EX-99.2 3 d22354exv99w2.htm SUPPLEMENTAL INFORMATION exv99w2
 

Exhibit 99.2

FelCor Lodging Trust Incorporated
Supplemental Information
Three Months and Year Ended December 31, 2004

Date of Issuance February 9, 2005

All dollar amounts shown in this report are in U.S. dollars unless otherwise noted.
This Supplemental Information is neither an offer to sell nor a solicitation to buy any securities of
FelCor. Any offers to sell or solicitations to buy any securities of FelCor shall be made only by
means of a prospectus.

 

 

FelCor Lodging Trust Incorporated
Supplemental Information
Three Months and Year Ended December 31, 2004

TABLE OF CONTENTS

         
    PAGE  
CORPORATE DATA
        
About the Company
     3  
Board of Directors and Executive Officers
     4  
Equity Research Coverage
     5  
FINANCIAL HIGHLIGHTS
        
Supplemental Financial Data
     6  
Consolidated Statements of Operations
     7  
Discontinued Operations
     8  
Non-GAAP Financial Measures
     8  
Reconciliation of Net Loss to FFO and Adjusted FFO
     9  
Reconciliation of Net Loss to EBITDA, Adjusted EBITDA and Same-Store EBITDA
     10  
Hotel Operating Profit and Hotel Operating Margin
     11  
Hotel Operating Expense Composition
     11  
Debt Summary
     15  
PORTFOLIO DATA
        
Portfolio Distribution
     17  
Detailed Operating Statistics by Brand
     18  
Detailed Operating Statistics for FelCor’s Top Markets
     19  
Other Performance Statistics
     20  
Hotel Portfolio Information
     21  
Hotel Portfolio Listing
     24  

This supplement contains registered trademarks owned or licensed by companies other than us, which may include, but are not limited to, Candlewood Suites®, Courtyard by Marriott®, Crowne Plaza®, Disneyland®, Doubletree®, Doubletree Guest Suites®, Embassy Suites Hotels®, Fairfield Inn®, Four Points® by Sheraton, Hampton Inn®, Harvey Hotel®, Harvey Suites®, Hilton®, Hilton Grand Vacations Company®, Hilton Suites®, Holiday Inn®, Holiday Inn & Suites®, Holiday Inn Express®, Holiday Inn Express & Suites®, Holiday Inn Select®, Homewood Suites® by Hilton, InterContinental®, Priority Club®, Sheraton®, Sheraton Suites®, St. Regis®, Staybridge Suites®, The Luxury Collection®, W®, Walt Disney World®, Worlds of Fun®, Westin®, and Wyndham®.

With the exception of historical information, the matters discussed in this supplement include “forward looking statements” within the meaning of the federal securities laws. Forward looking statements are not guarantees of future performance. Numerous risks and uncertainties, and the occurrence of future events, may cause actual results to differ materially from those currently anticipated. General economic conditions, including the anticipated continuation of the current economic recovery, the impact of U.S. military involvement in the Middle East and elsewhere, future acts of terrorism, the impact on the travel industry of increased security precautions, the availability of capital, the ability to effect sales of non-strategic hotels at anticipated prices, and numerous other factors may affect future results, performance and achievements. Certain of these risks and uncertainties are described in greater detail in our filings with the Securities and Exchange Commission. Although we believe our current expectations to be based upon reasonable assumptions, we can give no assurance that our expectations will be attained or that actual results will not differ materially.

2

 

FelCor Lodging Trust Incorporated
Supplemental Information
Three Months and Year Ended December 31, 2004

CORPORATE DATA
About the Company

In 1994, FelCor Lodging Trust Incorporated went public as a real estate investment trust (REIT) with six hotels and a market capitalization of $120 million. At December 31, 2004, FelCor was the nation’s second largest lodging REIT and the owner of the largest number of full service, all-suite hotels in the U.S. FelCor’s portfolio was comprised of 144 consolidated hotels, including 143 hotels in continuing operations and one hotel that was “held for sale” and included in discontinued operations. For the 143 hotels included in continuing operations, the operating revenues and expenses are reflected in FelCor’s consolidated statements of operations because of our ownership interests of the operating lessees of these hotels. FelCor also owned 50% joint venture interests in five hotels whose operations were accounted for using the equity method. FelCor owned 69 full service, all-suite hotels, and was the largest owner of Embassy Suites Hotels and independently owned Doubletree Guest Suites hotels. FelCor’s portfolio also included 65 hotels in the upscale and full service segments. The Company’s hotels were located in 31 states and Canada. FelCor had a market capitalization of approximately $3.2 billion at December 31, 2004.

