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Orient-Express Hotels Reports Fourth Quarter 2011 Results Highlights

HAMILTON, Bermuda, February 23, 2012 /PRNewswire/ --

        
        - Fourth quarter total revenue, excluding real estate, up 10% to $135.9
          million
        - Fourth quarter revenue from owned hotels up 9% to $107.6 million
        - Same store revenue per available room ("RevPAR") for the quarter up 11% in US
          dollars, up 15% in local currency
        - Adjusted EBITDA before real estate for the fourth quarter up 31% to $21.2
          million
        - Fourth quarter adjusted net loss from continuing operations $9.1 million
          ($0.09 per common share) compared to a loss of $15.3 million ($0.16 per common share)
          in the fourth quarter of 2010
        - Sold excess development rights in New York, recording a gain of $16.0 million,
          and repaid associated debt of $4.5 million
        - Completed the sale of Keswick Hall, Virginia, in January 2012 for $22.0
          million and repaid associated debt of $10.0 million

Orient-Express Hotels Ltd. (NYSE: OEH, http://www.orient-express.com), owners or part-owners and managers of 49 luxury hotel, restaurant, tourist train and river cruise properties operating in 24 countries, today announced its results for the fourth quarter ended December 31, 2011.

"The fourth quarter provided a solid close to a year of good financial and operating progress for Orient-Express. In 2011, many of our properties achieved their all time best annual results," said Bob Lovejoy, Chairman and Interim Chief Executive Officer. "In the fourth quarter we continued to grow our top line, with total revenue before real estate increasing 10% compared to the fourth quarter of 2010. The fourth quarter also marked the eighth straight quarter of growth in revenue and adjusted EBITDA (both excluding real estate), which increased by 10% and 31%, respectively, over the same quarter of the previous year.

"During the course of 2011, we continued to strengthen our balance sheet and were pleased to achieve by the end of the year our interim goal of a net debt to adjusted EBITDA (excluding real estate) ratio of less than 5 times. Since the end of the quarter, this strengthening has continued through our program of selected disposal of non-core properties. In January 2012, we completed the sale of Keswick Hall, Virginia, for $22.0 million and we repaid $10.0 million of associated debt.

"As we look ahead to 2012, we are encouraged by our booking patterns, which indicate continued healthy demand in the luxury travel sector. Total revenue from owned hotels achieved and on the books for 2012 is currently about 8% above the comparable total at the same time last year."

Fourth Quarter 2011 Earnings Summary

Revenue, excluding real estate, was $135.9 million in the fourth quarter of 2011, up $12.2 million or 10% from the fourth quarter of 2010.

Revenue from owned hotels for the fourth quarter was $107.6 million, up $8.5 million or 9% from the fourth quarter of 2010. On a same store basis, owned hotels RevPAR was up 11% in US dollars and up 15% in local currency.

Trains & cruises revenue in the fourth quarter was $20.6 million compared to $17.7 million in the fourth quarter of 2010, an increase of 16%.

Adjusted EBITDA before real estate was $21.2 million for the fourth quarter, up 31% compared to $16.1 million in the prior year. The principal increases were at Charleston Place, South Carolina (up $1.4 million compared to the same period in the prior year), Copacabana Palace Hotel, Rio de Janeiro (up $1.2 million) and share of earnings from Peru hotels (up $1.3 million). Other notable improvements included La Residencia, Mallorca (up $0.7 million), share of earnings from PeruRail (up $0.8 million), Reid's Palace, Madeira (up $0.6 million), Hotel das Cataratas, Iguassu (up $0.6 million), and the Road to Mandalay cruise ship, Irrawaddy River, Myanmar (Burma) (up $0.6 million).

Adjusted net loss from continuing operations for the fourth quarter was $9.1 million ($0.09 per common share), compared with a loss of $15.3 million ($0.16 per common share) in the fourth quarter of 2010. Net loss attributable to Orient-Express Hotels Ltd, after tax-effected impairments of $18.6 million ($0.18 per common share), for the fourth quarter was $28.1 million ($0.27 per common share), compared with a net loss of $26.5 million ($0.27 per common share) in the fourth quarter of 2010.

Company Highlights

In December 2011, following the assignment of purchase and development agreements in April 2011 relating to the proposed New York hotel project, the Company completed the sale of excess development rights of '21' Club to the new developer, recording a gain of $16.0 million. From the gross proceeds, associated debt of the '21' Club of $4.5 million was repaid.

