Attached files
| file | filename |
|---|---|
| 8-K - 8-K/A - Braemar Hotels & Resorts Inc. | ahpbardessono8-k.htm |
| EX-2.1 - EXHIBIT 2.1 - Braemar Hotels & Resorts Inc. | a125685330_6-ex21.htm |
| EX-99.1 - EXHIBIT 99.1 - Braemar Hotels & Resorts Inc. | a847300fs1231141-ex991.htm |
| EX-23.1 - EXHIBIT 23.1 - Braemar Hotels & Resorts Inc. | ahpbardessonoconsent-ex231.htm |
EXHIBIT 99.2
On July 9, 2015, Ashford Hospitality Prime, Inc. ("Ashford Prime" or the "Company") completed the acquisition of the Bardessono Inn & Spa in Napa Valley, California. The fair value of the net assets acquired at the time of the acquisition was approximately $83 million. The Company has not finalized the purchase price allocation related to the assets acquired. The unaudited pro forma financial information has been prepared for informational purposes only and does not purport to be indicative of what would have resulted had the acquisition and related transactions occurred on the date indicated or what may result in the future.
ASHFORD HOSPITALITY PRIME, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
As of March 31, 2015
(in thousands, except share amounts)
Ashford Prime Consolidated Historical (A) | Yountville Investors, LLC(B) | Adjustments(C) | Ashford Prime Consolidated Pro Forma | |||||||||||||||
Assets | ||||||||||||||||||
Cash and cash equivalents | $ | 109,203 | $ | 2,906 | $ | 62,808 | (C)(i) | $ | 95,595 | |||||||||
3,104 | (C)(ii) | |||||||||||||||||
(83,000 | ) | (C)(iii) | ||||||||||||||||
574 | (C)(iv) | |||||||||||||||||
Marketable securities | 61,912 | — | — | 61,912 | ||||||||||||||
Total cash, cash equivalents and marketable securities | 171,115 | 2,906 | (16,514 | ) | 157,507 | |||||||||||||
Investment in hotel properties, net | 984,953 | 39,956 | 83,000 | (C)(iii) | 1,107,909 | |||||||||||||
Restricted cash | 27,457 | — | — | 27,457 | ||||||||||||||
Accounts receivable, net of allowance | 13,418 | 102 | — | 13,520 | ||||||||||||||
Inventories | 673 | 186 | — | 859 | ||||||||||||||
Note receivable | 8,098 | — | — | 8,098 | ||||||||||||||
Deferred costs, net | 5,028 | — | — | 5,028 | ||||||||||||||
Prepaid expenses | 3,782 | 411 | — | 4,193 | ||||||||||||||
Derivative assets | 11 | — | — | 11 | ||||||||||||||
Other assets | 1,965 | 1,159 | (264 | ) | (C)(v) | 2,860 | ||||||||||||
Intangible asset, net | 2,520 | — | — | 2,520 | ||||||||||||||
Due from related party, net | 742 | — | — | 742 | ||||||||||||||
Due from third-party hotel managers | 6,070 | — | — | 6,070 | ||||||||||||||
Total assets | $ | 1,225,832 | $ | 44,720 | $ | 66,222 | $ | 1,336,774 | ||||||||||
Liabilities and Equity | ||||||||||||||||||
Liabilities: | ||||||||||||||||||
Indebtedness | $ | 764,341 | $ | 67,162 | (67,162 | ) | (C)(vi) | $ | 764,341 | |||||||||
Accounts payable and accrued expenses | 30,250 | 8,988 | (4,416 | ) | (C)(vii) | 34,822 | ||||||||||||
Dividends payable | 1,389 | — | — | 1,389 | ||||||||||||||
Unfavorable management contract liabilities | 277 | — | — | 277 | ||||||||||||||
Due to Ashford Trust OP, net | 335 | — | — | 335 | ||||||||||||||
Due to Ashford Inc. | 2,819 | — | — | 2,819 | ||||||||||||||
Due to third-party hotel managers | 860 | — | — | 860 | ||||||||||||||
Intangible liability, net | 3,725 | — | — | 3,725 | ||||||||||||||
Liabilities associated with marketable securities and other | 10,450 | — | — | 10,450 | ||||||||||||||
