Orient-Express Hotels Ltd. Reports Fourth Quarter 2012 Results

  Orient-Express Hotels Ltd. Reports Fourth Quarter 2012 Results

  *Fourth quarter same store revenue per available room (“RevPAR”) equal to
    prior-year quarter in US dollars; up 7% excluding Copacabana Palace, Rio
    de Janeiro, which was partially closed for planned renovation
  *Fourth quarter total revenue down 1% to $128.0 million from $129.1 million
    in prior-year quarter; up 3% excluding Copacabana Palace
  *Fourth quarter adjusted EBITDA down 3% to $19.6 million from $20.3 million
    in prior-year quarter; up 12% excluding Copacabana Palace
  *Delivered significant progress on portfolio optimization strategy,
    including re-opening of extensively refurbished main building of
    Copacabana Palace in December; completing sales of The Westcliff,
    Johannesburg and, in January 2013, Porto Cupecoy, Sint Maarten, for
    combined proceeds of $45.0 million; and announcing renovation plans for
    Grand Hotel Europe, St. Petersburg and Charleston Place, South Carolina
  *Positive early indications for 2013; bookings for total owned hotels up
    11% from the same time last year
  *Appointed John M. Scott III as President and Chief Executive Officer in
    November 2012 and named Ralph Aruzza as Chief Sales & Marketing Officer in
    February 2013

Business Wire

HAMILTON, Bermuda -- February 20, 2013

Orient-Express Hotels Ltd. (NYSE: OEH, www.orient-express.com) (the
“Company”), owners, part-owners or managers of 46 luxury hotel, restaurant,
tourist train and river cruise properties operating in 22 countries, today
announced its results for the fourth quarter ended December 31, 2012.

Total revenue was $128.0 million in the fourth quarter of 2012, down $1.1
million or 1% from $129.1 million in the fourth quarter of 2011. Excluding
Copacabana Palace, which was partially closed for renovation for the majority
of the quarter, total revenue was up 3% compared to the fourth quarter of
2011.

Revenue from owned hotels for the fourth quarter was $99.2 million, down $1.6
million or 2% from $100.8 million in the fourth quarter of 2011. On a same
store basis, owned hotels RevPAR was flat in US dollars and down 1% in local
currency. Excluding Copacabana Palace, same store RevPAR for the fourth
quarter increased by 7% in US dollars and 6% in local currency.

Trains & cruises revenue in the fourth quarter was $21.0 million, up 2%
compared to $20.6 million in the fourth quarter of 2011.

Adjusted EBITDA was $19.6 million for the fourth quarter, down $0.7 million
from $20.3 million in the prior-year period. The principal decrease was at
Copacabana Palace, which was down $2.2 million as a result of the partial
closure. Excluding the year-over-year decrease at Copacabana Palace, adjusted
EBITDA would have been $1.5 million ahead of the prior-year quarter. This
growth was led by Road To Mandalay and The Governor’s Residence, both in
Myanmar, which were up $1.2 million and $0.4 million, respectively.

Adjusted net loss from continuing operations for the fourth quarter was $9.4
million ($0.09 per common share) compared with a loss of $7.2 million ($0.07
per common share) in the fourth quarter of 2011.

“Despite difficult macro-economic conditions, we had a solid finish to the
year,” said John Scott, President and Chief Executive Officer. “We delivered
adjusted EBITDA of $104.3 million and full-year RevPAR growth of 3% over 2011
in local currency terms, including RevPAR growth across all regions except
South America, which was affected by the partial closure of Copacabana Palace.
The growth in RevPAR reflects the inherent value of our unique and iconic
assets and demonstrates the resilience in demand for our unrivalled luxury
travel experiences. Importantly, excluding Copacabana Palace, full-year local
currency RevPAR was up 6% over 2011. The renovation of Copacabana Palace, one
of our premier properties, was completed in time for Rio de Janeiro’s peak
Christmas and New Year period, and positions us well to capitalize on Rio’s
growing international profile.

