ARLINGTON, Va., Feb. 22, 2006 - Interstate Hotels & Resorts (NYSE:
IHR), the nation's largest independent hotel management company, today
reported strong operating results for the fourth quarter and year ended
December 31, 2005. The company's quarterly results exceeded its earnings
guidance for the fourth consecutive quarter. A summary of the company's
robust performance for the fourth quarter and full year include the following
(in millions, except per share amounts):
4th Qtr. 4th Qtr. Full Year
Full Year
2005 2004
2005 2004
---- ----
---- ----
Total revenue (1)
$66.7 $54.0
$222.5 $188.9
Net income (loss)
$7.2 $1.0
$12.9 $(5.7)
Diluted earnings (loss)
per share
$0.23 $0.03
$0.42 $(0.19)
Adjusted EBITDA (2)
$18.0 $12.5
$37.1 $27.9
Adjusted net income (2)
$9.7 $7.5
$13.8 $9.3
Adjusted diluted EPS (2) $0.31
$0.24 $0.45
$0.30
(1) Total revenue excludes other revenue
from managed properties
(reimbursable
costs).
(2) Adjusted EBITDA, Adjusted net income,
and Adjusted diluted EPS are
non-GAAP financial
measures and should not be considered as an
alternative
to any measures of operating results under GAAP. See the
discussion
included in the non-GAAP financial measures section of this
press release.
Additional highlights include:
-- Record earnings with base
management fees of $56.4 million, an
increase of
13.9 percent, and incentive management fees of $14.3
million, an
increase of 40.2 percent for full-year 2005.
-- The purchase of the Hilton
Durham near Duke University in North
Carolina for
$14.1 million in November 2005.
-- The sale of the company's
interest in the Marriott Residence Inn
Houston hotel,
resulting in a gain of $1.1 million in December 2005
and retention
of management of the hotel.
-- The grand opening and management
of the 357-suite Residence Inn New
York Manhattan/Times
Square.
-- For the year, a reduction
of $4.1 million of debt.
-- The settlement of a business
interruption insurance claim in February
2006 for the
hotels affected by Hurricane Charley for $3.2 million,
which will
be recognized as revenue in the first quarter of 2006. |
Fourth-Quarter Results
Same-store(1) revenue per available room (RevPAR) for all managed hotels
in the 2005 fourth quarter increased 11.2 percent to $74.97, which was
2.2 percentage points above the high end of the company's guidance and
2.8 percentage points above the industry average of 8.4 percent, as reported
by Smith Travel Research. Average daily rate (ADR) advanced 8.4 percent
to $112.73, and occupancy increased 2.6 percent to 66.5 percent.
Same-store RevPAR for all full-service managed hotels rose 11.2 percent
to $78.36. ADR improved 8.6 percent to $117.82, with occupancy advancing
2.3 percent to 66.5 percent.
Same-store RevPAR for all select-service managed hotels increased 11.3
percent to $59.09, led by a 7.5 percent gain in ADR to $88.88 and a 3.6
percent improvement in occupancy to 66.5 percent.
"We continued to deliver exceptional hotel operating results for our
owners, significantly exceeding the industry average for both the quarter
and full year," said Thomas F. Hewitt, chief executive officer. "Our operating
efficiencies and economies of scale allowed us to enhance owner profits
by increasing room rates during the quarter and full year while continuing
to carefully control costs. As a result, we earned record-level incentive
fees, which are reported in the fourth quarter, of $14.3 million, up 40.2
percent from $10.2 million in the prior year.
"In addition to achieving outstanding results for our shareholders and
our owners in our hotel management business, we have continued to execute
and remain focused on our growth strategy of selective whole ownership,
joint venture and sliver investments in hotels. We acquired the 195-room
Hilton Durham near Duke University, our second wholly-owned property, during
the fourth quarter," he noted. "While we owned the hotel for only slightly
more than a month in the historically slowest quarter of the year, the
property was modestly accretive to fourth-quarter earnings. We will invest
$2.9 million to upgrade the hotel and look forward to strong returns on
an annualized basis.
