EX-99.3 4 dex993.htm PRO FORMA FINANCIAL STATEMENTS Pro Forma Financial Statements

Exhibit 99.3

 

EAGLE HOSPITALITY PROPERTIES TRUST, INC.

Pro Forma Consolidated Balance Sheet

As of December 31, 2004

(Unaudited, $ in thousands)

 

The accompanying unaudited Pro Forma Consolidated Balance Sheet as of December 31, 2004 is presented as if the following transactions (together the “Acquired Hotels” ) had been consummated as of December 31, 2004:

 

  •   $100,000, 8.25% Preferred Stock Offering (occurred June 2005)

 

  •   Embassy Suites Hotel Phoenix-Scottsdale (purchased February 2005)

 

  •   Hilton Glendale (purchased June 2005)

 

  •   Embassy Suites Hotel & Casino San Juan (purchased June 2005)

 

This pro forma consolidated statement should be read in conjunction with the historical financial statements and notes thereto. In management’s opinion, all material adjustments necessary to reflect the effects of the acquisition of the acquired hotels have been made.

 

The following unaudited Pro Forma Consolidated Balance Sheet is not necessarily indicative of what actual financial position of the Company would have been assuming such transaction had been completed as of December 31, 2004, nor is it indicative of future financial positions of the Company.

 

EAGLE HOSPITALITY PROPERTIES TRUST, INC.

Pro Forma Consolidated Balance Sheet

As of December 31, 2004

(Unaudited, $ in thousands)

 

     A)     B)     C)       
     Company
     Acquisition of
Hotel Properties
     Preferred Stock
Offering
    Pro Forma
  
ASSETS                                

Cash and cash equivalents

    $ 15,661     $ (60,992 )   $ 96,665    $ 51,334  

Restricted cash - reserves

      10,240       501              10,741  

Accounts receivable, net

      2,437       941              3,378  

Inventories

      454       37              491  

Deferred franchise fees and intangibles, net

      505       336              841  

Prepaid expenses and other assets

      2,848       94              2,942  

Investment in hotel properties, net

      220,239       173,889              394,128  
    
 
 
  

Total assets

    $ 252,384     $ 114,806     $ 96,665    $ 463,855  
    
 
 
  
LIABILITIES AND OWNER’S EQUITY                                

Mortgage notes payable

    $ 107,316     $ 113,400     $ —      $ 220,716  

Other long term debt

      58       —                58  

Related party debt

      23,391       —                23,391  

Capital lease obligations

      30       13              43  

Accounts payable

      1,564       368              1,932  

Due to affiliates

      1,088       —                1,088  

Accrued expenses

      4,269       917              5,186  

Advance deposits

      476       108              584  
    
 
 
  

Total liabilities

      138,192       114,806       —        252,998  

Minority Interest

      17,035       —                17,035  

Preferred stock, $0.01 par value, 10,000,000 shares authorized, 4,000 issued

      —         —         40      40  

Common stock, $0.01 par value, 100,000,000 shares authorized 17,359 shares issued and outstanding

      174       —                174  

Additional paid-in capital

      100,487       —         96,625      197,112  

Accumulated other comprehensive income

      22       —                22  

Deferred compensation

      (3,623 )     —                (3,623 )

Retained earnings(deficit)

      97       —                97  
    
 
 
  

Total owners’ equity

      97,157       —         96,665      193,822  
    
 
 
  

Total liabilities and owners’ equity

    $ 252,384     $ 114,806     $ 96,665    $ 463,855  
    
 
 
  

 

A) Audited Consolidated Balance Sheet of the Company as of December 31, 2004

 

B) Represents the purchases of the Embassy Suites Phoenix-Scottdale, Hilton Glendale and Embassy Suites Hotel & Casino San Juan as if they had occurred on December 31, 2004. The net cash represents the cash of the acquired hotels, less the cash used by the Company to acquire the hotels

 

C) Reflects net cash provided by the $100,000, 8.25% Preferred Stock offering, less expenses

 

The Company’s investment in hotel properties for the acquired hotels was allocated in the following manner for this pro forma as of December 31, 2004

