Three months ended
Nine months ended
September 30
September 30
2004 2003 Variance
2004 2003 Variance
OWNED HOTELS
Worldwide
13 properties/
6,364 rooms
RevPAR
136.82 116.85 17.1%
123.83 104.73 18.2%
ADR
205.99 192.32
7.1% 192.50 182.65
5.4%
Occupancy
66.4% 60.8% 5.6 points
64.3% 57.3% 7.0 points
Canada
7 properties/
3,336 rooms
RevPAR
173.78 152.77 13.8%
125.19 108.67 15.2%
ADR
220.81 207.67
6.3% 180.95 171.20
5.7%
Occupancy
78.7% 73.6% 5.1 points
69.2% 63.5% 5.7 points
U.S. and
International
6 properties/
3,028 rooms
RevPAR
96.07 78.23
22.8% 122.35 100.50
21.7%
ADR
181.67 166.49
9.1% 207.19 198.03
4.6%
Occupancy
52.9% 47.0% 5.9 points
59.1% 50.8% 8.3 points
FAIRMONT MANAGED
HOTELS
Worldwide
40 hotels/
19,885 rooms
RevPAR
133.71 118.58 12.8%
121.50 106.30 14.3%
ADR
194.17 177.71
9.3% 183.90 172.38
6.7%
Occupancy
68.9% 66.7% 2.2 points
66.1% 61.7% 4.4 points
Canada
20 properties/
10,099 rooms
RevPAR
137.64 120.15 14.6%
105.08 90.12
16.6%
ADR
184.41 166.60 10.7%
156.16 143.81
8.6%
Occupancy
74.6% 72.1% 2.5 points
67.3% 62.7% 4.6 points
U.S. and International
20 properties/
9,786 rooms
RevPAR
129.66 116.99 10.8%
138.10 122.55 12.7%
ADR
206.08 190.94
7.9% 212.99 202.01
5.4%
Occupancy
62.9% 61.3% 1.6 points
64.8% 60.7% 4.1 points
DELTA MANAGED
HOTELS
Worldwide
28 properties/
8,296 rooms
RevPAR
76.74 64.95
18.2% 65.04 55.31
17.6%
ADR
103.21 96.83
6.6% 97.67 91.43
6.8%
Occupancy
74.3% 67.1% 7.2 points
66.6% 60.5% 6.1 points
Comparable hotels and resorts are considered to be properties
that were fully open under FHR management for at least the entire current
and prior period. Comparable hotels and resorts statistics exclude properties
under major renovation that would have a significant adverse effect on
the properties' primary operations. The following properties were excluded:
Owned:
The Fairmont Southampton; The Fairmont Copley Plaza
Boston; The Fairmont Kea Lani Maui (sold July 2004);
The Fairmont Glitter Bay (sold July 2004)
Fairmont Managed: The Fairmont Southampton; The
Fairmont Olympic Hotel,
Seattle; The Fairmont Turnberry Isle Resort & Club,
Miami
Delta Managed: None (excludes
Delta franchised hotels)
FHR's 2003 quarterly operating statistics for its 2004
comparable hotel portfolios as at September 30, 2004 are available on the
Company's website (http://www.fairmont.com/investor). Quarterly statistics
have been revised to reflect the recent asset sales.
1. Operating revenues excludes
other revenues from managed and franchised properties (consists of direct
and indirect costs relating primarily to marketing and reservation services
that are reimbursed by hotel owners on a cost recovery basis). Management
considers that the exclusion of such revenues provides a meaningful measure
of operating performance, however, it is not a defined measure of operating
performance under Canadian GAAP. It is likely that FHR's calculation of
operating revenues is different than the calculation used by other entities.
2. EBITDA is defined as earnings
before interest, taxes, amortization and gain on sales of investments and
hotel assets. Income from investments and other is included in EBITDA.
Management considers EBITDA to be a meaningful indicator of hotel operations
and uses it as the primary measurement of operating segment profit and
loss. However, it is not a defined measure of operating performance
under Canadian generally accepted accounting principles ("Canadian GAAP").
