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CHICAGO, May 6 /PRNewswire-FirstCall/ -- Strategic Hotels & Resorts (NYSE:
BEE) today reported results for the first quarter ended March 31, 2009.
First Quarter Recap
-- Comparable funds from operations (Comparable FFO) was a loss of $0.15
per diluted share compared with income of $0.30 per diluted share in
the prior year.
-- Quarterly Comparable EBITDA was $22.8 million compared with $55.7
million in the prior year.
-- North American total revenue per available room (Total RevPAR)
decreased 22.8 percent and revenue per available room (RevPAR)
decreased 24.1 percent driven by a 10.1 percentage point decrease in
occupancy and an 11.1 percent decrease in average daily rate (ADR).
Non-rooms revenue declined by 22.0 percent.
-- European Total RevPAR decreased 26.1 percent (12.3 percent in constant
dollars) and RevPAR decreased 29.3 percent (14.4 percent in constant
dollars).
-- North American gross operating profit (GOP) and EBITDA margins
contracted 560 basis points and 630 basis points, respectively. North
American EBITDA per room declined 43.7 percent.
Chief Executive Officer Laurence Geller remarked, "Despite continued
pressures on the luxury market, we are executing plans on all of our key
strategic fronts. Our revenue growth continues to outperform comparable
national indices for luxury hotels. Operating controls at our hotels are
significantly reducing costs while making substantial improvements in
productivity. And, we have made great strides toward right sizing our
corporate overhead for today's business realities with a run rate reduction
over 20% from levels in 2007. We also have confidence in the structural
elements of our balance sheet with no maturing debt until 2011 and liquidity
provided through a durable amended bank credit facility.
"As we move forward, we continue to focus on further enhancing our
liquidity through aggressive and innovative asset management, limiting capital
outlays, and seeking opportunities to raise efficiently priced equity through
disciplined processes and carefully executed hotel sales."
Financial Results
The company reported first quarter 2009 financial results as follows:
-- Net loss attributable to common shareholders was $43.2 million, or
$0.57 per diluted share, for the first quarter of 2009, compared with
net loss attributable to common shareholders of $7.9 million, or $0.11
per diluted share, for the first quarter of 2008.
-- Comparable EBITDA was $22.8 million compared with $55.7 million for
the first quarter of 2008.
-- FFO was a loss of $10.6 million, or $0.14 per diluted share, compared
with income of $18.9 million, or $0.25 per diluted share, in the first
quarter of 2008. Comparable FFO was a loss of $11.4 million, or $0.15
per diluted share, compared with income of $22.6 million, or $0.30 per
diluted share, in the first quarter of 2008.
Bank Credit Facility Amendment
During the first quarter, 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.
Earnings Call
The company will conduct its first quarter 2009 conference call for
investors and other interested parties on May 7, 2009 at 10:00 a.m. Eastern
Time (ET). Interested individuals are invited to listen to the call by
telephone at 888-713-4199 (toll international: 617-213-4861) with pass code
24417368. To participate on the web cast, log on to
http://www.strategichotels.com or
https://www.theconferencingservice.com/prereg/key.process?key=PPBXE66T7 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
1:00 p.m. ET on May 7, 2009, through 11:59 p.m. ET on May 14, 2009. To access
the replay, dial 888-286-8010 (toll international: 617-801-6888) and request
replay pin number 33077752. 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 first quarter information section.
Portfolio Definitions
North American hotel comparisons for the first quarter 2009 are derived
from the company's hotel portfolio at March 31, 2009, consisting of properties
in which operations are included in the consolidated results of the company.
European hotel comparisons for the first quarter 2009 are derived from the
company's European owned and leased hotel properties at March 31, 2009.
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 8,358 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: 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; demand for
hotel rooms in our current and proposed market areas; outbreak of contagious
diseases such as the H1N1 virus; 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; 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 in the Company's
most recent form 10-K and subsequent 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.
