CNL Hotels & Resorts, Inc. and Subsidiaries
CONDENSED CONSOLIDATED BALANCE SHEETS - UNAUDITED
(in thousands, except per share data)
June 30, December 31,
2005 2004
ASSETS
Hotel and resort properties, net
$4,475,561 $4,523,505
Investments
in unconsolidated entities
-- 10,248
Assets held for sale
-- 428,810
Cash and cash equivalents
112,715 108,304
Restricted cash
196,419 140,761
Receivables, less allowance for doubtful
accounts of $1,624 and $1,576,
respectively 116,209
84,005
Goodwill
515,192 515,192
Intangibles, less accumulated amortization
of $13,052 and $7,196, respectively
392,047 397,904
Prepaid expenses and other assets
68,556 60,498
Loan costs, less accumulated amortization
of $24,738 and $17,205, respectively
35,657 47,818
$5,912,356 $6,317,045
LIABILITIES AND STOCKHOLDERS'
EQUITY
Mortgages and other notes payable
$3,171,689 $3,186,097
Liabilities associated with assets
held
for sale
-- 323,009
Accounts payable and accrued expenses
186,800 186,291
Other liabilities
42,639 42,737
Distributions and losses in excess
of
investments in unconsolidated
entities
1,114
--
Due to related parties
4 5,885
Membership deposits
222,838 214,246
Total liabilities
3,625,084 3,958,265
Commitments and contingencies
Minority interests
127,569 148,825
Stockholders' equity:
Preferred stock, without
par value.
Authorized
and unissued 1,500 shares
--
--
Excess shares, $.01 par
value per share.
Authorized
and unissued 31,500 shares
--
--
Common stock, $.01 par
value per share.
Authorized
225,000 shares; issued 157,393
and
154,975 shares, respectively;
outstanding
152,876 and 152,913 shares,
respectively
1,530 1,531
Capital in excess of par
value
2,740,412 2,740,430
Accumulated distributions
in excess of
net income
(577,665) (527,790)
Accumulated other comprehensive
loss
(4,574) (4,216)
Total stockholders' equity
2,159,703 2,209,955
$5,912,356 $6,317,045
CNL Hotels & Resorts, Inc. and Subsidiaries
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS - UNAUDITED
(in thousands, except per share data)
Three Months Ended Six
Months Ended
June 30,
June 30,
2005 2004
2005 2004
Revenues:
Room
$223,014 $198,097 $448,884
$332,951
Food and beverage
107,138 98,191
215,962 147,376
Other hotel and
resort operating
departments
56,226 54,219
116,988 67,802
Rental income from
operating leases
3,712 7,324
6,895 13,175
Interest and other
income
1,319 1,286
2,240 3,323
391,409 359,117
790,969 564,627
Expenses:
Room
51,563 46,295
102,835 78,523
Food and beverage
68,816 65,933
139,165 102,304
Other hotel and
resort operating
departments
32,629 30,914
66,081 38,955
Property operations
65,470 61,849
130,518 102,447
Repairs and
maintenance
15,862 14,329
30,976 23,869
Hotel and resort
management fees
10,795 9,003
22,598 15,295
Sales and marketing
23,189 20,770
45,622 35,190
Credit enhancement
funding
(731) (2,948)
(731) (8,748)
General operating
and administrative
7,196 4,360
11,797 8,170
State and local taxes
2,018 1,377
4,011 2,432
Asset management fees
to related party
7,352 7,300
14,718 12,246
Depreciation and
amortization
49,053 41,088
98,500 67,963
333,212 300,270
666,090 478,646
Operating profit
58,197 58,847
124,879 85,981
Interest and loan
cost amortization
(55,389) (42,293) (107,396)
(66,703)
Gain on sale of
common stock
-- 8,026
-- 8,026
Transaction costs
(1,260) (7,057)
(1,260) (7,057)
Loss on extinguishment
of debt
-- (14,037)
(4,206) (14,037)
Loss on termination of
hedges
(1,344) --
(1,344) --
Income before equity in
losses of
unconsolidated
entities, minority
interests, and benefit
(expense) from income
taxes
204 3,486
10,673 6,210
Equity in losses of
unconsolidated entities
(8,729) (3,397)
(9,221) (6,032)
Minority interests
(3,953) (3,685)
(5,716) (5,937)
Loss from continuing
operations before
benefit (expense) from
income taxes
(12,478) (3,596)
(4,264) (5,759)
Benefit (expense)
from income taxes
