CHICAGO, Nov. 7, 2012 -- Strategic Hotels &
Resorts, Inc. (NYSE: BEE) today reported results for the third quarter
ended September 30, 2012.
($
in millions, except per share and operating metrics)
|
Third
Quarter
|
Earnings
Metrics
|
2012
|
2011
|
%
Change
|
Net
loss attributable to common shareholders
|
$(8.6)
|
$(11.9)
|
N/A
|
Net
loss per diluted share
|
$(0.05)
|
$(0.06)
|
N/A
|
Comparable
funds from operations (Comparable FFO) (a)
|
$17.0
|
$11.3
|
50.9%
|
Comparable
FFO per diluted share (a)
|
$0.08
|
$0.06
|
33.3%
|
Comparable
EBITDA (a)
|
$46.6
|
$43.6
|
6.7%
|
|
|
|
|
Total
United States Portfolio Operating Metrics (b)
|
|
|
|
Average
Daily Rate (ADR)
|
$271.50
|
$258.06
|
5.2%
|
Occupancy
|
77.1%
|
76.7%
|
0.4 pts
|
Revenue
per Available Room (RevPAR)
|
$209.39
|
$197.98
|
5.8%
|
Total
RevPAR
|
$372.08
|
$352.09
|
5.7%
|
EBITDA
Margins
|
24.1%
|
24.1%
|
N/A
|
|
|
|
|
North
American Same Store Operating Metrics (c)
|
|
|
|
ADR
|
$257.57
|
$246.70
|
4.4%
|
Occupancy
|
78.5%
|
77.6%
|
0.9 pts
|
RevPAR
|
$202.27
|
$191.47
|
5.6%
|
Total
RevPAR
|
$354.07
|
$334.68
|
5.8%
|
EBITDA
Margins
|
23.6%
|
22.2%
|
140 bps
|
(a)
Please refer to tables provided later in this press
release for a reconciliation of net loss to Comparable FFO, Comparable
FFO per share and Comparable EBITDA. Comparable FFO, Comparable FFO per
share and Comparable EBITDA are non-GAAP measures and are further
explained with the reconciliation tables.
|
(b)
Operating statistics reflect results from the
Company's Total United States portfolio (see portfolio definitions
later in this press release).
|
(c)
Operating statistics reflect results from the
Company's North American same store portfolio (see portfolio
definitions later in this press release).
|
"Our portfolio continued to perform very well during the
quarter, with solid year-over-year growth," said Raymond L. "Rip"
Gellein, Jr., Chairman of the Board and Chief Executive Officer of
Strategic Hotels & Resorts, Inc. "The acquisition of the Essex
House hotel was a terrific achievement, with early indicators showing
very positive reception to the JW Marriott brand. Looking forward, we
see positive trends heading into the new year with group pace
significantly ahead of this time last year."
Third Quarter Highlights
- Net loss attributable to common shareholders was $8.6 million, or $0.05
per diluted share, in the third quarter of 2012, compared with a loss
of $11.9 million, or $0.06 per diluted share, in the third quarter
of 2011.
- Comparable FFO was $0.08 per
diluted share in the third quarter of 2012, compared with $0.06 per diluted share in the prior year
period.
- Comparable EBITDA was $46.6 million in the third
quarter of 2012, compared with $43.6 million
in the prior year period, a 6.7 percent increase between periods.
- Total United States
portfolio RevPAR increased 5.8 percent in the third quarter of 2012,
driven by a 5.2 percentage increase in ADR and a 0.4 percent point
increase in occupancy, compared to the third quarter of 2011. Total
RevPAR increased 5.7 percent between periods with non-rooms revenue
increasing by 5.6 percent between periods.
- ADR growth in the Total United States portfolio was driven
by a 5.8 percent increase in transient ADR compared to the third
quarter of 2011 and a 3.2% increase in group ADR.
- RevPAR increased 7.2 percent in the third quarter of 2012
in the Company's Total United States resort portfolio and 4.4 percent
in the Company's Total United States urban portfolio, compared to the
third quarter of 2011.
- North American same store RevPAR increased 5.6 percent in
the third quarter of 2012, driven by a 4.4 percentage increase
in ADR and a 0.9 percent point increase in occupancy. Total RevPAR
increased 5.8 percent with non-rooms revenue increasing by 6.0 percent
between periods.
- European RevPAR increased 0.1 percent (5.6 percent in
constant dollars) in the third quarter of 2012, driven by a 1.6 percent
increase in ADR (7.2 percent in constant dollars) offsetting a 1.3
percentage point decrease in occupancy between periods. European Total
RevPAR increased 0.1 percent in the third quarter over the prior year
period (5.7 percent in constant dollars).
- Total United States
portfolio EBITDA margins were flat in the third quarter of 2012,
compared to the third quarter of 2011. EBITDA margins for the quarter
were impacted by a $2.7 million real
estate tax expense recorded at the Hotel del Coronado related to prior
periods as the result of a reassessment of the asset's taxable basis.
Excluding this one-time charge, Total United States portfolio EBITDA
margins expanded by 110 basis points in the third quarter of 2012 and
North American same store EBITDA margins expanded 140 basis points.
- Group room nights currently booked for 2012 are 0.1 percent
lower than room nights booked for 2011 at the same time last year but
at rates 3.5 percent higher, resulting in a 3.3 percent RevPAR
increase.
The company reported financial results for the nine month
period ended September 30, 2012 as
follows:
- Net loss attributable to common shareholders was $43.1 million, or $0.22
per diluted share, compared with net loss attributable to common
shareholders of $7.8 million, or $0.04 per diluted share, for the nine month
period ended September 30, 2011.
- Comparable FFO was $0.21 per
diluted share compared with $0.09 per
diluted share in the nine month period ended September
30, 2011.
- Comparable EBITDA was $130.7 million compared with $114.8 million for the nine month period ended
September 30, 2011, a 13.8
percent increase between periods.
Preferred Dividends
On August 30, 2012, the
Company's Board of Directors declared a quarterly dividend of $0.53125 per share of 8.5 percent Series A
Cumulative Redeemable Preferred Stock paid on October
1, 2012 to shareholders of record as of September
14, 2012, a quarterly dividend of $0.51563
per share of 8.25 percent Series B Cumulative Redeemable Preferred
Stock paid on October 1, 2012 to
shareholders of record as of September 14, 2012
and a quarterly dividend of $0.51563 per
share of 8.25 percent Series C Cumulative Redeemable Preferred Stock
paid on October 1, 2012 to shareholders
of record as of September 14, 2012.
Transaction Activity
On September 14, 2012, the
Company closed on the acquisition of the JW Marriott Essex House Hotel
in New York City for a gross purchase
price of approximately $362.3 million
and established a joint venture arrangement with affiliates of KSL
Capital Partners, LLC to fund the equity portion of the acquisition.
The Company owns 51.0 percent of the joint venture and serves as
managing member and asset manager.
