Strategic Hotel Capital, Inc. today reported results for the second quarter ended June 30, 2005.

• 
  SAVE
• 
  SHARE
• 
  TEXT SIZE
• 
  PRINT
• 
  COMMENT
• 
  PDF

. October 14, 2008

CHICAGO, IL, August 3, 2005. Highlights:

• Increase of 8.5 percent in North American Total RevPAR, driven by a 7.8 percent increase in non-room revenue and 7.2 percent increase in average daily rate. North American same store Total RevPAR, which excludes acquisitions held under one year, grew 7.0 percent.

• Net income available to common shareholders of $4.0 million or $0.13 per diluted share.

• Quarterly adjusted EBITDA of $34.8 million.

• Quarterly FFO of $0.50 per fully converted share.

• Executed $200 million in five and seven-year interest rate swaps, in addition to the issuance of $202 million in floating rate secured debt financing used to fund the purchase of the InterContinental hotels in Chicago and Miami.

• Increased the bank credit facility from $120 million to $175 million subsequent to the close of the quarter.

• Entered into an agreement to acquire the Fairmont Chicago hotel for a purchase price of $154.7 million subsequent to the close of the quarter.

Due to the company's restructuring at its IPO in June 2004, fiscal year and period-over-period comparisons are not representative of performance. "Same store" hotel comparisons are derived from the company's portfolio at June 30, 2005, that excludes properties held for less than one year (the Ritz- Carlton Half Moon Bay, which was acquired in August 2004, the InterContinental Chicago and InterContinental Miami, both acquired on April 1, 2005), and eliminating the effects of the Hyatt Regency New Orleans lease that was in existence prior to the IPO and the seven hotels owned by SHC LLC prior to the IPO.

Laurence Geller, chief executive officer of Strategic Hotel Capital, commented, "Once again, our strong operating results for the quarter put our FFO and adjusted EBITDA at the high end of our guidance range. A weak market and performance at the Hyatt New Orleans mitigated the continued strong double digit RevPAR growth in half of our North American properties. Our recently announced plan to acquire the Fairmont Chicago reaffirms our goal to grow a portfolio of well located hotels with intrinsic real estate value in strengthening vibrant markets."

Operating Results

Net income available to common shareholders was $4.0 million or $0.13 per diluted share and $10.7 million or $0.35 per diluted share for the second quarter and year-to-date respectively. Adjusted EBITDA was $34.8 million for the quarter and $63.0 million for the six-month period.

Funds from operations of $0.50 per fully converted share in the second quarter and $0.98 per fully converted share year-to-date. "Fully converted" per share results represent funds from operations before operating partnership minority interest adjustments, divided by the total number of shares and operating partnership units convertible into shares.

Including the company's recently acquired InterContinental Chicago, InterContinental Miami and the Ritz Carlton Half Moon Bay, the North American portfolio Total RevPAR, which includes revenues from food and beverage and other sources in addition to rooms, increased 8.5 percent during the quarter over the prior period in 2004. RevPAR increased 8.9 percent to $123.77 during the quarter, due primarily to a 7.2 percent increase in ADR and 1.6 percent increase in occupancy.

North American same store Total RevPAR, increased 7.0 percent in the second quarter over the prior period of 2004. Same store RevPAR increased 5.1 percent to $114.21, driven by a 5.8 percent increase in average daily rate. Same store North American EBITDA margins for the quarter increased by 67 basis points over the prior period in 2004.

Overall portfolio performance was negatively impacted by a 19.7 percent reduction in RevPAR at the Hyatt Regency New Orleans, primarily attributable to cancellation of certain group business bookings and a reduced amount of transient business during the quarter. Excluding the Hyatt Regency New Orleans, North American Total RevPAR growth was 11.5 percent and RevPAR growth was 14.1 percent, and same store Total RevPAR increased by 11.4 percent with RevPAR growth of 12.1 percent. EBITDA margins excluding Hyatt Regency New Orleans improved by 160 basis points over the same period in 2004.

For the European hotels, RevPAR for the second quarter increased by 8.7 percent over the second quarter of 2004 due primarily to a 12.7 percent increase in ADR. RevPAR increased 9.1 percent year-to-date. Operating results were positively impacted by foreign currency exchange rate fluctuations.