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Exhibit 99.1
RFS REPORTS SECOND QUARTER RESULTS
Memphis, Tennessee, August 1, 2002—RFS Hotel Investors, Inc. (NYSE: RFS) today announced funds from operations (FFO) for the second quarter 2002 of $11.4 million, or $0.38 per share, compared to $16.9 million, or $0.62 per share, for the same quarter a year ago. FFO for the six months ended June 30, 2002, was $19.2 million, or $0.66 per share, compared to 2001 FFO of $31.9 million or $1.16 per share. Operating results were in line with reduced guidance given by the Company on June 27, 2002.
Second Quarter Highlights
- •
- Hotel revenue per available room (RevPAR) declined 10.6% for the second quarter. The following represents changes in RevPAR as compared to the prior year comparable periods by market segment:
| RevPAR Change | |||||
---|---|---|---|---|---|---|
| Quarter | Year to Date | ||||
Full Service | (16.6 | %) | (22.0 | %) | ||
Extended Stay | (6.5 | %) | (6.9 | %) | ||
Limited Service | (5.9 | %) | (7.5 | %) | ||
Total | (10.6 | %) | (13.5 | %) |
- •
- The Company's six hotels in northern California, consisting of two in San Francisco and four in Silicon Valley, experienced an average decline in quarterly RevPAR of 27.9%. These six northern California hotels represented 18.4% of RFS's earnings before interest, taxes, depreciation and amortization (EBITDA) for the quarter as compared to 23% for all of 2001. Exclusive of these six northern California hotels, RevPAR declined 5.5% for the quarter and 7.8% year to date.
- •
- Hotel operating margins (hotel EBITDA as a percentage of total revenue, excluding deferred revenue) declined 4.0 percentage points to 38% in the second quarter. For the six months, hotel operating margins declined 5.4 percentage points to 36.1%.
- •
- EBITDA declined 21.1% from $24.6 million to $19.4 million for the second quarter and decreased 27.1% year to date.
- •
- The Company realized an unleveraged FFO return on investment of 9.0% on its hotel portfolio for the trailing twelve months ended June 30, 2002. Based upon the Company's approximate 36% leverage and average borrowing costs of 8.2%, the Company realized a leveraged return on investment of 9.5%.
- •
- EBITDA for the trailing twelve months ended June 30, 2002, was 2.8 times the Company's interest costs.
- •
- Total debt, net of cash, was reduced by $11.1 million in the first two quarters.
- •
- During the quarter, RFS completed the sale of 2.0 million shares of common stock resulting in net proceeds of $24.6 million. These funds were utilized, on June 30, 2002, to repurchase all of the Company's Series B Preferred Stock which paid an annual dividend at a rate of 12.5%. Although the transaction reduced FFO per share by $0.01 in the second quarter, it is expected to be neutral to FFO per share for the full year.
Operating Results
Randy Churchey, president and chief operating officer, said, "As expected, the industry has experienced a significant downturn in business travel which began in the spring of 2001 and was exacerbated by the events of September 11. During the quarter, we experienced some improvement in the San Francisco market due to an increase in the number of leisure travelers. However, RevPAR at
our four hotels in and around Silicon Valley was down 32.7% compared to a decline of 36.6% during the first quarter.
RevPAR for the entire portfolio declined 10.6% indicating some sequential improvement from the first quarter results which reflected a decrease of 16.6%. We began to experience quarterly declines in RevPAR during the third quarter of 2001 and RevPAR for the second quarter of 2001 was unchanged from the prior year. Therefore, quarterly RevPAR comparisons should improve over the balance of the year."
Capital
Despite the reduction in FFO and RevPAR, the Company:
- •
- Continued to maintain one of the least leveraged balance sheets in the industry with total debt equal to only 4.3 times trailing twelve months EBITDA;
- •
- Generated operating cash flow (EBITDA less interest) of $44.4 million for the trailing twelve months ended June 30, 2002. This represents funds available for capital expenditures, debt reduction, and dividends; and
- •
- Reduced net debt by $11.1 million during the first half of the year.
