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): August 5, 2015
Morgans Hotel Group Co.
(Exact name of registrant as specified in its charter)
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Delaware |
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001-33738 |
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16-1736884 |
(State or other Jurisdiction
of Incorporation) |
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(Commission
File Number) |
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(IRS Employer
Identification No.) |
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475 Tenth Avenue
New York, NY |
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10018 |
(Address of Principal Executive Offices) |
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(Zip Code) |
Registrants 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:
¨ |
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ |
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 August 5, 2015, Morgans Hotel Group Co. (the Company) issued a press release announcing its financial results for the
quarter ended June 30, 2015. 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, regardless of any general incorporation language in any such filing.
Item 9.01. Financial Statements and Exhibits.
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Exhibit
Number |
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Description |
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99.1 |
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Press Release dated August 5, 2015. |
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.
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MORGANS HOTEL GROUP CO. |
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Date: August 5, 2015 |
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By: |
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/s/ Richard Szymanski |
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Name: |
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Richard Szymanski |
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Title: |
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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 August 5, 2015. |
Exhibit 99.1
Contacts:
Investors
Richard Szymanski
Morgans
Hotel Group Co.
212.277.4188
Media
Daniel Gagnier/
Nathaniel Garnick
Sard
Verbinnen & Co
212.687.8080
MORGANS HOTEL GROUP REPORTS SECOND QUARTER 2015 RESULTS
NEW YORK, NY August 5, 2015 Morgans Hotel Group Co. (NASDAQ: MHGC) (the Company) today reported financial results for
the quarter ended June 30, 2015.
Second Quarter Highlights
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Adjusted EBITDA was $12.6 million in the second quarter of 2015 as compared to $16.8 million for the same period in 2014. |
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Excluding The Light Group (TLG), which was sold in January 2015, Adjusted EBITDA was $12.5 million for the second quarter of 2015, a decrease of $1.9 million, or 13.0%, from the same period in 2014.
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Revenue per available room (RevPAR) for System-Wide Comparable Hotels decreased by 5.7% during the second quarter of 2015 as compared to the second quarter of 2014. System-Wide Comparable Hotels room
revenues plus resort fees, implemented at certain hotels in the second half of 2014, decreased 2.2% during the second quarter of 2015 as compared to the same period in 2014. |
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Total hotel operating expenses at the Companys Owned Hotels and leased food and beverage operations decreased $0.8 million, or 2.0%, primarily due to focused and ongoing cost control efforts in hotel general and
administrative expenses. |
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In May 2015, the Company signed a long-term management agreement for Mondrian Dubai which is currently expected to open in 2018 and will be the Companys fifth Mondrian hotel. |
Second Quarter 2015 Operating Results
Adjusted EBITDA,
defined below, for the second quarter of 2015 was $12.6 million compared to $16.8 million for the same period in 2014. Excluding TLG, Adjusted EBITDA was $12.5 million for the second quarter of 2015, a decrease of $1.9 million, or 13.0%, from the
same period in 2014.
RevPAR at System-Wide Comparable Hotels decreased by 5.7% in the second quarter of 2015 as compared to the same period in 2014, due
to a 1.1% decrease in occupancy and a 4.6% decrease in average daily rate (ADR). System-Wide Comparable Hotels room revenues plus resort fees, implemented at certain hotels in the second half of 2014, decreased 2.2% during the
second quarter of 2015 as compared to the same period in 2014. Revenues declined due to increased supply in New York and Miami, as well as the stronger U.S. dollar which has negatively impacted leisure demand in the United States and resulted in
lower ADR.
RevPAR from System-Wide Comparable Hotels in New York decreased 9.8% for the quarter ended June 30, 2015 as
compared to the same period in 2014, due to an 8.7% decrease in ADR and a 1.2% decrease in occupancy. RevPAR at Hudson decreased by 9.7% during the second quarter of 2015 as compared to the same period in 2014, driven primarily by a 9.3% ADR
decrease. Hudsons room revenues plus resort fees decreased by 4.1% during the second quarter of 2015 as compared to the same period in 2014.
RevPAR
from System-Wide Comparable Hotels in Miami decreased 5.7% in the second quarter of 2015 as compared to the second quarter of 2014. Delano South Beach experienced a RevPAR decrease of 8.9% during the second quarter of 2015 as compared to the same
period in 2014. Delanos room revenues plus resort fees decreased 3.8% in the second quarter of 2015 as compared to the same period in 2014.
The
Companys System-Wide Comparable Hotels on the West Coast generated 2.4% RevPAR growth in the second quarter of 2015 as compared to 2014, driven by Mondrian Los Angeles. Although Clifts RevPAR was flat in the second quarter of 2015 as
compared to the same period in 2014, EBITDA increased 14.6% due primarily to cost saving initiatives.
The Companys managed hotels in London are
non-comparable between 2015 and 2014 due to a major renovation of Sanderson and St Martins Lanes guestrooms in 2014 and 2015, which are now complete, as well as the opening of Mondrian London on September 30, 2014.
Excluding TLG, management fees increased $0.2 million, or 7.0%, during the second quarter of 2015 as compared to the same period in 2014, primarily due to the
addition of Mondrian London, Delano Las Vegas and 10 Karaköy, which was partially offset by the termination of the Mondrian SoHo management agreement in April 2015.
Despite relatively flat occupancy, total hotel operating expenses at the Companys Owned Hotels and leased food and beverage operations decreased $0.8
million, or 2.0%, primarily due to focused and ongoing cost control efforts in hotel general and administrative expenses.
Excluding TLG, corporate
expenses, excluding stock compensation expense, decreased $0.5 million, or 10.3%, during the second quarter of 2015 as compared to the same period in 2014, due primarily to the Companys continuing efforts to manage overhead.
Interest expense decreased by $1.0 million, or 7.6%, during the second quarter of 2015 as compared to the same period in 2014, primarily due to the
elimination of interest expense related to the Companys convertible notes, which were repaid in October 2014.
The Company recorded a net loss of
$6.6 million in the second quarter of 2015 compared to a net loss of $9.7 million in the second quarter of 2014, primarily as a result of increased operating income and lower interest expense.
