Attached files
| file | filename |
|---|---|
| 8-K/A - 8-K/A - Braemar Hotels & Resorts Inc. | ahpbardessono8-ka.htm |
| EX-99.1 - EXHIBIT 99.1 - Braemar Hotels & Resorts Inc. | a06-30x15fsxex991.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 June 30, 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 | $ | 180,467 | $ | 4,029 | $ | (83,000 | ) | (C)(i) | $ | 101,645 | ||||||||
149 | (C)(ii) | |||||||||||||||||
Investment in hotel properties, net | 978,678 | 39,561 | 62,184 | (C)(i) | 1,080,423 | |||||||||||||
Restricted cash | 29,372 | — | — | 29,372 | ||||||||||||||
Accounts receivable, net of allowance | 13,184 | 247 | — | 13,431 | ||||||||||||||
Inventories | 682 | 187 | — | 869 | ||||||||||||||
Note receivable | 8,098 | — | — | 8,098 | ||||||||||||||
Deferred costs, net | 4,508 | — | — | 4,508 | ||||||||||||||
Prepaid expenses | 3,149 | 172 | — | 3,321 | ||||||||||||||
Investment in unconsolidated entity | 50,472 | — | — | 50,472 | ||||||||||||||
Derivative assets | 3 | — | — | 3 | ||||||||||||||
Other assets | 6,712 | 1,169 | (237 | ) | (C)(iii) | 7,644 | ||||||||||||
Intangible asset, net | 2,498 | — | 20,816 | (C)(i) | 23,314 | |||||||||||||
Due from related party, net | 649 | — | — | 649 | ||||||||||||||
Due from third-party hotel managers | 8,077 | — | — | 8,077 | ||||||||||||||
Total assets | $ | 1,286,549 | $ | 45,365 | $ | (88 | ) | $ | 1,331,826 | |||||||||
Liabilities and Equity | ||||||||||||||||||
Liabilities: | ||||||||||||||||||
Indebtedness | $ | 762,358 | $ | 66,751 | (66,751 | ) | (C)(iv) | $ | 762,358 | |||||||||
Accounts payable and accrued expenses | 30,685 | 10,606 | (5,415 | ) | (C)(v) | 35,876 | ||||||||||||
Dividends payable | 3,021 | — | — | 3,021 | ||||||||||||||
Unfavorable management contract liabilities | 237 | — | — | 237 | ||||||||||||||
Due to Ashford Trust OP, net | 1,343 | — | — | 1,343 | ||||||||||||||
Due to Ashford Inc. | 2,404 | — | — | 2,404 | ||||||||||||||
Due to third-party hotel managers | 1,142 | — | — | 1,142 | ||||||||||||||
Intangible liability, net | 3,710 | — | — | 3,710 | ||||||||||||||
Deferred rent | — | 3,215 | (3,215 | ) | (C)(vi) | — | ||||||||||||
Other liabilities | 1,091 | 525 | — | 1,616 | ||||||||||||||
Total liabilities | $ | 805,991 | $ | 81,097 | $ | (75,381 | ) | $ | 811,707 | |||||||||
5.50% Series A cumulative convertible preferred stock, $.01 par value, 2,600,000 shares issued and outstanding at June 30, 2015 | 62,823 | — | 62,823 | |||||||||||||||
Redeemable noncontrolling interests in operating partnership | 126,600 | — | — | 126,600 | ||||||||||||||
Equity: | ||||||||||||||||||
Common stock, $0.01 par value, 200,000,000 shares authorized, 25,593,433 shares issued, 24,257,456 shares outstanding at June 30, 2015 | 256 | — | 256 | |||||||||||||||
Additional paid-in capital | 393,921 | (35,732 | ) | 433,482 | ||||||||||||||
149 | (C)(ii) | |||||||||||||||||
(237 | ) | (C)(iii) | ||||||||||||||||
66,751 | (C)(iv) | |||||||||||||||||
5,415 | (C)(v) | |||||||||||||||||
3,215 | (C)(vi) | |||||||||||||||||
Accumulated deficit | (75,506 | ) | — | — | (75,506 | ) | ||||||||||||
Treasury stock, at cost (1,335,977 shares at June 30, 2015) | (23,053 | ) | — | — | (23,053 | ) | ||||||||||||
Total stockholders’ equity of the Company | 295,618 | (35,732 | ) | 75,293 | 335,179 | |||||||||||||
Noncontrolling interest in consolidated entities | (4,483 | ) | — | — | (4,483 | ) | ||||||||||||
Total equity | 291,135 | (35,732 | ) | 75,293 | 330,696 | |||||||||||||
Total liabilities and equity | $ | 1,286,549 | $ | 45,365 | $ | (88 | ) | $ | 1,331,826 | |||||||||
See accompanying notes.
