• Industry-leading full-year RevPAR growth
of 8.1%
• Implemented stock repurchase
program
• Increased common stock dividend by
50%
• Began sale process for five hotels
FelCor Lodging Trust Incorporated (NYSE: FCH) today reported
results for the fourth quarter ended December 31, 2015.
Fourth Quarter Highlights
- Same-store RevPAR increased 5.4% over
the same period in 2014.
- Adjusted EBITDA was $50.0 million, and
Same-store Adjusted EBITDA increased by $5.7 million, or 12.8%, to
$50.4 million compared to the same period in 2014.
- Hotel EBITDA increased 10.5% to
$55.1 million over the same period in 2014.
- Increased quarterly common dividend by
50% to $0.06 per share.
- Repurchased 4.3 million shares of
common stock for $29 million from December 2015 to date.
- Began marketing five hotels, and
entered into a letter of intent for Morgans and Royalton.
- Adjusted FFO per share was $0.15.
- Net loss per share was $0.07.
“We are pleased to have delivered industry-leading RevPAR growth
in 2015 and for the last eight years. We have created a
high-quality and diverse portfolio that we fully expect will
continue to outperform the industry,” said Richard A. Smith,
President and Chief Executive Officer of FelCor.
Mr. Smith added, “We are committed to maximizing long-term
stockholder value, which includes eliminating the disparity between
asset value and our stock price. As such, we recently began
marketing five hotels for sale. The sale of these hotels will
reduce leverage significantly, mitigate operational risk and
provide substantial capacity to repurchase our stock at a
significant discount to intrinsic value. We are making excellent
progress executing our strategy, which will further benefit our
long-term stockholders.”
Fourth Quarter Hotel Results
Fourth Quarter 2015
2014 Change Same-store hotels
(39) RevPAR $ 133.36 $ 126.57 5.4 % Total hotel revenue, in
millions $ 198.7 $ 185.0 7.4 % Hotel EBITDA, in millions $ 55.1 $
49.9 10.5 % Hotel EBITDA margin 27.7 % 26.9 % 77 bps
RevPAR for our 39 same-store hotels increased 5.4% (to $133.36)
from the same period in 2014. The change reflects a 2.0% increase
in ADR (to $179.39) and a 3.3% increase in occupancy (to 74.3%).
Hotel EBITDA for our 39 same-store hotels increased by 10.5% to
$55.1 million and Hotel EBITDA margin was 27.7% during the quarter,
a 77 basis point increase.
RevPAR for the eight Wyndham hotels (which we converted from
Holiday Inn on March 1, 2013) increased 9.1% (to $119.23) from
the same period in 2014. Wyndham Worldwide Corporation has
guaranteed the minimum annual NOI for these hotels through
2023.
See pages 13-14 and 20-22 for more detailed hotel portfolio
operating data.
Fourth Quarter Operating
Results
Fourth Quarter $ in millions, except for per share
information
2015 2014
Change Same-store Adjusted EBITDA $ 50.4 $ 44.6 12.8
% Adjusted EBITDA $ 50.0 $ 49.4 1.2 % Adjusted FFO per share $ 0.15
$ 0.15 $ — Net income (loss) per share $ (0.07 ) $ — $ (0.07 )
Same-store Adjusted EBITDA increased 12.8% to $50.4 million from
the same period in 2014. Adjusted EBITDA was $50.0 million.
Adjusted FFO was $21.8 million ($0.15 per share), compared
to $18.5 million ($0.15 per share) for the same period in
2014. Net loss attributable to common stockholders was $10.4
million ($0.07 per share) in 2015, compared to net income of
$567,000 ($0.00 per share) for the same period in 2014. Net income
in 2014 included $15.6 million of net gain on the sale of
consolidated hotels.
Year-to-Date Operating Results
RevPAR for our 39 same-store hotels increased 8.1% (to $144.35)
from the same period in 2014. The change reflects a 5.3% increase
in ADR (to $185.62) and a 2.7% increase in occupancy (to 77.8%).
Hotel EBITDA for our 39 same-store hotels increased 15.8% to $246.2
million, and Hotel EBITDA margin for these properties increased 188
basis points to 29.8%.
Same-store Adjusted EBITDA increased 18.0% to
$228.2 million from the same period in 2014. Adjusted EBITDA
(which includes Adjusted EBITDA from sold hotels) increased 6.3% to
$234.7 million from the same period in 2014.
Adjusted FFO was $115.2 million ($0.83 per share),
compared to $82.2 million ($0.65 per share) for the same
period in 2014. Net loss attributable to common stockholders was
$45.1 million ($0.33 per share) in 2015, compared to net
income of $53.4 million ($0.43 per share) for the same period
in 2014. Net loss in 2015 included $30.9 million in debt
extinguishment charges and a $20.9 million impairment charge offset
by a $20.1 million net gain on the sale of consolidated hotels
(including discontinued operations) and a $7.1 million gain on
sale of an unconsolidated joint venture. Net income in 2014
included $66.7 million of net gain on the sale of consolidated
hotels, a $30.2 million gain on the sale of our interest in
unconsolidated hotels, and a $20.7 million gain on the fair value
remeasurement of previously unconsolidated hotels.
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 15 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.
Capital Allocation
We continually strive to increase long-term stockholder value
through prudent capital allocation. As part of this on-going
pursuit, we look for opportunities to recycle capital that can be
redeployed to strengthen our balance sheet and achieve higher
returns.
Asset Sales
In 2015, we announced the next phase of our long-term strategic
plan. As part of this plan, we are selling five of our hotels,
including our three New York City properties. Given these hotels’
locations and quality, we expect to sell them for prices per key
that reflect very attractive EBITDA multiples. We have agreed to
sell the Holiday Inn Nashville Airport and received a letter of
intent to sell two other hotels (Morgans and Royalton) at
compelling prices. We are in discussions with potential buyers for
the two remaining properties - The Knickerbocker and the
Renaissance Esmeralda Indian Wells Resort & Spa.
Balance Sheet
As of December 31, 2015, we had $1.4 billion of
consolidated debt bearing a 5.2% weighted-average interest rate and
an eight-year weighted-average maturity. We had $59.8 million of
cash and cash equivalents and $17.7 million of restricted cash.
“We continue creating a strong balance sheet that will enable us
to thrive throughout lodging cycles. After completing planned asset
sales, we expect our pro forma leverage will be below 4.0 times,
down from 8.2 times in 2010. We have successfully extended our
already best-in-class debt maturity profile. Excluding our line of
credit, we have no significant maturities until 2022, and more than
90% of our debt is fixed, insulating us from rising rates,” said
Michael C. Hughes, Executive Vice President and Chief Financial
Officer of FelCor.
Stock Repurchase Program
In 2015, our Board approved a $100 million stock repurchase
program, which we implemented in December. To-date, we have
purchased 4.3 million shares for $29.0 million (at an average price
of $6.68 per share). We intend to continue repurchasing our common
stock while it trades at a significant discount to NAV and expect
the $100 million program to increase in conjunction with the
contemplated asset sales.
