CHICAGO, Aug. 4, 2014 /PRNewswire/ -- Strategic Hotels
& Resorts, Inc. (NYSE: BEE) today reported results for the
second quarter ended June 30,
2014.
($ in millions,
except per share and operating metrics)
|
Second
Quarter
|
Earnings
Metrics
|
2014
|
2013
|
%
Change
|
Net income
attributable to common shareholders
|
$80.8
|
$3.3
|
2,369.2%
|
Net income per
diluted share
|
$0.35
|
$0.01
|
3,400.0%
|
Comparable funds from
operations (Comparable FFO) (a)
|
$48.1
|
$28.7
|
67.8%
|
Comparable FFO per
diluted share (a)
|
$0.21
|
$0.14
|
50.0%
|
Comparable EBITDA
(a)
|
$68.9
|
$60.3
|
14.3%
|
|
|
|
|
Total United
States Portfolio Operating Metrics (b)
|
|
|
|
Average Daily Rate
(ADR)
|
$296.15
|
$282.24
|
4.9%
|
Occupancy
|
79.6%
|
79.3%
|
0.3
pts
|
Revenue per Available
Room (RevPAR)
|
$235.68
|
$223.80
|
5.3%
|
Total
RevPAR
|
$447.26
|
$417.10
|
7.2%
|
EBITDA
Margins
|
28.1%
|
26.4%
|
170 bps
|
|
|
(a)
|
Please refer to
the tables provided later in this press release for a
reconciliation of net income attributable to common shareholders to
Comparable FFO, Comparable FFO per 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 which is derived from the Company's hotel portfolio at
June 30, 2014, consisting of all 15 properties located in the
United States.
|
"Building upon the positive momentum from the first quarter, we
drove continued high performance among all our key metrics in the
first half of 2014, perhaps most notably within group room nights
and related ancillary spend," said Raymond L. "Rip" Gellein,
Chairman and Chief Executive Officer of Strategic Hotels &
Resorts, Inc. "Total RevPAR grew 7.2% while EBITDA margins
expanded 170 basis points leading to a 14.3% increase in Comparable
EBITDA and a 50.0% increase in Comparable FFO per share in the
second quarter; which were all above consensus estimates. From a
transactional perspective, the Company has completed nearly
$2.7 billion in gross transactions
since the beginning of the year, with second quarter highlights
including the acquisition of the remaining interest in the iconic
Hotel del Coronado, raising or refinancing nearly $1.0 billion of capital and retiring $200 million of high cost preferred equity.
This has allowed us to continue building the highest quality
portfolio in the industry, while lowering our cost of capital and
further deleveraging our balance sheet. I remain very
optimistic about the second half of the year, which is why we have
upwardly revised the lower end of our guidance ranges."
Second Quarter Highlights
- Total consolidated revenues were $276.2
million in the second quarter of 2014, a 21.6 percent
increase over the prior year period.
- Net income attributable to common shareholders was $80.8 million, or $0.35 per diluted share, in the second quarter of
2014, compared with $3.3 million, or
$0.01 per diluted share, in the
second quarter of 2013.
- Comparable FFO was $0.21 per
diluted share in the second quarter of 2014, compared with
$0.14 per diluted share in the prior
year period, a 50.0 percent increase over the prior year
period.
- Comparable EBITDA was $68.9 million in the second quarter of 2014,
compared with $60.3 million in the
prior year period, a 14.3 percent increase between periods.
- Total United States portfolio
RevPAR increased 5.3 percent in the second quarter of 2014, driven
by a 4.9 percent increase in ADR and a 0.3 percentage point
increase in occupancy compared to the second quarter of 2013.
Total RevPAR increased 7.2 percent between periods with non-rooms
revenue increasing by 9.4 percent between periods.
- Transient occupied room nights in the Total United States
portfolio increased 0.6 percent in the second quarter 2014 and
group occupied room nights were flat compared to the second quarter
of 2013. Transient ADR increased 5.5 percent compared to the
second quarter of 2013 and group ADR increased 3.9 percent.
- Total United States portfolio
EBITDA margins expanded 170 basis points in the second quarter of
2014, compared to the second quarter of 2013.
- Group room nights currently booked for 2014 are 7.2 percent
higher compared to room nights booked for 2013 at the same time
last year, with rates 3.2 percent higher, resulting in a 10.6
percent RevPAR increase.
The Company reported financial results for the six month period
ended June 30, 2014 as follows:
- Total consolidated revenues were $470.8
million for the six month period ended June 30, 2014, a 15.3 percent increase over the
prior year period.
- Net income attributable to common shareholders was $298.0 million, or $1.30 per diluted share, compared with net loss
attributable to common shareholders of $20.2
million, or $0.11 per diluted
share, for the six month period ended June
30, 2013.
- Comparable FFO was $0.28 per
diluted share compared with $0.15 per
diluted share in the six month period ended June 30, 2013.
- Comparable EBITDA was $110.1 million compared with $94.8 million for the six month period ended
June 30, 2013, a 16.2 percent
increase between periods.
Preferred Dividends & Redemptions
On April 3, 2014, the Company
completed the redemption of all of the outstanding 4,148,141 shares
of its 8.50% Series A Cumulative Redeemable Preferred Stock (the
"Series A Preferred Shares") at a redemption price of $25.00 per share, plus accrued and unpaid
dividends in the amount of $0.54896
per share, for a total redemption cost of $106.0 million. The redemption of the
Series A Preferred Shares eliminated approximately $6.5 million in dividend payments in 2014 and
$8.8 million of dividend payments on
an annual basis.
On June 2, 2014, the Company's
board of directors declared a quarterly dividend of $0.51563 per share of 8.25% Series B Cumulative
Redeemable Preferred Stock and 8.25% Series C Cumulative Redeemable
Preferred Stock, which was paid on June 30,
2014 to shareholders of record as of the close of business
on June 16, 2014.
On July 3, 2014, the Company
completed the redemption of all of the outstanding 3,827,727 shares
of its 8.25% Series C Cumulative Redeemable Preferred Stock (the
"Series C Preferred Shares") at a redemption price of $25.00 per share, plus accrued and unpaid
dividends in the amount of $0.01719
per share, for a total redemption cost of $95.8 million. The redemption of the Series
C Preferred Shares eliminated approximately $3.9 million in dividend payments in 2014 and
$7.9 million in dividend payments on
an annual basis.
