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La Quinta Corporation Net Reports Income of $14 million for 3rd Qtr 2005
Versus Net Loss of $12 million in 2004; Both La Quinta and Baymont
Brands Provided Strong Operating Results
Lodging Operating Statistics
.
DALLAS, Oct. 28, 2005 - La Quinta Corporation (NYSE: LQI) today announced financial results for the third quarter ended September 30, 2005. 

"We are very pleased with our excellent third quarter financial results," stated Francis W. ("Butch") Cash, chairman and chief executive officer. "For the quarter, RevPAR growth for total company owned hotels exceeded the upper end of our guidance by three percentage points and adjusted EBITDA exceeded our guidance by $5 million. Our July and August results were ahead of our expectations, followed by very strong occupancy increases in September due in part to Hurricanes Katrina and Rita. As a result, both our La Quinta and Baymont brands provided strong operating results.

"We continue to be impressed by the talents and compassion our people displayed in the aftermath of the devastating hurricanes we have experienced.

"The third quarter marks the one-year anniversary of our ownership of Baymont. We are very pleased that we are already producing results at the anticipated levels of return on our original investment, a year earlier than we expected.

"Our business fundamentals continue to improve and we are encouraged by the healthy operating environment for the lodging industry with favorable pricing trends and limited increases in supply. Our development activities will be focused on central business district and airport locations because of the returns we can realize and the ability to display our brands ever more prominently to help stimulate growth for our franchisees and ourselves. We anticipate commencing at least three such projects in 2006.

"While we continue to explore acquisition opportunities, we recognize the competitive market for hotel assets. As a result, in addition to using our capital for our central business district projects, we are also looking more actively at other uses of our balance sheet capacity including redeeming the $200 million of preferred stock," concluded Mr. Cash.

FINANCIAL AND OPERATING HIGHLIGHTS

For the third quarter ended September 30, 2005, the Company reported:

  • Total revenues of $205 million, a 32% increase compared to 2004.
  • Net income of $14 million, or $0.07 per share, versus net loss of $12 million, or ($0.07) per share, in 2004.
  • RevPAR for total company owned hotels of $45.77, a 10% increase compared to 2004.
  • Adjusted EBITDA of $77 million, a 42% increase compared to 2004.  A detailed schedule reconciling net income (loss) to Adjusted EBITDA is included in the supplemental tables.
For the nine months ended September 30, 2005, the Company reported:
  • Total revenues of $572 million, a 34% increase compared to 2004.
  • Net income of $14 million, or $0.07 per share, versus net loss of $31 million, or ($0.18) per share, in 2004.
  • RevPAR for total company owned hotels of $43.11, a 7% increase compared to 2004.
  • Adjusted EBITDA of $196 million, a 44% increase compared to 2004.  A detailed schedule reconciling net income (loss) to Adjusted EBITDA is included in the supplemental tables.
OPERATING RESULTS

The 10% RevPAR growth for company owned hotels for the third quarter was driven by a 12% RevPAR growth for La Quinta branded hotels. The RevPAR growth for the La Quinta branded hotels was due to an occupancy increase of 2.4 percentage points and an average rate increase of 8%. Prior to September, which was impacted by Hurricanes Katrina and Rita, company owned La Quinta branded hotels were already trending at 9% RevPAR growth with particular strength in the Northwest with 13% RevPAR growth. After the hurricanes, occupancy at hotels in Texas and the Gulf Coast significantly increased. RevPAR for La Quinta owned hotels in Dallas, Austin, San Antonio and Houston metropolitan areas were up 20% for the quarter in part due to evacuees from the New Orleans area as well as evacuees from Hurricane Rita. RevPAR for company owned Baymont branded hotels increased approximately 7% during the quarter and also contributed to improved adjusted EBITDA margin.

"Prior to the hurricanes, our results were tracking above the top end of our RevPAR and Adjusted EBITDA expectations for the quarter due to continuing improvements in our business," added David L. Rea, president and chief operating officer. "In addition, the hurricanes brought significant increases in occupancy at our properties in Texas and the Gulf Coast during the months of September and October. As a result of our strong RevPAR growth and the positive impact of the Baymont acquisition, Adjusted EBITDA and profit margins continued to improve."

