Market Overview

Belmond Ltd. Reports Fourth Quarter 2018 and Full-Year 2018 Results

Share:

Fourth Quarter 2018

  • Revenue of $122.3 million, up 4% from the prior-year quarter; up 12%
    on a constant currency basis
  • Net losses attributable to Belmond Ltd. of $24.6 million, compared
    with net losses of $29.8 million for prior-year quarter
  • Adjusted net losses from continuing operations of $5.8 million,
    compared with adjusted net losses of $6.3 million for prior-year
    quarter
  • Adjusted EBITDA of $22.6 million, up 41% compared to adjusted EBITDA
    of $16.0 million for prior-year quarter
  • Same store revenue per available room ("RevPAR") down 2% from
    prior-year quarter in US dollars and up 6% in constant currency

Full Year 2018

  • Revenue of $576.8 million, up 3% from the prior year on both a US
    dollar and constant currency basis
  • Net losses attributable to Belmond Ltd. of $28.5 million, compared
    with net losses of $45.0 million for the prior year
  • Adjusted net earnings from continuing operations of $30.6 million,
    compared with adjusted net earnings of $12.1 million for prior year
  • Adjusted EBITDA of $146.9 million, up 18% compared to adjusted EBITDA
    of $124.0 million for prior year
  • Same store revenue per available room ("RevPAR") up 5% from prior year
    on both a US dollar and constant currency basis

Belmond Ltd. (NYSE:BEL) (the "Company"), owners, part-owners or
managers of 46 luxury hotel, restaurant, train and river cruise
properties, which operate in 24 countries, today announced its results
for the fourth quarter and full year ended December 31, 2018.

Roeland Vos, president and chief executive officer, remarked: "The
strong growth momentum we generated throughout 2018 continued
into the last three months of the year. Although the fourth quarter is
seasonally small, adjusted EBITDA increased 41% in the period when
compared to the prior year. We came in towards the top-end of our
previously guided RevPAR range of 3-7% in constant currency terms,
closing the quarter with a 6% rise over last year.

We also achieved several significant strategic objectives within the
quarter. We announced in December the execution of an Agreement and Plan
of Merger with LVMH, pursuant to which LVMH will acquire the Company for
$25.00 per Class A share in cash. The announcement follows a
comprehensive review by the board of the Company's strategic
alternatives and, subject to the satisfaction of conditions to closing,
we believe the consummation of this deal will maximize value for our
shareholders. We believe that this deal represents an exciting new
chapter for our Company and we are pleased that the merger proposal was
approved by the overwhelming majority of our shareholders at the special
general meeting on February 14, 2019. We expect the transaction to close
in the second quarter of this year.

Meanwhile, two strategically important properties reopened in December:
Belmond La Samanna in St. Martin, and our defining asset in the
Caribbean, Belmond Cap Juluca, in Anguilla. Our ongoing efforts to
increase brand awareness resulted in Belmond being named 'British Luxury
Brand of the Year' at the Walpole British Luxury awards in November.
Additionally, full-year adjusted EBITDA climbed to $146.9 million,
representing an 18% increase year-over-year. This performance put us
towards the top-end of our guidance range and stands as one of the
strongest in the Company's history. Together, these strategic
achievements and our operating results highlight the overall strength of
the Company's performance in 2018.

As we look ahead, we see positive indications across our existing
portfolio for 2019. Belmond Cadogan Hotel, our newest and first hotel
under a management agreement in the flagship city of London, will open
tomorrow. We are working hard to accelerate several strategic
initiatives that began to generate promising returns in 2018, as we seek
to achieve our full-year growth projections again, this year and beyond.
Today, Belmond is a growing business with an exceptional portfolio of
iconic luxury properties, and incredibly talented employees. As a
Company, we have taken great strides forward in recent years, and I am
confident that Belmond's ability to deliver timeless, one-of-a-kind
luxury experiences will continue to reach new levels."

Fourth Quarter 2018 Operating Results

Revenue for the fourth quarter of 2018 was $122.3 million, a $5.0
million increase in revenue from the fourth quarter of 2017. In constant
currency, revenue for the fourth quarter of 2018 increased by $13.4
million from the fourth quarter of 2017 due to strong performances at
Venice Simplon-Orient-Express; Belmond Charleston Place, South Carolina;
Belmond Hotel das Cataratas, Iguassu Falls, Brazil; and Belmond
Copacabana Palace Hotel, Rio de Janeiro, Brazil. Additionally, Belmond
Cap Juluca, Anguilla, British West Indies, and Belmond La Samanna, St.
Martin, French West Indies both reopened in December 2018 following
Hurricanes Irma and Jose that hit both islands in September 2017. These
increases were partially offset by declines at Belmond Road to Mandalay,
Myanmar and Belmond Reid's Palace, Madeira, Portugal.

Net losses attributable to Belmond Ltd. for the fourth quarter of
2018 were $24.6 million ($0.24 per common share), which compared to net
losses attributable to Belmond Ltd. of $29.8 million ($0.29 per common
share) for the fourth quarter of 2017. This improvement is largely due
to the increase in revenue mentioned above and other operating income
received of $2.7 million in relation to an insurance gain recorded at
'21' Club, New York following water damage from burst pipes in January
2018.

Adjusted net losses from continuing operations for the fourth quarter of
2018 were $5.8 million ($0.06 per common share), compared to adjusted
net losses from continuing operations of $6.3 million ($0.06 per common
share) for the fourth quarter of 2017.

Same store RevPAR for owned hotels for the fourth quarter of 2018
decreased 2% from the prior-year quarter on a US dollar basis. On a
constant currency basis same store RevPAR for owned hotels for the
fourth quarter of 2018 increased 6%.

