Company Results

Pebblebrook Hotel Trust Third Quarter 2013 Net Income Up 50%

The Company’s hotels generated $47.3 million of Same-Property EBITDA for the quarter ended September 30, 2013, climbing 5.4 percent from the same period of 2012. Same-Property Revenues increased 5.0 percent, while Same-Property Expenses rose 4.8 percent. As a result, Same-Property EBITDA Margin grew to 30.9 percent for the quarter ended September 30, 2013, representing an improvement of 11 basis points as compared to the same period last year.

Pebblebrook Hotel Trust

BETHESDA, Md.--(BUSINESS WIRE)--Pebblebrook Hotel Trust (NYSE: PEB) reported results for the third quarter ended September 30, 2013. The Company’s results include the following:

         
        Nine Months Ended,
    Third Quarter   September 30
    2013   2012   2013   2012
    ($ in millions except per share and RevPAR data)
                 
Net income (loss) to common shareholders   $11.3   $7.5   $15.1   $5.6
Net income (loss) per diluted share   $0.18   $0.13   $0.24   $0.10
                 
Same-Property RevPAR(1)   $202.10   $190.25   $186.21   $174.25
Same-Property RevPAR growth rate   6.2%       6.9%    
                 
Same-Property EBITDA(1)   $47.3   $44.9   $119.1   $109.7
Same-Property EBITDA growth rate   5.4%       8.6%    
Same-Property EBITDA Margin(1)   30.9%   30.8%   28.1%   27.3%
                 
Adjusted EBITDA(1)   $44.4   $35.4   $109.3   $82.3
Adjusted EBITDA growth rate   25.5%       32.8%    
                 
Adjusted FFO(1)   $28.3   $22.0   $66.7   $47.6
Adjusted FFO per diluted share(1)   $0.46   $0.37   $1.08   $0.86
Adjusted FFO per diluted share growth rate   24.3%       25.6%    
                 

(1) See tables later in this press release for a description of same-property information and reconciliations from net income (loss) to non-GAAP financial measures, including earnings before interest, taxes, depreciation and amortization ("EBITDA"), Adjusted EBITDA, Funds from Operations ("FFO"), FFO per share, Adjusted FFO and Adjusted FFO per share.

For the details as to which hotels are included in Same-Property revenue per available room (“RevPAR”), average daily rate (“ADR”), Occupancy, Revenues, Expenses, EBITDA and EBITDA Margins appearing in the table above and elsewhere in this press release, refer to the Same-Property Inclusion Reference Table later in this press release.

“We’re very pleased with the performance of our portfolio during the third quarter, despite economic and political headwinds, as we continued to outperform the hotel industry,” said Jon E. Bortz, Chairman, President and Chief Executive Officer of Pebblebrook Hotel Trust. “Our properties located on the west coast, primarily in San Francisco, Seattle and Portland, led the portfolio’s performance. The hotel industry continued to generate healthy RevPAR growth in the quarter, as demand outpaced limited new supply, leading to increased pricing power and higher rates for our portfolio and the lodging industry.”

Third Quarter Highlights

  • Same-Property RevPAR: Same-Property revenue per available room (“Same-Property RevPAR”) in the third quarter of 2013 increased 6.2 percent over the same period of 2012 to $202.10. Same-Property average daily rate (“Same-Property ADR”) grew 6.3 percent from the third quarter of 2012 to $232.85. Same-Property Occupancy declined 0.1 percent to 86.8 percent.
  • Same-Property EBITDA: The Company’s hotels generated $47.3 million of Same-Property EBITDA for the quarter ended September 30, 2013, climbing 5.4 percent from the same period of 2012. Same-Property Revenues increased 5.0 percent, while Same-Property Expenses rose 4.8 percent. As a result, Same-Property EBITDA Margin grew to 30.9 percent for the quarter ended September 30, 2013, representing an improvement of 11 basis points as compared to the same period last year.
  • Adjusted EBITDA: The Company’s Adjusted EBITDA increased to $44.4 million from $35.4 million in the prior year period, a gain of $9.0 million, or 25.5 percent.
  • Adjusted FFO: The Company’s Adjusted FFO climbed to $28.3 million from $22.0 million in the prior year period, an increase of 28.6 percent.
  • Dividends: On September 13, 2013, the Company declared a regular quarterly cash dividend of $0.16 per share on its common shares, a regular quarterly cash dividend of $0.4921875 per share on its 7.875 percent Series A Cumulative Redeemable Preferred Shares, a regular quarterly cash dividend of $0.50 per share on its 8.0 percent Series B Cumulative Redeemable Preferred Shares and a regular quarterly cash dividend of $0.40625 per share on its 6.50 percent Series C Cumulative Redeemable Preferred Shares.