During the third quarter, the Company added seven La Quinta and eight Baymont franchise hotels to its system. As of September 30, 2005, the Company had 11,443 La Quinta branded franchise rooms (139 hotels) and 9,239 Baymont branded franchise rooms (106 hotels). In addition, the Company also executed a record number of franchise agreements (39 agreements) during the quarter. System-wide La Quinta branded hotel RevPAR, which includes the results of our La Quinta franchisees, increased 13% in the third quarter. This performance is yet another indicator of the very positive momentum and success of our franchising program.

Asset Sales and Assets Held for Sale

During the quarter, the Company sold four hotels, three of which were classified as continuing operations and one in discontinued operations, for gross proceeds of approximately $12 million and recognized gains on sales of approximately $4 million. At September 30, 2005, the Company had 12 hotels classified as held for sale. Eight hotels are included in discontinued operations while four are in continuing operations as we expect the buyer to convert the hotels to the Baymont brand. The net book value of assets held for sale is approximately $32 million.

Hurricanes Impact

As previously reported, the Company has eight company owned hotels (2% of total company owned properties) in the greater New Orleans area that were affected by Hurricane Katrina. Two properties suffered severe damage and may not be restored to service. The six remaining hotels suffered significant damage, however, the Company believes these six properties will be substantially returned to service by year-end.
In addition to the eight New Orleans hotels, 14 company owned hotels in Texas, Louisiana, Mississippi, Alabama and Florida experienced varying degrees of damage due to Hurricanes Katrina and Rita. Most of these hotels were substantially returned to service by September 30, 2005.

Based on preliminary assessments, the Company estimates property damage as a result of the hurricanes will approximate $30 million to $40 million. The Company believes these damages will be substantially recovered from insurance proceeds. Third quarter net income reflects charges related to the hurricanes of approximately $2 million.

Revenues include an estimated $5 million due to increased occupancy attributable to the aftermath of the hurricanes, which compares with approximately $2 million of additional revenue due to hurricanes in third quarter 2004. The amount and timing of business interruption recoveries are uncertain and will be recorded in future periods, in addition to potential property gains and losses, as claims are settled with insurance carriers.

In addition to the company owned hotels damaged by the hurricanes, 11 of the Company's franchises, including five under construction, were damaged. Damage to the units under construction will likely affect those properties' scheduled opening dates.

THIRD QUARTER FINANCIAL RESULTS

Revenue: Total revenues for the third quarter 2005 increased 32% over the third quarter 2004. Franchise fees increased 88% for the third quarter 2005. Other revenue (including healthcare interest income and restaurant rental income) increased 4% for the third quarter 2005. Approximately 60% of the total revenue increase was attributable to the Baymont acquisition while approximately 30% of the total revenue increase was due to the 12% increase in company owned La Quinta branded RevPAR. The remaining revenue increase was primarily due to an increase in franchise fees.

Net income: For the third quarter 2005, net income was $14 million, or $0.07 per share versus a net loss of $12 million, or ($0.07) per share, for the third quarter 2004. The improvement from 2004 to 2005 was primarily the result of the Baymont acquisition, improved operating performance at La Quinta owned hotels, an increase in franchise income and a loss of approximately $21 million in the prior year period related to the early retirement of debt. Third quarter 2005 financial results include income of $0.2 million from hotels classified as discontinued operations.

Adjusted EBITDA: Adjusted EBITDA for the third quarter 2005 was $77 million, a 42% increase compared to $54 million in the third quarter 2004. The increase in Adjusted EBITDA was primarily driven by income from the Baymont acquisition, revenue increases at company owned hotels, strong cost management as well as an increase in franchise income. Adjusted EBITDA margins improved 270 basis points year-over-year to 37.6% for the third quarter 2005, reflecting strong flow through from average rate increases, the increased demand caused by the hurricanes and the favorable results of the Baymont acquisition. Adjusted EBITDA excludes approximately $4 million of gains on sales of three properties previously classified as held for sale, as well as, other expense of approximately $0.6 million primarily related to Baymont integration expenses and fees related to abandoned transaction costs.

Capital Structure: During the third quarter, the Company repaid $116 million of debt, including $100 million of 7.40% Senior Notes and $16 million of medium term notes. After the repayment of these Notes, the Company's total indebtedness at September 30, 2005 was $810 million. At September 30, 2005, the Company had $213 million in cash and cash equivalents and no borrowings under its $150 million credit facility, other than $16.5 million in letters of credit. The Company's net debt (total indebtedness less cash and cash equivalents) was $597 million at September 30, 2005. In addition, the Company has $200 million of 9% preferred stock outstanding which is currently redeemable at the Company's option. Finally, the Company had approximately 203 million fully diluted equivalent paired shares outstanding during the third quarter.

