WEH Westcoast Hosp Cp

RevPAR Grows 10.1% During the Fourth Quarter; WestCoast Hospitality Corporation Announces Quarterly and Year-End Financial Results SPOKANE, Wash., Feb. 10 /PRNewswire-FirstCall/ -- WestCoast Hospitality Corporation (NYSE:WEH) today announced financial results for the fourth quarter and year ended December 31, 2004. Hotel Statistics During the fourth quarter of 2004, system-wide RevPAR (revenue per available room) for comparable hotels (hotels owned, leased, managed and franchised for at least one year) increased 10.1% over the 2003 fourth quarter levels to $35.45. This increase was due to a 2.2% increase in average daily rate to $68.23, and a 3.7 point increase in occupancy, to 52.0%. For the full year 2004, system-wide RevPAR for comparable hotels increased 7.2% over the 2003 level to $41.75. The increase resulted from a 1.0% increase in average daily rate, to $71.28, and a 3.4 point increase in occupancy, to 58.6%. Additional statistics are set forth in the attached financial statements. Company Performance During the fourth quarter, the company announced its plan to invest $40 million to improve comfort, freshen d�cor and upgrade technology at its hotels. The company also announced its plan to sell 11 non-strategic hotels and other non-core properties and use the proceeds from the sales to support its $40 million hotel investment. In connection with the company's announcement, it reclassified 11 hotels and one office building as discontinued operations. It also reclassified these properties as held for sale, which resulted in the company recording an impairment on four hotels during the fourth quarter in the aggregate amount of $5.8 million, as adjusted for the tax benefit. For the fourth quarter, the company's loss applicable to common shareholders was $0.63 per share, compared to $0.20 in the fourth quarter of 2003. For the full year 2004, the company's loss applicable to common shareholders was $0.51 per share, compared to $0.10 in 2003. The impairment recorded by the company in the fourth quarter accounted for $0.44 of the 2004 per share losses. Without the impairment, the loss for 2004 would have been $0.07 per share, an improvement of $0.03 per share over the prior year. Upon closing of the sales of the properties to be divested, which is expected to occur during 2005, the company anticipates that it will recognize aggregate post-tax gains on seven hotels and non-core properties in the range of $6.6 million to $9.3 million. In the fourth quarter, the company had total revenue from continuing operations of $38.4 million, up 7.0% from the comparable period in 2003. EBITDA (earnings before interest, taxes, depreciation and amortization) from continuing operations was $3.0 million, up 24.1% from the prior year quarter. For the full year 2004, the company achieved a 3.6% increase in revenues from continuing operations, to $163.1 million. Full year EBITDA for 2004 from continuing operations was up 4.5%, to $22.6 million. Arthur Coffey, President and Chief Executive Officer, said, "The growth in RevPAR we experienced during the fourth quarter substantially improved our margins, validating the hotel improvement plan we implemented in 2004. Our planned acceleration of this plan, along with the momentum continuing to build in market demand, should combine to make 2005 a very positive year for the company. We believe that our Red Lion brand is well-situated for expansion into new markets. As a result of the improvements we are making to our owned hotels and the consistency of high brand standards we are achieving, prospective partners and franchisees are expressing strong interest in new transactions. In addition, we expect our divestment of non-core properties in 2005 will result in recognition of gains that exceed the impairment we recorded in the fourth quarter. Recent Events During the quarter, the company also announced the hiring of well-known industry executive Anupam Narayan. Mr. Narayan joined the company in November as Executive Vice President, Chief Investment Officer. On January 15, 2005, Mr. Narayan was appointed to the additional position of Chief Financial Officer. Mr. Narayan said, "I am excited to join the team at WestCoast Hospitality Corporation at a time when the company is expanding the Red Lion brand from its long-established western