STRATEGIC HOTELS & RESORTS, INC - FORM 8-K - EX-99.1 - EXHIBIT 99.1 ATTACHMENTS

Attached files

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8-K - 8-K - STRATEGIC HOTELS & RESORTS, INC	a930148kpressrelease.htm
EX-99.1 - EXHIBIT 99.1 - STRATEGIC HOTELS & RESORTS, INC	a93014exhibit991a-pressrel.htm
EX-99.2 - EXHIBIT 99.2 - STRATEGIC HOTELS & RESORTS, INC	a93014exhibit992.htm

Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)

Consolidated Statements of Operations

(in thousands, except per share data)



	Three Months Ended September 30,						Nine Months Ended September 30,
	2014			2013			2014			2013
Revenues:
Rooms	$	176,133		$	134,092		$	428,107		$	359,840
Food and beverage	96,642			67,101			266,687			209,124
Other hotel operating revenue	31,224			21,098			77,405			59,248
Lease revenue	1,264			1,416			3,882			3,776
Total revenues	305,263			223,707			776,081			631,988
Operating Costs and Expenses:
Rooms	48,197			36,441			123,172			104,291
Food and beverage	70,965			54,408			192,645			163,247
Other departmental expenses	74,640			54,825			194,457			159,291
Management fees	9,970			6,376			24,989			17,833
Other hotel expenses	17,998			13,685			49,248			43,808
Lease expense	1,215			1,202			3,733			3,584
Depreciation and amortization	32,932			23,906			83,195			73,505
Impairment losses and other charges	—			728			—			728
Corporate expenses	5,405			5,191			19,796			18,163
Total operating costs and expenses	261,322			196,762			691,235			584,450
Operating income	43,941			26,945			84,846			47,538
Interest expense	(21,844		)	(19,227		)	(59,705		)	(58,350		)
Interest income	46			11			123			41
Loss on early extinguishment of debt	(609		)	—			(609		)	—
Equity in (losses) earnings of unconsolidated affiliates	(4		)	451			5,267			3,252
Foreign currency exchange (loss) gain	(69		)	28			(75		)	26
(Loss) gain on consolidation of affiliates	(15		)	—			143,451			—
Other (expenses) income, net	(136		)	(832		)	1,082			45
Income (loss) before income taxes and discontinued operations	21,310			7,376			174,380			(7,448		)
Income tax (expense) benefit	(370		)	15			(616		)	(70		)
Income (loss) from continuing operations	20,940			7,391			173,764			(7,518		)
Income (loss) from discontinued operations, net of tax	63			(578		)	159,102			1,740
Net Income (Loss)	21,003			6,813			332,866			(5,778		)
Net (income) loss attributable to the noncontrolling interests in SHR's operating partnership	(67		)	(29		)	(1,197		)	22
Net loss attributable to the noncontrolling interests in consolidated affiliates	1,854			3,018			6,112			7,467
Net Income Attributable to SHR	22,790			9,802			337,781			1,711
Preferred shareholder dividends	(1,802		)	(6,042		)	(18,795		)	(18,125		)
Net Income (Loss) Attributable to SHR Common Shareholders	$	20,988		$	3,760		$	318,986		$	(16,414	)
Basic Income (Loss) Per Common Share:
Income (loss) from continuing operations attributable to SHR common shareholders	$	0.08		$	0.02		$	0.71		$	(0.09	)
Income from discontinued operations attributable to SHR common shareholders	—			—			0.70			0.01
Net income (loss) attributable to SHR common shareholders	$	0.08		$	0.02		$	1.41		$	(0.08	)
Weighted average shares of common stock outstanding	248,509			206,767			225,932			206,163
Diluted Income (Loss) Per Common Share:
Income (loss) from continuing operations attributable to SHR common shareholders	$	0.07		$	—		$	0.65		$	(0.12	)
Income from discontinued operations attributable to SHR common shareholders	—			—			0.67			0.01
Net income (loss) attributable to SHR common shareholders	$	0.07		$	—		$	1.32		$	(0.11	)
Weighted average shares of common stock outstanding	260,257			220,258			237,680			217,553

Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)

Consolidated Balance Sheets

(in thousands, except share data)



