Winston Hotels' FFO totals drop, but still meet expectations

February 15, 2002

Raleigh-based Winston Hotels reached its goals and exceeded analysts' consensus for its funds from operations report for 2001, however the totals are still 15 percent below the previous year's report.

Winston Hotels Chief Executive Officer Bob Winston had adjusted his guidance in November on FFO to 20 cents per share to 24 cents per share for the fourth quarter and $1.41 per share to $1.45 per share for the year.

The fourth quarter report shows the FFO per share reached 21 cents for the quarter and $1.46 for the year, exceeding analysts'' estimates by three cents, Winston says.

Unaudited FFO for the fourth quarter 2001 was $3.7 million compared to almost $6.5 million for the same period in 2000, a 42.2 percent drop. For the year, FFO reports were almost $26.6 million, a 15 percent decrease from 2001's $31.3 million. "When compared to other lodging REITs and industry data, our results were very positive," Winston says. "Our shareholders reaped the benefits of a stable portfolio and excellent balance sheet, as Winston posted a 22 percent total return to common shareholders based on stock prices at the beginning and end of the year and including dividend payments." Company officials also reported that revenue per available room decreased 11 percent for the fourth quarter compared to an industry decrease of 16 percent. For the year, RevPar decreased 4 percent compared to an industry decrease of 7 percent, according to date from Smith Travel Research. Also, according to information compiled by Cohen & Steers Capital Advisors LLC, Winston ranked first among other traditional hotel REITs in total return to common shareholders over the past year. The REIT ranked second for the past three and five years.

In stating expectations for 2002, Winston forecasted a RevPar change of 0 percent to negative 4 percent, with negative performance during the first two quarters and positive performance during the last two quarters of the year. "Of course, our estimates are based on the assumption that the economy rebounds this year and that no further catastrophic events occur," Winston says.

The company had already decreased its cash dividend from 28 cents per share to 15 cents per common share in the fourth quarter primarily due to a weak economy, which was further negatively impacted by the events of Sept. 11. "We believe we can continue to pay a quarterly dividend per common share throughout 200 of 15 cents to 20 cents ... barring any further economic crises or catastrophic events," Winston says. The real estate investment trust is an owner and investor in 53 hotels in 14 states, mostly in the South Atlantic region.

Article chosen: Winston Hotels' FFO totals drop, but still meet expectations
Copyright: 2002 American City Business Journals Inc.
Publication: Triangle Business Journal

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© 2002 American City Business Journals Inc.