Exhibit 99.2

 

 

 

 

Strategic Hotels & Resorts, Inc.

Supplemental Financial Information

March 31, 2012

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		Supplemental Financial Information
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)		March 31, 2012

 

 

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 Hotel			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 March 31, 2012			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
2012 Guidance			25

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		Supplemental Financial Information
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)		March 31, 2012

 

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:

40

Corporate Headquarters:

200 West Madison Street, Suite 1700

Chicago, IL 60606

(312) 658-5000

Company Contacts:

Diane M. Morefield

Executive Vice President, Chief Financial Officer

(312) 658-5000

Jonathan P. Stanner

Vice President, Capital Markets and Treasurer

(312) 658-5000

 

1

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		Supplemental Financial Information
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)		March 31, 2012

 

Board of Directors

Raymond L. Gellein, Jr.

Chairman of the Board and Executive Committee

Laurence S. Geller, CBE

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

Sheli Z. Rosenberg

Director

 

2

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		Supplemental Financial Information
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)		March 31, 2012

 

Officers

Laurence S. Geller, CBE

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

James L. Porter

Vice President, Internal Audit

Jonathan P. Stanner

Vice President, Capital Markets and Treasurer

Cory P. Warning

Vice President, Investments

 

3

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		Supplemental Financial Information
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)		March 31, 2012

 

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
International Strategy & Investment Group, Inc.		Ian Weissman		(212) 446-9461
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		Mark Strawn		(212) 761-4990
Raymond James & Associates		William Crow		(727) 567-2594
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.

 

4

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		Supplemental Financial Information
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)		March 31, 2012

 

FINANCIAL HIGHLIGHTS

Supplemental Financial Data

(in thousands, except per share information)

 

		March 31, 2012
		Pro Rata Share				Consolidated
Capitalization
Common shares outstanding			185,868				185,868
Operating partnership units outstanding			853				853
Restricted stock units outstanding			1,077				1,077
Value Creation Plan units outstanding under the deferral program			1,153				1,153
Combined shares and units outstanding			188,951				188,951
Common stock price at end of period		$	6.58			$	6.58
Common equity capitalization		$	1,243,298			$	1,243,298
Preferred equity capitalization (at $25.00 face value)			289,102				289,102
Consolidated debt			1,059,128				1,059,128
Pro rata share of unconsolidated debt			212,275				—
Pro rata share of consolidated debt			(45,548	)			—
Cash and cash equivalents			(58,205	)			(58,205	)
Total enterprise value		$	2,700,050			$	2,533,323
Net Debt / Total Enterprise Value			43.2	%			39.5	%
Preferred Equity / Total Enterprise Value			10.7	%			11.4	%
Common Equity / Total Enterprise Value			46.0	%			49.1	%

 

5

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		Supplemental Financial Information
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)		Three Months Ended March 31, 2012 and 2011

 

Consolidated Statements of Operations

(in thousands, except per share data)

 

		Three Months Ended
		March 31,
		2012				2011
Revenues:
Rooms		$	94,510			$	91,470
Food and beverage			62,479				62,882
Other hotel operating revenue			20,125				19,973
Lease revenue			1,165				1,215
Total revenues			178,279				175,540
Operating Costs and Expenses:
Rooms			28,576				26,627
Food and beverage			47,393				46,007
Other departmental expenses			49,565				50,673
Management fees			5,616				5,774
Other hotel expenses			13,609				13,358
Lease expense			1,168				1,196
Depreciation and amortization			25,490				30,605
Corporate expenses			13,810				14,477
Total operating costs and expenses			185,227				188,717
Operating loss			(6,948	)			(13,177	)
Interest expense			(19,605	)			(19,548	)
Interest income			30				32
Equity in earnings (losses) of unconsolidated affiliates			920				(1,600	)
Foreign currency exchange (loss) gain			(5	)			139
Other income, net			452				3,925
Loss before income taxes and discontinued operations			(25,156	)			(30,229	)
Income tax (expense) benefit			(465	)			1,648
Loss from continuing operations			(25,621	)			(28,581	)
Income from discontinued operations, net of tax			—				162
Net loss			(25,621	)			(28,419	)
Net loss attributable to the noncontrolling interests in SHR’s operating partnership			117				138
Net loss attributable to the noncontrolling interests in consolidated affiliates			29				595
Net loss attributable to SHR			(25,475	)			(27,686	)
Preferred shareholder dividends			(6,041	)			(7,721	)
Net loss attributable to SHR common shareholders		$	(31,516	)		$	(35,407	)
Basic and Diluted Loss Per Share:
Loss from continuing operations attributable to SHR common shareholders		$	(0.17	)		$	(0.23	)
Income from discontinued operations attributable to SHR common shareholders			—				—
Net loss attributable to SHR common shareholders		$	(0.17	)		$	(0.23	)
Weighted average common shares outstanding			186,430				157,333

 

6

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		Supplemental Financial Information
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)		March 31, 2012 and December 31, 2011

 

Consolidated Balance Sheets

(in thousands, except share data)

 