Kevin Luebbers, RFS executive vice president and chief financial officer, stated, "The repurchase of $25 million in preferred stock with the proceeds of our recent common stock offering reduces our aggregate dividends by $1.1 million and eliminates the required future redemption of the Series B Preferred Stock. This transaction, together with our successful sales of $125 million in unsecured senior notes and 1.15 million shares of common stock in the first quarter, positions us with in excess of $100 million of available capital to withstand this difficult operating environment and to opportunistically acquire hotels which meet our strategic and financial criteria."
Outlook and Dividends
The Company declared a dividend of $0.25 per share, payable September 16, 2002, to shareholders of record September 6, 2002. RFS expects to pay an annual dividend in 2002 of $1.00 per share. Based upon preliminary estimates, approximately 75% of the dividend is expected, for tax purposes, to be characterized as a return of capital, and; therefore, not taxable as ordinary income for federal income tax purposes.
Robert Solmson, chairman and chief executive officer, stated, "It has been, and continues to be, extremely difficult to predict lodging demand in the current economic environment. In recent months, the U.S. economy has shown renewed growth following last year's recession. Recently, we have seen improving RevPAR trends for our hotels, and we expect this trend to continue. Our best estimate is that RevPAR growth, year over year, during the second half of 2002 will be consistent with industry forecasts of 2% to 6% and that FFO per share for 2002 will range from $1.35 to $1.40.
Fortunately, the Company's balance sheet remains strong with total debt equal to only 36% of the costs of our assets, no significant debt maturities until 2008, and operating cash flow (EBITDA less interest expense) for the trailing 12 months of $44.4 million. This combination of low leverage and strong cash flows enables the Company to pay meaningful dividends to our shareholders during this difficult operating environment. Management will continue to do everything in its power to: protect the dividend; maintain low levels of debt; and, maximize return on investment."
The Company also announced that, effective in 2003, it would include in compensation the expense associated with the fair value of stock option grants made subsequent to January 1, 2003. The impact of this change in accounting policy, if adopted in prior years, would have increased annual compensation costs by approximately $.01 per share on an annual basis.
RFS Hotel Investors, Inc. (RFS) is a real estate investment trust (REIT) that owns 58 hotels with approximately 8,400 rooms located in 24 states. RFS's hotel portfolio is diversified by geography, brand
and segment. Leading brands under which RFS hotels are operated include Sheraton®, Residence Inn by Marriott®, Hilton®, Doubletree®, Holiday Inn®, Hampton Inn®, and Homewood Suites by Hilton®. By segment, RFS receives approximately 38% of its EBITDA from full service hotels, 35% from extended stay hotels, and 27% from limited service hotels. Additional information can be found on the Company's web site atwww.rfshotel.com.
RFS invites you to listen to the Company's second quarter 2002 conference call on August 1, 2002, at 9:00 a.m. Central Time. The dial-in number is 312-470-7040 (15 minutes prior to the start of the call); the passcode is RFS; and the leader is Bob Solmson. The conference call will be webcast simultaneously via the Company's website atwww.rfshotel.com. A recording of the call also will be archived and available atwww.rfshotel.com.
Certain matters discussed in this press release are forward-looking statements within the meaning of federal securities regulations. All forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual transactions, results, performance or achievements to be materially different from any future transactions, results, performance or achievements expressed or implied by such forward-looking statements. General economic conditions, competition, and governmental actions will affect future transactions, results, performance, and achievements. These risks are presented in detail in our filings with the Securities and Exchange Commission. Although the Company believes the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that our expectations will be attained or that any deviations will not be material. The Company undertakes no obligation to publicly release the result of any revisions to these forward-looking statements that may be made to reflect any future events or circumstances.
RFS Hotel Investors, Inc.