It is likely that FHR's calculation of EBITDA is different than the calculations
used by other entities. EBITDA is represented on the consolidated statements
of income as "operating income before undernoted items".
Reconciliation of EBITDA to net income:
Three months ended Nine months ended
September 30 September 30
In millions of dollars
2004 2003 2004
2003
EBITDA
$ 63.5 $ 46.9 $ 160.1 $
132.5
Deduct (Add):
Gain on sales of investments
and hotel assets
(144.2) - (144.2)
-
Amortization
16.8 17.5 54.3
51.0
Interest expense, net
6.7 8.9
25.7 23.1
Income tax expense (recovery)
52.4 8.9
64.1 (5.8)
Net income
$ 131.8 $ 11.6 $ 160.2 $
64.2
Summary of Hotel Portfolios
At September 30
2004 2003
OWNED HOTELS
Worldwide
No. of Properties
15 17
No. of Rooms
7,343 7,787
Canada
No. of Properties
7 7
No. of Rooms
3,336 3,268
U.S. and International
No. of Properties
8 10
No. of Rooms
4,007 4,519
FAIRMONT MANAGED HOTELS
Worldwide
No. of Properties
44 43
No. of Rooms
21,643 21,182
Canada
No. of Properties
21 21
No. of Rooms
10,422 10,361
U.S. and International
No. of Properties
23 22
No. of Rooms
11,221 10,821
DELTA MANAGED HOTELS
Worldwide
No of Properties
38 39
No. of Rooms
11,163 11,465
Fairmont Hotels & Resorts Inc.
Consolidated Balance Sheets (Stated in millions of U.S.
dollars)
ASSETS
September 30 December 31
2004 2003
------------ ------------
(Unaudited)
Current assets
Cash and cash equivalents
$ 167.8 $
31.7
Accounts receivable
94.2
64.1
Inventory
14.8
14.2
Prepaid expenses and other
15.5
24.6
------------ ------------
292.3 134.6
Investments in partnerships and
corporations (note 6)
71.9
53.1
Investment in Legacy Hotels Real Estate
Investment Trust (note 4)
70.8 105.9
Non-hotel real estate
97.6
95.1
Property and equipment (note 3)
1,409.7 1,656.2
Goodwill
160.3 132.0
Intangible assets
218.5 216.7
Other assets and deferred charges (note
6) 98.9
109.4
------------ ------------
$ 2,420.0 $ 2,503.0
------------ ------------
------------ ------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued
liabilities $ 123.1
$ 121.3
Taxes Payable
52.1
2.7
Dividends payable
-
3.2
Current portion of long-term
debt (note 7) 4.0
117.8
------------ ------------
179.2 245.0
Long-term debt (note 3 and 5)
365.1 539.8
Other liabilities
91.3
91.4
Future income taxes
120.9
80.9
------------ ------------
756.5 957.1
------------ ------------
Shareholders' Equity (note 8)
1,663.5 1,545.9
------------ ------------
$ 2,420.0 $ 2,503.0
------------ ------------
------------ ------------
Fairmont Hotels & Resorts Inc.
