CHICAGO, Nov. 5, 2015 /PRNewswire/ -- Strategic
Hotels & Resorts, Inc. (NYSE: BEE) today reported results for
the third quarter ended September 30,
2015.
($ in millions,
except per share and operating metrics)
|
Third
Quarter
|
Earnings
Metrics
|
2015
|
2014
|
%
|
Total
Revenues
|
$354.4
|
$305.3
|
16.1%
|
Net income
attributable to common shareholders
|
$23.3
|
$21.0
|
10.8%
|
Net income per
diluted share
|
$0.08
|
$0.07
|
14.3%
|
Comparable funds from
operations (Comparable FFO) (a)
|
$69.4
|
$56.7
|
22.4%
|
Comparable FFO per
diluted share (a)
|
$0.25
|
$0.23
|
8.7%
|
Comparable EBITDA
(a)
|
$89.2
|
$75.2
|
18.6%
|
|
|
|
|
Same Store United
States Portfolio Operating Metrics (b)
|
|
|
|
Average Daily Rate
(ADR) (d)
|
$327.88
|
$318.25
|
3.0%
|
Occupancy
|
80.3%
|
80.1%
|
0.2 pts
|
Revenue per Available
Room (RevPAR) (d)
|
$263.35
|
$255.02
|
3.3%
|
Total RevPAR
(d)
|
$462.96
|
$448.10
|
3.3%
|
EBITDA Margins
(d)
|
27.8%
|
27.3%
|
50 bps
|
|
|
|
|
Total United
States Portfolio Operating Metrics (c)
|
|
|
|
Average Daily Rate
(ADR) (d)
|
$341.46
|
$330.81
|
3.2%
|
Occupancy
|
79.6%
|
78.9%
|
0.7 pts
|
Revenue per Available
Room (RevPAR) (d)
|
$271.77
|
$260.85
|
4.2%
|
Total
RevPAR(d)
|
$485.23
|
$465.88
|
4.2%
|
EBITDA
Margins(d)
|
27.1%
|
26.4%
|
70 bps
|
|
|
|
|
($ in millions,
except per share and operating metrics)
|
Year to
Date
|
Earnings
Metrics
|
2015
|
2014
|
%
|
Total
Revenues
|
$1,036.6
|
$776.1
|
33.6%
|
Net income
attributable to common shareholders
|
$45.8
|
$319.0
|
(85.7)%
|
Net income per
diluted share
|
$0.16
|
$1.32
|
(87.9)%
|
Comparable funds from
operations (Comparable FFO) (a)
|
$194.7
|
$117.0
|
66.4%
|
Comparable FFO per
diluted share (a)
|
$0.70
|
$0.51
|
37.3%
|
Comparable EBITDA
(a)
|
$251.7
|
$185.3
|
35.9%
|
|
|
|
|
Same Store United
States Portfolio Operating Metrics (b)
|
|
|
|
Average Daily Rate
(ADR) (d)
|
$318.19
|
$301.98
|
5.4%
|
Occupancy
|
77.1%
|
76.7%
|
0.4 pts
|
Revenue per Available
Room (RevPAR) (d)
|
$245.32
|
$231.70
|
5.9%
|
Total RevPAR
(d)
|
$457.64
|
$436.33
|
4.9%
|
EBITDA Margins
(d)
|
27.1%
|
25.6%
|
150 bps
|
|
|
|
|
Total United
States Portfolio Operating Metrics (c)
|
|
|
|
Average Daily Rate
(ADR) (d)
|
$331.77
|
$314.43
|
5.5%
|
Occupancy
|
77.0%
|
76.6%
|
0.4 pts
|
Revenue per Available
Room (RevPAR) (d)
|
$255.54
|
$240.91
|
6.1%
|
Total
RevPAR(d)
|
$483.11
|
$459.64
|
5.1%
|
EBITDA
Margins(d)
|
26.7%
|
25.2%
|
150 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").
|
"We are pleased to report another solid quarter of operating
results which translated into attractive growth in our key
financial metrics. Looking forward, we are also pleased to report
continued strong group pace into 2016," commented Raymond L. "Rip"
Gellein, Chairman and Chief Executive Officer of Strategic Hotels
& Resorts. "Importantly, we continue to make progress
towards closing our previously announced merger with Blackstone," summarized Gellein.
Third Quarter Highlights
- Total consolidated revenues were $354.4
million in the third quarter of 2015, a 16.1 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.
- Net income attributable to common shareholders was $23.3 million, or $0.08 per diluted share, in the third quarter of
2015, compared with $21.0 million, or
$0.07 per diluted share, in the third
quarter of 2014.
