FelCor Lodging Trust Incorporated (NYSE: FCH), today reported
operating results for the third quarter ended September 30,
2012.
Summary:
- Revenue per available room (“RevPAR”)
for 66 same-store hotels (45 core and 21 non-strategic) increased
6.2% for the quarter.
- Adjusted EBITDA was
$53.2 million.
- Adjusted funds from operations ("FFO")
per share was $0.08.
- Net loss was $19.6 million.
- Sold three non-strategic hotels (one in
August and two in October) for $95.5 million. Proceeds were
used to repay debt and the remaining $38 million of accrued
preferred dividends on October 31. Expect to sell one
additional non-strategic hotel for gross proceeds of
$8.7 million. To date, we have sold 19 of 39 hotels.
- Closed five non-crossed 10-year secured
loans bearing an average interest rate of 4.95%, raising
$160.8 million. Used a portion of the proceeds to repay a
$107 million mortgage loan (secured by seven properties) at
9.02%.
Third Quarter Operating Results:
RevPAR for 66 same-store hotels was $107.78, a 6.2% increase
compared to the same period in 2011. The increase reflects a 6.9%
increase in average daily rate (“ADR”) to $144.06 and a
50 basis point decrease in occupancy to 74.8%. RevPAR for our
core hotels increased 6.6%, while RevPAR at our non-strategic
hotels increased 4.7%. RevPAR at newly-acquired and redeveloped
hotels increased 12.0% during the quarter and 14.3% during the
month of September.
Commenting on third quarter results, Richard A. Smith, President
and Chief Executive Officer of FelCor, said, “I am pleased with our
results, as our RevPAR growth exceeded the industry average. Our
efforts to remix customer segments and increase ADR have been
successful, and ADR growth exceeded our expectations. While food
and beverage profit was significantly above prior year, it was
below our expectations and impacted our margins. Nonetheless, our
operating results met the low-end of our expectations. Overall,
lodging fundamentals remain strong. Transient demand continues to
be solid, and supply growth is at historically low levels. These
tailwinds will bolster U.S. RevPAR for the next few years.”
Added Mr. Smith, “We have made great progress in repositioning
the portfolio and restructuring the balance sheet. As of today, we
will have sold 10 non-strategic hotels this year, including four
since the second quarter. Our asset sale program is ahead of plan
and we are currently in discussions with buyers for an additional
six hotels. Our strategy will result in a high-growth,
diversified portfolio that will outperform the industry for the
foreseeable future. We have used the sale proceeds to pay all the
accrued preferred dividends and to support our overall balance
sheet restructuring plan to lower our leverage and cost of capital.
During the quarter, we repaid our lone 2013 debt maturity and
refinanced a 2014 debt maturity at a much higher loan-to-value,
while reducing the interest rate significantly.”
Hotel EBITDA was $59.2 million, which was 8.4% higher than
the same period in 2011. Hotel EBITDA and other same-store metrics
reflect 66 same-store hotels.
Same-store Adjusted EBITDA was $51.6 million, 9.9% higher
than the $46.9 million for the same period in 2011. Adjusted
EBITDA (which includes Adjusted EBITDA for sold hotels prior to
sale) was $53.2 million, 2.4% higher than the same period in
2011.
Adjusted FFO was $10.0 million, or $0.08 per share,
compared to $0.05 per share for the same period in 2011. Net loss
attributable to common stockholders was $28.7 million, or
$0.23 per share for the quarter, compared to a net loss of
$32.5 million, or $0.26 per share, for the same period in
2011.
EBITDA, Adjusted EBITDA, same-store Adjusted EBITDA, Hotel
EBITDA, Hotel EBITDA margin, FFO, Adjusted FFO and Adjusted FFO per
share are all non-GAAP financial measures. See our discussion of
“Non-GAAP Financial Measures” beginning on page 18 for a
reconciliation of each of these measures to the most comparable
GAAP financial measure and for information regarding the use,
limitations and importance of these non-GAAP financial
measures.
Year to Date Operating Results:
RevPAR for 66 same-store hotels was $104.31, a 5.1% increase
compared to the same period in 2011. The increase was driven by a
5.8% increase in ADR to $141.91. Displacement from renovations and
redevelopments adversely affected revenue by $10 million.
Hotel EBITDA was $174.8 million, 6.1% higher than the
$164.8 million for the same period in 2011.
Same-store Adjusted EBITDA was $147.0 million, 8.1% higher
than the $136.0 million for the same period in 2011. Adjusted
EBITDA (which includes Adjusted EBITDA for sold hotels prior to
sale) was $160.8 million, 0.2% higher than the same period in
2011.
Adjusted FFO was $30.3 million, or $0.24 per share, which
is $0.07 per share higher than the prior year. Net loss
attributable to common stockholders was $64.7 million, or
$0.52 per share for the nine months ended September 30, 2012,
compared to a net loss of $125.8 million, or $1.10 per share,
for the same period in 2011.
Portfolio Repositioning:
During the quarter, we sold the 222-room Embassy Suites -
Anaheim-North for $25.5 million.
On October 25, 2012, we completed the sale of the 370-room
Embassy Suites - New Orleans-Convention Center and the 296-room
Embassy Suites - Nashville-Airport for an aggregate purchase price
of $70 million. The hotels' operating performance is included
in discontinued operations during the third quarter and
year-to-date.
We have agreed to sell the Sheraton Crescent Hotel in Phoenix
for $8.7 million. The buyer made a hard-money deposit toward
the purchase price, and we expect the sale to close in the
immediate future.
Through today, we will have sold 19 of 39 non-strategic hotels
as part of our portfolio repositioning plan.
Twenty non-strategic hotels remain to be sold. Of those, 10
have been brought to market or are in the preliminary marketing
stage. We are currently in discussion with buyers to sell six of
these hotels. Ten remaining hotels will be brought to market in
2013. We will use the proceeds from dispositions to repay debt and
augment our balance sheet, which, when fully restructured, will
provide a flexible foundation for improved long-term FFO and
stockholder value.