“Overall, we continued to make significant progress on our strategy to
increase the earnings power of our properties and optimize our unique
portfolio of luxury travel assets. We completed the disposals of The Westcliff
in the fourth quarter and Porto Cupecoy in January 2013 for combined proceeds
of $45.0 million. Consistent with our focus on redeploying capital into core,
high-value properties, the proceeds from these divestitures will be used to
provide capital for our active program of targeted reinvestment in our current
portfolio and to further strengthen our balance sheet. In 2012, we added or
re-opened 301 refurbished rooms, including those in the Copacabana Palace
renovation. In 2013, we will open El Encanto in Santa Barbara, which will
further enhance the revenue-generating power of our portfolio, and commence
exciting renovation projects at several key properties, including Grand Hotel
Europe and Charleston Place. These renovations have been phased so that they
will have minimal disruption on hotel operations.

“Our portfolio optimization program and on-going balance sheet strengthening
initiatives – combined with solid operating results – provide a strong
platform for long-term growth. In the near-term, we remain cautiously
optimistic about 2013. While the macro-economic challenges remain, we have
seen some positive early indications for the year, including a 11% increase in
full-year bookings over the same time last year.”

Key Strategic Achievements

The Company successfully completed the previously announced sales of The
Westcliff in the quarter and Porto Cupecoy in January 2013. The purchaser of
The Westcliff will retain the Company as the manager of the hotel for a period
of up to 12 months while the purchaser develops its long-term refurbishment
plans. The aggregate sales proceeds from both of these transactions is $45.0
million, with net proceeds of approximately $41.7 million available to the
Company for reinvestment in core properties and to strengthen the Company’s
balance sheet. In addition, the Company has retained ownership of four
condominium units that were not part of the Porto Cupecoy disposal but are
under contract of sale. These pending unit sales are expected to contribute
$3.5 million of additional proceeds.

In December, the Company completed the final phase of a $20.0 million
comprehensive refurbishment of the main building of Copacabana Palace, a
landmark property on Copacabana beach in Rio de Janeiro. The refurbishment
program, which commenced in 2011, included all 145 rooms and suites in the
main building and significant enhancements to the lobby and public areas.

During the quarter, the Company successfully secured extensions to its leases
of Eagle Island Camp and Savute Elephant Camp, both in Botswana. Both leases
have additional terms of 15 years along with conditional renewals for a
further 15 years, effectively representing 30-year extensions for both sites.

These key portfolio enhancements build on projects that the Company completed
earlier in 2012, including the addition of five new suites at Hotel Splendido,
Portofino; completion of the final phase of renovation at Grand Hotel Timeo
and Villa Sant’Andrea in Sicily; refurbishment of the public areas at La
Samanna, St. Martin; a 30-key rooms refurbishment at Mount Nelson Hotel, Cape
Town; and the renovation of banqueting space at ‘21’ Club in New York. In
addition the Company, through a 50% joint venture, opened the 55-suite Palacio
Nazarenas in Cuzco, Peru in June. With these projects, including the
renovations of Copacabana Palace and the Company’s safari camps, the Company
either added or re-opened 301 refurbished rooms during the year, which
positions the Company well for incremental revenue growth in 2013 and later
years.

2013 Portfolio Optimization Plans

The Company continues to make progress on its 92-key El Encanto hotel, which
is scheduled to open in March 2013. This hotel will provide the Company with
its first property on the west coast of the United States as well as increase
brand awareness in this important market.

During the fourth quarter, the Company announced a three-year refurbishment
program for Grand Hotel Europe that will commence in 2013 and include the
conversion of 19 rooms into six ultra-luxury suites, including a two-bedroom
presidential suite; a new food and beverage concept from a world-class
restaurant designer; an expanded spa; and fully renovated meeting room space.
The refurbishment is expected to have minimal impact on operations. The
Company signed a new $50.0 million loan facility agreement to fund the
refurbishment. This facility is expected to close in the first quarter of
2013, providing $26.0 million for refurbishment of the property, $5.2 million
for repayment of debt and costs, and the remaining $18.8 million for general
corporate purposes.