On January 23, 2012, the Company concluded the sale of Keswick Hall, including the adjoining golf course and development land, for gross proceeds of $22.0 million and repaid associated debt of $10.0 million. Additionally, the Company signed a definitive agreement during the fourth quarter of 2011 for the sale of Bora Bora Lagoon Resort for $3.0 million. This transaction is expected to complete during 2012.

During the quarter, the Company completed the refurbishment of 26 rooms and suites on the fifth floor of the main building of the Copacabana Palace Hotel, as well as its Cipriani restaurant. The renovated restaurant now includes a chef's table inside the kitchen, providing an intimate dining experience for six guests. Starting in June 2012, during the hotel's traditional low season, a further 121 rooms and suites in the hotel's main building will be renovated and the lobby area enlarged well in advance of the 2014 football World Cup and 2016 Olympic Games to be held in Brazil.

Also during the quarter, 46 keys at La Samanna, St. Martin, were completely refurbished and reopened in advance of the Caribbean high season. The Company plans to refurbish the main public areas of La Samanna in the third quarter of 2012. Additionally, work began in November to upgrade the historic wing of The Inn at Perry Cabin, Maryland, with 39 rooms scheduled for refurbishment by the end of the first quarter of 2012.

The Company has made two recent executive appointments: Ali Kasikci has been appointed Regional Managing Director for North America, Mexico and the Caribbean and will oversee six properties in the current portfolio and the renovation and reopening of El Encanto, Santa Barbara, California, and Richard M. Levine, Chief Legal Officer, will lead international legal and regulatory matters. Ali was previously General Manager of the Montage Beverley Hills and the Peninsula Beverley Hills. Richard joins the Company from Kerzner International Holdings Limited where he was Executive Vice President, General Counsel, working with the One&Only and Atlantis brands.

Operating Performance

Europe:

In the fourth quarter, revenue from owned hotels was $32.8 million, up $3.1 million or 10% from $29.7 million in the fourth quarter of 2010. Revenue growth at the Italian properties was led by Hotel Cipriani, Venice, where revenue increased by $2.0 million or 46% compared to the same quarter in 2010. Year on year revenue at Reid's Palace increased by $1.0 million or 31%. Same store RevPAR in Europe was up 11% from the prior year in US dollars (up 18% in local currency) driven by an improvement in occupancy to 49% from 40% in the same period in the prior year.

EBITDA for the quarter was $1.6 million compared to an EBITDA loss of $0.3 million in the fourth quarter of 2010. A number of properties contributed to this improvement with year on year EBITDA growth of $0.7 million at La Residencia and $0.6 million at Reid's Palace due to increased group business and stronger demand from the UK, respectively. Additionally, the Company's two hotels in Sicily and Hotel Cipriani achieved year on year EBITDA growth of $0.9 million and $0.5 million, respectively.

North America:

Revenue from owned hotels for the quarter was $26.7 million, up 7% from $25.0 million in the fourth quarter of 2010. This was largely due to strong group and transient business at Charleston Place driving revenue growth in the quarter of $1.6 million or 12%. Same store RevPAR in the region increased by 9% in both US dollars and local currency largely due to a 7% growth in average daily rate ("ADR") over the fourth quarter of 2010. After adjusting for $3.2 million of non-cash fixed asset write-offs related to the refurbishment at La Samanna and $1.2 million for settlement of a VAT claim in Mexico, North American EBITDA was $5.7 million compared to $3.3 million in the fourth quarter of 2010, with the growth largely attributable to Charleston Place.

Rest of World:

Southern Africa:

Fourth quarter revenue was $8.9 million, compared to $9.8 million in the fourth quarter of 2010. Same store RevPAR was down 1% in US dollars (up 20% in local currency). EBITDA was up by $0.6 million or 43% to $2.0 million, compared to $1.4 million in the fourth quarter of 2010, as cost savings and a pick-up in group business offset the rate pressure from new competition.

