<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 12b-25
Commission File Number: 1-9319
1-9320
NOTIFICATION OF LATE FILING
(CHECK ONE): / /Form 10-K / /Form 20-F / /Form 11-K /X/Form 10-Q / /Form N-SAR
For Period Ended:
--------------------------------------------
/ / Transition Report on Form 10-K
/ / Transition Report on Form 20-F
/ / Transition Report on Form 11-K
/ / Transition Report on Form 10-Q
/ / Transition Report on Form N-SAR
For the Transition Period Ended: September 30, 1998
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READ INSTRUCTION (ON BACK PAGE) BEFORE PREPARING FORM. PLEASE PRINT OR TYPE.
NOTHING IN THIS FORM SHALL BE CONSTRUED TO IMPLY THAT THE COMMISSION HAS
VERIFIED ANY INFORMATION CONTAINED HEREIN.
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If the notification relates to a portion of the filing checked above, identify
the Item(s) to which the notification relates:
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PART I -- REGISTRANT INFORMATION
Patriot American Hospitality, Inc. Wyndham International, Inc.
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Full Name of Registrant
N/A
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Former Name if Applicable
1950 Stemmons Freeway, Suite 6001
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Address of Principal Executive Office (Street and Number)
Dallas, Texas 75207
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City, State and Zip Code
PART II -- RULES 12b-25(b) AND (c)
If the subject report could not be filed without unreasonable effort or
expense and the registrant seeks relief pursuant to Rule 12b-25(b), the
following should be completed. (Check box if appropriate)
/X/ (a) The reasons described in reasonable detail in Part III of this
form could not be eliminated without unreasonable effort or
expense;
/X/ (b) The subject annual report, semi-annual report, transition report
on Form 10-K, Form 20-F, 11-K or Form N-SAR, or portion thereof,
will be filed on or before the fifteenth calendar day following
the prescribed due date; or the subject quarterly report of
transition report on Form 10-Q, or portion thereof will be filed
on or before the fifth calendar day following the prescribed due
date; and
/ / (c) The accountant's statement or other exhibit required by Rule
12b-25(c) has been attached if applicable.
PART III -- NARRATIVE
State below in reasonable detail the reasons why Forms 10-K, 20-F, 11-K, 10-Q,
N-SAR, or the transition report or portion thereof, could not be filed within
the prescribed time period.
(ATTACH EXTRA SHEETS IF NEEDED)
SEC 1344 (6/94)
The Joint Current Report on Form 10-Q of Patriot American Hospitality,
Inc. and Wyndham International, Inc. (the "Companies") could not be filed
within the prescribed time period for the following reasons:
1. The Companies are currently involved in continuing negotiations
regarding possible resolutions of forward equity transactions with three
counterparties involving the sale of shares of paired common stock of the
Companies with related purchase price adjustment mechanisms as well as
related issues under the Companies' revised credit facility. These
continuing negotiations have caused unanticipated delays in the preparation
of the Companies' Joint Quarterly Report on Form 10-Q, which could not be
eliminated without unreasonable effort or expense.
<PAGE>
PART IV -- OTHER INFORMATION
(1) Name and telephone number of person to contact in regard to this
notification
Lawrence S. Jones (214) 863-1000
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(Name) (Area Code) (Telephone Number)
(2) Have all other periodic reports required under Section 13 or 15(d) of the
Securities Exchange Act of 1934 or Section 30 of the Investment Company
Act of 1940 during the preceding 12 months or for such shorter period
that the registrant was required to file such report(s) been filed? If
answer is no, identify report(s). /X/ Yes / / No
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(3) Is it anticipated that any significant change in results of operations
from the corresponding period for the last fiscal year will be reflected
by the earnings statements to be included in the subject report or
portion thereof? /X/ Yes / / No
If so, attach an explanation of the anticipated change, both narratively
and quantitatively, and, if appropriate, state the reasons why a reasonable
estimate of the results cannot be made.
The operating results of the Companies have changed from the
corresponding period last year as a result of the acquisition of an
additional 107 hotel properties, the leasehold acquisition of 122
properties, the management of 172 properties and the franchise of nine
properties. On a combined basis, for the nine months ended September 30,
1998, total revenues have increased from $154.8 million to $1.4 billion.
See the Joint Current Report on Form 8-K of the Companies as filed on
November 9, 1998 and as amended on November 10, 1998, attached hereto as
exhibits A and B respectively.
<PAGE>
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Patriot American Hospitality, Inc. -- Wyndham International, Inc.
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(Name of Registrant as Specified in Charter)
has caused this notification to be signed on its behalf by the undersigned
hereunto duly authorized.
Date November 16, 1998
-------------------------------
PATRIOT AMERICAN HOSPITALITY, INC.
By /s/ Lawrence S. Jones
----------------------------
Lawrence S. Jones
Executive Vice President
and Treasurer
WYNDHAM INTERNATIONAL, INC.
By /s/ Lawrence S. Jones
----------------------------
Lawrence S. Jones
Executive Vice President
and Treasurer
INSTRUCTION: The form may be signed by an executive officer of the registrant
or by any other duly authorized representative. The name and title of the
person signing the form shall be typed or printed beneath the signature. If
the statement is signed on behalf of the registrant by an authorized
representative (other than an executive officer), evidence of the
representative's authority to sign on behalf of the registrant shall be filed
with the form.
____________________________________ATTENTION__________________________________
INTENTIONAL MISSTATEMENTS OR OMISSIONS OF FACT CONSTITUTE FEDERAL CRIMINAL
VIOLATIONS (SEE 18 U.S.C. 1001).
_______________________________________________________________________________
GENERAL INSTRUCTIONS
1. This form is required by Rule 12b-25 (17 CFR 240.12b-25) of the General
Rules and Regulations under the Securities Exchange Act of 1934.
2. One signed original and four conformed copies of this form and amendments
thereto must be completed and filed with the Securities and Exchange
Commission, Washington, D.C. 20549, in accordance with Rule O-3 of the
General Rules and Regulations under the Act. The information contained in
or filed with the form will be made a matter of public record in the
Commission files.
3. A manually signed copy of the form and amendments thereto shall be filed
with each national securities exchange on which any class of securities of
the registrant is registered.
4. Amendments to the notifications must also be filed on form 12b-25 but need
not restate information that has been correctly furnished. The form shall
be clearly identified as an amended notification.
5. ELECTRONIC FILERS. This form shall not be used by electronic filers unable
to timely file a report solely due to electronic difficulties. Filers unable
to submit a report within the time period prescribed due to difficulties in
electronic filing should comply with either Rule 201 or Rule 202 of
Regulation S-T (Section 232.201 or Section 232.202 of this chapter) or apply
for an adjustment in filing date pursuant to Rule 13(b) of Regulation S-T
(Section 232.13(b) of this chapter).
<PAGE>
Exhibit A
(Commission File Number): 001-09319
001-09320
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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): November 9, 1998
<TABLE>
<S> <C>
PATRIOT AMERICAN HOSPITALITY, INC. WYNDHAM INTERNATIONAL, INC.
(Exact Name of Registrant as Specified in its Charter) (Exact Name of Registrant as Specified in its Charter)
DELAWARE DELAWARE
(State or Other Jurisdiction of (State or Other Jurisdiction of
Incorporation or Organization) Incorporation or Organization)
94-0358820 94-2878485
(I.R.S. Employer Identification No.) (I.R.S. Employer Identification No.)
