LaSalle Hotel
Properties has reported net income to common shareholders
of $20.8 million, or $0.67 per diluted share for the year ended December
31, 2005, compared to net income of $10.7 million, or $0.39 per diluted
share for the prior year.Prior year net income includes the $2.6
million net gain on the sale of the Omaha Marriott.

For the year ended December 31, 2005, the Company generated funds from
operations (“FFO”) of $70.5 million versus $48.4 million for the same
period of 2004, an increase of 45.4 percent. On a per diluted share/unit
basis, FFO for 2005 rose to $2.25 versus $1.74 a year ago. FFO includes
a contingent litigation expense of $1.0 million in 2005 and $0.9 million
in 2004 associated with the Company’s ongoing litigation with Meridien
and related affiliates.

The Company’s earnings before interest, taxes, depreciation and
amortization (“EBITDA”) for the year increased 43.9 percent to $109.9
million from $76.3 million for 2004. EBITDA for the prior year includes
the $2.6 million net gain on the sale of the Omaha Marriott.

Room revenue per available room (“RevPAR”) increased 11.2 percent in
2005 to $121.49 versus the previous year. Average daily rate (“ADR”)
increased 7.8 percent to $170.43 from 2004, while occupancy grew 3.2
percent to 71.3 percent.

“We are extremely pleased with our overall performance in 2005,” said
Jon Bortz, Chairman and Chief Executive Officer of LaSalle Hotel
Properties. “The year was terrific, with strong travel by business
transient, group and leisure customers. Demand well outpaced supply,
occupancies increased, we raised prices and our margins continued to
recover. Overall performance was beyond our expectations. FFO per
share/unit increased 29 percent, we raised our common dividend by 25
percent and our total return to common shareholders was 19 percent for
the year.”

The Company’s hotels generated $118.4 million of EBITDA for the year
compared with $100.8 million for the same period last year. EBITDA
margins across the Company’s portfolio increased 192 basis points
(“bps”) from the prior year. The EBITDA margin expansion is primarily
attributable to ADR growth, food and beverage cost controls and property
insurance premium reductions during the year, which were partly offset
by continued above-inflationary increases in energy costs, wages, health
benefits and property taxes.

“The lodging industry’s fundamentals improved significantly in 2005,
with supply up only 0.4 percent and demand up 3.3 percent, providing
market compression and an ability to increase ADRs. Our strategy of
owning high quality properties in high barrier to entry markets enabled
us to exploit these positive fundamentals, thus providing greater
profits and returns for our shareholders,” said Mr. Bortz. “The
Company’s strong performance in 2005 can be attributed to the lodging
industry’s recovery, the benefits we continue to achieve from our
substantial pipeline of current and recent renovation, repositioning and
re-branding projects, our consistent, focused and disciplined
acquisition strategy, aggressive asset management, strategic
relationships with numerous operators and our conservatively managed
balance sheet.”
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