Adjusted EBITDA for the fourth quarter of 2018 was $22.6 million up 41%,
compared to an adjusted EBITDA of $16.0 million for the fourth quarter
of 2017. In constant currency, adjusted EBITDA for the fourth quarter of
2018 was up $8.7 million or 59% compared to the fourth quarter of 2017.

Full Year 2018 Operating Results

Revenue for the full year 2018 was $576.8 million, a $15.8 million
increase from revenue for the full year 2017. In constant currency,
revenue for the full year 2018 increased $14.8 million from the prior
year.

Net losses attributable to Belmond Ltd. for the full year 2018 were
$28.5 million ($0.28 per common share), compared to net losses of $45.0
million ($0.44 per common share) for the full year 2017. This
improvement is due to the increase in revenue, $16.9 million other
operating income relating to insurance gains recorded in 2018, and a
charge of $29.3 million recorded in 2017 related to a non-cash
impairment of fixed assets in the Company's unconsolidated rail joint
venture in Peru. This growth is offset by an increase of $8.1 million in
the Company's provision for income taxes, a charge of $13.9 million to
restructure the Company's labor force at Belmond La Samanna, and $8.5
million of expenses and fees for professional services related to the
board's review of strategic alternatives for the full year 2018.

Adjusted net earnings from continuing operations for the full year 2018
were $30.6 million ($0.30 per common share), a $18.5 million increase
from $12.1 million ($0.12 per common share) for the full year 2017.

Same store RevPAR for owned hotels for the full year 2018 increased 5%
from the prior year on both a constant currency and US dollar basis as a
result of a 5% increase in average daily rate ("ADR").

Adjusted EBITDA for the full year 2018 was $146.9 million, a $22.9
million or 18% increase from adjusted EBITDA for the full year 2017 of
$124.0 million. In constant currency, adjusted EBITDA for the full year
2018 increased $22.3 million or 18% from the full year 2017.

Recent Company Highlights

  • Enters into Agreement and Plan of Merger with LVMH to acquire the
    Company for $25.00 per Class A share in cash
    - On December 13,
    2018 Belmond Ltd. (the "Company") entered into an Agreement and Plan
    of Merger with LVMH Moët Hennessy–Louis Vuitton SE, Palladio Overseas
    Holding Limited and Fenice Ltd. (collectively, "LVMH") pursuant to
    which LVMH will acquire the Company. The merger proposal was approved
    at a Special General Meeting of Belmond's shareholders on February 14,
    2019. Subject to the satisfaction of the remaining closing conditions,
    this transaction is expected to close in the first half of 2019.
  • Named 'British Luxury Brand of the Year' at Walpole British Luxury
    Awards 2018
    - On November 19, 2018 Belmond was named ‘British
    Brand of the Year', the top accolade at the 17th annual British Luxury
    Awards hosted by Walpole,the official sector body for UK luxury.
    Previous winners have included Burberry, Rolls Royce and Jaguar.
    Belmond is the first travel and hospitality brand to receive this
    award, distinguishing it as a leading luxury brand as officially
    recognized by the industry.
  • Reopens two strategically significant properties in the Caribbean -
    On December 10 and December 15, 2018 respectively, Belmond reopened
    two properties in the Caribbean region: Belmond La Samanna on the
    island of St Martin, and Belmond Cap Juluca, on the island of
    Anguilla. Following a comprehensive operational restructure and
    complete redesign by award-winning Muza Lab London, Belmond La Samanna
    was reopened in time for the peak tourist season. Belmond Cap Juluca
    opened five days later and, through timeless and sophisticated art
    direction, the resort has been completely reimagined and fully
    restored to its legendary status and will support Belmond's brand
    position for offering authentic escapes that connect guests with
    nature and celebrates local culture. Belmond partnered with
    British-born Hollywood actress Naomie Harris on the production of a
    film to promote the opening, positioned as the ‘ultimate barefoot
    luxury escape.'
  • Opening first hotel in flagship city of London under Belmond
    management
    - On February 28, 2019 Belmond's first London property,
    Belmond Cadogan Hotel, will open under the Company's management in
    what is a strategically important flagship European city. The
    property, originally built in 1887, will be a stylish retreat between
    the sought-after boroughs of Chelsea and Knightsbridge that embraces
    quiet luxury, literature, culture, and art. Design details rendered
    through expert craftsmanship pay homage to former patrons, including
    Oscar Wilde and Lillie Langtry, and celebrate the building's quirky,
    rich history.

Fourth Quarter 2018 Business Unit Results

Owned hotels:

Europe:

For the fourth quarter of 2018, revenue from owned hotels for the region
was $28.4 million, a decrease of $3.2 million or 10% from $31.6 million
for the fourth quarter of 2017. In constant currency, revenue for the
region for the fourth quarter of 2018 increased $1.1 million or 4% from
the prior year quarter due to growth at Belmond Grand Hotel Timeo,
Taormina, Sicily, which remained open for the full fourth quarter of
2018 for the first time to capitalize on a strong season that saw the
benefits of a new rate strategy and increased exposure following the
hosting of the G7 summit in May 2017.

In constant currency, same store RevPAR for owned hotels in the region
decreased 3% from the prior-year quarter as a result of a 6% increase in
ADR offset by a four percentage point decrease in occupancy.