In addition, during 2013, the Company will initiate a phased three-year rooms
refurbishment at Charleston Place, which is one of the Company’s largest cash
generators. In the first phase, which will be carried out over four months
during the hotel’s low season, the Company will renovate 145 rooms. The
refurbishment is not expected to disrupt operations, and the first phase will
be partially financed by $9.2 million of additional funds borrowed in December
pursuant to an increase in principal of the hotel’s existing loan.

Executive Management Team

In November, the Company announced the appointment of John M. Scott III as
President and Chief Executive Officer and as a member of the Board of
Directors. Mr. Scott is an experienced operator of luxury hotels who most
recently served as President and Chief Executive Officer of Rosewood Hotels &
Resorts, where he oversaw a portfolio of 17 ultra-luxury hotels located in
seven countries with combined revenues in excess of $500 million.

The Companyrecently announced the appointment of Ralph Aruzza as Chief Sales
& Marketing Officer, responsiblefor strategic marketing, global sales and
corporate communications. Mr. Aruzza, who has 35 years of experience in the
luxury hotel sector, was previously Vice President of Sales & Marketing for
Rosewood Hotels & Resorts,where he oversaw all strategic brand initiatives
and global sales networks while directing channel management and customer
relationship management.

Operating Performance

Europe:

In the fourth quarter, revenue from owned hotels was $32.1 million, down $0.7
million or 2% from $32.8 million in the fourth quarter of 2011. The major
decrease was at Hotel Cipriani, where there was $1.2 million of additional
non-operating income recorded in the fourth quarter of 2011.

Same store RevPAR in Europe was up 7% compared to the prior-year quarter in US
dollars (up 4% in local currency) due to a 13% increase in average daily rate
(“ADR”) offset by a 3 percentage point decrease in occupancy.

EBITDA for the quarter was $2.6 million, up $1.0 million from $1.6 million in
the fourth quarter of 2011. The growth was led by a $0.5 million increase at
Hotel Cipriani due to a particularly busy close to the season in November and
payroll-related cost savings, offset by decreases at Reid’s Palace due to both
a weaker UK outbound market and reduced airlift to Madeira, and La Residencia,
Mallorca also impacted by the weaker UK outbound market.

North America:

Revenue from owned hotels for the quarter of $26.7 million was unchanged from
the fourth quarter of 2011. Same store RevPAR in the region increased by 4% in
US dollars due to a 6% increase in ADR offset by a 2 percentage point decrease
in occupancy.

EBITDA in North America was $3.6 million, up $2.3 million from $1.3 million in
the fourth quarter of 2011. The results for the fourth quarter of 2012
included $2.2 million of charges for pre-opening expenses and the write-off of
fixed assets. In 2011, there were charges of $4.4 million for
refurbishment-related write-offs and the settlement of a VAT liability.
Underlying EBITDA after adjusting for these items is largely unchanged
year-over-year.

Rest of World:

Asia-Pacific:

Revenue for the fourth quarter of 2012 was $9.0 million, an increase of $1.2
million or 15% compared to $7.8 million in the fourth quarter of 2011. Revenue
growth in the region continued to be led by The Governor’s Residence, Yangon
(up $0.8 million), as Myanmar remains an increasingly popular destination with
growing demand for tourist accommodation. Same store RevPAR for the region
increased by 18% in US dollars due to a 13% increase in ADR and a 3 percentage
point increase in occupancy.

EBITDA grew by 14% to $3.3 million compared to $2.9 million in the fourth
quarter of 2011, which included a $0.4 million increase at The Governor’s
Residence and $0.3 million and $0.1 million increases at La Residence
d’Angkor, Siem Reap, Cambodia and Napasai, Koh Samui, Thailand, respectively,
reflecting strong demand throughout the region.

