Company Results

Pebblebrook Hotel Trust Reports Second Quarter 2014 Results

The Company’s hotels generated $57.4 million of Same-Property EBITDA for the quarter ended June 30, 2014, rising 12.1 percent compared with the same period of 2013. Same-Property Revenues climbed 6.1 percent, while Same-Property Hotel Expenses increased just 3.4 percent. As a result, Same-Property EBITDA Margin grew to 33.7 percent for the quarter ended June 30, 2014, an expansion of 178 basis points as compared to the same period last year.

Pebblebrook Hotel Trust

Pebblebrook Hotel Trust (NYSE: PEB) reported results for the second quarter ended June 30, 2014. 

Second Quarter Highlights

  • Same-Property RevPAR: Same-Property RevPAR in the second quarter of 2014 grew 9.2 percent over the same period of 2013 to $210.40. Same-Property ADR rose 7.6 percent from the second quarter of 2013 to $239.89. Same-Property Occupancy increased 1.4 percent to 87.7 percent.
  • Same-Property EBITDA: The Company’s hotels generated $57.4 million of Same-Property EBITDA for the quarter ended June 30, 2014, rising 12.1 percent compared with the same period of 2013. Same-Property Revenues climbed 6.1 percent, while Same-Property Hotel Expenses increased just 3.4 percent. As a result, Same-Property EBITDA Margin grew to 33.7 percent for the quarter ended June 30, 2014, an expansion of 178 basis points as compared to the same period last year.
  • Adjusted EBITDA: The Company’s Adjusted EBITDA increased $10.4 million, or 24.3 percent, to $53.3 million from $42.8 million in the prior year period.
  • Adjusted FFO: The Company’s Adjusted FFO climbed 36.5 percent to $36.0 million from $26.4 million in the prior year period.
  • Dividends: On June 16, 2014, the Company declared a regular quarterly cash dividend of $0.23 per share on its common shares, a regular quarterly cash dividend of $0.4921875 per share on its 7.875% Series A Cumulative Redeemable Preferred Shares, a regular quarterly cash dividend of $0.50 per share on its 8.00% Series B Cumulative Redeemable Preferred Shares and a regular quarterly cash dividend of $0.40625 per share on its 6.50% Series C Cumulative Redeemable Preferred Shares.

The Company’s results include the following:

   
Second Quarter Six Months Ended, June 30
2014   2013 2014   2013
($ in millions except per share and RevPAR data)
   
Net income (loss) to common shareholders $16.6 $8.7 $14.6 $3.8
Net income (loss) per diluted share $0.26 $0.14 $0.22 $0.06
 
Same-Property RevPAR(1) $210.40 $192.67 $189.81 $174.42
Same-Property RevPAR growth rate 9.2% 8.8%
 
Same-Property EBITDA(1) $57.4 $51.2 $92.1 $80.1
Same-Property EBITDA growth rate 12.1% 14.9%
Same-Property EBITDA Margin(1) 33.7% 31.9% 29.4% 27.3%
 
Adjusted EBITDA(1) $53.3 $42.8 $82.8 $64.8
Adjusted EBITDA growth rate 24.3% 27.7%
 
Adjusted FFO(1) $36.0 $26.4 $52.9 $38.4
Adjusted FFO per diluted share(1) $0.56 $0.43 $0.82 $0.62
Adjusted FFO per diluted share growth rate 29.9% 31.0%

 

(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 excited about the terrific performance of our portfolio in the second quarter, as we continued to outperform the hotel industry’s strong growth,” said Jon E. Bortz, Chairman, President and Chief Executive Officer of Pebblebrook Hotel Trust. “Our hotels continue to realize healthy increases in travel demand from the business and leisure transient segments, as well as ongoing strength from inbound international travel. In addition, the group demand rebound that we experienced in the year accelerated in the second quarter. These positive demand trends, coupled with strong pricing power, contributed to the robust increases in our income and our cash flow. Based on the strong performance experienced in the overall industry and our portfolio during the first half of 2014, as well as the group and transient pace for the second half of the year, we are increasing our outlook for the U.S. hotel industry and our portfolio.”

