FelCor Lodging Trust Incorporated (NYSE: FCH), today reported
operating results for the fourth quarter and year ended
December 31, 2012.
Summary:
- Revenue per available room (“RevPAR”)
for 65 same-store hotels (45 core and 20 non-strategic) increased
4.8% for the quarter.
- Hotel EBITDA increased 10% and Hotel
EBITDA margins increased 87 basis points for the quarter.
- Adjusted EBITDA was $42.0 million
and adjusted funds from operations (“FFO”) per share was a loss of
$0.01 for the quarter, both of which exceeded guidance.
- Sold 10 hotels during 2012 for gross
proceeds of $207.2 million and, as of January, launched the
marketing process for all remaining non-strategic hotels for sale
(excluding nine joint venture hotels).
- Sold, in December, $525 million of
5.625% senior notes due in March 2023 and used the proceeds to
repay high-cost, short-term debt.
- Converting and repositioning eight core
Holiday Inns to Wyndham-branded and managed hotels effective
March 1, 2013.
- Net loss was $93.0 million for the
quarter.
Fourth Quarter Operating Results:
RevPAR for 65 same-store hotels was $95.57, a 4.8% increase
compared to the same period in 2011. The increase reflects a 5.2%
increase in average daily rate (“ADR”) to $142.76 and a
30 basis point decrease in occupancy to 66.9%. RevPAR for 45
core hotels increased 5.2%, while RevPAR at 20 non-strategic hotels
increased 3.7%. RevPAR at the six newly-acquired and redeveloped
hotels increased 8.6% during the quarter and 11.3% during
December.
Commenting on operating results, Richard A. Smith, President and
Chief Executive Officer of FelCor, said, “I am very pleased with
our performance, as revenue, margins, FFO and EBITDA exceeded our
expectations. Lodging fundamentals remain favorable, despite slow
economic growth. The favorable imbalance between demand and supply
growth provides us the ability to increase average rates, creating
strong EBITDA growth. With supply growth lower in our markets than
the US on average, our portfolio is well-positioned to continue
outperforming our peers. RevPAR growth at the newly-acquired,
redeveloped and renovated hotels continues to significantly exceed
the industry average, and we expect that to continue throughout
2013.”
Added Mr. Smith, “Over the past year, we have delivered on our
strategic commitments to drive operational improvement, sell
non-strategic assets and strengthen our balance sheet. Our asset
sale program is progressing as expected, and in 2013 we expect to
sell a majority of the hotels currently marketed for sale. As we
sell hotels and repay debt, we will further improve our earnings
and stockholder value.”
Hotel EBITDA was $50.5 million, 9.5% higher than the
$46.1 million in 2011. Hotel EBITDA and other same-store
metrics reflect 65 same-store hotels.
Same-store Adjusted EBITDA was $41.2 million, 10.5% higher
than the $37.2 million for the same period in 2011. Adjusted
EBITDA (which includes Adjusted EBITDA for sold hotels prior to
sale) was $42.0 million, relatively even with the same period
in 2011.
Adjusted FFO was a loss of $1.5 million, or $0.01 per
share, compared to a loss of $0.03 per share for the same period in
2011. Net loss attributable to common stockholders was
$102.1 million (including $62.5 million of debt
extinguishment charges and $31.2 million in conversion
expenses, partially offset by $27.8 million in net gains from
asset sales), or $0.83 per share for the quarter, compared to a net
loss of $42.8 million, or $0.35 per share, for the same period
in 2011.
Full Year Operating Results:
RevPAR for 65 same-store hotels was $102.80, 5.1% higher than
for 2011, driven by a 5.7% increase in ADR to $142.46. RevPAR for
our 45 core hotels increased 5.6%, while RevPAR for our 20
non-strategic hotels increased 3.4%.
Hotel EBITDA was $225.5 million, 6.9% higher than the
$211.0 million for the same period in 2011.
Same-store Adjusted EBITDA was $188.3 million, 8.7% higher
than the $173.3 million for the same period in 2011. Adjusted
EBITDA (which includes Adjusted EBITDA for sold hotels prior to
sale) was $202.8 million, relatively even with the same period
in 2011.
Adjusted FFO was $28.8 million, or $0.23 per share, which
is $0.09 per share, or 64%, higher than 2011. Net loss attributable
to common stockholders was $166.7 million (including
$75.1 million of net debt extinguishment charges and
$31.2 million in conversion expenses, partially offset by
$54.5 million in net gains from asset sales), or
$1.35 per share for the year ended December 31, 2012,
compared to a net loss of $168.6 million (including
$24.4 million of net debt extinguishment charges), or $1.44
per share, for 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 19 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.
Portfolio Repositioning:
During the quarter, we sold the Embassy Suites in Nashville (296
rooms) and Embassy Suites in New Orleans (370 rooms) for aggregate
gross proceeds of $70.0 million and the Sheraton Crescent in
Phoenix (342 rooms) for gross proceeds of $8.7 million.
During 2012, we sold 10 hotels for aggregate gross proceeds of
$207.2 million. We have sold 19 of 39 non-strategic hotels to
date as part of our portfolio repositioning plan, with 20
non-strategic hotels remaining to be sold. As of January 2013, we
are marketing 11 of the remaining 20 hotels. The other nine
non-strategic hotels are held in joint ventures, and we are working
with our partners to determine when to begin marketing those
properties. We will use the proceeds from dispositions to repay our
remaining higher-cost debt and reduce leverage.
