Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2016 | May. 09, 2016 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | MHGC | |
Entity Registrant Name | Morgans Hotel Group Co. | |
Entity Central Index Key | 1,342,126 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 34,768,044 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
ASSETS | ||
Property and equipment, net | $ 261,682 | $ 265,678 |
Goodwill | 53,691 | 54,057 |
Investments in and advances to unconsolidated joint ventures | 100 | 100 |
Cash and cash equivalents | 11,917 | 45,925 |
Restricted cash | 15,291 | 12,892 |
Accounts receivable, net | 7,526 | 8,325 |
Prepaid expenses and other assets | 6,464 | 8,897 |
Deferred tax asset, net | 128,975 | 128,645 |
Other assets, net | 32,371 | 33,516 |
Total assets | 518,017 | 558,035 |
LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||
Debt and capital lease obligations, net of deferred financing costs of $4.0 million and $3.7 million as of March 31, 2016 and December 31, 2015, respectively | 574,304 | 602,630 |
Accounts payable and accrued liabilities | 33,208 | 33,599 |
Deferred gain on asset sales | 115,373 | 117,378 |
Other liabilities | 13,866 | 13,866 |
Total liabilities | $ 736,751 | $ 767,473 |
Commitments and contingencies | ||
Preferred stock, $0.01 par value; liquidation preference $1,000 per share, 40,000,000 shares authorized; 75,000 shares issued at March 31, 2016 and December 31, 2015, respectively | $ 72,219 | $ 71,025 |
Common stock, $0.01 par value; 200,000,000 shares authorized; 36,277,495 shares issued at March 31, 2016 and December 31, 2015, respectively | 363 | 363 |
Additional paid-in capital | 236,334 | 236,730 |
Treasury stock, at cost, 1,513,234 and 1,541,381 shares of common stock at March 31, 2016 and December 31, 2015, respectively | (16,775) | (17,257) |
Accumulated other comprehensive loss | (1,593) | (1,131) |
Accumulated deficit | (509,861) | (499,765) |
Total Morgans Hotel Group Co. stockholders’ deficit | (219,313) | (210,035) |
Noncontrolling interest | 579 | 597 |
Total deficit | (218,734) | (209,438) |
Total liabilities and stockholders’ deficit | $ 518,017 | $ 558,035 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Mar. 31, 2016 | Dec. 31, 2015 |
Statement Of Financial Position [Abstract] | ||
Deferred financing costs, net | $ 4 | $ 3.7 |
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, liquidation preference per share | $ 1,000 | $ 1,000 |
Preferred stock, share authorized | 40,000,000 | 40,000,000 |
Preferred stock, share issued | 75,000 | 75,000 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, share authorized | 200,000,000 | 200,000,000 |
Common stock, share issued | 36,277,495 | 36,277,495 |
Treasury stock, shares | 1,513,234 | 1,541,381 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Loss - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Revenues: | ||
Rooms | $ 25,244 | $ 25,796 |
Food and beverage | 20,432 | 21,571 |
Other hotel | 2,198 | 1,931 |
Total hotel revenues | 47,874 | 49,298 |
Management fee-related parties and other income | 3,149 | 4,008 |
Total revenues | 51,023 | 53,306 |
Operating Costs and Expenses: | ||
Rooms | 9,458 | 8,884 |
Food and beverage | 13,844 | 14,677 |
Other departmental | 1,144 | 996 |
Hotel selling, general and administrative | 10,151 | 10,152 |
Property taxes, insurance and other | 4,543 | 3,883 |
Total hotel operating expenses | 39,140 | 38,592 |
Corporate expenses, including stock compensation of $0.1 million and $0.3 million, respectively | 4,263 | 6,028 |
Depreciation and amortization | 5,651 | 5,637 |
Restructuring and development costs | 699 | 2,097 |
Total operating costs and expenses | 49,753 | 52,354 |
Operating income | 1,270 | 952 |
Interest expense, net | 11,162 | 11,827 |
Impairment loss and equity in income of investment in unconsolidated joint venture | (2) | 3,890 |
Impairment loss on intangible asset | 366 | |
Gain on asset sales | (2,005) | (3,708) |
Other non-operating expenses | 543 | 1,655 |
Loss before income tax expense | (8,794) | (12,712) |
Income tax expense | 128 | 126 |
Net loss | (8,922) | (12,838) |
Net loss attributable to noncontrolling interest | 18 | 14 |
Net loss attributable to Morgans Hotel Group Co. | (8,904) | (12,824) |
Preferred stock dividends and accretion | (4,467) | (3,910) |
Net loss attributable to common stockholders | (13,371) | (16,734) |
Other comprehensive loss: | ||
Unrealized loss on valuation of cap agreements, net of tax | (119) | (12) |
Foreign currency translation adjustment | (344) | (997) |
Comprehensive loss | $ (13,834) | $ (17,743) |
Loss per share: | ||
Basic and diluted attributable to common stockholders | $ (0.38) | $ (0.49) |
Weighted average number of common shares outstanding: | ||
Basic and diluted | 34,739 | 34,388 |
Consolidated Statements of Com5
Consolidated Statements of Comprehensive Loss (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Income Statement [Abstract] | ||
Stock-based compensation | $ 115 | $ 344 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Cash flows from operating activities: | ||
Net loss | $ (8,922) | $ (12,838) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation | 4,864 | 4,846 |
Amortization of other costs | 787 | 791 |
Amortization and write off of deferred financing costs | 739 | 1,636 |
Amortization of deferred gain on asset sales | (2,005) | (2,005) |
Stock-based compensation | 115 | 344 |
Accretion of interest | 532 | 519 |
Impairment loss and equity in income of investment in unconsolidated joint venture | (2) | 3,890 |
Impairment loss on intangible asset | 366 | |
Gain (loss) on sale and disposal of assets | 5 | (1,709) |
Change in value of interest rate caps | 219 | 19 |
Changes in assets and liabilities: | ||
Accounts receivable, net | 799 | (398) |
Restricted cash | (2,237) | (1,486) |
Prepaid expenses and other assets | 2,433 | 1,233 |
Accounts payable and accrued liabilities | (599) | (559) |
Net cash used in operating activities | (2,906) | (5,717) |
Cash flows from investing activities: | ||
Additions to property and equipment | (897) | (577) |
Deposits into capital improvement escrows, net | (162) | (669) |
Distributions from unconsolidated joint ventures | 2 | 2 |
Proceeds from asset sale, net | 32,152 | |
Net cash (used in) provided by investing activities | (1,057) | 30,908 |
Cash flows from financing activities: | ||
Payments on debt and capital lease obligations | (28,563) | (366) |
Debt issuance costs | (1,456) | |
Cash paid in connection with vesting of stock based awards | (26) | (227) |
Net cash used in financing activities | (30,045) | (593) |
Net (decrease) increase in cash and cash equivalents | (34,008) | 24,598 |
Cash and cash equivalents, beginning of year | 45,925 | 13,493 |
Cash and cash equivalents, end of year | 11,917 | 38,091 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 10,303 | $ 10,171 |
Cash paid for income taxes | $ 25 |
Organization and Formation Tran
Organization and Formation Transaction | 3 Months Ended |
Mar. 31, 2016 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Organization and Formation Transaction | 1. Organization and Formation Transaction Morgans Hotel Group Co., a Delaware corporation (the “Company”), was incorporated on October 19, 2005. The Company operates, owns, acquires, and develops boutique hotels, primarily in gateway cities and select resort markets in the United States, Europe and other international locations. In addition, the Company owns leasehold interests in certain food and beverage venues. Prior to the TLG Equity Sale, discussed below, completed on January 23, 2015, the Company, through TLG Acquisition LLC (“TLG Acquisition” and, together with its subsidiaries, The Light Group, or “TLG”), operated nightclubs, restaurants, pool lounges, bars and other food and beverage venues primarily in hotels operated by MGM Resorts International (“MGM”) in Las Vegas. The Morgans Hotel Group Co. predecessor comprised the subsidiaries and ownership interests that were contributed as part of the formation and structuring transactions from Morgans Hotel Group LLC, now known as Residual Hotel Interest LLC (“Former Parent”), to Morgans Group LLC (“Morgans Group”), the Company’s operating company. The Former Parent also contributed all the membership interests in its hotel management business to Morgans Group in return for 1,000,000 membership units in Morgans Group exchangeable for shares of the Company’s common stock. The Company has one reportable operating segment. During the three months ended March 31, 2016 and 2015, the Company derived 6.6 Hotels The Company’s hotels as of March 31, 2016 were as follows: Hotel Name Location Number of Rooms Interest Hudson New York, 878 (1 ) Morgans New York, NY 117 (2 ) Royalton New York, NY 168 (2 ) Delano South Beach Miami Beach, FL 194 (3 ) Mondrian South Beach Miami Beach, FL 220 (4 ) Shore Club Miami Beach, FL 308 (5 ) Mondrian Los Angeles Los Angeles, CA 236 (2 ) Clift San Francisco, CA 372 (6 ) Sanderson London, England 150 (2 ) St Martins Lane London, England 204 (2 ) Mondrian London at Sea Containers London, England 359 (2 ) Delano Las Vegas Las 1,117 (7 ) 10 Karakoy Istanbul, Turkey 71 (8 ) (1) The Company owns 100% of Hudson through its subsidiary, Henry Hudson Holdings LLC, which is part of a property that is structured as a condominium, in which Hudson constitutes 96% of the square footage of the entire building. As of March 31, 2016, Hudson had 878 guest rooms and 60 single room dwelling units (“SROs”). (2) Operated under a management contract. (3) Wholly-owned hotel. (4) Operated as a condominium hotel under a management contract and owned through a 50/50 unconsolidated joint venture. As of March 31, 2016 , 276 hotel residences had been sold, of which 161 are in the hotel rental pool and are included in the hotel room count, and 59 hotel residences remain to be sold, all of which are in the hotel program. See note 4. (5) Operated under a management contract. The Company currently expects to no longer manage Shore Club during the fourth quarter of (6) The hotel is operated under a long-term lease which is accounted for as a financing. See note 6. (7) A licensed hotel managed by MGM. (8) A franchised hotel. Food and Beverage Operations As of March 31, 2016, the Company leased and managed all but one of the Sanderson food and beverage venues. The Company also owns three food and beverage venues subject to leasehold agreements at Mandalay Bay in Las Vegas, which are managed by TLG. These food and beverage venues are included in the Company’s consolidated financial statements. Effective May 1, 2016, the Company transferred all of its ownership interest in the food and beverage venues at Sanderson to the hotel owner. The Company will continue to manage the transferred food and beverage venues. Prior to May 1, 2016, the Company leased and managed the Sanderson food and beverage venues, which were included in the Company’s consolidated financial statements. As a result of this transfer, the Company impaired approximately $0.4 million of goodwill related to its ownership interest of the Sanderson food and beverage venues. The Light Group Acquisition. On November 30, 2011, certain of the Company’s subsidiaries completed the acquisition of 90% of the equity interests in TLG Acquisition for a purchase price of $28.5 million in cash and up to $18.0 million in notes (the “TLG Promissory Notes”) (“The Light Group Transaction”). In December 2014, the Company used cash on hand to repay and retire $19.1 million of the outstanding TLG Promissory Notes, which included the original principal balance of $18.0 million plus deferred interest of $1.1 million, as discussed further in note 6. The primary assets of TLG consisted of its management and similar agreements primarily with various MGM affiliates. During the time the Company owned 90% of TLG, it recognized management fees in accordance with the applicable management agreement which generally provided for base management fees as a percentage of gross sales, and incentive management fees as a percentage of net profits, as calculated pursuant to the management agreements. TLG Equity Sale . On January 23, 2015, t he Company sold its 90% equity interest in TLG to Hakkasan Holdings LLC (“Hakkasan”) (the “TLG Equity Sale”) for $32.8 million, net of closing costs. The Company has certain indemnification obligations, which generally survive for 18 months following the close of the TLG Equity Sale; however, no amounts are held in escrow for the satisfaction of such claims. As of March 31, 2016, the Company has accrued approximately $ 0.3 TEJ Management, LLC, an entity controlled by Andrew Sasson, and Galts Gulch Holding Company LLC, an entity controlled by Andy Masi (together, the “Minority Holders”) did not exercise their right to participate in the TLG Equity Sale. The Minority Holders maintained the right to put their equity interests to TLG’s managing member for amounts determined pursuant to the Amended and Restated Limited Liability Company of TLG. Hakkasan, as the current managing membe r, was ob In addition, for the 18 months following the closing of the TLG Equity Sale, the Company has the right to purchase 49% of the equity of TLG from Hakkasan (the “Option Right”). The Option Right does not currently trigger any accounting impact on the Company’s consolidated financial statements. Sasson-Masi Put Options . On January 15, 2015, each of Messrs. Sasson and Masi exercised his right to require Morgans Group to purchase his equity interest in TLG at a purchase price calculated in accordance with the Amended and Restated Limited Liability Company of TLG (the “Sasson-Masi Put Options”). The aggregate purchase price for the Sasson-Masi Put Options was approximately $5.0 m illion based on the contractual formula applied as of the option exercise date of January 15, 2015. Pursuant to the TLG Equity Sale, Hakkasan paid $3.6 million of the purchase price for the Sasson-Masi Put Options and the Company incurred and paid the remaining approximately $1.4 million. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2016 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The Company consolidates all wholly-owned subsidiaries and variable interest entities in which the Company is determined to be the primary beneficiary. All intercompany balances and transactions have been eliminated in consolidation. Entities which the Company does not control through voting interest and entities which are variable interest entities of which the Company is not the primary beneficiary, are accounted for under the equity method. The consolidated financial statements have been prepared in accordance with U.S. GAAP for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The information furnished in the accompanying consolidated financial statements reflects all adjustments that, in the opinion of management, are necessary for a fair presentation of the aforementioned consolidated financial statements for the interim periods. Operating results for the three months ended March 31, 2016 are not necessarily indicative of the results that may be expected for the year ending December 31, 2016. For further information, refer to the consolidated financial statements and accompanying footnotes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Restricted Cash As required by certain debt and lease agreements, restricted cash consists of cash held in escrow accounts for debt service or lease payments, insurance programs, and taxes, among others. As further required by the debt and lease agreements related to hotels owned by the Company or one of its subsidiaries, the Company must set aside 4% of the hotels’ revenues in restricted escrow accounts for the future periodic replacement or refurbishment of furniture, fixtures and equipment. As replacements occur, the Company or its subsidiary is eligible for reimbursement from these escrow accounts. The Hudson/Delano 2014 Mortgage Loan, defined and discussed below in note 6, provides that all cash flows from Hudson and Delano South Beach are deposited into accounts controlled by the lenders from which debt service and operating expenses, including management fees, are paid and from which other reserve accounts may be funded. In the event the debt yield ratio falls below 6.75%, any excess amounts will be retained by the lenders until the debt yield ratio exceeds 7.00% for two consecutive calendar quarters. As of March 31, 2016, the Company’s debt yield ratio was 6.84%. The Company may fall below the 6.75% defined threshold during the second quarter of 2016. Assets Held for Sale The Company considers properties to be assets held for sale when management approves and commits to a formal plan to actively market a property or a group of properties for sale and the sale is probable whereby a signed sales contract and significant non-refundable deposit or contract break-up fee exist. Investments in and Advances to Unconsolidated Joint Ventures The Company accounts for its investments in unconsolidated joint ventures using the equity method as it does not exercise control over significant business decisions such as buying, selling or financing nor is it the primary beneficiary under Account Standard Codification (“ASC”) 810-10, Consolidation Other Assets In October 2014, the Company funded an approximately $15.3 million key money obligation related to Mondrian London, which is included in Other Assets and is being amortized over the term of the hotel management agreement. In August 2012, the Company entered into a 10-year licensing agreement with MGM, with two five-year extensions at the Company’s option subject to performance thresholds, to convert an existing hotel to Delano Las Vegas. Delano Las Vegas opened in September 2014. In addition, the Company acquired the leasehold interests in three food and beverage venues at Mandalay Bay in Las Vegas from an existing tenant for $15.0 million in cash at closing and a deferred, principal-only $10.6 million promissory note (“Restaurant Lease Note”) to be paid over seven years, which the Company recorded at fair value as of the date of issuance at $7.5 million, as discussed in note 6. The three food and beverage venues are managed by TLG and are operated pursuant to 10-year operating leases with an MGM affiliate, pursuant to which the Company pays minimum annual lease payments and a percentage rent based on cash flow. The Company allocated the total consideration paid, or to be paid, to the license agreement and the restaurant leasehold asset based on their respective fair values. Income Taxes The Company accounts for income taxes in accordance with ASC 740-10, Income Taxes The Company’s deferred tax assets are recorded net of a valuation allowance when, based on the weight of available evidence, it is more likely than not that some portion or all of the recorded deferred tax assets will not be realized in future periods. Decreases to the valuation allowance are recorded as reductions to the Company’s provision for income taxes and increases to the valuation allowance result in additional provision for income taxes. The realization of the Company’s deferred tax assets, net of the valuation allowance, is primarily dependent on estimated future taxable income. A change in the Company’s estimate of future taxable income may require an addition to or reduction from the valuation allowance. The Company has established a reserve on its deferred tax assets based on anticipated future taxable income and tax strategies. All of the Company’s foreign subsidiaries are subject to local jurisdiction corporate income taxes. Income tax expense is reported at the applicable rate for the periods presented. Income taxes for the three months ended March 31, 2016 and 2015 were computed using the Company’s effective tax rate. Credit-risk-related Contingent Features The Company has entered into warrant agreements with Yucaipa American Alliance Fund II, L.P. and Yucaipa American Alliance (Parallel) Fund II, L.P., (collectively, the “Yucaipa Investors”), as discussed in note 9, to purchase a total of 12,500,000 shares of the Company’s common stock at an exercise price of $6.00 per share (the “Yucaipa Warrants”). In addition, subject to the terms of the Securities Purchase Agreement, the Yucaipa Investors have certain consent rights over certain transactions for so long as they collectively own or have the right to purchase through exercise of the Yucaipa Warrants 6,250,000 shares of the Company’s common stock, as discussed further in note 9. The Yucaipa Warrants are exercisable utilizing a cashless exercise method only, resulting in a net share issuance. See note 13 for additional information about the Yucaipa Warrants. Fair Value Measurements ASC 820-10, Fair Value Measurements and Disclosures ASC 820-10 emphasizes that fair value is a market-based measurement, not an entity-specific measurement. Therefore, a fair value measurement should be determined based on the assumptions that market participants would use in pricing the asset or liability. As a basis for considering market participant assumptions in fair value measurements, ASC 820-10 establishes a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within Levels 1 and 2 of the hierarchy) and the reporting entity’s own assumptions about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy). Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access. Level 2 inputs are inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs may include quoted prices for similar assets and liabilities in active markets, as well as inputs that are observable for the asset or liability (other than quoted prices), such as interest rates and yield curves that are observable at commonly quoted intervals. Level 3 inputs are unobservable inputs for the asset or liability, which is typically based on an entity’s own assumptions, as there is little, if any, related market activity. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability. Currently, the Company uses interest rate caps to manage its interest rate risk. The valuation of these instruments is determined using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves and implied volatilities. To comply with the provisions of ASC 820-10, the Company incorporates credit valuation adjustments to appropriately reflect both its own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. In adjusting the fair value of its derivative contracts for the effect of nonperformance risk, the Company has considered the impact of netting and any applicable credit enhancements, such as collateral postings, thresholds, mutual puts, and guarantees. Although the Company has determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with its derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by itself and its counterparties. As of March 31, 2016 and December 31, 2015, the Company assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and determined that the credit valuation adjustments are not significant to the overall valuation of its derivatives. Accordingly, all derivatives have been classified as Level 2 fair value measurements. As of March 31, 2016, the Company had three interest rate caps outstanding and the fair value of these interest rate caps was $1.0 million Fair Value of Financial Instruments Disclosures about fair value of financial instruments are based on pertinent information available to management as of the valuation date. Considerable judgment is necessary to interpret market data and develop estimated fair values. Accordingly, the estimates presented are not necessarily indicative of the amounts at which these instruments could be purchased, sold, or settled. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts. The Company’s financial instruments include cash and cash equivalents, accounts receivable, restricted cash, accounts payable and accrued liabilities, and fixed and variable rate debt. Management believes the carrying amount of the aforementioned financial instruments, excluding fixed-rate debt, is a reasonable estimate of fair value as of March 31, 2016 and December 31, 2015 due to the short-term maturity of these items or variable market interest rates. The Company had outstanding fixed rate debt principal of $54.6 million and $54.9 million as of March 31, 2016 March 31, 2016 Although the Company has determined that the majority of the inputs used to value its fixed rate debt fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with its fixed rate debt utilize Level 3 inputs, such as estimates of current credit spreads. As of March 31, 2016 and December 31, 2015, the Company assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its fixed rate debt and determined that the credit valuation adjustments are not significant to the overall valuation of its fixed rate debt. Accordingly, all derivatives have been classified as Level 2 fair value measurements. Noncontrolling Interest The Company follows ASC 810-10, when accounting and reporting for noncontrolling interests in a consolidated subsidiary and the deconsolidation of a subsidiary. Under ASC 810-10, the Company reports noncontrolling interests in subsidiaries as a separate component of stockholders’ equity (deficit) in the consolidated financial statements and reflects net income (loss) attributable to the noncontrolling interests and net income (loss) attributable to the common stockholders on the face of the consolidated statements of comprehensive loss. The membership units in Morgans Group, the Company’s operating company, owned by the Former Parent are presented as a noncontrolling interest in Morgans Group in the consolidated balance sheets and were approximately $0.6 million and $0.6 million as of March 31, 2016 and December 31, 2015, respectively. The noncontrolling interest in Morgans Group is: (i) increased or decreased by the holders of membership interests’ pro rata share of Morgans Group’s net income or net loss, respectively; (ii) decreased by distributions; (iii) decreased by exchanges of membership units for the Company’s common stock; and (iv) adjusted to equal the net equity of Morgans Group multiplied by the holders of membership interests’ ownership percentage immediately after each issuance of units of Morgans Group and/or shares of the Company’s common stock and after each purchase of treasury stock through an adjustment to additional paid-in capital. Net income or net loss allocated to the noncontrolling interest in Morgans Group is based on the weighted-average percentage ownership throughout the period. As of March 31, 2016, there were 75,446 membership units outstanding, each of which is exchangeable for a share of the Company’s common stock. Recent Accounting Pronouncements In February 2016, the FASB issued ASU No. 2016-02 (“ASU 2016-02”), “Leases.” In March 2016, the FASB issued ASU No. 2016-09 (“ASU 2016-09”), “Compensation – Stock Compensation (Topic 708): Improvements to Employee Share-Based Payment Accounting. In May 2014, the FASB issued ASU No. 2014-09, “ Revenue from Contracts with Customers (Topic 606)” and supersedes the revenue recognition requirements in Topic 605, Revenue Recognition , as well as most industry-specific guidance. , “Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations”, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date”, Reclassifications Certain prior period financial statement amounts have been reclassified to conform to the current period presentation. |
Income (Loss) Per Share
Income (Loss) Per Share | 3 Months Ended |
Mar. 31, 2016 | |
Earnings Per Share [Abstract] | |
Income (Loss) Per Share | 3. Income (Loss) Per Share The Company applies the two-class method as required by ASC 260-10, Earnings per Share Basic net income (loss) per common share is calculated by dividing net income (loss) available to common stockholders by the weighted-average number of shares of common stock outstanding during the period. Vested LTIP Units (as defined in note 8) are considered participating securities and are included in the computation of basic earnings per common share pursuant to the two-class method. Diluted net income (loss) per common share is calculated by dividing net income (loss) available to common stockholders by the weighted-average number of shares of common stock outstanding during the period, plus other potentially dilutive securities. Potential dilutive securities may include shares and options granted under the Company’s stock incentive plan and membership units in Morgans Group, which may be exchanged for shares of the Company’s common stock under certain circumstances. In periods when the Company has net loss attributable to Morgans Hotel Group Co., the Yucaipa Warrants issued to the Yucaipa Investors, unvested restricted stock units, LTIP Units (as defined in note 8), and stock options are excluded from the diluted net loss per common share calculation, as there would be no effect on reported diluted net loss per common share, however in periods when the Company has net income attributable to Morgans Hotel Group Co., these same securities are included in the diluted net income per common share calculation to the extent they are considered dilutive. The 75,446 Morgans Group membership units (which may be converted to cash, or at the Company’s option, common stock) held by third parties at March 31, 2016 and December 31, 2015, are not reflected in the computation of basic and diluted earnings per share, as the income allocable to such membership units is allocated and reflected as noncontrolling interests in the accompanying consolidated financial statements. The table below details the components of the basic and diluted loss per share calculations (in thousands, except for per share data). The Company has not had any undistributed earnings in any calendar quarter presented. Therefore, the Company does not present earnings per share following the two-class method. Three Ended March 31, 2016 Three Months Ended March 31, 2015 Numerator: Net loss $ (8,922 ) $ (12,838 ) Net loss attributable to noncontrolling interest 18 14 Net loss attributable to Morgans Hotel Group Co. (8,904 ) (12,824 ) Less: preferred stock dividends and accretion 4,467 3,910 Net loss attributable to common stockholders $ (13,371 ) $ (16,734 ) Denominator: Weighted average basic common shares outstanding 34,739 34,388 Effect of dilutive securities — — Weighted average diluted common shares outstanding 34,739 34,388 Basic and diluted loss attributable to common stockholders per common share $ (0.38 ) $ (0.49 ) |
