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) November 5, 2015
Strategic Hotels & Resorts, Inc.
(Exact name of registrant as specified in its charter)
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Maryland | | 001-32223 | | 33-1082757 |
(State or other jurisdiction of incorporation) | | (Commission File Number) | | (I.R.S. Employer Identification No.) |
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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.):
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¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
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Item 2.02 | Results of Operations and Financial Condition. |
On November 5, 2015, Strategic Hotels & Resorts, Inc. issued a press release reporting the financial results for its fiscal quarter ended September 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.
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Item 9.01 | Financial Statements and Exhibits. |
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Exhibit Number | | Description |
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99.1 |
| | Press Release dated November 5, 2015 |
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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.
November 5, 2015
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| STRATEGIC HOTELS & RESORTS, INC. |
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By: | | | /s/ Diane M. Morefield |
| Name: | | Diane M. Morefield |
| Title: | | Executive Vice President and Chief Financial Officer |
Exhibit 99.1
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| 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
THURSDAY, NOVEMBER 5, 2015
STRATEGIC HOTELS & RESORTS REPORTS THIRD QUARTER 2015
FINANCIAL RESULTS
CHICAGO - November 5, 2015 - 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 |
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($ 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 |
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(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. |
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(b) | Operating statistics reflect results from the Company’s Same Store United States portfolio (see portfolio definitions later in this press release). |
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(c) | Operating statistics reflect results from the Company's Total United States portfolio (see portfolio definitions later in this press release). |
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(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 and expect the transaction to close shortly after our special meeting of stockholders on December 8th," summarized Gellein.
Third Quarter Highlights
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▪ | 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. |
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▪ | 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. |
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▪ | 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. |
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▪ | 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. |
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▪ | 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. |
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▪ | 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. |
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▪ | 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. |
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▪ | 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
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▪ | 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. |
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▪ | 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. |
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▪ | 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. |
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▪ | 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)
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| | | | | | | | | | | | | | | | |
| | 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 |
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Lease revenue | | 678 |
| | 1,264 |
| | 2,722 |
| | 3,882 |
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Total revenues | | 354,434 |
| | 305,263 |
| | 1,036,607 |
| | 776,081 |
|
Operating Costs and Expenses: | | | | | | | | |
Rooms | | 52,968 |
| | 48,197 |
| | 151,905 |
| | 123,172 |
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Food and beverage | | 83,412 |
| | 70,965 |
| | 254,731 |
| | 192,645 |
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Other departmental expenses | | 89,068 |
| | 74,640 |
| | 260,418 |
| | 194,457 |
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Management fees | | 11,578 |
| | 9,970 |
| | 35,440 |
| | 24,989 |
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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 |
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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.
Exhibit 99.2
Strategic Hotels & Resorts, Inc.
Supplemental Financial Information
September 30, 2015
|
| | |
| | |
| | Supplemental Financial Information |
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR) | | September 30, 2015 |
TABLE OF CONTENTS
|
| |
| |
| PAGE |
CORPORATE INFORMATION | |
The Company | |
Board of Directors | |
Officers | |
Equity Research Coverage | |
| |
FINANCIAL HIGHLIGHTS | |
Supplemental Financial Data | |
Consolidated Statements of Operations | |
Consolidated Balance Sheets | |
Disposition of Hotel Properties | |
Investments in Unconsolidated Affiliates | |
Leasehold Information | |
Non-GAAP Financial Measures | |
Reconciliation of Net Income Attributable to SHR Common Shareholders to EBITDA and Comparable EBITDA | |
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 | |
Debt Summary | |
| |
PORTFOLIO DATA | |
Portfolio at September 30, 2015 | |
Seasonality | |
Operating Statistics | |
Selected Financial and Operating Information by Property | |
Reconciliation of Property EBITDA to EBITDA | |
Reconciliation of Property EBITDA to Comparable EBITDA | |
|
| | |
| | |
| | Supplemental Financial Information |
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR) | | September 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 a quality portfolio of upper upscale and luxury hotels and resorts primarily in desirable United States locations. Our portfolio is currently made up of 17 properties totaling 7,921 rooms. We own 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 currently traded on the New York Stock Exchange under the symbol BEE.
On September 4, 2015, the Company entered into an Agreement and Plan of Merger with affiliates of Blackstone Real Estate Partners VIII L.P (the Merger). The Merger is expected to close in the fourth quarter of 2015, although closing is subject to various closing conditions, including the approval by Strategic Hotels & Resort, Inc.'s common stockholders, and therefore, we cannot provide any assurance that the Merger will close in a timely manner or at all. Our ability to execute on our business plan could be adversely impacted by operating restrictions under the terms of the Merger, including restrictions on acquiring new assets and raising additional capital. We have incurred and will continue to incur a variety of merger-related costs, which while not recurring in nature, will not be recoverable if the Mergers are not consummated.
Fiscal Year End:
December 31
Number of Full-Time Equivalent Employees:
38
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) | | September 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) | | September 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) | | September 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) | | September 30, 2015 |
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 | % |
|
| | |
| | Supplemental Financial Information |
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR) | | Three and Nine Months Ended September 30, 2015 and 2014 |
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 |
|
|
| | |
| | Supplemental Financial Information |
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR) | | September 30, 2015 and December 31, 2014 |
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 |
|
|
| | |
| | Supplemental Financial Information |
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR) | | Three and Nine Months Ended September 30, 2015 and 2014 |
Disposition of Hotel Properties
Effective January 1, 2015, we adopted new accounting guidance that amends the requirements for reporting discontinued operations. Under the new guidance, only dispositions 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, we, along with our 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 (expenses), net, in the condensed consolidated statements of operations for the 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 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 our 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 |
|
|
| | |
| | Supplemental Financial Information |
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR) | | Nine Months Ended September 30, 2014 |
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 |
|
|
| | |
| | |
| | Supplemental Financial Information |
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR) | | Three and Nine Months Ended September 30, 2015 and 2014 |
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. |
|
| | |
| | |
| | Supplemental Financial Information |
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR) | | September 30, 2015 |
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.
|
| | |
| | |
| | Supplemental Financial Information |
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR) | | Three and Nine Months Ended September 30, 2015 and 2014 |
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 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 Nine Months Ended September 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 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 | | (4 | ) | | 69 |
| | 72 |
| | 75 |
|
Foreign currency exchange gain—discontinued operations | | — |
| | — |
| | — |
| | (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 |
| | — |
|
Merger-related costs | | 4,018 |
| | — |
| | 4,018 |
| | — |
|
Activist shareholder costs | | — |
| | — |
| | — |
| | 1,637 |
|
Excess of redemption price 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 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 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. |
|
| | |
| | Supplemental Financial Information |
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR) | | September 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 | | 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.
|
| | |
| | Supplemental Financial Information |
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR) | | September 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) | | $ | 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.
