FelCor Lodging Trust Incorporated (NYSE: FCH) today reported
results for the fourth quarter ended December 31, 2016.
Fourth Quarter Highlights
- Same-store RevPAR decreased 2.0%
compared to the same period in 2015.
- Net loss attributable to FelCor common
stockholders was $6.2 million ($0.04 per share) versus
$10.4 million ($0.07 per share) for the same period in
2015.
- Adjusted FFO per share increased 13.3%
to $0.17 from the same period in 2015.
- Adjusted EBITDA increased
$1.4 million to $51.4 million from the same period
in 2015.
“On behalf of the entire team, we are very pleased to extend a
warm welcome to Steve Goldman, who will join us next week as
FelCor’s new CEO. Steve is a terrific industry leader who brings to
FelCor extensive experience in all aspects of hotel operations,
acquisitions and divestitures, finance and development that will
add measurably to our prospects for future success. We are looking
forward to working with him as we continue to build value for
stockholders,” said Troy A. Pentecost, FelCor’s President, Interim
Senior Executive Officer and Chief Operating Officer.
Mr. Pentecost continued, “We had a productive quarter on several
fronts. Despite a decline in revenues, we beat our Adjusted FFO and
Adjusted EBITDA expectations for the fourth quarter. We also
successfully completed negotiations with Hilton with respect to new
management agreements for 18 of our properties. The new management
agreements shift a substantial portion of fees from fixed base fees
to variable incentive fees, which are payable only after achieving
a base return on our invested capital. This new fee structure
better aligns Hilton’s interest with our economic interest. We also
negotiated comprehensive, long-term renovation plans at the
affected hotels that allow us to deploy our capital more
efficiently. We are excited to extend our strong relationship with
Hilton, and we are confident the new agreements will help us
achieve meaningful returns on these assets.”
Fourth Quarter Hotel Results
Fourth Quarter 2016 2015
Change Same-store hotels (37) RevPAR $
135.04 $ 137.86 (2.0 )% Total hotel revenue, in millions $ 182.1 $
186.5 (2.4 )% Hotel EBITDA, in millions $ 52.2 $ 54.0 (3.3 )% Hotel
EBITDA margin 28.7 % 28.9 % (27) bps
RevPAR for our 37 same-store hotels decreased 2.0% (to $135.04)
from the same period in 2015. The change reflects a 1.2% increase
in average daily rate, or ADR, (to $184.46) and a 3.2% decline in
occupancy (to 73.2%). We continued to face headwinds during the
fourth quarter that negatively impacted revenues. Hurricane
Matthew, which struck the East Coast in early October, resulted in
the mandatory evacuation of four of our hotels and five condominium
towers. In addition, we continued to experience weak supply and
demand fundamentals in certain markets (mainly Miami, Houston, New
York and San Francisco), which account for approximately 30% of our
available room nights. Despite weakness in certain markets, we
continued focusing our revenue management efforts on rate growth
versus occupancy.
Wyndham Worldwide Corporation has guaranteed minimum annual NOI
for eight of our hotels over the 10-year term of their management
agreements. Hotel EBITDA for the three months ended
December 31, 2016 includes $2.0 million in fee reductions
related to the Wyndham guaranty compared to $180,000 during the
same period last year.
See pages 12-13 and 18-23 for more detailed operating data.
Fourth Quarter Operating
Results
Fourth Quarter $ in millions, except for per share
information
2016 2015
Change Net loss attributable to FelCor common stockholders $
(6.2 ) $ (10.4 ) 41.1 % Net loss per share $ (0.04 ) $ (0.07 ) $
0.03 Same-store Adjusted EBITDA $ 47.4 $ 49.3 (3.9 )% Adjusted
EBITDA $ 51.4 $ 50.0 2.7 % Adjusted FFO per share $ 0.17 $ 0.15 $
0.02
Full Year Operating Results
Net loss attributable to common stockholders was
$21.6 million ($0.16 per share) in 2016, compared to
$45.1 million ($0.33 per share) for the same period in 2015.
Net loss in 2016 includes impairment charges of $26.5 million
attributable to two hotels (one of which was sold in 2016) and a
$6.9 million charge for severance costs. These charges are
partially offset by a $3.2 million net gain on hotel sales
(including a $3.1 million loss in discontinued operations). Net
loss in 2015 included $30.9 million in debt extinguishment
charges, a $20.9 million impairment charge for a property
subsequently sold in 2016 and a $3.7 million charge for
severance costs, partially offset by a $20.1 million net gain
on the sale of consolidated hotels (including $658,000 in
discontinued operations) and a $7.1 million gain on the sale
of a hotel owned by an unconsolidated joint venture.
RevPAR for our 37 same-store hotels increased 0.9% (to $150.11)
from the same period in 2015. The change reflects a 1.8% increase
in ADR (to $191.14) and a 0.9% decline in occupancy (to 78.5%).
Hotel EBITDA for our 37 same-store hotels increased by 0.6% to
$238.8 million, and Hotel EBITDA margin was 30.6%, a 16 basis
point decrease. Hotel EBITDA for the year ended December 31,
2016 includes $5.3 million in fee reductions related to the
Wyndham guaranty compared to $1.4 million during the same
period last year.
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 14 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.
Balance Sheet
As of December 31, 2016, we had $1.3 billion of
consolidated debt with a 5.4% weighted-average interest rate and a
six-year weighted-average maturity. We had $47.3 million of
cash and cash equivalents on hand and $19.5 million of
restricted cash. We reduced our consolidated debt by
$74 million and our leverage ratio from 6.0x at
December 31, 2015 to 5.6x at December 31, 2016. In 2016,
Moody’s upgraded our corporate credit rating to B2, which reflects
continued progress with respect to strengthening our balance sheet
and improving our credit metrics.
Asset Sales
In 2016, we sold the Renaissance Esmeralda Indian Wells Resort
and the Holiday Inn Nashville Airport for $108.0 million total
gross proceeds. We used proceeds from these sales to repay our line
of credit. We continue to market our three New York hotels.
Stock Repurchase Program
In 2015, our Board approved a $100 million stock repurchase
program, which we began implementing in December 2015. To date, we
have purchased 6.6 million shares for $44.8 million (at
an average price of $6.78 per share).
Common Dividend
We declared a fourth quarter $0.06 per share common stock
dividend, which we paid at the end of January. 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
In 2016, we renovated two hotels (Embassy Suites - Dallas Love
Field and Embassy Suites - Orlando International Drive
South/Convention Center) and began redeveloping two resort
properties (The Vinoy Renaissance St. Petersburg Resort & Golf
Club and Embassy Suites Myrtle Beach-Oceanfront Resort), which
included the construction of significant improvements to our resort
amenities. We expect these renovations and redevelopments will
enhance the quality of our portfolio and offer attractive returns.
We spent $74.6 million on renovations and redevelopments at
our hotels during 2016. We continue to underwrite and evaluate
future renovations and redevelopments.
