TORONTO, Jan. 23, 2002 - Fairmont Hotels & Resorts Inc. (TSE and
NYSE: FHR) today announced its unaudited financial results for the three
months and the year ended December 31, 2001. FHR expects to release its
2001 annual report in early March. All amounts are expressed in U.S.
dollars.
FHR's financial results for the year contain substantial non-recurring
items related to the reorganization of Canadian Pacific Limited ("CPL"),
including the operating results of CPL's four discontinued businesses,
reorganization expenses and CPL corporate expenses. The accompanying financial
statements reflect CPL's reorganization effective September 30, 2001. Given
the inclusion of these non-recurring charges, net income and earnings per
share are not considered reflective of FHR's continuing operations for
the periods presented.
"We are pleased to report EBITDA of $165.2 million in 2001 which is
at the high end of the range of previous guidance," said William R. Fatt,
Chief Executive Officer of FHR. "2001 was a very significant and challenging
year for FHR. In our early days as an independent public hotel company,
FHR was tested by the profound impact of the events of September 11th in
an already difficult economic environment. We are encouraged that FHR's
business has held up remarkably well due to our geographically balanced
portfolio of world-class properties and excellent operating management.
In particular, our ability to maintain year-over-year average daily rates
for the Fairmont brand and reduce property level operating expenses throughout
this challenging period will facilitate near-term earnings improvement."
Fourth Quarter Consolidated Results
Typically, the fourth quarter is FHR's weakest quarter. Revenues of
$100.8 million in the fourth quarter of 2001 were down 12.7% from $115.4
million in the same quarter of 2000. EBITDA(1) of $14.6 million decreased
54.1% from $31.8 million in the fourth quarter of 2000. Declines were experienced
in both FHR's hotel ownership and hotel management operations resulting
from lower occupancies and the difficulty of managed operations in meeting
incentive fee targets due to the extraordinary events in late 2001.
Additions to the portfolio included The Fairmont Kea Lani Maui and the
remaining 51% interests in The Fairmont Glitter Bay and The Fairmont Royal
Pavilion in Barbados in early 2001, and the remaining 80% interest in The
Fairmont Chateau Whistler late in 2000. In February 2001, FHR sold The
Fairmont Empress in Victoria and Fairmont Le Chateau Frontenac in Quebec
City to Legacy Hotels Real Estate Investment Trust ("Legacy"). These changes
to FHR's owned portfolio mix make quarterly and yearly comparisons difficult.
Income from continuing operations was $49.6 million compared to a loss
from continuing operations of $12.1 million in the same quarter of 2000.
Included in income from continuing operations for the current quarter is
an income tax recovery of $51.4 million that relates primarily to various
favorable tax reassessments. The loss in the prior year's quarter is largely
due to the inclusion of CPL corporate expenses as well as interest expense
incurred on CPL debt, which was considerably higher than FHR's current
level of debt.
Fourth Quarter Hotel Ownership Operations
Revenue per available room ("RevPAR") for owned comparable hotels was
$78.75, down 17.0% from $94.92 in the same quarter of 2000. The decline
resulted from a combination of a 7.9 point decrease in occupancy and a
3.5% decrease in average daily rates ("ADR"). This ADR decline relates
primarily to currency fluctuations between the U.S. and Canadian dollars.
In the absence of these fluctuations, ADR would have remained flat compared
to the prior quarter. FHR's non-Canadian properties were most significantly
impacted by the events of September 11th.
Fourth Quarter Hotel Management Operations
Fairmont
Fairmont's RevPAR was $86.08 in the fourth quarter of 2001, down 18.1%
from the same quarter in 2000. The decline resulted from a combination
of a 5.2 point decrease in occupancy and a 10.5% decrease in ADR. Of the
10.5% decline in ADR, approximately 4.1% was caused by currency fluctuations.
Delta
Comparable hotels' RevPAR of $44.31 was down 12.1% from the same quarter
in 2000 resulting from a 5.2 point decrease in occupancy and a 4.4% decrease
in ADR. This ADR decline relates almost exclusively to currency fluctuations.
Year-End 2001 Consolidated Results
Revenues increased 2.2% to $542.6 million in 2001 from $530.8 million
in 2000. EBITDA of $165.2 million was down 15.5% from $195.4 million in
2000. The impact of September 11th and the general economic downturn were
the primary factors for the annual decrease in EBITDA. Due to the changes
in the portfolio mix in late 2000 and throughout 2001, yearly comparisons
are difficult.
FHR incurred a loss from continuing operations of $28.2 million compared
to income from continuing operations of $52.4 million in 2000. The loss
in 2001 is primarily attributable to non-recurring items related to the
CPL reorganization. FHR's financial results for the years presented also
include substantial non-recurring expenses relating to CPL.
Year-End 2001 Hotel Ownership Operations
RevPAR for owned comparable hotels was $114.14 in 2001, down 3.2% from
$117.91 in 2000. The decline resulted from a combination of a 3.0 point
decrease in occupancy and a 1.6% increase in ADR. The decrease in annual
occupancy relates almost exclusively to the period following the terrorist
attacks.
Year-End 2001 Hotel Management Operations
Fairmont
RevPAR for the year was $107.48 in 2001, down 6.8% from 2000. The decline
resulted from a combination of a 4.5 point decrease in occupancy and stable
ADR. In the absence of currency fluctuations, ADR would have increased
approximately 1.3% compared to the prior year. The events of September
11th most significantly impacted our non-Canadian properties.