Deferred rent | — | 3,177 | (3,177 | ) | (C)(viii) | — | ||||||||||||
Other liabilities | 1,109 | 502 | — | 1,611 | ||||||||||||||
Total liabilities | $ | 815,555 | $ | 79,829 | $ | (74,755 | ) | $ | 820,629 | |||||||||
Redeemable noncontrolling interests in operating partnership | 142,179 | — | — | 142,179 | ||||||||||||||
Series A cumulative convertible preferred stock, $.01 par value, 0 shares outstanding at March 31, 2015, 2,600,000 shares issued and outstanding as adjusted | — | — | 62,808 | (C)(i) | 62,808 | |||||||||||||
Equity: | ||||||||||||||||||
Common stock, $0.01 par value, 200,000,000 shares authorized, 25,393,433 shares issued, 24,054,913 shares outstanding at March 31, 2015; 25,593,433 issued and 24,254,913 shares outstanding as adjusted | 254 | — | 2 | (C)(ii) | 256 | |||||||||||||
Additional paid-in capital | 390,610 | (35,109 | ) | 3,102 | (C)(ii) | 433,668 | ||||||||||||
574 | (C)(iv) | |||||||||||||||||
(264 | ) | (C)(v) | ||||||||||||||||
67,162 | (C)(vi) | |||||||||||||||||
4,416 | (C)(vii) | |||||||||||||||||
3,177 | (C)(viii) | |||||||||||||||||
Accumulated deficit | (95,056 | ) | — | — | (95,056 | ) | ||||||||||||
Treasury stock, at cost (1,338,520 shares at March 31, 2015) | (23,102 | ) | — | — | (23,102 | ) | ||||||||||||
Total stockholders’ equity of the Company | 272,706 | (35,109 | ) | 78,169 | 315,766 | |||||||||||||
Noncontrolling interest in consolidated entities | (4,608 | ) | — | — | (4,608 | ) | ||||||||||||
Total equity | 268,098 | (35,109 | ) | 78,169 | 311,158 | |||||||||||||
Total liabilities and equity | $ | 1,225,832 | $ | 44,720 | $ | 66,222 | $ | 1,336,774 | ||||||||||
See accompanying notes.
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
(A) | Represents the historical consolidated balance sheet of Ashford Prime as of March 31, 2015, as reported in its Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2015, filed on May 11, 2015. |
(B) | Represents the historical balance sheet of Yountville Investors, LLC as of March 31, 2015, as included in Exhibit 99.1 of this Current Report on Form 8-K. |
(C) | Represents adjustments for Ashford Prime’s equity offering and purchase of the Bardessono Inn & Spa as of March 31, 2015, which include; (i) the net proceeds received from the offering of 2.6 million shares of Ashford Prime Series A cumulative convertible preferred stock; (ii) the proceeds received from the offering of 200,000 shares of Ashford Prime common stock; (iii) the cash consideration to be paid for the acquisition of the Bardessono Inn & Spa, net of $2 million of key money from Ashford Inc.; (iv) cash consideration received for the negative net working capital assumed from the acquisition of the Bardessono Inn & Spa; (v) the removal of deferred costs that would not have any fair value assigned upon acquisition; (vi) the elimination of indebtedness not assumed from the acquisition of the Bardessono Inn & Spa; (vii) the elimination of accrued interest not assumed from the acquisition of the Bardessono Inn & Spa; and (viii) the removal of deferred rent that would not have any fair value assigned upon acquisition of the Bardessono Inn & Spa. |
ASHFORD HOSPITALITY PRIME, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
Three Months Ended March 31, 2015
(in thousands, except share and per share amounts)
