Company Results

Red Lion Hotels Reports Fourth Quarter and Full Year 2013 Results

Increased fourth quarter RevPAR for comparable owned and leased hotels by 2.8 percent compared to the prior year - Increased full year RevPAR for comparable owned and leased hotels by 3.1 percent driven by a 3.9 percent increase in ADR

Red Lion

Red Lion Hotels Corporation (NYSE:RLH) yesterday announced its results for the fourth quarter and year ended December 31, 2013.

Highlights:

  • Increased fourth quarter RevPAR for comparable owned and leased hotels by 2.8 percent compared to the prior year
  • Increased full year RevPAR for comparable owned and leased hotels by 3.1 percent driven by a 3.9 percent increase in ADR
  • Named 25-year hospitality veteran Greg T. Mount as new President and Chief Executive Officer
  • Added global brand positioning and e-commerce talent to executive leadership with appointment of Bill Linehan as Chief Marketing Officer
  • Promoted Harry G. Sladich to Executive Vice President of Hotel Operations and Sales to optimize synergies
  • Added 11 franchised hotels bringing total to 30
  • Signed franchise agreement in January for a hotel in Tucson, Arizona

Comparable operating results and data from continuing operations (as disclosed in the table by the same title) for the periods included in this release exclude from hotel operations the results of the hotels or operations that have been sold in the past four quarters. Throughout this release the company refers to certain non-GAAP financial measures. Please refer to the tables attached to this release for a reconciliation of these non-GAAP financial measures to their most directly comparable financial measure determined in accordance with GAAP.

"Red Lion is a great brand that evokes positive sentiment from guests because of its strong Northwest heritage and friendly service culture," said President and Chief Executive OfficerGreg T. Mount. "Entering 2014, we have significant momentum. With our evolving operating support programs and eCommerce platforms, our goal is to carve out a niche for the Red Lion brand as we focus on growth through franchising and development. Hotel owners across the country are seeking alternatives to the more heavily concentrated and commoditized brands, giving Red Lion opportunities to expand in major MSAs (metropolitan statistical area) and gateway cities. We want to be nimble with a value proposition that's appealing to those owners."

Mount continued, "We are building a company structure that is responsive to guests, owners and investors. We have added branding and eCommerce talent with the appointment of industry expert Bill Linehan, and further aligned our executive leadership team with the promotion of Harry Sladich to oversee hotel operations, national sales and the companywide Local.Wise. initiative. Together with the rest of our talented team, we are focused on increasing the velocity at which we are moving to grow the brand, further improve our operating performance and deliver value to our stakeholders."

Fourth Quarter 2013 Results

Comparable revenue from owned and leased hotels of $22.1 million increased $0.5 million or 2.5 percent compared to the same period a year ago, driven primarily by an increase in comparable rooms revenue. Year over year, comparable fourth quarter RevPAR increased 2.8 percent to $45.78 driven by a 170 basis point increase in occupancy, which was partially offset by a slight decrease in ADR to $82.28. Comparable hotel direct operating margin declined from 10.4 percent to 9.4 percent. Fourth quarter 2013 margin was impacted by higher utility costs due to colder weather in some of our markets, as well as an increase in property insurance costs.

Franchise revenue increased to $1.6 million from $1.2 million, led by the increase in the number of franchised hotels in the system and contractual increases in room rate on existing franchised hotels. Net segment profits increased $0.2 million over prior year.

Entertainment revenue of $2.7 million was down slightly from the prior year, primarily due to a change in the mix of shows produced in the year.

On a comparable basis, total company EBITDA from continuing operations before special items for the fourth quarter decreased $0.2 million, compared to the prior year period. The decrease was primarily driven by CEO transition costs.

The loss from continuing operations in the fourth quarter of 2013 was $5.3 million compared to a loss of $3.6 million in the same period a year ago. During the fourth quarter of 2013 the company recorded income tax expense related to continuing operations of $0.7 million compared to an income tax benefit related to continuing operations of $2.1 million in the fourth quarter of 2012. The primary driver of the year over year difference in income tax expense is the recording of a valuation allowance against the company's net deferred tax assets to reduce them to an amount that is more likely than not to be realized.

Full Year Ended December 31, 2013 Results

Comparable revenue from owned and leased hotels of $102.8 million increased $2.1 million, or 2.1 percent compared to prior year. Comparable RevPAR increased 3.1 percent driven by a 3.9 percent increase in ADR. Comparable hotel direct operating margin declined to 19.4 percent from 20.2 percent in the prior year primarily due to increased marketing expense to drive ADR growth as well as unfavorable comparisons due to labor cost adjustments that benefited the prior year.

