Exhibit 99.2
Strategic Hotels & Resorts, Inc.
Supplemental Financial Information
June 30, 2015
Supplemental Financial Information | ||
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR) | June 30, 2015 |
TABLE OF CONTENTS
PAGE | |
CORPORATE INFORMATION | |
The Company | |
Board of Directors | |
Officers | |
Equity Research Coverage | |
FINANCIAL HIGHLIGHTS | |
Supplemental Financial Data | |
Consolidated Statements of Operations | |
Consolidated Balance Sheets | |
Discontinued Operations | |
Investments in Unconsolidated Affiliates | |
Leasehold Information | |
Non-GAAP Financial Measures | |
Reconciliation of Net Income Attributable to SHR Common Shareholders to EBITDA and Comparable EBITDA | |
Reconciliation of Net Income Attributable to SHR Common Shareholders to Funds From Operations (FFO) Attributable to SHR Common Shareholders, FFO—Fully Diluted and Comparable FFO | |
Debt Summary | |
PORTFOLIO DATA | |
Portfolio at June 30, 2015 | |
Seasonality by Geographic Region | |
Operating Statistics by Geographic Region | |
Selected Financial and Operating Information by Property | |
Reconciliation of Property EBITDA to EBITDA | |
Reconciliation of Property EBITDA to Comparable EBITDA | |
2015 Guidance |
Supplemental Financial Information | ||
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR) | June 30, 2015 |
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 primarily in desirable United States locations. Our portfolio is currently made up of 18 properties totaling 8,199 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:
38
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
Senior Vice President, Capital Markets, Acquisitions and Treasurer
(312) 658-5000
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Supplemental Financial Information | ||
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR) | June 30, 2015 |
Board of Directors
Raymond L. Gellein, Jr.
Chairman of the Board, Chief Executive Officer and President
Sheli Z. Rosenberg
Lead Independent Director
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
David W. Johnson
Director
Richard D. Kincaid
Director
Sir David M.C. Michels
Director
Eugene F. Reilly
Director
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Supplemental Financial Information | ||
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR) | June 30, 2015 |
Officers
Raymond L. Gellein, Jr.
President and Chief Executive Officer
Diane M. Morefield
Executive Vice President, Chief Financial Officer (Principal Financial and Accounting Officer)
Richard J. Moreau
Executive Vice President, Chief Operating Officer
Paula C. Maggio
Executive Vice President, Secretary & General Counsel
John K.T. Barrett
Senior Vice President, Asset Management
Thomas G. Healy
Senior Vice President, Asset Management
David R. Hogin, Jr.
Senior Vice President, Asset Management
Robert T. McAllister
Senior Vice President, Tax
Patricia A. Needham
Senior Vice President, Legal
Eric D. Hassberger
Senior Vice President, Asset Management and Acquisitions
Jonathan P. Stanner
Senior Vice President, Capital Markets, Acquisitions and Treasurer
Gregory A. Brenner
Vice President, Controller
Carly P. Edgar
Vice President, Asset Management
James L. Porter
Vice President, Internal Audit
George T. Stowers
Vice President, Design and Construction
Bryce D. White
Vice President, Information Technology
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Supplemental Financial Information | ||
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR) | June 30, 2015 |
Equity Research Coverage
Firm | Analyst | Telephone | ||
Bank of America Merrill Lynch | Andrew Didora | (646) 855-2924 | ||
Deutsche Bank North America | Chris Woronka | (212) 250-4486 | ||
Green Street Advisors | Lukas Hartwich | (949) 640-8780 | ||
Evercore ISI | Rich Hightower | (212) 752-0886 | ||
JMP Securities | Robert LaFleur | (415) 835-8944 | ||
J.P. Morgan Securities | Joseph Greff | (212) 622-0548 | ||
Raymond James & Associates | William Crow | (727) 567-2594 | ||
Wells Fargo Securities, LLC | Jeffrey Donnelly | (617) 603-4262 | ||
Credit Suisse | Ian Weissman | (212) 538-6889 | ||
RBC Capital Markets | Wes Golladay | (440) 715-2650 | ||
Canaccord Genuity Inc. (US) | Ryan Meliker | (212) 389-8094 |
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.
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Supplemental Financial Information | ||
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR) | June 30, 2015 |
Financial Highlights
Supplemental Financial Data
(in thousands, except per share information)
June 30, 2015 | ||||||||
Pro Rata Share | Consolidated | |||||||
Capitalization | ||||||||
Shares of common stock outstanding | 275,495 | 275,495 | ||||||
Operating partnership units outstanding | 794 | 794 | ||||||
Restricted stock units outstanding | 1,205 | 1,205 | ||||||
Combined shares and units outstanding | 277,494 | 277,494 | ||||||
Common stock price at end of period | $ | 12.12 | $ | 12.12 | ||||
Common equity capitalization | $ | 3,363,227 | $ | 3,363,227 | ||||
Consolidated debt | 1,805,618 | 1,805,618 | ||||||
Pro rata share of consolidated debt | (110,250 | ) | — | |||||
Cash and cash equivalents | (98,586 | ) | (98,586 | ) | ||||
Total enterprise value | $ | 4,960,009 | $ | 5,070,259 | ||||
Net Debt / Total Enterprise Value | 32.2 | % | 33.7 | % | ||||
Common Equity / Total Enterprise Value | 67.8 | % | 66.3 | % |
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Supplemental Financial Information | ||
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR) | Three and Six Months Ended June 30, 2015 and 2014 |
Consolidated Statements of Operations
(in thousands, except per share data)
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
Revenues: | ||||||||||||||||
Rooms | $ | 186,377 | $ | 148,874 | $ | 349,241 | $ | 251,974 | ||||||||
Food and beverage | 134,523 | 100,028 | 257,992 | 170,045 | ||||||||||||
Other hotel operating revenue | 34,989 | 25,942 | 72,896 | 46,181 | ||||||||||||
Lease revenue | 1,013 | 1,319 | 2,044 | 2,618 | ||||||||||||
Total revenues | 356,902 | 276,163 | 682,173 | 470,818 | ||||||||||||
Operating Costs and Expenses: | ||||||||||||||||
Rooms | 51,072 | 41,268 | 98,937 | 74,975 | ||||||||||||
Food and beverage | 88,245 | 67,077 | 171,319 | 121,680 | ||||||||||||
Other departmental expenses | 86,626 | 66,238 | 171,350 | 119,817 | ||||||||||||
Management fees | 12,423 | 9,241 | 23,862 | 15,019 | ||||||||||||
Other hotel expenses | 19,842 | 15,572 | 35,455 | 31,250 | ||||||||||||
Lease expense | 1,017 | 1,260 | 2,051 | 2,518 | ||||||||||||
Depreciation and amortization | 40,331 | 28,058 | 77,995 | 50,263 | ||||||||||||
Impairment losses | 10,401 | — | 10,401 | — | ||||||||||||
Corporate expenses | 6,441 | 7,198 | 14,709 | 14,391 | ||||||||||||
Total operating costs and expenses | 316,398 | 235,912 | 606,079 | 429,913 | ||||||||||||
Operating income | 40,504 | 40,251 | 76,094 | 40,905 | ||||||||||||
Interest expense | (20,709 | ) | (19,587 | ) | (43,494 | ) | (37,861 | ) | ||||||||
Interest income | 16 | 50 | 117 | 77 | ||||||||||||
Loss on early extinguishment of debt | (34,211 | ) | — | (34,211 | ) | — | ||||||||||
Equity in earnings of unconsolidated affiliates | — | 826 | — | 5,271 | ||||||||||||
Foreign currency exchange gain (loss) | 40 | (8 | ) | (76 | ) | (6 | ) | |||||||||
Gain on consolidation of affiliates | — | 65,349 | — | 143,466 | ||||||||||||
Other income, net | 40,465 | 795 | 40,308 | 1,218 | ||||||||||||
Income before income taxes and discontinued operations | 26,105 | 87,676 | 38,738 | 153,070 | ||||||||||||
Income tax expense | (2,452 | ) | (207 | ) | (2,671 | ) | (246 | ) | ||||||||
Income from continuing operations | 23,653 | 87,469 | 36,067 | 152,824 | ||||||||||||
Income from discontinued operations, net of tax | — | 604 | — | 159,039 | ||||||||||||
Net Income | 23,653 | 88,073 | 36,067 | 311,863 | ||||||||||||
Net income attributable to the noncontrolling interests in SHR's operating partnership | (67 | ) | (281 | ) | (104 | ) | (1,130 | ) | ||||||||
Net (income) loss attributable to the noncontrolling interests in consolidated affiliates | (16,888 | ) | 217 | (13,454 | ) | 4,258 | ||||||||||
Net Income Attributable to SHR | 6,698 | 88,009 | 22,509 | 314,991 | ||||||||||||
Preferred shareholder dividends | — | (7,169 | ) | — | (16,993 | ) | ||||||||||
Net Income Attributable to SHR Common Shareholders | $ | 6,698 | $ | 80,840 | $ | 22,509 | $ | 297,998 | ||||||||
Basic Income Per Common Share: | ||||||||||||||||
Income from continuing operations attributable to SHR common shareholders | $ | 0.02 | $ | 0.36 | $ | 0.08 | $ | 0.65 | ||||||||
Income from discontinued operations attributable to SHR common shareholders | — | — | — | 0.74 | ||||||||||||
Net income attributable to SHR common shareholders | $ | 0.02 | $ | 0.36 | $ | 0.08 | $ | 1.39 | ||||||||
Weighted average shares of common stock outstanding | 276,380 | 222,013 | 257,056 | 214,450 | ||||||||||||
Diluted Income Per Common Share: | ||||||||||||||||
Income from continuing operations attributable to SHR common shareholders | $ | 0.02 | $ | 0.35 | $ | 0.07 | $ | 0.60 | ||||||||
Income from discontinued operations attributable to SHR common shareholders | — | — | — | 0.70 | ||||||||||||
Net income attributable to SHR common shareholders | $ | 0.02 | $ | 0.35 | $ | 0.07 | $ | 1.30 | ||||||||
Weighted average shares of common stock outstanding | 278,383 | 233,463 | 284,208 | 225,900 |
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Supplemental Financial Information | ||
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR) | June 30, 2015 and December 31, 2014 |
Consolidated Balance Sheets
(in thousands, except share data)
June 30, 2015 | December 31, 2014 | |||||||
Assets | ||||||||
Investment in hotel properties, net | $ | 3,276,411 | $ | 2,828,400 | ||||
Goodwill | 21,629 | 38,128 | ||||||
Intangible assets, net of accumulated amortization of $11,783 and $7,288 | 93,936 | 94,324 | ||||||
Investment in unconsolidated affiliates | 22,850 | 22,850 | ||||||
Cash and cash equivalents | 98,586 | 442,613 | ||||||
Restricted cash and cash equivalents | 77,790 | 81,510 | ||||||
Accounts receivable, net of allowance for doubtful accounts of $688 and $492 | 71,486 | 51,382 | ||||||
Deferred financing costs, net of accumulated amortization of $8,203 and $7,814 | 14,580 | 11,440 | ||||||
Deferred tax assets | 1,419 | 1,729 | ||||||
Prepaid expenses and other assets | 56,727 | 46,781 | ||||||
Total assets | $ | 3,735,414 | $ | 3,619,157 | ||||
Liabilities, Noncontrolling Interests and Equity | ||||||||
Liabilities: | ||||||||
Mortgages payable, net of discount | $ | 1,460,637 | $ | 1,705,778 | ||||
Credit facility, including an unsecured term loan of $300,000 and $0 | 344,000 | — | ||||||
Accounts payable and accrued expenses | 234,306 | 224,505 | ||||||
Preferred stock redemption liability | — | 90,384 | ||||||
Distributions payable | — | 104 | ||||||
Deferred tax liabilities | 46,117 | 46,137 | ||||||
Total liabilities | 2,085,060 | 2,066,908 | ||||||
Commitments and contingencies | ||||||||
Noncontrolling interests in SHR’s operating partnership | 9,619 | 10,500 | ||||||
Equity: | ||||||||
SHR’s shareholders’ equity: | ||||||||
Common stock ($0.01 par value per share; 350,000,000 shares of common stock authorized; 275,494,707 and 267,435,799 shares of common stock issued and outstanding) | 2,755 | 2,674 | ||||||
Additional paid-in capital | 2,451,209 | 2,348,284 | ||||||
Accumulated deficit | (867,960 | ) | (890,469 | ) | ||||
Accumulated other comprehensive loss | (7,586 | ) | (13,032 | ) | ||||
Total SHR’s shareholders’ equity | 1,578,418 | 1,447,457 | ||||||
Noncontrolling interests in consolidated affiliates | 62,317 | 94,292 | ||||||
Total equity | 1,640,735 | 1,541,749 | ||||||
Total liabilities, noncontrolling interests and equity | $ | 3,735,414 | $ | 3,619,157 |
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Supplemental Financial Information | ||
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR) | Three and Six Months Ended June 30, 2015 and 2014 |
Disposition of Hotel Properties
2015 Dispositions
Effective January 1, 2015, the Company adopted new accounting guidance which amends the requirements for reporting discontinued operations. Under the guidance, only disposals that represent a strategic shift that has (or will have) a major effect on the Company's results of operations would qualify as discontinued operations.
