UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant
to Section 13 OR 15(d)
of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): June 2, 2014
Strategic Hotels & Resorts, Inc.
(Exact name of registrant as specified in its charter)
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| Maryland |
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001-32223 |
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33-1082757 |
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of incorporation) |
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(Commission
File Number) |
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(IRS Employer
Identification No.) |
200 West Madison Street, Suite 1700
Chicago, Illinois 60606
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code: (312) 658-5000
Not Applicable
(Former
name or former address, if changed since last report)
Check the appropriate box below
if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2.):
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| Item 7.01 |
Regulation FD Disclosure. |
On June 2, 2014, Strategic Hotels & Resorts,
Inc. issued a press release announcing updated guidance ranges to reflect recent transaction activity. A copy of such press release is attached hereto as Exhibit 99.1 and is incorporated herein solely for purposes of this Item 7.01 disclosure.
The information in Item 7.01 of this Current Report, including Exhibit 99.1 attached hereto, is being furnished and shall not be
deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of such section. The information in Item 7.01 of this
Current Report, including Exhibit 99.1, shall not be incorporated by reference into any filing under the Securities Act, or the Exchange Act, regardless of any incorporation by reference language in any such filing.
| Item 9.01 |
Financial Statements and Exhibits. |
(d) Exhibits.
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| Exhibit Number |
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Description |
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| 99.1 |
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Press release dated June 2, 2014 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
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STRATEGIC HOTELS & RESORTS, INC. |
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| June 2, 2014 |
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By: |
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/s/ Paula C. Maggio |
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Name: |
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Paula C. Maggio |
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Title: |
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Executive Vice President, General Counsel & Secretary |
EXHIBIT INDEX
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| Exhibit Number |
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Description |
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| 99.1 |
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Press release dated June 2, 2014 |
Exhibit 99.1
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COMPANY CONTACTS: Diane
Morefield EVP, Chief Financial Officer Strategic Hotels &
Resorts, Inc. (312) 658-5740
Jonathan Stanner VP, Capital Markets & Treasurer
Strategic Hotels & Resorts, Inc. (312) 658-5746 |
FOR IMMEDIATE RELEASE
MONDAY, JUNE 2, 2014
STRATEGIC
HOTELS & RESORTS, INC. ANNOUNCES UPDATED GUIDANCE RANGES TO
REFLECT RECENT TRANSACTION ACTIVITY
Raises Guidance Ranges for Comparable EBITDA and Comparable FFO per fully diluted share
CHICAGO – June 2, 2014 – Strategic Hotels & Resorts, Inc. (the “Company”) (NYSE: BEE) today announced that management
is raising its guidance ranges for full year 2014 Comparable EBITDA and Comparable FFO per fully diluted share to reflect the closing of the common equity offering, the acquisition of the remaining 63.6 percent interest in the Hotel del Coronado,
which is expected to close in early June, and the redemption of the 8.25% Series C Cumulative Redeemable Preferred Stock, which is expected to be completed in early July.
For the year ending December 31, 2014, the Company anticipates that Comparable EBITDA will be in the range of $230.0 million to $250.0 million and
Comparable FFO in the range of $0.59 and $0.68 per fully diluted share. Management is also reaffirming its guidance for Total United States RevPAR and Total RevPAR growth in the range between 5.0 percent to 7.0 percent, and EBITDA margin expansion
of 120-200 basis points.
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| Guidance Metrics |
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Previous Range |
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Revised Range |
| RevPAR |
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5.0% - 7.0% |
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5.0% - 7.0% |
| Total RevPAR |
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5.0% - 7.0% |
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5.0% - 7.0% |
| EBITDA Margin expansion |
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120 - 200 basis points |
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120 - 200 basis points |
| Comparable EBITDA |
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$210M - $230M |
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$230M - $250M |
| Comparable FFO per diluted share |
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$0.57 - $0.67 |
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$0.59 - $0.68 |
Note: The Comparable FFO per fully diluted share range reflects the recently announced sale of 41.4 million shares of
common stock at $10.50 per share, including 5.4 million shares of common stock issued pursuant to the exercise in full of the underwriters’ over-allotment option
About the Company
Strategic Hotels & Resorts,
Inc. is a real estate investment trust (REIT) which owns and provides value enhancing asset management of high-end hotels and resorts in the United States and Europe. The company currently has ownership interests in 16 properties with an aggregate
of 7,862 rooms and 835,000 square feet of multi-purpose meeting and banqueting space.
