IRVING, Texas, Aug. 8 /PRNewswire-FirstCall/ -- FelCor Lodging
Trust Incorporated (NYSE:FCH), one of the nation's largest hotel
real estate investment trusts (REITs), today reported operating
results for the second quarter and six months ended June 30, 2006.
Second Quarter Results: * Revenue Per Available Room ("RevPAR")
increased 8.4 percent, compared to the same period in 2005. Average
Daily Rate ("ADR") increased 8.2 percent. * Hotel Earnings Before
Interest, Taxes, Depreciation and Amortization ("Hotel EBITDA")
increased to $92.6 million, compared to $80.7 million in the prior
year quarter, an increase of 14.7 percent. Hotel EBITDA margin was
30.0 percent, representing a 178 basis point improvement to the
prior year. * Displacement from major renovations caused reductions
to RevPAR (approximately 1 percent) and EBITDA (approximately $1.6
million), which negatively affected Hotel EBITDA margin by
approximately 35 basis points. * Adjusted Funds From Operations
("FFO") was $42.1 million, an $8.1 million increase from the prior
year period. Adjusted FFO per share increased to $0.67, compared to
$0.54 in the prior year quarter, an increase of 24 percent. *
Same-Store EBITDA increased by $10.5 million, to $82.2 million, or
14.7 percent to prior year. Adjusted EBITDA (including sold hotels)
increased $3.3 million, to $83.8 million, or 4.1 percent to prior
year. * Net income was $10 million for both second quarter 2006 and
2005. Net income applicable to common stockholders was $0.5
million, or $0.01 per share, compared to a net loss applicable to
common stockholders of $4.7 million, or $0.08 per share, in the
second quarter of 2005. Six Month Results: * RevPAR increased 11.5
percent, compared to the same period in 2005. ADR increased 8.2
percent. * Hotel EBITDA increased to $176.6 million, compared to
$145.0 million in the prior year period, an increase of 21.8
percent. Hotel EBITDA margin was 29.2 percent, representing a 241
basis point improvement to the prior year. * Displacement from
major renovations caused reductions to RevPAR (approximately 1
percent) and EBITDA (approximately $2.9 million), which negatively
affected Hotel EBITDA margin by approximately 30 basis points. *
Adjusted FFO was $74.1 million, a $24.5 million increase from the
prior year period. Adjusted FFO per share increased to $1.18,
compared to $0.79 in the prior year period, an increase of 49
percent. * Same-Store EBITDA increased by $29.1 million, to $156.1
million, or 22.9 percent to prior year. Adjusted EBITDA (including
sold hotels) increased $17.2 million, to $159.7 million, or 12.1
percent to prior year. * Net income was $20.0 million compared to
$2.3 million for the six month period in 2005. Net income
applicable to common stockholders was $0.6 million, or $0.01 per
share, compared to a net loss applicable to common stockholders of
$22.8 million, or $0.38 per share, in 2005. Expenses, net of
minority interest, related to the early retirement of $0.8 million
and $1.5 million of debt, respectively, were excluded from Adjusted
EBITDA and Adjusted FFO for the quarter and six months ended June
30, 2006. Similarly, we recorded an impairment charge, net of
minority interest, or $8.3 million related to a hotel that was
designated as non-strategic in the second quarter of 2006 and was
excluded from Adjusted EBITDA and Adjusted FFO for that quarter.
Second Quarter Highlights: RevPAR growth continues to be strong
across the entire portfolio and is attributable to a significant
increase in ADR. Our ADR growth was very strong in a majority of
our key markets as we are focused on managing our customer mix and
taking advantage of the strong industry trends. RevPAR increased by
double digits in a number of our key markets. Markets with the
highest RevPAR gains for the quarter were Atlanta, Boston, Chicago,
Dallas, Orlando, San Antonio, the San Francisco Bay area and
Ventura, California. Many factors contributed to the 178 basis
point improvement in our Hotel EBITDA margin for the quarter,
including our improved RevPAR performance, changes in our asset
management approach and our repositioning plan. The displacement
from renovations in the quarter contributed to a reduction in
revenue of approximately $2.4 million and erosion of Hotel EBITDA
margins of approximately 35 basis points. "FelCor has a unique
opportunity to add significant value through internal growth over
the next few years as a consequence of the change in our asset
management approach, our renovation program and redevelopment
projects. We have begun to implement these initiatives and are just
beginning to see the benefits. The transition of our asset
management approach is now complete, and we expect continued
improvement in Hotel EBITDA margins as a result of these changes,"
said Richard A. Smith, FelCor's President and Chief Executive
Officer. "We are excited about implementing our renovation and
redevelopment program over the next couple of years which will
increase long-term shareholder value." In the second quarter of
2006, we increased our common dividend to $0.20 per share, from
$0.15 per share. Capital Structure: At June 30, 2006, we had $1.4
billion of consolidated debt outstanding with a weighted average
life of five years, compared to $1.7 billion outstanding at June
30, 2005. Our cash and cash equivalents totaled approximately $67
million at the end of the second quarter 2006. During the second
quarter, we retired $58 million of net indebtedness, including $27
million of secured debt and repaid our line of credit balance. At
June 30, 2006, consolidated debt to trailing twelve month Adjusted
EBITDA was 5.0x, compared to 6.5x at June 30, 2005. In April,
Moody's Investors Service upgraded our corporate rating from B1 to
Ba3. As a result, the interest rate on our $300 million of Senior
Notes due 2011 was reduced by 50 basis points to 8.5 percent,
resulting in an annual interest rate savings of $1.5 million. "We
have paid down a total of $287 million of debt since September 30,
2005, and should reach our goal of $400 million of aggregate debt
reduction by the end of this year. Our financial profile continues
to improve and our leverage ratio is declining as a result of
improved operating performance and debt reduction," said Andrew J.
