Fairmont Hotels & Resorts Inc. Notes to Consolidated Financial
Statements (Stated in millions of U.S. dollars) (Unaudited) 1.
Fairmont Hotels & Resorts Inc. ("FHR" or the "Company") has
operated and owned hotels and resorts for over 118 years, and
currently manages properties, principally under the Fairmont and
Delta brands. As at December 31, 2005, FHR managed or franchised 88
luxury and first-class hotels. FHR owns Fairmont Hotels Inc.
("Fairmont") which, as at December 31, 2005, managed 50 luxury
properties in major city centers and key resort destinations
throughout Canada, the United States, Mexico, Bermuda, Barbados,
the United Kingdom, Monaco, Kenya and the United Arab Emirates.
Delta Hotels Limited ("Delta"), a wholly-owned subsidiary of FHR,
managed or franchised 38 Canadian hotels and resorts as at December
31, 2005. In addition to hotel and resort management, as at
December 31, 2005, FHR had hotel ownership interests ranging from
approximately 15% to 100% in 21 properties, located in Canada, the
United States, Mexico, Bermuda, Barbados, Monaco and the United
Arab Emirates. FHR also has an approximate 24% equity interest in
Legacy Hotels Real Estate Investment Trust ("Legacy") as at
December 31, 2005, which owns 24 hotels and resorts across Canada
and the United States. FHR also owns real estate properties that
are suitable for either commercial or residential development, and
has a vacation ownership product. Results for the three months
ended December 31, 2005 are not necessarily indicative of the
results that may be expected for the full year due to seasonal and
short-term variations. Revenues are typically higher in the second
and third quarters versus the first and fourth quarters of the
year. The income tax rate is also higher in the first quarter, as
hotels in non-taxable jurisdictions typically generate losses and
certain equity investments usually produce losses without tax
benefits. 2. These quarterly consolidated financial statements do
not include all disclosures as required by Canadian generally
accepted accounting principles ("GAAP") for annual consolidated
financial statements and should be read in conjunction with the
audited consolidated financial statements for the year ended
December 31, 2004. The accounting policies used in the preparation
of these quarterly consolidated financial statements are consistent
with the accounting policies used in the December 31, 2004 audited
consolidated financial statements, except as discussed below.
Computation of diluted earnings per share The Emerging Issues
Committee of the Canadian Institute of Chartered Accountants
("CICA") issued Abstract 155 "The Effect of Contingently
Convertible Instruments on the Computation of Diluted Earnings Per
Share" ("EIC 155") in September 2005. This guidance requires the
inclusion of contingently convertible debt securities with a market
price trigger to be included in the computation of diluted earnings
per common share, as determined under the if-converted method. The
guidance is effective for interim and annual periods beginning on
or after October 1, 2005 with retroactive restatement of previously
reported earnings per share. FHR has adopted this guidance for
December 31, 2005 (note 9) resulting in a decrease to previously
reported diluted earnings per share of $0.05 for the year ended
December 31, 2004. Liabilities and equity Effective January 1,
2005, FHR adopted the CICA's new accounting requirements on the
classification of financial instruments as liabilities or equity.
The CICA amended its disclosure requirements surrounding the
presentation of financial instruments that may be settled in cash
or by an issuer's own equity instruments, at the issuer's
discretion, as liabilities. Adoption of this new standard did not
have an impact on the Company's financial statements. Determining
whether an arrangement contains a lease In December 2004, the
Emerging Issues Committee issued Abstract 150, "Determining whether
an Arrangement Contains a Lease" ("EIC 150"). An entity may enter
into certain arrangements comprising a transaction or a series of
related transactions that does not take the legal form of a lease
but conveys a right to use a tangible asset (e.g. an item of
property, plant or equipment) in return for a payment or series of
payments. The Company is required to adopt the recommendations of
EIC 150 for affected transactions commencing or modified after
December 9, 2004. Adoption of this new standard did not have an
impact on the Company's financial statements. Variable interest
entities Effective January 1, 2005, the Company adopted Accounting
Guideline No. 15, "Consolidation of Variable Interest Entities"
("AcG-15"), which established criteria to identify variable
interest entities ("VIE") and the primary beneficiary of such
entities. Entities that qualify as VIEs must be consolidated by
their primary beneficiary. Adoption of this new standard did not
have an impact on the Company's financial statements. 3. On
December 23, 2005, FHR completed the sale of The Fairmont Orchid,
Hawaii for gross cash proceeds of $250.0. Working capital
adjustments and transaction costs resulted in net cash proceeds of
$240.6. The property had a net book value of approximately $141.