Transaction Activity
On April 21, 2014, the Company
paid $22.7 million to terminate its
$400.0 million notional value
interest rate swap portfolio, which will reduce cash interest
expense by approximately $11.5
million in 2014. The swap portfolio had a weighted
average LIBOR interest rate of 5.09 percent.
On April 25, 2014, the Company
closed on a new $300.0 million stock
secured credit facility with an accordion feature allowing for
additional borrowing capacity up to $400.0
million. The facility's interest rate is based upon a
leverage-based pricing grid ranging from LIBOR plus 175 basis
points to LIBOR plus 250 basis points. The initial pricing is
LIBOR plus 200 basis points, representing a 75 basis point decline
from the Company's previous credit facility.
On May 29, 2014, the Company
closed on a $120.0 million loan
secured by the Loews Santa Monica Beach Hotel. The loan bears
interest at a floating rate of LIBOR plus 255 basis points and has
a seven-year term, including extension options.
On June 2, 2014, the Company
closed on an underwritten public offering of 41.4 million shares of
common stock at a public offering price of $10.50 per share, including 5.4 million shares of
common stock issued pursuant to the exercise in full of the
underwriters' over-allotment option. The Company received
$416.8 million from the offering
after deducting underwriting discounts and commissions and
transaction expenses related to the offering. The Company
used the net proceeds from the offering to fund the acquisition of
the 63.6 percent ownership interest in the Hotel del Coronado that
it did not previously own from its joint venture partner, to
redeem all of the issued and outstanding Series C Preferred Shares,
and for general corporate purposes.
On June 11, 2014, the Company
closed on the acquisition of the 63.6 percent ownership interest in
the Hotel del Coronado that it did not previously own for
$210.0 million in cash and became
fully obligated under the entire $475.0
million loan encumbering the property.
On June 30, 2014, the Company
closed on a $120.0 million loan
secured by the Four Seasons Washington,
D.C. hotel. The loan bears interest at a floating rate
of LIBOR plus 225 basis points and has a five-year term, including
extension options.
2014 Guidance
Based on the results of the first six months of 2014 and current
forecasts for the remainder of the year, management is raising the
lower end of its guidance ranges for full year 2014 RevPAR growth,
Total RevPAR growth, EBITDA margin expansion, Comparable EBITDA and
Comparable FFO per fully diluted share.
For the full-year ending December 31,
2014, the Company is providing the following guidance
ranges:
Guidance
Metrics
|
Previous
Range
|
|
Revised
Range
|
RevPAR
|
5.0% -
7.0%
|
|
5.5% -
7.0%
|
Total
RevPAR
|
5.0% -
7.0%
|
|
5.5% -
7.0%
|
EBITDA Margin
expansion
|
120 – 200 basis
points
|
|
150 – 200 basis
points
|
Comparable
EBITDA
|
$230M -
$250M
|
|
$235M -
$250M
|
Comparable FFO per
diluted share
|
$0.59 -
$0.68
|
|
$0.62 -
$0.68
|
Earnings Call
The Company will conduct its second quarter 2014 conference call
for investors and other interested parties on Tuesday, August 5, 2014 at 10:00 a.m. Eastern Time (ET). Interested
individuals are invited to access the call by dialing 866.953.6860
(toll international: 617.399.3484) with passcode 73605986. 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/jmm8mnof/lan/en 15 minutes before
the call to download the necessary software.
For those unable to listen to the call live, a taped rebroadcast
will be available beginning at 2:00 p.m.
ET on August 5, 2014 through
11:59 p.m. ET on August 12, 2014. To access the replay, dial
888.286.8010 (toll international: 617.801.6888) with passcode
16079435. 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.
About the Company
Strategic Hotels & Resorts, Inc. is a real estate investment
trust (REIT) which owns and provides value-enhancing asset
management of high-end hotels and resorts in the United States and Europe. The Company currently has ownership
interests in 16 properties with an aggregate of 7,865 rooms and
835,000 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, positive trends
in the lodging industry and the Company's continued focus on
improving profitability. Actual results could differ materially
from the Company's projections. Factors that may contribute to
these differences include, but are not limited to the
following: the effects of economic conditions and disruption
in financial markets upon business and leisure travel and the hotel
markets in which the Company invests; the Company's liquidity and
refinancing demands; the Company's ability to obtain, refinance or
extend maturing debt; the Company's ability to maintain compliance
with covenants contained in its debt facilities; stagnation or
deterioration in economic and market conditions, particularly
impacting business and leisure travel spending in the markets where
the Company's hotels operate and in which the Company invests,
including luxury and upper upscale product; general volatility of
the capital markets and the market price of the Company's shares of
common stock; availability of capital; the Company's ability to
dispose of properties in a manner consistent with its investment
strategy and liquidity needs; hostilities and security concerns,
including future terrorist attacks, or the apprehension of
hostilities, in each case that affect travel within or to
the United States, Germany or other countries where the Company
invests; difficulties in identifying properties to acquire and
completing acquisitions; the Company's failure to maintain
effective internal control over financial reporting and disclosure
controls and procedures; risks related to natural disasters;
increases in interest rates and operating costs, including
insurance premiums and real property taxes; 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 SEC, 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.