In January 2013, we agreed to re-brand, renovate and reposition
eight core Holiday Inn hotels located in strategic markets from
Holiday Inn to Wyndham hotels. Effective March 1, 2013, our Holiday
Inn hotels in Boston, Houston, New Orleans, Philadelphia,
Pittsburgh, San Diego and Santa Monica will be rebranded as Wyndham
Hotels & Resorts properties, and The Mills House in Charleston
will become a Wyndham Grand hotel. Wyndham Worldwide Corporation is
providing a $100 million guaranty over the initial 10-year
term of the agreement, with an annual guaranty of up to
$21.5 million, that ensures a minimum annual NOI for the eight
hotels. In addition, the management fee structure is more
consistent with prevailing industry practices, and we expect to
save approximately $50 million in management fees over the
initial term. The guaranty protects approximately 20% of our core
hotel-level EBITDA from future lodging cycle fluctuations, in
addition to ensuring a return on investment that is superior to the
hotels’ historical performance.
Capital Expenditures:
Including our pro rata share of joint ventures, capital
expenditures at our operating hotels were $21.9 million during
the three months ended December 31, 2012 and
$122.9 million (including approximately $39.9 million for
redevelopment projects) during the year ended December 31,
2012.
During 2012, we completed renovations at seven hotels and
started renovations (which will be completed in 2013) at four
additional hotels. We also completed redevelopment work at two
hotels (the Fairmont Copley Plaza and the Embassy Suites-Myrtle
Beach-Oceanfront Resort) and started redevelopment at Morgans.
During 2013, we anticipate spending approximately
$65 million on improvements and renovations, concentrated
mostly at seven hotels, as part of our 20-year capital plan. In
addition, in connection with converting eight hotels to Wyndham
(four of which will be renovated and repositioned during 2013) and
completing redevelopment projects, we will spend approximately
$40 million. Please see page 12 of this release for more
detail on renovations.
Through December 31, 2012, we have spent $27 million
on the redevelopment of the 4+ star Knickerbocker Hotel, located in
midtown Manhattan. The project remains on budget and is scheduled
to open in early 2014.
Balance Sheet:
At December 31, 2012, we had $1.6 billion of
consolidated debt, bearing a weighted-average interest rate of 6.4%
(approximately 120 basis points below last year). Our debt has a
weighted average maturity of eight years, and none of our debt
matures before June 2014. We had $123.7 million of cash, cash
equivalents and restricted cash at December 31, 2012.
In December, we amended and restated our $225 million
secured line of credit facility. Pricing and other terms of the
amended facility were improved significantly relative to the
existing facility. The facility now matures in June 2017, assuming
exercise of a one-year extension that is subject to certain
conditions. Borrowings under the facility bear interest at LIBOR
(no floor) plus 3.375%. The facility is secured by mortgages on
eight hotels and related security interests and allows for partial
release and substitution of properties, subject to certain
conditions.
In December, we sold $525 million aggregate principal
amount of our 5.625% senior secured notes due 2023. We used the
proceeds to redeem $258 million in aggregate face amount of
our 10% senior secured notes due 2014 and repay a $187 million
8.1% mortgage loan otherwise due in 2015. The remaining proceeds
were used to repay a portion of the balance on our outstanding line
of credit and to pay prepayment costs and other expenses.
In November, we obtained an $85 million construction loan
secured by the Knickerbocker Hotel. The construction loan will
mature in 2017, assuming exercise of a one-year extension option.
The remaining redevelopment costs are expected to be funded with
five-year financing that is currently being raised through the EB-5
visa program.
Andrew J. Welch, FelCor’s Executive Vice President and Chief
Financial Officer, said, “We have taken prudent steps to create a
strong and flexible balance sheet with historically low and mostly
fixed cost of debt. By selling hotels and taking advantage of
favorable capital markets, we repaid higher-cost debt, extended our
average debt maturity to eight years, lowered our average cost of
borrowing by 120 basis points and increased FFO per share. We will
continue to strengthen our balance sheet and further reduce our
cost of borrowing as we use proceeds from asset sales to repay
higher-cost debt.”
Outlook:
Our 2013 outlook reflects continued strength in lodging
fundamentals, including continued demand growth and historically
low supply growth in our markets. During 2013, our portfolio will
experience disruption from renovations and redevelopment at 12
hotels and from transitioning the eight hotels to Wyndham. We
expect that this will adversely impact 2013 RevPAR by roughly 1.5%,
but will be more than recaptured in 2014. Therefore, we expect our
RevPAR to grow 5-6% in 2013, primarily from ADR growth, with
stronger flow-through to same-store Adjusted EBITDA compared to
2012.
Our outlook also reflects selling 11 hotels during 2013. The
low-end of our outlook assumes all sales occur in April, and the
high-end of our outlook assumes all the sales occur at the
beginning of the fourth quarter.
During 2013, we anticipate:
- Same-store RevPAR to increase between
5-6%;
- Adjusted EBITDA to be between
$186 million and $205 million;
- Adjusted FFO per share to be between
$0.31 and $0.43;
- Net loss attributable to FelCor to be
between $70 million and $63 million; and
- Interest expense, including pro rata
share of joint ventures, to be between $102 million and
$106 million.
