Exhibit 99.2
FelCor Lodging Trust Incorporated
Supplemental Information
Three Months and Year Ended December 31, 2006
Date of Issuance February 21, 2007
All dollar amounts shown in this report are in U.S. dollars unless otherwise noted.
This Supplemental Information is neither an offer to sell nor a solicitation to buy any securities of FelCor. Any offers to sell or solicitations to buy any securities of FelCor shall be made only by means of a prospectus.
FelCor Lodging Trust Incorporated
Supplemental Information
Three Months and Year Ended December 31, 2006
TABLE OF CONTENTS
CORPORATE DATA
| Board of Directors and Executive Officers | 4 |
| Equity Research Coverage | 5 |
FINANCIAL HIGHLIGHTS
| Supplemental Financial Data | 6 |
| Consolidated Statements of Operations | 7 |
| Non-GAAP Financial Measures | 8 |
PORTFOLIO DATA
| Detailed Operating Statistics by Brand | 20 |
| Detailed Operating Statistics for FelCor’s Top Markets | 21 |
| Hotel Portfolio Information | 22 |
| Renovation Completion Schedule | 23 |
| Projected Renovation Program Summary | 25 |
| Non-Strategic Hotels Designated as Held for Sale | 26 |
| Unconsolidated Operations | 26 |
This supplement contains registered trademarks owned or licensed by companies other than us, which may include, but are not limited to, Crowne Plaza®, Disneyland®, Doubletree®, Doubletree Guest Suites®, Embassy Suites Hotels®, Hampton Inn®, Harvey Suites®, Hilton®, Hilton Suites®, Holiday Inn®, Holiday Inn & Suites®, Holiday Inn Express®, Holiday Inn Express & Suites®, Holiday Inn Select®, InterContinental®, Sheraton®, Sheraton Suites®, Staybridge Suites®, Walt Disney World® and Westin®.
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,” “will,” “continue” and other similar terms and phrases, including references to assumption 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. General economic conditions, operating risks associated with the hotel business, 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, the cyclical nature of the real estate markets, 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.
2
FelCor Lodging Trust Incorporated
Supplemental Information
Three Months and Year Ended December 31, 2006
CORPORATE DATA
About the Company
In 1994, FelCor Lodging Trust Incorporated, a real estate investment trust (REIT), went public with six hotels, and a market capitalization of $120 million. We are now one of the nation’s largest public lodging REITs and the nation’s largest owner of upper upscale, all-suite hotels. At December 31, 2006, our portfolio was comprised of 83 consolidated hotels in continuing operations located in 23 states and Canada. For these hotels, the operating revenues and expenses are reflected in our consolidated statements of operations because of our majority ownership interests of the operating lessees of these hotels. We also owned 50 percent joint venture interests in five hotels whose operations were accounted for using the equity method. We owned 65 upper upscale hotels and were the largest owner of Embassy Suites Hotels and Doubletree Guest Suites hotels. We had a market capitalization of approximately $3.2 billion.
Strategy
Our long-term strategic plan is to own a diversified portfolio of high quality, upscale hotels flagged under leading brands and then increase shareholder value and return on invested capital by maximizing the use of our real estate and enhancing cash flow. We continually examine our portfolio to address issues of market supply and concentration of risk. In order to achieve our strategic objectives, we have identified four goals: Portfolio Repositioning and Debt Reduction, Internal Growth consisting of a comprehensive renovation program, Redevelopment Projects at 15 hotels and a new asset management approach, and External Growth.
| | | | Public Ratings | | |
| | Corporate | | Senior Unsecured Debt | | Preferred Stock |
Moody’s | | Ba3 | | Ba3 | | B2 |
Standard & Poors | | BB- | | B+ | | B- |
Stock Exchange Listing
Common Stock (NYSE: FCH)
$1.95 Series A Cumulative Convertible Preferred Stock (NYSE: FCHPRA)
8% Series C Cumulative Redeemable Preferred Stock (NYSE: FCHPRC)
Fiscal Year End
December 31
Number of employees
74
Corporate Headquarters
545 E. John Carpenter Frwy., Suite 1300
Irving, TX 75062
(972) 444-4900
Investor/Media Relations Contact
Stephen A. Schafer
Vice President of Investor Relations
(972) 444-4912
sschafer@felcor.com
Information Request
information@felcor.com
3
FelCor Lodging Trust Incorporated
Supplemental Information
Three Months and Year Ended December 31, 2006
Board of Directors
Thomas J. Corcoran, Jr.
Chairman of the Board, FelCor Lodging Trust Incorporated
Melinda J. Bush, C.H.A.
Chairman and Chief Executive Officer, HRW Holdings, LLC
Robert F. Cotter
President and Chief Operating Officer, Starwood Hotels and Resorts (Retired)
Richard S. Ellwood
Private Investor
Thomas C. Hendrick
Executive Vice President of Acquisitions and Development, Kor Group
David C. Kloeppel
Executive Vice President and Chief Financial Officer, Gaylord Entertainment Company
Charles A. Ledsinger, Jr.
Vice Chairman and Chief Executive Officer, Choice Hotels International
Robert H. Lutz, Jr.
President, RL Investments, Inc.
Robert A. Mathewson
President, RGC, Inc.
Richard A. Smith
President and Chief Executive Officer, FelCor Lodging Trust Incorporated
Executive Officers
Richard A. Smith, President and Chief Executive Officer
Michael A. DeNicola, Executive Vice President and Chief Investment Officer
Troy A. Pentecost, Executive Vice President, Director of Asset Management
Andrew J. Welch, Executive Vice President and Chief Financial Officer
Jonathan H. Yellen, Executive Vice President, General Counsel and Secretary
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FelCor Lodging Trust Incorporated
Supplemental Information
Three Months and Year Ended December 31, 2006
Equity Research Coverage
Citigroup Smith Barney | Joshua Attie | (212) 816-1533 |
Deutsche Bank North America | Chris Woronka | (212) 250-5815 |
Friedman, Billings, Ramsey & Co. | Gustavo Sarago | (703) 469-1042 |
Green Street Advisors | John V. Arabia | (949) 640-8780 |
JPMorgan | Harry C. Curtis | (212) 622-6610 |
Lehman Brothers | Felicia Kantor Hendrix | (212) 526-5562 |
Merrill Lynch | David W. Anders | (212) 449-2739 |
Morgan, Keegan & Co. | Napoleon Overton | (901) 579-4865 |
Stifel, Nicolaus & Company | Rod F. Petrik | (410) 454-4131 |
UBS (US) | William B. Truelove | (212) 713-8825 |
Wachovia Securities | Jeffrey J. Donnelly | (617) 603-4262 |
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FelCor Lodging Trust Incorporated
Supplemental Information
Three Months and Year Ended December 31, 2006
FINANCIAL HIGHLIGHTS
Supplemental Financial Data
(in thousands, except per share information, ratios and percentages)
| December 31, |
Total Enterprise Value | 2006 | | 2005 |
Common shares outstanding | | 62,052 | | | | 60,209 | |
Units outstanding | | 1,355 | | | | 2,763 | |
Combined shares and units outstanding | | 63,407 | | | | 62,972 | |
Common stock price at end of period | $ | 21.84 | | | $ | 17.21 | |
Common equity capitalization | $ | 1,384,809 | | | $ | 1,083,748 | |
Series A preferred stock | | 309,362 | | | | 309,362 | |
Series C preferred stock | | 169,412 | | | | 169,412 | |
Consolidated debt | | 1,369,153 | | | | 1,675,280 | |
Minority interest of consolidated debt | | (8,150 | ) | | | (8,137 | ) |
Pro rata share of unconsolidated debt | | 98,731 | | | | 101,940 | |
Cash and cash equivalents | | (124,179 | ) | | | (94,564 | ) |
Total enterprise value (TEV) | $ | 3,199,138 | | | $ | 3,237,041 | |
| | | | | | | |
Dividends Per Share | | | | | | | |
Dividends declared (full year): | | | | | | | |
Common stock | $ | 0.80 | | | $ | 0.15 | |
Series A preferred stock | | 1.95 | | | | 1.95 | |
Series C preferred stock (depositary shares) | | 2.00 | | | | 1.63 | |
| | | | | | | |
Selected Balance Sheet Data | | | | | | | |
Investment in hotels, net | $ | 2,044,285 | | | $ | 2,584,379 | |
Hotels held for sale | | 133,801 | | | | - | |
Total cash and cash equivalents | | 124,179 | | | | 94,564 | |
Total assets | | 2,583,249 | | | | 2,920,263 | |
Total debt | | 1,369,153 | | | | 1,675,280 | |
Total stockholders’ equity | | 1,010,931 | | | | 1,031,793 | |
Total stockholders equity less preferred equity | | 532,157 | | | | 553,019 | |
Book value per common share outstanding | | 8.58 | | | | 9.18 | |
.
