UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
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(Mark One)
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x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
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THE SECURITIES EXCHANGE ACT OF 1934
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For the quarterly period ended June 30, 2012
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OR
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
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THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from to
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Commission file number:
001-14236
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(FelCor Lodging Trust Incorporated)
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Commission file number:
333-39595-01
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(FelCor Lodging Limited Partnership)
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FelCor Lodging Trust Incorporated
FelCor Lodging Limited Partnership
(Exact Name of Registrant as Specified in Its Charter)
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Maryland
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(FelCor Lodging Trust Incorporated)
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75-2541756
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Delaware
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(FelCor Lodging Limited Partnership)
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75-2544994
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(State or Other Jurisdiction of Incorporation or Organization)
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(I.R.S. Employer
Identification No.)
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545 E. John Carpenter Freeway, Suite 1300, Irving, Texas
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75062
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(Address of Principal Executive Offices)
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(Zip Code)
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(972) 444-4900
(Registrant’s Telephone Number, Including Area Code)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
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FelCor Lodging Trust Incorporated
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Yes
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No
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FelCor Lodging Limited Partnership
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¨
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Yes
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þ
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No
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Note: As a voluntary filer not subject to the filing requirements of Section 13 or 15(d) of the Exchange Act, the registrant has filed all reports pursuant to Section 13 or 15(d) as if the registrant was subject to such filing requirements.
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S‑T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
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FelCor Lodging Trust Incorporated
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Yes
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¨
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No
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FelCor Lodging Limited Partnership
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Yes
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No
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Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
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FelCor Lodging Trust Incorporated:
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Large accelerated filer
o
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Accelerated filer
þ
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Non-accelerated filer
o
(Do not check if a smaller reporting company)
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Smaller reporting company
o
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FelCor Lodging Limited Partnership:
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Large accelerated filer
o
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Accelerated filer
¨
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Non-accelerated filer
þ
(Do not check if a smaller reporting company)
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Smaller reporting company
o
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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
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FelCor Lodging Trust Incorporated
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Yes
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No
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FelCor Lodging Limited Partnership
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¨
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Yes
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No
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At
July 31, 2012
, FelCor Lodging Trust Incorporated had issued and outstanding
124,226,805
shares of common stock.
EXPLANATORY NOTE
This quarterly report on Form 10-Q for the quarter ended June 30, 2012, combines the filings for FelCor Lodging Trust Incorporated, or FelCor, and FelCor Lodging Limited Partnership, or FelCor LP. Where it is important to distinguish between the two, we either refer specifically to FelCor or FelCor LP. Otherwise we use the terms “we” or “our” to refer to FelCor and FelCor LP, collectively (including their consolidated subsidiaries), unless the context indicates otherwise.
FelCor is a Maryland corporation operating as a real estate investment trust, or REIT, and is the sole general partner of, and the owner of a greater than 99% partnership interest in, FelCor LP. Through FelCor LP, FelCor owns hotels and conducts business. As the sole general partner of FelCor LP, FelCor has exclusive and complete control of FelCor LP’s day-to-day management.
We believe combining periodic reports for FelCor and FelCor LP into single combined reports results in the following benefits:
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presents our business as a whole (the same way management views and operates the business);
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eliminates duplicative disclosure and provides a more streamlined presentation (a substantial portion of our disclosure applies to both FelCor and FelCor LP); and
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saves time and cost by preparing combined reports instead of separate reports.
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We operate the company as one enterprise. The employees of FelCor direct the management and operation of FelCor LP. With sole control of FelCor LP, FelCor consolidates FelCor LP for financial reporting purposes. FelCor has no assets other than its investment in FelCor LP and no liabilities separate from FelCor LP. Therefore, the reported assets and liabilities for FelCor and FelCor LP are substantially identical.
The substantive difference between FelCor and FelCor LP filings is that FelCor is a REIT with publicly-traded equity, while FelCor LP is a partnership with no publicly-traded equity. This difference is reflected in the financial statements on the equity (or partners’ capital) section of the consolidated balance sheets and in the consolidated statements of equity (or partners’ capital). Apart from the different equity treatment, the consolidated financial statements for FelCor and FelCor LP are nearly identical, except the net income (loss) attributable to redeemable noncontrolling interests in FelCor LP is deducted from FelCor’s net income (loss) in order to arrive at net income (loss) attributable to FelCor common stockholders. The noncontrolling interest is included in net income (loss) attributable to FelCor LP common unitholders. The holders of noncontrolling interests in FelCor LP are unaffiliated with FelCor, and in aggregate, hold less than 1% of the operating partnership units.
We present the sections in this report combined unless separate disclosure is required for clarity.
FELCOR LODGING TRUST INCORPORATED and
FELCOR LODGING LIMITED PARTNERSHIP
INDEX
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Page
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PART I − FINANCIAL INFORMATION
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Item 1.
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Financial Statements
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FelCor Lodging Trust Incorporated:
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Consolidated Balance Sheets – June 30, 2012 and December 31, 2011 (unaudited)
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Consolidated Statements of Operations – For the Three and Six Months Ended June 30, 2012 and 2011 (unaudited)
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Consolidated Statements of Comprehensive Income (Loss) – For the Three and Six Months Ended June 30, 2012 and 2011 (unaudited)
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Consolidated Statements of Changes in Equity – For the Six Months Ended June 30, 2012 and 2011 (unaudited)
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Consolidated Statements of Cash Flows – For the Six Months Ended June 30, 2012 and 2011 (unaudited)
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FelCor Lodging Limited Partnership:
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Consolidated Balance Sheets – June 30, 2012 and December 31, 2011 (unaudited)
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Consolidated Statements of Operations – For the Three and Six Months Ended June 30, 2012 and 2011 (unaudited)
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Consolidated Statements of Comprehensive Income (Loss) – For the Three and Six Months Ended June 30, 2012 and 2011 (unaudited)
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Consolidated Statements of Partners' Capital – For the Six Months Ended June 30, 2012 and 2011 (unaudited)
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Consolidated Statements of Cash Flows – For the Six Months Ended June 30, 2012 and 2011 (unaudited)
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Notes to Consolidated Financial Statements
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Item 2.
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Management’s Discussion and Analysis of Financial Condition and Results of Operations
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General
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Results of Operations
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Non-GAAP Financial Measures
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Pro Rata Share of Rooms Owned
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Hotel Portfolio Composition
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Hotel Operating Statistics
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Hotel Portfolio
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Liquidity and Capital Resources
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Inflation
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Seasonality
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Disclosure Regarding Forward-Looking Statements
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Item 3.
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Quantitative and Qualitative Disclosures about Market Risk
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Item 4.
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Controls and Procedures
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PART II − OTHER INFORMATION
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Item 2.
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Unregistered Sales of Equity Securities and Use of Proceeds
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Item 6.
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Exhibits
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SIGNATURES
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PART I -- FINANCIAL INFORMATION
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Item 1.
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Financial Statements.
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FELCOR LODGING TRUST INCORPORATED
CONSOLIDATED BALANCE SHEETS
(unaudited, in thousands)
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June 30, 2012
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December 31, 2011
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Assets
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Investment in hotels, net of accumulated depreciation of $948,838 and $987,895 at June 30, 2012 and December 31, 2011, respectively
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$
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1,876,168
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$
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1,953,795
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Hotel development
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130,727
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120,163
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Investment in unconsolidated entities
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59,939
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70,002
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Cash and cash equivalents
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64,099
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93,758
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Restricted cash
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83,777
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84,240
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Accounts receivable, net of allowance for doubtful accounts of $368 and $333 at June 30, 2012 and December 31, 2011, respectively
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30,987
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27,135
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Deferred expenses, net of accumulated amortization of $14,588 and $13,119 at June 30, 2012 and December 31, 2011, respectively
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26,303
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29,772
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Other assets
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30,833
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24,363
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Total assets
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$
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2,302,833
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$
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2,403,228
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Liabilities and Equity
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Debt, net of discount of $27,026 and $32,069 at June 30, 2012 and December 31, 2011, respectively
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$
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1,534,752
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$
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1,596,466
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Distributions payable
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76,293
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76,293
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Accrued expenses and other liabilities
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135,954
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140,548
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Total liabilities
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1,746,999
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1,813,307
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Commitments and contingencies
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Redeemable noncontrolling interests in FelCor LP, 627 and 636 units issued and outstanding at June 30, 2012 and December 31, 2011, respectively
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3,320
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3,026
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Equity:
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Preferred stock, $0.01 par value, 20,000 shares authorized:
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Series A Cumulative Convertible Preferred Stock, 12,880 shares, liquidation value of $322,011, issued and outstanding at June 30, 2012 and December 31, 2011
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309,362
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309,362
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Series C Cumulative Redeemable Preferred Stock, 68 shares, liquidation value of $169,950, issued and outstanding at June 30, 2012 and December 31, 2011
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169,412
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169,412
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Common stock, $0.01 par value, 200,000 shares authorized; 124,227 and 124,281 shares issued and outstanding at June 30, 2012, and December 31, 2011, respectively
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1,242
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1,243
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Additional paid-in capital
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2,353,397
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2,353,251
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Accumulated other comprehensive income
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25,729
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25,738
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Accumulated deficit
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(2,333,621
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(2,297,468
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Total FelCor stockholders’ equity
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525,521
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561,538
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Noncontrolling interests in other partnerships
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26,993
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25,357
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Total equity
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552,514
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586,895
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Total liabilities and equity
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$
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2,302,833
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$
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2,403,228
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The accompanying notes are an integral part of these consolidated financial statements.
FELCOR LODGING TRUST INCORPORATED
CONSOLIDATED STATEMENTS OF OPERATIONS
For the
Three and Six
Months Ended
June 30, 2012
and
2011
(unaudited, in thousands, except for per share data)
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Three Months Ended June 30,
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Six Months Ended June 30,
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2012
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2011
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2012
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2011
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Revenues:
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Hotel operating revenue
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$
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256,045
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$
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239,392
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$
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477,212
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$
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446,416
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Other revenue
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956
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1,011
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1,231
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1,236
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Total revenues
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257,001
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240,403
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478,443
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447,652
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Expenses:
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Hotel departmental expenses
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88,972
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84,639
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172,188
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161,029
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Other property-related costs
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65,508
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62,151
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129,943
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122,683
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Management and franchise fees
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11,969
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11,077
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22,335
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20,732
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Taxes, insurance and lease expense
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25,192
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22,341
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47,505
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42,119
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Corporate expenses
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6,167
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6,910
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14,379
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16,447
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Depreciation and amortization
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31,789
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30,957
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63,362
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61,744
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Impairment loss
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1,335
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7,003
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1,335
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7,003
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Other expenses
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800
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1,616
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1,763
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2,247
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Total operating expenses
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231,732
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226,694
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452,810
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434,004
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Operating income
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25,269
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13,709
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25,633
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13,648
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Interest expense, net
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(31,647
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(34,347
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(62,688
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(67,116
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Debt extinguishment
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(162
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(23,660
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(169
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(23,905
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Gain on involuntary conversion, net
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—
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21
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—
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171
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Loss before equity in income (loss) from unconsolidated entities
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(6,540
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(44,277
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(37,224
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(77,202
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Equity in income (loss) from unconsolidated entities
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1,362
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31
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1,138
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(1,552
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Loss from continuing operations
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(5,178
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(44,246
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(36,086
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(78,754
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Income from discontinued operations
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17,206
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1,849
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19,253
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4,631
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Net income (loss)
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12,028
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(42,397
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)
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(16,833
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)
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(74,123
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)
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Net loss (income) attributable to noncontrolling interests in other partnerships
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(148
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)
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(51
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54
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(109
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Net loss (income) attributable to redeemable noncontrolling interests in FelCor LP
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(11
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183
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185
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303
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Net income (loss) attributable to FelCor
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11,869
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(42,265
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)
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(16,594
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(73,929
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)
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Preferred dividends
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(9,678
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(9,678
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(19,356
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(19,356
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Net income (loss) attributable to FelCor common stockholders
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$
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2,191
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$
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(51,943
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$
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(35,950
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$
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(93,285
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)
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Basic and diluted per common share data:
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Loss from continuing operations
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$
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(0.12
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$
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(0.44
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$
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(0.45
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)
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$
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(0.90
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)
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Net income (loss)
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$
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0.02
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$
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(0.42
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)
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$
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(0.29
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$
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(0.85
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)
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Basic and diluted weighted average common shares outstanding
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123,638
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122,992
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123,651
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109,249
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The accompanying notes are an integral part of these consolidated financial statements.
FELCOR LODGING TRUST INCORPORATED
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
For the
Three and Six
Months Ended
June 30, 2012
and
2011
(unaudited, in thousands)
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Three Months Ended
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Six Months Ended
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June 30,
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June 30,
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2012
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2011
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2012
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2011
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Net income (loss)
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$
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12,028
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$
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(42,397
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)
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$
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(16,833
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)
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$
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(74,123
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)
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Foreign currency translation adjustment
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(317
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)
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186
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(9
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1,478
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Comprehensive income (loss)
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11,711
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(42,211
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)
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(16,842
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)
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(72,645
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)
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Comprehensive loss (income) attributable to noncontrolling interests in other partnerships
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(148
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)
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(51
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54
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(109
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)
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Comprehensive loss (income) attributable to redeemable noncontrolling interests in FelCor LP
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(9
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183
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185
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299
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Comprehensive income (loss) attributable to FelCor
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$
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11,554
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$
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(42,079
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)
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$
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(16,603
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)
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$
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(72,455
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)
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The accompanying notes are an integral part of these consolidated financial statements.
FELCOR LODGING TRUST INCORPORATED
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
For the
Six
Months Ended
June 30, 2012
and
2011
(unaudited, in thousands)
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Preferred Stock
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Common Stock
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Additional Paid-in Capital
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Accumulated Other Comprehensive Income
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Noncontrolling Interests in Other Partnerships
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Number of Shares
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Amount
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Number of Shares
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Amount
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Accumulated Deficit
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Treasury Stock
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Comprehensive Loss
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Total Equity
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Balance at December 31, 2010
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12,948
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$
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478,774
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101,038
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$
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1,010
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$
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2,190,308
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$
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26,457
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$
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(2,054,625
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)
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$
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(73,341
|
)
|
|
$
|
19,795
|
|
|
|
|
|
$
|
588,378
|
|
Issuance of common stock
|
—
|
|
|
—
|
|
|
27,600
|
|
|
276
|
|
|
158,200
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
158,476
|
|
Retirement of treasury stock
|
—
|
|
|
—
|
|
|
(4,156
|
)
|
|
(41
|
)
|
|
—
|
|
|
—
|
|
|
(73,300
|
)
|
|
73,341
|
|
|
—
|
|
|
|
|
—
|
|
Issuance of stock awards
|
—
|
|
|
—
|
|
|
86
|
|
|
1
|
|
|
499
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
|
500
|
|
Amortization of stock awards
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,626
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
|
1,626
|
|
Forfeiture of stock awards
|
—
|
|
|
—
|
|
|
(10
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(78
|
)
|
|
—
|
|
|
—
|
|
|
|
|
|
(78
|
)
|
Conversion of operating partnership units
into common shares
|
—
|
|
|
—
|
|
|
11
|
|
|
—
|
|
|
79
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
79
|
|
Allocation to redeemable noncontrolling
interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
239
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
|
239
|
|
Contribution from noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
796
|
|
|
|
|
|
796
|
|
Distribution to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(670
|
)
|
|
|
|
|
(670
|
)
|
Other
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(68
|
)
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
|
|
|
(70
|
)
|
Preferred dividends:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$0.975 per Series A preferred share
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(12,558
|
)
|
|
—
|
|
|
—
|
|
|
|
|
|
(12,558
|
)
|
$1.00 per Series C depositary preferred
share
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,798
|
)
|
|
—
|
|
|
—
|
|
|
|
|
|
(6,798
|
)
|
Comprehensive loss:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign exchange translation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,474
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
$
|
1,474
|
|
|
|
|
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(73,929
|
)
|
|
—
|
|
|
109
|
|
|
(73,820
|
)
|
|
|
|
Comprehensive loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(72,346
|
)
|
|
(72,346
|
)
|
Balance at June 30, 2011
|
12,948
|
|
|
$
|
478,774
|
|
|
124,569
|
|
|
$
|
1,246
|
|
|
$
|
2,350,883
|
|
|
$
|
27,931
|
|
|
$
|
(2,221,290
|
)
|
|
$
|
—
|
|
|
$
|
20,030
|
|
|
|
|
|
$
|
657,574
|
|
Balance at December 31, 2011
|
12,948
|
|
|
$
|
478,774
|
|
|
124,281
|
|
|
$
|
1,243
|
|
|
$
|
2,353,251
|
|
|
$
|
25,738
|
|
|
$
|
(2,297,468
|
)
|
|
$
|
—
|
|
|
$
|
25,357
|
|
|
|
|
|
$
|
586,895
|
|
Amortization of stock awards
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
432
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
|
432
|
|
Forfeiture of stock awards
|
—
|
|
|
—
|
|
|
(63
|
)
|
|
(1
|
)
|
|
193
|
|
|
—
|
|
|
(199
|
)
|
|
—
|
|
|
—
|
|
|
|
|
|
(7
|
)
|
Conversion of operating partnership units
into common shares
|
—
|
|
|
—
|
|
|
9
|
|
|
—
|
|
|
33
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
33
|
|
Allocation to redeemable noncontrolling
interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(512
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
|
(512
|
)
|
Contribution from noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,310
|
|
|
|
|
|
2,310
|
|
Distribution to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(620
|
)
|
|
|
|
|
(620
|
)
|
Other
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
—
|
|
|
|
|
|
(4
|
)
|
Preferred dividends:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$0.975 per Series A preferred share
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(12,558
|
)
|
|
—
|
|
|
—
|
|
|
|
|
|
(12,558
|
)
|
$1.00 per Series C depositary preferred
share
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,798
|
)
|
|
—
|
|
|
—
|
|
|
|
|
|
(6,798
|
)
|
Comprehensive loss:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign exchange translation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
$
|
(9
|
)
|
|
|
|
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(16,594
|
)
|
|
—
|
|
|
(54
|
)
|
|
(16,648
|
)
|
|
|
|
Comprehensive loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(16,657
|
)
|
|
(16,657
|
)
|
Balance at June 30, 2012
|
12,948
|
|
|
$
|
478,774
|
|
|
124,227
|
|
|
$
|
1,242
|
|
|
$
|
2,353,397
|
|
|
$
|
25,729
|
|
|
$
|
(2,333,621
|
)
|
|
$
|
—
|
|
|
$
|
26,993
|
|
|
|
|
$
|
552,514
|
|
The accompanying notes are an integral part of these consolidated financial statements.
FELCOR LODGING TRUST INCORPORATED
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the
Six
Months Ended
June 30, 2012
and
2011
(unaudited, in thousands)
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30,
|
|
2012
|
|
2011
|
Cash flows from operating activities:
|
|
|
|
Net loss
|
$
|
(16,833
|
)
|
|
$
|
(74,123
|
)
|
Adjustments to reconcile net loss to net cash provided by operating activities:
|
|
|
|
Depreciation and amortization
|
64,781
|
|
|
70,854
|
|
Gain on sale of hotels, net
|
(16,719
|
)
|
|
(6,660
|
)
|
Gain on involuntary conversion, net
|
—
|
|
|
(171
|
)
|
Amortization of deferred financing fees and debt discount
|
9,072
|
|
|
9,351
|
|
Amortization of unearned officers’ and directors’ compensation
|
2,538
|
|
|
3,577
|
|
Equity in loss (income) from unconsolidated entities
|
(1,138
|
)
|
|
1,552
|
|
Distributions of income from unconsolidated entities
|
2,098
|
|
|
810
|
|
Debt extinguishment
|
812
|
|
|
23,961
|
|
Impairment loss
|
1,335
|
|
|
12,303
|
|
Changes in assets and liabilities:
|
|
|
|
Accounts receivable
|
(3,776
|
)
|
|
(11,449
|
)
|
Restricted cash - operations
|
—
|
|
|
2,005
|
|
Other assets
|
(8,765
|
)
|
|
(12,604
|
)
|
Accrued expenses and other liabilities
|
(3,458
|
)
|
|
(4,880
|
)
|
Net cash flow provided by operating activities
|
29,947
|
|
|
14,526
|
|
Cash flows from investing activities:
|
|
|
|
Acquisition of hotels
|
—
|
|
|
(137,985
|
)
|
Improvements and additions to hotels
|
(73,349
|
)
|
|
(35,244
|
)
|
Hotel development
|
(10,317
|
)
|
|
—
|
|
Additions to condominium project
|
—
|
|
|
(318
|
)
|
Proceeds from asset dispositions
|
100,406
|
|
|
52,093
|
|
Change in restricted cash – investing
|
463
|
|
|
(412
|
)
|
Insurance proceeds
|
—
|
|
|
282
|
|
Distributions from unconsolidated entities
|
9,103
|
|
|
825
|
|
Net cash flow provided by (used in) investing activities
|
26,306
|
|
|
(120,759
|
)
|
Cash flows from financing activities:
|
|
|
|
Proceeds from borrowings
|
71,000
|
|
|
1,087,267
|
|
Repayment of borrowings
|
(137,758
|
)
|
|
(1,050,566
|
)
|
Payment of deferred financing fees
|
(1,453
|
)
|
|
(18,230
|
)
|
Change in restricted cash - financing
|
—
|
|
|
(24,000
|
)
|
Distributions paid to noncontrolling interests
|
(620
|
)
|
|
(670
|
)
|
Contributions from noncontrolling interests
|
2,310
|
|
|
796
|
|
Distributions paid to preferred stockholders
|
(19,356
|
)
|
|
(19,356
|
)
|
Net proceeds from common stock issuance
|
—
|
|
|
158,476
|
|
Proceeds from FelCor LP unit issuance
|
—
|
|
|
2,500
|
|
Net cash flow provided by (used in) financing activities
|
(85,877
|
)
|
|
136,217
|
|
Effect of exchange rate changes on cash
|
(35
|
)
|
|
93
|
|
Net change in cash and cash equivalents
|
(29,659
|
)
|
|
30,077
|
|
Cash and cash equivalents at beginning of periods
|
93,758
|
|
|
200,972
|
|
Cash and cash equivalents at end of periods
|
$
|
64,099
|
|
|
$
|
231,049
|
|
|
|
|
|
Supplemental cash flow information – interest paid, net of capitalized interest
|
$
|
54,586
|
|
|
$
|
59,344
|
|
The accompanying notes are an integral part of these consolidated financial statements.
