(Mark One) | |
x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF |
Maryland | 75-2541756 | |||
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |||
545 E. John Carpenter Freeway, Suite 1300, Irving, Texas | 75062 | |||
(Address of principal executive offices) | (Zip Code) |
Large accelerated filer o | Accelerated filer x | |
Non-accelerated filer o (Do not check if a smaller reporting company) | Smaller reporting company o |
Page | |||
PART I − FINANCIAL INFORMATION | |||
Item 1. | Financial Statements | ||
Consolidated Balance Sheets June 30, 2011 and December 31, 2010 (unaudited) | |||
Consolidated Statements of Operations – For the Three and Six Months Ended June 30, 2011 and 2010 (unaudited) | |||
Consolidated Statements of Comprehensive Income (Loss) – For the Three and Six Months Ended June 30, 2011 and 2010 (unaudited) | |||
Consolidated Statements of Changes in Equity – For the Six Months Ended June 30, 2011 and 2010 (unaudited) | |||
Consolidated Statements of Cash Flows – For the Six Months Ended June 30, 2011 and 2010 (unaudited) | |||
Notes to Consolidated Financial Statements | |||
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | ||
General | |||
Results of Operations | |||
Non-GAAP Financial Measures | |||
Pro Rata Share of Rooms Owned | |||
Hotel Portfolio Composition | |||
Hotel Operating Statistics | |||
Hotel Portfolio | |||
Liquidity and Capital Resources | |||
Inflation | |||
Seasonality | |||
Disclosure Regarding Forward-Looking Statements | |||
Item 3. | Quantitative and Qualitative Disclosures about Market Risk | ||
Item 4. | Controls and Procedures | ||
PART II − OTHER INFORMATION | |||
Item 6. | Exhibits | ||
SIGNATURE |
Item 1. | Financial Statements. |
June 30, 2011 | December 31, 2010 | ||||||
Assets | |||||||
Investment in hotels, net of accumulated depreciation of $964,606 and $982,564 at June 30, 2011 and December 31, 2010, respectively | $ | 1,998,232 | $ | 1,985,779 | |||
Investment in unconsolidated entities | 72,733 | 75,920 | |||||
Hotels held for sale | 43,846 | — | |||||
Cash and cash equivalents | 231,049 | 200,972 | |||||
Restricted cash | 41,609 | 16,702 | |||||
Accounts receivable, net of allowance for doubtful accounts of $344 and $696 at June 30, 2011 and December 31, 2010, respectively | 39,266 | 27,851 | |||||
Deferred expenses, net of accumulated amortization of $11,850 and $17,892 at June 30, 2011 and December 31, 2010, respectively | 31,811 | 19,940 | |||||
Other assets | 34,281 | 32,271 | |||||
Total assets | $ | 2,492,827 | $ | 2,359,435 | |||
Liabilities and Equity | |||||||
Debt, net of discount of $36,740 and $53,193 at June 30, 2011 and December 31, 2010, respectively | $ | 1,612,106 | $ | 1,548,309 | |||
Distributions payable | 76,293 | 76,293 | |||||
Accrued expenses and other liabilities | 142,967 | 144,451 | |||||
Total liabilities | 1,831,366 | 1,769,053 | |||||
Commitments and contingencies | |||||||
Redeemable noncontrolling interests in FelCor LP, 640 and 285 units issued and outstanding at June 30, 2011 and December 31, 2010, respectively | 3,887 | 2,004 | |||||
Equity: | |||||||
Preferred stock, $0.01 par value, 20,000 shares authorized: | |||||||
Series A Cumulative Convertible Preferred Stock, 12,880 shares, liquidation value of $322,011, issued and outstanding at June 30, 2011 and December 31, 2010 | 309,362 | 309,362 | |||||
Series C Cumulative Redeemable Preferred Stock, 68 shares, liquidation value of $169,950, issued and outstanding at June 30, 2011 and December 31, 2010 | 169,412 | 169,412 | |||||
Common stock, $0.01 par value, 200,000 shares authorized and 124,569 shares issued at June 30, 2011, and 101,038 shares issued, including shares in treasury, at December 31, 2010 | 1,246 | 1,010 | |||||
Additional paid-in capital | 2,350,883 | 2,190,308 | |||||
Accumulated other comprehensive income | 27,931 | 26,457 | |||||
Accumulated deficit | (2,221,290 | ) | (2,054,625 | ) | |||
Less: Common stock in treasury, at cost, of 4,156 shares at December 31, 2010 | — | (73,341 | ) | ||||
Total FelCor stockholders’ equity | 637,544 | 568,583 | |||||
Noncontrolling interests in other partnerships | 20,030 | 19,795 | |||||
Total equity | 657,574 | 588,378 | |||||
Total liabilities and equity | $ | 2,492,827 | $ | 2,359,435 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2011 | 2010 | 2011 | 2010 | ||||||||||||
Revenues: | |||||||||||||||
Hotel operating revenue | $ | 256,355 | $ | 227,704 | $ | 481,848 | $ | 435,764 | |||||||
Other revenue | 1,011 | 1,007 | 1,236 | 1,372 | |||||||||||
Total revenues | 257,366 | 228,711 | 483,084 | 437,136 | |||||||||||
Expenses: | |||||||||||||||
Hotel departmental expenses | 90,618 | 78,987 | 172,874 | 153,698 | |||||||||||
Other property related costs | 67,646 | 61,222 | 133,946 | 120,862 | |||||||||||
Management and franchise fees | 11,849 | 10,970 | 22,332 | 20,699 | |||||||||||
Taxes, insurance and lease expense | 23,563 | 23,595 | 43,621 | 45,245 | |||||||||||
Corporate expenses | 6,910 | 6,510 | 16,447 | 16,357 | |||||||||||
Depreciation and amortization | 34,011 | 34,158 | 67,861 | 68,639 | |||||||||||
Impairment loss | 11,706 | — | 11,706 | — | |||||||||||
Other expenses | 1,616 | 801 | 2,247 | 1,362 | |||||||||||
Total operating expenses | 247,919 | 216,243 | 471,034 | 426,862 | |||||||||||
Operating income | 9,447 | 12,468 | 12,050 | 10,274 | |||||||||||
Interest expense, net | (34,875 | ) | (35,856 | ) | (68,348 | ) | (70,582 | ) | |||||||
Debt extinguishment | (23,660 | ) | 46,186 | (23,905 | ) | 46,186 | |||||||||
Gain on involuntary conversion, net | 21 | — | 171 | — | |||||||||||
Income (loss) before equity in income (loss) from unconsolidated entities | (49,067 | ) | 22,798 | (80,032 | ) | (14,122 | ) | ||||||||
Equity in income (loss) from unconsolidated entities | 31 | 286 | (1,552 | ) | (1,188 | ) | |||||||||
Income (loss) from continuing operations | (49,036 | ) | 23,084 | (81,584 | ) | (15,310 | ) | ||||||||
Discontinued operations | 6,639 | (1,094 | ) | 7,461 | (25,642 | ) | |||||||||
Net income (loss) | (42,397 | ) | 21,990 | (74,123 | ) | (40,952 | ) | ||||||||
Net income attributable to noncontrolling interests in other partnerships | (51 | ) | (325 | ) | (109 | ) | (96 | ) | |||||||
Net loss (income) attributable to redeemable noncontrolling interests in FelCor LP | 183 | (51 | ) | 303 | 274 | ||||||||||
Net income (loss) attributable to FelCor | (42,265 | ) | 21,614 | (73,929 | ) | (40,774 | ) | ||||||||
Preferred dividends | (9,678 | ) | (9,678 | ) | (19,356 | ) | (19,356 | ) | |||||||
Net income (loss) attributable to FelCor common stockholders | $ | (51,943 | ) | $ | 11,936 | $ | (93,285 | ) | $ | (60,130 | ) | ||||
Basic and diluted per common share data: | |||||||||||||||
Income (loss) from continuing operations | $ | (0.48 | ) | $ | 0.19 | $ | (0.92 | ) | $ | (0.53 | ) | ||||
Net income (loss) | $ | (0.42 | ) | $ | 0.17 | $ | (0.85 | ) | $ | (0.92 | ) | ||||
Basic and diluted weighted average common shares outstanding | 122,992 | 66,531 | 109,249 | 65,014 |
Three Months Ended | Six Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2011 | 2010 | 2011 | 2010 | ||||||||||||
Net income (loss) | $ | (42,397 | ) | $ | 21,990 | $ | (74,123 | ) | $ | (40,952 | ) | ||||
Foreign currency translation adjustment | 186 | (2,731 | ) | 1,478 | (652 | ) | |||||||||
Comprehensive income (loss) | (42,211 | ) | 19,259 | (72,645 | ) | (41,604 | ) | ||||||||
Comprehensive income attributable to noncontrolling interests in other partnerships | (51 | ) | (325 | ) | (109 | ) | (96 | ) | |||||||
Comprehensive loss (income) attributable to redeemable noncontrolling interests in FelCor LP | 183 | (39 | ) | 299 | 277 | ||||||||||
Comprehensive income (loss) attributable to FelCor | $ | (42,079 | ) | $ | 18,895 | $ | (72,455 | ) | $ | (41,423 | ) |
Preferred Stock | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income | Noncontrolling Interests in Other Partnerships | ||||||||||||||||||||||||||||||||||||||
Number of Shares | Amount | Number of Shares | Amount | Accumulated Deficit | Treasury Stock | Comprehensive Loss | Total Equity | |||||||||||||||||||||||||||||||||||
Balance at December 31, 2009 | 12,948 | $ | 478,774 | 69,413 | $ | 694 | $ | 2,021,837 | $ | 23,528 | $ | (1,792,822 | ) | $ | (71,895 | ) | $ | 22,583 | $ | 682,699 | ||||||||||||||||||||||
