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Announces Amendment of Bank Credit Facility and Suspension of Preferred
Dividend
CHICAGO, Feb. 26 /PRNewswire-FirstCall/ -- Strategic Hotels & Resorts
(NYSE: BEE) today reported results for the fourth quarter and year ended
December 31, 2008.
Fourth Quarter Recap
- Comparable funds from operations (Comparable FFO) totaled $0.17 per
diluted share compared with $0.43 per diluted share from the prior
year.
- Quarterly Comparable EBITDA was $48.7 million compared with $68.6
million in the prior year.
- North American total revenue per available room (Total RevPAR)
decreased 13.0 percent and revenue per available room (RevPAR)
decreased 13.3 percent driven by a 7.7 percentage point decrease in
occupancy and a 3.2 percent decrease in average daily rate (ADR).
Non-rooms revenue declined by 12.3 percent.
- European Same Store Total RevPAR decreased 19.4 percent (10.7 percent
in constant dollars) and RevPAR decreased 22.3 percent (8.9 percent in
constant dollars).
- North American gross operating profit (GOP) and EBITDA margins
contracted 440 basis points. North American EBITDA per room declined
27.2 percent.
- Residential activity contributed $1.1 million in EBITDA, or $0.02 FFO
per diluted share, during the quarter compared with $2.3 million in
EBITDA, or $0.02 FFO per diluted share, in the prior period.
Full Year 2008 Recap
- Comparable FFO was $1.27 per diluted share compared with $1.64 per
diluted share from the prior year.
- Comparable EBITDA was $234.2 million compared with $273.7 million in
the prior year.
- North American Total RevPAR and RevPAR decreased 3.5 percent driven by
a 4.2 percentage point decrease in occupancy and a 2.1 percent
increase in ADR. Non-rooms revenue declined by 3.1 percent.
- European Same Store Total RevPAR decreased 1.2 percent (6.4 percent in
constant dollars) and RevPAR decreased 0.7 percent (5.0 percent in
constant dollars).
- North American GOP and EBITDA margins contracted 160 basis points.
North American EBITDA per room declined 9.0 percent.
- Residential activity contributed $1.9 million in EBITDA, or $0.02 FFO
per diluted share, during 2008 compared with $14.4 million, or $0.10
FFO per diluted share, in the prior year.
Chief Executive Officer Laurence Geller remarked, "As we feel the full
force of the current recession on our operating results, our management team
continues to be focused on executing strategies to contain operating costs
both at the hotels and the corporate office, cutting or eliminating
discretionary capital programs and seeking revenue strategies to outperform
the luxury set that has been most affected. Through the end of the year, we
reduced the work force at our hotels by 15% in salaried and hourly positions,
27% at our corporate office, have virtually eliminated all capital programs
over necessary FF&E spending and our top line is consistently outperforming
the Smith Travel Research luxury results. In addition, we were able to amend
our corporate line of credit to provide substantial contingency for the
uncertainties that continue to lie ahead."
Financial Results
The company reported fourth quarter 2008 financial results as follows:
- Net loss available to common shareholders was $284.1 million, or $3.78
per diluted share, for the fourth quarter of 2008, compared with net
income available to common shareholders of $5.4 million, or $0.07 per
diluted share, for the fourth quarter of 2007.
- Adjusted EBITDA was a loss of $221.0 million compared with income of
$69.4 million for the fourth quarter of 2007. Comparable EBITDA was
$48.7 million compared with $68.6 million in the fourth quarter of
2007. Residential sales contributed $1.1 million to fourth quarter
results compared with $2.3 million in the prior period.
- FFO was a loss of $252.6 million, or $3.32 per diluted share, compared
with income of $32.0 million or $0.42 per diluted share in the fourth
quarter of 2007. Comparable FFO was $12.9 million, or $0.17 per
diluted share, compared with $32.9 million, or $0.43 per diluted
share, in the fourth quarter of 2007. Residential sales contributed
$1.2 million, or $0.02 per diluted share, to fourth quarter results
compared with $1.4 million, or $0.02 per diluted share, in the prior
period.
The company reported full year 2008 financial results as follows:
- Net loss available to common shareholders was $344.3 million, or $4.58
per diluted share, compared with net income available to common
shareholders of $39.1 million, or $0.52 per diluted share, in the
prior year period.
- Adjusted EBITDA was a loss of $88.7 million compared with income of
$295.5 million in 2007. Comparable EBITDA was $234.2 million compared
with $273.7 million in the prior period. Residential sales for the
year contributed $1.9 million compared with $14.4 million in the prior
year.
- FFO was a loss of $262.8 million, or $3.45 per diluted share, compared
with income of $59.6 million, or $0.78 per diluted share, in the prior
year period. Comparable FFO for the year was $97.0 million, or $1.27
per diluted share, compared with $124.8 million, or $1.64 per diluted
share, in the prior period. Residential sales for the year
contributed $1.7 million, or $0.02 per diluted share, compared with
$7.6 million, or $0.10 per diluted share, in 2007.
Impairment Losses and Other Charges
In accordance with SFAS No. 142, "Goodwill and Other Intangible Assets",
the company performed testing for impairment of goodwill and indefinite-lived
intangible assets. As a result of an assessment of the conditions that have
contributed to the company's reduced market capitalization relative to the
book value of equity, including generally weak economic conditions,
macroeconomic factors impacting industry business conditions, recent and
forecasted operating performance, and continued tightening of the credit
markets, along with other factors, management determined that an impairment
charge for the fourth quarter was required.
The fourth quarter 2008 results include impairment of goodwill and other
charges totaling $265.1 million. For the full year 2008, results include
impairment losses and other charges totaling $361.8 million, including
impairment of goodwill and other intangible assets of $318.1 million, a $35.7
million charge related to the company's decision not to proceed with its
contracted purchase of hotel development space at the Aqua building in Chicago
and a write-off of $8.0 million in other project costs.
These one-time charges have been excluded from Comparable EBITDA, FFO and
FFO per share metrics.
Bank Credit Facility Amendment
Yesterday, the company completed an amendment to its bank credit facility
which amended certain terms and covenants in order to provide protection
against the deteriorating operating environment. The amended terms include a
reduction in total facility size to $400.0 million, an increase in pricing to
LIBOR plus 375 basis points and security interests in five previously
unsecured hotel properties. In return, the company negotiated a reduction of
the minimum corporate fixed charge coverage ratio to 0.9 times and an increase
in maximum corporate leverage to 80%. The maturity date of the facility
remains unchanged with an initial maturity in March 2011 and a one year
extension option available upon achieving certain specified performance
criteria.
