EXHIBIT 99.2
FOR IMMEDIATE RELEASE
Contact:
Bruce Riggins Melissa Thompson Jerry Daly or Carol McCune
Director of Finance Director of Corporate Daly Gray Public Relations
(202) 295-2276 Communications (Media)
(202) 295-2228 (703) 435-6293
MERISTAR HOTELS & RESORTS REPORTS FOURTH-QUARTER AND YEAR-END RESULTS
WASHINGTON, D.C., February 22, 2001--MeriStar Hotels & Resorts (NYSE:
MMH), the nation's largest independent hotel management company, today announced
results for the fourth quarter and full year ended December 31, 2000.
Revenues for the 2000 fourth quarter rose 11.7 percent to $342.1 million
from $306.3 million in the 1999 fourth quarter. Excluding non-recurring items,
net income for the quarter was $(4.1) million, or $(0.11) per share on a diluted
basis, compared to $0.01 per share in the 1999 fourth quarter, and earnings
before interest, taxes, depreciation and amortization (EBITDA) were $(2.4)
million, compared to $3.2 million in the fourth quarter of 1999.
During the fourth quarter, the company recorded the following
non-recurring charges:
o $2.7 million of costs related to the company's pending merger with
American Skiing Company to form Doral International, Inc. As the acquired entity
for accounting purposes, the company is required to expense currently all costs
it incurs in connection with the merger.
o $0.3 million of costs related to the company's conversion of hotel
leases with MeriStar Hospitality Corporation into long-term management
contracts, effective January 1, 2001, under the provisions of the REIT
Modernization Act.
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o An asset impairment charge of $21.7 million related to the write-down of
long-lived intangible assets for the company's leases of certain limited-service
hotels. This charge is a non-cash adjustment to the carrying value of those
assets.
Same-store average daily rate (ADR) for full-service, leased hotels in the
2000 fourth quarter advanced 4.7 percent to $104.86, while occupancy rose 1.1
percent to 66.2 percent. RevPAR rose 5.9 percent to $69.46, compared to the 1999
fourth quarter.
RevPAR for all leased hotels improved 5.0 percent in the 2000 fourth
quarter to $65.52. ADR rose 5.2 percent to $100.35, and occupancy declined 0.3
percent to 65.3 percent.
"Our results for the fourth quarter and full year 2000 are disappointing.
Although top-line revenue growth at our leased hotels continued to be strong, we
were not able to benefit at the bottom line due to increased lease payments and
higher operating costs, particularly for energy, insurance and guest loyalty
programs," said Paul Whetsell, chairman and chief executive officer of MeriStar.
"The effect of these costs under our lease agreements began in the third quarter
and was much more pronounced in the fourth. We achieved more positive results in
both our corporate housing and hotel management businesses with solid top- and
bottom-line performance, consistent with our expectations."
Whetsell added, "With the implementation of the REIT Modernization Act, we
have converted all of our hotel leases with MeriStar Hospitality to management
contracts, eliminating the volatility of the leases. The new management
contracts have a base fee of 2.5 percent and, including incentive fees, can
increase to as much as 4.0 percent of total revenues. As a result of the
decreased leakage prior to conversion, our expected total fees in 2001 have
changed from
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2.75-3.25 percent to 2.5-3.0 percent."
FULL-YEAR 2000
Excluding non-recurring items, net income for 2000 was $4.5 million, or
$0.13 per share on a diluted basis, compared to $0.24 per diluted share in 1999.
Revenues for the 12 months increased 9.2 percent to $1.41 billion. Earnings
before interest expense, income taxes, depreciation and amortization (EBITDA)
for 2000 were $23.9 million compared to $23.3 million in 1999.
Same-store average daily rate (ADR) for full-service, leased hotels
improved 5.7 percent to $107.84 in 2000, while occupancy rose 0.1 percent to
72.0 percent. Revenue per available room (RevPAR) increased 5.7 percent to
$77.60, compared to 1999. RevPAR for all leased hotels advanced 4.9 percent to
$73.11. ADR improved 5.5 percent to $102.38, and occupancy declined 0.6 percent
to 71.4 percent.
OUTLOOK
"The enhanced cash flow predictability from the new management contracts,
along with expected growth in BridgeStreet corporate housing, will create
significant value as we merge with American Skiing to form Doral International,"
said Whetsell. "Our announcement today about the revision of the exchange ratio
of MeriStar shares into Doral shares from 1.88 to 1.75 reflects the change in
performance under the hotel leases."
MeriStar Hotels & Resorts operates 269 hospitality properties with more
than 55,000 rooms in 36 states, the District of Columbia, Canada, Puerto Rico
and the U.S. Virgin Islands, including 54 properties managed by Flagstone
Hospitality Management, a subsidiary of MeriStar
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Hotels & Resorts. Through its Doral Golf brand, MeriStar manages 11 golf
courses. BridgeStreet Accommodations, a MeriStar subsidiary, is one of the
world's largest corporate housing providers, offering upscale, fully furnished
corporate housing throughout the United States, Canada and Europe. For more
information about MeriStar Hotels & Resorts, visit the company's Web site:
www.meristar.com.
