Exhibit 99.1
|
| | |
| | 545 E. JOHN CARPENTER FREEWAY, SUITE 1300 IRVING, TX 75062 PH: 972-444-4900 F: 972-444-4949 WWW.FELCOR.COM NYSE: FCH |
For Immediate Release:
FELCOR REPORTS FIRST QUARTER RESULTS
• Core RevPAR increased 6.7% and core hotel EBITDA increased 13%
• Asset sale program progressing as planned
IRVING, Texas…April 30, 2013 - FelCor Lodging Trust Incorporated (NYSE: FCH), today reported operating results for the first quarter ended March 31, 2013.
Highlights:
| |
| • | RevPAR for 45 core hotels increased 6.7%. |
| |
| • | Total revenue increased 6.1%, driven by a 5.5% increase in RevPAR at 65 same-store hotels. |
| |
| • | Same-store Adjusted EBITDA was $37.7 million, a 13.3% increase. |
| |
| • | Adjusted FFO per share improved to a loss of $0.01 and net loss per share was $0.29. |
| |
| • | Currently under negotiations or have agreed to sell six non-strategic hotels. |
Commenting on operating results, Richard A. Smith, President and Chief Executive Officer of FelCor, said, “I am very pleased with our performance during the quarter. Our high quality, diverse portfolio continues to produce strong results. Industry fundamentals remain very favorable, as demand growth remains robust and supply growth remains historically low. We expect these trends to continue for the foreseeable future, which will provide favorable conditions for sustained RevPAR growth.”
Added Mr. Smith, “We continue to make substantial progress toward completing the transformation and repositioning of FelCor, building a first-class REIT and driving stockholder value. We have sold 19 of 39 non-strategic hotels, with six more either under contract or in negotiations. Our portfolio has improved significantly, as more than 90% of our EBITDA is now generated by upper upscale and luxury hotels strategically located around the country in gateway and resort markets with high barriers-to-entry and dynamic demand generators. We have also strengthened our balance sheet significantly. As asset sales continue and EBITDA increases, we are building greater financial flexibility and leverage will continue to decline.”
FelCor Lodging Trust Incorporated First Quarter 2013 Operating Results
April 30, 2013
Page 2
Summary of First Quarter Operating Results:
|
| | | | | | | | | |
| | First Quarter |
| $ in millions, except for per share information | 2013 | | 2012 | | Change |
| Total revenue | $ | 220.7 |
| | $ | 208.0 |
| | 6.1% |
| Same-store Adjusted EBITDA | $ | 37.7 |
| | $ | 33.3 |
| | 13.3% |
| Adjusted EBITDA | $ | 37.7 |
| | $ | 41.4 |
| | (9.0)% |
| Adjusted FFO per share | $ | (0.01 | ) | | $ | (0.02 | ) | | $0.01 |
| Net loss per share | $ | (0.29 | ) | | $ | (0.31 | ) | | $0.02 |
Revenue per available room (“RevPAR”) for 65 same-store hotels was $100.17, a 5.5% increase compared to the same period in 2012. The increase reflects a 5.0% increase in average daily rate (“ADR”) to $143.90 and a 30 basis point increase in occupancy to 69.6%. RevPAR for our 45 core hotels increased 6.7%, while RevPAR for our 20 non-strategic hotels increased 1.2%. RevPAR at the six newly-acquired and recently-redeveloped hotels increased 17.8% during the quarter. Total revenue increased 6.1% from the same period in 2012.
Hotel EBITDA was $48.0 million, 8.3% higher than the same period in 2012. Hotel EBITDA margin was 21.8% during the quarter, a 44 basis point increase from the same period in 2012. Adjusted EBITDA (which includes Adjusted EBITDA for sold hotels prior to sale) was $37.7 million compared to $41.4 million for the same period in 2012.
Adjusted funds from operations (“Adjusted FFO”) was a loss of $773,000, or $0.01 per share, compared to a loss of $0.02 per share in 2012. Net loss attributable to common stockholders was $35.9 million, or $0.29 per share for the quarter ended March 31, 2013, compared to a net loss of $38.1 million, or $0.31 per share, for the same period in 2012.
Summary of Core Hotel Results:
|
| | | | | | | | | | | |
| | First Quarter |
| | 2013 | | 2012 | | Change |
| Hotel RevPAR | $ | 106.16 |
| | $ | 99.47 |
| | 6.7 | % | |
| Hotel EBITDA, in millions | $ | 37.0 |
| | $ | 32.8 |
| | 12.6 | % | |
| Hotel EBITDA margin | 21.0 | % | | 20.1 | % | | 91 |
| bps |
Total revenue for our 45 core hotels increased 7.7% compared to the same period in 2012, driven by a 6.7% increase in RevPAR to $106.16. The increase in RevPAR reflects a 6.0% increase in ADR to $154.23 and a 40 basis point increase in occupancy to 68.8%. Hotel EBITDA at our core hotels increased 12.6% to $37.0 million. Hotel EBITDA margin at our core hotels was 21.0% during the quarter, a 91 basis point increase compared to the same period in 2012.
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 18 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.
FelCor Lodging Trust Incorporated First Quarter 2013 Operating Results
April 30, 2013
Page 3
Portfolio Repositioning:
To date, we have sold 19 of 39 non-strategic hotels as part of our portfolio repositioning plan. We are currently marketing 11 non-strategic hotels and are evaluating offers or have agreed to sell six of those, including one under contract. We will use the proceeds from dispositions to repay debt and reduce leverage. The other nine non-strategic hotels are owned by joint ventures, and we are progressing on discussions with our partners to facilitate marketing those properties.
In March, we successfully re-branded and transitioned management at eight Holiday Inn hotels to Wyndham brands. Wyndham Worldwide Corporation is providing a $100 million guaranty over the 10-year term of the agreement, with an annual guaranty of up to $21.5 million, that ensures a minimum annual NOI for the eight hotels. In addition, the management fee structure is more consistent with prevailing industry practices, and we expect to save approximately $50 million in management fees over the initial term. The guaranty protects approximately 20% of our core hotel-level EBITDA from future lodging cycle fluctuations, in addition to ensuring a return on investment that is superior to the hotels' historical performance.
Capital Expenditures:
Capital expenditures at our operating hotels (including our pro rata share of joint ventures), were $23.5 million during the quarter (including approximately $6.4 million for redevelopment projects and repositioning the eight Wyndham hotels).
During 2013, we anticipate investing approximately $65 million on capital improvements and renovations, concentrated mostly at seven hotels, as part of our 20-year capital plan. In addition, we anticipate investing approximately $40 million on redevelopment projects (excluding Knickerbocker) and repositioning the Wyndham hotels. Please see page 12 of this release for more detail on renovations.
Through March 31, 2013, we have spent $35 million to redevelop the 4+ star Knickerbocker Hotel, in midtown Manhattan. The project remains on budget and is scheduled to open in early 2014.
Balance Sheet:
At March 31, 2013, we had $1.7 billion of consolidated debt bearing a weighted-average interest rate of 6.3% (approximately 120 basis points below last year). Our debt has a weighted-average maturity of seven years, and none of our debt matures before June 2014. We had $61.8 million of cash and cash equivalents at March 31, 2013. In addition, at March 31, 2013 we had $77.1 million of restricted cash, of which $64.9 million secures our Knickerbocker construction loan.
