Exhibit 99.2
Strategic Hotel Capital, Inc.
Supplemental Financial Information
September 30, 2005
Strategic Hotel Capital, Inc.
Supplemental Financial Information
September 30, 2005
TABLE OF CONTENTS
2
Supplemental Financial Information
September 30, 2005
CORPORATE INFORMATION
The Company
Strategic Hotel Capital, Inc. is an industry-leading owner and asset manager of high-end hotels and resorts. We own a quality portfolio of upper upscale and luxury hotels and resorts in desirable North American and European locations. Our portfolio is made up of 18 properties totaling 8,316 rooms. We own 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.
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 will provide attractive returns for our shareholders.
Strategic Hotel Capital, Inc. is a real estate investment trust (REIT) and is traded on the New York Stock Exchange under the symbol SLH.
Fiscal Year End:
December 31
Number of Full-Time Equivalent Employees:
40
Corporate Headquarters:
77 West Wacker Drive, Suite 4600
Chicago, IL 60601
(312) 658-5000
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Company Contact: James Mead Chief Financial Officer (312) 658-5000 | | At Financial Relations Board: Claire Koeneman Financial Relations Board (312) 640-6768 |
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Supplemental Financial Information
September 30, 2005
Board of Directors
John C. Deterding
Chairman of the Board and Chairman of the Corporate Governance and Nominating Committee
Laurence S. Geller
Director, President and Chief Executive Officer
Robert P. Bowen
Director and Chairman of the Audit Committee
Michael Brennan
Director
Robert M. Falzon
Director
Thomas A. Hassard
Director
Jonathan A. Langer
Director
Robert J. Watson
Director and Chairman of the Compensation Committee
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Supplemental Financial Information
September 30, 2005
Executive Officers
Laurence S. Geller
President and Chief Executive Officer
James E. Mead
Executive Vice President and Chief Financial Officer (Principal Financial Officer)
Richard J. Moreau
Senior Vice President — Asset Management
Patricia A. Needham
Senior Vice President
John Kenneth Tyler Barrett
Vice President — Asset Management
David R. Hogan
Vice President — Asset Management
Monte J. Huber
Vice President, Controller, and Treasurer (Principal Accounting Officer)
Paula C. Maggio
Vice President, Secretary and General Counsel
Robert T. McAllister
Vice President — Tax
Janice J. Peterson
Vice President — Human Capital
Timothy J. Taylor
Vice President — Capital Projects
Paul T. White
Vice President — Asset Management
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Supplemental Financial Information
September 30, 2005
Equity Research Coverage
| | | | |
Firm
| | Analyst
| | Telephone
|
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Banc of America Securities, LLC | | J. Cogan | | (415) 627-2501 |
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Deutsche Bank North America | | Marc Falcone | | (212) 250-7417 |
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Goldman, Sachs & Co. | | Steven Kent | | (212) 902-6752 |
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Green Street Advisors, Inc. | | John Arabia | | (949) 640-8780 |
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Raymond James & Associates | | William Crow | | (727) 567-2594 |
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Wachovia Securities | | Jeffrey Donnelly | | (617) 603-4262 |
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JMP Securities | | Will Marks | | (415) 835-8944 |
Strategic Hotel Capital is followed by the analysts listed above. Please note that any opinions, estimates or forecasts regarding Strategic Hotel Capital’s performance made by these analysts are theirs alone and do not represent opinions, forecasts or predictions of Strategic Hotel Capital or its management. Strategic Hotel Capital 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
September 30, 2005
FINANCIAL HIGHLIGHTS
Supplemental Financial Data
(in thousands, except per share information)
| | | | |
| | | September 30, 2005
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Capitalization | | | | |
Common shares outstanding | | | 43,878 | |
Operating partnership units outstanding | | | 8,366 | |
Restricted stock units outstanding | | | 517 | |
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Combined shares and units outstanding | | | 52,761 | |
Common stock price at end of period | | $ | 18.26 | |
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Common equity capitalization | | $ | 963,416 | |
Preferred equity capitalization | | | 100,000 | |
Consolidated debt (includes liabilities of assets held for sale) | | | 689,061 | |
Pro rata share of unconsolidated debt | | | 29,570 | |
Pro rata share of consolidated debt allocated to Intercontinental Hotels Group | | | (30,300 | ) |
Cash and cash equivalents | | | (63,556 | ) |
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Total enterprise value | | $ | 1,688,191 | |
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Dividends Per Share | | | | |
Common dividends declared (holders of record on March 31, 2005): | | $ | 0.22 | |
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Common dividends declared (holders of record on June 30, 2005): | | $ | 0.22 | |
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Common dividends declared (holders of record on September 30, 2005): | | $ | 0.22 | |
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Supplemental Financial Information
Three and Nine Months Ended September 30, 2005 and 2004
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
(UNAUDITED)
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| | | Three Months Ended
September 30,
| | | Nine Months Ended
September 30,
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| | | 2005
| | | 2004
| | | 2005
| | | 2004
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Revenues: | | | | | | | | | | | | | | | | |
Rooms | | $ | 63,632 | | | $ | 39,170 | | | $ | 189,000 | | | $ | 199,666 | |
Food and beverage | | | 38,091 | | | | 23,766 | | | | 114,898 | | | | 105,917 | |
Other hotel operating revenue | | | 12,380 | | | | 9,482 | | | | 38,229 | | | | 36,112 | |
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| | | | 114,103 | | | | 72,418 | | | | 342,127 | | | | 341,695 | |
Lease revenue | | | 5,514 | | | | 5,692 | | | | 13,493 | | | | 20,919 | |
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Total revenues | | | 119,617 | | | | 78,110 | | | | 355,620 | | | | 362,614 | |
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Operating Costs and Expenses: | | | | | | | | | | | | | | | | |
Rooms | | | 16,257 | | | | 10,051 | | | | 44,868 | | | | 51,339 | |
Food and beverage | | | 28,265 | | | | 18,488 | | | | 81,982 | | | | 81,935 | |
Other departmental expenses | | | 34,661 | | | | 23,679 | | | | 96,490 | | | | 96,623 | |
Management fees | | | 3,078 | | | | 2,750 | | | | 11,635 | | | | 12,514 | |
Other property level expenses | | | 7,453 | | | | 5,121 | | | | 21,359 | | | | 22,084 | |
Lease expense | | | 2,977 | | | | 3,189 | | | | 9,968 | | | | 3,189 | |
Depreciation and amortization | | | 13,278 | | | | 9,701 | | | | 36,256 | | | | 47,684 | |
Corporate expenses | | | 5,379 | | | | 4,299 | | | | 14,786 | | | | 24,493 | |
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Total operating costs and expenses | | | 111,348 | | | | 77,278 | | | | 317,344 | | | | 339,861 | |
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Operating income | | | 8,269 | | | | 832 | | | | 38,276 | | | | 22,753 | |
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Interest expense | | | (10,215 | ) | | | (5,882 | ) | | | (27,531 | ) | | | (55,107 | ) |
Interest income | | | 382 | | | | 42 | | | | 1,126 | | | | 1,003 | |
Loss on early extinguishment of debt | | | — | | | | (17 | ) | | | — | | | | (20,903 | ) |
Other income (expenses), net | | | 2,425 | | | | 1,359 | | | | 7,048 | | | | (684 | ) |
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Income (loss) before income taxes, minority interests and discontinued operations | | | 861 | | | | (3,666 | ) | | | 18,919 | | | | (52,938 | ) |
Income tax expense | | | (214 | ) | | | (405 | ) | | | (2,749 | ) | | | (760 | ) |
Minority interests | | | (235 | ) | | | 989 | | | | (4,339 | ) | | | 1,917 | |
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Income (loss) from continuing operations | | | 412 | | | | (3,082 | ) | | | 11,831 | | | | (51,781 | ) |
Income (loss) from discontinued operations | | | 486 | | | | (27 | ) | | | 2,298 | | | | 74,532 | |
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Net income (loss) | | | 898 | | | | (3,109 | ) | | | 14,129 | | | | 22,751 | |
Preferred shareholder dividend | | | (2,125 | ) | | | — | | | | (4,628 | ) | | | — | |
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Net (loss) income available to common shareholders | | $ | (1,227 | ) | | $ | (3,109 | ) | | $ | 9,501 | | | $ | 22,751 | |
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Basic (Loss) Earnings Per Share: | | | | | | | | | | | | | | | | |
(Loss) income from continuing operations available to common shareholders per share | | $ | (0.04 | ) | | $ | (0.11 | ) | | $ | 0.22 | | | $ | (2.31 | ) |
Income from discontinued operations available to common shareholders per share | | | 0.01 | | | | 0.00 | | | | 0.07 | | | | 3.32 | |
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Net (loss) income available to common shareholders per share | | $ | (0.03 | ) | | $ | (0.11 | ) | | $ | 0.29 | | | $ | 1.01 | |
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Basic weighted-average common shares outstanding | | | 36,691 | | | | 28,857 | | | | 32,420 | | | | 22,437 | |
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Diluted (Loss) Earnings Per Share: | | | | | | | | | | | | | | | | |
(Loss) income from continuing operations available to common shareholders per share | | $ | (0.04 | ) | | $ | (0.11 | ) | | $ | 0.22 | | | $ | (2.31 | ) |
Income from discontinued operations available to common shareholders per share | | | 0.01 | | | | 0.00 | | | | 0.07 | | | | 3.32 | |
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Net (loss) income available to common shareholders per share | | $ | (0.03 | ) | | $ | (0.11 | ) | | $ | 0.29 | | | $ | 1.01 | |
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Diluted weighted-average common shares outstanding | | | 36,691 | | | | 28,857 | | | | 32,605 | | | | 22,437 | |
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Our condensed consolidated statement of operations for the nine months ended September 30, 2004 include the results of the 14 hotel interests owned and leased by the company as of September 30, 2004, as well as the results of seven other hotels, which were distributed out of the company on June 29, 2004 in connection with the IPO and in which the company no longer has an ownership interest.