Welch, FelCor's Executive Vice President and Chief Financial
Officer. "We are currently evaluating opportunities to refinance
additional debt." Hotel Disposition Update: During the second
quarter, we sold four non-strategic hotels for gross proceeds of
$78 million. We have sold 15 hotels for gross proceeds of $256
million since we began the disposition program. There are 23
remaining from the original 38 hotels that were identified as
non-strategic. At June 30, 2006, we had 20 hotels under contract to
sell, and we are well ahead of the expected pace of the
repositioning program. In connection with the finalization of our
three year capital improvement program, during the second quarter,
we identified seven additional hotels as non-strategic. The six
Embassy Suites Hotels(R) and one Sheraton Suites(R) are primarily
located in suburban locations generally within secondary markets.
We recorded an impairment charge of $9 million, in the second
quarter, related to one of these hotels. We expect total gross
proceeds for the 45 non-strategic hotels to be between $650 and
$700 million. The expected proceeds are toward the high end of our
original expectations for the 38 hotels set forth in January. The
proceeds from the seven additional non-strategic hotels will be
used primarily to fund the redevelopment projects. Renovation
Program Update: We finalized the long-term capital plans for every
hotel late in the second quarter. We are spending in excess of $400
million of capital between 2006 and 2008. The program will be
extensive and will include guest room, guest bath, meeting space,
public area, exterior and major mechanical upgrades at every hotel,
where needed. At the end of the program, our entire portfolio will
be completely renovated. More than 75 percent of these capital
expenditures will have a positive guest impact, where additional
rate and occupancy can be captured. As a result, we expect returns
on that capital to be between 12 and 15 percent. Improvements and
additions to consolidated hotels for the second quarter were $36
million and were $70 million, for the six months ended June 30,
2006. Hotel capital expenditures, including our pro rata share of
joint ventures, totaled $38 million for the quarter and $76 million
for the six months. We expect hotel capital expenditures of
approximately $175 million for the full year. Our Royale Palms
condominium project in Myrtle Beach, South Carolina, is more than
50 percent complete and scheduled to be completed in the third
quarter 2007. At June 30, the balance on the construction loan was
$34 million. We have pre sold approximately 98 percent of these
condominiums. We currently expect to earn net income of
approximately $16 million at the completion of the project, and we
expect that between 50 and 60 percent of the condominium units will
enter our rental pool. We also have identified redevelopment
opportunities at a number of our hotels and are currently in the
pre-development phase for three projects: building a new convention
center in Myrtle Beach at our Kingston Plantation complex, adding a
new spa and fitness center at the Embassy Suites Resort in
Deerfield Beach, Florida and adding 5,000 square feet of meeting
space at the Doubletree Guest Suites(R) in Dana Point, California.