On May 21, 2015, the Company, along with its joint venture partner, sold the Hyatt Regency La Jolla hotel for sales proceeds of approximately $118,293,000. The $89,228,000 mortgage loan secured by the hotel was repaid at the time of closing. A $40,613,000 gain on the sale was recorded in other income, net in the condensed consolidated statements of operations for the three and six months ended June 30, 2015. The portion of the gain attributable to the joint venture partner was $16,649,000, which is reflected in net income attributable to the noncontrolling interests in consolidated affiliates in the condensed consolidated statements of operations for the three and six months ended June 30, 2015. The disposition of the Hyatt Regency La Jolla hotel does not represent a strategic shift that has had a major effect on the Company's results of operations; therefore, the hotel's results of operations are included in continuing operations for all periods presented.
2014 Dispositions
During the six months ended June 30, 2014, the Company sold the following hotels:
Hotel | Location | Date Sold | Sales Proceeds | Gain on sale | ||||||||
Four Seasons Punta Mita Resort and La Solana land parcel | Punta Mita, Mexico | February 28, 2014 | $ | 206,867,000 | $ | 63,879,000 | ||||||
Marriott London Grosvenor Square | London, England | March 31, 2014 | $ | 209,407,000 | (a) | $ | 92,889,000 |
(a) | There was an outstanding balance of £67,301,000 ($112,150,000) on the mortgage loan secured by the Marriott London Grosvenor Square hotel, which was repaid at the time of closing. We received net proceeds of $97,257,000. |
The results of operations of hotels sold prior to January 1, 2015 are classified as discontinued operations and segregated in the consolidated statements of operations for all periods presented. The following is a summary of income from discontinued operations, net of tax, for the three and six months ended June 30, 2014 (in thousands):
Three Months Ended June 30, | Six Months Ended June 30, | |||||||
2014 | 2014 | |||||||
Hotel operating revenues | $ | — | $ | 17,767 | ||||
Operating costs and expenses | — | 11,485 | ||||||
Depreciation and amortization | — | 1,275 | ||||||
Total operating costs and expenses | — | 12,760 | ||||||
Operating income | — | 5,007 | ||||||
Interest expense | — | (1,326 | ) | |||||
Interest income | — | 2 | ||||||
Loss on early extinguishment of debt | — | (272 | ) | |||||
Foreign currency exchange gain | — | 32 | ||||||
Income tax expense | — | (833 | ) | |||||
Gain on sale, net of tax | 604 | 156,429 | ||||||
Income from discontinued operations, net of tax | $ | 604 | $ | 159,039 |
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Supplemental Financial Information | ||
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR) | Three and Six Months Ended June 30, 2015 and 2014 |
Investments in Unconsolidated Affiliates
(in thousands)
We had a 36.4% equity ownership interest in the Hotel del Coronado that we accounted for using the equity method of accounting until we acquired the remaining 63.6% equity ownership interest not previously owned by us on June 11, 2014. We had a 50.0% equity ownership interest in the Fairmont Scottsdale Princess hotel that we accounted for using the equity method of accounting until we acquired the remaining 50.0% equity ownership interest not previously owned by us on March 31, 2014. For purposes of this analysis, the operating results reflect the 36.4% equity ownership interest we held in the Hotel del Coronado prior to June 11, 2014 and the 50.0% equity ownership interest we held in the Fairmont Scottsdale Princess hotel prior to March 31, 2014.
Three Months Ended June 30, 2014 | ||||||||||||
Hotel del Coronado | Fairmont Scottsdale Princess | Total | ||||||||||
Total revenues (100%) | $ | 33,821 | $ | — | $ | 33,821 | ||||||
Property EBITDA (100%) | $ | 11,202 | $ | — | $ | 11,202 | ||||||
Equity in earnings of unconsolidated affiliates (SHR ownership) | ||||||||||||
Property EBITDA | $ | 4,075 | $ | — | $ | 4,075 | ||||||
Depreciation and amortization | (1,572 | ) | — | (1,572 | ) | |||||||
Interest expense | (1,518 | ) | — | (1,518 | ) | |||||||
Other expenses, net | (18 | ) | — | (18 | ) | |||||||
Income taxes | (87 | ) | — | (87 | ) | |||||||
Equity in earnings of unconsolidated affiliates | $ | 880 | $ | — | $ | 880 | ||||||
EBITDA Contribution: | ||||||||||||
Equity in earnings of unconsolidated affiliates | $ | 880 | $ | — | $ | 880 | ||||||
Depreciation and amortization | 1,572 | — | 1,572 | |||||||||
Interest expense | 1,518 | — | 1,518 | |||||||||
Income taxes | 87 | — | 87 | |||||||||
EBITDA Contribution | $ | 4,057 | $ | — | $ | 4,057 | ||||||
FFO Contribution: | ||||||||||||
Equity in earnings of unconsolidated affiliates | $ | 880 | $ | — | $ | 880 | ||||||
Depreciation and amortization | 1,572 | — | 1,572 | |||||||||
FFO Contribution | $ | 2,452 | $ | — | $ | 2,452 |
Six Months Ended June 30, 2014 | ||||||||||||
Hotel del Coronado | Fairmont Scottsdale Princess | Total | ||||||||||
Total revenues (100%) | $ | 67,863 | $ | 35,006 | $ | 102,869 | ||||||
Property EBITDA (100%) | $ | 20,761 | $ | 13,191 | $ | 33,952 | ||||||
Equity in earnings of unconsolidated affiliates (SHR ownership) | ||||||||||||
Property EBITDA | $ | 7,426 | $ | 6,595 | $ | 14,021 | ||||||
Depreciation and amortization | (3,526 | ) | (1,551 | ) | (5,077 | ) | ||||||
Interest expense | (3,418 | ) | (168 | ) | (3,586 | ) | ||||||
Other expenses, net | (25 | ) | (30 | ) | (55 | ) | ||||||
Income taxes | 143 | — | 143 | |||||||||
Equity in earnings of unconsolidated affiliates | $ | 600 | $ | 4,846 | $ | 5,446 | ||||||
EBITDA Contribution | ||||||||||||
Equity in earnings of unconsolidated affiliates | $ | 600 | $ | 4,846 | $ | 5,446 | ||||||
Depreciation and amortization | 3,526 | 1,551 | 5,077 | |||||||||
Interest expense | 3,418 | 168 | 3,586 | |||||||||
Income taxes | (143 | ) | — | (143 | ) | |||||||
EBITDA Contribution | $ | 7,401 | $ | 6,565 | $ | 13,966 | ||||||
FFO Contribution | ||||||||||||
Equity in earnings of unconsolidated affiliates | $ | 600 | $ | 4,846 | $ | 5,446 | ||||||
Depreciation and amortization | 3,526 | 1,551 | 5,077 | |||||||||
FFO Contribution | $ | 4,126 | $ | 6,397 | $ | 10,523 |
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Supplemental Financial Information | ||
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR) | Three and Six Months Ended June 30, 2015 and 2014 |
Leasehold Information
(in thousands)
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
Marriott Hamburg: | ||||||||||||||||
Property EBITDA | $ | 1,321 | $ | 1,687 | $ | 2,560 | $ | 3,199 | ||||||||
Revenue (a) | $ | 1,013 | $ | 1,319 | $ | 2,044 | $ | 2,618 | ||||||||
Lease expense | (1,017 | ) | (1,260 | ) | (2,051 | ) | (2,518 | ) | ||||||||
Less: Deferred gain on sale-leaseback | (43 | ) | (54 | ) | (87 | ) | (107 | ) | ||||||||
Adjusted lease expense | (1,060 | ) | (1,314 | ) | (2,138 | ) | (2,625 | ) | ||||||||
Comparable EBITDA contribution from leasehold | $ | (47 | ) | $ | 5 | $ | (94 | ) | $ | (7 | ) |
Security Deposit (b): | June 30, 2015 | December 31, 2014 | ||||||
Marriott Hamburg | $ | 2,117 | $ | 2,299 |
(a) | For the three and six months ended June 30, 2015 and 2014, 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. |
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Supplemental Financial Information | ||
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR) | June 30, 2015 |
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) attributable to SHR common shareholders; 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 attributable to SHR common shareholders in accordance with standards established by the National Association of Real Estate Investment Trusts, or NAREIT. 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 attributable to SHR common shareholders 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 on non-depreciable assets, 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 attributable to SHR common shareholders, 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 attributable to SHR common shareholders, 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 attributable to SHR common shareholders, 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 attributable to SHR common shareholders, 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 attributable to SHR common shareholders, 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 attributable to SHR common shareholders, 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
Supplemental Financial Information | ||
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR) | Three and Six Months Ended June 30, 2015 and 2014 |
Reconciliation of Net Income Attributable to SHR Common Shareholders to EBITDA and Comparable EBITDA
(in thousands)
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
Net income attributable to SHR common shareholders | $ | 6,698 | $ | 80,840 | $ | 22,509 | $ | 297,998 | ||||||||
Depreciation and amortization—continuing operations | 40,331 | 28,058 | 77,995 | 50,263 | ||||||||||||
Depreciation and amortization—discontinued operations | — | — | — | 1,275 | ||||||||||||
Interest expense—continuing operations | 20,709 | 19,587 | 43,494 | 37,861 | ||||||||||||
Interest expense—discontinued operations | — | — | — | 1,326 | ||||||||||||
Income taxes—continuing operations | 2,452 | 207 | 2,671 | 246 | ||||||||||||
Income taxes—discontinued operations | — | — | — | 833 | ||||||||||||
Income taxes—sale of assets | — | — | — | 20,451 | ||||||||||||
Net income attributable to noncontrolling interests in SHR's operating partnership (a) | 67 | 281 | 104 | 1,130 | ||||||||||||