Franchise revenue increased to $7.1 million from $5.2 million in 2012. Revenue and divisional profit improved year over year primarily due to the addition of franchises and contractual rate increases for existing franchises.

Entertainment revenue of $9.4 million increased $0.3 million from the prior year primarily driven by an increase in ticketing revenue from higher demand for entertainment events in the company's markets. Profitability of the segment increased by $0.1 million.

On a comparable basis, total company EBITDA from continuing operations before special items was $9.5 million for the full year ended December 31, 2013 compared to $10.8 million in the prior year. The $1.3 million decline was primarily driven by increased marketing expense and additional costs associated with the CEO transition.

The loss from continuing operations for 2013 was $8.7 million compared to $11.2 million in the prior year. The comparison of the two years is impacted by asset impairment charges and the timing of asset sales in the prior year and an income tax adjustment and lower interest expense in the current year. The income tax adjustment is the result of the recording of a valuation allowance against the company's net deferred tax assets to reduce them to an amount that is more likely than not to be realized. As a result of the recording of the valuation allowance, the effective tax rate on the loss from continuing operations for 2013 is 7.9% compared to 36.2% in 2012.

Franchise Update

In 2013, the company added 11 franchised hotels; nine with owners of new locations and two with the buyers of the company's previously owned properties:

-- Red Lion Hotels

  • Pendleton, Oregon, formerly owned, converted in April 2013
  • Ontario Airport, California, converted in October 2013

-- Red Lion Inn & Suites

  • Denver Airport, Colorado, converted in January 2013
  • Kent, Washington, converted in February 2013
  • Missoula, Montana, formerly owned, converted in February 2013
  • Kennewick, Washington, converted in April 2013
  • Tempe, Arizona, converted in May 2013
  • Walla Walla, Washington, converted in October 2013
  • Perris, California, converted in November 2013

-- Leo Hotel Collection

  • The LVH - Las Vegas Hotel & Casino, Nevada, converted in March 2013
  • The Riverside Hotel - Boise, Idaho, converted in July 2013

In January 2014, the company announced it signed a franchise agreement for an Inn & Suites in Tucson, Arizona.

Discontinued Operations

In the fourth quarter of 2013, the company listed for sale six owned hotel properties and classified them as discontinued operations. The six properties are located in Twin Falls andPocatello, Idaho, and in Kennewick, Kelso, Wenatchee and Yakima, Washington. The listing for sale of these properties resulted in an aggregate non-cash pre-tax impairment charge of$7.8 million recognized in the fourth quarter. Also in the fourth quarter, the company agreed to assign a lease on its Eugene, Oregon property to a third party and agreed to cease operating the hotel effective January 31, 2014. That hotel has also been classified as a discontinued operation. This lease assignment resulted in a non-cash pre-tax impairment charge of $1.1 million recognized in the fourth quarter.  In prior periods, the operations of the company's previously owned commercial mall in Kalispell, Montana, the Red Lion Hotel Medford inOregon, the ownership of certain real estate in Sacramento, California, and a contract catering business in Yakima, Washington, were classified as discontinued operations. As required under generally accepted accounting principles ("GAAP"), Red Lion separately reports the results of these operations including any related asset impairment charges, net of income taxes as "Income (loss) from discontinued operations" on the company's consolidated statement of comprehensive income (loss) for all periods presented.

Liquidity and Balance Sheet

At December 31, 2013, the company had $13.1 million in cash and cash equivalents and no cash borrowings on its $10 million revolving line of credit. Additionally, at December 31, 2013, the company had outstanding debt of $74.3 million, of which $3.0 million was current.

Capital expenditures, primarily for guest room improvement projects, for the three and twelve months ended December 31, 2013, totaled $4.7 million and $13.2 million, respectively.  

Assets Held for Sale or Sold

During the fourth quarter of 2013, the company listed for sale the following properties:

  • Red Lion Hotel Canyon Springs, 112 rooms
  • Red Lion Hotel Columbia Center, 162 rooms
  • Red Lion Hotel & Conference Center Kelso/Longview, 161 rooms
  • Red Lion Hotel Pocatello, 150 rooms
  • Red Lion Hotel Wenatchee, 149 rooms
  • Red Lion Hotel Yakima Center, 156 rooms

In the first quarter of 2013, the company sold the Red Lion Inn Missoula in Montana for $2.0 million.  In the second quarter of 2013, the company sold the Kalispell Center Mall inMontana for $11.6 million and the Red Lion Hotel Pendleton for $2.25 million. During the third quarter of 2013, the company sold the Red Lion Hotel Medford in Oregon for $2.8 million.   