"This property is an excellent example of our ability to capitalize
on strategic investments in whole ownership. Because of our knowledge of
this property and the market in which it operates, we believe we can maximize
returns on this hotel by making a smart, limited-capital investment to
reposition it within the market. We will continue to invest in properties
where we believe we can realize significant value for our shareholders."
BridgeStreet Continues Positive Growth
BridgeStreet, the company's corporate housing division, posted solid
results in the 2005 fourth quarter, led by healthy growth in London and
continued robust results in Chicago, Washington, D.C. and New York. "We
have aggressively managed our inventory this past year with an intense
focus on yield management," Hewitt said. "We continue to effectively manage
rate, up 5.4 percent in the 2005 fourth quarter, balanced against maximizing
occupancy, which rose 6.6 percent, with slightly lower inventory levels."
Following the close of the fourth quarter, BridgeStreet expanded its
operations by becoming the exclusive provider of short-term furnished housing
and related services for the entire portfolio of AMLI Residential, a leading
provider of multi-family housing that operates in nine major markets. In
addition, BridgeStreet acquired Chicago-based Twelve Oaks Corporate Housing,
which has approximately 300 units in Chicago. With this acquisition, BridgeStreet
nearly doubled its presence in this core market.
"We continue to look for ways to prudently expand BridgeStreet's brand
through its Global Partners licensing program and the addition of units
in select markets, such as the recent acquisition in Chicago. This spring,
we will add more capacity in London, where we already have a significant
leadership position. BridgeStreet has continued to gain market share within
the corporate housing industry, and we believe BridgeStreet will have additional
strong growth opportunities in 2006," Hewitt noted.
Balance Sheet Strengthened
On December 31, 2005, Interstate had:
-- Total cash of $12.9 million.
-- An increase in wholly-owned hotel assets
of $32.1 million.
-- Total debt of $85.1 million, consisting
of $66.1 million of senior
debt and $19.0 million of
non-recourse mortgage debt.
"We were able to make significant improvements in the strength of our
balance sheet this year," said J. William Richardson, chief financial officer.
"Early in 2005, we successfully refinanced our senior secured credit facility
and increased our capacity to $108 million. During the year, we acquired
two hotels for a net purchase price of $42.5 million and reduced our senior
debt by securing $19.0 million in non-recourse debt. We currently have
more than $30 million available under our credit facility to fund future
growth initiatives. Our balance sheet is the strongest that it has been
in recent years and we are well positioned to take on new opportunities.
During 2006, we will continue to maintain focus on managing our balance
sheet by lowering our overall leverage while increasing our asset base
with selective, high- quality investments.
"I also would like to take this opportunity to welcome Bruce Riggins
as the incoming chief financial officer as I will be stepping down as CFO
and entering retirement from Interstate on April 17, 2006. I believe he
will be a tremendous addition to the company and will help drive the company
to new heights in the years to come."
Outlook and Guidance
"We achieved excellent operating results in 2005 and have a positive
outlook for the hotel and corporate housing industry in 2006," Hewitt noted.
"The economy remains buoyant, business travel has returned to more historical
levels, and leisure travel remains high. Although development activity
is increasing, new supply additions are expected to remain low through
2006.
Industry experts forecast positive growth for the hotel industry for
at least the next several years. At this time, we are optimistic about
the fundamentals of our industry and expect to deliver continued strong
results in 2006 for our shareholders."