Strategic Hotels & Resorts, Inc. and Subsidiaries
(SHR)
Consolidated Statements of Operations
(in thousands, except per share data)
Three Months Ended
March 31,
---------
2009 2008
---- ----
Revenues:
Rooms $96,586 $130,280
Food and beverage 57,106 79,124
Other hotel operating revenue 25,791 27,154
------ ------
179,483 236,558
Lease revenue 1,120 1,287
----- -----
Total revenues 180,603 237,845
------- -------
Operating Costs and Expenses:
Rooms 27,289 33,125
Food and beverage 42,827 56,743
Other departmental expenses 55,238 62,562
Management fees 6,763 9,609
Other hotel expenses 13,782 16,042
Lease expense 3,966 4,327
Depreciation and amortization 34,103 27,603
Impairment losses and other
charges 459 -
Corporate expenses 10,424 7,430
------ -----
Total operating costs and
expenses 194,851 217,441
------- -------
Operating (loss) income (14,248) 20,404
Interest expense (23,966) (22,842)
Interest income 414 595
Loss on early extinguishment
of debt (883) -
Equity in earnings (losses)
of joint ventures 139 (779)
Foreign currency exchange
gain (loss) 2,015 (3,209)
Other expenses, net (39) (262)
--- ----
Loss before income taxes, loss
on sale of
noncontrolling interests
in hotel properties and
discontinued operations (36,568) (6,093)
Income tax expense (100) (212)
---- ----
Loss before loss on sale
of noncontrolling
interests in hotel
properties and discontinued
operations (36,668) (6,305)
Loss on sale of
noncontrolling interests in
hotel properties - (5)
--- ---
Loss from continuing
operations (36,668) (6,310)
Income from discontinued
operations, net of tax - 5,200
--- -----
Net loss $(36,668) $(1,110)
Net loss attributable to the
noncontrolling interests in
SHR's operating partnership 446 2
Net loss attributable to the
noncontrolling interests in
consolidated affiliates 753 897
--- ---
Net loss attributable to SHR (35,469) (211)
Preferred shareholder
dividends (7,721) (7,721)
------ ------
Net loss attributable to SHR
common shareholders $(43,190) $(7,932)
======== =======
Basic and Diluted Loss
Per Share:
Loss from continuing
operations attributable to
SHR common shareholders $(0.57) $(0.18)
Income from discontinued
operations attributable to
SHR common shareholders - 0.07
--- ----
Net loss attributable to
SHR common shareholders $(0.57) $(0.11)
====== ======
Weighted average common
shares outstanding 75,166 74,950
====== ======
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)
Consolidated Balance Sheets
(in thousands, except share data)
March 31, December 31,
2009 2008
---- ----
Assets
Investment in hotel properties, net $2,358,243 $2,383,860
Goodwill 118,002 120,329
Intangible assets, net of
accumulated amortization of $3,414
and $3,096 31,445 32,277
Investment in joint ventures 81,584 82,122
Cash and cash equivalents 128,283 80,954
Restricted cash and cash equivalents 28,796 37,358
Accounts receivable, net of allowance for
doubtful accounts of $2,477 and $2,203 64,180 70,945
Deferred financing costs, net
of accumulated amortization of
$6,981 and $6,655 16,566 10,375
Deferred tax assets 36,246 38,260
Other assets 46,987 52,687
------ ------
Total assets $2,910,332 $2,909,167
========== ==========
Liabilities and
Shareholders' Equity
Liabilities:
Mortgages and other debt payable $1,292,896 $1,301,535
Exchangeable senior notes,
net of discount 166,198 165,155
Bank credit facility 296,000 206,000
Accounts payable and
accrued expenses 240,991 281,918
Deferred tax liabilities 31,232 34,236
Deferred gain on sale of hotels 97,800 104,251
------ -------
Total liabilities 2,125,117 2,093,095
Noncontrolling interests in SHR's
operating partnership 5,096 5,330
Equity:
SHR's 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; 74,971,069
and 74,410,012 common shares issued
and outstanding) 750 744
Additional paid-in capital 1,233,077 1,228,774
Accumulated deficit (745,732) (710,263)
Accumulated other
comprehensive loss (92,277) (93,637)
------- -------
Total SHR's shareholders' equity 753,739 783,539
------- -------
Noncontrolling interests in
consolidated affiliates 26,380 27,203
------ ------
Total equity 780,119 810,742
------- -------
Total liabilities and equity $2,910,332 $2,909,167
========== ==========
Strategic Hotels & Resorts, Inc. and
Subsidiaries (SHR)