Key Company Statistics
QUARTER ENDED JUNE 30, 2002
| | | | ||||||
---|---|---|---|---|---|---|---|---|---|
Total Revenues | $ | 53.6 | million | EBITDA | $ | 19.4 | million | ||
% Decrease in Revenues | 11.2 | % | % Decrease in EBITDA | 21.1 | % | ||||
FFO | $ | 11.4 | million | % of Hotel EBITDA1 | |||||
Full Service Hotels | 38 | % | |||||||
% Decrease in FFO | 32.9 | % | Extended Stay Hotels | 35 | % | ||||
Limited Service Hotels | 27 | % | |||||||
FFO per Share | $ | 0.38 | |||||||
% Decrease in FFO per Share | 38.7 | % |
| | | | ||||
---|---|---|---|---|---|---|---|
EBITDA/Interest1 | 2.8 | x | Debt/EBITDA1 | 4.3 | x | ||
EBITDA/Interest and Preferred Dividends1 | 2.5 | x | Percentage of fixed interest rate debt | 97 | % |
- 1
- EBITDA information is for the trailing twelve months ended June 30, 2002.
RFS HOTEL INVESTORS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2002 AND 2001
(in thousands, except per share data)
| Three Months Ended | Six Months Ended | ||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| June 30, 2002 | June 30, 2001 | June 30, 2002 | June 30, 2001 | ||||||||||||
Revenue: | ||||||||||||||||
Rooms | $ | 46,374 | $ | 52,163 | $ | 87,066 | $ | 102,069 | ||||||||
Food and beverage | 4,674 | 4,580 | 8,877 | 9,337 | ||||||||||||
Other operating departments | 1,730 | 2,563 | 3,336 | 4,989 | ||||||||||||
Lease revenue (1) | 1,234 | 1,429 | 2,868 | 3,317 | ||||||||||||
Deferred revenue (1) | (491 | ) | (457 | ) | (1,503 | ) | (1,736 | ) | ||||||||
Other | 107 | 137 | 261 | 341 | ||||||||||||
Total hotel revenue | 53,628 | 60,415 | 100,905 | 118,317 | ||||||||||||
Hotel operating expenses by department: | ||||||||||||||||
Rooms | 9,118 | 9,847 | 17,538 | 19,459 | ||||||||||||
Food and beverage | 3,346 | 3,553 | 6,507 | 7,061 | ||||||||||||
Other operating departments | 465 | 557 | 939 | 1,097 | ||||||||||||
Undistributed operating expenses: | ||||||||||||||||
Property operating costs | 5,445 | 5,670 | 10,779 | 11,461 | ||||||||||||
Property taxes, insurance and other | 3,174 | 2,896 | 6,533 | 6,141 | ||||||||||||
Franchise costs | 4,388 | 4,621 | 8,230 | 9,011 | ||||||||||||
Maintenance and repair | 2,500 | 2,616 | 4,815 | 5,198 | ||||||||||||
Management fees | 1,270 | 1,532 | 2,528 | 2,883 | ||||||||||||
General and administrative | 3,855 | 4,003 | 7,546 | 7,913 | ||||||||||||
Total hotel operating expenses | 33,561 | 35,295 | 65,415 | 70,224 | ||||||||||||
Net hotel operating income (Hotel EBITDA) | 20,067 | 25,120 | 35,490 | 48,093 | ||||||||||||
Corporate expenses: | ||||||||||||||||
Depreciation | 7,612 | 7,483 | 14,933 | 14,877 | ||||||||||||
Amortization of deferred expenses and unearned compensation | 739 | 707 | 1,415 | 1,410 | ||||||||||||
Interest expense | 6,511 | 6,216 | 12,555 | 12,772 | ||||||||||||
General and administrative | 1,177 | 1,006 | 2,262 | 2,179 | ||||||||||||
Debt extinguishment and swap termination costs | — | — | 10,122 | — | ||||||||||||
Hilton lease termination | — | 600 | — | 65,496 | ||||||||||||
Loss (gain) on sale of assets | 10 | (1,200 | ) | (962 | ) | (1,200 | ) | |||||||||
Minority interest in income (loss) of Operating Partnership | 119 | 687 | (676 | ) | (1,759 | ) | ||||||||||
Income (loss) before income taxes | 3,899 | 9,621 | (4,159 | ) | (45,682 | ) | ||||||||||
Provision for (benefit from) income taxes | 130 | (20 | ) | (380 | ) | (24,499 | ) | |||||||||
Net income (loss) | 3,769 | 9,641 | (3,779 | ) | (21,183 | ) | ||||||||||
Preferred stock dividends | (781 | ) | (782 | ) | (1,562 | ) | (1,562 | ) | ||||||||
Gain (loss) on redemption of preferred stock | (1,890 | ) | — | (1,890 | ) | 5,141 | ||||||||||
Net income (loss) applicable to common shareholders | $ | 1,098 | $ | 8,859 | $ | (7,231 | ) | $ | (17,604 | ) | ||||||
Income (loss) per share—diluted | $ | 0.04 | $ | 0.35 | $ | (0.27 | ) | $ | (0.71 | ) | ||||||
Weighted average common shares outstanding—diluted | 27,217 | 25,003 | 26,407 | 24,864 |
- (1)
- Deferred revenue is recorded for the Company's hotels which are leased to third parties in accordance with Staff Accounting Bulletin 101 which requires deferral of certain revenue until the third and fourth quarters. For the three and six months ended June 30, 2002 and 2001, five hotels were leased to third-party lessees, respectively. SAB 101 has no effect on rent payments under the Company's third-party leases or the Company's cash flow and no impact on full year revenue.
