Interstate Hotels & Resorts Reports Strong Second-Quarter 2005 Results; Exceeds Guidance, Raises 2005 Earnings Guidance for Second Time.ARLINGTON Arlington, county, United States Arlington, county (1990 pop. 170,936), N Va., across the Potomac River from Washington, D.C. Arlington is a residential and commercial suburb of Washington. , Va. -- Interstate in·ter·state adj. Involving, existing between, or connecting two or more states. n. One of a system of highways extending between the major cities of the 48 contiguous United States. Noun 1. Hotels & Resorts (NYSE NYSE See: New York Stock Exchange :IHR IHR Institute for Historical Review (Orange Country, California) IHR International Health Regulations IHR Institute for Health Research (Lancaster University, UK) IHR Inside Home Recording ), the nation's largest independent hotel management company, today reported results of operations for the second quarter ended June June: see month. 30, 2005. The company exceeded its earnings guidance of May 5 and raised its 2005 full-year earnings guidance for the second time this year. For the 2005 second quarter, net income was $1.7 million, or $0.06 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, compared to net loss of $(2.7) million, or $(0.09) per diluted share, in the second quarter 2004. Adjusted earnings before interest, taxes, depreciation and amortization Earnings before interest, taxes, depreciation and amortization (EBITDA) is a non-GAAP metric that can be used to evaluate a company's profitability.
Divisions of a business that have been sold or written off and that no longer are maintained by the business. , was $7.9 million, up 23.6 percent from $6.4 million in the 2004 second quarter. Net income, excluding non-recurring items and special charges, was $2.6 million, or $0.09 per share, compared to net income of $1.3 million, or $0.04 per share, for the same period a year earlier. Second-quarter 2005 results for Adjusted EBITDA, excluding non-recurring items, special charges and discontinued operations, exceeded the company's upwardly revised guidance of $6.5 million to $7.5 million. Net income and earnings per share (EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. ), both excluding non-recurring items, special charges and discontinued operations, exceeded the high end of the company's guidance by $0.4 million and $0.02, respectively. Both hotel management and BridgeStreet operations contributed to the strong second-quarter results. Total revenue in the 2005 second quarter, excluding other revenue from managed properties (reimbursable re·im·burse tr.v. re·im·bursed, re·im·burs·ing, re·im·burs·es 1. To repay (money spent); refund. 2. To pay back or compensate (another party) for money spent or losses incurred. costs), was $55.2 million, compared to $46.5 million in the 2004 second quarter. The company experienced revenue increases across all areas of business. The increase is primarily due to the February February: see month. 2005 acquisition of the Hilton Hil·ton , Conrad Nicholson 1887-1979. American hotel-chain organizer who acquired hotels in many American cities and in 1946 founded the Hilton Hotel Corporation. Concord Concord, cities, United States Concord (kŏng`kərd, kŏn`kôrd'). 1 city (1990 pop. 111,348), Contra Costa co., W central Calif.; settled c.1852, inc. 1906. hotel in San Francisco San Francisco (săn frănsĭs`kō), city (1990 pop. 723,959), coextensive with San Francisco co., W Calif., on the tip of a peninsula between the Pacific Ocean and San Francisco Bay, which are connected by the strait known as the Golden and strong performance from the BridgeStreet Corporate Housing Worldwide subsidiary, as well as higher management fee revenue resulting from a greater number of managed properties compared to the same period last year and favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. operating results across the company's portfolio. Hotel Operating Results Same-store revenue per available room (RevPAR RevPAR A performance metric in the hotel industry which stands for "revenue per available room." RevPAR is typically calculated by multiplying a hotel's average daily room rate (ADR) by its occupancy rate. ) for all managed hotels, excluding those hotels affected by the hurricanes that struck Florida Florida, state, United States Florida (flôr`ĭdə, flŏr`–), state in the extreme SE United States. A long, low peninsula between the Atlantic Ocean (E) and the Gulf of Mexico (W), Florida is bordered by Georgia and in the fall of 2004, improved 11.1 percent to $82.02, which is 0.6 percentage points above the high end of the company's guidance, and 2.8 percentage points above the industry average of 8.3 percent, as reported by Smith Travel Research. Average daily rate (ADR ADR - Astra Digital Radio ) improved 8.6 percent to $110.34, while occupancy rose 2.3 percent to 74.3 percent. Same-store RevPAR for all full-service full-ser·vice adj. Associated with or offering complete service: full-service gasoline pumps; full-service banks. managed hotels, excluding those hotels affected by the hurricanes, rose 11.4 percent to $85.84. ADR improved 9.0 percent to $115.29, while occupancy advanced 2.3 percent to 74.5 percent. Same-store RevPAR for all select-service managed hotels, excluding those hotels affected by the hurricanes, increased 9.1 percent to $64.64, led by a 6.5 percent improvement in ADR to $87.63 and a 2.4 percent increase in occupancy to 73.8 percent. "Interstate posted strong results for the second quarter," said Thomas (language) Thomas - A language compatible with the language Dylan(TM). Thomas is NOT Dylan(TM). The first public release of a translator to Scheme by Matt Birkholz, Jim Miller, and Ron Weiss, written at Digital Equipment Corporation's Cambridge Research Laboratory runs F. Hewitt Hewitt may refer to:
BridgeStreet Results Up Substantially The company's BridgeStreet division reported substantially improved revenues and profitability over the prior year, led by strong results in four key markets: New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of , London London, city, Canada London, city (1991 pop. 303,165), SE Ont., Canada, on the Thames River. The site was chosen in 1792 by Governor Simcoe to be the capital of Upper Canada, but York was made capital instead. London was settled in 1826. , Washington Washington, town, England Washington, town (1991 pop. 48,856), Sunderland metropolitan district, NE England. Washington was designated one of the new towns in 1964 to alleviate overpopulation in the Tyneside-Wearside area. , D.C., and Chicago Chicago, city, United States Chicago (shĭkä`gō, shĭkô`gō), city (1990 pop. 2,783,726), seat of Cook co., NE Ill., on Lake Michigan; inc. 1837. . BridgeStreet's Smart Growth program, which was launched earlier this year and focuses on yield management and optimizing apartment rentals, positively impacted rate and occupancy, which rose 8.6 percent and 2.2 percent, respectively, for the second quarter. The division also has benefited from the strength and quality of its licensing program, which provides BridgeStreet with significantly enhanced distribution in more than 90 U.S. market statistical areas (MSAs). Following the close of the second quarter, one of BridgeStreet's Global Partners added apartments to the program in Boca Raton Boca Raton (bō`kə rətōn`), city (1990 pop. 61,492), Palm Beach co., SE Fla., on the Atlantic; inc. 1925. Boca Raton is a popular resort and retirement community that experienced significant industrial development in the 1970s and 80s. , Ft. Lauderdale Lauderdale is the name of various places:
Miami is a major city in southeastern Florida, in the United States. It is the county seat of Miami-Dade County. Miami is a gamma world city with an estimated population of 404,048. . "BridgeStreet continues to gain strength this year," Hewitt said. "We experienced improved rate and occupancy over the same quarter last year. As a result of our restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). efforts in 2004, our BridgeStreet subsidiary is focused in a stronger mix of markets, allowing us to achieve increased profitability on a slightly smaller unit count." Acquisition and Divestment divestment to strip one's investment from an entity. The company benefited from its first full quarter of ownership of the 329-room Hilton Concord in the East Bay area of San Francisco, Calif., acquired in February 2005. "We have determined that we now will own the hotel outright, rather than sell the property into a joint venture partially owned by Interstate," Hewitt noted. The Hilton Concord exceeded the company's pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma results in the 2005 second quarter. During the second quarter, Interstate entered into an agreement to sell its Residence Inn Pittsburgh Pittsburgh (pĭts`bərg), city (1990 pop. 369,879), seat of Allegheny co., SW Pa., at the confluence of the Allegheny and the Monongahela rivers, which there form the Ohio River; inc. 1816. for $11 million. The transaction is expected to close in the third quarter. "We plan to use the proceeds to fund future acquisitions," said J. William Richardson William Richardson can refer to:
Key Financial Information On June 30, 2005, Interstate had: --Total cash of $12.6 million --Total debt of $100.2 million, consisting of $75.5 million of senior debt, $19 million of mortgage debt, $5.7 million of other debt Outlook and Guidance "We remain optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op about the outlook for our managed hotel portfolio and for the industry as a whole," Richardson Richardson, city (1990 pop. 74,840), Dallas and Collins counties, N Tex., a suburb of Dallas; founded in the 1850s, inc. as a city 1956. Richardson manufactures telecommunications equipment, medical devices, supercomputers, computer chips, and fiber optics. said. "With the addition of the Hilton Concord to our portfolio, continued aggressive growth in RevPAR, a projected modest increase in incentive fees and continued strength from BridgeStreet, we are raising our guidance for the second time this year." The company provides the following range of estimates for the third quarter and full year 2005: --RevPAR is expected to