BETHESDA, MD; March 19, 1999 � Crestline Capital Corporation
today reported 1998 pro forma revenues of $4.3 billion, an 8 percent increase
over revenues of $4.0 billion in 1997. Pro forma net income increased
nearly 27% to $26 million, or $1.19 per share, and pro forma Earnings before
Interest Expense, Taxes, Depreciation and Amortization (EBITDA) increased
12 percent to $86 million for 1998.
Bruce D. Wardinski, Chairman of the Board and CEO, said �We are pleased
with our results for 1998 as revenue and cash flow growth were strong.�
Mr. Wardinski added, �Our high quality-lodging portfolio, as well as our
outstanding group of 31 senior living communities, provide a strong foundation
for future growth in revenue, cash flow and shareholder value. This coming
year, our first year as an independent company, will be very exciting as
we execute our business plan and grow both our lodging and senior living
businesses.�
Pro forma hotel revenues increased 8 percent to $4,053 million.
The increase in hotel revenues was driven primarily by a 7.5 percent increase
in room revenue per available room (REVPAR) on the leased full-service
hotels. Pro forma EBITDA from the Company�s leased hotels increased
16 percent to $40 million due principally to the strong growth in full-service
revenues and a one percentage point increase in the house profit margin.
Pro forma senior living communities� revenues increased 8 percent to
$241 million in 1998 due primarily to revenue per available
unit (REVPAU) growth of 5 percent and the impact of expansions at the Company�s
communities. Senior living EBITDA increased 6 percent to $59 million
on a pro forma basis in 1998 due principally to the strong growth in REVPAU
and the impact of the expansions.
James L. Francis, Executive Vice President and Chief Financial Officer
stated �Our leased full-service hotels performed exceptionally well in
1998 with REVPAR growth exceeding 7 percent. We anticipate
lower full-service REVPAR growth of 4 to 5 percent in 1999, but we will
work closely with our hotel managers to ensure that margins, and our EBITDA,
remain strong.� Mr. Francis added, �We are looking at several growth
opportunities at this time and hope to announce a deal in the near future.
We are also working on additional financing capacity to fund acquisition
opportunities and to improve our financial flexibility.�
The pro forma results assume that the spin-off of Crestline Capital
Corporation from Host Marriott Corporation occurred on January 1, 1997,
the leases and subleases with Host Marriott were effective as of that date
and that certain transactions detailed in the Company�s Securities and
Exchange Commission filings occurred on January 1, 1997. The pro
forma presentation does not purport to represent what the Company�s results
of operations would actually have been if the transactions had in fact
occurred on such date or to project the Company�s results of operations
for any future date or period.
On a historical basis, which only reflects the results of the Company�s
senior living communities, revenues in 1998 were $241 million and net income
was $6 million.
Crestline Capital Corporation is the largest and best capitalized independent
hotel leasing company and is the owner of one of the premier portfolios
of senior living communities in the country. For further information on
Crestline Capital Corporation, please visit the Company�s web site at www.crestlinecapital.com.
Certain matters discussed herein are forward-looking statements
within the meaning of the Private Litigation Reform Act of 1995.
Certain, but not necessarily all, of such statements can be identified
by the use of forward-looking terminology, such as �believes,� �expects,�
�may,� �will,� �should,� �estimates� or anticipates� or the negative thereof
or comparable terminology. All forward-looking statements involve
known and unknown risks, uncertainties and other factors, which may cause
the actual transactions, results, performance or achievements of the Company
to be materially different from any future transactions, results, performance
or achievements expressed or implied by such forward-looking statements.