Chief Executive Officer Laurence Geller commented "Given that we cannot be
certain as to the depth and length of the current economic environment, we had
to consider the necessity of substantially increasing the liquidity
contingency available to the company. As such, our amended credit facility
was strengthened to give us that added contingency."
Quarterly Distribution
The Board of Directors previously declared on December 11, 2008 a
quarterly dividend to shareholders of record on December 19, 2008 of $0.53125
per share of 8.50 percent Series A Cumulative Redeemable Preferred Stock,
$0.51563 per share of 8.25 percent Series B Cumulative Redeemable Preferred
Stock, and $0.51563 per share of 8.25 percent Series C Cumulative Redeemable
Preferred Stock. The preferred stock dividends were paid on December 31,
2008.
The Board of Directors elected to suspend the quarterly dividend to
holders of Series A, B and C Cumulative Redeemable Preferred Stock to preserve
liquidity due to the declining economic environment for hotel operations and
no projected taxable distribution requirement. Elimination of preferred
dividends equates to approximately $7.7 million in cash flow savings per
quarter.
The company had previously announced the Board of Directors elected to
suspend dividends on common stock beginning in the fourth quarter of 2008,
which is estimated to save approximately $90 million through the end of 2009.
2009 Guidance
The company is not providing guidance for 2009 at this time as the current
market environment provides insufficient visibility into future operating
performance. Certain items should however be considered in 2009 including:
- Interest expense of approximately $100.0 million including
amortization of deferred financing costs and the inclusion of
approximately $3.8 million related to the amortization of the loan
discount on $180 million of exchangeable notes, and discontinued
capitalization of interest on land held for development, which
increases expensed interest by approximately $6.0 million;
- Corporate expenses of $23.0 million to $24.0 million including $4.7
million in non-cash expense related to equity based compensation
awarded in prior years; and
- Accrual of unpaid preferred dividends will reduce income available to
common shareholders and Comparable FFO by approximately $7.7 million
per quarter.
Earnings Call
The company will conduct its fourth quarter 2008 conference call for
investors and other interested parties on February 27, 2009 at 11:00 a.m.
Eastern Time (ET). Interested individuals are invited to listen to the call
by telephone at 888-713-4214 (toll international: 617-213-4866) with pass code
11119224. To participate on the web cast, log on to
http://www.strategichotels.com or
https://www.theconferencingservice.com/prereg/key.process?key=PGB4JXVEX 15
minutes before the call to download the necessary software. For those unable
to listen to the call live, a taped rebroadcast will be available beginning at
2:00 p.m. ET on February 27, 2009, through 11:59 p.m. ET on March 6, 2009. To
access the replay, dial 888-286-8010 (toll international: 617-801-6888) and
request replay pin number 21287915. A replay of the call will also be
available on the Internet at http://www.strategichotels.com or
http://www.earnings.com for 30 days after the call.
The company also produces supplemental financial data that includes
detailed information regarding its operating results. This supplemental data
is considered an integral part of this earnings release. These materials are
available on the Strategic Hotels & Resorts website at www.strategichotels.com
within the fourth quarter information section.
Portfolio Definitions
North American hotel comparisons for the fourth quarter 2008 are derived
from the company's hotel portfolio at December 31, 2008, consisting of
properties in which operations are included in the consolidated results of the
company.
European Same Store hotel comparisons for the fourth quarter 2008 are
derived from the company's European owned and leased hotel properties at
December 31, 2008, consisting of the Marriott London Grosvenor Square, the
Paris Marriott Champs-Elysees, the Marriott Hamburg, the InterContinental
Prague and the Renaissance Paris Hotel Le Parc Trocadero.
European Same Store hotel comparisons for the twelve month period are
derived from the company's European owned and leased hotel properties at
December 31, 2008, consisting of the Marriott London Grosvenor Square, the
Paris Marriott Champs-Elysees, the Marriott Hamburg, and the InterContinental
Prague but excluding the Renaissance Paris Hotel Le Parc Trocadero, which was
acquired during the third quarter of 2007.
About the Company
Strategic Hotels & Resorts, Inc. is a real estate investment trust (REIT)
which owns and provides value-enhancing asset management of high-end hotels
and resorts in the United States, Mexico and Europe. The company currently has
ownership interests in 19 properties with an aggregate of 8,347 rooms. For a
list of current properties and for further information, please visit the
company's website at http://www.strategichotels.com.
This press release contains forward-looking statements about Strategic
Hotels & Resorts (the "Company"). Except for historical information, the
matters discussed in this press release are forward-looking statements subject
to certain risks and uncertainties. Actual results could differ materially
from the Company's projections. Factors that may contribute to these
differences include, but are not limited to the following: demand for hotel
rooms in our current and proposed market areas; availability of capital;
ability to obtain or refinance debt or comply with covenants contained in our
debt facilities; rising interest rates and operating costs; rising insurance
premiums; cash available for capital expenditures; competition; economic
conditions generally and in the real estate market specifically, including
further deterioration of the current global economic downturn and the extent
of its effect on business and leisure travel and the lodging industry; ability
to dispose of existing properties in a manner consistent with our disposition
strategy; delays and cost overruns in construction and development; demand for
hotel condominiums; marketing challenges associated with entering new lines of
business; risks related to natural disasters; the effect of threats of
terrorism and increased security precautions on travel patterns and hotel
bookings; the outbreak of hostilities and international political instability;
legislative or regulatory changes, including changes to laws governing the
taxation of REITs; and changes in generally accepted accounting principles,
policies and guidelines applicable to REITs.
Additional risks are discussed in the Company's filings with the
Securities and Exchange Commission, including those appearing under the
heading "Item 1A. Risk Factors" in the Company's most recent Form 10-K and
subsequent Form 10-Qs. Although the Company believes the expectations
reflected in such forward-looking statements are based on reasonable
assumptions, it can give no assurance that its expectations will be attained.
The forward-looking statements are made as of the date of this press release,
and we undertake no obligation to publicly update or revise any
forward-looking statement, whether as a result of new information, future
events or otherwise.
