-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, MS1N7Lk9yEEOdHCO2qVdVsCZIBOrcPkD2izEtjHG8/WU3vZQ5zG3rNhi/WD/DvtQ hAhRNg3yxDmvue4Od56Ebg== 0000899078-02-000227.txt : 20020415 0000899078-02-000227.hdr.sgml : 20020415 ACCESSION NUMBER: 0000899078-02-000227 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20020206 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20020325 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FELCOR LODGING TRUST INC CENTRAL INDEX KEY: 0000923603 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 752541756 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-14236 FILM NUMBER: 02584845 BUSINESS ADDRESS: STREET 1: 545 E JOHN CARPENTER FREEWAY STREET 2: SUITE 1300 CITY: IRVING STATE: TX ZIP: 75062 BUSINESS PHONE: 9724444900 MAIL ADDRESS: STREET 1: 545 E JOHN CARPENTER FREEWAY STREET 2: SUITE 1300 CITY: IRVING STATE: TX ZIP: 75062 FORMER COMPANY: FORMER CONFORMED NAME: FELCOR SUITE HOTELS INC DATE OF NAME CHANGE: 19940523 8-K 1 dec52001-8k.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): December 5, 2001 FELCOR LODGING TRUST INCORPORATED (Exact name of registrant as specified in its charter) Maryland 1-14236 72-2541756 (State or other jurisdiction of (Commission File Number) (IRS Employer incorporation) Identification No.) 545 E. John Carpenter Freeway Suite 1300 Irving, Texas 75062 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (972) 444-4900 (Former name or former address, if changed since last report) 1 Item 5. Other Events and Regulation FD Disclosure FelCor Lodging Trust Incorporated, a Maryland corporation ("FelCor"), issued a press release dated as of December 5, 2001, relating to the announcement of Michael A. DeNicola as Executive Vice President and Chief Investment Officer. This press release is filed with this report as Exhibit 99.1. Additionally, FelCor issued a press release dated as of February 6, 2002, relating to the operating results for the fourth quarter ended December 31, 2001. This press release is filed with this report as Exhibit 99.2. Item 7. Financial Statement and Exhibits (a) Financial statements of businesses acquired. Not applicable. (b) Pro forma financial information. Not applicable. (c) Exhibits. The following exhibits are furnished in accordance with Item 601 of Regulation S-K: Exhibit Number Description of Exhibit - ------------------ --------------------------------------------------- 99.1 Press Release dated as of December 5, 2001 99.2 Press Release dated as of February 6, 2002 2 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. FELCOR LODGING TRUST INCORPORATED Date: March 25, 2002 By: /s/ Lawrence D. Robinson ------------------------------------------- Name: Lawrence D. Robinson Title: Executive Vice President and General Counsel 3 INDEX TO EXHIBITS Exhibit Number Description of Exhibit - ------------------ --------------------------------------------------- 99.1 Press Release dated as of December 5, 2001 99.2 Press Release dated as of February 6, 2002 EX-99 3 ex99-1dec20018k.txt 99.1 EXHIBIT 99.1 FelCor Lodging Trust Incorporated (ticker: FCH, exchange: New York Stock Exchange) News Release - 12/5/01 FelCor Lodging Trust Announces Michael A. DeNicola as Chief Investment Officer IRVING, Texas, Dec 5, 2001 /PRNewswire via COMTEX/ -- FelCor Lodging Trust Incorporated (NYSE: FCH), one of the nation's largest hotel real estate investment trusts (REITs), today announced Michael A. DeNicola as Executive Vice President and Chief Investment Officer. Mr. DeNicola, 42, was most recently with Lend Lease Real Estate Investments, where he was Principal and Head of the Lodging and Leisure Group. In his role, Mr. DeNicola was responsible for managing a $1.1 billion hotel portfolio of 21 properties, including investment management, acquisitions and dispositions. Prior to Lend Lease, he held a number of leadership positions with Carlson Hospitality Worldwide including Executive Vice President of Carlson Vacation Ownership, Senior Vice President of Planning, Mergers and Acquisitions, and Vice President of Operations. Prior to his tenure with Carlson Hospitality, he held management