Date of Report (Date of earliest event reported) | August 30, 2011 |
FelCor Lodging Trust Incorporated | ||
(Exact name of registrant as specified in its charter) | ||
Maryland | 001-14236 | 75-2541756 |
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
545 E. John Carpenter Frwy., 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.) |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): |
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
(b) | Pro forma financial information. |
(c) | Exhibits. |
Exhibit Number | Description of Exhibit | ||
23 | Consent of Independent Registered Public Accounting Firm | ||
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. | ||
99.1 | Selected Financial Data; Management's Discussion and Analysis of Financial Condition and Results of Operations; and Financial Statements |
FELCOR LODGING TRUST INCORPORATED | |||
Date: August 30, 2011 | By: | /s/ Lester C. Johnson | |
Name: | Lester C. Johnson | ||
Title: | Senior Vice President, Chief Accounting Officer |
Exhibit Number | Description of Exhibit | ||
23 | Consent of Independent Registered Public Accounting Firm | ||
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. | ||
99.1 | Selected Financial Data; Management's Discussion and Analysis of Financial Condition and Results of Operations; and Financial Statements |
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 30, 2011 | /s/Richard A. Smith | |
Richard A. Smith Chief Executive Officer |
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 30, 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 |
Year Ended December 31, | ||||||||||||||||||||
2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||||||||
Statement of Operations Data:(a) | ||||||||||||||||||||
Total revenues | $ | 884 | $ | 831 | $ | 1,003 | $ | 890 | $ | 862 | ||||||||||
Income (loss) from continuing operations(b) | (181 | ) | (96 | ) | (41 | ) | 53 | 3 | ||||||||||||
Diluted earnings per share: | ||||||||||||||||||||
Income (loss) from continuing operations | $ | (2.71 | ) | $ | (2.12 | ) | $ | (1.31 | ) | $ | 0.23 | $ | (0.56 | ) | ||||||
Other Data: | ||||||||||||||||||||
Cash distributions declared per common share(c) | $ | — | $ | — | $ | 0.85 | $ | 1.20 | $ | 0.80 | ||||||||||
Adjusted FFO per share(d) | $ | (0.09 | ) | $ | 0.39 | $ | 1.99 | $ | 2.17 | $ | 1.98 | |||||||||
Adjusted EBITDA(d) | 188 | 179 | 276 | 285 | 291 | |||||||||||||||
Cash flows provided by operating activities | 59 | 73 | 153 | 137 | 148 | |||||||||||||||
Balance Sheet Data (at end of period): | ||||||||||||||||||||
Total assets | $ | 2,359 | $ | 2,626 | $ | 2,512 | $ | 2,684 | $ | 2,583 | ||||||||||
Total debt, net of discount | 1,548 | 1,773 | 1,552 | 1,476 | 1,369 | |||||||||||||||
Redeemable noncontrolling interests in FelCor LP at redemption value | 2 | 1 | 1 | 21 | 30 |
(a) | All years presented have been adjusted to reflect hotels no longer owned as discontinued operations. |
Year Ended December 31, | ||||||||||||||||||||
2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||||||||
Impairment loss | $ | (115 | ) | $ | — | $ | (38 | ) | $ | — | $ | — | ||||||||
Impairment loss on unconsolidated hotels | — | (2 | ) | (13 | ) | — | — | |||||||||||||
Hurricane loss | — | — | (1 | ) | — | — | ||||||||||||||
Conversion costs | — | — | (1 | ) | — | — | ||||||||||||||
Severance costs | — | (1 | ) | (1 | ) | — | — | |||||||||||||
Debt extinguishment | 44 | (2 | ) | — | — | (15 | ) | |||||||||||||
Gain (loss) on sale of assets | — | 1 | — | — | — | |||||||||||||||
Gain on sale of condominiums | — | — | — | 19 | — | |||||||||||||||
Gain on involuntary conversion | — | — | 3 | — | — |
(c) | We suspended payment of our common dividend in December 2008 and our preferred dividends in March 2009 in light of the deepening recession and dysfunctional capital markets, and the attendant impact on our industry and us. In January 2011, we reinstated our current quarterly preferred dividends and paid current quarterly preferred dividends totaling $9.7 million. Our Board of Directors will determine the amount of future common and preferred dividends for each quarter, if any, based upon various factors including operating results, economic conditions, other operating trends, our financial condition and capital requirements, as well as the minimum REIT distribution requirements. Unpaid preferred dividends must be paid in full prior to payment of any common dividends. |
(d) | A more detailed description and computation of Adjusted FFO per share and Adjusted 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 7. |
• | In June 2010, we completed a public offering of 31,625,000 shares of our common stock at $5.50 per share. The net proceeds from the offering, after underwriting discounts and commissions, were approximately $166 million. We used these proceeds, together with cash on hand, to repay $177 million of secured debt for $130 million, representing a 27% discount, and for our $98.5 million acquisition of the Fairmont Copley Plaza in Boston. |
• | In May 2010, we obtained a new $212 million loan, secured by nine hotels, that matures in 2015. This loan bears interest at LIBOR (subject to a 3.0% floor) plus 5.1%. The proceeds were used to repay $210 million in loans that were secured by 11 hotels and scheduled to mature in May 2010. The terms and interest rate of this financing are significantly more favorable than the refinanced debt, and we unencumbered two previously mortgaged hotels in the process. |
• | Two loans (totaling $32 million) matured in May 2010. The cash flows for the hotels that secured those loans did not cover debt service and we determined the hotels' fair values to be less than the loan amounts. We stopped funding the shortfalls in December 2009. We were unable to negotiate an acceptable debt modification or reduction that favored our stockholders, and we transferred these hotels to the lenders in full satisfaction of the related debt. |
• | Selling underperforming and non-strategic hotels creates capacity, allows us to reduce concentration risk, reduce leverage, invest in higher yielding redevelopment opportunities at our remaining hotels and/or acquire hotels in our target markets. In addition, selling non-strategic hotels reduces our future capital expenditure requirements and enables management to focus on “core” long-term investments. As part of our long-term strategic plan to enhance shareholder value and achieve or exceed targeted returns on invested capital, we sell and acquire hotels to improve our overall portfolio quality, enhance diversification and improve growth rates. In that regard, we reviewed each hotel in our portfolio in terms of projected performance, future capital expenditure requirements and market dynamics and concentration risk. Based on this analysis, we developed a plan to sell our interests in 35 hotels (29 of which we consolidate the real estate interest and six of which are owned by unconsolidated joint ventures) that no longer meet our investment criteria. As a consequence, the |
Year Ended December 31, | ||||||||||||||||||
2010 | 2009 | % Change 2010-2009 | 2008 | % Change 2009-2008 | ||||||||||||||
RevPAR | $ | 86.39 | $ | 82.70 | 4.5 | % | $ | 99.94 | (17.3 | )% | ||||||||
Hotel EBITDA(a) | 207 | 197 | 5.1 | % | 284 | (30.6 | )% | |||||||||||
Hotel EBITDA margin(a) | 23.9 | % | 23.8 | % | 0.4 | % | 28.4 | % | (16.2 | )% | ||||||||
Loss from continuing operations(b) | (181 | ) | (96 | ) | (88.5 | )% | (41 | ) | (134.1 | )% |
(a) | Hotel EBITDA and Hotel EBITDA margin are non-GAAP financial measures. A discussion of the use, limitations and importance of these non-GAAP financial measures and detailed reconciliations to the most comparable GAAP measure are found elsewhere in Management’s Discussion and Analysis of Financial Condition and Results of Operations under the section “Non-GAAP Financial Measures.” |
(b) | The following amounts are included in loss from continuing operations (in millions): |
Year Ended December 31, | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Impairment loss | $ | (115 | ) | $ | — | $ | (38 | ) | ||||
Impairment loss on unconsolidated hotels | — | (2 | ) | (13 | ) | |||||||
Hurricane loss | — | — | (1 | ) | ||||||||
Conversion costs | — | — | (1 | ) | ||||||||
Severance costs | — | (1 | ) | (1 | ) | |||||||
Debt extinguishment | 44 | (2 | ) | — | ||||||||
Gain (loss) on sale of assets | — | 1 | — | |||||||||
Gain on involuntary conversion | — | — | 3 |
• | Total revenue was $883.9 million, a 6.4% increase compared to 2009. The increase in revenue is attributed principally to a 4.5% increase in same-store RevPAR, which was driven by a 6.0% increase in occupancy partially offset by a 1.5% decrease in ADR. The Fairmont Copley Plaza, which we acquired in August 2010, contributed $16.8 million. |
• | Hotel departmental expenses increased $22.2 million (7.5%) compared to 2009, reflecting improved occupancy and $7.8 million of expenses at the Fairmont Copley Plaza. As a percentage of total revenue, hotel departmental expenses increased from 35.8% to 36.1% compared to 2009. Cost reductions implemented during 2009 continued to provide savings throughout 2010, which helped us achieve a reduction in 2010 per occupied room costs compared to 2009. However, decreases in revenue per occupied room (predominately from lower ADR) more than offset the cost reductions. Typically in a lodging recovery occupancy recovers sooner than ADR, so operating expenses increase without the benefit of an increase in ADR. |
• | Other property related costs increased $15.4 million, reflecting improved occupancy and $3.9 million of costs from the hotel acquired in August 2010. As a percentage of total revenue, other property related costs remained essentially unchanged, compared to 2009. |
• | Management and franchise fees increased $1.6 million, compared to 2009, due to higher revenues (which serve as the basis for determining such fees) and $505,000 of such fees at the Fairmont Copley Plaza. As a percent of total revenue, management and franchise fees remained essentially unchanged, compared to 2009. |
• | Taxes, insurance and lease expenses increased $3.3 million compared to 2009. The Fairmont Copley Plaza added $1.2 million of taxes, insurance and lease expense in 2010, and same-store hotels increased slightly, compared to 2009. As a percentage of total revenue, taxes, insurance and lease expense improved from 10.3% in 2009 to 10.1%. Favorable resolution of property tax appeals in 2010 and changes in franchise tax filing status combined to partially offset increases in percentage rent expenses. |
• | Corporate expenses increased $6.5 million and increased as a percentage of total revenue from 2.9% to 3.5%. This increase primarily reflects a temporary change in our long-term compensation program and increased corporate bonus accruals. Because of the impact of the recession on the trading price of our common stock, our Board of Directors determined that issuing restricted stock at exceptionally low trading prices would be unduly dilutive to our stockholders. In lieu of issuing restricted stock, restricted cash with which grantees could (and did) purchase stock, was granted. Because those grants were subject to payroll tax withholding, amounts withheld were recognized as an expense in the first quarter of 2010, rather than |
• | Depreciation and amortization expense increased $2.1 million, compared to 2009, primarily attributable to depreciation of $38.9 million and $75.9 million on consolidated hotel capital assets placed in service in 2010 and 2009, respectively. |
• | Impairment charge. We recorded a $115.3 million impairment loss (in continuing operations) in 2010 when we decided to sell our interest in 29 hotels (we consolidate the related real estate) and shortened the hold period. Sixteen of these hotels were impaired in light of the reduced estimated hold periods (12 of which are in continuing operations). |
• | Net interest expense increased $39.9 million compared to 2009, largely attributable to our Senior Notes, which were issued in October 2009. These notes bear interest at a higher rate than the notes they refinanced. |
