STRATEGIC HOTELS & RESORTS, INC - FORM 8-K - EX-99.2 - EXHIBIT 99.2

Attached files

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8-K - 8-K - STRATEGIC HOTELS & RESORTS, INC	a1231138kpressrelease.htm
EX-99.1 - EXHIBIT 99.1 ATTACHMENTS - STRATEGIC HOTELS & RESORTS, INC	a123113exhibit991b-pressre.htm
EX-99.1 - EXHIBIT 99.1 - STRATEGIC HOTELS & RESORTS, INC	a123113exhibit991a-pressre.htm

Exhibit 99.2

Strategic Hotels & Resorts, Inc.

Supplemental Financial Information

December 31, 2013




		Supplemental Financial Information
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)		December 31, 2013

TABLE OF CONTENTS




	PAGE
CORPORATE INFORMATION
The Company	1
Board of Directors	2
Officers	3
Equity Research Coverage	4

FINANCIAL HIGHLIGHTS
Supplemental Financial Data	5
Consolidated Statements of Operations	6
Consolidated Balance Sheets	7
Discontinued Operations	8
Investments in Unconsolidated Affiliates	9
Leasehold Information	11
Non-GAAP Financial Measures	12
Reconciliation of Net Income (Loss) Attributable to SHR Common Shareholders to EBITDA and Comparable EBITDA	13
Reconciliation of Net Income (Loss) Attributable to SHR Common Shareholders to Funds From Operations (FFO), FFO—Fully Diluted and Comparable FFO	14
Debt Summary	15

PORTFOLIO DATA
Portfolio at December 31, 2013	16
Seasonality by Geographic Region	17
Operating Statistics by Geographic Region	18
Selected Financial and Operating Information by Property	19
Reconciliation of Property EBITDA to EBITDA	24
Reconciliation of Property EBITDA to Comparable EBITDA	25
2014 Guidance	26




		Supplemental Financial Information
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)		December 31, 2013

CORPORATE INFORMATION

The Company

Strategic Hotels & Resorts, Inc. is an industry-leading owner and asset manager of high-end hotels and resorts. We own interests in or lease a quality portfolio of upper upscale and luxury hotels and resorts in desirable North American and European locations. Our portfolio is currently made up of 18 properties totaling 8,272 rooms. We own interests in or lease unique hotels with complex operations, sophisticated customers and multiple revenue streams. Our properties include large convention hotels, business hotels and resorts, which are managed by internationally recognized hotel management companies.

We believe our asset management expertise is what truly distinguishes us. Asset management is our focus, our core competency, and our competitive advantage. Our business is driven by our team’s depth of knowledge and hands-on expertise in every aspect of the lodging industry. While our focus is to drive top line revenues, we importantly focus on every component of bottom line profitability. We use our experience to make selective, value added acquisitions and recycle capital through thoughtful and planned dispositions. Simply put, we are utilizing our expert management skills in building a great hotel company which we believe will provide attractive returns for our shareholders.

Strategic Hotels & Resorts, Inc. is a real estate investment trust (REIT) and is traded on the New York Stock Exchange under the symbol BEE.

Fiscal Year End:

December 31

Number of Full-Time Equivalent Employees:

Corporate Headquarters:

200 West Madison Street, Suite 1700

Chicago, IL 60606

(312) 658-5000

Company Contacts:

Diane M. Morefield

Executive Vice President, Chief Financial Officer

(312) 658-5000

Jonathan P. Stanner

Vice President, Capital Markets and Treasurer

(312) 658-5000




		Supplemental Financial Information
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)		December 31, 2013

Board of Directors

Raymond L. Gellein, Jr.

Chairman of the Board, Chief Executive Officer and President

Sheli Z. Rosenberg

Lead Independent Director

Robert P. Bowen

Director and Chairman of the Audit Committee

James A. Jeffs

Director and Chairman of the Compensation Committee

William A. Prezant

Director and Chairman of the Corporate Governance and Nominating Committee

Kenneth Fisher

Director

Richard D. Kincaid

Director

Sir David M.C. Michels

Director

Eugene F. Reilly

Director




		Supplemental Financial Information
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)		December 31, 2013

Officers

Raymond L. Gellein, Jr.

Chief Executive Officer and President

Diane M. Morefield

Executive Vice President, Chief Financial Officer (Principal Financial Officer)

Richard J. Moreau

Executive Vice President, Chief Operating Officer

Paula C. Maggio

Executive Vice President, Secretary & General Counsel

Stephen M. Briggs

Senior Vice President, Chief Accounting Officer (Principal Accounting Officer)

John K.T. Barrett

Senior Vice President, Asset Management

Thomas G. Healy

Senior Vice President, Asset Management

David R. Hogin, Jr.

Senior Vice President, Asset Management

Robert T. McAllister

Senior Vice President, Tax

Patricia A. Needham

Senior Vice President, Assistant Secretary

Gregory A. Brenner

Vice President, Controller

Michael A. Dalton

Vice President, Design

Eric D. Hassberger

Vice President, Asset Management

James L. Porter

Vice President, Internal Audit

Jonathan P. Stanner

Vice President, Capital Markets and Treasurer




		Supplemental Financial Information
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)		December 31, 2013

Equity Research Coverage




Firm	Analyst	Telephone

Bank of America Merrill Lynch	Andrew Didora	(646) 855-2924

Deutsche Bank North America	Chris Woronka	(212) 250-4486

Evercore Partners	Smedes Rose	(212) 497-0881

Green Street Advisors	Lukas Hartwich	(949) 640-8780

International Strategy & Investment Group, Inc.	Ian Weissman	(212) 446-9461

JMP Securities	Robert LaFleur	(415) 835-8944

J.P. Morgan Securities	Jonathan Mohraz	(212) 622-1111

MLV & Co	Ryan Meliker	(212) 542-5872

Raymond James & Associates	William Crow	(727) 567-2594

Wells Fargo Securities, LLC	Jeffrey Donnelly	(617) 603-4262

Strategic Hotels & Resorts, Inc. is followed by the analysts listed above. Please note that any opinions, estimates or forecasts regarding Strategic Hotels & Resorts, Inc.'s performance made by these analysts are theirs alone and do not represent opinions, forecasts or predictions of Strategic Hotels & Resorts, Inc. or its management. Strategic Hotels & Resorts, Inc. does not by its reference here imply its endorsement of, or concurrence with, such information, conclusions or recommendations.




		Supplemental Financial Information
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)		December 31, 2013

Financial Highlights

Supplemental Financial Data

(in thousands, except per share information)



	December 31, 2013
	Pro Rata Share			Consolidated
Capitalization
Shares of common stock outstanding	205,583			205,583
Operating partnership units outstanding	797			797
Restricted stock units outstanding	1,699			1,699
Combined shares and units outstanding	208,079			208,079
Common stock price at end of period	$	9.45		$	9.45
Common equity capitalization	$	1,966,347		$	1,966,347
Preferred equity capitalization (at $25.00 face value)	289,102			289,102
Consolidated debt	1,273,696			1,273,696
Pro rata share of unconsolidated debt	231,400			—
Pro rata share of consolidated debt	(132,794		)	—
Cash and cash equivalents	(73,655		)	(73,655		)
Total enterprise value	$	3,554,096		$	3,455,490
Net Debt / Total Enterprise Value	36.6		%	34.7		%
Preferred Equity / Total Enterprise Value	8.1		%	8.4		%
Common Equity / Total Enterprise Value	55.3		%	56.9		%



		Supplemental Financial Information
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)		Three Months and Years Ended December 31, 2013 and 2012

Consolidated Statements of Operations

(in thousands, except per share data)