FelCor Lodging Trust Incorporated First Quarter 2013 Operating Results
April 30, 2013
Page 4
Andrew J. Welch, FelCor's Executive Vice President and Chief Financial Officer, said, “Our balance sheet is stronger today because of our low borrowing costs, extended weighted-average debt maturity and ample liquidity. We are committed to making our balance sheet even stronger, as we repay higher-cost debt with net sale proceeds, further improve our maturity profile and continue to reduce our overall leverage.”
Outlook:
Our 2013 outlook assumes continued strength in lodging fundamentals and has been updated to reflect first quarter results and timing of asset sales. Our outlook reflects selling all 11 hotels during 2013. The low-end of our outlook assumes all sales occur in June, and the high-end of our outlook assumes all sales close at the beginning of the fourth quarter.
During 2013, we anticipate:
| |
| • | Same-store RevPAR to increase between 5-6%; |
| |
| • | Adjusted EBITDA to be between $190.5 million and $205.0 million; |
| |
| • | Adjusted FFO per share to be between $0.33 and $0.43; |
| |
| • | Net loss attributable to FelCor to be between $59 million and $51 million; and |
| |
| • | Interest expense, including pro rata share of joint ventures, to be between $104 million and $106 million. |
The following table reconciles our 2013 Adjusted EBITDA to Same-store Adjusted EBITDA outlook (in millions):
|
| | | | | | | |
| | Low | | High |
| Previous Adjusted EBITDA Outlook (65 hotels) | $ | 203.5 |
| | $ | 208.5 |
|
| Improved Operations | 0.5 |
| | — |
|
| Adjusted EBITDA Outlook (65 hotels) | $ | 204.0 |
| | $ | 208.5 |
|
| | | |
EBITDA of sold hotels from closing to December 31(a) | (13.5 | ) |
| (3.5 | ) |
| Adjusted EBITDA Outlook (54 hotels) | $ | 190.5 |
| | $ | 205.0 |
|
Discontinued Operations(b) | (12.5 | ) |
| (22.5 | ) |
| Same-store Adjusted EBITDA (54 hotels) | $ | 178.0 |
| | $ | 182.5 |
|
| |
| (a) | EBITDA of 11 hotels assumed to be sold during 2013 that would have been recognized from the dates of sale through December 31, 2013. |
| |
| (b) | EBITDA of 11 hotels assumed to be sold during 2013 that is forecasted to be generated from January 1, 2013 through the dates of sale. |
About FelCor:
FelCor, a real estate investment trust, owns a diversified portfolio of primarily upper-upscale and luxury hotels that are located in major and resort markets. FelCor partners with leading hotel companies to operate its 66 hotels, which are flagged under globally renowned brands and premier independent hotels. Additional information can be found on the Company’s website at www.felcor.com.
FelCor Lodging Trust Incorporated First Quarter 2013 Operating Results
April 30, 2013
Page 5
We invite you to listen to our first quarter earnings Conference Call on Tuesday, April 30, 2013 at 10:30 a.m. (Central Time). The conference call will be webcast simultaneously on FelCor’s website at www.felcor.com. Interested investors and other parties who wish to access the call can go to FelCor’s website and click on the conference call microphone icon on the “Investor Relations” page. The conference call replay will also be archived on the Company’s website.
With the exception of historical information, the matters discussed in this news release include “forward-looking statements” within the meaning of the federal securities laws. These forward-looking statements are identified by their use of terms and phrases such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “should,” “will,” “continue” and other similar terms and phrases, including references to assumptions and forecasts of future results. Forward-looking statements are not guarantees of future performance. Numerous risks and uncertainties, and the occurrence of future events, may cause actual results to differ materially from those anticipated at the time the forward-looking statements are made. Current economic circumstances or an economic slowdown and the impact on the lodging industry, operating risks associated with the hotel business, relationships with our property managers, risks associated with our level of indebtedness and our ability to meet debt covenants in our debt agreements, our ability to complete acquisitions, dispositions and debt refinancing, the availability of capital, the impact on the travel industry from security precautions, our ability to continue to qualify as a Real Estate Investment Trust for federal income tax purposes and numerous other factors may affect future results, performance and achievements. Certain of these risks and uncertainties are described in greater detail in our filings with the Securities and Exchange Commission. Although we believe our current expectations to be based upon reasonable assumptions, we can give no assurance that our expectations will be attained or that actual results will not differ materially. We undertake no obligation to update any forward-looking statement to conform the statement to actual results or changes in our expectations.
Contact:
Stephen A. Schafer, Vice President Strategic Planning & Investor Relations
(972) 444-4912 sschafer@felcor.com
FelCor Lodging Trust Incorporated First Quarter 2013 Operating Results
April 30, 2013
Page 6
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 ended March 31, 2013.
TABLE OF CONTENTS
|
| | |
| | | Page |
Consolidated Statements of Operations(a) | | |
Consolidated Balance Sheets(a) | | |
| Consolidated Debt Summary | | |
| Schedule of Encumbered Hotels | | |
| Capital Expenditures | | |
| Hotels Under Renovation or Redevelopment During 2013 | | |
| Supplemental Financial Data | | |
| Discontinued Operations | | |
| Hotel Portfolio Composition | | |
| Hotel Operating Statistics by Brand | | |
| Hotel Operating Statistics by Market | | |
| Historical Quarterly Operating Statistics | | |
| Non-GAAP Financial Measures | | |
| |
| (a) | Our consolidated statements of operations and balance sheets have been prepared without audit. Certain information and footnote disclosures normally included in financial statements presented in accordance with GAAP have been omitted. The consolidated statements of operations and balance sheets should be read in conjunction with the consolidated financial statements and notes thereto included in our most recent Annual Report on Form 10-K. |
FelCor Lodging Trust Incorporated First Quarter 2013 Operating Results
April 30, 2013
Page 7
Consolidated Statements of Operations
(in thousands, except per share data)
|
| | | | | | | | |
| | | Three Months Ended |
| | | March 31, |
