Attached files
| file | filename |
|---|---|
| EX-99.2 - EXHIBIT 99.2 - STRATEGIC HOTELS & RESORTS, INC | a93013exhibit992.htm |
| EX-99.1 - EXHIBIT 99.1 - STRATEGIC HOTELS & RESORTS, INC | a93013exhibit991a-pressrel.htm |
| 8-K - 8-K - STRATEGIC HOTELS & RESORTS, INC | a930138kpressrelease.htm |
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)
Consolidated Statements of Operations
(in thousands, except per share data)
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
Revenues: | ||||||||||||||||
Rooms | $ | 144,150 | $ | 119,067 | $ | 393,072 | $ | 323,709 | ||||||||
Food and beverage | 69,625 | 63,283 | 221,260 | 197,693 | ||||||||||||
Other hotel operating revenue | 22,417 | 21,040 | 65,132 | 59,338 | ||||||||||||
Lease and other revenue | 1,416 | 1,175 | 3,776 | 3,505 | ||||||||||||
Total revenues | 237,608 | 204,565 | 683,240 | 584,245 | ||||||||||||
Operating Costs and Expenses: | ||||||||||||||||
Rooms | 38,525 | 32,069 | 110,711 | 90,628 | ||||||||||||
Food and beverage | 56,359 | 47,355 | 170,763 | 143,065 | ||||||||||||
Other departmental expenses | 59,401 | 52,908 | 173,827 | 153,557 | ||||||||||||
Management fees | 7,024 | 6,182 | 20,767 | 18,012 | ||||||||||||
Other hotel expenses | 14,771 | 13,988 | 47,826 | 40,360 | ||||||||||||
Lease expense | 1,202 | 1,114 | 3,584 | 3,425 | ||||||||||||
Depreciation and amortization | 26,244 | 25,649 | 80,459 | 76,416 | ||||||||||||
Impairment losses and other charges | 728 | — | 728 | — | ||||||||||||
Corporate expenses | 5,487 | 6,956 | 18,880 | 23,632 | ||||||||||||
Total operating costs and expenses | 209,741 | 186,221 | 627,545 | 549,095 | ||||||||||||
Operating income | 27,867 | 18,344 | 55,695 | 35,150 | ||||||||||||
Interest expense | (21,106 | ) | (19,942 | ) | (63,871 | ) | (58,627 | ) | ||||||||
Interest income | 12 | 42 | 45 | 122 | ||||||||||||
Equity in earnings (losses) of unconsolidated affiliates | 451 | (2,257 | ) | 3,252 | (2,054 | ) | ||||||||||
Foreign currency exchange (loss) gain | (9 | ) | (996 | ) | 177 | (1,169 | ) | |||||||||
Other (expenses) income, net | (832 | ) | 436 | 45 | 1,365 | |||||||||||
Income (loss) before income taxes and discontinued operations | 6,383 | (4,373 | ) | (4,657 | ) | (25,213 | ) | |||||||||
Income tax benefit (expense) | 430 | 600 | (1,121 | ) | (215 | ) | ||||||||||
Income (loss) from continuing operations | 6,813 | (3,773 | ) | (5,778 | ) | (25,428 | ) | |||||||||
Loss from discontinued operations, net of tax | — | — | — | (535 | ) | |||||||||||
Net Income (Loss) | 6,813 | (3,773 | ) | (5,778 | ) | (25,963 | ) | |||||||||
Net (income) loss attributable to the noncontrolling interests in SHR's operating partnership | (29 | ) | 17 | 22 | 126 | |||||||||||
Net loss attributable to the noncontrolling interests in consolidated affiliates | 3,018 | 1,241 | 7,467 | 891 | ||||||||||||
Net income (loss) attributable to SHR | 9,802 | (2,515 | ) | 1,711 | (24,946 | ) | ||||||||||
Preferred shareholder dividends | (6,042 | ) | (6,042 | ) | (18,125 | ) | (18,125 | ) | ||||||||
