Current Report Filing (8-k)

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) August 5, 2015

Strategic Hotels & Resorts, Inc.

(Exact name of registrant as specified in its charter)




Maryland	001-32223	33-1082757
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

200 West Madison Street, Suite 1700, Chicago, Illinois		60606
(Address of principal executive offices)		(Zip Code)

(312) 658-5000

(Registrant’s telephone number, including area code)

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.):



¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)



¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)



¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))



¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))



Item 2.02	Results of Operations and Financial Condition.

On August 5, 2015, Strategic Hotels & Resorts, Inc. issued a press release reporting the financial results for its fiscal quarter ended June 30, 2015. Copies of the press release and Supplemental Financial Information are attached to this Current Report on Form 8-K (“Current Report”) as Exhibits 99.1 and 99.2, respectively, and are incorporated herein solely for purposes of this Item 2.02 disclosure.

The information in this Current Report, including the exhibits 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 this Current Report, including the exhibits, shall not be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any incorporation by reference language in any such filing.



Item 9.01	Financial Statements and Exhibits.


(d)	Exhibits.




Exhibit Number			Description

99.1			Press Release dated August 5, 2015

99.2			Supplemental Financial Information

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.

August 6, 2015




	STRATEGIC HOTELS & RESORTS, INC.

By:		/s/ Diane M. Morefield
	Name:	Diane M. Morefield
	Title:	Executive Vice President and Chief Financial Officer

Exhibit 99.1



	COMPANY CONTACTS: Diane Morefield EVP & Chief Financial Officer Strategic Hotels & Resorts (312) 658-5740 Jonathan Stanner SVP, Capital Markets, Acquisitions & Treasurer Strategic Hotels & Resorts (312) 658-5746

FOR IMMEDIATE RELEASE

WEDNESDAY, AUGUST 5, 2015

STRATEGIC HOTELS & RESORTS REPORTS SECOND QUARTER 2015

FINANCIAL RESULTS

CHICAGO - August 5, 2015 - Strategic Hotels & Resorts, Inc. (NYSE: BEE) today reported results for the second quarter ended June 30, 2015.



($ in millions, except per share and operating metrics)	Second Quarter
Earnings Metrics	2015			2014			%
Net income attributable to common shareholders	$	6.7		$	80.8		(91.7	)	%
Net income per diluted share	$	0.02		$	0.35		(94.3	)	%
Comparable funds from operations (Comparable FFO) ^(a)	$	69.0		$	48.1		43.4		%
Comparable FFO per diluted share ^(a)	$	0.25		$	0.21		19.0		%
Comparable EBITDA ^(a)	$	88.4		$	68.9		28.3		%

Same Store United States Portfolio Operating Metrics ^(b)
Average Daily Rate (ADR) ^(d)	$	317.67		$	299.97		5.9		%
Occupancy	79.1		%	80.0		%	(0.9	)	pts
Revenue per Available Room (RevPAR) ^(d)	$	251.41		$	239.95		4.8		%
Total RevPAR ^(d)	$	472.27		$	462.41		2.1		%
EBITDA Margins ^(d)	28.3		%	28.3		%	0		bps

Total United States Portfolio Operating Metrics ^(c)
Average Daily Rate (ADR) ^(d)	$	328.76		$	310.53		5.9		%
Occupancy	78.8		%	80.0		%	(1.2	)	pts
Revenue per Available Room (RevPAR) ^(d)	$	259.15		$	248.40		4.3		%
Total RevPAR ^(d)	$	495.90		$	486.55		1.9		%
EBITDA Margins ^(d)	27.7		%	27.7		%	0		bps



($ in millions, except per share and operating metrics)	Year to Date
Earnings Metrics	2015			2014			%
Net income attributable to common shareholders	$	22.5		$	298.0		(92.4	)	%
Net income per diluted share	$	0.07		$	1.30		(94.6	)	%
Comparable funds from operations (Comparable FFO) ^(a)	$	125.3		$	60.3		107.7		%
Comparable FFO per diluted share ^(a)	$	0.45		$	0.28		60.7		%
Comparable EBITDA ^(a)	$	162.5		$	110.1		47.6		%

Same Store United States Portfolio Operating Metrics ^(b)
Average Daily Rate (ADR) ^(d)	$	312.95		$	293.14		6.8		%
Occupancy	75.5		%	75.0		%	0.5		pts
Revenue per Available Room (RevPAR) ^(d)	$	236.16		$	219.84		7.4		%
Total RevPAR ^(d)	$	454.93		$	430.34		5.7		%
EBITDA Margins ^(d)	26.8		%	24.7		%	210		bps

Total United States Portfolio Operating Metrics ^(c)
Average Daily Rate (ADR) ^(d)	$	326.59		$	305.73		6.8		%
Occupancy	75.7		%	75.5		%	0.2		pts
Revenue per Available Room (RevPAR) ^(d)	$	247.30		$	230.78		7.2		%
Total RevPAR ^(d)	$	482.03		$	456.46		5.6		%
EBITDA Margins ^(d)	26.5		%	24.6		%	190		bps


(a)	Please refer to the tables provided later in this press release for a reconciliation of net income attributable to common shareholders to Comparable FFO, Comparable FFO per diluted share and Comparable EBITDA. Comparable FFO, Comparable FFO per diluted share and Comparable EBITDA are non-GAAP measures and are further explained within the reconciliation tables.


(b)	Operating statistics reflect results from the Company’s Same Store United States portfolio (see portfolio definitions later in this press release).


(c)	Operating statistics reflect results from the Company's Total United States portfolio (see portfolio definitions later in this press release).


(d)	ADR, RevPAR, Total RevPAR and EBITDA Margin statistics have been modified to take into account certain adjustments, including those related to the adoption of the Uniform System of Accounts for the Lodging Industry, Eleventh Revised Edition (the "USALI Eleventh Revised Edition").

“The second quarter represented another solid quarter of operating and financial results for the company,” commented Raymond L. “Rip” Gellein, Chairman and Chief Executive Officer of Strategic Hotels & Resorts. “We were productive on many fronts. We acquired a world-class asset, sold a non-core asset, substantially strengthened the balance sheet and, more importantly, significantly grew our top line and bottom line. The outlook for the balance of the year is very positive and we are seeing attractive growth in group bookings looking into 2016 and beyond,” summarized Gellein.

Second Quarter Highlights


▪	Total consolidated revenues were $356.9 million in the second quarter of 2015, a 29.2 percent increase over the prior year period. The increase was primarily driven by the acquisitions of the Four Seasons Resort Scottsdale at Troon North, the Montage Laguna Beach resort and the Four Seasons Hotel Austin, as well as the consolidation of the Hotel del Coronado.

▪

Net income attributable to common shareholders was $6.7 million, or $0.02 per diluted share, in the second quarter of 2015, compared with $80.8 million, or $0.35 per diluted share, in the second quarter of 2014. The year-over-year decrease in net income was primarily the result of a one-time gain related to the acquisition and consolidation of the Hotel del Coronado recorded in the second quarter of 2014.


▪	Comparable FFO was $0.25 per diluted share in the second quarter of 2015, compared with $0.21 per diluted share in the prior year period, a 19.0 percent increase over the prior year period.


▪	Comparable EBITDA was $88.4 million in the second quarter of 2015, compared with $68.9 million in the prior year period, a 28.3 percent increase between periods as a result of the Company’s acquisition activity and same store growth.


▪	Same Store United States portfolio RevPAR increased 4.8 percent in the second quarter of 2015, driven by a 5.9 percent increase in ADR offsetting a 0.9 percentage point decline in occupancy compared to the second quarter of 2014. Total RevPAR increased 2.1 percent between periods, with non-rooms revenue decreasing 0.7 percent between periods.


▪	Total United States portfolio RevPAR increased 4.3 percent in the second quarter of 2015, driven by a 5.9 percent increase in ADR offsetting a 1.2 percentage point decline in occupancy compared to the second quarter of 2014. Total RevPAR increased 1.9 percent between periods, with non-rooms revenue decreasing 0.5 percent between periods.


▪	Group occupied room nights in the Total United States portfolio decreased 0.9 percent in the second quarter 2015 and transient occupied room nights decreased 1.8 percent compared to the second quarter of 2014. Transient ADR increased 6.8 percent compared to the second quarter of 2014 and group ADR increased 4.7 percent.

▪

Same Store United States and Total United States portfolio EBITDA margins were flat in the second quarter of 2015, compared to the second quarter of 2014. Excluding a one-time real estate tax credit received in the second quarter of 2014 and one-time charges related to real estate and personal property taxes recognized in the second quarter of 2015, EBITDA margins expanded 40 basis points in the Same Store and Total United States portfolios. EBITDA margins in both years have been adjusted to exclude the amortization of the below market hotel management agreement related to the Hotel del Coronado, and other adjustments related to the adoption of the USALI Eleventh Revised Edition to improve comparability between years.

Year to Date Highlights

▪

Total consolidated revenues were $682.2 million for the six month period ended June 30, 2015, a 44.9 percent increase over the prior year period. This increase was primarily driven by the acquisitions of the Four Seasons Resort Scottsdale at Troon North, the Montage Laguna Beach resort and the Four Seasons Hotel Austin, as well as the consolidation of the Hotel del Coronado and the Fairmont Scottsdale Princess resort.

▪

Net income attributable to common shareholders was $22.5 million, or $0.07 per diluted share, compared with $298.0 million, or $1.30 per diluted share, for the six month period ended June 30, 2014. The year-over-year decrease in net income was primarily the result of the one-time gains related to the consolidation of the Fairmont Scottsdale Princess resort and the Hotel del Coronado recorded in the first half of 2014.


▪	Comparable FFO was $0.45 per diluted share compared with $0.28 per diluted share in the six month period ended June 30, 2014, a 60.7 percent increase over the prior year period as a result of the Company’s acquisition and financing activities.


▪	Comparable EBITDA was $162.5 million compared with $110.1 million for the six month period ended June 30, 2014, a 47.6 percent increase between periods as a result of the Company’s acquisition activity and same store growth.

Transaction Activity

On April 9, 2015, the Company retired the $117.0 million loan that encumbered the Fairmont Scottsdale Princess resort. The loan had an interest rate of LIBOR plus 36 basis points. Upon closing, $15.1 million of cash being held by the lender was released to the Company.

On May 12, 2015, the Company closed on the acquisition of the Four Seasons Hotel Austin for $197.0 million.

On May 21, 2015, the Company, along with its joint venture partner, closed on the sale of the Hyatt Regency La Jolla hotel for $118 million. The Company previously owned a 53.5% interest in the asset. At closing, the joint venture retired $89.2 million of debt secured by the hotel.

On May 27, 2015, the Company closed a new $750.0 million senior unsecured credit facility with an accordion feature allowing additional borrowing capacity up to $1.0 billion. The facility is comprised of a $450.0 million unsecured revolving credit facility and a $300.0 million unsecured term loan. The revolving credit facility interest rate is based upon a leverage-based pricing grid ranging from LIBOR plus 165 basis points to LIBOR plus 240 basis points. The term loan interest rate is also based on a leverage based pricing grid ranging from LIBOR plus 160 basis points to LIBOR plus 235 basis points. The combined unsecured facility has a five-year term.

On May 27, 2015, the Company also closed a $115.0 million mortgage loan secured by the Ritz-Carlton Half Moon Bay hotel. The loan bears interest at a floating rate of LIBOR plus 240 basis points and has a five-year initial term with two, one-year extension options.

On May 27, 2015, the Company simultaneously repaid the previously outstanding $209.6 million loan secured by the Westin St. Francis hotel and the $93.1 million loan secured by the Fairmont Chicago hotel that were cross-collateralized and priced at a fixed interest rate of 6.09 percent and set to mature in June 2017. In connection with the repayment, the Company paid a prepayment penalty totaling approximately $32.9 million.

Subsequent Event

▪

On July 24, 2015, the Company acquired the remaining 49 percent ownership interest in the JW Marriott Essex House hotel. Pursuant to the terms of the joint venture agreements, the Company’s partner, affiliates of KSL Capital Partners, LLC (“KSL”), exercised a contractual put option of their equity interests in the asset and the Company will issue KSL an aggregate of 6,595,449 shares of common stock priced at $12.82 per share, or an implied valuation of $84.6 million.

2015 Guidance

Based on the results of the first six months of 2015 and current forecasts for the remainder of the year, management is adjusting its guidance ranges for full year 2015 RevPAR growth, Total RevPAR growth, Comparable EBITDA and Comparable FFO per fully diluted share.

For the full-year ending December 31, 2015, the Company is providing the following guidance ranges:



Guidance Metrics	Previous Range	Revised Range
RevPAR	6.0% - 8.0%	5.5% - 6.5%
Total RevPAR	4.5% - 6.5%	4.0% - 5.0%
EBITDA Margin expansion	125 - 175 basis points	125 - 175 basis points
Comparable EBITDA	$320M - $340M	$325M - $340M
Comparable FFO per diluted share	$0.85 - $0.93	$0.88 - $0.94

The guidance presented takes into account various accounting changes as stipulated by the industry’s USALI Eleventh Revised Edition, which became effective in January 2015. Guidance for 2015 RevPAR, Total RevPAR and EBITDA margin expansion has been presented to reflect changes compared to the prior year as if these 2014 statistics included the USALI Eleventh Revised Edition changes. Actual RevPAR, Total RevPAR and EBITDA Margin changes from prior year may differ slightly. The Company will present 2014 RevPAR, Total RevPAR and EBITDA margins on an as reported basis and on a pro forma basis, which will include the USALI Eleventh Revised Edition changes.

Portfolio Definitions

Same Store United States portfolio hotel comparisons for the second quarter of 2015 are derived from the Company’s hotel portfolio at June 30, 2015, consisting of 14 properties located in the United States, but excluding the Four Seasons Resort Scottsdale at Troon North, the Montage Laguna Beach resort, and the Four Seasons Hotel Austin which were acquired on December 9, 2014, January 29, 2015, and May 12, 2015, respectively as well as the Hyatt Regency La Jolla, which was sold on May, 21, 2015.

