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8-K - FORM 8-K - Morgans Hotel Group Co. | c24347e8vk.htm |
Exhibit 99.1
Contacts:
Richard Szymanski
Morgans Hotel Group Co.
212.277.4188
Richard Szymanski
Morgans Hotel Group Co.
212.277.4188
Neil Maitland
The Abernathy MacGregor Group
212.371.5999
The Abernathy MacGregor Group
212.371.5999
MORGANS HOTEL GROUP REPORTS THIRD QUARTER 2011 RESULTS
NEW YORK, NY November 7, 2011 Morgans Hotel Group Co. (NASDAQ: MHGC) (MHG or the Company)
today reported financial results for the quarter ended September 30, 2011.
| Adjusted EBITDA was $4.9 million in the third quarter of 2011. Excluding the impact of
asset sales, assets held for sale and Hard Rock, Adjusted EBITDA increased by $1.0 million
from the comparable period in 2010. |
| Revenue per available room (RevPAR) for System-Wide Comparable Hotels increased by
9.3%, or 8.4% in constant dollars, in the third quarter of 2011 from the comparable period
in 2010, driven primarily by a 6.3% increase in average daily rate (ADR) (5.4% in
constant dollars). |
| Excluding the impact of Hurricane Irene, EBITDA from Owned Comparable Hotels increased
by 15.3% in the third quarter of 2011 as compared to the same period in 2010, driven by an
8.8% RevPAR increase. |
| Excluding the impact of Hurricane Irene, operating margins at Comparable Owned Hotels
increased by 190 basis points. |
| In August 2011, the Company entered into a hotel management and residential licensing
agreement for a 310-room Mondrian-branded hotel, to be the lifestyle hotel destination in
the 1,000 acre destination resort metropolis, Baha Mar Resort, in Nassau, The Bahamas. |
| During the quarter, the Company transformed its balance sheet by adding liquidity
through a new $100 million credit line, reducing its debt, and eliminating all near-term
consolidated maturities. The Company has retired approximately $240 million of debt in
2011, has no consolidated debt maturities until 2014, and has pro forma liquidity, assuming
the completion of the sale of the London joint venture, of approximately $163 million. |
| In October 2011, the Company and Walton Street, the 50/50 partners in the joint venture
that owns the Sanderson and St Martins Lane hotels, entered into an agreement to sell the
joint venture for £192 million, or approximately $308 million based on todays exchange
rate. The Company expects to receive net proceeds of approximately $70 million on closing
of the transaction, which is expected to occur in the fourth quarter of 2011. |
Michael Gross, CEO of the Company, said: Our hotels continued to perform well in the quarter and
we made significant progress in positioning the company for growth. We have further reduced our
leverage, eliminated all near-term consolidated debt maturities and improved our liquidity
position. We are now focused on enhancing our status as a global leader in lifestyle hospitality
management. We are excited
about the opportunity to add more contracts and expand our Hudson, Mondrian and Delano brands
around the world.
Third Quarter 2011 Operating Results
Adjusted EBITDA for the third quarter of 2011 was $4.9 million, a decrease of 56.1% from
the same period in 2010. Excluding the EBITDA contribution from the three hotels MHG sold in May
2011, EBITDA from the London hotels, which are held for sale, and from Hard Rock Hotel & Casino in
Las Vegas, which the Company managed and partially owned until March 2011, Adjusted EBITDA
increased by $1.0 million from the third quarter of 2010, or 56.5%. This increase was due to
strong operating results at Delano and the strong ramp-up at our new Mondrian hotel in New Yorks
SoHo neighborhood.
RevPAR at System-Wide Comparable Hotels increased by 9.3% (8.4% in constant dollars) in the third
quarter of 2011 compared to the third quarter of 2010, driven primarily by gains in ADR, which
increased by 6.3% (5.4% in constant dollars).
Results were led by MHGs South Beach hotels, which continue to benefit from both strong domestic
and international travel. At MHGs key EBITDA contributors, Delanos RevPAR increased by 18.3% and
Hudsons RevPAR increased 4.0% (6.0% excluding the impact of cancellations due to Hurricane Irene).
Mondrian SoHo, our newest hotel in New York City, posted an occupancy rate of 79.5% during the
three months ended September 30, 2011 and ADR of $298.95.
Primarily as a result of the sale in May 2011 of Mondrian Los Angeles, Royalton and Morgans, MHG
recorded a decrease of 18.6% in total hotel revenues during the third quarter of 2011 as compared
to the same period in 2010. At MHGs Comparable Owned Hotels, which includes Hudson, Delano and
Clift, RevPAR increased 7.7% in the three months ended September 30, 2011 as compared to the same
period in 2010.
The Company also recorded decreases in total operating expenses and depreciation and amortization
expense during the third quarter of 2011 as a result of the May 2011 sale of these three hotels.
MHG continues to manage these hotels pursuant to long-term management agreements, and as a result,
the gains on sales are deferred and recognized over the initial term of the respective management
agreements. During the three months ended September 30, 2011, the Company recorded $1.1 million of
this gain as income.
Operating margins at Comparable Owned Hotels increased by 80 basis points in the third quarter of
2011 compared to the same period last year. Excluding the impact of cancellations and direct costs
due to Hurricane Irene, operating margins at Comparable Owned Hotels increased by 190 basis points
in the third quarter of 2011 compared to the same period last year. The margin expansion was
driven by increases in ADR which accounted for virtually all of the RevPAR growth at the Companys
Comparable Owned Hotels. Operating margins at Comparable Owned Hotels were also adversely affected
by higher real estate taxes at Hudson, which are currently under appeal.
Based on the uncertain economic environment and the upcoming joint venture debt maturity in October
2012, the Company wrote down its investment in Ames Boston in September 2011 and recorded a $10.6
million non-cash impairment charge through equity in loss of unconsolidated joint ventures.
MHG recorded a net loss of $24.8 million in the third quarter of 2011 compared to a net loss of
$37.1 million in the third quarter of 2010 primarily due to decreases in other non-operating
expenses related to the non-cash charge for the change in the fair value of warrants issued to
Yucaipa in 2010.
Balance Sheet and Liquidity
During the third quarter, MHG transformed its balance sheet by increasing liquidity, reducing debt
and eliminating near-term maturities. During 2011, the Company has reduced its consolidated debt
by approximately $240 million.
In July 2011, the Company entered into a new $100 million senior secured revolving credit facility
with additional borrowing capacity up to $110 million. The facilitys interest rate is LIBOR plus
4.0%, subject to a LIBOR floor of 1.0%. The facility matures in three years and is secured by
Delano in South Beach. The credit facility contains standard financial covenants, including a
minimum fixed charge coverage ratio of 1.05x in the first year and 1.10x thereafter.
