1. Revenue per available room
("RevPAR") is calculated as room revenue
divided by
the number of room nights available. Management considers RevPAR to be
a meaningful indicator of hotel operations because it measures the period-over-period
change in room revenues relative to the number of room nights available.
Investors and analysts also use it as a measure of the Company's financial
performance. However, RevPAR is not a defined measure of operating performance
under Canadian Generally Accepted Accounting Principles ("GAAP"). It is
likely that FHR's calculation of RevPAR is different than the calculations
used by others.
2. Comparable information is
considered to be information for properties
that were
wholly-owned or fully open under FHR management for at least the entire
current and prior year. Comparable information also excludes properties
under major renovation that would have a significant adverse effect on
the properties' primary operations. We present these results on a comparable
basis because we believe that doing so provides investors and management
with useful information for evaluating the period-to-period performance
of our hotels. When presenting comparable information for this quarter,
the following properties have been excluded:
- The
Fairmont Kea Lani Maui (sold July 2004)
- The
Fairmont Glitter Bay (sold July 2004)
- The
Fairmont Southampton (reopened on April 11, 2004 after hurricane damage
repairs)
3. EBITDA is defined as earnings
before interest, taxes, other expenses
and amortization.
Income or loss from investments and other is included in EBITDA. Management
considers EBITDA to be a meaningful indicator of operations and uses it
as the primary measure to assess the operating performance of our business
segments. It is also used by investors, analysts and our lenders as a measure
of the Company's financial performance. However, EBITDA is not a defined
measure of operating performance under Canadian GAAP. It is likely that
FHR's calculation of EBITDA is different than the calculations used by
others.
The table
below provides a reconciliation of EBITDA to net income:
Three months Six months
ended June 30 ended June 30
(In millions
of dollars) 2005
2004 2005 2004
EBITDA
$ 50.5 $ 62.5 $ 72.7
$ 96.6 Deduct:
Other expenses
3.3 -
3.3 -
Amortization
16.4 18.0 32.9
37.5
Operating
income
30.8 44.5 36.5
59.1
Interest expense, net
6.0 9.0
13.2 19.0
Income tax (recovery) expense (9.3)
6.5 (6.8) 11.7
Net income
$ 34.1 $ 29.0 $ 30.1
$ 28.4
Fairmont Hotels & Resorts Inc.
Consolidated Balance Sheets (Stated in millions of U.S. dollars)
ASSETS
June 30 December 31
2005 2004
---------- ----------
(Unaudited)
Current assets
Cash and cash equivalents
$ 69.9 $ 99.1
Accounts receivable
107.1 90.2
Inventory
15.4 15.5
Prepaid expenses and other
17.1 11.2
---------- ----------
209.5 216.0
Investments in partnerships and corporations
(note 3)
94.5 90.7
Investment in Legacy Hotels Real Estate
Investment Trust
63.3 70.0
Non-hotel real estate
96.8 100.3
Property and equipment
1,426.6 1,435.5
Goodwill
162.0 162.8
Intangible assets (notes 3 and 4)
276.7 245.0
Other assets and deferred charges
(notes 3 and 4)
116.0 82.3
---------- ----------
$ 2,445.4 $ 2,402.6
---------- ----------
---------- ----------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued
liabilities $ 143.8
$ 123.9
Taxes payable (note 5)
16.3 35.3
Dividends payable
4.5 4.6
Current portion of long-term
debt
4.2 4.1
---------- ----------
168.8 167.9
Long-term debt
475.1 398.0
Other liabilities
96.1 95.7
Future income taxes
94.2 90.6
---------- ----------
834.2 752.2
---------- ----------
Shareholders' Equity (note 6)
1,611.2 1,650.4
---------- ----------
$ 2,445.4 $ 2,402.6
---------- ----------
---------- ----------
Fairmont Hotels & Resorts Inc.