2006 Guidance: We anticipate that during 2006, RevPAR will increase
between 8 and 10 percent, with the majority of the increase
attributable to gains in ADR. RevPAR during the third quarter is
expected to increase between 6 and 8 percent compared to the same
period in 2005. Based on these expectations, we currently
anticipate: * Adjusted EBITDA to be between $287 and $292 million
for the full year and between $69 and $71 million for the third
quarter; * Adjusted FFO per share to be between $1.90 and $1.98 for
the full year, and to be between $0.43 and $0.47 for the third
quarter; and * Hotel EBITDA margin to increase approximately 170
basis points for the year. We are leaving our guidance for the year
unchanged for RevPAR, EBITDA and FFO, but are raising our estimates
for Hotel EBITDA margin. The 2006 estimates assume higher RevPAR
and Hotel EBITDA margin for the second half of the year as a result
of stronger corporate transient and group demand and continued
benefit from our new asset management approach. However, we
anticipate a higher level of displacement from renovations than
originally expected. Our renovation schedules were finalized in the
second quarter, with some changes to the timelines. As a result of
these changes, we anticipate displacement for the full year to
negatively impact EBITDA by $7.6 million, or FFO of $0.12 per
share, which is $3.6 million, or $0.06 per share, higher than
originally expected. In addition, we sold two hotels in the second
quarter, which was not previously reflected in our guidance. There
are no further asset sales assumed in our guidance. We will adjust
our quarterly guidance as asset sales occur. Consequently, we are
assuming no further debt reduction, beyond what has occurred to
date. EBITDA, Adjusted EBITDA, Same-Store EBITDA, Hotel EBITDA,
Hotel EBITDA margin, FFO and Adjusted FFO are all non-GAAP
financial measures. See our discussion of "Non-GAAP Financial
Measures" for a reconciliation of each of these measures to our net
income and for information regarding the use, limitations and
importance of these non-GAAP financial measures. We have published
our Second Quarter and Six Months Supplemental Information, which
provides additional corporate data, financial highlights and
portfolio statistical data for the quarter and six months ended
June 30, 2006. Investors are encouraged to access the Supplemental
Information on our Web site at http://www.felcor.com/ , on the
Investor Relations page in the "Financial Reports" section. The
Supplemental Information also will be furnished upon request.
Requests may be made by e-mail to or by writing to the Vice
President of Investor Relations, FelCor Lodging Trust Incorporated,
545 E. John Carpenter Freeway, Suite 1300, Irving, Texas, 75062.
FelCor is one of the nation's largest hotel REITs and the nation's
largest owner of full service, all-suite hotels. FelCor's portfolio
is comprised of 113 consolidated hotels, located in 27 states and
Canada. FelCor's portfolio includes 65 upper upscale, all-suite
hotels, and FelCor is the largest owner of Embassy Suites Hotels
and Doubletree Guest Suites hotels. FelCor's hotels are flagged
under global brands such as Embassy Suites Hotels, Doubletree(R),
Hilton(R), Sheraton(R), Westin(R), and Holiday Inn(R). FelCor has a
current market capitalization of approximately $3.3 billion.
Additional information can be found on the Company's Web site at
http://www.felcor.com/ . We invite you to listen to our Second
Quarter 2006 Conference Call on Wednesday, August 9, 2006, at 10:00
a.m. (Central Time). The conference call will be Web cast
simultaneously via FelCor's Web site at http://www.felcor.com/ .
Interested investors and other parties who wish to access the call
should go to FelCor's Web site and click on the conference call
microphone icon on either the "Investor Relations" or "FelCor News"
pages. A phone replay will be available from Wednesday, August 9,
2006, at 12:00 p.m. (Central Time), through Friday, September 1,
2006, at 7:00 p.m. (Central Time), by dialing 800-642-1687
(conference ID# 3236840). A recording of the call also will be
archived and available at http://www.felcor.com/ . 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. 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 currently
anticipated. General economic conditions, including the anticipated
continuation of the current economic recovery, the impact of U.S.
military involvement in the Middle East and elsewhere, future acts
of terrorism, the impact on the travel industry of increased fuel
prices and security precautions, the impact that the bankruptcy of
additional major air carriers may have on our revenues and