Consolidated Statements of Income
(Stated in millions
of U.S. dollars, except per share amounts)
(Unaudited)
Three months ended Nine months ended
September 30 September
30
2004 2003
2004 2003
---------- ---------- ---------- ----------
Revenues
Hotel ownership operations
$ 180.3 $ 168.6 $ 516.3
$ 462.5
Management operations
12.0 10.6
33.1 27.8
Real estate activities
4.8 0.2
26.2 31.4
---------- ---------- ---------- ----------
Operating revenues
197.1 179.4
575.6 521.7
Other revenues from managed
and franchised properties
10.4 9.2
28.2 23.7
---------- ---------- ---------- ----------
207.5 188.6
603.8 545.4
Expenses
Hotel ownership operations
125.9 130.0
377.9 353.7
Management operations
7.5 4.7
20.4 15.7
Real estate activities
5.4 1.2
18.0 16.5
---------- ---------- ---------- ----------
Operating expenses
138.8 135.9
416.3 385.9
Other expenses from managed
and franchised properties
10.4 9.7
28.6 24.6
---------- ---------- ---------- ----------
149.2 145.6
444.9 410.5
Income (loss) from equity investments
and other 5.2
3.9 1.2
(2.4)
---------- ---------- ---------- ----------
Operating income before
undernoted items
63.5 46.9
160.1 132.5
Amortization
16.8 17.5
54.3 51.0
Interest expense, net
6.7 8.9
25.7 23.1
Gain on sales of investments
and hotel assets
(note 3 and 4)
(144.2) -
(144.2) -
---------- ---------- ---------- ----------
Income before income tax
expense
184.2 20.5
224.3 58.4
---------- ---------- ---------- ----------
Income tax expense (recovery)
Current
44.5 2.5
50.0 9.0
Future
7.9 6.4
14.1 (14.8)
---------- ---------- ---------- ----------
52.4 8.9
64.1 (5.8)
---------- ---------- ---------- ----------
Net income
$ 131.8 $ 11.6 $ 160.2
$ 64.2
---------- ---------- ---------- ----------
Weighted average number of
common shares outstanding
(in millions) (note 8)
Basic
78.4 79.1
78.9 79.2
Diluted
79.3 79.9
79.7 80.0
Basic earnings per common
share
$ 1.68 $ 0.15 $
2.03 $ 0.81
Diluted earnings per common
share
$ 1.66 $ 0.15 $
2.01 $ 0.80
Fairmont Hotels & Resorts Inc.
Consolidated Statements of Cash Flows (Stated in millions
of U.S. dollars)
(Unaudited)
Three months ended Nine months ended
September 30 September
30
2004 2003
2004 2003
---------- ---------- ---------- ----------
Cash provided by (used in)
Operating activities
Net Income
$ 131.8 $ 11.6 $ 160.2
$ 64.2
Items not affecting cash
Amortization of property
and equipment
16.0 16.9
52.1 49.1
Amortization of intangible
assets
0.8 0.6
2.2 1.9
(Income) loss from equity
investments and
other (5.2)
(3.9) (1.2)
2.4
Future income taxes
7.9 6.4
14.1 (14.8)
Unrealized foreign exchange
gain
(13.3) -
(3.1) -
Gain on sales of investments
and hotel assets
(144.2) -
(144.2) -
Distributions from
investments
4.2 -
4.2 4.4
Other
5.8 (2.8)
7.8 (9.0)
Changes in non-hotel real estate
(0.7) (2.7)
(0.4) 7.4 Changes in non-cash working
capital items (note 9)
52.0 15.1
15.7 (19.5)
---------- ---------- ---------- ----------
55.1 41.2
107.4 86.1
---------- ---------- ---------- ----------
Investing activities
Additions to property and
equipment
(14.2) (19.9) (58.2)
(55.5)
Acquisitions, net of cash acquired
- -
- 6.0
Investments in partnerships and corporations
(1.9) -
(4.9) (0.7)
Sales of investments and hotel
assets
443.6 -
443.6 -
Collection of loans receivable
0.1 -
9.0 -
Issuance of loans receivable
- (26.8) (7.0)
(28.3)
---------- ---------- ---------- ----------
427.6 (46.7) 382.5
(78.5)
---------- ---------- ---------- ----------
Financing activities
Issuance of long-term debt
- 14.8
82.7 161.5
Repayment of long-term debt
(313.9) (7.7) (379.5)
(151.2)
Issuance of common shares
0.3 0.5
0.9 0.6
Repurchase of common shares
(46.4) -
(51.8) (16.8)
Dividends paid
(3.2) (2.4)
(6.4) (4.8)
---------- ---------- ---------- ----------
(363.2) 5.2
(354.1) (10.7)
---------- ---------- ---------- ----------
Effect of exchange rate
changes on cash
0.5 -
0.3 3.5
---------- ---------- ---------- ----------
Increase (decrease) in cash
120.0 (0.3)
136.1 0.4
Cash and cash equivalents -
beginning of period
47.8 49.7
31.7 49.0
---------- ---------- ---------- ----------
Cash and cash equivalents -
end of period
$ 167.8 49.4 $
167.8 49.4
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Fairmont Hotels & Resorts Inc.