Capital Expenditures:
We spent $26.9 million and $101.0 million on capital
improvements at our operating hotels during the three and nine
months ended September 30, 2012, respectively (including our
pro rata share of joint venture expenditures).
During 2012, we anticipate spending approximately
$85 million on improvements and renovations, a majority of
which is focused on 12 hotels, including six of our largest
properties. We will also spend $35 million this year on
value-enhancing redevelopment projects at three hotels: Morgans,
the Embassy Suites-Myrtle Beach-Oceanfront Resort and The Fairmont
Copley Plaza. Please see page 12 of this release for more detail on
renovations.
Our redevelopment of the 4+ star Knickerbocker Hotel, located in
midtown Manhattan, is progressing as planned. We have spent
$18 million in excess of the acquisition costs to date, and
this project remains on schedule and on budget, with opening
scheduled at the end of 2013.
Balance Sheet:
At September 30, 2012, we had $1.6 billion of
consolidated debt, with an average interest rate of 7.5%. Our debt
has a weighted average maturity of 4.8 years and none of our debt
matures before June 2014. We had $112.1 million of cash and
cash equivalents and $81.6 million in restricted cash as of
September 30, 2012.
During the quarter, we closed five single asset-mortgage loans
totaling $160.8 million. The 10-year loans mature in 2022,
bear an average fixed interest rate of 4.95% and are not
cross-collateralized. A portion of the proceeds from the new loans
were used to repay the 9.02% mortgage loan, which had an
outstanding balance of $107 million and would have otherwise
matured in 2014. The repaid loan was secured by a pool of seven
hotels, including four of the five hotels mortgaged to support the
new loans. The remaining three hotels that secured the repaid loan
(two of which are non-strategic) are now unencumbered.
We also repaid the remaining $60 million balance of a CMBS
loan using excess proceeds from the new loan and recent asset
sales. This repaid loan, which would have otherwise matured in
2013, was secured by five properties. Of these five properties, one
property now secures a new loan and the remaining four are now
unencumbered.
On October 31, we paid dividends of $2.39 per share on our
Series A Preferred Stock and $2.45 per depositary share
evidencing the Series C Preferred Stock. The dividend payment
to holders of the Series A Preferred Stock included the current
quarterly dividends of $0.4875 per share and accrued preferred
dividends of $1.9025 per share. The dividend payment to holders of
the Series C Preferred Stock included the current quarterly
dividends of $0.50 per depositary share and accrued preferred
dividends of $1.95 per depositary share. FelCor has now paid all of
the outstanding accrued preferred dividends.
Andrew J. Welch, FelCor's Executive Vice President and Chief
Financial Officer, said, “We continue to progress toward
completely restructuring our balance sheet, including reducing
leverage, reducing our average interest rate and extending and
staggering our debt maturity profile. We have lowered our
weighted-average cost of debt by 23 basis points in the last twelve
months and expect to ultimately reduce our cost of debt to roughly
6.0%, as we repay and refinance debt."
Outlook:
Our 2012 operating outlook reflects updated timing for asset
sales and third quarter results, which met the low-end of our
expectations. We are increasing the low-end of our Adjusted EBITDA
guidance and maintaining the low-end of our same-store Adjusted
EBITDA guidance for 57 hotels.
During 2012, we anticipate:
- Same-store RevPAR to increase between
5.5% and 6.0%;
- Adjusted EBITDA to be between
$200 million and $204 million;
- Adjusted FFO per share to be between
$0.21 and $0.25;
- Net loss attributable to FelCor to be
between $40 million and $36 million; and
- Interest expense, including pro rata
share of joint ventures, to be $129 million.
Our previous outlook assumed the sale of 12 hotels (three of
which have been sold and one will be sold in the immediate future).
For comparing to our previous outlook, we are providing the
following data that reconciles the current Adjusted EBITDA outlook
to 2012 Same-store Adjusted EBITDA (in millions). Same-store
Adjusted EBITDA reflects EBITDA for 57 hotels (i.e., giving pro
forma effect to selling the remaining hotels):
Low Mid High Current
Adjusted EBITDA Outlook $ 200 $ 202 $ 204 Discontinued
Operations(a) (29 ) (30 ) (31 )
Same-store Adjusted EBITDA (57
hotels) $ 171 $ 172 $ 173
(a) EBITDA from January 1, 2012 through the dates of sale
of nine hotels sold to date and one hotel expected to sell in the
immediate future, plus EBITDA for the full year for eight remaining
sale hotels.
About FelCor:
FelCor, a real estate investment trust, is the nation’s largest
owner of upper-upscale, all-suite hotels. FelCor owns interests in
67 properties located in major markets throughout 22 states.
FelCor’s diversified portfolio of hotels and resorts are flagged
under global brands such as: Doubletree ®, Embassy Suites Hotels®,
Hilton®, Fairmont®, Marriott®, Renaissance®, Sheraton®, Westin® and
Holiday Inn®. Additional information can be found on the Company’s
Web site at www.felcor.com.
We invite you to listen to our third quarter earnings Conference
Call on Thursday, November 1, 2012 at 10:00 a.m. (Central
Time). The conference call will be Webcast simultaneously on
FelCor’s Web site at www.felcor.com.
Interested investors and other parties who wish to access the call
can go to FelCor’s Web site and click on the conference call
microphone icon on either the “Investor Relations” or “News
Releases” page. The conference call replay also will be archived on
the Company’s Web site.
With the exception of historical information, the matters
discussed in this news release include “forward-looking statements”
within the meaning of the federal securities laws. These
forward-looking statements are identified by their use of terms and
phrases such as “anticipate,” “believe,” “could,” “estimate,”
“expect,” “intend,” “may,” “plan,” “predict,” “project,” “should,”
“will,” “continue” and other similar terms and phrases, including
references to assumptions and forecasts of future results.
