Income Was $9.0 million; RevPAR Up 11.6%
Hotel Operating Statistics
Its Highest-Performing Seasonal Period
ORLANDO, Fla., May 16, 2005 - CNL Hotels & Resorts, Inc., the nation's second largest hotel real estate investment trust ("REIT"), today announced results of operations for the first quarter ended March 31, 2005.
First Quarter Highlights
Operating Performance Results
RevPAR for the Company's 121 adjusted comparable properties increased by 11.6% in the first quarter as compared to the same period of 2004, resulting from a 6.5% gain in ADR to $143.97 and a 3.3 percentage point increase in occupancy to 73.8%. Total adjusted comparable properties EBITDA margins improved in the first quarter by 1.1 percentage points to 32.8%.
John A. Griswold, president and chief operating officer, stated, "Through our active portfolio management efforts and a progressing industry recovery, we achieved strong year-over-year increases in RevPAR primarily driven by rate. We are seeing increases across our portfolio with improved profit margins and continued gains in market share."
The Company references non-GAAP financial measures within the meaning of the rules of the Securities and Exchange Commission, such as RevPAR, ADR, FFO, FFO per diluted share, EBITDA, EBITDA margins and adjusted comparable operating performance. For further detail, refer to the accompanying "Financial and Portfolio Information" section.
In February 2005, the Company obtained a $400 million loan secured by the Hotel del Coronado in San Diego, Calif. This property is owned through a partnership in which the Company has a 70% interest. Approximately $290 million of the loan proceeds were used to refinance existing partnership debt. A portion of the loan proceeds will finance improvements to the property and has allowed the partnership to make a distribution to the Company and its partner as a return of capital, which the Company intends to reinvest in its current portfolio. Further, the partnership is evaluating the use of the remaining loan proceeds to develop additional units at the property.
In May 2005, a joint venture in which the Company has a 44% interest obtained a commitment for a $300 million loan to be secured by the JW Marriott Desert Ridge Resort & Spa in Phoenix, Ariz. The loan is expected to fund in June 2005. Approximately $275 million of the loan proceeds will be used to refinance all of the construction debt of the partnership. The remaining loan proceeds will be used to pay expenses related to the extinguishment of the existing debt and closing of the new loan.
"The significant appreciation in value at the Hotel del Coronado has enabled us to take advantage of a lower cost of debt and allows additional investment in the property and our portfolio," stated C. Brian Strickland, executive vice president and chief financial officer. "We are also pleased with the performance of the JW Marriott Desert Ridge Resort and are ahead of schedule on the refinance of construction debt. The performance of this unique property continues to strengthen, allowing the partnership to reduce its cost of debt and increase the cash flow to the Company."
On April 18, 2005, the Company entered into a purchase and sale agreement to sell 30 non-strategic properties to an affiliate of Ashford Hospitality Trust, Inc. for $465 million in cash with a net gain of $35.5 million. The 30 properties were acquired or developed by the Company between 1999 and 2003, and represent four brands of Marriott International, Inc. in the select- service and extended-stay segments: Courtyard®, Residence Inn®, TownePlace Suites® and SpringHill Suites®. The Company expects the sale of these properties to be completed in June 2005, and intends to use the majority of the proceeds to retire existing long-term debt.
Mr. Hutchison added, "This sale will enable us to capitalize on favorable lodging market fundamentals and further our strategy to actively reinvest capital in the portfolio, while we continue to focus on selective acquisitions in the luxury resort and upper-upscale industry segments."
The Company intends to reinvest approximately $128 million in its portfolio in 2005, through value-enhancing renovation and development projects at core properties.
On April 8, 2005, the Company announced that a special committee of
its Board of Directors is in discussions with its advisor, CNL Hospitality
Corp., regarding the possible amendment of its existing merger agreement.
The Company anticipates that any modifications to the merger agreement
will be submitted to its stockholders for approval.
Certain statements and information included in this release constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995.
CNL Hotels & Resorts, Inc. owns one of the most distinctive portfolios in the lodging industry. With a focus on luxury resorts and upper-upscale properties, the company has approximately $6.3 billion in total assets with more than 130 hotels and resorts across North America that operate under independent brands and corporate brands such as Marriott, Hilton and Hyatt.
CNL Hotels & Resorts
|Also See:||CNL Hospitality Completes Acquisition of Six KSL Resorts for $1.4 billion in Cash and Assumption of $794 million Debt; KSL Appointed Interim Management Company / April 2004|
|John A. Griswold Trading President's Title at Tishman Hotel Corp. to Become President of CNL Hospitality Corp. / Feb 2003|