-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, MxRiurau2ZSZIz88IJA9lkLfaFu4f9rpSWJGlCTVhxwOQRY+HnxjFd+8dLbt9mWN McXRYI++jufXVzfZYNwEbg== 0000912057-01-006482.txt : 20010226 0000912057-01-006482.hdr.sgml : 20010226 ACCESSION NUMBER: 0000912057-01-006482 CONFORMED SUBMISSION TYPE: DEFA14A PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 20010223 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MERISTAR HOTELS & RESORTS INC CENTRAL INDEX KEY: 0001059341 STANDARD INDUSTRIAL CLASSIFICATION: HOTELS & MOTELS [7011] IRS NUMBER: 510379982 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: DEFA14A SEC ACT: SEC FILE NUMBER: 001-14331 FILM NUMBER: 1552537 BUSINESS ADDRESS: STREET 1: 1010 WISCONSIN AVE NW CITY: WASHINGTON STATE: DC ZIP: 20007 BUSINESS PHONE: 2029654455 MAIL ADDRESS: STREET 1: 1010 WISCONSIN AVE N W CITY: WASHINGTON STATE: DC ZIP: 20007 DEFA14A 1 a2034828zdefa14a.txt DEFA14A SCHEDULE 14A (RULE 14A-101) SCHEDULE 14A INFORMATION Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 (Amendment No. ) Filed by the Registrant /X/ Filed by a Party other than the Registrant / / Check the appropriate box: / / Preliminary Proxy Statement / / Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) / / Definitive Proxy Statement / / Definitive Additional Materials /X/ Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12 MERISTAR HOTELS & RESORTS, INC. ------------------------------------------------------------ (Name of Registrant as Specified In Its Charter) n/a ------------------------------------------------------------ (Name of Person(s) Filing Proxy Statement, if other than the Registrant) Payment of Filing Fee (Check the appropriate box): /X/ No fee required. / / Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. (1) Title of each class of securities to which transaction applies: ---------------------------------------------------------- (2) Aggregate number of securities to which transaction applies: ---------------------------------------------------------- (3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): ---------------------------------------------------------- (4) Proposed maximum aggregate value of transaction: ---------------------------------------------------------- (5) Total fee paid: ---------------------------------------------------------- / / Fee paid previously with preliminary materials. / / Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. (1) Amount Previously Paid: ---------------------------------------------------------- (2) Form, Schedule or Registration Statement No.: ---------------------------------------------------------- (3) Filing Party: ---------------------------------------------------------- (4) Date Filed: ---------------------------------------------------------- Page 1 MeriStar Hotels & Resorts, Inc., a Delaware corporation ("MeriStar"), American Skiing Company, a Delaware corporation ("American Skiing ") and ASC Merger Sub, Inc., a Delaware corporation ("Merger Sub"), entered into an Agreement and Plan of Merger, dated as of December 8, 2000 (the " Merger Agreement"). MeriStar, American Skiing and Merger Sub entered into an Amendment to Merger Agreement dated February 21, 2001 (the "Amendment"). Among other things, the Amendment changes the consideration to received by MeriStar common stock holders in connection with the merger. Each share of MeriStar's common stock will now be exchanged for the right to receive 1.75 shares of American Skiing common stock. The Amendment is attached to MeriStar's current report on Form 8-K to be filed with the Securities and Exchange Commission. In connection with the Amendment, MeriStar