Adjustments attributable to noncontrolling interests in consolidated affiliates (b) | (3,209 | ) | (3,939 | ) | (7,046 | ) | (7,614 | ) | ||||||||
Adjustments attributable to unconsolidated affiliates (c) | — | 3,153 | — | 8,443 | ||||||||||||
Preferred shareholder dividends | — | 7,169 | — | 16,993 | ||||||||||||
EBITDA | 67,048 | 135,356 | 139,727 | 429,205 | ||||||||||||
Realized portion of deferred gain on sale-leaseback | (43 | ) | (54 | ) | (87 | ) | (107 | ) | ||||||||
Gain on sale of assets—continuing operations | (40,613 | ) | (767 | ) | (40,613 | ) | (767 | ) | ||||||||
Gain on sale of assets—discontinued operations | — | (604 | ) | — | (176,880 | ) | ||||||||||
Gain on consolidation of affiliates | — | (65,349 | ) | — | (143,466 | ) | ||||||||||
Impairment losses | 10,401 | — | 10,401 | — | ||||||||||||
Loss on early extinguishment of debt—continuing operations | 34,211 | — | 34,211 | — | ||||||||||||
Loss on early extinguishment of debt—discontinued operations | — | — | — | 272 | ||||||||||||
Foreign currency exchange (gain) loss—continuing operations | (40 | ) | 8 | 76 | 6 | |||||||||||
Foreign currency exchange gain—discontinued operations | — | — | — | (32 | ) | |||||||||||
Hotel acquisition costs | 346 | — | 1,066 | — | ||||||||||||
Non-cash interest rate derivative activity | 30 | — | 146 | — | ||||||||||||
Amortization of below market hotel management agreement | 513 | 108 | 1,026 | 108 | ||||||||||||
Activist shareholder costs | — | 104 | — | 1,637 | ||||||||||||
Adjustments attributable to noncontrolling interests in consolidated affiliates (d) | 16,559 | 109 | 16,559 | 109 | ||||||||||||
Comparable EBITDA | $ | 88,412 | $ | 68,911 | $ | 162,512 | $ | 110,085 |
(a) | EBITDA is presented on a full participation basis, which means we have assumed conversion of all redeemable noncontrolling interests in SHR's operating partnership into shares of SHR's common stock. This adjustment reverses the net income that was allocated to the noncontrolling interests in SHR's operating partnership. |
(b) | This adjustment represents the portion of interest expense, income taxes and depreciation and amortization attributable to the noncontrolling interests in affiliates that are consolidated but not wholly owned by us. |
(c) | This adjustment represents our portion of interest expense, income taxes and depreciation and amortization related to affiliates that are not consolidated. |
(d) | This adjustment represents the portion of gains or losses from sales of depreciable property and the portion of loss on early extinguishment of debt attributable to the noncontrolling interests in affiliates that are consolidated but not wholly owned by us. |
12
Supplemental Financial Information | ||
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR) | Three and Six Months Ended June 30, 2015 and 2014 |
Reconciliation of Net Income Attributable to SHR Common Shareholders to
Funds From Operations (FFO) Attributable to SHR Common Shareholders, FFO—Fully Diluted and Comparable FFO
(in thousands, except per share data)
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
Net income attributable to SHR common shareholders | $ | 6,698 | $ | 80,840 | $ | 22,509 | $ | 297,998 | ||||||||
Depreciation and amortization—continuing operations | 40,331 | 28,058 | 77,995 | 50,263 | ||||||||||||
Depreciation and amortization—discontinued operations | — | — | — | 1,275 | ||||||||||||
Corporate depreciation | (127 | ) | (123 | ) | (255 | ) | (246 | ) | ||||||||
Gain on sale of assets—continuing operations | (40,613 | ) | (767 | ) | (40,613 | ) | (767 | ) | ||||||||
Gain on sale of assets, net of tax—discontinued operations | — | (604 | ) | — | (156,429 | ) | ||||||||||
Gain on consolidation of affiliates | — | (65,349 | ) | — | (143,466 | ) | ||||||||||
Realized portion of deferred gain on sale-leaseback | (43 | ) | (54 | ) | (87 | ) | (107 | ) | ||||||||
Adjustments attributable to noncontrolling interests in SHR's operating partnership (a) | (116 | ) | (95 | ) | (226 | ) | (193 | ) | ||||||||
Adjustments attributable to noncontrolling interests in consolidated affiliates (b) | 14,801 | (1,971 | ) | 12,558 | (3,806 | ) | ||||||||||
Adjustments attributable to unconsolidated affiliates (c) | — | 1,571 | — | 5,077 | ||||||||||||
FFO attributable to SHR common shareholders | 20,931 | 41,506 | 71,881 | 49,599 | ||||||||||||
Adjustments attributable to noncontrolling interests in SHR's operating partnership - other (d) | 183 | 376 | 330 | 1,323 | ||||||||||||
FFO—Fully Diluted | 21,114 | 41,882 | 72,211 | 50,922 | ||||||||||||
Impairment losses | 10,401 | — | 10,401 | — | ||||||||||||
Non-cash interest rate derivative activity | 2,489 | 2,184 | 5,718 | (110 | ) | |||||||||||
Loss on early extinguishment of debt—continuing operations | 34,211 | — | 34,211 | — | ||||||||||||
Loss on early extinguishment of debt—discontinued operations | — | — | — | 272 | ||||||||||||
Foreign currency exchange (gain) loss—continuing operations | (40 | ) | 8 | 76 | 6 | |||||||||||
Foreign currency exchange gain—discontinued operations | — | — | — | (32 | ) | |||||||||||
Amortization of debt discount | 40 | 623 | 690 | 623 | ||||||||||||
Amortization of below market hotel management agreement | 513 | 108 | 1,026 | 108 | ||||||||||||
Hotel acquisition costs | 346 | — | 1,066 | — | ||||||||||||
Activist shareholder costs | — | 104 | — | 1,637 | ||||||||||||
Excess of redemption liability over carrying amount of redeemed preferred stock | — | 3,203 | — | 6,912 | ||||||||||||
Adjustments attributable to noncontrolling interests in consolidated affiliates (e) | (90 | ) | — | (90 | ) | — | ||||||||||
Comparable FFO | $ | 68,984 | $ | 48,112 | $ | 125,309 | $ | 60,338 | ||||||||
Comparable FFO per fully diluted share | $ | 0.25 | $ | 0.21 | $ | 0.45 | $ | 0.28 | ||||||||
Weighted average diluted shares (f) | 279,380 | 225,348 | 278,145 | 217,875 |
(a) | This adjustment represents the portion of depreciation and amortization attributable to the redeemable noncontrolling interests in our operating partnership. |
(b) | This adjustment represents the portion of depreciation and amortization and gains or losses from sales of depreciable property that are attributable to the noncontrolling interests in affiliates that are consolidated but not wholly owned by us. |
(c) | This adjustment represents our portion of the depreciation and amortization related to affiliates that are not consolidated. |
(d) | This adjustment represents amounts other than depreciation and amortization that are attributable to the redeemable noncontrolling interests in our operating partnership. |
(e) | This adjustment represents the portion of loss on early extinguishment of debt that is attributable to the noncontrolling interests in affiliates that are consolidated but not wholly owned by us. |
(f) | Excludes shares related to the JW Marriott Essex House Hotel put option. |
13
Supplemental Financial Information | ||
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR) | June 30, 2015 |
Debt Summary
(dollars in thousands)
Debt | Interest Rate | Spread (a) | Loan Amount | Maturity (b) | |||||||
Hotel del Coronado | 3.84 | % | 365 bp | $ | 475,000 | March 2018 | |||||
Four Seasons Washington, D.C. | 2.44 | % | 225 bp | 120,000 | June 2019 | ||||||
JW Marriott Essex House Hotel | 3.14 | % | 295 bp | 225,000 | January 2020 | ||||||
Unsecured revolving credit facility (c) | 1.84 | % | 165 bp | 44,000 | May 2020 | ||||||
Unsecured term loan (c) | 1.79 | % | 160 bp | 300,000 | May 2020 | ||||||
Loews Santa Monica Beach Hotel | 2.74 | % | 255 bp | 120,000 | May 2021 | ||||||
InterContinental Chicago | 5.61 | % | Fixed | 141,618 | August 2021 | ||||||
Montage Laguna Beach (d) | 3.90 | % | Fixed | 150,000 | August 2021 | ||||||
Ritz-Carlton Half Moon Bay (e) | 2.59 | % | 240 bp | 115,000 | May 2022 | ||||||
InterContinental Miami | 3.99 | % | Fixed | 115,000 | September 2024 | ||||||
1,805,618 | |||||||||||
Unamortized discount (d) | (981 | ) | |||||||||
$ | 1,804,637 |
(a) | Spread over LIBOR (0.19% at June 30, 2015). |
(b) | Includes extension options. |
(c) | On May 27, 2015, we entered into a new $750,000,000 senior unsecured credit facility that is comprised of a $450,000,000 unsecured revolving credit facility and a $300,000,000 unsecured term loan. Interest on the unsecured revolving credit facility is payable monthly based upon a leverage-based grid with annual rates ranging from LIBOR plus 1.65% to LIBOR plus 2.40%. Interest on the unsecured term loan is also payable monthly based upon a leverage-based pricing grid with annual rates ranging from LIBOR plus 1.60% to LIBOR plus 2.35%. |
(d) | On January 29, 2015, we closed on the acquisition of the Montage Laguna Beach resort. In connection with the acquisition, we assumed the outstanding balance of the mortgage loan secured by the Montage Laguna Beach resort. We recorded the mortgage loan at its fair value, which included a debt discount, which is being amortized as additional interest expense over the maturity period of the loan. |
(e) | On May 27, 2015, we closed on a new $115,000,000 mortgage loan secured by the Ritz-Carlton Half Moon Bay hotel. The mortgage loan has two, one-year extension options, subject to certain conditions. |
Second Quarter 2015 Debt Repayments
On April 9, 2015, we repaid the $117,000,000 mortgage loan secured by the Fairmont Scottsdale Princess hotel.
On May 21, 2015, we sold the Hyatt Regency La Jolla hotel and repaid the $89,288,000 mortgage loan secured by the hotel at the time of closing. We recorded a $193,000 loss on early extinguishment of debt, which included the write off of unamortized deferred financing costs.