• | Debt extinguishment. We repaid $177 million of secured debt for $130 million and recorded a corresponding $46.1 million gain on extinguishment of debt. This gain was partially offset by losses from retirement of $40.3 million of our senior notes due June 2011. In 2009, we retired $428 million of senior notes maturing in 2011 and terminated our line of credit. We incurred a $1.7 million charge associated with these transactions. |
• | Equity in income of unconsolidated entities was $16.9 million compared to a $4.8 million loss in 2009. In 2010, we had $20.5 million gain from the sale of our interest in an unconsolidated entity (which owned the Sheraton Premier hotel in Tysons Corner, Virginia). |
• | Discontinued operations primarily reflects a $37.3 million impairment charge related to four hotels placed in discontinued operations in 2011, and with regard to two hotels transferred to lenders in 2010 in full satisfaction of the related debt, a $21.1 million impairment charge and a $15.2 million gain from debt extinguishment. Discontinued operations in 2009 primarily consisted of: (i) a $1.8 million adjustment to gains on sale (resulting from a change in the federal tax law that allowed recovery of previously paid alternative minimum taxes on gains from hotel sales in 2006 and 2007); (ii) the following items related to two hotels sold in December 2009: a $3.4 million impairment loss and a $911,000 loss on sale (primarily related to selling costs), and (iii) $10.7 million of 2009 operating losses and interest expense related to hotels placed in discontinued operations in 2009, 2010, and during the first six months of 2011. |
• | Total revenue was $830.6 million, a 17.2% decrease compared to 2008. The decrease in revenue is attributed principally to a 17.3% decrease in RevPAR, which was driven by a 6.9% decrease in occupancy and an 11.1% decrease in ADR. |
• | Hotel departmental expenses decreased $41.0 million (12.1%), compared to 2008. This expense reduction reflects: (i) the 6.9% decrease in occupancy; (ii) a $22.2 million decrease in labor costs, which included permanent reductions in hotel employees; (iii) reduced non-critical room expenses, such as guest transportation, in-room amenities, bath linen quantities, and newspaper service; and (iv) menu modifications and reduced food costs in banquet and restaurant outlets. As a percentage of total revenue, hotel departmental expenses increased from 33.7% to 35.8% compared to 2008. While we made significant reductions in our departmental expenses, they were not sufficient to completely offset the decrease in revenue. |
• | Other property related costs decreased $31.8 million (11.9%), compared to 2008. The expense reduction consisted of: (i) a $10.9 million decrease in labor costs; (ii) a $9.0 million decrease in marketing assessments, credit card commissions and frequent guest expense (all of which reflect the decrease in revenue); (iii) a $2.9 million decrease in repairs and maintenance, partially attributed to our recently completed renovation program; (iv) reductions in other non-critical expenses; and (v) improved energy efficiency. As a percentage of total revenue, other property related costs increased from 26.6% to 28.3% compared to 2008. While we made significant reductions in our other property related costs, they were not sufficient to completely offset the decrease in revenue. |
• | Management and franchise fees decreased $11.7 million compared to 2008, reflecting the decrease in revenue. As a percent of total revenue, franchise fees and base management fees remained essentially unchanged from 2008 to 2009 (these fees are based on a percentage of revenue). Incentive management fees, which are based on the profitability of the hotels, decreased $4.0 million. |
• | Taxes, insurance and lease expenses decreased $13.2 million compared to 2008. This decrease relates primarily to: (i) a $12.1 million decrease in hotel percentage lease expense, attributed to decreased revenue at our consolidated hotel lessees; (ii) a $1.0 million decrease in property and general liability insurance, attributed to improved insurance rates and liability claims experience; and (iii) a $2.0 million decrease in land leases, attributed to decreases in percentage rent based on revenue. This was partially offset by a $1.9 million increase in real estate and other taxes, largely attributed to favorable resolutions of property tax appeals in 2008. As a percentage of total revenue, taxes, insurance and lease expense increased from 9.9% in 2008 to 10.3%. |
• | Corporate expenses increased $3.5 million compared to 2008. The increase in corporate expenses is attributed to bonuses awarded in recognition of the accomplishment of corporate goals including: successful restructuring of our debt in the face of the dysfunctional debt market and ongoing recession in 2009 and our portfolio's relative performance, compared to our peers, from our efforts to improve market share and limit the effect of reduced revenue on Hotel EBITDA. |
• | Depreciation and amortization expense increased $9.8 million, compared to 2008, primarily attributable to depreciation of $75.9 million and $142.9 million of consolidated hotel capital assets placed in service in 2009 and 2008, respectively. |
• | Impairment charge. Because of triggering events in 2008 related to changes in the capital markets, dropping travel demand and the combined effect on our stock price, we tested all of our hotels to determine if further assessment for potential impairment was required. We had one hotel with a short-term ground lease fail this test. We determined that the book value of this hotel was not fully recoverable, and as such, recorded a $38.5 million impairment charge. |
• | Net interest expense increased $8.4 million compared to 2008. This increase is primarily attributable to the issuance of our Senior Notes, which were issued in October 2009. |
• | Debt extinguishment. In 2009, we retired $428 million of senior notes due June 2011 and terminated our line of credit. We incurred a $1.7 million charge associated with these transactions. |
• | Equity in loss of unconsolidated entities was $4.8 million compared to a $10.9 million loss in 2008. We recorded $2.1 million and $12.7 million of impairment charges on our equity method investments in 2009 and 2008, respectively. The remainder of the change is attributed to current year operating losses from decreased revenue at our unconsolidated hotels. |
• | Discontinued operations primarily consisted of: (i) a $1.8 million adjustment to gains on sale (resulting from a change in the federal tax law that allowed recovery of previously paid alternative minimum taxes on gains from hotel sales in 2006 and 2007); (ii) the following items related to two hotels sold in December 2009: a $3.4 million impairment loss, a $911,000 loss on sale (primarily related to selling costs), and (iii) $10.7 million of 2009 operating losses and interest expense related to hotels placed in discontinued operations in 2009, 2010, and during the first six months of 2011. Discontinued operations in 2008 primarily consisted of: (i) a $1.2 million adjustment to gain on sales from revision of the tax liability associated with gains from hotel sales in 2006 and 2007; (ii) the following items related to six hotels sold in May and July 2011 and two hotels sold in December 2009: a $69.5 million impairment loss, an $11.1 million liquidated damage charge and $734,000 of hurricane losses; and (iii) $10.2 million of 2008 operating losses and interest expense related to hotels placed in discontinued operations in 2009, 2010, and during the first six months of 2011. |
Year Ended December 31, | ||||||||||||||||||||||||||||||||
2010 | 2009 | 2008 | ||||||||||||||||||||||||||||||
Dollars | Shares | Per Share Amount | Dollars | Shares | Per Share Amount | Dollars | Shares | Per Share Amount | ||||||||||||||||||||||||
Net loss | $ | (225,837 | ) | $ | (109,091 | ) | $ | (120,487 | ) | |||||||||||||||||||||||
Noncontrolling interests | 2,796 | 969 | 1,242 | |||||||||||||||||||||||||||||
Preferred dividends | (38,713 | ) | (38,713 | ) | (38,713 | ) | ||||||||||||||||||||||||||
Net loss attributable to FelCor common stockholders | (261,754 | ) | (146,835 | ) | (157,958 | ) | ||||||||||||||||||||||||||
Less: Dividends declared on unvested restricted stock | — | — | (1,041 | ) | ||||||||||||||||||||||||||||
Numerator for basic and diluted loss attributable to common stockholders | (261,754 | ) | 80,611 | (3.25 | ) | (146,835 | ) | 63,114 | (2.33 | ) | (158,999 | ) | 61,979 | (2.57 | ) | |||||||||||||||||
Depreciation and amortization | 136,931 | — | 1.70 | 134,860 | — | 2.14 | 125,077 | — | 2.02 | |||||||||||||||||||||||
Depreciation, discontinued operations and unconsolidated entities | 25,295 | — | 0.32 | 29,789 | — | 0.46 | 30,754 | — | 0.50 | |||||||||||||||||||||||
Gain on involuntary conversion | — | — | — | — | — | — | (3,095 | ) | — | (0.05 | ) | |||||||||||||||||||||
Gain on sale of hotels | — | — | — | (910 | ) | — | (0.01 | ) | (1,193 | ) | — | (0.02 | ) | |||||||||||||||||||
Gain on sale of unconsolidated entities | (21,103 | ) | — | (0.26 | ) | — | — | — | — | — | — | |||||||||||||||||||||
Noncontrolling interests in FelCor LP | (881 | ) | 294 | (0.01 | ) | (672 | ) | 296 | (0.01 | ) | (2,433 | ) | 1,199 | (0.04 | ) | |||||||||||||||||
Dividend declared on unvested restricted stock | — | — | — | — | — | — | 1,041 | — | 0.02 | |||||||||||||||||||||||
Unvested restricted stock | — | — | — | — | 331 | — | — | — | — | |||||||||||||||||||||||
FFO | (121,512 | ) | 80,905 | (1.50 | ) | 16,232 | 63,741 | 0.25 | (8,848 | ) | 63,178 | (0.14 | ) | |||||||||||||||||||
Impairment loss | 115,273 | — | 1.43 | — | — | — | 38,455 | — | 0.61 | |||||||||||||||||||||||
Impairment loss, discontinued operations and unconsolidated entities | 57,703 | — | 0.71 | 5,516 | — | 0.08 | 82,204 | — | 1.30 | |||||||||||||||||||||||
Acquisition costs | 449 | — | 0.01 | — | — | — | — | — | — | |||||||||||||||||||||||
Extinguishment of debt | (59,465 | ) | — | (0.74 | ) | 1,721 | — | 0.03 | — | — | — | |||||||||||||||||||||
Hurricane loss | — | — | — | — | — | — | 934 | — | 0.01 | |||||||||||||||||||||||
Hurricane loss, discontinued operations and unconsolidated entities | — | — | — | — | — | — | 785 | — | 0.01 | |||||||||||||||||||||||
Conversion costs | — | — | — | 447 | — | 0.01 | 507 | — | 0.01 | |||||||||||||||||||||||
Severance costs | — | — | — | 612 | — | 0.01 | 850 | — | 0.01 | |||||||||||||||||||||||
Liquidated damages, discontinued operations | — | — | — | — | — | — | 11,060 | — | 0.18 | |||||||||||||||||||||||
Lease termination costs | — | — | — | 469 | — | 0.01 | — | — | — | |||||||||||||||||||||||
Unvested restricted stock | — | — | — | — | — | — | — | 98 | — | |||||||||||||||||||||||
Adjusted FFO | $ | (7,552 | ) | 80,905 | $ | (0.09 | ) | $ | 24,997 | 63,741 | $ | 0.39 | $ | 125,947 | 63,276 | $ | 1.99 |
Year Ended December 31, | |||||||||||||||||||||
2007 | 2006 | ||||||||||||||||||||
Dollars | Shares | Per Share Amount | Dollars | Shares | Per Share Amount | ||||||||||||||||
Net income | $ | 89,824 | $ | 50,256 | |||||||||||||||||
Noncontrolling interests | (785 | ) | 789 | ||||||||||||||||||
Preferred dividends | (38,713 | ) | (38,713 | ) | |||||||||||||||||
Net income attributable to FelCor common stockholders | 50,326 | 12,332 | |||||||||||||||||||
Less: Dividends declared on unvested restricted stock | (1,011 | ) | (612 | ) | |||||||||||||||||
Numerator for basic and diluted loss attributable to common stockholders | 49,315 | 61,600 | 0.80 | 11,720 | 60,734 | 0.19 | |||||||||||||||
Depreciation and amortization | 95,770 | — | 1.55 | 81,728 | — | 1.35 | |||||||||||||||
Depreciation, discontinued operations and unconsolidated entities | 27,052 | — | 0.45 | 39,762 | — | 0.65 | |||||||||||||||
Gain on sale of hotels | (27,330 | ) | — | (0.44 | ) | (40,650 | ) | — | (0.67 | ) | |||||||||||
Gain on sale of unconsolidated entities | (10,993 | ) | — | (0.18 | ) | — | — | — | |||||||||||||
Noncontrolling interests in FelCor LP | 1,094 | 1,354 | (0.04 | ) | 279 | 1,864 | (0.04 | ) | |||||||||||||