Strategy

FelCor’s hotels are generally managed by the brand owners such as Hilton Hotels Corporation, InterContinental Hotels Group, and Starwood Hotels & Resorts. FelCor is competitively positioned to deliver superior long-term stockholder returns through its strong management team, diversified upscale and full-service hotels, and strategic brand manager alliances.

Stock and Debt Ratings

         
    Senior Unsecured Debt   Preferred Stock
Moody’s
Standard & Poors
  B1
B- 		  B3
CCC

Stock Exchange Listing
Common Stock (NYSE: FCH)
$1.95 Series A Cumulative Convertible Preferred Stock (NYSE: FCHPRA)
9% Series B Cumulative Redeemable Preferred Stock (NYSE: FCHPRB)

Fiscal Year End
December 31

Number of employees
70

Corporate Headquarters
545 E. John Carpenter Frwy., Suite 1300
Irving, TX 75062
(972) 444-4900

     
Investor Relations Contact   Media Contact
Stephen A. Schafer   Monica L. Hildebrand
Vice President of Investor Relations   Vice President of Communications
(972) 444-4912   (972) 444-4917
sschafer@felcor.com   mhildebrand@felcor.com

Information Request
information@felcor.com

3

 

FelCor Lodging Trust Incorporated
Supplemental Information
Three Months and Year Ended December 31, 2004

Board of Directors

Donald J. McNamara, Chairman of the Board
Principal, The Hampstead Group

Thomas J. Corcoran, Jr.
President and Chief Executive Officer, FelCor Lodging Trust Incorporated

Melinda J. Bush, C.H.A.
Chairman and Chief Executive Officer, HRW Holdings, LLC

Richard S. Ellwood
President, R.S. Ellwood and Co., Inc.

Richard O. Jacobson
Chairman of the Board, Jacobson Warehouse Company, Inc.

David C. Kloeppel
Executive Vice President and Chief Financial Officer, Gaylord Entertainment Company

Charles A. Ledsinger, Jr.
President and Chief Executive Officer, Choice Hotels International

Robert H. Lutz, Jr.
President, RL Investments, Inc.

Robert A. Mathewson
President, RGC, Inc.

Michael D. Rose
Chairman, Gaylord Entertainment Company

Executive Officers

Thomas J. Corcoran, Jr., President and Chief Executive Officer

Richard A. Smith, Executive Vice President and Chief Financial Officer

Michael A. DeNicola, Executive Vice President and Chief Investment Officer

Lawrence D. Robinson, Executive Vice President, General Counsel and Secretary

Jack Eslick, Senior Vice President, Director of Asset Management

Lester C. Johnson, Senior Vice President, Controller and Principal Accounting Officer

June C. McCutchen, Senior Vice President, Director of Design and Construction

Larry J. Mundy, Senior Vice President, Director of Business Initiatives and Assistant General Counsel

Andrew J. Welch, Senior Vice President and Treasurer

4

 

FelCor Lodging Trust Incorporated
Supplemental Information
Three Months and Year Ended December 31, 2004

Equity Research Coverage

         
Firm   Analyst   Telephone
Calyon Securities (USA)
  Bryan A. Maher   (212) 408-5649
 
