NEW YORK, Feb. 28, 2013-- Morgans Hotel Group Co.
(NASDAQ: MHGC) ("MHG" or the "Company") today reported financial
results for the quarter and year ended December
31, 2012. The Company will host a conference call to review the
results on Friday, March 1, 2013 at 9:00 am.
- Adjusted EBITDA was $12.7 million
in the fourth quarter of 2012, a 47.9% increase over the same period in
2011 due primarily to 38.8% and 33.5% increases in EBITDA at Delano
South Beach and Hudson, respectively, two of the Company's wholly-owned
hotels.
- Operating margins at the Company's Owned Hotels, which
include Delano South Beach, Hudson and Clift, increased 700 basis
points during the fourth quarter of 2012 as compared to the same period
in 2011.
- Revenue per available room ("RevPAR") for System-Wide
Comparable Hotels increased by 7.2% in actual dollars, or 6.6% in
constant dollars, during the fourth quarter of 2012 from the comparable
period in 2011. RevPAR for System-Wide Comparable Hotels located in the United States increased 8.3% during the
fourth quarter of 2012 as compared to the same period in 2011.
- RevPAR at the Company's three non-comparable Morgans Hotel
Group hotels, Delano South Beach, Hudson and Mondrian SoHo, increased
17.8%, 5.7%, and 11.3%, respectively, during the fourth quarter of 2012
as compared to the same period in 2011.
- In November 2012, the
Company entered into a new $180.0 million
nonrecourse mortgage loan secured by Hudson.
Michael Gross, CEO of the
Company, said: "In the fourth quarter we began to see increasing
benefits from investments in our product and service offerings, leading
to significant improvement in year-over-year EBITDA performance. At
Hudson and Delano South Beach, where we completed significant
renovations in 2012, results were particularly strong and operating
margins were up 700 basis points in the fourth quarter. We are seeing
these positive fourth quarter trends continue into 2013, with January's
System-Wide Comparable Hotels RevPAR up 18% over the prior year. Our
development pipeline continues to be strong and includes eight hotels
scheduled to open over the next three years, three of which are
scheduled to open in early 2014. We believe these new hotels will allow
us to generate increasing EBITDA margins due to a high degree of
operating leverage in our model. We are confident about the year ahead
and remain focused on increasing returns at our existing properties,
growing our management and brand portfolio globally, and increasing
shareholder value."
Fourth Quarter 2012 Operating Results
Adjusted EBITDA for the fourth quarter of 2012 was
$12.7 million, an increase of $4.1 million from the same period in 2011, due
primarily to strong performances at Delano South Beach and Hudson, both
of which underwent significant renovations during late 2011 and 2012.
EBITDA at Delano South Beach and Hudson increased by 38.8% and 33.5%,
respectively, as the Company continues to focus on market share and
margin improvement. Additionally, the Company's Adjusted EBITDA was
positively impacted by a full quarter of The Light Group's operating
results.
RevPAR at System-Wide Comparable Hotels increased by 7.2% in
actual dollars, or 6.6% in constant dollars, in the fourth quarter of
2012 from the comparable period in 2011. RevPAR for System-Wide
Comparable Hotels located in the United
States increased 8.3% during the fourth quarter of 2012 as
compared to the same period in 2011.
RevPAR from the System-Wide Comparable Hotels in the Northeastern United States, which consist
of Morgans, Royalton and Ames,
increased by 3.2% in the fourth quarter of 2012 as compared to the same
period in 2011. Each hotel in the region was affected differently by
Hurricane Sandy but overall, business was strong, particularly in December 2012 with RevPAR increases of 9% or
greater during the month at the Company's comparable New York City hotels. For non-Comparable
Hotels, Mondrian SoHo continues to ramp up with RevPAR increasing by
11.3% in the fourth quarter of 2012 from the comparable period in 2011,
despite being closed for one week due to Hurricane Sandy. At Hudson,
with all 834 guest rooms renovated, the hotel generated a 5.7% RevPAR
increase during the fourth quarter of 2012, despite its restaurant
being closed due to renovations.
RevPAR from the System-Wide Comparable Hotels in Miami, which consist of Mondrian South
Beach and Shore Club, increased 13.2 % in the fourth quarter of 2012 as
compared to the same period in 2011, driven by a 10.2% increase in
occupancy. Delano South Beach, which is a non-comparable hotel in 2012,
generated a 17.8% increase in RevPAR driven by a very strong December
and holiday season.
The Company's two West Coast hotels generated an 8.5% RevPAR
growth in the fourth quarter of 2012 as compared to the same period in
2011, led by Mondrian Los Angeles. In London,
RevPAR increased by 3.5%, or 1.4% in constant dollars, during the
fourth quarter of 2012, despite the difficult economic climate.
Management fees increased by 47.5% in the fourth quarter of
2012 as compared to the same period in 2011. This increase was
primarily the result of the Company's acquisition of 90% of The Light
Group in November 2011.
Operating margins at the Company's Owned Hotels, which consist
of Delano South Beach, Hudson and Clift, increased 700 basis points
during the fourth quarter of 2012 as compared to the same period in
2011.
Interest expense increased by $6.9
million during the fourth quarter of 2012 as compared to the
same period in 2011, primarily due to the write-off of deferred
financing fees and payment of termination costs associated with the
refinancing of the Hudson in November 2012.
MHG recorded a net loss of $12.3
million for the fourth quarter of 2012 compared to a net loss of
$17.1 million for the fourth
quarter of 2011, due primarily to improved operating margins at Delano
South Beach and Hudson and a full quarter of management fee income from
The Light Group.
Full Year Operating Results
For the full year 2012, Adjusted EBITDA was $22.9 million, a decline of 23.2% from 2011,
primarily due to the impact of the Company's sale of its ownership
interests in Mondrian Los Angeles, Royalton, Morgans, Sanderson and St Martins Lane in 2011. For
the year, RevPAR for System-Wide Comparable Hotels increased by 4.3%,
or 4.6% in constant dollars, in 2012 from the comparable period in
2011, driven primarily by a 3.4% increase in average daily rate
("ADR"), or 3.8% in constant dollars. MHG recorded a net loss of $55.7 million for the year ended December 31, 2012 compared to a net loss of $85.4 million in the same period in 2011,
which included approximately $21.0 million
of impairment charges recognized related to the Company's
unconsolidated joint ventures.
Renovations
At Hudson, the Company spent most of 2012 renovating all the
guest rooms and corridors and converting SRO units into new guest
rooms. The rooms renovation was completed in September 2012. The
Company also converted 32 SRO units into guest rooms during December 2012 and January
2013 at an estimated cost of approximately $150,000 per room, bringing the total number
of guest rooms at Hudson to 866 as of January 31,
2013. In November 2012, MHG launched Hudson Lodge, a winter pop-up venue at the
hotel's private park. Additionally, in February
2013, the Company opened a new restaurant at Hudson, Hudson Common, which is a modern-day beer
hall and burger joint featuring a wide selection of local craft beers,
inventive preparations of classic American fare, and soda shop-inspired
specialty cocktails. In 2012, the Company spent approximately $27.7 million on room, corridor and restaurant
renovations and has spent an additional approximately $4 million to complete these projects at
Hudson in 2013.