Total United States portfolio hotel comparisons for the second quarter of 2015 are derived from the Company’s hotel portfolio as of June 30, 2015, consisting of all 17 properties located in the United States, including the Four Seasons Resort Scottsdale at Troon North, the Montage Laguna Beach resort, and the Four Seasons Hotel Austin, which were acquired on December 9, 2014, January 29, 2015, and May 12, 2015, respectively, but excluding the Hyatt Regency La Jolla, which was sold on May, 21, 2015.

Total United States portfolio hotel comparisons for the full year 2015 are derived from the Company’s current hotel portfolio, consisting of 17 properties located in the United States, including the Four Seasons Resort Scottsdale at Troon North, the Montage Laguna Beach resort, and the Four Seasons Hotel Austin which were acquired on December 9, 2014, January 29, 2015, and May 12, 2015 respectively, but excluding the Hyatt Regency La Jolla, which was sold on May, 21, 2015.

Earnings Call

The Company will conduct its second quarter 2015 conference call for investors and other interested parties on Thursday, August 6, 2015 at 10:00 a.m. Eastern Time (ET). Interested individuals are invited to access the call by dialing 877.930.8296 (toll international: 253.336.8739) with passcode 80609573. To participate on the webcast, log on to the company's website at http://www.strategichotels.com or http://edge.media-server.com/m/p/3x8gtzod/lan/en 15 minutes before the call to download the necessary software.

For those unable to listen to the call live, a taped rebroadcast will be available beginning at 1:00 p.m. ET on August 6, 2015 through 11:59 p.m. ET on August 13, 2015. To access the replay, dial 855.859.2056 (toll international: 404.537.3406) with passcode 80609573. A replay of the call will also be available in the Investor Relations section of the company’s website at http://www.strategichotels.com.

The Company also produces supplemental financial data that includes detailed information regarding its operating results. This supplemental data is considered an integral part of this earnings release. These materials are available on the Strategic Hotels & Resorts’ website at www.strategichotels.com.

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 18 properties with an aggregate of 8,199 rooms and 851,000 square feet of multi-purpose meeting and banqueting space. For a list of current properties and for further information, please visit the Company’s website at www.strategichotels.com.

This press release contains forward-looking statements about Strategic Hotels & Resorts, Inc. (the “Company”). Except for historical information, the matters discussed in this press release are forward-looking statements subject to certain risks and uncertainties. These forward-looking statements include statements regarding the Company’s future financial results, stabilization in the lodging space, positive trends in the lodging industry and the Company’s continued focus on improving profitability. 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: the effects of economic conditions and disruptions 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; contagious disease outbreaks; 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 Securities and Exchange Commission, 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.

The following tables reconcile projected 2015 net income attributable to common shareholders to projected Comparable EBITDA, Comparable FFO and Comparable FFO per diluted share ($ in millions, except per share data):



	Low Range			High Range
Net Income Attributable to Common Shareholders	$	58.9		$	73.9
Depreciation and Amortization	160.6			160.6
Interest Expense	81.4			81.4
Income Taxes	8.1			8.1
Non-controlling Interests	0.2			0.2
Adjustments from Consolidated Affiliates	8.6			8.6
Realized Portion of Deferred Gain on Sale Leasebacks	(0.2		)	(0.2		)
Gain on Sale of Asset	(40.6		)	(40.6		)
Impairment Losses	10.4			10.4
Loss on Early Extinguishment of Debt	34.2			34.2
Hotel Acquisition Costs	1.1			1.1
Amortization of Below Market Management Agreement	2.1			2.1
Other Adjustments	0.2			0.2
Comparable EBITDA	$	325.0		$	340.0



	Low Range			High Range
Net Income Attributable to Common Shareholders	$	58.9		$	73.9
Depreciation and Amortization	159.9			159.9
Realized Portion of Deferred Gain on Sale Leasebacks	(0.2		)	(0.2		)
Gain on Sale of Asset	(40.6		)	(40.6		)
Non-controlling Interests	0.2			0.2
Adjustments from Consolidated Affiliates	12.0			12.0
Impairment Losses	10.4			10.4
Interest Rate Swap OCI Amortization	10.4			10.4
Loss on Early Extinguishment of Debt	34.2			34.2
Amortization of Debt Discount	0.8			0.8
Amortization of Below Market Management Agreement	2.1			2.1
Hotel Acquisition Costs	1.1			1.1
Comparable FFO	$	249.2		$	264.2
Comparable FFO per Diluted Share	$	0.88		$	0.94

Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)

Consolidated Statements of Operations

(in thousands, except per share data)



	Three Months Ended June 30,						Six Months Ended June 30,
	2015			2014			2015			2014
Revenues:
Rooms	$	186,377		$	148,874		$	349,241		$	251,974
Food and beverage	134,523			100,028			257,992			170,045
Other hotel operating revenue	34,989			25,942			72,896			46,181
Lease revenue	1,013			1,319			2,044			2,618
Total revenues	356,902			276,163			682,173			470,818
Operating Costs and Expenses:
Rooms	51,072			41,268			98,937			74,975
Food and beverage	88,245			67,077			171,319			121,680
Other departmental expenses	86,626			66,238			171,350			119,817
Management fees	12,423			9,241			23,862			15,019
Other hotel expenses	19,842			15,572			35,455			31,250
Lease expense	1,017			1,260			2,051			2,518
Depreciation and amortization	40,331			28,058			77,995			50,263
Impairment losses	10,401			—			10,401			—
Corporate expenses	6,441			7,198			14,709			14,391
Total operating costs and expenses	316,398			235,912			606,079			429,913
Operating income	40,504			40,251			76,094			40,905
Interest expense	(20,709		)	(19,587		)	(43,494		)	(37,861		)
Interest income	16			50			117			77
Loss on early extinguishment of debt	(34,211		)	—			(34,211		)	—
Equity in earnings of unconsolidated affiliates	—			826			—			5,271
Foreign currency exchange gain (loss)	40			(8		)	(76		)	(6		)
Gain on consolidation of affiliates	—			65,349			—			143,466
Other income, net	40,465			795			40,308			1,218
Income before income taxes and discontinued operations	26,105			87,676			38,738			153,070
Income tax expense	(2,452		)	(207		)	(2,671		)	(246		)
Income from continuing operations	23,653			87,469			36,067			152,824
Income from discontinued operations, net of tax	—			604			—			159,039
Net Income	23,653			88,073			36,067			311,863
Net income attributable to the noncontrolling interests in SHR's operating partnership	(67		)	(281		)	(104		)	(1,130		)
Net (income) loss attributable to the noncontrolling interests in consolidated affiliates	(16,888		)	217			(13,454		)	4,258
Net Income Attributable to SHR	6,698			88,009			22,509			314,991
Preferred shareholder dividends	—			(7,169		)	—			(16,993		)
Net Income Attributable to SHR Common Shareholders	$	6,698		$	80,840		$	22,509		$	297,998
Basic Income Per Common Share:
Income from continuing operations attributable to SHR common shareholders	$	0.02		$	0.36		$	0.08		$	0.65
Income from discontinued operations attributable to SHR common shareholders	—			—			—			0.74
Net income attributable to SHR common shareholders	$	0.02		$	0.36		$	0.08		$	1.39
Weighted average shares of common stock outstanding	276,380			222,013			257,056			214,450
Diluted Income Per Common Share:
Income from continuing operations attributable to SHR common shareholders	$	0.02		$	0.35		$	0.07		$	0.60
Income from discontinued operations attributable to SHR common shareholders	—			—			—			0.70
Net income attributable to SHR common shareholders	$	0.02		$	0.35		$	0.07		$	1.30
Weighted average shares of common stock outstanding	278,383			233,463			284,208			225,900

Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)

Consolidated Balance Sheets

(in thousands, except share data)



	June 30, 2015			December 31, 2014
Assets
Investment in hotel properties, net	$	3,276,411		$	2,828,400
Goodwill	21,629			38,128
Intangible assets, net of accumulated amortization of $11,783 and $7,288	93,936			94,324
Investment in unconsolidated affiliates	22,850			22,850
Cash and cash equivalents	98,586			442,613
Restricted cash and cash equivalents	77,790			81,510
Accounts receivable, net of allowance for doubtful accounts of $688 and $492	71,486			51,382
Deferred financing costs, net of accumulated amortization of $8,203 and $7,814	14,580			11,440
Deferred tax assets	1,419			1,729
Prepaid expenses and other assets	56,727			46,781
Total assets	$	3,735,414		$	3,619,157
Liabilities, Noncontrolling Interests and Equity
Liabilities:
Mortgages payable, net of discount	$	1,460,637		$	1,705,778
Credit facility, including an unsecured term loan of $300,000 and $0	344,000			—
Accounts payable and accrued expenses	234,306			224,505
Preferred stock redemption liability	—			90,384
Distributions payable	—			104
Deferred tax liabilities	46,117			46,137
Total liabilities	2,085,060			2,066,908
Commitments and contingencies
Noncontrolling interests in SHR’s operating partnership	9,619			10,500
Equity:
SHR’s shareholders’ equity:
Common stock ($0.01 par value per share; 350,000,000 shares of common stock authorized; 275,494,707 and 267,435,799 shares of common stock issued and outstanding)	2,755			2,674
Additional paid-in capital	2,451,209			2,348,284
Accumulated deficit	(867,960		)	(890,469		)
Accumulated other comprehensive loss	(7,586		)	(13,032		)
Total SHR’s shareholders’ equity	1,578,418			1,447,457
Noncontrolling interests in consolidated affiliates	62,317			94,292
Total equity	1,640,735			1,541,749
Total liabilities, noncontrolling interests and equity	$	3,735,414		$	3,619,157

Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)

Financial Highlights

Supplemental Financial Data

(in thousands, except per share information)



	June 30, 2015
	Pro Rata Share			Consolidated
Capitalization
Shares of common stock outstanding	275,495			275,495
Operating partnership units outstanding	794			794
Restricted stock units outstanding	1,205			1,205
Combined shares and units outstanding	277,494			277,494
Common stock price at end of period	$	12.12		$	12.12
Common equity capitalization	$	3,363,227		$	3,363,227
Consolidated debt	1,805,618			1,805,618
Pro rata share of consolidated debt	(110,250		)	—
Cash and cash equivalents	(98,586		)	(98,586		)
Total enterprise value	$	4,960,009		$	5,070,259
Net Debt / Total Enterprise Value	32.2		%	33.7		%
Common Equity / Total Enterprise Value	67.8		%	66.3		%

Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)

Disposition of Hotel Properties

2015 Dispositions

Effective January 1, 2015, the Company adopted new accounting guidance which amends the requirements for reporting discontinued operations. Under the guidance, only disposals that represent a strategic shift that has (or will have) a major effect on the Company's results of operations would qualify as discontinued operations.

On May 21, 2015, the Company, along with its joint venture partner, sold the Hyatt Regency La Jolla hotel for sales proceeds of approximately $118,293,000. The $89,228,000 mortgage loan secured by the hotel was repaid at the time of closing. A $40,613,000 gain on the sale was recorded in other income, net in the condensed consolidated statements of operations for the three and six months ended June 30, 2015. The portion of the gain attributable to the joint venture partner was $16,649,000, which is reflected in net income attributable to the noncontrolling interests in consolidated affiliates in the condensed consolidated statements of operations for the three and six months ended June 30, 2015. The disposition of the Hyatt Regency La Jolla hotel does not represent a strategic shift that has had a major effect on the Company's results of operations; therefore, the hotel's results of operations are included in continuing operations for all periods presented.

2014 Dispositions

During the six months ended June 30, 2014, the Company sold the following hotels:



Hotel	Location	Date Sold	Sales Proceeds			Gain on sale
Four Seasons Punta Mita Resort and La Solana land parcel	Punta Mita, Mexico	February 28, 2014	$	206,867,000		$	63,879,000
Marriott London Grosvenor Square	London, England	March 31, 2014	$	209,407,000	(a)	$	92,889,000


(a)	There was an outstanding balance of £67,301,000 ($112,150,000) on the mortgage loan secured by the Marriott London Grosvenor Square hotel, which was repaid at the time of closing. The net proceeds we received were $97,257,000.

The results of operations of hotels sold prior to January 1, 2015 are classified as discontinued operations and segregated in the consolidated statements of operations for all periods presented. The following is a summary of income from discontinued operations, net of tax, for the three and six months ended June 30, 2014 (in thousands):



	Three Months Ended June 30,		Six Months Ended June 30,
	2014		2014
Hotel operating revenues	$	—	$	17,767
Operating costs and expenses	—		11,485
Depreciation and amortization	—		1,275
Total operating costs and expenses	—		12,760
Operating income	—		5,007
Interest expense	—		(1,326		)
Interest income	—		2
Loss on early extinguishment of debt	—		(272		)
Foreign currency exchange gain	—		32
Income tax expense	—		(833		)
Gain on sale, net of tax	604		156,429
Income from discontinued operations, net of tax	$	604	$	159,039

Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)

Investments in Unconsolidated Affiliates

(in thousands)

We had a 36.4% equity ownership interest in the Hotel del Coronado that we accounted for using the equity method of accounting until we acquired the remaining 63.6% equity ownership interest not previously owned by us on June 11, 2014. We had a 50.0% equity ownership interest in the Fairmont Scottsdale Princess hotel that we accounted for using the equity method of accounting until we acquired the remaining 50.0% equity ownership interest not previously owned by us on March 31, 2014. For purposes of this analysis, the operating results reflect the 36.4% equity ownership interest we held in the Hotel del Coronado prior to June 11, 2014 and the 50.0% equity ownership interest we held in the Fairmont Scottsdale Princess hotel prior to March 31, 2014.