- Comparable FFO was $0.25 per
diluted share in the third quarter of 2015, compared with
$0.23 per diluted share in the prior
year period, an 8.7 percent increase over the prior year
period.
- Comparable EBITDA was $89.2 million in the third quarter of 2015,
compared with $75.2 million in the
prior year period, an 18.6 percent increase between periods as a
result of the Company's acquisition activity and same store
growth.
- Same Store United States portfolio RevPAR increased 3.3 percent
in the third quarter of 2015, driven by a 3.0 percent increase in
ADR and a 0.2 percentage point increase in occupancy compared to
the third quarter of 2014. Total RevPAR increased 3.3 percent
between periods, with non-rooms revenue increasing 3.4 percent
between periods.
- Total United States portfolio
RevPAR increased 4.2 percent in the third quarter of 2015, driven
by a 3.2 percent increase in ADR and a 0.7 percentage point
increase in occupancy compared to the third quarter of 2014.
Total RevPAR increased 4.2 percent between periods, with non-rooms
revenue increasing 4.1 percent between periods.
- Group occupied room nights in the Total United States portfolio
decreased 3.3 percent in the third quarter 2015 while transient
occupied room nights increased 3.8 percent compared to the third
quarter of 2014. Group ADR increased 4.0 percent and
transient ADR increased 1.8 percent compared to the third quarter
of 2014.
- Same Store United States and Total United States portfolio
EBITDA margins expanded 50 basis points and 70 basis points,
respectively, in the third quarter of 2015, compared to the third
quarter of 2014. 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 $1,036.6 million for the nine month period ended
September 30, 2015, a 33.6 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.
- Comparable net income attributable to common shareholders was
$45.8 million, or $0.16 per diluted share for the nine month period
ended September 30, 2015, compared
with $319.0 million, or $1.32 per diluted share, for the nine month
period ended September 30,
2014. The year-over-year decrease in net income was primarily
the result of 2014 gains on sales of assets totaling $156.5 million, or $0.66 per diluted share and one-time gains of
$143.5 million, or $0.60 per diluted share related to the
consolidation of the Fairmont Scottsdale Princess resort and the
Hotel del Coronado recorded in 2014.
- Comparable FFO was $0.70 per
diluted share in the nine month period ended September 30, 2015, compared with $0.51 per diluted share in the nine month period
ended September 30, 2014, a 37.3
percent increase over the prior year period as a result of the
Company's acquisition and financing activities.
- Comparable EBITDA was $251.7 million for the nine month period
ended September 30, 2015 compared
with $185.3 million for the nine
month period ended September 30,
2014, a 35.9 percent increase between periods as a result of
the Company's acquisition activity and same store growth.
Transaction Activity
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 joint venture partner,
affiliates of KSL Capital Partners, LLC ("KSL"), exercised a
contractual put option of their equity interests in the asset and
the Company issued 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.
Merger Agreement
On September 8, 2015, the Company
announced that it entered into a definitive agreement (the "Merger
Agreement") with affiliates of Blackstone Real Estate Partners VIII
L.P., under which Blackstone would
acquire all outstanding shares of common stock of Strategic Hotels
& Resorts, Inc. for $14.25 per
share in cash, and all of the outstanding membership units of the
Company's subsidiary, Strategic Hotels Funding, L.L.C., not held by
the Company, for $14.25 per unit in
cash (the "Mergers").
2015 Guidance
Management has suspended the issuance of earnings guidance in
light of the Company entering into a definitive merger agreement
with affiliates of Blackstone Real Estate Partners VIII L.P.
Portfolio Definitions
Same Store United States portfolio hotel comparisons for the
third quarter of 2015 are derived from the Company's hotel
portfolio at September 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.
Total United States portfolio
hotel comparisons for the third quarter of 2015 are derived from
the Company's hotel portfolio as of September 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.
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.
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. The Company currently has
ownership interests in 17 properties with an aggregate of 7,921
rooms and 847,000 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.
Forward Looking Statements
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 failure to satisfy conditions to
completion of the mergers described above (the "Mergers"),
including receipt of stockholder approval; the failure of the
Mergers to close for any other reason; the occurrence of any
change, effect, event, circumstance, occurrence or state of facts
that could give rise to the termination of the merger agreement
entered into with affiliates of Blackstone Real Estate Partners
VIII L.P. (the "Merger Agreement"); the outcome of the legal
proceedings that have been, or may be, instituted against the
Company and others following the announcement of the Company
entering into the Merger Agreement; risks that the proposed Mergers
disrupt current plans and operations including potential
difficulties in relationships with employees; the amounts of the
costs, fees, expenses and charges relating to the Mergers; 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 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.
