LaSalle Hotel Properties Reports Second Quarter 2011 Results

LaSalle Hotel Properties today announced results for the quarter ended June 30, 2011. The Company's results include the following:

        

                                                                                      Second Quarter                             Year-to-Date

                                                                           

                                                                               2011                2010                 2011                2010

                                                                          ---  -- -

                                                                          ($'s in millions except per share data)   ($'s in millions except per share data)

             Total Revenue                                                     $   202.6        $          165.7       $ 340.9        $ 273.9

             Net income/(loss) to common shareholders                          $    16.7        $            8.0       $  (2.5)      $ (17.8)

             Net income/(loss) to common shareholders per diluted share        $    0.20        $           0.11       $ (0.03)      $ (0.27)

             EBITDA(1)                                                         $    67.2        $           55.5       $  90.5        $  70.3

             Adjusted EBITDA(1)                                                $    67.5        $           55.5       $  92.4        $  71.8

             FFO(1)                                                            $    44.7        $           35.9       $  53.2        $  37.4

             Adjusted FFO(1)                                                   $    45.0        $           35.9       $  55.0        $  38.8

             FFO per diluted share(1)                                          $    0.54        $           0.52       $  0.68        $  0.56

             Adjusted FFO per diluted share(1)                                 $    0.55        $           0.52       $  0.70        $  0.58

        

        

        (1)  See tables later in press release, which list adjustments that

             reconcile net income to earnings before interest, taxes,

             depreciation and amortization ("EBITDA"), adjusted EBITDA, funds

             from operations ("FFO"), FFO per share, adjusted FFO and adjusted

             FFO per share. EBITDA, adjusted EBITDA, FFO, FFO per share,

             adjusted FFO and adjusted FFO per share are non-GAAP financial

             measures. See further discussion of these non-GAAP measures and

             reconciliations to net income later in this press release.

        

Second Quarter Highlights

-- RevPAR: Room revenue per available room ("RevPAR") for the quarter ended June 30, 2011 increased 6.3 percent to $168.97, as a result of a 4.6 percent increase in average daily rate ("ADR") to $202.52 and a 1.6 percent increase in occupancy to 83.4 percent.

-- Hotel EBITDA margin: The Company's hotel EBITDA margin for the quarter ended June 30, 2011 was 35.1 percent, which was an improvement of 180 basis points compared to the comparable prior year period.

-- Adjusted EBITDA: The Company's adjusted EBITDA was $67.5 million, an increase of 21.6 percent over the second quarter of 2010.

-- Adjusted FFO: The Company generated adjusted FFO of $45.0 million, or $0.55 per diluted share, compared to $35.9 million or $0.52 per diluted share in the second quarter of 2010.

-- Acquisitions: The Company announced that it entered into a Purchase and Sale Agreement to acquire the Park Central Hotel in Midtown, Manhattan for $405.5 million. The transaction is now expected to close towards the end of the fourth quarter of 2011 due to seller related reasons.

-- Capital Markets: -- During April 2011, the Company sold 417,037 common shares through its ATM offering program resulting in net proceeds of approximately $11.1 million.

-- On April 26, 2011, the Company sold 7,896,612 common shares in an underwritten public offering, resulting in net proceeds of $216.7 million. These proceeds are intended to partially fund the acquisition of the Park Central Hotel.

-- Capital Investments: The Company invested $10.8 million of capital in its hotels, including the completion of guestroom renovations at the Westin Copley Place hotel, Hotel Rouge, Topaz Hotel and Hotel Viking.

-- Dividends: On June 15, 2011, the Company declared a second quarter 2011 dividend of $0.11 per common share of beneficial interest.

"We are very pleased with the performance of our portfolio during the quarter," said Michael D. Barnello, President and Chief Executive Officer of LaSalle Hotel Properties. "Our portfolio delivered strong RevPAR gains and continued to deliver exceptional EBITDA margins. We remain excited about the recovery in the lodging industry and within our portfolio as well."

Year-to-Date Highlights

For the six months ended June 30, 2011, RevPAR increased 6.6 percent to $142.23, with ADR growth of 5.2 percent to $189.04 and an occupancy increase of 1.4 percent to 75.2 percent. The Company's hotel EBITDA margin was 29.4 percent, an increase of 195 basis points compared to the comparable prior year period. The Company invested $20.0 million of capital in its hotels during the six months ended June 30, 2011.

Balance Sheet

As of June 30, 2011, the Company had total outstanding debt of $688.0 million. At the end of the quarter, the Company had no borrowings on either of its credit facilities. Total debt to trailing 12 month Corporate EBITDA (as defined in the Company's senior unsecured credit facility) was 3.4 times as of June 30, 2011. For the second quarter, the Company's weighted average interest rate was 5.3 percent. As of June 30, 2011, based on the Company's covenants under its senior unsecured credit facility, the Company's EBITDA to interest coverage ratio was 4.9 times and its fixed charge coverage ratio was 2.4 times. As of June 30, 2011, the Company had $231.1 million of cash and cash equivalents on its balance sheet and capacity of $471.5 million available on its credit facilities.

2011 Outlook

The Company maintains its RevPAR growth and EBITDA margin expectations for the full year and has updated its outlook to reflect the issuance of common stock to date, as follows:

        

                                                  Low-end             High-end

                                              --  

                                               ($'s in millions except per share data)

             RevPAR growth                             6.0%                      8.0%

             Adjusted EBITDA                       $  196.0        $            206.0

             Adjusted FFO                          $  120.1        $            128.1

             Adjusted FFO per diluted share        $   1.47        $             1.57

             Portfolio hotel EBITDA margins           30.0%                     31.0%

             Total capital investments             $   65.0        $             70.0

        

The Company's outlook excludes the Park Central acquisition.


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