EXHIBIT 99.2
[FELCOR LODGING TRUST LOGO]
FELCOR LODGING TRUST INCORPORATED
SUPPLEMENTAL INFORMATION
THREE MONTHS ENDED MARCH 31, 2003
Date of Issuance April 30, 2003
All dollar amounts shown in this report are in U.S. dollars unless
otherwise noted. This Supplemental Information is not 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 by
means of a prospectus.
TABLE OF CONTENTS
PAGE
----
CORPORATE DATA
About the Company 3
Board of Directors and Executive Officers 4
Research Coverage 5
FINANCIAL HIGHLIGHTS
Supplemental Financial Data 6
Consolidated Statements of Operations 7
Reconciliation of FFO and EBITDA 8
Selected Operating Data 9
Hotel Operating Expense Composition 9
Debt Summary 10
PORTFOLIO DATA
Portfolio Distribution 12
Detailed Operating Statistics by Brand 13
Detailed Operating Statistics for FelCor's Top Markets 14
Other Performance Statistics 15
Hotel Portfolio Information 16
Hotel Portfolio Listing 18
With the exception of historical information, the matters discussed in this
supplement include "forward looking statements" within the meaning of the
federal securities laws. Forward looking statements are not guarantees of
future performance. Numerous risks and uncertainties, and the occurrence of
future events, may cause actual results to differ materially from those
currently anticipated. General economic conditions, including the timing and
magnitude of any recovery from the current soft economy, with the continuing
impact of the war in Iraq, future acts of terrorism, the impact of SARS on the
travel industry, theavailability of capital, the ability to effect sales of
non-strategic hotels at anticipated prices, and numerous other factors may
affect future results, performance and achievements. Certain of these risks and
uncertainties are described in greater detail in our filings with the
Securities and Exchange Commission. Although we believe our current
expectations to be based upon reasonable assumptions, we can give no assurance
that our expectations will be attained or that actual results will not differ
materially.
2
CORPORATE DATA
ABOUT THE COMPANY
In 1994, FelCor Lodging Trust Incorporated went public as a real estate
investment trust (REIT) with six hotels and a market capitalization of $120
million. At March 31, 2003, FelCor was the nation's second largest lodging REIT
and the largest owner of full service, all-suite hotels. FelCor's portfolio is
comprised of 169 hotels, the operating revenues and expenses of which are
reflected in FelCor's consolidated statements of operations because of our
ownership of the operating lessees of these hotels. FelCor also owns 50 percent
joint venture interests in the operating lessees of 14 hotels whose operations
are accounted for using the equity method. FelCor owns 77 upscale, all-suite
hotels, 83 hotels in the upscale or full service segments and is the largest
owner of Embassy Suites(R) Hotels and Doubletree Guest Suites(R) hotels. The
Company's hotels are located in 35 states and Canada. FelCor had a market
capitalization of approximately $2.7 billion at March 31, 2003.
STRATEGY
FelCor's hotels are managed by strategic brand managers such as Hilton Hotels,
InterContinental Hotels Group, and Starwood Hotels & Resorts. FelCor is
competitively positioned to deliver superior stockholder returns through its
strong management team, strategic brand manager alliances, diversified upscale
and full-service hotels, value creation expertise, and financial flexibility.
STOCK AND DEBT RATINGS
Senior Unsecured Debt Preferred Stock
--------------------- ---------------
Moody's Ba3 B3
Standard & Poors B+ CCC+
STOCK EXCHANGE LISTING
Common (NYSE: FCH)
Series A Convertible Preferred (NYSE: FCHPRA)
Series B Perpetual Preferred (NYSE: FCHPRB)
FISCAL YEAR END
December 31
NUMBER OF EMPLOYEES
64
CORPORATE HEADQUARTERS
545 E. John Carpenter Frwy., Suite 1300
Irving, TX 75062
(972) 444-4900
INVESTOR RELATIONS CONTACT MEDIA CONTACT
Stephen A. Schafer Monica L. Hildebrand
Director of Investor Relations Vice President of Communications
(972) 444-4912 (972) 444-4917
INFORMATION REQUEST
information@felcor.com
3
BOARD OF DIRECTORS
Donald J. McNamara, Chairman of the Board
Principal, The Hampstead Group
Thomas J. Corcoran, Jr.
President and Chief Executive Officer, FelCor Lodging Trust Incorporated
Melinda J. Bush, C.H.A.
Chairman and Chief Executive Officer, HRW Holdings, LLC
Richard S. Ellwood
President, R.S. Ellwood and Co., Inc.
Richard O. Jacobson
Chairman of the Board, Jacobson Warehouse Company, Inc.
Charles A. Ledsinger, Jr.
President and Chief Executive Officer, Choice Hotels International
Robert H. Lutz, Jr.
President, RL Investments, Inc.
Robert A. Mathewson
President, RGC, Inc.
