TORONTO, Feb. 24, 2006 - Fairmont Hotels & Resorts Inc. ("FHR"
or the "Company") (TSX/NYSE: FHR) today announced its financial results
for the three months and year ended December 31, 2005. These financial
results have been prepared in accordance with Canadian generally accepted
accounting principles. All amounts are expressed in U.S. dollars.
Fourth Quarter 2005 Highlights
- Diluted income per share ("diluted EPS")
for the fourth quarter was
$0.88 compared to a diluted loss
per share of $0.06 for the same
period in 2004. Excluding the
effect of hotels sold in 2004 and 2005,
gains on asset sales, a tax recovery
and other non-operating items,
diluted EPS rose to $0.12 from
a diluted loss per share of $0.05 in
the fourth quarter of 2004.
- Revenues increased 40.9% to $232.4 million.
Excluding the effect on
revenues of hotels sold in 2004
and 2005 and the proceeds from land
sales, revenues were up 16.8%.
- Revenue per available room(1) ("RevPAR")
for the comparable(2)
Fairmont managed portfolio improved
11.8% driven by RevPAR growth of
15.4% at the comparable U.S. and
International managed portfolios.
- EBITDA(3) for the fourth quarter was $116.2
million compared to
$20.4 million for the same period
in 2004. Fourth quarter EBITDA
included a gain on asset sales
of $122.9 million in 2005 and a loss of
$0.5 million in 2004. As a result
of the sale of The Fairmont Orchid,
Hawaii on December 23, EBITDA
and Adjusted EBITDA in the fourth
quarter were $2.0 million lower
than previously expected due to lost
real estate earnings from the
resort during the holiday season.
- Adjusted EBITDA(3) for the fourth quarter
of 2005 was $31.6 million
compared to $34.2 million for
the same period in 2004. Adjusted EBITDA
increased 9.9% when excluding
the impact of the hotels sold in 2004
and 2005 and The Fairmont Southampton,
which was closed for hurricane
repairs during the first quarter
of 2004 and therefore was excluded
from FHR's comparable portfolio.
- FHR sold its real estate interest in The
Fairmont Orchid for a gain of
$105.8 million while maintaining
a long-term management contract.
- The Company entered into six agreements for
hotel and/or residential
developments, all opening between
2007 and 2009.
- FHR completed the sale of two blocks of land
in Toronto's Southtown
for gross proceeds of $42.8 million.
- The Company announced an Acquisition Agreement
with Kingdom Hotels
International and Colony Capital
for all of FHR's outstanding common
shares at a price of $45.00 per
share in cash (see Announcements and
Corporate Activities).
"Our U.S. properties continue to benefit from the robust U.S. lodging
fundamentals. In the fourth quarter, our comparable U.S. managed and owned
portfolios experienced RevPAR growth of 15.0% and 9.6%, respectively, primarily
driven by strong occupancy gains across all markets," said William R. Fatt,
FHR's Chief Executive Officer. "Our International portfolio also had significant
gains, with RevPAR at the managed and owned portfolios up 17.0% and 11.3%,
respectively."
"Looking ahead to 2006, we expect current industry trends to continue
with ongoing strength in our U.S. and International properties. As our
Canadian portfolio earns such a significant portion of its annual earnings
in the third quarter, it is too early to provide details on performance,"
said Mr. Fatt. "Going forward, we remain focused on enhancing the performance
of our portfolio, building on the success of our brand and expanding into
new key city center and resort destinations. We are excited about the opportunity
to combine the Fairmont and Raffles portfolios to create a global luxury
hotel leader. These two brands are an excellent strategic fit with rich
histories, global brand recognition and complementary destinations."