Subsequent Events
On November 1, 2012, the
Company closed a $90.0 million
non-recourse mortgage agreement with MetLife secured by the Hyatt
Regency La Jolla hotel. Under the terms of the loan agreement, the $97.5 million mortgage previously encumbering
the property was replaced with a $72.0 million
A-Note and an $18.0 million B-Note that
will each mature December 1, 2017. The
floating rate A-Note bears interest at LIBOR plus 400 basis points,
subject to a 50 basis point LIBOR floor, and the B-Note bears interest
at a fixed rate of 10.0 percent.
On November 2, 2012, the
Company announced that Laurence S. Geller
stepped down as President and Chief Executive Officer of Strategic
Hotels & Resorts, Inc. and member of the Company's Board of
Directors effective as of such date. Raymond L. "Rip" Gellein, Jr.,
Chairman of the Company's Board of Directors, was appointed Chief
Executive Officer. In addition, Sheli Z.
Rosenberg was appointed lead independent director of the Board.
2012 Guidance
Based on the results of the first three quarters and current
forecasts for the remainder of the year, the Company is reaffirming its
guidance range for full year 2012 RevPAR growth, Total RevPAR growth,
Comparable EBITDA, and Comparable FFO per diluted share.
For the year ending December 31, 2012,
the Company anticipates that Comparable EBITDA will be in the range of $165.0 million to $180.0 million and
Comparable FFO in the range of $0.21 and
$0.29 per fully diluted share.
Management is also reaffirming its guidance for North American same
store RevPAR growth in the range between 6.0 percent to 8.0 percent and
Total RevPAR growth in the range between 5.0 percent and 7.0 percent.
Portfolio Definitions
Total United States
portfolio hotel comparisons for the third quarter of 2012 are derived
from the Company's hotel portfolio at September
30, 2012, consisting of all 14 properties located in the United States, including unconsolidated
joint ventures, but excluding the JW Marriott Essex House Hotel which
was acquired on September 14, 2012.
North American same store hotel comparisons for the third
quarter of 2012 are derived from the Company's hotel portfolio at September 30, 2012, consisting of properties
located in North America and held for
five or more quarters, in which operations are included in the
consolidated results of the Company. As a result, same store
comparisons include 13 properties and exclude the unconsolidated Hotel
del Coronado and Fairmont Scottsdale Princess hotels and the recently
acquired JW Marriott Essex House Hotel which was purchased on September 14, 2012.
European hotel comparisons for the third quarter of 2012 are
derived from the Company's European owned and leased hotel properties
at September 30, 2012, consisting of the
Marriott London Grosvenor Square and the Marriott Hamburg hotels.
Earnings Call
The Company will conduct its third quarter 2012 conference
call for investors and other interested parties on Thursday, November 8, 2012 at 10:00 a.m. Eastern Time (ET). Interested
individuals are invited to access the call by dialing 888.679.8040
(toll international: 617.213.4851) with passcode 99633171. To
participate on the webcast, log on to the company's website at http://www.strategichotels.com
or http://edge.media-server.com/m/p/hssa33gr/lan/en.
For those unable to listen to the call live, a taped
rebroadcast will be available beginning at 12:00
p.m. ET on November 8, 2012
through 11:59 p.m. ET on November 15, 2012. To access the replay, dial
888.286.8010 (toll international: 617.801.6888) with passcode 77474592.
A replay of the call will also be available on the Internet at http://www.strategichotels.com
or http://www.earnings.com
for 30 days after the call.
The Company also produces supplemental financial data that
includes detailed information regarding its operating results. This
supplemental data is considered an integral part of this earnings
release. These materials are available on the Strategic Hotels &
Resorts' website at www.strategichotels.com within the Investor
Relations section of the website.
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, Mexico and Europe. The Company currently has ownership
interests in 18 properties with an aggregate of 8,271 rooms and 851,600
square feet of meeting space. For a list of current properties and for
further information, please visit the Company's website at http://www.strategichotels.com.
This press release contains forward-looking statements
about Strategic Hotels & Resorts, Inc. (the "Company"). Except for
historical information, the matters discussed in this press release are
forward-looking statements subject to certain risks and uncertainties.
These forward-looking statements include statements regarding the
Company's future financial results, stabilization in the lodging space,
positive trends in the lodging industry and the Company's continued
focus on improving profitability. Actual results could differ
materially from the Company's projections. Factors that may contribute
to these differences include, but are not limited to the following: the
effects of the recent global economic recession 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 or refinance maturing debt; the Company's ability to maintain
compliance with covenants contained in the Company's debt facilities;
stagnation or further 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 the Company's 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, Mexico, Germany, England
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, such as the H1N1 virus outbreak; delays and
cost-overruns in construction and development; marketing challenges
associated with entering new lines of business or pursuing new business
strategies; the Company's failure to maintain its status as a REIT;
changes in the competitive environment in the Company's industry and
the markets where the Company invests; changes in real estate and
zoning laws or regulations; legislative or regulatory changes,
including changes to laws governing the taxation of REITS; changes in
generally accepted accounting principles, policies and guidelines; and
litigation, judgments or settlements.
Additional risks are discussed in the Company's filings
with the Securities and Exchange Commission, including those
appearing under the heading "Item 1A. Risk Factors" in the Company's
most recent Form 10-K and subsequent Form 10-Qs. Although the
Company believes the expectations reflected in such
forward-looking statements are based on reasonable assumptions, it can
give no assurance that its expectations will be attained. The
forward-looking statements are made as of the date of this press release,
and the Company undertakes no obligation to publicly update or revise
any forward-looking statement, whether as a result of new
information, future events or otherwise, except as required by law.