Additional Information Regarding the Transaction and Where to
Find It
This press release does not constitute an offer to sell or
the solicitation of an offer to buy the Company's securities or the
solicitation of any vote or approval. The proposed merger of
the Company involving BRE Diamond Hotel Holdings LLC, BRE Diamond
Hotel LLC, BRE Diamond Hotel Acquisition LLC, the Company and
Strategic Hotels Funding L.L.C. will be submitted to the
stockholders of the Company for their consideration at a special
meeting of stockholders of the Company on December 8, 2015, at 10:00
a.m. Central Time. In connection therewith, the Company has
filed and will continue to file relevant materials with the
Securities and Exchange Commission (the "SEC"), including a
definitive proxy statement that was filed with the SEC on
October 19, 2015, and was first
mailed to stockholders of the Company on or about October 26, 2015. BEFORE MAKING ANY VOTING
OR ANY INVESTMENT DECISION, INVESTORS AND SECURITY HOLDERS ARE
URGED TO READ THE DEFINITIVE PROXY STATEMENT REGARDING THE PROPOSED
TRANSACTION AND ANY OTHER RELEVANT DOCUMENTS FILED OR TO BE FILED
WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY AS THEY BECOME
AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE
PROPOSED TRANSACTION. Investors and security holders may obtain
free copies of the definitive proxy statement, any amendments or
supplements thereto and other documents containing important
information about the Company, as such documents are filed with the
SEC, through the website maintained by the SEC at www.sec.gov.
Copies of the documents filed with the SEC by the Company will be
available free of charge on the Company's website at
www.strategichotels.com under the heading "Financial Information"
within the "Investor Relations" portion of the Company's website.
Stockholders of the Company may also obtain a free copy of the
definitive proxy statement and the filings with the SEC
incorporated by reference in the proxy statement by contacting the
Company's Investor Relations Department at 312-658-5000.
Participants in the Solicitation
The Company and its directors, executive officers and other
members of management and employees may be deemed to be
participants in the solicitation of proxies in connection with the
proposed transaction. Information about the directors and executive
officers of the Company is set forth in its proxy statement for its
2015 annual meeting of stockholders, which was filed with the SEC
on April 10, 2015, its annual report on Form 10-K for the
fiscal year ended December 31, 2014, which was filed with the
SEC on February 24, 2015, and in subsequent documents filed
with the SEC, each of which can be obtained free of charge from the
sources indicated above. Other information regarding the
participants in the proxy solicitation of the stockholders of the
Company and a description of their direct and indirect interests,
by security holdings or otherwise, are contained in the definitive
proxy statement and other relevant materials filed with the
SEC.
Strategic
Hotels & Resorts, Inc. and Subsidiaries
(SHR)
|
|
Consolidated
Statements of Operations
|
(in thousands,
except per share data)
|
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Revenues:
|
|
|
|
|
|
|
|
|
Rooms
|
|
$
|
198,114
|
|
|
$
|
176,133
|
|
|
$
|
547,355
|
|
|
$
|
428,107
|
|
Food and
beverage
|
|
115,296
|
|
|
96,642
|
|
|
373,288
|
|
|
266,687
|
|
Other hotel operating
revenue
|
|
40,346
|
|
|
31,224
|
|
|
113,242
|
|
|
77,405
|
|
Lease