In August 2011, MHG refinanced the Hudson mortgage and mezzanine debt of $227.7 million, which was
scheduled to mature in October 2011. The Company retired the mortgage and mezzanine debt with net
proceeds of a new $135.0 million non-recourse mortgage loan agreement secured by Hudson, along with
cash on hand and in escrow. Under the terms of the new Hudson mortgage agreement, $115.0 million
was drawn at closing with the remaining $20.0 million available to be drawn based on the hotel
achieving certain levels of cash flow.
In October 2011, the Company as operator and 50% owner of the London joint venture that owns
Sanderson and St Martins Lane announced that the joint venture partners have entered into a
definitive agreement to sell their interests in the Sanderson and St Martins Lane hotels for £192
million, or approximately $308 million based on todays exchange rate. The sales price for the two
hotels represents a value of approximately £542,000, or $870,000, per room. MHG will continue to
operate the hotels under long-term management agreements. The terms of the management agreements,
including extension options, have been extended to 2041 from 2027. The joint venture partners
will use the sales proceeds, along with cash in escrow, to retire the approximately £99.5 million
of outstanding mortgage debt, which is secured by the two hotels. MHGs 50% portion of the net
proceeds, after the repayment of debt and closing costs, is expected to be approximately $70
million.
The Company also sold its investment in Mondrian Los Angeles food and beverage business to an
affiliate of Pebblebrook, the owner of Mondrian Los Angeles, for $2.5 million during the third
quarter of 2011.
As a result of the Hudson refinancing, MHGs total consolidated debt at September 30, 2011,
excluding the Clift lease, was $346.8 million with a weighted average interest rate of 4.3%. At
September 30, 2011, MHG had $12.8 million of cash and cash equivalents and $80 million available
under the revolving credit facility, after $10.0 million of borrowings and $10.0 million of letters
of credit against the facility. As of September 30, 2011, total restricted cash was $7.1 million.
MHGs total pro forma liquidity as of September 30, 2011, giving effect to the closing of the sale
of the joint venture that owns the London hotels as if it had closed on September 30, 2011, would
have been approximately $162.8 million.
MHG currently has approximately $170 million of remaining tax net operating loss carry forwards to
offset future income, including gains on future asset sales.
Development Activity
In August, MHG entered into a hotel management and residential licensing agreement for a 310-room
Mondrian-branded hotel, to be the lifestyle hotel destination in the 1,000 acre destination resort
metropolis, Baha Mar Resort, in Nassau, The Bahamas. This hotel is expected to represent the fifth
Mondrian hotel in the expansion of the Companys iconic brand. Upon completion and opening of the
hotel, MHG will operate Mondrian at Baha Mar pursuant to a 20-year management agreement. The hotel
is scheduled to open in late 2014. MHG is required to fund approximately $10 million of key money
just prior to and at opening of the hotel. As of September 30, 2011, the Company has outstanding a
$10 million standby letter of credit related to this obligation.
At its owned hotels, MHG intends to spend approximately $8 to $10 million on projects at Delano,
and $18 to $20 million at Hudson, all of which are expected to have positive EBITDA impacts. At
Delano, MHG plans to upgrade Delanos exclusive bungalows and suites, improve the public areas,
including the pool, restaurant and bar space, and create additional meeting space. This work was
begun in the third quarter of 2011 and will continue into early 2012. At Hudson, the Company
intends to convert a minimum of 23 SRO units into guest rooms at a cost of approximately $130,000
per room, significantly below recent trading prices of hotel rooms in New York City. Additionally,
MHG plans to upgrade the Hudson room product with new furnishings, lighting and technology, and a
complete corridor renovation. The Company anticipates the renovation work will commence during New
Yorks seasonally slow first quarter of 2012 continuing through mid-year.
2011 Outlook
MHGs outlook is based on trends in its markets, although various factors, including uncertainty in
the economy and volatility in travel and weather patterns, could result in changes to this outlook.
MHG expects that the RevPAR increase at System-Wide Comparable Hotels for 2011 compared to 2010
should be 8% to 10%, above our previous range of 7% to 9%. MHG is confident in its ability to
generate strong flow-through to EBITDA, although the Company is not providing further detail on
projected EBITDA at this time, given the transitional nature of this year and multiple moving parts
as it moves toward a brand and management focused business model.
Conference Call
MHG will host a conference call to discuss the third quarter financial results today at 5:00 PM
Eastern time.
The call will be webcast live over the Internet at 5:00 PM Eastern time and can be accessed at
www.morganshotelgroup.com under the About Us, Investor Overview section. Participants should follow
the instructions provided on the website for the download and installation of audio applications
necessary to join the webcast.
The call can also be accessed live over the phone by dialing (888) 802-8577 or (973) 935-8754 for
international callers; the conference ID is 19681217. A replay of the call will be available three
hours after the call and can be accessed by dialing (855) 859-2056 or (404) 537-3406 for
international callers; the conference ID is 19681217. The replay will be available from November 8,
2011 through November 14, 2011.
Definitions
Owned Comparable Hotels includes all wholly-owned hotels operated by MHG except for hotels under
major renovation during the current or the prior year, development projects and discontinued
operations. Owned Comparable Hotels for the three and nine months ended September 30, 2011 and
2010 includes Hudson in New York, Delano in South Beach and Clift in San Francisco.
System-Wide Comparable Hotels includes all hotels operated by MHG except for hotels added or
under major renovation during the current or the prior year, development projects and discontinued
operations. System-Wide Comparable Hotels for the three and nine months ended September 30, 2011
and 2010 excludes the Hard Rock Hotel & Casino in Las Vegas (Hard Rock), which MHG no longer
manages effective March 1, 2011, Mondrian Scottsdale, which effective March 16, 2010 was no longer
owned or managed by MHG, Mondrian SoHo, which opened in February 2011, the San Juan Water and Beach
Club, which was no longer managed by MHG effective July 13, 2011, and Hotel Las Palapas, which is a
non-MHG branded hotels.
Adjusted EBITDA is adjusted earnings before interest, taxes, depreciation and amortization as
further defined below.
About Morgans Hotel Group
Morgans Hotel Group Co. (NASDAQ: MHGC) is widely credited as the creator of the first boutique
hotel and a continuing leader of the hotel industrys boutique sector. Morgans Hotel Group
operates Morgans, Royalton and Hudson in New York, Delano and Shore Club in South Beach, Mondrian
in Los Angeles, South Beach and New York, Clift in San Francisco, Ames in Boston, Sanderson and St
Martins Lane in London, and a hotel in Playa del Carmen, Mexico. Morgans also owns, or has
ownership interests in, several of these hotels. Morgans Hotel Group has other property
transactions in various stages of completion including a Delano in Cabo San Lucas, Mexico, a Delano
in Turkey, a Mondrian in Doha, Qatar, and a Mondrian in Nassau, The Bahamas, and a hotel in New
York to be branded with one of MHGs existing brands. For more information please visit
www.morganshotelgroup.com.