These may include: (i) national and local economic and business conditions
or governmental regulations that will affect demand, prices, wages or other
costs for hotels and senior living communities; (ii) the level of rates
and occupancy that can be achieved by such properties; (iii) the Company�s
ability to compete effectively in areas such as access, location, quality
of properties and rate structures; (iv) the ability to maintain the properties
in a first-class manner (including meeting capital expenditure requirements;
(v) the availability and terms of financing; (vi) governmental actions
and initiatives including tax law changes that may eliminate the need for
a lease structure by lodging and senior living REITs; (vii) changes to
the public pay systems for medical care and the need for compliance with
environmental licensure and safety requirements; and (viii) the effect
on the Company of the Year 2000 issue. Although the Company believes
the expectations reflected in such forward-looking statements are based
upon reasonable assumptions and business opportunities, it can give no
assurance that its expectations will be attained or that any deviations
will not be material. The Company undertakes no obligation to publicly
release the result of any revisions to these forward-looking statements
that may be made to reflect any future events or circumstances.
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CRESTLINE CAPITAL CORPORATION AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION
(Unaudited, in thousands, except per share amounts)
Year Ended
January 1,
January 2,
1999
1998
Revenues
Full-service hotels ������������������.. $3,756,589
$3,461,732
Limited service hotels ����������������....
296,502 281,609
Total hotel revenue �����������������.
4,053,091 3,743,341
Senior living communities ���������������.
241,445 222,789
Other �����������������������..
4,500 4,500
Total revenues ������������������.�
4,299,036 3,970,630
Operating Costs and Expenses
Hotels ����������������������� 4,008,227
3,703,877
Senior living communities���������������
204,191 189,467
Other�����������������������.
4,500 4,500
Total operating costs and expenses����������...
4,216,918 3 ,897,844
Operating Profit �������������������.
82,118 72,786
Corporate expenses ������������������.. (17,376)
(16,500)
Interest expense �������������������� (22,937)
(22,696)
Interest income��������������������.
2,601
1,501
Income before income taxes���������������
44,406 35,091
Provision for income taxes ���������������... (18,206)
(14,387)
Net Income ���������������������.. $
26,200 $ 20,704
Basic Earnings Per Common Share�����������... $
1.19 $
.95
Diluted Earnings Per Common Share ���������.. $
1.19 $
.95
Historical Balance Sheet Data as of January 1, 1999 (audited)
Cash and cash equivalents ��������������.. $ 66,779
Total assets ��������������������. 858,753
Debt, excluding working capital notes due to Host Marriott�
213,076
Shareholders' equity ����������������...
459,254
CRESTLINE CAPITAL CORPORATION
PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION
(Unaudited, in thousands, except per share amounts and statistics)
Year Ended
January 1, January 2,
1999
1998
EBITDA
Hotel leases �������������������������. $ 40,000 $ 34,600
Senior living communities �������������������. 59,396
56,009
Corporate and other, net of interest income ������������..
(13,025)
(13,249)
EBITDA �������������������������.. $ 86,371 $ 77,360
EBITDA �������������������.������... $ 86,371
$ 77,360
Interest expense�����������������������.
(22,937) (22,696)
Hotel working capital interest expense��������������.
4,864 4,864
Depreciation and amortization�����������������..
(22,892) (23,437)
Income taxes������������������������.
(18,206) (14,387)
Other non-cash charges, net������������������.. (1,000)
(1,000)
Net income������������������������. $ 26,200
$ 20,704
Full-Service Hotel Statistics (120 Properties)
Room rate �������������������������. $ 143.59 $ 133.39
Room rate increase ���������������.������.. 7.6%
Occupancy������������������������... 77.5%
77.6%
REVPAR �������������������������.
$ 111.29 $ 103.52
REVPAR increase���������������������... 7.5%
Limited Service Hotel Statistics
1998 1997
Courtyard (53 Properties)
Room rate������������������������� $ 90.71
$ 84.30
Room rate increase ���������������������.. 7.6%
Occupancy������������������������.. 80.5%
81.1%
REVPAR�������������������������. $ 73.04 $
68.38
REVPAR increase ���������������������... 6.8%
Residence Inn (18 Properties)
Room rate ������������������������� $ 102.15 $
99.96
Room rate increase ���������������������.. 2.2%
Occupancy ������������������������... 84.1%
83.3%
REVPAR�������������������������. $ 85.86 $
83.27
REVPAR increase ���������������������... 3.1%
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