• run with the bulls

    get your first month

    of hedgeye free



Huge EBITDA quarter that got over $100MM boost from high hold




  • 40% of annual retail sales are done between Thanksgiving and Christmas. 
  • Will open PH2 of SSC in mid-September
  • Singapore:
    • Mass win per day increased to $4.7MM/ day
    • RC was up 26% YoY
  •  There will be no additional concessionaires in Macau
  • On a daily basis they are always shuffling around their gaming tables in Macau to improve table yields
  • The government committed to give them 400 tables and gave them 200 additional tables so far
  • Spain: They are current planning to build a property over the course of 9 years.  The first phase will cost $8-12BN. 25-35% of that will be equity. So the most that they will have to lay out is $4BN. They will no look at any investments where they don't think that they can make a cash on cash return. Equity goes into the first phase only and then phase 2 is financed with earnings from Ph1.
  • SCC: Only product opening in the next 3 years
  • Lot 3: can hold 3,600 rooms. They are applying to the government to build there. 
  • Galaxy is going to announce a non-gaming hotel and exhibition center for Ph2


  • Spain: They are the point where the Board of Directors will opine on a decision. Negotiations are continued with Barcelona and Madrid.  Then there needs to be various legislation set once a location is picked. Thinks that the tax rate will be 'highly' favorable compared to other jurisdictions.
  • Junkets in Singapore? 
    • Junkets reps in Singapore: Cannot share commissions with anyone else - so it takes away incentives to get players. Secondly, they can't give credit. In Singapore, they are really just international marketing representatives.
    • Their field representatives can bring in customers and get paid for bringing in customers
    • They don't see any value in the Junket model of Singapore since MBS already has 100 people that have a similar function working in house
  • Hold impact in Singapore: 200 day moving average was 2.85%
    • By our quick math it was about $80MM.
  • There is no cannabilization in Macau.  Supply creates demand.
  • Impact of CNY in Singapore? 
    • Definitely helped in the quarter, but its hard to estimate seasonality since their operation is fairly new
  • Margins at FS? 
    •  Are these low 20's margin a good run rate? Retail operations decreased by $13MM sequentially so that impacted margins.
    • They did have bad mix on their RC vs. RevShare business and that cost them $10MM. Should have normalized profit of 4x of that in 1Q11.
  • Retail value of their assets is so great that they could pay off all of their debt
  • Unless there is a change to the way the regulations in Singapore are written, they don't see any reason to use the junkets there. Basically junkets are neutered by the law there.
  • They are lobbying the governments in Japan and S. Korea to get the legislation drafted and to get a piece of the action.  There are elections in both countries this year.  They are also looking at Vietnam and Taiwan.  Most governments want to follow the Singapore model.
  • In Spain they will have committed financing before they put a shovel in the ground.  They will not repeat what happened in the past. They are not dependant on the Asian player coming to Spain.
  • Sheldon has recused himself from voting on dividends
  • SCC what's open:
    • Opened all the rooms aside from one junket room- which should be open by May
  • Will start renovations at the Venetian Macao.  The new rooms that they are building are very nice.
  • 3.05% is their 200 day moving average for Macao and Singapore VIP 
    • Even so there was a huge hold benefit this quarter.  We also wouldn't use a 200 day rolling average across 2 separate markets to calculate the "base" hold rate.  We use each properties' historical VIP hold rate to adjust our numbers and calculate impact
  • Given the duopoly nature of Singapore, it almost guarantees them good YoY growth for many years to come