	September 30, 2014			December 31, 2013
Assets
Investment in hotel properties, net	$	2,709,550		$	1,795,338
Goodwill	38,128			38,128
Intangible assets, net of accumulated amortization of $5,463 and $11,753	89,888			29,502
Assets held for sale	—			135,901
Investment in unconsolidated affiliates	22,909			104,973
Cash and cash equivalents	234,405			73,655
Restricted cash and cash equivalents	100,182			75,916
Accounts receivable, net of allowance for doubtful accounts of $443 and $606	58,003			39,660
Deferred financing costs, net of accumulated amortization of $10,199 and $12,354	9,474			8,478
Deferred tax assets	1,763			—
Prepaid expenses and other assets	45,612			35,600
Total assets	$	3,309,914		$	2,337,151
Liabilities, Noncontrolling Interests and Equity
Liabilities:
Mortgages and other debt payable, net of discount	$	1,666,614		$	1,163,696
Bank credit facility	—			110,000
Liabilities of assets held for sale	—			17,027
Accounts payable and accrued expenses	214,627			189,889
Deferred tax liabilities	45,777			46,137
Total liabilities	1,927,018			1,526,749
Commitments and contingencies
Noncontrolling interests in SHR’s operating partnership	9,246			7,534
Equity:
SHR’s shareholders’ equity:
8.50% Series A Cumulative Redeemable Preferred Stock ($0.01 par value per share; 0 and 4,148,141 shares issued and outstanding; liquidation preference $25.00 per share plus accrued distributions and $0 and $103,704 in the aggregate)	—			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; 0 and 3,827,727 shares issued and outstanding; liquidation preference $25.00 per share plus accrued distributions and $0 and $95,693 in the aggregate)	—			92,489
Common stock ($0.01 par value per share; 350,000,000 shares of common stock authorized; 247,382,990 and 205,582,838 shares of common stock issued and outstanding)	2,474			2,056
Additional paid-in capital	2,105,426			1,705,306
Accumulated deficit	(897,171		)	(1,234,952		)
Accumulated other comprehensive loss	(16,102		)	(41,445		)
Total SHR’s shareholders’ equity	1,281,691			710,513
Noncontrolling interests in consolidated affiliates	91,959			92,355
Total equity	1,373,650			802,868
Total liabilities, noncontrolling interests and equity	$	3,309,914		$	2,337,151

Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)

Financial Highlights

Supplemental Financial Data

(in thousands, except per share information)



	September 30, 2014
	Pro Rata Share			Consolidated
Capitalization
Shares of common stock outstanding	247,383			247,383
Operating partnership units outstanding	794			794
Restricted stock units outstanding	1,470			1,470
Combined shares and units outstanding	249,647			249,647
Common stock price at end of period	$	11.65		$	11.65
Common equity capitalization	$	2,908,388		$	2,908,388
Preferred equity capitalization (at $25.00 face value)	90,384			90,384
Consolidated debt	1,667,860			1,667,860
Pro rata share of consolidated debt	(132,561		)	—
Cash and cash equivalents	(234,405		)	(234,405		)
Total enterprise value	$	4,299,666		$	4,432,227
Net Debt / Total Enterprise Value	30.3		%	32.3		%
Preferred Equity / Total Enterprise Value	2.1		%	2.0		%
Common Equity / Total Enterprise Value	67.6		%	65.7		%

Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)

Discontinued Operations

The results of operations of hotels sold are classified as discontinued operations and segregated in the consolidated statements of operations for all periods presented. The following hotels were sold during the nine months ended September 30, 2014:



Hotel	Location	Date Sold	Sales Proceeds
Four Seasons Punta Mita Resort and La Solana land parcel	Punta Mita, Mexico	February 28, 2014	$	206,867,000
Marriott London Grosvenor Square	London, England	March 31, 2014	$	209,233,000	(a)


(a)	There was an outstanding balance of £67,301,000 ($112,150,000) on the mortgage loan secured by the Marriott London Grosvenor Square hotel, which was repaid at the time of closing. The net proceeds we received were $97,083,000.

The following is a summary of income (loss) from discontinued operations for the three and nine months ended September 30, 2014 and 2013 (in thousands):



	Three Months Ended September 30,					Nine Months Ended September 30,
	2014		2013			2014			2013
Hotel operating revenues	$	—	$	13,901		$	17,767		$	51,252
Operating costs and expenses	—		10,641			11,485			36,141
Depreciation and amortization	—		2,338			1,275			6,954
Total operating costs and expenses	—		12,979			12,760			43,095
Operating income	—		922			5,007			8,157
Interest expense	—		(1,879		)	(1,326		)	(5,521		)
Interest income	—		1			2			4
Loss on early extinguishment of debt	—		—			(272		)	—
Foreign currency exchange (loss) gain	—		(37		)	32			151
Income tax benefit (expense)	—		415			(833		)	(1,051		)
Gain on sale, net of tax	63		—			156,492			—
Income (loss) from discontinued operations	$	63	$	(578	)	$	159,102		$	1,740

Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)

Investments in Unconsolidated Affiliates

(in thousands)

We had a 36.4% equity ownership interest in the Hotel del Coronado that we accounted for using the equity method of accounting until we acquired the remaining 63.6% equity ownership interest not previously owned by us on June 11, 2014. We had a 50.0% equity ownership interest in the Fairmont Scottsdale Princess hotel that we accounted for using the equity method of accounting until we acquired the remaining 50.0% equity ownership interest not previously owned by us on March 31, 2014. For purposes of this analysis, the operating results reflect the 36.4% equity ownership interest we held in the Hotel del Coronado prior to June 11, 2014 and the 50.0% equity ownership interest we held in the Fairmont Scottsdale Princess hotel prior to March 31, 2014.



	Three Months Ended September 30, 2014						Three Months Ended September 30, 2013
	Hotel del Coronado		Fairmont Scottsdale Princess		Total		Hotel del Coronado			Fairmont Scottsdale Princess			Total
Total revenues (100%)	$	—	$	—	$	—	$	47,279		$	14,338		$	61,617
Property EBITDA (100%)	$	—	$	—	$	—	$	18,667		$	(302	)	$	18,365
Equity in earnings (losses) of unconsolidated affiliates (SHR ownership)
Property EBITDA	$	—	$	—	$	—	$	6,790		$	(151	)	$	6,639
Depreciation and amortization	—		—		—		(1,896		)	(1,533		)	(3,429		)
Interest expense	—		—		—		(1,950		)	(195		)	(2,145		)
Other expenses, net	—		—		—		(205		)	(16		)	(221		)
Income taxes	—		—		—		(339		)	—			(339		)
Equity in earnings (losses) of unconsolidated affiliates	$	—	$	—	$	—	$	2,400		$	(1,895	)	$	505
EBITDA Contribution:
Equity in earnings (losses) of unconsolidated affiliates	$	—	$	—	$	—	$	2,400		$	(1,895	)	$	505
Depreciation and amortization	—		—		—		1,896			1,533			3,429
Interest expense	—		—		—		1,950			195			2,145
Income taxes	—		—		—		339			—			339
EBITDA Contribution	$	—	$	—	$	—	$	6,585		$	(167	)	$	6,418
FFO Contribution:
Equity in earnings (losses) of unconsolidated affiliates	$	—	$	—	$	—	$	2,400		$	(1,895	)	$	505
Depreciation and amortization	—		—		—		1,896			1,533			3,429
FFO Contribution	$	—	$	—	$	—	$	4,296		$	(362	)	$	3,934



	Nine Months Ended September 30, 2014									Nine Months Ended September 30, 2013
	Hotel del Coronado			Fairmont Scottsdale Princess			Total			Hotel del Coronado			Fairmont Scottsdale Princess			Total
Total revenues (100%)	$	67,863		$	35,006		$	102,869		$	115,367		$	69,498		$	184,865
Property EBITDA (100%)	$	20,761		$	13,191		$	33,952		$	38,487		$	14,772		$	53,259
Equity in earnings of unconsolidated affiliates (SHR ownership)
Property EBITDA	$	7,426		$	6,595		$	14,021		$	13,999		$	7,386		$	21,385
Depreciation and amortization	(3,526		)	(1,551		)	(5,077		)	(5,647		)	(5,005		)	(10,652		)
Interest expense	(3,418		)	(168		)	(3,586		)	(6,384		)	(585		)	(6,969		)
Other expenses, net	(25		)	(30		)	(55		)	(228		)	(35		)	(263		)
Income taxes	143			—			143			(276		)	—			(276		)
Equity in earnings of unconsolidated affiliates	$	600		$	4,846		$	5,446		$	1,464		$	1,761		$	3,225
EBITDA Contribution
Equity in earnings of unconsolidated affiliates	$	600		$	4,846		$	5,446		$	1,464		$	1,761		$	3,225
Depreciation and amortization	3,526			1,551			5,077			5,647			5,005			10,652
Interest expense	3,418			168			3,586			6,384			585			6,969
Income taxes	(143		)	—			(143		)	276			—			276
EBITDA Contribution	$	7,401		$	6,565		$	13,966		$	13,771		$	7,351		$	21,122
FFO Contribution
Equity in earnings of unconsolidated affiliates	$	600		$	4,846		$	5,446		$	1,464		$	1,761		$	3,225
Depreciation and amortization	3,526			1,551			5,077			5,647			5,005			10,652
FFO Contribution	$	4,126		$	6,397		$	10,523		$	7,111		$	6,766		$	13,877

Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)

Leasehold Information

(in thousands)



	Three Months Ended September 30,						Nine Months Ended September 30,
	2014			2013			2014			2013
Marriott Hamburg:
Property EBITDA	$	1,757		$	1,655		$	4,956		$	4,557
Revenue (a)	$	1,264		$	1,416		$	3,882		$	3,776

Lease expense	(1,215		)	(1,202		)	(3,733		)	(3,584		)
Less: Deferred gain on sale-leaseback	(52		)	(52		)	(159		)	(154		)
Adjusted lease expense	(1,267		)	(1,254		)	(3,892		)	(3,738		)

Comparable EBITDA contribution from leasehold	$	(3	)	$	162		$	(10	)	$	38



Security Deposit (b):	September 30, 2014		December 31, 2013
Marriott Hamburg	$	2,400	$	2,611


(a)	For the three and nine months ended September 30, 2014 and 2013, 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.

Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)

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. 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 on non-depreciable assets, 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.

Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)

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

(in thousands)



	Three Months Ended September 30,						Nine Months Ended September 30,
	2014			2013			2014			2013
Net income (loss) attributable to SHR common shareholders	$	20,988		$	3,760		$	318,986		$	(16,414	)
Depreciation and amortization—continuing operations	32,932			23,906			83,195			73,505
Depreciation and amortization—discontinued operations	—			2,338			1,275			6,954
Interest expense—continuing operations	21,844			19,227			59,705			58,350
Interest expense—discontinued operations	—			1,879			1,326			5,521
Income taxes—continuing operations	370			(15		)	616			70
Income taxes—discontinued operations	—			(415		)	833			1,051
Income taxes—sale of assets	—			—			20,451			—
Noncontrolling interests	67			29			1,197			(22		)
Adjustments from consolidated affiliates	(4,070		)	(3,912		)	(11,684		)	(11,015		)
Adjustments from unconsolidated affiliates	(11		)	5,903			8,432			17,936
Preferred shareholder dividends	1,802			6,042			18,795			18,125
EBITDA	73,922			58,742			503,127			154,061
Realized portion of deferred gain on sale-leaseback	(52		)	(52		)	(159		)	(154		)
Loss (gain) on sale of assets—continuing operations	38			1,028			(729		)	755
(Loss) gain on sale of assets—adjustments from consolidated affiliates	(5		)	(370		)	104			(370		)
Gain on sale of assets—discontinued operations	(63		)	—			(176,943		)	—
Loss (gain) on consolidation of affiliates	15			—			(143,451		)	—
Impairment losses and other charges	—			728			—			728
Loss on early extinguishment of debt—continuing operations	609			—			609			—
Loss on early extinguishment of debt—discontinued operations	—			—			272			—
Foreign currency exchange loss (gain)—continuing operations (a)	69			(28		)	75			(26		)
Foreign currency exchange loss (gain)—discontinued operations (a)	—			37			(32		)	(151		)
Non-cash interest rate derivative activity	127			—			127			—
Amortization of below market hotel management agreement	513			—			621			—
Activist shareholder costs	—			—			1,637			—
Comparable EBITDA	$	75,173		$	60,085		$	185,258		$	154,843


(a)	Foreign currency exchange gains or losses applicable to certain balance sheet items held by foreign subsidiaries.

Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)

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 September 30,						Nine Months Ended September 30,
	2014			2013			2014			2013
Net income (loss) attributable to SHR common shareholders	$	20,988		$	3,760		$	318,986		$	(16,414	)
Depreciation and amortization—continuing operations	32,932			23,906			83,195			73,505
Depreciation and amortization—discontinued operations	—			2,338			1,275			6,954
Corporate depreciation	(124		)	(125		)	(370		)	(383		)
Loss (gain) on sale of assets—continuing operations	38			1,028			(729		)	755
Gain on sale of assets, net of tax—discontinued operations	(63		)	—			(156,492		)	—
Loss (gain) on consolidation of affiliates	15			—			(143,451		)	—
Realized portion of deferred gain on sale-leaseback	(52		)	(52		)	(159		)	(154		)
Noncontrolling interests adjustments	(105		)	(25		)	(298		)	(277		)
Adjustments from consolidated affiliates	(2,166		)	(2,269		)	(5,972		)	(5,565		)
Adjustments from unconsolidated affiliates	—			3,429			5,077			10,653
FFO	51,463			31,990			101,062			69,074
Redeemable noncontrolling interests	172			53			1,495			255
FFO—Fully Diluted	51,635			32,043			102,557			69,329
Impairment losses and other charges	—			728			—			728
Non-cash interest rate derivative activity—continuing operations	3,241			(2,222		)	3,131			(6,873		)
Non-cash interest rate derivative activity—discontinued operations	—			(755		)	—			(2,248		)
Loss on early extinguishment of debt—continuing operations	609			—			609			—
Loss on early extinguishment of debt—discontinued operations	—			—			272			—
Foreign currency exchange loss (gain)—continuing operations (a)	69			(28		)	75			(26		)
Foreign currency exchange loss (gain)—discontinued operations (a)	—			37			(32		)	(151		)
Amortization of debt discount	623			—			1,246			—
Amortization of below market hotel management agreement	513			—			621			—
Activist shareholder costs	—			—			1,637			—
Excess of redemption liability over carrying amount of redeemed preferred stock	—			—			6,912			—
Comparable FFO	$	56,690		$	29,803		$	117,028		$	60,759
Comparable FFO per fully diluted share	$	0.23		$	0.14		$	0.51		$	0.29
Weighted average diluted shares (b)	251,862			209,722			229,364			209,125