FHR recognized a gain of $105.8, before income taxes of
approximately $44. The proceeds of The Fairmont Orchid, Hawaii sale
were paid to a Qualified Intermediary on closing of the sale in
anticipation of the company undertaking a like-kind exchange, as
defined for U.S. tax purposes. The required Identification
Statement was filed on February 6, 2006. Where identified
properties are acquired on a timely basis, the full amount of the
cash tax related to the sale will be deferred. The resort is being
managed by Fairmont under a long-term management contract. 4. In
May 2005, FHR entered into long-term contracts to manage five
properties in Kenya. FHR invested $10.0 in connection with the five
management contracts. A portion of the investment was funded as a
loan and a portion of the investment financed the acquisition of an
approximate 15% interest in a corporation owned jointly with
Kingdom Hotels Investments and IFA Hotels & Resorts. The
corporation holds an ownership interest in five Kenyan properties
known as The Norfolk Hotel, Mount Kenya Safari Club, The Aberdare
Country Club, The Ark and the Mara Safari Club. Based on the
relative fair value of the management contracts and the loan, $3.8
of the $10.0 was allocated to the management contracts. The
investment of $5.0 was accounted for using the equity method due to
significant influence through contractual arrangements. $1.2 was
allocated to the loan, which has a face value of $5.0, bears no
interest and is payable in 2020. In November 2005, the Company sold
its 15% equity interest in the corporation for $5.0, resulting in
no gain or loss on the sale. In 2005, FHR invested an additional
$5.7 relating to the 19.9% interest in the Fairmont Mayakoba,
Riviera Maya and a management contract. The investment is accounted
for using the equity method due to significant influence through
contractual arrangements. The resort will be managed by Fairmont
under a long-term management contract. Based on the relative fair
value of the management contract, approximately $3.7 of the $5.7
was allocated to intangible assets relating to the management
contract. 5. In January 2005, FHR entered into a long-term contract
to manage The Savoy in London, England. In connection with this,
FHR agreed to invest approximately $63.0 to obtain the management
contract and provide loans to the hotel's owners. As at December
31, 2005, FHR had funded $54.3 of the total commitment, of which
$22.8 related to the management contract, and $31.5 related to a
loan receivable, due in 2015 and bearing interest at 7.75%. 6. In
the quarter ended June 30, 2005, the Company reached a favorable
tax settlement with the Canada Revenue Agency and recorded a $14.6
recovery of current income taxes. During the quarter ended
September 30, 2005, the Company recorded an additional income tax
recovery of $26.1, net of income taxes payable of approximately
$2.1 on interest income, to reflect the final assessment. 7. During
the quarter ended December 31, 2005, FHR sold two parcels of land
in Toronto for proceeds of $42.8, including a vendor take-back
mortgage of $5.4 due in 2006. FHR recorded an after-tax gain of
$17.1 related to these transactions. In July 2005, FHR sold a
parcel of land in Vancouver for net proceeds and an after-tax gain
of $17.9. These transactions did not give rise to any income taxes
payable. 8. In July 2005, FHR invested $3.3 to secure a long-term
management contract related to the Fairmont Newport Beach. 9.
Shareholders' equity December 31, December 31, 2005 2004
------------- ------------- Common shares $ 1,101.3 $ 1,163.1 Other
equity 19.2 19.2 Treasury stock - (5.6) Contributed surplus 144.1
142.4 Foreign currency translation adjustments 156.9 142.1 Retained
earnings 269.5 189.2 ------------- ------------- $ 1,691.0 $
1,650.4 ------------- ------------- Diluted earnings (loss) is
calculated as follows: Three months ended Year ended December 31
December 31 2005 2004 2005 2004 ---------- ---------- ----------
---------- Reported net income (loss) $ 68.4 $ (4.4) $ 167.5 $
155.8 Interest expense adjustment(1) 2.6 2.6 10.4 10.3 ----------
---------- ---------- ---------- Adjusted net income (loss) $ 71.0
$ (1.8) $ 177.9 $ 166.1 ---------- ---------- ---------- ----------
The diluted weighted-average number of common shares outstanding
(in millions) is calculated as follows: Three months ended Year
ended December 31 December 31 2005 2004 2005 2004 ----------
---------- ---------- ---------- (restated) (restated)
Weighted-average number of common shares outstanding - basic 72.2
76.8 74.3 78.4 Stock options(1) 1.1 1.0 1.0 0.8 Dilutive effect of
contingently convertible debt(1) 7.2 7.2 7.2 7.2 ----------
---------- ---------- ---------- Weighted-average number of common
shares outstanding - diluted 80.5 85.0 82.5 86.4 ----------
---------- ---------- ---------- (1) For the three months ended
December 31, 2004, the impact of stock options and contingently
convertible debt has been excluded from the calculation of diluted
loss per common share, as their effect is anti-dilutive. Effective
October 31, 2005, FHR may repurchase for cancellation up to 10% of
its outstanding common shares. The amounts and timing of
repurchases are at FHR's discretion. During the year ended December
31, 2005, under the current and previous normal course issuer bids,
FHR repurchased 4,376,000 shares (450,400 during the fourth
quarter). Also, an additional 166,100 shares that were classified
as treasury stock at December 31, 2004, were cancelled in 2005.