| | | 2013 | | 2012 |
| Revenues: | | | | |
| Hotel operating revenue: | | | | |
| Room | | $ | 170,379 |
| | $ | 161,779 |
|
| Food and beverage | | 38,464 |
| | 34,821 |
|
| Other operating departments | | 11,448 |
| | 11,090 |
|
| Other revenue | | 399 |
| | 275 |
|
| Total revenues | | 220,690 |
| | 207,965 |
|
| Expenses: | | | | |
| Hotel departmental expenses: | | | | |
| Room | | 47,593 |
| | 44,971 |
|
| Food and beverage | | 31,462 |
| | 28,345 |
|
| Other operating departments | | 5,480 |
| | 5,445 |
|
| Other property-related costs | | 63,108 |
| | 60,482 |
|
| Management and franchise fees | | 9,654 |
| | 9,778 |
|
| Taxes, insurance and lease expense | | 22,667 |
| | 21,710 |
|
| Corporate expenses | | 7,832 |
| | 8,212 |
|
| Depreciation and amortization | | 31,570 |
| | 30,068 |
|
| Conversion expenses | | 628 |
| | — |
|
| Other expenses | | 821 |
| | 963 |
|
| Total operating expenses | | 220,815 |
| | 209,974 |
|
| Operating loss | | (125 | ) | | (2,009 | ) |
| Interest expense, net | | (26,483 | ) | | (30,814 | ) |
| Debt extinguishment | | — |
| | (7 | ) |
| Loss before equity in income (loss) from unconsolidated entities | | (26,608 | ) | | (32,830 | ) |
| Equity in income (loss) from unconsolidated entities | | 89 |
| | (224 | ) |
| Loss from continuing operations | | (26,519 | ) | | (33,054 | ) |
| Income (loss) from discontinued operations | | (86 | ) | | 4,193 |
|
| Net loss | | (26,605 | ) | | (28,861 | ) |
| Net loss attributable to noncontrolling interests in other partnerships | | 240 |
| | 202 |
|
| Net loss attributable to redeemable noncontrolling interests in FelCor LP | | 180 |
| | 196 |
|
| Net loss attributable to FelCor | | (26,185 | ) | | (28,463 | ) |
| Preferred dividends | | (9,678 | ) | | (9,678 | ) |
| Net loss attributable to FelCor common stockholders | | $ | (35,863 | ) | | $ | (38,141 | ) |
| Basic and diluted per common share data: | | | | |
| Loss from continuing operations | | $ | (0.29 | ) | | $ | (0.34 | ) |
| Net loss | | $ | (0.29 | ) | | $ | (0.31 | ) |
| Basic and diluted weighted average common shares outstanding | | 123,814 |
| | 123,665 |
|
FelCor Lodging Trust Incorporated First Quarter 2013 Operating Results
April 30, 2013
Page 8
Consolidated Balance Sheets
(in thousands)
|
| | | | | | | |
| | March 31, | | December 31, |
| | 2013 | | 2012 |
| Assets | | | |
| Investment in hotels, net of accumulated depreciation of $948,095 and $929,298 at March 31, 2013 and December 31, 2012, respectively | $ | 1,787,016 |
| | $ | 1,794,564 |
|
| Hotel development | 156,081 |
| | 146,079 |
|
| Investment in unconsolidated entities | 52,867 |
| | 55,082 |
|
| Cash and cash equivalents | 61,796 |
| | 45,745 |
|
| Restricted cash | 77,102 |
| | 77,927 |
|
| Accounts receivable, net of allowance for doubtful accounts of $243 and $469 at March 31, 2013 and December 31, 2012, respectively | 34,293 |
| | 25,383 |
|
| Deferred expenses, net of accumulated amortization of $15,438 and $13,820 at March 31, 2013 and December 31, 2012, respectively | 34,035 |
| | 34,262 |
|
| Other assets | 26,096 |
| | 23,391 |
|
| Total assets | $ | 2,229,286 |
| | $ | 2,202,433 |
|
| Liabilities and Equity | | | |
| Debt, net of discount of $8,985 and $10,318 at March 31, 2013 and December 31, 2012, respectively | $ | 1,683,756 |
| | $ | 1,630,525 |
|
| Distributions payable | 8,545 |
| | 8,545 |
|
| Accrued expenses and other liabilities | 147,715 |
| | 138,442 |
|
| Total liabilities | 1,840,016 |
| | 1,777,512 |
|
| Commitments and contingencies | | | |
| Redeemable noncontrolling interests in FelCor LP, 621 units issued and outstanding at March 31, 2013 and December 31, 2012 | 3,697 |
| | 2,902 |
|
| Equity: | | | |
| Preferred stock, $0.01 par value, 20,000 shares authorized: | | | |
| Series A Cumulative Convertible Preferred Stock, 12,880 shares, liquidation value of $322,011, issued and outstanding at March 31, 2013 and December 31, 2012 | 309,362 |
| | 309,362 |
|
| Series C Cumulative Redeemable Preferred Stock, 68 shares, liquidation value of $169,950, issued and outstanding at March 31, 2013 and December 31, 2012 | 169,412 |
| | 169,412 |
|
| Common stock, $0.01 par value, 200,000 shares authorized; 124,122 and 124,117 shares issued and outstanding at March 31, 2013 and December 31, 2012, respectively | 1,241 |
| | 1,241 |
|
| Additional paid-in capital | 2,353,275 |
| | 2,353,581 |
|
| Accumulated other comprehensive income | 25,684 |
| | 26,039 |
|
| Accumulated deficit | (2,500,831 | ) | | (2,464,968 | ) |
| Total FelCor stockholders’ equity | 358,143 |
| | 394,667 |
|
| Noncontrolling interests in other partnerships | 27,430 |
| | 27,352 |
|
| Total equity | 385,573 |
| | 422,019 |
|
| Total liabilities and equity | $ | 2,229,286 |
| | $ | 2,202,433 |
|
FelCor Lodging Trust Incorporated First Quarter 2013 Operating Results
April 30, 2013
Page 9
Consolidated Debt Summary
(dollars in thousands)
|
| | | | | | | | | | | | | | | | | |
| | Encumbered Hotels | | Interest Rate (%) | |
Maturity Date | | March 31,
2013 | | December 31,
2012 |
| Line of credit | 9 |
| | | L + 3.375 |
| | | June 2016(a) | | $ | 109,000 |
| | $ | 56,000 |
|
| Hotel mortgage debt | | | | | | | | | | | |
Mortgage debt(b) | 5 |
|
| | 6.66 |
| | | June - August 2014 | | 64,906 |
| | 65,431 |
|
| Mortgage debt | 1 |
| | | 5.81 |
| | | July 2016 | | 10,280 |
| | 10,405 |
|
Mortgage debt(b) | 4 |
| | | 4.95 |
| | | October 2022 | | 127,733 |
| | 128,066 |
|
| Mortgage debt | 1 |
| | | 4.94 |
| | | October 2022 | | 32,057 |
| | 32,176 |
|
| Senior notes | | | | | | | | | | | |
Senior secured notes(c) | 11 |
| | | 10.00 |
| | | October 2014 | | 224,919 |
| | 223,586 |
|
| Senior secured notes | 6 |
| | | 6.75 |
| | | June 2019 | | 525,000 |
| | 525,000 |
|
| Senior secured notes | 10 |
| | | 5.625 |
| | | March 2023 | | 525,000 |
| | 525,000 |
|
Other(d) | — |
| | | L + 1.25 |
| | | May 2016 | | 64,861 |
| | 64,861 |
|
| Total | 47 |
| | | | | | | | $ | 1,683,756 |
| | $ | 1,630,525 |
|
| |
| (a) | Our $225 million line of credit can be extended for one year (to 2017), subject to satisfying certain conditions. |
| |
| (b) | This debt is comprised of separate non-cross-collateralized loans each secured by a mortgage of a different hotel. |
| |
| (c) | We originally issued $636 million (face amount) of these notes. After redemptions in 2011 and 2012, $234 million (face amount) of these notes were outstanding at March 31, 2013 and December 31, 2012. |
| |