1950 Stemmons Freeway 1950 Stemmons Freeway
Suite 6001 Suite 6001
Dallas, Texas 75207 Dallas, Texas 75207
(214) 863-1000 (214) 863-1000
(Address, Including Zip Code, and Telephone (Address, Including Zip Code, and Telephone
Number, Including Area Code, of Number, Including Area Code, of
Registrant's Principal Executive Offices) Registrant's Principal Executive Offices)
------------------------------ ------------------------------
PAUL A. NUSSBAUM JAMES D. CARREKER
Chairman of the Board and Chief Executive Officer Chairman of the Board and Chief Executive Officer
Patriot American Hospitality, Inc. Wyndham International, Inc.
1950 Stemmons Freeway 1950 Stemmons Freeway
Suite 6001 Suite 6001
Dallas, Texas 75207 Dallas, Texas 75207
(214) 863-1000 (214) 863-1000
(Name, Address, Including Zip Code, and (Name, Address, Including Zip Code, and
Telephone Number, Including Area Code and Telephone Number, Including Area Code,
of Agent for Service) of Agent for Service)
</TABLE>
--------------------
copies to:
GILBERT G. MENNA, P.C.
KATHRYN I. MURTAGH, ESQ.
Goodwin, Procter & Hoar LLP
Exchange Place
Boston, Massachusetts 02109-2881
(617) 570-1000
--------------------
<PAGE>
Item 5. Other Events
FORWARD-LOOKING STATEMENTS. Any statements in this Form 8-K that are
not strictly historical are forward-looking statements within the meanings of
the safe-harbor provision of the Private Securities Litigation Reform Act.
These statements include, among other things, any statements regarding
intent, expectations or belief with respect to (i) availability or terms of
additional sources of capital for the companies, (ii) the companies' ability
to refinance, extend or amend the terms of existing indebtedness, (iii) the
companies' ability to reach settlement on the forward equity contracts, and
(iv) the companies' ability to restore damage sustained at certain of its
properties due to Hurricane Georges. Stockholders are cautioned that, while
forward-looking statements reflect the companies' good faith beliefs, they
are not guarantees of future performance and involve known and unknown risks
and uncertainties, and that actual results may differ materially from those
in the forward-looking statements as a result of various factors. Certain
factors that could cause such differences include, without limitation, the
availability of equity or debt financing at terms and conditions favorable to
the companies, the willingness of the companies' existing lenders to
refinance, extend or amend the terms of existing indebtedness, the
willingness of the counterparties to the companies' forward equity contracts
to enter into settlements regarding those agreements, and other factors
detailed in this Current Report on Form 8-K, in the companies' Quarterly
Report on Form 10-Q for period ended June 30, 1998, and in the companies'
Registration Statements on Form S-3 (File Nos. 333-58705 and 333-65339).
COMBINED LIQUIDITY AND CAPITAL RESOURCES. In June 1998, Patriot
American Hospitality, Inc. ("Patriot") entered into a revised credit facility
with The Chase Manhattan Bank and Chase Securities, Inc. and Paine Webber
Real Estate Securities, Inc. providing a $900 million Revolving Credit
Facility and an aggregate amount of $1.8 billion of Term Loans. Currently,
Patriot has $12.2 million of available funds under the Revolving Credit
Facility. Additionally, the Term Loans have maturities of January 31, 1999
($350 million); March 31, 1999 ($400 million); and March 31, 2000 ($450
million). Patriot and Wyndham International, Inc. ("Wyndham," and together
with Patriot, the "Companies") also have approximately $205 million of other
debt which is currently due on or before December 31, 1998.
The Companies are evaluating possible means of improving liquidity
through refinancing or extending the maturity of existing indebtedness,
issuing additional equity securities, and divesting certain non-core,
non-proprietarily branded hotel assets. The Companies have also
re-strategized capital expenditures and development programs, are improving
operating efficiencies, and are in discussions to seek possible amendments to
the Revolving Credit Facility.
No assurances can be made regarding the availability or terms of
additional sources of capital for the Companies in the future and no
assurances can be given regarding the Companies' ability to successfully
refinance or extend the maturity of existing indebtedness. No assurances can
be given regarding the Companies' success in securing any amendments to the
Revolving Credit Facility. Additionally, in the absence of such amendments,
no assurances can be given that the Companies will continue to meet the
reduced EBITDA coverage ratio requirements which go into effect in December
under the Revolving Credit Facility. If the Companies are unable to secure
additional sources of financing in the future, are unable to successfully
refinance existing indebtedness, or are unable to obtain amendments to
existing covenants under the Revolving Credit Facility, no assurance can be
made that the Companies will be able to meet their financial obligations as
they come due or that the lack of future financing sources would not have a
material adverse effect on the Companies' financial condition and results of
operations.
FORWARD CONTRACTS. The Companies are parties to forward equity
transactions with three counterparties involving the sale of an aggregate of
13.3 million shares (the "Initial Shares") of paired common stock of the
Companies with related purchase price adjustment mechanisms (the "Forward
Contracts"). The Forward Contracts require the Companies from time to time to
issue additional shares of paired common stock or pay cash based upon the
difference between the respective forward prices and the market price of the
Companies' paired common stock. The Companies' aggregate exposure under the
Forward Contracts as of November 1, 1998 was approximately $313.6 million
(assuming the Forward Contracts are settled in cash). The Companies have
registered the sale of up to 44,000,000 shares of paired common stock in
connection with the Forward Contracts; however, to date no sales have been
made under such registration statements. There can be no assurance that such
registration statements will remain effective or that the Companies will not
be required to register additional shares for delivery under the Forward
Contracts.
Settlement under one or more of the Forward Contracts could have
adverse effects on the Companies' liquidity or dilutive effects on the
Companies' capital stock. Delivery of cash would adversely affect the
Companies' liquidity, and delivery of shares would have dilutive effects on
the Companies' capital stock. Moreover, settlement (whether by reason of a
drop in the market price of the paired shares or otherwise) may force the
Companies to issue paired shares at a depressed price, which may heighten the
dilutive effects on the Companies' capital stock. The dilutive effect of a
stock settlement and the adverse liquidity effect of a cash settlement
increase significantly as the market price of the paired shares declines
below the applicable forward price or reference price.
2
<PAGE>
Under each Forward Contract, at settlement the Companies must
deliver to the counterparty paired shares or, under certain circumstances,
cash, with respect to the number of shares of paired common stock initially
sold to such counterparty, based upon the difference between the applicable
forward price and the market price of the paired common stock at the time of
settlement. The forward price is determined by reference to the purchase
price of the Initial Shares plus an imputed return based upon LIBOR plus an
applicable spread between 140 and 150 basis points. The Initial Shares were
issued at the following share prices: $24.8625 (4,900,000 shares, with
NationsBanc Capital Corporation ("Nations") as counterparty); $27.01125
(5,150,000 shares, with PaineWebber Financial Products, Inc. ("PaineWebber")
as counterparty); and $28.8125 (3,250,000 shares, with UBS AG, London Branch
("UBS") as counterparty).
The market price of the paired common stock has dropped
significantly below the respective forward prices under the Forward
Contracts. As a result, the Companies to date have made cash payments
totaling approximately $54.3 million and have delivered an aggregate of
25,258,163 additional shares of paired common stock as collateral to the
counterparties.
The Companies' forward contracts with PaineWebber and UBS,
representing a total obligation of approximately $192 million, reached
maturity on October 15, 1998 without final settlement by the Companies. UBS
has asserted that the Companies are in default under the terms of its forward
contract as the result of the Companies not delivering certain cash
collateral and not mailing a final settlement of the contract in cash
although the Companies have disputed this. In addition, because the market
price of the paired common stock is below applicable unwind thresholds under
the forward contract with Nations (which represents an obligation of
approximately $128 million), Nations has alleged the right to require a
complete settlement of its transaction.