Forward-looking statements are not guarantees of future
performance. Numerous risks and uncertainties, and the occurrence
of future events, may cause actual results to differ materially
from those anticipated at the time the forward-looking statements
are made. Current economic circumstances or an economic slowdown
and the impact on the lodging industry, operating risks associated
with the hotel business, relationships with our property managers,
risks associated with our level of indebtedness and our ability to
meet debt covenants in our debt agreements, our ability to complete
acquisitions, dispositions and debt refinancing, the availability
of capital, the impact on the travel industry from security
precautions, our ability to continue to qualify as a Real Estate
Investment Trust for federal income tax purposes and numerous other
factors may affect future results, performance and achievements.
Certain of these risks and uncertainties are described in greater
detail in our filings with the Securities and Exchange Commission.
Although we believe our current expectations to be based upon
reasonable assumptions, we can give no assurance that our
expectations will be attained or that actual results will not
differ materially. We undertake no obligation to update any
forward-looking statement to conform the statement to actual
results or changes in our expectations.
SUPPLEMENTAL INFORMATION
INTRODUCTION
The following information is presented in order to help our
investors understand FelCor’s financial position as of and for the
three and nine month period ended September 30, 2012.
TABLE OF CONTENTS
Page Consolidated Statements of
Operations(a) 8 Consolidated Balance Sheets(a) 9 Consolidated Debt
Summary 10 Schedule of Encumbered Hotels 11 Capital Expenditures 12
Hotels Under Renovation or Redevelopment During 2012 12
Supplemental Financial Data 13 Discontinued Operations 14 Hotel
Portfolio Composition 15 Detailed Operating Statistics by Brand 16
Comparable Hotels Operating Statistics for Our Top Markets 17
Historical Operating Statistics 18 Non-GAAP Financial Measures 18
(a) Our consolidated statements of operations and balance sheets
have been prepared without audit. Certain information and footnote
disclosures normally included in financial statements presented in
accordance with GAAP have been omitted. The consolidated statements
of operations and balance sheets should be read in conjunction with
the consolidated financial statements and notes thereto included in
our most recent Quarterly Report on Form 10-Q.
Consolidated Statements of
Operations
(in thousands, except per share data)
Three Months Ended Nine Months Ended
September 30, September 30, 2012
2011 2012 2011 Revenues: Hotel
operating revenue: Room $ 188,886 $ 177,858 $ 544,664 $ 507,375
Food and beverage 33,673 30,288 109,472 104,102 Other operating
departments 12,237 13,488 38,177 38,591 Other revenue 1,441
1,394 2,672 2,630 Total revenues 236,237
223,028 694,985 652,698 Expenses: Hotel
departmental expenses: Room 49,794 47,805 144,419 135,514 Food and
beverage 29,176 26,892 89,354 82,935 Other operating departments
5,593 5,979 16,976 17,555 Other property-related costs 63,940
61,944 188,428 179,399 Management and franchise fees 10,895 10,245
32,188 30,033 Taxes, insurance and lease expense 25,353 23,015
71,983 64,231 Corporate expenses 5,695 6,258 20,074 22,705
Depreciation and amortization 31,749 29,891 92,544 88,960
Impairment loss — — 1,335 7,003 Other expenses 2,163 1,208
3,926 3,455 Total operating expenses 224,358
213,237 661,227 631,790 Operating
income 11,879 9,791 33,758 20,908 Interest expense, net (31,359 )
(32,865 ) (93,547 ) (98,172 ) Debt extinguishment (11,661 ) (21 )
(11,808 ) (27,599 ) Gain on involuntary conversion, net —
109 — 292 Loss before equity in income (loss)
from unconsolidated entities (31,141 ) (22,986 ) (71,597 ) (104,571
) Equity in income (loss) from unconsolidated entities 1,536
249 2,674 (1,303 ) Loss from continuing operations
(29,605 ) (22,737 ) (68,923 ) (105,874 ) Income (loss) from
discontinued operations 10,050 (639 ) 32,535 8,375
Net loss (19,555 ) (23,376 ) (36,388 ) (97,499 ) Net loss
attributable to noncontrolling interests in other partnerships 386
378 440 269 Net loss attributable to redeemable noncontrolling
interests in FelCor LP 144 166 329 469
Net loss attributable to FelCor (19,025 ) (22,832 ) (35,619 )
(96,761 ) Preferred dividends (9,678 ) (9,678 ) (29,034 ) (29,034 )
Net loss attributable to FelCor common stockholders $ (28,703 ) $
(32,510 ) $ (64,653 ) $ (125,795 ) Basic and diluted per common
share data: Loss from continuing operations $ (0.31 ) $ (0.26 ) $
(0.78 ) $ (1.18 ) Net loss $ (0.23 ) $ (0.26 ) $ (0.52 ) $ (1.10 )
Basic and diluted weighted average common shares outstanding
123,640 123,062 123,648 113,908
Consolidated Balance Sheets
(in thousands)
September 30, December 31, 2012
2011 Assets Investment in hotels, net of accumulated
depreciation of $931,508 and $987,895 at September 30, 2012 and
December 31, 2011, respectively $ 1,813,845 $ 1,953,795 Hotel
development 138,749 120,163 Investment in unconsolidated entities
57,352 70,002 Hotels held for sale 40,822 — Cash and cash