positions with Kenneth Leventhal & Company and VMS Realty Partners. (Photo: http://www.newscom.com/cgi-bin/prnh/20011205/DAW034) - ------------------------------------------------------------ "We are extremely pleased to have Michael join FelCor," said Thomas J. Corcoran, Jr., FelCor's President and Chief Executive Officer. "With more than 25 years in the hospitality industry, he complements our strong management team. His significant experience in strategic planning, investment management and capital transactions brings substantial value to FelCor." Mr. DeNicola commented, "I am very excited about becoming a member of the FelCor family. Tom has assembled one of the best management teams and hotel portfolios in the lodging industry. FelCor is uniquely positioned to benefit from the expected economic recovery and take advantage of opportunities that become available." The Company also reported that Mr. William P. Stadler will be leaving FelCor at year end to pursue other interests. In his role as Senior Vice President and Director of Corporate Acquisitions, Mr. Stadler was instrumental in building FelCor's portfolio from 12 hotels in 1995 to more than 180 hotels today. During his tenure, FelCor grew from a total market capitalization of $260 million to $3.1 billion. Mr. Stadler was part of FelCor's executive team, reporting to Thomas J. Corcoran, Jr. FelCor's hotel portfolio consists of 183 hotels with nearly 50,000 rooms and suites and is concentrated primarily in the upscale and full-service segments. FelCor is the owner of the largest number of Embassy Suites(R), Crowne Plaza(R), Holiday Inn(R) and independently owned Doubletree(R)-branded hotels. Other leading hotel brands under which FelCor's hotels are operated include Sheraton Suites(R), Sheraton(R) and Westin(R). FelCor has a current market capitalization of approximately $3.1 billion. Additional information can be found on the Company's website at www.felcor.com . With the exception of historical information, the matters discussed in this news release include "forward looking statements" within the meaning of the federal securities laws that are qualified by cautionary statements contained herein and in FelCor's filings with the Securities and Exchange Commission. SOURCE FelCor Lodging Trust Incorporated EX-99 4 ex99-2dec2001_8k.txt 99.2 EXHIBIT 99.2 Press Release SOURCE: FelCor Lodging Trust Incorporated FelCor Exceeds Consensus Analyst Estimates; Fourth Quarter 2001 FFO Per Share of $0.21 IRVING, Texas, Feb. 6 /PRNewswire-FirstCall/ -- FelCor Lodging Trust Incorporated (NYSE: FCH - news), one of the nation's largest hotel real estate investment trusts (REITs), today reported operating results for the fourth quarter and year ended December 31, 2001. FelCor's operating results for the fourth quarter and full year 2001 reflect the soft lodging demand resulting from the general economic recession and the aftermath of the September 11 events. Fourth Quarter Results: FelCor's fourth quarter 2001 recurring Funds From Operations ("FFO") of $13.8 million or $0.21 per share exceeded consensus analyst estimates of $0.20 per share. FFO for the same period last year totaled $62.4 million, or $0.94 per share. Fourth quarter 2001 recurring Earnings Before Interest, Taxes, Depreciation, Amortization, and other non-cash charges ("EBITDA") totaled $60.8 million, compared to $109.1 million for fourth quarter 2000. For the quarter, the Company reported a net loss of $35.4 million, or a loss of $0.67 per share, compared to fourth quarter 2000 earnings of $35.1 million, or net income of $0.66 per share. Historically, the fourth quarter has been the weakest quarter of the year for FelCor's operating results. FelCor's total hotel portfolio revenue per available room ("RevPAR") for the fourth quarter decreased 23.0 percent, compared to the same period of 2000, with an October decline of 25.2 percent, a November decline of 23.6 percent and a December decline of 18.8 percent. For the quarter, occupancy declined 9.7 points to 55.2 percent, and average daily rate ("ADR") dropped 9.5 percent to $95.69, compared to the same quarter