3,089 (419)
2,660 356
Loss from continuing
operations
(9,389) (4,015)
(1,604) (5,403)
Discontinued operations,
net of income taxes
42,263 6,209
43,443 10,567
Net income
$32,874 $2,194
$41,839 $5,164
Earnings (loss) per
share of common stock
(basic and diluted):
Continuing operations
$(0.06) $(0.03)
$(0.01) $(0.03)
Discontinued
operations
0.28 0.04
0.28 0.07
$0.22 $0.01
$0.27 $0.04
Weighted average number
of shares of common
stock outstanding:
Basic and diluted
152,830 151,550
152,871 143,613
The following is a reconciliation of
net income to FFO for the three and
six months ended June 30 (in thousands):
Three Months
Six Months
Ended June 30,
Ended June 30,
2005 2004
2005 2004
Net income
$32,874 $2,194
$41,839 $5,164
Adjustments:
Effect of
depreciation
of real
estate assets
of unconsolidated
entities
3,456 3,573
7,004 7,143
Effect of
depreciation
of real
estate assets
of minority
interest (3,417) (3,009)
(6,570) (6,048)
Depreciation
and
amortization
of
real
estate assets 47,454 42,855
98,099 73,695
Gain on sale
of real
estate
assets (49,203)
-- (49,861)
--
Funds from operations
$31,164 $45,613
$90,511 $79,954
Weighted average shares
(basic and diluted)
152,830 151,550
152,871 143,613
FFO per share (basic
and diluted)
$0.20 $0.30
$0.59 $0.56
The following is a reconciliation of
loss from continuing operations to
EBITDA for the three and six months ended June 30 (in
thousands):
Three Months Six Months
Ended June 30, Ended June 30,
2005 2004 2005
2004
Loss from continuing operations
$(9,389) $(4,015) $(1,604) $(5,403)
Adjustments:
Interest and loan cost
amortization
55,389 42,293 107,396 66,703
Income tax (benefit) expense
(3,089) 419 (2,660)
(356)
Depreciation and amortization
49,053 41,088 98,500 67,963
EBITDA
$91,964 $79,785 $201,632 $128,907
The following is a reconciliation of
net income to Adjusted FFO for the
three and six months ended June 30
(in thousands):
Three Months
Six Months
Ended June 30,
Ended June 30,
2005 2004
2005 2004
Net income
$32,874 $2,194
$41,839 $5,164
Adjustments:
Effect of
depreciation
of
real estate
assets of
unconsolidated
entities
3,456 3,573
7,004 7,143
Effect of
depreciation
of
real estate
assets of
minority
interest
(3,417) (3,009)
(6,570) (6,048)
Depreciation of
real estate
assets
47,454 42,855
98,099 73,695
Gain on sale of
real estate
assets
(49,203) --
(49,862) --
Net membership
cash flows
2,637 4,453
8,593 4,453
Loss on
extinguishment
of debt of
unconsolidated
entities
6,901 --
6,901 --
Loss on
extinguishment
of debt
7,703 14,037
11,909 14,037
Gain on sale of
common stock
-- (8,026)
-- (8,026)
Adjusted funds from
operations
$48,405 $56,077 $117,914
$90,418
Weighted average
shares (basic and
diluted)
152,830 151,550
152,871 143,613
Adjusted FFO per
share (basic and
diluted)
$0.32 $0.37
$0.77 $0.63
The following is a reconciliation of loss
from continuing operations to
Adjusted EBITDA for the three and six months
ended June 30 (in
thousands):
Three Months
Six Months
Ended June 30,
Ended June 30,
2005 2004
2005 2004
Loss from continuing
operations
$(9,389) $(4,015) $(1,604)
$(5,403)
Adjustments:
Interest and loan
cost amortization
55,389 42,293
107,396 66,703
Income tax
(benefit)
expense
(3,089) 419
(2,660) (356)
Loss on
termination
of
hedges
1,344 --
1,344 --
Depreciation and
amortization
49,053 41,088
98,500 67,963
Loss on
extinguishment
of
debt
-- 14,037
4,206 14,037
Gain on sale of
common stock
-- (8,026)
-- (8,026)
Net membership cash
flows
2,637 4,453
8,593 4,453
Transaction costs
1,260 7,057
1,260 7,057
Minority interest
adjustments
3,953 3,685
5,716 5,937
Equity method
adjustments
8,729 3,397
9,221 6,032
Adjusted EBITDA
$109,887 $104,388 $231,972
$158,397
CNL
Hotels & Resorts, Inc. and Subsidiaries
PROPERTY OPERATING DATA - UNAUDITED
Unaudited Property Operating
Data-Comparable Properties
For the Three Months Ended June
30, 2005
Var.