Issuance of common stock | — | — | 31,625 | 316 | 166,256 | — | — | — | — | 166,572 | ||||||||||||||||||||||||||||||||
Issuance of stock awards | — | — | — | — | (229 | ) | — | — | 297 | — | 68 | |||||||||||||||||||||||||||||||
Amortization of stock awards | — | — | — | — | 2,520 | — | — | — | — | 2,520 | ||||||||||||||||||||||||||||||||
Forfeiture of stock awards | — | — | — | — | 149 | — | — | (639 | ) | — | (490 | ) | ||||||||||||||||||||||||||||||
Allocation to redeemable noncontrolling interests | — | — | — | — | (687 | ) | — | — | — | — | (687 | ) | ||||||||||||||||||||||||||||||
Contribution from noncontrolling interests | — | — | — | — | — | — | — | — | 15 | 15 | ||||||||||||||||||||||||||||||||
Distribution to noncontrolling interests | — | — | — | — | — | — | — | — | (980 | ) | (980 | ) | ||||||||||||||||||||||||||||||
Other | — | — | — | — | (1,116 | ) | — | (10 | ) | — | 116 | (1,010 | ) | |||||||||||||||||||||||||||||
Preferred dividends accrued: | ||||||||||||||||||||||||||||||||||||||||||
$0.975 per Series A preferred share | — | — | — | — | — | — | (12,558 | ) | — | — | (12,558 | ) | ||||||||||||||||||||||||||||||
$1.00 per Series C depositary preferred share | — | — | — | — | — | — | (6,798 | ) | — | — | (6,798 | ) | ||||||||||||||||||||||||||||||
Comprehensive loss: | ||||||||||||||||||||||||||||||||||||||||||
Foreign exchange translation | — | — | — | — | — | (649 | ) | — | — | — | $ | (649 | ) | |||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | (40,774 | ) | — | 96 | (40,678 | ) | ||||||||||||||||||||||||||||||
Comprehensive loss | $ | (41,327 | ) | (41,327 | ) | |||||||||||||||||||||||||||||||||||||
Balance at June 30, 2010 | 12,948 | $ | 478,774 | 101,038 | $ | 1,010 | $ | 2,188,730 | $ | 22,879 | $ | (1,852,962 | ) | $ | (72,237 | ) | $ | 21,830 | $ | 788,024 | ||||||||||||||||||||||
Balance at December 31, 2010 | 12,948 | $ | 478,774 | 101,038 | $ | 1,010 | $ | 2,190,308 | $ | 26,457 | $ | (2,054,625 | ) | $ | (73,341 | ) | $ | 19,795 | $ | 588,378 | ||||||||||||||||||||||
Issuance of common stock | — | — | 27,600 | 276 | 158,200 | — | — | — | — | 158,476 | ||||||||||||||||||||||||||||||||
Retirement of treasury stock | — | — | (4,156 | ) | (41 | ) | — | — | (73,300 | ) | 73,341 | — | — | |||||||||||||||||||||||||||||
Issuance of stock awards | — | — | 86 | 1 | 499 | — | — | — | — | 500 | ||||||||||||||||||||||||||||||||
Amortization of stock awards | — | — | — | — | 1,626 | — | — | — | — | 1,626 | ||||||||||||||||||||||||||||||||
Forfeiture of stock awards | — | — | (10 | ) | — | — | — | (78 | ) | — | — | (78 | ) | |||||||||||||||||||||||||||||
Conversion of operating partnership units into common shares | — | — | 11 | — | 79 | — | — | — | — | 79 | ||||||||||||||||||||||||||||||||
Allocation to redeemable noncontrolling interests | — | — | — | — | 239 | — | — | — | — | 239 | ||||||||||||||||||||||||||||||||
Contribution from noncontrolling interests | — | — | — | — | — | — | — | — | 796 | 796 | ||||||||||||||||||||||||||||||||
Distribution to noncontrolling interests | — | — | — | — | — | — | — | — | (670 | ) | (670 | ) | ||||||||||||||||||||||||||||||
Other | — | — | — | — | (68 | ) | — | (2 | ) | — | — | (70 | ) | |||||||||||||||||||||||||||||
Preferred dividends accrued: | ||||||||||||||||||||||||||||||||||||||||||
$0.975 per Series A preferred share | — | — | — | — | — | — | (12,558 | ) | — | — | (12,558 | ) | ||||||||||||||||||||||||||||||
$1.00 per Series C depositary preferred share | — | — | — | — | — | — | (6,798 | ) | — | — | (6,798 | ) | ||||||||||||||||||||||||||||||
Comprehensive loss: | ||||||||||||||||||||||||||||||||||||||||||
Foreign exchange translation | — | — | — | — | — | 1,474 | — | — | — | $ | 1,474 | |||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | (73,929 | ) | — | 109 | (73,820 | ) | ||||||||||||||||||||||||||||||
Comprehensive loss | $ | (72,346 | ) | (72,346 | ) | |||||||||||||||||||||||||||||||||||||
Balance at June 30, 2011 | 12,948 | $ | 478,774 | — | 124,569 | $ | 1,246 | $ | 2,350,883 | $ | 27,931 | $ | (2,221,290 | ) | $ | — | $ | 20,030 | $ | 657,574 |
Six Months Ended June 30, | |||||||
2011 | 2010 | ||||||
Cash flows from operating activities: | |||||||
Net loss | $ | (74,123 | ) | $ | (40,952 | ) | |
Adjustments to reconcile net loss to net cash provided by operating activities: | |||||||
Depreciation and amortization | 70,854 | 74,567 | |||||
Gain on sale of hotels, net | (6,660 | ) | — | ||||
Gain on involuntary conversion, net | (171 | ) | — | ||||
Amortization of deferred financing fees and debt discount | 9,351 | 8,608 | |||||
Amortization of unearned officers’ and directors’ compensation | 3,577 | 3,257 | |||||
Equity in loss from unconsolidated entities | 1,552 | 1,188 | |||||
Distributions of income from unconsolidated entities | 810 | 1,110 | |||||
Debt extinguishment | 23,961 | (46,060 | ) | ||||
Impairment loss | 12,303 | 21,060 | |||||
Changes in assets and liabilities: | |||||||
Accounts receivable | (11,449 | ) | (5,469 | ) | |||
Restricted cash – operations | 2,005 | 4,066 | |||||
Other assets | (12,604 | ) | (4,059 | ) | |||
Accrued expenses and other liabilities | (4,880 | ) | 23,924 | ||||
Net cash flow provided by operating activities | 14,526 | 41,240 | |||||
Cash flows from investing activities: | |||||||
Acquisition of hotels | (137,985 | ) | — | ||||
Improvements and additions to hotels | (35,244 | ) | (18,393 | ) | |||
Additions to condominium project | (318 | ) | (162 | ) | |||
Proceeds from asset dispositions | 52,093 | — | |||||
Change in restricted cash – investing | (412 | ) | (2,646 | ) | |||
Insurance proceeds | 282 | — | |||||
Distributions from unconsolidated entities | 825 | 559 | |||||
Contributions to unconsolidated entities | — | (25,122 | ) | ||||
Net cash flow used in investing activities | (120,759 | ) | (45,764 | ) | |||
Cash flows from financing activities: | |||||||
Proceeds from borrowings | 1,087,267 | 212,121 | |||||
Repayment of borrowings | (1,050,566 | ) | (347,692 | ) | |||
Payment of deferred financing fees | (18,230 | ) | (6,615 | ) | |||
Change in restricted cash – financing | (24,000 | ) | — | ||||
Acquisition of noncontrolling interest | — | (1,000 | ) | ||||
Distributions paid to noncontrolling interests | (670 | ) | (980 | ) | |||
Contributions from noncontrolling interests | 796 | 15 | |||||
Distributions paid to preferred stockholders | (19,356 | ) | — | ||||
Net proceeds from common stock issuance | 158,476 | 166,704 | |||||
Proceeds from FelCor LP unit issuance | 2,500 | — | |||||
Net cash flow provided by financing activities | 136,217 | 22,553 | |||||
Effect of exchange rate changes on cash | 93 | (86 | ) | ||||
Net change in cash and cash equivalents | 30,077 | 17,943 | |||||
Cash and cash equivalents at beginning of periods | 200,972 | 263,531 | |||||
Cash and cash equivalents at end of periods | $ | 231,049 | $ | 281,474 | |||
Supplemental cash flow information – interest paid | $ | 59,344 | $ | 64,490 |
1. | Organization |
Brand | Hotels | Rooms | ||||||
Embassy Suites Hotels® | 41 | 10,718 | ||||||
Holiday Inn® | 15 | 5,154 | ||||||
Sheraton® and Westin® | 7 | 2,478 | ||||||
Doubletree® and Hilton® | 8 | 1,856 | ||||||
Marriott® and Renaissance® | 3 | 1,321 | ||||||
Fairmont® | 1 | 383 | ||||||
Morgans Hotel Group | 2 | 282 | ||||||
Total | 77 | 22,192 |
2. | Hotel Acquisitions |
Assets | |||
Investment in hotels(a) | $ | 136,035 | |
Restricted cash | 2,500 | ||
Accounts receivable | 635 | ||
Other assets | 322 | ||
Total assets acquired | 139,492 | ||
Liabilities | |||
Accrued expenses and other liabilities | 1,507 | ||
Net assets acquired | $ | 137,985 |
2. | Hotel Acquisitions — (continued) |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2011 | 2010 | 2011 | 2010 | ||||||||||||
Total revenues | $ | 262,141 | $ | 236,729 | $ | 494,430 | $ | 451,972 | |||||||
Net income (loss) | $ | (42,142 | ) | $ | 22,020 | $ | (75,321 | ) | $ | (42,087 | ) | ||||
Earnings per share - basic and diluted | $ | (0.42 | ) | $ | 0.17 | $ | (0.86 | ) | $ | (0.94 | ) |
3. | Change in Accounting Estimate |
June 30, | December 31, | ||||||||
2011 | 2010 | ||||||||
Investment in hotels, net of accumulated depreciation | $ | 181,769 | $ | 192,584 | |||||
Total assets | $ | 205,326 | $ | 209,742 | |||||
Debt | $ | 152,893 | $ | 154,590 | |||||
Total liabilities | $ | 159,268 | $ | 159,170 | |||||