Dividends declared on unvested restricted stock | 1,011 | — | 0.02 | 612 | — | 0.01 | |||||||||||||||
Unvested restricted stock | — | 297 | (0.01 | ) | — | 327 | — | ||||||||||||||
FFO | 135,919 | 63,251 | 2.15 | 93,451 | 62,925 | 1.49 | |||||||||||||||
Impairment loss, discontinued operations and unconsolidated entities | — | — | — | 15,547 | — | 0.24 | |||||||||||||||
Extinguishment of debt | 811 | — | 0.01 | 17,472 | — | 0.28 | |||||||||||||||
Conversion costs | 491 | — | 0.01 | — | — | — | |||||||||||||||
Abandoned projects | 22 | — | — | 112 | — | — | |||||||||||||||
Gain on swap termination | — | — | — | (1,715 | ) | — | (0.03 | ) | |||||||||||||
Adjusted FFO | $ | 137,243 | 63,251 | $ | 2.17 | $ | 124,867 | 62,925 | $ | 1.98 |
Year Ended December 31, | |||||||||||||||||||
2010 | 2009 | 2008 | 2007 | 2006 | |||||||||||||||
Net income (loss) | $ | (225,837 | ) | $ | (109,091 | ) | $ | (120,487 | ) | $ | 89,824 | $ | 50,256 | ||||||
Depreciation and amortization | 136,931 | 134,860 | 125,077 | 95,770 | 81,728 | ||||||||||||||
Depreciation, discontinued operations and unconsolidated entities | 25,295 | 29,789 | 30,754 | 27,052 | 39,762 | ||||||||||||||
Interest expense | 139,853 | 100,260 | 92,746 | 89,654 | 106,942 | ||||||||||||||
Interest expense, discontinued operations and unconsolidated entities | 9,656 | 9,801 | 13,902 | 15,262 | 15,624 | ||||||||||||||
Amortization of stock compensation | 7,445 | 5,165 | 4,451 | 4,255 | 5,080 | ||||||||||||||
Noncontrolling interests in other partnerships | 1,915 | 297 | (1,191 | ) | 309 | 1,068 | |||||||||||||
EBITDA | 95,258 | 171,081 | 145,252 | 322,126 | 300,460 | ||||||||||||||
Impairment loss | 115,273 | — | 38,455 | — | — | ||||||||||||||
Impairment loss, discontinued operations and unconsolidated entities | 57,703 | 5,516 | 82,204 | — | 15,547 | ||||||||||||||
Hurricane loss | — | — | 934 | — | |||||||||||||||
Hurricane loss, discontinued operations and unconsolidated entities | — | — | 785 | — | — | ||||||||||||||
Extinguishment of debt | (59,465 | ) | 1,721 | — | 811 | 17,472 | |||||||||||||
Conversion costs | — | 447 | 507 | 491 | — | ||||||||||||||
Acquisition costs | 449 | — | — | — | — | ||||||||||||||
Severance costs | — | 612 | 850 | — | — | ||||||||||||||
Liquidated damages, discontinued operations | — | — | 11,060 | — | — | ||||||||||||||
Lease termination costs | — | 469 | — | — | — | ||||||||||||||
Abandoned projects | — | — | — | 22 | 112 | ||||||||||||||
Gain on swap termination | — | — | — | — | (1,715 | ) | |||||||||||||
Gain on sale of hotels | — | (910 | ) | (1,193 | ) | (27,330 | ) | (40,650 | ) | ||||||||||
Gain on involuntary conversion | — | — | (3,095 | ) | — | — | |||||||||||||
Gain on sale of unconsolidated entities | (21,103 | ) | — | — | (10,993 | ) | — | ||||||||||||
Adjusted EBITDA | 188,115 | 178,936 | 275,759 | 285,127 | 291,226 | ||||||||||||||
Other revenue | (3,174 | ) | (2,843 | ) | (2,921 | ) | (3,029 | ) | (24 | ) | |||||||||
Adjusted EBITDA from acquired hotels | (3,416 | ) | — | — | 14,400 | 13,147 | |||||||||||||
Equity in income from unconsolidated subsidiaries (excluding interest, depreciation and impairment expense) | (16,283 | ) | (14,829 | ) | (21,144 | ) | (24,309 | ) | (26,351 | ) | |||||||||
Noncontrolling interests in other partnerships (excluding interest, depreciation and severance) | 2,150 | 2,305 | 3,648 | 311 | (357 | ) | |||||||||||||
Consolidated hotel lease expense | 36,327 | 34,187 | 46,264 | 51,197 | 50,682 | ||||||||||||||
Unconsolidated taxes, insurance and lease expense | (6,630 | ) | (7,092 | ) | (7,093 | ) | (6,327 | ) | (5,380 | ) | |||||||||
Interest income | (360 | ) | (686 | ) | (1,536 | ) | (6,270 | ) | (3,875 | ) | |||||||||
Other expenses (excluding conversion costs, severance costs and lease termination costs) | 2,831 | 2,566 | 3,417 | 2,312 | — | ||||||||||||||
Corporate expenses (excluding amortization expense of stock compensation) | 23,302 | 19,051 | 16,247 | 16,463 | 18,228 | ||||||||||||||
Gain on sale of asset | — | (723 | ) | — | — | 92 | |||||||||||||
Gain on sale of condominiums | — | — | — | (18,622 | ) | — | |||||||||||||
Adjusted EBITDA from disposed hotels | (16,351 | ) | (13,979 | ) | (28,656 | ) | (38,448 | ) | (65,954 | ) | |||||||||
Hotel EBITDA | $ | 206,511 | $ | 196,893 | $ | 283,985 | $ | 272,805 | $ | 271,434 |
Year Ended December 31, | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Total revenue | $ | 883,868 | $ | 830,591 | $ | 1,003,324 | ||||||
Other revenue | (3,174 | ) | (2,843 | ) | (2,921 | ) | ||||||
Hotel operating revenue | 880,694 | 827,748 | 1,000,403 | |||||||||
Acquired hotel revenue(a) | (16,839 | ) | — | — | ||||||||
Same-store hotel operating revenue | 863,855 | 827,748 | 1,000,403 | |||||||||
Same-store hotel operating expenses | (657,344 | ) | (630,855 | ) | (716,418 | ) | ||||||
Hotel EBITDA | $ | 206,511 | $ | 196,893 | $ | 283,985 | ||||||
Hotel EBITDA margin(b) | 23.9 | % | 23.8 | % | 28.4 | % |
(a) | We have excluded amounts from the Fairmont Copley Plaza acquired in August 2010 for same-store comparison purposes. |
(b) | Hotel EBITDA as a percentage of same-store hotel operating revenue. |
Year Ended December 31, | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Total operating expenses | $ | 986,695 | $ | 821,051 | $ | 945,551 | ||||||
Unconsolidated taxes, insurance and lease expense | 6,630 | 7,092 | 7,093 | |||||||||
Consolidated hotel lease expense | (36,327 | ) | (34,187 | ) | (46,264 | ) | ||||||
Corporate expenses | (30,747 | ) | (24,216 | ) | (20,698 | ) | ||||||
Depreciation and amortization | (136,931 | ) | (134,860 | ) | (125,077 | ) | ||||||
Impairment loss | (115,273 | ) | — | (38,455 | ) | |||||||
Other expenses | (3,280 | ) | (4,025 | ) | (5,732 | ) | ||||||
Acquired hotel expenses(a) | (13,423 | ) | — | — | ||||||||
Hotel operating expenses | $ | 657,344 | $ | 630,855 | $ | 716,418 |
(a) | We have excluded amounts from the Fairmont Copley Plaza acquired in August 2010 for same-store comparison purposes. |
Year Ended December 31, | |||||||||
2010 | 2009 | 2008 | |||||||
Ratio of operating income (loss) to total revenues | (11.6 | )% | 1.2 | % | 5.8 | % | |||
Other revenue | (0.4 | ) | (0.2 | ) | (0.3 | ) | |||
Acquired hotel revenue(a) | (2.0 | ) | — | — | |||||
Unconsolidated taxes, insurance and lease expense | (0.8 | ) | (0.9 | ) | (0.7 | ) | |||
Consolidated hotel lease expense | 4.2 | 4.1 | 4.6 | ||||||
Other expenses | 0.4 | 0.5 | 0.6 | ||||||
Corporate expenses | 3.5 | 2.9 | 2.1 | ||||||
Depreciation and amortization | 15.8 | 16.2 | 12.5 | ||||||
Impairment loss | 13.3 | — | 3.8 | ||||||
Acquired hotel expenses(a) | 1.5 | — | — | ||||||
Hotel EBITDA margin | 23.9 | % | 23.8 | % | 28.4 | % |
(a) | We have excluded amounts from the Fairmont Copley Plaza acquired in August 2010 for same-store comparison purposes. |
• | Gains and losses related to extinguishment of debt and interest rate swaps - We exclude gains and losses related to extinguishment of debt and interest rate swaps from FFO and EBITDA because we believe that it is not indicative of ongoing operating performance of our hotel assets. This also represents an acceleration of interest expense or a reduction of interest expense, and interest expense is excluded from EBITDA. |
• | 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. |
Encumbered Hotels | Interest Rate (%) | December 31, | ||||||||||||||
Maturity Date | 2010 | 2009 | ||||||||||||||
Mortgage debt | ||||||||||||||||
Mortgage debt | 12 hotels | L + 0.93 | (a) | November 2011 | $ | 250,000 | $ | 250,000 | ||||||||
Mortgage debt | 9 hotels | L + 5.10 | (b) | April 2015 | 212,000 | — | ||||||||||
Mortgage debt | 9 hotels | L + 3.50 | (c) | August 2011 (d) | 198,300 | 200,425 | ||||||||||
Mortgage debt | 7 hotels | 9.02 | April 2014 | 113,220 | 117,422 | |||||||||||
Mortgage debt(e) | 5 hotels | 6.66 | June - August 2014 | 69,206 | 70,917 | |||||||||||
Mortgage debt | 2 hotels | L + 4.25 | November 2011(f) | 29,000 | — | |||||||||||
Mortgage debt | 1 hotel | 8.77 | May 2013 | 27,770 | 27,829 | |||||||||||
Mortgage debt | 1 hotel | 5.81 | July 2016 | 11,321 | 11,741 | |||||||||||
Mortgage debt | 1 hotel | 6.15 | June 2011 | 7,800 | 9,228 | |||||||||||
Other | — | 4.25 | May 2011 | 524 | 354 | |||||||||||
Senior notes | ||||||||||||||||
Senior secured notes(g) | 14 hotels | 10.00 | October 2014 | 582,821 | 572,500 | |||||||||||
Senior notes | — | 9.00 | June 2011 | 46,347 | 86,604 | |||||||||||
Retired debt | — | — | — | — | 426,294 | |||||||||||
Total | 61 hotels | $ | 1,548,309 | $ | 1,773,314 |
(a) | We purchased an interest rate cap that caps LIBOR at 7.8% and expires November 2011 for a $250 million notional amount. |
(b) | LIBOR for this loan is subject to a 3% floor. We purchased an interest rate cap that caps LIBOR at 5.0% and expires May 2012 for a $212 million notional amount. |
(c) | LIBOR for this loan is subject to a 2% floor. |
(d) | This loan can be extended for as many as two years (to 2013), subject to satisfying certain conditions. |
(e) | The hotels securing this debt are subject to separate loan agreements and are not cross-collateralized. |
(f) | This loan can be extended for one year, subject to satisfying certain conditions. |
(g) | These notes have $636 million in aggregate principal outstanding and were sold at a discount that provides a 12.875% yield to maturity before transaction costs. |
Total | Less Than 1 Year | 1 – 3 Years | 4 – 5 Years | After 5 Years | |||||||||||||||||
Debt(a) | $ | 1,986,851 | $ | 650,450 | (b) | $ | 234,071 | $ | 1,093,261 | $ | 9,069 | ||||||||||
Operating leases | 343,424 | 26,992 | 30,132 | 11,687 | 274,613 | ||||||||||||||||
Purchase obligations | 62,627 | 62,627 | — | — | — | ||||||||||||||||
IHG liquidated damages(c) | 8,526 | 8,526 | — | — | — | ||||||||||||||||
Total contractual obligations | $ | 2,401,428 | $ | 748,595 | $ | 264,203 | $ | 1,104,948 | $ | 283,682 |
(a) | Our long-term debt consists of both secured and unsecured debt and includes both principal and interest. Interest expense for variable rate debt was calculated using the interest rate at December 31, 2010. |
(b) | Included in this number is debt of $198.3 million that can be extended for as many as two years (to 2013), and $29.0 million that can be extended to 2012, both subject to satisfying certain conditions. |
(c) | These liquidated damages were paid in January 2011. |
• | We record an impairment charge when we believe that an investment in one or more of our hotels held for investment has been impaired, such that future undiscounted cash flows would not recover the book basis, or net book value, of the investment. We test for impairment when certain events occur, including one or more of the following: projected cash flows are significantly less than recent historical cash flows; significant changes in legal factors or actions by a regulator that could affect the value of our hotels; events that could cause changes or uncertainty in travel patterns; and a current expectation that, more likely than not, a hotel will be sold or otherwise disposed of significantly before the end of its previously estimated useful life. In the evaluation of impairment of our hotels, and in establishing impairment charges, we made many assumptions and estimates on a hotel by hotel basis, which included the following: |
◦ | Annual cash flow growth rates for revenues and expenses; |
◦ | Holding periods; |
◦ | Expected remaining useful lives of assets; |
◦ | Estimates in fair values taking into consideration future cash flows, capitalization rates, discount rates and comparable selling prices; and |
◦ | Future capital expenditures. |
• | We record an impairment charge when one or more of our investments in unconsolidated subsidiaries experiences an other-than-temporary decline in fair value. Any decline in fair value that is not expected to be recovered in the next 12 months is considered other-than-temporary. We record an impairment in our equity-based investments as a reduction in the carrying value of the investment. Our estimates of fair values are based on future cash flow estimates, capitalization rates, discount rates and comparable selling prices. |