The following tables reconcile projected 2012 net loss
attributable to common shareholders to projected Comparable EBITDA,
Comparable FFO and Comparable FFO per diluted share ($ in millions,
except per share data):
|
Low
Range
|
|
High
Range
|
Net
Loss Attributable to Common Shareholders
|
$(85.9)
|
|
$(71.0)
|
Depreciation
and Amortization
|
120.3
|
|
120.3
|
Interest
Expense
|
83.4
|
|
83.4
|
Income
Taxes
|
0.8
|
|
0.8
|
Non-controlling
Interests
|
(0.3)
|
|
(0.2)
|
Adjustments
from Consolidated Affiliates
|
(9.4)
|
|
(9.4)
|
Adjustments
from Unconsolidated Affiliates
|
27.7
|
|
27.7
|
Preferred
Shareholder Dividends
|
24.2
|
|
24.2
|
Realized
Portion of Deferred Gain on Sale Leasebacks
|
(0.2)
|
|
(0.2)
|
Adjustment
for Value Creation Plan
|
2.8
|
|
2.8
|
Other
Adjustments
|
1.6
|
|
1.6
|
Comparable
EBITDA
|
$165.0
|
|
$180.0
|
|
Low
Range
|
|
High
Range
|
Net
Loss Attributable to Common Shareholders
|
$(85.9)
|
|
$(71.0)
|
Depreciation
and Amortization
|
119.2
|
|
119.2
|
Realized
Portion of Deferred Gain on Sale Leasebacks
|
(0.2)
|
|
(0.2)
|
Non-controlling
Interests
|
(0.3)
|
|
(0.1)
|
Adjustments
from Consolidated Affiliates
|
(5.0)
|
|
(5.0)
|
Adjustments
from Unconsolidated Affiliates
|
15.2
|
|
15.2
|
Adjustment
for Value Creation Plan
|
2.8
|
|
2.8
|
Other
Adjustments
|
(2.8)
|
|
(2.8)
|
Comparable
FFO
|
$43.0
|
|
$58.1
|
Comparable
FFO per Diluted Share
|
$0.21
|
|
$0.29
|
|
|
|
|
Strategic
Hotels & Resorts, Inc. and Subsidiaries (SHR)
Consolidated
Statements of Operations
(in
thousands, except per share data)
|
|
|
Three
Months Ended September 30,
|
|
Nine
Months Ended September 30,
|
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
Revenues:
|
|
|
|
|
|
|
|
|
Rooms
|
|
$
|
119,067
|
|
|
$
|
110,048
|
|
|
$
|
323,709
|
|
|
$
|
310,330
|
|
Food
and beverage
|
|
63,283
|
|
|
58,664
|
|
|
197,693
|
|
|
195,987
|
|
Other
hotel operating revenue
|
|
21,040
|
|
|
19,939
|
|
|
59,338
|
|
|
59,860
|
|
Lease
revenue
|
|
1,175
|
|
|
1,255
|
|
|
3,505
|
|
|
3,747
|
|
Total
revenues
|
|
204,565
|
|
|
189,906
|
|
|
584,245
|
|
|
569,924
|
|
Operating
Costs and Expenses:
|
|
|
|
|
|
|
|
|
Rooms
|
|
32,069
|
|
|
29,283
|
|
|
90,628
|
|
|
85,728
|
|
Food
and beverage
|
|
47,355
|
|
|
45,345
|
|
|
143,065
|
|
|
142,010
|
|
Other
departmental expenses
|
|
52,908
|
|
|
51,358
|
|
|
153,557
|
|
|
155,856
|
|
Management
fees
|
|
6,182
|
|
|
5,879
|
|
|
18,012
|
|
|
18,203
|
|
Other
hotel expenses
|
|
13,988
|
|
|
12,672
|
|
|
40,360
|
|
|
39,497
|
|
Lease
expense
|
|
1,114
|
|
|
1,249
|
|
|
3,425
|
|
|
3,702
|
|
Depreciation
and amortization
|
|
25,649
|
|
|
25,526
|
|
|
76,416
|
|
|
86,222
|
|
Corporate
expenses
|
|
6,956
|
|
|
(2,228)
|
|
|
23,632
|
|
|
24,206
|
|
Total
operating costs and expenses
|
|
186,221
|
|
|
169,084
|
|
|
549,095
|
|
|
555,424
|
|
Operating
income
|
|
18,344
|
|
|
20,822
|
|
|
35,150
|
|
|
14,500
|
|
Interest
expense
|
|
(19,942)
|
|
|
(21,838)
|
|
|
(58,627)
|
|
|
(67,148)
|
|
Interest
income
|
|
42
|
|
|
41
|
|
|
122
|
|
|
124
|
|
Loss
on early extinguishment of debt
|
|
—
|
|
|
(399)
|
|
|
—
|
|
|
(1,237)
|
|
Loss
on early termination of derivative financial instruments
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(29,242)
|
|
Equity
in losses of unconsolidated affiliates
|
|
(2,257)
|
|
|
(1,867)
|
|
|
(2,054)
|
|
|
(6,266)
|
|
Foreign
currency exchange (loss) gain
|
|
(996)
|
|
|
(209)
|
|
|
(1,169)
|
|
|
77
|
|
Other
income, net
|
|
436
|
|
|
355
|
|
|
1,365
|
|
|
4,716
|
|
Loss
before income taxes and discontinued operations
|
|
(4,373)
|
|
|
(3,095)
|
|
|
(25,213)
|
|
|
(84,476)
|
|
Income
tax benefit (expense)
|
|
600
|
|
|
(867)
|
|
|
(215)
|
|
|
(279)
|
|
Loss
from continuing operations
|
|
(3,773)
|
|
|
(3,962)
|
|
|
(25,428)
|
|
|
(84,755)
|
|
Income
(loss) from discontinued operations, net of tax
|
|
—
|
|
|
19
|
|
|
(535)
|
|
|
101,215
|
|
Net
(loss) income
|
|
(3,773)
|
|
|
(3,943)
|
|
|
(25,963)
|
|
|
16,460
|
|
Net
loss (income) attributable to the noncontrolling interests in SHR's
operating partnership
|
|
17
|
|
|
16
|
|
|
126
|
|
|
(70)
|
|
Net
loss (income) attributable to the noncontrolling interests in
consolidated affiliates
|
|
1,241
|
|
|
(254)
|
|
|
891
|
|
|
(997)
|
|
Net
(loss) income attributable to SHR
|
|
(2,515)
|
|
|
(4,181)
|
|
|
(24,946)
|
|
|
15,393
|
|
Preferred
shareholder dividends
|
|
(6,042)
|
|
|
(7,721)
|
|
|
(18,125)
|
|
|
(23,164)
|
|
Net
loss attributable to SHR common shareholders
|
|
$
|
(8,557)
|
|
|
$
|
(11,902)
|
|
|
$
|
(43,071)
|
|
|
$
|
(7,771)
|
|
Basic
Loss Per Share:
|
|
|
|
|
|
|
|
|
Loss
from continuing operations attributable to SHR common shareholders
|
|
$
|
(0.04)
|
|
|
$
|
(0.06)
|
|
|
$
|
(0.22)
|
|
|
$
|
(0.62)
|
|
Income
(loss) from discontinued operations attributable to SHR common
shareholders
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.58
|
|
Net
loss attributable to SHR common shareholders
|
|
$
|
(0.04)
|
|
|
$
|
(0.06)
|
|
|
$
|
(0.22)
|
|
|
$
|
(0.04)
|
|
Weighted
average common shares outstanding
|
|
206,523
|
|
|
186,146
|
|
|
198,872
|
|
|
173,349
|
|
Diluted
Loss Per Share:
|
|
|
|
|
|
|
|
|
Loss
from continuing operations attributable to SHR common shareholders
|
|
$
|
(0.05)
|
|
|
$
|
(0.06)
|
|
|
$
|
(0.22)
|
|
|
$
|
(0.62)
|
|
Income
(loss) from discontinued operations attributable to SHR common
shareholders
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.58
|
|
Net
loss attributable to SHR common shareholders
|
|
$
|
(0.05)
|
|
|
$
|
(0.06)
|
|
|
$
|
(0.22)
|
|
|
$
|
(0.04)
|
|
Weighted
average common shares outstanding
|
|
218,182
|
|
|
186,146
|
|
|
198,872
|
|
|
173,349
|
|
Strategic
Hotels & Resorts, Inc. and Subsidiaries (SHR)
Consolidated
Balance Sheets
(in
thousands, except share data)
|
|
|
September
30, 2012
|
|
December
31, 2011
|
Assets
|
|
|
|
|
Investment
in hotel properties, net
|
|
$
|
2,001,747
|
|
|
$
|
1,692,431
|
|
Goodwill
|
|
40,359
|
|
|
40,359
|
|
Intangible
assets, net of accumulated amortization of $10,295 and $8,915
|
|
30,971
|
|
|
30,635
|
|
Investment
in unconsolidated affiliates
|
|
117,005
|
|
|