        
Deutsche Bank Securities
  Marc J. Falcone   (212) 469-7417
 
        
Friedman, Billings, Ramsey, & Co.
  David Loeb   (703) 469-1289
 
        
Green Street Advisors
  John V. Arabia   (949) 640-8780
 
        
JPMorgan Securities
  Harry C. Curtis   (212) 622-6610
 
        
Legg Mason
  Rod F. Petrik   (410) 454-4131
 
        
Lehman Brothers
  Felicia Kantor Hendrix   (212) 526-5562
 
        
Merrill Lynch
  David W. Anders   (212) 449-2739
 
        
Prudential Equity Group
  James W. Sullivan   (212) 778-2515
 
        
Smith Barney Citigroup
  Michael J. Rietbrock   (212) 816-7777
 
        
UBS
  William B. Truelove   (212) 713-3098
 
        
Wachovia Securities
  Jeffrey J. Donnelly   (617) 603-4262

5

 

FelCor Lodging Trust Incorporated
Supplemental Information
Three Months and Year Ended December 31, 2004

FINANCIAL HIGHLIGHTS

Supplemental Financial Data
(in thousands, except per share information, ratios and percentages)

                 
    December 31,   December 31,
    2004   2003
Total Enterprise Value
                
Common shares outstanding
     59,817       59,120  
Units outstanding
     2,788       3,034  
 
                
Combined shares and units outstanding
     62,605       62,154  
Common stock price at end of period
   $ 14.65     $ 11.08  
 
                
Common equity capitalization
   $ 917,163     $ 688,666  
Series A preferred stock
     309,362       149,512  
Series B preferred stock
     169,395       169,395  
Consolidated debt
     1,767,122       2,037,355  
Minority interest of consolidated debt
     (5,618 )     (25,153 )
Pro rata share of unconsolidated debt(a)
     109,146       106,899  
Cash and cash equivalents
     (119,310 )     (231,885 )
 
                
Total enterprise value (TEV)
   $ 3,147,260     $ 2,894,789  
 
                
TEV per room(b)
   $ 84     $ 69  
Pro rata rooms owned
     37,338       42,107  
Dividends Per Share
                
Dividends declared (year ended):
                
Common
   $ —     $ —  
Series A preferred stock
     1.95       1.95  
Series B preferred stock (depository shares)
     2.25       2.25  
Selected Balance Sheet Data
                
Investment in hotels, at cost(c)
   $ 4,167,933     $ 4,234,732  
Total cash and cash equivalents
     119,310       231,885  
Total assets
     3,317,658       3,590,893  
Total debt
     1,767,122       2,037,355  
Total stockholders’ equity
     1,330,323       1,296,272  
Total stockholders equity less preferred equity
     851,566       977,365  
Book value per common share outstanding
     14.24       16.53  

(a)   Excludes our pro rata share of debt related to the construction of a residential condominium project in Myrtle Beach, South Carolina, at December 31, 2003. This debt was retired in September 2004.
 
(b)   Based on pro rata ownership.

(c)   Investment in hotels, at cost, is defined as consolidated hotel book value (after impairment charges but before accumulated depreciation) plus our pro rata share of unconsolidated investment in hotels before accumulated depreciation.

6

 

FelCor Lodging Trust Incorporated
Supplemental Information
Three Months and Year Ended December 31, 2004

Consolidated Statements of Operations
(in thousands, except per share data)

                                 
    Three Months Ended     Year Ended  
    December 31,     December 31,  
    2004     2003     2004     2003  
Revenues:
                                
Hotel operating revenue:
                                
Room
   $ 220,964     $ 209,291     $ 945,938     $ 883,834  
Food and beverage
     48,888       46,535       180,398       167,883  
Other operating departments
     14,638       13,949       62,527       59,011  
Retail space rental and other revenue
     131       184       2,721       1,022  
 
                        
Total revenues
     284,621       269,959       1,191,584       1,111,750  
 
                        
Expenses:
                                
Hotel departmental expenses:
                                
Room
     62,537       59,454       257,016       234,242  
Food and beverage
     37,624       36,675       143,079       133,412  
Other operating departments
     7,842       6,608       31,887       27,024  
Other property related costs
     87,638       82,463       349,274       324,202  
Management and franchise fees
     14,090       14,224       61,579       58,711  
Taxes, insurance and lease expense
     24,898       26,870       114,648       117,662  
Corporate expenses
     5,525       3,807       17,094       14,266  
Depreciation
     30,410       28,959       118,855       123,968  
 