  • "We expect to realize additional benefits from our initiatives in the VIP segment in the future, as we roll out additional enhanced VIP facilities and service offerings throughout our property portfolio in Macao."
  • "As Singapore's complementary business and leisure tourism offerings and transportation infrastructure continue to expand, we are confident that Marina Bay Sands will continue to generate outstanding returns for our company."
  • In Las Vegas:
    • "Table games drop was up 27.8% during the quarter reflecting strong baccarat play." 
    • "Stronger group meeting and convention business during the quarter drove a 4.9% increase in cash hotel ADR."
  • "The property's 300-room hotel tower opened on May 27, 2011, and contributed $1.9 million of room revenue during the quarter ended March 31, 2012. The hotel, together with the addition of the retail mall, the first phase of which opened in November 2011, and the events center, which will debut in May 2012, should contribute to future growth of both gaming and non-gaming offerings at the property."
  • "Company's retail malls at The Venetian Macao, the Four Seasons Macao and Marina Bay Sands in Singapore reached $71.1 million for the first quarter of 2012, an increase of 27.3% compared to the first quarter of 2011. Operating profit derived from these retail mall assets increased 25.2% for the quarter to reach $55.2 million."
  • "Pre-opening expenses, related primarily to Sands Cotai Central ...increased to $51.5MM" 
  • "Capitalized interest was $22.1 million during the first quarter of 2012"
  • "Corporate expense increased to $49MM... primarily driven by higher legal fees."
  • The impairment loss of $42.9MM was million related to the closing of Zaia at Venetian Macao.
  • Balance Sheet items: 
    • Unrestricted cash: $4.06BN
    • Restricted cash: $7.3MM
    • Debt: $9.9BN
    • Principal payments (mostly Singapore): $352MM in 2012 and $543MM in 2013
    • Redeemed all of 6.375% Senior Notes due 2015 at a total cash cost of $193.2 million in the Q
  • 1Q12 Capex: $398MM
    • Macao: $305MM
    • MBS: $62MM
    • LV: $22MM
    • PA: $9MM


In preparation for BYI's FQ3 2012 earnings release tomorrow afternoon, we’ve put together the recent pertinent forward looking company commentary.




  • "Game sales and gaming operations are both performing very well, even better than our expectations, with the ALPHA 2 games getting an excellent reception in the market and a strong pipeline of new games."
  • "Revel in Atlantic City allocating over 20% of the floors to Bally's products."
  • "Our North America replacement unit sales were up 22% over the same quarter last year, which marks the second consecutive quarterly increase in replacement sales for Bally. In fact, we estimate that North America industry replacements were up 5% to 10% during the second half of calendar 2011, while our replacements were up 23%."
  • "During the quarter, sales of the Pro Curve exceeded our expectations, which contributed to the higher than expected ASP, but impacted our gross margin percentage. We do not expect similar growth in ASP's over the next few quarters due to anticipated product mix."
  • "The Pro Curve drove some good ASPs. Just looking at the mix coming forward with Revel and some of the new openings, I think you'll have more of a mix towards our Uprights and Slants, which is more reminiscent of the prior two quarters."
  • "We continue to expect margin percentages to improve slightly over the balance of this year although this expectation is dependent on product mix.  Based on forecasted reductions in material costs on each of the Pro Series Cabinets, we expect to approach 48% to 49% over the next several quarters."
  • "In terms of moving forward and ultimately getting to that 48%, 49% margin, there's a couple of things, part of that is volume-based, part of it is raw material-based. As you can imagine, our procurement department has a pretty good forecast say over the next six months for what they're going to be able to decrease the raw materials by and part of it is where we are in the product cycle."
  • "Our progress in Australia has been slower than anticipated mainly due to product approval delays. Our games operating system was approved by regulators in New South Wales during the quarter. The initial games we have placed in Australia so far continue to perform well. We continue to expand game sale systems and recurring revenue opportunities in various countries in Asia including Cambodia, South Korea and the Philippines. Among new domestic opportunities, Illinois deserves particular mention where we are making great progress in terms of positioning ourselves very well for the upcoming expansion."
  • "We shipped a portion of the units for partial 5 and 6; they're staging some of those units. So some now, a few more in Q3."


