La Quinta Corporation
Schedule A
Financial Results
(Unaudited)
Three months ended Nine months ended
Operating Data:
September 30,
September 30,
(In millions, except
2005 2004
2005 2004
per share data)
Revenues
Hotel operations
$192.5 $147.5
$540.2 $406.3
Franchise fees
9.2 4.9
23.5 11.6
Other
2.8 2.7
8.1 9.5
Total revenues
204.5 155.1
571.8 427.4
Expenses
Direct lodging
operations
85.0 67.3
243.5 189.4
Other lodging and
operating expenses
25.6 19.9
73.5 56.4
Selling, general and
administrative
17.0 13.8
59.3 45.6
Interest, net of
interest income of
$2.5, $2.0, $4.3,
and $7.9, respectively
16.0 15.9
52.1 46.2
Depreciation and
amortization
35.3 32.8
105.5 91.4
Impairment of property
and equipment
-
- -
12.7
Loss on early
extinguishment of debt
- 21.4
- 21.4
Other (income) expense
(3.0) (1.1)
(0.3) (1.8)
Total expenses
175.9 170.0
533.6 461.3
Income (loss) before
minority interest,
income taxes, and
discontinued
operations
28.6 (14.9)
38.2 (33.9)
Minority interest
(4.5) (4.5)
(13.7) (13.7)
Income tax (expense)
benefit
(10.6) 7.3
(11.6) 16.3
Income (loss) before
discontinued operations
13.5 (12.1)
12.9 (31.3)
Income from discontinued
operations, net of taxes
0.2
- 1.2
0.1
Net income (loss)
$13.7 $(12.1)
$14.1 $(31.2)
Per Share Data:
Income (loss) before
discontinued operations
$0.07 $(0.07)
$0.07 $(0.18)
Income from discontinued
operations, net
of taxes
-
- -
-
Net income (loss) per
share - basic and
assuming dilution
$0.07 $(0.07)
$0.07 $(0.18)
Weighted average shares
outstanding
Basic
199.4 176.7
188.4 176.5
Assuming dilution
203.1 176.7
192.1 176.5
Prior period results have been reclassified
to conform to current period
presentation.
La Quinta Corporation
Schedule B
Other (Income) Expense
(Unaudited)
Three months ended Nine months ended
September 30, September 30,
(In millions)
2005 2004
2005 2004
(Gain) loss on sale
of assets and related
costs(1)
$(3.6) $(0.1) $(3.4)
$0.1
Gain on early repayment
of notes receivable
- (2.1)
- (2.1)
Gain on settlement (2)
- -
- (0.4)
Acquisition, retirement
plan and other (3)
0.6 1.1
3.1 0.6
Total other (income)
expense
$(3.0) $(1.1) $(0.3)
$(1.8)
(1) This caption includes sales of
hotels, restaurants and other property
as well as
the accumulation of costs to sell assets held for sale in
continuing
operations. During the three months ended September 30,
2005, we sold
three hotels for gross proceeds of approximately $9.4
million, resulting
in a gain on sale of approximately $3.7 million.
These hotels
are not included in discontinued operations because it is
probable that
these hotels will be operated by the buyers as Baymont
franchises,
which we believe would constitute significant continuing
involvement
in the operations of the hotel and, therefore,
presentation
as discontinued operations is not appropriate.
(2) During the nine months ended September
30, 2004, the Company settled
obligations
related to assets previously sold that resulted in a net
gain of $0.4
million.
(3) During the three and nine months
ended September 30, 2005, the Company
recognized
expense of approximately $0.6 million and $3.1 million,
respectively,
consisting of approximately $0.2 million and $2.7
million primarily
related to integration costs related to the Baymont
acquisition
and approximately $0.4 million during each period for fees
related to
abandoned transaction costs.