	Three Months Ended December 31,						Years Ended December 31,
	2013			2012			2013			2012
Revenues:
Rooms	$	126,917		$	117,255		$	506,348		$	429,689
Food and beverage	81,426			73,483			294,969			264,893
Other hotel operating revenue	32,709			20,799			93,535			75,857
Lease revenue	1,385			1,273			5,161			4,778
Total revenues	242,437			212,810			900,013			775,217
Operating Costs and Expenses:
Rooms	36,160			33,288			144,464			121,794
Food and beverage	59,504			54,794			225,213			193,431
Other departmental expenses	56,226			55,189			220,523			200,219
Management fees	7,829			6,227			27,126			23,085
Other hotel expenses	15,239			15,221			60,618			53,117
Lease expense	1,234			1,155			4,818			4,580
Depreciation and amortization	24,507			26,055			101,943			99,458
Impairment losses and other charges	—			18,406			728			18,406
Corporate expenses	7,161			8,150			25,807			31,578
Total operating costs and expenses	207,860			218,485			811,240			745,668
Operating income (loss)	34,577			(5,675		)	88,773			29,549
Interest expense	(20,405		)	(16,862		)	(84,276		)	(75,489		)
Interest income	14			95			59			213
Equity in (losses) earnings of unconsolidated affiliates	(265		)	(11,431		)	2,987			(13,485		)
Foreign currency exchange gain (loss)	8			15			44			(1,258		)
Other (expenses) income, net	(359		)	455			(314		)	1,820
Income (loss) before income taxes and discontinued operations	13,570			(33,403		)	7,273			(58,650		)
Income tax expense	(153		)	(257		)	(557		)	(800		)
Income (loss) from continuing operations	13,417			(33,660		)	6,716			(59,450		)
Income from discontinued operations, net of tax	2,248			1,362			3,171			1,189
Net Income (Loss)	15,665			(32,298		)	9,887			(58,261		)
Net (income) loss attributable to the noncontrolling interests in SHR's operating partnership	(60		)	58			(38		)	184
Net (income) loss attributable to the noncontrolling interests in consolidated affiliates	(6,341		)	1,880			1,126			2,771
Net Income (Loss) Attributable to SHR	9,264			(30,360		)	10,975			(55,306		)
Preferred shareholder dividends	(6,041		)	(6,041		)	(24,166		)	(24,166		)
Net Income (Loss) Attributable to SHR Common Shareholders	$	3,223		$	(36,401	)	$	(13,191	)	$	(79,472	)
Basic Income (Loss) Per Share:
Income (loss) from continuing operations attributable to SHR common shareholders	$	0.01		$	(0.18	)	$	(0.08	)	$	(0.40	)
Income from discontinued operations attributable to SHR common shareholders	0.01			—			0.02			—
Net income (loss) attributable to SHR common shareholders	$	0.02		$	(0.18	)	$	(0.06	)	$	(0.40	)
Weighted average common shares outstanding	206,814			206,836			206,334			201,109
Diluted Income (Loss) Per Share:
Income (loss) from continuing operations attributable to SHR common shareholders	$	0.01		$	(0.18	)	$	(0.08	)	$	(0.40	)
Income from discontinued operations attributable to SHR common shareholders	0.01			—			0.02			—
Net income (loss) attributable to SHR common shareholders	$	0.02		$	(0.18	)	$	(0.06	)	$	(0.40	)
Weighted average common shares outstanding	208,986			206,836			206,334			201,109




		Supplemental Financial Information
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)		December 31, 2013 and 2012

Consolidated Balance Sheets

(in thousands, except share data)



	December 31,
	2013			2012
Assets
Investment in hotel properties, net	$	1,795,338		$	1,970,560
Goodwill	38,128			40,359
Intangible assets, net of accumulated amortization of $12,213 and $10,812	29,502			30,631
Assets held for sale	135,901			—
Investment in unconsolidated affiliates	104,973			112,488
Cash and cash equivalents	73,655			80,074
Restricted cash and cash equivalents	75,916			58,579
Accounts receivable, net of allowance for doubtful accounts of $1,745 and $1,602	39,660			45,620
Deferred financing costs, net of accumulated amortization of $12,354 and $7,049	8,478			11,695
Deferred tax assets	—			2,203
Prepaid expenses and other assets	35,600			54,208
Total assets	$	2,337,151		$	2,406,417
Liabilities, Noncontrolling Interests and Equity
Liabilities:
Mortgages and other debt payable	$	1,163,696		$	1,176,297
Bank credit facility	110,000			146,000
Liabilities of assets held for sale	17,027			—
Accounts payable and accrued expenses	189,889			228,397
Deferred tax liabilities	46,137			47,275
Total liabilities	1,526,749			1,597,969
Commitments and contingencies
Noncontrolling interests in SHR’s operating partnership	7,534			5,463
Equity:
SHR’s shareholders’ equity:
8.50% Series A Cumulative Redeemable Preferred Stock ($0.01 par value per share; 4,148,141 shares issued and outstanding; liquidation preference $25.00 per share plus accrued distributions and $103,704 in the aggregate)	99,995			99,995
8.25% Series B Cumulative Redeemable Preferred Stock ($0.01 par value per share; 3,615,375 shares issued and outstanding; liquidation preference $25.00 per share plus accrued distributions and $90,384 in the aggregate)	87,064			87,064
8.25% Series C Cumulative Redeemable Preferred Stock ($0.01 par value per share; 3,827,727 shares issued and outstanding; liquidation preference $25.00 per share plus accrued distributions and $95,693 in the aggregate)	92,489			92,489
Common stock ($0.01 par value per share; 350,000,000 shares of common stock authorized; 205,582,838 and 204,308,710 shares of common stock issued and outstanding)	2,056			2,043
Additional paid-in capital	1,705,306			1,730,535
Accumulated deficit	(1,234,952		)	(1,245,927		)
Accumulated other comprehensive loss	(41,445		)	(58,871		)
Total SHR’s shareholders’ equity	710,513			707,328
Noncontrolling interests in consolidated affiliates	92,355			95,657
Total equity	802,868			802,985
Total liabilities, noncontrolling interests and equity	$	2,337,151		$	2,406,417



		Supplemental Financial Information
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)		Three Months and Years Ended December 31, 2013 and 2012

Discontinued Operations

(in thousands)

The results of operations of hotels sold or held for sale are classified as discontinued operations and segregated in the consolidated statements of operations for all periods presented. On December 12, 2013, we entered into an agreement to sell the Four Seasons Punta Mita Resort and the adjacent La Solana land parcel for $200,000,000.

The following is a summary of income from discontinued operations for the three months and years ended December 31, 2013 and 2012 (in thousands):



	Three Months Ended December 31,						Years Ended December 31,
	2013			2012			2013			2012
Hotel operating revenues	$	12,300		$	11,262		$	37,964		$	33,100
Operating costs and expenses	9,061			8,010			30,203			26,909
Depreciation and amortization	1,052			993			4,075			4,006
Impairment losses and other charges	—			437			—			437
Total operating costs and expenses	10,113			9,440			34,278			31,352
Operating income	2,187			1,822			3,686			1,748
Interest income	—			—			—			4
Foreign currency exchange (loss) gain	(142		)	79			(1		)	(352		)
Other income, net	375			—			375			—
Income tax expense	(172		)	(539		)	(889		)	(211		)
Income from discontinued operations	$	2,248		$	1,362		$	3,171		$	1,189



		Supplemental Financial Information
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)		Three Months and Years Ended December 31, 2013 and 2012

Investments in Unconsolidated Affiliates

(in thousands)

We have a 36.4% and 50% ownership interest in the Hotel del Coronado and the Fairmont Scottsdale Princess hotel, respectively. We account for these investments using the equity method of accounting.



	Three Months Ended December 31, 2013									Three Months Ended December 31, 2012
	Hotel del Coronado			Fairmont Scottsdale Princess			Total			Hotel del Coronado			Fairmont Scottsdale Princess			Total
Total revenues (100%)	$	33,115		$	23,634		$	56,749		$	29,888		$	20,546		$	50,434
Property EBITDA (100%)	$	8,668		$	4,111		$	12,779		$	7,201		$	3,034		$	10,235
Equity in (losses) earnings of unconsolidated affiliates (SHR ownership)
Property EBITDA	$	3,153		$	2,056		$	5,209		$	2,491		$	1,517		$	4,008
Depreciation and amortization	(1,917		)	(1,565		)	(3,482		)	(1,797		)	(1,823		)	(3,620		)
Interest expense	(1,941		)	(193		)	(2,134		)	(2,549		)	(189		)	(2,738		)
Other expenses, net	(14		)	(23		)	(37		)	(7,869		)	(111		)	(7,980		)
Income taxes	85			—			85			90			—			90
Equity in (losses) earnings of unconsolidated affiliates	$	(634	)	$	275		$	(359	)	$	(9,634	)	$	(606	)	$	(10,240	)
EBITDA Contribution:
Equity in (losses) earnings of unconsolidated affiliates	$	(634	)	$	275		$	(359	)	$	(9,634	)	$	(606	)	$	(10,240	)
Depreciation and amortization	1,917			1,565			3,482			1,797			1,823			3,620
Termination fee	—			—			—			7,820			—			7,820
Interest expense	1,941			193			2,134			2,549			189			2,738
Income taxes	(85		)	—			(85		)	(90		)	—			(90		)
EBITDA Contribution	$	3,139		$	2,033		$	5,172		$	2,442		$	1,406		$	3,848
FFO Contribution:
Equity in (losses) earnings of unconsolidated affiliates	$	(634	)	$	275		$	(359	)	$	(9,634	)	$	(606	)	$	(10,240	)
Depreciation and amortization	1,917			1,565			3,482			1,797			1,823			3,620
Termination fee	—			—			—			7,820			—			7,820
FFO Contribution	$	1,283		$	1,840		$	3,123		$	(17	)	$	1,217		$	1,200