|
| | |
| | Supplemental Financial Information |
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR) | | September 30, 2015 |
Portfolio Data
Portfolio at September 30, 2015
(dollars in thousands)
|
| | | | | | | | | | | | | | | |
Hotel | | Location | | Number of Rooms | | % of Total Rooms | | 3rd QTR 2015 Property EBITDA | | % of 3rd QTR 2015 Property EBITDA |
United States: | | | | | | | | | | |
Westin St. Francis | | San Francisco, CA | | 1,195 |
| | 15 | % | | $ | 12,525 |
| | 13 | % |
InterContinental Chicago | | Chicago, IL | | 792 |
| | 10 | % | | 6,535 |
| | 7 | % |
Hotel del Coronado | | Coronado, CA | | 757 |
| | 10 | % | | 19,181 |
| | 20 | % |
Fairmont Chicago | | Chicago, IL | | 687 |
| | 9 | % | | 4,879 |
| | 5 | % |
Fairmont Scottsdale Princess | | Scottsdale, AZ | | 649 |
| | 8 | % | | (105 | ) | | — | % |
InterContinental Miami | | Miami, FL | | 641 |
| | 8 | % | | 1,717 |
| | 2 | % |
JW Marriott Essex House Hotel (a) | | New York, NY | | 511 |
| | 6 | % | | 4,443 |
| | 5 | % |
Ritz-Carlton Laguna Niguel | | Dana Point, CA | | 396 |
| | 5 | % | | 10,462 |
| | 11 | % |
Loews Santa Monica Beach Hotel | | Santa Monica, CA | | 347 |
| | 4 | % | | 6,044 |
| | 6 | % |
Four Seasons Hotel Austin | | Austin, TX | | 291 |
| | 4 | % | | 1,419 |
| | 2 | % |
Ritz-Carlton Half Moon Bay | | Half Moon Bay, CA | | 261 |
| | 3 | % | | 6,161 |
| | 6 | % |
Montage Laguna Beach | | Laguna Beach, CA | | 249 |
| | 3 | % | | 9,593 |
| | 10 | % |
Four Seasons Washington, D.C. | | Washington, D.C. | | 222 |
| | 3 | % | | 2,839 |
| | 3 | % |
Four Seasons Resort Scottsdale at Troon North | | Scottsdale, AZ | | 210 |
| | 3 | % | | (274 | ) | | — | % |
Four Seasons Silicon Valley | | East Palo Alto, CA | | 200 |
| | 3 | % | | 2,543 |
| | 3 | % |
Four Seasons Jackson Hole | | Teton Village, WY | | 124 |
| | 1 | % | | 6,009 |
| | 6 | % |
Total United States | | | | 7,532 |
| | 95 | % | | 93,971 |
| | 99 | % |
Assets Held For Sale: | | | | | | | | | | |
Marriott Lincolnshire Resort (b) | | Lincolnshire, IL | | 389 |
| | 5 | % | | 1,204 |
| | 1 | % |
| | | | 7,921 |
| | 100 | % | | 95,175 |
| | 100 | % |
| |
(a) | As of September 30, 2015, we wholly owned 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. |
| |
(b) | On August 19, 2015, we entered into an agreement with an unaffiliated third party to sell this hotel for $20,650,000. The transaction, which is subject to customary closing conditions, is expected to close in the fourth quarter of 2015. |
|
| | |
| | Supplemental Financial Information |
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR) | | Four Quarters Ended September 30, 2015 |
Seasonality
(dollars in thousands)
The Total portfolio is derived from our hotel portfolio at September 30, 2015. 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. We have included the operating results of the Marriott Lincolnshire Resort as the hotel's results of operations are included in continuing operations for all periods presented. 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 Hotels (as of September 30, 2015) | | | | | | |
Acquisition property revenues - 3 Properties and 750 Rooms | | | | | | |
Same store property revenues - 14 Properties and 7,171 Rooms | | | | | | |
| | | | | | | | | | |
| | Three Months Ended | | |
| | December 31, 2014 | | March 31, 2015 | | June 30, 2015 | | September 30, 2015 | | Total |
Acquisition property revenues (a) | | $ | 2,539 |
| | $ | 31,043 |
| | $ | 42,482 |
| | $ | 48,288 |
| | $ | 124,352 |
|
Acquisition property revenues (b) | | 44,649 |
| | 11,993 |
| | 6,780 |
| | — |
| | 63,422 |
|
Same store property revenues | | 300,409 |
| | 282,739 |
| | 307,743 |
| | 305,429 |
| | 1,196,320 |
|
Total pro forma revenues | | $ | 347,597 |
| | $ | 325,775 |
| | $ | 357,005 |
| | $ | 353,717 |
| | $ | 1,384,094 |
|
Total property seasonality % | | 25.1 | % | | 23.5 | % | | 25.8 | % | | 25.6 | % | | 100.0 | % |
(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 Nine Months Ended September 30, 2015 and 2014 |
Operating Statistics
The Same Store Hotels portfolio is derived from our hotel portfolio at September 30, 2015. The Same Store Hotels 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 nine months ended September 30, 2015 and 2014. We have also excluded the operating results of the Hyatt Regency La Jolla hotel for the three and nine months ended September 30, 2015 and 2014 because we sold the hotel on May 21, 2015. We have included the operating results of the Marriott Lincolnshire Resort for the three and nine months ended September 30, 2015 and 2014.
Same Store Hotels (as of September 30, 2015)
14 Properties
7,171 Rooms
|
| | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended September 30, | | | | Nine Months Ended September 30, | | |
| | 2015 | | 2014 | | Change | | | | 2015 | | 2014 | | Change | | |
ADR | | $ | 327.88 |
| | $ | 322.34 |
| | 1.7 | | % | | $ | 318.19 |
| | $ | 305.53 |
| | 4.1 | | % |
Average Occupancy | | 80.3 | % | | 80.1 | % | | 0.2 | | pts | | 77.1 | % | | 76.7 | % | | 0.4 | | pts |
RevPAR | | $ | 263.35 |
| | $ | 258.29 |
| | 2.0 | | % | | $ | 245.32 |
| | $ | 234.42 |
| | 4.6 | | % |
Total RevPAR | | $ | 462.96 |
| | $ | 445.99 |
| | 3.8 | | % | | $ | 457.64 |
| | $ | 433.98 |
| | 5.5 | | % |
Property EBITDA Margin | | 27.6 | % | | 27.2 | % | | 0.4 | | pts | | 27.0 | % | | 25.7 | % | | 1.3 | | pts |
Same Store Hotels - Adjusted (a) (as of September 30, 2015)
14 Properties
7,171 Rooms
|
| | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended September 30, | | | | Nine Months Ended September 30, | | |
| | 2015 | | 2014 | | Change | | | | 2015 | | 2014 | | Change | | |
ADR | | $ | 327.88 |
| | $ | 318.25 |
| | 3.0 | | % | | $ | 318.19 |
| | $ | 301.98 |
| | 5.4 | | % |
Average Occupancy | | 80.3 | % | | 80.1 | % | | 0.2 | | pts | | 77.1 | % | | 76.7 | % | | 0.4 | | pts |
RevPAR | | $ | 263.35 |
| | $ | 255.02 |
| | 3.3 | | % | | $ | 245.32 |
| | $ | 231.70 |
| | 5.9 | | % |
Total RevPAR | | $ | 462.96 |
| | $ | 448.10 |
| | 3.3 | | % | | $ | 457.64 |
| | $ | 436.33 |
| | 4.9 | | % |
Property EBITDA Margin | | 27.8 | % | | 27.3 | % | | 0.5 | | pts | | 27.1 | % | | 25.6 | % | | 1.5 | | pts |
(a) For the three months ended September 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 $0.5 million, respectively. For the nine months ended September 30, 2015 and 2014, property EBITDA margins exclude the amortization of the below market hotel management agreement related to the Hotel del Coronado of $1.5 million and $0.6 million, respectively. For the three and nine months ended September 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 Nine Months Ended September 30, 2015 and 2014 |
Operating Statistics (Continued)
The Total Hotels portfolio is derived from our hotel portfolio at September 30, 2015, 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 nine months ended September 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. We have included the operating results of the Marriott Lincolnshire Resort for the three and nine months ended September 30, 2015 and 2014.
