8-K

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported)                      December 9, 2003

LODGENET ENTERTAINMENT CORPORATION

(Exact Name of Registrant as Specified in Charter)

Delaware	0-22334	46-0371161
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

3900 West Innovation Street, Sioux Falls, SD	57107
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s telephone number, including area code                    (605) 988-1000

n/a

(Former Name or Former Address, if Changed Since Last Report)

TABLE OF CONTENTS

	Item 7. Financial Statements and Exhibits.
	Item 9. Regulation FD Disclosure.
SIGNATURES
EXHIBIT INDEX
EX-99.1 Press Release
EX-99.2 Power Point Presentation

Item 7. Financial Statements and Exhibits.

(c) Exhibits.

99.1	Press Release issued December 9, 2003, furnished pursuant to Item 9 of Form 8-K.
99.2	Power Point presentation delivered by Registrant’s Chief Executive Officer and President at the UBS 31st Annual Media Week Conference on December 9, 2003, furnished pursuant to Item 9 of Form 8-K.

Item 9. Regulation FD Disclosure.

LodgeNet Entertainment Corporation issued a press release on December 9, 2003, a copy of which is attached as Exhibit 99.1. The press release announced the signing of an agreement with Interstate Hotels & Resorts designating LodgeNet Entertainment Corporation as a preferred provider for supplying interactive television services for hotels under Interstate’s management.

LodgeNet Entertainment Corporation’s Chief Executive Officer and President, Scott C. Petersen, delivered a presentation at the UBS 31st Annual Media Week Conference on December 9, 2003. The Power Point presentation is attached as Exhibit 99.2.

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	LODGENET ENTERTAINMENT CORPORATION
Date: December 9, 2003	By	/s/ Scott C. Petersen
	Its	Scott C. Petersen President and Chief Executive Officer

2

EXHIBIT INDEX

99.1	Press Release issued December 9, 2003, furnished pursuant to Item 9 of Form 8-K.
99.2	Power Point presentation delivered by Registrant’s Chief Executive Officer and President at the UBS 31st Annual Media Week Conference on December 9, 2003, furnished pursuant to Item 9 of Form 8-K.

EX-99.1 3 c81465exv99w1.htm EX-99.1 PRESS RELEASE

FOR IMMEDIATE RELEASE

CONTACTS:
Ann Parker
Director of Corporate Communications
LodgeNet Entertainment Corporation
605-988-1000
communications@lodgenet.com Melissa Thompson
Vice President, Corporate Communications
Interstate Hotels & Resorts
703-387-3377
melissa.thompson@ihrco.com

LODGENET NAMED PREFERRED PROVIDER OF INTERACTIVE TV SERVICES
FOR INTERSTATE HOTELS & RESORTS

Agreement Links World’s Largest Hotel Broadband Provider,
Nation’s Largest Independent Hotel Management Company

     New York NY, December 9, 2003 – LodgeNet Entertainment Corporation (Nasdaq:LNET), the world’s largest provider of broadband interactive television services to the hospitality industry, and Interstate Hotels & Resorts, the nation’s largest independent hotel management company, today announced a long-term agreement designating LodgeNet as a preferred provider, supplying interactive TV services for hotels under Interstate’s management. The announcement came today from LodgeNet President and CEO Scott C. Petersen during his presentation at the UBS Media Week Conference in New York City.

     Under the agreement, LodgeNet will market sigNETure TV^SM, its latest-generation digital interactive TV system and services – including on-demand movies, music and TV programming plus games and interactive guest services – to more than 300 Interstate-managed hotels in the United States and Canada. The agreement covers more than 65,000 guest rooms under leading lodging brands including Hilton, Embassy Suites, Hampton Inn, Homewood Suites, Marriott, Courtyard By Marriott, Sheraton, Radisson, and Holiday Inn.

     “For 10 years we have built a history of standard-setting service to Interstate and its predecessor companies,” said Steve McCarty, Senior Vice President Sales and Hotel Relations for LodgeNet. “This agreement marks a key milestone in a relationship between two acknowledged industry leaders.”

     “We are excited about the opportunities our properties will have for offering their guests a superior interactive TV experience,” said Bob Morse, Chief Operating Officer for Interstate Hotels & Resorts. “Based on our prior experience with LodgeNet, we are convinced they are the provider that is best equipped to serve the broad range of geographic markets and flags represented in our portfolio.”

(more)

LodgeNet/H&R — Interactive TV Agreement December 9, 2003 2

About LodgeNet

     LodgeNet Entertainment Corporation (www.lodgenet.com) is the leading provider in the delivery of broadband, interactive services to the lodging industry, serving more hotels and guest rooms than any other provider in the world. These services include on-demand digital movies, digital music and music videos, Nintendo® video games, high-speed Internet access and other interactive television services designed to serve the needs of the lodging industry and the traveling public. As the largest company in the industry, LodgeNet provides service to nearly one million rooms (including more than 954,000 interactive guest pay rooms) in more than 5,800 hotel properties worldwide. More than 260 million travelers have access to LodgeNet systems on an annual basis. LodgeNet is listed on NASDAQ and trades under the symbol LNET.