Consolidated Statements of Operations
(in thousands, except per share data)
Three Months Ended Years Ended
December 31, December 31,
-------------- --------------
2008 2007 2008 2007
---- ---- ---- ----
Revenues:
Rooms $117,533 $129,110 $534,342 $507,686
Food and beverage 80,746 93,272 324,829 327,701
Other hotel operating revenue 28,962 30,022 110,364 108,760
------ ------ ------- -------
227,241 252,404 969,535 944,147
Lease revenue 1,170 6,076 5,387 23,405
----- ----- ----- ------
Total revenues 228,411 258,480 974,922 967,552
------- ------- ------- -------
Operating Costs and Expenses:
Rooms 30,662 31,962 133,299 125,313
Food and beverage 54,925 60,970 225,884 222,016
Other departmental expenses 62,072 63,496 250,772 238,813
Management fees 7,758 9,398 38,265 37,131
Other hotel expenses 15,443 17,352 60,739 65,301
Lease expense 3,926 4,048 17,489 15,700
Depreciation and amortization 32,310 26,997 122,466 103,253
Impairment losses and other
charges 265,141 14 361,820 7,372
Corporate expenses 5,472 9,109 27,009 30,179
----- ----- ------ ------
Total operating costs and
expenses 477,709 223,346 1,237,743 845,078
------- ------- --------- -------
Operating (loss) income (249,298) 35,134 (262,821) 122,474
Interest expense (20,872) (23,889) (85,578) (87,246)
Interest income 317 882 1,814 2,715
Loss on early extinguishment
of debt - - - (7,845)
Equity in (losses) earnings
of joint ventures (360) 132 2,810 8,344
Foreign currency exchange loss (4,896) (156) (814) (3,701)
Other expenses, net (196) (716) (690) (201)
---- ---- ---- ----
(Loss) income before income taxes,
minority interests, distributions
in excess of minority interest
capital, (loss) gain on sale of
minority interests in hotel
properties and discontinued
operations (275,305) 11,387 (345,279) 34,540
Income tax expense (3,652) (39) (10,402) (9,479)
Minority interest in SHR's
operating partnership 3,578 (188) 4,631 (351)
Minority interest in
consolidated affiliates (983) (535) (3,870) (1,363)
Distributions in excess of
minority interest capital - - (2,499) -
--- --- ------ ---
(Loss) income before (loss) gain
on sale of minority interests
in hotel properties and
discontinued operations (276,362) 10,625 (357,419) 23,347
(Loss) gain on sale of
minority interests in hotel
properties - (134) (46) 84,658
--- ---- --- ------
(Loss) income from continuing
operations (276,362) 10,491 (357,465) 108,005
Income (loss) from
discontinued operations, net
of tax and minority interests 20 2,655 44,041 (38,847)
--- ----- ------ -------
Net (loss) income $(276,342) $13,146 $(313,424) $69,158
Preferred shareholder
dividends (7,722) (7,722) (30,886) (30,107)
------ ------ ------- -------
Net (loss) income available
to common shareholders $(284,064) $5,424 $(344,310) $39,051
========= ====== ========= =======
Basic (Loss) Income Per Share:
(Loss) income from continuing
operations available to
common shareholders per
share $(3.78) $0.04 $(5.17) $1.04
Income (loss) from
discontinued operations per
share - 0.03 0.59 (0.52)
--- ---- ---- -----
Net (loss) income available
to common shareholders per
share $(3.78) $0.07 $(4.58) $0.52
====== ===== ====== =====
Weighted average common
shares outstanding 75,146 74,803 75,140 75,075
====== ====== ====== ======
Diluted (Loss) Income Per Share:
(Loss) income from continuing
operations available to common
shareholders per share $(3.78) $0.04 $(5.17) $1.04
Income (loss) from
discontinued operations per
share - 0.03 0.59 (0.52)
--- ---- ---- -----
Net (loss) income available
to common shareholders per
share $(3.78) $0.07 $(4.58) $0.52
====== ===== ====== =====
Weighted average common
shares outstanding 75,146 75,001 75,140 75,324
====== ====== ====== ======
Consolidated Balance Sheets
(in thousands, except share data)
December 31,
2008 2007
---- ----
Assets
Investment in hotel properties, net $2,383,860 $2,427,273
Goodwill 120,329 462,536
Intangible assets, net of accumulated
amortization of $3,096 and $3,271 32,277 45,420
Investment in joint ventures 82,122 78,801
Cash and cash equivalents 80,954 111,494
Restricted cash and cash equivalents 37,358 39,161
Accounts receivable, net of allowance for
doubtful accounts of $2,203 and $1,965 70,945 82,217
Deferred financing costs, net of
accumulated amortization of $6,787
and $4,809 10,668 14,868
Deferred tax assets 38,260 41,790
Other assets 52,687 62,736
------ ------
Total assets $2,909,460 $3,366,296
========== ==========
Liabilities and Shareholders' Equity
Liabilities:
Mortgages and other debt payable $1,301,535 $1,363,855
Exchangeable senior notes, net of
discount 179,415 179,235
Bank credit facility 206,000 109,000
Accounts payable and accrued expenses 281,918 266,324
Distributions payable - 18,179
Deferred tax liabilities 34,236 36,407
Deferred gain on sale of hotels 104,251 114,292
------- -------
Total liabilities 2,107,355 2,087,292
Minority interests in SHR's operating
partnership 5,330 11,512
Minority interests in consolidated
affiliates 27,203 30,653
Shareholders' equity:
8.50% Series A Cumulative Redeemable
Preferred Stock ($0.01 par value;
4,488,750 shares issued and outstanding;
liquidation preference $25.00 per share) 108,206 108,206
8.25% Series B Cumulative Redeemable
Preferred Stock ($0.01 par value;
4,600,000 shares issued and outstanding;
liquidation preference $25.00 per share) 110,775 110,775
8.25% Series C Cumulative Redeemable
Preferred Stock ($0.01 par value;
5,750,000 shares issued and outstanding;
liquidation preference $25.00 per share) 138,940 138,940
Common shares ($0.01 par value;
150,000,000 common shares authorized;
74,410,012 and 74,371,230 common shares
issued and outstanding) 744 742
Additional paid-in capital 1,208,221 1,201,503
Accumulated deficit (703,677) (304,922)
Accumulated other comprehensive loss (93,637) (18,405)
------- -------
Total shareholders' equity 769,572 1,236,839
------- ---------
Total liabilities and shareholders'
equity $2,909,460 $3,366,296
========== ==========
FINANCIAL HIGHLIGHTS
Supplemental Financial Data
Three Months Ended
December 31, 2008
---------------------
Results vs. Previous Guidance Actual Guidance
----------------------------- ------ --------
North American Total RevPAR growth (13.0)% (15.0)% - (13.0)%
North American RevPAR growth (13.3)% (14.0)% - (12.0)%
Comparable EBITDA (in millions) $48.7 $ 41.9 - 47.9
Comparable FFO per diluted share $0.17 $ 0.11 - 0.19
Weighted average diluted
shares (in thousands) (a) 76,122
(in thousands, except per share information)
December 31, 2008
-----------------
Pro Rata Share Consolidated
-------------- ------------
Capitalization
--------------
Common shares outstanding 74,410 74,410
Operating partnership units
outstanding 976 976
Stock options outstanding 885 885
Restricted stock units outstanding 1,304 1,304
----- -----
Combined shares, options and units
outstanding 77,575 77,575
Common stock price at end of period $1.68 $1.68
----- -----
Common equity capitalization $130,326 $130,326
Preferred equity capitalization 370,236 370,236
Consolidated debt 1,686,950 1,686,950
Pro rata share of unconsolidated
debt 282,385 -
Pro rata share of consolidated debt (107,065) -
Cash and cash equivalents (80,954) (80,954)
------- -------
Total enterprise value $2,281,878 $2,106,558
========== ==========
Net Debt / Total Enterprise Value 78.1% 76.2%
Preferred Equity / Total Enterprise
Value 16.2% 17.6%
Common Equity / Total Enterprise Value 5.7% 6.2%
Dividends Per Share
-------------------
Common dividends declared (holders of record
on March 28, June 30 and September 30, 2008) $0.24
=====
Preferred Series A dividends declared (holders
of record on March 21, June 20, September 19
and December 19, 2008) $0.53125
========
Preferred Series B dividends declared (holders
of record on March 21, June 20, September 19
and December 19, 2008) $0.51563
========
Preferred Series C dividends declared (holders
of record on March 21, June 20, September 19
and December 19, 2008) $0.51563
========
(a) The calculation of weighted average diluted shares is consistent
with the guidance prescribed by the National Association of Real
Estate Investment Trusts.