The Companies are currently in discussions regarding possible
resolutions of the respective Forward Contracts to provide the Companies with
the opportunity to resolve the Forward Contracts through payments of cash or
other forms of consideration, and thus to avoid the need to settle in shares.
There can be no assurance that such discussions will be successful. Moreover,
any such resolutions may require the consent of the lenders under the
Companies' credit facility. No assurances can be given that any such consent,
if required and sought, would be obtained.
TREASURY RATE LOCK AGREEMENTS. The Companies previously entered
into three treasury interest rate lock agreements to protect the Companies
against the possibility of rising interest rates in connection with an
anticipated $850 million corporate bond offering originally scheduled for the
fourth quarter of 1998. However, given current conditions in the debt capital
markets, the Companies have decided to delay this debt issuance indefinitely.
Under the rate lock agreements, the Companies receive or make payments based
on the differential between specified interest rates, 6.06%, 6.07% and 5.62%
respectively, and the actual
3
<PAGE>
10-year U.S. Treasury interest rate on a notional principal amount of $525
million. To date, the Companies have settled the entire $525 million in
treasury interest rate locks at rates between 4.59% and 4.67% resulting in a
$49.2 million one-time charge to earnings recorded in the third quarter of
1998.
HURRICANE GEORGES. In September 1998, Hurricane Georges hit the
island of Puerto Rico and the Gulf coast of the United States, including
Florida and Louisiana. Patriot owns three properties on Puerto Rico, the El
Conquistador Resort and Country Club, the El San Juan Hotel and Casino and
the Condado Plaza Hotel. In addition to these properties, Wyndham manages two
properties on the island, the Old San Juan Hotel and Casino and the Wyndham
Palmas del Mar.
The Companies' damage assessment teams, working with the
underwriters for the Companies' insurance providers, have inspected each of
the Companies' owned or managed properties on Puerto Rico and while none of
the properties were destroyed, each sustained damages requiring repair and
construction. Furthermore, each of the Companies' owned or managed properties
sustained damages to the surrounding grounds and landscaping which are in the
process of being repaired. To date, the El San Juan, the Old San Juan, the El
Conquistador, and the Palmas del Mar have re-opened for business. It is
currently anticipated that the remainder of the closed rooms at the Condado
Plaza and the suites at Las Casitas and certain other ancillary facilities at
the El Conquistador will re-open in late November and that the stand alone
ballroom at Palmas del Mar will re-open in mid-January. In addition, the
grand opening of the Golden Door Spa at the El Conquistador which was
scheduled for mid-October will be delayed until mid-December. The Companies'
estimated re-opening dates are subject to the availability of construction
materials and labor. No assurances can be given that the Companies' owned or
managed properties on Puerto Rico will be operating at full capacity by these
estimated dates.
All of the Companies' owned or managed properties on Puerto Rico are
insured with both comprehensive property damage and business interruption
insurance, subject to certain deductibles. The Companies have hired a
consultant to assess their business interruption claims and are currently
negotiating with their insurance carriers regarding coverage for the losses
sustained at the Puerto Rico properties. While the Companies currently
believe that substantially all of the damages sustained at their Puerto Rico
properties will be covered by insurance, no assurances can be made regarding
the timing or amount of the actual payments that will ultimately be received
by the Companies under these policies.
EARNINGS PER PAIRED SHARE. On November 9, 1998, the Companies
issued a press release discussing earnings for the third quarter of 1998.
Such press release is filed herewith as Exhibit 99.15 and is deemed
incorporated herein in its entirety.
4
<PAGE>
Item 7. Financial Statements and Exhibits
Exhibits.
99.1 Purchase Agreement, dated as of April 6, 1998, by and among
Patriot American Hospitality, Inc., Wyndham International,
Inc., PaineWebber Incorporated and PaineWebber Financial
Products, Inc. (incorporated by reference to Exhibit 99.1
to the Companies' joint registration statement on Form S-3,
Nos. 333-58705 and 333-58705-01).
99.2 Purchase Price Adjustment Mechanism Agreement, dated as of
April 6, 1998, by and among Patriot American Hospitality, Inc.,
Wyndham International, Inc., PaineWebber Incorporated and
PaineWebber Financial Products, Inc. (incorporated by reference
to Exhibit 10.3 to the Companies' Quarterly Report on Form 10-Q
for the quarter ended June 30, 1998) (Nos. 001-09319 and 001-
09320).
99.3 Letter Agreement, dated July 30, 1998, by and among Patriot
American Hospitality, Inc., Wyndham International, Inc. and
PaineWebber Financial Products, Inc. (incorporated by reference
to Exhibit 99.3 to the Companies' joint registration statement
on Form S-3, Nos. 333-58705 and 333-58705-01).
99.4 Letter Agreement, dated August 14, 1998, by and among Patriot
American Hospitality, Inc., Wyndham International, Inc. and
PaineWebber Financial Products, Inc. (incorporated by reference
to Exhibit 10.4 to the Companies' Quarterly Report on Form 10-Q
for the quarter ended June 30, 1998) (Nos. 001-09319 and 001-
09320).
99.5 Purchase Agreement, dated as of February 26, 1998, by and among
Patriot American Hospitality, Inc., Wyndham International, Inc.
and NMS Services, Inc. (incorporated by reference to
Exhibit 10.5 to the Companies' Quarterly Report on Form 10-Q
for the quarter ended June 30, 1998) (Nos. 001-09319 and 001-
09320).
99.6 Purchase Price Adjustment Mechanism, dated as of February 26,
1998, by and among Patriot American Hospitality, Inc., Wyndham
International, Inc. and NMS Services, Inc. (incorporated by
reference to Exhibit 10.6 to the Companies' Quarterly Report on
Form 10-Q for the quarter ended June 30, 1998) (Nos. 001-09319
and 001-09320).
99.7 Amendment to Agreements, dated as of August 14, 1998, by and
among Patriot American Hospitality, Inc., Wyndham International,
Inc. and NationsBanc Mortgage Capital Corporation (incorporated
by reference to Exhibit 10.7 to the Companies' Quarterly Report
on Form 10-Q for the quarter ended June 30, 1998)
(Nos. 001-09319 and 001-09320).
99.8 Purchase Agreement, dated December 31, 1997, by and among
Patriot American Hospitality, Inc., Patriot American Hospitality
Operating Company, UBS Limited and Union Bank of Switzerland
(incorporated by reference to Exhibit 10.8 to the Companies'
Quarterly Report on Form 10-Q for the quarter ended June 30,
1998) (Nos. 001-09319 and 001-09320).
99.9 Forward Stock Contract, dated as of December 31, 1997, by and
among Patriot American Hospitality, Inc., Patriot American
Hospitality Operating Company, and Union Bank of Switzerland
(incorporated by reference to Exhibit 10.9 to the Companies'
Quarterly Report on Form 10-Q for the quarter ended June 30,
1998) (Nos. 001-09319 and 001-09320).
99.10 Letter Agreement, dated as of August 14, 1998, by and among
Patriot American Hospitality, Inc., Wyndham International,
Inc. and UBS AG, London Branch (incorporated by reference to
Exhibit 10.10 to the Companies' Quarterly Report on Form 10-Q
for the quarter ended June 30, 1998) (Nos. 001-09319 and
001-09320).