  • "The margin on gaming operations was within our expected range at 72%."
  • [Italy] "We seem close to receiving approval for our systems products for one of our concessioners. Approval for systems products is a requirement for placing games in Italy.  However, future approvals for other concessioners could face more delays due to new regulatory requirements that have come up recently. Please note that there is minimal revenue expectations from Italy in our guidance for the remainder of fiscal 2012. However, we continue to carry the costs associated with entering this market. We expect Italy to be an important market for us in the long-term."
  • "We… think Italy will be slower than we thought 6-9 months ago and probably somewhat less profitable to us just given these time delays. So we'll kind of keep you posted as that – as that happens but I think we are looking at Italy today less optimistically as a profit generator than we did a year ago."
  • "We expect Grease deployments to get started towards the end of fiscal Q3 and Michael Jackson in Q4. We remain optimistic about these games based on the overwhelmingly positive feedback received so far from customers and players."
    • "If we reach a level of 700 or 800 games in six to nine months we consider that a good rollout. We don't know what these games are going to do, but we don't see any reason why we can't get to those levels.  In terms of cannibalization because Bally doesn't have a very big WAP footprint, just over 1,000 games – much smaller than some of our competitors, we think that the likelihood of these games cannibalizing our existing footprint is lower than our typical gaming ops games and also given the unique branding characteristics, which has not been in our recent history. So, again we would expect the cannibalization rate to be lower on both Grease and Michael Jackson."
    • "I'd say today, it's probably about 55% to 57% fixed.  The rest variable but with Grease and Michael Jackson I'd expect that dynamic to change over the next 12 months."


  • "The outlook for our systems business for the coming years remains very positive with a good backlog in pipeline and growing acceptance for iVIEW DM."
  • "A string of exciting installations coming up all across the world is going to make this calendar year a very exciting one for Bally systems. Virtually all of them involve products like iVIEW DM and the Elite Bonusing Suite setting up these products for a crucial breakthrough phase. We expect these installations to create a significant pull for the products going forward. Please consider the following."
    • "One, we have more than 1,600 DMs installed recently at Mohegan Sun." 
    • "Two, another customer is all set to run a world record slots tournament across 1,000 games powered by iVIEW DM."
    • "Three, one of the most successful operators in the south east is just going live with DM and the Elite Bonusing Suite across the floor."
    • "Four, a new East Coast site is getting ready to open with all our cutting edge products creating instant player excitement."
    • "Five, we expect a Southern Nevada site to go live with iVIEW DM and EBS during the coming months."
    • "And six, the next six months we'll see big installs featuring all our key products all across the globe, in New Zealand, in South Africa, in Canada, among other places."
  • "Canadian systems opportunity and Sun International are some larger opportunities.  We expect to begin recognizing go-live revenues from those contracts starting sometime this summer and running for two years to three years. So those are not in this year's forecast."


  • "Overall, our outlook for the rest of this year in fiscal year 2013 and 2014 is very promising."
  • "During the quarter we repurchased approximately 330,000 shares for $10 million and have approximately $111 million remaining under our Board authorized share repurchase plan."

AAPL: Pay Attention iConomy!

Let’s not even attempt to tear into the AAPL quarter. High quality print from the highest quality company.  The stock is > Keith’s $606 support line, which is very bullish if it holds. However, anyone that debates that this is a high expectation stock is smoking something. But let’s look at the double-helix that is Apple’s growth-setting expectations. The iConomy should be aware of this.


Let’s look at how expectations have changed over time. Specifically, we can YouTube the following factors…

a)      Expectations for a given quarter 4 months prior to the print (ie before guidance is given)

b)      Actual guidance given by the company for a given quarter.

c)      The haircut/upcut that the Street applied to such guidance (ie the Consensus numbers 4 weeks ahead of the print)

d)      Actual EPS


Before yesterday, there had been only one quarter (4QFY11) out of the past 10 when the company took down estimates >10%, and that was by 13.7%.  But when all was said and done, the Street came in 30% ahead of guidance. AAPL printed 1% below that.