Outlook for 2014

Based on the outlook for the markets in which the company operates and on currently available information, the company is providing the following RevPAR guidance for 2014:

  • Full year 2014 RevPAR for comparable owned and leased hotels is expected to increase 3 to 5 percent over 2013.

About Red Lion Hotels Corporation

Red Lion Hotels Corporation is a hospitality company primarily engaged in the franchising, ownership and operation of hotels located in ten states and one Canadian province. As ofFebruary 26, 2014, the company has 54 hotels system wide. The Red Lion Hotels and Red Lion Inn & Suites network is comprised of 52 hotels with 9,014 rooms and 457,222 square feet of meeting space. The Leo Hotel Collection is comprised of two hotels with 3,256 rooms and 241,000 square feet of meeting space. The company also owns and operates an entertainment and event ticket distribution business.

Red Lion Hotels Corporation
Consolidated Statements of Comprehensive Income (Loss)
(unaudited)
($ in thousands, except footnotes and per share amounts)
         
  Three months ended December 31,    
  2013 2012 $ Change % Change
         
Revenue:        
Hotels  $ 22,100  $ 22,612  $ (512) -2.3%
Franchise  1,561  1,224  337 27.5%
Entertainment  2,665  2,809  (144) -5.1%
Other  87  116  (29) -25.0%
         
Total revenues  26,413  26,761  (348) -1.3%
         
Operating expenses:        
Hotels  20,024  20,800  (776) -3.7%
Franchise   1,381  1,271  110 8.7%
Entertainment  2,631  2,775  (144) -5.2%
Other  164  228  (64) -28.1%
Depreciation and amortization   3,112  3,167  (55) -1.7%
Hotel facility and land lease   1,150  1,031  119 11.5%
Asset impairment  --   644  (644) -100.0%
Loss (gain) on asset dispositions, net   (93)  61  154 n/m
Undistributed corporate expenses  1,445  1,137  308 27.1%
         
Total expenses  29,814  31,114  (1,300) -4.2%
         
Operating income (loss)  (3,401)  (4,353)  952 21.9%
         
Other income (expense):        
Interest expense  (1,235)  (1,571)  336 21.4%
Other income, net  73  154  (81) -52.6%
         
Income (loss) before income taxes  (4,563)  (5,770)  1,207 20.9%
         
Income tax (benefit) expense  736  (2,148)  (2,884) -134.3%
         
Income (loss) from continuing operations  (5,299)  (3,622)  (1,677) -46.3%
         
Discontinued operations (1,2):        
Income (loss) from operations of discontinued business units,        
net of income tax (benefit) expense of ($391) and ($58) respectively  479  (15)  494 n/m
Loss on disposal and impairment of the assets of the discontinued business       
units, net of income tax (benefit) expense of $280 and $0 respectively  (9,138)  --   (9,138) n/m
         
Income (loss) from discontinued operations  (8,659)  (15)  (8,644) n/m
         
Net income (loss)  (13,958)  (3,637)  (10,321) n/m
         
Less net income or loss attributable to noncontrolling interest  --   --   --  n/m
         
Net income (loss) attributable to Red Lion Hotels Corporation   (13,958)  (3,637)  (10,321) n/m
         
Comprehensive income (loss)        
Unrealized gains (losses) on cash flow hedge, net of tax  5  --   5 100.0%
         
Comprehensive income (loss) attributable to Red Lion Hotels Corporation   $ (13,953)  $ (3,637)  $ (10,316) n/m
         
Earnings per share - basic and diluted        
Income (loss) from continuing operations   $ (0.27)  $ (0.19)    
Income (loss) from discontinued operations  $ (0.44)  $ --     
Net income (loss) attributable to Red Lion Hotels Corporation  $ (0.71)  $ (0.19)    
Weighted average shares - basic   19,684  19,426    
Weighted average shares - diluted  19,684  19,426    
         
         
         
Non-GAAP Financial Measures:        
         