Total Hotels (as of September 30, 2015)
17 Properties
7,921 Rooms
|
| | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended September 30, | | | | Nine Months Ended September 30, | | |
| | 2015 | | 2014 | | Change | | | | 2015 | | 2014 | | Change | | |
ADR | | $ | 341.46 |
| | $ | 335.12 |
| | 1.9 | | % | | $ | 331.77 |
| | $ | 318.30 |
| | 4.2 | | % |
Average Occupancy | | 79.6 | % | | 78.9 | % | | 0.7 | | pts | | 77.0 | % | | 76.6 | % | | 0.4 | | pts |
RevPAR | | $ | 271.77 |
| | $ | 264.24 |
| | 2.8 | | % | | $ | 255.54 |
| | $ | 243.88 |
| | 4.8 | | % |
Total RevPAR | | $ | 485.23 |
| | $ | 462.97 |
| | 4.8 | | % | | $ | 483.11 |
| | $ | 456.79 |
| | 5.8 | | % |
Property EBITDA Margin | | 26.9 | % | | 26.4 | % | | 0.5 | | pts | | 26.6 | % | | 25.3 | % | | 1.3 | | pts |
Total Hotels - Adjusted (b) (as of September 30, 2015)
17 Properties
7,921 Rooms
|
| | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended September 30, | | | | Nine Months Ended September 30, | | |
| | 2015 | | 2014 | | Change | | | | 2015 | | 2014 | | Change | | |
ADR | | $ | 341.46 |
| | $ | 330.81 |
| | 3.2 | | % | | $ | 331.77 |
| | $ | 314.43 |
| | 5.5 | | % |
Average Occupancy | | 79.6 | % | | 78.9 | % | | 0.7 | | pts | | 77.0 | % | | 76.6 | % | | 0.4 | | pts |
RevPAR | | $ | 271.77 |
| | $ | 260.85 |
| | 4.2 | | % | | $ | 255.54 |
| | $ | 240.91 |
| | 6.1 | | % |
Total RevPAR | | $ | 485.23 |
| | $ | 465.88 |
| | 4.2 | | % | | $ | 483.11 |
| | $ | 459.64 |
| | 5.1 | | % |
Property EBITDA Margin | | 27.1 | % | | 26.4 | % | | 0.7 | | pts | | 26.7 | % | | 25.2 | % | | 1.5 | | pts |
(b) For the three months ended September 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 $0.5 million, respectively. For the nine months ended September 30, 2015 and 2014, property EBITDA margins exclude the amortization of the below market hotel management agreement related to the Hotel del Coronado of $1.5 million and $0.6 million, respectively. For the three and nine months ended September 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 Nine Months Ended September 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 nine months ended September 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 nine months ended September 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 $0.5 million for the three months ended September 30, 2015 and 2014, respectively, and $1.5 million and $0.6 million for the nine months ended September 30, 2015 and 2014, respectively. |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended September 30, | | | | Nine Months Ended September 30, | | |
UNITED STATES HOTELS: | | 2015 | | 2014 | | Change | | | | 2015 | | 2014 | | Change | | |
FAIRMONT CHICAGO | | | | | | | | | | | | | | | | |
Selected Financial Information: | | | | | | | | | | | | | | | | |
Total revenues | | $ | 18,574 |
| | $ | 18,453 |
| | 0.7 |
| | % | | $ | 48,496 |
| | $ | 46,576 |
| | 4.1 |
| | % |
Property EBITDA | | $ | 4,879 |
| | $ | 5,420 |
| | (10.0 | ) | | % | | $ | 9,393 |
| | $ | 9,093 |
| | 3.3 |
| | % |
Selected Operating Information: | | | | | | | | | | | | | | | | |
Rooms | | 687 |
| | 687 |
| | — |
| | | | 687 |
| | 687 |
| | — |
| | |
Average occupancy | | 78.6 | % | | 78.9 | % | | (0.3 | ) | | pts | | 66.9 | % | | 66.7 | % | | 0.2 |
| | pts |
ADR | | $ | 238.27 |
| | $ | 231.23 |
| | 3.0 |
| | % | | $ | 231.72 |
| | $ | 219.60 |
| | 5.5 |
| | % |
RevPAR | | $ | 187.32 |
| | $ | 182.33 |
| | 2.7 |
| | % | | $ | 155.00 |
| | $ | 146.43 |
| | 5.9 |
| | % |
Total RevPAR | | $ | 293.87 |
| | $ | 291.96 |
| | 0.7 |
| | % | | $ | 258.58 |
| | $ | 248.34 |
| | 4.1 |
| | % |
| | | | | | | | | | | | | | | | |
FAIRMONT SCOTTSDALE PRINCESS | | | | | | | | | | | | | | |
Selected Financial Information (Amounts below are 100% of operations, of which SHR owns 100% as of September 30, 2014): |
Total revenues | | $ | 18,104 |
| | $ | 15,808 |
| | 14.5 |
| | % | | $ | 85,449 |
| | $ | 80,027 |
| | 6.8 |
| | % |
Property EBITDA | | $ | (105 | ) | | $ | (1,085 | ) | | 90.3 |
| | % | | $ | 22,144 |
| | $ | 19,244 |
| | 15.1 |
| | % |
Selected Operating Information: | | | | | | | | | | | | | | | | |
Rooms | | 649 |
| | 649 |
| | — |
| | | | 649 |
| | 649 |
| | — |
| | |
Average occupancy | | 65.4 | % | | 60.0 | % | | 5.4 |
| | pts | | 73.8 | % | | 73.2 | % | | 0.6 |
| | pts |
ADR | | $ | 151.36 |
| | $ | 150.47 |
| | 0.6 |
| | % | | $ | 259.46 |
| | $ | 241.09 |
| | 7.6 |
| | % |
RevPAR | | $ | 98.97 |
| | $ | 90.27 |
| | 9.6 |
| | % | | $ | 191.36 |
| | $ | 176.51 |
| | 8.4 |
| | % |
Total RevPAR | | $ | 303.21 |
| | $ | 264.76 |
| | 14.5 |
| | % | | $ | 482.28 |
| | $ | 451.68 |
| | 6.8 |
| | % |
| | | | | | | | | | | | | | | | |
FOUR SEASONS HOTEL AUSTIN | | | | | | | | | | | | | | |
Selected Financial Information (This table includes financial information only for our period of ownership): | | |
Total revenues | | $ | 10,975 |
| | N/A |
| | N/A |
| | | | N/A |
| | N/A |
| | N/A |
| | |
Property EBITDA | | $ | 1,419 |
| | 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 nine months ended September 30, 2015, average occupancy was 75.0%, ADR was $360.07, RevPAR was $269.94 and Total RevPAR was $496.51. For the three months ended September 30, 2014, average occupancy was 52.3%, ADR was $328.63, RevPAR was $171.95 and Total RevPAR was $329.81. For the nine months ended September 30, 2014, average occupancy was 70.3%, ADR was $352.84, RevPAR was $248.11 and Total RevPAR was $450.84.): |