Total consideration relating to the repurchase amounted to $141.2
($14.9 for the fourth quarter), of which $65.8 was charged to
common shares ($6.8 for the fourth quarter) and $75.4 was charged
to retained earnings ($8.1 for the fourth quarter). Of the $5.6 of
treasury stock outstanding at December 31, 2004, $2.6 was
reclassified to common shares and $3.0 to retained earnings in
2005. During the year ended December 31, 2005, FHR issued 320,487
shares (173,797 for the fourth quarter) pursuant to the Stock
Option Plan for which $6.6 was credited to common shares ($3.7 for
the fourth quarter) for proceeds from options exercised. At
December 31, 2005, 72,171,735 common shares were outstanding
(December 31, 2004 - 76,393,348). During the twelve months ended
December 31, 2005, 320,000 stock options were granted (nil in the
fourth quarter), and the cost of this stock-based compensation was
recorded based on the estimated fair value of these options.
Assuming FHR elected to recognize the cost of its stock-based
compensation based on the estimated fair value of stock options
granted after January 1, 2002 but before January 1, 2003, net
income (loss) and basic and diluted earnings (loss) per share would
have been: Three months ended Year ended December 31 December 31
2005 2004 2005 2004 ---------- ---------- ---------- ----------
Reported net income (loss) $ 68.4 $ (4.4) $ 167.5 $ 155.8 Net
income (loss) assuming fair value method used $ 68.3 $ (4.5) $
167.1 $ 155.4 Assuming fair value method used Basic earnings (loss)
per share $ 0.95 $ (0.06) $ 2.25 $ 1.98 Diluted earnings (loss) per
share $ 0.88 $ (0.06) $ 2.15 $ 1.92 10. Changes in non-cash working
capital: Three months ended Year ended December 31 December 31 2005
2004 2005 2004 ---------- ---------- ---------- ----------
(Increase) decrease in current assets Accounts receivable $ 8.5 $
8.4 $ 1.6 $ (22.7) Inventory 0.5 - 1.4 (1.2) Prepaid expenses and
other (0.7) 5.0 (3.4) 3.7 Increase (decrease) in current
liabilities Accounts payable and accrued liabilities 8.6 (2.1) 29.3
1.0 Income taxes payable 83.5 (44.9) 25.7 1.3 ---------- ----------
---------- ---------- $ 100.4 $ (33.6) $ 54.6 $ (17.9) ----------
---------- ---------- ---------- 11. Segmented Information FHR has
four reportable segments in two core business activities, ownership
and management operations. The segments are hotel ownership, real
estate activities, Fairmont and Delta. Results of individual
properties comprise one operating segment. Hotel ownership consists
of real estate interests ranging from approximately 15% to 100% in
21 properties and an approximate 24% equity interest in Legacy,
which owns 24 hotels and resorts across Canada and the United
States. Real estate activities consist primarily of two undeveloped
land blocks in Toronto and Vancouver and a vacation ownership
product. Fairmont is an international luxury hotel and resort
management company and Delta is a Canadian first-class hotel and
resort management company. The performance of all segments is
evaluated by management primarily on earnings before interest,
taxes and amortization ("EBITDA"), which management defines as
income before interest, income taxes and amortization. EBITDA
includes income or loss from equity investments. General and
administrative expenses, other expenses, gain on sales of
investments and hotel assets, amortization, interest and income
taxes are not allocated to the individual segments. All
transactions among operating segments are conducted at fair market
value. The following tables present revenues, EBITDA, total assets
and capital expenditures for FHR's reportable segments: Three
months ended December 31, 2005
------------------------------------------------------ Ownership
Management --------------------- --------------------- General and
Real adminis- estate trative Hotel acti- and Ownership vities
Fairmont Delta other (e) ---------- ---------- ----------
---------- ---------- Operating revenues (d) $ 150.8 $ 49.4 $ 20.5
$ 3.8 $ - Other revenues from managed and franchised properties - -
9.9 2.6 - Loss from equity investments and other (1.8) - - - -
EBITDA (b) 15.7 16.9 9.6 2.9 71.5 Total assets (c) 1,904.5 104.2
455.8 81.9 - Capital expenditures 18.6 - 1.5 - - Inter- segment
elimina- tion (a) Total ---------- ---------- Operating revenues
(d) $ (4.6) $ 219.9 Other revenues from managed and franchised
properties - 12.5 ---------- 232.4 Loss from equity investments and
other - (1.8) EBITDA (b) (0.4) 116.2 Total assets (c) (22.5)
2,523.9 Capital expenditures - 20.1 Three months ended December 31,
2004 ------------------------------------------------------
Ownership Management --------------------- ---------------------