During the three and nine months ended September 30,
2004, the Company recognized expense of approximately $1.7 million and
$1.9 million, consisting of approximately $1.5 million during each period
for integration costs related to the Baymont acquisition and $0.2 million
and $0.4 million, respectively, related to the termination and ongoing
settlement of the La Quinta retirement plan. These expenses were partially
offset by income of approximately $0.6 million and $1.3 million, respectively,
primarily as a result of settlement of litigation related to the healthcare
business, adjustments of amounts previously accrued related to the exit
of the healthcare business and refunds of public company filing fees.
La Quinta Corporation
Schedule C
Supplemental Non-GAAP Financial Data
(Unaudited)
Three months ended Nine months ended
Adjusted EBITDA
September 30, September
30,
Reconciliation
2005 2004
2005 2004
(In millions)
Net income (loss)
(per GAAP)
$13.7 $(12.1)
$14.1 $(31.2)
Add:
Depreciation and
amortization(4)
35.3 32.8
105.5 91.4
Impairment of property
and equipment
- -
- 12.7
Loss on early
extinguishment of debt
- 21.4
- 21.4
Minority interest
4.5 4.5
13.7 13.7
Income tax expense
(benefit)
10.6 (7.3)
11.6 (16.3)
Interest, net of interest
income of $2.5, $2.0,
$4.3, and $7.9,
respectively
16.0 15.9
52.1 46.2
Other (income)
expense (1)
(3.0) (1.1)
(0.3) (1.8)
Income from discontinued
operations, net of
taxes (2)
(0.2) -
(1.2) (0.1)
Adjusted EBITDA (3,4)
(Non-GAAP)
$76.9 $54.1
$195.5 $136.0
(1) See attached Schedule B for details.
(2) Income from discontinued operations
includes nine hotels during the
three months
ended September 30, 2005, 11 hotels during the nine
months ended
September 30, 2005, and 11 hotels during each of the
three and
nine months ended September 30, 2004. The separately
identifiable
results of operations of the hotels have been reported as
results from
discontinued operations for all periods presented.
(3) Includes approximately $1.0 million
and $2.7 million of stock-based
compensation
(primarily amortization of restricted stock) during the
three and
nine months ended September 30, 2005, respectively, and $0.5
million and
$1.8 million during the three and nine months ended
September
30, 2004, respectively.
(4) During the three months ended September
30, 2005, we recognized
approximately
$1.7 million of hurricane related charges, net of
estimated
property insurance recovery, related to damage from the two
hurricanes,
of which approximately $0.9 million of repairs is included
in other lodging
and operating expenses and $0.8 million of casualty
losses is
included in depreciation and amortization.
During the three months ended September 30, 2004, we
recorded casualty loss expense, net of estimated property insurance recovery,
of approximately $1.7 million, included in depreciation and amortization,
related to property damage as a result of the hurricanes in the State of
Florida during 2004. During 2005, we reduced a portion of the previously
recorded casualty loss expense as a result of insurance recoveries by approximately
$0.8 million.