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FelCor Lodging Trust Incorporated
Supplemental Information
Three Months and Year Ended December 31, 2006
Consolidated Statements of Operations
(in thousands, except per share data)
| Three Months Ended | | Year Ended |
| December 31, | | December 31, |
| 2006 | | 2005 | | 2006 | | 2005 |
Revenues: | | | | | | | | | | | | | | | |
Hotel operating revenue: | | | | | | | | | | | | | | | |
Room | $ | 185,491 | | | $ | 177,340 | | | $ | 809,466 | | | $ | 742,882 | |
Food and beverage | | 34,928 | | | | 33,710 | | | | 129,200 | | | | 121,836 | |
Other operating departments | | 12,473 | | | | 11,582 | | | | 52,293 | | | | 48,431 | |
Retail space rental and other revenue | | 10 | | | | 23 | | | | 79 | | | | 1,506 | |
Total revenues | | 232,902 | | | | 222,655 | | | | 991,038 | | | | 914,655 | |
| | | | | | | | | | | | | | | |
Expenses: | | | | | | | | | | | | | | | |
Hotel departmental expenses: | | | | | | | | | | | | | | | |
Room | | 47,690 | | | | 46,575 | | | | 199,283 | | | | 187,872 | |
Food and beverage | | 25,249 | | | | 25,376 | | | | 97,012 | | | | 93,136 | |
Other operating departments | | 5,602 | | | | 5,503 | | | | 23,436 | | | | 22,446 | |
Other property related costs | | 66,168 | | | | 63,492 | | | | 270,301 | | | | 255,626 | |
Management and franchise fees | | 11,775 | | | | 10,801 | | | | 51,237 | | | | 45,215 | |
Taxes, insurance and lease expense | | 27,926 | | | | 24,928 | | | | 112,052 | | | | 104,852 | |
Abandoned projects | | 33 | | | | 265 | | | | 33 | | | | 265 | |
Corporate expenses | | 4,778 | | | | 4,917 | | | | 23,308 | | | | 19,025 | |
Depreciation | | 24,483 | | | | 21,733 | | | | 94,579 | | | | 84,448 | |
Total operating expenses | | 213,704 | | | | 203,590 | | | | 871,241 | | | | 812,885 | |
| | | | | | | | | | | | | | | |
Operating income | | 19,198 | | | | 19,065 | | | | 119,797 | | | | 101,770 | |
Interest expense, net | | (24,021 | ) | | | (31,191 | ) | | | (110,867 | ) | | | (121,668 | ) |
Hurricane loss | | - | | | | (4,172 | ) | | | - | | | | (6,481 | ) |
Charge-off of deferred financing costs | | (2,599 | ) | | | (1,448 | ) | | | (3,562 | ) | | | (1,448 | ) |
Early extinguishment of debt | | (12,033 | ) | | | (4,037 | ) | | | (12,471 | ) | | | (4,037 | ) |
Gain on swap terminations | | 1,715 | | | | - | | | | 1,715 | | | | - | |
Loss before equity in income from unconsolidated entities, minority interests and gain (loss) on sale of assets | | (17,740 | ) | | | (21,783 | ) | | | (5,388 | ) | | | (31,864 | ) |
Equity in income from unconsolidated entities | | 1,829 | | | | 1,941 | | | | 11,537 | | | | 10,169 | |
Minority interests | | 867 | | | | 1,799 | | | | 2,508 | | | | 4,310 | |
Gain (loss) on sale of assets | | - | | | | - | | | | (92 | ) | | | 469 | |
Income (loss) from continuing operations | | (15,044 | ) | | | (18,043 | ) | | | 8,565 | | | | (16,916 | ) |
Discontinued operations | | 26,030 | | | | (247,167 | ) | | | 42,480 | | | | (234,699 | ) |
Net income (loss) | | 10,986 | | | | (265,210 | ) | | | 51,045 | | | | (251,615 | ) |
Preferred dividends | | (9,691 | ) | | | (9,679 | ) | | | (38,713 | ) | | | (39,408 | ) |
Issuance costs of redeemed preferred stock | | - | | | | - | | | | - | | | | (6,522 | ) |
Net income (loss) applicable to common stockholders | $ | 1,295 | | | $ | (274,889 | ) | | $ | 12,332 | | | $ | (297,545 | ) |
| | | | | | | | | | | | | | | |
Basic and diluted per common share data: | | | | | | | | | | | | | | | |
Net income (loss) from continuing operations | $ | (0.40 | ) | | $ | (0.47 | ) | | $ | (0.50 | ) | | $ | (1.06 | ) |
Net income (loss) | $ | 0.02 | | | $ | (4.62 | ) | | $ | 0.20 | | | $ | (5.01 | ) |
Basic and diluted weighted average common shares outstanding | | 61,268 | | | | 59,453 | | | | 60,734 | | | | 59,436 | |
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FelCor Lodging Trust Incorporated
Supplemental Information
Three Months and Year Ended December 31, 2006
Discontinued Operations
(in thousands)
Included in discontinued operations are the results of operations of 11 hotels held for sale at December 31, 2006, 11 hotels disposed of in the fourth quarter, eight hotels disposed of in the third quarter of 2006, 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 | | Year Ended |
| December 31, | | December 31, |
| 2006 | | 2005 | | 2006 | | 2005 |
Operating revenue | $ | 32,268 | | | $ | 81,019 | | | $ | 204,494 | | | $ | 343,492 | |
Operating expenses | | 31,891 | | | | 341,604 | | | | 200,958 | | | | 593,211 | |
Operating income (loss) | | 377 | | | | (260,585 | ) | | | 3,536 | | | | (249,719 | ) |
Direct interest costs, net | | (259 | ) | | | (757 | ) | | | (1,206 | ) | | | (10,203 | ) |
Gain on sale of hotels, net of income tax | | 25,902 | | | | 2,501 | | | | 41,222 | | | | 11,736 | |
Gain on sale of land | | 1,958 | | | | - | | | | 1,958 | | | | 317 | |
Debt extinguishment | | (1,071 | ) | | | (8,353 | ) | | | (1,311 | ) | | | (5,815 | ) |
Minority interests | | (877 | ) | | | 20,027 | | | | (1,719 | ) | | | 18,985 | |
Income (loss) from discontinued operations | | 26,030 | | | | (247,167 | ) | | | 42,480 | | | | (234,699 | ) |
Depreciation, net of minority interests | | 2,548 | | | | 8,869 | | | | 15,451 | | | | 37,501 | |
Minority interest in FelCor LP | | 569 | | | | (11,349 | ) | | | 903 | | | | (10,776 | ) |
Interest expense, net of minority interests | | 241 | | | | 748 | | | | 1,168 | | | | 10,191 | |
EBITDA from discontinued operations | | 29,388 | | | | (248,899 | ) | | | 60,002 | | | | (197,783 | ) |
Gain on sale of hotels, net of income tax and minority interests | | (25,902 | ) | | | (2,501 | ) | | | (40,650 | ) | | | (11,736 | ) |
Impairment loss, net of minority interests | | 1,332 | | | | 255,915 | | | | 15,547 | | | | 257,7755 | |
Debt extinguishment, net of minority interests | | 1,069 | | | | 8,353 | | | | 1,285 | | | | 5,815 | |
Abandoned projects | | 79 | | | | - | | | | 79 | | | | - | |
Asset disposition costs | | - | | | | - | | | | - | | | | 1,300 | |
Adjusted EBITDA from discontinued operations | $ | 5,966 | | | $ | 12,868 | | | $ | 36,263 | | | $ | 55,371 | |
Non-GAAP Financial Measures
We refer in this supplement 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.