Common Dividend
During the fourth quarter, we increased our common stock
dividend by 50% to $0.06 per share. Our Board of Directors will
determine future quarterly common stock dividends based on funds
available for distribution, reinvestment opportunities within our
portfolio and taxable income, among other things.
Capital Expenditures
During the fourth quarter, we invested $15.6 million in capital
improvements at our hotels. During 2015, we invested
$85.7 million at our hotels, including $33.5 million at
The Knickerbocker. During 2016, we plan to invest approximately
$60 million in capital improvements and renovations as part of
our long-term capital plan. In addition, we expect to invest
approximately $15 million in redevelopment projects this
year.
Outlook
We continue to expect that our RevPAR growth will exceed the
industry average because of our high-quality and diverse portfolio,
which is over-weighted to supply constrained markets with favorable
demand trends.
Our outlook assumes that we sell the five hotels in 2016 that we
are currently marketing. The low-end of our guidance assumes that
we sell three hotels in the second quarter and the remaining two in
the third quarter. The high-end of our guidance assumes that we
sell all five hotels during the fourth quarter. Our outlook assumes
Hotel EBITDA for the Wyndham hotels equals the amount guaranteed by
Wyndham for 2016 (which corresponds to approximately
$59 million of Hotel EBITDA).
For the year, we expect:
- RevPAR for same-store hotels will
increase 3.5-5.5%;
- Adjusted EBITDA will be
$238.0 million - $256.0 million;
- Adjusted FFO per share will be $0.90 -
$0.99;
- Net income attributable to FelCor will
be $35.6 million - $49.0 million; and
- Interest expense, including our pro
rata share from joint ventures, will be $77.0 million - $81.6
million.
The following table reconciles our Adjusted EBITDA outlook (in
millions):
Low Middle High 2015
Same-store Adjusted EBITDA (39 hotels) $ 228.2 $ 228.2
$ 228.2 Growth(a) 20.8 24.8
28.8
Current Adjusted EBITDA (40
hotels) $ 249.0 $ 253.0 $ 257.0
2016 EBITDA lost from hotels to be
sold(b)
(11.0 ) (6.0 ) (1.0 )
2016
Adjusted EBITDA $ 238.0 $ 247.0 $
256.0 (a) Includes The Knickerbocker. (b)
Adjusted EBITDA for the five hotels currently being marketed from
their respective sale dates to December 31, 2016.
About FelCor
FelCor Lodging Trust Incorporated, a real estate investment
trust (REIT), owns a diversified portfolio of primarily
upper-upscale and luxury hotels that are located in major urban and
resort markets throughout the U.S. FelCor partners with top hotel
companies that operate its properties under globally renowned names
and as premier independent hotels. 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 Thursday, February 25, 2016 at 11:00 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 the “Investor Relations” page. The conference
call replay will also 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, 2015.
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
11
Total Enterprise Value
12
Hotel Operating Statistics
13
Historical Quarterly Operating Statistics
15
Non-GAAP Financial Measures
15
(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, 2015
2014 2015
2014 Revenues: Hotel operating revenue: Room $
151,526 $ 157,177 $ 673,276 $ 713,213 Food and beverage 42,166
38,064 158,531 157,607 Other operating departments 11,871 10,990
46,564 47,161 Other revenue 741 436
7,883 3,606 Total revenues
206,304 206,667 886,254
921,587 Expenses: Hotel departmental expenses: Room 40,833
42,799 172,252 188,465 Food and beverage 31,953 28,281 123,384
121,201 Other operating departments 4,153 4,914 17,505 22,210 Other
property related costs 52,967 54,239 223,546 238,170 Management and
franchise fees 8,147 7,262 35,572 36,067 Taxes, insurance and lease
expense 15,274 14,990 59,207 84,266 Corporate expenses 7,508 7,671
27,283 29,585 Depreciation and amortization 28,942 28,613 114,452
115,819 Impairment loss — — 20,861 — Other expenses 1,033
4,078 12,479 17,952
Total operating expenses 190,810
192,847 806,541 853,735
Operating income 15,494 13,820 79,713 67,852 Interest expense, net
(19,757 ) (19,051 ) (79,118 ) (90,695 ) Debt extinguishment — (7 )
(30,909 ) (4,770 ) Gain on sale of investment in unconsolidated
entities, net — (8 ) — 30,176 Gain from remeasurement of
unconsolidated entities, net — 4 — 20,737 Other gains, net —
— 166 100 Income
(loss) before equity in income (loss) from unconsolidated entities
(4,263 ) (5,242 ) (30,148 ) 23,400 Equity in income (loss) from
unconsolidated entities (150 ) 254
7,833 5,010 Income (loss) from continuing
operations before income tax expense (4,413 ) (4,988 ) (22,315 )
28,410 Income tax expense 147 (180 )
(1,245 ) (660 ) Income (loss) from continuing operations
(4,266 ) (5,168 ) (23,560 ) 27,750 Income (loss) from discontinued
operations 250 (492 ) 669
(360 ) Income (loss) before gain on sale of property (4,016 )
(5,660 ) (22,891 ) 27,390 Gain (loss) on sale of property, net
(65 ) 16,123 19,426
66,762 Net income (loss) (4,081 ) 10,463 (3,465 )
94,152 Net loss (income) attributable to noncontrolling interests
in other partnerships 248 133 (4,157 ) (697 ) Net loss (income)
attributable to redeemable noncontrolling interests in FelCor LP 44
(2 ) 194 (137 ) Preferred distributions - consolidated joint
venture (367 ) (349 ) (1,437 ) (1,219 )
Net income (loss) attributable to FelCor (4,156 ) 10,245 (8,865 )
92,099 Preferred dividends (6,278 ) (9,678 ) (30,138 ) (38,712 )
Redemption of preferred stock — —
(6,096 ) — Net income (loss) attributable to