Development
In September 2012, the Company
opened Delano Marrakech, which marks the beginning of the rollout of
its development pipeline. MHG currently has signed management
agreements for seven hotels and a license agreement for another, that
are scheduled to open over the next three years, with three of these
hotels scheduled to open in early 2014 – Mondrian London, Mondrian Doha
and Delano Las Vegas. In addition, Mondrian Baha Mar and Delano Moscow
are currently under construction.
With a strong infrastructure in place, the Company expects the
incremental EBITDA margins for newly signed management agreements and
hotels in its pipeline to approximate 90%.
In August 2012, the Company
acquired the leasehold interests in three restaurants at Mandalay Bay
in Las Vegas from an existing tenant.
The Company has recently opened two of these food and beverage venues.
Red Square, a premier dinner, cocktail, and nightlife destination,
opened in December 2012 and Citizens
Kitchen & Bar, which offers classic American comfort food, opened
in January 2013. MHG is also in the process of reconcepting the third
restaurant at Mandalay Bay, which it plans to introduce in the second
quarter of 2013. The Light Group manages, or will manage, these
restaurants.
Balance Sheet and Liquidity
MHG's total consolidated debt at December
31, 2012, excluding the Clift lease, was $449.0
million with a weighted average interest rate of 6.07%. At December 31, 2012, MHG had $5.8 million of cash and cash equivalents and $57.9 million available under its revolving
credit facility. As of December 31, 2012,
total restricted cash held pursuant to certain debt or lease
requirements was $21.2 million, which
included $2.9 million for the completion
of the Hudson SRO unit conversions and Hudson
Common, all of which was released to MHG in February 2013.
In November 2012, the Company
entered into a new $180.0 million
nonrecourse mortgage loan secured by Hudson. The proceeds were used to
retire the previous mortgage loan on Hudson of $115.0
million, repay $36.0 million of
indebtedness outstanding under the Company's credit facility, and fund
reserves required under the new loan, with the remainder available for
general corporate purposes. The loan bears interest at a reserve
adjusted blended rate of 30-day LIBOR (with a minimum of 0.50%) plus
840 basis points and matures on February 9, 2014. The Company has a
one-year extension option that will permit it to extend the maturity
date to February 9, 2015, if certain conditions are satisfied at the
extension date. The new mortgage loan may be prepaid at any time, in
whole or in part, subject to payment of a prepayment penalty for any
prepayment prior to November 9, 2013. There is no prepayment premium
after November 9, 2013.
As of December 31, 2012, MHG
has approximately $282.6 million of
remaining federal tax net operating loss carryforwards to offset future
income, including gains on asset sales. In addition, the Company has
various state and local net operating losses of approximately $385.7 million, in aggregate, available to
offset future taxable state or local income including gains on asset
sales, to the extent available in the applicable state or local tax
jurisdiction. The Company has begun a sales process for Delano in South
Beach and would use the proceeds from any sale for debt reduction,
growth and general working capital purposes. In addition, the Company
believes it has significant value available to it in Hudson.
Guidance
Looking ahead, based on the trends the Company is seeing in
its markets, MHG projects RevPAR growth at System-wide Comparable
Hotels to be in the 6% to 8% range in 2013. The Company is not
providing overall EBITDA guidance at this time. However, the Company
believes that it could potentially add $8 to
$10 million of EBITDA at Hudson in 2013 given the $6 million of EBITDA lost in 2012 due to rooms
out of service, the new SRO units and the new restaurant, and that
there is potential for further EBITDA growth at Hudson from the
upgraded room product.
Conference Call
MHG will host a conference call to discuss the fourth quarter
financial results on Friday, March 1, 2013
at 9:00AM Eastern time.
The call will be webcast live over the Internet and can be
accessed at www.morganshotelgroup.com
under the About Us, Investor Overview section. Participants should
follow the instructions provided on the website for the download and
installation of audio applications necessary to join the webcast.
The call can also be accessed live over the phone by dialing
(888) 802-8577 or (973) 935-8754 for international callers; the
conference ID is 13839336. A replay of the call will be available two
hours after the call and can be accessed by dialing (855) 859-2056 or
(404) 537-3406 for international callers; the conference ID is
13839336. The replay will be available from March
1, 2013 through March 8, 2013.
Definitions
"System-Wide Comparable Hotels" includes all Morgans Hotel
Group hotels operated by MHG, except for hotels added or under major
renovation during the current or the prior year, development projects
and discontinued operations. System-Wide Comparable Hotels for the
quarter and year ended December 31, 2012
and 2011 excludes Hudson and Delano South Beach,
which were both undergoing renovations beginning in the third quarter
of 2011 and continuing into 2012, the Hard Rock Hotel & Casino in Las Vegas ("Hard Rock"), which effective March 1, 2011 was no longer partially owned or
managed by MHG, Mondrian SoHo, which opened in late February 2011, the San Juan Water and Beach
Club, which was no longer managed by MHG effective July 13, 2011, Delano Marrakech, which opened
in September 2012, and Hotel Las
Palapas, which is not a Morgans Hotel Group branded hotel.
"EBITDA" means earnings before interest, income taxes,
depreciation and amortization, as further defined below.
"Adjusted EBITDA" means adjusted earnings before interest,
taxes, depreciation and amortization as further defined below.
About Morgans Hotel Group
Morgans Hotel Group Co. (NASDAQ: MHGC) is widely credited as
the creator of the first "boutique" hotel and a continuing leader of
the hotel industry's boutique sector. Morgans Hotel Group operates
Delano in South Beach and Marrakech, Mondrian in Los Angeles, South Beach and New York, Hudson in New York, Morgans and Royalton in New York, Shore Club in South Beach, Clift
in San Francisco, Ames in Boston,
Sanderson and St Martins Lane in
London, and a hotel in Playa del
Carmen, Mexico. Morgans Hotel
Group has ownership interests or owns several of these hotels. Morgans
Hotel Group has other property transactions in various stages of
completion, including Delano properties in Las
Vegas, Nevada; Cesme, Turkey
and Moscow, Russia; Mondrian
properties in London, England; Istanbul, Turkey; Doha,
Qatar and Nassau, The Bahamas; and a Hudson in London, England. Morgans Hotel Group also
owns a 90% controlling interest in The Light Group, a leading lifestyle
food and beverage company. For more information please visit www.morganshotelgroup.com.