The following table reconciles our 2012 Same-store Adjusted
EBITDA to our 2013 Adjusted EBITDA and Same-store EBITDA outlook
(in millions):
Low
Mid High
2012 Same-store Adjusted EBITDA (65 hotels)
$
188.3
$
188.3
$
188.3
2013 Growth 15.2 17.7 20.2
2013 Adjusted EBITDA Outlook (65 hotels) $
203.5 $ 206.0 $ 208.5
EBITDA lost from Asset Sales (11 hotels)(a) (17.5 )
(10.5 ) (3.5 )
2013 Adjusted EBITDA Outlook (54
hotels) $ 186.0 $ 195.5 $
205.0 Discontinued Operations(b) (8.5 ) (15.5
) (22.5 )
Same-store Adjusted EBITDA (54 hotels)
$ 177.5 $ 180.0 $
182.5 (a) EBITDA of 11 hotels assumed to be
sold during 2013 that would have been recognized from the dates of
sale through December 31, 2013. (b) EBITDA of 11 hotels assumed to
be sold during 2013 that is forecasted to be generated from January
1, 2013 through the dates of sale.
About FelCor:
FelCor, a real estate investment trust, owns a diversified
portfolio of primarily upper-upscale, full-service hotels that are
located in major and resort markets. FelCor partners with
leading hotel companies to operate its 66 hotels, which are flagged
under globally recognized names such as Fairmont®, Hilton®,
Doubletree®, Embassy Suites®, Renaissance®, Marriott®, Sheraton®,
Westin® and Holiday Inn®, and premier independent hotels in New
York. Additional information can be found on the Company’s
website at www.felcor.com.
We invite you to listen to our fourth quarter earnings
Conference Call on Tuesday, February 19, 2013 at
10:00 a.m. (Central Time). The conference call will be webcast
simultaneously on FelCor’s website at www.felcor.com. Interested investors and other
parties who wish to access the call can go to FelCor’s website 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 website.
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 months and year ended December 31, 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 2013 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 19 (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
Annual Report on Form 10-K.
Consolidated Statements of
Operations
(in thousands, except per share data)
Three Months Ended
Year Ended December 31, December 31,
2012 2011
2012 2011
Revenues: Hotel operating revenue: Room $ 168,020 $ 160,245 $
707,908 $ 662,557 Food and beverage 41,908 38,033 148,736 139,151
Other operating departments 11,733 12,131 49,696 50,494 Other
revenue 513 319 3,185
2,949 Total revenues 222,174
210,728 909,525 855,151
Expenses: Hotel departmental expenses: Room 47,379 45,023 190,293
178,963 Food and beverage 32,511 30,496 119,560 110,923 Other
operating departments 5,517 5,839 22,434 23,325 Other
property-related costs 61,407 59,751 246,518 235,643 Management and
franchise fees 9,773 9,485 41,815 39,359 Taxes, insurance and lease
expense 22,816 21,250 94,294 84,954 Corporate expenses 6,054 6,375
26,128 29,080 Depreciation and amortization 31,944 29,983 123,879
118,232 Impairment loss — — — 4,315 Conversion expenses 31,197 —
31,197 — Other expenses 929 562
4,855 4,017 Total operating expenses
249,527 208,764 900,973
828,811 Operating income (loss) (27,353 ) 1,964 8,552 26,340
Interest expense, net (31,799 ) (32,251 ) (125,346 ) (130,423 )
Debt extinguishment (62,519 ) (64 ) (74,327 ) (27,663 ) Gain on
involuntary conversion, net — —
— 292 Loss before equity in income (loss) from
unconsolidated entities (121,671 ) (30,351 ) (191,121 ) (131,454 )
Equity in income (loss) from unconsolidated entities 105
(765 ) 2,779 (2,068 ) Loss from
continuing operations (121,566 ) (31,116 ) (188,342 ) (133,522 )
Income (loss) from discontinued operations 28,540
(2,280 ) 58,928 2,627 Net loss
(93,026 ) (33,396 ) (129,414 ) (130,895 ) Net loss attributable to
noncontrolling interests in other partnerships 125 83 565 352 Net
loss attributable to redeemable noncontrolling interests in FelCor
LP 513 220 842 689
Net loss attributable to FelCor (92,388 ) (33,093 ) (128,007
) (129,854 ) Preferred dividends (9,679 ) (9,679 )
(38,713 ) (38,713 ) Net loss attributable to FelCor
common stockholders $ (102,067 ) $ (42,772 ) $ (166,720 ) $
(168,567 ) Basic and diluted per common share data: Loss from
continuing operations $ (1.06 ) $ (0.33 ) $ (1.82 ) $ (1.46 ) Net
loss $ (0.83 ) $ (0.35 ) $ (1.35 ) $ (1.44 ) Basic and diluted
weighted average common shares outstanding 123,635
123,906 123,634 117,068
Consolidated Balance Sheets
(in thousands)
December 31, December
31, 2012 2011
Assets Investment in hotels, net of accumulated depreciation
of $929,298 and $987,895 at December 31, 2012 and 2011,
respectively $ 1,794,564 $ 1,953,795 Hotel development 146,079
120,163 Investment in unconsolidated entities 55,082 70,002 Cash
and cash equivalents 45,745 93,758 Restricted cash 77,927 84,240