has issued the press release attached hereto as Exhibit 99.1. On February 22, 2001, Meristar also announced its fourth-quarter and year-end results in a press release. That press release is attached hereto as Exhibit 99.2. American Skiing Company filed a Registration Statement on Form S-4 on January 8, 2001, (file no. 333-53406) with the SEC in connection with the merger transaction. The Form S-4, once it has been declared effective by the SEC, will contain a final prospectus and proxy statement for the special meetings of both American Skiing and MeriStar Hotels & Resorts, Inc. and other documents. American Skiing and MeriStar plan to mail the final joint proxy statement and prospectus contained in the Form S-4 to their stockholders. The Form S-4 and final joint proxy statement and prospectus will contain important information about American Skiing, MeriStar, the merger and related matters. Investors and stockholders should read the final joint proxy statement and prospectus and the other documents filed with the SEC in connection with the merger carefully before they make any decision with respect to the merger. A copy of the merger agreement with respect to the merger was filed by both American Skiing and MeriStar as an exhibit to each company's respective Form 8-K dated December 11, 2000. The Form S-4, the final joint proxy statement and prospectus, the Form 8-Ks and all other documents filed with the SEC in connection with the merger transaction are available and free of charge at the SEC's web site, at www.sec.gov. In addition, the final joint proxy statement and prospectus, the Form 8-K and all other documents filed with the SEC in connection with the merger will be made available to investors free of charge by calling or writing to the contact address listed below. Melissa Thompson Director, Corporate Communications MeriStar Hotels & Resorts (202) 295-2228 In addition to the Form S-4, the final joint proxy statement and prospectus and the other documents filed with the SEC in connection with the merger, both American Skiing and MeriStar are obligated to file annual, quarterly and special reports, proxy statements and other information with the SEC. You may read and copy any reports, statements Page 2 and other information filed with the SEC at the SEC's public reference rooms at 450 Fifth Street, N.W., Washington, D.C. 20549 or at the other public reference rooms in New York, New York and Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for further information on public reference rooms. Filings with the SEC also are available to the public from commercial document-retrieval services and at the web site maintained by the SEC at www.sec.gov. MeriStar Hotels & Resorts, Inc. will be, and certain other persons named below may be, soliciting proxies from MeriStar's stockholders in favor of the transaction. Some of the directors and executive officers of MeriStar and some of the directors and executive officers of American Skiing may be deemed to be participants in MeriStar's solicitation of proxies. The participants in the solicitation include the following directors and officers of MeriStar:
NAME TITLE - ---- ----- Daniel R. Doctoroff (2).................. Director Kent R. Hance (2)........................ Director Steven D. Jorns.......................... Director S. Kirk Kinsell (1)...................... Director David E. McCaslin........................ Director and President James B. McCurry (1)(2).................. Director Paul W. Whetsell......................... Chairman and Chief Executive Officer James R. Worms (1)....................... Director James A. Calder.......................... Chief Financial Officer John Emery............................... Chief Operating Officer Louis Schaab............................. Senior Vice President, Finance John E. Plunket.......................... Executive Vice President, Finance and Development Christopher L. Bennett................... Vice President, Legal and Secretary Bruce Riggins............................ Director of Finance Melissa Thompson......................... Director of Corporate Communications