Rooms | | 291 |
| | N/A |
| | N/A |
| | | | N/A |
| | N/A |
| | N/A |
| | |
Average occupancy | | 69.1 | % | | N/A |
| | N/A |
| | | | N/A |
| | N/A |
| | N/A |
| | |
ADR | | $ | 330.27 |
| | N/A |
| | N/A |
| | | | N/A |
| | N/A |
| | N/A |
| | |
RevPAR | | $ | 228.10 |
| | N/A |
| | N/A |
| | | | N/A |
| | N/A |
| | N/A |
| | |
Total RevPAR | | $ | 409.96 |
| | N/A |
| | N/A |
| | | | N/A |
| | N/A |
| | N/A |
| | |
|
| | |
| | Supplemental Financial Information |
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR) | | Three and Nine Months Ended September 30, 2015 and 2014 |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended September 30, | | | | Nine Months Ended September 30, | | |
| | 2015 | | 2014 | | Change | | | | 2015 | | 2014 | | Change | | |
FOUR SEASONS JACKSON HOLE | | | | | | | | | | | | | | |
Selected Financial Information: | | |
Total revenues | | $ | 16,259 |
| | $ | 13,807 |
| | 17.8 |
| | % | | $ | 39,619 |
| | $ | 35,100 |
| | 12.9 |
| | % |
Property EBITDA | | $ | 6,009 |
| | $ | 4,312 |
| | 39.4 |
| | % | | $ | 11,039 |
| | $ | 8,407 |
| | 31.3 |
| | % |
Selected Operating Information: | | | | | | | | | | | | | | | | |
Rooms | | 124 |
| | 124 |
| | — |
| | | | 124 |
| | 124 |
| | — |
| | |
Average occupancy | | 81.0 | % | | 77.9 | % | | 3.1 |
| | pts | | 68.6 | % | | 66.3 | % | | 2.3 |
| | pts |
ADR | | $ | 711.37 |
| | $ | 643.66 |
| | 10.5 |
| | % | | $ | 638.78 |
| | $ | 573.17 |
| | 11.4 |
| | % |
RevPAR | | $ | 576.30 |
| | $ | 501.31 |
| | 15.0 |
| | % | | $ | 438.36 |
| | $ | 379.93 |
| | 15.4 |
| | % |
Total RevPAR | | $ | 1,425.20 |
| | $ | 1,210.30 |
| | 17.8 |
| | % | | $ | 1,170.37 |
| | $ | 1,036.87 |
| | 12.9 |
| | % |
| | | | | | | | | | | | | | | | |
FOUR SEASONS RESORT SCOTTSDALE AT TROON NORTH | | | | | | | | | | | | |
Selected Financial Information (This table includes financial information only for our period of ownership): | | |
Total revenues | | $ | 7,241 |
| | N/A |
| | N/A |
| | | | $ | 35,395 |
| | N/A |
| | N/A |
| | |
Property EBITDA | | $ | (274 | ) | | N/A |
| | N/A |
| | | | $ | 8,013 |
| | N/A |
| | N/A |
| | |
Selected Operating Information (This table includes statistical information only for our period of ownership. For the three months ended September 30, 2014, average occupancy was 63.9%, ADR was $186.20, RevPAR was $118.89 and Total RevPAR was $315.47. For the nine months ended September 30, 2014, average occupancy was 75.6%, ADR was $331.53, RevPAR was $250.74 and Total RevPAR was $565.67.): |
Rooms | | 210 |
| | N/A |
| | N/A |
| | | | 210 |
| | N/A |
| | N/A |
| | |
Average occupancy | | 67.6 | % | | N/A |
| | N/A |
| | | | 76.7 | % | | N/A |
| | N/A |
| | |
ADR | | $ | 212.08 |
| | N/A |
| | N/A |
| | | | $ | 375.16 |
| | N/A |
| | N/A |
| | |
RevPAR | | $ | 143.40 |
| | N/A |
| | N/A |
| | | | $ | 287.70 |
| | N/A |
| | N/A |
| | |
Total RevPAR | | $ | 374.77 |
| | N/A |
| | N/A |
| | | | $ | 617.39 |
| | N/A |
| | N/A |
| | |
| | | | | | | | | | | | | | | | |
FOUR SEASONS SILICON VALLEY | | | | | | | | | | | | | | |
Selected Financial Information: | | |
Total revenues | | $ | 9,666 |
| | $ | 9,498 |
| | 1.8 |
| | % | | $ | 30,538 |
| | $ | 27,822 |
| | 9.8 |
| | |
Property EBITDA | | $ | 2,543 |
| | $ | 2,407 |
| | 5.7 |
| | % | | $ | 8,391 |
| | $ | 6,944 |
| | 20.8 |
| | |
Selected Operating Information: | | | | | | | | | | | | | | | | |
Rooms | | 200 |
| | 200 |
| | — |
| | | | 200 |
| | 200 |
| | — |
| | |
Average occupancy | | 76.0 | % | | 82.1 | % | | (6.1 | ) | | pts | | 77.2 | % | | 75.9 | % | | 1.3 |
| | |
ADR | | $ | 428.60 |
| | $ | 396.82 |
| | 8.0 |
| | % | | $ | 430.06 |
| | $ | 396.40 |
| | 8.5 |
| | |
RevPAR | | $ | 325.76 |
| | $ | 325.93 |
| | (0.1 | ) | | % | | $ | 332.06 |
| | $ | 301.03 |
| | 10.3 |
| | |
Total RevPAR | | $ | 525.32 |
| | $ | 516.21 |
| | 1.8 |
| | % | | $ | 559.31 |
| | $ | 509.56 |
| | 9.8 |
| | |
| | | | | | | | | | | | | | | | |
FOUR SEASONS WASHINGTON, D.C. | | | | | | | | | | | | | | |
Selected Financial Information: | | | | | | | | | | | | | | |
Total revenues | | $ | 14,969 |
| | $ | 16,618 |
| | (9.9 | ) | | % | | $ | 50,559 |
| | $ | 51,062 |
| | (1.0 | ) | | % |
Property EBITDA | | $ | 2,839 |
| | $ | 3,556 |
| | (20.2 | ) | | % | | $ | 10,791 |
| | $ | 11,261 |
| | (4.2 | ) | | % |
Selected Operating Information: | | | | | | | | | | | | | | |
Rooms | | 222 |
| | 222 |
| | — |
| | | | 222 |
| | 222 |
| | — |
| | |
Average occupancy | | 56.5 | % | | 76.1 | % | | (19.6 | ) | | pts | | 65.7 | % | | 73.9 | % | | (8.2 | ) | | pts |
ADR | | $ | 634.42 |
| | $ | 542.03 |
| | 17.0 |
| | % | | $ | 615.71 |
| | $ | 555.81 |
| | 10.8 |
| | % |
RevPAR | | $ | 358.68 |
| | $ | 412.39 |
| | (13.0 | ) | | % | | $ | 404.39 |
| | $ | 410.94 |
| | (1.6 | ) | | % |
Total RevPAR | | $ | 732.90 |
| | $ | 813.66 |
| | (9.9 | ) | | % | | $ | 834.22 |
| | $ | 842.52 |
| | (1.0 | ) | | % |
|
| | |
| | Supplemental Financial Information |
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR) | | Three and Nine Months Ended September 30, 2015 and 2014 |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended September 30, | | | | Nine Months Ended September 30, | | |
| | 2015 | | 2014 | | Change | | | | 2015 | | 2014 | | Change | | |
HOTEL DEL CORONADO | | | | | | | | | | | | | | | | |