8
FelCor Lodging Trust Incorporated
Supplemental Information
Three Months and Year Ended December 31, 2006
Non-GAAP Financial Measures (continued)
Reconciliation of Net Income (Loss) to FFO and Adjusted FFO
(in thousands, except per share and unit data)
| Three Months Ended December 31, |
| 2006 | | 2005 |
| Dollars | | Shares | | Per Share Amount | | Dollars | | Shares | | Per Share Amount |
Net income (loss) | $ | 10,986 | | | | | | | | | $ | (265,210 | ) | | | | | | |
Preferred dividends | | (9,691 | ) | | | | | | | | | (9,679 | ) | | | | | | |
Net income (loss) applicable to common stockholders | | 1,295 | | | 61,268 | | $ | 0.02 | | | | (274,889 | ) | | 59,453 | | $ | (4.62 | ) |
Depreciation, continuing operations | | 24,483 | | | - | | | 0.40 | | | | 21,733 | | | - | | | 0.37 | |
Depreciation, unconsolidated entities and discontinued operations | | 5,533 | | | - | | | 0.09 | | | | 11,579 | | | - | | | 0.19 | |
Gain on sale of hotels, net of income tax | | (25,902 | ) | | - | | | (0.43 | ) | | | (2,501 | ) | | - | | | (0.04 | ) |
Minority interest in FelCor LP | | 28 | | | 1,355 | | | 0.01 | | | | (12,623 | ) | | 2,763 | | | (0.03 | ) |
Conversion of options and unvested
restricted stock | | - | | | 371 | | | - | | | | - | | | - | | | - | |
FFO | | 5,437 | | | 62,994 | | | 0.09 | | | | (256,701 | ) | | 62,216 | | | (4.13 | ) |
Impairment loss, discontinued operations | | 1,332 | | | - | | | 0.02 | | | | 255,915 | | | - | | | 4.11 | |
Abandoned projects | | 112 | | | - | | | - | | | | 265 | | | - | | | 0.01 | |
Debt extinguishment loss | | 15,786 | | | - | | | 0.25 | | | | 13,839 | | | - | | | 0.22 | |
Gain on swap termination | | (1,715 | ) | | - | | | (0.03 | ) | | | - | | | - | | | - | |
Unvested restricted stock | | - | | | - | | | - | | | | - | | | 787 | | | - | |
Adjusted FFO | $ | 20,952 | | | 62,994 | | $ | 0.33 | | | $ | 13,318 | | | 63,003 | | $ | 0.21 | |
9
FelCor Lodging Trust Incorporated
Supplemental Information
Three Months and Year Ended December 31, 2006
Non-GAAP Financial Measures (continued)
Reconciliation of Net Income (Loss) to FFO and Adjusted FFO
(in thousands, except per share and unit data)
| Year Ended December 31, |
| 2006 | | 2005 |
| Dollars | | Shares | | Per Share Amount | | Dollars | | Shares | | Per Share Amount |
Net income (loss) | $ | 51,045 | | | | | | | | | $ | (251,615 | ) | | | | | | |
Preferred dividends | | (38,713 | ) | | | | | | | | | (39,408 | ) | | | | | | |
Issuance costs of redeemed preferred stock | | - | | | | | | | | | | (6,522 | ) | | | | | | |
Net income (loss) applicable to common stockholders | | 12,332 | | | 60,734 | | $ | 0.20 | | | | (297,545 | ) | | 59,436 | | $ | (5.01 | ) |
Depreciation, continuing operations | | 94,579 | | | - | | | 1.56 | | | | 84,448 | | | - | | | 1.42 | |
Depreciation, unconsolidated entities and discontinued operations | | 26,911 | | | - | | | 0.44 | | | | 47,759 | | | - | | | 0.80 | |
Gain on sale of hotels, net of income tax | | (40,650 | ) | | - | | | (0.67 | ) | | | (12,124 | ) | | - | | | (0.20 | ) |
Minority interest in FelCor LP | | 279 | | | 1,864 | | | (0.04 | ) | | | (13,677 | ) | | 2,778 | | | (0.08 | ) |
Conversion of options and unvested
restricted stock | | - | | | 327 | | | - | | | | - | | | - | | | - | |
FFO | | 93,451 | | | 62,925 | | | 1.49 | | | | (191,139 | ) | | 62,214 | | | (3.07 | ) |
Issuance costs of redeemed preferred stock | | - | | | - | | | - | | | | 6,522 | | | - | | | 0.10 | |
Impairment loss, discontinued operations | | 15,547 | | | - | | | 0.24 | | | | 257,775 | | | - | | | 4.14 | |
Abandoned projects | | 112 | | | - | | | - | | | | 265 | | | - | | | 0.01 | |
Asset disposition | | - | | | - | | | - | | | | 1,300 | | | - | | | 0.01 | |
Debt extinguishment loss | | 17,472 | | | - | | | 0.28 | | | | 11,300 | | | - | | | 0.18 | |
Gain on swap termination | | (1,715 | ) | | - | | | (0.03 | ) | | | - | | | - | | | - | |
Unvested restricted stock | | - | | | - | | | - | | | | - | | | 647 | | | - | |
Adjusted FFO | $ | 124,867 | | | 62,925 | | $ | 1.98 | | | $ | 86,023 | | | 62,861 | | $ | 1.37 | |
10
FelCor Lodging Trust Incorporated
Supplemental Information
Three Months and Year Ended December 31, 2006
Non-GAAP Financial Measures (continued)
Reconciliation of Net Income (Loss) to EBITDA, Adjusted EBITDA and Same-Store EBITDA
(in thousands)
| Three Months Ended
December 31, | | Year Ended
December 31, |
| 2006 | | | 2005 | | | 2006 | | 2005 |
Net income (loss) | $ | 10,986 | | | $ | (265,210 | ) | | $ | 51,045 | | | $ | (251,615 | ) |
Depreciation, continuing operations | | 24,483 | | | | 21,733 | | | | 94,579 | | | | 84,448 | |
Depreciation, unconsolidated entities and
discontinued operations | | 5,533 | | | | 11,579 | | | | 26,911 | | | | 47,759 | |
Minority interest in FelCor Lodging LP | | 28 | | | | (12,623 | ) | | | 279 | | | | (13,677 | ) |
Interest expense | | 25,538 | | | | 32,646 | | | | 114,909 | | | | 125,707 | |
Interest expense, unconsolidated entities
and discontinued operations | | 2,104 | | | | 2,349 | | | | 7,657 | | | | 16,949 | |
Amortization expense | | 741 | | | | 733 | | | | 5,080 | | | | 2,904 | |
EBITDA | | 69,413 | | | | (208,793 | ) | | | 300,460 | | | | 12,475 | |
Gain on sale of hotels, net of income tax | | (25,902 | ) | | | (2,501 | ) | | | (40,650 | ) | | | (12,124 | ) |
Impairment loss, discontinued operations | | 1,332 | | | | 255,915 | | | | 15,547 | | | | 257,775 | |
Abandoned projects | | 112 | | | | 265 | | | | 112 | | | | 265 | |
Asset disposition costs | | - | | | | - | | | | - | | | | 1,300 | |
Debt extinguishment loss | | 15,786 | | | | 13,839 | | | | 17,472 | | | | 11,300 | |
Gain on swap termination | | (1,715 | ) | | | - | | | | (1,715 | ) | | | - | |
Adjusted EBITDA | | 59,026 | | | | 58,725 | | | | 291,226 | | | | 270,991 | |
Adjusted EBITDA from discontinued operations | | (5,966 | ) | | | (12,868 | ) | | | (36,263 | ) | | | (55,371 | ) |
Same-Store EBITDA | $ | 53,060 | | | $ | 45,857 | | | $ | 254,963 | | | $ | 215,620 | |
11
FelCor Lodging Trust Incorporated
Supplemental Information
Three Months and Year Ended December 31, 2006
Non-GAAP Financial Measures (continued)
Reconciliation of Adjusted EBITDA to Hotel EBITDA
(in thousands)
| Three Months Ended
December 31, | | Year Ended
December 31, |
| 2006 | | 2005 | | 2006 | | 2005 |
Adjusted EBITDA | $ | 59,026 | | | $ | 58,725 | | | $ | 291,226 | | | $ | 270,991 | |
