/FIRST AND FINAL ADD - TO334 - Four Seasons Hotels and Resorts - EARNINGS/

Share Name	Share Symbol	Market	Type
Four Seasons Hotel	NYSE:FS	NYSE	Ordinary Share

Four Seasons Hotel (NYSE:FS)
Historical Stock Chart

From Jul 2019 to Jul 2024

Click Here for more Four Seasons Hotel Charts.

FOUR SEASONS HOTELS INC. CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) Three months ended Nine months ended (In thousands of US dollars September 30, September 30, except per share amounts) 2006 2005 2006 2005 ------------------------------------------------------------------------- Revenues: Hotel management fees $ 27,193 $ 22,531 $ 90,623 $ 75,602 Other fees 3,568 3,471 13,305 9,991 Hotel ownership revenues 8,781 9,749 24,741 57,970 Reimbursed costs 18,675 16,453 54,990 46,277 ----------------------------------------------- 58,217 52,204 183,659 189,840 ----------------------------------------------- Expenses: General and administrative expenses (15,166) (15,625) (44,067) (41,495) Hotel ownership cost of sales and expenses (7,764) (8,417) (23,814) (58,189) Reimbursed costs (18,675) (16,453) (54,990) (46,277) ----------------------------------------------- (41,605) (40,495) (122,871) (145,961) ----------------------------------------------- Operating earnings before other items 16,612 11,709 60,788 43,879 Depreciation and amortization (4,433) (2,575) (9,875) (8,512) Other income (expenses), net (note 4) 632 (21,064) (6,995) (32,419) Interest income 5,823 3,974 15,922 11,590 Interest expense (3,601) (2,766) (11,359) (8,401) ----------------------------------------------- Earnings (loss) before income taxes 15,033 (10,722) 48,481 6,137 ----------------------------------------------- Income tax recovery (expense) (note 5): Current (3,155) 2,925 (10,169) (389) Future (937) (3,644) (4,904) 3,799 ----------------------------------------------- (4,092) (719) (15,073) 3,410 ----------------------------------------------- Net earnings (loss) $ 10,941 $ (11,441) $ 33,408 $ 9,547 ----------------------------------------------- ----------------------------------------------- Basic earnings (loss) per share (note 3(a)) $ 0.30 $ (0.31) $ 0.91 $ 0.26 ----------------------------------------------- ----------------------------------------------- Diluted earnings (loss) per share (note 3(a)) $ 0.29 $ (0.31) $ 0.89 $ 0.25 ----------------------------------------------- ----------------------------------------------- See accompanying notes to consolidated financial statements. FOUR SEASONS HOTELS INC. CONSOLIDATED BALANCE SHEETS As at As at (Unaudited) September 30, December 31, (In thousands of US dollars) 2006 2005 ------------------------------------------------------------------------- ASSETS Current assets: Cash and cash equivalents $ 254,242 $ 242,178 Receivables 66,118 69,690 Inventory 3,476 7,326 Prepaid expenses 3,067 2,950 -------------------------- 326,903 322,144 Long-term receivables 201,702 175,374 Investments in hotel partnerships and corporations (note 2) 89,012 99,928 Fixed assets 80,551 64,850 Investment in management contracts (note 2) 192,297 164,932 Investment in trademarks and trade names 4,344 4,210 Future income tax assets 10,104 14,439 Other assets 51,432 34,324 -------------------------- $ 956,345 $ 880,201 -------------------------- -------------------------- LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable and accrued liabilities $ 57,450 $ 54,797 Long-term obligations due within one year 1,881 4,853 -------------------------- 59,331 59,650 Long-term obligations 290,039 273,825 Shareholders' equity (note 3): Capital stock 256,115 250,430 Convertible notes 36,920 36,920 Contributed surplus 13,104 10,861 Retained earnings 192,441 160,741 Equity adjustment from foreign currency translation 108,395 87,774 -------------------------- 606,975 546,726 -------------------------- $ 956,345 $ 880,201 -------------------------- -------------------------- See accompanying notes to consolidated financial statements. FOUR SEASONS HOTELS INC. CONSOLIDATED STATEMENTS OF CASH FLOWS Three months ended Nine months ended (Unaudited) September 30, September 30, (In thousands of US dollars) 2006 2005 2006 2005 ------------------------------------------------------------------------- Operating activities: Net earnings (loss) $ 10,941 $ (11,441) $ 33,408 $ 9,547 Items not affecting cash: Stock-based compensation expense 556 486 1,642 1,494 Depreciation and amortization 4,433 2,575 9,875 8,512 Other (income) expenses, net (632) 21,064 6,995 32,419 Future income tax (recovery) expense 937 3,644 4,904 (3,799) Other 220 959 1,189 1,487 Changes in non-cash