- RevPAR Increased 11.8% Driven By Solid U.S. and International
Performance - TORONTO, Feb. 24 /PRNewswire-FirstCall/ -- Fairmont
Hotels & Resorts Inc. ("FHR" or the "Company") (TSX/NYSE: FHR)
today announced its financial results for the three months and year
ended December 31, 2005. These financial results have been prepared
in accordance with Canadian generally accepted accounting
principles. All amounts are expressed in U.S. dollars. Fourth
Quarter 2005 Highlights - Diluted income per share ("diluted EPS")
for the fourth quarter was $0.88 compared to a diluted loss per
share of $0.06 for the same period in 2004. Excluding the effect of
hotels sold in 2004 and 2005, gains on asset sales, a tax recovery
and other non-operating items, diluted EPS rose to $0.12 from a
diluted loss per share of $0.05 in the fourth quarter of 2004. -
Revenues increased 40.9% to $232.4 million. Excluding the effect on
revenues of hotels sold in 2004 and 2005 and the proceeds from land
sales, revenues were up 16.8%. - Revenue per available room(1)
("RevPAR") for the comparable(2) Fairmont managed portfolio
improved 11.8% driven by RevPAR growth of 15.4% at the comparable
U.S. and International managed portfolios. - EBITDA(3) for the
fourth quarter was $116.2 million compared to $20.4 million for the
same period in 2004. Fourth quarter EBITDA included a gain on asset
sales of $122.9 million in 2005 and a loss of $0.5 million in 2004.
As a result of the sale of The Fairmont Orchid, Hawaii on December
23, EBITDA and Adjusted EBITDA in the fourth quarter were $2.0
million lower than previously expected due to lost real estate
earnings from the resort during the holiday season. - Adjusted
EBITDA(3) for the fourth quarter of 2005 was $31.6 million compared
to $34.2 million for the same period in 2004. Adjusted EBITDA
increased 9.9% when excluding the impact of the hotels sold in 2004
and 2005 and The Fairmont Southampton, which was closed for
hurricane repairs during the first quarter of 2004 and therefore
was excluded from FHR's comparable portfolio. - FHR sold its real
estate interest in The Fairmont Orchid for a gain of $105.8 million
while maintaining a long-term management contract. - The Company
entered into six agreements for hotel and/or residential
developments, all opening between 2007 and 2009. - FHR completed
the sale of two blocks of land in Toronto's Southtown for gross
proceeds of $42.8 million. - The Company announced an Acquisition
Agreement with Kingdom Hotels International and Colony Capital for
all of FHR's outstanding common shares at a price of $45.00 per
share in cash (see Announcements and Corporate Activities). "Our
U.S. properties continue to benefit from the robust U.S. lodging
fundamentals. In the fourth quarter, our comparable U.S. managed
and owned portfolios experienced RevPAR growth of 15.0% and 9.6%,
respectively, primarily driven by strong occupancy gains across all
markets," said William R. Fatt, FHR's Chief Executive Officer. "Our
International portfolio also had significant gains, with RevPAR at
the managed and owned portfolios up 17.0% and 11.3%, respectively."
"Looking ahead to 2006, we expect current industry trends to
continue with ongoing strength in our U.S. and International
properties. As our Canadian portfolio earns such a significant
portion of its annual earnings in the third quarter, it is too
early to provide details on performance," said Mr. Fatt. "Going
forward, we remain focused on enhancing the performance of our
portfolio, building on the success of our brand and expanding into
new key city center and resort destinations. We are excited about
the opportunity to combine the Fairmont and Raffles portfolios to
create a global luxury hotel leader. These two brands are an
excellent strategic fit with rich histories, global brand
recognition and complementary destinations." Three months ended
Year ended Revenues December 31 December 31 (In millions of U.S.
