EXHIBIT 99.1
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[IHR LOGO]
INTERSTATE
HOTELS & RESORTS (NYSE: IHR)
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[PHOTOGRAPH - Los Angeles Marriott] [PHOTOGRAPH - Don CeSar Beach Resort]
Los Angeles Marriott - Los Angeles, CA Don CeSar Beach Resort - St. Pete Beach, FL
INTERSTATE HOTELS & RESORTS
o Global management company with operations in five countries
o Largest independent hotel management company in North America
o 400+ hotles, resorts, and conference centers
o 86,000+ rooms
o BridgeStreet Corporate Housing Worldwide
o 17 North American markets
o London Paris
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[PHOTOGRAPH EMBASSY SUITES CENTER CITY]
Embassy Suites Center City - Philadelphia, PA
FINANCIAL HIGHLIGHTS
2002 2003
(pro forma)
Revenue $1.1B $1.1B
EBITDA $30-34M $40-45M
EPS $(.07)-.05 $.40-.55
Free Cash Flow $17-21M $27-32M
o Equity market capitalization -
$51M as of 8/5/02
o Net debt at 7/31/02 - $114M
o Total capitalization - $165M
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[PHOTOGRAPH SHERATON BISCAYNE BAY]
Sheraton Biscayne Bay - Miami, FL
CAPITAL STRUCTURE
o Free cash flow provides for rapid de-leveraging
o Low average cost of debt of 7.3%
o Credit statistics improve dramatically in 2003
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[CHART]
$50M Available
$70M Bank Debt
$60M Sub Debt & Other
CREDIT STATISTICS
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[GRAPH]
LEVERAGE RATIO
Closing 4.0
Dec-02 3.7
Dec-03 2.4
INTEREST COVERAGE RATIO
Closing 2.3
Dec-02 2.8
Dec-03 4.1
INTERSTATE HOTELS & RESORTS
MANAGEMENT TEAM
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[ORGANIZATIONAL CHART]
BOARD
13 Members
PAUL WHETSELL
Chairman & CEO
JOHN EMERY
President & COO
BOB MORSE KEVIN KILKEARY BRUCE WILES THOM VINCENT JIM CALDER HANK CIAFFONE
President President Chief Investment President Chief Financial Executive Vice President
Hotel Operations Hotel Operations Officer BridgeStreet Officer International Hotel Operations
INTERSTATE HOTELS & RESORTS
THREE CORE BUSINESSES
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[ORGANIZATIONAL CHART]
INTERSTATE
HOTEL REAL BRIDGESTREET
MANAGEMENT ESTATE
126 UPSCALE 142 LTD- 78 LUXURY- NORTH EUROPE
BRANDED SERVICE INDEPENDENT AMERICA 700 UNITS
HOTELS HOTELS RESORTS 2,700 UNITS
HOTEL MANAGEMENT
o Focusing on fundamental hotel operations
o Expanded marketing
o Operating systems leverage
o Internet-based business information systems
o Yield management
o Benefits of scale
o External growth through sliver investments and acquisition funds
o Operating flow-through performance will attract new owners
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[PHOTOGRAPH - Crowne Plaza]
Crowne Plaza - Washington, DC
HOTEL MANAGEMENT, CONT.