                        
Total operating expenses
     270,564       259,060       1,093,432       1,033,487  
 
                        
Operating income
     14,057       10,899       98,152       78,263  
Interest expense, net
     (33,413 )     (42,025 )     (149,623 )     (165,175 )
Impairment loss
     (5,262 )     (54,205 )     (33,760 )     (107,409 )
Hurricane loss
     —       —       (2,125 )     —  
Charge-off of deferred financing costs
     (866 )     —       (6,960 )     (2,834 )
Loss on early extinguishment of debt
     (4,983 )     —       (44,216 )     —  
Gain on swap termination
     —       —       1,005       —  
 
                          
Loss before equity in income from unconsolidated entities, minority interests and gain on sale of assets
     (30,467 )     (85,331 )     (137,527 )     (197,155 )
Equity in income from unconsolidated entities
     1,429       118       17,121       2,370  
Gain (loss) on sale of assets
     73       178       1,167       284  
Minority interests
     2,098       6,769       7,928       13,912  
 
                        
Loss from continuing operations
     (26,867 )     (78,266 )     (111,311 )     (180,589 )
Discontinued operations
     16,097       (64,667 )     11,184       (129,555 )
 
                        
Net loss
     (10,770 )     (142,933 )     (100,127 )     (310,144 )
Preferred dividends
     (10,091 )     (6,727 )     (35,130 )     (26,908 )
 
                        
Net loss applicable to common stockholders
   $ (20,861 )   $ (149,660 )   $ (135,257 )   $ (337,052 )
 
                        
Basic and diluted per common share data:
                                
Net loss from continuing operations
   $ (0.62 )   $ (1.45 )   $ (2.48 )   $ (3.54 )
 
                        
Net loss
   $ (0.35 )   $ (2.55 )   $ (2.29 )   $ (5.75 )
 
                        
Weighted average common shares outstanding
     59,192       58,801       59,045       58,657  
 
                        

7

 

FelCor Lodging Trust Incorporated
Supplemental Information
Three Months and Year Ended December 31, 2004

Discontinued Operations
(in thousands)

     Included in discontinued operations are the results of operations of the 18 hotels disposed of in 2004, one hotel designated as held for sale at December 31, 2004, and 16 hotels sold in 2003. Condensed financial information for the hotels included in discontinued operations is as follows:

                                 
    Three Months Ended     Year Ended  
    December 31,     December 31,  
    2004     2003     2004     2003  
Hotel operating revenue
   $ 5,677     $ 26,617     $ 69,298     $ 146,317  
Hotel operating expenses
     6,135       27,096       67,566       147,798  
 
                        
Operating income
     (458 )     (479 )     1,732       (1,481 )
Direct interest costs, net
     —       —       12       (636 )
Gain on the early extinguishment of debt
     —       —       —       1,611  
Impairment loss
     —       (70,778 )     (4,529 )     (138,100 )
Lease termination expense from asset disposition
     —       —       (4,900 )     —  
Gain (loss) on sale of assets
     17,306       3,258       19,422       2,376  
Minority interest in FelCor LP
     (751 )     3,332       (553 )     6,675  
 
                        
Loss from discontinued operations
     16,097       (64,667 )     11,184       (129,555 )
Depreciation
     —       2,153       3,797       16,258  
Minority interest
     751       (3,332 )     553       (6,675 )
Interest expense
     —       —       —       665  
 
                        
EBITDA from discontinued operations
     16,848       (65,846 )     15,534       (119,307 )
Loss (gain) on sale of assets
     (17,306 )     (3,258 )     (19,422 )     (2,376 )
Impairment loss
     —       70,778       4,529       138,100  
Loss on early extinguishment of debt
     —       —               (1,611 )
Lease termination expense from asset disposition
     —       —       4,900       —  
 
                        
Adjusted EBITDA from discontinued operations
   $ (458 )   $ 1,674     $ 5,541     $ 14,806  
 
                        

Non-GAAP Financial Measures

     We refer in this Supplemental Information to certain “non-GAAP financial measures.” These measures, including FFO, Adjusted FFO, EBITDA, Adjusted EBITDA, Same-Store EBITDA, hotel operating profit and hotel operating margin are measures of our financial performance that are not calculated and presented in accordance with generally accepted accounting principles (“GAAP”). The following tables set forth the adjustments made and reconcile each of these non-GAAP measures to the most comparable GAAP financial measure. Immediately following the reconciliations, we include a discussion of why we believe these measures are useful supplemental measures of our performance and of the limitations upon such measures.