| (d) | This loan is related to our Knickerbocker redevelopment project and is fully secured by restricted cash and a mortgage. Because we were able to assume an existing loan when we purchased this hotel, we were not required to pay any local mortgage recording tax. This loan, which allows us to borrow up to $85 million, can be extended for one year subject to satisfying certain conditions. |
FelCor Lodging Trust Incorporated First Quarter 2013 Operating Results
April 30, 2013
Page 10
Schedule of Encumbered Hotels
(dollars in millions)
|
| | | | | | | | |
| Consolidated | | March 31, 2013 | | |
| Debt | | Balance | | Encumbered Hotels |
| Line of credit | | | $ | 109 |
| | | Charleston Mills House - WYN, Charlotte SouthPark - DT, Dana Point - DTGS, Houston Medical Center - WYN, Mandalay Beach - ES, Miami International Airport - ES, Philadelphia Historic District - WYN, Pittsburgh University Center - WYN and Santa Monica at the Pier - WYN |
CMBS debt(a) | | | $ | 65 |
| | | Atlanta Airport - ES, Austin - DTGS, BWI Airport - ES, Orlando Airport - HI and Phoenix Biltmore - ES |
| CMBS debt | | | $ | 10 |
| | | Indianapolis North - ES |
CMBS debt(a) | | | $ | 128 |
| | | Birmingham - ES, Ft. Lauderdale - ES, Minneapolis Airport - ES and Napa Valley - ES |
| CMBS debt | | | $ | 32 |
| | | Deerfield Beach - ES |
| Senior secured notes (10.00%) | | | $ | 225 |
| | | Atlanta Airport - SH, Boston Beacon Hill - WYN, Myrtle Beach Resort - ES, Nashville Opryland -Airport - HI, New Orleans French Quarter - WYN, Orlando Walt Disney World® - DTGS, San Diego Bayside - WYN, San Francisco Waterfront - ES, San Francisco Fisherman’s Wharf - HI, San Francisco Union Square - MAR and Toronto Airport - HI |
| Senior secured notes (6.75%) | | | $ | 525 |
| | | Boston Copley - FMT, Indian Wells Esmeralda Resort & Spa - REN, Los Angeles International Airport - ES, Morgans, Royalton and St. Petersburg Vinoy Resort & Golf Club - REN |
| Senior secured notes (5.625%) | | | $ | 525 |
| | | Atlanta Buckhead - ES, Baton Rouge - ES, Boston Marlboro - ES, Burlington - SH, Dallas Love Field - ES, Milpitas - ES, Myrtle Beach Resort - HIL, Orlando South - ES, Philadelphia Society Hill - SH and SF South San Francisco - ES |
| |
| (a) | This debt is comprised of separate non-cross-collateralized loans each secured by a mortgage of a different hotel. |
FelCor Lodging Trust Incorporated First Quarter 2013 Operating Results
April 30, 2013
Page 11
Capital Expenditures
(in thousands)
|
| | | | | | | | |
| | | Three Months Ended |
| | | March 31, |
| | | 2013 | | 2012 |
| Improvements and additions to majority-owned hotels | | $ | 23,342 |
| | $ | 41,385 |
|
| Partners’ pro rata share of additions to consolidated joint venture hotels | | (158 | ) | | (360 | ) |
| Pro rata share of additions to unconsolidated hotels | | 337 |
| | 562 |
|
Total additions to hotels(a) | | $ | 23,521 |
| | $ | 41,587 |
|
| |
| (a) | Includes capitalized interest, property taxes, property insurance, ground leases and certain employee costs. |
Hotels Under Renovation or Redevelopment During 2013
|
| | | |
| Renovations | Primary Areas | Start Date | End Date |
| Myrtle Beach Resort-HIL | guestrooms | Oct-2012 | Mar-2013 |
| Napa Valley-ES | public areas(a) | Nov-2012 | Mar-2013 |
| Mandalay Beach-ES | public areas, meeting rooms, F&B(b) | Jan-2013 | May-2013 |
| San Francisco Waterfront-ES | public areas | Feb-2013 | May-2013 |
| Santa Monica Beach - at the Pier-WYN | guestrooms, corridors, public areas | May-2013 | Aug-2013 |
| Ft. Lauderdale-ES | public areas | Aug-2013 | Oct-2013 |
| Orlando - Walt Disney World Resort-DT | guestrooms, corridors(c) | May-2013 | Nov-2013 |
| LAX South - ES | public areas, corridors(d) | Sep-2013 | Dec-2013 |
| Houston Medical Center-WYN | guestrooms, corridors, public areas | Jul-2013 | Dec-2013 |
| Philadelphia - Historic District-WYN | guestrooms, corridors, public areas | Aug-2013 | Jan-2014 |
| Charleston Mills House-WYN | guestrooms, corridors, public areas | Aug-2013 | Jan-2014 |
| Redevelopments | | |
| Morgans | guestroom additions, public areas, fitness area, re-concept F&B | Feb-2012 | June-2013 |
| |
| (a) | Guestroom renovations were completed in April 2012. |
| |
| (b) | Guestroom renovations were completed in May 2012. |
| |
| (c) | Public area renovations were completed in June 2012. |
| |
| (d) | Guest room renovations were completed in February 2013. |
FelCor Lodging Trust Incorporated First Quarter 2013 Operating Results
April 30, 2013
Page 12
Supplemental Financial Data
(in thousands, except per share data)
|
| | | | | | | | |
| | March 31, | | December 31, |
| Total Enterprise Value | | 2013 | | 2012 |
| Common shares outstanding | 124,122 |
| | 124,117 |
|
| Units outstanding | 621 |
| | 621 |
|
| Combined shares and units outstanding | 124,743 |
| | 124,738 |
|
| Common stock price | $ | 5.95 |
| | $ | 4.67 |
|
| Market capitalization | $ | 742,221 |
| | $ | 582,526 |
|
Series A preferred stock(a) | 309,362 |
| | 309,362 |
|
Series C preferred stock(a) | 169,412 |
| | 169,412 |
|
Consolidated debt(b) | 1,683,756 |
| | 1,630,525 |
|
| Noncontrolling interests of consolidated debt | (2,787 | ) | | (2,810 | ) |
| Pro rata share of unconsolidated debt | 73,943 |
| | 74,198 |
|
| Hotel development | (156,081 | ) | | (146,079 | ) |
Cash, cash equivalents and restricted cash(b) | (138,898 | ) | | (123,672 | ) |
| Total enterprise value (TEV) | $ | 2,680,928 |
| | $ | 2,493,462 |
|
| |
| (a) | Book value based on issue price. |
| |
| (b) | Restricted cash includes $64.9 million of cash fully securing $64.9 million of debt that was assumed when we purchased the Knickerbocker. |
FelCor Lodging Trust Incorporated First Quarter 2013 Operating Results
April 30, 2013
Page 13
Discontinued Operations
(in thousands)
Discontinued operations include the results of operations for ten hotels sold in 2012. Condensed financial information for the hotels included in discontinued operations is as follows:
|
| | | | | | | | |
| | | Three Months Ended |
| | | March 31, |
| | | 2013 | | 2012 |
| Operating revenue | | $ | — |
| | $ | 27,840 |
|
| Operating expenses | | (86 | ) | | (22,699 | ) |
| Operating income (loss) | | (86 | ) | | 5,141 |
|
| Interest expense, net | | — |
| | (948 | ) |
| Income (loss) from discontinued operations | | (86 | ) | | 4,193 |
|
| Depreciation and amortization | | — |
| | 2,924 |
|
| Interest expense | | — |
| | 948 |
|
| Adjusted EBITDA from discontinued operations | | $ | (86 | ) | | $ | 8,065 |
|
FelCor Lodging Trust Incorporated First Quarter 2013 Operating Results
April 30, 2013
Page 14
Hotel Portfolio Composition
The following table illustrates the distribution of same-store hotels.