South America:

Revenue increased by 13% to $27.2 million in the fourth quarter of 2011, from $24.1 million in the fourth quarter of 2010. Same store RevPAR in the region increased by 17% in both US dollars and local currency as a result of an 8% increase in ADR and a five percentage point increase in occupancy compared to the fourth quarter of 2010. EBITDA for the quarter was $7.7 million, compared to $6.0 million in the fourth quarter of last year. A record year at Copacabana Palace Hotel delivered strong revenue and EBITDA growth of $2.1 million or 12% and $1.2 million or 20%, respectively, driven by record occupancy and ADR with strong demand from US travelers. Year on year revenue and EBITDA at Hotel das Cataratas increased by $1.1 million and $0.6 million, respectively, following the major refurbishment completed in November 2010.

Asia-Pacific:

Revenue for the fourth quarter of 2011 was $12.0 million, an increase of $1.4 million or 14% year over year. Same store RevPAR increased by 26% in both US dollars and local currency due to a 18% increase in ADR and a four percentage point increase in occupancy compared to the fourth quarter of 2010. EBITDA was $3.4 million compared to $2.5 million in the fourth quarter of 2010 with growth in all properties. The Company's Asian portfolio performed particularly well, with EBITDA growth of 43% compared to the same quarter of 2010, demonstrating the strong position of the properties and the continued buoyancy of luxury travel interest in the region.

Hotel management & part-ownership interests:

EBITDA for the fourth quarter of 2011 was $1.6 million compared to $0.4 million in the fourth quarter of 2010. The improvement was largely attributable to the Company's share of results from its Peruvian hotels, which have fully recovered from the flooding and landslides in the country in 2010. The quarterly result also included $0.3 million of costs relating to the Company's investment in the management contract business.

Restaurants:

Revenue from '21' Club in the fourth quarter of 2011 was $6.4 million compared to $6.5 million in the same quarter of 2010. EBITDA was $2.0 million compared to $2.2 million in the same quarter of 2010.

Trains & cruises:

Revenue increased by $2.9 million or 16% to $20.6 million in the fourth quarter of 2011 from $17.7 million in the prior year, reflecting increases in all businesses. EBITDA was $6.7 million compared to $5.4 million in the same quarter of 2010, largely due to a $0.8 million increase in share of results from PeruRail, reflecting a full recovery from the 2010 floods and landslides, and a $0.6 million increase from the Road to Mandalay, as Myanmar further opens to the international traveler.

Central overheads:

In the fourth quarter of 2011, central costs were $10.4 million compared with $5.6 million in the prior year period. This increase is attributable to a $2.7 million increase in compensation costs, largely due to bonus accruals related to exceeding the Company's budget, a $0.7 million increase in premises costs following the relocation of the London office, a $0.4 million increase in stock option expenses and a credit in the fourth quarter of 2010 of $0.5 million for recovery of Cipriani litigation costs.

Real estate:

In the fourth quarter of 2011, there was an EBITDA loss of $2.0 million from real estate activities, primarily related to Porto Cupecoy, Sint Maarten, compared with a loss of $0.4 million in the fourth quarter of 2010. Cumulatively, at the end of the quarter, 111 condominium units or 60% of the total had been sold.

Impairment:

The Company recorded a total pre-tax impairment charge for the quarter of $18.9 million. This included fixed asset and goodwill impairments of $7.9 million at Maroma Resort & Spa, Riviera Maya, $5.9 million at Casa de Sierra Nevada, Mexico, $2.8 million at La Residencia, $1.7 million at the Company's two South African properties and $0.6 million from the Company's share of the impairment in its joint venture interest at Las Casitas del Colca, Peru.

Gain on disposal:

The Company recorded a pre-tax gain on disposal of $16.0 million from the sale of excess development rights of '21' Club to the developer of the site behind the restaurant. From the gross proceeds the Company repaid $4.5 million of associated debt.

Depreciation and amortization:

The depreciation and amortization charge for the fourth quarter of 2011 was $11.9 million compared with $11.2 million in the fourth quarter of 2010.

Interest:

The interest charge for the fourth quarter of 2011 was $7.7 million, down $4.0 million from $11.7 million in the prior year quarter. The interest charge for the fourth quarter of 2010 included swap termination costs of $1.9 million and a $1.3 million write-off of deferred financing costs with no comparative charge in the fourth quarter of 2011. Additionally, in the fourth quarter of 2011, $0.9 million of interest was capitalized in relation to the development of El Encanto.

Tax:

The tax charge from continuing operations for the fourth quarter of 2011 was $15.2 million, compared to a charge of $9.8 million in the same quarter in the prior year. The 2011 fourth quarter tax charge included $7.4 million in respect of the gain on disposal of excess development rights of '21' Club with no corresponding charge in the prior year's quarter.

