WEH Westcoast Hosp Cp

Red Lion Hotels Deliver Strong RevPAR Growth, Driving 115% Increase in Net Income; WestCoast Hospitality Corporation Announces Second Quarter Financial Results SPOKANE, Wash., July 28 /PRNewswire-FirstCall/ -- WestCoast Hospitality Corporation (NYSE:WEH) today announced results for the quarter ended June 30, 2005. Hotel Statistics In the second quarter of 2005, RevPAR (revenue per available room) for comparable system-wide hotels (hotels owned, leased, managed and franchised for at least one year) increased 8.5% over the 2004 second quarter level to $47.64. This increase was generated by a 2.9 point increase in average occupancy, to 64.7%, and a 3.7% increase in ADR (average daily rate), to $73.68. For hotels carrying the Red Lion brand, RevPAR increased 9.0% in the quarter, to $47.46, driven by a 3.2 point increase in average occupancy, to 65.5%, and a 3.8% increase in ADR, to $72.51. Consolidated Company Performance Total revenue from continuing operations in the second quarter was $44.2 million, up 6.5% from the comparable period in 2004. Revenues in the hotels division were higher as a result of increased RevPAR. Revenues for the entertainment division increased 42.6% to $2.6 million. Revenues for the real estate division were down 6.6% to $1.2 million. For the second quarter of 2005, the net income was $1.7 million or $0.13 per share compared to net income of $0.8 million or $0.06 per share in the second quarter of 2004, an increase of 115%. This net income increase was primarily driven by positive flow-through from hotel operations. EBITDA (earnings before interest, taxes, depreciation and amortization) from continuing operations was up 10.8% in the quarter to $7.5 million. For the year to date, net loss applicable to common shareholders was $1.3 million ($0.11 per share), compared to a net loss of $1.9 million ($0.15 per share) for the same period in 2004. Arthur M. Coffey, President and Chief Executive Officer, said, "The Red Lion brand is building momentum that is being reflected in our financial results. With our ongoing investments in our Red Lion hotels, the improved lodging market and our implementation of major brand initiatives, including our redesigned redlion.com website, we are optimistic that the company will continue to drive improved financial results. We intend to take advantage of this momentum to increase our development and franchising of Red Lion hotels." Recent Events On May 19, 2005, the shareholders of the company elected Ryland P. "Skip" Davis as a new director to replace Stephen Blank. Mr. Davis has been Chief Executive Officer of Providence Health Care since 1998 and Chief Executive Officer of Sacred Heart Medical Center in Spokane since 1996. He brings a wealth of strategic management experience to the company's board of directors. On July 22, 2005, the company sold a 50% interest in its Kalispell Center retail and hotel complex located in Kalispell, Montana to GVD Commercial Properties, Inc., which has substantial experience in shopping center and retail development. G & B Real Estate Services, a division of WestCoast Hospitality Corporation, will continue to manage the retail component of Kalispell Center. WestCoast will lease back the hotel at Kalispell Center, which will be re-named the Red Lion Kalispell Hotel after undergoing a complete renovation and expansion. In the last week, the company completed the sale of the Red Lion Inn in Aberdeen, Washington and the Red Lion ParkCenter Suites in Boise, Idaho. The aggregate sales price for these two transactions was approximately $15.8 million. The company currently has five additional hotel properties and one office building subject to purchase agreements. It anticipates closing sales on as many as five of these properties in the third quarter. Proceeds of these sales will be used to reinvest in the company's Red Lion hotels. Hotels Division Performance For the second quarter of 2005, the company reported hotel revenue from continuing operations of $39.4 million, up $2.1 million from the previous comparable quarter. Direct expenses increased $1.1 million to $30.4 million. RevPAR from continuing