|
| | | | | | | | | | | | | | | | | | |
| Brand | | Hotels | | Rooms | | 2012 Hotel Operating Revenue (in thousands) | | 2012 Hotel EBITDA (in thousands)(a) |
| Embassy Suites Hotels | 20 |
| | | 5,433 |
| | | $ | 256,200 |
| | | $ | 78,389 |
| |
Wyndham and Wyndham Grand(b) | 8 |
| | | 2,526 |
| | | 120,354 |
| | | 37,960 |
| |
| Renaissance and Marriott | 3 |
| | | 1,321 |
| | | 111,976 |
| | | 17,912 |
| |
| DoubleTree by Hilton and Hilton | 5 |
| | | 1,206 |
| | | 56,071 |
| | | 16,706 |
| |
| Sheraton and Westin | 4 |
| | | 1,604 |
| | | 68,369 |
| | | 14,540 |
| |
| Fairmont | 1 |
| | | 383 |
| | | 41,255 |
| | | 4,286 |
| |
| Holiday Inn | 2 |
| | | 968 |
| | | 40,512 |
| | | 4,218 |
| |
| Morgans and Royalton | 2 |
| | | 282 |
| | | 32,129 |
| | | 3,458 |
| |
| Core hotels | 45 |
| | | 13,723 |
| | | 726,866 |
| | | 177,469 |
| |
| Non-strategic hotels | 20 |
| | | 5,099 |
| | | 179,474 |
| | | 48,044 |
| |
| Same-store hotels | 65 |
| | | 18,822 |
| | | $ | 906,340 |
| | | $ | 225,513 |
| |
| | | | | | | | | | | | | |
| Market | | | | | | | | | | | | |
| San Francisco area | 4 |
| | | 1,637 |
| | | $ | 99,659 |
| | | $ | 21,036 |
| |
| Los Angeles area | 3 |
| | | 677 |
| | | 33,287 |
| | | 13,760 |
| |
| South Florida | 3 |
| | | 923 |
| | | 47,298 |
| | | 13,257 |
| |
| Boston | 3 |
| | | 916 |
| | | 68,121 |
| | | 12,126 |
| |
| New York area | 4 |
| | | 817 |
| | | 57,052 |
| | | 9,733 |
| |
| Myrtle Beach | 2 |
| | | 640 |
| | | 36,973 |
| | | 9,429 |
| |
| Atlanta | 3 |
| | | 952 |
| | | 35,410 |
| | | 9,230 |
| |
| Philadelphia | 2 |
| | | 728 |
| | | 36,122 |
| | | 8,882 |
| |
| Tampa | 1 |
| | | 361 |
| | | 45,152 |
| | | 7,957 |
| |
| San Diego | 1 |
| | | 600 |
| | | 26,445 |
| | | 6,688 |
| |
| Other markets | 19 |
| | | 5,472 |
| | | 241,347 |
| | | 65,371 |
| |
| Core hotels | 45 |
| | | 13,723 |
| | | 726,866 |
| | | 177,469 |
| |
| Non-strategic hotels | 20 |
| | | 5,099 |
| | | 179,474 |
| | | 48,044 |
| |
| Same-store hotels | 65 |
| | | 18,822 |
| | | $ | 906,340 |
| | | $ | 225,513 |
| |
| | | | | | | | | | | | | |
| Location | | | | | | | | | | | | |
| Urban | 17 |
| | | 5,305 |
| | | $ | 316,354 |
| | | $ | 74,446 |
| |
| Resort | 10 |
| | | 2,928 |
| | | 183,807 |
| | | 41,475 |
| |
| Airport | 9 |
| | | 2,957 |
| | | 126,906 |
| | | 33,742 |
| |
| Suburban | 9 |
| | | 2,533 |
| | | 99,799 |
| | | 27,806 |
| |
| Core hotels | 45 |
| | | 13,723 |
| | | 726,866 |
| | | 177,469 |
| |
| Non-strategic hotels | 20 |
| | | 5,099 |
| | | 179,474 |
| | | 48,044 |
| |
| Same-store hotels | 65 |
| | | 18,822 |
| | | $ | 906,340 |
| | | $ | 225,513 |
| |
| |
| (a) | Hotel EBITDA is more fully described on page 24. |
| |
| (b) | These hotels converted from Holiday Inn on March 1, 2013. |
FelCor Lodging Trust Incorporated First Quarter 2013 Operating Results
April 30, 2013
Page 15
The following tables set forth occupancy, ADR and RevPAR for the three months ended March 31, 2013 and 2012, and the percentage changes therein for the periods presented, for our same-store Consolidated Hotels included in continuing operations.
Hotel Operating Statistics by Brand
|
| | | | | | | | | | |
| | Occupancy (%) |
| | | Three Months Ended | | | |
| | | March 31, | | | |
| | | 2013 | | 2012 | | %Variance |
| Embassy Suites Hotels | | 73.1 |
| | 74.0 |
| | (1.2 | ) | |
Wyndham and Wyndham Grand(a) | | 63.6 |
| | 71.6 |
| | (11.3 | ) | |
| Renaissance and Marriott | | 74.8 |
| | 73.5 |
| | 1.7 |
| |
| DoubleTree by Hilton and Hilton | | 61.4 |
| | 62.9 |
| | (2.4 | ) | |
| Sheraton and Westin | | 63.4 |
| | 57.6 |
| | 10.1 |
| |
| Fairmont | | 60.3 |
| | 27.7 |
| | 118.2 |
| |
| Holiday Inn | | 68.4 |
| | 60.5 |
| | 13.0 |
| |
| Morgans and Royalton | | 81.0 |
| | 76.0 |
| | 6.7 |
| |
| Core hotels (45) | | 68.8 |
| | 68.4 |
| | 0.6 |
| |
| Non-strategic hotels (20) | | 71.7 |
| | 71.6 |
| | 0.1 |
| |
| Same-store hotels (65) | | 69.6 |
| | 69.3 |
| | 0.5 |
| |
| | | | | | | | |
| | ADR ($) |
| | | Three Months Ended | | | |
| | | March 31, | | | |
| | | 2013 | | 2012 | | %Variance |
| Embassy Suites Hotels | | 153.28 |
| | 146.52 |
| | 4.6 |
| |
Wyndham and Wyndham Grand(a) | | 139.38 |
| | 133.20 |
| | 4.6 |
| |
| Renaissance and Marriott | | 221.01 |
| | 210.58 |
| | 5.0 |
| |
| DoubleTree by Hilton and Hilton | | 146.97 |
| | 133.10 |
| | 10.4 |
| |
| Sheraton and Westin | | 108.13 |
| | 102.24 |
| | 5.8 |
| |
| Fairmont | | 221.26 |
| | 213.15 |
| | 3.8 |
| |
| Holiday Inn | | 112.44 |
| | 109.95 |
| | 2.3 |
| |
| Morgans and Royalton | | 260.05 |
| | 249.85 |
| | 4.1 |
| |
| Core hotels (45) | | 154.23 |
| | 145.45 |
| | 6.0 |
| |
| Non-strategic hotels (20) | | 117.07 |
| | 115.80 |
| | 1.1 |
| |
| Same-store hotels (65) | | 143.90 |
| | 137.10 |
| | 5.0 |
| |
| | | | | | | | |
| | RevPAR ($) |
| | | Three Months Ended | | | |
| | | March 31, | | | |
| | | 2013 | | 2012 | | %Variance |
| Embassy Suites Hotels | | 112.08 |
| | 108.45 |
| | 3.3 |
| |
Wyndham and Wyndham Grand(a) | | 88.60 |
| | 95.43 |
| | (7.2 | ) | |
| Renaissance and Marriott | | 165.32 |
| | 154.82 |
| | 6.8 |
| |
| DoubleTree by Hilton and Hilton | | 90.18 |
| | 83.72 |
| | 7.7 |
| |
| Sheraton and Westin | | 68.51 |
| | 58.86 |
| | 16.4 |
| |
| Fairmont | | 133.52 |
| | 58.96 |
| | 126.5 |
| |
| Holiday Inn | | 76.89 |
| | 66.52 |
| | 15.6 |
| |
| Morgans and Royalton | | 210.76 |
| | 189.78 |
| | 11.1 |
| |
| Core hotels (45) | | 106.16 |
| | 99.47 |
| | 6.7 |
| |
| Non-strategic hotels (20) | | 83.98 |
| | 82.97 |
| | 1.2 |
| |
| Same-store hotels (65) | | 100.17 |
| | 94.97 |
| | 5.5 |
| |
(a) These hotels converted from Holiday Inn on March 1, 2013.
