La Quinta — Merger or Acquisition (October 2001)
22 slides from La Quinta's merger presentation, Oct 18, 2001
Slide 1: Schedule 14A Information - Proxy Statement
QuickLinks -- Click here to rapidly navigate through this document SCHEDULE 14A (Rule 14a-101) INFORMATION REQUIRED IN PROXY STATEMENT SCHEDULE 14A INFORMATION Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 (Amendment No. ) Filed by the Registrant /x/ Filed by a Par
Slide 2: Forward-looking statements and proposed restructuring
(4) Date Filed: This filing contains forward-looking statements that are subject to a number of risks and uncertainties. Actual results and the timing or occurrence of certain events may differ materially from such forward-looking statements. A complete discussion regarding such forward-looking stat
Slide 3: Investor Presentation October 2001: restructure the La Quinta Companies
*** The following is the Investor Presentation: INVESTOR PRESENTATION October 2001 Management looks forward to your continued support as we work to restructure The La Quinta Companies • Current Structure • Cannot maintain La Quinta Properties' REIT status • Cannot grow La Quinta • Proposed Structure
Slide 4: Additional Information and Where To Find It
La Quinta Properties, Inc. ("Realty") and La Quinta Corporation ("Operating"), intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements, and are including this statement for purposes of complying with these safe harbor provisions. Although the
Slide 5: Agenda; Successful Turnaround - Experienced Lodging Management Team
Companies' 2001 annual meeting of shareholders. Investors may obtain additional information regarding the interests of such participants by reading the joint proxy statement when it becomes available. 5 Agenda • Successful Turnaround • Operations in Review • Need for Restructuring • Future Growth 6
Slide 6: New Management Team Has Delivered on Turnaround Plan
Successful Turnaround New Management Team Has Delivered on Turnaround Plan Sell Healthcare Assets /x/ • Sold $1.6 billion in healthcare assets Reduce Debt /x/ • Reduced debt by $1.6 billion and completed $375 million credit facility Strengthen Lodging /x/ • Improved lodging operations and initiated
Slide 7: Improved Lodging Business; Improved Equity Valuations
Significant progress in transitioning to a focused lodging company 11 Successful Turnaround Improved Lodging Business • Enhanced RevPAR performance • Reduced costs per rented room • Improved information systems • Launched new sales and marketing programs • Strengthened properties with capital improv
Slide 8: Operations in Review - Introduction
• Successful Turnaround • Operations in Review • Need for Restructuring • Future Growth 14 Operations in Review Introduction • La Quinta hotel chain was founded in San Antonio, Texas in 1968 • Among the largest self-operated, limited service lodging chains in the country • 300+ properties with 38,00
Slide 9: Well-Maintained Properties; Challenging Industry Environment
1996-1999 $630 Million 70 La Quinta Inn & Suites built 1993-2000 $196 Million Maintenance CapEx Over $1 billion invested in brand over the last seven years 16 Operations in Review Challenging Industry Environment • Prior to Sept 11th, business travel was reduced as the economy slowed • After Sept 11
Slide 10: Challenging Industry Environment - Historical Perspective and Supply Outlook
• Lodging industry battered in 1991 with U.S. economic recession and Persian Gulf War • With improved economy and favorable supply-demand fundamentals, industry went on to produce record RevPAR REVPAR PERFORMANCE SUPPLY-DEMAND Source: Smith Travel Research 18 Operations in Review Challenging Industr
Slide 11: Ability to Manage in a Weak Environment - Liquidity and Balance Sheet
Operations in Review La Quinta's Ability to Manage in a Weak Environment – Excellent Liquidity ($ in Millions) Cash $ 140 Revolver 225 $ 365 2001 Debt Maturities $ 55 2002 Debt Maturities 37 $ 92 At September 30, 2001 20 Operations in Review La Quinta's Ability to Manage in a Weak Environment - Stro
Slide 12: EBITDA and Low Breakeven
EBITDA: Lodging $ 222 2000 Results Healthcare & Other 35 Current run-rate Total $ 257 22 Operations in Review La Quinta's Ability to Manage in a Weak Environment - Low Breakeven • La Quinta Results for Year 2000 • Occupancy 63.4% • Average Daily Rate $ 62.62 • Lodging Breakeven – EBITDA • At an aver
Slide 13: Challenges with the Current Grandfathered Paired Share Structure
• Inability to continue to meet REIT qualifications • REITs are required to have no more than 5% of their gross income from non-qualified sources ("bad income") • La Quinta's healthcare asset sales have reduced good income • La Quinta's generation of hotel royalty fees have increased bad income • La
Slide 14: New Structure Resolves Challenges; Benefits of the New Structure
• No longer subject to "grandfathered" paired share REIT restrictions • By issuing Class A shares, majority of the REIT's value will be owned by LQ Corporation • By issuing Class B shares, LQ Properties meets minimum ownership requirement to maintain REIT status 27 Need for Restructuring Benefits of
Slide 15: Terms of the New Structure
Need for Restructuring Terms of the New Structure La Quinta Corporation No material change in terms of common stock which will remain outstanding La Quinta Properties, Inc. Class A Class B Holders: Owned 100% by LQ Corporation Owned 100% by existing shareholders Value: >50% of the value of LQ Proper
Slide 16: Dividend Policy; Other Issues; New Equity Incentive Plan
• Class A Common Stock (owned directly by LQ Corporation) — Will receive remaining REIT distribution, if any, for use in growing La Quinta 30 Need for Restructuring Other Issues • Tax treatment • Tax-free transaction • Treated as a recapitalization • Shareholders will not recognize gains or losses •
Slide 17: Future Growth - Enhanced Shareholder Value
• Operations in Review • Need for Restructuring • Future Growth 33 Future Growth Enhanced Shareholder Value 34 Future Growth Opportunity for Expansion
Slide 18: Support for Growth; Existing Unit Improvements
35 Future Growth Support for Growth • Management Team with a Proven Track Record • Valuable Brand with Loyal Customer Base • Benefits from Upgrading Lodging Portfolio • Significant Free Cash Flow from Existing Operations • Strong Balance Sheet with Large Cash Balances • Availability Under the Revolv
Slide 19: Operating Efficiencies; Franchising
• Improve operating efficiencies • Reduce corporate overhead TOTAL LA QUINTA EBITDA 37 Future Growth Franchising • Increase market share • Grow through minimal capital investment • Generate high margin, recurring fee income • Leverage La Quinta's 30+ year brand history and operating experience • Mai
Slide 20: Capacity for Growth; Development and Acquisitions
AVAILABLE CAPITAL La Quinta will have almost three-quarters of $1 billion of capital available for growth 39 Future Growth Development and Acquisitions • Development • Redevelop Existing Locations — High-demand markets — Improve property economics • Joint Venture on New Development — Flagship locati
Slide 21: Share Repurchase; Enhanced Shareholder Value
• Purchases will be conducted from time-to-time through open market and privately-negotiated transactions • Bank covenants provide for additional share repurchase programs in the future 41 Future Growth Enhanced Shareholder Value 42 Management looks forward to your continued support as we work to re
Slide 22: Investor Presentation - Current vs New Structure
Existing Unit Improvements /x/ /x/ Franchising // /x/ Development // /x/ Acquisitions // /x/ Share Repurchase // /x/ 44 INVESTOR PRESENTATION October 2001 QuickLinks