equivalents 112,119 93,758 Restricted cash 81,642 84,240 Accounts
receivable, net of allowance for doubtful accounts of $419 and $333
at September 30, 2012 and December 31, 2011, respectively 34,722
27,135 Deferred expenses, net of accumulated amortization of
$14,262 and $13,119 at September 30, 2012 and December 31, 2011,
respectively 25,362 29,772 Other assets 27,040 24,363
Total assets $ 2,331,653 $ 2,403,228
Liabilities
and Equity Debt, net of discount of $24,406 and $32,069 at
September 30, 2012 and December 31, 2011, respectively $ 1,598,094
$ 1,596,466 Distributions payable 46,306 76,293 Accrued expenses
and other liabilities 159,817 140,548 Total
liabilities 1,804,217 1,813,307 Commitments and
contingencies Redeemable noncontrolling interests in FelCor LP, 625
and 636 units issued and outstanding at September 30, 2012 and
December 31, 2011 3,236 3,026 Equity: Preferred
stock, $0.01 par value, 20,000 shares authorized: Series A
Cumulative Convertible Preferred Stock, 12,880 shares, liquidation
value of $322,011, issued and outstanding at September 30, 2012 and
December 31, 2011 309,362 309,362 Series C Cumulative Redeemable
Preferred Stock, 68 shares, liquidation value of $169,950, issued
and outstanding at September 30, 2012 and December 31, 2011 169,412
169,412 Common stock, $0.01 par value, 200,000 shares authorized;
124,229 and 124,281 shares issued and outstanding at September 30,
2012 and December 31, 2011, respectively 1,242 1,243 Additional
paid-in capital 2,353,538 2,353,251 Accumulated other comprehensive
income 26,228 25,738 Accumulated deficit (2,362,324 ) (2,297,468 )
Total FelCor stockholders’ equity 497,458 561,538 Noncontrolling
interests in other partnerships 26,742 25,357 Total
equity 524,200 586,895 Total liabilities and equity $
2,331,653 $ 2,403,228
Consolidated Debt
Summary
(dollars in thousands)
Encumbered Hotels
Interest
Rate (%)
Maturity Date
September 30, 2012 December 31, 2011
Line of credit 10 L + 4.50 August 2014(a) $ 117,000 $
—
Hotel mortgage debt Mortgage debt 5 (b) 6.66 June - August
2014 65,935 67,375 Mortgage debt 7 L + 5.10 (c) April 2015 186,529
202,982 Mortgage debt 1 5.81 July 2016 10,521 10,876 Mortgage debt
4 (b) 4.95 October 2022 128,500 — Mortgage debt 1 4.94 October 2022
32,250 —
Senior notes Senior secured notes 6 6.75 June 2019
525,000 525,000 Senior secured notes(d) 11 10.00 October 2014
467,499 459,931
Other(e) — L + 1.50 December 2012
64,860 64,860
Retired debt — — — — 265,442
Total 45 $ 1,598,094 $ 1,596,466 (a)
Our $225 million line of credit can be extended for one year (to
2015), subject to satisfying certain conditions. (b) The hotels
securing this debt are subject to separate loan agreements and are
not cross-collateralized. (c)
LIBOR (for this loan) is subject to a 3%
floor. We purchased an interest rate cap ($202 million notional
amount) that caps LIBOR at 5.4% and expires May 2013.
(d)
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.
(e)
This loan is related to our Knickerbocker
redevelopment 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.
Schedule of Encumbered Hotels
(dollars in millions)
September 30, 2012 Consolidated Debt
Balance Encumbered Hotels Line of credit $ 117
Charlotte SouthPark - DT, Dana Point - DTGS, Houston Medical
Center - HI, Myrtle Beach - HLT, Mandalay Beach - ES, Nashville
Airport - ES, Philadelphia Independence Mall - HI, Pittsburgh
University Center - HI, Santa Barbara Goleta - HI and Santa Monica
at the Pier - HI Mortgage debt $ 187 Atlanta Buckhead - ES, Atlanta
Galleria - SS, Boston
Marlboro - ES, Burlington - SH, Orlando
South - ES, Philadelphia Society Hill - SH and South San Francisco
- ES
CMBS debt(a) $ 129 Birmingham - ES, Ft. Lauderdale - ES,
Minneapolis Airport - ES, and Napa Valley - ES CMBS debt(a) $ 66
Atlanta Airport - ES, Austin - DTGS, BWI Airport - ES, Orlando
Airport - HI and Phoenix Biltmore - ES CMBS debt $ 32 Deerfield
Beach - ES CMBS debt $ 11 Indianapolis North - ES Senior secured
notes $ 525 Boston Copley - FMT, Los Angeles International Airport
- ES, Indian Wells Esmeralda Resort & Spa - REN, St. Petersburg
Vinoy Resort & Golf Club - REN, Morgans and Royalton Senior
secured notes $ 467 Atlanta Airport - SH, Boston Beacon Hill - HI,
Myrtle Beach Resort - ES, Nashville Opryland -Airport - HI, New
Orleans French Quarter - HI, Orlando Walt Disney World® - DTGS, San
Diego on the Bay - HI, San Francisco Waterfront - ES, San Francisco
Fisherman’s Wharf - HI, San Francisco Union Square - MAR and
Toronto Airport - HI
(a) The hotels securing this debt are
subject to separate loan agreements and are not
cross-collateralized.
Capital Expenditures
(in thousands)
Three Months Ended Nine Months Ended
September 30, September 30, 2012
2011 2012 2011 Improvements and
additions to majority-owned hotels $ 26,636 $ 22,226 $ 99,985 $
57,470 Partners’ pro rata share of additions to consolidated joint
venture hotels (190 ) (286 ) (819 ) (726 ) Pro rata share of
additions to unconsolidated hotels 440 778 1,804
2,250 Total additions to hotels(a) $ 26,886 $
22,718 $ 100,970 $ 58,994
(a) Includes capitalized interest,
property taxes, ground leases and certain employee costs.