“We were able to grow Same-Property RevPAR by 6.2 percent in the quarter despite disruptions caused by the on-going comprehensive renovation of Affinia 50, which is nearing completion. With very strong occupancy of 86.8 percent, occupancy was roughly flat in the quarter, and ADR gains made up all of our RevPAR growth,” added Mr. Bortz. “We’re excited about the continued progress we’re making in improving operating performance since acquiring our hotels, and we look forward to the future positive impact our array of best practice programs will have on further increasing the margins in our portfolio.”

Capital Reinvestment

During the third quarter, the Company invested $8.9 million in capital improvements in its portfolio.

In January 2013, the Company, along with its joint venture partner, commenced an $18.0 to $20.0 million comprehensive renovation, reconfiguration and expansion of the Affinia 50, which includes completely renovating its guest rooms, corridors, lobby, public areas and exterior. The reconfiguration of the hotel will increase the number of guest rooms by almost 20 percent, from 210 to 251. The project continues to be on budget and is expected to be substantially complete in November. The Company expects to fund its 49 percent pro rata share of the remaining total project costs with available cash.

On September 18, 2013, the Company up-branded its 310-room Sheraton Delfina Santa Monica to the upper upscale Le Méridien brand. In conjunction with the re-branding and repositioning, the Company expects to incur $0.5 million of transition costs and invest an additional $2.0 million for capital improvements in the hotel. Viceroy Hotels and Resorts continues to manage the property.

In addition to its capital reinvestment programs, Pebblebrook remains committed to implementing a comprehensive array of asset management best practices, initiatives and operating efficiencies throughout its portfolio to boost hotel revenues and improve operating efficiencies in a continuous effort to drive strong margin growth. Since its first hotel acquisition in 2010, the Company has identified almost $17.0 million of annualized best practices and asset management opportunities throughout its portfolio that it has either implemented or is in the process of implementing.

Acquisitions

On August 8, 2013, the Company acquired the Redbury Hotel for $34.0 million. The 57-suite, luxury full-service hotel is located in the heart of Hollywood, California. The property continues to be managed by sbe Hotel Group.

On August 28, 2013, the Company acquired the Hotel Modera for $47.5 million. The 174-room urban, boutique, upper upscale full-service hotel is located in downtown Portland, Oregon. The property is now managed by OLS Hotels and Resorts.

“We’re very enthusiastic about the $194.0 million of high-quality acquisitions this year in our west coast target markets of San Diego, Los Angeles and Portland,” said Mr. Bortz. “We believe these properties offer great opportunities for outsized RevPAR growth, margin expansion and value creation through the implementation of our asset management and best practice initiatives.”

Since its initial public offering in December 2009, the Company has acquired 28 properties totaling $2.2 billion of invested capital, including its joint venture with Denihan Hospitality Group, which owns six upper upscale hotels (the “Manhattan Collection”) in New York, New York.

Year-to-Date Highlights

  • Same-Property RevPAR, ADR and Occupancy: Same-Property RevPAR for the nine months ended September 30, 2013 increased 6.9 percent over the same period of 2012 to $186.21. Year-to-date, Same-Property ADR grew 4.7 percent to $221.39 from the comparable period of 2012, while year-to-date Same-Property Occupancy climbed 2.0 percent to 84.1 percent.
  • Same-Property Hotel EBITDA: The Company’s hotels generated $119.1 million of Same-Property Hotel EBITDA for the nine months ended September 30, 2013, an improvement of 8.6 percent compared with the same period of 2012. Same-Property Hotel Revenues grew 5.5 percent, while Same-Property Hotel Expenses rose 4.3 percent. As a result, Same-Property Hotel EBITDA Margin for the nine months ended September 30, 2013 improved 80 basis points to 28.1 percent as compared to the same period last year.
  • Adjusted EBITDA: The Company’s Adjusted EBITDA increased 32.8 percent, or $27.0 million, to $109.3 million from $82.3 million in the prior year period.
  • Adjusted FFO: The Company’s Adjusted FFO climbed 40.2 percent to $66.7 million from $47.6 million in the prior year period.