RFS HOTEL INVESTORS, INC.
CALCULATION OF FFO AND EBITDA
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2002 AND 2001
(in thousands, except per share data)
| Three Months Ended | Six Months Ended | ||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| June 30, 2002 | June 30, 2001 | June 30, 2002 | June 30, 2001 | ||||||||||
Funds from operations: | ||||||||||||||
Net income (loss) | $ | 3,769 | $ | 9,641 | $ | (3,779 | ) | $ | (21,183 | ) | ||||
Minority interest in income (loss) of Operating Partnership | 119 | 687 | (676 | ) | (1,759 | ) | ||||||||
Hilton lease termination | — | 600 | — | 65,496 | ||||||||||
Deferred income tax provision (benefit) | 130 | 32 | (380 | ) | (24,499 | ) | ||||||||
Debt extinguishment and swap termination costs | — | — | 10,122 | — | ||||||||||
Deferred revenue | 491 | 457 | 1,503 | 1,736 | ||||||||||
Loss (gain) on sale of assets | 10 | (1,200 | ) | (962 | ) | (1,200 | ) | |||||||
Preferred stock dividends | (781 | ) | (782 | ) | (1,562 | ) | (1,562 | ) | ||||||
Depreciation | 7,612 | 7,483 | 14,933 | 14,877 | ||||||||||
Funds from operations | $ | 11,350 | $ | 16,918 | $ | 19,199 | $ | 31,906 | ||||||
Weighted average common shares, partnership units and potential dilutive shares outstanding | 29,676 | 27,474 | 29,013 | 27,452 | ||||||||||
FFO per share | $ | 0.38 | $ | 0.62 | $ | 0.66 | $ | 1.16 | ||||||
Earnings before interest, taxes, depreciation and amortization (EBITDA): | ||||||||||||||
FFO | 11,350 | 16,918 | 19,199 | 31,906 | ||||||||||
Interest expense | 6,511 | 6,216 | 12,555 | 12,772 | ||||||||||
Current income taxes | — | (52 | ) | — | — | |||||||||
Amortization | 739 | 707 | 1,415 | 1,410 | ||||||||||
Preferred stock dividends | 781 | 782 | 1,562 | 1,562 | ||||||||||
Corporate EBITDA | $ | 19,381 | $ | 24,571 | $ | 34,731 | $ | 47,650 | ||||||
RFS HOTEL INVESTORS, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands)
| June 30, 2002 | December 31, 2001 | ||||||||
---|---|---|---|---|---|---|---|---|---|---|
ASSETS | ||||||||||
Investment in hotel properties, net | $ | 605,326 | $ | 615,562 | ||||||
Cash and cash equivalents | 10,473 | 5,735 | ||||||||
Restricted cash | 5,375 | 6,817 | ||||||||
Accounts receivable | 5,105 | 5,533 | ||||||||
Deferred expenses, net | 8,764 | 6,964 | ||||||||
Other assets | 3,674 | 3,517 | ||||||||
Deferred income taxes | 25,114 | 24,734 | ||||||||
Total assets | $ | 663,831 | $ | 668,862 | ||||||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||||