dollars) 2005 2004 2005 2004 ---- ---- ---- ---- Reported Revenues
$ 232.4 $ 164.9 $ 857.5 $ 768.7 Less: Amounts attributable to
hotels sold 13.3 14.0 63.9 106.5 Proceeds from sale of undeveloped
land 42.8 - 60.7 15.4
---------------------------------------------- Revenues adjusted
for hotels sold and land sales $ 176.3 $ 150.9 $ 732.9 $ 646.8
---------------------------------------------- Three months ended
Year ended Diluted income December 31 December 31 (loss) per share
2005 2004 2005 2004 ---- ---- ---- ---- Diluted income (loss) per
share $ 0.88 $ (0.06) $ 2.16 $ 1.92 Less: Amounts attributable to
hotels sold (0.01) 0.00 (0.02) 0.10 Gains on asset sales 0.98 0.01
1.17 1.29 Other non-operating items(i) (0.24) - (0.40) - Tax
recovery - - 0.49 - ----------------------------------------------
Diluted income (loss) per share adjusted for hotels sold, gains on
asset sales, tax recovery and other non-operating items $ 0.12 $
(0.05) $ 0.87 $ 0.45 ----------------------------------------------
(i) 2005 results include a number of non-operating items:
transactions costs (Q2); a legal provision (Q3); restructuring and
lease termination costs (Q4); one-time pension costs (Q4); advisory
fees relating to a strategic review undertaken by the Board of
Directors (Q4); and a provision related to an impairment of
long-term advances receivable (Q4). (ii) Totals may not add due to
rounding and the exclusion of any anti-dilutive impact. Fourth
Quarter Ownership Operations The Company's hotel ownership results
are affected by the seasonal nature of the assets owned. The table
below presents, by quarter, the comparable hotel ownership EBITDA
contribution by region.
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Interna- 2005 Canada U.S. tional
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First quarter 21% 35% 44%
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Second quarter 50% 31% 19%
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Third quarter 88% 6% 6%
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Fourth quarter 14% 46% 40%
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Full-year 53% 24% 23%
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Comparable owned hotels revenues: --------------------------------
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Comparable revenues Canada U.S. International Total
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Increase from fourth quarter 2004 4.6% 16.7% 14.5% 10.8%
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- Canadian Owned Hotels: Revenues for the Canadian owned hotels
were impacted by the 3.8% appreciation of the Canadian dollar
against the U.S. dollar when compared to the fourth quarter of
2004. The balance of the increase was primarily driven by The
Fairmont Chateau Lake Louise, which experienced revenue growth of
9.3% and a 10.2% improvement in RevPAR. - U.S. Owned Hotels: This
portfolio's revenue improvements were largely driven by The
Fairmont Scottsdale Princess, which enjoyed RevPAR growth of 14.3%.
- International Owned Hotels: Increased revenues for the
International owned portfolio was the result of double-digit RevPAR
growth at all properties in this portfolio. In Mexico, The Fairmont
Acapulco Princess and The Fairmont Pierre Marques experienced
RevPAR increases of 11.2% and 11.7%, respectively. Comparable owned
hotels operating statistics:
--------------------------------------------
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Increase (decrease) from fourth quarter 2004 Canada U.S.
International Total
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RevPAR 6.7% 9.6% 11.3% 8.8%
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Average daily rate ("ADR") 5.8% (3.5%) 4.2% 3.8%
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Occupancy 0.5 8.5 3.7 2.8 points points points points
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- Canadian Owned Hotels: The improvement in ADR is primarily a
result of the appreciation of the Canadian dollar. Adjusting for
the appreciation of the Canadian dollar, RevPAR for this portfolio
was up 2.6%. - U.S. Owned Hotels: Solid occupancy growth continued
to be the driver for the U.S. owned portfolio as a result of
increased leisure and group demand. - International Owned Hotels:
The International owned portfolio's performance was primarily
impacted by a considerable increase in leisure demand in Acapulco
compared to the same quarter last year. Comparable owned hotels
EBITDA(3): ----------------------------------
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Comparable EBITDA Canada U.S. International Total
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Increase (decrease) from fourth quarter 2004 (42.1%) 31.2% (0.2%)
(2.1%)
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- Canadian Owned Hotels: EBITDA for the Canadian owned hotels
decreased $2.4 million to $3.3 million as a result of recent
restructuring costs across the portfolio and fewer U.S. leisure
travelers over the holiday period. Excluding the restructuring
costs, EBITDA was down approximately $2 million or 35%. - U.S.