HOSPITALITY SERVICES
o Wide array of services available to current and prospective owners
o Increased cost efficiency through national purchasing
o NetEffect Alliance
o Telecom discounts
o Business information
o Insurance savings
o Design and construction
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[PHOTOGRAPH - The Roosevelt Hotel]
The Roosevelt Hotel - New York, NY
POSITIVE INDUSTRY FUNDAMENTALS
SUPPLY NON-FACTOR FOR FORESEEABLE FUTURE, DEMAND
IS IN RECOVERY
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[CHART]
% GROWTH
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SUPPLY DEMAND
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1999 3.6 3.3
2000 2.7 3.7
2001 1.8 -3.4
2002E 1.6 3.9
2003E 1.0 2.7
2004E 2.2 2.9
Source: PricewaterhouseCoopers
REAL ESTATE JOINT VENTURES
o Real estate JV to acquire $300-500M of hotel assets
o $50M available to participate in joint ventures
o Hotel transactions expected to accelerate in the second half
of 2002 and in 2003
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[PHOTOGRAPH - Radisson Resort & Spa]
Radisson Resort & Spa - Scottsdale, AZ
CONFERENCE CENTERS
o Conference centers:
o Doral Forrestal - Princeton, NJ
o Doral Eaglewood - Chicago, IL
o Nathan Hale University of Connecticut (independent) -
Storrs, CT
o Resort and conference center growth occurs through new contracts that
leverage strength of Doral brand and central reservation system
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[PHOTOGRAPH - Doral Forrestal Conference Center & Spa]
Doral Forrestal Conference Center & Spa - Princeton, NJ
BRIDGESTREET CORPORATE HOUSING
WORLDWIDE
o A leading provider of upscale corporate apartments in
North America and Europe
o Flexible inventory minimizes risk
o Recently launched licensing program for North American markets
o Growth will be achieved through expansion of national client base and
European operations
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[PHOTOGRAPH]
UPSIDE TO 2003 BUSINESS PLAN
o Incentive fees currently at historical lows - significant economic
rebound would result in $5-10M of additional incentive fees
o Upside potential in base fees - current forecast assumes 3-4%
RevPAR growth - RevPAR growth of 6-8% would provide $2M of
additional base fees
o Corporate housing - current forecast assumes conservative growth
in 2003 - significant rebound in corporate travel could add
$2-4M of EBITDA
o Real estate joint ventures - potential management fees of $3-5M
o Hospitality services - current forecast does not include any growth
in 2003 - new customers and services add additional EBITDA
INTERSTATE HOTELS & RESORTS
PREMIER INDEPENDENT HOTEL MANAGEMENT
COMPANY
o Alternative to brand management
o Synergies result in immediate accretion to shareholders
o Expansive resources will result in state-of-the-art services for hotel
owners
o Size will attract new capital sources
o Global presence enables worldwide expansion
o Capital structure provides for significant growth potential
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[PHOTOGRAPH - The Charles Hotel]
The Charles Hotel - Cambridge, MA
THIS PRESENTATION CONTAINS "FORWARD-LOOKING STATEMENTS," WITHIN THE MEANING OF
THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995, ABOUT INTERSTATE HOTELS &
RESORTS, INCLUDING THOSE STATEMENTS REGARDING FUTURE OPERATING RESULTS AND THE
TIMING AND COMPOSITION OF REVENUES, AMONG OTHERS, AND STATEMENTS CONTAINING
WORDS SUCH AS "EXPECTS," "BELIEVES" OR "WILL," WHICH INDICATE THAT THOSE
STATEMENTS ARE FORWARD-LOOKING. 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 CURRENT SLOWDOWN OF THE NATIONAL ECONOMY, ECONOMIC
CONDITIONS GENERALLY AND THE REAL ESTATE MARKET SPECIFICALLY, THE IMPACT OF THE
EVENTS OF SEPTEMBER 11, 2001, LEGISLATIVE AND REGULATORY CHANGES, AVAILABILITY
OF DEBT AND EQUITY CAPITAL, INTEREST RATES, COMPETITION, SUPPLY AND DEMAND FOR
LODGING FACILITIES IN OUR CURRENT AND PROPOSED MARKET AREAS, AND THE COMPANY'S
ABILITY TO MANAGE INTEGRATION AND GROWTH. ADDITIONAL RISKS ARE DISCUSSED IN
INTERSTATE HOTELS & RESORTS' FILINGS WITH THE SECURITIES AND EXCHANGE
COMMISSION, INCLUDING INTERSTATE HOTELS & RESORTS' ANNUAL REPORT ON FORM 10-K
FOR THE YEAR ENDED DECEMBER 31, 2001 AND JOINT PROXY STATEMENT AND PROSPECTUS,
FILED ON JULY 2, 2002.