Equity | $ | 46,058 | $ | 50,572 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||
2011 | 2010 | 2011 | 2010 | ||||||||||||||||
Total revenues | $ | 18,328 | $ | 19,648 | $ | 30,016 | $ | 32,387 | |||||||||||
Net income (loss) | $ | 992 | $ | 1,022 | $ | (1,243 | ) | $ | (2,114 | ) | |||||||||
Net income (loss) attributable to FelCor | $ | 496 | $ | 751 | $ | (622 | ) | $ | (817 | ) | |||||||||
Gain on joint venture liquidation | — | — | — | 559 | |||||||||||||||
Depreciation of cost in excess of book value | (465 | ) | (465 | ) | (930 | ) | (930 | ) | |||||||||||
Equity in income (loss) from unconsolidated entities | $ | 31 | $ | 286 | $ | (1,552 | ) | $ | (1,188 | ) |
June 30, | December 31, | ||||||||
2011 | 2010 | ||||||||
Hotel-related investments | $ | 14,104 | $ | 15,736 | |||||
Cost in excess of book value of hotel investments | 49,704 | 50,634 | |||||||
Land and condominium investments | 8,925 | 9,550 | |||||||
$ | 72,733 | $ | 75,920 |
Three Months Ended | Six Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2011 | 2010 | 2011 | 2010 | ||||||||||||
Hotel investments | $ | 34 | $ | 292 | $ | (928 | ) | $ | (613 | ) | |||||
Other investments | (3 | ) | (6 | ) | (624 | ) | (575 | ) | |||||||
Equity in income (loss) from unconsolidated entities | $ | 31 | $ | 286 | $ | (1,552 | ) | $ | (1,188 | ) |
6. | Debt |
Encumbered Hotels | Interest Rate (%) | Maturity Date | June 30, 2011 | December 31, 2010 | |||||||||||||
Line of credit(a) | 11 hotels | L + 4.50 | August 2014(b) | $ | — | $ | — | ||||||||||
Mortgage debt | |||||||||||||||||
Mortgage debt(c) | 10 hotels | L + 0.93 | (d) | November 2011 | 204,714 | 250,000 | |||||||||||
Mortgage debt(e) | 9 hotels | L + 5.10 | (f) | April 2015 | 211,968 | 212,000 | |||||||||||
Mortgage debt | 7 hotels | 9.02 | April 2014 | 110,973 | 113,220 | ||||||||||||
Mortgage debt | 5 hotels | (g) | 6.66 | June - August 2014 | 68,300 | 69,206 | |||||||||||
Mortgage debt(h) | 1 hotel | L + 1.50 | June 2012 | 24,000 | 27,770 | ||||||||||||
Mortgage debt | 1 hotel | 5.81 | July 2016 | 11,100 | 11,321 | ||||||||||||
Other | — | 4.25 | August 2011 | 791 | 524 | ||||||||||||
Senior notes | |||||||||||||||||
Senior secured notes | 6 hotels | 6.75 | June 2019 | 525,000 | — | ||||||||||||
Senior secured notes(i) | 14 hotels | 10.00 | October 2014 | 455,260 | 582,821 | ||||||||||||
Retired debt | — | — | — | — | 281,447 | ||||||||||||
Total | 64 hotels | $ | 1,612,106 | $ | 1,548,309 |
(a) | We currently have full availability under our $225 million line of credit. |
(b) | The line of credit can be extended for one year (to 2015), subject to satisfying certain conditions. |
(c) | $26.5 million was repaid on this note after June 30, 2011 from proceeds of a hotel sale. |
(d) | We purchased an interest rate cap ($250 million notional amount) that caps LIBOR at 7.8% and expires November 2011. |
(e) | $8.6 million was repaid on this note after June 30, 2011 from proceeds of a hotel sale. |
(f) | LIBOR (for this loan) is subject to a 3% floor. We purchased an interest rate cap ($212 million notional amount) that caps LIBOR at 5.0% and expires May 2012. |
(g) | The hotels securing this debt are subject to separate loan agreements and are not cross-collateralized. |
(h) | This note was repaid after June 30, 2011. |
(i) | $492 million in aggregate principal outstanding (after redemption of $144 million in aggregate principal in June 2011) and were initially sold at a discount that provided an effective yield of 12.875% before transaction costs. |
6. | Debt — (continued) |
Three Months Ended | Six Months Ended | ||||||||||||||||||
June 30, | June 30, | ||||||||||||||||||
2011 | 2010 | 2011 | 2010 | ||||||||||||||||
Room revenue | $ | 199,188 | $ | 179,004 | $ | 375,168 | $ | 341,835 | |||||||||||
Food and beverage revenue | 42,576 | 34,756 | 79,711 | 67,411 | |||||||||||||||
Other operating departments | 14,591 | 13,944 | 26,969 | 26,518 | |||||||||||||||
Total hotel operating revenue | $ | 256,355 | $ | 227,704 | $ | 481,848 | $ | 435,764 |
Three Months Ended June 30, | |||||||||||||||||
2011 | 2010 | ||||||||||||||||
Amount | % of Total Hotel Operating Revenue | Amount | % of Total Hotel Operating Revenue | ||||||||||||||
Room | $ | 52,433 | 20.5 | % | $ | 46,308 | 20.3 | % | |||||||||
Food and beverage | 31,534 | 12.3 | 26,488 | 11.6 | |||||||||||||
Other operating departments | 6,651 | 2.5 | 6,191 | 2.8 | |||||||||||||
Total hotel departmental expenses | $ | 90,618 | 35.3 | % | $ | 78,987 | 34.7 | % |
Six Months Ended June 30, | |||||||||||||||||
2011 | 2010 | ||||||||||||||||
Amount | % of Total Hotel Operating Revenue | Amount | % of Total Hotel Operating Revenue | ||||||||||||||
Room | $ | 99,633 | 20.7 | % | $ | 89,689 | 20.6 | % | |||||||||
Food and beverage | 60,692 | 12.6 | 52,013 | 11.9 | |||||||||||||
Other operating departments | 12,549 | 2.6 | 11,996 | 2.8 | |||||||||||||
Total hotel departmental expenses | $ | 172,874 | 35.9 | % | $ | 153,698 | 35.3 | % |
Three Months Ended June 30, | |||||||||||||||||
2011 | 2010 | ||||||||||||||||
Amount | % of Total Hotel Operating Revenue | Amount | % of Total Hotel Operating Revenue | ||||||||||||||
Hotel general and administrative expense | $ | 22,328 | 8.7 | % | $ | 19,878 | 8.7 | % | |||||||||
Marketing | 20,910 | 8.2 | 19,014 | 8.4 | |||||||||||||
Repair and maintenance | 12,739 | 5.0 | 11,594 | 5.1 | |||||||||||||
Utilities | 11,669 | 4.5 | 10,736 | 4.7 | |||||||||||||
Total other property operating costs | $ | 67,646 | 26.4 | % | $ | 61,222 | 26.9 | % |
Six Months Ended June 30, | |||||||||||||||||
2011 | 2010 | ||||||||||||||||
Amount | % of Total Hotel Operating Revenue | Amount | % of Total Hotel Operating Revenue | ||||||||||||||
Hotel general and administrative expense | $ | 44,404 | 9.2 | % | $ | 39,181 | 9.0 | % | |||||||||
Marketing | 41,184 | 8.5 | 36,730 | 8.4 | |||||||||||||
Repair and maintenance | 25,244 | 5.2 | 23,316 | 5.4 | |||||||||||||
Utilities | 23,114 | 4.9 | 21,635 | 4.9 | |||||||||||||
Total other property operating costs | $ | 133,946 | 27.8 | % | $ | 120,862 | 27.7 | % |
Three Months Ended | Six Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2011 | 2010 | 2011 | 2010 | ||||||||||||
Hotel lease expense(a) | $ | 10,497 | $ | 10,015 | $ | 18,801 | $ | 17,773 | |||||||
Land lease expense(b) | 2,725 | 2,550 | 4,960 | 4,704 | |||||||||||
Real estate and other taxes | 8,047 | 8,387 | 14,946 | 16,777 | |||||||||||
Property insurance, general liability insurance and other | 2,294 | 2,643 | 4,914 | 5,991 | |||||||||||
Total taxes, insurance and lease expense | $ | 23,563 | $ | 23,595 | $ | 43,621 | $ | 45,245 |
(a) | Hotel lease expense is recorded by the consolidated operating lessees of 12 hotels owned by unconsolidated entities, and is partially (generally 49%) offset through noncontrolling interests in other partnerships. Our 50% share of the corresponding lease income is recorded through equity in income from unconsolidated entities. Hotel lease expense includes percentage rent of $5.1 million and $4.7 million for the three months ended June 30, 2011 and 2010, respectively, and $8.0 million and $7.1 million for the six months ended June 30, 2011 and 2010, respectively. |
(b) | Land lease expense includes percentage rent of $1.2 million and $1.0 million for the three months ended June 30, 2011 and 2010, respectively, and $1.9 million and $1.6 million for the six months ended June 30, 2011 and 2010, respectively. |
Three Months Ended | Six Months Ended | ||||||||||||||||||
June 30, | June 30, | ||||||||||||||||||
2011 | 2010 | 2011 | 2010 | ||||||||||||||||
Hotel operating revenue | $ | 8,811 | $ | 21,633 | $ | 20,665 | $ | 39,619 | |||||||||||
Operating expenses | (8,447 | ) | (a) | (21,283 | ) | (19,098 | ) | (a) | (62,303 | ) | (b) | ||||||||
Operating income (loss) from discontinued operations | $ | 364 | $ | 350 | $ | 1,567 | $ | (22,684 | ) | ||||||||||
Interest expense, net | (335 | ) | (1,318 | ) | (709 | ) | (2,832 | ) | |||||||||||
Debt extinguishment | (50 | ) | (126 | ) | (57 | ) | (126 | ) | |||||||||||
Gain on sale of hotels, net | 6,660 | — | 6,660 | — | |||||||||||||||
Income (loss) from discontinued operations | $ | 6,639 | $ | (1,094 | ) | $ | 7,461 | $ | (25,642 | ) |
(a) | Includes an impairment charge of $598,000. |
(b) | Includes an impairment charge of $21.1 million. |
Three Months Ended | Six Months Ended | ||||||||||||||||||