(a)	Foreign currency exchange gains or losses applicable to certain balance sheet items held by foreign subsidiaries.


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

Strategic Hotels & Resorts, Inc. and Subsidiaries (SHR)

Debt Summary

(dollars in thousands)



Debt	Interest Rate		Spread (a)	Loan Amount			Maturity (b)
Fairmont Scottsdale Princess (c)	0.52	%	36 bp	$	117,000		April 2015
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	89,262			December 2017
Hotel del Coronado (e)	3.81	%	365 bp	475,000			March 2018
Bank credit facility (f)	2.16	%	200 bp	—			April 2019
Four Seasons Washington, D.C. (g)	2.41	%	225 bp	120,000			June 2019
Loews Santa Monica Beach Hotel (h)	2.71	%	255 bp	120,000			May 2021
InterContinental Chicago	5.61	%	Fixed	143,060			August 2021
InterContinental Miami (i)	3.99	%	Fixed	115,000			September 2024
				1,667,860
Unamortized discount (c)				(1,246		)
				$	1,666,614


(a)	Spread over LIBOR (0.16% at September 30, 2014). Interest on the JW Marriott Essex House Hotel loan is subject to a 0.75% LIBOR floor. See (d) below for interest on the Hyatt Regency La Jolla loan.


(b)	Includes extension options.

(c)

On March 31, 2014, we acquired the remaining 50.0% equity interest in the Fairmont Scottsdale Princess hotel, resulting in the Fairmont Scottsdale Princess hotel becoming wholly-owned by us. In connection with the acquisition, we consolidated the Fairmont Scottsdale Princess hotel and became fully obligated under the entire mortgage loan secured by the Fairmont Scottsdale Princess hotel. We recorded the mortgage loan at its fair value, which included a debt discount, which is being amortized as additional interest expense over the maturity period of the loan.


(d)	Interest on $72,000,000 is payable at an annual rate of LIBOR plus 4.00%, subject to a 0.50% LIBOR floor, and interest on $17,262,000 is payable at a fixed rate of 10.00%.


(e)	On June 11, 2014, we acquired the remaining 63.6% equity interest in the Hotel del Coronado, resulting in the Hotel del Coronado becoming wholly-owned by us. In connection with the acquisition, we consolidated the Hotel del Coronado and became fully obligated under the entire outstanding balance of the mortgage and mezzanine loans secured by the Hotel del Coronado.


(f)	On April 25, 2014, we entered into a new $300,000,000 secured bank credit facility, which replaced the previous secured bank credit facility.


(g)	On June 30, 2014, we refinanced the loan secured by the Four Seasons Washington, D.C. hotel.


(h)	On May 29, 2014, we refinanced the loan secured by the Loews Santa Monica Beach Hotel.


(i)	On August 29, 2014, we entered into a new $115,000,000 loan secured by the InterContinental Miami hotel, which replaced the previous $85,000,000 loan.

Debt Summary (Continued)

(dollars in thousands)

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



Years ending December 31,	Amount
2014 (remainder)	$	474
2015	120,140
2016	6,831
2017	573,972
2018	477,299
Thereafter	489,144
	1,667,860
Unamortized discount	(1,246		)
	$	1,666,614

Percent of fixed rate debt	34.7		%
Weighted average interest rate (j)	4.18		%
Weighted average maturity of fixed rate debt (debt with maturity of greater than one year)	5.16

(j) Excludes the amortization of deferred financing costs.

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STRATEGIC HOTELS & RESORTS, INC Reports