Ashford Prime Consolidated Historical (A) | Yountville Investors, LLC(B) | Adjustments (C) | Ashford Prime Consolidated Pro Forma | |||||||||||||||
Revenue | ||||||||||||||||||
Rooms | $ | 54,497 | $ | 2,164 | $ | — | $ | 56,661 | ||||||||||
Food and beverage | 20,230 | 754 | — | 20,984 | ||||||||||||||
Other | 3,022 | 339 | — | 3,361 | ||||||||||||||
Total hotel revenue | 77,749 | 3,257 | — | 81,006 | ||||||||||||||
Other | 40 | — | — | 40 | ||||||||||||||
Total revenue | 77,789 | 3,257 | — | 81,046 | ||||||||||||||
Expenses | ||||||||||||||||||
Hotel operating expenses: | ||||||||||||||||||
Rooms | 12,978 | 643 | — | 13,621 | ||||||||||||||
Food and beverage | 13,069 | 814 | — | 13,883 | ||||||||||||||
Other expenses | 20,924 | 1,509 | — | 22,433 | ||||||||||||||
Management fees | 3,104 | 106 | (8 | ) | (C)(i) | 3,202 | ||||||||||||
Total hotel operating expenses | 50,075 | 3,072 | (8 | ) | 53,139 | |||||||||||||
Property taxes, insurance and other | 4,595 | 222 | — | 4,817 | ||||||||||||||
Depreciation and amortization | 10,517 | 514 | 426 | (C)(ii) | 11,457 | |||||||||||||
Advisory services fee | 3,220 | — | — | 3,220 | ||||||||||||||
Corporate general and administrative | 1,123 | — | — | 1,123 | ||||||||||||||
Total operating expenses | 69,530 | 3,808 | 418 | 73,756 | ||||||||||||||
Operating income (loss) | 8,259 | (551 | ) | (418 | ) | 7,290 | ||||||||||||
Interest income | 4 | — | — | 4 | ||||||||||||||
Other income | 139 | — | — | 139 | ||||||||||||||
Other expense | — | (292 | ) | 292 | (C)(iii) | — | ||||||||||||
Interest expense and amortization of premiums and loan costs | (9,583 | ) | (1,350 | ) | 1,350 | (C)(iv) | (9,583 | ) | ||||||||||
Write-off of loan costs and exit fees | (54 | ) | — | — | (54 | ) | ||||||||||||
Unrealized gain on marketable securities | 1,323 | — | — | 1,323 | ||||||||||||||
Unrealized loss on derivatives | (32 | ) | — | — | (32 | ) | ||||||||||||
Income (loss) before income taxes | 56 | (2,193 | ) | 1,224 | (913 | ) | ||||||||||||
Income tax expense | (481 | ) | — | (33 | ) | (C)(v) | (514 | ) | ||||||||||
Net income (loss) | (425 | ) | (2,193 | ) | 1,191 | (1,427 | ) | |||||||||||
Loss from consolidated entities attributable to noncontrolling interests | 147 | — | — | 147 | ||||||||||||||
Net loss attributable to redeemable noncontrolling interests in operating partnership | 72 | — | 259 | (C)(vi) | 331 | |||||||||||||
Net income (loss) attributable to the Company | (206 | ) | (2,193 | ) | 1,450 | (949 | ) | |||||||||||
Preferred dividends | — | — | (894 | ) | (C)(vii) | (894 | ) | |||||||||||
Net income (loss) available to common stockholders | $ | (206 | ) | $ | (2,193 | ) | $ | 556 | $ | (1,843 | ) | |||||||
Loss per share – basic and diluted: | ||||||||||||||||||
Loss attributable to common stockholders | $ | (0.01 | ) | $ | (0.04 | ) | ||||||||||||
Weighted average common shares outstanding—basic and diluted | 24,070 | 200 | (C)(viii) | 24,270 | ||||||||||||||
Dividends declared per common share | $ | 0.05 | $ | 0.05 | ||||||||||||||
Amounts attributable to common stockholders: | ||||||||||||||||||
Net loss attributable to the Company | $ | (206 | ) | $ | (2,193 | ) | $ | 1,450 | $ | (949 | ) | |||||||
Preferred dividends | — | — | (894 | ) | (C)(vii) | (894 | ) | |||||||||||
Net income (loss) attributable to common stockholders | $ | (206 | ) | $ | (2,193 | ) | $ | 556 | $ | (1,843 | ) | |||||||
See accompanying notes.