Retail space rental and other revenue | | (10 | ) | | | (23 | ) | | | (79 | ) | | | (1,506 | ) |
Adjusted EBITDA from discontinued operations | | (5,966 | ) | | | (12,868 | ) | | | (36,263 | ) | | | (55,371 | ) |
Equity in income from unconsolidated subsidiaries
(excluding interest and depreciation expense) | | (7,139 | ) | | | (6,637 | ) | | | (31,309 | ) | | | (28,859 | ) |
Minority interest in other partnerships
(excluding interest and depreciation expense) | | 51 | | | | (141 | ) | | | (215 | ) | | | 264 | |
Consolidated hotel lease expense | | 15,190 | | | | 13,695 | | | | 61,054 | | | | 54,689 | |
Unconsolidated taxes, insurance and lease expense | | (1,377 | ) | | | (1,019 | ) | | | (6,273 | ) | | | (5,881 | ) |
Interest income | | (1,517 | ) | | | (1,455 | ) | | | (4,042 | ) | | | (4,039 | ) |
Corporate expenses (excluding amortization expense) | | 4,037 | | | | 4,184 | | | | 18,228 | | | | 16,121 | |
Hurricane loss | | - | | | | 4,172 | | | | - | | | | 6,481 | |
Loss (gain) on sale of other assets | | - | | | | - | | | | 92 | | | | (80 | ) |
Hotel EBITDA | $ | 62,295 | | | $ | 58,633 | | | $ | 292,419 | | | $ | 252,810 | |
| | | | | | | | | | | | | | | | |
Reconciliation of Net Income (Loss) to Hotel EBITDA
(in thousands)
| Three Months Ended
December 31, | | Year Ended
December 31, |
| 2006 | | 2005 | | 2006 | | 2005 |
Net income (loss) | $ | 10,986 | | | $ | (265,210 | ) | | $ | 51,045 | | | $ | (251,615 | ) |
Discontinued operations | | (26,030 | ) | | | 247,167 | | | | (42,480 | ) | | | 234,699 | |
Equity in income from unconsolidated entities | | (1,829 | ) | | | (1,941 | ) | | | (11,537 | ) | | | (10,169 | ) |
Minority interests | | (867 | ) | | | (1,799 | ) | | | (2,508 | ) | | | (4,310 | ) |
Consolidated hotel lease expense | | 15,190 | | | | 13,695 | | | | 61,054 | | | | 54,689 | |
Unconsolidated taxes, insurance and lease expense | | (1,377 | ) | | | (1,019 | ) | | | (6,273 | ) | | | (5,881 | ) |
Interest expense, net | | 24,021 | | | | 31,191 | | | | 110,867 | | | | 121,668 | |
Charge-off of deferred financing costs | | 2,599 | | | | 1,448 | | | | 3,562 | | | | 1,448 | |
Early extinguishment of debt | | 12,033 | | | | 4,037 | | | | 12,471 | | | | 4,037 | |
Gain on swap termination | | (1,715 | ) | | | - | | | | (1,715 | ) | | | - | |
Corporate expenses | | 4,778 | | | | 4,917 | | | | 23,308 | | | | 19,025 | |
Hurricane loss | | - | | | | 4,172 | | | | - | | | | 6,481 | |
Depreciation | | 24,483 | | | | 21,733 | | | | 94,579 | | | | 84,448 | |
Abandoned projects | | 33 | | | | 265 | | | | 33 | | | | 265 | |
Loss (gain) on sale of assets | | - | | | | - | | | | 92 | | | | (469 | ) |
Retail space rental and other revenue | | (10 | ) | | | (23 | ) | | | (79 | ) | | | (1,506 | ) |
Hotel EBITDA | $ | 62,295 | | | $ | 58,633 | | | $ | 292,419 | | | $ | 252,810 | |
12
FelCor Lodging Trust Incorporated
Supplemental Information
Three Months and Year Ended December 31, 2006
Non-GAAP Financial Measures (continued)
Hotel EBITDA and Hotel EBITDA Margin
(dollars in thousands)
| Three Months Ended
December 31, | | | Year Ended
December 31, |
| 2006 | | 2005 | | | 2006 | | 2005 |
Total revenue | $ | 232,902 | | | $ | 222,655 | | | $ | 991,038 | | | $ | 914,655 | |
Retail space rental and other revenue | | (10 | ) | | | (23 | ) | | | (79 | ) | | | (1,506 | ) |
Hotel operating revenue | | 232,892 | | | | 222,632 | | | | 990,959 | | | | 913,149 | |
Hotel operating expenses | | (170,597 | ) | | | (163,999 | ) | | | (698,540 | ) | | | (660,339 | ) |
Hotel EBITDA | $ | 62,295 | | | $ | 58,633 | | | $ | 292,419 | | | $ | 252,810 | |
Hotel EBITDA margin | | 26.7% | | | | 26.3% | | | | 29.5% | | | | 27.7% | |
Reconciliation of Ratio of Operating Income to Total Revenue to Hotel EBITDA Margin
| Three Months Ended December 31, | | Year Ended December 31, |
| 2006 | | 2005 | | 2006 | | 2005 |
Ratio of operating income to total revenue | 8.2 | % | | 8.6 | % | | 12.1 | % | | 11.1 | % |
Retail space rental and other revenue | - | | | - | | | - | | | (0.1 | ) |
Unconsolidated taxes, insurance and lease expense | (0.6 | ) | | (0.5 | ) | | (0.6 | ) | | (0.6 | ) |
Consolidated hotel lease expense | 6.5 | | | 6.2 | | | 6.2 | | | 6.0 | |
Corporate expenses | 2.1 | | | 2.2 | | | 2.3 | | | 2.1 | |
Depreciation | 10.5 | | | 9.8 | | | 9.5 | | | 9.2 | |
Hotel EBITDA margin | 26.7 | % | | 26.3 | % | | 29.5 | % | | 27.7 | % |
Hotel Operating Expense Composition
(dollars in thousands)
| Three Months Ended
December 31, | | Year Ended
December 31, |
| 2006 | | 2005 | | 2006 | | 2005 | |
Reconciliation of total operating expense to hotel operating expense: | | | | | | | | | | | | | | | |
Total operating expenses | $ | 213,704 | | | $ | 203,590 | | | $ | 871,241 | | | $ | 812,885 | |
Unconsolidated taxes, insurance and lease expense | | 1,377 | | | | 1,019 | | | | 6,273 | | | | 5,881 | |
Consolidated hotel lease expense | | (15,190 | ) | | | (13,695 | ) | | | (61,054 | ) | | | (54,689 | ) |
Corporate expenses | | (4,778 | ) | | | (4,917 | ) | | | (23,308 | ) | | | (19,025 | ) |
Abandoned projects | | (33 | ) | | | (265 | ) | | | (33 | ) | | | (265 | ) |
Depreciation | | (24,483 | ) | | | (21,733 | ) | | | (94,579 | ) | | | (84,448 | ) |
Hotel operating expenses | $ | 170,597 | | | $ | 163,999 | | | $ | 698,540 | | | $ | 660,339 | |
| | 69,713 | | | | | | | | | | | | | |
Supplemental information: | | | | | | | | | | | | | | | |
Compensation and benefits expense (included in hotel operating expenses) | $ | 69,713 | | | $ | 68,629 | | | $ | 281,711 | | | $ | 273,478 | |
13
FelCor Lodging Trust Incorporated
Supplemental Information
Three Months and Year Ended December 31, 2006
Non-GAAP Financial Measures (continued)
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 diminish 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. |
14
FelCor Lodging Trust Incorporated
Supplemental Information
Three Months and Year Ended December 31, 2006
Non-GAAP Financial Measures (continued)
| • | 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 adjust EBITDA for gains or losses on the sale of assets because we believe that including them in EBITDA is not consistent with reflecting 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.
15
FelCor Lodging Trust Incorporated
Supplemental Information
Three Months and Year Ended December 31, 2006
Non-GAAP Financial Measures (continued)
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 a single financial measure.