FINANCIAL HIGHLIGHTS
Supplemental Financial Data
(in thousands, except per share information)
March 31, 2009
--------------
Pro Rata Share Consolidated
-------------- ------------
Capitalization
--------------
Common shares
outstanding 74,971 74,971
Operating
partnership units
outstanding 976 976
Stock options
outstanding 885 885
Restricted stock
units outstanding 1,079 1,079
----- -----
Combined shares,
options and units
outstanding 77,911 77,911
Common stock price
at end of period $0.69 $0.69
----- -----
Common equity
capitalization $53,759 $53,759
Preferred equity
capitalization (at
$25.00 face value) 370,236 370,236
Consolidated debt
(excludes the
discount on
exchangeable
senior notes) 1,768,896 1,768,896
Pro rata share of
unconsolidated
debt 282,825 -
Pro rata share of
consolidated debt (107,065) -
Cash and cash
equivalents (128,283) (128,283)
-------- --------
Total enterprise
value $2,240,368 $2,064,608
========== ==========
Net Debt / Total
Enterprise Value 81.1% 79.5%
Preferred Equity /
Total Enterprise
Value 16.5% 17.9%
Common Equity /
Total Enterprise
Value 2.4% 2.6%
Strategic Hotels & Resorts, Inc. and
Subsidiaries (SHR)
Investment in the Hotel del Coronado
(in thousands)
Three Months Ended
March 31,
-----------
2009 2008
---- ----
Total revenues (100%) $28,192 $34,858
Property EBITDA (100%) $8,506 $11,449
Equity in losses of joint
venture (SHR 45% ownership)
Property EBITDA $3,828 $5,152
Depreciation and amortization (1,903) (1,900)
Interest expense (2,061) (4,411)
Other expense, net (183) (28)
Income taxes 213 340
--- ---
Equity in losses of joint
venture $(106) $(847)
===== =====
EBITDA Contribution from
investment in Hotel del Coronado
Equity in losses of joint
venture $(106) $(847)
Depreciation and amortization 1,903 1,900
Interest expense 2,061 4,411
Income taxes (213) (340)
---- ----
EBITDA Contribution for
investment in Hotel del
Coronado $3,645 $5,124
====== ======
FFO Contribution from
investment in Hotel del Coronado
Equity in losses of joint
venture $(106) $(847)
Depreciation and amortization 1,903 1,900
----- -----
FFO Contribution for
investment in Hotel del
Coronado $1,797 $1,053
====== ======
Interest Spread over Loan
Debt Rate LIBOR Amount Maturity
---- --------- ----- ------ ---------
CMBS Mortgage
and Mezzanine 2.58% 208 bp $610,000 January 2011 (a)
Revolving
Credit
Facility 3.00% 250 bp 18,500 January 2011 (a)
------
628,500
Cash and cash
equivalents 47,543
------
Net Debt $580,957
========
(a) Includes extension options.
LIBOR
Effective Cap Notional
Cap Date Rate Amount Maturity
--- ----------- ------ -------- --------
CMBS Mortgage
and Mezzanine
Loan and Revolving
Credit Facility Cap January 2009 5.0% $630,000 January 2011
CMBS Mortgage
and Mezzanine
Loan and Revolving
Credit Facility Cap June 2009 3.0%-5.0% $630,000 January 2010
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)
Leasehold Information
(in thousands)
Three Months Ended
March 31,
-----------
2009 2008
---- ----
Paris Marriott Champs Elysees:
Property EBITDA $2,607 $4,005
Revenue (a) $2,607 $4,005
Lease Expense (2,862) (3,059)
Less: Deferred Gain on Sale Leaseback (1,100) (1,263)
------ ------
Adjusted Lease Expense (3,962) (4,322)
------- -----
EBITDA Contribution from Leasehold $(1,355) $(317)
======= =====
Marriott Hamburg:
Property EBITDA $1,353 $1,562
Revenue (a) $1,120 $1,287
Lease Expense (1,104) (1,268)
Less: Deferred Gain on Sale Leaseback (51) (59)
--- ---
Adjusted Lease Expense (1,155) (1,327)
---- ----
EBITDA Contribution from Leasehold $(35) $(40)
==== ====
Total Leaseholds:
Property EBITDA $3,960 $5,567
Revenue (a) $3,727 $5,292
Lease Expense (3,966) (4,327)
Less: Deferred Gain on Sale Leaseback (1,151) (1,322)
------ ------
Adjusted Lease Expense (5,117) (5,649)
------- -----
EBITDA Contribution from Leasehold $(1,390) $(357)
======= =====
March 31, December 31,
Security Deposits (b): 2009 2008
---- ----
Paris Marriott Champs Elysees $11,822 $15,507
Marriott Hamburg 6,643 6,984
----- -----
Total $18,465 $22,491
======= =======
(a) For the three months ended March 31, 2009 and 2008, Reveue for the
Paris Marriott Champs Elysees represents Property EBITDA. For the three
months ended March 31, 2009 and 2008, Revenue for the Marriott Hamburg
represents lease revenue.