• | We capitalize interest and certain other costs, such as property taxes, land leases, property insurance and employee costs related to hotels undergoing major renovations and redevelopments. Such costs capitalized in 2010, 2009 and 2008 were $5.8 million, $5.9 million and $6.8 million, respectively. We make estimates with regard to when components of the renovated asset or redevelopment project are taken out of service or placed in service when determining the appropriate amount and time to capitalize these costs. If these estimates are inaccurate, we could capitalize too much or too little with regard to a particular project. |
• | Depreciation expense is based on the estimated useful life of our assets, and amortization expense for leasehold improvements is the shorter of the lease term or the estimated useful life of the related assets. The lives of the assets are based on a number of assumptions including cost and timing of capital expenditures to maintain and refurbish the assets, as well as specific market and economic conditions. While we believe our estimates are reasonable, a change in the estimated lives could affect depreciation and amortization expense and net income (loss) or the gain or loss on the sale of any of our hotels. |
• | Investments in hotel properties are based on purchase price and allocated to land, property and equipment, identifiable intangible assets and assumed debt and other liabilities at fair value. Any remaining unallocated purchase price, if any, is treated as goodwill. Property and equipment are recorded at fair value based on current replacement cost for similar capacity and allocated to buildings, improvements, furniture, fixtures and equipment using appraisals and valuations prepared by management and/or independent third parties. Identifiable intangible assets (typically contracts including ground and retail leases and management and franchise agreements) are recorded at fair value, although no value is generally allocated to contracts which are at market terms. Above-market and below-market contract values are based on the present value of the difference between contractual amounts to be paid pursuant to the contracts acquired and our estimate of the fair value of contract rates for corresponding contracts measured over the period equal to the remaining non-cancelable term of the contract. Intangible assets are amortized using the straight-line method over the remaining non-cancelable term of the related agreements. In making estimates of fair values for purposes of allocating purchase price, we may utilize a number of sources such as those obtained in connection with the acquisition or financing of a property and other market data, including third-party appraisals and valuations. |
• | We make estimates with respect to contingent liabilities for losses covered by insurance. We record liabilities for self-insured losses under our insurance programs when it becomes probable that an asset has been impaired or a liability has been incurred at the date of our financial statements and the amount of the loss can be reasonably estimated. We are self-insured for the first $250,000, per occurrence, of our general liability claims with regard to 54 of our hotels. We review the adequacy of our reserves for our self-insured claims on a regular basis. Our reserves are intended to cover the estimated ultimate uninsured liability for losses with respect to reported and unreported claims incurred at the end of each accounting period. These reserves represent estimates at a given date, generally utilizing projections based on claims, historical settlement of claims and estimates of future costs to settle claims. Estimates are also required since there may be delays in reporting. Because establishment of insurance reserves is an inherently uncertain process involving estimates, currently established reserves may not be sufficient. If our insurance reserves of $3.5 million, at December 31, 2010, for general liability losses are insufficient, we will record an additional expense in future periods. Property and catastrophic losses are event-driven losses and, as such, until a loss occurs and the amount of loss can be reasonably estimated, no liability is recorded. We recorded no contingent liabilities with regard to property or catastrophic losses at December 31, 2010. |
• | Our Taxable REIT Subsidiaries, or TRSs, have cumulative potential future tax deductions totaling |
December 31, 2010 | ||||||||||||||||||||||||||||||||
Expected Maturity Date | ||||||||||||||||||||||||||||||||
2011 | 2012 | 2013 | 2014 | 2015 | Thereafter | Total | Fair Value | |||||||||||||||||||||||||
Liabilities | (dollars in thousands) | |||||||||||||||||||||||||||||||
Fixed rate: | ||||||||||||||||||||||||||||||||
Debt | $ | 60,191 | $ | 4,561 | $ | 32,708 | $ | 804,842 | $ | 563 | $ | 8,813 | $ | 911,678 | $ | 1,001,102 | ||||||||||||||||
Average interest rate | 8.54 | % | 7.68 | % | 8.61 | % | 9.61 | % | 5.81 | % | 5.81 | % | 9.45 | % | ||||||||||||||||||
Floating rate: | ||||||||||||||||||||||||||||||||
Debt | 478,966 | (b) | 1,832 | 1,986 | 2,153 | 204,887 | — | 689,824 | 676,725 | |||||||||||||||||||||||
Average interest rate(a) | 3.36 | % | 8.10 | % | 8.10 | % | 8.16 | % | 8.16 | % | — | 4.83 | % | |||||||||||||||||||
Total debt | $ | 539,157 | $ | 6,393 | $ | 34,694 | $ | 806,995 | $ | 205,450 | $ | 8,813 | $ | 1,601,502 | ||||||||||||||||||
Average interest rate | 3.94 | % | 7.80 | % | 8.58 | % | 9.60 | % | 8.16 | % | 5.81 | % | 7.46 | % | ||||||||||||||||||
Net discount | (53,193 | ) | ||||||||||||||||||||||||||||||
Total debt | $ | 1,548,309 |
(a) | The average floating rate represents the implied forward rates in the yield curve at December 31, 2010. |
(b) | Included in this number is debt of $198.3 million that can be extended for as many as two years (to 2013), and $29.0 million that can be extended to 2012, both subject to satisfying certain conditions. |
December 31, 2009 | ||||||||||||||||||||||||||||||||
Expected Maturity Date | ||||||||||||||||||||||||||||||||
2010 | 2011 | 2012 | 2013 | 2014 | Thereafter | Total | Fair Value | |||||||||||||||||||||||||
Liabilities | (dollars in thousands) | |||||||||||||||||||||||||||||||
Fixed rate: | ||||||||||||||||||||||||||||||||
Debt | $ | 251,840 | $ | 105,955 | $ | 4,539 | $ | 32,742 | $ | 805,126 | $ | 9,376 | $ | 1,209,578 | $ | 1,207,728 | ||||||||||||||||
Average interest rate | 8.69 | % | 8.62 | % | 7.67 | % | 8.61 | % | 9.61 | % | 5.81 | % | 9.27 | % | ||||||||||||||||||
Floating rate: | ||||||||||||||||||||||||||||||||
Debt | 1,978 | 448,800 | 177,225 | — | — | — | 628,003 | 541,773 | ||||||||||||||||||||||||
Average interest rate(a) | 5.28 | % | 4.01 | % | 4.91 | % | — | — | — | 4.27 | % | |||||||||||||||||||||
Total debt | $ | 253,818 | $ | 554,755 | $ | 181,764 | $ | 32,742 | $ | 805,126 | $ | 9,376 | $ | 1,837,581 | ||||||||||||||||||
Average interest rate | 8.66 | % | 4.89 | % | 4.98 | % | 8.61 | % | 9.61 | % | 5.81 | % | 7.56 | % | ||||||||||||||||||
Net discount | (64,267 | ) | ||||||||||||||||||||||||||||||
Total debt | $ | 1,773,314 |
(a) | The average floating rate represents the implied forward rates in the yield curve at December 31, 2009. |
Report of Independent Registered Public Accounting Firm | |
Consolidated Balance Sheets — December 2010 and 2009 | |
Consolidated Statements of Operations for the years ended December 31, 2010, 2009 and 2008 | |
Consolidated Statements of Comprehensive Loss for the years ended December 31, 2010, 2009 and 2008 | |
Consolidated Statements of Equity for the years ended December 31, 2010, 2009 and 2008 | |
Consolidated Statements of Cash Flows for the years ended December 31, 2010, 2009 and 2008 | |
Notes to Consolidated Financial Statements | |
Schedule III — Real Estate and Accumulated Depreciation as of December 31, 2010 |
2010 | December 31, 2009 | ||||||
Assets | |||||||
Investment in hotels, net of accumulated depreciation of $982,564 and $916,604 at December 31, 2010 and 2009, respectively | $ | 1,985,779 | $ | 2,180,394 | |||
Investment in unconsolidated entities | 75,920 | 82,040 | |||||
Cash and cash equivalents | 200,972 | 263,531 | |||||
Restricted cash | 16,702 | 18,708 | |||||
Accounts receivable, net of allowance for doubtful accounts of $696 and $406 at December 31, 2010 and 2009, respectively | 27,851 | 28,678 | |||||
Deferred expenses, net of accumulated amortization of $17,892 and $14,502 at December 31, 2010 and 2009, respectively | 19,940 | 19,977 | |||||
Other assets | 32,271 | 32,666 | |||||
Total assets | $ | 2,359,435 | $ | 2,625,994 | |||
Liabilities and Equity | |||||||
Debt, net of discount of $53,193 and $64,267 at December 31, 2010 and 2009, respectively | $ | 1,548,309 | $ | 1,773,314 | |||
Preferred dividends payable | 76,293 | 37,580 | |||||
Accrued expenses and other liabilities | 144,451 | 131,339 | |||||
Total liabilities | 1,769,053 | 1,942,233 | |||||
Commitments and contingencies | |||||||
Redeemable noncontrolling interests in FelCor LP at redemption value, 285 and 295 units issued and outstanding at December 31, 2010 and 2009, respectively | 2,004 | 1,062 | |||||
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 December 31, 2010 and 2009 | 309,362 | 309,362 | |||||
Series C Cumulative Redeemable Preferred Stock, 68 shares, liquidation value of $169,950, issued and outstanding at December 31, 2010 and 2009 | 169,412 | 169,412 | |||||
Common stock, $0.01 par value, 200,000 shares authorized and 101,038 and 69,413 shares issued, including shares in treasury, at December 31, 2010 and 2009, respectively | 1,010 | 694 | |||||
Additional paid-in capital | 2,190,308 | 2,021,837 | |||||
Accumulated other comprehensive income | 26,457 | 23,528 | |||||
Accumulated deficit | (2,054,625 | ) | (1,792,822 | ) | |||
Less: Common stock in treasury, at cost, of 4,156 and 3,845 shares at December 31, 2010 and 2009, respectively | (73,341 | ) | (71,895 | ) | |||
Total FelCor stockholders’ equity | 568,583 | 660,116 | |||||
Noncontrolling interests in other partnerships | 19,795 | 22,583 | |||||
Total equity | 588,378 | 682,699 | |||||
Total liabilities and equity | $ | 2,359,435 | $ | 2,625,994 |
2010 | 2009 | 2008 | |||||||||
Revenues: | |||||||||||
Hotel operating revenue | $ | 880,694 | $ | 827,748 | $ | 1,000,403 | |||||
Other revenue | 3,174 | 2,843 | 2,921 | ||||||||
Total revenues | 883,868 | 830,591 | 1,003,324 | ||||||||
Expenses: | |||||||||||
Hotel departmental expenses | 319,459 | 297,216 | 338,202 | ||||||||
Other property operating costs | 250,590 | 235,233 | 266,995 | ||||||||
Management and franchise fees | 41,360 | 39,758 | 51,494 | ||||||||
Taxes, insurance and lease expenses | 89,055 | 85,743 | 98,898 | ||||||||
Corporate expenses | 30,747 | 24,216 | 20,698 | ||||||||
Depreciation and amortization | 136,931 | 134,860 | 125,077 | ||||||||
Impairment loss | 115,273 | — | 38,455 | ||||||||
Other expenses | 3,280 | 4,025 | 5,732 | ||||||||
Total operating expenses | 986,695 | 821,051 | 945,551 | ||||||||
Operating income (loss) | (102,827 | ) | 9,540 | 57,773 | |||||||
Interest expense, net | (139,493 | ) | (99,574 | ) | (91,210 | ) | |||||
Debt extinguishment | 44,313 | (1,721 | ) | — | |||||||
Loss before equity in income (loss) from unconsolidated entities | (198,007 | ) | (91,755 | ) | (33,437 | ) | |||||
Equity in income (loss) from unconsolidated entities | 16,916 | (4,814 | ) | (10,932 | ) | ||||||
Gain on involuntary conversion | — | — | 3,095 | ||||||||
Gain on sale of assets | — | 723 | — | ||||||||
Loss from continuing operations | (181,091 | ) | (95,846 | ) | (41,274 | ) | |||||
Discontinued operations | (44,746 | ) | (13,245 | ) | (79,213 | ) | |||||
Net loss | (225,837 | ) | (109,091 | ) | (120,487 | ) | |||||
Net loss (income) attributable to noncontrolling interests in other partnerships | 1,915 | 297 | (1,191 | ) | |||||||
Net loss attributable to redeemable noncontrolling interests in FelCor LP | 881 | 672 | 2,433 | ||||||||
Net loss attributable to FelCor | (223,041 | ) | (108,122 | ) | (119,245 | ) | |||||
Preferred dividends | (38,713 | ) | (38,713 | ) | (38,713 | ) | |||||