- ---------- (1) Member of the Audit Committee (2) Member of the Compensation Committee In addition, Daly Gray Public Relations is participating in the solicitation. Exhibits: Exhibit 99.1 Press release regarding the amendment to the merger agreement with American Skiing, dated February 22, 2001. Exhibit 99.2 Press release regarding fourth-quarter and year-end results, dated February 22, 2001. Page 3 EX-99.1 2 a2039839zex-99_1.txt EXHIBIT 99.1 EXHIBIT 99.1 FOR IMMEDIATE RELEASE MeriStar Contacts: American Skiing Company Contact: Melissa Thompson Skip King Director, Corporate Communications Vice President, Communications (202) 295-2228 (207) 824-5020 Jerry Daly or Carol McCune Daly Gray Public Relations (703) 435-6293 MERISTAR HOTELS & RESORTS AND AMERICAN SKIING REVISE SHARE EXCHANGE RATIO WASHINGTON, D.C./NEWRY, Maine, February 22, 2001--MeriStar Hotels & Resorts (NYSE: MMH), the nation's largest independent hotel management company, and American Skiing Company (NYSE: SKI), the nation's largest ski resort operating company, today announced that they have revised the share exchange ratio of their previously announced merger agreement. Under terms of an agreement announced in December 2000, MeriStar Hotels & Resorts will merge into American Skiing Company in a tax-free, stock-for-stock merger, and American Skiing Company will be renamed Doral International. According to the original merger terms, each share of MeriStar stock would have been exchanged for 1.88 shares of Doral International. Under the revised exchange ratio, each share of MeriStar stock will be exchanged for 1.75 shares of Doral International. American Skiing shares will remain outstanding and American Skiing will change its name to Doral International. "The change in the exchange ratio is the result of lower leakage from our leased hotels in the fourth quarter of 2000 and our expectation that management fees for the next several periods - more - MeriStar Hotels & Resorts Page 2 will be lower than we previously anticipated," said Paul Whetsell, chairman and chief executive officer of MeriStar. "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. "With the conversion of the majority of our leases to management contracts, we enter 2001 with a more stable, predictable earnings stream with excellent growth potential. The management fees under the new management contracts approximate the leakage that would have been earned under the previous lease agreements and carry a more clear alignment of interest. 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 2.75-3.25 percent to 2.5-3.0 percent." Leslie B. Otten, chairman of American Skiing, commented, "The formation of Doral International creates a new leader in the year-round leisure business. The new company will have more diversified and less seasonal cash flow than its predecessors and a capital structure to support growth. We are on track to complete the merger transaction by the end of March 2001." The proxy statement for both companies' shareholders is expected to be mailed on or about February 26. The shareholders meeting will be held in late March 2001 with the merger expected to close by March 31, 2001. 