126,034
|
|
Cash
and cash equivalents
|
|
82,048
|
|
|
72,013
|
|
Restricted
cash and cash equivalents
|
|
49,026
|
|
|
39,498
|
|
Accounts
receivable, net of allowance for doubtful accounts of $1,542 and $1,698
|
|
55,153
|
|
|
43,597
|
|
Deferred
financing costs, net of accumulated amortization of $6,308 and $3,488
|
|
12,846
|
|
|
10,845
|
|
Deferred
tax assets
|
|
2,600
|
|
|
2,230
|
|
Prepaid
expenses and other assets
|
|
55,955
|
|
|
29,047
|
|
Total
assets
|
|
$
|
2,447,710
|
|
|
$
|
2,086,689
|
|
Liabilities,
Noncontrolling Interests and Equity
|
|
|
|
|
Liabilities:
|
|
|
|
|
Mortgages
and other debt payable
|
|
$
|
1,185,347
|
|
|
$
|
1,000,385
|
|
Bank
credit facility
|
|
124,000
|
|
|
50,000
|
|
Accounts
payable and accrued expenses
|
|
245,149
|
|
|
249,179
|
|
Distributions
payable
|
|
6,042
|
|
|
72,499
|
|
Deferred
tax liabilities
|
|
47,305
|
|
|
47,623
|
|
Total
liabilities
|
|
1,607,843
|
|
|
1,419,686
|
|
Noncontrolling
interests in SHR's operating partnership
|
|
5,129
|
|
|
4,583
|
|
Equity:
|
|
|
|
|
SHR's
shareholders' equity:
|
|
|
|
|
8.50%
Series A Cumulative Redeemable Preferred Stock ($0.01 par value per
share; 4,148,141 shares issued and outstanding; liquidation preference
$25.00 per share plus accrued distributions and $105,907 and $130,148
in the aggregate)
|
|
99,995
|
|
|
99,995
|
|
8.25%
Series B Cumulative Redeemable Preferred Stock ($0.01 par value per
share; 3,615,375 shares issued and outstanding; liquidation preference
$25.00 per share plus accrued distributions and $92,249 and $112,775 in
the aggregate)
|
|
87,064
|
|
|
87,064
|
|
8.25%
Series C Cumulative Redeemable Preferred Stock ($0.01 par value per
share; 3,827,727 shares issued and outstanding; liquidation preference
$25.00 per share plus accrued distributions and $97,667 and $119,377 in
the aggregate)
|
|
92,489
|
|
|
92,489
|
|
Common
shares ($0.01 par value per share; 350,000,000 and 250,000,000 common
shares authorized; 204,308,710 and 185,627,199 common shares issued and
outstanding)
|
|
2,043
|
|
|
1,856
|
|
Additional
paid-in capital
|
|
1,735,395
|
|
|
1,634,067
|
|
Accumulated
deficit
|
|
(1,215,567)
|
|
|
(1,190,621)
|
|
Accumulated
other comprehensive loss
|
|
(58,261)
|
|
|
(70,652)
|
|
Total
SHR's shareholders' equity
|
|
743,158
|
|
|
654,198
|
|
Noncontrolling
interests in consolidated affiliates
|
|
91,580
|
|
|
8,222
|
|
Total
equity
|
|
834,738
|
|
|
662,420
|
|
Total
liabilities, noncontrolling interests and equity
|
|
$
|
2,447,710
|
|
|
$
|
2,086,689
|
|
Strategic
Hotels & Resorts, Inc. and Subsidiaries (SHR)
Financial
Highlights
Supplemental
Financial Data
(in
thousands, except per share information)
|
|
|
September
30, 2012
|
|
|
Pro
Rata Share
|
|
Consolidated
|
Capitalization
|
|
|
|
|
Common
shares outstanding
|
|
204,309
|
|
|
204,309
|
|
Operating
partnership units outstanding
|
|
853
|
|
|
853
|
|
Restricted
stock units outstanding
|
|
1,370
|
|
|
1,370
|
|
Value
Creation Plan units outstanding under the deferral program
|
|
1,239
|
|
|
1,239
|
|
Combined
shares and units outstanding
|
|
207,771
|
|
|
207,771
|
|
Common
stock price at end of period
|
|
$
|
6.01
|
|
|
$
|
6.01
|
|
Common
equity capitalization
|
|
$
|
1,248,704
|
|
|
$
|
1,248,704
|
|
Preferred
equity capitalization (at $25.00 face value)
|
|
289,102
|
|
|
289,102
|
|
Consolidated
debt
|
|
1,309,347
|
|
|
1,309,347
|
|
Pro
rata share of unconsolidated debt
|
|
212,275
|
|
|
—
|
|
Pro
rata share of consolidated debt
|
|
(138,648)
|
|
|
—
|
|
Cash
and cash equivalents
|
|
(82,048)
|
|
|
(82,048)
|
|
Total
enterprise value
|
|
$
|
2,838,732
|
|
|
$
|
2,765,105
|
|
Net
Debt / Total Enterprise Value
|
|
45.8
|
%
|
|
44.4
|
%
|
Preferred
Equity / Total Enterprise Value
|
|
10.2
|
%
|
|
10.5
|
%
|
Common
Equity / Total Enterprise Value
|
|
44.0
|
%
|
|
45.1
|
%
|
Strategic
Hotels & Resorts, Inc. and Subsidiaries (SHR)
|
Discontinued
Operations
|
The
results of operations of hotels sold are classified as discontinued
operations and segregated in the consolidated statements of operations
for all periods presented. The following hotel was sold during 2011 (in
thousands):
|
|
|
|
|
Hotel
|
Date
Sold
|
Net
Sales Proceeds
|
Paris
Marriott Champs Elysees (Paris Marriott)
|
April
6, 2011
|
$
|
60,003
|
|
The
following is a summary of income (loss) from discontinued operations
for the three and nine months ended September 30, 2012 and 2011 (in
thousands):
|
|
|
Three
Months Ended September 30,
|
|
Nine
Months Ended
September
30,
|
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
Hotel
operating revenues
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
9,743
|
|
Operating
costs and expenses
|
|
—
|
|
|
(54)
|
|
|
—
|
|
|
9,456
|
|
Operating
income
|
|
—
|
|
|
54
|
|
|
—
|
|
|
287
|
|
Foreign
currency exchange (loss) gain
|
|
—
|
|
|
—
|
|
|
(535)
|
|
|
51
|
|
Other
income, net
|
|
—
|
|
|
—
|
|
|
—
|
|
|
326
|
|
Income
tax expense
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(379)
|
|
(Loss)
gain on sale
|
|
—
|
|
|
(35)
|
|
|
—
|
|
|
100,930
|
|
Income
(loss) from discontinued operations
|
|
$
|
—
|
|
|
$
|
19
|
|
|
$
|
(535)
|
|
|
$
|
101,215
|
|
Strategic
Hotels & Resorts, Inc. and Subsidiaries (SHR)
|
Investments
in Unconsolidated Affiliates
|
(in
thousands)
|
On
January 9, 2006, we purchased a 45% interest in the unconsolidated
affiliate that owns the Hotel del Coronado. On February 4, 2011, we
completed a recapitalization of the unconsolidated affiliate. As part
of the recapitalization, a new unconsolidated affiliate was formed to
own the Hotel del Coronado and to invest cash in the asset. Pursuant to
the terms of the recapitalization, we became a limited partner in the
new unconsolidated affiliate, and our ownership interest in the Hotel
del Coronado decreased from 45% to 34.3%. On June 9, 2011, we completed
a recapitalization of the Fairmont Scottsdale Princess hotel. As part
of the recapitalization, our ownership interest in the Fairmont
Scottsdale Princess hotel decreased from 100% to 50%. We account for
these investments using the equity method of accounting.