Southern Africa:

Fourth quarter revenue from owned hotels was $7.8 million, up $1.5 million or
24% from $6.3 million in the fourth quarter of 2011. Same store RevPAR was up
13% in local currency and up 4% in US dollars. EBITDA was $2.0 million versus
$1.7 million in the fourth quarter of 2011 as a result of local currency ADR
growth at the safari camps in Botswana and the benefits of labor and other
cost-saving initiatives in South Africa.

South America:

Fourth quarter revenue from owned hotels was $23.6 million, down $3.6 million
or 13% from $27.2 million in the fourth quarter of 2011. This decline resulted
from a $4.6 million decrease at Copacabana Palace as a result of the partial
closure of the main building for refurbishment, offset by growth at other
properties. As a result, same store RevPAR in the region decreased by 20% but
was up 7% excluding Copacabana Palace.

EBITDA for the quarter was $6.2 million, a decrease of $1.5 million compared
to $7.7 million in the fourth quarter of last year. This decrease was
attributable to a reduction of $2.2 million at Copacabana Palace, which was
partially closed for renovation, offset by increases of $0.4 million at both
Hotel das Cataratas, Iguassu, where strong demand from the domestic Brazilian
market continued, and Miraflores Park Hotel, Lima, which experienced growth in
occupancy and ADR during the quarter.

Hotel management & part-ownership interests:

EBITDA for the fourth quarter of 2012 was $1.1 million compared to $1.6
million in the fourth quarter of 2011. The quarterly result included a $0.2
million decline from Hotel Ritz, Madrid, which was affected by difficult
economic conditions in Spain.

Restaurants:

Revenue from ‘21’ Club in the fourth quarter of 2012 was $6.3 million compared
to $6.4 million in the same quarter of 2011. EBITDA of $2.0 million was
unchanged from the same quarter of 2011.

Trains & cruises:

Revenue for the fourth quarter of 2012 was $21.0 million, up $0.4 million or
2% from $20.6 million in the fourth quarter of 2011. This growth includes $1.7
million from Road To Mandalay, which performed very strongly against the
backdrop of Myanmar’s booming tourist market, offset by decreases from Venice
Simplon-Orient-Express and the UK day-trains due to decreases in charter
business.

EBITDA was $6.5 million compared to $6.7 million in the fourth quarter of
2011.

Central costs:

In the fourth quarter of 2012, central overheads were $8.5 million compared
with $8.4 million in the prior-year period. This increase includes $1.2
million of professional advisory fees related to the previously announced
unsolicited proposal from The Indian Hotels Company Limited to acquire the
Company that was received on October 18, 2012 and $0.4 million related to CEO
recruitment costs, offset by central compensation costs that were $1.3 million
lower than in the fourth quarter of 2011.

In addition, the Company incurred $2.4 million of non-cash share-based
compensation expense compared to $2.0 million in the fourth quarter of 2011.
The Company also incurred $0.2 million of central marketing costs, as it
continued to invest in new marketing initiatives and expand its geographic
presence.

Depreciation and amortization:

The depreciation and amortization charge for the fourth quarter of 2012 was
$12.4 million, up from $11.3 million in the fourth quarter of 2011.

Interest:

The interest charge for the fourth quarter of 2012 was $7.2 million, down $0.2
million from $7.4 million in the prior year quarter.

Tax:

The tax charge from continuing operations for the fourth quarter of 2012 was
$12.7 million, compared to a charge of $15.1 million for the same quarter in
the prior year. Fourth quarter 2012 tax expense included a $3.8 million
deferred tax charge relating to one-off discrete items in the period. The
fourth quarter 2011 tax charge included $7.4 million charge in respect of the
gain on disposal of excess development rights of ‘21’ Club.