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NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
(A) | Represents the historical consolidated balance sheet of Ashford Prime as of June 30, 2015, as reported in its Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2015, filed on August 10, 2015. |
(B) | Represents the historical balance sheet of Yountville Investors, LLC as of June 30, 2015, as included in Exhibit 99.1 of this Current Report on Form 8-K/A. |
(C) | Represents adjustments for Ashford Prime’s equity offering and purchase of the Bardessono Inn & Spa as of June 30, 2015, which include; (i) the cash consideration to be paid for the acquisition of the Bardessono Inn & Spa, net of $2 million of key money from Ashford Inc.; (ii) cash consideration received for the negative net working capital assumed from the acquisition of the Bardessono Inn & Spa; (iii) the removal of deferred costs that would not have any fair value assigned upon acquisition; (iv) the elimination of indebtedness not assumed from the acquisition of the Bardessono Inn & Spa; (v) the elimination of accrued interest not assumed from the acquisition of the Bardessono Inn & Spa; and (vi) the removal of deferred rent that would not have any fair value assigned upon acquisition of the Bardessono Inn & Spa. |
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ASHFORD HOSPITALITY PRIME, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
Six Months Ended June 30, 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 | $ | 122,284 | $ | 5,607 | $ | — | $ | 127,891 | ||||||||||
Food and beverage | 42,022 | 1,954 | — | 43,976 | ||||||||||||||
Other | 6,243 | 830 | — | 7,073 | ||||||||||||||
Total hotel revenue | 170,549 | 8,391 | — | 178,940 | ||||||||||||||
Other | 77 | — | — | 77 | ||||||||||||||
Total revenue | 170,626 | 8,391 | — | 179,017 | ||||||||||||||
Expenses | ||||||||||||||||||
Hotel operating expenses: | ||||||||||||||||||
Rooms | 27,091 | 1,346 | — | 28,437 | ||||||||||||||
Food and beverage | 26,608 | 1,795 | — | 28,403 | ||||||||||||||
Other expenses | 43,897 | 2,998 | 116 | (C)(ii) | 47,011 | |||||||||||||
Management fees | 6,855 | 258 | (6 | ) | (C)(i) | 7,107 | ||||||||||||
Total hotel operating expenses | 104,451 | 6,397 | 110 | 110,958 | ||||||||||||||
Property taxes, insurance and other | 9,196 | 407 | — | 9,603 | ||||||||||||||
Depreciation and amortization | 21,076 | 1,030 | 113 | (C)(ii) | 22,219 | |||||||||||||
Advisory services fee | 6,262 | — | — | 6,262 | ||||||||||||||
Corporate general and administrative | 2,308 | — | — | 2,308 | ||||||||||||||
Total operating expenses | 143,293 | 7,834 | 223 | 151,350 | ||||||||||||||
Operating income (loss) | 27,333 | 557 | (223 | ) | 27,667 | |||||||||||||
Equity in loss of unconsolidated entity | (820 | ) | — | — | (820 | ) | ||||||||||||
Interest income | 9 | — | — | 9 | ||||||||||||||
Other income | 1,292 | — | — | 1,292 | ||||||||||||||
Other expense | — | (698 | ) | 698 | (C)(iv) | — | ||||||||||||
Interest expense and amortization of premiums and loan costs | (18,712 | ) | (2,675 | ) | 2,675 | (C)(v) | (18,712 | ) | ||||||||||
Write-off of loan costs and exit fees | (54 | ) | — | — | (54 | ) | ||||||||||||
Unrealized loss on derivatives | (40 | ) | — | — | (40 | ) | ||||||||||||
Income (loss) before income taxes | 9,008 | (2,816 | ) | 3,150 | 9,342 | |||||||||||||
Income tax expense | (309 | ) | — | — | (C)(vi) | (309 | ) | |||||||||||
Net income (loss) | 8,699 | (2,816 | ) | 3,150 | 9,033 | |||||||||||||
Loss from consolidated entities attributable to noncontrolling interests | 22 | — | — | 22 | ||||||||||||||
Net income attributable to redeemable noncontrolling interests in operating partnership | (2,203 | ) | — | (138 | ) | (C)(vii) | (2,341 | ) | ||||||||||
Net income (loss) attributable to the Company | 6,518 | (2,816 | ) | 3,012 | 6,714 | |||||||||||||
Preferred dividends | (198 | ) | — | — | (198 | ) | ||||||||||||
Net income (loss) available to common stockholders | $ | 6,320 | $ | (2,816 | ) | $ | 3,012 | $ | 6,516 | |||||||||
Income per share – basic: | ||||||||||||||||||
Income attributable to common stockholders | $ | 0.26 | $ | 0.27 | ||||||||||||||
Weighted average common shares outstanding—basic | 24,043 | 24,043 | ||||||||||||||||
Income per share – diluted: | ||||||||||||||||||
Income attributable to common stockholders | $ | 0.26 | $ | 0.27 | ||||||||||||||
Weighted average common shares outstanding—diluted | 32,519 | (8,476 | ) | (C)(viii) | 24,043 | |||||||||||||
Dividends declared per common share | $ | 0.15 | $ | 0.15 | ||||||||||||||
Amounts attributable to common stockholders: | ||||||||||||||||||
Net income (loss) attributable to the Company | $ | 6,518 | $ | (2,816 | ) | $ | 3,012 | $ | 6,714 | |||||||||
Preferred dividends | (198 | ) | — | — | (198 | ) | ||||||||||||
Net income (loss) attributable to common stockholders | $ | 6,320 | $ | (2,816 | ) | $ | 3,012 | $ | 6,516 | |||||||||
See accompanying notes.
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NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(A) | Represents the historical consolidated statement of operations of Ashford Prime for the six months ended June 30, 2015, as reported in its Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2015, filed on August 10, 2015. |
(B) | Represents the historical consolidated statement of operations of Yountville Investors, LLC for the the six months ended June 30, 2015, as included in Exhibit 99.1 of this Current Report on Form 8-K/A. |
(C) | Represents adjustments for Ashford Prime’s purchase of the Bardessono Inn & Spa for the six months ended June 30, 2015; 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) additional lease expense based on the estimated fair value of the ground lease; (iv) elimination of nonrecurring transaction costs incurred by the seller associated with the sale of the hotel; (v) the elimination of interest expense associated with indebtedness not assumed; (vi) no further adjustment to income tax expense to reflect total income tax expense as if the consolidated group filed with the Bardessono Inn & Spa for the six months ended June 30, 2015; (vii) 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 25.85% for the six months ended June 30, 2015; and (viii) the effect of the conversion of 8.5 million partnership units are excluded from the pro forma diluted EPS calculation as the impact would be anti-dilutive. |
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