Forward-Looking and Cautionary Statements
This press release may contain certain "forward-looking
statements" within the meaning of the Private Securities Litigation
Reform Act of 1995. Such forward-looking statements relate to, among
other things, the operating performance of our investments and
financing needs and prediction of certain future other events.
Forward-looking statements are generally identifiable by use of
forward-looking terminology such as "may," "expect," "anticipate,"
"estimate" "believe," "project," or other similar words or expressions.
These forward-looking statements reflect our current views about future
events and are subject to risks, uncertainties, assumptions and changes
in circumstances that may cause our actual results or other future
events to differ materially from those expressed in any forward-looking
statement. Important risks and factors that could cause our actual
results to differ materially from those expressed in any
forward-looking statements include, but are not limited to economic,
business, competitive market and regulatory conditions such as: a
sustained downturn in economic and market conditions, particularly
levels of spending for travel, hotels, dining and entertainment; our
levels of debt, our ability to refinance current outstanding debt,
repay outstanding debt or make payments on guaranties as they may
become due, our ability to access the capital markets, and the ability
of our joint ventures to do the foregoing; our ability to protect the
value of our name, image and brands and our intellectual property;
risks related to natural disasters, terrorist attacks, the threat of
terrorist attacks and similar disasters; our ability to perform under
management agreements and to resolve any disputes; and other risk
factors discussed in the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 2011, and
other documents filed by the Company with the Securities and Exchange
Commission from time to time. All forward-looking statements in this
press release are made as of the date hereof, based upon information
known to management as of the date hereof, and the Company assumes no
obligations to update or revise any of its forward-looking statements
even if experience or future changes show that indicated results or
events will not be realized.
Income
Statements
|
|
|
|
|
|
|
|
|
(In
thousands, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months
|
|
Year
Ended
|
|
|
|
|
|
Ended
December 31 ,
|
|
Ended
December 31 ,
|
|
|
|
|
|
2012
|
2011
|
|
2012
|
2011
|
|
|
|
|
|
|
|
|
|
|
Revenues
:
|
|
|
|
|
|
|
|
|
|
Rooms
|
|
|
|
|
$
31,616
|
$
29,400
|
|
$
102,546
|
$
120,351
|
Food
& beverage
|
|
|
|
|
15,471
|
17,037
|
|
57,496
|
66,253
|
Other
hotel
|
|
|
|
|
1,551
|
1,420
|
|
5,046
|
6,440
|
|
Total
hotel revenues
|
|
|
|
48,638
|
47,857
|
|
165,088
|
193,044
|
Management
and other fees
|
|
|
|
6,159
|
4,176
|
|
24,831
|
14,288
|
|
Total
revenues
|
|
|
|
54,797
|
52,033
|
|
189,919
|
207,332
|
|
|
|
|
|
|
|
|
|
|
Operating
Costs and Expenses :
|
|
|
|
|
|
|
|
|
Rooms
|
|
|
|
|
8,717
|
8,504
|
|
31,973
|
37,626
|
Food
& beverage
|
|
|
|
|
12,238
|
13,565
|
|
47,011
|
55,466
|
Other
departmental
|
|
|
|
940
|
952
|
|
3,595
|
4,069
|
Hotel
selling, general and administrative
|
|
|
|
8,720
|
10,328
|
|
37,055
|
43,629
|
Property
taxes, insurance and other
|
|
|
|
4,288
|
4,339
|
|
15,819
|
16,475
|
|
Total
hotel operating expenses
|
|
|
34,903
|
37,688
|
|
135,453
|
157,265
|
Corporate
expenses :
|
|
|
|
|
|
|
|
|
|
Stock
based compensation
|
|
|
(276)
|
1,698
|
|
4,513
|
9,082
|
|
Other
|
|
|
|
7,191
|
6,945
|
|
27,704
|
25,481
|
Depreciation
and amortization
|
|
|
|
6,540
|
4,814
|
|
23,977
|
22,219
|
Restructuring
and disposal costs
|
|
|
|
3,335
|
1,980
|
|
6,851
|
8,575
|
Development
costs
|
|
|
|
1,595
|
1,793
|
|
5,783
|
5,716
|
|
Total
operating costs and expenses
|
|
53,288
|
54,918
|
|
204,281
|
228,338
|
|
Operating
income (loss)
|
|
|
1,509
|
(2,885)
|
|
(14,362)
|
(21,006)
|
|
|
|
|
|
|
|
|
|
|
Interest
expense, net
|
|
|
|
14,650
|
7,731
|
|
38,998
|
35,514
|
Equity
in loss of unconsolidated joint ventures
|
|
|
1,444
|
6,352
|
|
6,436
|
29,539
|
Gain
on asset sales
|
|
|
|
(2,005)
|
(1,457)
|
|
(7,989)
|
(3,178)
|
Other
non-operating (income) expenses
|
|
|
|
(282)
|
1,747
|
|
3,908
|
4,632
|
|
|
|
|
|
|
|
|
|
|
|
Pre
tax loss
|
|
|
|
(12,298)
|
(17,258)
|
|
(55,715)
|
(87,513)
|
|
Income
tax expense
|
|
|
|
228
|
406
|
|
776
|
929
|
|
Net
loss from continuing operations
|
|
(12,526)
|
(17,664)
|
|
(56,491)
|
(88,442)
|
|
|
|
|
|
|
|
|
|
|
|
Income
from discontinued operations, net of tax
|
-
|
-
|
|
-
|
485
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss
|
|
|
|
(12,526)
|
(17,664)
|
|
(56,491)
|
(87,957)
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss attributable to noncontrolling interest
|
|
190
|
547
|
|
804
|
2,554
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss attributable to Morgans Hotel Group Co.