99.11 Letter Agreement, dated September 11, 1998, by and among
Patriot American Hospitality, Inc., Wyndham International,
Inc. and UBS AG, London Branch (incorporated by reference to
Exhibit 99.11 to the Companies' joint registration statement on
Form S-3, Nos. 333-58705 and 333-58705-01).
99.12 Letter, dated September 15, 1998, from PaineWebber Financial
Products, Inc. to Patriot American Hospitality, Inc. and
Wyndham International, Inc. (incorporated by reference to
Exhibit 99.12 to the Companies' joint registration statement on
Form S-3, Nos. 333-58705 and 333-58705-01).
99.13 Letter Agreement, dated September 30, 1998, by and among
Patriot American Hospitality, Inc., Wyndham International,
Inc. and PaineWebber Financial Products, Inc. (incorporated by
reference to the same numbered exhibit to the Companies' joint
registration statement on Form S-3, Nos. 333-65339 and
333-65339-01).
99.14* Debt Maturity Schedule of the Companies as of November 5, 1998.
99.15+ Press Release by the Companies
- --------------------
* filed herewith
+ to be filed by amendment
5
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be filed on its behalf by the
undersigned thereunto duly authorized.
PATRIOT AMERICAN HOSPITALITY, INC.
Dated: November 9, 1998 By: /s/ Lawrence S. Jones
-------------------------------------
Name: Lawrence S. Jones
Title: Executive Vice President and Treasurer
WYNDHAM INTERNATIONAL, INC.
By: /s/ Lawrence S. Jones
-------------------------------------
Name: Lawrence S. Jones
Title: Executive Vice President and Treasurer
6
<PAGE>
DEBT SCHEDULE
11/5/98
<TABLE>
<CAPTION>
BALANCE
DEBT 05-NOV MATURITY RATE
- ---- ------ -------- ----
<S> <C> <C> <C>
NationsBank 12,875,000 11/18/98 Libor + 2.75
CHC Loans 103,000,000 12/15/98 Libor + 2.25
Emerald Plaza 35,000,000 12/31/98 Libor + 1.9
Casa Marina 30,566,000 12/31/98 Libor + 2.0
Harrisburg 19,838,875 12/31/98 Libor + 2.25
Arcadian Feb 98 Facility 850,000 12/31/98 SLibor(3) + 1.75
Arcadian Overdraft Facility 3,400,000 Reviewed Annually UK Base + 1.25
- ----------------------------------------------------------------------------------
Condado 55,000,000 1/29/99 Libor + 2.25
El Conquistador 90,000,000 1/29/99 Libor + 2.25
Tranche I 350,000,000 1/31/99 Libor + 2.25
Arcadian Feb 98 Facility 5,950,000 2/31/99 SLibor + 1.75
Tranche II 400,000,000 3/31/99 Libor + 2.25
Unsecured Recourse Loan 160,000,000 4/15/99 Libor + 2.25
Golden Door Spa 2,000,000 6/1/99 AFR
Chase Promissory Note 49,255,000 11/5/99 Libor + 2.25
Syracuse 9,774,066 12/1/99 8.0%
- ----------------------------------------------------------------------------------
Tranche III 450,000,000 3/31/00 Libor + 2.25
Golden Door Spa 2,000,000 6/1/00 AFR
Revolver(1) 887,758,199 7/18/00 Libor + 2.25
Arcadian Additional Loan 6,800,000 7/31/00 SLibor + 1.75
Santa Maria 4,000,000 8/27/00 Libor + .5
- ----------------------------------------------------------------------------------
Golden Door Spa 2,000,000 6/1/01 AFR
Reach 9,347,583 7/1/01 8.0%
Wyndham PeachTree 38,000,000 10/23/01 Libor + 3.50
Arcadian Term Loan 29,750,000 11/01/01 Libor + 1.25
Arcadian Revolving Credit
Facility 30,600,000 11/01/01 Libor + 1.25
- ----------------------------------------------------------------------------------
St. Louis 8,276,404 5/1/02 9.6%
Pittsburgh 14,462,744 6/1/02 9.0%
Meadows Del Mar 1,172,016 6/1/02 Libor + 3.56
- ----------------------------------------------------------------------------------
Tranche B 599,500,000 3/31/03 Libor + 2.5
El San Juan 42,100,000 8/31/03 Libor + 2.0
Malmaison Senior Debt 25,956,300 12/1/03 Libor + 2.5
Leeds Site Debt 2,260,710 12/1/03 Libor + 2.5
Bourbon Orleans 13,500,000 1/1/04 Libor + 2.0
Ventana Canyon 28,488,769 3/1/05 6.50%
Radisson Beachwood 5,064,553 5/31/05 9.75%
Clubhouse 22,826,894 10/1/05 8.7%
Reach 14,990,400 10/1/05 9.1%
El Conquistador 25,000,000 2/7/06 Libor + .9
Wyndham Senior Sub(2) 1,510,000 5/15/06 10.5%
Gressy Term Loan 2,448,000 4/1/07 TBB + 2.5
Met Life Portfolio 84,058,200 10/1/07 8.08%
Embassy Suites Chicago 41,671,000 10/16/08 8.25%
Greenspoint 41,372,000 10/16/08 8.25%
Great Eastern Tranche A 25,500,000 10/15/10 9.00%
Great Eastern Tranche B 13,600,000 10/15/10 Libor + 1.75
Saletta Term Loan 8,639,000 7/1/14 Ribor + 1.75
Buena Vista 47,223,119 12/1/15 9.11%
Vinings 9,675,000 2/1/23 6.15%
Summerfield 338,200 On Demand Prime
Capital Leases 31,450,256
-------------
TOTAL 3,898,848,288
</TABLE>
(1) LOCs of Approximately $24M exist which count against credit availability
(2) Unable to locate payee in order to tender notes
(3) SLibor - Sterling Libor
<PAGE>
Exhibit B
(Commission File Number): 001-09319
001-09320
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- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------------------
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
-------------------------
Date of Report (Date of earliest event reported): November 9, 1998
<TABLE>
<S> <C>
PATRIOT AMERICAN HOSPITALITY, INC. WYNDHAM INTERNATIONAL, INC.
(Exact Name of Registrant as Specified in its Charter) (Exact Name of Registrant as Specified in its Charter)
DELAWARE DELAWARE
(State or Other Jurisdiction of (State or Other Jurisdiction of
Incorporation or Organization) Incorporation or Organization)
94-0358820 94-2878485
(I.R.S. Employer Identification No.) (I.R.S. Employer Identification No.)
1950 Stemmons Freeway 1950 Stemmons Freeway
Suite 6001 Suite 6001
Dallas, Texas 75207 Dallas, Texas 75207
(214) 863-1000 (214) 863-1000
(Address, Including Zip Code, and Telephone (Address, Including Zip Code, and Telephone
Number, Including Area Code, of Number, Including Area Code, of
Registrant's Principal Executive Offices) Registrant's Principal Executive Offices)
------------------------------ ------------------------------
PAUL A. NUSSBAUM JAMES D. CARREKER
Chairman of the Board and Chief Executive Officer Chairman of the Board and Chief Executive Officer
Patriot American Hospitality, Inc. Wyndham International, Inc.
1950 Stemmons Freeway 1950 Stemmons Freeway
Suite 6001 Suite 6001
Dallas, Texas 75207 Dallas, Texas 75207
(214) 863-1000 (214) 863-1000
(Name, Address, Including Zip Code, and (Name, Address, Including Zip Code, and
Telephone Number, Including Area Code and Telephone Number, Including Area Code,
of Agent for Service) of Agent for Service)
</TABLE>
--------------------
copies to:
GILBERT G. MENNA, P.C.