Investment:

The Company invested a total of $16.9 million during the quarter, which included $3.7 million for the ongoing restoration of El Encanto, $4.2 million at La Samanna and $1.3 million at Copacabana Palace Hotel for the planned refurbishment of rooms and public areas, $0.8 million at Grand Hotel Europe, St Petersburg for refurbishment of the main bar and conference areas, and the balance for routine capital expenditures.

Balance Sheet

At December 31, 2011, the Company had long-term debt (including the current portion and debt of consolidated variable interest entities) of $634.4 million and cash balances of $103.3 million (including $13.2 million of restricted cash), resulting in total net debt of $531.1 million compared with total net debt of $529.9 million at the end of the third quarter of 2011. The ratio of net debt to adjusted EBITDA (before real estate) was 4.8 times compared to 6.7 times at December 31, 2010.

Undrawn amounts available to the Company at December 31, 2011 under short-term lines of credit were $4.4 million, bringing total cash availability (excluding restricted cash) at December 31, 2011, to $94.5 million.

At December 31, 2011, approximately 53% of the Company's debt was at fixed interest rates and 47% was at floating interest rates. The weighted average maturity of the debt was approximately 3.6 years and the weighted average interest rate (including margin and swaps) was approximately 4.3%. The Company had $78.8 million of debt repayments due within 12 months including $10.0 million of debt related to Keswick Hall which has been repaid during the first quarter of 2012. These amounts are expected to be met through a combination of operating cash flow, refinancing of the facilities and utilization of available cash.

As previously reported in the Company's second and third quarter 2011 earnings news releases, the Company's balance sheet as at December 31, 2010 has been restated to correct an understatement of non-current deferred income tax liabilities. The prior period increase to non-current deferred tax liabilities of $6.0 million (and a corresponding decrease to retained earnings) does not affect the Company's net losses or losses per share for the year ended December 31, 2010.

* * * * * * * *

Reconciliation and Adjustments

        
                                                 Three months      Twelve months
                                                     ended             ended
        $'000 - except per share amounts          December 31       December 31
                                                 2011     2010     2011     2010
        EBITDA                                   11,093    7,319   48,405   39,185
        Real estate                               2,045      440    6,403    4,229
        EBITDA before real estate                13,138    7,759   54,808   43,414
        Adjusted items:
        Gain on disposal (1)                    (16,042)        - (16,544)       -
        Impairment (2)                           18,893    7,456   59,746   37,967
        Legal costs (3)                               -      (18)       -     (175)
        Grand Hotel Timeo & Villa Sant'Andrea
        (4)                                           -      344        -    2,068
        Cipriani litigation (5)                       -        -        -     (788)
        '21' Club settlement (6)                      -        -    2,546        -
        Peru hotels depreciation adjustment
        (7)                                           -        -        -    1,240
        Management restructuring (8)                104      555    4,811    1,666
        Hotel refurbishment (9)                   3,172        -    3,172        -
        VAT claim settlement (11)                 1,205        -    1,205        -
        Abandoned projects (12)                     396        -      396        -
        Office move costs (13)                      290        -      290        -
        Adjusted EBITDA before real estate       21,156   16,096  110,430   85,392
        Reported net loss attributable to
        Orient-Express Hotels Ltd.             (28,106) (26,479) (87,780) (62,759)
        Net (earnings) / loss attributable to
        non-controlling interests                  (36)        5    (184)    (179)
        Reported net loss                      (28,070) (26,484) (87,596) (62,580)
        Net loss from discontinued operations
        net of tax                               2,856    3,769   22,136    2,010
        Net loss from continuing operations    (25,214) (22,715) (65,460) (60,570)
        Adjusted items net of tax:
        Gain on disposal (1)                    (8,831)       -   (9,157)       -
        Impairment (2)                          18,641    7,172   59,494   37,683
        Legal costs (3)                              -     (18)        -    (175)
        Grand Hotel Timeo & Villa Sant'Andrea
        (4)                                          -      249        -    1,535
        Cipriani litigation (5)                      -        -        -    (788)
        '21' Club settlement (6)                     -        -    1,655        -
        Peru hotels depreciation adjustment
        (7)                                          -        -        -      853
        Management restructuring (8)               140      397    4,624    1,322
        Hotel refurbishment (9)                  3,172        -    3,172        -
        Loan financing costs (10)                  566      906    2,407      906
        VAT claim settlement (11)                1,205        -    1,205        -
        Abandoned projects (12)                    249        -      249        -
        Office move costs (13)                     290        -      290        -
        Gain on loan settlement (14)              (983)       -     (983)       -
        Interest rate swaps (15)                     3    1,104    3,484    1,772
        Foreign exchange (16)                    1,700   (2,379)   3,700   (4,940)
        Adjusted net (loss)/earnings from
        continuing operations                   (9,062) (15,284)   4,680  (22,482)
        Reported EPS attributable to
        Orient-Express Hotels Ltd.               (0.27)   (0.27)   (0.86)   (0.69)
        Reported EPS from continuing
        operations                               (0.25)   (0.24)   (0.64)   (0.66)
        Adjusted EPS from continuing
        operations                               (0.09)   (0.16)    0.05   (0.24)
        Number of shares (millions)             102.62    96.62   102.53    91.54