Balance Sheet
The Companys total consolidated debt
at June 30, 2015 was $606.0 million, which included $100.7 million of capital lease obligations related primarily to Clift.
At June 30, 2015,
the Company had approximately $33.0 million in cash and cash equivalents and $13.4 million in restricted cash.
As of June 30, 2015, the Company had approximately $420.1 million of remaining Federal tax net operating
loss carryforwards to offset future income.
Development
In May 2015, the Company signed a long-term management agreement for Mondrian Dubai, which is currently scheduled to open in 2018. Located in the Burj Khalifa
region of Dubai, Mondrian Dubai is expected to have 235-rooms, of which approximately one third are expected to be condo hotel units. There are no capital commitments or cash flow guarantees required under this agreement. Mondrian Dubai will mark
the Companys fifth Mondrian hotel.
The Company has signed management agreements for five hotels in various stages of development, including two
hotels under construction consisting of Mondrian Doha, scheduled to open in late 2015, and Delano Dubai, scheduled to open in 2017.
Investor
Conference Call
The Company will host a conference call to review its second quarter 2015 results on Wednesday, August 5, 2015 at 9:00 AM Eastern
time. The call will be webcast live over the Internet and will be accessible at www.morganshotelgroup.com under the Investors section. Participants should follow the instructions provided on the website for the download and installation of
audio applications necessary to join the webcast.
The call will also be accessible live over the phone by dialing (877) 876-9175 (within the U.S.)
or (785) 424-1668 (outside the U.S.) and providing the following passcode: 1859311. A playback of the conference call will be available beginning at 12:00 PM Eastern time, Wednesday, August 5, 2015, through August 12, 2015. To access
the playback, please dial (888) 203-1112 (within U.S.) or (719) 457-0820 (outside U.S.) and enter passcode 1859311.
Additional Definitions
Adjusted EBITDA means adjusted earnings before interest, taxes, depreciation and amortization, as further defined below. During the third
quarter of 2014, the Company changed its definition of Adjusted EBITDA to include the operating results of Clift, an owned hotel. Management believes the inclusion of Clift, which is subject to a 99-year lease and accounted for as a financing, is a
more accurate depiction of the Companys operating results and is consistent with the Companys presentation of Clift in accordance with generally accepted accounting principles in the United States (U.S. GAAP). Prior periods
have been restated to include Clifts operating results in Adjusted EBITDA.
EBITDA means earnings before interest, income taxes,
depreciation and amortization.
Owned Hotels means Hudson in New York, Delano South Beach in Miami Beach and Clift in San Francisco, which the
Company leases under a long-term lease.
System-Wide Comparable Hotels means all Morgans Hotel Group branded hotels operated by the Company,
except for hotels added or under major renovation during the current or the prior year period, development projects and hotels no longer managed by the Company. System-Wide Comparable Hotels for the quarters ended June 30, 2015 and 2014 exclude
Sanderson and St Martins Lane in London, which were both under major renovations during 2014, Mondrian London, Delano Las Vegas and 10 Karaköy, all of which are newly opened hotels in 2014, and Mondrian SoHo, which the Company no longer managed
effective April 27, 2015.
About Morgans Hotel Group
Morgans Hotel Group Co. (NASDAQ: MHGC) is widely credited as the creator of the first boutique hotel and a continuing leader of the hotel
industrys boutique sector. Morgans Hotel Group operates Delano in South Beach, Mondrian in Los Angeles, South Beach and London, Hudson in New York, Morgans and Royalton in New York, Clift in San Francisco, Shore Club in South Beach and
Sanderson and St Martins Lane in London. Morgans Hotel Group has ownership interests or owns several of these hotels. Morgans Hotel Group also licenses its brand through Delano in Las Vegas and 10 Karaköy in Istanbul, Turkey. Morgans Hotel
Group has other hotels in various stages of development to be operated under management or franchise agreements, including a Mondrian property in Doha, Qatar and a Delano in Dubai. For more information please visit www.morganshotelgroup.com.
Forward-Looking and Cautionary Statements
This
press release may contain certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are generally identifiable by use of forward-looking terminology such as
may, will, should, potential, intend, expect, endeavor, seek, anticipate, estimate, overestimate,
underestimate, believe, could, project, predict, continue or other similar words or expressions. These forward-looking statements reflect the Companys current views about
future events and are subject to risks, uncertainties, assumptions and changes in circumstances that may cause its actual results to differ materially from those expressed in any forward-looking statement. Forward-looking statements in this press
release include, without limitation, statements regarding the Companys expectation related to its ability to grow in the future and expected hotel openings and its development efforts, including the opening of new hotels in the future.
Important risks and factors that could cause the Companys actual results to differ materially from those expressed in any forward-looking statements
include, but are not limited to economic, business, competitive market and regulatory conditions such as: a downturn in economic and market conditions, both in the U.S. and internationally, particularly as it impacts demand for travel, hotels,
dining and entertainment; the Companys levels of debt, its ability to refinance its current outstanding debt, repay outstanding debt or make payments on guaranties as they may become due, general volatility of the capital markets and the
Companys ability to access the capital markets and the ability of its joint ventures to do the foregoing; the impact of financial and other covenants in the Companys loan agreements and other debt instruments that limit the
Companys ability to borrow and restrict its operations; the Companys history of losses; the Companys ability to compete in the boutique or lifestyle hotel segments of the hospitality industry and changes in
the competitive environment in the Companys industry and the markets where it invests; the Companys ability to protect the value of its name, image and brands and its intellectual property; risks related to natural disasters, terrorist
attacks, the threat of terrorist attacks and similar disasters; risks related to the Companys international operations, such as global economic conditions, political or economic instability, compliance with foreign regulations and satisfaction
of international business and workplace requirements; the Companys ability to timely fund the renovations and capital improvements necessary to maintain its properties at the quality of the Morgans Hotel Group and associated brands; risks
associated with the acquisition, development and integration of properties and businesses; the risks of conducting business through joint venture entities over which the Company may not have full control; the Companys ability to perform under
management agreements and to resolve any disputes with owners of properties that the Company manages but does not
wholly own; potential terminations of management agreements; the impact of any material litigation, claims or disputes, including labor disputes; the seasonal nature of the hospitality business
and other aspects of the hospitality industry that are beyond the Companys control; the Companys ability to comply with complex U.S. and international regulations, including regulations related to the environment, labor, food and
beverage operations and data privacy; the Companys ability to maintain effective and competitive technology platforms; ownership of a substantial block of the Companys common stock by a small number of investors and the ability of such
investors to influence key decisions; the impact of any dividend payments or accruals on the Companys preferred securities on its cash flow and the value of its common stock; the impact of any strategic alternatives considered by the Board of
Directors and/or pursued by the Company; the impact of changes in the Companys management team, including the recent resignation of its interim chief executive officer; and other risk factors discussed in the Companys Annual Report on
Form 10-K for the fiscal year ended December 31, 2014, which was filed with the Securities and Exchange Commission (the SEC) on March 13, 2015, and other documents filed by the Company with the SEC from time to time. All
forward-looking statements in this press release are made as of the date hereof, based upon information known to management as of the date hereof, and the Company assumes no obligations to update or revise any of its forward-looking statements even
if experience or future changes show that indicated results or events will not be realized.