Accounts receivable, net of allowance for doubtful accounts of $469
and $333 at December 31, 2012 and 2011, respectively 25,383 27,135
Deferred expenses, net of accumulated amortization of $13,820 and
$13,119 at December 31, 2012 and 2011, respectively 34,262 29,772
Other assets 23,391 24,363 Total assets
$ 2,202,433 $ 2,403,228
Liabilities and Equity
Debt, net of discount of $10,318 and $32,069 at December 31, 2012
and 2011, respectively $ 1,630,525 $ 1,596,466 Distributions
payable 8,545 76,293 Accrued expenses and other liabilities
138,442 140,548 Total liabilities
1,777,512 1,813,307 Commitments and
contingencies Redeemable noncontrolling interests in FelCor LP, 621
and 636 units issued and outstanding at December 31, 2012 and 2011,
respectively 2,902 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 December
31, 2012 and 2011 309,362 309,362 Series C Cumulative Redeemable
Preferred Stock, 68 shares, liquidation value of $169,950, issued
and outstanding at December 31, 2012 and 2011 169,412 169,412
Common stock, $0.01 par value, 200,000 shares authorized; 124,117
and 124,281 shares issued and outstanding at December 31, 2012 and
2011, respectively 1,241 1,243 Additional paid-in capital 2,353,581
2,353,251 Accumulated other comprehensive income 26,039 25,738
Accumulated deficit (2,464,968 ) (2,297,468 ) Total
FelCor stockholders’ equity 394,667 561,538 Noncontrolling
interests in other partnerships 27,352 25,357
Total equity 422,019 586,895
Total liabilities and equity $ 2,202,433 $ 2,403,228
Consolidated Debt Summary
(dollars in thousands)
EncumberedHotels
InterestRate (%)
Maturity Date
December 31, 2012 December 31,
2011 Line of credit 8 L + 3.375 June 2016(a) $
56,000 $ —
Hotel mortgage debt Mortgage debt(b) 5 6.66 June
- August 2014 65,431 67,375 Mortgage debt 1 5.81 July 2016 10,405
10,876 Mortgage debt(b) 4 4.95 October 2022 128,066 — Mortgage debt
1 4.94 October 2022 32,176 —
Senior notes Senior secured
notes(c) 11 10.00 October 2014 223,586 459,931 Senior secured notes
6 6.75 June 2019 525,000 525,000 Senior secured notes 10 5.625
March 2023 525,000 —
Other(d) — L + 1.25 May 2016
64,861 —
Retired debt — — — — 533,284
Total 46 $ 1,630,525 $ 1,596,466
(a)
Our $225 million line of credit can be
extended for one year (to 2017), subject to satisfying certain
conditions.
(b)
This debt is comprised of separate
non-cross-collateralized loans each secured by a mortgage of a
different hotel.
(c)
We originally issued $636 million (face
amount) of these notes. After redemptions in 2011 and 2012, $234
million (face amount) of these notes were outstanding at December
31, 2012.
(d)
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. This loan can be extended for one year
subject to satisfying certain conditions.
Schedule of Encumbered Hotels
(dollars in millions)
Consolidated December 31, 2012
Debt Balance Encumbered Hotels Line of credit
$ 56 Charlotte SouthPark - DT, Dana Point - DTGS,
Houston Medical Center - HI, Mandalay Beach - ES, Miami
International Airport - ES, Philadelphia Independence Mall - HI,
Pittsburgh University Center - HI and Santa Monica at the Pier - HI
CMBS debt(a) $ 65 Atlanta Airport - ES, Austin - DTGS, BWI Airport
- ES, Orlando Airport - HI and Phoenix Biltmore - ES CMBS debt $ 10
Indianapolis North - ES CMBS debt(a) $ 128 Birmingham - ES, Ft.
Lauderdale - ES, Minneapolis Airport - ES and Napa Valley - ES CMBS
debt $ 32 Deerfield Beach - ES Senior secured notes (10.00%) $ 224
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
Senior secured notes (6.75%) $ 525
Boston Copley - FMT, Indian Wells
Esmeralda Resort & Spa - REN, Los Angeles International Airport
- ES, New York - Morgans, New York - Royalton and St. Petersburg
Vinoy Resort & Golf Club REN
Senior secured notes (5.625%) $ 525 Atlanta Buckhead - ES, Baton
Rouge - ES, Boston Marlboro - ES, Burlington - SH, Dallas Love
Field - ES, Milpitas - ES, Myrtle Beach Resort - HIL, Orlando South
- ES, Philadelphia Society Hill - SH, and SF South San Francisco -
ES
(a)
This debt is comprised of separate non
cross-collateralized loans each secured by a mortgage of a
different hotel.
Capital Expenditures
(in thousands)
Three Months Ended
Year Ended December 31, December 31,
2012 2011
2012 2011
Improvements and additions to majority-owned hotels $ 21,490 $
31,572 $ 121,475 $ 89,042 Partners’ pro rata share of additions to
consolidated joint venture hotels (104 ) (156 ) (923 ) (883 ) Pro
rata share of additions to unconsolidated hotels 500
801 2,304 3,051 Total
additions to hotels(a) $ 21,886 $ 32,217 $ 122,856
$ 91,210 (a) Includes capitalized interest,
property taxes, property insurance, ground leases and certain
employee costs.