Net debt / adjusted EBITDA reconciliation

        
                                                          Twelve months ended and
        $'000                                                as at December 31
                                                             2011         2010
        Cash (including restricted cash)                      103,318      158,536
        Working capital facilities                                  -        1,174
        Current portion of long-term debt and capital
        leases                                                 77,058      124,805
        Current portion of long-term debt of
        consolidated variable interest entities                 1,784        1,775
        Long-term debt and obligations under capital
        leases                                                466,830      511,336
        Long-term debt of consolidated variable interest
        entities                                               88,745       90,529
        Net debt                                              531,099      571,083
        Adjusted EBITDA before real estate                    110,430       85,392
        Net debt / adjusted EBITDA before real estate           4.8 x        6.7 x

Footnotes:

        
        1) Gain on disposal of New York hotel project and excess '21' Club
          development rights.
        2) Goodwill and fixed asset impairment charges on owned properties, Porto
          Cupecoy and share of impairment in unconsolidated companies.
        3) Legal costs (net) incurred in defending the Company's class B common share
          structure.
        4) Non-recurring costs and purchase transaction costs incurred in relation to
          Grand Hotel Timeo and Villa Sant'Andrea.
        5) Cash received in excess of costs incurred following settlement of "Cipriani"
          trademark litigation.
        6) Non-recurring charge for settlement of employee litigation.
        7) Additional charge to reflect revision of useful economic life of assets at
          Machu Picchu Sanctuary Lodge.
        8) Restructuring, redundancy and associated legal and other costs.
        9) Non-cash fixed asset write-off related to the refurbishment of La Samanna.
          10) Amortization of deferred financing costs on repayment of debt.
          11) Non-recurring charge for settlement of VAT claim in Mexico.
          12) Write-off of costs related to abandoned projects.
          13) Cost associated with office move of principal UK administrative subsidiary.
          14) Gain on early repayment of vendor financing associated with Sicilian hotel
          acquisition.
          15) Change in fair value of derivatives that are not designated in hedging
          relationships and the ineffective portion of derivatives that are designated in
          hedging relationships.
          16) Foreign exchange is a non-cash item arising on the translation of certain
          assets and liabilities denominated in currencies other than the reporting currency.

Management evaluates the operating performance of the Company's segments on the basis of segment net earnings before interest, foreign exchange, tax (including tax on unconsolidated companies), depreciation and amortization (EBITDA), and believes that EBITDA is a useful measure of operating performance, for example to help determine the ability to incur capital expenditure or service indebtedness, because it is not affected by non-operating factors such as leverage and the historical cost of assets. EBITDA is also a financial performance measure commonly used in the hotel and leisure industry, although the Company's EBITDA may not be comparable in all instances to that disclosed by other companies. EBITDA does not represent net cash provided by operating, investing and financing activities under US generally accepted accounting principles (US GAAP), is not necessarily indicative of cash available to fund all cash flow needs, and should not be considered as an alternative to earnings from operations or net earnings under US GAAP for purposes of evaluating operating performance.