Owned Hotels: EBITDA for this portfolio, which excludes The
Fairmont Orchid, was up $2.0 million to $8.4 million in the fourth
quarter. The Fairmont Scottsdale Princess reported significant
EBITDA growth as a result of a 10.1 percentage point occupancy
improvement. - International Owned Hotels: EBITDA was essentially
flat for this portfolio as all of these properties incurred
restructuring costs in the quarter. Excluding these costs, EBITDA
increased about $1.9 million or 26%. Comparable owned hotels EBITDA
margin: --------------------------------------
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Comparable EBITDA margin Canada U.S. International Total
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Increase (decrease) from fourth quarter 2004 (560bp) 270bp (320bp)
(220bp)
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- Canadian Owned Hotels: EBITDA margins for the Canadian owned
hotels decreased relative to the fourth quarter of 2004 due to
softness in American leisure business as well as restructuring
costs incurred during the quarter. Both of these factors had a
considerable impact given that the fourth quarter is not a
significant earnings period for the Canadian portfolio. Excluding
the restructuring costs, the EBITDA margin was down 480 basis
points. - U.S. Owned Hotels: Solid revenue growth of 16.7% was the
key driver of EBITDA margin improvement for this portfolio. -
International Owned Hotels: Like the Canadian portfolio, the
International owned assets experienced a decline in EBITDA margins
as a result of restructuring costs during the fourth quarter of
2005. Excluding these costs, margins increased by 240 basis points.
Real estate activities: Real estate activities in the fourth
quarter produced revenues of $49.4 million and a $16.9 million
contribution to EBITDA. This was generated primarily by two land
sales in Toronto, which yielded net proceeds and after-tax gains of
$17.1 million. Real estate activities for the same period in 2004,
primarily from Fairmont Heritage Place, generated $4.8 million in
revenues and a $1.6 million loss to EBITDA. Fourth Quarter
Management Operations
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Increase from fourth quarter 2004 Fairmont Delta
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Revenues under management 5.7% 7.5%
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Management fee revenues 42.4% 18.8%
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Comparable worldwide RevPAR 11.8% 13.3%
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Comparable worldwide ADR 6.8% 7.8%
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Comparable worldwide Occupancy 2.8 points 3.1 points
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Fairmont Management Operations - Revenues under management of $448
million increased 5.7% over 2004. The addition of The Savoy, A
Fairmont Hotel, Fairmont Monte Carlo, Fairmont Newport Beach, five
hotels in Kenya and improved operating results at the U.S. hotels,
all contributed to this increase. - Management fee revenues were up
42.4% to $20.5 million, as a number of annual incentive thresholds
were surpassed during the quarter. - EBITDA margin of 46.8% was
down from 64.6% in the prior year primarily due to higher incentive
compensation costs as a result of the Company's higher share price
in the fourth quarter of 2005. - For the Fairmont comparable
managed portfolio, RevPAR increased 11.8% to $118.70. The
comparable International managed portfolio experienced solid RevPAR
growth of 17.0%, driven by a 15.3% improvement in ADR. The
comparable U.S. managed hotels also showed strong growth with
RevPAR up 15.0%, resulting from a 4.2% increase in ADR combined
with an occupancy gain of 6.2 percentage points. The comparable
Canadian managed portfolio reported a 6.9% RevPAR improvement,
driven primarily by an increase in ADR of 5.2%. Adjusting for the
appreciation of the Canadian dollar, RevPAR for the Canadian
portfolio was up 2.8% for the quarter. Delta Management Operations
- Delta's revenues under management increased 7.5% to $108 million,
primarily due to improved operating results and the appreciation of
the Canadian dollar. - Management fee revenues for the fourth
quarter were $3.8 million compared to $3.2 million for the same
period in 2004. This 21.4% increase in management fee revenues
relates primarily to a number of properties exceeding their annual
incentive fee thresholds in the fourth quarter. - RevPAR increased
13.3% over the fourth quarter of 2004 resulting from a 7.8%
increase in ADR and a 3.1 percentage point improvement in
occupancy. Adjusting for the appreciation of the Canadian dollar,
RevPAR was up approximately 8.9%. General and Administrative
Expenses General and administrative expenses for the quarter were
$14.7 million compared to $9.2 million for the same period in 2004.