Three months ended
Year ended
Revenues
December 31
December 31
(In millions of U.S. dollars) 2005
2004 2005
2004
---- ----
---- ----
Reported Revenues
$ 232.4 $ 164.9 $
857.5 $ 768.7
Less:
Amounts attributable
to hotels sold
13.3 14.0
63.9 106.5
Proceeds from sale of
undeveloped land
42.8 -
60.7 15.4
----------------------------------------------
Revenues adjusted for
hotels sold and land
sales
$ 176.3 $ 150.9 $
732.9 $ 646.8
----------------------------------------------
Three months ended
Year ended
Diluted income
December 31
December 31
(loss) per share
2005 2004
2005 2004
---- ----
---- ----
Diluted income (loss)
per share
$ 0.88 $ (0.06) $
2.16 $ 1.92
Less:
Amounts attributable to
hotels sold
(0.01) 0.00
(0.02) 0.10
Gains on asset sales
0.98 0.01
1.17 1.29
Other non-operating items(i) (0.24)
- (0.40)
-
Tax recovery
- -
0.49 -
----------------------------------------------
Diluted income (loss) per
share adjusted for hotels
sold, gains on asset
sales, tax recovery
and other non-operating
items
$ 0.12 $ (0.05) $
0.87 $ 0.45
----------------------------------------------
(i) 2005 results include a number
of non-operating items: transactions
costs
(Q2); a legal provision (Q3); restructuring and lease
termination
costs (Q4); one-time pension costs (Q4); advisory fees
relating
to a strategic review undertaken by the Board of
Directors
(Q4); and a provision related to an impairment of
long-term
advances receivable (Q4).
(ii) Totals may not add due to rounding
and the exclusion of any
anti-dilutive
impact.
Fourth Quarter Ownership Operations
The Company's hotel ownership results are affected by the seasonal nature
of the assets owned. The table below presents, by quarter, the comparable
hotel ownership EBITDA contribution by region.
-------------------------------------------------------------------------
Interna-
2005
Canada U.S.
tional
-------------------------------------------------------------------------
First quarter
21% 35%
44%
-------------------------------------------------------------------------
Second quarter
50% 31%
19%
-------------------------------------------------------------------------
Third quarter
88% 6%
6%
-------------------------------------------------------------------------
Fourth quarter
14% 46%
40%
-------------------------------------------------------------------------
Full-year
53% 24%
23%
-------------------------------------------------------------------------
Comparable owned hotels revenues:
--------------------------------
-------------------------------------------------------------------------
Comparable revenues
Canada U.S. International
Total
-------------------------------------------------------------------------
Increase from fourth
quarter 2004
4.6% 16.7%
14.5% 10.8%
-------------------------------------------------------------------------
- Canadian Owned Hotels: Revenues for the Canadian
owned hotels were
impacted by the 3.8% appreciation
of the Canadian dollar against the
U.S. dollar when compared to the
fourth quarter of 2004. The balance
of the increase was primarily
driven by The Fairmont Chateau Lake
Louise, which experienced revenue
growth of 9.3% and a 10.2%
improvement in RevPAR.
- U.S. Owned Hotels: This portfolio's revenue
improvements were largely
driven by The Fairmont Scottsdale
Princess, which enjoyed RevPAR
growth of 14.3%.
- International Owned Hotels: Increased revenues
for the International
owned portfolio was the result
of double-digit RevPAR growth at all
properties in this portfolio.
In Mexico, The Fairmont Acapulco
Princess and The Fairmont Pierre
Marques experienced RevPAR increases
of 11.2% and 11.7%, respectively.
Comparable owned hotels operating statistics:
--------------------------------------------
-------------------------------------------------------------------------
Increase (decrease)
from fourth
quarter 2004
Canada U.S. International
Total
-------------------------------------------------------------------------
RevPAR
6.7% 9.6%
11.3% 8.8%
-------------------------------------------------------------------------
Average daily rate ("ADR")
5.8% (3.5%)
4.2% 3.8%
-------------------------------------------------------------------------
Occupancy
0.5 8.5
3.7 2.8
points points
points points
-------------------------------------------------------------------------
- Canadian Owned Hotels: The improvement in
ADR is primarily a result of
the appreciation of the Canadian
dollar. Adjusting for the
appreciation of the Canadian dollar,
RevPAR for this portfolio was up
2.6%.
- U.S. Owned Hotels: Solid occupancy growth
continued to be the driver
for the U.S. owned portfolio as
a result of increased leisure and
group demand.