EBITDA (3)   $ (8,795)  $ (560)  $ (8,235) n/m
EBITDA as a percentage of revenues  -33.3% -2.1%    
         
Comparable EBITDA from continuing operations before special items (4)   $ (216)  $ --   $ (216) n/m
         
         
(1) Between the fourth quarter 2011 and first quarter of 2013, we classified the operations of four of our businesses as discontinued as we either sold them or ceased operating them. Those operations were a hotel in Medford, Orgeon, a hotel in Sacramento, California, a commercial mall in Kalispell, Montana and a catering company inYakima, Washington.
(2) During the fourth quarter 2013, the company listed for sale six hotel properties: located in Yakima, Kennewick, Pasco, and Wenatchee, Washington; in Twin Falls andPocatello, Idaho. The company does not expect to maintain significant continuing involvement following the sales. Accordingly, the operations of these properties have been classified as discontinued operations for all periods presented. Additionally in the fourth quarter of 2013, the company entered into an agreement to assign the ground lease for its hotel in Eugene, Oregon and cease operating the hotel. This property has also been classified as a discontinued operation for all periods presented.
(3) The definition of "EBITDA" and how that measure relates to net income (loss) attributable to Red Lion Hotels Corporation is discussed further in this release under Non-GAAP Financial Measures.
(4) The definition of " Comparable EBITDA from continuing operations before special items" and how that measure relates to net income (loss) attributable to Red Lion Hotels Corporation is discussed further in this release under Non-GAAP Financial Measures.
 
Red Lion Hotels Corporation
Consolidated Statements of Comprehensive Income (Loss)
(unaudited)
($ in thousands, except footnotes and per share amounts)
         
  Year ended December 31,     
  2013 2012 $ Change % Change
         
Revenue:        
Hotels  $ 103,138  $ 113,510  $ (10,372) -9.1%
Franchise  7,135  5,177  1,958 37.8%
Entertainment  9,439  9,165  274 3.0%
Other  343  442  (99) -22.4%
         
Total revenues  120,055  128,294  (8,239) -6.4%
         
Operating expenses:        
Hotels  83,595  92,076  (8,481) -9.2%
Franchise   6,555  4,758  1,797 37.8%
Entertainment  9,189  9,020  169 1.9%
Other  535  828  (293) -35.4%
Depreciation and amortization   12,348  12,941  (593) -4.6%
Hotel facility and land lease   4,464  4,143  321 7.7%
Asset impairment  --   9,440  (9,440) n/m
Loss (gain) on asset dispositions, net   (148)  (164)  (16) -9.8%
Undistributed corporate expenses  7,945  6,022  1,923 31.9%
         
Total expenses  124,483  139,064  (14,581) -10.5%
         
Operating income (loss)  (4,428)  (10,770)  6,342 58.9%
         
Other income (expense):        
Interest expense  (5,516)  (6,959)  1,443 20.7%
Other income, net  474  229  245 n/m
         
Income (loss) before income taxes  (9,470)  (17,500)  8,030 45.9%
         
Income tax (benefit) expense  (751)  (6,339)  (5,588) -88.2%
         
Income (loss) from continuing operations  (8,719)  (11,161)  2,442 21.9%
         
Discontinued operations (1,2):        
Income (loss) from operations of discontinued business units,        
net of income tax (benefit) expense of $0 and $383 respectively  1,303  1,006  297 29.5%
Loss on disposal and impairment of the assets of the discontinued business       
units, net of income tax (benefit) expense of $0 and ($2,566) respectively  (9,631)  (4,526)  (5,105) -112.8%
         
Income (loss) from discontinued operations  (8,328)  (3,520)  (4,808) -136.6%
         
Net income (loss)  (17,047)  (14,681)  (2,366) -16.1%
         
Less net income or loss attributable to noncontrolling interest  --   (7)  7 100.0%
         
Net income (loss) attributable to Red Lion Hotels Corporation   (17,047)  (14,674)  (2,373) -16.2%
         
Comprehensive income (loss)        
Unrealized gains (losses) on cash flow hedge, net of tax  (159)  --   (159) n/m
         
Comprehensive income (loss) attributable to Red Lion Hotels Corporation   $ (17,206)  $ (14,674)  $ (2,532) -17.3%
         
Earnings per share - basic and diluted        
Income (loss) from continuing operations   $ (0.45)  $ (0.58)    
Income (loss) from discontinued operations  $ (0.42)  $ (0.18)    
Net income (loss) attributable to Red Lion Hotels Corporation  $ (0.87)  $ (0.76)    
Weighted average shares - basic   19,575  19,327    
Weighted average shares - diluted  19,575  19,327    
         