The company provides the following guidance for the first-quarter and
full-year 2006:
-- RevPAR, on a same-store basis, is expected
to increase 10.0 to 11.0
percent in the first quarter
and 7.0 to 9.0 percent for the full year;
-- Net income (loss) of $(0.9) million to
$(0.3) million in the first
quarter and $10.4 million
to $11.6 million for the full year;
-- Earnings (loss) per diluted share of $(0.03)
to $(0.01) for the first
quarter and $0.33 to $0.37
for the full year;
-- Adjusted net income of $3.7 million to
$4.3 million in the first
quarter and $14.9 million
to $16.1 million for the full year;
-- Adjusted earnings per diluted share of
$0.12 to $0.14 for the first
quarter and $0.48 to $0.52
for the full year;
-- Adjusted EBITDA of $10.8 million to $11.8
million for the first
quarter and $44 million
to $46 million for the full year.
Included in the first-quarter and full-year guidance are $3.2 million
of proceeds from business interruption insurance related to Hurricane Charley,
as well as one-time termination payments of $4.0 million from MeriStar
Hospitality, related to their recently announced sale of 10 properties.
Included in the first-quarter and full-year net income guidance are $7.6
million of write-offs of intangible assets due to the expected termination
of 16 properties by MeriStar Hospitality in the 2006 first quarter.
Yesterday MeriStar announced that it signed a merger agreement to be
acquired by an affiliate of The Blackstone Group. "We expect our contracts
to remain in place with Blackstone," Hewitt noted. "Interstate has had
a great relationship with Blackstone over the years and we are looking
forward to the opportunity to work with them again."
Interstate Hotels & Resorts, Inc.
Historical Statements of Operations
(Unaudited, In thousands except per share amounts)
Quarter Ended Year Ended
December 31, December 31,
------- ------- --------- -------
2005 2004 2005
2004
------- ------- --------- -------
Lodging
$4,145 $- $12,656
$-
Management
fees
23,304 15,351 49,771 32,765
Management
fees - related
parties
(1)
7,838 7,835 28,102
31,180
Corporate
housing
28,727 27,114 120,519 110,620
Other
2,717 3,706 11,434
14,305
------- ------- -------- -------
66,731 54,006 222,482 188,870
Other revenue from
managed
properties
228,309 187,153 893,760 751,892
------- ------- --------- -------
Total revenue
295,040 241,159 1,116,242 940,762
Operating expenses by department:
Lodging expenses
3,518 -
10,009 -
Corporate
housing
22,945 23,471 96,868 91,592
Undistributed operating expenses:
Administrative
and general 22,258 18,251
79,219 69,950
Depreciation
and amortization 2,311 2,559
9,141 9,199
Restructuring
charges
- 567
2,043 4,048
Asset impairments
and other
write-offs
(2)
2,626 1,130 5,583
8,922
------- ------- -------- -------
53,658 45,978 202,863 183,711
Other expenses from
managed
properties
228,309 187,153 893,760 751,892
------- ------- -------- -------
Total operating expenses 281,967 233,131
1,096,623 935,603
------- ------- -------- -------
OPERATING INCOME
13,073 8,028 19,619
5,159
Interest income
322 204
980 1,005
Interest expense (3)
(2,045) (2,512) (10,263) (8,605)
Equity in earning (loss) of
affiliates
681 (110) 3,492
(1,056)
Gain on sale of marketable
securities and extinguishment
of
debt
(53) -
4,658 -
------- ------- --------- -------
INCOME (LOSS) BEFORE MINORITY
INTEREST AND INCOME TAXES
11,978 5,610 18,486
(3,497)
Income tax (expense) benefit
(4,680) (2,270) (7,327)
994
Minority interests (expense)
benefit
(124) (23) (173)
45
------- ------- --------- -------
INCOME (LOSS) FROM CONTINUING
OPERATIONS
7,174 3,317 10,986
(2,458)
Income (loss) from discontinued
operations, net of tax
(4)
(7) (2,285) 1,891 (3,205)
------- ------- --------- -------
NET INCOME (LOSS)
$7,167 $1,032 $12,877 $(5,663)
======= ======= ========= =======
BASIC EARNINGS (LOSS) PER SHARE:
Continuing operations
$0.23 $0.11 $0.36
$(0.08)
Discontinued operations
- (0.08) 0.06
(0.11)
------- ------- --------- -------
Basic earnings (loss)
per share $0.23 $0.03
$0.42 $(0.19)
======= ======= ========= =======
DILUTED EARNINGS (LOSS) PER SHARE:
Continuing operations
$0.23 $0.11 $0.36
$(0.08)
Discontinued operations
- (0.08) 0.06
(0.11)
------- ------- --------- -------
Diluted earnings
(loss) per share $0.23 $0.03
$0.42 $(0.19)
======= ======= ========= =======
Weighted average shares outstanding
(in thousands):
Basic
30,579 30,446 30,522 30,328
Diluted (5)
30,935 30,764 30,825 30,328
Interstate
Hotels & Resorts, Inc.