Richard C. North
Chief Executive Officer, InterContinental Hotels Group
Michael D. Rose
Chairman, Gaylord Entertainment Company
EXECUTIVE OFFICERS
Thomas J. Corcoran, Jr., President and Chief Executive Officer
Michael A. DeNicola, Executive Vice President and Chief Investment Officer
Richard J. O'Brien, Executive Vice President and Chief Financial Officer
Lawrence D. Robinson, Executive Vice President, General Counsel and Secretary
Jack Eslick, Senior Vice President, Director of Asset Management
Lester C. Johnson, Senior Vice President, Controller and
Principal Accounting Officer
June C. McCutchen, Senior Vice President, Director of Design and Construction
Larry J. Mundy, Senior Vice President, Director of Business Initiatives
and Assistant General Counsel
Andrew J. Welch, Senior Vice President and Treasurer
4
RESEARCH COVERAGE
EQUITY
Firm Analyst Telephone
- ---- ------- ---------
A.G. Edwards & Sons Art Havener (314) 955-3588
Credit Lyonnais Bryan A. Maher (212) 408-5649
Deutsche Bank Marc Falcone (212) 469-7417
Friedman, Billings, Ramsey, & Co. David Loeb (703) 469-1289
Green Street Advisors John Arabia (949) 640-8780
JP Morgan Chase Harry C. Curtis (212) 622-6610
Legg Mason Rod F. Petrik (410) 454-4131
Lehman Brothers Joyce R. Minor (212) 526-5132
Merrill Lynch David W. Anders (212) 449-2739
Morgan Stanley Todd Scott (212) 761-8033
Prudential Securities James W. Sullivan (212) 778-2515
Salomon Smith Barney Michael J. Rietbrock (212) 816-0215
UBS Warburg Keith A. Mills (212) 713-3098
Wachovia Securities Jeffrey J. Donnelly (617) 603-4262
FIXED INCOME
Firm Analyst Telephone
- ---- ------- ---------
Bank of America Andrew Susser (212) 847-6401
Bear Stearns & Co., Inc. John Mulkey (212) 272-9880
Deutsche Bank Alex. Brown Andrew Zarnett (212) 469-7995
JP Morgan Chase Mark Streeter (212) 834-5086
Lehman Brothers Susan Jansen (212) 526-6470
Salomon Smith Barney Lee Olive (212) 816-8581
5
FINANCIAL HIGHLIGHTS
SUPPLEMENTAL FINANCIAL DATA
(IN THOUSANDS, EXCEPT PER SHARE INFORMATION, RATIOS AND PERCENTAGES)
Quarter Ended
-----------------------------
3/31/03 12/31/02
---------- ----------
ENTERPRISE VALUE
Common shares outstanding 58,866 58,767
Units not held by FelCor 3,288 3,290
---------- ----------
Combined shares and units 62,154 62,057
Common stock price at end of period $ 6.23 $ 11.44
---------- ----------
Common equity capitalization $ 387,219 $ 709,932
---------- ----------
Series A convertible preferred stock outstanding 5,980 5,980
Series A stock price at end of period $ 16.20 $ 20.85
---------- ----------
$ 96,876 $ 124,683
---------- ----------
Series B non-convertible preferred stock outstanding 6,776 6,776
Series B stock price at end of period $ 18.00 $ 24.60
---------- ----------
$ 121,968 $ 166,689
Consolidated debt 2,017,294 1,877,134
---------- ----------
Total enterprise value $2,623,357 $2,878,438
========== ==========
DIVIDENDS PER SHARE
Common dividends declared, trailing 12 months $ 0.45 $ 0.60
Common dividend yield, trailing 12 months(a) 7.2% 5.2%
Dividends declared (quarter ended):
Common $ -- $ 0.15
Series A convertible preferred stock 0.4875 0.4875
Series B non-convertible preferred stock 0.5625 0.5625
SELECTED BALANCE SHEET DATA
Investment in hotels at cost(b) $4,696,821 $4,661,520
Total cash and cash equivalents 155,671 66,542
Total assets 3,872,888 3,780,363
Total debt 2,017,294 1,877,134
Total stockholders' equity 1,594,052 1,616,817
Total stockholders equity less preferred equity 1,275,145 1,297,910
Book value per common share 21.66 22.08
SELECTED RATIOS
Consolidated debt (net of cash) to trailing twelve month EBITDA 6.5x 5.9x
Total debt (net of cash) to trailing twelve month EBITDA 7.0x 6.4x
Total debt (net of cash) to investment in hotels, at cost 42.7% 41.8%
EBITDA to consolidated interest paid(c) 1.8x 1.9x
EBITDA to total interest expense(d) 1.7x 1.7x
Fixed charge coverage ratio(e) 1.4x 1.5x
(a) Dividend yield represents the trailing 12 month dividends
divided by the common stock closing price for the period.
(b) Investment in hotels at cost is defined as consolidated
investment in hotels before accumulated depreciation, plus
our pro rata share of unconsolidated investment in hotels
before accumulated depreciation.
(c) EBITDA to consolidated interest paid represents trailing
twelve month consolidated EBITDA divided by trailing twelve
month interest expense before capitalized interest and
amortization of debt costs.
(d) EBITDA to total interest expense represents trailing twelve
month consolidated EBITDA divided by trailing twelve month
interest expense including the Company's pro rata share of
unconsolidated interest expense.
(e) Fixed charges include preferred dividends, consolidated
interest expense and interest expense from unconsolidated
entities.