Selected Financial Information (Amounts below are 100% of operations, of which SHR owns 100% as of September 30, 2014.): |
Total revenues | | $ | 50,184 |
| | $ | 49,101 |
| | 2.2 |
| | % | | $ | 132,083 |
| | $ | 126,580 |
| | 4.3 |
| | % |
Property EBITDA | | $ | 19,181 |
| | $ | 17,788 |
| | 7.8 |
| | % | | $ | 48,063 |
| | $ | 42,309 |
| | 13.6 |
| | % |
Selected Operating Information: | | | | | | | | | | | | | | |
Rooms | | 757 |
| | 757 |
| | — |
| | | | 757 |
| | 757 |
| | — |
| | |
Average occupancy | | 74.2 | % | | 69.9 | % | | 4.3 |
| | pts | | 74.1 | % | | 67.1 | % | | 7.0 |
| | pts |
ADR | | $ | 514.21 |
| | $ | 518.35 |
| | (0.8 | ) | | % | | $ | 417.49 |
| | $ | 418.48 |
| | (0.2 | ) | | % |
RevPAR | | $ | 381.77 |
| | $ | 362.33 |
| | 5.4 |
| | % | | $ | 309.29 |
| | $ | 280.61 |
| | 10.2 |
| | % |
Total RevPAR | | $ | 720.58 |
| | $ | 705.03 |
| | 2.2 |
| | % | | $ | 639.13 |
| | $ | 612.50 |
| | 4.3 |
| | % |
| | | | | | | | | | | | | | | | |
INTERCONTINENTAL CHICAGO | | | | | | | | | | | | | | |
Selected Financial Information: | | | | | | | | | | | | | | |
Total revenues | | $ | 21,575 |
| | $ | 22,319 |
| | (3.3 | ) | | % | | $ | 54,931 |
| | $ | 56,534 |
| | (2.8 | ) | | % |
Property EBITDA | | $ | 6,535 |
| | $ | 6,872 |
| | (4.9 | ) | | % | | $ | 11,759 |
| | $ | 13,281 |
| | (11.5 | ) | | % |
Selected Operating Information: | | | | | | | | | | | | | | |
Rooms | | 792 |
| | 792 |
| | — |
| | | | 792 |
| | 792 |
| | — |
| | |
Average occupancy | | 82.7 | % | | 87.9 | % | | (5.2 | ) | | pts | | 74.7 | % | | 79.8 | % | | (5.1 | ) | | pts |
ADR | | $ | 213.42 |
| | $ | 205.49 |
| | 3.9 |
| | % | | $ | 203.18 |
| | $ | 192.42 |
| | 5.6 |
| | % |
RevPAR | | $ | 176.55 |
| | $ | 180.69 |
| | (2.3 | ) | | % | | $ | 151.86 |
| | $ | 153.54 |
| | (1.1 | ) | | % |
Total RevPAR | | $ | 296.10 |
| | $ | 306.32 |
| | (3.3 | ) | | % | | $ | 254.06 |
| | $ | 261.47 |
| | (2.8 | ) | | % |
| | | | | | | | | | | | | | | | |
INTERCONTINENTAL MIAMI | | | | | | | | | | | | | | |
Selected Financial Information: | | | | | | | | | | | | | | |
Total revenues | | $ | 14,454 |
| | $ | 11,990 |
| | 20.6 |
| | % | | $ | 59,439 |
| | $ | 52,999 |
| | 12.2 |
| | % |
Property EBITDA | | $ | 1,717 |
| | $ | 558 |
| | 207.7 |
| | % | | $ | 17,987 |
| | $ | 14,956 |
| | 20.3 |
| | % |
Selected Operating Information: | | | | | | | | | | | | | | |
Rooms | | 641 |
| | 641 |
| | — |
| | | | 641 |
| | 641 |
| | — |
| | |
Average occupancy | | 87.4 | % | | 78.1 | % | | 9.3 |
| | pts | | 88.0 | % | | 85.4 | % | | 2.6 |
| | pts |
ADR | | $ | 141.27 |
| | $ | 141.14 |
| | 0.1 |
| | % | | $ | 201.72 |
| | $ | 196.49 |
| | 2.7 |
| | % |
RevPAR | | $ | 123.48 |
| | $ | 110.17 |
| | 12.1 |
| | % | | $ | 177.53 |
| | $ | 167.79 |
| | 5.8 |
| | % |
Total RevPAR | | $ | 245.09 |
| | $ | 203.31 |
| | 20.5 |
| | % | | $ | 339.66 |
| | $ | 302.87 |
| | 12.1 |
| | % |
| | | | | | | | | | | | | | | | |
JW MARRIOTT ESSEX HOUSE HOTEL | | | | | | | | | | | | |
Selected Financial Information: | | |
Total revenues | | $ | 24,399 |
| | $ | 22,129 |
| | 10.3 |
| | % | | $ | 69,593 |
| | $ | 65,908 |
| | 5.6 |
| | % |
Property EBITDA | | $ | 4,443 |
| | $ | 3,173 |
| | 40.0 |
| | % | | $ | 9,930 |
| | $ | 9,146 |
| | 8.6 |
| | % |
Selected Operating Information: |
Rooms | | 511 |
| | 511 |
| | — |
| | | | 511 |
| | 511 |
| | — |
| | |
Average occupancy | | 88.4 | % | | 83.5 | % | | 4.9 |
| | pts | | 82.9 | % | | 82.2 | % | | 0.7 |
| | pts |
ADR | | $ | 456.02 |
| | $ | 439.31 |
| | 3.8 |
| | % | | $ | 432.15 |
| | $ | 422.05 |
| | 2.4 |
| | % |
RevPAR | | $ | 403.04 |
| | $ | 366.89 |
| | 9.9 |
| | % | | $ | 358.43 |
| | $ | 347.11 |
| | 3.3 |
| | % |
Total RevPAR | | $ | 518.99 |
| | $ | 470.70 |
| | 10.3 |
| | % | | $ | 498.86 |
| | $ | 472.45 |
| | 5.6 |
| | % |
|
| | |
| | Supplemental Financial Information |
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR) | | Three and Nine Months Ended September 30, 2015 and 2014 |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended September 30, | | | | Nine Months Ended September 30, | | |
| | 2015 | | 2014 | | Change | | | | 2015 | | 2014 | | Change | | |
LOEWS SANTA MONICA BEACH HOTEL | | | | | | | | | | | | |
Selected Financial Information: | | | | | | | | | | | | | | |
Total revenues | | $ | 16,267 |
| | $ | 16,144 |
| | 0.8 |
| | % | | $ | 43,530 |
| | $ | 44,471 |
| | (2.1 | ) | | % |
Property EBITDA | | $ | 6,044 |
| | $ | 5,961 |
| | 1.4 |
| | % | | $ | 13,373 |
| | $ | 14,376 |
| | (7.0 | ) | | % |
Selected Operating Information: | | | | | | | | | | | | | | |
Rooms | | 347 |
| | 347 |
| | — |
| | | | 347 |
| | 347 |
| | — |
| | |
Average occupancy | | 84.7 | % | | 88.1 | % | | (3.4 | ) | | pts | | 82.1 | % | | 87.6 | % | | (5.5 | ) | | pts |
ADR | | $ | 455.88 |
| | $ | 432.62 |
| | 5.4 |
| | % | | $ | 395.23 |
| | $ | 380.13 |
| | 4.0 |
| | % |
RevPAR | | $ | 385.97 |
| | $ | 381.33 |
| | 1.2 |
| | % | | $ | 324.47 |
| | $ | 333.09 |
| | (2.6 | ) | | % |
Total RevPAR | | $ | 509.55 |
| | $ | 505.69 |
| | 0.8 |
| | % | | $ | 459.51 |
| | $ | 473.79 |
| | (3.0 | ) | | % |
| | | | | | | | | | | | | | | | |
MARRIOTT LINCOLNSHIRE RESORT | | | | | | | | | | | | | | |
Selected Financial Information (Property EBITDA excludes a $2.3 million and $12.7 million impairment loss related to this hotel for the three and nine months ended September 30, 2015, respectively): |