With this print, the company took down expectations by 15.2%. That’s now 2 quarters out of 10 where expectations were taken down greater than 10%. Regardless, over the past 10 quarters, AAPL has exceeded its own guidance by an average of ~50% as well as expectations 1 month prior to the print by an average of ~30%. For AAPL to keep their expectation-beating trend in place, we’re going to need to see an EPS number next quarter just above $13.





AAPL: Pay Attention iConomy!  - AAPL SIGMA


AAPL: Pay Attention iConomy!  - AAPL TTT

investing ideas

Risk Managed Long Term Investing for Pros

Hedgeye CEO Keith McCullough handpicks the “best of the best” long and short ideas delivered to him by our team of over 30 research analysts across myriad sectors.


In an effort to evaluate performance, we compare how the quarter measured up to previous management commentary and guidance.



OVERALL:  BETTER - You wouldn't know it from the stock action but HST more than delivered in Q1 and forward commentary remained positive.  Guidance was raised.

  • 2012 GUIDANCE
    • BETTER:  HST raised RevPAR guidance by 1%, EBITDA guidance by $20-30MM and Adjusted FFO by 4 cents
    • BETTER:  Stronger demand has driven group bookings up 7.5% YoY for the remaining three quarters.  ADR is up 2% and recent bookings were up 8%.  Transient bookings also continue to run well ahead of last year's levels and suggest strong rate growth.  
    • SAME:  Reiterated a growing investment pipeline and expect further transactions later in 2012. 
    • SAME:  The disposition of the San Francisco Airport Marriott at $113MM is in-line with its guidance of $100-115MM for the 1H of 2012.  
    • SAME:  2012 comparable hotel adjusted operating profit margins is expected to increase 50 bps- in the middle of HST's previous guidance range of 25-75 bps.   
    • SLIGHTLY BETTER:  Most of the markets' REVPAR expectations came in as expected.  Atlanta outperformed in 1Q with 2Q looking rosy as well.  
    • SLIGHTLY BETTER:  European JV REVPAR (in constant euros), excluding the Sheraton Roma, came in at 4.8% in 1Q.  Even though this is within the company's previous guidance of 3-5%, HST had mentioned that they were more conservative with the REVPAR assumptions at the corporate level. The Westin Europa & Regina in Venice, the Sheraton Warsaw, the Sheraton Skyline in London and the Paris Versailles all had double digit RevPAR increases 1Q.
    • SAME:  The $48MM spent on redevelopment and ROI capital projects is on schedule with HST's plan to be an active recycler of capital in the next 2-3 years.  HST expects to spend $150-170MM in 2012 for these capital reinvestment projects.  

LIZ: Q1 Preview


Conclusion: There’s no change to our thesis – LIZ remains one of our top long ideas and we like it headed into the quarter.



While the stock is up 30% since the last print, we think LIZ is still trading at a significant discount and is headed higher. We expect slightly higher revenues versus the Street and a smaller loss (-$0.09 vs. -$0.13E) as well as further clarity on company fundamentals with updated brand comps through April when LIZ reports tomorrow morning. In the company’s least significant quarter, the focus will be squarely on brand performance. That said, let’s look at where the risk is heading into the quarter:


  1. Be mindful of the holiday impact on April comp headlines.
  2. Comp expectations at Kate is the biggest potential risk. While we don’t expect an issue here, let’s consider the following:
    • January and February results reported on the Q4 call were better than expected coming in at +30% and +16% on comps of +96% and +87% proving the brand can comp the comp. In March, Kate goes up against a less challenging +44% comp coupled with the benefit of Easter demand shift. We’d consider anything less than a mid 20s comp for the quarter a disappointment.
    • That said, April will be up against a +82% comp and then +88% in May and +56% in June. Taking the Easter pull forward out of April, a stable 2-year comp rate could produce a negative comp in April and a headline scare. Be mindful of the holiday shift as this is fully accounted for in our numbers, but might be less well accounted for in the minds of more recent investors.
  3. At Lucky, the brand reported strong mid-quarter comps up +29% and +21% on comps of -2% and +12% in Jan and Feb and then goes up against a +1% in March. We expect a mid 20s comp here as well. While April-June comps of +23%, +24%, and +16% are the toughest of the year, we expect a positive MSD comp for Q2 modeling a modestly negative comp in April. Again, this is already in our number.