FelCor Lodging Trust Incorporated First Quarter 2013 Operating Results
April 30, 2013
Page 16
Hotel Operating Statistics by Market
|
| | | | | | | | | | | | |
| | Occupancy (%) |
| | | Three Months Ended | | | |
| | | March 31, | | | |
| | | 2013 | | 2012 | | %Variance |
| San Francisco area | | 75.0 |
| | | 73.8 |
| | | 1.7 |
| |
| Los Angeles area | | 69.5 |
| | | 81.0 |
| | | (14.2 | ) | |
| South Florida | | 90.8 |
| | | 86.0 |
| | | 5.5 |
| |
| Boston | | 64.6 |
| | | 49.0 |
| | | 31.8 |
| |
| New York area | | 70.7 |
| | | 68.3 |
| | | 3.6 |
| |
| Myrtle Beach | | 37.0 |
| | | 42.9 |
| | | (13.7 | ) | |
| Atlanta | | 74.4 |
| | | 72.0 |
| | | 3.3 |
| |
| Philadelphia | | 50.6 |
| | | 48.7 |
| | | 3.9 |
| |
| Tampa | | 83.7 |
| | | 84.4 |
| | | (0.8 | ) | |
| San Diego | | 66.5 |
| | | 79.8 |
| | | (16.7 | ) | |
| Other markets | | 68.1 |
| | | 68.3 |
| | | (0.3 | ) | |
| Core hotels (45) | | 68.8 |
| | | 68.4 |
| | | 0.6 |
| |
| Non-strategic hotels (20) | | 71.7 |
| | | 71.6 |
| | | 0.1 |
| |
| Same-store hotels (65) | | 69.6 |
| | | 69.3 |
| | | 0.5 |
| |
| | ADR ($) |
| | | Three Months Ended | | | |
| | | March 31, | | | |
| | | 2013 | | | 2012 | | %Variance |
| San Francisco area | | 162.99 |
| | | 156.02 |
| | | 4.5 |
| |
| Los Angeles area | | 149.72 |
| | | 141.27 |
| | | 6.0 |
| |
| South Florida | | 190.78 |
| | | 184.16 |
| | | 3.6 |
| |
| Boston | | 167.50 |
| | | 151.02 |
| | | 10.9 |
| |
| New York area | | 194.37 |
| | | 186.66 |
| | | 4.1 |
| |
| Myrtle Beach | | 108.94 |
| | | 106.24 |
| | | 2.5 |
| |
| Atlanta | | 113.51 |
| | | 110.84 |
| | | 2.4 |
| |
| Philadelphia | | 131.03 |
| | | 120.14 |
| | | 9.1 |
| |
| Tampa | | 215.29 |
| | | 201.21 |
| | | 7.0 |
| |
| San Diego | | 121.51 |
| | | 121.18 |
| | | 0.3 |
| |
| Other markets | | 146.74 |
| | | 138.15 |
| | | 6.2 |
| |
| Core hotels (45) | | 154.23 |
| | | 145.45 |
| | | 6.0 |
| |
| Non-strategic hotels (20) | | 117.07 |
| | | 115.80 |
| | | 1.1 |
| |
| Same-store hotels (65) | | 143.90 |
| | | 137.10 |
| | | 5.0 |
| |
| | RevPAR ($) |
| | | Three Months Ended | | | |
| | | March 31, | | | |
| | | 2013 | | | 2012 | | %Variance |
| San Francisco area | | 122.28 |
| | | 115.14 |
| | | 6.2 |
| |
| Los Angeles area | | 104.03 |
| | | 114.41 |
| | | (9.1 | ) | |
| South Florida | | 173.22 |
| | | 158.44 |
| | | 9.3 |
| |
| Boston | | 108.19 |
| | | 74.02 |
| | | 46.1 |
| |
| New York area | | 137.42 |
| | | 127.41 |
| | | 7.9 |
| |
| Myrtle Beach | | 40.30 |
| | | 45.55 |
| | | (11.5 | ) | |
| Atlanta | | 84.45 |
| | | 79.82 |
| | | 5.8 |
| |
| Philadelphia | | 66.25 |
| | | 58.49 |
| | | 13.3 |
| |
| Tampa | | 180.26 |
| | | 169.79 |
| | | 6.2 |
| |
| San Diego | | 80.75 |
| | | 96.66 |
| | | (16.5 | ) | |
| Other markets | | 99.89 |
| | | 94.32 |
| | | 5.9 |
| |
| Core hotels (45) | | 106.16 |
| | | 99.47 |
| | | 6.7 |
| |
| Non-strategic hotels (20) | | 83.98 |
| | | 82.97 |
| | | 1.2 |
| |
| Same-store hotels (65) | | 100.17 |
| | | 94.97 |
| | | 5.5 |
| |
FelCor Lodging Trust Incorporated First Quarter 2013 Operating Results
April 30, 2013
Page 17
Historical Quarterly Operating Statistics
|
| | | | | | | | | | | | | |
| | | Occupancy (%) |
| | | | Q2 2012 | | Q3 2012 | | Q4 2012 | | Q1 2013 |
| Core hotels (45) | | | 77.7 |
| | 76.5 |
| | 66.8 |
| | 68.8 |
|
| Non-strategic hotels (20) | | | 75.1 |
| | 73.0 |
| | 67.3 |
| | 71.7 |
|
| Same-store hotels (65) | | | 77.0 |
| | 75.5 |
| | 66.9 |
| | 69.6 |
|
| | | | | | | | | | |
| | | | | | | | | | |
| | | ADR ($) |
| | | | Q2 2012 | | Q3 2012 | | Q4 2012 | | Q1 2013 |
| Core hotels (45) | | | 155.03 |
| | 153.45 |
| | 152.54 |
| | 154.23 |
|
| Non-strategic hotels (20) | | | 117.02 |
| | 119.71 |
| | 116.10 |
| | 117.07 |
|
| Same-store hotels (65) | | | 144.93 |
| | 144.57 |
| | 142.76 |
| | 143.90 |
|
| | | | | | | | | | |
| | | | | | | | | | |
| | | RevPAR ($) |
| | | | Q2 2012 | | Q3 2012 | | Q4 2012 | | Q1 2013 |
| Core hotels (45) | | | 120.49 |
| | 117.40 |
| | 101.92 |
| | 106.16 |
|
| Non-strategic hotels (20) | | | 87.89 |
| | 87.37 |
| | 78.13 |
| | 83.98 |
|
| Same-store hotels (65) | | | 111.61 |
| | 109.22 |
| | 95.57 |
| | 100.17 |
|
FelCor Lodging Trust Incorporated First Quarter 2013 Operating Results
April 30, 2013
Page 18
Non-GAAP Financial Measures
We refer in this release to certain “non-GAAP financial measures.” These measures, including FFO, Adjusted FFO, EBITDA, Adjusted EBITDA, same-store Adjusted EBITDA, Hotel EBITDA and Hotel EBITDA margin, are measures of our financial performance that are not calculated and presented in accordance with generally accepted accounting principles (“GAAP”). The following tables reconcile each of these non-GAAP measures to the most comparable GAAP financial measure. Immediately following the reconciliations, we include a discussion of why we believe these measures are useful supplemental measures of our performance and the limitations of such measures.