Increased incentive compensation costs as a result of the Company's
higher share price and one-time pension plan costs were the primary
drivers. Year-end Consolidated Results For the year ended December
31, 2005, EBITDA was $264.8 million compared to $324.7 million for
the same period in 2004. EBITDA for both periods includes gains on
asset sales of $140.8 million and $152.6 million, respectively.
Adjusted EBITDA was $203.1 million compared to $216.0 million for
the same period in 2004. Excluding the three hotels sold and The
Fairmont Southampton, which was closed for hurricane repairs during
the first quarter of 2004, Adjusted EBITDA increased 4.6% to $185.4
million. Net income for the year was $167.5 million (diluted EPS of
$2.16), compared to the prior year's net income of $155.8 million
(diluted EPS of $1.92). Excluding the impact of hotels sold, gains
on asset sales, other non- operating items and the tax recovery,
diluted EPS increased 93% to $0.87 from $0.45. Announcements and
Corporate Activities On December 9, 2005, Icahn Partners LP and
Icahn Partners Master Fund LP commenced a formal unsolicited
partial takeover bid for approximately 41% of the outstanding
common shares of the Company at a price of $40.00 per share. On
December 22, 2005, Fairmont's Board of Directors issued its
Circular recommending that the Icahn offer be rejected, as it was
not in the best interest of its shareholders. At the same time, the
Board of Directors disclosed that it was actively exploring
strategic alternatives to maximize value for shareholders, which
might include a possible transaction with one or more third
parties. On January 30, 2006, Fairmont announced that it had
entered into an Acquisition Agreement with a Canadian company owned
by Kingdom Hotels International and Colony Capital, which is
expected to acquire all of Fairmont's outstanding common shares at
a price of $45.00 per share in cash. The total value of this
transaction, including debt is $3.9 billion. The transaction was
unanimously approved by Fairmont's Board of Directors following
receipt of the recommendation of a Special Committee of the Board.
Fairmont's Board has agreed to recommend to its shareholders that
they vote in favor of the transaction. The closing of the
transaction, which is expected to occur in May, is not subject to
any financing condition. The closing is subject to certain other
customary conditions, including regulatory approvals. The proposed
transaction is expected to close in the second quarter of 2006,
shortly after receipt of shareholder and court approvals. The
transaction is to be carried out by way of a statutory plan of
arrangement and, accordingly, will be subject to the approval of 66
2/3% of the votes cast by Fairmont's shareholders at a meeting of
shareholders scheduled for April 18, 2006 as well as court
approval. Fairmont has been advised by Kingdom and Colony of their
intention to combine the Fairmont and Raffles portfolios following
the completion of the transaction, transforming the companies into
a global luxury hotel leader with 120 hotels in 24 countries.
Fairmont will continue as a hotel management company headquartered
in Canada and Raffles, based in Singapore, will also retain its
separate brand identity. Raffles owns and manages a portfolio of 33
properties located primarily across Asia and Europe, including its
flagship property built in 1887, the Raffles Hotel, Singapore. New
Developments ---------------- The Company has entered into an
agreement to manage a mixed-use luxury development in the Turks
& Caicos Islands to be branded the "Fairmont Three Cays". The
project will include 300 guestroom units, several Fairmont branded
residential developments including Fairmont Heritage Place, a
Willow Stream spa and a championship golf course, all of which will
be managed by FHR. The Company will make an investment for a 19.9%
equity interest in the resort when the property opens in 2009. We
announced an agreement to manage a luxury mixed-use property within
Tamarack Resort, an all-season mountain destination located 90
miles north of Boise, Idaho. When the property opens in 2008, it
will include a 225-room condo hotel, a spa and several residential
components. The Company has entered into an agreement to manage a
mixed-use project located in South Africa's province of
KwaZulu-Natal. Projected to open in 2009, the development will
include a luxury resort, a championship golf course, a spa and
vacation ownership products. We announced an agreement to manage
Fairmont's first branded luxury condominium development. The 129
residences will be built in southern California on a 20-acre site
in the exclusive community of Indian Wells and are expected to open
in late 2007. We announced that the Company had entered into an
agreement to once again manage The Plaza in New York City when it
reopens in 2007. The Plaza is currently undergoing an extensive
$350 million renovation, which will include 282 guestroom units.