Forward-Looking and Cautionary Statements
This press release may contain certain forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. Such forward-looking statements relate to, among
other things, the operating performance of our investments and financing needs and prediction of
certain future other events. Forward-looking statements are generally identifiable by use of
forward-looking terminology such as may, expect, anticipate, estimate believe, project,
or other similar words or expressions. These forward-looking statements reflect our current views
about future events and are subject to risks, uncertainties, assumptions and changes in
circumstances that may cause our actual results or other future events to differ materially from
those expressed in any forward-looking statement. Important risks and factors that could cause our
actual results to differ materially from those expressed in any forward-looking statements include,
but are not limited to economic, business, competitive market and regulatory conditions such as: a
sustained downturn in economic and market conditions, particularly levels of spending in the
business, travel and leisure industries; continued tightness in the global credit markets; general
volatility of the capital markets and our ability to access the capital markets; our ability to
refinance our current outstanding debt and to repay outstanding debt as such debt matures; our
ability to protect the value of our name, image and brands and our intellectual property; risks
related to natural disasters, such as earthquakes, volcanoes and hurricanes; hostilities, including
future terrorist attacks, or fear of hostilities that affect travel; and other risk factors
discussed in Morgans Annual Report on Form
10-K for the fiscal year ended December 31, 2010, and other documents filed by Morgans with the
Securities and Exchange Commission from time to time. All forward-looking statements in this press
release are made as of the date hereof, based upon information known to management as of the date
hereof, and Morgans assumes no obligations to update or revise any of its forward-looking
statements even if experience or future changes show that indicated results or events will not be
realized.
Income Statements
(In thousands, except per share amounts)
(In thousands, except per share amounts)
Three Months | Nine Months | |||||||||||||||
Ended September 30, | Ended September 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Revenues: |
||||||||||||||||
Rooms |
$ | 26,432 | $ | 35,100 | $ | 90,951 | $ | 99,443 | ||||||||
Food & beverage |
15,575 | 16,017 | 49,216 | 51,062 | ||||||||||||
Other hotel |
1,271 | 2,077 | 5,020 | 6,730 | ||||||||||||
Total hotel revenues |
43,278 | 53,194 | 145,187 | 157,235 | ||||||||||||
Management and other fees |
3,408 | 4,547 | 10,112 | 14,079 | ||||||||||||
Total revenues |
46,686 | 57,741 | 155,299 | 171,314 | ||||||||||||
Operating Costs and Expenses: |
||||||||||||||||
Rooms |
8,263 | 11,061 | 29,122 | 31,377 | ||||||||||||
Food & beverage |
13,664 | 14,426 | 41,901 | 42,526 | ||||||||||||
Other departmental |
870 | 1,322 | 3,117 | 3,834 | ||||||||||||
Hotel selling, general and administrative |
9,951 | 12,275 | 33,301 | 35,523 | ||||||||||||
Property taxes, insurance and other |
4,247 | 3,650 | 12,136 | 12,461 | ||||||||||||
Total hotel operating expenses |
36,995 | 42,734 | 119,577 | 125,721 | ||||||||||||
Corporate expenses: |
||||||||||||||||
Stock based compensation |
1,366 | 2,304 | 7,384 | 8,892 | ||||||||||||
Other |
5,671 | 5,741 | 18,536 | 18,378 | ||||||||||||
Depreciation and amortization |
4,833 | 8,173 | 17,405 | 23,529 | ||||||||||||
Restructuring, development and disposal costs |
2,125 | 1,064 | 10,518 | 2,930 | ||||||||||||
Impairment loss on receivables from unconsolidated joint venture |
| 5,499 | | 5,499 | ||||||||||||
Total operating costs and expenses |
50,990 | 65,515 | 173,420 | 184,949 | ||||||||||||
Operating loss |
(4,304 | ) | (7,774 | ) | (18,121 | ) | (13,635 | ) | ||||||||
Interest expense, net |
8,775 | 8,319 | 27,783 | 33,058 | ||||||||||||
Equity in loss of unconsolidated joint ventures |
12,794 | 1,435 | 23,187 | 9,437 | ||||||||||||
Gain on asset sales |
(1,101 | ) | | (1,721 | ) | | ||||||||||
Other non-operating expense |
616 | 20,299 | 2,885 | 35,491 | ||||||||||||
Pre tax loss |
(25,388 | ) | (37,827 | ) | (70,255 | ) | (91,621 | ) | ||||||||
Income tax expense |
230 | 420 | 523 | 994 | ||||||||||||
Net loss from continuing operations |
(25,618 | ) | (38,247 | ) | (70,778 | ) | (92,615 | ) | ||||||||
(Loss) Income from discontinued operations, net of tax |
| (281 | ) | 485 | 16,474 | |||||||||||
Net loss |
(25,618 | ) | (38,528 | ) | (70,293 | ) | (76,141 | ) | ||||||||
Net loss attributable to noncontrolling interest |
799 | 1,451 | 2,007 | 2,033 | ||||||||||||
Net loss attributable to Morgans Hotel Group Co. |
$ | (24,819 | ) | $ | (37,077 | ) | $ | (68,286 | ) | $ | (74,108 | ) | ||||
Preferred stock dividends and accretion |
(2,285 | ) | (2,164 | ) | (6,701 | ) | (6,357 | ) | ||||||||
Net loss attributable to common stockholders |