Net income (loss) attributable to SHR common shareholders | $ | 3,760 | $ | (8,557 | ) | $ | (16,414 | ) | $ | (43,071 | ) | |||||
Basic Income (Loss) Per Share: | ||||||||||||||||
Income (loss) from continuing operations attributable to SHR common shareholders | $ | 0.02 | $ | (0.04 | ) | $ | (0.08 | ) | $ | (0.22 | ) | |||||
Loss from discontinued operations attributable to SHR common shareholders | — | — | — | — | ||||||||||||
Net income (loss) attributable to SHR common shareholders | $ | 0.02 | $ | (0.04 | ) | $ | (0.08 | ) | $ | (0.22 | ) | |||||
Weighted average shares of common stock outstanding | 206,767 | 206,523 | 206,163 | 198,872 | ||||||||||||
Diluted Income (Loss) Per Share: | ||||||||||||||||
Income (loss) from continuing operations attributable to SHR common shareholders | $ | — | $ | (0.05 | ) | $ | (0.11 | ) | $ | (0.22 | ) | |||||
Loss from discontinued operations attributable to SHR common shareholders | — | — | — | — | ||||||||||||
Net income (loss) attributable to SHR common shareholders | $ | — | $ | (0.05 | ) | $ | (0.11 | ) | $ | (0.22 | ) | |||||
Weighted average shares of common stock outstanding | 220,258 | 218,182 | 217,553 | 198,872 | ||||||||||||
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)
Consolidated Balance Sheets
(in thousands, except share data)
September 30, 2013 | December 31, 2012 | |||||||
Assets | ||||||||
Investment in hotel properties, net | $ | 1,915,212 | $ | 1,970,560 | ||||
Goodwill | 40,359 | 40,359 | ||||||
Intangible assets, net of accumulated amortization of $12,143 and $10,812 | 29,185 | 30,631 | ||||||
Investment in unconsolidated affiliates | 106,914 | 112,488 | ||||||
Cash and cash equivalents | 79,801 | 80,074 | ||||||
Restricted cash and cash equivalents | 75,183 | 58,579 | ||||||
Accounts receivable, net of allowance for doubtful accounts of $1,611 and $1,602 | 52,794 | 45,620 | ||||||
Deferred financing costs, net of accumulated amortization of $10,887 and $7,049 | 9,931 | 11,695 | ||||||
Deferred tax assets | 3,027 | 2,203 | ||||||
Prepaid expenses and other assets | 48,901 | 54,208 | ||||||
Total assets | $ | 2,361,307 | $ | 2,406,417 | ||||
Liabilities, Noncontrolling Interests and Equity | ||||||||
Liabilities: | ||||||||
Mortgages and other debt payable | $ | 1,162,567 | $ | 1,176,297 | ||||
Bank credit facility | 137,000 | 146,000 | ||||||
Accounts payable and accrued expenses | 218,410 | 228,397 | ||||||
Deferred tax liabilities | 47,146 | 47,275 | ||||||
Total liabilities | 1,565,123 | 1,597,969 | ||||||
Commitments and contingencies | ||||||||
Noncontrolling interests in SHR’s operating partnership | 7,404 | 5,463 | ||||||
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 $103,704 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 $90,384 in the aggregate) | 87,064 | 87,064 | ||||||
8.25% Series C Cumulative Redeemable Preferred Stock ($0.01 par value per share; 3,827,727 shares issued and outstanding; liquidation preference $25.00 per share plus accrued distributions and $95,693 in the aggregate) | 92,489 | 92,489 | ||||||