“We were able to grow same-property RevPAR by 9.2 percent in the second quarter, in excess of the industry’s 8.2 percent growth,” added Mr. Bortz. “As a result, same-property EBITDA increased 12.1 percent over the prior year as the implementation of our asset management and best practice initiatives continues to drive our strong results. We see further upside from our strategy of owning high-quality hotels located in high barrier to entry coastal gateway cities. Furthermore, our hotels continue to pick up market share in comparison to their competitors as they benefit from prior renovations and improvements. These benefits should continue to accrue over the next several years.”

Capital Reinvestment and Asset Management

During the second quarter, the Company invested $10.1 million in capital improvements throughout its portfolio, including the Company’s 49 percent interest in its six hotel joint venture with Denihan Hospitality Group (the “Manhattan Collection”). The Company’s capital improvements included $1.9 million at Hotel Palomar San Francisco, $1.0 million at Hotel Vintage Seattle, $0.9 million at Radisson Hotel Fisherman’s Wharf, and $0.7 million at W Los Angeles - Westwood.

As of the end of the second quarter, the Company has completed the addition of four guest rooms at the Embassy Suites San Diego Bay Downtown and the comprehensive renovation and repositioning of the 125-room Hotel Vintage Park Seattle, which has been renamed Hotel Vintage Seattle. The Company has also substantially completed the restaurant and lobby renovations along with the addition of five guest rooms at the 201-room Hotel Palomar San Francisco.

During the fourth quarter of 2014, the Company plans to commence a comprehensive renovation and repositioning at the 355-room Radisson Hotel Fisherman’s Wharf, a guest rooms and public areas renovation of the 258-room W Los Angeles-Westwood, including the potential addition of 39 guest rooms, and a lobby and atrium renovation at the 341-room Embassy Suites San Diego Bay Downtown.

Acquisitions

  • On May 22, 2014, the Company acquired the Prescott Hotel for $49.0 million. The 160-room, urban, upper-upscale hotel is located in the heart of Union Square in San Francisco, California.
  • On July 17, 2014 the Company acquired The Nines Hotel for $127.0 million. The 331-room luxury hotel is located across from Pioneer Square in downtown Portland, Oregon.

“We’re thrilled with the acquisition of these two terrific hotels located in our West Coast target markets of San Francisco and Portland,” commented Mr. Bortz. “We believe these properties offer great opportunities for outsized RevPAR growth, margin expansion and value creation through opportunistic capital investment and the implementation of our asset management and best practice initiatives in collaboration with our operating partners.”

Year-to-Date Highlights

  • Same-Property RevPAR, ADR and Occupancy: Same-Property RevPAR for the six months ended June 30, 2014 increased 8.8 percent over the same period of 2013 to $189.81. Year-to-date, Same-Property ADR grew 7.3 percent from the comparable period of 2013 to $225.67, while year-to-date Same-Property Occupancy climbed 1.4 percent to 84.1 percent.
  • Same-Property Hotel EBITDA: The Company’s hotels generated $92.1 million of Same-Property Hotel EBITDA for the six months ended June 30, 2014, an improvement of 14.9 percent compared with the same period of 2013. Same-Property Hotel Revenues grew 6.8 percent, while Same-Property Hotel Expenses rose 3.7 percent. As a result, Same-Property Hotel EBITDA Margin for the six months ended June 30, 2014 increased 208 basis points to 29.4 percent as compared to the same period last year.
  • Adjusted EBITDA: The Company’s Adjusted EBITDA increased 27.7 percent, or $18.0 million, to $82.8 million from $64.8 million in the prior year period.
  • Adjusted FFO: The Company’s Adjusted FFO climbed 37.7 percent to $52.9 million from $38.4 million in the prior year period.