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Supplemental Financial Information
September 30, 2005 and December 31, 2004
Condensed Consolidated Balance Sheets
(in thousands, except share data)
(UNAUDITED)
| | | | | | | | |
| | | September 30,
2005
| | | December 31,
2004
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Assets | | | | | | | | |
Property and equipment | | $ | 1,290,827 | | | $ | 952,717 | |
Less accumulated depreciation | | | (208,003 | ) | | | (222,150 | ) |
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Net property and equipment | | | 1,082,824 | | | | 730,567 | |
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Goodwill | | | 66,656 | | | | 66,438 | |
Intangible assets (net of accumulated amortization of $940 and $87, respectively) | | | 2,842 | | | | 1,613 | |
Assets held for sale | | | 64,916 | | | | — | |
Investment in hotel joint venture | | | 12,427 | | | | 12,060 | |
Cash and cash equivalents | | | 63,556 | | | | 40,071 | |
Restricted cash and cash equivalents | | | 29,906 | | | | 26,979 | |
Accounts receivable (net of allowance for doubtful accounts of $333 and $361, respectively) | | | 35,798 | | | | 21,056 | |
Deferred financing costs (net of accumulated amortization of $3,604 and $1,420, respectively) | | | 10,841 | | | | 11,178 | |
Other assets | | | 80,930 | | | | 80,388 | |
Insurance recoveries receivable | | | 31,360 | | | | — | |
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Total assets | | $ | 1,482,056 | | | $ | 990,350 | |
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Liabilities and Shareholders’ Equity | | | | | | | | |
Liabilities: | | | | | | | | |
Mortgages and other debt payable | | $ | 654,061 | | | $ | 489,140 | |
Bank credit facility | | | — | | | | 54,000 | |
Liabilities of assets held for sale | | | 41,421 | | | | — | |
Accounts payable and accrued expenses | | | 91,707 | | | | 58,946 | |
Distributions payable | | | 11,531 | | | | 8,709 | |
Deferred fees on management contracts | | | — | | | | 2,333 | |
Deferred gain on sale of hotels | | | 102,430 | | | | 119,616 | |
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Total liabilities | | | 901,150 | | | | 732,744 | |
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Minority interests in SHCI’s operating partnership | | | 74,513 | | | | 61,053 | |
Minority interests in consolidated joint ventures | | | 15,612 | | | | — | |
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Shareholders’ equity: | | | | | | | | |
8.5% Series A Cumulative Redeemable Preferred Shares ($0.01 par value; 4,000,000 shares issued and outstanding; liquidation preference $25.00 per share) | | | 97,540 | | | | — | |
Common shares ($0.01 par value; 150,000,000 common shares authorized; 43,878,273 and 30,035,701 common shares issued and outstanding, respectively) | | | 439 | | | | 300 | |
Additional paid-in capital | | | 688,020 | | | | 483,691 | |
Deferred compensation | | | (2,405 | ) | | | (1,731 | ) |
Accumulated deficit | | | (257,744 | ) | | | (271,873 | ) |
Accumulated distributions to shareholders | | | (41,250 | ) | | | (13,447 | ) |
Accumulated other comprehensive income (loss) | | | 6,181 | | | | (387 | ) |
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Total shareholders’ equity | | | 490,781 | | | | 196,553 | |
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Total liabilities and shareholders’ equity | | $ | 1,482,056 | | | $ | 990,350 | |
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9
Supplemental Financial Information
Three and Nine Months Ended September 30, 2005 and 2004
REIT Hotel Statements of Operations (a)
(in thousands, except per share data)
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| | | Three Months Ended
September 30,
| | | Nine Months Ended
September 30,
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| | | 2005
| | | 2004
| | | 2005
| | | 2004
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REIT Hotel Revenues: | | | | | | | | | | | | | | | | |
Rooms | | $ | 63,632 | | | $ | 39,170 | | | $ | 189,000 | | | $ | 121,596 | |
Food and beverage | | | 38,091 | | | | 23,766 | | | | 114,898 | | | | 70,070 | |
Other hotel operating revenue | | | 12,380 | | | | 9,482 | | | | 38,229 | | | | 27,418 | |
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| | | | 114,103 | | | | 72,418 | | | | 342,127 | | | | 219,084 | |
Lease revenue (b) | | | 5,514 | | | | 5,692 | | | | 13,493 | | | | 17,384 | |
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REIT hotel revenues | | | 119,617 | | | | 78,110 | | | | 355,620 | | | | 236,468 | |
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REIT Hotel Expenses: | | | | | | | | | | | | | | | | |
Rooms | | | 16,257 | | | | 10,051 | | | | 44,868 | | | | 27,425 | |
Food and beverage | | | 28,265 | | | | 18,488 | | | | 81,982 | | | | 52,070 | |
Other departmental expenses | | | 34,661 | | | | 23,679 | | | | 96,490 | | | | 65,332 | |
Management fees | | | 3,078 | | | | 2,750 | | | | 11,635 | | | | 9,593 | |
Other property level expenses | | | 7,453 | | | | 5,121 | | | | 21,359 | | | | 12,316 | |
Lease expense | | | 2,977 | | | | 3,189 | | | | 9,968 | | | | 3,189 | |
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REIT hotel expenses | | | 92,691 | | | | 63,278 | | | | 266,302 | | | | 169,925 | |
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REIT Hotel Adjusted Operating Income | | | 26,926 | | | | 14,832 | | | | 89,318 | | | | 66,543 | |
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Interest expense, net | | | (9,833 | ) | | | (5,840 | ) | | | (26,405 | ) | | | (31,866 | ) |
Loss on early extinguishment of debt | | | — | | | | (17 | ) | | | — | | | | (8,240 | ) |
Other income (expenses), net (c) | | | 1,175 | | | | 109 | | | | 3,298 | | | | (1,934 | ) |
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Income before income taxes and minority interests | | | 18,268 | | | | 9,084 | | | | 66,211 | | | | 24,503 | |
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Income tax expense | | | (214 | ) | | | (405 | ) | | | (2,749 | ) | | | (760 | ) |
Minority interests (d) | | | (235 | ) | | | 989 | | | | (4,339 | ) | | | 1,917 | |
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REIT Hotel Income | | | 17,819 | | | | 9,668 | | | | 59,123 | | | | 25,660 | |
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REIT depreciation and amortization | | | (13,278 | ) | | | (9,701 | ) | | | (36,256 | ) | | | (27,999 | ) |
Corporate expenses | | | (5,379 | ) | | | (4,299 | ) | | | (14,786 | ) | | | (24,493 | ) |
Asset management fees related to distributed assets (e) | | | 1,250 | | | | 1,250 | | | | 3,750 | | | | 1,250 | |
Non-REIT hotel results, net | | | — | | | | — | | | | — | | | | (26,199 | ) |
Income (loss) from discontinued operations | | | 486 | | | | (27 | ) | | | 2,298 | | | | 74,532 | |
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Net Income (Loss) | | $ | 898 | | | $ | (3,109 | ) | | $ | 14,129 | | | $ | 22,751 | |
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| | | Supplemental Financial Information Three and Nine Months Ended September 30, 2005 and 2004 |
(a) REIT hotel operating data above excludes the results of operations of the distributed assets that are required to be included in GAAP financial statement presentations prior to the date of the IPO because we are deemed to have continuing involvement as a result of our agreement to asset manage those assets. In addition, REIT hotel operating data above also excludes the results of operations of hotels sold or held for sale. As a result, we have presented only REIT hotel operating results and a reconciliation of REIT hotel income to net income (loss), the most directly comparable GAAP measure.
REIT hotel operating results are presented because we believe that it most fairly represents comparable period-to-period performance of our hotels and facilitates comparisons with other hotel REITs and hotel owners. Because of the elimination of the non-REIT hotel operations, the REIT hotel operating results do not represent our total revenues, expenses or operating profit in accordance with GAAP. These results should be considered in combination with our GAAP financial statements by investors when evaluating our performance.
(b) Until March 1, 2004, the Hamburg Marriott was accounted for under the equity method. After March 1, 2004 when we acquired our joint venture partner’s 65% leasehold interest in the property, we record lease revenue for the Hamburg Marriott. Lease revenue for the three and nine months ended September 30, 2004 includes revenues from the Hyatt Regency New Orleans until June 29, 2004 when we converted the Hyatt Regency New Orleans lease to a management agreement. Prior to June 29, 2004, the Paris Marriott Champs Elysees was accounted for as a finance obligation and we consolidated its results because of a continuing involvement in supporting the financing of the property through a collateralized guarantee. On June 29, 2004, we recorded a sale and leaseback related to the Paris Marriott Champs Elysees. Subsequent to June 29, 2004, we earn only lease revenue from the Hamburg Marriott and the Paris Marriott Champs Elysees.
(c) Other income (expenses), net includes our equity in earnings or losses of our investments in the Prague hotel joint venture for the three and nine months ended September 30, 2005 and 2004. Earnings or losses from our investment in the Hamburg Marriott hotel joint venture are included in the nine months ended September 30, 2004 until the acquisition of our joint venture partner’s interest in the property on March 1, 2004.
(d) Minority interests represent interests held by others in SHC Funding and other entities controlled by SHCI, or for periods prior to the Offering, SHCI’s predecessor, Strategic Hotel Capital, LLC (SHC LLC). There are two components to SHCI’s minority interests. First, the Company reflects minority interests related to the InterContinental Chicago and Miami hotels on the balance sheet for the 15% portion of the properties consolidated by SHCI, but not owned by the Company. The $15,612,000 minority interest balance was established based on the agreed upon fair market value of the assets at the time of the transaction. The earnings or losses from these properties attributable to minority interests are normally reflected as minority interests in the statements of operations; however, based on the partnership agreements with IHG, SHCI receives a preferred return of all the net cash flow (as defined in the agreements) at the properties through December 31, 2005, up to a certain threshold. SHCI does not believe that threshold will be exceeded in 2005. Second, minority interest in SHC Funding on the consolidated balance sheets is calculated by dividing the number of units held by the minority interests by the sum of SHCI’s units and the units held by the minority interests, all calculated based on the units outstanding at the end of the period. Net income (loss) is allocated to minority interests in SHC Funding based on their weighted average ownership percentages during the period. The ownership percentage is calculated by dividing the number of units held by the minority interests by the sum of SHCI’s units and the units held by the minority interests, all calculated based on the weighted average days outstanding.
Prior to the Offering, minority interests represented the limited partners’ interests in limited partnerships that were controlled by SHCI’s predecessor, SHC LLC. The carrying value of the minority interest was increased by the minority interests’ share of partnership earnings and reduced by their semi-annual partnership cash distributions as well as return of capital distributions. SHC LLC’s units issued upon exchange of the limited partnership units have been accounted for at the cost of the minority interest surrendered.
(e) The Company has an asset management agreement with SHC LLC, under which the Company manages the day-to-day business of SHC LLC for an annual fee of $5,000,000, payable monthly in arrears. The term of the agreement is for five years, commenced on June 29, 2004 and will renew automatically unless prior written notice is given. In addition, SHC LLC has the right to terminate the agreement if certain events occur. On each of September 8, 2005 and November 9, 2005, SHC LLC disposed of a property. SHC LLC has also entered into a purchase and sale agreement for the disposition of one additional property. As a result of the expected disposition of these three properties during 2005, beginning on January 1, 2006, the asset management fee is expected to be reduced by approximately $2,078,000 annually.