Consolidated Statements of Retained Earnings
(Stated in millions of U.S. dollars)
(Unaudited)
Three months ended Nine months ended
September 30 September
30
2004 2003
2004 2003
---------- ---------- ---------- ----------
Balance - Beginning of period
$ 101.1 $ 83.2 $
78.1 $ 38.5
Net income
131.8 11.6
160.2 64.2
---------- ---------- ---------- ----------
232.9 94.8
238.3 102.7
Repurchase of common shares
(note 8)
(18.2) -
(20.4) (5.5)
Dividends
- -
(3.2) (2.4)
---------- ---------- ---------- ----------
Balance - End of period
$ 214.7 $ 94.8 $ 214.7
$ 94.8
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Fairmont Hotels & Resorts Inc.
Notes to Consolidated Financial Statements
(Stated in millions of U.S. dollars)
(Unaudited)
1. Fairmont Hotels & Resorts
Inc. ("FHR") has operated and owned hotels
and resorts
for over 116 years and currently manages properties principally under the
Fairmont and Delta brands. At September 30, 2004, FHR managed or franchised
82 luxury and first-class hotels. FHR owns Fairmont Hotels Inc. ("Fairmont"),
which at September 30, 2004, managed 44 properties in major city centers
and key resort destinations throughout Canada, the United States, Mexico,
Bermuda, Barbados and the United Arab Emirates. Delta Hotels Limited ("Delta"),
a wholly owned subsidiary of FHR, managed or franchised 38 Canadian hotels
and resorts at September 30, 2004.
In addition
to hotel and resort management, as at September 30, 2004, FHR had hotel
ownership interests ranging from approximately 15% to 100% in 22 properties,
located in Canada, the United States, Mexico, Bermuda, Barbados and the
United Arab Emirates. FHR also has an approximate 24% equity interest in
Legacy Hotels Real Estate Investment Trust ("Legacy"), which owns 24 hotels
and resorts across Canada and the United States. FHR also owns real estate
properties that are suitable for either commercial or residential development,
and has a vacation ownership product.
Results for
the three and nine months ended September 30, 2004 are not necessarily
indicative of the results that may be expected for the full year due to
seasonal and short-term variations. Revenues are typically higher in the
second and third quarters versus the first and fourth quarters of the year.
2. These interim consolidated
financial statements do not include all
disclosures
as required by Canadian generally accepted accounting principles ("GAAP")
for annual consolidated financial statements and should be read in conjunction
with the audited consolidated financial statements for the year ended December
31, 2003 presented in the annual report. The accounting policies used in
the preparation of these interim consolidated financial statements are
consistent with the accounting policies used in the December 31, 2003 audited
consolidated financial statements, except as discussed below.
Hedging Relationships
Effective
January 1, 2004, FHR implemented new guidance on accounting for hedging
relationships. The new guidelines specify the circumstances in which hedge
accounting is appropriate, including the identification, documentation,
designation and effectiveness of hedges and also the discontinuance of
hedge accounting. The adoption of this accounting guidance did not have
an impact on the Company's financial statements.
Generally
Accepted Accounting Principles and General Standards of Financial Statement
Presentation The Canadian Institute of Chartered Accountants has issued
new accounting standards surrounding GAAP and financial statement presentation.
These standards lay out a framework for the application of GAAP and the
fair presentation of financial standards in accordance with GAAP and are
effective for years beginning January 1, 2004. No changes to accounting
principles or financial statement presentation were required.
Assets Held
for Sale
Long-lived
assets are classified as held for sale when specific GAAP criteria are
met. Assets held for sale are measured at the lower of their carrying amounts
and fair values less costs to dispose and are no longer amortized. Assets
classified as held for sale and liabilities related to these assets are
reported separately on the balance sheet. A component of FHR that is held
for sale is reported as a discontinued operation if the operations and
cash flows of the component will be eliminated from ongoing operations
as a result of the sale and FHR will not have a significant continuing
involvement in the operations of the component after the sale.