Balance Sheet

As of June 30, 2014, the Company had $579.8 million in consolidated debt and $225.4 million in unconsolidated, non-recourse, secured debt at weighted-average interest rates of 4.2 percent and 3.6 percent, respectively. The Company’s total combined consolidated and unconsolidated weighted-average interest rate on its debt is 4.1 percent. The Company had $100.0 million outstanding in the form of an unsecured term loan and had a $36.0 million balance outstanding on its $200.0 million senior unsecured revolving credit facility. As of June 30, 2014, the Company had $53.8 million of consolidated cash, cash equivalents and restricted cash and $16.2 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 June 30, 2014, as defined in the Company’s credit agreement, the Company’s fixed charge coverage ratio was 2.4 times and total net debt to trailing 12-month corporate EBITDA was 4.1 times. The Company’s total debt to total gross assets ratio was 30 percent. Excluding its interest in the off-balance sheet Manhattan Collection, the Company’s fixed charge coverage ratio was 2.4 times, total net debt to trailing 12-month corporate EBITDA was 3.5 times and total debt to total assets ratio was 27 percent.

2014 Outlook

The Company has increased its outlook for 2014, incorporating the expected impact of the Company’s various capital investment projects, the recent acquisitions of the Prescott Hotel and The Nines Hotel, the Company’s second quarter performance, and it assumes continued improvement in economic activity, positive business travel trends and other significant assumptions. The Company’s revised outlook for 2014 is as follows:

 
2014 Outlook
Low   High
($ and shares/units in millions, except per share and RevPAR data)

Net income

$61.9   $65.9
Net income per diluted share $0.96 $1.02
 
Adjusted EBITDA $187.2 $191.2
 
Adjusted FFO $120.9 $124.9
Adjusted FFO per diluted share $1.87 $1.93
 
This 2014 outlook is based, in part, on the following estimates and assumptions:
 
U.S. GDP growth rate 2.0% 2.5%
U.S. Hotel Industry RevPAR growth rate 6.0% 7.0%
 
Same-Property RevPAR $196 $198
Same-Property RevPAR growth rate 7.25% 8.00%
 
Same-Property EBITDA $207.0 $211.0
Same-Property EBITDA Margin 30.8% 31.3%
Same-Property EBITDA Margin growth rate 150 bps 200 bps
 
Corporate cash general and administrative expenses $14.5 $14.5
Corporate non-cash general and administrative expenses $7.5 $7.5
 
Total capital investments related to renovations, capital maintenance and return on investment projects $50.0 $60.0
 
Weighted-average fully diluted shares and units 64.7 64.7
 
The Company’s outlook for the third quarter of 2014 is as follows:
 
Third Quarter 2014 Outlook
Low   High
($ and shares/units in millions, except per share and RevPAR data)
Same-Property RevPAR $216

$218

Same-Property RevPAR growth rate 7.00% 8.00%
 
Same-Property EBITDA $64.5 $66.5
Same-Property EBITDA Margin 34.2% 34.7%
Same-Property EBITDA Margin growth rate 175 bps 225 bps
 
Adjusted EBITDA $58.4 $60.4
 
Adjusted FFO $38.9 $40.9
Adjusted FFO per diluted share $0.60 $0.63
 
Weighted-average fully diluted shares and units 64.7 64.7
 

The Company’s outlook for 2014 and third quarter 2014 reflects 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 rate for 2014 include the hotels owned as of July 24, 2014, as if they had been owned by the Company for the entire years of 2013 and 2014, except for the Prescott Hotel and The Nines Hotel, which are not included in the first and second quarters of 2013 and 2014. The Company’s 2014 outlook assumes no additional acquisitions beyond the hotels the Company owned as of July 24, 2014.

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 31 hotels, including 25 wholly owned hotels with a total of 6,046 guest rooms and a 49% joint venture interest in six hotels with a total of 1,775 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, except for per share data)
 
June 30, 2014 December 31, 2013
(Unaudited)
ASSETS
Assets:
Investment in hotel properties, net $ 1,764,615 $ 1,717,611
Investment in joint venture 258,334 260,304
Ground lease asset, net 23,403 19,217
Cash and cash equivalents 38,477 55,136
Restricted cash 15,274 16,482
Hotel receivables (net of allowance for doubtful accounts of $158 and $270, respectively) 23,227 16,850
Deferred financing costs, net 3,882 4,736
Prepaid expenses and other assets   33,372     26,595  
Total assets $ 2,160,584   $ 2,116,931  
 