FELCOR LODGING LIMITED PARTNERSHIP
CONSOLIDATED BALANCE SHEETS
(unaudited, in thousands)
|
|
|
|
|
|
|
|
|
|
June 30,
|
|
December 31,
|
|
2012
|
|
2011
|
Assets
|
|
|
|
Investment in hotels, net of accumulated depreciation of $948,838 and $987,895 at June 30, 2012 and December 31, 2011, respectively
|
$
|
1,876,168
|
|
|
$
|
1,953,795
|
|
Hotel development
|
130,727
|
|
|
120,163
|
|
Investment in unconsolidated entities
|
59,939
|
|
|
70,002
|
|
Cash and cash equivalents
|
64,099
|
|
|
93,758
|
|
Restricted cash
|
83,777
|
|
|
84,240
|
|
Accounts receivable, net of allowance for doubtful accounts of $368 and $333 at June 30, 2012 and December 31, 2011, respectively
|
30,987
|
|
|
27,135
|
|
Deferred expenses, net of accumulated amortization of $14,588 and $13,119 at June 30, 2012 and December 31, 2011, respectively
|
26,303
|
|
|
29,772
|
|
Other assets
|
30,833
|
|
|
24,363
|
|
Total assets
|
$
|
2,302,833
|
|
|
$
|
2,403,228
|
|
Liabilities and Partners’ Capital
|
|
|
|
Debt, net of discount of $27,026 and $32,069 at June 30, 2012 and December 31, 2011, respectively
|
$
|
1,534,752
|
|
|
$
|
1,596,466
|
|
Distributions payable
|
76,293
|
|
|
76,293
|
|
Accrued expenses and other liabilities
|
135,954
|
|
|
140,548
|
|
Total liabilities
|
1,746,999
|
|
|
1,813,307
|
|
Commitments and contingencies
|
|
|
|
|
|
Redeemable units, 627 and 636 units issued and outstanding at June 30, 2012 and December 31, 2011, respectively
|
3,320
|
|
|
3,026
|
|
Capital:
|
|
|
|
Preferred units:
|
|
|
|
Series A Cumulative Convertible Preferred Units, 12,880 units issued and outstanding at June 30, 2012 and December 31, 2011
|
309,362
|
|
|
309,362
|
|
Series C Cumulative Redeemable Preferred Units, 68 units issued and outstanding at June 30, 2012 and December 31, 2011
|
169,412
|
|
|
169,412
|
|
Common units, 124,227 and 124,281 units issued and outstanding at June 30, 2012 and December 31, 2011, respectively
|
20,908
|
|
|
56,916
|
|
Accumulated other comprehensive income
|
25,839
|
|
|
25,848
|
|
Total FelCor LP partners’ capital
|
525,521
|
|
|
561,538
|
|
Noncontrolling interests
|
26,993
|
|
|
25,357
|
|
Total partners’ capital
|
552,514
|
|
|
586,895
|
|
Total liabilities and partners’ capital
|
$
|
2,302,833
|
|
|
$
|
2,403,228
|
|
The accompanying notes are an integral part of these consolidated financial statements.
FELCOR LODGING LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF OPERATIONS
For the
Three and Six
Months Ended
June 30, 2012
and
2011
(unaudited, in thousands, except for per unit data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
June 30,
|
|
June 30,
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
Revenues:
|
|
|
|
|
|
|
|
Hotel operating revenue
|
$
|
256,045
|
|
|
$
|
239,392
|
|
|
$
|
477,212
|
|
|
$
|
446,416
|
|
Other revenue
|
956
|
|
|
1,011
|
|
|
1,231
|
|
|
1,236
|
|
Total revenues
|
257,001
|
|
|
240,403
|
|
|
478,443
|
|
|
447,652
|
|
Expenses:
|
|
|
|
|
|
|
|
Hotel departmental expenses
|
88,972
|
|
|
84,639
|
|
|
172,188
|
|
|
161,029
|
|
Other property-related costs
|
65,508
|
|
|
62,151
|
|
|
129,943
|
|
|
122,683
|
|
Management and franchise fees
|
11,969
|
|
|
11,077
|
|
|
22,335
|
|
|
20,732
|
|
Taxes, insurance and lease expense
|
25,192
|
|
|
22,341
|
|
|
47,505
|
|
|
42,119
|
|
Corporate expenses
|
6,167
|
|
|
6,910
|
|
|
14,379
|
|
|
16,447
|
|
Depreciation and amortization
|
31,789
|
|
|
30,957
|
|
|
63,362
|
|
|
61,744
|
|
Impairment loss
|
1,335
|
|
|
7,003
|
|
|
1,335
|
|
|
7,003
|
|
Other expenses
|
800
|
|
|
1,616
|
|
|
1,763
|
|
|
2,247
|
|
Total operating expenses
|
231,732
|
|
|
226,694
|
|
|
452,810
|
|
|
434,004
|
|
Operating income
|
25,269
|
|
|
13,709
|
|
|
25,633
|
|
|
13,648
|
|
Interest expense, net
|
(31,647
|
)
|
|
(34,347
|
)
|
|
(62,688
|
)
|
|
(67,116
|
)
|
Debt extinguishment
|
(162
|
)
|
|
(23,660
|
)
|
|
(169
|
)
|
|
(23,905
|
)
|
Gain on involuntary conversion, net
|
—
|
|
|
21
|
|
|
—
|
|
|
171
|
|
Loss before equity in income (loss) from unconsolidated entities
|
(6,540
|
)
|
|
(44,277
|
)
|
|
(37,224
|
)
|
|
(77,202
|
)
|
Equity in income (loss) from unconsolidated entities
|
1,362
|
|
|
31
|
|
|
1,138
|
|
|
(1,552
|
)
|
Loss from continuing operations
|
(5,178
|
)
|
|
(44,246
|
)
|
|
(36,086
|
)
|
|
(78,754
|
)
|
Income from discontinued operations
|
17,206
|
|
|
1,849
|
|
|
19,253
|
|
|
4,631
|
|
Net income (loss)
|
12,028
|
|
|
(42,397
|
)
|
|
(16,833
|
)
|
|
(74,123
|
)
|
Net loss (income) attributable to noncontrolling interests
|
(148
|
)
|
|
(51
|
)
|
|
54
|
|
|
(109
|
)
|
Net income (loss) attributable to FelCor LP
|
11,880
|
|
|
(42,448
|
)
|
|
(16,779
|
)
|
|
(74,232
|
)
|
Preferred distributions
|
(9,678
|
)
|
|
(9,678
|
)
|
|
(19,356
|
)
|
|
(19,356
|
)
|
Net income (loss) attributable to FelCor LP common unitholders
|
$
|
2,202
|
|
|
$
|
(52,126
|
)
|
|
$
|
(36,135
|
)
|
|
$
|
(93,588
|
)
|
Basic and diluted per common unit data:
|
|
|
|
|
|
|
|
Loss from continuing operations
|
$
|
(0.12
|
)
|
|
$
|
(0.44
|
)
|
|
$
|
(0.45
|
)
|
|
$
|
(0.90
|
)
|
Net income (loss)
|
$
|
0.02
|
|
|
$
|
(0.42
|
)
|
|
$
|
(0.29
|
)
|
|
$
|
(0.85
|
)
|
Basic and diluted weighted average common units outstanding
|
124,266
|
|
|
123,425
|
|
|
124,283
|
|
|
109,608
|
|
The accompanying notes are an integral part of these consolidated financial statements.
FELCOR LODGING LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
For the
Three and Six
Months Ended
June 30, 2012
and
2011
(unaudited, in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
June 30,
|
|
June 30,
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
Net income (loss)
|
$
|
12,028
|
|
|
$
|
(42,397
|
)
|
|
$
|
(16,833
|
)
|
|
$
|
(74,123
|
)
|
Foreign currency translation adjustment
|
(317
|
)
|
|
186
|
|
|
(9
|
)
|
|
1,478
|
|
Comprehensive income (loss)
|
11,711
|
|
|
(42,211
|
)
|
|
(16,842
|
)
|
|
(72,645
|
)
|
Comprehensive loss (income) attributable to noncontrolling interests
|
(148
|
)
|
|
(51
|
)
|
|
54
|
|
|
(109
|
)
|
Comprehensive income (loss) attributable to FelCor LP
|
$
|
11,563
|
|
|
$
|
(42,262
|
)
|
|
$
|
(16,788
|
)
|
|
$
|
(72,754
|
)
|
The accompanying notes are an integral part of these consolidated financial statements.
FELCOR LODGING LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF PARTNERS’ CAPITAL
For the
Six
Months Ended
June 30, 2012
and
2011
(unaudited, in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred Units
|
|
Common Units
|
|
Accumulated Other Comprehensive Income
|
|
Noncontrolling Interests
|
|
Comprehensive Loss
|
|
Total Partners’ Capital
|
Balance at December 31, 2010
|
|
$
|
478,774
|
|
|
$
|
63,235
|
|
|
$
|
26,574
|
|
|
$
|
19,795
|
|
|
|
|
$
|
588,378
|
|
Issuance of common units
|
|
—
|
|
|
158,476
|
|
|
—
|
|
|
—
|
|
|
|
|
158,476
|
|
FelCor restricted stock compensation
|
|
—
|
|
|
2,048
|
|
|
—
|
|
|
—
|
|
|
|
|
2,048
|
|
Contributions
|
|
—
|
|
|
—
|
|
|
—
|
|
|
796
|
|
|
|
|
796
|
|
Distributions
|
|
—
|
|
|
(19,356
|
)
|
|
—
|
|
|
(670
|
)
|
|
|
|
(20,026
|
)
|
Allocation to redeemable units
|
|
—
|
|
|
617
|
|
|
—
|
|
|
—
|
|
|
|
|
617
|
|
Other
|
|
—
|
|
|
(70
|
)
|
|
—
|
|
|
—
|
|
|
|
|
(70
|
)
|
Comprehensive loss:
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign exchange translation
|
|
|
|
|
|
|
|
1,478
|
|
|
|
|
|
$
|
1,478
|
|
|
|
Net loss
|
|
|
|
|
(74,232
|
)
|
|
|
|
|
109
|
|
|
(74,123
|
)
|
|
|
Comprehensive loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(72,645
|
)
|
|
(72,645
|
)
|
Balance at June 30, 2011
|
|
$
|
478,774
|
|
|
$
|
130,718
|
|
|
$
|
28,052
|
|
|
$
|
20,030
|
|
|
|
|
$
|
657,574
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at December 31, 2011
|
|
$
|
478,774
|
|
|
$
|
56,916
|
|
|
$
|
25,848
|
|
|
$
|
25,357
|
|
|
|
|
$
|
586,895
|
|
FelCor restricted stock compensation
|
|
—
|
|
|
425
|
|
|
—
|
|
|
—
|
|
|
|
|
425
|
|
Contributions
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,310
|
|
|
|
|
2,310
|
|
Distributions
|
|
—
|
|
|
(19,356
|
)
|
|
—
|
|
|
(620
|
)
|
|
|
|
(19,976
|
)
|
Allocation to redeemable units
|
|
—
|
|
|
(294
|
)
|
|
—
|
|
|
—
|
|
|
|
|
(294
|
)
|
Other
|
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
—
|
|
|
|
|
(4
|
)
|
Comprehensive loss:
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign exchange translation
|
|
|
|
|
|
|
|
(9
|
)
|
|
|
|
|
$
|
(9
|
)
|
|
|
Net loss
|
|
|
|
|
(16,779
|
)
|
|
|
|
|
(54
|
)
|
|
(16,833
|
)
|
|
|
Comprehensive loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(16,842
|
)
|
|
(16,842
|
)
|
Balance at June 30, 2012
|
|
$
|
478,774
|
|
|
$
|
20,908
|
|
|
$
|
25,839
|
|
|
$
|
26,993
|
|
|
|
|
$
|
552,514
|
|
The accompanying notes are an integral part of these consolidated financial statements.
FELCOR LODGING LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the
Six
Months Ended
June 30, 2012
and
2011
(unaudited, in thousands)
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30,
|
|
2012
|
|
2011
|
Cash flows from operating activities:
|
|
|
|
Net loss
|
$
|
(16,833
|
)
|
|
$
|
(74,123
|
)
|
Adjustments to reconcile net loss to net cash provided by operating activities:
|
|
|
|
Depreciation and amortization
|
64,781
|
|
|
70,854
|
|
Gain on sale of hotels, net
|
(16,719
|
)
|
|
(6,660
|
)
|
Gain on involuntary conversion, net
|
—
|
|
|
(171
|
)
|
Amortization of deferred financing fees and debt discount
|
9,072
|
|
|
9,351
|
|
Amortization of unearned officers’ and directors’ compensation
|
2,538
|
|
|
3,577
|
|
Equity in loss (income) from unconsolidated entities
|
(1,138
|
)
|
|
1,552
|
|
Distributions of income from unconsolidated entities
|
2,098
|
|
|
810
|
|
Debt extinguishment
|
812
|
|
|
23,961
|
|
Impairment loss
|
1,335
|
|
|
12,303
|
|
Changes in assets and liabilities:
|
|
|
|
Accounts receivable
|
(3,776
|
)
|
|
(11,449
|
)
|
Restricted cash - operations
|
—
|
|
|
2,005
|
|
Other assets
|
(8,765
|
)
|
|
(12,604
|
)
|
Accrued expenses and other liabilities
|
(3,458
|
)
|
|
(4,880
|
)
|
Net cash flow provided by operating activities
|
29,947
|
|
|
14,526
|
|
Cash flows from investing activities:
|
|
|
|
Acquisition of hotels
|
—
|
|
|
(137,985
|
)
|
Improvements and additions to hotels
|
(73,349
|
)
|
|
(35,244
|
)
|
Hotel development
|
(10,317
|
)
|
|
—
|
|
Additions to condominium project
|
—
|
|
|
(318
|
)
|
Proceeds from asset dispositions
|
100,406
|
|
|
52,093
|
|
Change in restricted cash – investing
|
463
|
|
|
(412
|
)
|
Insurance proceeds
|
—
|
|
|
282
|
|
Distributions from unconsolidated entities
|
9,103
|
|
|
825
|
|
Net cash flow provided by (used in) investing activities
|
26,306
|
|
|
(120,759
|
)
|
Cash flows from financing activities:
|
|
|
|
Proceeds from borrowings
|
71,000
|
|
|
1,087,267
|
|
Repayment of borrowings
|
(137,758
|
)
|
|
(1,050,566
|
)
|
Payment of deferred financing fees
|
(1,453
|
)
|
|
(18,230
|
)
|
Change in restricted cash - financing
|
—
|
|
|
(24,000
|
)
|
Distributions paid to noncontrolling interests
|
(620
|
)
|
|
(670
|
)
|
Contributions from noncontrolling interests
|
2,310
|
|
|
796
|
|
Distributions paid to preferred unitholders
|
(19,356
|
)
|
|
(19,356
|
)
|
Net proceeds from common unit issuance
|
—
|
|
|
158,476
|
|
Proceeds from redeemable unit issuance
|
—
|
|
|
2,500
|
|
Net cash flow provided by (used in) financing activities
|
(85,877
|
)
|
|
136,217
|
|
Effect of exchange rate changes on cash
|
(35
|
)
|
|
93
|
|
Net change in cash and cash equivalents
|
(29,659
|
)
|
|
30,077
|
|
Cash and cash equivalents at beginning of periods
|
93,758
|
|
|
200,972
|
|
Cash and cash equivalents at end of periods
|
$
|
64,099
|
|
|
$
|
231,049
|
|
|
|
|
|
Supplemental cash flow information – interest paid, net of capitalized interest
|
$
|
54,586
|
|
|
$
|
59,344
|
|
The accompanying notes are an integral part of these consolidated financial statements.
FELCOR LODGING TRUST INCORPORATED AND FELCOR LODGING LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FelCor Lodging Trust Incorporated (NYSE:FCH), or FelCor, is a Maryland corporation, operating as a real estate investment trust, or REIT. FelCor is the sole general partner of, and the owner of a greater than
99%
partnership interest in, FelCor Lodging Limited Partnership, or FelCor LP, through which we held ownership interests in
70
hotels in continuing operations with
20,223
rooms. At
June 30, 2012
, we had an aggregate of
124,854,248
shares and units outstanding, consisting of
124,226,805
shares of FelCor common stock and
627,443
FelCor LP units not owned by FelCor.
Of the
70
hotels included in continuing operations, we owned a
100%
interest in
52
hotels, a
90%
interest in entities owning
three
hotels, an
82%
interest in an entity owning
one
hotel, a
60%
interest in an entity owning
one
hotel and a
50%
interest in entities owning
13
hotels. We consolidate our real estate interests in the
57
hotels in which we held majority interests, and we record the real estate interests of the
13
hotels in which we held
50%
interests using the equity method. We leased
69
of the
70
hotels in continuing operations to our taxable REIT subsidiaries, of which we own a controlling interest.
One
50%
owned hotel was operated without a lease. Because we owned controlling interests in these lessees, we consolidated our interests in these
69
hotels (which we refer to as our Consolidated Hotels) and reflect those hotels’ operating revenues and expenses in our statement of operations. Of our Consolidated Hotels, we owned
50%
of the real estate interests in each of
12
hotels (we accounted for the ownership in our real estate interests of these hotels by the equity method) and majority real estate interests in each of the remaining
57
hotels (we consolidate our real estate interest in these hotels).
The following table illustrates the distribution of our
69
Consolidated Hotels at
June 30, 2012
:
|
|
|
|
|
|
|
|
|
|
Brand
|
|
Hotels
|
|
Rooms
|
Embassy Suites Hotels
®
|
|
38
|
|
|
|
10,004
|
|
|
Holiday Inn
®
|
|
13
|
|
|
|
4,388
|
|
|
Sheraton
®
and Westin
®
|
|
6
|
|
|
|
2,224
|
|
|
Doubletree
®
and Hilton
®
|
|
6
|
|
|
|
1,450
|
|
|
Marriott
®
and Renaissance
®
|
|
3
|
|
|
|
1,321
|
|
|
Fairmont
®
|
|
1
|
|
|
|
383
|
|
|
Independent (Morgans/Royalton)
|
|
2
|
|
|
|
282
|
|
|
Total
|
|
69
|
|
|
|
20,052
|
|
|
At
June 30, 2012
, our Consolidated Hotels were located in the United States (
68
hotels in
22
states) and Canada (
one
hotel in Ontario), with concentrations in California (
15
hotels), Florida (
8
hotels) and Texas (
7
hotels). Approximately
48%
of our hotel room revenues were generated from hotels in these
three
states during the first
six
months of
2012
.
At
June 30, 2012
, of our
69
Consolidated Hotels: (i) subsidiaries of Hilton Hotels Corporation, or Hilton, managed
43
hotels, (ii) subsidiaries of InterContinental Hotels Group, or IHG, managed
13
hotels, (iii) subsidiaries of Starwood Hotels & Resorts Worldwide Inc., or Starwood, managed
six
hotels, (iv) subsidiaries of Marriott International Inc., or Marriott, managed
three
hotels, (v) a subsidiary of Fairmont Hotels and Resorts, or Fairmont, managed
one
hotel, (vi) a subsidiary of Morgans Hotel Group Corp. managed
two
hotels, and (vii) an independent management company managed
one
hotel.
FELCOR LODGING TRUST INCORPORATED AND FELCOR LODGING LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Organization — (continued)
In addition to the above hotels, we own (through a
95%
interest in a consolidated joint venture) the Knickerbocker, a former hotel and office building, that is being redeveloped as a hotel in midtown Manhattan and is expected to open in late 2013.
Our hotels managed by Marriott are accounted for on a fiscal year comprised of
52
or
53
weeks ending on the Friday closest to
December 31
. Our
three
-month periods ending
June 30, 2012
and
2011
include the results of operations for our Marriott-managed hotels for the
12
week periods ending June 15, 2012 and June 17, 2011, respectively.
The information in our consolidated financial statements for the
three and six
months ended
June 30, 2012
and
2011
is unaudited. Preparing financial statements in conformity with accounting principles generally accepted in the United States of America, or GAAP, requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. The accompanying financial statements for the
three and six
months ended
June 30, 2012
and
2011
, include adjustments based on management’s estimates (consisting of normal and recurring accruals), which we consider necessary for a fair presentation of the results for the periods. The financial information should be read in conjunction with the consolidated financial statements for the year ended
December 31, 2011
, included in our Annual Report on Form 10-K. Operating results for the
three and six
months ended
June 30, 2012
are not necessarily indicative of actual operating results for the entire year.
|
|
2.
|
Investment in Unconsolidated Entities
|
We owned
50%
interests in joint ventures that owned
13
hotels at
June 30, 2012
and
December 31, 2011
. We also own a
50%
interest in entities that own real estate in Myrtle Beach, South Carolina and provide condominium management services. We account for our investments in these unconsolidated entities under the equity method. We do not have any majority-owned subsidiaries that are not consolidated in our financial statements. We make adjustments to our equity in income from unconsolidated entities related to the difference between our basis in investment in unconsolidated entities compared to the historical basis of the assets recorded by the joint ventures.
The following table summarizes combined balance sheet information for our unconsolidated entities (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
June 30,
|
|
December 31,
|
|
2012
|
|
2011
|
Investment in hotels, net of accumulated depreciation
|
$
|
164,573
|
|
|
|
$
|
173,310
|
|
|
Total assets
|
$
|
178,502
|
|
|
|
$
|
199,063
|
|
|
Debt
|
$
|
149,397
|
|
|
|
$
|
150,388
|
|
|
Total liabilities
|
$
|
154,310
|
|
|
|
$
|
156,607
|
|
|
Equity
|
$
|
24,192
|
|
|
|
$
|
42,456
|
|
|
Our unconsolidated entities’ debt at
June 30, 2012
and
December 31, 2011
consisted entirely of non-recourse mortgage debt. In January 2012, one of our unconsolidated joint ventures refinanced
$130 million
of debt and extended the maturity until 2014.