Discontinued Operations
The results of operations of hotels sold are classified as discontinued
operations and segregated in the consolidated statements of operations for
all periods presented. On July 2, 2008, we sold the Hyatt Regency Phoenix
for net sales proceeds of $89.6 million. On December 28, 2007, we sold the
Hyatt Regency New Orleans for net sales proceeds of $28.0 million.
The following is a summary of income (loss) from discontinued operations
for the three months and years ended December 31, 2008 and 2007 (in
thousands):
Three Months Ended Years Ended
December 31, December 31,
2008 2007 2008 2007
---- ---- ---- ----
Hotel operating revenues $- $10,355 $24,275 $40,824
--- ------- ------- -------
Operating costs and expenses (221) 5,875 16,043 29,977
Depreciation and amortization - 686 1,151 2,838
Impairment losses - - - 37,716
--- --- --- ------
Total operating costs and expenses (221) 6,561 17,194 70,531
---- ----- ------ ------
Operating income (loss) 221 3,794 7,081 (29,707)
Interest expense - - - (2,483)
Interest income - 3 1 1,058
Loss on early extinguishment of debt - - - (7,294)
Other expenses, net - (119) (257) (383)
Income tax (expense) benefit (21) (968) 300 (524)
(Loss) gain on sale of assets (180) - 37,482 -
Minority interests - (55) (566) 486
--- --- ---- ---
Income (loss) from discontinued
operations $20 $2,655 $44,041 $(38,847)
=== ====== ======= ========
Investment in the Hotel del Coronado
(in thousands)
On January 9, 2006, we purchased a 45% interest in the joint venture that
owns the Hotel del Coronado. We account for this investment using the
equity method of accounting.
Three Months Ended Years Ended
December 31, December 31,
------------ ------------
2008 2007 2008 2007
---- ---- ---- ----
Total revenues (100%) $32,484 $33,409 $150,808 $141,404
Property EBITDA (100%) $11,148 $11,226 $56,846 $52,926
Equity in earnings of joint
venture (SHR 45% ownership)
Property EBITDA $5,017 $5,052 $25,581 $23,817
Depreciation and amortization (1,884) (1,707) (7,379) (6,844)
Gain (loss) on sale of assets - 3 - (239)
Interest expense (3,710) (5,225) (15,204) (20,943)
Other expense, net (1,240) (99) (1,378) (227)
Income taxes 108 175 (284) (545)
--- --- ---- ----
Equity in (losses) earnings of
joint venture $(1,709) $(1,801) $1,336 $(4,981)
======= ======= ====== =======
EBITDA Contribution from
investment in Hotel del Coronado
Equity in (losses) earnings of
joint venture $(1,709) $(1,801) $1,336 $(4,981)
Depreciation and amortization 1,884 1,707 7,379 6,844
Interest expense 3,710 5,225 15,204 20,943
Income taxes (108) (175) 284 545
---- ---- --- ---
EBITDA Contribution for
investment in Hotel del
Coronado $3,777 $4,956 $24,203 $23,351
====== ====== ======= =======
FFO Contribution from investment
in Hotel del Coronado
Equity in (losses) earnings of
joint venture $(1,709) $(1,801) $1,336 $(4,981)
Depreciation and amortization 1,884 1,707 7,379 6,844
----- ----- ----- -----
FFO Contribution for investment
in Hotel del Coronado $175 $(94) $8,715 $1,863
==== ==== ====== ======
Spread over
Debt Interest Rate LIBOR Loan Amount Maturity
---- ------------- ----- ----------- ---------
CMBS Mortgage and
Mezzanine 2.52% 208 bp $610,000 January 2011 (a)
Revolving Credit
Facility 2.94% 250 bp 17,523 January 2011 (a)
------
627,523
Cash and cash
equivalents 43,597
------
Net Debt $583,926
========
(a) Includes extension options.
Effective
Cap Date LIBOR Cap Rate Notional Amount Maturity
--- ---- -------------- --------------- --------
CMBS Mortgage
and Mezzanine
Loan and
Revolving
Credit
Facility Cap January 2006 5.5% $630,000 January 2009
CMBS Mortgage
and Mezzanine
Loan and
Revolving
Credit
Facility Cap January 2009 5.0% $630,000 January 2011
Summary of Residential Activity
(in thousands)
On January 9, 2006, we purchased a 45% interest in a joint venture that
owns the North Beach Venture development adjacent to the Hotel del
Coronado. We account for this investment using the equity method of
accounting. We own a 31% interest in a joint venture that is developing
the Four Seasons Residence Club Punta Mita (RCPM) adjacent to the Four
Seasons Punta Mita Resort. We account for this investment using the
equity method of accounting. In addition, we engage in certain
activities related to potential development projects such as
condominium-hotel units, fractional ownership units and other for-sale
residential units. During the third quarter of 2007, a potential
condominium-hotel project at the Fairmont Chicago was delayed
indefinitely due to market conditions. We recorded a charge of
$1.2 million related to the costs of this project.