of 2000. The operating margin for FelCor's hotels during the fourth quarter 2001 decreased 340 basis points to 29.8 percent, compared to the same period in 2000. In the fourth quarter, FelCor recorded $10 million of non-recurring expenses. These expenses consisted primarily of a loss provision of $7 million on 13 hotels held for sale, and a $2.2 million cost incurred in connection with the termination of interest rate swaps. The loss provision resulted from the recent changes in the economic climate and the impact on the estimated fair market value of the hotels held for sale. The swap termination cost was incurred in connection with the application of proceeds from FelCor's fourth quarter $100 million private placement of senior unsecured notes. Full Year 2001 Results: "In 2001, the lodging industry experienced the worst decline in demand seen in the last three decades. It began with the recession in April and was magnified by the events of September 11. In this difficult environment, FelCor continued to generate a strong cash flow with a full year FFO of $2.75 per share, and common shareholder dividends of $1.70 per share. We also continued to invest in our hotels completing $64 million of capital expenditures, which represents 4.5 percent of total hotel revenues," said Thomas J. Corcoran, Jr., FelCor's President and CEO. For the year ended December 31, 2001, recurring FFO totaled $183.7 million, or $2.75 per share, compared to 2000 FFO of $288.6 million, or $4.29 per share. EBITDA for 2001 totaled $369.6 million, compared to $470.9 million in 2000. For the full year 2001, FelCor reported a net loss of $63.9 million, or a loss of $1.21 per share, compared to full year 2000 net income of $37.0 million, or $0.67 per share. FelCor's total hotel portfolio RevPAR decreased 11.4 percent for 2001, occupancy declined 6.6 points, and ADR dropped 2.4 percent compared to full year 2000. The operating margin for FelCor's hotels decreased 260 basis points, to 33.6 percent, compared to full year 2000. During 2001, the Company recorded $78 million of non-recurring expenses. These expenses consisted primarily of the previously reported lease termination costs of $37 million incurred in the first and second quarters, and $25 million of expenses associated with the MeriStar merger, which was terminated in the third quarter. Capital Structure: At December 31, 2001, FelCor had $1.94 billion of debt outstanding, which included $50 million drawn under its $615 million line of credit. The weighted average life of the Company's debt is seven years. At December 31, 2001, FelCor had $129 million in cash and cash equivalents. During the fourth quarter, FelCor amended its line of credit to allow for the relaxation of certain financial covenants through September 2002. In December, FelCor was the first hotel REIT after September 11 to access the high yield market, completing a $100 million senior unsecured note issuance. The Company also entered into $175 million of fixed to floating interest rate swaps during the quarter. "We are in a strong financial position to take advantage of an economic recovery. We have moderate leverage, minimal maturities over the next two years, $129 million in cash and equivalents (compared to $50 million outstanding under our line of credit), and a debt to annual EBITDA ratio of 4.9 times. However, during the first half of 2002, we plan to conserve cash," said Richard J. O'Brien, FelCor's Executive Vice President and Chief Financial Officer. 2002 Guidance: For the first quarter of 2002, FelCor currently anticipates its portfolio RevPAR will be 16 to 18 percent below the comparable period of the prior year. FFO per share is expected to be within the range of $0.40 to $0.45 per share for the first quarter of 2002, and EBITDA is expected to be within the range of $74 million to $78 million for the same period. The RevPAR decline for January 2002 was approximately 21 percent. FelCor currently anticipates that full year 2002 hotel portfolio RevPAR, compared to 2001, will be flat to negative three percent. RevPAR changes (negative) by quarter for 2002, compared