$ | (27,104 | ) | $ | (39,241 | ) | $ | (74,987 | ) | $ | (80,465 | ) | ||||
(Loss) income per share: |
||||||||||||||||
Basic and diluted from continuing operations |
$ | (0.89 | ) | $ | (1.29 | ) | $ | (2.41 | ) | $ | (3.18 | ) | ||||
Basic and diluted from discontinued operations |
$ | | $ | (0.01 | ) | $ | 0.02 | $ | 0.54 | |||||||
Basic and diluted attributable to common stockholders |
$ | (0.89 | ) | $ | (1.30 | ) | $ | (2.39 | ) | $ | (2.64 | ) | ||||
Weighted average common shares outstanding basic and diluted |
30,617 | 30,162 | 31,359 | 30,470 |
Selected Hotel Operating Statistics (1)
(In Actual Dollars) | (In Constant Dollars, if different) | (In Actual Dollars) | (In Constant Dollars, if different) | |||||||||||||||||||||||||||||||||||||||||||||
Three Months | Three Months | Nine Months | Nine Months | |||||||||||||||||||||||||||||||||||||||||||||
Ended Sept. 30, | % | Ended Sept. 30, | % | Ended Sept. 30, | % | Ended Sept. 30, | % | |||||||||||||||||||||||||||||||||||||||||
2011 | 2010 | Change | 2011 | 2010 | Change | 2011 | 2010 | Change | 2011 | 2010 | Change | |||||||||||||||||||||||||||||||||||||
Hudson |
||||||||||||||||||||||||||||||||||||||||||||||||
Occupancy |
92.9 | % | 92.0 | % | 1.0 | % | 88.1 | % | 87.8 | % | 0.3 | % | ||||||||||||||||||||||||||||||||||||
ADR |
$ | 221.96 | $ | 215.49 | 3.0 | % | $ | 205.78 | $ | 198.92 | 3.4 | % | ||||||||||||||||||||||||||||||||||||
RevPAR |
$ | 206.20 | $ | 198.25 | 4.0 | % | $ | 181.29 | $ | 174.65 | 3.8 | % | ||||||||||||||||||||||||||||||||||||
Delano |
||||||||||||||||||||||||||||||||||||||||||||||||
Occupancy |
58.9 | % | 55.0 | % | 7.1 | % | 66.8 | % | 60.1 | % | 11.1 | % | ||||||||||||||||||||||||||||||||||||
ADR |
$ | 380.65 | $ | 344.50 | 10.5 | % | $ | 481.43 | $ | 483.26 | -0.4 | % | ||||||||||||||||||||||||||||||||||||
RevPAR |
$ | 224.20 | $ | 189.48 | 18.3 | % | $ | 321.60 | $ | 290.44 | 10.7 | % | ||||||||||||||||||||||||||||||||||||
Clift |
||||||||||||||||||||||||||||||||||||||||||||||||
Occupancy |
89.2 | % | 92.6 | % | -3.7 | % | 80.1 | % | 75.5 | % | 6.1 | % | ||||||||||||||||||||||||||||||||||||
ADR |
$ | 216.41 | $ | 188.18 | 15.0 | % | $ | 216.36 | $ | 190.01 | 13.9 | % | ||||||||||||||||||||||||||||||||||||
RevPAR |
$ | 193.04 | $ | 174.25 | 10.8 | % | $ | 173.30 | $ | 143.46 | 20.8 | % | ||||||||||||||||||||||||||||||||||||
Total Owned Comparable Hotels |
||||||||||||||||||||||||||||||||||||||||||||||||
Occupancy |
87.2 | % | 87.0 | % | 0.2 | % | 83.1 | % | 80.7 | % | 3.0 | % | ||||||||||||||||||||||||||||||||||||
ADR |
$ | 235.30 | $ | 219.08 | 7.4 | % | $ | 239.23 | $ | 226.12 | 5.8 | % | ||||||||||||||||||||||||||||||||||||
RevPAR |
$ | 205.18 | $ | 190.60 | 7.7 | % | $ | 198.80 | $ | 182.48 | 8.9 | % | ||||||||||||||||||||||||||||||||||||
St. Martins Lane (2) |
||||||||||||||||||||||||||||||||||||||||||||||||
Occupancy |
83.3 | % | 77.7 | % | 7.2 | % | 83.3 | % | 77.7 | % | 7.2 | % | 73.9 | % | 75.6 | % | -2.2 | % | 73.9 | % | 75.6 | % | -2.2 | % | ||||||||||||||||||||||||
ADR |
$ | 382.44 | $ | 373.15 | 2.5 | % | $ | 383.18 | $ | 388.72 | -1.4 | % | $ | 384.09 | $ | 348.30 | 10.3 | % | $ | 384.09 | $ | 366.49 | 4.8 | % | ||||||||||||||||||||||||
RevPAR |
$ | 318.57 | $ | 289.94 | 9.9 | % | $ | 319.19 | $ | 302.04 | 5.7 | % | $ | 283.84 | $ | 263.31 | 7.8 | % | $ | 283.84 | $ | 277.07 | 2.4 | % | ||||||||||||||||||||||||
Sanderson (2) |
||||||||||||||||||||||||||||||||||||||||||||||||
Occupancy |
76.9 | % | 81.9 | % | -6.1 | % | 76.9 | % | 81.9 | % | -6.1 | % | 74.5 | % | 75.9 | % | -1.8 | % | 74.5 | % | 75.9 | % | -1.8 | % | ||||||||||||||||||||||||
ADR |
$ | 433.81 | $ | 438.94 | -1.2 | % | $ | 434.65 | $ | 457.27 | -4.9 | % | $ | 437.41 | $ | 403.21 | 8.5 | % | $ | 437.41 | $ | 424.27 | 3.1 | % | ||||||||||||||||||||||||
RevPAR |
$ | 333.60 | $ | 359.49 | -7.2 | % | $ | 334.25 | $ | 374.50 | -10.7 | % | $ | 325.87 | $ | 306.04 | 6.5 | % | $ | 325.87 | $ | 322.02 | 1.2 | % | ||||||||||||||||||||||||
Shore Club |
||||||||||||||||||||||||||||||||||||||||||||||||
Occupancy |
56.6 | % | 44.6 | % | 26.9 | % | 62.0 | % | 55.2 | % | 12.3 | % | ||||||||||||||||||||||||||||||||||||
ADR |
$ | 225.43 | $ | 209.44 | 7.6 | % | $ | 287.42 | $ | 286.64 | 0.3 | % | ||||||||||||||||||||||||||||||||||||
RevPAR |
$ | 127.59 | $ | 93.41 | 36.6 | % | $ | 178.20 | $ | 158.23 | 12.6 | % | ||||||||||||||||||||||||||||||||||||
Mondrian South Beach |
||||||||||||||||||||||||||||||||||||||||||||||||
Occupancy |
62.8 | % | 56.5 | % | 11.2 | % | 65.8 | % | 57.1 | % | 15.2 | % | ||||||||||||||||||||||||||||||||||||
ADR |
$ | 189.37 | $ | 165.32 | 14.5 | % | $ | 244.90 | $ | 231.25 | 5.9 | % | ||||||||||||||||||||||||||||||||||||
RevPAR |
$ | 118.92 | $ | 93.41 | 27.3 | % | $ | 161.14 | $ | 132.04 | 22.0 | % | ||||||||||||||||||||||||||||||||||||
Ames |
||||||||||||||||||||||||||||||||||||||||||||||||
Occupancy |
80.3 | % | 80.7 | % | -0.5 | % | 73.6 | % | 66.9 | % | 10.0 | % | ||||||||||||||||||||||||||||||||||||
ADR |
$ | 244.28 | $ | 227.37 | 7.4 | % | $ | 221.75 | $ | 212.94 | 4.1 | % | ||||||||||||||||||||||||||||||||||||
RevPAR |
$ | 196.16 | $ | 183.49 | 6.9 | % | $ | 163.21 | $ | 142.46 | 14.6 | % | ||||||||||||||||||||||||||||||||||||