3. On July 15, 2004, FHR finalized
the sale of The Fairmont Kea Lani
Maui for cash
proceeds of $355.4. The mortgage of $120.0 on this property was repaid.
FHR recognized a gain on the sale of $67.8, net of income taxes of $41.0.
The resort will continue to be managed by Fairmont under a long-term management
contract.
On July 9,
2004, FHR finalized the sale of The Fairmont Glitter Bay for cash proceeds
of approximately $31.7. The mortgage of $5.2 on this property was repaid.
FHR recognized a non-taxable gain on the sale of $7.9. The resort will
continue to be managed by Fairmont under a long-term management contract.
4. On September 13, 2004, FHR
sold 12,000,000 units of Legacy for
approximately
$63.0 in cash and recognized a gain of $27.6. The sale decreases FHR's
investment in Legacy to 23.7% from approximately 35%. As at September
30, 2004, FHR owned 24,639,143 units of Legacy.
5. In March 2004, FHR entered
into a new $400.0 unsecured credit
facility due
March 2007. The interest rate is floating and is calculated based on the
borrower's choice of prime rate, bankers acceptance or LIBOR plus a spread.
6. In April 2004, FHR finalized
an agreement to invest $15.6 for a 14.5%
interest in
The Fairmont Dubai. This investment is accounted for using the equity method
due to significant influence and through contractual arrangements. In the
second quarter, $15.6 was reclassified from "Other assets and deferred
charges" to "Investments in partnerships and corporations".
7. On August 23, 2004, FHR purchased
the remaining 16.5% of outstanding
shares of
Fairmont from Maritz, Wolff & Co. for approximately $70.0 in cash.
FHR now owns 100% of Fairmont. The company had already been consolidating
100% of Fairmont, by previously having recorded an obligation of $69.0
representing the minimum amount a minority shareholder was entitled to
receive under a put option. During the third quarter, FHR increased its
previously reported goodwill and future income tax balances by $16.7. As
a result of this transaction, current portion of long-term debt decreased
by $69.0.
8. Shareholders' equity
September 30, December 31,
2004 2003
------------- -------------
Common shares
$ 1,175.9 $ 1,202.2
Other equity
19.2 19.2
Treasury stock
(4.2)
-
Contributed
surplus
142.3 142.3
Foreign currency
translation adjustments 115.6
104.1
Retained earnings
214.7 78.1
------------- -------------
$ 1,663.5 $ 1,545.9
------------- -------------
The diluted
weighted-average number of common shares outstanding is calculated as follows:
Three months ended Nine months ended
September 30
September 30
2004 2003
2004 2003
--------- --------- --------- ---------
(in millions) (in millions)
Weighted-average
number
of common
shares
outstanding
- basic 78.4
79.1 78.9
79.2
Stock options
0.9 0.8
0.8 0.8
--------- --------- --------- ---------
Weighted-average
number
of common
shares
outstanding
- diluted 79.3
79.9 79.7
80.0
--------- --------- --------- ---------
Effective October
2004, FHR may repurchase for cancellation up to 10% of its outstanding
common shares. The amounts and timing of repurchases are at FHR's discretion.
Under the previous issuer bid which ended on October 7, 2004, during the
nine months ended September 30, 2004, FHR repurchased 1,946,300 shares
(1,737,900 during the third quarter). Total consideration relating to the
repurchase amounted to $51.8 ($46.4 for the third quarter), of which $27.2
was charged to common shares, $20.4 was charged to retained earnings, and
$4.2 to treasury stock. Of the 1,946,300 shares, 150,000 shares were classified
as treasury stock as they were repurchased prior to September 30, 2004
and cancelled on October 1, 2004. During the nine months ended September
30, 2004, FHR issued 48,939 shares (10,371 shares for the third quarter)
pursuant to the Key Employee Stock Option Plan of which $0.9 was credited
to common shares ($0.3 for the third quarter) for proceeds from options
exercised. At September 30, 2004, 77,366,916 common shares were outstanding
(2003 - 79,080,159).