With management having several opportunities to be in front of investors YTD, we think expectations for the timing of a turn in both the Juicy business as well as the reduction in corporate expenses is appropriately set as a multi-quarter process. Additionally, with new hires at both the CFO level and a co-President at Juicy during the quarter, the company is taking steps to address these lingering concerns.


We are at $0.25 in EPS for F12 and $0.65 in F13 reflecting $140mm and $210mm in F12 and F13 EBITDA respectively. As we move through 2012, we think investors will start looking out to $1 in earnings power in three years (F14). That still isn’t reflected in the stock at $13. While we could see some near-term volatility as the company reports over the next few quarters, we think there is at least $7+ in upside from current levels. With over 50% upside, LIZ is still one of our top ideas.



For more detail following the February print, see our note “LIZ: Noise = Buying Opportunity.


Casey Flavin



LIZ: Q1 Preview - LIZ SOTP






Quarter and guidance in-line with our expectations




  • Stronger demand in higher rated segments of group and transient led to better performance in the quarter
  • Continuing a trend we saw developing in the fourth quarter of last year, our banquet and audio visual revenue grew faster than our outlet and lounge revenue, as several of our larger hotels experienced meaningful increases in banquet activity.
  • Discount segment grew 2% but government segment declined slightly
  • Group bookings for the quarter in the quarter increased 6%, leading to a more than 4% increase YoY. Corporate increased more than 6% and discount decreased 5%. 
  • Group booking for the remainder of the year are 7.5% ahead of last year's pace for the balance of the year with rate ahead by 2% YoY and recent rates achieved are 8% better. 
  • Expect to continue to see occupancy gains in 2012
  • Expect positive rate growth in 2013 as well
  • Moving quickly to bring selected assets to the market given the dearth of assets available for sale
  • They are also expecting to be a net buyer of real estate this year, but plan on being opportunitistic
  • Guidance doesn't include any additional M&A aside from whats been already announced
  • Continue to find construction pricing attractive and think that their ROI capex will be accretive
  • They are seeing very strong demand trends and with supply only increasing 0.5%, coupled with better group bookings they decided to raise their RevPAR guidance
  • Believe that this cycle will gain momentum through 2012 and continue through 2013 & 2014
  • Regional RevPAR performance and Outlook:
    • Hawaii: 15.1%. Outperformance due to strong corporate and transient. expected to underperform in 2Q but have a better 2H
    • Houston: 12.8%.  Expect to underperform in 2Q due to difficult convention comps.
    • Miami/Ft Lauderdale: 11.3%. Expected to perform well in 2Q
    • Philadelphia: 30.8% increase.  Benefited from the 2011 renovation. We expect our Philadelphia hotels to be a top performer in 2012 
    • San Francisco: 10.9%.  Strong 2Q performance is expected
    • LA: 8.5%.  Expect continued strength in 2Q 
    • Chicago: 20.3% increase (rate increased 3%). We expect our Chicago hotels to have very good performance in 2Q
    • New York: 6.5%. Results were negatively impacted by renovations in the quarter. Expect a good 2Q
    • D.C.: -3.9%.  Lower levels of citywide demand lead to poor performance.  2012 will be a challenge due to a weaker city-wide calendar, government travel cutbacks, and the lack of legislative activity. 2Q was better than 1Q though. 
    • San Antonio: Down 8% (worst market). Better results expected in 2Q but will continue to underperform
    • European JV:  Excluding Sheraton Roma, constant Euro RevPAR increased 4.8%. F&B revenues also increased 4.5%. 1Q JV results only include Jan and Feb.  In March RevPAR was up 6.2%. 
  • F&B flowthrough was ~35%
  • Continue to see improvements in catering, leading room rental and audio visual revenues. 
  • SG&A, marketing, repairs/maintenance expense increased 4.4%  driven by variable expenses (credit card commissions, reward programs and shared service allocations.) 
  • Utility costs benefited from weather and declined over 3%. Property taxes increased 3.6%, property insurance increased nearly 15%. 
  • Expect rate to be a bigger contributor to RevPAR growth for the balance of 2012, which will help flowthrough
  • 2 & 4Q should especially benefit from strong F&B business with good flowthrough
  • Expect un-allocated cost to increase more than inflation particularly for sales and marketing where higher revenues will increased cost. 
  • Expect property taxes to increase roughly 8%, the utilities to increase between 1% and 2% for the year