KATHRYN I. MURTAGH, ESQ.
Goodwin, Procter & Hoar LLP
Exchange Place
Boston, Massachusetts 02109-2881
(617) 570-1000
--------------------
<PAGE>
Item 7. Financial Statements and Exhibits
This Form 8-K/A is filed as an amendment to the Current Report on
Form 8-K filed by Patriot American Hospitality, Inc. and Wyndham
International, Inc. (together, the "Companies") on November 9, 1998.
Exhibits.
99.1 Purchase Agreement, dated as of April 6, 1998, by and among
Patriot American Hospitality, Inc., Wyndham International,
Inc., PaineWebber Incorporated and PaineWebber Financial
Products, Inc. (incorporated by reference to Exhibit 99.1
to the Companies' joint registration statement on Form S-3,
Nos. 333-58705 and 333-58705-01).
99.2 Purchase Price Adjustment Mechanism Agreement, dated as of
April 6, 1998, by and among Patriot American Hospitality, Inc.,
Wyndham International, Inc., PaineWebber Incorporated and
PaineWebber Financial Products, Inc. (incorporated by reference
to Exhibit 10.3 to the Companies' Quarterly Report on Form 10-Q
for the quarter ended June 30, 1998) (Nos. 001-09319 and 001-
09320).
99.3 Letter Agreement, dated July 30, 1998, by and among Patriot
American Hospitality, Inc., Wyndham International, Inc. and
PaineWebber Financial Products, Inc. (incorporated by reference
to Exhibit 99.3 to the Companies' joint registration statement
on Form S-3, Nos. 333-58705 and 333-58705-01).
99.4 Letter Agreement, dated August 14, 1998, by and among Patriot
American Hospitality, Inc., Wyndham International, Inc. and
PaineWebber Financial Products, Inc. (incorporated by reference
to Exhibit 10.4 to the Companies' Quarterly Report on Form 10-Q
for the quarter ended June 30, 1998) (Nos. 001-09319 and 001-
09320).
99.5 Purchase Agreement, dated as of February 26, 1998, by and among
Patriot American Hospitality, Inc., Wyndham International, Inc.
and NMS Services, Inc. (incorporated by reference to
Exhibit 10.5 to the Companies' Quarterly Report on Form 10-Q
for the quarter ended June 30, 1998) (Nos. 001-09319 and 001-
09320).
99.6 Purchase Price Adjustment Mechanism, dated as of February 26,
1998, by and among Patriot American Hospitality, Inc., Wyndham
International, Inc. and NMS Services, Inc. (incorporated by
reference to Exhibit 10.6 to the Companies' Quarterly Report on
Form 10-Q for the quarter ended June 30, 1998) (Nos. 001-09319
and 001-09320).
99.7 Amendment to Agreements, dated as of August 14, 1998, by and
among Patriot American Hospitality, Inc., Wyndham International,
Inc. and NationsBanc Mortgage Capital Corporation (incorporated
by reference to Exhibit 10.7 to the Companies' Quarterly Report
on Form 10-Q for the quarter ended June 30, 1998)
(Nos. 001-09319 and 001-09320).
99.8 Purchase Agreement, dated December 31, 1997, by and among
Patriot American Hospitality, Inc., Patriot American Hospitality
Operating Company, UBS Limited and Union Bank of Switzerland
(incorporated by reference to Exhibit 10.8 to the Companies'
Quarterly Report on Form 10-Q for the quarter ended June 30,
1998) (Nos. 001-09319 and 001-09320).
99.9 Forward Stock Contract, dated as of December 31, 1997, by and
among Patriot American Hospitality, Inc., Patriot American
Hospitality Operating Company, and Union Bank of Switzerland
(incorporated by reference to Exhibit 10.9 to the Companies'
Quarterly Report on Form 10-Q for the quarter ended June 30,
1998) (Nos. 001-09319 and 001-09320).
99.10 Letter Agreement, dated as of August 14, 1998, by and among
Patriot American Hospitality, Inc., Wyndham International,
Inc. and UBS AG, London Branch (incorporated by reference to
Exhibit 10.10 to the Companies' Quarterly Report on Form 10-Q
for the quarter ended June 30, 1998) (Nos. 001-09319 and
001-09320).
99.11 Letter Agreement, dated September 11, 1998, by and among
Patriot American Hospitality, Inc., Wyndham International,
Inc. and UBS AG, London Branch (incorporated by reference to
Exhibit 99.11 to the Companies' joint registration statement on
Form S-3, Nos. 333-58705 and 333-58705-01).
99.12 Letter, dated September 15, 1998, from PaineWebber Financial
Products, Inc. to Patriot American Hospitality, Inc. and
Wyndham International, Inc. (incorporated by reference to
Exhibit 99.12 to the Companies' joint registration statement on
Form S-3, Nos. 333-58705 and 333-58705-01).
99.13 Letter Agreement, dated September 30, 1998, by and among
Patriot American Hospitality, Inc., Wyndham International,
Inc. and PaineWebber Financial Products, Inc. (incorporated by
reference to the same numbered exhibit to the Companies' joint
registration statement on Form S-3, Nos. 333-65339 and
333-65339-01).
99.14* Debt Maturity Schedule of the Companies as of November 5, 1998.
99.15+ Press Release by Patriot American Hospitality, Inc. and
Wyndham International, Inc.
- --------------------
* filed previously
+ filed herewith
5
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be filed on its behalf by the
undersigned thereunto duly authorized.
PATRIOT AMERICAN HOSPITALITY, INC.
Dated: November 10, 1998 By: /s/ Lawrence S. Jones
-------------------------------------
Name: Lawrence S. Jones
Title: Executive Vice President and Treasurer
WYNDHAM INTERNATIONAL, INC.
By: /s/ Lawrence S. Jones
-------------------------------------
Name: Lawrence S. Jones
Title: Executive Vice President and Treasurer
<PAGE>
Exhibit 99.15
MEDIA INQUIRIES: ANALYST INQUIRIES:
Suzanne Cottraux Paul Keung
V.P. of Corp. Comm. and Public Affairs V.P. of Finance, Investor Relations
(214) 863-1258 (214) 863-1265
PATRIOT AMERICAN HOSPITALITY, INC. AND WYNDHAM
INTERNATIONAL, INC.
ANNOUNCE THIRD QUARTER RESULTS
-- FFO rose 89%, total revenue increases 640% and EBITDA jumps 228%
Dallas, TX -November 9, 1998 - Patriot American Hospitality, Inc. and Wyndham
International, Inc. (NYSE: PAH), whose shares are paired and trade as a single
unit, today reported for the third quarter ended September 30, 1998, combined
funds from operations (FFO) totaling $58.1 million, up 89% from $30.7 million in
last year's third quarter. On a diluted per share basis, third quarter 1998 FFO
totaled 34 cents per share on 172.7 million shares outstanding, compared to 43
cents per share on 72.1 million shares outstanding, for the comparable period
last year. Third quarter 1998 earnings before interest, taxes, depreciation and
amortization (EBITDA) reached $143.9 million, a 228% increase over the $43.9
million for the 1997 third quarter.
Total revenue for the third quarter increased 640%, reaching $603.9 million
from $81.6 million in the third quarter of 1997. The increase mainly was
attributable to several strategic acquisitions completed since last year,
including Grand Heritage Hotels, Gencom American Hospitality, WHG Resorts &
Casinos, Wyndham Hotel Corporation, Arcadian International, Summerfield Hotel
Corporation and Interstate Hotels Company.