Morgans (3) |
||||||||||||||||||||||||||||||||||||||||||||||||
Occupancy |
85.7 | % | 88.8 | % | -3.5 | % | 85.8 | % | 90.0 | % | -4.7 | % | ||||||||||||||||||||||||||||||||||||
ADR |
$ | 276.54 | $ | 259.10 | 6.7 | % | $ | 263.38 | $ | 242.29 | 8.7 | % | ||||||||||||||||||||||||||||||||||||
RevPAR |
$ | 236.99 | $ | 230.08 | 3.0 | % | $ | 225.98 | $ | 218.06 | 3.6 | % | ||||||||||||||||||||||||||||||||||||
Royalton (3) |
||||||||||||||||||||||||||||||||||||||||||||||||
Occupancy |
86.7 | % | 85.9 | % | 0.9 | % | 86.3 | % | 88.6 | % | -2.6 | % | ||||||||||||||||||||||||||||||||||||
ADR |
$ | 290.18 | $ | 288.16 | 0.7 | % | $ | 282.73 | $ | 269.24 | 5.0 | % | ||||||||||||||||||||||||||||||||||||
RevPAR |
$ | 251.59 | $ | 247.53 | 1.6 | % | $ | 244.00 | $ | 238.55 | 2.3 | % | ||||||||||||||||||||||||||||||||||||
Mondrian LA (3) |
||||||||||||||||||||||||||||||||||||||||||||||||
Occupancy |
80.8 | % | 78.5 | % | 2.9 | % | 79.1 | % | 71.9 | % | 10.0 | % | ||||||||||||||||||||||||||||||||||||
ADR |
$ | 297.43 | $ | 254.23 | 17.0 | % | $ | 280.74 | $ | 260.66 | 7.7 | % | ||||||||||||||||||||||||||||||||||||
RevPAR |
$ | 240.32 | $ | 199.57 | 20.4 | % | $ | 222.07 | $ | 187.41 | 18.5 | % | ||||||||||||||||||||||||||||||||||||
System-wide Comparable Hotels |
||||||||||||||||||||||||||||||||||||||||||||||||
Occupancy |
80.2 | % | 78.0 | % | 2.8 | % | 80.2 | % | 78.0 | % | 2.8 | % | 77.8 | % | 74.8 | % | 4.0 | % | 77.8 | % | 74.8 | % | 4.0 | % | ||||||||||||||||||||||||
ADR |
$ | 261.83 | $ | 246.41 | 6.3 | % | $ | 261.93 | $ | 248.45 | 5.4 | % | $ | 269.20 | $ | 254.47 | 5.8 | % | $ | 269.20 | $ | 256.81 | 4.8 | % | ||||||||||||||||||||||||
RevPAR |
$ | 209.99 | $ | 192.20 | 9.3 | % | $ | 210.07 | $ | 193.79 | 8.4 | % | $ | 209.44 | $ | 190.34 | 10.0 | % | $ | 209.44 | $ | 192.09 | 9.0 | % | ||||||||||||||||||||||||
Mondrian SoHo (4) |
||||||||||||||||||||||||||||||||||||||||||||||||
Occupancy |
79.5 | % | | n/m | 78.2 | % | | n/m | ||||||||||||||||||||||||||||||||||||||||
ADR |
$ | 298.95 | $ | | n/m | $ | 291.25 | $ | | n/m | ||||||||||||||||||||||||||||||||||||||
RevPAR |
$ | 237.67 | $ | | n/m | $ | 227.76 | $ | | n/m | ||||||||||||||||||||||||||||||||||||||
Hotel Las Palapas (5) |
||||||||||||||||||||||||||||||||||||||||||||||||
Occupancy |
45.0 | % | 47.2 | % | -4.7 | % | 45.0 | % | 47.2 | % | -4.7 | % | 63.7 | % | 57.6 | % | 10.6 | % | 63.7 | % | 57.6 | % | 10.6 | % | ||||||||||||||||||||||||
ADR |
$ | 77.33 | $ | 115.91 | -33.3 | % | $ | 78.94 | $ | 123.47 | -36.1 | % | $ | 84.06 | $ | 139.07 | -39.6 | % | $ | 84.06 | $ | 147.11 | -42.9 | % | ||||||||||||||||||||||||
RevPAR |
$ | 34.80 | $ | 54.71 | -36.4 | % | $ | 35.52 | $ | 58.28 | -39.0 | % | $ | 53.55 | $ | 80.10 | -33.2 | % | $ | 53.55 | $ | 84.74 | -36.8 | % | ||||||||||||||||||||||||
Hard Rock (6) |
||||||||||||||||||||||||||||||||||||||||||||||||
Occupancy |
| 81.3 | % | -100.0 | % | 80.7 | % | 80.2 | % | 0.6 | % | |||||||||||||||||||||||||||||||||||||
ADR |
$ | | $ | 126.02 | -100.0 | % | $ | 128.31 | $ | 128.81 | -0.4 | % | ||||||||||||||||||||||||||||||||||||
RevPAR |
$ | | $ | 102.45 | -100.0 | % | $ | 103.55 | $ | 103.31 | 0.2 | % |
(1) | Not included in the above table are discontinued operations and San Juan Water and Beach
Club, which the Company ceased managing effective July 13, 2011. |
|
(2) | In October 2011, MHG and Walton Street, each 50/50 joint venture partners, entered into a
definitive agreement to sell the Sanderson and St Martins Lane hotels. The transaction is
expected to close in Q4 2011. |
|
(3) | MHG sold these hotels in May 2011 and continues to manage the hotels pursuant to long-term
management agreements. |
|
(4) | MHG began managing this hotel when it opened in February 2011. Statistics are for the period
MHG operated the hotel. |
|
(5) | This hotel is not Morgans Hotel Group branded hotel and MHG believes that the hotel operating
data for this hotel does not provide a meaningful depiction of the performance of its branded
hotels. |
|
(6) | MHG ceased managing this hotel on March 1, 2011. Statistics for the nine months ended
September 30, 2011 are for the period MHG managed the hotel. In addition, as customary in
the gaming industry, average occupancy and average daily rate for the Hard Rock are presented
including rooms provided on a complimentary basis which is not the practice in the lodging
industry. |
Non-GAAP Financial Measures
EBITDA and Adjusted EBITDA
We believe that earnings before interest, income taxes, depreciation and amortization (EBITDA) is a
useful financial metric to assess our operating performance before the impact of investing and
financing transactions and income taxes. It also facilitates comparison between us and our
competitors. Given the significant investments that we have made in the past in property and
equipment, depreciation and amortization expense comprises a meaningful portion of our cost
structure. We believe that EBITDA will provide investors with a useful tool for assessing the
comparability between periods because it eliminates depreciation and amortization expense
attributable to capital expenditures.