Total revenues | | $ | 10,013 |
| | $ | 10,105 |
| | (0.9 | ) | | % | | $ | 26,175 |
| | $ | 25,755 |
| | 1.6 |
| | % |
Property EBITDA | | $ | 1,204 |
| | $ | 1,343 |
| | (10.3 | ) | | % | | $ | 2,109 |
| | $ | 1,726 |
| | 22.2 |
| | % |
Selected Operating Information: | | | | | | | | | | | | | | | | |
Rooms | | 389 |
| | 389 |
| | — |
| | | | 389 |
| | 389 |
| | — |
| | |
Average occupancy | | 74.0 | % | | 74.4 | % | | (0.4 | ) | | pts | | 64.0 | % | | 61.9 | % | | 2.1 |
| | pts |
ADR | | $ | 137.06 |
| | $ | 131.85 |
| | 4.0 |
| | % | | $ | 140.46 |
| | $ | 134.05 |
| | 4.8 |
| | % |
RevPAR | | $ | 101.46 |
| | $ | 98.14 |
| | 3.4 |
| | % | | $ | 89.85 |
| | $ | 83.00 |
| | 8.3 |
| | % |
Total RevPAR | | $ | 279.83 |
| | $ | 282.35 |
| | (0.9 | ) | | % | | $ | 246.48 |
| | $ | 242.53 |
| | 1.6 |
| | % |
| | | | | | | | | | | | | | | | |
MONTAGE LAGUNA BEACH | | | | | | | | | | | | | | |
Selected Financial Information (This table includes financial information only for our period of ownership): | | | | |
Total revenues | | $ | 30,072 |
| | N/A |
| | N/A |
| | | | N/A |
| | N/A |
| | N/A |
| | |
Property EBITDA | | $ | 9,593 |
| | 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 nine months ended September 30, 2015, average occupancy was 77.6%, ADR was $651.23, RevPAR was $505.28 and Total RevPAR was $1,085.81. For the three months ended September 30, 2014, average occupancy was 85.7%, ADR was $761.90, RevPAR was $652.89 and Total RevPAR was $1,265.12. For the nine months ended September 30, 2014, average occupancy was 81.7%, ADR was $599.73, RevPAR was $490.26 and Total RevPAR was $1,053.32.): |
Rooms | | 249 |
| | N/A |
| | N/A |
| | | | N/A |
| | N/A |
| | N/A |
| | |
Average occupancy | | 81.1 | % | | N/A |
| | N/A |
| | | | N/A |
| | N/A |
| | N/A |
| | |
ADR | | $ | 825.71 |
| | N/A |
| | N/A |
| | | | N/A |
| | N/A |
| | N/A |
| | |
RevPAR | | $ | 669.38 |
| | N/A |
| | N/A |
| | | | N/A |
| | N/A |
| | N/A |
| | |
Total RevPAR | | $ | 1,298.68 |
| | N/A |
| | N/A |
| | | | N/A |
| | N/A |
| | N/A |
| | |
| | | | | | | | | | | | | | | | |
RITZ-CARLTON HALF MOON BAY | | | | | | | | | | | | | | |
Selected Financial Information: | | | | | | | | | | | | | | | | |
Total revenues | | $ | 20,826 |
| | $ | 18,610 |
| | 11.9 |
| | % | | $ | 53,022 |
| | $ | 49,266 |
| | 7.6 |
| | % |
Property EBITDA | | $ | 6,161 |
| | $ | 5,101 |
| | 20.8 |
| | % | | $ | 12,057 |
| | $ | 10,321 |
| | 16.8 |
| | % |
Selected Operating Information: | | | | | | | | | | | | | | | | |
Rooms | | 261 |
| | 261 |
| | — |
| | | | 261 |
| | 261 |
| | — |
| | |
Average occupancy | | 79.4 | % | | 75.8 | % | | 3.6 |
| | pts | | 67.5 | % | | 70.5 | % | | (3.0 | ) | | pts |
ADR | | $ | 519.94 |
| | $ | 495.65 |
| | 4.9 |
| | % | | $ | 480.13 |
| | $ | 429.19 |
| | 11.9 |
| | % |
RevPAR | | $ | 412.78 |
| | $ | 375.82 |
| | 9.8 |
| | % | | $ | 324.04 |
| | $ | 302.76 |
| | 7.0 |
| | % |
Total RevPAR | | $ | 867.33 |
| | $ | 775.03 |
| | 11.9 |
| | % | | $ | 744.14 |
| | $ | 691.42 |
| | 7.6 |
| | % |
|
| | |
| | Supplemental Financial Information |
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR) | | Three and Nine Months Ended September 30, 2015 and 2014 |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended September 30, | | | | Nine Months Ended September 30, | | |
| | 2015 | | 2014 | | Change | | | | 2015 | | 2014 | | Change | | |
RITZ-CARLTON LAGUNA NIGUEL | | | | | | | | | | | | | | |
Selected Financial Information: | | | | | | | | | | | | | | | | |
Total revenues | | $ | 27,953 |
| | $ | 27,665 |
| | 1.0 |
| | % | | $ | 78,236 |
| | $ | 73,796 |
| | 6.0 |
| | % |
Property EBITDA | | $ | 10,462 |
| | $ | 10,993 |
| | (4.8 | ) | | % | | $ | 27,334 |
| | $ | 25,249 |
| | 8.3 |
| | % |
Selected Operating Information: | | | | | | | | | | | | | | | | |
Rooms | | 396 |
| | 396 |
| | — |
| | | | 396 |
| | 396 |
| | — |
| | |
Average occupancy | | 77.2 | % | | 78.1 | % | | (0.9 | ) | | pts | | 73.8 | % | | 72.3 | % | | 1.5 |
| | pts |
ADR | | $ | 533.51 |
| | $ | 504.98 |
| | 5.6 |
| | % | | $ | 454.11 |
| | $ | 430.95 |
| | 5.4 |
| | % |
RevPAR | | $ | 412.07 |
| | $ | 394.50 |
| | 4.5 |
| | % | | $ | 335.04 |
| | $ | 311.37 |
| | 7.6 |
| | % |
Total RevPAR | | $ | 767.26 |
| | $ | 759.36 |
| | 1.0 |
| | % | | $ | 723.69 |
| | $ | 682.61 |
| | 6.0 |
| | % |
| | | | | | | | | | | | | | | | |
WESTIN ST. FRANCIS | | | | | | | | | | | | | | | | |
Selected Financial Information: | | | | | | | | | | | | | | | | |
Total revenues | | $ | 42,188 |
| | $ | 43,377 |
| | (2.7 | ) | | % | | $ | 124,240 |
| | $ | 117,920 |
| | 5.4 |
| | % |
Property EBITDA | | $ | 12,525 |
| | $ | 13,746 |
| | (8.9 | ) | | % | | $ | 37,120 |
| | $ | 31,789 |
| | 16.8 |
| | % |
Selected Operating Information: | | | | | | | | | | | | | | | | |
Rooms | | 1,195 |
| | 1,195 |
| | — |
| | | | 1,195 |
| | 1,195 |
| | — |
| | |
Average occupancy | | 91.5 | % | | 94.6 | % | | (3.1 | ) | | pts | | 88.9 | % | | 87.7 | % | | 1.2 |
| | pts |
ADR | | $ | 293.69 |
| | $ | 288.24 |
| | 1.9 |
| | % | | $ | 284.07 |
| | $ | 266.08 |
| | 6.8 |
| | % |
RevPAR | | $ | 268.66 |
| | $ | 272.55 |
| | (1.4 | ) | | % | | $ | 252.55 |
| | $ | 233.47 |
| | 8.2 |
| | % |
Total RevPAR | | $ | 383.73 |
| | $ | 394.55 |
| | (2.7 | ) | | % | | $ | 380.83 |
| | $ | 361.46 |
| | 5.4 |
| | % |
|
| | |
| | Supplemental Financial Information |