to 2001 are currently expected to fall within the following ranges: First quarter (16)% to (18)% Second quarter (4)% to (7)% Third quarter 6% to 9% Fourth quarter 13% to 16% FFO per share for 2002 is anticipated to be within the range of $2.20 to $2.60 per share and EBITDA to be within the range of $340 to $360 million. The Company is currently anticipating 2002 maintenance capital expenditures of between $40 and $50 million. FelCor's decision to pay its common dividend will be determined each quarter based upon the operating results of that quarter, economic conditions, and other operating trends. We currently anticipate that FelCor should be able to pay an aggregate of $1.00 in dividends per common share during 2002, based on the low end of the Company's current FFO guidance. "During 2002, we anticipate a gradual recovery in lodging demand and believe the industry is headed towards a recovery in the second half of the year. FelCor is well positioned for these challenging times and to take advantage of opportunities that may result from them. We will continue to work closely with our brand managers to improve the competitive positioning of our hotels," added Mr. Corcoran. FelCor is the only lodging REIT that owns a diversified portfolio of nationally-branded, upscale and full-service hotels managed by strategic brand managers such as Hilton Hotels, Six Continents Hotels, and Starwood Hotels & Resorts. FelCor is competitively positioned to deliver superior shareholder returns through its strong management team, strategic brand manager alliances, diversified upscale and full-service hotels, value creation expertise, and financial strength. FelCor is the owner of the largest number of Embassy Suites(R), Crowne Plaza(R), Holiday Inn(R) and independently owned Doubletree(R)-branded hotels. FelCor has a current market capitalization of approximately $3.2 billion. Additional information can be found on the Company's website at www.felcor.com. FelCor invites you to listen to the Company's fourth quarter 2001 conference call on February 7, 2002, at 9:00 a.m. (Central Standard Time). The conference call will be webcast simultaneously via the Company's website at www.felcor.com. Interested investors and other parties who wish to access the call should go to the Company's website and click on the conference call microphone icon on either the Investor Relations or FelCor News pages. In addition, a phone replay will be available from Thursday, February 7, 2002 at 1:00 p.m. (Central Standard Time) through Thursday, February 28, 2002, at 7:00 p.m. (Central Standard Time) by dialing 888-280-8039 (access code is 9396). A recording of the call also will be archived and available at www.felcor.com. With the exception of historical information, the matters discussed in this news release include "forward looking statements" within the meaning of the federal securities laws. Forward looking statements are not guarantees of future performance. Numerous risks and uncertainties, and the occurrence of future events, may cause actual results to differ materially from those currently anticipated. General economic conditions, including the timing and magnitude of any recovery from the current recession, future acts of terrorism, the availability of capital, and numerous other factors may affect future results, performance and achievements. 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. Introduction The following financial information is presented in order to help our investors understand the financial position of the Company for the periods ended and as of December 31, 2001 and 2000. Information to Follow Fourth Quarter Highlights Financial Profile Results of Operations - Three Months Ended Results of Operations - Full Year Reconciliation of FFO and EBITDA - Three Months Ended Reconciliation of FFO and EBITDA - Full Year Debt Outstanding at December 31, 2001 Hotel Performance Statistics RevPAR Performance for Selected States Brand Distribution Selected State Distribution Fourth Quarter 2001 Highlights -- In October, $300 million in senior notes were redeemed which had been held in