THIRD QUARTER YEAR-TO-DATE FINANCIAL RESULTS

Revenue: Revenues for the nine months ended September 30, 2005 increased 34% over the same period in 2004. Approximately 70% of the total revenue increase was attributable to the Baymont acquisition while approximately 25% was due to a 10% increase in company owned La Quinta branded RevPAR. The remaining revenue increase was primarily due to an increase in franchise fees, partially offset by reduced interest income from a healthcare note receivable, which was paid off in 2004.

Net income: Net income was $14 million, or $0.07 per share, for the nine months ended September 30, 2005, versus a net loss of $31 million, or ($0.18) per share, for the same period in 2004. The improvement from 2004 to 2005 was primarily the result of the Baymont acquisition, improved operating performance at La Quinta owned hotels, an increase in franchise income and a loss of approximately $21 million related to the early retirement of debt and an impairment charge of approximately $13 million, each in the prior-year period. The year-to-date financial results include income of approximately $1 million from hotels classified as discontinued operations.

Adjusted EBITDA: Adjusted EBITDA for the nine months ended September 30, 2005 was $196 million, a 44% increase compared to $136 million in the same period in 2004. The increase in Adjusted EBITDA was primarily driven by the addition of income from the Baymont acquisition; revenue increases at company owned hotels, strong cost management as well as an increase in franchise income. Adjusted EBITDA for the nine months ended September 30, 2005 excludes approximately $3 million of gains on sales of assets as well as other expense of approximately $3 million principally related to Baymont integration expenses.

CURRENT OUTLOOK

The Company currently expects continued strength in both lodging demand and room rate improvements for the fourth quarter of 2005 as well as 2006. With continued growth in fee based revenues and rate improvements, profit margins should also continue to increase. The following guidance excludes any gains or losses associated with asset sales.

Fourth Quarter

For the fourth quarter 2005, total company owned hotel RevPAR is estimated to increase approximately 10% to 12% compared to the prior year fourth quarter, reflecting continued increases in average daily rates as well as unusually high occupancy attributable to the hurricanes which is anticipated to decline to normal seasonal levels by mid November. The Company anticipates:
    -- Revenue to be approximately $173 million to $176 million
    -- Net loss to be approximately $4 million
    -- Adjusted EBITDA to be approximately $52 million

Accordingly, for the full year 2005, the Company estimates total revenue of approximately $745 million to $748 million and Adjusted EBITDA of approximately $247 million. Net income is anticipated to be approximately $10 million.

Capital expenditures for 2005 are anticipated to be approximately $120 million, which includes a partial year of funding for the redevelopment of the La Quinta Arlington, Texas property, conversions between the La Quinta and Baymont brands, corporate capital expenditures and maintenance and renovation capital expenditures for our owned Baymont and La Quinta hotels.

The franchise pipeline is strong and continues to grow with more than 150 contracts executed for future franchise openings. Due to damage from the hurricanes to certain franchise properties under construction as well as delays in some new construction franchise projects, the Company now expects to open 60 to 70 franchises in 2005.

Preliminary 2006 Outlook

Preliminary expectations for 2006 are for RevPAR growth of approximately 6% to 7% for company owned hotels after adjusting 2005 results for the effects of the hurricanes. This RevPAR increase will be driven primarily by rate increases. Revenue is estimated to range from $780 million to $790 million and Adjusted EBITDA is anticipated to range from $265 million to $270 million and net income is estimated to range from $15 million to $18 million. The Adjusted EBITDA and net income ranges are on a comparable basis to 2005 and do not reflect the implementation of expensing stock options in 2006. Capital expenditures for 2006 are currently anticipated to be approximately $150 million. This includes $80 million of funding for construction of three new central business district properties, two redevelopment projects, and continued conversions of properties between the La Quinta and Baymont brands. The remaining $70 million consists of $60 million of maintenance and renovation capital expenditures for our company owned hotels and $10 million of corporate capital expenditures. The Company expects to add at least 85 hotels to its franchise system in 2006.
 