improve 7.5 to 8.5 percent in the third quarter and 8.5 to 9.5 percent for the full year; --Net income of $1.3 million to $2.0 million for the third quarter and net income of $9.4 million to $10.9 million for the full year; --Net income per diluted share of $0.04 to $0.07 for the third quarter and net income per diluted share of $0.30 to $0.35 for the full year; --Excluding non-recurring charges, special items and discontinued operations, net income of $1.3 million to $2.0 million for the third quarter and net income of $10.8 million to $12.3 million for the full year; --Excluding non-recurring charges, special items and discontinued operations, net income per diluted share of $0.04 to $0.07 for the third quarter and net income per diluted share of $0.35 to $0.39 for the full year; --Excluding non-recurring charges, special items and discontinued operations, Adjusted EBITDA of $6.1 million to $7.1 million for the third quarter and $32.5 million to $34.5 million for the full year. Interstate will hold a conference call to discuss its second-quarter results today, August 9, at 10 a.m. Eastern time. Interested parties may visit the company's Web site at www.ihrco.com and click on Investor Relations Investor relations The process by which the corporation communicates with its investors. and then Second-Quarter Conference Call. Interested parties also may listen to a replay of the conference call until midnight on Tuesday Tuesday: see week. , August 16, 2005, by dialing (800) 405-2236, reference number 11034560. An archived webcast of the conference call will be posted on Interstate Hotels & Resorts' Web site through September September: see month. 9, 2005. Interstate Hotels & Resorts operates more than 300 hospitality properties with nearly 69,000 rooms in 41 states, the District of Columbia District of Columbia, federal district (2000 pop. 572,059, a 5.7% decrease in population since the 1990 census), 69 sq mi (179 sq km), on the east bank of the Potomac River, coextensive with the city of Washington, D.C. (the capital of the United States). , Canada Canada (kăn`ədə), independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of , and Russia Russia, officially the Russian Federation, Rus. Rossiya, republic (2005 est. pop. 143,420,000), 6,591,100 sq mi (17,070,949 sq km). . BridgeStreet Worldwide, an Interstate Hotels & Resorts' subsidiary, is one of the world's largest corporate housing providers. BridgeStreet and its network of Global Partners offer more than 8,700 corporate apartments located in 91 MSAs throughout the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. and internationally. For more information about Interstate Hotels & Resorts, visit the company's Web site: www.ihrco.com. Non-GAAP Financial Measures Included in this press release are certain "non-GAAP financial measures," which are measures of our historical or estimated future performance that are different from measures calculated and presented in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). , within the meaning of applicable SEC rules, that we believe are useful to investors. They are as follows: (i) Adjusted EBITDA and (ii) Adjusted EBITDA and net income (loss), basic EPS and diluted EPS, excluding non-recurring items, special charges and discontinued operations. The following discussion defines these terms and presents the reasons we believe they are useful measures of our performance. Adjusted EBITDA A significant portion of our non-current assets consists of intangible assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. . Of those intangible assets, the costs of our management contracts are amortized over their expected terms. Because depreciation and amortization are non-cash items, management and many industry investors believe the presentation of Adjusted EBITDA is useful to management and to investors. Adjusted EBITDA represents consolidated earnings before interest expense, income taxes, depreciation and amortization, equity in earnings of affiliates, minority interests, gain on refinancing Refinancing An extension and/or increase in amount of existing debt. and discontinued operations. We believe Adjusted EBITDA provides useful information to investors regarding our financial condition and results of operations because Adjusted EBITDA is useful for evaluating our performance and our capacity to incur To become subject to and liable for; to have liabilities imposed by act or operation of law. Expenses are incurred, for example, when the legal obligation to pay them arises. An individual incurs a liability when a money judgment is rendered against him or her by a court. and service debt, fund capital expenditures and expand our business. Management also uses Adjusted EBITDA as one measure in determining the value of acquisitions and dispositions. We also believe that the rating agencies and a number of lenders use Adjusted EBITDA for those purposes and a number of restrictive covenants Restrictive covenants Provisions that place constraints on the operations of borrowers, such as restrictions on working capital, fixed assets, future borrowing, and payment of dividends. related to our indebtedness INDEBTEDNESS. The state, of being in debt, without regard to the ability or inability of the party to pay the same. See 1 Story, Eq. 343; 2 Hill. Ab. 421. 