operations at owned and leased hotels was up 9.7% from the second quarter of 2004, generated by a 3.4 point increase in occupancy and a 4.1% increase in ADR. John Taffin, Executive Vice President, Hotel Operations, said, "Red Lion hotels continue to deliver increases in occupancy and ADR that are providing strong profit growth for our hotels. As we invest an additional $40 million in renovating our Red Lion hotels, we look forward to the positive impacts we expect these upgrades will bring. Guest reaction to renovations in the hotels has been very positive." The company has also completed installation of the new MICROS Systems, Inc. Opera property management system in 15 of its Red Lion hotels. This system shares a single database with the company's central reservations system, allowing for better management of rates and availability. "These property management systems and our redesigned redlion.com website further enhance our ability to manage reservations generated through electronic channels," said Mr. Taffin. He added, "The new tools position us very well to take advantage of the explosion of internet travel bookings." About WestCoast Hospitality Corporation WestCoast Hospitality Corporation is a hospitality and leisure company primarily engaged in the ownership, management, development and franchising of upper mid-scale, full service hotels under its Red Lion(R) and WestCoast(R) brands. In addition, through its entertainment division, which includes its TicketsWest.com, Inc. subsidiary, it engages in event ticket distribution and promotes and presents a variety of entertainment productions. G&B Real Estate Services, its real estate division, engages in traditional real estate-related services, including developing, managing and brokering sales and leases of commercial and multi-unit residential properties. This press release contains forward-looking statements within the meaning of federal securities law, including statements concerning plans, objectives, goals, strategies, projections of future events or performance and underlying assumptions (many of which are based, in turn, upon further assumptions). The forward-looking statements in this press release are inherently subject to a variety of risks and uncertainties that could cause actual results to differ materially from those expressed. Such risks and uncertainties include, among others, economic cycles; international conflicts; changes in future demand and supply for hotel rooms; competitive conditions in the lodging industry; relationships with franchisees and properties; impact of government regulations; ability to obtain financing; changes in energy, healthcare, insurance and other operating expenses; ability to sell non-core assets; ability to locate lessees for rental property and managing and leasing properties owned by third parties; dependency upon the ability and experience of executive officers and ability to retain or replace such officers as well as other matters discussed in the company's annual report on Form 10-K for the 2004 fiscal year and in other documents filed by the company with the Securities and Exchange Commission. CONTACT: Anupam Narayan, Executive Vice President, Chief Financial Officer of WestCoast Hospitality Corporation, +1-509-459-6100, or . WestCoast Hospitality Corporation Consolidated Statements of Operations (unaudited) ($ in thousands, except footnotes) Three months ended June 30, 2005 2004 $ Change % Change Revenue: Hotels $39,423 $37,364 $2,059 5.5% Franchise and management 607 712 (105) -14.7% Entertainment 2,613 1,833 780 42.6% Real estate 1,229 1,316 (87) -6.6% Other 348 313 35 11.2% Total revenues 44,220 41,538 2,682 6.5% Operating expenses: Hotels 30,437 29,323 1,114 3.8% Franchise and management 165 257 (92) -35.8% Entertainment 2,321 1,847 474 25.7% Real estate 890 777 113 14.5% Other 246 206 40 19.4% Depreciation and amortization 2,881 2,600 281 10.8% Hotel facility and land lease 1,745 1,798 (53) -2.9% Gain on asset dispositions, net (119) (208) 89 42.8% Undistributed corporate expenses 1,051 848 203 23.9% Total expenses 39,617 37,448 2,169 5.8% Operating income 4,603 4,090 513 12.5% Other income (expense): Interest expense (3,598) (3,657) 59 1.6% Minority interest in partnerships, net (34) (8) (26) -325.0% Other income (expense), net 90 124 (34) -27.4% Income from continuing operations before income taxes 1,061 549 512 93.3% Income tax expense 279 135 144 106.7% Net income from continuing operations 782 414 368 88.9% Discontinued operations: Income from operations of discontinued business units, net of income tax expense of $577 and $211 951 391 560 143.2% Net income and income applicable to common shareholders $1,733 $805 $928 115.3% EBITDA(1) $9,479 $8,449 $1,030 12.2% EBITDA as a percentage of revenues(2) 18.4% 17.3% EBITDA from continuing operations(1) $7,540 $6,806 $734 10.8% EBITDA from continuing operations(2) as a percentage of revenues 17.1% 16.4% (1) The definition of "EBITDA" and how that measure relates to net income is discussed further in this release under Non-GAAP Financial Measures. EBITDA represents net income (or loss) before interest expense, income tax benefit or expense, depreciation, and amortization. EBITDA is not intended to represent net income as defined by generally accepted accounting principles in the United States and such information should not be considered as an alternative to net income, cash flows from operations or any other measure of performance prescribed by generally accepted accounting principles in the United States. We utilize EBITDA because management believes that investors find it to be a useful tool to perform more meaningful comparisons of past, present and future operating results and as a means to evaluate the results of core on-going operations. EBITDA from continuing operations is calculated in the same manner, but excludes the operating activities of business units identified as discontinued. (2) The calculation of EBITDA as a percentage of revenues is based upon total operating revenues, from both continuing and discontinued operations, of $51,601,000 and $48,936,000 for the three months ended June 30, 2005 and 2004, respectively. EBITDA from continuing operations as a percentage of revenues is based upon the operating results of continuing business units as presented in the statements. WestCoast Hospitality Corporation Earnings Per Share and Hotel Statistics (unaudited) (shares in thousands) Three months ended June 30, 2005 2004 Earnings per common share: Basic Income applicable to common shareholders before discontinued operations(1) $0.06 $0.03 Income from discontinued operations 0.07 0.03 Income applicable to common shareholders $0.13 $0.06 Diluted Income applicable to common shareholders before discontinued operations(1) $0.06 $0.03 Income on discontinued operations 0.07 0.03 Income applicable to common shareholders $0.13 $0.06 Weighted average shares - basic 13,092 13,046 Weighted average shares - diluted(2) 13,416 13,335 Key Comparable Hotel Statistics: Three months ended June 30, 2005 2004 $ Change % Change Combined (owned, leased, managed and franchised)(3) Average occupancy(4) 64.7% 61.8% ADR(5) $73.68 $71.06 $2.62 3.7% RevPAR(6) $47.64 $43.90 $3.74 8.5% (1) The net income used to calculate the net earnings per share applicable to common shareholders before discontinued operations includes all dividends on the retired cumulative preferred shares if applicable for the period presented. (2) For the three months ended June 30, 2005, 38,644 outstanding options to purchase common shares were considered dilutive, of the 1,024,019 options outstanding as of that date. For the three months ended June 30, 2004, 3,596 outstanding options to purchase common shares were considered dilutive, of the 675,445 options outstanding as of that date. In addition, the 286,161 convertible operating partnership ("OP") units were considered dilutive and are therefore included in the calculation of diluted weighted average shares for both those same periods. (3) Includes all hotels owned, leased, managed and franchised for greater than one year by WestCoast Hospitality Corporation. No adjustment has been made for hotels classified as discontinued operations. (4) Average occupancy represents total paid rooms divided by total available rooms. Total available