Outlook
Our outlook assumes the Morgans sale is completed during the
second quarter of 2017 and Royalton and The Knickerbocker are sold
during the fourth quarter of 2017 for the low-end of guidance. We
are assuming no sales for the high-end of guidance. Our outlook
assumes Hotel EBITDA for the Wyndham hotels equals the amount
guaranteed by Wyndham for 2017, which corresponds to approximately
25% of our Adjusted EBITDA.
For 2017, we expect:
- Net income attributable to FelCor will
be $33.9 - 40.4 million;
- RevPAR for same-store hotels will
increase 0.5 - 2.5%;
- Adjusted EBITDA with asset sales will
be $224.0 - 236.0 million;
- Adjusted FFO per share will be $0.83 -
0.90; and
- Interest expense, including our pro
rata share from joint ventures, will be $76.3 -
78.5 million.
Low High
2017 Adjusted EBITDA (38 hotels) $ 229.0 $ 236.0 2017 EBITDA
lost from hotels to be sold(a) (5.0 ) —
2017 Adjusted EBITDA with asset sales $ 224.0
$ 236.0 (a) Adjusted EBITDA for the three New York
hotels currently being marketed from the respective sale dates to
December 31, 2017.
About FelCor
FelCor Lodging Trust Incorporated, a real estate investment
trust, owns a diversified portfolio of primarily upper-upscale and
luxury hotels that are located in major markets and resort
locations 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 23, 2017 at 11:00 a.m.
(Central Time). We will simultaneously webcast the conference call
on our 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 webcast link on the
“Investors” 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, 2016.
TABLE OF CONTENTS
Page Consolidated Statements of
Operations(a)
7
Consolidated Balance Sheets(a) 8 Consolidated Debt Summary 9
Schedule of Encumbered Hotels 10 Capital Expenditures 10 Total
Enterprise Value 11 Hotel Operating Statistics 12 Historical
Quarterly Operating Statistics 14 Non-GAAP Financial Measures 14
(a)
We have prepared our consolidated statements of operations and
balance sheets without an audit. Certain information and footnote
disclosures normally included in financial statements presented in
accordance with GAAP have been omitted. Our consolidated statements
of operations and balance sheets should be read in conjunction with
the audited 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, 2016
2015 2016 2015 Revenues: Hotel
operating revenue: Room $ 147,077 $ 151,526 $ 661,640 $ 673,276
Food and beverage 37,738 42,166 155,227 158,531 Other operating
departments 10,613 11,871 45,951 46,564 Other revenue 495
741 4,136 7,883
Total revenues 195,923 206,304
866,954 886,254 Expenses: Hotel departmental
expenses: Room 40,404 40,833 171,883 172,252 Food and beverage
27,272 31,953 119,047 123,384 Other operating departments 3,478
4,153 15,120 17,505 Other property-related costs 47,732 52,967
212,180 223,546 Management and franchise fees 7,162 8,147 32,935
35,572 Taxes, insurance and lease expense 13,729 15,274 57,317
59,207 Corporate expenses 6,346 7,508 27,037 27,283 Depreciation
and amortization 27,414 28,942 114,054 114,452 Impairment — —
26,459 20,861 Other expenses 2,189 1,033
12,740 12,479 Total operating
expenses 175,726 190,810 788,772
806,541 Operating income 20,197 15,494 78,182
79,713 Interest expense, net (19,127 ) (19,757 ) (78,182 ) (79,118
) Debt extinguishment — — — (30,909 ) Other gains, net 242
— 342 166 Income
(loss) before equity in income (loss) from unconsolidated entities
1,312 (4,263 ) 342 (30,148 ) Equity in income (loss) from
unconsolidated entities 147 (150 )
1,533 7,833 Income (loss) from continuing
operations before income tax 1,459 (4,413 ) 1,875 (22,315 ) Income
tax (729 ) 147 (873 ) (1,245 )
Income (loss) from continuing operations 730 (4,266 ) 1,002 (23,560
) Income (loss) from discontinued operations —
250 (3,131 ) 669 Income (loss) before
gain (loss) on sale of hotels 730 (4,016 ) (2,129 ) (22,891 ) Gain
(loss) on sale of hotels, net (332 ) (65 )
6,322 19,426 Net income (loss) 398
(4,081 ) 4,193 (3,465 ) Net loss (income) attributable to
noncontrolling interests in other partnerships 72 248 673 (4,157 )
Net loss attributable to redeemable noncontrolling interests in
FelCor LP 26 44 93 194 Preferred distributions - consolidated joint
venture (368 ) (367 ) (1,461 ) (1,437 )
Net income (loss) attributable to FelCor 128 (4,156 ) 3,498 (8,865
) Preferred dividends (6,278 ) (6,278 ) (25,115 ) (30,138 )
Redemption of preferred stock — —
— (6,096 ) Net loss attributable to FelCor
common stockholders $ (6,150 ) $ (10,434 ) $ (21,617 ) $ (45,099 )
Basic and diluted per common share data: Loss from continuing
operations $ (0.04 ) $ (0.07 ) $ (0.13 ) $ (0.33 ) Net loss $ (0.04
) $ (0.07 ) $ (0.16 ) $ (0.33 ) Basic and diluted weighted average
common shares outstanding 137,244 142,823
138,128 137,730
Consolidated Balance Sheets
(in thousands, except par values)
December 31, December 31, 2016
2015 Assets Investment in hotels, net of accumulated
depreciation of $932,886 and $899,575 at December 31, 2016 and
2015, respectively $ 1,566,823 $ 1,729,531 Investment in
unconsolidated entities 8,312 9,575 Cash and cash equivalents
47,317 59,786 Restricted cash 19,491 17,702 Accounts receivable,
net of allowance for doubtful accounts of $177 and $204 at December
31, 2016 and 2015, respectively 42,080 28,136 Deferred expenses,
net of accumulated amortization of $2,959 and $1,086 at December
31, 2016 and 2015, respectively 4,527 6,390 Other assets
18,542 14,792 Total assets $ 1,707,092
$ 1,865,912
Liabilities and Equity Debt, net of
unamortized debt issuance costs of $15,967 and $18,065 at December
31, 2016 and 2015, respectively $ 1,338,326 $ 1,409,889
Distributions payable 14,858 15,140 Accrued expenses and other
liabilities 116,437 125,274 Total
liabilities 1,469,621 1,550,303
Commitments and contingencies Redeemable noncontrolling interests
in FelCor LP, 610 and 611 units issued and outstanding at December
31, 2016 and 2015, respectively 4,888 4,464
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, 2016 and 2015 309,337 309,337 Common stock, $0.01 par
value, 200,000 shares authorized; 137,990 and 141,808 shares issued
and outstanding at December 31, 2016 and 2015 respectively 1,380
1,418 Additional paid-in capital 2,576,988 2,567,515 Accumulated
deficit (2,706,408 ) (2,618,117 ) Total FelCor
stockholders’ equity 181,297 260,153 Noncontrolling interests in
other partnerships 7,503 7,806 Preferred equity in consolidated
joint venture, liquidation value of $44,667 and $43,954 at December
31, 2016 and 2015, respectively 43,783 43,186
Total equity 232,583 311,145
Total liabilities and equity $ 1,707,092 $ 1,865,912
Consolidated Debt Summary
(dollars in thousands)
EncumberedHotels
InterestRate (%)
Maturity Date
December 31,2016
December 31,2015
Senior unsecured notes — 6.00 June 2025 $ 475,000 $ 475,000 Senior
secured notes 9 5.625 March 2023 525,000 525,000 Mortgage debt(a) 4
4.95 October 2022 120,109 122,237 Mortgage debt 1 4.94 October 2022
30,184 30,717 Line of credit(b) 7 LIBOR + 2.75 June 2019 119,000
190,000 Mortgage debt(c) 1 LIBOR + 3.00 November 2017 85,000
85,000
Total 22 $ 1,354,293 $ 1,427,954
Unamortized debt issuance costs (15,967 ) (18,065 )
Debt, net of unamortized debt issuance costs $ 1,338,326 $
1,409,889 (a) This debt is comprised of separate
non-cross-collateralized loans, each secured by a mortgage
encumbering a separate hotel. (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.