This press release contains forward-looking statements about the Company. Except for historical information,
the matters discussed in this press release, including the Company’s intended use of proceeds, are forward-looking statements subject to certain risks and uncertainties. Actual results could differ materially from the Company’s
projections. Factors that may contribute to these differences include, but are not limited to the following: conditions to closing the acquisition of the Hotel del Coronado may not be satisfied, closing on the acquisition of the Hotel del Coronado
may be delayed, the effects of economic conditions and disruption in financial markets upon business and leisure travel and the hotel markets in which the Company invests; the Company’s liquidity and refinancing demands; the Company’s
ability to obtain, refinance or extend maturing debt; the Company’s ability to maintain compliance with covenants contained in its debt facilities; stagnation or deterioration in economic and market conditions, particularly impacting business
and leisure travel spending in the markets where the Company’s hotels operate and in which the Company invests, including luxury and upper upscale product; general volatility of the capital markets and the market price of the Company’s
shares of common stock; availability of capital; the Company’s ability to dispose of properties in a manner consistent with its investment strategy and liquidity needs; hostilities and security concerns, including future terrorist attacks, or
the apprehension of hostilities, in each case that affect travel within or to the United States, Germany or other countries where the Company invests; difficulties in identifying properties to acquire and completing acquisitions; the Company’s
failure to maintain effective internal control over financial reporting and disclosure controls and procedures; risks related to natural disasters; increases in interest rates and operating costs, including insurance premiums and real property
taxes; delays and cost-overruns in construction and development; marketing challenges associated with entering new lines of business or pursuing new business strategies; the Company’s failure to maintain its status as a REIT; changes in the
competitive environment in the Company’s industry and the markets where the Company invests; changes in real estate and zoning laws or regulations; legislative or regulatory changes, including changes to laws governing the taxation of REITs;
changes in generally accepted accounting principles, policies and guidelines; and litigation, judgments or settlements.
Additional risks are
discussed in the Company’s filings with the SEC, including those appearing under the heading “Item 1A. Risk Factors” in the Company’s most recent Form 10-K and subsequent Form 10-Qs. Although the Company believes the expectations
reflected in such forward-looking statements are based on reasonable assumptions, it can give no assurance that its expectations will be attained. The forward-looking statements are made as of the date of this press release, and the Company
undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by law.
- 2 --###-
The following tables reconcile projected 2014 net income attributable to common shareholders to projected
Comparable EBITDA, Comparable FFO and Comparable FFO per diluted share (in millions, except per share data):
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Low Range |
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High Range |
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| Net Income Attributable to Common Shareholders |
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$ |
289.5 |
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$ |
309.5 |
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| Depreciation and Amortization |
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134.9 |
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134.9 |
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| Interest Expense |
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86.7 |
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86.7 |
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| Income Taxes |
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3.1 |
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3.1 |
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| Non-controlling Interests |
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1.3 |
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1.3 |
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| Adjustments from Consolidated Affiliates |
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(16.1 |
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(16.1 |
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| Adjustments from Unconsolidated Affiliates |
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7.9 |
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7.9 |
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| Preferred Shareholder Dividends |
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13.7 |
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13.7 |
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| Preferred Stock Redemption Liability |
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3.7 |
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3.7 |
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| Realized Portion of Deferred Gain on Sale Leasebacks |
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(0.2 |
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(0.2 |
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| Gain on Sale of Asset |
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(155.8 |
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(155.8 |
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| Gain on Consolidation of Affiliate |
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(141.1 |
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(141.1 |
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| Other Adjustments |
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2.4 |
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2.4 |
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| Comparable EBITDA |
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$ |
230.0 |
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$ |
250.0 |
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Low Range |
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High Range |
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| Net Income Attributable to Common Shareholders |
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$ |
289.5 |
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$ |
309.5 |
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| Depreciation and Amortization |
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134.1 |
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134.1 |
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| Realized Portion of Deferred Gain on Sale Leasebacks |
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(0.2 |
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(0.2 |
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| Gain on Sale of Asset |
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(155.8 |
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(155.8 |
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| Gain on Consolidation of Affiliate |
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(141.1 |
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(141.1 |
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| Non-controlling Interests |
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1.2 |
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1.2 |
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| Adjustments from Consolidated Affiliates |
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(8.6 |
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(8.6 |
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| Adjustments from Unconsolidated Affiliates |
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4.8 |
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4.8 |
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| Interest Rate Swap OCI Amortization |
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8.9 |
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8.9 |
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| Preferred Stock Redemption Liability |
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3.7 |
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3.7 |
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| Other Adjustments |
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2.1 |
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2.1 |
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| Comparable FFO |
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$ |
138.6 |
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$ |
158.6 |
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| Comparable FFO per Diluted Share |
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$ |
0.59 |
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$ |
0.68 |
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- 3 --###-