U.S. base and building it into a strong North American competitor in the full-service, upper mid-scale market. I am looking forward to working with the team to attain this goal." The company also recently obtained a new $20 million credit facility with Wells Fargo Bank which will allow it to further accelerate the improvements to its hotels. Mr. Narayan noted, "Wells Fargo clearly understands our strategy and has been very attentive to our desire to fund strategic improvements to our hotels prior to the increased seasonal demand the lodging industry typically experiences in the spring and summer." In December, 2004, the company engaged Colliers International as its listing broker for the sale of the 11 hotel properties. Colliers reports significant market interest in the hotels being held for sale. Hotel Division Performance For the fourth quarter, the company reported hotel and restaurant revenue from continuing operations of $32.9 million, up $0.9 million from the previous comparable quarter. Operating margins improved substantially during the quarter, with expenses increasing only $0.4 million. For full-year 2004, hotel and restaurant revenue from continuing operations increased $2.8 million while expenses increased $3.0 million. John Taffin, Executive Vice President, Hotel Operations, said, "Our investment in new brand initiatives during the past year yielded great returns in the form of significant RevPAR growth during the third and fourth quarters. As a result, we have achieved substantial increases in operating margins during the second half of the year in hotels we own and operate. Guests have embraced our Stay Comfortable beds and room amenities package, our Net4Guests free wireless internet access and our 'We Promise or We Pay' lowest rate website guarantee. We believe these initiatives have played a large role in our increased occupancy year on year for each of the last 13 months, and our increased ADR year on year for each of the last six months." During the second quarter of 2005, the company expects to complete the upgrade of all beds and bedding in its owned hotels to Stay Comfortable standards and begin renovations on the balance of the guestrooms, guest bathrooms and public spaces. Franchise, central services and development revenue was $0.6 million in the fourth quarter of 2004, versus $0.7 million in the comparable period of 2003. On February 1, 2005, the company announced the execution of a franchise license agreement for conversion to the Red Lion brand of a full-service, 318 room hotel at Jantzen Beach along the Columbia River in Portland, Oregon. Mr. Taffin commented, "The property will be opening as the 'Red Lion Hotel on the River' by the beginning of April. Our focus on new brand standards and our hub and spoke strategy have boosted interest from prospective franchisees and we expect to announce the execution of other new franchise license agreements in key markets this year." Entertainment Division Performance Entertainment division revenue was $3.7 million in the fourth quarter of 2004, compared to $2.0 million in the fourth quarter of 2003. The division's increase in revenues was primarily due to an increase in the number of events presented during the quarter, compared to the same quarter of 2003. The division experienced a small decrease in operating margins due to the costs associated with the event presentations. Year on year, entertainment division revenues increased $3.6 million to $11.6 million. Associated expenses increased $3.5 million to $10.5 million. Jack Lucas, Vice President, TicketsWest, said, "Our entertainment division continues to experience excellent revenue growth from period to period. We expect increased ticketing activity this year and are also looking forward to announcing our exciting Broadway Series lineup for the 2005-2006 season, which will include a 5 1/2 week engagement of The Lion King, an excellent event for combined hotel and entertainment packaging." Real Estate Division Performance Real Estate division revenue from continuing operations in the fourth quarter was steady at $1.2 million. At the same time, the division was able to decrease its expenses by $0.1 million in the fourth quarter, to $0.7 million. For all of 2004, real estate division revenue from continuing operations increased $0.2 million while