Exhibit 99.1
UNAUDITED PRO FORMA FINANCIAL INFORMATION
On March 31, 2014, Strategic Hotel Funding, L.L.C., the operating partnership of Strategic Hotels & Resorts, Inc. ("SHR") and certain of its direct and indirect wholly-owned subsidiaries closed on the sale of the Marriott London Grosvenor Square hotel (the "Grosvenor Disposition"). SHR sold the 237-room Marriott London Grosvenor Square hotel for £125.15 million (approximately $207.7 million). The following unaudited pro forma financial information gives effect to the Grosvenor Disposition.
The historical financial information for the years ended December 31, 2012 and 2011 has been derived from SHR's audited financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2013.
The unaudited pro forma statements of operations data for the years ended December 31, 2012 and 2011 are presented as if the Grosvenor Disposition had occurred on January 1, 2011.
The unaudited pro forma financial information is presented for informational purposes only and does not purport to represent what SHR's results of operations would actually have been if the transaction had in fact occurred on the earlier date discussed above. It also does not project or forecast SHR's consolidated results of operation for any future date or period.
Strategic Hotels & Resorts, Inc.
Unaudited Pro Forma Consolidated Statement of Operations
For the Year Ended December 31, 2012
(in thousands, except per share amounts)
|
| | | | | | | | | | | | |
| | Strategic Hotels & Resorts, Inc. Historical Consolidated | | Grosvenor Disposition (1) | | Strategic Hotels & Resorts, Inc. Pro Forma Consolidated | |
| Revenues: | | | | | | |
| Rooms | $ | 429,689 |
| | $ | (28,384 | ) | | $ | 401,305 |
| |
| Food and beverage | 264,893 |
| | (7,595 | ) | | 257,298 |
| |
| Other hotel operating revenue | 75,857 |
| | (2,272 | ) | | 73,585 |
| |
| Lease revenue | 4,778 |
| | | | 4,778 |
| |
| Total revenues | 775,217 |
| | (38,251 | ) | | 736,966 |
| |
Operating Costs and Expenses: | | | | | | |
| Rooms | 121,794 |
| | (5,701 | ) | | 116,093 |
| |
| Food and beverage | 193,431 |
| | (3,325 | ) | | 190,106 |
| |
| Other departmental expenses | 200,219 |
| | (7,065 | ) | | 193,154 |
| |
| Management fees | 23,085 |
| | (2,353 | ) | | 20,732 |
| |
| Other hotel expenses | 53,117 |
| | (2,322 | ) | | 50,795 |
| |
| Lease expense | 4,580 |
| | | | 4,580 |
| |
| Depreciation and amortization | 99,458 |
| | (8,799 | ) | | 90,659 |
| |
| Impairment losses and other charges | 18,406 |
| | | | 18,406 |
| |
| Corporate expenses | 31,578 |
| | (480 | ) | | 31,098 |
| |
| Total operating costs and expenses | 745,668 |
| | (30,045 | ) | | 715,623 |
| |
| Operating income | 29,549 |
| | (8,206 | ) | | 21,343 |
| |
| Interest expense | (75,489 | ) | | 5,178 |
| | (70,311 | ) | |
| Interest income | 213 |
| | (6 | ) | | 207 |
| |
| Equity in losses of unconsolidated affiliates | (13,485 | ) | | | | (13,485 | ) | |
| Foreign currency exchange loss | (1,258 | ) | | 11 |
| | (1,247 | ) | |
| Other income, net | 1,820 |
| | | | 1,820 |
| |
| Loss before income taxes | (58,650 | ) | | (3,023 | ) | | (61,673 | ) | |
| Income tax expense | (800 | ) | | 787 |
| | (13 | ) | |
| Loss from continuing operations | $ | (59,450 | ) | | $ | (2,236 | ) | | $ | (61,686 | ) | |
| | | | | | | |
| Amounts Attributable to SHR: | | | | | | |
| Loss from continuing operations | $ | (56,495 | ) | | $ | (2,227 | ) | | $ | (58,722 | ) | |
| | | | | | | |
| Loss from continuing operations attributable to SHR common shareholders per share: | | | | | | |
| Basic: | $ | (0.40 | ) | | | | $ | (0.41 | ) | (2) |
| Diluted: | $ | (0.40 | ) | | | | $ | (0.41 | ) | (2) |
Notes to Unaudited Pro Forma Consolidated Statement of Operations
For the Year Ended December 31, 2012
| |
| 1. | Grosvenor Disposition - On March 31, 2014, SHR disposed of its ownership interest in the Marriott London Grosvenor Square hotel. The consolidated accounts related to the Marriott London Grosvenor Square hotel are reflected as pro forma adjustments to eliminate accounts from continuing operations. There are no pro forma adjustments for nonrecurring items related to this transaction, including the anticipated gain on the Grosvenor Disposition, which was recognized in discontinued operations in the first quarter of 2014. |
| |
| 2. | Loss From Continuing Operations Attributable to SHR Common Shareholders Per Share Calculation - The following table calculates the pro forma weighted average basic and diluted loss from continuing operations attributable to SHR common shareholders per share: |
|
| | | | | | | | |
| | | (In thousands, except per share amounts) |
| | | Basic | | Diluted |
| Historical and pro forma basic and diluted weighted average shares outstanding for the year ended December 31, 2012 | | 201,109 |
| | 201,109 |
|
| Pro forma loss from continuing operations attributable to SHR for the year ended December 31, 2012 | | $ | (58,722 | ) | | $ | (58,722 | ) |
| Historical preferred shareholder dividend | | (24,166 | ) | | (24,166 | ) |
| Pro forma loss from continuing operations attributable to SHR common shareholders for the year ended December 31, 2012 | | $ | (82,888 | ) | | $ | (82,888 | ) |
| Pro forma loss from continuing operations attributable to SHR common shareholders per share for the year ended December 31, 2012 - basic and diluted | | $ | (0.41 | ) | | $ | (0.41 | ) |
Strategic Hotels & Resorts, Inc.