On May 27, 2015, we repaid the $209,558,000 mortgage loan secured by the Westin St. Francis hotel and the $93,124,000 mortgage loan secured by the Fairmont Chicago hotel using proceeds from the new mortgage loan secured by the Ritz-Carlton Half Moon Bay hotel and proceeds from the $300,000,000 unsecured term loan. We recorded a $34,014,000 loss on early extinguishment of debt, which included prepayment penalties of $32,917,000 and the write off of unamortized deferred financing costs.
14
Supplemental Financial Information | ||
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR) | June 30, 2015 |
Debt Summary (Continued)
(in thousands)
Future scheduled debt principal payments (including extension options) are as follows:
Years ending December 31, | Amounts | |||
2015 (remainder) | $ | 1,126 | ||
2016 | 2,040 | |||
2017 | 3,066 | |||
2018 | 480,033 | |||
2019 | 125,276 | |||
Thereafter | 1,194,077 | |||
1,805,618 | ||||
Unamortized discount | (981 | ) | ||
$ | 1,804,637 | |||
Percent of fixed rate debt | 22.5 | % | ||
Weighted average interest rate (f) | 3.29 | % | ||
Weighted average maturity of fixed rate debt (debt with maturity of greater than one year) | 6.97 |
(f) Excludes the amortization of deferred financing costs.
15
Supplemental Financial Information | ||
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR) | June 30, 2015 |
Portfolio Data
Portfolio at June 30, 2015
(dollars in thousands)
Hotel | Location | Number of Rooms | % of Total Rooms | 2nd QTR 2015 Property EBITDA | % of 2nd QTR 2015 Property EBITDA | ||||||||||
United States: | |||||||||||||||
Westin St. Francis | San Francisco, CA | 1,195 | 15 | % | $ | 12,675 | 13 | % | |||||||
InterContinental Chicago | Chicago, IL | 792 | 10 | % | 7,062 | 7 | % | ||||||||
Hotel del Coronado | Coronado, CA | 757 | 9 | % | 14,835 | 15 | % | ||||||||
Fairmont Chicago | Chicago, IL | 687 | 8 | % | 6,231 | 6 | % | ||||||||
Fairmont Scottsdale Princess | Scottsdale, AZ | 649 | 8 | % | 5,502 | 6 | % | ||||||||
InterContinental Miami | Miami, FL | 641 | 8 | % | 5,547 | 6 | % | ||||||||
JW Marriott Essex House Hotel (a) | New York, NY | 511 | 6 | % | 6,540 | 7 | % | ||||||||
Ritz-Carlton Laguna Niguel | Dana Point, CA | 396 | 5 | % | 8,932 | 9 | % | ||||||||
Marriott Lincolnshire Resort | Lincolnshire, IL | 389 | 5 | % | 1,205 | 1 | % | ||||||||
Loews Santa Monica Beach Hotel | Santa Monica, CA | 347 | 4 | % | 4,488 | 5 | % | ||||||||
Four Seasons Hotel Austin (b) | Austin, TX | 291 | 4 | % | 1,530 | 2 | % | ||||||||
Ritz-Carlton Half Moon Bay | Half Moon Bay, CA | 261 | 3 | % | 4,299 | 4 | % | ||||||||
Montage Laguna Beach | Laguna Beach, CA | 249 | 3 | % | 5,232 | 5 | % | ||||||||
Four Seasons Washington, D.C. | Washington, D.C. | 222 | 3 | % | 5,960 | 6 | % | ||||||||
Four Seasons Resort Scottsdale at Troon North | Scottsdale, AZ | 210 | 3 | % | 2,904 | 3 | % | ||||||||
Four Seasons Silicon Valley | East Palo Alto, CA | 200 | 2 | % | 3,392 | 4 | % | ||||||||
Four Seasons Jackson Hole | Teton Village, WY | 124 | 1 | % | (104 | ) | — | % | |||||||
Total United States | 7,921 | 97 | % | 96,230 | 99 | % | |||||||||
European: | |||||||||||||||
Marriott Hamburg (c) | Hamburg, Germany | 278 | 3 | % | N/A | N/A | |||||||||
Assets Sold: | |||||||||||||||
Hyatt Regency La Jolla Hotel (d) | La Jolla, CA | N/A | N/A | 1,244 | 1 | % | |||||||||
8,199 | 100 | % | 97,474 | 100 | % |
(a) | As of June 30, 2015, we owned a 51.0% controlling interest in the entity that owns the JW Marriott Essex House Hotel and consolidated this hotel for reporting purposes. On July 24, 2015, our joint venture partner exercised its option to sell us its equity interest in the entity that owns the JW Marriott Essex House Hotel. Subsequent to the option being exercised, we own 100% of the JW Marriott Essex House Hotel. |
(b) | On May 12, 2015, we closed on the acquisition of the Four Seasons Hotel Austin. We have included the results of this hotel in the quarterly Property EBITDA and percentage of Property EBITDA calculation above only for our period of ownership. |
(c) | We sublease this property and have not included it in the percentage of Property EBITDA calculation. |
(d) | On May 21, 2015, we, along with our joint venture partner, sold this hotel. We have included the results of this hotel in the quarterly Property EBITDA and percentage of Property EBITDA calculation above only for our period of ownership. |
16
Supplemental Financial Information | ||
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR) | Four Quarters Ended June 30, 2015 |
Seasonality by Geographic Region
(dollars in thousands)
The Total United States portfolio is derived from our hotel portfolio at June 30, 2015, consisting of all properties located in the United States. We have three acquisition properties, the Four Seasons Resort Scottsdale at Troon North, which was acquired on December 9, 2014, the Montage Laguna Beach resort, which was acquired on January 29, 2015, and the Four Seasons Hotel Austin, which was acquired on May 12, 2015. We have not included the operating results of the Hyatt Regency La Jolla hotel because we sold the hotel on May 21, 2015. The results for the three months ended December 31, 2014 include payments pursuant to the JW Marriott Essex House Hotel NOI guarantee of $5.8 million.
Total United States Hotels (as of June 30, 2015) | ||||||||||||||||||||
Acquisition property revenues - 3 Properties and 750 Rooms | ||||||||||||||||||||
Same store property revenues - 14 Properties and 7,171 Rooms | ||||||||||||||||||||
Three Months Ended | ||||||||||||||||||||
September 30, 2014 | December 31, 2014 | March 31, 2015 | June 30, 2015 | Total | ||||||||||||||||
Acquisition property revenues (a) | $ | — | $ | 2,539 | $ | 31,043 | $ | 42,482 | $ | 76,064 | ||||||||||
Acquisition property revenues (b) | 43,137 | 44,649 | $ | 11,993 | 6,780 | 106,559 | ||||||||||||||
Same store property revenues | 294,231 | 300,409 | 282,739 | 307,743 | 1,185,122 | |||||||||||||||
Total pro forma revenues | $ | 337,368 | $ | 347,597 | $ | 325,775 | $ | 357,005 | $ | 1,367,745 | ||||||||||
Total property seasonality % | 24.6 | % | 25.4 | % | 23.8 | % | 26.1 | % | 99.9 | % |
(a) Acquisition property revenues for our period of ownership
(b) Acquisition property revenues prior to our period of ownership
17
Supplemental Financial Information | ||
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR) | Three and Six Months Ended June 30, 2015 and 2014 |
Operating Statistics by Geographic Region
The Same Store United States portfolio is derived from our hotel portfolio at June 30, 2015, consisting of all properties located in the United States. The Same Store United States portfolio excludes the Four Seasons Resort Scottsdale at Troon North, the Montage Laguna Beach resort and the Four Seasons Hotel Austin for the three and six months ended June 30, 2015 and 2014.
Same Store United States Hotels (as of June 30, 2015)
14 Properties
7,171 Rooms
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||
2015 | 2014 | Change | 2015 | 2014 | Change | ||||||||||||||||||||
ADR | $ | 317.67 | $ | 302.76 | 4.9 | % | $ | 312.95 | $ | 296.39 | 5.6 | % | |||||||||||||
Average Occupancy | 79.1 | % | 80.0 | % | (0.9 | ) | pts | 75.5 | % | 75.0 | % | 0.5 | pts | ||||||||||||
RevPAR | $ | 251.41 | $ | 242.18 | 3.8 | % | $ | 236.16 | $ | 222.28 | 6.2 | % | |||||||||||||
Total RevPAR | $ | 471.59 | $ | 459.33 | 2.7 | % | $ | 454.93 | $ | 427.87 | 6.3 | % | |||||||||||||
Property EBITDA Margin | 28.1 | % | 28.5 | % | (0.4 | ) | pts | 26.6 | % | 24.9 | % | 1.7 | pts |
Same Store United States Hotels - Adjusted (a) (as of June 30, 2015)
14 Properties
7,171 Rooms
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||
2015 | 2014 | Change | 2015 | 2014 | Change | ||||||||||||||||||||
ADR | $ | 317.67 | $ | 299.97 | 5.9 | % | $ | 312.95 | $ | 293.14 | 6.8 | % | |||||||||||||
Average Occupancy | 79.1 | % | 80.0 | % | (0.9 | ) | pts | 75.5 | % | 75.0 | % | 0.5 | pts | ||||||||||||
RevPAR | $ | 251.41 | $ | 239.95 | 4.8 | % | $ | 236.16 | $ | 219.84 | 7.4 | % | |||||||||||||
Total RevPAR | $ | 472.27 | $ | 462.41 | 2.1 | % | $ | 454.93 | $ | 430.34 | 5.7 | % | |||||||||||||
Property EBITDA Margin | 28.3 | % | 28.3 | % | — | pts | 26.8 | % | 24.7 | % | 2.1 | pts |
(a) For the three months ended June 30, 2015 and 2014, property EBITDA margins exclude the amortization of the below market hotel management agreement related to the Hotel del Coronado of $0.5 million and $0.1 million, respectively. For the six months ended June 30, 2015 and 2014, property EBITDA margins exclude the amortization of the below market hotel management agreement related to the Hotel del Coronado of $1.0 million and $0.1 million, respectively. For the three and six months ended June 30, 2014, the statistics have been modified to take into account certain adjustments related to the subsequent adoption of the Uniform System of Accounts for the Lodging Industry, Eleventh Revised Edition (the "USALI Eleventh Revised Edition").
18
Supplemental Financial Information | ||
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR) | Three and Six Months Ended June 30, 2015 and 2014 |
Operating Statistics by Geographic Region (Continued)
The Total United States portfolio is derived from our hotel portfolio at June 30, 2015, consisting of all properties located in the United States, including 100% of the operations of the Hotel del Coronado, the Fairmont Scottsdale Princess hotel, the Four Seasons Resort Scottsdale at Troon North, the Montage Laguna Beach resort and the Four Seasons Hotel Austin, including periods prior to full ownership, for the three and six months ended June 30, 2015 and 2014. We have not included the operating results of the Hyatt Regency La Jolla hotel because we sold the hotel on May 21, 2015.