expenses were flat. In January, 2005, the company engaged CB Richard Ellis as its listing broker for the national marketing and sale of the Crescent Building in downtown Spokane, Washington. CB Richard Ellis has begun actively marketing this property for sale. WestCoast Hospitality Corporation is a hospitality and leisure company primarily engaged in the ownership, management, development and franchising of mid-scale, full service hotels under its Red Lion(R) and WestCoast(R) brands. In addition, through its entertainment division, which includes its TicketsWest.com, Inc. subsidiary, it engages in event ticket distribution and promotes and presents a variety of entertainment productions. G&B Real Estate Services, its real estate division, engages in traditional real estate-related services, including developing, managing and brokering sales and leases of commercial and multi-unit residential properties. This press release contains forward-looking statements within the meaning of federal securities law, including statements concerning plans, objectives, goals, strategies, projections of future events or performance and underlying assumptions (many of which are based, in turn upon further assumptions). The forward-looking statements in this press release are inherently subject to a variety of risks and uncertainties that could cause actual results to differ materially from those expressed. Such risks and uncertainties include, among others, economic cycles; international conflicts; changes in future demand and supply for hotel rooms; competitive conditions in the lodging industry; relationships with franchisees and properties; impact of government regulations; ability to obtain financing; changes in energy, healthcare, insurance and other operating expenses; ability to sell non-core assets; ability to locate lessees for rental property and managing and leasing properties owned by third parties; dependency upon the ability and experience of executive officers and ability to retain or replace such officers as well as other matters discussed in the Company's annual report on Form 10-K for the 2003 fiscal year and in other documents filed by the Company with the Securities and Exchange Commission. Contact: Anupam Narayan Title: Executive Vice President, Chief Financial Officer Phone: 1-509-459-6100 Internet: http://www.westcoasthotels.com/ http://www.ticketswest.com/ http://www.redlion.com/ http://www.g-b.com/ WestCoast Hospitality Corporation Consolidated Statements of Operations (unaudited) ($ in thousands, except footnotes) Three months ended December 31, 2004 2003 $ Change % Change Revenue: Hotels and restaurants $32,874 $31,928 $946 3.0% Franchise, central services and development 551 691 (140) -20.3% Entertainment 3,663 1,972 1,691 85.8% Real estate 1,245 1,213 32 2.6% Corporate services 71 81 (10) -12.3% Total revenues 38,404 35,885 2,519 7.0% Operating expenses: Hotels and restaurants 30,731 30,349 382 1.3% Franchise, central services and development 400 250 150 60.0% Entertainment 3,455 1,646 1,809 109.9% Real estate 710 790 (80) -10.1% Corporate services 74 71 3 4.2% Depreciation and amortization 2,807 2,429 378 15.6% Gain on asset dispositions, net (619) (189) (430) -227.5% Total direct expenses 37,558 35,346 2,212 6.3% Undistributed corporate expenses 968 600 368 61.3% Total expenses 38,526 35,946 2,580 7.2% Operating loss (122) (61) (61) -100.0% Other income (expense): Interest expense (3,664) (2,476) (1,188) -48.0% Interest income 120 111 9 8.1% Other income (expense), net 1 (131) 132 100.8% Equity income (loss) in investments, net (11) 19 (30) -157.9% Minority interest in partnerships, net 236 75 161 214.7% Loss from continuing operations before income taxes (3,440) (2,463) (977) -39.7% Income tax benefit (1,287) (1,176) (111) -9.4% Net loss from continuing operations (2,153) (1,287) (866) -67.3% Discontinued operations: Impairment loss on discontinued operations, net of income tax benefit of $3,107 (5,770) -- (5,770) Loss from operations of discontinued business units, net of income tax benefit of $170 and $404 (317) (751) 434 57.8% Loss on discontinued operations (6,087) (751) (5,336) -710.5% Net loss (8,240) (2,038) (6,202) -304.3% Preferred stock dividend -- (625) 625 100.0% Loss applicable to common shareholders $(8,240) $(2,663) $(5,577) -209.4% EBITDA (1)(2) $(5,496) $2,276 $(7,772) -341.5% EBITDA as a percentage of revenues(2) -12.4% 5.5% EBITDA from continuing operations (1) $3,031 $2,442 $589 24.1% EBITDA from continuing operations (1)(2) as a percentage of revenues 7.9% 6.8% (1) The definition of "EBITDA" and how that measure relates to net income is discussed further in this release under Non-GAAP Financial Measures. EBITDA represents net income (or loss) before interest expense, income tax benefit or expense, depreciation, and amortization. EBITDA is not intended to represent net income as defined by generally accepted accounting principles in the United States and such information should not be considered as an alternative to net income, cash flows from operations or any other measure of performance prescribed by generally accepted accounting principles in the United States. We utilize EBITDA because management believes that investors find it to be a useful tool to perform more meaningful comparisons of past, present and future operating results and as a means to evaluate the results of core on-going operations. EBITDA from continuing operations is calculated in the same manner, but excludes the operating activities of business units identified as discontinued. (2) EBITDA as presented includes the results of discontinued operations, including a pre-tax impairment charge of $8,877,000 during the three months ended December 31, 2004. The calculation of EBITDA as a percentage of revenues is based upon total operating revenues, from both continuing and discontinued operations, of $44,349,000 and $41,246,000 for the three months ended December 31, 2004 and 2003, respectively. EBITDA from continuing operations as a percentage of revenues is based upon the operating results of continuing business units as presented in the statements. WestCoast Hospitality Corporation Earnings Per Share and Hotel Statistics (unaudited) (shares in thousands) Three months ended December 31, 2004 2003 $ Change % Change Earnings per common share: Basic Loss applicable to common shareholders before discontinued operations (1) (0.16) $(0.14) Loss on discontinued operations (0.47) (0.06) Loss applicable to common shareholders $(0.63) $(0.20) Diluted Loss applicable to common shareholders before discontinued operations (1) $(0.16) $(0.14) Loss on discontinued operations (0.47) (0.06) Loss applicable to common shareholders $(0.63) $(0.20) Weighted average shares - basic 13,069 13,006 Weighted average shares - diluted (2) 13,069 13,006 Key Comparable Hotel Statistics: Combined (owned, leased, managed and franchised) (3) Average occupancy (4)(7) 52.0% 48.3% ADR (5) $68.23 $66.73 $1.50 2.2% RevPAR (6)(7) $35.45 $32.20 $3.25 10.1% (1) The net loss used to calculate the net earnings or loss per share applicable to common shareholders before discontinued operations includes all dividends on the recently retired cumulative preferred shares if applicable for the period presented. (2) For the three months ended December 31, 2004 and 2003, all 1,083,938 and 826,009 options outstanding to purchase common stock were anti-dilutive and are therefore not included in the calculation of earnings per common share. In addition, the 286,161 convertible operating partnership ("OP") units were anti-dilutive and are therefore not included in the calculation of diluted weighted average shares for those same periods. (3) Includes all hotels owned, leased, managed and franchised for greater than one year by WestCoast Hospitality Corporation. No adjustment has been made for hotels classified as discontinued operations. (4) Average occupancy represents total paid rooms divided by total available rooms. Total available rooms represents the number of rooms available multiplied by the number of days in the reported period. (5) Average daily rate ("ADR") represents total room revenues divided by the total number of paid rooms occupied by hotel guests. (6) Revenue per available room ("RevPAR") represents total room and related revenues divided by total available rooms. (7) Rooms under significant renovation were excluded from total available rooms. Due to the short duration of renovation, in the opinion of management, excluding these rooms did not have a material impact on RevPAR or average occupancy. WestCoast Hospitality Corporation Consolidated Statements of Operations (unaudited) ($ in