Common stock ($0.01 par value per share; 350,000,000 shares of common stock authorized; 205,527,049 and 204,308,710 shares of common stock issued and outstanding) | 2,055 | 2,043 | ||||||
Additional paid-in capital | 1,710,267 | 1,730,535 | ||||||
Accumulated deficit | (1,244,216 | ) | (1,245,927 | ) | ||||
Accumulated other comprehensive loss | (44,896 | ) | (58,871 | ) | ||||
Total SHR’s shareholders’ equity | 702,758 | 707,328 | ||||||
Noncontrolling interests in consolidated affiliates | 86,022 | 95,657 | ||||||
Total equity | 788,780 | 802,985 | ||||||
Total liabilities, noncontrolling interests and equity | $ | 2,361,307 | $ | 2,406,417 | ||||
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)
Financial Highlights
Supplemental Financial Data
(in thousands, except per share information)
September 30, 2013 | ||||||||
Pro Rata Share | Consolidated | |||||||
Capitalization | ||||||||
Shares of common stock outstanding | 205,527 | 205,527 | ||||||
Operating partnership units outstanding | 853 | 853 | ||||||
Restricted stock units outstanding | 1,633 | 1,633 | ||||||
Combined shares and units outstanding | 208,013 | 208,013 | ||||||
Common stock price at end of period | $ | 8.68 | $ | 8.68 | ||||
Common equity capitalization | $ | 1,805,553 | $ | 1,805,553 | ||||
Preferred equity capitalization (at $25.00 face value) | 289,102 | 289,102 | ||||||
Consolidated debt | 1,299,567 | 1,299,567 | ||||||
Pro rata share of unconsolidated debt | 239,400 | — | ||||||
Pro rata share of consolidated debt | (133,042 | ) | — | |||||
Cash and cash equivalents | (79,801 | ) | (79,801 | ) | ||||
Total enterprise value | $ | 3,420,779 | $ | 3,314,421 | ||||
Net Debt / Total Enterprise Value | 38.8 | % | 36.8 | % | ||||
Preferred Equity / Total Enterprise Value | 8.4 | % | 8.7 | % | ||||
Common Equity / Total Enterprise Value | 52.8 | % | 54.5 | % | ||||
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)
Investments in Unconsolidated Affiliates
(in thousands)
We have a 36.4% and 50.0% ownership interest in the Hotel del Coronado hotel and the Fairmont Scottsdale Princess hotel, respectively. We account for these investments using the equity method of accounting.
Three Months Ended September 30, 2013 | Three Months Ended September 30, 2012 | |||||||||||||||||||||||
Hotel del Coronado | Fairmont Scottsdale Princess | Total | Hotel del Coronado | Fairmont Scottsdale Princess | Total | |||||||||||||||||||
Total revenues (100%) | $ | 47,279 | $ | 14,338 | $ | 61,617 | $ | 44,978 | $ | 10,607 | $ | 55,585 | ||||||||||||
Property EBITDA (100%) | $ | 18,667 | $ | (302 | ) | $ | 18,365 | $ | 14,560 | $ | (2,163 | ) | $ | 12,397 | ||||||||||
Equity in earnings (losses) of unconsolidated affiliates (SHR ownership) | ||||||||||||||||||||||||
Property EBITDA | $ | 6,790 | $ | (151 | ) | $ | 6,639 | $ | 4,994 | $ | (1,082 | ) | $ | 3,912 | ||||||||||
Depreciation and amortization | (1,896 | ) | (1,533 | ) | (3,429 | ) | (1,711 | ) | (1,774 | ) | (3,485 | ) | ||||||||||||