working capital 13,490 (232) (482) (13,276) ----------------------------------------------- Cash provided by operating activities 29,945 17,055 57,531 36,384 ----------------------------------------------- Investing activities: Advances of long-term receivables (3,837) (4,633) (21,781) (38,649) Receipt of long-term receivables 4,367 126 14,436 19,402 Investments in hotel partnerships and corporations (2,497) (1,368) (700) (10,813) Disposal of hotel partnerships and corporations - - 707 12,672 Purchase of fixed assets (6,291) (4,761) (16,148) (12,821) Investments in trademarks, trade names and management contracts (2,227) (202) (16,851) (675) Other assets (924) (1,042) (6,526) (7,902) ----------------------------------------------- Cash used in investing activities (11,409) (11,880) (46,863) (38,786) ----------------------------------------------- Financing activities: Long-term obligations, including current portion (231) 278 (2,776) (1,220) Issuance of shares 277 156 5,636 6,992 Dividends paid (1,721) (1,584) (3,378) (3,142) ----------------------------------------------- Cash provided by (used in) financing activities (1,675) (1,150) (518) 2,630 ----------------------------------------------- Increase in cash and cash equivalents 16,861 4,025 10,150 228 Increase (decrease) in cash and cash equivalents due to unrealized foreign exchange gain (loss) 570 (1,189) 1,914 (5,133) Cash and cash equivalents, beginning of period 236,811 218,636 242,178 226,377 ----------------------------------------------- Cash and cash equivalents, end of period $ 254,242 $ 221,472 $ 254,242 $ 221,472 ----------------------------------------------- ----------------------------------------------- Supplementary information: Interest received $ 3,977 $ 2,772 $ 13,125 $ 10,449 Interest paid (3,333) (1,754) (6,071) (4,916) Income taxes received (paid) 876 (1,442) (2,125) (6,897) See accompanying notes to consolidated financial statements. FOUR SEASONS HOTELS INC. CONSOLIDATED STATEMENTS OF RETAINED EARNINGS Nine months ended (Unaudited) September 30, (In thousands of US dollars) 2006 2005 ------------------------------------------------------------------------- Retained earnings, beginning of period $ 160,741 $ 192,129 Net earnings 33,408 9,547 Dividends declared (1,708) (1,537) ------------------------- Retained earnings, end of period $ 192,441 $ 200,139 ------------------------- ------------------------- See accompanying notes to consolidated financial statements. FOUR SEASONS HOTELS INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (In thousands of US dollars except per share amounts) ------------------------------------------------------------------------- In these interim consolidated financial statements, the words, "we", "us", "our", and other similar words are references to Four Seasons Hotels Inc.("FSHI") and its consolidated subsidiaries. These interim consolidated financial statements do not include all disclosures required by Canadian generally accepted accounting principles for annual financial statements and should be read in conjunction with our most recently prepared annual consolidated financial statements for the year ended December 31, 2005. 1. Significant accounting policies: The significant accounting policies used in preparing these interim consolidated financial statements are consistent with those used in preparing our annual consolidated financial statements for the year ended December 31, 2005, except as disclosed below: (a) Non-monetary transactions: In June 2005, The Canadian Institute of Chartered Accountants ("CICA") issued Section 3831, "Non-Monetary Transactions", which introduces new requirements for non-monetary transactions initiated on or after January 1, 2006. The amended requirements will result in non-monetary transactions being measured at fair values unless certain criteria are met, in which case, the transaction is measured at carrying value. The implementation of Section 3831, on a prospective basis for transactions initiated on or after January 1, 2006, did not have any impact on our consolidated financial statements for the three months and nine months ended September 30, 2006. (b) Financial instruments: In January 2005, the CICA issued Section 1530 "Comprehensive Income", Section 3855 "Financial Instruments - Recognition and Measurement", and Section 3865 "Hedges". These standards are effective for fiscal years beginning on or after October 1, 2006. We have not yet determined the impact of implementation of these standards on our consolidated financial statements. (c) Comparative figures: Certain 2005 comparative figures have been reclassified to conform with the financial statement presentation adopted for 2006. 