6
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
Three Months
Ended March 31,
---------------------------
2003 2002
--------- ---------
Revenues:
Hotel operating revenue:
Room $ 242,972 $ 257,230
Food and beverage 47,914 50,691
Other operating departments 16,060 16,219
Retail space rental and other revenue 400 670
--------- ---------
Total revenues 307,346 324,810
--------- ---------
Expenses:
Hotel departmental expenses:
Room 63,464 63,233
Food and beverage 38,939 39,991
Other operating departments 7,516 7,316
Other property related costs 91,824 89,160
Management and franchise fees 16,310 15,648
Taxes, insurance and lease expense 32,533 34,570
Corporate expenses 3,423 3,746
Depreciation 36,107 38,618
--------- ---------
Total operating expenses 290,116 292,282
--------- ---------
Operating income 17,230 32,528
Interest expense, net (40,253) (41,196)
Gain on early extinguishment of debt 953
--------- ---------
Loss before equity in income (loss) from unconsolidated
entities and minority interests (22,070) (8,668)
Equity in income (loss) from unconsolidated entities (148) 1,221
Minority interests 1,127 1,301
--------- ---------
Net loss (21,091) (6,146)
Preferred dividends (6,726) (6,150)
--------- ---------
Net loss applicable to common stockholders $ (27,817) $ (12,296)
========= =========
Basic and diluted per common share data: --
Net loss applicable to common stockholders $ (0.48) $ (0.23)
========= =========
Weighted average common shares outstanding 58,532 52,717
7
RECONCILIATION OF FFO AND EBITDA
(IN THOUSANDS, EXCEPT PER SHARE DATA)
Three Months
Ended March 31,
-------------------------
2003 2002
-------- --------
FUNDS FROM OPERATIONS (FFO)
Net loss $(21,091) $ (6,146)
Depreciation 36,107 38,618
Depreciation from unconsolidated entities 2,859 2,178
Preferred dividends:
Series A preferred dividends (2,915) --
Series B preferred dividends (3,811) (3,234)
Minority interest in FelCor LP (1,557) (2,087)
-------- --------
FFO(a) $ 9,592 $ 29,329
======== ========
FFO per common share and unit $ 0.15 $ 0.44
======== ========
Basic and diluted net loss per common share $ (0.48) $ (0.23)
======== ========
Weighted average common shares outstanding 58,532 52,717
Weighted average FelCor LP units outstanding 3,289 9,005
Conversion of Series A preferred shares -- 4,636
Conversion of options and stock grants 309 357
-------- --------
Weighted average common shares and units outstanding 62,130 66,715
======== ========
EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION (EBITDA)
FFO $ 9,592 $ 29,329
Interest expense 40,628 41,775
Interest expense from unconsolidated entities 2,339 2,359
Amortization expense 516 509
Preferred dividends:
Series A preferred dividends 2,915 --
Series B preferred dividends 3,811 3,234
-------- --------
EBITDA(a) $ 59,801 $ 77,206
======== ========
(a) Includes a $953,000 gain on early extinguishment of debt.
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 measurements of performance to be
helpful in evaluating a real estate company's operations. We consider FFO and
EBITDA to be key measures of a REIT's performance and should be considered
along with, but not as an alternative to, net income and cash flow as a measure
of our operating performance.
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
generally accepted accounting principles), 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 funds from operations
on the same basis. We believe that FFO and EBITDA are helpful to investors as a
measure of the performance of an equity REIT. 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.
In the future, to the extent that FelCor's FFO, computed in accordance
with the NAREIT White Paper, contains gains, losses or other charges that are
appropriately identified as non-recurring items, it presently intends to
provide, supplemental adjustments to eliminate such non-recurring items and to
reflect recurring FFO.
8
SELECTED OPERATING DATA
(DOLLARS IN THOUSANDS)
Three Months
Ended March 31,
----------------------------
2003 2002
--------- ---------
Total revenue $ 307,346 $ 324,810
Retail space and other revenue (400) (670)
--------- ---------
Hotel revenues 306,946 324,140
Hotel operating expenses (218,053) (215,348)
--------- ---------
Hotel operating margin ($) $ 88,893 $ 108,792
========= =========
Operating margin (%) 29.0% 33.6%
Corporate expenses 3,423 3,746
Corporate expenses as a percentage of revenues 1.1% 1.2%
HOTEL OPERATING EXPENSE COMPOSITION
(DOLLARS IN THOUSANDS)
Three Months Ended March 31,
-------------------------------------------------------
2003 2002
----------------------- -----------------------
Room $ 63,464 29.1% $ 63,233 29.4%
Food and beverage 38,939 17.9 39,991 18.6
Other operating departments 7,516 3.4 7,316 3.4
Other property related costs:
Administrative and general 30,344 13.9 31,204 14.5
Marketing and advertising 27,746 12.7 26,545 12.3
Repairs and maintenance 17,797 8.2 16,798 7.8
Energy 15,937 7.3 14,613 6.8
--------- ----- --------- -----
Total other property related costs 91,824 42.1 89,160 41.4
--------- ---------
Management and franchise fees 16,310 7.5 15,648 7.2
--------- ----- --------- -----
Hotel operating expenses $ 218,053 100.0% $ 215,348 100.0%
========= ===== ========= =====
Supplemental information:
Compensation and benefits expense (included in hotel
operating expenses) $ 103,431 $ 100,958
========= =========
Reconciliation of hotel operating expense:
Total operating expenses $ 290,116 $ 292,282
Taxes, insurance and lease expense (32,533) (34,570)
Corporate expenses (3,423) (3,746)
Depreciation (36,107) (38,618)
--------- ---------
Hotel operating expenses $ 218,053 $ 215,348
========= =========
9
DEBT SUMMARY
(DOLLARS IN THOUSANDS)
Debt Outstanding
Encumbered Interest Rate At Maturity
Hotels March 31, 2003 Date Balance
---------- ---------------- -------- ---------
Unsecured line of credit none 4.55% Oct. 2004 $ 149,497(a)
Promissory note none 3.34 June 2016 650
Senior unsecured term notes none 4.50(b) Oct. 2004 174,792
Senior unsecured term notes none 5.37(c) Oct. 2007 75,000
Senior unsecured term notes none 7.63 Oct. 2007 49,543
Senior unsecured term notes none 9.50 Sept. 2008 596,363
Senior unsecured term notes none 8.50 June 2011 297,969
Mortgage debt 15 hotels 7.24 Nov. 2007 133,970
Mortgage debt 7 hotels 7.54 April 2009 93,840
Mortgage debt 6 hotels 7.55 June 2009 70,604
Mortgage debt 8 hotels 8.70 May 2010 179,890
Mortgage debt 7 hotels 8.73 May 2010 139,803
Mortgage debt 5 hotels 7.20 2005-2008 48,338
Other 1 hotel 9.08 2011 7,035
--------- ---- ----------
Total 49 hotels 7.86% $2,017,294
==========
(a) In the second quarter of 2003, the Company used the proceeds of its
new secured non-recourse loan to repay all balances under its line of
credit and subsequently reduced its line of credit commitments to $150
million.