Interest expense | (1,950 | ) | (195 | ) | (2,145 | ) | (2,522 | ) | (191 | ) | (2,713 | ) | ||||||||||||
Other expenses, net | (205 | ) | (16 | ) | (221 | ) | (19 | ) | (5 | ) | (24 | ) | ||||||||||||
Income taxes | (339 | ) | — | (339 | ) | (74 | ) | — | (74 | ) | ||||||||||||||
Equity in earnings (losses) of unconsolidated affiliates | $ | 2,400 | $ | (1,895 | ) | $ | 505 | $ | 668 | $ | (3,052 | ) | $ | (2,384 | ) | |||||||||
EBITDA Contribution: | ||||||||||||||||||||||||
Equity in earnings (losses) of unconsolidated affiliates | $ | 2,400 | $ | (1,895 | ) | $ | 505 | $ | 668 | $ | (3,052 | ) | $ | (2,384 | ) | |||||||||
Depreciation and amortization | 1,896 | 1,533 | 3,429 | 1,711 | 1,774 | 3,485 | ||||||||||||||||||
Interest expense | 1,950 | 195 | 2,145 | 2,522 | 191 | 2,713 | ||||||||||||||||||
Income taxes | 339 | — | 339 | 74 | — | 74 | ||||||||||||||||||
EBITDA Contribution | $ | 6,585 | $ | (167 | ) | $ | 6,418 | $ | 4,975 | $ | (1,087 | ) | $ | 3,888 | ||||||||||
FFO Contribution: | ||||||||||||||||||||||||
Equity in earnings (losses) of unconsolidated affiliates | $ | 2,400 | $ | (1,895 | ) | $ | 505 | $ | 668 | $ | (3,052 | ) | $ | (2,384 | ) | |||||||||
Depreciation and amortization | 1,896 | 1,533 | 3,429 | 1,711 | 1,774 | 3,485 | ||||||||||||||||||
FFO Contribution | $ | 4,296 | $ | (362 | ) | $ | 3,934 | $ | 2,379 | $ | (1,278 | ) | $ | 1,101 | ||||||||||
Nine Months Ended September 30, 2013 | Nine Months Ended September 30, 2012 | |||||||||||||||||||||||
Hotel del Coronado | Fairmont Scottsdale Princess | Total | Hotel del Coronado | Fairmont Scottsdale Princess | Total | |||||||||||||||||||
Total revenues (100%) | $ | 115,367 | $ | 69,498 | $ | 184,865 | $ | 110,332 | $ | 56,735 | $ | 167,067 | ||||||||||||
Property EBITDA (100%) | $ | 38,487 | $ | 14,772 | $ | 53,259 | $ | 33,522 | $ | 9,743 | $ | 43,265 | ||||||||||||
Equity in earnings (losses) of unconsolidated affiliates (SHR ownership) | ||||||||||||||||||||||||
Property EBITDA | $ | 13,999 | $ | 7,386 | $ | 21,385 | $ | 11,498 | $ | 4,871 | $ | 16,369 | ||||||||||||
Depreciation and amortization | (5,647 | ) | (5,005 | ) | (10,652 | ) | (5,098 | ) | (5,321 | ) | (10,419 | ) | ||||||||||||
Interest expense | (6,384 | ) | (585 | ) | (6,969 | ) | (7,544 | ) | (589 | ) | (8,133 | ) | ||||||||||||
Other expenses, net | (228 | ) | (35 | ) | (263 | ) | (62 | ) | (44 | ) | (106 | ) | ||||||||||||
Income taxes | (276 | ) | — | (276 | ) | 293 | — | 293 | ||||||||||||||||
Equity in earnings (losses) of unconsolidated affiliates | $ | 1,464 | $ | 1,761 | $ | 3,225 | $ | (913 | ) | $ | (1,083 | ) | $ | (1,996 | ) | |||||||||
EBITDA Contribution | ||||||||||||||||||||||||
Equity in earnings (losses) of unconsolidated affiliates | $ | 1,464 | $ | 1,761 | $ | 3,225 | $ | (913 | ) | $ | (1,083 | ) | $ | (1,996 | ) | |||||||||
Depreciation and amortization | 5,647 | 5,005 | 10,652 | 5,098 | 5,321 | 10,419 | ||||||||||||||||||
Interest expense | 6,384 | 585 | 6,969 | 7,544 | 589 | 8,133 | ||||||||||||||||||