Investments in and Advances to
Investments in and Advances to Unconsolidated Joint Ventures | 3 Months Ended |
Mar. 31, 2016 | |
Equity Method Investments And Joint Ventures [Abstract] | |
Investments in and Advances to Unconsolidated Joint Ventures | 4. Investments in and Advances to Unconsolidated Joint Ventures The Company’s investments in and advances to unconsolidated joint ventures was $0.1 million and $0.1 million as of March 31, 2016 and December 31, 2015, respectively. The Company’s income from unconsolidated joint ventures was immaterial for the three months ended March 31, 2016 and 2015. Mondrian South Beach On August 8, 2006, the Company entered into a 50/50 joint venture to renovate and convert an apartment building on Biscayne Bay in Miami Beach into a condominium hotel, Mondrian South Beach, which opened in December 2008. The Company operates Mondrian South Beach under a long-term management contract. The Mondrian South Beach joint venture initially received nonrecourse mortgage loan financing of approximately $124.0 million at a rate of LIBOR plus 3.0%. A portion of this mortgage debt was paid down, prior to the amendments discussed below, with proceeds obtained from condominium sales. In April 2008, the Mondrian South Beach joint venture obtained a mezzanine loan from the mortgage lenders of $28.0 million bearing interest at LIBOR plus 6.0%. Additionally, the Company and an affiliate of its joint venture partner provided additional mezzanine financing of $28.0 million in total to the joint venture through a 50/50 mezzanine financing joint venture. In April 2010, the Mondrian South Beach ownership joint venture amended the nonrecourse mortgage financing and mezzanine loan agreements secured by Mondrian South Beach or related equity interests and extended the maturity date for up to seven years through one-year extension options until April 2017, subject to certain conditions. Among other things, the amendment allowed the joint venture to accrue all interest through April 2012, accrue a portion of the interest thereafter, extend the mezzanine loan to April 2027 if the mortgage loan is retired, and provide the ability to provide seller financing to qualified condominium buyers with up to 80% of the condominium purchase price. After the repayment of the mortgage debt, the mezzanine financing joint venture receives the first $5.5 million of net cash flow, the lender mezzanine financing receives the next $5.5 million, and the remaining proceeds are distributed equally between the joint venture mezzanine loan and the lender mezzanine loan. In March 2016, the joint venture exercised its option to extend the outstanding mortgage and mezzanine debt until April 2017. As of March 31, 2016, the joint venture’s outstanding nonrecourse mortgage loan was $18.7 million, The joint venture is in the process of selling units as condominiums, subject to market conditions, and unit buyers will have the opportunity to place their units into the hotel’s rental program. As of March 31, 2016, 276 hotel are 59 hotel residences The Mondrian South Beach joint venture was determined to be a variable interest entity, as during the process of refinancing the venture’s mortgage in April 2010, its equity investment at risk was considered insufficient to permit the entity to finance its own activities. Management determined that the Company is not the primary beneficiary of this variable interest entity. Because the Company has written its investment value in the joint venture to zero, for financial reporting purposes, the Company believes its maximum exposure to losses as a result of its involvement in the Mondrian South Beach variable interest entity is limited to its outstanding management fees and related receivables, excluding guarantees and other contractual commitments. The Company is not committed to providing financial support to this variable interest entity, other than as contractually required, and all future funding is expected to be provided by the joint venture partners in accordance with their respective percentage interests in the form of capital contributions or loans, or by third parties. Morgans Group and affiliates of its joint venture partner have provided certain guarantees and indemnifications to the Mondrian South Beach lenders. See note 7. Mondrian SoHo In June 2007, the Company entered into a joint venture with Cape Advisors Inc. to acquire property and develop a Mondrian hotel on that property in the SoHo neighborhood of New York City. The Company had a 20% equity interest in the joint venture. Under the terms of the hotel management agreement executed between the Company and the joint venture in June 2007, the Company had a contract to manage the hotel for a 10-year term beginning on the date the hotel opened for business, which was in February 2011, with two 10-year extension options. The Company accounted for its investment in Mondrian SoHo using the equity method of accounting. The joint venture obtained a loan to acquire the hotel property and develop the hotel, which matured in June 2010 and was extended several times. In November 2012, the joint venture did not meet the necessary extension options and a foreclosure judgment was issued on November 25, 2014. The foreclosure sale was held on January 7, 2015, at which German American Capital Corporation (“GACC”), the lender, was the sole and winning bidder. GACC assigned its bid to 9 Crosby LLC, an affiliate of The Sapir Organization (“Sapir”), a New York-based real estate development and management organization. The . As a result, Mondrian Istanbul In December 2011, the Company entered into a hotel management agreement for a Mondrian-branded hotel to be located in the Old City area of Istanbul, Turkey. In December 2011 and January 2012, the Company contributed an aggregate of $10.3 million in the form of equity and key money and had a 20% ownership interest in the joint venture owning the hotel. Due to the Company’s joint venture partner’s failure to achieve certain agreed milestones in the development of the Mondrian Istanbul hotel, in early 2014, the Company exercised its put option under the joint venture agreement that would have required the Company’s joint v enture partner to buy back the Company’s equity interests in the Mondrian Istanbul joint venture. . |
Other Liabilities
Other Liabilities | 3 Months Ended |
Mar. 31, 2016 | |
Other Liabilities Disclosure [Abstract] | |
Other Liabilities | 5. Other Liabilities As of March 31, 2016 and December 31, 2015, other liabilities included $13.9 million related to a designer fee claim. The Former Parent had an exclusive service agreement with a hotel designer, pursuant to which the designer has made various claims related to the agreement. Although the Company is not a party to the agreement, it may have certain contractual obligations or liabilities to the Former Parent in connection with the agreement. According to the agreement, the designer was owed a base fee for each designed hotel, plus 1% of gross revenues, as defined in the agreement, for a 10-year period from the opening of each hotel. In addition, the agreement also called for the designer to design a minimum number of projects for which the designer would be paid a minimum fee. A liability amount has been estimated and recorded in these consolidated financial statements before considering any defenses and/or counter-claims that may be available to the Company or the Former Parent in connection with any claim brought by the designer. The estimated costs of the design services were capitalized as a component of the applicable hotel and amortized over the five-year estimated life of the related design elements. |
Debt and Capital Lease Obligati
Debt and Capital Lease Obligations | 3 Months Ended |
Mar. 31, 2016 | |
Debt Disclosure [Abstract] | |
Debt and Capital Lease Obligations | 6. Debt and Capital Lease Obligations Debt and capital lease obligations consists of the following (in thousands): Description Principal as of March 31, 2016 Unamortized Debt Issuance Costs as of March 31, 2016 Net Debt as of March 31, 2016 Interest rate at March 31, 2016 Hudson/Delano Mortgage (a) $ 421,803 $ (1,026 ) $ 420,777 5.94% (LIBOR cap Clift debt (b) 95,800 (46 ) 95,754 9.60% Liability to subsidiary trust (c) 50,100 (2,967 ) 47,133 8.68% Restaurant Lease Note (d) 4,535 - 4,535 (d) Capital lease obligations (e) 6,105 - 6,105 (e) Debt and capital lease obligation $ 578,343 $ (4,039 ) $ 574,304 Deferred financing costs are amortized, using the straight line method, which approximates the effective interest rate method, over the terms of the related debt agreements. (a) Mortgage Agreements Hudson/Delano 2014 Mortgage Loan On February 6, 2014, subsidiaries of the Company entered into a mortgage financing with Citigroup Global Markets Realty Corp. and Bank of America, N.A., as lenders, consisting of $300.0 million nonrecourse mortgage notes and $150.0 million mezzanine loans resulting in an aggregate principal amount of $450.0 million, secured by mortgages encumbering Delano South Beach and Hudson and pledges of equity interests in certain subsidiaries of the Company (collectively, the “Hudson/Delano 2014 Mortgage Loan”). The net proceeds from the Hudson/Delano 2014 Mortgage Loan were applied to repay the outstanding mortgage debt under the prior mortgage loan secured by Hudson, repay outstanding indebtedness under the Company’s senior secured revolving credit facility secured by Delano South Beach (the “Delano Credit Facility”), and fund reserves required under the Hudson/Delano 2014 Mortgage Loan, with the remainder available for general corporate purposes and working capital. The Hudson/Delano 2014 Mortgage Loan was scheduled to mature on February 9, 2016. On that date, the Company paid $28.2 million to reduce the principal balance by the same amount and extend the maturity of this debt until February 9, 2017. Following the extension, t for the first extension and no less than 8.00% for the second extension Based on our trailing 12 month cash flow through March 31, 2016, the Company estimates that it would be required to prepay approximately $50.0 million of outstanding debt under the Hudson/Delano 2014 Mortgage Loan by February 9, 2017 and pay an approximately $1.0 million extension fee in order to extend the maturity date of the debt outstanding under the Hudson/Delano 2014 Mortgage Loan to February 9, 2018. The Hudson/Delano 2014 Mortgage Loan bears interest at a blended rate of 30-day LIBOR plus 565 basis points. The Company maintained interest rate caps for the $450.0 million principal amount of the Hudson/Delano 2014 Mortgage Loan that capped the LIBOR rate on the debt under the Hudson/Delano 2014 Mortgage Loan at approximately 1.75% through the February 9, 2016. In connection with the extension in February 2016, the Company purchased three interest rate caps with an aggregate notional value of $421.8 million that cap LIBOR at 0.29% through the next maturity date of the loan. The Hudson/Delano 2014 Mortgage Loan may be prepaid at any time, in whole or in part. The Hudson/Delano 2014 Mortgage Loan is assumable under certain conditions, and provides that either one of the encumbered hotels may be sold, subject to prepayment of the Hudson/Delano 2014 Mortgage Loan at a specified release price and satisfaction of certain other conditions. The Hudson/Delano 2014 Mortgage Loan contains restrictions on the ability of the borrowers to incur additional debt or liens on their assets and on the transfer of direct or indirect interests in Hudson or Delano South Beach and the owners of Hudson and Delano South Beach and other affirmative and negative covenants and events of default customary for multiple asset commercial mortgage-backed securities loans. The Hudson/Delano 2014 Mortgage Loan is nonrecourse to the Company’s subsidiaries that are the borrowers under the loan, except pursuant to certain carveouts detailed therein. In addition, the Company has provided a customary environmental indemnity and nonrecourse carveout guaranty under which it would have liability if certain events occur with respect to the borrowers, including voluntary bankruptcy filings, collusive involuntary bankruptcy filings, changes to the Hudson capital lease without prior written consent of the lender, violations of the restrictions on transfers, incurrence of additional debt, or encumbrances of the property of the borrowers. The nonrecourse carveout guaranty prohibits the payment of dividends on or repurchase of the Company’s common stock. As of March 31, 2016, the Company was in compliance with these covenants. (b) Clift Debt In October 2004, Clift Holdings LLC (“Clift Holdings”), a subsidiary of the Company, sold the Clift hotel to an unrelated party for $71.0 million and then leased it back for a 99-year lease term. Under this lease, Clift Holdings is required to fund operating shortfalls including the lease payments and to fund all capital expenditures. This transaction did not qualify as a sale due to the Company’s continued involvement and therefore is treated as a financing. The lease agreement provided for base annual rent of approximately $6.0 million per year until October 2014. Base rent increases by a formula tied to increases in the Consumer Price Index, with a maximum increase of 20% and a minimum increase of 10% at each five-year rent increase date thereafter. As a result of the first contractual rate increase, effective October 14, 2014, the annual rent increased to $7.6 million. The lease is nonrecourse to the Company. Morgans Group also entered into an agreement, dated September 17, 2010, whereby Morgans Group agreed to guarantee losses of up to $6.0 million suffered by the lessors in the event of certain “bad boy” type acts. As