Schedule of
Encumbered Hotels
(dollars in millions)
Consolidated Debt December 31, 2016
Encumbered Hotels Senior secured notes $ 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 $
34 Ft. Lauderdale - ES Mortgage debt $ 23 Birmingham - ES Mortgage
debt $ 37 Minneapolis Airport - ES Mortgage debt $ 30 Deerfield
Beach - ES Line of credit $ 119 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
Mortgage debt $ 85 The Knickerbocker
Capital Expenditures
(dollars in thousands)
Three Months Ended Year Ended December
31, December 31, 2016 2015
2016 2015 Improvements and additions to
majority-owned hotels $ 22,937 $ 12,458 $ 74,264 $ 48,436 Partners’
pro rata share of additions to consolidated joint venture hotels
(16 ) (17 ) (349 ) (47 ) Pro rata share of additions to
unconsolidated hotels 46 1,231
656 3,791 Total additions to hotels(a) $
22,967 $ 13,672 $ 74,571 $ 52,180
(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,
December 31,
2016 2015 Common shares outstanding 137,990 141,808
Units outstanding 610 611 Combined
shares and units outstanding 138,600 142,419 Common stock price $
8.01 $ 7.30
Market capitalization $ 1,110,186
$ 1,039,659 Series A preferred stock(a) 321,987 321,987 Preferred
equity - Knickerbocker joint venture, net 41,594 41,027
Consolidated debt (b) 1,354,293 1,427,954 Noncontrolling interests
of consolidated debt (4,250 ) (4,250 ) Pro rata share of
unconsolidated debt 11,167 11,433 Cash, cash equivalents and
restricted cash (66,808 ) (77,488 )
Total
enterprise value (TEV) $ 2,768,169 $ 2,760,322
(a) Based on liquidation value. (b) Excludes unamortized
debt issuance costs.
Hotel Operating Statistics
Occupancy (%) ADR ($)
RevPAR ($)
Three Months EndedDecember
31,
Three Months EndedDecember
31,
Three Months EndedDecember
31,
Same-store Hotels 2016 2015
%Change 2016 2015
%Change 2016 2015
%Change Embassy Suites Atlanta-Buckhead 70.5
77.9 (9.5 ) 154.32 141.29 9.2 108.82 110.09 (1.2 ) DoubleTree
Suites by Hilton Austin 76.0 77.3 (1.8 ) 231.93 225.85 2.7 176.21
174.67 0.9 Embassy Suites Birmingham 74.5 77.6 (4.0 ) 139.01 134.05
3.7 103.51 103.96 (0.4 ) The Fairmont Copley Plaza, Boston 70.1
69.4 1.0 331.98 337.29 (1.6 ) 232.59 234.04 (0.6 ) Wyndham Boston
Beacon Hill 78.6 71.3 10.1 215.02 225.58 (4.7 ) 168.94 160.94 5.0
Embassy Suites Boston-Marlborough 58.8 69.6 (15.5 ) 167.47 172.41
(2.9 ) 98.50 119.98 (17.9 ) Sheraton Burlington Hotel &
Conference Center 73.6 79.1 (7.0 ) 112.93 108.59 4.0 83.07 85.91
(3.3 ) The Mills House Wyndham Grand Hotel, Charleston 72.0 74.6
(3.5 ) 224.41 214.07 4.8 161.61 159.70 1.2 Embassy Suites
Dallas-Love Field(1) 64.0 79.3 (19.3 ) 144.61 136.25 6.1 92.61
108.10 (14.3 ) Embassy Suites Deerfield Beach-Resort & Spa 68.4
77.7 (12.0 ) 185.31 187.41 (1.1 ) 126.74 145.67 (13.0 ) Embassy
Suites Fort Lauderdale 17th Street 81.8 84.0 (2.6 ) 169.65 164.25
3.3 138.78 137.97 0.6 Wyndham Houston-Medical Center Hotel &
Suites 67.4 80.9 (16.7 ) 135.82 146.83 (7.5 ) 91.51 118.81 (23.0 )
Embassy Suites Los Angeles-International Airport/South 81.2 77.5
4.8 157.94 150.68 4.8 128.24 116.71 9.9 Embassy Suites Mandalay
Beach-Hotel & Resort 74.2 70.9 4.6 191.22 186.04 2.8 141.88
131.98 7.5 Embassy Suites Miami-International Airport 79.6 85.7
(7.1 ) 138.50 151.60 (8.6 ) 110.30 129.90 (15.1 ) Embassy Suites
Milpitas-Silicon Valley 76.7 79.1 (3.0 ) 193.58 191.93 0.9 148.54
151.76 (2.1 ) Embassy Suites Minneapolis-Airport 70.1 74.5 (5.9 )
151.08 144.55 4.5 105.92 107.72 (1.7 ) Embassy Suites Myrtle
Beach-Oceanfront Resort 58.3 66.1 (11.8 ) 121.03 116.71 3.7 70.57
77.16 (8.5 ) Hilton Myrtle Beach Resort 39.7 44.7 (11.2 ) 102.64
99.74 2.9 40.73 44.56 (8.6 ) Embassy Suites Napa Valley 74.8 84.6
(11.5 ) 247.93 224.13 10.6 185.50 189.52 (2.1 ) Wyndham New
Orleans-French Quarter 71.3 74.0 (3.6 ) 145.30 147.77 (1.7 ) 103.65
109.34 (5.2 ) Morgans New York 89.6 86.2 4.0 290.10 318.76 (9.0 )
259.89 274.63 (5.4 ) Royalton New York 87.3 89.7 (2.7 ) 323.35
343.46 (5.9 ) 282.22 308.22 (8.4 ) Embassy Suites
Orlando-International Drive South/Convention Center(1) 61.1 81.6
(25.2 ) 149.54 141.86 5.4 91.33 115.80 (21.1 ) DoubleTree Suites by
Hilton Orlando-Lake Buena Vista 84.9 90.7 (6.3 ) 144.38 146.75 (1.6
) 122.59 133.04 (7.9 ) Wyndham Philadelphia Historic District 73.0
63.2 15.5 144.17 162.07 (11.0 ) 105.26 102.41 2.8 Sheraton
Philadelphia Society Hill Hotel 68.1 69.3 (1.7 ) 176.41 177.81 (0.8
) 120.12 123.18 (2.5 ) Embassy Suites Phoenix-Biltmore 61.3 67.5
(9.2 ) 170.84 176.23 (3.1 ) 104.73 118.92 (11.9 ) Wyndham
Pittsburgh University Center 64.5 62.8 2.7 144.88 144.02 0.6 93.39