Adjusted EBITDA for the region for the quarter was a loss of $0.8
million, down $3.0 million compared to adjusted EBITDA of $2.2 million
for the fourth quarter of 2017. In constant currency, adjusted EBITDA
for the region for the fourth quarter of 2018 decreased $1.2 million
from the prior year quarter. This decrease is largely due to off-season
losses of $0.5 million at Belmond Castello di Casole, Tuscany, Italy,
that was acquired earlier this year, and a decline of $0.5 million at
Belmond Reid's Palace, which has been impacted by the return of markets
in North Africa and Turkey.

North America:

Revenue from owned hotels for the fourth quarter of 2018 was $41.3
million, up $7.3 million or 21% from $34.0 million for the fourth
quarter of 2017. In constant currency, revenue for the region for the
fourth quarter of 2018 also increased $7.3 million from the prior-year
quarter. The increase is largely attributable to Belmond La Samanna and
Belmond Cap Juluca, which have both reopened in December 2018 after full
refurbishment following the hurricanes that hit both properties in
September 2017; and Belmond Charleston Place, which continues to benefit
from the popularity of the destination and enhanced revenue management
strategies.

In constant currency, same store RevPAR for owned hotels in the region
increased 9% from the prior-year quarter due to a four percentage point
increase in occupancy and a 2% increase in ADR.

Adjusted EBITDA for the region for the quarter was $12.9 million, an
increase of $4.9 million or 61% from $8.0 million for the fourth quarter
of 2017. In constant currency, adjusted EBITDA for the region for the
fourth quarter of 2018 also increased $4.9 million due to improvements
of $1.7 million at Belmond Charleston Place and $1.5 million at Belmond
Cap Juluca. Operating losses of $1.4 million at Belmond La Samanna and
$2.2 million at Belmond Cap Juluca have been added back to adjusted
EBITDA while the properties were closed for renovation for the majority
of the fourth quarter of 2018. During the fourth quarter, insurance
proceeds of $4.1 million were received at '21' Club, relating to water
damage suffered in January 2018, resulting in the recording of other
income of $2.7 million and an adjusted EBITDA gain of $1.1 million.

Rest of world:

Revenue from owned hotels for the fourth quarter of 2018 was $36.7
million, an increase of $1.1 million or 3% from $35.6 million for the
fourth quarter of 2017. In constant currency, revenue for the fourth
quarter of 2018 increased $4.1 million or 12% from the prior year
quarter, principally as a result of a $1.6 million increase in revenue
at Belmond Hotel das Cataratas following positive media coverage of the
destination and reduced visa restrictions in the country; a $1.5 million
increase at Belmond Copacabana Palace, due to increased groups revenue
and the strong performance of its recently renovated "Pérgula"
restaurant; and a $1.1 million increase at the Belmond Safaris in
Botswana as Belmond Savute Elephant Lodge, Chobe Reserve, was closed for
the majority of the fourth quarter of 2017 for refurbishment.

In constant currency, same store RevPAR for owned hotels in the region
increased 10% from the prior-year quarter as a result of a one
percentage point increase in occupancy and an 8% increase in ADR.

Adjusted EBITDA for the region for the quarter was $10.3 million
compared to $8.6 million for the prior-year quarter. In constant
currency, adjusted EBITDA for the region increased by $2.2 million or
26% from the prior-year quarter as a result of a $1.0 million increase
at Belmond Copacabana Palace, a $0.7 million increase at Belmond Hotel
das Cataratas, and a $0.5 million increase at Belmond Safaris.

Owned trains & cruises:

Revenue for the fourth quarter of 2018 was $12.8 million, up $0.2
million or 2% from $12.6 million for the fourth quarter of 2017. In
constant currency, revenue increased $1.3 million or 11%. The increase
was driven by Venice Simplon-Orient-Express which has continued to
deliver a strong performance this year as it benefits from recent
capital improvements, enhanced revenue management activities and media
exposure, offset by a decline at Belmond Road to Mandalay, which
continues to suffer from reduced tourist arrivals in Myanmar.

Adjusted EBITDA for the quarter was $1.9 million, an increase of $2.8
million from the fourth quarter of 2017. In constant currency, adjusted
EBITDA for the segment increased by $3.1 million with growth across the
majority of the portfolio but primarily driven by growth from the Venice
Simplon-Orient-Express.

Management fees:

Adjusted EBITDA from management fees for the fourth quarter of 2018 was
$3.8 million, flat compared to the fourth quarter of 2017.

Share of pre-tax earnings from unconsolidated
companies
:

Adjusted share of pre-tax earnings from unconsolidated companies for the
fourth quarter of 2018 was $4.6 million, an increase of $1.0 million
compared to $3.6 million for the fourth quarter of 2017 due to an
increase in passenger numbers and freight revenue at the Company's
PeruRail joint venture.

Central overheads:

For the fourth quarter of 2018, adjusted central overheads were $6.5
million compared to adjusted central overheads of $6.1 million in the
prior-year quarter due to increased development and other corporate
headcount to support the Company's strategic growth plan.

Provision for income taxes:

For the fourth quarter of 2018, provision for income taxes was $8.1
million compared to a benefit of $11.0 million for the prior year
quarter. The increase in tax provision is mainly as a result of a
deferred tax benefit of $19.8 million in the prior year quarter
following the reduction in the U.S. corporate tax rate from 35 to 21 per
cent, effective January 1, 2018.

Investments

During the fourth quarter of 2018, the Company invested a total of $40.2
million in its portfolio, including $23.3 million on the refurbishment
of Belmond Cap Juluca; $11.3 million on the refurbishment of Belmond La
Samanna; $0.8 million for the refurbishment of '21' Club following water
damage from burst pipes earlier in the year; and $0.7 million at Venice
Simplon-Orient-Express for routine capital works.