For the nine months ended September 30, 1998, total revenue grew by 822% to
reach $1.4 billion compared to $154.8 million reported for the 1997 nine-month
period. Funds from operations (FFO) totaled $221.9 million, or $1.52 per share
(diluted), for this year's nine-month period, a 184% increase over the $78.1
million, or $1.31 per share (diluted), reported last year. EBITDA for the 1998
nine-month period totaled $404.7 million versus $108.4 million reported for the
comparable period in 1997.
As required by Generally Accepted Accounting Principles (GAAP), for the third
quarter, the Companies reported a combined net loss of $59.4 million, or $1.09
per share (diluted) after preferred stock dividends of $2.7 million and
adjustment for equity forwards of $95.1 million. The combined net loss for the
period includes a $3.9 million write-off of the Companies' cost to terminate
certain license agreements as well as a $1.3 million extraordinary item related
to debt financing costs. In addition, the Company took a write-off of $49.2
million related to settlement of a treasury lock transaction. Generally Accepted
Accounting Principles (GAAP) require that the non-recurring costs caused by the
third-quarter termination of license agreements be written off by a charge to
<PAGE>
operations. The Companies' third-quarter EBITDA excluded the extraordinary item,
termination of license agreements and treasury lock settlement; in addition,
these items had no impact on FFO.
According to Paul A. Nussbaum chairman and chief executive officer of Patriot
American, "While many of our accomplishments this quarter related to
integration, property conversions, operating improvements and broadened
visibility for our core brands have been greatly diminished by significant world
events, including a global credit crunch that has crippled the world's debt
markets and temporarily delayed certain of our debt transactions planned for the
third and fourth quarters, we have remained and will continue to be focused on
our industry-leading operational excellence. Building a global company that can
survive the inevitable real estate and lodging cycles, as well as the inherently
dynamic nature of Wall Street, will continue to be our foremost priority, and I
believe that in this year's third quarter, we made significant progress toward
that end. Having endured hurricanes, floods and other severe weather, as well as
experiencing the normal and predictable, third-quarter contraction that reflects
the seasonality of our business, we still posted respectable gains in revenues
per available room (RevPAR) of 5.1 %...well ahead of the industry average for
upscale hotels of 2.5%. Finally, while this has been the most challenging
quarter in our company's history, we realized a substantial increase of 89% in
funds from operations over last year's comparable period; however, due to income
recognition issues related to certain management agreements, we reported FFO per
share of 34 cents, rather than the 40 cents we expected to announce, in the
third quarter. Assuming acceptable resolution of these issues and given the
excellent results submitted for the month of October, we expect to reach
consensus FFO per share estimates, in aggregate, for the second half of 1998. In
total, while this quarter has not been our most successful due to the delay of
certain transactions we expected to occur in the third quarter, we remain
convinced that we are building a powerhouse company for the long term."
Third-Quarter Performance: Owned Portfolio Achieves 5.1% RevPAR growth; Wyndham
Comparable Portfolio Reports 4.8% RevPAR growth. Third-quarter 1998 operating
performance across the Companies' owned portfolio improved over the year-ago
period, as reflected in a 5.1 % increase in revenue per available room (RevPAR),
a 6.6 % increase in average daily rate (ADR), and an improvement of 4.1% in
gross operating profit margin (GOP margin). Gross operating profit per room for
the quarter increased 10.3 % to $47.54 from $43.10 last year. Occupancy
contracted by 1.5%, from 74.9 % last year to 73.8 % in this year's third
quarter. Third-quarter operating performance data have been adjusted to exclude
the Company's 15 Gulf Coast and Caribbean hotel and resort properties
representing more than 40,000 room nights impacted by seasonal hurricanes and
other severe weather during the reporting period.
Across Wyndham's comparable branded portfolio of owned and managed hotels
(properties in the portfolio for one full common fiscal quarter in both periods
presented), third-quarter operating performance improved over the 1997 third
quarter, as reflected in a 4.8 % increase in RevPAR, a 7.2 % increase in ADR,
and improvements of 6.6% in gross operating profit (GOP) margin and 10.3% in GOP
per available room.
2
<PAGE>
<TABLE>
<CAPTION>
Companies' Owned Portfolio Wyndham-Branded Comparable Portfolio
----------------------------------------- ---------------------------------------
Three Three % Three Three %
months months Change months months Change
ended ended ended ended
September30 September 30 September September 30
1998 1997 30 1998 1997
- --------------------------- ------------- ------------- ----------- ------------- ------------- ------------
<S> <C> <C> <C> <C> <C> <C>
RevPAR $76.71 $72.98 5.1% $72.58 $69.26 4.8%
ADR $103.92 $97.49 6.6% $100.83 $94.08 7.2%
Occupancy 73.8% 74.9% (1.5%) 72.0% 73.6% (2.2%)
GOP margin 37.9% 36.4% 4.1% 35.4% 33.2% 6.6%
GOP per room $47.54 $43.10 10.3% $38.48 $34.88 10.3%
</TABLE>
(See financial table attached for category explanation.)
The Wyndham-branded comparable portfolio was led by strong growth in the Resorts
division, which posted a 22.9 % increase in RevPAR. Wyndham's new pan-European
proprietary brand, Malmaison, achieved a 15.2% increase in RevPAR for the
quarter, with the Company's 11 former Arcadian properties, also located
throughout the United Kingdom, reporting an impressive 9.3% increase. The Garden
division also experienced solid performance, with a 6.7% RevPAR increase driven
by improved results at hotels added in the past 18 months.
For the nine months ended September 30, 1998, the Companies' owned portfolio
achieved significant operational improvements over the year-ago period, as
reflected in a 6.9 % increase in RevPAR, a 6.3 % increase in average daily rate
(ADR), and improvements in occupancy. Gross operating profit per room for the
nine-month period increased 11.1 % to $48.43 from $43.59 last year, as GOP
margins rose to 37.8% from 36.8%.
Similarly, operating performance across Wyndham's comparable branded portfolio
of owned and managed hotels for the nine-month period improved over last year,
as reflected in a 9.1 % increase in RevPAR, a 7.8 % increase in ADR, and a 1.1%
improvement in occupancy. Many of Patriot American's owned properties which were
converted to the Wyndham brand in last year's fourth quarter, and earlier this
year, reported double-digit RevPAR increases, including the Wyndham Resort &
Spa, Ft. Lauderdale, with an 18.3 % increase; the Wyndham Peachtree Conference
Center, with a 24.5% increase; and, the Union Station, a Wyndham Grand Heritage
Hotel, with a 14.3% increase. These recently converted Wyndham Hotels are not
included in the comparable branded portfolio figures.
According to James D. Carreker, chairman and chief executive officer of Wyndham
International, "Overall, we are pleased with our operational performance this
quarter and attribute the significant RevPAR increases of many of our converted
properties to the strength of our dramatically growing brand. With a larger
portfolio of Wyndham-branded properties comes our ability to realize the
benefits of exponentially larger marketing dollars spent to capture a greater
percentage of corporate, convention and business travelers, whose needs we can
accommodate through our constellation of conference properties," he said. "We
also are extremely proud of the performance of our European properties that we
acquired earlier this year as part of the Arcadian International transaction;
the 11 Arcadian properties which we expect to re-brand next
3
<PAGE>
year collectively achieved an impressive RevPAR increase of 9.3%, with the
Malmaison properties reporting a 15.2% increase. We look forward to achieving
even greater improvements once these properties are added to our central
reservations system."