 

La Quinta Corporation
Schedule A
Financial Results
(Unaudited)

                               Three months ended      Nine months ended
    Operating Data:              September 30,           September 30,
    (In millions, except      2005          2004       2005        2004
     per share data)

    Revenues
    Hotel operations         $192.5        $147.5     $540.2       $406.3
    Franchise fees              9.2           4.9       23.5         11.6
    Other                       2.8           2.7        8.1          9.5
    Total revenues            204.5         155.1      571.8        427.4

    Expenses
    Direct lodging
     operations                85.0          67.3      243.5        189.4
    Other lodging and
     operating expenses        25.6          19.9       73.5         56.4
    Selling, general and
     administrative            17.0          13.8       59.3         45.6
    Interest, net of
     interest income of
     $2.5, $2.0, $4.3,
     and $7.9, respectively    16.0          15.9       52.1         46.2
    Depreciation and
     amortization              35.3          32.8      105.5         91.4
    Impairment of property
     and equipment                -             -          -         12.7
    Loss on early
     extinguishment of debt       -          21.4          -         21.4
    Other (income) expense     (3.0)         (1.1)      (0.3)        (1.8)
    Total expenses            175.9         170.0      533.6        461.3
    Income (loss) before
     minority interest,
     income taxes, and
     discontinued
     operations                28.6         (14.9)      38.2        (33.9)
    Minority interest          (4.5)         (4.5)     (13.7)       (13.7)
    Income tax (expense)
     benefit                  (10.6)          7.3      (11.6)        16.3
    Income (loss) before
     discontinued operations   13.5         (12.1)      12.9        (31.3)
    Income from discontinued
     operations, net of taxes   0.2             -        1.2          0.1
    Net income (loss)         $13.7        $(12.1)     $14.1       $(31.2)

    Per Share Data:
    Income (loss) before
     discontinued operations  $0.07        $(0.07)     $0.07       $(0.18)
    Income from discontinued
     operations, net
     of taxes                     -             -          -            -
    Net income (loss) per
     share - basic and
     assuming dilution        $0.07        $(0.07)     $0.07       $(0.18)
 

    Weighted average shares
    outstanding
     Basic                    199.4         176.7      188.4        176.5
     Assuming dilution        203.1         176.7      192.1        176.5
 

    Prior period results have been reclassified to conform to current period
presentation.
 

                            La Quinta Corporation
                                  Schedule B
                            Other (Income) Expense
                                 (Unaudited)

                               Three months ended     Nine months ended
                                   September 30,        September 30,
    (In millions)              2005         2004      2005         2004
    (Gain) loss on sale
     of assets and related
     costs(1)                 $(3.6)       $(0.1)    $(3.4)        $0.1
    Gain on early repayment
     of notes receivable          -         (2.1)        -         (2.1)
    Gain on settlement (2)        -            -         -         (0.4)
    Acquisition, retirement
     plan and other (3)         0.6          1.1       3.1          0.6
    Total other (income)
     expense                  $(3.0)       $(1.1)    $(0.3)       $(1.8)

    (1) This caption includes sales of hotels, restaurants and other property
        as well as the accumulation of costs to sell assets held for sale in
        continuing operations.  During the three months ended September 30,
        2005, we sold three hotels for gross proceeds of approximately $9.4
        million, resulting in a gain on sale of approximately $3.7 million.
        These hotels are not included in discontinued operations because it is
        probable that these hotels will be operated by the buyers as Baymont
        franchises, which we believe would constitute significant continuing
        involvement in the operations of the hotel and, therefore,
        presentation as discontinued operations is not appropriate.

    (2) During the nine months ended September 30, 2004, the Company settled
        obligations related to assets previously sold that resulted in a net
        gain of $0.4 million.

    (3) During the three and nine months ended September 30, 2005, the Company
        recognized expense of approximately $0.6 million and $3.1 million,
        respectively, consisting of approximately $0.2 million and $2.7
        million primarily related to integration costs related to the Baymont
        acquisition and approximately $0.4 million during each period for fees
        related to abandoned transaction costs.
During the three and nine months ended September 30, 2004, the Company recognized expense of approximately $1.7 million and $1.9 million, consisting of approximately $1.5 million during each period for integration costs related to the Baymont acquisition and $0.2 million and $0.4 million, respectively, related to the termination and ongoing settlement of the La Quinta retirement plan. These expenses were partially offset by income of approximately $0.6 million and $1.3 million, respectively, primarily as a result of settlement of litigation related to the healthcare business, adjustments of amounts previously accrued related to the exit of the healthcare business and refunds of public company filing fees.