Hotel Level Operating Statistics
(Unaudited)
Same-store hotel
Quarter Ended
Year Ended
operating statistics(6):
December 31,
December 31,
----------------------- -----------------------
2005 2004 % change 2005
2004 % change
----------------------- -----------------------
Full-service
hotels:
Occupancy
66.5% 65.0% 2.3% 70.9%
69.5% 2.0%
ADR
$117.82 $108.44 8.6% $115.00 $105.76
8.7%
RevPAR
$78.36 $70.46 11.2% $81.49 $73.50
10.9%
Select-service
hotels:
Occupancy
66.5% 64.2% 3.6% 70.5%
68.6% 2.8%
ADR
$88.88 $82.71 7.5% $87.99
$82.40 6.8%
RevPAR
$59.09 $53.07 11.3% $62.04 $56.51
9.8%
Total:
Occupancy
66.5% 64.8% 2.6% 70.8%
69.3% 2.2%
ADR
$112.73 $103.96 8.4% $110.27 $101.70
8.4%
RevPAR
$74.97 $67.41 11.2% $78.07 $70.52
10.7%
Interstate Hotels & Resorts, Inc.
Reconciliations of Non-GAAP Financial Measures (7)
(Unaudited, in thousands except per share amounts)
Quarter Ended Year Ended
December 31, December 31,
------- ------- ------- -------
2005 2004 2005
2004
------- ------- ------- -------
Net income (loss)
$7,167 $1,032 $12,877 $(5,663)
Adjustments:
Depreciation
and amortization 2,311
2,559 9,141 9,199
Interest expense,
net
1,723 2,308 9,283
7,600
Discontinued
operations, net (4) (58)
(349) 1,417 252
Income tax
expense (benefit) 4,680
2,270 7,327 (994)
------- ------- ------- -------
EBITDA
15,823 7,820 40,045 10,394
Restructuring
charges
- 567 2,043
4,741
Asset impairments
and other write-
offs
(2)
2,626 4,015 5,583 11,807
Gain on sale
of investments and
extinguishment
of debt (8)
113 - (7,203)
-
Equity in
(earnings) losses of
affiliates
(681) 110 (3,492) 1,056
Minority interest
expense
(benefit)
124 23
173 (45)
Other
- -
- (55)
------- ------- ------- -------
Adjusted EBITDA
$18,005 $12,535 $37,149 $27,898
======= ======= ======= =======
Quarter Ended Year Ended
December 31, December 31,
------ ------ ------- -------
2005 2004 2005
2004
------ ------ ------- -------
Net income (loss)
$7,167 $1,032 $12,877 $(5,663)
Adjustments:
Restructuring
charges
- 567 2,043
4,741
Asset impairments
and other
write-offs
(2)
2,626 4,015 5,583 11,807
Gain on sale
of investments and
extinguishment
of debt (8) 113
- (7,203) -
Deferred financing
costs write-
off
(3)
- - 1,847
-
Equity interest
in the gain on
sale
of Hilton San Diego (9) -
- (4,202) -
Equity interest
in the loss on
sale
of Wyndham Milwaukee (10) -
- 395
-
Equity in
the write-off of
deferred
financing costs (11) -
- 295
-
Equity interest
in the gain on
sale
of Residence Inn Houston
(12)
(1,107) - (1,107)
Other
- -
- (55)
Minority interest
16 (59) 39
(149)
Income tax
rate adjustment (13) 899 1,976
3,265 (1,360)
------ ------ ------- -------
Adjusted net income
$9,714 $7,531 $13,832 $9,321
====== ====== ======= =======
Adjusted diluted earnings per
share $0.31 $0.24 $0.45
$0.30
====== ====== ======= =======
Weighted average number of common
shares outstanding (in
thousands):
Diluted (5)
30,935 30,764 30,825 30,647
Interstate Hotels & Resorts, Inc.