	Year Ended December 31, 2013									Year Ended December 31, 2012
	Hotel del Coronado			Fairmont Scottsdale Princess			Total			Hotel del Coronado			Fairmont Scottsdale Princess			Total
Total revenues (100%)	$	148,482		$	93,133		$	241,615		$	140,220		$	77,281		$	217,501
Property EBITDA (100%)	$	47,155		$	18,883		$	66,038		$	40,722		$	12,777		$	53,499
Equity in earnings (losses) of unconsolidated affiliates (SHR ownership)
Property EBITDA	$	17,152		$	9,442		$	26,594		$	13,989		$	6,389		$	20,378
Depreciation and amortization	(7,564		)	(6,570		)	(14,134		)	(6,895		)	(7,145		)	(14,040		)
Interest expense	(8,325		)	(778		)	(9,103		)	(10,093		)	(778		)	(10,871		)
Other expenses, net	(242		)	(58		)	(300		)	(7,931		)	(155		)	(8,086		)
Income taxes	(191		)	—			(191		)	383			—			383
Equity in earnings (losses) of unconsolidated affiliates	$	830		$	2,036		$	2,866		$	(10,547	)	$	(1,689	)	$	(12,236	)
EBITDA Contribution
Equity in earnings (losses) of unconsolidated affiliates	$	830		$	2,036		$	2,866		$	(10,547	)	$	(1,689	)	$	(12,236	)
Depreciation and amortization	7,564			6,570			14,134			6,895			7,145			14,040
Termination fee	—			—			—			7,820			—			7,820
Interest expense	8,325			778			9,103			10,093			778			10,871
Income taxes	191			—			191			(383		)	—			(383		)
EBITDA Contribution	$	16,910		$	9,384		$	26,294		$	13,878		$	6,234		$	20,112
FFO Contribution
Equity in earnings (losses) of unconsolidated affiliates	$	830		$	2,036		$	2,866		$	(10,547	)	$	(1,689	)	$	(12,236	)
Depreciation and amortization	7,564			6,570			14,134			6,895			7,145			14,040
Termination fee	—			—			—			7,820			—			7,820
FFO Contribution	$	8,394		$	8,606		$	17,000		$	4,168		$	5,456		$	9,624



		Supplemental Financial Information
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)		Three Months and Years Ended December 31, 2013 and 2012

Investments in Unconsolidated Affiliates (Continued)

(in thousands)



Debt	Interest Rate		Spread over LIBOR	Loan Amount			Maturity (a)
Hotel del Coronado
CMBS Mortgage and Mezzanine	3.82	%	365 bp	$	475,000		March 2018
Cash and cash equivalents				(7,462		)
Net Debt				$	467,538
Fairmont Scottsdale Princess
CMBS Mortgage	0.53	%	36 bp	$	117,000		April 2015
Cash and cash equivalents				(6,841		)
Net Debt				$	110,159


(a)	Includes extension options.



Caps	Effective Date	LIBOR Cap Rate		Notional Amount		Maturity
Hotel del Coronado
CMBS Mortgage and Mezzanine Loan Caps	March 2013	3.00	%	$	475,000	March 2015
Fairmont Scottsdale Princess
CMBS Mortgage Loan Cap	December 2013	4.00	%	$	117,000	April 2015




		Supplemental Financial Information
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)		Three Months and Years Ended December 31, 2013 and 2012

Leasehold Information

(in thousands)



	Three Months Ended December 31,						Years Ended December 31,
	2013			2012			2013			2012
Marriott Hamburg:
Property EBITDA	$	1,741		$	1,472		$	6,298		$	5,876
Revenue (a)	$	1,385		$	1,273		$	5,161		$	4,778

Lease expense	(1,234		)	(1,155		)	(4,818		)	(4,580		)
Less: Deferred gain on sale-leaseback	(53		)	(50		)	(207		)	(200		)
Adjusted lease expense	(1,287		)	(1,205		)	(5,025		)	(4,780		)

EBITDA contribution from leasehold	$	98		$	68		$	136		$	(2	)



	December 31,
Security Deposit (b):	2013		2012
Marriott Hamburg	$	2,611	$	2,507


(a)	For the three months and years ended December 31, 2013 and 2012, Revenue for the Marriott Hamburg hotel represents lease revenue.


(b)	The security deposit is recorded in prepaid expenses and other assets on the consolidated balance sheets.




		Supplemental Financial Information
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)		December 31, 2013

Non-GAAP Financial Measures

We present five non-GAAP financial measures that we believe are useful to management and investors as key measures of our operating performance: Funds from Operations (FFO); FFO—Fully Diluted; Comparable FFO; Earnings Before Interest Expense, Taxes, Depreciation and Amortization (EBITDA); and Comparable EBITDA.

EBITDA represents net income (or loss) attributable to SHR common shareholders excluding: (i) interest expense, (ii) income taxes, including deferred income tax benefits and expenses applicable to our foreign subsidiaries and income taxes applicable to sale of assets; (iii) depreciation and amortization; and (iv) preferred stock dividends. EBITDA also excludes interest expense, income taxes and depreciation and amortization of our unconsolidated affiliates. EBITDA is presented on a full participation basis, which means we have assumed conversion of all redeemable noncontrolling interests of our operating partnership into our common stock. We believe this treatment of noncontrolling interests provides useful information for management and our investors and appropriately considers our current capital structure. We also present Comparable EBITDA, which eliminates the effect of realizing deferred gains on our sale leasebacks, as well as the effect of gains or losses on sales of assets, early extinguishment of debt, impairment losses, foreign currency exchange gains or losses and certain other charges that are highly variable from year to year. We believe EBITDA and Comparable EBITDA are useful to management and investors in evaluating our operating performance because they provide management and investors with an indication of our ability to incur and service debt, to satisfy general operating expenses, to make capital expenditures and to fund other cash needs or reinvest cash into our business. We also believe they help management and investors meaningfully evaluate and compare the results of our operations from period to period by removing the impact of our asset base (primarily depreciation and amortization) from our operating results. Our management also uses EBITDA and Comparable EBITDA as measures in determining the value of acquisitions and dispositions.

We compute FFO in accordance with standards established by the National Association of Real Estate Investment Trusts, or NAREIT, with the exception of impairment of depreciable real estate. NAREIT adopted a definition of FFO in order to promote an industry-wide standard measure of REIT operating performance. NAREIT defines FFO as net income (or loss) (computed in accordance with GAAP) excluding losses or gains from sales of depreciable property, impairment of depreciable real estate, real estate-related depreciation and amortization, and our portion of these items related to unconsolidated affiliates. We also present FFO—Fully Diluted, which is FFO plus income or loss on income attributable to redeemable noncontrolling interests in our operating partnership. We also present Comparable FFO, which is FFO—Fully Diluted excluding the impact of any gains or losses on early extinguishment of debt, impairment losses, foreign currency exchange gains or losses and certain other charges that are highly variable from year to year. We believe that the presentation of FFO, FFO—Fully Diluted and Comparable FFO provides useful information to management and investors regarding our results of operations because they are measures of our ability to fund capital expenditures and expand our business. In addition, FFO is widely used in the real estate industry to measure operating performance without regard to items such as depreciation and amortization. We also present Comparable FFO per diluted share as a non-GAAP measure of our performance. We calculate Comparable FFO per diluted share for a given operating period as our Comparable FFO (as defined above) divided by the weighted average of fully diluted shares outstanding, excluding shares related to the JW Marriott Essex House Hotel put option. Dilutive securities may include shares granted under share-based compensation plans and operating partnership units. No effect is shown for securities that are anti-dilutive.

We caution investors that amounts presented in accordance with our definitions of FFO, FFO—Fully Diluted, Comparable FFO, EBITDA, and Comparable EBITDA may not be comparable to similar measures disclosed by other companies, since not all companies calculate these non-GAAP measures in the same manner. FFO, FFO—Fully Diluted, Comparable FFO, EBITDA, and Comparable EBITDA should not be considered as an alternative measure of our net income (or loss) or operating performance. FFO, FFO—Fully Diluted, Comparable FFO, EBITDA, and Comparable EBITDA may include funds that may not be available for our discretionary use due to functional requirements to conserve funds for capital expenditures and property acquisitions and other commitments and uncertainties. Although we believe that FFO, FFO—Fully Diluted, Comparable FFO, EBITDA, and Comparable EBITDA can enhance your understanding of our financial condition and results of operations, these non-GAAP financial measures, when viewed individually, are not necessarily a better indicator of any trend as compared to comparable GAAP measures such as net income (or loss) attributable to SHR common shareholders. In addition, you should be aware that adverse economic and market conditions might negatively impact our cash flow. We have provided a quantitative reconciliation of FFO, FFO—Fully Diluted, Comparable FFO, EBITDA, and Comparable EBITDA to the most directly comparable GAAP financial performance measure, which is net income (or loss) attributable to SHR common shareholders.