90.40 3.3 Wyndham San Diego Bayside 71.0 70.3 1.1 151.87 141.20 7.6
107.88 99.20 8.7 Embassy Suites San Francisco Airport-South San
Francisco 87.7 86.0 2.0 190.79 193.41 (1.4 ) 167.39 166.35 0.6
Embassy Suites San Francisco Airport-Waterfront 89.2 85.3 4.6
198.05 196.16 1.0 176.64 167.25 5.6 Holiday Inn San
Francisco-Fisherman’s Wharf 81.5 82.0 (0.7 ) 194.51 191.05 1.8
158.52 156.72 1.1 San Francisco Marriott Union Square 85.0 83.1 2.3
278.46 282.69 (1.5 ) 236.75 234.97 0.8 Wyndham Santa Monica At the
Pier 78.3 75.0 4.4 262.90 237.38 10.7 205.85 178.05 15.6 Embassy
Suites Secaucus-Meadowlands 75.2 75.0 0.3 175.56 183.96 (4.6 )
132.05 138.02 (4.3 ) The Vinoy Renaissance St. Petersburg Resort
& Golf Club 74.8 77.4 (3.4 ) 210.29 201.45 4.4 157.26
155.89 0.9
Same-store Hotels 73.2 75.7
(3.2 ) 184.46 182.20 1.2
135.04 137.86 (2.0 )
(1) Hotel under renovation in 2016.
Hotel Operating Statistics
Occupancy (%) ADR ($)
RevPAR ($) Year Ended December 31, Year Ended
December 31, Year Ended December 31, Same-store
Hotels 2016 2015
%Change 2016 2015
%Change 2016 2015
%Change Embassy Suites Atlanta-Buckhead 77.3 79.5 (2.7 )
156.50 147.51 6.1 121.04 117.30 3.2 DoubleTree Suites by Hilton
Austin 81.3 81.8 (0.6 ) 221.70 221.63 — 180.33 181.35 (0.6 )
Embassy Suites Birmingham 77.9 79.0 (1.3 ) 137.76 134.07 2.7 107.35
105.86 1.4 The Fairmont Copley Plaza, Boston 76.0 75.5 0.5 325.88
326.70 (0.3 ) 247.52 246.81 0.3 Wyndham Boston Beacon Hill 79.0
79.2 (0.2 ) 228.49 234.42 (2.5 ) 180.61 185.60 (2.7 ) Embassy
Suites Boston-Marlborough 68.6 74.9 (8.5 ) 171.81 171.10 0.4 117.81
128.20 (8.1 ) Sheraton Burlington Hotel & Conference Center
74.4 75.2 (1.1 ) 119.86 116.52 2.9 89.14 87.64 1.7 The Mills House
Wyndham Grand Hotel, Charleston 81.6 81.1 0.6 228.13 222.42 2.6
186.26 180.45 3.2 Embassy Suites Dallas-Love Field(1) 73.6 87.9
(16.2 ) 142.57 132.52 7.6 104.91 116.42 (9.9 ) Embassy Suites
Deerfield Beach-Resort & Spa 76.9 80.2 (4.2 ) 199.23 200.97
(0.9 ) 153.13 161.22 (5.0 ) Embassy Suites Fort Lauderdale 17th
Street 83.6 84.8 (1.4 ) 174.15 165.76 5.1 145.59 140.55 3.6 Wyndham
Houston-Medical Center Hotel & Suites 76.4 81.5 (6.2 ) 145.35
150.80 (3.6 ) 111.07 122.87 (9.6 ) Embassy Suites Los
Angeles-International Airport/South 86.2 81.3 6.0 169.72 159.93 6.1
146.27 129.98 12.5 Embassy Suites Mandalay Beach-Hotel & Resort
80.5 78.0 3.2 227.22 212.81 6.8 182.82 165.97 10.1 Embassy Suites
Miami-International Airport 85.0 88.3 (3.8 ) 146.80 151.72 (3.2 )
124.76 133.98 (6.9 ) Embassy Suites Milpitas-Silicon Valley 81.5
82.4 (1.1 ) 201.81 195.17 3.4 164.57 160.88 2.3 Embassy Suites
Minneapolis-Airport 75.4 77.1 (2.3 ) 156.54 150.93 3.7 117.95
116.38 1.4 Embassy Suites Myrtle Beach-Oceanfront Resort 74.2 74.4
(0.2 ) 176.68 172.30 2.5 131.18 128.12 2.4 Hilton Myrtle Beach
Resort 61.6 64.1 (4.0 ) 146.09 140.45 4.0 89.95 90.09 (0.2 )
Embassy Suites Napa Valley 80.9 83.8 (3.4 ) 242.71 232.95 4.2
196.36 195.12 0.6 Wyndham New Orleans-French Quarter 72.2 68.9 4.9
146.18 150.70 (3.0 ) 105.60 103.77 1.8 Morgans New York 84.9 82.4
3.1 265.31 282.65 (6.1 ) 225.28 232.79 (3.2 ) Royalton New York
83.9 86.7 (3.2 ) 291.17 303.39 (4.0 ) 244.42 263.02 (7.1 ) Embassy
Suites Orlando-International Drive South/Convention Center(1) 70.0
83.9 (16.5 ) 148.73 146.67 1.4 104.15 122.99 (15.3 ) DoubleTree
Suites by Hilton Orlando-Lake Buena Vista 88.2 89.4 (1.3 ) 141.13
139.63 1.1 124.54 124.89 (0.3 ) Wyndham Philadelphia Historic
District 74.4 64.3 15.7 153.83 160.43 (4.1 ) 114.49 103.22 10.9
Sheraton Philadelphia Society Hill Hotel 71.0 69.0 2.8 181.94
174.72 4.1 129.09 120.54 7.1 Embassy Suites Phoenix-Biltmore 68.0
71.4 (4.8 ) 180.19 175.83 2.5 122.60 125.60 (2.4 ) Wyndham
Pittsburgh University Center 69.1 71.1 (2.8 ) 145.80 145.55 0.2
100.76 103.53 (2.7 ) Wyndham San Diego Bayside 78.1 78.1 — 151.72
147.63 2.8 118.47 115.33 2.7 Embassy Suites San Francisco
Airport-South San Francisco 88.3 88.4 (0.1 ) 203.47 200.69 1.4
179.70 177.46 1.3 Embassy Suites San Francisco Airport-Waterfront
89.7 86.4 3.8 208.23 207.60 0.3 186.75 179.35 4.1 Holiday Inn San
Francisco-Fisherman’s Wharf 86.5 86.2 0.3 210.92 208.90 1.0 182.47
180.10 1.3 San Francisco Marriott Union Square 89.3 86.8 2.9 294.41
288.45 2.1 263.03 250.49 5.0 Wyndham Santa Monica At the Pier 86.1
83.9 2.7 278.40 255.40 9.0 239.83 214.26 11.9 Embassy Suites
Secaucus-Meadowlands 72.7 76.0 (4.3 ) 179.80 184.97 (2.8 ) 130.75
140.57 (7.0 ) The Vinoy Renaissance St. Petersburg Resort &
Golf Club 80.7 81.9 (1.4 ) 219.22 210.49 4.1 177.00 172.39
2.7
Same-store Hotels 78.5 79.3
(0.9 ) 191.14 187.74 1.8
150.11 148.81 0.9
(1) Hotel under renovation in 2016.