Adjusted EBITDA Reconciliation (Current
Outlook)
(In millions)
Three months Full Year Preliminary Full
ended 2005
Year 2006
December 31,
2005
Net income (loss) (per GAAP)
$(4) $10
$15 - $18
Add:
Depreciation and amortization
38 144
155
Minority interest
5 18
19
Income tax expense (benefit)
(3) 9
9 - 11
Interest, net
16 68
67
Income from discontinued
operations, net of taxes
- (2)
-
Adjusted EBITDA (Non-GAAP)
$52 $247
$265 - $270
La Quinta Corporation
Schedule D
Other Supplemental Information
(Unaudited)
Three months ended Nine months ended
Capital Expenditures
September 30, September
30,
(In millions)
2005 2004
2005 2004
Capital expenditures
$25.0 $16.4
$51.2 $45.2
Selected Balance Sheet Data
September 30, December 31,
(In millions)
2005 2004
(Audited)
Property and equipment, net
$2,368.1 $2,434.0
Cash and cash equivalents (A)
212.6 103.3
Total assets
2,875.6 2,810.9
Total indebtedness (B)
809.6 925.6
Total liabilities
1,095.0 1,217.3
Minority interest ©
203.7 203.9
Total shareholders' equity (D)
1,576.9 1,389.7
Net debt to total capitalization
Equal to (B-A)/(D+A+B-A)
25% 34%
Debt Maturity Schedule
(In millions)
Calendar Year
September 30, 2005
2005
$ -
2006
20.0
2007
210.0
2008
50.0
2009
-
2010 and thereafter
529.6
Total debt
809.6
Less: Cash and cash equivalents
(212.6)
Net debt
$597.0
La
Quinta Corporation
Schedule E
Lodging Operating Statistics
(Unaudited)
Three months Three
months
ended
ended
September 30, September
30,
2005
2004
Occ ADR RevPAR Occ
ADR RevPAR
Comparable Owned
Hotels (1)
La Quinta Inns
72.0% $61.23 $44.06 69.2% $57.16
$39.55
La Quinta Inn
& Suites
74.4% $71.11 $52.90 72.9% $66.19
$48.28
Composite(La Quinta
comparable owned)
72.7% $64.22 $46.67 70.3% $59.92
$42.13
Baymont Inn
& Suites(2)
N/A N/A N/A
N/A N/A
N/A
Total Comparable
Owned Hotels
72.7% $64.22 $46.67 70.3% $59.92
$42.13
Total Company Owned
Hotels(4)
La Quinta Inns
71.9% $61.01 $43.85 69.1% $56.83
$39.28
La Quinta Inn
& Suites
74.2% $72.50 $53.79 72.9% $66.48
$48.49
Composite (La
Quinta owned)
72.6% $64.58 $46.87 70.2% $59.78
$41.99
Baymont Inn &
Suites(2,3)
70.6% $57.40 $40.51 65.8% $53.67
$35.32
Total Company
Owned Hotels(4,5)
72.1% $63.50 $45.77 69.9% $59.45
$41.55
System Wide Hotels(6)
La Quinta Inns
71.2% $63.37 $45.13 68.8% $57.61
$39.65
La Quinta Inn
& Suites
74.8% $74.71 $55.85 73.0% $68.83
$50.23
Composite(La Quinta
system wide)
72.4% $67.39 $48.81 70.2% $61.42
$43.10
Baymont Inn &
Suites(2,3)
67.6% $61.05 $41.28 63.3% $58.12
$36.78
Nine months
Nine months
ended
ended
September 30, September
30,
2005
2004
Occ ADR RevPAR Occ
ADR RevPAR
Comparable Owned
Hotels (1)
La Quinta Inns
68.0% $59.93 $40.73 66.9% $56.16
$37.57
La Quinta Inn
& Suites
74.3% $71.85 $53.35 72.7% $66.22
$48.14
Composite (La Quinta
comparable owned)
69.8% $63.67 $44.46 68.6% $59.31
$40.69
Baymont Inn
& Suites(2)
N/A N/A N/A
N/A N/A
N/A
Total Comparable
Owned Hotels
69.8% $63.67 $44.46 68.6% $59.31
$40.69
Total Company
Owned Hotels(4)
La Quinta Inns
67.9% $59.61 $40.48 66.8% $55.79
$37.28
La Quinta Inn
& Suites