Adjusted EBITDA and adjusted net earnings of the Company are non-GAAP financial measures and do not have any standardized meanings prescribed by US GAAP. They are, therefore, unlikely to be comparable to similar measures presented by other companies, which may be calculated differently, and should not be considered as an alternative to net earnings, cash flow from operating activities or any other measure of performance prescribed by US GAAP. Management considers adjusted EBITDA and adjusted net earnings to be meaningful indicators of operations and uses them as measures to assess operating performance because, when comparing current period performance with prior periods and with budgets, management does so after having adjusted for non-recurring items, foreign exchange (a non-cash item), disposals of assets or investments, and certain other items (some of which may be recurring) which management does not consider indicative of ongoing operations or which could otherwise have a material effect on the comparability of the Company's operations. Adjusted EBITDA and adjusted net earnings are also used by investors, analysts and lenders as measures of financial performance because, as adjusted in the foregoing manner, the measures provide a consistent basis on which the performance of the Company can be assessed.

Because the principal activities of the Company relate to its hotels, restaurants, tourist trains and cruises, management considers the revenue from these activities to be a better measure of performance than total revenue which includes real estate sales from past developments of for-sale residences adjoining some of the Company's hotels, currently a small part of the Company's overall business.

This news release and related oral presentations by management contain, in addition to historical information, forward-looking statements that involve risks and uncertainties. These include statements regarding earnings outlook, investment plans, debt reduction and debt refinancings, asset sales and similar matters that are not historical facts. These statements are based on management's current expectations and are subject to a number of uncertainties and risks that could cause actual results to differ materially from those described in the forward-looking statements. Factors that may cause a difference include, but are not limited to, those mentioned in the news release and oral presentations, unknown effects on the travel and leisure markets of terrorist activity and any police or military response, varying customer demand and competitive considerations, failure to realize hotel bookings and reservations and planned property development sales as actual revenue, inability to sustain price increases or to reduce costs, rising fuel costs adversely impacting customer travel and the Company's operating costs, fluctuations in interest rates and currency values, uncertainty of negotiating and completing proposed asset sales, debt refinancings, capital expenditures and acquisitions, inability to reduce funded debt as planned or to agree bank loan agreement waivers or amendments, adequate sources of capital and acceptability of finance terms, possible loss or amendment of planning permits and delays in construction schedules for expansion or development projects, delays in reopening properties closed for repair or refurbishment and possible cost overruns, shifting patterns of tourism and business travel and seasonality of demand, adverse local weather conditions, changing global or regional economic conditions and weakness in financial markets which may adversely affect demand, legislative, regulatory and political developments, and possible new challenges to the Company's corporate governance structure. Further information regarding these and other factors is included in the filings by the Company with the U.S. Securities and Exchange Commission.

******

Orient-Express Hotels will conduct a conference call on Friday, February 24, 2012 at 10.00 hrs EST (15.00 GMT) which is accessible at +1 877 249 9037 [ tel:%2B1%20877%20280%202342 ] (US toll free) or +44 (0)20 7784 1036 [ tel:%2B44%20%280%2920%203427%201918 ] (Standard International). The conference ID is 9772741. A re-play of the conference call will be available until 7pm (EST) Friday, March 2, 2012 and can be accessed by calling +1 866 932 5017 [tel:%2B1%20866%20932%205017 ] (US toll free) or +44 (0)20 7111 1244 [tel:%2B44%20%280%2920%207111%201244 ] (Standard International) and entering replay access number 9772741#. A re-play will also be available on the company's website: http://www.orient-expresshotelsltd.com.

Financial media requiring further information should contact Vicky Legg, Director of Corporate Communications on +44 (0)20 3117 1380 or vicky.legg@orient-express.com

ORIENT-EXPRESS HOTELS LTD.

Three Months ended December 31, 2011

SUMMARY OF OPERATING RESULTS

(Unaudited)

