriott Los Angeles Airport Los Angeles, CA 1,004 18%
Salt Lake City Marriott Downtown Salt Lake City, UT 510 9%
Frenchman's Reef & Morning Star Marriott Beach Resort St. Thomas, U.S. Virgin Islands 504 9%
Renaissance Worthington Fort Worth, TX 504 9%
Torrance Marriott Los Angeles County, CA 487 9%
Marriott Griffin Gate Resort Lexington, KY 408 7%
Oak Brook Hills Resort & Conference Center Oak Brook, IL 384 7%
Vail Marriott Mountain Resort & Spa Vail, CO 346 6%
Marriott Atlanta Alpharetta Alpharetta, GA 318 6%
Courtyard Manhattan / Midtown East New York, NY 307 5%
Bethesda Marriott Suites Bethesda, MD 274 5%
SpringHill Suites Buckhead Atlanta, GA 220 4%
Courtyard Manhattan / Fifth Avenue New York, NY 185 3%
The Lodge at Sonoma, a Renaissance Resort & Spa Sonoma, CA 182 3%
--------- --------
Total Portfolio as of September 9, 2005 5,633 100%
========= ========
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Selected Financial and Operating Information by Property
Properties Owned as of September 9, 2005
(in thousands, except selected operating information)
The following tables present, except where noted, selected financial and
operating information by property for the fiscal quarter ended September 9,
2005, the period from January 1, 2005 to September 9, 2005, and the comparable
periods during 2004. Where relevant, the data is pro forma as it assumes that
the hotels were owned by the Company for the entire reporting periods of 2005
and 2004. Hotel Adjusted EBITDA reflects property net operating income excluding
corporate expenses, the non-cash expense incurred from straight lining the rent
from our ground lease obligations (where applicable), interest expense and
depreciation and amortization.
Fiscal Third Quarter Year-to-Date
------------------------------------------ -----------------------------------------
Ended Sept. Ended Sept. % Change Ended Sept. Ended Sept.
9, 2005 10, 2004 9, 2005 10, 2004 % Change
------------------------------------------ -----------------------------------------
MARRIOTT ATLANTA ALPHARETTA
- ---------------------------
Average Occupancy 57.8% 58.4% (-0.6 pts) 60.4% 60.6% (-0.2 pts)
ADR $ 132.22 $ 121.38 8.9% $ 132.92 $ 121.48 9.4%
RevPAR $ 76.44 $ 70.88 7.8% $ 80.27 $ 73.60 9.1%
Total Revenues $ 2,911 $ 2,816 3.3% $ 9,611 $ 8,814 9.0%
Net Income / (Loss) $ 446 $ 471 $ 1,973 $ 1,591
Plus: Depreciation $ 330 $ 304 $ 943 $ 912
--------------------------- ----------------------------
Hotel Adjusted EBITDA $ 776 $ 775 0.1% $ 2,916 $ 2,503 16.5%
=========================== ============================
BETHESDA MARRIOTT SUITES
- ------------------------
Average Occupancy 86.0% 73.1% 12.9 pts 77.2% 74.1% 3.1 pts
ADR $ 142.70 $ 153.53 (7.0%) $ 159.29 $ 154.60 3.0%
RevPAR $ 122.77 $ 112.20 9.4% $ 122.92 $ 114.56 7.3%
Total Revenues $ 3,761 $ 3,545 6.1% $ 11,164 $ 10,642 4.9%
Net Income / (Loss) $ (1,414) $ (1,362) $ (4,125) $ (4,111)
Plus: Depreciation $ 542 $ 530 $ 1,621 $ 1,591
Plus: Interest Expense $ 375 $ 317 $ 1,067 $ 951
Plus: Non-Cash Ground Rent $ 1,517 $ 1,517 $ 4,550 $ 4,550
--------------------------- ----------------------------
Hotel Adjusted EBITDA $ 1,020 $ 1,002 1.8% $ 3,113 $ 2,981 4.4%
=========================== ============================
Page 18
Supplemental Information
Third Quarter 2005
------------------
Fiscal Third Quarter Year-to-Date
------------------------------------------ -----------------------------------------
Ended Sept. Ended Sept. % Change Ended Sept. Ended Sept.
9, 2005 10, 2004 9, 2005 10, 2004 % Change
------------------------------------------ -----------------------------------------
SPRINGHILL SUITES BUCKHEAD
- --------------------------
(This property opened for business on July 1, 2005. The results presented below represent only our period of ownership.)