(b) Represents fixed to floating interest rate swaps at six month LIBOR
plus 320 basis points.
(c) Represents fixed to floating interest rate swaps at six month LIBOR
plus 407 basis points.
FelCor's fixed to floating interest rate swaps reduced interest expense
for the quarter by $1.6 million.
Fixed interest rate debt to total debt 80%
Weighted average maturity of debt 5.7 years
Secured debt to total assets 17.4%
At March 31, 2003, future scheduled debt principal payments are as
follows (in thousands):
Secured Unsecured
Year Debt Debt Total
- ---- ------- --------- -----
2003 $ 10,078 $ -- $ 10,078
2004 14,083 324,497(a) 338,580
2005 41,103 -- 41,103
2006 13,978 -- 13,978
2007 132,990 125,000 257,990
2008 and thereafter 459,008 900,650 1,359,658
Premium/(discount) 2,240 (6,333) (4,093)
-------- ---------- ----------
Total debt $673,480 $1,343,814 $2,017,294
======== ========== ==========
10
(a) Includes $149 million under our line of credit, that was paid off in
the second quarter of 2003, with secured debt maturing in May 2006.
11
DEBT SUMMARY (CONTINUED)
At March 31, 2003, FelCor had unconsolidated 50 percent investments in
ventures that owned an aggregate of 29 hotels. These ventures had approximately
$267 million of non-recourse mortgage debt, all of which is secured by hotel
assets. Additionally, one joint venture had a full recourse loan for a
residential condominium development. FelCor's pro rata share of this recourse
loan was $9.2 million at March 31, 2003.
In the first quarter of 2003, we refinanced $16 million of secured debt
that was to mature in the fourth quarter of 2003. The loan was refinanced by the
existing lender, effective August 2003, for a five-year period at a floating
interest rate of LIBOR plus 285 basis points with no required amortization.
Another secured loan, maturing in 2003, in the amount of $6 million was prepaid
in the first quarter of 2003. In conjunction with this $6 million early
retirement of debt, we recognized a $1 million gain related to the unamortized
premium on this debt.
In April 2003, we closed on a new $150 million non-recourse loan at a
floating interest rate of LIBOR plus 250 basis points secured by 10 of our
hotels and maturing in May 2006, with two one year extension options. The
proceeds of the debt were used to pay off the outstanding balance on our line of
credit.