Net loss attributable to FelCor common stockholders | $ | (261,754 | ) | $ | (146,835 | ) | $ | (157,958 | ) | ||
Basic and diluted per common share data: | |||||||||||
Loss from continuing operations | $ | (2.71 | ) | $ | (2.12 | ) | $ | (1.31 | ) | ||
Net loss | $ | (3.25 | ) | $ | (2.33 | ) | $ | (2.57 | ) | ||
Basic and diluted weighted average common shares outstanding | 80,611 | 63,114 | 61,979 |
2010 | 2009 | 2008 | ||||||||||
Net loss | $ | (225,837 | ) | $ | (109,091 | ) | $ | (120,487 | ) | |||
Foreign currency translation adjustment | 2,937 | 8,219 | (12,032 | ) | ||||||||
Comprehensive loss | (222,900 | ) | (100,872 | ) | (132,519 | ) | ||||||
Comprehensive loss attributable to noncontrolling interests in other partnerships | 1,915 | 297 | (1,191 | ) | ||||||||
Comprehensive loss to redeemable noncontrolling interests in FelCor LP | 873 | 634 | 2,612 | |||||||||
Comprehensive loss attributable to FelCor | $ | (220,112 | ) | $ | (99,941 | ) | $ | (131,098 | ) |
Preferred Stock | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Noncontrolling Interests in Other Partnerships | Comprehensive Income (Loss) | ||||||||||||||||||||||||||||||||||||||
Number of Shares | Amount | Number of Shares | Amount | Accumulated Deficit | Treasury Stock | Total Equity | |||||||||||||||||||||||||||||||||||||
Balance at December 31, 2007 | 12,948 | $ | 478,774 | 69,413 | $ | 694 | $ | 2,053,761 | $ | 26,871 | $ | (1,434,393 | ) | $ | (128,504 | ) | $ | 25,264 | $ | 1,022,467 | |||||||||||||||||||||||
Issuance of stock awards | — | — | — | — | (9,013 | ) | — | — | 9,572 | — | — | 559 | |||||||||||||||||||||||||||||||
Amortization of stock awards | — | — | — | — | 4,943 | — | — | — | — | 4,943 | |||||||||||||||||||||||||||||||||
Forfeiture of stock awards | — | — | — | — | — | — | — | (548 | ) | — | (548 | ) | |||||||||||||||||||||||||||||||
Conversion of operating partnership units into common shares | — | — | — | — | (20,235 | ) | — | — | 20,235 | — | — | ||||||||||||||||||||||||||||||||
Allocation to redeemable noncontrolling interests | — | — | — | — | 16,064 | 329 | — | — | — | 16,393 | |||||||||||||||||||||||||||||||||
Costs related to shelf registration | — | — | — | — | (38 | ) | — | — | — | — | (38 | ) | |||||||||||||||||||||||||||||||
Contribution from noncontrolling interests | — | — | — | — | — | — | — | — | 565 | 565 | |||||||||||||||||||||||||||||||||
Distribution to noncontrolling interests | — | — | — | — | — | — | — | — | (3,236 | ) | (3,236 | ) | |||||||||||||||||||||||||||||||
Dividends declared: | |||||||||||||||||||||||||||||||||||||||||||
$0.85 per common share | — | — | — | — | — | — | (53,596 | ) | — | — | (53,596 | ) | |||||||||||||||||||||||||||||||
$1.95 per Series A preferred share | — | — | — | — | — | — | (25,117 | ) | — | — | (25,117 | ) | |||||||||||||||||||||||||||||||
$2.00 per Series C depositary preferred share | — | — | — | — | — | — | (13,596 | ) | — | — | (13,596 | ) | |||||||||||||||||||||||||||||||
Comprehensive loss: | |||||||||||||||||||||||||||||||||||||||||||
Foreign exchange translation | — | — | — | — | — | (11,853 | ) | — | — | — | $ | (11,853 | ) | ||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | (119,245 | ) | — | 1,191 | (118,054 | ) | |||||||||||||||||||||||||||||||
Comprehensive loss | $ | (129,907 | ) | (129,907 | ) | ||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2008 | 12,948 | $ | 478,774 | 69,413 | $ | 694 | $ | 2,045,482 | $ | 15,347 | — | $ | (1,645,947 | ) | $ | (99,245 | ) | $ | 23,784 | $ | 818,889 |
Preferred Stock | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Noncontrolling Interests in Other Partnerships | Comprehensive Income (Loss) | |||||||||||||||||||||||||||||||||||||
Number of Shares | Amount | Number of Shares | Amount | Accumulated Deficit | Treasury Stock | Total Equity | ||||||||||||||||||||||||||||||||||||
Balance at December 31, 2008 | 12,948 | $ | 478,774 | 69,413 | $ | 694 | $ | 2,045,482 | $ | 15,347 | — | $ | (1,645,947 | ) | $ | (99,245 | ) | $ | 23,784 | $ | 818,889 | |||||||||||||||||||||
Issuance of stock awards | — | — | — | — | (27,510 | ) | — | — | 27,526 | — | 16 | |||||||||||||||||||||||||||||||
Amortization of stock awards | — | — | — | — | 5,139 | — | — | — | — | 5,139 | ||||||||||||||||||||||||||||||||
Forfeiture of stock awards | — | — | — | — | 63 | — | — | (193 | ) | — | (130 | ) | ||||||||||||||||||||||||||||||
Conversion of operating partnership units into common shares | — | — | — | — | (17 | ) | — | — | 17 | — | — | |||||||||||||||||||||||||||||||
Allocation to redeemable noncontrolling interests | — | — | — | — | (1,152 | ) | — | — | — | — | (1,152 | ) | ||||||||||||||||||||||||||||||
Contribution from noncontrolling interests | — | — | — | — | — | — | — | — | 534 | 534 | ||||||||||||||||||||||||||||||||
Distribution to noncontrolling interests | — | — | — | — | — | — | — | — | (1,606 | ) | (1,606 | ) | ||||||||||||||||||||||||||||||
Other | — | — | — | — | (168 | ) | — | (40 | ) | — | 168 | (40 | ) | |||||||||||||||||||||||||||||
Preferred dividends accrued: | ||||||||||||||||||||||||||||||||||||||||||
$1.833 per Series A preferred share | — | — | — | — | — | — | (25,117 | ) | — | — | (25,117 | ) | ||||||||||||||||||||||||||||||
$2.00 per Series C depositary preferred share | — | — | — | — | — | — | (12,462 | ) | — | — | (12,462 | ) | ||||||||||||||||||||||||||||||
Dividends declared and paid ($0.167 per Series C depository preferred share) | — | — | — | — | — | — | (1,134 | ) | — | — | (1,134 | ) | ||||||||||||||||||||||||||||||
Comprehensive loss: | ||||||||||||||||||||||||||||||||||||||||||
Foreign exchange translation | — | — | — | — | — | 8,181 | — | — | — | $ | 8,181 | |||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | (108,122 | ) | — | (297 | ) | (108,419 | ) | |||||||||||||||||||||||||||||
Comprehensive loss | $ | (100,238 | ) | (100,238 | ) | |||||||||||||||||||||||||||||||||||||
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 |
Preferred Stock | Common Stock | Accumulated Other Comprehensive Income (Loss) | Noncontrolling Interests in Other Partnerships | ||||||||||||||||||||||||||||||||||||||||||||||
Number of Shares | Amount | Number of Shares | Amount | Additional Paid-in Capital | Accumulated Deficit | Treasury Stock | Comprehensive Income (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 | 166,011 | — | — | — | — | 166,327 | |||||||||||||||||||||||||||||||||||||||
Issuance of stock awards | — | — | — | — | (229 | ) | — | — | 297 | — | 68 | ||||||||||||||||||||||||||||||||||||||
Amortization of stock awards | — | — | — | — | 5,400 | — | — | — | — | 5,400 | |||||||||||||||||||||||||||||||||||||||
Forfeiture of stock awards | — | — | — | — | 405 | — | — | (1,928 | ) | — | (1,523 | ) | |||||||||||||||||||||||||||||||||||||
Conversion of operating partnership units into common shares | — | — | — | — | (185 | ) | — | — | 185 | — | — | ||||||||||||||||||||||||||||||||||||||
Allocation to redeemable noncontrolling interests | — | — | — | — | (1,815 | ) | — | — | — | — | (1,815 | ) | |||||||||||||||||||||||||||||||||||||
Contribution from noncontrolling interests | — | — | — | — | — | — | — | — | 1,394 | 1,394 | |||||||||||||||||||||||||||||||||||||||
Distribution to noncontrolling interests | — | — | — | — | — | — | — | — | (2,383 | ) | (2,383 | ) | |||||||||||||||||||||||||||||||||||||
Other | — | — | — | — | (1,116 | ) | — | (49 | ) | — | 116 | (1,049 | ) | ||||||||||||||||||||||||||||||||||||
Preferred dividends accrued: | |||||||||||||||||||||||||||||||||||||||||||||||||
$1.95 per Series A preferred share | — | — | — | — | — | — | (25,117 | ) | — | — | (25,117 | ) | |||||||||||||||||||||||||||||||||||||
$2.00 per Series C depositary preferred share | — | — | — | — | — | — | (13,596 | ) | — | — | (13,596 | ) | |||||||||||||||||||||||||||||||||||||
Comprehensive loss: | |||||||||||||||||||||||||||||||||||||||||||||||||
Foreign exchange translation | — | — | — | — | — | 2,929 | — | — | — | $ | 2,929 | ||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | (223,041 | ) | — | (1,915 | ) | (224,956 | ) | ||||||||||||||||||||||||||||||||||||
Comprehensive loss | $ | (222,027 | ) | (222,027 | ) | ||||||||||||||||||||||||||||||||||||||||||||
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 |
2010 | 2009 | 2008 | ||||||||||
Cash flows from operating activities: | ||||||||||||
Net loss | $ | (225,837 | ) | $ | (109,091 | ) | $ | (120,487 | ) | |||
Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||||||||
Depreciation and amortization | 147,663 | 150,088 | 141,668 | |||||||||
Gain on involuntary conversion | — | — | (3,095 | ) | ||||||||
Gain on sale of assets | — | (1,633 | ) | (1,193 | ) | |||||||
Amortization of deferred financing fees and debt discount | 17,849 | 7,120 | 2,959 | |||||||||
Amortization of unearned officers' and directors' compensation | 7,445 | 5,165 | 4,451 | |||||||||
Equity in (income) loss from unconsolidated entities | (16,916 | ) | 4,814 | 10,932 | ||||||||
Distributions of income from unconsolidated entities | 2,190 | 2,789 | 2,973 | |||||||||
Debt extinguishment | (59,464 | ) | 1,721 | — | ||||||||
Impairment loss | 173,713 | 3,448 | 107,963 | |||||||||
Changes in assets and liabilities: | ||||||||||||
Accounts receivable | (746 | ) | 5,369 | 3,675 | ||||||||
Restricted cash—operations | 3,986 | 345 | (71 | ) | ||||||||
Other assets | (2,809 | ) | (1,520 | ) | (386 | ) | ||||||
Accrued expenses and other liabilities | 11,738 | 4,292 | 3,774 | |||||||||
Net cash flow provided by operating activities | 58,812 | 72,907 | — | 153,163 | ||||||||
Cash flows from investing activities: | ||||||||||||
Acquisition of hotel | (97,513 | ) | — | — | ||||||||
Improvements and additions to hotels | (38,936 | ) | (75,949 | ) | (142,897 | ) | ||||||
Additions to condominium project | (274 | ) | (154 | ) | (752 | ) | ||||||
Proceeds from sale of hotels | — | 25,038 | — | |||||||||
Change in restricted cash – investing | (4,143 | ) | (3,373 | ) | 1,705 | |||||||
Proceeds from property damage insurance | 492 | — | 2,005 | |||||||||
Redemption of investment securities | — | 1,719 | 5,397 | |||||||||
Distributions from unconsolidated entities | 46,084 | 6,200 | 24,858 | |||||||||
Contributions to unconsolidated entities | (25,172 | ) | (444 | ) | (5,995 | ) | ||||||
Net cash flow used in investing activities | (119,462 | ) | (46,963 | ) | — | (115,679 | ) | |||||
Cash flows from financing activities: | ||||||||||||
Proceeds from borrowings | 241,171 | 988,486 | 187,285 | |||||||||
Repayment of borrowings | (400,968 | ) | (772,375 | ) | (111,744 | ) | ||||||
Payment of deferred financing fees | (7,848 | ) | (19,532 | ) | (21 | ) | ||||||
Change in restricted cash – financing | 1,016 | — | — | |||||||||
Acquisition of noncontrolling interest | (1,000 | ) | — | — | ||||||||
Distributions paid to noncontrolling interests | (2,383 | ) | (1,606 | ) | (3,236 | ) | ||||||
Contribution from noncontrolling interests | 1,394 | 534 | 565 | |||||||||
Distributions paid to redeemable noncontrolling interests in FelCor LP | — | — | (1,559 | ) | ||||||||
Distributions paid to preferred stockholders | — | (9,679 | ) | (38,713 | ) | |||||||
Distributions paid to common stockholders | — | — | (75,686 | ) | ||||||||
Net proceeds from common stock issuance | 166,327 | — | — | |||||||||
Net cash flow provided by (used in) financing activities | (2,291 | ) | 185,828 | (43,109 | ) | |||||||
Effect of exchange rate changes on cash | 382 | 1,572 | (1,797 | ) | ||||||||
Net change in cash and cash equivalents | (62,559 | ) | 213,344 | (7,422 | ) | |||||||
Cash and cash equivalents at beginning of periods | 263,531 | 50,187 | 57,609 | |||||||||
Cash and cash equivalents at end of periods | $ | 200,972 | $ | 263,531 | $ | 50,187 | ||||||
Supplemental cash flow information — interest paid | $ | 127,793 | $ | 85,587 | $ | 100,505 |
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 | ||||||
Renaissance and Marriott | 3 | 1,321 | ||||||
Fairmont | 1 | 383 | ||||||
Total | 75 | 21,910 |
1. | Organization – (continued) |
2. | Summary of Significant Accounting Policies |
2. | Summary of Significant Accounting Policies — (continued) |