About Interstate Hotels & Resorts

     Interstate Hotels & Resorts operates more than 300 hospitality properties with nearly 67,000 rooms in 42 states, the District of Columbia, Canada and Russia. BridgeStreet Corporate Housing Worldwide, an Interstate Hotels & Resorts subsidiary, is one of the world’s largest corporate housing providers, offering upscale, fully furnished corporate housing throughout the United States, Canada, the United Kingdom, France and 39 additional countries through its network partners. For more information about Interstate Hotels & Resorts, visit Interstate’s Website: www.ihrco.com.

     This press release contains forward-looking statements within the meaning of the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended, and are subject to risks, uncertainties, and other factors that could cause the Company’s actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. In addition to the risks and uncertainties discussed in the foregoing sections, such factors include, among others, the following: the effects of economic conditions, including in particular the economic condition of the lodging industry, competition, programming availability and quality, technological developments, developmental difficulties and delays, relationships with clients and property owners, the availability of capital to finance growth, the impact of government regulations, and other factors detailed, from time to time, in the Company’s filings with the Securities and Exchange Commission. These forward-looking statements speak only as of the date of this press release. The Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company’s expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.

     LodgeNet is a registered trademark of LodgeNet Entertainment Corporation. All rights reserved. Other names and brands may be claimed as the property of others.

# # #

EX-99.2 4 c81465exv99w2.htm EX-99.2 POWER POINT PRESENTATION

This presentation contains forward-looking statements within the meaning of the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended, and are subject to risks, uncertainties, and other factors that could cause the Company's actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others, the following: the effects of economic conditions, including in particular the economic condition of the lodging industry, competition, programming availability and quality, technological developments, developmental difficulties and delays, relationships with clients and property owners, the availability of capital to finance growth, the impact of government regulations, the occurrence of one or more future terrorist attacks, wars, public health concerns or other domestic or international crises and other factors detailed, from time to time, in the Company's filings with the Securities and Exchange Commission. These forward-looking statements speak only as of the date of this presentation. The Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company's expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.

CD Library Music Videos Music Channels Archived TV Comedy Sports TV Japan The Golf Channel Account Review Video Checkout Guest Survey Send a Greeting Link to Hotel Website Parental Control Multilingual 33 Games TV Web Access Internet Browsing 81 Movies 2003: Expanded Opportunities Since Introduction In Early 2001 Driving Contracts Over 435,000 Signed New and Renewals Driving Revenue INTERACTIVE DIGITAL SYSTEM

Increase 9 Mo. 2003 Over Tape % Change Movie Revenue $ 21.45 $ 5.30 32.8% Other Interactive Services 6.81 2.62 62.5% Total Per Guest Pay Room $ 28.26 $ 7.92 38.9% Interactive Digital System Demonstrable Increase in Revenue Per Room Over Tape FINANCIAL HIGHLIGHTS

Average Contract Length 6.5 Years 6.5 Years Annual Revenue $ 337 $ 337 Annual Cash Flow $ 134 $ 134 Total Cash Flow Over Life $ 871 $ 871 Average Capital Investment $ 396 $ 330 Payback Period 3.0 Years 2.0 Years Cash-on-Cash Return 34% 41% Digital Upgrade Digital New Single Room Economics * Revenue and cash flow based on TTM from Q3 '03 results; capital based on Q3 '03 levels INTERACTIVE DIGITAL SYSTEM

2000 423 2001 456 2002 439 0 Q1 2003 420 0 Q2 2003 408 0 Q3 2003 396 0 New Installation Digital Capital per Room TAPE DIGITAL DIGITAL DIGITAL DIGITAL $423 $456 $439 $420 $408 $396 DIGITAL FINANCIAL HIGHLIGHTS

1996 1997 1998 1999 2000 2001 2002 Q3 2003 GP Interactive 400245 511851 596000 660000 725075 812149 876348 913118 Total 516348 613407 703325 755000 806112 887830 952673 983158 1997 1999 2000 2001 1998 Driving Expansion of Interactive Room Base Largest Worldwide Hotel Provider 2002 Q3 2003 INTERACTIVE DIGITAL SYSTEM

STRONG & DIVERSIFIED CUSTOMERS

Total US/Canadian Lodging Market 75+ Hotel Room Market 16 25 Slice 3 7 Slice 4 27 More Than 300 rooms 75 - 149 rooms On Command LodgeNet Other Providers Unserved 151 - 299 rooms Under 75 rooms 4.5 Million Rooms 3.5 Million Rooms 30% meet economic criteria STRONG COMPETITIVE POSITION #1 Worldwide