Var.
(ppt.)
(%) to
Properties Occupancy to 2004
ADR 2004
Consolidated
Luxury Resort &
Upper Upscale
30 76.9%
2.1 $145.78
5.1%
Upscale
27 78.7
2.2 99.24
9.8
Midscale
26 73.6
1.6 82.38
8.3
Total
Consolidated
83 76.6%
2.0 $121.87
6.4%
Unconsolidated
3 84.0
3.3 166.79
6.5
Subtotal
86 77.5%
2.2 $127.68
6.5%
Triple Net Lease(1) 6
75.4 1.5
112.84 10.7
Total
92 77.4%
2.1 $126.94
6.6%
Var.
Var. EBITDA
(ppt.)
(%) to Margin
to
RevPAR 2004
(2) 2004
Consolidated
Luxury Resort &
Upper Upscale
$112.05 8.0%
30.6% 2.7
Upscale
78.11 12.9
35.4 1.0
Midscale
60.67 10.8
29.8 (0.8)
Total Consolidated
$93.40 9.3%
31.2% 2.2
Unconsolidated
140.08 10.8
29.0 1.2
Subtotal
$98.98 9.5%
30.8% 2.0
Triple Net Lease(1)
85.06 13.0
33.2 4.8
Total
$98.26 9.7%
30.9% 2.1
(1) Our operating results include
only rental revenues received from
third-party
lessees of these Properties, as we do not directly
participate
in their hotel operating revenues and expenses.
Properties
previously leased to third parties, which were converted
to the
TRS structure and are now leased to wholly-owned TRS entities
are
presented as consolidated.
(2) EBITDA Margin is calculated
as EBITDA divided by total revenues.
CNL Hotels & Resorts, Inc. and Subsidiaries
PROPERTY OPERATING DATA - UNAUDITED
Unaudited Property Operating Data-Comparable
Properties
For the Six Months Ended June 30,
2005
Var.
Var.
(ppt.)
(%)
to
to
Properties Occupancy 2004
ADR 2004
Consolidated
Luxury
Resort &
Upper
Upscale
30 74.7%
2.9 $147.13 5.4%
Upscale
24 76.5
2.4 100.63 9.2
Midscale
26 71.2
2.3 82.21 7.7
Total
Consolidated
80 74.3%
2.7 $123.49 6.5%
Unconsolidated
3 84.1
4.3 174.43 7.1
Subtotal
83 75.5%
2.9 $130.41 6.6%
Triple Net Lease(1)
6 72.6
3.0 112.39 12.5
Total
89 75.4%
2.9 $129.50 6.9%
Var.
Var.
(%) EBITDA
(ppt.)
RevPAR to
Margin to
2004 (2)
2004
Consolidated
Luxury
Resort &
Upper
Upscale
$109.83 9.8%
29.2% 2.9
Upscale
76.97 12.8
35.6 1.0
Midscale
58.54 11.2
28.9 (0.5)
Total
Consolidated
$91.80 10.5%
30.1% 2.3
Unconsolidated
146.73 12.9
31.4 2.6
Subtotal
$98.51 10.9%
30.4% 2.4
Triple Net Lease(1) 81.62
17.4 30.0
5.4
Total
$97.62 11.2%
30.3% 2.5
(1) Our operating results include only
rental revenues received from
third-party
lessees of these Properties, as we do not directly
participate
in their hotel operating revenues and expenses.