Investment:

The Company invested a total of $29.1 million in its portfolio during the
fourth quarter of 2012, including $11.5 million for the renovation of El
Encanto, $9.0 million primarily for completion of the refurbishment at
Copacabana Palace, $1.7 million at Mount Nelson Hotel primarily for the
refurbishment of 30 rooms, $1.0 million primarily for the completion of the
refurbishment of public areas at La Samanna, $1.0 million at Grand Hotel
Europe primarily for work on the hotel’s façade, and the balance for routine
capital expenditures.

Balance Sheet

At December 31, 2012, the Company had long-term debt (including the current
portion and debt of consolidated variable interest entities) of $619.5 million
and cash balances of $114.5 million (including $21.1 million of restricted
cash), resulting in total net debt of $505.0 million compared with total net
debt of $531.1 million at the end of 2011. At December 31, 2012, the ratio of
net debt to trailing 12-month adjusted EBITDA was 4.8 times.

Undrawn amounts available to the Company at December 31, 2012 under short-term
lines of credit were $4.5 million, bringing total cash availability (excluding
restricted cash) at December 31, 2012 to $97.9 million.

At December 31, 2012, approximately 49% of the Company’s debt was at fixed
interest rates and 51% was at floating interest rates. The weighted average
maturity of the debt was approximately 2.6 years and the weighted average
interest rate was 4.0%. The Company had $91.9 million of debt repayments due
within 12 months. These obligations are expected to be met through a
combination of operating cash flow, proceeds from divestments of non-core
assets, refinancing of the facilities, and utilization of available cash.

                                                                             
                                                                             
ORIENT-EXPRESS HOTELS LTD.

SUMMARY OF OPERATING RESULTS

(Unaudited)

$millions – except per            Three months ended     Twelve months ended
share amounts                                      
                                  December 31,           December 31,
                               2012      2011      2012       2011
                                                                 
Revenue and earnings from
unconsolidated companies
Owned hotels
- Europe                          32.1       32.8        202.3       213.2
- North America                   26.7       26.7        107.4       102.7
- Rest of world                   40.4      41.3        138.7      141.0
Total owned hotels                99.2       100.8       448.4       456.9
Hotel management &                1.5        1.3         4.7         5.8
part-ownership interests
Restaurants                       6.3        6.4         16.2        16.3
Trains & cruises                  21.0       20.6        83.4        82.4
Real estate                       -         -           0.7        -
Total (1)                         128.0     129.1       553.4      561.4
                                                                             
Analysis of earnings
Owned hotels
- Europe                          2.6        1.6         56.3        60.3
- North America                   3.6        1.3         19.5        13.6
- Rest of world                   11.5       12.3        34.7        33.5
Hotel management &                1.1        1.6         2.8         5.3
part-ownership interests
Restaurants                       2.0        2.0         2.2         (0.1)
Trains & cruises                  6.5        6.7         22.2        20.9
Central overheads                 (8.5)      (8.4)       (31.2)      (30.9)
Share-based compensation          (2.4)      (2.0)       (6.8)       (6.8)
Central marketing costs           (0.2)      -           (1.0)       0.6
Real estate                       -         -           (0.6)      -
EBITDA before impairment          16.2       15.1        98.1        96.4
and gain on disposal
Impairment                        (5.9)      (18.4)      (5.9)       (20.7)
Gain on disposal                  1.5       16.0        1.5        16.5
EBITDA                            11.8       12.7        93.7        92.2
Depreciation & amortization       (12.4)     (11.3)      (43.9)      (43.8)
Interest                          (7.2)      (7.4)       (29.8)      (40.2)
Foreign exchange                  (2.2)     (2.1)       (2.8)      (4.6)
(Loss) / earnings before          (10.0)     (8.1)       17.2        3.6
tax
Tax                               (12.7)    (15.1)      (27.8)     (22.4)
Net loss from continuing          (22.7)     (23.2)      (10.6)      (18.8)
operations
Discontinued operations           1.8       (4.9)       3.7        (68.8)
Net loss                          (20.9)    (28.1)      (6.9)      (87.6)
Net loss attributable to          -          -           (0.2)       (0.2)
non-controlling interests
Net loss attributable to          (20.9)    (28.1)      (7.1)      (87.8)
Orient-Express Hotels Ltd.
                                                                             