of March 31, 2016, there had been no triggering event that would require the Company to recognize a liability related to this guarantee. (c) Liability to Subsidiary Trust Issuing Preferred Securities On August 4, 2006, a newly established trust formed by the Company, MHG Capital Trust I (the “Trust”), issued $50.0 million in trust preferred securities in a private placement. The Company owns all of the $0.1 million of outstanding common stock of the Trust. The Trust used the proceeds of these transactions to purchase $50.1 million of junior subordinated notes issued by the Company’s operating company and guaranteed by the Company (the “Trust Preferred Notes”) which mature on October 30, 2036. The sole assets of the Trust consist of the Trust Preferred Notes. The terms of the Trust Preferred Notes are substantially the same as preferred securities issued by the Trust. The Trust Preferred Notes and the preferred securities have a fixed interest rate of 8.68% until October 2016, after which the interest rate will float and reset quarterly at the three-month LIBOR rate plus 3.25% per annum. The Trust Preferred Notes are redeemable by the Trust, at the Company’s option, at par, and the Company has not redeemed any Trust Preferred Notes. To the extent the Company redeems the Trust Preferred Notes, the Trust is required to redeem a corresponding amount of preferred securities. The Company has identified that the Trust is a variable interest entity under ASC 810-10. Based on management’s analysis, the Company is not the primary beneficiary of the trust. Accordingly, the Trust is not consolidated into the Company’s financial statements. The Company accounts for the investment in the common stock of the Trust under the equity method of accounting. In the event the Company were to undertake a transaction that was deemed to constitute a transfer of its properties and assets substantially as an entirety within the meaning of the indenture, the Company may be required to repay the Trust Preferred Notes prior to their maturity or obtain the trustee’s consent in connection with such transfer. (d) Restaurant Lease Note As discussed in note 2, in August 2012, the Company acquired the leasehold interests in three food and beverage venues at Mandalay Bay from an existing tenant for $15.0 million in cash at closing and the issuance of a principal-only $10.6 million Restaurant Lease Note to be paid over seven years. The Restaurant Lease Note does not bear interest except in the event of default, as defined in the agreement. In accordance with ASC 470, Debt (e) Capital Lease Obligations The Company has leased two condominium units at Hudson from unrelated third-parties, which are reflected as capital leases. One of the leases requires the Company to make annual payments, currently $649,728 (subject to increases due to increases in the Consumer Price Index), through November 2096. This lease also allows the Company to purchase, at its option, the unit at fair market value after November 2015. The second lease requires the Company to make annual payments, currently $365,490 (subject to increases due to increases in the Consumer Price Index), through December 2098. The Company has allocated both lease payments between the land and building based on their estimated fair values. The portion of the payments allocated to the building has been capitalized at the present value of the future minimum lease payments. The portion of the payments allocable to the land is treated as operating lease payments. The imputed interest rate on both of these leases is 8%, which is based on the Company’s incremental borrowing rate at the time the lease agreement was executed. The capital lease obligations related to the units amounted to approximately $6.1 million as of March 31, 2016 and December 31, 2015, respectively. Substantially all of the principal payments on the capital lease obligations are due at the end of the lease agreements. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2016 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 7. Commitments and Contingencies Hotel Development Related Commitments In order to obtain management, franchise and license contracts, the Company may commit to contribute capital in various forms on hotel development projects. These include equity investments, key money, and cash flow guarantees to hotel owners. The cash flow guarantees generally have a stated maximum amount of funding and a defined term. The terms of the cash flow guarantees to hotel owners generally require the Company to fund if the hotels do not attain specified levels of operating profit. Cash flow guarantees to hotel owners may be recoverable as loans repayable to the Company out of future hotel cash flows and/or proceeds from the sale of hotels. As of March 31, 2016 , T he Company has signed management, license or franchise agreements for new hotels which are in various stages of development. As of March 31, 2016, these included the following: Expected Room Count Anticipated Opening Initial Term Hotels Currently Under Construction or Renovation: Mondrian Doha 270 2016 30 years Delano Dubai 110 2017 20 years Other Signed Agreements: Mondrian Dubai 235 15 years Delano Aegean Sea 150 20 years Delano Cartagena 211 20 years There can be no assurances that any or all of the Company’s projects listed above will be developed as planned. If adequate project financing is not obtained, these projects may need to be limited in scope, deferred or cancelled altogether, in which case the Company may be unable to recover any previously funded key money, equity investments or debt financing. Other Guarantees to Hotel Owners As discussed above, the Company has provided certain cash flow guarantees to hotel owners in order to secure management contracts. The Company’s hotel management agreements for Royalton and Morgans contain cash flow guarantee performance tests that stipulate certain minimum levels of operating performance. These performance test provisions give the Company the option to fund a shortfall in operating performance limited to the Company’s earned base fees. If the Company chooses not to fund the shortfall, the hotel owner has the option to terminate the management agreement. Historically, the Company has funded the shortfall and as of March 31, 2016, approximately $ 0.2 Additionally, the Company is currently subject to performance tests under certain other of its hotel management agreements, which could result in early termination of the Company’s hotel management agreements. As of March 31, 2016 Joint Venture Hotels Commitments and Guarantees The following details obligations the Company has or may have related to its operating joint venture hotel, Mondrian South Beach, as of March 31, 2016. Mondrian South Beach . Morgans Group and affiliates of its joint venture partner have agreed to provide standard nonrecourse carve-out guarantees and provide certain limited indemnifications for the Mondrian South Beach mortgage and mezzanine loans. In the event of a default, the lenders’ recourse is generally limited to the mortgaged property or related equity interests, subject to standard nonrecourse carve-out guarantees for “bad boy” type acts. Morgans Group and affiliates of its joint venture partner also agreed to guarantee the joint venture’s obligation to reimburse certain expenses incurred by the lenders and indemnify the lenders in the event such lenders incur liability in connection with certain third-party actions. Morgans Group and affiliates of its joint venture partner have also guaranteed the joint venture’s liability for the unpaid principal amount of any seller financing note provided for condominium sales if such financing or related mortgage lien is found unenforceable, provided they shall not have any liability if the seller financed unit becomes subject to the lien of the lender’s mortgage or title to the seller financed unit is otherwise transferred to the lender or if such seller financing note is repurchased by Morgans Group and/or affiliates of its joint venture at the full amount of unpaid principal balance of such seller financing note. The Company and affiliates of its joint venture partner also have each agreed to purchase approximately $14.0 million of condominium units under certain conditions, including an event of default. In the event of a default under the lender’s mortgage or mezzanine loan, the joint venture partners are each obligated to purchase selected condominium units, at agreed-upon sales prices, having aggregate sales prices equal to 1/2 of the lesser of $28.0 million, which is the face amount outstanding on the lender’s mezzanine loan, or the then outstanding principal balance of the lender’s mezzanine loan. The joint venture is not currently in an event of default under the mortgage or mezzanine loan. As of March 31, 2016, there had been no triggering event that would require the Company to recognize a liability related to the construction completion or the condominium purchase guarantees. Litigation Regarding TLG Promissory Notes On August 5, 2013, Messrs. Andrew Sasson and Andy Masi filed a lawsuit in the Supreme Court of the State of New York against TLG Acquisition LLC and Morgans Group LLC relating to the $18.0 million TLG Promissory Notes. See note 1 and note 7 regarding the background of the TLG Promissory Notes. The complaint alleges, among other things, a breach of contract and an event of default under the TLG Promissory Notes as a result of the Company’s failure to repay the TLG Promissory Notes following an alleged “Change of Control” that purportedly occurred upon the election of the Company’s Board of Directors on June 14, 2013. The complaint sought payment of Mr. Sasson’s $16.0 million TLG Promissory Note and Mr. Masi’s $2.0 million TLG Promissory Note, plus interest compounded to principal, as well as default interest, and reasonable costs and expenses incurred in the lawsuit. On September 26, 2013, the Company filed a motion to dismiss the complaint in its entirety. On February 6, 2014, the court granted the Company’s motion to dismiss. On March 7, 2014, Messrs. Sasson and Masi filed a Notice of Appeal from this decision with the Appellate Division, First Department. On April 9, 2015, the Appellate Division, First Department, reversed the trial court’s decision, denying the motion to dismiss and remanding to the trial court for further proceedings. The Company filed a motion for reconsideration at the appellate court, which was denied on July 7, 2015. The Company filed its answer to the complaint with the trial court on May 11, 2015. On August 27, 2015, Messrs. Sasson and Masi filed a motion for partial summary judgment with the trial court and the Company filed its opposition to that motion on October 12, 2015. In February 2016, the plaintiff’s partial summary judgment motion was granted and the judge signed the order in March 2016 in the amount of approximately $2.8 million, although the judgment has not yet been entered. The Company has filed its notice of appeal and may be required to post a cash bond in the amount of the judgment to secure its ability to perfect its appeal. Plaintiffs also have a claim for attorneys' fees which the Company intends to dispute and oppose. They have not yet stated a claimed amount to the court but they have recently estimated this claim at approximately $1.0 million. A lthough the TLG Promissory Notes were repaid and retired in December 2014, this lawsuit remains pending in connection with issues related primarily to the interest rates applicable to the TLG Promissory Notes. Environmental As a holder of real estate, the Company is subject to various environmental laws of federal, state and local governments. Compliance by the Company with existing laws has not had an adverse effect on the Company and management does not believe that it will have a material adverse impact in the future. However, the Company cannot predict the impact of new or changed laws or regulations. Other Litigation The Company is involved in various lawsuits and administrative actions in the normal course of business, in addition to the other litigation noted above. The Company has recorded the necessary accrual for contingent liabilities related to outstanding litigations. |
Omnibus Stock Incentive Plan
Omnibus Stock Incentive Plan | 3 Months Ended |
Mar. 31, 2016 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Omnibus Stock Incentive Plan | 8. Omnibus Stock Incentive Plan On May 22, 2007, the Company adopted the Morgans Hotel Group Co. 2007 Omnibus Stock Incentive Plan. Subsequently and on several occasions, the Company’s Board of Directors adopted, and stockholders approved, amendments to the 2007 Omnibus Stock Incentive Plan (the “Stock Plan”), to namely increase the number of shares reserved for issuance under the plan. As of March 31, 2016, the Stock Plan had 14,610,000 shares reserved for issuance. The Stock Plan provides for the issuance of stock-based incentive awards, including incentive stock options, non-qualified stock options, stock appreciation rights, shares of common stock of the Company, including restricted stock units (“RSUs”) and other equity-based awards, including membership units in Morgans Group which are structured as profits interests (“LTIP Units”), or any combination of the foregoing. The eligible participants in the Stock Plan include directors, officers and employees of the Company. Awards other than options and stock appreciation rights reduce the shares available for grant by 1.7 shares for each share subject to such an award. The Company has granted, or may grant, RSUs to certain executives, employees or non-employee directors as part of future annual equity grants or to newly hired or promoted employees from time to time. A summary of stock-based incentive awards as of March 31, 2016 is as follows (in units, or shares, as applicable): Restricted Stock Units LTIP Units Stock Options Outstanding as of January 1, 2016 220,799 913,423 248,315 Granted during 2016 — — — Distributed/exercised during 2016 (41,621 ) — — Forfeited or cancelled during 2016 (51,408 ) — (40,300 ) Outstanding as of March 31, 2016 127,770 913,423 208,015 Vested as of March 31, 2016 — 913,423 208,015 Total stock compensation expense, which is included in corporate expenses on the accompanying consolidated statements of comprehensive loss, was $0.1 As of March 31, 2016 and December 31, 2015, there were approximately $ 0.2 0.9 years |
Preferred Securities and Warran
Preferred Securities and Warrants | 3 Months Ended |
Mar. 31, 2016 | |
Equity [Abstract] | |