June 30, | June 30, | ||||||||||||||||||
2011 | 2010 | 2011 | 2010 | ||||||||||||||||
Numerator: | |||||||||||||||||||
Net income (loss) attributable to FelCor | $ | (42,265 | ) | $ | 21,614 | $ | (73,929 | ) | $ | (40,774 | ) | ||||||||
Discontinued operations attributable to FelCor | (6,616 | ) | 1,089 | (7,435 | ) | 25,527 | |||||||||||||
Income (loss) from continuing operations attributable to FelCor | (48,881 | ) | 22,703 | (81,364 | ) | (15,247 | ) | ||||||||||||
Less: Preferred dividends | (9,678 | ) | (9,678 | ) | (19,356 | ) | (19,356 | ) | |||||||||||
Less: Undistributed earnings allocated to unvested restricted stock | — | (352 | ) | — | — | ||||||||||||||
Numerator for continuing operations attributable to FelCor common stockholders | (58,559 | ) | 12,673 | (100,720 | ) | (34,603 | ) | ||||||||||||
Discontinued operations attributable to FelCor | 6,616 | (1,089 | ) | 7,435 | (25,527 | ) | |||||||||||||
Numerator for basic and diluted income (loss) attributable to FelCor common stockholders | $ | (51,943 | ) | $ | 11,584 | $ | (93,285 | ) | $ | (60,130 | ) | ||||||||
Denominator: | |||||||||||||||||||
Denominator for basic and diluted income (loss) per share | 122,992 | 66,531 | 109,249 | 65,014 | |||||||||||||||
Basic and diluted income (loss) per share data: | |||||||||||||||||||
Income (loss) from continuing operations | $ | (0.48 | ) | $ | 0.19 | $ | (0.92 | ) | $ | (0.53 | ) | ||||||||
Discontinued operations | $ | 0.05 | $ | (0.02 | ) | $ | 0.07 | $ | (0.39 | ) | |||||||||
Net income (loss) | $ | (0.42 | ) | $ | 0.17 | $ | (0.85 | ) | $ | (0.92 | ) |
Three Months Ended | Six Months Ended | ||||||
June 30, | June 30, | ||||||
2011 | 2010 | 2011 | 2010 | ||||
Series A convertible preferred shares | 9,985 | 9,985 | 9,985 | 9,985 |
Six Months Ended June 30, | |||||||||
2011 | 2010 | ||||||||
Balance at beginning of period | $ | 2,004 | $ | 1,062 | |||||
Issuance of units | 2,500 | — | |||||||
Conversion of units | (79 | ) | — | ||||||
Redemption value allocation | (239 | ) | 687 | ||||||
Comprehensive income (loss): | |||||||||
Foreign exchange translation | 4 | (3 | ) | ||||||
Net loss | (303 | ) | (274 | ) | |||||
Balance at end of period | $ | 3,887 | $ | 1,472 |
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
• | We began marketing 14 non-strategic hotels for sale during the fourth quarter of 2010. Through the date of this report, we have sold six hotels in 2011, one hotel in 2010 and we currently have agreements to sell, or are negotiating contracts to sell, five additional hotels. |
• | In March 2011, we established a $225 million secured line of credit. We had no borrowings under the line at June 30, 2011, and the full $225 million is available for general corporate purposes, including repayment of other debt and future acquisitions. |
• | In April 2011, we received approximately $158 million of aggregate net proceeds (after underwriting discounts and commissions) from a public offering of 27.6 million shares of our common stock. Proceeds from this offering were used to redeem $144 million of our 10% senior notes. |
• | In May 2011, our wholly-owned subsidiary issued $525.0 million in aggregate principal amount of 6.75% senior secured notes due 2019. Net proceeds after the initial purchasers' discount and expenses were approximately $511 million, a portion of which were used to purchase two midtown Manhattan hotels, Royalton and Morgans (282 guest rooms, in total), for $140.0 million, with the remainder available for general corporate purposes. |
• | We repaid the remainder of our 9% senior notes ($46.4 million) that matured in June 2011. |
• | Total revenue was $257.4 million, a 12.5% increase compared to the same period in 2010. The increase in revenue is primarily attributed to a 5.3% increase in same store RevPAR (6.2% at our comparable hotels and -3.9% at our hotels marketed for sale), which includes a 1.9% increase in occupancy and a 3.4% increase in ADR and $16.8 million in revenue from our recently-acquired hotels (the Fairmont Copley Plaza, acquired in August 2010, and Royalton and Morgans, acquired in May 2011). |
• | Hotel departmental expenses increased $11.6 million compared to the same period in 2010 due to a combination of higher occupancies and $7.6 million of hotel departmental expenses from our recently-acquired hotels. As a percentage of total revenue, hotel departmental expenses increased from 34.5% to 35.2% compared to the same period in 2010. These changes in departmental expenses as a percent of revenue are primarily due to the mix and nature of the business of the Fairmont Copley Plaza, which receives a significant portion of its revenue from food and beverage operations. Food and beverage revenue generally has much higher expenses as a percent of revenue than room revenue. |
• | Other property related costs increased $6.4 million due to a combination of higher occupancies, and $3.8 million from our recently-acquired hotels. As a percentage of total revenue, these costs remained essentially flat compared to the same period in 2010. |
• | Management and franchise fees increased $879,000 compared to the same period in 2010 due to a combination of higher revenues (which serve as the basis for determining such fees), and $437,000 of management and franchise fees for our recently-acquired hotels. As a percent of total revenue, management and franchise fees remained unchanged from the same period in 2010. |
• | Taxes, insurance and lease expense remained essentially flat compared to the same period in 2010, but decreased as a percentage of total revenue from 10.3% to 9.2% compared to the same period in 2010. Favorable resolution of property tax appeals, reductions in property insurance and improved liability claims experience were offset by $1.1 million of incremental expenses at our recently-acquired hotels. |
• | Depreciation and amortization expense decreased $147,000 compared to the same period in 2010. As a percent of total revenue, depreciation and amortization expense decreased to 13.2% compared to 14.9% for the same period in 2010. Our asset values, the basis from which we calculate depreciation, declined between the end of the second quarter of 2010 and the second quarter of 2011 as a result of impairment charges recorded in late 2010. As a consequence, our second quarter depreciation expense declined from 2010 to 2011. However, this decline was partially offset by $942,000 of depreciation expense related to our recently-acquired hotels. |
• | Impairment charges of $11.7 million relate to three hotels we are currently marketing for sale. The charges are based on revised estimated fair values obtained through the marketing process that were lower than the net book values for these hotels. |
• | Net interest expense decreased $981,000 compared to the same period in 2010, primarily reflecting our lower average interest rate resulting from our recent refinancing activity. |
• | Extinguishment of debt. During the quarter ended June 30, 2011, we redeemed $144 million of our 10% senior notes due in October 2014 and recognized a $27.4 million debt extinguishment charge related to the 10% prepayment premium and the write-off of a pro rata portion of the related debt discount and deferred loan costs, all of which was partially offset by a $3.7 million extinguishment gain on a refinanced mortgage note. |
• | Discontinued operations relates to three hotels sold in May 2011 and three hotels held for sale at June 30, 2011. We recorded net gains of $6.7 million from the hotel sales and recorded an impairment charge of $598,000 (primarily related to anticipated selling costs) with respect to one hotel held for sale. |
• | Total revenue was $483.1 million, a 10.5% increase compared to the same period in 2010. The increase in revenue is primarily attributed to a 5.7% increase in same store RevPAR (6.0% at our comparable hotels and 1.9% at our hotels marketed for sale), which includes a 1.9% increase in occupancy and a 3.7% increase in ADR and $23.5 million in revenue from our recently-acquired hotels. |