rooms represents the number of rooms available multiplied by the number of days in the reported period. (5) Average daily rate ("ADR") represents total room revenues divided by the total number of paid rooms occupied by hotel guests. (6) Revenue per available room ("RevPAR") represents total room and related revenues divided by total available rooms. WestCoast Hospitality Corporation Consolidated Statements of Operations (unaudited) ($ in thousands, except footnotes) Six months ended June 30, 2005 2004 $ Change % Change Revenue: Hotels $69,765 $67,431 $2,334 3.5% Franchise and management 1,418 1,321 97 7.3% Entertainment 5,418 5,418 -- 0.0% Real estate 2,458 2,937 (479) -16.3% Other 633 575 58 10.1% Total revenues 79,692 77,682 2,010 2.6% Operating expenses: Hotels 58,086 56,502 1,584 2.8% Franchise and management 262 463 (201) -43.4% Entertainment 4,789 4,649 140 3.0% Real estate 1,728 1,705 23 1.3% Other 462 412 50 12.1% Depreciation and amortization 5,720 5,076 644 12.7% Hotel facility and land lease 3,485 3,778 (293) -7.8% Gain on asset dispositions, net (307) (396) 89 22.5% Undistributed corporate expenses 2,003 1,633 370 22.7% Total expenses 76,228 73,822 2,406 3.3% Operating income 3,464 3,860 (396) -10.3% Other income (expense): Interest expense (7,199) (6,503) (696) -10.7% Minority interest in partnerships, net 15 43 (28) -65.1% Other income, net 86 254 (168) -66.1% Loss from continuing operations before income taxes (3,634) (2,346) (1,288) -54.9% Income tax benefit (1,416) (960) (456) -47.5% Net loss from continuing operations (2,218) (1,386) (832) -60.0% Discontinued operations: Income (loss) from operations of discontinued business units, net of income tax expense (benefit) of $456 and ($85) 828 (157) 985 627.4% Net loss (1,390) (1,543) 153 9.9% Preferred stock dividend -- (377) 377 100.0% Loss applicable to common shareholders $(1,390) $(1,920) $530 27.6% EBITDA(1) $11,391 $11,073 $318 2.9% EBITDA as a percentage of revenues(2) 12.3% 12.2% EBITDA from continuing operations(1) $9,285 $9,233 $52 0.6% EBITDA from continuing operations (2) as a percentage of revenues 11.7% 11.9% (1) The definition of "EBITDA" and how that measure relates to net income is discussed further in this release under Non-GAAP Financial Measures. EBITDA represents net income (or loss) before interest expense, income tax benefit or expense, depreciation, and amortization. EBITDA is not intended to represent net income as defined by generally accepted accounting principles in the United States and such information should not be considered as an alternative to net income, cash flows from operations or any other measure of performance prescribed by generally accepted accounting principles in the United States. We utilize EBITDA because management believes that investors find it to be a useful tool to perform more meaningful comparisons of past, present and future operating results and as a means to evaluate the results of core on-going operations. EBITDA from continuing operations is calculated in the same manner, but excludes the operating activities of business units identified as discontinued. (2) The calculation of EBITDA as a percentage of revenues is based upon total operating revenues, from both continuing and discontinued operations, of $92,238,000 and $90,566,000 for the six months ended June 30, 2005 and 2004, respectively. EBITDA from continuing operations as a percentage of revenues is based upon the operating results of continuing business units as presented in the statements. WestCoast Hospitality Corporation Earnings Per Share and Hotel Statistics (unaudited) (shares in thousands) Six months ended June 30, 2005 2004 Earnings per common share: Basic Loss applicable to common shareholders before discontinued operations(1) $(0.17) $(0.14) Income (loss) on discontinued operations 0.06 (0.01) Loss applicable to common shareholders $(0.11) $(0.15) Diluted Loss applicable to common shareholders before discontinued operations(1) $(0.17) $(0.14) Income (loss) on discontinued operations 0.06 (0.01) Loss applicable to common shareholders $(0.11) $(0.15) Weighted average shares - basic 13,085 13,035 Weighted average