• | Cash distributions up to the aggregate historical earnings of the unconsolidated entity are recorded as an operating activity (i.e., a distribution of earnings); and |
• | Cash distributions in excess of aggregate historical earnings are recorded as an investing activity (i.e., a distribution of contributed capital). |
2. | Summary of Significant Accounting Policies — (continued) |
2. | Summary of Significant Accounting Policies — (continued) |
3. | Investment in Hotels |
December 31, | ||||||||
2010 | 2009 | |||||||
Building and improvements | $ | 2,179,926 | $ | 2,265,846 | ||||
Furniture, fixtures and equipment | 525,448 | 591,994 | ||||||
Land | 249,647 | 226,436 | ||||||
Construction in progress | 13,322 | 12,722 | ||||||
2,968,343 | 3,096,998 | |||||||
Accumulated depreciation | (982,564 | ) | (916,604 | ) | ||||
$ | 1,985,779 | $ | 2,180,394 |
4. | Hotel Acquisition |
Assets | |||||
Investment in hotels(a) | $ | 98,500 | |||
Accounts receivable | 1,349 | ||||
Other assets | 898 | ||||
Total assets acquired | 100,747 | ||||
Liabilities | |||||
Accrued expenses and other liabilities | 3,234 | ||||
Net assets acquired | $ | 97,513 |
(a) | Investment in hotels was allocated to land ($27.6 million), building and improvements($62.5 million) and furniture, fixtures and equipment ($8.4 million). |
4. | Hotel Acquisition — (continued) |
Year Ended December 31, (unaudited) | ||||||||
2010 | 2009 | |||||||
Total revenues | $ | 906,977 | $ | 869,857 | ||||
Net loss | $ | (227,360 | ) | $ | (107,490 | ) | ||
Earnings per share - basic and diluted | $ | (3.27 | ) | $ | (2.30 | ) |
5. | Impairment Charges |
6. | Discontinued Operations |
Year Ended December 31, | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Operating revenue | $ | 77,150 | $ | 98,294 | $ | 126,451 | ||||||
Operating expenses(a) | (132,451 | ) | (106,385 | ) | (199,278 | ) | ||||||
Operating loss from discontinued operations | (55,301 | ) | (8,091 | ) | (72,827 | ) | ||||||
Interest expense, net | (4,596 | ) | (6,064 | ) | (7,579 | ) | ||||||
Debt extinguishment | 15,151 | — | — | |||||||||
Gain on sale, net of tax | — | 910 | 1,193 | |||||||||
Loss from discontinued operations | $ | (44,746 | ) | $ | (13,245 | ) | $ | (79,213 | ) |
(a) | Includes impairment charges of $58.4 million, $3.4 million and $69.5 million for the years ended December 31, 2010, 2009 and 2008, respectively, and liquidated damages of $11.1 million for the year ended December 31, 2008. |
7. | Investment in Unconsolidated Entities |
7. | Investment in Unconsolidated Entities — (continued) |
December 31, | |||||||
2010 | December 31, 2009 | ||||||
Balance sheet information: | |||||||
Investment in hotels, net of accumulated depreciation | $ | 192,584 | $ | 259,977 | |||
Total assets | $ | 209,742 | $ | 279,611 | |||
Debt | $ | 154,590 | $ | 214,963 | |||
Total liabilities | $ | 159,171 | $ | 220,389 | |||
Equity | $ | 50,571 | $ | 59,222 |
Year Ended December 31, | |||||||||||||||
2010 | 2009 | 2008 | |||||||||||||
Total revenues | $ | 64,500 | $ | 66,261 | $ | 90,113 | |||||||||
Net income (loss) | $ | (5,302 | ) | $ | (4,988 | ) | (a) | $ | 3,946 | (a) | |||||
Net income (loss) attributable to FelCor | $ | (2,327 | ) | $ | (2,494 | ) | $ | 1,973 | |||||||
Impairment loss | — | (476 | ) | (b) | (11,038 | ) | (c) | ||||||||
Gain on joint venture dispositions | 21,103 | (d) | — | — | |||||||||||
Depreciation of cost in excess of book value | (1,860 | ) | (1,844 | ) | (1,867 | ) | |||||||||
Equity in income (loss) from unconsolidated entities | $ | 16,916 | $ | (4,814 | ) | $ | (10,932 | ) |
(a) | Net income (loss) included impairment charges of $3.2 million for 2009 and $3.3 million for 2008. These impairments were based on sales contracts (a Level 2 input) for two hotels owned by one of our joint ventures. |
(b) | As a result of an impairment charge recorded by one of our joint ventures, the net book value of the joint venture’s assets no longer supported the recovery of our investment. Therefore, we recorded an additional impairment charge to reduce our investment in this joint venture to zero. |
(c) | Represents an $11.0 million impairment charge related to other-than-temporary declines in fair value related to certain unconsolidated entities. |
(d) | Includes a $20.5 million gain from the sale of our interest in an unconsolidated joint venture and $559,000 in net proceeds in the final liquidation of a joint venture. |
7. | Investment in Unconsolidated Entities — (continued) |
December 31, | |||||||
2010 | December 31, 2009 | ||||||
Hotel-related investments | $ | 15,736 | $ | 18,969 | |||
Cost in excess of book value of hotel investments | 50,634 | 52,429 | |||||
Land and condominium investments | 9,550 | 10,642 | |||||
$ | 75,920 | $ | 82,040 |
Year Ended December 31, | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Hotel investments | $ | 17,509 | $ | (4,291 | ) | $ | (10,366 | ) | ||||
Other investments | (593 | ) | (523 | ) | (566 | ) | ||||||
Equity in income (loss) from unconsolidated entities | $ | 16,916 | $ | (4,814 | ) | $ | (10,932 | ) |
8. | Debt |
Encumbered Hotels | Interest Rate(%) | December 31, | |||||||||||||
Maturity Date | 2010 | December 31, 2009 | |||||||||||||
Mortgage debt | |||||||||||||||
Mortgage debt | 12 hotels | L + 0.93 | (a) | November 2011 | $ | 250,000 | $ | 250,000 | |||||||
Mortgage debt | 9 hotels | L + 5.10 | (b) | April 2015 | 212,000 | — | |||||||||
Mortgage debt | 9 hotels | L + 3.50 | (c) | August 2011(d) | 198,300 | 200,425 | |||||||||
Mortgage debt | 7 hotels | 9.02 | April 2014 | 113,220 | 117,422 | ||||||||||
Mortgage debt(e) | 5 hotels | 6.66 | June - August 2014 | 69,206 | 70,917 | ||||||||||
Mortgage debt | 2 hotels | L + 4.25 | November 2011(f) | 29,000 | — | ||||||||||
Mortgage debt | 1 hotel | 8.77 | May 2013 | 27,770 | 27,829 | ||||||||||
Mortgage debt | 1 hotel | 5.81 | July 2016 | 11,321 | 11,741 | ||||||||||
Mortgage debt | 1 hotel | 6.15 | June 2011 | 7,800 | 9,228 | ||||||||||
Other | — | 4.25 | May 2011 | 524 | 354 | ||||||||||
Senior notes | |||||||||||||||
Senior secured notes(g) | 14 hotels | 10.00 | October 2014 | 582,821 | 572,500 | ||||||||||
Senior notes | — | 9.00 | June 2011 | 46,347 | 86,604 | ||||||||||
Retired debt | — | — | — | — | 426,294 | ||||||||||
Total | 61 hotels | $ | 1,548,309 | $ | 1,773,314 |
(a) | We purchased an interest rate cap that caps LIBOR at 7.8% and expires November 2011 for a $250 million notional amount. |
(b) | LIBOR for this loan is subject to a 3% floor. We purchased an interest rate cap that caps LIBOR at 5.0% and expires May 2012 for a $212 million notional amount. |
(c) | LIBOR for this loan is subject to a 2% floor. |
(d) | This loan can be extended for as many as two years (to 2013), subject to satisfying certain conditions. |
(e) | The hotels securing this debt are subject to separate loan agreements and are not cross-collateralized. |
(f) | This loan can be extended for one year, subject to satisfying certain conditions. |
(g) | These notes have $636 million in aggregate principal outstanding and were sold at a discount that provides a 12.875% yield to maturity before transaction costs. |
8. | Debt — (continued) |
8. | Debt — (continued) |
Year | ||||
2011 | $ | 539,157 | ||
2012 | 6,393 | |||
2013 | 34,694 | |||
2014 | 806,995 | |||
2015 | 205,450 | |||
2016 and thereafter | 8,813 | |||
1,601,502 | ||||
Discount accretion over term | (53,193 | ) | ||
$ | 1,548,309 |
9. | Fair Value of Financial Instruments |
10. | Income Taxes |
10. | Income Taxes — (continued) |
Year Ended December 31, | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
GAAP consolidated net loss attributable to FelCor | $ | (223,041 | ) | $ | (108,122 | ) | $ | (119,245 | ) | |||
GAAP net loss from REIT operations | 172,495 | 66,977 | 84,287 | |||||||||
GAAP net loss of taxable subsidiaries | (50,546 | ) | (41,145 | ) | (34,958 | ) | ||||||
Impairment loss not deductible for tax | 8,852 | — | — | |||||||||
Tax gain (loss) in excess of book gains on sale of hotels | — | (1,821 | ) | (346 | ) | |||||||
Depreciation and amortization(a) | (106 | ) | (269 | ) | (482 | ) | ||||||
Employee benefits not deductible for tax | 3,534 | (4,205 | ) | (4,224 | ) | |||||||
Unearned fee reductions | 916 | 4,828 | — | |||||||||
Tax adjustment to lease expense(b) | 40,572 | 11,769 | 11,773 | |||||||||
Other book/tax differences | 5,251 | 7,799 | (8 | ) | ||||||||
Tax gain (loss) of taxable subsidiaries before utilization of net operating losses | 8,473 | (23,044 | ) | (28,245 | ) | |||||||
Utilization of net operating loss | (8,473 | ) | — | — | ||||||||
Net tax gain (loss) of taxable subsidiaries | $ | — | $ | (23,044 | ) | $ | (28,245 | ) |
(a) | The changes in book/tax differences in depreciation and amortization principally result from book and tax basis differences, differences in depreciable lives and accelerated depreciation methods. |
(b) | For tax purposes, we record a reduction in intercompany rent between our REIT entities and TRS entities. |
December 31, | ||||||||
2010 | 2009 | |||||||
Accumulated net operating losses of our TRS | $ | 125,085 | $ | 128,305 | ||||
Tax property basis in excess of book | 2,822 | — | ||||||
Accrued employee benefits not deductible for tax | 984 | 3,967 | ||||||
Other | 997 | 147 | ||||||
Gross deferred tax assets | 129,888 | 132,419 | ||||||
Valuation allowance | (127,795 | ) | (132,291 | ) | ||||
Deferred tax asset after valuation allowance | 2,093 | 128 | ||||||
Other - deferred tax liability | (2,093 | ) | (128 | ) | ||||
Net deferred tax asset | $ | — | $ | — |
10. | Income Taxes — (continued) |
Year Ended December 31, | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
GAAP net loss from REIT operations | $ | (172,495 | ) | $ | (66,977 | ) | $ | (84,287 | ) | |||
Book/tax differences, net: | ||||||||||||
Depreciation and amortization(a) | (11,308 | ) | (11,608 | ) | (21,927 | ) | ||||||
Noncontrolling interests | (1,631 | ) | (222 | ) | (2,889 | ) | ||||||
Equity in loss from unconsolidated entities | — | 2,068 | 12,696 | |||||||||
Tax gain (loss) on dispositions in excess of book | 17,274 | (26,922 | ) | — | ||||||||
Impairment loss not deductible for tax | 164,861 | 3,448 | 107,963 | |||||||||
Liquidated damages | — | (1,000 | ) | 11,060 | ||||||||
Tax adjustment to lease revenue(b) | (39,962 | ) | (11,769 | ) | (11,773 | ) | ||||||
Other | (6,548 | ) | 6,431 | 704 | ||||||||
Taxable income (loss) subject to distribution requirement(c) | $ | (49,809 | ) | $ | (106,551 | ) | $ | 11,547 |
(a) | Book/tax differences in depreciation and amortization principally result from differences in depreciable lives and accelerated depreciation methods. |
(b) | For tax purposes, we record a reduction in intercompany rent between our REIT entities and TRS entities. |
(c) | The dividend distribution requirement is 90% of taxable income. |
10. | Income Taxes — (continued) |
2009 | 2008 | |||||||||||
Amount | % | Amount | % | |||||||||
Common Stock | ||||||||||||
Dividend income | $ | — | — | $ | 0.85 | (a) | 100.00 | |||||
Return of capital | — | — | — | — | ||||||||
$ | — | — | $ | 0.85 | 100.00 | |||||||
Preferred Stock – Series A | ||||||||||||
Dividend income | $ | — | — | $ | 1.463 | (a)(b) | 100.00 | |||||
Return of capital | 0.4875 | 100.00 | — | — | ||||||||
$ | 0.4875 | 100.00 | $ | 1.463 | 100.00 | |||||||
Preferred Stock – Series C | ||||||||||||
Dividend income | $ | — | — | $ | 1.50 | (a)(b) | 100.00 | |||||
Return of capital | 0.50 | 100.00 | — | — | ||||||||
$ | 0.50 | 100.00 | $ | 1.50 | 100.00 |
(a) | Dividend income in 2008 consists of ordinary dividend income and qualified dividend income. |
(b) | Fourth quarter 2008 preferred distributions were paid January 31, 2009, and were treated as 2009 distributions for tax purposes. |
11. | Capital Stock |
11. | Capital Stock — (continued) |
12. | Hotel Operating Revenue, Departmental Expenses and Other Property Operating Costs |
Year Ended December 31, | |||||||||||
2010 | 2009 | 2008 | |||||||||
Room revenue | $ | 688,357 | $ | 649,671 | $ | 788,091 | |||||
Food and beverage revenue | 137,716 | 124,769 | 154,405 | ||||||||
Other operating departments | 54,621 | 53,308 | 57,907 | ||||||||
Total hotel operating revenue | $ | 880,694 | $ | 827,748 | $ | 1,000,403 |