73.9% $73.07 $53.98 72.7% $66.56
$48.40
Composite (La
Quinta owned)
69.7% $63.92 $44.56 68.5% $59.13
$40.53
Baymont Inn
& Suites(2,3)
65.7% $55.95 $36.77 65.0% $53.04
$34.47
Total Company
Owned Hotels(4,5)
68.8% $62.70 $43.11 68.4% $58.99
$40.37
System Wide
Hotels(6)
La Quinta Inns
67.3% $61.33 $41.24 65.9% $56.35
$37.11
La Quinta Inn
& Suites
73.0% $73.80 $53.87 71.4% $67.51
$48.20
Composite (La Quinta
system wide)
69.2% $65.78 $45.52 67.6% $60.15
$40.68
Baymont Inn &
Suites(2,3)
62.4% $59.38 $37.06 63.0% $57.38
$36.15
Change
Occ ADR
RevPAR
Comparable Owned Hotels (1)
La Quinta Inns
2.8 pts 7.1%
11.4%
La Quinta Inn & Suites
1.5 pts 7.4%
9.6%
Composite(La Quinta
comparable owned)
2.4 pts 7.2%
10.8%
Baymont Inn & Suites(2)
N/A
N/A N/A
Total Comparable Owned
Hotels
2.4 pts 7.2%
10.8%
Total Company Owned Hotels(4)
La Quinta Inns
2.8 pts 7.4%
11.6%
La Quinta Inn & Suites
1.3 pts 9.1%
10.9%
Composite (La
Quinta owned)
2.4 pts 8.0%
11.6%
Baymont Inn & Suites(2,3)
N/A
N/A N/A
Total Company Owned
Hotels(4,5)
2.2 pts 6.8%
10.2%
System Wide Hotels(6)
La Quinta Inns
2.4 pts 10.0%
13.8%
La Quinta Inn & Suites
1.8 pts 8.5%
11.2%
Composite(La Quinta
system wide)
2.2 pts 9.7%
13.2%
Baymont Inn & Suites(2,3)
N/A
N/A N/A
Change
Occ ADR
RevPAR
Comparable Owned Hotels (1)
La Quinta Inns
1.1 pts 6.7%
8.4%
La Quinta Inn & Suites
1.6 pts 8.5%
10.8%
Composite (La Quinta
comparable owned)
1.2 pts 7.4%
9.3%
Baymont Inn & Suites(2)
N/A
N/A N/A
Total Comparable Owned
Hotels
1.2 pts 7.4%
9.3%
Total Company Owned Hotels(4)
La Quinta Inns
1.1 pts 6.8%
8.6%
La Quinta Inn & Suites
1.2 pts 9.8%
11.5%
Composite (La Quinta
owned)
1.2 pts 8.1%
9.9%
Baymont Inn & Suites(2,3)
N/A
N/A N/A
Total Company Owned
Hotels(4,5)
0.4 pts 6.3%
6.8%
System Wide Hotels(6)
La Quinta Inns
1.4 pts 8.8%
11.1%
La Quinta Inn & Suites
1.6 pts 9.3%
11.8%
Composite (La Quinta
system wide)
1.6 pts 9.4%
11.9%
Baymont Inn & Suites(2,3)
N/A
N/A N/A
(1) Excludes hotels undergoing redevelopment
or brand conversions, as well
as hotels
reported in discontinued operations and one New Orleans
hotel that
was severely damaged on August 29, 2005 by Hurricane
Katrina and
is yet to be determined whether it is feasible to ever
return to
service.
(2) Represents statistics for Baymont
Inn & Suites acquired on September
3, 2004.
(3) "N/A" for change is due to abbreviated
period for 2004 data.
(4) Excludes hotels reported in discontinued
operations and one New
Orleans hotel
that was severely damaged on August 29, 2005 by
Hurricane
Katrina and is yet to be determined whether it is feasible
to ever return
to service.
(5) Includes statistics for seven
Woodfield Suites and one Budgetel
property acquired
on September 3, 2004 and two of the hotels acquired
on December
9, 2004.
(6) Includes all company owned, franchised,
and managed hotels, but
excludes hotels
reported in discontinued operations and one New
Orleans hotel
that was severely damaged on August 29, 2005 by
Hurricane
Katrina and is yet to be determined whether it is feasible
to ever return
to service.