Net loss per common share
attributable to                   (0.20)    (0.27)      (0.07)     (0.86)
Orient-Express Hotels Ltd.
Number of shares – millions       102.90    102.62      102.85     102.53
                                                                             

(1) Comprises earnings from unconsolidated companies of $2.1 million (2011 -
$2.6 million) and revenue of $125.9 million (2011 - $126.5 million) for three
months ended December 31, 2012, and earnings from unconsolidated companies of
$7.9 million (2011 - $6.6 million) and revenue of $545.5 million (2011 -
$554.8 million) for twelve months ended December 31, 2012.

                                                                         
                                                                             
ORIENT-EXPRESS HOTELS LTD.

SUMMARY OF OPERATING INFORMATION FOR OWNED HOTELS

               Three months ended            Twelve months ended
                   December 31,                    December 31,
              2012       2011           2012       2011      
Average
Daily Rate                                                
(in US
dollars)
Europe             504          446                699          710
North              398          375                382          355
America
Rest of            375          386                369          366
world
Worldwide          412          397                469          465
                                                                             
Room
Nights
Available
Europe             62,679       64,956             285,842      287,200
North              61,708       62,014             251,172      251,869
America
Rest of            102,810      100,648            404,680      399,511
world
Worldwide          227,197      227,618            941,694      938,580
                                                                             
Rooms
Nights
Sold
Europe             29,432       32,245             158,160      164,380
North              39,026       40,038             165,750      165,017
America
Rest of            59,318       60,941             220,093      221,724
world
Worldwide          127,776      133,224            544,003      551,121
                                                                             
Occupancy
Europe             47%          50%                55%          57%
North              63%          65%                66%          66%
America
Rest of            58%          61%                54%          55%
world
Worldwide          56%          59%                58%          59%
                                                                             
RevPAR (in
US
dollars)
Europe             237          221                387          406
North              252          242                252          232
America
Rest of            216          234                200          203
world
Worldwide          232          233                271          273
                                                                             
Same Store
RevPAR (in
US
dollars)
Europe             237          221                387          406
North              252          242                252          232
America
Rest of            216          234                200          203
world
Worldwide          232          233                271          273
                                                                             
Same Store         US                              US           Local
RevPAR (%          dollar       Local currency     dollar       currency
change)
Europe             7%           4%                 -5%          2%
North              4%           4%                 9%           9%
America
Rest of            -8%          -6%                -1%          1%
world
Worldwide      0%         -1%            -1%        3%        

                                                                             
                                                                             
ORIENT-EXPRESS HOTELS LTD.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

                                            December 31,   December 31,
$millions                                   2012           2011
                                                                             
Assets
Cash and restricted cash                       114.5            103.3
Accounts receivable                            36.5             44.6
Due from unconsolidated companies              15.2             10.8
Prepaid expenses and other                     21.2             20.1
Inventories                                    44.6             44.5
Other assets held for sale                     22.1             135.4
Real estate assets                             1.9              1.9
Total current assets                           256.0            360.6
                                                                             
Property, plant & equipment, net of            1,171.6          1,107.6
accumulated depreciation
Property, plant & equipment, net of
accumulated depreciation
                                               183.8            185.8
of consolidated variable interest
entities
Investments in unconsolidated companies        58.9             59.9
Goodwill                                       161.3            161.5
Other intangible assets                        18.6             19.5
Other assets                                   41.8             36.0
                                                               
