STRATEGIC HOTELS & RESORTS, INC - FORM 8-K - EX-99.2 - SUPPLEMENTAL FINANCIAL INFORMATION

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8-K - FORM 8-K - STRATEGIC HOTELS & RESORTS, INC	d249226d8k.htm
EX-99.1 - PRESS RELEASE DATED NOVEMBER 2, 2011 - STRATEGIC HOTELS & RESORTS, INC	d249226dex991.htm

Exhibit 99.2

LOGO

Strategic Hotels & Resorts, Inc.

Supplemental Financial Information

September 30, 2011


		Supplemental Financial Information
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)		September 30, 2011

TABLE OF CONTENTS


	PAGE
CORPORATE INFORMATION
The Company		1
Board of Directors		2
Officers		3
Equity Research Coverage		4

FINANCIAL HIGHLIGHTS
Supplemental Financial Data		5
Consolidated Statements of Operations		6
Consolidated Balance Sheets		7
Discontinued Operations		8
Investments in the Hotel del Coronado and Fairmont Scottsdale Princess		9
Leasehold Information		10
Non-GAAP Financial Measures		11
Reconciliation of Net Loss Attributable to SHR Common Shareholders to EBITDA and Comparable EBITDA		12
Reconciliation of Net Loss Attributable to SHR Common Shareholders to Funds From Operations (FFO), FFO - Fully Diluted and Comparable FFO		13
Debt Summary		14

PORTFOLIO DATA
Portfolio at September 30, 2011		15
Seasonality by Geographic Region		16
Operating Statistics by Geographic Region		17
Selected Financial and Operating Information by Property		18-22
Reconciliation of Property EBITDA to EBITDA		23
Reconciliation of Property EBITDA to Comparable EBITDA		24
2011 Guidance		25


		Supplemental Financial Information
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)		September 30, 2011

CORPORATE INFORMATION

The Company

Strategic Hotels & Resorts, Inc. is an industry-leading owner and asset manager of high-end hotels and resorts. We own interests in or lease a quality portfolio of upper upscale and luxury hotels and resorts in desirable North American and European locations. Our portfolio is currently made up of 17 properties totaling 7,762 rooms. We own interests in or lease unique hotels with complex operations, sophisticated customers and multiple revenue streams. Our properties include large convention hotels, business hotels and resorts, which are managed by internationally recognized hotel management companies.

We believe our asset management expertise is what truly distinguishes us. Asset management is our focus, our core competency, and our competitive advantage. Our business is driven by our team’s depth of knowledge and hands-on expertise in every aspect of the lodging industry. While our focus is to drive top line revenues, we importantly focus on every component of bottom line profitability. We use our experience to make selective, value added acquisitions and recycle capital through thoughtful and planned dispositions. Simply put, we are utilizing our expert management skills in building a great hotel company which we believe will provide attractive returns for our shareholders.

Strategic Hotels & Resorts, Inc. is a real estate investment trust (REIT) and is traded on the New York Stock Exchange under the symbol BEE.

Fiscal Year End:

December 31

Number of Full-Time Equivalent Employees:

Corporate Headquarters:

200 West Madison Street, Suite 1700

Chicago, IL 60606

(312) 658-5000

Company Contacts:

Diane M. Morefield

Chief Financial Officer

(312) 658-5000

Jonathan P. Stanner

Vice President, Capital Markets and Treasurer

(312) 658-5000


		Supplemental Financial Information
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)		September 30, 2011

Board of Directors

Raymond L. Gellein, Jr.

Chairman of the Board and Executive Committee

Laurence S. Geller

Director, President and Chief Executive Officer

Robert P. Bowen

Director and Chairman of the Audit Committee

James A. Jeffs

Director and Chairman of the Compensation Committee

William A. Prezant

Director and Chairman of the Corporate Governance and Nominating Committee

Kenneth Fisher

Director

Richard D. Kincaid

Director

Sir David M.C. Michels

Director

Eugene F. Reilly

Director


		Supplemental Financial Information
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)		September 30, 2011

Officers

Laurence S. Geller

President and Chief Executive Officer

Diane M. Morefield

Executive Vice President, Chief Financial Officer (Principal Financial Officer)

Richard J. Moreau

Executive Vice President, Chief Operating Officer

Stephen M. Briggs

Senior Vice President, Chief Accounting Officer (Principal Accounting Officer)

Paula C. Maggio

Senior Vice President, Secretary & General Counsel

Robert T. McAllister

Senior Vice President, Tax

Patricia A. Needham

Senior Vice President, Assistant Secretary

John K.T. Barrett

Vice President, Asset Management

Gregory A. Brenner

Vice President, Controller

D. Robert Britt

Vice President, Asset Management

Michael A. Dalton

Vice President, Design

Eric D. Hassberger

Vice President, Capital Markets

Thomas G. Healy

Vice President, Asset Management

David R. Hogin, Jr.

Vice President, Asset Management

Jonathan P. Stanner

Vice President, Capital Markets and Treasurer

Cory P. Warning

Vice President, Development


		Supplemental Financial Information
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)		September 30, 2011

Equity Research Coverage


Firm	Analyst	Telephone

Bank of America Merrill Lynch	Andrew Didora	(646) 855-2924

Deutsche Bank North America	Carlo Santarelli	(212) 250-5815

Green Street Advisors	Enrique Torres	(949) 640-8780

JMP Securities	Will Marks	(415) 835-8944

J.P. Morgan Securities	Joseph Greff	(212) 622-0548

Keefe, Bruyette & Woods	Smedes Rose	(212) 887-3696

Morgan Stanley	Ryan Meliker	(212) 761-7079

Raymond James & Associates	William Crow	(727) 567-2594

Robert W. Baird & Co.	David Loeb	(414) 765-7063

Wells Fargo Securities, LLC	Jeffrey Donnelly	(617) 603-4262

Strategic Hotels & Resorts, Inc. is followed by the analysts listed above. Please note that any opinions, estimates or forecasts regarding Strategic Hotels & Resorts, Inc.’s performance made by these analysts are theirs alone and do not represent opinions, forecasts or predictions of Strategic Hotels & Resorts, Inc. or its management. Strategic Hotels & Resorts, Inc. does not by its reference here imply its endorsement of, or concurrence with, such information, conclusions or recommendations.


		Supplemental Financial Information
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)		September 30, 2011

FINANCIAL HIGHLIGHTS

Supplemental Financial Data

(in thousands, except per share information)


	September 30, 2011
	Pro Rata Share			Consolidated
Capitalization
Common shares outstanding		185,627			185,627
Operating partnership units outstanding		853			853
Restricted stock units outstanding		1,039			1,039
Value Creation Plan units outstanding		974			974


Combined shares and units outstanding		188,493			188,493
Common stock price at end of period	$	4.31		$	4.31

Common equity capitalization	$	812,405		$	812,405
Preferred equity capitalization (at $25.00 face value)		370,236			370,236
Consolidated debt		1,000,706			1,000,706
Pro rata share of unconsolidated debt		212,275			—
Pro rata share of consolidated debt		(45,548	)		—
Cash and cash equivalents		(88,843	)		(88,843	)

Total enterprise value	$	2,261,231		$	2,094,504

Net Debt / Total Enterprise Value		47.7	%		43.5	%
Preferred Equity / Total Enterprise Value		16.4	%		17.7	%
Common Equity / Total Enterprise Value		35.9	%		38.8	%


		Supplemental Financial Information
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)		Three and Nine Months Ended September 30, 2011 and 2010

Consolidated Statements of Operations

(in thousands, except per share data)


	Three Months Ended September 30,						Nine Months Ended September 30,
	2011			2010			2011			2010
Revenues:
Rooms	$	110,048		$	94,995		$	310,330		$	268,674
Food and beverage		58,664			54,028			195,987			172,423
Other hotel operating revenue		19,939			18,762			59,860			57,285
Lease revenue		1,255			1,108			3,747			3,383

Total revenues		189,906			168,893			569,924			501,765

Operating Costs and Expenses:
Rooms		29,283			27,364			85,728			77,938
Food and beverage		45,345			40,947			142,010			124,038
Other departmental expenses		51,358			49,701			155,856			145,869
Management fees		5,879			5,222			18,203			16,818
Other hotel expenses		12,672			12,621			39,497			40,048
Lease expense		1,249			1,106			3,702			3,396
Depreciation and amortization		25,526			32,209			86,222			98,195
Corporate expenses		(2,228	)		8,679			24,206			22,098

Total operating costs and expenses		169,084			177,849			555,424			528,400

Operating income (loss)		20,822			(8,956	)		14,500			(26,635	)