8

 

FelCor Lodging Trust Incorporated
Supplemental Information
Three Months and Year Ended December 31, 2004

Non-GAAP Financial Measures

Reconciliation of Net Loss to FFO and Adjusted FFO
(in thousands, except per share data)

                                                 
    Three Months Ended December 31,  
    2004     2003  
                    Per Share                     Per Share  
    Dollars     Shares     Amount     Dollars     Shares     Amount  
Net loss
   $ (10,770 )                   $ (142,933 )                
Preferred dividends
     (10,091 )                     (6,727 )                
 
                                            
Net loss applicable to common stockholders
     (20,861 )     59,192     $ (0.35 )     (149,660 )     58,801     $ (2.55 )
Depreciation from continuing operations.
     30,410       —       0.51       28,959       —       0.49  
Depreciation from unconsolidated entities and discontinued operations.
     2,659       —       0.04       4,231       —       0.07  
Loss (gain) on sale of assets
     (17,306 )     —       (0.29 )     (3,444 )     —       (0.06 )
Minority interest in FelCor LP
     (974 )     2,789       (0.01 )     (7,712 )     3,050       (0.01 )
 
                                    
FFO
     (6,072 )     61,981       (0.10 )     (127,626 )     61,851       (2.06 )
Charge off of deferred debt costs
     866       —       0.01       —       —       —  
Loss (gain) on early extinguishment of debt
     4,983       —       0.08       —       —       —  
Impairment
     5,262       —       0.08       124,983       —       2.02  
Minority interest share of impairment
     —       —       —       (1,770 )     —       (0.03 )
Dilutive effect of unvested stock grants
     —       438       0.01       —       —       —  
 
                                    
Adjusted FFO
   $ 5,039       62,419     $ 0.08     $ (4,413 )     61,851     $ (0.07 )
 
                                    
 
    Year Ended December 31,  
    2004     2003  
                    Per Share                     Per Share  
    Dollars     Shares     Amount     Dollars     Shares     Amount  
Net loss
   $ (100,127 )                   $ (310,144 )                
Preferred dividends
     (35,130 )                     (26,908 )                
 
                                            
Net loss applicable to common stockholders
     (135,257 )     59,045     $ (2.29 )     (337,052 )     58,657     $ (5.75 )
Depreciation from continuing operations.
     118,855       —       2.01       123,968       —       2.11  
Depreciation from unconsolidated entities and discontinued operations.
     11,897       —       0.20       26,067       —       0.44  
Loss (gain) on sale of assets
     (19,422 )     —       (0.33 )     (2,668 )     —       (0.05 )
Minority interest in FelCor LP
     (6,681 )     2,939       (0.08 )     (17,777 )     3,188       (0.10 )
 
                                    
FFO
     (30,608 )     61,984       (0.49 )     (207,462 )     61,845       (3.35 )
Charge off of deferred debt costs
     6,960       —       0.11       2,834       —       0.05  
Loss (gain) on early extinguishment of debt
     44,216       —       0.71       (1,611 )     —       (0.03 )
Gain on swap termination
     (1,005 )     —       (0.02 )     —       —       —  
Lease termination expense from asset disposition
     4,900       —       0.08       —       —       —  
Impairment
     38,289       —       0.62       245,509       —       3.97  
Minority interest share of impairment
     —       —       —       (1,770 )     —       (0.03 )
Dilutive effect of unvested stock grants
     —       359       —       —       303       —  
 