  • Group booking room nights were up 13% vs. 7% at the same time last year for the remainder of the year
  • For the full year their group revenues on the books are up over 8%, which is much stronger than were they were in the first quarter. Over 7% is due to occupancy and a few % due to rate
  • Booking pace starting the year was up around 5%, now for the full year is much higher.  The reason its higher is because they booked more rooms in the quarter for the quarter and in the quarter for the rest of the year compared to last year
  • They are a  little surprised at how fast occupancy has returned to peak. Staffing levels lower relative to 2007 and 2009, and based on their numbers staffing levels have come back with managerial levels slower though.  However, they are still below where they were in the past. They are being thoughtful in how they add staff back. Productivity levels are better than they were in prior recoveries
  • D.C. is expected to be stronger than the first quarter. Expect flatish RevPAR going forward
  • If there are portfolio coming on the market they will definitely get a call on those and take a look. That isn't their sweet spot though. There still is a pricing expectation gap between sellers and buyers. 
  • Part of the reason that people think that there will be a pick up in M&A in 2H12 is because there is debt maturing and lenders are no longer extending and pretending.  
  • Their larger hotels vs. smaller hotels are in roughly the same position vs. prior peak. Larger hotels are doing better on rate but behind in occupancy. The larger hotels are seeing less of their business coming from Group than they have in the past. Do see bigger increases in the smaller hotels then their larger hotels, similar to Marriott.  The smaller hotels tend to book a lot more of their rooms closer in
  • Association business and corporate business is better. Association are looking into holding bigger events in the future which should benefit those larger hotels
  • Don't expect many hotels to come to market in Europe unless their is debt maturity. They will be cautious in investing in Europe.  Feel better about Northern Europe. Over 40% of their business in Europe comes from outside of Europe and the UK
  • Their Marriott hotels have certain had a surge in booking activity over the last 6 months.  Part of that can be due to fixing some of the salesforce one bugs
  • Their European debt investment matures this quarter. The owners are marketing the portfolio for sale.  They are closely monitoring the situation
  • There is nothing that they see now that would suggest that they should see a deceleration in Europe. But they remain cautious. However, DC is improving off of 1Q levels. 
  • In certain markets they are able to push banquet pricing with Groups. However, they are a little ways away from being able to push the envelope on event banquet spending. There are a number of Groups that are outspending their guarantees at the very last minute. They have been beating more than missing their F&B forecasts for Groups
  • European JV guidance: They are seeing strength in their European JV. Their revised forecast for Europe takes in the outperformance from 1Q but they are being reallly conservative and assuming flat RevPAR for the balance.
  • They still feel really good about F&B but are more cautious on other revenues. Expect F&B to grow slightly less then RevPAR but not much less.  Other is also less profitable
  • Helmsley budget has increased slightly, but the increase is really due to a reconfiguration of the hotel F&B area. They are also going to accelerate the work at Hyatt in 2012 before the NAREIT event in November. 
  • They are already seeing the benefit of newer bookings at higher rates. 80% of their room nights for 2012 are on the books (for group). They started the year at about 70%. In 2010 they only had 20% of their group business was on the books and that's when things started to improve. In 2013, almost 80% of their business would have been booked in 2011 and beyond
  • Altanta was really healthy and expect an even better 2Q with the 2H comparable to 1Q.  
  • M&A capital is more available. Its not clear that capital is really available for go private like transactions they saw through 2006-2007.  Thinks that more of it is company to company deals where there are strategic syngeries. Usually at the half way point of a recovery, M&A starts to pick up. However, its not clear that they are there yet. 
  • Most of the branded hotels would like to be more asset light, but they also don't need the money so they are very selective on sales. 
  • Because this has been a transient lead  recovery, its been hard to get aggressive on rates. 