Outlook Reconciliation (7), (14)
(Unaudited)
Forecast
-----------------------------
Quarter ending Year ending
March 31, December 31,
2006
2006
-----------------------------
Net income (loss)
$(600) $11,000
Depreciation
and amortization
2,600
10,600
Interest
expense, net
1,800
7,600
Income
tax expense (benefit)
(400)
7,300
----------- ------------
EBITDA
3,400
36,500
Asset impairments
(2)
7,600
7,600
(Gain) Loss on sale
of investment
-
-
Equity investment
adjustment:
-
-
Equity
in (earnings) losses of
affiliates:
200
700
Distributions
received from
equity investments
-
-
Minority interest
expense
(benefit)
100
200
----------- ------------
Adjusted EBITDA
$11,300 $45,000
=========== ============
Net income (loss)
$(600) $11,000
Adjustments to net income (loss):
Asset impairments
and other
write-offs
(2)
7,600
7,600
Income tax
rate adjustment (13)
(3,000) (3,000)
----------- ------------
Adjusted net income
$4,000 $15,600
=========== ============
Adjusted diluted earnings per share
(5) $0.13
$0.50
=========== ============
Interstate Hotels & Resorts, Inc.
Notes to Financial Tables
(Unaudited)
(1) Related parties include MeriStar
Hospitality, the hotels included in
our
real estate joint ventures and a small number of our hotels which
are
affiliated with certain of our directors.
(2) This amount represents losses
recorded for intangible costs
associated
with terminated management contracts and other asset
impairments.
(3) For the year ended 2005,
interest expense includes $1,847 of deferred
financing
fees written off in connection with the refinancing of our
senior
secured credit facility during the first quarter of 2005.
(4) In June 2004, we completed
the disposal of BridgeStreet Canada, Inc.,
our
corporate housing operation in Toronto. In September 2005, we
completed
the sale of the Pittsburgh Airport Residence Inn by
Marriott.
Accordingly, we have presented the operations of
BridgeStreet
Canada, Inc., and the Pittsburgh Airport Residence Inn
by Marriott
as discontinued operations for all periods presented. In
addition,
the calculation of EBITDA reflects the add back of interest
expense,
depreciation and amortization, and income taxes related to
those
discontinued operations.
(5) Our diluted earnings (loss)
per share assumes the issuance of common
stock
for all potentially dilutive common stock equivalents
outstanding.
Potentially dilutive shares include restricted stock
and
stock options granted under our comprehensive stock plan and
operating
partnership units held by minority partners. No effect is
shown
for any securities that are anti-dilutive.
(6) We present certain operating
statistics (i.e. occupancy, RevPAR and
ADR)
for the periods included in this report on a same-store hotel
basis.
We define our same-store hotels as those which (i) are
managed
by us for the entirety of the reporting periods being
compared
or have been managed by us for part of the reporting periods
compared
and we have been able to obtain operating statistics for the
period
of time in which we did not manage the hotel, and (ii) have
not
sustained substantial property damage, business interruption or
undergone
large-scale capital projects during the reporting periods
being
reported. In addition, the operating results of hotels for
which
we no longer managed as of December 31, 2005 are also not
included
in same-store hotel results for the periods presented
herein.
Of the 286 properties that we managed as of December 31,
2005,
264 hotels have been classified as same-store hotels. RevPar
is defined
as revenue per available room. ADR is defined as average
daily
rate.
