As of December 31, 2000, the total debt outstanding for the Company was $297.2 million.

The Company had repurchased 9.1 million shares of its common stock at a total cost of $129.2 million as of December 31, 2000. On February 8, 2001, the Company received authorization from its Board of Directors to repurchase up to an additional 5 million shares. Subsequent to December 31, 2000 and using the proceeds of the Sunburst note, the Company repurchased 7.3 million shares of outstanding common stock at a total cost of $105.4 million.

The Company believes that cash flows from operations and available financing capacity are adequate to meet the expected operating, investing, financing and debt service requirements of the business for the immediate future.

Impact of Recently Issued Accounting Standards

In June 1998, the Financial Accounting Standards Board (Board) issued SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities,” which established accounting and reporting standards for derivative instruments, including derivative instruments embedded in other contracts, and for hedging activities. SFAS No. 133 requires the recognition of the fair value of derivatives in the statement of financial position, with changes in the fair value recognized either in earnings or as a component of other comprehensive income dependent upon the hedging nature of the derivative. In June 1999, the Board issued SFAS No. 137, “Accounting for Derivative Instruments and Hedging Activities – Deferral of the Effective Date of FASB Statement No. 133,” which deferred the effective date of SFAS No. 133 until fiscal years beginning after June 15, 2000. SFAS No. 133 does not have a material impact on the Company’s earnings or other comprehensive income.

In December 1999, the Securities and Exchange Commission issued Staff Accounting Bulletin (“SAB”) No. 101, “Revenue Recognition,” which requires revenues to be recognized when realized and earned. Revenue is generally realized and earned when all the following criteria are met: (i) persuasive evidence of an arrangement exists; (ii) delivery has occurred or services have been rendered; (iii) the selling price must be fixed or determinable; and, (iv) collectibility is reasonably assured. The Company implemented SAB No. 101 in 2000.

Forward-Looking Statements

Certain statements contained in this annual report, including those in the section entitled Management’s Discussion and Analysis, that are not historical facts constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act. Words such as “believes,” “anticipates,” “expects,” “intends,” “estimates,” “projects,” and other similar expressions, which are predictions of or indicate future events and trends, typically identify forward-looking statements. Such statements are subject to a number of risks and uncertainties which could cause actual results to differ materially from those projected, including: competition within each of our business segments; business strategies and their intended results; the balance between supply of and demand for hotel rooms; our ability to obtain new franchise agreements; our ability to develop and maintain positive relations with current and potential hotel owners; the effect of international, national and regional economic conditions; the availability of capital to allow us and potential hotel owners to fund investments and construction of hotels; the cost and other effects of legal proceedings; and other risks described from time to time in our filings with the Securities and Exchange Commission, including those set forth under the heading “Risk Factors” in our Report on Form 10-Q for the period ended June 30, 1999. Given these uncertainties, you are cautioned not to place undue reliance on such statements. The Company also undertakes no obligation to publicly update or revise any forward-looking statement to reflect current or future events or circumstances.