Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - STRATEGIC HOTELS & RESORTS, INC | d286792d8k.htm |
 Exhibit 99.1
Investor Presentation
January 2012
* * * * * * * * * * * * * * * * * * |
 2
I.
Company Overview
II.
Industry Update
III.
Operating Trends
IV.
Financial Overview
Agenda |
 3
World-class luxury hotels supported by unique real estate value
Investment acumen and discipline
Industry leading asset management capabilities
Brand leadership experience
Value creating hotel management contract renegotiation expertise
Depth and breadth of long-term relationships throughout the hotel
industry BEE Core Competencies
Fairmont Chicago
Lobby and ENO Wine Bar
Four Seasons Punta Mita
Coral Suite
Hotel del Coronado
Beach Village
Highest quality hotel portfolio in the public markets |
 4
17 hotels and resorts with 7,762 rooms
Top-Tier Market Exposure
Assets
located
in
primary
gateway
cities
and
high
barrier
to
entry
markets |
 5
Unique and Irreplaceable Hotel Portfolio
Fairmont Chicago
Marriott Grosvenor Square
Four Seasons Jackson Hole
Ritz-Carlton Laguna Niguel
Ritz-Carlton Half Moon Bay
Four Seasons Washington, D.C.
Four Seasons Silicon Valley
InterContinental Chicago |
 6
Market share growth and revenue enhancement through market research based
programs
Exceptional asset management supported by internally developed operating
systems Aggressive and early cost cutting initiatives implemented in advance
of the 2008 / 2009 recession
Proactively maintaining fixed cost reduction at hotels during recovery phase
Rigorous oversight of brand managers to ensure alignment of interests
Evaluation and implementation of value add ROI projects; constant pipeline
Industry Leading Asset Management Capabilities |
 7
Notable 2008
capital
projects
Notable 2009
capital
projects
InterContinental Miami –
Guestroom renovation
InterContinental Chicago –
Michael Jordan’s Steak House
Four Seasons Washington, D.C –
Retail outlet renovation
Marriott Lincolnshire –
Lobby renovation
Westin St. Francis –
Michael Mina Steakhouse conversion
Four Seasons Washington, D.C. –
Lobby renovation, 11-room
expansion, new restaurant, 63-room and suite renovation
Westin St. Francis –
Clock Bar
Fairmont Chicago –
ENO wine tasting room, lobby renovation,
guestroom renovation, new spa and fitness center
Four Seasons Punta Mita –
New lobby bar
Ritz-Carlton Half Moon Bay –
ENO wine tasting room,
restaurant and lounge renovation, suite renovation
Portfolio Well-Positioned To Enhance Cash Flow Growth
Notable 2010
capital
projects
Notable 2011
capital
projects
Fairmont Chicago Lobby
Four Seasons Washington, D.C.
Lobby
Westin St. Francis Michael Mina
Bourbon Steak
InterContinental Miami Guestroom |
 8
Four Seasons D.C.
ROI Capital Project Examples
InterContinental Chicago
Hotel del Coronado
(1)
(1)
(1)
Represents 100% ownership
(1)
(1)
Description:
Bourbon Steakhouse
ENO Wine Room &
Starbucks
North Beach
Development
Year of Project:
2008 - 2009
2006 - 2007
2007
Investment ($mm):
$8.4
$2.9
$68.4
2010 EBITDA Yield (%):
15%
28%
$113 million in unit sales
~$45 million in unit sales profit
$6.6 million in 2010 EBITDA |
 9
I.
Company Overview
II.