• | Hotel departmental expenses increased $19.2 million compared to the same period in 2010 due to a combination of higher occupancies and $12.2 million of hotel departmental expenses from our recently-acquired hotels. As a percentage of total revenue, hotel departmental expenses increased from 35.2% to 35.8% compared to the same period in 2010. These changes in departmental expenses as a percent of revenue are primarily due to the mix and nature of the business of the Fairmont Copley Plaza, which receives a significant portion of its revenue from food and beverage operations. Food and beverage revenue generally has much higher expenses as a percent of revenue than room revenue. |
• | Other property related costs increased $13.1 million due to a combination of higher occupancies and $6.4 million from our recently-acquired hotels. As a percentage of total revenue, they remained essentially flat compared to the same period in 2010. |
• | Management and franchise fees increased $1.6 million compared to the same period in 2010 due to a combination of higher revenues (which serve as the basis for determining such fees) and $639,000 of management and franchise fees for our recently-acquired hotels. As a percent of total revenue, management and franchise fees remained unchanged from the same period in 2010. |
• | Taxes, insurance and lease expense decreased $1.6 million compared to the same period in 2010. As a percent of total revenue, taxes, insurance and lease expense decreased to 9.0% compared to 10.4% for the same period in 2010. Decreases in property insurance, estimated Canadian taxes, favorable resolution of property tax appeals, and improved liability claims experience were partially offset by $1.8 million of incremental expenses at our recently-acquired hotels. |
• | Depreciation and amortization expense decreased $778,000 compared to the same period in 2010. As a percent of total revenue, depreciation and amortization expense decreased to 14.0% compared to 15.7% for the same period in 2010. Our asset values, the basis from which we calculate depreciation, declined between the end of the second quarter of 2010 and the second quarter of 2011 as a result of impairment charges recorded in late 2010. As a consequence, our depreciation expense in the first six months of the year declined from 2010 to 2011. However, this decline was partially offset by $1.6 million of depreciation expense related to our recently-acquired hotels. |
• | Impairment charges of $11.7 million relate to three hotels we are currently marketing for sale. The charges are based on revised estimated fair values obtained through the marketing process that were lower than the net book values for these hotels. |
• | Net interest expense decreased $2.2 million compared to the same period in 2010, primarily reflecting our lower average debt. |
• | Extinguishment of debt. During the six months ended June 30, 2011, we redeemed $144 million of our 10% senior notes due in October 2014 and recognized a $27.4 million debt extinguishment charge related to the 10% prepayment premium and the write-off of a pro rata portion of the debt discount and deferred loan costs, all of which was partially offset by a $3.7 million extinguishment gain on a refinanced mortgage note. |
• | Discontinued operations relates to three hotels sold in May 2011 and three hotels held for sale as of June 30, 2011. We recorded net gains of $6.7 million from the hotel sales and recorded an impairment charge of $598,000 (primarily related to anticipated selling costs) with respect to one hotel held for sale. In 2010, we recorded impairment charges of $21.1 million on hotels disposed in 2010. |
Three Months Ended June 30, | |||||||||||||||||||||
2011 | 2010 | ||||||||||||||||||||
Dollars | Shares | Per Share Amount | Dollars | Shares | Per Share Amount | ||||||||||||||||
Net income (loss) | $ | (42,397 | ) | $ | 21,990 | ||||||||||||||||
Noncontrolling interests | 132 | (376 | ) | ||||||||||||||||||
Preferred dividends | (9,678 | ) | (9,678 | ) | |||||||||||||||||
Net income (loss) attributable to FelCor common stockholders | (51,943 | ) | 11,936 | ||||||||||||||||||
Less: undistributed earnings allocated to unvested restricted stock | — | (352 | ) | ||||||||||||||||||
Numerator for basic and diluted income (loss) attributable to common stockholders | (51,943 | ) | 122,992 | (0.42 | ) | 11,584 | 66,531 | 0.17 | |||||||||||||
Depreciation and amortization | 34,011 | — | 0.26 | 34,158 | — | 0.50 | |||||||||||||||
Depreciation, discontinued operations and unconsolidated entities | 4,402 | — | 0.04 | 6,566 | — | 0.10 | |||||||||||||||
Gain on sale of hotels, net | (6,660 | ) | — | (0.05 | ) | — | — | — | |||||||||||||
Gain on involuntary conversion, net | (21 | ) | — | — | — | — | — | ||||||||||||||
Noncontrolling interests in FelCor LP | (183 | ) | 433 | — | 51 | 295 | — | ||||||||||||||
Undistributed earnings allocated to unvested restricted stock | — | — | — | 352 | — | 0.01 | |||||||||||||||
Conversion of options and unvested restricted stock | — | — | — | — | 828 | — | |||||||||||||||
FFO | (20,394 | ) | 123,425 | (0.17 | ) | 52,711 | 67,654 | 0.78 | |||||||||||||
Impairment loss | 11,706 | — | 0.09 | — | — | — | |||||||||||||||
Impairment loss, discontinued operations | 598 | — | — | — | — | — | |||||||||||||||
Acquisition costs | 827 | — | 0.01 | — | — | — | |||||||||||||||
Debt extinguishment, including discontinued operations | 23,710 | — | 0.19 | (46,060 | ) | — | (0.68 | ) | |||||||||||||
Conversion of options and unvested restricted stock | — | 855 | 0.01 | — | — | — | |||||||||||||||
Adjusted FFO | $ | 16,447 | 124,280 | $ | 0.13 | $ | 6,651 | 67,654 | $ | 0.10 |
Six Months Ended June 30, | |||||||||||||||||||||
2011 | 2010 | ||||||||||||||||||||
Dollars | Shares | Per Share Amount | Dollars | Shares | Per Share Amount | ||||||||||||||||
Net loss | $ | (74,123 | ) | $ | (40,952 | ) | |||||||||||||||
Noncontrolling interests | 194 | 178 | |||||||||||||||||||
Preferred dividends | (19,356 | ) | (19,356 | ) | |||||||||||||||||
Numerator for basic and diluted loss attributable to common stockholders | (93,285 | ) | 109,249 | (0.85 | ) | (60,130 | ) | 65,014 | (0.92 | ) | |||||||||||
Depreciation and amortization | 67,861 | — | 0.61 | 68,639 | — | 1.04 | |||||||||||||||
Depreciation, discontinued operations and unconsolidated entities | 9,448 | — | 0.09 | 13,346 | — | 0.21 | |||||||||||||||
Noncontrolling interests in FelCor LP | (303 | ) | 359 | — | (274 | ) | 295 | — | |||||||||||||
Gain on sale of hotels, net | (6,660 | ) | — | (0.06 | ) | — | — | — | |||||||||||||
Gain on involuntary conversion, net | (171 | ) | — | — | — | — | — | ||||||||||||||
Gain on sale of unconsolidated entities | — | — | — | (559 | ) | — | (0.01 | ) | |||||||||||||
Conversion of options and unvested restricted stock | — | — | — | — | 651 | — | |||||||||||||||
FFO | (23,110 | ) | 109,608 | (0.21 | ) | 21,022 | 65,960 | 0.32 | |||||||||||||
Impairment loss | 11,706 | — | 0.11 | — | — | — | |||||||||||||||
Impairment loss, discontinued operations | 598 | — | 0.01 | 21,060 | — | 0.32 | |||||||||||||||
Acquisition costs | 946 | — | 0.01 | — | — | — | |||||||||||||||
Debt extinguishment, including discontinued operations | 23,961 | — | 0.22 | (46,060 | ) | — | (0.70 | ) | |||||||||||||
Conversion of options and unvested restricted stock | — | 860 | (0.01 | ) | — | (651 | ) | — | |||||||||||||
Adjusted FFO | $ | 14,101 | 110,468 | $ | 0.13 | $ | (3,978 | ) | 65,309 | $ | (0.06 | ) |
Three Months Ended | Six Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2011 | 2010 | 2011 | 2010 | ||||||||||||
Net income (loss) | $ | (42,397 | ) | $ | 21,990 | $ | (74,123 | ) | $ | (40,952 | ) | ||||
Depreciation and amortization | 34,011 | 34,158 | 67,861 | 68,639 | |||||||||||
Depreciation, discontinued operations and unconsolidated entities | 4,402 | 6,566 | 9,448 | 13,346 | |||||||||||
Interest expense | 34,928 | 35,952 | 68,442 | 70,782 | |||||||||||
Interest expense, discontinued operations and unconsolidated entities | 1,462 | 2,529 | 2,964 | 5,543 | |||||||||||
Amortization of stock compensation | 1,774 | 1,642 | 3,577 | 3,257 | |||||||||||
Noncontrolling interests in other partnerships | (51 | ) | (325 | ) | (109 | ) | (96 | ) | |||||||
EBITDA | 34,129 | 102,512 | 78,060 | 120,519 | |||||||||||
Impairment loss | 11,706 | — | 11,706 | — | |||||||||||
Impairment loss, discontinued operations | 598 | — | 598 | 21,060 | |||||||||||
Debt extinguishment, including discontinued operations | 23,710 | (46,060 | ) | 23,961 | (46,060 | ) | |||||||||
Acquisition costs | 827 | — | 946 | — | |||||||||||
