UNITED STATES
SECURITIES AND
EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 7, 2011
Morgans Hotel Group
Co.
(Exact name of registrant as
specified in its charter)
Delaware | 001-33738 | 16-1736884 | ||
(State or other Jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
475 Tenth Avenue New York, NY |
10018 | |
(Address of Principal Executive Offices) | (Zip Code) |
Registrant’s telephone number, including area code: (212) 277-4100
Not
applicable |
(Former name or former address if changed since last report.) |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
o Soliciting material pursuant
to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule
14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule
13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 2.02. Results of Operations and Financial Condition.
On November 7, 2011, Morgans Hotel Group Co. (the “Company”) issued a press release announcing its financial results for the quarter ended September 30, 2011. A copy of the press release is furnished as Exhibit 99.1 hereto and is hereby incorporated by reference into this Item 2.02.
The information contained in this current report on Form 8-K, including Exhibit 99.1, shall not be deemed “filed” with the Securities and Exchange Commission nor incorporated by reference in any registration statement filed by the Company under the Securities Act of 1933, as amended.
Item 9.01. Financial Statements and Exhibits.
(d)
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Exhibits. |
The exhibit contained in this current report on Form 8-K shall not be deemed “filed” with the Securities and Exchange Commission nor incorporated by reference in any registration statement filed by the Company under the Securities Act of 1933, as amended.
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Exhibit Number
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Description | |
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99.1
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Press Release dated November 7, 2011 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
MORGANS HOTEL GROUP CO.
Date: November 7, 2011
By: /s/ Richard
Szymanski
Richard Szymanski
Chief Financial
Officer
EXHIBIT INDEX
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Exhibit Number
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Description | |
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99.1
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Press Release dated November 7, 2011 |
| Adjusted EBITDA was $4.9 million in the third quarter of 2011. Excluding the impact of
asset sales, assets held for sale and Hard Rock, Adjusted EBITDA increased by $1.0 million
from the comparable period in 2010. |
| Revenue per available room (RevPAR) for System-Wide Comparable Hotels increased by
9.3%, or 8.4% in constant dollars, in the third quarter of 2011 from the comparable period
in 2010, driven primarily by a 6.3% increase in average daily rate (ADR) (5.4% in
constant dollars). |
| Excluding the impact of Hurricane Irene, EBITDA from Owned Comparable Hotels increased
by 15.3% in the third quarter of 2011 as compared to the same period in 2010, driven by an
8.8% RevPAR increase. |
| Excluding the impact of Hurricane Irene, operating margins at Comparable Owned Hotels
increased by 190 basis points. |
| In August 2011, the Company entered into a hotel management and residential licensing
agreement for a 310-room Mondrian-branded hotel, to be the lifestyle hotel destination in
the 1,000 acre destination resort metropolis, Baha Mar Resort, in Nassau, The Bahamas. |
| During the quarter, the Company transformed its balance sheet by adding liquidity
through a new $100 million credit line, reducing its debt, and eliminating all near-term
consolidated maturities. The Company has retired approximately $240 million of debt in