Transaction costs

As described above, on December 13, 2018, the Company entered into a
Merger Agreement with LVMH, Holding, and Merger Sub, pursuant to which
LVMH will acquire the Company. During the year ended December 31, 2018,
expenses and fees for professional services related to the board's
review of strategic alternatives of $8.5 million were recognized within
selling, general and administrative expenses in the statements of
consolidated operations. If the Merger is consummated, the Company
expects to incur additional costs related to the board's review of
strategic alternatives which may be material. If the Merger Agreement is
terminated under certain specified circumstances, Belmond may be
required to pay to LVMH a termination fee equal to $92.3 million under
the terms of the Merger Agreement.

Balance Sheet

At December 31, 2018, the Company had total debt of $759.9 million and
cash balances of $111.8 million, resulting in net debt of $648.1 million
and a ratio of net debt to trailing-twelve-month adjusted EBITDA of 4.4
times. This compared to net debt of $523.1 million and a ratio of net
debt to trailing-twelve-month adjusted EBITDA of 4.2 times at December
31, 2017.

Outlook

In light of the impending transaction with LVMH described earlier in
this release, the Company will not be providing any guidance about
operating results and performance for future periods.

BELMOND LTD.

EARNINGS RELEASE SCHEDULES

TABLE OF CONTENTS

 
Statements of Condensed Consolidated Operations

8

Segment Information - Revenue and Adjusted EBITDA 9
Summary of Operating Information for Owned Hotels 10
Condensed Consolidated Balance Sheets 11
Reconciliations - Adjusted EBITDA 12
Reconciliations - Adjusted Net Earnings / (Losses) 13
Reconciliations - Adjusted Share of Pre-Tax Earnings from
Unconsolidated Companies
14
Net Debt to Adjusted EBITDA 15
 

BELMOND LTD.

STATEMENTS OF CONDENSED CONSOLIDATED OPERATIONS

(Unaudited)

                 
$ millions – except per share amounts  

Three months ended

December 31,

 

Twelve months ended

December 31,

2018   2017 2018   2017
 
Revenue 122.3 117.3 576.8 561.0
 
Expenses:
Cost of services 52.7 55.1 254.1 239.9
Selling, general and administrative 64.1 54.1 257.5 238.2
Depreciation and amortization 15.7 17.0 61.3 62.9
Impairment of goodwill 2.5 5.5 4.7 5.5
Impairment of property, plant and equipment and other assets 0.1 5.0 8.2
       
Total operating costs and expenses 135.1 131.7 582.6 554.7
 
Gain on disposal of property, plant and equipment 0.4 (0.6 ) 0.8 (0.2 )
Other operating income 2.7     16.9    
 
(Losses)/earnings from operations (9.7 ) (15.0 ) 11.9 6.1
 
Interest income 0.5 0.5 1.3 1.1
Interest expense (8.2 ) (7.9 ) (33.1 ) (32.5 )
Foreign currency, net 0.5 (0.3 ) (3.8 ) (3.0 )
       

Losses before income taxes and earnings from unconsolidated
companies,
net of tax

(16.9 ) (22.7 ) (23.7 ) (28.3 )
 
(Provision for)/benefit from income taxes (8.1 ) 11.0 (14.0 ) (6.6 )
       
Losses before earnings from unconsolidated companies, net of tax (25.0 ) (11.7 ) (37.7 ) (34.9 )
 

Earnings/(losses) from unconsolidated companies, net of tax
provision/(benefit)
of $2.0, ($8.5), $7.1 and ($4.5)

0.6 (18.0 ) 9.4 (10.2 )
       
Losses from continuing operations (24.4 ) (29.7 ) (28.3 ) (45.1 )
 

Net earnings from discontinued operations, net of tax provision of
$Nil, $Nil,
$Nil and $Nil

0.2
       
Net losses (24.4 ) (29.7 ) (28.3 ) (44.9 )
 
Net earnings attributable to non-controlling interests (0.2 ) (0.1 ) (0.2 ) (0.1 )
       
Net losses attributable to Belmond Ltd. (24.6 ) (29.8 ) (28.5 ) (45.0 )
 
EPS attributable to Belmond Ltd. (0.24 ) (0.29 ) (0.28 ) (0.44 )
Weighted average number of shares – millions   102.96     102.33     102.78     102.17  
 

 

BELMOND LTD.

SEGMENT INFORMATION

(Unaudited)

                 
$ millions  

Three months ended

December 31,

 

Twelve months ended

December 31,

2018   2017 2018   2017
 
Revenue
 
Owned hotels
- Europe 28.4 31.6 238.4 212.4
- North America 41.3 34.0 132.3 149.3
- Rest of world 36.7   35.6   122.2   124.2  
Total owned hotels 106.4 101.2 492.9 485.9
Owned trains & cruises 12.8 12.6 70.8 63.2
Management fees 3.1 3.5 13.1 11.9
       
Revenue 122.3 117.3 576.8 561.0
 
Adjusted EBITDA
 
Owned hotels
- Europe (0.8 ) 2.2 79.0 73.7
- North America 12.9 8.0 38.1 29.8
- Rest of world 10.3   8.6   24.6   24.5  
Total owned hotels 22.4 18.8 141.7 128.0
Owned trains & cruises 1.9 (0.9 ) 13.5 4.4
Management fees 3.8 3.8 15.4 15.3
Share of pre-tax earnings from unconsolidated companies 4.6   3.6   18.8   15.4  
32.7 25.3 189.4 163.1
 
Central overheads (6.5 ) (6.1 ) (29.5 ) (27.8 )
Share-based compensation (1.1 ) (0.8 ) (6.0 ) (5.8 )
Central marketing costs (2.5 ) (2.4 ) (7.0 ) (5.5 )
       
Adjusted EBITDA   22.6     16.0     146.9     124.0  
 

BELMOND LTD.