2. Hotel investment transaction: In February 2006, we contributed our equity interest in a property under our management in exchange for a management contract enhancement of approximately the same fair value. No gain or loss was recorded in connection with this transaction. 3. Shareholders' equity: As at September 30, 2006, we have 3,725,698 outstanding Variable Multiple Voting Shares ("VMVS"), 33,078,418 outstanding Limited Voting Shares ("LVS"), and 4,289,343 outstanding stock options (weighted average exercise price of C$59.82 ($53.55)). (a) Earnings (loss) per share: A reconciliation of the net earnings (loss) and weighted average number of VMVS and LVS used to calculate basic and diluted earnings (loss) per share is as follows: Three months ended September 30, 2006 2005 ----------------------------------------------------------------------- Net earnings Shares Net loss Shares ----------------------------------------------------------------------- Basic earnings (loss) per share amounts $ 10,941 36,799,139 $ (11,441) 36,638,577 Effect of assumed dilutive conversions: Stock option plan - 640,485 - - ------------------------------------------------ Diluted earnings (loss) per share amounts $ 10,941 37,439,624 $ (11,441) 36,638,577 ------------------------------------------------ ------------------------------------------------ Nine months ended September 30, 2006 2005 ----------------------------------------------------------------------- Net earnings Shares Net earnings Shares ----------------------------------------------------------------------- Basic earnings per share amounts $ 33,408 36,750,775 $ 9,547 36,624,036 Effect of assumed dilutive conversions: Stock option plan - 633,746 - 1,314,393 ------------------------------------------------ Diluted earnings per share amounts $ 33,408 37,384,521 $ 9,547 37,938,429 ------------------------------------------------ ------------------------------------------------ The diluted earnings (loss) per share calculation excluded the effect of the assumed conversions of 1,461,976 stock options to LVS, under our stock option plan, during the three months and nine months ended September 30, 2006 (2005 - 4,540,843 and 693,056 stock options, respectively), as the inclusion of these options would have resulted in an anti-dilutive effect. As we incurred a net loss for the three months ended September 30, 2005, all outstanding stock options were excluded from the calculation of diluted loss per share for this period. There was no dilution in 2006 and 2005 relating to our convertible notes. (b) Stock-based compensation: We use the fair value-based method to account for all employee stock options granted or modified on or after January 1, 2003. Accordingly, options granted prior to that date continue to be accounted for using the settlement method. Stock options to acquire 41,650 LVS were granted in the nine months ended September 30, 2006 at a weighted average exercise price of C$62.61 ($53.65). The fair value of stock options granted in the nine months ended September 30, 2006 was estimated using the Black-Scholes options pricing model with the following assumptions: risk-free interest rates ranging from 4.09% to 4.17%; semi-annual dividend per LVS of C$0.055; volatility factor of the expected market price of our LVS of 27%; and expected lives of the options ranging between four and seven years, depending on the level of the employee who was granted stock options. For the options granted in the nine months ended September 30, 2006, the weighted average fair value of the options at the grant dates was C$21.49 ($18.41). For purposes of stock option expense and pro forma disclosures, the estimated fair value of the options is amortized to compensation expense over the options' vesting period. There were no stock options granted in the three months ended September 30, 2006 and the nine months ended September 30, 2005. Pro forma disclosure is required to show the effect of the application of the fair value-based method to employee stock options granted during 2002, which were not accounted for using the fair value-based method. For the three months and nine months ended September 30, 2006 and 2005, if we had applied the fair value-based method to options granted during 2002, our net earnings (loss) and basic and diluted earnings (loss) per share would have been adjusted to the pro forma amounts indicated below: Three months ended Nine months ended September 30, September 30, 2006 2005 2006 2005 ------------------------------------------------------------------------- Stock-based compensation expense $ (556) $ (486) $ (1,642) $ (1,494) ------------------------------------------- ------------------------------------------- Net earnings (loss), as reported $ 10,941 $ (11,441) $ 33,408 $ 9,547 Increase in stock-based compensation expense that would have been recorded if all stock options granted during 2002 had been expensed (650) (717) (1,954) (2,089) ------------------------------------------- Pro forma net earnings (loss) $ 10,291 $ (12,158) $ 31,454 $ 7,458 ------------------------------------------- ------------------------------------------- Earnings (loss) per share: Basic, as reported $ 0.30 $ (0.31) $ 0.91 $ 0.26 Basic, pro forma 0.28 (0.33) 0.86 0.20 Diluted, as reported 0.29 (0.31) 0.89 0.25 Diluted, pro forma 0.28 (0.33) 0.84 0.20 4. Other income (expenses), net: Three months ended Nine months ended September 30, September 30, 2006 2005 2006 2005 ------------------------------------------------------------------------- Foreign exchange gain (loss) $ 1,286 $ (16,172) $ (6,633) $ (19,854) Asset provisions and write downs (654) (4,624) (362) (6,725) Loss on disposition of assets - (268) - (5,840) ------------------------------------------- $ 632 $ (21,064) $ (6,995) $ (32,419) ------------------------------------------- ------------------------------------------- The foreign exchange gain (loss) in 2006 and 2005 related primarily to the foreign currency translation gains and losses on unhedged net monetary asset and liability positions, primarily in US dollars, euros, pounds sterling and Australian dollars, and local currency foreign exchange gains and losses on net monetary assets incurred by our designated foreign self-sustaining subsidiaries. As at September 30, 2006, we have foreign exchange forward contracts in place to sell forward $44,211 of US dollars to receive Canadian dollars at a weighted average forward exchange rate of 1.114 Canadian dollars to a US dollar maturing over the period to March 2008. All our foreign exchange forward contracts are being marked-to-market on a monthly basis with the resulting changes in fair values being recorded as a foreign exchange gain or loss. This resulted in a $176 foreign exchange loss and $1,268 foreign exchange gain being recorded in the three months and nine months ended September 30, 2006, respectively. We did not sell forward US dollars during the nine months ended September 30, 2005. Subsequent to September 30, 2006, we have sold forward an additional $3,543 of US dollars to receive Canadian dollars at a weighted average forward exchange rate of 1.129 Canadian dollars to a US dollar maturing over the period to April 2008. 5. Income taxes: During the three months and nine months ended September 30, 2006, we recorded an additional valuation allowance of $211 and $1,957 respectively, related to not recognizing a tax benefit on certain foreign exchange losses, due to the uncertainty associated with the utilization of these losses. This increased our income tax expense for the three months and nine months ended September 30, 2006 by this amount. In connection with the disposition of The Pierre in June 2005, we recorded an income tax benefit of approximately $9,200 for the nine months ended September 30, 2005. 6. Pension expense: The pension expense for the three months and nine months ended September 30, 2006 was $855 and $2,681, respectively (2005 - $1,134 and $2,351, respectively). 7. Guarantees and commitments: We have provided certain guarantees and have other similar commitments typically made in connection with properties under our management. These contractual obligations and other commitments are more fully described in the consolidated financial statements for the year ended December 31, 2005. Since December 31, 2005, we have decreased our guarantees and commitments by approximately $1,300. 8. Segmented information: Our strategy is to focus on hotel management rather than hotel ownership. Four Seasons Hotel Vancouver is our only remaining hotel whose results we consolidate. As a result, commencing January 1, 2006, corporate expenses are reflected in our results as general and administrative expenses in the consolidated statements of operations for the three months and nine months ended September 30, 2006. Corporate expenses for the three months and nine months ended September 30, 2005 that previously were included in our Ownership Operations segment have been reclassified to the Management Operations segment and included in general and administrative expenses in the consolidated