Consolidated Statements of Income
(Stated in millions
of U.S. dollars, except per share amounts)
(Unaudited)
Three months ended Six months ended
June 30
June 30
2005 2004 2005
2004
-------- -------- -------- --------
Revenues
Hotel ownership operations
(note 8 (d))
$ 177.5 $ 180.6 $ 326.2 $ 336.0
Management operations
14.6 11.6 27.1
21.1
Real estate activities
2.0 18.1
9.5 21.4
-------- -------- -------- --------
194.1 210.3 362.8
378.5
Other revenues from managed
and franchised properties
11.6 8.9
22.2 17.8
-------- -------- -------- --------
205.7 219.2 385.0
396.3
Expenses
Hotel ownership operations
131.3 129.2 249.2
243.5
Management operations
4.7 3.9
10.4 8.7
Real estate activities
2.4 9.8
8.8 13.2
General and administrative
7.7 8.4
18.3 12.1
Other (note 10)
3.3 -
3.3 -
Amortization
16.4 18.0 32.9
37.5
-------- -------- -------- --------
165.8 169.3 322.9
315.0
Other expenses from managed
and franchised properties
11.2 9.1
21.8 18.2
-------- -------- -------- --------
177.0 178.4 344.7
333.2 Income (loss) from equity investments
2.1 3.7
(3.8) (4.0)
-------- -------- -------- --------
Operating income
30.8 44.5 36.5
59.1
Interest expense, net
6.0 9.0
13.2 19.0
-------- -------- -------- --------
Income before income tax expense
(recovery)
24.8 35.5 23.3
40.1
-------- -------- -------- --------
Income tax expense (recovery)
Current (note 5)
(13.6) 2.6
(9.3) 5.5
Future
4.3 3.9
2.5 6.2
-------- -------- -------- --------
(9.3) 6.5 (6.8)
11.7
-------- -------- -------- --------
Net income
$ 34.1 $ 29.0 $ 30.1
$ 28.4
-------- -------- -------- --------
-------- -------- -------- --------
Weighted average number of
common shares outstanding
(in millions) (note 6)
Basic
75.0 79.1 75.5
79.1
Diluted
76.1 79.9 76.5
79.9
Basic income per common share
$ 0.45 $ 0.37 $ 0.40
$ 0.36
Diluted income per common share
$ 0.45 $ 0.36 $ 0.39
$ 0.36
Fairmont Hotels & Resorts Inc.
Consolidated Statements of Cash Flows (Stated in millions of U.S. dollars)
(Unaudited)
Three months ended Six months ended
June 30
June 30
2005 2004 2005
2004
-------- -------- -------- --------
Cash provided by (used in)
Operating activities
Net income
$ 34.1 $ 29.0 $ 30.1
$ 28.4
Items not affecting cash
Amortization of property
and
equipment
15.8 17.3 31.6
36.1
Amortization of intangible
assets
0.6 0.7
1.3 1.4
(Income) loss from equity
investments
(2.1) (3.7) 3.8
4.0
Future income taxes
4.3 3.9
2.5 6.2
Tax recovery (note 5)
(14.6) -
(14.6) -
Unrealized foreign exchange
loss 8.3 10.2
8.1 10.2
Other
(1.7) (3.5) (1.3)
(1.0)
Distributions
2.3 -
4.0 -
Changes in non-hotel real estate
(0.9) 0.5
2.1 0.3
Changes in non-cash working capital
items (note 7)
(20.6) (45.3) (7.4)
(36.3)
-------- -------- -------- --------
25.5 9.1
60.2 49.3
-------- -------- -------- --------
Investing activities
Additions to property and equipment
(13.6) (24.2) (40.2)
(44.0)
Proceeds from sale of property and
equipment
0.1 -
8.8 -
Investments in partnerships and
corporations
(7.0) -
(11.2) -
Collection of loans receivable
- 0.1
- 8.9
Issuance of loans receivable
(1.2) (2.0) (32.8)
(7.0)
Investments in intangible assets
(3.9) -
(26.7) -
-------- -------- -------- --------
(25.6) (26.1) (102.1) (42.1)
-------- -------- -------- --------
Financing activities
Issuance of long-term debt
31.2 2.8
79.8 82.7
Repayment of long-term debt
(1.0) (2.0) (4.5)
(65.6)
Issuance of common shares
1.4 0.3
2.8 0.6
Repurchase of common shares
(27.9) (5.4) (60.7)
(5.4)
Dividends paid
- -
(4.6) (3.2)
-------- -------- -------- --------
3.7 (4.3) 12.8
9.1
-------- -------- -------- --------
Effect of exchange rate changes
on cash
(0.1) (0.1) (0.1)
(0.2)
-------- -------- -------- --------
(Decrease) increase in cash
3.5 (21.4) (29.2)
16.1
Cash and cash equivalents -
beginning of period
66.4 69.2 99.1
31.7
-------- -------- -------- --------
Cash and cash equivalents -
end of period
$ 69.9 $ 47.8 $ 69.9
$ 47.8
-------- -------- -------- --------
-------- -------- -------- --------
Fairmont Hotels & Resorts Inc.