Gain on sale of hotels, net | (6,660 | ) | — | (6,660 | ) | — | |||||||||
Gain on involuntary conversion, net | (21 | ) | — | (171 | ) | — | |||||||||
Gain on sale of unconsolidated subsidiary | — | — | — | (559 | ) | ||||||||||
Adjusted EBITDA | 64,289 | 56,452 | 108,440 | 94,960 | |||||||||||
Other revenue | (1,011 | ) | (1,007 | ) | (1,236 | ) | (1,372 | ) | |||||||
Adjusted EBITDA from acquired hotels(a) | (567 | ) | 2,394 | (567 | ) | 315 | |||||||||
Equity in income from unconsolidated subsidiaries (excluding interest and depreciation) | (4,947 | ) | (4,874 | ) | (8,287 | ) | (7,857 | ) | |||||||
Noncontrolling interests in other partnerships (excluding interest and depreciation) | 610 | 935 | 1,237 | 1,327 | |||||||||||
Consolidated hotel lease expense | 10,497 | 10,015 | 18,801 | 17,773 | |||||||||||
Unconsolidated taxes, insurance and lease expense | (1,753 | ) | (1,671 | ) | (3,436 | ) | (3,363 | ) | |||||||
Interest income | (53 | ) | (96 | ) | (94 | ) | (200 | ) | |||||||
Other expenses (excluding acquisition costs) | 789 | 801 | 1,301 | 1,362 | |||||||||||
Corporate expenses (excluding amortization expense of stock compensation) | 5,136 | 4,868 | 12,870 | 13,100 | |||||||||||
Adjusted EBITDA from discontinued operations | (2,134 | ) | (4,149 | ) | (5,156 | ) | (6,060 | ) | |||||||
Hotel EBITDA | $ | 70,856 | $ | 63,668 | $ | 123,873 | $ | 109,985 |
Three Months Ended | Six Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2011 | 2010 | 2011 | 2010 | ||||||||||||
Total revenues | $ | 257,366 | $ | 228,711 | $ | 483,084 | $ | 437,136 | |||||||
Other revenue | (1,011 | ) | (1,007 | ) | (1,236 | ) | (1,372 | ) | |||||||
Hotel operating revenue | 256,355 | 227,704 | 481,848 | 435,764 | |||||||||||
Revenue from acquired hotels(a) | (3,343 | ) | 12,034 | (3,343 | ) | 17,889 | |||||||||
Same-store hotel operating revenue | 253,012 | 239,738 | 478,505 | 453,653 | |||||||||||
Same-store hotel operating expenses | (182,156 | ) | (176,070 | ) | (354,632 | ) | (343,668 | ) | |||||||
Hotel EBITDA | $ | 70,856 | $ | 63,668 | $ | 123,873 | $ | 109,985 | |||||||
Hotel EBITDA margin(b) | 28.0 | % | 26.6 | % | 25.9 | % | 24.2 | % |
(a) | For same-store metrics, we have included the hotel acquired in August 2010 and excluded the two hotels acquired in May 2011 for all periods presented. |
(b) | Hotel EBITDA as a percentage of same-store hotel operating revenue. |
Three Months Ended | Six Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2011 | 2010 | 2011 | 2010 | ||||||||||||
Total operating expenses | $ | 247,919 | $ | 216,243 | $ | 471,034 | $ | 426,862 | |||||||
Unconsolidated taxes, insurance and lease expense | 1,753 | 1,671 | 3,436 | 3,363 | |||||||||||
Consolidated hotel lease expense | (10,497 | ) | (10,015 | ) | (18,801 | ) | (17,773 | ) | |||||||
Corporate expenses | (6,910 | ) | (6,510 | ) | (16,447 | ) | (16,357 | ) | |||||||
Depreciation and amortization | (34,011 | ) | (34,158 | ) | (67,861 | ) | (68,639 | ) | |||||||
Impairment loss | (11,706 | ) | — | (11,706 | ) | — | |||||||||
Other expenses | (1,616 | ) | (801 | ) | (2,247 | ) | (1,362 | ) | |||||||
Expenses from acquired hotels(a) | (2,776 | ) | 9,640 | (2,776 | ) | 17,574 | |||||||||
Same-store hotel operating expenses | $ | 182,156 | $ | 176,070 | $ | 354,632 | $ | 343,668 |
(a) | For same-store metrics, we have included the hotel acquired in August 2010 and excluded the two hotels acquired in May 2011 for all periods presented. |
Three Months Ended | Six Months Ended | ||||||||||
June 30, | June 30, | ||||||||||
2011 | 2010 | 2011 | 2010 | ||||||||
Ratio of operating income to total revenues | 3.7 | % | 5.5 | % | 2.5 | % | 2.4 | % | |||
Other revenue | (0.4 | ) | (0.4 | ) | (0.3 | ) | (0.3 | ) | |||
Revenue from acquired hotels(a) | (1.1 | ) | 4.8 | (0.5 | ) | 3.8 | |||||
Unconsolidated taxes, insurance and lease expense | (0.7 | ) | (0.7 | ) | (0.7 | ) | (0.7 | ) | |||
Consolidated hotel lease expense | 4.1 | 4.2 | 3.9 | 3.9 | |||||||
Other expenses | 0.6 | 0.3 | 0.5 | 0.3 | |||||||
Corporate expenses | 2.7 | 2.7 | 3.4 | 3.6 | |||||||
Depreciation and amortization | 13.4 | 14.2 | 14.1 | 15.1 | |||||||
Impairment loss | 4.6 | — | 2.4 | — | |||||||
Expenses from acquired hotels(a) | 1.1 | (4.0 | ) | 0.6 | (3.9 | ) | |||||
Hotel EBITDA margin | 28.0 | % | 26.6 | % | 25.9 | % | 24.2 | % |
(a) | For same-store metrics, we have included the hotel acquired in August 2010 and excluded the two hotels acquired in May 2011 for all periods presented. |
• | Gains and losses related to debt extinguishment and interest rate swaps - We exclude gains and losses related to debt extinguishment 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. |
• | 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. |
Hotels | Room Count at June 30, 2011 | ||||||
Consolidated Hotels | 77 | 22,192 | |||||
Unconsolidated hotel operations | 1 | 171 | |||||
Total hotels | 78 | 22,363 | |||||
50% joint ventures | 13 | (1,573 | ) | ||||
60% joint venture | 1 | (214 | ) | ||||
82% joint venture | 1 | (40 | ) | ||||
90% joint ventures | 3 | (68 | ) | ||||
Pro rata rooms attributed to joint venture partners | (1,895 | ) | |||||
Pro rata share of rooms owned | 20,468 |
Brand | Hotels | Rooms | % of Total Rooms | % of 2010 Hotel EBITDA(a) | ||||||||||||
Embassy Suites Hotels | 37 | 9,757 | 50 | 58 | ||||||||||||
Holiday Inn | 13 | 4,338 | 22 | 19 | ||||||||||||
Doubletree and Hilton | 8 | 1,856 | 10 | 10 | ||||||||||||
Sheraton and Westin | 5 | 1,858 | 9 | 8 | ||||||||||||
Renaissance and Marriott | 3 | 1,321 | 7 | 3 | ||||||||||||
Fairmont | 1 | 383 | 2 | 2 | (b) | |||||||||||
Market | ||||||||||||||||
South Florida | 5 | 1,439 | 7 | 8 | ||||||||||||
Los Angeles area | 4 | 899 | 5 | 7 | ||||||||||||
San Francisco area | 6 | 2,138 | 11 | 7 | ||||||||||||
Boston | 3 | 915 | 5 | 5 | ||||||||||||
Atlanta | 3 | 952 | 5 | 5 | ||||||||||||
Philadelphia | 2 | 729 | 4 | 4 | ||||||||||||
Central California Coast | 2 | 408 | 2 | 4 | ||||||||||||
Myrtle Beach | 2 | 640 | 3 | 4 | ||||||||||||
New Orleans | 2 | 744 | 4 | 4 | ||||||||||||
San Antonio | 3 | 874 | 5 | 4 | ||||||||||||
Orlando | 3 | 761 | 4 | 4 | ||||||||||||
Minneapolis | 2 | 528 | 3 | 4 | ||||||||||||
San Diego | 1 | 600 | 3 | 3 | ||||||||||||
Dallas | 2 | 784 | 4 | 3 | ||||||||||||
Other | 27 | 7,102 | 35 | 34 | ||||||||||||
Location | ||||||||||||||||
Urban | 18 | 5,919 | 30 | 33 | ||||||||||||
Suburban | 25 | 6,158 | 32 | 28 | ||||||||||||
Airport | 14 | 4,509 | 23 | 22 | ||||||||||||
Resort | 10 | 2,927 | 15 | 17 |
(a) | Hotel EBITDA is a non-GAAP financial measure. A detailed reconciliation and further discussion of Hotel EBITDA is contained in the “Non-GAAP Financial Measures” section of Management’s Discussion and Analysis of Financial Condition and Results of Operations in Item 2 of this Quarterly Report on Form 10‑Q. |
(b) | Represents Hotel EBITDA from date of acquisition (August 2010). |
Occupancy (%) | ||||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||||
June 30, | June 30, | |||||||||||||||||
2011 | 2010 | %Variance | 2011 | 2010 | %Variance | |||||||||||||
Embassy Suites Hotels | 78.7 | 76.6 | 2.8 | 75.5 | 73.9 | 2.2 | ||||||||||||
Holiday Inn | 79.2 | 78.1 | 1.4 | 74.0 | 73.8 | 0.3 | ||||||||||||
Doubletree and Hilton | 75.9 | 75.5 | 0.5 | 69.7 | 69.5 | 0.3 | ||||||||||||
Sheraton and Westin | 71.2 | 70.0 | 1.7 | 69.1 | 67.3 | 2.7 | ||||||||||||
Renaissance and Marriott | 72.8 | 67.8 | 7.4 | 71.9 | 66.6 | 8.0 | ||||||||||||
Fairmont | 84.1 | 84.6 | (0.6 | ) | 68.6 | 68.2 | 0.6 | |||||||||||
Comparable hotels | 77.6 | 75.8 | 2.4 | 73.6 | 72.2 | 2.0 | ||||||||||||
Hotels marketed for sale | 66.0 | 67.8 | (2.7 | ) | 67.2 | 66.4 | 1.1 | |||||||||||
Total same-store hotels | 76.3 | 74.9 | 1.9 | 72.9 | 71.6 | 1.9 | ||||||||||||
ADR ($) | ||||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||||
June 30, | June 30, | |||||||||||||||||
2011 | 2010 | %Variance | 2011 | 2010 | %Variance | |||||||||||||
Embassy Suites Hotels | 129.86 | 127.12 | 2.2 | 131.46 | 129.48 | 1.5 | ||||||||||||
Holiday Inn | 122.69 | 116.33 | 5.5 | 116.89 | 110.29 | 6.0 | ||||||||||||
Doubletree and Hilton | 126.28 | 118.61 | 6.5 | 126.72 | 116.83 | 8.5 | ||||||||||||
Sheraton and Westin | 109.05 | 106.79 | 2.1 | 109.94 | 105.45 | 4.3 | ||||||||||||
Renaissance and Marriott | 177.78 | 168.37 | 5.6 | 187.10 | 175.96 | 6.3 | ||||||||||||