		March 31,				December 31,
		2012				2011
Assets
Investment in hotel properties, net		$	1,676,881			$	1,692,431
Goodwill			40,359				40,359
Intangible assets, net of accumulated amortization of $9,435 and $8,915			31,108				30,635
Investment in unconsolidated affiliates			126,198				126,034
Cash and cash equivalents			58,205				72,013
Restricted cash and cash equivalents			40,703				39,498
Accounts receivable, net of allowance for doubtful accounts of $1,575 and $1,698			49,359				43,597
Deferred financing costs, net of accumulated amortization of $4,434 and $3,488			9,955				10,845
Deferred tax assets			1,968				2,230
Prepaid expenses and other assets			38,852				29,047
Total assets		$	2,073,588			$	2,086,689
Liabilities, Noncontrolling Interests and Equity
Liabilities:
Mortgages and other debt payable		$	1,000,128			$	1,000,385
Bank credit facility			59,000				50,000
Accounts payable and accrued expenses			246,384				249,179
Distributions payable			78,540				72,499
Deferred tax liabilities			47,475				47,623
Total liabilities			1,431,527				1,419,686
Noncontrolling interests in SHR’s operating partnership			5,616				4,583
Equity:
SHR’s shareholders' equity:
8.50% Series A Cumulative Redeemable Preferred Stock ($0.01 par value per share; 4,148,141 shares issued and outstanding; liquidation preference $25.00 per share plus accrued distributions and $132,352 and $130,148 in the aggregate)			99,995				99,995
8.25% Series B Cumulative Redeemable Preferred Stock ($0.01 par value per share; 3,615,375 shares issued and outstanding; liquidation preference $25.00 per share plus accrued distributions and $114,619 and $112,775 in the aggregate)			87,064				87,064
8.25% Series C Cumulative Redeemable Preferred Stock ($0.01 par value per share; 3,827,727 shares issued and outstanding; liquidation preference $25.00 per share plus accrued distributions and $121,351 and $119,377 in the aggregate)			92,489				92,489
Common shares ($0.01 par value per share; 250,000,000 common shares authorized; 185,867,664 and 185,627,199 common shares issued and outstanding)			1,858				1,856
Additional paid-in capital			1,628,310				1,634,067
Accumulated deficit			(1,216,096	)			(1,190,621	)
Accumulated other comprehensive loss			(65,485	)			(70,652	)
Total SHR’s shareholders’ equity			628,135				654,198
Noncontrolling interests in consolidated affiliates			8,310				8,222
Total equity			636,445				662,420
Total liabilities, noncontrolling interests and equity		$	2,073,588			$	2,086,689

 

7

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		Supplemental Financial Information
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)		Three Months Ended March 31, 2012 and 2011

 

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 hotel was sold during 2011 (in thousands):

 

Hotel		Date Sold				Net Sales Proceeds
Paris Marriott Champs Elysees (Paris Marriott)			April 6, 2011			$	58,012

The following is a summary of income from discontinued operations for the three months ended March 31, 2012 and 2011 (in thousands):

 

		Three Months Ended
		March 31,
		2012				2011
Hotel operating revenues		$	—			$	8,805
Operating costs and expenses			—				8,682
Operating income			—				123
Foreign currency exchange gain			—				58
Other income, net			—				326
Income tax expense			—				(359	)
Gain on sale			—				14
Income from discontinued operations		$	—			$	162

 

8

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		Supplemental Financial Information
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)		Three Months Ended March 31, 2012 and 2011

 

Investments in the Hotel del Coronado and Fairmont Scottsdale Princess Hotel

(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 Hotel decreased from 100% to 50%. We account for these investments using the equity method of accounting.

 

		Three Months Ended												Three Months Ended
		March 31, 2012												March 31, 2011
						Fairmont												Fairmont
		Hotel del				Scottsdale								Hotel del				Scottsdale
		Coronado				Princess				Total				Coronado				Princess				Total
Total revenues (100%)		$	30,843			$	26,983			$	57,826			$	29,302			$	—			$	29,302
Property EBITDA (100%)		$	8,219			$	8,655			$	16,874			$	7,298			$	—			$	7,298
Equity in (losses) earnings of unconsolidated affiliates (SHR ownership)
Property EBITDA		$	2,819			$	4,327			$	7,146			$	2,606			$	—			$	2,606
Depreciation and amortization			(1,689	)			(1,771	)			(3,460	)			(1,635	)			—				(1,635	)
Interest expense			(2,518	)			(203	)			(2,721	)			(2,305	)			—				(2,305	)
Other expenses, net			(23	)			(58	)			(81	)			(739	)			—				(739	)
Income taxes			267				—				267				577				—				577
Equity in (losses) earnings of unconsolidated affiliates		$	(1,144	)		$	2,295			$	1,151			$	(1,496	)		$	—			$	(1,496	)
EBITDA Contribution:
Equity in (losses) earnings of unconsolidated affiliates		$	(1,144	)		$	2,295			$	1,151			$	(1,496	)		$	—			$	(1,496	)
Depreciation and amortization			1,689				1,771				3,460				1,635				—				1,635
Interest expense			2,518				203				2,721				2,305				—				2,305
Income taxes			(267	)			—				(267	)			(577	)			—				(577	)
EBITDA Contribution		$	2,796			$	4,269			$	7,065			$	1,867			$	—			$	1,867
FFO Contribution:
Equity in (losses) earnings of unconsolidated affiliates		$	(1,144	)		$	2,295			$	1,151			$	(1,496	)		$	—			$	(1,496	)
Depreciation and amortization			1,689				1,771				3,460				1,635				—				1,635
FFO Contribution		$	545			$	4,066			$	4,611			$	139			$	—			$	139

 

				Spread over
Debt		Interest Rate		LIBOR		Loan Amount				Maturity (a)
Hotel del Coronado
CMBS Mortgage and Mezzanine		5.80%(b)		480 bp (b)		$	425,000			March 2016
Cash and cash equivalents							(19,506	)
Net Debt						$	405,494
Fairmont Scottsdale Princess
CMBS Mortgage		0.60%		36 bp		$	133,000			April 2015
Cash and cash equivalents							(3,051	)
Net Debt						$	129,949

 

(a)	Includes extension options.

