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LA QUINTA INNS, INC. REPORTS THIRD QUARTER RESULTS

 SAN ANTONIO, Texas, Oct. 28 /PRNewswire/ -- La Quinta Inns, Inc. (NYSE: LQI) reported that revenues for the third quarter of 1993 improved 6.7 percent or $4,897,000 to $77,593,000 from $72,696,000 in last year's comparable quarter. Revenues for the nine month period improved 5.7 percent or $11,256,000 to $209,616,000 from $198,360,000 in 1992. Net earnings for the 1993 three and nine month periods ended Sept. 30, 1993 were $9,711,000 or $.46 per share and $18,989,000 or $.91 per share compared with net losses of ($16,392,000) or ($.81) per share and ($11,009,000) or ($.55) per share in the comparable 1992 periods. Certain periods were impacted by non-recurring charges and extraordinary items as described below.
 The average room rate increased 6.0 percent in the third quarter of 1993 and 4.8 percent for the nine month period while occupancy declined by 2.0 occupancy points in the third quarter and was unchanged for the nine month period compared with last year's comparable periods. Management's decision to discontinue a coupon promotion used in 1992 had a positive impact on revenues and had the effect of reducing occupancies in the quarter. As part of the company's previously announced chainwide image enhancement program, 37 inns underwent the reimaging process during the quarter. Twenty properties are now beginning the process every 6-8 weeks with the completion of the program targeted for early next summer. Normal business operations and occupancies at these properties are somewhat disrupted by construction during the reimaging process which temporarily has a negative impact on revenues. Early results at these properties following the completion of the process have indicated improvement in both rate and occupancy.
 Between June and September the company completed the acquisition of nine inns and began the process of renovating and converting them to La Quintas. In addition, during the third quarter, the company purchased three joint venture interests from its partners resulting in the following ownership of inns:
 LA QUINTA
 Sept. 30, 1993 Dec. 31, 1992
 La Quinta La Quinta
 Total Equivalent Total Equivalent
 Inns Rooms Rooms(a) Inns Rooms Rooms(a)
 Owned
 100 pct. 128 16,340 16,340 89 11,456 11,456
 Owned
 40 pct.
 -80 pct. 50 6,684 2,908 80 10,218 4,919
 Total Company
 Owned and
 Operated 178 23,024 19,248 169 21,674 16,375
 Managed 40 4,973 508 40 4,978 75
 Licensed 2 222 -- 3 366 --
 220 28,219 19,756 212 27,108 16,450
 (a) Represents the company's proportionate ownership interest in rooms as described in the annual report on Form 10-K.
 For the quarter ended Sept. 30, 1993, operating income increased to $26,615,000. This compares to 1992 third quarter operating income of $24,681,000 before write-downs, severance and employee related costs and other non-recurring charges of approximately $36,863,000 and a reduction in depreciation expense of approximately $4,400,000 to effect a change in the estimated useful lives of buildings attributable to the first six months of the year. Operating income for the nine months ended Sept. 30, 1993 improved to $66,413,000 before a non-recurring, non-cash charge of approximately ($4,407,000), ($2,688,000) net of income taxes of ($.13) per share, to recognize compensation expense related to vesting of performance stock options. Operating income for the comparable nine month period in 1992 was $60,242,000 before write-downs, severance and employee related costs and other non-recurring charges of approximately $38,537,000.
 Earnings before extraordinary items and the cumulative effect of change in accounting for income taxes, were $10,011,000 or $.48 per share for the third quarter and $16,847,000 or $.81 per share for the nine months compared to net losses before extraordinary items of ($16,392,000) or ($.81) per share and ($10,437,000) or ($.52) per share, respectively for the 1992 periods. The 1993 three and nine month periods included extraordinary items net of income taxes of ($300,000) or ($.02) per share and ($2,418,000) or ($.12) per share related to the early extinguishment and refinancing of debt. The 1993 nine month period included an overall gain of $91,000 relating to the company's transfer of ownership to the mortgagor of the property in which the company's corporate headquarters were located. This transaction is reflected as a loss of ($4,900,000) on property and investment transactions, ($2,989,000) net of income taxes or ($.14) per share, and an extraordinary gain of $4,991,000, $3,060,000 net of income taxes or $.15 per share. Also the effect of a change in accounting for income taxes (as required by Statement of Financial Accounting Standards No. 109 "Accounting for Income Taxes") of approximately $1,500,000 or $.07 per share was recognized during the 1993 nine months. The 1992 nine month period included extraordinary items net of income taxes of ($572,000) or ($.03) per share resulting from the refinancing of certain variable rate debt.