statements of operations. Three months ended September 30, 2006 ----------------------------------- Management Ownership Operations Operations Total ------------------------------------------------------------------------- Revenues: Hotel management fees $ 27,193 $ - $ 27,193 Other fees 3,568 - 3,568 ----------------------------------- 30,761 - 30,761 Hotel ownership revenues - 8,781 8,781 Reimbursed costs 18,675 - 18,675 ----------------------------------- 49,436 8,781 58,217 ----------------------------------- Expenses: General and administrative expenses (15,166) - (15,166) Hotel ownership cost of sales and expenses - (7,764) (7,764) Reimbursed costs (18,675) - (18,675) ----------------------------------- (33,841) (7,764) (41,605) ----------------------------------- Operating earnings before other items $ 15,595 $ 1,017 $ 16,612 ----------------------------------- ----------------------------------- Three months ended September 30, 2005 ----------------------------------- Management Ownership Operations Operations Total ------------------------------------------------------------------------- Revenues: Hotel management fees $ 22,531 $ - $ 22,531 Other fees 3,471 - 3,471 ----------------------------------- 26,002 - 26,002 Hotel ownership revenues - 9,749 9,749 Reimbursed costs 16,453 - 16,453 ----------------------------------- 42,455 9,749 52,204 ----------------------------------- Expenses: General and administrative expenses (15,625) - (15,625) Hotel ownership cost of sales and expenses - (8,417) (8,417) Reimbursed costs (16,453) - (16,453) ----------------------------------- (32,078) (8,417) (40,495) ----------------------------------- Operating earnings before other items $ 10,377 $ 1,332 $ 11,709 ----------------------------------- ----------------------------------- Nine months ended September 30, 2006 ----------------------------------- Management Ownership Operations Operations Total ------------------------------------------------------------------------- Revenues: Hotel management fees $ 90,623 $ - $ 90,623 Other fees 13,305 - 13,305 ----------------------------------- 103,928 - 103,928 Hotel ownership revenues - 24,741 24,741 Reimbursed costs 54,990 - 54,990 ----------------------------------- 158,918 24,741 183,659 ----------------------------------- Expenses: General and administrative expenses (44,067) - (44,067) Hotel ownership cost of sales and expenses - (23,814) (23,814) Reimbursed costs (54,990) - (54,990) ----------------------------------- (99,057) (23,814) (122,871) ----------------------------------- Operating earnings before other items $ 59,861 $ 927 $ 60,788 ----------------------------------- ----------------------------------- Nine months ended September 30, 2005 ----------------------------------- Management Ownership Operations Operations Total ------------------------------------------------------------------------- Revenues: Hotel management fees $ 75,602 $ - $ 75,602 Other fees 9,991 - 9,991 ----------------------------------- 85,593 - 85,593 Hotel ownership revenues - 57,970 57,970 Reimbursed costs 46,277 - 46,277 ----------------------------------- 131,870 57,970 189,840 ----------------------------------- Expenses: General and administrative expenses (41,495) - (41,495) Hotel ownership cost of sales and expenses - (58,189) (58,189) Reimbursed costs (46,277) - (46,277) ----------------------------------- (87,772) (58,189) (145,961) ----------------------------------- Operating earnings (loss) before other items $ 44,098 $ (219) $ 43,879 ----------------------------------- ----------------------------------- 9. Subsequent event: On November 6, 2006, we announced that our Board of Directors had received a proposal to pursue a transaction through which FSHI would be taken private for $82.00 cash per LVS. The Board of Directors has established a special committee of independent directors that will consider the proposed transaction and make recommendations to the Board. Although there is no certainty that the transaction contemplated by the proposal, or any other transaction, will be completed or the terms and conditions of any such transaction, some of our arrangements and agreements may be impacted by certain terms in those arrangements and agreements, including the following: (a) Convertible senior notes: Our convertible senior notes issued in 2004 are convertible into LVS (although at our option, we may make a cash payment in lieu of all or some of those LVS) in certain circumstances, including upon the occurrence of a "fundamental change", as defined in the indenture pursuant to which the notes were