The restored Plaza will also contain elegant residential
condominiums and high-end retail space. The Company has entered
into a joint venture to develop and manage its first urban private
residence club in San Francisco's historic Ghirardelli Square. As
part of the agreement, FHR will make a minority equity investment
in the development, which is expected to open in mid-2007.
Dispositions ------------ We sold The Fairmont Orchid, Hawaii to
Westbrook Partners for gross proceeds of $250 million and continue
to manage the resort under a long-term management contract. The
Company realized a pre-tax gain of $105.8 million on the sale of
this property, which it purchased in December 2002 for $140
million. The Company completed the sale of two blocks of land in
Toronto's Southtown for gross proceeds of $42.8 million, resulting
in an after-tax gain of approximately $17.1 million. Other
Activities ---------------- During the quarter, FHR entered into a
mortgage loan for $75.0 million secured by The Fairmont Scottsdale
Princess. The proceeds were used to repay a $59.9 million mortgage
on The Fairmont Copley Plaza, Boston with the balance to be used
for general corporate purposes. During the quarter, FHR repurchased
450,400 shares under its normal course issuer bid for a total cost
of $14.9 million. During the year, FHR repurchased 4.4 million
shares at a cost of $141.2 million. The Company ceased purchasing
shares under its normal course issuer bid following the 13D filing
of Mr. Carl Icahn on November 7, 2005. About Fairmont Hotels &
Resorts Inc. FHR is a leading owner/operator of luxury hotels and
resorts. FHR's managed portfolio consists of 87 luxury and
first-class properties with approximately 34,000 guestrooms in the
United States, Canada, Mexico, Bermuda, Barbados, United Kingdom,
Monaco, Kenya and the United Arab Emirates as well as two vacation
ownership properties managed by Fairmont Heritage Place. FHR owns
Fairmont Hotels Inc., North America's largest luxury hotel
management company, as measured by rooms under management, with 49
distinctive city center and resort hotels including The Fairmont
San Francisco, The Fairmont Banff Springs and The Fairmont
Scottsdale Princess. FHR also owns Delta Hotels, Canada's largest
first-class hotel management company, which manages and franchises
38 city center and resort properties in Canada. In addition to
hotel management, FHR holds real estate interests in 21 properties
and an approximate 24% investment interest in Legacy Hotels Real
Estate Investment Trust, which owns 24 properties. FHR owns FHP
Management Company LLC, a private residence club management company
that operates Fairmont Heritage Place, a vacation ownership
business. This news 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", "estimate", "guidance", "aim" 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. These risks are further described in
FHR's filings with Canadian securities regulatory authorities
(http://www.sedar.com/) and with the U.S. Securities and Exchange
Commission website (http://www.sec.gov/). All forward-looking
statements in this news release are qualified by these cautionary
statements. These statements are made as of the date of this news
release and except as required by applicable law, FHR disclaims any
responsibility to update any such forward-looking statements,
whether as a result of new information, future events or otherwise.