12
PORTFOLIO DATA
(169 CONSOLIDATED HOTELS, SAME STORE BASIS)
PORTFOLIO DISTRIBUTION
% of % of
Total 2002
Brand Hotels Rooms Rooms EBITDA
- ----- ------ ----- ----- ------
Embassy Suites 59 14,842 32% 42%
Holiday Inn(R)-branded 53 16,019 34 26
Crowne Plaza(R) 18 5,963 13 11
Sheraton(R)-branded 10 3,269 7 8
Doubletree(R)-branded 13 2,675 6 6
Other 16 3,673 8 7
% of % of
Total 2002
Top Markets Hotels Rooms Rooms EBITDA
- ----------- ------ ----- ----- ------
Atlanta 10 3,061 7% 8%
Dallas 17 5,273 11 7
San Francisco Bay Area 9 3,255 7 5
New Orleans 2 746 2 4
Orlando 6 2,220 5 4
Philadelphia 3 1,174 3 4
Houston 5 1,696 4 3
Phoenix 4 1,027 2 3
Minneapolis 4 955 2 3
Chicago 4 1,239 3 3
% of % of
Total 2002
Top Four States Hotels Rooms Rooms EBITDA
- --------------- ------ ----- ----- ------
California 19 6,026 13% 19%
Texas 36 10,366 22 16
Florida 16 5,346 12 12
Georgia 12 3,415 7 9
% of % of
Total 2002
Location Hotels Rooms Rooms EBITDA
- -------- ------ ----- ----- ------
Suburban 79 19,615 42% 43%
Urban 31 10,483 23 27
Airport 33 9,711 21 21
Highway 14 2,954 6 3
Resort 12 3,678 8 6
% of % of
Total 2002
Segment Hotels Rooms Rooms EBITDA
- ------- ------ ----- ----- ------
Upscale all-suite 77 18,357 39% 52%
Full service 55 17,088 37 29
Upscale 28 9,667 21 18
Limited service 9 1,329 3 2
% of % of
Total 2002
Hotels Rooms Rooms EBITDA
------ ----- ----- ------
Potential Sale Candidates 33 6,468 14% 7%
13
DETAILED OPERATING STATISTICS BY BRAND
Occupancy (%)
--------------------------------
Three Months Ended
March 31,
--------------------------------
2003 2002 % Variance
---- ---- ----------
Embassy Suites hotels 66.7 66.5 0.3
Holiday Inn-branded hotels 58.2 59.3 (1.8)
Crowne Plaza hotels 55.4 56.8 (2.4)
Doubletree-branded hotels 64.8 60.4 7.3
Sheraton-branded hotels 58.9 56.4 4.4
Other hotels 45.5 54.2 (16.1)
Total hotels 60.0 60.7 (1.2)
ADR ($)
---------------------------------
Three Months Ended
March 31,
---------------------------------
2003 2002 % Variance
------ ------ ----------
Embassy Suites hotels 119.18 124.89 (4.6)
Holiday Inn-branded hotels 77.25 80.37 (3.9)
Crowne Plaza hotels 89.36 94.04 (5.0)
Doubletree-branded hotels 100.72 105.23 (4.3)
Sheraton-branded hotels 98.40 104.89 (6.2)
Other hotels 84.08 86.45 (2.7)
Total hotels 96.92 101.05 (4.1)
RevPAR ($)
--------------------------------
Three Months Ended
March 31,
--------------------------------
2003 2002 % Variance
----- ----- ----------
Embassy Suites hotels 79.49 83.06 (4.3)
Holiday Inn-branded hotels 44.95 47.62 (5.6)
Crowne Plaza hotels 49.52 53.40 (7.3)
Doubletree-branded hotels 65.27 63.54 2.7
Sheraton-branded hotels 57.98 59.20 (2.1)
Other hotels 38.27 46.90 (18.4)
Total hotels 58.13 61.36 (5.3)
14
DETAILED OPERATING STATISTICS FOR FELCOR'S TOP MARKETS
Occupancy (%)
-------------------------------
Three Months Ended March 31,
-------------------------------
2003 2002 % Variance
---- ---- ----------
Atlanta 67.1 70.1 (4.3)
Dallas 45.7 51.7 (11.6)
San Francisco Bay Area 59.8 58.2 2.7
New Orleans 62.2 73.5 (15.4)
Orlando 65.7 69.5 (5.5)
Philadelphia 52.6 53.8 (2.3)
Houston 62.6 69.7 (10.2)
Phoenix 80.5 71.9 11.8
Minneapolis 59.6 59.2 0.7
Chicago 58.3 53.2 9.7
ADR ($)
---------------------------------
Three Months Ended March 31,
---------------------------------
2003 2002 % Variance
------ ------ ----------
Atlanta 88.96 95.28 (6.6)
Dallas 86.95 93.12 (6.6)
San Francisco Bay Area 108.41 119.22 (9.1)
New Orleans 156.18 165.08 (5.4)
Orlando 83.48 89.60 (6.8)
Philadelphia 99.47 110.53 (10.0)
Houston 74.21 76.23 (2.7)
Phoenix 128.61 138.17 (6.9)
Minneapolis 119.86 121.72 (1.5)
Chicago 101.30 112.38 (9.9)
RevPAR ($)
--------------------------------
Three Months Ended March 31,
--------------------------------
2003 2002 % Variance
----- ------ ----------
Atlanta 59.66 66.75 (10.6)
Dallas 39.71 48.14 (17.5)
San Francisco Bay Area 64.85 69.44 (6.6)
New Orleans 97.12 121.31 (19.9)
Orlando 54.87 62.30 (11.9)
Philadelphia 52.34 59.51 (12.0)
Houston 46.44 53.16 (12.6)
Phoenix 103.49 99.40 4.1
Minneapolis 71.42 72.00 (0.8)
Chicago 59.07 59.76 (1.1)
15
OTHER PERFORMANCE STATISTICS
VARIANCE TO PRIOR YEAR
Occupancy ADR RevPAR
% Variance % Variance % Variance
---------- ---------- ----------
First Quarter 2001 (1.7) 3.6 1.8
Second Quarter 2001 (7.2) (0.2) (7.4)
Third Quarter 2001 (13.4) (4.8) (17.5)
Fourth Quarter 2001 (15.2) (9.5) (23.3)
Year 2001 (9.3) (2.4) (11.5)
First Quarter 2002 (11.2) (7.8) (18.2)
Second Quarter 2002 (5.1) (6.3) (11.1)
Third Quarter 2002 2.4 (4.8) (2.4)
Fourth Quarter 2002 4.4 (1.3) 3.1
Year 2002 (2.8) (5.5) (8.1)
January 0.3 (3.8) (3.6)
February (1.4) (4.4) (5.8)
March(a) (2.2) (4.0) (6.1)
First Quarter 2003 (1.2) (4.1) (5.3)
April 2003 estimate(a) (10.5) to (11.5)
(a) Includes the lack of comparability due to the occurrence of Easter in
April 2003, as compared to March in 2002.
