Statement Concerning Non-GAAP Measurement Tools
La Quinta uses Adjusted EBITDA as a supplemental measure
of the Company's performance because we believe it gives the reader a more
complete understanding of our financial condition and operating results.
We use this metric to calculate various financial ratios and to measure
our performance, and we believe some debt and equity investors also utilize
this metric for similar purposes. Adjusted EBITDA includes adjustments
for non-cash income or expenses such as depreciation, amortization and
other non-cash items. Adjusted EBITDA is also adjusted for discontinued
operations, income taxes, interest expense, net and minority interest (which
includes our preferred stock dividends of La Quinta Properties, Inc.),
as well as certain cash income or expense that we believe otherwise distort
the comparability of the measure. Adjusted EBITDA is intended to show unleveraged,
pre-tax operating results. The impact of investing and financing transactions,
as well as income taxes, should also be considered in evaluating overall
results. Adjusted EBITDA is not intended to represent any measure of performance
in accordance with generally accepted accounting principles ("GAAP") and
our calculation and use of this measure may differ from our competitors.
This non-GAAP measure should not be used in isolation or as a substitute
for a measure of performance or liquidity prepared in accordance with GAAP.
A detailed schedule reconciling GAAP net loss to Adjusted EBITDA is included
in the attached supplemental tables.
Supplemental Schedules
Financial Results
A
Other (Income) Expense
B
Supplemental Non-GAAP Financial
Data C
Other Supplemental Information
D
La Quinta Summary Lodging Statistics
E
La Quinta Corporation
Schedule A
Financial Results
(Unaudited)
Three months ended
Operating Data:
March 31,
(In thousands, except per share data)
2004 2003
Revenues
Lodging
$131,111 $118,148
Other
1,186 1,231
Total revenues
132,297 119,379
Expenses
Direct lodging operations
60,935 54,775
Other lodging expenses
18,251 17,773
General and administrative
16,173 14,443
Interest, net
15,538 14,243
Depreciation and amortization
29,277 31,391
Impairment of property
and equipment
5,014 62,012
Other (income) expense
(135) 3,164
Total expenses
145,053 197,801
Loss before minority interest, income
taxes
and discontinued operations
(12,756) (78,422)
Minority interest
(4,568) (4,510)
Income tax benefit
5,029 32,978
Loss before discontinued operations
(12,295) (49,954)
Discontinued operations,
net
--- (334)
Net loss
$(12,295) $(50,288)
Per Share Data:
Loss before discontinued operations
$(0.07) $(0.35)
Discontinued operations,
net
--- ---
Net loss per share - basic and assuming
dilution
$(0.07) $(0.35)
Weighted average shares outstanding
Basic
176,269 142,701
Assuming dilution
176,269 142,701
Prior period results have been reclassified to conform
to current period presentation.
La Quinta Corporation
Schedule B
Other (Income) Expense
(Unaudited)
Three months ended
March 31,
(In thousands)
2004 2003
Gain on settlement (1)
$(345) $---
Gain on sale of assets
and related costs
--- (105)
Loss on early extinguishments
of debt
--- 1,934
Other (2)
210 1,335
Total other (income) expense
$(135) $3,164
(1) During the three months
ended March 31, 2004, we settled obligations
related to assets previously sold that resulted in a net gain of
approximately $345,000.
(2) During the three months
ended March 31, 2004, we recognized expense
of approximately $232,000 related to the termination and ongoing
settlement of the La Quinta retirement plan. During the three
months ended March 31, 2003, we recognized expenses of approximately
$1,339,000 primarily related to an adjustment of actuarial
assumptions on deferred compensation agreements and changes in net
cash surrender values of key man life policies in the healthcare
business.
La Quinta Corporation
Schedule C
Supplemental Non-GAAP Financial Data
(Unaudited)
Three months ended
Adjusted EBITDA Reconciliation
March 31,
(In thousands)
2004 2003
Net loss (per GAAP)
$(12,295) $(50,288)
Add:
Depreciation and amortization
29,277 31,391
Impairment of property
and equipment
5,014 62,012
Minority interest
4,568 4,510
Income tax benefit
(5,029) (32,978)
Interest, net
15,538 14,243
Other (income) expense
(1)
(135) 3,164
Discontinued operations,
net (2)
--- 334
Adjusted EBITDA (Non-GAAP)
$36,938 $32,388
(1) See attached Schedule
B for details.