Consolidated Statements of Retained Earnings
(Stated in millions of U.S. dollars)
(Unaudited)
Three months ended Six months ended
June 30
June 30
2005 2004 2005
2004
-------- -------- -------- --------
Balance - Beginning of period
$ 164.7 $ 77.5 $ 189.2 $
78.1
Net income
34.1 29.0 30.1
28.4
-------- -------- -------- --------
198.8 106.5 219.3
106.5
Repurchase of common shares
(note 6)
(15.3) (2.2) (35.8)
(2.2)
Dividend
(4.5) (3.2) (4.5)
(3.2)
-------- -------- -------- --------
Balance - End of period
$ 179.0 $ 101.1 $ 179.0 $ 101.1
-------- -------- -------- --------
-------- -------- -------- --------
Fairmont Hotels & Resorts Inc.
Notes to Consolidated Financial Statements
(Stated in millions of U.S. dollars)
(Unaudited)
1. Fairmont Hotels & Resorts
Inc. ("FHR" or the "Company") has operated
and owned
hotels and resorts for over 118 years and currently manages properties,
principally under the Fairmont and Delta brands. As at June 30, 2005, FHR
managed or franchised 87 luxury and first-class hotels. FHR owns Fairmont
Hotels Inc. ("Fairmont") which, as at June 30, 2005, managed 49 luxury
properties in major city centers and key resort destinations throughout
Canada, the United States, Mexico, Bermuda, Barbados, United Kingdom, Monaco,
Kenya and the United Arab Emirates. Delta Hotels Limited ("Delta"), a wholly-owned
subsidiary of FHR, managed or franchised 38 Canadian hotels and resorts
as at June 30, 2005.
In addition
to hotel and resort management, as at June 30, 2005, FHR had hotel ownership
interests ranging from approximately 15% to 100% in 28 properties, located
in Canada, the United States, Mexico, Bermuda, Barbados, Monaco, Kenya
and the United Arab Emirates. FHR also has an approximate 24% equity interest
in Legacy Hotels Real Estate Investment Trust ("Legacy") as at June 30,
2005, 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 six months ended June 30, 2005 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. The income
tax rate is also higher in the first quarter as hotels in non-taxable jurisdictions
typically generate losses and certain equity investments usually produce
losses without tax benefits.
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, 2004 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, 2004 audited
consolidated financial statements, except as discussed below.
Liabilities
and equity
On January
1, 2005, FHR adopted the Canadian Institute of Chartered Accountants' ("CICA")
new accounting requirements on the classification of financial instruments
as liabilities or equity. The CICA amended its disclosure requirements
surrounding the presentation of financial instruments that may be settled
in cash or by an issuer's own equity instruments, at the issuer's discretion,
as liabilities. Adoption of this new standard did not have an impact on
the Company's financial statements.
Determining
whether an arrangement contains a lease In 2004, the Emerging Issues Committee
issued Abstract 150, "Determining whether an Arrangement Contains a Lease"
("EIC 150"). An entity may enter into certain arrangements comprising a
transaction or a series of related transactions that does not take the
legal form of a lease but conveys a right to use a tangible asset (e.g.,
an item of property, plant or equipment) in return for a payment or series
of payments. The Company is required to adopt the recommendations of EIC
150 for affected transactions commencing December 9, 2004. Adoption of
this new standard did not have an impact on the Company's financial statements.
3. In May 2005, FHR invested
$10.0 in cash for five management
contracts,
a loan and an approximate 15% interest in a corporation with Kingdom Hotels
Investments and IFA Hotels & Resorts. The corporation holds an ownership
interest in five Kenyan properties known as The Norfolk Hotel, Mount Kenya
Safari Club, The Aberdare Country Club, The Ark and the Mara Safari Club.
The properties are being managed by Fairmont under long-term management
contracts. Based on the relative fair value of the management contracts,
the investment interest and the loan, $4.6 of the $10.0 was allocated to
the management contracts. The investment of $4.2 is accounted for using
the equity method due to significant influence through contractual arrangements.
$1.2 was allocated to the loan which has a face value of $5.0, bears no
interest and is payable in 2020.
4. In January 2005, FHR entered
into a long-term contract to manage The
Savoy in London,
England. In 2004, FHR agreed to commit approximately $63.0 to obtain the
management contract and provide loans to the hotel's owners. As at June
30, 2005, FHR had funded $54.3 of the total commitment, of which $22.8
related to the management contract, and $31.5 related to a loan receivable,
due in 2015 and bearing interest at 7.75%.