	Three Months Ended June 30, 2014
	Hotel del Coronado			Fairmont Scottsdale Princess		Total
Total revenues (100%)	$	33,821		$	—	$	33,821
Property EBITDA (100%)	$	11,202		$	—	$	11,202
Equity in earnings of unconsolidated affiliates (SHR ownership)
Property EBITDA	$	4,075		$	—	$	4,075
Depreciation and amortization	(1,572		)	—		(1,572		)
Interest expense	(1,518		)	—		(1,518		)
Other expenses, net	(18		)	—		(18		)
Income taxes	(87		)	—		(87		)
Equity in earnings of unconsolidated affiliates	$	880		$	—	$	880
EBITDA Contribution:
Equity in earnings of unconsolidated affiliates	$	880		$	—	$	880
Depreciation and amortization	1,572			—		1,572
Interest expense	1,518			—		1,518
Income taxes	87			—		87
EBITDA Contribution	$	4,057		$	—	$	4,057
FFO Contribution:
Equity in earnings of unconsolidated affiliates	$	880		$	—	$	880
Depreciation and amortization	1,572			—		1,572
FFO Contribution	$	2,452		$	—	$	2,452



	Six Months Ended June 30, 2014
	Hotel del Coronado			Fairmont Scottsdale Princess			Total
Total revenues (100%)	$	67,863		$	35,006		$	102,869
Property EBITDA (100%)	$	20,761		$	13,191		$	33,952
Equity in earnings of unconsolidated affiliates (SHR ownership)
Property EBITDA	$	7,426		$	6,595		$	14,021
Depreciation and amortization	(3,526		)	(1,551		)	(5,077		)
Interest expense	(3,418		)	(168		)	(3,586		)
Other expenses, net	(25		)	(30		)	(55		)
Income taxes	143			—			143
Equity in earnings of unconsolidated affiliates	$	600		$	4,846		$	5,446
EBITDA Contribution
Equity in earnings of unconsolidated affiliates	$	600		$	4,846		$	5,446
Depreciation and amortization	3,526			1,551			5,077
Interest expense	3,418			168			3,586
Income taxes	(143		)	—			(143		)
EBITDA Contribution	$	7,401		$	6,565		$	13,966
FFO Contribution
Equity in earnings of unconsolidated affiliates	$	600		$	4,846		$	5,446
Depreciation and amortization	3,526			1,551			5,077
FFO Contribution	$	4,126		$	6,397		$	10,523

Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)

Leasehold Information

(in thousands)



	Three Months Ended June 30,						Six Months Ended June 30,
	2015			2014			2015			2014
Marriott Hamburg:
Property EBITDA	$	1,321		$	1,687		$	2,560		$	3,199
Revenue (a)	$	1,013		$	1,319		$	2,044		$	2,618

Lease expense	(1,017		)	(1,260		)	(2,051		)	(2,518		)
Less: Deferred gain on sale-leaseback	(43		)	(54		)	(87		)	(107		)
Adjusted lease expense	(1,060		)	(1,314		)	(2,138		)	(2,625		)

Comparable EBITDA contribution from leasehold	$	(47	)	$	5		$	(94	)	$	(7	)



Security Deposit (b):	June 30, 2015		December 31, 2014
Marriott Hamburg	$	2,117	$	2,299


(a)	For the three and six months ended June 30, 2015 and 2014, Revenue for the Marriott Hamburg hotel represents lease revenue.


(b)	The security deposit is recorded in prepaid expenses and other assets on the consolidated balance sheets.

Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)

Non-GAAP Financial Measures

We present five non-GAAP financial measures that we believe are useful to management and investors as key measures of our operating performance: Funds from Operations (FFO) attributable to SHR common shareholders; FFO—Fully Diluted; Comparable FFO; Earnings Before Interest Expense, Taxes, Depreciation and Amortization (EBITDA); and Comparable EBITDA.

EBITDA represents net income (or loss) attributable to SHR common shareholders excluding: (i) interest expense, (ii) income taxes, including deferred income tax benefits and expenses applicable to our foreign subsidiaries and income taxes applicable to sale of assets; (iii) depreciation and amortization; and (iv) preferred stock dividends. EBITDA also excludes interest expense, income taxes and depreciation and amortization of our unconsolidated affiliates. EBITDA is presented on a full participation basis, which means we have assumed conversion of all redeemable noncontrolling interests of our operating partnership into our common stock. We believe this treatment of noncontrolling interests provides useful information for management and our investors and appropriately considers our current capital structure. We also present Comparable EBITDA, which eliminates the effect of realizing deferred gains on our sale leasebacks, as well as the effect of gains or losses on sales of assets, early extinguishment of debt, impairment losses, foreign currency exchange gains or losses and certain other charges that are highly variable from year to year. We believe EBITDA and Comparable EBITDA are useful to management and investors in evaluating our operating performance because they provide management and investors with an indication of our ability to incur and service debt, to satisfy general operating expenses, to make capital expenditures and to fund other cash needs or reinvest cash into our business. We also believe they help management and investors meaningfully evaluate and compare the results of our operations from period to period by removing the impact of our asset base (primarily depreciation and amortization) from our operating results. Our management also uses EBITDA and Comparable EBITDA as measures in determining the value of acquisitions and dispositions.

We compute FFO attributable to SHR common shareholders in accordance with standards established by the National Association of Real Estate Investment Trusts, or NAREIT. NAREIT adopted a definition of FFO in order to promote an industry-wide standard measure of REIT operating performance. NAREIT defines FFO as net income (or loss) (computed in accordance with GAAP) excluding losses or gains from sales of depreciable property, impairment of depreciable real estate, real estate-related depreciation and amortization, and our portion of these items related to unconsolidated affiliates. We also present FFO—Fully Diluted, which is FFO attributable to SHR common shareholders plus income or loss on income attributable to redeemable noncontrolling interests in our operating partnership. We also present Comparable FFO, which is FFO—Fully Diluted excluding the impact of any gains or losses on early extinguishment of debt, impairment losses on non-depreciable assets, foreign currency exchange gains or losses and certain other charges that are highly variable from year to year. We believe that the presentation of FFO attributable to SHR common shareholders, FFO—Fully Diluted and Comparable FFO provides useful information to management and investors regarding our results of operations because they are measures of our ability to fund capital expenditures and expand our business. In addition, FFO is widely used in the real estate industry to measure operating performance without regard to items such as depreciation and amortization. We also present Comparable FFO per diluted share as a non-GAAP measure of our performance. We calculate Comparable FFO per diluted share for a given operating period as our Comparable FFO (as defined above) divided by the weighted average of fully diluted shares outstanding, excluding shares related to the JW Marriott Essex House Hotel put option. Dilutive securities may include shares granted under share-based compensation plans and operating partnership units. No effect is shown for securities that are anti-dilutive.

We caution investors that amounts presented in accordance with our definitions of FFO attributable to SHR common shareholders, FFO—Fully Diluted, Comparable FFO, EBITDA, and Comparable EBITDA may not be comparable to similar measures disclosed by other companies, since not all companies calculate these non-GAAP measures in the same manner. FFO attributable to SHR common shareholders, FFO—Fully Diluted, Comparable FFO, EBITDA, and Comparable EBITDA should not be considered as an alternative measure of our net income (or loss) or operating performance. FFO attributable to SHR common shareholders, FFO—Fully Diluted, Comparable FFO, EBITDA, and Comparable EBITDA may include funds that may not be available for our discretionary use due to functional requirements to conserve funds for capital expenditures and property acquisitions and other commitments and uncertainties. Although we believe that FFO attributable to SHR common shareholders, FFO—Fully Diluted, Comparable FFO, EBITDA, and Comparable EBITDA can enhance your understanding of our financial condition and results of operations, these non-GAAP financial measures, when viewed individually, are not necessarily a better indicator of any trend as compared to comparable GAAP measures such as net income (or loss) attributable to SHR common shareholders. In addition, you should be aware that adverse economic and market conditions might negatively impact our cash flow. We have provided a quantitative reconciliation of FFO attributable to SHR common shareholders, FFO—Fully Diluted, Comparable FFO, EBITDA, and Comparable EBITDA to the most directly comparable GAAP financial performance measure, which is net income (or loss) attributable to SHR common shareholders.

Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)

Reconciliation of Net Income Attributable to SHR Common Shareholders to EBITDA and Comparable EBITDA

(in thousands)



	Three Months Ended June 30,						Six Months Ended June 30,
	2015			2014			2015			2014
Net income attributable to SHR common shareholders	$	6,698		$	80,840		$	22,509		$	297,998
Depreciation and amortization—continuing operations	40,331			28,058			77,995			50,263
Depreciation and amortization—discontinued operations	—			—			—			1,275
Interest expense—continuing operations	20,709			19,587			43,494			37,861
Interest expense—discontinued operations	—			—			—			1,326
Income taxes—continuing operations	2,452			207			2,671			246
Income taxes—discontinued operations	—			—			—			833
Income taxes—sale of assets	—			—			—			20,451
Net income attributable to noncontrolling interests in SHR's operating partnership (a)	67			281			104			1,130
Adjustments attributable to noncontrolling interests in consolidated affiliates (b)	(3,209		)	(3,939		)	(7,046		)	(7,614		)
Adjustments attributable to unconsolidated affiliates (c)	—			3,153			—			8,443
Preferred shareholder dividends	—			7,169			—			16,993
EBITDA	67,048			135,356			139,727			429,205
Realized portion of deferred gain on sale-leaseback	(43		)	(54		)	(87		)	(107		)
Gain on sale of assets—continuing operations	(40,613		)	(767		)	(40,613		)	(767		)
Gain on sale of assets—discontinued operations	—			(604		)	—			(176,880		)
Gain on consolidation of affiliates	—			(65,349		)	—			(143,466		)
Impairment losses	10,401			—			10,401			—
Loss on early extinguishment of debt—continuing operations	34,211			—			34,211			—
Loss on early extinguishment of debt—discontinued operations	—			—			—			272
Foreign currency exchange (gain) loss—continuing operations	(40		)	8			76			6
Foreign currency exchange gain—discontinued operations	—			—			—			(32		)
Hotel acquisition costs	346			—			1,066			—
Non-cash interest rate derivative activity	30			—			146			—
Amortization of below market hotel management agreement	513			108			1,026			108
Activist shareholder costs	—			104			—			1,637
Adjustments attributable to noncontrolling interests in consolidated affiliates (d)	16,559			109			16,559			109
Comparable EBITDA	$	88,412		$	68,911		$	162,512		$	110,085


(a)	EBITDA is presented on a full participation basis, which means we have assumed conversion of all redeemable noncontrolling interests in SHR's operating partnership into shares of SHR's common stock. This adjustment reverses the net income that was allocated to the noncontrolling interests in SHR's operating partnership.


(b)	This adjustment represents the portion of interest expense, income taxes and depreciation and amortization attributable to the noncontrolling interest in affiliates that are consolidated but not wholly owned by us.


(c)	This adjustment represents our portion of interest expense, income taxes and depreciation and amortization related to affiliates that are not consolidated.


(d)	This adjustment represents the portion of gains or losses from sales of depreciable property and the portion of loss on early extinguishment of debt attributable to the noncontrolling interests in affiliates that are consolidated but not wholly owned by us.

Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)

Reconciliation of Net Income Attributable to SHR Common Shareholders to

Funds From Operations (FFO) Attributable to SHR Common Shareholders, FFO—Fully Diluted and Comparable FFO

(in thousands, except per share data)



	Three Months Ended June 30,						Six Months Ended June 30,
	2015			2014			2015			2014
Net income attributable to SHR common shareholders	$	6,698		$	80,840		$	22,509		$	297,998
Depreciation and amortization—continuing operations	40,331			28,058			77,995			50,263
Depreciation and amortization—discontinued operations	—			—			—			1,275
Corporate depreciation	(127		)	(123		)	(255		)	(246		)
Gain on sale of assets—continuing operations	(40,613		)	(767		)	(40,613		)	(767		)
Gain on sale of assets, net of tax—discontinued operations	—			(604		)	—			(156,429		)
Gain on consolidation of affiliates	—			(65,349		)	—			(143,466		)
Realized portion of deferred gain on sale-leaseback	(43		)	(54		)	(87		)	(107		)
Adjustments attributable to noncontrolling interests in SHR's operating partnership (a)	(116		)	(95		)	(226		)	(193		)
Adjustments attributable to noncontrolling interests in consolidated affiliates (b)	14,801			(1,971		)	12,558			(3,806		)
Adjustments attributable to unconsolidated affiliates (c)	—			1,571			—			5,077
FFO attributable to SHR common shareholders	20,931			41,506			71,881			49,599
Adjustments attributable to noncontrolling interests in SHR's operating partnership - other (d)	183			376			330			1,323
FFO—Fully Diluted	21,114			41,882			72,211			50,922
Impairment losses	10,401			—			10,401			—
Non-cash interest rate derivative activity	2,489			2,184			5,718			(110		)
Loss on early extinguishment of debt—continuing operations	34,211			—			34,211			—
Loss on early extinguishment of debt—discontinued operations	—			—			—			272
Foreign currency exchange (gain) loss—continuing operations (a)	(40		)	8			76			6
Foreign currency exchange gain—discontinued operations (a)	—			—			—			(32		)
Amortization of debt discount	40			623			690			623
Amortization of below market hotel management agreement	513			108			1,026			108
Hotel acquisition costs	346			—			1,066			—
Activist shareholder costs	—			104			—			1,637
Excess of redemption liability over carrying amount of redeemed preferred stock	—			3,203			—			6,912
Adjustments attributable to noncontrolling interests in consolidated affiliates (e)	(90		)	—			(90		)	—
Comparable FFO	$	68,984		$	48,112		$	125,309		$	60,338
Comparable FFO per fully diluted share	$	0.25		$	0.21		$	0.45		$	0.28
Weighted average diluted shares (b)	279,380			225,348			278,145			217,875


(a)	This adjustment represents the portion of depreciation and amortization attributable to the redeemable noncontrolling interests in our operating partnership.