issued. The proposal, if completed, would result in a fundamental change occurring, in which case a holder of notes would be able to surrender notes for conversion and would be entitled to receive on conversion: (i) If notes are surrendered for conversion in connection with the fundamental change within the time period prescribed in the indenture, the number of our LVS into which the notes would be convertible (currently 13.9581 LVS per each one thousand US dollar principal amount of notes), plus a make whole premium, as defined in the indenture (estimated to be in the range of $87.00 to $98.00 per each one thousand US dollar principal amount of notes based on the proposed price of $82.00 per LVS pursuant to the proposal and assuming that, if the proposal is implemented, the effective date would be between January 1, 2007 and July 31, 2007), and an amount equal to any accrued but unpaid interest to, but not including, the conversion date; or (ii) If notes are surrendered for conversion after the time period prescribed in the indenture and after the fundamental change, the consideration that the holder would have received if the holder had held the number of LVS into which the converted notes were convertible immediately before the fundamental change ($1,144.56 per each one thousand US dollar principal amount of notes, based on the $82.00 per LVS in the transaction that has been proposed). In this circumstance, no make whole premium would be payable. The proposed transaction would constitute a "change in control", as defined in the indenture, and as a result we would be required to make an offer to repurchase the notes at a purchase price equal to the principal amount of the notes plus a make whole premium (as described above), and an amount equal to any accrued and unpaid interest to, but not including, the date of repurchase. We have the right to satisfy the obligations in respect of conversion in the circumstances described in (i) above, and in respect of a repurchase of notes as described above, with LVS (or other "applicable stock", as defined in the indenture, in the case of repurchase of notes) or at our option cash or a combination of LVS and cash. Further information regarding the terms of our convertible notes is set out in the indenture pursuant to which the notes were issued. (b) Long-term incentive arrangement: Pursuant to an agreement approved by the shareholders of FSHI at a special meeting in 1989, FSHI and its principal operating subsidiary, Four Seasons Hotels Limited, have agreed to make a cash payment to Mr. Isadore Sharp, the Chief Executive Officer of FSHI, on an arms-length sale of control of FSHI. If the proposed transaction is completed, Mr. Sharp would be entitled to realize proceeds related to the incentive arrangement estimated to be approximately $288,000 (based on a proposed price of $82.00 per LVS pursuant to the proposal and assuming that at the time of the completion of the proposed transaction approximately 41.1 million LVS and VMVS and which includes LVS that may be issued upon the exercise of previously granted stock options, were outstanding). (c) Other arrangements and agreements: Certain other arrangements and agreements are subject to "change of control" provisions. These include the following: (i) Under the terms of our current $125,000 bank credit facility, a change of control triggers a default under the bank credit facility, and if not waived, would require the repayment of all amounts outstanding under this credit facility and would also result in the termination of this credit facility. As at September 30, 2006, no amounts were borrowed under this credit facility, but approximately $1,600 of letters of credit were issued under this credit facility. (ii) Pursuant to a cross default provision, a default under the bank credit facility in turn causes a default under our currency and interest rate swap agreement. In such circumstances, the counterparty to the swap agreement may demand that the swap be terminated. As at September 30, 2006, the net amount that would be required to be paid by FSHI to the counterparty on termination was approximately $34,900 (of which approximately $29,100 is included in long-term obligations). We are continuing to evaluate the potential impact, if any, of the proposed transaction on our other agreements and arrangements. FOUR SEASONS HOTELS INC. SUMMARY OF HOTEL OPERATING DATA - CORE HOTELS(1) Three months ended September 30, (Unaudited) 2006 2005 Variance ------------------------------------------------------------------------- Worldwide # of Properties 56 56 - # of