5. During the quarter ended
June 30, 2005, the Company reached a
favorable
tax settlement with the Canada Revenue Agency and recorded a $14.6 recovery
of current income taxes. In the third quarter, the Company expects to record
an additional recovery.
6. Shareholders' equity
June 30, December 31,
2005
2004
------------ ------------
Common shares
$ 1,135.3 $ 1,163.1
Other equity
19.2
19.2
Treasury Stock
-
(5.6)
Contributed
surplus
142.7
142.4
Foreign currency
translation adjustments 135.0
142.1
Retained earnings
179.0
189.2
------------ ------------
$ 1,611.2 $ 1,650.4
------------ ------------
The diluted
weighted-average number of common shares outstanding is calculated as follows:
Three months ended Six months ended
June 30
June 30
2005 2004 2005
2004
-------- -------- -------- --------
(in millions) (in millions)
Weighted-average number
of common
shares outstanding
- basic 75.0
79.1 75.5 79.1
Stock options
1.1 0.8
1.0 0.8
-------- -------- -------- --------
Weighted-average number
of common
shares outstanding
- diluted 76.1
79.9 76.5 79.9
-------- -------- -------- --------
Effective October
24, 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.
During the six months ended June 30, 2005, FHR repurchased 1,849,300 shares
(823,300 during the second quarter). Also, an additional 166,100 shares
that were classified as treasury stock at December 31, 2004, were cancelled
in 2005. Total consideration relating to the repurchase amounted to $60.7
($27.9 for the second quarter), of which $27.9 was charged to common shares
($12.6 for the second quarter) and $32.8 was charged to retained earnings
($15.3 for the second quarter). Of the $5.6 of treasury stock outstanding
at December 31, 2004, $2.6 was reclassified to common shares and $3.0 to
retained earnings in 2005. During the six months ended June 30, 2005,
FHR issued 140,053 shares (66,528 for the second quarter) pursuant to the
Key Employee Stock Option Plan for which $2.8 was credited to common shares
($1.4 for the second quarter) for proceeds from options exercised. At June
30, 2005, 74,518,001 common shares were outstanding (December 31, 2004
- 76,393,348).
During the
six months ended June 30, 2005, 300,000 stock options were granted (nil
in the second quarter), and the cost of this stock-based compensation was
recorded based on the estimated fair value of these options. 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 Six months ended
June 30
June 30
2005 2004 2005
2004
-------- -------- -------- --------
Reported net
income
$ 34.1 $ 29.0 $ 30.1
$ 28.4
Net income
assuming fair
value
method used
$ 34.0 $ 28.9 $ 29.9
$ 28.2
Assuming fair
value method used
Basic earnings
per share $ 0.45
$ 0.37 $ 0.40 $ 0.36
Diluted earnings
per share $ 0.45 $ 0.36
$ 0.39 $ 0.35
7. Changes in non-cash working
capital:
Three months ended Six months ended
June 30
June 30
2005 2004 2005
2004
-------- -------- -------- --------
Decrease (increase)
in current
assets
Accounts receivable
$ (29.4) $ (25.9) $ (18.5) $ (25.2)
Inventory
(0.9) (0.9)
- (1.3)
Prepaid expenses
and other (7.4)
(8.9) (6.2) (7.9)
Increase (decrease)
in current
liabilities
Accounts payable
and accrued
liabilities
17.5 (9.6) 21.2
(1.9)
Taxes payable
(0.4) -
(3.9) -
-------- -------- -------- --------
$ (20.6) $ (45.3) $ (7.4) $ (36.3)
-------- -------- -------- --------
8. Segmented Information
FHR has five
reportable segments in two core business activities, ownership and management
operations. The segments are hotel ownership, investment in Legacy, real
estate activities, Fairmont and Delta. Results of individual properties
have been aggregated into their respective reportable segments. Hotel ownership
consists of real estate interests ranging from approximately 15% to 100%
in 28 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 consist primarily of two
undeveloped land blocks in Toronto and Vancouver and a vacation ownership
product. Fairmont is an international 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 by management primarily on earnings before
interest, taxes and amortization ("EBITDA"), which management defines as
income before interest, income taxes, other expenses and amortization.