2. use Adjusted EBITDA as a measure. Adjusted EBITDA and Net Income, Excluding Non-recurring Items, Special Charges and Discontinued Operations We define Adjusted EBITDA, excluding non-recurring items, special charges and discontinued operations, as Adjusted EBITDA excluding the effects of certain charges, transactions and expenses incurred in connection with events management believes are not reasonably likely to recur or have a continuing effect on our ongoing operations. Non-recurring items, special charges and discontinued operations include restructuring and severance The act of dividing, or the state of being divided. The term severance has unique meanings in different branches of the law. Courts use the term in both civil and criminal litigation in two ways: first, when dividing a lawsuit into two or more parts, and second, when expenses, asset impairments and write-offs, other non-cash charges Non-Cash Charge A charge off, made by a company against earnings, that does not require an initial outlay of cash. Notes: Non-cash charges are typically against the depreciation, amortization, and depletion accounts on a company's balance sheet. , gains and losses on asset dispositions and the operating results of our discontinued dis·con·tin·ue v. dis·con·tin·ued, dis·con·tin·u·ing, dis·con·tin·ues v.tr. 1. To stop doing or providing (something); end or abandon: operating units operating unit A type of operating company that engages in transactions with outsiders and that is owned by another business. For example, in 1995 the stockholders of Capital Cities/ABC approved a $19 billion merger with the Walt Disney Company, whereupon . Similarly, we define net income (loss), basic EPS and diluted EPS, excluding non-recurring items, special charges and discontinued operations as net income (loss), basic EPS and diluted EPS, without the effects of those same charges, transactions and expenses. We believe that Adjusted EBITDA and net income (loss), basic EPS and diluted EPS, excluding non-recurring items, special charges and discontinued operations, are useful performance measures because including these non-recurring items, special charges and discontinued operations may either mask or exaggerate trends in our ongoing operating performance. Furthermore, performance measures that include non-recurring items, special charges and discontinued operations may not be indicative of the continuing performance of our underlying business. Therefore, we present Adjusted EBITDA and net income (loss), basic EPS and diluted EPS, excluding non-recurring items, special charges and discontinued operations because they may help investors to compare our performance before the effect of various items that do not directly affect our ongoing operating performance. This press release contains "forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. ," within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995, about Interstate Hotels & Resorts, including those statements regarding future operating results and the timing and composition of revenues, among others, and statements containing words such as "expects," "believes" or "will," which indicate that those statements are forward-looking for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. . Except for historical information, the matters discussed in this press release are forward-looking statements that are subject to certain risks and uncertainties that could cause the actual results to differ materially, including the volatility of the national economy, economic conditions generally and the hotel and real estate markets specifically, the aftermath of the war with Iraq, international and geopolitical ge·o·pol·i·tics n. (used with a sing. verb) 1. The study of the relationship among politics and geography, demography, and economics, especially with respect to the foreign policy of a nation. 2. a. difficulties or health concerns, governmental actions, legislative and regulatory changes, availability of debt and equity capital, interest rates, competition, weather conditions or natural disasters, supply and demand for lodging Lodging or holiday accommodation is a type of accommodation. People who travel and stay away from home for more than a day need lodging mainly for sleeping. Other purposes are safety, shelter from cold and rain, having a place to store luggage and being able to take a facilities in our current and proposed market areas, and the company's ability to manage integration and growth. Additional risks are discussed in Interstate Hotels & Resorts' filings with the Securities and Exchange Commission, including Interstate Hotels & Resorts' annual report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. as amended a·mend v. a·mend·ed, a·mend·ing, a·mends v.tr. 1. To change for the better; improve: amended the earlier proposal so as to make it more comprehensive. 2. for the year ended December 31, 2004.