FELCOR LODGING TRUST INCORPORATED AND FELCOR LODGING LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
|
2.
|
Investment in Unconsolidated Entities — (continued)
|
The following table sets forth summarized combined statement of operations information for our unconsolidated entities (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
Total revenues
|
$
|
19,605
|
|
|
|
$
|
18,328
|
|
|
|
$
|
32,937
|
|
|
|
$
|
30,016
|
|
|
Net income (loss)
|
$
|
3,655
|
|
|
|
$
|
992
|
|
|
|
$
|
4,136
|
|
|
|
$
|
(1,243
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to FelCor
|
$
|
1,827
|
|
|
|
$
|
496
|
|
|
|
$
|
2,068
|
|
|
|
$
|
(622
|
)
|
|
Depreciation of cost in excess of book value
|
(465
|
)
|
|
|
(465
|
)
|
|
|
(930
|
)
|
|
|
(930
|
)
|
|
Equity in income (loss) from unconsolidated entities
|
$
|
1,362
|
|
|
|
$
|
31
|
|
|
|
$
|
1,138
|
|
|
|
$
|
(1,552
|
)
|
|
The following table summarizes the components of our investment in unconsolidated entities (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
June 30,
|
|
December 31,
|
|
2012
|
|
2011
|
Hotel-related investments
|
$
|
3,821
|
|
|
|
$
|
12,400
|
|
|
Cost in excess of book value of hotel investments
|
47,843
|
|
|
|
48,774
|
|
|
Land and condominium investments
|
8,275
|
|
|
|
8,828
|
|
|
|
$
|
59,939
|
|
|
|
$
|
70,002
|
|
|
The following table summarizes the components of our equity in income (loss) from unconsolidated entities (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
June 30,
|
|
June 30,
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
Hotel investments
|
$
|
1,286
|
|
|
$
|
34
|
|
|
$
|
1,691
|
|
|
$
|
(928
|
)
|
Other investments
|
76
|
|
|
(3
|
)
|
|
(553
|
)
|
|
(624
|
)
|
Equity in income (loss) from unconsolidated entities
|
$
|
1,362
|
|
|
$
|
31
|
|
|
$
|
1,138
|
|
|
$
|
(1,552
|
)
|
FELCOR LODGING TRUST INCORPORATED AND FELCOR LODGING LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Consolidated debt consisted of the following (dollars in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Encumbered Hotels
|
|
Interest Rate
(%)
|
|
Maturity Date
|
|
June 30, 2012
|
|
December 31, 2011
|
Line of credit
|
|
10
|
|
|
|
L + 4.50
|
|
|
|
August 2014
(a)
|
|
$
|
20,000
|
|
|
$
|
—
|
|
Hotel mortgage debt
|
|
|
|
|
|
|
|
|
|
|
|
|
Mortgage debt
|
|
7
|
|
|
|
L + 5.10
|
|
(b)
|
|
April 2015
|
|
186,669
|
|
|
202,982
|
|
Mortgage debt
|
|
7
|
|
|
|
9.02
|
|
|
|
April 2014
|
|
107,889
|
|
|
109,044
|
|
Mortgage debt
|
|
6
|
|
|
|
L + 2.20
|
|
|
|
May 2013
(c)
|
|
88,395
|
|
|
156,398
|
|
Mortgage debt
|
|
5
|
|
(d)
|
|
6.66
|
|
|
|
June - August 2014
|
|
66,419
|
|
|
67,375
|
|
Mortgage debt
|
|
1
|
|
|
|
5.81
|
|
|
|
July 2016
|
|
10,640
|
|
|
10,876
|
|
Senior notes
|
|
|
|
|
|
|
|
|
|
|
|
|
Senior secured notes
|
|
6
|
|
|
|
6.75
|
|
|
|
June 2019
|
|
525,000
|
|
|
525,000
|
|
Senior secured notes
(e)
|
|
11
|
|
|
|
10.00
|
|
|
|
October 2014
|
|
464,880
|
|
|
459,931
|
|
Other
(f)
|
|
—
|
|
|
|
L + 1.50
|
|
|
|
December 2012
|
|
64,860
|
|
|
64,860
|
|
Total
|
|
53
|
|
|
|
|
|
|
|
|
$
|
1,534,752
|
|
|
$
|
1,596,466
|
|
|
|
(a)
|
Our
$225 million
line of credit can be extended for
one
year (to 2015), subject to satisfying certain conditions.
|
|
|
(b)
|
LIBOR (for this loan) is subject to a
3%
floor. We purchased an interest rate cap (
$203 million
notional amount) that caps
LIBOR
at
5.4%
and expires May 2013.
|
|
|
(c)
|
This loan can be extended for
six
months, subject to satisfying certain conditions.
|
|
|
(d)
|
The hotels securing this debt are subject to separate loan agreements and are not cross-collateralized.
|
|
|
(e)
|
These notes have
$492 million
in aggregate principal outstanding (
$144 million
and
$96,000
in aggregate principal amount was redeemed in June 2011 and January 2012, respectively)
and were initially sold at a discount that provided an effective yield of
12.875%
before transaction costs.
|
|
|
(f)
|
This loan is related to our Knickerbocker development project and is fully secured by restricted cash and a mortgage. Because we were able to assume an existing loan when we purchased this hotel, we were not required to pay any local mortgage recording tax. When that loan is transferred to a new lender and made part of our construction loan, we expect to only pay such tax to the extent of the incremental principal amount of the construction loan.
|
In May 2012, we repaid
$69.2 million
in secured loans when we sold the mortgaged hotels.
We reported
$31.6 million
and
$34.3 million
of interest expense for the
three
months ended
June 30, 2012
and
2011
, respectively, which is net of: (i) interest income of
$35,000
and
$53,000
and (ii) capitalized interest of
$3.3 million
and
$312,000
, respectively. We reported
$62.7 million
and
$67.1 million
of interest expense for the
six
months ended
June 30, 2012
and
2011
, respectively, which is net of: (i) interest income of
$83,000
and
$93,000
and (ii) capitalized interest of
$6.6 million
and
$510,000
, respectively.
FELCOR LODGING TRUST INCORPORATED AND FELCOR LODGING LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
|
4.
|
Hotel Operating Revenue, Departmental Expenses, and Other Property-Related Costs
|
Hotel operating revenue from continuing operations was comprised of the following (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
June 30,
|
|
June 30,
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
Room revenue
|
$
|
200,186
|
|
|
|
$
|
185,016
|
|
|
|
$
|
373,202
|
|
|
|
$
|
345,353
|
|
|
Food and beverage revenue
|
40,616
|
|
|
|
40,291
|
|
|
|
77,140
|
|
|
|
75,108
|
|
|
Other operating departments
|
15,243
|
|
|
|
14,085
|
|
|
|
26,870
|
|
|
|
25,955
|
|
|
Total hotel operating revenue
|
$
|
256,045
|
|
|
|
$
|
239,392
|
|
|
|
$
|
477,212
|
|
|
|
$
|
446,416
|
|
|
Nearly all of our revenue is comprised of hotel operating revenue, which includes room revenue, food and beverage revenue, and revenue from other hotel operating departments (such as telephones, parking and business centers). These revenues are recorded net of any sales or occupancy taxes collected from our guests. All rebates or discounts are recorded, when allowed, as a reduction in revenue, and there are no material contingent obligations with respect to rebates or discounts offered by us. All revenues are recorded on an accrual basis, as earned. Appropriate allowances are made for doubtful accounts, which are recorded as a bad debt expense. The remainder of our revenue was derived from other sources.
Hotel departmental expenses from continuing operations were comprised of the following (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
2012
|
|
2011
|
|
Amount
|
|
% of Total Hotel Operating Revenue
|
|
Amount
|
|
% of Total Hotel Operating Revenue
|
Room
|
$
|
51,268
|
|
|
20.0
|
%
|
|
|
$
|
48,495
|
|
|
20.3
|
%
|
|
Food and beverage
|
31,537
|
|
|
12.3
|
|
|
|
29,719
|
|
|
12.4
|
|
|
Other operating departments
|
6,167
|
|
|
2.4
|
|
|
|
6,425
|
|
|
2.7
|
|
|
Total hotel departmental expenses
|
$
|
88,972
|
|
|
34.7
|
%
|
|
|
$
|
84,639
|
|
|
35.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30,
|
|
2012
|
|
2011
|
|
Amount
|
|
% of Total Hotel Operating Revenue
|
|
Amount
|
|
% of Total Hotel Operating Revenue
|
Room
|
$
|
99,001
|
|
|
20.7
|
%
|
|
|
$
|
91,847
|
|
|
20.6
|
%
|
|
Food and beverage
|
61,286
|
|
|
12.8
|
|
|
|
57,099
|
|
|
12.8
|
|
|
Other operating departments
|
11,901
|
|
|
2.6
|
|
|
|
12,083
|
|
|
2.7
|
|
|
Total hotel departmental expenses
|
$
|
172,188
|
|
|
36.1
|
%
|
|
|
$
|
161,029
|
|
|
36.1
|
%
|
|
FELCOR LODGING TRUST INCORPORATED AND FELCOR LODGING LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
|
4.
|
Hotel Operating Revenue, Departmental Expenses, and Other Property-Related Costs
— (continued)
|
Other property-related costs from continuing operations were comprised of the following (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
2012
|
|
2011
|
|
Amount
|
|
% of Total Hotel Operating Revenue
|
|
Amount
|
|
% of Total Hotel Operating Revenue
|
Hotel general and administrative expense
|
$
|
22,308
|
|
|
8.7
|
%
|
|
|
$
|
20,464
|
|
|
8.5
|
%
|
|
Marketing
|
20,734
|
|
|
8.1
|
|
|
|
19,300
|
|
|
8.1
|
|
|
Repair and maintenance
|
12,481
|
|
|
4.9
|
|
|
|
11,705
|
|
|
4.9
|
|
|
Utilities
|
9,985
|
|
|
3.9
|
|
|
|
10,682
|
|
|
4.5
|
|
|
Total other property-related costs
|
$
|
65,508
|
|
|
25.6
|
%
|
|
|
$
|
62,151
|
|
|
26.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30,
|
|
2012
|
|
2011
|
|
Amount
|
|
% of Total Hotel Operating Revenue
|
|
Amount
|
|
% of Total Hotel Operating Revenue
|
Hotel general and administrative expense
|
$
|
43,669
|
|
|
9.2
|
%
|
|
|
$
|
40,607
|
|
|
9.1
|
%
|
|
Marketing
|
41,361
|
|
|
8.7
|
|
|
|
37,782
|
|
|
8.5
|
|
|
Repair and maintenance
|
24,944
|
|
|
5.2
|
|
|
|
23,166
|
|
|
5.2
|
|
|
Utilities
|
19,969
|
|
|
4.1
|
|
|
|
21,128
|
|
|
4.7
|
|
|
Total other property-related costs
|
$
|
129,943
|
|
|
27.2
|
%
|
|
|
$
|
122,683
|
|
|
27.5
|
%
|
|
FELCOR LODGING TRUST INCORPORATED AND FELCOR LODGING LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
|
5.
|
Taxes, Insurance and Lease Expense
|
Taxes, insurance and lease expense from continuing operations were comprised of the following (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
June 30,
|
|
June 30,
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
Hotel lease expense
(a)
|
$
|
11,236
|
|
|
$
|
10,497
|
|
|
$
|
20,429
|
|
|
$
|
18,801
|
|
Land lease expense
(b)
|
2,802
|
|
|
2,685
|
|
|
5,188
|
|
|
4,885
|
|
Real estate and other taxes
|
8,161
|
|
|
7,123
|
|
|
16,448
|
|
|
14,040
|
|
Property insurance, general liability insurance and other
|
2,993
|
|
|
2,036
|
|
|
5,440
|
|
|
4,393
|
|
Total taxes, insurance and lease expense
|
$
|
25,192
|
|
|
$
|
22,341
|
|
|
$
|
47,505
|
|
|
$
|
42,119
|
|
|
|
(a)
|
Hotel lease expense is recorded by the consolidated operating lessees of
12
hotels owned by unconsolidated entities, and is partially (generally
49%
) offset through noncontrolling interests in other partnerships. Our
50%
share of the corresponding lease income is recorded through equity in income from unconsolidated entities. Hotel lease expense includes percentage rent of
$5.8 million
and
$5.1 million
for the
three
months ended
June 30, 2012
and
2011
, respectively, and
$9.6 million
and
$8.0 million
for the
six
months ended
June 30, 2012
and
2011
, respectively.
|
|
|
(b)
|
Land lease expense includes percentage rent of
$1.5 million
and
$1.2 million
for the
three
months ended
June 30, 2012
and
2011
, respectively, and
$2.4 million
and
$1.9 million
for the
six
months ended
June 30, 2012
and
2011
, respectively.
|
Our hotels are comprised of operations and cash flows that can clearly be distinguished, operationally and for financial reporting purposes, from the remainder of our operations. Accordingly, we consider our hotels to be components for purposes of determining impairment charges and reporting discontinued operations.
We may record impairment charges if operating results of individual hotels are materially different from our forecasts, if the economy and/or lodging industry weakens, or if we shorten our contemplated holding period for additional hotels. For the quarter ended June 30, 2012, we recorded a
$1.3 million
impairment charge related to
one
hotel included in continuing operations. The impairment charge related to this hotel was based on a third-party offer to purchase (a Level 2 input under authoritative guidance for fair value measurements), at a price less than our previously estimated fair market value.
FELCOR LODGING TRUST INCORPORATED AND FELCOR LODGING LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
|
6.
|
Impairment – (continued)
|
During the quarter ended June 30, 2011, we recorded
$12.3 million
of impairment charges (
$7.0 million
related to
two
hotels in continuing operations and
$5.3 million
related to
two
hotels in discontinued operations). The impairment charge related to the
two
hotels in continuing operations and
one
hotel in discontinued operations was based on revised estimated fair market values obtained through the marketing process that were lower than the net book values for these hotels. The inputs used to determine the fair values of these hotels are classified as Level 2 under authoritative guidance for fair value measurements. The impairment charge related to the remaining hotel in discontinued operations was primarily related to estimated selling costs.
|
|
7.
|
Discontinued Operations
|
We consider a sale to be probable within the next
twelve
months (for purposes of determining whether a hotel is held for sale) when a buyer completes its due diligence review, we have an executed contract for sale, and we have received a substantial non-refundable deposit. While we are marketing certain hotels for sale, under this policy we had no hotels held for sale at
June 30, 2012
.
Discontinued operations include results of operations for
six
hotels which were sold in May 2012 and
eight
hotels sold in 2011. The following table summarizes the condensed financial information for those hotels (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
June 30,
|
|
June 30,
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
Hotel operating revenue
|
$
|
7,894
|
|
|
|
$
|
25,775
|
|
|
|
$
|
22,255
|
|
|
|
$
|
56,097
|
|
|
Operating expenses
|
(6,233
|
)
|
|
|
(29,672
|
)
|
|
|
(17,825
|
)
|
|
|
(56,128
|
)
|
|
Operating income (loss) from discontinued operations
|
1,661
|
|
|
|
(3,897
|
)
|
|
|
4,430
|
|
|
|
(31
|
)
|
|
Interest expense, net
|
(531
|
)
|
|
|
(864
|
)
|
|
|
(1,253
|
)
|
|
|
(1,941
|
)
|
|
Debt extinguishment
|
(643
|
)
|
|
|
(50
|
)
|
|
|
(643
|
)
|
|
|
(57
|
)
|
|
Gain on sale of hotels, net of tax
|
16,719
|
|
|
|
6,660
|
|
|
|
16,719
|
|
|
|
6,660
|
|
|
Income from discontinued operations
|
$
|
17,206
|
|
|
|
$
|
1,849
|
|
|
|
$
|
19,253
|
|
|
|
$
|
4,631
|
|
|
FELCOR LODGING TRUST INCORPORATED AND FELCOR LODGING LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
|
8.
|
Income (Loss) Per Share/Unit
|
The following tables set forth the computation of basic and diluted income (loss) per share/unit (in thousands, except per share/unit data):
FelCor Income (Loss) Per Share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
June 30,
|
|
June 30,
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
Numerator:
|
|
|
|
|
|
|
|
Net income (loss) attributable to FelCor
|
$
|
11,869
|
|
|
$
|
(42,265
|
)
|
|
$
|
(16,594
|
)
|
|
$
|
(73,929
|
)
|
Discontinued operations attributable to FelCor
|
(17,120
|
)
|
|
(1,843
|
)
|
|
(19,157
|
)
|
|
(4,616
|
)
|
Loss from continuing operations attributable to FelCor
|
(5,251
|
)
|
|
(44,108
|
)
|
|
(35,751
|
)
|
|
(78,545
|
)
|
Less: Preferred dividends
|
(9,678
|
)
|
|
(9,678
|
)
|
|
(19,356
|
)
|
|
(19,356
|
)
|
Less: Undistributed earnings allocated to unvested restricted stock
|
(10
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
Numerator for continuing operations attributable to FelCor common stockholders
|
(14,939
|
)
|
|
(53,786
|
)
|
|
(55,107
|
)
|
|
(97,901
|
)
|
Discontinued operations attributable to FelCor
|
17,120
|
|
|
1,843
|
|
|
19,157
|
|
|
4,616
|
|
Numerator for basic and diluted income (loss) attributable to FelCor common stockholders
|
$
|
2,181
|
|
|
$
|
(51,943
|
)
|
|
$
|
(35,950
|
)
|
|
$
|
(93,285
|
)
|
Denominator:
|
|
|
|
|
|
|
|
Denominator for basic and diluted income (loss) per share
|
123,638
|
|
|
122,992
|
|
|
123,651
|
|
|
109,249
|
|
Basic and diluted income (loss) per share data:
|
|
|
|
|
|
|
|
Loss from continuing operations
|
$
|
(0.12
|
)
|
|
$
|
(0.44
|
)
|
|
$
|
(0.45
|
)
|
|
$
|
(0.90
|
)
|
Discontinued operations
|
$
|
0.14
|
|
|
$
|
0.01
|
|
|
$
|
0.15
|
|
|
$
|
0.04
|
|
Net income (loss)
|
$
|
0.02
|
|
|
$
|
(0.42
|
)
|
|
$
|
(0.29
|
)
|
|
$
|
(0.85
|
)
|
FELCOR LODGING TRUST INCORPORATED AND FELCOR LODGING LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
|
8.
|
Income (Loss) Per Share/Unit — (continued)
|
FelCor LP Income (Loss) Per Unit
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
June 30,
|
|
June 30,
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
Numerator:
|
|
|
|
|
|
|
|
Net income (loss) attributable to FelCor LP
|
$
|
11,880
|
|
|
$
|
(42,448
|
)
|
|
$
|
(16,779
|
)
|
|
$
|
(74,232
|
)
|
Discontinued operations attributable to FelCor LP
|
(17,206
|
)
|
|
(1,849
|
)
|
|
(19,253
|
)
|
|
(4,631
|
)
|
Loss from continuing operations attributable to FelCor LP
|
(5,326
|
)
|
|
(44,297
|
)
|
|
(36,032
|
)
|
|
(78,863
|
)
|
Less: Preferred distributions
|
(9,678
|
)
|
|
(9,678
|
)
|
|
(19,356
|
)
|
|
(19,356
|
)
|
Less: Undistributed earnings allocated to FelCor's unvested restricted stock
|
(10
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
Numerator for continuing operations attributable to FelCor LP common unitholders
|
(15,014
|
)
|
|
(53,975
|
)
|
|
(55,388
|
)
|
|
(98,219
|
)
|
Discontinued operations attributable to FelCor LP
|
17,206
|
|
|
1,849
|
|
|
19,253
|
|
|
4,631
|
|
Numerator for basic and diluted income (loss) attributable to FelCor LP common unitholders
|
$
|
2,192
|
|
|
$
|
(52,126
|
)
|
|
$
|
(36,135
|
)
|
|
$
|
(93,588
|
)
|
Denominator:
|
|
|
|
|
|
|
|
Denominator for basic and diluted income (loss) per unit
|
124,266
|
|
|
123,425
|
|
|
124,283
|
|
|
109,608
|
|
Basic and diluted income (loss) per unit data:
|
|
|
|
|
|
|
|
Loss from continuing operations
|
$
|
(0.12
|
)
|
|
$
|
(0.44
|
)
|
|
$
|
(0.45
|
)
|
|
$
|
(0.90
|
)
|
Discontinued operations
|
$
|
0.14
|
|
|
$
|
0.01
|
|
|
$
|
0.15
|
|
|
$
|
0.04
|
|
Net income (loss)
|
$
|
0.02
|
|
|
$
|
(0.42
|
)
|
|
$
|
(0.29
|
)
|
|
$
|
(0.85
|
)
|
Securities that could potentially dilute earnings per share/unit in the future that were not included in the computation of diluted income (loss) per share/unit, because they would have been antidilutive for the periods presented, are as follows (in thousands):
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
June 30,
|
|
June 30,
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
Series A convertible preferred shares/units
|
9,985
|
|
9,985
|
|
9,985
|
|
9,985
|
Series A preferred dividends (distributions) that would be excluded from net income (loss) attributable to FelCor common stockholders (or FelCor LP common unitholders), if these Series A preferred shares/units were dilutive, were
$6.3 million
for the
three
months ended
June 30, 2012
and
2011
, and
$12.6 million
for the
six
months ended
June 30, 2012
and
2011
.
FELCOR LODGING TRUST INCORPORATED AND FELCOR LODGING LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
|
9.
|
Dividends/Distributions
|
In January 2011, FelCor reinstated its current quarterly preferred dividend and has paid current quarterly preferred dividends each quarter since January 2011. We had
$76.3 million
of aggregate accrued dividends (of which
$67.7 million
relate to dividends in arrears) payable to holders of our Series A and Series C preferred stock at
June 30, 2012
and
December 31, 2011
. In June 2012, FelCor announced the payment of current quarterly dividends of
$0.4875
per share to holders of its Series A preferred stock and
$0.50
per depositary share to holders of its Series C preferred stock. In addition, FelCor announced that it will pay
$1.51
per share and
$1.55
per depositary share to its Series A preferred stockholders and Series C preferred stockholders, respectively, for dividends in arrears. Proceeds received from the sale of the
six
hotels, which were sold in May 2012, were used to fund the
$30.0 million
dividend in arrears payment made in July 2012.
Funds used by FelCor to pay common or preferred dividends are provided through distributions from FelCor LP. We are restricted from paying any common dividends unless and until all accrued and current preferred dividends are paid. FelCor’s Board of Directors will determine whether and when to declare future dividends (including the accrued but unpaid preferred dividends) based upon various factors, including operating results, economic conditions, other operation trends, our financial condition (and related debt covenant compliance) and capital requirements, as well as minimum REIT distribution requirements.
|
|
10.
|
Fair Value of Financial Instruments
|
Disclosures about fair value of our financial instruments are based on pertinent information available to management as of
June 30, 2012
. Considerable judgment is necessary to interpret market data and develop estimated fair value. Accordingly, the estimates presented herein are not necessarily indicative of the amounts that we could realize on disposition of the financial instruments. The use of different market assumptions and/or estimation methodologies may have a material effect on estimated fair value amounts.
Our estimates of the fair value of (i) cash and cash equivalents, restricted cash, accounts receivable, accounts payable and accrued expenses approximate carrying value due to the relatively short maturity of these instruments; (ii) our publicly-traded debt is based on observable market data (a Level 2 input) and has an estimated fair value of
$1.1 billion
at
June 30, 2012
and
December 31, 2011
; and (iii) our debt that is not traded publicly is based on a discounted cash flow model using effective borrowing rates for debt with similar terms, loan to estimated fair value of collateral and remaining maturities (a Level 3 input) and has an estimated fair value of
$574.8 million
and
$640.9 million
at
June 30, 2012
and
December 31, 2011
, respectively. The estimated fair value of all our debt was
$1.7 billion
at
June 30, 2012
and
December 31, 2011
.
FELCOR LODGING TRUST INCORPORATED AND FELCOR LODGING LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
|
11.
|
Redeemable Noncontrolling Interests in FelCor LP / Redeemable Units
|
We record redeemable noncontrolling interests in FelCor LP, in the case of FelCor, and redeemable units, in the case of FelCor LP, in the mezzanine section (between liabilities and equity or partners’ capital) of our consolidated balance sheets because of the redemption feature of these units. Additionally, FelCor’s consolidated statements of operations separately present earnings attributable to redeemable noncontrolling interests. We adjust redeemable noncontrolling interests in FelCor LP (or redeemable units) each period to reflect the greater of its carrying value based on the accumulation of historical cost or its redemption value. The historical cost is based on the proportionate relationship between the carrying value of equity associated with FelCor’s common stockholders relative to that of FelCor LP’s unitholders. Redemption value is based on the closing price of FelCor’s common stock at period end. FelCor allocates net income (loss) to FelCor LP’s noncontrolling partners based on their weighted average ownership percentage during the period.
