John Q. Hammons 1Q Profit Rises 60 Percent

John Q. Hammons Hotels, Inc. (AMEX:JQH) today reported results for the 2005 first quarter.
First Quarter Results

Total revenues from continuing operations for the three months ended April 1, 2005 were $111.4 million, an increase of 1.9% compared to the three months ended April 2, 2004. We produced EBITDA from continuing operations for the 2005 quarter of $32.1 million, down slightly compared to $32.3 million in the 2004 quarter. (See attached table for reconciliation of income from continuing operations to EBITDA from continuing operations and for our definition of EBITDA from continuing operations).

Basic earnings per share for the three months ended April 1, 2005 were $1.28, compared to $0.85 for the three months ended April 2, 2004. Diluted earnings per share for the 2005 quarter were $1.03, compared to $0.74 for the 2004 quarter. Discontinued operations relating to the sale of the Holiday Inn Emeryville, California had a positive effect on basic and diluted earnings per share of $0.50 and $0.40, respectively, for the 2005 quarter, virtually all of which is attributable to the gain on sale of this hotel (a gain on sale of $11.2 million, of which $2.8 million is allocable to us, net of minority interest). Discontinued operations had a positive effect of $0.01 in the 2004 quarter.

Net income for the 2005 first quarter was $7.0 million, compared to $4.3 million for the 2004 quarter. Income from continuing operations for the 2005 quarter was $4.2 million, compared to $4.3 million in the 2004 quarter. The 2005 quarter's income from continuing operations was positively impacted by $3.1 million of the limited partners' earnings we recaptured in the quarter. This was due to the limited partners' losses we absorbed in previous quarters, as a result of the inability of their net contribution to fall below zero. The 2004 quarter was positively impacted by $3.3 million, for the same reason mentioned above.

The following represents a reconciliation of the income from continuing operations, as reported, to income from continuing operations, as adjusted (in thousands):

                                              Three Months Ended

                                        April 1, 2005  April 2, 2004

                                        ------------- ----------------



Income from continuing operations, as

 reported                                     $4,235           $4,270



Subtractions:

 Reallocation of minority interest

  earnings                                    (3,140)          (3,262)

                                        ------------- ----------------



Income from continuing operations, as

 adjusted                                     $1,095           $1,008

                                        ============= ================

Revenue Per Available Room (RevPAR) from continuing operations was $69.41 for the 2005 quarter, up 2.3% from the prior year's level of $67.84. Occupancy from continuing operations for the 2005 quarter was 64.5%, down from 67.1% in the prior year, while our Average Daily Rate (ADR) from continuing operations was up 6.5% to $107.65.

Financing and Investing Activities

Since the beginning of 2004, we have reduced total debt by over $35.4 million, including scheduled principal amortization. We utilized the proceeds from the sale of our disposition properties to retire a 9 1/2% mortgage on the World Golf Village Renaissance Resort property. Our current portion of long-term debt ($7.2 million) is attributable to scheduled principal amortization on various individual hotel mortgages.

Operations Outlook

We expect the industry to continue its recovery during 2005, generating RevPAR and EBITDA above our 2004 levels. This recovery should continue to enhance our cash generation and produce favorable results as we focus on operational efficiencies into 2005.

Although we are not developing new hotels, Mr. Hammons personally has numerous projects in various stages of development, which we will manage upon completion, including properties in St. Charles, Missouri and Hampton, Virginia. Mr. Hammons opened properties in Springfield, Missouri in March and Frisco, Texas and Albuquerque, New Mexico in April.

John Q. Hammons Hotels, Inc. is a leading independent owner and manager of affordable upscale, full service hotels located primarily in key secondary markets. We own 44 hotels located in 20 states, containing 10,853 guest rooms or suites, and manage 17 additional hotels located in nine states, containing 3,873 guest rooms or suites. The majority of these 61 hotels operate under the Embassy Suites, Holiday Inn and Marriott trade names. Most of our hotels are located near a state capitol, university, convention center, corporate headquarters, office park or other stable demand generator.


Logos, product and company names mentioned are the property of their respective owners.

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