(b)	This adjustment represents the portion of depreciation and amortization and gains or losses from sales of depreciable property that are attributable to the noncontrolling interests in affiliates that are consolidated but not wholly owned by us.


(c)	This adjustment represents our portion of depreciation and amortization related to affiliates that are not consolidated.


(d)	This adjustment represents amounts other than depreciation and amortization that are attributable to the redeemable noncontrolling interests in our operating partnership.


(e)	This adjustment represents the portion of loss on early extinguishment of debt that is attributable to the noncontrolling interests in affiliates that are consolidated but not wholly owned by us.


(f)	Excludes shares related to the JW Marriott Essex House Hotel put option.

Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)

Debt Summary

(dollars in thousands)



Debt	Interest Rate		Spread (a)	Loan Amount			Maturity (b)
Hotel del Coronado	3.84	%	365 bp	$	475,000		March 2018
Four Seasons Washington, D.C.	2.44	%	225 bp	120,000			June 2019
JW Marriott Essex House Hotel	3.14	%	295 bp	225,000			January 2020
Unsecured revolving credit facility (c)	1.84	%	165 bp	44,000			May 2020
Unsecured term loan (c)	1.79	%	160 bp	300,000			May 2020
Loews Santa Monica Beach Hotel	2.74	%	255 bp	120,000			May 2021
InterContinental Chicago	5.61	%	Fixed	141,618			August 2021
Montage Laguna Beach (d)	3.90	%	Fixed	150,000			August 2021
Ritz-Carlton Half Moon Bay (e)	2.59	%	240 bp	115,000			May 2022
InterContinental Miami	3.99	%	Fixed	115,000			September 2024
				1,805,618
Unamortized discount (d)				(981		)
				$	1,804,637


(a)	Spread over LIBOR (0.19% at June 30, 2015).


(b)	Includes extension options.

(c)

On May 27, 2015, we entered into a new $750,000,000 senior unsecured credit facility that is comprised of a $450,000,000 unsecured revolving credit facility and a $300,000,000 unsecured term loan. Interest on the unsecured revolving credit facility is payable monthly based upon a leverage-based grid with annual rates ranging from LIBOR plus 1.65% to LIBOR plus 2.40%. Interest on the unsecured term loan is also payable monthly based upon a leverage-based pricing grid with annual rates ranging from LIBOR plus 1.60% to LIBOR plus 2.35%.


(d)	On January 29, 2015, we closed on the acquisition of the Montage Laguna Beach resort. In connection with the acquisition, we assumed the outstanding balance of the mortgage loan secured by the Montage Laguna Beach resort. We recorded the mortgage loan at its fair value, which included a debt discount, which is being amortized as additional interest expense over the maturity period of the loan.


(e)	On May 27, 2015, we closed on a new $115,000,000 mortgage loan secured by the Ritz-Carlton Half Moon Bay hotel. The mortgage loan has two, one-year extension options, subject to certain conditions.

Second Quarter 2015 Debt Repayments

On April 9, 2015, we repaid the $117,000,000 mortgage loan secured by the Fairmont Scottsdale Princess hotel.

On May 21, 2015, we sold the Hyatt Regency La Jolla hotel and repaid the $89,288,000 mortgage loan secured by the hotel at

the time of closing. We recorded a $193,000 loss on early extinguishment of debt, which included the write off of unamortized

deferred financing costs.

On May 27, 2015, we repaid the $209,558,000 mortgage loan secured by the Westin St. Francis hotel and the $93,124,000

mortgage loan secured by the Fairmont Chicago hotel using proceeds from the new mortgage loan secured by the Ritz-Carlton

Half Moon Bay hotel and proceeds from the $300,000,000 unsecured term loan. We recorded a $34,014,000 loss on early

extinguishment of debt, which included prepayment penalties of $32,917,000 and the write off of unamortized deferred

financing costs.

Debt Summary (Continued)

(dollars in thousands)

Future scheduled debt principal payments (including extension options) are as follows:



Years ending December 31,	Amount
2015 (remainder)	$	1,126
2016	2,040
2017	3,066
2018	480,033
2019	125,276
Thereafter	1,194,077
	1,805,618
Unamortized discount	(981		)
	$	1,804,637

Percent of fixed rate debt	22.5		%
Weighted average interest rate (f)	3.29		%
Weighted average maturity of fixed rate debt (debt with maturity of greater than one year)	6.97

(f) Excludes the amortization of deferred financing costs.

Exhibit 99.2

Strategic Hotels & Resorts, Inc.

Supplemental Financial Information

June 30, 2015




		Supplemental Financial Information
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)		June 30, 2015

TABLE OF CONTENTS




	PAGE
CORPORATE INFORMATION
The Company	1
Board of Directors	2
Officers	3
Equity Research Coverage	4

FINANCIAL HIGHLIGHTS
Supplemental Financial Data	5
Consolidated Statements of Operations	6
Consolidated Balance Sheets	7
Discontinued Operations	8
Investments in Unconsolidated Affiliates	9
Leasehold Information	10
Non-GAAP Financial Measures	11
Reconciliation of Net Income Attributable to SHR Common Shareholders to EBITDA and Comparable EBITDA	12
Reconciliation of Net Income Attributable to SHR Common Shareholders to Funds From Operations (FFO) Attributable to SHR Common Shareholders, FFO—Fully Diluted and Comparable FFO	13
Debt Summary	14

PORTFOLIO DATA
Portfolio at June 30, 2015	16
Seasonality by Geographic Region	17
Operating Statistics by Geographic Region	18
Selected Financial and Operating Information by Property	20
Reconciliation of Property EBITDA to EBITDA	25
Reconciliation of Property EBITDA to Comparable EBITDA	27
2015 Guidance	28




		Supplemental Financial Information
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)		June 30, 2015

CORPORATE INFORMATION

The Company

Strategic Hotels & Resorts, Inc. is an industry-leading owner and asset manager of high-end hotels and resorts. We own interests in or lease a quality portfolio of upper upscale and luxury hotels and resorts primarily in desirable United States locations. Our portfolio is currently made up of 18 properties totaling 8,199 rooms. We own interests in or lease unique hotels with complex operations, sophisticated customers and multiple revenue streams. Our properties include large convention hotels, business hotels and resorts, which are managed by internationally recognized hotel management companies.

We believe our asset management expertise is what truly distinguishes us. Asset management is our focus, our core competency, and our competitive advantage. Our business is driven by our team’s depth of knowledge and hands-on expertise in every aspect of the lodging industry. While our focus is to drive top line revenues, we importantly focus on every component of bottom line profitability. We use our experience to make selective, value added acquisitions and recycle capital through thoughtful and planned dispositions. Simply put, we are utilizing our expert management skills in building a great hotel company which we believe will provide attractive returns for our shareholders.

Strategic Hotels & Resorts, Inc. is a real estate investment trust (REIT) and is traded on the New York Stock Exchange under the symbol BEE.

Fiscal Year End:

December 31

Number of Full-Time Equivalent Employees:

Corporate Headquarters:

200 West Madison Street, Suite 1700

Chicago, IL 60606

(312) 658-5000

Company Contacts:

Diane M. Morefield

Executive Vice President, Chief Financial Officer

(312) 658-5000

Jonathan P. Stanner

Senior Vice President, Capital Markets, Acquisitions and Treasurer

(312) 658-5000




		Supplemental Financial Information
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)		June 30, 2015

Board of Directors

Raymond L. Gellein, Jr.

Chairman of the Board, Chief Executive Officer and President

Sheli Z. Rosenberg

Lead Independent Director

Robert P. Bowen

Director and Chairman of the Audit Committee

James A. Jeffs

Director and Chairman of the Compensation Committee

William A. Prezant

Director and Chairman of the Corporate Governance and Nominating Committee

David W. Johnson

Director

Richard D. Kincaid

Director

Sir David M.C. Michels

Director

Eugene F. Reilly

Director




		Supplemental Financial Information
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)		June 30, 2015

Officers

Raymond L. Gellein, Jr.

President and Chief Executive Officer

Diane M. Morefield

Executive Vice President, Chief Financial Officer (Principal Financial and Accounting Officer)

Richard J. Moreau

Executive Vice President, Chief Operating Officer

Paula C. Maggio

Executive Vice President, Secretary & General Counsel

John K.T. Barrett

Senior Vice President, Asset Management

Thomas G. Healy

Senior Vice President, Asset Management

David R. Hogin, Jr.

Senior Vice President, Asset Management

Robert T. McAllister

Senior Vice President, Tax

Patricia A. Needham

Senior Vice President, Legal

Eric D. Hassberger

Senior Vice President, Asset Management and Acquisitions

Jonathan P. Stanner

Senior Vice President, Capital Markets, Acquisitions and Treasurer

Gregory A. Brenner

Vice President, Controller

Carly P. Edgar

Vice President, Asset Management

James L. Porter

Vice President, Internal Audit

George T. Stowers

Vice President, Design and Construction

Bryce D. White

Vice President, Information Technology




		Supplemental Financial Information
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)		June 30, 2015

Equity Research Coverage




Firm	Analyst	Telephone

Bank of America Merrill Lynch	Andrew Didora	(646) 855-2924

Deutsche Bank North America	Chris Woronka	(212) 250-4486

Green Street Advisors	Lukas Hartwich	(949) 640-8780

Evercore ISI	Rich Hightower	(212) 752-0886

JMP Securities	Robert LaFleur	(415) 835-8944

J.P. Morgan Securities	Joseph Greff	(212) 622-0548

Raymond James & Associates	William Crow	(727) 567-2594

Wells Fargo Securities, LLC	Jeffrey Donnelly	(617) 603-4262

Credit Suisse	Ian Weissman	(212) 538-6889

RBC Capital Markets	Wes Golladay	(440) 715-2650

Canaccord Genuity Inc. (US)	Ryan Meliker	(212) 389-8094

Strategic Hotels & Resorts, Inc. is followed by the analysts listed above. Please note that any opinions, estimates or forecasts regarding Strategic Hotels & Resorts, Inc.'s performance made by these analysts are theirs alone and do not represent opinions, forecasts or predictions of Strategic Hotels & Resorts, Inc. or its management. Strategic Hotels & Resorts, Inc. does not by its reference here imply its endorsement of, or concurrence with, such information, conclusions or recommendations.




		Supplemental Financial Information
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)		June 30, 2015

Financial Highlights

Supplemental Financial Data

(in thousands, except per share information)



	June 30, 2015
	Pro Rata Share			Consolidated
Capitalization
Shares of common stock outstanding	275,495			275,495
Operating partnership units outstanding	794			794
Restricted stock units outstanding	1,205			1,205
Combined shares and units outstanding	277,494			277,494
Common stock price at end of period	$	12.12		$	12.12
Common equity capitalization	$	3,363,227		$	3,363,227
Consolidated debt	1,805,618			1,805,618
Pro rata share of consolidated debt	(110,250		)	—
Cash and cash equivalents	(98,586		)	(98,586		)
Total enterprise value	$	4,960,009		$	5,070,259
Net Debt / Total Enterprise Value	32.2		%	33.7		%
Common Equity / Total Enterprise Value	67.8		%	66.3		%



		Supplemental Financial Information
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)		Three and Six Months Ended June 30, 2015 and 2014

Consolidated Statements of Operations

(in thousands, except per share data)



	Three Months Ended June 30,						Six Months Ended June 30,
	2015			2014			2015			2014
Revenues:
Rooms	$	186,377		$	148,874		$	349,241		$	251,974
Food and beverage	134,523			100,028			257,992			170,045
Other hotel operating revenue	34,989			25,942			72,896			46,181
Lease revenue	1,013			1,319			2,044			2,618
Total revenues	356,902			276,163			682,173			470,818
Operating Costs and Expenses:
Rooms	51,072			41,268			98,937			74,975
Food and beverage	88,245			67,077			171,319			121,680
Other departmental expenses	86,626			66,238			171,350			119,817
Management fees	12,423			9,241			23,862			15,019
Other hotel expenses	19,842			15,572			35,455			31,250
Lease expense	1,017			1,260			2,051			2,518
Depreciation and amortization	40,331			28,058			77,995			50,263
Impairment losses	10,401			—			10,401			—
Corporate expenses	6,441			7,198			14,709			14,391
Total operating costs and expenses	316,398			235,912			606,079			429,913
Operating income	40,504			40,251			76,094			40,905
Interest expense	(20,709		)	(19,587		)	(43,494		)	(37,861		)
Interest income	16			50			117			77
Loss on early extinguishment of debt	(34,211		)	—			(34,211		)	—
Equity in earnings of unconsolidated affiliates	—			826			—			5,271
Foreign currency exchange gain (loss)	40			(8		)	(76		)	(6		)
Gain on consolidation of affiliates	—			65,349			—			143,466
Other income, net	40,465			795			40,308			1,218
Income before income taxes and discontinued operations	26,105			87,676			38,738			153,070
Income tax expense	(2,452		)	(207		)	(2,671		)	(246		)
Income from continuing operations	23,653			87,469			36,067			152,824
Income from discontinued operations, net of tax	—			604			—			159,039
Net Income	23,653			88,073			36,067			311,863
Net income attributable to the noncontrolling interests in SHR's operating partnership	(67		)	(281		)	(104		)	(1,130		)
Net (income) loss attributable to the noncontrolling interests in consolidated affiliates	(16,888		)	217			(13,454		)	4,258
Net Income Attributable to SHR	6,698			88,009			22,509			314,991
Preferred shareholder dividends	—			(7,169		)	—			(16,993		)
Net Income Attributable to SHR Common Shareholders	$	6,698		$	80,840		$	22,509		$	297,998
Basic Income Per Common Share:
Income from continuing operations attributable to SHR common shareholders	$	0.02		$	0.36		$	0.08		$	0.65
Income from discontinued operations attributable to SHR common shareholders	—			—			—			0.74
Net income attributable to SHR common shareholders	$	0.02		$	0.36		$	0.08		$	1.39
Weighted average shares of common stock outstanding	276,380			222,013			257,056			214,450
Diluted Income Per Common Share:
Income from continuing operations attributable to SHR common shareholders	$	0.02		$	0.35		$	0.07		$	0.60
Income from discontinued operations attributable to SHR common shareholders	—			—			—			0.70
Net income attributable to SHR common shareholders	$	0.02		$	0.35		$	0.07		$	1.30
Weighted average shares of common stock outstanding	278,383			233,463			284,208			225,900