thousands, except footnotes) Year ended December 31, 2004 2003 $ Change % Change Revenue: Hotels and restaurants $143,193 $140,360 $2,833 2.0% Franchise, central services and development 2,600 3,642 (1,042) -28.6% Entertainment 11,615 7,980 3,635 45.6% Real estate 5,416 5,209 207 4.0% Corporate services 319 337 (18) -5.3% Total revenues 163,143 157,528 5,615 3.6% Operating expenses: Hotels and restaurants 123,858 120,852 3,006 2.5% Franchise, central services and development 1,409 1,518 (109) -7.2% Entertainment 10,452 6,974 3,478 49.9% Real estate 3,214 3,245 (31) -1.0% Corporate services 297 313 (16) -5.1% Depreciation and amortization 10,540 10,338 202 2.0% (Gain) loss on asset dispositions, net (1,148) 339 (1,487) -438.6% Conversion expenses -- 349 (349) -100.0% Total direct expenses 148,622 143,928 4,694 3.3% Undistributed corporate expenses 3,273 2,640 633 24.0% Total expenses 151,895 146,568 5,327 3.6% Operating income 11,248 10,960 288 2.6% Other income (expense): Interest expense (13,828) (9,679) (4,149) -42.9% Interest income 463 413 50 12.1% Other income (expense), net 49 (335) 384 114.6% Equity income in investments, net 78 119 (41) -34.5% Minority interest in partnerships, net 224 133 91 68.4% Income (loss) from continuing operations before income taxes (1,766) 1,611 (3,377) -209.6% Income tax (benefit) expense (876) 51 (927) -1817.6% Net income (loss) from continuing operations (890) 1,560 (2,450) -157.1% Discontinued operations: Impairment loss on discontinued operations, net of income tax benefit of $3,107 (5,770) -- (5,770) Income (loss) from operations of discontinued business units, net of income tax expense (benefit) of $202 and ($184) 375 (341) 716 210.0% Loss on discontinued operations (5,395) (341) (5,054) -1482.1% Net income (loss) (6,285) 1,219 (7,504) -615.6% Preferred stock dividend (377) (2,540) 2,163 85.2% Loss applicable to common shareholders $(6,662) $(1,321) $(5,341) -404.3% EBITDA (1)(2) $18,268 $25,269 $(7,001) -27.7% EBITDA as a percentage of revenues (2) 9.6% 13.7% EBITDA from continuing operations (1) $22,602 $21,628 $974 4.5% EBITDA from continuing operations (1)(2) as a percentage of revenues 13.9% 13.7% (1) The definition of "EBITDA" and how that measure relates to net income is discussed further in this release under Non-GAAP Financial Measures. EBITDA represents net income (or loss) before interest expense, income tax benefit or expense, depreciation, and amortization. EBITDA is not intended to represent net income as defined by generally accepted accounting principles in the United States and such information should not be considered as an alternative to net income, cash flows from operations or any other measure of performance prescribed by generally accepted accounting principles in the United States. We utilize EBITDA because management believes that investors find it to be a useful tool to perform more meaningful comparisons of past, present and future operating results and as a means to evaluate the results of core on-going operations. EBITDA from continuing operations is calculated in the same manner, but excludes the operating activities of business units identified as discontinued. (2) EBITDA as presented includes the results of discontinued operations, including a pre-tax impairment charge of $8,877,000 during the year ended December 31, 2004. The calculation of EBITDA as a percentage of revenues is based upon total operating revenues, from both continuing and discontinued operations, of $190,902,000 and $183,975,000 for the years ended December 31, 2004 and 2003, respectively. EBITDA from continuing operations as a percentage of revenues is based upon the operating results of continuing business units as presented in the statements. WestCoast Hospitality Corporation Earnings Per Share and Hotel Statistics (unaudited) (shares in thousands) Year ended December 31, 2004 2003 $ Change % Change Earnings per common share: Basic Loss applicable to common shareholders before discontinued operations (1) $(0.10) $(0.07) Loss on discontinued operations $(0.41) $(0.03) Loss applicable to common shareholders $(0.51) $(0.10) Diluted Loss applicable to common shareholders before discontinued operations $(0.10) $(0.07) Loss on discontinued operations $(0.41) $(0.03) Loss applicable to common shareholders $(0.51) $(0.10) Weighted average