|
|
|
|
|
|
|
|
Three
Months Ended September 30, 2012
|
|
Three
Months Ended September 30, 2011
|
|
|
Hotel
del
Coronado
|
|
Fairmont
Scottsdale
Princess
|
|
Total
|
|
Hotel
del
Coronado
|
|
Fairmont
Scottsdale
Princess
|
|
Total
|
Total
revenues (100%)
|
|
$
|
44,978
|
|
|
$
|
10,607
|
|
|
$
|
55,585
|
|
|
$
|
43,417
|
|
|
$
|
10,280
|
|
|
$
|
53,697
|
|
Property
EBITDA (100%)
|
|
$
|
14,560
|
|
|
$
|
(2,163)
|
|
|
$
|
12,397
|
|
|
$
|
16,995
|
|
|
$
|
(2,452)
|
|
|
$
|
14,543
|
|
Equity
in earnings (losses) of unconsolidated affiliates (SHR ownership)
|
|
|
|
|
|
|
|
|
|
|
Property
EBITDA
|
|
$
|
4,994
|
|
|
$
|
(1,082)
|
|
|
$
|
3,912
|
|
|
$
|
5,830
|
|
|
$
|
(1,226)
|
|
|
$
|
4,604
|
|
Depreciation
and amortization
|
|
(1,711)
|
|
|
(1,774)
|
|
|
(3,485)
|
|
|
(1,665)
|
|
|
(1,806)
|
|
|
(3,471)
|
|
Interest
expense
|
|
(2,522)
|
|
|
(191)
|
|
|
(2,713)
|
|
|
(2,648)
|
|
|
(198)
|
|
|
(2,846)
|
|
Other
expenses, net
|
|
(19)
|
|
|
(5)
|
|
|
(24)
|
|
|
(83)
|
|
|
(96)
|
|
|
(179)
|
|
Income
taxes
|
|
(74)
|
|
|
—
|
|
|
(74)
|
|
|
(125)
|
|
|
—
|
|
|
(125)
|
|
Equity
in earnings (losses) of unconsolidated affiliates
|
|
$
|
668
|
|
|
$
|
(3,052)
|
|
|
$
|
(2,384)
|
|
|
$
|
1,309
|
|
|
$
|
(3,326)
|
|
|
$
|
(2,017)
|
|
EBITDA
Contribution:
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
in earnings (losses) of unconsolidated affiliates
|
|
$
|
668
|
|
|
$
|
(3,052)
|
|
|
$
|
(2,384)
|
|
|
$
|
1,309
|
|
|
$
|
(3,326)
|
|
|
$
|
(2,017)
|
|
Depreciation
and amortization
|
|
1,711
|
|
|
1,774
|
|
|
3,485
|
|
|
1,665
|
|
|
1,806
|
|
|
3,471
|
|
Interest
expense
|
|
2,522
|
|
|
191
|
|
|
2,713
|
|
|
2,648
|
|
|
198
|
|
|
2,846
|
|
Income
taxes
|
|
74
|
|
|
—
|
|
|
74
|
|
|
125
|
|
|
—
|
|
|
125
|
|
EBITDA
Contribution
|
|
$
|
4,975
|
|
|
$
|
(1,087)
|
|
|
$
|
3,888
|
|
|
$
|
5,747
|
|
|
$
|
(1,322)
|
|
|
$
|
4,425
|
|
FFO
Contribution:
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
in earnings (losses) of unconsolidated affiliates
|
|
$
|
668
|
|
|
$
|
(3,052)
|
|
|
$
|
(2,384)
|
|
|
$
|
1,309
|
|
|
$
|
(3,326)
|
|
|
$
|
(2,017)
|
|
Depreciation
and amortization
|
|
1,711
|
|
|
1,774
|
|
|
3,485
|
|
|
1,665
|
|
|
1,806
|
|
|
3,471
|
|
FFO
Contribution
|
|
$
|
2,379
|
|
|
$
|
(1,278)
|
|
|
$
|
1,101
|
|
|
$
|
2,974
|
|
|
$
|
(1,520)
|
|
|
$
|
1,454
|
|
|
|
Nine
Months Ended September 30, 2012
|
|
Nine
Months Ended September 30, 2011
|
|
|
Hotel
del
Coronado
|
|
Fairmont
Scottsdale
Princess
|
|
Total
|
|
Hotel
del
Coronado
|
|
Fairmont
Scottsdale
Princess
|
|
Total
|
Total
revenues (100%)
|
|
$
|
110,332
|
|
|
$
|
56,735
|
|
|
$
|
167,067
|
|
|
$
|
106,404
|
|
|
$
|
12,389
|
|
|
$
|
118,793
|
|
Property
EBITDA (100%)
|
|
$
|
33,522
|
|
|
$
|
9,743
|
|
|
$
|
43,265
|
|
|
$
|
34,748
|
|
|
$
|
(3,196)
|
|
|
$
|
31,552
|
|
Equity
in losses of unconsolidated affiliates (SHR ownership)
|
|
|
|
|
|
|
|
|
|
|
Property
EBITDA
|
|
$
|
11,498
|
|
|
$
|
4,871
|
|
|
$
|
16,369
|
|
|
$
|
12,022
|
|
|
$
|
(1,598)
|
|
|
$
|
10,424
|
|
Depreciation
and amortization
|
|
(5,098)
|
|
|
(5,321)
|
|
|
(10,419)
|
|
|
(4,963)
|
|
|
(2,257)
|
|
|
(7,220)
|
|
Interest
expense
|
|
(7,544)
|
|
|
(589)
|
|
|
(8,133)
|
|
|
(7,382)
|
|
|
(248)
|
|
|
(7,630)
|
|
Other
expenses, net
|
|
(62)
|
|
|
(44)
|
|
|
(106)
|
|
|
(1,547)
|
|
|
(640)
|
|
|
(2,187)
|
|
Income
taxes
|
|
293
|
|
|
—
|
|
|
293
|
|
|
554
|
|
|
—
|
|
|
554
|
|
Equity
in losses of unconsolidated affiliates
|
|
$
|
(913)
|
|
|
$
|
(1,083)
|
|
|
$
|
(1,996)
|
|
|
$
|
(1,316)
|
|
|
$
|
(4,743)
|
|
|
$
|
(6,059)
|
|
EBITDA
Contribution
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
in losses of unconsolidated affiliates
|
|
$
|
(913)
|
|
|
$
|
(1,083
|
|
|
$
|
(1,996)
|
|
|
$
|
(1,316)
|
|
|
$
|
(4,743)
|
|
|
$
|
(6,059)
|
|
Depreciation
and amortization
|
|
5,098
|
|
|
5,321
|
|
|
10,419
|
|
|
4,963
|
|
|
2,257
|
|
|
7,220
|
|
Interest
expense
|
|
7,544
|
|
|
589
|
|
|
8,133
|
|
|
7,382
|
|
|
248
|
|
|
7,630
|
|
Income
taxes
|
|
(293)
|
|
|
—
|
|
|
(293)
|
|
|
(554)
|
|
|
—
|
|
|
(554)
|
|
EBITDA
Contribution
|
|
$
|
11,436
|
|
|
$