Mr. Carreker also highlighted the impressive, and several-quarters-sustained,
RevPAR growth in the Company's comparable portfolio of Wyndham Resorts, which
totaled 22.9% for the third quarter. This continued improvement is attributable
to strategic efforts made last year to adjust pricing and redirect the sales
effort to target travelers from South America and Europe, who now comprise the
greatest percentage of summer visitors to the Company's Caribbean destinations.
Mr. Carreker further suggested that the Company's targeted marketing programs
will be further enhanced with the marketing of the newly added Arcadian
portfolio, which the Company expects will increase volume for both European and
Caribbean destinations.
The Company experienced moderate weaknesses in its recently re-branded Wyndham
Grand Heritage domestic portfolio, which collectively reported a RevPAR decrease
of 0.9% for the third quarter. These nine properties were rebranded as Wyndham
Grand Heritage hotels during the second quarter, and have only experienced one
quarter during which they have been represented on the Company's central
reservations system. According to Les Bentley, president of Wyndham Hotels and
Resorts, "We are confident that the addition of these historically significant,
well-located properties to the Wyndham brand will positively impact future
operating statistics while enhancing the full complement of branded products
we're offering our target consumer: the upscale business traveler. Each of these
properties enjoyed a significant increase in reservations due to representation
on our central reservations system, and we expect that as we complete necessary
renovations to these properties and begin aggressively booking group business,
that we will quickly experience a dramatic increase in rate and occupancy."
<TABLE>
<CAPTION>
Companies' Owned Portfolio Wyndham-Branded Comparable Portfolio
--------------------------------------- ----------------------------------------
Nine months Nine months % Nine months Nine months %
ended ended Change ended ended Change
September 30 September 30 September 30 September 30
1998 1997 1998 1997
- --------------------------- ------------- ------------- ----------- ------------- ------------- ------------
<S> <C> <C> <C> <C> <C> <C>
RevPAR $79.84 $74.71 6.9% $76.48 $70.08 9.1%
ADR $108.36 $101.98 6.3% $106.49 $98.76 7.8%
Occupancy 73.7% 73.3% 0.5% 71.8% 71.0% 1.1%
GOP margin 37.8% 36.8% 2.7% 35.7% 33.4% 6.9%
GOP per room $48.43 $43.59 11.1% $43.57 $37.24 17.0%
- --------------------------- ------------- ------------- ----------- ------------- ------------- ------------
</TABLE>
(See financial table attached for category explanation.)
Completed Renovations, Conversions and Future Additions.
Investments in renovations, including conversions to Wyndham-branded hotels as
well as general property maintenance and improvements efforts, during the third
quarter totaled approximately $52.1 million, involving 142 hotels and resorts
nationwide. For the nine-month period, Patriot American has invested
approximately $133.7 million in renovations, including conversions and general
maintenance and improvement efforts involving 156 hotel and resort properties
throughout the Company's owned and managed portfolio.
4
<PAGE>
Specific to conversions to the Wyndham brand, Patriot American invested $2.72
million during the third quarter to convert five owned and two managed hotels to
the Wyndham brand, respectively: the 419-room Sheraton Tampa; the 394-room
Sheraton Gateway Miami; the 647-room Westin Miami Beach; the 648-room Westin
Washington D.C.; the 390-room Sheraton Inn in Richmond, Virginia; and, the
893-room Holiday Inn in Wilmington, Delaware to Wyndham Hotels. The Company
expects to convert another nine of its owned properties to the Wyndham flag in
this year's fourth quarter, including four Marriott hotels acquired as part of
the Interstate Hotels Company transaction.
As of September 30, 1998, Patriot's total portfolio was comprised of 486 hotels
and resorts, 184 of which are owned, 171 of which are managed, 122 of which are
leased and nine of which are franchised. Of the 184 owned hotels and resorts,
111 are Wyndham-branded properties.
Integration Update
During the third quarter, Patriot American realized significant cost savings as
the result of successful integration of the hospitality management companies
acquired in last year's fourth quarter and through this fiscal year. On an
annualized basis, Patriot American has benefited from increased buying power
relevant to insuring its owned properties; to date, the company has reduced its
insurance costs by $10 million in 1998 and expects to save approximately $13
million in 1999. Once the properties acquired from Interstate and Arcadian are
included in the new plan, the Company expects to enjoy further savings.
Similarly, Patriot American/Wyndham International have realized annualized
savings of approximately $10 million by selecting one telecommunications carrier
to serve the long-distance needs of the entire company and its properties.
Similarly, the Company expects to consolidate the purchasing and management of
its energy needs with estimated savings projected to be $5 million next year.
The Company also is pursuing preferred vendor programs designed to reduce
operating expenses at the property level and expects to achieve savings in
excess of $4 million in 1999. Finally, the Company signed a contract in October
with Sysco Foods for its Wyndham-branded properties that is expected to result
in annualized savings of approximately $4 million; as the contract is amended to
include all of the owned, managed, leased and franchised properties in Patriot
American's portfolio, annualized savings are expected to reach $6 million to $7
million.
Internal Growth Priorities in 1999
According to Mr. Nussbaum, "Management is confident that our continued focus on
internal growth is in the best long-term interests of the Company, its
proprietary brands and our shareholders. Beginning in the fourth quarter of this
year and continuing throughout 1999, we expect to accelerate our efforts to sign
branded management services contracts and franchise agreements as a means of
broadening the distribution of the Wyndham brand, as well as capturing
significant revenue increases without deploying a disproportionate amount of
capital on acquisitions. We also expect to announce an aggressive, multi-branded
franchising program and concurrently, will pursue opportunities to assume
management of previously owned, but not managed hotels.
5
<PAGE>
Third, Patriot American/Wyndham International are committed to achieving even
greater GOP margins by implementing innovative food and beverage programs at the
property level, thereby playing from the Company's strength of achieving greater
food and beverage sales than Wyndham's competitive set. Finally, the Company
will continue to pursue preferred vendor programs to maximize the purchasing
power of the integrated entity.
"As we've said in previous quarters, we are building a global company for the
long term and, as such, we're focused on enjoying continued improvements in the
way we manage our properties, our capital resources, our costs, our people and
the distribution of our brand."
The Companies filed a current report on Form 8-K dated November 9, 1998 which
contains disclosure regarding various matters, including, without limitation,
the Companies' forward equity contracts.
About Patriot American Hospitality, Inc. and Wyndham International, Inc. Based
in Dallas, Texas, Patriot American Hospitality, Inc. (NYSE: PAH) is currently
the nation's second-largest hotel real estate investment trust (REIT) with a
portfolio comprised of 486 owned, managed, leased or franchised hotels and
resorts with more than 105,000 rooms. Its paired operating company, Wyndham
International, Inc., comprised of the Grand Bay Hotels & Resorts Division, the
Wyndham Hotel Group, the All-Suites Division and PAH Management Services,
leases, manages and franchises primarily upscale and luxury hotel and resort
properties represented by its proprietary brands and provides management
services for third-party owned hotels and resorts.
This press release contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. The Company's actual results could differ materially from
those set forth in the forward-looking statements. Certain factors that might
cause such a difference include competition for guests from other hotels,
dependence upon business and commercial travelers and tourism, the seasonality
of the hotel industry, and availability of equity or debt financing at terms and
conditions favorable to the Companies and other factors detailed in the
Companies Quarterly Report on Form 10-Q dated June 30, 1998, Current Report on
Form 8-K dated November 9, 1998, Registration Statement on Form S-3 (File No.
