LaSalle Hotel Properties reports first quarter results
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LaSalle Hotel Properties reports first quarter results
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Category: Worldwide - Industry economy -
Figures / Studies
This is a press release selected by our editorial committee and published online for free on 2009-04-23
LaSalle Hotel Properties (NYSE: LHO) today reported a net loss to common shareholders of $18.9 million, or ($0.46) per diluted share for the quarter ended March 31, 2009, compared to a net loss of $14.8 million, or ($0.37) per diluted share for the first quarter of 2008.
For the quarter ended March 31, 2009, the Company generated funds from operations (“FFO”) of $8.6 million versus $9.8 million for the first quarter of 2008. On a per diluted share basis, FFO for the quarter was $0.21, compared to $0.24 for the same period of 2008.
The Company’s earnings before interest, taxes, depreciation and amortization (“EBITDA”) for the first quarter of 2009 was $21.3 million as compared to $24.5 million for the first quarter of 2008.
Room revenue per available room (“RevPAR”) in the first quarter of 2009 was $104.01, which was a decrease of 11.8 percent compared to the same period of 2008. Average daily rate (“ADR”) declined 5.5 percent from the first quarter of 2008 to $172.15, while occupancy fell 6.7 percent to 60.4 percent.
“Our significant investment in Washington, DC coupled with the continued ramp up of a number of recently redeveloped and repositioned hotels enabled us to significantly outperform the industry on a RevPAR basis,” said Jon Bortz, Chairman and Chief Executive Officer of LaSalle Hotel Properties. “Despite an extremely difficult operating environment, the initiatives we and our operators have put in place to mitigate EBITDA margin erosion proved to be extremely effective and should result in enhanced operational efficiencies in the future. Though we expect the operating environment to continue to be difficult, we are seeing some initial signs of stabilization in recent demand trends.”
The Company’s hotels generated $23.6 million of EBITDA for the quarter ended March 31, 2009 compared with $28.2 million for the same period of 2008. Hotel revenues declined 9.1 percent while hotel expenses were reduced by 7.2 percent. As a result, hotel EBITDA margins were limited to a decline of only 169 basis points. Before the impact of property taxes, margins declined just 107 basis points.
As of March 31, 2009, the Company had total outstanding debt of $966.1 million including the Company’s senior unsecured credit facility balance of $273.8 million. Total debt to trailing 12 month Corporate EBITDA (as defined by our senior unsecured credit facility) equaled 4.8 times as of March 31, 2009. For the quarter, the Company’s weighted average interest rate was 4.1 percent. As of March 31, 2009, based on the Company’s covenants under its senior unsecured credit facility, the Company’s EBITDA to interest coverage ratio was 4.2 times and its fixed charge coverage ratio was 2.2 times. At the end of the quarter, the Company had $14.1 million of cash and cash equivalents on its balance sheet and an aggregate of $196.5 million available on its senior unsecured credit facility and the line of credit of LaSalle Hotel Lessee, Inc., the Company’s wholly owned taxable REIT subsidiary.
First Quarter Highlights
On January 1, 2009, Le Montrose Suite Hotel transitioned to a new lease with LaSalle Hotel Lessee, Inc. As a result, all of the Company’s 31 hotels are now leased to LaSalle Hotel Lessee, Inc.
On February 1, 2009, each of the 2,348,888 7.25% Series C Preferred Units was redeemed and the Company issued 2,348,888 7.25% Series C Cumulative Redeemable Preferred Shares of Beneficial Interest. As a result of the redemption of all of the partnership units previously issued in consideration for the purchase of the Westin Copley in 2005, the contingent obligation of the Company to reimburse the seller of the hotel up to $20.0 million of taxes related to unrealized taxable gains created at the time of the Company’s acquisition of the hotel, as described in the Tax Reporting and Protection Agreement entered into by the Company, has become null and void.
On February 2, 2009, the Company retired, without penalty, $38.4 million of outstanding mortgage principal balances on the Westin City Center Dallas and Sheraton Bloomington Hotel Minneapolis South with funds drawn from the senior unsecured credit facility.
On February 4, 2009, the Company announced a quarterly dividend of $0.01 per common share for the first quarter of 2009. The first quarter dividend was paid on April 15, 2009 to common shareholders of record on March 31, 2009.
Subsequent Events
On April 16, 2009, SCG Hotel DLP, L.P. exchanged the above described 2,348,888 7.25% Series C Cumulative Redeemable Preferred Shares of Beneficial Interest for 2,348,888 7.25% Series G Cumulative Redeemable Preferred Shares of Beneficial Interest in a private transaction with the Company.
Earnings Call
The Company will conduct its quarterly conference call on Thursday, April 23, 2009 at 11:30 AM EDT. To participate in the conference call, please dial (877) 795-3649. Additionally, a live webcast of the Earnings Call will be available through the Company’s website. To access, log on to http://www.lasallehotels.com. A replay of the conference call will be archived and available online through the Investor Relations section of http://www.lasallehotels.com.
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