                                    
Adjusted FFO
   $ 62,752       62,343     $ 1.01     $ 37,500       62,148     $ 0.60  
 
                                    

9

 

FelCor Lodging Trust Incorporated
Supplemental Information
Three Months and Year Ended December 31, 2004

Non-GAAP Financial Measures

Reconciliation of Net Loss to EBITDA, Adjusted EBITDA and Same-Store EBITDA
(in thousands)

                                 
    Three Months Ended     Year Ended  
    December 31,     December 31,  
    2004     2003     2004     2003  
Net loss
   $ (10,770 )   $ (142,933 )   $ (100,127 )   $ (310,144 )
Depreciation from continuing operations
     30,410       28,959       118,855       123,968  
Depreciation from unconsolidated entities and discontinued operations
     2,659       4,231       11,897       26,067  
Minority interest in FelCor Lodging LP
     (974 )     (7,712 )     (6,681 )     (17,777 )
Interest expense
     34,322       42,871       152,394       167,431  
Interest expense from unconsolidated entities and discontinued operations
     1,773       1,294       5,667       7,713  
Amortization expense
     1,330       565       2,945       2,210  
 
                        
EBITDA
     58,750       (72,725 )     184,950       (532 )
Charge off of deferred debt costs
     866       —       6,960       2,834  
Loss (gain) on early extinguishment of debt
     4,983       —       44,216       (1,611 )
Gain on swap termination
     —       —       (1,005 )     —  
Lease termination expense from asset disposition
     —       —       4,900       —  
Loss (gain) on sale of assets
     (17,306 )     (3,444 )     (19,422 )     (2,668 )
Impairment
     5,262       124,983       38,289       245,509  
Minority interest share of impairment loss
     —       (1,770 )     —       (1,770 )
 
                        
Adjusted EBITDA
     52,555       47,044       258,888       241,762  
Adjusted EBITDA from discontinued operations
     458       (1,674 )     (5,541 )     (14,806 )
Gain on development and sale of Margate Condominiums
     (808 )     —       (11,664 )     —  
 
                        
Same-Store EBITDA
   $ 52,205     $ 45,370     $ 241,683     $ 226,956  
 
                        

10

 

FelCor Lodging Trust Incorporated
Supplemental Information
Three Months and Year Ended December 31, 2004

Non-GAAP Financial Measures

Hotel Operating Profit and Hotel Operating Margin
(dollars in thousands)

                                 
    Three Months     Year Ended  
    Ended December 31,     December 31,  
    2004     2003     2004     2003  
Total revenue
   $ 284,621     $ 269,959     $ 1,191,584     $ 1,111,750  
Retail space rental and other revenue
     (131 )     (184 )     (2,721 )     (1,022 )
 
                        
Hotel revenue
     284,490       269,775       1,188,863       1,110,728  
Hotel operating expenses
     (234,629 )     (226,294 )     (957,483 )     (895,253 )
 
                        
Hotel operating profit
   $ 49,861     $ 43,481     $ 231,380     $ 215,475  
 
                        
Hotel operating margin
     17.5 %     16.1 %     19.5 %     19.4 %
 
                        
 
Hotel Operating Expense Composition
(dollars in thousands)
 
    Three Months Ended     Year Ended  
    December 31,     December 31,  
    2004     2003     2004     2003  
Hotel departmental expenses:
                                
Room
   $ 62,537     $ 59,454     $ 257,016     $ 234,242  
Food and beverage
     37,624       36,675       143,079       133,412  
Other operating departments
     7,842       6,608       31,887       27,024  
Other property related costs:
                                
Administrative and general
     29,860       26,946       115,422       106,466  
Marketing and advertising
     25,042       24,508       102,897       96,400  
Repairs and maintenance
     17,111       16,953       67,827       63,696  
Energy
     15,625       14,056       63,128       57,640  
Taxes, insurance and lease expense
     24,898       26,870       114,648       117,662  
 
                        
Total other property related costs
     220,539       212,070       895,904       836,542  
Management and franchise fees
     14,090       14,224       61,579       58,711  
 