FelCor common stockholders $ (10,434 ) $ 567 $ (45,099 ) $
53,387 Basic and diluted per common share data: Income
(loss) from continuing operations $ (0.07 ) $ 0.01 $ (0.33 )
$ 0.43 Net income (loss) $ (0.07 ) $ — $ (0.33 ) $
0.43 Basic weighted average common shares outstanding
142,823 124,188 137,730
124,158 Diluted weighted average common shares outstanding
142,823 125,146 137,730
124,892
Consolidated Balance
Sheets
(in thousands)
December 31, December 31, 2015
2014 Assets Investment in
hotels, net of accumulated depreciation of $899,575 and $850,687 at
December 31, 2015 and 2014, respectively $ 1,729,531 $ 1,599,791
Hotel development — 297,466 Investment in unconsolidated entities
9,575 15,095 Hotels held for sale — 47,145 Cash and cash
equivalents 59,786 47,147 Restricted cash 17,702 20,496 Accounts
receivable, net of allowance for doubtful accounts of $204 and $241
at December 31, 2015 and 2014, respectively 28,136 27,805 Deferred
expenses, net of accumulated amortization of $8,230 and $17,111 at
December 31, 2015 and 2014, respectively 24,455 25,827 Other assets
14,792 23,886 Total assets $ 1,883,977
$ 2,104,658
Liabilities and Equity Debt $
1,427,954 $ 1,585,867 Distributions payable 15,140 13,827 Accrued
expenses and other liabilities 125,274 135,481
Total liabilities 1,568,368 1,735,175
Commitments and contingencies Redeemable noncontrolling
interests in FelCor LP, 611 units issued and outstanding at
December 31, 2015 and 2014 4,464 6,616
Equity: Preferred stock, $0.01 par value, 20,000 shares authorized:
Series A Cumulative Convertible Preferred Stock, 12,879 shares,
liquidation value of $321,987, issued and outstanding at December
31, 2015 and 2014 309,337 309,337 Series C Cumulative Redeemable
Preferred Stock, 68 shares, liquidation value of $169,950, issued
and outstanding at December 31, 2014 — 169,412 Common stock, $0.01
par value, 200,000 shares authorized; 141,808 and 124,605 shares
issued and outstanding at December 31, 2015 and 2014, respectively
1,418 1,246 Additional paid-in capital 2,567,515 2,353,666
Accumulated deficit (2,618,117 ) (2,530,671 ) Total
FelCor stockholders’ equity 260,153 302,990 Noncontrolling
interests in other partnerships 7,806 18,435 Preferred equity in
consolidated joint venture, liquidation value of $43,954 and
$42,094 at December 31, 2015 and 2014, respectively 43,186
41,442 Total equity 311,145
362,867 Total liabilities and equity $ 1,883,977
$ 2,104,658
Consolidated Debt Summary
(dollars in thousands)
December 31,
EncumberedHotels
InterestRate (%)
Maturity Date 2015 2014 Senior
unsecured notes — 6.00 June 2025 $ 475,000 $ — Senior secured notes
9 5.625 March 2023 525,000 525,000 Mortgage debt(a) 4 4.95 October
2022 122,237 124,278 Mortgage debt 1 4.94 October 2022 30,717
31,228 Line of credit(b) 7 LIBOR + 2.75 June 2019 190,000 —
Knickerbocker loan(c) 1 LIBOR + 3.00 November 2017 85,000 64,861
Retired debt — — — — 840,500
Total 22 $
1,427,954 $ 1,585,867 (a) This debt is
comprised of separate non-cross-collateralized loans, each secured
by a mortgage encumbering different hotels. (b) Our line of
credit can be extended for one year, subject to satisfying certain
conditions. We may borrow up to $400 million under our line of
credit. (c) This loan can be extended for one year, subject
to satisfying certain conditions. At December 31, 2014, $6.3
million of this loan was secured by cash collateral with an
interest rate of LIBOR + 1.25%.
Schedule of
Encumbered Hotels
(dollars in millions)
Consolidated December 31, 2015 Debt
Balance Encumbered Hotels Senior secured notes
(5.625%) $ 525 Atlanta Buckhead - 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 Mortgage debt $ 27 Napa
Valley - ES Mortgage debt $ 35 Ft. Lauderdale - ES Mortgage debt $
23 Birmingham - ES Mortgage debt $ 37 Minneapolis Airport - ES
Mortgage debt $ 31 Deerfield Beach - ES Line of credit $ 190 Austin
- DTG, Boston Copley - FM, Charleston Mills House - WYN, LA LAX S -
ES, Santa Monica at the Pier - WYN, SF Union Square - MAR and St.
Petersburg Vinoy - REN Knickerbocker loan $ 85 The Knickerbocker
Capital Expenditures
(in thousands)
Three Months Ended Year Ended December
31, December 31, 2015
2014 2015
2014 Improvements and additions to majority-owned
hotels $ 12,458 $ 18,117 $ 48,436 $ 83,664 Partners’ pro rata share
of additions to consolidated joint venture hotels (17 ) (27 ) (47 )
(308 ) Pro rata share of additions to unconsolidated hotels
1,231 528 3,791 2,412
Total additions to hotels(a) $ 13,672 $ 18,618
$ 52,180 $ 85,768 (a) Includes
capitalized interest, property taxes, property insurance, ground
leases and certain employee costs.
Total Enterprise
Value
(in thousands, except per share data)
December 31, 2015
2014 Common shares outstanding 141,808 124,605
Units outstanding 611 611 Combined
shares and units outstanding 142,419 125,216 Common stock price $
7.30 $ 10.82
Market capitalization $ 1,039,659
$ 1,354,837 Series A preferred stock(a) 309,337 309,337 Series C
preferred stock(a) — 169,412 Preferred equity - Knickerbocker joint
venture, net 41,027 39,370 Consolidated debt 1,427,954 1,585,867
Noncontrolling interests of consolidated debt (4,250 ) (2,928 ) Pro
rata share of unconsolidated debt 11,433 17,096 Hotel
development(b) — (297,466 ) Cash, cash equivalents and restricted
cash(c) (77,488 ) (67,643 )
Total enterprise value
(TEV) $ 2,747,672 $ 3,107,882 (a)
Book value based on issue price. (b) The Knickerbocker
investment was placed in service during 2015. (c) For 2014,
restricted cash included $6.3 million of cash fully securing $6.3
million of outstanding debt assumed when we purchased The
Knickerbocker.