16
FelCor Lodging Trust Incorporated
Supplemental Information
Three Months and Year Ended December 31, 2006
Debt Summary
(dollars in thousands)
Debt Outstanding
| | Encumbered Hotels | | | Interest Rate at December 31, 2006 | | | Final Maturity | | Consolidated Debt | |
Line of credit(a) | none | L + 1.75 | January 2009 | $ | - | |
Senior term notes | none | 8.50 | June 2011 | | 298,911 | |
Senior term notes | none | L + 1.875 | December 2011 | | 215,000 | |
Total line of credit and senior debt | | | | | 513,911 | |
| | | | | | |
Mortgage debt(b) | 12 hotels | L + 0.93 | November 2011 | | 250,000 | |
Mortgage debt | 8 hotels | 6.56 | July 2009 – 2014 | | 97,553 | |
Mortgage debt | 7 hotels | 7.32 | March 2009 | | 124,263 | |
Mortgage debt | 8 hotels | 8.70 | May 2010 | | 169,438 | |
Mortgage debt | 7 hotels | 8.73 | May 2010 | | 122,578 | |
Mortgage debt | 1 hotel | L + 2.85 | August 2008 | | 15,500 | |
Mortgage debt | 1 hotel | 5.81 | July 2016 | | 12,861 | |
Other | 1 hotel | 9.17 | August 2011 | | 4,452 | |
Construction loan(c) | | - | | L + 2.00 | October 2007 | | 58,597 | |
Total mortgage debt | | 45 hotels | | | | | 855,242 | |
| | | | | | |
| | $ | 1,369,153 | |
| | | | | | | | | | | | | | |
| (a) | We have a borrowing capacity of $125 million on our line of credit. The interest on this line can range from 175 to 225 basis points over LIBOR based on our leverage ratio as defined in our line of credit agreement. |
| (b) | This includes three, one-year extension options extending the maturity of this debt from 2008 to 2011. |
| (c) | We have a 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. We have pre sold approximately 98 percent of these condominiums and expect to start repaying the construction loan as the unit sales are finalized, beginning in the second quarter of 2007. |
Debt Statistics at December 31, 2006
Weighted average interest | 7.62% |
Fixed interest rate debt to total debt | 60.6% |
Weighted average maturity of debt | 5 years |
Mortgage debt to total assets | 33.1% |
17
FelCor Lodging Trust Incorporated
Supplemental Information
Three Months and Year Ended December 31, 2006
Debt Summary (continued)
At December 31, 2006, future scheduled principal payments on outstanding debt are as follows (in thousands):
Year | | | Secured Debt | | | | Unsecured Debt | | | | Total | |
2007 | $ | 71,336 | | | $ | - | | | $ | 71,336 | |
2008 | | 29,233 | | | | - | | | | 29,233 | |
2009 | | 142,240 | | | | - | | | | 142,240 | |
2010 | | 274,535 | | | | - | | | | 274,535 | |
2011(a) | | 253,030 | | | | 515,000 | | | | 768,030 | |
2012 and thereafter | | 84,868 | | | | - | | | | 84,868 | |
Discount | | - | | | | (1,089 | ) | | | (1,089 | ) |
Total debt | $ | 855,242 | | | $ | 513,911 | | | $ | 1,369,153 | |
| (a) | Included in this amount is a $250,000 loan that has three, one-year extension options extending the maturity of this debt from 2008 to 2011. |
At December 31, 2006, we had unconsolidated 50 percent investments in ventures that owned an aggregate of 18 hotels. These ventures had approximately $197 million of non-recourse mortgage debt, all of which is secured by hotel assets. Our pro rata share of this non-recourse debt was $99 million.
Financing transactions in 2006:
In January, we retired our $225 million unsecured term loan facility and established a new $125 million unsecured line of credit. In April 2006, we retired an additional $27 million of secured indebtedness and repaid the outstanding balance on our line of credit.
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%, resulting in an annual interest rate savings of $1.5 million.
In October 2006, we sold $215 million of senior secured floating rate notes. These notes bear interest at LIBOR plus 1.875% and mature in 2011. We finalized a $250 million mortgage facility at LIBOR plus 0.93%, which we closed in November 2006.
Proceeds from these two financings along with cash from hotel sales was used to: (i) redeem our $290 million senior floating rate notes due 2011 paying LIBOR plus 4.25% interest and $125 million senior notes due 2007 paying 7.625% interest, and (ii) repay $129 million of mortgage indebtedness.
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FelCor Lodging Trust Incorporated
Supplemental Information
Three Months and Year Ended December 31, 2006
PORTFOLIO DATA
Portfolio Distribution at December 31, 2006
(83 consolidated hotels included in continuing operations, same store basis)
Brand | | | Hotels | | Rooms | | % of Total Rooms | | % of 2006 Hotel EBITDA(a) |
Embassy Suites Hotels | | 47 | | 12,130 | | 51 | | 57 | |
Holiday Inn-branded | | 17 | | 6,301 | | 26 | | 18 | |
Starwood-branded | | 9 | | 3,217 | | 13 | | 15 | |
Doubletree-branded | | 7 | | 1,471 | | 6 | | 7 | |
Hilton-branded | | 2 | | 559 | | 2 | | 2 | |
Other | | 1 | | 403 | | 2 | | 1 | |
Top Markets | | | | | | | | | | |
South Florida area | | 5 | | 1,434 | | 6 | | 7 | |
Atlanta | | 5 | | 1,462 | | 6 | | 7 | |
San Francisco Bay area | | 6 | | 2,141 | | 9 | | 6 | |
Los Angeles area | | 4 | | 898 | | 4 | | 5 | |
Orlando | | 5 | | 1,690 | | 7 | | 5 | |
Dallas | | 4 | | 1,333 | | 6 | | 5 | |
Phoenix | | 3 | | 798 | | 3 | | 4 | |
San Diego | | 1 | | 600 | | 2 | | 4 | |
Minneapolis | | 3 | | 739 | | 3 | | 4 | |
Northern New Jersey | | 3 | | 756 | | 3 | | 3 | |
Washington, D.C. | | 1 | | 443 | | 2 | | 3 | |
Philadelphia | | 2 | | 729 | | 3 | | 3 | |
Chicago | | 3 | | 795 | | 3 | | 3 | |
San Antonio | | 3 | | 874 | | 4 | | 3 | |
Boston | | 2 | | 532 | | 2 | | 3 | |
Location | | | | | | | | | | |
Suburban | | 32 | | 8,200 | | 34 | | 37 | |
Urban | | 20 | | 6,361 | | 26 | | 25 | |
Airport | | 20 | | 6,203 | | 26 | | 24 | |
Resort | | 11 | | 3,317 | | 14 | | 14 | |
Segment | | | | | | | | | | |
Upper-upscale | | 65 | | 17,377 | | 72 | | 81 | |
Full service | | 17 | | 6,301 | | 26 | | 18 | |
Upscale | | 1 | | 403 | | 2 | | 1 | |
| | | | | | | | | | | | |
| (a) | Hotel EBITDA is more fully described on page 15 of this supplement. |
19
FelCor Lodging Trust Incorporated
Supplemental Information
Three Months and Year Ended December 31, 2006
Detailed Operating Statistics by Brand(a)
(83 consolidated hotels included in continuing operations, same store basis)
| Occupancy (%) |
| Three Months Ended December 31, | | Year Ended December 31, |
| 2006 | | 2005 | | %Variance | | 2006 | | 2005 | | %Variance |
Embassy Suites Hotels | 71.0 | | 70.3 | | 0.9 | | | 75.1 | | 74.3 | | 1.1 | |
Holiday Inn-branded hotels | 58.8 | | 67.9 | | (13.4 | ) | | 69.3 | | 72.1 | | (3.9 | ) |
Sheraton-branded hotels | 68.6 | | 71.0 | | (3.2 | ) | | 72.0 | | 74.1 | | (2.8 | ) |
Doubletree-branded hotels | 67.5 | | 69.0 | | (2.2 | ) | | 74.2 | | 72.3 | | 2.7 | |
Other hotels(b) | 58.2 | | 63.6 | | (8.4 | ) | | 66.9 | | 67.3 | | (0.6 | ) |
| | | | | | | | | | | | | |
Total hotels | 66.5 | | 69.2 | | (4.0 | ) | | 72.6 | | 73.1 | | (0.7 | ) |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| ADR ($) |
| Three Months Ended December 31, | | Year Ended December 31, |
| 2006 | | 2005 | | %Variance | | 2006 | | 2005 | | %Variance |