2011, has no consolidated debt maturities until 2014, and has pro forma liquidity, assuming
the completion of the sale of the London joint venture, of approximately $163 million. |
| In October 2011, the Company and Walton Street, the 50/50 partners in the joint venture
that owns the Sanderson and St Martins Lane hotels, entered into an agreement to sell the
joint venture for £192 million, or approximately $308 million based on todays exchange
rate. The Company expects to receive net proceeds of approximately $70 million on closing
of the transaction, which is expected to occur in the fourth quarter of 2011. |
Three Months | Nine Months | |||||||||||||||
Ended September 30, | Ended September 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Revenues: |
||||||||||||||||
Rooms |
$ | 26,432 | $ | 35,100 | $ | 90,951 | $ | 99,443 | ||||||||
Food & beverage |
15,575 | 16,017 | 49,216 | 51,062 | ||||||||||||
Other hotel |
1,271 | 2,077 | 5,020 | 6,730 | ||||||||||||
Total hotel revenues |
43,278 | 53,194 | 145,187 | 157,235 | ||||||||||||
Management and other fees |
3,408 | 4,547 | 10,112 | 14,079 | ||||||||||||
Total revenues |
46,686 | 57,741 | 155,299 | 171,314 | ||||||||||||
Operating Costs and Expenses: |
||||||||||||||||
Rooms |
8,263 | 11,061 | 29,122 | 31,377 | ||||||||||||
Food & beverage |
13,664 | 14,426 | 41,901 | 42,526 | ||||||||||||
Other departmental |
870 | 1,322 | 3,117 | 3,834 | ||||||||||||
Hotel selling, general and administrative |
9,951 | 12,275 | 33,301 | 35,523 | ||||||||||||
Property taxes, insurance and other |
4,247 | 3,650 | 12,136 | 12,461 | ||||||||||||
Total hotel operating expenses |
36,995 | 42,734 | 119,577 | 125,721 | ||||||||||||
Corporate expenses: |
||||||||||||||||
Stock based compensation |
1,366 | 2,304 | 7,384 | 8,892 | ||||||||||||
Other |
5,671 | 5,741 | 18,536 | 18,378 | ||||||||||||
Depreciation and amortization |
4,833 | 8,173 | 17,405 | 23,529 | ||||||||||||
Restructuring, development and disposal costs |
2,125 | 1,064 | 10,518 | 2,930 | ||||||||||||
Impairment loss on receivables from unconsolidated joint venture |
| 5,499 | | 5,499 | ||||||||||||
Total operating costs and expenses |
50,990 | 65,515 | 173,420 | 184,949 | ||||||||||||
Operating loss |
(4,304 | ) | (7,774 | ) | (18,121 | ) | (13,635 | ) | ||||||||
Interest expense, net |
8,775 | 8,319 | 27,783 | 33,058 | ||||||||||||
Equity in loss of unconsolidated joint ventures |
12,794 | 1,435 | 23,187 | 9,437 | ||||||||||||
Gain on asset sales |
(1,101 | ) | | (1,721 | ) | | ||||||||||
Other non-operating expense |
616 | 20,299 | 2,885 | 35,491 | ||||||||||||
Pre tax loss |
(25,388 | ) | (37,827 | ) | (70,255 | ) | (91,621 | ) | ||||||||
Income tax expense |
230 | 420 | 523 | 994 | ||||||||||||
Net loss from continuing operations |
(25,618 | ) | (38,247 | ) | (70,778 | ) | (92,615 | ) | ||||||||
(Loss) Income from discontinued operations, net of tax |
| (281 | ) | 485 | 16,474 | |||||||||||
Net loss |
(25,618 | ) | (38,528 | ) | (70,293 | ) | (76,141 | ) | ||||||||
Net loss attributable to noncontrolling interest |
799 | 1,451 | 2,007 | 2,033 | ||||||||||||
Net loss attributable to Morgans Hotel Group Co. |
$ | (24,819 | ) | $ | (37,077 | ) | $ | (68,286 | ) | $ | (74,108 | ) | ||||
Preferred stock dividends and accretion |
(2,285 | ) | (2,164 | ) | (6,701 | ) | (6,357 | ) | ||||||||
Net loss attributable to common stockholders |
$ | (27,104 | ) | $ | (39,241 | ) | $ | (74,987 | ) | $ | (80,465 | ) | ||||
(Loss) income per share: |
||||||||||||||||
Basic and diluted from continuing operations |
$ | (0.89 | ) | $ | (1.29 | ) | $ | (2.41 | ) | $ | (3.18 | ) | ||||
Basic and diluted from discontinued operations |
$ | | $ | (0.01 | ) | $ | 0.02 | $ | 0.54 | |||||||
Basic and diluted attributable to common stockholders |
$ | (0.89 | ) | $ | (1.30 | ) | $ | (2.39 | ) | $ | (2.64 | ) | ||||