Interest expense		(21,838	)		(22,118	)		(67,148	)		(68,488	)
Interest income		41			64			124			369
Loss on early extinguishment of debt		(399	)		(39	)		(1,237	)		(925	)
Loss on early termination of derivative financial instruments		—			—			(29,242	)		(18,263	)
Equity in (losses) earnings of unconsolidated affiliates		(1,867	)		3,001			(6,266	)		2,900
Foreign currency exchange (loss) gain		(209	)		(132	)		77			(1,394	)
Other income, net		355			1,605			4,716			2,299

Loss before income taxes and discontinued operations		(3,095	)		(26,575	)		(84,476	)		(110,137	)
Income tax expense		(867	)		(68	)		(279	)		(296	)

Loss from continuing operations		(3,962	)		(26,643	)		(84,755	)		(110,433	)
Income (loss) from discontinued operations, net of tax		19			(4,143	)		101,215			6,474

Net (loss) income		(3,943	)		(30,786	)		16,460			(103,959	)
Net loss (income) attributable to the noncontrolling interests in SHR’s operating partnership		16			192			(70	)		879
Net income attributable to the noncontrolling interests in consolidated affiliates		(254	)		(1,086	)		(997	)		(858	)

Net (loss) income attributable to SHR		(4,181	)		(31,680	)		15,393			(103,938	)
Preferred shareholder dividends		(7,721	)		(7,721	)		(23,164	)		(23,164	)

Net loss attributable to SHR common shareholders	$	(11,902	)	$	(39,401	)	$	(7,771	)	$	(127,102	)

Basic and Diluted (Loss) Income Per Share:
Loss from continuing operations attributable to SHR common shareholders	$	(0.06	)	$	(0.23	)	$	(0.62	)	$	(1.18	)
(Loss) income from discontinued operations attributable to SHR common shareholders		—			(0.03	)		0.58			0.06

Net loss attributable to SHR common shareholders	$	(0.06	)	$	(0.26	)	$	(0.04	)	$	(1.12	)

Weighted average common shares outstanding		186,146			151,635			173,349			113,237


		Supplemental Financial Information
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)		September 30, 2011 and December 31, 2010

Consolidated Balance Sheets

(in thousands, except share data)


	September 30, 2011			December 31, 2010
Assets
Investment in hotel properties, net	$	1,707,798		$	1,835,451
Goodwill		40,359			40,359
Intangible assets, net of accumulated amortization of $8,311 and $6,536		31,301			32,620
Assets held for sale		—			45,145
Investment in unconsolidated affiliates		128,407			18,024
Cash and cash equivalents		88,843			78,842
Restricted cash and cash equivalents		44,543			34,618
Accounts receivable, net of allowance for doubtful accounts of $1,538 and $1,922		47,959			35,250
Deferred financing costs, net of accumulated amortization of $2,587 and $15,756		11,680			3,322
Deferred tax assets		6,017			4,121
Other assets		26,791			34,564

Total assets	$	2,133,698		$	2,162,316

Liabilities, Noncontrolling Interests and Equity
Liabilities:
Mortgages and other debt payable	$	1,000,706		$	1,118,281
Bank credit facility		—			28,000
Liabilities of assets held for sale		—			93,206
Accounts payable and accrued expenses		240,397			266,773
Deferred tax liabilities		48,848			1,732
Deferred gain on sale of hotels		3,781			3,930

Total liabilities		1,293,732			1,511,922
Noncontrolling interests in SHR’s operating partnership		3,678			5,050
Equity:
SHR’s shareholders’ equity:
8.50% Series A Cumulative Redeemable Preferred Stock ($0.01 par value; 4,488,750 shares issued and outstanding; liquidation preference $25.00 per share and $138,450 and $131,296 in the aggregate)		108,206			108,206
8.25% Series B Cumulative Redeemable Preferred Stock ($0.01 par value; 4,600,000 shares issued and outstanding; liquidation preference $25.00 per share and $141,091 and $133,975 in the aggregate)		110,775			110,775
8.25% Series C Cumulative Redeemable Preferred Stock ($0.01 par value; 5,750,000 shares issued and outstanding; liquidation preference $25.00 per share and $176,363 and $167,469 in the aggregate)		138,940			138,940
Common shares ($0.01 par value; 250,000,000 common shares authorized; 185,627,199 and 151,305,314 common shares issued and outstanding)		1,856			1,513
Additional paid-in capital		1,715,023			1,553,286
Accumulated deficit		(1,170,022	)		(1,185,294	)
Accumulated other comprehensive loss		(78,695	)		(107,164	)

Total SHR’s shareholders’ equity		826,083			620,262
Noncontrolling interests in consolidated affiliates		10,205			25,082

Total equity		836,288			645,344

Total liabilities, noncontrolling interests and equity	$	2,133,698		$	2,162,316


		Supplemental Financial Information
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)		Three and Nine Months Ended September 30, 2011 and 2010

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 2011 and 2010 (in thousands):


Hotel	Date Sold	Net Sales Proceeds
Paris Marriott Champs Elysees (Paris Marriott)	April 6, 2011	$	55,245
InterContinental Prague	December 15, 2010	$	3,564

The following is a summary of income (loss) from discontinued operations for the three and nine months ended September 30, 2011 and 2010 (in thousands):


	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2011			2010			2011			2010
Hotel operating revenues	$	—		$	19,495		$	9,743		$	51,987

Operating costs and expenses		(54	)		13,984			9,456			40,394
Depreciation and amortization		—			1,859			—			5,413

Total operating costs and expenses		(54	)		15,843			9,456			45,807

Operating income		54			3,652			287			6,180

Interest expense		—			(2,378	)		—			(7,716	)
Interest income		—			8			—			19
Foreign currency exchange (loss) gain		—			(5,096	)		51			7,490
Other income, net		—			—			326			—
Income tax expense		—			(329	)		(379	)		(736	)
(Loss) gain on sale		(35	)		—			100,930			1,237

Income (loss) from discontinued operations	$	19		$	(4,143	)	$	101,215		$	6,474


		Supplemental Financial Information
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)		Three and Nine Months Ended September 30, 2011 and 2010

Investments in the Hotel del Coronado and Fairmont Scottsdale Princess

(in thousands)

On January 9, 2006, we purchased a 45% interest in the unconsolidated affiliate that owns the Hotel del Coronado. On February 4, 2011, we completed a recapitalization of the unconsolidated affiliate. As part of the recapitalization, a new unconsolidated affiliate was formed to own the Hotel del Coronado and to invest cash in the asset. Pursuant to the terms of the recapitalization, we became a limited partner in the new unconsolidated affiliate, and our ownership interest in the Hotel del Coronado decreased from 45% to 34.3%. On June 9, 2011, we completed a recapitalization of the Fairmont Scottsdale Princess hotel. As part of the recapitalization, our ownership interest in the Fairmont Scottsdale Princess decreased from 100% to 50%. We account for these investments using the equity method of accounting.


	Three Months Ended September 30, 2011									Three Months Ended September 30, 2010
	Hotel del Coronado			Fairmont Scottsdale Princess			Total			Hotel del Coronado			Fairmont Scottsdale Princess		Total
Total revenues (100%)	$	40,765		$	10,280		$	51,045		$	39,683		$	—	$	39,683
Property EBITDA (100%)	$	16,995		$	(2,452	)	$	14,543		$	15,593		$	—	$	15,593

Equity in earnings (losses) of unconsolidated affiliates (SHR ownership)
Property EBITDA	$	5,830		$	(1,226	)	$	4,604		$	7,017		$	—	$	7,017
Depreciation and amortization		(1,665	)		(1,806	)		(3,471	)		(2,015	)		—		(2,015	)
Interest expense		(2,648	)		(198	)		(2,846	)		(1,981	)		—		(1,981	)
Other expenses, net		(83	)		(96	)		(179	)		(15	)		—		(15	)
Income taxes		(125	)		—			(125	)		(272	)		—		(272	)

Equity in earnings (losses) of unconsolidated affiliates	$	1,309		$	(3,326	)	$	(2,017	)	$	2,734		$	—	$	2,734

EBITDA Contribution
Equity in earnings (losses) of unconsolidated affiliates	$	1,309		$	(3,326	)	$	(2,017	)	$	2,734		$	—	$	2,734
Depreciation and amortization		1,665			1,806			3,471			2,015			—		2,015
Interest expense		2,648			198			2,846			1,981			—		1,981
Income taxes		125			—			125			272			—		272