Interstate Hotels & Resorts, Inc.
Historical Statements of Operations
(Unaudited, in thousands except per share amounts)
Three Months Ended Six Months Ended
June 30 June 30
-----------------------------------------
2005 2004 2005 2004
-------- -------- -------- --------
Revenue:
Lodging revenue $ 4,234 $ 848 $ 6,796 $ 1,571
Management fees 16,353 14,968 30,352 28,646
Corporate housing 31,125 27,555 58,525 51,805
Other revenue 3,503 3,102 6,458 6,354
-------- -------- -------- --------
55,215 46,473 102,131 88,376
Other revenue from
managed properties (7) 229,407 194,334 433,704 373,874
-------- -------- -------- --------
Total revenue 284,622 240,807 535,835 462,250
Operating expenses by
department:
Lodging expenses 2,818 508 4,768 972
Corporate housing 24,620 21,903 48,029 42,285
Undistributed operating
expenses:
Administrative and general 19,896 17,684 37,927 35,202
Depreciation and
amortization 2,271 2,338 4,511 4,733
Restructuring and
severance expenses 96 3,312 2,119 3,439
Asset impairments and
write-offs (4) 849 1,698 1,911 6,191
-------- -------- -------- --------
50,550 47,443 99,265 92,822
Other expenses from
managed properties (7) 229,407 194,334 433,704 373,874
-------- -------- -------- --------
Total operating expenses 279,957 241,777 532,969 466,696
-------- -------- -------- --------
OPERATING INCOME (LOSS) 4,665 (970) 2,866 (4,446)
Interest expense, net (5) (2,089) (1,568) (5,883) (3,290)
Equity in earnings (losses)
of affiliates 350 (165) 3,192 (941)
Gain on sale of investments - - 385 -
-------- -------- -------- --------
INCOME (LOSS) BEFORE
MINORITY INTEREST AND
INCOME TAXES 2,926 (2,703) 560 (8,677)
Income tax (expense) benefit (1,154) 1,385 (230) 3,939
Minority interest (expense)
benefit (29) 29 (11) 75
-------- -------- -------- --------
INCOME (LOSS) FROM
CONTINUING OPERATIONS 1,743 (1,289) 319 (4,663)
Loss from discontinued
operations, net of tax (11) - (1,362) - (1,732)
-------- -------- -------- --------
NET INCOME (LOSS) $ 1,743 $ (2,651) $ 319 $ (6,395)
======== ======== ======== ========
Basic earnings (loss) per
share
Basic earnings (loss) per
share from continuing
operations $ 0.06 $ (0.04) $ 0.01 $ (0.15)
Basic earnings (loss) per
share from discontinued
operations - (0.05) - (0.06)
-------- -------- -------- --------
Basic earnings (loss)
per share $ 0.06 $ (0.09) $ 0.01 $ (0.21)
======== ======== ======== ========
Diluted earnings (loss) per
share
Diluted earnings (loss)
per share from
continuing operations $ 0.06 $ (0.04) $ 0.01 $ (0.15)
Diluted earnings (loss)
per share from
discontinued operations - (0.05) - (0.06)
-------- -------- -------- --------
Diluted earnings (loss)
per share $ 0.06 $ (0.09) $ 0.01 $ (0.21)
======== ======== ======== ========
Weighted average number of
common shares outstanding
(in thousands):
Basic 30,716 30,587 30,686 30,328
Diluted (1) 30,993 30,587 30,980 30,328
Reconciliations of Non-GAAP Three Months Ended Six Months Ended
financial measures June 30 June 30
-----------------------------------------
2005 2004 2005 2004
-------- -------- -------- --------
Net Income (loss) $ 1,743 $ (2,651) $ 319 $ (6,395)
Adjustments:
Depreciation and
amortization 2,271 2,338 4,511 4,733
Interest expense, net 2,089 1,568 5,883 3,290
Equity in (earnings)
losses of affiliates (350) 165 (3,192) 941
Discontinued
operations (11) - 1,362 - 1,732
Income tax expense
(benefit) 1,154 (1,385) 230 (3,939)
Minority interest
expense (benefit) 29 (29) 11 (75)
-------- -------- -------- --------
Adjusted EBITDA (2) 6,936 1,368 7,762 287