11
Supplemental Financial Information
Three and Nine Months Ended September 30, 2005 and 2004
Discontinued Operations
The results of operations of hotels sold or held for sale have been classified as discontinued operations and segregated in the consolidated statements of operations for all periods presented. On February 6, 2004, the Company sold its hotel located in Washington, D.C. that was held for sale as of December 31, 2003. Net sale proceeds aggregated $156,354,000. Additionally, the Company sold the Marriott Schaumburg on October 7, 2005 and the Embassy Suites Lake Buena Vista on October 27, 2005 for net sale proceeds aggregating $79,830,000. The assets and liabilities of these properties are classified as held for sale as of September 30, 2005 and the results of operations are included in income (loss) from discontinued operations for all periods presented. The following is a summary of income (loss) from discontinued operations for the three and nine months ended September 30, 2005 and 2004:
| | | | | | | | | | | | | | | | |
| | | Three Months Ended
September 30,
| | | Nine Months Ended
September 30,
| |
| | | 2005
| | | 2004
| | | 2005
| | | 2004
| |
| | | (in thousands) | | | (in thousands) | |
Hotel operating revenue | | $ | 7,166 | | | $ | 6,954 | | | $ | 22,599 | | | $ | 21,384 | |
Lease revenue | | | — | | | | — | | | | — | | | | 257 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Total revenues | | | 7,166 | | | | 6,954 | | | | 22,599 | | | | 21,641 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Operating costs and expenses | | | 5,238 | | | | 5,558 | | | | 16,123 | | | | 16,348 | |
Depreciation and amortization | | | 948 | | | | 1,052 | | | | 2,782 | | | | 3,126 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Total operating costs and expenses | | | 6,186 | | | | 6,610 | | | | 18,905 | | | | 19,474 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Operating income | | | 980 | | | | 344 | | | | 3,694 | | | | 2,167 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Interest expense | | | (493 | ) | | | (372 | ) | | | (1,376 | ) | | | (2,567 | ) |
Interest income | | | — | | | | 1 | | | | 13 | | | | 10 | |
Loss on early extinguishment of debt | | | — | | | | — | | | | — | | | | (1,060 | ) |
Income tax expense | | | (1 | ) | | | — | | | | (33 | ) | | | — | |
Gain on sale of assets | | | — | | | | — | | | | — | | | | 75,982 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Income (loss) from discontinued operations | | $ | 486 | | | $ | (27 | ) | | $ | 2,298 | | | $ | 74,532 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
12
Supplemental Financial Information
September 30, 2005
Non-GAAP Financial Measures
In addition to REIT hotel income, four other non-GAAP financial measures are presented for the Company that we believe are useful to investors as key measures of our operating performance: Funds from Operations, or FFO; Fully Converted FFO; Earnings Before Interest Expense, Taxes, Depreciation and Amortization, or EBITDA; and Adjusted EBITDA. Reconciliation of these measures to net (loss) income, the most directly comparable GAAP measure, is set forth in the following tables.
We compute FFO in accordance with standards established by the National Association of Real Estate Investment Trusts, or NAREIT, which adopted a definition of FFO in order to promote an industry-wide standard measure of REIT operating performance that would not have certain drawbacks associated with net (loss) income under GAAP. NAREIT defines FFO as net (loss) income (computed in accordance with GAAP) excluding (losses) or gains from sales of property plus real estate-related depreciation and amortization, and after adjustments for our portion of these items related to unconsolidated partnerships and joint ventures. We also present Fully Converted FFO, which is FFO plus convertible debt interest expense and minority interest expense on convertible minority interests. We believe that the presentation of FFO and Fully Converted FFO provides useful information to 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.
EBITDA represents net (loss) income excluding: (i) interest expense, (ii) income tax expense, including deferred income tax benefits and expenses applicable to our foreign subsidiaries and income taxes applicable to sale of assets; and (iii) depreciation and amortization. EBITDA also excludes interest expense, income tax expense and depreciation and amortization of our equity method investments. EBITDA for 2005 and 2004 is presented on a full participation basis, which means we have assumed conversion of all operating partnership minority interests into the Company’s common shares. We believe this treatment of minority interest provides more useful information for management and our investors and appropriately considers our current capital structure. We also present Adjusted EBITDA, which eliminates the effect of realizing deferred gains on our sale leasebacks. We believe EBITDA and Adjusted EBITDA are useful to an investor in evaluating our operating performance because they provide 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 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 Adjusted EBITDA as measures in determining the value of acquisitions and dispositions.
We caution investors that amounts presented in accordance with our definitions of FFO, Fully Converted FFO, EBITDA and Adjusted 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, Fully Converted FFO, EBITDA and Adjusted EBITDA should not be considered as an alternative measure of our net (loss) income or operating performance. FFO, Fully Converted FFO, EBITDA and Adjusted 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, Fully Converted FFO, EBITDA and Adjusted 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. In addition, you should be aware that adverse economic and market conditions might negatively impact our cash flow. Below, we have provided a quantitative reconciliation of FFO, Fully Converted FFO, EBITDA and Adjusted EBITDA to the most directly comparable GAAP financial performance measure, which is net (loss) income , and provide an explanatory description by footnote of the items excluded from FFO, Fully Converted FFO, EBITDA and Adjusted EBITDA. Prior year amounts have been adjusted to conform to the current year presentation of a fully converted basis.
13
Supplemental Financial Information
Three and Nine Months Ended September 30, 2005 and 2004
Reconciliation of Net (Loss) Income Available to Common Shareholders to EBITDA and Adjusted EBITDA
(in thousands)
| | | | | | | | | | | | | | | | |
| | | Three Months Ended
September 30,
| | | Nine Months Ended
September 30,
| |
| | | 2005
| | | 2004
| | | 2005
| | | 2004
| |
Net (loss) income available to common shareholders | | $ | (1,227 | ) | | $ | (3,109 | ) | | $ | 9,501 | | | $ | 22,751 | |
Depreciation and amortization - continuing operations | | | 13,278 | | | | 9,701 | | | | 36,256 | | | | 47,684 | |
Depreciation and amortization - discontinued operations | | | 948 | | | | 1,052 | | | | 2,782 | | | | 3,126 | |
Interest expense - continuing operations | | | 10,215 | | | | 5,882 | | | | 27,531 | | | | 55,107 | |
Interest expense - discontinued operations | | | 493 | | | | 372 | | | | 1,376 | | | | 2,567 | |
Income taxes - continuing operations | | | 140 | | | | 669 | | | | 2,980 | | | | 983 | |
Income taxes - discontinued operations | | | 1 | | | | — | | | | 33 | | | | — | |
Minority interests | | | 235 | | | | (989 | ) | | | 4,339 | | | | (1,917 | ) |
Adjustments from unconsolidated affiliates | | | 1,113 | | | | 1,329 | | | | 3,135 | | | | 4,608 | |
Preferred shareholder dividend | | | 2,125 | | | | — | | | | 4,628 | | | | — | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
EBITDA (a) | | | 27,321 | | | | 14,907 | | | | 92,561 | | | | 134,909 | |
Realized portion of deferred gain on sale leasebacks | | | (1,048 | ) | | | (1,122 | ) | | | (3,294 | ) | | | (1,122 | ) |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Adjusted EBITDA (a) | | $ | 26,273 | | | $ | 13,785 | | | $ | 89,267 | | | $ | 133,787 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
| (a) | EBITDA and Adjusted EBITDA have not been adjusted for the following amounts included in net (loss) income because these gains (losses) have either occurred during the prior two years or are reasonably likely to occur within two years (in thousands). |
| | • | | Loss on early extinguishment of debt from continuing operations amounted to $17 and $20,903 for the three and nine months ended September 30, 2004, respectively. |
| | • | | Loss on early extinguishment of debt from discontinued operations amounted to $1,060 for the nine months ended September 30, 2004. |
| | • | | Gain on sale of assets from discontinued operations amounted to $75,982 for the nine months ended September 30, 2004. |
14
Supplemental Financial Information
Three and Nine Months Ended September 30, 2005 and 2004
Reconciliation of Net (Loss) Income Available to Common Shareholders to
Funds From Operations (FFO) and FFO - Fully Converted
(in thousands)
| | | | | | | | | | | | | | | | |
| | | Three Months Ended
September 30,
| | | Nine Months Ended
September 30,
| |
| | | 2005
| | | 2004
| | | 2005
| | | 2004
| |
Net (loss) income available to common shareholders | | $ | (1,227 | ) | | $ | (3,109 | ) | | $ | 9,501 | | | $ | 22,751 | |
Depreciation and amortization - continuing operations | | | 13,278 | | | | 9,701 | | | | 36,256 | | | | 47,684 | |
Depreciation and amortization - discontinued operations | | | 948 | | | | 1,052 | | | | 2,782 | | | | 3,126 | |
Gain on sale of assets - continuing operations | | | — | | | | — | | | | (42 | ) | | | — | |
Gain on sale of assets - discontinued operations | | | — | | | | — | | | | — | | | | (75,982 | ) |
Realized portion of deferred gain on sale leasebacks | | | (1,048 | ) | | | (1,122 | ) | | | (3,294 | ) | | | (1,122 | ) |
Deferred tax expense on realized portion of deferred gain on sale leasebacks | | | 320 | | | | 322 | | | | 995 | | | | 322 | |
Minority interests adjustments | | | (3,055 | ) | | | (2,807 | ) | | | (8,302 | ) | | | (2,931 | ) |
Adjustments from unconsolidated affiliates | | | 529 | | | | 881 | | | | 1,574 | | | | 2,680 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
FFO (a) | | | 9,745 | | | | 4,918 | | | | 39,470 | | | | (3,472 | ) |
Convertible debt interest expense | | | — | | | | — | | | | — | | | | 4,105 | |
Convertible minority interests | | | 3,290 | | | | 1,818 | | | | 12,641 | | | | 1,014 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
FFO - Fully Converted (a) | | $ | 13,035 | | | $ | 6,736 | | | $ | 52,111 | | | $ | 1,647 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
| (a) | FFO and Fully Converted FFO have not been adjusted for the following amounts included in net (loss) income because these gains (losses) have either occurred during the prior two years or are reasonably likely to occur within two years (in thousands). |
| | • | | Loss on early extinguishment of debt from continuing operations amounted to $17 and $20,903 for the three and nine months ended September 30, 2004, respectively. |
| | • | | Loss on early extinguishment of debt from discontinued operations amounted to $1,060 for the nine months ended September 30, 2004. |
15
Supplemental Financial Information
September 30, 2005
Debt Summary
(dollars in thousands)
| | | | | | | | | | | | | |
Debt
| | Encumbered Hotels
| | Interest Rate
| | | Spread over LIBOR
| | Loan Amount
| | | Maturity Date
|
Bank credit facility | | 14 | | 6.16 | %(a) | | 295 bp | | $ | — | | | June 2007 |
CMBS Floating Rate | | 9 | | 5.18 | % | | 141 bp | | | 275,000 | (b) | | Sept. 2006 |
CMBS Fixed Rate | | 3 | | 5.43 | % | | Fixed | | | 205,143 | | | July 2011 |
InterContinental Floating Rate | | 2 | | 5.52 | % | | 175 bp | | | 202,000 | | | April 2007 |
Other debt | | 1 | | 6.70 | % | | 300 bp | | | 6,918 | | | May 2014 |
| | | | | | | | | |
|
|
| | |
| | | | | | | | | | $ | 689,061 | | | |
| | | | | | | | | |
|
|
| | |
| (a) | Represents the weighted average interest rate for the nine months ended September 30, 2005. |
| (b) | Includes $35 million of mortgage debt related to Embassy Suites Lake Buena Vista Resort and Marriott Schaumburg that has been classified as liabilities of assets held for sale. |
| | | | | | | | |
Caps
| | LIBOR
Cap Rate
| | | Notional
Amount
| | Maturity
|
CMBS Floating Rate Cap | | 5.00 | % | | $ | 104,000 | | July 2006 |
CMBS Floating Rate Additional Cap | | 5.00 | % | | $ | 75,000 | | Sept. 2006 |
| | | | | | | | |
Swaps
| | Fixed Pay Rate
Against LIBOR
| | | Notional
Amount
| | Maturity
|
Swap A | | 3.62 | % | | $ | 96,000 | | June 2007 |
Swap B | | 4.59 | % | | $ | 75,000 | | April 2012 |
Swap C | | 4.42 | % | | $ | 75,000 | | April 2010 |
Swap D | | 4.12 | % | | $ | 50,000 | | June 2012 |
At September 30, 2005, future scheduled debt principal payments (including extension option) are as follows (including liabilities of assets held for sale):
| | | |
Years ended December 31,
| | Amounts
(in thousands)
|
2005 | | $ | 463 |
2006 | | | 2,903 |
2007 | | | 3,067 |
2008 | | | 3,209 |
2009 | | | 278,421 |
Thereafter | | | 400,998 |
| | |
|
|
Total | | $ | 689,061 |
| | |
|
|
Financing transactions in 2005:
On March 22, 2005, we amended the interest rate on the bank credit facility. Prior to the amendment, interest was payable monthly at either a base rate plus a spread of 2.50% or LIBOR plus a spread of 3.75%. Subsequent to the amendment, interest is payable monthly at either a base rate plus a spread of 1.70% or LIBOR plus a spread of 2.95%.