Fairmont | 268.90 | 253.54 | 6.1 | 242.34 | 223.61 | 8.4 | ||||||||||||
Comparable hotels | 131.86 | 127.13 | 3.7 | 131.29 | 126.25 | 4.0 | ||||||||||||
Hotels marketed for sale | 108.91 | 110.28 | (1.2 | ) | 111.62 | 110.79 | 0.7 | |||||||||||
Total same-store hotels | 129.68 | 125.45 | 3.4 | 129.30 | 124.68 | 3.7 | ||||||||||||
RevPAR ($) | ||||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||||
June 30, | June 30, | |||||||||||||||||
2011 | 2010 | %Variance | 2011 | 2010 | %Variance | |||||||||||||
Embassy Suites Hotels | 102.22 | 97.32 | 5.0 | 99.25 | 95.63 | 3.8 | ||||||||||||
Holiday Inn | 97.16 | 90.86 | 6.9 | 86.51 | 81.39 | 6.3 | ||||||||||||
Doubletree and Hilton | 95.82 | 89.51 | 7.1 | 88.29 | 81.16 | 8.8 | ||||||||||||
Sheraton and Westin | 77.64 | 74.75 | 3.9 | 75.98 | 70.99 | 7.0 | ||||||||||||
Renaissance and Marriott | 129.46 | 114.15 | 13.4 | 134.50 | 117.12 | 14.8 | ||||||||||||
Fairmont | 226.12 | 214.52 | 5.4 | 166.30 | 152.56 | 9.0 | ||||||||||||
Comparable hotels | 102.28 | 96.34 | 6.2 | 96.68 | 91.19 | 6.0 | ||||||||||||
Hotels marketed for sale | 71.87 | 74.76 | (3.9 | ) | 74.96 | 73.57 | 1.9 | |||||||||||
Total same-store hotels | 98.94 | 93.97 | 5.3 | 94.29 | 89.25 | 5.7 |
Occupancy (%) | |||||||||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||||||||
June 30, | June 30, | ||||||||||||||||||||||
2011 | 2010 | %Variance | 2011 | 2010 | %Variance | ||||||||||||||||||
South Florida | 76.5 | 75.6 | 1.2 | 79.8 | 80.3 | (0.6 | ) | ||||||||||||||||
Los Angeles area | 83.0 | 77.7 | 6.9 | 78.4 | 74.1 | 5.8 | |||||||||||||||||
San Francisco area | 80.7 | 78.8 | 2.4 | 74.5 | 72.1 | 3.4 | |||||||||||||||||
Boston | 84.2 | 84.9 | (0.8 | ) | 76.4 | 75.7 | 0.9 | ||||||||||||||||
Atlanta | 79.4 | 76.8 | 3.4 | 77.1 | 76.3 | 1.2 | |||||||||||||||||
Philadelphia | 82.4 | 80.4 | 2.5 | 70.2 | 70.5 | (0.4 | ) | ||||||||||||||||
Central California Coast | 76.3 | 80.4 | (5.1 | ) | 72.5 | 75.1 | (3.5 | ) | |||||||||||||||
Myrtle Beach | 72.8 | 73.4 | (0.9 | ) | 56.9 | 58.9 | (3.4 | ) | |||||||||||||||
New Orleans | 79.0 | 73.7 | 7.2 | 74.5 | 71.2 | 4.6 | |||||||||||||||||
San Antonio | 75.6 | 76.7 | (1.5 | ) | 74.8 | 75.7 | (1.3 | ) | |||||||||||||||
Orlando | 82.5 | 77.9 | 5.9 | 84.2 | 82.7 | 1.7 | |||||||||||||||||
Minneapolis | 78.9 | 77.6 | 1.7 | 77.1 | 73.7 | 4.6 | |||||||||||||||||
San Diego | 79.3 | 78.8 | 0.7 | 76.6 | 75.2 | 1.9 | |||||||||||||||||
Dallas | 64.4 | 64.7 | (0.5 | ) | 67.0 | 63.1 | 6.2 | ||||||||||||||||
ADR ($) | |||||||||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||||||||
June 30, | June 30, | ||||||||||||||||||||||
2011 | 2010 | %Variance | 2011 | 2010 | %Variance | ||||||||||||||||||
South Florida | 120.27 | 114.69 | 4.9 | 139.85 | 140.49 | (0.5 | ) | ||||||||||||||||
Los Angeles area | 139.67 | 136.03 | 2.7 | 139.01 | 134.27 | 3.5 | |||||||||||||||||
San Francisco area | 139.78 | 129.18 | 8.2 | 137.18 | 126.28 | 8.6 | |||||||||||||||||
Boston | 204.13 | 188.61 | 8.2 | 178.61 | 166.41 | 7.3 | |||||||||||||||||
Atlanta | 103.22 | 102.77 | 0.4 | 104.98 | 103.81 | 1.1 | |||||||||||||||||
Philadelphia | 140.67 | 131.80 | 6.7 | 133.90 | 123.10 | 8.8 | |||||||||||||||||
Central California Coast | 152.74 | 157.51 | (3.0 | ) | 143.86 | 148.58 | (3.2 | ) | |||||||||||||||
Myrtle Beach | 154.56 | 144.16 | 7.2 | 134.64 | 126.35 | 6.6 | |||||||||||||||||
New Orleans | 140.19 | 128.85 | 8.8 | 141.64 | 130.57 | 8.5 | |||||||||||||||||
San Antonio | 94.20 | 98.55 | (4.4 | ) | 94.70 | 98.44 | (3.8 | ) | |||||||||||||||
Orlando | 110.99 | 107.63 | 3.1 | 116.33 | 111.12 | 4.7 | |||||||||||||||||
Minneapolis | 131.30 | 125.63 | 4.5 | 125.85 | 124.06 | 1.4 | |||||||||||||||||
San Diego | 113.59 | 118.10 | (3.8 | ) | 117.64 | 116.68 | 0.8 | ||||||||||||||||
Dallas | 106.50 | 110.58 | (3.7 | ) | 114.77 | 111.42 | 3.0 | ||||||||||||||||
RevPAR ($) | |||||||||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||||||||
June 30, | June 30, | ||||||||||||||||||||||
2011 | 2010 | %Variance | 2011 | 2010 | %Variance | ||||||||||||||||||
South Florida | 92.00 | 86.68 | 6.1 | 111.65 | 112.86 | (1.1 | ) | ||||||||||||||||
Los Angeles area | 115.90 | 105.64 | 9.7 | 108.99 | 99.47 | 9.6 | |||||||||||||||||
San Francisco area | 112.77 | 101.79 | 10.8 | 102.20 | 91.00 | 12.3 | |||||||||||||||||
Boston | 171.97 | 160.18 | 7.4 | 136.54 | 126.04 | 8.3 | |||||||||||||||||
Atlanta | 81.95 | 78.94 | 3.8 | 80.99 | 79.16 | 2.3 | |||||||||||||||||
Philadelphia | 115.84 | 105.94 | 9.3 | 93.93 | 86.74 | 8.3 | |||||||||||||||||
Central California Coast | 116.55 | 126.61 | (7.9 | ) | 104.25 | 111.55 | (6.5 | ) | |||||||||||||||
Myrtle Beach | 112.44 | 105.87 | 6.2 | 76.58 | 74.38 | 3.0 | |||||||||||||||||
New Orleans | 110.77 | 94.97 | 16.6 | 105.57 | 93.01 | 13.5 | |||||||||||||||||
San Antonio | 71.21 | 75.62 | (5.8 | ) | 70.80 | 74.55 | (5.0 | ) | |||||||||||||||
Orlando | 91.61 | 83.87 | 9.2 | 97.89 | 91.94 | 6.5 | |||||||||||||||||
Minneapolis | 103.56 | 97.47 | 6.2 | 97.01 | 91.39 | 6.1 | |||||||||||||||||
San Diego | 90.14 | 93.04 | (3.1 | ) | 90.11 | 87.71 | 2.7 | ||||||||||||||||
Dallas | 68.55 | 71.55 | (4.2 | ) | 76.96 | 70.36 | 9.4 |
Comparable Hotels | (a) | Brand | State | Rooms | % Owned | (b) | ||||
Birmingham | Embassy Suites Hotel | AL | 242 | |||||||
Phoenix – Biltmore | Embassy Suites Hotel | AZ | 232 | |||||||
Anaheim – North | Embassy Suites Hotel | CA | 222 | |||||||
Dana Point – Doheny Beach | Doubletree Guest Suites | CA | 196 | |||||||
Indian Wells – Esmeralda Resort & Spa | Renaissance Resort | CA | 560 | |||||||
Los Angeles – International Airport/South | Embassy Suites Hotel | CA | 349 | |||||||
Milpitas – Silicon Valley | Embassy Suites Hotel | CA | 266 | |||||||
Napa Valley | Embassy Suites Hotel | CA | 205 | |||||||
Oxnard – Mandalay Beach – Hotel & Resort | Embassy Suites Hotel | CA | 248 | |||||||
San Diego – On the Bay | Holiday Inn | CA | 600 | |||||||
San Francisco – Airport/Waterfront | Embassy Suites Hotel | CA | 340 | |||||||
San Francisco – Airport/South San Francisco | Embassy Suites Hotel | CA | 312 | |||||||
San Francisco – Fisherman’s Wharf | Holiday Inn | CA | 585 | |||||||
San Francisco – Union Square | Marriott | CA | 400 | |||||||
San Rafael – Marin County | Embassy Suites Hotel | CA | 235 | 50 | % | |||||
Santa Barbara – Goleta | Holiday Inn | CA | 160 | |||||||
Santa Monica Beach – at the Pier | Holiday Inn | CA | 132 | |||||||
Wilmington | Doubletree | DE | 244 | 90 | % | |||||
Boca Raton | Embassy Suites Hotel | FL | 263 | |||||||
Deerfield Beach – Resort & Spa | Embassy Suites Hotel | FL | 244 | |||||||
Ft. Lauderdale – 17th Street | Embassy Suites Hotel | FL | 361 | |||||||
Ft. Lauderdale – Cypress Creek | Sheraton Suites | FL | 253 | |||||||
Miami – International Airport | Embassy Suites Hotel | FL | 318 | |||||||
Orlando – International Airport | Holiday Inn | FL | 288 | |||||||
Orlando – International Drive South/Convention | Embassy Suites Hotel | FL | 244 | |||||||
Orlando – Walt Disney World Resort | Doubletree Guest Suites | FL | 229 | |||||||
St. Petersburg – Vinoy Resort & Golf Club | Renaissance Resort | FL | 361 | |||||||
Tampa – Tampa Bay | Doubletree Guest Suites | FL | 203 | |||||||
Atlanta – Buckhead | Embassy Suites Hotel | GA | 316 | |||||||
Atlanta – Gateway – Atlanta Airport | Sheraton | GA | 395 | |||||||
Atlanta – Perimeter Center | Embassy Suites Hotel | GA | 241 | 50 | % | |||||
Chicago – Lombard/Oak Brook | Embassy Suites Hotel | IL | 262 | 50 | % | |||||
Indianapolis – North | Embassy Suites Hotel | IN | 221 | 82 | % | |||||
Kansas City – Overland Park | Embassy Suites Hotel | KS | 199 | 50 | % | |||||
Baton Rouge | Embassy Suites Hotel | LA | 223 | |||||||
New Orleans – Convention Center | Embassy Suites Hotel | LA | 370 | |||||||
New Orleans – French Quarter | Holiday Inn | LA | 374 | |||||||
Boston – at Beacon Hill | Holiday Inn | MA | 303 | |||||||
Boston – Copley Plaza | Fairmont | MA | 383 | |||||||
Boston – Marlborough | Embassy Suites Hotel | MA | 229 | |||||||
Baltimore – at BWI Airport | Embassy Suites Hotel | MD | 251 | 90 | % | |||||
Bloomington | Embassy Suites Hotel | MN | 218 | |||||||
Minneapolis – Airport | Embassy Suites Hotel | MN | 310 | |||||||
Kansas City – Plaza | Embassy Suites Hotel | MO | 266 | 50 | % | |||||
Charlotte | Embassy Suites Hotel | NC | 274 | 50 | % |
Comparable Hotels | (a) | Brand | State | Rooms | % Owned | (b) | ||||