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR) | | Three and Nine Months Ended September 30, 2015 and 2014 |
Reconciliation of Property EBITDA to EBITDA
(in thousands)
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended September 30, | | Nine Months Ended September 30, |
| | 2015 | | 2014 | | 2015 | | 2014 |
Hotel | | Property EBITDA | | EBITDA | | Property EBITDA | | EBITDA | | Property EBITDA | | EBITDA | | Property EBITDA | | EBITDA |
Fairmont Chicago | | $ | 4,879 |
| | $ | 4,879 |
| | $ | 5,420 |
| | $ | 5,420 |
| | $ | 9,393 |
| | $ | 9,393 |
| | $ | 9,093 |
| | $ | 9,093 |
|
Fairmont Scottsdale Princess (a) | | (105 | ) | | (105 | ) | | (1,085 | ) | | (1,085 | ) | | 22,144 |
| | 22,144 |
| | 19,244 |
| | 6,053 |
|
Four Seasons Hotel Austin (b) | | 1,419 |
| | 1,419 |
| | — |
| | — |
| | — |
| | 2,949 |
| | — |
| | — |
|
Four Seasons Jackson Hole | | 6,009 |
| | 6,009 |
| | 4,312 |
| | 4,312 |
| | 11,039 |
| | 11,039 |
| | 8,407 |
| | 8,407 |
|
Four Seasons Resort Scottsdale at Troon North (c) | | (274 | ) | | (274 | ) | | — |
| | — |
| | 8,013 |
| | 8,013 |
| | — |
| | — |
|
Four Seasons Silicon Valley | | 2,543 |
| | 2,543 |
| | 2,407 |
| | 2,407 |
| | 8,391 |
| | 8,391 |
| | 6,944 |
| | 6,944 |
|
Four Seasons Washington, D.C. | | 2,839 |
| | 2,839 |
| | 3,556 |
| | 3,556 |
| | 10,791 |
| | 10,791 |
| | 11,261 |
| | 11,261 |
|
Hotel del Coronado (a) | | 19,181 |
| | 19,181 |
| | 17,788 |
| | 17,788 |
| | 48,063 |
| | 48,063 |
| | 42,309 |
| | 21,548 |
|
InterContinental Chicago | | 6,535 |
| | 6,535 |
| | 6,872 |
| | 6,872 |
| | 11,759 |
| | 11,759 |
| | 13,281 |
| | 13,281 |
|
InterContinental Miami | | 1,717 |
| | 1,717 |
| | 558 |
| | 558 |
| | 17,987 |
| | 17,987 |
| | 14,956 |
| | 14,956 |
|
JW Marriott Essex House Hotel | | 4,443 |
| | 4,443 |
| | 3,173 |
| | 3,173 |
| | 9,930 |
| | 9,930 |
| | 9,146 |
| | 9,146 |
|
Loews Santa Monica Beach Hotel | | 6,044 |
| | 6,044 |
| | 5,961 |
| | 5,961 |
| | 13,373 |
| | 13,373 |
| | 14,376 |
| | 14,376 |
|
Montage Laguna Beach (d) | | 9,593 |
| | 9,593 |
| | — |
| | — |
| | — |
| | 18,132 |
| | — |
| | — |
|
Ritz-Carlton Half Moon Bay | | 6,161 |
| | 6,161 |
| | 5,101 |
| | 5,101 |
| | 12,057 |
| | 12,057 |
| | 10,321 |
| | 10,321 |
|
Ritz-Carlton Laguna Niguel | | 10,462 |
| | 10,462 |
| | 10,993 |
| | 10,993 |
| | 27,334 |
| | 27,334 |
| | 25,249 |
| | 25,249 |
|
Westin St. Francis | | 12,525 |
| | 12,525 |
| | 13,746 |
| | 13,746 |
| | 37,120 |
| | 37,120 |
| | 31,789 |
| | 31,789 |
|
| | 93,971 |
| | 93,971 |
| | 78,802 |
| | 78,802 |
| | 247,394 |
| | 268,475 |
| | 216,376 |
| | 182,424 |
|
Assets Held For Sale: | | | | | | | | | | | | | | | | |
Marriott Lincolnshire Resort (e) | | 1,204 |
| | 1,204 |
| | 1,343 |
| | 1,343 |
| | 2,109 |
| | 2,109 |
| | 1,726 |
| | 1,726 |
|
Assets Sold: | | | | | | | | | | | | | | | | |
Hyatt Regency La Jolla (f) | | (47 | ) | | (47 | ) | | 1,791 |
| | 1,791 |
| | 3,550 |
| | 3,550 |
| | 3,378 |
| | 3,378 |
|
Marriott Hamburg (g) | | 920 |
| | (4 | ) | | 1,757 |
| | 49 |
| | 3,480 |
| | (11 | ) | | 4,956 |
| | 149 |
|
| | $ | 96,048 |
| | $ | 95,124 |
| | $ | 83,693 |
| | $ | 81,985 |
| | $ | 256,533 |
| | $ | 274,123 |
| | $ | 226,436 |
| | $ | 187,677 |
|
Adjustments: | | | | | | | | | | | | | | | | |
Impairment losses | | | | (2,325 | ) | | | | — |
| | | | (12,726 | ) | | | | — |
|
Corporate expenses | | | | (10,709 | ) | | | | (5,405 | ) | | | | (25,418 | ) | | | | (19,796 | ) |
Interest income | | | | 3 |
| | | | 46 |
| | | | 120 |
| | | | 123 |
|
Loss on early extinguishment of debt | | | | — |
| | | | (609 | ) | | | | (34,211 | ) | | | | (609 | ) |
Equity in earnings of unconsolidated affiliates | | — |
| | | | (4 | ) | | | | — |
| | | | 5,267 |
|
Foreign currency exchange gain (loss) | | 4 |
| | | | (69 | ) | | | | (72 | ) | | | | (75 | ) |
Gain on consolidation of affiliate | | | | — |
| | | | (15 | ) | | | | — |
| | | | 143,451 |
|
Other income, net | | | | 2,746 |
| | | | (136 | ) | | | | 43,054 |
| | | | 1,082 |
|
Income from discontinued operations | | | | — |
| | | | 63 |
| | | | — |
| | | | 159,102 |
|
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 | | 634 |
| | | | 1,854 |
| | | | (12,820 | ) | | | | 6,112 |
|
Adjustments from consolidated affiliates | | (732 | ) | | | | (4,070 | ) | | | | (7,778 | ) | | | | (11,684 | ) |
Adjustments from unconsolidated affiliates | | — |
| | | | (11 | ) | | | | — |
| | | | 8,432 |
|
Other adjustments | | | | (86 | ) | | | | 293 |
| | | | 114 |
| | | | 160 |
|
EBITDA | | | | $ | 84,659 |
| | | | $ | 73,922 |
| | | | $ | 224,386 |
| | | | $ | 503,127 |
|
| |
(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 nine months ended September 30, 2015 and for the three and nine months ended September 30, 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 nine months ended September 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 nine months ended September 30, 2015 and for the three and nine months ended September 30, 2014 above since we did not own the property for the entire periods. |
| |
(e) | On August 19, 2015, we entered into an agreement with an unaffiliated third party to sell this hotel. The transaction, which is subject to customary closing conditions, is expected to close in the fourth quarter of 2015. |
| |
(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. |
| |