Hotel Operating Statistics
Occupancy (%) ADR ($)
RevPar ($) Three Months Ended December 31, Three
Months Ended December 31, Three Months Ended December
31, Same-store Hotels 2015 2014
%Change 2015 2014
%Change 2015 2014
%Change Embassy Suites Atlanta-Buckhead 77.9 74.1 5.2
141.29 137.71 2.6 110.09 102.02 7.9 DoubleTree Suites by Hilton
Austin 77.3 78.2 (1.1 ) 225.85 220.76 2.3 174.67 172.72 1.1 Embassy
Suites Birmingham 77.6 77.7 (0.2 ) 134.05 132.58 1.1 103.96 103.04
0.9 The Fairmont Copley Plaza, Boston 69.4 70.1 (1.0 ) 337.29
322.99 4.4 234.04 226.48 3.3 Wyndham Boston Beacon Hill 71.3 74.2
(3.8 ) 225.58 220.68 2.2 160.94 163.65 (1.7 ) Embassy Suites
Boston-Marlborough 69.6 64.2 8.3 172.41 164.21 5.0 119.98 105.47
13.8 Sheraton Burlington Hotel & Conference Center 79.1 71.6
10.4 108.59 119.30 (9.0 ) 85.91 85.46 0.5 The Mills House Wyndham
Grand Hotel, Charleston 74.6 80.2 (7.0 ) 214.07 200.99 6.5 159.70
161.22 (0.9 ) Embassy Suites Dallas-Love Field 79.3 83.3 (4.8 )
136.25 125.53 8.5 108.10 104.57 3.4 Embassy Suites Deerfield
Beach-Resort & Spa 77.7 74.0 5.0 187.41 181.15 3.5 145.67
134.11 8.6 Embassy Suites Fort Lauderdale 17th Street 84.0 83.5 0.6
164.25 150.61 9.1 137.97 125.70 9.8 Wyndham Houston-Medical Center
Hotel & Suites 80.9 65.4 23.7 146.83 149.00 (1.5 ) 118.81 97.47
21.9 Renaissance Esmeralda Indian Wells Resort & Spa 51.6 43.3
19.2 162.46 177.59 (8.5 ) 83.80 76.82 9.1 Embassy Suites Los
Angeles-International Airport/South 77.5 67.9 14.1 150.68 143.85
4.8 116.71 97.63 19.6 Embassy Suites Mandalay Beach-Hotel &
Resort 70.9 67.5 5.2 186.04 182.09 2.2 131.98 122.85 7.4 Embassy
Suites Miami-International Airport 85.7 84.4 1.6 151.60 148.60 2.0
129.90 125.35 3.6 Embassy Suites Milpitas-Silicon Valley 79.1 75.5
4.7 191.93 176.82 8.5 151.76 133.48 13.7 Embassy Suites
Minneapolis-Airport 74.5 68.8 8.3 144.55 142.95 1.1 107.72 98.36
9.5 Embassy Suites Myrtle Beach-Oceanfront Resort 66.1 66.4 (0.4 )
116.71 120.15 (2.9 ) 77.16 79.72 (3.2 ) Hilton Myrtle Beach Resort
44.7 45.6 (2.1 ) 99.74 99.17 0.6 44.56 45.24 (1.5 ) Embassy Suites
Napa Valley 84.6 80.9 4.6 224.13 217.17 3.2 189.52 175.62 7.9
Holiday Inn Nashville Airport 69.7 66.2 5.3 110.03 96.74 13.7 76.65
64.03 19.7 Wyndham New Orleans-French Quarter 74.0 67.0 10.5 147.77
157.26 (6.0 ) 109.34 105.35 3.8 Morgans New York 86.2 91.1 (5.4 )
318.76 315.61 1.0 274.63 287.38 (4.4 ) Royalton New York 89.7 91.3
(1.7 ) 343.46 357.58 (3.9 ) 308.22 326.33 (5.5 ) Embassy Suites
Orlando-International Drive South/Convention Center 81.6 83.4 (2.1
) 141.86 143.05 (0.8 ) 115.80 119.24 (2.9 ) DoubleTree Suites by
Hilton Orlando-Lake Buena Vista 90.7 86.6 4.7 146.75 133.89 9.6
133.04 115.97 14.7 Wyndham Philadelphia Historic District 63.2 53.6
17.8 162.07 148.86 8.9 102.41 79.83 28.3 Sheraton Philadelphia
Society Hill Hotel 69.3 61.6 12.6 177.81 174.98 1.6 123.18 107.71
14.4 Embassy Suites Phoenix-Biltmore 67.5 70.8 (4.7 ) 176.23 161.23
9.3 118.92 114.13 4.2 Wyndham Pittsburgh University Center 62.8
61.2 2.5 144.02 140.10 2.8 90.40 85.81 5.3 Wyndham San Diego
Bayside 70.3 71.5 (1.7 ) 141.20 119.87 17.8 99.20 85.69 15.8
Embassy Suites San Francisco Airport-South San Francisco 86.0 84.2
2.2 193.41 183.77 5.2 166.35 154.67 7.5 Embassy Suites San
Francisco Airport-Waterfront 85.3 80.2 6.3 196.16 190.39 3.0 167.25
152.72 9.5 Holiday Inn San Francisco-Fisherman’s Wharf 82.0 79.4
3.4 191.05 199.63 (4.3 ) 156.72 158.42 (1.1 ) San Francisco
Marriott Union Square 83.1 85.8 (3.2 ) 282.69 277.20 2.0 234.97
237.94 (1.2 ) Wyndham Santa Monica At the Pier 75.0 74.6 0.6 237.38
226.86 4.6 178.05 169.17 5.2 Embassy Suites Secaucus-Meadowlands
75.0 81.6 (8.0 ) 183.96 183.36 0.3 138.02 149.59 (7.7 ) The Vinoy
Renaissance St. Petersburg Resort & Golf Club 77.4 80.0 (3.2 )
201.45 192.17 4.8 155.89 153.64 1.5
Same-store
Hotels 74.3 72.0 3.3 179.39
175.83 2.0 133.36 126.57
5.4
Hotel Operating Statistics
Occupancy (%) ADR ($)
RevPar ($) Year Ended December 31, Year Ended
December 31, Year Ended December 31, Same-store
Hotels 2015 2014 %Change
2015 2014 %Change
2015 2014 %Change Embassy
Suites Atlanta-Buckhead 79.5 77.2 3.1 147.51 141.85 4.0 117.30
109.44 7.2 DoubleTree Suites by Hilton Austin 81.8 79.9 2.4 221.63
214.22 3.5 181.35 171.17 5.9 Embassy Suites Birmingham 79.0 76.6
3.1 134.07 130.37 2.8 105.86 99.82 6.1 The Fairmont Copley Plaza,
Boston 75.5 74.4 1.5 326.70 307.77 6.1 246.81 229.14 7.7 Wyndham
Boston Beacon Hill 79.2 80.0 (1.1 ) 234.42 211.48 10.8 185.60
169.24 9.7 Embassy Suites Boston-Marlborough 74.9 72.1 3.9 171.10
160.00 6.9 128.20 115.39 11.1 Sheraton Burlington Hotel &
Conference Center 75.2 69.0 9.1 116.52 125.56 (7.2 ) 87.64 86.57
1.2 The Mills House Wyndham Grand Hotel, Charleston 81.1 82.3 (1.4
) 222.42 195.66 13.7 180.45 161.06 12.0 Embassy Suites Dallas-Love
Field 87.9 80.8 8.8 132.52 124.86 6.1 116.42 100.84 15.5 Embassy
Suites Deerfield Beach-Resort & Spa 80.2 78.0 2.9 200.97 193.57
3.8 161.22 150.96 6.8 Embassy Suites Fort Lauderdale 17th Street
84.8 83.8 1.2 165.76 150.69 10.0 140.55 126.22 11.4 Wyndham