Total United States Hotels (as of June 30, 2015)
17 Properties
7,921 Rooms
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||
2015 | 2014 | Change | 2015 | 2014 | Change | ||||||||||||||||||||
ADR | $ | 328.76 | $ | 313.68 | 4.8 | % | $ | 326.59 | $ | 309.37 | 5.6 | % | |||||||||||||
Average Occupancy | 78.8 | % | 80.0 | % | (1.2 | ) | pts | 75.7 | % | 75.5 | % | 0.2 | pts | ||||||||||||
RevPAR | $ | 259.15 | $ | 250.92 | 3.3 | % | $ | 247.30 | $ | 233.52 | 5.9 | % | |||||||||||||
Total RevPAR | $ | 495.30 | $ | 482.97 | 2.6 | % | $ | 482.03 | $ | 453.65 | 6.3 | % | |||||||||||||
Property EBITDA Margin | 27.6 | % | 27.9 | % | (0.3 | ) | pts | 26.4 | % | 24.7 | % | 1.7 | pts |
Total United States Hotels - Adjusted (b) (as of June 30, 2015)
17 Properties
7,921 Rooms
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||
2015 | 2014 | Change | 2015 | 2014 | Change | ||||||||||||||||||||
ADR | $ | 328.76 | $ | 310.53 | 5.9 | % | $ | 326.59 | $ | 305.73 | 6.8 | % | |||||||||||||
Average Occupancy | 78.8 | % | 80.0 | % | (1.2 | ) | pts | 75.7 | % | 75.5 | % | 0.2 | pts | ||||||||||||
RevPAR | $ | 259.15 | $ | 248.40 | 4.3 | % | $ | 247.30 | $ | 230.78 | 7.2 | % | |||||||||||||
Total RevPAR | $ | 495.90 | $ | 486.55 | 1.9 | % | $ | 482.03 | $ | 456.46 | 5.6 | % | |||||||||||||
Property EBITDA Margin | 27.7 | % | 27.7 | % | — | pts | 26.5 | % | 24.6 | % | 1.9 | pts |
(b) For the three months ended June 30, 2015 and 2014, property EBITDA margins exclude the amortization of the below market hotel management agreement related to the Hotel del Coronado of $0.5 million and $0.1 million, respectively. For the six months ended June 30, 2015 and 2014, property EBITDA margins exclude the amortization of the below market hotel management agreement related to the Hotel del Coronado of $1.0 million and $0.1 million, respectively. For the three and six months ended June 30, 2014, the statistics have been modified to take into account certain adjustments related to the subsequent adoption of the USALI Eleventh Revised Edition.
19
Supplemental Financial Information | ||
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR) | Three and Six Months Ended June 30, 2015 and 2014 |
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 and six months ended June 30, 2015 and 2014. Property EBITDA reflects property net operating income or loss plus depreciation and amortization. The following financial and operating information for the three and six months ended June 30, 2014 is adjusted for changes resulting from the adoption of the USALI Eleventh Revised Edition. The information in the following tables includes the amortization of the below market hotel management agreement related to the Hotel del Coronado of $0.5 million and $0.1 million for the three months ended June 30, 2015 and 2014, respectively, and $1.0 million and $0.1 million for the six months ended June 30, 2015 and 2014, respectively.
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
UNITED STATES HOTELS: | 2015 | 2014 | Change | 2015 | 2014 | Change | ||||||||||||||||||||
FAIRMONT CHICAGO | ||||||||||||||||||||||||||
Selected Financial Information: | ||||||||||||||||||||||||||
Total revenues | $ | 20,492 | $ | 19,246 | 6.5 | % | $ | 29,922 | $ | 28,123 | 6.4 | % | ||||||||||||||
Property EBITDA | $ | 6,231 | $ | 5,812 | 7.2 | % | $ | 4,514 | $ | 3,673 | 22.9 | % | ||||||||||||||
Selected Operating Information: | ||||||||||||||||||||||||||
Rooms | 687 | 687 | — | 687 | 687 | — | ||||||||||||||||||||
Average occupancy | 73.5 | % | 74.9 | % | (1.4 | ) | pts | 60.9 | % | 60.5 | % | 0.4 | pts | |||||||||||||
ADR | $ | 267.20 | $ | 243.03 | 9.9 | % | $ | 227.42 | $ | 211.90 | 7.3 | % | ||||||||||||||
RevPAR | $ | 196.38 | $ | 182.05 | 7.9 | % | $ | 138.57 | $ | 128.19 | 8.1 | % | ||||||||||||||
Total RevPAR | $ | 327.79 | $ | 307.85 | 6.5 | % | $ | 240.64 | $ | 226.16 | 6.4 | % | ||||||||||||||
FAIRMONT SCOTTSDALE PRINCESS | ||||||||||||||||||||||||||
Selected Financial Information (Amounts below are 100% of operations, of which SHR owns 100% as of June 30, 2014): | ||||||||||||||||||||||||||
Total revenues | $ | 25,125 | $ | 27,941 | (10.1 | ) | % | $ | 67,345 | $ | 64,218 | 4.9 | % | |||||||||||||
Property EBITDA | $ | 5,502 | $ | 7,138 | (22.9 | ) | % | $ | 22,249 | $ | 20,329 | 9.4 | % | |||||||||||||
Selected Operating Information: | ||||||||||||||||||||||||||
Rooms | 649 | 649 | — | 649 | 649 | — | ||||||||||||||||||||
Average occupancy | 69.2 | % | 77.5 | % | (8.3 | ) | pts | 78.0 | % | 79.9 | % | (1.9 | ) | pts | ||||||||||||
ADR | $ | 246.09 | $ | 231.91 | 6.1 | % | $ | 305.52 | $ | 275.67 | 10.8 | % | ||||||||||||||
RevPAR | $ | 170.33 | $ | 179.70 | (5.2 | ) | % | $ | 238.32 | $ | 220.35 | 8.2 | % | |||||||||||||
Total RevPAR | $ | 425.42 | $ | 473.10 | (10.1 | ) | % | $ | 573.30 | $ | 546.68 | 4.9 | % | |||||||||||||
FOUR SEASONS HOTEL AUSTIN | ||||||||||||||||||||||||||
No table has been provided since we did not own the property for the entire periods presented. | ||||||||||||||||||||||||||
FOUR SEASONS JACKSON HOLE | ||||||||||||||||||||||||||
Selected Financial Information: | ||||||||||||||||||||||||||
Total revenues | $ | 5,858 | $ | 5,423 | 8.0 | % | $ | 23,361 | $ | 21,293 | 9.7 | % | ||||||||||||||
Property EBITDA | $ | (104 | ) | $ | (413 | ) | 74.8 | % | $ | 5,030 | $ | 4,095 | 22.8 | % | ||||||||||||
Selected Operating Information: | ||||||||||||||||||||||||||
Rooms | 124 | 124 | — | 124 | 124 | — | ||||||||||||||||||||
Average occupancy | 46.1 | % | 45.3 | % | 0.8 | pts | 62.3 | % | 60.4 | % | 1.9 | pts | ||||||||||||||
ADR | $ | 442.60 | $ | 383.07 | 15.5 | % | $ | 590.82 | $ | 526.96 | 12.1 | % | ||||||||||||||
RevPAR | $ | 204.08 | $ | 173.64 | 17.5 | % | $ | 368.25 | $ | 318.23 | 15.7 | % | ||||||||||||||
Total RevPAR | $ | 519.12 | $ | 480.56 | 8.0 | % | $ | 1,040.85 | $ | 948.71 | 9.7 | % |
20
Supplemental Financial Information | ||
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR) | Three and Six Months Ended June 30, 2015 and 2014 |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
2015 | 2014 | Change | 2015 | 2014 | Change | |||||||||||||||||||||
FOUR SEASONS RESORT SCOTTSDALE AT TROON NORTH | ||||||||||||||||||||||||||
Selected Financial Information (This table includes financial information only for our period of ownership): | ||||||||||||||||||||||||||
Total revenues | $ | 12,272 | N/A | N/A | $ | 28,154 | N/A | N/A | ||||||||||||||||||
Property EBITDA | $ | 2,904 | N/A | N/A | $ | 8,287 | N/A | N/A | ||||||||||||||||||
Selected Operating Information (This table includes statistical information only for our period of ownership. For the three months ended June 30, 2014, average occupancy was 78.5%, ADR was $338.56, RevPAR was $265.73 and Total RevPAR was $630.72. For the six months ended June 30, 2014, average occupancy was 81.6%, ADR was $389.32, RevPAR was $317.76 and Total RevPAR was $692.85.): | ||||||||||||||||||||||||||
Rooms | 210 | N/A | N/A | 210 | N/A | N/A | ||||||||||||||||||||
Average occupancy | 76.7 | % | N/A | N/A | 81.3 | % | N/A | N/A | ||||||||||||||||||
ADR | $ | 361.57 | N/A | N/A | $ | 444.11 | N/A | N/A | ||||||||||||||||||
RevPAR | $ | 277.28 | N/A | N/A | $ | 361.04 | N/A | N/A | ||||||||||||||||||
Total RevPAR | $ | 642.16 | N/A | N/A | $ | 740.71 | N/A | N/A | ||||||||||||||||||
FOUR SEASONS SILICON VALLEY | ||||||||||||||||||||||||||
Selected Financial Information: | ||||||||||||||||||||||||||
Total revenues | $ | 11,017 | $ | 9,737 | 13.1 | % | $ | 20,872 | $ | 18,323 | 13.9 | |||||||||||||||
Property EBITDA | $ | 3,392 | $ | 2,741 | 23.8 | % | $ | 5,848 | $ | 4,536 | 28.9 | |||||||||||||||
Selected Operating Information: | ||||||||||||||||||||||||||
Rooms | 200 | 200 | — | 200 | 200 | — | ||||||||||||||||||||
Average occupancy | 78.4 | % | 75.0 | % | 3.4 | pts | 77.8 | % | 72.8 | % | 5.0 | |||||||||||||||
ADR | $ | 445.93 | $ | 411.21 | 8.4 | % | $ | 430.78 | $ | 396.17 | 8.7 | |||||||||||||||
RevPAR | $ | 349.42 | $ | 308.22 | 13.4 | % | $ | 335.26 | $ | 288.37 | 16.3 | |||||||||||||||
Total RevPAR | $ | 605.32 | $ | 534.98 | 13.1 | % | $ | 576.59 | $ | 506.17 | 13.9 | |||||||||||||||
FOUR SEASONS WASHINGTON, D.C. | ||||||||||||||||||||||||||
Selected Financial Information: | ||||||||||||||||||||||||||
Total revenues | $ | 20,802 | $ | 20,052 | 3.7 | % | $ | 35,590 | $ | 34,444 | 3.3 | % | ||||||||||||||
Property EBITDA | $ | 5,960 | $ | 5,802 | 2.7 | % | $ | 7,952 | $ | 7,705 | 3.2 | % | ||||||||||||||