Weighted average common shares outstanding basic and diluted |
30,617 | 30,162 | 31,359 | 30,470 |
(In Actual Dollars) | (In Constant Dollars, if different) | (In Actual Dollars) | (In Constant Dollars, if different) | |||||||||||||||||||||||||||||||||||||||||||||
Three Months | Three Months | Nine Months | Nine Months | |||||||||||||||||||||||||||||||||||||||||||||
Ended Sept. 30, | % | Ended Sept. 30, | % | Ended Sept. 30, | % | Ended Sept. 30, | % | |||||||||||||||||||||||||||||||||||||||||
2011 | 2010 | Change | 2011 | 2010 | Change | 2011 | 2010 | Change | 2011 | 2010 | Change | |||||||||||||||||||||||||||||||||||||
Hudson |
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Occupancy |
92.9 | % | 92.0 | % | 1.0 | % | 88.1 | % | 87.8 | % | 0.3 | % | ||||||||||||||||||||||||||||||||||||
ADR |
$ | 221.96 | $ | 215.49 | 3.0 | % | $ | 205.78 | $ | 198.92 | 3.4 | % | ||||||||||||||||||||||||||||||||||||
RevPAR |
$ | 206.20 | $ | 198.25 | 4.0 | % | $ | 181.29 | $ | 174.65 | 3.8 | % | ||||||||||||||||||||||||||||||||||||
Delano |
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Occupancy |
58.9 | % | 55.0 | % | 7.1 | % | 66.8 | % | 60.1 | % | 11.1 | % | ||||||||||||||||||||||||||||||||||||
ADR |
$ | 380.65 | $ | 344.50 | 10.5 | % | $ | 481.43 | $ | 483.26 | -0.4 | % | ||||||||||||||||||||||||||||||||||||
RevPAR |
$ | 224.20 | $ | 189.48 | 18.3 | % | $ | 321.60 | $ | 290.44 | 10.7 | % | ||||||||||||||||||||||||||||||||||||
Clift |
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Occupancy |
89.2 | % | 92.6 | % | -3.7 | % | 80.1 | % | 75.5 | % | 6.1 | % | ||||||||||||||||||||||||||||||||||||
ADR |
$ | 216.41 | $ | 188.18 | 15.0 | % | $ | 216.36 | $ | 190.01 | 13.9 | % | ||||||||||||||||||||||||||||||||||||
RevPAR |
$ | 193.04 | $ | 174.25 | 10.8 | % | $ | 173.30 | $ | 143.46 | 20.8 | % | ||||||||||||||||||||||||||||||||||||
Total Owned Comparable Hotels |
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Occupancy |
87.2 | % | 87.0 | % | 0.2 | % | 83.1 | % | 80.7 | % | 3.0 | % | ||||||||||||||||||||||||||||||||||||
ADR |
$ | 235.30 | $ | 219.08 | 7.4 | % | $ | 239.23 | $ | 226.12 | 5.8 | % | ||||||||||||||||||||||||||||||||||||
RevPAR |
$ | 205.18 | $ | 190.60 | 7.7 | % | $ | 198.80 | $ | 182.48 | 8.9 | % | ||||||||||||||||||||||||||||||||||||
St. Martins Lane (2) |
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Occupancy |
83.3 | % | 77.7 | % | 7.2 | % | 83.3 | % | 77.7 | % | 7.2 | % | 73.9 | % | 75.6 | % | -2.2 | % | 73.9 | % | 75.6 | % | -2.2 | % | ||||||||||||||||||||||||
ADR |
$ | 382.44 | $ | 373.15 | 2.5 | % | $ | 383.18 | $ | 388.72 | -1.4 | % | $ | 384.09 | $ | 348.30 | 10.3 | % | $ | 384.09 | $ | 366.49 | 4.8 | % | ||||||||||||||||||||||||
RevPAR |
$ | 318.57 | $ | 289.94 | 9.9 | % | $ | 319.19 | $ | 302.04 | 5.7 | % | $ | 283.84 | $ | 263.31 | 7.8 | % | $ | 283.84 | $ | 277.07 | 2.4 | % | ||||||||||||||||||||||||
Sanderson (2) |
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Occupancy |
76.9 | % | 81.9 | % | -6.1 | % | 76.9 | % | 81.9 | % | -6.1 | % | 74.5 | % | 75.9 | % | -1.8 | % | 74.5 | % | 75.9 | % | -1.8 | % | ||||||||||||||||||||||||
ADR |
$ | 433.81 | $ | 438.94 | -1.2 | % | $ | 434.65 | $ | 457.27 | -4.9 | % | $ | 437.41 | $ | 403.21 | 8.5 | % | $ | 437.41 | $ | 424.27 | 3.1 | % | ||||||||||||||||||||||||
RevPAR |
$ | 333.60 | $ | 359.49 | -7.2 | % | $ | 334.25 | $ | 374.50 | -10.7 | % | $ | 325.87 | $ | 306.04 | 6.5 | % | $ | 325.87 | $ | 322.02 | 1.2 | % | ||||||||||||||||||||||||
Shore Club |
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Occupancy |
56.6 | % | 44.6 | % | 26.9 | % | 62.0 | % | 55.2 | % | 12.3 | % | ||||||||||||||||||||||||||||||||||||
ADR |
$ | 225.43 | $ | 209.44 | 7.6 | % | $ | 287.42 | $ | 286.64 | 0.3 | % | ||||||||||||||||||||||||||||||||||||
RevPAR |
$ | 127.59 | $ | 93.41 | 36.6 | % | $ | 178.20 | $ | 158.23 | 12.6 | % | ||||||||||||||||||||||||||||||||||||
Mondrian South Beach |