revenue
|
|
678
|
|
|
1,264
|
|
|
2,722
|
|
|
3,882
|
|
Total
revenues
|
|
354,434
|
|
|
305,263
|
|
|
1,036,607
|
|
|
776,081
|
|
Operating Costs
and Expenses:
|
|
|
|
|
|
|
|
|
Rooms
|
|
52,968
|
|
|
48,197
|
|
|
151,905
|
|
|
123,172
|
|
Food and
beverage
|
|
83,412
|
|
|
70,965
|
|
|
254,731
|
|
|
192,645
|
|
Other departmental
expenses
|
|
89,068
|
|
|
74,640
|
|
|
260,418
|
|
|
194,457
|
|
Management
fees
|
|
11,578
|
|
|
9,970
|
|
|
35,440
|
|
|
24,989
|
|
Other hotel
expenses
|
|
21,688
|
|
|
17,998
|
|
|
57,143
|
|
|
49,248
|
|
Lease
expense
|
|
682
|
|
|
1,215
|
|
|
2,733
|
|
|
3,733
|
|
Depreciation and
amortization
|
|
39,633
|
|
|
32,932
|
|
|
117,628
|
|
|
83,195
|
|
Impairment
losses
|
|
2,325
|
|
|
—
|
|
|
12,726
|
|
|
—
|
|
Corporate
expenses
|
|
10,709
|
|
|
5,405
|
|
|
25,418
|
|
|
19,796
|
|
Total operating costs
and expenses
|
|
312,063
|
|
|
261,322
|
|
|
918,142
|
|
|
691,235
|
|
Operating
income
|
|
42,371
|
|
|
43,941
|
|
|
118,465
|
|
|
84,846
|
|
Interest
expense
|
|
(18,575)
|
|
|
(21,844)
|
|
|
(62,069)
|
|
|
(59,705)
|
|
Interest
income
|
|
3
|
|
|
46
|
|
|
120
|
|
|
123
|
|
Loss on early
extinguishment of debt
|
|
—
|
|
|
(609)
|
|
|
(34,211)
|
|
|
(609)
|
|
Equity in (losses)
earnings of unconsolidated affiliates
|
|
—
|
|
|
(4)
|
|
|
—
|
|
|
5,267
|
|
Foreign currency
exchange gain (loss)
|
|
4
|
|
|
(69)
|
|
|
(72)
|
|
|
(75)
|
|
(Loss) gain on
consolidation of affiliates
|
|
—
|
|
|
(15)
|
|
|
—
|
|
|
143,451
|
|
Other income
(expenses), net
|
|
2,746
|
|
|
(136)
|
|
|
43,054
|
|
|
1,082
|
|
Income before income
taxes and discontinued operations
|
|
26,549
|
|
|
21,310
|
|
|
65,287
|
|
|
174,380
|
|
Income tax
expense
|
|
(3,857)
|
|
|
(370)
|
|
|
(6,528)
|
|
|
(616)
|
|
Income from
continuing operations
|
|
22,692
|
|
|
20,940
|
|
|
58,759
|
|
|
173,764
|
|
Income from
discontinued operations, net of tax
|
|
—
|
|
|
63
|
|
|
—
|
|
|
159,102
|
|
Net
Income
|
|
22,692
|
|
|
21,003
|
|
|
58,759
|
|
|
332,866
|
|
Net income
attributable to the noncontrolling interests in SHR's operating
partnership
|
|
(65)
|
|
|
(67)
|
|
|
(169)
|
|
|
(1,197)
|
|
Net loss (income)
attributable to the noncontrolling interests in consolidated
affiliates
|
|
634
|
|
|
1,854
|
|
|
(12,820)
|
|
|
6,112
|
|
Net Income
Attributable to SHR
|
|
23,261
|
|
|
22,790
|
|
|
45,770
|
|
|
337,781
|
|
Preferred shareholder
dividends
|
|
—
|
|
|
(1,802)
|
|
|
—
|
|
|
(18,795)
|
|
Net Income
Attributable to SHR Common Shareholders
|
|
$
|
23,261
|
|
|
$
|
20,988
|
|
|
$
|
45,770
|
|
|
$
|
318,986
|
|
Basic Income Per
Common Share:
|
|
|
|
|
|
|
|
|
Income from
continuing operations attributable to SHR common
shareholders
|
|
$
|
0.08
|
|
|
$
|
0.08
|
|
|
$
|
0.17
|
|
|
$
|
0.71
|
|
Income from
discontinued operations attributable to SHR common
shareholders
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.70
|
|
Net income
attributable to SHR common shareholders
|
|
$
|
0.08
|
|
|
$
|
0.08
|
|
|
$
|
0.17
|
|
|
$
|
1.41
|
|
Weighted average
shares of common stock outstanding
|
|
279,579
|
|
|
248,509
|
|
|
276,580
|
|
|
225,932
|
|
Diluted Income Per
Common Share:
|
|
|
|
|
|
|
|
|
Income from
continuing operations attributable to SHR common
shareholders
|
|
$
|
0.08
|
|
|
$
|
0.07
|
|
|
$
|
0.16
|
|
|
$
|
0.65
|
|
Income from
discontinued operations attributable to SHR common
shareholders
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.67
|
|
Net income
attributable to SHR common shareholders
|
|
$
|
0.08
|
|
|
$
|
0.07
|
|
|
$
|
0.16
|
|
|
$
|
1.32
|
|
Weighted average