		Supplemental Financial Information
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)		Three Months and Years Ended December 31, 2013 and 2012

Reconciliation of Net Income (Loss) Attributable to SHR Common Shareholders to EBITDA and Comparable EBITDA

(in thousands)



	Three Months Ended December 31,						Years Ended December 31,
	2013			2012			2013			2012
Net income (loss) attributable to SHR common shareholders	$	3,223		$	(36,401	)	$	(13,191	)	$	(79,472	)
Depreciation and amortization—continuing operations	24,507			26,055			101,943			99,458
Depreciation and amortization—discontinued operations	1,052			993			4,075			4,006
Interest expense—continuing operations	20,405			16,862			84,276			75,489
Income taxes—continuing operations	153			257			557			800
Income taxes—discontinued operations	172			539			889			211
Noncontrolling interests	60			(58		)	38			(184		)
Adjustments from consolidated affiliates	(3,589		)	(4,217		)	(14,604		)	(8,599		)
Adjustments from unconsolidated affiliates	5,553			6,956			23,489			27,562
Preferred shareholder dividends	6,041			6,041			24,166			24,166
EBITDA	57,577			17,027			211,638			143,437
Realized portion of deferred gain on sale-leaseback	(53		)	(50		)	(207		)	(200		)
Loss on sale of assets	430			—			1,185			—
Loss on sale of assets—adjustments from consolidated affiliates	(85		)	—			(455		)	—
Impairment losses and other charges—continuing operations	—			18,406			728			18,406
Impairment losses and other charges—discontinued operations	—			437			—			437
Foreign currency exchange (gain) loss—continuing operations (a)	(8		)	(15		)	(44		)	1,258
Foreign currency exchange loss (gain)—discontinued operations (a)	142			(79		)	1			352
Activist shareholder costs	342			—			342			—
Adjustment for Value Creation Plan	—			(1,352		)	—			1,407
Severance charges	—			2,485			—			2,485
Management agreement termination fee (b)	—			7,820			—			7,820
Comparable EBITDA	$	58,345		$	44,679		$	213,188		$	175,402


(a)	Foreign currency exchange gains or losses applicable to third-party and inter-company debt and certain balance sheet items held by foreign subsidiaries.


(b)	Our share of the Hotel del Coronado management agreement termination fee included in both equity in (losses) earnings of unconsolidated affiliates and net (income) loss attributable to the noncontrolling interests in consolidated affiliates.




		Supplemental Financial Information
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)		Three Months and Years Ended December 31, 2013 and 2012

Reconciliation of Net Income (Loss) Attributable to SHR Common Shareholders to

Funds From Operations (FFO), FFO—Fully Diluted and Comparable FFO

(in thousands, except per share data)



	Three Months Ended December 31,						Years Ended December 31,
	2013			2012			2013			2012
Net income (loss) attributable to SHR common shareholders	$	3,223		$	(36,401	)	$	(13,191	)	$	(79,472	)
Depreciation and amortization—continuing operations	24,507			26,055			101,943			99,458
Depreciation and amortization—discontinued operations	1,052			993			4,075			4,006
Corporate depreciation	(125		)	(190		)	(508		)	(979		)
Loss on sale of assets	430			—			1,185			—
Realized portion of deferred gain on sale-leaseback	(53		)	(50		)	(207		)	(200		)
Noncontrolling interests adjustments	(123		)	(127		)	(400		)	(501		)
Adjustments from consolidated affiliates	(1,813		)	(1,906		)	(7,378		)	(4,091		)
Adjustments from unconsolidated affiliates	3,482			3,923			14,135			15,258
FFO	30,580			(7,703		)	99,654			33,479
Redeemable noncontrolling interests	183			69			438			317
FFO—Fully Diluted	30,763			(7,634		)	100,092			33,796
Impairment losses and other charges—continuing operations	—			18,406			728			18,406
Impairment losses and other charges—discontinued operations	—			437			—			437
Non-cash mark to market of interest rate swaps	(2,496		)	(7,833		)	(11,617		)	(12,238		)
Foreign currency exchange (gain) loss—continuing operations (a)	(8		)	(15		)	(44		)	1,258
Foreign currency exchange loss (gain)—discontinued operations (a)	142			(79		)	1			352
Activist shareholder costs	342			—			342			—
Adjustment for Value Creation Plan	—			(1,352		)	—			1,407
Severance charges	—			2,485			—			2,485
Management agreement termination fee (b)	—			7,820			—			7,820
Comparable FFO	$	28,743		$	12,235		$	89,502		$	53,723
Comparable FFO per fully diluted share	$	0.14		$	0.06		$	0.43		$	0.26
Weighted average diluted shares (c)	209,800			209,307			209,328			203,605


(a)	Foreign currency exchange gains or losses applicable to third-party and inter-company debt and certain balance sheet items held by foreign subsidiaries.


(b)	Our share of the Hotel del Coronado management agreement termination fee included in both equity in (losses) earnings of unconsolidated affiliates and net (income) loss attributable to the noncontrolling interests in consolidated affiliates.


(c)	Excludes shares related to the JW Marriott Essex House Hotel put option.



		Supplemental Financial Information
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)		December 31, 2013

Debt Summary

(dollars in thousands)



Debt	Interest Rate		Spread (a)	Loan Amount		Maturity (b)
Marriott London Grosvenor Square (c)	4.28	%	375 bp (c)	$	115,958	October 2014
North Beach Venture	5.00	%	Fixed	1,469		January 2015
Bank credit facility	3.17	%	300 bp	110,000		June 2015
Four Seasons Washington, D.C.	3.32	%	315 bp	130,000		July 2016
Westin St. Francis	6.09	%	Fixed	209,588		June 2017
Fairmont Chicago	6.09	%	Fixed	93,124		June 2017
JW Marriott Essex House Hotel	4.75	%	400 bp	185,826		September 2017
Hyatt Regency La Jolla (d)	4.50% / 10.00%		400 bp / Fixed	89,312		December 2017
InterContinental Miami	3.67	%	350 bp	85,000		July 2018
Loews Santa Monica Beach Hotel	4.02	%	385 bp	109,000		July 2018
InterContinental Chicago	5.61	%	Fixed	144,419		August 2021
				$	1,273,696


(a)	Spread over LIBOR (0.17% at December 31, 2013). Interest on the JW Marriott Essex House Hotel loan is subject to a 0.75% LIBOR floor. Interest on the Hyatt Regency La Jolla loan is subject to a 0.50% LIBOR floor.


(b)	Includes extension options.

(c)

Principal balance of £70,040,000 at December 31, 2013. On August 7, 2013, the Company entered into an amendment to the mortgage loan. The amendment extended the maturity of the loan to October 2014 and waived the July 2013 and subsequent principal payments through the extended term. Pursuant to the amendment, the spread over GBP LIBOR increases in steps during the extension period from GBP LIBOR plus 2.10% in August 2013 to GBP LIBOR plus 4.25% in April 2014. The spread in the table is the spread over three-month GBP LIBOR (0.53% at December 31, 2013).


(d)	Interest on $72,000,000 is payable at LIBOR plus 4.00%, subject to a 0.50% LIBOR floor, and interest on $17,312,000 is payable at a fixed rate of 10.00%.

Interest Rate Swaps



Swap Effective Date	Fixed Pay Rate Against LIBOR		Notional Amount		Maturity
February 2010	4.90	%	$	100,000	September 2014
February 2010	4.96	%	100,000		December 2014
December 2010	5.23	%	100,000		December 2015
February 2011	5.27	%	100,000		February 2016
	5.09	%	$	400,000

Future scheduled debt principal payments (including extension options) are as follows:



Years ending December 31,	Amount
2014	$	120,213
2015	117,498
2016	139,783
2017	577,043
2018	185,015
Thereafter	134,144
	$	1,273,696

Percent of fixed rate debt including swaps	68.0		%
Weighted average interest rate including swaps (e)	6.21		%
Weighted average maturity of fixed rate debt (debt with maturity of greater than one year)	3.92

(e) Excludes the amortization of deferred financing costs and the amortization of the interest rate swap costs.