13 36 Slice 3 29 Slice 4 7 Suburban Resort Highway Airport Urban DIVERSIFICATION Diversified Locations

LNET Occupancy Advantage Over Industry 1995 1996 1997 1998 1999 2000 2001 2002 LNET 0.699 0.7 0.69 0.683 0.672 0.674 0.643 0.633 480 500 460 460 390 360 430 410 QUALITY CUSTOMERS Basis Points LNET Average +410 Basis Points Higher Since 1995 Industry occupancy rates indexed at zero

2002 21407 2003 64 2004 862 0 2005 770 0 2006 795 0 2007 742 0 2008 725 2009 544 2010+ 689 Total Hotels 1% 16% 15% 16% 15% 14% STABILITY 10% 13% Future Contract Expirations Average Remaining Contract Life Approximately 4 Years

(in millions) Steady Revenue Growth Despite Occupancy Declines FINANCIAL HIGHLIGHTS Q1 '01 Q2 '01 Q3 '01 Q4 '01 Q1 '02 Q2 '02 Q3 '02 Q4 '02 Q1 '03 Q2 '03 Q3 '03 LTM Revenue 200 207 212 217 221 224 230 235 240 243 247 LTM Occupancy 0.675 0.669 0.655 0.645 0.635 0.632 0.631 0.631 0.628 0.622 0.622

Q3 2003 Q3 2002 % Change Movie Revenue $ 18.99 $ 18.98 0.1% Other Interactive Services 5.43 4.99 8.8% Total Per Guest Pay Room $ 24.42 $ 23.97 1.9% Q3 Revenue Per Room Analysis Occupancy Levels Flat Quarter over Quarter Digital Platform Installed in 39% of Rooms FINANCIAL HIGHLIGHTS

Q3 2003 Q3 2002 bp Change Gross Profit Margin 54.1% 56.4% -2.3 Reconciliation: Programming Costs (Product Mix) -1.2 TV Internet Integration -0.6 Hotel Incentive Commissions -0.5 Gross Profit Margin Analysis FINANCIAL HIGHLIGHTS

Improving Efficiencies Q3 2003 Q3 2002 % Change Guest Pay Operations Expense $2.98 $ 3.01 (1.0%) SG&A Expense 2.01 2.23 (9.9%) Total Operating Expenses $ 4.99 $5.24 (4.8%) FINANCIAL HIGHLIGHTS SG&A down to 8.0% of revenue, from 9.0% Q3 '02

Decreasing Capital Spending & Increasing Cash Flow from Ops 1st 6 Mo 2001 1st 9 Mo 2002 1st 9 Mo 2003 2001 39.2 56.9 41.3 Total Capital Spending Cash From Operations (in millions) FINANCIAL HIGHLIGHTS 1st 6 Mo 2001 1st 9 Mo 2002 1st 9 Mo 2003 2001 39.2 39.3 45.7

Cash from Operations Analysis Q3 2003 9 Mo.'03 9 Mo '02 Cash from Operations $ 20.0 $ 45.7 $ 39.4 Corp Capital / Minor Extensions (1.0) (6.8) (10.2) Post Corporate Free Cash Flow $ 19.0 $ 38.9 $ 29.2 Digital Renewal Investment * (5.1) (12.2) (17.7) Pre-Growth Cash Flow 13.9 26.7 11.5 New Room Investment ** (6.9) (23.1) (27.8) Post-Growth Cash Flow $ 7.0 $ 3.7 $ (16.3) *Digital Upgrade Rooms 15,529 35,941 50,445 **New Digital Rooms 17,546 56,664 62,736 (in millions) FINANCIAL HIGHLIGHTS

Cash from Operations Analysis Q3 2003 9 Mo.'03 9 Mo '02 Average Shares Outstanding 12,503 12,455 12,363 Cash from Operations $ 1.60 $ 3.67 $ 3.19 Pre-Growth Cash Flow $ 1.11 $ 2.14 $ .93 Post-Growth Cash Flow .56 .30 $(1.32) Growth Investment per Share $ .55 $ 1.84 (per outstanding share) FINANCIAL HIGHLIGHTS (in thousands)

Current Share Value $ 18.50 Implied Value per Subscriber $636.00 $3228.00* Entity Value Multiple Trailing 12 Months EBITDA 6.9x 12.6x** Valuation Analysis VALUATION Merrill Lynch Cable Television Brief - September 2, 2003 *Morgan Stanley Media: Entertainment & Cable/Satellite Report - December 2, 2003 LodgeNet Cable Sector Avg

INVESTMENT SUMMARY Continuous Innovation Operational Excellence World's Largest Provider Digital Rooms Driving Revenue Demonstrable Digital Model Experienced Management Team

Copyright 2003 LodgeNet Entertainment Corporation All rights reserved.

EX-99.1

exv99w1

EX-99.2

exv99w2