|
Strategic Hotels
& Resorts, Inc. and Subsidiaries (SHR)
Consolidated
Statements of Operations
(in thousands,
except per share data)
|
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
Rooms
|
|
$
|
148,874
|
|
|
$
|
127,484
|
|
|
$
|
251,974
|
|
|
$
|
225,748
|
|
Food and
beverage
|
|
100,028
|
|
|
79,966
|
|
|
170,045
|
|
|
142,023
|
|
Other hotel operating
revenue
|
|
25,942
|
|
|
18,491
|
|
|
46,181
|
|
|
38,150
|
|
Lease
revenue
|
|
1,319
|
|
|
1,160
|
|
|
2,618
|
|
|
2,360
|
|
Total
revenues
|
|
276,163
|
|
|
227,101
|
|
|
470,818
|
|
|
408,281
|
|
Operating Costs
and Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Rooms
|
|
41,268
|
|
|
36,087
|
|
|
74,975
|
|
|
67,850
|
|
Food and
beverage
|
|
67,077
|
|
|
57,289
|
|
|
121,680
|
|
|
108,839
|
|
Other departmental
expenses
|
|
66,238
|
|
|
53,285
|
|
|
119,817
|
|
|
104,466
|
|
Management
fees
|
|
9,241
|
|
|
6,447
|
|
|
15,019
|
|
|
11,457
|
|
Other hotel
expenses
|
|
15,572
|
|
|
15,234
|
|
|
31,250
|
|
|
30,123
|
|
Lease
expense
|
|
1,260
|
|
|
1,206
|
|
|
2,518
|
|
|
2,382
|
|
Depreciation and
amortization
|
|
28,058
|
|
|
24,691
|
|
|
50,263
|
|
|
49,599
|
|
Corporate
expenses
|
|
7,198
|
|
|
7,209
|
|
|
14,391
|
|
|
12,972
|
|
Total operating costs
and expenses
|
|
235,912
|
|
|
201,448
|
|
|
429,913
|
|
|
387,688
|
|
Operating
income
|
|
40,251
|
|
|
25,653
|
|
|
40,905
|
|
|
20,593
|
|
Interest
expense
|
|
(19,587)
|
|
|
(19,460)
|
|
|
(37,861)
|
|
|
(39,123)
|
|
Interest
income
|
|
50
|
|
|
20
|
|
|
77
|
|
|
30
|
|
Equity in earnings of
unconsolidated affiliates
|
|
826
|
|
|
1,456
|
|
|
5,271
|
|
|
2,801
|
|
Foreign currency
exchange (loss) gain
|
|
(8)
|
|
|
84
|
|
|
(6)
|
|
|
(2)
|
|
Gain on consolidation
of affiliates
|
|
65,349
|
|
|
—
|
|
|
143,466
|
|
|
—
|
|
Other income,
net
|
|
795
|
|
|
745
|
|
|
1,218
|
|
|
877
|
|
Income (loss) before
income taxes and discontinued operations
|
|
87,676
|
|
|
8,498
|
|
|
153,070
|
|
|
(14,824)
|
|
Income tax
expense
|
|
(207)
|
|
|
(72)
|
|
|
(246)
|
|
|
(85)
|
|
Income (loss) from
continuing operations
|
|
87,469
|
|
|
8,426
|
|
|
152,824
|
|
|
(14,909)
|
|
Income from
discontinued operations, net of tax
|
|
604
|
|
|
329
|
|
|
159,039
|
|
|
2,318
|
|
Net Income
(Loss)
|
|
88,073
|
|
|
8,755
|
|
|
311,863
|
|
|
(12,591)
|
|
Net (income) loss
attributable to the noncontrolling interests in SHR's operating
partnership
|
|
(281)
|
|
|
(36)
|
|
|
(1,130)
|
|
|
51
|
|
Net loss attributable
to the noncontrolling interests in consolidated
affiliates
|
|
217
|
|
|
597
|
|
|
4,258
|
|
|
4,449
|
|
Net Income (Loss)
attributable to SHR
|
|
88,009
|
|
|
9,316
|
|
|
314,991
|
|
|
(8,091)
|
|
Preferred shareholder
dividends
|
|
(7,169)
|
|
|
(6,042)
|
|
|
(16,993)
|
|
|
(12,083)
|
|
Net Income (Loss)
Attributable to SHR Common Shareholders
|
|
$
|
80,840
|
|
|
$
|
3,274
|
|
|
$
|
297,998
|
|
|
$
|
(20,174)
|
|
Basic Income
(Loss) Per Common Share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from
continuing operations attributable to SHR common
shareholders
|
|
$
|
0.36
|
|
|
$
|
0.02
|
|
|
$
|
0.65
|
|
|
$
|
(0.11)
|
|
Income from
discontinued operations attributable to SHR common
shareholders
|
|
—
|
|
|
—
|
|
|
0.74
|
|
|
0.01
|
|
Net income (loss)
attributable to SHR common shareholders
|
|
$
|
0.36
|
|
|
$
|
0.02
|
|
|
$
|
1.39
|
|
|
$
|
(0.10)
|
|
Weighted average
shares of common stock outstanding
|
|
222,013
|
|
|
206,061
|
|
|
214,450
|
|
|
205,849
|
|
Diluted Income
(Loss) Per Common Share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from
continuing operations attributable to SHR common
shareholders
|
|
$
|
0.35
|
|
|
$
|
0.01
|
|
|
$
|
0.60
|
|
|
$
|
(0.12)
|
|
Income from
discontinued operations attributable to SHR common
shareholders
|
|
—
|
|
|
—
|
|
|
0.70
|
|
|
0.01
|
|
Net income (loss)
attributable to SHR common shareholders
|
|
$
|
0.35
|
|
|
$
|
0.01
|
|
|
$
|
1.30
|
|
|
$
|
(0.11)
|
|
Weighted average
shares of common stock outstanding
|
|
233,463
|
|
|
219,227
|
|
|
225,900
|
|
|
217,006
|
|
|
Strategic Hotels
& Resorts, Inc. and Subsidiaries (SHR)
Consolidated
Balance Sheets
(in thousands,
except share data)
|
|
|
|
June 30,
2014
|
|
December 31,
2013
|
Assets
|
|
|
|
|
|
|
Investment in hotel
properties, net
|
|
$
|
2,722,752
|
|
|
$
|
1,795,338
|
|
Goodwill
|
|
38,128
|
|
|
38,128
|
|
Intangible assets,
net of accumulated amortization of $3,716 and $11,753
|
|
91,635
|
|
|
29,502
|
|
Assets held for
sale
|
|
—
|
|
|
135,901
|
|
Investment in
unconsolidated affiliates
|
|
22,910
|
|
|
104,973
|
|
Cash and cash
equivalents
|
|
245,468
|
|
|
73,655
|
|
Restricted cash and
cash equivalents
|
|
91,480
|
|
|
75,916
|
|
Accounts receivable,
net of allowance for doubtful accounts of $466 and $606
|
|
67,241
|
|
|
39,660
|
|
Deferred financing
costs, net of accumulated amortization of $12,686 and
$12,354
|
|
9,852
|
|
|
8,478
|
|
Deferred tax
assets
|
|
2,134
|
|
|
—
|
|
Prepaid expenses and
other assets
|
|
46,646
|
|
|
35,600
|
|
Total
assets
|
|
$
|
3,338,246
|
|
|
$
|
2,337,151
|
|
Liabilities,
Noncontrolling Interests and Equity
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
Mortgages and other
debt payable, net of discount
|
|
$
|
1,636,450
|
|
|
$
|
1,163,696
|
|
Bank credit
facility
|
|
—
|
|
|
110,000
|
|
Liabilities of assets
held for sale
|
|
—
|
|
|
17,027
|
|
Accounts payable and
accrued expenses
|
|