Properties
previously leased to third parties, which were converted
to the TRS
structure and are now leased to wholly-owned TRS entities
are presented
as consolidated.
(2) EBITDA Margin is calculated as
EBITDA divided by total revenues.
CNL Hotels & Resorts, Inc. and Subsidiaries
PROPERTY OPERATING DATA -- UNAUDITED
Unaudited Property Operating Data-Adjusted
Comparable Properties
For the Three Months Ended June 30,
2005
Var.
Var.
(ppt.)
(%)
to
to
Properties Occupancy 2004
ADR 2004
Consolidated
Luxury Resort &
Upper Upscale
35 76.3%
1.8 $165.88
3.3%
Upscale
24 78.7
2.2 98.59
9.7
Midscale
26 73.6
1.6 82.38
8.3
Total
Consolidated
85 76.3%
1.8 $137.90
4.5%
Unconsolidated
3 84.0
3.3 166.79
6.5
Subtotal
88 77.1%
2.0 $141.28
4.8%
Triple Net Lease(1) 6
75.4 1.5
112.84 10.7
Total
94 77.0%
2.0 $139.98
5.1%
Var.
Var.
(%) EBITDA
(ppt.)
to Margin
to
RevPAR 2004
(2) 2004
Consolidated
Luxury Resort &
Upper Upscale
$126.50 5.7%
31.6% 1.7
Upscale
77.62 12.9
35.3 0.9
Midscale
60.67 10.8
29.8 (0.8)
Total
Consolidated
$105.17 7.1%
31.8% 1.5
Unconsolidated
140.08 10.8
29.0 1.2
Subtotal
$108.92 7.6%
31.4% 1.4
Triple Net Lease(1) 85.06
13.0 33.2
4.8
Total
$107.80 7.8%
31.5% 1.5
(1) Our operating results include only
rental revenues received from
third-party
lessees of these Properties, as we do not directly
participate
in their hotel operating revenues and expenses.
Properties
previously leased to third parties, which were converted
to the TRS
structure and are now leased to wholly-owned TRS entities
are presented
as consolidated.
(2) EBITDA Margin is calculated as EBITDA
divided by total revenues.
CNL Hotels & Resorts, Inc. and Subsidiaries
PROPERTY OPERATING DATA - UNAUDITED
Unaudited Property Operating Data-Adjusted
Comparable Properties
For the Six Months Ended June 30,
2005
Var.
Var.
(ppt.)
(%) to
Properties Occupancy to 2004
ADR 2004
Consolidated
Luxury Resort &
Upper Upscale
35 74.7%
2.6 $172.13
3.9%
Upscale
24 76.5
2.4 100.63
9.2
Midscale
26 71.2
2.3 82.21
7.7
Total
Consolidated
85 74.4%
2.5 $142.38
5.0%
Unconsolidated
3 84.1
4.3 174.43
7.1
Subtotal
88 75.5%
2.7 $146.22
5.3%
Triple Net Lease(1) 6
72.6 3.0
112.39 12.5
Total
94 75.3%
2.7 $144.70
5.5%
Var.
Var. EBITDA
(ppt.)
(%) to Margin
to
RevPAR 2004
(2) 2004
Consolidated
Luxury Resort &
Upper Upscale
$128.65 7.7%
32.0% 1.0
Upscale
76.97 12.8
35.6 1.0
Midscale
58.54 11.2
28.9 (0.5)
Total Consolidated
$105.98 8.7%
32.1% 0.9
Unconsolidated
146.73 12.9
31.4 2.6
Subtotal
$110.37 9.3%
32.0% 1.2
Triple Net Lease (2)
81.62 17.4
30.0 5.4
Total
$109.02 9.5%
31.9% 1.3
(1) Our operating results include
only rental revenues received from
third-party
lessees of these Properties, as we do not directly
participate
in their hotel operating revenues and expenses.
Properties
previously leased to third parties, which were converted
to the
TRS structure and are now leased to wholly-owned TRS entities
are
presented as consolidated.
(2) EBITDA Margin is calculated
as EBITDA divided by total revenues.
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