Industry Update
Agenda |
 10
Lodging demand historically correlates with GDP (~80%) but potential exists for
near-term disconnect, particularly at the high-end
To date, little to no indication of a decline in group bookings or an increase in
group cancellations Supply growth remains historically low and development
pipeline indicates muted supply going forward Lodging Outlook
Demand growth exceeds supply growth by 450 bps which should result in
significant ADR growth as recovery continues; lower correlation to GDP
|
 11
Source: Smith Travel Research
Note: Data represents trends within the United States
Luxury supply growth was lower leading into this downturn than past downturns
Projects in planning or under construction have decreased significantly
No new competitive luxury or upper-upscale supply projected in BEE
markets 1-2 years estimated time to permit; 3 years estimated time to
build a luxury hotel New hotel construction economic proposition doubtful
with replacement cost estimated at over $700,000 per key
Quarterly luxury supply YoY % change
(4%)
(2%)
0%
2%
4%
6%
8%
10%
12%
14%
YoY % supply growth
1988 –
Q2 2011
Average: 4.1%
Favorable Supply Outlook
Zero supply growth environment and no new
supply growth likely until after 2015
Supply Growth in
BEE Markets = 0.0% |
 12
Source: Smith Travel Research and PWC
Luxury
hotels
have
experienced
prolonged
RevPAR
growth
following
past
industry
downturns
–
1992
–
2000:
9
consecutive
years
of
annual
luxury
RevPAR
growth
totaling
109%
or
8.5%
annually
–
2002
–
2007:
5
consecutive
years
of
annual
luxury
RevPAR
growth
totaling
48%
or
8.2%
annually
Overall luxury room nights sold is at an all-time high; 33% higher than
2007 Luxury Hotels Outperform in a Recovery
Luxury room night demand currently at all-
time high
Luxury outperformed Total U.S. 2.0% -
4.0% in previous two downturns
Source: Smith Travel Research |
 13
Note: All metrics represent full-year 2010 results
BEE portfolio reflects Same Store North American portfolio as of 12/31/2010.
Source: Public filings
BEE Positioning Compared to Peers
BEE delivers industry leading results |
 14
I.
Company Overview
II.
Industry Update
III.
Operating Trends
Agenda |
 15
Group Booking Outlook
Year-Over-Year Group Pace
*2012 production in the year assumes the same production as in 2011
Group pace remains the most reliable forward looking indicator
Booking window has shortened forcing more reliance on room nights booked ITYFTY
(“in-the-year-for-the-year”)
Group
room
nights
on
the
books
for
2012
are
up
1.5%
compared
to
same
time
last
year;
ADR
up
5%
compared
to
2011
rate |
 16
Embedded Portfolio Growth
Operating performance improving; still significantly below peak
Note: Same store North America portfolio, excludes: Hotel del Coronado, Fairmont
Scottsdale Princess, Four Seasons Jackson Hole, Four Seasons Silicon
Valley $120
$160
$200
$240
$280
60.0%
64.0%
68.0%
72.0%
76.0%
80.0%
2007
2008
2009
2010
2011F
ADR / RevPAR
Occupancy
Occupancy
ADR
RevPAR |
 17
(EBITDA in millions)
(a)
Excludes Fairmont Scottsdale Princess, Four Seasons Jackson Hole, Four Seasons
Silicon Valley, and Hotel del Coronado Year-To-Date Results
YTD 9/30/10
YTD 9/30/11
Operations
(Same Store U.S. Portfolio)
(a)
ADR
$211
7.2%
$227
RevPAR
$146
13.5%
$166
Total RevPAR
$272
11.7%
$304
EBITDA Margins
17.9%
330 bps
21.2%
Corporate Results
Comparable EBITDA
$97.6
17.7%
$114.8
Comparable FFO / share
$0.02
350.0%
$0.09 |
 18
I.
Company Overview
II.
Industry Update
III.
Operating Trends
IV.
Financial Overview
Agenda |
 19
2011 Guidance
(EBITDA in millions)
(b)
2010 results exclude $4.9 mm of real estate tax refunds and no adjustments for
cancellation fees (c)
2010 excludes $12.6 mm of VCP expense; 2011 VCP expense excluded
(a)
Portfolio excludes Fairmont Scottsdale Princess, Four Seasons Jackson Hole, Four
Seasons Silicon Valley, and Hotel del Coronado 2010
2011 Guidance
Operations
(Same Store North America Portfolio)
(a)
RevPAR
$153
9%-10%
$167-$168
Total RevPAR
$287
8%-9%
$309-312
EBITDA Margins
(b)
19.0%
200 - 300bps
21%-22%
Corporate Results
(c)
EBITDA
$132
14%-18%
$150-$156
FFO / share
$0.05
100%-160%
$0.10-$0.13 |
 20
Raised $550 million in equity:
$335 mm secondary offering (May 2010)
$145
mm
Woodbridge
transaction
acquiring
two
Four
Seasons
hotels
plus
PIPE
(February
2011)
$70 mm equity placement to GIC for share in InterContinental Chicago (June
2011) Asset sales:
Sold InterContinental Prague for €110.6mm (December 2010)
Sold leasehold position at Marriott Paris Champs-Elysees for approximately $60
million (April 2011) Sold stake in BuyEfficient for $9mm (January
2011) Debt Repayments:
Tendered
and
fully
retired
$180mm
unsecured
convertible
recourse
notes
(May
2010)
Hotel del Coronado complex restructuring (February 2011):
Negotiated new joint-venture with Blackstone and KSL
Closed new CMBS mortgage financing totaling $425mm
Fairmont Scottsdale Princess complex restructuring (June 2011):
Negotiated new joint venture structure with Walton Street Capital
Negotiated amendment and extension to CMBS debt for four years at below market
terms New Line of Credit (June 2011):
Reduced lenders in bank syndicate from 21 banks to 10 banks
Achieved three year term with one year extension
Debt refinancings:
Six property loans refinanced totaling nearly $800 million
Preferred Equity Tender (December 2011):
Successfully tendered for approximately 22% of outstanding preferred equity at a
15% discount to par plus accrued preferred dividends
Accomplishments Since January 1*, 2010
ST |
 21
$52.2
$130.0
$317.8
$195.0
$145.0
$66.5
$145.8
$114.0
$0.0
$100.0
$200.0
$300.0
$400.0
$500.0
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
Bank / Life Co.