Income Statements
(In thousands, except per share amounts)
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Three Months |
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Six Months |
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Ended June 30, |
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Ended June 30, |
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2015 |
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2014 |
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2015 |
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2014 |
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Revenues: |
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|
|
|
|
|
|
|
|
|
|
|
|
|
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Rooms |
|
$ |
30,991 |
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|
$ |
33,118 |
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|
$ |
56,787 |
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|
$ |
60,112 |
|
Food and beverage |
|
|
19,573 |
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|
|
21,004 |
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|
|
40,990 |
|
|
|
42,925 |
|
Other hotel |
|
|
2,138 |
|
|
|
1,308 |
|
|
|
4,223 |
|
|
|
2,470 |
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|
|
|
|
|
|
|
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|
|
|
|
|
|
|
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Total hotel revenues |
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|
52,702 |
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|
|
55,430 |
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|
|
102,000 |
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|
|
105,507 |
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Management fee-related parties and other income |
|
|
3,508 |
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|
|
5,859 |
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|
|
7,516 |
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|
|
11,250 |
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Total revenues |
|
|
56,210 |
|
|
|
61,289 |
|
|
|
109,516 |
|
|
|
116,757 |
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|
|
|
|
|
Operating Costs and Expenses: |
|
|
|
|
|
|
|
|
|
|
|
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Rooms |
|
|
9,414 |
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|
|
9,413 |
|
|
|
18,298 |
|
|
|
18,305 |
|
Food and beverage |
|
|
13,822 |
|
|
|
14,838 |
|
|
|
28,405 |
|
|
|
30,149 |
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Other departmental |
|
|
1,129 |
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|
|
797 |
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|
|
2,219 |
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|
|
1,569 |
|
Hotel selling, general and administrative |
|
|
10,418 |
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|
|
10,769 |
|
|
|
20,570 |
|
|
|
22,355 |
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Property taxes, insurance and other |
|
|
4,411 |
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|
|
4,157 |
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|
|
8,294 |
|
|
|
7,931 |
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|
|
|
|
|
|
|
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Total hotel operating expenses |
|
|
39,194 |
|
|
|
39,974 |
|
|
|
77,786 |
|
|
|
80,309 |
|
Corporate expenses: |
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Stock based compensation |
|
|
578 |
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|
|
804 |
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|
|
922 |
|
|
|
2,748 |
|
Other |
|
|
4,341 |
|
|
|
5,215 |
|
|
|
10,025 |
|
|
|
11,153 |
|
Depreciation and amortization |
|
|
5,563 |
|
|
|
6,681 |
|
|
|
11,200 |
|
|
|
15,083 |
|
Restructuring and disposal costs |
|
|
593 |
|
|
|
3,981 |
|
|
|
2,542 |
|
|
|
11,224 |
|
Development costs |
|
|
457 |
|
|
|
2,666 |
|
|
|
605 |
|
|
|
3,364 |
|
Loss on receivables from unconsolidated joint venture |
|
|
550 |
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|
|
|
|
|
|
550 |
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|
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
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Total operating costs and expenses |
|
|
51,276 |
|
|
|
59,321 |
|
|
|
103,630 |
|
|
|
123,881 |
|
Operating income (loss) |
|
|
4,934 |
|
|
|
1,968 |
|
|
|
5,886 |
|
|
|
(7,124 |
) |
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|
|
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Interest expense, net |
|
|
11,955 |
|
|
|
12,935 |
|
|
|
23,782 |
|
|
|
28,933 |
|
Impairment loss and equity in income of unconsolidated joint ventures |
|
|
(2 |
) |
|
|
(2 |
) |
|
|
3,888 |
|
|
|
(4 |
) |
Gain on asset sales |
|
|
(2,086 |
) |
|
|
(2,005 |
) |
|
|
(5,794 |
) |
|
|
(4,010 |
) |
Other non-operating expenses |
|
|
1,552 |
|
|
|
430 |
|
|
|
3,207 |
|
|
|
1,126 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss before income tax expense |
|
|
(6,485 |
) |
|
|
(9,390 |
) |
|
|
(19,197 |
) |
|
|
(33,169 |
) |
Income tax expense |
|
|
169 |
|
|
|
66 |
|
|
|
295 |
|
|
|
229 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
|
(6,654 |
) |
|
|
(9,456 |
) |
|
|
(19,492 |
) |
|
|
(33,398 |
) |
|
|
|
|
|
Net loss (income) attributable to noncontrolling interest |
|
|
13 |
|
|
|
(263 |
) |
|
|
27 |
|
|
|
(456 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss attributable to Morgans Hotel Group |
|
$ |
(6,641 |
) |
|
$ |
(9,719 |
) |
|
$ |
(19,465 |
) |
|
$ |
(33,854 |
) |
|
|
|
|
|
Preferred stock dividends and accretion |
|
|
(4,075 |
) |
|
|
(3,987 |
) |
|
|
(7,985 |
) |
|
|
(8,354 |
) |
|
|
|
|
|
Net loss attributable to common stockholders |
|
$ |
(10,716 |
) |
|
$ |
(13,706 |
) |
|
$ |
(27,450 |
) |
|
$ |
(42,208 |
) |
|
|
|
|
|
Loss per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted attributable to common stockholders |
|
$ |
(0.31 |