|
4,827
|
|
|
$
|
16,263
|
|
|
$
|
10,475
|
|
|
$
|
(2,238)
|
|
|
$
|
8,237
|
|
FFO
Contribution
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
in losses of unconsolidated affiliates
|
|
$
|
(913)
|
|
|
$
|
(1,083)
|
|
|
$
|
(1,996)
|
|
|
$
|
(1,316)
|
|
|
$
|
(4,743)
|
|
|
$
|
(6,059)
|
|
Depreciation
and amortization
|
|
5,098
|
|
|
5,321
|
|
|
10,419
|
|
|
4,963
|
|
|
2,257
|
|
|
7,220
|
|
FFO
Contribution
|
|
$
|
4,185
|
|
|
$
|
4,238
|
|
|
$
|
8,423
|
|
|
$
|
3,647
|
|
|
$
|
(2,486)
|
|
|
$
|
1,161
|
|
Investments
in Unconsolidated Affiliates (Continued)
(in
thousands)
|
Debt
|
|
Interest
Rate
|
|
|
|
Spread
over
LIBOR
|
|
|
|
Loan
Amount
|
|
Maturity
(a)
|
Hotel
del Coronado
|
|
|
|
|
|
|
|
|
|
|
|
|
CMBS
Mortgage and Mezzanine
|
|
5.80
|
%
|
|
(b)
|
|
480 bp
|
|
(b)
|
|
$
|
425,000
|
|
|
March
2016
|
Cash
and cash equivalents
|
|
|
|
|
|
|
|
|
|
(16,219)
|
|
|
|
Net
Debt
|
|
|
|
|
|
|
|
|
|
$
|
408,781
|
|
|
|
Fairmont
Scottsdale Princess
|
|
|
|
|
|
|
|
|
|
|
|
|
CMBS
Mortgage
|
|
0.57
|
%
|
|
|
|
36 bp
|
|
|
|
$
|
133,000
|
|
|
April
2015
|
Cash
and cash equivalents
|
|
|
|
|
|
|
|
|
|
(4,290)
|
|
|
|
Net
Debt
|
|
|
|
|
|
|
|
|
|
$
|
128,710
|
|
|
|
(a)
Includes extension options.
|
(b)
Subject to a 1% LIBOR floor.
|
Caps
|
|
Effective
Date
|
|
LIBOR
Cap Rate
|
|
Notional
Amount
|
|
Maturity
|
Hotel
del Coronado
|
|
|
|
|
|
|
|
|
CMBS
Mortgage and Mezzanine Loan Caps
|
|
February
2011
|
|
2.00
|
%
|
|
$
|
425,000
|
|
|
February
2013
|
CMBS
Mortgage and Mezzanine Loan Caps
|
|
February
2013
|
|
2.50
|
%
|
|
$
|
425,000
|
|
|
March
2013
|
Fairmont
Scottsdale Princess
|
|
|
|
|
|
|
|
|
CMBS
Mortgage Loan Cap
|
|
June
2011
|
|
4.00
|
%
|
|
$
|
133,000
|
|
|
December
2013
|
Strategic
Hotels & Resorts, Inc. and Subsidiaries (SHR)
Leasehold
Information
(in
thousands)
|
|
|
Three
Months Ended September 30,
|
|
Nine
Months Ended September 30,
|
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
Paris
Marriott (a):
|
|
|
|
|
|
|
|
|
Property
EBITDA
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,455
|
|
Revenue
(b)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,455
|
|
|
|
|
|
|
|
|
|
|
Lease
expense
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,274)
|
|
Less:
Deferred gain on sale-leaseback
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,214)
|
|
Adjusted
lease expense
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,488)
|
|
|
|
|
|
|
|
|
|
|
EBITDA
contribution from leasehold
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(1,033)
|
|
|
|
|
|
|
|
|
|
|
Marriott
Hamburg:
|
|
|
|
|
|
|
|
|
Property
EBITDA
|
|
$
|
1,508
|
|
|
$
|
1,734
|
|
|
$
|
4,404
|
|
|
$
|
5,034
|
|
Revenue
(b)
|
|
$
|
1,175
|
|
|
$
|
1,255
|
|
|
$
|
3,505
|
|
|
$
|
3,747
|
|
|
|
|
|
|
|
|
|
|
Lease
expense
|
|
(1,114)
|
|
|
(1,249)
|
|
|
(3,425)
|
|
|
(3,702)
|
|
Less:
Deferred gain on sale-leaseback
|
|
(49)
|
|
|
(42)
|
|
|
(150)
|
|
|
(151)
|
|
Adjusted
lease expense
|
|
(1,163)
|
|
|
(1,291)
|
|
|
(3,575)
|
|
|
(3,853)
|
|
|
|
|
|
|
|
|
|
|
EBITDA
contribution from leasehold
|
|
$
|
12
|
|
|
$
|
(36)
|
|
|
$
|
(70)
|
|
|
$
|
(106)
|
|
|
|
|
|
|
|
|
|
|
Total
Leaseholds:
|
|
|
|
|
|
|
|
|
Property
EBITDA
|
|
$
|
1,508
|
|
|
$
|
1,734
|
|
|
$
|
4,404
|
|
|
$
|
8,489
|
|
Revenue
(b)
|
|
$
|
1,175
|
|
|
$
|
1,255
|
|
|
$
|
3,505
|
|
|
$
|
7,202
|
|
|
|
|
|
|
|
|
|
|
Lease
expense
|
|
(1,114)
|
|
|
(1,249)
|
|
|
(3,425)
|
|
|
(6,976)
|
|
Less:
Deferred gain on sale-leasebacks
|
|
(49)
|
|
|
(42)
|
|
|
(150)
|
|
|
(1,365)
|
|
Adjusted
lease expense
|
|
(1,163)
|
|
|
(1,291)
|
|
|
(3,575)
|
|
|
(8,341)
|
|
|
|
|
|
|
|
|
|
|
EBITDA
contribution from leaseholds
|
|
$
|
12
|
|
|
$
|
(36)
|
|
|
$
|
(70)
|
|
|
$
|
(1,139)
|
|
Security
Deposit (c):
|
|
September
30, 2012
|
|
December
31, 2011
|
Marriott
Hamburg
|
|
$
|
2,443
|
|
|
$
|
2,462
|
|
|
|
|
|
|
|
|
|
|
(a) On
April 6, 2011, we sold our leasehold interest in the Paris Marriott
hotel. The results of operations for the Paris Marriott hotel have been
classified as discontinued operations for all periods presented.