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Occupancy |
62.8 | % | 56.5 | % | 11.2 | % | 65.8 | % | 57.1 | % | 15.2 | % | ||||||||||||||||||||||||||||||||||||
ADR |
$ | 189.37 | $ | 165.32 | 14.5 | % | $ | 244.90 | $ | 231.25 | 5.9 | % | ||||||||||||||||||||||||||||||||||||
RevPAR |
$ | 118.92 | $ | 93.41 | 27.3 | % | $ | 161.14 | $ | 132.04 | 22.0 | % | ||||||||||||||||||||||||||||||||||||
Ames |
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Occupancy |
80.3 | % | 80.7 | % | -0.5 | % | 73.6 | % | 66.9 | % | 10.0 | % | ||||||||||||||||||||||||||||||||||||
ADR |
$ | 244.28 | $ | 227.37 | 7.4 | % | $ | 221.75 | $ | 212.94 | 4.1 | % | ||||||||||||||||||||||||||||||||||||
RevPAR |
$ | 196.16 | $ | 183.49 | 6.9 | % | $ | 163.21 | $ | 142.46 | 14.6 | % | ||||||||||||||||||||||||||||||||||||
Morgans (3) |
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Occupancy |
85.7 | % | 88.8 | % | -3.5 | % | 85.8 | % | 90.0 | % | -4.7 | % | ||||||||||||||||||||||||||||||||||||
ADR |
$ | 276.54 | $ | 259.10 | 6.7 | % | $ | 263.38 | $ | 242.29 | 8.7 | % | ||||||||||||||||||||||||||||||||||||
RevPAR |
$ | 236.99 | $ | 230.08 | 3.0 | % | $ | 225.98 | $ | 218.06 | 3.6 | % | ||||||||||||||||||||||||||||||||||||
Royalton (3) |
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Occupancy |
86.7 | % | 85.9 | % | 0.9 | % | 86.3 | % | 88.6 | % | -2.6 | % | ||||||||||||||||||||||||||||||||||||
ADR |
$ | 290.18 | $ | 288.16 | 0.7 | % | $ | 282.73 | $ | 269.24 | 5.0 | % | ||||||||||||||||||||||||||||||||||||
RevPAR |
$ | 251.59 | $ | 247.53 | 1.6 | % | $ | 244.00 | $ | 238.55 | 2.3 | % | ||||||||||||||||||||||||||||||||||||
Mondrian LA (3) |
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Occupancy |
80.8 | % | 78.5 | % | 2.9 | % | 79.1 | % | 71.9 | % | 10.0 | % | ||||||||||||||||||||||||||||||||||||
ADR |
$ | 297.43 | $ | 254.23 | 17.0 | % | $ | 280.74 | $ | 260.66 | 7.7 | % | ||||||||||||||||||||||||||||||||||||
RevPAR |
$ | 240.32 | $ | 199.57 | 20.4 | % | $ | 222.07 | $ | 187.41 | 18.5 | % | ||||||||||||||||||||||||||||||||||||
System-wide Comparable Hotels |
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Occupancy |
80.2 | % | 78.0 | % | 2.8 | % | 80.2 | % | 78.0 | % | 2.8 | % | 77.8 | % | 74.8 | % | 4.0 | % | 77.8 | % | 74.8 | % | 4.0 | % | ||||||||||||||||||||||||
ADR |
$ | 261.83 | $ | 246.41 | 6.3 | % | $ | 261.93 | $ | 248.45 | 5.4 | % | $ | 269.20 | $ | 254.47 | 5.8 | % | $ | 269.20 | $ | 256.81 | 4.8 | % | ||||||||||||||||||||||||
RevPAR |
$ | 209.99 | $ | 192.20 | 9.3 | % | $ | 210.07 | $ | 193.79 | 8.4 | % | $ | 209.44 | $ | 190.34 | 10.0 | % | $ | 209.44 | $ | 192.09 | 9.0 | % | ||||||||||||||||||||||||
Mondrian SoHo (4) |
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Occupancy |
79.5 | % | | n/m | 78.2 | % | | n/m | ||||||||||||||||||||||||||||||||||||||||
ADR |
$ | 298.95 | $ | | n/m | $ | 291.25 | $ | | n/m | ||||||||||||||||||||||||||||||||||||||
RevPAR |
$ | 237.67 | $ | | n/m | $ | 227.76 | $ | | n/m | ||||||||||||||||||||||||||||||||||||||
Hotel Las Palapas (5) |
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Occupancy |
45.0 | % | 47.2 | % | -4.7 | % | 45.0 | % | 47.2 | % | -4.7 | % | 63.7 | % | 57.6 | % | 10.6 | % | 63.7 | % | 57.6 | % | 10.6 | % | ||||||||||||||||||||||||
ADR |
$ | 77.33 | $ | 115.91 | -33.3 | % | $ | 78.94 | $ | 123.47 | -36.1 | % | $ | 84.06 | $ | 139.07 | -39.6 | % | $ | 84.06 | $ | 147.11 | -42.9 | % | ||||||||||||||||||||||||
RevPAR |
$ | 34.80 | $ | 54.71 | -36.4 | % | $ | 35.52 | $ | 58.28 | -39.0 | % | $ | 53.55 | $ | 80.10 | -33.2 | % | $ | 53.55 | $ | 84.74 | -36.8 | % | ||||||||||||||||||||||||
Hard Rock (6) |
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Occupancy |
| 81.3 | % | -100.0 | % | 80.7 | % | 80.2 | % | 0.6 | % | |||||||||||||||||||||||||||||||||||||
ADR |
$ | | $ | 126.02 | -100.0 | % | $ | 128.31 | $ | 128.81 | -0.4 | % | ||||||||||||||||||||||||||||||||||||