) |
|
$ |
(0.40 |
) |
|
$ |
(0.80 |
) |
|
$ |
(1.24 |
) |
|
|
|
|
|
Weighted average common shares outstanding - basic and diluted |
|
|
34,492 |
|
|
|
34,184 |
|
|
|
34,440 |
|
|
|
33,927 |
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
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|
|
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|
Selected Hotel Operating Statistics |
|
(In Actual Dollars) |
|
|
|
|
|
(In Constant Dollars, if different) |
|
|
(In Actual Dollars) |
|
|
|
|
|
(In Constant Dollars, if different) |
|
|
|
Three Months |
|
|
|
|
|
Three Months |
|
|
|
|
|
Six Months |
|
|
|
|
|
Six Months |
|
|
|
|
|
|
Ended June 30, |
|
|
% |
|
|
Ended June 30, |
|
|
% |
|
|
Ended June 30, |
|
|
% |
|
|
Ended June 30, |
|
|
% |
|
|
|
2015 |
|
|
2014 |
|
|
Change |
|
|
2015 |
|
|
2014 |
|
|
Change |
|
|
2015 |
|
|
2014 |
|
|
Change |
|
|
2015 |
|
|
2014 |
|
|
Change |
|
BY REGION |
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Northeast Comparable Hotels (1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Occupancy |
|
|
92.9 |
% |
|
|
94.0 |
% |
|
|
-1.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
84.6 |
% |
|
|
87.4 |
% |
|
|
-3.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
ADR |
|
$ |
248.31 |
|
|
$ |
271.94 |
|
|
|
-8.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
214.99 |
|
|
$ |
235.32 |
|
|
|
-8.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
RevPAR |
|
$ |
230.68 |
|
|
$ |
255.62 |
|
|
|
-9.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
181.88 |
|
|
$ |
205.67 |
|
|
|
-11.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
West Coast Comparable Hotels (2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Occupancy |
|
|
91.2 |
% |
|
|
91.0 |
% |
|
|
0.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
89.6 |
% |
|
|
87.5 |
% |
|
|
2.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
ADR |
|
$ |
278.40 |
|
|
$ |
272.48 |
|
|
|
2.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
280.84 |
|
|
$ |
270.80 |
|
|
|
3.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
RevPAR |
|
$ |
253.90 |
|
|
$ |
247.96 |
|
|
|
2.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
251.63 |
|
|
$ |
236.95 |
|
|
|
6.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Miami Comparable Hotels (3) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Occupancy |
|
|
71.7 |
% |
|
|
73.5 |
% |
|
|
-2.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
77.5 |
% |
|
|
79.3 |
% |
|
|
-2.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
ADR |
|
$ |
310.30 |
|
|
$ |
321.05 |
|
|
|
-3.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
371.92 |
|
|
$ |
381.13 |
|
|
|
-2.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
RevPAR |
|
$ |
222.49 |
|
|
$ |
235.97 |
|
|
|
-5.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
288.24 |
|
|
$ |
302.24 |
|
|
|
-4.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
United States Comparable Hotels (4) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Occupancy |
|
|
86.4 |
% |
|
|
87.4 |
% |
|
|
-1.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
83.8 |
% |
|
|
85.1 |
% |
|
|
-1.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
ADR |
|
$ |
270.76 |
|
|
$ |
283.92 |
|
|
|
-4.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
273.68 |
|
|
$ |
283.26 |
|
|
|
-3.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
RevPAR |
|
$ |
233.94 |
|
|
$ |
248.15 |
|
|
|
-5.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
229.34 |
|
|
$ |
241.05 |
|
|
|
-4.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
International Comparable Hotels (5) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Occupancy |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ADR |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RevPAR |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
System-wide Comparable Hotels (6) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Occupancy |
|
|
86.4 |
% |
|
|
87.4 |
% |
|
|
-1.1 |
% |
|
|
86.4 |
% |
|
|
87.4 |
% |
|
|
-1.1 |
% |
|
|
83.8 |
% |
|
|
85.1 |
% |
|
|
-1.5 |
% |
|
|
83.8 |
% |
|
|
85.1 |
% |
|
|
-1.5 |
% |
ADR |
|
$ |
270.76 |
|
|
$ |
283.92 |
|
|
|
-4.6 |
% |
|
$ |
270.76 |
|
|
$ |
283.92 |
|
|
|
-4.6 |
% |
|
$ |
273.68 |
|
|
$ |
283.26 |
|
|
|
-3.4 |
% |
|
$ |
273.68 |
|
|
$ |
283.26 |
|
|
|
-3.4 |
% |
RevPAR |
|
$ |
233.94 |
|
|
$ |
248.15 |
|
|
|
-5.7 |
% |
|
$ |
233.94 |
|
|
$ |
248.15 |
|
|
|
-5.7 |
% |
|
$ |
229.34 |
|
|
$ |
241.05 |
|
|
|
-4.9 |
% |
|
$ |
229.34 |
|
|
$ |
241.05 |
|
|
|
-4.9 |
% |
(1) |
Northeast Comparable Hotels for the periods ended June 30, 2015 and 2014 consist of Hudson, Morgans and Royalton in New York. Mondrian SoHo, which effective April 27, 2015 the Company no longer managed, is
non-comparable for the periods presented. |
(2) |
West Coast Comparable Hotels for the periods ended June 30, 2015 and 2014 consist of Mondrian Los Angeles and Clift in San Francisco. Delano Las Vegas, which opened in September 2014, is non-comparable as this
hotel is subject to a license agreement and managed by affiliates of MGM Resorts International (MGM). |
(3) |
Miami Comparable Hotels for the periods ended June 30, 2015 and 2014 consist of Delano South Beach, Mondrian South Beach and Shore Club in Miami Beach, Florida. |
(4) |
United States Comparable Hotels for the periods ended June 30, 2015 and 2014 consist of Hudson, Morgans, Royalton, Mondrian Los Angeles, Clift, Delano South Beach, Mondrian South Beach and Shore Club. Delano Las
Vegas is non-comparable as this hotel opened in September 2014 and is subject to a license agreement and managed by affiliates of MGM. Mondrian SoHo, which effective April 27, 2015 the Company no longer managed, is non-comparable for the
periods presented. |
(5) |
The Company has no International Comparable Hotels for the periods ended June 30, 2015 and 2014. Sanderson and St Martins Lane in London are non-comparable, as they both were under major renovation during 2014.