escrow subject to the MeriStar merger closing. The merger was terminated as a result of the disruption in the financial markets in the aftermath of September 11. -- In November, FelCor amended certain terms of its $615 million unsecured line of credit to allow for the relaxation of certain financial covenants through September 30, 2002. -- In December, FelCor completed a private placement of $100 million, which was an add-on to its existing 9.5 percent senior notes due 2008. Proceeds were used to partially paydown the Company's line of credit. -- In December, FelCor entered into interest rate swaps that effectively swapped its $175 million of 7.375 percent senior notes due 2004 to a floating rate of LIBOR plus 320 basis points. These swaps had an initial positive carry of over 200 basis points. -- During the fourth quarter, capital expenditures totaled $18 million. For the year ended December 31, 2001, the Company had $64 million of capital expenditures. -- FelCor sold the 182-room Doubletree Guest Suites(R) located in Tampa, Florida, realizing net sales proceeds of $3.4 million. -- On December 20, 2001, the Company declared fourth quarter dividends of $0.05 per share on its common stock and full preferred dividends of $0.4875 per share and $0.5625 per share on its $1.95 Series A cumulative convertible preferred stock and 9% Series B cumulative redeemable preferred stock, respectively. Financial Profile At December 31, 2001, FelCor's financial profile was as follows: -- Interest coverage ratio 2.3x -- Debt (net of cash) to annual EBITDA 4.9x -- Consolidated debt to investment in hotels, at cost 42.8% -- Borrowing capacity under its Line of Credit $565 million -- Fixed interest rate debt to total debt 88% -- Weighted average maturity of debt 6.8 years -- Mortgage debt to total assets 16.8% -- Cash and cash equivalents $129 million Results of Operations - Three Months Ended (in thousands, except per share data) Three Months Ended December 31, Pro Forma 2001 2000 (A) 2000 Revenues: Hotel operating revenue: Room $229,339 $305,332 $--- Food and beverage 57,154 71,519 --- Other operating departments 15,882 24,541 --- Percentage lease revenue --- --- 148,332 Retail space rental and other revenue 535 564 631 Total revenue 302,910 401,956 148,963 Expenses: Hotel operating expenses: Room 58,621 74,904 --- Food and beverage 43,133 54,017 --- Other operating departments 7,519 9,005 --- Other property related costs 90,243 109,075 --- Management fees 12,828 18,630 --- Taxes, insurance and lease expense 33,723 38,450 21,130 Corporate expenses 3,369 3,769 3,366 Depreciation 38,906 39,852 39,730 Total operating expenses 288,342 347,702 64,226 Operating income 14,568 54,254 84,737 Interest expense, net: Recurring financing 40,005 40,240 40,235 Merger related financing 274 --- --- Swap termination expense 2,225 --- --- Provision for losses on assets held for sale 7,000 --- --- Income (loss) before equity in income from unconsolidated entities, minority interests and gain on sale of assets (34,936) 14,014 44,502 Equity in income from unconsolidated entities 296 (1,839) 2,010 Minority interests 5,373 (1,684) (5,341) Gain on sale of assets --- 135 135 Net income (loss) (29,267) 10,626 41,306 Preferred dividends (6,150) (6,169) (6,169) Net income (loss) applicable to common shareholders $(35,417) $4,457 $35,137 Diluted per common share data: Net income (loss) applicable to common shareholders $(0.67) $0.08 $0.66 Weighted average common shares outstanding 52,639 53,616 53,202 See footnotes following Year Ended Reconciliation of FFO and EBITDA. Results of Operations - Full Year (in thousands, except per share data) Years Ended December 31, Pro Forma 2001 2000 (A) 2000 Revenues: Hotel operating revenue: Room $866,101 $1,028,267 $ --- Food and beverage 157,812 188,207 --- Other operating departments 58,931 75,176 --- Percentage lease revenue 115,137 125,864 536,907 Retail space rental and other revenue 2,990 2,186 3,057 Total revenue 1,200,971 1,419,700 539,964 Expenses: Hotel operating expenses: Room 212,857 245,407 --- Food and beverage 122,999 144,227 --- Other operating departments 