		Supplemental Financial Information
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)		June 30, 2015 and December 31, 2014

Consolidated Balance Sheets

(in thousands, except share data)



	June 30, 2015			December 31, 2014
Assets
Investment in hotel properties, net	$	3,276,411		$	2,828,400
Goodwill	21,629			38,128
Intangible assets, net of accumulated amortization of $11,783 and $7,288	93,936			94,324
Investment in unconsolidated affiliates	22,850			22,850
Cash and cash equivalents	98,586			442,613
Restricted cash and cash equivalents	77,790			81,510
Accounts receivable, net of allowance for doubtful accounts of $688 and $492	71,486			51,382
Deferred financing costs, net of accumulated amortization of $8,203 and $7,814	14,580			11,440
Deferred tax assets	1,419			1,729
Prepaid expenses and other assets	56,727			46,781
Total assets	$	3,735,414		$	3,619,157
Liabilities, Noncontrolling Interests and Equity
Liabilities:
Mortgages payable, net of discount	$	1,460,637		$	1,705,778
Credit facility, including an unsecured term loan of $300,000 and $0	344,000			—
Accounts payable and accrued expenses	234,306			224,505
Preferred stock redemption liability	—			90,384
Distributions payable	—			104
Deferred tax liabilities	46,117			46,137
Total liabilities	2,085,060			2,066,908
Commitments and contingencies
Noncontrolling interests in SHR’s operating partnership	9,619			10,500
Equity:
SHR’s shareholders’ equity:
Common stock ($0.01 par value per share; 350,000,000 shares of common stock authorized; 275,494,707 and 267,435,799 shares of common stock issued and outstanding)	2,755			2,674
Additional paid-in capital	2,451,209			2,348,284
Accumulated deficit	(867,960		)	(890,469		)
Accumulated other comprehensive loss	(7,586		)	(13,032		)
Total SHR’s shareholders’ equity	1,578,418			1,447,457
Noncontrolling interests in consolidated affiliates	62,317			94,292
Total equity	1,640,735			1,541,749
Total liabilities, noncontrolling interests and equity	$	3,735,414		$	3,619,157



		Supplemental Financial Information
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)		Three and Six Months Ended June 30, 2015 and 2014

Disposition of Hotel Properties

2015 Dispositions

2014 Dispositions

During the six months ended June 30, 2014, the Company sold the following hotels:



Hotel	Location	Date Sold	Sales Proceeds			Gain on sale
Four Seasons Punta Mita Resort and La Solana land parcel	Punta Mita, Mexico	February 28, 2014	$	206,867,000		$	63,879,000
Marriott London Grosvenor Square	London, England	March 31, 2014	$	209,407,000	(a)	$	92,889,000


(a)	There was an outstanding balance of £67,301,000 ($112,150,000) on the mortgage loan secured by the Marriott London Grosvenor Square hotel, which was repaid at the time of closing. We received net proceeds of $97,257,000.



	Three Months Ended June 30,		Six Months Ended June 30,
	2014		2014
Hotel operating revenues	$	—	$	17,767
Operating costs and expenses	—		11,485
Depreciation and amortization	—		1,275
Total operating costs and expenses	—		12,760
Operating income	—		5,007
Interest expense	—		(1,326		)
Interest income	—		2
Loss on early extinguishment of debt	—		(272		)
Foreign currency exchange gain	—		32
Income tax expense	—		(833		)
Gain on sale, net of tax	604		156,429
Income from discontinued operations, net of tax	$	604	$	159,039



		Supplemental Financial Information
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)		Three and Six Months Ended June 30, 2015 and 2014

Investments in Unconsolidated Affiliates

(in thousands)



	Three Months Ended June 30, 2014
	Hotel del Coronado			Fairmont Scottsdale Princess		Total
Total revenues (100%)	$	33,821		$	—	$	33,821
Property EBITDA (100%)	$	11,202		$	—	$	11,202
Equity in earnings of unconsolidated affiliates (SHR ownership)
Property EBITDA	$	4,075		$	—	$	4,075
Depreciation and amortization	(1,572		)	—		(1,572		)
Interest expense	(1,518		)	—		(1,518		)
Other expenses, net	(18		)	—		(18		)
Income taxes	(87		)	—		(87		)
Equity in earnings of unconsolidated affiliates	$	880		$	—	$	880
EBITDA Contribution:
Equity in earnings of unconsolidated affiliates	$	880		$	—	$	880
Depreciation and amortization	1,572			—		1,572
Interest expense	1,518			—		1,518
Income taxes	87			—		87
EBITDA Contribution	$	4,057		$	—	$	4,057
FFO Contribution:
Equity in earnings of unconsolidated affiliates	$	880		$	—	$	880
Depreciation and amortization	1,572			—		1,572
FFO Contribution	$	2,452		$	—	$	2,452




	Six Months Ended June 30, 2014
	Hotel del Coronado			Fairmont Scottsdale Princess			Total
Total revenues (100%)	$	67,863		$	35,006		$	102,869
Property EBITDA (100%)	$	20,761		$	13,191		$	33,952
Equity in earnings of unconsolidated affiliates (SHR ownership)
Property EBITDA	$	7,426		$	6,595		$	14,021
Depreciation and amortization	(3,526		)	(1,551		)	(5,077		)
Interest expense	(3,418		)	(168		)	(3,586		)
Other expenses, net	(25		)	(30		)	(55		)
Income taxes	143			—			143
Equity in earnings of unconsolidated affiliates	$	600		$	4,846		$	5,446
EBITDA Contribution
Equity in earnings of unconsolidated affiliates	$	600		$	4,846		$	5,446
Depreciation and amortization	3,526			1,551			5,077
Interest expense	3,418			168			3,586
Income taxes	(143		)	—			(143		)
EBITDA Contribution	$	7,401		$	6,565		$	13,966
FFO Contribution
Equity in earnings of unconsolidated affiliates	$	600		$	4,846		$	5,446
Depreciation and amortization	3,526			1,551			5,077
FFO Contribution	$	4,126		$	6,397		$	10,523




		Supplemental Financial Information
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)		Three and Six Months Ended June 30, 2015 and 2014

Leasehold Information

(in thousands)



	Three Months Ended June 30,						Six Months Ended June 30,
	2015			2014			2015			2014
Marriott Hamburg:
Property EBITDA	$	1,321		$	1,687		$	2,560		$	3,199
Revenue (a)	$	1,013		$	1,319		$	2,044		$	2,618

Lease expense	(1,017		)	(1,260		)	(2,051		)	(2,518		)
Less: Deferred gain on sale-leaseback	(43		)	(54		)	(87		)	(107		)
Adjusted lease expense	(1,060		)	(1,314		)	(2,138		)	(2,625		)

Comparable EBITDA contribution from leasehold	$	(47	)	$	5		$	(94	)	$	(7	)



Security Deposit (b):	June 30, 2015		December 31, 2014
Marriott Hamburg	$	2,117	$	2,299


(a)	For the three and six months ended June 30, 2015 and 2014, Revenue for the Marriott Hamburg hotel represents lease revenue.


(b)	The security deposit is recorded in prepaid expenses and other assets on the consolidated balance sheets.




		Supplemental Financial Information
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)		June 30, 2015

Non-GAAP Financial Measures




		Supplemental Financial Information
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)		Three and Six Months Ended June 30, 2015 and 2014

Reconciliation of Net Income Attributable to SHR Common Shareholders to EBITDA and Comparable EBITDA

(in thousands)



	Three Months Ended June 30,						Six Months Ended June 30,
	2015			2014			2015			2014
Net income attributable to SHR common shareholders	$	6,698		$	80,840		$	22,509		$	297,998
Depreciation and amortization—continuing operations	40,331			28,058			77,995			50,263
Depreciation and amortization—discontinued operations	—			—			—			1,275
Interest expense—continuing operations	20,709			19,587			43,494			37,861
Interest expense—discontinued operations	—			—			—			1,326
Income taxes—continuing operations	2,452			207			2,671			246
Income taxes—discontinued operations	—			—			—			833
Income taxes—sale of assets	—			—			—			20,451
Net income attributable to noncontrolling interests in SHR's operating partnership (a)	67			281			104			1,130
Adjustments attributable to noncontrolling interests in consolidated affiliates (b)	(3,209		)	(3,939		)	(7,046		)	(7,614		)
Adjustments attributable to unconsolidated affiliates (c)	—			3,153			—			8,443
Preferred shareholder dividends	—			7,169			—			16,993
EBITDA	67,048			135,356			139,727			429,205
Realized portion of deferred gain on sale-leaseback	(43		)	(54		)	(87		)	(107		)
Gain on sale of assets—continuing operations	(40,613		)	(767		)	(40,613		)	(767		)
Gain on sale of assets—discontinued operations	—			(604		)	—			(176,880		)
Gain on consolidation of affiliates	—			(65,349		)	—			(143,466		)
Impairment losses	10,401			—			10,401			—
Loss on early extinguishment of debt—continuing operations	34,211			—			34,211			—
Loss on early extinguishment of debt—discontinued operations	—			—			—			272
Foreign currency exchange (gain) loss—continuing operations	(40		)	8			76			6
Foreign currency exchange gain—discontinued operations	—			—			—			(32		)
Hotel acquisition costs	346			—			1,066			—
Non-cash interest rate derivative activity	30			—			146			—
Amortization of below market hotel management agreement	513			108			1,026			108
Activist shareholder costs	—			104			—			1,637
Adjustments attributable to noncontrolling interests in consolidated affiliates (d)	16,559			109			16,559			109
Comparable EBITDA	$	88,412		$	68,911		$	162,512		$	110,085


(a)	EBITDA is presented on a full participation basis, which means we have assumed conversion of all redeemable noncontrolling interests in SHR's operating partnership into shares of SHR's common stock. This adjustment reverses the net income that was allocated to the noncontrolling interests in SHR's operating partnership.


(b)	This adjustment represents the portion of interest expense, income taxes and depreciation and amortization attributable to the noncontrolling interests in affiliates that are consolidated but not wholly owned by us.


(c)	This adjustment represents our portion of interest expense, income taxes and depreciation and amortization related to affiliates that are not consolidated.


(d)	This adjustment represents the portion of gains or losses from sales of depreciable property and the portion of loss on early extinguishment of debt attributable to the noncontrolling interests in affiliates that are consolidated but not wholly owned by us.




		Supplemental Financial Information
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)		Three and Six Months Ended June 30, 2015 and 2014

Reconciliation of Net Income Attributable to SHR Common Shareholders to

Funds From Operations (FFO) Attributable to SHR Common Shareholders, FFO—Fully Diluted and Comparable FFO

(in thousands, except per share data)



	Three Months Ended June 30,						Six Months Ended June 30,
	2015			2014			2015			2014
Net income attributable to SHR common shareholders	$	6,698		$	80,840		$	22,509		$	297,998
Depreciation and amortization—continuing operations	40,331			28,058			77,995			50,263
Depreciation and amortization—discontinued operations	—			—			—			1,275
Corporate depreciation	(127		)	(123		)	(255		)	(246		)
Gain on sale of assets—continuing operations	(40,613		)	(767		)	(40,613		)	(767		)
Gain on sale of assets, net of tax—discontinued operations	—			(604		)	—			(156,429		)
Gain on consolidation of affiliates	—			(65,349		)	—			(143,466		)
Realized portion of deferred gain on sale-leaseback	(43		)	(54		)	(87		)	(107		)
Adjustments attributable to noncontrolling interests in SHR's operating partnership (a)	(116		)	(95		)	(226		)	(193		)
Adjustments attributable to noncontrolling interests in consolidated affiliates (b)	14,801			(1,971		)	12,558			(3,806		)
Adjustments attributable to unconsolidated affiliates (c)	—			1,571			—			5,077
FFO attributable to SHR common shareholders	20,931			41,506			71,881			49,599
Adjustments attributable to noncontrolling interests in SHR's operating partnership - other (d)	183			376			330			1,323
FFO—Fully Diluted	21,114			41,882			72,211			50,922
Impairment losses	10,401			—			10,401			—
Non-cash interest rate derivative activity	2,489			2,184			5,718			(110		)
Loss on early extinguishment of debt—continuing operations	34,211			—			34,211			—
Loss on early extinguishment of debt—discontinued operations	—			—			—			272
Foreign currency exchange (gain) loss—continuing operations	(40		)	8			76			6
Foreign currency exchange gain—discontinued operations	—			—			—			(32		)
Amortization of debt discount	40			623			690			623
Amortization of below market hotel management agreement	513			108			1,026			108
Hotel acquisition costs	346			—			1,066			—
Activist shareholder costs	—			104			—			1,637
Excess of redemption liability over carrying amount of redeemed preferred stock	—			3,203			—			6,912
Adjustments attributable to noncontrolling interests in consolidated affiliates (e)	(90		)	—			(90		)	—
Comparable FFO	$	68,984		$	48,112		$	125,309		$	60,338
Comparable FFO per fully diluted share	$	0.25		$	0.21		$	0.45		$	0.28
Weighted average diluted shares (f)	279,380			225,348			278,145			217,875


(a)	This adjustment represents the portion of depreciation and amortization attributable to the redeemable noncontrolling interests in our operating partnership.


(b)	This adjustment represents the portion of depreciation and amortization and gains or losses from sales of depreciable property that are attributable to the noncontrolling interests in affiliates that are consolidated but not wholly owned by us.