12. | Hotel Operating Revenue, Departmental Expenses and Other Property Operating Costs — (continued) |
Year Ended December 31, | |||||||||||
2010 | 2009 | 2008 | |||||||||
Room | $ | 185,714 | $ | 172,026 | $ | 191,838 | |||||
Food and beverage | 108,944 | 100,709 | 119,793 | ||||||||
Other operating departments | 24,801 | 24,481 | 26,571 | ||||||||
Total hotel departmental expenses | $ | 319,459 | $ | 297,216 | $ | 338,202 |
Year Ended December 31, | |||||||||||
2010 | 2009 | 2008 | |||||||||
Hotel general and administrative expense | $ | 81,898 | $ | 75,594 | $ | 86,931 | |||||
Marketing | 74,809 | 68,806 | 80,584 | ||||||||
Repair and maintenance | 47,908 | 45,357 | 50,424 | ||||||||
Utilities | 45,975 | 45,476 | 49,056 | ||||||||
Total other property operating costs | $ | 250,590 | $ | 235,233 | $ | 266,995 |
13. | Taxes, Insurance and Lease Expenses |
Year Ended December 31, | |||||||||||
2010 | 2009 | 2008 | |||||||||
Hotel lease expense(a) | $ | 36,327 | $ | 34,187 | $ | 46,264 | |||||
Land lease expense(b) | 10,210 | 9,507 | 11,500 | ||||||||
Real estate and other taxes | 30,756 | 30,481 | 28,546 | ||||||||
Property insurance, general liability insurance and other | 11,762 | 11,568 | 12,588 | ||||||||
Total taxes, insurance and lease expense | $ | 89,055 | $ | 85,743 | $ | 98,898 |
(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 $15.0 million, $13.0 million and $24.7 million for the year ended December 31, 2010, 2009, and 2008 respectively. |
(b) | Land lease expense includes percentage rent of $4.1 million, $3.6 million and $5.5 million for the year ended December 31, 2010, 2009, and 2008, respectively. |
14. | Land Leases and Hotel Rent |
Year | |||
2011 | $ | 26,992 | |
2012 | 24,135 | ||
2013 | 5,997 | ||
2014 | 5,866 | ||
2015 | 5,821 | ||
2016 and thereafter | 274,613 | ||
$ | 343,424 |
15. | Earnings Per Share |
Year Ended December 31, | |||||||||||
2010 | 2009 | 2008 | |||||||||
Numerator: | |||||||||||
Net loss attributable to FelCor | $ | (223,041 | ) | $ | (108,122 | ) | $ | (119,245 | ) | ||
Discontinued operations attributable to FelCor | 43,659 | 13,184 | 77,811 | ||||||||
Loss from continuing operations attributable to FelCor | (179,382 | ) | (94,938 | ) | (41,434 | ) | |||||
Less:Preferred dividends | (38,713 | ) | (38,713 | ) | (38,713 | ) | |||||
Dividends declared on unvested restricted stock compensation | — | — | (1,041 | ) | |||||||
Loss from continuing operations attributable to FelCor common stockholders | (218,095 | ) | (133,651 | ) | (81,188 | ) | |||||
Discontinued operations attributable to FelCor | (43,659 | ) | (13,184 | ) | (77,811 | ) | |||||
Numerator for basic and diluted loss attributable to FelCor common stockholders | $ | (261,754 | ) | $ | (146,835 | ) | $ | (158,999 | ) | ||
Denominator: | |||||||||||
Denominator for basic and diluted loss per share | 80,611 | 63,114 | 61,979 | ||||||||
Basic and diluted loss per share data: | |||||||||||
Loss from continuing operations | $ | (2.71 | ) | $ | (2.12 | ) | $ | (1.31 | ) | ||
Discontinued operations | $ | (0.54 | ) | $ | (0.21 | ) | $ | (1.26 | ) | ||
Net loss | $ | (3.25 | ) | $ | (2.33 | ) | $ | (2.57 | ) |
2010 | 2009 | 2008 | |||||||
Series A convertible preferred shares | 9,985 | 9,985 | 9,985 |
16. | Commitments, Contingencies and Related Party Transactions |
17. | Supplemental Cash Flow Disclosure |
Year Ended December 31, | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Depreciation and amortization from continuing operations | $ | 136,931 | $ | 134,860 | $ | 125,077 | ||||||
Depreciation and amortization from discontinued operations | 10,732 | 15,228 | 16,591 | |||||||||
Total depreciation and amortization expense | $ | 147,663 | $ | 150,088 | $ | 141,668 |
18. | Stock Based Compensation Plans |
18. | Stock Based Compensation Plans — (continued) |
2010 | 2009 | 2008 | ||||||||||||||||||
Shares of Underlying Options | Weighted Average Exercise Prices | Shares of Underlying Options | Weighted Average Exercise Prices | Shares of Underlying Options | Weighted Average Exercise Prices | |||||||||||||||
Outstanding at beginning of the year | 40,000 | $ | 18.05 | 40,000 | $ | 18.05 | 161,356 | $ | 21.11 | |||||||||||
Forfeited or expired | (25,000 | ) | $ | 19.50 | — | $ | — | (121,356 | ) | $ | 22.13 | |||||||||
Outstanding at end of year | 15,000 | $ | 15.62 | 40,000 | $ | 18.05 | 40,000 | $ | 18.05 | |||||||||||
Exercisable at end of year | 15,000 | $ | 15.62 | 40,000 | $ | 18.05 | 40,000 | $ | 18.05 |
Options Exercisable and Outstanding | ||||||||||||
Range of Exercise Prices | Number Outstanding at 12/31/10 | Wgtd. Avg. Life Remaining | Wgtd Avg. Exercise Price | |||||||||
$ | 15.62 | 15,000 | 0.85 | $ | 15.62 |
18. | Stock Based Compensation Plans — (continued) |
2010 | 2009 | 2008 | ||||||||||||||||||
Shares | Weighted Average Fair Market Value at Grant | Shares | Weighted Average Fair Market Value at Grant | Shares | Weighted Average Fair Market Value at Grant | |||||||||||||||
Outstanding at beginning of the year | 4,255,187 | $ | 10.90 | 2,829,330 | $ | 15.20 | 2,329,230 | $ | 15.85 | |||||||||||
Granted(a): | ||||||||||||||||||||
With immediate vesting(b) | 16,166 | $ | 4.21 | 16,000 | $ | 1.01 | 45,800 | $ | 12.20 | |||||||||||
With 3-year pro rata vesting | — | $ | — | 1,444,810 | $ | 2.64 | — | $ | — | |||||||||||
With 4-year pro rata vesting | — | $ | — | — | $ | — | 449,300 | $ | 12.20 | |||||||||||
With 5-year pro rata vesting | — | $ | — | — | $ | — | 5,000 | $ | 12.20 | |||||||||||
Forfeited | (71,264 | ) | $ | 21.71 | (34,953 | ) | $ | 12.52 | — | |||||||||||
Outstanding at end of year | 4,200,089 | $ | 10.69 | 4,255,187 | $ | 10.90 | 2,829,330 | $ | 15.20 | |||||||||||
Vested at end of year | (2,645,272 | ) | $ | 13.00 | (1,774,839 | ) | $ | 14.06 | (1,483,976 | ) | $ | 14.09 | ||||||||
Unvested at end of year | 1,554,817 | $ | 6.76 | 2,480,348 | $ | 8.65 | 1,345,354 | $ | 16.44 |
(a) | All shares granted are issued out of treasury. |
(b) | Shares awarded to directors. |
19. | Employee Benefits |
20. | Segment Information |
Revenue For the Year Ended December 31, | Investment in Hotel Assets as of December 31, | |||||||||||||||||||||||
2010 | 2009 | 2008 | 2010 | 2009 | 2008 | |||||||||||||||||||
California | $ | 224,155 | $ | 211,124 | $ | 258,748 | $ | 505,753 | $ | 527,345 | $ | 526,770 | ||||||||||||
Florida | 136,506 | 138,709 | 168,621 | 348,823 | 405,479 | 455,636 | ||||||||||||||||||
Texas | 86,131 | 84,430 | 102,583 | 175,483 | 203,841 | 214,294 | ||||||||||||||||||
Georgia | 51,734 | 48,930 | 58,345 | 109,677 | 126,118 | 126,851 | ||||||||||||||||||
Other states | 356,412 | 323,023 | 382,418 | 795,596 | 859,852 | 904,105 | ||||||||||||||||||
Canada | 28,930 | 24,375 | 32,609 | 50,447 | 57,759 | 51,370 | ||||||||||||||||||
Total | $ | 883,868 | $ | 830,591 | $ | 1,003,324 | $ | 1,985,779 | $ | 2,180,394 | $ | 2,279,026 |
21. | Noncontrolling Interests |
Year Ended December 31, | ||||||||
2010 | 2009 | |||||||
Balance at beginning of period | $ | 1,062 | $ | 545 | ||||
Redemption value allocation | 1,815 | 1,152 | ||||||
Comprehensive loss: | ||||||||
Foreign exchange translation | 8 | 37 | ||||||
Net loss | (881 | ) | (672 | ) | ||||
Balance at end of period | $ | 2,004 | $ | 1,062 |
22. | Quarterly Operating Results (unaudited) |
2010 | First Quarter | Second Quarter | Third Quarter | Fourth Quarter | ||||||||||||
Total revenues | $ | 208,426 | $ | 228,711 | $ | 225,658 | $ | 221,073 | ||||||||
Income (loss) from continuing operations | $ | (38,395 | ) | $ | 23,084 | $ | (62,299 | ) | $ | (103,481 | ) | |||||
Discontinued operations | $ | (24,547 | ) | $ | (1,094 | ) | $ | (26,981 | ) | $ | 7,876 | |||||
Net income (loss) attributable to FelCor | $ | (62,388 | ) | $ | 21,614 | $ | (88,810 | ) | $ | (93,457 | ) | |||||
Net income (loss) attributable to FelCor common stockholders | $ | (72,066 | ) | $ | 11,936 | $ | (98,488 | ) | $ | (103,136 | ) | |||||
Comprehensive income (loss) attributable to FelCor | $ | (60,318 | ) | $ | 18,895 | $ | (86,889 | ) | $ | (91,800 | ) | |||||
Basic per common share data: | ||||||||||||||||
Net income (loss) from continuing operations | $ | (0.75 | ) | $ | 0.19 | $ | (0.75 | ) | $ | (1.17 | ) | |||||
Discontinued operations | $ | (0.38 | ) | $ | (0.02 | ) | $ | (0.28 | ) | $ | 0.09 | |||||
Net income (loss) | $ | (1.14 | ) | $ | 0.17 | $ | (1.04 | ) | $ | (1.08 | ) | |||||
Basic weighted average common shares outstanding | 63,475 | 66,531 | 95,034 | 95,490 | ||||||||||||
Diluted weighted average common shares outstanding | 63,475 | 66,531 | 95,034 | 95,490 |
2009 | First Quarter | Second Quarter | Third Quarter | Fourth Quarter | ||||||||||||
Total revenues | $ | 208,392 | $ | 215,358 | $ | 206,687 | $ | 200,154 | ||||||||
Loss from continuing operations | $ | (18,221 | ) | $ | (10,565 | ) | $ | (19,293 | ) | $ | (47,767 | ) | ||||
Discontinued operations | $ | (3,201 | ) | $ | (403 | ) | $ | (6,181 | ) | $ | (3,460 | ) | ||||
Net loss attributable to FelCor | $ | (21,064 | ) | $ | (11,195 | ) | $ | (25,140 | ) | $ | (50,723 | ) | ||||
Net loss attributable to FelCor common stockholders | $ | (30,742 | ) | $ | (20,873 | ) | $ | (34,818 | ) | $ | (60,402 | ) | ||||
Comprehensive income (loss) attributable to FelCor | $ | (22,765 | ) | $ | (7,055 | ) | $ | (20,455 | ) | $ | (49,666 | ) | ||||
Basic per common share data: | ||||||||||||||||
Net loss from continuing operations | $ | (0.44 | ) | $ | (0.32 | ) | $ | (0.45 | ) | $ | (0.90 | ) | ||||
Discontinued operations | $ | (0.05 | ) | $ | (0.01 | ) | $ | (0.10 | ) | $ | (0.05 | ) | ||||
Net loss | $ | (0.49 | ) | $ | (0.33 | ) | $ | (0.55 | ) | $ | (0.96 | ) | ||||
Basic weighted average common shares outstanding | 62,989 | 63,101 | 63,086 | 63,087 | ||||||||||||
Diluted weighted average common shares outstanding | 62,989 | 63,101 | 63,086 | 63,087 |
Initial Cost | Cost Capitalized Subsequent to Acquisition | Gross Amounts at Which Carried at Close of Period | Accumulated Depreciation Buildings & Improvements | Life Upon Which Depreciation is Computed | ||||||||||||||||||||||||||||||||||||||
Location | Encumbrances | Land | Building and Improvements | Land | Building and Improvements | Land | Building and Improvements | Total | Year Opened | Date Acquired | ||||||||||||||||||||||||||||||||
Birmingham, AL (a) | $ | 17,048 | $ | 2,843 | $ | 29,286 | $ | — | $ | 4,224 | $ | 2,843 | $ | 33,510 | $ | 36,353 | $ | 11,703 | 1987 | 1/3/1996 | 15 - 40 Yrs | |||||||||||||||||||||
Phoenix - Biltmore, AZ (a) | 18,850 | 4,694 | 38,998 | — | 3,653 | 4,694 | 42,651 | 47,345 | 15,337 | 1985 | 1/3/1996 | 15 - 40 Yrs | ||||||||||||||||||||||||||||||
Phoenix – Crescent, AZ (b) | — | 3,608 | 29,583 | — | 1,774 | 3,608 | 31,357 | 34,965 | 10,512 | 1986 | 6/30/1997 | 15 - 40 Yrs | ||||||||||||||||||||||||||||||
Phoenix – Tempe, AZ (a) | 22,944 | 3,951 | 34,371 | — | 2,831 | 3,951 | 37,202 | 41,153 | 11,356 | 1986 | 5/4/1998 | 15 - 40 Yrs | ||||||||||||||||||||||||||||||
Anaheim – North, CA (a) | 23,595 | 2,548 | 14,832 | — | 1,900 | 2,548 | 16,732 | 19,280 | 6,058 | 1987 | 1/3/1996 | 15 - 40 Yrs | ||||||||||||||||||||||||||||||
Dana Point – Doheny Beach, CA (c) | 18,125 | 1,787 | 15,545 | — | 3,349 | 1,787 | 18,894 | 20,681 | 6,262 | 1992 | 2/21/1997 | 15 - 40 Yrs | ||||||||||||||||||||||||||||||
Indian Wells – Esmeralda Resort & Spa, CA (d) | — | 30,948 | 73,507 | — | 1,784 | 30,948 | 75,291 | 106,239 | 5,687 | 1989 | 12/16/2007 | 15 - 40 Yrs | ||||||||||||||||||||||||||||||
Los Angeles – International Airport – South, CA (a) | — | 2,660 | 17,997 | — | 1,863 | 2,660 | 19,860 | 22,520 | 7,785 | 1985 | 3/27/1996 | 15 - 40 Yrs | ||||||||||||||||||||||||||||||
Milpitas – Silicon Valley, CA(a) | 11,085 | 4,021 | 23,677 | — | 3,590 | 4,021 | 27,267 | 31,288 | 9,755 | 1987 | 1/3/1996 | 15 - 40 Yrs | ||||||||||||||||||||||||||||||
Napa Valley, CA (a) | 15,508 | 2,218 | 14,205 | — | 2,853 | 2,218 | 17,058 | 19,276 | 5,926 | 1985 | 5/8/1996 | 15 - 40 Yrs | ||||||||||||||||||||||||||||||
Oxnard - Mandalay Beach – Hotel & Resort, CA (a) | 34,381 | 2,930 | 22,125 | — | 7,845 | 2,930 | 29,970 | 32,900 | 9,805 | 1986 | 5/8/1996 | 15 - 40 Yrs | ||||||||||||||||||||||||||||||