EBITDA Contribution	$	5,747		$	(1,322	)	$	4,425		$	7,002		$	—	$	7,002

FFO Contribution
Equity in earnings (losses) of unconsolidated affiliates	$	1,309		$	(3,326	)	$	(2,017	)	$	2,734		$	—	$	2,734
Depreciation and amortization		1,665			1,806			3,471			2,015			—		2,015

FFO Contribution	$	2,974		$	(1,520	)	$	1,454		$	4,749		$	—	$	4,749


	Nine Months Ended September 30, 2011									Nine Months Ended September 30, 2010
	Hotel del Coronado			Fairmont Scottsdale Princess			Total			Hotel del Coronado			Fairmont Scottsdale Princess		Total
Total revenues (100%)	$	101,255		$	12,389		$	113,644		$	94,167		$	—	$	94,167
Property EBITDA (100%)	$	34,748		$	(3,196	)	$	31,552		$	30,871		$	—	$	30,871

Equity in (losses) earnings of unconsolidated affiliates (SHR ownership)
Property EBITDA	$	12,022		$	(1,598	)	$	10,424		$	13,892		$	—	$	13,892
Depreciation and amortization		(4,963	)		(2,257	)		(7,220	)		(6,003	)		—		(6,003	)
Interest expense		(7,382	)		(248	)		(7,630	)		(5,711	)		—		(5,711	)
Other expenses, net		(1,547	)		(640	)		(2,187	)		(163	)		—		(163	)
Income taxes		554			—			554			111			—		111

Equity in (losses) earnings of unconsolidated affiliates	$	(1,316	)	$	(4,743	)	$	(6,059	)	$	2,126		$	—	$	2,126

EBITDA Contribution
Equity in (losses) earnings of unconsolidated affiliates	$	(1,316	)	$	(4,743	)	$	(6,059	)	$	2,126		$	—	$	2,126
Depreciation and amortization		4,963			2,257			7,220			6,003			—		6,003
Interest expense		7,382			248			7,630			5,711			—		5,711
Income taxes		(554	)		—			(554	)		(111	)		—		(111	)

EBITDA Contribution	$	10,475		$	(2,238	)	$	8,237		$	13,729		$	—	$	13,729

FFO Contribution
Equity in (losses) earnings of unconsolidated affiliates	$	(1,316	)	$	(4,743	)	$	(6,059	)	$	2,126		$	—	$	2,126
Depreciation and amortization		4,963			2,257			7,220			6,003			—		6,003

FFO Contribution	$	3,647		$	(2,486	)	$	1,161		$	8,129		$	—	$	8,129


Debt	Interest Rate			Spread over LIBOR			Loan Amount			Maturity (b)
*Hotel del Coronado*
CMBS Mortgage and Mezzanine		5.80% (a	)		480 bp (a	)	$	425,000			March 2016
Cash and cash equivalents								(22,939	)

Net Debt							$	402,061

*Fairmont Scottdale Princess*
CMBS Mortgage		0.60%			36 bp		$	133,000			April 2015
Cash and cash equivalents								(1,066	)

Net Debt							$	131,934


Caps	Effective Date			LIBOR Cap Rate			Notional Amount			Maturity
*Hotel del Coronado*
CMBS Mortgage and Mezzanine Loan Caps		February 2011			2.00%		$	425,000			February 2013
CMBS Mortgage and Mezzanine Loan Caps		February 2013			2.50%		$	425,000			March 2013

*Fairmont Scottsdale Princess*
CMBS Mortgage Loan Cap		June 2011			4.00%		$	133,000			December 2013

(a)	Subject to a 1% LIBOR floor.

(b)	Includes extension options.


		Supplemental Financial Information
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)		Three and Nine Months Ended September 30, 2011 and 2010

Leasehold Information

(in thousands)


	Three Months Ended September 30,						Nine Months Ended September 30,
	2011			2010			2011			2010
Paris Marriott (a):
Property EBITDA	$	—		$	6,784		$	3,455		$	15,858
Revenue (b)	$	—		$	6,784		$	3,455		$	15,858

Lease expense		—			(3,076	)		(3,274	)		(8,915	)
Less: Deferred gain on sale-leaseback		—			(1,088	)		(1,214	)		(3,321	)

Adjusted lease expense		—			(4,164	)		(4,488	)		(12,236	)

EBITDA contribution from leasehold	$	—		$	2,620		$	(1,033	)	$	3,622

Marriott Hamburg:
Property EBITDA	$	1,734		$	1,620		$	5,034		$	4,369
Revenue (b)	$	1,255		$	1,108		$	3,747		$	3,383

Lease expense		(1,249	)		(1,106	)		(3,702	)		(3,396	)
Less: Deferred gain on sale-leaseback		(42	)		(51	)		(151	)		(154	)

Adjusted lease expense		(1,291	)		(1,157	)		(3,853	)		(3,550	)

EBITDA contribution from leasehold	$	(36	)	$	(49	)	$	(106	)	$	(167	)

Total Leaseholds:
Property EBITDA	$	1,734		$	8,404		$	8,489		$	20,227
Revenue (b)	$	1,255		$	7,892		$	7,202		$	19,241

Lease expense		(1,249	)		(4,182	)		(6,976	)		(12,311	)
Less: Deferred gain on sale-leasebacks		(42	)		(1,139	)		(1,365	)		(3,475	)

Adjusted lease expense		(1,291	)		(5,321	)		(8,341	)		(15,786	)

EBITDA contribution from leaseholds	$	(36	)	$	2,571		$	(1,139	)	$	3,455


	September 30, 2011		December 31, 2010
Security Deposits (c):
Paris Marriott	$	—	$	14,459
Marriott Hamburg		2,544		2,540

Total	$	2,544	$	16,999

(a)	On April 6, 2011, we sold our leasehold interest in the Paris Marriott. The results of operations for the Paris Marriott have been classified as discontinued operations for all periods presented.

(b)	For the three and nine months ended September 30, 2011 and 2010, Revenue for the Paris Marriott represents Property EBITDA. For the three and nine months ended September 30, 2011 and 2010, Revenue for the Marriott Hamburg represents lease revenue.

(c)	The security deposits are recorded in other assets on the consolidated balance sheets.


		Supplemental Financial Information
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)		September 30, 2011

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 more 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 other non-cash charges, such as the Value Creation Plan expense. We believe EBITDA and Comparable EBITDA are useful to management and investors in evaluating our operating performance because they provide management and investors with an indication of our ability to incur and service debt, to satisfy general operating expenses, to make capital expenditures and to fund other cash needs or reinvest cash into our business. We also believe they help management and investors meaningfully evaluate and compare the results of our operations from period to period by removing the impact of our asset base (primarily depreciation and amortization) from our operating results. Our management also uses EBITDA and Comparable EBITDA as measures in determining the value of acquisitions and dispositions.

We compute FFO in accordance with standards established by the National Association of Real Estate Investment Trusts, or NAREIT, which 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 plus real estate-related depreciation and amortization, and after adjustments for our portion of these items related to unconsolidated affiliates. We also present FFO—Fully Diluted, which is FFO plus income or loss on income attributable to redeemable noncontrolling interests in our operating partnership. We also present Comparable FFO, which is FFO—Fully Diluted excluding the impact of any gains or losses on early extinguishment of debt, impairment losses, foreign currency exchange gains or losses and other non-cash charges, such as the Value Creation Plan expense. We believe that the presentation of FFO, FFO—Fully Diluted and Comparable FFO provides useful information to management and investors regarding our results of operations because they are measures of our ability to fund capital expenditures and expand our business. In addition, FFO is widely used in the real estate industry to measure operating performance without regard to items such as depreciation and amortization. We also present Comparable FFO per diluted share as a non-GAAP measure of our performance. We calculate Comparable FFO per diluted share for a given operating period as our Comparable FFO (as defined above) divided by the weighted average of fully diluted shares outstanding. Comparable FFO per diluted share, in accordance with NAREIT, is adjusted for the effects of dilutive securities. Dilutive securities may include shares granted under share-based compensation plans, operating partnership units and exchangeable debt securities. 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.