EBITDA includes income or loss from equity investments. Corporate general
and administrative expenses, 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 June 30, 2005
Ownership
Management
----------------------------- ----------------
Hotel Real
estate
Ownership Legacy activities Fairmont Delta
--------- -------- ---------- --------- ------
Operating revenues
(d) $ 177.5 $ - $
2.0 $ 16.1 $ 3.4
Other revenues
from
managed
and franchised
properties
- -
- 9.1 2.5
Income from
equity
investments
1.0 1.1
- -
-
EBITDA (b)
42.3 1.1 (0.4)
12.5 2.3
Total assets
(c) 1,809.1
63.3 102.1 452.2
78.4
Capital expenditures
9.3 -
- 4.3
-
Corporate
general and Inter-segment
administrative elimination (a) Total
--------------- -------------- --------
Operating revenues
(d) $ -
$ (4.9) $ 194.1
Other revenues
from
managed
and franchised
properties
- -
11.6
--------
205.7
Income from
equity
investments
- 2.1
EBITDA (b)
(7.7) 0.4
50.5
Total assets
(c)
- (59.7)
2,445.4
Capital expenditures
- -
13.6
Three months ended June 30, 2004
Ownership
Management
----------------------------- ----------------
Hotel Real
estate
Ownership Legacy activities Fairmont Delta
--------- -------- ---------- --------- ------
Operating revenues
(d) $ 180.6 $ - $
18.1 $ 13.7 $ 3.6
Other revenues
from
managed
and franchised
properties
- -
- 6.2 2.7
Income from
equity
investments
0.9 2.8
- -
-
EBITDA (b)
46.6 2.8 8.3
10.8 2.6
Total assets
(c) 1,925.2
96.9 95.9 363.6
73.2
Capital expenditures
23.9 -
- 0.3
-
Corporate
general and Inter-segment
administrative elimination (a) Total
--------------- -------------- --------
Operating revenues
(d) $ -
$ (5.7) $ 210.3
Other revenues
from
managed
and franchised
properties
- -
8.9
--------
219.2
Income from
equity
investments
- -
3.7
EBITDA (b)
(8.4) (0.2)
62.5
Total assets
(c)
- (21.1)
2,533.7
Capital expenditures
- -
24.2
Six months ended June 30, 2005
Ownership
Management
----------------------------- ----------------
Hotel Real
estate
Ownership Legacy activities Fairmont Delta
--------- -------- ---------- --------- ------
Operating revenues
(d) $ 326.2 $ - $
9.5 $ 30.9 $ 6.1
Other revenues
from
managed
and franchised
properties
- -
- 16.8 5.4
Income (loss)
from equity
investments
2.1 (5.9) -
- -
EBITDA (b)
69.2 (5.9) 0.7
22.7 3.9
Total assets
(c) 1,809.1
63.3 102.1 452.2
78.4
Capital expenditures
34.7 -
- 5.5
-
Corporate
general and Inter-segment
administrative elimination (a) Total
--------------- -------------- --------
Operating revenues
(d) $ -
$ (9.9) $ 362.8
Other revenues
from
managed
and franchised
properties
- -
22.2
--------
385.0
Income (loss)
from equity
investments
- -
(3.8)
EBITDA (b)
(18.3) 0.4
72.7
Total assets
(c)
- (59.7)
2,445.4
Capital expenditures
- -
40.2
Six months ended June 30, 2004
Ownership
Management
----------------------------- ----------------
Hotel Real
estate
Ownership Legacy activities Fairmont Delta
--------- -------- ---------- --------- ------
Operating revenues
(d) $ 336.0 $ - $
21.4 $ 26.2 $ 6.1
Other revenues
from
managed
and franchised
properties
- -
- 12.7 5.1
Income (loss)
from equity
investments
0.5 (4.5) -
- -
EBITDA (b)
81.8 (4.5) 8.2
19.5 4.1
Total assets
(c) 1,925.2
96.9 95.9 363.6
73.2
Capital expenditures
43.5 -
- 0.5
-
Corporate
general and Inter-segment
administrative elimination (a) Total
--------------- -------------- --------
Operating revenues
(d) $ -
$ (11.2) $ 378.5
Other revenues
from
managed
and franchised
properties
- -
17.8
--------
396.3
Income (loss)
from equity
investments
- -
(4.0)
EBITDA (b)
(12.1) (0.4)
96.6
Total assets
(c)
- (21.1)
2,533.7
Capital expenditures
- -
44.0
(a) Operating
revenues include management fees that are charged by Fairmont of $4.8 (2004
- $5.6) and $9.7 (2004 - $11.1) for the three and six months ended June
30, 2005 respectively, and Delta of $0.1 (2004 - $0.1) and $0.2 (2004 -
$0.1) for the three and six months ended June 30, 2005 respectively, to
the hotel ownership operations, which are eliminated on consolidation.