Embassy Suites Hotels | 132.38 | | 124.37 | | 6.4 | | | 134.01 | | 124.36 | | 7.8 | |
Holiday Inn-branded hotels | 109.46 | | 102.45 | | 6.8 | | | 109.59 | | 101.77 | | 7.7 | |
Sheraton-branded hotels | 124.83 | | 116.31 | | 7.3 | | | 123.85 | | 111.20 | | 11.4 | |
Doubletree-branded hotels | 129.91 | | 115.82 | | 12.2 | | | 130.27 | | 117.35 | | 11.0 | |
Other hotels(b) | 120.06 | | 109.16 | | 10.0 | | | 123.23 | | 114.34 | | 7.8 | |
| | | | | | | | | | | | | |
Total hotels | 125.30 | | 116.34 | | 7.7 | | | 125.93 | | 116.04 | | 8.5 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| RevPAR ($) |
| Three Months Ended December 31, | | Year Ended December 31, |
| 2006 | | 2005 | | %Variance | | 2006 | | 2005 | | %Variance |
Embassy Suites Hotels | 93.94 | | 87.43 | | 7.4 | | | 100.60 | | 92.36 | | 8.9 | |
Holiday Inn-branded hotels | 64.38 | | 69.58 | | (7.5 | ) | | 75.93 | | 73.41 | | 3.4 | |
Sheraton-branded hotels | 85.69 | | 82.53 | | 3.8 | | | 89.15 | | 82.35 | | 8.3 | |
Doubletree-branded hotels | 87.69 | | 79.95 | | 9.7 | | | 96.68 | | 84.81 | | 14.0 | |
Other hotels(b) | 69.92 | | 69.43 | | 0.7 | | | 82.50 | | 77.01 | | 7.1 | |
| | | | | | | | | | | | | |
Total hotels | 83.28 | | 80.55 | | 3.4 | | | 91.49 | | 84.86 | | 7.8 | |
| | | | | | | | | | | | | | |
| (a) | Hotels have been excluded in both the current and prior year for those months directly impacted by hurricanes. |
| (b) | Other hotels include two Hilton-branded, one Westin and one Crowne Plaza. |
20
FelCor Lodging Trust Incorporated
Supplemental Information
Three Months and Year Ended December 31, 2006
Detailed Operating Statistics for FelCor’s Top Markets
(83 consolidated hotels included in continuing operations, same store basis)
| Occupancy (%) |
| Three Months Ended December 31, | | Year Ended December 31, |
| 2006 | | 2005 | | %Variance | | 2006 | | 2005 | | %Variance |
South Florida area | 79.6 | | 61.7 | | 29.1 | | | 79.8 | | 78.2 | | 2.1 | |
Atlanta | 68.5 | | 76.3 | | (10.3 | ) | | 75.2 | | 78.1 | | (3.8 | ) |
San Francisco Bay area | 70.3 | | 71.8 | | (2.1 | ) | | 76.0 | | 74.8 | | 1.7 | |
Los Angeles area | 70.0 | | 71.1 | | (1.6 | ) | | 75.2 | | 76.2 | | (1.3 | ) |
Orlando | 69.8 | | 72.7 | | (4.1 | ) | | 76.6 | | 77.6 | | (1.3 | ) |
Dallas | 64.3 | | 69.3 | | (7.2 | ) | | 69.9 | | 66.2 | | 5.6 | |
Phoenix | 69.9 | | 69.1 | | 1.1 | | | 72.9 | | 72.4 | | 0.6 | |
San Diego | 74.9 | | 72.7 | | 3.0 | | | 81.5 | | 81.6 | | (0.2 | ) |
Minneapolis | 66.4 | | 62.2 | | 6.9 | | | 70.2 | | 71.7 | | (2.1 | ) |
Northern New Jersey | 66.3 | | 69.1 | | (4.0 | ) | | 69.3 | | 70.3 | | (1.3 | ) |
Washington, D.C. | 63.3 | | 70.9 | | (10.8 | ) | | 66.4 | | 74.3 | | (10.6 | ) |
Philadelphia | 68.8 | | 71.6 | | (3.9 | ) | | 73.4 | | 74.5 | | (1.5 | ) |
Chicago | 70.8 | | 72.3 | | (2.0 | ) | | 74.9 | | 74.9 | | 0.0 | |
San Antonio | 66.8 | | 71.4 | | (6.3 | ) | | 76.1 | | 76.4 | | (0.3 | ) |
Boston | 62.8 | | 68.7 | | (8.5 | ) | | 73.0 | | 71.0 | | 2.7 | |
| ADR ($) |
| Three Months Ended December 31, | | Year Ended December 31, |
| 2006 | | 2005 | | %Variance | | 2006 | | 2005 | | %Variance |
South Florida area | 130.00 | | 129.20 | | 0.6 | | | 139.51 | | 126.38 | | 10.4 | |
Atlanta | 116.89 | | 111.35 | | 5.0 | | | 118.35 | | 106.28 | | 11.4 | |
San Francisco Bay area | 132.82 | | 118.29 | | 12.3 | | | 130.97 | | 119.14 | | 9.9 | |
Los Angeles area | 139.11 | | 125.15 | | 11.2 | | | 142.74 | | 128.02 | | 11.5 | |
Orlando | 99.77 | | 90.90 | | 9.8 | | | 100.24 | | 93.41 | | 7.3 | |
Dallas | 113.71 | | 108.31 | | 5.0 | | | 112.87 | | 105.34 | | 7.2 | |
Phoenix | 138.53 | | 126.06 | | 9.9 | | | 133.17 | | 121.78 | | 9.3 | |
San Diego | 142.75 | | 123.46 | | 15.6 | | | 140.40 | | 128.47 | | 9.3 | |
Minneapolis | 137.70 | | 131.95 | | 4.4 | | | 137.72 | | 129.39 | | 6.4 | |
Northern New Jersey | 153.89 | | 142.82 | | 7.7 | | | 148.76 | | 138.67 | | 7.3 | |
Washington, D.C. | 164.03 | | 144.42 | | 13.6 | | | 161.75 | | 145.47 | | 11.2 | |
Philadelphia | 138.13 | | 128.60 | | 7.4 | | | 130.00 | | 118.35 | | 9.8 | |
Chicago | 127.64 | | 110.31 | | 15.7 | | | 123.78 | | 107.56 | | 15.1 | |
San Antonio | 102.31 | | 89.36 | | 14.5 | | | 103.94 | | 92.27 | | 12.6 | |
Boston | 153.41 | | 141.89 | | 8.1 | | | 151.65 | | 137.68 | | 10.1 | |
| RevPAR ($) |
| Three Months Ended December 31, | | Year Ended December 31, |
| 2006 | | 2005 | | %Variance | | 2006 | | 2005 | | %Variance |
South Florida area | 103.50 | | 79.69 | | 29.9 | | | 111.31 | | 98.78 | | 12.7 | |
Atlanta | 80.05 | | 84.99 | | (5.8 | ) | | 88.95 | | 83.04 | | 7.1 | |
San Francisco Bay area | 93.34 | | 84.93 | | 9.9 | | | 99.53 | | 89.06 | | 11.8 | |
Los Angeles area | 97.32 | | 88.96 | | 9.4 | | | 107.36 | | 97.56 | | 10.1 | |
Orlando | 69.63 | | 66.13 | | 5.3 | | | 76.78 | | 72.51 | | 5.9 | |
Dallas | 73.11 | | 75.01 | | (2.5 | ) | | 78.94 | | 69.77 | | 13.1 | |
Phoenix | 96.81 | | 87.10 | | 11.1 | | | 97.05 | | 88.21 | | 10.0 | |
San Diego | 106.92 | | 89.78 | | 19.1 | | | 114.36 | | 104.86 | | 9.1 | |
Minneapolis | 91.46 | | 82.01 | | 11.5 | | | 96.69 | | 92.82 | | 4.2 | |
Northern New Jersey | 102.05 | | 98.67 | | 3.4 | | | 103.16 | | 97.47 | | 5.8 | |
Washington, D.C. | 103.76 | | 102.37 | | 1.4 | | | 107.42 | | 108.09 | | (0.6 | ) |
Philadelphia | 95.10 | | 92.13 | | 3.2 | | | 95.36 | | 88.18 | | 8.1 | |
Chicago | 90.38 | | 79.71 | | 13.4 | | | 92.75 | | 80.60 | | 15.1 | |
San Antonio | 68.39 | | 63.76 | | 7.3 | | | 79.14 | | 70.49 | | 12.3 | |
Boston | 96.35 | | 97.41 | | (1.1 | ) | | 110.67 | | 97.80 | | 13.2 | |
| | | | | | | | | | | | | | | | | | | | | | |
21
FelCor Lodging Trust Incorporated
Supplemental Information
Three Months and Year Ended December 31, 2006
Hotel Portfolio Information
Pro Rata Share of Rooms Owned
| Hotels | | Room Count at December 31, 2006 |
Consolidated hotels in continuing operations | 83 | | | | 24,081 | |
Unconsolidated hotel operations | 5 | | | | 761 | |
Total hotels | 88 | | | | 24,842 | |
| | | | | | |
50% joint ventures | 18 | | | | (2,089 | ) |
60% joint ventures | 1 | | | | (214 | ) |
75% joint ventures | 1 | | | | (55 | ) |
90% joint ventures | 3 | | | | (68 | ) |
97% joint venture | 1 | | | | (11 | ) |
Total owned rooms by joint venture partners | | | | | (2,437 | ) |
Pro rata share of rooms owned | | | | | 22,405 | |
Capital Expenditures (dollars in thousands)
| Three Months Ended December 31, | | Year Ended December 31, | |
| 2006 | | 2005 | | 2006 | | 2005 | |
Improvements and additions to consolidated hotels | $60,285 | | $34,677 | | $169,284 | | $111,496 | |
Joint venture partners’ prorata share of additions to hotels | (810 | ) | (479 | ) | (1,840 | ) | (1,215 | ) |
Prorata share of unconsolidated additions to hotels | 2,653 | | 2,682 | | 11,483 | | 7,587 | |
Total additions to hotels(1) | $62,128 | | $36,880 | | $178,927 | | $117,868 | |
| (1) | Includes capitalized interest, property taxes, ground leases and certain employee costs. |
At December 31, 2006, we had incurred $70.7 million of capital expenditures associated with our condominium development project in Myrtle Beach, South Carolina.
