Strategic Hotels & Resorts Inc. (BEE, Financial) filed Annual Report for the period ended 2011-12-31.
Strategic Hotel has a market cap of $1.17 billion; its shares were traded at around $6.5 with a P/E ratio of 78.9 and P/S ratio of 1.7.
The fourth quarter of 2011 represented the eighth consecutive quarter of demand growth and seventh consecutive quarter of RevPAR growth and profit margin expansion for our North American portfolio. Same Store Assets (see Total Portfolio and Same Store Asset Definitions below) located in North America, which excludes hotels acquired in 2011 and hotels owned through unconsolidated affiliates, gained 2.1 percentage points in occupancy, driven by an 8.8% increase in group room nights compared to the quarter ended December 31, 2010. ADR at our hotels increased a strong 6.4% in the quarter, as a result of a 7.6% increase in group rate and a 6.0% increase in transient rate. For the quarter, RevPAR increased 9.8% and Total RevPAR increased 9.0%.
Food and Beverage. Food and beverage revenue increased $28.4 million, or 11.9%, for the Total Portfolio when comparing the year ended December 31, 2011 to the year ended December 31, 2010. Our Same Store Assets contributed to a $25.3 million, or 12.0%, increase in food and beverage revenue. The primary factor increasing food and beverage revenue at the Same Store Assets was an increase in group occupancy, which generated higher banquet revenue when compared to the prior year, and increased revenue at the hotels food and beverage outlets, which included increased revenues at the Westin St. Francis hotel resulting from a change in the terms of a restaurant agreement, and the opening of the Michael Jordan Steakhouse at the InterContinental Chicago hotel. The increase in Total Portfolio food and beverage revenue also includes $15.0 million of additional revenue generated by the Four Seasons Silicon Valley and the Four Seasons Jackson Hole hotels, which we acquired in March 2011. These increases in Total Portfolio food and beverage revenue were partially offset by an $11.8 million decrease in food and beverage revenue related to the Fairmont Scottsdale Princess hotel, which became an unconsolidated affiliate in the second quarter of 2011.
In the second quarter of 2010, we completed a common stock offering and raised net proceeds of approximately $331.8 million. These proceeds were used to fund our tender offer for Exchangeable Notes and repay existing indebtedness under the previous bank credit facility. In the fourth quarter of 2010, we sold the InterContinental Prague hotel to a buyer who assumed the mortgage debt and related interest rate swap liability. The transaction resulted in net sales proceeds of $3.6 million. On March 11, 2011, we acquired the Four Seasons Silicon Valley and the Four Seasons Jackson Hole hotels in exchange for an aggregate of 15.2 million shares of our common stock at a price of $6.08 per share based on our March 11, 2011 common share closing price and concurrently privately placed and issued an additional 8.0 million shares of our stock to an affiliate of the seller of the two hotels at a price of $6.25 per share. The net proceeds from the concurrent private placement were used to repay existing indebtedness under the previous bank credit facility. On April 6, 2011, we sold our leasehold interest in the Paris Marriott hotel for consideration of 29.2 million ($41.6 million) and received an additional 11.9 million ($16.9 million) related to a security deposit that was released back to us and other closing adjustments. In July 2011, we refinanced certain of our mortgage loans whereby we staggered and extended maturities from 2016 through 2021, assuming extension options are excercised (see Mortgages and other debt payable below). We believe that the measures we have taken, as described above, should be sufficient to satisfy our liquidity needs for the next 12 months.
We own a 31.0% interest in and act as asset manager for a venture with two unaffiliated parties that is developing the Four Seasons RCPM, a luxury vacation home product sold in fractional ownership interests on the property adjacent to our Four Seasons Punta Mita Resort hotel in Mexico. We account for this investment under the equity method of accounting. At December 31, 2011 and December 31, 2010, our investment in the unconsolidated affiliate amounted to $3.8 million and $3.9 million, respectively. Our equity in (losses) earnings of the unconsolidated affiliate was $(0.1) million and $0.3 million for the years ended December 31, 2011 and 2010, respectively.
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Strategic Hotel has a market cap of $1.17 billion; its shares were traded at around $6.5 with a P/E ratio of 78.9 and P/S ratio of 1.7.