Balance Sheet

As of September 30, 2013, the Company had $550.6 million in consolidated debt and $225.4 million in unconsolidated, non-recourse, secured debt at weighted-average interest rates of 4.4 percent and 3.6 percent, respectively. The Company’s total combined consolidated and unconsolidated weighted-average interest rate on its debt is 4.2 percent. The Company had $100.0 million outstanding in the form of an unsecured term loan and no outstanding balance on its $200.0 million senior unsecured revolving credit facility. As of September 30, 2013, the Company had $126.0 million of consolidated cash, cash equivalents and restricted cash and $12.7 million of unconsolidated cash, cash equivalents and restricted cash. The unconsolidated debt, cash, cash equivalents and restricted cash amounts represent the Company’s 49 percent pro rata interest in the Manhattan Collection.

On September 30, 2013, as defined in the Company’s credit agreement, the Company’s fixed charge coverage ratio was 2.2 times and total net debt to trailing 12-month corporate EBITDA was 4.4 times. The Company’s total debt to total assets ratio was 32 percent. Excluding its interest in the off-balance sheet Manhattan Collection, the Company’s fixed charge coverage ratio was 2.1 times, net debt to trailing 12-month corporate EBITDA was 3.5 times and total debt to total assets ratio was 28 percent.

2013 Outlook

The Company's outlook for 2013, which assumes no additional acquisitions, has been increased to reflect the Company’s third quarter acquisitions of The Redbury Hotel and Hotel Modera, partially offset by the negative impact of the federal government shutdown in October. This outlook, which assumes similar ongoing economic growth, positive business travel trends and other significant assumptions, is as follows:

 
2013 Outlook
Low   High

($ and shares/units in millions,

except per share and RevPAR data)

 

Net income

$38.6 $40.6
Net income per diluted share $0.63 $0.66
 
Adjusted EBITDA $147.6 $149.6
 
Adjusted FFO $87.4 $89.4
Adjusted FFO per diluted share $1.42 $1.45
 
 

This 2013 outlook is based, in part, on the following estimates and assumptions:

 
 
U.S. GDP growth rate 1.5% 2.0%
U.S. Hotel Industry RevPAR growth rate 5.25% 5.75%
 
Same-Property RevPAR $185.00 $186.00
Same-Property RevPAR growth rate 6.0% 6.5%
 
Same-Property EBITDA $160.6 $162.6
Same-Property EBITDA Margin 28.2% 28.7%
Same-Property EBITDA Margin growth rate 75 bps 125 bps
 
Corporate cash general and administrative expenses $12.0 $12.0
Corporate non-cash general and administrative expenses $3.5 $3.5
 
Total capital investments related to renovations, capital maintenance and return on investment projects $55.0 $60.0
 
Weighted-average fully diluted shares and units 61.6 61.6
 

The Company’s outlook for the fourth quarter of 2013 is as follows:

 
Fourth Quarter 2013 Outlook
Low   High

($ and shares/units in millions,

except per share and RevPAR data)

 
Same-Property RevPAR $180.00 $184.00
Same-Property RevPAR growth rate 3.0% 5.0%
 
Same-Property EBITDA $41.5 $43.5
Same-Property EBITDA Margin 29.0% 29.5%
Same-Property EBITDA Margin growth rate 125 bps 175 bps
 
Adjusted EBITDA $38.3 $40.3
 
Adjusted FFO $20.7 $22.7
Adjusted FFO per diluted share $0.34 $0.37
 
Weighted-average fully diluted shares and units 61.7 61.7
 

The Company’s 2013 and Fourth Quarter Outlooks reflect the Company’s 49 percent pro rata interest in the Manhattan Collection.

The Company’s estimates and assumptions for Same-Property RevPAR, Same-Property RevPAR growth rate, Same-Property EBITDA, Same-Property EBITDA Margin and Same-Property EBITDA Margin growth for 2013 include the hotels owned as of September 30, 2013 as if they had been owned by the Company for the entire year of 2013, except for Hotel Zetta, which is not included in the first quarters of 2012 and 2013; The Redbury Hotel, which is not included in the first and second quarters of 2012 and 2013; and Hotel Modera, which is not included in the first, second and third quarters of 2012 and 2013. The Company’s 2013 outlook assumes no additional acquisitions beyond the hotels the Company owned as of September 30, 2013.

