Interstate Hotels & Resorts Reports Third-Quarter 2008 Results
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Interstate Hotels & Resorts Reports Third-Quarter 2008 Results
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Category: Worldwide - Industry economy -
Figures / Studies
This is a press release selected by our editorial committee and published online for free on 2008-11-06
Interstate Hotels &
Resorts (NYSE: IHR), a leading hotel real estate investor and the nation's
largest independent hotel management company, today reported operating results
for the third quarter ended September 30, 2008. The company's performance for
the third quarter includes the following (in millions, except per share
amounts):
(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
definition and further discussion of non-GAAP financial measures and
reconciliation to net income later in this press release.
(3) Includes the company's share of EBITDA from unconsolidated joint
venture investments in the amounts of $1.8 million and $1.2 million in
the third quarters of 2008 and 2007, respectively, and $6.0 million
and $3.1 million in the first nine months of 2008 and 2007,
respectively.
(4) The 2008 results include (i) a $2.4 million gain on the sale of the
Doral Tesoro Hotel & Golf Club in the first quarter 2008, and (ii)
$0.3 million and $1.4 million of write-offs of intangible assets
related to the sale of certain hotels in the third quarter 2008 and
YTD, respectively. The 2007 results include (i) $0.8 million and $8.7
million of write-offs of intangible assets related to the sale of
certain hotels during the third quarter 2007 and YTD, respectively,
and (ii) a $20.5 million gain related to the sale of BridgeStreet
Corporate Housing (completed in the first quarter 2007), which along
with the operations through the date of sale, are included in Income
from Discontinued Operations on the company's statement of operations
for the first quarter 2007. All of these items have been excluded
from the calculation of Adjusted EBITDA, Adjusted net income, and
Adjusted diluted EPS. In addition, the 2007 results have been
restated as presented in the company's 2007 Annual Report on form
10-K. For further details on this restatement see footnote 13 to the
financial tables of this press release, as well as footnote 19 in our
2007 Annual Report on form 10-K.
"Despite a rapidly declining global economy, we were able to achieve positive RevPAR results for the quarter as well as increase management contract unit count for the fourth consecutive quarter," said Thomas F. Hewitt, chief executive officer. "We expect to face continued weakness in the economy and lodging industry. However, we remain committed to enhancing value for our owners and shareholders through focused revenue management and profit maximization as well as preservation of capital and liquidity.
"Our strategy since early 2005 has been to diversify our earnings stream between wholly owned hotels, joint venture investments and third party management contracts," Hewitt said. "This balance along with our geographic diversification and breadth of product types provides us with the ability to temper these volatile market conditions. In this environment, we benefit from the stability of our third party management contracts, where we are currently focusing our strategic growth efforts."
Wholly Owned Hotel Results
EBITDA from the company's seven owned hotels was $5.7 million in the 2008 third quarter and $20.9 million for the first nine months as outlined below (in millions):
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