CMBS
Fairmont Scottsdale
Hotel del Coronado
European
Corporate
$300.0
Capacity
$275.8
$281.7
$173.5
$90.0
$194.8
$180.0
$282.8
$148.9
$124.9
$358.0
$0.0
$200.0
$400.0
$600.0
$800.0
$1,000.0
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
Bank / Life Co.
CMBS
Fairmont Scottsdale
Hotel del Coronado
European
Corporate
$834.5
$875.2
($ in millions)
Note: Assumes full extension periods for all loans.
(1)
Statistics reflect successful completion of preferred equity tender
BEE’s balance sheet is structured for growth, yet prepared for volatility
Strong Recapitalized Balance Sheet
January 1, 2010
September 30, 2011
Key Stats
Net Debt/EBITDA
14.3x
Net Debt+Pref /EBITDA
17.4x
Net Debt/TEV
76.9%
Avg. Maturity (yrs)
3.4
Unencumbered assets
0
Corporate liquidity (MM)
$105.0
Mix of Debt
Bank Debt
17.8%
Life Insurance Co.
25.6%
CMBS
56.6%
Key Stats
(1)
Net Debt/EBITDA
7.6x
Net Debt+Pref /EBITDA
9.5x
Net Debt/TEV
51.2%
Avg. Maturity (yrs)
5.2
Unencumbered assets
2
Corporate liquidity (MM)
$260.0
Mix of Debt
Bank Debt
38.0%
Life Insurance Co.
31.5%
CMBS
30.5% |
 22
On December 20th, 2011 the Company announced the
successful repurchase of 3,247,507 preferred shares at a 15% discount to
par + accrued dividends Successful tender provides the following
benefits: One-time savings of $20.2 million in accrued preferred
dividends Recurring savings of $6.7 million in annual preferred
dividends Reduction
in
outstanding
preferred
equity
from
$370.2
million
to
$289.1
million
Accrued
and
unpaid
dividends
through
the
quarter
ending
December
31,
2011
have
been declared and set apart for payment on our books
Successful Preferred Equity Tender
Series of
Preferred
Shares
NYSE
Ticker
Symbol
Offer Price
Per Share
Number of
Shares
Outstanding
Pre-tender
Shares
Tendered
& Accepted
Number of
Shares
Outstanding
Post-tender
Series C Shares
BEEPRC
$26.50
5,750,000
1,922,273
3,827,727
Series B Shares
BEEPRB
$26.50
4,600,000
984,625
3,615,375
Series A Shares
BEEPRA
$26.70
4,488,750
340,609
4,148,141
Total
14,838,750
3,247,507
11,591,243 |
 23
Except
for
historical
information,
the
matters
discussed
in
this
press
release
are
forward-looking
statements
subject
to
certain risks and uncertainties. Actual results could differ materially from the
Company's projections and forward-looking statements
are
not
guarantees
of
future
performance.
These
forward
looking
statements
are
identified
by
looking
their
use
of terms and phrases such as “anticipate,”
“believe,”
“could,”
“estimate,”
“expect,”
“intend,”
“may,”
“plan,”
“predict,”
“project,”
“should,”
“will,”
“continue”
and other similar terms and phrases, including references to assumptions and
forecasts of future results.