Houston-Medical Center Hotel & Suites 81.5 72.1 12.9 150.80
147.18 2.5 122.87 106.19 15.7 Renaissance Esmeralda Indian Wells
Resort & Spa 55.8 54.9 1.7 187.54 191.10 (1.9 ) 104.74 104.98
(0.2 ) Embassy Suites Los Angeles-International Airport/South 81.3
80.1 1.5 159.93 145.73 9.7 129.98 116.68 11.4 Embassy Suites
Mandalay Beach-Hotel & Resort 78.0 78.8 (1.0 ) 212.81 195.11
9.1 165.97 153.69 8.0 Embassy Suites Miami-International Airport
88.3 87.1 1.4 151.72 147.80 2.7 133.98 128.77 4.0 Embassy Suites
Milpitas-Silicon Valley 82.4 79.0 4.3 195.17 175.18 11.4 160.88
138.40 16.2 Embassy Suites Minneapolis-Airport 77.1 78.7 (2.0 )
150.93 148.04 2.0 116.38 116.52 (0.1 ) Embassy Suites Myrtle
Beach-Oceanfront Resort 74.4 72.3 2.9 172.30 173.53 (0.7 ) 128.12
125.46 2.1 Hilton Myrtle Beach Resort 64.1 62.7 2.4 140.45 136.67
2.8 90.09 85.65 5.2 Embassy Suites Napa Valley 83.8 80.1 4.6 232.95
219.99 5.9 195.12 176.22 10.7 Holiday Inn Nashville Airport 66.7
69.5 (4.1 ) 111.10 97.82 13.6 74.07 67.98 9.0 Wyndham New
Orleans-French Quarter 68.9 61.6 11.7 150.70 149.39 0.9 103.77
92.06 12.7 Morgans New York 82.4 89.3 (7.8 ) 282.65 287.21 (1.6 )
232.79 256.57 (9.3 ) Royalton New York 86.7 86.9 (0.2 ) 303.39
322.97 (6.1 ) 263.02 280.52 (6.2 ) Embassy Suites
Orlando-International Drive South/Convention Center 83.9 84.3 (0.5
) 146.67 144.13 1.8 122.99 121.48 1.2 DoubleTree Suites by Hilton
Orlando-Lake Buena Vista 89.4 86.6 3.2 139.63 132.90 5.1 124.89
115.15 8.5 Wyndham Philadelphia Historic District 64.3 63.9 0.7
160.43 129.41 24.0 103.22 82.68 24.8 Sheraton Philadelphia Society
Hill Hotel 69.0 69.7 (1.0 ) 174.72 164.54 6.2 120.54 114.69 5.1
Embassy Suites Phoenix-Biltmore 71.4 71.3 0.1 175.83 157.98 11.3
125.60 112.71 11.4 Wyndham Pittsburgh University Center 71.1 68.9
3.3 145.55 138.17 5.3 103.53 95.18 8.8 Wyndham San Diego Bayside
78.1 73.4 6.4 147.63 126.05 17.1 115.33 92.55 24.6 Embassy Suites
San Francisco Airport-South San Francisco 88.4 83.6 5.8 200.69
189.29 6.0 177.46 158.26 12.1 Embassy Suites San Francisco
Airport-Waterfront 86.4 75.9 13.9 207.60 191.67 8.3 179.35 145.44
23.3 Holiday Inn San Francisco-Fisherman’s Wharf 86.2 82.9 4.0
208.90 200.65 4.1 180.10 166.32 8.3 San Francisco Marriott Union
Square 86.8 87.6 (0.8 ) 288.45 275.03 4.9 250.49 240.80 4.0 Wyndham
Santa Monica At the Pier 83.9 83.0 1.1 255.40 242.91 5.1 214.26
201.64 6.3 Embassy Suites Secaucus-Meadowlands 76.0 78.4 (3.0 )
184.97 185.36 (0.2 ) 140.57 145.24 (3.2 ) The Vinoy Renaissance St.
Petersburg Resort & Golf Club 81.9 81.2 0.8 210.49
195.98 7.4 172.39 159.21 8.3
Same-store Hotels
77.8 75.8 2.7 185.62
176.24 5.3 144.35 133.51
8.1
Historical Quarterly Operating
Statistics
Occupancy (%) Q4 2014 Q1 2015
Q2 2015 Q3 2015 Q4 2015
Same-store hotels(a) 72.0 74.7 81.1 80.8 74.3
ADR ($) Q4 2014 Q1 2015 Q2 2015 Q3
2015 Q4 2015 Same-store hotels(a) 175.83
181.65 190.42 190.19 179.39
RevPAR ($) Q4 2014
Q1 2015 Q2 2015 Q3 2015 Q4 2015
Same-store hotels(a) 126.57 135.78 154.48 153.70
133.36 (a) Includes 39 consolidated hotels, excluding
The Knickerbocker, which opened in February 2015.
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 Income (Loss) to FFO and Adjusted
FFO
(in thousands, except per share data)
Three Months Ended December 31, 2015
2014 Dollars Shares
PerShareAmount
Dollars Shares
PerShareAmount
Net income (loss) $ (4,081 ) $ 10,463 Noncontrolling
interests 292 131 Preferred dividends (6,278 ) (9,678 ) Preferred
distributions - consolidated joint venture (367 )
(349 )
Net income (loss) attributable to FelCor common
stockholders (10,434 ) 567 Less: Dividends declared on unvested
restricted stock (16 ) (3 )
Basic earnings per
share data (10,450 ) 142,823 $ (0.07 ) 564 124,188 $ —
Restricted stock units — — — —
958 —
Diluted earnings per share data (10,450
) 142,823 (0.07 ) 564 125,146 — Depreciation and amortization
28,942 — 0.20 28,613 — 0.23 Depreciation, unconsolidated entities
and other partnerships 480 — — 496 — — Gain on sale of hotel in
unconsolidated entity (14 ) — — — — — Gain on sale of hotels, net
of noncontrolling interests in other partnerships (165 ) — —
(15,682 ) — (0.13 ) Gain on sale of investment in unconsolidated
entities, net — — — 8 — — Gain from remeasurement of unconsolidated
entities — — — (4 ) — — Noncontrolling interests in FelCor LP (44 )
611 — 2 611 0.01 Dividends declared on unvested restricted stock 16
— — 3 — — Conversion of unvested restricted stock and units
— 613 — — 7 —
FFO
18,765 144,047 0.13 14,000 125,764 0.11 Hurricane and earthquake
loss — — — 348 — — Debt extinguishment — — — 7 — — Debt
extinguishment, unconsolidated entities — — — 13 — — Severance
costs 43 — — 99 — — Lease adjustment 1,628 — 0.01 — — — Abandoned
projects 320 — — — — — Variable stock compensation 959 — 0.01 1,103
— 0.01 Pre-opening costs, net of noncontrolling interests
110 — — 2,925 — 0.03
Adjusted FFO $ 21,825 144,047 $ 0.15 $ 18,495
125,764 $ 0.15
Reconciliation of Net Income
(Loss) to FFO and Adjusted FFO
(in thousands, except per share data)
Year Ended December 31, 2015
2014 Dollars Shares