shares - diluted(2) 13,085 13,035 Key Comparable Hotel Statistics: Six months ended June 30, 2005 2004 $ Change % Change Combined (owned, leased, managed and franchised)(3) Average occupancy(4) 58.4% 56.2% ADR(5) $71.37 $70.00 $1.37 2.0% RevPAR(6) $41.70 $39.36 $2.34 5.9% (1) The net income or loss used to calculate the net earnings or loss per share applicable to common shareholders before discontinued operations includes all dividends on the retired cumulative preferred shares if applicable for the period presented. (2) For the six months ended June 30, 2005 and 2004, all 1,024,019 and 675,455 options outstanding to purchase common stock were anti-dilutive and are therefore not included in the calculation of earnings per common share. In addition, the 286,161 convertible operating partnership ("OP") units were anti-dilutive and are therefore not included in the calculation of diluted weighted average shares for those same periods. (3) Includes all hotels owned, leased, managed and franchised for greater than one year by WestCoast Hospitality Corporation. No adjustment has been made for hotels classified as discontinued operations. (4) Average occupancy represents total paid rooms divided by total available rooms. Total available rooms represents the number of rooms available multiplied by the number of days in the reported period. (5) Average daily rate ("ADR") represents total room revenues divided by the total number of paid rooms occupied by hotel guests. (6) Revenue per available room ("RevPAR") represents total room and related revenues divided by total available rooms. WestCoast Hospitality Corporation Consolidated Balance Sheets (unaudited) ($ in thousands, except share data) June 30, December 31, 2005 2004 Assets: Current assets: Cash and cash equivalents $7,756 $9,577 Restricted cash 3,468 4,092 Accounts receivable, net 9,093 8,464 Inventories 1,779 1,831 Prepaid expenses and other 5,806 3,286 Assets held for sale: Assets of discontinued operations 62,452 61,757 Other assets held for sale 1,599 1,599 Total current assets 91,953 90,606 Property and equipment, net 226,048 223,132 Goodwill 28,042 28,042 Intangible assets, net 13,248 13,641 Other assets, net 8,507 9,191 Total assets $367,798 $364,612 Liabilities: Current liabilities: Accounts payable $6,031 $4,841 Accrued payroll and related benefits 5,154 4,597 Accrued interest payable 671 700 Advance deposits 546 188 Other accrued expenses 11,499 7,322 Long-term debt, due within one year 7,181 7,455 Liabilities of discontinued operations 22,508 22,879 Total current liabilities 53,590 47,982 Long-term debt, due after one year 124,393 125,756 Deferred income 8,147 8,524 Deferred income taxes 16,592 15,992 Minority interest in partnerships 2,533 2,548 Debentures due WestCoast Hospitality Capital Trust 47,423 47,423 Total liabilities 252,678 248,225 Stockholders' equity: Preferred stock - 5,000,000 shares authorized; $0.01 par value; no shares issued or outstanding -- -- Common stock - 50,000,000 shares authorized; $0.01 par value; 13,106,670 and 13,064,626 shares issued and outstanding 131 131 Additional paid-in capital, common stock 84,590 84,467 Retained earnings 30,399 31,789 Total stockholders' equity 115,120 116,387 Total liabilities and stockholders' equity $367,798 $364,612 WestCoast Hospitality Corporation Consolidated Statement of Cash Flows (unaudited) ($ in thousands) Six months ended June 30, 2005 2004 Operating activities: Net loss $(1,390) $(1,543) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization 5,788 6,291 (Gain) on disposition of property, equipment and other assets (214) (396) Write-off of deferred loan fees 5 -- Deferred income tax provision 600 500 Minority interest in partnerships (15) (120) Equity in investments 30 (8) Compensation expense related to stock issuance 9 -- Provision for (recovery of) doubtful accounts 73 (2) Change in current assets and liabilities: Restricted cash 612 432 Accounts receivable (1,084) (1,423) Inventories 83 105 Prepaid expenses and other (2,788) (3,736) Accounts payable 1,134 (824) Accrued payroll and related benefits 559 664 Accrued interest payable (33) 19 Other accrued expenses