(g) | We had a leasehold interest in and subleased this property. EBITDA represents the lease revenue less the lease expense recorded in our statements. Property EBITDA represents the revenue less expenses generated by the property. Effective September 1, 2015, we transferred our leasehold interests in the Marriott Hamburg hotel to an unaffiliated third party and were released from all of our obligations under the lease arrangements. |
|
| | |
| | Supplemental Financial Information |
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR) | | Three and Nine Months Ended September 30, 2015 and 2014 |
Reconciliation of Property EBITDA to Comparable EBITDA
(in thousands)
|
| | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended September 30, 2015 | | Nine Months Ended September 30, 2015 |
| | Property EBITDA | | Adjustments | | Comparable EBITDA | | Property EBITDA | | Adjustments | | Comparable EBITDA |
Urban Hotels: | | | | | | | | | | | | |
Fairmont Chicago | | $ | 4,879 |
| | | | $ | 4,879 |
| | $ | 9,393 |
| | | | $ | 9,393 |
|
Four Seasons Hotel Austin | | 1,419 |
| | | | 1,419 |
| | — |
| | 2,949 |
| | 2,949 |
|
Four Seasons Silicon Valley | | 2,543 |
| | | | 2,543 |
| | 8,391 |
| | | | 8,391 |
|
Four Seasons Washington, D.C. | | 2,839 |
| | | | 2,839 |
| | 10,791 |
| | | | 10,791 |
|
InterContinental Chicago | | 6,535 |
| | | | 6,535 |
| | 11,759 |
| | | | 11,759 |
|
InterContinental Miami | | 1,717 |
| | | | 1,717 |
| | 17,987 |
| | | | 17,987 |
|
JW Marriott Essex House Hotel | | 4,443 |
| | (126 | ) | | 4,317 |
| | 9,930 |
| | (2,482 | ) | | 7,448 |
|
Westin St. Francis | | 12,525 |
| | | | 12,525 |
| | 37,120 |
| | | | 37,120 |
|
Total Urban Hotels | | 36,900 |
| | (126 | ) | | 36,774 |
| | 105,371 |
| | 467 |
| | 105,838 |
|
Resorts: | | | | | | | | | | | | |
Fairmont Scottsdale Princess | | (105 | ) | | | | (105 | ) | | 22,144 |
| | | | 22,144 |
|
Four Seasons Jackson Hole | | 6,009 |
| | | | 6,009 |
| | 11,039 |
| | | | 11,039 |
|
Four Seasons Resort Scottsdale at Troon North | | (274 | ) | | | | (274 | ) | | 8,013 |
| | | | 8,013 |
|
Hotel del Coronado | | 19,181 |
| | 513 |
| | 19,694 |
| | 48,063 |
| | 1,539 |
| | 49,602 |
|
Loews Santa Monica Beach Hotel | | 6,044 |
| | | | 6,044 |
| | 13,373 |
| | | | 13,373 |
|
Montage Laguna Beach | | 9,593 |
| | | | 9,593 |
| | — |
| | 18,132 |
| | 18,132 |
|
Ritz-Carlton Half Moon Bay | | 6,161 |
| | | | 6,161 |
| | 12,057 |
| | | | 12,057 |
|
Ritz-Carlton Laguna Niguel | | 10,462 |
| | | | 10,462 |
| | 27,334 |
| | | | 27,334 |
|
Total Resorts | | 57,071 |
| | 513 |
| | 57,584 |
| | 142,023 |
| | 19,671 |
| | 161,694 |
|
Assets Held For Sale: | | | | | | | | | | | | |
Marriott Lincolnshire Resort | | 1,204 |
| | | | 1,204 |
| | 2,109 |
| | | | 2,109 |
|
Assets Sold: | | | | | | | | | | | | |
Hyatt Regency La Jolla | | (47 | ) | | 25 |
| | (22 | ) | | 3,550 |
| | (1,561 | ) | | 1,989 |
|
Marriott Hamburg | | 920 |
| | (3,633 | ) | | (2,713 | ) | | 3,480 |
| | (6,287 | ) | | (2,807 | ) |
| | $ | 96,048 |
| | $ | (3,221 | ) | | $ | 92,827 |
| | $ | 256,533 |
| | $ | 12,290 |
| | $ | 268,823 |
|
| | | | | | | | | | | | |
| | % of QTR Comparable EBITDA | | | | % of YTD Comparable EBITDA | | |
Urban Hotels | | 39 | % | |
| | 40 | % | |
|
Resorts | | 61 | % | |
| | 60 | % | |
|
Total | | 100 | % | | | | 100 | % | | |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | |
Total United States Urban Hotels (as of September 30, 2015) (a) | | | | | | | | |
8 Properties | | | | | | | | | | | | | | | | |
4,539 Rooms | | | | | | | | | | | | | | | | |
| | Three Months Ended September 30, | | | | Nine Months Ended September 30, | | |
| | 2015 | | 2014 | | Change | | | | 2015 | | 2014 | | Change | | |
ADR | | $ | 287.34 |
| | $ | 280.50 |
| | 2.4 |
| | % | | $ | 292.87 |
| | $ | 278.83 |
| | 5.0 |
| | % |
Average Occupancy | | 83.3 | % | | 83.3 | % | | — |
| | pts | | 79.8 | % | | 79.9 | % | | (0.1 | ) | | pts |
RevPAR | | $ | 239.22 |
| | $ | 233.63 |
| | 2.4 |
| | % | | $ | 233.59 |
| | $ | 222.80 |
| | 4.8 |
| | % |
Total RevPAR | | $ | 375.49 |
| | $ | 366.12 |
| | 2.6 |
| | % | | $ | 385.14 |
| | $ | 366.24 |
| | 5.2 |
| | % |
Property EBITDA Margin | | 23.5 | % | | 24.0 | % | | (0.5 | ) | | pts | | 24.1 | % | | 23.1 | % | | 1.0 |
| | pts |
| | | | | | | | | | | | | | | | |
(a) Includes the Four Seasons Hotel Austin, including periods prior to ownership. |
| | | | | | | | |
Total United States Resorts (as of September 30, 2015) (b) | | | | | | | | |
9 Properties | | | | | | | | | | | | | | | | |
3,382 Rooms | | | | | | | | | | | | | | | | |
| | Three Months Ended September 30, | | | | Nine Months Ended September 30, | | |
| | 2015 | | 2014 | | Change | | | | 2015 | | 2014 | | Change | | |
ADR | | $ | 422.36 |
| | $ | 418.89 |
| | 0.8 |
| | % | | $ | 388.53 |
| | $ | 377.00 |
| | 3.1 |
| | % |
Average Occupancy | | 74.7 | % | | 72.9 | % | | 1.8 |
| | pts | | 73.4 | % | | 72.2 | % | | 1.2 |
| | pts |
RevPAR | | $ | 315.42 |
| | $ | 305.33 |
| | 3.3 |
| | % | | $ | 285.01 |
| | $ | 272.20 |
| | 4.7 |
| | % |
Total RevPAR | | $ | 632.39 |
| | $ | 592.97 |
| | 6.6 |
| | % | | $ | 614.55 |
| | $ | 578.46 |
| | 6.2 |
| | % |
Property EBITDA Margin | | 29.6 | % | | 28.4 | % | | 1.2 |
| | pts | | 28.6 | % | | 27.1 | % | | 1.5 |
| | pts |
| | | | | | | | | | | | | | | | |
(b) Includes the Four Seasons Resort Scottsdale at Troon North and Montage Laguna Beach resort, including periods prior to ownership. |