(b)	Subject to a 1% LIBOR floor.

 

		Effective
Caps		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

 

9

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		Supplemental Financial Information
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)		Three Months Ended March 31, 2012 and 2011

 

Leasehold Information

(in thousands)

 

		Three Months Ended
		March 31,
		2012				2011
Paris Marriott (a):
Property EBITDA		$	—			$	3,249
Revenue (b)		$	—			$	3,249
Lease expense			—				(3,051	)
Less: Deferred gain on sale-leaseback			—				(1,152	)
Adjusted lease expense			—				(4,203	)
EBITDA contribution from leasehold		$	—			$	(954	)
Marriott Hamburg:
Property EBITDA		$	1,400			$	1,456
Revenue (b)		$	1,165			$	1,215
Lease expense			(1,168	)			(1,196	)
Less: Deferred gain on sale-leaseback			(51	)			(53	)
Adjusted lease expense			(1,219	)			(1,249	)
EBITDA contribution from leasehold		$	(54	)		$	(34	)
Total Leaseholds:
Property EBITDA		$	1,400			$	4,705
Revenue (b)		$	1,165			$	4,464
Lease expense			(1,168	)			(4,247	)
Less: Deferred gain on sale-leasebacks			(51	)			(1,205	)
Adjusted lease expense			(1,219	)			(5,452	)
EBITDA contribution from leaseholds		$	(54	)		$	(988	)

 

		March 31,				December 31,
		2012				2011
Security Deposit (c):
Marriott Hamburg		$	2,535			$	2,462

 

(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 months ended March 31, 2011, Revenue for the Paris Marriott represents Property EBITDA. For the three months ended March 31, 2012 and 2011, Revenue for the Marriott Hamburg represents lease revenue.

(c)	The security deposit is recorded in other assets on the consolidated balance sheets.

 

10

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		Supplemental Financial Information
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)		March 31, 2012

 

Non-GAAP Financial Measures

We present five non-GAAP financial measures that we believe are useful to management and investors as key measures of our operating performance: Funds from Operations (FFO); FFO—Fully Diluted; Comparable FFO; Earnings Before Interest Expense, Taxes, Depreciation and Amortization (EBITDA); and Comparable EBITDA.

EBITDA represents net income (or loss) attributable to SHR common shareholders excluding: (i) interest expense, (ii) income taxes, including deferred income tax benefits and expenses applicable to our foreign subsidiaries and income taxes applicable to sale of assets; (iii) depreciation and amortization; and (iv) preferred stock dividends. EBITDA also excludes interest expense, income taxes and depreciation and amortization of our unconsolidated affiliates. EBITDA is presented on a full participation basis, which means we have assumed conversion of all redeemable noncontrolling interests of our operating partnership into our common stock. We believe this treatment of noncontrolling interests provides useful information for management and our investors and appropriately considers our current capital structure. We also present Comparable EBITDA, which eliminates the effect of realizing deferred gains on our sale leasebacks, as well as the effect of gains or losses on sales of assets, early extinguishment of debt, impairment losses, foreign currency exchange gains or losses and 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, with the exception of impairment of depreciable real estate. NAREIT adopted a definition of FFO in order to promote an industry-wide standard measure of REIT operating performance. NAREIT defines FFO as net income (or loss) (computed in accordance with GAAP) excluding losses or gains from sales of depreciable property, impairment of depreciable real estate, real estate-related depreciation and amortization, and our portion of these items related to unconsolidated affiliates. We also present FFO—Fully Diluted, which is FFO plus income or loss on income attributable to redeemable noncontrolling interests in our operating partnership. We also present Comparable FFO, which is FFO—Fully Diluted excluding the impact of any gains or losses on early extinguishment of debt, impairment losses, 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.

 

11

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		Supplemental Financial Information
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)		Three Months Ended March 31, 2012 and 2011

 

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

(in thousands)

 

		Three Months Ended
		March 31,
		2012				2011
Net loss attributable to SHR common shareholders		$	(31,516	)		$	(35,407	)
Depreciation and amortization			25,490				30,605
Interest expense			19,605				19,548
Income taxes—continuing operations			465				(1,648	)
Income taxes—discontinued operations			—				359
Noncontrolling interests			(117	)			(138	)
Adjustments from consolidated affiliates			(1,257	)			(1,329	)
Adjustments from unconsolidated affiliates			6,682				3,890
Preferred shareholder dividends			6,041				7,721
EBITDA			25,393				23,601
Realized portion of deferred gain on sale-leaseback—continuing operations			(51	)			(53	)
Realized portion of deferred gain on sale-leaseback—discontinued operations			—				(1,152	)
Gain on sale of assets—continuing operations			—				(2,640	)
Gain on sale of assets—discontinued operations			—				(14	)
Foreign currency exchange loss (gain)—continuing operations (a)			5				(139	)
Foreign currency exchange gain—discontinued operations (a)			—				(58	)
Adjustment for Value Creation Plan			7,939				9,181
Comparable EBITDA		$	33,286			$	28,726

 

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

 

12

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		Supplemental Financial Information
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)		Three Months Ended March 31, 2012 and 2011

 