		Supplemental Financial Information
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)		December 31, 2013

Portfolio Data

Portfolio at December 31, 2013

(dollars in thousands)



Hotel	Location	Number of Rooms	% of Total Rooms		4th QTR 2013 Property EBITDA		% of 4th QTR 2013 Property EBITDA
United States:
Westin St. Francis	San Francisco, CA	1,195	14	%	$	10,524	14	%
InterContinental Chicago	Chicago, IL	792	10	%	5,583		8	%
Hotel del Coronado (a)	Coronado, CA	757	9	%	3,153		4	%
Fairmont Chicago	Chicago, IL	687	8	%	2,788		4	%
Fairmont Scottsdale Princess (b)	Scottsdale, AZ	649	8	%	2,056		3	%
InterContinental Miami	Miami, FL	641	8	%	4,088		6	%
JW Marriott Essex House Hotel (c)	New York, NY	510	6	%	19,483		26	%
Hyatt Regency La Jolla (d)	La Jolla, CA	419	5	%	1,501		2	%
Ritz-Carlton Laguna Niguel	Dana Point, CA	396	5	%	2,429		3	%
Marriott Lincolnshire Resort	Lincolnshire, IL	389	5	%	599		1	%
Loews Santa Monica Beach Hotel	Santa Monica, CA	342	5	%	3,111		4	%
Ritz-Carlton Half Moon Bay	Half Moon Bay, CA	261	3	%	3,184		4	%
Four Seasons Washington, D.C.	Washington, D.C.	222	3	%	5,258		7	%
Four Seasons Silicon Valley	East Palo Alto, CA	200	2	%	2,414		3	%
Four Seasons Jackson Hole	Teton Village, WY	124	1	%	496		1	%
Total United States		7,584	92	%	66,667		90	%
European:
Marriott Hamburg (e)	Hamburg, Germany	278	3	%	N/A		N/A
Marriott London Grosvenor Square	London, England	237	3	%	4,673		6	%
Total European		515	6	%	4,673		6	%
Assets Held For Sale:
Four Seasons Punta Mita Resort (f)	Punta Mita, Mexico	173	2	%	3,319		4	%
		8,272	100	%	74,659		100	%


(a)	We account for this investment under the equity method of accounting and record equity in losses of the unconsolidated affiliate in our consolidated statements of operations. Property EBITDA has been calculated based on our 36.4% ownership interest.


(b)	We account for this investment under the equity method of accounting and record equity in losses of the unconsolidated affiliate in our consolidated statements of operations. Property EBITDA has been calculated based on our 50.0% ownership interest.


(c)	On September 14, 2012, we purchased a 51.0% controlling interest in the entity that owns the JW Marriott Essex House Hotel and consolidate this hotel for reporting purposes.


(d)	We own a 53.5% controlling interest in the entity that owns the Hyatt Regency La Jolla hotel and consolidate this hotel for reporting purposes.


(e)	We sublease this property and have not included it in the percentage of Property EBITDA calculation.

(f)

As of December 31, 2013, this property has been classified as held for sale; therefore, the results of operations have been included in income from discontinued operations for the three months and years ended December 31, 2013 and 2012. However, for purposes of this comparison, the percentage of Property EBITDA calculation above reflects operating results before they were reclassified to discontinued operations.



		Supplemental Financial Information
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)		Four Quarters Ended December 31, 2013

Seasonality by Geographic Region

(dollars in thousands)

Same store property revenues have been adjusted to show hotel performance on a comparable quarter-over-quarter basis. Adjustments include (i) exclusion of the unconsolidated Hotel del Coronado and Fairmont Scottsdale Princess hotel and (ii) presentation of the hotels without regard to either ownership structure or leaseholds. For purposes of this analysis, we have included the operating results of the Four Seasons Punta Mita Resort, which is included in income from discontinued operations, in the tables below.



United States Hotels (as of December 31, 2013)
Same store property revenues - 13 Properties and 6,178 Rooms

	Three Months Ended
	March 31, 2013			June 30, 2013			September 30, 2013			December 31, 2013			Total
Same store property revenues	179,976			225,935			222,231			230,426			$	858,568
Same store seasonality %	21.0		%	26.3		%	25.9		%	26.8		%	100.0		%


Mexican Hotel (as of December 31, 2013)
Same store property revenues - 1 Property and 173 Rooms

	Three Months Ended
	March 31, 2013			June 30, 2013			September 30, 2013			December 31, 2013			Total
Same store property revenues	$	13,106		$	7,518		$	5,040		$	12,300		$	37,964
Same store seasonality %	34.5		%	19.8		%	13.3		%	32.4		%	100.0		%


North American Hotels (as of December 31, 2013)
Same store property revenues - 14 Properties and 6,351 Rooms

	Three Months Ended
	March 31, 2013			June 30, 2013			September 30, 2013			December 31, 2013			Total
Same store property revenues	193,082			233,453			227,271			242,726			$	896,532
Same store seasonality %	21.5		%	26.0		%	25.4		%	27.1		%	100.0		%


European Hotels (as of December 31, 2013)
Same store property revenues - 2 Properties and 515 Rooms

	Three Months Ended
	March 31, 2013			June 30, 2013			September 30, 2013			December 31, 2013			Total
Same store property revenues	$	11,647		$	15,424		$	14,749		$	16,640		$	58,460
Same store seasonality %	19.9		%	26.4		%	25.2		%	28.5		%	100.0		%



		Supplemental Financial Information
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)		Three Months and Years Ended December 31, 2013 and 2012

Operating Statistics by Geographic Region

The Total United States portfolio is derived from our hotel portfolio at December 31, 2013, consisting of all properties located in the United States, and 100% of the operations of the Hotel del Coronado and the Fairmont Scottsdale Princess hotel. The Total North American portfolio includes the Total United States portfolio and the Four Seasons Punta Mita Resort. Adjustments to the same store portfolios are the (i) exclusion of unconsolidated Hotel del Coronado and Fairmont Scottsdale Princess hotel, (ii) exclusion of the JW Marriott Essex House Hotel for the years ended December 31, 2013 and 2012, and (v) presentation of the hotels without regard to either ownership structure or leaseholds. For purposes of this analysis, we have included the operating results of the Four Seasons Punta Mita Resort, which is included in income from discontinued operations, in the tables below. Fourth quarter and year end results include payments pursuant to the JW Marriott Essex House Hotel NOI guarantee of $12.8 million and $1.4 million in 2013 and 2012, respectively.

Total United States Hotels (as of December 31, 2013)

15 Properties

7,584 Rooms



	Three Months Ended December 31,								Years Ended December 31,
	2013			2012			Change		2013			2012			Change
ADR	$	285.47		$	268.41		6.4	%	$	284.32		$	268.41		5.9	%
Average Occupancy	71.8		%	69.6		%	2.2	pts	74.8		%	73.0		%	1.8	pts
RevPAR	$	205.08		$	186.90		9.7	%	$	212.73		$	195.94		8.6	%
Total RevPAR	$	411.53		$	357.41		15.1	%	$	397.01		$	361.84		9.7	%
Property EBITDA Margin	25.9		%	20.9		%	5.0	pts	24.4		%	21.5		%	2.9	pts

Total North American Hotels (as of December 31, 2013)

16 Properties

7,757 Rooms



	Three Months Ended December 31,								Years Ended December 31,
	2013			2012			Change		2013			2012			Change
ADR	$	293.19		$	276.26		6.1	%	$	289.90		$	273.30		6.1	%
Average Occupancy	71.3		%	69.1		%	2.2	pts	74.2		%	72.3		%	1.9	pts
RevPAR	$	209.17		$	190.82		9.6	%	$	214.98		$	197.59		8.8	%
Total RevPAR	$	419.59		$	365.15		14.9	%	$	401.56		$	365.43		9.9	%
Property EBITDA Margin	25.9		%	21.3		%	4.6	pts	24.4		%	21.5		%	2.9	pts

Same Store North American Hotels (as of December 31, 2013)

14 Properties (three month period) 13 Properties (year)

6,351 Rooms (three month period) 5,841 Rooms (year)



	Three Months Ended December 31,								Years Ended December 31,
	2013			2012			Change		2013			2012			Change
ADR	$	292.75		$	275.64		6.2	%	$	270.07		$	254.06		6.3	%
Average Occupancy	73.7		%	71.3		%	2.4	pts	75.0		%	73.2		%	1.8	pts
RevPAR	$	215.75		$	196.66		9.7	%	$	202.58		$	186.05		8.9	%
Total RevPAR	$	415.35		$	359.73		15.5	%	$	373.90		$	344.77		8.4	%
Property EBITDA Margin	26.7		%	21.5		%	5.2	pts	23.4		%	22.0		%	1.4	pts

Same Store European Hotels (as of December 31, 2013)

2 Properties

515 Rooms



	Three Months Ended December 31,									Years Ended December 31,
	2013			2012			Change			2013			2012			Change
ADR	$	280.84		$	277.82		1.1		%	$	273.34		$	280.13		(2.4	)	%
Average Occupancy	84.4		%	81.7		%	2.7		pts	83.4		%	82.8		%	0.6		pts
RevPAR	$	237.13		$	227.07		4.4		%	$	227.85		$	231.84		(1.7	)	%
Total RevPAR	$	351.21		$	331.93		5.8		%	$	311.00		$	314.90		(1.2	)	%
Property EBITDA Margin	38.5		%	39.2		%	(0.7	)	pts	37.7		%	39.4		%	(1.7	)	pts



		Supplemental Financial Information
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)		Three Months and Years Ended December 31, 2013 and 2012

Selected Financial and Operating Information by Property

(in thousands, except operating information)

The following tables present selected financial and operating information by property for the three months and years ended December 31, 2013 and 2012. Property EBITDA reflects property net operating income or loss plus depreciation and amortization.