Hotels Under Renovation or
Redevelopment During 2013
Renovations
Primary
Areas
Start
Date
End
Date
Myrtle Beach Resort-HIL guestrooms Oct-2012 Mar-2013 Napa
Valley-ES(a) public areas Nov-2012 Mar-2013 Mandalay Beach-ES(b)
public areas, meeting rooms, F&B Jan-2013 May-2013 San
Francisco Waterfront-ES public areas Feb-2013 May-2013 Santa Monica
Beach - at the Pier-HI(c) guestrooms, corridors, public areas
May-2013
Aug-2013
Ft. Lauderdale-ES public areas Aug-2013 Oct-2013 Orlando - Walt
Disney World Resort-DT(d) guestrooms, corridors May-2013 Nov-2013
LAX South - ES(e) public areas, corridors Sep-2013 Dec-2013 Houston
Medical Center-HI(c) guestrooms, corridors, public areas Jul-2013
Dec-2013 Philadelphia - Historic District-HI(c) guestrooms,
corridors, public areas Aug-2013 Jan-2014 Charleston Mills
House-HI(c) guestrooms, corridors, public areas Aug-2013 Jan-2014
Redevelopments
New York-Morgans guestroom additions, public areas, fitness area,
re-concept F&B Feb-2012 Mar-2013 (a) Guestroom
renovations were completed in April 2012. (b) Guestroom renovations
were completed in May 2012. (c) Effective March 1, 2013, this hotel
will be operated by Wyndham Hotel Group under the Wyndham or
Wyndham Grand brand. (d) Public area renovations were completed in
June 2012. (e) Guest room renovations were completed in February
2013.
Supplemental Financial Data
(in thousands, except per share
information)
December 31, December
31, Total Enterprise Value 2012
2011 Common shares outstanding 124,117 124,281
Units outstanding 621 636 Combined
shares and units outstanding 124,738 124,917 Common stock price $
4.67 $ 3.05
Market capitalization $ 582,526 $
380,997 Series A preferred stock(a) 309,362 309,362 Series C
preferred stock(a) 169,412 169,412 Consolidated debt(b) 1,630,525
1,596,466 Noncontrolling interests of consolidated debt (2,810 )
(2,894 ) Pro rata share of unconsolidated debt 74,198 75,178 Hotel
development (146,079 ) (120,163 ) Cash, cash equivalents and
restricted cash(b) (123,672 ) (177,998 )
Total
enterprise value (TEV) $ 2,493,462 $ 2,230,360
(a) Book value based on issue price. (b)
Restricted cash includes $64.9 million of
cash fully securing $64.9 million of debt that was assumed when we
purchased the Knickerbocker.
Discontinued Operations(in
thousands)
Discontinued operations include the results of operations for
ten 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 Year
Ended December 31, December 31,
2012 2011
2012 2011
Operating revenue $ 3,096 $ 25,156 $ 60,238 $ 132,988 Operating
expenses (a) (2,328 ) (24,041 ) (52,942 )
(133,051 ) Operating income (loss) 768 1,115 7,296 (63 )
Interest expense, net (46 ) (747 ) (2,037 ) (5,294 ) Debt
extinguishment — — (790 ) 3,282 Loss on involuntary conversion, net
— — — (12 ) Gain (loss) on sale, net 27,818
(2,648 ) 54,459 4,714
Income (loss)
from discontinued operations 28,540 (2,280 ) 58,928 2,627
Depreciation and amortization 63 3,850 5,607 20,660 Interest
expense 46 750 2,037 5,301 Noncontrolling interest in other
partnerships — — —
13
EBITDA from discontinued operations 28,649 2,320
66,572 28,601 Impairment loss — — 1,335 8,935 Hurricane loss 22 —
250 — Debt extinguishment — — 790 (3,282 ) Loss on involuntary
conversion, net — — — 12 Loss (gain) on sale, net (27,818 )
2,648 (54,459 ) (4,714 )
Adjusted
EBITDA from discontinued operations $ 853 $ 4,968
$ 14,488 $ 29,552 (a) Includes impairment
charges of $1.3 million and $8.9 million for the years ended
December 31, 2012 and December 31, 2011, respectively.
Hotel Portfolio Composition
The following table illustrates the distribution of same-store
hotels.
Brand Hotels Rooms
2012 Hotel
OperatingRevenue(in thousands)
2012 HotelEBITDA(in
thousands)(a)
Embassy Suites Hotels 20 5,433 $ 256,200 $ 78,389
Holiday Inn 10 3,494 160,866 42,178 Renaissance and Marriott 3
1,321 111,976 17,912 Doubletree and Hilton 5 1,206 56,071 16,706
Sheraton and Westin 4 1,604 68,369 14,540 Fairmont 1 383 41,255
4,286 Morgans and Royalton 2 282 32,129
3,458
Core hotels 45 13,723 726,866
177,469 Non-strategic hotels 20 5,099
179,474 48,044
Same-store hotels 65
18,822 $ 906,340 $
225,513 Market San Francisco area 4 1,637 $
99,659 $ 21,036 Los Angeles area 3 677 33,287 13,760 South Florida
3 923 47,298 13,257 Boston 3 916 68,121 12,126 New York area 4 817
57,052 9,733 Myrtle Beach 2 640 36,973 9,429 Atlanta 3 952 35,410
9,230 Philadelphia 2 728 36,122 8,882 Tampa 1 361 45,152 7,957 San
Diego 1 600 26,445 6,688 Other markets 19 5,472
241,347 65,371
Core hotels 45
13,723 726,866 177,469 Non-strategic hotels 20
5,099 179,474 48,044
Same-store
hotels 65 18,822 $
906,340 $ 225,513 Location Urban
17 5,305 $ 316,354 $ 74,446 Resort 10 2,928 183,807 41,475 Airport
9 2,957 126,906 33,742 Suburban 9 2,533 99,799
27,806
Core hotels 45 13,723
726,866 177,469 Non-strategic hotels 20 5,099
179,474 48,044
Same-store hotels
65 18,822 $ 906,340
$ 225,513 (a) Hotel EBITDA is more fully
described on page 26.