		Supplemental Financial Information
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)		Three and Nine Months Ended September 30, 2011

Reconciliation of Net Loss Attributable to SHR Common Shareholders to EBITDA and Comparable EBITDA

(in thousands)


	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2011			2010			2011			2010
Net loss attributable to SHR common shareholders	$	(11,902	)	$	(39,401	)	$	(7,771	)	$	(127,102	)
Depreciation and amortization—continuing operations		25,526			32,209			86,222			98,195
Depreciation and amortization—discontinued operations		—			1,859			—			5,413
Interest expense—continuing operations		21,838			22,118			67,148			68,488
Interest expense—discontinued operations		—			2,378			—			7,716
Income taxes—continuing operations		867			68			279			296
Income taxes—discontinued operations		—			329			379			736
Noncontrolling interests		(16	)		(192	)		70			(879	)
Adjustments from consolidated affiliates		(1,248	)		(1,978	)		(5,431	)		(5,596	)
Adjustments from unconsolidated affiliates		7,162			4,332			16,293			11,890
Preferred shareholder dividends		7,721			7,721			23,164			23,164

EBITDA		49,948			29,443			180,353			82,321
Realized portion of deferred gain on sale-leaseback—continuing operations		(42	)		(51	)		(151	)		(154	)
Realized portion of deferred gain on sale-leaseback—discontinued operations		—			(1,088	)		(1,214	)		(3,321	)
Gain on sale of assets—continuing operations		—			—			(2,640	)		—
Loss (gain) on sale of assets— discontinued operations		35			—			(100,930	)		(1,237	)
Loss on early extinguishment of debt		399			39			1,237			925
Loss on early termination of derivative financial instruments		—			—			29,242			18,263
Foreign currency exchange loss (gain)—continuing operations (a)		209			132			(77	)		1,394
Foreign currency exchange loss (gain)—discontinued operations (a)		—			5,096			(51	)		(7,490	)
Adjustment for Value Creation Plan		(6,921	)		3,844			9,078			6,871

Comparable EBITDA	$	43,628		$	37,415		$	114,847		$	97,572

(a)	Foreign currency exchange gains or losses applicable to third-party and inter-company debt and certain balance sheet items held by foreign subsidiaries.


		Supplemental Financial Information
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)		Three and Nine Months Ended September 30, 2011 and 2010

Reconciliation of Net Loss Attributable to SHR Common Shareholders to

Funds From Operations (FFO), FFO—Fully Diluted and Comparable FFO

(in thousands, except per share data)


	Three Months Ended September 30,						Nine Months Ended September 30,
	2011			2010			2011			2010
Net loss attributable to SHR common shareholders	$	(11,902	)	$	(39,401	)	$	(7,771	)	$	(127,102	)
Depreciation and amortization—continuing operations		25,526			32,209			86,222			98,195
Depreciation and amortization—discontinued operations		—			1,859			—			5,413
Corporate depreciation		(279	)		(304	)		(868	)		(914	)
Gain on sale of assets—continuing operations		—			—			(2,640	)		—
Loss (gain) on sale of assets—discontinued operations		35			—			(100,930	)		(1,237	)
Realized portion of deferred gain on sale-leaseback—continuing operations		(42	)		(51	)		(151	)		(154	)
Realized portion of deferred gain on sale-leaseback—discontinued operations		—			(1,088	)		(1,214	)		(3,321	)
Deferred tax expense on realized portion of deferred gain on sale-leasebacks		—			340			379			1,036
Noncontrolling interests adjustments		(134	)		(230	)		(440	)		(937	)
Adjustments from consolidated affiliates		(663	)		(1,342	)		(3,822	)		(4,644	)
Adjustments from unconsolidated affiliates		3,770			2,047			8,023			6,099

FFO		16,311			(5,961	)		(23,212	)		(27,566	)
Redeemable noncontrolling interests		118			38			510			58

FFO—Fully Diluted		16,429			(5,923	)		(22,702	)		(27,508	)
Non-cash mark to market of interest rate swaps		1,146			5,597			(487	)		9,778
Loss on early extinguishment of debt		399			39			1,237			925
Loss on early termination of derivative financial instruments		—			—			29,242			18,263
Foreign currency exchange loss (gain)—continuing operations (a)		209			132			(77	)		1,394
Foreign currency exchange loss (gain), net of tax—discontinued operations (a)		—			5,085			(51	)		(7,515	)
Adjustment for Value Creation Plan		(6,921	)		3,844			9,078			6,871

Comparable FFO	$	11,262		$	8,774		$	16,240		$	2,208

Comparable FFO per diluted share	$	0.06		$	0.06		$	0.09		$	0.02

Weighted average diluted shares		188,097			153,093			175,974			114,897

(a)	Foreign currency exchange gains or losses applicable to third-party and inter-company debt and certain balance sheet items held by foreign subsidiaries.


		Supplemental Financial Information
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)		September 30, 2011

Debt Summary

(dollars in thousands)


Debt	Interest Rate			Spread (a)			Loan Amount		Maturity (b)
Hyatt Regency La Jolla		1.24	%		100 bp		$	97,500		September 2012
North Beach Venture		5.00	%		Fixed			1,476		January 2013
Marriott London Grosvenor Square (c)		2.05	%		110 bp	(c)		113,980		October 2013
Bank credit facility		3.24	%		300 bp			—		June 2015
Four Seasons Washington, D.C.		3.39	%		315 bp			130,000		July 2016
Westin St. Francis		6.09	%		Fixed			220,000		June 2017
Fairmont Chicago		6.09	%		Fixed			97,750		June 2017
InterContinental Miami		3.74	%		350 bp			85,000		July 2018
Loews Santa Monica Beach Hotel		4.09	%		385 bp			110,000		July 2018
InterContinental Chicago		5.61	%		Fixed			145,000		August 2021

							$	1,000,706

(a)	Spread over LIBOR (0.24% at September 30, 2011).

(b)	Includes extension options.

(c)	Principal balance of £73,130,000 at September 30, 2011. Spread over three-month GBP LIBOR (0.95% at September 30, 2011).

Domestic and European Interest Rate Swaps


Swap Effective Date	Fixed Pay Rate Against LIBOR			Notional Amount		Maturity
February 2010		4.90	%	$	100,000		September 2014
February 2010		4.96	%		100,000		December 2014
December 2010		5.23	%		100,000		December 2015
February 2011		5.27	%		100,000		February 2016

		5.09	%	$	400,000


Swap Effective Date	Fixed Pay Rate Against GBP LIBOR			Notional Amount		Maturity
October 2007		5.72	%	£	73,130		October 2013

At September 30, 2011, future scheduled debt principal payments (including extension options) are as follows:


Years ending December 31,	Amount
2011 (remainder)	$	—
2012		109,107
2013		123,112
2014		13,872
2015		15,046
Thereafter		739,569

	$	1,000,706

Percent of fixed rate debt including U.S. and European swaps		97.8	%
Weighted average interest rate including U.S. and European swaps (d)		6.80	%
Weighted average maturity of fixed rate debt (debt with maturity of greater than one year)		5.05

(d)	Excludes the amortization of deferred financing costs and the amortization of the interest rate swap costs.


		Supplemental Financial Information
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)		September 30, 2011


	Portfolio Data Portfolio at September 30, 2011 (dollars in thousands)
Hotel	Location		Number of Rooms		% of Total Rooms			% of QTR September 2011 Property EBITDA			QTR September 2011 Property EBITDA
United States:
Westin St. Francis		San Francisco, CA		1,195		15	%		14	%	$	6,894
InterContinental Chicago (a)		Chicago, IL		792		10	%		10	%		5,045
Hotel del Coronado (b)		Coronado, CA		757		10	%		12	%		5,829
Fairmont Chicago		Chicago, IL		687		9	%		9	%		4,487
Fairmont Scottsdale Princess (c)		Scottsdale, AZ		649		8	%		-3	%		(1,226	)
InterContinental Miami		Miami, FL		641		8	%		-1	%		(658	)
Hyatt Regency La Jolla (d)		La Jolla, CA		419		5	%		3	%		1,302
Ritz-Carlton Laguna Niguel		Dana Point, CA		396		5	%		13	%		6,159
Marriott Lincolnshire Resort		Lincolnshire, IL		389		5	%		2	%		1,060
Loews Santa Monica Beach Hotel		Santa Monica, CA		342		5	%		10	%		4,699
Ritz-Carlton Half Moon Bay		Half Moon Bay, CA		261		3	%		8	%		3,827
Four Seasons Washington, D.C.		Washington, D.C.		222		3	%		7	%		3,686
Four Seasons Silicon Valley (e)		Palo Alto, CA		200		3	%		2	%		868
Four Seasons Jackson Hole (e)		Jackson Hole, WY		124		2	%		6	%		2,949

Total United States				7,074		91	%		92	%		44,921

Mexican:
Four Seasons Punta Mita Resort		Punta Mita, Mexico		173		2	%		-1	%		(667	)

Total Mexican				173		2	%		-1	%		(667	)

Total North American				7,247		93	%		91	%		44,254

European:
Marriott Hamburg (f)		Hamburg, Germany		278		4	%		N/A			N/A
Marriott London Grosvenor Square		London, England		237		3	%		9	%		4,377

Total European				515		7	%		9	%		4,377

				7,762		100	%		100	%	$	48,631

(a)	Prior to June 24, 2011, we owned a 51% controlling interest in the entity that owns the InterContinental Chicago hotel and consolidated this hotel for reporting purposes. On June 24, 2011, we purchased the remaining 49% interest and now own 100% of this hotel.