shares of common stock outstanding
|
|
282,659
|
|
|
260,257
|
|
|
278,583
|
|
|
237,680
|
|
Strategic
Hotels & Resorts, Inc. and Subsidiaries
(SHR)
|
|
Consolidated
Balance Sheets
|
(in thousands,
except share data)
|
|
|
|
September 30,
2015
|
|
December 31,
2014
|
Assets
|
|
|
|
|
Investment in hotel
properties, net
|
|
$
|
3,248,230
|
|
|
$
|
2,828,400
|
|
Goodwill
|
|
21,629
|
|
|
38,128
|
|
Intangible assets,
net of accumulated amortization of $14,217 and $7,288
|
|
91,502
|
|
|
94,324
|
|
Assets held for
sale
|
|
24,674
|
|
|
—
|
|
Investment in
unconsolidated affiliates
|
|
21,010
|
|
|
22,850
|
|
Cash and cash
equivalents
|
|
128,000
|
|
|
442,613
|
|
Restricted cash and
cash equivalents
|
|
77,657
|
|
|
81,510
|
|
Accounts receivable,
net of allowance for doubtful accounts of $563 and $492
|
|
68,414
|
|
|
51,382
|
|
Deferred financing
costs, net of accumulated amortization of $9,206 and
$7,814
|
|
13,873
|
|
|
11,440
|
|
Deferred tax
assets
|
|
769
|
|
|
1,729
|
|
Prepaid expenses and
other assets
|
|
49,164
|
|
|
46,781
|
|
Total
assets
|
|
$
|
3,744,922
|
|
|
$
|
3,619,157
|
|
Liabilities,
Noncontrolling Interests and Equity
|
|
|
|
|
Liabilities:
|
|
|
|
|
Mortgages payable,
net of discount
|
|
$
|
1,460,206
|
|
|
$
|
1,705,778
|
|
Credit facility,
including an unsecured term loan of $300,000 and $0
|
|
302,000
|
|
|
—
|
|
Liabilities of assets
held for sale
|
|
6,499
|
|
|
—
|
|
Accounts payable and
accrued expenses
|
|
255,645
|
|
|
224,505
|
|
Preferred stock
redemption liability
|
|
—
|
|
|
90,384
|
|
Distributions
payable
|
|
—
|
|
|
104
|
|
Deferred tax
liabilities
|
|
46,117
|
|
|
46,137
|
|
Total
liabilities
|
|
2,070,467
|
|
|
2,066,908
|
|
Commitments and
contingencies
|
|
|
|
|
Noncontrolling
interests in SHR's operating partnership
|
|
10,944
|
|
|
10,500
|
|
Equity:
|
|
|
|
|
SHR's shareholders'
equity:
|
|
|
|
|
Common stock ($0.01
par value per share; 350,000,000 shares of common stock authorized;
282,090,156 and 267,435,799 shares of common stock issued and
outstanding)
|
|
2,821
|
|
|
2,674
|
|
Additional paid-in
capital
|
|
2,508,756
|
|
|
2,348,284
|
|
Accumulated
deficit
|
|
(844,699)
|
|
|
(890,469)
|
|
Accumulated other
comprehensive loss
|
|
(5,131)
|
|
|
(13,032)
|
|
Total SHR's
shareholders' equity
|
|
1,661,747
|
|
|
1,447,457
|
|
Noncontrolling
interests in consolidated affiliates
|
|
1,764
|
|
|
94,292
|
|
Total
equity
|
|
1,663,511
|
|
|
1,541,749
|
|
Total liabilities,
noncontrolling interests and equity
|
|
$
|
3,744,922
|
|
|
$
|
3,619,157
|
|
Strategic
Hotels & Resorts, Inc. and Subsidiaries
(SHR)
|
|
Financial
Highlights
|
|
Supplemental
Financial Data
|
(in thousands,
except per share information)
|
|
|
|
September 30,
2015
|
|
Capitalization
|
|
|
|
Shares of common
stock outstanding
|
|
282,090
|
|
|
Operating partnership
units outstanding
|
|
794
|
|
|
Restricted stock
units outstanding
|
|
1,291
|
|
|
Combined shares and
units outstanding
|
|
284,175
|
|
|
Common stock price at
end of period
|
|
$
|
13.79
|
|
|
Common equity
capitalization
|
|
$
|
3,918,773
|
|
|
Debt
|
|
1,763,147
|
|
|
Cash and cash
equivalents
|
|
(128,000)
|
|
|
Total enterprise
value
|
|
$
|
5,553,920
|
|
|
Net Debt / Total
Enterprise Value
|
|
29.4
|
%
|
|
Common Equity / Total
Enterprise Value
|
|
70.6
|
%
|
|
Strategic Hotels & Resorts, Inc. and
Subsidiaries (SHR)
Disposition of Hotel Properties
Effective January 1, 2015, we
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 our results of operations will qualify as
discontinued operations.