22
FelCor Lodging Trust Incorporated
Supplemental Information
Three Months and Year Ended December 31, 2006
Hotel Portfolio Information (continued)
Hotel Renovation Status at December 31, 2006
| Rooms | | % Owned(a) |
Renovation Completion Schedule | | | | |
| | | |
Fourth Quarter 2006 | | | |
Charleston (Mills House - Historic Downtown), SC - Holiday Inn(b) | 214 | | |
Dana Point (Doheny Beach), CA - Doubletree Guest Suites | 195 | | |
Minneapolis (Airport), MN - Embassy Suites(b) | 310 | | |
Napa Valley, CA - Embassy Suites(b) | 205 | | |
Nashville (Airport/Opryland Area), TN - Embassy Suites | 296 | | |
Nashville (Opryland/Airport Briley Parkway), TN - Holiday Inn Select | 382 | | |
Piscataway (Somerset), NJ - Embassy Suites(b) | 221 | | |
Vienna (Tysons Corner), VA - Sheraton(b) | 443 | | 50% |
| | | |
First Quarter 2007 | | | |
Atlanta (Airport), GA - Embassy Suites(b) | 232 | | |
Atlanta (Galleria), GA - Sheraton Suites(b) | 278 | | |
Austin, TX - Doubletree Guest Suites(b) | 189 | | 90% |
Baltimore (BWI Airport), MD - Embassy Suites(b) | 251 | | 90% |
Baton Rouge, LA - Embassy Suites(b) | 223 | | |
Boston (Government Center), MA - Holiday Inn Select | 303 | | |
Charlotte (Southpark), NC - Doubletree Guest Suites | 208 | | |
Chicago (Northshore/Deerfield-Northbrook), IL - Embassy Suites(b) | 237 | | |
Houston (Medical Center), TX - Holiday Inn & Suites | 284 | | |
Lexington (Lexington Green), KY - Hilton Suites(b) | 174 | | |
Orlando (International Airport), FL - Holiday Inn Select(b) | 288 | | |
Orlando (Walt Disney World Resort), FL - Doubletree Guest Suites | 229 | | |
Philadelphia (Historic District), PA - Holiday Inn | 364 | | |
Pittsburgh (At University Center-Oakland), PA - Holiday Inn Select(b) | 251 | | |
San Antonio (International Airport), TX - Holiday Inn Select(b) | 397 | | |
San Francisco (Burlingame Airport), CA - Embassy Suites | 340 | | |
San Francisco (Fisherman's Wharf), CA - Holiday Inn | 585 | | |
San Francisco (South San Francisco Airport), CA - Embassy Suites(b) | 312 | | |
St. Paul (Downtown), MN - Embassy Suites(b) | 210 | | |
Toronto (Airport), CAN - Holiday Inn Select | 445 | | |
Toronto (Yorkdale), CAN - Holiday Inn | 370 | | |
| | | | |
23
FelCor Lodging Trust Incorporated
Supplemental Information
Three Months and Year Ended December 31, 2006
Hotel Portfolio Information (continued)
Renovation Completion Schedule – (continued)
Second Quarter 2007 | Rooms | | % Owned |
Atlanta (Gateway-Atlanta Airport), GA - Sheraton | 395 | | |
Boston (Marlborough), MA – Embassy Suites(b) | 229 | | |
Burlington (Hotel & Conference Center), VT - Sheraton(b) | 309 | | |
Chicago (Lombard/Oak Brook), IL - Embassy Suites(b) | 262 | | 50% |
Chicago (O'Hare Airport), IL - Sheraton Suites(b) | 296 | | |
Dallas (DFW International Airport-South), TX - Embassy Suites(b) | 305 | | |
Dallas (Market Center), TX – Embassy Suites | 244 | | |
Indianapolis (North), IN - Embassy Suites(b) | 221 | | 75% |
Milpitas (Silicon Valley), CA - Embassy Suites(b) | 266 | | |
Parsippany, NJ - Embassy Suites(b) | 274 | | 50% |
Philadelphia (Society Hill), PA - Sheraton(b) | 365 | | |
Raleigh, NC - Doubletree Guest Suites(b) | 203 | | |
San Diego (On the Bay), CA - Holiday Inn | 600 | | |
San Rafael (Marin County/Conference Center), CA - Embassy Suites(b) | 235 | | 50% |
Secaucus (Meadowlands), NJ - Embassy Suites(b) | 261 | | 50% |
Santa Barbara (Goleta), CA - Holiday Inn | 160 | | |
Tampa (On Tampa Bay), FL - Doubletree Guest Suites(b) | 203 | | |
Wilmington, DE - Doubletree(b) | 244 | | 90% |
| | | |
Third Quarter 2007 | | | |
Birmingham, AL - Embassy Suites(b) | 242 | | |
Boca Raton, FL - Embassy Suites(b) | 263 | | |
Dallas (Love Field), TX - Embassy Suites(b) | 248 | | |
Ft. Lauderdale (Cypress Creek), FL - Sheraton Suites(b) | 253 | | |
Jacksonville (Baymeadows), FL - Embassy Suites(b) | 277 | | |
Kansas City (Plaza), MO - Embassy Suites(b) | 266 | | 50% |
Miami (International Airport), FL - Embassy Suites(b) | 316 | | |
Orlando (International Drive South), FL - Embassy Suites(b) | 244 | | |
Orlando (North), FL - Embassy Suites | 277 | | |
Phoenix (Biltmore), AZ - Embassy Suites(b) | 232 | | |
Phoenix (Tempe), AZ - Embassy Suites(b) | 224 | | |
Raleigh (Crabtree), NC - Embassy Suites(b) | 225 | | 50% |
24
FelCor Lodging Trust Incorporated
Supplemental Information
Three Months and Year Ended December 31, 2006
Hotel Portfolio Information (continued)
Renovation Completion Schedule – (continued)
| Rooms | | % Owned(a) |
Fourth Quarter 2007 | | | |
Atlanta (Perimeter Center), GA - Embassy Suites(b) | 241 | | 50% |
Austin (North), TX - Embassy Suites(b) | 260 | | 50% |
Bloomington, MN - Embassy Suites(b) | 219 | | |
Cocoa Beach (Oceanfront), FL - Holiday Inn | 500 | | |
Corpus Christi, TX - Embassy Suites(b) | 150 | | |
Deerfield Beach (Boca Raton/Deerfield Beach Resort), FL - Embassy Suites(b) | 244 | | |
Ft. Lauderdale (17th Street), FL - Embassy Suites(b) | 358 | | |
Los Angeles (Anaheim Located near Disneyland Park), CA - Embassy Suites(b) | 222 | | |
Los Angeles (El Segundo International Airport South), CA - Embassy Suites | 349 | | 97% |
Myrtle Beach Resort, SC - Hilton | 385 | | |
Orlando (International Drive Resort), FL - Holiday Inn | 652 | | |
San Antonio (International Airport), TX - Embassy Suites(b) | 261 | | 50% |
San Antonio (N.W. I-10), TX - Embassy Suites(b) | 216 | | 50% |
| | | |
2008 | | | |
Atlanta (Buckhead), GA – Embassy Suites(b) | 316 | | |