shares - basic 13,049 12,999 Weighted average shares - diluted (2) 13,049 12,999 Key Comparable Hotel Statistics: Combined (owned, leased, managed and franchised) (3) Average occupancy (4)(5) 58.6% 55.2% ADR (5) $71.28 $70.59 $0.69 1.0% RevPAR (6)(7) $41.75 $38.94 $2.81 7.2% (1) The net loss used to calculate the net earnings or loss per share applicable to common shareholders before discontinued operations includes all dividends on the recently retired cumulative preferred shares if applicable for the period presented. (2) For the year ended December 31, 2004 and 2003, all 1,083,938 and 826,009 options outstanding to purchase common stock were anti-dilutive and are therefore not included in the calculation of earnings per common share. In addition, the 286,161 convertible operating partnership ("OP") units were anti-dilutive and are therefore not included in the calculation of diluted weighted average shares for those same periods. (3) Includes hotels owned, leased, managed and franchised for greater than one year by WestCoast Hospitality Corporation. No adjustment has been made for hotels classified as discontinued operations. (4) Average occupancy represents total paid rooms divided by total available rooms. Total available rooms represents the number of rooms available multiplied by the number of days in the reported period. (5) Average daily rate ("ADR") represents total room revenues divided by the total number of paid rooms occupied by hotel guests. (6) Revenue per available room ("RevPAR") represents total room and related revenues divided by total available rooms. (7) Rooms under significant renovation were excluded from total available rooms. Due to the short duration of renovation, in the opinion of management, excluding these rooms did not have a material impact on RevPAR or average occupancy. WestCoast Hospitality Corporation Consolidated Balance Sheets (unaudited) ($ in thousands, except share data) December 31, December 31, 2004 2003 Assets: Current assets: Cash and cash equivalents $9,577 $7,884 Restricted cash 4,092 4,736 Accounts receivable, net 8,464 8,600 Inventories 1,831 1,808 Prepaid expenses and other 3,286 1,926 Assets held for sale: Assets of discontinued operations 61,757 63,349 Other assets held for sale 1,599 -- Total current assets 90,606 88,303 Property and equipment, net 223,132 204,199 Goodwill 28,042 28,042 Intangible assets, net 13,641 14,412 Other assets, net 9,191 18,269 Total assets $364,612 $353,225 Liabilities: Current liabilities: Accounts payable $4,841 $6,491 Accrued payroll and related benefits 4,597 4,503 Accrued interest payable 700 660 Advance deposits 188 216 Other accrued expenses 7,322 7,732 Long-term debt, due within one year 7,455 4,623 Liabilities of discontinued operations 22,879 23,580 Total current liabilities 47,982 47,805 Long-term debt, due after one year 125,756 124,064 Deferred income 8,524 9,279 Deferred income taxes 15,992 16,761 Minority interest in partnerships 2,548 3,127 Debentures due WestCoast Hospitality Capital Trust 47,423 -- Total liabilities 248,225 201,036 Stockholders' equity: Preferred stock - 5,000,000 shares authorized; $0.01 par value 588,236 issued and outstanding at December 31, 2003 -- 6 Additional paid-in capital, preferred stock -- 29,406 Common stock - 50,000,000 shares authorized; $0.01 par value; 13,079,454 and 13,006,361 shares issued and outstanding 131 130 Additional paid-in capital, common stock 84,467 84,196 Retained earnings 31,789 38,451 Total stockholders' equity 116,387 152,189 Total liabilities and stockholders' equity $364,612 $353,225 WestCoast Hospitality Corporation Consolidated Statement of Cash Flows (unaudited) ($ in thousands) Year ended December 31, 2004 2003 Operating activities: Net income (loss) $(6,285) $1,219 Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 12,827 13,032 (Gain) loss on disposition of property and equipment and other assets (1,150) 390 Non-cash reduction of preferred stock resulting in gain -- (616) Write-off of deferred loan fees -- 927 Impairment loss 8,877 -- Deferred income tax provision (769) 500 Minority interest in partnerships (315) (288) Equity in investments (78) (119) Compensation expense related to stock issuance 18 14 Provision for doubtful accounts 572 338 Change in current assets and liabilities: Restricted cash 694 (3,003) Accounts