 
LIABILITIES AND EQUITY
 
Liabilities:
Senior unsecured revolving credit facility $ 36,000 $ -
Term loan 100,000 100,000
Mortgage debt (including mortgage loan premium of $4,812 and $5,888, respectively) 448,654 454,247
Accounts payable and accrued expenses 79,313 61,428
Advance deposits 10,347 8,432
Accrued interest 1,910 1,945
Distribution payable   20,674     15,795  
Total liabilities 696,898 641,847
Commitments and contingencies
 
Equity:

Preferred shares of beneficial interest, $.01 par value (liquidation preference of $325,000 and $325,000 at June 30, 2014 and December 31, 2013), 100,000,000 shares authorized; 13,000,000 shares issued and outstanding at June 30, 2014 and 13,000,000 issued and outstanding at December 31, 2013

130 130

Common shares of beneficial interest, $.01 par value, 500,000,000 shares authorized; 63,764,929 issued and outstanding at June 30, 2014 and 63,709,628 issued and outstanding at December 31, 2013

638 637
Additional paid-in capital 1,544,163 1,541,138
Accumulated other comprehensive income (loss) 508 1,086
Distributions in excess of retained earnings   (84,814 )   (69,652 )
Total shareholders' equity   1,460,625     1,473,339  
Non-controlling interests   3,061     1,745  
Total equity   1,463,686     1,475,084  
Total liabilities and equity $ 2,160,584   $ 2,116,931  
 
       
Pebblebrook Hotel Trust
Consolidated Statement of Operations
($ in thousands, except for per share data)
(Unaudited)
 
Three months ended Six months ended
June 30, June 30,
2014 2013 2014 2013
 
Revenues:
Hotel operating revenues:
Room $ 102,384 $ 83,400 $ 185,953 $ 150,539
Food and beverage 35,417 35,228 67,865 66,391
Other operating   9,653     7,673     19,348     14,285  
Total revenues $ 147,454   $ 126,301   $ 273,166   $ 231,215  
 
Expenses:
Hotel operating expenses:
Room $ 24,859 $ 20,847 $ 47,754 $ 39,705
Food and beverage 25,156 25,417 48,966 49,475
Other direct 3,654 3,449 7,125 6,725
Other indirect   36,343     31,412     70,759     60,264  

Total hotel operating expenses

90,012 81,125 174,604 156,169
Depreciation and amortization 16,230 13,565 32,118 26,776
Real estate taxes, personal property taxes, property insurance, and ground rent 9,000 8,396 17,308 14,909
General and administrative 5,591 4,246 11,738 8,585
Hotel acquisition costs   236     241     521     1,161  
Total operating expenses 121,069 107,573 236,289 207,600
Operating income (loss) 26,385 18,728 36,877 23,615
Interest income 621 660 1,235 1,294
Interest expense (6,256 ) (5,925 ) (12,331 ) (11,383 )
Equity in earnings (loss) of joint venture   4,264     3,115     1,020     208  
Income (loss) before income taxes 25,014 16,578 26,801 13,734
Income tax (expense) benefit   (2,121 )   (1,647 )   213     951  
Net income (loss) 22,893 14,931 27,014 14,685
Net income (loss) attributable to non-controlling interests   220     97     263     99  
Net income (loss) attributable to the Company 22,673 14,834 26,751 14,586
Distributions to preferred shareholders   (6,082 )   (6,104 )   (12,163 )   (10,772 )
Net income (loss) attributable to common shareholders $ 16,591   $ 8,730   $ 14,588   $ 3,814  
 
 
Net income (loss) per share available to common shareholders, basic and diluted $ 0.26 $ 0.14 $ 0.22 $ 0.06
 
Weighted-average number of common shares, basic 63,764,929 61,082,770 63,763,935 61,039,721
Weighted-average number of common shares, diluted 64,125,057 61,196,396 64,150,266 61,195,034
 
 
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 Six months ended
June 30, June 30,
  2014     2013     2014     2013  
 