Average Occupancy 40.3% N/A N/A 40.3% N/A N/A
ADR $ 95.24 N/A N/A $ 95.2 N/A N/A
RevPAR $ 38.34 N/A N/A $ 38.34 N/A N/A
Total Revenues $ 476 N/A N/A $ 476 N/A N/A
Net Income / (Loss) $ (2) N/A N/A $ (2) N/A N/A
Plus: Depreciation $ 157 N/A N/A $ 157 N/A N/A
------------- --------------
Hotel Adjusted EBITDA $ 155 N/A N/A $ 155 N/A N/A
============= ==============
COURTYARD MANHATTAN / FIFTH AVENUE
- ----------------------------------
(This property received the Courtyard brand in January 2005. During the comparable periods of 2004, the property was branded
as a Clarion for a portion of the period and unaffiliated the remainder. The historical results presented here represent the
three months ended August 31, 2005 and 2004, and the eight months ended August 31, 2005 and 2004.)
Average Occupancy 78.1% 94.8% (-16.8 pts) 83.6% 87.9% (-4.3 pts)
ADR $ 188.16 $ 128.78 46.1% $ 185.79 $ 128.13 45.0%
RevPAR $ 146.92 $ 122.14 20.3% $ 155.26 $ 112.57 37.9%
Total Revenues $ 1,639 $ 2,208 (25.8%) $ 6,663 $ 5,414 23.1%
Net Income / (Loss) $ (883) $ (516) $ (1,143) $ (1,774)
Plus: Depreciation $ 502 $ 461 $ 1,507 $ 1,230
Plus: Interest Expense $ 285 $ 441 $ 979 $ 1,176
Plus: Non-Cash Ground Rent $ 72 $ - $ 216 $ -
------------- ------------- -------------- -------------
Hotel Adjusted EBITDA $ (24) $ 386 (106.2%) $ 1,559 $ 632 146.7%
============= ============= ============== =============
COURTYARD MANHATTAN / MIDTOWN EAST
- ----------------------------------
Average Occupancy 88.2% 89.5% (-1.3 pts) 87.9% 89.0% (-1.1 pts)
ADR $ 211.05 $ 185.53 13.8% $ 206.28 $ 181.23 13.8%
RevPAR $ 186.25 $ 166.09 12.1% $ 181.31 $ 161.36 12.4%
Total Revenues $ 5,038 $ 4,489 12.2% $ 14,767 $ 13,169 12.1%
Net Income / (Loss) $ 833 $ 200 $ 1,615 $ 463
Plus: Depreciation $ 384 $ 661 $ 1,925 $ 1,984
Plus: Interest Expense $ 541 $ 547 $ 1,643 $ 1,642
------------- ------------- -------------- -------------
Hotel Adjusted EBITDA $ 1,758 $ 1,408 24.9% $ 5,183 $ 4,089 26.8%
============= ============= ============== =============
Page 19
Supplemental Information
Third Quarter 2005
------------------
Fiscal Third Quarter Year-to-Date
------------------------------------------ -----------------------------------------
Ended Sept. Ended Sept. % Change Ended Sept. Ended Sept.
9, 2005 10, 2004 9, 2005 10, 2004 % Change
------------------------------------------ -----------------------------------------
FRENCHMAN'S REEF & MORNING STAR MARRIOTT BEACH RESORT
- -----------------------------------------------------
(This property reports results on a monthly basis. The historical results presented here represent
the three months ended August 31, 2005 and 2004, and the eight months ended August 31, 2005 and
2004.)
