Press Release
November 9, 2000
PITTSBURGH, PA -- Interstate Hotels Corporation (Nasdaq:IHCO), one of the largest independent hotel management
companies in the United States, has announced results for the third quarter ended September 30, 2000.
For the third quarter of 2000, the Company reported a net loss of $4.2 million, or $.66 per share, on revenues
of $65.9 million. Earnings before interest, income tax expense and depreciation and amortization (EBITDA) were
$.3 million.
During the third quarter, revenue per available room (RevPAR) for comparable U.S. full-service hotels managed by
the Company grew 10.4% to $97.03, average daily room rate (ADR) increased to $125.37 from $116.15, and occupancy
rates increased to 77.4% from 75.7%. For comparable leased hotels, which are primarily limited-service, ADR improved
4.0% to $81.72, while occupancy rates were 70.9% compared to 71.1%, which led to RevPAR of $57.97, a 3.8% increase
from the same quarter in 1999.
The Company also reported pro forma results, which assume that the June 1999 spin-off and transactions related
to the spin-off, including the sale of Interstate's interests in The Charles Hotel Complex, had occurred on January
1, 1999. The pro forma data may not reflect the Company's future results of operations or be indicative of actual
results had the spin-off and sale occurred on such date. The Company's pro forma and actual results of operations
for the three months and nine months ended September 30, 2000 are summarized in the accompanying table.
Interstate Hotels Corporation operates approximately 160 hotels with more than 30,000 rooms in 38 states in the
United States as well as Canada, the Caribbean and Russia. For more information, visit www.interstatehotels.com.
FINANCIAL TABLES FOLLOW
Comparable Hotel Statistics(1)
------------------------------
Three Months Ended Nine Months Ended
September 30, September 30,
2000 1999 2000 1999
------------------ ------------------
U.S. Full-Service Managed Hotels:
Occupancy 77.4% 75.7% 78.9% 77.0%
ADR $125.37 $116.15 $129.10 $121.47
RevPAR $97.03 $87.92 $101.88 $93.49
Leased Hotels:
Occupancy 70.9% 71.1% 67.2% 67.9%
ADR $81.72 $78.59 $78.45 $76.38
RevPAR $57.97 $55.84 $52.74 $51.87
(1) Comparable U.S. hotels represent those operated by the Company
since January 1, 1999, excluding hotels that underwent a major
renovation or a change in franchise affiliation.
NOTE:
Certain matters discussed within this press release are forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. Although the Company believes the expectations reflected in such forward-looking
statements are based on reasonable assumptions, it cannot give assurance that its expectations will be attained.
Factors that could cause actual results to differ materially from expectations include financial performance, real
estate conditions, execution of hotel development programs, changes in the availability of additional management
contracts, leases or acquisitions, changes in local or national economic conditions and other risks detailed from
time to time in the Company's reports filed with the SEC.
INTERSTATE HOTELS CORPORATION
Consolidated Statements of Operations
(Unaudited, in thousands except per share amounts)
Actual Three Months Actual Nine Months
Ended September 30, Ended September 30,
2000 1999 2000 1999
-------------------- --------------------
Lodging revenues:
Rooms $ 52,971 $ 52,013 $ 147,879 $ 141,137
Other departmental 3,089 2,899 8,983 7,958
Net management fees 6,856 7,535 20,901 24,857
Other fees 2,938 3,114 8,566 9,294
-------- -------- -------- --------
Total revenues 65,854 65,561 186,329 183,246
-------- -------- -------- --------
Lodging expenses:
Rooms 13,027 12,075 35,492 32,895
Other departmental 1,962 1,919 5,471 5,194
Property costs 16,337 15,141 45,891 41,863
General and
administrative 3,779 3,765 10,251 11,353
Payroll and related
benefits 5,132 4,935 15,885 14,891
Lease expense 24,851 25,595 69,228 70,104
Depreciation and
amortization 4,145 4,620 12,733 14,712
Loss on impairment
of investment in
hotel leases 12,550 - 12,550 -
-------- -------- -------- --------
Total expenses 81,783 68,050 207,501 191,012
-------- -------- -------- --------
Operating loss (15,929) (2,489) (21,172) (7,766)
Other income (expense):
Interest, net 463 517 1,447 672
Other, net (4) - 20 1,563
Loss on sale of
investment in
hotel real estate - - - (876)
-------- -------- -------- --------
Loss before income
tax benefit (15,470) (1,972) (19,705) (6,407)
Income tax benefit (2,771) (376) (3,648) (1,752)
-------- -------- -------- --------
Loss before minority
interest (12,699) (1,596) (16,057) (4,655)
Minority interest (8,543) (1,031) (10,585) (2,027)
-------- -------- -------- --------
Net loss $ (4,156) $ (565) $ (5,472) $ (2,628)
-------- -------- -------- --------
-------- -------- -------- --------
Earnings per share:
Basic (0.66) (0.09) (0.88) -
Diluted (0.66) (0.09) (0.88) -
Common Shares
Outstanding:
Basic 6,306 6,063 6,208 N/A
Diluted 6,306 6,063 6,208 N/A
EBITDA $ 294 $ 824 $ 1,391 $ 6,526
-------- -------- -------- --------
-------- -------- -------- --------
Pro Forma Three Months Pro Forma Nine Months
Ended September 30, Ended September 30,
2000 1999 2000 1999
---------------------- ----------------------
Lodging revenues:
Rooms $ 52,971 $ 52,013 $ 147,879 $ 141,137
Other departmental 3,089 2,899 8,983 7,958
Net management fees 6,856 6,847 20,901 20,549
Other fees 2,938 3,087 8,566 8,637
-------- -------- -------- --------
Total revenues 65,854 64,846 186,329 178,281
-------- -------- -------- --------
Lodging expenses:
Rooms 13,027 12,075 35,492 32,895
Other departmental 1,962 1,919 5,471 5,194
Property costs 16,337 15,141 45,891 41,863
General and
administrative 3,779 3,765 10,251 11,797
Payroll and related
benefits 5,132 5,085 15,885 15,341
Lease expense 24,851 25,595 69,228 68,104
Depreciation and
amortization 4,145 4,620 12,733 14,712
Loss on impairment of
investment in
hotel leases 12,550 - 12,550 -
-------- -------- -------- --------
Total expenses 81,783 68,200 207,501 189,906
-------- -------- -------- --------
Operating loss (15,929) (3,354) (21,172) (11,625)
Other income (expense):
Interest, net 463 512 1,447 934
Other, net (4) - 20 38
Loss on sale of
investment in hotel
real estate - - - -
-------- -------- -------- --------
Loss before income
tax benefit (15,470) (2,842) (19,705) (10,653)
Income tax benefit (2,771) (534) (3,648) (1,877)
-------- -------- -------- --------
Loss before
minority interest (12,699) (2,308) (16,057) (8,776)
Minority interest (8,543) (1,506) (10,585) (5,960)
-------- -------- -------- --------
Net loss $ (4,156) $ (802) $ (5,472) $ (2,816)
-------- -------- -------- --------
-------- -------- -------- --------
Earnings per share:
Basic (0.64) (0.13) (0.84) (0.44)
Diluted (0.64) (0.13) (0.84) (0.44)
Common Shares Outstanding:
Basic 6,543 6,395 6,543 6,395
Diluted 6,543 6,395 6,543 6,395
EBITDA $ 294 $ 433 $ 1,391 $ 1,270
-------- -------- -------- --------
-------- -------- -------- --------
------------------------------------
Contact:
Interstate Hotels Corporation
Lisa O'Connor, 412/937-3319
Tom Loftus, 412/937-3382