Income taxes | 276 | — | 276 | (293 | ) | — | (293 | ) | ||||||||||||||||
EBITDA Contribution | $ | 13,771 | $ | 7,351 | $ | 21,122 | $ | 11,436 | $ | 4,827 | $ | 16,263 | ||||||||||||
FFO Contribution | ||||||||||||||||||||||||
Equity in earnings (losses) of unconsolidated affiliates | $ | 1,464 | $ | 1,761 | $ | 3,225 | $ | (913 | ) | $ | (1,083 | ) | $ | (1,996 | ) | |||||||||
Depreciation and amortization | 5,647 | 5,005 | 10,652 | 5,098 | 5,321 | 10,419 | ||||||||||||||||||
FFO Contribution | $ | 7,111 | $ | 6,766 | $ | 13,877 | $ | 4,185 | $ | 4,238 | $ | 8,423 | ||||||||||||
Investments in Unconsolidated Affiliates (Continued)
(in thousands)
Debt | Interest Rate | Spread over LIBOR | Loan Amount | Maturity (a) | |||||||||||
Hotel del Coronado | |||||||||||||||
CMBS Mortgage and Mezzanine | 3.83 | % | 365 bp | $ | 475,000 | March 2018 | |||||||||
Cash and cash equivalents | (8,870 | ) | |||||||||||||
Net Debt | $ | 466,130 | |||||||||||||
Fairmont Scottsdale Princess | |||||||||||||||
CMBS Mortgage | 0.54 | % | 36 bp | $ | 133,000 | April 2015 | |||||||||
Cash and cash equivalents | (3,937 | ) | |||||||||||||
Net Debt | $ | 129,063 | |||||||||||||
(a) | Includes extension options. |
Caps | Effective Date | LIBOR Cap Rate | Notional Amount | Maturity | |||||||
Hotel del Coronado | |||||||||||
CMBS Mortgage and Mezzanine Loan Caps | March 2013 | 3.00 | % | $ | 475,000 | March 2015 | |||||
Fairmont Scottsdale Princess | |||||||||||
CMBS Mortgage Loan Cap | June 2011 | 4.00 | % | $ | 133,000 | December 2013 | |||||
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)
Leasehold Information
(in thousands)
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
Marriott Hamburg: | ||||||||||||||||
Property EBITDA | $ | 1,655 | $ | 1,508 | $ | 4,557 | $ | 4,404 | ||||||||
Revenue (a) | $ | 1,416 | $ | 1,175 | $ | 3,776 | $ | 3,505 | ||||||||
Lease expense | (1,202 | ) | (1,114 | ) | (3,584 | ) | (3,425 | ) | ||||||||
Less: Deferred gain on sale-leaseback | (52 | ) | (49 | ) | (154 | ) | (150 | ) | ||||||||
Adjusted lease expense | (1,254 | ) | (1,163 | ) | (3,738 | ) | (3,575 | ) | ||||||||
EBITDA contribution from leasehold | $ | 162 | $ | 12 | $ | 38 | $ | (70 | ) | |||||||
Security Deposit (b): | September 30, 2013 | December 31, 2012 | ||||||
Marriott Hamburg | $ | 2,570 | $ | 2,507 | ||||
(a) | For the three and nine months ended September 30, 2013 and 2012, Revenue for the Marriott Hamburg hotel represents lease revenue. |
(b) | The security deposit is recorded in prepaid expenses and other assets on the consolidated balance sheets. |
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)
Non-GAAP Financial Measures
We present five non-GAAP financial measures that we believe are useful to management and investors as key measures of our operating performance: Funds from Operations (FFO); FFO—Fully Diluted; Comparable FFO; Earnings Before Interest Expense, Taxes, Depreciation and Amortization (EBITDA); and Comparable EBITDA.