Average Occupancy 81.6% 76.3% 5.3 pts 84.0% 78.6% 5.4 pts
ADR $ 161.18 $ 149.65 7.7% $ 206.91 $ 189.95 8.9%
RevPAR $ 131.50 $ 114.17 15.2% $ 173.81 $ 149.38 16.4%
Total Revenues $ 9,933 $ 9,034 10.0% $ 32,811 $ 29,773 10.2%
Net Income / (Loss) $ 13 $ (624) $ 4,990 $ 3,160
Plus: Depreciation $ 906 $ 583 $ 2,083 $ 1,750
Plus: Interest Expense $ 680 $ 791 $ 2,379 $ 2,374
------------- ------------- -------------- -------------
Hotel Adjusted EBITDA $ 1,599 $ 750 113.2% $ 9,452 $ 7,284 29.8%
============= ============= ============== =============
MARRIOTT GRIFFIN GATE RESORT
- ----------------------------
Average Occupancy 70.7% 76.5% (-5.8 pts) 65.7% 68.2% (-2.5 pts)
ADR $ 117.05 $ 107.61 8.8% $ 118.65 $ 107.51 10.4%
RevPAR $ 82.76 $ 82.32 0.5% $ 77.99 $ 73.37 6.3%
Total Revenues $ 5,758 $ 5,608 2.7% $ 16,078 $ 15,213 5.7%
Net Income / (Loss) $ 509 $ 646 $ 1,211 $ 1,040
Plus: Depreciation $ 485 $ 412 $ 1,444 $ 1,235
Plus: Interest Expense $ 370 $ 370 $ 1,114 $ 1,109
Plus: Non-Cash Ground Rent $ 1 $ - $ 3 $ -
------------- ------------- -------------- -------------
Hotel Adjusted EBITDA $ 1,365 $ 1,428 (4.4%) $ 3,772 $ 3,384 11.5%
============= ============= ============== =============
MARRIOTT LOS ANGELES AIRPORT
- ----------------------------
Average Occupancy 82.9% 82.5% 0.4 pts 79.1% 80.2% (-1.1 pts)
ADR $ 97.49 $ 91.98 6.0% $ 101.55 $ 96.22 5.5%
RevPAR $ 80.86 $ 75.90 6.5% $ 80.37 $ 77.21 4.1%
Total Revenues $ 11,210 $ 10,694 4.8% $ 34,810 $ 33,553 3.7%
Net Income / (Loss) $ 908 $ 475 $ 2,992 $ 2,484
Plus: Depreciation $ 950 $ 875 $ 2,717 $ 2,626
Plus: Interest Expense $ 969 $ 1,028 $ 3,102 $ 3,084
------------- ------------- -------------- -------------
Hotel Adjusted EBITDA $ 2,827 $ 2,378 18.9% $ 8,811 $ 8,194 7.5%
============= ============= ============== =============
Page 20
Fiscal Third Quarter Year-to-Date
------------------------------------------ -----------------------------------------
Ended Sept. Ended Sept. % Change Ended Sept. Ended Sept.
9, 2005 10, 2004 9, 2005 10, 2004 % Change
------------------------------------------ -----------------------------------------
OAK BROOK HILLS MARRIOTT RESORT
- -------------------------------
(This property converted to the Marriott brand in late-July 2005. During the comparable periods of 2004 and early 2005, the
property was unaffiliated. The historical results presented here represent the fiscal quarter beginning July 1 and ending
September 9, 2005 and August 31, 2004, and the eight months ended August 31, 2005 and 2004.)
Average Occupancy 60.6% 56.3% 4.3 pts 53.2% 48.7% 4.5 pts
ADR $ 119.64 $ 121.28 (1.4%) $ 118.27 $ 123.05 (3.9%)
RevPAR $ 72.51 $ 68.32 6.1% $ 62.95 $ 59.96 5.0%
Total Revenues $ 5,731 $ 4,647 23.3% $ 16,834 $ 15,598 7.9%
Net Income / (Loss) $ 592 $ 289 $ 603 $ 13
Plus: Depreciation $ 695 $ 790 $ 2,446 $ 2,371
Plus: Non-Cash Ground Rent $ 138 $ 138 $ 415 $ 415
------------- ------------- -------------- -------------
Hotel Adjusted EBITDA $ 1,425 $ 1,217 17.1% $ 3,464 $ 2,799 23.8%
============= ============= ============== =============
SALT LAKE CITY MARRIOTT DOWNTOWN
- --------------------------------
Average Occupancy 76.4% 70.4% 5.9 pts 72.3% 68.8% 3.4 pts
ADR $ 116.72 $ 116.97 (0.2%) $ 118.60 $ 116.26 2.0%
