UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): August 5, 2003
INTERSTATE HOTELS & RESORTS, INC.
(Exact name of registrant as specified in its charter)
Delaware 1-14331 52-2101815
(State of Incorporation) (Commission File No.) (IRS Employer Identification No.)
4501 N. Fairfax Drive 22203
Arlington, VA (Zip Code)
(Address of Principal Executive Offices)
Registrant's telephone number, including area code: 703-387-3100
1010 Wisconsin Avenue, N.W.
Washington, D.C. 20007
(202) 965-4455
(Former name or former address, if changed since last report)
ITEM 5. Other Events
On August 5, 2003, Interstate Hotels & Resorts filed a Registration Statement on
Form S-3. This Registration Statement incorporates by reference our quarterly
report on Form 10-Q, filed on May 12, 2003. Included in our Form 10-Q are
references to earnings before interest, taxes, depreciation and amortization, or
"EBITDA", which is a non-GAAP financial measure. In accordance with Regulation
G, adopted by the Securities and Exchange Commission, we are required to provide
a reconciliation from net income (loss) to EBITDA for the periods presented. See
the table below for the reconciliation.
We use EBITDA as a performance measure of our financial condition and results of
operations because it provides a basis to evaluate our ability to incur and
service debt, fund capital expenditures and expand our business. In addition,
since depreciation and amortization are non-cash items and a significant portion
of our assets, including our management agreements, are intangible assets which
are amortized over their projected life, EBITDA represents a basis for
evaluating our current operating performance. We also use EBITDA as one measure
in determining the value of other acquisitions and dispositions. This financial
measure, however, should be considered in addition to, not as a substitute for
or as being superior to, operating losses, cash flows, or other measures of
financial performance prepared in accordance with U.S. generally accepted
accounting principles ("GAAP").
The table below reconciles net income (loss) to EBITDA for the three months
ended March 31, 2003 and 2002, by reportable operating segment. Prior to our
merger on July 31, 2002, we operated in two reportable segments: (1) operations
of luxury and upscale hotels and (2) operations of mid-scale, upper economy and
budget hotels. Following the merger, we operate in the segments shown in the
table below. For periods prior to the merger, we have combined our two
previously reportable operating segments into the hotel management operating
segment.
Hotel Corporate Financial
Management Housing Other Statements
---------- --------- -------- ----------
Three months ended March 31, 2003:
Net income (loss) $(4,956) $(2,379) $ 11,764 $ 4,429
Adjustments:
Depreciation and amortization 4,278 404 - 4,682
Interest expense 2,309 - - 2,309
Equity in loss of affiliates 348 - - 348
Gain on refinancing - - (13,629) (13,629)
Minority interest expense 168 - - 168
Tax expense 2,952 - - 2,952
------- ------- -------- --------
EBITDA $ 5,099 $(1,975) $ (1,865) $ 1,259
======= ======= ======== ========
Hotel Corporate Financial
Management Housing Other Statements
---------- --------- ------ ----------
Three months ended March 31, 2002:
Net income (loss) $ (862) $ - $(119) $ (981)
Adjustments:
Depreciation and amortization 2,528 - - 2,528
Interest expense 975 - - 975
Equity in loss of affiliates 180 - - 180
Minority Interest expense 64 - - 64
Tax expense (601) - - (601)
------ ------- ----- -------
EBITDA $2,284 $ - $(119) $ 2,165
====== ======= ===== =======
The "Other" column in the table above represents operating segment activity for
the non-reportable segments, including merger and integration costs, and tender
offer costs.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: August 5, 2003 By: /s/ Christopher L. Bennett
-----------------------------------
Name: Christopher L. Bennett
Title: Senior Vice President and
General Counsel