receivables, the availability of capital, the ability to effect
sales of non-strategic hotels at anticipated prices, 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. Consolidated Statements of Operations (in
thousands, except per share data) Three Months Ended Six Months
Ended June 30, June 30, 2006 2005 2006 2005 Revenues: Hotel
operating revenue: Room $251,114 $231,936 $495,839 $439,995 Food
and beverage 42,200 39,605 79,284 74,189 Other operating
departments 15,179 14,234 29,657 27,081 Retail space rental and
other revenue 157 120 291 276 Total revenues 308,650 285,895
605,071 541,541 Expenses: Hotel departmental expenses: Room 62,490
58,301 122,063 111,235 Food and beverage 31,740 30,076 61,217
57,450 Other operating departments 7,100 7,008 14,090 13,148 Other
property related costs 81,257 78,349 164,794 153,253 Management and
franchise fees 16,854 14,802 32,649 27,461 Taxes, insurance and
lease expense 32,044 30,336 61,733 58,698 Corporate expenses 5,562
4,728 11,366 9,269 Impairment loss 9,268 --- 9,268 --- Depreciation
27,604 26,579 53,802 52,256 Total operating expenses 273,919
250,179 530,982 482,770 Operating income 34,731 35,716 74,089
58,771 Interest expense, net (28,561) (32,901) (59,325) (64,779)
Charge-off of deferred financing costs (295) --- (962) --- Early
extinguishment of debt (438) --- (438) --- Income (loss) before
equity in income from unconsolidated entities, minority interests
and gain on sale of assets 5,437 2,815 13,364 (6,008) Equity in
income from unconsolidated entities 3,812 3,837 5,760 4,968
Minority interests 1,572 306 1,816 1,283 Gain on sale of assets ---
389 --- 389 Income (loss) from continuing operations 10,821 7,347
20,940 632 Discontinued operations (676) 3,004 (943) 1,705 Net
income (loss) 10,145 10,351 19,997 2,337 Preferred dividends
(9,678) (9,809) (19,356) (19,900) Issuance costs of redeemed
preferred stock --- (5,198) --- (5,198) Net income (loss)
applicable to common stockholders $467 $(4,656) $641 $(22,761)
Basic and diluted per common share data: Net income (loss) from
continuing operations $0.02 $(0.13) $0.03 $(0.41) Net income (loss)
$0.01 $(0.08) $0.01 $(0.38) Basic weighted average common shares
outstanding 60,355 59,404 60,066 59,363 Diluted weighted average
common shares outstanding 60,626 59,404 60,326 59,363 Discontinued
Operations (in thousands) Included in discontinued operations are
the results of operations of four hotels disposed of in the second
quarter of 2006, eight hotels disposed of in the first quarter of
2006 and 19 hotels disposed of in 2005. Condensed financial
information for the hotels included in discontinued operations is
as follows: Three Months Ended Six Months Ended June 30, June 30,
2006 2005 2006 2005 Operating revenue $8,704 $45,944 $27,691
$93,457 Operating expenses 7,460 41,893 25,513 89,358 Operating
income 1,244 4,051 2,178 4,099 Direct interest costs, net (64)
(610) (134) (1,972) Loss on sale of depreciable assets (1,785)
(234) (2,862) (214) Minority interests (71) (203) (125) (208)
Income (loss) from discontinued operations (676) 3,004 (943) 1,705
Depreciation 469 4,173 1,596 8,961 Minority interest in FelCor LP
(23) 139 (63) 79 Interest expense 65 607 129 1,963 EBITDA from
discontinued operations (165) 7,923 719 12,708 Loss on sale of
assets 1,785 234 2,862 214 Impairment loss --- 732 --- 1,291 Asset
disposition costs --- --- --- 1,300 Adjusted EBITDA from
discontinued operations $1,620 $8,889 $3,581 $15,513 Selected
Balance Sheet Data (in thousands) June 30, Dec. 31, 2006 2005
Investment in hotels $3,045,042 $3,341,881 Accumulated depreciation
(717,253) (754,502) Investments in hotels, net of accumulated
depreciation $2,327,789 $2,587,379 Total cash and cash equivalents
$67,490 $94,564 Total assets $2,686,756 $2,919,093 Total debt
$1,442,073 $1,675,280 Total stockholders' equity $1,028,566
$1,031,793 At June 30, 2006, we had an aggregate of 61,955,094
shares of FelCor common stock and 1,355,016 units of FelCor LP
limited partnership interest outstanding. Debt Summary (dollars in
thousands) Interest Rate at Encumbered June 30, Maturity
Consolidated Hotels 2006(a) Date Debt Promissory note none LIBOR
(L) + 2.00 June 2016 $650 Line of credit(b) none L + 2.00 Jan. 2009
--- Senior unsecured term notes none 7.63 October 2007 123,823
Senior unsecured term notes none 8.50 June 2011 298,786 Senior
unsecured term notes none L + 4.25 June 2011 190,000 Senior
unsecured term notes(c) none 7.80 June 2011 100,000 Total unsecured
debt 713,259 Mortgage debt 9 hotels 6.53 July 2009 - 2014 103,144
Mortgage debt(d) 8 hotels L + 1.25 May 2007 88,984 Mortgage debt 7
hotels 7.32 March 2009 125,888 Mortgage debt 4 hotels 7.55 June
2009 40,955 Mortgage debt 8 hotels 8.70 May 2010 171,035 Mortgage