Hotels Under Renovation or
Redevelopment During 2012
Primary
Areas
Start
Date
End
Date
Renovations
Austin-DTGS guestrooms, corridors, public areas, entrance, F&B
upgrade Jun-2011 Feb-2012 Mandalay Beach-ES guestrooms, corridors,
lobby, exterior Oct-2011 May-2012 Philadelphia Society Hill-SH
guest rooms, corridors, public areas, meeting space, re-concept
F&B Nov-2011 Apr-2012 Napa Valley-ES guestrooms, corridors,
public areas Nov-2011 Apr-2012 (a) Charlotte SouthPark-DT
guestrooms, corridors, exterior, lobby, upgrade F&B Nov-2011
May-2012 Pittsburgh University Center-HI guestrooms, public areas,
meeting space Dec-2011 Mar-2012 Boston Beacon Hill-HI guestrooms,
lobby, F&B Dec-2011 Apr-2012 Renaissance Esmeralda Resort
guestrooms, corridors Jun-2012 Oct-2012 LAX South - ES guestrooms,
corridors Sep-2012 Mar-2013
Redevelopments
Myrtle Beach Oceanfront Resort-ES public space, lobby, re-concept
F&B Oct-2011 Apr-2012 Boston Copley Plaza-FMT guestrooms,
corridors, public areas, meeting space, fitness area, re-concept
F&B Nov-2011 July-2012 Morgans guestroom additions, public
areas, fitness area, re-concept F&B Feb-2012 Dec-2012
(a) The public area renovation will begin
in the fourth quarter 2012.
Supplemental Financial Data
(in thousands, except per share
information)
September 30, December 31,
Total Enterprise
Value
2012 2011 Common shares outstanding 124,229 124,281
Units outstanding 625 636 Combined shares and units
outstanding 124,854 124,917 Common stock price $ 4.74 $ 3.05
Market capitalization $ 591,808 $ 380,997 Series A
preferred stock(a) 309,362 309,362 Series C preferred stock(a)
169,412 169,412 Consolidated debt 1,598,094 1,596,466
Noncontrolling interests of consolidated debt (2,831 ) (2,894 ) Pro
rata share of unconsolidated debt 74,449 75,178 Hotel development
(138,749 ) (120,163 ) Cash and cash equivalents (112,119 ) (93,758
)
Total enterprise value (TEV) $ 2,489,426 $
2,314,600
(a) Book value based on issue price.
Discontinued Operations
(in thousands)
Discontinued operations include the
results of operations for two hotels designated as held for sale,
for seven hotels sold in 2012, and eight hotels sold in 2011.
Condensed financial information for the hotels included in
discontinued operations is as follows:
Three Months Ended Nine Months Ended
September 30, September 30, 2012
2011 2012 2011 Operating revenue
$ 7,558 $ 25,477 $ 49,506 $ 99,556 Operating expenses (7,065 )
(25,684 ) (a) (40,831 ) (97,265 ) (a) Operating income (loss) 493
(207 ) 8,675 2,291 Interest expense, net (239 ) (799 ) (1,991 )
(4,548 ) Debt extinguishment (126 ) (334 ) (790 ) 3,282 Loss on
involuntary conversion, net of tax — — — (12 ) Gain on sale, net of
tax 9,922 701 26,641 7,362
Income (loss) from discontinued operations 10,050 (639 )
32,535 8,375 Depreciation and amortization 946 4,313 4,933 16,099
Interest expense 239 800 1,991 4,551 Noncontrolling interest in
other partnerships — 13 — 13
EBITDA from discontinued operations 11,235 4,487 39,459
29,038 Impairment loss — 946 — 6,247 Hurricane loss 228 — 228 —
Debt extinguishment 126 334 790 (3,282 ) Loss on involuntary
conversion, net of tax — — — 12 Gain on sale, net of tax (9,922 )
(701 ) (26,641 ) (7,362 )
Adjusted EBITDA from
discontinued operations $ 1,667 $ 5,066 $ 13,836
$ 24,653
(a) Includes a $946,000 impairment charge
for the three months ended September 30, 2011 and a
$6.2 million impairment charge for the nine months ended
September 30, 2011.
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 30 $ 79,999
Holiday Inn 9 3,120 16 32,543 Doubletree and Hilton 5 1,206 6
15,352 Sheraton and Westin 4 1,604 8 15,203 Renaissance and
Marriott 3 1,321 7 11,357 Fairmont 1 383 3 5,700 Morgans and
Royalton 2 282 1 3,845
Core hotels
45 13,659 71 163,999 Non-strategic
hotels 21 5,505 29 46,989
Same-store
hotels 66 19,164 100
$ 210,988
Market
San Francisco area 4 1,637 9 $ 16,813 Boston 3 916 5 14,031 Los
Angeles area 3 677 4 13,731 South Florida 3 923 5 13,116 New York
area 4 817 4 9,703 Philadelphia 2 728 4 8,808 Atlanta 3 952 5 8,420
Myrtle Beach 2 640 3 7,862 Dallas 2 784 4 7,153 San Diego 1 600 3
6,144 Other markets 18 4,985 25 58,218
Core
hotels 45 13,659 71 163,999
Non-strategic hotels 21 5,505 29 46,989
Same-store hotels 66 19,164
100 $ 210,988
Location
Urban 16 4,931 26 $ 64,858 Airport 10 3,267 17 35,579 Resort 10
2,928 16 35,204 Suburban 9 2,533 12 28,358
Core hotels 45 13,659 71 163,999
Non-strategic hotels 21 5,505 29 46,989
Same-store hotels 66 19,164
100 $ 210,988
(a) Hotel EBITDA is more fully described
on page 26.
The following tables set forth occupancy, ADR and RevPAR for the
three and nine months ended September 30, 2012 and 2011, and
the percentage changes therein for the periods presented, for our
same-store Consolidated Hotels included in continuing
operations.