  • 2012 guidance:
    • RevPAR: raised by 1% to 5-7%
    • EBITDA raised $20-30MM to $1,120-1,165MM
      • Consensus is at $1,125MM
    • Adj FFO raised by 4 cents to $0.99 to $1.06
      • Consensus is at $1.03
  • Consistent with the Company's expectations, the completion of the 2011 rooms and meeting space renovations at the Philadelphia Downtown Marriott led to outstanding results in the first quarter, with RevPAR for the hotel up over 50% when compared to the first quarter of 2011. The improved results for this hotel accounted for approximately 80 basis points of the Company's comparable hotel RevPAR growth
  • On a calendar quarter basis, which includes the March results for these hotels, as well as eight additional days of March for the Company's Marriott hotels, comparable hotel RevPAR increased 6.4% compared to the first calendar quarter of 2011.
  • ROI capex of $48MM in 1Q12. During the first quarter, the Company substantially completed the redevelopment of the Chicago Marriott O'Hare, Atlanta Marriott Perimeter Center and 95,000 square feet of meeting space at the San Diego Marriott Marquis & Marina. The Company expects that its investment in ROI expenditures for 2012 will total approximately $150 million to $170 million.
  • During the first quarter of 2012, the Company delivered the first few floors of newly renovated guestrooms at the New York Helmsley and completed the renovation of the 270 rooms at the W New York - Union Square, which was acquired in late 2010. The Company spent approximately $14 million on acquisition projects in the first quarter of 2012 and expects to invest between $100 million and $110 million for 2012.
  • $100 million in renewal and replacement expenditures spent in 1Q12. Major renewal and replacement projects completed during the first quarter included the renovation of 743 guestrooms at The Ritz-Carlton, Amelia Island and the Pentagon City Residence Inn and almost 10,500 square feet of meeting space at the W New York. The Company expects that renewal and replacement expenditures for 2012 will total approximately $300 million to $330 million.
  • On March 23, 2012, the Company sold the 685-room San Francisco Airport Marriott for a sale price of $108 million plus $5 million for the furniture, fixture and equipment replacement fund and recorded a gain of approximately $48 million
  • In 1Q12, HST issued ~11.1MM shares at an average price of $15.67per share, for net proceeds of approximately $172 million. On April 24, 2012, the Company entered into comparable Sales Agency Financing Agreements with BNY Mellon Capital Markets, LLC and Scotiabank for a new at-the-market equity offering program with a capacity of $400 million.
  • On March 6, 2012, the joint venture in Asia ("Asia/Pacific JV"), in which the Company holds a 25% interest, acquired the 278-room Citigate Perth in Perth, Australia for A$61 million. In connection with the acquisition, the Company drew A$14.4 million on its credit facility. The Asia/Pacific JV expects to invest approximately A$17 million to upgrade and rebrand the hotel as a Four Points by Sheraton.

get free cartoon of the day!

Start receiving Hedgeye's Cartoon of the Day, an exclusive and humourous take on the market and the economy, delivered every morning to your inbox

By joining our email marketing list you agree to receive marketing emails from Hedgeye. You may unsubscribe at any time by clicking the unsubscribe link in one of the emails.