Historical Quarterly Operating
Statistics
Occupancy (%) Q4 2015 Q1
2016 Q2 2016 Q3 2016
Q4 2016 Same-store hotels(a)
75.7 76.4 82.8 81.8 73.2
ADR ($) Q4 2015 Q1
2016 Q2 2016 Q3 2016 Q4 2016 Same-store
hotels(a) 182.20 188.04 195.79 195.33 184.46
RevPAR ($) Q4 2015 Q1 2016 Q2 2016
Q3 2016 Q4 2016 Same-store hotels(a)
137.86 143.65 162.03 159.78 135.04 (a) Includes 37
consolidated hotels and excludes 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, 2016
2015 Dollars Shares
PerShareAmount
Dollars Shares
PerShareAmount
Net income (loss) $ 398 $ (4,081 ) Noncontrolling interests
98 292 Preferred dividends (6,278 ) (6,278 ) Preferred
distributions - consolidated joint venture (368 )
(367 )
Net loss attributable to FelCor common stockholders
(6,150 ) (10,434 ) Less: Dividends declared on unvested restricted
stock (21 ) (16 )
Basic and diluted earnings per
share data (6,171 ) 137,244 $ (0.04 ) (10,450 ) 142,823 $ (0.07
) Depreciation and amortization 27,414 — 0.20 28,942 — 0.20
Depreciation, unconsolidated entities and other partnerships 453 —
— 480 — — Gain on sale of hotel in unconsolidated entity — — — (14
) — — Loss (gain) on sale of hotels, net of noncontrolling
interests in other partnerships 332 — — (165 ) — — Other gains (242
) — — — — — Noncontrolling interests in FelCor LP (26 ) 610 — (44 )
611 — Dividends declared on unvested restricted stock 21 27 — 16 10
— Conversion of unvested restricted stock units — 305
— — 603 —
FFO*
21,781 138,186 0.16 18,765 144,047 0.13 Hurricane loss 688 — — — —
— Hurricane loss, unconsolidated entities 45 — — — — — Severance
costs 723 — 0.01 43 — — Lease adjustment — — — 1,628 — 0.01
Abandoned projects — — — 320 — — Variable stock compensation 83 — —
959 — 0.01 Litigation settlement 3 — — — — — Pre-opening costs, net
of noncontrolling interests 156 — —
110 — —
Adjusted FFO* $ 23,479
138,186 $ 0.17 $ 21,825 144,047 $ 0.15
* FFO and Adjusted FFO are attributable to FelCor common
stockholders and FelCor LP common unitholders other than FelCor.
Reconciliation of Net Income (Loss) to FFO
and Adjusted FFO
(in thousands, except per share data)
Year Ended December 31, 2016
2015 Dollars Shares
PerShareAmount
Dollars Shares
PerShareAmount
Net income (loss) $ 4,193 $ (3,465 ) Noncontrolling
interests 766 (3,963 ) Preferred distributions - consolidated joint
venture (1,461 ) (1,437 ) Redemption of preferred stock — (6,096 )
Preferred dividends (25,115 ) (30,138 )
Net loss
attributable to FelCor common stockholders (21,617 ) (45,099 )
Less: Dividends declared on unvested restricted stock (129 )
(56 )
Basic and diluted earnings per share data
(21,746 ) 138,128 $ (0.16 ) (45,155 ) 137,730 $ (0.33 )
Depreciation and amortization 114,054 — 0.83 114,452 — 0.83
Depreciation, unconsolidated entities and other partnerships 1,844
— 0.01 2,211 — 0.02 Other gains (342 ) — — (100 ) — — Impairment
26,459 — 0.19 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 (3,191 ) — (0.03 )
(15,096 ) — (0.12 ) Noncontrolling interests in FelCor LP (93 ) 611
— (194 ) 611 — Dividends declared on unvested restricted stock 129
— — 56 4 — Conversion of unvested restricted stock units —
155 — — 488 —
FFO* 117,114 138,894 0.84 69,909 138,833 0.50 Hurricane loss
740 — 0.01 — — — Hurricane loss, unconsolidated entities 45 — — — —
— Debt extinguishment — — — 30,909 — 0.22 Debt extinguishment,
unconsolidated entities — — — 330 — — Severance costs 6,874 — 0.06
3,667 — 0.03 Lease adjustment — — — 1,628 — 0.01 Abandoned projects
620 — — 320 — — Variable stock compensation 450 — — 798 — 0.01
Redemption of preferred stock — — — 6,096 — 0.05 Contract dispute
recovery — — — (3,717 ) — (0.03 ) Litigation settlement 856 — 0.01
— — — Pre-opening costs, net of noncontrolling interests 527
— — 5,235 — 0.04
Adjusted FFO* $ 127,226 138,894 $ 0.92 $
115,175 138,833 $ 0.83 * FFO and Adjusted FFO
are attributable to FelCor common stockholders and FelCor LP common
unitholders other than FelCor.