(b) The security deposits are recorded in other assets on the
consolidated balance sheets.
StrategicHotels & Resorts, Inc. and Subsidiaries (SHR)
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
loss attributable to SHR 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 income or loss
attributable to convertible noncontrolling 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 loss attributable to SHR 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 noncontrolling
interests of our operating partnership into our common stock and
includes preferred dividends. We believe this treatment of
noncontrolling interests 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 loss 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 loss attributable to SHR 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 loss
attributable to SHR common shareholders, and provide an explanatory
description by footnote of the items excluded from FFO, FFO - Fully
Diluted, EBITDA and Adjusted EBITDA.
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)
Reconciliation of Net Loss Attributable to SHR Common Shareholders to
EBITDA, Adjusted EBITDA and Comparable EBITDA
(in thousands)
Three Months Ended
March 31,
---------
2009 2008
---- ----
Net loss attributable to SHR common
shareholders $(43,190) $(7,932)
Depreciation and amortization -
continuing operations 34,103 27,603
Depreciation and amortization -
discontinued operations - 690
Interest expense -
continuing operations 23,966 22,842
Income taxes -
continuing operations 100 212
Income taxes -
discontinued operations - 90
Noncontrolling interests (446) (2)
Adjustments from
consolidated affiliates (a) (1,564) (1,671)
Adjustments from
unconsolidated affiliates 3,899 5,989
Preferred shareholder dividends 7,721 7,721
----- -----
EBITDA 24,589 55,542
Realized portion of deferred gain
on sale leasebacks (1,151) (1,322)
------ ------
Adjusted EBITDA 23,438 54,220
------ ------
Gain on sale of assets -
continuing operations (2) (117)
Gain on sale of assets -
discontinued operations - (416)
Loss on sale of noncontrolling
interests in hotel properties - 5
Impairment losses and other charges -
continuing operations 459 -
Foreign currency exchange
(gain) loss (b) (2,015) 3,209
Hyatt Regency La Jolla
noncontrolling interest (a) - (1,180)
Loss on early extinguishment
of debt - continuing operations 883 -
--- ---
Comparable EBITDA $22,763 $55,721
======= =======
(a) The noncontrolling interest partner's share of the Hyatt Regency
La Jolla's property EBITDA is not deducted from net loss attributable
to SHR common shareholders under GAAP accounting rules for the three
months ended March 31, 2008. Under new accounting rules effective
January 1, 2009, the noncontrolling interest partner's share of the Hyatt
Regency La Jolla's property EBITDA is included in adjustments from
consolidated affiliates for the three months ended March 31, 2009.
(b) Foreign currency exchange loss applicable to third-party and inter-
company debt and certain balance sheet items held by foreign
subsidiaries.
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)
Reconciliation of Net Loss Attributable to SHR Common Shareholders to
Funds From Operations (FFO), FFO - Fully Diluted and Comparable FFO
(in thousands, except per share data)
Three Months Ended
March 31,
---------
2009 2008
---- ----
Net loss attributable to
SHR common shareholders $(43,190) $(7,932)
Depreciation and amortization -
continuing operations 34,103 27,603
Depreciation and amortization -
discontinued operations - 690
Corporate depreciation (304) (292)
Gain on sale of assets -
continuing operations (2) (117)
Gain on sale of assets -
discontinued operations - (416)
Loss on sale of noncontrolling
interests in hotel properties - 5
Realized portion of deferred gain
on sale leasebacks (1,151) (1,322)
Deferred tax expense on
realized portion of deferred
gain on sale leasebacks 343 394
Noncontrolling interests
adjustments (457) (387)
Adjustments from consolidated
affiliates (a) (1,832) (1,275)
Adjustments from unconsolidated
affiliates 1,935 1,900
----- -----
FFO (10,555) 18,851
Convertible noncontrolling
interests 11 385
--- ---
FFO - Fully Diluted (10,544) 19,236
Impairment losses and other
charges - continuing
operations 459 -
Foreign currency exchange (gain)
loss, net of tax (b) (2,177) 3,916
Hyatt Regency La Jolla
noncontrolling interest (a) - (589)
Loss on early extinguishment of
debt - continuing operations 883 -
--- ---
Comparable FFO $(11,379) $22,563
======== =======
Comparable FFO per
diluted share $(0.15) $0.30
====== =====
Weighted average diluted shares 75,166 76,086
====== ======
(a) The noncontrolling interest partner's share of the Hyatt Regency La
Jolla's property FFO is not deducted from net loss attributable to
SHR common shareholders under GAAP accounting rules for the three months
ended March 31, 2008. Under new accounting rules effective
January 1, 2009, the noncontrolling interest partner's share of the Hyatt
Regency LaJolla's property EBITDA is included in adjustments from
consolidated affiliates for the three months ended March 31, 2009.