About Pebblebrook Hotel Trust

Pebblebrook Hotel Trust is a publicly traded real estate investment trust (“REIT”) organized to opportunistically acquire and invest primarily in upper upscale, full-service hotels located in urban markets in major gateway cities. The Company owns 28 hotels, including 22 wholly owned hotels with a total of 5,191 guest rooms and a 49% joint venture interest in six hotels with a total of 1,733 guest rooms. The Company owns, or has an ownership interest in, hotels located in ten states and the District of Columbia, including: Los Angeles, California (Hollywood, Santa Monica, West Hollywood and Westwood); San Diego, California; San Francisco, California; Miami, Florida; Buckhead, Georgia; Bethesda, Maryland; Boston, Massachusetts; Minneapolis, Minnesota; New York, New York; Portland, Oregon; Philadelphia, Pennsylvania; Columbia River Gorge, Washington; Seattle, Washington; and Washington, DC.

   
Pebblebrook Hotel Trust
Consolidated Balance Sheets
($ in thousands)
 
September 30, 2013 December 31, 2012
(Unaudited)
ASSETS
Assets:
Investment in hotel properties, net $ 1,603,236 $ 1,417,229
Investment in joint venture 256,658 283,011
Ground lease asset, net 10,118 10,283
Cash and cash equivalents 110,042 85,900
Restricted cash 15,930 12,034
Hotel receivables (net of allowance for doubtful accounts of $260 and $28, respectively) 23,500 13,463
Deferred financing costs, net 5,167 5,753
Prepaid expenses and other assets   20,194     18,489  
Total assets $ 2,044,845   $ 1,846,162  
 
 
LIABILITIES AND EQUITY
 
Liabilities:
Senior unsecured revolving credit facility $ - $ -
Term loan 100,000 100,000
Mortgage debt (including mortgage loan premium of $6,270 and $2,498, respectively) 456,847 368,508
Accounts payable and accrued expenses 57,916 47,364
Advance deposits 8,203 4,596
Accrued interest 1,896 1,328
Distribution payable   15,271     11,274  
Total liabilities 640,133 533,070
Commitments and contingencies
Shareholders' equity:

Preferred shares of beneficial interest, $.01 par value (liquidation preference of $325,000 and $225,000 at September 30, 2013 and December 31, 2012), 100,000,000 shares authorized; 13,000,000 shares issued and outstanding at September 30, 2013 and 9,000,000 issued and outstanding at December 31, 2012

130 90

Common shares of beneficial interest, $.01 par value, 500,000,000 shares authorized; 61,179,628 issued and outstanding at September 30, 2013 and 60,955,090 issued and outstanding at December 31, 2012

612 610
Additional paid-in capital 1,465,905 1,362,349
Accumulated other comprehensive income (loss) 911 (300 )
Distributions in excess of retained earnings   (64,191 )   (49,798 )
Total shareholders' equity   1,403,367     1,312,951  
Non-controlling interests   1,345     141  
Total equity   1,404,712     1,313,092  
Total liabilities and equity $ 2,044,845   $ 1,846,162  
       
Pebblebrook Hotel Trust
Consolidated Statement of Operations
($ in thousands, except per share data)
(Unaudited)
 
Three months ended Nine months ended
September 30, September 30,
  2013     2012     2013     2012  
 
Revenues:
Hotel operating revenues:
Room $ 90,093 $ 68,596 $ 240,632 $ 175,083
Food and beverage 32,900 29,236 99,291 83,630
Other operating   8,241     6,473     22,526     17,233  
Total revenues $ 131,234   $ 104,305   $ 362,449   $ 275,946  
 
Expenses:
Hotel operating expenses:
Room $ 22,063 $ 17,045 $ 61,768 $ 45,521
Food and beverage 24,705 21,716 74,180 61,836
Other direct 3,619 3,229 10,344 8,935
Other indirect   32,629     26,061     92,893     71,999  
Total hotel operating expenses 83,016 68,051 239,185 188,291
Depreciation and amortization 13,971 11,055 40,747 30,742
Real estate taxes, personal property taxes and property insurance 6,008 4,571 17,240 12,610
Ground rent 1,983 651 5,660 1,608
General and administrative 4,253 3,886 12,838 12,296
Hotel acquisition costs   268     514     1,429     1,340  
Total operating expenses 109,499 88,728 317,099 246,887
Operating income 21,735 15,577 45,350 29,059
Interest income 670 82 1,964 111
Interest expense (6,074 ) (3,949 ) (17,457 ) (10,671 )
Equity in earnings (loss) of joint venture   2,284     2,152     2,492     1,636  
Income (loss) before income taxes 18,615 13,862 32,349 20,135
Income tax (expense) benefit   (1,088 )   (1,757 )   (137 )   (840 )
Net income (loss) 17,527 12,105 32,212 19,295
Net income (loss) attributable to non-controlling interests   112     187     211     304  
Net income (loss) attributable to the Company 17,415 11,918 32,001 18,991
Distributions to preferred shareholders   (6,100 )   (4,456 )   (16,872 )   (13,369 )
Net income (loss) attributable to common shareholders $ 11,315   $ 7,462   $ 15,129   $ 5,622  
 
