BEE reports strong financial results; settles New Orleans insurance claim; acquires boutique Paris hotel; agrees to joint venture with GIC; and reaffirms full-year guidance
Strategic Hotels & Resorts (NYSE: BEE) today reported results for the second quarter ended June 30, 2007.
Second Quarter Financial Highlights & Events
• Comparable funds from operations (FFO) was $0.53 per diluted share, an increase of 26 percent over $0.42 in the prior year. Residential activity contributed a total of $3.8 million to FFO or $0.05 per diluted share.
• Quarterly Comparable EBITDA was $79.0 million, an increase of 6
• 1 percent over $48.9 million in the prior year. Residential activity contributed a total of $6.4 million to EBITDA.
• North American same store total revenue per available room (Total RevPAR) increased 8.7 percent and revenue per available room (RevPAR) increased 8.2 percent. Growth was driven by an 8.1 percent increase in the average daily rate (ADR).
• Total North American Total RevPAR increased 6.6 percent and RevPAR increased 6.4 percent. Growth was driven by a 6.8 percent increase in ADR.
• Total North American gross operating profit margins expanded 150 basis points. North American same store EBITDA margins contracted 40 basis points.
• Total European Total RevPAR increased 15.4 percent and RevPAR increased 14.7 percent, driven by a 17.6 percent increase in ADR.
• The company closed on an offering of $180 million of 3.50 percent exchangeable senior notes due 2012. Net proceeds from the sale of the notes were approximately $175.9 million, after deducting the initial purchasers' discounts and commissions and offering expenses. In connection with the offering, the company used approximately $9.9 million of net proceeds to enter into a capped call transaction to increase the effective exchange premium of the notes from 20 percent to 40 percent, and separately repurchased approximately $25 million of common stock.
• The company entered into a joint venture agreement with the real estate investment company of the Government of Singapore Investment Corporation Pte Ltd. (GIC RE). Under the agreement, GIC RE's affiliate will acquire a 49 percent interest in the company's InterContinental Chicago and Hyatt Regency La Jolla hotels. Additionally, the joint venture will enter into a long-term asset management and other services agreements with Strategic Hotels & Resorts. The transaction, with a gross aggregate value of $450 million, is expected to close during the third quarter.
• The company amended its $415 million revolving credit facility increasing the capacity to $500 million.