 
Non-GAAP Financial Measures:        
         
EBITDA (3)   $ 1,865  $ (422)  $ 2,287 n/m
EBITDA as a percentage of revenues  1.6% -0.3%    
         
Comparable EBITDA from continuing operations before special items (4)   $ 9,487  $ 10,807  $ (1,320) -12.2%
         
         
(1) Between the fourth quarter 2011 and first quarter of 2013, we classified the operations of four of our businesses as discontinued as we either sold them or ceased operating them. Those operations were a hotel in Medford, Orgeon, a hotel in Sacramento, California, a commercial mall in Kalispell, Montana and a catering company in Yakima, Washington.
(2) During the fourth quarter 2013, the company listed for sale six hotel properties: located in Yakima, Kennewick, Pasco, and Wenatchee, Washington; in Twin Falls and Pocatello, Idaho. The company does not expect to maintain significant continuing involvement following the sales. Accordingly, the operations of these properties have been classified as discontinued operations for all periods presented. Additionally in the fourth quarter of 2013, the company entered into an agreement to assign the ground lease for its hotel in Eugene, Oregon and cease operating the hotel. This property has also been classified as a discontinued operation for all periods presented.
(3)  The definition of "EBITDA" and how that measure relates to net income (loss) attributable to Red Lion Hotels Corporation is discussed further in this release under Non-GAAP Financial Measures.
(4)  The definition of "Comparable EBITDA from continuing operations before special items" and how that measure relates to net income (loss) attributable to Red Lion Hotels Corporation is discussed further in this release under Non-GAAP Financial Measures.
 
 
Red Lion Hotels Corporation
Consolidated Balance Sheets
(unaudited)
($ in thousands, except share data)
     
  December 31,  December 31, 
  2013 2012
Assets:    
Current assets:    
Cash and cash equivalents  $ 13,058  $ 6,477
Restricted cash  --   2,417
Accounts receivable, net  6,283  5,774
Notes receivable  672  4,112
Inventories  1,386  1,329
Prepaid expenses and other  2,873  2,648
Deferred income taxes  1,034  2,342
Other current assets  393  -- 
Assets held for sale  18,346  18,288
Total current assets  44,045  43,387
     
Property and equipment, net  166,356  195,012
Goodwill  8,512  8,512
Intangible assets  6,992  6,992
Notes receivable, long term  4,423  2,902
Other assets, net  4,298  4,137
     
Total assets  $ 234,626  $ 260,942
     
Liabilities:    
Current liabilities:    
Accounts payable  $ 4,763  $ 5,967
Accrued payroll and related benefits  2,786  2,504
Accrued interest payable  25  190
Advance deposits  199  248
Other accrued expenses  8,465  9,286
Long-term debt, due within one year  3,000  49,178
Total current liabilities  19,238  67,373
     
Long-term debt, net of discount  40,058  -- 
Deferred income  3,455  3,923
Deferred income taxes  3,841  5,913
Debentures due Red Lion Hotels Capital Trust  30,825  30,825
Total liabilities  97,417  108,034
     
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;     
19,687,232 and 19,451,849 shares issued and outstanding  197  195
Additional paid-in capital  152,303  150,798
Accumulated other comprehensive income/(loss), net of tax  (159)  -- 
Retained earnings (accumulated deficit)  (15,132)  1,915
Total stockholders' equity  137,209  152,908
     
Total liabilities and stockholders' equity  $ 234,626  $ 260,942
       
       
Red Lion Hotels Corporation      
Additional Hotel Statistics      
(unaudited)      
             
System-wide Hotels as of December 31, 2013    
      Meeting Space      
  Hotels Rooms (sq. ft.)      
Red Lion Owned or Leased Hotels (1)      
Continuing Operations  18  3,739  169,572      
Discontinued Operations  7  1,027  60,733      
Red Lion Franchised Hotels (1)  28  4,429  232,517      
Leo Hotel Collection  2  3,256  241,000      
Total   55  12,451  703,822      
             