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
		March 31,
		2012				2011
Net loss attributable to SHR common shareholders		$	(31,516	)		$	(35,407	)
Depreciation and amortization			25,490				30,605
Corporate depreciation			(265	)			(299	)
Gain on sale of assets—continuing operations			—				(2,640	)
Gain on sale of assets—discontinued operations			—				(14	)
Realized portion of deferred gain on sale-leaseback—continuing operations			(51	)			(53	)
Realized portion of deferred gain on sale-leaseback—discontinued operations			—				(1,152	)
Deferred tax expense on realized portion of deferred gain on sale-leasebacks			—				359
Noncontrolling interests adjustments			(133	)			(157	)
Adjustments from consolidated affiliates			(667	)			(1,561	)
Adjustments from unconsolidated affiliates			3,764				1,839
FFO			(3,378	)			(8,480	)
Redeemable noncontrolling interests			16				19
FFO—Fully Diluted			(3,362	)			(8,461	)
Non-cash mark to market of interest rate swaps			(1,530	)			(4,366	)
Foreign currency exchange loss (gain)—continuing operations (a)			5				(139	)
Foreign currency exchange gain—discontinued operations (a)			—				(58	)
Adjustment for Value Creation Plan			7,939				9,181
Comparable FFO		$	3,052			$	(3,843	)
Comparable FFO per diluted share		$	0.02			$	(0.02	)
Weighted average diluted shares			188,787				157,333

 

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

 

13

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		Supplemental Financial Information
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)		March 31, 2012

 

Debt Summary

(dollars in thousands)

 

						Loan
Debt		Interest Rate		Spread (a)		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)		2.13%		110 bp (c)			115,454			October 2013
Bank credit facility		3.24%		300 bp			59,000			June 2015
Four Seasons Washington, D.C.		3.39%		315 bp			130,000			July 2016
Westin St. Francis		6.09%		Fixed			218,579			June 2017
Fairmont Chicago		6.09%		Fixed			97,119			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
						$	1,059,128

 

(a)	Spread over LIBOR (0.24% at March 31, 2012).

(b)	Includes extension options.

(c)	Principal balance of £72,100,000 at March 31, 2012. Spread over three-month GBP LIBOR (1.03% at March 31, 2012).

Domestic and European Interest Rate Swaps

 

		Fixed Pay Rate				Notional
Swap Effective Date		Against LIBOR				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

 

Fixed Pay Rate

Notional

Swap Effective Date

Against GBP LIBOR

Amount

Maturity

October 2007

5.72

%

£

72,100

October 2013

At March 31, 2012, future scheduled debt principal payments (including extension options) are as follows:

 

Years ending December 31,		Amount
2012		$	105,494
2013			126,147
2014			13,872
2015			74,046
2016			145,861
Thereafter			593,708
		$	1,059,128

 

Percent of fixed rate debt including U.S. and European swaps			92.3	%
Weighted average interest rate including U.S. and European swaps (d)			6.60	%
Weighted average maturity of fixed rate debt (debt with maturity of greater than one year)			4.56

 

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

 

14

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		Supplemental Financial Information
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)		March 31, 2012

 

Portfolio Data

Portfolio at March 31, 2012

(dollars in thousands)

 

												% of QTR				QTR
				Number				% of				March 2012				March 2012
				of				Total				Property				Property
Hotel		Location		Rooms				Rooms				EBITDA				EBITDA
United States:
Westin St. Francis		San Francisco, CA			1,195				15	%			15	%		$	5,825
InterContinental Chicago (a)		Chicago, IL			792				10	%			-2	%			(784	)
Hotel del Coronado (b)		Coronado, CA			757				10	%			7	%			2,819
Fairmont Chicago		Chicago, IL			687				9	%			-1	%			(346	)
Fairmont Scottsdale Princess (c)		Scottsdale, AZ			649				8	%			11	%			4,327
InterContinental Miami		Miami, FL			641				8	%			18	%			7,088
Hyatt Regency La Jolla (d)		La Jolla, CA			419				5	%			4	%			1,771
Ritz-Carlton Laguna Niguel		Dana Point, CA			396				5	%			9	%			3,645
Marriott Lincolnshire Resort		Lincolnshire, IL			389				5	%			-2	%			(639	)
Loews Santa Monica Beach Hotel		Santa Monica, CA			342				5	%			7	%			2,895
Ritz-Carlton Half Moon Bay		Half Moon Bay, CA			261				3	%			3	%			1,316
Four Seasons Washington, D.C.		Washington, D.C.			222				3	%			5	%			1,888
Four Seasons Silicon Valley (e)		East Palo Alto, CA			200				3	%			4	%			1,459
Four Seasons Jackson Hole (e)		Teton Village, WY			124				2	%			7	%			2,773
Total United States					7,074				91	%			85	%			34,037
Mexican:
Four Seasons Punta Mita Resort		Punta Mita, Mexico			173				2	%			8	%			3,216
Total Mexican					173				2	%			8	%			3,216
Total North American					7,247				93	%			93	%			37,253
European:
Marriott Hamburg (f)		Hamburg, Germany			278				4	%			N/A				N/A
Marriott London Grosvenor Square		London, England			237				3	%			7	%			2,875
Total European					515				7	%			7	%			2,875
					7,762				100	%			100	%		$	40,128

 

(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 earnings (losses) 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.

 

15

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		Supplemental Financial Information
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)		Four Quarters Ended March 31, 2012

 

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 as its results of operations were reclassified to discontinued operations, (ii) exclusion of the unconsolidated Hotel del Coronado and Fairmont Scottsdale Princess hotel and (iii) presentation of the hotels without regard to either ownership structure or leaseholds.