PerShareAmount
Dollars Shares
PerShareAmount
Net income (loss) $ (3,465 ) $ 94,152 Noncontrolling
interests (3,963 ) (834 ) Preferred distributions - consolidated
joint venture (1,437 ) (1,219 ) Redemption of preferred stock
(6,096 ) — Preferred dividends (30,138 ) (38,712 )
Net income (loss) attributable to FelCor common stockholders
(45,099 ) 53,387 Less: Dividends declared on unvested restricted
stock (56 ) (8 ) Less: Undistributed earnings allocated to unvested
restricted stock — (20 )
Basic earnings per
share data (45,155 ) 137,730 $ (0.33 ) 53,359 124,158 $ 0.43
Restricted stock units — — — —
734 —
Diluted earnings per share data (45,155
) 137,730 (0.33 ) 53,359 124,892 0.43 Depreciation and amortization
114,452 — 0.83 115,819 — 0.93 Depreciation, unconsolidated entities
and other partnerships 2,211 — 0.02 6,891 — 0.06 Gain on sale of
investment in unconsolidated entities, net — — — (30,176 ) — (0.24
) Gain from remeasurement of unconsolidated entities — — — (20,737
) — (0.17 ) Other gains, net (100 ) — — (100 ) — — Impairment loss
20,861 — 0.15 — — — Gain on sale of hotel in unconsolidated entity
(7,126 ) — (0.05 ) — — — Gain on sale of hotels, net of
noncontrolling interests in other partnerships (15,096 ) — (0.12 )
(65,453 ) — (0.52 ) Noncontrolling interests in FelCor LP (194 )
611 — 137 614 (0.01 ) Dividends declared on unvested restricted
stock 56 — — 8 — — Conversion of unvested restricted stock and
units — 492 — 20 5 —
FFO 69,909 138,833 0.50 59,768 125,511 0.48 Hurricane
and earthquake loss — — — 348 — — Debt extinguishment, including
discontinued operations, net of noncontrolling interests 30,909 —
0.22 4,850 — 0.03 Debt extinguishment, unconsolidated entities 330
— — 168 — — Severance costs 3,667 — 0.03 928 — 0.01 Abandoned
projects 320 — — — — — Variable stock compensation 798 — 0.01 2,723
— 0.02 Redemption of preferred stock 6,096 — 0.05 — — — Contract
dispute contingency — — — 5,850 — 0.05 Contract dispute recovery
(3,717 ) — (0.03 ) — — — Pre-opening costs, net of noncontrolling
interests 5,235 — 0.04 7,530 — 0.06 Lease adjustment 1,628
— 0.01 — — —
Adjusted
FFO $ 115,175 138,833 $ 0.83 $ 82,165 125,511 $
0.65
Reconciliation of Net Income (Loss) to
EBITDA, Adjusted EBITDA and Same-store Adjusted EBITDA
(in thousands)
Three Months Ended Year Ended December
31, December 31, 2015
2014 2015
2014 Net income (loss) $ (4,081 ) $ 10,463 $
(3,465 ) $ 94,152 Depreciation and amortization 28,942 28,613
114,452 115,819 Depreciation, unconsolidated entities and other
partnerships 480 496 2,211 6,891 Interest expense 19,764 19,058
79,142 90,743 Interest expense, discontinued operations and
unconsolidated entities 82 216 521 1,896 Income taxes (147 ) —
1,245 — Noncontrolling interests in preferred distributions,
consolidated joint venture (71 ) — (71 ) — Noncontrolling interests
in other partnerships 248 133
(4,157 ) (697 )
EBITDA 45,217 58,979 189,878 308,804
Impairment loss — — 20,861 — Hurricane and earthquake loss — 348 —
348 Debt extinguishment, including discontinued operations, net of
noncontrolling interests — 7 30,909 4,850 Debt extinguishment,
unconsolidated entities — 13 330 168 Gain on sale of hotel in
unconsolidated entity (14 ) — (7,126 ) — Gain on sale of hotels,
net of noncontrolling interests in other partnerships (165 )
(15,682 ) (15,096 ) (65,453 ) Gain on sale of investment in
unconsolidated entities, net — 8 — (30,176 ) Gain from
remeasurement of unconsolidated entities — (4 ) — (20,737 ) Other
gains, net — — (100 ) (100 ) Amortization of fixed stock and
directors’ compensation 1,907 1,631 7,121 6,122 Severance costs 43
99 3,667 928 Lease adjustment 1,628 — 1,628 — Abandoned projects
320 — 320 — Variable stock compensation 959 1,103 798 2,723
Contract dispute contingency — — — 5,850 Contract dispute recovery
— — (3,717 ) — Pre-opening costs, net of noncontrolling interests
110 2,925 5,235
7,530
Adjusted EBITDA 50,005 49,427 234,708 220,857
Adjusted EBITDA from hotels disposed, held for sale and recently
opened 359 (4,778 ) (6,488 )
(27,509 )
Same-store Adjusted EBITDA $ 50,364 $
44,649 $ 228,220 $ 193,348
Hotel EBITDA and Hotel EBITDA Margin
(dollars in thousands)
Three Months Ended Year Ended December
31, December 31, 2015
2014 2015
2014 Same-store operating revenue: Room $
146,516 $ 139,061 $ 629,186 $ 581,932 Food and beverage 40,415
35,622 150,950 136,588 Other operating departments 11,808
10,357 45,655 42,352
Same-store operating revenue(a) 198,739
185,040 825,791 760,872
Same-store operating expense: Room
39,064 37,863 159,095 152,782 Food and beverage 29,598 26,562
114,673 105,565 Other operating departments 4,135 4,558 17,140
19,678 Other property related costs 50,478 47,726 205,846 191,107
Management and franchise fees 8,003 6,233 33,341 28,726 Taxes,
insurance and lease expense 12,383 12,242
49,539 50,474
Same-store
operating expense(a) 143,661
135,184 579,634 548,332
Hotel
EBITDA $ 55,078 $ 49,856 $ 246,157 $
212,540
Hotel EBITDA Margin 27.7 % 26.9 % 29.8 % 27.9
% (a) Excludes The Knickerbocker, which opened in
February 2015.