THIS PRESS RELEASE CONTAINS FORWARD-LOOKING STATEMENTS ABOUT MERISTAR
HOTELS & RESORTS, INC., INCLUDING THOSE STATEMENTS REGARDING FUTURE OPERATING
RESULTS AND THE TIMING AND COMPOSITION OF REVENUES, AMONG OTHERS. EXCEPT FOR
HISTORICAL INFORMATION, THE MATTERS DISCUSSED IN THIS PRESS RELEASE ARE
FORWARD-LOOKING STATEMENTS THAT ARE SUBJECT TO CERTAIN RISKS AND UNCERTAINTIES
THAT COULD CAUSE THE ACTUAL RESULTS TO DIFFER MATERIALLY, INCLUDING THE
FOLLOWING: THE ABILITY OF MERISTAR HOTELS & RESORTS AND AMERICAN SKIING COMPANY
TO COMPLETE THEIR MERGER, THE ABILITY OF MERISTAR HOTELS & RESORTS TO
SUCCESSFULLY IMPLEMENT ITS ACQUISITION STRATEGY AND OPERATING STRATEGY; THE
MERGED COMPANY'S ABILITY TO MANAGE RAPID EXPANSION; SIGNIFICANT LEVERAGE;
CHANGES IN ECONOMIC CYCLES; COMPETITION FROM OTHER HOSPITALITY COMPANIES; AND
CHANGES IN THE LAWS AND GOVERNMENT REGULATIONS APPLICABLE TO THE COMPANIES.
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MERISTAR HOTELS & RESORTS, INC.
STATEMENTS OF OPERATIONS (1)
(UNAUDITED, IN THOUSANDS EXCEPT PER SHARE AMOUNTS AND OPERATING STATISTICS)
THREE MONTHS ENDED DECEMBER 31, TWELVE MONTHS ENDED DECEMBER 31,
2000 1999 2000 1999
----------- ----------- ----------- -----------
Revenue
Rooms $ 208,540 $ 197,762 $ 929,585 $ 894,983
Food and beverage 82,218 81,498 304,415 295,551
Corporate Housing 26,111 -- 64,872 --
Other operating departments 21,603 24,328 92,790 91,540
Management and other fees 3,599 2,677 19,957 10,040
----------- ----------- ----------- -----------
Total revenue 342,071 306,265 1,411,619 1,292,114
Operating expenses by department:
Rooms 52,373 49,485 219,197 213,239
Food and beverage 57,697 58,281 219,791 217,349
Corporate Housing Expense 18,046 -- 42,827 --
Other 12,886 10,704 53,132 43,188
Undistributed operating expenses:
Administrative and general 59,659 50,605 233,553 208,576
Property operating costs 42,808 42,250 188,235 182,412
Participating lease expense 101,000 91,732 431,014 404,086
Depreciation and amortization 2,930 1,560 9,470 6,014
Merger and lease conversion costs 2,989 -- 2,989 --
Loss on asset impairment 21,657 -- 21,657 --
----------- ----------- ----------- -----------
Total operating expenses 372,045 304,617 1,421,865 1,274,864
----------- ----------- ----------- -----------
Net operating income (29,974) 1,648 (10,246) 17,250
Interest expense, net 1,871 1,149 6,401 4,692
Equity in losses of affiliates -- 31 -- 31
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Income before minority interests
and income taxes (31,845) 468 (16,647) 12,527
Minority interests (2,360) 52 (1,094) 1,916
Income taxes (11,409) 154 (6,173) 3,926
----------- ----------- ----------- -----------
Net income $ (18,076) $ 262 $ (9,380) $ 6,685
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Weighted average number of diluted
shares of common stock outstanding 35,950 30,077 34,148 28,406
=========== =========== =========== ===========
Net income per diluted common share $ (0.50) $ 0.01 $ (0.27) $ 0.24
Effect of non-recurring items (0.39) -- (0.40) --
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Net income per diluted common share
excluding non-recurring items $ (0.11) $ 0.01 $ 0.13 $ 0.24
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(1)Excludes the effect of EITF 98-9
Pro forma operating statistics for hotels leased:
Full-service hotels:
Occupancy 66.2% 65.5% 72.0% 71.9%
ADR $ 104.86 $ 100.15 $ 107.84 $ 102.04
RevPAR $ 69.46 $ 65.57 $ 77.60 $ 73.40
All hotels:
Occupancy 65.3% 65.5% 71.4% 71.8%
ADR $ 100.35 $ 95.36 $ 102.38 $ 97.00
RevPAR $ 65.52 $ 62.42 $ 73.11 $ 69.69