Preferred Securities and Warrants | 9. Preferred Securities and Warrants Preferred Securities and Warrants Held by Yucaipa Investors On October 15, 2009, the Company entered into a Securities Purchase Agreement with the Yucaipa Investors. Under the agreement, the Company issued and sold to the Yucaipa Investors (i) $75.0 million of preferred stock comprised of 75,000 shares of the Company’s Series A preferred securities, $1,000 liquidation preference per share, and (ii) warrants to purchase 12,500,000 shares of the Company’s common stock at an exercise price of $6.00 per share, or the Yucaipa Warrants, which are exercisable utilizing a cashless exercise method only, resulting in a net share issuance. The Series A preferred securities had an 8% dividend rate through October 15, 2014 and have a 10% dividend rate until October 15, 2016 and a 20% dividend rate thereafter. The Company has the option to accrue any and all dividend payments. The cumulative unpaid dividends have a dividend rate equal to the dividend rate on the Series A preferred securities. As of March 31, 2016, the Company had undeclared and unpaid dividends of approximately $58.9 million. The Company has the option to redeem any or all of the Series A preferred securities at par at any time. The Series A preferred securities have limited voting rights and only vote on the authorization to issue senior preferred securities, amendments to their certificate of designations and amendments to the Company’s charter that adversely affect the Series A preferred securities. For so long as the Yucaipa Investors own a majority of the outstanding Series A preferred securities under the terms of the certificate of designations governing the Series A preferred securities, they also have certain consent rights, subject to certain exceptions and limitations, over certain transactions involving the acquisition of the Company by any third party, other than as the result of the disposition of our real estate assets where we continue to engage in the business of managing hotel properties and other real estate, pursuant to which the Series A preferred securities are converted or otherwise reclassified into or exchanged for securities of another entity, and certain other transactions where a vote of the holders of the Series A preferred securities is required by law or the Company’s certificate of incorporation. As discussed in note 2, the Yucaipa Warrants to purchase 12,500,000 shares of the Company’s common stock at an exercise price of $6.00 per share have a 7-1/2 year term and are exercisable utilizing a cashless exercise method only, resulting in a net share issuance. In accordance with ASC 815-10-15, the Yucaipa Warrants are accounted for as equity instruments indexed to the Company’s stock. The Yucaipa Investors’ right to exercise the Yucaipa Warrants to purchase 12,500,000 shares of the Company’s common stock expires in April 2017. The exercise price and number of shares subject to the Yucaipa Warrants are both subject to anti-dilution adjustments. For so long as the Yucaipa Investors collectively own or have the right to purchase through exercise of the Yucaipa Warrants (assuming a cash rather than a cashless exercise) 875,000 shares of the Company’s common stock, the Company has agreed to use its reasonable best efforts to cause its Board of Directors to nominate and recommend to the Company’s stockholders the election of a person nominated by the Yucaipa Investors as a director of the Company and to use its reasonable best efforts to ensure that the Yucaipa Investors’ nominee is elected to the Company’s Board of Directors at each such meeting. If that nominee is not elected as a director at a meeting of stockholders, the Yucaipa Investors have certain Board of Director observer rights. Further, if the Company does not, within 30 days from the date of such meeting, create an additional seat on the Board of Directors and make available such seat to the nominee, the dividend rate on the Series A preferred securities increases by 4% during any time that a Yucaipa Investors’ nominee is not a member of the Company’s Board of Directors. A Yucaipa Investors’ nominee currently sits on the Company’s Board of Directors. Accordingly, the current annual dividend rate on the Series A preferred securities is 10%. Under the terms of the Securities Purchase Agreement, the Yucaipa Investors have consent rights over certain transactions for so long as they collectively own or have the right to purchase, assuming cashless exercise of the Yucaipa Warrants, 6,250,000 shares of the Company’s common stock, including (subject to certain exceptions and limitations): · the sale of substantially all of the Company’s assets to a third party; · the acquisition by the Company of a third party where the equity investment by the Company is $100.0 million or greater; · the acquisition of the Company by a third party , other than as the result of the disposition of our real estate assets where the Company continues to engage in the business of managing hotel properties and other real property assets · any change in the size of the Company’s Board of Directors to a number below 7 or above 9. The Yucaipa Investors are subject to certain standstill arrangements as long as they beneficially own over 15% of the Company’s common stock. The initial carrying value of the Series A preferred securities was recorded at its net present value less costs to issue on the date of issuance. The carrying value will be periodically adjusted for accretion of the discount. As of March 31, 2016, the value of the preferred securities was $72.2 million, which includes cumulative accretion of $24.2 million. See note 13 for additional information pertaining to the Series A preferred securities and the Yucaipa Warrants. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2016 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 10. Related Party Transactions The Company earned management fees, chain services reimbursements and fees for certain technical services and has receivables from hotels it owns through investments in unconsolidated joint ventures. These fees totaled approximately $ 0.6 1.1 As of March 31, 2016 and December 31, 2015, the Company had receivables from these affiliates of approximately $0.4 million and $ 0.4 |
Other Expenses
Other Expenses | 3 Months Ended |
Mar. 31, 2016 | |
Other Income And Expenses [Abstract] | |
Other Expenses | 11. Other Expenses Restructuring and development costs Restructuring expenses primarily relate to costs incurred related to the Company’s corporate restructuring initiatives, such as professional fees, litigation and settlement costs, executive terminations and severance costs related to such restructuring initiatives, the Board of Directors’ strategic alterative review process costs, proxy contests, and gains and losses on asset disposals as part of major renovation projects. Development expenses primarily relate to transaction costs related to the acquisition or termination of projects, internal development payroll and other costs and pre-opening expenses incurred related to new concepts at existing hotel and the development of new hotels, and the write-off of abandoned development projects previously capitalized. R Three Months Ended March 31, 2016 Three Months Ended March 31, 2015 Restructuring costs $ 579 $ 295 Severance costs 5 1,660 Development 110 148 Other 5 (6 ) $ 699 $ 2,097 Other non-operating expenses Other non-operating expenses primarily relate to costs associated with discontinued operations and previously owned hotels, both consolidated and unconsolidated, miscellaneous litigation and settlement costs and other expenses that relate to the financing and investing activities of the Company. Other non-operating expenses consist of the following (in thousands): Three Months Ended March 31, 2016 Three Months Ended March 31, 2015 Litigation costs 434 1,282 Other 109 373 $ 543 $ 1,655 |
Deferred Gain on Asset Sales
Deferred Gain on Asset Sales | 3 Months Ended |
Mar. 31, 2016 | |
Revenue Recognition [Abstract] | |
Deferred Gain on Asset Sales | 12. Deferred Gain on Asset Sales Deferred Gain In 2011, the Company sold Mondrian Los Angeles, Royalton, Morgans, and its 50% equity interest in the joint venture that owned Sanderson and St Martins Lane. The Company continues to operate all of these hotels under long-term management agreements. In accordance with ASC 360-20, Property, Plant and Equipment, Real Estate Sales Gain on Sale of TLG Equity Interest On January 23, 2015, t he Company completed the TLG Equity Sale, as discussed in note 1, and received proceeds of $32.8 million, net of closing costs. In accordance with ASC 360-20, the Company recognized a gain of $1.8 million on the sale of its interest in TLG during the three months ended March 31, 2015. The operating results of TLG’s operations from January 1, 2015 to January 22, 2015 was not significant. |
Subsequent Event
Subsequent Event | 3 Months Ended |
Mar. 31, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Event | 13. Subsequent Events On May 9, 2016, and as described in the Form 8-K filed with the SEC on May 9, 2016, the Company entered into a definitive agreement under which the Company will be acquired by SBEEG Holdings LLC (“SBE”), a leading global lifestyle hospitality company. Under the terms of the agreement, SBE will acquire all of the outstanding shares of the Company’s common stock for $2.25 per share in cash. As part of the transaction, affiliates of the Yucaipa Investors will exchange their $75.0 million in Series A preferred securities, accrued preferred dividends, and warrants for $75.0 million in preferred shares and an interest in the common equity in the acquirer and, following the closing, the leasehold interests in three restaurants in Las Vegas currently held by the Company. The transaction, which was approved by the Company’s Board of Directors, is expected to close in the third or fourth quarter, and is subject to regulatory approvals, the assumption or refinancing of the Company’s mortgage loan agreements, and customary closing conditions, including approval of the transaction by the Company’s stockholders. The Company’s stockholders representing approximately 29% of the Company’s outstanding shares of common stock have signed voting agreements in support of this transaction, including OTK Associates, Pine River Capital Management and Vector Group Ltd. An affiliate of Yucaipa has also signed a voting agreement in respect of its Series A preferred securities and consented to the transaction for purposes of certain provisions of the Securities Purchase Agreement between the Yucaipa Investors and the Company. |
Summary of Significant Accoun20
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2016 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The Company consolidates all wholly-owned subsidiaries and variable interest entities in which the Company is determined to be the primary beneficiary. All intercompany balances and transactions have been eliminated in consolidation. Entities which the Company does not control through voting interest and entities which are variable interest entities of which the Company is not the primary beneficiary, are accounted for under the equity method. The consolidated financial statements have been prepared in accordance with U.S. GAAP for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The information furnished in the accompanying consolidated financial statements reflects all adjustments that, in the opinion of management, are necessary for a fair presentation of the aforementioned consolidated financial statements for the interim periods. Operating results for the three months ended March 31, 2016 are not necessarily indicative of the results that may be expected for the year ending December 31, 2016. For further information, refer to the consolidated financial statements and accompanying footnotes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Restricted Cash | Restricted Cash As required by certain debt and lease agreements, restricted cash consists of cash held in escrow accounts for debt service or lease payments, insurance programs, and taxes, among others. As further required by the debt and lease agreements related to hotels owned by the Company or one of its subsidiaries, the Company must set aside 4% of the hotels’ revenues in restricted escrow accounts for the future periodic replacement or refurbishment of furniture, fixtures and equipment. As replacements occur, the Company or its subsidiary is eligible for reimbursement from these escrow accounts. The Hudson/Delano 2014 Mortgage Loan, defined and discussed below in note 6, provides that all cash flows from Hudson and Delano South Beach are deposited into accounts controlled by the lenders from which debt service and operating expenses, including management fees, are paid and from which other reserve accounts may be funded. In the event the debt yield ratio falls below 6.75%, any excess amounts will be retained by the lenders until the debt yield ratio exceeds 7.00% for two consecutive calendar quarters. As of March 31, 2016, the Company’s debt yield ratio was 6.84%. The Company may fall below the 6.75% defined threshold during the second quarter of 2016. |
Assets Held for Sale | Assets Held for Sale The Company considers properties to be assets held for sale when management approves and commits to a formal plan to actively market a property or a group of properties for sale and the sale is probable whereby a signed sales contract and significant non-refundable deposit or contract break-up fee exist. |
Investments in and Advances to Unconsolidated Joint Ventures | Investments in and Advances to Unconsolidated Joint Ventures The Company accounts for its investments in unconsolidated joint ventures using the equity method as it does not exercise control over significant business decisions such as buying, selling or financing nor is it the primary beneficiary under Account Standard Codification (“ASC”) 810-10, Consolidation |
Other Assets | Other Assets In October 2014, the Company funded an approximately $15.3 million key money obligation related to Mondrian London, which is included in Other Assets and is being amortized over the term of the hotel management agreement. In August 2012, the Company entered into a 10-year licensing agreement with MGM, with two five-year extensions at the Company’s option subject to performance thresholds, to convert an existing hotel to Delano Las Vegas. Delano Las Vegas opened in September 2014. In addition, the Company acquired the leasehold interests in three food and beverage venues at Mandalay Bay in Las Vegas from an existing tenant for $15.0 million in cash at closing and a deferred, principal-only $10.6 million promissory note (“Restaurant Lease Note”) to be paid over seven years, which the Company recorded at fair value as of the date of issuance at $7.5 million, as discussed in note 6. The three food and beverage venues are managed by TLG and are operated pursuant to 10-year operating leases with an MGM affiliate, pursuant to which the Company pays minimum annual lease payments and a percentage rent based on cash flow. The Company allocated the total consideration paid, or to be paid, to the license agreement and the restaurant leasehold asset based on their respective fair values. |