Unaudited Pro Forma Consolidated Statement of Operations
For the Year Ended December 31, 2011
(in thousands, except per share amounts)
|
| | | | | | | | | | | | |
| | Strategic Hotels & Resorts, Inc. Historical Consolidated | | Grosvenor Disposition (1) | | Strategic Hotels & Resorts, Inc. Pro Forma Consolidated | |
| Revenues: | | | | | | |
| Rooms | $ | 392,058 |
| | $ | (26,460 | ) | | $ | 365,598 |
| |
| Food and beverage | 257,880 |
| | (7,665 | ) | | 250,215 |
| |
| Other hotel operating revenue | 74,686 |
| | (2,389 | ) | | 72,297 |
| |
| Lease revenue | 5,422 |
| | | | 5,422 |
| |
| Total revenues | 730,046 |
| | (36,514 | ) | | 693,532 |
| |
Operating Costs and Expenses: | | | | | | |
| Rooms | 111,062 |
| | (5,457 | ) | | 105,605 |
| |
| Food and beverage | 185,628 |
| | (3,736 | ) | | 181,892 |
| |
| Other departmental expenses | 195,955 |
| | (6,824 | ) | | 189,131 |
| |
| Management fees | 22,705 |
| | (2,160 | ) | | 20,545 |
| |
| Other hotel expenses | 50,038 |
| | (2,525 | ) | | 47,513 |
| |
| Lease expense | 4,865 |
| | | | 4,865 |
| |
| Depreciation and amortization | 106,695 |
| | (10,355 | ) | | 96,340 |
| |
| Corporate expenses | 39,539 |
| | (496 | ) | | 39,043 |
| |
| Total operating costs and expenses | 716,487 |
| | (31,553 | ) | | 684,934 |
| |
| Operating income | 13,559 |
| | (4,961 | ) | | 8,598 |
| |
| Interest expense | (86,447 | ) | | 10,314 |
| | (76,133 | ) | |
| Interest income | 172 |
| | (8 | ) | | 164 |
| |
| Loss on early extinguishment of debt | (1,237 | ) | | | | (1,237 | ) | |
| Loss on early termination of derivative financial information | (29,242 | ) | | | | (29,242 | ) | |
| Equity in losses of unconsolidated affiliates | (9,215 | ) | | | | (9,215 | ) | |
| Foreign currency exchange loss | 821 |
| | 9 |
| | 830 |
| |
| Other income, net | 5,767 |
| | | | 5,767 |
| |
| Loss before income taxes | (105,822 | ) | | 5,354 |
| | (100,468 | ) | |
| Income tax expense | (656 | ) | | 521 |
| | (135 | ) | |
| Loss from continuing operations | $ | (106,478 | ) | | $ | 5,875 |
| | $ | (100,603 | ) | |
| | | | | | | |
| Amounts Attributable to SHR: | | | | | | |
| Loss from continuing operations | $ | (106,365 | ) | | $ | 5,848 |
| | $ | (100,517 | ) | |
| | | | | | | |
| Loss from continuing operations attributable to SHR common shareholders per share: | | | | | | |
| Basic: | $ | (0.70 | ) | | | | $ | (0.67 | ) | (2) |
| Diluted: | $ | (0.70 | ) | | | | $ | (0.67 | ) | (2) |
Notes to Unaudited Pro Forma Consolidated Statement of Operations
For the Year Ended December 31, 2011
| |
| 1. | Grosvenor Disposition - On March 31, 2014, SHR disposed of its ownership interest in the Marriott London Grosvenor Square hotel. The consolidated accounts related to the Marriott London Grosvenor Square hotel are reflected as pro forma adjustments to eliminate accounts from continuing operations. There are no pro forma adjustments for nonrecurring items related to this transaction, including the anticipated gain on the Grosvenor Disposition, which was recognized in discontinued operations in the first quarter of 2014. |
| |
| 2. | Loss From Continuing Operations Attributable to SHR Common Shareholders Per Share Calculation - The following table calculates the pro forma weighted average basic and diluted loss from continuing operations attributable to SHR common shareholders per share: |
|
| | | | | | | | |
| | | (In thousands, except per share amounts) |
| | | Basic | | Diluted |
| Historical and pro forma basic and diluted weighted average shares outstanding for the year ended December 31, 2011 | | 176,576 |
| | 176,576 |
|
| Pro forma loss from continuing operations attributable to SHR for the year ended December 31, 2011 | | $ | (100,517 | ) | | $ | (100,517 | ) |
| Historical preferred shareholder dividend | | (18,482 | ) | | (18,482 | ) |
| Pro forma loss from continuing operations attributable to SHR common shareholders for the year ended December 31, 2011 | | $ | (118,999 | ) | | $ | (118,999 | ) |
| Pro forma loss from continuing operations attributable to SHR common shareholders per share for the year ended December 31, 2011 - basic and diluted | | $ | (0.67 | ) | | $ | (0.67 | ) |
