Exhibit 99.1
News release via Canada NewsWire, Toronto 416-863-9350
Attention Business Editors:
Four Seasons Hotels Inc. reports results for third quarter and nine
months ended September 30, 2006
TORONTO, Nov. 9 /CNW/ - Four Seasons Hotels Inc. (TSX Symbol "FSH"; NYSE
Symbol "FS") today reported its results for the third quarter and nine months
ended September 30, 2006.
All amounts disclosed in this news release are in US dollars unless
otherwise noted. The consolidated financial statements are prepared in
accordance with Canadian generally accepted accounting principles. Endnotes
can be found at the end of this news release.
Highlights of the Third Quarter and Nine Months ended September 30, 2006
For the third quarter and nine months ended September 30, 2006, as
compared to the same periods in 2005:
Hotel and Resort Operating Results:
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- For the third quarter, RevPAR(1) increased at our worldwide Core
Hotels(2) by 9.7% and at our US Core Hotels by 8.3%. For the nine
months ended September 30, 2006, RevPAR increased at our worldwide
Core Hotels by 11.2% and at our US Core Hotels by 10.9%.
- For the third quarter, gross operating margins(3) increased at our
worldwide Core Hotels by 120 basis points to 30.4% and our US Core
Hotels gross operating margins increased by 140 basis points to
28.5%. For the nine months ended September 30, 2006, gross operating
margins increased at our worldwide Core Hotels by 180 basis points to
32.3% and our US Core Hotels gross operating margins also increased
by 180 basis points to 30.5%.
- For the third quarter, revenues under management increased 15.8% to
$699.2 million from $603.8 million. For the nine months ended
September 30, 2006, revenues under management increased 13.8% to
$2.1 billion from $1.9 billion. We had approximately 17,500 rooms
under management in the nine months ended September 30, 2006, as
compared to approximately 17,200 rooms in the same period in 2005. We
had approximately 14,300 rooms under management in our Core Hotels
for the third quarter and nine months ended September 30, 2006 and
2005.
"Four Seasons offers an experience that is truly one of a kind, because
employees in the Company share a very specific focus: to meet the needs,
expectations, even the dreams of one type of consumer - the luxury traveler,"
said Isadore Sharp, Chairman and Chief Executive Officer. "The trust our guest
places in us to provide exceptional experiences is reflected in the strong
operational and financial results we are announcing this quarter. We remain
committed to further solidifying our distinct competitive position in the
industry."
Company Operating Results:
- As a result of improved results at properties under our management
and, to a lesser extent, an increase in the number of rooms under
management, hotel management fees increased 20.7% in the third
quarter of 2006. For the nine months ended September 30, 2006, hotel
management fees increased 19.9%.
- Base fees increased 12.1% to $20.0 million in the third quarter and
12.6% to $61.4 million for the nine months ended September 30, 2006,
principally as a result of RevPAR improvements at our Core Hotels and
the contribution from recently opened properties under management.
- As a result of improved profitability and the addition of new
properties under our management, incentive fees increased 52.9% to
$7.2 million for the third quarter and 38.5% to $29.3 million for the
nine months ended September 30, 2006.
- Other fees were essentially unchanged for the third quarter, but
improved 33.2% to $13.3 million for the nine months ended
September 30, 2006, primarily as a result of an increase in branded
residential royalty fees, which will vary from period to period based
on the volume of sales closing in those periods, and these
fluctuations may be significant.
- Operating earnings before other items(4) increased 41.9% to
$16.6 million for the third quarter and 38.5% to $60.8 million for
the nine months ended September 30, 2006.
- For the third quarter, net earnings were $10.9 million ($0.30 basic
earnings per share and $0.29 diluted earnings per share), compared to
a net loss of $11.4 million ($0.31 basic and diluted loss per share)
for the third quarter of 2005. In the third quarter of 2005, net loss
included foreign exchange losses and asset provisions and write downs
totaling approximately $21.1 million.
- For the nine months ended September 30, 2006, net earnings were
$33.4 million ($0.91 basic earnings per share and $0.89 diluted
earnings per share), as compared to net earnings of $9.5 million for
the same period in 2005 ($0.26 basic earnings per share and $0.25
diluted earnings per share).
Adjusted Net Earnings and Adjusted Earnings per Share(x):
- In the third quarter of 2006, other income, net of $0.6 million
related primarily to foreign exchange gains, which were offset
partially by asset provisions and write downs. In the third quarter
of 2005, other expenses, net of $21.1 million related primarily to
foreign exchange losses and asset provisions and write downs.