16
HOTEL PORTFOLIO INFORMATION
PRO RATA SHARE OF ROOMS OWNED
Room Count
--------------
March 31, 2003
Hotels
Total hotels 183 48,825
------
50% joint ventures 29 (3,137)
60% joint ventures 2 (390)
90% joint ventures 6 (148)
97% joint venture 1 (10)
------
Total joint venture owned rooms (3,685)
------
Pro rata share of rooms owned 45,140
======
CAPITAL EXPENDITURES (DOLLARS IN THOUSANDS)
Three Months
Ended Year Ended
March 31, 2003 December 31, 2002
-------------- -----------------
Consolidated hotels:
Improvements and additions to hotels $24,614 $62,518
% of total revenue 8.0% 4.7%
Unconsolidated hotels (pro rata share):
Improvements and additions to hotels(a) $ 1,271 $ 8,580
% of total revenue 12.0% 10.5%
(a) Excludes $6.9 million of capital expenditures during the
three months ended March 31, 2003, incurred by our joint venture for
construction of a residential condominium project. The funds for this project
are funded by secured debt.
17
HOTEL PORTFOLIO INFORMATION
POTENTIAL SALE CANDIDATES
In February 2003, FelCor identified 33 non-strategic hotels that it intends to
sell over the next 36 months. These hotels are generally smaller hotels in
secondary and tertiary markets, and certain hotels in Texas and specifically,
Dallas. There are 26 hotels managed by InterContinental Hotels Group (IHG)
(primarily Holiday Inn), six hotels managed by Hilton, and one hotel managed by
an independent company. The 2002 RevPAR for these hotels was $39, occupancy was
54 percent, and the ADR was $74.
FelCor has announced the selected brokers to market 27 of these hotels. A
detailed description of these hotels and listing of brokers can be found on
FelCor's Web site at www.felcor.com on the `Hotels' page.
For the hotels managed by IHG, FelCor is required to reinvest the proceeds from
such sales in IHG-branded hotels (i.e., Intercontinental(R), Holiday
Inn-branded hotels, Crowne Plaza, or Staybridge Suites(R)) under its pooled
management agreement.
PORTFOLIO CHANGES IN 2002
Hotel Dispositions:
- In the third quarter of 2002, FelCor sold its 71-room Holiday
Inn in Colby, Kansas, for net cash proceeds of $1.7 million.
- In the third quarter of 2002, FelCor sold four Holiday
Inn-branded hotels and one Hampton Inn(R) hotel in Kansas to
a new joint venture, and received as consideration $4.4
million in cash, a preferred right to receive $6 million, and
a 50 percent common equity interest in the venture.
- In the second quarter of 2002, FelCor sold the 183-room
Doubletree Guest Suites in Boca Raton, Florida, for net
proceeds of $6.5 million.
Hotel Acquisitions:
- Purchased the 208-room SouthPark Suites in Charlotte, North
Carolina, in July 2002. This hotel was converted to a
Doubletree Guest Suites hotel in October 2002.
- Purchased the 385-room Wyndham(R) Myrtle Beach Resort and the
Acadian Shores Golf Club in Myrtle Beach, South Carolina, in
July 2002.
PORTFOLIO CHANGES IN 2003
- Converted an independent all-suite hotel in Dallas to a
Staybridge Suites hotel in March 2003.
- In April, FelCor completed the conversion of the 385-room
Hilton Myrtle Beach Resort, following a $15 million
renovation of the former Wyndham-affiliated property.
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HOTEL PORTFOLIO LISTING
%
Owned
Hotel State Rooms (a) Brand
- ----- ----- ----- ----- -----
CONSOLIDATED OPERATIONS
CORE HOTELS
Birmingham AL 242 Embassy Suites
Montgomery (East I-85) AL 213 Holiday Inn
Phoenix (Camelback) AZ 232 Embassy Suites
Phoenix (Crescent) AZ 342 Sheraton
Tempe (ASU) AZ 224 Embassy Suites
Anaheim (Disney Area) CA 222 Embassy Suites
Burlingame (SF-Airport South) CA 340 Embassy Suites
Covina (I-10) CA 259 50% Embassy Suites
Dana Point - Doheny Beach CA 195 Doubletree Guest Suites
El Segundo (LAX-Airport South) CA 349 97% Embassy Suites
Irvine (Orange County Airport) CA 335 Crowne Plaza
Milpitas CA 266 Embassy Suites
Milpitas (San Jose-North) CA 305 Crowne Plaza
Napa CA 205 Embassy Suites
Oxnard (Mandalay Beach Resort) CA 248 Embassy Suites
Palm Desert CA 198 Embassy Suites
Pleasanton CA 244 Crowne Plaza
Santa Barbara CA 160 Holiday Inn
San Diego (On the Bay) CA 600 Holiday Inn
San Francisco (Financial District) CA 565 Holiday Inn
San Francisco (Fisherman's Wharf) CA 585 Holiday Inn
San Francisco (SF-Airport North) CA 312 Embassy Suites
San Francisco (Union Square) CA 403 Crowne Plaza
San Rafael (Marin County) CA 235 50% Embassy Suites
Aurora (Denver-Southeast) CO 248 90% Doubletree
Hartford (Downtown) CT 350 Crowne Plaza
Stamford CT 383 Holiday Inn Select(R)
Wilmington DE 244 90% Doubletree
Boca Raton FL 263 Embassy Suites
Cocoa Beach (Oceanfront Resort) FL 500 Holiday Inn
Deerfield Beach FL 244 Embassy Suites
Ft. Lauderdale FL 358 Embassy Suites
Ft. Lauderdale (Cypress Creek) FL 253 Sheraton Suites
Jacksonville FL 277 Embassy Suites
Kissimmee (Nikki Bird Resort) FL 530 Holiday Inn
Miami (Airport) FL 304 Crowne Plaza
Miami (Airport) FL 316 Embassy Suites
Lake Buena Vista (Walt Disney World) FL 229 Doubletree Guest Suites
(a) 100% of real estate interests are owned by FelCor unless
otherwise noted.