(c)	This adjustment represents our portion of the depreciation and amortization related to affiliates that are not consolidated.


(d)	This adjustment represents amounts other than depreciation and amortization that are attributable to the redeemable noncontrolling interests in our operating partnership.


(e)	This adjustment represents the portion of loss on early extinguishment of debt that is attributable to the noncontrolling interests in affiliates that are consolidated but not wholly owned by us.


(f)	Excludes shares related to the JW Marriott Essex House Hotel put option.



		Supplemental Financial Information
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)		June 30, 2015

Debt Summary

(dollars in thousands)



Debt	Interest Rate		Spread (a)	Loan Amount			Maturity (b)
Hotel del Coronado	3.84	%	365 bp	$	475,000		March 2018
Four Seasons Washington, D.C.	2.44	%	225 bp	120,000			June 2019
JW Marriott Essex House Hotel	3.14	%	295 bp	225,000			January 2020
Unsecured revolving credit facility (c)	1.84	%	165 bp	44,000			May 2020
Unsecured term loan (c)	1.79	%	160 bp	300,000			May 2020
Loews Santa Monica Beach Hotel	2.74	%	255 bp	120,000			May 2021
InterContinental Chicago	5.61	%	Fixed	141,618			August 2021
Montage Laguna Beach (d)	3.90	%	Fixed	150,000			August 2021
Ritz-Carlton Half Moon Bay (e)	2.59	%	240 bp	115,000			May 2022
InterContinental Miami	3.99	%	Fixed	115,000			September 2024
				1,805,618
Unamortized discount (d)				(981		)
				$	1,804,637


(a)	Spread over LIBOR (0.19% at June 30, 2015).


(b)	Includes extension options.

(c)


(d)	On January 29, 2015, we closed on the acquisition of the Montage Laguna Beach resort. In connection with the acquisition, we assumed the outstanding balance of the mortgage loan secured by the Montage Laguna Beach resort. We recorded the mortgage loan at its fair value, which included a debt discount, which is being amortized as additional interest expense over the maturity period of the loan.


(e)	On May 27, 2015, we closed on a new $115,000,000 mortgage loan secured by the Ritz-Carlton Half Moon Bay hotel. The mortgage loan has two, one-year extension options, subject to certain conditions.

Second Quarter 2015 Debt Repayments

On April 9, 2015, we repaid the $117,000,000 mortgage loan secured by the Fairmont Scottsdale Princess hotel.

On May 21, 2015, we sold the Hyatt Regency La Jolla hotel and repaid the $89,288,000 mortgage loan secured by the hotel at the time of closing. We recorded a $193,000 loss on early extinguishment of debt, which included the write off of unamortized deferred financing costs.

On May 27, 2015, we repaid the $209,558,000 mortgage loan secured by the Westin St. Francis hotel and the $93,124,000 mortgage loan secured by the Fairmont Chicago hotel using proceeds from the new mortgage loan secured by the Ritz-Carlton Half Moon Bay hotel and proceeds from the $300,000,000 unsecured term loan. We recorded a $34,014,000 loss on early extinguishment of debt, which included prepayment penalties of $32,917,000 and the write off of unamortized deferred financing costs.



		Supplemental Financial Information
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)		June 30, 2015

Debt Summary (Continued)

(in thousands)

Future scheduled debt principal payments (including extension options) are as follows:



Years ending December 31,	Amounts
2015 (remainder)	$	1,126
2016	2,040
2017	3,066
2018	480,033
2019	125,276
Thereafter	1,194,077
	1,805,618
Unamortized discount	(981		)
	$	1,804,637

Percent of fixed rate debt	22.5		%
Weighted average interest rate (f)	3.29		%
Weighted average maturity of fixed rate debt (debt with maturity of greater than one year)	6.97

(f) Excludes the amortization of deferred financing costs.



		Supplemental Financial Information
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)		June 30, 2015

Portfolio Data

Portfolio at June 30, 2015

(dollars in thousands)



Hotel	Location	Number of Rooms	% of Total Rooms		2nd QTR 2015 Property EBITDA			% of 2nd QTR 2015 Property EBITDA
United States:
Westin St. Francis	San Francisco, CA	1,195	15	%	$	12,675		13	%
InterContinental Chicago	Chicago, IL	792	10	%	7,062			7	%
Hotel del Coronado	Coronado, CA	757	9	%	14,835			15	%
Fairmont Chicago	Chicago, IL	687	8	%	6,231			6	%
Fairmont Scottsdale Princess	Scottsdale, AZ	649	8	%	5,502			6	%
InterContinental Miami	Miami, FL	641	8	%	5,547			6	%
JW Marriott Essex House Hotel (a)	New York, NY	511	6	%	6,540			7	%
Ritz-Carlton Laguna Niguel	Dana Point, CA	396	5	%	8,932			9	%
Marriott Lincolnshire Resort	Lincolnshire, IL	389	5	%	1,205			1	%
Loews Santa Monica Beach Hotel	Santa Monica, CA	347	4	%	4,488			5	%
Four Seasons Hotel Austin (b)	Austin, TX	291	4	%	1,530			2	%
Ritz-Carlton Half Moon Bay	Half Moon Bay, CA	261	3	%	4,299			4	%
Montage Laguna Beach	Laguna Beach, CA	249	3	%	5,232			5	%
Four Seasons Washington, D.C.	Washington, D.C.	222	3	%	5,960			6	%
Four Seasons Resort Scottsdale at Troon North	Scottsdale, AZ	210	3	%	2,904			3	%
Four Seasons Silicon Valley	East Palo Alto, CA	200	2	%	3,392			4	%
Four Seasons Jackson Hole	Teton Village, WY	124	1	%	(104		)	—	%
Total United States		7,921	97	%	96,230			99	%
European:
Marriott Hamburg (c)	Hamburg, Germany	278	3	%	N/A			N/A
Assets Sold:
Hyatt Regency La Jolla Hotel (d)	La Jolla, CA	N/A	N/A		1,244			1	%
		8,199	100	%	97,474			100	%

(a)

As of June 30, 2015, we owned a 51.0% controlling interest in the entity that owns the JW Marriott Essex House Hotel and consolidated this hotel for reporting purposes. On July 24, 2015, our joint venture partner exercised its option to sell us its equity interest in the entity that owns the JW Marriott Essex House Hotel. Subsequent to the option being exercised, we own 100% of the JW Marriott Essex House Hotel.


(b)	On May 12, 2015, we closed on the acquisition of the Four Seasons Hotel Austin. We have included the results of this hotel in the quarterly Property EBITDA and percentage of Property EBITDA calculation above only for our period of ownership.


(c)	We sublease this property and have not included it in the percentage of Property EBITDA calculation.


(d)	On May 21, 2015, we, along with our joint venture partner, sold this hotel. We have included the results of this hotel in the quarterly Property EBITDA and percentage of Property EBITDA calculation above only for our period of ownership.



		Supplemental Financial Information
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)		Four Quarters Ended June 30, 2015

Seasonality by Geographic Region

(dollars in thousands)

The Total United States portfolio is derived from our hotel portfolio at June 30, 2015, consisting of all properties located in the United States. We have three acquisition properties, the Four Seasons Resort Scottsdale at Troon North, which was acquired on December 9, 2014, the Montage Laguna Beach resort, which was acquired on January 29, 2015, and the Four Seasons Hotel Austin, which was acquired on May 12, 2015. We have not included the operating results of the Hyatt Regency La Jolla hotel because we sold the hotel on May 21, 2015. The results for the three months ended December 31, 2014 include payments pursuant to the JW Marriott Essex House Hotel NOI guarantee of $5.8 million.



Total United States Hotels (as of June 30, 2015)
Acquisition property revenues - 3 Properties and 750 Rooms
Same store property revenues - 14 Properties and 7,171 Rooms

	Three Months Ended
	September 30, 2014			December 31, 2014			March 31, 2015			June 30, 2015			Total
Acquisition property revenues (a)	$	—		$	2,539		$	31,043		$	42,482		$	76,064
Acquisition property revenues (b)	43,137			44,649			$	11,993		6,780			106,559
Same store property revenues	294,231			300,409			282,739			307,743			1,185,122
Total pro forma revenues	$	337,368		$	347,597		$	325,775		$	357,005		$	1,367,745
Total property seasonality %	24.6		%	25.4		%	23.8		%	26.1		%	99.9		%

(a) Acquisition property revenues for our period of ownership

(b) Acquisition property revenues prior to our period of ownership



		Supplemental Financial Information
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)		Three and Six Months Ended June 30, 2015 and 2014

Operating Statistics by Geographic Region

The Same Store United States portfolio is derived from our hotel portfolio at June 30, 2015, consisting of all properties located in the United States. The Same Store United States portfolio excludes the Four Seasons Resort Scottsdale at Troon North, the Montage Laguna Beach resort and the Four Seasons Hotel Austin for the three and six months ended June 30, 2015 and 2014.

Same Store United States Hotels (as of June 30, 2015)

14 Properties

7,171 Rooms



	Three Months Ended June 30,									Six Months Ended June 30,
	2015			2014			Change			2015			2014			Change
ADR	$	317.67		$	302.76		4.9		%	$	312.95		$	296.39		5.6	%
Average Occupancy	79.1		%	80.0		%	(0.9	)	pts	75.5		%	75.0		%	0.5	pts
RevPAR	$	251.41		$	242.18		3.8		%	$	236.16		$	222.28		6.2	%
Total RevPAR	$	471.59		$	459.33		2.7		%	$	454.93		$	427.87		6.3	%
Property EBITDA Margin	28.1		%	28.5		%	(0.4	)	pts	26.6		%	24.9		%	1.7	pts

Same Store United States Hotels - Adjusted (a) (as of June 30, 2015)

14 Properties

7,171 Rooms



	Three Months Ended June 30,									Six Months Ended June 30,
	2015			2014			Change			2015			2014			Change
ADR	$	317.67		$	299.97		5.9		%	$	312.95		$	293.14		6.8	%
Average Occupancy	79.1		%	80.0		%	(0.9	)	pts	75.5		%	75.0		%	0.5	pts
RevPAR	$	251.41		$	239.95		4.8		%	$	236.16		$	219.84		7.4	%
Total RevPAR	$	472.27		$	462.41		2.1		%	$	454.93		$	430.34		5.7	%
Property EBITDA Margin	28.3		%	28.3		%	—		pts	26.8		%	24.7		%	2.1	pts

(a) For the three months ended June 30, 2015 and 2014, property EBITDA margins exclude the amortization of the below market hotel management agreement related to the Hotel del Coronado of $0.5 million and $0.1 million, respectively. For the six months ended June 30, 2015 and 2014, property EBITDA margins exclude the amortization of the below market hotel management agreement related to the Hotel del Coronado of $1.0 million and $0.1 million, respectively. For the three and six months ended June 30, 2014, the statistics have been modified to take into account certain adjustments related to the subsequent adoption of the Uniform System of Accounts for the Lodging Industry, Eleventh Revised Edition (the "USALI Eleventh Revised Edition").



		Supplemental Financial Information
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)		Three and Six Months Ended June 30, 2015 and 2014

Operating Statistics by Geographic Region (Continued)

The Total United States portfolio is derived from our hotel portfolio at June 30, 2015, consisting of all properties located in the United States, including 100% of the operations of the Hotel del Coronado, the Fairmont Scottsdale Princess hotel, the Four Seasons Resort Scottsdale at Troon North, the Montage Laguna Beach resort and the Four Seasons Hotel Austin, including periods prior to full ownership, for the three and six months ended June 30, 2015 and 2014. We have not included the operating results of the Hyatt Regency La Jolla hotel because we sold the hotel on May 21, 2015.

Total United States Hotels (as of June 30, 2015)

17 Properties

7,921 Rooms



	Three Months Ended June 30,									Six Months Ended June 30,
	2015			2014			Change			2015			2014			Change
ADR	$	328.76		$	313.68		4.8		%	$	326.59		$	309.37		5.6	%
Average Occupancy	78.8		%	80.0		%	(1.2	)	pts	75.7		%	75.5		%	0.2	pts
RevPAR	$	259.15		$	250.92		3.3		%	$	247.30		$	233.52		5.9	%
Total RevPAR	$	495.30		$	482.97		2.6		%	$	482.03		$	453.65		6.3	%
Property EBITDA Margin	27.6		%	27.9		%	(0.3	)	pts	26.4		%	24.7		%	1.7	pts

Total United States Hotels - Adjusted (b) (as of June 30, 2015)

17 Properties

7,921 Rooms



	Three Months Ended June 30,									Six Months Ended June 30,
	2015			2014			Change			2015			2014			Change
ADR	$	328.76		$	310.53		5.9		%	$	326.59		$	305.73		6.8	%
Average Occupancy	78.8		%	80.0		%	(1.2	)	pts	75.7		%	75.5		%	0.2	pts
RevPAR	$	259.15		$	248.40		4.3		%	$	247.30		$	230.78		7.2	%
Total RevPAR	$	495.90		$	486.55		1.9		%	$	482.03		$	456.46		5.6	%
Property EBITDA Margin	27.7		%	27.7		%	—		pts	26.5		%	24.6		%	1.9	pts

(b) For the three months ended June 30, 2015 and 2014, property EBITDA margins exclude the amortization of the below market hotel management agreement related to the Hotel del Coronado of $0.5 million and $0.1 million, respectively. For the six months ended June 30, 2015 and 2014, property EBITDA margins exclude the amortization of the below market hotel management agreement related to the Hotel del Coronado of $1.0 million and $0.1 million, respectively. For the three and six months ended June 30, 2014, the statistics have been modified to take into account certain adjustments related to the subsequent adoption of the USALI Eleventh Revised Edition.