                            La Quinta Corporation
                                  Schedule C
                     Supplemental Non-GAAP Financial Data
                                 (Unaudited)

                               Three months ended     Nine months ended
    Adjusted EBITDA               September 30,          September 30,
    Reconciliation            2005         2004       2005          2004
    (In millions)
    Net income (loss)
    (per GAAP)               $13.7       $(12.1)      $14.1       $(31.2)
    Add:
    Depreciation and
     amortization(4)          35.3         32.8       105.5         91.4
    Impairment of property
     and equipment               -            -           -         12.7
    Loss on early
     extinguishment of debt      -         21.4           -         21.4
    Minority interest          4.5          4.5        13.7         13.7
    Income tax expense
    (benefit)                 10.6         (7.3)       11.6        (16.3)
    Interest, net of interest
     income of $2.5, $2.0,
     $4.3, and $7.9,
     respectively             16.0         15.9        52.1         46.2
    Other (income)
     expense (1)              (3.0)        (1.1)       (0.3)        (1.8)
    Income from discontinued
     operations, net of
     taxes (2)                (0.2)           -        (1.2)        (0.1)
    Adjusted EBITDA (3,4)
     (Non-GAAP)              $76.9        $54.1      $195.5       $136.0

    (1) See attached Schedule B for details.

    (2) Income from discontinued operations includes nine hotels during the
        three months ended September 30, 2005, 11 hotels during the nine
        months ended September 30, 2005, and 11 hotels during each of the
        three and nine months ended September 30, 2004.  The separately
        identifiable results of operations of the hotels have been reported as
        results from discontinued operations for all periods presented.

    (3) Includes approximately $1.0 million and $2.7 million of stock-based
        compensation (primarily amortization of restricted stock) during the
        three and nine months ended September 30, 2005, respectively, and $0.5
        million and $1.8 million during the three and nine months ended
        September 30, 2004, respectively.

    (4) During the three months ended September 30, 2005, we recognized
        approximately $1.7 million of hurricane related charges, net of
        estimated property insurance recovery, related to damage from the two
        hurricanes, of which approximately $0.9 million of repairs is included
        in other lodging and operating expenses and $0.8 million of casualty
        losses is included in depreciation and amortization.
During the three months ended September 30, 2004, we recorded casualty loss expense, net of estimated property insurance recovery, of approximately $1.7 million, included in depreciation and amortization, related to property damage as a result of the hurricanes in the State of Florida during 2004. During 2005, we reduced a portion of the previously recorded casualty loss expense as a result of insurance recoveries by approximately $0.8 million.

    Adjusted EBITDA Reconciliation (Current Outlook)
    (In millions)
                                 Three months  Full Year   Preliminary Full
                                     ended        2005        Year 2006
                                  December 31,
                                      2005

    Net income (loss) (per GAAP)      $(4)         $10         $15 - $18
    Add:
    Depreciation and amortization      38          144            155
    Minority interest                   5           18             19
    Income tax expense (benefit)       (3)           9           9 - 11
    Interest, net                      16           68             67
    Income from discontinued
     operations, net of taxes           -           (2)             -
    Adjusted EBITDA (Non-GAAP)        $52         $247         $265 - $270
 

                            La Quinta Corporation
                                  Schedule D
                        Other Supplemental Information
                                 (Unaudited)

                              Three months ended     Nine months ended
    Capital Expenditures         September 30,          September 30,
    (In millions)             2005         2004       2005         2004

    Capital expenditures     $25.0        $16.4      $51.2        $45.2
 

    Selected Balance Sheet Data                 September 30,   December 31,
    (In millions)                                    2005           2004
                                                                  (Audited)
    Property and equipment, net                    $2,368.1       $2,434.0
    Cash and cash equivalents (A)                     212.6          103.3
    Total assets                                    2,875.6        2,810.9
    Total indebtedness (B)                            809.6          925.6
    Total liabilities                               1,095.0        1,217.3
    Minority interest ©                             203.7          203.9
    Total shareholders' equity (D)                  1,576.9        1,389.7
    Net debt to total capitalization
     Equal to (B-A)/(D+A+B-A)                            25%            34%
 

    Debt Maturity Schedule
    (In millions)

    Calendar Year                               September 30, 2005

     2005                                             $    -
     2006                                               20.0
     2007                                              210.0
     2008                                               50.0
     2009                                                  -
     2010 and thereafter                               529.6