19
HOTEL PORTFOLIO LISTING
%
Owned
Hotel State Rooms (a) Brand
- ----- ----- ----- ----- -----
Orlando (Airport) FL 288 Holiday Inn Select
Orlando (International Drive Resort) FL 652 Holiday Inn
Orlando (North) FL 277 Embassy Suites
Orlando (South) FL 244 Embassy Suites
Tampa (Near Busch Gardens) FL 408 Holiday Inn
Tampa (Rocky Point) FL 203 Doubletree Guest Suites
Atlanta (Airport) GA 378 Crowne Plaza
Atlanta (Airport) GA 233 Embassy Suites
Atlanta (Airport-Gateway) GA 395 Sheraton
Atlanta (Airport-North) GA 493 Holiday Inn
Atlanta (Buckhead) GA 317 Embassy Suites
Atlanta (Galleria) GA 278 Sheraton Suites
Atlanta (Jonesboro South) GA 180 Holiday Inn
Atlanta (Perimeter Center) GA 241 50% Embassy Suites
Atlanta (Perimeter-Dunwoody) GA 250 Holiday Inn Select
Atlanta (Powers Ferry) GA 296 Crowne Plaza
Brunswick GA 130 Embassy Suites
Columbus (Airport-North) GA 224 Holiday Inn
Chicago (Allerton) IL 443 Crowne Plaza
Chicago (Lombard) IL 262 50% Embassy Suites
Chicago (O'Hare) IL 297 Sheraton Suites
Deerfield IL 237 Embassy Suites
Indianapolis (North) IN 221 50% Embassy Suites
Overland Park KS 199 50% Embassy Suites
Lexington KY 174 Hilton Suites(R)
Lexington KY 155 Sheraton Suites
Baton Rouge LA 223 Embassy Suites
New Orleans LA 372 Embassy Suites
New Orleans (French Quarter) LA 374 Holiday Inn
Boston (Government Center) MA 303 Holiday Inn Select
Boston (Marlborough) MA 229 Embassy Suites
Baltimore (BWI Airport) MD 251 90% Embassy Suites
Troy MI 251 90% Embassy Suites
Bloomington MN 219 Embassy Suites
Minneapolis (Airport) MN 310 Embassy Suites
Minneapolis (Downtown) MN 216 Embassy Suites
St. Paul MN 210 Embassy Suites
Kansas City (Country Club Plaza) MO 266 50% Embassy Suites
Kansas City (Northeast) MO 167 Holiday Inn
St. Louis (Downtown) MO 297 Embassy Suites
St. Louis (Westport) MO 316 Holiday Inn
Olive Branch (Whispering Woods Hotel and MS 181 Independent
Conference Center)
Charlotte NC 274 50% Embassy Suites
Charlotte (SouthPark) NC 208 Doubletree Guest Suites
(a) 100% of real estate interests are owned by FelCor unless
otherwise noted.
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HOTEL PORTFOLIO LISTING
%
Owned
Hotel State Rooms (a) Brand
- ----- ----- ----- ----- -----
Raleigh NC 225 50% Embassy Suites
Raleigh NC 203 Doubletree Guest Suites
Omaha (Central) NE 131 Hampton Inn
Omaha (I-80) NE 383 Holiday Inn
Omaha (Old Mill Northwest) NE 223 Crowne Plaza
Omaha (Southwest) NE 108 Homewood Suites
Parsippany NJ 274 50% Embassy Suites
Piscataway NJ 224 Embassy Suites
Secaucus (Meadowlands) NJ 304 Crowne Plaza
Secaucus (Meadowlands) NJ 261 50% Embassy Suites
Albuquerque (Mountain View) NM 360 Holiday Inn
Cleveland OH 268 Embassy Suites
Tulsa OK 244 Embassy Suites
Philadelphia (Center City) PA 445 Crowne Plaza
Philadelphia (Historic District) PA 364 Holiday Inn
Philadelphia (Society Hill) PA 365 Sheraton
Pittsburgh PA 251 Holiday Inn Select
Charleston (Mills House) SC 214 Holiday Inn
Myrtle Beach (Kingston Plantation) SC 255 Embassy Suites
Myrtle Beach (b) SC 385 Wyndham
Knoxville (Central) TN 240 Holiday Inn
Nashville TN 296 Embassy Suites
Nashville (Opryland/Airport) TN 382 Holiday Inn Select
Austin (Airport-North) TX 260 50% Embassy Suites
Austin (Downtown) TX 189 90% Doubletree Guest Suites
Austin (Town Lake) TX 320 Holiday Inn
Corpus Christi TX 150 Embassy Suites
Dallas (Alpha Road) TX 114 Staybridge Suites
Dallas (Campbell Centre) TX 300 90% Doubletree
Dallas (DFW Airport-North - Irving) TX 506 Harvey(R)Hotel
Dallas (DFW Airport-North - Irving) TX 164 Harvey Suites(R)
Dallas (DFW Airport-South - Irving) TX 305 Embassy Suites
Dallas (Downtown-West End) TX 311 Hampton Inn
Dallas (Love Field) TX 248 Embassy Suites
Dallas (Market Center) TX 244 Embassy Suites
Dallas (Park Central) TX 295 Crowne Plaza Suites(R)
Dallas (Park Central) TX 279 Embassy Suites
Dallas (Park Central) TX 438 60% Sheraton
Dallas (Park Central) TX 536 60% Westin
Houston (I-10 West) TX 349 Holiday Inn Select
Houston (International Airport) TX 415 Holiday Inn
Houston (Medical Center) TX 293 Crowne Plaza
Houston (Medical Center) TX 284 Holiday Inn & Suites
Houston (Near Gateway Plaza) TX 355 Holiday Inn Select
Plano TX 160 Holiday Inn
(a) 100% of real estate interests are owned by FelCor unless
otherwise noted.