204,171
|
|
|
189,889
|
|
Preferred stock
redemption liability
|
|
95,693
|
|
|
—
|
|
Distributions
payable
|
|
128
|
|
|
—
|
|
Deferred tax
liabilities
|
|
45,778
|
|
|
46,137
|
|
Total
liabilities
|
|
1,982,220
|
|
|
1,526,749
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
Noncontrolling
interests in SHR's operating partnership
|
|
9,336
|
|
|
7,534
|
|
Equity:
|
|
|
|
|
|
|
SHR's shareholders'
equity:
|
|
|
|
|
|
|
8.50% Series A
Cumulative Redeemable Preferred Stock ($0.01 par value per share; 0
and 4,148,141 shares issued and outstanding; liquidation preference
$25.00 per share plus accrued distributions and $0 and $103,704 in
the aggregate)
|
|
—
|
|
|
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 $90,446 and $90,384
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 $95,759 and $95,693
in the aggregate)
|
|
—
|
|
|
92,489
|
|
Common stock ($0.01
par value per share; 350,000,000 shares of common stock authorized;
247,371,386 and 205,582,838 shares of common stock issued and
outstanding)
|
|
2,474
|
|
|
2,056
|
|
Additional paid-in
capital
|
|
2,105,749
|
|
|
1,705,306
|
|
Accumulated
deficit
|
|
(919,961)
|
|
|
(1,234,952)
|
|
Accumulated other
comprehensive loss
|
|
(19,176)
|
|
|
(41,445)
|
|
Total SHR's
shareholders' equity
|
|
1,256,150
|
|
|
710,513
|
|
Noncontrolling
interests in consolidated affiliates
|
|
90,540
|
|
|
92,355
|
|
Total
equity
|
|
1,346,690
|
|
|
802,868
|
|
Total liabilities,
noncontrolling interests and equity
|
|
$
|
3,338,246
|
|
|
$
|
2,337,151
|
|
|
Strategic Hotels
& Resorts, Inc. and Subsidiaries (SHR)
Financial
Highlights
Supplemental
Financial Data
(in thousands,
except per share information)
|
|
|
|
June 30,
2014
|
|
|
Pro Rata Share
|
|
Consolidated
|
Capitalization
|
|
|
|
|
|
|
Shares of common
stock outstanding
|
|
247,371
|
|
|
247,371
|
|
Operating partnership
units outstanding
|
|
797
|
|
|
797
|
|
Restricted stock
units outstanding
|
|
1,446
|
|
|
1,446
|
|
Combined shares and
units outstanding
|
|
249,614
|
|
|
249,614
|
|
Common stock price at
end of period
|
|
$
|
11.71
|
|
|
$
|
11.71
|
|
Common equity
capitalization
|
|
$
|
2,922,980
|
|
|
$
|
2,922,980
|
|
Preferred equity
capitalization (at $25.00 face value)
|
|
90,384
|
|
|
90,384
|
|
Preferred stock
redemption liability
|
|
95,693
|
|
|
95,693
|
|
Consolidated
debt
|
|
1,638,319
|
|
|
1,638,319
|
|
Pro rata share of
consolidated debt
|
|
(132,568)
|
|
|
—
|
|
Cash and cash
equivalents
|
|
(245,468)
|
|
|
(245,468)
|
|
Total enterprise
value
|
|
$
|
4,369,340
|
|
|
$
|
4,501,908
|
|
Net Debt / Total
Enterprise Value
|
|
31.0
|
%
|
|
33.1
|
%
|
Preferred Equity /
Total Enterprise Value
|
|
2.1
|
%
|
|
2.0
|
%
|
Common Equity / Total
Enterprise Value
|
|
66.9
|
%
|
|
64.9
|
%
|
|
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 hotels were sold during the six
months ended June 30, 2014:
|
|
Hotel
|
|
Location
|
|
Date Sold
|
|
Sales Proceeds
|
|
Four Seasons Punta
Mita Resort and La Solana land parcel
|
|
Punta Mita,
Mexico
|
|
February 28,
2014
|
|
$
|
203,197,000
|
|
|
Marriott London
Grosvenor Square
|
|
London,
England
|
|
March 31,
2014
|
|
$
|
208,306,000
|
|
(a)
|
(a)
|
There was an
outstanding balance of £67,301,000 ($112,150,000) on the mortgage
loan secured by the Marriott London Grosvenor Square hotel, which
was repaid at the time of closing. The net proceeds we
received were $96,156,000.
|
The following is a summary of income from discontinued
operations for the three and six months ended June 30, 2014
and 2013 (in thousands):
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
Hotel operating
revenues
|
|
$
|
—
|
|
|
$
|
17,064
|
|
|
$
|
17,767
|
|
|
$
|
37,351
|
|
Operating costs and
expenses
|
|
—
|
|
|
11,778
|
|
|
11,485
|
|
|
25,500
|
|
Depreciation and
amortization
|
|
—
|
|
|
2,306
|
|
|
1,275
|
|
|
4,616
|
|
Total operating costs
and expenses
|
|
—
|
|
|
14,084
|
|
|
12,760
|
|
|
30,116
|
|
Operating
income
|
|
—
|
|
|
2,980
|
|
|
5,007
|
|
|
7,235
|
|
Interest
expense
|
|
—
|
|
|
(1,819)
|
|
|
(1,326)
|
|
|
(3,642)
|
|
Interest
income
|
|
—
|
|
|
1
|
|
|
2
|
|
|
3
|
|
Loss on early
extinguishment of debt
|
|
—
|
|
|
—
|
|
|
(272)
|
|
|
—
|
|
Foreign currency
exchange (loss) gain
|
|
—
|
|
|
(138)
|
|
|
32
|
|
|
188
|
|
Income tax
expense
|
|
—
|
|
|
(695)
|
|
|
(833)
|
|
|
(1,466)
|
|
Gain on sale, net of
tax
|
|
604
|
|
|
—
|
|
|
156,429
|
|
|
—
|
|
Income from
discontinued operations
|
|
$
|
604
|
|
|
$
|
329
|
|
|
$
|
159,039
|
|
|
$
|
2,318
|
|
|
Strategic Hotels
& Resorts, Inc. and Subsidiaries (SHR)
Investments in
Unconsolidated Affiliates
(in
thousands)
|
|
We had a 36.4% equity
ownership interest in the Hotel del Coronado that we accounted for
using the equity method of accounting until we acquired the
remaining 63.6% equity ownership interest not previously owned by
us on June 11, 2014. We had a 50.0% equity ownership interest in
the Fairmont Scottsdale Princess hotel that we accounted for using
the equity method of accounting until we acquired the remaining
50.0% equity ownership interest not previously owned by us on March
31, 2014. For purposes of this analysis, the operating results
reflect the 36.4% equity ownership interest we held in the Hotel
del Coronado prior to June 11, 2014 and the 50.0% equity ownership
interest we held in the Fairmont Scottsdale Princess hotel prior to
March 31, 2014.