26,789 29,682 --- Other property related costs 309,452 344,761 --- Management fees 38,534 49,435 --- Taxes, insurance and lease expense 141,621 165,731 92,633 Corporate expenses 12,678 13,266 12,256 Depreciation 157,692 161,516 160,745 Lease termination costs 36,604 --- --- Merger termination costs 19,919 --- --- Total operating expenses 1,079,145 1,154,025 265,634 Operating income 121,826 265,675 274,330 Interest expense, net: Recurring financing 158,343 156,712 156,712 Merger related financing 5,486 --- --- Swap termination expense 7,049 --- --- Provision for losses on assets held for sale 7,000 63,000 63,000 Income (loss) before equity in income from unconsolidated entities, minority interests, gain on sale of assets and extraordinary items (56,052) 45,963 54,618 Equity in income from unconsolidated entities 7,346 10,958 14,820 Minority interests 7,283 (7,003) (8,262) Gain on sale of assets 3,417 4,388 4,388 Income (loss) before extraordinary items (38,006) 54,306 65,564 Extraordinary charge from write off of deferred financing fees (1,270) (3,865) (3,865) Net income (loss) (39,276) 50,441 61,699 Preferred dividends (24,600) (24,682) (24,682) Net income (loss) applicable to common shareholders $(63,876) $25,759 $37,017 Diluted per common share data: Net income (loss) applicable to common shareholders $(1.21) $0.46 $0.67 Weighted average common shares outstanding 52,622 55,933 55,519 See footnotes following Year Ended Reconciliation of FFO and EBITDA. Reconciliation of FFO and EBITDA (in thousands, except per share and unit data) Three Months Ended December 31, Pro Forma 2001 2000 (A) 2000 Funds From Operations (FFO) (B): Net income (loss) $ (29,267) $ 10,626 $41,306 Provision for losses on assets held for sale 7,000 --- --- Abandoned projects 837 --- --- Gain on sale of hotel --- (135) (135) Non-recurring merger financing costs 274 --- --- Swap termination expense 2,225 --- --- Deferred rent --- --- (22,268) Series B preferred dividends (3,234) (3,234) (3,234) Depreciation 38,906 39,852 39,730 Depreciation from unconsolidated entities 3,104 2,538 2,538 Minority interest in FelCor Lodging LP (6,026) 816 4,471 FFO $13,819 $ 50,463 $62,408 Diluted FFO per common share and unit $0.21 $0.75 $0.94 Weighted average common shares and units outstanding 66,641 66,968 66,137 Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA): FFO $13,819 $ 50,463 $62,408 Interest expense 40,635 40,813 40,808 Interest expense from unconsolidated entities 2,413 2,239 2,239 Amortization expense 654 437 437 Series B preferred dividends 3,234 3,234 3,234 EBITDA $ 60,755 $ 97,186 $109,126 See footnotes following Year Ended Reconciliation of FFO and EBITDA. Reconciliation of FFO and EBITDA (in thousands, except per share and unit data) Years Ended December 31, Pro Forma 2001 2000 (A) 2000 Funds From Operations (FFO) (B): Net income (loss) $(39,276) $50,441 $61,699 Extraordinary charge 1,270 3,865 3,865 Provision for losses on assets held for sale 7,000 63,000 63,000 Abandoned projects 837 --- --- Gain on sale of hotel --- (2,595) (2,595) Lease termination costs 36,604 --- --- Merger costs: Termination costs 19,919 --- --- Non-recurring financing 5,486 --- --- Swap termination expense 7,049 --- --- Series B preferred dividends (12,937) (12,937) (12,937) Depreciation 157,692 161,516 160,745 Depreciation from unconsolidated entities 10,881 10,167 10,167 Minority interest in FelCor Lodging LP (10,868) 3,432 4,692 FFO $183,657 $276,889 $288,636 Diluted FFO per common share and unit $2.75 $4.07 $4.29 Weighted average common shares and units outstanding 66,675 68,069 67,239 Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA): FFO $183,657 $276,889 $288,636 Interest expense 161,226 158,620 158,620 Interest expense from unconsolidated entities 9,678 9,188 9,188 Amortization expense 2,093 1,480 1,480 Series B preferred dividends 12,937 12,937 12,937 EBITDA $369,591 $459,114 $470,861 (A) Pro forma 2000 is presented as if FelCor's acquisition of DJONT Operations L.L.C. and the acquisition of 12 hotel leases from Six Continents Hotels occurred January 1, 2000, and the acquisition of the remaining 