RevPAR |
$ | | $ | 102.45 | -100.0 | % | $ | 103.55 | $ | 103.31 | 0.2 | % |
(1) | Not included in the above table are discontinued operations and San Juan Water and Beach
Club, which the Company ceased managing effective July 13, 2011. |
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(2) | In October 2011, MHG and Walton Street, each 50/50 joint venture partners, entered into a
definitive agreement to sell the Sanderson and St Martins Lane hotels. The transaction is
expected to close in Q4 2011. |
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(3) | MHG sold these hotels in May 2011 and continues to manage the hotels pursuant to long-term
management agreements. |
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(4) | MHG began managing this hotel when it opened in February 2011. Statistics are for the period
MHG operated the hotel. |
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(5) | This hotel is not Morgans Hotel Group branded hotel and MHG believes that the hotel operating
data for this hotel does not provide a meaningful depiction of the performance of its branded
hotels. |
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(6) | MHG ceased managing this hotel on March 1, 2011. Statistics for the nine months ended
September 30, 2011 are for the period MHG managed the hotel. In addition, as customary in
the gaming industry, average occupancy and average daily rate for the Hard Rock are presented
including rooms provided on a complimentary basis which is not the practice in the lodging
industry. |
| Other non-operating expenses (income), such as executive terminations not related to
restructuring initiatives, costs of financings, litigation and settlement costs and other
items such as proceeds from the sale of condominium units and related costs that relate to
the financing and investing activities of our assets and not to the on-going operating
performance of our assets, both consolidated and unconsolidated, changes in fair market
value of the warrants issued to investors in the Company, and non-cash impairment charges
recognized by unconsolidated joint ventures in which the Company is an equity investee; |
| Restructuring, development and disposal costs: these charges primarily relate to losses
on asset disposals as part of major renovation projects, the write-off of abandoned
development projects resulting primarily from events generally outside managements control
such as the tightening of credit markets, and severance costs related to restructuring
initiatives. We believe that these charges do not relate to the ongoing operating
performance of our assets as measured by Adjusted EBITDA. |
| Impairment loss on development projects and hotels and receivables from unconsolidated
joint ventures: these charges do not relate to the ongoing operating performance of our
assets as measured by Adjusted EBITDA. To the extent that economic conditions do not
continue to improve, we may incur additional non-cash impairment charges related to our
assets under development, wholly-owned assets, or our investments in joint ventures. We
believe these adjustments are necessary to provide the most accurate measure of core
operating results as a means to evaluate comparative results. |
| The EBITDA related to leased hotels to more accurately reflect the operating performance
of assets in which we have a direct or indirect fee simple ownership interest; |
| The EBITDA related to hotels reported as discontinued operations to more accurately
reflect the operating performance of assets in which we expect to have an ongoing direct or
indirect ownership interest; and |
| Stock-based compensation expense, as this is not necessarily an indication of the
operating performance of our assets. |
Three Months | Nine Months | |||||||||||||||
