As part of the purchase price, DiamondRock will receive more than $10 million in cash reserves for capital improvements. In addition to using a portion of these reserves, DiamondRock will invest an additional $5 million over the next two years to improve and reposition the hotels to further enhance their ability to capture higher rated business and improve profitability.
"This acquisition represents a portfolio of very high quality, full- service hotels branded under premium flags. The acquisition opportunity was made possible because of our management team's longstanding relationship with the sellers and prior knowledge of the hotels," said Bill McCarten, chairman and chief executive officer of DiamondRock. "We believe that the hotels are located in markets that will have solid growth as the lodging recovery continues."
Additionally, Wachovia Bank provided an aggregate of $140 million of fixed rate mortgage debt financing in connection with the acquisitions. The two loans are secured by the Marriott Los Angeles Airport and Renaissance Worthington.
Reconciliation of Net Income to EBITDA - Full Year
2005 Forecast ($000s)
Net Income (loss) $18,300
Depreciation and amortization - continuing operations 10,300
Depreciation and amortization - deferred financing fees 40
Interest expense 7,600
EBITDA $36,240
This press release contains forward-looking statements within the meaning of federal securities laws and regulations. These forward looking statements are identified by their use of terms and phrases such as "anticipate," "believe," "could," "estimate," "expect," "intend," "may," "plan," "predict," "project," "should,' "will," "continue" and other similar terms and phrases, including references to assumptions and forecasts of future results. Forward- looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors which may cause the actual results to differ materially from those anticipated at the time the forward- looking statements are made. These risks include, but are not limited to: national and local economic and business conditions, including the potential for additional terrorist attacks, that will affect occupancy rates at our hotels and demand for hotel products and services; operating risks associated with the hotel business; risks associated with the level of our indebtedness and our ability to meet covenants in our debt agreements; relationships with property managers; our ability to maintain our properties in a first-class manner, including meeting capital expenditure requirements; our ability to compete effectively in areas such as access, location, quality of accommodations and room rate structures; changes in travel patterns, taxes and government regulations which influence or determine wages, prices, construction procedures and costs; the performance of the acquired properties after they are acquired; necessary expenditures on the acquired projects; and our ability to continue to satisfy complex rules in order for us to qualify as a REIT for federal income tax purposes and other risks and uncertainties associated with our business described in the Company's filings with the SEC. Although the Company believes the expectations reflected in such forward- looking statements are based upon reasonable assumptions, it can give no assurance that the expectations will be attained or that any deviation will not be materials. All information in this release is as of June 22, 2005, and the Company undertakes no obligation to update any forward-looking statement to conform the statement to actual results or changes in the Company's expectations.
DiamondRock Hospitality Company is a self-advised real estate company that owns and acquires upper upscale and upscale hotel properties located in strong sub-markets of North America and operated under nationally recognized brand names. To a lesser extent, it acquires premium limited-service and extended- stay hotel properties in urban locations. DiamondRock has a strategic acquisition sourcing relationship with Marriott International. For more information about DiamondRock or to receive future press releases, please see the Company's website at