The following tables set forth occupancy, ADR and RevPAR for the
three months and year ended December 31, 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
Year Ended
December 31, December 31, 2012
2011 %Variance 2012 2011
%Variance Embassy Suites Hotels 69.3 70.0 (0.9 ) 74.6 75.7
(1.5 ) Holiday Inn 69.4 70.1 (1.0 ) 75.2 74.7 0.7 Renaissance and
Marriott 63.8 63.6 0.3 69.0 67.3 2.5 Doubletree and Hilton 55.1
59.0 (6.6 ) 67.7 67.9 (0.3 ) Sheraton and Westin 61.0 59.5 2.5 64.6
65.7 (1.7 ) Fairmont 68.1 60.5 12.6 63.5 70.2 (9.6 ) Morgans and
Royalton 85.1 87.1 (2.3 ) 83.7 86.4 (3.1 )
Core hotels (45)
66.8 67.2 (0.6 ) 72.3
72.8 (0.7 ) Non-strategic hotels (20) 67.3
67.2 0.2 71.7 71.7 —
Same-store hotels (65) 66.9
67.2 (0.4 ) 72.2 72.5
(0.5 ) ADR ($) Three Months
Ended Year Ended December 31, December 31,
2012 2011 %Variance 2012 2011
%Variance Embassy Suites Hotels 142.05 136.53 4.0 144.62
137.78 5.0 Holiday Inn 140.11 130.99 7.0 142.58 129.91 9.7
Renaissance and Marriott 188.45 175.94 7.1 192.43 177.04 8.7
Doubletree and Hilton 133.89 120.42 11.2 137.97 130.20 6.0 Sheraton
and Westin 112.43 111.41 0.9 112.31 111.81 0.5 Fairmont 283.77
262.93 7.9 282.00 248.97 13.3 Morgans and Royalton 361.66 346.36
4.4 308.14 293.10 5.1
Core hotels (45) 152.54
144.19 5.8 151.79 142.63 6.4
Non-strategic hotels (20) 116.10 112.18 3.5 117.19 113.36 3.4
Same-store hotels (65) 142.76 135.65
5.2 142.46 134.79 5.7 RevPAR
($) Three Months Ended Year Ended December
31, December 31, 2012 2011
%Variance 2012 2011 %Variance Embassy
Suites Hotels 98.51 95.52 3.1 107.88 104.32 3.4 Holiday Inn 97.23
91.82 5.9 107.20 97.00 10.5 Renaissance and Marriott 120.23 111.90
7.4 132.76 119.12 11.4 Doubletree and Hilton 73.76 71.02 3.9 93.40
88.42 5.6 Sheraton and Westin 68.54 66.29 3.4 72.56 73.47 (1.2 )
Fairmont 193.12 158.98 21.5 179.11 174.85 2.4 Morgans and Royalton
307.83 301.85 2.0 257.83 253.15 1.9
Core hotels (45)
101.92 96.91 5.2 109.76 103.90
5.6 Non-strategic hotels (20) 78.13 75.35 3.7 84.08 81.31
3.4
Same-store hotels (65) 95.57 91.15
4.8 102.80 97.78 5.1
Comparable Hotels Operating Statistics
for Our Top Markets
Occupancy (%) Three Months Ended
Year Ended
December 31, December 31, 2012
2011 %Variance 2012 2011
%Variance San Francisco area 75.2 76.8 (2.0 ) 80.5 79.9 0.7
Los Angeles area 59.5 68.2 (12.6 ) 75.6 77.3 (2.2 ) South Florida
74.1 74.4 (0.4 ) 77.4 78.0 (0.8 ) Boston 69.4 70.9 (2.1 ) 70.2 77.1
(9.0 ) New York area 81.9 80.7 1.5 78.1 79.3 (1.6 ) Myrtle Beach
39.5 44.7 (11.7 ) 59.7 59.7 (0.1 ) Atlanta 70.0 63.1 11.0 73.8 73.3
0.7 Philadelphia 61.0 61.6 (1.0 ) 65.2 69.4 (6.0 ) Tampa 75.1 73.6
2.0 81.0 78.4 3.4 San Diego 69.0 72.9 (5.4 ) 79.6 78.5 1.4 Other
markets 63.7 63.3 0.7 68.9 68.6 0.5
Core hotels (45)
66.8 67.2 (0.6 ) 72.3
72.8 (0.7 ) Non-strategic hotels (20) 67.3
67.2 0.2 71.7 71.7 —
Same-store hotels (65)
66.9 67.2 (0.4
) 72.2 72.5
(0.5 ) ADR ($) Three Months
Ended Year Ended December 31, December 31,
2012 2011 %Variance 2012 2011
%Variance San Francisco area 181.08 164.26 10.2 174.13
152.75 14.0 Los Angeles area 154.80 141.31 9.5 156.04 149.47 4.4
South Florida 139.84 137.20 1.9 145.67 141.29 3.1 Boston 210.73
192.84 9.3 207.71 187.14 11.0 New York area 230.92 222.03 4.0
209.80 200.66 4.6 Myrtle Beach 102.31 103.53 (1.2 ) 145.27 140.62
3.3 Atlanta 108.49 104.68 3.6 108.53 104.83 3.5 Philadelphia 147.71
145.45 1.6 147.79 135.80 8.8 Tampa 165.07 158.17 4.4 174.57 164.50
6.1 San Diego 121.57 115.01 5.7 128.94 119.70 7.7 Other markets
134.09 127.16 5.5 135.57 129.39 4.8
Core hotels (45)
152.54 144.19 5.8 151.79 142.63
6.4 Non-strategic hotels (20) 116.10 112.18 3.5 117.19
113.36 3.4
Same-store hotels (65)
142.76 135.65 5.2
142.46 134.79
5.7 RevPAR ($) Three
Months Ended Year Ended December 31, December
31, 2012 2011 %Variance 2012
2011 %Variance San Francisco area 136.18 126.11 8.0
140.15 122.05 14.8 Los Angeles area 92.17 96.31 (4.3 ) 117.94
115.49 2.1 South Florida 103.59 102.03 1.5 112.77 110.20 2.3 Boston
146.31 136.76 7.0 145.72 144.25 1.0 New York area 189.07 179.16 5.5