Ended September 30, | Ended September 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Net loss attributable to Morgans Hotel Group Co. |
$ | (24,819 | ) | $ | (37,077 | ) | $ | (68,286 | ) | $ | (74,108 | ) | ||||
Interest expense, net |
8,775 | 8,319 | 27,783 | 33,058 | ||||||||||||
Income tax expense |
230 | 420 | 523 | 994 | ||||||||||||
Depreciation and amortization expense |
4,833 | 8,173 | 17,405 | 23,529 | ||||||||||||
Proportionate share of interest expense
from unconsolidated joint ventures |
1,863 | 4,253 | 6,579 | 11,624 | ||||||||||||
Proportionate share of depreciation expense
from unconsolidated joint ventures |
1,599 | 4,320 | 5,177 | 9,931 | ||||||||||||
Proportionate share of depreciation expense
of noncontrolling interests in consolidated joint ventures |
| (87 | ) | (183 | ) | (266 | ) | |||||||||
Net loss attributable to noncontrolling interest |
(799 | ) | (1,215 | ) | (2,210 | ) | (2,433 | ) | ||||||||
Proportionate share of (loss) income from unconsolidated joint
ventures not recorded due to negative investment balances |
(5,103 | ) | (5,736 | ) | 1,904 | (12,139 | ) | |||||||||
EBITDA |
(13,421 | ) | (18,630 | ) | (11,308 | ) | (9,810 | ) | ||||||||
Add: Other non operating expense |
616 | 20,299 | 2,885 | 35,491 | ||||||||||||
Add: Other non operating expense from unconsolidated
joint ventures |
17,070 | 1,783 | 17,827 | 9,290 | ||||||||||||
Add: Restructuring, development and disposal costs |
2,125 | 1,064 | 10,518 | 2,930 | ||||||||||||
Add: Impairment loss |
| 5,499 | | 5,499 | ||||||||||||
Less: EBITDA from Clift, a leased hotel |
(1,772 | ) | (1,233 | ) | (3,901 | ) | (1,211 | ) | ||||||||
Add: Stock based compensation |
1,366 | 2,304 | 7,384 | 8,892 | ||||||||||||
Less: Gain on assets sale |
(1,101 | ) | | (1,721 | ) | | ||||||||||
Less: Loss (income) from hotel ownership changes
and discontinued operations |
| 36 | (485 | ) | (17,379 | ) | ||||||||||
Adjusted EBITDA |
$ | 4,883 | $ | 11,122 | $ | 21,199 | $ | 33,702 | ||||||||
Impact of Asset Sales and Terminated Joint Venture Interests: |
||||||||||||||||
Sold Hotels EBITDA (1) |
$ | (696 | ) | $ | 3,593 | $ | 2,705 | $ | 9,418 | |||||||
Sold Hotels Management Fees Post-Sale (2) |
778 | | 1,193 | | ||||||||||||
Asset to be sold EBITDA (3) |
2,040 | 2,781 | 6,041 | 6,537 | ||||||||||||
Hard Rock Hotel & Casino EBITDA (4) |
| 435 | 300 | 1,612 | ||||||||||||
Hard Rock Hotel & Casino Management Fees (5) |
| 2,549 | 832 | 7,424 | ||||||||||||
Impact to Adjusted EBITDA, After Asset Sales and Hard Rock |
$ | 2,122 | $ | 9,358 | $ | 11,071 | $ | 24,991 | ||||||||
(1) | Reflects the EBITDA of Mondrian Los Angeles, Royalton and Morgans, the three hotels sold
by the Company in May 2011, through their respective dates of sale. This hotel EBITDA is not
reduced by any internal management fees earned prior to the date of sale, as these are
eliminated in consolidation. EBITDA recorded in the period after the hotels were sold
primarily relates to the restaurant operations at Morgans, which are owned by the Company and
were closed for re-concepting in October 2011. An immaterial amount of EBITDA recorded after
the hotels were sold relates to post-closing adjustments. |
|
(2) | Reflects the management fees earned by the Company from the date of sale of each hotel
through the end of the period. |
|
(3) | Reflects the EBITDA of Sanderson and St Martins Lane, the London hotels the Company manages
and owns through a 50/50 joint venture. In October 2011, the joint venture entered into a
definitive agreement to sell these hotels. The amounts reflected are the Companys 50% share
of the hotels EBITDA. |
|
(4) | Reflects the EBITDA of the hotel for the period the Company had a minority interest.
Effective March 1, 2011, the Company no longer had an ownership interest in this hotel. |
|
(5) | Reflects the management fees earned by the Company during the period it operated the hotel.