Total assets                                   1,892.0          1,930.9
                                                                             
Liabilities and Equity
Working capital loans                          -                -
Accounts payable                               25.2             29.0
Accrued liabilities                            77.5             87.6
Deferred revenue                               30.5             25.7
Other liabilities held for sale                2.2              7.0
Current portion of long-term debt and          90.1             77.1
capital leases
Current portion of long-term debt of
consolidated variable                          1.8              1.8

interest entities
Total current liabilities                      227.3            228.2
                                                                             
Long-term debt and obligations under           431.4            466.8
capital leases
Long-term debt of consolidated variable        96.2             88.7
interest entities
Deferred income taxes                          104.1            94.0
Deferred income taxes of consolidated          60.3             61.1
variable interest entities
Other liabilities                              34.4             39.6
                                                               
Total liabilities                              953.7            978.4
                                                                             
Shareholders’ equity                           935.9            950.3
Non-controlling interests                      2.4              2.2
Total equity                                   938.3            952.5
                                                               
Total liabilities and equity                   1,892.0          1,930.9

                                                                             
                                                                             
ORIENT-EXPRESS HOTELS LTD.

RECONCILIATIONS AND ADJUSTMENTS

(Unaudited)

                               Three months ended   Twelve months ended
$millions – except per         December 31,         December 31,
share amounts
                                  2012      2011      2012       2011
                                                                 
EBITDA                            11.8       12.7        93.7        92.2
                                                                             
Adjusted items:
Pre-opening expenses (1)          1.0        -           1.8         -
Acquisition proposal costs        1.2        -           1.2         -
(2)
Write-off of fixed assets         1.2        3.2         1.6         3.2
(3)
Abandoned projects (4)            -          0.4         -           0.4
Management restructuring          -          0.1         0.5         4.7
(5)
Write-down of receivable          -          -           0.5         -
(6)
Loss on sale of real estate       -          -           0.6         -
units (7)
Impairment (8)                    5.9        18.4        5.9         20.7
Gain on disposal (9)              (1.5)      (16.0)      (1.5)       (16.5)
VAT claim settlement (10)         -          1.2         -           1.2
Office move costs (11)            -          0.3         -           0.3
Legal settlement (12)             -         -         -          2.5
                                                                             
Adjusted EBITDA                19.6      20.3      104.3      108.7
                                                                             
Reported net loss
attributable to                   (20.9)     (28.1)      (7.1)       (87.8)
Orient-Express Hotels Ltd.
Net earnings attributable
to non-controlling                -         -         (0.2)      (0.2)
interests
Reported net loss                 (20.9)     (28.1)      (6.9)       (87.6)
Discontinued operations net       (1.8)     4.9       (3.7)      68.8
of tax
Net losses from continuing        (22.7)     (23.2)      (10.6)      (18.8)
operations
                                                                             
Adjusted items net of tax:
Pre-opening expenses (1)          0.7        -           1.2         -
Acquisition proposal costs        1.2        -           1.2         -
(2)
Write-off of fixed assets         1.2        3.2         1.5         3.2
(3)
Abandoned projects (4)            -          0.2         -           0.2
Management restructuring          -          0.1         0.4         4.5
(5)
Write-down of receivable          -          -           0.5         -
(6)
Loss on sale of real estate       -          -           0.4         -
units (7)
Impairment (8)                    5.9        18.1        5.9         20.4
Gain on disposal (9)              (1.2)      (8.8)       (1.2)       (9.2)
VAT claim settlement (10)         -          1.2         -           1.2
Office move costs (11)            -          0.3         -           0.3
Legal settlement (12)             -          -           -           1.7
Loan financing costs (13)         -          0.6         0.1         2.4
Gain on loan settlement           -          (1.0)       -           (1.0)
(14)
Interest rate swaps (15)          0.1        -           1.7         3.5
Foreign exchange (16)             1.6        2.1         2.0         4.1
Deferred taxation (17)            3.8       -         3.8        -
                                                                             