(b) Converted to a Hilton hotel in April 2003.
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HOTEL PORTFOLIO LISTING
%
Owned
Hotel State Rooms (a) Brand
- ----- ----- ----- ----- -----
San Antonio (Airport) TX 261 50% Embassy Suites
San Antonio (Downtown) TX 315 Holiday Inn
San Antonio (International Airport) TX 397 Holiday Inn Select
San Antonio (Northwest) TX 216 50% Embassy Suites
Salt Lake City (Airport) UT 191 Holiday Inn
Burlington VT 309 Sheraton
Vienna (Tysons Corner) VA 437 50% Sheraton Premiere
Canada
Toronto (Airport) Ontario 445 Holiday Inn Select
Toronto (Yorkdale) Ontario 370 Holiday Inn
NON-STRATEGIC HOTELS
Texarkana (I-30) AR 210 Holiday Inn
Flagstaff AZ 119 Embassy Suites
Phoenix (Airport - 44th St) AZ 229 Embassy Suites
Avon (Beaver Creek Resort) CO 72 Independent
Moline IL 138 Hampton Inn
Moline (Airport) IL 216 Holiday Inn
Moline (Airport) IL 110 Holiday Inn Express
Davenport IA 132 Hampton Inn
Davenport IA 279 Holiday Inn
Jackson (Downtown) MS 354 Crowne Plaza
Jackson (North) MS 222 Holiday Inn & Suites(R)
Omaha NE 187 Doubletree Guest Suites
Omaha (Southwest) NE 131 Hampton Inn
Omaha (Southwest) NE 78 Holiday Inn Express & Suites(R)
Syracuse NY 215 Embassy Suites
Columbus OH 194 Doubletree Guest Suites
Dayton OH 137 Doubletree Guest Suites
Greenville (Roper) SC 208 Crowne Plaza
Nashville (Airport) TN 138 Doubletree Guest Suites
Addison (North Dallas) TX 429 Crowne Plaza
Amarillo (I-40) TX 248 Holiday Inn
Beaumont (Midtown I-10) TX 190 Holiday Inn
Dallas (Market Center) TX 354 Crowne Plaza
Dallas (Park Central) TX 313 Harvey Hotel
Midland (Country Villa) TX 250 Holiday Inn
Odessa (Centre) TX 186 Holiday Inn Express & Suites
Odessa (Parkway Blvd) TX 245 Holiday Inn & Suites
Plano TX 279 Harvey Hotel
Waco (I-35) TX 170 Holiday Inn
Canada
Cambridge Ontario 143 Holiday Inn
Kitchener (Waterloo) Ontario 182 Holiday Inn
Peterborough (Waterfront) Ontario 153 Holiday Inn
Sarnia Ontario 151 Holiday Inn
(a) 100% of real estate interests are owned by FelCor unless
otherwise noted.
22
HOTEL PORTFOLIO LISTING
%
Owned
Hotel State Rooms (a) Brand
- ----- ----- ----- ----- -----
UNCONSOLIDATED OPERATIONS
Scottsdale (Downtown) AZ 218 50% Fairfield Inn(R)
Atlanta (Downtown) GA 211 50% Courtyard by Marriott(R)
Atlanta (Downtown) GA 242 50% Fairfield Inn
Great Bend KS 174 50% Holiday Inn
Hays KS 117 50% Hampton Inn
Hays KS 191 50% Holiday Inn
Salina KS 195 50% Holiday Inn
Salina (I-70) KS 93 50% Holiday Inn Express & Suites
New Orleans (Chateau LeMoyne) LA 171 50% Holiday Inn
Dallas (Regal Row) TX 204 50% Fairfield Inn
Houston (I-10 East) TX 160 50% Fairfield Inn
Houston (I-10 East) TX 90 50% Hampton Inn
Houston (Near the Galleria) TX 209 50% Courtyard by Marriott
Houston (Near the Galleria) TX 107 50% Fairfield Inn
23