Mondrian London, which opened on September 30, 2014, is also non-comparable. 10 Karaköy, which opened in November 2014 and is subject to a franchise agreement is non-comparable. |
(6) |
System-Wide Comparable Hotels include all Morgans Hotel Group branded hotels operated by the Company, except for hotels added or under major renovation during the current or the prior year, development projects and
discontinued operations. System-Wide Comparable Hotels for the periods ended June 30, 2015 and 2014 exclude Sanderson and St Martins Lane in London, which both were under renovations during 2014, Delano Las Vegas, which opened in September
2014, is non-comparable as this hotel is subject to a license agreement and managed by affiliates of MGM, Mondrian London, which opened on September 30, 2014, 10 Karaköy, which opened in November 2014 and is subject to a franchise
agreement, and Mondrian SoHo, which effective April 27, 2015, the Company no longer managed. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selected Hotel Operating Statistics |
|
(In Actual Dollars) |
|
|
|
|
|
(In Constant Dollars, if different) |
|
|
(In Actual Dollars) |
|
|
|
|
|
(In Constant Dollars, if different) |
|
|
|
Three Months |
|
|
|
|
|
Three Months |
|
|
|
|
|
Six Months |
|
|
|
|
|
Six Months |
|
|
|
|
|
|
Ended June 30, |
|
|
% |
|
|
Ended June 30, |
|
|
% |
|
|
Ended June 30, |
|
|
% |
|
|
Ended June 30, |
|
|
% |
|
|
|
2015 |
|
|
2014 |
|
|
Change |
|
|
2015 |
|
|
2014 |
|
|
Change |
|
|
2015 |
|
|
2014 |
|
|
Change |
|
|
2015 |
|
|
2014 |
|
|
Change |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BY OWNERSHIP |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Owned Comparable Hotels (1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Occupancy |
|
|
90.8 |
% |
|
|
92.1 |
% |
|
|
-1.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
85.3 |
% |
|
|
87.3 |
% |
|
|
-2.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
ADR |
|
$ |
259.88 |
|
|
$ |
275.82 |
|
|
|
-5.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
254.85 |
|
|
$ |
265.61 |
|
|
|
-4.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
RevPAR |
|
$ |
235.97 |
|
|
$ |
254.03 |
|
|
|
-7.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
217.39 |
|
|
$ |
231.88 |
|
|
|
-6.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Joint Venture Comparable Hotels (2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Occupancy |
|
|
77.7 |
% |
|
|
75.2 |
% |
|
|
3.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
81.9 |
% |
|
|
81.8 |
% |
|
|
0.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
ADR |
|
$ |
247.01 |
|
|
$ |
244.12 |
|
|
|
1.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
301.15 |
|
|
$ |
298.63 |
|
|
|
0.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
RevPAR |
|
$ |
191.93 |
|
|
$ |
183.58 |
|
|
|
4.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
246.64 |
|
|
$ |
244.28 |
|
|
|
1.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Managed Comparable Hotels (3) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Occupancy |
|
|
81.0 |
% |
|
|
82.1 |
% |
|
|
-1.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
81.7 |
% |
|
|
82.1 |
% |
|
|
-0.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
ADR |
|
$ |
297.64 |
|
|
$ |
308.63 |
|
|
|
-3.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
301.10 |
|
|
$ |
311.89 |
|
|
|
-3.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
RevPAR |
|
$ |
241.09 |
|
|
$ |
253.39 |
|
|
|
-4.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
246.00 |
|
|
$ |
256.06 |
|
|
|
-3.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
System-wide Comparable Hotels |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Occupancy |
|
|
86.4 |
% |
|
|
87.4 |
% |
|
|
-1.1 |
% |
|
|
86.4 |
% |
|
|
87.4 |
% |
|
|
-1.1 |
% |
|
|
83.8 |
% |
|
|
85.1 |
% |
|
|
-1.5 |
% |
|
|
83.8 |
% |
|
|
85.1 |
% |
|
|
-1.5 |
% |
ADR |
|
$ |
270.76 |
|
|
$ |
283.92 |
|
|
|
-4.6 |
% |
|
$ |
270.76 |
|
|
$ |
283.92 |
|
|
|
-4.6 |
% |
|
$ |
273.68 |
|
|
$ |
283.26 |
|
|
|
-3.4 |
% |
|
$ |
273.68 |
|
|
$ |
283.26 |
|
|
|
-3.4 |
% |
RevPAR |
|
$ |
233.94 |
|
|
$ |
248.15 |
|
|
|
-5.7 |
% |
|
$ |
233.94 |
|
|
$ |
248.15 |
|
|
|
-5.7 |
% |
|
$ |
229.34 |
|
|
$ |
241.05 |
|
|
|
-4.9 |
% |
|
$ |
229.34 |
|
|
$ |
241.05 |
|
|
|
-4.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Owned Hotels |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hudson |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Occupancy |
|
|
94.5 |
% |
|
|
94.9 |
% |
|
|
-0.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
85.8 |
% |
|
|
88.2 |
% |
|
|
-2.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
ADR |
|
$ |
229.47 |
|
|
$ |
253.02 |
|
|
|
-9.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
196.22 |
|
|
$ |
215.39 |
|
|
|
-8.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
RevPAR |
|
$ |
216.85 |
|
|
$ |
240.12 |
|
|
|
-9.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
168.36 |
|
|
$ |
189.97 |
|
|
|
-11.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Delano South Beach |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Occupancy |
|
|
69.8 |
% |
|
|
74.0 |
% |
|
|
-5.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
72.9 |
% |
|
|
79.9 |
% |
|
|
-8.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
ADR |
|
$ |
452.07 |
|
|
$ |
468.32 |
|
|
|
-3.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
549.74 |
|
|
$ |
544.74 |
|
|
|
0.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
RevPAR |
|
$ |
315.54 |
|
|
$ |
346.56 |
|
|
|
-8.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
400.76 |
|
|
$ |
435.25 |
|
|
|
-7.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Clift |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Occupancy |
|
|
92.8 |
% |
|
|
95.1 |
% |
|
|
-2.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
90.5 |
% |
|
|
89.2 |
% |
|
|
1.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
ADR |
|
$ |
257.54 |
|
|
$ |
250.67 |
|
|
|
2.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
262.10 |
|
|
$ |
250.73 |
|
|
|
4.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
RevPAR |
|
$ |
239.00 |
|
|
$ |
238.39 |
|
|
|
0.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
237.20 |
|
|
$ |
223.65 |
|
|
|
6.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
Owned Comparable Hotels for the periods ended June 30, 2015 and 2014 consist of Hudson, Delano South Beach, and Clift in San Francisco. |
(2) |
Joint Venture Comparable Hotels for the periods ended June 30, 2015 and 2014 consist of Mondrian South Beach. Mondrian SoHo is non-comparable for the periods presented as effective March 6, 2015, the Company
no longer held any equity interests in the Mondrian SoHo joint venture. |
(3) |
Managed Comparable Hotels for the periods ended June 30, 2015 and 2014 consist of Morgans, Royalton, Shore Club, and Mondrian Los Angeles. Managed hotels that are non-comparable for the periods presented are
Sanderson and St Martins Lane in London, which both were under renovations during 2014, Mondrian London, which opened on September 30, 2014, and Mondrian SoHo, which effective April 27, 2015, the Company no longer managed.