Detailed Operating Statistics by
Brand
Occupancy (%) Three Months Ended
Nine Months Ended September 30,
September 30, 2012 2011
%Variance 2012 2011 %Variance
Embassy Suites Hotels 76.7 80.1 (4.3 ) 76.4 77.9 (1.9 ) Holiday Inn
82.1 82.4 (0.3 ) 76.9 76.5 0.5 Doubletree and Hilton 78.1 76.2 2.5
71.9 70.9 1.4 Sheraton and Westin 69.0 67.1 2.8 65.8 67.8 (2.9 )
Renaissance and Marriott 68.3 63.0 8.4 71.3 68.9 3.4 Fairmont 81.7
83.1 (1.7 ) 62.0 73.5 (15.7 ) Morgans and Royalton 85.6 86.3 (0.8 )
83.2 86.1 (3.4 )
Core hotels (45) 76.7 77.4
(0.9 ) 74.1 75.0 (1.2 )
Non-strategic hotels (24) 70.1 70.1 (0.1 ) 72.0 71.4 0.8
Same-store hotels (66) 74.8 75.3 (0.7
) 73.5 74.0 (0.6 ) ADR
($) Three Months Ended Nine Months Ended
September 30, September 30, 2012
2011 %Variance 2012 2011
%Variance Embassy Suites Hotels 146.48 137.34 6.7 145.14
137.96 5.2 Holiday Inn 155.56 141.23 10.1 143.96 131.10 9.8
Doubletree and Hilton 142.08 132.03 7.6 139.02 132.94 4.6 Sheraton
and Westin 114.61 111.93 2.4 112.28 111.93 0.3 Renaissance and
Marriott 171.56 155.56 10.3 194.01 177.49 9.3 Fairmont 275.15
249.60 10.2 281.34 245.10 14.8 Morgans and Royalton 295.74 284.71
3.9 289.76 274.93 5.4
Core hotels (45) 154.26
143.37 7.6 151.69 142.65 6.3
Non-strategic hotels (24) 116.60 111.31 4.8 117.12 112.27 4.3
Same-store hotels (66) 144.06 134.74
6.9 141.91 134.17 5.8 RevPAR
($) Three Months Ended Nine Months Ended
September 30, September 30, 2012
2011 %Variance 2012 2011
%Variance Embassy Suites Hotels 112.30 110.00 2.1 110.84
107.41 3.2 Holiday Inn 127.79 116.39 9.8 110.66 100.30 10.3
Doubletree and Hilton 111.00 100.61 10.3 99.99 94.28 6.1 Sheraton
and Westin 79.09 75.15 5.2 73.91 75.89 (2.6 ) Renaissance and
Marriott 117.18 97.98 19.6 138.32 122.33 13.1 Fairmont 224.93
207.53 8.4 174.41 180.20 (3.2 ) Morgans and Royalton 253.11 245.67
3.0 241.05 236.74 1.8
Core hotels (45) 118.37
111.02 6.6 112.43 106.96 5.1
Non-strategic hotels (24) 81.73 78.06 4.7 84.30 80.19 5.1
Same-store hotels (66) 107.78 101.49
6.2 104.31 99.23 5.1
Comparable Hotels Operating Statistics
for Our Top Markets
Occupancy (%) Three Months Ended
Nine Months Ended September 30,
September 30, 2012 2011
%Variance 2012 2011 %Variance
San Francisco area 89.7 89.5 0.2 82.4 81.0 1.7 Boston 81.4
84.5 (3.7 ) 70.4 79.2 (11.1 ) Los Angeles area 80.2 86.4 (7.2 )
81.0 80.3 0.8 South Florida 72.7 74.2 (2.0 ) 78.5 79.2 (0.9 ) New
York area 78.5 83.7 (6.2 ) 76.8 78.9 (2.6 ) Philadelphia 72.8 75.6
(3.8 ) 66.6 72.0 (7.4 ) Atlanta 75.6 75.9 (0.5 ) 75.0 76.7 (2.2 )
Myrtle Beach 82.1 80.4 2.0 66.5 64.8 2.6 Dallas 60.7 61.2 (0.8 )
65.2 65.1 0.2 San Diego 88.3 87.9 0.5 83.2 80.4 3.4 Other markets
72.9 72.0 1.3 72.1 72.4 (0.4 )
Core hotels (45) 76.7
77.4 (0.9 ) 74.1 75.0
(1.2 ) Non-strategic hotels (21) 70.1 70.1 (0.1 )
72.0 71.4 0.8
Same-store hotels (66) 74.8
75.3 (0.7 )
73.5 74.0
(0.6 ) ADR ($) Three Months
Ended Nine Months Ended September 30,
September 30, 2012 2011
%Variance 2012 2011 %Variance San
Francisco area 190.07 165.02 15.2 171.84 148.81 15.5 Boston 217.57
197.56 10.1 206.71 185.42 11.5 Los Angeles area 173.31 162.41 6.7
156.34 151.80 3.0 South Florida 115.28 113.30 1.7 147.52 142.58 3.5
New York area 205.13 195.32 5.0 202.24 193.30 4.6 Philadelphia
145.95 131.40 11.1 147.82 133.01 11.1 Atlanta 107.82 104.65 3.0
108.54 104.87 3.5 Myrtle Beach 174.37 169.53 2.9 153.84 149.24 3.1
Dallas 105.38 99.74 5.6 105.98 110.01 (3.7 ) San Diego 138.88
127.11 9.3 130.99 121.13 8.1 Other markets 138.39 129.66 6.7 143.81
137.13 4.9
Core hotels (45) 154.26 143.37
7.6 151.69 142.65 6.3 Non-strategic
hotels (21) 116.60 111.31 4.8 117.12 112.27 4.3
Same-store
hotels (66) 144.06 134.74
6.9 141.91
134.17 5.8
RevPAR ($) Three Months Ended Nine Months
Ended September 30, September 30,
2012 2011 %Variance 2012 2011
%Variance San Francisco area 170.41 147.69 15.4 141.59
120.59 17.4 Boston 177.00 166.90 6.1 145.53 146.77 (0.8 ) Los
Angeles area 139.00 140.32 (0.9 ) 126.59 121.96 3.8 South Florida
83.83 84.05 (0.3 ) 115.85 112.96 2.6 New York area 160.99 163.48
(1.5 ) 155.35 152.47 1.9 Philadelphia 106.19 99.33 6.9 98.51 95.75
2.9 Atlanta 81.46 79.44 2.5 81.43 80.47 1.2 Myrtle Beach 143.13
136.38 4.9 102.26 96.73 5.7 Dallas 63.98 61.03 4.8 69.08 71.59 (3.5
) San Diego 122.69 111.78 9.8 108.93 97.41 11.8 Other markets
100.89 93.35 8.1 103.75 99.28 4.5
Core hotels (45)
118.37 111.02 6.6 112.43 106.96
5.1 Non-strategic hotels (21) 81.73 78.06 4.7 84.30 80.19
5.1
Same-store hotels (66) 107.78
101.49 6.2
104.31 99.23
5.1
Historical Operating Statistics
Occupancy (%)
Q4 2011 2011 Q1 2012
Q2 2012 Q3 2012 Core hotels (45) 67.2 73.0
68.1 77.5 76.7 Non-strategic hotels (21) 66.1 70.1 72.1 73.8 70.1
Same-store hotels (66) 66.9 72.1 69.3 76.4 74.8
ADR ($)
Q4 2011 2011 Q1 2012 Q2 2012 Q3
2012 Core hotels (45) 144.55 143.10 144.75 155.22 154.26
Non-strategic hotels (21) 111.10 111.99 118.32 116.44 116.60
Same-store hotels (66) 135.19 134.42 136.81 144.41 144.06
RevPAR ($)
Q4 2011 2011 Q1 2012 Q2 2012 Q3
2012 Core hotels (45) 97.11 104.43 98.62 120.25 118.37