1. RevPAR is calculated as room revenue divided by the number of
room nights available. Management considers RevPAR to be a
meaningful indicator of hotel operations because it measures the
period-over-period change in room revenues relative to the number
of room nights available. Investors and analysts also use it as a
measure of the Company's operating performance. However, RevPAR is
not a defined measure of operating performance under Canadian
Generally Accepted Accounting Principles ("GAAP"). It is likely
that FHR's calculation of RevPAR is different than the calculations
used by others. 2. Comparable information is considered to be
information for properties that were wholly-owned or fully open
under FHR management for at least the entire current and prior
year. Comparable information also excludes properties under major
renovation that would have a significant adverse effect on the
properties' primary operations. We present these results on a
comparable basis because we believe that doing so provides
investors and management with useful information for evaluating the
period-to-period performance of our hotels. When presenting
comparable information for this quarter, the following properties
have been excluded: Owned hotels ------------ - The Fairmont
Orchid, Hawaii (sold December 2005) - The Fairmont Kea Lani, Maui
(sold July 2004) - The Fairmont Glitter Bay (sold July 2004) - The
Fairmont Southampton (reopened April 2004 after hurricane damage
repairs) Fairmont Managed Hotels ----------------------- - The
Fairmont Southampton (reopened April 2004 after hurricane damage
repairs) - Fairmont Monte Carlo (assumed management December 2004)
- The Savoy, A Fairmont Hotel (assumed management January 2005) -
The Plaza (ceased management April 2005) - The Norfolk Hotel, Mount
Kenya Safari Club, The Aberdare Country Club, The Ark and the Mara
Safari Club (assumed management May 2005) - The Fairmont Glitter
Bay (ceased management June 2005) - Fairmont Newport Beach (assumed
management July 2005) - The Fairmont New Orleans (closed in
September 2005 due to hurricane damage) Delta Managed Hotels
-------------------- - Delta Meadowvale (assumed management
September 2004) - Delta franchised properties 3. EBITDA is defined
as earnings before interest, taxes and amortization. Management
considers EBITDA to be a meaningful indicator of operations and
uses it as the primary measure to assess the operating performance
of the Company's business segments. EBITDA provides us with an
understanding of the Company's operating results before the impact
of investing and financing transactions and income taxes. It also
facilitates comparisons between the Company and its competitors.
Management adjusts EBITDA when evaluating operating performance
because it believes that the inclusion or exclusion of certain
items such as gains and losses on asset sales and other
non-operating items, is necessary to provide a more accurate
measure of our core business operating results. It is also a means
to evaluate period-over-period results. We adjust our reported
EBITDA, as set forth above, for certain items and refer to this
measure as Adjusted EBITDA. The principal adjustments we make are
to eliminate (i) gains and losses from asset sales; (ii)
amortization, net interest expense and income taxes in calculating
our earnings from equity investments and (iii) other non-operating
items. We have chosen to provide this information to investors to
enable them to perform more meaningful comparisons of past, present
and future core business operating results. Adjusted EBITDA may
also be used by investors and analysts in their valuation of the
Company. EBITDA and Adjusted EBITDA are not defined measures of
operating performance under Canadian GAAP. It is likely that FHR's
calculations of EBITDA and Adjusted EBITDA are different than the
calculations used by others. The table below provides a
reconciliation of Adjusted EBITDA and EBITDA to net income:
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Three months ended Year ended December 30 December 31
-------------------------------------------------------------------------
(In millions of dollars) 2005 2004 2005 2004
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Net income (loss) $ 68.4 $ (4.4) $ 167.5 $ 155.8 Add (Deduct):
Interest expense, net 3.2 7.4 22.4 33.1 Income tax expense
(recovery) 24.2 (2.2) 4.4 61.9 Amortization 20.4 19.6 70.5 73.9
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EBITDA 116.2 20.4 264.8 324.7 Add (Deduct): (Gains) losses on asset
sales (122.9) 0.5 (140.8) (152.6) Proportional amortization,
interest expense and income taxes included in the results of equity
investments 10.2 11.0 36.9 41.4 Stock appreciation rights (0.4) 2.3
(0.9) 2.5 Other non-operating items(1) 28.5 - 43.1 -
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Adjusted EBITDA $ 31.6 $ 34.2 $ 203.1 $ 216.0
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(1) Other non-operating items include: Fourth quarter - expenses
relating to financial and legal advisory fees related to services
provided to the Special Committee and Board of Directors during the
review of shareholder value-creating strategic options;
restructuring and lease termination costs; a one-time pension plan
cost; and a provision related to an impairment of long-term
advances receivable. Third quarter - a legal provision associated
with a predecessor company of Fairmont. Second quarter - advisory
and other expenses related to a major portfolio acquisition that
FHR did not complete. Fairmont Hotels & Resorts Inc.