ASHFORD HOSPITALITY PRIME, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
Year Ended December 31, 2014
(in thousands, except share and per share amounts)
Ashford Prime Consolidated Historical (A) | Yountville Investors, LLC(B) | Adjustments (C) | Ashford Prime Consolidated Pro Forma | |||||||||||||||
Revenue | ||||||||||||||||||
Rooms | $ | 226,495 | $ | 12,189 | $ | — | $ | 238,684 | ||||||||||
Food and beverage | 67,854 | 3,548 | — | 71,402 | ||||||||||||||
Other | 12,844 | 1,540 | — | 14,384 | ||||||||||||||
Total hotel revenue | 307,193 | 17,277 | — | 324,470 | ||||||||||||||
Other | 115 | — | — | 115 | ||||||||||||||
Total revenue | 307,308 | 17,277 | — | 324,585 | ||||||||||||||
Expenses | ||||||||||||||||||
Hotel operating expenses: | ||||||||||||||||||
Rooms | 51,636 | 2,737 | — | 54,373 | ||||||||||||||
Food and beverage | 44,297 | 3,422 | — | 47,719 | ||||||||||||||
Other expenses | 80,593 | 5,778 | — | 86,371 | ||||||||||||||
Management fees | 12,525 | 533 | (15 | ) | (C)(i) | 13,043 | ||||||||||||
Total hotel operating expenses | 189,051 | 12,470 | (15 | ) | 201,506 | |||||||||||||
Property taxes, insurance and other | 16,174 | 675 | — | 16,849 | ||||||||||||||
Depreciation and amortization | 40,686 | 2,575 | 1,183 | (C)(ii) | 44,444 | |||||||||||||
Advisory services fee | 12,534 | — | — | 12,534 | ||||||||||||||
Transaction costs | 1,871 | — | — | 1,871 | ||||||||||||||
Corporate general and administrative | 3,242 | — | — | 3,242 | ||||||||||||||
Total operating expenses | 263,558 | 15,720 | 1,168 | 280,446 | ||||||||||||||
Operating income (loss) | 43,750 | 1,557 | (1,168 | ) | 44,139 | |||||||||||||
Interest income | 27 | — | — | 27 | ||||||||||||||
Other expense | — | (235 | ) | 235 | (C)(iii) | — | ||||||||||||
Interest expense and amortization of premiums and loan costs | (39,031 | ) | (5,853 | ) | 5,853 | (C)(iv) | (39,031 | ) | ||||||||||
Unrealized loss on derivatives | (111 | ) | — | — | (111 | ) | ||||||||||||
Income (loss) before income taxes | 4,635 | (4,531 | ) | 4,920 | 5,024 | |||||||||||||
Income tax expense | (1,097 | ) | — | (174 | ) | (C)(v) | (1,271 | ) | ||||||||||
Net income (loss) | 3,538 | (4,531 | ) | 4,746 | 3,753 | |||||||||||||
Income from consolidated entities attributable to noncontrolling interests | (1,103 | ) | — | — | (1,103 | ) | ||||||||||||
Net income attributable to redeemable noncontrolling interests in operating partnership | (496 | ) | — | (190 | ) | (C)(vi) | (686 | ) | ||||||||||
Net income (loss) attributable to the Company | 1,939 | (4,531 | ) | 4,556 | 1,964 | |||||||||||||
Preferred dividends | — | — | (3,575 | ) | (C)(vii) | (3,575 | ) | |||||||||||
Net income (loss) available to common stockholders | $ | 1,939 | $ | (4,531 | ) | $ | 981 | $ | (1,611 | ) | ||||||||
Income per share – basic: | ||||||||||||||||||
Net income attributable to common stockholders | $ | 0.08 | $ | 0.08 | ||||||||||||||
Weighted average common shares outstanding—basic | 24,473 | 200 | (C)(viii) | 24,673 | ||||||||||||||
Income per share – diluted: | ||||||||||||||||||
Net income attributable to common stockholders | $ | 0.07 | $ | 0.07 | ||||||||||||||
Weighted average common shares outstanding—diluted | 33,325 | 3,639 | (C)(viii) | 36,964 | ||||||||||||||
Dividends declared per common share | $ | 0.20 | $ | 0.20 | ||||||||||||||