|
|
|
|
Three Months Ended
June 30, 2014
|
|
Three Months Ended
June 30, 2013
|
|
|
Hotel
del
Coronado
|
|
Fairmont
Scottsdale
Princess
|
|
Total
|
|
Hotel
del
Coronado
|
|
Fairmont
Scottsdale
Princess
|
|
Total
|
Total revenues
(100%)
|
|
$
|
33,821
|
|
|
$
|
—
|
|
|
$
|
33,821
|
|
|
$
|
37,758
|
|
|
$
|
24,204
|
|
|
$
|
61,962
|
|
Property EBITDA
(100%)
|
|
$
|
11,202
|
|
|
$
|
—
|
|
|
$
|
11,202
|
|
|
$
|
11,946
|
|
|
$
|
5,504
|
|
|
$
|
17,450
|
|
Equity in earnings of
unconsolidated affiliates (SHR ownership)
|
|
|
|
|
|
|
|
|
|
|
|
|
Property
EBITDA
|
|
$
|
4,075
|
|
|
$
|
—
|
|
|
$
|
4,075
|
|
|
$
|
4,345
|
|
|
$
|
2,752
|
|
|
$
|
7,097
|
|
Depreciation and
amortization
|
|
(1,572)
|
|
|
—
|
|
|
(1,572)
|
|
|
(1,886)
|
|
|
(1,632)
|
|
|
(3,518)
|
|
Interest
expense
|
|
(1,518)
|
|
|
—
|
|
|
(1,518)
|
|
|
(1,944)
|
|
|
(196)
|
|
|
(2,140)
|
|
Other expenses,
net
|
|
(18)
|
|
|
—
|
|
|
(18)
|
|
|
(7)
|
|
|
(11)
|
|
|
(18)
|
|
Income
taxes
|
|
(87)
|
|
|
—
|
|
|
(87)
|
|
|
(31)
|
|
|
—
|
|
|
(31)
|
|
Equity in earnings of
unconsolidated affiliates
|
|
$
|
880
|
|
|
$
|
—
|
|
|
$
|
880
|
|
|
$
|
477
|
|
|
$
|
913
|
|
|
$
|
1,390
|
|
EBITDA
Contribution:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in earnings of
unconsolidated affiliates
|
|
$
|
880
|
|
|
$
|
—
|
|
|
$
|
880
|
|
|
$
|
477
|
|
|
$
|
913
|
|
|
$
|
1,390
|
|
Depreciation and
amortization
|
|
1,572
|
|
|
—
|
|
|
1,572
|
|
|
1,886
|
|
|
1,632
|
|
|
3,518
|
|
Interest
expense
|
|
1,518
|
|
|
—
|
|
|
1,518
|
|
|
1,944
|
|
|
196
|
|
|
2,140
|
|
Income
taxes
|
|
87
|
|
|
—
|
|
|
87
|
|
|
31
|
|
|
—
|
|
|
31
|
|
EBITDA
Contribution
|
|
$
|
4,057
|
|
|
$
|
—
|
|
|
$
|
4,057
|
|
|
$
|
4,338
|
|
|
$
|
2,741
|
|
|
$
|
7,079
|
|
FFO
Contribution:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in earnings of
unconsolidated affiliates
|
|
$
|
880
|
|
|
$
|
—
|
|
|
$
|
880
|
|
|
$
|
477
|
|
|
$
|
913
|
|
|
$
|
1,390
|
|
Depreciation and
amortization
|
|
1,572
|
|
|
—
|
|
|
1,572
|
|
|
1,886
|
|
|
1,632
|
|
|
3,518
|
|
FFO
Contribution
|
|
$
|
2,452
|
|
|
$
|
—
|
|
|
$
|
2,452
|
|
|
$
|
2,363
|
|
|
$
|
2,545
|
|
|
$
|
4,908
|
|
|
|
|
Six Months Ended
June 30, 2014
|
|
Six Months Ended
June 30, 2013
|
|
|
Hotel
del
Coronado
|
|
Fairmont
Scottsdale
Princess
|
|
Total
|
|
Hotel
del
Coronado
|
|
Fairmont
Scottsdale
Princess
|
|
Total
|
Total revenues
(100%)
|
|
$
|
67,863
|
|
|
$
|
35,006
|
|
|
$
|
102,869
|
|
|
$
|
68,087
|
|
|
$
|
55,160
|
|
|
$
|
123,247
|
|
Property EBITDA
(100%)
|
|
$
|
20,761
|
|
|
$
|
13,191
|
|
|
$
|
33,952
|
|
|
$
|
19,820
|
|
|
$
|
15,073
|
|
|
$
|
34,893
|
|
Equity in earnings
(losses) of unconsolidated affiliates (SHR ownership)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property
EBITDA
|
|
$
|
7,426
|
|
|
$
|
6,595
|
|
|
$
|
14,021
|
|
|
$
|
7,209
|
|
|
$
|
7,537
|
|
|
$
|
14,746
|
|
Depreciation and
amortization
|
|
(3,526)
|
|
|
(1,551)
|
|
|
(5,077)
|
|
|
(3,751)
|
|
|
(3,472)
|
|
|
(7,223)
|
|
Interest
expense
|
|
(3,418)
|
|
|
(168)
|
|
|
(3,586)
|
|
|
(4,434)
|
|
|
(390)
|
|
|
(4,824)
|
|
Other expenses,
net
|
|
(25)
|
|
|
(30)
|
|
|
(55)
|
|
|
(23)
|
|
|
(19)
|
|
|
(42)
|
|
Income
taxes
|
|
143
|
|
|
—
|
|
|
143
|
|
|
63
|
|
|
—
|
|
|
63
|
|
Equity in earnings
(losses) of unconsolidated affiliates
|
|
$
|
600
|
|
|
$
|
4,846
|
|
|
$
|
5,446
|
|
|
$
|
(936)
|
|
|
$
|
3,656
|
|
|
$
|
2,720
|
|
EBITDA
Contribution
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in earnings
(losses) of unconsolidated affiliates
|
|
$
|
600
|
|
|
$
|
4,846
|
|
|
$
|
5,446
|
|
|
$
|
(936)
|
|
|
$
|
3,656
|
|
|
$
|
2,720
|
|
Depreciation and
amortization
|
|
3,526
|
|
|
1,551
|
|
|
5,077
|
|
|
3,751
|
|
|
3,472
|
|
|
7,223
|
|
Interest
expense
|
|
3,418
|
|
|
168
|
|
|
3,586
|
|
|
4,434
|
|
|
390
|
|
|
4,824
|
|
Income
taxes
|
|
(143)
|
|
|
—
|
|
|
(143)
|
|
|
(63)
|
|
|
—
|
|
|
(63)
|
|
EBITDA
Contribution
|
|
$
|
7,401
|
|
|
$
|
6,565
|
|
|
$
|
13,966
|
|
|
$
|
7,186
|
|
|
$
|
7,518
|
|
|
$
|
14,704
|
|
FFO
Contribution
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in earnings
