EX-99.3
4
bee-20140404xex993.htm
EXHIBIT 99.3
BEE-2014.04.04-EX99.3
Exhibit 99.3
UNAUDITED PRO FORMA FINANCIAL INFORMATION
On March 31, 2014, Strategic Hotel Funding, L.L.C., the operating partnership of Strategic Hotels & Resorts, Inc. ("SHR") and certain of its direct and indirect wholly-owned subsidiaries closed on the sale of the Marriott London Grosvenor Square hotel (the "Grosvenor Disposition"). SHR sold the 237-room Marriott London Grosvenor Square hotel for £125.15 million (approximately $207.7 million). The following unaudited pro forma financial information is presented as a result of the Grosvenor Disposition and gives effect to the following transactions: (a) the disposition of the Four Seasons Punta Mita Resort and an adjacent 48-acre land parcel commonly referred to as La Solana on February 28, 2014 and (b) the disposition of the Marriott London Grosvenor Square hotel on March 31, 2014.
The historical financial information as of December 31, 2013 and for the year then ended has been derived from SHR's audited financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2013.
The unaudited pro forma balance sheet data as of December 31, 2013 is presented as if the Grosvenor Disposition had occurred on December 31, 2013. The unaudited pro forma statement of operations data for the year ended December 31, 2013 is presented as if the Grosvenor Disposition had occurred on January 1, 2013.
The unaudited pro forma financial information is presented for informational purposes only and does not purport to represent what SHR's results of operations would actually have been if the transaction had in fact occurred on the earlier date discussed above. It also does not project or forecast SHR's consolidated results of operation for any future date or period.
Strategic Hotels & Resorts, Inc.
Unaudited Pro Forma Consolidated Balance Sheet
December 31, 2013
(In thousands)
Strategic Hotels & Resorts, Inc. Historical Consolidated
Previously Filed Pro Forma Information (1)
Strategic Hotels & Resorts, Inc. Pro Forma
Grosvenor Disposition (2a)
Strategic Hotels & Resorts, Inc. Pro Forma Consolidated
Assets
Investment in hotel properties, net
$
1,795,338
$
1,795,338
$
(62,753
)
$
1,732,585
Goodwill
38,128
38,128
38,128
Intangible assets, net
29,502
29,502
(28,845
)
657
Assets held for sale
135,901
(135,901
)
-
-
Investment in unconsolidated affiliates
104,973
104,973
104,973
Cash and cash equivalents
73,655
183,179
256,834
(5,168
)
347,822
96,156
(2b)
Restricted cash and cash equivalents
75,916
75,916
(4,033
)
71,883
Accounts receivable, net
39,660
39,660
(1,179
)
38,481
Deferred financing costs, net
8,478
8,478
(386
)
8,092
Prepaid expenses and other assets
35,600
35,600
(4,636
)
30,964
Total assets
$
2,337,151
$
47,278
$
2,384,429
$
(10,844
)
$
2,373,585
Liabilities, Noncontrolling Interests and Equity
Liabilities:
Mortgages and other debt payable
$
1,163,696
$
1,163,696
$
(115,958
)
$
1,047,738
Bank credit facility
110,000
110,000
110,000
Liabilities of assets held for sale
17,027
(17,027
)
-
-
Accounts payable and accrued expenses
189,889
189,889
(3,944
)
185,945
Deferred tax liabilities
46,137
46,137
46,137
Total liabilities
1,526,749
(17,027
)
1,509,722
(119,902
)
1,389,820
Commitments and contingencies
Noncontrolling interests in SHR's operating partnership
7,534
7,534
7,534
Equity:
SHR's shareholders' equity:
8.50% Series A Cumulative Redeemable Preferred Stock
99,995
99,995
99,995
8.25% Series B Cumulative Redeemable Preferred Stock
87,064
87,064
87,064
8.25% Series C Cumulative Redeemable Preferred Stock
92,489
92,489
92,489
Common stock
2,056
2,056
2,056
Additional paid-in capital
1,705,306
1,705,306
1,705,306
Accumulated deficit
(1,234,952
)
64,305
(1,170,647
)
92,923
(2c)
(1,077,724
)
Accumulated other comprehensive loss
(41,445
)
(41,445
)
16,135
(25,310
)
Total SHR's shareholders' equity
710,513
64,305
774,818
109,058
883,876
Noncontrolling interests in consolidated affiliates
92,355
92,355
92,355
Total equity
802,868
64,305
867,173
109,058
976,231
Total liabilities, noncontrolling interests and equity
$
2,337,151
$
47,278
$
2,384,429
$
(10,844
)
$
2,373,585
Notes to Unaudited Pro Forma Consolidated Balance Sheet as of December 31, 2013
1.