|
$
(12,336)
|
$
(17,117)
|
|
$
(55,687)
|
$
(85,403)
|
|
|
|
|
|
|
|
|
|
|
|
Preferred
stock dividends and accretion
|
|
(2,920)
|
(3,237)
|
|
(11,124)
|
(9,938)
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss attributable to common stockholders
|
$
(15,256)
|
$
(20,354)
|
|
$
(66,811)
|
$
(95,341)
|
|
|
|
|
|
|
|
|
|
|
|
(Loss)
income per share:
|
|
|
|
|
|
|
|
|
Basic
and diluted from continuing operations
|
|
$
(0.48)
|
$
(0.66)
|
|
$
(2.13)
|
$
(3.05)
|
|
Basic
and diluted from discontinued operations
|
$ -
|
$ -
|
|
$ -
|
$ 0.02
|
|
Basic
and diluted attributable to common stockholders
|
$
(0.48)
|
$
(0.66)
|
|
$
(2.13)
|
$
(3.03)
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average common shares outstanding - basic and diluted
|
31,565
|
30,753
|
|
31,437
|
31,454
|
|
|
|
|
|
|
|
|
|
|
Selected
Hotel Operating Statistics (1)
|
(
In Actual Dollars)
|
|
|
(
In Constant Dollars, if different)
|
(
In Actual Dollars)
|
|
|
(
In Constant Dollars, if different)
|
|
|
|
|
Three
Months
|
|
|
Three
Months
|
|
|
Year
Ended
|
|
|
Year
Ended
|
|
|
|
|
|
Ended
December 31,
|
%
|
|
Ended
December 31,
|
%
|
|
Ended
December 31,
|
%
|
|
Ended
December 31,
|
%
|
|
|
|
|
2012
|
2011
|
Change
|
|
2012
|
2011
|
Change
|
|
2012
|
2011
|
Change
|
|
2012
|
2011
|
Change
|
BY
REGION
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Northeast
Comparable Hotels (2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Occupancy
|
|
80.7%
|
81.4%
|
-0.9%
|
|
|
|
|
|
81.2%
|
82.2%
|
-1.2%
|
|
|
|
|
|
ADR
|
|
|
$
334.31
|
$
321.25
|
4.1%
|
|
|
|
|
|
$
291.16
|
$
276.32
|
5.4%
|
|
|
|
|
|
RevPAR
|
|
|
$
269.79
|
$
261.50
|
3.2%
|
|
|
|
|
|
$
236.42
|
$
227.14
|
4.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
West
Coast Comparable Hotels (3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Occupancy
|
|
75.2%
|
73.2%
|
2.7%
|
|
|
|
|
|
77.3%
|
78.1%
|
-1.0%
|
|
|
|
|
|
ADR
|
|
|
$
254.07
|
$
240.65
|
5.6%
|
|
|
|
|
|
$
253.46
|
$
241.09
|
5.1%
|
|
|
|
|
|
RevPAR
|
|
|
$
191.06
|
$
176.16
|
8.5%
|
|
|
|
|
|
$
195.92
|
$
188.29
|
4.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Miami
Comparable Hotels (4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Occupancy
|
|
71.1%
|
64.5%
|
10.2%
|
|
|
|
|
|
66.6%
|
64.0%
|
4.1%
|
|
|
|
|
|
ADR
|
|
|
$
286.97
|
$
279.57
|
2.6%
|
|
|
|
|
|
$
278.68
|
$
270.08
|
3.2%
|
|
|
|
|
|
RevPAR
|
|
|
$
204.04
|
$
180.32
|
13.2%
|
|
|
|
|
|
$
185.60
|
$
172.85
|
7.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
United
States Comparable Hotels (5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Occupancy
|
|
75.1%
|
72.1%
|
4.2%
|
|
|
|
|
|
74.5%
|
74.0%
|
0.7%
|
|
|
|
|
|
ADR
|
|
|
$
287.01
|
$
276.11
|
3.9%
|
|
|
|
|
|
$
271.90
|
$
260.04
|
4.6%
|
|
|
|
|
|
RevPAR
|
|
|
$
215.54
|
$
199.08
|
8.3%
|
|
|
|
|
|
$
202.57
|
$
192.43
|
5.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
International
Comparable Hotels (6)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Occupancy
|
|
81.1%
|
77.1%
|
5.2%
|
|
81.1%
|
77.1%
|
5.2%
|
|
75.7%
|
74.9%
|
1.1%
|
|
75.7%
|
74.9%
|
1.1%
|
|
ADR
|
|
|
$
391.85
|
$
398.10
|
-1.6%
|
|
$
386.69
|
$
401.19
|
-3.6%
|
|
$
403.25
|
$
404.56
|
-0.3%
|
|
$
403.25
|
$
399.75
|
0.9%
|
|
RevPAR
|
|
|
$
317.79
|
$
306.94
|
3.5%
|
|
$
313.61
|
$
309.32
|
1.4%
|
|
$
305.26
|
$
303.02
|
0.7%
|
|
$
305.26
|
$
299.41
|
2.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
System-wide
Comparable Hotels (7)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Occupancy
|
|
76.2%
|
73.0%
|
4.4%
|
|
76.2%
|
73.0%
|
4.4%
|
|
74.7%
|
74.1%
|
0.8%
|
|
74.7%
|
74.1%
|
0.8%
|
|
ADR
|
|
|
$
307.67
|
$
299.65
|
2.7%
|
|
$
306.66
|
$
300.24
|
2.1%
|
|
$
296.55
|
$
286.71
|
3.4%
|
|
$
296.55
|
$
285.82
|
3.8%
|
|
RevPAR
|
|
|
$
234.44
|
$
218.74
|
7.2%
|
|
$
233.67
|
$
219.18
|
6.6%
|
|
$
221.52
|
$
212.45
|
4.3%
|
|
$
221.52
|
$
211.79
|
4.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Not
included in the above table are the operating statistics of San Juan
Water and Beach Club, which the Company ceased managing effective July
13, 2011, and Hard Rock Hotel & Casino ("Hard Rock"), which the
Company ceased managing effective March 1, 2011.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2)
|
Northeast
Comparable Hotels for the quarters and years ended December 31, 2012
and 2011 consists of Morgans and Royalton in New York and Ames in
Boston. Hudson and Mondrian SoHo, both in New York, are non-comparable
during the periods presented, as Hudson was under major renovations
beginning the fourth quarter of 2011 and continuing throughout 2012 and
Mondrian SoHo opened in late February 2011.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3)
|
West
Coast Comparable Hotels for the quarters and years ended December 31,
2012 and 2011 consists of Mondrian Los Angeles and Clift in San
Francisco. Hard Rock is non-comparable as the Company ceased managing
the hotel effective March 1, 2011.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(4)
|
Miami
Comparable Hotels for the quarters and years ended December 31, 2012
and 2011 consists of Mondrian South Beach and Shore Club in South
Beach, Florida. Delano South Beach is non-comparable for the periods
presented, as the hotel was under major renovation beginning in the
third quarter of 2011 continuing through March 2012. Additionally, the
San Juan Water and Beach Club in Puerto Rico, which was no longer
managed by MHG effective July 13, 2011, is non-comparable for the
periods presented.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(5)
|
United
States Comparable Hotels for the quarters and years ended December 31,
2012 and 2011 consists of Morgans, Royalton, Ames, Mondrian Los
Angeles, Clift, Mondrian South Beach and Shore Club. Hudson, Mondrian
SoHo, Delano, and Hard Rock are considered non-comparable.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(6)