- International Owned Hotels: The International
owned portfolio's
performance was primarily impacted
by a considerable increase in
leisure demand in Acapulco compared
to the same quarter last year.
Comparable owned hotels EBITDA(3):
----------------------------------
-------------------------------------------------------------------------
Comparable EBITDA
Canada U.S. International
Total
-------------------------------------------------------------------------
Increase (decrease)
from fourth quarter 2004
(42.1%) 31.2%
(0.2%) (2.1%)
-------------------------------------------------------------------------
- Canadian Owned Hotels: EBITDA for the Canadian
owned hotels decreased
$2.4 million to $3.3 million as
a result of recent restructuring costs
across the portfolio and fewer
U.S. leisure travelers over the holiday
period. Excluding the restructuring
costs, EBITDA was down
approximately $2 million or 35%.
- U.S. Owned Hotels: EBITDA for this portfolio,
which excludes
The Fairmont Orchid, was up $2.0
million to $8.4 million in the fourth
quarter. The Fairmont Scottsdale
Princess reported significant EBITDA
growth as a result of a 10.1 percentage
point occupancy improvement.
- International Owned Hotels: EBITDA was essentially
flat for this
portfolio as all of these properties
incurred restructuring costs in
the quarter. Excluding these costs,
EBITDA increased about
$1.9 million or 26%.
Comparable owned hotels EBITDA margin:
--------------------------------------
-------------------------------------------------------------------------
Comparable EBITDA
margin
Canada U.S. International
Total
-------------------------------------------------------------------------
Increase (decrease)
from fourth quarter 2004
(560bp) 270bp
(320bp) (220bp)
-------------------------------------------------------------------------
- Canadian Owned Hotels: EBITDA margins for
the Canadian owned hotels
decreased relative to the fourth
quarter of 2004 due to softness in
American leisure business as well
as restructuring costs incurred
during the quarter. Both of these
factors had a considerable impact
given that the fourth quarter
is not a significant earnings period for
the Canadian portfolio. Excluding
the restructuring costs, the EBITDA
margin was down 480 basis points.
- U.S. Owned Hotels: Solid revenue growth
of 16.7% was the key driver of
EBITDA margin improvement for
this portfolio.
- International Owned Hotels: Like the Canadian
portfolio, the
International owned assets experienced
a decline in EBITDA margins as
a result of restructuring costs
during the fourth quarter of 2005.
Excluding these costs, margins
increased by 240 basis points.
Real estate activities: Real estate activities in the fourth quarter
produced revenues of $49.4 million and a $16.9 million contribution to
EBITDA. This was generated primarily by two land sales in Toronto, which
yielded net proceeds and after-tax gains of $17.1 million. Real estate
activities for the same period in 2004, primarily from Fairmont Heritage
Place, generated $4.8 million in revenues and a $1.6 million loss to EBITDA.
Fourth Quarter Management Operations
-------------------------------------------------------------------------
Increase from fourth quarter 2004
Fairmont Delta
-------------------------------------------------------------------------
Revenues under management
5.7% 7.5%
-------------------------------------------------------------------------
Management fee revenues
42.4% 18.8%
-------------------------------------------------------------------------
Comparable worldwide RevPAR
11.8% 13.3%
-------------------------------------------------------------------------
Comparable worldwide ADR
6.8% 7.8%
-------------------------------------------------------------------------
Comparable worldwide Occupancy
2.8 points 3.1 points
-------------------------------------------------------------------------
Fairmont Management Operations
- Revenues under management of $448 million
increased 5.7% over 2004.
The addition of The Savoy, A Fairmont
Hotel, Fairmont Monte Carlo,
Fairmont Newport Beach, five hotels
in Kenya and improved operating
results at the U.S. hotels, all
contributed to this increase.
- Management fee revenues were up 42.4% to
$20.5 million, as a number of
annual incentive thresholds were
surpassed during the quarter.
- EBITDA margin of 46.8% was down from 64.6%
in the prior year primarily
due to higher incentive compensation
costs as a result of the
Company's higher share price in
the fourth quarter of 2005.