receivable (574) (168) Inventories 4 (100) Prepaid expenses and other (1,418) 569 Accounts payable (1,928) 217 Accrued payroll and related benefits 153 (1,324) Accrued interest payable 37 100 Other accrued expenses and advance deposits 224 (350) Net cash provided by operating activities 10,889 11,338 Investing activities: Purchases of property and equipment (21,898) (7,339) Proceeds from disposition of property and equipment 1,498 5,367 Proceeds from disposition of investment 94 485 Investment in WestCoast Hospitality Capital Trust (1,423) -- Advances to WestCoast Hospitality Capital Trust (2,116) -- Proceeds from collections under note receivable 1,728 -- Distributions from equity investee 449 -- Other, net (208) 177 Net cash used in investing activities (21,876) (1,310) Financing activities: Proceeds from note payable to bank 11,000 47,700 Repayment of note payable to bank (11,000) (99,800) Proceeds from debenture issuance 47,423 -- Repurchase and retirement of preferred stock (29,412) -- Proceeds from long-term debt 83 55,200 Proceeds from short-term debt -- 2,658 Repayment of long-term debt (4,507) (3,892) Proceeds from issuance of common stock under employee stock purchase plan 114 99 Preferred stock dividend payments (1,011) (2,561) Principal payments on capital lease obligations -- (268) Proceeds from option exercises 140 -- Distributions to minority owners (3) -- Additions to deferred offering costs -- (248) Additions to deferred financing costs (50) (1,547) Net cash provided by (used in) financing activities 12,777 (2,659) Net cash in discontinued operations (97) 71 Change in cash and cash equivalents: Net increase in cash and cash equivalents 1,693 7,440 Cash and cash equivalents at beginning of period 7,884 444 Cash and cash equivalents at end of period $9,577 $7,884 WestCoast Hospitality Corporation Additional Hotel Statistics (unaudited) System Hotels as of December 31, 2004 Meeting Space Hotels Rooms (sq. ft.) Owned or Leased Hotels: (1) Red Lion Hotels 38 6,642 312,528 WestCoast Hotels 3 692 40,500 Other Brands 42 153 3,945 42 7,487 356,973 Managed Hotels: Red Lion Hotels 1 150 5,234 WestCoast Hotels 1 72 1,800 Other Brands 1 254 36,000 3 476 43,034 Franchised Hotels: Red Lion Hotels 19 3,171 104,759 WestCoast Hotels 3 389 27,784 22 3,560 132,543 Total 67 11,523 532,550 Comparable Hotel Statistics (2) Three months ended December 31, 2004 Average Occupancy (3)(6) ADR (4) RevPAR (5)(6) Owned or Leased Hotels: Continuing Operations 53.1% $68.18 $36.23 Discontinued Operations 39.9% 55.84 22.29 50.1% 65.95 33.07 Combined System Wide (7) 52.0 $68.23 $35.45 Red Lion Hotels (Owned, Leased, Managed and Franchised) (8) 52.7% $67.16 $35.37 Year ended December 31, 2004 Average Occupancy (3)(6) ADR (4) RevPAR (5)(6) Owned or Leased Hotels: Continuing Operations 60.4% $71.31 $43.06 Discontinued Operations 49.1% 58.97 28.93 57.8% 68.94 39.86 Combined System Wide (7) 58.6% $71.28 $41.75 Red Lion Hotels (Owned, Leased, Managed and Franchised) (8) 59.2% $70.24 $41.60 Three months ended December 31, 2003 Average Occupancy (3)(6) ADR (4) RevPAR (5)(6) Owned or Leased Hotels: 50.4% $66.42 $33.51 Continuing Operations 36.8% 51.71 19.02 Discontinued Operations 47.3% 63.83 30.22 Combined System Wide (7) 48.3% $66.73 $32.20 Red Lion Hotels (Owned, Leased, Managed and Franchised) (8) 49.3% $65.69 $32.36 Year ended December 31, 2003 Average Occupancy (3)(6) ADR (4) RevPAR (5)(6) Owned or Leased Hotels: Continuing Operations 57.5% $70.94 $40.82 Discontinued Operations 46.7% 57.46 26.81 55.1% 68.35 37.65 Combined System Wide (7) 55.2% $70.59 $38.94 Red Lion Hotels (Owned, Leased, Managed and Franchised) (8) 56.0% $69.54 $38.92 (1) Statistics include 11 hotels previously identified as discontinued business units, aggregating 1,649 rooms and 57,645 square feet of meeting space. (2) Includes all hotels owned, leased, managed and franchised for greater than one year by WestCoast Hospitality Corporation. (3) Average occupancy represents total paid rooms divided by total available rooms. Total available rooms represents the number of rooms available multiplied by the number of days in the reported period. (4) Average daily rate ("ADR") represents total room revenues divided by the total number of paid rooms occupied by hotel guests. (5) Revenue per available room ("RevPAR") represents total