At
June 30, 2012
, we had
627,443
limited partnership units outstanding. We sold
367,647
units of limited partner interest in our operating partnership at
$6.80
per unit in May 2011. At June 30, 2012, these units are carried at
$2.1 million
, which is the issue price less the holders’ share of allocated losses for the period the units were outstanding. We carried the remaining
259,796
outstanding units of limited partner interest at
$1.2 million
, based on the closing price of FelCor’s common stock at
June 30, 2012
(
$4.70
/share).
Changes in redeemable noncontrolling interests (or redeemable units) for the
six
months ended
June 30, 2012
and
2011
are shown below (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
|
|
June 30,
|
|
2012
|
|
2011
|
Balance at beginning of period
|
$
|
3,026
|
|
|
|
$
|
2,004
|
|
|
Issuance of units
|
—
|
|
|
|
2,500
|
|
|
Conversion of units
|
(33
|
)
|
|
|
(79
|
)
|
|
Redemption value allocation
|
512
|
|
|
|
(239
|
)
|
|
Comprehensive income (loss):
|
|
|
|
|
|
Foreign exchange translation
|
—
|
|
|
|
4
|
|
|
Net loss
|
(185
|
)
|
|
|
(303
|
)
|
|
Balance at end of period
|
$
|
3,320
|
|
|
|
$
|
3,887
|
|
|
FELCOR LODGING TRUST INCORPORATED AND FELCOR LODGING LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
|
12.
|
FelCor LP’s Consolidating Financial Information
|
Certain of FelCor LP’s
100%
owned subsidiaries (FelCor/CSS Holdings, L.P.; FelCor Lodging Holding Company, L.L.C.; FelCor TRS Borrower 1, L.P.; FelCor TRS Borrower 4, L.L.C.; FelCor TRS Holdings, L.L.C.; FelCor Canada Co.; FelCor/St. Paul Holdings, L.P.; FelCor Hotel Asset Company, L.L.C.; FelCor Copley Plaza, L.L.C.; FelCor St. Pete (SPE), L.L.C.; FelCor Esmeralda (SPE), L.L.C.; Los Angeles International Airport Hotel Associates, a Texas L.P.; Madison 237 Hotel, L.L.C.; and Royalton 44 Hotel, L.L.C., collectively, “Subsidiary Guarantors”), together with FelCor, guarantee, fully and unconditionally, except where subject to customary release provisions as described below, and jointly and severally, our senior debt.
The guarantees by the Subsidiary Guarantors may be automatically and unconditionally released upon (1) the sale or other disposition of all of the capital stock of the Subsidiary Guarantor or the sale or disposition of all or substantially all of the assets of the Subsidiary Guarantor, (2) the consolidation or merger of any such Subsidiary Guarantor with any person other than FelCor LP, or a subsidiary of FelCor LP, if, as a result of such consolidation or merger, such Subsidiary Guarantor ceases to be a subsidiary of FelCor LP, (3) a legal defeasance or covenant defeasance of the indenture, (4) the unconditional and complete release of such Subsidiary Guarantor in accordance with the modification and waiver provisions of the indenture, or (5) the designation of a restricted subsidiary that is a Subsidiary Guarantor as an unrestricted subsidiary under and in compliance with the indenture.
In the second quarter of 2012, FelCor LP revised the classification of intercompany financing activity with its consolidated subsidiaries on its condensed consolidating statements of cash flows to present them as cash flows from investing activities. These amounts were previously classified as cash flows from financing activities. As other prior period financial information is presented, FelCor LP will similarly revise the condensed consolidating statements of cash flows in its future filings. We determined these revisions are not material to the related financial statements. The impact of these revisions (which eliminate in consolidation) are to increase (decrease) cash inflows from investing activities (and (increase) decrease cash inflows from financing activities) for FelCor LP as follows (in millions):
|
|
|
|
|
For the years ended:
|
|
December 31, 2011
|
$
|
(458
|
)
|
December 31, 2010
|
$
|
(175
|
)
|
December 31, 2009
|
$
|
218
|
|
For the:
|
|
Three months ended March 31, 2012
|
$
|
27
|
|
Nine months ended September 30, 2011
|
$
|
(445
|
)
|
Six months ended June 30, 2011
|
$
|
(345
|
)
|
Three months ended March 31, 2011
|
$
|
(62
|
)
|
The following tables present consolidating information for the Subsidiary Guarantors.
FELCOR LODGING TRUST INCORPORATED AND FELCOR LODGING LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
|
12.
|
FelCor LP’s Consolidating Financial Information – (continued)
|
FELCOR LODGING LIMITED PARTNERSHIP
CONDENSED CONSOLIDATING BALANCE SHEET
June 30, 2012
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FelCor LP
|
|
Subsidiary Guarantors
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Total Consolidated
|
Net investment in hotels
|
$
|
69,750
|
|
|
$
|
803,671
|
|
|
$
|
1,002,747
|
|
|
$
|
—
|
|
|
$
|
1,876,168
|
|
Hotel development
|
—
|
|
|
—
|
|
|
130,727
|
|
|
—
|
|
|
130,727
|
|
Equity investment in consolidated entities
|
1,451,731
|
|
|
—
|
|
|
—
|
|
|
(1,451,731
|
)
|
|
—
|
|
Investment in unconsolidated entities
|
46,809
|
|
|
11,705
|
|
|
1,425
|
|
|
—
|
|
|
59,939
|
|
Cash and cash equivalents
|
21,882
|
|
|
39,223
|
|
|
2,994
|
|
|
—
|
|
|
64,099
|
|
Restricted cash
|
—
|
|
|
8,830
|
|
|
74,947
|
|
|
—
|
|
|
83,777
|
|
Accounts receivable, net
|
742
|
|
|
29,900
|
|
|
345
|
|
|
—
|
|
|
30,987
|
|
Deferred expenses, net
|
17,849
|
|
|
—
|
|
|
8,454
|
|
|
—
|
|
|
26,303
|
|
Other assets
|
13,188
|
|
|
11,745
|
|
|
5,900
|
|
|
—
|
|
|
30,833
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
$
|
1,621,951
|
|
|
$
|
905,074
|
|
|
$
|
1,227,539
|
|
|
$
|
(1,451,731
|
)
|
|
$
|
2,302,833
|
|
|
|
|
|
|
|
|
|
|
|
Debt, net
|
$
|
989,878
|
|
|
$
|
—
|
|
|
$
|
544,874
|
|
|
$
|
—
|
|
|
$
|
1,534,752
|
|
Distributions payable
|
76,293
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
76,293
|
|
Accrued expenses and other liabilities
|
26,939
|
|
|
99,942
|
|
|
9,073
|
|
|
—
|
|
|
135,954
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
|
1,093,110
|
|
|
99,942
|
|
|
553,947
|
|
|
—
|
|
|
1,746,999
|
|
|
|
|
|
|
|
|
|
|
|
Redeemable units
|
3,320
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,320
|
|
|
|
|
|
|
|
|
|
|
|
Preferred units
|
478,774
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
478,774
|
|
Common units
|
46,747
|
|
|
779,493
|
|
|
646,399
|
|
|
(1,451,731
|
)
|
|
20,908
|
|
Accumulated other comprehensive income
|
—
|
|
|
25,839
|
|
|
—
|
|
|
—
|
|
|
25,839
|
|
Total FelCor LP partners’ capital
|
525,521
|
|
|
805,332
|
|
|
646,399
|
|
|
(1,451,731
|
)
|
|
525,521
|
|
Noncontrolling interests
|
—
|
|
|
(200
|
)
|
|
27,193
|
|
|
—
|
|
|
26,993
|
|
Total partners’ capital
|
525,521
|
|
|
805,132
|
|
|
673,592
|
|
|
(1,451,731
|
)
|
|
552,514
|
|
Total liabilities and partners’ capital
|
$
|
1,621,951
|
|
|
$
|
905,074
|
|
|
$
|
1,227,539
|
|
|
$
|
(1,451,731
|
)
|
|
$
|
2,302,833
|
|
FELCOR LODGING TRUST INCORPORATED AND FELCOR LODGING LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
|
12.
|
FelCor LP’s Consolidating Financial Information – (continued)
|
FELCOR LODGING LIMITED PARTNERSHIP
CONDENSED CONSOLIDATING BALANCE SHEET
December 31, 2011
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FelCor LP
|
|
Subsidiary Guarantors
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Total Consolidated
|
Net investment in hotels
|
$
|
67,828
|
|
|
$
|
805,280
|
|
|
$
|
1,080,687
|
|
|
$
|
—
|
|
|
$
|
1,953,795
|
|
Hotel development
|
—
|
|
|
—
|
|
|
120,163
|
|
|
—
|
|
|
120,163
|
|
Equity investment in consolidated entities
|
1,478,347
|
|
|
—
|
|
|
—
|
|
|
(1,478,347
|
)
|
|
—
|
|
Investment in unconsolidated entities
|
56,492
|
|
|
12,063
|
|
|
1,447
|
|
|
—
|
|
|
70,002
|
|
Cash and cash equivalents
|
23,503
|
|
|
67,001
|
|
|
3,254
|
|
|
—
|
|
|
93,758
|
|
Restricted cash
|
—
|
|
|
11,514
|
|
|
72,726
|
|
|
—
|
|
|
84,240
|
|
Accounts receivable, net
|
540
|
|
|
26,357
|
|
|
238
|
|
|
—
|
|
|
27,135
|
|
Deferred expenses, net
|
24,101
|
|
|
—
|
|
|
5,671
|
|
|
—
|
|
|
29,772
|
|
Other assets
|
8,507
|
|
|
10,817
|
|
|
5,039
|
|
|
—
|
|
|
24,363
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
$
|
1,659,318
|
|
|
$
|
933,032
|
|
|
$
|
1,289,225
|
|
|
$
|
(1,478,347
|
)
|
|
$
|
2,403,228
|
|
|
|
|
|
|
|
|
|
|
|
Debt, net
|
$
|
984,931
|
|
|
$
|
—
|
|
|
$
|
611,535
|
|
|
$
|
—
|
|
|
$
|
1,596,466
|
|
Distributions payable
|
76,293
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
76,293
|
|
Accrued expenses and other liabilities
|
33,530
|
|
|
98,127
|
|
|
8,891
|
|
|
—
|
|
|
140,548
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
|
1,094,754
|
|
|
98,127
|
|
|
620,426
|
|
|
—
|
|
|
1,813,307
|
|
|
|
|
|
|
|
|
|
|
|
Redeemable units
|
3,026
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,026
|
|
|
|
|
|
|
|
|
|
|
|
Preferred units
|
478,774
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
478,774
|
|
Common units
|
82,764
|
|
|
810,554
|
|
|
641,945
|
|
|
(1,478,347
|
)
|
|
56,916
|
|
Accumulated other comprehensive income
|
—
|
|
|
25,848
|
|
|
—
|
|
|
—
|
|
|
25,848
|
|
Total FelCor LP partners’ capital
|
561,538
|
|
|
836,402
|
|
|
641,945
|
|
|
(1,478,347
|
)
|
|
561,538
|
|
Noncontrolling interests
|
—
|
|
|
(1,497
|
)
|
|
26,854
|
|
|
—
|
|
|
25,357
|
|
Total partners’ capital
|
561,538
|
|
|
834,905
|
|
|
668,799
|
|
|
(1,478,347
|
)
|
|
586,895
|
|
Total liabilities and partners’ capital
|
$
|
1,659,318
|
|
|
$
|
933,032
|
|
|
$
|
1,289,225
|
|
|
$
|
(1,478,347
|
)
|
|
$
|
2,403,228
|
|
FELCOR LODGING TRUST INCORPORATED AND FELCOR LODGING LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
|
12.
|
FelCor LP’s Consolidating Financial Information – (continued)
|
FELCOR LODGING LIMITED PARTNERSHIP
CONDENSED
CONSOLIDATING STATEMENT OF OPERATIONS
For the Three Months Ended
June 30, 2012
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FelCor LP
|
|
Subsidiary Guarantors
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Total Consolidated
|
Revenues:
|
|
|
|
|
|
|
|
|
|
Hotel operating revenue
|
$
|
—
|
|
|
$
|
256,045
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
256,045
|
|
Percentage lease revenue
|
1,578
|
|
|
—
|
|
|
45,687
|
|
|
(47,265
|
)
|
|
—
|
|
Other revenue
|
4
|
|
|
823
|
|
|
129
|
|
|
—
|
|
|
956
|
|
Total revenues
|
1,582
|
|
|
256,868
|
|
|
45,816
|
|
|
(47,265
|
)
|
|
257,001
|
|
|
|
|
|
|
|
|
|
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
Hotel operating expenses
|
—
|
|
|
166,449
|
|
|
—
|
|
|
—
|
|
|
166,449
|
|
Taxes, insurance and lease expense
|
443
|
|
|
66,841
|
|
|
5,173
|
|
|
(47,265
|
)
|
|
25,192
|
|
Corporate expenses
|
(1,650
|
)
|
|
4,291
|
|
|
3,526
|
|
|
—
|
|
|
6,167
|
|
Depreciation and amortization
|
1,143
|
|
|
12,136
|
|
|
18,510
|
|
|
—
|
|
|
31,789
|
|
Impairment loss
|
—
|
|
|
—
|
|
|
1,335
|
|
|
—
|
|
|
1,335
|
|
Other expenses
|
59
|
|
|
672
|
|
|
69
|
|
|
—
|
|
|
800
|
|
Total operating expenses
|
(5
|
)
|
|
250,389
|
|
|
28,613
|
|
|
(47,265
|
)
|
|
231,732
|
|
Operating income
|
1,587
|
|
|
6,479
|
|
|
17,203
|
|
|
—
|
|
|
25,269
|
|
Interest expense, net
|
(21,320
|
)
|
|
(282
|
)
|
|
(10,045
|
)
|
|
—
|
|
|
(31,647
|
)
|
Debt extinguishment
|
—
|
|
|
—
|
|
|
(162
|
)
|
|
—
|
|
|
(162
|
)
|
Loss before equity in income from unconsolidated entities
|
(19,733
|
)
|
|
6,197
|
|
|
6,996
|
|
|
—
|
|
|
(6,540
|
)
|
Equity in loss from consolidated entities
|
30,628
|
|
|
—
|
|
|
—
|
|
|
(30,628
|
)
|
|
—
|
|
Equity in income from unconsolidated entities
|
985
|
|
|
388
|
|
|
(11
|
)
|
|
—
|
|
|
1,362
|
|
Loss from continuing operations
|
11,880
|
|
|
6,585
|
|
|
6,985
|
|
|
(30,628
|
)
|
|
(5,178
|
)
|
Income from discontinued operations
|
—
|
|
|
10,409
|
|
|
6,797
|
|
|
—
|
|
|
17,206
|
|
Net income
|
11,880
|
|
|
16,994
|
|
|
13,782
|
|
|
(30,628
|
)
|
|
12,028
|
|
Income attributable to noncontrolling interests
|
—
|
|
|
24
|
|
|
(172
|
)
|
|
—
|
|
|
(148
|
)
|
Net income attributable to FelCor LP
|
11,880
|
|
|
17,018
|
|
|
13,610
|
|
|
(30,628
|
)
|
|
11,880
|
|
Preferred distributions
|
(9,678
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9,678
|
)
|
Net income attributable to FelCor LP common unitholders
|
$
|
2,202
|
|
|
$
|
17,018
|
|
|
$
|
13,610
|
|
|
$
|
(30,628
|
)
|
|
$
|
2,202
|
|
FELCOR LODGING TRUST INCORPORATED AND FELCOR LODGING LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
|
12.
|
FelCor LP’s Consolidating Financial Information – (continued)
|
FELCOR LODGING LIMITED PARTNERSHIP
CONDENSED
CONSOLIDATING STATEMENT OF OPERATIONS
For the Three Months Ended
June 30, 2011
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FelCor LP
|
|
Subsidiary Guarantors
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Total Consolidated
|
Revenues:
|
|
|
|
|
|
|
|
|
|
Hotel operating revenue
|
$
|
—
|
|
|
$
|
239,392
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
239,392
|
|
Percentage lease revenue
|
1,629
|
|
|
—
|
|
|
44,468
|
|
|
(46,097
|
)
|
|
—
|
|
Other revenue
|
2
|
|
|
904
|
|
|
105
|
|
|
—
|
|
|
1,011
|
|
Total revenues
|
1,631
|
|
|
240,296
|
|
|
44,573
|
|
|
(46,097
|
)
|
|
240,403
|
|
|
|
|
|
|
|
|
|
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
Hotel operating expenses
|
—
|
|
|
157,867
|
|
|
—
|
|
|
—
|
|
|
157,867
|
|
Taxes, insurance and lease expense
|
537
|
|
|
62,727
|
|
|
5,174
|
|
|
(46,097
|
)
|
|
22,341
|
|
Corporate expenses
|
127
|
|
|
3,790
|
|
|
2,993
|
|
|
—
|
|
|
6,910
|
|
Depreciation and amortization
|
1,154
|
|
|
11,300
|
|
|
18,503
|
|
|
—
|
|
|
30,957
|
|
Impairment loss
|
—
|
|
|
4,315
|
|
|
2,688
|
|
|
—
|
|
|
7,003
|
|
Other expenses
|
(92
|
)
|
|
1,641
|
|
|
67
|
|
|
—
|
|
|
1,616
|
|
Total operating expenses
|
1,726
|
|
|
241,640
|
|
|
29,425
|
|
|
(46,097
|
)
|
|
226,694
|
|
Operating income
|
(95
|
)
|
|
(1,344
|
)
|
|
15,148
|
|
|
—
|
|
|
13,709
|
|
Interest expense, net
|
(24,121
|
)
|
|
(608
|
)
|
|
(9,618
|
)
|
|
—
|
|
|
(34,347
|
)
|
Debt extinguishment
|
(27,354
|
)
|
|
—
|
|
|
3,694
|
|
|
—
|
|
|
(23,660
|
)
|
Gain on involuntary conversion, net
|
(21
|
)
|
|
57
|
|
|
(15
|
)
|
|
—
|
|
|
21
|
|
Loss before equity in income from unconsolidated entities
|
(51,591
|
)
|
|
(1,895
|
)
|
|
9,209
|
|
|
—
|
|
|
(44,277
|
)
|
Equity in loss from consolidated entities
|
9,272
|
|
|
—
|
|
|
—
|
|
|
(9,272
|
)
|
|
—
|
|
Equity in income from unconsolidated entities
|
(112
|
)
|
|
154
|
|
|
(11
|
)
|
|
—
|
|
|
31
|
|
Loss from continuing operations
|
(42,431
|
)
|
|
(1,741
|
)
|
|
9,198
|
|
|
(9,272
|
)
|
|
(44,246
|
)
|
Income from discontinued operations
|
(17
|
)
|
|
(5,138
|
)
|
|
7,004
|
|
|
—
|
|
|
1,849
|
|
Net loss
|
(42,448
|
)
|
|
(6,879
|
)
|
|
16,202
|
|
|
(9,272
|
)
|
|
(42,397
|
)
|
Income attributable to noncontrolling interests
|
—
|
|
|
(75
|
)
|
|
24
|
|
|
—
|
|
|
(51
|
)
|
Net loss attributable to FelCor LP
|
(42,448
|
)
|
|
(6,954
|
)
|
|
16,226
|
|
|
(9,272
|
)
|
|
(42,448
|
)
|
Preferred distributions
|
(9,678
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9,678
|
)
|
Net loss attributable to FelCor LP common unitholders
|
$
|
(52,126
|
)
|
|
$
|
(6,954
|
)
|
|
$
|
16,226
|
|
|
$
|
(9,272
|
)
|
|
$
|
(52,126
|
)
|
FELCOR LODGING TRUST INCORPORATED AND FELCOR LODGING LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
|
12.
|
FelCor LP’s Consolidating Financial Information – (continued)
|
FELCOR LODGING LIMITED PARTNERSHIP
CONDENSED
CONSOLIDATING STATEMENT OF OPERATIONS
For the Six Months Ended
June 30, 2012
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FelCor LP
|
|
Subsidiary Guarantors
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Total Consolidated
|
Revenues:
|
|
|
|
|
|
|
|
|
|
Hotel operating revenue
|
$
|
—
|
|
|
$
|
477,212
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
477,212
|
|
Percentage lease revenue
|
2,826
|
|
|
—
|
|
|
88,958
|
|
|
(91,784
|
)
|
|
—
|
|
Other revenue
|
5
|
|
|
1,043
|
|
|
183
|
|
|
—
|
|
|
1,231
|
|
Total revenues
|
2,831
|
|
|
478,255
|
|
|
89,141
|
|
|
(91,784
|
)
|
|
478,443
|
|
|
|
|
|
|
|
|
|
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
Hotel operating expenses
|
—
|
|
|
324,466
|
|
|
—
|
|
|
—
|
|
|
324,466
|
|
Taxes, insurance and lease expense
|
746
|
|
|
127,808
|
|
|
10,735
|
|
|
(91,784
|
)
|
|
47,505
|
|
Corporate expenses
|
194
|
|
|
7,701
|
|
|
6,484
|
|
|
—
|
|
|
14,379
|
|
Depreciation and amortization
|
2,275
|
|
|
23,888
|
|
|
37,199
|
|
|
—
|
|
|
63,362
|
|
Impairment loss
|
—
|
|
|
—
|
|
|
1,335
|
|
|
—
|
|
|
1,335
|
|
Other expenses
|
477
|
|
|
1,180
|
|
|
106
|
|
|
—
|
|
|
1,763
|
|
Total operating expenses
|
3,692
|
|
|
485,043
|
|
|
55,859
|
|
|
(91,784
|
)
|
|
452,810
|
|
Operating income
|
(861
|
)
|
|
(6,788
|
)
|
|
33,282
|
|
|
—
|
|
|
25,633
|
|
Interest expense, net
|
(42,419
|
)
|
|
(628
|
)
|
|
(19,641
|
)
|
|
—
|
|
|
(62,688
|
)
|
Debt extinguishment
|
(7
|
)
|
|
—
|
|
|
(162
|
)
|
|
—
|
|
|
(169
|
)
|
Loss before equity in income from unconsolidated entities
|
(43,287
|
)
|
|
(7,416
|
)
|
|
13,479
|
|
|
—
|
|
|
(37,224
|
)
|
Equity in income from consolidated entities
|
25,490
|
|
|
—
|
|
|
—
|
|
|
(25,490
|
)
|
|
—
|
|
Equity in income from unconsolidated entities
|
1,018
|
|
|
143
|
|
|
(23
|
)
|
|
—
|
|
|
1,138
|
|
Loss from continuing operations
|
(16,779
|
)
|
|
(7,273
|
)
|
|
13,456
|
|
|
(25,490
|
)
|
|
(36,086
|
)
|
Income from discontinued operations
|
—
|
|
|
10,431
|
|
|
8,822
|
|
|
—
|
|
|
19,253
|
|
Net loss
|
(16,779
|
)
|
|
3,158
|
|
|
22,278
|
|
|
(25,490
|
)
|
|
(16,833
|
)
|
Loss attributable to noncontrolling interests
|
—
|
|
|
289
|
|
|
(235
|
)
|
|
—
|
|
|
54
|
|
Net loss attributable to FelCor LP
|
(16,779
|
)
|
|
3,447
|
|
|
22,043
|
|
|
(25,490
|
)
|
|
(16,779
|
)
|
Preferred distributions
|
(19,356
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(19,356
|
)
|
Net loss attributable to FelCor LP common unitholders
|
$
|
(36,135
|
)
|
|
$
|
3,447
|
|
|
$
|
22,043
|
|
|
$
|
(25,490
|
)
|
|
$
|
(36,135
|
)
|
FELCOR LODGING TRUST INCORPORATED AND FELCOR LODGING LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
|
12.