Previously Filed Pro Forma Information - The pro forma adjustments filed on SHR's March 6, 2014 Form 8-K were made to account for the disposition of the Four Seasons Punta Mita Resort and the La Solana land parcel for net proceeds of approximately $183.2 million on February 28, 2014.
2. Grosvenor Disposition - On March 31, 2014, SHR disposed of its ownership interests in the Marriott London Grosvenor Square hotel. The following unaudited pro forma adjustments were made to account for this transaction:
a)
Reflects the elimination of consolidated accounts related to the Marriott London Grosvenor Square hotel.
b)
Reflects the net proceeds from the Grosvenor Disposition of approximately $96.2 million.
c)
Reflects a $92.9 million gain related to the Grosvenor Disposition.
Strategic Hotels & Resorts, Inc.
Unaudited Pro Forma Consolidated Statement of Operations
For the Year Ended December 31, 2013
(in thousands, except per share amounts)
Strategic Hotels & Resorts, Inc. Historical Consolidated
Previously Filed Pro Forma Information (1)
Strategic Hotels & Resorts, Inc. Pro Forma
Grosvenor Disposition (2)
Strategic Hotels & Resorts, Inc. Pro Forma Consolidated
Revenues:
Rooms
$
506,348
$
506,348
$
(26,614
)
$
479,734
Food and beverage
294,969
294,969
(7,412
)
287,557
Other hotel operating revenue
93,535
93,535
(2,180
)
91,355
Lease revenue
5,161
5,161
5,161
Total revenues
900,013
900,013
(36,206
)
863,807
Operating Costs and Expenses:
Rooms
144,464
144,464
(5,518
)
138,946
Food and beverage
225,213
225,213
(3,825
)
221,388
Other departmental expenses
220,523
220,523
(6,809
)
213,714
Management fees
27,126
27,126
(2,126
)
25,000
Other hotel expenses
60,618
60,618
(2,183
)
58,435
Lease expense
4,818
4,818
4,818
Depreciation and amortization
101,943
101,943
(5,231
)
96,712
Impairment losses and other charges
728
728
728
Corporate expenses
25,807
25,807
(631
)
25,176
Total operating costs and expenses
811,240
811,240
(26,323
)
784,917
Operating income
88,773
88,773
(9,883
)
78,890
Interest expense
(84,276
)
(84,276
)
7,087
(77,189
)
Interest income
59
59
(6
)
53
Equity in earnings of unconsolidated affiliates
2,987
2,987
2,987
Foreign currency exchange gain
44
44
(2
)
42
Other expenses, net
(314
)
(314
)
(314
)
Income before income taxes
7,273
7,273
(2,804
)
4,469
Income tax expense
(557
)
(557
)
401
(156
)
Income from continuing operations
$
6,716
$
6,716
$
(2,403
)
$
4,313
Amounts Attributable to SHR:
Income from continuing operations
$
7,804
$
7,804
$
(2,403
)
$
5,401
Loss from continuing operations attributable to SHR common shareholders per share:
Basic:
$
(0.08
)
$
(0.08
)
$
(0.09
)
(3)
Diluted:
$
(0.08
)
$
(0.08
)
$
(0.09
)
(3)
Notes to Unaudited Pro Forma Consolidated Statement of Operations
For the Year Ended December 31, 2013
1. Previously Filed Pro Forma Information - The pro forma adjustments filed on SHR's March 6, 2014 Form 8-K were made to account for the disposition of the Four Seasons Punta Mita Resort and the La Solana land parcel for net proceeds of approximately $183.2 million on February 28, 2014.