             
Comparable Hotel Statistics from Continuing Operations  (1,2,3)
  Three months ended December 31, 2013 Three months ended December 31, 2012
  Average     Average    
  Occupancy (4) ADR (5) RevPAR (6)  Occupancy (4) ADR (5) RevPAR (6) 
Owned and Leased Hotels 55.6%  $ 82.28  $ 45.78 53.9%  $ 82.54  $ 44.53
Franchised Hotels 48.4%  $ 85.32  $ 41.33 46.3%  $ 84.87  $ 39.27
Total System Wide 52.3%  $ 83.60  $ 43.69 50.4%  $ 83.54  $ 42.07
             
Change from prior comparative period:      
Owned and Leased Hotels  170 bps -0.3% 2.8%      
Franchised Hotels  210 bps 0.5% 5.2%      
Total System Wide  190 bps 0.1% 3.9%      
             
  Year ended December 31, 2013 Year ended December 31, 2012
  Average     Average    
  Occupancy (4) ADR (5) RevPAR (6)  Occupancy (4) ADR (5) RevPAR (6) 
Owned and Leased Hotels 64.3%  $ 89.22  $ 57.33 64.7%  $ 85.88  $ 55.58
Franchised Hotels 56.9%  $ 87.46  $ 49.74 55.1%  $ 84.88  $ 46.80
Total System Wide 60.8%  $ 88.45  $ 53.78 60.2%  $ 85.45  $ 51.48
             
Change from prior comparative period:      
 Owned and Leased Hotels  (40) bps 3.9% 3.1%      
 Franchised Hotels  180 bps 3.0% 6.3%      
 Total System Wide  60 bps 3.5% 4.5%      
             
(1) Includes all hotels owned, leased and franchised, presented on a comparable basis for hotel statistics. The Helena, Denver Southeast, Missoula and Pendleton properties have been excluded from the owned and leased hotel statistics and included in the franchised statistics for all periods shown.
(2) Excludes eight hotels identified as a discontinued operations, including one that was sold in the third quarter 2013.
(3) Excludes statistics for the Leo Hotel Collection.
(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 and includes rooms taken out of service for renovation.
(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.
 
Red Lion Hotels Corporation
Comparable Operating Results and Data From Continuing Operations
(unaudited)
($ in thousands)
         
Certain operating results for the periods included in this report are shown on a comparable hotel basis. Comparable hotels are defined as properties that are owned or leased by the company and the operations of which are included in the consolidated results from continuing operations for the entirety of the reporting periods being compared. Comparable operating results from continuing operations and comparable operating results from continuing operations before special items represent reported operating results less the impact of the Helena property, which was sold in July 2012; the Denver Southeast property, which was sold in October 2012; the Missoula property, which was sold in February 2013 and thePendleton property, which was sold in April 2013; and less the impact of certain non-recurring charges that do not allow for a meaningful comparison between periods. We utilize these measures because management finds them 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, ongoing operations. We believe they are a complement to reported operating results. Comparable operating results from continuing operations and comparable operating results from continuing operations before special items are not intended to represent reported operating results defined by generally accepted accounting principles in the United States ("GAAP"), and such information should not be considered as an alternative to reported information or any other measure of performance prescribed by GAAP. 
         
  Three months ended 

December 31,

Year ended 

December 31, 

  2013 2012 2013 2012
         
Total revenue per the consolidated statement of comprehensive income (loss)  $ 26,413  $ 26,761  $ 120,055  $ 128,294
less: Revenue from Helena, Denver Southeast, Missoula and Pendleton properties  --   (1,056)  (373)  (12,845)
Comparable total revenue  $ 26,413  $ 25,705  $ 119,682  $ 115,449
         
Room revenue from continuing operations  $ 15,743  $ 16,061  $ 78,536  $ 85,074
less: Room revenue from Helena, Denver Southeast, Missoula and Pendleton properties  --   (744)  (308)  (9,014)
Comparable room revenue  $ 15,743  $ 15,317  $ 78,228  $ 76,060
         
Food and beverage revenue from continuing operations  $ 5,692  $ 5,776  $ 21,858  $ 25,275
less: Food and beverage revenue from Helena, Denver Southeast, Missoula and Pendleton properties  --   (254)  (59)  (3,112)
Comparable food and beverage revenue  $ 5,692  $ 5,522  $ 21,799  $ 22,163
         
Other hotel revenue from continuing operations  $ 665  $ 775  $ 2,744  $ 3,161
less: Other hotel revenue from Helena, Denver Southeast, Missoula and Pendleton properties  --   (58)  (6)  (719)
Comparable other hotel revenue  $ 665  $ 717  $ 2,738  $ 2,442
         