debt 7 hotels 8.73 May 2010 131,801 Mortgage debt 1 hotel L + 2.85
August 2008 15,500 Mortgage debt 1 hotel 5.81 July 2016 13,000
Other 1 hotel 9.17 August 2011 4,832 Construction loan(e) --- L +
2.25 August 2007 33,675 Total secured debt 46 hotels 728,814
$1,442,073 (a) Our weighted average interest rate as of June 30,
2006 was 8.16 percent. (b) We have a borrowing capacity of $125
million on our line of credit. The interest on this line can range
from L + 175 to L + 225 basis points, based on our leverage ratio
(as defined in our line of credit agreement). (c) We have swapped
$100 million of floating rate debt, at L + 4.25 percent, for a
fixed rate of 7.80 percent. This interest rate swap expires in
December 2007. (d) This debt has a one-year extension option,
subject to certain contingencies. (e) We have a $69.8 million
recourse construction loan facility for the development of a
184-unit condominium project in Myrtle Beach, South Carolina. The
interest on this facility is being capitalized as part of the cost
of the project. Effective July 1, 2006, the interest rate on this
loan facility was reduced to L + 200 basis points. Fixed interest
rate debt to total debt 77.2% Weighted average maturity of debt 5
years Secured debt to total assets 27.1% Preferred Stock (dollars
in thousands) Liquidation Value at June 30, 2006 Series A $1.95
Cumulative Convertible Preferred Stock $322,011 Series C 8%
Cumulative Redeemable Preferred Stock $169,950 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 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 to FFO and Adjusted FFO (in thousands,
except per share and unit data) Three Months Ended June 30, 2006
2005 Per Share Per Share Dollars Shares Amount Dollars Shares
Amount Net income $10,145 $10,351 Preferred dividends (9,678)
(9,809) Issuance costs of redeemed preferred stock --- (5,198) Net
income (loss) applicable to common stockholders 467 60,626 $0.01
(4,656) 59,404 $(0.08) Depreciation, continuing operations 27,604
--- 0.46 26,579 --- 0.45 Depreciation, unconsolidated entities and
discontinued operations 3,102 --- 0.05 6,510 --- 0.11 Loss (gain)
on sale of depreciable assets 1,785 --- 0.03 (155) --- --- Minority
interest in FelCor LP 16 2,102 (0.02) (216) 2,788 (0.03) Conversion
of options and unvested restricted stock --- --- --- --- 339 ---
FFO 32,974 62,728 0.53 28,062 62,531 0.45 Issuance costs of
redeemed preferred stock --- --- --- 5,198 --- 0.08 Charge-off of
deferred financing costs 295 --- --- --- --- --- Charge-off of
deferred financing costs, unconsolidated entities 20 --- --- ---
--- --- Early extinguishment of debt 438 --- 0.01 --- --- Early
extinguishment of debt, unconsolidated entities 165 --- --- --- ---
--- Minority interest share of charge-off of financing costs and
early extinguishment of debt (115) --- --- --- --- --- Impairment
loss, continuing operations 9,268 --- 0.15 --- --- Impairment loss,
discontinued operations --- --- --- 732 --- 0.01 Minority interest
share of impairment loss (927) --- (0.02) --- --- --- Adjusted
FFO(a) $42,118 62,728 $0.67 $33,992 62,531 $0.54 (a) It is more
dilutive to assume the conversion of our Series A Preferred Stock
into common stock when our quarterly adjusted FFO per share
calculation exceeds 63 cents per share. For the three months ended
June 30, 2006, the more dilutive calculation remains at 67 cents as
shown below: Per Share Dollars Shares Amount Adjusted FFO $42,118
62,728 $0.67 Preferred dividends 6,279 9,985 Adjusted FFO assuming
conversion of Series A Preferred Stock $48,397 72,713 $0.67
Reconciliation of Net Income to FFO and Adjusted FFO (in thousands,
except per share and unit data) Six Months Ended June 30, 2006 2005
Per Share Per Share Dollars Shares Amount Dollars Shares Amount Net
income $19,997 $2,337 Preferred dividends (19,356) (19,900)
Issuance costs of redeemed preferred stock --- (5,198) Net income
(loss) applicable to common stockholders 641 60,326 $0.01 (22,761)
59,363 $(0.38) Depreciation, continuing operations 53,802 --- 0.89
52,256 --- 0.88 Depreciation, unconsolidated entities and
discontinued operations 6,978 --- 0.12 13,595 --- 0.23 Loss (gain)
on sale of depreciable assets 2,862 --- 0.05 (175) --- --- Minority
interest in FelCor LP 24 2,381 (0.04) (1,059) 2,788 (0.06)
Conversion of options and unvested restricted stock --- --- --- ---
319 --- FFO 64,307 62,707 1.03 41,856 62,470 0.67 Issuance costs of
redeemed preferred stock --- --- --- 5,198 --- 0.08 Charge-off of
deferred financing costs 962 --- 0.02 --- --- --- Charge-off of
deferred financing costs, unconsolidated entities 20 --- --- ---
--- --- Early extinguishment of debt 438 --- 0.01 --- --- --- Early
extinguishment of debt, unconsolidated entities 165 --- --- --- ---