 

     Embassy Suites
Phoenix-
Scottsdale
    Hilton Glendale
    Embassy Suites
Hotel & Casino
San Juan

Land

    $ 2,154    $ 5,600    $ 9,800

Building

      27,777      71,149      49,726

FF&E

      2,892      3,169      1,622
    
  
  

Investment in hotel properties

    $ 32,823    $ 79,918    $ 61,148
    
  
  

 

The increase in the mortgage note payable is a result of a 3-year $22,100 loan secured by the Embassy Suites Phoenix-Scottsdale, a 7-year $53,100 loan secured by the Hilton Glendale and a 7-year $38,200 loan secured by the Embassy Suites Hotel & Casino San Juan that the Company entered into subsequent to the acquisitions

 

EAGLE HOSPITALITY PROPERTIES TRUST, INC.

Pro Forma Consolidated Balance Sheet

As of March 31, 2005

(Unaudited, $ in thousands)

 

The accompanying unaudited Pro Forma Consolidated Balance Sheet as of March 31, 2005 is presented as if the following transactions (together the “Acquired Hotels” ) had been consummated as of March 31, 2005:

 

  •   $100,000, 8.25% Preferred Stock Offering (occurred June 2005)

 

  •   Hilton Glendale (purchased June 2005)

 

  •   Embassy Suites Hotel & Casino San Juan (purchased June 2005)

 

This pro forma consolidated statement should be read in conjunction with the historical financial statements and notes thereto. In management’s opinion, all adjustments necessary to reflect the effects of the acquisition of the acquired hotels have been made.

 

The following unaudited Pro Forma Consolidated Balance Sheet is not necessarily indicative of what actual financial position of the Company would have been assuming such transaction had been completed as of March 31, 2005, nor is it indicative of future financial positions of the Company.

 

EAGLE HOSPITALITY PROPERTIES TRUST, INC.

Pro Forma Consolidated Balance Sheet

As of March 31, 2005

(Unaudited, $ in thousands)

 

     A)     B)     C)       
     Company
     Acquisition of
Hotel Properties
     Preferred Stock
Offering
    Pro Forma
  
ASSETS                                

Cash and cash equivalents

    $ 12,422     $ (50,774 )   $ 96,665    $ 58,313  

Restricted cash - reserves

      9,842       —                9,842  

Accounts receivable, net

      2,989       616              3,605  

Inventories

      479       —                479  

Deferred income taxes

      1,495       —                1,495  

Deferred franchise fees and intangibles, net

      1,698       333              2,031  

Prepaid expenses and other assets

      1,064       59              1,123  

Investment in hotel properties, net

      254,302       141,066              395,368  
    
 
 
  

Total assets

    $ 284,291     $ 91,300     $ 96,665    $ 472,256  
    
 
 
  
LIABILITIES AND OWNER’S EQUITY                                

Mortgage notes payable

    $ 163,000     $ 91,300     $ —      $ 254,300  

Other long term debt

      54       —                54  

Capital lease obligations

      15       —                15  

Accounts payable

      1,555       —                1,555  

Due to affiliates

      1,414       —                1,414  

Dividends and distributions payable

      4,087       —                4,087  

Accrued expenses

      5,849       —                5,849  

Advance deposits

      762       —                762  
    
 
 
  

Total liabilities

      176,736       91,300       —        268,036  

Minority Interest

      15,160       —                15,160  

Preferred stock, $0.01 par value, 10,000,000 shares authorized, 4,000 issued

      —         —         40      40  

Common stock, $0.01 par value, 100,000,000 shares authorized 17,359 shares issued and outstanding

      174       —                174  

Additional paid-in capital

      100,523       —         96,625      197,148  

Accumulated other comprehensive income

      11       —                11  

Deferred compensation

      (2,980 )     —                (2,980 )

Retained earnings (deficit)

      (5,333 )     —                (5,333 )
    
 
 
  

Total owners’ equity

      92,395       —         96,665      189,060  
    
 
 
  

Total liabilities and owners’ equity

    $ 284,291     $ 91,300     $ 96,665    $ 472,256  
    
 
 