|
Non-GAAP Financial Measures
EBITDA and Adjusted EBITDA
The Company believes that
EBITDA is a useful financial metric to assess its operating performance before the impact of investing and financing transactions and income taxes. It also facilitates comparison between the Company and its competitors. Given the significant
investments that the Company and its joint ventures have made in the past in property and equipment, depreciation and amortization expense comprises a meaningful portion of its cost structure. The Company believes that EBITDA will provide investors
with a useful tool for assessing the comparability between periods because it eliminates depreciation and amortization expense attributable to capital expenditures.
The Companys management has historically used Adjusted EBITDA when evaluating the operating performance for the entire Company as well as for individual
properties or groups of properties because it believes the Companys core business model is that of an owner and operator of hotels, and the inclusion or exclusion of certain items is necessary to provide the most accurate measure of on-going
core operating results and to evaluate comparative results period over period. As such, Adjusted EBITDA excludes other non-operating expense (income) that does not relate to the on-going performance of the Companys assets. The Company excludes
the following items from EBITDA to arrive at Adjusted EBITDA:
|
|
|
Other non-operating expenses, such as costs, associated with discontinued operations and previously owned hotels, both consolidated and unconsolidated, transaction costs related to business acquisitions, changes in the
fair value of debt and equity instruments, miscellaneous litigation and settlement costs and other expenses that relate to the financing and investing activities of the Company; |
|
|
|
Restructuring and disposal costs, which include expenses incurred related to the Companys corporate restructuring initiatives, such as professional fees, litigation and settlement costs, executive terminations and
severance costs related to such restructuring initiatives, including the March 2014 corporate office termination plan and proxy contests, and gains or losses on asset disposals as part of major renovation projects or restructuring;
|
|
|
|
Development costs, including transaction costs related to the acquisition or termination of projects, internal development payroll and other costs and pre-opening expenses incurred related to new concepts at existing
hotel and the development of new hotels, and the write-off of abandoned development projects previously capitalized; |
|
|
|
Impairment losses on development projects and unconsolidated joint ventures. The Company may incur additional non-cash impairment charges related to assets under development, wholly-owned assets, or its investments in
joint ventures, including impairment related to uncollectible receivables from development projects and unconsolidated joint ventures. The Company believes these adjustments are necessary to provide the most accurate measure of core operating
results as a means to evaluate comparative results; |
|
|
|
EBITDA related to hotels and food and beverage entities reported as discontinued operations to more accurately reflect the operating performance of assets in which the Company expects to have an ongoing direct or
indirect ownership interest; |
|
|
|
Stock-based compensation expense, as this is not necessarily an indication of the operating performance of the Companys assets; and |
|
|
|
Gains recognized on asset sales, as the Company believes that including them in Adjusted EBITDA is not consistent with reflecting the ongoing performance of its assets. In addition, the Company believes material gains
or losses from the net book value of disposed assets is not particularly meaningful given that the depreciated asset value on which the gains are calculated often does not reflect market value of the assets. |
The Company also makes an adjustment to EBITDA for hotels in which its percentage ownership interest has changed to facilitate period-over-period comparisons
and to more accurately reflect the operating performance of assets based on its actual ownership. In this respect, the Companys method of calculating Adjusted EBITDA may change from prior periods, and calculations of Adjusted EBITDA could
continue to vary from quarter to quarter to reflect changing ownership interests.
The Company believes Adjusted EBITDA provides management and its
investors with a more accurate financial metric by which to evaluate its performance as it eliminates the impact of costs incurred related to investing and financing transactions. Internally, the Companys management utilizes Adjusted EBITDA to
measure the performance of its core on-going operations and is used extensively during its annual budgeting process. Management also uses Adjusted EBITDA as a measure in determining the value of acquisitions, expansion opportunities, and
dispositions and borrowing capacity, and evaluating executive inventive compensation. Adjusted EBITDA is a key metric which management evaluates prior to execution of any strategic investing or financing opportunity.
The Company has historically reported Adjusted EBITDA to its investors and believes that this continued inclusion
of Adjusted EBITDA provides consistency in its financial reporting and enables investors to perform more meaningful comparisons of past, present and future operating results and to evaluate the results of its core on-going operations.