        
                                                        Three months ended
                                                            December 31
        $'000 - except per share amounts                 2011        2010
        Revenue and earnings from unconsolidated
        companies
        Owned hotels
        - Europe                                      32,823      29,696
        - North America                               26,707      25,022
        - Rest of World                               48,053      44,379
        Hotel management & part ownership interests    1,314         353
        Restaurants                                    6,356       6,489
        Trains & cruises                              20,631      17,744
        Revenue and earnings from unconsolidated
        companies before real estate                 135,884     123,683
        Real estate revenue                              681       7,889
        Total (1)                                    136,565     131,572
        Analysis of earnings
        Owned hotels
        - Europe                                       1,566        (264)
        - North America                                1,321       3,287
        - Rest of World                               13,123       9,827
        Hotel management & part ownership interests    1,638         353
        Restaurants                                    2,026       2,217
        Trains & cruises                               6,711       5,425
        Central overheads                            (10,396)     (5,630)
        EBITDA before real estate, impairment and
        gain on disposal                              15,989      15,215
        Real estate                                   (2,045)       (440)
        EBITDA before impairment and gain on disposal 13,944      14,775
        Impairment                                   (18,893)     (7,456)
        Gain on disposal                              16,042           -
        EBITDA                                        11,093       7,319
        Depreciation & amortization                  (11,850)    (11,210)
        Interest                                      (7,661)    (11,701)
        Foreign exchange                              (1,600)      2,696
        Loss before tax                              (10,018)    (12,896)
        Tax                                          (15,196)     (9,819)
        Net loss from continuing operations          (25,214)    (22,715)
        Discontinued operations                       (2,856)     (3,769)
        Net loss                                     (28,070)    (26,484)
        Net (earnings) / loss attributable to
        non-controlling interests                        (36)          5
        Net loss attributable to Orient-Express
        Hotels Ltd.                                  (28,106)    (26,479)
        Net loss per common share attributable to
        Orient-Express Hotels Ltd.                     (0.27)      (0.27)
        Number of shares - millions                   102.62       96.62

(1) Comprises earnings from unconsolidated companies of $1,980,000 (2010 - $963,000) and revenue of $134,585,000 (2010 - $130,609,000).

ORIENT-EXPRESS HOTELS LTD.

Three Months Ended December 31, 2011

SUMMARY OF OPERATING INFORMATION FOR OWNED HOTELS

        
                                           Three months ended
                                              December 31
                                           2011         2010
        Average Daily Rate
        (in US dollars)
        Europe                              445          497
        North America                       352          329
        Rest of World                       365          343
        Worldwide                           379          369
        Room Nights Available
        (000's)
        Europe                               65           65
        North America                        62           61
        Rest of World                       120          120
        Worldwide                           247          246
        Rooms Nights Sold (000's)
        Europe                               32           26
        North America                        40           39
        Rest of World                        73           69
        Worldwide                           145          134
        Occupancy
        Europe                              49%          40%
        North America                       65%          64%
        Rest of World                       61%          58%
        Worldwide                           59%          54%
        RevPAR (in US dollars)
        Europe                              221          202
        North America                       227          209
        Rest of World                       223          198
        Worldwide                           223          202
                                                                 Change %
        Same Store RevPAR                                              Local
        (in US dollars)                                       Dollar  currency
        Europe                              217          195      11%      18%
        North America                       227          209       9%       9%
        Rest of World                       223          198      12%      16%
        Worldwide                           222          200      11%      15%

ORIENT-EXPRESS HOTELS LTD.

Twelve Months ended December 31, 2011

SUMMARY OF OPERATING RESULTS

(Unaudited)

        
                                                        Twelve months ended
                                                            December 31
        $'000 - except per share amounts                 2011        2010
        Revenue and earnings from unconsolidated
        companies
        Owned hotels
        - Europe                                      213,232     169,772
        - North America                               102,655      96,724
        - Rest of World                               166,903     148,778
        Hotel management & part ownership interests     5,818       2,228
        Restaurants                                    16,312      15,809
        Trains & cruises                               82,395      68,298
        Revenue and earnings from unconsolidated
        companies before real estate                  587,315     501,609
        Real estate revenue                             7,871      64,019
        Total (1)                                     595,186     565,628
        Analysis of earnings
        Owned hotels
        - Europe                                       60,264      37,388
        - North America                                13,552      14,986
        - Rest of World                                35,147      33,399
        Hotel management & part ownership interests     5,261       2,228
        Restaurants                                       (67)      2,476
        Trains & cruises                               20,948      17,407
        Central overheads                             (37,095)    (26,503)
        EBITDA before real estate, impairment and
        gain on disposal                               98,010      81,381
        Real estate                                    (6,403)     (4,229)
        EBITDA before impairment and gain on disposal  91,607      77,152
        Impairment                                    (59,746)    (37,967)
        Gain on disposal                               16,544           -
        EBITDA                                         48,405      39,185
        Depreciation & amortization                   (45,965)    (44,710)
        Interest                                      (41,234)    (33,837)
        Foreign exchange                               (4,229)      5,678
        Loss before tax                               (43,023)    (33,684)
        Tax                                           (22,437)    (26,886)
        Net loss from continuing operations           (65,460)    (60,570)
        Discontinued operations                       (22,136)     (2,010)
        Net loss                                      (87,596)    (62,580)
        Net earnings attributable to non-controlling
        interests                                        (184)       (179)
        Net loss attributable to Orient-Express
        Hotels Ltd.                                   (87,780)    (62,759)
        Net loss per common share attributable to
        Orient-Express Hotels Ltd.                      (0.86)      (0.69)
        Number of shares - millions                    102.53       91.54