EBITDA represents net income (or loss) attributable to SHR common shareholders excluding: (i) interest expense, (ii) income taxes, including deferred income tax benefits and expenses applicable to our foreign subsidiaries and income taxes applicable to sale of assets; (iii) depreciation and amortization; and (iv) preferred stock dividends. EBITDA also excludes interest expense, income taxes and depreciation and amortization of our unconsolidated affiliates. EBITDA is presented on a full participation basis, which means we have assumed conversion of all redeemable noncontrolling interests of our operating partnership into our common stock. We believe this treatment of noncontrolling interests provides useful information for management and our investors and appropriately considers our current capital structure. We also present Comparable EBITDA, which eliminates the effect of realizing deferred gains on our sale leasebacks, as well as the effect of gains or losses on sales of assets, early extinguishment of debt, impairment losses, foreign currency exchange gains or losses and certain other charges that are highly variable from year to year. We believe EBITDA and Comparable EBITDA are useful to management and investors in evaluating our operating performance because they provide management and investors with an indication of our ability to incur and service debt, to satisfy general operating expenses, to make capital expenditures and to fund other cash needs or reinvest cash into our business. We also believe they help management and investors meaningfully evaluate and compare the results of our operations from period to period by removing the impact of our asset base (primarily depreciation and amortization) from our operating results. Our management also uses EBITDA and Comparable EBITDA as measures in determining the value of acquisitions and dispositions.
We compute FFO in accordance with standards established by the National Association of Real Estate Investment Trusts, or NAREIT, 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 certain other charges that are highly variable from year to year. We believe that the presentation of FFO, FFO—Fully Diluted and Comparable FFO provides useful information to management and investors regarding our results of operations because they are measures of our ability to fund capital expenditures and expand our business. In addition, FFO is widely used in the real estate industry to measure operating performance without regard to items such as depreciation and amortization. We also present Comparable FFO per diluted share as a non-GAAP measure of our performance. We calculate Comparable FFO per diluted share for a given operating period as our Comparable FFO (as defined above) divided by the weighted average of fully diluted shares outstanding, excluding shares related to the JW Marriott Essex House Hotel put option. Dilutive securities may include shares granted under share-based compensation plans and operating partnership units. No effect is shown for securities that are anti-dilutive.
We caution investors that amounts presented in accordance with our definitions of FFO, FFO—Fully Diluted, Comparable FFO, EBITDA, and Comparable EBITDA may not be comparable to similar measures disclosed by other companies, since not all companies calculate these non-GAAP measures in the same manner. FFO, FFO—Fully Diluted, Comparable FFO, EBITDA, and Comparable EBITDA should not be considered as an alternative measure of our net income (or loss) or operating performance. FFO, FFO—Fully Diluted, Comparable FFO, EBITDA, and Comparable EBITDA may include funds that may not be available for our discretionary use due to functional requirements to conserve funds for capital expenditures and property acquisitions and other commitments and uncertainties. Although we believe that FFO, FFO—Fully Diluted, Comparable FFO, EBITDA, and Comparable EBITDA can enhance your understanding of our financial condition and results of operations, these non-GAAP financial measures, when viewed individually, are not necessarily a better indicator of any trend as compared to comparable GAAP measures such as net income (or loss) attributable to SHR common shareholders. In addition, you should be aware that adverse economic and market conditions might negatively impact our cash flow. We have provided a quantitative reconciliation of FFO, FFO—Fully Diluted, Comparable FFO, EBITDA, and Comparable EBITDA to the most directly comparable GAAP financial performance measure, which is net income (or loss) attributable to SHR common shareholders.