Adjusting for other income (expenses), net and the applicable income
taxes, adjusted net earnings were as follows:
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(in millions of dollars except per share amounts) Third quarter
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2006 2005
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Net earnings (loss) $ 10.9 $ (11.4)
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Adjustments - Other (income) expenses, net (0.6) 21.1
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Tax effect related to foregoing adjustments 0.6 (1.6)
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Adjusted net earnings $ 10.9 $ 8.1
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Adjusted basic earnings per share $ 0.30 $ 0.22
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Adjusted diluted earnings per share $ 0.29 $ 0.22
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- In the nine months ended September 30, 2006, other expenses, net of
$7.0 million related primarily to foreign exchange losses. In the
nine months ended September 30, 2005, other expenses, net of
$32.4 million related primarily to foreign exchange losses, losses on
the disposition of assets, and asset provisions and write downs.
Adjusting for other expenses, net and the applicable income taxes,
adjusted net earnings were as follows:
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Nine months ended
(in millions of dollars except per share amounts) September 30,
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2006 2005
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Net earnings $ 33.4 $ 9.5
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Adjustments - Other expenses, net 7.0 32.4
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Tax effect related to foregoing adjustments 1.8 (12.6)(xx)
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Adjusted net earnings $ 42.2 $ 29.3
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Adjusted basic earnings per share $ 1.15 $ 0.80
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Adjusted diluted earnings per share $ 1.13 $ 0.77
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(x) Adjusted net earnings is a non-GAAP financial measure and does not
have any standardized meaning prescribed by GAAP. It is, therefore,
unlikely to be comparable to similar measures presented by other
issuers and should not be considered as an alternative to net
earnings, cash flow from operating activities or any other measure
of performance prescribed by Canadian GAAP. Our adjusted net
earnings may also not be comparable to adjusted net earnings used
by other lodging companies, which may be calculated differently.
We consider adjusted net earnings to be a meaningful indicator of
our operations, and management uses it as a measure to assess our
operating performance. Adjusted net earnings is also used by
investors, analysts, and our lenders as a measure of our financial
performance. As a result, we have chosen to provide this
information.
(xx) In connection with the disposition of The Pierre in the second
quarter of 2005, we recorded a tax benefit of approximately
$9.2 million in the nine months ended September 30, 2005.
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"The financial results reflect both the strong operating environment and
our continued efforts to control costs," said John Davison, Chief Financial
Officer. "We are very pleased to see these efforts translate into strong
earnings growth."
Expanding the Portfolio - New Four Seasons Projects
Our announced pipeline of new Four Seasons properties include thirty-
three projects around the world, including nine in the Americas, five in
Europe, nine in the Middle East/Africa and ten in Asia/Pacific. Since the
beginning of the year, we have added eleven new projects to this list,
including Barbados; Cham Island, Vietnam; a second property in Doha, Qatar;
Hangzhou, People's Republic of China; Koh Samui, Thailand; Kuwait City,
Kuwait; Macau, Special Administrative Region of the People's Republic of
China; Seychelles; Shanghai, People's Republic of China; St. Petersburg,
Russia and Taipei, Taiwan.
"We believe our development pipeline is the most robust in the luxury
sector," said Kathleen Taylor, President Worldwide Business Operations. "Our
owners and development partners continue to present us with opportunities for
extraordinary projects around the globe, which speaks to the strength of the
Four Seasons brand worldwide."
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(1) RevPAR is defined as average room revenue per available room. It is a
non-GAAP financial measure and does not have any standardized meaning
prescribed by GAAP. It is, therefore, unlikely to be comparable to
similar measures presented by other issuers. We use RevPAR because it
is a commonly used indicator of market performance for hotels and
resorts and represents the combination of the average daily room rate
and the average occupancy rate achieved during the period. RevPAR
does not include food and beverage or other ancillary revenues
generated by a hotel or resort. RevPAR is the most commonly used
measure in the lodging industry to measure the period-over-period
performance of comparable properties. Our calculation of RevPAR may
be different than the calculation used by other lodging companies.
(2) The term "Core Hotels" means hotels and resorts under management for
the full year of both 2006 and 2005. However, if a "Core Hotel" has
undergone or is undergoing an extensive renovation program in one of
those years that materially affects the operation of the property in
that year, it ceases to be included as a "Core Hotel" in either year.
Changes from the 2005/2004 Core Hotels are the additions of Four
Seasons Resort Scottsdale at Troon North, Four Seasons Resort
Whistler, Four Seasons Resort Costa Rica at Peninsula Papagayo, Four
Seasons Hotel Gresham Palace Budapest, Four Seasons Resort Provence
at Terre Blanche and Four Seasons Hotel Cairo at Nile Plaza, and the
deletion of The Regent Kuala Lumpur.