(1) Comprises earnings from unconsolidated companies of $6,627,000 (2010 - $4,486,000) and revenue of $588,559,000 (2010 - $561,142,000).

ORIENT-EXPRESS HOTELS LTD.

Twelve Months Ended December 31, 2011

SUMMARY OF OPERATING INFORMATION FOR OWNED HOTELS

        
                                         Twelve months ended
                                              December 31
                                           2011         2010
        Average Daily Rate
        (in US dollars)
        Europe                              709          637
        North America                       336          324
        Rest of World                       348          331
        Worldwide                           444          406
        Room Nights Available
        (000's)
        Europe                              287          280
        North America                       249          249
        Rest of World                       473          463
        Worldwide                         1,009          992
        Room Nights Sold (000's)
        Europe                              164          139
        North America                       164          160
        Rest of World                       269          254
        Worldwide                           597          553
        Occupancy
        Europe                              57%          50%
        North America                       66%          64%
        Rest of World                       57%          55%
        Worldwide                           59%          56%
        RevPAR (in US dollars)
        Europe                              406          317
        North America                       222          208
        Rest of World                       198          182
        Worldwide                           263          226
                                                                 Change %
        Same Store RevPAR                                              Local
        (in US dollars)                                       Dollar  currency
        Europe                              410          319      29%      22%
        North America                       222          208       7%       7%
        Rest of World                       199          183       9%       7%
        Worldwide                           262          227      15%      13%

ORIENT-EXPRESS HOTELS LTD.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

        
                                                                       December 31
                                                           December 31        2010
        $'000                                                     2011  (Restated)
        Assets
        Cash and restricted cash                               103,318     158,536
        Accounts receivable                                     44,972      49,553
        Due from unconsolidated companies                       10,754       5,985
        Prepaid expenses and other                              20,176      23,223
        Inventories                                             44,499      43,546
        Other assets held for sale                              38,251      81,601
        Real estate assets                                      32,021      60,278
        Total current assets                                   293,991     422,722
        Property, plant & equipment, net book value          1,174,119   1,231,188
        Property, plant & equipment, net book value of
        consolidated variable interest entities                185,788     188,502
        Investments                                             60,012      60,428
        Goodwill                                               161,460     177,498
        Other intangible assets                                 19,465      20,007
        Other assets                                            36,034      37,369
                                                             1,930,869   2,137,714
        Liabilities and Equity
        Working capital facilities                                   -       1,174
        Accounts payable                                        28,998      25,448
        Accrued liabilities                                     87,617      71,554
        Deferred revenue                                        30,881      28,082
        Other liabilities held for sale                          1,781       3,673
        Current portion of long-term debt and capital
        leases                                                  77,058     124,805
        Current portion of long-term debt of consolidated
        variable interest
        entities                                                 1,784       1,775
        Total current liabilities                              228,119     256,511
        Long-term debt and obligations under capital
        leases                                                 466,830     511,336
        Long-term debt of consolidated variable interest
        entities                                                88,745      90,529
        Deferred income taxes                                   94,036     106,702
        Deferred income taxes of consolidated variable
        interest entities                                       61,072      61,835
        Other liabilities                                       39,542      43,906
        Total liabilities                                      978,344   1,070,819
        Shareholders' equity                                   950,330   1,064,973
        Non-controlling interests                                2,195       1,922
        Total equity                                           952,525   1,066,895
                                                             1,930,869   2,137,714

Contacts:

        
        Martin O'Grady
        Vice President, Chief Financial Officer
        Tel: +44-20-3117-1333
        E: martin.ogrady@orient-express.com

        Amy Brandt
        Director of Investor Relations
        Tel: +44-20-3117-1323
        E: amy.brandt@orient-express.com

SOURCE Orient Express Hotels Ltd

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