     Total debt                                        809.6
     Less: Cash and cash equivalents                  (212.6)
     Net debt                                         $597.0
 

                            La Quinta Corporation
                                  Schedule E
                         Lodging Operating Statistics
                                 (Unaudited)

                                Three months          Three months
                                   ended                  ended
                               September 30,          September 30,
                                   2005                    2004

                           Occ     ADR    RevPAR   Occ     ADR     RevPAR
    Comparable Owned
    Hotels (1)
     La Quinta Inns       72.0%  $61.23   $44.06  69.2%  $57.16    $39.55
     La Quinta Inn
      & Suites            74.4%  $71.11   $52.90  72.9%  $66.19    $48.28
    Composite(La Quinta
     comparable owned)    72.7%  $64.22   $46.67  70.3%  $59.92    $42.13
     Baymont Inn
      & Suites(2)          N/A      N/A      N/A   N/A      N/A       N/A

     Total Comparable
      Owned Hotels        72.7%  $64.22   $46.67  70.3%  $59.92    $42.13
    Total Company Owned
    Hotels(4)
     La Quinta Inns       71.9%  $61.01   $43.85  69.1%  $56.83    $39.28

     La Quinta Inn
      & Suites            74.2%  $72.50   $53.79  72.9%  $66.48    $48.49

    Composite (La
     Quinta owned)        72.6%  $64.58   $46.87  70.2%  $59.78    $41.99
     Baymont Inn &
      Suites(2,3)         70.6%  $57.40   $40.51  65.8%  $53.67    $35.32
    Total Company
     Owned Hotels(4,5)    72.1%  $63.50   $45.77  69.9%  $59.45    $41.55
    System Wide Hotels(6)

     La Quinta Inns       71.2%  $63.37   $45.13  68.8%  $57.61    $39.65

     La Quinta Inn
      & Suites            74.8%  $74.71   $55.85  73.0%  $68.83    $50.23

    Composite(La Quinta
     system wide)         72.4%  $67.39   $48.81  70.2%  $61.42    $43.10
     Baymont Inn &
      Suites(2,3)         67.6%  $61.05   $41.28  63.3%  $58.12    $36.78
 

                                Nine months            Nine months
                                   ended                  ended
                               September 30,          September 30,
                                   2005                    2004

                           Occ     ADR    RevPAR   Occ     ADR     RevPAR
    Comparable Owned
    Hotels (1)
     La Quinta Inns       68.0%  $59.93   $40.73  66.9%   $56.16   $37.57

     La Quinta Inn
      & Suites            74.3%  $71.85   $53.35  72.7%   $66.22   $48.14

    Composite (La Quinta
     comparable owned)    69.8%  $63.67   $44.46  68.6%   $59.31   $40.69
     Baymont Inn
      & Suites(2)          N/A      N/A      N/A   N/A       N/A      N/A

    Total Comparable
     Owned Hotels         69.8%  $63.67   $44.46  68.6%   $59.31   $40.69
    Total Company
    Owned Hotels(4)

     La Quinta Inns       67.9%  $59.61   $40.48  66.8%   $55.79   $37.28

     La Quinta Inn
      & Suites            73.9%  $73.07   $53.98  72.7%   $66.56   $48.40

    Composite (La
     Quinta owned)        69.7%  $63.92   $44.56  68.5%   $59.13   $40.53

     Baymont Inn
      & Suites(2,3)       65.7%  $55.95   $36.77  65.0%   $53.04   $34.47
    Total Company
     Owned Hotels(4,5)    68.8%  $62.70   $43.11  68.4%   $58.99   $40.37
    System Wide
    Hotels(6)
     La Quinta Inns       67.3%  $61.33   $41.24  65.9%   $56.35   $37.11

     La Quinta Inn
      & Suites            73.0%  $73.80   $53.87  71.4%   $67.51   $48.20

    Composite (La Quinta
     system wide)         69.2%  $65.78   $45.52  67.6%   $60.15   $40.68
     Baymont Inn &
      Suites(2,3)         62.4%  $59.38   $37.06  63.0%   $57.38   $36.15
 

                                               Change
                                  Occ            ADR          RevPAR
    Comparable Owned Hotels (1)
     La Quinta Inns             2.8 pts          7.1%         11.4%
     La Quinta Inn & Suites     1.5 pts          7.4%          9.6%
    Composite(La Quinta
     comparable owned)          2.4 pts          7.2%         10.8%