                        
Hotel operating expenses
   $ 234,629     $ 226,294     $ 957,483     $ 895,253  
 
                        
Reconciliation of total operating expense to hotel operating expense:
                                
Total operating expenses
   $ 270,564     $ 259,060     $ 1,093,432     $ 1,033,487  
Corporate expenses
     (5,525 )     (3,807 )     (17,094 )     (14,266 )
Depreciation
     (30,410 )     (28,959 )     (118,855 )     (123,968 )
 
                        
Hotel operating expenses
   $ 234,629     $ 226,294     $ 957,483     $ 895,253  
 
                        
 
    Three Months     Year Ended  
    Ended December 31,     December 31,  
    2004     2003     2004     2003  
Supplemental information:
                                
Compensation and benefits expense (included in hotel operating expenses)
   $ 95,948     $ 94,507     $ 392,577     $ 366,202  
Reconciliation of total operating expenses to hotel operating expenses:
                                
Total operating expenses
   $ 270,564     $ 259,060     $ 1,093,432     $ 1,033,487  
Corporate expenses
     (5,525 )     (3,807 )     (17,094 )     (14,266 )
Depreciation
     (30,410 )     (28,959 )     (118,855 )     (123,968 )
 
                        
Hotel operating expenses
   $ 234,629     $ 226,294     $ 957,483     $ 895,253  
 
                        

11

 

FelCor Lodging Trust Incorporated
Supplemental Information
Three Months and Year Ended December 31, 2004

Non-GAAP Financial Measures

     Substantially all of our non-current assets consist of real estate. Historical cost accounting for real estate assets implicitly assumes that the value of real estate assets diminish predictably over time. Since real estate values instead have historically risen or fallen with market conditions, most industry investors consider supplemental measures of performance, which are not measures of operating performance under GAAP, to be helpful in evaluating a real estate company’s operations. These supplemental measures, including FFO, Adjusted FFO, EBITDA, Adjusted EBITDA, Same-Store EBITDA, hotel operating profit and hotel operating margin are not measures of operating performance under GAAP. However, we consider these non-GAAP measures to be supplemental measures of a REIT’s performance and should be considered along with, but not as an alternative to, net income as a measure of our operating performance.

FFO and EBITDA

     The White Paper on Funds From Operations approved by the Board of Governors of the National Association of Real Estate Investment Trusts (“NAREIT,”) defines FFO as net income or loss (computed in accordance with GAAP), excluding gains or losses from sales of property, plus depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. Adjustments for unconsolidated partnerships and joint ventures are calculated to reflect FFO on the same basis. We compute FFO in accordance with standards established by NAREIT. This may not be comparable to FFO reported by other REITs that do not define the term in accordance with the current NAREIT definition, or that interpret the current NAREIT definition differently than we do.

     EBITDA is a commonly used measure of performance in many industries. We define EBITDA as net income or loss (computed in accordance with GAAP) plus interest expenses, income taxes, depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. Adjustments for unconsolidated partnerships and joint ventures are calculated to reflect EBITDA on the same basis.

Adjustments to FFO and EBITDA

     We adjust FFO and EBITDA when evaluating our performance because management believes that the exclusion of certain additional recurring and non-recurring items described below provides useful supplemental information to investors regarding our ongoing operating performance and that the presentation of Adjusted FFO, Adjusted EBITDA and Same-Store EBITDA, when combined with GAAP net income, EBITDA and FFO, is beneficial to an investor’s better understanding of our operating performance.

  •   Gains and losses related to early extinguishment of debt and interest rate swaps – We exclude gains and losses related to early extinguishment of debt and interest rate swaps from FFO and EBITDA because we believe that it is not indicative of ongoing operating performance of our hotel assets. This also represents an acceleration of interest expense or a reduction of interest expense, and interest expense is excluded from EBITDA.

12

 

FelCor Lodging Trust Incorporated
Supplemental Information
Three Months and Year Ended December 31, 2004

Non-GAAP Financial Measures

  •   Impairment losses – We exclude the effect of impairment losses 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 represent accelerated depreciation, and depreciation is excluded from FFO by the NAREIT definition and from EBITDA.