Selected Operating Information: | ||||||||||||||||||||||||||
Rooms | 222 | 222 | — | 222 | 222 | — | ||||||||||||||||||||
Average occupancy | 78.2 | % | 81.8 | % | (3.6 | ) | pts | 70.3 | % | 72.8 | % | (2.5 | ) | pts | ||||||||||||
ADR | $ | 669.77 | $ | 607.92 | 10.2 | % | $ | 608.06 | $ | 563.13 | 8.0 | % | ||||||||||||||
RevPAR | $ | 523.57 | $ | 497.00 | 5.3 | % | $ | 427.62 | $ | 410.21 | 4.2 | % | ||||||||||||||
Total RevPAR | $ | 1,029.72 | $ | 992.55 | 3.7 | % | $ | 885.72 | $ | 857.19 | 3.3 | % | ||||||||||||||
HOTEL DEL CORONADO | ||||||||||||||||||||||||||
Selected Financial Information (Amounts below are 100% of operations, of which SHR owns 100% as of June 30, 2014.): | ||||||||||||||||||||||||||
Total revenues | $ | 44,689 | $ | 44,285 | 0.9 | % | $ | 81,899 | $ | 77,479 | 5.7 | % | ||||||||||||||
Property EBITDA | $ | 14,835 | $ | 14,962 | (0.8 | ) | % | $ | 28,882 | $ | 24,521 | 17.8 | % | |||||||||||||
Selected Operating Information: | ||||||||||||||||||||||||||
Rooms | 757 | 757 | — | 757 | 757 | — | ||||||||||||||||||||
Average occupancy | 76.5 | % | 68.6 | % | 7.9 | pts | 74.0 | % | 65.6 | % | 8.4 | pts | ||||||||||||||
ADR | $ | 382.80 | $ | 386.46 | (0.9 | ) | % | $ | 368.16 | $ | 364.39 | 1.0 | % | |||||||||||||
RevPAR | $ | 292.75 | $ | 265.07 | 10.4 | % | $ | 272.45 | $ | 239.07 | 14.0 | % | ||||||||||||||
Total RevPAR | $ | 648.73 | $ | 642.86 | 0.9 | % | $ | 597.73 | $ | 565.47 | 5.7 | % |
21
Supplemental Financial Information | ||
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR) | Three and Six Months Ended June 30, 2015 and 2014 |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
2015 | 2014 | Change | 2015 | 2014 | Change | |||||||||||||||||||||
INTERCONTINENTAL CHICAGO | ||||||||||||||||||||||||||
Selected Financial Information: | ||||||||||||||||||||||||||
Total revenues | $ | 22,649 | $ | 22,120 | 2.4 | % | $ | 33,357 | $ | 34,214 | (2.5 | ) | % | |||||||||||||
Property EBITDA | $ | 7,062 | $ | 7,097 | (0.5 | ) | % | $ | 5,224 | $ | 6,409 | (18.5 | ) | % | ||||||||||||
Selected Operating Information: | ||||||||||||||||||||||||||
Rooms | 792 | 792 | — | 792 | 792 | — | ||||||||||||||||||||
Average occupancy | 85.5 | % | 88.1 | % | (2.6 | ) | pts | 70.7 | % | 75.7 | % | (5.0 | ) | pts | ||||||||||||
ADR | $ | 229.72 | $ | 215.89 | 6.4 | % | $ | 197.09 | $ | 184.70 | 6.7 | % | ||||||||||||||
RevPAR | $ | 196.34 | $ | 190.14 | 3.3 | % | $ | 139.31 | $ | 139.75 | (0.3 | ) | % | |||||||||||||
Total RevPAR | $ | 314.26 | $ | 306.92 | 2.4 | % | $ | 232.69 | $ | 238.67 | (2.5 | ) | % | |||||||||||||
INTERCONTINENTAL MIAMI | ||||||||||||||||||||||||||
Selected Financial Information: | ||||||||||||||||||||||||||
Total revenues | $ | 19,394 | $ | 17,769 | 9.1 | % | $ | 44,985 | $ | 41,010 | 9.7 | % | ||||||||||||||
Property EBITDA | $ | 5,547 | $ | 5,047 | 9.9 | % | $ | 16,270 | $ | 14,397 | 13.0 | % | ||||||||||||||
Selected Operating Information: | ||||||||||||||||||||||||||
Rooms | 641 | 641 | — | 641 | 641 | — | ||||||||||||||||||||
Average occupancy | 87.0 | % | 86.1 | % | 0.9 | pts | 88.3 | % | 89.1 | % | (0.8 | ) | pts | |||||||||||||
ADR | $ | 188.59 | $ | 182.58 | 3.3 | % | $ | 232.13 | $ | 221.14 | 5.0 | % | ||||||||||||||
RevPAR | $ | 163.97 | $ | 157.11 | 4.4 | % | $ | 205.01 | $ | 197.07 | 4.0 | % | ||||||||||||||
Total RevPAR | $ | 332.48 | $ | 304.63 | 9.1 | % | $ | 387.73 | $ | 353.47 | 9.7 | % | ||||||||||||||
JW MARRIOTT ESSEX HOUSE HOTEL | ||||||||||||||||||||||||||
Selected Financial Information: | ||||||||||||||||||||||||||
Total revenues | $ | 27,503 | $ | 26,461 | 3.9 | % | $ | 45,194 | $ | 43,779 | 3.2 | % | ||||||||||||||
Property EBITDA | $ | 6,540 | $ | 6,452 | 1.4 | % | $ | 5,487 | $ | 5,973 | (8.1 | ) | % | |||||||||||||
Selected Operating Information: | ||||||||||||||||||||||||||
Rooms | 511 | 511 | — | 511 | 511 | — | ||||||||||||||||||||
Average occupancy | 85.1 | % | 87.8 | % | (2.7 | ) | pts | 80.2 | % | 81.6 | % | (1.4 | ) | pts | ||||||||||||
ADR | $ | 481.01 | $ | 463.33 | 3.8 | % | $ | 418.77 | $ | 413.07 | 1.4 | % | ||||||||||||||
RevPAR | $ | 409.32 | $ | 406.84 | 0.6 | % | $ | 335.76 | $ | 337.06 | (0.4 | ) | % | |||||||||||||
Total RevPAR | $ | 591.45 | $ | 569.04 | 3.9 | % | $ | 488.63 | $ | 473.34 | 3.2 | % | ||||||||||||||
LOEWS SANTA MONICA BEACH HOTEL | ||||||||||||||||||||||||||
Selected Financial Information: | ||||||||||||||||||||||||||
Total revenues | $ | 14,663 | $ | 14,705 | (0.3 | ) | % | $ | 27,264 | $ | 28,327 | (3.8 | ) | % | ||||||||||||
Property EBITDA | $ | 4,488 | $ | 4,755 | (5.6 | ) | % | $ | 7,329 | $ | 8,415 | (12.9 | ) | % | ||||||||||||
Selected Operating Information: | ||||||||||||||||||||||||||
Rooms | 347 | 347 | — | 347 | 347 | — | ||||||||||||||||||||
Average occupancy | 82.7 | % | 86.3 | % | (3.6 | ) | pts | 80.8 | % | 87.4 | % | (6.6 | ) | pts | ||||||||||||
ADR | $ | 378.00 | $ | 364.63 | 3.7 | % | $ | 362.92 | $ | 352.83 | 2.9 | % | ||||||||||||||
RevPAR | $ | 312.71 | $ | 314.82 | (0.7 | ) | % | $ | 293.22 | $ | 308.22 | (4.9 | ) | % | ||||||||||||
Total RevPAR | $ | 464.37 | $ | 471.98 | (1.6 | ) | % | $ | 434.08 | $ | 457.35 | (5.1 | ) | % | ||||||||||||
22
Supplemental Financial Information | ||
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR) | Three and Six Months Ended June 30, 2015 and 2014 |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
2015 | 2014 | Change | 2015 | 2014 | Change | |||||||||||||||||||||
MARRIOTT LINCOLNSHIRE RESORT | ||||||||||||||||||||||||||
Selected Financial Information (Property EBITDA excludes a $10.4 million impairment loss related to this hotel for the three and six months ended June 30, 2015): | ||||||||||||||||||||||||||
Total revenues | $ | 9,515 | $ | 9,187 | 3.6 | % | $ | 16,161 | $ | 15,650 | 3.3 | % | ||||||||||||||
Property EBITDA | $ | 1,205 | $ | 1,021 | 18.0 | % | $ | 905 | $ | 383 | 136.3 | % | ||||||||||||||
Selected Operating Information: | ||||||||||||||||||||||||||
Rooms | 389 | 389 | — | 389 | 389 | — | ||||||||||||||||||||
Average occupancy | 63.3 | % | 60.8 | % | 2.5 | pts | 58.9 | % | 55.6 | % | 3.3 | pts | ||||||||||||||
ADR | $ | 144.56 | $ | 137.82 | 4.9 | % | $ | 142.63 | $ | 135.54 | 5.2 | % | ||||||||||||||
RevPAR | $ | 91.44 | $ | 83.85 | 9.1 | % | $ | 83.95 | $ | 75.30 | 11.5 | % | ||||||||||||||
Total RevPAR | $ | 268.79 | $ | 259.58 | 3.5 | % | $ | 229.54 | $ | 222.28 | 3.3 | % | ||||||||||||||
MONTAGE LAGUNA BEACH | ||||||||||||||||||||||||||
Selected Financial Information (This table includes financial information only for our period of ownership): | ||||||||||||||||||||||||||
Total revenues | $ | 23,445 | N/A | N/A | N/A | N/A | N/A | |||||||||||||||||||
Property EBITDA | $ | 5,232 | N/A | N/A | N/A | N/A | N/A | |||||||||||||||||||
Selected Operating Information (This table includes statistical information only for our period of ownership. For the six months ended June 30, 2015, average occupancy was 75.8%, ADR was $555.32, RevPAR was $420.94 and Total RevPAR was $975.93. For the three and six months ended June 30, 2014, average occupancy was 83.3% and 79.4%, respectively, ADR was $544.67 and $510.91, respectively, RevPAR was $453.59 and $407.38, respectively, and Total RevPAR was $1,050.45 and $945.39, respectively): | ||||||||||||||||||||||||||
Rooms | 249 | N/A | N/A | N/A | N/A | N/A | ||||||||||||||||||||
Average occupancy | 74.0 | % | N/A | N/A | N/A | N/A | N/A | |||||||||||||||||||
ADR | $ | 609.48 | N/A | N/A | N/A | N/A | N/A | |||||||||||||||||||
RevPAR | $ | 451.05 | N/A | N/A | N/A | N/A | N/A | |||||||||||||||||||
Total RevPAR | $ | 1,035.55 | N/A | N/A | N/A | N/A | N/A | |||||||||||||||||||
RITZ-CARLTON HALF MOON BAY | ||||||||||||||||||||||||||
Selected Financial Information: | ||||||||||||||||||||||||||
Total revenues | $ | 18,444 | $ | 17,834 | 3.4 | % | $ | 32,196 | $ | 30,655 | 5.0 | % | ||||||||||||||
Property EBITDA | $ | 4,299 | $ | 4,029 | 6.7 | % | $ | 5,896 | $ | 5,221 | 12.9 | % | ||||||||||||||
Selected Operating Information: | ||||||||||||||||||||||||||
Rooms | 261 | 261 | — | 261 | 261 | — | ||||||||||||||||||||
Average occupancy | 67.4 | % | 74.9 | % | (7.5 | ) | pts | 61.4 | % | 67.9 | % | (6.5 | ) | pts | ||||||||||||
ADR | $ | 488.60 | $ | 412.83 | 18.4 | % | $ | 453.99 | $ | 391.44 | 16.0 | % | ||||||||||||||
RevPAR | $ | 329.52 | $ | 309.13 | 6.6 | % | $ | 278.93 | $ | 265.62 | 5.0 | % | ||||||||||||||