RevPAR $ 89.12 $ 82.40 8.2% $ 85.69 $ 80.00 7.1%
Total Revenues $ 5,404 $ 5,302 1.9% $ 16,226 $ 15,475 4.9%
Net Income / (Loss) $ 548 $ 279 $ 1,177 $ 816
Plus: Depreciation $ 563 $ 556 $ 1,689 $ 1,667
Plus: Interest Expense $ 492 $ 499 $ 1,497 $ 1,498
------------- ------------- -------------- -------------
Hotel Adjusted EBITDA $ 1,603 $ 1,334 20.1% $ 4,363 $ 3,981 9.6%
============= ============= ============== =============
THE LODGE AT SONOMA, A RENAISSANCE RESORT & SPA
- -----------------------------------------------
Average Occupancy 81.6% 76.2% 5.4 pts 71.3% 65.1% 6.2 pts
ADR $ 227.38 $ 207.75 9.4% $ 198.92 $ 184.88 7.6%
RevPAR $ 185.62 $ 158.34 17.2% $ 141.89 $ 120.35 17.9%
Total Revenues $ 4,600 $ 4,133 11.3% $ 11,233 $ 9,828 14.3%
Net Income / (Loss) $ 794 $ 736 $ 573 $ 137
Plus: Depreciation $ 405 $ 408 $ 1,229 $ 1,224
------------- ------------- -------------- -------------
Hotel Adjusted EBITDA $ 1,199 $ 1,144 4.8% $ 1,802 $ 1,361 32.4%
============= ============= ============== =============
Page 21
Fiscal Third Quarter Year-to-Date
------------------------------------------- -----------------------------------------
Ended Sept. Ended Sept. % Change Ended Sept. Ended Sept. % Change
9, 2005 10, 2004 9, 2005 10, 2004
-------------- ------------- -------------- -------------- ------------- ------------
TORRANCE MARRIOTT
- -----------------
Average Occupancy 86.1% 82.8% 3.3 pts 82.0% 77.9% 4.1 pts
ADR $ 100.97 $ 98.59 2.4% $ 102.81 $ 99.05 3.8%
RevPAR $ 86.96 $ 81.66 6.5% $ 84.29 $ 77.13 9.3%
Total Revenues $ 4,975 $ 4,780 4.1% $ 15,157 $ 14,083 7.6%
Net Income / (Loss) $ 207 $ 73 $ 424 $ (10)
Plus: Depreciation $ 1,081 $ 1,084 $ 3,302 $ 3,251
-------------- ------------- -------------- -------------
Hotel Adjusted EBITDA $ 1,288 $ 1,157 11.4% $ 3,726 $ 3,241 15.0%
============== ============= ============== =============
VAIL MARRIOTT MOUNTAIN RESORT & SPA
- -----------------------------------
(This property reports results on a monthly basis. The historical results presented here represent the three months ended
August 31, 2005 and 2004, and the eight months ended August 31, 2005 and 2004.)
Average Occupancy 58.8% 68.2% (-9.4 pts) 63.8% 66.4% (-2.6 pts)
ADR $ 141.08 $ 135.18 4.4% $ 200.02 $ 185.50 7.8%
RevPAR $ 82.97 $ 92.18 (10.0%) $ 127.64 $ 123.22 3.6%
Total Revenues $ 4,229 $ 5,204 (18.7%) $ 16,035 $ 16,042 (0.0%)
Net Income / (Loss) $ (49) $ 320 $ 3,056 $ 2,697
Plus: Depreciation $ 495 $ 578 $ 1,603 $ 1,541
-------------- ------------- -------------- -------------
Hotel Adjusted EBITDA $ 446 $ 898 (50.3%) $ 4,659 $ 4,238 10.0%
============== ============= ============== =============
RENAISSANCE WORTHINGTON
- -----------------------
Average Occupancy 74.2% 70.0% 4.2 pts 78.3% 75.4% 2.9 pts
ADR $ 141.70 $ 131.85 7.5% $ 148.75 $ 136.40 9.1%
RevPAR $ 105.20 $ 92.30 14.0% $ 116.50 $ 102.81 13.3%
Total Revenues $ 6,841 $ 6,564 4.2% $ 24,249 $ 22,658 7.0%
Net Income / (Loss) $ (126) $ (445) $ 1,821 $ 957
Plus: Depreciation $ 412 $ 637 $ 1,698 $ 1,912
Plus: Interest Expense $ 669 $ 714 $ 2,152 $ 2,143
-------------- ------------- -------------- -------------
Hotel Adjusted EBITDA $ 955 $ 906 5.4% $ 5,671 $ 5,012 13.1%
============== ============= ============== =============
Page 22