- For the Fairmont comparable managed portfolio,
RevPAR increased 11.8%
to $118.70. The comparable International
managed portfolio experienced
solid RevPAR growth of 17.0%,
driven by a 15.3% improvement in ADR.
The comparable U.S. managed hotels
also showed strong growth with
RevPAR up 15.0%, resulting from
a 4.2% increase in ADR combined with
an occupancy gain of 6.2 percentage
points. The comparable Canadian
managed portfolio reported a 6.9%
RevPAR improvement, driven primarily
by an increase in ADR of 5.2%.
Adjusting for the appreciation of the
Canadian dollar, RevPAR for the
Canadian portfolio was up 2.8% for the
quarter.
Delta Management Operations
- Delta's revenues under management increased
7.5% to $108 million,
primarily due to improved operating
results and the appreciation of
the Canadian dollar.
- Management fee revenues for the fourth quarter
were $3.8 million
compared to $3.2 million for the
same period in 2004. This 21.4%
increase in management fee revenues
relates primarily to a number of
properties exceeding their annual
incentive fee thresholds in the
fourth quarter.
- RevPAR increased 13.3% over the fourth quarter
of 2004 resulting from
a 7.8% increase in ADR and a 3.1
percentage point improvement in
occupancy. Adjusting for the appreciation
of the Canadian dollar,
RevPAR was up approximately 8.9%.
General and Administrative Expenses
General and administrative expenses for the quarter were $14.7 million
compared to $9.2 million for the same period in 2004. Increased incentive
compensation costs as a result of the Company's higher share price and
one-time pension plan costs were the primary drivers.
Year-end Consolidated Results
For the year ended December 31, 2005, EBITDA was $264.8 million compared
to $324.7 million for the same period in 2004. EBITDA for both periods
includes gains on asset sales of $140.8 million and $152.6 million, respectively.
Adjusted EBITDA was $203.1 million compared to $216.0 million for the same
period in 2004. Excluding the three hotels sold and The Fairmont Southampton,
which was closed for hurricane repairs during the first quarter of 2004,
Adjusted EBITDA increased 4.6% to $185.4 million.
Net income for the year was $167.5 million (diluted EPS of $2.16), compared
to the prior year's net income of $155.8 million (diluted EPS of $1.92).
Excluding the impact of hotels sold, gains on asset sales, other non- operating
items and the tax recovery, diluted EPS increased 93% to $0.87 from $0.45.
Announcements and Corporate Activities
On December 9, 2005, Icahn Partners LP and Icahn Partners Master Fund
LP commenced a formal unsolicited partial takeover bid for approximately
41% of the outstanding common shares of the Company at a price of $40.00
per share. On December 22, 2005, Fairmont's Board of Directors issued its
Circular recommending that the Icahn offer be rejected, as it was not in
the best interest of its shareholders. At the same time, the Board of Directors
disclosed that it was actively exploring strategic alternatives to maximize
value for shareholders, which might include a possible transaction with
one or more third parties.
On January 30, 2006, Fairmont announced that it had entered into an
Acquisition Agreement with a Canadian company owned by Kingdom Hotels International
and Colony Capital, which is expected to acquire all of Fairmont's outstanding
common shares at a price of $45.00 per share in cash. The total value of
this transaction, including debt is $3.9 billion. The transaction was unanimously
approved by Fairmont's Board of Directors following receipt of the recommendation
of a Special Committee of the Board. Fairmont's Board has agreed to recommend
to its shareholders that they vote in favor of the transaction.
The closing of the transaction, which is expected to occur in May, is
not subject to any financing condition. The closing is subject to certain
other customary conditions, including regulatory approvals. The proposed
transaction is expected to close in the second quarter of 2006, shortly
after receipt of shareholder and court approvals. The transaction is to
be carried out by way of a statutory plan of arrangement and, accordingly,
will be subject to the approval of 66 2/3% of the votes cast by Fairmont's
shareholders at a meeting of shareholders scheduled for April 18, 2006
as well as court approval.