Factors that may contribute to these differences include, but are not limited to
the following: ability
to
obtain,
refinance
or
restructure
debt
or
comply
with
covenants
contained
in
our
debt
facilities;
volatility
in
equity
or
debt markets; availability of capital; rising interest rates and
operating costs; rising insurance premiums; cash available for
capital expenditures; competition; demand for hotel rooms in our
current and proposed market areas; economic conditions
generally and in the real estate market specifically, including deterioration of
economic conditions and the extent of its effect on business and leisure
travel and the lodging industry; ability to dispose of existing properties in a manner
consistent with our disposition strategy; delays in construction
and development; the failure of closing conditions to be
satisfied; risks related to natural disasters; the effect of threats of terrorism
and increased security precautions on travel patterns and hotel bookings;
the outbreak of hostilities and international political instability; legislative or regulatory
changes, including changes to laws governing the taxation of REITs; and changes in
generally accepted accounting principles, policies and guidelines
applicable to REITs. Certain of these risks and uncertainties are described in greater
detail in our filings with the Securities and Exchange Commission. Although we
believe our current expectations to be based upon reasonable assumptions,
we can give no assurance that our expectations will be attained or that
actual results will not differ materially. We undertake no obligation to
update any forward-looking statement to conform the statement to
actual results or changes in our expectations.
Disclaimer |
 24
Non-GAAP to GAAP Reconciliations
Reconciliation of Net Debt + Preferred Equity / EBITDA
($ in 000s)
YE 2009
(a)
3Q 2011
(b)(c)
Preferred equity capitalization
$370,236
$289,102
Consolidated debt
1,658,745
1,000,706
Pro rata share of unconsolidated debt
282,825
212,275
Pro rata share of consolidated debt
(107,065)
(45,548)
Cash and cash equivalents
(116,310)
(10,000)
Net Debt + Preferreds
$2,088,431
$1,446,535
Comparable EBITDA
$119,953
$153,000
Net Debt + Preferreds / EBITDA
17.4x
9.5x
(a) All figures taken from year-end 2009 financial statements.
(b) Comparable EBITDA reflects mid-point of guidance range as of Q3 2011.
(c) Updated to reflect the successful closing of preferred equity tender
Reconciliation of Net Debt / TEV
($ in 000s)
YE 2009
(a)
3Q 2011
(b)(c)
Consolidated Debt
$1,658,745
$1,000,706
Pro rata share of unconsolidated debt
282,825
212,275
Pro rata share of consolidated debt
(107,065)
(45,548)
Cash and cash equivalents
(116,310)
(10,000)
Net Debt
$1,718,195
$1,157,433
Market Capitalization
$144,966
$812,405
Total Debt
1,834,505
1,167,433
Preferred Equity
370,236
289,102
Cash and cash equivalents
(116,310)
(10,000)
Total Enterprise Value
$2,233,397
$2,258,940
Net Debt / Enterprise Value
76.9%
51.2%
(a) All figures taken from year-end 2009 financial statements.
(b) Comparable EBITDA reflects mid-point of guidance range as of Q3 2011.
(c) Updated to reflect the successful closing of preferred equity tender
Reconciliation of Net Debt / EBITDA
($ in 000s)
YE 2009
(a)
3Q 2011
(b)(c)
Consolidated debt
$1,658,745
$1,000,706
Pro rata share of unconsolidated debt
282,825
212,275
Pro rata share of consolidated debt
(107,065)
(45,548)
Cash and cash equivalents
(116,310)
(10,000)
Net Debt
$1,718,195
$1,157,433
Comparable EBITDA
$119,953
$153,000
Net Debt / EBITDA
14.3x
7.6x
(a) All figures taken from year-end 2009 financial statements.
(b) Comparable EBITDA reflects mid-point of guidance range as of Q3 2011.
(c) Updated to reflect the successful closing of preferred equity tender
|
 25
Non-GAAP to GAAP Reconciliations
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.
September 30,
September 30,
Reconciliation of Net Loss Attributable to SHR Common Shareholders to
EBITDA and Comparable EBITDA (in thousands)
Three Months Ended
Nine Months Ended |
 26
Non-GAAP to GAAP Reconciliations
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.
Reconciliation of Net Loss Attributable to SHR Common Shareholders to
(in thousands, except per share data)
September 30,
September 30,
Three Months Ended
Nine Months Ended
Funds From Operations (FFO), FFO - Fully Diluted and Comparable
FFO |
 27
Non-GAAP to GAAP Reconciliations
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.
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
$
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. 2011 Guidance
(in millions, except per share data)
Year Ended
December 31, 2011
December 31, 2011
Year Ended
December 31, 2011
Year Ended |
 *
* * * * * * * * * * * * * * *
*
* |