Strategic Hotels & Resorts Inc. (BEE, Financial) filed Quarterly Report for the period ended 2009-03-31.
STRATEGIC HOTELS & RESORTS INC. is a real estate investment trust 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 8346 rooms Strategic Hotels & Resorts Inc. has a market cap of $94.5 million; its shares were traded at around $1.26 with a P/E ratio of 1 and P/S ratio of 0.1.
Amendment to Bank Credit Facility. In February 2009, we entered into an amended bank credit facility agreement. This amendment, among other things, provides us with additional flexibility with respect to our financial covenants and related financial calculations, reduces the facility size from $500.0 million to $400.0 million and increases the interest rate from LIBOR plus a margin of 0.80% to 1.50% to LIBOR plus a margin of 3.75%. See Liquidity and Capital Resources for further detail regarding the amended bank credit facility.
Other Hotel Operating Revenue. For the Total Portfolio, other hotel operating revenue decreased $1.4 million, or 5.0%, for the three months ended March 31, 2009 from the three months ended March 31, 2008. The decline in occupancy at the hotels has resulted in overall decreases in ancillary revenues at the hotels, including spa and retail revenues. In addition, there was a decrease in fees earned from the villa rental program at the Four Seasons Punta Mita Resort due to the weak economy. These decreases were partially offset by a $5.0 million increase in cancellation fees received primarily at the Fairmont Scottsdale Princess, Westin St. Francis, and Ritz-Carlton Half Moon Bay hotels.
Impairment Losses and Other Charges. For the three months ended March 31, 2009, we recorded a charge of $0.2 million to write off our investment in LLPI. We plan to exit the LLPI venture and are currently negotiating the terms thereof. In addition, we abandoned several capital projects due to unfavorable market conditions and recorded a charge of approximately $0.3 million to write off capitalized costs related to these projects.
Corporate Expenses. Corporate expenses increased $3.0 million, or 40.3% for the three months ended March 31, 2009 when compared to the same period in 2008. These expenses consist primarily of payroll and related costs, professional fees, travel expenses and office rent. The overall increase in corporate expenses is attributable to a charge of approximately $3.6 million related to the acceleration of vesting of certain RSUs issued prior to December 31, 2008, partially offset by a decrease in salaries, payroll taxes, and benefits due to lower headcount at the corporate office.
Read the The complete ReportBEE is in the portfolios of Bill Gates of Cascade Investment, LLC, Kenneth Fisher of Fisher Asset Management, LLC, Kenneth Fisher of Fisher Asset Management, LLC.
STRATEGIC HOTELS & RESORTS INC. is a real estate investment trust 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 8346 rooms Strategic Hotels & Resorts Inc. has a market cap of $94.5 million; its shares were traded at around $1.26 with a P/E ratio of 1 and P/S ratio of 0.1.
Highlight of Business Operations:
Lease expense. As a result of sale and leaseback transactions applicable to the Paris Marriott and Marriott Hamburg hotels, we recorded lease expense in our statements of operations. In conjunction with the sale and leaseback transactions, we also recorded a deferred gain. Net lease expense includes an offset for the amortization of the deferred gain of $1.2 million and $1.3 million for the three months ended March 31, 2009 and 2008, respectively.Amendment to Bank Credit Facility. In February 2009, we entered into an amended bank credit facility agreement. This amendment, among other things, provides us with additional flexibility with respect to our financial covenants and related financial calculations, reduces the facility size from $500.0 million to $400.0 million and increases the interest rate from LIBOR plus a margin of 0.80% to 1.50% to LIBOR plus a margin of 3.75%. See Liquidity and Capital Resources for further detail regarding the amended bank credit facility.
Other Hotel Operating Revenue. For the Total Portfolio, other hotel operating revenue decreased $1.4 million, or 5.0%, for the three months ended March 31, 2009 from the three months ended March 31, 2008. The decline in occupancy at the hotels has resulted in overall decreases in ancillary revenues at the hotels, including spa and retail revenues. In addition, there was a decrease in fees earned from the villa rental program at the Four Seasons Punta Mita Resort due to the weak economy. These decreases were partially offset by a $5.0 million increase in cancellation fees received primarily at the Fairmont Scottsdale Princess, Westin St. Francis, and Ritz-Carlton Half Moon Bay hotels.
Impairment Losses and Other Charges. For the three months ended March 31, 2009, we recorded a charge of $0.2 million to write off our investment in LLPI. We plan to exit the LLPI venture and are currently negotiating the terms thereof. In addition, we abandoned several capital projects due to unfavorable market conditions and recorded a charge of approximately $0.3 million to write off capitalized costs related to these projects.
Corporate Expenses. Corporate expenses increased $3.0 million, or 40.3% for the three months ended March 31, 2009 when compared to the same period in 2008. These expenses consist primarily of payroll and related costs, professional fees, travel expenses and office rent. The overall increase in corporate expenses is attributable to a charge of approximately $3.6 million related to the acceleration of vesting of certain RSUs issued prior to December 31, 2008, partially offset by a decrease in salaries, payroll taxes, and benefits due to lower headcount at the corporate office.
Read the The complete ReportBEE is in the portfolios of Bill Gates of Cascade Investment, LLC, Kenneth Fisher of Fisher Asset Management, LLC, Kenneth Fisher of Fisher Asset Management, LLC.