|
FelCor LP’s Consolidating Financial Information – (continued)
|
FELCOR LODGING LIMITED PARTNERSHIP
CONDENSED
CONSOLIDATING STATEMENT OF OPERATIONS
For the Six Months Ended
June 30, 2011
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FelCor LP
|
|
Subsidiary Guarantors
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Total Consolidated
|
Revenues:
|
|
|
|
|
|
|
|
|
|
Hotel operating revenue
|
$
|
—
|
|
|
$
|
446,416
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
446,416
|
|
Percentage lease revenue
|
2,875
|
|
|
—
|
|
|
84,945
|
|
|
(87,820
|
)
|
|
—
|
|
Other revenue
|
9
|
|
|
1,092
|
|
|
135
|
|
|
—
|
|
|
1,236
|
|
Total revenues
|
2,884
|
|
|
447,508
|
|
|
85,080
|
|
|
(87,820
|
)
|
|
447,652
|
|
|
|
|
|
|
|
|
|
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
Hotel operating expenses
|
—
|
|
|
304,444
|
|
|
—
|
|
|
—
|
|
|
304,444
|
|
Taxes, insurance and lease expense
|
816
|
|
|
118,572
|
|
|
10,551
|
|
|
(87,820
|
)
|
|
42,119
|
|
Corporate expenses
|
295
|
|
|
8,950
|
|
|
7,202
|
|
|
—
|
|
|
16,447
|
|
Depreciation and amortization
|
2,319
|
|
|
22,360
|
|
|
37,065
|
|
|
—
|
|
|
61,744
|
|
Impairment loss
|
—
|
|
|
4,315
|
|
|
2,688
|
|
|
—
|
|
|
7,003
|
|
Other expenses
|
23
|
|
|
2,124
|
|
|
100
|
|
|
—
|
|
|
2,247
|
|
Total operating expenses
|
3,453
|
|
|
460,765
|
|
|
57,606
|
|
|
(87,820
|
)
|
|
434,004
|
|
Operating income
|
(569
|
)
|
|
(13,257
|
)
|
|
27,474
|
|
|
—
|
|
|
13,648
|
|
Interest expense, net
|
(43,965
|
)
|
|
(1,293
|
)
|
|
(21,858
|
)
|
|
—
|
|
|
(67,116
|
)
|
Debt extinguishment
|
(27,354
|
)
|
|
—
|
|
|
3,449
|
|
|
—
|
|
|
(23,905
|
)
|
Gain on involuntary conversion, net
|
(21
|
)
|
|
207
|
|
|
(15
|
)
|
|
—
|
|
|
171
|
|
Loss before equity in loss from unconsolidated entities
|
(71,909
|
)
|
|
(14,343
|
)
|
|
9,050
|
|
|
—
|
|
|
(77,202
|
)
|
Equity in income from consolidated entities
|
(1,259
|
)
|
|
—
|
|
|
—
|
|
|
1,259
|
|
|
—
|
|
Equity in loss from unconsolidated entities
|
(1,264
|
)
|
|
(265
|
)
|
|
(23
|
)
|
|
—
|
|
|
(1,552
|
)
|
Loss from continuing operations
|
(74,432
|
)
|
|
(14,608
|
)
|
|
9,027
|
|
|
1,259
|
|
|
(78,754
|
)
|
Income from discontinued operations
|
200
|
|
|
(4,991
|
)
|
|
9,422
|
|
|
—
|
|
|
4,631
|
|
Net loss
|
(74,232
|
)
|
|
(19,599
|
)
|
|
18,449
|
|
|
1,259
|
|
|
(74,123
|
)
|
Income attributable to noncontrolling interests
|
—
|
|
|
153
|
|
|
(262
|
)
|
|
—
|
|
|
(109
|
)
|
Net loss attributable to FelCor LP
|
(74,232
|
)
|
|
(19,446
|
)
|
|
18,187
|
|
|
1,259
|
|
|
(74,232
|
)
|
Preferred distributions
|
(19,356
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(19,356
|
)
|
Net loss attributable to FelCor LP common unitholders
|
$
|
(93,588
|
)
|
|
$
|
(19,446
|
)
|
|
$
|
18,187
|
|
|
$
|
1,259
|
|
|
$
|
(93,588
|
)
|
FELCOR LODGING TRUST INCORPORATED AND FELCOR LODGING LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
|
12.
|
FelCor LP’s Consolidating Financial Information – (continued)
|
FELCOR LODGING LIMITED PARTNERSHIP
CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME
For the
Three
Months Ended
June 30, 2012
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FelCor LP
|
|
Subsidiary Guarantors
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Total Consolidated
|
Net income
|
$
|
11,880
|
|
|
$
|
16,994
|
|
|
$
|
13,782
|
|
|
$
|
(30,628
|
)
|
|
$
|
12,028
|
|
Foreign currency translation adjustment
|
—
|
|
|
(317
|
)
|
|
—
|
|
|
—
|
|
|
(317
|
)
|
Comprehensive income
|
11,880
|
|
|
16,677
|
|
|
13,782
|
|
|
(30,628
|
)
|
|
11,711
|
|
Comprehensive income attributable to noncontrolling interests
|
—
|
|
|
24
|
|
|
(172
|
)
|
|
—
|
|
|
(148
|
)
|
Comprehensive income attributable to FelCor LP
|
$
|
11,880
|
|
|
$
|
16,701
|
|
|
$
|
13,610
|
|
|
$
|
(30,628
|
)
|
|
$
|
11,563
|
|
FELCOR LODGING LIMITED PARTNERSHIP
CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE LOSS
For the
Three
Months Ended
June 30, 2011
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FelCor LP
|
|
Subsidiary Guarantors
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Total Consolidated
|
Net loss
|
$
|
(42,448
|
)
|
|
$
|
(6,879
|
)
|
|
$
|
16,202
|
|
|
$
|
(9,272
|
)
|
|
$
|
(42,397
|
)
|
Foreign currency translation adjustment
|
—
|
|
|
186
|
|
|
—
|
|
|
—
|
|
|
186
|
|
Comprehensive loss
|
(42,448
|
)
|
|
(6,693
|
)
|
|
16,202
|
|
|
(9,272
|
)
|
|
(42,211
|
)
|
Comprehensive income attributable to noncontrolling interests
|
—
|
|
|
(75
|
)
|
|
24
|
|
|
—
|
|
|
(51
|
)
|
Comprehensive loss attributable to FelCor LP
|
$
|
(42,448
|
)
|
|
$
|
(6,768
|
)
|
|
$
|
16,226
|
|
|
$
|
(9,272
|
)
|
|
$
|
(42,262
|
)
|
FELCOR LODGING TRUST INCORPORATED AND FELCOR LODGING LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
|
12.
|
FelCor LP’s Consolidating Financial Information – (continued)
|
FELCOR LODGING LIMITED PARTNERSHIP
CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE LOSS
For the
Six
Months Ended
June 30, 2012
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FelCor LP
|
|
Subsidiary Guarantors
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Total Consolidated
|
Net loss
|
$
|
(16,779
|
)
|
|
$
|
3,158
|
|
|
$
|
22,278
|
|
|
$
|
(25,490
|
)
|
|
$
|
(16,833
|
)
|
Foreign currency translation adjustment
|
—
|
|
|
(9
|
)
|
|
—
|
|
|
—
|
|
|
(9
|
)
|
Comprehensive loss
|
(16,779
|
)
|
|
3,149
|
|
|
22,278
|
|
|
(25,490
|
)
|
|
(16,842
|
)
|
Comprehensive loss attributable to noncontrolling interests
|
—
|
|
|
289
|
|
|
(235
|
)
|
|
—
|
|
|
54
|
|
Comprehensive loss attributable to FelCor LP
|
$
|
(16,779
|
)
|
|
$
|
3,438
|
|
|
$
|
22,043
|
|
|
$
|
(25,490
|
)
|
|
$
|
(16,788
|
)
|
FELCOR LODGING LIMITED PARTNERSHIP
CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE LOSS
For the
Six
Months Ended
June 30, 2011
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FelCor LP
|
|
Subsidiary Guarantors
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Total Consolidated
|
Net loss
|
$
|
(74,232
|
)
|
|
$
|
(19,599
|
)
|
|
$
|
18,449
|
|
|
$
|
1,259
|
|
|
$
|
(74,123
|
)
|
Foreign currency translation adjustment
|
—
|
|
|
1,478
|
|
|
—
|
|
|
—
|
|
|
1,478
|
|
Comprehensive loss
|
(74,232
|
)
|
|
(18,121
|
)
|
|
18,449
|
|
|
1,259
|
|
|
(72,645
|
)
|
Comprehensive income attributable to noncontrolling interests
|
—
|
|
|
153
|
|
|
(262
|
)
|
|
—
|
|
|
(109
|
)
|
Comprehensive loss attributable to FelCor LP
|
$
|
(74,232
|
)
|
|
$
|
(17,968
|
)
|
|
$
|
18,187
|
|
|
$
|
1,259
|
|
|
$
|
(72,754
|
)
|
FELCOR LODGING TRUST INCORPORATED AND FELCOR LODGING LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
|
12.
|
FelCor LP’s Consolidating Financial Information – (continued)
|
FELCOR LODGING LIMITED PARTNERSHIP
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
For the
Six
Months Ended
June 30, 2012
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FelCor LP
|
|
Subsidiary Guarantors
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Total Consolidated
|
Operating activities:
|
|
|
|
|
|
|
|
|
|
Cash flows from operating activities
|
$
|
(43,758
|
)
|
|
$
|
13,348
|
|
|
$
|
60,357
|
|
|
$
|
—
|
|
|
$
|
29,947
|
|
Investing activities:
|
|
|
|
|
|
|
|
|
|
Improvements and additions to hotels
|
(6,283
|
)
|
|
(40,454
|
)
|
|
(26,612
|
)
|
|
—
|
|
|
(73,349
|
)
|
Hotel development
|
—
|
|
|
—
|
|
|
(10,317
|
)
|
|
—
|
|
|
(10,317
|
)
|
Proceeds from asset dispositions
|
(14
|
)
|
|
23,013
|
|
|
77,407
|
|
|
—
|
|
|
100,406
|
|
Distributions from unconsolidated entities
|
9,103
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9,103
|
|
Intercompany financing
|
58,783
|
|
|
—
|
|
|
—
|
|
|
(58,783
|
)
|
|
—
|
|
Other
|
—
|
|
|
2,441
|
|
|
(1,978
|
)
|
|
—
|
|
|
463
|
|
Cash flows from investing activities
|
61,589
|
|
|
(15,000
|
)
|
|
38,500
|
|
|
(58,783
|
)
|
|
26,306
|
|
Financing activities:
|
|
|
|
|
|
|
|
|
|
Proceeds from borrowings
|
—
|
|
|
—
|
|
|
71,000
|
|
|
—
|
|
|
71,000
|
|
Repayment of borrowings
|
(96
|
)
|
|
—
|
|
|
(137,662
|
)
|
|
—
|
|
|
(137,758
|
)
|
Distributions paid to preferred unitholders
|
(19,356
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(19,356
|
)
|
Intercompany financing
|
—
|
|
|
(26,091
|
)
|
|
(32,692
|
)
|
|
58,783
|
|
|
—
|
|
Other
|
—
|
|
|
—
|
|
|
237
|
|
|
—
|
|
|
237
|
|
Cash flows from financing activities
|
(19,452
|
)
|
|
(26,091
|
)
|
|
(99,117
|
)
|
|
58,783
|
|
|
(85,877
|
)
|
Effect of exchange rate changes on cash
|
—
|
|
|
(35
|
)
|
|
—
|
|
|
—
|
|
|
(35
|
)
|
Change in cash and cash equivalents
|
(1,621
|
)
|
|
(27,778
|
)
|
|
(260
|
)
|
|
—
|
|
|
(29,659
|
)
|
Cash and cash equivalents at beginning of period
|
23,503
|
|
|
67,001
|
|
|
3,254
|
|
|
—
|
|
|
93,758
|
|
Cash and cash equivalents at end of period
|
$
|
21,882
|
|
|
$
|
39,223
|
|
|
$
|
2,994
|
|
|
$
|
—
|
|
|
$
|
64,099
|
|
FELCOR LODGING TRUST INCORPORATED AND FELCOR LODGING LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
|
12.
|
FelCor LP’s Consolidating Financial Information – (continued)
|
FELCOR LODGING LIMITED PARTNERSHIP
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
For the
Six
Months Ended
June 30, 2011
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FelCor LP
|
|
Subsidiary Guarantors
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Total Consolidated
|
Operating activities:
|
|
|
|
|
|
|
|
|
|
Cash flows from operating activities
|
$
|
(49,446
|
)
|
|
$
|
4,892
|
|
|
$
|
59,080
|
|
|
$
|
—
|
|
|
$
|
14,526
|
|
Investing activities:
|
|
|
|
|
|
|
|
|
|
Acquisition of hotels
|
—
|
|
|
(137,985
|
)
|
|
—
|
|
|
—
|
|
|
(137,985
|
)
|
Improvements and additions to hotels
|
(419
|
)
|
|
(12,414
|
)
|
|
(22,411
|
)
|
|
—
|
|
|
(35,244
|
)
|
Proceeds from asset dispositions
|
—
|
|
|
(48
|
)
|
|
52,141
|
|
|
—
|
|
|
52,093
|
|
Intercompany financing
|
(345,212
|
)
|
|
—
|
|
|
—
|
|
|
345,212
|
|
|
—
|
|
Other
|
825
|
|
|
(662
|
)
|
|
214
|
|
|
—
|
|
|
377
|
|
Cash flows from investing activities
|
(344,806
|
)
|
|
(151,109
|
)
|
|
29,944
|
|
|
345,212
|
|
|
(120,759
|
)
|
Financing activities:
|
|
|
|
|
|
|
|
|
|
Proceeds from borrowings
|
525,000
|
|
|
—
|
|
|
562,267
|
|
|
—
|
|
|
1,087,267
|
|
Repayment of borrowings
|
(233,761
|
)
|
|
—
|
|
|
(816,805
|
)
|
|
—
|
|
|
(1,050,566
|
)
|
Payment of deferred financing fees
|
(13,569
|
)
|
|
—
|
|
|
(4,661
|
)
|
|
—
|
|
|
(18,230
|
)
|
Change in restricted cash - financing
|
—
|
|
|
—
|
|
|
(24,000
|
)
|
|
—
|
|
|
(24,000
|
)
|
Distributions paid to preferred unitholders
|
(19,356
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(19,356
|
)
|
Net proceeds from common unit issuance
|
158,476
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
158,476
|
|
Intercompany financing
|
—
|
|
|
151,174
|
|
|
194,038
|
|
|
(345,212
|
)
|
|
—
|
|
Other
|
2,500
|
|
|
—
|
|
|
126
|
|
|
—
|
|
|
2,626
|
|
Cash flows from financing activities
|
419,290
|
|
|
151,174
|
|
|
(89,035
|
)
|
|
(345,212
|
)
|
|
136,217
|
|
Effect of exchange rate changes on cash
|
—
|
|
|
93
|
|
|
—
|
|
|
—
|
|
|
93
|
|
Change in cash and cash equivalents
|
25,038
|
|
|
5,050
|
|
|
(11
|
)
|
|
—
|
|
|
30,077
|
|
Cash and cash equivalents at beginning of period
|
155,350
|
|
|
43,647
|
|
|
1,975
|
|
|
—
|
|
|
200,972
|
|
Cash and cash equivalents at end of period
|
$
|
180,388
|
|
|
$
|
48,697
|
|
|
$
|
1,964
|
|
|
$
|
—
|
|
|
$
|
231,049
|
|
|
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
General
The lodging industry continues to gain momentum as RevPAR growth is above the long term average with improvements driven mostly by increases in average daily rate, or ADR. Business and leisure travel demand continues to increase, while new hotel construction remains at historic low levels.
In the second quarter of
2012
, ADR for our hotels increased
6.6%
, which was slightly offset by a
0.6%
decrease in occupancy (driven mostly by renovation-related disruption), resulting in a
5.9%
increase in RevPAR. Hotel EBITDA margin increased
62
basis points to
28.8%
for the quarter.
We continue to make progress toward achieving the objectives of our long-term strategic plan:
|
|
•
|
We sold six non-strategic hotels for $103 million in May 2012. We used $73 million of these proceeds to repay debt and fund transaction costs. The remaining $30 million was used to pay preferred dividends in arrears in July.
|
|
|
•
|
We have 10 hotels on the market, including three that we have agreed to sell, of which one is subject to a significant non-refundable deposit received in July. We will use proceeds from asset sales to repay existing debt and pay remaining accrued preferred dividends ($37.7 million).
|
|
|
•
|
Work at nine of the ten hotels under renovation or redevelopment has been completed.
|
|
|
•
|
The redevelopment of the 4-plus star Knickerbocker hotel, located in midtown Manhattan, is progressing as planned. The project timeline and budget remains on schedule, and the hotel is scheduled to open in late 2013.
|
Results of Operations
Comparison of the
Three
Months ended
June 30, 2012
and
2011
For the
three
months ended
June 30, 2012
, we recorded
$12.0 million
in net income compared to a
$42.4 million
net loss for the same period in
2011
. Our
2012
net income included
$16.7 million
in net gains on asset sales in discontinued operations. Our
2011
net loss included
$23.7 million
of net losses from debt extinguishment and
$12.3 million
of impairment charges (of which
$5.3 million
are in discontinued operations), which were partially offset by
$6.7 million
of net gains on asset sales in discontinued operations.
In the second quarter of
2012
:
|
|
•
|
Total revenue
was
$257.0 million
, a
6.9%
increase compared to the same period in
2011
. This increase is primarily attributed to a
5.9%
increase in same-store RevPAR (
6.5%
at our core hotels and
4.0%
at our non-strategic hotels), reflecting a
6.6%
increase in ADR (partially offset by a 60 basis point decrease in occupancy), as well as $5.1 million in incremental revenue from our recently-acquired hotels (Royalton and Morgans, acquired in May 2011).
|
|
|
•
|
Hotel departmental expenses
increased
$4.3 million
(including $2.7 million of incremental hotel departmental expenses from our recently-acquired hotels). As a percentage of total revenue, hotel departmental expenses decreased from
35.2%
to
34.6%
compared to the same period in
2011
. This improvement is primarily attributable to revenue increases being driven by ADR as opposed to occupancy.
|
|
|
•
|
Other property-related costs
increased
$3.4 million
due to a combination of higher costs (such as marketing programs) and $1.3 million of incremental other property-related costs from our recently-acquired hotels. As a percentage of total revenue, other property-related costs decreased from
25.9%
to
25.5%
compared to the same period in
2011
. This improvement is primarily attributable to revenue increases being driven by ADR as opposed to occupancy.
|
|
|
•
|
Management and franchise fees
increased
$892,000
compared to the same period in
2011
, primarily due to higher revenues (which serve as the basis for determining such fees). As a percentage of total revenue, these costs remained essentially unchanged from the same period in
2011
.
|
|
|
•
|
Taxes, insurance and lease expense
increased
$2.9 million
compared to the same period in
2011
(including $358,000 of incremental taxes, insurance, and lease expenses from our recently-acquired hotels), and increased as a percentage of total revenue from
9.3%
to
9.8%
compared to the same period in
2011
. The higher percentage of revenue reflects a combination of increased percentage lease expense in
2012
(computed as a percentage of hotel revenues in excess of base rent; as revenue increases, percentage rent increases at a faster rate), lower property taxes in
2011
(reductions received after appeals), and lower general liability insurance in
2011
(due to favorable claims experience).
|
|
|
•
|
Corporate expenses
decreased
$743,000
and decreased as a percentage of total revenue from
2.9%
to
2.4%
. This decrease primarily reflects lower restricted stock amortization in
2012
as a significant portion of restricted stock vested in
2011
.
|
|
|
•
|
Depreciation and amortization expense
increased
$832,000
, compared to the same period in
2011
, primarily reflecting $520,000 of incremental depreciation expense related to our recently-acquired hotels.
|
|
|
•
|
Impairment loss.
Charges of
$1.3 million
in
2012
and
$7.0 million
in
2011
related to one and two hotels, respectively, we are currently marketing for sale. The charges are based on revised estimated fair values obtained through the marketing process that were lower than the net book values for these hotels.
|
|
|
•
|
Debt extinguishment.
During the quarter ended June 30, 2011, we redeemed $144 million of our 10% senior notes due in October 2014 and recognized a $27.4 million debt extinguishment charge related to the 10% prepayment premium and the write-off of a
pro rata
portion of the related debt discount and deferred loan costs, all of which was partially offset by a $3.7 million extinguishment gain on a refinanced mortgage note.
|
|
|
•
|
Net interest expense
decreased
$2.7 million
compared to the same period in
2011
, primarily reflecting a reduction in our average debt outstanding and increased capitalized interest related to redeveloping the Knickerbocker Hotel, all of which was partially offset by an increase in our weighted-average interest rate.
|
|
|
•
|
Discontinued operations
relates to six hotels sold in May 2012 and eight hotels sold in
2011
. Discontinued operations in 2012 primarily consisted of a
$16.7 million
gain on the sale of hotels. Discontinued operations in
2011
primarily consisted of a
$6.7 million
gain on the sale of hotels and
$5.3 million
in impairment charges.
|
Comparison of the Six Months ended
June 30, 2012
and
2011
For the
six
months ended
June 30, 2012
, we recorded a
$16.8 million
net loss compared to a
$74.1 million
net loss for the same period in
2011
. Our
2012
net loss included
$16.7 million
in net gains on asset sales in discontinued operations. Our
2011
net loss included $24.0 million of net losses from debt extinguishment and
$12.3 million
of impairment charges (of which
$5.3 million
are in discontinued operations), which were partially offset by
$6.7 million
of net gains on asset sales in discontinued operations.