Asset Held for Sale
On August 19, 2015, we entered
into an agreement with an unaffiliated third party to sell the
Marriott Lincolnshire Resort for $20,650,000. The transaction, which is
subject to customary closing conditions, is expected to close in
the fourth quarter of 2015. The hotel's assets and
liabilities have been classified as held for sale on the
accompanying consolidated balance sheet as of September 30, 2015. The disposition of the
Marriott Lincolnshire Resort will not represent a strategic shift
that will have a major effect on our results of operations;
therefore, the hotel's results of operations are included in
continuing operations for all periods presented.
2015 Disposition
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 $40,594,000 gain on the sale was recorded in
other income, net in the condensed consolidated statements of
operations for the three and nine months ended September 30, 2015. The portion of the gain
attributable to the joint venture partner was $16,640,000, which is reflected in net loss
(income) attributable to the noncontrolling interests in
consolidated affiliates in the condensed consolidated statements of
operations for the three and nine months ended September 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
Prior to January 1, 2015, and the
adoption of the new accounting guidance that changed the criteria
for reporting discontinued operations, 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.
|
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
nine months ended September 30, 2014 (in thousands):
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 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
|
|
63
|
|
|
156,492
|
|
Income from
discontinued operations, net of tax
|
|
$
|
63
|
|
|
$
|
159,102
|
|
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.
|
|
|
|
Nine Months Ended
September 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
September 30,
|
|
Nine Months Ended
September 30,
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Marriott
Hamburg:
|
|
|
|
|
|
|
|
|
Property
EBITDA
|
|
$
|
920
|
|
|
$
|
1,757
|
|
|
$
|
3,480
|
|
|
$
|
4,956
|
|
Revenue
(a)
|
|
$
|
678
|
|
|
$
|
1,264
|
|
|
$
|
2,722
|
|
|
$
|
3,882
|
|
|
|
|
|
|
|
|
|
|
Lease
expense
|
|
(682)
|
|
|
(1,215)
|
|
|
(2,733)
|
|
|
(3,733)
|
|
Less: Deferred gain
on sale-leaseback
|
|
(29)
|
|
|
(52)
|
|
|
(116)
|
|
|
(159)
|
|
Adjusted lease
expense
|
|
(711)
|
|
|
(1,267)
|
|
|
(2,849)
|
|
|
(3,892)
|
|
|
|
|
|
|
|
|
|
|
Less: Gain on sale of
assets (b)
|
|
(2,680)
|
|
|
—
|
|
|
(2,680)
|
|
|
—
|
|
Comparable EBITDA
contribution from leasehold
|
|
$
|
(2,713)
|
|
|
$
|
(3)
|
|
|
$
|
(2,807)
|
|
|
$
|
(10)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Security Deposit
(c):
|
|
|
|
|
|
|
|
|
|
September 30,
2015
|
|
December 31,
2014
|
Marriott
Hamburg
|
|
|
|
|
|
|
|
|
|
$
|
2,124
|
|
|
$
|
2,299
|
|
|
|
(a)
|
For the three and
nine months ended September 30, 2015 and 2014, Revenue for the
Marriott Hamburg hotel represents lease revenue.
|
(b)
|
Effective September
1, 2015, we transferred our leasehold interest in the Marriott
Hamburg hotel to an unaffiliated third party and were released from
all of our obligations under the lease arrangements. We recognized
the previously deferred gain of $2,680,000 during the three and
nine months ended September 30, 2015 in other income (expenses),
net, in the condensed consolidated statements of
operations.
|
(c)
|
The security deposit
is recorded in prepaid expenses and other assets on the
consolidated balance sheets and will be released back to us in four
equal installments over four years beginning on March 1,
2017.