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, 2016 2015
2016 2015 Net income (loss) $
398 $ (4,081 ) $ 4,193 $ (3,465 ) Depreciation and amortization
27,414 28,942 114,054 114,452 Depreciation, unconsolidated entities
and other partnerships 453 480 1,844 2,211 Interest expense 19,143
19,764 78,244 79,142 Interest expense, unconsolidated entities and
other partnerships 86 82 366 521 Income tax 729 (147 ) 873 1,245
Noncontrolling interests in preferred distributions, consolidated
joint venture (18 ) (71 ) (73 ) (71 ) Noncontrolling interests in
other partnerships 72 248 673
(4,157 )
EBITDA* 48,277 45,217 200,174 189,878
Impairment — — 26,459 20,861 Hurricane loss 688 — 740 — Hurricane
loss, unconsolidated entities 45 — 45 — Debt extinguishment — — —
30,909 Debt extinguishment, unconsolidated entities — — — 330 Gain
on sale of hotel in unconsolidated entity — (14 ) — (7,126 ) Loss
(gain) on sale of hotels, net of noncontrolling interests in other
partnerships 332 (165 ) (3,191 ) (15,096 ) Other gains (242 ) —
(342 ) (100 ) Amortization of fixed stock and directors’
compensation 1,300 1,907 6,638 7,121 Severance costs 723 43 6,874
3,667 Lease adjustment — 1,628 — 1,628 Abandoned projects — 320 620
320 Variable stock compensation 83 959 450 798 Contract dispute
recovery — — — (3,717 ) Litigation settlement 3 — 856 — Pre-opening
costs, net of noncontrolling interests 156 110
527 5,235
Adjusted
EBITDA* 51,365 50,005 239,850 234,708 Adjusted EBITDA from
hotels disposed and recently opened (3,988 ) (729 )
(18,077 ) (15,193 )
Same-store Adjusted
EBITDA* $ 47,377 $ 49,276 $ 221,773 $
219,515 * EBITDA, Adjusted EBITDA and Same-store
Adjusted EBITDA are attributable to FelCor common stockholders and
FelCor LP unitholders other than FelCor.
Hotel EBITDA and Hotel EBITDA Margin
(dollars in thousands)
Three Months Ended Year Ended December
31, December 31, 2016 2015
2016 2015 Same-store operating
revenue: Room $ 136,649 $ 139,498 $ 604,280 $ 597,423 Food and
beverage 34,906 35,876 132,433 131,874 Other operating departments
10,548 11,162 43,818
42,806
Same-store operating revenue 182,103
186,536 780,531 772,103
Same-store operating expense:
Room 36,650 37,062 154,562 150,966 Food and beverage 25,229 25,816
100,111 99,363 Other operating departments 3,458 3,786 14,309
15,552 Other property related costs 45,258 46,459 190,591 189,869
Management and franchise fees 6,754 7,475 30,362 31,155 Taxes,
insurance and lease expense 12,545 11,948
51,832 47,744
Same-store
operating expense 129,894 132,546
541,767 534,649
Hotel EBITDA $
52,209 $ 53,990 $ 238,764 $ 237,454
Hotel EBITDA Margin 28.7 % 28.9 % 30.6 % 30.8 %
The following tables set forth the components of our Hotel
EBITDA for our same-store hotels (dollars in thousands):
Three months
ended December 31, 2016
Same-store
Hotels
Hotel OperatingRevenue
Net Income(Loss)
OtherAdjustments
Depreciation
InterestExpense
HotelEBITDA
Hotel EBITDAMargin
Embassy Suites Atlanta-Buckhead $ 3,486 $ 894 $ — $ 523 $ — $ 1,417
40.6 % DoubleTree Suites by Hilton Austin 3,608 1,096 (242 ) 469
130 1,453 40.3 % Embassy Suites Birmingham 2,476 251 — 400 297 948
38.3 % The Fairmont Copley Plaza, Boston 15,602 537 — 2,233 332
3,102 19.9 % Wyndham Boston Beacon Hill 5,528 1,363 — 989 — 2,352
42.5 % Embassy Suites Boston-Marlborough 2,387 271 — 290 — 561 23.5
% Sheraton Burlington Hotel & Conference Center 3,857 703 — 619
— 1,322 34.3 % The Mills House Wyndham Grand Hotel, Charleston
4,571 1,083 66 634 171 1,954 42.7 % Embassy Suites Dallas-Love
Field 2,532 264 — 366 — 630 24.9 % Embassy Suites Deerfield
Beach-Resort & Spa 3,768 310 2 463 398 1,173 31.1 % Embassy
Suites Fort Lauderdale 17th Street 5,658 673 — 694 447 1,814 32.1 %
Wyndham Houston-Medical Center Hotel & Suites 2,772 614 (19 )
538 — 1,133 40.9 % Embassy Suites Los Angeles-International
Airport/South 5,110 1,033 — 629 195 1,857 36.3 % Embassy Suites
Mandalay Beach-Hotel & Resort 4,546 733 — 774 — 1,507 33.2 %
Embassy Suites Miami-International Airport 3,954 428 — 459 — 887
22.4 % Embassy Suites Milpitas-Silicon Valley 4,488 1,418 — 303 —
1,721 38.3 % Embassy Suites Minneapolis-Airport 3,167 208 — 386 473
1,067 33.7 % Embassy Suites Myrtle Beach-Oceanfront Resort 3,522
(619 ) 275 653 — 309 8.8 % Hilton Myrtle Beach Resort 2,999 (1,020
) 326 893 — 199 6.6 % Embassy Suites Napa Valley 4,101 892 — 494
345 1,731 42.2 % Wyndham New Orleans-French Quarter 4,005 1,325 —
717 — 2,042 51.0 % Morgans New York 3,131 146 95 503 — 744 23.8 %
Royalton New York 5,980 (121 ) 128 596 — 603 10.1 % Embassy Suites
Orlando-International Drive South/Convention Center 2,116 190 — 284
— 474 22.4 % DoubleTree Suites by Hilton Orlando-Lake Buena Vista
3,191 136 — 771 — 907 28.4 % Wyndham Philadelphia Historic District
4,396 1,006 — 721 — 1,727 39.3 % Sheraton Philadelphia Society Hill
Hotel 6,346 746 — 970 — 1,716 27.0 % Embassy Suites
Phoenix-Biltmore 2,338 296 — 431 — 727 31.1 % Wyndham Pittsburgh
University Center 2,853 515 — 501 — 1,016 35.6 % Wyndham San Diego
Bayside 7,426 405 — 1,566 — 1,971 26.5 % Embassy Suites San
Francisco Airport-South San Francisco 5,762 1,510 — 437 — 1,947
33.8 % Embassy Suites San Francisco Airport-Waterfront 6,761 1,477
3 770 — 2,250 33.3 % Holiday Inn San Francisco-Fisherman’s Wharf
9,598 420 — 572 — 992 10.3 % San Francisco Marriott Union Square
10,052 815 (1 ) 1,310 399 2,523 25.1 % Wyndham Santa Monica at the
Pier 2,700 1,016 — 269 135 1,420 52.6 % Embassy Suites
Secaucus-Meadowlands 3,306 478 1 101 — 580 17.5 % The Vinoy
Renaissance St. Petersburg Resort & Golf Club 14,010
1,518 176 1,455
284 3,433 24.5 %
$ 182,103 $
23,010 $ 810 $
24,783 $ 3,606 $ 52,209
28.7 %
Three months
ended December 31, 2015
Same-store
Hotels
Hotel OperatingRevenue
Net Income(Loss)
OtherAdjustments