On April 1, 2005, the joint ventures (the Ventures) that own the InterContinental Chicago and Miami hotels completed three mortgage loan financings with German American Capital Corporation. Aggregate proceeds from these financings amounted to $202 million and are secured by mortgages on the two hotel properties purchased by the Ventures.
As required by the loan agreements described above, the Ventures purchased interest rate caps with notional amounts covering the entire $202 million of the floating rate notes. Concurrent with the purchase of the interest rate caps described above, SHC Funding entered into an agreement to sell caps with notional amounts of $202 million.
On April 12, 2005, the Company executed $150 million in corporate interest rate swap agreements and on June 7, 2005, the Company executed an additional $50 million corporate interest rate swap agreement.
On July 28, 2005, the Company signed an agreement to increase the bank credit facility from $120 million to $175 million.
16
Supplemental Financial Information
September 30, 2005
PORTFOLIO DATA
Portfolio at September 30, 2005
| | | | | | | | | | |
Hotel
| | Location
| | Number
of
Rooms
| | % of
Total
Rooms
| | | % of QTD
September 2005
Property
EBITDA
| |
United States: | | | | | | | | | | |
InterContinental Chicago (a) | | Chicago, IL | | 807 | | 11 | % | | 22 | % |
Hyatt Regency Phoenix | | Phoenix, AZ | | 696 | | 8 | % | | 0 | % |
Fairmont Chicago (b) | | Chicago, IL | | 692 | | 8 | % | | 8 | % |
InterContinental Miami (a) | | Miami, FL | | 641 | | 8 | % | | 2 | % |
Hilton Burbank Airport and Convention Center | | Burbank, CA | | 488 | | 6 | % | | 8 | % |
Marriott Rancho Las Palmas Resort | | Rancho Mirage, CA | | 444 | | 5 | % | | -4 | % |
Hyatt Regency La Jolla at Aventine | | La Jolla, CA | | 419 | | 5 | % | | 9 | % |
Marriott Lincolnshire Resort | | Lincolnshire, IL | | 390 | | 5 | % | | 6 | % |
Loews Santa Monica Beach Hotel | | Santa Monica, CA | | 342 | | 4 | % | | 15 | % |
Ritz-Carlton Half Moon Bay | | Half Moon Bay, CA | | 261 | | 3 | % | | 12 | % |
| | | | |
| |
|
| |
|
|
Total United States | | | | 5,180 | | 63 | % | | 78 | % |
| | | | |
| |
|
| |
|
|
Mexican: | | | | | | | | | | |
Four Seasons Mexico City | | Mexico City, Mexico | | 240 | | 3 | % | | 3 | % |
Four Seasons Punta Mita Resort | | Punta Mita, Mexico | | 140 | | 2 | % | | 7 | % |
| | | | |
| |
|
| |
|
|
Total Mexican | | | | 380 | | 5 | % | | 10 | % |
| | | | |
| |
|
| |
|
|
European: | | | | | | | | | | |
InterContinental Prague (c) | | Prague, Czech Republic | | 372 | | 4 | % | | 5 | % |
Marriott Hamburg (d) | | Hamburg, Germany | | 277 | | 3 | % | | N/A | |
Paris Marriott Champs Elysees (e) | | Paris, France | | 192 | | 2 | % | | N/A | |
| | | | |
| |
|
| |
|
|
Total European | | | | 841 | | 9 | % | | 5 | % |
| | | | |
| |
|
| |
|
|
Assets Under Redevelopment and Assets Held for Sale: | | | | | | | | | | |
Hyatt Regency New Orleans (f) | | New Orleans, LA | | 1,184 | | 14 | % | | 0 | % |
Marriott Schaumburg (g) | | Schaumburg, IL | | 398 | | 5 | % | | 4 | % |
Embassy Suites Lake Buena Vista Resort (g) | | Orlando, FL | | 333 | | 4 | % | | 3 | % |
| | | | |
| |
|
| |
|
|
Total Assets Under Redevelopment and Assets Held for Sale | | | | 1,915 | | 23 | % | | 7 | % |
| | | | |
| |
|
| |
|
|
| | | | | 8,316 | | 100 | % | | 100 | % |
| | | | |
| |
|
| |
|
|
| (a) | On April 1, 2005, we purchased an 85% controlling interest in the joint ventures that own the InterContinental Chicago and Miami hotels. We consolidate these hotels for reporting purposes. |
| (b) | On September 1, 2005, we purchased the Fairmont Chicago for $158.0 million. We have included the results of this hotel in the percentage of Property EBITDA calculation above only for our period of ownership. |
| (c) | We have a 35% interest in the joint venture that owns the InterContinental Prague and account for our investment under the equity method of accounting. Our equity in earnings of the hotel joint venture is included in other income (expenses), net in our consolidated statements of operations. The percentage of Property EBITDA above has been calculated based on our 35% ownership. |
| (d) | On March 1, 2004, we acquired the 65% interest we did not previously own in the joint venture that leases the Hamburg Marriott. On June 29, 2004, we eliminated the collateralized guarantee on the sale leaseback related to the property and no longer have continuing involvement which required treating the transaction as a financing. Accordingly, a sale of the Hamburg Marriott was recorded and the leaseback has now been recorded as an operating lease as of June 29, 2004. SHCI eliminated the finance obligation on the consolidated balance sheet and now records lease expense instead of mortgage interest and depreciation expense. Since we only have a leasehold interest in this property, we have not included it in the percentage of Property EBITDA calculation above. |
| (e) | On June 29, 2004, we eliminated the collateralized guarantee related to the Paris Marriott Champs Elysees and no longer have continuing involvement as defined by generally accepted accounting principles. Accordingly, a sale of the Paris Marriott Champs Elysees was recorded and the leaseback has now been recorded as an operating lease as of June 29, 2004. SHCI eliminated the finance obligation on the consolidated balance sheet and now records lease expense instead of mortgage interest and depreciation expense. Since we only have a leasehold interest in this property, we have not included it in the percentage of Property EBITDA calculation above. |
| (f) | In August 2005, a hurricane caused substantial damage to the Hyatt Regency New Orleans property. The hurricane damage also caused significant interruption to the business and the hotel has ceased significant operations. The property is currently under redevelopment. For purposes of the analysis above, the number of rooms represents fully operational rooms prior to the hurricane. |
| (g) | As of September 30, 2005, these properties have been classified as held for sale. Therefore, their results of operations have been included in income (loss) from discontinued operations for the three and nine months ended September 30, 2005 and 2004. However, for purposes of this comparison, the percentage of Property EBITDA calculation above reflects their operating results before they were reclassified to discontinued operations. |
17
Supplemental Financial Information
Four Quarters Ended September 30, 2005
Seasonality by Geographic Region
Same store revenues have been adjusted to show hotel performance on a comparable quarter-over-quarter basis. Adjustments include (i) exclusion of Hyatt Regency New Orleans due to a hurricane that ceased significant operations in August; (ii) exclusion of Marriott Schaumburg and Embassy Suites Lake Buena Vista Resort as their results of operations were reclassified to discontinued operations; and (iii) presentation of the European hotels without regard to either ownership structure or leaseholds. Acquisition properties and the related dates of purchase are as follows: Ritz-Carlton Half Moon Bay (August 24, 2004), InterContinental Chicago and InterContinental Miami (April 1, 2005), and Fairmont Chicago (September 1, 2005).