In the
six
months ended
June 30, 2012
:
|
|
•
|
Total revenue
was
$478.4 million
, a
6.9%
increase compared to the same period in
2011
. This increase is primarily attributed to a
4.8%
increase in same-store RevPAR (
4.3%
at our core hotels and
6.0%
at our non-strategic hotels), reflecting a
5.1%
increase in ADR (partially offset by a 30 basis point decrease in occupancy), as well as $11.5 million in incremental revenue from our recently-acquired hotels (Royalton and Morgans, acquired in May 2011). Several of our core hotels were under significant renovation or redevelopment during the six months ended June 30, 2012. Without the displacement from these renovations and redevelopments, we estimate that the same-store RevPAR for the core hotels would have increased 6.4% compared to the same period in the prior year.
|
|
|
•
|
Hotel departmental expenses
increased
$11.2 million
(including $6.8 million of incremental hotel departmental expenses from our recently-acquired hotels). As a percentage of total revenue, hotel departmental expenses remained unchanged at
36.0%
compared to the same period in
2011
. Improvement from increases in ADR was offset by changes related to the mix and nature of the business at our recently acquired hotels, which have a higher percentage of food and beverage revenue than the remainder of our portfolio. Food and beverage operations generally has much higher expenses as a percent of revenue than the rooms department.
|
|
|
•
|
Other property-related costs
increased
$7.3 million
due to a combination of higher costs (such as marketing programs) and $3.5 million of incremental other property-related costs from our recently-acquired hotels. As a percentage of total revenue, other property-related costs decreased from
27.4%
to
27.2%
compared to the same period in
2011
. This improvement is primarily attributable to revenue increases being driven by ADR as opposed to occupancy.
|
|
|
•
|
Management and franchise fees
increased
$1.6 million
compared to the same period in
2011
, primarily due to higher revenues (which serve as the basis for determining such fees). As a percentage of total revenue, these costs remained essentially unchanged from the same period in
2011
.
|
|
|
•
|
Taxes, insurance and lease expense
increased
$5.4 million
compared to the same period in
2011
(including $999,000 of incremental taxes, insurance, and lease expenses from our recently-acquired hotels), and increased as a percentage of total revenue from
9.4%
to
9.9%
compared to the same period in
2011
. The higher percentage of revenue reflects a combination of increased percentage lease expense in
2012
(computed as a percentage of hotel revenues in excess of base rent; as revenue increases, percentage rent increases at a faster rate), lower property taxes in
2011
(reductions received after appeals), and lower estimated Canadian taxes in
2011
.
|
|
|
•
|
Corporate expenses
decreased
$2.1 million
and decreased as a percentage of total revenue from
3.7%
to
3.0%
. This decrease reflects: i) lower restricted stock amortization in
2012
as a significant portion of restricted stock vested in
2011
and ii) lower payroll tax withholding with respect to restricted cash awards, which were lower in
2012
than in
2011
. With respect to the restricted cash awards, amounts withheld decreased as a result of a decrease in the restricted cash granted compared to the prior year. We recognize payroll tax withholding on these awards as an expense when awarded rather than expensed over the normal three-year vesting periods (as is the case with the remainder of the awards).
|
|
|
•
|
Depreciation and amortization expense
increased
$1.6 million
compared to the same period in
2011
, primarily reflecting $1.3 million of incremental depreciation expense related to our recently-acquired hotels.
|
|
|
•
|
Impairment loss.
Charges of
$1.3 million
in
2012
and
$7.0 million
in
2011
related to one and two hotels, respectively, we are currently marketing for sale. The charges are based on revised estimated fair values obtained through the marketing process that were lower than the net book values for these hotels.
|
|
|
•
|
Net interest expense
decreased
$4.4 million
compared to the same period in
2011
, primarily reflecting a reduction in our average debt outstanding and increased capitalized interest related to redeveloping the Knickerbocker Hotel, all of which was partially offset by an increase in our average interest rate.
|
|
|
•
|
Discontinued operations
relates to six hotels sold in May 2012 and eight hotels sold in
2011
. Discontinued operations in
2012
includes a
$16.7 million
gain on the sale of hotels. Discontinued operations in
2011
includes a
$6.7 million
gain on the sale of hotels and
$5.3 million
in impairment charges.
|
Non-GAAP Financial Measures
We refer in this report to certain “non-GAAP financial measures.” These measures, including FFO, Adjusted FFO, EBITDA, Adjusted EBITDA, Hotel EBITDA, and Hotel EBITDA margin, are measures of our financial performance that are not calculated and presented in accordance with GAAP. The following tables reconcile these non-GAAP measures to the most comparable GAAP financial measure. Immediately following the reconciliations, we include a discussion of why we believe these measures are useful supplemental measures of our performance and the limitations of such measures.
The following tables detail our computation of FFO and Adjusted FFO (in thousands, except for per share data):
Reconciliation of Net Income (Loss) to FFO and Adjusted FFO
(in thousands, except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
2012
|
2011
|
|
Dollars
|
|
Shares
|
|
Per Share Amount
|
|
Dollars
|
|
Shares
|
|
Per Share Amount
|
Net income (loss)
|
$
|
12,028
|
|
|
|
|
|
|
$
|
(42,397
|
)
|
|
|
|
|
Noncontrolling interests
|
(159
|
)
|
|
|
|
|
|
132
|
|
|
|
|
|
Preferred dividends
|
(9,678
|
)
|
|
|
|
|
|
(9,678
|
)
|
|
|
|
|
Net income (loss) attributable to FelCor common stockholders
|
2,191
|
|
|
|
|
|
|
(51,943
|
)
|
|
|
|
|
Less: Undistributed earnings allocated to unvested restricted stock
|
(10
|
)
|
|
|
|
|
|
—
|
|
|
|
|
|
Numerator for basic and diluted income (loss) available to common stockholders
|
2,181
|
|
|
123,638
|
|
|
$
|
0.02
|
|
|
(51,943
|
)
|
|
122,992
|
|
|
$
|
(0.42
|
)
|
Depreciation and amortization
|
31,789
|
|
|
—
|
|
|
0.26
|
|
|
30,957
|
|
|
—
|
|
|
0.25
|
|
Depreciation, discontinued operations and unconsolidated entities
|
2,828
|
|
|
—
|
|
|
0.02
|
|
|
7,456
|
|
|
—
|
|
|
0.06
|
|
Gain on involuntary conversion
|
—
|
|
|
—
|
|
|
—
|
|
|
(21
|
)
|
|
—
|
|
|
—
|
|
Impairment loss
|
1,335
|
|
|
—
|
|
|
0.01
|
|
|
7,003
|
|
|
—
|
|
|
0.06
|
|
Impairment loss, discontinued operations
|
—
|
|
|
—
|
|
|
—
|
|
|
5,301
|
|
|
—
|
|
|
0.04
|
|
Gain on sale of hotels
|
(16,719
|
)
|
|
—
|
|
|
(0.14
|
)
|
|
(6,660
|
)
|
|
—
|
|
|
(0.05
|
)
|
Noncontrolling interests in FelCor LP
|
11
|
|
|
628
|
|
|
—
|
|
|
(183
|
)
|
|
433
|
|
|
(0.01
|
)
|
Undistributed earnings allocated to unvested restricted stock
|
10
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Conversion of unvested restricted stock
|
—
|
|
|
278
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
FFO
|
21,435
|
|
|
124,544
|
|
|
0.17
|
|
|
(8,090
|
)
|
|
123,425
|
|
|
(0.07
|
)
|
Acquisition costs
|
59
|
|
|
—
|
|
|
—
|
|
|
827
|
|
|
—
|
|
|
0.01
|
|
Debt extinguishment, including discontinued operations
|
805
|
|
|
—
|
|
|
0.01
|
|
|
23,710
|
|
|
—
|
|
|
0.19
|
|
Pre-opening costs
|
43
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Conversion of unvested restricted stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
855
|
|
|
—
|
|
Adjusted FFO
|
$
|
22,342
|
|
|
124,544
|
|
|
$
|
0.18
|
|
|
$
|
16,447
|
|
|
124,280
|
|
|
$
|
0.13
|
|
Reconciliation of Net Loss to FFO and Adjusted FFO
(in thousands, except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30,
|
|
2012
|
2011
|
|
Dollars
|
|
Shares
|
|
Per Share Amount
|
|
Dollars
|
|
Shares
|
|
Per Share Amount
|
Net loss
|
$
|
(16,833
|
)
|
|
|
|
|
|
$
|
(74,123
|
)
|
|
|
|
|
Noncontrolling interests
|
239
|
|
|
|
|
|
|
194
|
|
|
|
|
|
Preferred dividends
|
(19,356
|
)
|
|
|
|
|
|
(19,356
|
)
|
|
|
|
|
Net loss attributable to FelCor common stockholders
|
(35,950
|
)
|
|
123,651
|
|
|
$
|
(0.29
|
)
|
|
(93,285
|
)
|
|
109,249
|
|
|
$
|
(0.85
|
)
|
Depreciation and amortization
|
63,362
|
|
|
—
|
|
|
0.51
|
|
|
61,744
|
|
|
—
|
|
|
0.57
|
|
Depreciation, discontinued operations and unconsolidated entities
|
7,084
|
|
|
—
|
|
|
0.06
|
|
|
15,565
|
|
|
—
|
|
|
0.14
|
|
Gain on involuntary conversion
|
—
|
|
|
—
|
|
|
—
|
|
|
(171
|
)
|
|
—
|
|
|
—
|
|
Impairment loss
|
1,335
|
|
|
—
|
|
|
0.01
|
|
|
7,003
|
|
|
—
|
|
|
0.06
|
|
Impairment loss, discontinued operations
|
—
|
|
|
—
|
|
|
—
|
|
|
5,301
|
|
|
—
|
|
|
0.05
|
|
Gain on sale of hotels
|
(16,719
|
)
|
|
—
|
|
|
(0.14
|
)
|
|
(6,660
|
)
|
|
—
|
|
|
(0.06
|
)
|
Noncontrolling interests in FelCor LP
|
(185
|
)
|
|
632
|
|
|
—
|
|
|
(303
|
)
|
|
359
|
|
|
(0.01
|
)
|
Conversion of unvested restricted stock
|
—
|
|
|
233
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
FFO
|
18,927
|
|
|
124,516
|
|
|
0.15
|
|
|
(10,806
|
)
|
|
109,608
|
|
|
(0.10
|
)
|
Acquisition costs
|
97
|
|
|
—
|
|
|
—
|
|
|
946
|
|
|
—
|
|
|
0.01
|
|
Debt extinguishment, including discontinued operations
|
812
|
|
|
—
|
|
|
0.01
|
|
|
23,961
|
|
|
—
|
|
|
0.22
|
|
Severance costs
|
380
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Pre-opening costs
|
43
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Conversion of unvested restricted stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
860
|
|
|
—
|
|
Adjusted FFO
|
$
|
20,259
|
|
|
124,516
|
|
|
$
|
0.16
|
|
|
$
|
14,101
|
|
|
110,468
|
|
|
$
|
0.13
|
|
The following table details our computation of EBITDA and Adjusted EBITDA (in thousands):
Reconciliation of Net Income (Loss) to EBITDA and Adjusted EBITDA
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
June 30,
|
|
June 30,
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
Net income (loss)
|
$
|
12,028
|
|
|
$
|
(42,397
|
)
|
|
$
|
(16,833
|
)
|
|
$
|
(74,123
|
)
|
Depreciation and amortization
|
31,789
|
|
|
30,957
|
|
|
63,362
|
|
|
61,744
|
|
Depreciation, discontinued operations and unconsolidated entities
|
2,828
|
|
|
7,456
|
|
|
7,084
|
|
|
15,565
|
|
Interest expense
|
31,682
|
|
|
34,400
|
|
|
62,771
|
|
|
67,209
|
|
Interest expense, discontinued operations and unconsolidated entities
|
1,229
|
|
|
1,990
|
|
|
2,627
|
|
|
4,197
|
|
Amortization of stock compensation
|
1,242
|
|
|
1,774
|
|
|
2,538
|
|
|
3,577
|
|
Noncontrolling interests in other partnerships
|
(148
|
)
|
|
(51
|
)
|
|
54
|
|
|
(109
|
)
|
EBITDA
|
80,650
|
|
|
34,129
|
|
|
121,603
|
|
|
78,060
|
|
Impairment loss
|
1,335
|
|
|
7,003
|
|
|
1,335
|
|
|
7,003
|
|
Impairment loss, discontinued operations
|
—
|
|
|
5,301
|
|
|
—
|
|
|
5,301
|
|
Debt extinguishment, including discontinued operations
|
805
|
|
|
23,710
|
|
|
812
|
|
|
23,961
|
|
Acquisition costs
|
59
|
|
|
827
|
|
|
97
|
|
|
946
|
|
Gain on sale of hotels
|
(16,719
|
)
|
|
(6,660
|
)
|
|
(16,719
|
)
|
|
(6,660
|
)
|
Gain on involuntary conversion
|
—
|
|
|
(21
|
)
|
|
—
|
|
|
(171
|
)
|
Severance costs
|
—
|
|
|
—
|
|
|
380
|
|
|
—
|
|
Pre-opening costs
|
43
|
|
|
—
|
|
|
43
|
|
|
—
|
|
Adjusted EBITDA
|
$
|
66,173
|
|
|
$
|
64,289
|
|
|
$
|
107,551
|
|
|
$
|
108,440
|
|
The following tables detail our computation of Hotel EBITDA, Hotel EBITDA margin, hotel operating expenses on our same-store hotels, and includes the reconciliation of hotel operating expenses to total operating expenses at the dates presented.
Hotel EBITDA and Hotel EBITDA Margin
(dollars in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
June 30,
|
|
June 30,
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
Same-store operating revenue:
|
|
|
|
|
|
|
|
Room
|
$
|
200,186
|
|
|
$
|
189,033
|
|
|
$
|
373,202
|
|
|
$
|
354,362
|
|
Food and beverage
|
40,616
|
|
|
40,962
|
|
|
77,140
|
|
|
77,004
|
|
Other operating departments
|
15,243
|
|
|
14,280
|
|
|
26,870
|
|
|
26,504
|
|
Same-store operating revenue
|
256,045
|
|
|
244,275
|
|
|
477,212
|
|
|
457,870
|
|
Same-store operating expense:
|
|
|
|
|
|
|
|
Room
|
51,268
|
|
|
49,865
|
|
|
99,001
|
|
|
95,663
|
|
Food and beverage
|
31,537
|
|
|
30,535
|
|
|
61,286
|
|
|
59,507
|
|
Other operating departments
|
6,167
|
|
|
6,481
|
|
|
11,901
|
|
|
12,247
|
|
Other property related costs
|
65,508
|
|
|
63,372
|
|
|
129,943
|
|
|
126,142
|
|
Management and franchise fees
|
11,969
|
|
|
11,224
|
|
|
22,335
|
|
|
21,076
|
|
Taxes, insurance and lease expense
|
15,889
|
|
|
13,995
|
|
|
30,841
|
|
|
27,852
|
|
Same-store operating expense
|
182,338
|
|
|
175,472
|
|
|
355,307
|
|
|
342,487
|
|
Hotel EBITDA
|
$
|
73,707
|
|
|
$
|
68,803
|
|
|
$
|
121,905
|
|
|
$
|
115,383
|
|
Hotel EBITDA Margin
|
28.8
|
%
|
|
28.2
|
%
|
|
25.5
|
%
|
|
25.2
|
%
|
Reconciliation of Same-store Operating Revenue and Same-store Operating Expense to Total Revenue, Total Operating Expense and Operating Income
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
June 30,
|
|
June 30,
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
Same-store operating revenue
(a)
|
$
|
256,045
|
|
|
$
|
244,275
|
|
|
$
|
477,212
|
|
|
$
|
457,870
|
|
Other revenue
|
956
|
|
|
1,011
|
|
|
1,231
|
|
|
1,236
|
|
Revenue from acquired hotels
|
—
|
|
|
(4,883
|
)
|
|
—
|
|
|
(11,454
|
)
|
Total revenue
|
257,001
|
|
|
240,403
|
|
|
478,443
|
|
|
447,652
|
|
Same-store operating expense
(a)
|
182,338
|
|
|
175,472
|
|
|
355,307
|
|
|
342,487
|
|
Consolidated hotel lease expense
(b)
|
11,236
|
|
|
10,497
|
|
|
20,429
|
|
|
18,801
|
|
Unconsolidated taxes, insurance and lease expense
|
(1,933
|
)
|
|
(1,753
|
)
|
|
(3,765
|
)
|
|
(3,436
|
)
|
Corporate expenses
|
6,167
|
|
|
6,910
|
|
|
14,379
|
|
|
16,447
|
|
Depreciation and amortization
|
31,789
|
|
|
30,957
|
|
|
63,362
|
|
|
61,744
|
|
Impairment loss
|
1,335
|
|
|
7,003
|
|
|
1,335
|
|
|
7,003
|
|
Expenses from acquired hotels
|
—
|
|
|
(4,008
|
)
|
|
—
|
|
|
(11,289
|
)
|
Other expenses
|
800
|
|
|
1,616
|
|
|
1,763
|
|
|
2,247
|
|
Total operating expense
|
231,732
|
|
|
226,694
|
|
|
452,810
|
|
|
434,004
|
|
Operating income
|
$
|
25,269
|
|
|
$
|
13,709
|
|
|
$
|
25,633
|
|
|
$
|
13,648
|
|
|
|
(a)
|
For same-store metrics, we have included the two hotels acquired in May 2011 for all periods presented.
|
|
|
(b)
|
Consolidated hotel lease expense represents the percentage lease expense of our 51% owned operating lessees. The offsetting percentage lease revenue is included in equity in income from unconsolidated entities.
|
Substantially all of our non-current assets consist of real estate. Historical cost accounting for real estate assets implicitly assumes that the value of real estate assets diminishes predictably over time. Since real estate values instead have historically risen or fallen with market conditions, most industry investors consider supplemental measures of performance, which are not measures of operating performance under GAAP, to be helpful in evaluating a real estate company’s operations. These supplemental measures are not measures of operating performance under GAAP. However, we consider these non-GAAP measures to be supplemental measures of a hotel REIT’s performance and should be considered along with, but not as an alternative to, net income (loss) attributable to FelCor as a measure of our operating performance.
FFO and EBITDA
The National Association of Real Estate Investment Trusts (“NAREIT”) defines FFO as net income or loss attributable to parent (computed in accordance with GAAP), excluding gains or losses from sales of property, plus depreciation, amortization and impairment losses. FFO for unconsolidated partnerships and joint ventures are calculated on the same basis. We compute FFO in accordance with standards established by NAREIT. This may not be comparable to FFO reported by other REITs that do not define the term in accordance with the current NAREIT definition or that interpret the current NAREIT definition differently than we do.
EBITDA is a commonly used measure of performance in many industries. We define EBITDA as net income or loss attributable to parent (computed in accordance with GAAP) plus interest expenses, income taxes, depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. Adjustments for unconsolidated partnerships and joint ventures are calculated to reflect EBITDA on the same basis.
Adjustments to FFO and EBITDA
We adjust FFO and EBITDA when evaluating our performance because management believes that the exclusion of certain additional items, including but not limited to those described below, provides useful supplemental information to investors regarding our ongoing operating performance and that the presentation of Adjusted FFO, and Adjusted EBITDA when combined with GAAP net income attributable to FelCor, EBITDA and FFO, is beneficial to an investor’s better understanding of our operating performance.
|
|
•
|
Gains and losses related to extinguishment of debt and interest rate swaps -
We exclude gains and losses related to extinguishment of debt and interest rate swaps from FFO and EBITDA because we believe that it is not indicative of ongoing operating performance of our hotel assets. This also represents an acceleration of interest expense or a reduction of interest expense, and interest expense is excluded from EBITDA.
|
|
|
•
|
Cumulative effect of a change in accounting principle
- Infrequently, the Financial Accounting Standards Board promulgates new accounting standards that require the consolidated statements of operations to reflect the cumulative effect of a change in accounting principle. We exclude these one-time adjustments in computing Adjusted FFO and Adjusted EBITDA because they do not reflect our actual performance for that period.
|
In addition, to derive Adjusted EBITDA we exclude gains or losses on the sale of depreciable assets and impairment losses because we believe that including them in EBITDA is not consistent with reflecting the ongoing performance of our remaining assets. Additionally, the gain or loss on sale of depreciable assets and impairment losses represents either accelerated depreciation or excess depreciation in previous periods, and depreciation is excluded from EBITDA.
Hotel EBITDA and Hotel EBITDA Margin
Hotel EBITDA and Hotel EBITDA margin are commonly used measures of performance in the hotel industry and give investors a more complete understanding of the operating results over which our individual hotels and operating managers have direct control. We believe that Hotel EBITDA and Hotel EBITDA margin are useful to investors by providing greater transparency with respect to two significant measures used by us in our financial and operational decision-making. Additionally, using these measures facilitates comparisons with other hotel REITs and hotel owners. We present Hotel EBITDA and Hotel EBITDA margin by eliminating from continuing operations all revenues and expenses not directly associated with hotel operations including but not limited to corporate-level expenses; impairment losses; gains or losses on disposition of assets; and gains and losses related to extinguishment of debt. We eliminate corporate-level costs and expenses because we believe property-level results provide investors with supplemental information into the ongoing operational performance of our hotels and the effectiveness of management on a property-level basis. We exclude the effect of impairment losses, gains or losses on disposition of assets, and gains or losses related to extinguishment of debt because we believe that including these is not consistent with reflecting the ongoing performance of our remaining assets. We also eliminate consolidated percentage rent paid to unconsolidated entities, which is effectively eliminated by noncontrolling interests and equity in income from unconsolidated subsidiaries, and include the cost of unconsolidated taxes, insurance and lease expense, to reflect the entire operating costs applicable to our hotels. Hotel EBITDA and Hotel EBITDA margins are presented on a same-store basis.
Use and Limitations of Non-GAAP Measures
Our management and Board of Directors use FFO, Adjusted FFO, EBITDA, Adjusted EBITDA, Same-store Adjusted EBITDA, Hotel EBITDA and Hotel EBITDA margin to evaluate the performance of our hotels and to facilitate comparisons between us and other lodging REITs, hotel owners who are not REITs and other capital intensive companies. We use Hotel EBITDA and Hotel EBITDA margin in evaluating hotel-level performance and the operating efficiency of our hotel managers.
The use of these non-GAAP financial measures has certain limitations. These non-GAAP financial measures as presented by us, may not be comparable to non-GAAP financial measures as calculated by other real estate companies. These measures do not reflect certain expenses or expenditures that we incurred and will incur, such as depreciation, interest and capital expenditures. Management compensates for these limitations by separately considering the impact of these excluded items to the extent they are material to operating decisions or assessments of our operating performance. Our reconciliations to the most comparable GAAP financial measures, and our consolidated statements of operations and cash flows, include interest expense, capital expenditures, and other excluded items, all of which should be considered when evaluating our performance, as well as the usefulness of our non-GAAP financial measures.
These non-GAAP financial measures are used in addition to and in conjunction with results presented in accordance with GAAP. They should not be considered as alternatives to operating profit, cash flow from operations, or any other operating performance measure prescribed by GAAP. These non-GAAP financial measures reflect additional ways of viewing our operations that we believe, when viewed with our GAAP results and the reconciliations to the corresponding GAAP financial measures, provide a more complete understanding of factors and trends affecting our business than could be obtained absent this disclosure. Management strongly encourages investors to review our financial information in its entirety and not to rely on a single financial measure.