Rooms 14,290 14,290 - Occupancy(2) 68.6% 70.1% (1.5)pts. ADR(3) $366.88 $327.51 12.0% RevPAR(4) $251.62 $229.44 9.7% Gross operating margin(5) 30.4% 29.2% 1.2pts. United States # of Properties 20 20 - # of Rooms 6,195 6,195 - Occupancy(2) 73.4% 74.1% (0.7)pts. ADR(3) $398.26 $364.32 9.3% RevPAR(4) $292.23 $269.92 8.3% Gross operating margin(5) 28.5% 27.1% 1.4pts. Other Americas/Caribbean # of Properties 10 10 - # of Rooms 2,165 2,165 - Occupancy(2) 62.0% 66.5% (4.5)pts. ADR(3) $303.77 $273.92 10.9% RevPAR(4) $188.38 $182.23 3.4% Gross operating margin(5) 14.1% 17.2% (3.1)pts. Europe # of Properties 10 10 - # of Rooms 1,720 1,720 - Occupancy(2) 71.3% 68.9% 2.4pts. ADR(3) $642.32 $555.96 15.5% RevPAR(4) $458.03 $382.94 19.6% Gross operating margin(5) 38.1% 36.3% 1.8pts. Middle East # of Properties 5 5 - # of Rooms 1,215 1,215 - Occupancy(2) 69.6% 69.0% 0.6pts. ADR(3) $249.41 $199.22 25.2% RevPAR(4) $173.65 $137.47 26.3% Gross operating margin(5) 49.5% 43.8% 5.7pts. Asia/Pacific # of Properties 11 11 - # of Rooms 2,995 2,995 - Occupancy(2) 61.4% 65.4% (4.0)pts. ADR(3) $210.24 $195.28 7.7% RevPAR(4) $129.09 $127.75 1.0% Gross operating margin(5) 32.4% 32.8% (0.4)pts. ------------------------------------------------------------------------- (1) 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. All room numbers in this table are approximate. (2) Occupancy percentage is defined as the total number of rooms occupied divided by the total number of rooms available. (3) ADR is defined as average daily room rate per room occupied, calculated as the weighted average for each region. In 2004 and 2005, ADR was calculated as a straight average for each region. (4) 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 and 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. (5) Gross operating margin represents gross operating profit as a percentage of gross operating revenue. FOUR SEASONS HOTELS INC. SUMMARY OF HOTEL OPERATING DATA - CORE HOTELS(1) Nine months ended September 30, (Unaudited) 2006 2005 Variance ------------------------------------------------------------------------- Worldwide # of Properties 56 56 - # of Rooms 14,290 14,290 - Occupancy(2) 69.6% 69.0% 0.6pts. ADR(3) $368.54 $334.54 10.2% RevPAR(4) $256.63 $230.88 11.2% Gross operating margin(5) 32.3% 30.5% 1.8pts. United States # of Properties 20 20 - # of Rooms 6,195 6,195 - Occupancy(2) 74.8% 74.1% 0.7pts. ADR(3) $400.44 $364.43 9.9% RevPAR(4) $299.46 $270.13 10.9% Gross operating margin(5) 30.5% 28.7% 1.8pts. Other Americas/Caribbean # of Properties 10 10 - # of Rooms 2,165 2,165 - Occupancy(2) 65.6% 65.8% (0.2)pts. ADR(3) $374.42 $333.52 12.3% RevPAR(4) $245.59 $219.32 12.0% Gross operating margin(5) 28.1% 27.6% 0.5pts. Europe # of Properties 10 10 - # of Rooms 1,720 1,720 - Occupancy(2) 67.9% 63.1% 4.8pts. ADR(3) $595.27 $546.49 8.9% RevPAR(4) $403.89 $344.82 17.1% Gross operating margin(5) 34.3% 32.1% 2.2pts. Middle East # of Properties 5 5 - # of Rooms 1,215 1,215 - Occupancy(2) 70.2% 68.5% 1.7pts. ADR(3) $248.59 $212.38 17.0% RevPAR(4) $174.52 $145.40 20.0% Gross operating margin(5) 50.4% 46.8% 3.6pts. Asia/Pacific # of Properties 11 11 - # of Rooms 2,995 2,995 - Occupancy(2) 62.7% 64.5% (1.8)pts. ADR(3) $206.97 $196.15 5.5% RevPAR(4) $129.80 $126.61 2.5% Gross operating margin(5) 33.1% 31.9% 1.2pts. ------------------------------------------------------------------------- (1) 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. All room numbers in this table are approximate. (2) Occupancy percentage is defined as the total number of rooms occupied divided by the total number of rooms available. (3) ADR is defined as average daily room rate per room occupied, calculated as the weighted average for each region. In 2004 and 2005, ADR was calculated as a straight average for each region. (4) 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 and 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. (5) Gross operating margin represents gross operating profit as a percentage of gross operating revenue. FOUR SEASONS HOTELS INC. SUMMARY OF HOTEL OPERATING DATA - ALL MANAGED HOTELS(1) As at September 30, (Unaudited) 2006 2005 Variance ------------------------------------------------------------------------- Worldwide(2) # of Properties 70 67 3 # of Rooms 17,515 17,195 320 United States # of Properties 24 24 - # of Rooms 7,045 7,140 (95) Other Americas/Caribbean # of Properties 10 10 - # of Rooms 2,165 2,165 - Europe # of Properties 12 11 1 # of Rooms 1,960 1,855 105 Middle East # of Properties 7 6 1 # of Rooms 1,740 1,445 295 Asia/Pacific(2) # of Properties 17 16 1 # of Rooms 