The Companys management has historically used adjusted EBITDA (Adjusted EBITDA) when evaluating
the operating performance for the entire Company as well as for individual properties or groups of
properties because we believe the Companys core business model is that of an owner and operator of
hotels, and the inclusion or exclusion of certain items is necessary to provide the most accurate
measure of on-going core operating results and to evaluate comparative results period over period.
As such, Adjusted EBITDA excludes other non-operating expenses (income) that do not relate to the
on-going performance of our assets and excludes the operating performance of assets in which we do
not have a direct or indirect fee simple ownership interest. We exclude the following items from
EBITDA to arrive at Adjusted EBITDA:
| Other non-operating expenses (income), such as executive terminations not related to
restructuring initiatives, costs of financings, litigation and settlement costs and other
items such as proceeds from the sale of condominium units and related costs that relate to
the financing and investing activities of our assets and not to the on-going operating
performance of our assets, both consolidated and unconsolidated, changes in fair market
value of the warrants issued to investors in the Company, and non-cash impairment charges
recognized by unconsolidated joint ventures in which the Company is an equity investee; |
| Restructuring, development and disposal costs: these charges primarily relate to losses
on asset disposals as part of major renovation projects, the write-off of abandoned
development projects resulting primarily from events generally outside managements control
such as the tightening of credit markets, and severance costs related to restructuring
initiatives. We believe that these charges do not relate to the ongoing operating
performance of our assets as measured by Adjusted EBITDA. |
| Impairment loss on development projects and hotels and receivables from unconsolidated
joint ventures: these charges do not relate to the ongoing operating performance of our
assets as measured by Adjusted EBITDA. To the extent that economic conditions do not
continue to improve, we may incur additional non-cash impairment charges related to our
assets under development, wholly-owned assets, or our investments in joint ventures. We
believe these adjustments are necessary to provide the most accurate measure of core
operating results as a means to evaluate comparative results. |
| The EBITDA related to leased hotels to more accurately reflect the operating performance
of assets in which we have a direct or indirect fee simple ownership interest; |
| The EBITDA related to hotels reported as discontinued operations to more accurately
reflect the operating performance of assets in which we expect to have an ongoing direct or
indirect ownership interest; and |
| Stock-based compensation expense, as this is not necessarily an indication of the
operating performance of our assets. |
We also make an adjustment to EBITDA for hotels in which our percentage ownership interest has
changed to facilitate period-over-period comparisons and to more accurately reflect the operating
performance of assets based on our actual ownership. In this respect, our method of calculating
Adjusted EBITDA has changed from prior quarters, and calculations of Adjusted EBITDA will continue
to vary from quarter to quarter to reflect changing ownership interests.
We believe Adjusted EBITDA provides management and our investors with a more accurate financial
metric by which to evaluate our performance as it eliminates the impact of costs incurred related
to investing and financing transactions. Internally, the Companys management utilizes Adjusted
EBITDA to measure the performance of our core on-going hotel operations and is used extensively
during our annual budgeting process. Management also uses Adjusted EBITDA as a measure in
determining the value of acquisitions, expansion opportunities, and dispositions and borrowing
capacity. Adjusted EBITDA is a key metric which management evaluates prior to execution of any
strategic investing or financing opportunity.
The Company has historically reported Adjusted EBITDA to its investors and believes that this
continued inclusion of Adjusted EBITDA provides consistency in its financial reporting and enables
investors to perform more meaningful comparisons of past, present and future operating results and
to evaluate the results of its core on-going operations.
The use of EBITDA and Adjusted EBITDA has certain limitations. Our presentation of EBITDA and
Adjusted EBITDA may be different from the presentation used by other companies and therefore
comparability may be limited. Depreciation expense for various long-term assets, interest expense,
income taxes and other items have been and will be incurred and are not reflected in the
presentation of EBITDA or Adjusted EBITDA. Each of these items should also be considered in the
overall evaluation of our results. Additionally, EBITDA and Adjusted EBITDA do not reflect capital
expenditures and other investing activities and should not be considered as a measure of our
liquidity. We compensate for these limitations by providing the relevant disclosure of our
depreciation, interest and income tax expense, capital expenditures and other items both in our
reconciliations to our financial measures under accounting principles generally accepted in the
United States, or U.S. GAAP, and in our consolidated financial statements, all of which should be
considered when evaluating our performance. The term EBITDA is not defined under U.S. GAAP and
EBITDA is not a measure of net income, operating income, operating performance or liquidity
presented in accordance with U.S. GAAP. In addition, EBITDA is impacted by reorganization of
businesses and other restructuring-related charges. When assessing our operating performance, you
should not consider this data in isolation, or as a substitute for our net income, operating income
or any other operating performance measure that is calculated in accordance with U.S. GAAP. In
addition, our EBITDA may not be comparable to EBITDA or similarly titled measures utilized by other
companies since such other companies may not calculate EBITDA in the same manner as we do.