--- Minority interest share of charge-off of financing costs and
early extinguishment of debt (115) --- --- --- --- --- Impairment
loss, continuing operations 9,268 --- 0.15 --- --- --- Impairment
loss, discontinued operations --- --- --- 1,291 --- 0.02 Minority
interest share of impairment loss (927) --- (0.03) --- --- ---
Asset disposition costs --- --- --- 1,300 --- 0.02 Adjusted FFO
$74,118 62,707 $1.18 $49,645 62,470 $0.79 Reconciliation of Net
Income to EBITDA, Adjusted EBITDA and Same-Store EBITDA (in
thousands) Three Months Ended Six Months Ended June 30, June 30,
2006 2005 2006 2005 Net income $10,145 $10,351 $19,997 $2,337
Depreciation, continuing operations 27,604 26,579 53,802 52,256
Depreciation, unconsolidated entities and discontinued operations
3,102 6,510 6,978 13,595 Minority interest in FelCor Lodging LP 16
(216) 24 (1,059) Interest expense 29,416 33,702 60,973 66,219
Interest expense, unconsolidated entities and discontinued
operations 1,667 2,259 3,335 5,400 Amortization expense 908 755
1,897 1,354 EBITDA 72,858 79,939 147,006 140,102 Charge-off of
deferred financing costs 295 --- 962 --- Charge-off of deferred
financing costs, unconsolidated entities 20 --- 20 --- Early
extinguishment of debt 438 --- 438 --- Early extinguishment of
debt, unconsolidated entities 165 --- 165 --- Minority interest
share of charge-off of financing costs and early extinguishment of
debt (115) --- (115) --- Impairment loss, continuing operations
9,268 --- 9,268 --- Impairment loss, discontinued operations ---
732 --- 1,291 Minority interest share of impairment loss (927) ---
(927) --- Asset disposition costs --- --- --- 1,300 Loss (gain) on
sale of depreciable assets 1,785 (155) 2,862 (175) Adjusted EBITDA
83,787 80,516 159,679 142,518 Adjusted EBITDA from discontinued
operations (1,620) (8,889) (3,581) (15,513) Same-Store EBITDA
$82,167 $71,627 $156,098 $127,005 Reconciliation of Adjusted EBITDA
to Hotel EBITDA (in thousands) Three Months Ended Six Months Ended
June 30, June 30, 2006 2005 2006 2005 Adjusted EBITDA $83,787
$80,516 $159,679 $142,518 Retail space rental and other revenue
(157) (120) (291) (276) Adjusted EBITDA from discontinued
operations (1,620) (8,889) (3,581) (15,513) Equity in income from
unconsolidated subsidiaries (excluding interest and depreciation
expense) (8,782) (8,477) (15,481) (14,269) Minority interest in
other partnerships (excluding interest and depreciation expense)
(20) 701 87 1,086 Consolidated hotel lease expense 17,056 15,387
31,388 28,051 Unconsolidated taxes, insurance and lease expense
(1,472) (1,598) (3,025) (3,053) Interest income (854) (801) (1,648)
(1,441) Corporate expenses (excluding amortization expense) 4,654
3,973 9,469 7,915 Hotel EBITDA $92,592 $80,692 $176,597 $145,018
Reconciliation of Net Income to Hotel EBITDA (in thousands) Three
Months Ended Six Months Ended June 30, June 30, 2006 2005 2006 2005
Net income $10,145 $10,351 $19,997 $2,337 Discontinued operations
676 (3,004) 943 (1,705) Equity in income from unconsolidated
entities (3,812) (3,837) (5,760) (4,968) Minority interests (1,572)
(306) (1,816) (1,283) Consolidated hotel lease expense 17,056
15,387 31,388 28,051 Unconsolidated taxes, insurance and lease
expense (1,472) (1,598) (3,025) (3,053) Interest expense, net
28,561 32,901 59,325 64,779 Charge-off of deferred financing costs
295 --- 962 --- Impairment loss 9,268 --- 9,268 --- Early
extinguishment of debt 438 --- 438 --- Corporate expenses 5,562
4,728 11,366 9,269 Depreciation 27,604 26,579 53,802 52,256 Gain on
sale of assets --- (389) --- (389) Retail space rental and other
revenue (157) (120) (291) (276) Hotel EBITDA $92,592 $80,692
$176,597 $145,018 Hotel EBITDA and Hotel EBITDA Margin (dollars in
thousands) Three Months Ended Six Months Ended June 30, June 30,
2006 2005 2006 2005 Total revenue $308,650 $285,895 $605,071
$541,541 Retail space rental and other revenue (157) (120) (291)
(276) Hotel operating revenue 308,493 285,775 604,780 541,265 Hotel
operating expenses (215,901) (205,083) (428,183) (396,247) Hotel
EBITDA $92,592 $80,692 $176,597 $145,018 Hotel EBITDA margin 30.0%
28.2% 29.2% 26.8% Reconciliation of Ratio of Operating Income to
Total Revenue to Hotel EBITDA Margin Three Months Ended Six Months
Ended June 30, June 30, 2006 2005 2006 2005 Ratio of operating
income to total revenue 11.3% 12.4% 12.2% 10.9% Retail space rental
and other revenue --- --- --- --- Unconsolidated taxes, insurance
and lease expense (0.5) (0.6) (0.5) (0.6) Consolidated hotel lease
expense 5.5 5.4 5.2 5.2 Corporate expenses 1.8 1.7 1.9 1.7
Impairment loss 3.0 --- 1.5 --- Depreciation 8.9 9.3 8.9 9.6 Hotel
EBITDA margin 30.0% 28.2% 29.2% 26.8% Hotel Operating Expense