		Supplemental Financial Information
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)		Three and Six Months Ended June 30, 2015 and 2014

Selected Financial and Operating Information by Property

(in thousands, except operating information)

The following tables present selected financial and operating information by property for the three and six months ended June 30, 2015 and 2014. Property EBITDA reflects property net operating income or loss plus depreciation and amortization. The following financial and operating information for the three and six months ended June 30, 2014 is adjusted for changes resulting from the adoption of the USALI Eleventh Revised Edition. The information in the following tables includes the amortization of the below market hotel management agreement related to the Hotel del Coronado of $0.5 million and $0.1 million for the three months ended June 30, 2015 and 2014, respectively, and $1.0 million and $0.1 million for the six months ended June 30, 2015 and 2014, respectively.



	Three Months Ended June 30,									Six Months Ended June 30,
UNITED STATES HOTELS:	2015			2014			Change			2015			2014			Change
FAIRMONT CHICAGO
Selected Financial Information:
Total revenues	$	20,492		$	19,246		6.5		%	$	29,922		$	28,123		6.4		%
Property EBITDA	$	6,231		$	5,812		7.2		%	$	4,514		$	3,673		22.9		%
Selected Operating Information:
Rooms	687			687			—			687			687			—
Average occupancy	73.5		%	74.9		%	(1.4	)	pts	60.9		%	60.5		%	0.4		pts
ADR	$	267.20		$	243.03		9.9		%	$	227.42		$	211.90		7.3		%
RevPAR	$	196.38		$	182.05		7.9		%	$	138.57		$	128.19		8.1		%
Total RevPAR	$	327.79		$	307.85		6.5		%	$	240.64		$	226.16		6.4		%

FAIRMONT SCOTTSDALE PRINCESS
Selected Financial Information (Amounts below are 100% of operations, of which SHR owns 100% as of June 30, 2014):
Total revenues	$	25,125		$	27,941		(10.1	)	%	$	67,345		$	64,218		4.9		%
Property EBITDA	$	5,502		$	7,138		(22.9	)	%	$	22,249		$	20,329		9.4		%
Selected Operating Information:
Rooms	649			649			—			649			649			—
Average occupancy	69.2		%	77.5		%	(8.3	)	pts	78.0		%	79.9		%	(1.9	)	pts
ADR	$	246.09		$	231.91		6.1		%	$	305.52		$	275.67		10.8		%
RevPAR	$	170.33		$	179.70		(5.2	)	%	$	238.32		$	220.35		8.2		%
Total RevPAR	$	425.42		$	473.10		(10.1	)	%	$	573.30		$	546.68		4.9		%

FOUR SEASONS HOTEL AUSTIN
No table has been provided since we did not own the property for the entire periods presented.

FOUR SEASONS JACKSON HOLE
Selected Financial Information:
Total revenues	$	5,858		$	5,423		8.0		%	$	23,361		$	21,293		9.7		%
Property EBITDA	$	(104	)	$	(413	)	74.8		%	$	5,030		$	4,095		22.8		%
Selected Operating Information:
Rooms	124			124			—			124			124			—
Average occupancy	46.1		%	45.3		%	0.8		pts	62.3		%	60.4		%	1.9		pts
ADR	$	442.60		$	383.07		15.5		%	$	590.82		$	526.96		12.1		%
RevPAR	$	204.08		$	173.64		17.5		%	$	368.25		$	318.23		15.7		%
Total RevPAR	$	519.12		$	480.56		8.0		%	$	1,040.85		$	948.71		9.7		%



		Supplemental Financial Information
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)		Three and Six Months Ended June 30, 2015 and 2014



	Three Months Ended June 30,									Six Months Ended June 30,
	2015			2014			Change			2015			2014			Change
FOUR SEASONS RESORT SCOTTSDALE AT TROON NORTH
Selected Financial Information (This table includes financial information only for our period of ownership):
Total revenues	$	12,272		N/A			N/A			$	28,154		N/A			N/A
Property EBITDA	$	2,904		N/A			N/A			$	8,287		N/A			N/A
Selected Operating Information (This table includes statistical information only for our period of ownership. For the three months ended June 30, 2014, average occupancy was 78.5%, ADR was $338.56, RevPAR was $265.73 and Total RevPAR was $630.72. For the six months ended June 30, 2014, average occupancy was 81.6%, ADR was $389.32, RevPAR was $317.76 and Total RevPAR was $692.85.):
Rooms	210			N/A			N/A			210			N/A			N/A
Average occupancy	76.7		%	N/A			N/A			81.3		%	N/A			N/A
ADR	$	361.57		N/A			N/A			$	444.11		N/A			N/A
RevPAR	$	277.28		N/A			N/A			$	361.04		N/A			N/A
Total RevPAR	$	642.16		N/A			N/A			$	740.71		N/A			N/A

FOUR SEASONS SILICON VALLEY
Selected Financial Information:
Total revenues	$	11,017		$	9,737		13.1		%	$	20,872		$	18,323		13.9
Property EBITDA	$	3,392		$	2,741		23.8		%	$	5,848		$	4,536		28.9
Selected Operating Information:
Rooms	200			200			—			200			200			—
Average occupancy	78.4		%	75.0		%	3.4		pts	77.8		%	72.8		%	5.0
ADR	$	445.93		$	411.21		8.4		%	$	430.78		$	396.17		8.7
RevPAR	$	349.42		$	308.22		13.4		%	$	335.26		$	288.37		16.3
Total RevPAR	$	605.32		$	534.98		13.1		%	$	576.59		$	506.17		13.9

FOUR SEASONS WASHINGTON, D.C.
Selected Financial Information:
Total revenues	$	20,802		$	20,052		3.7		%	$	35,590		$	34,444		3.3		%
Property EBITDA	$	5,960		$	5,802		2.7		%	$	7,952		$	7,705		3.2		%
Selected Operating Information:
Rooms	222			222			—			222			222			—
Average occupancy	78.2		%	81.8		%	(3.6	)	pts	70.3		%	72.8		%	(2.5	)	pts
ADR	$	669.77		$	607.92		10.2		%	$	608.06		$	563.13		8.0		%
RevPAR	$	523.57		$	497.00		5.3		%	$	427.62		$	410.21		4.2		%
Total RevPAR	$	1,029.72		$	992.55		3.7		%	$	885.72		$	857.19		3.3		%

HOTEL DEL CORONADO
Selected Financial Information (Amounts below are 100% of operations, of which SHR owns 100% as of June 30, 2014.):
Total revenues	$	44,689		$	44,285		0.9		%	$	81,899		$	77,479		5.7		%
Property EBITDA	$	14,835		$	14,962		(0.8	)	%	$	28,882		$	24,521		17.8		%
Selected Operating Information:
Rooms	757			757			—			757			757			—
Average occupancy	76.5		%	68.6		%	7.9		pts	74.0		%	65.6		%	8.4		pts
ADR	$	382.80		$	386.46		(0.9	)	%	$	368.16		$	364.39		1.0		%
RevPAR	$	292.75		$	265.07		10.4		%	$	272.45		$	239.07		14.0		%
Total RevPAR	$	648.73		$	642.86		0.9		%	$	597.73		$	565.47		5.7		%



		Supplemental Financial Information
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)		Three and Six Months Ended June 30, 2015 and 2014



	Three Months Ended June 30,									Six Months Ended June 30,
	2015			2014			Change			2015			2014			Change
INTERCONTINENTAL CHICAGO
Selected Financial Information:
Total revenues	$	22,649		$	22,120		2.4		%	$	33,357		$	34,214		(2.5	)	%
Property EBITDA	$	7,062		$	7,097		(0.5	)	%	$	5,224		$	6,409		(18.5	)	%
Selected Operating Information:
Rooms	792			792			—			792			792			—
Average occupancy	85.5		%	88.1		%	(2.6	)	pts	70.7		%	75.7		%	(5.0	)	pts
ADR	$	229.72		$	215.89		6.4		%	$	197.09		$	184.70		6.7		%
RevPAR	$	196.34		$	190.14		3.3		%	$	139.31		$	139.75		(0.3	)	%
Total RevPAR	$	314.26		$	306.92		2.4		%	$	232.69		$	238.67		(2.5	)	%

INTERCONTINENTAL MIAMI
Selected Financial Information:
Total revenues	$	19,394		$	17,769		9.1		%	$	44,985		$	41,010		9.7		%
Property EBITDA	$	5,547		$	5,047		9.9		%	$	16,270		$	14,397		13.0		%
Selected Operating Information:
Rooms	641			641			—			641			641			—
Average occupancy	87.0		%	86.1		%	0.9		pts	88.3		%	89.1		%	(0.8	)	pts
ADR	$	188.59		$	182.58		3.3		%	$	232.13		$	221.14		5.0		%
RevPAR	$	163.97		$	157.11		4.4		%	$	205.01		$	197.07		4.0		%
Total RevPAR	$	332.48		$	304.63		9.1		%	$	387.73		$	353.47		9.7		%

JW MARRIOTT ESSEX HOUSE HOTEL
Selected Financial Information:
Total revenues	$	27,503		$	26,461		3.9		%	$	45,194		$	43,779		3.2		%
Property EBITDA	$	6,540		$	6,452		1.4		%	$	5,487		$	5,973		(8.1	)	%
Selected Operating Information:
Rooms	511			511			—			511			511			—
Average occupancy	85.1		%	87.8		%	(2.7	)	pts	80.2		%	81.6		%	(1.4	)	pts
ADR	$	481.01		$	463.33		3.8		%	$	418.77		$	413.07		1.4		%
RevPAR	$	409.32		$	406.84		0.6		%	$	335.76		$	337.06		(0.4	)	%
Total RevPAR	$	591.45		$	569.04		3.9		%	$	488.63		$	473.34		3.2		%

LOEWS SANTA MONICA BEACH HOTEL
Selected Financial Information:
Total revenues	$	14,663		$	14,705		(0.3	)	%	$	27,264		$	28,327		(3.8	)	%
Property EBITDA	$	4,488		$	4,755		(5.6	)	%	$	7,329		$	8,415		(12.9	)	%
Selected Operating Information:
Rooms	347			347			—			347			347			—
Average occupancy	82.7		%	86.3		%	(3.6	)	pts	80.8		%	87.4		%	(6.6	)	pts
ADR	$	378.00		$	364.63		3.7		%	$	362.92		$	352.83		2.9		%
RevPAR	$	312.71		$	314.82		(0.7	)	%	$	293.22		$	308.22		(4.9	)	%
Total RevPAR	$	464.37		$	471.98		(1.6	)	%	$	434.08		$	457.35		(5.1	)	%



		Supplemental Financial Information
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)		Three and Six Months Ended June 30, 2015 and 2014



	Three Months Ended June 30,									Six Months Ended June 30,
	2015			2014			Change			2015			2014			Change
MARRIOTT LINCOLNSHIRE RESORT
Selected Financial Information (Property EBITDA excludes a $10.4 million impairment loss related to this hotel for the three and six months ended June 30, 2015):
Total revenues	$	9,515		$	9,187		3.6		%	$	16,161		$	15,650		3.3		%
Property EBITDA	$	1,205		$	1,021		18.0		%	$	905		$	383		136.3		%
Selected Operating Information:
Rooms	389			389			—			389			389			—
Average occupancy	63.3		%	60.8		%	2.5		pts	58.9		%	55.6		%	3.3		pts
ADR	$	144.56		$	137.82		4.9		%	$	142.63		$	135.54		5.2		%
RevPAR	$	91.44		$	83.85		9.1		%	$	83.95		$	75.30		11.5		%
Total RevPAR	$	268.79		$	259.58		3.5		%	$	229.54		$	222.28		3.3		%

MONTAGE LAGUNA BEACH
Selected Financial Information (This table includes financial information only for our period of ownership):
Total revenues	$	23,445		N/A			N/A			N/A			N/A			N/A
Property EBITDA	$	5,232		N/A			N/A			N/A			N/A			N/A
Selected Operating Information (This table includes statistical information only for our period of ownership. For the six months ended June 30, 2015, average occupancy was 75.8%, ADR was $555.32, RevPAR was $420.94 and Total RevPAR was $975.93. For the three and six months ended June 30, 2014, average occupancy was 83.3% and 79.4%, respectively, ADR was $544.67 and $510.91, respectively, RevPAR was $453.59 and $407.38, respectively, and Total RevPAR was $1,050.45 and $945.39, respectively):
Rooms	249			N/A			N/A			N/A			N/A			N/A
Average occupancy	74.0		%	N/A			N/A			N/A			N/A			N/A
ADR	$	609.48		N/A			N/A			N/A			N/A			N/A
RevPAR	$	451.05		N/A			N/A			N/A			N/A			N/A
Total RevPAR	$	1,035.55		N/A			N/A			N/A			N/A			N/A

RITZ-CARLTON HALF MOON BAY
Selected Financial Information:
Total revenues	$	18,444		$	17,834		3.4		%	$	32,196		$	30,655		5.0		%
Property EBITDA	$	4,299		$	4,029		6.7		%	$	5,896		$	5,221		12.9		%
Selected Operating Information:
Rooms	261			261			—			261			261			—
Average occupancy	67.4		%	74.9		%	(7.5	)	pts	61.4		%	67.9		%	(6.5	)	pts
ADR	$	488.60		$	412.83		18.4		%	$	453.99		$	391.44		16.0		%
RevPAR	$	329.52		$	309.13		6.6		%	$	278.93		$	265.62		5.0		%
Total RevPAR	$	776.57		$	750.89		3.4		%	$	681.53		$	648.91		5.0		%

RITZ-CARLTON LAGUNA NIGUEL
Selected Financial Information:
Total revenues	$	26,034		$	25,977		0.2		%	$	50,284		$	46,131		9.0		%
Property EBITDA	$	8,932		$	8,735		2.3		%	$	16,872		$	14,256		18.4		%
Selected Operating Information:
Rooms	396			396			—			396			396			—
Average occupancy	69.6		%	71.2		%	(1.6	)	pts	72.0		%	69.3		%	2.7		pts
ADR	$	428.58		$	414.62		3.4		%	$	410.83		$	388.51		5.7		%
RevPAR	$	298.42		$	295.07		1.1		%	$	295.89		$	269.12		9.9		%
Total RevPAR	$	722.44		$	720.87		0.2		%	$	701.54		$	643.60		9.0		%