United States Hotels (as of September 30, 2005)
Acquisition property revenues - 4 Properties and 2,401 Rooms
Same store property revenues - - 6 Properties and 2,779 Rooms
| | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended
| | | | |
| | | December 2004
| | | March 31, 2005
| | | June 30, 2005
| | | September 30, 2005
| | | Total
| |
Acquisition property revenues | | $ | 12,171 | | | $ | 9,648 | | | $ | 41,839 | | | $ | 46,627 | | | $ | 110,285 | |
Same store property revenues | | | 52,963 | | | | 57,589 | | | | 53,918 | | | | 48,805 | | | | 213,275 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Total revenues | | $ | 65,134 | | | $ | 67,237 | | | $ | 95,757 | | | $ | 95,432 | | | $ | 323,560 | |
Same store seasonality % | | | 24.8 | % | | | 27.0 | % | | | 25.3 | % | | | 22.9 | % | | | 100.0 | % |
Mexican Hotels (as of September 30, 2005)
Same store property revenues - 2 Properties and 380 Rooms
| | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended
| | | | |
| | | December 2004
| | | March 31, 2005
| | | June 30, 2005
| | | September 30, 2005
| | | Total
| |
Same store property revenues | | $ | 15,064 | | | $ | 17,085 | | | $ | 15,990 | | | $ | 12,646 | | | $ | 60,785 | |
Same store seasonality % | | | 24.8 | % | | | 28.1 | % | | | 26.3 | % | | | 20.8 | % | | | 100.0 | % |
Total North American Hotels (as of September 30, 2005)
Acquisition property revenues - 4 Properties and 2,401 Rooms
Same store property revenues - 8 Properties and 3,159 Rooms
| | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended
| | | | |
| | | December 2004
| | | March 31, 2005
| | | June 30, 2005
| | | September 30, 2005
| | | Total
| |
Acquisition property revenue | | $ | 12,171 | | | $ | 9,648 | | | $ | 41,839 | | | $ | 46,627 | | | $ | 110,285 | |
Same store property revenue | | | 68,027 | | | | 74,674 | | | | 69,908 | | | | 61,451 | | | | 274,060 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Total revenues | | $ | 80,198 | | | $ | 84,322 | | | $ | 111,747 | | | $ | 108,078 | | | $ | 384,345 | |
Same store seasonality % | | | 24.8 | % | | | 27.2 | % | | | 25.5 | % | | | 22.5 | % | | | 100.0 | % |
European Hotels (as of September 30, 2005)
Same store property revenues - 3 Properties and 841 Rooms
| | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended
| | | | |
| | | December 2004
| | | March 31, 2005
| | | June 30, 2005
| | | September 30, 2005
| | | Total
| |
Same store property revenues | | $ | 19,999 | | | $ | 16,708 | | | $ | 23,179 | | | $ | 23,582 | | | $ | 83,468 | |
Same store seasonality % | | | 24.0 | % | | | 20.0 | % | | | 27.8 | % | | | 28.2 | % | | | 100.0 | % |
18
Supplemental Financial Information
Three and Nine Months Ended September 30, 2005 and 2004
Operating Statistics by Geographic Region
Operating results have been adjusted to show hotel performance on a comparable quarter-over-quarter basis. Adjustments include (i) exclusion of the seven properties distributed out of the Company in connection with the IPO; (ii) exclusion of Ritz-Carlton Half Moon Bay, InterContinental Chicago, InterContinental Miami and Fairmont Chicago’s partial year results; (iii) exclusion of Hyatt Regency New Orleans due to a hurricane that ceased significant operations in August; (iv) exclusion of Marriott Schaumburg and Embassy Suites Lake Buena Vista Resort as their results of operations were reclassified to discontinued operations; and (v) presentation of the European hotels without regard to either ownership structure or leaseholds.
United States Hotels (as of September 30, 2005)
6 Properties
2,779 Rooms
| | | | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended
September 30,
| | | Nine Months Ended September 30,
| |
| | | 2005
| | | 2004
| | | Change
| | | 2005
| | | 2004
| | | Change
| |
Average Daily Rate | | $ | 149.75 | | | $ | 139.51 | | | 7.3 | % | | $ | 157.66 | | | $ | 147.80 | | | 6.7 | % |
Average Occupancy | | | 70.2 | % | | | 68.5 | % | | 1.7 | pts | | | 73.1 | % | | | 70.6 | % | | 2.5 | pts |
RevPAR | | $ | 105.13 | | | $ | 95.54 | | | 10.0 | % | | $ | 115.19 | | | $ | 104.28 | | | 10.5 | % |
Total RevPAR | | $ | 196.01 | | | $ | 178.67 | | | 9.7 | % | | $ | 216.30 | | | $ | 198.57 | | | 8.9 | % |
Property EBITDA Margin | | | 19.6 | % | | | 16.3 | % | | 3.3 | pts | | | 23.4 | % | | | 21.5 | % | | 1.9 | pts |
Mexican Hotels (as of September 30, 2005)
2 Properties
380 Rooms
| | | | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended
September 30,
| | | Nine Months Ended September 30,
| |
| | | 2005
| | | 2004
| | | Change
| | | 2005
| | | 2004
| | | Change
| |
Average Daily Rate | | $ | 305.59 | | | $ | 268.48 | | | 13.8 | % | | $ | 365.39 | | | $ | 346.07 | | | 5.6 | % |
Average Occupancy | | | 66.3 | % | | | 61.3 | % | | 5.0 | pts | | | 70.6 | % | | | 67.4 | % | | 3.2 | pts |
RevPAR | | $ | 202.47 | | | $ | 164.46 | | | 23.1 | % | | $ | 257.86 | | | $ | 233.09 | | | 10.6 | % |
Total RevPAR | | $ | 361.73 | | | $ | 292.39 | | | 23.7 | % | | $ | 440.73 | | | $ | 391.11 | | | 12.7 | % |
Property EBITDA Margin | | | 21.9 | % | | | 17.8 | % | | 4.1 | pts | | | 30.9 | % | | | 30.6 | % | | 0.3 | pts |
Total North American Hotels (as of September 30, 2005)
8 Properties
3,159 Rooms
| | | | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended
September 30,
| | | Nine Months Ended September 30,
| |
| | | 2005
| | | 2004
| | | Change
| | | 2005
| | | 2004
| | | Change
| |
Average Daily Rate | | $ | 167.98 | | | $ | 153.82 | | | 9.2 | % | | $ | 182.40 | | | $ | 171.07 | | | 6.6 | % |
Average Occupancy | | | 69.7 | % | | | 67.6 | % | | 2.1 | pts | | | 72.8 | % | | | 70.2 | % | | 2.6 | pts |
RevPAR | | $ | 117.12 | | | $ | 103.98 | | | 12.6 | % | | $ | 132.71 | | | $ | 120.03 | | | 10.6 | % |
Total RevPAR | | $ | 216.41 | | | $ | 192.60 | | | 12.4 | % | | $ | 243.86 | | | $ | 222.12 | | | 9.8 | % |
Property EBITDA Margin | | | 20.1 | % | | | 16.6 | % | | 3.5 | pts | | | 25.0 | % | | | 23.5 | % | | 1.5 | pts |
19
Supplemental Financial Information
Three and Nine Months Ended September 30, 2005 and 2004
European Hotels (as of September 30, 2005)
3 Properties
841 Rooms
| | | | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended
September 30,
| | | Nine Months Ended September 30,
| |
| | | 2005
| | | 2004
| | | Change
| | | 2005
| | | 2004
| | | Change
| |
Average Daily Rate | | $ | 265.23 | | | $ | 256.27 | | | 3.5 | % | | $ | 249.41 | | | $ | 231.08 | | | 7.9 | % |
Average Occupancy | | | 86.7 | % | | | 87.2 | % | | (0.5 | ) pts | | | 80.1 | % | | | 81.1 | % | | (1.0 | ) pts |
RevPAR | | $ | 229.86 | | | $ | 223.59 | | | 2.8 | % | | $ | 199.80 | | | $ | 187.42 | | | 6.6 | % |
Total RevPAR | | $ | 304.79 | | | $ | 297.38 | | | 2.5 | % | | $ | 276.45 | | | $ | 260.40 | | | 6.2 | % |
Property EBITDA Margin | | | 46.0 | % | | | 45.1 | % | | 0.9 | pts | | | 41.3 | % | | | 41.5 | % | | (0.2 | ) pts |
20
Supplemental Financial Information
Three and Nine Months Ended September 30, 2005 and 2004
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 nine months ended September 30, 2005 and 2004. Property EBITDA reflects property net operating income plus depreciation and amortization.
| | | | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended September 30,
| | | Nine Months Ended September 30,
| |
| | | 2005
| | | 2004
| | | % Change
| | | 2005
| | | 2004
| | | % Change
| |
| | | | | | |
| HYATT REGENCY NEW ORLEANS | | | | | | | | | | | | | | | | | | | | | | |
Selected Financial Information (For purposes of comparison, we have provided financial information for this property as if the hotel was subject to a management agreement (it was on a lease prior to June 2004)): | |
Total revenues | | $ | 6,024 | | | $ | 11,412 | | | (47.2 | )% | | $ | 37,981 | | | $ | 44,314 | | | (14.3 | )% |
Property EBITDA | | $ | 126 | | | $ | 2,234 | | | (94.4 | )% | | $ | 9,962 | | | $ | 12,604 | | | (21.0 | )% |
|
Selected Operating Information (The number of rooms for the three and nine months ended September 30, 2005 was calculated using an average rate assuming no rooms were in use for the month of September due to the hurricane): | |
Rooms | | | 798 | | | | 1,184 | | | (386 | ) | | | 1,054 | | | | 1,184 | | | (130 | ) |
Average occupancy | | | 51.3 | % | | | 53.5 | % | | (2.2 | ) pts | | | 59.2 | % | | | 62.8 | % | | (3.6 | ) pts |
ADR | | $ | 110.20 | | | $ | 119.51 | | | (7.8 | )% | | $ | 136.55 | | | $ | 139.12 | | | (1.8 | )% |
RevPAR | | $ | 56.51 | | | $ | 63.97 | | | (11.7 | )% | | $ | 80.85 | | | $ | 87.37 | | | (7.5 | )% |
Total RevPAR | | $ | 82.06 | | | $ | 104.77 | | | (21.7 | )% | | $ | 132.01 | | | $ | 136.60 | | | (3.4 | )% |
| | | | | | |
| INTERCONTINENTAL CHICAGO | | | | | | | | | | | | | | | | | | | | | | |
Selected Financial Information: | |
Total revenues | | $ | 17,621 | | | | N/A | | | N/A | | | | N/A | | | | N/A | | | N/A | |
Property EBITDA | | $ | 6,164 | | | | N/A | | | N/A | | | | N/A | | | | N/A | | | N/A | |
|
Selected Operating Information (This table includes statistical information only for our full periods of ownership. For the three months ended September 30, 2004, average occupancy was 83.0%, ADR was $162.99, RevPAR was $135.29 and Total RevPAR was $209.30. For the nine months ended September 30, 2005, average occupancy was 73.2%, ADR was $177.94, RevPAR was $130.16 and Total RevPAR was $200.97. For the nine months ended September 30, 2004, average occupancy was 72.0%, ADR was $159.88, RevPAR was $115.05 and Total RevPAR was $181.55): | |
| | | | | | |
Rooms | | | 807 | | | | N/A | | | N/A | | | | N/A | | | | N/A | | | N/A | |
Average occupancy | | | 83.0 | % | | | N/A | | | N/A | | | | N/A | | | | N/A | | | N/A | |
ADR | | $ | 182.46 | | | | N/A | | | N/A | | | | N/A | | | | N/A | | | N/A | |
RevPAR | | $ | 151.47 | | | | N/A | | | N/A | | | | N/A | | | | N/A | | | N/A | |
Total RevPAR | | $ | 237.34 | | | | N/A | | | N/A | | | | N/A | | | | N/A | | | N/A | |
| | | | | | |
| HYATT REGENCY PHOENIX | | | | | | | | | | | | | | | | | | | | | | |
Selected Financial Information: | |
Total revenues | | $ | 5,135 | | | $ | 5,913 | | | (13.2 | )% | | $ | 26,836 | | | $ | 26,939 | | | (0.4 | )% |
Property EBITDA | | $ | (124 | ) | | $ | 221 | | | (156.1 | )% | | $ | 6,809 | | | $ | 7,611 | | | (10.5 | )% |
| | | | | | |
Selected Operating Information: | | | | | | | | | | | | | | | | | | | | | | |
Rooms | | | 696 | | | | 712 | | | (16 | ) | | | 696 | | | | 712 | | | (16 | ) |
Average occupancy | | | 47.2 | % | | | 56.7 | % | | (9.5 | ) pts | | | 66.0 | % | | | 65.0 | % | | 1.0 | pts |
ADR | | $ | 100.59 | | | $ | 100.49 | | | 0.1 | % | | $ | 132.60 | | | $ | 132.20 | | | 0.3 | % |
RevPAR | | $ | 47.52 | | | $ | 56.97 | | | (16.6 | )% | | $ | 87.51 | | | $ | 85.96 | | | 1.8 | % |
Total RevPAR | | $ | 80.19 | | | $ | 90.27 | | | (11.2 | )% | | $ | 141.24 | | | $ | 138.09 | | | 2.3 | % |
21
Supplemental Financial Information
Three and Nine Months Ended September 30, 2005 and 2004
| | | | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended September 30,
| | | Nine Months Ended September 30,
| |
| | | 2005
| | | 2004
| | | %
Change
| | | 2005
| | | 2004
| | | %
Change
| |
FAIRMONT CHICAGO | | | | | | | | | | | | | | | | | | | | | | |
Selected Financial and Operating Information (No table has been provided since we did not own the property for the entire periods presented. For the three months ended September 30, 2005, average occupancy was 82.2%, ADR was $189.86, RevPAR was $156.15 and Total RevPAR was $258.99. For the three months ended September 30, 2004, average occupancy was 78.8%, ADR was $170.96, RevPAR was $134.79 and Total RevPAR was $225.21. For the nine months ended September 30, 2005, average occupancy was 75.1%, ADR was $181.44, RevPAR was $136.21 and Total RevPAR was $232.56. For the nine months ended September 30, 2004, average occupancy was 66.7%, ADR was $171.20, RevPAR was $114.27 and Total RevPAR was $197.17): | |
| | | | | | |
INTERCONTINENTAL MIAMI | | | | | | | | | | | | | | | | | | | | | | |
Selected Financial Information: | | | | | | | | | | | | | | | | | | | | | | |
Total revenues | | $ | 7,977 | | | | N/A | | | N/A | | | | N/A | | | | N/A | | | N/A | |
Property EBITDA | | $ | 474 | | | | N/A | | | N/A | | | | N/A | | | | N/A | | | N/A | |
|
Selected Operating Information (This table includes statistical information only for our full periods of ownership. For the three months ended September 30, 2004, average occupancy was 50.8%, ADR was $105.42, RevPAR was $53.50 and Total RevPAR was $92.20. For the nine months ended September 30, 2005, average occupancy was 73.9%, ADR was $150.76, RevPAR was $111.35 and Total RevPAR was $193.24. For the nine months ended September 30, 2004, average occupancy was 65.0%, ADR was $137.60, RevPAR was $89.39 and Total RevPAR was $158.28): | |
| | | | | | |
Rooms | | | 641 | | | | N/A | | | N/A | | | | N/A | | | | N/A | | | N/A | |
Average occupancy | | | 65.0 | % | | | N/A | | | N/A | | | | N/A | | | | N/A | | | N/A | |
ADR | | $ | 119.30 | | | | N/A | | | N/A | | | | N/A | | | | N/A | | | N/A | |
RevPAR | | $ | 77.57 | | | | N/A | | | N/A | | | | N/A | | | | N/A | | | N/A | |
Total RevPAR | | $ | 135.27 | | | | N/A | | | N/A | | | | N/A | | | | N/A | | | N/A | |
|
HILTON BURBANK AIRPORT AND CONVENTION CENTER | |
Selected Financial Information: | | | | | | | | | | | | | | | | | | | | | | |
Total revenues | | $ | 7,292 | | | $ | 5,746 | | | 26.9 | % | | $ | 21,351 | | | $ | 17,569 | | | 21.5 | % |
Property EBITDA | | $ | 2,273 | | | $ | 1,445 | | | 57.3 | % | | $ | 6,858 | | | $ | 4,749 | | | 44.4 | % |
| | | | | | |
Selected Operating Information: | | | | | | | | | | | | | | | | | | | | | | |
Rooms | | | 488 | | | | 488 | | | — | | | | 488 | | | | 488 | | | — | |
Average occupancy | | | 76.7 | % | | | 61.2 | % | | 15.5 | pts | | | 75.4 | % | | | 63.4 | % | | 12.0 | pts |
ADR | | $ | 125.87 | | | $ | 114.33 | | | 10.1 | % | | $ | 123.53 | | | $ | 113.98 | | | 8.4 | % |
RevPAR | | $ | 96.48 | | | $ | 69.94 | | | 37.9 | % | | $ | 93.09 | | | $ | 72.28 | | | 28.8 | % |
Total RevPAR | | $ | 162.42 | | | $ | 127.98 | | | 26.9 | % | | $ | 160.26 | | | $ | 131.39 | | | 22.0 | % |
22
Supplemental Financial Information
Three and Nine Months Ended September 30, 2005 and 2004
| | | | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended September 30,
| | | Nine Months Ended September 30,
| |
| | | 2005
| | | 2004
| | | % Change
| | | 2005
| | | 2004
| | | % Change
| |
MARRIOTT RANCHO LAS PALMAS RESORT | | | | | | | | | | | | | | | | | | | |
Selected Financial Information: | | | | | | | | | | | | | | | | | | | | | | |
Total revenues | | $ | 5,129 | | | $ | 4,807 | | | 6.7 | % | | $ | 24,447 | | | $ | 23,613 | | | 3.5 | % |
Property EBITDA | | $ | (1,204 | ) | | $ | (1,310 | ) | | 8.1 | % | | $ | 1,890 | | | $ | 1,898 | | | (0.4 | )% |
| | | | | | |
Selected Operating Information: | | | | | | | | | | | | | | | | | | | | | | |
Rooms | | | 444 | | | | 444 | | | — | | | | 444 | | | | 444 | | | — | |
Average occupancy | | | 65.1 | % | | | 63.9 | % | | 1.2 | pts | | | 69.4 | % | | | 69.9 | % | | (0.5 | ) pts |
ADR | | $ | 97.49 | | | $ | 96.30 | | | 1.2 | % | | $ | 153.78 | | | $ | 145.29 | | | 5.8 | % |
RevPAR | | $ | 63.45 | | | $ | 61.50 | | | 3.2 | % | | $ | 106.73 | | | $ | 101.58 | | | 5.1 | % |
Total RevPAR | | $ | 137.52 | | | $ | 128.89 | | | 6.7 | % | | $ | 218.50 | | | $ | 211.04 | | | 3.5 | % |
| | | | | |
HYATT REGENCY LA JOLLA AT AVENTINE | | | | | | | | | | | | | | | | | | | |
Selected Financial Information: | | | | | | | | | | | | | | | | | | | | | | |
Total revenues | | $ | 9,908 | | | $ | 8,920 | | | 11.1 | % | | $ | 28,859 | | | $ | 25,029 | | | 15.3 | % |
Property EBITDA | | $ | 2,509 | | | $ | 1,990 | | | 26.1 | % | | $ | 6,934 | | | $ | 4,831 | | | 43.5 | % |
| | | | | | |
Selected Operating Information: | | | | | | | | | | | | | | | | | | | | | | |
Rooms | | | 419 | | | | 419 | | | — | | | | 419 | | | | 419 | | | — | |
Average occupancy | | | 84.5 | % | | | 80.2 | % | | 4.3 | pts | | | 79.7 | % | | | 76.4 | % | | 3.3 | pts |
ADR | | $ | 165.45 | | | $ | 161.36 | | | 2.5 | % | | $ | 164.39 | | | $ | 151.91 | | | 8.2 | % |