EBITDA includes expenses not reimbursed relating to marketing and reservation
services performed by FHR under the terms of its hotel management and franchise
agreements. Total assets have been reduced for the elimination of inter-segment
loans net of corporate assets.
(b) A reconciliation
of aggregate EBITDA of the reportable segments to net income is as follows:
Three months ended Six months ended
June 30
June 30
2005 2004 2005
2004
-------- -------- -------- --------
EBITDA
$ 50.5 $ 62.5 $ 72.7
$ 96.6
Less: Other
3.3 -
3.3 -
Amortization
16.4 18.0 32.9
37.5
-------- -------- -------- --------
Operating income
30.8 44.5 36.5
59.1
Interest expense,
net
6.0 9.0
13.2 19.0
Income tax
expense (recovery) (9.3)
6.5 (6.8) 11.7
-------- -------- -------- --------
Net income
$ 34.1 $ 29.0 $ 30.1
$ 28.4
-------- -------- -------- --------
(c) Hotel ownership
assets include $93.9 (2004 - $63.6) of investments accounted for using
the equity method.
(d) A breakdown
of the Company's hotel ownership operations revenues are as follows:
Three months ended Six months ended
June 30
June 30
2005 2004 2005
2004
-------- -------- -------- --------
Rooms revenue
$ 89.3 $ 98.4 $ 169.6 $
186.7
Food and beverage
revenue 64.0
59.4 113.8 108.0
Other
24.2 22.8 42.8
41.3
-------- -------- -------- --------
$ 177.5 $ 180.6 $ 326.2 $ 336.0
-------- -------- -------- --------
9. FHR recorded pension and other
post employment benefit expenses as
follows:
Three months ended Six months ended
June 30
June 30
2005 2004 2005
2004
-------- -------- -------- --------
Pension
$ 0.5 $ 0.5 $
0.9 $ 1.0
Other post-employment
benefits 0.1
0.1 0.2
0.2
-------- -------- -------- --------
$ 0.6 $ 0.6 $
1.1 $ 1.2
-------- -------- -------- --------
10. During the second quarter, the
Company undertook certain development
activities
related to a major portfolio acquisition, which the Company did not complete.
As a result, $3.3 has been expensed relating to the costs that were incurred
for this activity.
11. Certain of the prior period figures
have been reclassified to conform
with the presentation
adopted for 2005.
12. Subsequent event
On July 14,
2005, FHR disposed of a parcel of land in Vancouver for net proceeds and
an after-tax gain of approximately $17.
(xx) Index of supplementary financial and operating
information to follow (xx)
Fairmont Hotels & Resorts Inc.
Index
of Supplementary Financial and Operating Information
Page
Comparable operating statistics for
the three and six
months ended June 30, 2005
ii
2004 hotel ownership revenues and EBITDA
adjusted for assets
sales
iii
2005 portfolio seasonality information
iv
Comparable operating statistics for
hotel portfolio as of
June 30, 2005
v
Summary of hotel portfolio at June
30, 2005 and 2004
vi
Fairmont Hotels & Resorts
Inc.