Non-strategic hotels (21) 73.40 78.48 85.27 85.92 81.73 Same-store
hotels (66) 90.40 96.97 94.76 110.34 107.78
Non-GAAP Financial Measures
We refer in this release to certain “non-GAAP financial
measures.” These measures, including FFO, Adjusted FFO, EBITDA,
Adjusted EBITDA, same-store Adjusted EBITDA, Hotel EBITDA and Hotel
EBITDA margin, are measures of our financial performance that are
not calculated and presented in accordance with generally accepted
accounting principles (“GAAP”). The following tables reconcile each
of 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.
Reconciliation of Net Loss to FFO and
Adjusted FFO
(in thousands, except per share data)
Three Months Ended September 30, 2012
2011 Dollars Shares Per Share
Amount Dollars Shares Per Share
Amount Net loss $ (19,555 ) $ (23,376 ) Noncontrolling
interests 530 544 Preferred dividends (9,678 ) (9,678 ) Net loss
attributable to FelCor common stockholders (28,703 ) 123,640 $
(0.23 ) (32,510 ) 123,062 $ (0.26 ) Depreciation and amortization
31,749 — 0.26 29,891 — 0.24 Depreciation, discontinued operations
and unconsolidated entities 3,664 — 0.03 7,508 — 0.06 Impairment
loss, discontinued operations — — — 946 — 0.01 Gain on sale of
hotels (9,922 ) — (0.08 ) (701 ) — (0.01 ) Gain on involuntary
conversion — — — (109 ) — — Noncontrolling interests in FelCor LP
(144 ) 626 (0.01 ) (166 ) 638 — Conversion of unvested restricted
stock — — — — 709 —
FFO (3,356 ) 124,266 (0.03 ) 4,859 124,409 0.04 Acquisition
costs 16 — — 413 — 0.01 Hurricane loss 851 — 0.01 — — — Hurricane
loss, discontinued operations and unconsolidated entities 231 — — —
— — Debt extinguishment, including discontinued operations 11,786 —
0.09 355 — — Severance costs 71 — — — — — Abandoned projects 219 —
— — — — Pre-opening costs 202 — — — — — Conversion of unvested
restricted stock — 358 0.01 — —
—
Adjusted FFO $ 10,020 124,624 $ 0.08
$ 5,627 124,409 $ 0.05
Reconciliation of Net Loss to FFO and
Adjusted FFO
(in thousands, except per share data)
Nine Months Ended September 30, 2012
2011 Dollars Shares Per Share
Amount Dollars Shares Per Share
Amount Net loss $ (36,388 ) $ (97,499 ) Noncontrolling
interests 769 738 Preferred dividends (29,034 ) (29,034 ) Net loss
attributable to FelCor common stockholders (64,653 ) 123,648 $
(0.52 ) (125,795 ) 113,908 $ (1.10 ) Depreciation and amortization
92,544 — 0.75 88,960 — 0.78 Depreciation, discontinued operations
and unconsolidated entities 13,315 — 0.11 25,750 — 0.23 Gain on
involuntary conversion — — — (292 ) — — Loss on involuntary
conversion, discontinued operations — — — 12 — — Impairment loss
1,335 — 0.01 7,003 — 0.06 Impairment loss, discontinued operations
— — — 6,247 — 0.05 Gain on sale of hotels (26,641 ) — (0.22 )
(7,362 ) — (0.06 ) Noncontrolling interests in FelCor LP (329 ) 630
— (469 ) 453 (0.01 ) Conversion of unvested restricted stock —
280 — — — —
FFO
15,571 124,558 0.13 (5,946 ) 114,361 (0.05 ) Acquisition costs 114
— — 1,359 — 0.01 Hurricane loss 851 — 0.01 — — — Hurricane loss,
discontinued operations and unconsolidated entities 231 — — — — —
Debt extinguishment, including discontinued operations 12,598 —
0.10 24,316 — 0.21 Severance costs 451 — — — — — Abandoned projects
219 — — — — — Pre-opening costs 245 — — — — — Conversion of
unvested restricted stock — — — — 828
—
Adjusted FFO $ 30,280 124,558
$ 0.24 $ 19,729 115,189 $ 0.17
Reconciliation of Net Loss to EBITDA,
Adjusted EBITDA and Same-store Adjusted EBITDA
(in thousands)
Three Months Ended Nine Months Ended
September 30, September 30, 2012
2011 2012 2011 Net loss $
(19,555 ) $ (23,376 ) $ (36,388 ) $ (97,499 ) Depreciation and
amortization 31,749 29,891 92,544 88,960 Depreciation, discontinued
operations and unconsolidated entities 3,664 7,508 13,315 25,750
Interest expense 31,393 32,924 93,664 98,323 Interest expense,
discontinued operations and unconsolidated entities 934 2,009 4,060
8,016 Noncontrolling interests in other partnerships 386 378
440 269
EBITDA 48,571 49,334 167,635
123,819 Impairment loss — — 1,335 7,003 Impairment loss,
discontinued operations — 946 — 6,247 Hurricane loss 851 — 851 —
Hurricane loss, discontinued operations and unconsolidated entities
231 — 231 — Debt extinguishment, including discontinued operations
11,786 355 12,598 24,316 Acquisition costs 16 413 114 1,359 Gain on
sale of hotels (9,922 ) (701 ) (26,641 ) (7,362 ) Gain on
involuntary conversion — (109 ) — (292 ) Loss on involuntary
conversion, discontinued operations — — — 12 Amortization of stock
compensation 1,210 1,766 3,748 5,343 Severance costs 71 — 451 —
Abandoned projects 219 — 219 — Pre-opening costs 202 —
245 —
Adjusted EBITDA 53,235 52,004
160,786 160,445 Adjusted EBITDA from discontinued operations (1,667
) (5,066 ) (13,836 ) (24,653 ) Adjusted EBITDA from acquired
hotels(a) — — — 165
Same-store
Adjusted EBITDA $ 51,568 $ 46,938 $ 146,950
$ 135,957
(a) For same-store metrics, we have
included the two hotels acquired in May 2011 for all periods
presented.