Depreciation
InterestExpense
HotelEBITDA
Hotel EBITDAMargin
Embassy Suites Atlanta-Buckhead $ 3,552 $ 743 $ — $ 648 $ — $ 1,391
39.2 % DoubleTree Suites by Hilton Austin 3,516 785 — 484 165 1,434
40.8 % Embassy Suites Birmingham 2,484 241 — 388 303 932 37.5 % The
Fairmont Copley Plaza, Boston 15,427 1,163 — 2,172 423 3,758 24.4 %
Wyndham Boston Beacon Hill 5,309 944 (4 ) 991 — 1,931 36.4 %
Embassy Suites Boston-Marlborough 2,896 608 — 291 — 899 31.0 %
Sheraton Burlington Hotel & Conference Center 3,933 778 — 615 —
1,393 35.4 % The Mills House Wyndham Grand Hotel, Charleston 4,594
910 — 635 224 1,769 38.5 % Embassy Suites Dallas-Love Field 2,917
523 — 336 — 859 29.4 % Embassy Suites Deerfield Beach-Resort &
Spa 4,396 644 — 480 404 1,528 34.8 % Embassy Suites Fort Lauderdale
17th Street 5,725 720 — 718 455 1,893 33.1 % Wyndham
Houston-Medical Center Hotel & Suites 3,458 881 (19 ) 545 4
1,411 40.8 % Embassy Suites Los Angeles-International Airport/South
4,591 818 — 645 248 1,711 37.3 % Embassy Suites Mandalay
Beach-Hotel & Resort 4,166 585 — 774 7 1,366 32.8 % Embassy
Suites Miami-International Airport 4,590 741 — 477 6 1,224 26.7 %
Embassy Suites Milpitas-Silicon Valley 4,528 1,411 — 303 — 1,714
37.9 % Embassy Suites Minneapolis-Airport 3,243 173 — 447 481 1,101
34.0 % Embassy Suites Myrtle Beach-Oceanfront Resort 4,021 (74 ) —
678 8 612 15.2 % Hilton Myrtle Beach Resort 3,161 (527 ) — 845 —
318 10.1 % Embassy Suites Napa Valley 4,305 855 — 516 352 1,723
40.0 % Wyndham New Orleans-French Quarter 4,890 1,745 — 721 — 2,466
50.4 % Morgans New York 3,108 (149 ) 1 624 — 476 15.3 % Royalton
New York 6,236 465 1 575 — 1,041 16.7 % Embassy Suites
Orlando-International Drive South/Convention Center 2,705 695 — 272
— 967 35.7 % DoubleTree Suites by Hilton Orlando-Lake Buena Vista
3,403 329 — 772 — 1,101 32.4 % Wyndham Philadelphia Historic
District 4,575 696 (1 ) 751 6 1,452 31.7 % Sheraton Philadelphia
Society Hill Hotel 6,640 688 — 981 — 1,669 25.1 % Embassy Suites
Phoenix-Biltmore 2,656 551 — 440 — 991 37.3 % Wyndham Pittsburgh
University Center 2,774 (1,252 ) 1,628
(1)
518 5 899 32.4 % Wyndham San Diego Bayside 7,194 (31 ) — 1,576 —
1,545 21.5 % Embassy Suites San Francisco Airport-South San
Francisco 5,918 1,585 — 398 — 1,983 33.5 % Embassy Suites San
Francisco Airport-Waterfront 6,406 1,378 — 747 — 2,125 33.2 %
Holiday Inn San Francisco-Fisherman’s Wharf 9,426 521 — 430 — 951
10.1 % San Francisco Marriott Union Square 10,089 703 (1 ) 1,410
509 2,621 26.0 % Wyndham Santa Monica at the Pier 2,378 595 — 291
179 1,065 44.8 % Embassy Suites Secaucus-Meadowlands 3,470 609 —
116 — 725 20.9 % The Vinoy Renaissance St. Petersburg Resort &
Golf Club 13,856 1,124 2
1,458 362 2,946 21.3 %
$ 186,536
$ 23,174 $ 1,607
$ 25,068 $ 4,141 $ 53,990
28.9 %
* Footnotes on page 22
Year ended
December 31, 2016
Same-store
Hotels
Hotel OperatingRevenue
Net Income(Loss)
OtherAdjustments
Depreciation
InterestExpense
HotelEBITDA
Hotel EBITDAMargin
Embassy Suites Atlanta-Buckhead $ 15,371 $ 4,009 $ — $ 2,297 $ — $
6,306 41.0 % DoubleTree Suites by Hilton Austin 14,759 3,890 (242 )
1,928 657 6,233 42.2 % Embassy Suites Birmingham 10,149 960 1 1,578
1,191 3,730 36.8 % The Fairmont Copley Plaza, Boston 59,099 1,019
(91 ) 8,827 1,681 11,436 19.4 % Wyndham Boston Beacon Hill 22,821
5,584 — 3,954 — 9,538 41.8 % Embassy Suites Boston-Marlborough
11,193 2,207 — 1,178 — 3,385 30.2 % Sheraton Burlington Hotel &
Conference Center 15,020 1,972 — 2,478 — 4,450 29.6 % The Mills
House Wyndham Grand Hotel, Charleston 20,538 5,439 66 2,529 865
8,899 43.3 % Embassy Suites Dallas-Love Field 10,948 1,715 — 1,423
— 3,138 28.7 % Embassy Suites Deerfield Beach-Resort & Spa
17,405 2,609 2 1,887 1,593 6,091 35.0 % Embassy Suites Fort
Lauderdale 17th Street 23,081 3,074 1 2,809 1,792 7,676 33.3 %
Wyndham Houston-Medical Center Hotel & Suites 13,278 3,798 (76
) 2,173 — 5,895 44.4 % Embassy Suites Los Angeles-International
Airport/South 22,483 5,402 — 2,535 986 8,923 39.7 % Embassy Suites
Mandalay Beach-Hotel & Resort 21,875 5,566 — 3,090 — 8,656 39.6
% Embassy Suites Miami-International Airport 17,587 2,566 — 1,849 —
4,415 25.1 % Embassy Suites Milpitas-Silicon Valley 18,671 6,058 —
1,207 — 7,265 38.9 % Embassy Suites Minneapolis-Airport 13,959
1,494 1 1,687 1,893 5,075 36.4 % Embassy Suites Myrtle
Beach-Oceanfront Resort 22,754 3,249 508 2,639 — 6,396 28.1 %
Hilton Myrtle Beach Resort 21,562 3,364 326 3,511 — 7,201 33.4 %
Embassy Suites Napa Valley 17,227 3,676 1 2,038 1,384 7,099 41.2 %
Wyndham New Orleans-French Quarter 16,163 4,478 — 2,880 — 7,358
45.5 % Morgans New York 10,411 (22,653 ) 20,612
(2)
2,415 — 374 3.6 % Royalton New York 20,021 (3,074 ) 565 2,349 —
(160 ) (0.8 )% Embassy Suites Orlando-International Drive
South/Convention Center 9,743 1,618 — 1,099 — 2,717 27.9 %
DoubleTree Suites by Hilton Orlando-Lake Buena Vista 12,894 429 —
3,088 — 3,517 27.3 % Wyndham Philadelphia Historic District 19,117
4,219 10 2,932 — 7,161 37.5 % Sheraton Philadelphia Society Hill
Hotel 26,906 4,016 — 3,897 — 7,913 29.4 % Embassy Suites
Phoenix-Biltmore 11,038 2,207 — 1,731 — 3,938 35.7 % Wyndham
Pittsburgh University Center 11,770 1,823 3 2,043 — 3,869 32.9 %
Wyndham San Diego Bayside 31,589 3,092 — 6,253 — 9,345 29.6 %
Embassy Suites San Francisco Airport-South San Francisco 24,348
7,136 — 1,681 — 8,817 36.2 % Embassy Suites San Francisco
Airport-Waterfront 27,655 5,744 856 3,046 — 9,646 34.9 % Holiday
Inn San Francisco-Fisherman’s Wharf 43,483 5,062 — 2,090 — 7,152
16.4 % San Francisco Marriott Union Square 43,662 6,072 (106 )
5,314 2,022 13,302 30.5 % Wyndham Santa Monica at the Pier 12,619
5,163 1 1,100 682 6,946 55.0 % Embassy Suites Secaucus-Meadowlands
13,130 1,747 2 444 — 2,193 16.7 % The Vinoy Renaissance St.