Three Months Ended Years Ended
December 31, December 31,
-------------- --------------
North Beach Venture 2008 2007 2008 2007
---- ---- ---- ----
Hotel condominium sales (100%) $2,750 $15,405 $2,828 $110,212
Hotel condominium cost of sales
(100%) $(1,912) $(11,575) $(2,221) $(77,223)
SHR's 45% share
Hotel condominium sales $1,238 $6,932 $1,273 $49,595
Hotel condominium cost of sales (860) (5,209) (999) (34,750)
Other income, net 43 136 128 186
Income taxes 317 (775) 325 (6,475)
--- ---- --- ------
SHR's share of net income $738 $1,084 $727 $8,556
==== ====== ==== ======
Net income $738 $1,084 $727 $8,556
Income taxes (317) 775 (325) 6,475
---- --- ---- -----
EBITDA Contribution for investment
in North Beach Venture $421 $1,859 $402 $15,031
==== ====== ==== =======
---- ------ ---- ------
FFO Contribution for investment
in North Beach Venture $738 $1,084 $727 $8,556
==== ====== ==== ======
Three Months Ended Years Ended
December 31, December 31,
-------------- --------------
RCPM 2008 2007 2008 2007
---- ---- ---- ----
SHR's 31% share
Sales $1,602 $1,264 $4,914 $3,366
====== ====== ====== ======
EBITDA Contribution for
investment in RCPM $691 $455 $1,545 $528
==== ==== ====== ====
FFO Contribution for investment
in RCPM $460 $281 $987 $232
==== ==== ==== ====
Three Months Ended Years Ended
December 31, December 31,
-------------- --------------
2008 2007 2008 2007
---- ---- ---- ----
Other Residential Activity $- $- $- $(1,184)
SHR's share of total residential
activity:
Sales $2,840 $8,196 $6,187 $52,961
====== ====== ====== =======
EBITDA $1,112 $2,314 $1,947 $14,375
====== ====== ====== =======
FFO $1,198 $1,365 $1,714 $7,604
====== ====== ====== ======
Leasehold Information
(in thousands)
Three Months Ended Years Ended
December 31, December 31,
------------- -------------
2008 2007 2008 2007
---- ---- ---- ----
Paris Marriott Champs Elysees:
Property EBITDA $3,874 $4,250 $21,248 $18,679
Revenue (a) $3,874 $4,701 $21,248 $18,287
Lease Expense (2,831) (2,897) (12,536) (11,145)
Less: Deferred Gain on Sale Leaseback (1,091) (1,215) (4,933) (4,613)
------ ------ ------ ------
Adjusted Lease Expense (3,922) (4,112) (17,469) (15,758)
---- ---- ------ ------
EBITDA Contribution from Leasehold $(48) $589 $3,779 $2,529
==== ==== ====== ======
Marriott Hamburg:
Property EBITDA $1,406 $1,556 $6,247 $5,806
Revenue (a) $1,170 $1,375 $5,387 $5,118
Lease Expense (1,095) (1,151) (4,953) (4,555)
Less: Deferred Gain on Sale Leaseback (50) (104) (228) (234)
--- ---- ---- ----
Adjusted Lease Expense (1,145) (1,255) (5,181) (4,789)
--- ---- ---- ----
EBITDA Contribution from Leasehold $25 $120 $206 $329
=== ==== ==== ====
Total Leaseholds:
Property EBITDA $5,280 $5,806 $27,495 $24,485
Revenue (a) $5,044 $6,076 $26,635 $23,405
Lease Expense (3,926) (4,048) (17,489) (15,700)
Less: Deferred Gain on Sale Leaseback (1,141) (1,319) (5,161) (4,847)
------ ------ ------ ------
Adjusted Lease Expense (5,067) (5,367) (22,650) (20,547)
---- ---- ------ ------
EBITDA Contribution from Leasehold $(23) $709 $3,985 $2,858
==== ==== ====== ======
December 31,
------------
Security Deposits (b): 2008 2007
---- ----
Paris Marriott Champs Elysees $15,507 $14,509
Marriott Hamburg 6,984 7,299
----- -----
Total $22,491 $21,808
======= =======
(a) Effective January 1, 2008, the operating results for the Paris
Marriott Champs Elysees were consolidated in our financial statements.
For the three months and year ended December 31, 2008, Revenue for the
Paris Marriott Champs Elysees represents Property EBITDA. For the three
months and year ended December 31, 2007, Revenue for the Paris Marriott
Champs Elysees represents lease revenue. For the three months and years
ended December 31, 2008 and 2007, Revenue for the Marriott Hamburg
represents lease revenue.
(b) The security deposits are recorded in other assets on the consolidated
balance sheets.
Non-GAAP Financial Measures
In addition to REIT hotel income, six other non-GAAP financial measures
are presented for the Company that we believe are useful to management
and investors as key measures of our operating performance: Funds from
Operations (FFO); FFO - Fully Diluted; Comparable FFO; Earnings Before
Interest Expense, Taxes, Depreciation and Amortization (EBITDA); Adjusted
EBITDA; and Comparable EBITDA. A reconciliation of these measures to net
income (loss) available to common shareholders, the most directly
comparable GAAP measure, is set forth in the following tables.
We compute FFO in accordance with standards established by the National
Association of Real Estate Investment Trusts, or NAREIT, which adopted a
definition of FFO in order to promote an industry-wide standard measure
of REIT operating performance. NAREIT defines FFO as net income (or loss)
(computed in accordance with GAAP) excluding losses or gains from sales
of depreciable property plus real estate-related depreciation and
amortization, and after adjustments for our portion of these items
related to unconsolidated partnerships and joint ventures. We also
present FFO - Fully Diluted, which is FFO plus minority interest expense
on convertible minority interests. We also present Comparable FFO, which
is FFO - Fully Diluted excluding the impact of any gains or losses on
early extinguishment of debt, impairment losses, foreign currency
exchange gains or losses and other non-recurring charges. We believe that
the presentation of FFO, FFO - Fully Diluted and Comparable FFO provides
useful information to management and investors regarding our results of
operations because they are measures of our ability to fund capital
expenditures and expand our business. In addition, FFO is widely used in
the real estate industry to measure operating performance without regard
to items such as depreciation and amortization. We also present
Comparable FFO per diluted share as a non-GAAP measure of our
performance. We calculate Comparable FFO per diluted share for a given
operating period as our Comparable FFO (as defined above) divided by the
weighted average of fully diluted shares outstanding. Comparable FFO per
diluted share, in accordance with NAREIT, is adjusted for the effects of
dilutive securities. Dilutive securities may include shares granted
under share-based compensation plans, operating partnership units and
exchangeable debt securities. No effect is shown for securities that are
anti-dilutive.