Highlight of Business Operations:
We incurred net losses of $4.9 million, $230.8 million, $246.4 million and $317.5 million for our 2011, 2010, 2009 and 2008 fiscal years, respectively. The recent economic downturn has negatively impacted business and leisure travel leading to a reduction in revenues at our hotel properties. The slow rate of the fragile economic recovery or a further decline in economic conditions will likely produce continued losses. There can be no assurance that we will resume profitable operations and generate net income for our stockholders in the near term or at all.The fourth quarter of 2011 represented the eighth consecutive quarter of demand growth and seventh consecutive quarter of RevPAR growth and profit margin expansion for our North American portfolio. Same Store Assets (see Total Portfolio and Same Store Asset Definitions below) located in North America, which excludes hotels acquired in 2011 and hotels owned through unconsolidated affiliates, gained 2.1 percentage points in occupancy, driven by an 8.8% increase in group room nights compared to the quarter ended December 31, 2010. ADR at our hotels increased a strong 6.4% in the quarter, as a result of a 7.6% increase in group rate and a 6.0% increase in transient rate. For the quarter, RevPAR increased 9.8% and Total RevPAR increased 9.0%.
Food and Beverage. Food and beverage revenue increased $28.4 million, or 11.9%, for the Total Portfolio when comparing the year ended December 31, 2011 to the year ended December 31, 2010. Our Same Store Assets contributed to a $25.3 million, or 12.0%, increase in food and beverage revenue. The primary factor increasing food and beverage revenue at the Same Store Assets was an increase in group occupancy, which generated higher banquet revenue when compared to the prior year, and increased revenue at the hotels food and beverage outlets, which included increased revenues at the Westin St. Francis hotel resulting from a change in the terms of a restaurant agreement, and the opening of the Michael Jordan Steakhouse at the InterContinental Chicago hotel. The increase in Total Portfolio food and beverage revenue also includes $15.0 million of additional revenue generated by the Four Seasons Silicon Valley and the Four Seasons Jackson Hole hotels, which we acquired in March 2011. These increases in Total Portfolio food and beverage revenue were partially offset by an $11.8 million decrease in food and beverage revenue related to the Fairmont Scottsdale Princess hotel, which became an unconsolidated affiliate in the second quarter of 2011.
In the second quarter of 2010, we completed a common stock offering and raised net proceeds of approximately $331.8 million. These proceeds were used to fund our tender offer for Exchangeable Notes and repay existing indebtedness under the previous bank credit facility. In the fourth quarter of 2010, we sold the InterContinental Prague hotel to a buyer who assumed the mortgage debt and related interest rate swap liability. The transaction resulted in net sales proceeds of $3.6 million. On March 11, 2011, we acquired the Four Seasons Silicon Valley and the Four Seasons Jackson Hole hotels in exchange for an aggregate of 15.2 million shares of our common stock at a price of $6.08 per share based on our March 11, 2011 common share closing price and concurrently privately placed and issued an additional 8.0 million shares of our stock to an affiliate of the seller of the two hotels at a price of $6.25 per share. The net proceeds from the concurrent private placement were used to repay existing indebtedness under the previous bank credit facility. On April 6, 2011, we sold our leasehold interest in the Paris Marriott hotel for consideration of 29.2 million ($41.6 million) and received an additional 11.9 million ($16.9 million) related to a security deposit that was released back to us and other closing adjustments. In July 2011, we refinanced certain of our mortgage loans whereby we staggered and extended maturities from 2016 through 2021, assuming extension options are excercised (see Mortgages and other debt payable below). We believe that the measures we have taken, as described above, should be sufficient to satisfy our liquidity needs for the next 12 months.
We own a 31.0% interest in and act as asset manager for a venture with two unaffiliated parties that is developing the Four Seasons RCPM, a luxury vacation home product sold in fractional ownership interests on the property adjacent to our Four Seasons Punta Mita Resort hotel in Mexico. We account for this investment under the equity method of accounting. At December 31, 2011 and December 31, 2010, our investment in the unconsolidated affiliate amounted to $3.8 million and $3.9 million, respectively. Our equity in (losses) earnings of the unconsolidated affiliate was $(0.1) million and $0.3 million for the years ended December 31, 2011 and 2010, respectively.
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