Fairmont has been advised by Kingdom and Colony of their intention to
combine the Fairmont and Raffles portfolios following the completion of
the transaction, transforming the companies into a global luxury hotel
leader with 120 hotels in 24 countries. Fairmont will continue as a hotel
management company headquartered in Canada and Raffles, based in Singapore,
will also retain its separate brand identity. Raffles owns and manages
a portfolio of 33 properties located primarily across Asia and Europe,
including its flagship property built in 1887, the Raffles Hotel, Singapore.
New Developments
The Company has entered into an agreement to manage a mixed-use luxury
development in the Turks & Caicos Islands to be branded the "Fairmont
Three Cays". The project will include 300 guestroom units, several Fairmont
branded residential developments including Fairmont Heritage Place, a Willow
Stream spa and a championship golf course, all of which will be managed
by FHR. The Company will make an investment for a 19.9% equity interest
in the resort when the property opens in 2009.
We announced an agreement to manage a luxury mixed-use property within
Tamarack Resort, an all-season mountain destination located 90 miles north
of Boise, Idaho. When the property opens in 2008, it will include a 225-room
condo hotel, a spa and several residential components.
The Company has entered into an agreement to manage a mixed-use project
located in South Africa's province of KwaZulu-Natal. Projected to open
in 2009, the development will include a luxury resort, a championship golf
course, a spa and vacation ownership products.
We announced an agreement to manage Fairmont's first branded luxury
condominium development. The 129 residences will be built in southern California
on a 20-acre site in the exclusive community of Indian Wells and are expected
to open in late 2007.
We announced that the Company had entered into an agreement to once
again manage The Plaza in New York City when it reopens in 2007. The Plaza
is currently undergoing an extensive $350 million renovation, which will
include 282 guestroom units. The restored Plaza will also contain elegant
residential condominiums and high-end retail space.
The Company has entered into a joint venture to develop and manage its
first urban private residence club in San Francisco's historic Ghirardelli
Square. As part of the agreement, FHR will make a minority equity investment
in the development, which is expected to open in mid-2007.
Dispositions
We sold The Fairmont Orchid, Hawaii to Westbrook Partners for gross
proceeds of $250 million and continue to manage the resort under a long-term
management contract. The Company realized a pre-tax gain of $105.8 million
on the sale of this property, which it purchased in December 2002 for $140
million.
The Company completed the sale of two blocks of land in Toronto's Southtown
for gross proceeds of $42.8 million, resulting in an after-tax gain of
approximately $17.1 million.
Other Activities
During the quarter, FHR entered into a mortgage loan for $75.0 million
secured by The Fairmont Scottsdale Princess. The proceeds were used to
repay a $59.9 million mortgage on The Fairmont Copley Plaza, Boston with
the balance to be used for general corporate purposes.
During the quarter, FHR repurchased 450,400 shares under its normal
course issuer bid for a total cost of $14.9 million. During the year, FHR
repurchased 4.4 million shares at a cost of $141.2 million. The Company
ceased purchasing shares under its normal course issuer bid following the
13D filing of Mr. Carl Icahn on November 7, 2005.
1. 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
operating 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:
Owned hotels
------------
- The Fairmont Orchid, Hawaii
(sold December 2005)
- The Fairmont Kea Lani, Maui
(sold July 2004)
- The Fairmont Glitter Bay (sold
July 2004)
- The Fairmont Southampton (reopened
April 2004 after hurricane damage
repairs)
Fairmont Managed Hotels
-----------------------
- The Fairmont Southampton (reopened
April 2004 after hurricane damage
repairs)
- Fairmont Monte Carlo (assumed
management December 2004)
- The Savoy, A Fairmont Hotel
(assumed management January 2005)
- The Plaza (ceased management
April 2005)
- The Norfolk Hotel, Mount Kenya
Safari Club, The Aberdare Country Club,
The Ark and the
Mara Safari Club (assumed management May 2005)
- The Fairmont Glitter Bay (ceased
management June 2005)
- Fairmont Newport Beach (assumed
management July 2005)
- The Fairmont New Orleans (closed
in September 2005 due to hurricane
damage)
Delta Managed Hotels
--------------------
- Delta Meadowvale (assumed
management September 2004)
- Delta franchised properties
3. EBITDA is defined as earnings before
interest, taxes and amortization.