88 hotel leases from Six Continents Hotels occurred on July 1, 2000. (B) FFO and EBITDA are adjusted for non-recurring items. With the exception of these adjustments, FelCor follows NAREIT's White Paper on Funds From Operations in computing FFO. Debt Outstanding At December 31, 2001, debt consisted of the following (in thousands): Weighted Average Rate Balance Line of credit 4.48% $49,675 Senior term notes (A) 8.45 1,192,232 Mortgage debt 8.01 687,810 Other 8.77 8,691 Total debt 8.19% $1,938,408 (A) Includes fixed to floating interest rate swaps of $175 million effectively swapping the 7.375 percent senior term notes due in 2004 to LIBOR plus 320 basis points. At December 31, 2001, future scheduled debt principal payments are as follows (in thousands): Year 2002 $12,922 2003 34,904 2004 238,903 2005 42,635 2006 14,217 2007 and thereafter 1,602,595 1,946,176 Discount accretion over term (7,768) Total debt $1,938,408 Hotel Performance Statistics The following table sets forth variances for 2001, compared to the same prior year period: Fourth Quarter Variance by Month Occupancy ADR RevPAR % Variance % Variance % Variance October (17.3) (9.6) (25.2) November (15.0) (10.1) (23.6) December (11.4) (8.4) (18.8) Fourth Quarter (14.9) (9.5) (23.0) The RevPAR decline for the month of January 2002 was approximately 21 percent. The following table sets forth historical occupancy, ADR, RevPAR, and the percentage changes therein between the periods presented for the hotels in which the Company had an ownership interest at December 31, 2001. Occupancy (%) Fourth Quarter Full Year % % 2001 2000 Variance 2001 2000 Variance Embassy Suites hotels 60.1 68.4 (12.2) 67.0 74.1 (9.6) Holiday-branded hotels 53.8 62.8 (14.4) 64.3 69.0 (6.9) Crowne Plaza hotels 52.4 65.6 (20.1) 60.1 70.9 (15.1) Doubletree-branded hotels 56.8 66.4 (14.5) 65.0 70.3 (7.4) Sheraton-branded hotels 52.0 66.8 (22.2) 62.2 71.4 (12.9) Other hotels 50.0 57.7 (13.4) 58.7 63.3 (7.4) Total hotels 55.2 64.9 (14.9) 63.9 70.5 (9.2) ADR (dollars) Fourth Quarter Full Year % % 2001 2000 Variance 2001 2000 Variance Embassy Suites hotels 118.53 129.12 (8.2) 127.90 127.96 0.0 Holiday-branded hotels 78.27 86.74 (9.8) 83.41 86.44 (3.5) Crowne Plaza hotels 93.75 109.67 (14.5) 101.62 106.00 (4.1) Doubletree-branded hotels 95.55 105.96 (9.8) 104.38 105.69 (1.2) Sheraton-branded hotels 103.03 114.29 (9.9) 109.14 112.47 (3.0) Other hotels 74.57 81.07 (8.0) 78.36 81.66 (4.0) Total hotels 95.69 105.79 (9.5) 102.18 104.64 (2.4) RevPAR (dollars) Fourth Quarter Full Year % % 2001 2000 Variance 2001 2000 Variance Embassy Suites hotels 71.21 88.38 (19.4) 85.66 94.78 (9.6) Holiday-branded hotels 42.09 54.51 (22.8) 53.64 59.68 (10.1) Crowne Plaza hotels 49.16 71.98 (31.7) 61.12 75.13 (18.6) Doubletree-branded hotels 54.26 70.35 (22.9) 67.88 74.26 (8.6) Sheraton-branded hotels 53.54 76.37 (29.9) 67.92 80.35 (15.5) Other hotels 37.30 46.80 (20.3) 45.97 51.72 (11.1) Total hotels 52.83 68.61 (23.0) 65.34 73.73 (11.4) RevPAR Performance for Selected States Hotels in Texas, California, Florida and Georgia contained the largest concentration of FelCor's hotels. The RevPAR changes during the periods ended December 31, 2001 (versus comparable periods for 2000) from FelCor's hotels in these states are as follows: RevPAR (dollars) Fourth Quarter Full Year 2001 2000 % Variance 2001 2000 % Variance Texas 41.88 55.06 (23.9) 51.70 58.78 (12.0) California 66.79 102.57 (34.9) 90.87 110.71 (17.9) Florida 47.66 65.10 (26.8) 64.08 71.99 (11.0) Georgia 50.68 60.99 (16.9) 62.80 67.93 (7.6) Brand Distribution Number Number Percentage of of Hotels of Rooms Room Revenue Embassy Suites 59 14,843 40.1 Holiday-branded hotels 59 16,914 28.6 Crowne Plaza 18 5,963 11.5 Doubletree-branded hotels 13 2,650 5.7 Sheraton-branded 10 3,269 7.0 Other hotels 24 4,848 7.1 Total 183 48,487 100.0 Selected State Distribution Number Number Percentage of of Hotels of Rooms Room Revenue Texas 41 11,138 18.2 California 19 6,026 17.3 Florida 17 5,529 11.2 Georgia 14 3,868 7.7 Total for four states 91 26,561 54.4 SOURCE: FelCor Lodging Trust Incorporated -----END PRIVACY-ENHANCED MESSAGE-----