1999 Annual Report - Four Seasons Hotels and Resorts

HOTELS AND RESORTS FOUR SEASONS HOTELS AND RESORTS FOUR SEASONS HOTELS AND RESORTS FOUR SEASONS HOTELS AND RESORTS FOUR SEASONS HOTELS AND RESORTS
Annual Information Form
(continued)
(5) Includes 30 cooperative suites leased from individual owners and operated as hotel rooms.
(6) Leasehold interest.
(7) Initial term of lease expires in January 2002. The Corporation renewed the lease for a further 10 years on the same terms and conditions. The Corporation has
the option to renew for two further 10 year terms after the expiry of this initial extension. (See discussion in Management’s Discussion and Analysis on page 34.)
(8) As at the date hereof, the resort has 100 rooms in operation with 40 additional rooms under construction.
(9) It is anticipated that Four Seasons will reduce its interest in the hotel to less than 20%.
(10) Four Seasons has a preferred profits interest of approximately US$10.6 million subordinated debt from the hotel which may be increased to reflect any
construction cost overruns required to complete the hotel.
(11) The Four Seasons Resort Club Scottsdale at Troon North may have up to 126 units at full build out.
(12) It is anticipated that the Corporation will reduce its equity interest through a sale to an equity partner.
(13) Initial term of lease expired in January 2000. The Corporation renewed the lease for a further 20 years on the same terms and conditions. (See discussion in
Management’s Discussion and Analysis on page 34.)
(14) The management agreement was to have expired in December 2005. Four Seasons has entered into an agreement with the owner to extend the management
agreement until December 2012. Since the execution of this agreement, the owner has indicated that such agreement must have shareholder approval in
order to be effective. Four Seasons believes that the extension of this agreement is now effective. In any event, the Corporation has been advised by the owner
that shareholder approval is being sought and the Corporation will take whatever actions are available to it to ensure management of the hotel remains with
Four Seasons.
(15) Initial terms of operating lease and management agreement expire in December 2000. There was an option to extend the lease agreement for an additional
10 years and the lease has been extended. The Corporation owns a 25% interest in the corporation that owns the operating lease for the hotel. However, the
owner of the 75% interest in the lessee corporation is a company controlled by the landlord. While the lessee corporation and not Four Seasons controls the
negotiation of a new management agreement, the Corporation intends to take whatever actions are available to it to ensure management of the hotel remains
with Four Seasons.
(16) Management agreement expires in December 2000. However, the annual base management fee of US$1.9 million from the hotel ceased in 1998.
The Corporation is currently discussing a possible extension of the management agreement.
(17) In addition to the leasehold interest, Four Seasons has a 26% investment in the company that owns and has constructed the multi-use project in Berlin,
as well as a 26% interest in the company that owns the freehold interest in the hotel.
Four Seasons currently has 21 hotels and resorts under construction or development which are to be operated under
the Four Seasons name. In addition, a Residence Club is under development adjacent to the Four Seasons Resort in
Punta Mita, Mexico. The following table sets forth certain information relating to these properties:
Expected
Approximate Scheduled Capital Commitment
Hotel/Resort/Residence Club and Location (1) Number of Rooms Opening (millions)
Four Seasons Hotel Alexandria, Egypt (2) 120 2004 —
Four Seasons Hotel Amman, Jordan 197 2001 US$5.5
Four Seasons Hotel Beirut, Lebanon 287 2003 US$5
Four Seasons Resort Bodrum, Turkey (2) 139 2003 US$8.2
Four Seasons Hotel Budapest, Hungary 170 2002 (=10
Four Seasons Hotel First Residence Cairo, Egypt 273 2000 —
Four Seasons Hotel Nile Plaza Cairo, Egypt (2) 374 2002 US$5
F our Seasons Hotels Inc.
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