Comparable operating statistics for
the three and six months ended
June 30, 2005
Three months ended
Six months ended
June 30
June 30
2005 2004 Variance
2005 2004 Variance
OWNED HOTELS
Worldwide
14 properties/
6,746 rooms
RevPAR
121.88 116.37 4.7%
125.12 116.51 7.4%
ADR
192.43 184.22 4.5%
197.30 186.65 5.7%
Occupancy
63.3% 63.2%
0.1 63.4% 62.4%
1.0
points
points
Canada
7 properties/
3,336 rooms
RevPAR
112.21 106.23 5.6%
106.73 100.08 6.6%
ADR
170.27 156.93 8.5%
168.42 155.72 8.2%
Occupancy
65.9% 67.7% (1.8)
63.4% 64.3% (0.9)
points
points
U.S. and
International
7 properties/
3,410 rooms
RevPAR
131.34 126.12 4.1%
143.10 132.22 8.2%
ADR
215.92 214.43 0.7%
225.50 218.00 3.4%
Occupancy
60.8% 58.8%
2.0 63.5% 60.7%
2.8
points
points
FAIRMONT MANAGED HOTELS(1)
Worldwide
40 hotels/
19,843 rooms
RevPAR
128.03 118.24 8.3%
122.58 111.81 9.6%
ADR
188.35 175.47 7.3%
189.88 174.41 8.9%
Occupancy
68.0% 67.4%
0.6 64.6% 64.1%
0.5
points
points
Canada
20 properties/
10,095 rooms
RevPAR
108.17 101.20 6.9%
95.17 88.29 7.8%
ADR
158.57 146.22 8.4%
152.91 139.05 10.0%
Occupancy
68.2% 69.2% (1.0)
62.2% 63.5% (1.3)
points
points
U.S. and
International
20 properties/
9,945 rooms
RevPAR
148.23 135.48 9.4%
150.29 135.44 11.0%
ADR
218.87 206.75 5.9%
224.65 209.26 7.4%
Occupancy
67.7% 65.5%
2.2 66.9% 64.7%
2.2
points
points
DELTA MANAGED HOTELS(1)
Worldwide
27 properties/
8,175 rooms
RevPAR
74.18 65.43 13.4%
66.80 59.70 11.9%
ADR
105.74 96.40 9.7%
103.38 94.58 9.3%
Occupancy
70.2% 67.9%
2.3 64.6% 63.1%
1.5
points
points
(1) Includes hotels owned by
Fairmont Hotels & Resorts Inc.
Comparable hotels and resorts are considered
to be properties that were wholly-owned by or 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 Kea Lani Maui
(sold July 2004), The Fairmont Glitter Bay (sold July 2004)
Fairmont Managed: The Fairmont
Southampton; The Fairmont Monte Carlo,
The Savoy, A Fairmont Hotel, The Norfolk Hotel, Mount
Kenya Safari Club, The Aberdare Country Club, The Ark,
Mara Safari Club, The Fairmont Glitter Bay
Delta Managed:
Delta Meadowvale, Delta Kitchener and Delta franchised
hotels
Fairmont Hotels & Resorts Inc.
2004 hotel ownership revenues and
EBITDA adjusted for assets sales
2004
First Second Third
Fourth
Revenues
Quarter Quarter Quarter Quarter
Year
(In millions of US
-------- -------- -------- -------- --------
dollars)
Hotel ownership revenues
adjusted for
sold hotels
$ 131.1 $ 157.1 $ 176.8 $ 137.8
$ 602.8
Add: hotels sold
24.3 23.4
3.6 -
51.3
Hotel ownership
revenues
$ 155.4 $ 180.5 $ 180.4 $ 137.8
$ 654.1
2004
First Second Third
Fourth
EBITDA
Quarter Quarter Quarter Quarter
Year
(In millions of US
-------- -------- -------- -------- --------
dollars)
Hotel ownership EBITDA
adjusted for
sold hotels
$ 25.4 $ 37.9 $ 54.2
$ 22.6 $ 140.1
Add: hotels sold
9.8 8.7
1.5 -
20.0
Hotel ownership EBITDA
35.2 46.6 55.7
22.6 160.1
EBITDA contribution
(deduction) from
other segments
(1.1) 15.9
7.8 (1.7) 20.9
Total EBITDA
34.1 62.5 63.5
20.9 181.0
Deduct (Add):
Amortization
19.5 18.0 16.8
19.6 73.9
Interest expense, net
10.0 9.0
6.7 7.4
33.1
Gain on sales of
investments and
hotels sales
- - (144.2)
0.5 (143.7)
Income tax expense
(recovery), net
5.2 6.5
52.4 (2.2) 61.9
Net Income (loss)
$ (0.6) $ 29.0 $ 131.8 $
(4.4) $ 155.8
Fairmont Hotels & Resorts Inc.
2005 portfolio seasonality information
First Second Third
Fourth
2005 quarterly EBITDA(1) Quarter
Quarter Quarter Quarter
Year
range guidance
-------- -------- -------- -------- --------
Mid-point of range for
hotel operations
(excludes gain on
land sale)
13% 29%
41% 17%
$175
million(2)
Tax rate(3)
(excludes tax recovery
and gain on land sale)
- 21%
24% 38%
27%
Notes:
(1) Given the seasonality of FHR's
portfolio, the information above provides insight into the estimated quarterly
breakdown of FHR's earnings.
(2) This amount represents the mid-point
of the range which may fluctuate +/-$10 million of the mid-point.