SUMMARY OF OPERATING INFORMATION FOR OWNED HOTELS

                 
  Three months ended December 31,   Twelve months ended December 31,
2018   2017 2018   2017
 
Room Nights Available
Europe 64,013 59,621 288,519 273,756
North America 61,250 57,592 231,875 255,862
Rest of world 94,392 93,660 372,678 374,478
Worldwide 219,655 210,873 893,072 904,096
 
Room Nights Sold
Europe 32,716 32,867 181,465 176,129
North America 41,155 36,992 160,267 171,906
Rest of world 57,261 55,593 204,013 200,537
Worldwide 131,132 125,452 545,745 548,572
 
Occupancy
Europe 51% 55% 63% 64%
North America 67% 64% 69% 67%
Rest of world 61% 59% 55% 54%
Worldwide 60% 59% 61% 61%
 
ADR (in U.S. dollars)
Europe 469 516 812 740
North America 488 404 430 426
Rest of world 388 384 368 380
Worldwide 440 424 534 510
 
RevPAR (in U.S. dollars)
Europe 240 284 511 476
North America 328 259 297 286
Rest of world 235 228 201 203
Worldwide 262 252 326 309
 
Same Store RevPAR (in U.S. dollars) (1)
Europe 236 284 510 476
North America 285 262 286 272
Rest of world 233 229 200 203
Worldwide 248 254 321 307
 
Same Store RevPAR (% change) U.S. dollar Constant currency U.S. dollar Constant currency
Europe (17)% (3)% 7% 4%
North America 9% 9% 5% 5%
Rest of world 2% 10% (1)% 4%
Worldwide   (2)%   6%   5%   5%

(1) Same store RevPAR data for the three months ended December 31,
2018 and 2017 and twelve months ended December 31, 2018 and 2017
excludes
the operations of Belmond Castello di Casole that was acquired in
February 2018. Its operations are included in the Europe segment.
It
also excludes the operations of Belmond Cap Juluca,
Anguilla, British West Indies, which was acquired in May 2017 and
Belmond La Samanna, St
Martin, French West Indies, which were
both closed for refurbishment following Hurricanes Irma and Jose
in September 2017. Both of these
operations are included in
the North America segment. In addition, same store RevPAR excludes
the operations of Belmond Savute Elephant Lodge,
Chobe
Reserve, Botswana, which was closed for refurbishment from
November 2017 to June 2018. Its operations are included in the
Rest of world
segment.

BELMOND LTD.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

         
$ millions   December 31,   December 31,
2018 2017
 
Assets
Cash 108.4 180.2
Restricted cash 1.9 3.1
Accounts receivable 37.7 34.4
Due from unconsolidated companies 10.3 12.8
Prepaid expenses and other 13.4 13.3
Inventories 21.2 23.1
   
Total current assets 192.9 266.9
 
Property, plant & equipment, net of accumulated depreciation 1,261.9 1,168.0
Investments in unconsolidated companies 69.2 64.6
Goodwill 111.1 120.2
Other intangible assets 27.1 19.8
Pension assets 0.2
Other assets 13.4 14.1
   
Total assets (1) 1,675.8 1,653.6
 
Liabilities and Equity
Accounts payable 23.0 15.8
Accrued liabilities 103.9 79.5
Deferred revenue 40.2 32.8
Current portion of long-term debt and capital leases 6.3 6.4
   
Total current liabilities 173.4 134.5
 
Long-term debt and obligations under capital leases 753.6 700.8
Liability for pension benefit 0.6
Other liabilities 4.0 3.0
Deferred income taxes 104.0 115.4
Liability for uncertain tax positions 0.6 0.5
   
Total liabilities (2) 1,035.6 954.8
 
Shareholders' equity 639.5 698.5
Non-controlling interests 0.7   0.3
Total equity 640.2 698.8
   
Total liabilities and equity   1,675.8     1,653.6
 

(1) Balance at December 31, 2018 includes $204.9 million (December
31, 2017 - $206.3 million) of assets of consolidated variable
interest entities

("VIEs") that can only be used to settle obligations of the VIEs.

(2) Balance at December 31, 2018 includes $171.0 million (December
31, 2017 - $123.0 million) of liabilities of consolidated VIEs
whose creditors

have no recourse to Belmond Ltd.

 

BELMOND LTD.

RECONCILIATIONS - ADJUSTED EBITDA

(Unaudited)

                 
$ millions  

Three months ended

December 31,

 

Twelve months ended

December 31,

2018   2017 2018   2017
 
Adjusted EBITDA reconciliation:
 
(Losses) from continuing operations (24.4 ) (29.7 ) (28.3 ) (45.1 )
Depreciation and amortization 15.7 17.0 61.3 62.9
Interest income (0.5 ) (0.5 ) (1.3 ) (1.1 )
Interest expense 8.2 7.9 33.1 32.5
Foreign currency, net (0.5 ) 0.3 3.8 3.0
Provision for/(benefit from) income taxes 8.1 (11.0 ) 14.0 6.6
Share of provision for income taxes of unconsolidated companies 2.0   (8.5 ) 7.1   (4.5 )
8.6 (24.5 ) 89.7 54.3
 