Total RevPAR | $ | 776.57 | $ | 750.89 | 3.4 | % | $ | 681.53 | $ | 648.91 | 5.0 | % | ||||||||||||||
RITZ-CARLTON LAGUNA NIGUEL | ||||||||||||||||||||||||||
Selected Financial Information: | ||||||||||||||||||||||||||
Total revenues | $ | 26,034 | $ | 25,977 | 0.2 | % | $ | 50,284 | $ | 46,131 | 9.0 | % | ||||||||||||||
Property EBITDA | $ | 8,932 | $ | 8,735 | 2.3 | % | $ | 16,872 | $ | 14,256 | 18.4 | % | ||||||||||||||
Selected Operating Information: | ||||||||||||||||||||||||||
Rooms | 396 | 396 | — | 396 | 396 | — | ||||||||||||||||||||
Average occupancy | 69.6 | % | 71.2 | % | (1.6 | ) | pts | 72.0 | % | 69.3 | % | 2.7 | pts | |||||||||||||
ADR | $ | 428.58 | $ | 414.62 | 3.4 | % | $ | 410.83 | $ | 388.51 | 5.7 | % | ||||||||||||||
RevPAR | $ | 298.42 | $ | 295.07 | 1.1 | % | $ | 295.89 | $ | 269.12 | 9.9 | % | ||||||||||||||
Total RevPAR | $ | 722.44 | $ | 720.87 | 0.2 | % | $ | 701.54 | $ | 643.60 | 9.0 | % | ||||||||||||||
23
Supplemental Financial Information | ||
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR) | Three and Six Months Ended June 30, 2015 and 2014 |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
2015 | 2014 | Change | 2015 | 2014 | Change | |||||||||||||||||||||
WESTIN ST. FRANCIS | ||||||||||||||||||||||||||
Selected Financial Information: | ||||||||||||||||||||||||||
Total revenues | $ | 41,557 | $ | 40,818 | 1.8 | % | $ | 82,053 | $ | 74,543 | 10.1 | % | ||||||||||||||
Property EBITDA | $ | 12,675 | $ | 12,046 | 5.2 | % | $ | 24,595 | $ | 18,043 | 36.3 | % | ||||||||||||||
Selected Operating Information: | ||||||||||||||||||||||||||
Rooms | 1,195 | 1,195 | — | 1,195 | 1,195 | — | ||||||||||||||||||||
Average occupancy | 92.1 | % | 92.1 | % | — | pts | 87.6 | % | 84.3 | % | 3.3 | pts | ||||||||||||||
ADR | $ | 278.28 | $ | 260.36 | 6.9 | % | $ | 278.97 | $ | 253.44 | 10.1 | % | ||||||||||||||
RevPAR | $ | 256.34 | $ | 239.82 | 6.9 | % | $ | 244.37 | $ | 213.61 | 14.4 | % | ||||||||||||||
Total RevPAR | $ | 386.19 | $ | 375.36 | 2.9 | % | $ | 379.36 | $ | 344.64 | 10.1 | % | ||||||||||||||
EUROPEAN HOTEL: | ||||||||||||||||||||||||||
MARRIOTT HAMBURG | ||||||||||||||||||||||||||
Selected Financial Information: | ||||||||||||||||||||||||||
Total revenues | $ | 5,120 | $ | 6,281 | (18.5 | ) | % | $ | 9,273 | $ | 11,430 | (18.9 | ) | % | ||||||||||||
Property EBITDA | $ | 1,321 | $ | 1,687 | (21.7 | ) | % | $ | 2,560 | $ | 3,199 | (20.0 | ) | % | ||||||||||||
Selected Operating Information: | ||||||||||||||||||||||||||
Rooms | 278 | 278 | — | 278 | 278 | — | ||||||||||||||||||||
Average occupancy | 84.4 | % | 85.8 | % | (1.4 | ) | pts | 81.7 | % | 84.7 | % | (3.0 | ) | pts | ||||||||||||
ADR | $ | 186.26 | $ | 218.76 | (14.9 | ) | % | $ | 171.49 | $ | 198.14 | (13.5 | ) | % | ||||||||||||
RevPAR | $ | 157.15 | $ | 187.61 | (16.2 | ) | % | $ | 140.06 | $ | 167.91 | (16.6 | ) | % | ||||||||||||
Total RevPAR | $ | 202.39 | $ | 248.27 | (18.5 | ) | % | $ | 184.29 | $ | 227.16 | (18.9 | ) | % |
24
Supplemental Financial Information | ||
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR) | Three and Six Months Ended June 30, 2015 and 2014 |
Reconciliation of Property EBITDA to EBITDA
(in thousands)
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||||||||||||||||||
Hotel | Property EBITDA | EBITDA | Property EBITDA | EBITDA | Property EBITDA | EBITDA | Property EBITDA | EBITDA | ||||||||||||||||||||||||
Fairmont Chicago | $ | 6,231 | $ | 6,231 | $ | 5,812 | $ | 5,812 | $ | 4,514 | $ | 4,514 | $ | 3,672 | $ | 3,672 | ||||||||||||||||
Fairmont Scottsdale Princess (a) | 5,502 | 5,502 | 7,138 | 7,138 | 22,249 | 22,249 | 20,329 | 7,138 | ||||||||||||||||||||||||
Four Seasons Hotel Austin (b) | — | 1,530 | — | — | — | 1,530 | — | — | ||||||||||||||||||||||||
Four Seasons Jackson Hole | (104 | ) | (104 | ) | (413 | ) | (413 | ) | 5,030 | 5,030 | 4,095 | 4,095 | ||||||||||||||||||||
Four Seasons Resort Scottsdale at Troon North (c) | 2,904 | 2,904 | — | — | 8,287 | 8,287 | — | — | ||||||||||||||||||||||||
Four Seasons Silicon Valley | 3,392 | 3,392 | 2,741 | 2,741 | 5,848 | 5,848 | 4,536 | 4,536 | ||||||||||||||||||||||||
Four Seasons Washington, D.C. | 5,960 | 5,960 | 5,802 | 5,802 | 7,952 | 7,952 | 7,706 | 7,706 | ||||||||||||||||||||||||
Hotel del Coronado (a) | 14,835 | 14,835 | 14,962 | 3,759 | 28,882 | 28,882 | 24,521 | 3,759 | ||||||||||||||||||||||||
InterContinental Chicago | 7,062 | 7,062 | 7,097 | 7,097 | 5,224 | 5,224 | 6,409 | 6,409 | ||||||||||||||||||||||||
InterContinental Miami | 5,547 | 5,547 | 5,047 | 5,047 | 16,270 | 16,270 | 14,397 | 14,397 | ||||||||||||||||||||||||
JW Marriott Essex House Hotel | 6,540 | 6,540 | 6,452 | 6,452 | 5,487 | 5,487 | 5,973 | 5,973 | ||||||||||||||||||||||||
Loews Santa Monica Beach Hotel | 4,488 | 4,488 | 4,755 | 4,755 | 7,329 | 7,329 | 8,415 | 8,415 | ||||||||||||||||||||||||
Marriott Lincolnshire Resort | 1,205 | 1,205 | 1,021 | 1,021 | 905 | 905 | 383 | 383 | ||||||||||||||||||||||||
Montage Laguna Beach (d) | 5,232 | 5,232 | — | — | — | 8,539 | — | — | ||||||||||||||||||||||||
Ritz-Carlton Half Moon Bay | 4,299 | 4,299 | 4,029 | 4,029 | 5,896 | 5,896 | 5,221 | 5,221 | ||||||||||||||||||||||||
Ritz-Carlton Laguna Niguel | 8,932 | 8,932 | 8,735 | 8,735 | 16,872 | 16,872 | 14,255 | 14,255 | ||||||||||||||||||||||||
Westin St. Francis | 12,675 | 12,675 | 12,046 | 12,046 | 24,595 | 24,595 | 18,043 | 18,043 | ||||||||||||||||||||||||
Marriott Hamburg (e) | 1,321 | (4 | ) | 1,687 | 59 | 2,560 | (7 | ) | 3,199 | 100 | ||||||||||||||||||||||
96,021 | 96,226 | 86,911 | 74,080 | 167,900 | 175,402 | 141,154 | 104,102 | |||||||||||||||||||||||||
Assets Sold: | ||||||||||||||||||||||||||||||||
Hyatt Regency La Jolla (f) | 1,244 | 1,244 | 1,396 | 1,396 | 3,597 | 3,597 | 1,587 | 1,587 | ||||||||||||||||||||||||
$ | 97,265 | $ | 97,470 | $ | 88,307 | $ | 75,476 | $ | 171,497 | $ | 178,999 | $ | 142,741 | $ | 105,689 | |||||||||||||||||
Adjustments: | ||||||||||||||||||||||||||||||||
Impairment losses | (10,401 | ) | — | (10,401 | ) | — | ||||||||||||||||||||||||||
Corporate expenses | (6,441 | ) | (7,198 | ) | (14,709 | ) | (14,391 | ) | ||||||||||||||||||||||||
Interest income | 16 | 50 | 117 | 77 | ||||||||||||||||||||||||||||
Loss on early extinguishment of debt | (34,211 | ) | — | (34,211 | ) | — | ||||||||||||||||||||||||||
Equity in earnings of unconsolidated affiliates | — | 826 | — | 5,271 | ||||||||||||||||||||||||||||
Foreign currency exchange gain (loss) | 40 | (8 | ) | (76 | ) | (6 | ) | |||||||||||||||||||||||||
Gain on consolidation of affiliate | — | 65,349 | — | 143,466 | ||||||||||||||||||||||||||||
Other income, net | 40,465 | 795 | 40,308 | 1,218 | ||||||||||||||||||||||||||||
Income from discontinued operations | — | 604 | — | 159,039 | ||||||||||||||||||||||||||||
Depreciation expense—discontinued operations | — | — | — | 1,275 | ||||||||||||||||||||||||||||
Interest expense—discontinued operations | — | — | — | 1,326 | ||||||||||||||||||||||||||||
Income taxes—discontinued operations | — | — | — | 833 | ||||||||||||||||||||||||||||
Income taxes—sale of assets | — | — | — | 20,451 | ||||||||||||||||||||||||||||
Noncontrolling interest in consolidated affiliates | (16,888 | ) | 217 | (13,454 | ) | 4,258 | ||||||||||||||||||||||||||
Adjustments from consolidated affiliates | (3,209 | ) | (3,939 | ) | (7,046 | ) | (7,614 | ) | ||||||||||||||||||||||||
Adjustments from unconsolidated affiliates | — | 3,153 | — | 8,443 | ||||||||||||||||||||||||||||
Other adjustments | 207 | 31 | 200 | (130 | ) | |||||||||||||||||||||||||||
EBITDA | $ | 67,048 | $ | 135,356 | $ | 139,727 | $ | 429,205 |
(a) | On March 31, 2014, we acquired the remaining ownership interest in the Fairmont Scottsdale Princess hotel and consolidated the property. On June 11, 2014, we acquired the remaining ownership interest in the Hotel del Coronado and consolidated the property. EBITDA represents revenue and expenses generated by these properties subsequent to the consolidation of these properties. Prior to the acquisitions on March 31, 2014 and June 11, 2014, we accounted for these properties under the equity method of accounting. EBITDA related to our interest in these properties while they were accounted for under the equity method |
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of accounting is reflected in adjustments from unconsolidated affiliates. Property EBITDA represents 100% of revenue and expenses generated by these properties.