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)
Reconciliation of Net Income (Loss) Attributable to SHR Common Shareholders to EBITDA and Comparable EBITDA
(in thousands)
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
Net income (loss) attributable to SHR common shareholders | $ | 3,760 | $ | (8,557 | ) | $ | (16,414 | ) | $ | (43,071 | ) | |||||
Depreciation and amortization | 26,244 | 25,649 | 80,459 | 76,416 | ||||||||||||
Interest expense | 21,106 | 19,942 | 63,871 | 58,627 | ||||||||||||
Income taxes | (430 | ) | (600 | ) | 1,121 | 215 | ||||||||||
Noncontrolling interests | 29 | (17 | ) | (22 | ) | (126 | ) | |||||||||
Adjustments from consolidated affiliates | (3,912 | ) | (1,879 | ) | (11,015 | ) | (4,382 | ) | ||||||||
Adjustments from unconsolidated affiliates | 5,903 | 7,036 | 17,936 | 20,606 | ||||||||||||
Preferred shareholder dividends | 6,042 | 6,042 | 18,125 | 18,125 | ||||||||||||
EBITDA | 58,742 | 47,616 | 154,061 | 126,410 | ||||||||||||
Realized portion of deferred gain on sale-leaseback | (52 | ) | (49 | ) | (154 | ) | (150 | ) | ||||||||
Loss on sale of assets—continuing operations | 1,028 | — | 755 | — | ||||||||||||
Loss on sale of assets—adjustments from consolidated affiliates | (370 | ) | — | (370 | ) | — | ||||||||||
Impairment losses and other charges | 728 | — | 728 | — | ||||||||||||
Foreign currency exchange loss (gain)—continuing operations (a) | 9 | 996 | (177 | ) | 1,169 | |||||||||||
Foreign currency exchange loss—discontinued operations (a) | — | — | — | 535 | ||||||||||||
Adjustment for Value Creation Plan | — | (2,013 | ) | — | 2,759 | |||||||||||
Comparable EBITDA | $ | 60,085 | $ | 46,550 | $ | 154,843 | $ | 130,723 | ||||||||
(a) | Foreign currency exchange gains or losses applicable to third-party and inter-company debt and certain balance sheet items held by foreign subsidiaries. |
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)
Reconciliation of Net Income (Loss) Attributable to SHR Common Shareholders to
Funds From Operations (FFO), FFO—Fully Diluted and Comparable FFO
(in thousands, except per share data)
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
Net income (loss) attributable to SHR common shareholders | $ | 3,760 | $ | (8,557 | ) | $ | (16,414 | ) | $ | (43,071 | ) | |||||
Depreciation and amortization | 26,244 | 25,649 | 80,459 | 76,416 | ||||||||||||
Corporate depreciation | (125 | ) | (260 | ) | (383 | ) | (789 | ) | ||||||||
Loss on sale of assets—continuing operations | 1,028 | — | 755 | — | ||||||||||||
Realized portion of deferred gain on sale-leaseback | (52 | ) | (49 | ) | (154 | ) | (150 | ) | ||||||||
Noncontrolling interests adjustments | (25 | ) | (121 | ) | (277 | ) | (374 | ) | ||||||||
Adjustments from consolidated affiliates | (2,269 | ) | (859 | ) | (5,565 | ) | (2,185 | ) | ||||||||
Adjustments from unconsolidated affiliates | 3,429 | 3,792 | 10,653 | 11,335 | ||||||||||||
FFO | 31,990 | 19,595 | 69,074 | 41,182 | ||||||||||||
Redeemable noncontrolling interests | 53 | 104 | 255 | 248 | ||||||||||||
FFO—Fully Diluted | 32,043 | 19,699 | 69,329 | 41,430 | ||||||||||||
Impairment losses and other charges | 728 | — | 728 | — | ||||||||||||
Non-cash mark to market of interest rate swaps | (2,977 | ) | (1,688 | ) | (9,121 | ) | (4,405 | ) | ||||||||
Foreign currency exchange loss (gain)—continuing operations (a) | 9 | 996 | (177 | ) | 1,169 | |||||||||||
Foreign currency exchange loss—discontinued operations (a) | — | — | — | 535 | ||||||||||||
Adjustment for Value Creation Plan | — | (2,013 | ) | — | 2,759 | |||||||||||
Comparable FFO | $ | 29,803 | $ | 16,994 | $ | 60,759 | $ | 41,488 | ||||||||