Insurance gains and deductibles (1.6 ) 0.3 (11.6 ) 1.5
Labor restructuring cost (1) (1.0 ) 13.9
Net operating losses at two Caribbean properties while closed 3.6 3.1 15.0 3.8
Cost to terminate right of first refusal and purchase option (2) (0.1 ) 13.0
Strategic review costs (3) 6.1 8.5
Other restructuring and special items (4) 2.7 0.9 6.3 6.4
Acquisition-related costs (5) 0.9 14.0
(Gain)/loss on disposal of property, plant and equipment (0.4 ) 0.6 (0.8 ) 0.2
Loss on disposal of property, plant and equipment in unconsolidated
companies
0.2
Impairment of goodwill, property, plant and equipment and other
assets (6)
2.6 5.5 9.7 13.7
Impairment of assets in unconsolidated companies (7) 2.1 30.1 2.1 30.1
       
Adjusted EBITDA   22.6     16.0     146.9     124.0  
 

(1) Represents charges for employee termination costs and other
associated costs to restructure the Company's labor force at
Belmond La

Samanna.

(2) Represents estimated costs to terminate purchase rights
previously held by Mr James Sherwood, a former director of the
Company, in respect

of the Belmond Hotel Cipriani.

(3) Represents legal, professional and other internal costs in
relation to the Company's strategic review.

(4) Represents costs in relation to restructuring, severance and
redundancy costs, pre-opening costs, and other items, net.

(5) Represents acquisition fees in relation to the purchase of
Castello di Casole in February 2018 and Cap Juluca in May 2017.

(6) Represents an impairment charge at three and five owned
properties in the three and twelve months ended 31 December 2018
respectively.

Represents an impairment charge at one and three owned properties
in the three and twelve months ended 31 December 2017,
respectively.

(7) Represents an impairment charge at one of the Company's Peru
unconsolidated hotels and PeruRail unconsolidated company in the
years

ended December 2018 and 2017, respectively.

 

BELMOND LTD.

RECONCILIATIONS - ADJUSTED NET (LOSSES)/EARNINGS

(Unaudited)

                 
$ millions – except per share amounts  

Three months ended

December 31,

 

Twelve months ended

December 31,

2018   2017 2018   2017
 
Adjusted net (losses)/earnings reconciliation:
 
(Losses) from continuing operations (24.4 ) (29.7 ) (28.3 ) (45.1 )
Insurance gains and deductibles (1.6 ) 0.3 (11.6 ) 1.5
Labor restructuring cost (1) (1.0 ) 13.9
Net operating losses at two Caribbean properties while closed 3.6 3.1 15.0 3.8
Cost to terminate right of first refusal and purchase option (2) (0.1 ) 13.0
Strategic review costs (3) 6.1 8.5
Other restructuring and special items (4) 2.7 0.9 6.3 6.4
Acquisition-related costs (5) 0.9 14.0
(Gain)/loss on disposal of property, plant and equipment (0.4 ) 0.6 (0.8 ) 0.2
Loss on disposal of property, plant and equipment in unconsolidated
companies
0.2
Impairment of goodwill, property, plant and equipment and other
assets (6)
2.6 5.5 9.7 13.7
Impairment of assets in unconsolidated companies (7) 2.1 30.1 2.1 30.1
Accelerated depreciation (8) 0.3 1.8 3.6 3.5
Interest adjustments 0.6
Foreign currency, net (9) (0.5 ) 0.3 3.8 3.0
Tax-related adjustments (10) 4.6 (10.2 ) (3.5 ) (10.2 )
Income tax effect of adjusting items (11) 0.2 (9.0 ) (2.2 ) (9.4 )
       
Adjusted net (losses)/earnings from continuing operations (5.8 ) (6.3 ) 30.6   12.1  
 
EPS from continuing operations (0.24 ) (0.29 ) (0.28 ) (0.44 )
Adjusted EPS from continuing operations (0.06 ) (0.06 ) 0.30 0.12
Weighted average number of shares (millions)   102.96     102.33     102.78     102.17  
 
 

(1) Represents charges for employee termination costs and other
associated costs to restructure the Company's labor force at
Belmond La

Samanna.

(2) Represents estimated costs to terminate purchase rights
previously held by Mr James Sherwood, a former director of the
Company, in respect

of the Belmond Hotel Cipriani.

(3) Represents legal, professional and other internal costs in
relation to the Company's strategic review.
(4) Represents costs in relation to restructuring, severance and
redundancy costs, pre-opening costs, and other items, net.
(5) Represents acquisition fees in relation to the purchase of
Castello di Casole in February 2018 and Cap Juluca in May 2017.

(6) Represents an impairment charge at three and five owned
properties in the three and twelve months ended 31 December 2018
respectively.

Represents an impairment charge at one and three owned properties
in the three and twelve months ended 31 December 2017,
respectively.

(7) Represents an impairment charge at one of the Company's Peru
unconsolidated hotels and PeruRail unconsolidated company in the
years

ended December 2018 and 2017, respectively.

(8) Represents additional depreciation charge to write assets down
to nil ahead of their anticipated replacement.

(9) Non-cash item arising from the translation of certain assets
and liabilities denominated in currencies other than the
functional currency of the

respective entity.

(10) Represents various non-recurring charges/credits recorded
within the Company's provision for income taxes.
(11) Represents income tax effect of adjusting items by applying the
applicable statutory tax rate to the adjusting items.
 

BELMOND LTD.