Accounts payable and accrued expenses (including deferred rent) | $ | 24,918 | $ | 20,857 | ||||||
Borrowings on Line of Credit | 9,250 | 81,188 | ||||||||
Long-term obligations | 285,530 | 219,947 | ||||||||
Minority interest in Operating Partnership, 2,459 units issued and outstanding at June 30, 2002 and December 31, 2001, respectively | 29,244 | 31,059 | ||||||||
Total liabilities | 348,942 | 353,051 | ||||||||
Preferred Stock, $.01 par value, 5,000 shares authorized, 250 shares issued and outstanding at December 31, 2001 | 25,000 | |||||||||
Commitments and contingencies | ||||||||||
Shareholders' equity: | ||||||||||
Common Stock, $.01 par value, 100,000 shares authorized, 29,041 and 25,811 shares issued at June 30, 2002 and December 31, 2001, respectively | 290 | 258 | ||||||||
Additional paid-in capital | 409,333 | 368,361 | ||||||||
Other comprehensive income | — | (3,220 | ) | |||||||
Treasury stock, at cost, 576 shares | (8,100 | ) | (8,100 | ) | ||||||
Distributions in excess of earnings | (86,634 | ) | (66,488 | ) | ||||||
Total shareholders' equity | 314,889 | 290,811 | ||||||||
Total liabilities, preferred stock and shareholders' equity | $ | 663,831 | $ | 668,862 | ||||||
RFS Hotel Investors, Inc.
Market Segment Diversification
For the three months ended June 30, 2002
| ADR | Occupancy | REVPAR | ||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Segment | 2002 | Variance vs. 2001 | 2002 | Variance vs. 2001 | 2002 | Variance vs. 2001 | |||||||||
Full Service | $ | 101.98 | (11.6 | )% | 69.2 | % | (4.1 pts | ) | $ | 70.52 | (16.6 | )% | |||
Extended Stay | $ | 95.58 | (2.6 | )% | 78.8 | % | (3.2 pts | ) | $ | 75.28 | (6.5 | )% | |||
Limited Service | $ | 69.61 | (2.0 | )% | 71.2 | % | (3.0 pts | ) | $ | 49.59 | (5.9 | )% | |||
Total | $ | 88.10 | (6.3 | )% | 72.5 | % | (3.4 pts | ) | $ | 63.85 | (10.6 | )% | |||
For the six months ended June 30, 2002
| ADR | Occupancy | REVPAR | ||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Segment | 2002 | Variance vs. 2001 | 2002 | Variance vs. 2001 | 2002 | Variance vs. 2001 | |||||||||
Full Service | $ | 101.47 | (13.4 | )% | 64.7 | % | (7.1 pts | ) | $ | 65.60 | (22.0 | )% | |||
Extended Stay | $ | 95.99 | (1.9 | )% | 78.1 | % | (4.2 pts | ) | $ | 75.00 | (6.9 | )% | |||
Limited Service | $ | 70.46 | (1.6 | )% | 66.1 | % | (4.1 pts | ) | $ | 46.54 | (7.5 | )% | |||
Total | $ | 88.55 | (6.9 | )% | 68.7 | % | (5.3 pts | ) | $ | 60.86 | (13.5 | )% | |||
Includes all 58 hotels owned.
RFS Hotel Investors, Inc.