Income Taxes | Income Taxes The Company accounts for income taxes in accordance with ASC 740-10, Income Taxes The Company’s deferred tax assets are recorded net of a valuation allowance when, based on the weight of available evidence, it is more likely than not that some portion or all of the recorded deferred tax assets will not be realized in future periods. Decreases to the valuation allowance are recorded as reductions to the Company’s provision for income taxes and increases to the valuation allowance result in additional provision for income taxes. The realization of the Company’s deferred tax assets, net of the valuation allowance, is primarily dependent on estimated future taxable income. A change in the Company’s estimate of future taxable income may require an addition to or reduction from the valuation allowance. The Company has established a reserve on its deferred tax assets based on anticipated future taxable income and tax strategies. All of the Company’s foreign subsidiaries are subject to local jurisdiction corporate income taxes. Income tax expense is reported at the applicable rate for the periods presented. Income taxes for the three months ended March 31, 2016 and 2015 were computed using the Company’s effective tax rate. |
Credit-risk-related Contingent Features | Credit-risk-related Contingent Features The Company has entered into warrant agreements with Yucaipa American Alliance Fund II, L.P. and Yucaipa American Alliance (Parallel) Fund II, L.P., (collectively, the “Yucaipa Investors”), as discussed in note 9, to purchase a total of 12,500,000 shares of the Company’s common stock at an exercise price of $6.00 per share (the “Yucaipa Warrants”). In addition, subject to the terms of the Securities Purchase Agreement, the Yucaipa Investors have certain consent rights over certain transactions for so long as they collectively own or have the right to purchase through exercise of the Yucaipa Warrants 6,250,000 shares of the Company’s common stock, as discussed further in note 9. The Yucaipa Warrants are exercisable utilizing a cashless exercise method only, resulting in a net share issuance. See note 13 for additional information about the Yucaipa Warrants. |
Fair Value Measurements | Fair Value Measurements ASC 820-10, Fair Value Measurements and Disclosures ASC 820-10 emphasizes that fair value is a market-based measurement, not an entity-specific measurement. Therefore, a fair value measurement should be determined based on the assumptions that market participants would use in pricing the asset or liability. As a basis for considering market participant assumptions in fair value measurements, ASC 820-10 establishes a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within Levels 1 and 2 of the hierarchy) and the reporting entity’s own assumptions about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy). Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access. Level 2 inputs are inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs may include quoted prices for similar assets and liabilities in active markets, as well as inputs that are observable for the asset or liability (other than quoted prices), such as interest rates and yield curves that are observable at commonly quoted intervals. Level 3 inputs are unobservable inputs for the asset or liability, which is typically based on an entity’s own assumptions, as there is little, if any, related market activity. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability. Currently, the Company uses interest rate caps to manage its interest rate risk. The valuation of these instruments is determined using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves and implied volatilities. To comply with the provisions of ASC 820-10, the Company incorporates credit valuation adjustments to appropriately reflect both its own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. In adjusting the fair value of its derivative contracts for the effect of nonperformance risk, the Company has considered the impact of netting and any applicable credit enhancements, such as collateral postings, thresholds, mutual puts, and guarantees. Although the Company has determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with its derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by itself and its counterparties. As of March 31, 2016 and December 31, 2015, the Company assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and determined that the credit valuation adjustments are not significant to the overall valuation of its derivatives. Accordingly, all derivatives have been classified as Level 2 fair value measurements. As of March 31, 2016, the Company had three interest rate caps outstanding and the fair value of these interest rate caps was $1.0 million |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Disclosures about fair value of financial instruments are based on pertinent information available to management as of the valuation date. Considerable judgment is necessary to interpret market data and develop estimated fair values. Accordingly, the estimates presented are not necessarily indicative of the amounts at which these instruments could be purchased, sold, or settled. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts. The Company’s financial instruments include cash and cash equivalents, accounts receivable, restricted cash, accounts payable and accrued liabilities, and fixed and variable rate debt. Management believes the carrying amount of the aforementioned financial instruments, excluding fixed-rate debt, is a reasonable estimate of fair value as of March 31, 2016 and December 31, 2015 due to the short-term maturity of these items or variable market interest rates. The Company had outstanding fixed rate debt principal of $54.6 million and $54.9 million as of March 31, 2016 March 31, 2016 Although the Company has determined that the majority of the inputs used to value its fixed rate debt fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with its fixed rate debt utilize Level 3 inputs, such as estimates of current credit spreads. As of March 31, 2016 and December 31, 2015, the Company assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its fixed rate debt and determined that the credit valuation adjustments are not significant to the overall valuation of its fixed rate debt. Accordingly, all derivatives have been classified as Level 2 fair value measurements. |
Noncontrolling Interest | Noncontrolling Interest The Company follows ASC 810-10, when accounting and reporting for noncontrolling interests in a consolidated subsidiary and the deconsolidation of a subsidiary. Under ASC 810-10, the Company reports noncontrolling interests in subsidiaries as a separate component of stockholders’ equity (deficit) in the consolidated financial statements and reflects net income (loss) attributable to the noncontrolling interests and net income (loss) attributable to the common stockholders on the face of the consolidated statements of comprehensive loss. The membership units in Morgans Group, the Company’s operating company, owned by the Former Parent are presented as a noncontrolling interest in Morgans Group in the consolidated balance sheets and were approximately $0.6 million and $0.6 million as of March 31, 2016 and December 31, 2015, respectively. The noncontrolling interest in Morgans Group is: (i) increased or decreased by the holders of membership interests’ pro rata share of Morgans Group’s net income or net loss, respectively; (ii) decreased by distributions; (iii) decreased by exchanges of membership units for the Company’s common stock; and (iv) adjusted to equal the net equity of Morgans Group multiplied by the holders of membership interests’ ownership percentage immediately after each issuance of units of Morgans Group and/or shares of the Company’s common stock and after each purchase of treasury stock through an adjustment to additional paid-in capital. Net income or net loss allocated to the noncontrolling interest in Morgans Group is based on the weighted-average percentage ownership throughout the period. As of March 31, 2016, there were 75,446 membership units outstanding, each of which is exchangeable for a share of the Company’s common stock. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In February 2016, the FASB issued ASU No. 2016-02 (“ASU 2016-02”), “Leases.” In March 2016, the FASB issued ASU No. 2016-09 (“ASU 2016-09”), “Compensation – Stock Compensation (Topic 708): Improvements to Employee Share-Based Payment Accounting. In May 2014, the FASB issued ASU No. 2014-09, “ Revenue from Contracts with Customers (Topic 606)” and supersedes the revenue recognition requirements in Topic 605, Revenue Recognition , as well as most industry-specific guidance. , “Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations”, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date”, |
Reclassifications | Reclassifications Certain prior period financial statement amounts have been reclassified to conform to the current period presentation. |
Organization and Formation Tr21
Organization and Formation Transaction (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Hotels | The Company’s hotels as of March 31, 2016 were as follows: Hotel Name Location Number of Rooms Interest Hudson New York, 878 (1 ) Morgans New York, NY 117 (2 ) Royalton New York, NY 168 (2 ) Delano South Beach Miami Beach, FL 194 (3 ) Mondrian South Beach Miami Beach, FL 220 (4 ) Shore Club Miami Beach, FL 308 (5 ) Mondrian Los Angeles Los Angeles, CA 236 (2 ) Clift San Francisco, CA 372 (6 ) Sanderson London, England 150 (2 ) St Martins Lane London, England 204 (2 ) Mondrian London at Sea Containers London, England 359 (2 ) Delano Las Vegas Las 1,117 (7 ) 10 Karakoy Istanbul, Turkey 71 (8 ) (1) The Company owns 100% of Hudson through its subsidiary, Henry Hudson Holdings LLC, which is part of a property that is structured as a condominium, in which Hudson constitutes 96% of the square footage of the entire building. As of March 31, 2016, Hudson had 878 guest rooms and 60 single room dwelling units (“SROs”). (2) Operated under a management contract. (3) Wholly-owned hotel. (4) Operated as a condominium hotel under a management contract and owned through a 50/50 unconsolidated joint venture. As of March 31, 2016 , 276 hotel residences had been sold, of which 161 are in the hotel rental pool and are included in the hotel room count, and 59 hotel residences remain to be sold, all of which are in the hotel program. See note 4. (5) Operated under a management contract. The Company currently expects to no longer manage Shore Club during the fourth quarter of (6) The hotel is operated under a long-term lease which is accounted for as a financing. See note 6. (7) A licensed hotel managed by MGM. (8) A franchised hotel. |
Income (Loss) Per Share (Tables
Income (Loss) Per Share (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Earnings Per Share [Abstract] | |
Components of Basic and Diluted Loss Per Share Calculations | The table below details the components of the basic and diluted loss per share calculations (in thousands, except for per share data). The Company has not had any undistributed earnings in any calendar quarter presented. Therefore, the Company does not present earnings per share following the two-class method. Three Ended March 31, 2016 Three Months Ended March 31, 2015 Numerator: Net loss $ (8,922 ) $ (12,838 ) Net loss attributable to noncontrolling interest 18 14 Net loss attributable to Morgans Hotel Group Co. (8,904 ) (12,824 ) Less: preferred stock dividends and accretion 4,467 3,910 Net loss attributable to common stockholders $ (13,371 ) $ (16,734 ) Denominator: Weighted average basic common shares outstanding 34,739 34,388 Effect of dilutive securities — — Weighted average diluted common shares outstanding 34,739 34,388 Basic and diluted loss attributable to common stockholders per common share $ (0.38 ) $ (0.49 ) |
Debt and Capital Lease Obliga23
Debt and Capital Lease Obligations (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Debt Disclosure [Abstract] | |
Debt and Capital Lease Obligations | Debt and capital lease obligations consists of the following (in thousands): Description Principal as of March 31, 2016 Unamortized Debt Issuance Costs as of March 31, 2016 Net Debt as of March 31, 2016 Interest rate at March 31, 2016 Hudson/Delano Mortgage (a) $ 421,803 $ (1,026 ) $ 420,777 5.94% (LIBOR cap Clift debt (b) 95,800 (46 ) 95,754 9.60% Liability to subsidiary trust (c) 50,100 (2,967 ) 47,133 8.68% Restaurant Lease Note (d) 4,535 - 4,535 (d) Capital lease obligations (e) 6,105 - 6,105 (e) Debt and capital lease obligation $ 578,343 $ (4,039 ) $ 574,304 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Commitments And Contingencies Disclosure [Abstract] | |
License or Franchise Agreements for New Hotels Which are in Development Stage | T he Company has signed management, license or franchise agreements for new hotels which are in various stages of development. As of March 31, 2016, these included the following: Expected Room Count Anticipated Opening Initial Term Hotels Currently Under Construction or Renovation: Mondrian Doha 270 2016 30 years Delano Dubai 110 2017 20 years Other Signed Agreements: Mondrian Dubai 235 15 years Delano Aegean Sea 150 20 years Delano Cartagena 211 20 years |
Omnibus Stock Incentive Plan (T
Omnibus Stock Incentive Plan (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Summary of Stock-based Incentive Awards | A summary of stock-based incentive awards as of March 31, 2016 is as follows (in units, or shares, as applicable): Restricted Stock Units LTIP Units Stock Options Outstanding as of January 1, 2016 220,799 913,423 248,315 Granted during 2016 — — — Distributed/exercised during 2016 (41,621 ) — — Forfeited or cancelled during 2016 (51,408 ) — (40,300 ) Outstanding as of March 31, 2016 127,770 913,423 208,015 Vested as of March 31, 2016 — 913,423 208,015 |
Other Expenses (Tables)
Other Expenses (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Other Income And Expenses [Abstract] | |
Restructuring and Development Costs | R estructuring and development costs consist of the following (in thousands): Three Months Ended March 31, 2016 Three Months Ended March 31, 2015 Restructuring costs $ 579 $ 295 Severance costs 5 1,660 Development 110 148 Other 5 (6 ) $ 699 $ 2,097 |