During the
nine months ended September 30, 2004, 10,000 stock options were granted
(nil in the third quarter). Assuming FHR elected to recognize the cost
of its stock-based compensation based on the estimated fair value of stock
options granted after January 1, 2002 but before January 1, 2003, net income
and basic and diluted earnings per share would have been:
Three months ended Nine months ended
September 30
September 30
2004 2003
2004 2003
--------- --------- --------- ---------
Reported net
income $ 131.8
$ 11.6 $ 160.2 $
64.2
Net income
assuming fair
value
method used $ 131.7
$ 11.4 $ 159.9 $
63.3
Basic earnings
per share $ 1.68 $ 0.14
$ 2.03 $ 0.80
Diluted earnings
per share $ 1.66 $ 0.14
$ 2.01 $ 0.79
9. Changes in non-cash working
capital:
Three months ended Nine months ended
September 30
September 30
2004 2003
2004 2003
--------- --------- --------- ---------
Decrease (increase)
in
current
assets
Accounts receivable
$ (5.9) $ 10.8 $ (31.1)
$ 0.9
Inventory
0.1 0.8
(1.2) 0.3
Prepaid expenses
and other 6.6
9.1 (1.3)
(0.9)
Increase (decrease)
in
current
liabilities
Accounts payable
and
accrued
liabilities
2.9 (6.1)
- (17.3)
Taxes payable
48.3 0.5
49.3 (2.5)
--------- --------- --------- ---------
$ 52.0 $ 15.1 $
15.7 $ (19.5)
--------- --------- --------- ---------
10. Segmented Information
FHR has five
reportable operating segments in two core business activities, ownership
and management operations. The segments are hotel ownership, investment
in Legacy, real estate activities, Fairmont and Delta. Hotel ownership
consists of real estate interests ranging from approximately 15% to 100%
in 22 properties. The investment in Legacy consists of an approximate 24%
equity interest in Legacy, which owns 24 hotels and resorts across Canada
and the United States. Real estate activities consists primarily of two
large undeveloped land blocks in Toronto and Vancouver and a vacation ownership
product. Fairmont is a North American luxury hotel and resort management
company and Delta is a Canadian first-class hotel and resort management
company.
The performance
of all segments is evaluated primarily on earnings before interest, taxes
and amortization ("EBITDA"), which is defined as income before interest,
income taxes and amortization. EBITDA includes income from investments
and other. Amortization, interest and income taxes are not allocated to
the individual segments. All transactions among operating segments are
conducted at fair market value.
The following
tables present revenues, EBITDA, total assets and capital expenditures
for FHR's reportable segments:
Three months ended September 30, 2004
Ownership Management
--------------------------- ------------
Inter-
Real
segment
Hotel
estate Fair-
Elimina-
Ownership Legacy activities mont Delta tion(a)
Total
--------- ------ ---------- ------ ----- -------- ------
Operating
revenues
$ 180.3 $ - $ 4.8
$ 14.1 $ 3.5 $ (5.6) $ 197.1
Other revenues
from
managed
and
franchised
properties
- -
- 8.2 2.2
- 10.4
--------
207.5
Income (loss)
from
equity
investments
and
other 1.5 3.7
- -
- - 5.2
EBITDA(b)
50.3 3.7 (0.6)
8.2 1.9 -
63.5
Total
assets(c)
2,028.1 70.8 99.1
340.0 77.1 (195.1) 2,420.0
Capital
expenditures
12.0 -
- 2.2 -
- 14.2
Three months ended September 30, 2003
Ownership Management
--------------------------- ------------
Inter-
Real
segment
Hotel
estate Fair-
Elimina-
Ownership Legacy activities mont Delta tion(a)
Total
--------- ------ ---------- ------ ----- -------- ------
Operating
revenues
$ 168.6 $ - $ 0.2
$ 12.5 $ 3.0 $ (4.9) $ 179.4
Other revenues
from
managed
and
franchised
properties
- -
- 7.0 2.2
- 9.2
--------
188.6