Brand Diversification
| Hotel Properties | Second Quarter RevPAR vs. 2001 | Year to Date RevPAR vs. 2001 | Hotel EBITDA(1) | Percentage of Total EBITDA(1) | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Marriott International, Inc. | ||||||||||||||
Residence Inn | 14 | (6.1 | )% | (6.5 | )% | $ | 23,196 | 32 | % | |||||
TownePlace Suites | 3 | (6.9 | )% | (9.1 | )% | 2,162 | 3 | % | ||||||
Courtyard | 1 | (14.5 | )% | (20.2 | )% | 1,020 | 1 | % | ||||||
36 | % | |||||||||||||
Hilton Hotels Corporation | ||||||||||||||
Hampton Inn | 17 | (4.4 | )% | (4.9 | )% | 13,641 | 19 | % | ||||||
Doubletree | 1 | (13.0 | )% | (16.4 | )% | 2,832 | 4 | % | ||||||
Hilton | 1 | (13.8 | )% | (20.7 | )% | 1,599 | 2 | % | ||||||
Homewood Suites | 1 | (15.6 | )% | (11.9 | )% | 494 | 1 | % | ||||||
26 | % | |||||||||||||
Starwood Hotels & Resorts | ||||||||||||||
Sheraton | 4 | (15.5 | )% | (24.0 | )% | 8,382 | 12 | % | ||||||
Four Points | 2 | (13.5 | )% | (18.2 | )% | 3,905 | 5 | % | ||||||
17 | % | |||||||||||||
Six Continents PLC | ||||||||||||||
Holiday Inn | 5 | (3.5 | )% | (8.8 | )% | 8,200 | 11 | % | ||||||
Holiday Inn Express | 5 | (12.8 | )% | (17.5 | )% | 3,794 | 5 | % | ||||||
16 | % | |||||||||||||
Top Four Frachisors | 54 | (8.6 | )% | (11.8 | )% | 69,225 | 95 | % | ||||||
Other | 4 | (31.9 | )% | (32.2 | )% | 3,947 | 5 | % | ||||||
Portfolio Total | 58 | (10.6 | )% | (13.5 | )% | $ | 73,172 | 100 | % | |||||
- (1)
- For the trailing twelve months ended June 30, 2002, in thousands.
RFS Hotel Investors, Inc.
Geographic Diversification
| Hotel Properties | Second Quarter RevPAR vs. 2001 | Year to Date RevPAR vs. 2001 | Hotel EBITDA(1) | Percentage of Total EBITDA(1) | ||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
California (see below) | 10 | (21.5 | )% | (25.0 | )% | $ | 23,347 | 32 | % | ||||
Florida | 7 | (15.2 | )% | (14.1 | )% | 7,018 | 10 | % | |||||
Texas | 6 | (1.4 | )% | (2.7 | )% | 5,890 | 8 | % | |||||
Michigan | 3 | (14.3 | )% | (16.0 | )% | 4,231 | 6 | % | |||||
Illinois | 3 | (10.5 | )% | (15.4 | )% | 3,981 | 5 | % | |||||
New York | 1 | 15.6 | % | 15.5 | % | 3,592 | 5 | % | |||||
Minnesota | 3 | (15.4 | )% | (16.9 | )% | 2,684 | 4 | % | |||||
Missouri | 2 | 1.7 | % | (9.7 | )% | 2,593 | 4 | % | |||||
Georgia | 2 | (5.6 | )% | (4.4 | )% | 1,983 | 3 | % | |||||
Rhode Island | 1 | (0.4 | )% | (2.7 | )% | 1,786 | 2 | % | |||||
Oklahoma | 2 | (4.9 | )% | (4.3 | )% | 1,762 | 2 | % | |||||
Louisiana | 1 | 0.7 | % | (7.2 | )% | 1,637 | 2 | % | |||||
Delaware | 1 | 3.5 | % | 1.6 | % | 1,528 | 2 | % | |||||
Others (2) | 16 | (0.6 | )% | (3.3 | )% | 11,140 | 15 | % | |||||
Portfolio Total | 58 | (10.6 | )% | (13.5 | )% | $ | 73,172 | 100 | % | ||||
| Hotel Properties | Second Quarter RevPAR vs. 2001 | Year to Date RevPAR vs. 2001 | Hotel EBITDA(1) | Percentage of Total EBITDA(1) | ||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Silicon Valley | 4 | (32.7 | )% | (35.5 | )% | 10,489 | 14 | % | |||||
Los Angeles Area | 2 | (8.4 | )% | (10.2 | )% | 5,189 | 7 | % | |||||
San Francisco | 2 | (17.2 | )% | (23.9 | )% | 2,352 | 3 | % | |||||
San Diego | 1 | (13.0 | )% | (16.4 | )% | 2,717 | 4 | % | |||||
Sacramento | 1 | (6.9 | )% | (4.9 | )% | 2,600 | 4 | % | |||||
California Total | 10 | (21.5 | )% | (25.0 | )% | $ | 23,347 | 32 | % | ||||
- (1)
- For the trailing twelve months ended June 30, 2002, in thousands.