(3) The tax rate will be dependent
upon the geographical source of earnings in any one quarter. Quarterly
tax rates vary significantly throughout the year due to the seasonality
of FHR's earnings and differing tax rates in various jurisdictions. In
the first quarter, FHR's hotels in non-taxable jurisdictions typically
generate losses and equity investments usually produce non-taxable losses.
This results in an unusual income tax rate in the first quarter.
Assumptions:
- The estimates above are based
on the current portfolio and do not anticipate any acquisitions or dispositions.
- An exchange rate of C$1.25/U.S.$1.00
has been assumed for the year.
- Readers should note that the
above information is qualified by the forward-looking statement outlined
in the Company's public filings.
Fairmont Hotels & Resorts Inc.
Operating statistics for comparable
hotels as of June 30, 2005
First First Second
Third Fourth 2004
Quarter Quarter Quarter Quarter
Quarter Full
2005 2004 2004
2004 2004 Year
OWNED HOTELS
Worldwide
RevPAR
$128.41 $116.64 $116.37 $138.53
$102.88 $118.63
ADR
202.22 189.14 184.22
207.65 180.19 190.85
Occupancy
63.5% 61.7% 63.2%
66.7% 57.1% 62.2%
Canada
RevPAR
$101.18 $ 93.86 $106.23 $173.78
$ 84.76 $114.93
ADR
166.38 154.37 156.93
220.81 149.14 174.01
Occupancy
60.8% 60.8% 67.7%
78.7% 56.8% 66.0%
U.S. &
International
RevPAR
$154.99 $138.33 $126.12 $104.03
$120.60 $122.21
ADR
234.41 221.35 214.43
189.21 210.25 209.27
Occupancy
66.1% 62.5% 58.8%
55.0% 57.4% 58.4%
FAIRMONT MANAGED HOTELS(1)
Worldwide
RevPAR
$117.03 $105.32 $118.24 $128.74
$106.02 $114.64
ADR
191.61 173.22 175.47
189.00 177.85 179.14
Occupancy
61.1% 60.8% 67.4%
68.1% 59.6% 64.0%
Canada
RevPAR
$ 81.84 $ 75.18 $101.20 $137.64
$ 85.61 $100.18
ADR
145.86 130.30 146.22
184.41 144.21 153.43
Occupancy
56.1% 57.7% 69.2%
74.6% 59.4% 65.3%
U.S. &
International
RevPAR
$152.37 $135.40 $135.48 $119.62
$126.67 $129.26
ADR
230.63 211.83 206.75
194.72 211.58 206.24
Occupancy
66.1% 63.9% 65.5%
61.4% 59.9% 62.7%
DELTA MANAGED HOTELS (1)
Worldwide
RevPAR
$ 59.30 $ 53.98 $ 65.43 $ 77.25
$ 60.95 $ 64.43
ADR
100.53 92.47 96.40
103.51 100.52 98.53
Occupancy
59.0% 58.4% 67.9%
74.6% 60.6% 65.4%
(1) Includes hotels owned by Fairmont
Hotels & Resorts Inc.
Comparable hotels and resorts are considered
to be properties that were wholly-owned by or 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 Kea Lani Maui
(sold July 2004); The Fairmont Glitter Bay (sold July 2004)
Fairmont Managed: The Fairmont
Southampton; The Fairmont Monte Carlo,
The Savoy, A Fairmont Hotel, The Norfolk Hotel, Mount
Kenya Safari Club, The Aberdare Country Club, The Ark,
Mara Safari Club; The Fairmont Glitter Bay
Delta Managed:
Delta Meadowvale, Delta Kitchener and Delta franchised
hotels
Fairmont Hotels & Resorts Inc.
Summary of Hotel Portfolios
June 30
2005 2004
OWNED HOTELS
Worldwide
No. of Properties
15 17
No. of Rooms
7,339 7,861
Canada
No. of Properties
7 7
No. of Rooms
3,336 3,336
U.S. and International
No. of Properties
8 10
No. of Rooms
4,003 4,525
FAIRMONT MANAGED HOTELS (1)
Worldwide
No. of Properties
49 44
No. of Rooms
22,081 21,643
Canada
No. of Properties
21 21
No. of Rooms
10,418 10,422
U.S. and International
No. of Properties
28 23
No. of Rooms
11,663 11,221
DELTA MANAGED HOTELS(1)
Worldwide
No. of Properties
38 38
No. of Rooms
11,243 11,451
(1) Includes hotels owned by Fairmont
Hotels & Resorts Inc.
|