|
International
Comparable Hotels for the quarters and years ended December 31, 2012
and 2011 consists of Sanderson and St Martins Lane in London. Delano
Marrakech is non-comparable for the periods presented, as MHG began
managing it in September 2012 when the hotel opened. Additionally,
Hotel Las Palapas in Mexico is non-comparable, as this hotel is not a
Morgans Hotel Group branded hotel and MHG believes that the hotel
operating data for this hotel does not provide a meaningful depiction
of the performance of its branded hotels.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(7)
|
System-Wide
Comparable Hotels consist of all Morgans Hotel Group hotels operated by
MHG, except for hotels added or under major renovation during the
current or the prior year, development projects and discontinued
operations. System-Wide Comparable Hotels for the quarters and years
ended December 31, 2012 and 2011 excludes Hudson and Delano South
Beach, which were both undergoing renovations beginning in the third
quarter of 2011 and continuing into 2012, Hard Rock, which effective
March 1, 2011 was no longer partially owned or managed by MHG, Mondrian
SoHo, which opened in late February 2011, the San Juan Water and Beach
Club, which was no longer managed by MHG effective July 13, 2011,
Delano Marrakech, which opened in September 2012, and Hotel Las
Palapas, which is not a Morgans Hotel Group branded hotel.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selected
Hotel Operating Statistics (1)
|
(
In Actual Dollars)
|
|
|
(
In Constant Dollars, if different)
|
(
In Actual Dollars)
|
|
|
(
In Constant Dollars, if different)
|
|
|
|
|
Three
Months
|
|
|
Three
Months
|
|
|
Year
Ended
|
|
|
Year
Ended
|
|
|
|
|
|
Ended
December 31,
|
%
|
|
Ended
December 31,
|
%
|
|
Ended
December 31,
|
%
|
|
Ended
December 31,
|
%
|
|
|
|
|
2012
|
2011
|
Change
|
|
2012
|
2011
|
Change
|
|
2012
|
2011
|
Change
|
|
2012
|
2011
|
Change
|
BY
OWNERSHIP
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Owned
Comparable Hotels (2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Occupancy
|
|
75.9%
|
77.6%
|
-2.2%
|
|
|
|
|
|
77.7%
|
79.5%
|
-2.3%
|
|
|
|
|
|
ADR
|
|
|
$
240.85
|
$
230.96
|
4.3%
|
|
|
|
|
|
$
239.82
|
$
219.96
|
9.0%
|
|
|
|
|
|
RevPAR
|
|
|
$
182.81
|
$
179.22
|
2.0%
|
|
|
|
|
|
$
186.34
|
$
174.87
|
6.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Joint
Venture Comparable Hotels (3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Occupancy
|
|
70.9%
|
64.9%
|
9.2%
|
|
|
|
|
|
68.0%
|
65.3%
|
4.1%
|
|
|
|
|
|
ADR
|
|
|
$
280.95
|
$
272.92
|
2.9%
|
|
|
|
|
|
$
272.17
|
$
262.17
|
3.8%
|
|
|
|
|
|
RevPAR
|
|
|
$
199.19
|
$
177.13
|
12.5%
|
|
|
|
|
|
$
185.08
|
$
171.20
|
8.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Managed
Comparable Hotels (4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Occupancy
|
|
80.5%
|
77.5%
|
3.9%
|
|
80.5%
|
77.5%
|
3.9%
|
|
78.6%
|
78.9%
|
-0.4%
|
|
78.6%
|
78.9%
|
-0.4%
|
|
ADR
|
|
|
$
352.54
|
$
346.73
|
1.7%
|
|
$
350.43
|
$
347.98
|
0.7%
|
|
$
336.58
|
$
331.48
|
1.5%
|
|
$
336.58
|
$
329.63
|
2.1%
|
|
RevPAR
|
|
|
$
283.79
|
$
268.72
|
5.6%
|
|
$
282.10
|
$
269.68
|
4.6%
|
|
$
264.55
|
$
261.54
|
1.2%
|
|
$
264.55
|
$
260.08
|
1.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
System-wide
Comparable Hotels (5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Occupancy
|
|
76.2%
|
73.0%
|
4.4%
|
|
76.2%
|
73.0%
|
4.4%
|
|
74.7%
|
74.1%
|
0.8%
|
|
74.7%
|
74.1%
|
0.8%
|
|
ADR
|
|
|
$
307.67
|
$
299.65
|
2.7%
|
|
$
306.66
|
$
300.24
|
2.1%
|
|
$
296.55
|
$
286.71
|
3.4%
|
|
$
296.55
|
$
285.82
|
3.8%
|
|
RevPAR
|
|
|
$
234.44
|
$
218.74
|
7.2%
|
|
$
233.67
|
$
219.18
|
6.6%
|
|
$
221.52
|
$
212.45
|
4.3%
|
|
$
221.52
|
$
211.79
|
4.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Owned
Hotels
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hudson
(6)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Occupancy
|
|
91.5%
|
87.6%
|
4.5%
|
|
|
|
|
|
74.9%
|
88.0%
|
-14.9%
|
|
|
|
|
|
ADR
|
|
|
$
266.62
|
$
263.41
|
1.2%
|
|
|
|
|
|
$
233.63
|
$
220.23
|
6.1%
|
|
|
|
|
|
RevPAR
|
|
|
$
243.96
|
$
230.75
|
5.7%
|
|
|
|
|
|
$
174.99
|
$
193.80
|
-9.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Delano
(6)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Occupancy
|
|
68.7%
|
55.8%
|
23.1%
|
|
|
|
|
|
67.6%
|
64.1%
|
5.5%
|
|
|
|
|
|
ADR
|
|
|
$
535.17
|
$
559.18
|
-4.3%
|
|
|
|
|
|
$
494.49
|
$
498.51
|
-0.8%
|
|
|
|
|
|
RevPAR
|
|
|
$
367.66
|
$
312.02
|
17.8%
|
|
|
|
|
|
$
334.28
|
$
319.54
|
4.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Clift
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Occupancy
|
|
75.9%
|
77.6%
|
-2.2%
|
|
|
|
|
|
77.7%
|
79.5%
|
-2.3%
|
|
|
|
|
|
ADR
|
|
|
$
240.85
|
$
230.96
|
4.3%
|
|
|
|
|
|
$
239.82
|
$
219.96
|
9.0%
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|
|
|
|
RevPAR
|
|
|
$
182.81
|
$
179.22
|
2.0%
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|
|
|
|
|
$
186.34
|
$
174.87
|
6.6%
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(1)
|
Not
included in the above table are the operating statistics of San Juan
Water and Beach Club, which the Company ceased managing effective July
13, 2011, and Hard Rock, which the Company ceased managing effective
March 1, 2011.
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(2)
|
Owned
Comparable Hotels for the quarters and years ended Decemer 31, 2012 and
2011 consists of Clift in San Francisco. Hudson and Delano South Beach
are non-comparable during the periods presented, as beginning in the
second half of 2011 and continuing into 2012, these owned hotels were
under renovation.
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(3)
|
Joint
Venture Comparable Hotels for the quarters and years ended December 31,
2012 and 2011 consists of Mondrian South Beach, Shore Club, and Ames.