Restructuring expenses 96 3,312 2,119 3,439
Asset impairments and
write-offs (4) 849 1,698 1,911 6,191
Gain on sale of
investments - - (385) -
-------- -------- -------- --------
Adjusted EBITDA, excluding
non-recurring items,
special charges and
discontinued
operations (2) $ 7,881 $ 6,378 $ 11,407 $ 9,917
======== ======== ======== ========
Net Income (loss) $ 1,743 $ (2,651) $ 319 $ (6,395)
Adjustments to net income
(loss):
Restructuring expenses 96 3,312 2,119 3,439
Asset impairments and
write-offs (4) 849 1,698 1,911 6,191
Gain on sale of
investments - - (385) -
Deferred financing costs
write-offs (5) - - 1,847 -
Equity interest in the
gain on sale of Hilton
San Diego (8) (549) - (4,202) -
Equity interest in the
loss on sale of Wyndham
Milwaukee (10) 380 - 380 -
MIP deferred financing
costs write-off (9) - - 295 -
Discontinued
operations (11) - 973 - 1,237
Minority interest expense
(benefit) (2) (38) (12) (50)
Income tax rate
adjustment (6) 126 (2,003) (470) (3,852)
-------- -------- -------- --------
Net income, excluding non-
recurring items, special
charges and discontinued
operations (2) $ 2,643 $ 1,291 $ 1,802 $ 570
======== ======== ======== ========
Basic earnings per share,
excluding non-recurring
items, special charges and
discontinued
operations (2) $ 0.09 $ 0.04 $ 0.06 $ 0.02
======== ======== ======== ========
Diluted earnings per share,
excluding non-recurring
items, special charges and
discontinued
operations (2) $ 0.09 $ 0.04 $ 0.06 $ 0.02
======== ======== ======== ========
Weighted average number of
common shares outstanding
(in thousands):
Basic 30,716 30,587 30,686 30,328
Diluted (1) 30,993 30,774 30,993 30,539
Same-store hotel operating statistics (excluding 10 properties damaged
in 2004 hurricanes):
Full-service hotels:
Occupancy 74.5% 72.8% 70.7% 69.7%
ADR $ 115.29 $ 105.80 $ 113.31 $ 104.35
RevPAR $ 85.84 $ 77.02 $ 80.15 $ 72.73
Select-service hotels:
Occupancy 73.8% 72.0% 69.5% 67.5%
ADR $ 87.63 $ 82.26 $ 86.22 $ 81.30
RevPAR $ 64.64 $ 59.26 $ 59.96 $ 54.86
Total:
Occupancy 74.3% 72.7% $ 70.50 69.3%
ADR $ 110.34 $ 101.61 $ 108.50 $ 100.32
RevPAR $ 82.02 $ 73.84 $ 76.51 $ 69.52
Outlook Reconciliation (3) Forecast
-------------------
Three
months Year
ending ending
September December
30, 2005 31, 2005
-------------------
Net income $ 1,700 $ 10,150
Depreciation and
amortization 2,250 9,050
Interest expense, net (5) 1,750 9,350
Equity in (earnings)
losses of affiliates 250 (2,700)
Minority interest expense
(benefit) - 150
Income tax expense
(benefit) 650 3,900
-------- --------
Adjusted EBITDA (2) 6,600 29,900
Restructuring expenses - 2,100
Asset impairments and
write-offs (4) - 1,900
Gain on sale of
investments - (400)
-------- --------
Adjusted EBITDA, excluding
non-recurring items,
special charges and
discontinued
operations (2) $ 6,600 $ 33,500
======== ========
Net income $ 1,700 $ 10,150
Adjustments to net income:
Restructuring expenses - 2,100
Asset impairments and
write-offs (4) - 1,900
Gain on sale of
investments - (400)
Deferred financing costs
write-offs (5) - 1,850
Equity interest in the
gain on sale of Hilton
San Diego (8) - (4,200)
Equity interest in the
loss on sale of Wyndham
Milwaukee (10) - 400
MIP deferred financing
costs write-off (9) - 300
Income Tax rate
adjustment (6) - (550)
-------- --------
Net income, excluding non-
recurring items, special
charges and discontinued
operations (2) $ 1,700 $ 11,550
======== ========
Income per diluted share,
excluding non-recurring
items, special charges and
discontinued