United States Hotels (as of March 31, 2012)

Same store property revenues—12 Properties and 5,668 Rooms

 

		Three Months Ended
		June 30, 2011				September 30, 2011				December 31, 2011				March 31, 2012				Total
Same store property revenues		$	167,678			$	174,347			$	171,798			$	140,237			$	654,060
Pro forma seasonality %			25.6	%			26.7	%			26.3	%			21.4	%			100.0	%

Mexican Hotel (as of March 31, 2012)

Same store property revenues—1 Property and 173 Rooms

 

		Three Months Ended
		June 30, 2011				September 30, 2011				December 31, 2011				March 31, 2012				Total
Same store property revenues		$	8,594			$	4,457			$	10,181			$	9,930			$	33,162
Same store seasonality %			25.9	%			13.4	%			30.7	%			30.0	%			100.0	%

North American Hotels (as of March 31, 2012)

Same store property revenues—13 Properties and 5,841 Rooms

 

		Three Months Ended
		June 30, 2011				September 30, 2011				December 31, 2011				March 31, 2012				Total
Same store property revenues		$	176,272			$	178,804			$	181,979			$	150,167			$	687,222
Same store seasonality %			25.6	%			26.0	%			26.5	%			21.9	%			100.0	%

European Hotels (as of March 31, 2012)

Same store property revenues—2 Properties and 515 Rooms

 

		Three Months Ended
		June 30, 2011				September 30, 2011				December 31, 2011				March 31, 2012				Total
Same store property revenues		$	16,367			$	15,832			$	16,230			$	12,477			$	60,906
Same store seasonality %			26.9	%			26.0	%			26.6	%			20.5	%			100.0	%

 

16

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		Supplemental Financial Information
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)		Three Months Ended March 31, 2012 and 2011

 

Operating Statistics by Geographic Region

The Total United States portfolio is derived from our hotel portfolio at March 31, 2012, consisting of all properties located in the United States, including the Four Seasons Jackson Hole hotel, the Four Seasons Silicon Valley hotel and 100% of the operations of the Hotel del Coronado and the Fairmont Scottsdale Princess hotel. The Total North American portfolio includes the Total United States portfolio and the Four Seasons Punta Mita Resort. Adjustments to the same store portfolios are the (i) exclusion of unconsolidated Hotel del Coronado and Fairmont Scottsdale Princess hotel, (ii) exclusion of Four Seasons Jackson Hole and Four Seasons Silicon Valley hotels, (iii) exclusion of Paris Marriott hotel as this property's 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.

Total United States Hotels (as of March 31, 2012)

14 Properties

7,074 Rooms

 

		Three Months Ended
		March 31,
		2012				2011				Change
ADR		$	251.54			$	239.49				5.0	%
Average Occupancy			68.7	%			66.4	%			2.3	pts
RevPAR		$	172.86			$	158.91				8.8	%
Total RevPAR		$	338.85			$	314.41				7.8	%
Property EBITDA Margin			20.1	%			17.9	%			2.2	pts

Total North American Hotels (as of March 31, 2012)

15 Properties

7,247 Rooms

 

		Three Months Ended
		March 31,
		2012				2011				Change
ADR		$	259.40			$	248.41				4.4	%
Average Occupancy			68.2	%			65.9	%			2.3	pts
RevPAR		$	176.88			$	163.82				8.0	%
Total RevPAR		$	345.85			$	323.13				7.0	%
Property EBITDA Margin			20.7	%			18.6	%			2.1	pts

Same Store North American Hotels (as of March 31, 2012)

11 Properties

5,517 Rooms

 

		Three Months Ended
		March 31,
		2012				2011				Change
ADR		$	238.09			$	226.44				5.1	%
Average Occupancy			67.3	%			64.7	%			2.6	pts
RevPAR		$	160.27			$	146.49				9.4	%
Total RevPAR		$	300.74			$	279.33				7.7	%
Property EBITDA Margin			17.2	%			15.5	%			1.7	pts

Same Store European Hotels (as of March 31, 2012)

2 Properties

515 Rooms

 

		Three Months Ended
		March 31,
		2012				2011				Change
ADR		$	255.03			$	244.71				4.2	%
Average Occupancy			77.5	%			70.9	%			6.6	pts
RevPAR		$	197.56			$	173.58				13.8	%
Total RevPAR		$	266.24			$	248.40				7.2	%
Property EBITDA Margin			34.3	%			32.4	%			1.9	pts

 

17

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		Supplemental Financial Information
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)		Three Months Ended March 31, 2012 and 2011

 

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 months ended March 31, 2012 and 2011. Property EBITDA reflects property net operating income or loss plus depreciation and amortization.