General and Real adminis- estate trative Hotel acti- and Ownership
vities Fairmont Delta other (e) ---------- ---------- ----------
---------- ---------- Operating revenues (d) $ 137.8 $ 4.8 $ 14.4 $
3.2 $ - Other revenues from managed and franchised properties - -
6.8 2.3 - Loss from equity investments and other (1.4) - - - -
EBITDA (b) 21.2 (1.6) 9.3 2.0 (9.7) Total assets (c) 1,871.6 100.1
365.9 79.4 - Capital expenditures 14.5 - 1.5 - - Inter- segment
elimina- tion (a) Total ---------- ---------- Operating revenues
(d) $ (4.4) $ 155.8 Other revenues from managed and franchised
properties - 9.1 ---------- 164.9 Loss from equity investments and
other - (1.4) EBITDA (b) (0.8) 20.4 Total assets (c) (14.4) 2,402.6
Capital expenditures - 16.0 Year ended December 31, 2005
------------------------------------------------------ Ownership
Management --------------------- --------------------- General and
Real adminis- estate trative Hotel acti- and Ownership vities
Fairmont Delta other (e) ---------- ---------- ----------
---------- ---------- Operating revenues(d) $ 670.2 $ 78.2 $ 68.2 $
13.9 $ - Other revenues from managed and franchised properties - -
36.1 11.0 - Loss from equity investments and other - - - - - EBITDA
(b) 140.8 33.3 45.9 9.9 34.9 Total assets (c) 1,904.5 104.2 455.8
81.9 - Capital expenditures 62.6 - 8.9 - - Inter- segment elimina-
tion (a) Total ---------- ---------- Operating revenues (d) $
(20.1) $ 810.4 Other revenues from managed and franchised
properties - 47.1 ---------- 857.5 Loss from equity investments and
other - - EBITDA (b) - 264.8 Total assets (c) (22.5) 2,523.9
Capital expenditures - 71.5 Year ended December 31, 2004
------------------------------------------------------ Ownership
Management --------------------- --------------------- General and
Real adminis- estate trative Hotel acti- and Ownership vities
Fairmont Delta other (e) ---------- ---------- ----------
---------- ---------- Operating revenues (d) $ 654.1 $ 31.0 $ 54.6
$ 12.8 $ - Other revenues from managed and franchised properties -
- 27.7 9.6 - Loss from equity investments and other (0.2) - - - -
EBITDA (b) 158.0 5.8 40.0 8.0 114.1 Total assets (c) 1,871.6 100.1
365.9 79.4 - Capital expenditures 70.1 - 4.2 - - Inter- segment
elimina- tion (a) Total ---------- ---------- Operating revenues
(d) $ (21.1) $ 731.4 Other revenues from managed and franchised
properties - 37.3 ---------- 768.7 Loss from equity investments and
other - (0.2) EBITDA (b) (1.2) 324.7 Total assets (c) (14.4)
2,402.6 Capital expenditures - 74.3 (a) Operating revenues include
management fees that are charged by Fairmont of $4.5 (2004 - $4.3)
and $19.6 (2004 - $20.7) for the three months and year ended
December 31, 2005, respectively, and Delta of $0.1 (2004 - $0.1)
and $0.5 (2004 - $0.4) for the three months and year ended December
31 2005, respectively, to the hotel ownership operations, which are
eliminated on consolidation. EBITDA includes expenses not
reimbursed relating to marketing and reservation services performed
by FHR under the terms of its hotel management and franchise
agreements. Total assets have been reduced for the elimination of
corporate assets and inter-segment loans. (b) A reconciliation of
aggregate EBITDA of the reportable segments to net income is as
follows: Three months ended Year ended December 31 December 31 2005
2004 2005 2004 ---------- ---------- ---------- ---------- EBITDA $
116.2 $ 20.4 $ 264.8 $ 324.7 Amortization (20.4) (19.6) (70.5)
(73.9) Interest expense, net (3.2) (7.4) (22.4) (33.1) Income tax
(expense) recovery (24.2) 2.2 (4.4) (61.9) ---------- ----------
---------- ---------- Net income (loss) $ 68.4 $ (4.4) $ 167.5 $
155.8 ---------- ---------- ---------- ---------- (c) Hotel
ownership assets include $154.5 (2004 - $158.3) of investments
accounted for using the equity method. (d) A breakdown of the
Company's hotel ownership operations revenues are as follows: Three
months ended Year ended December 31 December 31 2005 2004 2005 2004
---------- ---------- ---------- ---------- Rooms revenue $ 73.6 $
68.8 $ 346.4 $ 356.2 Food and beverage revenue 57.4 50.8 233.5
214.7 Other 19.8 18.2 90.3 83.2 ---------- ---------- ----------
---------- $ 150.8 $ 137.8 $ 670.2 654.1 ---------- ----------
---------- ---------- (e) General and administrative and other
includes general and administrative expenses, other expenses, as
well as gain on sales of investments and hotel assets of $105.8
(2004-$143.7). (f) In 2004, hotel ownership expenses were reduced
by business interruption insurance proceeds of $10.8 relating to
the impact Hurricane Fabian had on FHR's two Bermuda hotels. 12.