RevPAR | | $ | 139.77 | | | $ | 129.43 | | | 8.0 | % | | $ | 131.04 | | | $ | 116.11 | | | 12.9 | % |
Total RevPAR | | $ | 257.03 | | | $ | 231.40 | | | 11.1 | % | | $ | 252.29 | | | $ | 218.01 | | | 15.7 | % |
| | | | | |
MARRIOTT SCHAUMBURG | | | | | | | | | | | | | | | | | | | |
Selected Financial Information (For purposes of comparison, we have provided financial information for this property before the operating results were reclassified to discontinued operations): | |
Total revenues | | $ | 3,952 | | | $ | 3,604 | | | 9.7 | % | | $ | 11,414 | | | $ | 10,736 | | | 6.3 | % |
Property EBITDA | | $ | 1,173 | | | $ | 639 | | | 83.6 | % | | $ | 3,064 | | | $ | 1,940 | | | 57.9 | % |
| | | | | | |
Selected Operating Information: | | | | | | | | | | | | | | | | | | | | | | |
Rooms | | | 398 | | | | 398 | | | — | | | | 398 | | | | 398 | | | — | |
Average occupancy | | | 69.5 | % | | | 70.9 | % | | (1.4 | ) pts | | | 66.6 | % | | | 66.5 | % | | 0.1 pts | |
ADR | | $ | 112.99 | | | $ | 104.62 | | | 8.0 | % | | $ | 113.56 | | | $ | 106.30 | | | 6.8 | % |
RevPAR | | $ | 78.52 | | | $ | 74.17 | | | 5.9 | % | | $ | 75.59 | | | $ | 70.66 | | | 7.0 | % |
Total RevPAR | | $ | 118.21 | | | $ | 107.80 | | | 9.7 | % | | $ | 113.80 | | | $ | 107.04 | | | 6.3 | % |
| | | | | |
MARRIOTT LINCOLNSHIRE RESORT | | | | | | | | | | | | | | | | | | | |
Selected Financial Information: | | | | | | | | | | | | | | | | | | | | | | |
Total revenues | | $ | 9,297 | | | $ | 8,937 | | | 4.0 | % | | $ | 25,514 | | | $ | 25,893 | | | (1.5 | )% |
Property EBITDA | | $ | 1,816 | | | $ | 1,546 | | | 17.5 | % | | $ | 3,811 | | | $ | 3,729 | | | 2.2 | % |
| | | | | | |
Selected Operating Information: | | | | | | | | | | | | | | | | | | | | | | |
Rooms | | | 390 | | | | 390 | | | — | | | | 390 | | | | 390 | | | — | |
Average occupancy | | | 75.5 | % | | | 76.4 | % | | (0.9 | ) pts | | | 66.3 | % | | | 73.3 | % | | (7.0 | ) pts |
ADR | | $ | 121.89 | | | $ | 115.28 | | | 5.7 | % | | $ | 120.44 | | | $ | 108.77 | | | 10.7 | % |
RevPAR | | $ | 91.99 | | | $ | 88.02 | | | 4.5 | % | | $ | 79.85 | | | $ | 79.68 | | | 0.2 | % |
Total RevPAR | | $ | 283.79 | | | $ | 272.80 | | | 4.0 | % | | $ | 259.61 | | | $ | 263.46 | | | (1.5 | )% |
23
Supplemental Financial Information
Three and Nine Months Ended September 30, 2005 and 2004
| | | | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended September 30,
| | | Nine Months Ended September 30,
| |
| | | 2005
| | | 2004
| | | % Change
| | | 2005
| | | 2004
| | | % Change
| |
LOEWS SANTA MONICA BEACH HOTEL | | | | | | | | | | | | | | | | | | | | | | |
Selected Financial Information: | | | | | | | | | | | | | | | | | | | | | | |
Total revenues | | $ | 12,044 | | | $ | 10,428 | | | 15.5 | % | | $ | 33,305 | | | $ | 29,298 | | | 13.7 | % |
Property EBITDA | | $ | 4,298 | | | $ | 3,397 | | | 26.5 | % | | $ | 11,137 | | | $ | 9,106 | | | 22.3 | % |
| | | | | | |
Selected Operating Information: | | | | | | | | | | | | | | | | | | | | | | |
Rooms | | | 342 | | | | 342 | | | — | | | | 342 | | | | 342 | | | — | |
Average occupancy | | | 90.8 | % | | | 86.4 | % | | 4.4 | pts | | | 87.5 | % | | | 83.0 | % | | 4.5 | pts |
ADR | | $ | 281.16 | | | $ | 253.57 | | | 10.9 | % | | $ | 263.92 | | | $ | 244.09 | | | 8.1 | % |
RevPAR | | $ | 255.36 | | | $ | 219.04 | | | 16.6 | % | | $ | 231.00 | | | $ | 202.62 | | | 14.0 | % |
Total RevPAR | | $ | 382.79 | | | $ | 331.43 | | | 15.5 | % | | $ | 356.71 | | | $ | 312.65 | | | 14.1 | % |
|
EMBASSY SUITES LAKE BUENA VISTA RESORT | |
Selected Financial Information (For purposes of comparison, we have provided financial information for this property before the operating results were reclassified to discontinued operations): | | | | |
Total revenues | | $ | 3,214 | | | $ | 3,351 | | | (4.1 | )% | | $ | 11,185 | | | $ | 10,649 | | | 5.0 | % |
Property EBITDA | | $ | 755 | | | $ | 757 | | | (0.3 | )% | | $ | 3,411 | | | $ | 3,096 | | | 10.2 | % |
| | | | | | |
Selected Operating Information: | | | | | | | | | | | | | | | | | | | | | | |
Rooms | | | 333 | | | | 333 | | | — | | | | 333 | | | | 333 | | | — | |
Average occupancy | | | 76.9 | % | | | 86.4 | % | | (9.5 | ) pts | | | 80.4 | % | | | 82.7 | % | | (2.3 | ) pts |
ADR | | $ | 117.08 | | | $ | 109.35 | | | 7.1 | % | | $ | 131.80 | | | $ | 121.66 | | | 8.3 | % |
RevPAR | | $ | 89.99 | | | $ | 94.49 | | | (4.8 | )% | | $ | 105.94 | | | $ | 100.65 | | | 5.3 | % |
Total RevPAR | | $ | 104.91 | | | $ | 109.38 | | | (4.1 | )% | | $ | 123.04 | | | $ | 116.71 | | | 5.4 | % |
| | | | | | |
RITZ-CARLTON HALF MOON BAY | | | | | | | | | | | | | | | | | | | | | | |
Selected Financial Information: | | | | | | | | | | | | | | | | | | | | | | |
Total revenues | | $ | 14,663 | | | | N/A | | | N/A | | | $ | 37,486 | | | | N/A | | | N/A | |
Property EBITDA | | $ | 3,257 | | | | N/A | | | N/A | | | $ | 6,451 | | | | N/A | | | N/A | |
|
Selected Operating Information (This table includes statistical information only for our full periods of ownership. For the three months ended September 30, 2004, average occupancy was 74.1%, ADR was $336.20 RevPAR was $249.19 and Total RevPAR was $569.36 and for the nine months ended September 30, 2004, average occupancy was 63.9%, ADR was $316.42, RevPAR was $202.31 and Total RevPAR was $480.77 ): | |
| | | | | | |
Rooms | | | 261 | | | | N/A | | | N/A | | | | 261 | | | | N/A | | | N/A | |
Average occupancy | | | 76.0 | % | | | N/A | | | N/A | | | | 68.6 | % | | | N/A | | | N/A | |
ADR | | $ | 356.22 | | | | N/A | | | N/A | | | $ | 326.57 | | | | N/A | | | N/A | |
RevPAR | | $ | 270.61 | | | | N/A | | | N/A | | | $ | 224.01 | | | | N/A | | | N/A | |
Total RevPAR | | $ | 610.65 | | | | N/A | | | N/A | | | $ | 526.10 | | | | N/A | | | N/A | |
24
Supplemental Financial Information
Three and Nine Months Ended September 30, 2005 and 2004
| | | | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended September 30,
| | | Nine Months Ended September 30,
| |
| | | 2005
| | | 2004
| | | % Change
| | | 2005
| | | 2004
| | | % Change
| |
FOUR SEASONS MEXICO CITY | | | | | | | | | | | | | | | | | | | | | | |
Selected Financial Information: | | | | | | | | | | | | | | | | | | | | | | |
Total revenues | | $ | 5,173 | | | $ | 4,783 | | | 8.2 | % | | $ | 16,496 | | | $ | 15,866 | | | 4.0 | % |
Property EBITDA | | $ | 872 | | | $ | 810 | | | 7.7 | % | | $ | 3,476 | | | $ | 3,777 | | | (8.0 | )% |
| | | | | | |
Selected Operating Information: | | | | | | | | | | | | | | | | | | | | | | |
Rooms | | | 240 | | | | 240 | | | — | | | | 240 | | | | 240 | | | — | |
Average occupancy | | | 59.9 | % | | | 57.6 | % | | 2.3 | pts | | | 64.0 | % | | | 62.0 | % | | 2.0 | pts |
ADR | | $ | 213.36 | | | $ | 207.46 | | | 2.8 | % | | $ | 219.47 | | | $ | 216.76 | | | 1.3 | % |
RevPAR | | $ | 127.73 | | | $ | 119.55 | | | 6.8 | % | | $ | 140.37 | | | $ | 134.33 | | | 4.5 | % |
Total RevPAR | | $ | 234.28 | | | $ | 216.62 | | | 8.2 | % | | $ | 251.77 | | | $ | 241.27 | | | 4.4 | % |
| | | | | | |
FOUR SEASONS PUNTA MITA RESORT | | | | | | | | | | | | | | | | | | | | | | |
Selected Financial Information: | | | | | | | | | | | | | | | | | | | | | | |
Total revenues | | $ | 7,473 | | | $ | 5,439 | | | 37.4 | % | | $ | 29,225 | | | $ | 24,856 | | | 17.6 | % |
Property EBITDA | | $ | 1,896 | | | $ | 1,011 | | | 87.5 | % | | $ | 10,667 | | | $ | 8,672 | | | 23.0 | % |
| | | | | | |
Selected Operating Information: | | | | | | | | | | | | | | | | | | | | | | |
Rooms | | | 140 | | | | 140 | | | — | | | | 140 | | | | 140 | | | — | |
Average occupancy | | | 77.2 | % | | | 67.5 | % | | 9.7 | pts | | | 81.9 | % | | | 76.6 | % | | 5.3 | pts |
ADR | | $ | 428.16 | | | $ | 357.81 | | | 19.7 | % | | $ | 560.75 | | | $ | 525.46 | | | 6.7 | % |
RevPAR | | $ | 330.59 | | | $ | 241.44 | | | 36.9 | % | | $ | 459.27 | | | $ | 402.38 | | | 14.1 | % |
Total RevPAR | | $ | 580.20 | | | $ | 422.28 | | | 37.4 | % | | $ | 764.65 | | | $ | 647.97 | | | 18.0 | % |
25
Supplemental Financial Information
Three and Nine Months Ended September 30, 2005 and 2004
| | | | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended September 30,
| | | Nine Months Ended September 30,
| |
| | | 2005
| | | 2004
| | | % Change
| | | 2005
| | | 2004
| | | % Change
| |
INTERCONTINENTAL PRAGUE | | | | | | | | | | | | | | | | | | | | | | |
Selected Financial Information (Amounts below are 100% of operations, of which SHCI owns 35%): | |
Total revenues | | $ | 9,068 | | | $ | 8,704 | | | 4.2 | % | | $ | 25,743 | | | $ | 24,532 | | | 4.9 | % |
Property EBITDA | | $ | 4,268 | | | $ | 4,109 | | | 3.9 | % | | $ | 11,746 | | | $ | 11,443 | | | 2.6 | % |
| | | | | | |
Selected Operating Information: | | | | | | | | | | | | | | | | | | | | | | |
Rooms | | | 372 | | | | 372 | | | — | | | | 372 | | | | 372 | | | — | |
Average Occupancy | | | 86.6 | % | | | 90.3 | % | | (3.7 | ) pts | | | 79.7 | % | | | 81.2 | % | | (1.5 | ) pts |
ADR | | $ | 205.35 | | | $ | 195.64 | | | 5.0 | % | | $ | 208.00 | | | $ | 194.93 | | | 6.7 | % |