Other Non-Operating Expenses | Other non-operating expenses consist of the following (in thousands): Three Months Ended March 31, 2016 Three Months Ended March 31, 2015 Litigation costs 434 1,282 Other 109 373 $ 543 $ 1,655 |
Organization and Formation Tr27
Organization and Formation Transaction - Additional Information (Detail) $ in Millions | Jan. 23, 2015USD ($) | Jan. 15, 2015USD ($) | Nov. 30, 2011USD ($) | Dec. 31, 2014USD ($) | Mar. 31, 2016USD ($)Segment | Mar. 31, 2015 | Feb. 01, 2006shares |
Organization and Formation Transaction [Line Items] | |||||||
Date of incorporation | Oct. 19, 2005 | ||||||
Incorporated state | Delaware | ||||||
Membership units exchangeable for common stock | shares | 1,000,000 | ||||||
Number of reportable operating segments | Segment | 1 | ||||||
Impairment of goodwill | $ 0.4 | ||||||
Hakkasan Holdings LLC | |||||||
Organization and Formation Transaction [Line Items] | |||||||
Cash paid on exercise of minority holder put rights | $ 3.6 | $ 3.6 | |||||
Hakkasan Holdings LLC | Maximum | |||||||
Organization and Formation Transaction [Line Items] | |||||||
Future ownership interest option | 49.00% | ||||||
The Light Group | Hakkasan Holdings LLC | |||||||
Organization and Formation Transaction [Line Items] | |||||||
Equity interest sold | 90.00% | ||||||
Proceeds from Equity Sale | $ 32.8 | ||||||
The Light Group | Hakkasan Holdings LLC | Indemnification Guarantee | |||||||
Organization and Formation Transaction [Line Items] | |||||||
Liability related to indemnification obligations | $ 0.3 | ||||||
The Light Group Purchase | |||||||
Organization and Formation Transaction [Line Items] | |||||||
Ownership interest owned | 90.00% | ||||||
Cash paid for acquisition | $ 28.5 | ||||||
The Light Group Purchase | T L G Promissory Note | |||||||
Organization and Formation Transaction [Line Items] | |||||||
Promissory notes issued to acquire business | $ 18 | ||||||
Repayments of outstanding promissory notes | $ 19.1 | ||||||
Debt instrument, face value | 18 | ||||||
Deferred interest | $ 1.1 | ||||||
Sasson-Masi Put Options | |||||||
Organization and Formation Transaction [Line Items] | |||||||
Cash paid on exercise of minority holder put rights | 1.4 | ||||||
Minority equity interest percentage | 10.00% | ||||||
Estimated aggregate purchase price | $ 5 | ||||||
International Locations | Geographic Concentration Risk | Total Revenues | |||||||
Organization and Formation Transaction [Line Items] | |||||||
Percentage of revenues | 6.60% | 6.60% |
Hotels (Detail)
Hotels (Detail) | Mar. 31, 2016Room | |
Hudson | ||
Entity Hotels Disclosure [Line Items] | ||
Number of Rooms | 878 | |
Hudson | New York, NY | ||
Entity Hotels Disclosure [Line Items] | ||
Number of Rooms | 878 | [1] |
Morgans | New York, NY | ||
Entity Hotels Disclosure [Line Items] | ||
Number of Rooms | 117 | [2] |
Royalton | New York, NY | ||
Entity Hotels Disclosure [Line Items] | ||
Number of Rooms | 168 | [2] |
Delano South Beach | Miami Beach, FL | ||
Entity Hotels Disclosure [Line Items] | ||
Number of Rooms | 194 | [3] |
Mondrian South Beach | Miami Beach, FL | ||
Entity Hotels Disclosure [Line Items] | ||
Number of Rooms | 220 | [4] |
Shore Club | Miami Beach, FL | ||
Entity Hotels Disclosure [Line Items] | ||
Number of Rooms | 308 | [5] |
Mondrian Los Angeles | Los Angeles, CA | ||
Entity Hotels Disclosure [Line Items] | ||
Number of Rooms | 236 | [2] |
Clift | San Francisco, CA | ||
Entity Hotels Disclosure [Line Items] | ||
Number of Rooms | 372 | [6] |
Sanderson | London, England | ||
Entity Hotels Disclosure [Line Items] | ||
Number of Rooms | 150 | [2] |
St Martins Lane | London, England | ||
Entity Hotels Disclosure [Line Items] | ||
Number of Rooms | 204 | [2] |
Mondrian London at Sea Containers | London, England | ||
Entity Hotels Disclosure [Line Items] | ||
Number of Rooms | 359 | [2] |
Delano Las Vegas | Las Vegas, Nevada | ||
Entity Hotels Disclosure [Line Items] | ||
Number of Rooms | 1,117 | [7] |
10 Karakoy | Istanbul, Turkey | ||
Entity Hotels Disclosure [Line Items] | ||
Number of Rooms | 71 | [8] |
[1] | The Company owns 100% of Hudson through its subsidiary, Henry Hudson Holdings LLC, which is part of a property that is structured as a condominium, in which Hudson constitutes 96% of the square footage of the entire building. As of March 31, 2016, Hudson had 878 guest rooms and 60 single room dwelling units (“SROs”). | |
[2] | Operated under a management contract. | |
[3] | Wholly-owned hotel. | |
[4] | Operated as a condominium hotel under a management contract and owned through a 50/50 unconsolidated joint venture. As of March 31, 2016, 276 hotel residences had been sold, of which 161 are in the hotel rental pool and are included in the hotel room count, and 59 hotel residences remain to be sold, all of which are in the hotel program. See note 4. | |
[5] | Operated under a management contract. The Company currently expects to no longer manage Shore Club during the fourth quarter of 2016. | |
[6] | The hotel is operated under a long-term lease which is accounted for as a financing. See note 6. | |
[7] | A licensed hotel managed by MGM. | |
[8] | A franchised hotel. |
Hotels (Parenthetical) (Detail)
Hotels (Parenthetical) (Detail) | Mar. 31, 2016RoomHotel |
Hudson | |
Entity Hotels Disclosure [Line Items] | |
Ownership interest owned | 100.00% |
Percentage of square footage of building owned | 96.00% |
Number of Rooms | Room | 878 |
Number of SROs | Room | 60 |
Mondrian South Beach | |
Entity Hotels Disclosure [Line Items] | |
Equity ownership | 50.00% |
Number of hotel residences sold | 276 |
Number of rented hotel residence | 161 |
Number of hotel residences remain to be sold | 59 |
Summary of Significant Accoun30
Summary of Significant Accounting Policies - Additional Information (Detail) | Oct. 15, 2009$ / sharesshares | Aug. 31, 2012USD ($)AgreementRestaurant | Mar. 31, 2016USD ($)Derivative$ / sharesshares | Dec. 31, 2015USD ($)shares | Oct. 31, 2014USD ($) |
Summary Of Significant Accounting Policies [Line Items] | |||||
Percentage of hotels' revenues in restricted escrow accounts | 4.00% | ||||
Investments in unconsolidated joint ventures, liabilities | $ 0 | ||||
Term of license agreement | 10 years | ||||
Operating lease expiration period | 10 years | ||||
Outstanding fixed rate debt principal | 54,600,000 | $ 54,900,000 | |||
Fair market value of fixed rate debt | 62,000,000 | 60,600,000 | |||
Membership units in noncontrolling interest | $ 579,000 | $ 597,000 | |||
Membership units in Morgans Group outstanding | shares | 75,446 | 75,446 | |||
Yucaipa Warrants | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Right to purchase common stock through the exercise of warrants | shares | 12,500,000 | 12,500,000 | |||
Exercise price of warrants or rights | $ / shares | $ 6 | $ 6 | |||
Investors consent rights warrants | shares | 6,250,000 | 6,250,000 | |||
Convert Existing Hotel To Delano Las Vegas | Restaurant Lease Note | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Deferred promissory note payable | $ 10,600,000 | ||||
Restaurant lease note term | 7 years | ||||
Fair value of restaurant lease note | $ 7,500,000 | ||||
Mondrian London | Other assets, net | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Key money | $ 15,300,000 | ||||
Delano Las Vegas | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Extension of license agreement | 5 years | ||||
Number of times license agreement period to be extended | Agreement | 2 | ||||
Company acquired the leasehold interest in number of food and beverage venues | Restaurant | 3 | ||||
Cash payment to acquire leasehold interests | $ 15,000,000 | ||||
Finite lived intangible assets useful life | 10 years | ||||
Delano Las Vegas | Restaurant Lease Note | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Deferred promissory note payable | $ 10,600,000 | ||||
Restaurant lease note term | 7 years | ||||
Fair value of restaurant lease note | $ 7,500,000 | ||||
Hudson/Delano 2014 Mortgage Loan | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Debt yield ratio, minimum threshold | 6.75% | ||||
Debt yield ratio that must be achieved after falling below minimum debt yield threshold | 7.00% | ||||
Debt yield ratio | 6.84% | ||||
Interest Rate Caps | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Number of interest rate caps outstanding | Derivative | 3 | ||||
Fair value of interest rate caps | $ 1,000,000 |
Income (Loss) Per Share - Addit
Income (Loss) Per Share - Additional Information (Detail) - shares | 3 Months Ended | |
Mar. 31, 2016 | Dec. 31, 2015 | |
Earnings Per Share [Abstract] | ||
Assumption of net income distributed as dividends for calculation of net income per share | 100.00% | |
Antidilutive securities excluded from computation of earnings per share, amount | 75,446 | 75,446 |
Components of Basic and Diluted
Components of Basic and Diluted Loss Per Share Calculations (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Numerator: | ||
Net loss | $ (8,922) | $ (12,838) |
Net loss attributable to noncontrolling interest | 18 | 14 |
Net loss attributable to Morgans Hotel Group Co. | (8,904) | (12,824) |
Less: preferred stock dividends and accretion | 4,467 | 3,910 |
Net loss attributable to common stockholders | $ (13,371) | $ (16,734) |
Denominator: | ||
Weighted average basic common shares outstanding | 34,739 | 34,388 |
Weighted average diluted common shares outstanding | 34,739 | 34,388 |
Basic and diluted loss attributable to common stockholders per common share | $ (0.38) | $ (0.49) |
Investments in and Advances t33
Investments in and Advances to Unconsolidated Joint Ventures - Additional Information (Detail) | Jun. 26, 2015USD ($) | Aug. 08, 2006USD ($) | Mar. 31, 2016USD ($)Hotel | Feb. 28, 2011OptionPlan | Apr. 30, 2010USD ($) | Apr. 30, 2008USD ($) | Jan. 31, 2012USD ($) | Mar. 31, 2016USD ($)Hotel | Mar. 31, 2015USD ($) | Dec. 31, 2015USD ($) | Mar. 06, 2015USD ($) | Jun. 30, 2007 |
Schedule of Equity Method Investments [Line Items] | ||||||||||||
Investments in and advances to unconsolidated joint ventures | $ 100,000 | $ 100,000 | $ 100,000 | |||||||||
Mondrian South Beach | Joint Venture | ||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||
Equity ownership | 50.00% | 50.00% | 50.00% | |||||||||
Proceeds of financing from lender and affiliates | $ 28,000,000 | |||||||||||
Extended maturity date of nonrecourse financing date | 2017-04 | |||||||||||
Outstanding nonrecourse mortgage loan and mezzanine loan | $ 28,000,000 | $ 28,000,000 | ||||||||||
Outstanding mezzanine debt owed to affiliates | $ 28,000,000 | $ 28,000,000 | ||||||||||
Number of hotel residences sold | Hotel | 276 | 276 | ||||||||||
Number of rented hotel residence | Hotel | 161 | 161 | ||||||||||
Number of hotel residences remain to be sold | Hotel | 59 | 59 | ||||||||||
Mondrian South Beach | Joint Venture | Mortgages | ||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||
Debt | $ 124,000,000 | |||||||||||
Outstanding nonrecourse mortgage loan and mezzanine loan | $ 18,700,000 | $ 18,700,000 | ||||||||||
Mondrian South Beach | Joint Venture | Mezzanine Loan | ||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||
Debt | $ 28,000,000 | |||||||||||
Debt Instrument, Interest Rate During Period | 4.26% | |||||||||||
Mondrian South Beach | Joint Venture | Libor Rate | ||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||
Basis spread on variable rate | 3.80% | |||||||||||
Mondrian South Beach | Joint Venture | Libor Rate | Mortgages | ||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||
Basis spread on variable rate | 3.00% | |||||||||||
Basis spread on variable rate paid | 1.50% | |||||||||||
Mondrian South Beach | Joint Venture | Libor Rate | Mezzanine Loan | ||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||
Basis spread on variable rate | 6.00% | |||||||||||
Mondrian South Beach | Joint Venture Partners | ||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||
Investments in and advances to unconsolidated joint ventures | 0 | $ 0 | ||||||||||
Seller financing to qualified condominium buyers, maximum condominium purchase price, percentage | 80.00% | |||||||||||
Non recourse financing extension period | 7 years | |||||||||||
Extended maturity date of nonrecourse financing date | 2017-04 | |||||||||||
Extended maturity date of nonrecourse financing options | 1 year | |||||||||||
Outstanding mezzanine debt owed to affiliates | $ 28,000,000 | $ 28,000,000 | ||||||||||
Mondrian South Beach | Joint Venture Partners | Mezzanine Loan | ||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||
Waterfall proceeds to joint venture mezzanine lender after repayment of mortgage debt | $ 5,500,000 | |||||||||||
Mondrian SoHo | ||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||
Investments in and advances to unconsolidated joint ventures | $ 0 | |||||||||||
Equity ownership | 20.00% | |||||||||||
Initial Management Contract Period | 10 years | |||||||||||
Number of extension option | OptionPlan | 2 | |||||||||||
Mondrian Istanbul | ||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||
Equity ownership | 20.00% | |||||||||||
Equity investment requirements and funds | $ 10,300,000 | |||||||||||
Impairment charge | $ 3,900,000 | |||||||||||
Payment received from joint venture for sale of equity | $ 6,500,000 |
Other Liabilities - Additional
Other Liabilities - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Dec. 31, 2015 | |
Other Liabilities [Line Items] | ||
Other liabilities | $ 13,866 | $ 13,866 |
Base fee due designer | 1.00% | |
Base fee payable for period from hotel opening | 10 years | |
Designer Fee Claim | ||
Other Liabilities [Line Items] | ||
Other liabilities | $ 13,900 | $ 13,900 |
Design Elements | ||
Other Liabilities [Line Items] | ||
Amortization expense over estimated life | 5 years |
Debt and Capital Lease Obliga35
Debt and Capital Lease Obligations (Detail) - USD ($) $ in Thousands | Feb. 09, 2016 | Mar. 31, 2016 | Dec. 31, 2015 |
Debt And Capital Lease Obligations [Line Items] | |||
Debt and capital lease obligations, Gross | $ 578,343 | ||
Unamortized debt issuance costs | (4,039) | ||
Debt and capital lease obligation, Net | 574,304 | $ 602,630 | |
Hudson/Delano 2014 Mortgage Loan | |||
Debt And Capital Lease Obligations [Line Items] | |||
Debt and capital lease obligations, Gross | 421,803 | ||
Unamortized debt issuance costs | (1,026) | ||
Debt and capital lease obligation, Net | $ 420,777 | ||
Interest rate | 5.94% | ||
Hudson/Delano 2014 Mortgage Loan | Libor Rate | |||
Debt And Capital Lease Obligations [Line Items] | |||
Basis spread on variable rate | 5.65% | 5.65% | |
Clift Debt | |||
Debt And Capital Lease Obligations [Line Items] | |||