Reconciliation of Net Loss to FFO and Adjusted FFO
(in thousands, except per share data)
|
| | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended March 31, |
| | 2013 | 2012 |
| | Dollars | | Shares | | Per Share Amount | | Dollars | | Shares | | Per Share Amount |
| Net loss | $ | (26,605 | ) | | | | | | $ | (28,861 | ) | | | | |
| Noncontrolling interests | 420 |
| | | | | | 398 |
| | | | |
| Preferred dividends | (9,678 | ) | | | | | | (9,678 | ) | | | | |
| Net loss attributable to FelCor common stockholders | (35,863 | ) | | 123,814 |
| | $ | (0.29 | ) | | (38,141 | ) | | 123,665 |
| | $ | (0.31 | ) |
| Depreciation and amortization | 31,570 |
| | — |
| | 0.25 |
| | 30,068 |
| | — |
| | 0.24 |
|
| Depreciation, discontinued operations and unconsolidated entities | 2,706 |
| | — |
| | 0.02 |
| | 5,761 |
| | — |
| | 0.05 |
|
| Noncontrolling interests in FelCor LP | (180 | ) | | 621 |
| | 0.01 |
| | (196 | ) | | 636 |
| | — |
|
| FFO | (1,767 | ) | | 124,435 |
| | (0.01 | ) | | (2,508 | ) | | 124,301 |
| | (0.02 | ) |
| Acquisition costs | 23 |
| | — |
| | — |
| | 38 |
| | — |
| | — |
|
| Debt extinguishment | — |
| | — |
| | — |
| | 7 |
| | — |
| | — |
|
| Severance costs | — |
| | — |
| | — |
| | 380 |
| | — |
| | — |
|
| Conversion expenses | 628 |
| | — |
| | — |
| | — |
| | — |
| | — |
|
| Pre-opening costs, net of noncontrolling interests | 241 |
| | — |
| | — |
| | — |
| | — |
| | — |
|
| Variable stock compensation | 102 |
| | — |
| | — |
| | — |
| | — |
| | — |
|
| Adjusted FFO | $ | (773 | ) | | 124,435 |
|
| $ | (0.01 | ) |
| $ | (2,083 | ) |
| 124,301 |
|
| $ | (0.02 | ) |
FelCor Lodging Trust Incorporated First Quarter 2013 Operating Results
April 30, 2013
Page 19
Reconciliation of Net Loss to EBITDA, Adjusted EBITDA and Same-store Adjusted EBITDA
(in thousands)
|
| | | | | | | |
| | Three Months Ended |
| | March 31, |
| | 2013 | | 2012 |
| Net loss | $ | (26,605 | ) | | $ | (28,861 | ) |
| Depreciation and amortization | 31,570 |
| | 30,068 |
|
| Depreciation, discontinued operations and unconsolidated entities | 2,706 |
| | 5,761 |
|
| Interest expense | 26,505 |
| | 30,862 |
|
| Interest expense, discontinued operations and unconsolidated entities | 672 |
| | 1,625 |
|
| Noncontrolling interests in other partnerships | 240 |
| | 202 |
|
| EBITDA | 35,088 |
| | 39,657 |
|
| Debt extinguishment | — |
| | 7 |
|
| Acquisition costs | 23 |
| | 38 |
|
| Amortization of fixed stock and directors’ compensation | 1,578 |
| | 1,296 |
|
| Severance costs | — |
| | 380 |
|
| Conversion expenses | 628 |
| | — |
|
| Pre-opening costs, net of noncontrolling interests | 241 |
| | — |
|
| Variable stock compensation | 102 |
| | — |
|
| Adjusted EBITDA | 37,660 |
| | 41,378 |
|
| Adjusted EBITDA from discontinued operations | 86 |
| | (8,065 | ) |
| Same-store Adjusted EBITDA | $ | 37,746 |
| | $ | 33,313 |
|
FelCor Lodging Trust Incorporated First Quarter 2013 Operating Results
April 30, 2013
Page 20
Hotel EBITDA and Hotel EBITDA Margin
(dollars in thousands)
|
| | | | | | | | |
| | | Three Months Ended |
| | | March 31, |
| | | 2013 | | 2012 |
| Same-store operating revenue: | | | | |
| Room | | $ | 170,379 |
| | $ | 161,779 |
|
| Food and beverage | | 38,464 |
| | 34,821 |
|
| Other operating departments | | 11,448 |
| | 11,090 |
|
| Same-store operating revenue | | 220,291 |
| | 207,690 |
|
| Same-store operating expense: | | | | |
| Room | | 47,593 |
| | 44,971 |
|
| Food and beverage | | 31,462 |
| | 28,345 |
|
| Other operating departments | | 5,480 |
| | 5,445 |
|
| Other property related costs | | 63,108 |
| | 60,482 |
|
| Management and franchise fees | | 9,654 |
| | 9,778 |
|
| Taxes, insurance and lease expense | | 15,007 |
| | 14,347 |
|
| Same-store operating expense | | 172,304 |
| | 163,368 |
|
| Hotel EBITDA | | $ | 47,987 |
| | $ | 44,322 |
|
| Hotel EBITDA Margin | | 21.8 | % | | 21.3 | % |
|
| | | | | | | |
| | Three Months Ended |
| | March 31, |
| | 2013 | | 2012 |
| Hotel EBITDA - Core (45) | $ | 36,952 |
| | $ | 32,822 |
|
| Hotel EBITDA - Non-strategic (20) | 11,035 |
| | 11,500 |
|
| Hotel EBITDA | $ | 47,987 |
| | $ | 44,322 |
|
| | | | |
| Hotel EBITDA Margin - Core (45) | 21.0 | % | | 20.1 | % |
| Hotel EBITDA Margin - Non-strategic (20) | 24.9 | % | | 26.0 | % |
FelCor Lodging Trust Incorporated First Quarter 2013 Operating Results
April 30, 2013
Page 21
Reconciliation of Same-store Operating Revenue and Same-store Operating Expense to Total Revenue, Total Operating Expense and Operating Loss
(in thousands)
|
| | | | | | | | |
| | | Three Months Ended |
| | | March 31, |
| | | 2013 | | 2012 |
| Same-store operating revenue | | $ | 220,291 |
| | $ | 207,690 |
|
| Other revenue | | 399 |
| | 275 |
|
| Total revenue | | 220,690 |
| | 207,965 |
|
| Same-store operating expense | | 172,304 |
| | 163,368 |
|
Consolidated hotel lease expense(a) | | 9,558 |
| | 9,194 |
|
| Unconsolidated taxes, insurance and lease expense | | (1,898 | ) | | (1,831 | ) |
| Corporate expenses | | 7,832 |
| | 8,212 |
|
| Depreciation and amortization | | 31,570 |
| | 30,068 |
|
| Conversion expenses | | 628 |
| | — |
|
| Other expenses | | 821 |
| | 963 |
|
| Total operating expense |
| 220,815 |
|
| 209,974 |
|
| Operating loss | | $ | (125 | ) | | $ | (2,009 | ) |
| |
| (a) | 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. |
FelCor Lodging Trust Incorporated First Quarter 2013 Operating Results
April 30, 2013
Page 22
Reconciliation of Forecasted Net Loss attributable to FelCor to Forecasted Adjusted FFO
and Adjusted EBITDA
(in millions, except per share data)
|
| | | | | | | | | | | | | | | |
| | Full Year 2013 Guidance |
| | Low | | High |
| | Dollars | | Per Share Amount(a) | | Dollars | | Per Share Amount(a) |
Net loss attributable to FelCor(b) | $ | (59.0 | ) | | | | $ | (51.0 | ) | | |
| Preferred dividends | (39.0 | ) | | | | (39.0 | ) | | |
| Net loss attributable to FelCor common stockholders | (98.0 | ) | | $ | (0.79 | ) | | (90.0 | ) | | $ | (0.73 | ) |
Depreciation(c) | 138.5 |
| | | | 143.0 |
| | |
| FFO | $ | 40.5 |
| | $ | 0.32 |
| | $ | 53.0 |
| | $ | 0.43 |
|
| Pre-opening and conversion costs | 1.0 |
| | | | 1.0 |
| | |
| Adjusted FFO | $ | 41.5 |
| | $ | 0.33 |
| | $ | 54.0 |
| | $ | 0.43 |
|
| | | | | | | | |
Net loss attributable to FelCor(b) | $ | (59.0 | ) | | | | $ | (51.0 | ) | | |
Depreciation(c) | 138.5 |
| | | | 143.0 |
| | |
Interest expense(c) | 104.0 |
| | | | 106.0 |
| | |
| Amortization expense | 6.0 |
| | | | 6.0 |
| | |
| EBITDA | 189.5 |
| | | | 204.0 |
| | |
| Pre-opening and conversion costs | 1.0 |
| | | | 1.0 |
| | |
| Adjusted EBITDA | $ | 190.5 |
| | | | $ | 205.0 |
| | |
| |
| (a) | Weighted average shares are 125.0 million. |
| |
| (b) | For guidance, we have assumed no gains or losses on future asset sales. |
| |
| (c) | Includes pro rata portion of unconsolidated entities. |
FelCor Lodging Trust Incorporated First Quarter 2013 Operating Results
April 30, 2013
Page 23