Consolidated Balance Sheets (Stated in millions of U.S. dollars)
ASSETS December 31 December 31 2005 2004 (Unaudited) -----------
----------- Current assets Cash and cash equivalents $ 279.2 $ 99.1
Accounts receivable 91.7 90.2 Inventory 13.7 15.5 Prepaid expenses
and other 14.6 11.2 ----------- ----------- 399.2 216.0 Investments
in partnerships and corporations (note 4) 155.1 160.7 Non-hotel
real estate (note 7) 100.2 100.3 Property and equipment (note 3)
1,308.8 1,435.5 Goodwill 164.8 162.8 Intangible assets (notes 4, 5
and 8) 284.8 245.0 Other assets and deferred charges (notes 4 and
5) 111.0 82.3 ----------- ----------- $ 2,523.9 $ 2,402.6
----------- ----------- ----------- ----------- LIABILITIES AND
SHAREHOLDERS' EQUITY Current liabilities Accounts payable and
accrued liabilities $ 156.6 $ 127.9 Income taxes payable (note 3)
57.8 31.3 Dividends payable 4.3 4.6 Current portion of long-term
debt 2.8 4.1 ----------- ----------- 221.5 167.9 Long-term debt
(note 15) 388.4 398.0 Other liabilities 123.5 95.7 Future income
taxes 99.5 90.6 ----------- ----------- 832.9 752.2 -----------
----------- Shareholders' Equity (note 9) 1,691.0 1,650.4
----------- ----------- $ 2,523.9 $ 2,402.6 ----------- -----------
----------- ----------- Fairmont Hotels & Resorts Inc.
Consolidated Statements of Income (Stated in millions of U.S.
dollars, except per share amounts) (Unaudited) Three months ended
Year ended December 31 December 31 2005 2004 2005 2004 ----------
---------- ---------- ---------- Revenues Hotel ownership
operations (note 11(d)) $ 150.8 $ 137.8 $ 670.2 $ 654.1 Management
operations 19.7 13.2 62.0 46.3 Real estate activities (note 7) 49.4
4.8 78.2 31.0 ---------- ---------- ---------- ---------- 219.9
155.8 810.4 731.4 Other revenues from managed and franchised
properties 12.5 9.1 47.1 37.3 ---------- ---------- ----------
---------- 232.4 164.9 857.5 768.7 Expenses Hotel ownership
operations 128.7 110.8 509.3 474.8 Management operations 11.8 6.3
26.3 19.4 Real estate activities 32.5 6.4 44.9 25.2 General and
administrative 14.7 9.2 36.8 29.6 Other (notes 13 and 14) 19.6 -
34.1 - Amortization 20.4 19.6 70.5 73.9 ---------- ----------
---------- ---------- 227.7 152.3 721.9 622.9 Other expenses from
managed and franchised properties 12.9 9.9 47.1 38.5 ----------
---------- ---------- ---------- 240.6 162.2 769.0 661.4 Loss from
equity investments and other (1.8) (1.4) - (0.2) ----------
---------- ---------- ---------- Operating (loss) income (10.0) 1.3
88.5 107.1 Interest expense, net 3.2 7.4 22.4 33.1 (Gain) loss on
sales of investments and hotel assets (105.8) 0.5 (105.8) (143.7)
---------- ---------- ---------- ---------- Income (loss) before
income tax expense (recovery) 92.6 (6.6) 171.9 217.7 Income tax
expense (recovery) Current (note 6) 53.8 4.4 (4.2) 54.4 Future
(29.6) (6.6) 8.6 7.5 ---------- ---------- ---------- ----------
24.2 (2.2) 4.4 61.9 Net income (loss) $ 68.4 $ (4.4) $ 167.5 $
155.8 ---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- Weighted average number of common
shares outstanding (in millions) (note 9) Basic 72.2 76.8 74.3 78.4
Diluted 80.5 85.0 82.5 86.4 Basic earnings (loss) per common share
$ 0.95 $ (0.06) $ 2.25 $ 1.99 Diluted earnings (loss) per common
share $ 0.88 $ (0.06) $ 2.16 $ 1.92 Fairmont Hotels & Resorts