room and related revenues divided by total available rooms. (6) Rooms under significant renovation were excluded from total available rooms. Due to the short duration of renovation, in the opinion of management, excluding these rooms did not have a material impact on RevPAR or average occupancy. (7) Includes all hotels owned, leased, managed and franchised for greater than one year by WestCoast Hospitality Corporation. No adjustment has been made for hotels classified as discontinued operations. (8) Includes all hotels owned, leased, managed and franchised for greater than one year operated under the Red Lion brand name. No adjustment has been made for hotels classified as discontinued operations. WestCoast Hospitality Corporation Reconciliation of EBITDA to Net Income (unaudited) ($ in thousands) Three months ended Year ended December 31, December 31, 2004 2003 2004 2003 EBITDA from continuing operations $3,031 $2,442 $22,602 $21,628 Income tax benefit (expense) - continuing operations 1,287 1,176 876 (51) Interest expense - continuing operations (3,664) (2,476) (13,828) (9,679) Depreciation and amortization - continuing operations (2,807) (2,429) (10,540) (10,338) Net income (loss) from continuing operations (2,153) (1,287) (890) 1,560 Loss on discontinued operations (6,087) (751) (5,395) (341) Net income (loss) $(8,240) $(2,038) $(6,285) $1,219 EBITDA $(5,496) $2,276 $18,268 $25,269 Income tax benefit 4,564 1,581 3,781 133 Interest expense (4,055) (2,911) (15,507) (11,151) Depreciation and amortization (3,253) (2,984) (12,827) (13,032) Net income (loss) $(8,240) $(2,038) $(6,285) $1,219 NON-GAAP FINANCIAL MEASURES EBITDA is defined as net income (or loss), before interest, taxes, depreciation and amortization. EBITDA is considered a non-GAAP financial measurement. We believe it is a useful financial performance measure for us and for our shareholders and is a complement to net income and other financial performance measures provided in accordance with generally accepted accounting principles in the United States ("GAAP"). EBITDA from continuing operations is calculated in the same manner, but excludes the operating results of business units identified as discontinued under GAAP. We use EBITDA to measure the financial performance of our owned and leased hotels because it excludes interest, taxes, depreciation and amortization, which bear little or no relationship to operating performance. By excluding interest expense, EBITDA measures our financial performance irrespective of our capital structure or how we finance our properties and operations. We generally pay federal and state income taxes on a consolidated basis, taking into account how the applicable taxing laws apply to our company in the aggregate. By excluding taxes on income, we believe EBITDA provides a basis for measuring the financial performance of our operations excluding factors that our hotels and other operations cannot control. By excluding depreciation and amortization expense, which can vary from hotel to hotel based on historical cost and other factors unrelated to the hotels' financial performance, EBITDA measures the financial performance of our hotels without regard to their historical cost. For all of these reasons, we believe that EBITDA provides us and investors with information that is relevant and useful in evaluating our business. However, because EBITDA excludes depreciation and amortization, it does not measure the capital we require to maintain or preserve our long-lived assets. In addition, because EBITDA does not reflect interest expense, it does not take into account the total amount of interest we pay on outstanding debt nor does it show trends in interest costs due to changes in our borrowings or changes in interest rates. EBITDA, as defined by us, may not be comparable to EBITDA as reported by other companies that do not define EBITDA exactly as we define the term. Because we use EBITDA to evaluate our financial performance, we reconcile all EBITDA measures to net income, which is the most comparable financial m DATASOURCE: WestCoast Hospitality Corporation CONTACT: Anupam Narayan, Executive Vice President, Chief Financial Officer, of WestCoast Hospitality Corporation, +1-509-459-6100, or Web site: http://www.westcoasthotels.com/

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