RECONCILIATIONS - ADJUSTED SHARE OF PRE-TAX EARNINGS FROM
UNCONSOLIDATED COMPANIES

(Unaudited)

   
$ millions

Three months ended

December 31,

Twelve months ended

December 31,

2018   2017 2018   2017
 
Adjusted share of pre-tax earnings from unconsolidated companies
reconciliation:
 
Earnings/(losses) from unconsolidated companies (1) 0.6 (18.0 ) 9.4 (10.2 )
Share of provision for/(benefit from) income taxes of unconsolidated
companies
2.0 (8.5 ) 7.1 (4.5 )
Loss on disposal of property, plant and equipment in unconsolidated
companies
0.2
Impairment of assets in unconsolidated companies 2.1 30.1 2.1 30.1
             
Adjusted share of pre-tax earnings from unconsolidated companies   4.7     3.6     18.8     15.4  
 
(1) Represents the Company's share of earnings from unconsolidated
companies.
 
 

 

 

BELMOND LTD.

NET DEBT TO ADJUSTED EBITDA

(Unaudited)

         
$ millions - except ratios Twelve months ended and as at

December 31,

2018

December 31,

2017

 
Cash
Cash and cash equivalents 108.4 180.2

Restricted cash (including $1.5 million and $0.8 million
classified within long-term other

assets on the balance sheet for 2018 and 2017, respectively)

3.4 3.9
   
Total cash 111.8 184.1
 
Total debt
Current portion of long-term debt and capital leases 6.3 6.4
Long-term debt and obligations under capital leases (1) 753.6 700.8
   
Total debt 759.9 707.2
 
Net debt 648.1 523.1
 
Adjusted EBITDA 146.9 124.0
 
Net debt / adjusted EBITDA   4.4   4.2
 
(1) Long-term debt is after the deduction of unamortized debt
issuance costs and discount on secured term loans.
 

About Belmond Ltd.

Belmond (belmond.com) is a global
collection of exceptional hotel and luxury travel adventures in some of
the world's most inspiring and enriching destinations. Established over
40 years ago with the acquisition of Belmond Hotel Cipriani in Venice,
its unique and distinctive portfolio now embraces 46 hotel, rail and
river cruise experiences, excluding one scheduled for an early 2019
opening in London, in many of the world's most celebrated destinations.
From city landmarks to intimate resorts, the collection includes Belmond
Grand Hotel Europe, St. Petersburg; Belmond Copacabana Palace, Rio de
Janeiro; Belmond Maroma Resort & Spa, Riviera Maya; and Belmond El
Encanto, Santa Barbara. Belmond also encompasses safaris, seven luxury
tourist trains, including the Venice Simplon-Orient-Express, and two
river cruises. Belmond also operates ‘21' Club, one of New York's most
storied restaurants. Further information on the Company can be found at investor.belmond.com.

Definitions

All references to constant currency, which is a non-GAAP measure,
represent a comparison between periods excluding the impact of foreign
exchange movements. The Company calculates these amounts by translating
prior-year results at current-year exchange rates. The Company analyzes
certain key financial measures on a constant currency basis to better
understand the underlying results and trends of the business without
distortion from the effects of currency movements.

Revenue per available room ("RevPAR") is calculated by dividing room
revenue by room nights available for the period. Same store RevPAR is a
comparison of RevPAR based on the operations of the same units in each
period, by excluding the effect of any hotel acquisitions in the period
or major refurbishment where a property is closed for a full quarter or
longer. The comparison also excludes the effect of dispositions
(including discontinued operations) or closures. Management uses RevPAR
and same store RevPAR to identify trend information with respect to room
revenue and to evaluate the performance of a specific hotel or group of
hotels in a given period.

Average daily rate ("ADR") is calculated by dividing room revenue by
rooms sold for the period. Management uses ADR to measure the level of
pricing achieved by a specific hotel or group of hotels in a given
period.

Occupancy is calculated by dividing total rooms sold by total rooms
available for the period. Occupancy measures the utilization of a
hotel's available capacity. Management uses occupancy to measure demand
at a specific hotel or group of hotels in a given period.

Earnings before interest, taxes, depreciation and amortization
("EBITDA"), reflects earnings / (losses) from continuing operations
excluding interest, foreign exchange (a non-cash item), tax (including
tax on unconsolidated companies), depreciation and amortization.

Adjusted EBITDA is calculated by adjusting EBITDA for items such as
restructuring and other special items such as leases and sales,
acquisition-related costs, disposals of assets and investments,
impairments, temporary closures and certain other items (some of which
may be recurring) that management does not consider indicative of
ongoing operations or that could otherwise have a material effect on the
comparability of the Company's operations.

Adjusted net earnings / (losses) is calculated by adjusting earnings /
(losses) from continuing operations for items such as foreign exchange
(a non-cash item), leases and sales, acquisition-related costs,
disposals of assets and investments, impairments, temporary closures,
the tax effect of adjusting items and other one-off tax impacts, and
certain other items (some of which may be recurring) that management
does not consider indicative of ongoing operations or that could
otherwise have a material effect on the comparability of the Company's
operations.

Net debt is the sum of the Company's current portion of long-term debt
and capital leases and long-term debt and obligations under capital
leases minus the sum of the Company's cash, cash equivalents and
restricted cash. The Company measures long-term debt after deducting
unamortized debt issuance costs and discount on secured term loans.