    Baymont Inn & Suites(2)     N/A              N/A           N/A

    Total Comparable Owned
     Hotels                     2.4 pts          7.2%         10.8%

    Total Company Owned Hotels(4)
     La Quinta Inns             2.8 pts          7.4%         11.6%

    La Quinta Inn & Suites      1.3 pts          9.1%         10.9%

     Composite (La
      Quinta owned)             2.4 pts          8.0%         11.6%

    Baymont Inn & Suites(2,3)   N/A              N/A           N/A

    Total Company Owned
     Hotels(4,5)                2.2 pts          6.8%         10.2%

    System Wide Hotels(6)

    La Quinta Inns              2.4 pts         10.0%         13.8%

    La Quinta Inn & Suites      1.8 pts          8.5%         11.2%

     Composite(La Quinta
      system wide)              2.2 pts          9.7%         13.2%

    Baymont Inn & Suites(2,3)   N/A              N/A           N/A
 

                                               Change
                                  Occ            ADR          RevPAR
    Comparable Owned Hotels (1)
     La Quinta Inns             1.1 pts         6.7%          8.4%

    La Quinta Inn & Suites      1.6 pts         8.5%         10.8%

    Composite (La Quinta
     comparable owned)          1.2 pts         7.4%          9.3%

    Baymont Inn & Suites(2)     N/A             N/A           N/A

    Total Comparable Owned
     Hotels                     1.2 pts         7.4%          9.3%

    Total Company Owned Hotels(4)
     La Quinta Inns             1.1 pts         6.8%          8.6%

     La Quinta Inn & Suites     1.2 pts         9.8%         11.5%

    Composite (La Quinta
     owned)                     1.2 pts         8.1%          9.9%

     Baymont Inn & Suites(2,3)  N/A             N/A           N/A

    Total Company Owned
     Hotels(4,5)                0.4 pts         6.3%          6.8%

    System Wide Hotels(6)
     La Quinta Inns             1.4 pts         8.8%         11.1%

    La Quinta Inn & Suites      1.6 pts         9.3%         11.8%

    Composite (La Quinta
     system wide)               1.6 pts         9.4%         11.9%

    Baymont Inn & Suites(2,3)   N/A             N/A           N/A
 

    (1) Excludes hotels undergoing redevelopment or brand conversions, as well
        as hotels reported in discontinued operations and one New Orleans
        hotel that was severely damaged on August 29, 2005 by Hurricane
        Katrina and is yet to be determined whether it is feasible to ever
        return to service.

    (2) Represents statistics for Baymont Inn & Suites acquired on September
        3, 2004.

    (3) "N/A" for change is due to abbreviated period for 2004 data.
    (4) Excludes hotels reported in discontinued operations and one New
        Orleans hotel that was severely damaged on August 29, 2005 by
        Hurricane Katrina and is yet to be determined whether it is feasible
        to ever return to service.
    (5) Includes statistics for seven Woodfield Suites and one Budgetel
        property acquired on September 3, 2004 and two of the hotels acquired
        on December 9, 2004.
    (6) Includes all company owned, franchised, and managed hotels, but
        excludes hotels reported in discontinued operations and one New
        Orleans hotel that was severely damaged on August 29, 2005 by
        Hurricane Katrina and is yet to be determined whether it is feasible
        to ever return to service.
 

                            La Quinta Corporation
                                  Schedule F
                               Hotel Unit Data
                                 (Unaudited)

                            La Quinta Corporation
                                  Schedule F
                               Hotel Unit Data
                                 (Unaudited)

    Hotel and Room Count Data
                                           As of                 As of
                                     September 30, 2005   September 30, 2004

                                      Number    Number      Number     Number
                                    of Hotels  of Rooms    of Hotels  of Rooms

    Comparable Hotels (1)
      La Quinta Inns                   185       24,019       185       24,046
      La Quinta Inn & Suites            75       10,067        75       10,067
      Baymont Inn & Suites(2)            -            -         -            -
    Total Comparable Hotels            260       34,086       260       34,113
    Company-Owned (3)
      La Quinta Inns                   186       24,117       190       24,641
      La Quinta Inn & Suites            78       10,651        77       10,293
      Baymont Inn & Suites(2)           85        8,792        85        8,787
      Other(4)                          10        1,241         8          972
    Total Company Owned Hotels         359       44,801       360       44,693
    Franchised/Managed Hotels
      La Quinta Inns                    72        6,112        56        5,462
      La Quinta Inn & Suites            67        5,331        53        4,272
      Baymont Inn & Suites(2)          106        9,239        88        7,535
    Total Franchised/Managed Hotels    245       20,682       197       17,269
    Total System Wide Hotels(5)        604       65,483       557       61,962