	Three Months Ended December 31,									Years Ended December 31,
UNITED STATES HOTELS:	2013			2012			Change			2013			2012			Change
FAIRMONT CHICAGO
Selected Financial Information:
Total revenues	$	14,681		$	15,937		(7.9	)	%	$	59,245		$	61,181		(3.2	)	%
Property EBITDA	$	2,788		$	3,003		(7.2	)	%	$	12,601		$	10,655		18.3		%
Selected Operating Information:
Rooms	687			687			—			687			687			—
Average occupancy	62.5		%	67.3		%	(4.8	)	pts	69.3		%	67.7		%	1.6		pts
ADR	$	221.62		$	230.09		(3.7	)	%	$	213.71		$	218.57		(2.2	)	%
RevPAR	$	138.53		$	154.74		(10.5	)	%	$	148.11		$	147.97		0.1		%
Total RevPAR	$	232.29		$	252.16		(7.9	)	%	$	236.27		$	243.32		(2.9	)	%

FAIRMONT SCOTTSDALE PRINCESS
Selected Financial Information (Amounts below are 100% of operations, of which SHR owns 50% as of December 31, 2013 and 2012, respectively):
Total revenues	$	23,634		$	20,546		15.0		%	$	93,133		$	77,281		20.5		%
Property EBITDA	$	4,111		$	3,034		35.5		%	$	18,883		$	12,777		47.8		%
Selected Operating Information:
Rooms	649			649			—			649			649			—
Average occupancy	68.8		%	64.6		%	4.2		pts	70.4		%	64.7		%	5.7		pts
ADR	$	241.33		$	208.84		15.6		%	$	237.72		$	224.70		5.8		%
RevPAR	$	166.07		$	134.99		23.0		%	$	167.27		$	145.34		15.1		%
Total RevPAR	$	395.83		$	344.11		15.0		%	$	393.16		$	325.35		20.8		%

FOUR SEASONS JACKSON HOLE
Selected Financial Information
Total revenues	$	7,393		$	6,141		20.4		%	$	40,698		$	34,845		16.8		%
Property EBITDA	$	496		$	17		2,817.6		%	$	8,476		$	5,783		46.6		%
Selected Operating Information
Rooms	124			124			—			124			124			—
Average occupancy	38.8		%	36.4		%	2.4		pts	59.0		%	59.4		%	(0.4	)	pts
ADR	$	578.68		$	573.40		0.9		%	$	614.39		$	543.99		12.9		%
RevPAR	$	224.51		$	208.79		7.5		%	$	362.55		$	323.10		12.2		%
Total RevPAR	$	648.09		$	538.34		20.4		%	$	899.21		$	767.79		17.1		%

FOUR SEASONS SILICON VALLEY
Selected Financial Information
Total revenues	$	9,711		$	8,352		16.3		%	$	36,040		$	32,458		11.0		%
Property EBITDA	$	2,414		$	1,761		37.1		%	$	8,143		$	6,880		18.4		%
Selected Operating Information
Rooms	200			200			—			200			200			—
Average occupancy	72.2		%	67.2		%	5.0		pts	79.0		%	73.8		%	5.2		pts
ADR	$	368.84		$	334.24		10.4		%	$	341.43		$	319.14		7.0		%
RevPAR	$	266.30		$	224.54		18.6		%	$	269.74		$	235.36		14.6		%
Total RevPAR	$	527.78		$	453.89		16.3		%	$	493.70		$	443.42		11.3		%



		Supplemental Financial Information
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)		Three Months and Years Ended December 31, 2013 and 2012



	Three Months Ended December 31,									Years Ended December 31,
	2013			2012			Change			2013			2012			Change
FOUR SEASONS WASHINGTON, D.C.
Selected Financial Information:
Total revenues	$	19,930		$	15,645		27.4		%	$	68,756		$	61,171		12.4		%
Property EBITDA	$	5,258		$	3,069		71.3		%	$	16,324		$	12,586		29.7		%
Selected Operating Information:
Rooms	222			222			—			222			222			—
Average occupancy	72.1		%	62.8		%	9.3		pts	72.1		%	69.7		%	2.4		pts
ADR	$	633.26		$	578.58		9.5		%	$	577.88		$	527.77		9.5		%
RevPAR	$	456.62		$	363.26		25.7		%	$	416.63		$	367.90		13.2		%
Total RevPAR	$	975.80		$	766.02		27.4		%	$	848.53		$	752.85		12.7		%

HOTEL DEL CORONADO
Selected Financial Information (Amounts below are 100% of operations, of which SHR owns 36.4% as of December 31, 2013 and 2012):
Total revenues	$	33,115		$	29,888		10.8		%	$	148,482		$	140,220		5.9		%
Property EBITDA	$	8,668		$	7,201		20.4		%	$	47,155		$	40,722		15.8		%
Selected Operating Information:
Rooms	757			757			—			757			757			—
Average occupancy	53.8		%	53.6		%	0.2		pts	66.1		%	65.7		%	0.4		pts
ADR	$	355.15		$	352.97		0.6		%	$	384.11		$	378.90		1.4		%
RevPAR	$	190.92		$	189.13		0.9		%	$	253.88		$	248.74		2.1		%
Total RevPAR	$	475.49		$	429.16		10.8		%	$	537.38		$	506.10		6.2		%

HYATT REGENCY LA JOLLA
Selected Financial Information:
Total revenues	$	8,473		$	7,881		7.5		%	$	34,147		$	35,239		(3.1	)	%
Property EBITDA	$	1,501		$	1,062		41.3		%	$	6,589		$	6,945		(5.1	)	%
Selected Operating Information:
Rooms	419			419			—			419			419			—
Average occupancy	68.5		%	67.9		%	0.6		pts	73.3		%	75.0		%	(1.7	)	pts
ADR	$	160.87		$	154.56		4.1		%	$	169.33		$	165.38		2.4		%
RevPAR	$	110.17		$	104.92		5.0		%	$	124.15		$	123.97		0.1		%
Total RevPAR	$	219.81		$	204.44		7.5		%	$	223.28		$	229.79		(2.8	)	%

INTERCONTINENTAL CHICAGO
Selected Financial Information:
Total revenues	$	20,232		$	20,286		(0.3	)	%	$	76,822		$	74,349		3.3		%
Property EBITDA	$	5,583		$	5,989		(6.8	)	%	$	18,966		$	18,408		3.0		%
Selected Operating Information:
Rooms	792			792			—			792			792			—
Average occupancy	84.4		%	80.2		%	4.2		pts	79.4		%	77.5		%	1.9		pts
ADR	$	192.90		$	205.92		(6.3	)	%	$	196.08		$	193.97		1.1		%
RevPAR	$	162.81		$	165.16		(1.4	)	%	$	155.68		$	150.32		3.6		%
Total RevPAR	$	277.67		$	278.41		(0.3	)	%	$	265.75		$	256.49		3.6		%



		Supplemental Financial Information
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)		Three Months and Years Ended December 31, 2013 and 2012



	Three Months Ended December 31,									Years Ended December 31,
	2013			2012			Change			2013			2012			Change
INTERCONTINENTAL MIAMI
Selected Financial Information:
Total revenues	$	16,412		$	14,162		15.9		%	$	63,713		$	54,956		15.9		%
Property EBITDA	$	4,088		$	3,474		17.7		%	$	17,333		$	13,857		25.1		%
Selected Operating Information:
Rooms	641			641			—			641			641			—
Average occupancy	79.7		%	83.2		%	(3.5	)	pts	80.7		%	78.5		%	2.2		pts
ADR	$	191.11		$	164.26		16.3		%	$	189.11		$	169.12		11.8		%
RevPAR	$	152.24		$	136.59		11.5		%	$	152.68		$	132.67		15.1		%
Total RevPAR	$	278.29		$	240.15		15.9		%	$	272.32		$	234.25		16.3		%

JW MARRIOTT ESSEX HOUSE HOTEL
Selected Financial Information (This table includes financial information only for our period of ownership):
Total revenues	$	39,259		$	24,625		59.4		%	$	98,944		N/A			N/A
Property EBITDA	$	19,483		$	5,896		230.4		%	$	24,505		N/A			N/A
Selected Operating Information (This table includes statistical information only for our period of ownership. For the year ended December 31, 2012, average occupancy was 81.3%, ADR was $395.61, RevPAR was $321.55 and Total RevPAR was $445.02.):
Rooms	510			509			1			510			N/A			N/A
Average occupancy	83.8		%	82.8		%	1.0		pts	81.2		%	N/A			N/A
ADR	$	519.88		$	476.46		9.1		%	$	441.95		N/A			N/A
RevPAR	$	435.82		$	394.49		10.5		%	$	358.74		N/A			N/A
Total RevPAR	$	835.08		$	543.58		53.6		%	$	526.30		N/A			N/A