Mondrian SoHo and the Hard Rock are non-comparable for the periods
presented, as Mondrian SoHo opened in late February 2011 and effective
March 1, 2011, the Company no longer partially owned or managed Hard
Rock.
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(4)
|
Managed
Comparable Hotels for the quarters and years ended December 31, 2012
and 2011 consists of Sanderson, St Martins Lane, Morgans, Royalton, and
Mondrian Los Angeles. Managed hotels that are non-comparable for the
periods presented are Delano Marrakech, which the Company began
managing in September 2012, the San Juan Water and Beach Club, which
was no longer managed by MHG effective July 13, 2011, and Hotel Las
Palapas, which is not a Morgans Hotel Group branded hotel.
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(5)
|
System-Wide
Comparable Hotels consist of all Morgans Hotel Group hotels operated by
MHG, except for hotels added or under major renovation during the
current or the prior year, development projects and discontinued
operations. System-Wide Comparable Hotels for the quarters and years
ended December 31, 2012 and 2011 excludes Hudson and Delano South
Beach, which were both undergoing renovations beginning in the third
quarter of 2011 and continuing into 2012, Hard Rock, which effective
March 1, 2011 was no longer partially owned or managed by MHG, Mondrian
SoHo, which opened in late February 2011, the San Juan Water and Beach
Club, which was no longer managed by MHG effective July 13, 2011,
Delano Marrakech, which opened in September 2012, and Hotel Las
Palapas, which is not a Morgans Hotel Group branded hotel.
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(6)
|
Beginning
in the latter half of 2011 and continuing into 2012, these owned hotels
were under major renovation.
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Non-GAAP Financial Measures
EBITDA and Adjusted EBITDA
We believe that earnings before interest, income taxes,
depreciation and amortization (EBITDA) is a useful financial metric to
assess our operating performance before the impact of investing and
financing transactions and income taxes. It also facilitates comparison
between us and our competitors. Given the significant investments that
we and our joint ventures have made in the past in property and
equipment, depreciation and amortization expense comprises a meaningful
portion of our cost structure. We believe that EBITDA will provide
investors with a useful tool for assessing the comparability between
periods because it eliminates depreciation and amortization expense
attributable to capital expenditures.
The Company's management has historically used adjusted EBITDA
(Adjusted EBITDA) when evaluating the operating performance for the
entire Company as well as for individual properties or groups of
properties because we believe the Company's core business model is that
of an owner and operator of hotels and food and beverage venues, and
the inclusion or exclusion of certain items is necessary to provide the
most accurate measure of on-going core operating results and to
evaluate comparative results period over period. As such, Adjusted
EBITDA excludes other non-operating expenses (income) that do not
relate to the on-going performance of our assets and excludes the
operating performance of assets in which we do not have a direct or
indirect fee simple ownership interest. We exclude the following items
from EBITDA to arrive at Adjusted EBITDA:
- Other non-operating expenses (income), such as costs
associated with discontinued operations and previously owned hotels,
both consolidated and unconsolidated, transaction costs related to
business acquisitions, changes in the fair value of debt and equity
instruments, miscellaneous litigation and settlement costs and other
expenses that relate to the financing and investing activities of the
Company;
- Restructuring and disposal costs, which include expenses
incurred related to the Company's corporate restructuring initiatives,
such as professional fees, litigation and settlement costs, executive
terminations and severance costs related to such restructuring
initiatives, and losses on asset disposals as part of major renovation
projects;
- Development costs, such as costs incurred related to
development transaction costs, internal development payroll, costs and
pre-opening expenses incurred related to new concepts at existing hotel
and the development of new hotels, and the write-off of abandoned
development projects previously capitalized;
- Impairment loss on development projects and hotels and
receivables from unconsolidated joint ventures. To the extent that
economic conditions do not continue to improve, we may incur additional
non-cash impairment charges related to assets under development,
wholly-owned assets, or our investments in joint ventures. We believe
these adjustments are necessary to provide the most accurate measure of
core operating results as a means to evaluate comparative results;
- EBITDA related to leased hotels to more accurately reflect
the operating performance of assets in which we have a direct or
indirect fee simple ownership interest;
- EBITDA related to hotels reported as discontinued
operations to more accurately reflect the operating performance of
assets in which we expect to have an ongoing direct or indirect
ownership interest;
- Stock-based compensation expense, as this is not
necessarily an indication of the operating performance of our assets;
and
- Gains recognized on asset sales, as we believe that
including them in Adjusted EBITDA is not consistent with reflecting the
ongoing performance of our assets. In addition, we believe material
gains or losses from the net book value of disposed assets is not
particularly meaningful given that the depreciated asset value on which
the gains are calculated often does not reflect market value of the
assets.
We also make an adjustment to EBITDA for hotels in which our
percentage ownership interest has changed to facilitate
period-over-period comparisons and to more accurately reflect the
operating performance of assets based on our actual ownership. In this
respect, our method of calculating Adjusted EBITDA may change from
prior quarters, and calculations of Adjusted EBITDA could continue to
vary from quarter to quarter to reflect changing ownership interests.
We believe Adjusted EBITDA provides management and our
investors with a more accurate financial metric by which to evaluate
our performance as it eliminates the impact of costs incurred related
to investing and financing transactions. Internally, the Company's
management utilizes Adjusted EBITDA to measure the performance of our
core on-going operations and is used extensively during our annual
budgeting process. Management also uses Adjusted EBITDA as a measure in
determining the value of acquisitions, expansion opportunities, and
dispositions and borrowing capacity. Adjusted EBITDA is a key metric
which management evaluates prior to execution of any strategic
investing or financing opportunity.
The Company has historically reported Adjusted EBITDA to its
investors and believes that this continued inclusion of Adjusted EBITDA
provides consistency in its financial reporting and enables investors
to perform more meaningful comparisons of past, present and future
operating results and to evaluate the results of its core on-going
operations.
The use of EBITDA and Adjusted EBITDA has certain limitations.
Our presentation of EBITDA and Adjusted EBITDA may be different from
the presentation used by other companies and therefore comparability
may be limited. Depreciation expense for various long-term assets,
interest expense, income taxes and other items have been and will be
incurred and are not reflected in the presentation of EBITDA or
Adjusted EBITDA. Each of these items should also be considered in the
overall evaluation of our results. Additionally, EBITDA and Adjusted
EBITDA do not reflect capital expenditures and other investing
activities and should not be considered as a measure of our liquidity.