 
Net income (loss) per share available to common shareholders, basic and diluted $ 0.18 $ 0.13 $ 0.24 $ 0.10
 
Weighted-average number of common shares, basic 61,179,524 58,714,055 61,086,834 54,227,155
Weighted-average number of common shares, diluted 61,347,863 58,760,334 61,279,252 54,314,469
       
Pebblebrook Hotel Trust
Reconciliation of Net Income (Loss) to FFO, EBITDA, Adjusted FFO and Adjusted EBITDA
($ in thousands, except per share data)
(Unaudited)
 
Three months ended Nine months ended
September 30, September 30,
  2013     2012     2013     2012  
 
Net income (loss) $ 17,527 $ 12,105 $ 32,212 $ 19,295
Adjustments:
Depreciation and amortization 13,928 11,015 40,619 30,625
Depreciation and amortization from joint venture   2,022     2,469     6,776     7,333  
FFO $ 33,477   $ 25,589   $ 79,607   $ 57,253  
Distribution to preferred shareholders $ (6,100 ) $ (4,456 ) $ (16,872 ) $ (13,369 )
FFO available to common share and unit holders $ 27,377   $ 21,133   $ 62,735   $ 43,884  
Hotel acquisition costs 268 514 1,429 1,340
Non-cash ground rent 665 55 2,405 164
Amortization of LTIP units 395 395 1,185 1,185
Management/franchise contract transition costs 107 (79 ) 304 1,008
Interest expense adjustment for above market loan   (502 )   -     (1,374 )   -  
Adjusted FFO available to common share and unit holders $ 28,310   $ 22,018   $ 66,684   $ 47,581  
 
FFO per common share - basic $ 0.44 $ 0.35 $ 1.02 $ 0.80
FFO per common share - diluted $ 0.44 $ 0.35 $ 1.02 $ 0.79
Adjusted FFO per common share - basic $ 0.46 $ 0.37 $ 1.08 $ 0.86
Adjusted FFO per common share - diluted $ 0.46 $ 0.37 $ 1.08 $ 0.86
 
Weighted-average number of basic common shares and units 61,560,633 59,643,154 61,467,943 55,156,254
Weighted-average number of fully diluted common shares and units 61,728,972 59,689,433 61,660,361 55,243,568
 
 
Three months ended Nine months ended
September 30, September 30,
  2013     2012     2013     2012  
 
Net income (loss) $ 17,527 $ 12,105 $ 32,212 $ 19,295
Adjustments:
Interest expense 6,074 3,949 17,457 10,671
Interest expense from joint venture 2,306 3,164 6,601 9,675
Income tax expense (benefit) 1,088 1,757 137 840
Depreciation and amortization 13,971 11,055 40,747 30,742
Depreciation and amortization from joint venture   2,022     2,469     6,776     7,333  
EBITDA $ 42,988     $ 34,499   $ 103,930     $ 78,556  
Hotel acquisition costs 268 514 1,429 1,340
Non-cash ground rent 665 55 2,405 164
Amortization of LTIP units 395 395 1,185 1,185
Management/franchise contract transition costs   107     (79 )   304     1,008  
Adjusted EBITDA $ 44,423   $ 35,384   $ 109,253   $ 82,253  
 

To supplement the Company’s consolidated financial statements presented in accordance with U.S. generally accepted accounting principles ("GAAP"), this press release includes certain non-GAAP financial measures as defined under Securities and Exchange Commission (SEC) Rules.

These measures are not in accordance with, or an alternative to, measures prepared in accordance with GAAP and may be different from similarly titled non-GAAP measures used by other companies. In addition, these non-GAAP measures are not based on any comprehensive set of accounting rules or principles. Non-GAAP measures have limitations in that they do not reflect all of the amounts associated with the Company’s results of operations determined in accordance with GAAP.