		Supplemental Financial Information
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)		Three and Six Months Ended June 30, 2015 and 2014



	Three Months Ended June 30,									Six Months Ended June 30,
	2015			2014			Change			2015			2014			Change
WESTIN ST. FRANCIS
Selected Financial Information:
Total revenues	$	41,557		$	40,818		1.8		%	$	82,053		$	74,543		10.1		%
Property EBITDA	$	12,675		$	12,046		5.2		%	$	24,595		$	18,043		36.3		%
Selected Operating Information:
Rooms	1,195			1,195			—			1,195			1,195			—
Average occupancy	92.1		%	92.1		%	—		pts	87.6		%	84.3		%	3.3		pts
ADR	$	278.28		$	260.36		6.9		%	$	278.97		$	253.44		10.1		%
RevPAR	$	256.34		$	239.82		6.9		%	$	244.37		$	213.61		14.4		%
Total RevPAR	$	386.19		$	375.36		2.9		%	$	379.36		$	344.64		10.1		%

EUROPEAN HOTEL:
MARRIOTT HAMBURG
Selected Financial Information:
Total revenues	$	5,120		$	6,281		(18.5	)	%	$	9,273		$	11,430		(18.9	)	%
Property EBITDA	$	1,321		$	1,687		(21.7	)	%	$	2,560		$	3,199		(20.0	)	%
Selected Operating Information:
Rooms	278			278			—			278			278			—
Average occupancy	84.4		%	85.8		%	(1.4	)	pts	81.7		%	84.7		%	(3.0	)	pts
ADR	$	186.26		$	218.76		(14.9	)	%	$	171.49		$	198.14		(13.5	)	%
RevPAR	$	157.15		$	187.61		(16.2	)	%	$	140.06		$	167.91		(16.6	)	%
Total RevPAR	$	202.39		$	248.27		(18.5	)	%	$	184.29		$	227.16		(18.9	)	%



		Supplemental Financial Information
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)		Three and Six Months Ended June 30, 2015 and 2014

Reconciliation of Property EBITDA to EBITDA

(in thousands)



	Three Months Ended June 30,												Six Months Ended June 30,
	2015						2014						2015					2014
Hotel	Property EBITDA			EBITDA			Property EBITDA			EBITDA			Property EBITDA		EBITDA			Property EBITDA		EBITDA
Fairmont Chicago	$	6,231		$	6,231		$	5,812		$	5,812		$	4,514	$	4,514		$	3,672	$	3,672
Fairmont Scottsdale Princess (a)	5,502			5,502			7,138			7,138			22,249		22,249			20,329		7,138
Four Seasons Hotel Austin (b)	—			1,530			—			—			—		1,530			—		—
Four Seasons Jackson Hole	(104		)	(104		)	(413		)	(413		)	5,030		5,030			4,095		4,095
Four Seasons Resort Scottsdale at Troon North (c)	2,904			2,904			—			—			8,287		8,287			—		—
Four Seasons Silicon Valley	3,392			3,392			2,741			2,741			5,848		5,848			4,536		4,536
Four Seasons Washington, D.C.	5,960			5,960			5,802			5,802			7,952		7,952			7,706		7,706
Hotel del Coronado (a)	14,835			14,835			14,962			3,759			28,882		28,882			24,521		3,759
InterContinental Chicago	7,062			7,062			7,097			7,097			5,224		5,224			6,409		6,409
InterContinental Miami	5,547			5,547			5,047			5,047			16,270		16,270			14,397		14,397
JW Marriott Essex House Hotel	6,540			6,540			6,452			6,452			5,487		5,487			5,973		5,973
Loews Santa Monica Beach Hotel	4,488			4,488			4,755			4,755			7,329		7,329			8,415		8,415
Marriott Lincolnshire Resort	1,205			1,205			1,021			1,021			905		905			383		383
Montage Laguna Beach (d)	5,232			5,232			—			—			—		8,539			—		—
Ritz-Carlton Half Moon Bay	4,299			4,299			4,029			4,029			5,896		5,896			5,221		5,221
Ritz-Carlton Laguna Niguel	8,932			8,932			8,735			8,735			16,872		16,872			14,255		14,255
Westin St. Francis	12,675			12,675			12,046			12,046			24,595		24,595			18,043		18,043
Marriott Hamburg (e)	1,321			(4		)	1,687			59			2,560		(7		)	3,199		100
	96,021			96,226			86,911			74,080			167,900		175,402			141,154		104,102
Assets Sold:
Hyatt Regency La Jolla (f)	1,244			1,244			1,396			1,396			3,597		3,597			1,587		1,587
	$	97,265		$	97,470		$	88,307		$	75,476		$	171,497	$	178,999		$	142,741	$	105,689
Adjustments:
Impairment losses				(10,401		)				—					(10,401		)			—
Corporate expenses				(6,441		)				(7,198		)			(14,709		)			(14,391		)
Interest income				16						50					117					77
Loss on early extinguishment of debt				(34,211		)				—					(34,211		)			—
Equity in earnings of unconsolidated affiliates				—						826					—					5,271
Foreign currency exchange gain (loss)				40						(8		)			(76		)			(6		)
Gain on consolidation of affiliate				—						65,349					—					143,466
Other income, net				40,465						795					40,308					1,218
Income from discontinued operations				—						604					—					159,039
Depreciation expense—discontinued operations				—						—					—					1,275
Interest expense—discontinued operations				—						—					—					1,326
Income taxes—discontinued operations				—						—					—					833
Income taxes—sale of assets				—						—					—					20,451
Noncontrolling interest in consolidated affiliates				(16,888		)				217					(13,454		)			4,258
Adjustments from consolidated affiliates				(3,209		)				(3,939		)			(7,046		)			(7,614		)
Adjustments from unconsolidated affiliates				—						3,153					—					8,443
Other adjustments				207						31					200					(130		)
EBITDA				$	67,048					$	135,356				$	139,727				$	429,205

(a)

On March 31, 2014, we acquired the remaining ownership interest in the Fairmont Scottsdale Princess hotel and consolidated the property. On June 11, 2014, we acquired the remaining ownership interest in the Hotel del Coronado and consolidated the property. EBITDA represents revenue and expenses generated by these properties subsequent to the consolidation of these properties. Prior to the acquisitions on March 31, 2014 and June 11, 2014, we accounted for these properties under the equity method of accounting. EBITDA related to our interest in these properties while they were accounted for under the equity method

of accounting is reflected in adjustments from unconsolidated affiliates. Property EBITDA represents 100% of revenue and expenses generated by these properties.


(b)	On May 12, 2015, we purchased the Four Seasons Hotel Austin. We have not included the results of this hotel in Property EBITDA for the three and six months ended June 30, 2015 and 2014 above since we did not own the property for the entire periods.


(c)	On December 9, 2014 we purchased the Four Seasons Resort Scottsdale at Troon North. We have not included the results of this hotel in Property EBITDA for the three and six months ended June 30, 2014 above since we did not own the property during those periods.


(d)	On January 29, 2015, we purchased the Montage Laguna Beach resort. We have not included the results of this hotel in Property EBITDA for the six months ended June 30, 2015 and for the three and six months ended June 30, 2014 above since we did not own the property for the entire periods.


(e)	We have a leasehold interest in and sublease this property. Therefore, EBITDA represents the lease revenue less the lease expense recorded in our statements. Property EBITDA represents the revenue less expenses generated by the property.


(f)	On May 21, 2015, we sold the Hyatt Regency La Jolla hotel. We have included the results of this hotel in Property EBITDA for our period of ownership.



		Supplemental Financial Information
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)		Three and Six Months Ended June 30, 2015 and 2014

Reconciliation of Property EBITDA to Comparable EBITDA

(in thousands)



	Three Months Ended June 30, 2015									Six Months Ended June 30, 2015
	Property EBITDA			Adjustments			Comparable EBITDA			Property EBITDA		Adjustments			Comparable EBITDA
Urban Hotels:
Fairmont Chicago	$	6,231					$	6,231		$	4,514				$	4,514
Four Seasons Hotel Austin	—			1,530			1,530			—		1,530			1,530
Four Seasons Silicon Valley	3,392						3,392			5,848					5,848
Four Seasons Washington, D.C.	5,960						5,960			7,952					7,952
InterContinental Chicago	7,062						7,062			5,224					5,224
InterContinental Miami	5,547						5,547			16,270					16,270
JW Marriott Essex House Hotel	6,540			(2,990		)	3,550			5,487		(2,356		)	3,131
Westin St. Francis	12,675						12,675			24,595					24,595
Total Urban Hotels	47,407			(1,460		)	45,947			69,890		(826		)	69,064
Resorts:
Fairmont Scottsdale Princess	5,502						5,502			22,249					22,249
Four Seasons Jackson Hole	(104		)				(104		)	5,030					5,030
Four Seasons Resort Scottsdale at Troon North	2,904						2,904			8,287					8,287
Hotel del Coronado	14,835			513			15,348			28,882		1,026			29,908
Loews Santa Monica Beach Hotel	4,488						4,488			7,329					7,329
Marriott Lincolnshire Resort	1,205						1,205			905					905
Montage Laguna Beach	5,232						5,232			—		8,539			8,539
Ritz-Carlton Half Moon Bay	4,299						4,299			5,896					5,896
Ritz-Carlton Laguna Niguel	8,932						8,932			16,872					16,872
Total Resorts	47,293			513			47,806			95,450		9,565			105,015
European Hotel:
Marriott Hamburg	1,321			(1,368		)	(47		)	2,560		(2,654		)	(94		)
Assets Sold:
Hyatt Regency La Jolla	1,244			(548		)	696			3,597		(1,586		)	2,011
	$	97,265		$	(2,863	)	$	94,402		$	171,497	$	4,499		$	175,996

	% of QTR Comparable EBITDA									% of YTD Comparable EBITDA
Urban Hotels	49					%				39				%
Resorts	51					%				60				%
Total	100					%				99				%



Total United States Urban Hotels (as of June 30, 2015) (a)
8 Properties
4,539 Rooms
	Three Months Ended June 30,									Six Months Ended June 30,
	2015			2014			Change			2015			2014			Change
ADR	$	307.31		$	289.97		6.0		%	$	295.86		$	277.93		6.5		%
Average Occupancy	84.3		%	85.3		%	(1.0	)	pts	78.0		%	78.2		%	(0.2	)	pts
RevPAR	$	259.21		$	247.40		4.8		%	$	230.72		$	217.29		6.2		%
Total RevPAR	$	428.42		$	408.64		4.8		%	$	390.05		$	366.30		6.5		%
Property EBITDA Margin	28.9		%	28.7		%	0.2		pts	24.4		%	22.7		%	1.7		pts

(a) Includes the Four Seasons Hotel Austin, including periods prior to ownership.

Total United States Resorts (as of June 30, 2015) (b)
9 Properties
3,382 Rooms
	Three Months Ended June 30,									Six Months Ended June 30,
	2015			2014			Change			2015			2014			Change
ADR	$	362.75		$	351.01		3.3		%	$	370.85		$	355.36		4.4		%
Average Occupancy	71.4		%	72.8		%	(1.4	)	pts	72.7		%	71.9		%	0.8		pts
RevPAR	$	259.08		$	255.66		1.3		%	$	269.54		$	255.34		5.6		%
Total RevPAR	$	585.05		$	582.90		0.4		%	$	605.48		$	571.08		6.0		%
Property EBITDA Margin	26.3		%	27.1		%	(0.8	)	pts	28.1		%	26.4		%	1.7		pts

(b) Includes the Four Seasons Resort Scottsdale at Troon North and Montage Laguna Beach resort, including periods prior to ownership.



		Supplemental Financial Information
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)		June 30, 2015

2015 Guidance

(in millions, except per share data)



	Year Ended December 31, 2015
Operational Guidance	Low Range		High Range
Total RevPAR growth	4.0	%	5.0	%
RevPAR growth	5.5	%	6.5	%



	Year Ended December 31, 2015
Comparable EBITDA Guidance	Low Range			High Range
Net Income Attributable to Common Shareholders	$	58.9		$	73.9
Depreciation and Amortization	160.6			160.6
Interest Expense	81.4			81.4
Income Taxes	8.1			8.1
Non-controlling Interests	0.2			0.2
Adjustments from Consolidated Affiliates	8.6			8.6
Realized Portion of Deferred Gain on Sale Leasebacks	(0.2		)	(0.2		)
Gain on Sale of Asset	(40.6		)	(40.6		)
Impairment Losses	10.4			10.4
Loss on Early Extinguishment of Debt	34.2			34.2
Hotel Acquisition Costs	1.1			1.1
Amortization of Below Market Management Agreement	2.1			2.1
Other Adjustments	0.2			0.2
Comparable EBITDA	$	325.0		$	340.0



	Year Ended December 31, 2015
Comparable FFO Guidance	Low Range			High Range
Net Income Attributable to Common Shareholders	$	58.9		$	73.9
Depreciation and Amortization	159.9			159.9
Realized Portion of Deferred Gain on Sale Leasebacks	(0.2		)	(0.2		)
Gain on Sale of Asset	(40.6		)	(40.6		)
Non-controlling Interests	0.2			0.2
Adjustments from Consolidated Affiliates	12.0			12.0
Impairment Losses	10.4			10.4
Interest Rate Swap OCI Amortization	10.4			10.4
Loss on Early Extinguishment of Debt	34.2			34.2
Amortization of Debt Discount	0.8			0.8
Amortization of Below Market Management Agreement	2.1			2.1
Hotel Acquisition Costs	1.1			1.1
Comparable FFO	$	249.2		$	264.2
Comparable FFO per diluted share	$	0.88		$	0.94

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