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, - more - MeriStar Hotels & Resorts Page 3 including 54 properties managed by Flagstone Hospitality Management, a subsidiary of MeriStar 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. Headquartered in Newry, Maine, American Skiing Company, founded by Leslie B. Otten, is the largest operator of alpine ski, snowboard and golf resorts in the United States. Its resorts include Steamboat in Colorado; Killington, Mount Snow and Sugarbush in Vermont; Sunday River and Sugarloaf/USA in Maine; Attitash Bear Peak in New Hampshire; The Canyons in Utah; and Heavenly in California/Nevada. Additional information is available on the company's Web site, www.peaks.com AMERICAN SKIING COMPANY FILED A REGISTRATION STATEMENT ON FORM S-4 ON JANUARY 8, 2001, (FILE NO. 333-53406) WITH THE SEC IN CONNECTION WITH THE MERGER TRANSACTION. THE FORM S-4, ONCE IT HAS BEEN DECLARED EFFECTIVE BY THE SEC, WILL CONTAIN A FINAL PROSPECTUS AND PROXY STATEMENT FOR THE SPECIAL MEETINGS OF BOTH AMERICAN SKIING AND MERISTAR HOTELS & RESORTS, INC. AND OTHER DOCUMENTS. AMERICAN SKIING AND MERISTAR PLAN TO MAIL THE FINAL JOINT PROXY STATEMENT AND PROSPECTUS CONTAINED IN THE FORM S-4 TO THEIR STOCKHOLDERS. THE FORM S-4 AND FINAL JOINT PROXY STATEMENT AND PROSPECTUS WILL CONTAIN IMPORTANT INFORMATION ABOUT AMERICAN SKIING, MERISTAR, THE MERGER AND RELATED MATTERS. INVESTORS AND STOCKHOLDERS SHOULD READ THE FINAL JOINT PROXY STATEMENT AND PROSPECTUS AND THE OTHER DOCUMENTS FILED WITH THE SEC IN CONNECTION WITH THE MERGER CAREFULLY BEFORE THEY MAKE ANY DECISION WITH RESPECT TO THE MERGER. A COPY OF THE MERGER AGREEMENT WITH RESPECT TO THE MERGER WAS FILED BY BOTH AMERICAN SKIING AND MERISTAR AS AN EXHIBIT TO EACH COMPANY'S RESPECTIVE FORM 8-K DATED DECEMBER 11, 2000. A COPY OF THE AMENDMENT TO THE MERGER AGREEMENT WILL BE FILED BY BOTH AMERICAN SKIING AND MERISTAR AS AN EXHIBIT TO EACH COMPANY'S RESPECTIVE FORM 8-K DATED FEBRUARY 22, 2001. THE FORM S-4, THE FINAL JOINT PROXY STATEMENT AND PROSPECTUS, THE FORM 8-KS AND ALL OTHER DOCUMENTS FILED WITH THE SEC IN CONNECTION WITH THE MERGER TRANSACTION ARE AVAILABLE AND FREE OF CHARGE AT THE SEC'S WEB SITE, AT WWW.SEC.GOV. IN ADDITION, THE FINAL JOINT PROXY STATEMENT AND PROSPECTUS, THE FORM 8-K - more - MeriStar Hotels & Resorts Page 4 AND ALL OTHER DOCUMENTS FILED WITH THE SEC IN CONNECTION WITH THE MERGER WILL BE MADE AVAILABLE TO INVESTORS FREE OF CHARGE BY CALLING OR WRITING TO THE AMERICAN SKIING AND MERISTAR CONTACT ADDRESSES LISTED ABOVE. IN ADDITION TO THE FORM S-4, THE FINAL JOINT PROXY STATEMENT AND PROSPECTUS AND THE OTHER DOCUMENTS FILED WITH THE SEC IN CONNECTION WITH THE MERGER, BOTH AMERICAN SKIING AND MERISTAR ARE OBLIGATED TO FILE ANNUAL, QUARTERLY AND SPECIAL REPORTS, PROXY STATEMENTS AND OTHER INFORMATION WITH THE SEC. YOU MAY READ AND COPY ANY REPORTS, STATEMENTS AND OTHER INFORMATION FILED WITH THE SEC AT THE SEC'S PUBLIC REFERENCE ROOMS AT 450 FIFTH STREET, N.W., WASHINGTON, D.C. 20549 OR AT THE OTHER PUBLIC REFERENCE ROOMS IN NEW YORK, NEW YORK AND CHICAGO, ILLINOIS. PLEASE CALL THE SEC AT 1-800-SEC-0330 FOR FURTHER INFORMATION ON PUBLIC REFERENCE ROOMS. FILINGS WITH THE SEC ALSO ARE AVAILABLE TO THE PUBLIC FROM COMMERCIAL DOCUMENT-RETRIEVAL SERVICES AND AT THE WEB SITE MAINTAINED BY THE SEC AT WWW.SEC.GOV. THE IDENTITY OF THE PEOPLE WHO, UNDER SEC RULES, MAY BE CONSIDERED "PARTICIPANTS IN THE SOLICITATION" OF MERISTAR'S STOCKHOLDERS IN CONNECTION WITH THE PROPOSED MERGER, AND A DESCRIPTION OF THEIR INTERESTS, IS AVAILABLE IN AN SEC FILING ON SCHEDULE 14A, WHICH WILL BE MADE BY MERISTAR. A LIST OF "PARTICIPANTS IN THE SOLICITATION" OF AMERICAN SKIING'S STOCKHOLDERS IN CONNECTION WITH THE PROPOSED MERGER, AND A DESCRIPTION OF THEIR INTERESTS, IS AVAILABLE IN AN SEC FILING ON SCHEDULE 14A, WHICH WILL BE MADE BY AMERICAN SKIING. 