(b) | On May 12, 2015, we purchased the Four Seasons Hotel Austin. We have not included the results of this hotel in Property EBITDA for the three and six months ended June 30, 2015 and 2014 above since we did not own the property for the entire periods. |
(c) | On December 9, 2014 we purchased the Four Seasons Resort Scottsdale at Troon North. We have not included the results of this hotel in Property EBITDA for the three and six months ended June 30, 2014 above since we did not own the property during those periods. |
(d) | On January 29, 2015, we purchased the Montage Laguna Beach resort. We have not included the results of this hotel in Property EBITDA for the six months ended June 30, 2015 and for the three and six months ended June 30, 2014 above since we did not own the property for the entire periods. |
(e) | 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. |
(f) | On May 21, 2015, we sold the Hyatt Regency La Jolla hotel. We have included the results of this hotel in Property EBITDA for our period of ownership. |
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Supplemental Financial Information | ||
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR) | Three and Six Months Ended June 30, 2015 and 2014 |
Reconciliation of Property EBITDA to Comparable EBITDA
(in thousands)
Three Months Ended June 30, 2015 | Six Months Ended June 30, 2015 | |||||||||||||||||||||||
Property EBITDA | Adjustments | Comparable EBITDA | Property EBITDA | Adjustments | Comparable EBITDA | |||||||||||||||||||
Urban Hotels: | ||||||||||||||||||||||||
Fairmont Chicago | $ | 6,231 | $ | 6,231 | $ | 4,514 | $ | 4,514 | ||||||||||||||||
Four Seasons Hotel Austin | — | 1,530 | 1,530 | — | 1,530 | 1,530 | ||||||||||||||||||
Four Seasons Silicon Valley | 3,392 | 3,392 | 5,848 | 5,848 | ||||||||||||||||||||
Four Seasons Washington, D.C. | 5,960 | 5,960 | 7,952 | 7,952 | ||||||||||||||||||||
InterContinental Chicago | 7,062 | 7,062 | 5,224 | 5,224 | ||||||||||||||||||||
InterContinental Miami | 5,547 | 5,547 | 16,270 | 16,270 | ||||||||||||||||||||
JW Marriott Essex House Hotel | 6,540 | (2,990 | ) | 3,550 | 5,487 | (2,356 | ) | 3,131 | ||||||||||||||||
Westin St. Francis | 12,675 | 12,675 | 24,595 | 24,595 | ||||||||||||||||||||
Total Urban Hotels | 47,407 | (1,460 | ) | 45,947 | 69,890 | (826 | ) | 69,064 | ||||||||||||||||
Resorts: | ||||||||||||||||||||||||
Fairmont Scottsdale Princess | 5,502 | 5,502 | 22,249 | 22,249 | ||||||||||||||||||||
Four Seasons Jackson Hole | (104 | ) | (104 | ) | 5,030 | 5,030 | ||||||||||||||||||
Four Seasons Resort Scottsdale at Troon North | 2,904 | 2,904 | 8,287 | 8,287 | ||||||||||||||||||||
Hotel del Coronado | 14,835 | 513 | 15,348 | 28,882 | 1,026 | 29,908 | ||||||||||||||||||
Loews Santa Monica Beach Hotel | 4,488 | 4,488 | 7,329 | 7,329 | ||||||||||||||||||||
Marriott Lincolnshire Resort | 1,205 | 1,205 | 905 | 905 | ||||||||||||||||||||
Montage Laguna Beach | 5,232 | 5,232 | — | 8,539 | 8,539 | |||||||||||||||||||
Ritz-Carlton Half Moon Bay | 4,299 | 4,299 | 5,896 | 5,896 | ||||||||||||||||||||
Ritz-Carlton Laguna Niguel | 8,932 | 8,932 | 16,872 | 16,872 | ||||||||||||||||||||
Total Resorts | 47,293 | 513 | 47,806 | 95,450 | 9,565 | 105,015 | ||||||||||||||||||
European Hotel: | ||||||||||||||||||||||||
Marriott Hamburg | 1,321 | (1,368 | ) | (47 | ) | 2,560 | (2,654 | ) | (94 | ) | ||||||||||||||
Assets Sold: | ||||||||||||||||||||||||
Hyatt Regency La Jolla | 1,244 | (548 | ) | 696 | 3,597 | (1,586 | ) | 2,011 | ||||||||||||||||
$ | 97,265 | $ | (2,863 | ) | $ | 94,402 | $ | 171,497 | $ | 4,499 | $ | 175,996 | ||||||||||||
% of QTR Comparable EBITDA | % of YTD Comparable EBITDA | |||||||||||||||||||||||
Urban Hotels | 49 | % | 39 | % | ||||||||||||||||||||
Resorts | 51 | % | 60 | % | ||||||||||||||||||||
Total | 100 | % | 99 | % |
Total United States Urban Hotels (as of June 30, 2015) (a) | ||||||||||||||||||||||||||
8 Properties | ||||||||||||||||||||||||||
4,539 Rooms | ||||||||||||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
2015 | 2014 | Change | 2015 | 2014 | Change | |||||||||||||||||||||
ADR | $ | 307.31 | $ | 289.97 | 6.0 | % | $ | 295.86 | $ | 277.93 | 6.5 | % | ||||||||||||||
Average Occupancy | 84.3 | % | 85.3 | % | (1.0 | ) | pts | 78.0 | % | 78.2 | % | (0.2 | ) | pts | ||||||||||||
RevPAR | $ | 259.21 | $ | 247.40 | 4.8 | % | $ | 230.72 | $ | 217.29 | 6.2 | % | ||||||||||||||
Total RevPAR | $ | 428.42 | $ | 408.64 | 4.8 | % | $ | 390.05 | $ | 366.30 | 6.5 | % | ||||||||||||||
Property EBITDA Margin | 28.9 | % | 28.7 | % | 0.2 | pts | 24.4 | % | 22.7 | % | 1.7 | pts | ||||||||||||||
(a) Includes the Four Seasons Hotel Austin, including periods prior to ownership. | ||||||||||||||||||||||||||
Total United States Resorts (as of June 30, 2015) (b) | ||||||||||||||||||||||||||
9 Properties | ||||||||||||||||||||||||||
3,382 Rooms | ||||||||||||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
2015 | 2014 | Change | 2015 | 2014 | Change | |||||||||||||||||||||
ADR | $ | 362.75 | $ | 351.01 | 3.3 | % | $ | 370.85 | $ | 355.36 | 4.4 | % | ||||||||||||||
Average Occupancy | 71.4 | % | 72.8 | % | (1.4 | ) | pts | 72.7 | % | 71.9 | % | 0.8 | pts | |||||||||||||
RevPAR | $ | 259.08 | $ | 255.66 | 1.3 | % | $ | 269.54 | $ | 255.34 | 5.6 | % | ||||||||||||||
Total RevPAR | $ | 585.05 | $ | 582.90 | 0.4 | % | $ | 605.48 | $ | 571.08 | 6.0 | % | ||||||||||||||
Property EBITDA Margin | 26.3 | % | 27.1 | % | (0.8 | ) | pts | 28.1 | % | 26.4 | % | 1.7 | pts | |||||||||||||
(b) Includes the Four Seasons Resort Scottsdale at Troon North and Montage Laguna Beach resort, including periods prior to ownership. |
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Supplemental Financial Information | ||
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR) | June 30, 2015 |
2015 Guidance
(in millions, except per share data)
Year Ended December 31, 2015 | ||||||
Operational Guidance | Low Range | High Range | ||||
Total RevPAR growth | 4.0 | % | 5.0 | % | ||
RevPAR growth | 5.5 | % | 6.5 | % |
Year Ended December 31, 2015 | ||||||||
Comparable EBITDA Guidance | Low Range | High Range | ||||||
Net Income Attributable to Common Shareholders | $ | 58.9 | $ | 73.9 | ||||
Depreciation and Amortization | 160.6 | 160.6 | ||||||
Interest Expense | 81.4 | 81.4 | ||||||
Income Taxes | 8.1 | 8.1 | ||||||
Non-controlling Interests | 0.2 | 0.2 | ||||||
Adjustments from Consolidated Affiliates | 8.6 | 8.6 | ||||||
Realized Portion of Deferred Gain on Sale Leasebacks | (0.2 | ) | (0.2 | ) | ||||
Gain on Sale of Asset | (40.6 | ) | (40.6 | ) | ||||
Impairment Losses | 10.4 | 10.4 | ||||||
Loss on Early Extinguishment of Debt | 34.2 | 34.2 | ||||||
Hotel Acquisition Costs | 1.1 | 1.1 | ||||||
Amortization of Below Market Management Agreement | 2.1 | 2.1 | ||||||
Other Adjustments | 0.2 | 0.2 | ||||||
Comparable EBITDA | $ | 325.0 | $ | 340.0 |
Year Ended December 31, 2015 | ||||||||
Comparable FFO Guidance | Low Range | High Range | ||||||
Net Income Attributable to Common Shareholders | $ | 58.9 | $ | 73.9 | ||||
Depreciation and Amortization | 159.9 | 159.9 | ||||||
Realized Portion of Deferred Gain on Sale Leasebacks | (0.2 | ) | (0.2 | ) | ||||
Gain on Sale of Asset | (40.6 | ) | (40.6 | ) | ||||
Non-controlling Interests | 0.2 | 0.2 | ||||||
Adjustments from Consolidated Affiliates | 12.0 | 12.0 | ||||||
Impairment Losses | 10.4 | 10.4 | ||||||
Interest Rate Swap OCI Amortization | 10.4 | 10.4 | ||||||
Loss on Early Extinguishment of Debt | 34.2 | 34.2 | ||||||
Amortization of Debt Discount | 0.8 | 0.8 | ||||||
Amortization of Below Market Management Agreement | 2.1 | 2.1 | ||||||
Hotel Acquisition Costs | 1.1 | 1.1 | ||||||
Comparable FFO | $ | 249.2 | $ | 264.2 | ||||
Comparable FFO per diluted share | $ | 0.88 | $ | 0.94 |
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