(2) Discontinued operations
for the three months ended March 31, 2003
includes three company owned hotels and TeleMatrix, Inc., a business
component, which were sold during the fourth quarter of 2003. The
separately identifiable results of operations of the components have
been reported as results from discontinued operations for all
periods presented.
Adjusted EBITDA Reconciliation (Current
2004 Outlook)
(In millions)
Three months ended Full Year
June 30, 2004 2004
Net loss (per GAAP)
$(5) $(49)
Add:
Depreciation and amortization
33 128
Impairment of property
and equipment
---
5
Minority interest
5
18
Income tax benefit
(1) (23)
Interest, net
15
61
Other expense
---
28 (A)
Adjusted EBITDA (Non-GAAP)
$47 $168
(1) Includes the estimated loss
on early retirement of the 7.114% Notes.
La Quinta Corporation
Schedule D
Other Supplemental Information
(Unaudited)
Three months ended
Capital Expenditures
March 31,
(In millions)
2004 2003
Capital expenditures
$9 $16
Selected Balance Sheet Data
(In millions)
March 31, December 31,
2004 2003
(Audited)
Property and equipment, net
$2,121 $2,144
Cash and cash equivalents (A)
291 327
Investments in securities (B) (1)
122 122
Total assets
2,749 2,804
Total indebtedness (C)
876 895
Total liabilities
1,136 1,182
Minority interest (D)
206 206
Total shareholders' equity (E)
1,407 1,417
Net debt to total capitalization
Equal to (C-B-A)/(E+D+C-B-A)
22% 22%
(1) Investments in securities
are the 7.114% Exercisable Put Option
Securities owned by the Company and which relate to the $150 million
principal amount of 7.114% Notes issued by the Company.
Debt Maturity Schedule
(In millions)
Year
March 31, 2004
2004 (1)
$150
2005
116
2006
20
2007
210
2008
50
2009 and thereafter
330
Total debt
$876
Less: Cash and cash equivalents
291
Less: Investments in securities
(2) 122
Net debt
$463
(1) The maturity schedule
assumes the $150 million of 7.114% Notes due
in 2011 will be redeemed at the option of the current holders or due
to the Company exercising its repurchase rights and excludes any
prepayment expense as a result of the early retirement of debt.
(2) Investments in securities
are the 7.114% Exercisable Put Option
Securities owned by the Company which relate to the $150 million
principal amount of 7.114% Notes issued by the Company.
La Quinta Corporation
Schedule E
Lodging Statistics
(Unaudited)
Three months ended Three months ended
March 31, 2004 March 31, 2003
Change
Occ ADR RevPAR Occ
ADR RevPAR Occ ADR
RevPAR
Comparable
Hotels
(1,2) 64.4%
$58.60 $37.72 54.4% $62.63 $34.09 10.0 pts (6.4)% 10.6%
Company
Owned (1)
Inns
62.2% $54.97 $34.18 53.3% $58.62 $31.22 8.9 pts (6.2)%
9.5%
Inns &
Suites 69.9% $66.63
$46.56 57.0% $72.17 $41.10 12.9 pts (7.7)% 13.3%
Total 64.3%
$58.50 $37.64 54.2% $62.40 $33.85 10.1 pts (6.3)% 11.2%
Hotel and Room Count Data
March 31, 2004
March 31, 2003
Number of Number of Number of Number
of
Hotels Rooms
Hotels Rooms
Comparable Hotels (2)
274 35,826
274 35,878
Company-Owned (3)
276 36,076
281 36,758
Franchised Hotels
99 8,925
68 6,009
Total (3)
375 45,001
349 42,767
(1) Excludes franchised
operating statistics and statistics for three
hotels reported in discontinued operations for the three months
ended March 31, 2003.
(2) Comparable hotels for
the three months ended March 31, 2004 and 2003
excludes two hotels classified as held for sale, representing
250 rooms in aggregate.
(3) Excludes three hotels
(366 rooms) reported in discontinued
operations for the three months ended March 31, 2003. All three
hotels were sold in 2003.
Source: La Quinta Corporation |