(losses) of unconsolidated affiliates
|
|
$
|
600
|
|
|
$
|
4,846
|
|
|
$
|
5,446
|
|
|
$
|
(936)
|
|
|
$
|
3,656
|
|
|
$
|
2,720
|
|
Depreciation and
amortization
|
|
3,526
|
|
|
1,551
|
|
|
5,077
|
|
|
3,751
|
|
|
3,472
|
|
|
7,223
|
|
FFO
Contribution
|
|
$
|
4,126
|
|
|
$
|
6,397
|
|
|
$
|
10,523
|
|
|
$
|
2,815
|
|
|
$
|
7,128
|
|
|
$
|
9,943
|
|
|
Strategic Hotels
& Resorts, Inc. and Subsidiaries (SHR)
Leasehold
Information
(in
thousands)
|
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
Marriott
Hamburg:
|
|
|
|
|
|
|
|
|
|
|
|
|
Property
EBITDA
|
|
$
|
1,687
|
|
|
$
|
1,505
|
|
|
$
|
3,199
|
|
|
$
|
2,901
|
|
Revenue
(a)
|
|
$
|
1,319
|
|
|
$
|
1,160
|
|
|
$
|
2,618
|
|
|
$
|
2,360
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lease
expense
|
|
(1,260)
|
|
|
(1,206)
|
|
|
(2,518)
|
|
|
(2,382)
|
|
Less: Deferred gain
on sale-leaseback
|
|
(54)
|
|
|
(51)
|
|
|
(107)
|
|
|
(102)
|
|
Adjusted lease
expense
|
|
(1,314)
|
|
|
(1,257)
|
|
|
(2,625)
|
|
|
(2,484)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comparable EBITDA
contribution from leasehold
|
|
$
|
5
|
|
|
$
|
(97)
|
|
|
$
|
(7)
|
|
|
$
|
(124)
|
|
Security Deposit
(b):
|
|
June 30,
2014
|
|
December 31,
2013
|
Marriott
Hamburg
|
|
$
|
2,602
|
|
|
$
|
2,611
|
|
|
|
|
|
|
|
|
|
|
(a)
|
For the three and six
months ended June 30, 2014 and 2013, Revenue for the Marriott
Hamburg hotel represents lease revenue.
|
(b)
|
The security deposit
is recorded in prepaid expenses and other assets on the
consolidated balance sheets.
|
Strategic Hotels & Resorts, Inc. and Subsidiaries
(SHR)
Non-GAAP Financial Measures
We present five non-GAAP financial measures that we believe are
useful to management and investors as key measures of our operating
performance: Funds from Operations (FFO); FFO—Fully Diluted;
Comparable FFO; Earnings Before Interest Expense, Taxes,
Depreciation and Amortization (EBITDA); and Comparable EBITDA.
EBITDA represents net income (or loss) attributable to SHR
common shareholders excluding: (i) interest expense,
(ii) income taxes, including deferred income tax benefits and
expenses applicable to our foreign subsidiaries and income taxes
applicable to sale of assets; (iii) depreciation and
amortization; and (iv) preferred stock dividends. EBITDA also
excludes interest expense, income taxes and depreciation and
amortization of our unconsolidated affiliates. EBITDA is presented
on a full participation basis, which means we have assumed
conversion of all redeemable noncontrolling interests of our
operating partnership into our common stock. We believe this
treatment of noncontrolling interests provides useful information
for management and our investors and appropriately considers our
current capital structure. We also present Comparable EBITDA, which
eliminates the effect of realizing deferred gains on our sale
leasebacks, as well as the effect of gains or losses on sales of
assets, early extinguishment of debt, impairment losses, foreign
currency exchange gains or losses and certain other charges that
are highly variable from year to year. We believe EBITDA and
Comparable EBITDA are useful to management and investors in
evaluating our operating performance because they provide
management and investors with an indication of our ability to incur
and service debt, to satisfy general operating expenses, to make
capital expenditures and to fund other cash needs or reinvest cash
into our business. We also believe they help management and
investors meaningfully evaluate and compare the results of our
operations from period to period by removing the impact of our
asset base (primarily depreciation and amortization) from our
operating results. Our management also uses EBITDA and Comparable
EBITDA as measures in determining the value of acquisitions and
dispositions.
We compute FFO in accordance with standards established by the
National Association of Real Estate Investment Trusts, or NAREIT.
NAREIT adopted a definition of FFO in order to promote an
industry-wide standard measure of REIT operating performance.