We compensate for these limitations by providing the relevant
disclosure of our depreciation, interest and income tax expense,
capital expenditures and other items in our reconciliations to our
financial measures under accounting principles generally accepted in the United States, or U.S. GAAP, and/or in
our consolidated financial statements, all of which should be
considered when evaluating our performance. The term EBITDA is not
defined under U.S. GAAP and EBITDA is not a measure of net income,
operating income, operating performance or liquidity presented in
accordance with U.S. GAAP. In addition, EBITDA is impacted by
reorganization of businesses and other restructuring-related charges.
When assessing our operating performance, you should not consider this
data in isolation, or as a substitute for our net income, operating
income or any other operating performance measure that is calculated in
accordance with U.S. GAAP.
A reconciliation of net loss, the most directly comparable
U.S. GAAP measures, to EBITDA and Adjusted EBITDA for each of the
respective periods indicated is as follows:
EBITDA
Reconciliation
|
|
|
|
|
|
|
|
|
(In
thousands)
|
|
|
|
|
Three
Months
|
|
Year
Ended
|
|
|
|
|
|
|
Ended
December 31,
|
|
Ended
December 31,
|
|
|
|
|
|
|
2012
|
2011
|
|
2012
|
2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss attributable to Morgans Hotel Group Co.
|
|
$
(12,336)
|
$
(17,117)
|
|
$
(55,687)
|
$
(85,403)
|
Interest
expense, net
|
|
|
|
|
14,650
|
7,731
|
|
38,998
|
35,514
|
Income
tax expense
|
|
|
|
|
228
|
406
|
|
776
|
929
|
Depreciation
and amortization expense
|
|
|
6,540
|
4,814
|
|
23,977
|
22,219
|
Proportionate
share of interest expense
|
|
|
|
|
|
|
|
from
unconsolidated joint ventures
|
|
|
1,483
|
1,634
|
|
5,691
|
8,213
|
Proportionate
share of depreciation expense
|
|
|
|
|
|
|
from
unconsolidated joint ventures
|
|
|
(261)
|
1,236
|
|
2,288
|
6,413
|
Proportionate
share of depreciation expense
|
|
|
|
|
|
|
of
noncontrolling interests in consolidated joint ventures
|
|
-
|
-
|
|
-
|
(183)
|
Net
loss attributable to noncontrolling interest
|
|
(353)
|
(547)
|
|
(1,758)
|
(2,757)
|
Proportionate
share of (loss) income from unconsolidated joint
|
|
|
|
|
|
|
ventures not recorded due to negative investment balances
|
|
(27)
|
(345)
|
|
(3,960)
|
1,559
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
|
|
|
|
|
|
9,924
|
(2,188)
|
|
10,325
|
(13,496)
|
|
|
|
|
|
|
|
|
|
|
|
Add :
Other non operating expense
|
|
|
(282)
|
1,747
|
|
3,908
|
4,632
|
Add :
Other non operating expense from unconsolidated
|
|
|
|
|
|
|
joint
ventures
|
|
|
|
|
1,562
|
6,384
|
|
5,265
|
24,211
|
Add:
Restructuring and disposal costs
|
|
|
3,335
|
1,980
|
|
6,851
|
8,575
|
Add:
Development costs
|
|
|
|
1,595
|
1,793
|
|
5,783
|
5,716
|
Less :
EBITDA from Clift, a leased hotel
|
|
|
(1,136)
|
(1,362)
|
|
(5,782)
|
(5,263)
|
Add :
Stock based compensation
|
|
|
(276)
|
1,698
|
|
4,513
|
9,082
|
Less:
Gain on asset sales
|
|
|
|
(2,005)
|
(1,457)
|
|
(7,989)
|
(3,178)
|
Less:
Income from discontinued operations
|
|
|
-
|
-
|
|
-
|
(485)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
|
|
|
$ 12,717
|
$ 8,595
|
|
$ 22,874
|
$ 29,794
|
|
|
|
|
|
|
|
|
|
|
|
Impact
of Asset Sales and Terminated Joint Venture Interests:
|
|
|
|
|
|
|
Sold
Hotels EBITDA (1)
|
|
|
|
$ -
|
$ (608)
|
|
$ -
|
$ 2,097
|
Sold
Hotels Management Fees - Post-Sale (2)
|
|
730
|
657
|
|
2,749
|
1,850
|
Joint
Venture Asset Sales (3)
|
|
|
|
-
|
1,902
|
|
-
|
7,943
|
Hard
Rock Hotel & Casino EBITDA (4)
|
|
|
-
|
-
|
|
-
|
300
|
Hard
Rock Hotel & Casino Management Fees (5)
|
|
-
|
-
|
|
-
|
832
|
Impact
to Adjusted EBITDA, After Asset Sales and Hard Rock
|
|
$ 730
|
$ 1,951
|
|
$ 2,749
|
$ 13,022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
Reflects the EBITDA of Mondrian Los Angeles, Royalton and Morgans, the
three hotels sold by the Company in May 2011, through their respective
dates of sale. This hotel EBITDA is not reduced by any internal
management fees earned prior to the date of sale, as these are
eliminated in consolidation.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2)
Reflects the management fees earned by the Company from the date of
sale of each of Mondrian Los Angeles, Royalton and Morgans through the
end of the periods.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3)
Reflects the EBITDA of Sanderson and St Martins Lane, the two London
hotels the Company owned through a 50/50 joint venture until November
2011, when the joint venture was sold. The amounts reflected are the
Company's 50% share of the hotels' EBITDA. MHG continues to manage
these hotels.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(4)
Reflects the EBITDA of the hotel for the period the Company owned a
minority interest. Effective March 1, 2011, the Company no longer had
an ownership interest in this hotel.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(5)
Reflects the management fees earned by the Company during the period it
operated the hotel. Effective March 1, 2011, the Company ceased
managing this hotel.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hotel
EBITDA Analysis (1)
|
|
|
|
|
|
|
(In
thousands, except percentages)
|
|
|
|
|
|
|
|
|
|
Three
Months
|
|
|
Year
Ended
|
|
|
|
|
|
Ended
December 31,
|
%
|
|
Ended
December 31,
|
%
|
|
|
|
|
2012
|
2011
|
Change
|
|
2012
|
2011
|
Change
|
|
|
|
|
|
|
|
|
|
|
|
Clift
|
|
|
|
$ 1,136
|
$ 1,362
|
-17%
|
|
$ 5,782
|
$ 5,263
|
10%
|
Shore
Club
|
|
|
69
|
(28)
|
-346%
|
|
165
|
136
|
21%
|
Mondrian
South Beach
|
|
579
|
710
|
-18%
|
|
759
|
1,087
|
-30%
|
Ames
|
|
|
|
39
|
2
|
1850%
|
|
177
|
105
|
69%
|
|
|
|
|
|
|
|
|
|
|
|
|
Owned
and Joint Venture Comparable Hotels (2)
|
1,823
|
2,046
|
-11%
|
|
6,883
|
6,591
|
4%
|
|
|
|
|
|
|
|
|
|
|
|
Morgans
(3)
|
|
|
-
|
(598)
|
n/m
|
|
-
|
(1,435)
|
n/m
|
Royalton
(3)
|
|
|
-
|
(4)
|
n/m
|
|
-
|
217
|
n/m
|
Mondrian
Los Angeles (3)
|
|
-
|
(6)
|
n/m
|
|
-
|
3,315
|
n/m
|
St
Martins Lane (4)
|
|
|
454
|
1,377
|
-67%
|
|
(140)
|
5,000
|
-103%
|
Sanderson
(4)
|
|
|
91
|
525
|
-83%
|
|
(843)
|
2,943
|
-129%
|
|
Sold
Hotels
|
|
545
|
1,294
|
-58%
|
|
(983)
|
10,040
|
-110%
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
System-Wide Comparable Hotels
|
2,368
|
3,340
|
-29%
|
|
5,900
|
16,631
|
-65%
|
|
|
|
|
|
|
|
|
|
|
|
Hudson
(5)
|
|
|
7,891
|
5,912
|
33%
|
|
10,992
|
14,142
|
-22%
|
Delano
(5)
|
|
|
4,163
|
3,000
|
39%
|
|
13,844
|
13,700
|
1%
|
Hard
Rock - Joint Venture (6)
|
|
-
|
-
|
n/m
|
|
-
|
300
|
n/m
|
Mondrian
SoHo - Joint Venture (7)
|
626
|
370
|
69%
|
|
1,749
|
1,230
|
42%
|
|
|
|
|
|
.