Funds from Operations - Funds from operations (“FFO”) represents net income (computed in accordance with GAAP), plus real estate-related depreciation and amortization and after adjustments for unconsolidated partnerships. The Company considers FFO a useful measure of performance for an equity REIT because it facilitates an understanding of the operating performance of its properties without giving effect to real estate depreciation and amortization, which assume that the value of real estate assets diminishes predictably over time. Since real estate values have historically risen or fallen with market conditions, the Company believes that FFO provides a meaningful indication of its performance. The Company also considers FFO an appropriate performance measure given its wide use by investors and analysts. The Company computes FFO in accordance with standards established by the Board of Governors of NAREIT in its March 1995 White Paper (as amended in November 1999 and April 2002), which may differ from the methodology for calculating FFO utilized by other equity REITs and, accordingly, may not be comparable to that of other REITs. Further, FFO does not represent amounts available for management’s discretionary use because of needed capital replacement or expansion, debt service obligations or other commitments and uncertainties, nor is it indicative of funds available to fund the Company’s cash needs, including its ability to make distributions. The Company presents FFO per diluted share calculations that are based on the outstanding dilutive common shares plus the outstanding Operating Partnership units for the periods presented.

Earnings before Interest, Taxes, and Depreciation and Amortization ("EBITDA") - The Company believes that EBITDA provides investors a useful financial measure to evaluate its operating performance, excluding the impact of our capital structure (primarily interest expense) and our asset base (primarily depreciation and amortization).

The Company also evaluates its performance by reviewing Adjusted EBITDA and Adjusted FFO, because it believes that adjusting EBITDA and FFO to exclude certain recurring and non-recurring items described below provides useful supplemental information regarding the Company's ongoing operating performance and that the presentation of Adjusted EBITDA and Adjusted FFO, when combined with the primary GAAP presentation of net income (loss), more completely describes the Company's operating performance. The Company adjusts EBITDA and FFO for the following items, which may occur in any period, and refers to these measures as Adjusted EBITDA and Adjusted FFO:

- Non-cash ground rent: The Company excludes the non-cash ground rent expense, which is primarily made up of the straight-line rent impact from a ground lease.

- Hotel acquisition costs: The Company excludes acquisition transaction costs expensed during the period because it believes that including these costs in EBITDA and FFO does not reflect the underlying financial performance of the Company and its hotels.

- Reorganization costs from joint venture: The Company excludes reorganization costs expensed during the period because it believes that including these costs in EBITDA and FFO does not reflect the underlying financial performance of the Company and its hotels.

- Amortization of LTIP units: The Company excludes the non-cash amortization of LTIP Units expensed during the period.

- Management/franchise contract transition costs: The Company excludes one-time management and/or franchise contract transition costs expensed during the period because it believes that including these costs in EBITDA and FFO does not reflect the underlying financial performance of the Company and its hotels.

- Interest expense adjustment for above-market loans: The Company excludes interest expense adjustment for above-market loans assumed in connection with acquisitions, because it believes that including these non-cash adjustments in FFO does not reflect the underlying financial performance of the Company.

The Company’s presentation of FFO in accordance with the NAREIT White Paper and EBITDA, and as adjusted by the Company, should not be considered as an alternative to net income (computed in accordance with GAAP) as an indicator of the Company’s financial performance or to cash flow from operating activities (computed in accordance with GAAP) as an indicator of its liquidity. The table above is a reconciliation of the Company’s FFO and EBITDA calculations to net income in accordance with GAAP.

       
Pebblebrook Hotel Trust
Manhattan Collection Statements of Operations
(Reflects the Company's 49% ownership interest in the Manhattan Collection)
($ in thousands)
(Unaudited)
 
Three months ended Nine months ended
September 30, September 30,
  2013     2012     2013     2012  
 
Revenues:
Hotel operating revenues:
Room $ 19,284 $ 19,464 $ 53,193 $ 53,275
Food and beverage 1,318 1,402 4,652 4,672
Other operating   614     617     1,870     1,967  
Total revenues   21,216     21,483     59,715     59,914  
 
Expenses:
Total hotel expenses 14,471 13,640 43,591 41,320
Depreciation and amortization   2,022     2,469     6,776     7,333  
Total operating expenses   16,493     16,109     50,367     48,653  
Operating income (loss) 4,723 5,374 9,348 11,261
Interest income 25 31 58 99
Interest expense (2,306 ) (3,164 ) (6,601 ) (9,675 )
Other   (158 )   (89 )   (313 )   (49 )
Equity in earnings of joint venture $ 2,284   $ 2,152   $ 2,492   $ 1,636  
 
                 
 
Debt: Fixed Interest Rate Loan Amount
Mortgage(1) 3.61 % $ 225,400
Cash and cash equivalents   (5,872 )



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