Management considers
EBITDA to be a meaningful indicator of operations
and uses it as the
primary measure to assess the operating performance
of the Company's
business segments. EBITDA provides us with an
understanding of
the Company's operating results before the impact of
investing and financing
transactions and income taxes. It also
facilitates comparisons
between the Company and its competitors.
Management adjusts
EBITDA when evaluating operating performance
because it believes
that the inclusion or exclusion of certain items
such as gains and
losses on asset sales and other non-operating items,
is necessary to
provide a more accurate measure of our core business
operating results.
It is also a means to evaluate period-over-period
results. We adjust
our reported EBITDA, as set forth above, for
certain items and
refer to this measure as Adjusted EBITDA. The
principal adjustments
we make are to eliminate (i) gains and losses
from asset sales;
(ii) amortization, net interest expense and income
taxes in calculating
our earnings from equity investments and (iii)
other non-operating
items.
We have chosen to
provide this information to investors to enable them
to perform more
meaningful comparisons of past, present and future
core business operating
results. Adjusted EBITDA may also be used by
investors and analysts
in their valuation of the Company.
EBITDA and Adjusted
EBITDA are not defined measures of operating
performance under
Canadian GAAP. It is likely that FHR's calculations
of EBITDA and Adjusted
EBITDA are different than the calculations used
by others.
The table below provides a reconciliation of Adjusted
EBITDA and EBITDA to net income:
-------------------------------------------------------------------------
Three months ended
Year ended
December 30
December 31
-------------------------------------------------------------------------
(In millions of dollars)
2005 2004
2005 2004
-------------------------------------------------------------------------
Net income (loss)
$ 68.4 $ (4.4)
$ 167.5 $ 155.8
Add (Deduct):
Interest expense, net
3.2 7.4
22.4 33.1
Income tax expense
(recovery)
24.2 (2.2)
4.4 61.9
Amortization
20.4 19.6
70.5 73.9
-------------------------------------------------------------------------
EBITDA
116.2 20.4
264.8 324.7
Add (Deduct):
(Gains) losses on asset
sales
(122.9) 0.5
(140.8) (152.6)
Proportional amortization,
interest expense and
income taxes included
in the results of equity
investments
10.2 11.0
36.9 41.4
Stock appreciation rights
(0.4) 2.3
(0.9) 2.5
Other non-operating items(1)
28.5 -
43.1 -
-------------------------------------------------------------------------
Adjusted EBITDA
$ 31.6 $ 34.2
$ 203.1 $ 216.0
-------------------------------------------------------------------------
(1) Other non-operating items
include:
Fourth quarter - expenses relating
to financial and legal advisory fees
related to services provided to the
Special Committee and Board of
Directors during the review of shareholder
value-creating strategic
options; restructuring and lease termination
costs; a one-time pension
plan cost; and a provision related
to an impairment of long-term advances
receivable.
Third quarter - a legal provision
associated with a predecessor company
of Fairmont.
Second quarter - advisory and other
expenses related to a major portfolio
acquisition that FHR did not complete.
Fairmont Hotels & Resorts Inc.