LOEWS SANTA MONICA BEACH HOTEL
Selected Financial Information:
Total revenues	$	12,464		$	10,697		16.5		%	$	53,642		$	50,676		5.9		%
Property EBITDA	$	3,111		$	2,544		22.3		%	$	15,531		$	14,448		7.5		%
Selected Operating Information:
Rooms	342			342			—			342			342			—
Average occupancy	79.0		%	74.6		%	4.4		pts	85.1		%	86.3		%	(1.2	)	pts
ADR	$	319.74		$	301.29		6.1		%	$	343.20		$	322.49		6.4		%
RevPAR	$	252.71		$	224.79		12.4		%	$	291.99		$	278.17		5.0		%
Total RevPAR	$	396.15		$	339.96		16.5		%	$	429.72		$	404.85		6.1		%

MARRIOTT LINCOLNSHIRE RESORT
Selected Financial Information:
Total revenues	$	8,671		$	10,811		(19.8	)	%	$	32,279		$	32,503		(0.7	)	%
Property EBITDA	$	599		$	1,284		(53.3	)	%	$	1,590		$	2,087		(23.8	)	%
Selected Operating Information:
Rooms	389			389			—			389			389			—
Average occupancy	52.3		%	56.5		%	(4.2	)	pts	52.6		%	59.6		%	(7.0	)	pts
ADR	$	128.37		$	134.24		(4.4	)	%	$	131.47		$	125.81		4.5		%
RevPAR	$	67.17		$	75.80		(11.4	)	%	$	69.14		$	74.98		(7.8	)	%
Total RevPAR	$	242.28		$	248.13		(2.4	)	%	$	225.49		$	229.55		(1.8	)	%



		Supplemental Financial Information
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)		Three Months and Years Ended December 31, 2013 and 2012



	Three Months Ended December 31,								Years Ended December 31,
	2013			2012			Change		2013			2012			Change
RITZ-CARLTON HALF MOON BAY
Selected Financial Information:
Total revenues	$	16,119		$	14,987		7.6	%	$	62,092		$	58,024		7.0	%
Property EBITDA	$	3,184		$	2,531		25.8	%	$	11,962		$	11,613		3.0	%
Selected Operating Information:
Rooms	261			261			—		261			261			—
Average occupancy	66.3		%	64.0		%	2.3	pts	68.1		%	65.6		%	2.5	pts
ADR	$	435.80		$	410.33		6.2	%	$	417.81		$	391.87		6.6	%
RevPAR	$	288.70		$	262.50		10.0	%	$	284.46		$	257.09		10.6	%
Total RevPAR	$	671.28		$	624.15		7.6	%	$	651.78		$	607.41		7.3	%

RITZ-CARLTON LAGUNA NIGUEL
Selected Financial Information:
Total revenues	$	16,191		$	15,202		6.5	%	$	83,129		$	74,326		11.8	%
Property EBITDA	$	2,429		$	2,277		6.7	%	$	23,333		$	20,813		12.1	%
Selected Operating Information:
Rooms	396			396			—		396			396			—
Average occupancy	53.9		%	52.2		%	1.7	pts	67.0		%	63.5		%	3.5	pts
ADR	$	350.82		$	342.51		2.4	%	$	398.30		$	376.81		5.7	%
RevPAR	$	189.22		$	178.86		5.8	%	$	266.82		$	239.26		11.5	%
Total RevPAR	$	444.41		$	417.26		6.5	%	$	575.13		$	512.82		12.2	%

WESTIN ST. FRANCIS
Selected Financial Information:
Total revenues	$	40,890		$	36,416		12.3	%	$	149,059		$	133,948		11.3	%
Property EBITDA	$	10,524		$	9,440		11.5	%	$	37,313		$	31,304		19.2	%
Selected Operating Information:
Rooms	1,195			1,195			—		1,195			1,195			—
Average occupancy	88.6		%	80.7		%	7.9	pts	87.4		%	82.4		%	5.0	pts
ADR	$	252.54		$	241.26		4.7	%	$	245.48		$	230.81		6.4	%
RevPAR	$	223.69		$	194.76		14.9	%	$	214.52		$	190.10		12.8	%
Total RevPAR	$	371.93		$	331.23		12.3	%	$	341.74		$	306.26		11.6	%



		Supplemental Financial Information
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)		Three Months and Years Ended December 31, 2013 and 2012



	Three Months Ended December 31,									Years Ended December 31,
MEXICAN HOTEL:	2013			2012			Change			2013			2012			Change
FOUR SEASONS PUNTA MITA RESORT
Selected Financial Information:
Total revenues	$	12,300		$	11,261		9.2		%	$	37,964		$	33,100		14.7		%
Property EBITDA	$	3,319		$	3,330		(0.3	)	%	$	8,663		$	7,074		22.5		%
Selected Operating Information:
Rooms	173			173			—			173			173			—
Average occupancy	49.7		%	44.4		%	5.3		pts	45.2		%	41.5		%	3.7		pts
ADR	$	782.33		$	820.16		(4.6	)	%	$	694.68		$	650.37		6.8		%
RevPAR	$	388.76		$	364.17		6.8		%	$	314.02		$	269.61		16.5		%
Total RevPAR	$	772.81		$	707.55		9.2		%	$	601.23		$	522.75		15.0		%

EUROPEAN HOTELS:
MARRIOTT HAMBURG
Selected Financial Information:
Total revenues	$	6,023		$	5,335		12.9		%	$	22,255		$	21,105		5.4		%
Property EBITDA	$	1,741		$	1,472		18.3		%	$	6,298		$	5,876		7.2		%
Selected Operating Information:
Rooms	278			278			—			278			278			—
Average occupancy	84.0		%	79.8		%	4.2		pts	83.5		%	81.8		%	1.7		pts
ADR	$	196.14		$	187.53		4.6		%	$	191.41		$	183.97		4.0		%
RevPAR	$	164.69		$	149.60		10.1		%	$	159.81		$	150.53		6.2		%
Total RevPAR	$	235.48		$	208.60		12.9		%	$	219.32		$	207.43		5.7		%

MARRIOTT LONDON GROSVENOR SQUARE
Selected Financial Information:
Total revenues	$	10,618		$	10,392		2.2		%	$	36,206		$	38,251		(5.3	)	%
Property EBITDA	$	4,673		$	4,690		(0.4	)	%	$	15,745		$	17,484		(9.9	)	%
Selected Operating Information:
Rooms	237			237			—			237			237			—
Average occupancy	85.0		%	84.0		%	1.0		pts	83.2		%	83.9		%	(0.7	)	pts
ADR	$	379.00		$	378.39		0.2		%	$	369.78		$	390.17		(5.2	)	%
RevPAR	$	322.11		$	317.93		1.3		%	$	307.66		$	327.22		(6.0	)	%
Total RevPAR	$	486.95		$	476.59		2.2		%	$	418.54		$	440.97		(5.1	)	%



		Supplemental Financial Information
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)		Three Months and Years Ended December 31, 2013 and 2012

Reconciliation of Property EBITDA to EBITDA

(in thousands)



