1997 Annual Report - Four Seasons Hotels and Resorts

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(continued)15. S E G M E N T E D I N F O R M A T I O N:(a) Total consolidated revenues:1997 1996Hotel Hotel Total Hotel Hotel TotalManagement Ownership consolidated Management Ownership consolidatedrevenues revenues revenues revenues revenues revenuesUnited States $ 67,358 $ 101,516 $ 168,874 $ 53,807 $ 17,606 $ 71,413Canada 5,577 33,792 39,369 4,622 — 4,622United Kingdom and Europe 5,700 — 5,700 4,276 33 4,309Asia/Pacific 27,361 5,991 33,352 32,024 9,174 41,198105,996 141,299 247,295 94,729 26,813 121,542Less intersegment revenues (7,265) — (7,265) (831) — (831)$ 98,731 $ 141,299 $ 240,030 $ 93,898 $ 26,813 $ 120,711(b) Earnings from operations:General and administrative expenses of the Hotel Management Operations have been allocated to specific geographicsegments based on the percentage of revenues earned by the Hotel Management Operations in those geographic segments.1997 1996EarningsEarnings (loss)before other Other Earnings (loss) before other Other Earnings (loss)operating operating from operating operating fromitems items operations items items operationsUnited States $ 49,820 $ (6,508) $ 43,312 $ 32,579 $ (5,169) $ 27,410Canada 3,996 (12,899) (8,903) (1,094) (328) (1,422)United Kingdom and Europe 2,583 (528) 2,055 1,675 (891) 784Asia/Pacific 22,317 (7,475) 14,842 31,184 (7,363) 23,821$ 78,716 $ (27,410) $ 51,306 $ 64,344 $ (13,751) $ 50,593(c)Total assets:1997 1996United States $ 195,081 $ 158,225Canada 66,546 66,550United Kingdom and Europe 77,745 39,593Asia/Pacific 113,840 120,919$ 453,212 $ 385,287As a result of the significant currency devaluations and economic downturn in parts of Asia, the Corporation hasreassessed the estimated recoverable amounts of its assets located in, or related to, Asia. These assets consist primarily ofthe Corporation’s investment in The Regent Hong Kong and its investments in management contracts and trademarks andtrade names related to Asia. Based on these revised estimates, the Corporation believes that these assets are recoverable fromfuture cash flows. However, these estimates are based on projections regarding future revenues of hotels located in Asia,72Four Seasons Hotels Inc.
which, in turn, are based on assumptions regarding future economic conditions in Asia. Should the underlying assumptionschange, the estimated recoverable amounts could change by a material amount.16. S U B S E Q U E N T E V E N T:Effective January 1, 1998, the Corporation and an affiliate of Kingdom acquired the 50% ownership interest in theFour Seasons Hotel London that the affiliate did not already own. The Corporation acquired a 12.5% ownership interestin the hotel and the affiliate increased its ownership interest in the hotel from 50% (which it acquired from the Corporationin 1995 (note 4(a))) to 87.5%. To facilitate the acquisition, the Corporation invested £16.3 million, which includes anacquisition loan made to the affiliate. The loan bears interest at 10% per annum, payable out of the hotel’s cash flow, andis secured by the affiliate’s newly acquired interest in the hotel.73Four Seasons Hotels Inc.
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FOUR SEASONS HOTELS AND RESORTS FOU
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FINANCIAL HIGHLIGHTS(In millions of
Page 5 and 6:
Growth through selective diversific
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FOUR SEASONS MANAGEMENT COMMITTEE R
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Barbara TalbottSenior Vice Presiden
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18212317222019252428162627673548151
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ANNUAL INFORMATION FORMB U S I N E
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Superior Hotel Operating ResultsFou
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comparable data is available, was U
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I N D U S T R YA W A R D SFour Seas
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Properties Managed by Four Seasons
Page 23 and 24: H O T E L M A N A G E M E N T O P E
Page 25 and 26: and its hourly staff varies, based
Page 27 and 28: F I V E-Y E A RR E V I E W(In milli
Page 29 and 30: S U M M A R Y H O T E L O P E R A T
Page 31 and 32: December 31, 1996 to $115 million a
Page 33 and 34: Hotel Ownership OperationsHotel own
Page 35 and 36: Minority Hotel Ownership InterestsA
Page 37 and 38: primarily by the termination during
Page 39 and 40: Income Tax ExpenseThe Corporation
Page 41 and 42: L I Q U I D I T YFour Seasons gener
Page 43 and 44: During 1997, the Corporation invest
Page 45 and 46: conditions of an agreement could re
Page 47 and 48: Investments and AdvancesThe Corpora
Page 49 and 50: investment in The Regent Hong Kong
Page 51 and 52: Edmond M. Creed, Murray B. Koffler
Page 53 and 54: C O R P O R A T EC H A R TThe follo
Page 55 and 56: CONSOLIDATED STATEMENTS OF OPERATIO
Page 57 and 58: CONSOLIDATED STATEMENTS OF CASH PRO
Page 59 and 60: NOTES TO CONSOLIDATED FINANCIAL STA
Page 61 and 62: The recoverability of the unamortiz
Page 63 and 64: 4. L O N G- T E R M R E C E I V A B
Page 65 and 66: Current assets (including cash of $
Page 67 and 68: 10. L O N G- T E R M D E B T:1997 1
Page 69 and 70: UnlimitedUnlimitedUnlimitedThe VMVS
Page 71 and 72: 13. C O M M I T M E N T S A N D C O
Page 73: 14. F A I R V A L U E O F F I N A N
Page 77 and 78: of action that have been taken. The
Page 79 and 80: CORPORATE DIRECTORYD IRECTORSEdmond
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