Use of Non-GAAP Financial Measures

To supplement the Company's consolidated financial statements presented
in accordance with U.S. generally accepted accounting principles ("U.S.
GAAP"), which are filed with the Securities and Exchange Commission
("SEC") as part of the Company's annual report on Form 10-K and interim
reports on Form 10-Q, management analyzes the operating performance of
the Company on the basis of adjusted EBITDA. Adjusted EBITDA is the
measure used by the Company's management team to assess the operating
performance of the Company's businesses. Adjusted EBITDA is also
presented on a consolidated basis because management believes it helps
our investors evaluate the Company's profitability on a basis consistent
with that of its operating segments. Adjusted EBITDA is also a financial
performance measure commonly used in the hotel and leisure industry,
although the Company's EBITDA may not be comparable in all instances to
that disclosed by other companies. Adjusted EBITDA should not be
considered as an alternative to earnings from operations or net earnings
under U.S. GAAP for purposes of evaluating the Company's operating
performance as presented in the Company's consolidated financial
statements filed with the SEC.

Adjusted EBITDA, when presented on a consolidated basis, including the
items set forth in the Company's reconciliations tables, and adjusted
net earnings / (losses) of the Company are non-GAAP financial measures
and do not have any standardized meanings prescribed by U.S. GAAP.
Adjusted EBITDA provides useful information to investors about the
Company because it is not affected by non-operating factors such as
leverage (affecting interest expense), tax positions (affecting income
tax expense), the historical cost of assets (affecting depreciation
expense) and the extent to which intangible assets are identifiable
(affecting amortization expense). Adjusted EBITDA and adjusted net
earnings / (losses) are unlikely to be comparable to similar measures
presented by other companies, which may be calculated differently, and
should not be considered as an alternative to net earnings or any other
measure of performance prescribed by U.S. GAAP. Management considers
adjusted EBITDA and adjusted net earnings / (losses) to be meaningful
indicators of operations and uses them as measures to assess operating
performance. Adjusted EBITDA and adjusted net earnings / (losses) are
also used by investors, analysts and lenders as measures of financial
performance because, as adjusted in the described manner, the measures
provide a consistent basis on which the performance of the Company can
be assessed from period to period. However, these measures are not
intended to substitute for U.S. GAAP measures of Company performance as
reflected in the Company's consolidated financial statements filed with
the SEC.

EBITDA, adjusted EBITDA and adjusted net earnings / (losses) have
limitations as analytical tools. Some of these limitations are: they do
not reflect the Company's cash expenditures or future requirements for
capital expenditure or contractual commitments; they do not reflect
changes in, or cash requirements for, the Company's working capital
needs; they do not reflect interest expense, or the cash requirements
necessary to service interest or principal payments, on the Company's
debt; although depreciation and amortization are non-cash charges, the
assets being depreciated and amortized will often have to be replaced in
the future, and EBITDA and adjusted EBITDA do not reflect any cash
requirements for such replacements; and they are not adjusted for all
non-cash income or expense items that are reflected in the Company's
statements of cash flows.

Cautionary Statements

This news release and related oral presentations by management contain,
in addition to historical information, forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995.
These include statements regarding the potential sale of the Company to
LVMH, the Company's three-point growth strategy, future revenue,
earnings, RevPAR, EBITDA and adjusted EBITDA, statement of operations
and cash flow outlook, investment plans, debt refinancings, asset
acquisitions, leases and sales, entry into third-party management
contracts, operating synergies and revenue opportunities, operating
systems, and benefits of the Company's brand and similar matters that
are not historical facts and therefore involve risks and uncertainties.
These statements are based on management's current expectations and
beliefs regarding future developments, are not guarantees of performance
and are subject to a number of uncertainties and risks that could cause
actual results to differ materially from those described in the
forward-looking statements. Factors that may cause actual results,
performance and achievements to differ from those express or implied in
the forward-looking statements include, but are not limited to, those
mentioned in the news release and oral presentations, risks related to
the potential sale of the Company to LVMH, our ability to execute and
achieve our three-point growth strategy, future effects, if any, on the
travel and leisure markets of terrorist activity and any police or
military response, varying customer demand and competitive
considerations, failure to realize expected hotel bookings and
reservations and planned real estate sales as actual revenue, inability
to sustain price increases or to reduce costs, rising fuel costs
adversely impacting customer travel and the Company's operating costs,
fluctuations in interest rates and currency values, uncertainty of
negotiating and completing any future asset acquisitions, leases, sales
and third-party management contracts, debt refinancings, capital
expenditures and acquisitions, inability to reduce funded debt as
planned or to obtain bank agreement to any future requested loan
agreement waivers or amendments, adequate sources of capital and
acceptability of finance terms, possible loss or amendment of planning
permits and delays in construction schedules for expansion projects,
delays in reopening properties closed for repair or refurbishment and
possible cost overruns, shifting patterns of tourism and business travel
and seasonality of demand, adverse local weather conditions, possible
challenges to the Company's ownership of its brands, the Company's
reliance on technology systems and its development of new technology
systems, changing global or regional economic conditions and weakness in
financial markets which may adversely affect demand, legislative,
regulatory and political developments (including the evolving political
situation in Ukraine, Brazil, and Peru, and regional events in Myanmar,
in the United Kingdom in respect of its withdrawal from the European
Union and in the United States in respect of its evolving immigration
and trade policies and the Tax Cuts and Jobs Act of 2017, and the
resulting impact of these situations on local and global economies,
exchange rates and on current and future demand), the threat or current
transmission of epidemics, infectious diseases, and viruses, such as the
Zika virus which may affect demand in Latin America, including the
Caribbean, and elsewhere, and possible challenges to the Company's
corporate governance structure. Further information regarding these and
other factors that could cause management's current expectations and
beliefs not to be realized is included in the filings by the Company
with the U.S. Securities and Exchange Commission. Except as otherwise
required by law, the Company undertakes no obligation to update or
revise publicly any forward-looking statement, whether due to new
information, future events or otherwise.

* * * * * *

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