4,605 4,590 15 ------------------------------------------------------------------------- (1) All room numbers in this table are approximate. (2) Since September 30, 2006, we commenced management of Four Seasons Resort Maldives at Landaa Giraavaru, which has 100 rooms. The property is not reflected in this table. FOUR SEASONS HOTELS INC. REVENUES UNDER MANAGEMENT - ALL MANAGED HOTELS Three months ended Nine months ended (Unaudited) September 30, September 30, (In thousands of US dollars) 2006 2005 2006 2005 ------------------------------------------------------------------------- Revenues under management(3) $699,157 $603,838 $2,142,183 $1,883,084 -------------------------------------------- -------------------------------------------- ------------------------------------------------------------------------- (3) Revenues under management consist of rooms, food and beverage, telephone and other revenues of all the hotels and resorts that we manage. Approximately 59% of the fee revenues (excluding reimbursed costs) we earned represented a percentage of the total revenues under management of all hotels and resorts. FOUR SEASONS HOTELS INC. SCHEDULED OPENING OF PROPERTIES UNDER CONSTRUCTION OR IN ADVANCED STAGES OF DEVELOPMENT Approximate Hotel/Resort/Residence Club and Location(1) (2) Number of Rooms Scheduled 2006/2007 openings ---------------------------- Four Seasons Hotel Alexandria, Egypt 125 Four Seasons Hotel Florence, Italy 120 Four Seasons Hotel Istanbul at the Bosphorus, Turkey 170 Four Seasons Resort Koh Samui, Thailand(x) 60 Four Seasons Resort Lana'i at Koele, Hawaii, USA(3) 100 Four Seasons Hotel Mumbai, India(x) 230 Four Seasons Hotel Westlake Village, California, USA 270 Beyond 2007 ----------- Four Seasons Hotel Bahrain, Bahrain 270 Four Seasons Hotel Baltimore, Maryland, USA(x) 200 Four Seasons Resort Barbados, Barbados(x) 120 Four Seasons Hotel Beijing, People's Republic of China 325 Four Seasons Hotel Beirut, Lebanon 235 Four Seasons Resort Bora Bora, French Polynesia 105 Four Seasons Resort Cham Island, Vietnam 100 Four Seasons Hotel Doha at the Pearl, Qatar(x) 250 Four Seasons Hotel Dubai, United Arab Emirates(x) 375 Four Seasons Hotel Hangzhou, People's Republic of China(x) 100 Four Seasons Hotel Kuala Lumpur, Malaysia(x) 140 Four Seasons Hotel Kuwait, Kuwait 300 Four Seasons Hotel Macau, Special Administrative Region of the People's Republic of China(x) 370 Four Seasons Hotel Marrakech, Morocco(x) 140 Four Seasons Resort Mauritius, Republic of Mauritius(x) 120 Four Seasons Hotel Moscow, Russia(x) 185 Four Seasons Hotel Moscow Kamenny Island, Russia(x) 80 Four Seasons Hotel New Orleans, Louisiana, USA(x) 240 Four Seasons Resort Puerto Rico, Puerto Rico(x) 250 Four Seasons Hotel Seattle, Washington, USA(x) 150 Four Seasons Resort Seychelles, Seychelles(x) 65 Four Seasons Hotel Shanghai at Pudong, People's Republic of China(x) 190 Four Seasons Hotel St. Petersburg, Russia 200 Four Seasons Hotel Taipei, Taiwan(x) 275 Four Seasons Hotel Toronto, Ontario, Canada(x) 265 Four Seasons Resort Vail, Colorado, USA(x) 120 (x) Expected to include a residential component. ------------------------------------------------- (1) Information concerning hotels, resorts and residential projects under construction or under development is based upon agreements and letters of intent and may be subject to change prior to the completion of the project. The dates of scheduled openings have been estimated by management based upon information provided by the various developers. There can be no assurance that the date of scheduled opening will be achieved or that these projects will be completed. In particular, in the case where a property is scheduled to open near the end of a year, there is a greater possibility that the year of opening could be changed. The process and risks associated with the management of new properties are dealt with in greater detail in our 2005 Annual Report. (2) We have made an investment in Orlando, in which we expect to include a Four Seasons Residence Club and/or a Four Seasons branded residential component. The financing for this project has not yet been completed and therefore a scheduled opening date cannot be established at this time. (3) The Lodge at Koele is currently managed by Four Seasons and is expected to be rebranded as Four Seasons Resort Lana'i at Koele in 2006 when the necessary renovations are completed. DATASOURCE: Four Seasons Hotels and Resorts CONTACT: PRNewswire - - 11/09/2006

Market Data

News

Trading Tools

Markets

Discover

Hot Features

Follow Feed

Options Flow

Monitor

FS Four Seasons Hotel