FHR recorded pension and other post employment benefit expenses as
follows: Three months ended Year ended December 31 December 31 2005
2004 2005 2004 ---------- ---------- ---------- ---------- Pension
$ 9.0 $ (0.8) $ 10.4 $ 0.1 Other post-employment benefits 0.1 0.1
0.4 0.4 ---------- ---------- ---------- ---------- $ 9.1 $ (0.7) $
10.8 $ 0.5 ---------- ---------- ---------- ---------- 13. In
November 2005, FHR initiated a restructuring plan. In connection
with this plan, the Company incurred $3.3 of severance costs and
$1.2 of lease termination costs of which $0.9 has been recorded as
an accrued liability at December 31, 2005. Approximately $0.8 of
the accrued liability relates to severance costs. No additional
costs are expected from this plan. Of the $3.3 of severance costs,
$2.5 were expensed to hotel ownership and $0.8 were expensed to
management operations and general and administrative. Lease
termination costs of $1.2 were expensed to other. 14. Other During
the fourth quarter, the Company's Board of Directors formed a
Special Committee to review a number of shareholder value-creating
strategic options in response to a take over bid. In connection
with the evaluation of alternatives, FHR incurred an expense of
$10.7 relating to financial and legal advisory fees for services
rendered to assist the Special Committee and Board of Directors.
During the fourth quarter, the Company recorded a provision of $7.6
related to the impairment of long-term advances receivable. During
the third quarter, the Company recorded a provision of $11.2
related to outstanding legal obligations associated with a
predecessor company of Fairmont. During the second quarter, the
Company undertook certain development activities related to a major
portfolio acquisition, which the Company did not complete. A total
of $3.4 was expensed relating to transaction costs. 15. During the
fourth quarter, FHR entered into a mortgage loan for $75.0. The
mortgage, which is secured by a second charge against The Fairmont
Scottsdale Princess and is non-recourse to FHR, bears interest at
one month LIBOR plus 195 basis points and is due January 1, 2009.
FHR has entered into an interest rate contract to cap the LIBOR
rate at 7.5%. The term of the mortgage is extendible by up to two
years subject to meeting certain conditions. The proceeds from the
loan were used to repay the outstanding mortgage of $59.9 on The
Fairmont Copley Plaza, Boston and for general corporate purposes.
16. Subsequent events On January 30, 2006, FHR announced that it
has entered into an Acquisition Agreement whereby Kingdom Hotels
International and Colony Capital will acquire all of FHR's
outstanding common shares at a price of $45.00 per share. The Board
of Directors has agreed to recommend to the shareholders that they
vote in favor of the transaction. The transaction is to be carried
out by way of a statutory plan of arrangement and, accordingly,
will be subject to the approval of 66.67% of the votes to be cast
by FHR shareholders at a meeting of shareholders anticipated to
take place in April. The proposed transaction is expected to close
in the second quarter of 2006 after receipt of shareholder and
court approvals. As a result of this transaction, FHR will incur
additional costs of up to $25 relating to financial and legal
advisory fees for services rendered. 17. Certain of the prior
period figures have been reclassified to conform with the
presentation adopted for 2005. (xx) Index of supplementary
financial and operating information to follow (xx) Fairmont Hotels
& Resorts Inc. Index of Supplementary Financial and Operating
Information Page ---- Comparable operating statistics for the three
months and year ended December 31, 2005 ii 2004 hotel ownership
revenues and EBITDA adjusted for assets sales iv Comparable
operating statistics for hotel portfolio as of December 31, 2005 v
Summary of hotel portfolio at December 31, 2005 and 2004 vii
Fairmont Hotels & Resorts Inc. Comparable operating statistics
for the three months and the year ended December 31, 2005
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Three months ended Year ended December 31 December 31
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2005 2004 Variance 2005 2004 Variance
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OWNED HOTELS
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Worldwide 13 properties/ 6,206 rooms
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RevPAR $107.20 $98.53 8.8% $123.64 $116.04 6.5%
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ADR 179.92 173.39 3.8% 195.77 186.51 5.0%
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Occupancy 59.6% 56.8% 2.8 63.2% 62.2% 1.0 points points
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Canada 7 properties/ 3,336 rooms
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RevPAR $90.47 $84.76 6.7% $122.67 $114.93 6.7%
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ADR 157.83 149.14 5.8% 187.40 174.01 7.7%
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Occupancy 57.3% 56.8% 0.5 65.5% 66.0% (0.5) points points
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U.S 2 properties/ 1,034 rooms
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RevPAR $154.22 $140.67 9.6% $159.00 $146.02 8.9%
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ADR 217.80 225.67 (3.5%) 214.02 220.37 (2.9%)
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Occupancy 70.8% 62.3% 8.5 74.3% 66.3% 8.0 points points
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International 4 properties/ 1,836 rooms
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RevPAR $111.09 $99.81 11.3% $105.50 $101.18 4.3%
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ADR 193.65 185.79 4.2% 200.16 190.69 5.0%
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Occupancy 57.4% 53.7% 3.7 52.7% 53.1% (0.4) points points
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FAIRMONT MANAGED HOTELS(1)