EBITDA represents net income (loss) available to common shareholders
excluding: (i) interest expense, (ii) income tax expense, including
deferred income tax benefits and expenses applicable to our foreign
subsidiaries and income taxes applicable to sale of assets; and (iii)
depreciation and amortization. EBITDA also excludes interest expense,
income tax expense and depreciation and amortization of our equity method
investments. EBITDA is presented on a full participation basis, which
means we have assumed conversion of all convertible minority interests of
our operating partnership into our common stock and includes preferred
dividends. We believe this treatment of minority interest provides more
useful information for management and our investors and appropriately
considers our current capital structure. We also present Adjusted
EBITDA, which eliminates the effect of realizing deferred gains on our
sale leasebacks. We also present Comparable EBITDA, which eliminates the
effect of gains or losses on sales of assets, early extinguishment of
debt, impairment losses, foreign currency exchange gains or losses and
other non-recurring charges. We believe EBITDA, Adjusted EBITDA and
Comparable EBITDA are useful to management and investors in evaluating
our operating performance because they provide management and investors
with an indication of our ability to incur and service debt, to satisfy
general operating expenses, to make capital expenditures and to fund
other cash needs or reinvest cash into our business. We also believe they
help management and investors meaningfully evaluate and compare the
results of our operations from period to period by removing the impact of
our asset base (primarily depreciation and amortization) from our
operating results. Our management also uses EBITDA, Adjusted EBITDA and
Comparable EBITDA as measures in determining the value of acquisitions
and dispositions.
We caution investors that amounts presented in accordance with our
definitions of FFO, FFO - Fully Diluted, Comparable FFO, EBITDA, Adjusted
EBITDA and Comparable EBITDA may not be comparable to similar measures
disclosed by other companies, since not all companies calculate these
non-GAAP measures in the same manner. FFO, FFO - Fully Diluted,
Comparable FFO, EBITDA, Adjusted EBITDA and Comparable EBITDA should not
be considered as an alternative measure of our net income or operating
performance. FFO, FFO - Fully Diluted, Comparable FFO, EBITDA, Adjusted
EBITDA and Comparable EBITDA may include funds that may not be available
for our discretionary use due to functional requirements to conserve
funds for capital expenditures and property acquisitions and other
commitments and uncertainties. Although we believe that FFO, FFO - Fully
Diluted, Comparable FFO, EBITDA, Adjusted EBITDA and Comparable EBITDA
can enhance your understanding of our financial condition and results of
operations, these non-GAAP financial measures, when viewed individually,
are not necessarily a better indicator of any trend as compared to
comparable GAAP measures such as net income (loss) available to common
shareholders. In addition, you should be aware that adverse economic and
market conditions might negatively impact our cash flow. Below, we have
provided a quantitative reconciliation of FFO, FFO - Fully Diluted,
Comparable FFO, EBITDA, Adjusted EBITDA and Comparable EBITDA to the most
directly comparable GAAP financial performance measure, which is net
income (loss) available to common shareholders, and provide an
explanatory description by footnote of the items excluded from FFO, FFO -
Fully Diluted, EBITDA and Adjusted EBITDA.
Reconciliation of Net (Loss) Income Available to Common Shareholders
to EBITDA, Adjusted EBITDA and Comparable EBITDA
(in thousands)
Three Months Ended Years Ended
December 31, December 31,
------------- --------------
2008 2007 2008 2007
---- ---- ---- ----
Net (loss) income available
to common shareholders $(284,064) $5,424 $(344,310) $39,051
Depreciation and amortization
- continuing operations 32,310 26,997 122,466 103,253
Depreciation and amortization
- discontinued operations - 686 1,151 2,838
Interest expense - continuing
operations 20,872 23,889 85,578 87,246
Interest expense -
discontinued operations - - - 2,483
Income taxes - continuing
operations 3,652 39 10,402 9,479
Income taxes - discontinued
operations 21 968 (300) 524
Minority interests (3,578) 243 (4,065) (135)
Adjustments from consolidated
affiliates (2,096) (2,367) (8,354) (5,063)
Adjustments from
unconsolidated affiliates 5,276 7,155 22,985 30,603
Preferred shareholder
dividends 7,722 7,722 30,886 30,107
----- ----- ------ ------
EBITDA (219,885) 70,756 (83,561) 300,386
Realized portion of deferred
gain on sale leasebacks (1,141) (1,319) (5,161) (4,847)
------ ------ ------ ------
Adjusted EBITDA (221,026) 69,437 (88,722) 295,539
-------- ------ ------- -------
Gain on sale of assets -
continuing operations (4) (18) (151) (18)
Loss (gain) on sale of assets
- discontinued operations 180 - (37,482) -
Loss (gain) on sale of
minority interests in hotel
properties - 134 46 (84,658)
(Gain) loss on sale of assets
- unconsolidated affiliates - (4) - 239
Impairment losses -
discontinued operations - - - 37,716
Impairment losses and other
charges - continuing
operations 265,141 14 361,820 7,372
Foreign currency exchange
loss (a) 4,896 156 814 3,701
Hyatt Regency La Jolla
minority interest (b) (530) (1,127) (4,593) (1,127)
Distributions in excess of
minority interest capital - - 2,499 -
Termination costs -
discontinued operations (c) - - - (400)
Planning costs - New Orleans
Jazz District - - - 227
Loss on early extinguishment
of debt - continuing
operations - - - 7,845
Loss on early extinguishment
of debt - discontinued
operations - - - 7,294
--- --- --- -----
Comparable EBITDA $48,657 $68,592 $234,231 $273,730
======= ======= ======== ========
(a) Foreign currency exchange loss applicable to third-party and
inter-company debt and certain balance sheet items held by foreign
subsidiaries.
(b) The minority interest partner's share of the Hyatt Regency La Jolla's
property EBITDA is not deducted from net (loss) income available to
common shareholders under GAAP accounting rules.
(c) Termination costs included in discontinued operations related to the
termination of the management agreement at the Marriott Rancho Las
Palmas property.