Substantially all of our non-current assets consist of real estate. Historical cost accounting for real estate assets implicitly assumes that the value of real estate assets diminishes predictably over time. Since real estate values instead have historically risen or fallen with market conditions, most industry investors consider supplemental measures of performance, which are not measures of operating performance under GAAP, to be helpful in evaluating a real estate company’s operations. These supplemental measures are not measures of operating performance under GAAP. However, we consider these non-GAAP measures to be supplemental measures of a hotel REIT’s performance and should be considered along with, but not as an alternative to, net income (loss) attributable to FelCor as a measure of our operating performance.
FFO and EBITDA
The National Association of Real Estate Investment Trusts (“NAREIT”) defines FFO as net income or loss attributable to parent (computed in accordance with GAAP), excluding gains or losses from sales of property, plus depreciation, amortization and impairment losses. FFO for unconsolidated partnerships and joint ventures are calculated on the same basis. We compute FFO in accordance with standards established by NAREIT. This may not be comparable to FFO reported by other REITs that do not define the term in accordance with the current NAREIT definition or that interpret the current NAREIT definition differently than we do.
EBITDA is a commonly used measure of performance in many industries. We define EBITDA as net income or loss attributable to parent (computed in accordance with GAAP) plus interest expenses, income taxes, depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. Adjustments for unconsolidated partnerships and joint ventures are calculated to reflect EBITDA on the same basis.
Adjustments to FFO and EBITDA
We adjust FFO and EBITDA when evaluating our performance because management believes that the exclusion of certain additional items provides useful supplemental information to investors regarding our ongoing operating performance and that the presentation of Adjusted FFO, and Adjusted EBITDA when combined with GAAP net income attributable to FelCor, EBITDA and FFO, is beneficial to an investor’s better understanding of our operating performance.
| |
| • | Gains and losses related to extinguishment of debt and interest rate swaps - We exclude gains and losses related to extinguishment of debt and interest rate swaps from FFO and EBITDA because we believe that it is not indicative of ongoing operating performance of our hotel assets. This also represents an acceleration of interest expense or a reduction of interest expense, and interest expense is excluded from EBITDA. |
FelCor Lodging Trust Incorporated First Quarter 2013 Operating Results
April 30, 2013
Page 24
| |
| • | 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 transaction costs - From time to time, we periodically incur costs that are not indicative of ongoing operating performance. Such costs include, but are not limited to, conversion costs, acquisition costs, pre-opening costs and severance costs. 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. While this amortization is included in corporate expenses and is not separately stated on our statement of operations, excluding this amortization is consistent with the EBITDA definition.
Hotel EBITDA and Hotel EBITDA Margin
Hotel EBITDA and Hotel EBITDA margin are commonly used measures of performance in the hotel industry and give investors a more complete understanding of the operating results over which our individual hotels and brand/managers have direct control. We believe that Hotel EBITDA and Hotel EBITDA margin are useful to investors by providing greater transparency with respect to two significant measures that we use in our financial and operational decision-making. Additionally, using these measures facilitates comparisons with other hotel REITs and hotel owners. We present Hotel EBITDA and Hotel EBITDA margin in a manner consistent with Adjusted EBITDA, however, we also eliminate all revenues and expenses from continuing operations not directly associated with hotel operations, including other income and corporate-level expenses. We eliminate these additional items because we believe property-level results provide investors with supplemental information into the ongoing operational performance of our hotels and the effectiveness of management on a property-level basis. We also eliminate consolidated percentage rent paid to unconsolidated entities, which is effectively eliminated by noncontrolling interests and equity in income from unconsolidated subsidiaries, and include the cost of unconsolidated taxes, insurance and lease expense, to reflect the entire operating costs applicable to our Consolidated Hotels. Hotel EBITDA and Hotel EBITDA margins are presented on a same-store basis.
FelCor Lodging Trust Incorporated First Quarter 2013 Operating Results
April 30, 2013
Page 25
Use and Limitations of Non-GAAP Measures
Our management and Board of Directors use FFO, Adjusted FFO, EBITDA, Adjusted EBITDA, Same-store Adjusted EBITDA, Hotel EBITDA and Hotel EBITDA margin to evaluate the performance of our hotels and to facilitate comparisons between us and other lodging REITs, hotel owners who are not REITs and other capital intensive companies. We use Hotel EBITDA and Hotel EBITDA margin in evaluating hotel-level performance and the operating efficiency of our hotel managers.
The use of these non-GAAP financial measures has certain limitations. These non-GAAP financial measures as presented by us, may not be comparable to non-GAAP financial measures as calculated by other real estate companies. These measures do not reflect certain expenses or expenditures that we incurred and will incur, such as depreciation, interest and capital expenditures. Management compensates for these limitations by separately considering the impact of these excluded items to the extent they are material to operating decisions or assessments of our operating performance. Our reconciliations to the most comparable GAAP financial measures, and our consolidated statements of operations and cash flows, include interest expense, capital expenditures, and other excluded items, all of which should be considered when evaluating our performance, as well as the usefulness of our non-GAAP financial measures.
These non-GAAP financial measures are used in addition to and in conjunction with results presented in accordance with GAAP. They should not be considered as alternatives to operating profit, cash flow from operations, or any other operating performance measure prescribed by GAAP. These non-GAAP financial measures reflect additional ways of viewing our operations that we believe, when viewed with our GAAP results and the reconciliations to the corresponding GAAP financial measures, provide a more complete understanding of factors and trends affecting our business than could be obtained absent this disclosure. Management strongly encourages investors to review our financial information in its entirety and not to rely on a single financial measure.