RevPAR | | $ | 177.93 | | | $ | 176.76 | | | 0.7 | % | | $ | 165.77 | | | $ | 158.20 | | | 4.8 | % |
Total RevPAR | | $ | 264.96 | | | $ | 254.32 | | | 4.2 | % | | $ | 253.49 | | | $ | 240.68 | | | 5.3 | % |
| | | | | | |
MARRIOTT HAMBURG | | | | | | | | | | | | | | | | | | | | | | |
Selected Financial Information (Amounts below are 100% of operations, of which SHCI owned 35% through March 2004): | |
Total revenues | | $ | 4,165 | | | $ | 4,316 | | | (3.5 | )% | | $ | 12,619 | | | $ | 12,906 | | | (2.2 | )% |
Property EBITDA | | $ | 1,224 | | | $ | 1,189 | | | 2.9 | % | | $ | 3,786 | | | $ | 3,648 | | | 3.8 | % |
| | | | | | |
Selected Operating Information: | | | | | | | | | | | | | | | | | | | | | | |
Rooms | | | 277 | | | | 277 | | | — | | | | 277 | | | | 277 | | | — | |
Average occupancy | | | 84.7 | % | | | 82.7 | % | | 2.0 | pts | | | 78.3 | % | | | 80.3 | % | | (2.0 | ) pts |
ADR | | $ | 136.72 | | | $ | 139.83 | | | (2.2 | )% | | $ | 146.20 | | | $ | 145.63 | | | 0.4 | % |
RevPAR | | $ | 115.82 | | | $ | 115.71 | | | 0.1 | % | | $ | 114.46 | | | $ | 116.89 | | | (2.1 | )% |
Total RevPAR | | $ | 163.44 | | | $ | 169.36 | | | (3.5 | )% | | $ | 166.87 | | | $ | 170.04 | | | (1.9 | )% |
|
PARIS MARRIOTT CHAMPS ELYSEES | |
Selected Financial Information: | | | | | | | | | | | | | | | | | | | | | | |
Total revenues | | $ | 10,349 | | | $ | 9,989 | | | 3.6 | % | | $ | 25,108 | | | $ | 22,568 | | | 11.3 | % |
Property EBITDA | | $ | 5,360 | | | $ | 5,084 | | | 5.4 | % | | $ | 10,686 | | | $ | 9,797 | | | 9.1 | % |
| | | | | | |
Selected Operating Information: | | | | | | | | | | | | | | | | | | | | | | |
Rooms | | | 192 | | | | 192 | | | — | | | | 192 | | | | 192 | | | — | |
Average occupancy | | | 89.5 | % | | | 87.7 | % | | 1.8 | pts | | | 83.5 | % | | | 82.2 | % | | 1.3 | pts |
ADR | | $ | 553.01 | | | $ | 535.69 | | | 3.2 | % | | $ | 465.46 | | | $ | 420.52 | | | 10.7 | % |
RevPAR | | $ | 494.99 | | | $ | 469.97 | | | 5.3 | % | | $ | 388.86 | | | $ | 345.78 | | | 12.5 | % |
Total RevPAR | | $ | 585.88 | | | $ | 565.50 | | | 3.6 | % | | $ | 479.01 | | | $ | 428.98 | | | 11.7 | % |
26
Supplemental Financial Information
Three and Nine Months Ended September 30, 2005 and 2004
Reconciliation of Property EBITDA to EBITDA
(in thousands)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended September 30,
| | | Nine Months Ended September 30,
| |
| | | 2005
| | | 2004
| | | 2005
| | | 2004
| |
Hotel
| | Property
EBITDA
| | | EBITDA
| | | Property
EBITDA
| | | EBITDA
| | | Property
EBITDA
| | EBITDA
| | | Property
EBITDA
| | EBITDA
| |
Hyatt Regency New Orleans | | $ | 126 | | | $ | 126 | | | $ | 2,234 | | | $ | 2,234 | | | $ | 9,962 | | $ | 9,962 | | | $ | 12,604 | | $ | 12,604 | |
InterContinental Chicago (a) | | | 6,164 | | | | 6,164 | | | | — | | | | — | | | | — | | | 12,523 | | | | — | | | — | |
Hyatt Regency Phoenix | | | (124 | ) | | | (124 | ) | | | 221 | | | | 221 | | | | 6,809 | | | 6,809 | | | | 7,611 | | | 7,611 | |
Fairmont Chicago (b) | | | — | | | | 2,367 | | | | — | | | | — | | | | — | | | 2,367 | | | | — | | | — | |
InterContinental Miami (a) | | | 474 | | | | 474 | | | | — | | | | — | | | | — | | | 3,693 | | | | — | | | — | |
Hilton Burbank Airport and Convention Center | | | 2,273 | | | | 2,273 | | | | 1,445 | | | | 1,445 | | | | 6,858 | | | 6,858 | | | | 4,749 | | | 4,749 | |
Marriott Rancho Las Palmas Resort | | | (1,204 | ) | | | (1,204 | ) | | | (1,310 | ) | | | (1,310 | ) | | | 1,890 | | | 1,890 | | | | 1,898 | | | 1,898 | |
Hyatt Regency La Jolla at Aventine | | | 2,509 | | | | 2,509 | | | | 1,990 | | | | 1,990 | | | | 6,934 | | | 6,934 | | | | 4,831 | | | 4,831 | |
Marriott Schaumburg (c) | | | 1,173 | | | | — | | | | 639 | | | | — | | | | 3,064 | | | — | | | | 1,940 | | | — | |
Marriott Lincolnshire Resort | | | 1,816 | | | | 1,816 | | | | 1,546 | | | | 1,546 | | | | 3,811 | | | 3,811 | | | | 3,729 | | | 3,729 | |
Loews Santa Monica Beach Hotel | | | 4,298 | | | | 4,298 | | | | 3,397 | | | | 3,397 | | | | 11,137 | | | 11,137 | | | | 9,106 | | | 9,106 | |
Embassy Suites Lake Buena Vista Resort (c) | | | 755 | | | | — | | | | 757 | | | | — | | | | 3,411 | | | — | | | | 3,096 | | | — | |
Ritz-Carlton Half Moon Bay | | | 3,257 | | | | 3,257 | | | | — | | | | 1,359 | | | | 6,451 | | | 6,451 | | | | — | | | 1,359 | |
Four Seasons Mexico City | | | 872 | | | | 872 | | | | 810 | | | | 810 | | | | 3,476 | | | 3,476 | | | | 3,777 | | | 3,777 | |
Four Seasons Punta Mita Resort | | | 1,896 | | | | 1,896 | | | | 1,011 | | | | 1,011 | | | | 10,667 | | | 10,667 | | | | 8,672 | | | 8,672 | |
InterContinental Prague (d) | | | 4,268 | | | | — | | | | 4,109 | | | | — | | | | 11,746 | | | — | | | | 11,443 | | | — | |
Marriott Hamburg (e) | | | 1,224 | | | | 17 | | | | 1,189 | | | | 40 | | | | 3,786 | | | 87 | | | | 3,648 | | | 1,360 | |
Paris Marriott Champs Elysees (f) | | | 5,360 | | | | 2,185 | | | | 5,084 | | | | 2,089 | | | | 10,686 | | | 2,653 | | | | 9,797 | | | 6,847 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
| |
|
|
| |
|
| |
|
|
|
| | | $ | 35,137 | | | $ | 26,926 | | | $ | 23,122 | | | $ | 14,832 | | | $ | 100,688 | | $ | 89,318 | | | $ | 86,901 | | $ | 66,543 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
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|
| |
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|
|
Adjustments: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Distributed Property EBITDA (see note on page 7) | | | $ | — | | | | | | | $ | — | | | | | | $ | — | | | | | | $ | 28,387 | |
Corporate expenses | | | | | | | (5,379 | ) | | | | | | | (4,299 | ) | | | | | | (14,786 | ) | | | | | | (24,493 | ) |
Interest income | | | | | | | 382 | | | | | | | | 42 | | | | | | | 1,126 | | | | | | | 1,003 | |
Loss on early extinguishment of debt | | | | | | | — | | | | | | | | (17 | ) | | | | | | — | | | | | | | (20,903 | ) |
Other income (expenses), net | | | | | | | 2,425 | | | | | | | | 1,359 | | | | | | | 7,048 | | | | | | | (684 | ) |
Income taxes | | | | | | | (73 | ) | | | | | | | 264 | | | | | | | 264 | | | | | | | 223 | |
Income (loss) from discontinued operations | | | | | | | 486 | | | | | | | | (27 | ) | | | | | | 2,298 | | | | | | | 74,532 | |
Depreciation and amortization - discontinued operations | | | | 948 | | | | | | | | 1,052 | | | | | | | 2,782 | | | | | | | 3,126 | |
Interest expense - discontinued operations | | | | | | | 493 | | | | | | | | 372 | | | | | | | 1,376 | | | | | | | 2,567 | |
Adjustments from unconsolidated affiliates | | | | | | | 1,113 | | | | | | | | 1,329 | | | | | | | 3,135 | | | | | | | 4,608 | |
| | | | | | |
|
|
| | | | | |
|
|
| | | | |
|
|
| | | | |
|
|
|
EBITDA | | | | | | $ | 27,321 | | | | | | | $ | 14,907 | | | | | | $ | 92,561 | | | | | | $ | 134,909 | |
| | | | | | |
|
|
| | | | | |
|
|
| | | | |
|
|
| | | | |
|
|
|
| (a) | On April 1, 2005, we purchased an 85% controlling interest in the joint ventures that own the InterContinental Chicago and Miami hotels. We consolidate these hotels for reporting purposes. |
| (b) | On September 1, 2005, we purchased the Fairmont Chicago for $158.0 million. We have not included the results of this hotel in Property EBITDA above since we did not own the property for the entire period. |
| (c) | As of September 30, 2005, these properties have been classified as held for sale. Therefore, their results of operations have been included in income (loss) from discontinued operations for the three and nine months ended September 30, 2005 and 2004. |
| (d) | We have a 35% interest in the joint venture that owns the InterContinental Prague and account for our investment under the equity method of accounting. Our equity in earnings of the hotel joint venture is included in other income (expenses), net in our consolidated statements of operations. |
| (e) | On March 1, 2004, we acquired the 65% interest we did not previously own in the joint venture that leases the Hamburg Marriott. On June 29, 2004, we eliminated the collateralized guarantee on the sale leaseback related to the property and no longer have continuing involvement which required treating the transaction as a financing. Accordingly, a sale of the Hamburg Marriott was recorded and the leaseback has now been recorded as an operating lease as of June 29, 2004. SHCI eliminated the finance obligation on the consolidated balance sheet and now records lease expense instead of mortgage interest and depreciation expense. |
| (f) | On June 29, 2004, we eliminated the collateralized guarantee related to the Paris Marriott Champs Elysees and no longer have continuing involvement as defined by generally accepted accounting principles. Accordingly, a sale of the Paris Marriott Champs Elysees was recorded and the leaseback has now been recorded as an operating lease as of June 29, 2004. SHCI eliminated the finance obligation on the consolidated balance sheet and now records lease expense instead of mortgage interest and depreciation expense. |
27