San Diego – On the Bay, CA (e) | (j) | — | 68,229 | — | 8,659 | — | 76,888 | 76,888 | 28,644 | 1965 | 7/28/1998 | 15 - 40 Yrs | ||||||||||||||||||||||||||||||
San Francisco – Airport/Burlingame, CA (a) | (j) | — | 39,929 | — | 2,172 | — | 42,101 | 42,101 | 15,493 | 1986 | 11/6/1995 | 15 - 40 Yrs | ||||||||||||||||||||||||||||||
San Francisco – Airport/South San Francisco, CA (a) | 24,312 | 3,418 | 31,737 | — | 3,667 | 3,418 | 35,404 | 38,822 | 12,791 | 1988 | 1/3/1996 | 15 - 40 Yrs | ||||||||||||||||||||||||||||||
San Francisco - Fisherman’s Wharf, CA (e) | (j) | — | 61,883 | — | 3,064 | — | 64,947 | 64,947 | 31,933 | 1970 | 7/28/1998 | 15 - 40 Yrs | ||||||||||||||||||||||||||||||
San Francisco –Union Square, CA (f) | (j) | 8,466 | 73,684 | (434 | ) | 48,475 | 8,032 | 122,159 | 130,191 | 28,291 | 1970 | 7/28/1998 | 15 - 40 Yrs | |||||||||||||||||||||||||||||
Santa Barbara – Goleta, CA (e) | 14,946 | 1,683 | 14,647 | 4 | 1,579 | 1,687 | 16,226 | 17,913 | 4,914 | 1969 | 7/28/1998 | 15 - 40 Yrs | ||||||||||||||||||||||||||||||
Santa Monica Beach – at the Pier, CA (e) | 27,197 | 10,200 | 16,580 | — | 337 | 10,200 | 16,917 | 27,117 | 2,884 | 1967 | 3/11/2004 | 15 - 40 Yrs | ||||||||||||||||||||||||||||||
Toronto - Airport, Canada (e) | (j) | — | 21,041 | — | 17,556 | — | 38,597 | 38,597 | 12,942 | 1970 | 7/28/1998 | 15 - 40 Yrs | ||||||||||||||||||||||||||||||
Toronto - Yorkdale, Canada (e) | (j) | 1,566 | 13,633 | 829 | 15,199 | 2,395 | 28,832 | 31,227 | 10,326 | 1970 | 7/28/1998 | 15 - 40 Yrs | ||||||||||||||||||||||||||||||
Wilmington, DE (c) | 7,800 | 1,379 | 12,487 | — | 11,190 | 1,379 | 23,677 | 25,056 | 7,485 | 1972 | 3/20/1998 | 15 - 40 Yrs | ||||||||||||||||||||||||||||||
Boca Raton, FL (a) | 10,875 | 1,868 | 16,253 | — | 3,163 | 1,868 | 19,416 | 21,284 | 7,724 | 1989 | 2/28/1996 | 15 - 40 Yrs | ||||||||||||||||||||||||||||||
Deerfield Beach – Resort & Spa, FL (a) | 28,420 | 4,523 | 29,443 | 68 | 6,131 | 4,591 | 35,574 | 40,165 | 12,243 | 1987 | 1/3/1996 | 15 - 40 Yrs |
Initial Cost | Cost Capitalized Subsequent to Acquisition | Gross Amounts at Which Carried at Close of Period | Accumulated Depreciation Buildings & Improvements | Life Upon Which Depreciation is Computed | |||||||||||||||||||||||||||||||||||||
Location | Encumbrances | Land | Building and Improvements | Land | Building and Improvements | Land | Building and Improvements | Total | Year Opened | Date Acquired | |||||||||||||||||||||||||||||||
Ft. Lauderdale – 17th Street, FL (a) | $ | 19,691 | $ | 5,329 | $ | 47,850 | (163 | ) | $ | 4,955 | $ | 5,166 | $ | 52,805 | $ | 57,971 | $ | 19,224 | 1986 | 1/3/1996 | 15 - 40 Yrs | ||||||||||||||||||||
Ft. Lauderdale – Cypress Creek, FL (b) | 13,862 | 3,009 | 26,177 | — | 2,592 | 3,009 | 28,769 | 31,778 | 9,065 | 1986 | 5/4/1998 | 15 - 40 Yrs | |||||||||||||||||||||||||||||
Jacksonville – Baymeadows, FL (a) | 23,590 | 1,130 | 9,608 | — | 7,993 | 1,130 | 17,601 | 18,731 | 6,410 | 1986 | 7/28/1994 | 15 - 40 Yrs | |||||||||||||||||||||||||||||
Miami – International Airport, FL (a) | 18,292 | 4,135 | 24,950 | — | 5,954 | 4,135 | 30,904 | 35,039 | 10,509 | 1983 | 1/3/1996 | 15 - 40 Yrs | |||||||||||||||||||||||||||||
Orlando – International Airport, FL (e) | 8,670 | 2,549 | 22,188 | 6 | 3,011 | 2,555 | 25,199 | 27,754 | 8,209 | 1984 | 7/28/1998 | 15 - 40 Yrs | |||||||||||||||||||||||||||||
Orlando – International Drive South/Convention, FL (a) | 19,975 | 1,632 | 13,870 | — | 3,067 | 1,632 | 16,937 | 18,569 | 6,737 | 1985 | 7/28/1994 | 15 - 40 Yrs | |||||||||||||||||||||||||||||
Orlando (North), FL (a) | (j) | 1,673 | 14,218 | (18 | ) | 8,332 | 1,655 | 22,550 | 24,205 | 8,745 | 1985 | 7/28/1994 | 15 - 40 Yrs | ||||||||||||||||||||||||||||
Orlando – Walt Disney World Resort, FL (c) | (j) | — | 28,092 | — | 1,639 | — | 29,731 | 29,731 | 11,653 | 1987 | 7/28/1997 | 15 - 40 Yrs | |||||||||||||||||||||||||||||
St. Petersburg – Vinoy Resort & Golf Club, FL (d) | — | — | 100,823 | — | 3,715 | — | 104,538 | 104,538 | 8,492 | 1925 | 12/16/2007 | 15 - 40 Yrs | |||||||||||||||||||||||||||||
Tampa – Tampa Bay, FL (c) | 12,950 | 2,142 | 18,639 | 1 | 2,828 | 2,143 | 21,467 | 23,610 | 7,296 | 1986 | 7/28/1997 | 15 - 40 Yrs | |||||||||||||||||||||||||||||
Atlanta – Airport, GA (a) | 11,947 | 2,568 | 22,342 | — | 2,922 | 2,568 | 25,264 | 27,832 | 7,718 | 1989 | 5/4/1998 | 15 - 40 Yrs | |||||||||||||||||||||||||||||
Atlanta – Buckhead, GA (a) | 34,584 | 7,303 | 38,996 | (300 | ) | 2,811 | 7,003 | 41,807 | 48,810 | 14,538 | 1988 | 10/17/1996 | 15 - 40 Yrs | ||||||||||||||||||||||||||||
Atlanta – Galleria, GA (b) | 17,328 | 5,052 | 28,507 | — | 1,911 | 5,052 | 30,418 | 35,470 | 10,220 | 1990 | 6/30/1997 | 15 - 40 Yrs | |||||||||||||||||||||||||||||
Atlanta – Gateway-Atlanta Airport, GA (b) | (j) | 5,113 | 22,857 | — | 1,889 | 5,113 | 24,746 | 29,859 | 8,063 | 1986 | 6/30/1997 | 15 - 40 Yrs | |||||||||||||||||||||||||||||
Chicago – Gateway – O’Hare, IL (b) | — | 8,178 | 37,043 | — | 4,263 | 8,178 | 41,306 | 49,484 | 12,804 | 1994 | 6/30/1997 | 15 - 40 Yrs | |||||||||||||||||||||||||||||
Indianapolis – North, IN (a) | 11,321 | 5,125 | 13,821 | — | 7,492 | 5,125 | 21,313 | 26,438 | 9,195 | 1986 | 8/1/1996 | 15 - 40 Yrs | |||||||||||||||||||||||||||||
Lexington – Lexington Green, KY (g) | 17,721 | 1,955 | 13,604 | — | 870 | 1,955 | 14,474 | 16,429 | 5,216 | 1987 | 1/10/1996 | 15 - 40 Yrs | |||||||||||||||||||||||||||||
Baton Rouge, LA (a) | 12,079 | 2,350 | 19,092 | 1 | 2,335 | 2,351 | 21,427 | 23,778 | 7,711 | 1985 | 1/3/1996 | 15 - 40 Yrs | |||||||||||||||||||||||||||||
New Orleans – Convention Center, LA (a) | 27,770 | 3,647 | 31,993 | — | 8,438 | 3,647 | 40,431 | 44,078 | 15,451 | 1984 | 12/1/1994 | 15 - 40 Yrs | |||||||||||||||||||||||||||||
New Orleans – French Quarter, LA (e) | (j) | — | 50,732 | — | 9,473 | — | 60,205 | 60,205 | 19,053 | 1969 | 7/28/1998 | 15 - 40 Yrs | |||||||||||||||||||||||||||||
Boston – at Beacon Hill, MA(e) | (j) | — | 45,192 | — | 9,028 | — | 54,220 | 54,220 | 22,000 | 1968 | 7/28/1998 | 15 - 40 Yrs | |||||||||||||||||||||||||||||
Boston – Copley Plaza, MA(h) | — | 27,600 | 62,500 | — | 44 | 27,600 | 62,544 | 90,144 | 521 | 1912 | 8/18/2010 | 15 - 40 Yrs | |||||||||||||||||||||||||||||
Boston – Marlborough, MA (a) | 20,544 | 948 | 8,143 | 761 | 14,608 | 1,709 | 22,751 | 24,460 | 7,770 | 1988 | 6/30/1995 | 15 - 40 Yrs |
Initial Cost | Cost Capitalized Subsequent to Acquisition | Gross Amounts at Which Carried at Close of Period | Accumulated Depreciation Buildings & Improvements | Life Upon Which Depreciation is Computed | ||||||||||||||||||||||||||||||||||||||
Location | Encumbrances | Land | Building and Improvements | Land | Building and Improvements | Land | Building and Improvements | Total | Year Opened | Date Acquired | ||||||||||||||||||||||||||||||||
Baltimore – at BWI Airport, MD(a) | $ | 21,229 | $ | 2,568 | $ | 22,433 | $ | (2 | ) | $ | 3,694 | $ | 2,566 | $ | 26,127 | 28,693 | 8,748 | 1987 | 3/20/1997 | 15 - 40 Yrs | ||||||||||||||||||||||
Bloomington, MN (a) | 18,350 | 2,038 | 17,731 | — | 3,111 | 2,038 | 20,842 | 22,880 | 6,851 | 1980 | 2/1/1997 | 15 - 40 Yrs | ||||||||||||||||||||||||||||||
Minneapolis – Airport, MN (a) | 19,517 | 5,417 | 36,508 | 24 | 2,125 | 5,441 | 38,633 | 44,074 | 14,210 | 1986 | 11/6/1995 | 15 - 40 Yrs | ||||||||||||||||||||||||||||||
St Paul – Downtown, MN (a) | — | 1,156 | 17,315 | — | 1,726 | 1,156 | 19,041 | 20,197 | 6,902 | 1983 | 11/15/1995 | 15 - 40 Yrs | ||||||||||||||||||||||||||||||
Charlotte – SouthPark, NC (c) | 18,152 | 1,458 | 12,681 | — | 3,245 | 1,458 | 15,926 | 17,384 | 3,638 | N/A | 7/12/2002 | 15 - 40 Yrs | ||||||||||||||||||||||||||||||
Raleigh/Durham, NC (c) | 17,290 | 2,124 | 18,476 | — | 2,307 | 2,124 | 20,783 | 22,907 | 6,897 | 1987 | 7/28/1997 | 15 - 40 Yrs | ||||||||||||||||||||||||||||||
Philadelphia – Historic District, PA (e) | 26,298 | 3,164 | 27,535 | 7 | 9,403 | 3,171 | 36,938 | 40,109 | 12,553 | 1972 | 7/28/1998 | 15 - 40 Yrs | ||||||||||||||||||||||||||||||
Philadelphia – Society Hill, PA(b) | 43,184 | 4,542 | 45,121 | — | 7,872 | 4,542 | 52,993 | 57,535 | 16,560 | 1986 | 10/1/1997 | 15 - 40 Yrs | ||||||||||||||||||||||||||||||
Pittsburgh – at University Center (Oakland), PA (e) | 14,753 | — | 25,031 | — | 3,018 | — | 28,049 | 28,049 | 9,028 | 1988 | 11/1/1998 | 15 - 40 Yrs | ||||||||||||||||||||||||||||||
Charleston – Mills House, SC(e) | 25,538 | 3,251 | 28,295 | 7 | 5,021 | 3,258 | 33,316 | 36,574 | 9,615 | 1982 | 7/28/1998 | 15 - 40 Yrs | ||||||||||||||||||||||||||||||
Myrtle Beach – Oceanfront Resort, SC (a) | (j) | 2,940 | 24,988 | — | 5,501 | 2,940 | 30,489 | 33,429 | 9,946 | 1987 | 12/5/1996 | 15 - 40 Yrs | ||||||||||||||||||||||||||||||
Myrtle Beach Resort (g) | 21,296 | 9,000 | 19,844 | 6 | 29,520 | 9,006 | 49,364 | 58,370 | 9,163 | 1974 | 7/23/2002 | 15 - 40 Yrs | ||||||||||||||||||||||||||||||
Nashville – Airport – Opryland Area, TN (a) | 18,698 | 1,118 | 9,506 | — | 1,502 | 1,118 | 11,008 | 12,126 | 4,930 | 1985 | 7/28/1994 | 15 - 40 Yrs | ||||||||||||||||||||||||||||||
Nashville – Opryland – Airport (Briley Parkway), TN (e) | (j) | — | 27,734 | — | 3,271 | — | 31,005 | 31,005 | 12,802 | 1981 | 7/28/1998 | 15 - 40 Yrs | ||||||||||||||||||||||||||||||
Austin, TX (c) | 8,510 | 2,508 | 21,908 | — | 2,860 | 2,508 | 24,768 | 27,276 | 8,574 | 1987 | 3/20/1997 | 15 - 40 Yrs | ||||||||||||||||||||||||||||||
Corpus Christi, TX (a) | 7,501 | 1,113 | 9,618 | 51 | 4,491 | 1,164 | 14,109 | 15,273 | 4,951 | 1984 | 7/19/1995 | 15 - 40 Yrs | ||||||||||||||||||||||||||||||
Dallas – DFW International Airport South, TX (a) | 19,302 | 4,041 | 35,156 | — | 1,167 | 4,041 | 36,323 | 40,364 | 10,907 | 1985 | 7/28/1998 | 15 - 40 Yrs | ||||||||||||||||||||||||||||||
Dallas – Love Field, TX (a) | 16,500 | 1,934 | 16,674 | — | 3,344 | 1,934 | 20,018 | 21,952 | 7,353 | 1986 | 3/29/1995 | 15 - 40 Yrs | ||||||||||||||||||||||||||||||
Dallas – Market Center, TX (a) | (j) | 2,560 | 23,751 | — | 2,388 | 2,560 | 26,139 | 28,699 | 8,543 | 1980 | 6/30/1997 | 15 - 40 Yrs | ||||||||||||||||||||||||||||||
Dallas – Park Central, TX (i) | — | 4,513 | 43,125 | 762 | 7,865 | 5,275 | 50,990 | 56,265 | 16,558 | 1983 | 6/30/1997 | 15 - 40 Yrs | ||||||||||||||||||||||||||||||
Houston - Medical Center, TX(e) | 22,579 | — | 22,027 | — | 5,004 | — | 27,031 | 27,031 | 7,980 | 1984 | 7/28/1998 | 15 - 40 Yrs | ||||||||||||||||||||||||||||||
San Antonio - International Airport, TX (e) | 23,800 | 3,351 | 29,168 | (185 | ) | 3,915 | 3,166 | 33,083 | 36,249 | 10,590 | 1981 | 7/28/1998 | 15 - 40 Yrs | |||||||||||||||||||||||||||||
Burlington Hotel & Conference Center, VT (b) | 30,710 | 3,136 | 27,283 | (2 | ) | 2,751 | 3,134 | 30,034 | 33,168 | 9,665 | 1967 | 12/4/1997 | 15 - 40 Yrs | |||||||||||||||||||||||||||||
$ | 918,617 | $ | 248,681 | $ | 1,976,817 | $ | 1,423 | $ | 382,129 | $ | 250,104 | $ | 2,358,946 | $ | 2,609,050 | $ | 729,420 |
Year Ended December 31, | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Reconciliation of Land and Buildings and Improvements | ||||||||||||
Balance at beginning of period | $ | 2,541,962 | $ | 2,586,034 | $ | 2,542,784 | ||||||
Additions during period: | ||||||||||||
Acquisitions | 90,100 | — | — | |||||||||
Improvements | 22,863 | 51,895 | 43,250 | |||||||||
Deductions during period: | ||||||||||||
Disposition of properties | — | (95,967 | ) | — | ||||||||
Foreclosures | (45,875 | ) | — | — | ||||||||
Balance at end of period before impairment charges | 2,609,050 | 2,541,962 | 2,586,034 | |||||||||
Cumulative impairment charges on real estate assets owned at end of period | (179,477 | ) | (49,680 | ) | (101,424 | ) | ||||||
Balance at end of period | $ | 2,429,573 | $ | 2,492,282 | $ | 2,484,610 | ||||||
Reconciliation of Accumulated Depreciation | ||||||||||||
Balance at beginning of period | $ | 672,160 | $ | 629,920 | $ | 567,954 | ||||||
Additions during period: | ||||||||||||
Depreciation for the period | 71,821 | 69,408 | 61,966 | |||||||||
Deductions during period: | ||||||||||||
Disposition of properties | (14,561 | ) | (27,168 | ) | — | |||||||
Balance at end of period | $ | 729,420 | $ | 672,160 | $ | 629,920 |
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