|
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. 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
September 30,
|
|
Nine Months Ended
September 30,
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Net income
attributable to SHR common shareholders
|
|
$
|
23,261
|
|
|
$
|
20,988
|
|
|
$
|
45,770
|
|
|
$
|
318,986
|
|
Depreciation and
amortization—continuing operations
|
|
39,633
|
|
|
32,932
|
|
|
117,628
|
|
|
83,195
|
|
Depreciation and
amortization—discontinued operations
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,275
|
|
Interest
expense—continuing operations
|
|
18,575
|
|
|
21,844
|
|
|
62,069
|
|
|
59,705
|
|
Interest
expense—discontinued operations
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,326
|
|
Income
taxes—continuing operations
|
|
3,857
|
|
|
370
|
|
|
6,528
|
|
|
616
|
|
Income
taxes—discontinued operations
|
|
—
|
|
|
—
|
|
|
—
|
|
|
833
|
|
Income taxes—sale of
assets
|
|
—
|
|
|
—
|
|
|
—
|
|
|
20,451
|
|
Net income
attributable to noncontrolling interests in SHR's operating
partnership (a)
|
|
65
|
|
|
67
|
|
|
169
|
|
|
1,197
|
|
Adjustments
attributable to noncontrolling interests in consolidated affiliates
(b)
|
|
(732)
|
|
|
(4,070)
|
|
|
(7,778)
|
|
|
(11,684)
|
|
Adjustments
attributable to unconsolidated affiliates (c)
|
|
—
|
|
|
(11)
|
|
|
—
|
|
|
8,432
|
|
Preferred shareholder
dividends
|
|
—
|
|
|
1,802
|
|
|
—
|
|
|
18,795
|
|
EBITDA
|
|
84,659
|
|
|
73,922
|
|
|
224,386
|
|
|
503,127
|
|
Realized portion of
deferred gain on sale-leaseback
|
|
(29)
|
|
|
(52)
|
|
|
(116)
|
|
|
(159)
|
|
(Gain) loss on sale
of assets—continuing operations
|
|
(2,661)
|
|
|
38
|
|
|
(43,274)
|
|
|
(729)
|
|
Gain on sale of
assets—discontinued operations
|
|
—
|
|
|
(63)
|
|
|
—
|
|
|
(176,943)
|
|
Loss (gain) on
consolidation of affiliates
|
|
—
|
|
|
15
|
|
|
—
|
|
|
(143,451)
|
|
Impairment
losses
|
|
2,325
|
|
|
—
|
|
|
12,726
|
|
|
—
|
|
Loss on early
extinguishment of debt—continuing operations
|
|
—
|
|
|
609
|
|
|
34,211
|
|
|
609
|
|
Loss on early
extinguishment of debt—discontinued operations
|
|
—
|
|
|
—
|
|
|
—
|
|
|
272
|
|
Foreign currency
exchange (gain) loss—continuing operations
|
|
(4)
|
|
|
69
|
|
|
72
|
|
|
75
|
|
Foreign currency
exchange gain—discontinued operations
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(32)
|
|
Hotel acquisition
costs
|
|
343
|
|
|
—
|
|
|
1,409
|
|
|
—
|
|
Merger-related
costs
|
|
4,018
|
|
|
—
|
|
|
4,018
|
|
|
—
|
|
Non-cash interest
rate derivative activity
|
|
6
|
|
|
127
|
|
|
152
|
|
|
127
|
|
Amortization of below
market hotel management agreement
|
|
513
|
|
|
513
|
|
|
1,539
|
|
|
621
|
|
Activist shareholder
costs
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,637
|
|
Adjustments
attributable to noncontrolling interests in consolidated affiliates
(d)
|
|
(8)
|
|
|
(5)
|
|
|
16,551
|
|
|
104
|
|
Comparable
EBITDA
|
|
$
|
89,162
|
|
|
$
|
75,173
|
|
|
$
|
251,674
|
|
|
$
|
185,258
|
|
|
|
(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
September 30,
|
|
Nine Months Ended
September 30,
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Net income
attributable to SHR common shareholders
|
|
$
|
23,261
|
|
|
$
|
20,988
|
|
|
$
|
45,770
|
|
|
$
|
318,986
|
|
Depreciation and
amortization—continuing operations
|
|
39,633
|
|
|
32,932
|
|
|
117,628
|
|
|
83,195
|
|
Depreciation and
amortization—discontinued operations
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,275
|
|
Corporate
depreciation
|
|
(126)
|
|
|
(124)
|
|
|
(381)
|
|
|
(370)
|
|
(Gain) loss on sale
of assets—continuing operations
|
|
(2,661)
|
|
|
38
|
|
|
(43,274)
|
|
|
(729)
|
|
Gain on sale of
assets, net of tax—discontinued operations
|
|
—
|
|
|
(63)
|
|
|
—
|
|
|
(156,492)
|
|
Loss (gain) on
consolidation of affiliates
|
|
—
|
|
|
15
|
|
|
—
|
|
|
(143,451)
|
|
Impairment
losses
|
|
2,325
|
|
|
—
|
|
|
12,726
|
|
|
—
|
|