(3) Gross operating margin represents gross operating profit as a
percentage of gross operating revenue.
(4) Operating earnings before other items is equal to net earnings plus
(i) income tax expense less (ii) income tax recovery plus (iii)
interest expense less (iv) interest income plus (v) other expenses
less (vi) other income plus (vii) depreciation and amortization.
Operating earnings before other items is a non-GAAP financial measure
and does not have any standardized meaning prescribed by GAAP. It is,
therefore, unlikely to be comparable to similar measures presented by
other issuers. We consider operating earnings before other items to
be a meaningful indicator of operations and use it as a measure to
assess our operating performance. It is included because we believe
it can be useful in measuring our ability to service debt, fund
capital expenditures and expand our business. Operating earnings
before other items is also used by investors, analysts and our
lenders as a measure of our financial performance.
We will hold a conference call today at 11 a.m. (Eastern Standard Time) to
discuss the third quarter financial results. The details are:
To access the call dial: 1 (800) 377-5794 (U.S.A. and Canada)
1 (416) 641-6708 (outside U.S.A. and Canada)
>>
To access a replay of the call, which will be available for one week
after the call, dial: 1 (800) 558-5253, Reservation Number 21305677.
A live web cast of the call will also be available by visiting
www.fourseasons.com/investor.
This web cast will be archived for no more than one month following the
call.
Four Seasons is dedicated to perfecting the travel experience through
continuous innovation and the highest standards of hospitality. From elegant
surroundings of the finest quality, to caring, highly personalised 24-hour
service, Four Seasons embodies a true home away from home for those who know
and appreciate the best. The deeply instilled Four Seasons culture is
personified in its employees - people who share a single focus and are
inspired to offer great service. Founded in 1960, Four Seasons has followed a
targeted course of expansion, opening hotels in major city centres and
desirable resort destinations around the world. Currently with 71 hotels in 31
countries, and more than 25 properties under development, Four Seasons will
continue to lead the hospitality industry with innovative enhancements, making
business travel easier and leisure travel more rewarding. For more information
on Four Seasons, visit www.fourseasons.com.
This document contains "forward-looking statements" within the meaning of
applicable securities laws, including RevPAR, profit margin and earning
trends; statements concerning the number of lodging properties expected to be
added in this and future years; expected investment spending; and similar
statements concerning anticipated future events, results, circumstances,
performance or expectations that are not historical facts. Various factors and
assumptions were applied or taken into consideration in arriving at these
statements, which do not take into account the effect that non-recurring or
other special items announced after the statements are made may have on our
business. These statements are not guarantees of future performance and,
accordingly, you are cautioned not to place undue reliance on these
statements. These statements are subject to numerous risks and uncertainties,
including those described in our annual information form and management's
discussion and analysis for the year ended December 31, 2005 and in this
document. (See discussion under "Operating Risks" beginning on page 17 of our
Annual Information Form and page 45 of our Management's Discussion and
Analysis for the year ended December 31, 2005, which are available on our
website at www.fourseasons.com and on SEDAR at www.sedar.com.) Those risks and
uncertainties include adverse factors generally encountered in the lodging
industry; the risks associated with world events, including war, terrorism,
international conflicts, natural disasters, extreme weather conditions and
infectious diseases; general economic conditions, fluctuations in relative
exchange rates of various currencies, supply and demand changes for hotel
rooms and residential properties, competitive conditions in the lodging
industry, the risks associated with our ability to maintain and renew
management agreements and expand the portfolio of properties that we manage,
relationships with clients and property owners and the availability of capital
to finance growth. Many of these risks and uncertainties can affect our actual
results and could cause our actual results to differ materially from those
expressed or implied in any forward-looking statement made by us or on our
behalf. All forward-looking statements in this news release are qualified by
these cautionary statements. These statements are made as of the date of this
document and, except as required by applicable law, we undertake no obligation
to publicly update or revise any forward-looking statement, whether as a
result of new information, future events or otherwise. Additionally, we
undertake no obligation to comment on analyses, expectations or statements
made by third parties in respect of Four Seasons, its financial or operating
results or its securities or any of the properties that we manage or in which
we may have an interest.
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%CIK: 0001030555
/For further information: John Davison, Chief Financial Officer, (416)
441-6714; Barbara Henderson, Senior Vice President, Corporate Finance, (416)
441-4329/
(FSH. FS)
CO: Four Seasons Hotels and Resorts
CNW 07:30e 09-NOV-06