operations (2) $ 0.05 $ 0.37
======== ========
(1) Diluted shares outstanding are calculated as the weighted average
number of shares of common stock outstanding plus other
potentially dilutive securities. Dilutive securities may include
shares granted under our stock incentive plans and operating
partnership units held by minority partners. No effect is shown
for any securities that are anti-dilutive.
(2) See discussion of Adjusted EBITDA, net income, basic and diluted
earnings per share, excluding non-recurring items, special
charges, and discontinued operations, located in the "Non-GAAP
Financial Measures" section, described earlier in this press
release.
(3) Our outlook reconciliation uses the mid-point of our estimates of
Adjusted EBITDA, net income, and diluted EPS, all excluding non-
recurring items, special charges and discontinued operations. Our
outlook reconciliation uses the mid-point of our estimates of
Adjusted EBITDA, net income, and diluted EPS, all excluding non-
recurring items, special charges, and discontinued operations. In
addition, we are currently evaluating the status of our $3.7
million non-recourse note with FelCor Hospitality which we made in
connection with our joint venture with FelCor. As the properties
in the joint venture are now in foreclosure we are reviewing the
appropriate treatment and accounting period in accordance with
GAAP to derecognize the note and related interest payable. Our
outlook does not take the resulting gain from derecognizing the
note into account as we would consider this item to be
non-recurring in nature.
(4) This amount is included in undistributed operating expenses and
primarily represents write-offs of intangible costs associated
with terminated management contracts and other terminated
activities and other asset impairments.
(5) For the first quarter of 2005, Interest expense, net, includes
$1,847 of deferred financing fees written off in connection with
the refinancing of our senior secured credit facility.
(6) This amount represents an adjustment to recorded income tax
expense to bring our overall effective tax rate to an estimated
normalized rate of 28% in 2005 and 40% in 2004. This effective tax
rate will differ from the effective tax rate reported in our
historical statements of operations.
(7) Other revenue from managed properties and other expenses from
managed properties have been revised in the same amount for the
second quarter 2004 for certain amounts previously included in
error. This revision has no impact on EBITDA, net income or our
balance sheet and cash flows.
(8) This amount is included in equity in earnings (losses) of
affiliates and represents our portion of the gain on the sale of
the Hilton San Diego Gaslamp and retail space which was owned by
one of our joint ventures.
(9) This amount is included in equity in earnings (losses) of
affiliates and represents our portion of deferred financing costs
written off in connection with the refinancing of the MIP joint
venture's senior debt.
(10)This amount is included in equity in earnings (losses) of
affiliates and represents our portion of the loss on sale of the
Wyndham Milwaukee which was owned by one of our joint ventures.
(11)In June 2004, we completed the disposal of BridgeStreet Canada,
Inc., the owner of our corporate housing operation in Toronto.
Accordingly, we have reclassified all transactions as discontinued
operations for the three months and six months ended June 30,
2004, respectively.
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