The use of EBITDA and Adjusted EBITDA has certain limitations. The Companys presentation of EBITDA and Adjusted EBITDA may be different from the
presentation used by other companies and therefore comparability may be limited. Depreciation expense for various long-term assets, interest expense, income taxes and other items have been and will be incurred and are not reflected in the
presentation of EBITDA or Adjusted EBITDA. Each of these items should also be considered in the overall evaluation of the Companys results. Additionally, EBITDA and Adjusted EBITDA do not reflect capital expenditures and other investing
activities and should not be considered as a measure of the Companys liquidity. The Company compensates for these limitations by providing the relevant disclosure of its depreciation, interest and income tax expense, capital expenditures and
other items in its reconciliations to its financial measures under U.S. GAAP and/or in its consolidated financial statements, all of which should be considered when evaluating its performance. The term EBITDA is not defined under U.S. GAAP and
EBITDA is not a measure of net income, operating income, operating performance or liquidity presented in accordance with U.S. GAAP. In addition, EBITDA is impacted by reorganization of businesses and other restructuring-related charges. When
assessing the Companys operating performance, you should not consider this data in isolation, or as a substitute for the Companys net income, operating income or any other operating performance measure that is calculated in accordance
with U.S. GAAP.
A reconciliation of net loss, the most directly comparable U.S. GAAP measure, to EBITDA and Adjusted EBITDA for
each of the respective periods indicated is as follows:
EBITDA Reconciliation
(In thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
|
|
2015 |
|
|
2014 |
|
|
2015 |
|
|
2014 |
|
|
|
|
|
|
Net loss attributable to Morgans Hotel Group Co. |
|
$ |
(6,641 |
) |
|
$ |
(9,719 |
) |
|
$ |
(19,465 |
) |
|
$ |
(33,854 |
) |
Interest expense, net |
|
|
11,955 |
|
|
|
12,935 |
|
|
|
23,782 |
|
|
|
28,933 |
|
Income tax expense |
|
|
169 |
|
|
|
66 |
|
|
|
295 |
|
|
|
229 |
|
Depreciation and amortization expense |
|
|
5,563 |
|
|
|
6,681 |
|
|
|
11,200 |
|
|
|
15,083 |
|
Proportionate share of interest expense from unconsolidated joint ventures |
|
|
381 |
|
|
|
1,143 |
|
|
|
1,110 |
|
|
|
2,288 |
|
Proportionate share of depreciation expense from unconsolidated joint ventures |
|
|
117 |
|
|
|
534 |
|
|
|
488 |
|
|
|
925 |
|
Net income attributable to noncontrolling interest |
|
|
(13 |
) |
|
|
(20 |
) |
|
|
(41 |
) |
|
|
(73 |
) |
Proportionate share of loss from unconsolidated joint ventures not recorded due to negative investment balances |
|
|
(1,050 |
) |
|
|
(1,340 |
) |
|
|
(1,912 |
) |
|
|
(2,799 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA |
|
|
10,481 |
|
|
|
10,280 |
|
|
|
15,457 |
|
|
|
10,732 |
|
|
|
|
|
|
Other non operating expenses |
|
|
1,552 |
|
|
|
430 |
|
|
|
3,207 |
|
|
|
1,126 |
|
Other non operating expense from unconsolidated joint ventures |
|
|
472 |
|
|
|
602 |
|
|
|
879 |
|
|
|
1,218 |
|
Restructuring and disposal costs |
|
|
593 |
|
|
|
3,981 |
|
|
|
2,542 |
|
|
|
11,224 |
|
Development costs |
|
|
457 |
|
|
|
2,666 |
|
|
|
605 |
|
|
|
3,364 |
|
Impairment loss on development project and unconsolidated joint venture |
|
|
550 |
|
|
|
|
|
|
|
4,442 |
|
|
|
|
|
Stock based compensation expense |
|
|
578 |
|
|
|
804 |
|
|
|
922 |
|
|
|
2,748 |
|
Gain on asset sales |
|
|
(2,086 |
) |
|
|
(2,005 |
) |
|
|
(5,794 |
) |
|
|
(4,010 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA |
|
$ |
12,597 |
|
|
$ |
16,758 |
|
|
$ |
22,260 |
|
|
$ |
26,402 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA, Excluding The Light Group |
|
$ |
12,512 |
|
|
$ |
14,379 |
|
|
$ |
22,175 |
|
|
$ |
22,142 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hotel EBITDA Analysis (1)
(In thousands, except percentages)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
|
|
% |
|
|
Six Months Ended June 30, |
|
|
% |
|
|
|
2015 |
|
|
2014 |
|
|
Change |
|
|
2015 |
|
|
2014 |
|
|
Change |
|
|
|
|
|
|
|
|
Hudson |
|
$ |
6,706 |
|
|
$ |
8,218 |
|
|
|
-18 |
% |
|
$ |
5,598 |
|
|
$ |
7,360 |
|
|
|
-24 |
% |
Delano South Beach |
|
|
3,872 |
|
|
|
4,261 |
|
|
|
-9 |
% |
|
|
12,045 |
|
|
|
12,211 |
|
|
|
-1 |
% |
Clift |
|
|
2,270 |
|
|
|
1,981 |
|
|
|
14.6 |
% |
|
|
4,755 |
|
|
|
3,426 |
|
|
|
39 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Owned Comparable Hotels (2) |
|
|
12,848 |
|
|
|
14,460 |
|
|
|
-11 |
% |
|
|
22,398 |
|
|
|
22,997 |
|
|
|
-3 |
% |
|
|
|
|
|
|
|
Mondrian South Beach - Joint Venture |
|
|
(78 |
) |
|
|
18 |
|
|
|
-533 |
% |
|
|
457 |
|
|
|
492 |
|
|
|
-7 |
% |
Mondrian SoHo (3) |
|
|
|
|
|
|
925 |