Effective March 1, 2011, the Company ceased managing this hotel. |
Three Months | Nine Months | |||||||||||||||||||||||
Ended September 30, | % | Ended September 30, | % | |||||||||||||||||||||
2011 | 2010 | Change | 2011 | 2010 | Change | |||||||||||||||||||
Hudson (2) |
$ | 4,054 | 4,391 | -8 | % | $ | 8,230 | $ | 10,430 | -21 | % | |||||||||||||
Delano |
1,562 | 1,131 | 38 | % | 10,700 | 9,795 | 9 | % | ||||||||||||||||
Clift |
1,772 | 1,233 | 44 | % | 3,901 | 1,211 | 222 | % | ||||||||||||||||
Owned Comparable Hotels |
7,388 | 6,755 | 9 | % | 22,831 | 21,436 | 7 | % | ||||||||||||||||
Shore Club |
(73 | ) | (44 | ) | 66 | % | 164 | 207 | -21 | % | ||||||||||||||
Mondrian South Beach |
(253 | ) | (404 | ) | -37 | % | 377 | (67 | ) | n/m | ||||||||||||||
Ames |
73 | 151 | -52 | % | 103 | 11 | 836 | % | ||||||||||||||||
Joint Venture Comparable Hotels |
(253 | ) | (297 | ) | -15 | % | 644 | 151 | 326 | % | ||||||||||||||
Owned and Joint Venture Comparable Hotels |
7,135 | 6,458 | 10 | % | 23,475 | 21,587 | 9 | % | ||||||||||||||||
Morgans (3) |
(683 | ) | $ | 242 | n/m | (837 | ) | 637 | n/m | |||||||||||||||
Royalton (3) |
(33 | ) | 302 | n/m | 221 | 625 | -65 | % | ||||||||||||||||
Mondrian Los Angeles (3) |
20 | 3,049 | -99 | % | 3,321 | 8,156 | -59 | % | ||||||||||||||||
St Martins Lane (4) |
1,284 | 1,506 | -15 | % | 3,623 | 3,899 | -7 | % | ||||||||||||||||
Sanderson (4) |
756 | 1,275 | -41 | % | 2,418 | 2,638 | -8 | % | ||||||||||||||||
Hotels to be Sold and Sold Hotels |
1,344 | 6,374 | -79 | % | 8,746 | 15,955 | -45 | % | ||||||||||||||||
Total System-Wide Comparable Hotels |
8,479 | 12,832 | -34 | % | 32,221 | 37,542 | -14 | % | ||||||||||||||||
Hard Rock Joint Venture (5) |
| 435 | -100 | % | 300 | 1,612 | -81 | % | ||||||||||||||||
Mondrian SoHo Joint Venture (6) |
393 | | n/m | 860 | | n/m | ||||||||||||||||||
. | ||||||||||||||||||||||||
Total Hotels |
$ | 8,872 | $ | 13,267 | -33 | % | $ | 33,381 | $ | 39,154 | -15 | % | ||||||||||||
(1) | For joint venture hotels, represents MHGs share of the respective hotels EBITDA, after
management fees. |
|
(2) | The Company estimates that cancellations and direct costs due to Hurricane Irene reduced EBITDA at the hotel during
August 2011 by approximately $0.4 million. |
|
(3) | In May 2011, MHG sold these three hotels. Information is for the period MHG owned the
hotels, and is not reduced by any internal management fees earned prior to the date of sale,
as these are eliminated in consolidation. EBITDA for the periods
after the hotels were sold primarily represents food and beverage
EBITDA related to those F&B venues at the hotels in which MHG
had ownership interest during the period and post-closing adjustments. |
|
(4) | In October 2011, MHG and Walton Street, each 50/50 joint venture partners, entered into a
definitive agreement to sell the Sanderson and St Martins Lane hotels. The transaction is
expected to close in Q4 2011. Amounts represent MHGs share of the respective hotels EBITDA,
after management fees. |
|
(5) | MHG had a minority ownership interest in this hotel until March 1, 2011. Information for the
nine months ended September 30, 2011 is for the period MHG had an ownership interest in the
hotel. |
|
(6) | This hotel opened in February 2011. Information is for the period the hotel was open. |
Three Months | Nine Months | |||||||||||||||||||||||
Ended September 30, | % | Ended September 30, | % | |||||||||||||||||||||
2011 | 2010 | Change | 2011 | 2010 | Change | |||||||||||||||||||
Hudson |
$ | 15,827 | $ | 15,161 | 4 | % | $ | 41,294 | $ | 39,636 | 4 | % | ||||||||||||
Delano |
4,001 | 3,384 | 18 | % | 17,040 | 15,388 | 11 | % | ||||||||||||||||
Clift |
6,603 | 5,965 | 11 | % | 17,601 | 14,563 | 21 | % | ||||||||||||||||
Total Owned Comparable Hotels (1) |
$ | 26,431 | $ | 24,510 | 8 | % | $ | 75,935 | $ | 69,587 | 9 | % | ||||||||||||
Three Months | Nine Months | |||||||||||||||||||||||