(b)

Prior to February 4, 2011, we owned a 45% interest in the unconsolidated affiliate that owns the Hotel del Coronado. On February 4, 2011, we completed a recapitalization of the unconsolidated affiliate and our ownership interest decreased from 45% to 34.3%. We account for this investment under the equity method of accounting and record equity in (losses) earnings of the unconsolidated affiliate in our consolidated statements of operations. Property EBITDA has been calculated based on our 34.3% ownership.

(c)

Prior to June 9, 2011, we owned 100% of the Fairmont Scottsdale Princess hotel. On June 9, 2011, we completed a recapitalization of the entity and our ownership interest decreased to 50%. We now account for this investment under the equity method of accounting and record equity in (losses) earnings of the unconsolidated affiliate in our consolidated statements of operations. Property EBITDA has been calculated based on our 50.0% ownership.

(d)	Prior to June 24, 2011, we owned a 51% controlling interest in the entity that owns the Hyatt Regency La Jolla hotel. On June 24, 2011, we purchased an additional 2.5% interest and continue to consolidate this hotel for reporting purposes.

(e)	On March 11, 2011, we purchased these hotels.

(f)	We sublease this property and have not included it in the percentage of Property EBITDA calculation.


		Supplemental Financial Information
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)		Four Quarters Ended September 30, 2011

Seasonality by Geographic Region

(dollars in thousands)

Same store property revenues have been adjusted to show hotel performance on a comparable quarter-over-quarter basis. Adjustments include (i) exclusion of Paris Marriott and the InterContinental Prague as their results of operations were reclassified to discontinued operations, (ii) exclusion of the unconsolidated Hotel del Coronado and Fairmont Scottsdale Princess and (iii) presentation of the hotels without regard to either ownership structure or leaseholds. Acquisition properties and the related dates of purchase are as follows: Four Seasons Jackson Hole hotel (March 11, 2011) and Four Seasons Silicon Valley hotel (March 11, 2011).

United States Hotels (as of September 30, 2011)

Acquisition property revenues—2 Properties and 324 Rooms

Same store property revenues—10 Properties and 5,344 Rooms


	Three Months Ended
	December 31, 2010			March 31, 2011			June 30, 2011			September 30, 2011			Total
Acquisition property revenues (a)	$	—		$	4,209		$	11,376		$	17,792		$	33,377
Acquisition property revenues (b)		11,397			13,086			—			—			24,483
Same store property revenues		144,132			127,484			156,302			156,555			584,473

Total pro forma revenues	$	155,529		$	144,779		$	167,678		$	174,347		$	642,333
Pro forma seasonality %		24.2	%		22.6	%		26.1	%		27.1	%		100.0	%

Mexican Hotel (as of September 30, 2011)

Same store property revenues—1 Property and 173 Rooms


	Three Months Ended
	December 31, 2010			March 31, 2011			June 30, 2011			September 30, 2011			Total
Same store property revenues	$	10,703		$	10,561		$	8,594		$	4,457		$	34,315
Same store seasonality %		31.2	%		30.8	%		25.0	%		13.0	%		100.0	%

North American Hotels (as of September 30, 2011)

Acquistion property revenues—2 Properties and 324 Rooms

Same store property revenues—11 Properties and 5,517 Rooms


	Three Months Ended
	December 31, 2010			March 31, 2011			June 30, 2011			September 30, 2011			Total
Acquisition property revenues (a)	$	—		$	4,209		$	11,376		$	17,792		$	33,377
Acquisition property revenues (b)		11,397			13,086			—			—			24,483
Same store property revenues		154,835			138,045			164,896			161,012			618,788

Total pro forma revenues	$	166,232		$	155,340		$	176,272		$	178,804		$	676,648
Pro forma seasonality %		24.6	%		22.9	%		26.1	%		26.4	%		100.0	%

European Hotels (as of September 30, 2011)

Same store property revenues—2 Properties and 515 Rooms


	Three Months Ended
	December 31, 2010			March 31, 2011			June 30, 2011			September 30, 2011			Total
Same store property revenues	$	15,872		$	11,513		$	16,367		$	15,832		$	59,584
Same store seasonality %		26.6	%		19.3	%		27.5	%		26.6	%		100.0	%

(a) Acquisition property revenues for our period of ownership

(b) Acquisition property revenues prior to our period of ownership


		Supplemental Financial Information
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)		Three and Nine Months Ended September 30, 2011 and 2010

Operating Statistics by Geographic Region

Operating results have been adjusted to show hotel performance on a comparable period basis. Adjustments are the (i) exclusion of unconsolidated Hotel del Coronado and Fairmont Scottsdale Princess, (ii) exclusion of Four Seasons Jackson Hole and Four Seasons Silicon Valley hotels, (iii) exclusion of Paris Marriott and InterContinental Prague as these properties results of operations were reclassified to discontinued operations for the periods presented and (iv) presentation of the hotels without regard to either ownership structure or leaseholds.

United States Hotels (as of September 30, 2011)

10 Properties

5,344 Rooms


	Three Months Ended September 30,									Nine Months Ended September 30,
	2011			2010			Change			2011			2010			Change
ADR	$	234.85		$	214.04			9.7	%	$	226.59		$	211.46			7.2	%
Average Occupancy		79.1	%		77.7	%		1.4	pts		73.4	%		69.3	%		4.1	pts
RevPAR	$	185.83		$	166.31			11.7	%	$	166.31		$	146.47			13.5	%
Total RevPAR	$	320.46		$	294.58			8.8	%	$	303.53		$	271.63			11.7	%
Property EBITDA Margin		23.3	%		21.3	%		2.0	pts		21.2	%		17.9	%		3.3	pts

Mexican Hotel (as of September 30, 2011)

1 Property

173 Rooms


	Three Months Ended September 30,									Nine Months Ended September 30,
	2011			2010			Change			2011			2010			Change
ADR	$	422.13		$	407.53			3.6	%	$	597.54		$	635.92			-6.0	%
Average Occupancy		37.0	%		41.2	%		(4.2	)pts		44.1	%		50.5	%		(6.4	)pts
RevPAR	$	156.06		$	167.94			-7.1	%	$	263.45		$	321.28			-18.0	%
Total RevPAR	$	280.00		$	352.97			-20.7	%	$	499.93		$	597.63			-16.3	%
Property EBITDA Margin		-15.0	%		3.7	%		(18.7	)pts		20.5	%		30.0	%		(9.5	)pts

North American Hotels (as of September 30, 2011)

11 Properties

5,517 Rooms


	Three Months Ended September 30,									Nine Months Ended September 30,
	2011			2010			Change			2011			2010			Change
ADR	$	237.66		$	217.33			9.4	%	$	233.71		$	221.31			5.6	%
Average Occupancy		77.8	%		76.5	%		1.3	pts		72.5	%		68.7	%		3.8	pts
RevPAR	$	184.89		$	166.36			11.1	%	$	169.37		$	151.98			11.4	%
Total RevPAR	$	319.18		$	296.42			7.7	%	$	309.72		$	281.91			9.9	%
Property EBITDA Margin		22.3	%		20.6	%		1.7	pts		21.1	%		18.7	%		2.4	pts

European Hotels (as of September 30, 2011)

2 Properties

515 Rooms


	Three Months Ended September 30,									Nine Months Ended September 30,
	2011			2010			Change			2011			2010			Change
ADR	$	293.97		$	279.74			5.1	%	$	283.76		$	258.92			9.6	%
Average Occupancy		87.6	%		87.3	%		0.3	pts		81.5	%		80.1	%		1.4	pts
RevPAR	$	257.47		$	244.32			5.4	%	$	231.28		$	207.27			11.6	%
Total RevPAR	$	334.14		$	315.70			5.8	%	$	310.90		$	281.16			10.6	%
Property EBITDA Margin		38.6	%		38.9	%		(0.3	)pts		36.5	%		36.6	%		(0.1	)pts


		Supplemental Financial Information
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)		Three and Nine Months Ended September 30, 2011 and 2010

Selected Financial and Operating Information by Property

(in thousands, except operating information)

The following tables present selected financial and operating information by property for the three and nine months ended September 30, 2011 and 2010. Property EBITDA reflects property net operating income or loss plus depreciation and amortization.