Inc. Consolidated Statements of Cash Flows (Stated in millions of
U.S. dollars) (Unaudited) Three months ended Year ended December 31
December 31 2005 2004 2005 2004 ---------- ---------- ----------
---------- Cash provided by (used in) Operating activities Net
income (loss) $ 68.4 $ (4.4) $ 167.5 $ 155.8 Items not affecting
cash Amortization of property and equipment 19.7 18.7 68.0 70.8
Amortization of intangible assets 0.7 0.9 2.5 3.1 Loss from equity
investments 1.8 1.4 - 0.2 Future income taxes (29.6) (6.6) 8.6 7.5
Unrealized foreign exchange loss (gain) 0.8 (16.9) (6.8) (20.0)
(Gain) loss on sales of investments and hotel assets (105.8) 0.5
(105.8) (143.7) Other 21.2 (1.9) 23.4 5.9 Distributions from
investments 2.7 2.9 8.1 7.1 Changes in non-hotel real estate 19.2
2.0 16.7 1.6 Changes in non-cash working capital items (note 10)
100.4 (33.6) 54.6 (17.9) ---------- ---------- ----------
---------- 99.5 (37.0) 236.8 70.4 ---------- ---------- ----------
---------- Investing activities Additions to property and equipment
(20.1) (16.1) (71.5) (74.3) Proceeds from sale of property and
equipment - - 8.8 - Investments in partnerships and corporations -
(29.7) (11.2) (34.6) Sales of investments and hotel assets 245.6
(0.9) 248.6 442.7 Collection of loans receivable - 15.2 - 24.2
Issuance of loans receivable (0.4) - (33.5) (7.0) Acquisitions of
intangible assets (0.3) (3.2) (32.3) (3.2) ---------- ----------
---------- ---------- 224.8 (34.7) 108.9 347.8 ----------
---------- ---------- ---------- Financing activities Issuance of
long-term debt 75.0 33.2 179.5 115.9 Repayment of long-term debt
(195.1) (1.1) (200.9) (380.6) Issuance of common shares 3.7 2.0 6.6
2.9 Repurchase of common shares (14.9) (32.7) (141.2) (84.5)
Dividends paid - - (9.1) (6.4) ---------- ---------- ----------
---------- (131.3) 1.4 (165.1) (352.7) ---------- ----------
---------- ---------- Effect of foreign exchange rate changes on
cash and cash equivalents - 1.6 (0.5) 1.9 ---------- ----------
---------- ---------- Increase (decrease) in cash and cash
equivalents 193.0 (68.7) 180.1 67.4 Cash and cash equivalents -
beginning of period 86.2 167.8 99.1 31.7 ---------- ----------
---------- ---------- Cash and cash equivalents - end of period $
279.2 $ 99.1 $ 279.2 $ 99.1 ---------- ---------- ----------
---------- ---------- ---------- ---------- ---------- Fairmont
Hotels & Resorts Inc. Consolidated Statements of Retained
Earnings (Stated in millions of U.S. dollars) (Unaudited) Three
months ended Year ended December 31 December 31 2005 2004 2005 2004
---------- ---------- ---------- ---------- Balance - Beginning of
period $ 213.5 $ 214.7 $ 189.2 $ 78.1 Net income (loss) 68.4 (4.4)
167.5 155.8 ---------- ---------- ---------- ---------- 281.9 210.3
356.7 233.9 Repurchase of common shares (note 9) (8.1) (16.5)
(78.4) (36.9) Dividend (4.3) (4.6) (8.8) (7.8) ----------
---------- ---------- ---------- Balance - End of period $ 269.5 $
189.2 $ 269.5 $ 189.2 ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- FIRST AND FINAL ADD TO
FOLLOW DATASOURCE: Fairmont Hotels & Resorts Inc. CONTACT: Emma
Thompson, Executive Director Investor Relations, Tel: (416)
874-2485, Email: , Website: http://www.fairmont.com/
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