(7) See discussion of EBITDA,
adjusted EBTIDA, adjusted net income and
adjusted
diluted earnings per share, located in the "Non-GAAP
Financial
Measures" section, described earlier in this press release.
(8) In the first quarter of 2005,
we recognized a gain of $332 from the
exercise
of stock warrants for stock in an unaffiliated company. In
the
third quarter of 2005, we recognized a gain of $4,326 on the
extinguishment
of the remaining principal and accrued interest on a
non-recourse
promissory note and a gain of $2,545 on the sale of the
Pittsburgh
Residence Inn by Marriott (this gain is included in
discontinued
operations on our statement of operations).
(9) This amount is included in
equity in earnings (losses) of affiliates
and
represents our portion of the gain on the sale of the Hilton San
Diego
Gaslamp hotel and related retail space, which was owned by one
of our
joint ventures.
(10) This amount is included in equity
in earnings (losses) of affiliates
and
represents our portion of the loss on sale of the Wyndham
Milwaukee,
which was owned by one of our joint ventures.
(11) This amount is included in equity
in earnings (losses) of affiliates
and
represents our portion of deferred financing costs written off in
connection
with the refinancing of the MIP joint venture's senior
debt.
(12) This amount is included in equity
in earnings (losses) of affiliates
and
represents our portion of the gain on the sale of the Marriott
Residence
Inn Houston, which was owned by one of our joint ventures.
(13) This amount represents adjustments
to recorded income tax expense to
bring
the overall effective tax rate to an effective rate of 28% in
2005
and 40% in 2004. The outlook reconciliation for 2006 assumes a
40%
tax rate. This effective tax rate will differ from the effective
tax
rate reported in our historical statements of operations.
(14) Our outlook reconciliation uses
the mid-point of our estimates. |
(1) Please see footnote 6 to the financial
tables within this press
release for
a detailed explanation of "same-store" hotel operating
statistics.
Interstate will hold a conference call to discuss its
fourth-quarter and year-end results today, February 22, at 9 a.m. Eastern
Standard Time. To hear the webcast, interested parties may visit the company's
Web site at http://www.ihrco.com and click on Investor Relations and then
Fourth-Quarter Conference Call. A replay of the conference call will be
available until midnight on Wednesday, March 22, 2006, by dialing (800)
405-2236, reference number 11051318 and an archived webcast of the conference
call will be posted on the company's Web site through March 22, 2006.
As of January 31, Interstate Hotels & Resorts operated
279 hospitality properties with more than 63,000 rooms in 41 states, the
District of Columbia, Canada, and Russia. BridgeStreet Worldwide, an Interstate
Hotels & Resorts' subsidiary, is one of the world's largest corporate
housing providers. BridgeStreet and its network of Global Partners offer
more than 8,900 corporate apartments located in more than 90 MSAs throughout
the United States and internationally. For more information about Interstate
Hotels & Resorts, visit the company's Web site: http://www.ihrco.com.
Non-GAAP Financial Measures
Included in this press release are certain non-GAAP financial
measures, which are measures of our historical or estimated future performance
that are different from measures calculated and presented in accordance
with GAAP, within the meaning of applicable SEC rules, that we believe
are useful to investors. They are as follows: (i) Earnings before interest
expense, taxes, depreciation and amortization (or "EBITDA") and (ii) Adjusted
EBITDA and Adjusted net income (loss), and Adjusted diluted EPS. The following
discussion defines these terms and presents the reasons we believe they
are useful measures of our performance.
EBITDA
A significant portion of our non-current assets consists
of intangible assets. Of those intangible assets, the costs of our management
contracts are amortized over their expected terms. Because depreciation
and amortization are non-cash items, management and many industry investors
believe the presentation of EBITDA is useful. EBITDA represents consolidated
earnings before interest expense, income taxes, depreciation and amortization.