	Three Months Ended September 30,									Nine Months Ended September 30,
UNITED STATES HOTELS:	2011			2010			Change			2011			2010			Change
FAIRMONT CHICAGO
Selected Financial Information:
Total revenues	$	16,763		$	15,766			6.3	%	$	42,293		$	37,942			11.5	%
Property EBITDA	$	4,487		$	2,870			56.3	%	$	7,519		$	3,783			98.8	%

Selected Operating Information:
Rooms		687			687			—			687			687			—
Average occupancy		78.8	%		77.5	%		1.3	pts		65.7	%		59.9	%		5.8	pts
ADR	$	212.55		$	192.62			10.3	%	$	206.36		$	196.57			5.0	%
RevPAR	$	167.57		$	149.36			12.2	%	$	135.63		$	117.74			15.2	%
Total RevPAR	$	265.23		$	249.45			6.3	%	$	225.50		$	202.30			11.5	%

FAIRMONT SCOTTSDALE PRINCESS
Selected Financial Information (Amounts below are 100% of operations, of which SHR owns 50% and 100% as of September 30, 2011 and 2010, respectively):
Total revenues	$	10,280		$	8,830			16.4	%	$	54,923		$	51,466			6.7	%
Property EBITDA	$	(2,452	)	$	(3,143	)		22.0	%	$	8,076		$	5,496			46.9	%

Selected Operating Information:
Rooms		649			649			—			649			649			—
Average occupancy		49.4	%		44.5	%		4.9	pts		65.4	%		65.6	%		(0.2	)pts
ADR	$	146.82		$	133.18			10.2	%	$	218.62		$	195.08			12.1	%
RevPAR	$	72.56		$	59.25			22.5	%	$	142.87		$	128.05			11.6	%
Total RevPAR	$	172.17		$	147.89			16.4	%	$	309.99		$	290.48			6.7	%

FOUR SEASONS JACKSON HOLE
Selected Financial Information (This table includes financial information only for our period of ownership):
Total revenues	$	11,053			N/A			N/A			N/A			N/A			N/A
Property EBITDA	$	2,949			N/A			N/A			N/A			N/A			N/A

Selected Operating Information (This table includes statistical information only for our period of ownership. For the three months ended September 30, 2010, average occupancy was 79.1%, ADR was $561.35, RevPAR was $444.09 and Total RevPAR was $1,008.43. For the nine months ended September 30, 2011, average occupancy was 63.7%, ADR was $523.50, RevPAR was $333.42 and Total RevPAR was $759.44. For the nine months ended September 30, 2010, average occupancy was 60.3%, ADR was $526.69, RevPAR was $317.66 and Total RevPAR was $747.88.):
Rooms		124			N/A			N/A			N/A			N/A			N/A
Average occupancy		76.6	%		N/A			N/A			N/A			N/A			N/A
ADR	$	590.81			N/A			N/A			N/A			N/A			N/A
RevPAR	$	452.33			N/A			N/A			N/A			N/A			N/A
Total RevPAR	$	968.86			N/A			N/A			N/A			N/A			N/A

FOUR SEASONS SILICON VALLEY
Selected Financial Information (This table includes financial information only for our period of ownership):
Total revenues	$	6,739			N/A			N/A			N/A			N/A			N/A
Property EBITDA	$	868			N/A			N/A			N/A			N/A			N/A

Selected Operating Information (This table includes statistical information only for our period of ownership. For the three months ended September 30, 2010, average occupancy was 67.1%, ADR was $267.61, RevPAR was $179.45 and Total RevPAR was $319.30. For the nine months ended September 30, 2011, average occupancy was 69.1%, ADR was $296.87, RevPAR was $205.13 and Total RevPAR was $379.52. For the nine months ended September 30, 2010, average occupancy was 67.1%, ADR was $265.01, RevPAR was $177.73 and Total RevPAR was $330.14.):
Rooms		200			N/A			N/A			N/A			N/A			N/A
Average occupancy		73.2	%		N/A			N/A			N/A			N/A			N/A
ADR	$	286.97			N/A			N/A			N/A			N/A			N/A
RevPAR	$	210.05			N/A			N/A			N/A			N/A			N/A
Total RevPAR	$	366.22			N/A			N/A			N/A			N/A			N/A


		Supplemental Financial Information
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)		Three and Nine months Ended September 30, 2011 and 2010


	Three Months Ended September 30,									Nine Months Ended September 30,
	2011			2010			Change			2011			2010			Change

FOUR SEASONS WASHINGTON, D.C.
Selected Financial Information:
Total revenues	$	14,877		$	13,351			11.4	%	$	45,315		$	41,727			8.6	%
Property EBITDA	$	3,686		$	2,405			53.3	%	$	10,522		$	8,159			29.0	%

Selected Operating Information:
Rooms		222			222			—			222			222			—
Average occupancy		70.9	%		69.4	%		1.5	pts		71.3	%		70.8	%		0.5	pts
ADR	$	557.19		$	481.60			15.7	%	$	532.00		$	496.89			7.1	%
RevPAR	$	394.98		$	334.04			18.2	%	$	379.56		$	351.63			7.9	%
Total RevPAR	$	728.41		$	653.70			11.4	%	$	747.70		$	688.50			8.6	%

HOTEL DEL CORONADO
Selected Financial Information (Amounts below are 100% of operations, of which SHR owns 34.3% and 45% as of September 30, 2011 and 2010, respectively):
Total revenues	$	40,765		$	39,683			2.7	%	$	101,255		$	94,167			7.5	%
Property EBITDA	$	16,995		$	15,593			9.0	%	$	34,748		$	30,871			12.6	%

Selected Operating Information:
Rooms		757			757			—			757			757			—
Average occupancy		84.2	%		79.9	%		4.3	pts		71.6	%		66.8	%		4.8	pts
ADR	$	365.63		$	358.30			2.0	%	$	327.94		$	325.14			0.9	%
RevPAR	$	307.83		$	286.18			7.6	%	$	234.82		$	217.11			8.2	%
Total RevPAR	$	585.34		$	569.80			2.7	%	$	489.96		$	455.66			7.5	%

HYATT REGENCY LA JOLLA
Selected Financial Information:
Total revenues	$	8,069		$	7,943			1.6	%	$	25,923		$	22,924			13.1	%
Property EBITDA	$	1,302		$	1,071			21.6	%	$	4,651		$	3,063			51.8	%

Selected Operating Information:
Rooms		419			419			—			419			419			—
Average occupancy		79.7	%		77.1	%		2.6	pts		77.4	%		72.9	%		4.5	pts
ADR	$	161.61		$	153.79			5.1	%	$	158.98		$	149.96			6.0	%
RevPAR	$	128.82		$	118.51			8.7	%	$	123.05		$	109.37			12.5	%
Total RevPAR	$	209.31		$	206.05			1.6	%	$	226.63		$	200.41			13.1	%

INTERCONTINENTAL CHICAGO
Selected Financial Information:
Total revenues	$	18,787		$	18,512			1.5	%	$	48,076		$	45,148			6.5	%
Property EBITDA	$	5,045		$	5,495			(8.2	)%	$	11,457		$	10,895			5.2	%

Selected Operating Information:
Rooms		792			792			—			792			792			—
Average occupancy		85.6	%		85.9	%		(0.3	)pts		76.5	%		72.1	%		4.4	pts
ADR	$	183.83		$	173.40			6.0	%	$	180.02		$	173.10			4.0	%
RevPAR	$	157.32		$	148.98			5.6	%	$	137.70		$	124.77			10.4	%
Total RevPAR	$	257.83		$	254.06			1.5	%	$	222.35		$	208.81			6.5	%

INTERCONTINENTAL MIAMI
Selected Financial Information:
Total revenues	$	6,981		$	6,754			3.4	%	$	35,307		$	34,558			2.2	%
Property EBITDA	$	(658	)	$	(579	)		(13.6	)%	$	7,912		$	7,528			5.1	%

Selected Operating Information:
Rooms		641			641			—			641			641			—
Average occupancy		55.8	%		55.9	%		(0.1	)pts		69.1	%		66.6	%		2.5	pts
ADR	$	118.10		$	115.21			2.5	%	$	165.02		$	165.22			(0.1	)%
RevPAR	$	65.95		$	64.39			2.4	%	$	113.95		$	109.96			3.6	%
Total RevPAR	$	118.37		$	114.53			3.4	%	$	201.76		$	197.48			2.2	%