- (2)
- We own hotels in each of the following states which individually represent less than 2% of total Hotel EBITDA: Alabama (1), Arizona (3), Colorado (2), Indiana (1), Kentucky (1), Mississippi (1), Nebraska (2), North Carolina (1), South Carolina (2), Tennessee (1) and Wisconsin (1).
RFS Hotel Investors, Inc.
RETURN ON INVESTMENT ANALYSIS (1)
As of June 30, 2002
(Amounts in thousands)
Unleveraged Return on Investment
| Total Investment, Before Depreciation(2) | EBITDA for the TTM ended June 30, 2002 | Unleveraged Return on Investment | ||||||
---|---|---|---|---|---|---|---|---|---|
Full Service | $ | 377,090 | $ | 27,594 | 7.3 | % | |||
Extended Stay | $ | 221,687 | $ | 25,852 | 11.7 | % | |||
Limited Service | $ | 211,450 | $ | 19,726 | 9.3 | % | |||
Total | $ | 810,227 | $ | 73,172 | 9.0 | % | |||
Leveraged Return on Investment
EBITDA for the TTM ended June 30, 2002 | $ | 73,172 | ||
Less: Interest expense | (24,172 | )(3) | ||
$ | 49,000 | |||
Equity investment after 36% leverage | $ | 515,447 | ||
Leveraged Return on Investment | 9.5 | % | ||
- (1)
- Includes all 58 hotels owned at June 30, 2002.
- (2)
- Total investment includes original cost and all capital expenditures since acquisition. Also includes the costs associated with the Hilton lease termination of approximately $60 million. These costs were required to be written-off as a cancellation of executory contracts and therefore are not included on the balance sheet. However, for return on investment analysis, this amount is included in the total investment.
- (3)
- $294.8 million at an average annual rate of 8.2% (weighted average cost of debt at June 30, 2002).
RFS HOTEL INVESTORS, INC.
OUTSTANDING DEBT
June 30, 2002
| Balance | Interest Rate | Maturity | ||||||
---|---|---|---|---|---|---|---|---|---|
| (in thousands) | | | | |||||
Line of Credit | $ | 9,250 | LIBOR + 200bp | Variable | July 2004 | ||||
Senior Notes | 125,000 | 9.75% | Fixed | March 2012 | |||||
Mortgage | 91,348 | 7.83% | Fixed | December 2008 | |||||
Mortgage | 18,117 | 8.22% | Fixed | November 2007 | |||||
Mortgage | 51,065 | 8.00% | Fixed | August 2010 | |||||
$ | 294,780 | ||||||||
| Debt Maturities | ||
---|---|---|---|
| (in millions) | ||
2002 | $ | 1.3 | |
2003 | 2.7 | ||
2004 | 12.1 | ||
2005 | 3.2 | ||
2006 | 3.4 | ||
Thereafter | 272.1 | ||
$ | 294.8 | ||
Weighted average maturity of fixed rate debt is 8.1 years.
RFS Hotel Investors, Inc. Key Company Statistics QUARTER ENDED JUNE 30, 2002
Operating Statistics
Capital Statistics
RFS HOTEL INVESTORS, INC. CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2002 AND 2001 (in thousands, except per share data)
RFS HOTEL INVESTORS, INC. CALCULATION OF FFO AND EBITDA FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2002 AND 2001 (in thousands, except per share data)
RFS HOTEL INVESTORS, INC. CONSOLIDATED BALANCE SHEETS (in thousands)
RFS Hotel Investors, Inc. Market Segment Diversification
RFS Hotel Investors, Inc. Brand Diversification
RFS Hotel Investors, Inc. Geographic Diversification
California Diversification
RFS Hotel Investors, Inc. RETURN ON INVESTMENT ANALYSIS (1) As of June 30, 2002 (Amounts in thousands)
Unleveraged Return on Investment
Leveraged Return on Investment
RFS HOTEL INVESTORS, INC. OUTSTANDING DEBT June 30, 2002