Adjusted net
(loss)/earnings from           (9.4)     (7.2)     6.9        12.5
continuing operations
                                                                             
Reported earnings per share       (0.20)     (0.27)      (0.07)      (0.86)
(“EPS”)
Reported EPS from                 (0.22)     (0.23)      (0.10)      (0.18)
continuing operations
Adjusted EPS from                 (0.09)     (0.07)      0.07        0.12
continuing operations
Number of shares (millions)    102.90    102.62    102.85     102.53


(1) Pre-opening expenses at El Encanto.
(2) Costs associated with unsolicited proposal by The Indian Hotels Company
Limited to acquire the Company.
(3) Non-cash write-off of fixed asset balances.
(4) Write-off of costs related to abandoned projects at Grand Hotel Europe.
(5) Restructuring and redundancy costs.
(6) Write down of receivable balance within central costs.
(7) Loss on sale of final two units at Keswick Estate.
(8) Non-cash impairment charges related to goodwill and long-lived assets.
(9) Gain on disposal of capital lease and New York hotel project.
(10) Non-recurring charge for settlement of VAT liability in Mexico.
(11) Costs associated with office move of principal UK administrative
subsidiary.
(12) Legal settlement at '21' Club.
(13) Amortization of deferred financing costs on repayment of debt.
(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 functional
currency.
(17) Deferred tax adjustment related to changes in tax treatment in multiple
jurisdictions.

                                                                             
                                                                             
ORIENT-EXPRESS HOTELS LTD.

NET DEBT TO ADJUSTED EBITDA CALCULATION

(Unaudited)

                                           Twelve months ended and as at
                                               December 31,     December 31,
                                                             
                                               2012             2011
$millions                                                
                                                                             
Cash
Cash and cash equivalents                      93.4             90.1
Restricted cash                                21.1             13.2
                                                                             
Total cash                                     114.5            103.3
                                                                             
Total debt
Working capital facilities                     -                -
Current portion of long-term debt and          90.1             77.1
capital leases
Current portion of long-term debt of
consolidated variable interest                 1.8              1.8
entities
Long-term debt and obligations under           431.4            466.8
capital leases
Long-term debt held by consolidated            96.2             88.7
variable interest entities
                                                                             
Total debt                                     619.5            634.4
                                                                             
Net debt                                       505.0            531.1
                                                                             
Adjusted EBITDA                                104.3            108.7
                                                                             
Net debt / adjusted EBITDA                 4.8 x          4.9 x
                                                                             

Management analyzes the operating performance of the Company on the basis of
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/(loss) 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/(loss) 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) that
management does not consider indicative of ongoing operations or that could
otherwise have a material effect on the comparability of the Company’s
operations. Adjusted EBITDA and adjusted net earnings/(loss) 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.

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 real estate 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 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, possible
challenges to the Company’s corporate governance structure, and the uncertain
outcome of the unsolicited proposal by The Indian Hotels Company Ltd to
acquire outstanding Company shares and the repercussions of the Board’s
rejection of that proposal. 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 Ltd. will conduct a conference call on Thursday,
February 21, 2013 at 10:00 am EST (3.00 pm GMT) which is accessible at +1 877
249 9037 (US toll free) or +44 (0)20 7784 1036 (Standard International). The
conference ID is 6454131. A re-play of the conference call will be available
until 7:00 pm (EST) Thursday, February 28, 2013 and can be accessed by calling
+1 800 358 7735 (US toll free) or +44 (0)20 3427 0598 (Standard International)
and entering replay access number 6454131#. A re-play will also be available
on the Company’s website: 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.

Contact:

Orient-Express Hotels Ltd.
Martin O’Grady, +44 20 3117 1333
Vice President, Chief Financial Officer
martin.ogrady@orient-express.com
or
Amy Brandt, +44 20 3117 1323
Director of Investor Relations
amy.brandt@orient-express.com
 
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