The following tables set forth the
components of our Hotel EBITDA for our same-store hotels (in
thousands):
Year Ended
December 31, 2015
Same-store Hotels
2015
HotelOperatingRevenue
Net Income(Loss)
OtherAdjustments
Depreciation
InterestExpense
2015 Hotel EBITDA
HotelEBITDAMargin
Embassy Suites Atlanta-Buckhead $ 14,923 $ 3,534 $ — $ 2,573 $ — $
6,107 40.9 % DoubleTree Suites by Hilton Austin 14,739 3,855 —
1,953 424 6,232 42.3 % Embassy Suites Birmingham 10,019 932 2 1,567
1,208 3,709 37.0 % The Fairmont Copley Plaza, Boston 58,136 2,894 —
8,677 1,084 12,655 21.8 % Wyndham Boston Beacon Hill 23,463 5,295
(4 ) 4,028 — 9,319 39.7 % Embassy Suites Boston-Marlborough 12,086
2,837 — 1,163 — 4,000 33.1 % Sheraton Burlington Hotel &
Conference Center 14,486 1,792 — 2,416 — 4,208 29.0 % The Mills
House Wyndham Grand Hotel, Charleston 19,548 4,395 22 2,496 900
7,813 40.0 % Embassy Suites Dallas-Love Field 12,122 2,510 — 1,354
— 3,864 31.9 % Embassy Suites Deerfield Beach-Resort & Spa
18,377 3,047 — 2,055 1,615 6,717 36.6 % Embassy Suites Fort
Lauderdale 17th Street 22,332 2,532 2 2,939 1,817 7,290 32.6 %
Wyndham Houston-Medical Center Hotel & Suites 14,401 3,941 (70
) 2,164 214 6,249 43.4 % Renaissance Esmeralda Indian Wells Resort
& Spa 41,003 (18,554 )
20,863
(1)
3,569 — 5,878 14.3 % Embassy Suites Los Angeles-International
Airport/South 19,925 4,896 — 2,610 636 8,142 40.9 % Embassy Suites
Mandalay Beach-Hotel & Resort 19,897 4,048 24 3,176 380 7,628
38.3 % Embassy Suites Miami-International Airport 18,725 2,804 20
1,945 315 5,084 27.2 % Embassy Suites Milpitas-Silicon Valley
18,295 5,845 — 1,230 — 7,075 38.7 % Embassy Suites
Minneapolis-Airport 13,809 1,316 1 1,832 1,920 5,069 36.7 % Embassy
Suites Myrtle Beach-Oceanfront Resort 22,277 3,077 25 2,854 376
6,332 28.4 % Hilton Myrtle Beach Resort 21,434 3,940 — 3,373 —
7,313 34.1 % Embassy Suites Napa Valley 17,145 3,608 (25 ) 2,075
1,403 7,061 41.2 % Holiday Inn Nashville Airport 12,686 321 12
2,492 — 2,825 22.3 % Wyndham New Orleans-French Quarter 16,627
3,586 537 2,852 529 7,504 45.1 % Morgans New York 10,345 (2,281 ) —
2,482 — 201 1.9 % Royalton New York 20,874 (1,388 ) — 2,270 — 882
4.2 % Embassy Suites Orlando-International Drive South/Convention
Center 11,229 2,521 — 1,100 — 3,621 32.2 % DoubleTree Suites by
Hilton Orlando-Lake Buena Vista 12,683 295 — 3,166 — 3,461 27.3 %
Wyndham Philadelphia Historic District 17,571 2,131 17 3,087 293
5,528 31.5 % Sheraton Philadelphia Society Hill Hotel 25,204 2,697
— 3,979 — 6,676 26.5 % Embassy Suites Phoenix-Biltmore 11,155 1,590
276 1,825 279 3,970 35.6 % Wyndham Pittsburgh University Center
12,004 (220 )
1,644
(2)
2,119 256 3,799 31.6 % Wyndham San Diego Bayside 31,717 2,087 —
6,400 — 8,487 26.8 % Embassy Suites San Francisco Airport-South San
Francisco 24,471 7,476 — 1,625 — 9,101 37.2 % Embassy Suites San
Francisco Airport-Waterfront 26,572 10,047 (3,717 )(3) 2,979 —
9,309 35.0 % Holiday Inn San Francisco-Fisherman’s Wharf 43,067
5,972 — 1,678 — 7,650 17.8 % San Francisco Marriott Union Square
42,321 5,698
1,061
(4)
5,655 2,472 14,886 35.2 % Wyndham Santa Monica At the Pier 11,293
3,962 24 1,137 812 5,935 52.6 % Embassy Suites
Secaucus-Meadowlands(a) 14,127 2,508 6 722 — 3,236 22.9 % The Vinoy
Renaissance St. Petersburg Resort & Golf Club 54,703
4,622 2 5,790 927
11,341 20.7 %
$ 825,791 $ 100,168
$ 20,722 $ 107,407
$ 17,860 $ 246,157 29.8 %
*Footnotes on Page 22
Year Ended
December 31, 2014
Same-store
Hotels
2014
HotelOperatingRevenue
Net Income(Loss)
OtherAdjustments
Depreciation
InterestExpense
2014 HotelEBITDA
Hotel EBITDAMargin
Embassy Suites Atlanta-Buckhead $ 13,898 $ 2,972 $ — $ 2,727 $ — $
5,699 41.0 % DoubleTree Suites by Hilton Austin 13,934 4,077 9
1,949 139 6,174 44.3 % Embassy Suites Birmingham 9,493 554 1 1,682
1,227 3,464 36.5 % The Fairmont Copley Plaza, Boston 53,447 1,431 —
8,577 — 10,008 18.7 % Wyndham Boston Beacon Hill 21,236 4,251 —
4,084 — 8,335 39.2 % Embassy Suites Boston-Marlborough 10,982 2,173
— 1,311 — 3,484 31.7 % Sheraton Burlington Hotel & Conference
Center 14,840 2,227 — 1,972 — 4,199 28.3 % The Mills House Wyndham
Grand Hotel, Charleston 17,252 3,739 — 2,247 866 6,852 39.7 %
Embassy Suites Dallas-Love Field 10,501 1,772 — 1,278 — 3,050 29.0
% Embassy Suites Deerfield Beach-Resort & Spa 17,249 1,672 (1 )
2,722 1,640 6,033 35.0 % Embassy Suites Fort Lauderdale 17th Street
20,124 1,133 1 3,129 1,846 6,109 30.4 % Wyndham Houston-Medical
Center Hotel & Suites 12,394 2,849 (88 ) 2,169 540 5,470 44.1 %
Renaissance Esmeralda Indian Wells Resort & Spa 38,881 1,326 2
3,327 — 4,655 12.0 % Embassy Suites Los Angeles-International
Airport/South 18,091 4,429 — 2,507 — 6,936 38.3 % Embassy Suites
Mandalay Beach-Hotel & Resort 18,645 2,515 — 3,273 956 6,744
36.2 % Embassy Suites Miami-International Airport 18,186 1,904 —
2,161 796 4,861 26.7 % Embassy Suites Milpitas-Silicon Valley
15,825 4,181 — 1,513 — 5,694 36.0 % Embassy Suites
Minneapolis-Airport 13,864 1,305 1 1,908 1,950 5,164 37.2 % Embassy
Suites Myrtle Beach-Oceanfront Resort 21,425 2,343 (1 ) 3,095 424
5,861 27.4 % Hilton Myrtle Beach Resort 19,721 2,852 — 3,503 —
6,355 32.2 % Embassy Suites Napa Valley 15,434 2,255 349 2,071
1,426 6,101 39.5 % Holiday Inn Nashville Airport 11,772 196 — 2,004
— 2,200 18.7 % Wyndham New Orleans-French Quarter 13,795 2,965 —
2,092 477 5,534 40.1 % Morgans New York 11,351 (1,716 ) 243 2,367 —
894 7.9 % Royalton New York 22,542 (134 ) 371 2,182 — 2,419 10.7 %
Embassy Suites Orlando-International Drive South/Convention Center
10,923 2,379 — 1,291 — 3,670 33.6 % DoubleTree Suites by Hilton
Orlando-Lake Buena Vista 11,725 (367 ) — 3,316 — 2,949 25.2 %
Wyndham Philadelphia Historic District 13,863 (606 ) — 3,077 737
3,208 23.1 % Sheraton Philadelphia Society Hill Hotel 24,846 2,171
— 4,249 — 6,420 25.8 % Embassy Suites Phoenix-Biltmore 10,053 557 6
2,153 563 3,279 32.6 % Wyndham Pittsburgh University Center 10,912
201 — 2,127 644 2,972 27.2 % Wyndham San Diego Bayside 25,291 (403
) — 5,680 — 5,277 20.9 % Embassy Suites San Francisco Airport-South
San Francisco 21,661 5,996 — 1,726 — 7,722 35.6 % Embassy Suites