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Worldwide 39 hotels/ 19,142 rooms
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RevPAR $118.70 $106.13 11.8% $128.37 $115.44 11.2%
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ADR 190.49 178.35 6.8% 194.94 180.03 8.3%
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Occupancy 62.3% 59.5% 2.8 65.8% 64.1% 1.7 points points
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Canada 20 properties/ 10,095 rooms
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RevPAR $91.52 $85.61 6.9% $108.04 $100.18 7.8%
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ADR 151.67 144.21 5.2% 165.63 153.43 8.0%
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Occupancy 60.3% 59.4% 0.9 65.2% 65.3% (0.1) points points
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U.S. 14 properties/ 6,817rooms
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RevPAR $154.17 $134.07 15.0% $159.13 $139.79 13.8%
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ADR 235.89 226.41 4.2% 230.75 220.11 4.8%
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Occupancy 65.4% 59.2% 6.2 69.0% 63.5% 5.5 points points
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International 5 properties/ 2,230 rooms
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RevPAR $131.23 $112.17 17.0% $125.71 $109.52 14.8%
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ADR 212.17 184.00 15.3% 211.43 179.81 17.6%
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Occupancy 61.8% 61.0% 0.8 59.5% 60.9% (1.4) points points
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DELTA MANAGED HOTELS(1) Worldwide 27 properties/ 8,175 rooms
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RevPAR $69.06 $60.95 13.3% $73.03 $64.43 13.3%
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ADR 108.35 100.52 7.8% 107.98 98.53 9.6%
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Occupancy 63.7% 60.6% 3.1 67.6% 65.4% 2.2 points points
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(1) Includes hotels owned by Fairmont Hotels & Resorts Inc.
Comparable hotels and resorts are considered to be properties that
were wholly-owned by or fully open under FHR management for at
least the entire current and prior period. Comparable hotels and
resorts statistics exclude properties under major renovation that
would have a significant adverse effect on the properties' primary
operations. The following properties were excluded: Owned: The
Fairmont Southampton; The Fairmont Kea Lani, Maui (sold July 2004),
The Fairmont Glitter Bay (sold July 2004), The Fairmont Orchid,
Hawaii (sold December 2005) Fairmont Managed: The Fairmont
Southampton; Fairmont Monte Carlo, The Savoy, A Fairmont Hotel, The
Norfolk Hotel, Mount Kenya Safari Club, The Aberdare Country Club,
The Ark, Mara Safari Club, The Fairmont Glitter Bay, The Fairmont
New Orleans, Fairmont Newport Beach, The Plaza Delta Managed: Delta
Meadowvale and Delta franchised hotels Fairmont Hotels &
Resorts Inc. 2004 hotel ownership revenues and EBITDA adjusted for
assets sales 2004
-------------------------------------------------- First Second
Third Fourth Revenues Quarter Quarter Quarter Quarter Year -------
------- ------- ------- ---- (In millions of US dollars) Hotel
ownership revenues adjusted for sold hotels $ 131.1 $ 157.1 $ 176.7
$ 137.9 $ 602.8 Add: hotels sold 24.3 23.4 3.6 - 51.3
-------------------------------------------------- Hotel ownership
revenues $ 155.4 $ 180.5 $ 180.3 $ 137.9 $ 654.1
-------------------------------------------------- 2004
-------------------------------------------------- First Second
Third Fourth EBITDA Quarter Quarter Quarter Quarter Year -------
------- ------- ------- ---- (In millions of US dollars) Hotel
ownership EBITDA adjusted for sold hotels $ 25.4 $ 37.9 $ 54.2 $
22.6 $ 140.1 Add: hotels sold 9.8 8.7 1.5 - 20.0
-------------------------------------------------- Hotel ownership
EBITDA 35.2 46.6 55.7 22.6 160.1 Gain on sales of investments and
hotels sales - - 144.2 (0.5) 143.7 EBITDA contribution (deduction)
from other segments (1.1) 15.9 7.8 (1.7) 20.9
-------------------------------------------------- Total EBITDA
34.1 62.5 207.7 20.4 324.7 Deduct (Add): Amortization 19.5 18.0
16.8 19.6 73.9 Interest expense, net 10.0 9.0 6.7 7.4 33.1 Income
tax expense (recovery), net 5.2 6.5 52.4 (2.2) 61.9
-------------------------------------------------- Net Income
(loss) $ (0.6) $ 29.0 $ 131.8 $ (4.4) $ 155.8
-------------------------------------------------- Fairmont Hotels
& Resorts Inc. Operating statistics for comparable hotels as of
December 31, 2005
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First Second Third First Second Third Quarter Quarter Quarter
Quarter Quarter Quarter 2005 2005 2005 2004 2004 2004
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OWNED HOTELS
-------------------------------------------------------------------------
Worldwide
-------------------------------------------------------------------------
RevPAR $121.77 $118.12 $147.35 $112.17 $113.62 $139.68
-------------------------------------------------------------------------
ADR 195.42 187.51 217.61 183.02 180.08 206.50
-------------------------------------------------------------------------
Occupancy 62.3% 63.0% 67.7% 61.3% 63.1% 67.6%
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Canada
-------------------------------------------------------------------------
RevPAR $101.18 $112.21 $186.11 $93.86 $106.23 $173.78
-------------------------------------------------------------------------
ADR 166.38 170.27 239.58 154.37 156.93 220.81
-------------------------------------------------------------------------
Occupancy 60.8% 65.9% 77.7% 60.8% 67.7% 78.7%
-------------------------------------------------------------------------
-------------------------------------------------------------------------
U.S.