|
|
|
-100 |
% |
|
|
112 |
|
|
|
1,145 |
|
|
|
-90 |
% |
Las Vegas restaurant leases (4) |
|
|
662 |
|
|
|
995 |
|
|
|
-33 |
% |
|
|
1,817 |
|
|
|
2,259 |
|
|
|
-20 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Hotel and F&B EBITDA |
|
|
584 |
|
|
|
1,938 |
|
|
|
130 |
% |
|
|
2,386 |
|
|
|
3,896 |
|
|
|
161 |
% |
|
|
|
|
|
|
|
Total Hotel and F&B EBITDA |
|
$ |
13,432 |
|
|
$ |
16,398 |
|
|
|
-18 |
% |
|
$ |
24,784 |
|
|
$ |
26,893 |
|
|
|
-8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
For joint venture hotel, represents the Companys share of the respective hotels EBITDA, after management fees. |
(2) |
Reflects the Companys comparable owned hotels. |
(3) |
Effective March 6, 2015, the Company no longer holds any equity ownership in Mondrian SoHo, and effective April 27, 2015, the Company no longer managed this hotel. For 2015, EBITDA reflects the Companys
share of Mondrian SoHos EBITDA, after management fees, for the period from January 1, 2015 through March 5, 2015. |
(4) |
Reflects EBITDA from the leasehold interests in three food and beverage venues at Mandalay Bay in Las Vegas which the Company acquired in August 2012. |
Owned Hotel Room Revenue Analysis
(In thousands, except percentages)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months |
|
|
|
|
|
Six Months |
|
|
|
|
|
|
Ended June 30, |
|
|
% |
|
|
Ended June 30, |
|
|
% |
|
|
|
2015 |
|
|
2014 |
|
|
Change |
|
|
2015 |
|
|
2014 |
|
|
Change |
|
|
|
|
|
|
|
|
Hudson |
|
$ |
17,331 |
|
|
$ |
18,931 |
|
|
|
-8 |
% |
|
$ |
26,745 |
|
|
$ |
29,767 |
|
|
|
-10 |
% |
Delano South Beach |
|
|
5,574 |
|
|
|
6,120 |
|
|
|
-9 |
% |
|
|
14,074 |
|
|
|
15,288 |
|
|
|
-8 |
% |
Clift |
|
|
8,086 |
|
|
|
8,067 |
|
|
|
0 |
% |
|
|
15,968 |
|
|
|
15,057 |
|
|
|
6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Owned Hotels |
|
$ |
30,991 |
|
|
$ |
33,118 |
|
|
|
-6 |
% |
|
$ |
56,787 |
|
|
$ |
60,112 |
|
|
|
-6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Owned Hotel Revenue Analysis
(In thousands, except percentages)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months |
|
|
|
|
|
Six Months |
|
|
|
|
|
|
Ended June 30, |
|
|
% |
|
|
Ended June 30, |
|
|
% |
|
|
|
2015 |
|
|
2014 |
|
|
Change |
|
|
2015 |
|
|
2014 |
|
|
Change |
|
|
|
|
|
|
|
|
Hudson |
|
$ |
22,857 |
|
|
$ |
24,365 |
|
|
|
-6 |
% |
|
$ |
36,295 |
|
|
$ |
38,926 |
|
|
|
-7 |
% |
Delano South Beach |
|
|
10,841 |
|
|
|
11,131 |
|
|
|
-3 |
% |
|
|
27,025 |
|
|
|
27,743 |
|
|
|
-3 |
% |
Clift |
|
|
10,769 |
|
|
|
11,030 |
|
|
|
-2 |
% |
|
|
21,931 |
|
|
|
21,363 |
|
|
|
3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Owned Hotels |
|
$ |
44,467 |
|
|
$ |
46,526 |
|
|
|
-4 |
% |
|
$ |
85,251 |
|
|
$ |
88,032 |
|
|
|
-3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance Sheets
(In thousands)
|
|
|
|
|
|
|
|
|
|
|
June 30, |
|
|
December 31, |
|
|
|
2015 |
|
|
2014 |
|
|
|
|
ASSETS: |
|
|
|
|
|
|
|
|
Property and equipment, net |
|
$ |
269,949 |
|
|
$ |
277,825 |
|
Goodwill |
|
|
54,057 |
|
|
|
54,057 |
|
Investments in and advances to unconsolidated joint ventures |
|
|
6,600 |
|
|
|
10,492 |
|
Assets held for sale |
|
|
|
|
|
|
34,284 |
|
Cash and cash equivalents |
|
|
32,994 |
|
|
|
13,493 |
|
Restricted cash |
|
|
13,391 |
|
|
|
13,939 |
|
Accounts receivable, net |
|
|
9,470 |
|
|
|
10,475 |
|
Related party receivables |
|
|
2,735 |
|
|
|
3,560 |
|
Prepaid expenses and other assets |
|
|
10,822 |
|
|
|
8,493 |
|
Deferred tax asset, net |
|
|
77,592 |
|
|
|
77,204 |
|
Other assets, net |
|
|
42,940 |
|
|
|
47,422 |
|
|
|
|
|
|
|
|
|
|
Total assets |
|
$ |
520,550 |
|
|
$ |
551,244 |
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES and STOCKHOLDERS DEFICIT: |
|
|
|
|
|
|
|
|
Debt and capital lease obligations, net |
|
$ |
606,052 |
|
|
$ |
605,743 |
|
Accounts payable and accrued liabilities |
|
|
31,076 |
|
|
|
32,524 |
|
Accounts payable and accrued liabilities of assets held for sale |
|
|
|
|
|
|
1,128 |
|
Deferred gain on asset sales |
|
|
121,388 |
|
|
|
125,398 |
|
Other liabilities |
|
|
13,866 |
|
|
|
13,866 |
|
|
|
|
|
|
|
|
|
|
Total liabilities |
|
|
772,382 |
|
|
|
778,659 |
|
|
|
|
Redeemable noncontrolling interest |
|
|
|
|
|
|
5,042 |
|
Commitments and contingencies |
|
|
|
|
|
|
|
|
|
|
|
Total Morgans Hotel Group Co. stockholders deficit |
|
|
(252,340 |
) |
|
|
(233,006 |
) |
Noncontrolling interest |
|
|
508 |
|
|
|
549 |
|
|
|
|
|
|
|
|
|
|
Total deficit |
|
|
(251,832 |
) |
|
|
(232,457 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities, redeemable noncontrolling interest and stockholders deficit |
|
$ |
520,550 |
|
|
$ |
551,244 |
|
|
|
|
|
|
|
|
|
|
Morgans Hotel Grp. Co. (NASDAQ:MHGC)
Historical Stock Chart
From Mar 2024 to Apr 2024
Morgans Hotel Grp. Co. (NASDAQ:MHGC)
Historical Stock Chart
From Apr 2023 to Apr 2024