Comparable FFO per fully diluted share | $ | 0.14 | $ | 0.08 | $ | 0.29 | $ | 0.21 | ||||||||
Weighted average diluted shares (b) | 209,722 | 208,696 | 209,125 | 201,050 | ||||||||||||
(a) | Foreign currency exchange gains or losses applicable to third-party and inter-company debt and certain balance sheet items held by foreign subsidiaries. |
(b) | Excludes shares related to the JW Marriott Essex House Hotel put option. |
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)
Debt Summary
(dollars in thousands)
Debt | Interest Rate | Spread (a) | Loan Amount | Maturity (b) | |||||||
North Beach Venture | 5.00 | % | Fixed | $ | 1,476 | January 2014 | |||||
Marriott London Grosvenor Square (c) | 3.12 | % | 260 bp (c) | 113,367 | October 2014 | ||||||
Bank credit facility | 3.18 | % | 300 bp | 137,000 | June 2015 | ||||||
Four Seasons Washington, D.C. | 3.33 | % | 315 bp | 130,000 | July 2016 | ||||||
Westin St. Francis | 6.09 | % | Fixed | 209,588 | June 2017 | ||||||
Fairmont Chicago | 6.09 | % | Fixed | 93,124 | June 2017 | ||||||
JW Marriott Essex House Hotel | 4.75 | % | 400 bp | 186,278 | September 2017 | ||||||
Hyatt Regency La Jolla (d) | 4.50% / 10.00% | 400 bp / Fixed | 89,367 | December 2017 | |||||||
InterContinental Miami | 3.68 | % | 350 bp | 85,000 | July 2018 | ||||||
Loews Santa Monica Beach Hotel | 4.03 | % | 385 bp | 109,500 | July 2018 | ||||||
InterContinental Chicago | 5.61 | % | Fixed | 144,867 | August 2021 | ||||||
$ | 1,299,567 | ||||||||||
(a) | Spread over LIBOR (0.18% at September 30, 2013). Interest on the JW Marriott Essex House Hotel loan is subject to a 0.75% LIBOR floor. Interest on the Hyatt Regency La Jolla loan is subject to a 0.50% LIBOR floor. |
(b) | Includes extension options. |
(c) | Principal balance of £70,040,000 at September 30, 2013. On August 7, 2013, the Company entered into an amendment to the mortgage loan. The amendment extended the maturity of the loan to October 2014 and waived the July 2013 and subsequent principal payments through the extended term. Pursuant to the amendment, the spread over GBP LIBOR increases in steps during the extension period from GBP LIBOR plus 2.10% in August 2013 to GBP LIBOR plus 4.25% in April 2014. The spread in the table is the spread as of September 30, 2013. |
(d) | Interest on $72,000,000 is payable at LIBOR plus 4.00%, subject to a 0.50% LIBOR floor, and interest on $17,367,000 is payable at a fixed rate of 10.00%. |
Domestic and European Interest Rate Swaps
Swap Effective Date | Fixed Pay Rate Against LIBOR | Notional Amount | Maturity | ||||||
February 2010 | 4.90 | % | $ | 100,000 | September 2014 | ||||
February 2010 | 4.96 | % | 100,000 | December 2014 | |||||
December 2010 | 5.23 | % | 100,000 | December 2015 | |||||
February 2011 | 5.27 | % | 100,000 | February 2016 | |||||
5.09 | % | $ | 400,000 | ||||||
Swap Effective Date | Fixed Pay Rate Against GBP LIBOR | Notional Amount | Maturity | ||||||||
October 2007 | 5.72 | % | £ | 69,010 | October 2013 | ||||||
Future scheduled debt principal payments (including extension options) are as follows:
Years ending December 31, | Amount | |||
2013 | $ | 948 | ||
2014 | 119,098 | |||
2015 | 143,029 | |||
2016 | 139,783 | |||
2017 | 577,550 | |||
Thereafter | 319,159 | |||
$ | 1,299,567 | |||
Percent of fixed rate debt including U.S. and European swaps | 75.3 | % | ||
Weighted average interest rate including U.S. and European swaps (e) | 6.60 | % | ||
Weighted average maturity of fixed rate debt (debt with maturity of greater than one year) | 3.79 | |||
(e) Excludes the amortization of deferred financing costs and the amortization of the interest rate swap costs.