-------------------------------------------------------------------------
RevPAR $183.05 $169.16 $130.22 $170.08 $159.34 $114.38
-------------------------------------------------------------------------
ADR 266.03 210.61 168.69 262.47 215.69 178.45
-------------------------------------------------------------------------
Occupancy 68.8% 80.3% 77.2% 64.8% 73.9% 64.1%
-------------------------------------------------------------------------
-------------------------------------------------------------------------
International
-------------------------------------------------------------------------
RevPAR $124.58 $100.11 $86.59 $111.96 $101.10 $91.97
-------------------------------------------------------------------------
ADR 202.98 208.76 195.27 186.04 207.08 185.61
-------------------------------------------------------------------------
Occupancy 61.4% 48.0% 44.3% 60.2% 48.8% 49.6%
-------------------------------------------------------------------------
-------------------------------------------------------------------------
FAIRMONT MANAGED HOTELS(1)
-------------------------------------------------------------------------
Worldwide
-------------------------------------------------------------------------
RevPAR $117.44 $129.05 $147.88 $105.43 $118.23 $131.72
-------------------------------------------------------------------------
ADR 192.72 189.82 205.35 173.54 176.36 190.54
-------------------------------------------------------------------------
Occupancy 60.9% 68.0% 72.0% 60.8% 67.0% 69.1%
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Canada
-------------------------------------------------------------------------
RevPAR $81.84 $108.17 $149.35 $75.18 $101.20 $137.64
-------------------------------------------------------------------------
ADR 145.86 158.57 196.85 130.30 146.22 184.41
-------------------------------------------------------------------------
Occupancy 56.1% 68.2% 75.9% 57.7% 69.2% 74.6%
-------------------------------------------------------------------------
-------------------------------------------------------------------------
U.S.
-------------------------------------------------------------------------
RevPAR $158.24 $163.75 $160.38 $143.88 $146.77 $134.55
-------------------------------------------------------------------------
ADR 241.69 227.99 219.27 228.66 218.65 207.66
-------------------------------------------------------------------------
Occupancy 65.5% 71.8% 73.1% 62.9% 67.1% 64.8%
-------------------------------------------------------------------------
-------------------------------------------------------------------------
International
-------------------------------------------------------------------------
RevPAR $149.23 $117.60 $105.2 $120.44 $107.70 $97.85
-------------------------------------------------------------------------
ADR 218.94 210.52 201.88 179.05 187.35 168.84
-------------------------------------------------------------------------
Occupancy 68.2% 55.9% 52.1% 67.3% 57.5% 58.0%
-------------------------------------------------------------------------
-------------------------------------------------------------------------
DELTA MANAGED HOTELS (1)
-------------------------------------------------------------------------
Worldwide
-------------------------------------------------------------------------
RevPAR $59.30 $74.18 $89.17 $53.98 $65.43 $77.25
-------------------------------------------------------------------------
ADR 100.53 105.74 115.22 92.47 96.40 103.51
-------------------------------------------------------------------------
Occupancy 59.0% 70.2% 77.4% 58.4% 67.9% 74.6%
-------------------------------------------------------------------------
--------------------------------- Fourth 2004 Quarter Full 2004
Year --------------------------------- OWNED HOTELS
--------------------------------- Worldwide
--------------------------------- RevPAR $98.53 $116.04
--------------------------------- ADR 173.39 186.51
--------------------------------- Occupancy 56.8% 62.2%
--------------------------------- ---------------------------------
Canada --------------------------------- RevPAR $84.76 $114.93
--------------------------------- ADR 149.14 174.01
--------------------------------- Occupancy 56.8% 66.0%
--------------------------------- ---------------------------------
U.S. --------------------------------- RevPAR $140.67 $146.02
--------------------------------- ADR 225.67 220.37
--------------------------------- Occupancy 62.3% 66.3%
--------------------------------- ---------------------------------
International --------------------------------- RevPAR $99.81
$101.18 --------------------------------- ADR 185.79 190.69
--------------------------------- Occupancy 53.7% 53.1%
--------------------------------- ---------------------------------
FAIRMONT MANAGED HOTELS(1) ---------------------------------
Worldwide --------------------------------- RevPAR $106.13 $115.44
--------------------------------- ADR 178.35 180.30
--------------------------------- Occupancy 59.5% 64.1%