and advance deposits 4,778 3,908 Net cash provided by operating activities 8,147 3,867 Investing activities: Purchases of property and equipment (8,276) (15,094) Proceeds from disposition of property and equipment 30 40 Proceeds from disposition of investment -- 94 Investment in WestCoast Hospitality Capital Trust -- (1,403) Advances to WestCoast Hospitality Capital Trust (20) (2,065) Distributions from equity investee 117 449 Proceeds from collections under note receivable 480 1,718 Other, net 92 (184) Net cash used in investing activities (7,577) (16,445) Financing activities: Proceeds from note payable to bank 50 11,000 Repayment of note payable to bank (50) (11,000) Proceeds from debenture issuance -- 47,423 Repurchase and retirement of preferred stock -- (29,412) Proceeds from long-term debt 3,835 83 Repayment of long-term debt (6,027) (2,189) Proceeds from issuance of common stock under employee stock purchase plan 67 50 Preferred stock dividend payments -- (1,011) Proceeds from option exercises 46 140 Additions to deferred financing costs (279) (47) Net cash provided by (used in) financing activities (2,358) 15,037 Net cash in discontinued operations (33) (231) Change in cash and cash equivalents: Net increase (decrease) in cash and cash equivalents (1,821) 2,228 Cash and cash equivalents at beginning of period 9,577 7,884 Cash and cash equivalents at end of period $7,756 $ 10,112 WestCoast Hospitality Corporation Additional Hotel Statistics (unaudited) System Hotels as of June 30, 2005 Meeting Space Hotels Rooms (sq. ft.) Owned or Leased Hotels:(1) Red Lion Hotels 38 6,637 312,528 WestCoast Hotels 3 692 40,500 Other Brands 1 153 3,945 42 7,482 356,973 Managed Hotels: Red Lion Hotels 1 150 5,234 WestCoast Hotels 1 72 1,800 Other Brands 1 254 36,000 3 476 43,034 Franchised Hotels: Red Lion Hotels 22 3,665 153,101 WestCoast Hotels 1 257 15,000 23 3,922 168,101 Total 68 11,880 568,108 Comparable Hotel Statistics(2) Three months ended Three months ended June 30, 2005 June 30, 2004 Average Average Occupancy(3) ADR(4) RevPAR(5)Occupancy(3)ADR(4) RevPAR(5) Owned or Leased Hotels: Continuing Operations 67.1% $74.32 $49.87 63.7% $71.37 $45.46 Discontinued Operations 53.9% 61.67 33.23 53.5% 59.61 31.88 64.1% 71.91 46.10 61.4% 69.05 42.38 Combined System Wide (6) 64.7% $73.68 $47.64 61.8% $71.06 $43.90 Red Lion Hotels (Owned, Leased, Managed and Franchised) (7) 65.5% $72.51 $47.46 62.3% $69.88 $43.54 Six months ended Six months ended June 30, 2005 June 30, 2004 Average Average Occupancy(3) ADR(4) RevPAR(5)Occupancy(3)ADR(4) RevPAR(5) Owned or Leased Hotels: Continuing Operations 60.6% $71.22 $43.16 57.5% $69.81 $40.14 Discontinued Operations 45.7% 59.57 27.23 45.9% 57.19 26.23 57.2% 69.11 39.55 54.9% 67.42 36.99 Combined System Wide (6) 58.4% $71.37 $41.70 56.2% $70.00 $39.36 Red Lion Hotels (Owned, Leased, Managed and Franchised) (7) 59.4% $70.14 $41.67 57.0% $69.00 $39.30 (1) Statistics include 11 hotels previously identified as discontinued business units, aggregating 1,694 rooms and 57,645 square feet of meeting space. (2) Includes all hotels owned, leased, managed and franchised for greater than one year by WestCoast Hospitality Corporation. (3) Average occupancy represents total paid rooms divided by total available rooms. Total available rooms represents the number of rooms available multiplied by the number of days in the reported period. (4) Average daily rate ("ADR") represents total room revenues divided by the total number of paid rooms occupied by hotel guests. (5) Revenue per available room ("RevPAR") represents total room and related revenues divided by total available rooms. (6) Includes all hotels owned, leased, managed and franchised for greater than one year by WestCoast Hospitality Corporation. No adjustment has been made for hotels classified as discontinued operations. (7) Includes all hotels owned, leased, managed and franchised for greater than one year operated under the Red Lion brand name. No adjustment has been made for hotels classified as discontinued operations. WestCoast Hospitality Corporation Reconciliation of EBITDA to Net Income (unaudited) ($ in thousands) The following