Consolidated Balance Sheets
(Stated in millions of U.S. dollars)
ASSETS
December 31 December 31
2005 2004
(Unaudited)
----------- -----------
Current assets
Cash and cash equivalents
$ 279.2 $ 99.1
Accounts receivable
91.7 90.2
Inventory
13.7 15.5
Prepaid expenses and other
14.6 11.2
----------- -----------
399.2 216.0
Investments in partnerships and
corporations (note 4)
155.1 160.7
Non-hotel real estate (note 7)
100.2 100.3
Property and equipment (note 3)
1,308.8 1,435.5
Goodwill
164.8 162.8
Intangible assets (notes 4, 5 and 8)
284.8 245.0
Other assets and deferred charges
(notes 4 and 5)
111.0 82.3
----------- -----------
$ 2,523.9 $ 2,402.6
----------- -----------
----------- -----------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued
liabilities $
156.6 $ 127.9
Income taxes payable (note
3)
57.8 31.3
Dividends payable
4.3 4.6
Current portion of long-term
debt
2.8 4.1
----------- -----------
221.5 167.9
Long-term debt (note 15)
388.4 398.0
Other liabilities
123.5 95.7
Future income taxes
99.5 90.6
----------- -----------
832.9 752.2
----------- -----------
Shareholders' Equity (note 9)
1,691.0 1,650.4
----------- -----------
$ 2,523.9 $ 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
Year ended
December 31
December 31
2005 2004
2005 2004
---------- ---------- ---------- ----------
Revenues
Hotel ownership
operations (note
11(d)) $ 150.8 $ 137.8
$ 670.2 $ 654.1
Management operations
19.7 13.2
62.0 46.3
Real estate activities
(note 7)
49.4 4.8
78.2 31.0
---------- ---------- ---------- ----------
219.9 155.8
810.4 731.4
Other revenues from managed
and franchised properties
12.5 9.1
47.1 37.3
---------- ---------- ---------- ----------
232.4 164.9
857.5 768.7
Expenses
Hotel ownership operations
128.7 110.8
509.3 474.8
Management operations
11.8 6.3
26.3 19.4
Real estate activities
32.5 6.4
44.9 25.2
General and administrative
14.7 9.2
36.8 29.6
Other (notes 13 and 14)
19.6 -
34.1 -
Amortization
20.4 19.6
70.5 73.9
---------- ---------- ---------- ----------
227.7 152.3
721.9 622.9
Other expenses from managed
and franchised properties
12.9 9.9
47.1 38.5
---------- ---------- ---------- ----------
240.6 162.2
769.0 661.4
Loss from equity investments
and other
(1.8) (1.4)
- (0.2)
---------- ---------- ---------- ----------
Operating (loss) income
(10.0) 1.3
88.5 107.1
Interest expense, net
3.2 7.4
22.4 33.1
(Gain) loss on sales of
investments and hotel
assets
(105.8) 0.5
(105.8) (143.7)
---------- ---------- ---------- ----------
Income (loss) before income
tax expense (recovery)
92.6 (6.6)
171.9 217.7
Income tax expense (recovery)
Current (note 6)
53.8 4.4
(4.2) 54.4
Future
(29.6) (6.6)
8.6 7.5
---------- ---------- ---------- ----------
24.2 (2.2)
4.4 61.9
Net income (loss)
$ 68.4 $ (4.4) $
167.5 $ 155.8
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Weighted average number of
common shares outstanding
(in millions) (note 9)
Basic
72.2 76.8
74.3 78.4
Diluted
80.5 85.0
82.5 86.4
Basic earnings (loss)
per common share
$ 0.95 $ (0.06) $
2.25 $ 1.99
Diluted earnings (loss)
per common share
$ 0.88 $ (0.06) $
2.16 $ 1.92
Fairmont Hotels & Resorts Inc.