 

		Three Months Ended March 31,
UNITED STATES HOTELS:		2012				2011				Change
FAIRMONT CHICAGO
Selected Financial Information:
Total revenues		$	10,638			$	9,004				18.1	%
Property EBITDA		$	(346	)		$	(1,207	)			71.3	%
Selected Operating Information:
Rooms			687				687				—
Average occupancy			52.8	%			47.2	%			5.6	pts
ADR		$	177.61			$	167.22				6.2	%
RevPAR		$	93.79			$	79.00				18.7	%
Total RevPAR		$	170.17			$	145.62				16.9	%
FAIRMONT SCOTTSDALE PRINCESS
Selected Financial Information (Amounts below are 100% of operations, of which SHR owns 50% and 100% as of March 31, 2012 and 2011, respectively):
Total revenues		$	26,983			$	25,357				6.4	%
Property EBITDA		$	8,655			$	7,370				17.4	%
Selected Operating Information:
Rooms			649				649				—
Average occupancy			77.9	%			79.7	%			(1.8	)pts
ADR		$	292.12			$	270.23				8.1	%
RevPAR		$	227.49			$	215.25				5.7	%
Total RevPAR		$	456.88			$	434.12				5.2	%
FOUR SEASONS JACKSON HOLE
Selected Financial Information (This table includes financial information only for our period of ownership):
Total revenues		$	11,784				N/A				N/A
Property EBITDA		$	2,773				N/A				N/A
Selected Operating Information (This table includes statistical information only for our period of ownership. For the three months ended March 31, 2011, average occupancy was 70.2%, ADR was $551.85, RevPAR was $387.23 and Total RevPAR was $962.65.):
Rooms			124				N/A				N/A
Average occupancy			74.2	%			N/A				N/A
ADR		$	554.45				N/A				N/A
RevPAR		$	411.22				N/A				N/A
Total RevPAR		$	1,044.32				N/A				N/A
FOUR SEASONS SILICON VALLEY
Selected Financial Information (This table includes financial information only for our period of ownership):
Total revenues		$	7,363				N/A				N/A
Property EBITDA		$	1,459				N/A				N/A
Selected Operating Information (This table includes statistical information only for our period of ownership. For the three months ended March 31, 2011, average occupancy was 64.3%, ADR was $294.45, RevPAR was $189.40 and Total RevPAR was $364.00.):
Rooms			200				N/A				N/A
Average occupancy			69.0	%			N/A				N/A
ADR		$	315.46				N/A				N/A
RevPAR		$	217.67				N/A				N/A
Total RevPAR		$	404.54				N/A				N/A

18

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		Supplemental Financial Information
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)		Three Months Ended March 31, 2012 and 2011

 

 

		Three Months Ended March 31,
		2012				2011				Change
FOUR SEASONS WASHINGTON, D.C.
Selected Financial Information:
Total revenues		$	13,528			$	13,235				2.2	%
Property EBITDA		$	1,888			$	2,027				(6.9	)%
Selected Operating Information:
Rooms			222				222				—
Average occupancy			68.1	%			63.9	%			4.2	pts
ADR		$	478.65			$	481.34				(0.6	)%
RevPAR		$	326.02			$	307.69				6.0	%
Total RevPAR		$	669.63			$	662.42				1.1	%
HOTEL DEL CORONADO
Selected Financial Information (Amounts below are 100% of operations, of which SHR owns 34.3% as of March 31, 2012 and 2011):
Total revenues		$	30,843			$	29,302				5.3	%
Property EBITDA		$	8,219			$	7,298				12.6	%
Selected Operating Information:
Rooms			757				757				—
Average occupancy			65.0	%			63.0	%			2.0	pts
ADR		$	314.88			$	320.61				(1.8	)%
RevPAR		$	204.77			$	202.08				1.3	%
Total RevPAR		$	447.73			$	430.09				4.1	%
HYATT REGENCY LA JOLLA
Selected Financial Information:
Total revenues		$	8,765			$	9,373				(6.5	)%
Property EBITDA		$	1,771			$	1,697				4.4	%
Selected Operating Information:
Rooms			419				419				—
Average occupancy			71.3	%			78.4	%			(7.1	)pts
ADR		$	166.15			$	162.33				2.4	%
RevPAR		$	118.48			$	127.33				(6.9	)%
Total RevPAR		$	229.88			$	248.54				(7.5	)%
INTERCONTINENTAL CHICAGO
Selected Financial Information:
Total revenues		$	11,430			$	9,701				17.8	%
Property EBITDA		$	(784	)		$	(312	)			(151.3	)%
Selected Operating Information:
Rooms			792				792				—
Average occupancy			59.2	%			60.2	%			(1.0	)pts
ADR		$	145.95			$	137.69				6.0	%
RevPAR		$	86.39			$	82.94				4.2	%
Total RevPAR		$	158.59			$	136.10				16.5	%
INTERCONTINENTAL MIAMI
Selected Financial Information:
Total revenues		$	18,086			$	16,861				7.3	%
Property EBITDA		$	7,088			$	6,402				10.7	%
Selected Operating Information:
Rooms			641				641				—
Average occupancy			87.0	%			81.5	%			5.5	pts
ADR		$	209.86			$	210.52				(0.3	)%
RevPAR		$	182.60			$	171.66				6.4	%
Total RevPAR		$	310.05			$	292.27				6.1	%

19

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		Supplemental Financial Information
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)		Three Months Ended March 31, 2012 and 2011

 

 