Charlotte, NC – Embassy Suites(b) | 274 | | 50% |
Dallas (Park Central), TX – Westin | 536 | | 60% |
Kansas City (Overland Park), KS – Embassy Suites(b) | 199 | | 50% |
Myrtle Beach (At Kingston Plantation), SC - Embassy Suites | 255 | | |
New Orleans, LA – Embassy Suites(b) | 370 | | |
New Orleans (French Quarter), LA – Holiday Inn | 374 | | |
Oxnard (Mandalay Beach Resort & Conference Center), CA – Embassy Suites | 248 | | |
Phoenix (Crescent Hotel), AZ – Sheraton(b) | 342 | | |
San Francisco (Union Square), CA – Crowne Plaza | 403 | | |
Santa Monica (Beach at the Pier), CA – Holiday Inn | 132 | | |
Projected Renovation Program Summary ($ in millions) | |
Completion Date | | Project Cost | | Hotels Completed | | Rooms Completed |
Fourth Quarter 2006 | | | $ | 42 | | | | 8 | | | | 2,266 | |
First Quarter 2007 | | | | 101 | | | | 21 | | | | 6,170 | |
Second Quarter 2007 | | | | 88 | | | | 18 | | | | 5,072 | |
Third Quarter 2007 | | | | 71 | | | | 12 | | | | 3,067 | |
Fourth Quarter 2007 | | | | 74 | | | | 13 | | | | 4,057 | |
2008 | | | | 54 | | | | 11 | | | | 3,449 | |
Total(1) | | | $ | 430 | | | | 83 | | | | 24,081 | |
| (1) | Does not include redevelopment costs and represents our prorata share of project costs. |
25
FelCor Lodging Trust Incorporated
Supplemental Information
Three Months and Year Ended December 31, 2006
Hotel Portfolio Information (continued)
Non-Strategic Hotels designated as Held for Sale | | Rooms | | % Owned(a) |
Brunswick, GA – Embassy Suites | 130 | | |
Dallas (Park Central), TX – Sheraton | 438 | | 60% |
Dallas (Park Central Area), TX – Embassy Suites | 279 | | |
Dallas (West End/Convention Center) TX – Hampton Inn | 309 | | |
Houston (Intercontinental Airport), TX – Holiday Inn | 415 | | |
Lexington, KY – Sheraton Suites | 155 | | |
Los Angeles (Covina/I-10), CA – Embassy Suites(d) | 202 | | 50% |
Palm Desert (Palm Desert Resort) CA – Embassy Suites(d) | 198 | | |
Stamford, CT – Holiday Inn Select | 380 | | |
Troy – (North - Auburn Hills), MI – Embassy Suites (b) | 251 | | 90% |
Tulsa (I-44), OK – Embassy Suites | 244 | | |
| | | |
Unconsolidated Operations | | | | |
Hays, KS – Hampton Inn(b) | 114 | | 50% |
Hays, KS – Holiday Inn(b) | 191 | | 50% |
New Orleans (Chateau LeMoyne -In French Quarter/Historic Area), LA –
Holiday Inn(b) |
171
| | 50% |
Salina, KS – Holiday Inn(b) | 192 | | 50% |
Salina (I-70), KS – Holiday Inn Express & Suites(b) | 93 | | 50% |
| | | | | | |
| (a) | We own 100% of the real estate interests unless otherwise noted. |
| (b) | This hotel is encumbered by mortgage debt or capital lease obligation. |
| (c) | These hotels were included in discontinued operations in the accompanying consolidated statement of operations at December 31, 2006. |
| (d) | This hotel was sold subsequent to December 31, 2006. |
26
FelCor Lodging Trust Incorporated
Supplemental Information
Three Months and Year Ended December 31, 2006
Hotel Portfolio Information (continued)
Hotels Sold in 2006
Property | | Date Sold | | Rooms | | Total Gross Sales Price Per Quarter (in millions) |
Hotels sold during the quarter ended March 31, 2006: | | | | | | | | |
Atlanta, GA – Crowne Plaza (Airport) | Jan 2006 | | 378 | | | | | |
Atlanta, GA – Crowne Plaza (Powers Ferry) | Jan 2006 | | 296 | | | | | |
Dallas, TX – Crowne Plaza Suites | Jan 2006 | | 295 | | | | | |
Dallas, TX – Staybridge Suites | Jan 2006 | | 114 | | | | | |
Houston, TX – Holiday Inn Select | Jan 2006 | | 349 | | | | | |
Irvine, CA – Crowne Plaza | Jan 2006 | | 335 | | | | | |
San Jose, CA – Crowne Plaza | Jan 2006 | | 305 | | | | | |
Omaha, NE – Hampton Inn | Jan 2006 | | 129 | | | | | |
| | | 2,201 | | | $ | 162.6 | |
Hotels sold during the quarter ended June 30, 2006: | | | | | | | | |
Miami, FL – Crowne Plaza | Apr 2006 | | 304 | | | | | |
Philadelphia, PA – Crowne Plaza | Apr 2006 | | 445 | | | | | |
Orlando, FL – Holiday Inn | May 2006 | | 530 | | | | | |
Omaha, NE – Holiday Inn | May 2006 | | 383 | | | | | |
| | | 1,662 | | | | 78.2 | |
Hotels sold during the quarter ended September 30, 2006: | | | | | | | | |
Denver, CO – Doubletree | Aug 2006 | | 248 | | | | | |
Amarillo, TX – Holiday Inn | Aug 2006 | | 248 | | | | | |
Dallas, TX – Doubletree | Aug 2006 | | 300 | | | | | |
Austin, TX – Holiday Inn | Sept 2006 | | 320 | | | | | |
Dallas, TX – Harvey Suites | Sept 2006 | | 163 | | | | | |
Dallas, TX – Crowne Plaza | Sept 2006 | | 354 | | | | | |
Houston, TX – Holiday Inn Select | Sept 2006 | | 355 | | | | | |
Pleasanton, CA – Crowne Plaza | Sept 2006 | | 244 | | | | | |
| | | 2,232 | | | | 99.7 | |
Hotels sold during the quarter ended December 31, 2006: | | | | | | | | |
Chicago, IL – Crowne Plaza | Nov 2006 | | 443 | | | | | |
Atlanta, GA – Holiday Inn (Airport North) | Dec 2006 | | 493 | | | | | |
Atlanta, GA – Crowne Plaza | Dec 2006 | | 250 | | | | | |
Atlanta, GA – Holiday Inn (South) | Dec 2006 | | 180 | | | | | |
Columbus, GA – Holiday Inn | Dec 2006 | | 224 | | | | | |
Kansas City, MO – Holiday Inn | Dec 2006 | | 165 | | | | | |
Knoxville, TN – Holiday Inn | Dec 2006 | | 240 | | | | | |
Minneapolis, MN – Embassy Suites | Dec 2006 | | 216 | | | | | |
Montgomery, AL – Holiday Inn | Dec 2006 | | 210 | | | | | |
Omaha, NE – Crowne Plaza | Dec 2006 | | 223 | | | | | |
San Antonio, TX – Holiday Inn | Dec 2006 | | 313 | | | | | |
| | | 2,957 | | | | 173.9 | |
Total sales during year ended December 31, 2006 | | | 9,052 | | | $ | 514.4 | |
27