Consolidated Statements of Cash Flows
(Stated in millions of U.S. dollars)
(Unaudited)
Three months ended
Year ended
December 31
December 31
2005 2004
2005 2004
---------- ---------- ---------- ----------
Cash provided by (used in)
Operating activities
Net income (loss)
$ 68.4 $ (4.4) $
167.5 $ 155.8
Items not affecting cash
Amortization of property
and equipment
19.7 18.7
68.0 70.8
Amortization of
intangible assets
0.7 0.9
2.5 3.1
Loss from equity
investments
1.8 1.4
- 0.2
Future income taxes
(29.6) (6.6)
8.6 7.5
Unrealized foreign
exchange loss (gain)
0.8 (16.9)
(6.8) (20.0)
(Gain) loss on sales of
investments and
hotel
assets
(105.8) 0.5
(105.8) (143.7)
Other
21.2 (1.9)
23.4 5.9
Distributions from
investments
2.7 2.9
8.1 7.1
Changes in non-hotel real
estate
19.2 2.0
16.7 1.6
Changes in non-cash working
capital items (note 10)
100.4 (33.6)
54.6 (17.9)
---------- ---------- ---------- ----------
99.5 (37.0)
236.8 70.4
---------- ---------- ---------- ----------
Investing activities
Additions to property and
equipment
(20.1) (16.1)
(71.5) (74.3)
Proceeds from sale of
property and equipment
- -
8.8 -
Investments in partnerships
and corporations
- (29.7)
(11.2) (34.6)
Sales of investments and
hotel assets
245.6 (0.9)
248.6 442.7
Collection of loans
receivable
- 15.2
- 24.2
Issuance of loans receivable
(0.4) -
(33.5) (7.0)
Acquisitions of intangible
assets
(0.3) (3.2)
(32.3) (3.2)
---------- ---------- ---------- ----------
224.8 (34.7)
108.9 347.8
---------- ---------- ---------- ----------
Financing activities
Issuance of long-term debt
75.0 33.2
179.5 115.9
Repayment of long-term debt
(195.1) (1.1)
(200.9) (380.6)
Issuance of common shares
3.7 2.0
6.6 2.9
Repurchase of common shares
(14.9) (32.7) (141.2)
(84.5)
Dividends paid
- -
(9.1) (6.4)
---------- ---------- ---------- ----------
(131.3) 1.4
(165.1) (352.7)
---------- ---------- ---------- ----------
Effect of foreign exchange
rate changes on cash and
cash equivalents
- 1.6
(0.5) 1.9
---------- ---------- ---------- ----------
Increase (decrease) in cash
and cash equivalents
193.0 (68.7)
180.1 67.4
Cash and cash equivalents -
beginning of period
86.2 167.8
99.1 31.7
---------- ---------- ---------- ----------
Cash and cash equivalents -
end of period
$ 279.2 $ 99.1 $
279.2 $ 99.1
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Fairmont Hotels & Resorts Inc.
Consolidated Statements of Retained Earnings
(Stated in millions of U.S. dollars)
(Unaudited)
Three months ended
Year ended
December 31
December 31
2005 2004
2005 2004
---------- ---------- ---------- ----------
Balance - Beginning
of period
$ 213.5 $ 214.7 $
189.2 $ 78.1
Net income (loss)
68.4 (4.4)
167.5 155.8
---------- ---------- ---------- ----------
281.9 210.3
356.7 233.9
Repurchase of common
shares (note 9)
(8.1) (16.5)
(78.4) (36.9)
Dividend
(4.3) (4.6)
(8.8) (7.8)
---------- ---------- ---------- ----------
Balance - End of period
$ 269.5 $ 189.2 $
269.5 $ 189.2
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
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About Fairmont Hotels & Resorts Inc.
FHR is a leading owner/operator of luxury hotels and resorts. FHR's
managed portfolio consists of 87 luxury and first-class properties with
approximately 34,000 guestrooms in the United States, Canada, Mexico, Bermuda,
Barbados, United Kingdom, Monaco, Kenya and the United Arab Emirates as
well as two vacation ownership properties managed by Fairmont Heritage
Place. FHR owns Fairmont Hotels Inc., North America's largest luxury hotel
management company, as measured by rooms under management, with 49 distinctive
city center and resort hotels including The Fairmont San Francisco, The
Fairmont Banff Springs and The Fairmont Scottsdale Princess. FHR also owns
Delta Hotels, Canada's largest first-class hotel management company, which
manages and franchises 38 city center and resort properties in Canada.
In addition to hotel management, FHR holds real estate interests in 21
properties and an approximate 24% investment interest in Legacy Hotels
Real Estate Investment Trust, which owns 24 properties. FHR owns FHP Management
Company LLC, a private residence club management company that operates
Fairmont Heritage Place, a vacation ownership business.
This news release contains certain forward-looking statements relating,
but not limited to, FHR's operations, anticipated financial performance,
business prospects and strategies.
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