163.83 159.20 2.9 Myrtle Beach 40.37 46.27 (12.8 ) 86.70 84.01 3.2
Atlanta 75.99 66.03 15.1 80.06 76.83 4.2 Philadelphia 90.08 89.63
0.5 96.39 94.21 2.3 Tampa 123.89 116.40 6.4 141.44 128.91 9.7 San
Diego 83.87 83.89 — 102.63 94.00 9.2 Other markets 85.48 80.46 6.2
93.41 88.73 5.3
Core hotels (45) 101.92 96.91
5.2 109.76 103.90 5.6 Non-strategic
hotels (20) 78.13 75.35 3.7 84.08 81.31 3.4
Same-store hotels
(65) 95.57 91.15
4.8 102.80
97.78 5.1
Historical Operating Statistics
Occupancy (%) Q1 2012
Q2 2012 Q3 2012
Q4 2012 Core hotels (45) 68.4 77.7 76.5 66.8 Non-strategic
hotels (20) 71.6 75.1 73.0 67.3 Same-store hotels (65) 69.3 77.0
75.5 66.9
ADR ($) Q1 2012 Q2
2012 Q3 2012 Q4 2012 Core hotels (45) 145.45
155.03 153.45 152.54 Non-strategic hotels (20) 115.80 117.02 119.71
116.10 Same-store hotels (65) 137.10 144.93 144.57 142.76
RevPAR ($) Q1 2012 Q2 2012 Q3
2012 Q4 2012 Core hotels (45) 99.47 120.49 117.40 101.92
Non-strategic hotels (20) 82.97 87.89 87.37 78.13 Same-store hotels
(65) 94.97 111.61 109.22 95.57
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 December 31,
2012 2011 Dollars
Shares Per Share Amount Dollars
Shares Per Share Amount
Net loss $ (93,026 ) $ (33,396 ) Noncontrolling interests
638 303 Preferred dividends (9,679 ) (9,679 ) Net
loss attributable to FelCor common stockholders (102,067 ) 123,635
$ (0.83 ) (42,772 ) 123,906 $ (0.35 ) Depreciation and amortization
31,944 — 0.26 29,983 — 0.24 Depreciation, discontinued operations
and unconsolidated entities 2,794 — 0.02 6,675 — 0.05 Loss (gain)
on sale of hotels (27,818 ) — (0.23 ) 2,648 — 0.02 Noncontrolling
interests in FelCor LP (513 ) 622 0.01
(220 ) 636 0.01
FFO (95,660 ) 124,257 (0.77 )
(3,686 ) 124,542 (0.03 ) Acquisition costs 19 — — 121 — — Hurricane
loss 170 — — — — — Hurricane loss, discontinued operations and
unconsolidated entities 22 — — — — — Debt extinguishment, including
discontinued operations 62,519 — 0.51 64 — — Severance costs 102 —
— — — — Conversion expenses 31,197 — 0.25 — — — Pre-opening costs
154 — — — — —
Adjusted FFO $ (1,477 ) 124,257 $ (0.01 ) $ (3,501 )
124,542 $ (0.03 )
Reconciliation of Net Loss to
FFO and Adjusted FFO
(in thousands, except per share data)
Year Ended December 31, 2012
2011 Dollars
Shares Per Share Amount Dollars
Shares Per Share Amount
Net loss $ (129,414 ) $ (130,895 ) Noncontrolling interests
1,407 1,041 Preferred dividends (38,713 ) (38,713 )
Net loss attributable to FelCor common stockholders (166,720 )
123,634 $ (1.35 ) (168,567 ) 117,068 $ (1.44 ) Depreciation and
amortization 123,879 — 1.00 118,232 — 1.01 Depreciation,
discontinued operations and unconsolidated entities 16,721 — 0.14
33,136 — 0.28 Gain on involuntary conversion — — — (292 ) — — Loss
on involuntary conversion, discontinued operations — — — 12 — —
Impairment loss — — — 4,315 — 0.04 Impairment loss, discontinued
operations 1,335 — 0.01 8,935 — 0.08 Gain on sale of hotels, net
(54,459 ) — (0.44 ) (4,714 ) — (0.04 ) Noncontrolling interests in
FelCor LP (842 ) 628 — (689 ) 499
(0.01 )
FFO (80,086 ) 124,262 (0.64 ) (9,632 )
117,567 (0.08 ) Acquisition costs 132 — — 1,479 — 0.01 Hurricane
loss 1,021 — 0.01 — — — Hurricane loss, discontinued operations and
unconsolidated entities 253 — — — — — Debt extinguishment,
including discontinued operations 75,117 — 0.60 24,381 — 0.21
Severance costs 553 — — — — — Abandoned projects 219 — — — — —
Conversion expenses 31,197 — 0.25 — — — Pre-opening costs 398 — — —
— — Unvested restricted stock — 11 0.01
— 175 —
Adjusted FFO $ 28,804
124,273 $ 0.23 $ 16,228 117,742 $ 0.14
Reconciliation of Net Loss to EBITDA, Adjusted
EBITDA and Same-store Adjusted EBITDA
(in thousands)
Three Months Ended
Year Ended December 31, December 31,
2012 2011
2012 2011 Net
loss $ (93,026 ) $ (33,396 ) $ (129,414 ) $ (130,895 )
Depreciation and amortization 31,944 29,983 123,879 118,232
Depreciation, discontinued operations and unconsolidated entities
2,794 6,675 16,721 33,136 Interest expense 31,820 32,335 125,484