  

 

A) Unaudited Consolidated Balance Sheet of the Company as of March 31, 2005

 

B) Represents the purchases of the Hilton Glendale and Embassy Suites Hotel & Casino San Juan as if they had occurred on March 31, 2005. The net cash represents the cash of the acquired hotels, less the cash used by the Company to acquire the hotels

 

C) Reflects net cash provided by the $100,000, 8.25% Preferred Stock offering, less expenses

 

The Company’s investment in hotel properties for the acquired hotels was allocated in the following manner for this pro forma as of December 31, 2004

 

     Hilton Glendale
    Embassy Suites
Hotel & Casino
San Juan

Land

    $ 5,600    $ 9,800

Building

      71,149      49,726

FF&E

      3,169      1,622
    
  

Investment in hotel properties

    $ 79,918    $ 61,148
    
  

 

The increase in the mortgage note payable is a result of a 7-year $53,100 loan secured by the Hilton Glendale and a 7-year $38,200 loan secured by the Embassy Suites Hotel & Casino that the Company entered into subsequent to the acquisition

 

EAGLE HOSPITALITY PROPERTIES TRUST, INC.

Pro Forma Consolidated Statement of Operations

For the Year Ended December 31, 2004

(Unaudited, $ in thousands except per share data)

 

The accompanying unaudited Pro Forma Consolidated Statement of Operations for the year ended December 31, 2004 are presented as if the following transactions (together the “Acquired Hotels” ) had been consummated as of December 31, 2004:

 

  •   Embassy Suites Hotel Phoenix-Scottsdale (purchased February 2005)

 

  •   Hilton Glendale (purchased June 2005)

 

  •   Embassy Suites Hotel & Casino San Juan (purchased June 2005)

 

These Pro Forma Consolidated Statements should be read in conjunction with the historical financial statements and notes thereto. In management’s opinion, all material adjustments necessary to reflect the effects of the acquisition of the Acquired Hotels have been made

 

The following unaudited Pro Forma Consolidated Statements of Operations are not necessarily indicative of what actual results of the Company would have been assuming such transaction had been completed as of January 1, 2004, nor are they indicative of the results of operations for future periods.

 

EAGLE HOSPITALITY PROPERTIES TRUST, INC.

Pro Forma Consolidated Statement of Operations

For the Year Ended December 31, 2004

(Unaudited, $ in thousands except per share data)

 

           Pro Forma Adjustments
  
     A)     B)    C)        
     Company &
Predecessor
     Acquisition of
Hotel Properties
    Acquisition
Adjustments
     Pro Forma
  

Total revenues

    $ 82,298     $ 37,504            $ 119,802  

Corporate expense

      3,082       —                3,082  

Hotel expenses

      68,352       24,042      6,478       98,872  
    
 
  
 

Operating income(loss)

      10,864       13,462      (6,478 )     17,848  

Interest income

      157       8              165  

Interest expense

      8,147       —        6,057       14,204  

Other income, net

      —         —                —    
    
 
  
 

Income(loss) before minority interest and provision for income taxes

      2,874       13,470      (12,536 )     3,808  

Provision for income taxes

      —         —        —         —    

Minority interest

      (729 )     —        (248 )     (977 )
    
 
  
 

Net income(loss)

    $ 2,145     $ 13,470    $ (12,784 )   $ 2,831  
    
 
  
 

Basic income per share

    $ 0.12                    $ 0.16  
    
                

Diluted income per share

    $ 0.12                    $ 0.16  
    
                

Weighted average basic shares outstanding

      17,359                      17,359  
    
                

Weighted average diluted shares outstanding

      23,352                      23,352  
    
                

 

A) Pro Forma Combined Statement of Operations for the Company and Predecessor for the period ended December 31, 2004

 

B) Pro Forma Statements of Operations for the Acquired Hotels for the period ended December 31, 2004. These Pro Formas exclude interest expense and depreciation expense

 

C) Adjustments include the following expenses:

 

     Embassy Suites
Phoenix-
Scottsdale
    Hilton Glendale
    Embassy Suites
Hotel & Casino
San Juan
    Total