Debt and capital lease obligations, Gross | $ 95,800 | ||
Unamortized debt issuance costs | (46) | ||
Debt and capital lease obligation, Net | $ 95,754 | ||
Interest rate | 9.60% | ||
Liability to Subsidiary Trust Issuing Preferred Securities | |||
Debt And Capital Lease Obligations [Line Items] | |||
Debt and capital lease obligations, Gross | $ 50,100 | ||
Unamortized debt issuance costs | (2,967) | ||
Debt and capital lease obligation, Net | $ 47,133 | ||
Interest rate | 8.68% | ||
Restaurant Lease Note | |||
Debt And Capital Lease Obligations [Line Items] | |||
Debt and capital lease obligations, Gross | $ 4,535 | ||
Debt and capital lease obligation, Net | 4,535 | ||
Capital Lease Obligations | |||
Debt And Capital Lease Obligations [Line Items] | |||
Debt and capital lease obligations, Gross | 6,105 | ||
Debt and capital lease obligation, Net | $ 6,105 |
Debt and Capital Lease Obliga36
Debt and Capital Lease Obligations (Parenthetical) (Detail) | Feb. 09, 2016USD ($) | Oct. 14, 2014USD ($) | Feb. 06, 2014USD ($)Extension | Aug. 04, 2006USD ($) | Aug. 31, 2012USD ($)Restaurant | Oct. 31, 2004USD ($) | Mar. 31, 2016USD ($)Condominium | Feb. 29, 2016USD ($)Derivative | Dec. 31, 2015USD ($) |
Hudson Lease 1 and Lease 2 | |||||||||
Debt And Capital Lease Obligations [Line Items] | |||||||||
Number of Condominium Unit Leased | Condominium | 2 | ||||||||
Capital lease obligation | $ 6,100,000 | $ 6,100,000 | |||||||
Hudson Lease 1 | |||||||||
Debt And Capital Lease Obligations [Line Items] | |||||||||
Annual minimum lease payments | $ 649,728 | ||||||||
Lease expiration date | 2096-11 | ||||||||
Date after which company could purchase leased asset at fair market value | 2015-11 | ||||||||
Interest rate | 8.00% | ||||||||
Hudson Lease Lease 2 | |||||||||
Debt And Capital Lease Obligations [Line Items] | |||||||||
Annual minimum lease payments | $ 365,490 | ||||||||
Lease expiration date | 2098-12 | ||||||||
Interest rate | 8.00% | ||||||||
Delano Las Vegas | |||||||||
Debt And Capital Lease Obligations [Line Items] | |||||||||
Company acquired the leasehold interest in number of food and beverage venues | Restaurant | 3 | ||||||||
Cash payment to acquire leasehold interests | $ 15,000,000 | ||||||||
Mezzanine Loan Hudson/Delano 2014 Mortgage Loan | |||||||||
Debt And Capital Lease Obligations [Line Items] | |||||||||
Debt instrument, face value | $ 150,000,000 | ||||||||
Hudson/Delano 2014 Mortgage Loan | |||||||||
Debt And Capital Lease Obligations [Line Items] | |||||||||
Debt instrument, face value | $ 450,000,000 | ||||||||
Hudson/Delano 2014 Mortgage Loan matures | Feb. 9, 2016 | ||||||||
Repayment of mortgage loan | $ 28,200,000 | ||||||||
Due date of debt | Feb. 9, 2017 | ||||||||
Number of extension options | Extension | 2 | ||||||||
Maturity period extension | 1 year | ||||||||
Extended Hudson/Delano 2014 Mortgage Loan maturity date | Feb. 9, 2019 | ||||||||
Requirement for Second and Third Extension in Maturity Date | 0.25% | ||||||||
Estimated prepayment of outstanding debt by February 9, 2017 | $ 50,000,000 | ||||||||
Estimated payment of extension fee to extend the maturity date of debt outstanding to February 9, 2018 | $ 1,000,000 | ||||||||
Interest rate | 5.94% | ||||||||
Hudson/Delano 2014 Mortgage Loan | Libor Rate | |||||||||
Debt And Capital Lease Obligations [Line Items] | |||||||||
Variable rate basis | 30-day LIBOR | ||||||||
Basis spread on variable rate | 5.65% | 5.65% | |||||||
Debt principle amount | $ 450,000,000 | $ 421,800,000 | |||||||
LIBOR cap rate | 1.75% | 0.29% | |||||||
Number of interest rate caps purchased | Derivative | 3 | ||||||||
Hudson/Delano 2014 Mortgage Loan | Extension Until February 9, 2018 | Minimum | |||||||||
Debt And Capital Lease Obligations [Line Items] | |||||||||
Debt yield for first extension | 7.75% | ||||||||
Hudson/Delano 2014 Mortgage Loan | Extension Until February 9, 2019 | Minimum | |||||||||
Debt And Capital Lease Obligations [Line Items] | |||||||||
Debt yield for second extension | 8.00% | ||||||||
Nonrecourse Mortgage Notes Hudson/Delano 2014 Mortgage Loan | |||||||||
Debt And Capital Lease Obligations [Line Items] | |||||||||
Debt instrument, face value | $ 300,000,000 | ||||||||
Clift Debt | |||||||||
Debt And Capital Lease Obligations [Line Items] | |||||||||
Sale of subsidiary company | $ 71,000,000 | ||||||||
Capital lease annual base rent | 99-year lease term | ||||||||
Capital leased payment require | $ 6,000,000 | $ 7,600,000 | |||||||
Increase in rent in future period | 5 years | ||||||||
Morgans Group agreed to guarantee losses | $ 6,000,000 | ||||||||
Interest rate | 9.60% | ||||||||
Clift Debt | Minimum | |||||||||
Debt And Capital Lease Obligations [Line Items] | |||||||||
Increase in base rent, percentage at each five-year rent increase date | 10.00% | ||||||||
Clift Debt | Maximum | |||||||||
Debt And Capital Lease Obligations [Line Items] | |||||||||
Increase in base rent, percentage at each five-year rent increase date | 20.00% | ||||||||
Liability to Subsidiary Trust Issuing Preferred Securities | |||||||||
Debt And Capital Lease Obligations [Line Items] | |||||||||
Due date of debt | Oct. 30, 2036 | ||||||||
Preferred securities issued | $ 50,000,000 | ||||||||
Amount of common stock owned by the company through trust | $ 100,000 | ||||||||
Interest rate | 8.68% | ||||||||
Liability to Subsidiary Trust Issuing Preferred Securities | Trust Preferred Notes | |||||||||
Debt And Capital Lease Obligations [Line Items] | |||||||||
Proceeds used to purchase of junior subordinated notes issued | $ 50,100,000 | ||||||||
Liability to Subsidiary Trust Issuing Preferred Securities | Trust Preferred Notes and Trust Preferred Securities | |||||||||
Debt And Capital Lease Obligations [Line Items] | |||||||||
Interest rate | 8.68% | ||||||||
Expiration date of fixed rate interest | 2016-10 | ||||||||
Liability to Subsidiary Trust Issuing Preferred Securities | Libor Rate | After October 2016 | Trust Preferred Notes and Trust Preferred Securities | |||||||||
Debt And Capital Lease Obligations [Line Items] | |||||||||
Variable rate basis | three-month LIBOR rate | ||||||||
Basis spread on variable rate | 3.25% | ||||||||
Restaurant Lease Note | Delano Las Vegas | |||||||||
Debt And Capital Lease Obligations [Line Items] | |||||||||
Debt instrument, face value | $ 10,600,000 | ||||||||
Restaurant lease note term | 7 years | ||||||||
Fair value of restaurant lease note | $ 7,500,000 | ||||||||
Debt Instrument Carrying Amount | $ 4,500,000 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) - USD ($) | Jan. 28, 2016 | Aug. 05, 2013 | Mar. 31, 2016 | Mar. 31, 2016 |
T L G Promissory Note | ||||
Commitments and Contingencies [Line Items] | ||||
Claim of defaulted loans | $ 18,000,000 | |||
Mr. Sasson | T L G Promissory Note | ||||
Commitments and Contingencies [Line Items] | ||||
Claim of defaulted loans | 16,000,000 | |||
Mr. Masi | T L G Promissory Note | ||||
Commitments and Contingencies [Line Items] | ||||
Claim of defaulted loans | $ 2,000,000 | |||
Messrs. Sasson and Masi | T L G Promissory Note | ||||
Commitments and Contingencies [Line Items] | ||||
Claim of defaulted loans | $ 2,800,000 | |||
Estimated attorneys fees | 1,000,000 | $ 1,000,000 | ||
Royalton and Morgans | ||||
Commitments and Contingencies [Line Items] | ||||
Accrued expenses and reduction to management fees | 200,000 | 200,000 | ||
Management agreement termination period | 30 days | |||
Agreement termination fee | $ 3,500,000 | |||
Joint Venture | Mondrian South Beach | ||||
Commitments and Contingencies [Line Items] | ||||
Purchase of condominium units by the Company and its Affiliates | $ 14,000,000 | |||
Condominium units sales price description | The joint venture partners are each obligated to purchase selected condominium units, at agreed-upon sales prices, having aggregate sales prices equal to 1/2 of the lesser of $28.0 million, which is the face amount outstanding on the lender's mezzanine loan, or the then outstanding principal balance of the lender's mezzanine loan. | |||
Outstanding mezzanine debt owed to affiliates | 28,000,000 | $ 28,000,000 | ||
Delano Marrakech | ||||
Commitments and Contingencies [Line Items] | ||||
Funding obligations under cash flow guarantees | $ 5,000,000 | $ 5,000,000 |
License or Franchise Agreements
License or Franchise Agreements for New Hotels Which are in Development Stage (Detail) | 3 Months Ended |
Mar. 31, 2016Room | |
Mondrian Doha | |
Development Hotel Agreements [Line Items] | |
Expected Room Count | 270 |
Anticipated Opening | 2,016 |
Initial Term | 30 years |
Delano Dubai | |
Development Hotel Agreements [Line Items] | |
Expected Room Count | 110 |
Anticipated Opening | 2,017 |
Initial Term | 20 years |
Mondrian Dubai | |
Development Hotel Agreements [Line Items] | |
Expected Room Count | 235 |
Initial Term | 15 years |
Delano Aegean Sea | |
Development Hotel Agreements [Line Items] | |
Expected Room Count | 150 |
Initial Term | 20 years |
Delano Cartagena | |
Development Hotel Agreements [Line Items] | |
Expected Room Count | 211 |
Initial Term | 20 years |
Omnibus Stock Incentive Plan -
Omnibus Stock Incentive Plan - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock compensation expense | $ 115 | $ 344 | |
Unrecognized compensation costs | $ 200 | $ 700 | |
Weighted-average period over unrecognized compensation expense | 10 months 24 days | ||
Stock Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Common stock reserved and authorized | 14,610,000 | ||
Reduction in shares available for grant due to each award other than options and stock appreciation rights | 170.00% |
Summary of Stock-based Incentiv
Summary of Stock-based Incentive Awards (Detail) | 3 Months Ended |
Mar. 31, 2016shares | |
Restricted Stock Units | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Outstanding, Beginning Balance | 220,799 |
Distributed/exercised | (41,621) |
Forfeited or cancelled | (51,408) |
Outstanding, Ending Balance | 127,770 |
LTIP Units | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Outstanding, Beginning Balance | 913,423 |
Granted | 0 |
Forfeited or cancelled | 0 |
Outstanding, Ending Balance | 913,423 |
Vested | 913,423 |
Stock Options | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Outstanding, Beginning Balance | 248,315 |
Granted | 0 |
Distributed/exercised | 0 |
Forfeited or cancelled | (40,300) |
Outstanding, Ending Balance | 208,015 |
Vested | 208,015 |
Preferred Securities and Warr41
Preferred Securities and Warrants - Additional Information (Detail) $ / shares in Units, $ in Millions | Oct. 15, 2009USD ($)Person$ / sharesshares | Mar. 31, 2016USD ($)$ / sharesshares | Dec. 31, 2015$ / shares |
Preferred Securities And Warrants [Line Items] | |||
Preferred stock, liquidation preference per share | $ / shares | $ 1,000 | $ 1,000 | |
Series A Preferred Stock | |||
Preferred Securities And Warrants [Line Items] | |||
Preferred stock issued, share | shares | 75,000 | ||
Preferred stock issued, value | $ 75 | ||
Preferred stock, liquidation preference per share | $ / shares | $ 1,000 | ||
Preferred stock Series A dividend rate through October 15, 2014 | 8.00% | ||
Preferred stock Series A dividend rate until October 15, 2016 | 10.00% | ||
Preferred stock Series A dividend rate after October 15, 2016 | 20.00% | ||
Undeclared and unpaid dividends | $ 58.9 | ||
Investors dividend rate on the Series A Preferred Securities increases | 4.00% | ||
Cumulative accretion | 24.2 | ||
Value of preferred securities | $ 72.2 | ||
Yucaipa Warrants | |||
Preferred Securities And Warrants [Line Items] | |||
Number of warrants issued | shares | 12,500,000 | 12,500,000 | |
Exercise price of warrants or rights | $ / shares | $ 6 | $ 6 | |
Term of warrants | 7 years 6 months | ||
Warrant, expiration date | 2017-04 | ||
Investors collectively own or right to purchase through exercise of shares | shares | 875,000 | ||
Investors consent rights warrants | shares | 6,250,000 | 6,250,000 | |
Equity investment acquisition | $ 100 | ||
Change in size of board of directors, lower range | Person | 7 | ||
Change in size of board of directors, upper range | Person | 9 | ||
Beneficial ownership interest in which investors are subject to certain standstill arrangements | 15.00% | ||
Yucaipa Warrants | Series A Preferred Stock | |||
Preferred Securities And Warrants [Line Items] | |||
Investors dividend rate | 10.00% |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | |
Related Party Transactions [Abstract] | |||
Management fees | $ 0.6 | $ 1.1 | |
Related party receivables | $ 0.4 | $ 0.4 |
Restructuring and Development C
Restructuring and Development Costs (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Other Income And Expenses [Abstract] | ||
Restructuring costs | $ 579 | $ 295 |
Severance costs | 5 | 1,660 |
Development costs | 110 | 148 |
Other | 5 | (6) |
Total | $ 699 | $ 2,097 |
Other Non-Operating Expenses (D
Other Non-Operating Expenses (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Other Income And Expenses [Abstract] | ||
Litigation costs | $ 434 | $ 1,282 |
Other | 109 | 373 |
Other non-operating expenses | $ 543 | $ 1,655 |
Deferred Gain on Asset Sales -
Deferred Gain on Asset Sales - Additional Information (Detail) - USD ($) $ in Thousands | Jan. 23, 2015 | Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | Dec. 31, 2011 |
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items] | |||||
Deferred gain on asset sales | $ 115,373 | $ 117,378 | |||
Amortization of deferred gain on asset sales | $ 2,005 | $ 2,005 | |||
The Light Group | Hakkasan Holdings LLC | |||||
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items] | |||||
Proceeds from Equity Sale | $ 32,800 | ||||
Gain on sale of equity investments | $ 1,800 | ||||
Joint Venture Equity Interests in Sanderson and St. Martin's Lane. | |||||
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items] | |||||
Equity ownership | 50.00% | ||||
Royalton, Morgans, Mondrian Los Angeles, and Equity Interests in Sanderson and St Martins Lane | |||||
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items] | |||||
Deferred gain on asset sales | $ 152,400 |
Subsequent Event - Additional I
Subsequent Event - Additional Information (Detail) - Subsequent Event - SBEEG Holdings LLC $ / shares in Units, $ in Millions | May. 09, 2016USD ($)$ / shares |
Subsequent Event [Line Items] | |
Percentage of voting shares represented in signed agreements | 29.00% |
Common Stock | |
Subsequent Event [Line Items] | |
Common stock, price per share | $ / shares | $ 2.25 |
Series A Preferred Stock | |
Subsequent Event [Line Items] | |
Business acquisition, equity interest issued or issuable, value assigned | $ 75 |
Warrants | |
Subsequent Event [Line Items] | |
Business acquisition, equity interest issued or issuable, value assigned | $ 75 |