|
(b)
For the nine months ended September 30, 2011, Revenue for the Paris
Marriott hotel represents Property EBITDA. For the three and nine
months ended September 30, 2012 and 2011, Revenue for the Marriott
Hamburg hotel represents lease revenue.
|
(c)
The security deposit is recorded in prepaid expenses and other assets
on the consolidated balance sheets.
|
Strategic
Hotels & Resorts, Inc. and Subsidiaries (SHR)
|
Non-GAAP
Financial Measures
|
We
present five non-GAAP financial measures that we believe are useful to
management and investors as key measures of our operating performance:
Funds from Operations (FFO); 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 the Value Creation Plan expense. 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 in accordance with standards established by the National
Association of Real Estate Investment Trusts, or NAREIT, with the
exception of impairment of depreciable real estate. 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 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, foreign currency exchange gains or losses and
the Value Creation Plan expense. We believe that the presentation of
FFO, FFO—Fully Diluted and Comparable FFO provides useful information
to management and investors regarding our results of operations because
they are measures of our ability to fund capital expenditures and
expand our business. In addition, FFO is widely used in the real estate
industry to measure operating performance without regard to items such
as depreciation and amortization. We also present Comparable FFO per
diluted share as a non-GAAP measure of our performance. We calculate
Comparable FFO per diluted share for a given operating period as our
Comparable FFO (as defined above) divided by the weighted average of
fully diluted shares outstanding, excluding shares related to the JW
Marriott Essex House Hotel put option. Dilutive securities may include
shares granted under share-based compensation plans and operating
partnership units. No effect is shown for securities that are
anti-dilutive.
|
We
caution investors that amounts presented in accordance with our
definitions of FFO, 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, 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, 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, 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, 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 Loss Attributable to SHR Common Shareholders to EBITDA and
Comparable EBITDA
(in
thousands)
|
|
|
Three
Months Ended September 30,
|
|
Nine
Months Ended September 30,
|
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
Net
loss attributable to SHR common shareholders
|
|
$
|
(8,557)
|
|
|
$
|
(11,902)
|
|
|
$
|
(43,071)
|
|
|
$
|
(7,771)
|
|
Depreciation
and amortization
|
|
25,649
|
|
|
25,526
|
|
|
76,416
|
|
|
86,222
|
|
Interest
expense
|
|
19,942
|
|
|
21,838
|
|
|
58,627
|
|
|
67,148
|
|
Income
taxes—continuing operations
|
|
(600)
|
|
|
867
|
|
|
215
|
|
|
279
|
|
Income
taxes—discontinued operations
|
|
—
|
|
|
—
|
|
|
—
|
|
|
379
|
|
Noncontrolling
interests
|
|
(17)
|
|
|
(16)
|
|
|
(126)
|
|
|
70
|
|
Adjustments
from consolidated affiliates
|
|
(1,879)
|
|
|
(1,248)
|
|
|
(4,382)
|
|
|
(5,431)
|
|
Adjustments
from unconsolidated affiliates
|
|
7,036
|
|
|
7,162
|
|
|
20,606
|
|
|
16,293
|
|
Preferred
shareholder dividends
|
|
6,042
|
|
|
7,721
|
|
|
18,125
|
|
|
23,164
|
|
EBITDA
|
|
47,616
|
|
|
49,948
|
|
|
126,410
|
|
|
180,353
|
|
Realized
portion of deferred gain on sale-leaseback—continuing operations
|
|
(49)
|
|
|
(42)
|
|
|
(150)
|
|
|
(151)
|
|
Realized
portion of deferred gain on sale-leaseback—discontinued operations
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,214)
|
|
Gain
on sale of assets—continuing operations
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,640)
|
|
Loss
(gain) on sale of assets— discontinued operations
|
|
—
|
|
|
35
|
|
|
—
|
|
|
(100,930)
|
|
Loss
on early extinguishment of debt
|
|
—
|
|
|
399
|
|
|
—
|
|
|
1,237
|
|
Loss
on early termination of derivative financial instruments
|
|
—
|
|
|
—
|
|
|
—
|
|
|
29,242
|
|
Foreign
currency exchange loss (gain)—continuing operations (a)
|
|
996
|
|
|
209
|
|
|
1,169
|
|
|
(77)
|
|
Foreign
currency exchange loss (gain)—discontinued operations (a)
|
|
—
|
|
|
—
|
|
|
535
|
|
|
(51)
|
|
Adjustment
for Value Creation Plan
|
|
(2,013)
|
|
|
(6,921)
|
|
|
2,759
|
|
|
9,078
|
|
Comparable
EBITDA
|
|
$
|
46,550
|
|
|
$
|
43,628
|
|
|
$
|
130,723
|
|
|
$
|
114,847
|
|
(a)
Foreign currency exchange gains or losses applicable to third-party and
inter-company debt and certain balance sheet items held by foreign
subsidiaries.
