|DALLAS- March 1, 1999 -- Patriot American Hospitality,
Inc. and Wyndham International, Inc. whose shares (NYSE:PAH) are paired
and trade as a single unit, today announced combined results for the fourth
quarter and fiscal year ended December 31, 1998. For the fourth quarter,
combined funds from operations (FFO) increased 24.6% to reach $41.7 million,
or 22 cents per share on a diluted basis, compared to FFO of $33.4 million,
or 35 cents per share, for the fourth quarter of 1997. These results reflect
approximately $27 million in non-recurring charges and write-offs. Total
revenue for the fourth quarter was $630.3 million, representing a 249.6%
increase over the $180.3 million reported in 1997. Fourth-quarter earnings
before interest, taxes, depreciation and amortization, losses on asset
sales and impairments, and other one-time charges (EBITDA) reached $140.6
million, a 161.2% increase over the $53.8 million for the 1997 fourth quarter.
As required by Generally Accepted Accounting Principles (GAAP), for the fourth quarter, the Companies reported a combined net loss of $91 million, or $1.08 per share (diluted) after preferred stock dividends of $37 million and adjustment for equity forwards of $60.9 million. The net loss included approximately $85 million for liquidity-related, one-time charges comprised of transaction, termination expenses and professional fees as well as other fees related to Y2K analysis, costs associated with the Company's legislative efforts, subsequent restructuring analysis fees and impairments in value of assets held for sale as well as losses on assets sold in the fourth quarter.
For the fiscal year ended December 31, 1998, total revenue increased by 514% to reach $2.1 billion compared to $335 million reported in 1997. The increase reflects the increase in the size of the Company's portfolio over the last year and the completed mergers with Wyndham Hotel Corporation, Interstate Hotels Company, Summerfield Hotel Corporation, WHG Resorts and Casinos, and Arcadian International LLC. Funds from operations (FFO) increased by 136.3% to $263.6 million, or $1.61 per share on a diluted basis, for the 1998 fiscal year, compared to $111.5 million in 1997.
For the fiscal year ended December 31, 1998, the Companies' owned portfolio reported operational improvements over the year-ago period, as reflected in a 3.7% increase in RevPAR and a 4.1% increase in average daily rate (ADR). Occupancy remained relatively constant at 71.5% across the owned portfolio versus 71.8% in the prior year. Gross operating profit per room for the total year increased 10.9% to $47.09 from $42.46 last year, as GOP margins rose to 36.3% from 34.7%.
Similarly, operating performance across Wyndham's comparable branded portfolio of owned and managed hotels for the total year improved over last year, as reflected in a 9.2% increase in RevPAR, a 7.9% increase in ADR, and a 1.2% improvement in occupancy.
The $27 million in non-recurring charges and write-offs include $13.6
million in costs relating to the abandonment of transactions and approximately
$10 million in general and administrative costs relating to strategic advisory
and professional fees, severance costs, and Y2K items that could not be
capitalized for the quarter. Additionally, the fourth-quarter interest
expense includes $2 million relating to financing and extension fees to
extend the Company's debt maturities and forward equity commitments. The
remaining $2 million pertains to non-operating related losses in the Interstate
third-party hotel management business, scheduled to be spun-off by the
Completed Renovations, Conversions, Future Additions and Asset Sales
Investments in renovations, including conversions to Wyndham-branded hotels as well as general property maintenance and improvements efforts, during the fourth quarter totaled approximately $47.6 million. For the total fiscal year, the Company has invested approximately $183.3 million in renovations, including conversions and general maintenance and improvement efforts throughout the Company's owned and managed portfolio. Specific to conversions to the Wyndham brand, the Company invested $16.8 million during the fourth quarter to convert two owned hotels and one managed hotel to the Wyndham brand, respectively: the 1,014-room Buena Vista Palace Resort and Spa in Orlando; the 200-room Dallas Park Central Hotel and the 100-room Teatro Hotel in Denver. For the full year, Patriot American invested approximately $47 million to convert 38 hotels to the Wyndham brand.
In addition, during the fourth quarter, the Company announced its restructuring of its relationship with NorthCoast Hotels, LLC, one of its independent lessees, such that NorthCoast would no longer be a lessee of any of Patriot American's hotels. As part of the restructuring, Patriot sold to NorthCoast the following three hotels for approximately $23.7 million:145-room WestCoast Gateway Hotel, the 151-room West Coast Roosevelt Hotel in Seattle, and the 147-room WestCoast Wenatchee Hotel in Wenatchee, WA.
And, in a separate transaction, the Company announced that it would
sell 100% equity interests in two hotel properties, the Courtyard by Marriott
in Westborough, MA and the Residence Inn by Marriott in Pittsburgh, and
50% equity interest in two hotel properties, the Courtyard by Marriott
in Orange, CT, and the Courtyard by Marriott in St. Louis, to the Fine
family trust, for an aggregate purchase price of approximately $32 million.
As of December 31, 1998, Patriot's total portfolio was comprised of 473
hotels and resorts, 177 of which are owned, 165 of which are managed, 119
of which are leased and 12 of which are franchised. Of the total portfolio,
189 are proprietarily branded.
About Patriot American Hospitality, Inc. and Wyndham International, Inc.
Based in Dallas, Texas, Patriot American Hospitality, Inc. (NYSE: PAH) is currently the nation's largest hotel real estate investment trust (REIT) with a portfolio, comprised of 472 owned, managed, leased or franchised hotels and resorts with more than 101,000 rooms. Its paired operating company, Wyndham International, Inc., comprised of the Grand Bay Hotels Resorts Division, the Wyndham Hotel Group, the All-Suites Division and PAH Management Services, leases, manages and franchises primarily upscale and luxury hotel and resort properties represented by its proprietary brands and provides management services for third-party owned hotels and resorts.
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. The Company's actual results could differ materially from those set forth in the forward-looking statements. Certain factors that might cause such a difference include competition for guests from other hotels, dependence upon business and commercial travelers and tourism, the seasonality of the hotel industry, and availability of equity or debt financing at terms and conditions favorable to the Companies and other factors detailed in the Companies Quarterly Report on Form 10-Q dated September 30, 1998, Current Report on Form 8-K dated November 9, 1998, Registration Statement on Form S-3 (File No. 333-58705) and Registration Statement on Form S-3 (File No. 333-65339).
|Also See:||Investor Group Providing $1 Billion Equity Investment in Wyndham International, Inc. / March 1999|