Interstate Hotels & Resorts Reports Strong Third-Quarter 2005 Results; Exceeds Guidance for Third Consecutive Quarter, Raises 2005 Earnings Guidance.

ARLINGTON, Va. -- Interstate Hotels & Resorts (NYSE: IHR), the nation's largest independent hotel management company, today reported results of operations for the third quarter ended September 30, 2005. The company exceeded its earnings guidance of August 9 and raised its 2005 full-year earnings guidance for the third time this year.

For the 2005 third quarter, net income was $5.4 million, or $0.17 per diluted share, compared to a net loss of $(0.3) million, or $(0.01) per diluted share, in the third quarter 2004. The statement of operations includes the following non-recurring items and special charges: $4.3 million gain related to the extinguishment of a non-recourse promissory note; $2.6 million gain on the sale of the Pittsburgh Airport Residence Inn by Marriott; and $(1.0) million loss from asset impairments and other write-offs, primarily related to the termination of three management contracts as a result of the hotels being sold by MeriStar Hospitality.

Adjusted earnings before interest, taxes, depreciation and amortization (Adjusted EBITDA), for the third quarter 2005 was $7.8 million, up 32.5 percent from $5.9 million in the 2004 third quarter. Adjusted Net Income for the third quarter 2005 was $2.4 million, or $0.08 per dilut...

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