NAREIT defines FFO as net income (or loss) (computed in accordance
with GAAP) excluding losses or gains from sales of depreciable
property, impairment of depreciable real estate, real
estate-related depreciation and amortization, and our portion of
these items related to unconsolidated affiliates. We also present
FFO—Fully Diluted, which is FFO plus income or loss on income
attributable to redeemable noncontrolling interests in our
operating partnership. We also present Comparable FFO, which is
FFO—Fully Diluted excluding the impact of any gains or losses on
early extinguishment of debt, impairment losses on non-depreciable
assets, foreign currency exchange gains or losses and certain other
charges that are highly variable from year to year. We believe that
the presentation of FFO, 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 Income (Loss) Attributable to SHR Common Shareholders to EBITDA
and Comparable EBITDA
(in
thousands)
|
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
Net income (loss)
attributable to SHR common shareholders
|
|
$
|
80,840
|
|
|
$
|
3,274
|
|
|
$
|
297,998
|
|
|
$
|
(20,174)
|
|
Depreciation and
amortization—continuing operations
|
|
28,058
|
|
|
24,691
|
|
|
50,263
|
|
|
49,599
|
|
Depreciation and
amortization—discontinued operations
|
|
—
|
|
|
2,306
|
|
|
1,275
|
|
|
4,616
|
|
Interest
expense—continuing operations
|
|
19,587
|
|
|
19,460
|
|
|
37,861
|
|
|
39,123
|
|
Interest
expense—discontinued operations
|
|
—
|
|
|
1,819
|
|
|
1,326
|
|
|
3,642
|
|
Income
taxes—continuing operations
|
|
207
|
|
|
72
|
|
|
246
|
|
|
85
|
|
Income
taxes—discontinued operations
|
|
—
|
|
|
695
|
|
|
833
|
|
|
1,466
|
|
Income taxes—sale of
assets
|
|
—
|
|
|
—
|
|
|
20,451
|
|
|
—
|
|
Noncontrolling
interests
|
|
281
|
|
|
36
|
|
|
1,130
|
|
|
(51)
|
|
Adjustments from
consolidated affiliates
|
|
(3,939)
|
|
|
(3,549)
|
|
|
(7,614)
|
|
|
(7,103)
|
|
Adjustments from
unconsolidated affiliates
|
|
3,153
|
|
|
5,717
|
|
|
8,443
|
|
|
12,033
|
|
Preferred shareholder
dividends
|
|
7,169
|
|
|
6,042
|
|
|
16,993
|
|
|
12,083
|
|
EBITDA
|
|
135,356
|
|
|
60,563
|
|
|
429,205
|
|
|
95,319
|
|
Realized portion of
deferred gain on sale-leaseback
|
|
(54)
|
|
|
(51)
|
|
|
(107)
|
|
|
(102)
|
|
Gain on sale of
assets—continuing operations
|
|
(767)
|
|
|
(273)
|
|
|
(767)
|
|
|
(273)
|
|
Gain on sale of
assets—adjustments from consolidated affiliates
|
|
109
|
|
|
—
|
|
|
109
|
|
|
—
|
|
Gain on sale of
assets—discontinued operations
|
|
(604)
|
|
|
—
|
|
|
(176,880)
|
|
|
—
|
|
Gain on consolidation
of affiliates
|
|
(65,349)
|
|
|
—
|
|
|
(143,466)
|
|
|
—
|
|
Loss on early
extinguishment of debt—discontinued operations
|
|
—
|
|
|
—
|
|
|
272
|
|
|
—
|
|
Foreign currency
exchange loss (gain)—continuing operations (a)
|
|
8
|
|
|
(84)
|
|
|
6
|
|
|
2
|
|
Foreign currency
exchange loss (gain)—discontinued operations (a)
|
|
—
|
|
|
138
|
|
|
(32)
|
|
|
(188)
|
|
Amortization of below
market hotel management agreement
|
|
108
|
|
|
—
|
|
|
108
|
|
|
—
|
|
Activist shareholder
costs
|
|
104
|
|
|
—
|
|
|
1,637
|
|
|
—
|
|
Comparable
EBITDA
|
|
$
|
68,911
|
|
|
$
|
60,293
|
|
|
$
|
110,085
|
|
|
$
|
94,758
|
|
(a)
|
Foreign currency
exchange gains or losses applicable to certain balance sheet items
held by foreign subsidiaries.
|
|
Strategic Hotels
& Resorts, Inc. and Subsidiaries (SHR)
Reconciliation of
Net Income (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
June 30,
|
|
Six Months Ended
June 30,
|
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
Net income (loss)
attributable to SHR common shareholders
|
|
$
|
80,840
|
|
|
$
|
3,274
|
|
|
$
|
297,998
|
|
|
$
|
(20,174)
|
|
Depreciation and
amortization—continuing operations
|
|
28,058
|
|
|
24,691
|
|
|
50,263
|
|
|
49,599
|
|
Depreciation and
amortization—discontinued operations
|
|
—
|
|
|
2,306
|
|
|
1,275
|
|
|
4,616
|
|
Corporate
depreciation
|
|
(123)
|
|
|
(127)
|
|
|
(246)
|
|
|
(258)
|
|
Gain on sale of
assets—continuing operations
|
|
(767)
|
|
|
(273)
|
|
|
(767)
|
|
|
(273)
|
|
Gain on sale of
assets, net of tax—discontinued operations
|
|
(604)
|
|
|
—
|
|
|
(156,429)
|
|
|
—
|
|
Gain on consolidation
of affiliates
|
|
(65,349)
|
|
|
—
|
|
|
(143,466)
|
|
|
—
|
|
Realized portion of
deferred gain on sale-leaseback
|
|
(54)
|
|
|
(51)
|
|
|
(107)
|
|
|
(102)
|
|
Noncontrolling
interests adjustments
|
|
(95)
|
|
|
(125)
|
|
|
(193)
|
|
|
(252)
|
|
Adjustments from
consolidated affiliates
|
|
(1,971)
|
|
|
(1,655)
|
|
|
(3,806)
|
|
|
(3,296)
|
|
Adjustments from
unconsolidated affiliates
|
|
1,571
|
|
|
3,518
|
|
|
5,077
|
|
|
7,224
|
|
FFO
|
|
41,506
|
|
|
31,558
|
|
|
49,599
|
|
|
37,084
|
|
Redeemable
noncontrolling interests
|
|
376
|
|
|
162
|
|
|
1,323
|
|
|
202
|
|
FFO—Fully
Diluted
|
|
41,882
|
|
|
31,720
|