--------------------------------- ---------------------------------
Canada --------------------------------- RevPAR $85.61 $100.18
--------------------------------- ADR 144.21 153.43
--------------------------------- Occupancy 59.4% 65.3%
--------------------------------- ---------------------------------
U.S. --------------------------------- RevPAR $134.07 $137.79
--------------------------------- ADR 226.41 220.11
--------------------------------- Occupancy 59.2% 63.5%
--------------------------------- ---------------------------------
International --------------------------------- RevPAR $112.17
$109.52 --------------------------------- ADR 184.00 179.81
--------------------------------- Occupancy 61.0% 60.9%
--------------------------------- ---------------------------------
DELTA MANAGED HOTELS (1) ---------------------------------
Worldwide --------------------------------- RevPAR $60.95 $64.43
--------------------------------- ADR 100.52 98.53
--------------------------------- Occupancy 60.6% 65.4%
--------------------------------- (1) Includes hotels owned by
Fairmont Hotels & Resorts Inc. Comparable hotels and resorts
are considered to be properties that were wholly-owned by or fully
open under FHR management for at least the entire current and prior
period. Comparable hotels and resorts statistics exclude properties
under major renovation that would have a significant adverse effect
on the properties' primary operations. The following properties
were excluded: Owned: The Fairmont Southampton; The Fairmont Kea
Lani, Maui (sold July 2004); The Fairmont Glitter Bay (sold July
2004), The Fairmont Orchid, Hawaii (sold December 2005) Fairmont
Managed: The Fairmont Southampton, Fairmont Monte Carlo, The Savoy,
A Fairmont Hotel, The Norfolk Hotel, Mount Kenya Safari Club, The
Aberdare Country Club, The Ark, Mara Safari Club, The Fairmont
Glitter Bay, The Fairmont New Orleans, Fairmont Newport Beach, The
Plaza Delta Managed: Delta Meadowvale and Delta franchised hotels
Fairmont Hotels & Resorts Inc. Summary of Hotel Portfolios
-------------------------------------------------------------------------
December 31
-------------------------------------------------------------------------
2005 2004
-------------------------------------------------------------------------
OWNED HOTELS
-------------------------------------------------------------------------
Worldwide
-------------------------------------------------------------------------
No. of Properties 14 15
-------------------------------------------------------------------------
No. of Rooms 6,799 7,343
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Canada
-------------------------------------------------------------------------
No. of Properties 7 7
-------------------------------------------------------------------------
No. of Rooms 3,336 3,336
-------------------------------------------------------------------------
-------------------------------------------------------------------------
U.S. and International
-------------------------------------------------------------------------
No. of Properties 7 8
-------------------------------------------------------------------------
No. of Rooms 3,463 4,007
-------------------------------------------------------------------------
-------------------------------------------------------------------------
FAIRMONT MANAGED HOTELS (1)
-------------------------------------------------------------------------
Worldwide
-------------------------------------------------------------------------
No. of Properties 50 45
-------------------------------------------------------------------------
No. of Rooms 22,525 22,262
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Canada
-------------------------------------------------------------------------
No. of Properties 21 21
-------------------------------------------------------------------------
No. of Rooms 10,418 10,422
-------------------------------------------------------------------------
-------------------------------------------------------------------------
U.S. and International
-------------------------------------------------------------------------
No. of Properties 29 24
-------------------------------------------------------------------------
No. of Rooms 12,107 11,840
-------------------------------------------------------------------------
-------------------------------------------------------------------------
DELTA MANAGED HOTELS (1)
-------------------------------------------------------------------------
Worldwide
-------------------------------------------------------------------------
No. of Properties 38 37
-------------------------------------------------------------------------
No. of Rooms 11,243 11,038
-------------------------------------------------------------------------
(1) Includes hotels owned by Fairmont Hotels & Resorts Inc. END
FIRST AND FINAL ADD DATASOURCE: Fairmont Hotels & Resorts Inc.
CONTACT: PRNewswire -- Feb 24
Copyright