|
|
|
|
|
|
|
Total
Hotels
|
|
$ 15,048
|
$ 12,622
|
19%
|
|
$ 32,485
|
$ 46,003
|
-29%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
For joint venture hotels, represents MHG's share of the respective
hotels' EBITDA, after management fees.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2)
Reflects System-Wide Comparable Hotels that are owned or partially
owned by MHG.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3) In
May 2011, MHG sold these three hotels. Information is for the period
MHG owned the hotels, and is not reduced by any internal management
fees earned prior to the date of sale, as these are eliminated in
consolidation.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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(4) In
November 2011, MHG and Walton Street, each 50/50 joint venture
partners, sold the joint venture entity that owned the Sanderson and St
Martins Lane hotels. Following the sale of the joint venture entity,
MHG continues to own and operate the food and beverage venues at the
hotels under a lease agreement with the hotel owner. Amounts in 2011
represent MHG's share of the respective hotels' EBITDA, after
management fees. Amounts in 2012 represent the respective hotels' food
and beverage EBITDA, after management fees.
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(5)
Beginning in the third quarter of 2011 and continuing into 2012, these
owned hotels were under renovation. The renovation at Delano was
completed during the second quarter of 2012 and the room and corridor
renovation at Hudson was completed in late September 2012.
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(6)
MHG had a minority ownership interest in this hotel until March 1,
2011. Information is for the period MHG had an ownership interest in
the hotel.
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(7)
This hotel opened in February 2011. Information is for the period the
hotel was open.
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Owned
Hotel Room Revenue Analysis
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(In
thousands, except percentages)
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Three
Months
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Year
Ended
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Ended
December 31,
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%
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Ended
December 31,
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%
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2012
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2011
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Change
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2012
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2011
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Change
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Hudson
(1)
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$
18,796
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$
17,699
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6%
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$
53,463
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$
58,993
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-9%
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Delano
(1)
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6,565
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5,572
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18%
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23,722
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22,612
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5%
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Clift
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6,255
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6,129
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2%
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25,361
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23,732
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7%
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Total
Owned Hotels (2)
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$ 31,616
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$ 29,400
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8%
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$ 102,546
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$ 105,337
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-3%
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Owned
Hotel Revenue Analysis
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Three
Months
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Year
Ended
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(In
thousands, except percentages)
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Ended
December 31,
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%
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Ended
December 31,
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%
|
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2012
|
2011
|
Change
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2012
|
2011
|
Change
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Hudson
(1)
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$
21,147
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$
21,331
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-1%
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$
62,279
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$
73,112
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-15%
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Delano
(1)
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|
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12,192
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10,392
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17%
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45,511
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44,697
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2%
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Clift
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9,701
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9,786
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-1%
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37,543
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36,379
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3%
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Total
Owned Hotels (2)
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$ 43,040
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$ 41,509
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4%
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$ 145,333
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$ 154,188
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-6%
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(1)
Beginning in the third quarter of 2011 and continuing into 2012, these
owned hotels were under renovation. The renovation at Delano was
completed during the second quarter of 2012 and the room and corridor
renovation at Hudson was completed in late September 2012.
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(2)
Does not include revenue from the three hotels sold in May 2011,
Royalton, Morgans or Mondrian Los Angeles, for the period owned during
the year ended December 31, 2011, as these hotels are no longer owned
hotels.
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Balance
Sheets
|
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(In
thousands)
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|
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|
December
31,
|
|
December
31,
|
|
2012
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|
2011
(1)
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(restated)
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ASSETS:
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Property
and equipment, net
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$
303,689
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$
289,169
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Goodwill
|
66,572
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|
66,572
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Investments
in and advances to unconsolidated joint ventures
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11,178
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|
10,201
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Cash
and cash equivalents
|
5,847
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|
28,855
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Restricted
cash
|
21,226
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|
9,938
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Accounts
receivable, net
|
16,592
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|
10,827
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Related
party receivables
|
5,754
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|
4,142
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Prepaid
expenses and other assets
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8,691
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|
5,293
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Deferred
tax asset, net
|
78,758
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|
78,778
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Investment
in TLG management contracts, net
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29,469
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|
35,254
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Other,
net
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43,379
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|
16,415
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Total
assets
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$ 591,155
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$ 555,444
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LIABILITIES
and STOCKHOLDERS' DEFICIT:
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Debt
and capital lease obligations, net
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$
538,143
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$
439,905
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Accounts
payable and accrued liabilities
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34,627
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|
36,576
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Deferred
gain on asset sales
|
141,401
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|
148,760
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Other
liabilities
|
14,301
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|
14,394
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Total
liabilities
|
728,472
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|
639,635
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Redeemable
noncontrolling interest
|
6,053
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|
5,448
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Commitments
and contingencies
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|
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Total
Morgans Hotel Group Co. stockholders' deficit
|
(149,436)
|
|
(97,463)
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Noncontrolling
interest
|
6,066
|
|
7,824
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Total
stockholders' deficit
|
(143,370)
|
|
(89,639)
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Total
liabilities, redeemable noncontrolling interest and stockholders'
deficit
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$ 591,155
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$ 555,444
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(1)
The 2011 balance sheet has been restated for the final purchase price
allocation of the Company's acquisiton of a 90% controlling interest in
The Light Group, which was acquired in November 2011.
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