Composition (dollars in thousands) Three Months Ended Six Months
Ended June 30, June 30, 2006 2005 2006 2005 Reconciliation of total
operating expense to hotel operating expense: Total operating
expenses $273,919 $250,179 $530,982 $482,770 Unconsolidated taxes,
insurance and lease expense 1,472 1,598 3,025 3,053 Consolidated
hotel lease expense (17,056) (15,387) (31,388) (28,051) Corporate
expenses (5,562) (4,728) (11,366) (9,269) Impairment loss (9,268)
--- (9,268) --- Depreciation (27,604) (26,579) (53,802) (52,256)
Hotel operating expenses $215,901 $205,083 $428,183 $396,247
Supplemental information: Compensation and benefits expense
(included in hotel operating expenses) $90,370 $86,074 $177,246
$167,353 Reconciliation of Forecasted Net Income to Forecasted FFO,
Adjusted FFO, EBITDA and Adjusted EBITDA (in millions, except per
share and unit data) 3rd Quarter 2006 Guidance Full Year 2006
Guidance Low Guidance High Guidance Low Guidance High Guidance Per
Share Per Share Per Share Per Share Dollars Amount Dollars Amount
Dollars Amount Dollars Amount (a) (a) (a) (a) Net income (b) $4 $6
$18 $23 Preferred dividends (10) (10) (39) (39) Net income (loss)
applicable to common stockholders(b) (6) $(0.10) (4) $(0.07) (21)
$(0.35) (16) $(0.27) Loss on sale of assets --- --- 3 3
Depreciation 33 33 129 129 Minority interest in FelCor LP --- ---
(1) (1) FFO 27 $0.43 29 $0.47 110 $1.75 115 $1.83 Write off loan
costs --- --- 1 1 Impairment --- --- 8 8 Early extinguishment of
debt --- --- --- --- Adjusted FFO $27 $0.43 $29 $0.47 $119 $1.90
$124 $1.98 Net income(b) 3 5 18 23 Depreciation 33 33 129 129
Minority interest in FelCor LP --- --- (1) (1) Interest expense 32
32 126 126 Amortization expense 1 1 3 3 EBITDA 69 71 275 280 Loss
on sale of assets --- --- 3 3 Write off loan costs --- --- 1 1
Impairment --- --- 8 8 Adjusted EBITDA $69 $71 $287 $292 (a)
Weighted average shares are 60.1 million. Adding minority interest
and unvested restricted stock of 2.6 million shares to weighted
average shares, provides the weighted average shares and units of
62.7 million used to compute FFO per share. (b) Excludes future
gains or losses from asset sales and debt extinguishment.
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,
including FFO, Adjusted FFO, EBITDA, Adjusted EBITDA, Same-Store
EBITDA, Hotel EBITDA and Hotel EBITDA margin, 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 as a measure of our operating
performance. FFO and EBITDA The White Paper on Funds From
Operations approved by the Board of Governors of the National
Association of Real Estate Investment Trusts ("NAREIT"), defines
FFO as net income or loss (computed in accordance with GAAP),
excluding gains or losses from sales of property, plus depreciation
and amortization, and after adjustments for unconsolidated
partnerships and joint ventures. Adjustments for unconsolidated
partnerships and joint ventures are calculated to reflect FFO on
the same basis. We compute FFO in accordance with standards
established by NAREIT. This may not be comparable to FFO reported
by other REITs that do not define the term in accordance with the
current NAREIT definition or that interpret the current NAREIT
definition differently than we do. EBITDA is a commonly used
measure of performance in many industries. We define EBITDA as net
income or loss (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 recurring and non-recurring items described below
provides useful supplemental information to investors regarding our
ongoing operating performance and that the presentation of Adjusted
FFO, Adjusted EBITDA and Same-Store EBITDA, when combined with GAAP
net income, EBITDA and FFO, is beneficial to an investor's better
understanding of our operating performance. * Gains and losses
related to early extinguishment of debt and interest rate swaps -
We exclude gains and losses related to early 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. * Impairment losses - We exclude the effect of
impairment losses and gains or losses on disposition of assets in
computing Adjusted FFO and Adjusted EBITDA because we believe that
including these is not consistent with reflecting the ongoing
performance of our remaining assets. Additionally, we believe that
impairment charges and gains or losses on disposition of assets
represent accelerated depreciation, or excess depreciation, and
depreciation is excluded from FFO by the NAREIT definition and from
EBITDA. * Cumulative effect of a change in accounting principle -
Infrequently, the Financial Accounting Standards Board promulgates
new accounting standards that require the consolidated statements
of operations to reflect the cumulative effect of a change in