Total hotel revenue from continuing operations  $ 22,100  $ 22,612  $ 103,138  $ 113,510
less: Total hotel revenue from Helena, Denver Southeast, Missoula and Pendleton properties  --   (1,056)  (373)  (12,845)
Comparable total hotels revenue  $ 22,100  $ 21,556  $ 102,765  $ 100,665
         
The reconciliation of hotel operating expense per the consolidated statements of comprehensive income (loss) to comparable hotel operating expense is as follows:
         
  Three months ended 

December 31,

Year ended 

December 31, 

  2013 2012 2013 2012
         
Hotel operating expenses from continuing operations  $ 20,024  $ 20,800  $ 83,595  $ 92,076
less: Hotel operating expenses from Helena, Denver Southeast, Missoula and Pendleton properties  --   (1,489)  (718)  (11,790)
Comparable hotel operating expenses  $ 20,024  $ 19,311  $ 82,877  $ 80,286
         
Hotel revenue from continuing operations  $ 22,100  $ 22,612  $ 103,138  $ 113,510
less: Hotel revenue from Helena, Denver Southeast, Missoula and Pendleton properties  --   (1,056)  (373)  (12,845)
Comparable hotel revenue  $ 22,100  $ 21,556  $ 102,765  $ 100,665
         
Hotel direct operating margin from continuing operations  $ 2,076  $ 1,812  $ 19,543  $ 21,434
less: Hotel direct operation margin from Helena, Denver Southeast, Missoula and Pendleton properties  --   433  345  (1,055)
Comparable hotel direct margin  $ 2,076  $ 2,245  $ 19,888  $ 20,379
Comparable hotel direct margin % 9.4 % 10.4 % 19.4 % 20.2 %
         
         
The reconciliation of EBITDA from continuing operations before special items per the table entitled "Disclosure of Special Items" to comparable total EBITDA before special items is as follows:
         
  Three months ended 

December 31,

Year ended 

December 31, 

  2013 2012 2013 2012
         
EBITDA before special items per the table "Disclosure of Special Items"  $ (216)  $ (389)  $ 8,976  $ 11,847
less: EBITDA of Helena, Denver Southeast, Missoula and Pendleton properties  --   389  511  (1,040)
Comparable total EBITDA from continuing operations before special items  $ (216)  $ --   $ 9,487  $ 10,807
 
 
Red Lion Hotels Corporation
Reconciliation of EBITDA to Net Income Attributable to Red Lion Hotels Corporation
(unaudited)
($ in thousands)
         
The following is a reconciliation of EBITDA and EBITDA from continuing operations to net income (loss) attributable to Red Lion Hotels Corporation for the periods presented:
         
  Three months ended 

December 31,

Year ended 

December 31, 

  2013 2012 2013 2012
         
EBITDA from continuing operations  $ (216)  $ (1,032)  $ 8,394  $ 2,407
Income tax benefit (expense) - continuing operations  (736)  2,148  751  6,339
Interest expense - continuing operations  (1,235)  (1,571)  (5,516)  (6,959)
Depreciation and amortization - continuing operations  (3,112)  (3,167)  (12,348)  (12,941)
Net income (loss) attributable to Red Lion Hotels Corporation      
from continuing operations  (5,299)  (3,622)  (8,719)  (11,154)
Income (loss) on discontinued operations, net of tax  (8,659)  (15)  (8,328)  (3,520)
Net income (loss) attributable to Red Lion Hotels Corporation  $ (13,958)  $ (3,637)  $ (17,047)  $ (14,674)
         
         
  Three months ended 

December 31,

Year ended 

December 31, 

  2013 2012 2013 2012
         
EBITDA   $ (8,795)  $ (560)  $ 1,865  $ (422)
Income tax benefit (expense)   (625)  2,206  751  8,522
Interest expense  (1,235)  (1,571)  (5,516)  (6,959)
Depreciation and amortization  (3,303)  (3,712)  (14,147)  (15,815)
Net income (loss) attributable to Red Lion Hotels Corporation  $ (13,958)  $ (3,637)  $ (17,047)  $ (14,674)
         

NON-GAAP FINANCIAL MEASURES

EBITDA is defined as net income attributable to Red Lion Hotels Corporation, 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 attributable to Red Lion Hotels Corporationand other financial performance measures provided in accordance with generally accepted accounting principles in the United States ("GAAP").

We use EBITDA to measure financial performance 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 tax 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



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