(b) Foreign currency exchange loss applicable to third-party and inter-
company debt and certain balance sheet items held by foreign
subsidiaries.
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)
Debt Summary
(dollars in thousands)
Interest Loan
Debt Rate Spread (a) Amount Maturity (b)
---- --------- ---------- ------ -------------
Punta Mita land parcel
promissory note N/A N/A $16,891 August 2009
Bank credit facility 4.25% 375 bp 296,000 March 2011
Westin St. Francis 1.20% 70 bp 220,000 August 2011
Fairmont Scottsdale
Princess 1.06% 56 bp 180,000 September 2011
InterContinental
Chicago 1.56% 106 bp 121,000 October 2011
InterContinental Miami 1.23% 73 bp 90,000 October 2011
InterContinental Prague
(c) 2.71% 120 bp (c) 138,174 March 2012
Loews Santa Monica
Beach Hotel 1.13% 63 bp 118,250 March 2012
Ritz-Carlton Half Moon
Bay 1.17% 67 bp 76,500 March 2012
Exchangeable senior
notes, net of discount 3.50% (d) Fixed 166,198 April 2012
Fairmont Chicago 1.20% 70 bp 123,750 April 2012
Hyatt Regency La Jolla 1.50% 100 bp 97,500 September 2012
Marriott London
Grosvenor Square (e) 2.75% 110 bp (e) 110,831 October 2013
-------
$1,755,094
==========
(a) Spread over LIBOR (0.50% at March 31, 2009).
(b) Includes extension options, excluding the conditional one-year
extension option on the bank credit facility.
(c) Principal balance of euro 104,000,000 at March 31, 2009. Spread
over three-month EURIBOR (1.51% at March 31, 2009).
(d) Reflects the cash coupon.
(e) Principal balance of 77,250,000 pounds Sterling at March 31, 2009.
Spread over three-month GBP LIBOR (1.65% at March 31, 2009).
U.S. Interest Rate Swaps
Fixed Pay Rate Notional
Swap Effective Date Against LIBOR Amount Maturity
------------------- ------------- ------ --------
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 5.42% 100,000 August 2013
March 2007 4.84% 100,000 July 2012
March 2009 0.70% 50,000 September 2009
March 2009 0.78% 50,000 December 2009
March 2009 0.90% 75,000 April 2010
March 2009 1.12% 50,000 December 2010
March 2009 1.38% 50,000 August 2011
March 2009 0.64% 50,000 September 2009
March 2009 1.02% 50,000 December 2010
March 2009 0.64% 50,000 December 2009
March 2009 1.04% 100,000 February 2011
March 2009 1.22% 50,000 August 2011
---- ------
2.60% $975,000
==== ========
European Interest Rate Swap
Fixed
Pay Rate
Against Notional
Swap Effective Date GBP LIBOR Amount Maturity
------------------- --------- -------- --------
October
2007 5.72% 77,250
pounds Sterling 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 March 31, 2009, future scheduled debt principal payments (including
non-conditional extension options) are as follows:
Years ended Amount
December 31, (in thousands)
------------ --------------
2009 $16,891
2010 7,101
2011 914,101
2012 728,839
2013 101,964
Thereafter -
---
1,768,896
Less discount on exchangeable
senior notes (13,802)
-------
Total $1,755,094
==========
Percent of fixed rate debt including U.S.
and European swaps 80.2%
Weighted average interest rate including
U.S. and European swaps (f) 3.82%
Weighted average maturity of fixed rate
debt (debt with maturity of greater than
one year) 3.88
(f) Excludes the amortization of deferred financing costs, amortization
of the discount on the exchangeable senior notes and the amortization
of the interest rate swap costs.
SOURCE Strategic Hotels & Resorts
CONTACT: Ryan Bowie, Vice President and Treasurer of Strategic Hotels &
Resorts, +1-312-658-5766
Web Site: http://www.strategichotels.com