Amounts attributable to common stockholders: | ||||||||||||||||||
Net income (loss) attributable to the Company | $ | 1,939 | $ | (4,531 | ) | $ | 4,556 | $ | 1,964 | |||||||||
Preferred dividends | — | — | (3,575 | ) | (C)(vii) | (3,575 | ) | |||||||||||
Net income (loss) attributable to common stockholders | $ | 1,939 | $ | (4,531 | ) | $ | 981 | $ | (1,611 | ) | ||||||||
See accompanying notes.
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(A) | Represents the historical consolidated statement of operations of Ashford Prime for the year ended December 31, 2014, as reported in its Annual Report on Form 10-K for the year ended December 31, 2014, filed on March 2, 2015 and the historical consolidated statement of operations of Ashford Prime for the three months ended March 31, 2015, as reported in its Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2015, filed on May 11, 2015. |
(B) | Represents the historical consolidated statement of operations of Yountville Investors, LLC for the the three months ended March 31, 2015 and the year ended December 31, 2014, as included in Exhibit 99.1 of this Current Report on Form 8-K. |
(C) | Represents adjustments for Ashford Prime’s purchase of the Bardessono Inn & Spa for the three months ended March 31, 2015 and the year ended December 31, 2014; which include; (i) a contractual adjustment to management fees for the difference between the historical management fee the seller was obligated to pay and the management fee Ashford Prime contracted to pay; (ii) additional depreciation expense based on Ashford Prime's new cost basis in the acquired hotel; (iii) elimination of nonrecurring transaction costs incurred by the seller associated with the sale of the hotel; (iv)the elimination of interest expense associated with indebtedness not assumed; (v) adjustment to income tax expense to reflect total income tax expense as if the consolidated group filed with the Bardessono Inn & Spa. The incremental income tax expense was calculated by multiplying the estimated taxable income of the Bardessono Inn & Spa by Ashford Prime's effective tax rate which was 36.5% for the three months ended March 31, 2015 and 36.6% for the year ended December 31, 2014; (vi) adjustment to (income) loss attributable to redeemable noncontrolling interests in operating partnership for the incremental operating results of the Bardessono Inn & Spa based on ownership interests of 25.86% for the three months ended March 31, 2015 and 25.88% for the year ended December 31, 2014; (vii) adjustment for preferred dividends; and (viii) adjustment to basic weighted average shares outstanding for the three months ended March 31, 2015 and year ended December 31, 2014 for the issuance of 200,000 shares of Ashford Prime common stock and adjustment to diluted weighted average shares outstanding for the year ended December 31, 2014 for the issuance of 200,000 shares of Ashford Prime common stock and the assumed conversion of 2.6 million shares Ashford Prime Series A cumulative convertible preferred stock into 3.4 million shares of Ashford Prime common stock. For the three months ended March 31, 2015, there was no pro forma adjustment for the assumed conversion of the Ashford Prime Series A cumulative convertible preferred stock as the effect would have been anti-dilutive. |