		Three Months Ended March 31,
		2012				2011				Change
LOEWS SANTA MONICA BEACH HOTEL
Selected Financial Information:
Total revenues		$	12,180			$	10,872				12.0	%
Property EBITDA		$	2,895			$	2,219				30.5	%
Selected Operating Information:
Rooms			342				342				—
Average occupancy			86.0	%			86.1	%			(0.1	)pts
ADR		$	292.90			$	270.90				8.1	%
RevPAR		$	252.01			$	233.22				8.1	%
Total RevPAR		$	391.38			$	353.22				10.8	%
MARRIOTT LINCOLNSHIRE RESORT
Selected Financial Information:
Total revenues		$	5,994			$	5,296				13.2	%
Property EBITDA		$	(639	)		$	(464	)			(37.7	)%
Selected Operating Information:
Rooms			389				389				—
Average occupancy			48.2	%			34.7	%			13.5	pts
ADR		$	121.07			$	125.04				(3.2	)%
RevPAR		$	58.32			$	43.35				34.5	%
Total RevPAR		$	183.43			$	162.08				13.2	%
RITZ-CARLTON HALF MOON BAY
Selected Financial Information:
Total revenues		$	11,846			$	11,014				7.6	%
Property EBITDA		$	1,316			$	715				84.1	%
Selected Operating Information:
Rooms			261				261				—
Average occupancy			57.9	%			58.3	%			(0.4	)pts
ADR		$	343.32			$	303.36				13.2	%
RevPAR		$	198.61			$	176.84				12.3	%
Total RevPAR		$	498.74			$	468.88				6.4	%
RITZ-CARLTON LAGUNA NIGUEL
Selected Financial Information:
Total revenues		$	15,802			$	13,216				19.6	%
Property EBITDA		$	3,645			$	2,272				60.4	%
Selected Operating Information:
Rooms			396				396				—
Average occupancy			59.0	%			53.7	%			5.3	pts
ADR		$	345.48			$	323.20				6.9	%
RevPAR		$	203.98			$	173.67				17.4	%
Total RevPAR		$	438.50			$	370.82				18.3	%
WESTIN ST. FRANCIS
Selected Financial Information:
Total revenues		$	31,968			$	28,912				10.6	%
Property EBITDA		$	5,825			$	4,576				27.3	%
Selected Operating Information:
Rooms			1,195				1,195				—
Average occupancy			77.2	%			74.2	%			3.0	pts
ADR		$	226.50			$	202.24				12.0	%
RevPAR		$	174.76			$	150.07				16.4	%
Total RevPAR		$	293.97			$	268.82				9.4	%

20

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		Supplemental Financial Information
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)		Three Months Ended March 31, 2012 and 2011

 

 

		Three Months Ended March 31,
MEXICAN HOTEL:		2012				2011				Change
FOUR SEASONS PUNTA MITA RESORT
Selected Financial Information:
Total revenues		$	9,930			$	10,561				(6.0)	%
Property EBITDA		$	3,216			$	3,520				(8.6)	%
Selected Operating Information:
Rooms			173				173				—
Average occupancy			46.4	%			49.5	%			(3.1)	pts
ADR		$	734.45			$	735.72				(0.2)	%
RevPAR		$	340.47			$	364.08				(6.5)	%
Total RevPAR		$	630.75			$	678.27				(7.0)	%

 

21

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		Supplemental Financial Information
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)		Three Months Ended March 31, 2012 and 2011

 

 

		Three Months Ended March 31,
EUROPEAN HOTELS:		2012				2011				Change
MARRIOTT HAMBURG
Selected Financial Information:
Total revenues		$	4,680			$	4,808				(2.7	)%
Property EBITDA		$	1,400			$	1,456				(3.8	)%
Selected Operating Information:
Rooms			278				278				—
Average occupancy			74.1	%			75.9	%			(1.8	)pts
ADR		$	180.16			$	178.14				1.1	%
RevPAR		$	133.42			$	135.20				(1.3	)%
Total RevPAR		$	185.01			$	192.16				(3.7	)%
MARRIOTT LONDON GROSVENOR SQUARE
Selected Financial Information:
Total revenues		$	7,797			$	6,705				16.3	%
Property EBITDA		$	2,875			$	2,276				26.3	%
Selected Operating Information:
Rooms			237				237				—
Average occupancy			81.5	%			65.1	%			16.4	pts
ADR		$	334.87			$	335.72				(0.3	)%
RevPAR		$	272.80			$	218.60				24.8	%
Total RevPAR		$	361.52			$	314.37				15.0	%

 

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		Supplemental Financial Information
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)		Three Months Ended March 31, 2012 and 2011

 

Reconciliation of Property EBITDA to EBITDA

(in thousands)

 

		Three Months Ended March 31,
		2012								2011
		Property								Property
Hotel		EBITDA				EBITDA				EBITDA				EBITDA
Fairmont Chicago		$	(346	)		$	(346	)		$	(1,207	)		$	(1,207	)
Fairmont Scottsdale Princess (a)			8,655				—				7,370				7,370
Four Seasons Jackson Hole (b)			2,773				2,773				—				734
Four Seasons Silicon Valley (b)			1,459				1,459				—				350
Four Seasons Washington, D.C.			1,888				1,888				2,027				2,027
Hotel del Coronado (c)			8,219				—				7,298				—
Hyatt Regency La Jolla			1,771				1,771				1,697				1,697
InterContinental Chicago			(784	)			(784	)			(312	)			(312	)
InterContinental Miami			7,088				7,088				6,402				6,402
Loews Santa Monica Beach Hotel			2,895				2,895				2,219				2,219
Marriott Lincolnshire Resort			(639	)			(639	)			(464	)			(464	)
Ritz-Carlton Half Moon Bay			1,316				1,316				715				715
Ritz-Carlton Laguna Niguel			3,645				3,645				2,272				2,272
Westin St. Francis			5,825				5,825				4,576				4,576
Four Seasons Punta Mita Resort			3,216				3,216				3,520				3,520
Marriott Hamburg (d)			1,400				(3	)			1,456				19
Marriott London Grosvenor Square			2,875				2,875				2,276				2,276
		$	51,256			$	32,979			$	39,845			$	32,194
Adjustments:
Corporate expenses							(13,810	)							(14,477	)
Interest income							30								32
Equity in earnings (losses) of unconsolidated affiliates							920								(1,600	)
Foreign currency exchange (loss) gain							(5	)							139
Other income, net							452								3,925
Income from discontinued operations							—								162
Income taxes—discontinued operations							—								359
Noncontrolling interest in consolidated affiliates							29								595
Adjustments from consolidated affiliates							(1,257	)							(1,329	)
Adjustments from unconsolidated affiliates							6,682								3,890
Other adjustments							(627	)							(289	)
EBITDA						$	25,393							$	23,601

 

(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 is reflected in adjustments from unconsolidated affiliates for the three months ended March 31, 2012. 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 three months ended March 31, 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 months ended March 31, 2012 and 2011. 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.