We believe EBITDA provides useful information to investors regarding our
financial condition and results of operations because EBITDA is useful
for evaluating our performance and our capacity to incur and service debt,
fund capital expenditures and expand our business. Management also uses
EBITDA as one measure in determining the value of acquisitions and dispositions,
and management uses EBITDA and Adjusted EBITDA as part of our annual budget
process. We also believe that the rating agencies and a number of lenders
use EBITDA for those purposes and a number of restrictive covenants related
to our indebtedness use measures similar to EBITDA presented herein.
Adjusted EBITDA, Adjusted Net Income and Adjusted Diluted
EPS
We define Adjusted EBITDA as excluding the effects of
certain charges, transactions and expenses incurred in connection with
events management believes are not reasonably likely to recur or have a
continuing effect on our ongoing operations. Non-recurring items and special
charges include restructuring and severance expenses, asset impairments
and write-offs, equity in earnings (losses) of affiliates, gains and losses
on asset dispositions and other investments, and other non-cash charges.
Similarly, we define Adjusted net income (loss) and Adjusted
diluted EPS as net income (loss) and diluted EPS, without the effects of
those same charges, transactions and expenses described earlier. We believe
that Adjusted EBITDA and Adjusted net income (loss) and Adjusted diluted
EPS are useful performance measures because including these non-recurring
items and special charges may either mask or exaggerate trends in our ongoing
operating performance. Furthermore, performance measures that include non-recurring
items and special charges may not be indicative of the continuing performance
of our underlying business. Therefore, we present Adjusted EBITDA and Adjusted
net income (loss) and Adjusted diluted EPS because they may help investors
to compare our performance before the effect of various items that do not
directly affect our ongoing operating performance.
Limitations on the use of EBITDA, Adjusted EBITDA and
Adjusted Net Income
We calculate EBITDA, Adjusted EBITDA, Adjusted net income,
and Adjusted diluted EPS as we believe they are important measures for
our management and our investors understanding of our operations. These
may not be comparable to measures with similar titles as calculated by
other companies. This information should not be considered as an alternative
to net income, operating profit, cash from operations or any other operating
performance measure calculated in accordance with GAAP. Cash expenditures
for investments, interest expense and other items have been and will be
incurred and are not reflected in the EBITDA and Adjusted EBITDA presentations.
Adjusted net income and Adjusted diluted EPS do not include cash receipts
and expenditures related to those items and charges. Management compensates
for these limitations by separately considering these excluded items, all
of which should be considered when evaluating our performance, as well
as the usefulness of our non-GAAP financial measures. Additionally, EBITDA,
Adjusted EBITDA, Adjusted net income, and Adjusted diluted EPS should not
be considered a measure of our liquidity. Adjusted net income and Adjusted
diluted EPS should also not be used as a measure of amounts that accrue
directly to our stockholders' benefit.
This press release contains "forward-looking statements,"
within the meaning of the Private Securities Litigation Reform Act of 1995,
about Interstate Hotels & Resorts, including those statements regarding
future operating results and the timing and composition of revenues, among
others, and statements containing words such as "expects," "believes" or
"will," which indicate that those statements are forward-looking, although
not all forward- looking statements will contain such words. Except for
historical information, the matters discussed in this press release are
forward-looking statements that are subject to certain risks and uncertainties
that could cause the actual results to differ materially, including the
volatility of the national economy, changes in business and leisure travel
patterns or levels, fuel cost, economic conditions generally and the hotel
and real estate markets specifically, international and geopolitical instability,
health concerns, threatened or actual terrorist attacks, governmental actions,
legislative and regulatory changes, availability of debt and equity capital,
interest rates, competition, weather conditions or natural disasters, changes
in supply and demand for lodging facilities in our current and proposed
market areas, and the Company's ability to manage integration and growth.
Additional risks are discussed in Interstate Hotels & Resorts' filings
with the Securities and Exchange Commission, including Interstate Hotels
& Resorts' annual report on Form 10-K as amended for the year ended
December 31, 2004.
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