		Supplemental Financial Information
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)		Three and Nine months Ended September 30, 2011 and 2010


	Three Months Ended September 30,									Nine Months Ended September 30,
	2011			2010			Change			2011			2010			Change

LOEWS SANTA MONICA BEACH HOTEL
Selected Financial Information:
Total revenues	$	14,447		$	12,922			11.8	%	$	37,279		$	33,994			9.7	%
Property EBITDA	$	4,699		$	4,249			10.6	%	$	10,054		$	9,245			8.8	%

Selected Operating Information:
Rooms		342			342			—			342			342			—
Average occupancy		95.1	%		93.3	%		1.8	pts		89.6	%		88.0	%		1.6	pts
ADR	$	350.72		$	312.58			12.2	%	$	305.68		$	276.28			10.6	%
RevPAR	$	333.59		$	291.76			14.3	%	$	274.02		$	243.07			12.7	%
Total RevPAR	$	459.17		$	410.69			11.8	%	$	399.28		$	364.09			9.7	%

MARRIOTT LINCOLNSHIRE RESORT
Selected Financial Information:
Total revenues	$	8,483		$	7,491			13.2	%	$	21,013		$	19,400			8.3	%
Property EBITDA	$	1,060		$	886			19.6	%	$	1,170		$	(432	)		370.8	%

Selected Operating Information:
Rooms		389			389			—			389			389			—
Average occupancy		66.4	%		56.8	%		9.6	pts		51.0	%		47.8	%		3.2	pts
ADR	$	118.73		$	116.07			2.3	%	$	122.12		$	112.46			8.6	%
RevPAR	$	78.85		$	65.91			19.6	%	$	62.23		$	53.74			15.8	%
Total RevPAR	$	259.62		$	229.24			13.3	%	$	214.36		$	197.91			8.3	%

RITZ-CARLTON HALF MOON BAY
Selected Financial Information:
Total revenues	$	16,054		$	15,184			5.7	%	$	41,470		$	38,953			6.5	%
Property EBITDA	$	3,827		$	2,656			44.1	%	$	7,236		$	5,654			28.0	%

Selected Operating Information:
Rooms		261			261			—			261			261			—
Average occupancy		77.8	%		76.3	%		1.5	pts		68.3	%		69.2	%		(0.9	)pts
ADR	$	389.44		$	349.44			11.4	%	$	352.73		$	319.41			10.4	%
RevPAR	$	303.04		$	266.50			13.7	%	$	240.89		$	220.90			9.0	%
Total RevPAR	$	668.58		$	632.36			5.7	%	$	582.01		$	546.69			6.5	%

RITZ-CARLTON LAGUNA NIGUEL
Selected Financial Information:
Total revenues	$	19,917		$	18,540			7.4	%	$	50,646		$	42,976			17.8	%
Property EBITDA	$	6,159		$	5,555			10.9	%	$	12,791		$	9,048			41.4	%

Selected Operating Information:
Rooms		396			396			—			396			396			—
Average occupancy		71.9	%		70.7	%		1.2	pts		64.6	%		55.6	%		9.0	pts
ADR	$	391.02		$	376.64			3.8	%	$	344.44		$	345.82			(0.4	)%
RevPAR	$	281.00		$	266.32			5.5	%	$	222.58		$	192.27			15.8	%
Total RevPAR	$	546.70		$	508.90			7.4	%	$	468.48		$	397.53			17.8	%

WESTIN ST. FRANCIS
Selected Financial Information:
Total revenues	$	32,177		$	27,451			17.2	%	$	93,017		$	76,444			21.7	%
Property EBITDA	$	6,894		$	5,981			15.3	%	$	19,833		$	13,455			47.4	%

Selected Operating Information:
Rooms		1,195			1,195			—			1,195			1,195			—
Average occupancy		90.7	%		90.2	%		0.5	pts		83.2	%		78.3	%		4.9	pts
ADR	$	212.76		$	184.86			15.1	%	$	206.86		$	179.53			15.2	%
RevPAR	$	193.03		$	166.71			15.8	%	$	172.06		$	140.61			22.4	%
Total RevPAR	$	292.68		$	249.70			17.2	%	$	285.12		$	234.32			21.7	%


		Supplemental Financial Information
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)		Three and Nine months Ended September 30, 2011 and 2010


	Three Months Ended September 30,									Nine Months Ended September 30,
MEXICAN HOTEL:	2011			2010			Change			2011			2010			Change

FOUR SEASONS PUNTA MITA RESORT
Selected Financial Information:
Total revenues	$	4,457		$	5,618			(20.7	)%	$	23,611		$	28,225			(16.3	)%
Property EBITDA	$	(667	)	$	206			(423.8	)%	$	4,845		$	8,471			(42.8	)%

Selected Operating Information:
Rooms		173			173			—			173			173			—
Average occupancy		37.0	%		41.2	%		(4.2	)pts		44.1	%		50.5	%		(6.4	)pts
ADR	$	422.13		$	407.53			3.6	%	$	597.54		$	635.92			(6.0	)%
RevPAR	$	156.06		$	167.94			(7.1	)%	$	263.45		$	321.28			(18.0	)%
Total RevPAR	$	280.00		$	352.97			(20.7	)%	$	499.93		$	597.63			(16.3	)%


		Supplemental Financial Information
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)		Three and Nine Months Ended September 30, 2011


	Three Months Ended September 30,									Nine Months Ended September 30,
EUROPEAN HOTELS:	2011			2010			Change			2011			2010			Change
MARRIOTT HAMBURG
Selected Financial Information:
Total revenues	$	6,016		$	5,536			8.7	%	$	17,449		$	14,906			17.1	%
Property EBITDA	$	1,734		$	1,620			7.0	%	$	5,034		$	4,369			15.2	%

Selected Operating Information:
Rooms		278			278			—			278			278			—
Average occupancy		84.7	%		85.2	%		(0.5	)pts		82.5	%		78.0	%		4.5	pts
ADR	$	205.15		$	185.26			10.7	%	$	202.24		$	182.65			10.7	%
RevPAR	$	173.75		$	157.91			10.0	%	$	166.77		$	142.45			17.1	%
Total RevPAR	$	235.21		$	216.46			8.7	%	$	229.91		$	196.40			17.1	%
MARRIOTT LONDON GROSVENOR SQUARE
Selected Financial Information:
Total revenues	$	9,816		$	9,422			4.2	%	$	26,263		$	24,624			6.7	%
Property EBITDA	$	4,377		$	4,203			4.1	%	$	10,935		$	10,081			8.5	%

Selected Operating Information:
Rooms		237			237			—			237			237			—
Average occupancy		91.0	%		89.8	%		1.2pts			80.4	%		82.5	%		(2.1	)pts
ADR	$	390.97		$	384.96			1.6	%	$	381.84		$	343.52			11.2	%
RevPAR	$	355.68		$	345.67			2.9	%	$	306.94		$	283.29			8.3	%
Total RevPAR	$	450.18		$	432.11			4.2	%	$	405.91		$	380.58			6.7	%


		Supplemental Financial Information
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)		Three and Nine Months Ended September 30, 2011 and 2010

Reconciliation of Property EBITDA to EBITDA

(in thousands)


	Three Months Ended September 30,												Nine Months Ended September 30,
	2011						2010						2011					2010
	Property						Property						Property					Property
Hotel	EBITDA			EBITDA			EBITDA			EBITDA			EBITDA		EBITDA			EBITDA			EBITDA
Fairmont Chicago	$	4,487		$	4,487		$	2,870		$	2,870		$	7,519	$	7,519		$	3,783		$	3,783
Fairmont Scottsdale Princess (a)		(2,452	)		—			(3,143	)		(3,143	)		8,076		11,272			5,496			5,496
Four Seasons Jackson Hole (b)		2,949			2,949			—			—			—		2,962			—			—
Four Seasons Silicon Valley (b)		868			868			—			—			—		2,504			—			—
Four Seasons Washington, D.C.		3,686			3,686			2,405			2,405			10,522		10,522			8,159			8,159
Hotel del Coronado (c)		16,995			—			15,593			—			34,748		—			30,871			—
Hyatt Regency La Jolla		1,302			1,302			1,071			1,071			4,651		4,651			3,063			3,063
InterContinental Chicago		5,045			5,045			5,495			5,495			11,457		11,457			10,895			10,895
InterContinental Miami		(658	)		(658	)		(579	)		(579	)		7,912		7,912			7,528			7,528
Loews Santa Monica Beach Hotel		4,699			4,699			4,249			4,249			10,054		10,054			9,245			9,245
Marriott Lincolnshire Resort		1,060			1,060			886			886			1,170		1,170			(432	)		(432	)
Ritz-Carlton Half Moon Bay		3,827			3,827			2,656			2,656			7,236		7,236			5,654			5,654
Ritz-Carlton Laguna Niguel		6,159			6,159			5,555			5,555			12,791		12,791			9,048			9,048
Westin St. Francis		6,894			6,894			5,981			5,981			19,833		19,833			13,455			13,455
Four Seasons Punta Mita Resort		(667	)		(667	)		206			206			4,845		4,845			8,471			8,471
Marriott Hamburg (d)		1,734			6			1,620			2			5,034		45			4,369			(13	)
Marriott London Grosvenor Square		4,377			4,377			4,203			4,203			10,935		10,935			10,081			10,081

