FFO for the nine months ended Sept. 30, 2001 was $44.3 million or $1.61 per share compared to $50.7 million or $1.87 per share, a 12.6% drop.
EBITDA decreased 22.9% from $25.8 million to $19.9 million for the third quarter and declined 3.9% for the nine months. Net income was $5.77 million, compared to $10.32 million in third quarter 2000, a 44.1% decrease.
With the caveat that it’s impossible to predict performance in this volatile economy, RFS announced that for planning purposes, it is assuming a fourth quarter 2001 FFO per share in the range of 10 cents to 25 cents.
Because of this expected reduction in business activity, the Board of Directors decided reduce the fourth quarter 2001 dividend 74%, from 38 ½ cents per share to 10 cents per share.
"Without question, the period since Sept. 11 has been the most difficult operating environment for hotels since World War II," Robert Solmson, RFS chairman and CEO, says in a prepared statement. "The duration and depth of this cycle will depend more on unpredictable geopolitical events than on traditional economic developments."
Solmson says the company will continue to monitor cash flow by reducing operating costs, deferring non-essential capital expenditure and continuing to pay down long-term debt.
RFS owns 58 hotels with about 8,400 rooms located in 24 states. It receives about 44% of its EBITDA from full service hotels, 32% from extended stay hotels and 24% from limited service hotels.
Brands include Sheraton, Residence Inn by Marriott, Hilton, Doubletree, Holiday Inn, Hampton Inn and Homewood Suites by Hilton.
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