 As previously announced, in the third quarter of 1993 the company's board of directors authorized a three-for-two split of the company's common stock effected in the form of a stock dividend. The weighted average common and common equivalent shares for all periods included have been adjusted to reflect the split. All prior period per share amounts have been restated.
 La Quinta Inns, Inc. owns and/or operates over 200 limited service inns in 29 states.
 LA QUINTA INNS, INC.
 Combined Condensed Statements of Earnings
 (Unaudited, dollars in thousands, except per share amounts)
 Periods ended Sept. 30 Three Months Nine Months
 1993 1992 1993 1992
 Total revenues $ 77,593 $ 72,696 $209,616 $198,360
 Operating costs and expenses:
 Direct 40,053 36,898 111,099 103,344
 Corporate 4,787 8,011 14,469 18,812
 Non-recurring charges -- 33,645 -- 35,319
 Performance stock option
 expense -- -- 4,407 --
 Depreciation, amortization
 and fixed asset retirements 6,138 1,924 17,635 19,180
 Total operating costs and
 expenses 50,978 80,478 147,610 176,655
 Operating income 26,615 (7,782) 62,006 21,705
 Interest, net (6,108) (6,479) (17,898) (20,289)
 Partners' equity in earnings
 and losses (3,417) (6,387) (11,619) (12,678)
 Earnings before property and
 investment transactions 17,090 (20,648) 32,489 (11,262)
 Gain (loss) on property and
 investment transactions (2) (8) (4,375) 212
 Earnings before income
 taxes, extraordinary
 items and cumulative
 effect of accounting
 change 17,088 (20,656) 28,114 (11,050)
 Income taxes 7,077 (4,264) 11,267 (613)
 Net earnings before
 extraordinary items
 and cumulative effect
 of accounting change 10,011 (16,392) 16,847 (10,437)
 Cumulative effect of
 accounting change -- -- 1,500 --
 Extraordinary items:
 Gain on mortgage transfer -- -- 4,991 --
 Loss on early extinguishment
 and refinancing of debt (492) -- (3,964) (922)
 Income taxes (benefit) 192 -- (385) 350
 Total extraordinary items,
 net of taxes (300) -- 642 (572)
 Net earnings $ 9,711 $(16,392) $ 18,989 $(11,009)
 Earnings per common and common
 equivalent share:
 Net earnings before
 extraordinary items and
 cumulative effect of
 accounting change $ .48 $ (.81) $ .81 $ (.52)
 Cumulative effect of
 accounting change -- -- .07 --
 Extraordinary items,
 net of income taxes (.02) -- .03 (.03)
 Net earnings per share $ .46 $ (.81) $ .91 $ (.55)
 Weighted average number of
 common and common equivalent
 shares outstanding 21,055 20,138 20,914 20,060
 Percentage of occupancy (pct.) 71.9 73.9 67.8 67.8
 Average room rates $ 47.26 $ 44.59 $ 46.72 $ 44.59
 LA QUINTA INNS, INC.
 Combined Condensed Balance Sheets
 (In thousands, unaudited)
 Sept. 30 Dec. 31
 1993 1992
 ASSETS
 Cash $ 25,701 $ 12,861
 Other current assets 13,166 12,595
 Total current assets 38,867 25,456
 Notes receivable, excluding current
 installments 7,502 7,696
 Investments 10,934 10,296
 Properties held for sale, at estimated
 net realizable value 3,920 3,920
 Land held for future development, at cost 1,470 1,452
 Property and equipment 755,528 697,868
 Accumulated depreciation and
 amortization (223,184) (214,398)
 Deferred charges and other assets,
 at cost less applicable amortization 11,579 6,893
 $606,616 $539,183
 LIABILITIES & SHAREHOLDERS' EQUITY
 Current liabilities $ 47,920 $ 36,984
 Current installments of long-term debt 14,768 21,711
 Total current liabilities 62,688 58,695
 Long-term debt, excluding current
 installments 310,816 274,824
 Deferred credits, principally income
 taxes 18,243 19,283
 Partners' capital, (net of note
 receivable) 65,021 62,060
 Shareholders' equity 149,848 124,321
 $606,616 $539,183
 -0- 10/28/93
 /CONTACT: La Quinta Inns, Inc. investor relations, 210-302-6030/
 (LQI)


CO: La Quinta Inns, Inc. ST: Texas IN: LEI SU: ERN

TM -- NY148 -- 8280 10/28/93 21:07 EDT
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Date:Oct 28, 1993
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