Hotel EBITDA and Hotel EBITDA
Margin
(dollars in thousands)
Three Months Ended Nine Months Ended
September 30, September 30, 2012
2011 2012 2011 Same-store operating
revenue: Room $ 188,886 $ 177,858 544,664 516,384 Food and
beverage 33,673 30,288 109,472 105,999 Other operating departments
12,237 13,488 38,177 39,140
Same-store operating revenue 234,796 221,634 692,313 661,523
Same-store operating expense: Room 49,794 47,805 144,419
139,330 Food and beverage 29,176 26,892 89,354 85,343 Other
operating departments 5,593 5,979 16,976 17,719 Other property
related costs 63,940 61,944 188,428 182,859 Management and
franchise fees 10,895 10,245 32,188 30,376 Taxes, insurance and
lease expense 16,170 14,149 46,135 41,099
Same-store operating expense 175,568 167,014
517,500 496,726
Hotel EBITDA $ 59,228
$ 54,620 $ 174,813 $ 164,797
Hotel
EBITDA Margin 25.2 % 24.6 % 25.3 % 24.9 %
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 Nine Months Ended
September 30, September 30, 2012
2011 2012 2011 Same-store operating
revenue(a) $ 234,796 $ 221,634 $ 692,313 $ 661,523 Other revenue
1,441 1,394 2,672 2,630 Revenue from acquired hotels — —
— (11,455 )
Total revenue 236,237 223,028
694,985 652,698 Same-store operating expense(a) 175,568 167,014
517,500 496,726 Consolidated hotel lease expense(b) 10,910 10,582
31,339 29,383 Unconsolidated taxes, insurance and lease expense
(1,727 ) (1,716 ) (5,491 ) (5,152 ) Corporate expenses 5,695 6,258
20,074 22,705 Depreciation and amortization 31,749 29,891 92,544
88,960 Impairment loss — — 1,335 7,003 Hurricane loss 851 — 851 —
Expenses from acquired hotels(a) — — — (11,290 ) Other expenses
1,312 1,208 3,075 3,455
Total
operating expenses 224,358 213,237 661,227
631,790
Operating income $ 11,879 $ 9,791
$ 33,758 $ 20,908 (a) For same-store
metrics, we have included the two hotels acquired in May 2011 for
all periods presented as if they were acquired at the beginning of
the period. (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.
Reconciliation of Forecasted Net Loss
to Forecasted Adjusted FFO and
Adjusted EBITDA
(in millions, except per share and unit
data)
Full Year 2012 Guidance Low Guidance
High Guidance Dollars Per Share
Amount(a) Dollars Per Share
Amount(a) Net loss attributable to
FelCor(b) $ (40 ) $ (36 ) Preferred dividends (39 ) (39
)
Net loss attributable to FelCor common stockholders (79 )
$ (0.64 ) (75 ) $ (0.60 ) Gain on sale of hotels (50 ) (50 )
Depreciation(c) 141 141 Impairment 1 1
FFO 13
$ 0.10 17 $ 0.13 Debt extinguishment 13 13 Hurricane loss 1
1
Adjusted FFO $ 27 $ 0.21 $ 31
$ 0.25
Net loss attributable to
FelCor(b) $ (40 ) $ (36 ) Depreciation(c) 141 141
Interest expense(c) 129 129 Amortization expense 5 5
EBITDA 235 239 Gain on sale of hotels (50 ) (50 ) Impairment
1 1 Debt extinguishment 13 13 Hurricane loss 1 1
Adjusted EBITDA $ 200 $ 204 (a)
Weighted average shares and units are 124.6 million. (b) For
guidance, we have assumed no gains or losses on future asset sales.
(c) Includes pro rata portion of 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 brand/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 that we use 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 all revenues
and expenses from continuing operations not directly associated
with hotel operations, including corporate-level expenses,
depreciation and amortization, and expenses related to our capital
structure. 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 eliminate depreciation and amortization because, even though
depreciation and amortization are property-level expenses, we do
not believe that these non-cash expenses, which are based on
historical cost accounting for real estate assets, and implicitly
assume that the value of real estate assets diminishes predictably
over time, accurately reflect an adjustment in the value of our
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 Consolidated 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.
Felcor Lodging (NYSE:FCH)
Gráfico Histórico do Ativo
De Jun 2024 até Jul 2024
Felcor Lodging (NYSE:FCH)
Gráfico Histórico do Ativo
De Jul 2023 até Jul 2024