Delta
Comparable hotels' RevPAR of $55.88 was down 3.3% from 2000 resulting
from a 1.5 point decrease in occupancy and a 1.1% decrease in ADR. This
ADR decline relates exclusively to currency fluctuations.
Outlook
"The reorganization of CPL in October resulted in a unique opportunity
for long-term growth and value creation for FHR shareholders. As CPL's
surviving entity, we benefited by inheriting a low level of debt and significant
tax losses. FHR's balance sheet will allow us to manage through current
market conditions and expand our luxury brand in key U.S. markets by capitalizing
on potential acquisition opportunities. Depending on the opportunities
that arise, FHR could also use its available capital to repurchase up to
10% of its common shares for which we received regulatory approval in October
2001," said Fatt. "With our significant financial flexibility and unique
affiliation with Legacy, FHR is well positioned to take advantage of growth
opportunities in 2002 and beyond."
Assuming a gradual improvement in the economy and a return to more normal
travel patterns over the course of the year, FHR estimates that EBITDA
in 2002 will be in the range of $180 to $190 million, net income to be
between $62 and $68 million and EPS to be in the range of $0.79 to $0.87.
For the first quarter of 2002, FHR anticipates EBITDA of approximately
$25 million, or EPS of about $0.03, however quarterly earnings are difficult
to estimate in the current environment.
Three months
Three months Year
Year
ended Dec. ended Dec. ended Dec.
ended Dec.
31, 2001 31, 2000
31, 2001 31, 2000
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FAIRMONT MANAGED COMPARABLE
HOTELS AND RESORTS
Worldwide
RevPAR
$ 86.08 $ 105.05
$ 107.48 $ 115.29
ADR
153.58 171.61
167.55 168.02
Occupancy
56.0% 61.2%
64.1% 68.6%
Canada
RevPAR
$ 59.33 $ 65.81
$ 84.15 $ 86.75
ADR
106.02 110.94
128.43 126.57
Occupancy
56.0% 59.3%
65.5% 68.5%
United States and
Other
RevPAR
$ 122.97 $ 159.27
$ 139.78 $ 154.81
ADR
218.92 249.55
224.57 225.26
Occupancy
56.2% 63.8%
62.2% 68.7%
DELTA MANAGED COMPARABLE
HOTELS AND RESORTS
Canada
RevPAR
$ 44.31 $ 50.43
$ 55.88 $ 57.77
ADR
75.60 79.10
83.40 84.33
Occupancy
58.6% 63.8%
67.0% 68.5%
OWNED COMPARABLE HOTELS
AND RESORTS
Worldwide
RevPAR
$ 78.75 $ 94.92
$ 114.14 $ 117.91
ADR
161.70 167.63
185.11 182.25
Occupancy
48.7% 56.6%
61.7% 64.7%
Canada
RevPAR
$ 52.66 $ 60.98
$ 94.15 $ 97.32
ADR
107.72 111.32
145.77 144.15
Occupancy
48.9% 54.8%
64.6% 67.5%
United States and
Other
RevPAR
$ 116.54 $ 144.13
$ 143.07 $ 147.74
ADR
240.57 243.03
249.17 243.77
Occupancy
48.4% 59.3%
57.4% 60.6% |
Comparable hotels and resorts are considered to be properties that
were fully open under FHR management for at least the entire current and
prior period. Given the strategic importance of the acquisition of The
Fairmont Kea Lani Maui, it has been included in FHR's operating statistics
in the preceding chart on a pro forma basis as if owned since the beginning
of the prior period. Comparable hotels and resorts statistics exclude properties
under significant renovation that would have a significant adverse effect
on the properties' primary operations. For both the three-month periods
and years ending December 31, 2001 and December 31, 2000, The Fairmont
Southampton Princess, The Fairmont Hamilton Princess and The Fairmont Pierre
Marques have been excluded from the comparable data.
FHR is one of North America's leading owner/operators of luxury hotels
and resorts. FHR's portfolio consists of 77 luxury and first class
properties with more than 30,000 guestrooms in Canada, the United States,
Mexico, Bermuda and Barbados. It holds a 67 percent controlling interest
in Fairmont, North America's largest luxury hotel management company. Fairmont
manages 37 distinctive city center and resort hotels such as The Fairmont
San Francisco, The Fairmont Banff Springs, Fairmont Le Chateau Frontenac,
The Fairmont Scottsdale Princess and The Plaza in New York City. FHR also
holds a 100 percent interest in Delta, Canada's largest first class hotel
management company, which manages and franchises a portfolio of 40 city
center and resort properties in Canada. In addition to hotel management,
FHR holds real estate interests in 20 hotel properties and a 34 percent
investment interest in Legacy, which owns 21 properties.
This press release contains certain forward-looking statements relating,
but not limited to, FHR's operations, anticipated financial performance,
business prospects and strategies. Forward-looking information typically
contains statements with words such as "anticipate", "believe", "expect",
"plan" or similar words suggesting future outcomes. Such forward-looking
statements are subject to risks, uncertainties and other factors, which
could cause actual results to differ materially from future results expressed,
projected or implied by such forward-looking statements. Such factors include,
but are not limited to economic, competitive and lodging industry conditions.
FHR disclaims any responsibility to update any such forward-looking statements. |