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 THE COMPANIES TO COMPLETE THE MERGER, THE ABILITY OF THE COMPANY 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. THE FORWARD-LOOKING STATEMENTS ABOUT AMERICAN SKIING COMPANY CONTAINED IN THIS PRESS RELEASE ARE NOT BASED ON HISTORICAL FACTS, BUT RATHER REFLECT AMERICAN SKIING COMPANY'S CURRENT EXPECTATIONS CONCERNING FUTURE RESULTS AND EVENTS. SIMILARLY, STATEMENTS THAT DESCRIBE THE COMPANY'S OBJECTIVES, PLANS OR GOALS ARE OR MAY BE FORWARD-LOOKING STATEMENTS. SUCH FORWARD-LOOKING STATEMENTS INVOLVE A NUMBER OF RISKS AND UNCERTAINTIES. IN ADDITION TO FACTORS DISCUSSED ABOVE, OTHER FACTORS THAT COULD CAUSE ACTUAL RESULTS, PERFORMANCES OR ACHIEVEMENTS TO DIFFER MATERIALLY FROM THOSE PROJECTED INCLUDE, BUT ARE NOT LIMITED TO, THE FOLLOWING: CHANGES IN REGIONAL AND NATIONAL BUSINESS AND ECONOMIC CONDITIONS AFFECTING BOTH AMERICAN SKIING COMPANY'S RESORT OPERATING AND REAL ESTATE SEGMENTS; COMPETITION AND PRICING PRESSURES; FAILURE TO EFFECTIVELY INTEGRATE OR OPERATE RECENTLY ACQUIRED COMPANIES AND ASSETS; FAILURE TO RENEW OR REFINANCE EXISTING FINANCIAL LIABILITIES AND OBLIGATIONS OR ATTAIN NEW OUTSIDE FINANCING; FAILURE OF ON-MOUNTAIN IMPROVEMENTS AND OTHER CAPITAL EXPENDITURES TO GENERATE INCREMENTAL REVENUE; ADVERSE WEATHER CONDITIONS REGIONALLY AND NATIONALLY; SEASONAL BUSINESS ACTIVITY; CHANGES TO - more - MeriStar Hotels & Resorts Page 5 FEDERAL, STATE AND LOCAL LAND USE REGULATIONS; CHANGES TO FEDERAL, STATE AND LOCAL REGULATIONS AFFECTING BOTH AMERICAN SKIING COMPANY'S RESORT OPERATING AND REAL ESTATE SEGMENTS; LITIGATION INVOLVING ANTI-TRUST, CONSUMER AND OTHER ISSUES; FAILURE TO RENEW LAND LEASES AND FOREST SERVICE PERMITS; DISRUPTIONS IN WATER SUPPLY THAT WOULD IMPACT SNOWMAKING OPERATIONS AND IMPACT OPERATIONS; THE LOSS OF ANY OF OUR EXECUTIVE OFFICERS OR KEY OPERATING PERSONNEL; CONTROL OF AMERICAN SKIING COMPANY BY PRINCIPAL STOCKHOLDERS; FAILURE TO HIRE AND RETAIN QUALIFIED EMPLOYEES AND OTHER FACTORS LISTED FROM TIME-TO-TIME IN AMERICAN SKIING COMPANY'S DOCUMENTS FILED BY THE COMPANY WITH THE SECURITIES EXCHANGE COMMISSION. THE FORWARD-LOOKING STATEMENTS INCLUDED IN THIS DOCUMENT ARE MADE ONLY AS OF THE DATE OF THIS DOCUMENT AND UNDER SECTION 27A OF THE SECURITIES ACT AND SECTION 21E OF THE EXCHANGE ACT, WE DO NOT HAVE ANY OBLIGATION TO PUBLICLY UPDATE ANY FORWARD-LOOKING STATEMENTS TO REFLECT SUBSEQUENT EVENTS OR CIRCUMSTANCES. - 30 - EX-99.2 3 a2039839zex-99_2.txt EXHIBIT 99.2 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. - more - MeriStar Hotels & Resorts Page 2 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 - more - MeriStar Hotels & Resorts Page 3 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 - more - MeriStar Hotels & Resorts Page 4 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. - 30 - 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 ----------- ----------- ----------- ----------- 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 =========== =========== =========== =========== 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) -- ----------- ----------- ----------- ----------- Net income per diluted common share excluding non-recurring items $ (0.11) $ 0.01 $ 0.13 $ 0.24 =========== =========== =========== =========== (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
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