Charlotte – SouthPark | Doubletree Guest Suites | NC | 208 | |||||||
Raleigh/Durham | Doubletree Guest Suites | NC | 203 | |||||||
Raleigh – Crabtree | Embassy Suites Hotel | NC | 225 | 50 | % | |||||
Parsippany | Embassy Suites Hotel | NJ | 274 | 50 | % | |||||
Secaucus – Meadowlands | Embassy Suites Hotel | NJ | 261 | 50 | % | |||||
Philadelphia – Historic District | Holiday Inn | PA | 364 | |||||||
Philadelphia – Society Hill | Sheraton | PA | 365 | |||||||
Pittsburgh – at University Center (Oakland) | Holiday Inn | PA | 251 | |||||||
Charleston – Mills House | Holiday Inn | SC | 214 | |||||||
Myrtle Beach – Oceanfront Resort | Embassy Suites Hotel | SC | 255 | |||||||
Myrtle Beach Resort | Hilton | SC | 385 | |||||||
Nashville – Airport – Opryland Area | Embassy Suites Hotel | TN | 296 | |||||||
Nashville – Opryland – Airport (Briley Parkway) | Holiday Inn | TN | 383 | |||||||
Austin | Doubletree Guest Suites | TX | 188 | 90 | % | |||||
Austin – Central | Embassy Suites Hotel | TX | 260 | 50 | % | |||||
Dallas – Love Field | Embassy Suites Hotel | TX | 248 | |||||||
Dallas – Park Central | Westin | TX | 536 | 60 | % | |||||
Houston – Medical Center | Holiday Inn | TX | 287 | |||||||
San Antonio – International Airport | Embassy Suites Hotel | TX | 261 | 50 | % | |||||
San Antonio – International Airport | Holiday Inn | TX | 397 | |||||||
San Antonio – NW I-10 | Embassy Suites Hotel | TX | 216 | 50 | % | |||||
Burlington Hotel & Conference Center | Sheraton | VT | 309 | |||||||
Hotels Acquired in 2011 | ||||||||||
Morgans New York | Morgans Hotel | NY | 114 | |||||||
Royalton New York | Morgans Hotel | NY | 168 | |||||||
Hotels Marketed for Sale | ||||||||||
Phoenix – Crescent | Sheraton | AZ | 342 | |||||||
Jacksonville – Baymeadows | Embassy Suites Hotel | FL | 277 | |||||||
Atlanta – Airport | Embassy Suites Hotel | GA | 232 | |||||||
Atlanta – Galleria | Sheraton Suites | GA | 278 | |||||||
St. Paul – Downtown | Embassy Suites Hotel | MN | 208 | |||||||
Dallas – Market Center | Embassy Suites Hotel | TX | 244 | |||||||
Canada | ||||||||||
Toronto – Airport | Holiday Inn | Ontario | 446 | |||||||
Toronto – Yorkdale | Holiday Inn | Ontario | 370 | |||||||
Hotels in Discontinued Operations | ||||||||||
Orlando– North(c) | Embassy Suites Hotel | FL | 277 | |||||||
Corpus Christi(c) | Embassy Suites Hotel | TX | 150 | |||||||
Dallas – DFW International Airport South(c) | Embassy Suites Hotel | TX | 305 | |||||||
Unconsolidated Hotel | ||||||||||
New Orleans – French Quarter – Chateau LeMoyne | Holiday Inn | LA | 171 | 50 | % |
(a) | Excludes eight hotels in continuing operations that are currently being marketed for sale, three hotels in discontinued operations and two hotels acquired in May 2011. |
(b) | We own 100% of the real estate interests unless otherwise noted. |
(c) | This hotel was sold after June 30, 2011. |
Item 3. | Quantitative and Qualitative Disclosures about Market Risk. |
Expected Maturity Date | |||||||||||||||||||||||||||||||
2011 | 2012 | 2013 | 2014 | 2015 | Thereafter | Total | Fair Value | ||||||||||||||||||||||||
Liabilities | |||||||||||||||||||||||||||||||
Fixed-rate: | |||||||||||||||||||||||||||||||
Debt | $ | 2,769 | $ | 4,571 | $ | 4,949 | $ | 660,708 | $ | 564 | $ | 533,813 | $ | 1,207,374 | $ | 1,283,004 | |||||||||||||||
Average interest rate | 7.97 | % | 7.68 | % | 7.70 | % | 9.52 | % | 5.81 | % | 6.73 | % | 8.27 | % | |||||||||||||||||
Floating-rate: | |||||||||||||||||||||||||||||||
Debt | 205,886 | 24,825 | 978 | 1,083 | 208,700 | — | 441,472 | $ | 437,593 | ||||||||||||||||||||||
Average interest rate (a) | 1.27 | % | 2.35 | % | 8.10 | % | 8.10 | % | 8.58 | % | — | 4.82 | % | ||||||||||||||||||
Total debt | $ | 208,655 | $ | 29,396 | $ | 5,927 | $ | 661,791 | $ | 209,264 | $ | 533,813 | $ | 1,648,846 | |||||||||||||||||
Average interest rate | 1.36 | % | 3.18 | % | 7.76 | % | 9.52 | % | 8.57 | % | 6.73 | % | 7.34 | % | |||||||||||||||||
Net discount | (36,740 | ) | |||||||||||||||||||||||||||||
Total debt | $ | 1,612,106 |
(a) | The average floating interest rate represents the implied forward rates in the yield curve at June 30, 2011. |
Item 4. | Controls and Procedures. |
Item 6. | Exhibits. |
Exhibit Number | Description of Exhibit | |
4.1 | Indenture, dated as of May 10, 2011, by and between FelCor Escrow Holdings, L.L.C. and Wilmington Trust Company, as trustee, and Deutsche Bank Trust Company Americas, as Collateral Agent, Registrar and Paying Agent (filed as Exhibit 4.1 to FelCor Lodging Trust Incorporated's Current Report on Form 8-K dated May 23, 2011 ("FelCor's May 23, 2011, 8‑K") and included herein by reference). | |
4.2 | First Supplemental Indenture, dated as of May 23, 2011, by and among FelCor Escrow Holdings, L.L.C., FelCor Lodging Limited Partnership, FelCor Lodging Trust Incorporated, certain of their subsidiaries, as guarantors, and Wilmington Trust Company, as trustee, and Deutsche Bank Trust Company Americas, as Collateral Agent, Registrar and Paying Agent (filed as Exhibit 4.2 to FelCor's May 23, 2011, 8-K and included herein by reference). | |
4.3 | Registration Rights Agreement, dated May 10, 2011, among FelCor Lodging Limited Partnership, FelCor Lodging Trust Incorporated, the subsidiary guarantors named therein, and J.P. Morgan Securities LLC (filed as Exhibit 4.3 to FelCor's May 23, 2011, 8-K and included herein by reference). | |
4.4 | Fourth Supplemental Indenture, dated as of March 3, 2011, by and among FelCor Lodging Trust Incorporated, FelCor Lodging Limited Partnership, certain of their subsidiaries, as guarantors, and U.S. Bank National Association, as trustee (filed as Exhibit 4.4 to FelCor's May 23, 2011, 8-K and included herein by reference). | |
4.5 | Fifth Supplemental Indenture, dated as of May 23, 2011, by and among FelCor Lodging Trust Incorporated, FelCor Lodging Limited Partnership, certain of their subsidiaries, as guarantors, and U.S. Bank National Association, as trustee (filed as Exhibit 4.5 to FelCor's May 23, 2011, 8-K and included herein by reference). | |
10.1 | Form of [Fee and] Leasehold Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Filing (filed as Exhibit 4.2 to FelCor's May 23, 2011, 8-K and included herein by reference). | |
10.2 | Pledge Agreement, dated as of May 23, 2011, among FelCor Lodging Limited Partnership, FelCor Lodging Trust Incorporated, the subsidiaries named therein, and Deutsche Bank Trust Company Americas, as Collateral Agent (filed as Exhibit 10.2 to FelCor's May 23, 2011, 8-K and included herein by reference). | |
31.1 | Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
31.2 | Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
32 | Certification of the Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
Exhibit Number | Description of Exhibit | |
101.INS | XBRL Instance Document. Submitted electronically with this report. | |
101.SCH | XBRL Taxonomy Extension Schema Document. Submitted electronically with this report. | |
101.CAL | XBRL Taxonomy Calculation Linkbase Document. Submitted electronically with this report. | |
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document. Submitted electronically with this report. | |
101.LAB | XBRL Taxonomy Label Linkbase Document. Submitted electronically with this report. | |
101.PRE | XBRL Taxonomy Presentation Linkbase Document. Submitted electronically with this report. |
FELCOR LODGING TRUST INCORPORATED | |||
Date: August 2, 2011 | By: | /s/ Lester C. Johnson | |
Name: | Lester C. Johnson | ||
Title: | Senior Vice President, Chief Accounting Officer |
1. | I have reviewed this Quarterly Report on Form 10-Q of FelCor Lodging Trust Incorporated; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function): |
a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: | August 2, 2011 | /s/ Richard A. Smith | |
Richard A. Smith Chief Executive Officer |
1. | I have reviewed this Quarterly Report on Form 10-Q of FelCor Lodging Trust Incorporated; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function): |
a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: | August 2, 2011 | /s/Andrew J. Welch | |
Andrew J. Welch Chief Financial Officer |
/s/Richard A. Smith | |
Richard A. Smith | |
Chief Executive Officer | |
/s/Andrew J. Welch | |
Andrew J. Welch | |
Chief Financial Officer |
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