Pro Rata Share of Rooms Owned
The following table sets forth, at
June 30, 2012
, our
pro rata
share of hotel rooms, included in continuing operations, after giving consideration to the portion of rooms attributed to our partners in our consolidated and unconsolidated joint ventures:
|
|
|
|
|
|
|
|
|
Hotels
|
|
Room Count at June 30, 2012
|
Consolidated Hotels
|
69
|
|
|
|
20,052
|
|
Unconsolidated hotel operations
|
1
|
|
|
|
171
|
|
Total hotels
|
70
|
|
|
|
20,223
|
|
|
|
|
|
|
50% joint ventures
|
13
|
|
|
|
(1,573
|
)
|
60% joint venture
|
1
|
|
|
|
(214
|
)
|
82% joint venture
|
1
|
|
|
|
(40
|
)
|
90% joint ventures
|
3
|
|
|
|
(68
|
)
|
Pro rata rooms attributed to joint venture partners
|
|
|
|
(1,895
|
)
|
Pro rata share of rooms owned
|
|
|
|
18,328
|
|
Hotel Portfolio Composition
The following table illustrates the distribution of same-store hotels.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Brand
|
|
Hotels
|
|
Rooms
|
|
% of Total Rooms
|
|
2011 Hotel EBITDA
(in thousands)
(a)
|
Embassy Suites Hotels
|
21
|
|
|
|
5,743
|
|
|
|
29
|
|
|
|
$
|
79,977
|
|
|
Holiday Inn
|
9
|
|
|
|
3,120
|
|
|
|
16
|
|
|
|
32,535
|
|
|
Doubletree and Hilton
|
5
|
|
|
|
1,206
|
|
|
|
6
|
|
|
|
15,347
|
|
|
Sheraton and Westin
|
4
|
|
|
|
1,604
|
|
|
|
8
|
|
|
|
15,198
|
|
|
Renaissance and Marriott
|
3
|
|
|
|
1,321
|
|
|
|
7
|
|
|
|
11,354
|
|
|
Fairmont
|
1
|
|
|
|
383
|
|
|
|
1
|
|
|
|
5,699
|
|
|
Morgans/Royalton
|
2
|
|
|
|
282
|
|
|
|
1
|
|
|
|
3,845
|
|
|
Core hotels
|
45
|
|
|
|
13,659
|
|
|
|
68
|
|
|
|
163,955
|
|
|
Non-strategic hotels
|
24
|
|
|
|
6,393
|
|
|
|
32
|
|
|
|
56,105
|
|
|
Same-store hotels
|
69
|
|
|
|
20,052
|
|
|
|
100
|
|
|
|
$
|
220,060
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Market
|
|
|
|
|
|
|
|
|
|
|
|
|
San Francisco area
|
4
|
|
|
|
1,637
|
|
|
|
8
|
|
|
|
$
|
16,808
|
|
|
Boston
|
3
|
|
|
|
916
|
|
|
|
5
|
|
|
|
14,027
|
|
|
Los Angeles area
|
3
|
|
|
|
677
|
|
|
|
3
|
|
|
|
13,727
|
|
|
South Florida
|
3
|
|
|
|
923
|
|
|
|
5
|
|
|
|
13,113
|
|
|
New York area
|
4
|
|
|
|
817
|
|
|
|
4
|
|
|
|
9,700
|
|
|
Philadelphia
|
2
|
|
|
|
728
|
|
|
|
4
|
|
|
|
8,805
|
|
|
Atlanta
|
3
|
|
|
|
952
|
|
|
|
5
|
|
|
|
8,418
|
|
|
Myrtle Beach
|
2
|
|
|
|
640
|
|
|
|
3
|
|
|
|
7,860
|
|
|
Dallas
|
2
|
|
|
|
784
|
|
|
|
4
|
|
|
|
7,151
|
|
|
San Diego
|
1
|
|
|
|
600
|
|
|
|
3
|
|
|
|
6,142
|
|
|
Orlando
|
2
|
|
|
|
473
|
|
|
|
2
|
|
|
|
5,809
|
|
|
Other markets
|
16
|
|
|
|
4,512
|
|
|
|
22
|
|
|
|
52,395
|
|
|
Core hotels
|
45
|
|
|
|
13,659
|
|
|
|
68
|
|
|
|
163,955
|
|
|
Non-strategic hotels
|
24
|
|
|
|
6,393
|
|
|
|
32
|
|
|
|
56,105
|
|
|
Same-store hotels
|
69
|
|
|
|
20,052
|
|
|
|
100
|
|
|
|
$
|
220,060
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Location
|
|
|
|
|
|
|
|
|
|
|
|
|
Urban
|
16
|
|
|
|
4,931
|
|
|
|
25
|
|
|
|
$
|
64,841
|
|
|
Airport
|
10
|
|
|
|
3,267
|
|
|
|
16
|
|
|
|
35,570
|
|
|
Resort
|
10
|
|
|
|
2,928
|
|
|
|
15
|
|
|
|
35,194
|
|
|
Suburban
|
9
|
|
|
|
2,533
|
|
|
|
12
|
|
|
|
28,350
|
|
|
Core hotels
|
45
|
|
|
|
13,659
|
|
|
|
68
|
|
|
|
163,955
|
|
|
Non-strategic hotels
|
24
|
|
|
|
6,393
|
|
|
|
32
|
|
|
|
56,105
|
|
|
Same-store hotels
|
69
|
|
|
|
20,052
|
|
|
|
100
|
|
|
|
$
|
220,060
|
|
|
|
|
(a)
|
Hotel EBITDA is a non-GAAP financial measure. A detailed reconciliation and further discussion of Hotel EBITDA is contained in the “Non-GAAP Financial Measures” section of Management’s Discussion and Analysis of Financial Condition and Results of Operations in Item 2 of this Quarterly Report on Form 10‑Q.
|
Hotel Operating Statistics
The following tables set forth occupancy, ADR and RevPAR for the
three
and
six
months ended
June 30, 2012
and
2011
, and the percentage changes therein for the periods presented, for our same-store Consolidated Hotels included in continuing operations.
Operating Statistics by Brand
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Occupancy (%)
|
|
Three Months Ended
|
|
|
|
|
Six Months Ended
|
|
|
|
|
June 30,
|
|
|
|
|
June 30,
|
|
|
|
|
2012
|
|
2011
|
|
%Variance
|
|
2012
|
|
2011
|
|
%Variance
|
Embassy Suites Hotels
|
78.6
|
|
|
80.1
|
|
|
(1.9
|
)
|
|
|
76.2
|
|
|
76.7
|
|
|
(0.7
|
)
|
|
Holiday Inn
|
81.1
|
|
|
80.5
|
|
|
0.8
|
|
|
|
74.2
|
|
|
73.5
|
|
|
1.0
|
|
|
Doubletree and Hilton
|
74.7
|
|
|
75.7
|
|
|
(1.3
|
)
|
|
|
68.8
|
|
|
68.2
|
|
|
0.8
|
|
|
Sheraton and Westin
|
70.9
|
|
|
70.4
|
|
|
0.7
|
|
|
|
64.2
|
|
|
68.1
|
|
|
(5.8
|
)
|
|
Renaissance and Marriott
|
72.1
|
|
|
72.8
|
|
|
(1.0
|
)
|
|
|
72.8
|
|
|
71.9
|
|
|
1.3
|
|
|
Fairmont
|
76.3
|
|
|
84.1
|
|
|
(9.2
|
)
|
|
|
52.0
|
|
|
68.6
|
|
|
(24.2
|
)
|
|
Morgans/Royalton
|
88.0
|
|
|
92.0
|
|
|
(4.4
|
)
|
|
|
82.0
|
|
|
86.0
|
|
|
(4.7
|
)
|
|
Core hotels (45)
|
77.5
|
|
|
78.4
|
|
|
(1.1
|
)
|
|
|
72.8
|
|
|
73.7
|
|
|
(1.3
|
)
|
|
Non-strategic hotels (24)
|
74.6
|
|
|
74.3
|
|
|
0.5
|
|
|
|
73.6
|
|
|
72.4
|
|
|
1.7
|
|
|
Same-store hotels (69)
|
76.6
|
|
|
77.1
|
|
|
(0.6
|
)
|
|
|
73.1
|
|
|
73.3
|
|
|
(0.3
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ADR ($)
|
|
Three Months Ended
|
|
|
|
|
Six Months Ended
|
|
|
|
|
June 30,
|
|
|
|
|
June 30,
|
|
|
|
|
2012
|
|
2011
|
|
%Variance
|
|
2012
|
|
2011
|
|
%Variance
|
Embassy Suites Hotels
|
143.26
|
|
|
136.30
|
|
|
5.1
|
|
|
|
144.46
|
|
|
138.28
|
|
|
4.5
|
|
|
Holiday Inn
|
149.16
|
|
|
132.42
|
|
|
12.6
|
|
|
|
137.46
|
|
|
125.33
|
|
|
9.7
|
|
|
Doubletree and Hilton
|
140.78
|
|
|
133.96
|
|
|
5.1
|
|
|
|
137.27
|
|
|
133.45
|
|
|
2.9
|
|
|
Sheraton and Westin
|
118.13
|
|
|
113.65
|
|
|
3.9
|
|
|
|
111.01
|
|
|
111.92
|
|
|
(0.8
|
)
|
|
Renaissance and Marriott
|
198.38
|
|
|
177.78
|
|
|
11.6
|
|
|
|
204.53
|
|
|
187.10
|
|
|
9.3
|
|
|
Fairmont
|
312.75
|
|
|
268.90
|
|
|
16.3
|
|
|
|
286.27
|
|
|
242.34
|
|
|
18.1
|
|
|
Morgans/Royalton
|
318.31
|
|
|
290.43
|
|
|
9.6
|
|
|
|
286.60
|
|
|
269.95
|
|
|
6.2
|
|
|
Core hotels (45)
|
155.22
|
|
|
144.03
|
|
|
7.8
|
|
|
|
150.32
|
|
|
142.26
|
|
|
5.7
|
|
|
Non-strategic hotels (24)
|
119.32
|
|
|
115.22
|
|
|
3.6
|
|
|
|
120.47
|
|
|
115.55
|
|
|
4.2
|
|
|
Same-store hotels (69)
|
144.01
|
|
|
135.13
|
|
|
6.6
|
|
|
|
140.68
|
|
|
133.81
|
|
|
5.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RevPAR ($)
|
|
Three Months Ended
|
|
|
|
|
Six Months Ended
|
|
|
|
|
June 30,
|
|
|
|
|
June 30,
|
|
|
|
|
2012
|
|
2011
|
|
%Variance
|
|
2012
|
|
2011
|
|
%Variance
|
Embassy Suites Hotels
|
112.63
|
|
|
109.19
|
|
|
3.1
|
|
|
|
110.10
|
|
|
106.10
|
|
|
3.8
|
|
|
Holiday Inn
|
121.00
|
|
|
106.61
|
|
|
13.5
|
|
|
|
102.01
|
|
|
92.12
|
|
|
10.7
|
|
|
Doubletree and Hilton
|
105.12
|
|
|
101.35
|
|
|
3.7
|
|
|
|
94.42
|
|
|
91.06
|
|
|
3.7
|
|
|
Sheraton and Westin
|
83.72
|
|
|
79.99
|
|
|
4.7
|
|
|
|
71.29
|
|
|
76.27
|
|
|
(6.5
|
)
|
|
Renaissance and Marriott
|
142.95
|
|
|
129.46
|
|
|
10.4
|
|
|
|
148.88
|
|
|
134.50
|
|
|
10.7
|
|
|
Fairmont
|
238.79
|
|
|
226.12
|
|
|
5.6
|
|
|
|
148.87
|
|
|
166.30
|
|
|
(10.5
|
)
|
|
Morgans/Royalton
|
280.12
|
|
|
267.32
|
|
|
4.8
|
|
|
|
234.95
|
|
|
232.20
|
|
|
1.2
|
|
|
Core hotels (45)
|
120.25
|
|
|
112.86
|
|
|
6.5
|
|
|
|
109.43
|
|
|
104.91
|
|
|
4.3
|
|
|
Non-strategic hotels (24)
|
89.07
|
|
|
85.62
|
|
|
4.0
|
|
|
|
88.68
|
|
|
83.67
|
|
|
6.0
|
|
|
Same-store hotels (69)
|
110.26
|
|
|
104.13
|
|
|
5.9
|
|
|
|
102.78
|
|
|
98.11
|
|
|
4.8
|
|
|
Operating Statistics for Our Top Markets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Occupancy (%)
|
|
Three Months Ended
|
|
|
|
|
Six Months Ended
|
|
|
|
|
June 30,
|
|
|
|
|
June 30,
|
|
|
|
|
2012
|
|
2011
|
|
%Variance
|
|
2012
|
|
2011
|
|
%Variance
|
San Francisco area
|
83.7
|
|
|
|
84.2
|
|
|
|
(0.6
|
)
|
|
|
78.7
|
|
|
|
76.8
|
|
|
|
2.6
|
|
|
Boston
|
80.7
|
|
|
|
84.2
|
|
|
|
(4.2
|
)
|
|
|
64.9
|
|
|
|
76.4
|
|
|
|
(15.2
|
)
|
|
Los Angeles area
|
81.7
|
|
|
|
82.3
|
|
|
|
(0.7
|
)
|
|
|
81.4
|
|
|
|
77.3
|
|
|
|
5.3
|
|
|
South Florida
|
76.9
|
|
|
|
78.3
|
|
|
|
(1.8
|
)
|
|
|
81.5
|
|
|
|
81.8
|
|
|
|
(0.4
|
)
|
|
New York area
|
83.7
|
|
|
|
84.1
|
|
|
|
(0.5
|
)
|
|
|
76.0
|
|
|
|
76.4
|
|
|
|
(0.6
|
)
|
|
Philadelphia
|
78.4
|
|
|
|
82.4
|
|
|
|
(4.8
|
)
|
|
|
63.6
|
|
|
|
70.2
|
|
|
|
(9.4
|
)
|
|
Atlanta
|
77.5
|
|
|
|
79.4
|
|
|
|
(2.4
|
)
|
|
|
74.7
|
|
|
|
77.1
|
|
|
|
(3.1
|
)
|
|
Myrtle Beach
|
74.3
|
|
|
|
72.8
|
|
|
|
2.1
|
|
|
|
58.6
|
|
|
|
56.9
|
|
|
|
3.0
|
|
|
Dallas
|
66.4
|
|
|
|
64.4
|
|
|
|
3.2
|
|
|
|
67.4
|
|
|
|
67.0
|
|
|
|
0.6
|
|
|
San Diego
|
81.3
|
|
|
|
79.3
|
|
|
|
2.5
|
|
|
|
80.5
|
|
|
|
76.6
|
|
|
|
5.1
|
|
|
Orlando
|
82.3
|
|
|
|
86.8
|
|
|
|
(5.2
|
)
|
|
|
83.6
|
|
|
|
85.8
|
|
|
|
(2.6
|
)
|
|
Other markets
|
74.1
|
|
|
|
74.8
|
|
|
|
(0.9
|
)
|
|
|
70.5
|
|
|
|
71.2
|
|
|
|
(1.0
|
)
|
|
Core hotels (45)
|
77.5
|
|
|
|
78.4
|
|
|
|
(1.1
|
)
|
|
|
72.8
|
|
|
|
73.7
|
|
|
|
(1.3
|
)
|
|
Non-strategic hotels (24)
|
74.6
|
|
|
|
74.3
|
|
|
|
0.5
|
|
|
|
73.6
|
|
|
|
72.4
|
|
|
|
1.7
|
|
|
Same-store hotels (69)
|
76.6
|
|
|
|
77.1
|
|
|
|
(0.6
|
)
|
|
|
73.1
|
|
|
|
73.3
|
|
|
|
(0.3
|
)
|
|
|
ADR ($)
|
|
Three Months Ended
|
|
|
|
|
Six Months Ended
|
|
|
|
|
June 30,
|
|
|
|
|
June 30,
|
|
|
|
|
2012
|
|
|
2011
|
|
%Variance
|
|
2012
|
|
|
2011
|
|
%Variance
|
San Francisco area
|
166.10
|
|
|
|
141.75
|
|
|
|
17.2
|
|
|
|
161.38
|
|
|
|
139.24
|
|
|
|
15.9
|
|
|
Boston
|
229.46
|
|
|
|
204.13
|
|
|
|
12.4
|
|
|
|
199.83
|
|
|
|
178.61
|
|
|
|
11.9
|
|
|
Los Angeles area
|
154.44
|
|
|
|
146.31
|
|
|
|
5.6
|
|
|
|
147.89
|
|
|
|
145.77
|
|
|
|
1.5
|
|
|
South Florida
|
137.36
|
|
|
|
136.74
|
|
|
|
0.4
|
|
|
|
162.07
|
|
|
|
156.08
|
|
|
|
3.8
|
|
|
New York area
|
212.20
|
|
|
|
199.20
|
|
|
|
6.5
|
|
|
|
200.73
|
|
|
|
192.17
|
|
|
|
4.5
|
|
|
Philadelphia
|
166.75
|
|
|
|
140.67
|
|
|
|
18.5
|
|
|
|
148.90
|
|
|
|
133.90
|
|
|
|
11.2
|
|
|
Atlanta
|
107.12
|
|
|
|
103.22
|
|
|
|
3.8
|
|
|
|
108.91
|
|
|
|
104.98
|
|
|
|
3.7
|
|
|
Myrtle Beach
|
158.37
|
|
|
|
154.56
|
|
|
|
2.5
|
|
|
|
139.29
|
|
|
|
134.64
|
|
|
|
3.5
|
|
|
Dallas
|
105.02
|
|
|
|
106.50
|
|
|
|
(1.4
|
)
|
|
|
106.25
|
|
|
|
114.77
|
|
|
|
(7.4
|
)
|
|
San Diego
|
131.95
|
|
|
|
113.59
|
|
|
|
16.2
|
|
|
|
126.62
|
|
|
|
117.64
|
|
|
|
7.6
|
|
|
Orlando
|
130.57
|
|
|
|
129.35
|
|
|
|
0.9
|
|
|
|
137.24
|
|
|
|
138.24
|
|
|
|
(0.7
|
)
|
|
Other markets
|
148.89
|
|
|
|
141.09
|
|
|
|
5.5
|
|
|
|
147.77
|
|
|
|
141.23
|
|
|
|
4.6
|
|
|
Core hotels (45)
|
155.22
|
|
|
|
144.03
|
|
|
|
7.8
|
|
|
|
150.32
|
|
|
|
142.26
|
|
|
|
5.7
|
|
|
Non-strategic hotels (24)
|
119.32
|
|
|
|
115.22
|
|
|
|
3.6
|
|
|
|
120.47
|
|
|
|
115.55
|
|
|
|
4.2
|
|
|
Same-store hotels (69)
|
144.01
|
|
|
|
135.13
|
|
|
|
6.6
|
|
|
|
140.68
|
|
|
|
133.81
|
|
|
|
5.1
|
|
|
|
RevPAR ($)
|
|
Three Months Ended
|
|
|
|
|
Six Months Ended
|
|
|
|
|
June 30,
|
|
|
|
|
June 30,
|
|
|
|
|
2012
|
|
|
2011
|
|
%Variance
|
|
2012
|
|
|
2011
|
|
%Variance
|
San Francisco area
|
138.97
|
|
|
|
119.28
|
|
|
|
16.5
|
|
|
|
127.05
|
|
|
|
106.86
|
|
|
|
18.9
|
|
|
Boston
|
185.16
|
|
|
|
171.97
|
|
|
|
7.7
|
|
|
|
129.62
|
|
|
|
136.54
|
|
|
|
(5.1
|
)
|
|
Los Angeles area
|
126.21
|
|
|
|
120.38
|
|
|
|
4.8
|
|
|
|
120.31
|
|
|
|
112.63
|
|
|
|
6.8
|
|
|
South Florida
|
105.64
|
|
|
|
107.12
|
|
|
|
(1.4
|
)
|
|
|
132.04
|
|
|
|
127.65
|
|
|
|
3.4
|
|
|
New York area
|
177.59
|
|
|
|
167.52
|
|
|
|
6.0
|
|
|
|
152.50
|
|
|
|
146.87
|
|
|
|
3.8
|
|
|
Philadelphia
|
130.76
|
|
|
|
115.84
|
|
|
|
12.9
|
|
|
|
94.63
|
|
|
|
93.93
|
|
|
|
0.7
|
|
|
Atlanta
|
82.99
|
|
|
|
81.95
|
|
|
|
1.3
|
|
|
|
81.41
|
|
|
|
80.99
|
|
|
|
0.5
|
|
|
Myrtle Beach
|
117.65
|
|
|
|
112.44
|
|
|
|
4.6
|
|
|
|
81.60
|
|
|
|
76.58
|
|
|
|
6.6
|
|
|
Dallas
|
69.73
|
|
|
|
68.55
|
|
|
|
1.7
|
|
|
|
71.66
|
|
|
|
76.96
|
|
|
|
(6.9
|
)
|
|
San Diego
|
107.28
|
|
|
|
90.14
|
|
|
|
19.0
|
|
|
|
101.97
|
|
|
|
90.11
|
|
|
|
13.2
|
|
|
Orlando
|
107.52
|
|
|
|
112.31
|
|
|
|
(4.3
|
)
|
|
|
114.67
|
|
|
|
118.62
|
|
|
|
(3.3
|
)
|
|
Other markets
|
110.33
|
|
|
|
105.49
|
|
|
|
4.6
|
|
|
|
104.18
|
|
|
|
100.55
|
|
|
|
3.6
|
|
|
Core hotels (45)
|
120.25
|
|
|
|
112.86
|
|
|
|
6.5
|
|
|
|
109.43
|
|
|
|
104.91
|
|
|
|
4.3
|
|
|
Non-strategic hotels (24)
|
89.07
|
|
|
|
85.62
|
|
|
|
4.0
|
|
|
|
88.68
|
|
|
|
83.67
|
|
|
|
6.0
|
|
|
Same-store hotels (69)
|
110.26
|
|
|
|
104.13
|
|
|
|
5.9
|
|
|
|
102.78
|
|
|
|
98.11
|
|
|
|
4.8
|
|
|
Hotel Portfolio
The following table sets forth certain descriptive information regarding the hotels in which we held ownership interest at
June 30, 2012
.