Depreciation

    $ 1,680    $ 2,880    $ 1,812    $ 6,372

Amortization of franchise fees

      7      5      6      18

Amortization of deferred financing costs

      30      35      23      88

Interest expense

      1,293      2,803      1,962      6,057

The Pro Forma revenues of $6,404 related to the Embassy Suites San Juan Hotel & Casino are the result of a participating lease

 

The participating lease calculation based upon 2004 revenues of $26,261 is:

 

Base Rent ($450 per month)

    $ 5,400

30% of revenues between $23,000-26,000

      900

40% of revenues between $26,000-26,261

      104
    

Total participating lease revenue

    $ 6,404

 

EAGLE HOSPITALITY PROPERTIES TRUST, INC.

Pro Forma Consolidated Statement of Operations

For the Three Months Ended March 31, 2005

(Unaudited, $ in thousands except per share data)

 

The accompanying unaudited Pro Forma Consolidated Statement of Operations for the three months ended March 31, 2005 are presented as if the following transactions (together the “Acquired Hotels” ) had been consummated as of January 1, 2004:

 

  •   Embassy Suites Hotel Phoenix-Scottsdale (purchased February 2005)

 

  •   Hilton Glendale (purchased June 2005)

 

  •   Embassy Suites Hotel & Casino San Juan (purchased June 2005)

 

These Pro Forma Consolidated Statements should be read in conjunction with the historical financial statements and notes thereto. In management’s opinion, all material adjustments necessary to reflect the effects of the acquisition of the Acquired Hotels have been made

 

The following unaudited Pro Forma Consolidated Statements of Operations are not necessarily indicative of what actual results of the Company would have been assuming such transaction had been completed as of January 1, 2004, nor are they indicative of the results of operations for future periods.

 

EAGLE HOSPITALITY PROPERTIES TRUST, INC.

Pro Forma Consolidated Statement of Operations

For the Year Ended March 31, 2005

(Unaudited, $ in thousands except per share data)

 

           Pro Forma Adjustments
  
     A)     B)    C)        
     Company
     Acquisition of
Hotel Properties
    Acquisition
Adjustments
     Pro Forma
  

Total revenues

    $ 21,703     $ 8,953            $ 30,656  

Corporate expense

      1,781       —                1,781  

Hotel expenses

      18,499       5,533      1,476       25,508  
    
 
  
 

Operating income(loss)

      1,423       3,420      (1,476 )     3,367  

Interest income

      113       2              115  

Interest expense

      2,139       —        1,421       3,560  

Other income, net

      (25 )     —                (25 )
    
 
  
 

Income(loss) before minority interest and provision for income taxes

      (628 )     3,422      (2,897 )     (103 )

Income tax benefit

      1,495       —        —         1,495  

Minority interest

      (222 )     —        (135 )     (357 )
    
 
  
 

Net income(loss)

    $ 645     $ 3,422    $ (3,032 )   $ 1,035  
    
 
  
 

Basic income per share

    $ 0.04                    $ 0.06  
    
                

Diluted income per share

    $ 0.04                    $ 0.06  
    
                

Weighted average basic shares outstanding

      17,360                      17,360  
    
                

Weighted average diluted shares outstanding

      23,354                      23,354  
    
                

 

A) Pro Forma Combined Statement of Operations for the Company for the three months ended March 31, 2005

 

B) Pro Forma Statements of Operations for the Acquired Hotels for the three months ended March 31, 2005. These Pro Formas exclude interest expense and depreciation expense

 

C) Adjustments include the following expenses:

 

     Embassy Suites
Phoenix-
Scottsdale
    Hilton Glendale
    Embassy Suites
Hotel & Casino
San Juan
    Total

Depreciation

    $ 280    $ 720    $ 453    $ 1,453

Amortization of franchise fees

      —        1      2      3

Amortization of deferred financing costs

      5      9      6      20

Interest expense

      230      701      490      1,421

 

The Pro Forma revenues of $1,350 related to the Embassy Suites San Juan Hotel & Casino are the result of participating lease revenue of $450 per month