Petersburg Resort & Golf Club 56,202 5,093
590 5,749 1,437 12,869
22.9 %
$ 780,531 $ 99,823
$ 23,030 $ 99,728
$ 16,183 $ 238,764 30.6
%
* Footnotes on page 22
Year Ended
December 31, 2015
Same-store
Hotels
Hotel OperatingRevenue
Net Income(Loss)
OtherAdjustments
Depreciation
InterestExpense
HotelEBITDA
Hotel EBITDAMargin
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 1 1,567
1,208 3,708 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 — 1,162 — 3,999 33.1 % Sheraton Burlington Hotel &
Conference Center 14,486 1,791 — 2,416 — 4,207 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 12,123 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 1 2,939 1,817 7,289 32.6 %
Wyndham Houston-Medical Center Hotel & Suites 14,401 3,941 (69
) 2,164 214 6,250 43.4 % Embassy Suites Los Angeles-International
Airport/South 19,925 4,896 — 2,611 636 8,143 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 — 1,231 — 7,076 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 24 2,854 376
6,331 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 % Wyndham New Orleans-French Quarter 16,627 3,586
537 2,852 529 7,504 45.1 % Morgans New York 10,345 (2,281 ) 1 2,482
— 202 2.0 % Royalton New York 20,874 (1,388 ) 1 2,270 — 883 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 18 3,087 293 5,529 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 (221 )
1,644
(1)
2,119 256 3,798 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)
2,978 — 9,308 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 1,062
(4)
5,655 2,472 14,887 35.2 % Wyndham Santa Monica at the Pier 11,293
3,962 24 1,137 812 5,935 52.6 % Embassy Suites Secaucus-Meadowlands
14,127 2,710 5 521 — 3,236 22.9 % The Vinoy Renaissance St.
Petersburg Resort & Golf Club 54,703 4,622
2 5,790 927 11,341 20.7 %
$ 772,103 $ 118,601 $
(152 ) $ 101,145 $ 17,860
$ 237,454 30.8 % The following
are footnotes to the Hotel EBITDA tables on pages 20 - 22: (1)
Amount primarily represents an adjustment to straight-line expense
from prior years for a ground lease associated with this hotel. (2)
Amount primarily represents an impairment. (3) Amount represents
net revenue attributable to a favorable settlement of a commercial
dispute. (4) Amount primarily represents debt extinguishment
charges.
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, 2016 2015
2016 2015 Same-store operating revenue
$ 182,103 $ 186,536 $ 780,531 $ 772,103 Other revenue 495 741 4,136
7,883 Revenue from hotels disposed and recently opened (a)
13,325 19,027 82,287
106,268
Total revenue 195,923 206,304 866,954 886,254
Same-store operating expense 129,894 132,546 541,767 534,649
Consolidated hotel lease expense(b) 1,248 1,345 4,896 7,107
Unconsolidated taxes, insurance and lease expense (498 ) (512 )
(1,983 ) (2,194 ) Lease adjustment — 1,628 — 1,628 Corporate
expenses 6,346 7,508 27,037 27,283 Depreciation and amortization
27,414 28,942 114,054 114,452 Impairment — — 26,459 20,861 Expenses
from hotels disposed and recently opened(a) 9,133 18,320 63,802
90,276 Other expenses 2,189 1,033
12,740 12,479
Total operating
expense 175,726 190,810
788,772 806,541
Operating income $
20,197 $ 15,494 $ 78,182 $ 79,713
(a) 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 2017 Guidance Low
High Dollars
Per
ShareAmount(a)
Dollars
Per
ShareAmount(a)
Net income attributable to FelCor(b) $ 33.9 $ 40.4
Preferred dividends (25.1 ) (25.1 )
Net income
attributable to FelCor common stockholders 8.8 $ 0.06 15.3 $
0.11 Depreciation(c) 105.8 108.8 Noncontrolling interests in FelCor
LP — 0.1
FFO and Adjusted FFO* $
114.6 $ 0.83 $ 124.2 $ 0.90
Net income
attributable to FelCor(b) $ 33.9 $ 40.4 Depreciation(c)
105.8 108.8 Noncontrolling interests in FelCor LP — 0.1 Interest
expense(c) 76.3 78.5 Income tax 0.9 0.9 Preferred distributions -
consolidated joint venture 1.2 1.4
EBITDA* $ 218.1 $ 230.1 Amortization of fixed stock and
directors’ compensation 5.9 5.9
Adjusted EBITDA* $ 224.0 $ 236.0 (a)
Weighted average shares are 138.6 million. (b) Excludes any gains
or losses on future asset or capital transactions. (c) Includes pro
rata portion of unconsolidated entities. * FFO, Adjusted FFO,
EBITDA and Adjusted EBITDA are attributable to FelCor common
stockholders and FelCor LP unitholders other than FelCor.
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 is 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 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 Adjusted FFO and Adjusted 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 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 brands/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 regarding 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 hotel 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, and 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 any single financial measure.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170223005326/en/
FelCor Lodging Trust IncorporatedAbi Salami,
972-444-4967Manager, Investor Relationsasalami@felcor.com
Felcor Lodging (NYSE:FCH)
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