Ended September 30, | % | Ended September 30, | % | |||||||||||||||||||||
2011 | 2010 | Change | 2011 | 2010 | Change | |||||||||||||||||||
Hudson |
$ | 19,500 | 19,337 | 1 | % | $ | 51,781 | 50,500 | 3 | % | ||||||||||||||
Delano |
8,313 | 7,593 | 9 | % | 34,305 | 32,373 | 6 | % | ||||||||||||||||
Clift |
9,412 | 8,540 | 10 | % | 26,593 | 23,153 | 15 | % | ||||||||||||||||
Total Owned Comparable Hotels (1) |
$ | 37,225 | $ | 35,470 | 5 | % | $ | 112,679 | $ | 106,026 | 6 | % | ||||||||||||
(1) | Does not include revenue from the three hotels sold in May 2011, Royalton, Morgans or
Mondrian Los Angeles, for the period owned during the nine months ended September 30, 2011, as
these hotels are no longer Owned Comparable Hotels. |
Adjusted | ||||||||
EBITDA | ||||||||
Twelve Months | ||||||||
Ended | Outstanding Debt at | |||||||
Consolidated Operations | Sept. 30, 2011 | Sept. 30, 2011 | ||||||
Hudson, Mortgage Debt and Capital Lease |
$ | 15,232 | $ | 121,107 | ||||
Delano, Revolving Line of Credit |
14,074 | 10,000 | ||||||
Management Fees |
14,371 | |||||||
Corporate Expenses |
(23,809 | ) | ||||||
Other Debt (1) |
| 215,675 | ||||||
Total |
$ | 19,868 | 346,782 | |||||
Less: Cash |
(12,829 | ) | ||||||
Net Debt |
$ | 333,953 | ||||||
(1) | Includes outstanding debt on convertible notes and trust preferred securities and excludes
the lease obligation at Clift. |
Proportionate | ||||||||||||
Share of | ||||||||||||
Adjusted EBITDA | Proportionate | |||||||||||
Twelve Months | Share of | |||||||||||
Joint Venture Comparable | Ownership | Ended | Debt | |||||||||
Hotels (1) | Percentage | Sept. 30, 2011 | Sept. 30, 2011 | |||||||||
Sanderson and St Martins Lane |
50 | % | $ | 9,343 | $ | 77,415 | ||||||
Shore Club |
7 | % | 175 | 8,364 | ||||||||
Mondrian South Beach |
50 | % | 536 | 43,762 | ||||||||
Ames |
31 | % | 206 | 14,173 |
(1) | Includes information only for System-Wide Comparable Hotels that are owned by joint ventures.
Mondrian SoHo, which opened in February 2011, is not included in System-Wide Comparable
Hotels. At September 30, 2011, MHGs proportionate share of third party debt on Mondrian SoHo
is $39.2 million. |
September 30, | December 31, | |||||||
2011 | 2010 | |||||||
ASSETS: |
||||||||
Property and equipment, net |
$ | 283,811 | $ | 291,078 | ||||
Goodwill |
54,057 | 53,691 | ||||||
Investments in and advances to unconsolidated joint ventures |
5,063 | 20,450 | ||||||
Assets held for sale, net |
| 194,964 | ||||||
Investment in property held for non-sale disposition, net |
| 9,775 | ||||||
Cash and cash equivalents |
12,829 | 5,250 | ||||||
Restricted cash |
7,148 | 28,783 | ||||||
Accounts receivable, net |
8,250 | 6,018 | ||||||
Related party receivables |
5,186 | 3,830 | ||||||
Prepaid expenses and other assets |
7,202 | 7,007 | ||||||
Deferred tax asset, net |
81,421 | 80,144 | ||||||
Other, net |
15,834 | 13,786 | ||||||
Total assets |
$ | 480,801 | $ | 714,776 | ||||
LIABILITIES and STOCKHOLDERS DEFICIT: |
||||||||
Debt and capital lease obligations, net |
$ | 433,267 | $ | 558,779 | ||||
Mortgage debt of property held for non-sale disposition |
| 10,500 | ||||||
Accounts payable and accrued liabilities |
32,353 | 23,604 | ||||||
Debt obligations, accounts payable and accrued liabilities of assets held for sale |
| 107,161 | ||||||
Accounts payable and accrued liabilities of property held for non-sale disposition |
| 1,162 | ||||||
Distributions and losses in excess of investment in unconsolidated joint ventures |
272 | 1,509 | ||||||
Deferred gain on asset sales |
77,792 | | ||||||
Other liabilities |
14,291 | 13,866 | ||||||
Total liabilities |
557,975 | 716,581 | ||||||
Total Morgans Hotel Group Co. stockholders deficit |
(85,545 | ) | (12,721 | ) | ||||
Noncontrolling interest |
8,371 | 10,916 | ||||||
Total stockholders deficit |
(77,174 | ) | (1,805 | ) | ||||
Total liabilities and stockholders deficit |
$ | 480,801 | $ | 714,776 | ||||