La Quinta Corporation
Schedule F
Hotel Unit Data
(Unaudited)
La Quinta Corporation
Schedule F
Hotel Unit Data
(Unaudited)
Hotel and Room Count Data
As of
As of
September 30, 2005 September 30, 2004
Number Number Number
Number
of Hotels of Rooms of Hotels of Rooms
Comparable Hotels (1)
La Quinta Inns
185 24,019
185 24,046
La Quinta Inn & Suites
75 10,067
75 10,067
Baymont Inn & Suites(2)
- -
- -
Total Comparable Hotels
260 34,086
260 34,113
Company-Owned (3)
La Quinta Inns
186 24,117
190 24,641
La Quinta Inn & Suites
78 10,651
77 10,293
Baymont Inn & Suites(2)
85 8,792
85 8,787
Other(4)
10 1,241
8 972
Total Company Owned Hotels
359 44,801
360 44,693
Franchised/Managed Hotels
La Quinta Inns
72 6,112
56 5,462
La Quinta Inn & Suites
67 5,331
53 4,272
Baymont Inn & Suites(2)
106 9,239
88 7,535
Total Franchised/Managed Hotels
245 20,682
197 17,269
Total System Wide Hotels(5)
604 65,483
557 61,962
(1) Excludes hotels undergoing redevelopment
or brand conversions, as well
as hotels
reported in discontinued operations and one New Orleans
hotel that
was severely damaged on August 29, 2005 by Hurricane
Katrina and
is yet to be determined whether it is feasible to ever
return to
service.
(2) Represents statistics for Baymont
Inn & Suites acquired on
September
3, 2004.
(3) Excludes hotels reported in discontinued
operations and one
New Orleans
hotel that was severely damaged on August 29, 2005 by
Hurricane
Katrina and is yet to be determined whether it is feasible
to ever return
to service.
(4) Represents statistics for seven
Woodfield Suites and one Budgetel
property acquired
on September 3, 2004 and two of the hotels acquired
on December
9, 2004.
(5) Includes all company owned, franchised,
and managed hotels, but
excludes hotels
reported in discontinued operations and one
New Orleans
hotel that was severely damaged on August 29, 2005 by
Hurricane
Katrina and is yet to be determined whether it is feasible
to ever return
to service.
Historical Data of Baymont
La Quinta Corporation acquired substantially all of the
assets of The Marcus Corporation's limited service lodging division on
September 3, 2004. The Marcus Corporation has provided us with a limited
amount of unaudited historical operating data for the acquired properties
related to certain periods prior to the acquisition by La Quinta Corporation.
We have recompiled comparable property and reporting period results for
Baymont from this internal, unaudited data. This data has not been audited
or otherwise independently verified by the Company or its independent auditors,
although the Company has no reason to believe that this data is not accurate
in any material respect. As a result, we will only be disclosing approximate
RevPAR changes for Baymont through the quarter ending September 30, 2005.
Beginning with the quarter ending December 31, 2005, we will be able to
disclose more detailed comparable operating data for Baymont.
Statement Concerning Non-GAAP Measurement Tools
The Company uses Adjusted EBITDA as a supplemental measure
of the Company's performance because we believe it gives the reader a more
complete understanding of our financial condition and operating results.
We use this metric to calculate various financial ratios and to measure
our performance, and we believe some debt and equity investors also utilize
this metric for similar purposes. Adjusted EBITDA includes adjustments
for non-cash income or expenses such as depreciation, amortization and
other non-cash items. Adjusted EBITDA is also adjusted for discontinued
operations, income taxes, interest expense, net and minority interest (which
includes preferred stock dividends of La Quinta Properties, Inc.), as well
as certain cash income or expense that we believe otherwise distorts the
comparability of the measure. Adjusted EBITDA is intended to show unleveraged,
pre-tax operating results. The impact of investing and financing transactions,
as well as income taxes, should also be considered in evaluating overall
results. Adjusted EBITDA is not intended to represent any measure of performance
in accordance with accounting principles generally accepted in the United
States ("GAAP") and our calculation and use of this measure may differ
from our competitors. This non-GAAP measure should not be used in isolation
or as a substitute for a measure of performance or liquidity prepared in
accordance with GAAP. A detailed schedule reconciling GAAP net income (loss)
to Adjusted EBITDA is included in the attached supplemental tables. |