Reconciliation of Net (Loss) Income Available to Common Shareholders to
Funds From Operations (FFO), FFO - Fully Diluted and Comparable FFO
(in thousands, except per share data)
Three Months Ended Years Ended
December 31, December 31,
------------- --------------
2008 2007 2008 2007
---- ---- ---- ----
Net (loss) income available to
common shareholders $(284,064) $5,424 $(344,310) $39,051
Depreciation and amortization -
continuing operations 32,310 26,997 122,466 103,253
Depreciation and amortization -
discontinued operations - 686 1,151 2,838
Corporate depreciation (305) (265) (1,201) (265)
Gain on sale of assets -
continuing operations (4) (18) (151) (18)
Loss (gain) on sale of assets -
discontinued operations 180 - (37,482) -
Loss (gain) on sale of minority
interests in hotel properties - 134 46 (84,658)
Realized portion of deferred
gain on sale leasebacks (1,141) (1,319) (5,161) (4,847)
Deferred tax expense on realized
portion of deferred gain on sale
leasebacks 333 379 1,530 1,439
Minority interests adjustments (437) (379) (1,677) (1,449)
Adjustments from consolidated
affiliates (1,372) (1,342) (5,376) (2,797)
Adjustments from unconsolidated
affiliates 1,884 1,703 7,379 7,083
----- ----- ----- -----
FFO (252,616) 32,000 (262,786) 59,630
Convertible minority interests (3,141) 622 (2,388) 1,314
------ --- ------ -----
FFO - Fully Diluted (255,757) 32,622 (265,174) 60,944
Impairment losses - discontinued
operations - - - 37,716
Impairment losses and other
charges - continuing operations 265,141 14 361,820 7,372
Foreign currency exchange loss,
net of tax (a) 3,556 569 439 4,062
Hyatt Regency La Jolla minority
interest (b) (61) (329) (2,620) (329)
Distributions in excess of
minority interest capital - - 2,499 -
Termination costs, net of tax -
discontinued operations (c) - - - (244)
Planning costs, net of tax - New
Orleans Jazz District - - - 166
Loss on early extinguishment of
debt - continuing operations - - - 7,845
Loss on early extinguishment of
debt - discontinued operations - - - 7,294
--- --- --- -----
Comparable FFO $12,879 $32,876 $96,964 $124,826
======= ======= ======= ========
Comparable FFO per diluted share $0.17 $0.43 $1.27 $1.64
===== ===== ===== =====
Weighted average diluted shares 76,122 75,977 76,192 76,300
====== ====== ====== ======
(a) Foreign currency exchange loss applicable to third-party and
inter-company debt and certain balance sheet items held by foreign
subsidiaries.
(b) The minority interest partner's share of the Hyatt Regency La Jolla's
property FFO is not deducted from net (loss) income available to common
shareholders under GAAP accounting rules.
(c) Termination costs, net of tax, included in discontinued operations
related to the termination of the management agreement at the Marriott
Rancho Las Palmas property.
Debt Summary
(dollars in thousands)
Loan
Debt Interest Rate Spread (a) Amount Maturity (b)
---- -------------- ---------- ------ -------------
Punta Mita land
parcel promissory
note N/A N/A $16,527 August 2009
Bank credit facility 1.69% 125 bp 206,000 March 2011
Westin St. Francis 1.14% 70 bp 220,000 August 2011
Fairmont Scottsdale
Princess 1.00% 56 bp 180,000 September 2011
InterContinental
Chicago 1.50% 106 bp 121,000 October 2011
InterContinental
Miami 1.17% 73 bp 90,000 October 2011
InterContinental
Prague (c) 4.09% 120 bp (c) 145,277 March 2012
Loews Santa Monica
Beach Hotel 1.07% 63 bp 118,250 March 2012
Ritz-Carlton Half
Moon Bay 1.11% 67 bp 76,500 March 2012
Exchangeable senior
notes 3.50% Fixed 179,415 April 2012
Fairmont Chicago 1.14% 70 bp 123,750 April 2012
Hyatt Regency La
Jolla 1.44% 100 bp 97,500 September 2012
Marriott London
Grosvenor Square (d) 3.87% 110 bp (d) 112,731 October 2013
-------
$1,686,950
==========
(a) Spread over LIBOR (0.44% at December 31, 2008).
(b) Includes extension options, excluding the conditional option to
extend the bank credit facility.
(c) Principal balance of euro 104,000,000 at December 31, 2008. Spread
over three-month EURIBOR (2.89% at December 31, 2008).
(d) Principal balance of 77,250,000 pounds at December 31, 2008. Spread
Over three-month GBP LIBOR (2.77% at December 31, 2008).
U.S. Interest Rate Swaps
Fixed Pay Rate Notional
Swap Effective Date Against LIBOR Amount Maturity
------------------- ------------- ------ --------
April 2005 4.42% $75,000 April 2010
April 2005 4.59% 75,000 April 2012
June 2005 4.12% 50,000 June 2012
June 2006 5.50% 75,000 June 2013
August 2006 5.34% 100,000 August 2011
August 2006 5.42% 100,000 August 2013
September 2006 5.08% 100,000 February 2011
September 2006 5.10% 100,000 December 2010
September 2006 5.09% 100,000 September 2009
March 2007 4.81% 100,000 December 2009
March 2007 4.84% 100,000 July 2012
---- -------
4.99% $975,000
==== ========
European Interest Rate Swap
Fixed Pay Rate Notional
Swap Effective Date Against GBP LIBOR Amount Maturity
------------------- ----------------- ------ --------
October 2007 5.72% 77,250 pounds October 2013
Fixed Pay Rate Notional
Swap Effective Date Against EURIBOR Amount Maturity
------------------- --------------- ------ --------
September 2008 4.53% euro 104,000 March 2012
Forward-Starting Interest Rate Swaps
Fixed Pay Rate Notional
Swap Effective Date Against LIBOR Amount Maturity
------------------- ------------- ------ --------
September 2009 4.90% $100,000 September 2014
December 2009 4.96% 100,000 December 2014
April 2010 5.42% 75,000 April 2015
December 2010 5.23% 100,000 December 2015
February 2011 5.27% 100,000 February 2016
-------
$475,000
========
At December 31, 2008, future scheduled debt principal payments (including
non-conditional extension options) are as follows:
Years ended Amount
December 31, (in thousands)
------------ --------------
2009 $16,527
2010 7,364
2011 824,364
2012 734,982
2013 103,713
Thereafter -
---