Realized portion of
deferred gain on sale-leaseback
|
|
(29)
|
|
|
(52)
|
|
|
(116)
|
|
|
(159)
|
|
Adjustments
attributable to noncontrolling interests in SHR's operating
partnership (a)
|
|
(113)
|
|
|
(105)
|
|
|
(339)
|
|
|
(298)
|
|
Adjustments
attributable to noncontrolling interests in consolidated affiliates
(b)
|
|
(436)
|
|
|
(2,166)
|
|
|
12,122
|
|
|
(5,972)
|
|
Adjustments
attributable to unconsolidated affiliates (c)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,077
|
|
FFO attributable to
SHR common shareholders
|
|
61,854
|
|
|
51,463
|
|
|
144,136
|
|
|
101,062
|
|
Adjustments
attributable to noncontrolling interests in SHR's operating
partnership - other (d)
|
|
178
|
|
|
172
|
|
|
508
|
|
|
1,495
|
|
FFO—Fully
Diluted
|
|
62,032
|
|
|
51,635
|
|
|
144,644
|
|
|
102,557
|
|
Non-cash interest
rate derivative activity
|
|
2,465
|
|
|
3,241
|
|
|
8,183
|
|
|
3,131
|
|
Loss on early
extinguishment of debt—continuing operations
|
|
—
|
|
|
609
|
|
|
34,211
|
|
|
609
|
|
Loss on early
extinguishment of debt—discontinued operations
|
|
—
|
|
|
—
|
|
|
—
|
|
|
272
|
|
Foreign currency
exchange (gain) loss—continuing operations (a)
|
|
(4)
|
|
|
69
|
|
|
72
|
|
|
75
|
|
Foreign currency
exchange gain—discontinued operations (a)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(32)
|
|
Amortization of debt
discount
|
|
40
|
|
|
623
|
|
|
730
|
|
|
1,246
|
|
Amortization of below
market hotel management agreement
|
|
513
|
|
|
513
|
|
|
1,539
|
|
|
621
|
|
Hotel acquisition
costs
|
|
343
|
|
|
—
|
|
|
1,409
|
|
|
—
|
|
Costs related to the
Mergers
|
|
4,018
|
|
|
—
|
|
|
4,018
|
|
|
—
|
|
Activist shareholder
costs
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,637
|
|
Excess of redemption
liability over carrying amount of redeemed preferred
stock
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,912
|
|
Adjustments
attributable to noncontrolling interests in consolidated affiliates
(e)
|
|
—
|
|
|
—
|
|
|
(90)
|
|
|
—
|
|
Comparable
FFO
|
|
$
|
69,407
|
|
|
$
|
56,690
|
|
|
$
|
194,716
|
|
|
$
|
117,028
|
|
Comparable FFO per
fully diluted share
|
|
$
|
0.25
|
|
|
$
|
0.23
|
|
|
$
|
0.70
|
|
|
$
|
0.51
|
|
Weighted average
diluted shares (f)
|
|
282,664
|
|
|
251,862
|
|
|
279,739
|
|
|
229,364
|
|
|
|
(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 for the
three and nine months ended September 30, 2014. On July 24, 2015,
our joint venture partner exercised its put option. In
connection with the exercise of the put option, and in accordance
with the terms of the joint venture agreements, we issued an
aggregate of 6,595,449 shares of our common stock to our joint
venture partner, which are included in the weighted average diluted
shares outstanding for the three and nine months ended September
30, 2015.
|
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
|
|
2,000
|
|
|
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
|
|
141,147
|
|
|
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
|
|
|
|
|
|
|
1,763,147
|
|
|
|
Unamortized discount
(d)
|
|
|
|
|
|
(941)
|
|
|
|
|
|
|
|
|
|
$
|
1,762,206
|
|
|
|
(a)
|
Spread over LIBOR
(0.19% at September 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.
|
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)
|
|
$
|
655
|
|
2016
|
|
2,040
|
|
2017
|
|
3,066
|
|
2018
|
|
480,033
|
|
2019
|
|
125,276
|
|
Thereafter
|
|
1,152,077
|
|
|
|
1,763,147
|
|
Unamortized
discount
|
|
(941)
|
|
|
|
$
|
1,762,206
|
|
|
|
|
Percent of fixed rate
debt
|
|
23.0
|
%
|
Weighted average
interest rate (f)
|
|
3.31
|
%
|
Weighted average
maturity of fixed rate debt (debt with maturity of greater than one
year)
|
|
6.72
|
|
|
|
(f)
|
Excludes the
amortization of deferred financing costs.
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/strategic-hotels--resorts-reports-third-quarter-2015-financial-results-300172913.html
SOURCE Strategic Hotels & Resorts, Inc.