|
|
|
|
|
|
|
|
|
|
|
|
Core Hotels
|
|
Brand
|
|
State
|
|
Rooms
|
|
% Owned
|
|
(a)
|
Birmingham
|
Embassy Suites Hotel
|
|
AL
|
|
242
|
|
|
|
Phoenix – Biltmore
|
Embassy Suites Hotel
|
|
AZ
|
|
232
|
|
|
|
Dana Point – Doheny Beach
|
Doubletree Guest Suites
|
|
CA
|
|
196
|
|
|
|
Indian Wells – Esmeralda Resort & Spa
|
Renaissance Resort
|
|
CA
|
|
560
|
|
|
|
Los Angeles – International Airport/South
|
Embassy Suites Hotel
|
|
CA
|
|
349
|
|
|
|
Napa Valley
|
Embassy Suites Hotel
|
|
CA
|
|
205
|
|
|
|
Oxnard – Mandalay Beach – Hotel & Resort
|
Embassy Suites Hotel
|
|
CA
|
|
249
|
|
|
|
San Diego – On the Bay
|
Holiday Inn
|
|
CA
|
|
600
|
|
|
|
San Francisco – Airport/Waterfront
|
Embassy Suites Hotel
|
|
CA
|
|
340
|
|
|
|
San Francisco – Airport/South San Francisco
|
Embassy Suites Hotel
|
|
CA
|
|
312
|
|
|
|
San Francisco – Fisherman’s Wharf
|
Holiday Inn
|
|
CA
|
|
585
|
|
|
|
San Francisco – Union Square
|
Marriott
|
|
CA
|
|
400
|
|
|
|
Santa Monica Beach – at the Pier
|
Holiday Inn
|
|
CA
|
|
132
|
|
|
|
Deerfield Beach – Resort & Spa
|
Embassy Suites Hotel
|
|
FL
|
|
244
|
|
|
|
Ft. Lauderdale – 17th Street
|
Embassy Suites Hotel
|
|
FL
|
|
361
|
|
|
|
Miami – International Airport
|
Embassy Suites Hotel
|
|
FL
|
|
318
|
|
|
|
Orlando – International Drive South/Convention
|
Embassy Suites Hotel
|
|
FL
|
|
244
|
|
|
|
Orlando – Walt Disney World Resort
|
Doubletree Guest Suites
|
|
FL
|
|
229
|
|
|
|
St. Petersburg – Vinoy Resort & Golf Club
|
Renaissance Resort
|
|
FL
|
|
361
|
|
|
|
Atlanta – Buckhead
|
Embassy Suites Hotel
|
|
GA
|
|
316
|
|
|
|
Atlanta – Gateway – Atlanta Airport
|
Sheraton
|
|
GA
|
|
395
|
|
|
|
Atlanta – Perimeter Center
|
Embassy Suites Hotel
|
|
GA
|
|
241
|
|
50
|
%
|
|
Chicago – Lombard/Oak Brook
|
Embassy Suites Hotel
|
|
IL
|
|
262
|
|
50
|
%
|
|
Boston – at Beacon Hill
|
Holiday Inn
|
|
MA
|
|
304
|
|
|
|
Boston – Copley Plaza
|
Fairmont
|
|
MA
|
|
383
|
|
|
|
Boston – Marlborough
|
Embassy Suites Hotel
|
|
MA
|
|
229
|
|
|
|
Baltimore – at BWI Airport
|
Embassy Suites Hotel
|
|
MD
|
|
251
|
|
90
|
%
|
|
Minneapolis – Airport
|
Embassy Suites Hotel
|
|
MN
|
|
310
|
|
|
|
Charlotte – SouthPark
|
Doubletree Guest Suites
|
|
NC
|
|
208
|
|
|
|
Parsippany
|
Embassy Suites Hotel
|
|
NJ
|
|
274
|
|
50
|
%
|
|
Secaucus – Meadowlands
|
Embassy Suites Hotel
|
|
NJ
|
|
261
|
|
50
|
%
|
|
New York – Morgans
|
Independent
|
|
NY
|
|
114
|
|
|
|
New York – Royalton
|
Independent
|
|
NY
|
|
168
|
|
|
|
Philadelphia – Historic District
|
Holiday Inn
|
|
PA
|
|
364
|
|
|
|
Philadelphia – Society Hill
|
Sheraton
|
|
PA
|
|
364
|
|
|
|
Pittsburgh – at University Center (Oakland)
|
Holiday Inn
|
|
PA
|
|
251
|
|
|
|
Charleston – The Mills House Hotel
|
Holiday Inn
|
|
SC
|
|
214
|
|
|
|
Myrtle Beach – Oceanfront Resort
|
Embassy Suites Hotel
|
|
SC
|
|
255
|
|
|
|
Myrtle Beach Resort
|
Hilton
|
|
SC
|
|
385
|
|
|
|
Nashville – Opryland – Airport (Briley
Parkway)
|
Holiday Inn
|
|
TN
|
|
383
|
|
|
|
Hotel Portfolio (continued)
|
|
|
|
|
|
|
|
|
|
|
|
Core Hotels
|
|
Brand
|
|
State
|
|
Rooms
|
|
% Owned
|
|
(a)
|
Austin
|
Doubletree Guest Suites
|
|
TX
|
|
188
|
|
90
|
%
|
|
Dallas – Love Field
|
Embassy Suites Hotel
|
|
TX
|
|
248
|
|
|
|
Dallas – Park Central
|
Westin
|
|
TX
|
|
536
|
|
60
|
%
|
|
Houston – Medical Center
|
Holiday Inn
|
|
TX
|
|
287
|
|
|
|
Burlington Hotel & Conference Center
|
Sheraton
|
|
VT
|
|
309
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-strategic Hotels
|
|
|
|
|
|
|
|
|
Phoenix – Crescent
|
Sheraton
|
|
AZ
|
|
342
|
|
|
|
Santa Barbara – Goleta
|
Holiday Inn
|
|
CA
|
|
160
|
|
|
|
Anaheim – North
|
Embassy Suites Hotel
|
|
CA
|
|
222
|
|
|
|
Milpitas – Silicon Valley
|
Embassy Suites Hotel
|
|
CA
|
|
266
|
|
|
|
San Rafael – Marin County
|
Embassy Suites Hotel
|
|
CA
|
|
235
|
|
50
|
%
|
|
Wilmington
|
Doubletree
|
|
DE
|
|
244
|
|
90
|
%
|
|
Jacksonville – Baymeadows
|
Embassy Suites Hotel
|
|
FL
|
|
277
|
|
|
|
Orlando – International Airport
|
Holiday Inn
|
|
FL
|
|
288
|
|
|
|
Atlanta – Airport
|
Embassy Suites Hotel
|
|
GA
|
|
232
|
|
|
|
Atlanta – Galleria
|
Sheraton Suites
|
|
GA
|
|
278
|
|
|
|
Kansas City – Overland Park
|
Embassy Suites Hotel
|
|
KS
|
|
199
|
|
50
|
%
|
|
Indianapolis – North
|
Embassy Suites Hotel
|
|
IN
|
|
221
|
|
82
|
%
|
|
Baton Rouge
|
Embassy Suites Hotel
|
|
LA
|
|
223
|
|
|
|
New Orleans – Convention Center
|
Embassy Suites Hotel
|
|
LA
|
|
370
|
|
|
|
New Orleans – French Quarter
|
Holiday Inn
|
|
LA
|
|
374
|
|
|
|
Bloomington
|
Embassy Suites Hotel
|
|
MN
|
|
218
|
|
|
|
Kansas City – Plaza
|
Embassy Suites Hotel
|
|
MO
|
|
266
|
|
50
|
%
|
|
Charlotte
|
Embassy Suites Hotel
|
|
NC
|
|
274
|
|
50
|
%
|
|
Raleigh – Crabtree
|
Embassy Suites Hotel
|
|
NC
|
|
225
|
|
50
|
%
|
|
Toronto – Airport
|
Holiday Inn
|
|
Ontario
|
|
446
|
|
|
|
Nashville – Airport – Opryland Area
|
Embassy Suites Hotel
|
|
TN
|
|
296
|
|
|
|
Austin – Central
|
Embassy Suites Hotel
|
|
TX
|
|
260
|
|
50
|
%
|
|
San Antonio – International Airport
|
Embassy Suites Hotel
|
|
TX
|
|
261
|
|
50
|
%
|
|
San Antonio – NW I-10
|
Embassy Suites Hotel
|
|
TX
|
|
216
|
|
50
|
%
|
|
|
|
|
|
|
|
|
|
|
Unconsolidated Hotel
|
|
|
|
|
|
|
|
|
New Orleans – French Quarter – Chateau
LeMoyne
|
Holiday Inn
|
|
LA
|
|
171
|
|
50
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Hotel under Development
|
|
|
|
|
|
|
|
|
New York – Midtown Manhattan –
Knickerbocker Hotel
|
Independent
|
|
NY
|
|
330
|
|
95
|
%
|
|
|
|
(a)
|
We own 100% of the real estate interests unless otherwise noted.
|
Liquidity and Capital Resources
Operating Activities
During the first six months of 2012, cash provided by operating activities (primarily hotel operations) was
$29.9 million
($25.4 million from continuing operations),
$15.4 million
more than the same period in 2011. This increase primarily reflects paying liquidated damages in 2011 in connection with our earlier sale of two hotels ($8.5 million) and an increase from improved operations ($4.5 million). At June 30, 2012, we had
$64.1 million
of cash and cash equivalents, including $38.8 million held by our third-party management companies.
The lodging recovery that began in 2010 is continuing, and our ADR improved 5.1% in the first six months of 2012, slightly offset by a 30 basis point decrease in occupancy (driven mostly by renovation-related disruption), resulting in a
4.8%
RevPAR increase. We expect our overall RevPAR for 2012 to increase by 5.5% to 7.0% compared to 2011, which we expect to predominately reflect increases in ADR. We expect to generate $76.0 million to $84.9 million of cash from operating activities in 2012.
Investing Activities
During the first six months of 2012, cash provided by investing activities was $26.3 million compared to $120.8 million used in investing activities during the same period in 2011. In 2012, we sold hotels for $100.4 million in net proceeds, which was partially offset by
$73.3 million
of capital expenditures (from renovations and redevelopments at 10 hotels). In 2011, we purchased two hotels for $138.0 million and spent $35.2 million in capital expenditures, both of which were partially offset by $52.1 million of proceeds from hotel sales. We expect to spend approximately $85 million for improvements and renovations in 2012, which will be funded from operating cash flow, cash on hand and borrowings under our line of credit. We also expect to spend approximately $35 million on value-enhancing redevelopment projects at three hotels: Morgans (guestroom additions, public areas, meeting space, fitness area, re-concept F&B); Embassy Suites-Myrtle Beach-Oceanfront Resort (public space, lobby, re-concept F&B); and The Fairmont Copley Plaza-Boston (guestrooms, corridors, public areas, meeting space, fitness area, re-concept F&B). In addition, we expect to spend approximately $59 million in 2012 for the redevelopment at the Knickerbocker, which will be funded primarily by cash and hotel development financing.
As part of our strategic plan, we intend to sell 39 non-strategic hotels that do not meet our investment criteria, thereby freeing our capital for redeployment (
e.g.
, reduce overall leverage, pay accrued preferred dividends and invest in our core properties that generate a higher return on invested capital). We have sold 15 hotels to date, including six in 2012. We have agreed to sell one additional hotel for $25.5 million and expect the transaction to close in late August. We continue to market nine hotels for sale (of which two are under contract), and we expect to sell most of these hotels during 2012. We have also identified 14 additional non-strategic hotels. We will continue to monitor the transaction environment and will bring these additional hotels to market at the appropriate time.
Financing Activities
During the first six months of 2012, cash from financing activities decreased by
$222.1 million
compared to the same period in 2011. In 2012, we paid $86.8 million of our mortgage debt (approximately $70 million of which was non-recurring related to hotel sales) and payment of $19.4 million in current preferred dividends, both partially offset by $20 million of net borrowings under our line of credit. In 2011, we had $525.0 million in proceeds from issuing our 6.75% senior notes and $158.5 million in proceeds from the sale of common stock, partially offset by $498.2 million of debt payments and $19.4 million of current preferred dividends. In 2012, we expect to pay approximately $22 million of normally occurring principal payments and $39 million of current quarterly preferred dividends, which will be funded from operating cash flow and cash on hand. Proceeds from additional
hotel sales will be used to make additional non-recurring principal payments and (as noted below) pay the remaining preferred dividend arrearage.
In 2011, we reinstated our current quarterly preferred dividends and paid current quarterly dividends since January 2011. We are restricted from paying any common dividends unless and until all accrued and current preferred dividends are paid. Our Board of Directors will determine whether and when to declare future dividends (including the accrued but unpaid preferred dividends) based upon various factors, including operating results, economic conditions, other operation trends, our financial condition (and related debt covenant compliance) and capital requirements, as well as minimum REIT distribution requirements. We had
$76.3 million
of aggregate accrued dividends payable to holders of our Series A and Series C preferred stock at June 30, 2012 (including $8.6 million pertaining to the current quarter). In July 2012, we paid $30.0 million of $67.7 million of accrued dividends in arrears. As noted above, we expect to pay the remaining accrued dividends during 2012 using proceeds from future asset sales.
Except in the case of our senior notes and line of credit, our mortgage debt is generally recourse solely to the specific hotels securing the debt, except in case of fraud, misapplication of funds and certain other customary limited recourse carve-out provisions, which could extend recourse to us. Much of our secured debt allows us to substitute collateral under certain conditions and is prepayable, subject (in some instances) to various prepayment, yield maintenance or defeasance obligations.
Most of our secured debt (other than our senior notes and line of credit) includes lock-box arrangements under certain circumstances. We are permitted to spend an amount required to cover our budgeted hotel operating expenses, taxes, debt service, insurance and capital expenditure reserves even if revenues are flowing through a lock-box in cases where a specified debt service coverage ratio is not met. With the exception of loans secured by two properties, all of our consolidated loans subject to lock-box provisions currently exceed the applicable minimum debt service coverage ratios.
Senior Notes.
Our senior notes require that we satisfy total leverage, secured leverage and interest coverage tests in order to: (i) incur additional indebtedness, except to refinance maturing debt with replacement debt, as defined under our indentures; (ii) pay dividends in excess of the minimum distributions required to qualify as a REIT; (iii) repurchase capital stock; or (iv) merge. We currently exceed all minimum thresholds, other than for certain restricted payments. These notes are guaranteed by us, and payment of our 10% notes is secured by a pledge of the limited partner interests in FelCor LP owned by FelCor. In addition, our senior notes are secured by first lien mortgages and related security interests and/or negative pledges on up to 17 hotels (11 for our 10% senior notes and six for our 6.75% senior notes), and pledges of equity interests in certain subsidiaries of FelCor LP.
Interest Rate Caps.
To fulfill a requirement under a certain loan, we entered into interest rate cap agreements with notional amounts of $202.6 million and $212 million at June 30, 2012 and December 31, 2011, respectively. These interest rate caps were not designated as hedges and had insignificant fair value at both June 30, 2012 and December 31, 2011, resulting in no significant net earnings impact.
Inflation
Operators of hotels, in general, possess the ability to adjust room rates daily to reflect the effects of inflation. Competition may, however, require us to reduce room rates in the near term and may limit our ability to raise room rates in the future. We are also subject to the risk that inflation will cause increases in hotel operating expenses disproportionately to revenues. If competition requires us to reduce room rates or limits our ability to raise room rates in the future, we may not be able to adjust our room rates to reflect the effects of inflation in full, in which case our operating results and liquidity could be adversely affected.
Seasonality
The lodging business is seasonal in nature. Generally, hotel revenues are greater in the second and third calendar quarters than in the first and fourth calendar quarters, although this may not be true for hotels in major tourist destinations. Revenues for hotels in tourist areas generally are substantially greater during tourist season than other times of the year. Seasonal variations in revenue at our hotels can be expected to cause quarterly fluctuations in our revenues. Quarterly earnings also may be adversely affected by events beyond our control, such as extreme weather conditions, economic factors and other considerations affecting travel. To the extent that cash flow from operations is insufficient during any quarter, due to temporary or seasonal fluctuations in revenues, we may utilize cash on hand or borrowings to satisfy our obligations.
Disclosure Regarding Forward-Looking Statements
This report and the documents incorporated by reference in this report include forward-looking statements that involve a number of risks and uncertainties. Forward-looking statements can be identified by the use of forward-looking terminology, such as “believes,” “expects,” “anticipates,” “may,” “will,” “should,” “seeks,” or other variations of these terms (including their use in the negative), or by discussions of strategies, plans or intentions. A number of factors could cause actual results to differ materially from those anticipated by these forward-looking statements. Certain of these risks and uncertainties are described in greater detail under “Risk Factors” in our Annual Report on Form 10-K or in our other filings with the Securities and Exchange Commission, or the SEC.
These forward-looking statements are necessarily dependent upon assumptions and estimates that may prove to be incorrect. Accordingly, while we believe that the plans, intentions and expectations reflected in these forward-looking statements are reasonable, we cannot assure you that deviations from these plans, intentions or expectations will not be material. The forward-looking statements included in this report, and all subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf, are expressly qualified in their entirety by the risk factors and cautionary statements discussed in our filings to the SEC. We undertake no obligation to publicly update any forward-looking statements to reflect future circumstances or changes in our expectations.
|
|
Item 3.
|
Quantitative and Qualitative Disclosures about Market Risk.
|
At
June 30, 2012
, approximately
77%
of our consolidated debt has fixed-rate interest.
The following table provides information about our financial instruments that are sensitive to changes in interest rates. For debt obligations, the table presents scheduled maturities and weighted average interest rates, by maturity dates. The fair value of our fixed-rate debt indicates the estimated principal amount of debt having the same debt service requirements that could have been borrowed at the date presented, at then current market interest rates.
Expected Maturity Date
at
June 30, 2012
(dollars in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expected Maturity Date
|
|
2012
|
|
2013
|
|
2014
|
|
2015
|
|
2016
|
|
Thereafter
|
|
Total
|
|
Fair Value
|
Liabilities
|
|
Fixed-rate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt
|
$
|
2,436
|
|
|
$
|
5,177
|
|
|
$
|
659,866
|
|
|
$
|
564
|
|
|
$
|
8,809
|
|
|
$
|
525,000
|
|
|
$
|
1,201,852
|
|
|
$
|
1,304,345
|
|
Average
interest rate
|
7.75
|
%
|
|
7.76
|
%
|
|
9.52
|
%
|
|
5.81
|
%
|
|
5.81
|
%
|
|
6.75
|
%
|
|
8.27
|
%
|
|
|
|
Floating-rate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt
|
74,155
|
|
|
80,221
|
|
|
20,867
|
|
|
184,683
|
|
|
—
|
|
|
—
|
|
|
359,926
|
|
|
$
|
376,591
|
|
Average
interest rate
(a)
|
2.06
|
%
|
|
2.79
|
%
|
|
5.29
|
%
|
|
8.10
|
%
|
|
—
|
|
|
—
|
|
|
5.51
|
%
|
|
|
|
Total debt
|
$
|
76,591
|
|
|
$
|
85,398
|
|
|
$
|
680,733
|
|
|
$
|
185,247
|
|
|
$
|
8,809
|
|
|
$
|
525,000
|
|
|
$
|
1,561,778
|
|
|
|
|
Average
interest rate
|
2.24
|
%
|
|
3.09
|
%
|
|
9.39
|
%
|
|
8.09
|
%
|
|
5.81
|
%
|
|
6.75
|
%
|
|
7.63
|
%
|
|
|
|
Net discount
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(27,026
|
)
|
|
|
|
Total debt
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
1,534,752
|
|
|
|
|
|
|
(a)
|
The average floating interest rate represents the implied forward rates in the yield curve at
June 30, 2012
.
|
|
|
Item 4.
|
Controls and Procedures.
|
(a)
Evaluation of disclosure controls and procedures.
Under the supervision and with the participation of our management, including our chief executive officer and chief financial officer, we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934) as of the end of the period covered by this report (the “Evaluation Date”). Based on this evaluation, our chief executive officer and chief financial officer concluded, as of the Evaluation Date, that our disclosure controls and procedures were effective, such that the information relating to us required to be disclosed in our reports is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosures.
(b)
Changes in internal control over financial reporting.
There have not been any changes in our internal control over financial reporting (as defined in Rule 13a-15 (f) promulgated under the Securities Exchange Act of 1934) during the quarter covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II
–
OTHER INFORMATION
|
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds.
|
In April 2012, FelCor issued 8,795 shares of common stock in exchange for like numbers of FelCor LP limited partnership units. Issuing these shares under these circumstances is a private transaction that is exempt from registration under Section 4(2) of the Securities Act of 1933.
The following exhibits are furnished in accordance with the provisions of Item 601 of Regulation S-K:
|
|
|
|
Exhibit Number
|
|
Description of Exhibit
|
|
|
|
31.1
|
|
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for FelCor.
|
|
|
|
31.2
|
|
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for FelCor.
|
|
|
|
31.3
|
|
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for FelCor LP.
|
|
|
|
31.4
|
|
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for FelCor LP.
|
|
|
|
32.1
|
|
Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for FelCor.
|
|
|
|
32.2
|
|
Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for FelCor LP.
|
|
|
|
101.INS
|
|
XBRL Instance Document.
Submitted electronically with this report.
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document.
Submitted electronically with this report.
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Calculation Linkbase Document.
Submitted electronically with this report.
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document.
Submitted electronically with this report.
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Label Linkbase Document.
Submitted electronically with this report.
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Presentation Linkbase Document.
Submitted electronically with this report.
|
Attached as Exhibit 101 to this report are the following documents formatted in XBRL (Extensible Business Reporting Language): (i) FelCor’s Consolidated Balance Sheets at June 30, 2012 and December 31, 2011; (ii) FelCor’s Consolidated Statements of Operations for the three and six months ended June 30, 2012 and 2011; (iii) FelCor’s Consolidated Statements of Comprehensive Income (Loss) for the three and six months ended June 30, 2012 and 2011; (iv) FelCor’s Consolidated Statements of Changes in Equity for the six months ended June 30, 2012 and 2011; (v) FelCor’s Consolidated Statements of Cash Flows for the six months ended June 30, 2012 and 2011; (vi) FelCor LP’s Consolidated Balance Sheets at June 30, 2012 and December 31, 2011; (vii) FelCor LP’s Consolidated Statements of Operations for the three and six months ended June 30, 2012 and 2011; (viii) FelCor LP’s Consolidated Statements of Comprehensive Income (Loss) for the three and six months ended June 30, 2012 and 2011; (ix) FelCor LP’s Consolidated Statements of Partners’ Capital for the six months ended June 30, 2012 and 2011; (x) FelCor LP’s Consolidated Statements of Cash Flows for the six months ended June 30, 2012 and 2011; and (xi) the Notes to Consolidated Financial Statements. Users of this data are advised pursuant to Rule 406T of Regulation S‑T that this interactive data file is deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, and otherwise is not subject to liability under these sections.
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 thereunto duly authorized.
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|
|
|
|
|
FELCOR LODGING TRUST INCORPORATED
|
|
|
|
|
|
|
|
|
|
|
|
|
Date: August 8, 2012
|
By:
|
/s/ Jeffrey D. Symes
|
|
|
Name:
|
Jeffrey D. Symes
|
|
|
Title:
|
Senior Vice President, Chief Accounting Officer
and Controller
|
|
|
|
|
|
|
FELCOR LODGING LIMITED PARTNERSHIP
|
|
a Delaware limited partnership
|
|
|
|
|
By:
|
FelCor Lodging Trust Incorporated
|
|
|
Its General Partner
|
|
|
|
|
|
|
Date: August 8, 2012
|
By:
|
/s/ Jeffrey D. Symes
|
|
|
Name:
|
Jeffrey D. Symes
|
|
|
Title:
|
Senior Vice President, Chief Accounting Officer
and Controller
|
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