is a reconciliation of EBITDA and EBITDA from continuing operations to net income (loss) for the periods presented: Three months ended Six months ended June 30, June 30, 2005 2004 2005 2004 EBITDA from continuing operations $7,540 $6,806 $9,285 $9,233 Income tax (expense) benefit - continuing operations (279) (135) 1,416 960 Interest expense - continuing operations (3,598) (3,657) (7,199) (6,503) Depreciation and amortization - continuing operations (2,881) (2,600) (5,720) (5,076) Net income (loss) from continuing operations 782 414 (2,218) (1,386) Income (loss) on discontinued operations 951 391 828 (157) Net income (loss) $1,733 $805 $(1,390) $(1,543) EBITDA $9,479 $8,449 $11,391 $11,073 Income tax (expense) benefit (856) (346) 960 1,045 Interest expense (3,975) (4,083) (7,953) (7,370) Depreciation and amortization (2,915) (3,215) (5,788) (6,291) Net income (loss) $1,733 $805 $(1,390) $(1,543) NON-GAAP FINANCIAL MEASURES EBITDA is defined as net income (or loss), before interest, taxes, depreciation and amortization. EBITDA is considered a non-GAAP financial measurement. We believe it is a useful financial performance measure for us and for our shareholders and is a complement to net income and other financial performance measures provided in accordance with generally accepted accounting principles in the United States ("GAAP"). EBITDA from continuing operations is calculated in the same manner, but excludes the operating results of business units identified as discontinued under GAAP. We use EBITDA to measure the financial performance of our owned and leased hotels because it excludes interest, taxes, depreciation and amortization, which bear little or no relationship to operating performance. By excluding interest expense, EBITDA measures our financial performance irrespective of our capital structure or how we finance our properties and operations. We generally pay federal and state income taxes on a consolidated basis, taking into account how the applicable taxing laws apply to our company in the aggregate. By excluding taxes on income, we believe EBITDA provides a basis for measuring the financial performance of our operations excluding factors that our hotels and other operations cannot control. By excluding depreciation and amortization expense, which can vary from hotel to hotel based on historical cost and other factors unrelated to the hotels' financial performance, EBITDA measures the financial performance of our hotels without regard to their historical cost. For all of these reasons, we believe that EBITDA provides us and investors with information that is relevant and useful in evaluating our business. However, because EBITDA excludes depreciation and amortization, it does not measure the capital we require to maintain or preserve our long-lived assets. In addition, because EBITDA does not reflect interest expense, it does not take into account the total amount of interest we pay on outstanding debt nor does it show trends in interest costs due to changes in our borrowings or changes in interest rates. EBITDA, as defined by us, may not be comparable to EBITDA as reported by other companies that do not define EBITDA exactly as we define the term. Because we use EBITDA to evaluate our financial performance, we reconcile all EBITDA measures to net income, which is the most comparable financial measure calculated and presented in accordance with GAAP. EBITDA does not represent cash generated from operating activities determined in accordance with GAAP, and should not be considered as an alternative to operating income or net income determined in accordance with GAAP as an indicator of performance or as an alternative to cash flows from operating activities as an indicator of liquidity. DATASOURCE: WestCoast Hospitality Corporation CONTACT: Anupam Narayan, Executive Vice President, Chief Financial Officer of WestCoast Hospitality Corporation, +1-509-459-6100, or Web site: http://www.westcoasthotels.com/ Web site: http://www.wchc.com/ Web site: http://www.redlion.com/ Web site: http://www.ticketswest.com/ Web site: http://www.g-b.com/

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