 

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		Supplemental Financial Information
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)		Three Months Ended March 31, 2012

 

Reconciliation of Property EBITDA to Comparable EBITDA

(in thousands)

 

		Three Months Ended March 31, 2012
		Property								Comparable
		EBITDA				Adjustments				EBITDA
Urban Hotels:
Fairmont Chicago		$	(346	)		$	—			$	(346	)
Four Seasons Silicon Valley			1,459				—				1,459
Four Seasons Washington, D.C.			1,888				—				1,888
Hyatt Regency La Jolla			1,771				(824	)			947
InterContinental Chicago			(784	)			—				(784	)
InterContinental Miami			7,088				—				7,088
Westin St. Francis			5,825				—				5,825
Total Urban Hotels			16,901				(824	)			16,077
Resorts:
Fairmont Scottsdale Princess			8,655				(4,386	)			4,269
Four Seasons Jackson Hole			2,773				—				2,773
Four Seasons Punta Mita Resort			3,216				—				3,216
Hotel del Coronado			8,219				(5,423	)			2,796
Loews Santa Monica Beach Hotel			2,895				—				2,895
Marriott Lincolnshire Resort			(639	)			—				(639	)
Ritz-Carlton Half Moon Bay			1,316				—				1,316
Ritz-Carlton Laguna Niguel			3,645				—				3,645
Total Resorts			30,080				(9,809	)			20,271
European Hotels:
Marriott Hamburg			1,400				(1,454	)			(54	)
Marriott London Grosvenor Square			2,875				—				2,875
Total European Hotels			4,275				(1,454	)			2,821
		$	51,256			$	(12,087	)		$	39,169

 

		% of QTR
		Comparable EBITDA
Urban Hotels			41	%
Resorts			52	%
European Hotels			7	%
Total			100	%

Total United States Urban Hotels (as of March 31, 2012)

7 Properties

4,156 Rooms

 

		Three Months Ended March 31,
		2012				2011				Change
ADR		$	215.33			$	202.43				6.4	%
Average Occupancy			69.8	%			67.6	%			2.2	pts
RevPAR		$	150.21			$	136.88				9.7	%
Total RevPAR		$	269.11			$	250.34				7.5	%
Property EBITDA Margin			16.6	%			14.8	%			1.8	pts

Total United States Resorts (as of March 31, 2012)

7 Properties

2,918 Rooms

 

		Three Months Ended March 31,
		2012				2011				Change
ADR		$	305.60			$	295.30				3.5	%
Average Occupancy			67.2	%			64.5	%			2.7	pts
RevPAR		$	205.46			$	190.56				7.8	%
Total RevPAR		$	439.21			$	406.48				8.1	%
Property EBITDA Margin			23.3	%			20.5	%			2.8	pts

 

24

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		Supplemental Financial Information
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)		March 31, 2012

 

2012 Guidance

(in millions, except per share data)

 

		Year Ended December 31, 2012
Operational Guidance		Low Range				High Range
North American same store Total RevPAR growth (a)			5.0	%			7.0	%
North American same store RevPAR growth (a)			6.0	%			8.0	%

 

(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, which were acquired in 2011.

 

		Year Ended December 31, 2012
Comparable EBITDA Guidance		Low Range				High Range
Net loss attributable to common shareholders		$	(79.3	)		$	(64.3	)
Depreciation and amortization			105.0				105.0
Interest expense			83.1				83.1
Income taxes			1.1				1.1
Noncontrolling interests			(0.3	)			(0.3	)
Adjustments from consolidated affiliates			(5.7	)			(5.7	)
Adjustments from unconsolidated affiliates			28.3				28.3
Preferred shareholder dividends			24.2				24.2
Realized portion of deferred gain on sale-leasebacks			(0.2	)			(0.2	)
Adjustment for Value Creation Plan			8.8				8.8
Comparable EBITDA		$	165.0			$	180.0

 

		Year Ended December 31, 2012
Comparable FFO Guidance		Low Range				High Range
Net loss attributable to common shareholders		$	(79.3	)		$	(64.3	)
Depreciation and amortization			103.8				103.8
Realized portion of deferred gain on sale-leasebacks			(0.2	)			(0.2	)
Noncontrolling interests			(0.2	)			(0.2	)
Adjustments from consolidated affiliates			(2.9	)			(2.9	)
Adjustments from unconsolidated affiliates			15.5				15.5
Adjustment for Value Creation Plan			8.8				8.8
Other adjustments			(1.5	)			(1.5	)
Comparable FFO		$	44.0			$	59.0
Comparable FFO per diluted share (b)		$	0.21			$	0.29

 

(b)	Comparable FFO per diluted share has been adjusted to reflect the 18.4 million shares issued in the Company’s common equity offering which closed on April 23, 2012.

 

25