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ENERGY MANAGEMENT

Capital Improvements. ENERGY MANAGEMENT. FINANCIAL ANALSIS An Overview of Financial Performance. Demand Reduction. The financial impact of energy costs on a company’s income statement is significant. The Hospitality industry experienced an increase of close to 60 percent in 2001.

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ENERGY MANAGEMENT

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  1. Capital Improvements ENERGY MANAGEMENT • FINANCIAL ANALSIS • An Overview of Financial Performance Demand Reduction

  2. The financial impact of energy costs on a company’s income statement is significant. The Hospitality industry experienced an increase of close to 60 percent in 2001. The increased energy cost affects the value of company assets and shareholder value. Financial Terms Debt Service Coverage Ratio/EBITDA Corporate Borrowing Rate Capitalization Rate EPS/FFO Key Ingredients Income Repairs & Maintenance Rebates AGENDA

  3. HIGHLIGHTS SHAREHOLDER VALUE REBATES -Free Money CONSERVATION

  4. FINANCIAL INPUTSLighting Project • Initial Cash Investment $240,000 • Corporate Borrowing Rate 8.75% • Energy Savings $211,500 • Repairs & Maint. Savings $42,600 • Relamp Period 55 Months • Relamp Cost $105,000 • Utility Rebates $72,000 • Shares Outstanding 54,000,000 • Capitalization Rate 11.0% • Share Multiple 9.5 • Debt Capacity 5

  5. FINANCIAL RESULTSExecutive Summary • Initial Investment $240,000 • Annual Energy Savings $211,500 • Simple Payback 12.39 Months • IRR 4 years 129.31% • IRR 9 years 129.98% • EBITDA Impact $315,000 • Debt $1,575,000 • Portfolio Value Impact $2,860,000 • FFO per Share Accretion $0.0058 • Share Price Increase $0.0551

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