    (1) Excludes hotels undergoing redevelopment or brand conversions, as well
        as hotels reported in discontinued operations and one New Orleans
        hotel that was severely damaged on August 29, 2005 by Hurricane
        Katrina and is yet to be determined whether it is feasible to ever
        return to service.
    (2) Represents statistics for Baymont Inn & Suites acquired on
        September 3, 2004.
    (3) Excludes hotels reported in discontinued operations and one
        New Orleans hotel that was severely damaged on August 29, 2005 by
        Hurricane Katrina and is yet to be determined whether it is feasible
        to ever return to service.
    (4) Represents statistics for seven Woodfield Suites and one Budgetel
        property acquired on September 3, 2004 and two of the hotels acquired
        on December 9, 2004.
    (5) Includes all company owned, franchised, and managed hotels, but
        excludes hotels reported in discontinued operations and one
        New Orleans hotel that was severely damaged on August 29, 2005 by
        Hurricane Katrina and is yet to be determined whether it is feasible
        to ever return to service.

Historical Data of Baymont

La Quinta Corporation acquired substantially all of the assets of The Marcus Corporation's limited service lodging division on September 3, 2004. The Marcus Corporation has provided us with a limited amount of unaudited historical operating data for the acquired properties related to certain periods prior to the acquisition by La Quinta Corporation. We have recompiled comparable property and reporting period results for Baymont from this internal, unaudited data. This data has not been audited or otherwise independently verified by the Company or its independent auditors, although the Company has no reason to believe that this data is not accurate in any material respect. As a result, we will only be disclosing approximate RevPAR changes for Baymont through the quarter ending September 30, 2005. Beginning with the quarter ending December 31, 2005, we will be able to disclose more detailed comparable operating data for Baymont.

Statement Concerning Non-GAAP Measurement Tools

The Company uses Adjusted EBITDA as a supplemental measure of the Company's performance because we believe it gives the reader a more complete understanding of our financial condition and operating results. We use this metric to calculate various financial ratios and to measure our performance, and we believe some debt and equity investors also utilize this metric for similar purposes. Adjusted EBITDA includes adjustments for non-cash income or expenses such as depreciation, amortization and other non-cash items. Adjusted EBITDA is also adjusted for discontinued operations, income taxes, interest expense, net and minority interest (which includes preferred stock dividends of La Quinta Properties, Inc.), as well as certain cash income or expense that we believe otherwise distorts the comparability of the measure. Adjusted EBITDA is intended to show unleveraged, pre-tax operating results. The impact of investing and financing transactions, as well as income taxes, should also be considered in evaluating overall results. Adjusted EBITDA is not intended to represent any measure of performance in accordance with accounting principles generally accepted in the United States ("GAAP") and our calculation and use of this measure may differ from our competitors. This non-GAAP measure should not be used in isolation or as a substitute for a measure of performance or liquidity prepared in accordance with GAAP. A detailed schedule reconciling GAAP net income (loss) to Adjusted EBITDA is included in the attached supplemental tables.

La Quinta Corporation (NYSE: LQI - News), is one of the largest owner/operators of limited-service hotels in the United States. Based in Dallas, Texas, the Company owns, operates or franchises more than 600 hotels in 39 states under the La Quinta Inns, La Quinta Inn & Suites®, Baymont Inn & Suites®, Woodfield Suites® and Budgetel® brands.

Certain matters discussed in this press release may constitute "forward- looking statements" within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. 

.
Contact:

La Quinta Corporation
http://www.LQ.com

.
 
Also See: La Quinta Corporation Reports 3rd Qtr Net Loss of $9 million versus Net Loss of $27 million in 2002, RevPAR for Company Owned Hotels Up 8% / La Quinta Summary Lodging Statistics / November 2003
La Quinta Recognizes the Best of 2004; La Quinta Inn & Suites-Stockbridge, Georgia Honored for Receiving the Best Quality Control Score in the Company’s History / April 2005

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