San Francisco Airport-Waterfront 21,936 (1,283 )
5,850
(5)
2,585 — 7,152 32.6 % Holiday Inn San Francisco-Fisherman’s Wharf
39,736 5,544 — 1,220 — 6,764 17.0 % San Francisco Marriott Union
Square 40,526 5,435 (102 ) 5,739 1,054 12,126 29.9 % Wyndham Santa
Monica At the Pier 10,603 3,473 — 1,056 936 5,465 51.5 % Embassy
Suites Secaucus-Meadowlands(a) 14,560 3,212 (11 ) 742 — 3,943 27.1
% The Vinoy Renaissance St. Petersburg Resort & Golf Club
49,355 2,790 1 6,507
— 9,298 18.8 %
$ 760,872 $
82,370 $ 6,631 $
107,318 $ 16,221 $
212,540 27.9 % *Footnotes on Page 22
The following are footnotes to the Hotel EBITDA tables on
page 20 and 21: (1) Amount primarily represents an
impairment resulting from a reduced estimated hold period for this
hotel. (2)
Amount represents an adjustment to
straight-line lease expense from prior years for a ground lease
associated with this hotel.
(3) Amount represents net revenue attributable to a
favorable settlement of a commercial contract dispute. (4)
Amount primarily represents debt extinguishment charges. (5)
Amount represents charges incurred for a commercial contract
dispute contingency, a portion of which was recovered in 2015.
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 Year Ended December
31, December 31, 2015
2014 2015
2014 Same-store operating revenue $ 198,739 $ 185,040
$ 825,791 $ 760,872 Other revenue 741 436 7,883 3,606 Revenue from
hotels disposed, held for sale and recently opened(a) 6,824
21,191 52,580 157,109
Total revenue 206,304 206,667 886,254 921,587
Same-store operating expense 143,661 135,184 579,634 548,332
Consolidated hotel lease expense(b) 1,345 2,412 7,107 31,635
Unconsolidated taxes, insurance and lease expense (512 ) (817 )
(2,194 ) (6,163 ) Lease adjustment 1,628 — 1,628 — Corporate
expenses 7,508 7,671 27,283 29,585 Depreciation and amortization
28,942 28,613 114,452 115,819 Impairment loss — — 20,861 — Expenses
from hotels disposed, held for sale and recently opened(a) 7,205
15,706 45,291 116,575 Other expenses 1,033
4,078 12,479 17,952
Total
operating expense 190,810 192,847
806,541 853,735
Operating income
$ 15,494 $ 13,820 $ 79,713 $ 67,852
(a) Under GAAP accounting guidance adopted in 2014, we
include the operating performance for hotels in continuing
operations in our Consolidated Statements of Operations. However,
for purposes of our Non-GAAP reporting metrics, we have excluded
the results of these hotels to provide a meaningful same-store
comparison. (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 Income Attributable to FelCor to Forecasted Adjusted
FFO and Adjusted EBITDA
(in millions, except per share data)
Full Year 2016 Guidance Low High
Dollars
Per
ShareAmount(a)
Dollars
Per
ShareAmount(a)
Net income attributable to FelCor(b) $ 35.6 $ 49.0
Preferred dividends (25.1 ) (25.1 )
Net income
attributable to FelCor common stockholders 10.5 $ 0.07 23.9 $
0.17 Depreciation(c) 115.2 115.2 Noncontrolling interests in FelCor
LP 0.7 0.7
FFO and Adjusted FFO
$ 126.4 $ 0.90 $ 139.8 $ 0.99
Net income
attributable to FelCor(b) $ 35.6 $ 49.0 Depreciation(c)
115.2 115.2 Interest expense(c) 77.0 81.6 Income taxes 1.2 1.2
Preferred distributions - consolidated joint venture 1.1 1.1
Noncontrolling interests in FelCor LP 0.7 0.7
EBITDA $ 230.8 $ 248.8 Amortization of stock
compensation 7.2 7.2
Adjusted
EBITDA $ 238.0 $ 256.0 (a) Weighted
average shares are 141.0 million. (b) Excludes any gains or losses
on future asset or capital transactions. (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 Funds From Operations (“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.
Earnings Before Interest, Taxes, Depreciation and Amortization
(“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
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.
- Other expenses and costs - From time to
time, we periodically incur expenses or transaction costs that are
not indicative of ongoing operating performance. Such costs
include, but are not limited to, conversion costs, acquisition
costs, pre-opening costs, severance costs and certain non-cash
adjustments. We exclude these costs from the calculation of
Adjusted FFO and Adjusted EBITDA.
- Variable stock compensation - We
exclude the cost associated with our variable stock compensation.
This cost is subject to volatility related to the price and
dividends of our common stock that does not necessarily correspond
to our operating performance.
In addition, to derive Adjusted EBITDA, we exclude gains or
losses on the sale of depreciable assets and impairment losses
because including them in EBITDA is inconsistent with reporting 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. We
also exclude the amortization of our fixed stock and directors’
compensation, which is included in corporate expenses and is not
separately stated on our statements of operations. Excluding
amortization of our fixed stock and directors’ compensation
maintains consistency with the EBITDA definition.
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 in a manner consistent with
Adjusted EBITDA, however, we also eliminate all revenues and
expenses from continuing operations not directly associated with
hotel operations, including other income and corporate-level
expenses. We eliminate these additional items 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
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
We 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. As we present them, these non-GAAP financial measures
may not be comparable to similar non-GAAP financial measures as
presented 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. We
compensate 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. We strongly encourage
investors to review our financial information in its entirety and
not to rely on a single financial measure.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20160225005311/en/
FelCor Lodging Trust IncorporatedStephen A. Schafer,
972-444-4912Senior Vice Presidentsschafer@felcor.com
Felcor Lodging (NYSE:FCH)
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