	Three Months Ended December 31,										Years Ended December 31,
	2013					2012					2013					2012
Hotel	Property EBITDA		EBITDA			Property EBITDA		EBITDA			Property EBITDA		EBITDA			Property EBITDA		EBITDA
Fairmont Chicago	$	2,788	$	2,788		$	3,003	$	3,003		$	12,601	$	12,601		$	10,655	$	10,655
Fairmont Scottsdale Princess (a)	4,111		—			3,034		—			18,883		—			12,777		—
Four Seasons Jackson Hole	496		496			17		17			8,476		8,476			5,783		5,783
Four Seasons Silicon Valley	2,414		2,414			1,761		1,761			8,143		8,143			6,880		6,880
Four Seasons Washington, D.C.	5,258		5,258			3,069		3,069			16,324		16,324			12,586		12,586
Hotel del Coronado (a)	8,668		—			7,201		—			47,155		—			40,722		—
Hyatt Regency La Jolla	1,501		1,501			1,062		1,062			6,589		6,589			6,945		6,945
InterContinental Chicago	5,583		5,583			5,989		5,989			18,966		18,966			18,408		18,408
InterContinental Miami	4,088		4,088			3,474		3,474			17,333		17,333			13,857		13,857
JW Marriott Essex House Hotel (b)	19,483		19,483			5,896		5,896			24,505		24,505			—		6,812
Loews Santa Monica Beach Hotel	3,111		3,111			2,544		2,544			15,531		15,531			14,448		14,448
Marriott Lincolnshire Resort	599		599			1,284		1,284			1,590		1,590			2,087		2,087
Ritz-Carlton Half Moon Bay	3,184		3,184			2,531		2,531			11,962		11,962			11,613		11,613
Ritz-Carlton Laguna Niguel	2,429		2,429			2,277		2,277			23,333		23,333			20,813		20,813
Westin St. Francis	10,524		10,524			9,440		9,440			37,313		37,313			31,304		31,304
Four Seasons Punta Mita Resort (c)	3,319		—			3,330		—			8,663		—			7,074		—
Marriott Hamburg (d)	1,741		151			1,472		118			6,298		343			5,876		198
Marriott London Grosvenor Square	4,673		4,673			4,690		4,690			15,745		15,745			17,484		17,484
	$	83,970	$	66,282		$	62,074	$	47,155		$	299,410	$	218,754		$	239,312	$	179,873
Adjustments:
Impairment losses and other charges			—					(18,406		)			(728		)			(18,406		)
Corporate expenses			(7,161		)			(8,150		)			(25,807		)			(31,578		)
Interest income			14					95					59					213
Equity in (losses) earnings of unconsolidated affiliates			(265		)			(11,431		)			2,987					(13,485		)
Foreign currency exchange gain (loss)			8					15					44					(1,258		)
Other (expenses) income, net			(359		)			455					(314		)			1,820
Income from discontinued operations			2,248					1,362					3,171					1,189
Depreciation expense—discontinued operations			1,052					993					4,075					4,006
Income taxes—discontinued operations			172					539					889					211
Noncontrolling interest in consolidated affiliates			(6,341		)			1,880					1,126					2,771
Adjustments from consolidated affiliates			(3,589		)			(4,217		)			(14,604		)			(8,599		)
Adjustments from unconsolidated affiliates			5,553					6,956					23,489					27,562
Other adjustments			(37		)			(219		)			(1,503		)			(882		)
EBITDA			$	57,577				$	17,027				$	211,638				$	143,437


(a)	We account for these properties under the equity method of accounting. Therefore, EBITDA related to our interest in these properties is reflected in adjustments from unconsolidated affiliates. Property EBITDA represents 100% of revenue and expenses generated by these properties.


(b)	On September 14, 2012, we purchased a 51% controlling interest in this hotel. We have not included the results of this hotel in Property EBITDA for the year ended December 31, 2012 above since we did not own the property for the entire period.


(c)	As of December 31, 2013, this property has been classified as held for sale. Therefore, its results of operations have been included in income from discontinued operations for the three months and years ended December 31, 2013 and 2012.


(d)	We have a leasehold interest in and sublease this property. Therefore, EBITDA represents the lease revenue less the lease expense recorded in our statements. Property EBITDA represents the revenue less expenses generated by the property.



		Supplemental Financial Information
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)		Three Months and Years Ended December 31, 2013 and 2012

Reconciliation of Property EBITDA to Comparable EBITDA

(in thousands)



	Three Months Ended December 31, 2013							Year Ended December 31, 2013
	Property EBITDA		Adjustments			Comparable EBITDA		Property EBITDA		Adjustments			Comparable EBITDA
Urban Hotels:
Fairmont Chicago	$	2,788	$	—		$	2,788	$	12,601	$	—		$	12,601
Four Seasons Silicon Valley	2,414		—			2,414		8,143		—			8,143
Four Seasons Washington, D.C.	5,258		—			5,258		16,324		—			16,324
Hyatt Regency La Jolla	1,501		(698		)	803		6,589		(3,064		)	3,525
InterContinental Chicago	5,583		—			5,583		18,966		—			18,966
InterContinental Miami	4,088		—			4,088		17,333		—			17,333
JW Marriott Essex House Hotel	19,483		(9,547		)	9,936		24,505		(12,007		)	12,498
Westin St. Francis	10,524		—			10,524		37,313		—			37,313
Total Urban Hotels	51,639		(10,245		)	41,394		141,774		(15,071		)	126,703
Resorts:
Fairmont Scottsdale Princess	4,111		(2,078		)	2,033		18,883		(9,499		)	9,384
Four Seasons Jackson Hole	496		—			496		8,476		—			8,476
Four Seasons Punta Mita Resort	3,319		—			3,319		8,663		—			8,663
Hotel del Coronado	8,668		(5,529		)	3,139		47,155		(30,245		)	16,910
Loews Santa Monica Beach Hotel	3,111		—			3,111		15,531		—			15,531
Marriott Lincolnshire Resort	599		—			599		1,590		—			1,590
Ritz-Carlton Half Moon Bay	3,184		—			3,184		11,962		—			11,962
Ritz-Carlton Laguna Niguel	2,429		—			2,429		23,333		—			23,333
Total Resorts	25,917		(7,607		)	18,310		135,593		(39,744		)	95,849
European Hotels:
Marriott Hamburg	1,741		(1,643		)	98		6,298		(6,162		)	136
Marriott London Grosvenor Square	4,673		—			4,673		15,745		—			15,745
Total European Hotels	6,414		(1,643		)	4,771		22,043		(6,162		)	15,881
	$	83,970	$	(19,495	)	$	64,475	$	299,410	$	(60,977	)	$	238,433

	% of QTR Comparable EBITDA							% of YTD Comparable EBITDA
Urban Hotels	64				%			53				%
Resorts	28				%			40				%
European Hotels	8				%			7				%
Total	100				%			100				%



Total North American Urban Hotels (as of December 31, 2013)
8 Properties
4,666 Rooms
	Three Months Ended December 31,								Years Ended December 31,
	2013			2012			Change		2013			2012			Change
ADR	$	274.63		$	258.69		6.2	%	$	259.43		$	243.82		6.4	%
Average Occupancy	79.0		%	76.6		%	2.4	pts	79.4		%	77.1		%	2.3	pts
RevPAR	$	216.95		$	198.17		9.5	%	$	206.06		$	187.94		9.6	%
Total RevPAR	$	394.97		$	335.09		17.9	%	$	344.13		$	313.93		9.6	%
Property EBITDA Margin	30.5		%	23.5		%	7.0	pts	24.2		%	20.0		%	4.2	pts

Total North American Resorts (as of December 31, 2013)
8 Properties
3,091 Rooms
	Three Months Ended December 31,								Years Ended December 31,
	2013			2012			Change		2013			2012			Change
ADR	$	330.22		$	310.18		6.5	%	$	345.07		$	325.97		5.9	%
Average Occupancy	59.8		%	58.1		%	1.7	pts	66.2		%	65.1		%	1.1	pts
RevPAR	$	197.42		$	180.06		9.6	%	$	228.46		$	212.15		7.7	%
Total RevPAR	$	456.75		$	409.15		11.6	%	$	488.25		$	443.13		10.2	%
Property EBITDA Margin	20.0		%	18.6		%	1.4	pts	24.6		%	23.0		%	1.6	pts



		Supplemental Financial Information
Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)		December 31, 2013

2014 Guidance

(in millions, except per share data)



	Year Ended December 31, 2014
Operational Guidance	Low Range		High Range
Total United States and United States same store RevPAR growth	5.0	%	7.0	%
Total United States and United States same store Total RevPAR growth	4.5	%	6.5	%



	Year Ended December 31, 2014
Comparable EBITDA Guidance	Low Range			High Range
Net income attributable to common shareholders	$	52.9		$	72.9
Depreciation and amortization	112.8			112.8
Interest expense	86.0			86.0
Income taxes	2.3			2.3
Noncontrolling interests	0.4			0.4
Adjustments from consolidated affiliates	(15.5		)	(15.5		)
Adjustments from unconsolidated affiliates	23.5			23.5
Preferred shareholder dividends	17.6			17.6
Realized portion of deferred gain on sale-leasebacks	(0.2		)	(0.2		)
Gain on sale of assets	(59.8		)	(59.8		)
Comparable EBITDA	$	220.0		$	240.0



	Year Ended December 31, 2014
Comparable FFO Guidance	Low Range			High Range
Net income attributable to common shareholders	$	52.9		$	72.9
Depreciation and amortization	112.0			112.0
Realized portion of deferred gain on sale-leasebacks	(0.2		)	(0.2		)
Gain on sale of assets	(59.8		)	(59.8		)
Noncontrolling interests	0.3			0.3
Adjustments from consolidated affiliates	(8.0		)	(8.0		)
Adjustments from unconsolidated affiliates	14.9			14.9
Comparable FFO	$	112.1		$	132.1
Comparable FFO per diluted share	$	0.53		$	0.63

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STRATEGIC HOTELS & RESORTS, INC Reports