130,658 Interest expense, discontinued operations and
unconsolidated entities 732 1,875 4,792 9,892 Noncontrolling
interests in other partnerships 125 83
565 352
EBITDA (25,611 ) 37,555
142,027 161,375 Impairment loss — — — 4,315 Impairment loss,
discontinued operations — — 1,335 8,935 Hurricane loss 170 — 1,021
— Hurricane loss, discontinued operations and unconsolidated
entities 22 — 253 — Debt extinguishment, including discontinued
operations 62,519 64 75,117 24,381 Acquisition costs 19 121 132
1,479 Loss (gain) on sale of hotels, net (27,818 ) 2,648 (54,459 )
(4,714 ) Gain on involuntary conversion — — — (292 ) Loss on
involuntary conversion, discontinued operations — — — 12
Amortization of stock compensation 1,254 1,828 5,003 7,170
Severance costs 102 — 553 — Abandoned projects — — 219 — Conversion
expenses 31,197 — 31,197 — Pre-opening costs 154
— 398 —
Adjusted
EBITDA 42,008 42,216 202,796 202,661 Adjusted EBITDA from
discontinued operations (853 ) (4,968 ) (14,489 ) (29,551 )
Adjusted EBITDA from acquired hotels(a) — —
— 165
Same-store Adjusted
EBITDA $ 41,155 $ 37,248 $ 188,307 $
173,275 (a) For same-store metrics, we have included
the two hotels acquired in May 2011 as if they were acquired at the
beginning of 2011.
Hotel EBITDA and Hotel EBITDA
Margin
(dollars in thousands)
Three Months Ended
Year Ended December 31, December 31,
2012 2011
2012 2011
Same-store operating revenue: Room $ 168,020 $ 160,245
$
707,908
$
671,567 Food and beverage 41,908 38,033 148,736 141,048 Other
operating departments 11,733 12,131
49,696 51,042
Same-store operating
revenue 221,661 210,409 906,340 863,657
Same-store operating
expense: Room 47,379 45,023 190,293 182,780 Food and beverage
32,513 30,496 119,560 113,329 Other operating departments 5,517
5,839 22,434 23,490 Other property related costs 61,406 59,751
246,518 239,104 Management and franchise fees 9,773 9,485 41,815
39,702 Taxes, insurance and lease expense 14,575
13,710 60,207 54,280
Same-store operating expense 171,163
164,304 680,827 652,685
Hotel
EBITDA $ 50,498 $ 46,105 $ 225,513 $
210,972
Hotel EBITDA Margin 22.8 % 21.9 % 24.9 % 24.4
%
Reconciliation of Same-store Operating Revenue
and Same-store Operating Expense to Total Revenue, Total
Operating Expenses and Operating Income (Loss)
(in thousands)
Three Months Ended
Year Ended December 31, December 31,
2012 2011
2012 2011
Same-store operating revenue(a) $ 221,661 $ 210,409 $ 906,340 $
863,657 Other revenue 513 319 3,185 2,949 Revenue from acquired
hotels(a) — — —
(11,455 )
Total revenue 222,174 210,728 909,525 855,151
Same-store operating expense(a) 171,163 164,304 680,827 652,685
Consolidated hotel lease expense(b) 10,004 9,375 41,342 38,759
Unconsolidated taxes, insurance and lease expense (1,764 ) (1,835 )
(7,255 ) (6,987 ) Corporate expenses 6,054 6,375 26,128 29,080
Depreciation and amortization 31,944 29,983 123,879 118,232
Impairment loss — — — 4,315 Conversion expenses 31,197 — 31,197 —
Expenses from acquired hotels(a) — — — (11,290 ) Other expenses
929 562 4,855
4,017
Total operating expenses 249,527
208,764 900,973 828,811
Operating income (loss) $ (27,353 ) $ 1,964 $ 8,552
$ 26,340 (a) For same-store metrics, we have
included the two hotels acquired in May 2011 as if they were
acquired at the beginning of 2011. (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 attributable to
FelCor to Forecasted Adjusted FFO and Adjusted EBITDA
(in millions, except per share data)
Full Year 2013 Guidance Low
High Dollars Per Share
Amount(a) Dollars Per Share
Amount(a) Net loss attributable to
FelCor(b) $ (70 ) $ (63 ) Preferred dividends (39
) (39 )
Net loss attributable to FelCor common
stockholders (109 ) $ (0.88 ) (102 ) $ (0.82 ) Depreciation(c)
148 156
Adjusted FFO $ 39
$ 0.31 $ 54 $ 0.43
Net loss attributable to
FelCor(b) $ (70 ) $ (63 ) Depreciation(c) 148 156
Interest expense(c) 102 106 Amortization expense 6
6
Adjusted EBITDA $ 186 $ 205
(a)
Weighted average shares are 125.1
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