|
|
50,922
|
|
|
37,286
|
|
Non-cash interest
rate swap activity—continuing operations
|
|
2,184
|
|
|
(2,353)
|
|
|
(110)
|
|
|
(4,651)
|
|
Non-cash interest
rate swap activity—discontinued operations
|
|
—
|
|
|
(747)
|
|
|
—
|
|
|
(1,493)
|
|
Loss on early
extinguishment of debt—discontinued operations
|
|
—
|
|
|
—
|
|
|
272
|
|
|
—
|
|
Foreign currency
exchange loss (gain)—continuing operations (a)
|
|
8
|
|
|
(84)
|
|
|
6
|
|
|
2
|
|
Foreign currency
exchange loss (gain)—discontinued operations (a)
|
|
—
|
|
|
138
|
|
|
(32)
|
|
|
(188)
|
|
Amortization of debt
discount
|
|
623
|
|
|
—
|
|
|
623
|
|
|
—
|
|
Amortization of below
market hotel management agreement
|
|
108
|
|
|
—
|
|
|
108
|
|
|
—
|
|
Activist shareholder
costs
|
|
104
|
|
|
—
|
|
|
1,637
|
|
|
—
|
|
Excess of redemption
liability over carrying amount of redeemed preferred
stock
|
|
3,203
|
|
|
—
|
|
|
6,912
|
|
|
—
|
|
Comparable
FFO
|
|
$
|
48,112
|
|
|
$
|
28,674
|
|
|
$
|
60,338
|
|
|
$
|
30,956
|
|
Comparable FFO per
fully diluted share
|
|
$
|
0.21
|
|
|
$
|
0.14
|
|
|
$
|
0.28
|
|
|
$
|
0.15
|
|
Weighted average
diluted shares (b)
|
|
225,348
|
|
|
208,923
|
|
|
217,875
|
|
|
208,760
|
|
(a)
|
Foreign currency
exchange gains or losses applicable to 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)
|
Fairmont Scottsdale
Princess (c)
|
|
0.52
|
%
|
|
36 bp
|
|
$
|
117,000
|
|
|
April 2015
|
Westin St.
Francis
|
|
6.09
|
%
|
|
Fixed
|
|
209,588
|
|
|
June 2017
|
Fairmont
Chicago
|
|
6.09
|
%
|
|
Fixed
|
|
93,124
|
|
|
June 2017
|
JW Marriott Essex
House Hotel
|
|
4.75
|
%
|
|
400 bp
|
|
185,826
|
|
|
September
2017
|
Hyatt Regency La
Jolla (d)
|
|
4.50% /
10.00%
|
|
400 bp /
Fixed
|
|
89,277
|
|
|
December
2017
|
Hotel del Coronado
(e)
|
|
3.81
|
%
|
|
365 bp
|
|
475,000
|
|
|
March 2018
|
InterContinental
Miami (f)
|
|
3.66
|
%
|
|
350 bp
|
|
85,000
|
|
|
July 2018
|
Bank credit facility
(g)
|
|
2.16
|
%
|
|
200 bp
|
|
—
|
|
|
April 2019
|
Four Seasons
Washington, D.C. (h)
|
|
2.41
|
%
|
|
225 bp
|
|
120,000
|
|
|
June 2019
|
Loews Santa Monica
Beach Hotel (i)
|
|
2.71
|
%
|
|
255 bp
|
|
120,000
|
|
|
May 2021
|
InterContinental
Chicago
|
|
5.61
|
%
|
|
Fixed
|
|
143,504
|
|
|
August 2021
|
|
|
|
|
|
|
|
1,638,319
|
|
|
|
Unamortized discount
(c)
|
|
|
|
|
|
|
(1,869)
|
|
|
|
|
|
|
|
|
|
|
$
|
1,636,450
|
|
|
|
(a)
|
Spread over LIBOR
(0.16% at June 30, 2014). 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)
|
On March 31, 2014, we
acquired the remaining 50.0% equity interest in the Fairmont
Scottsdale Princess hotel, resulting in the Fairmont Scottsdale
Princess hotel becoming wholly-owned by the Company. In connection
with the acquisition, we consolidated the Fairmont Scottsdale
Princess hotel and became fully obligated under the entire mortgage
loan secured by the Fairmont Scottsdale Princess hotel. We recorded
the mortgage loan at its fair value, which included a debt
discount, which is being amortized as additional interest expense
over the maturity period of the loan.
|
(d)
|
Interest on
$72,000,000 is payable at LIBOR plus 4.00%, subject to a 0.50%
LIBOR floor, and interest on $17,277,000 is payable at a fixed rate
of 10.00%.
|
(e)
|
On June 11, 2014, we
acquired the remaining 63.6% equity interest in the Hotel del
Coronado, resulting in the Hotel del Coronado becoming wholly-owned
by us. In connection with the acquisition, we consolidated the
Hotel del Coronado and became fully obligated under the entire
outstanding balance of the mortgage and mezzanine loans secured by
the Hotel del Coronado.
|
(f)
|
On July 7, 2014, we
paid off the outstanding balance on the mortgage loan secured by
the InterContinental Miami hotel. We are currently evaluating
financing alternatives.
|
(g)
|
On April 25, 2014, we
entered into a new $300,000,000 secured bank credit facility, which
replaced the previous secured bank credit facility.
|
(h)
|
On June 30, 2014, we
refinanced the loan secured by the Four Seasons Washington, D.C.
hotel.
|
(i)
|
On May 29, 2014, we
refinanced the loan secured by the Loews Santa Monica Beach
Hotel.
|
|
Debt Summary
(Continued)
(dollars in
thousands)
|
|
Future scheduled debt
principal payments (including extension options) are as
follows:
|
|
|
|
Years ending
December 31,
|
|
Amount
|
2014
(remainder)
|
|
$
|
1,340
|
|
2015
|
|
121,029
|
|
2016
|
|
7,783
|
|
2017
|
|
575,008
|
|
2018
|
|
559,015
|
|
Thereafter
|
|
374,144
|
|
|
|
1,638,319
|
|
Unamortized
discount
|
|
(1,869)
|
|
|
|
$
|
1,636,450
|
|
|
|
|
|
Percent of fixed rate
debt
|
|
28.3
|
%
|
Weighted average
interest rate (g)
|
|
4.17
|
%
|
Weighted average
maturity of fixed rate debt (debt with maturity of greater than one
year)
|
|
4.23
|
|
(g)
|
Excludes the
amortization of deferred financing costs.
|
SOURCE Strategic Hotels & Resorts, Inc.