	$	60,305		$	44,034		$	49,068		$	31,857		$	156,783	$	125,708		$	129,686		$	94,433

Adjustments:
Corporate expenses					2,228						(8,679	)				(24,206	)					(22,098	)
Interest income					41						64					124						369
Loss on early extinguishment of debt					(399	)					(39	)				(1,237	)					(925	)
Loss on early termination of derivative financial instruments					—						—					(29,242	)					(18,263	)
Equity in (losses) earnings of unconsolidated affiliates					(1,867	)					3,001					(6,266	)					2,900
Foreign currency exchange (loss) gain					(209	)					(132	)				77						(1,394	)
Other income, net					355						1,605					4,716						2,299
Income (loss) from discontinued operations					19						(4,143	)				101,215						6,474
Depreciation expense—discontinued operations					—						1,859					—						5,413
Interest expense—discontinued operations					—						2,378					—						7,716
Income taxes—discontinued operations					—						329					379						736
Noncontrolling interest in consolidated affiliates					(254	)					(1,086	)				(997	)					(858	)
Adjustments from consolidated affiliates					(1,248	)					(1,978	)				(5,431	)					(5,596	)
Adjustments from unconsolidated affiliates					7,162						4,332					16,293						11,890
Other adjustments					86						75					(780	)					(775	)

EBITDA				$	49,948					$	29,443				$	180,353					$	82,321

(a)

Prior to June 9, 2011, we owned 100% of the Fairmont Scottsdale Princess hotel. On June 9, 2011, we completed a recapitalization of the entity and our ownership interest decreased to 50%. We now account for this investment under the equity method of accounting. Therefore, EBITDA related to our interest in this property subsequent to June 9, 2011 is reflected in adjustments from unconsolidated affiliates for the three and nine months ended September 30, 2011. Property EBITDA represents 100% of revenue and expenses generated by the property.

(b)	On March 11, 2011, we purchased the Four Seasons Jackson Hole and the Four Seasons Silicon Valley hotels. We have not included the results of these hotels in Property EBITDA for the nine months ended September 30, 2011 above since we did not own the properties for the entire period.

(c)

We account for this property under the equity method of accounting. Therefore, EBITDA related to our interest in this property is reflected in adjustments from unconsolidated affiliates for the three and nine months ended September 30, 2011 and 2010, respectively. Property EBITDA represents 100% of revenue and expenses generated by the property.

(d)	We have a leasehold interest in and sublease this property. Therefore, EBITDA represents the lease revenue less the lease expense recorded in our statements. Property EBITDA represents the revenue less expenses generated by the property.


		Supplemental Financial Information
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)		Three and Nine Months Ended September 30, 2011

Reconciliation of Property EBITDA to Comparable EBITDA

(in thousands)


	Three Months Ended September 30, 2011									Nine Months Ended September 30, 2011
	Property						Comparable			Property					Comparable
	EBITDA			Adjustments			EBITDA			EBITDA		Adjustments			EBITDA
Meetings & Business Hotels:
Fairmont Chicago	$	4,487		$	—		$	4,487		$	7,519	$	—		$	7,519
Fairmont Scottsdale Princess		(2,452	)		1,130			(1,322	)		8,076		958			9,034
Four Seasons Jackson Hole		2,949			—			2,949			—		2,962			2,962
Four Seasons Silicon Valley		868			—			868			—		2,504			2,504
Four Seasons Washington, D.C.		3,686			—			3,686			10,522		—			10,522
Hyatt Regency La Jolla		1,302			(605	)		697			4,651		(2,246	)		2,405
InterContinental Chicago		5,045			—			5,045			11,457		(2,885	)		8,572
InterContinental Miami		(658	)		—			(658	)		7,912		—			7,912
Westin St. Francis		6,894			—			6,894			19,833		—			19,833

Total Meetings & Business Hotels		22,121			525			22,646			69,970		1,293			71,263

Ocean Front Resorts:
Four Seasons Punta Mita Resort		(667	)		—			(667	)		4,845		—			4,845
Hotel del Coronado		16,995			(11,248	)		5,747			34,748		(24,273	)		10,475
Loews Santa Monica Beach Hotel		4,699			—			4,699			10,054		—			10,054
Ritz-Carlton Half Moon Bay		3,827			—			3,827			7,236		—			7,236
Ritz-Carlton Laguna Niguel		6,159			—			6,159			12,791		—			12,791

Total Ocean Front Resorts		31,013			(11,248	)		19,765			69,674		(24,273	)		45,401

European Hotels:
Marriott Hamburg		1,734			(1,770	)		(36	)		5,034		(5,140	)		(106	)
Marriott London Grosvenor Square		4,377			—			4,377			10,935		—			10,935

Total European Hotels		6,111			(1,770	)		4,341			15,969		(5,140	)		10,829

Non-Core Assets:
Marriott Lincolnshire Resort		1,060			—			1,060			1,170		—			1,170

Total Non-Core Assets		1,060			—			1,060			1,170		—			1,170

	$	60,305		$	(12,493	)	$	47,812		$	156,783	$	(28,120	)	$	128,663


	% of QTR			% of YTD
	Comparable EBITDA			Comparable EBITDA
Meetings & Business Hotels		48	%		56	%
Ocean Front Resorts		41	%		35	%
European Hotels		9	%		8	%
Non-Core Assets		2	%		1	%

Total		100	%		100	%


		Supplemental Financial Information
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)		September 30, 2011

2011 Guidance

(in millions, except per share data)


	Year Ended December 31, 2011
Operational Guidance	Low Range			High Range
North American same store Total RevPAR growth (a)		8.0	%		9.0	%
North American same store RevPAR growth (a)		9.0	%		10.0	%

(a)	Includes North American hotels which are consolidated in our financial results, but excludes the Four Seasons Jackson Hole and Four Seasons Silicon Valley hotels.


	Year Ended December 31, 2011
Comparable EBITDA Guidance	Low Range			High Range
Net loss attributable to common shareholders	$	(39.7	)	$	(33.7	)
Depreciation and amortization		116.3			116.3
Interest expense		88.4			88.4
Income taxes		1.8			1.8
Adjustments from consolidated affiliates		(6.6	)		(6.6	)
Adjustments from unconsolidated affiliates		21.5			21.5
Preferred shareholder dividends		30.9			30.9
Realized portion of deferred gain on sale-leasebacks		(1.4	)		(1.4	)
Gain on sale of asset		(103.5	)		(103.5	)
Adjustment for Value Creation Plan		12.0			12.0
Loss on early extinguishment of debt		1.2			1.2
Loss on early termination of derivative financial instruments		29.2			29.2
Other adjustments		(0.1	)		(0.1	)

Comparable EBITDA	$	150.0		$	156.0


	Year Ended December 31, 2011
Comparable FFO Guidance	Low Range			High Range
Net loss attributable to common shareholders	$	(39.7	)	$	(33.7	)
Depreciation and amortization		115.1			115.1
Realized portion of deferred gain on sale-leasebacks		(1.4	)		(1.4	)
Deferred tax on realized portion of deferred gain		0.4			0.4
Adjustments from consolidated affiliates		(4.3	)		(4.3	)
Adjustments from unconsolidated affiliates		9.8			9.8
Gain on sale of asset		(103.5	)		(103.5	)
Adjustment for Value Creation Plan		12.0			12.0
Loss on early extinguishment of debt		1.2			1.2
Loss on early termination of derivative financial instruments		29.2			29.2
Other adjustments		(0.6	)		(0.6	)

Comparable FFO	$	18.2		$	24.2

Comparable FFO per diluted share	$	0.10		$	0.13

Note: Beginning in the first quarter of 2011, the definitions of Comparable EBITDA, Comparable FFO and Comparable FFO per diluted share have been modified to exclude any expense related to our Value Creation Plan.

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STRATEGIC HOTELS & RESORTS, INC Reports