A reconciliation of net income (loss), the most directly comparable U.S. GAAP measures, to EBITDA
and Adjusted EBITDA for each of the respective periods indicated is as follows:
EBITDA Reconciliation
(In thousands)
(In thousands)
Three Months | Nine Months | |||||||||||||||
Ended September 30, | Ended September 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Net loss attributable to Morgans Hotel Group Co. |
$ | (24,819 | ) | $ | (37,077 | ) | $ | (68,286 | ) | $ | (74,108 | ) | ||||
Interest expense, net |
8,775 | 8,319 | 27,783 | 33,058 | ||||||||||||
Income tax expense |
230 | 420 | 523 | 994 | ||||||||||||
Depreciation and amortization expense |
4,833 | 8,173 | 17,405 | 23,529 | ||||||||||||
Proportionate share of interest expense
from unconsolidated joint ventures |
1,863 | 4,253 | 6,579 | 11,624 | ||||||||||||
Proportionate share of depreciation expense
from unconsolidated joint ventures |
1,599 | 4,320 | 5,177 | 9,931 | ||||||||||||
Proportionate share of depreciation expense
of noncontrolling interests in consolidated joint ventures |
| (87 | ) | (183 | ) | (266 | ) | |||||||||
Net loss attributable to noncontrolling interest |
(799 | ) | (1,215 | ) | (2,210 | ) | (2,433 | ) | ||||||||
Proportionate share of (loss) income from unconsolidated joint
ventures not recorded due to negative investment balances |
(5,103 | ) | (5,736 | ) | 1,904 | (12,139 | ) | |||||||||
EBITDA |
(13,421 | ) | (18,630 | ) | (11,308 | ) | (9,810 | ) | ||||||||
Add: Other non operating expense |
616 | 20,299 | 2,885 | 35,491 | ||||||||||||
Add: Other non operating expense from unconsolidated
joint ventures |
17,070 | 1,783 | 17,827 | 9,290 | ||||||||||||
Add: Restructuring, development and disposal costs |
2,125 | 1,064 | 10,518 | 2,930 | ||||||||||||
Add: Impairment loss |
| 5,499 | | 5,499 | ||||||||||||
Less: EBITDA from Clift, a leased hotel |
(1,772 | ) | (1,233 | ) | (3,901 | ) | (1,211 | ) | ||||||||
Add: Stock based compensation |
1,366 | 2,304 | 7,384 | 8,892 | ||||||||||||
Less: Gain on assets sale |
(1,101 | ) | | (1,721 | ) | | ||||||||||
Less: Loss (income) from hotel ownership changes
and discontinued operations |
| 36 | (485 | ) | (17,379 | ) | ||||||||||
Adjusted EBITDA |
$ | 4,883 | $ | 11,122 | $ | 21,199 | $ | 33,702 | ||||||||
Impact of Asset Sales and Terminated Joint Venture Interests: |
||||||||||||||||
Sold Hotels EBITDA (1) |
$ | (696 | ) | $ | 3,593 | $ | 2,705 | $ | 9,418 | |||||||
Sold Hotels Management Fees Post-Sale (2) |
778 | | 1,193 | | ||||||||||||
Asset to be sold EBITDA (3) |
2,040 | 2,781 | 6,041 | 6,537 | ||||||||||||
Hard Rock Hotel & Casino EBITDA (4) |
| 435 | 300 | 1,612 | ||||||||||||
Hard Rock Hotel & Casino Management Fees (5) |
| 2,549 | 832 | 7,424 | ||||||||||||
Impact to Adjusted EBITDA, After Asset Sales and Hard Rock |
$ | 2,122 | $ | 9,358 | $ | 11,071 | $ | 24,991 | ||||||||
(1) | Reflects the EBITDA of Mondrian Los Angeles, Royalton and Morgans, the three hotels sold
by the Company in May 2011, through their respective dates of sale. This hotel EBITDA is not
reduced by any internal management fees earned prior to the date of sale, as these are
eliminated in consolidation. EBITDA recorded in the period after the hotels were sold
primarily relates to the restaurant operations at Morgans, which are owned by the Company and
were closed for re-concepting in October 2011. An immaterial amount of EBITDA recorded after
the hotels were sold relates to post-closing adjustments. |
|
(2) | Reflects the management fees earned by the Company from the date of sale of each hotel
through the end of the period. |
|
(3) | Reflects the EBITDA of Sanderson and St Martins Lane, the London hotels the Company manages
and owns through a 50/50 joint venture. In October 2011, the joint venture entered into a
definitive agreement to sell these hotels. The amounts reflected are the Companys 50% share
of the hotels EBITDA. |
|
(4) | Reflects the EBITDA of the hotel for the period the Company had a minority interest.
Effective March 1, 2011, the Company no longer had an ownership interest in this hotel. |
|
(5) | Reflects the management fees earned by the Company during the period it operated the hotel.
Effective March 1, 2011, the Company ceased managing this hotel. |
Hotel EBITDA Analysis (1)
(In thousands, except percentages)
(In thousands, except percentages)
Three Months | Nine Months | |||||||||||||||||||||||
Ended September 30, | % | Ended September 30, | % | |||||||||||||||||||||
2011 | 2010 | Change | 2011 | 2010 | Change | |||||||||||||||||||
Hudson (2) |
$ | 4,054 | 4,391 | -8 | % | $ | 8,230 | $ | 10,430 | -21 | % | |||||||||||||
Delano |
1,562 | 1,131 | 38 | % | 10,700 | 9,795 | 9 | % | ||||||||||||||||
Clift |
1,772 | 1,233 | 44 | % | 3,901 | 1,211 | 222 | % | ||||||||||||||||
Owned Comparable Hotels |
7,388 | 6,755 | 9 | % | 22,831 | 21,436 | 7 | % | ||||||||||||||||
Shore Club |
(73 | ) | (44 | ) | 66 | % | 164 | 207 | -21 | % | ||||||||||||||
Mondrian South Beach |
(253 | ) | (404 | ) | -37 | % | 377 | (67 | ) | n/m | ||||||||||||||
Ames |
73 | 151 | -52 | % | 103 | 11 | 836 | % | ||||||||||||||||
Joint Venture Comparable Hotels |
(253 | ) | (297 | ) | -15 | % | 644 | 151 | 326 | % | ||||||||||||||
Owned and Joint Venture Comparable Hotels |
7,135 | 6,458 | 10 | % | 23,475 | 21,587 | 9 | % | ||||||||||||||||
Morgans (3) |
(683 | ) | $ | 242 | n/m | (837 | ) | 637 | n/m | |||||||||||||||
Royalton (3) |
(33 | ) | 302 | n/m | 221 | 625 | -65 | % | ||||||||||||||||
Mondrian Los Angeles (3) |
20 | 3,049 | -99 | % | 3,321 | 8,156 | -59 | % | ||||||||||||||||
St Martins Lane (4) |
1,284 | 1,506 | -15 | % | 3,623 | 3,899 | -7 | % | ||||||||||||||||
Sanderson (4) |
756 | 1,275 | -41 | % | 2,418 | 2,638 | -8 | % | ||||||||||||||||
Hotels to be Sold and Sold Hotels |
1,344 | 6,374 | -79 | % | 8,746 | 15,955 | -45 | % | ||||||||||||||||
Total System-Wide Comparable Hotels |
8,479 | 12,832 | -34 | % | 32,221 | 37,542 | -14 | % | ||||||||||||||||
Hard Rock Joint Venture (5) |
| 435 | -100 | % | 300 | 1,612 | -81 | % | ||||||||||||||||
Mondrian SoHo Joint Venture (6) |
393 | | n/m | 860 | | n/m | ||||||||||||||||||
. | ||||||||||||||||||||||||
Total Hotels |
$ | 8,872 | $ | 13,267 | -33 | % | $ | 33,381 | $ | 39,154 | -15 | % | ||||||||||||