accounting principle. We exclude these one-time adjustments in
computing Adjusted FFO and Adjusted EBITDA because they do not
reflect our actual performance for that period. In addition, to
derive Adjusted EBITDA, we exclude gains or losses on the sale of
assets because we believe that including them in EBITDA is not
consistent with reflecting the ongoing performance of our remaining
assets. Additionally, the gain or loss on sale of depreciable
assets represents either accelerated depreciation or excess
depreciation in previous periods, and depreciation is excluded from
EBITDA. To derive Same-Store EBITDA, we make the same adjustments
to EBITDA as for Adjusted EBITDA and, additionally, exclude EBITDA
from discontinued operations and gains and losses from the
disposition of non-hotel related assets. Hotel EBITDA and Hotel
EBITDA Margin Hotel EBITDA and Hotel EBITDA margin are commonly
used measures of performance in the industry and give investors a
more complete understanding of the operating results over which our
individual hotels and operating managers have direct control. We
believe that Hotel EBITDA and Hotel EBITDA margin are useful to
investors by providing greater transparency with respect to two
significant measures used by us in our financial and operational
decision-making. Additionally, these measures facilitate
comparisons with other hotel REITs and hotel owners. We present
Hotel EBITDA and Hotel EBITDA margin by eliminating corporate-level
expenses, depreciation and expenses related to our capital
structure. We eliminate corporate-level costs and expenses because
we believe property-level results provide investors with
supplemental information with respect to the ongoing operating
performance of our hotels and the effectiveness of management on a
property-level basis. We eliminate depreciation and amortization,
even though they are property-level expenses, because we do not
believe that these non-cash expenses, which are based on historical
cost accounting for real estate assets and implicitly assume that
the value of real estate assets diminish predictably over time,
accurately reflect an adjustment in the value of our assets. We
also eliminate consolidated percentage rent paid to unconsolidated
entities, which is effectively eliminated by minority interest
expense and equity in income from unconsolidated subsidiaries, and
include the cost of unconsolidated taxes, insurance and lease
expense, to reflect the entire operating costs applicable to our
hotels. Limitations of Non-GAAP Measures The use of these non-GAAP
financial measures has certain limitations. FFO, Adjusted FFO,
EBITDA, Adjusted EBITDA, Same-Store EBITDA, Hotel EBITDA and Hotel
EBITDA margin, as presented by us, may not be comparable to FFO,
Adjusted FFO, EBITDA, Adjusted EBITDA, Same-Store EBITDA, Hotel
EBITDA and Hotel EBITDA margin as calculated by other real estate
companies. These measures do not reflect certain expenses that we
incurred and will incur, such as depreciation and interest or
capital expenditures. Management compensates for these limitations
by separately considering the impact of these excluded items to the
extent they are material to operating decisions or assessments of
our operating performance. Our reconciliations to the 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. Neither should
FFO, FFO per share, Adjusted FFO, Adjusted FFO per share, EBITDA,
Adjusted EBITDA or Same-Store EBITDA be considered as measures of
our liquidity or indicative of funds available for our cash needs,
including our ability to make cash distributions. FFO per share
does not measure, and should not be used as a measure of, amounts
that accrue directly to the benefit of stockholders. FFO, Adjusted
FFO, EBITDA, Adjusted EBITDA, Same-Store EBITDA, Hotel EBITDA and
Hotel EBITDA margin reflect additional ways of viewing our
operations that we believe when viewed with our GAAP results and
the reconciliations to the corresponding GAAP financial measures
provide a more complete understanding of factors and trends
affecting our business than could be obtained absent this
disclosure. Management strongly encourages investors to review our
financial information in its entirety and not to rely on any single
financial measure. DATASOURCE: FelCor Lodging Trust Incorporated
CONTACT: Stephen A. Schafer, Vice President of Investor Relations,
+1-972-444-4912, or , or Monica L. Hildebrand, Vice President of
Communications, +1-972-444-4917, or , both of FelCor Lodging Trust
Incorporated Web site: http://www.felcor.com/
Copyright
Felcor Lodging (NYSE:FCH)
Gráfico Histórico do Ativo
De Jun 2024 até Jul 2024
Felcor Lodging (NYSE:FCH)
Gráfico Histórico do Ativo
De Jul 2023 até Jul 2024