Net income (loss) $ 22,893 $ 14,931 $ 27,014 $ 14,685
Adjustments:
Depreciation and amortization 16,186 13,522 32,030 26,691
Depreciation and amortization from joint venture   2,240     2,148     4,451     4,754  
FFO $ 41,319   $ 30,601   $ 63,495   $ 46,130  
Distribution to preferred shareholders $ (6,082 ) $ (6,104 ) $ (12,163 ) $ (10,772 )
FFO available to common share and unit holders $ 35,237   $ 24,497   $ 51,332   $ 35,358  
Hotel acquisition costs 236 241 521 1,161
Non-cash ground rent 572 1,718 1,025 1,740
Amortization of Class A LTIP units 395 395 790 790
Management/franchise contract transition costs (28 ) - 71 197
Interest expense adjustment for above market loan (538 ) (490 ) (1,076 ) (872 )
Capital lease adjustment 40 - 40 -
Amortization of favorable and unfavorable leases   71     -     155     -  
Adjusted FFO available to common share and unit holders $ 35,985   $ 26,361   $ 52,858   $ 38,374  
 
FFO per common share - basic $ 0.55 $ 0.40 $ 0.80 $ 0.58
FFO per common share - diluted $ 0.54 $ 0.40 $ 0.79 $ 0.57
Adjusted FFO per common share - basic $ 0.56 $ 0.43 $ 0.82 $ 0.62
Adjusted FFO per common share - diluted $ 0.56 $ 0.43 $ 0.82 $ 0.62
 
Weighted-average number of basic common shares and units 64,372,920 61,463,879 64,371,926 61,420,830
Weighted-average number of fully diluted common shares and units 64,733,048 61,577,505 64,758,257 61,576,143
 
 
 
Three months ended Six months ended
June 30, June 30,
  2014     2013     2014     2013  
 
Net income (loss) $ 22,893 $ 14,931 $ 27,014 $ 14,685
Adjustments:
Interest expense 6,256 5,925 12,331 11,383
Interest expense from joint venture 2,270 2,274 4,534 4,295
Income tax expense (benefit) 2,121 1,647 (213 ) (951 )
Depreciation and amortization 16,230 13,565 32,118 26,776
Depreciation and amortization from joint venture   2,240     2,148     4,451     4,754  
EBITDA $ 52,010   $ 40,490   $ 80,235   $ 60,942  
Hotel acquisition costs 236 241 521 1,161
Non-cash ground rent 572 1,718 1,025 1,740
Amortization of Class A LTIP units 395 395 790 790
Management/franchise contract transition costs (28 ) - 71 197
Amortization of favorable and unfavorable leases   71     -     155     -  
Adjusted EBITDA $ 53,256   $ 42,844   $ 82,797   $ 64,830  
 
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 (“FFO”) - 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:
 
- 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.
- 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.
- Amortization of Class A 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.

- Amortization of favorable and unfavorable leases: The Company excludes the amortization of the favorable and unfavorable retail lease assets and liabilities recorded in conjunction with hotel property acquisitions because it believes that including these non-cash adjustments in FFO does not reflect the underlying financial performance of the Company.

- Capital lease adjustment: The Company excludes the effect of non-cash interest expense from capital leases 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 Six months ended
June 30, June 30,
  2014     2013     2014     2013  
 
Revenues:
Hotel operating revenues:
Room $ 21,784 $ 19,908 $ 35,768 $ 33,909
Food and beverage 2,057 1,694 3,976 3,334
Other operating   681     617     1,403     1,256  
Total revenues   24,522     22,219     41,147     38,499  
 
Expenses:
Total hotel expenses 15,713 14,583 31,056 29,119
Depreciation and amortization   2,240     2,148     4,451     4,754  
Total operating expenses   17,953     16,731     35,507     33,873  
Operating income (loss) 6,569 5,488 5,640 4,626
Interest income - 23 1 32
Interest expense (2,270 ) (2,274 ) (4,534 ) (4,295 )
Other   (35 )   (122 )   (87 )   (155 )
Equity in earnings of joint venture $ 4,264   $ 3,115   $ 1,020   $ 208  
 
                 
 
Debt:

Fixed

Interest Rate

Loan Amount
Mortgage(1) 3.61 % $ 225,400
Cash and cash equivalents   (10,415 )
Net Debt 214,985



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