8-K 1 y88931e8vk.txt FORM 8-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): August 5, 2003 INTERSTATE HOTELS & RESORTS, INC. (Exact name of registrant as specified in its charter) Delaware 1-14331 52-2101815 (State of Incorporation) (Commission File No.) (IRS Employer Identification No.) 4501 N. Fairfax Drive 22203 Arlington, VA (Zip Code) (Address of Principal Executive Offices) Registrant's telephone number, including area code: 703-387-3100 1010 Wisconsin Avenue, N.W. Washington, D.C. 20007 (202) 965-4455 (Former name or former address, if changed since last report) Item 5. Other Events On August 5, 2003, Interstate Hotels & Resorts filed a Registration Statement on Form S-3. This Registration Statement incorporates by reference our Annual Report on Form 10-K, filed on March 27, 2003, as amended on March 31, 2003 and April 2, 2003. Included in our Form 10-K are references to earnings before interest, taxes, depreciation and amortization, or "EBITDA", which is a non-GAAP financial measure. In accordance with Regulation G, as adopted by the Securities and Exchange Commission, we are required to provide a reconciliation from net income (loss) to EBITDA for the periods presented. See the table below for the reconciliation. We use EBITDA as a performance measure of our financial condition and results of operations because it provides a basis to evaluate our ability to incur and service debt, fund capital expenditures and expand our business. In addition, since depreciation and amortization are non-cash items and a significant portion of our assets, including our management agreements, are intangible assets which are amortized over their projected life, EBITDA represents a basis for evaluating our current operating performance. We also use EBITDA as one measure in determining the value of other acquisitions and dispositions. This financial measure, however, should be considered in addition to, not as a substitute for or as being superior to, operating losses, cash flows, or other measures of financial performance prepared in accordance with U.S. generally accepted accounting principles ("GAAP"). The table below reconciles net income (loss) to EBITDA for the three years ended December 31, 2002, by reportable operating segment. Prior to our merger on July 31, 2002, we operated in two reportable segments: (1) operations of luxury and upscale hotels and (2) operations of mid-scale, upper economy and budget hotels. Following the merger, we operate in the segments shown in the table below. For periods prior to the merger, we have combined our two previously reportable operating segments into the hotel management operating segment.
Hotel Corporate Financial Management Housing Other Statements ================ ============== ============== ================ Year ended December 31, 2002: Net Loss $ (945) $ (1,155) $ (34,071) $ (36,171) Add back: Depreciation and amortization 13,382 676 - 14,058 Interest expense 5,642 (47) - 5,595 Equity in loss of affiliates 2,409 - - 2,409 Conversion incentive payment - convertible notes - - 7,307 7,307 Minority Interest expense (197) - - (197) Tax expense (1,133) - - (1,133) ---------------- -------------- -------------- ---------------- EBITDA $ 19,158 $ (526) $ (26,764) $ (8,132) ================ ============== ============== ================
Hotel Corporate Financial Management Housing Other Statements ================ ============== ============== ================ Year ended December 31, 2001: $ (4,324) $ - $ (3,026) $ (7,350) Net Loss Add back: Depreciation and amortization 10,394 - - 10,394 Interest expense 1,635 - - 1,635 Equity in loss of affiliates 5,169 - - 5,169 Minority Interest expense 194 - - 194 Tax expense (3,295) - - (3,295) ---------------- -------------- -------------- ---------------- EBITDA $ 9,773 $ - $ (3,026) $ 6,747 ================ ============== ============== ================ Year ended December 31, 2000: Net Loss $ 5,743 $ - $ (14,646) $ (8,903) Add back: Depreciation and amortization 16,091 - - 16,091 Interest expense (1,801) - - (1,801) Equity in loss of affiliates 522 - - 522 Minority Interest expense (10,719) - - (10,719) Tax expense (5,935) - - (5,935) ---------------- -------------- -------------- ---------------- EBITDA $ 3,901 $ - $ (14,646) $ (10,745) ================ ============== ============== ================
The "Other" column in the table above represents operating segment activity for the non-reportable segments, including merger costs, restructuring costs, tender offer costs, asset impairments and write-offs, and joint venture start-up costs. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Date: August 5, 2003 By: /s/ Christopher L. Bennett -------------------------------- Name: Christopher L. Bennett Title: Senior Vice President and General Counsel