333-58705) and Registration Statement on Form S-3 (File No. 333-65339).
Tables to Follow...
6
<PAGE>
Patriot American Hospitality/Wyndham International, Inc.
Hotel Statistics
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
1998 1997 % Change 1998 1997 % Change
-------- -------- ---- -------- -------- ----
Owned and Leased Portfolio (1) (214 hotels)
<S> <C> <C> <C> <C> <C> <C>
Average daily rate $ 103.92 $ 97.49 6.6% $ 108.36 $ 101.98 6.3%
Occupancy 73.8% 74.9% (1.5)% 73.7% 73.3% 0.5%
RevPAR $ 76.71 $ 72.98 5.1% $ 79.84 $ 74.71 6.9%
Comparable Managed Portfolio (1)(2)
Grand Bay Hotels (4 hotels)
Average daily rate $ 259.87 $ 226.25 14.9% $ 305.71 $ 273.41 11.8%
Occupancy 61.3% 71.4% (14.1)% 68.7% 71.6% (4.0)%
RevPAR $ 159.21 $ 161.44 (1.4)% $ 209.98 $ 195.68 7.3%
Wyndham Hotels (18 hotels)
Average daily rate $ 105.91 $ 99.96 6.0% $ 112.50 $ 105.16 7.0%
Occupancy 70.0% 73.7% (5.1) 71.7% 72.8% (1.6)%
RevPAR $ 74.10 $ 73.70 .5% $ 80.65 $ 76.58 5.3%
Wyndham Grand Heritage (6 hotels)
Average daily rate $ 120.29 $ 117.35 2.5% $ 120.21 $ 115.16 4.4%
Occupancy 71.1% 73.5% (3.3)% 65.1% 64.2% 1.5%
RevPAR $ 85.47 $ 86.21 (0.9)% $ 78.26 $ 73.87 5.9%
Wyndham Garden Hotels (46 hotels)
Average daily rate $ 91.83 $ 84.13 9.2% $ 92.36 $ 84.28 9.6%
Occupancy 74.4% 76.1% (2.2)% 73.1% 72.8% 0.5%
RevPAR $ 68.33 $ 64.02 6.7% $ 67.55 $ 61.32 10.2%
Wyndham Resorts (4 hotels)
Average daily rate $ 116.95 $ 111.26 5.1% $ 142.98 $ 137.01 4.4%
Occupancy 68.7% 58.8% 16.9% 71.4% 59.1% 20.9%
RevPAR $ 80.37 $ 65.41 22.9% $ 102.11 $ 80.96 26.1%
Total Wyndham Branded (74 hotels)
Comparable Portfolio
Average daily rate $ 100.83 $ 94.08 7.2% $ 106.49 $ 98.76 7.8%
Occupancy 72.0% 73.6% (2.2)% 71.8% 71.0% 1.1%
RevPAR $ 72.58 $ 69.26 4.8% $ 76.48 $ 70.08 9.1%
Grand Heritage/Arcadian Hotels (17 hotels)
Domestic and International
Average daily rate $ 121.55 $ 113.54 7.1% $ 115.67 $ 109.78 5.4%
Occupancy 66.0% 65.1% 1.4% 62.8% 60.4% 4.0%
RevPAR $ 80.24 $ 73.88 8.6% $ 72.65 $ 66.29 9.6%
Non-Proprietary Branded Hotels (57 hotels)
Average daily rate $ 99.45 $ 93.01 6.9% $ 95.28 $ 89.25 6.8%
Occupancy 74.0% 74.3% (0.4)% 72.6% 70.7% 2.7%
RevPAR $ 73.60 $ 69.12 6.5% $ 69.16 $ 63.07 9.7%
</TABLE>
(1) Excludes owned hotels & resorts impacted by hurricanes, other inclement
weather
(2) The Comparable Hotel Group includes hotels that were in the portfolio
for one full common fiscal quarter in both periods presented.
7
<PAGE>
PATRIOT AMERICAN HOSPITALITY, INC. AND WYNDHAM INTERNATIONAL, INC.
COMBINED CONDENSED STATEMENT OF INCOME
QUARTER AND NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
(in thousands, except per share data)
(Unaudited)
<TABLE>
<CAPTION>
Quarter Ended Nine Months Ended
September 30, September 30,
----------------------- -----------------------
1998 1997 1998 1997
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Revenues:
Hotel revenues $ 554,331 $ 30,271 $1,266,985 $ 30,271
Participating lease revenues 8,932 35,098 49,627 107,084
Management fees and service fee income 24,358 1,577 61,574 1,577
Racecourse and land lease revenues 9,955 10,861 34,945 10,861
Interest and other income 6,274 3,831 12,949 4,963
---------- ---------- ---------- ----------
Total revenues 603,850 81,638 1,426,080 154,756
---------- ---------- ---------- ----------
Expenses:
Hotel expenses 417,814 22,100 924,471 29,749
Racing facility operations 8,810 9,213 29,667 9,213
General and administrative 26,572 6,842 64,558 11,923
Interest expense 82,739 13,933 172,191 31,261
---------- ---------- ---------- ----------
Total operating costs and expenses 535,935 52,088 1,190,887 82,146
---------- ---------- ---------- ----------
Excess revenues over direct expenses 67,915 29,550 235,193 72,610
Costs of acquiring leaseholds and license agreements (3,939) (43,820) (61,000) (43,820)
Treasury lock settlement (49,225) -- (49,225) --
Depreciation and amortization (68,236) (13,792 (155,165) (31,798)
Equity in earnings from unconsolidated subsidiaries 1,888 1,395 7,375 4,488
Minority in Operating Partnerships 4,722 3,225 6,169 (1,309)
Minority interest in other consolidated subsidiaries (4,500) (934) (7,514) (1,381)
---------- ---------- ---------- ----------
Income (loss) before taxes and extraordinary
item (51,375) (24,376) (24,167) (1,210)
Provision for income taxes (6,783) (94) (11,273) (94)
---------- ---------- ---------- ----------
Income (loss) before extraordinary item (58,158) (24,470) (35,440) (1,304)
Extraordinary item net of applicable taxes (1,257) (2,534) (31,817) (2,534)
---------- ---------- ---------- ----------
Net income (loss) $ (59,415) $ (27,004) $ (67,257) $ (3,838)
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
EBITDA $ 143,925 $ 43,865 $ 404,687 $ 108,441
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Funds from operations ("FFO") $ 58,063 $ 30,680 $ 221,927 $ 78,112
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
FFO per share - basic $ 0.36 $ 0.44 $ 1.63 $ 1.35
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
FFO per share - diluted $ 0.34 $ 0.43 $ 1.52 $ 1.31
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Earnings per share:
Basic
Income before extraordinary item (1) $ (1.08) $ (0.40) $ (1.10) $ (0.03)
Net income $ (1.09) $ (0.44) $ (1.36) $ (0.08)
Diluted
Income before extraordinary item (1) $ (1.08) $ (0.40) $ (1.10) $ (0.03)
Net income $ (1.09) $ (0.44) $ (1.36) (0.08)
Weighted average number of common shares and common
share equivalents outstanding:
Basic 144,451 61,647 122,391 49,454
Diluted 144,451 61,647 122,391 49,454
Basic shares and OP units 160,005 70,091 136,199 57,980
Diluted shares and OP Units 172,700 72,082 145,766 59,616
</TABLE>
(1) After preferred stock dividends and adjustment for equity forwards.