2.
Grosvenor Disposition - On March 31, 2014, SHR disposed of its ownership interest in the Marriott London Grosvenor Square hotel. The consolidated accounts related to the Marriott London Grosvenor Square hotel are reflected as pro forma adjustments to eliminate accounts from continuing operations. There are no pro forma adjustments for nonrecurring items related to this transaction, including the anticipated gain on the Grosvenor Disposition, which will be recognized in discontinued operations in the first quarter of 2014.
3.
Loss From Continuing Operations Attributable to SHR Common Shareholders Per Share Calculation - The following table calculates the pro forma weighted average basic and diluted loss from continuing operations attributable to SHR common shareholders per share:
(In thousands, except per share amounts)
Basic
Diluted
Historical and pro forma basic and diluted weighted average shares outstanding for the year ended December 31, 2013
206,334
206,334
Pro forma income from continuing operations attributable to SHR for the year ended December 31, 2013
$
5,401
$
5,401
Historical preferred shareholder dividend
(24,166
)
(24,166
)
Pro forma loss from continuing operations attributable to SHR common shareholders for the year ended December 31, 2013
$
(18,765
)
$
(18,765
)
Pro forma loss from continuing operations attributable to SHR common shareholders per share for the year ended December 31, 2013 - basic and diluted
$
(0.09
)
$
(0.09
)

EX - 99 . 3 4 bee - 20140404xex993 . htm EXHIBIT 99 . 3 BEE - 2014 . 04 . 04 - EX99 . 3 Exhibit 99 . 3 UNAUDITED PRO FORMA FINANCIAL INFORMATION On March 31 , 2014 , Strategic Hotel Funding , L . L . C . , the operating partnership of Strategic Hotels & Resorts , Inc . ( " SHR " ) and certain of its direct and indirect wholly - owned subsidiaries closed on the sale of the Marriott London Grosvenor Square hotel ( the " Grosvenor Disposition " ) . SHR sold the 237 - room Marriott London Grosvenor Square hotel for £ 125.15 million ( approximately $ 207.7 million ) . The following unaudited pro forma financial information is presented as a result of the Grosvenor Disposition and gives effect to the following transactions : ( a ) the disposition of the Four Seasons Punta Mita Resort and an adjacent 48 - acre land parcel commonly referred to as La Solana on February 28 , 2014 and ( b ) the disposition of the Marriott London Grosvenor Square hotel on March 31 , 2014 . The historical financial information as of December 31 , 2013 and for the year then ended has been derived from SHR 's audited financial statements included in its Annual Report on Form 10 - K for the year ended December 31 , 2013 . The unaudited pro forma balance sheet data as of December 31 , 2013 is presented as if the Grosvenor Disposition had occurred on December 31 , 2013 . The unaudited pro forma statement of operations data for the year ended December 31 , 2013 is presented as if the Grosvenor Disposition had occurred on January 1 , 2013 . The unaudited pro forma financial information is presented for informational purposes only and does not purport to represent what SHR 's results of operations would actually have been if the transaction had in fact occurred on the earlier date discussed above . It also does not project or forecast SHR 's consolidated results of operation for any future date or period . Strategic Hotels & Resorts , Inc . Unaudited Pro Forma Consolidated Balance Sheet December 31 , 2013 ( In thousands ) Strategic Hotels & Resorts , Inc . Historical Consolidated Previously Filed Pro Forma Information ( 1 ) Strategic Hotels & Resorts , Inc . Pro Forma Grosvenor Disposition ( 2a ) Strategic Hotels & Resorts , Inc . Pro Forma Consolidated Assets Investment in hotel properties , net $ 1,795,338 $ 1,795,338 $ ( 62,753 ) $ 1,732,585 Goodwill 38,128 38,128 38,128 Intangible assets , net 29,502 29,502 ( 28,845 ) 657 Assets held for sale 135,901 ( 135,901 ) - - Investment in unconsolidated affiliates 104,973 104,973 104,973 Cash and cash equivalents 73,655 183,179 256,834 ( 5,168 ) 347,822 96,156 ( 2b ) Restricted cash and cash equivalents 75,916 75,916 ( 4,033 ) 71,883 Accounts receivable , net 39,660 39,660 ( 1,179 ) 38,481 Deferred financing costs , net 8,478 8,478 ( 386 ) 8,092 Prepaid expenses and other assets 35,600 35,600 ( 4,636 ) 30,964 Total assets $ 2,337,151 $ 47,278 $ 2,384,429 $ ( 10,844 ) $ 2,373,585 Liabilities , Noncontrolling Interests and Equity Liabilities : Mortgages and other debt payable $ 1,163,696 $ 1,163,696 $ ( 115,958 ) $ 1,047,738 Bank credit facility 110,000 110,000 110,000 Liabilities of assets held for sale 17,027 ( 17,027 ) - - Accounts payable and accrued expenses 189,889 189,889 ( 3,944 ) 185,945 Deferred tax liabilities 46,137 46,137 46,137 Total liabilities 1,526,749 ( 17,027 ) 1,509,722 ( 119,902 ) 1,389,820 Commitments and contingencies Non controlling interests in SHR 's operating partnership 7,534 7,534 7,534 Equity : SHR 's shareholders ' equity : 8 . 50 % Series A Cumulative Redeemable Preferred Stock 99,995 99,995 99,995 8 . 25 % Series B Cumulative Redeemable Preferred Stock 87,064 87,064 87,064 8 . 25 % Series C Cumulative Redeemable Preferred Stock 92,489 92,489 92,489 Common stock 2,056 2,056 2,056 Additional paid - in capital 1,705,306 1,705,306 1,705,306 Accumulated deficit ( 1,234,952 ) 64,305 ( 1,170,647 ) 92,923 ( 2c ) ( 1,077,724 ) Accumulated other comprehensive loss ( 41,445 ) ( 41,445 ) 16,135 ( 25,310 ) Total SHR 's shareholders ' equity 710,513 64,305 774,818 109,058 883,876 Non controlling interests in consolidated affiliates 92,355 92,355 92,355 Total equity 802,868 64,305 867,173 109,058 976,231 Total liabilities , non controlling interests and equity $ 2,337,151 $ 47,278 $ 2,384,429 $ ( 10,844 ) $ 2,373,585 Notes to Unaudited Pro Forma Consolidated Balance Sheet as of December 31 , 2013 1 . Previously Filed Pro Forma Information - The pro forma adjustments filed on SHR 's March 6 , 2014 Form 8 - K were made to account for the disposition of the Four Seasons Punta Mita Resort and the La Solana land parcel for net proceeds of approximately $ 183.2 million on February 28 , 2014 . 2 . Grosvenor Disposition - On March 31 , 2014 , SHR disposed of its ownership interests in the Marriott London Grosvenor Square hotel . The following unaudited pro forma adjustments were made to account for this transaction : a ) Reflects the elimination of consolidated accounts related to the Marriott London Grosvenor Square hotel . b ) Reflects the net proceeds from the Grosvenor Disposition of approximately $ 96.2 million . c ) Reflects a $ 92.9 million gain related to the Grosvenor Disposition . Strategic Hotels & Resorts , Inc . Unaudited Pro Forma Consolidated Statement of Operations For the Year Ended December 31 , 2013 ( in thousands , except per share amounts ) Strategic Hotels & Resorts , Inc . Historical Consolidated Previously Filed Pro Forma Information ( 1 ) Strategic Hotels & Resorts , Inc . Pro Forma Grosvenor Disposition ( 2 ) Strategic Hotels & Resorts , Inc . Pro Forma Consolidated Revenues : Rooms $ 506,348 $ 506,348 $ ( 26,614 ) $ 479,734 Food and beverage 294,969 294,969 ( 7,412 ) 287,557 Other hotel operating revenue 93,535 93,535 ( 2,180 ) 91,355 Lease revenue 5,161 5,161 5,161 Total revenues 900,013 900,013 ( 36,206 ) 863,807 Operating Costs and Expenses : Rooms 144,464 144,464 ( 5,518 ) 138,946 Food and beverage 225,213 225,213 ( 3,825 ) 221,388 Other departmental expenses 220,523 220,523 ( 6,809 ) 213,714 Management fees 27,126 27,126 ( 2,126 ) 25,000 Other hotel expenses 60,618 60,618 ( 2,183 ) 58,435 Lease expense 4,818 4,818 4,818 Depreciation and amortization 101,943 101,943 ( 5,231 ) 96,712 Impairment losses and other charges 728 728 728 Corporate expenses 25,807 25,807 ( 631 ) 25,176 Total operating costs and expenses 811,240 811,240 ( 26,323 ) 784,917 Operating income 88,773 88,773 ( 9,883 ) 78,890 Interest expense ( 84,276 ) ( 84,276 ) 7,087 ( 77,189 ) Interest income 59 59 ( 6 ) 53 Equity in earnings of unconsolidated affiliates 2,987 2,987 2,987 Foreign currency exchange gain 44 44 ( 2 ) 42 Other expenses , net ( 314 ) ( 314 ) ( 314 ) Income before income taxes 7,273 7,273 ( 2,804 ) 4,469 Income tax expense ( 557 ) ( 557 ) 401 ( 156 ) Income from continuing operations $ 6,716 $ 6,716 $ ( 2,403 ) $ 4,313 Amounts Attributable to SHR : Income from continuing operations $ 7,804 $ 7,804 $ ( 2,403 ) $ 5,401 Loss from continuing operations attributable to SHR common shareholders per share : Basic : $ ( 0 . 08 ) $ ( 0 . 08 ) $ ( 0 . 09 ) ( 3 ) Diluted : $ ( 0 . 08 ) $ ( 0 . 08 ) $ ( 0 . 09 ) ( 3 ) Notes to Unaudited Pro Forma Consolidated Statement of Operations For the Year Ended December 31 , 2013 1 . Previously Filed Pro Forma Information - The pro forma adjustments filed on SHR 's March 6 , 2014 Form 8 - K were made to account for the disposition of the Four Seasons Punta Mita Resort and the La Solana land parcel for net proceeds of approximately $ 183.2 million on February 28 , 2014 . 2 . Grosvenor Disposition - On March 31 , 2014 , SHR disposed of its ownership interest in the Marriott London Grosvenor Square hotel . The consolidated accounts related to the Marriott London Grosvenor Square hotel are reflected as pro forma adjustments to eliminate accounts from continuing operations . There are no pro forma adjustments for nonrecurring items related to this transaction , including the anticipated gain on the Grosvenor Disposition , which will be recognized in discontinued operations in the first quarter of 2014 . 3 . Loss From Continuing Operations Attributable to SHR Common Shareholders Per Share Calculation - The following table calculates the pro forma weighted average basic and diluted loss from continuing operations attributable to SHR common shareholders per share : ( In thousands , except per share amounts ) Basic Diluted Historical and pro forma basic and diluted weighted average shares outstanding for the year ended December 31 , 2013 206,334 206,334 Pro forma income from continuing operations attributable to SHR for the year ended December 31 , 2013 $ 5,401 $ 5,401 Historical preferred shareholder dividend ( 24,166 ) ( 24,166 ) Pro forma loss from continuing operations attributable to SHR common shareholders for the year ended December 31 , 2013 $ ( 18,765 ) $ ( 18,765 ) Pro forma loss from continuing operations attributable to SHR common shareholders per share for the year ended December 31 , 2013 - basic and diluted $ ( 0 . 09 ) $ ( 0 . 09 )