|
Strategic
Hotels & Resorts, Inc. and Subsidiaries (SHR)
Reconciliation
of Net Loss Attributable to SHR Common Shareholders to
Funds
From Operations (FFO), FFO—Fully Diluted and Comparable FFO
(in
thousands, except per share data)
|
|
|
Three
Months Ended September 30,
|
|
Nine
Months Ended September 30,
|
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
Net
loss attributable to SHR common shareholders
|
|
$
|
(8,557)
|
|
|
$
|
(11,902)
|
|
|
$
|
(43,071)
|
|
|
$
|
(7,771)
|
|
Depreciation
and amortization
|
|
25,649
|
|
|
25,526
|
|
|
76,416
|
|
|
86,222
|
|
Corporate
depreciation
|
|
(260)
|
|
|
(279)
|
|
|
(789)
|
|
|
(868)
|
|
Gain
on sale of assets—continuing operations
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,640)
|
|
Loss
(gain) on sale of assets—discontinued operations
|
|
—
|
|
|
35
|
|
|
—
|
|
|
(100,930)
|
|
Realized
portion of deferred gain on sale-leaseback—continuing operations
|
|
(49)
|
|
|
(42)
|
|
|
(150)
|
|
|
(151)
|
|
Realized
portion of deferred gain on sale-leaseback—discontinued operations
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,214)
|
|
Deferred
tax expense on realized portion of deferred gain on sale-leasebacks
|
|
—
|
|
|
—
|
|
|
—
|
|
|
379
|
|
Noncontrolling
interests adjustments
|
|
(121)
|
|
|
(134)
|
|
|
(374)
|
|
|
(440)
|
|
Adjustments
from consolidated affiliates
|
|
(859)
|
|
|
(663)
|
|
|
(2,185)
|
|
|
(3,822)
|
|
Adjustments
from unconsolidated affiliates
|
|
3,792
|
|
|
3,770
|
|
|
11,335
|
|
|
8,023
|
|
FFO
|
|
19,595
|
|
|
16,311
|
|
|
41,182
|
|
|
(23,212)
|
|
Redeemable
noncontrolling interests
|
|
104
|
|
|
118
|
|
|
248
|
|
|
510
|
|
FFO—Fully
Diluted
|
|
19,699
|
|
|
16,429
|
|
|
41,430
|
|
|
(22,702)
|
|
Non-cash
mark to market of interest rate swaps
|
|
(1,688)
|
|
|
1,146
|
|
|
(4,405)
|
|
|
(487)
|
|
Loss
on early extinguishment of debt
|
|
—
|
|
|
399
|
|
|
—
|
|
|
1,237
|
|
Loss
on early termination of derivative financial instruments
|
|
—
|
|
|
—
|
|
|
—
|
|
|
29,242
|
|
Foreign
currency exchange loss (gain)—continuing operations (a)
|
|
996
|
|
|
209
|
|
|
1,169
|
|
|
(77)
|
|
Foreign
currency exchange loss (gain)—discontinued operations (a)
|
|
—
|
|
|
—
|
|
|
535
|
|
|
(51)
|
|
Adjustment
for Value Creation Plan
|
|
(2,013)
|
|
|
(6,921)
|
|
|
2,759
|
|
|
9,078
|
|
Comparable
FFO
|
|
$
|
16,994
|
|
|
$
|
11,262
|
|
|
$
|
41,488
|
|
|
$
|
16,240
|
|
Comparable
FFO per diluted share
|
|
$
|
0.08
|
|
|
$
|
0.06
|
|
|
$
|
0.21
|
|
|
$
|
0.09
|
|
Weighted
average diluted shares (b)
|
|
208,696
|
|
|
188,097
|
|
|
201,050
|
|
|
175,974
|
|
(a)
Foreign currency exchange gains or losses applicable to third-party and
inter-company debt and certain balance sheet items held by foreign
subsidiaries.
|
(b)
Excludes shares related to the JW Marriott Essex House Hotel put option.
|
Strategic
Hotels & Resorts, Inc. and Subsidiaries (SHR)
Debt
Summary
(dollars
in thousands)
|
Debt
|
|
Interest
Rate
|
|
Spread
(a)
|
|
Loan
Amount
|
|
Maturity
(b)
|
North
Beach Venture
|
|
5.00
|
%
|
|
Fixed
|
|
$
|
1,476
|
|
|
January
2013
|
Marriott
London Grosvenor Square (c)
|
|
1.70
|
%
|
|
110 bp
(c)
|
|
114,870
|
|
|
October
2013
|
Bank
credit facility
|
|
3.21
|
%
|
|
300 bp
|
|
124,000
|
|
|
June
2015
|
Four
Seasons Washington, D.C.
|
|
3.36
|
%
|
|
315 bp
|
|
130,000
|
|
|
July
2016
|
Westin
St. Francis
|
|
6.09
|
%
|
|
Fixed
|
|
215,673
|
|
|
June
2017
|
Fairmont
Chicago
|
|
6.09
|
%
|
|
Fixed
|
|
95,828
|
|
|
June
2017
|
JW
Marriott Essex House Hotel
|
|
4.75
|
%
|
|
400 bp
|
|
190,000
|
|
|
September
2017
|
Hyatt
Regency La Jolla (d)
|
|
4.50%
/ 10.00%
|
|
400 bp
/ Fixed
|
|
90,000
|
|
|
December
2017
|
InterContinental
Miami
|
|
3.71
|
%
|
|
350 bp
|
|
85,000
|
|
|
July
2018
|
Loews
Santa Monica Beach Hotel
|
|
4.06
|
%
|
|
385 bp
|
|
110,000
|
|
|
July
2018
|
InterContinental
Chicago
|
|
5.61
|
%
|
|
Fixed
|
|
145,000
|
|
|
August
2021
|
|
|
|
|
|
|
$
|
1,301,847
|
|
|
|
(a)
Spread over LIBOR (0.21% at September 30, 2012). Interest on the JW
Marriott Essex House Hotel loan is subject to a 0.75% LIBOR floor.
Interest on the Hyatt Regency La Jolla loan is subject to a 0.50% LIBOR
floor.
|
(b)
Includes extension options.
|
(c)
Principal balance of £71,070,000 at September 30, 2012. Spread
over three-month GBP LIBOR (0.60% at September 30, 2012).
|
(d)
This loan was refinanced on November 1, 2012. The new principal and
interest are reflected in the table. Interest on $72,000,000 is payable
at LIBOR plus 4.00%, subject to a 0.50% LIBOR floor, and interest on
$18,000,000 is payable at a fixed rate of 10.00%.
|
Domestic and European Interest Rate Swaps
Swap
Effective Date
|
|
Fixed
Pay Rate
Against
LIBOR
|
|
Notional
Amount
|
|
Maturity
|
February
2010
|
|
4.90
|
%
|
|
$
|
100,000
|
|
|
September
2014
|
February
2010
|
|
4.96
|
%
|
|
100,000
|
|
|
December
2014
|
December
2010
|
|
5.23
|
%
|
|
100,000
|
|
|
December
2015
|
February
2011
|
|
5.27
|
%
|
|
100,000
|
|
|
February
2016
|
|
|
5.09
|
%
|
|
$
|
400,000
|
|
|
|
Swap
Effective Date
|
|
Fixed
Pay Rate
Against
GBP LIBOR
|
|
Notional
Amount
|
|
|
Maturity
|
October
2007
|
|
5.72
|
%
|
|
|
|
£
|
71,070
|
|
|
October
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
Future
scheduled debt principal payments (including extension options and the
refinanced loan at the Hyatt Regency La Jolla) are as follows:
|
Years
ending December 31,
|
|
Amount
|
2012
(remainder)
|
|
$
|
2,148
|
|
2013
|
|
127,212
|
|
2014
|
|
13,872
|
|
2015
|
|
140,246
|
|
2016
|
|
150,661
|
|
Thereafter
|
|
867,708
|
|
|
|
$
|
1,301,847
|
|
|
|
|
Percent
of fixed rate debt including U.S. and European swaps
|
|
76.1
|
%
|
Weighted
average interest rate including U.S. and European swaps (e)
|
|
6.50
|
%
|
Weighted
average maturity of fixed rate debt (debt with maturity of greater than
one year)
|
|
4.07
|
|
(e)
Excludes the amortization of deferred financing costs and the
amortization of the interest rate swap costs.
|
|