Total $1,686,950
==========
Percent of fixed rate debt including U.S. and European swaps 84.7%
Weighted average interest rate including U.S. and European swaps 4.87%
Weighted average maturity of fixed rate debt (debt with maturity
of greater than one year) 4.20
Under Construction and Completed Capital Projects
(images of completed projects available on the Company's website)
Hotel Project Description Completed
----- ------------------- ---------
Fairmont
Chicago ENO, wine tasting room * Q2 08
Lobby renovation Q2 08
Guest room renovation Q2 08
Spa and fitness center Q1 08
Gold lounge Q4 06
Sushi bar Q4 06
Fairmont
Scottsdale
Princess Main building guest room renovation Q4 08
Michael Mina operated Bourbon Steak Restaurant Q1 08
Midnight Oil operated Stone Rose Bar Q1 08
Gold room renovation Q1 08
GM house conversion - 1 room addition Q1 08
Four Seasons
Mexico City Guest room renovation Q1 06
Four Seasons
Punta Mita Lobby bar Q1 08
Oasis room and river pool - 23 room addition Q2 07
Fitness center expansion Q1 07
Coral suite - 5 room addition Q1 07
Retail expansion Q4 06
Tamai pool Q4 06
Tamai garden Q4 06
Beachfront restaurant addition Q4 06
Arena suite - 5 room addition Q1 06
Four Seasons
Washington,
D.C. Lobby renovation Q1 09
Michael Mina operated Bourbon Steak Restaurant Q1 09
Presidential suite renovation Q1 09
11 room expansion Q1 09
Hotel del
Coronado Retail reconfiguration / renovation Q2 08
ENO, wine tasting room * Q1 08
Guest room renovation Q2 07
Restaurant renovation Q2 07
Beach Village - 78 room addition Q2 07
Spa & fitness center / beach club Q1 07
InterContinental
Chicago Starbucks Q3 07
Meeting space addition Q3 07
ENO, wine tasting room * Q4 06
InterContinental
Miami Spa and fitness center Q3 08
Starbucks Q3 06
InterContinental
Prague Partial guest room renovation Q2 07
Loews Santa
Monica Partial guest room renovation Q4 08
Restaurant renovation Q4 04
Marriott London
Grosvenor
Square Basement reorganization Q4 08
Gordon Ramsay operated Maze Grill Restaurant Q2 08
Concierge lounge Q2 08
Guest room renovation Q1 08
Renaissance
Paris Hotel
Le Parc
Trocadero Renaissance brand conversion Q1 08
Ritz-Carlton
Half Moon Bay ENO, wine tasting room expansion* Q3 08
Restaurant and lounge renovation Q3 08
Suite renovation Q1 08
Outdoor patios / guest room fireplaces Q3 06
Ocean terrace addition Q2 06
Restaurant expansion Q4 05
ENO, wine tasting room* Q3 05
Retail expansion Q3 05
Ritz-Carlton
Laguna Niguel Meeting space renovation Q4 07
Suite renovation / conversion - 3 room addition Q2 07
ENO, wine tasting room * Q1 07
Westin St.
Francis Guest room and corridor renovation In Construction
Lobby bar Q3 08
* Strategic's branded wine room concept
Operating Statistics by Geographic Region
Operating results have been adjusted to show hotel performance on a
comparable period basis. Adjustments are the (i) exclusion of
unconsolidated Hotel del Coronado, (ii) exclusion of Renaissance Paris
Hotel Le Parc Trocadero results for the years ended December 31, 2008 and
2007, (iii) exclusion of Hyatt Regency Phoenix and Hyatt Regency New
Orleans as these properties' results of operations were reclassified to
discontinued operations for the three months and years ended December 31,
2008 and 2007 and (iv) presentation of the hotels without regard to
either ownership structure or leaseholds.
United States Hotels (as of December 31, 2008)
11 Properties
5,982 Rooms
Three Months Ended Years Ended
December 31, December 31,
----------------------- -----------------------
2008 2007 Change 2008 2007 Change
---- ---- ------ ---- ---- ------
Average Daily
Rate $234.61 $242.46 -3.2% $244.17 $240.57 1.5%
Average
Occupancy 65.6% 73.2% (7.6) pts 71.8% 76.1% (4.3) pts
RevPAR $153.94 $177.51 -13.3% $175.24 $183.01 -4.2%
Total RevPAR $310.83 $356.98 -12.9% $335.35 $350.78 -4.4%
Property
EBITDA
Margin 20.7% 25.5% (4.8) pts 23.2% 25.2% (2.0) pts
Mexican Hotels (as of December 31, 2008)
2 Properties
413 Rooms
Three Months Ended Years Ended
December 31, December 31,
----------------------- -----------------------
2008 2007 Change 2008 2007 Change
---- ---- ------ ---- ---- ------
Average Daily
Rate $472.50 $485.68 -2.7% $491.52 $466.85 5.3%
Average
Occupancy 64.5% 72.6% (8.1) pts 69.2% 71.5% (2.3) pts
RevPAR $304.87 $352.55 -13.5% $339.95 $333.64 1.9%
Total RevPAR $552.27 $638.11 -13.5% $600.06 $578.20 3.8%
Property
EBITDA
Margin 34.5% 35.7% (1.2) pts 35.9% 35.5% 0.4 pts
North American Hotels (as of December 31, 2008)
13 Properties
6,395 Rooms
Three Months Ended Years Ended
December 31, December 31,
----------------------- -----------------------
2008 2007 Change 2008 2007 Change
---- ---- ------ ---- ---- ------ Average Daily
Rate $249.47 $257.84 -3.2% $259.59 $254.15 2.1%
Average
Occupancy 65.5% 73.2% (7.7) pts 71.6% 75.8% (4.2) pts
RevPAR $163.52 $188.67 -13.3% $185.87 $192.59 -3.5%
Total RevPAR $326.15 $374.90 -13.0% $352.43 $365.25 -3.5%
Property
EBITDA
Margin 22.2% 26.6% (4.4) pts 24.6% 26.2% (1.6) pts
European Same Store Hotels (as of December 31, 2008)
5 Properties (three month period) 4 Properties (year end period)
1,195 Rooms (three month period) 1,079 Rooms (year end period)
Three Months Ended Years Ended
December 31, December 31,
----------------------- -----------------------
2008 2007 Change 2008 2007 Change
---- ---- ------ ---- ---- ------
Average Daily
Rate $289.26 $344.60 -16.1% $346.43 $327.39 5.8%
Average
Occupancy 73.2% 79.1% (5.9) pts 76.6% 81.7% (5.1) pts
RevPAR $211.70 $272.61 -22.3% $265.37 $267.37 -0.7%
Total RevPAR $340.50 $422.71 -19.4% $379.35 $384.02 -1.2%
Property
EBITDA
Margin 39.0% 36.6% 2.4 pts 39.3% 39.4% (0.1) pts
SOURCE Strategic Hotels & Resorts
02/26/2009
CONTACT: Ryan Bowie, Vice President and Treasurer of Strategic Hotels &
Resorts, +1-312-658-5766
/Web Site: http://www.strategichotels.com
(BEE)