Income (loss)
from
equity
investments
and
other 1.3 2.6
- -
- - 3.9
EBITDA(b)
35.0 2.6 (1.0)
8.6 2.2 (0.5) 46.9
Total
assets(c)
2,121.6 105.5 100.2 351.5
73.1 (269.2) 2,482.7
Capital
expenditures
19.3 -
- 0.6 -
- 19.9
Nine months ended September 30, 2004
Ownership Management
--------------------------- ------------
Inter-
Real
segment
Hotel
estate Fair-
Elimina-
Ownership Legacy activities mont Delta tion(a)
Total
--------- ------ ---------- ------ ----- -------- ------
Operating
revenues
$ 516.3 $ - $ 26.2 $ 40.2
$ 9.6 $(16.7) $ 575.6
Other revenues
from
managed
and
franchised
properties
- -
- 20.9 7.3
- 28.2
--------
603.8
Income (loss)
from
equity
investments
and
other 2.0 (0.8)
- -
- - 1.2
EBITDA(b)
123.7 (0.8) 8.2
23.4 6.0 (0.4) 160.1
Total
assets(c)
2,028.1 70.8 99.1
340.0 77.1 (195.1) 2,420.0
Capital
expenditures
55.5 -
- 2.7 -
- 58.2
Nine months ended September 30, 2003
Ownership Management
--------------------------- ------------
Inter-
Real
segment
Hotel
estate Fair-
Elimina-
Ownership Legacy activities mont Delta tion(a)
Total
--------- ------ ---------- ------ ----- -------- ------
Operating
revenues
$ 462.5 $ - $ 31.4 $ 33.4
$ 8.7 $(14.3) $ 521.7
Other revenues
from
managed
and
franchised
properties
- -
- 17.6 6.1
- 23.7
--------
545.4
Income (loss)
from
equity
investments
and
other 1.8 (4.2)
- -
- - (2.4)
EBITDA(b)
96.3 (4.2) 14.9 19.9
6.5 (0.9) 132.5
Total
assets(c)
2,121.6 105.5 100.2 351.5
73.1 (269.2) 2,482.7
Capital
expenditures
54.3 -
- 1.2 -
- 55.5
(a) Revenues
represent management fees that are charged by Fairmont of $5.5 (2003 -
$4.8) and $16.4 (2003 - $14.1) for the three and nine months ended September
30, 2004 respectively, and Delta of $0.1 (2003 - $0.1) and $0.3 (2003 -
$0.2) for the three and nine months ended September 30, 2004 respectively,
to the hotel ownership operations, which are eliminated on consolidation.
EBITDA represents expenses not reimbursed relating to marketing and reservation
services performed by FHR under the terms of its hotel management and franchise
agreements. Total assets represent the elimination of inter-segment loans
net of corporate assets.
(b) The following
costs are not allocated to the individual segments in evaluating net income:
Three months ended Nine months ended
September 30
September 30
2004 2003
2004 2003
--------- --------- --------- ---------
Amortization
$ 16.8 $ 17.5 $
54.3 $ 51.0
Interest expense,
net 6.7
8.9 25.7
23.1
Income tax
expense
(recovery)
52.4 8.9
64.1 (5.8)
Gain on sales
of investments
and
hotel assets
(144.2) -
(144.2) -
(c) Hotel
ownership assets include $69.6 (2003 - $51.2) of investments accounted
for using the equity method.
11. As required under the terms and
conditions of the 3.75% convertible
senior notes
due 2023, the debt and the common shares issuable upon conversion of the
shares were registered on Form F-10 with the United States Securities and
Exchange Commission on April 6, 2004.
12. At September 30, 2004, FHR has
a payable to Legacy of $5.0 in
connection
with various management contracts, and reciprocal loan agreements with
Legacy for $86.6. A subsidiary of FHR has a 25% participation amounting
to $10.6 in the first mortgage on The Fairmont Olympic Hotel, Seattle.
13. FHR recorded pension and other
post employment benefit expenses as
follows:
Three months ended Nine months ended
September 30
September 30
2004 2003
2004 2003
--------- --------- --------- ---------
(in millions) (in millions)
Pension
$ (0.1) $ 1.1 $
0.9 $ 1.3
Other post-employment
benefits
0.1 -
0.2 -
--------- --------- --------- ---------
$ - $ 1.1
$ 1.1 $ 1.3
--------- --------- --------- --------- |