(1) | For joint venture hotels, represents MHGs share of the respective hotels EBITDA, after
management fees. |
|
(2) | The Company estimates that cancellations and direct costs due to Hurricane Irene reduced EBITDA at the hotel during
August 2011 by approximately $0.4 million. |
|
(3) | In May 2011, MHG sold these three hotels. Information is for the period MHG owned the
hotels, and is not reduced by any internal management fees earned prior to the date of sale,
as these are eliminated in consolidation. EBITDA for the periods
after the hotels were sold primarily represents food and beverage
EBITDA related to those F&B venues at the hotels in which MHG
had ownership interest during the period and post-closing adjustments. |
|
(4) | In October 2011, MHG and Walton Street, each 50/50 joint venture partners, entered into a
definitive agreement to sell the Sanderson and St Martins Lane hotels. The transaction is
expected to close in Q4 2011. Amounts represent MHGs share of the respective hotels EBITDA,
after management fees. |
|
(5) | MHG had a minority ownership interest in this hotel until March 1, 2011. Information for the
nine months ended September 30, 2011 is for the period MHG had an ownership interest in the
hotel. |
|
(6) | This hotel opened in February 2011. Information is for the period the hotel was open. |
Owned Comparable Hotel Room Revenue Analysis
(In thousands, except percentages)
(In thousands, except percentages)
Three Months | Nine Months | |||||||||||||||||||||||
Ended September 30, | % | Ended September 30, | % | |||||||||||||||||||||
2011 | 2010 | Change | 2011 | 2010 | Change | |||||||||||||||||||
Hudson |
$ | 15,827 | $ | 15,161 | 4 | % | $ | 41,294 | $ | 39,636 | 4 | % | ||||||||||||
Delano |
4,001 | 3,384 | 18 | % | 17,040 | 15,388 | 11 | % | ||||||||||||||||
Clift |
6,603 | 5,965 | 11 | % | 17,601 | 14,563 | 21 | % | ||||||||||||||||
Total Owned Comparable Hotels (1) |
$ | 26,431 | $ | 24,510 | 8 | % | $ | 75,935 | $ | 69,587 | 9 | % | ||||||||||||
Owned Comparable Hotel Revenue Analysis
(In thousands, except percentages)
(In thousands, except percentages)
Three Months | Nine Months | |||||||||||||||||||||||
Ended September 30, | % | Ended September 30, | % | |||||||||||||||||||||
2011 | 2010 | Change | 2011 | 2010 | Change | |||||||||||||||||||
Hudson |
$ | 19,500 | 19,337 | 1 | % | $ | 51,781 | 50,500 | 3 | % | ||||||||||||||
Delano |
8,313 | 7,593 | 9 | % | 34,305 | 32,373 | 6 | % | ||||||||||||||||
Clift |
9,412 | 8,540 | 10 | % | 26,593 | 23,153 | 15 | % | ||||||||||||||||
Total Owned Comparable Hotels (1) |
$ | 37,225 | $ | 35,470 | 5 | % | $ | 112,679 | $ | 106,026 | 6 | % | ||||||||||||
(1) | Does not include revenue from the three hotels sold in May 2011, Royalton, Morgans or
Mondrian Los Angeles, for the period owned during the nine months ended September 30, 2011, as
these hotels are no longer Owned Comparable Hotels. |
Adjusted EBITDA and Debt Analysis
(In thousands)
(In thousands)
Adjusted | ||||||||
EBITDA | ||||||||
Twelve Months | ||||||||
Ended | Outstanding Debt at | |||||||
Consolidated Operations | Sept. 30, 2011 | Sept. 30, 2011 | ||||||
Hudson, Mortgage Debt and Capital Lease |
$ | 15,232 | $ | 121,107 | ||||
Delano, Revolving Line of Credit |
14,074 | 10,000 | ||||||
Management Fees |
14,371 | |||||||
Corporate Expenses |
(23,809 | ) | ||||||
Other Debt (1) |
| 215,675 | ||||||
Total |
$ | 19,868 | 346,782 | |||||
Less: Cash |
(12,829 | ) | ||||||
Net Debt |
$ | 333,953 | ||||||
(1) | Includes outstanding debt on convertible notes and trust preferred securities and excludes
the lease obligation at Clift. |
Proportionate | ||||||||||||
Share of | ||||||||||||
Adjusted EBITDA | Proportionate | |||||||||||
Twelve Months | Share of | |||||||||||
Joint Venture Comparable | Ownership | Ended | Debt | |||||||||
Hotels (1) | Percentage | Sept. 30, 2011 | Sept. 30, 2011 | |||||||||
Sanderson and St Martins Lane |
50 | % | $ | 9,343 | $ | 77,415 | ||||||
Shore Club |
7 | % | 175 | 8,364 | ||||||||
Mondrian South Beach |
50 | % | 536 | 43,762 | ||||||||
Ames |
31 | % | 206 | 14,173 |
(1) | Includes information only for System-Wide Comparable Hotels that are owned by joint ventures.
Mondrian SoHo, which opened in February 2011, is not included in System-Wide Comparable
Hotels. At September 30, 2011, MHGs proportionate share of third party debt on Mondrian SoHo
is $39.2 million. |
Balance Sheets
(In thousands)
(In thousands)
September 30, | December 31, | |||||||
2011 | 2010 | |||||||
ASSETS: |
||||||||
Property and equipment, net |
$ | 283,811 | $ | 291,078 | ||||
Goodwill |
54,057 | 53,691 | ||||||
Investments in and advances to unconsolidated joint ventures |
5,063 | 20,450 | ||||||
Assets held for sale, net |
| 194,964 | ||||||
Investment in property held for non-sale disposition, net |
| 9,775 | ||||||
Cash and cash equivalents |
12,829 | 5,250 | ||||||
Restricted cash |
7,148 | 28,783 | ||||||
Accounts receivable, net |
8,250 | 6,018 | ||||||
Related party receivables |
5,186 | 3,830 | ||||||
Prepaid expenses and other assets |
7,202 | 7,007 | ||||||
Deferred tax asset, net |
81,421 | 80,144 | ||||||
Other, net |
15,834 | 13,786 | ||||||
Total assets |
$ | 480,801 | $ | 714,776 | ||||
LIABILITIES and STOCKHOLDERS DEFICIT: |
||||||||
Debt and capital lease obligations, net |
$ | 433,267 | $ | 558,779 | ||||
Mortgage debt of property held for non-sale disposition |
| 10,500 | ||||||
Accounts payable and accrued liabilities |
32,353 | 23,604 | ||||||
Debt obligations, accounts payable and accrued liabilities of assets held for sale |
| 107,161 | ||||||
Accounts payable and accrued liabilities of property held for non-sale disposition |
| 1,162 | ||||||
Distributions and losses in excess of investment in unconsolidated joint ventures |
272 | 1,509 | ||||||
Deferred gain on asset sales |
77,792 | | ||||||
Other liabilities |
14,291 | 13,866 | ||||||
Total liabilities |
557,975 | 716,581 | ||||||
Total Morgans Hotel Group Co. stockholders deficit |
(85,545 | ) | (12,721 | ) | ||||
Noncontrolling interest |
8,371 | 10,916 | ||||||
Total stockholders deficit |
(77,174 | ) | (1,805 | ) | ||||
Total liabilities and stockholders deficit |
$ | 480,801 | $ | 714,776 | ||||