  •   Cumulative effect of a change in accounting principle – Infrequently, the Financial Accounting Standards Board promulgates new accounting standards that require the consolidated statements of operations to reflect the cumulative effect of a change in accounting principle. We exclude these one-time adjustments in computing Adjusted FFO and Adjusted EBITDA because they do not reflect our actual performance for that period.

     In addition, to derive Adjusted EBITDA, we adjust EBITDA for Gains or losses on the disposition of assets because we believe that including them in EBITDA is not consistent with reflecting ongoing performance of our remaining assets. Additionally, the gain or loss on sale of depreciable assets represents either accelerated depreciation or excess depreciation in previous periods, and depreciation is excluded from EBITDA.

     To derive Same-Store EBITDA, we make the same adjustments to EBITDA as for Adjusted EBITDA and, additionally, exclude EBITDA from discontinued operations and gains and losses on the disposition of non-hotel related assets.

Hotel Operating Profit and Operating Margin

     Hotel operating profit and operating margin are commonly used measures of performance in the industry and give investors a more complete understanding of the operating results over which our individual hotels and operating managers have direct control. We believe that hotel operating profit and operating margin is useful to investors by providing greater transparency with respect to two significant measures used by us in our financial and operational decision-making. Additionally, using these measures facilitate comparisons with other hotel REITs and hotel owners. We present hotel operating profit and hotel operating margin by eliminating corporate-level expenses, depreciation and expenses related to our capital structure. We eliminate-corporate-level costs and expenses because we believe property-level results provide investors with supplemental information into the ongoing operation performance of our hotels and the effectiveness of management in running our business on a property-level basis. We eliminate depreciation and amortization because, even though depreciation and amortization are property-level expenses, these non-cash expenses, which are based on historical cost accounting for real estate assets, implicitly assumes that the value of real estate assets diminishes predictably over time.

13

 

FelCor Lodging Trust Incorporated
Supplemental Information
Three Months and Year Ended December 31, 2004

Non-GAAP Financial Measures

Use and Limitations of Non-GAAP Measures.

     Our management and Board of Directors use FFO, Adjusted FFO, EBITDA and Adjusted EBITDA to evaluate the performance of our hotels and to facilitate comparisons between us and other lodging REITs, hotel owners who are not REITs and other capital intensive companies. Same Store EBITDA is used to provide investors with supplemental information as to the ongoing operating performance of our hotels without regard to those hotels sold or held for sale at the date of presentation.

     The use of these non-GAAP financial measures have certain limitations. FFO, Adjusted FFO, EBITDA, Adjusted EBITDA, Same-Store EBITDA, hotel operating profit and hotel operating margin, as presented by us, may not be comparable to FFO, Adjusted FFO, EBITDA, Adjusted EBITDA, Same-Store EBITDA, hotel operating profit and hotel operating margin as calculated by other real estate companies. These measures do not reflect certain expenses that we incurred and will incur, such as depreciation, interest and capital expenditures. Management compensates for these limitations by separately considering the impact of these excluded items to the extent they are material to operating decisions or assessments of our operating performance. Our reconciliations to the GAAP financial measures, and our consolidated statements of operations and cash flows, include interest expense, capital expenditures, and other excluded items, all of which should be considered when evaluating our performance, as well as the usefulness of our non-GAAP financial measures.

     These non-GAAP financial measures are used in addition to and in conjunction with results presented in accordance with GAAP. They should not be considered as alternatives to operating profit, cash flow from operations, or any other operating performance measure prescribed by GAAP. Neither should FFO, FFO per share, Adjusted FFO, Adjusted FFO per share, EBITDA, Adjusted EBITDA or Same-Store EBITDA be considered as measures of our liquidity or indicative of funds available for our cash needs, including our ability to make cash distributions. FFO per share does not measure, and should not be used as a measure of, amounts that accrue directly to the benefit of stockholders. FFO, Adjusted FFO, EBITDA, Adjusted EBITDA, Same-Store EBITDA, hotel operating profit and hotel operating margin reflect additional ways of viewing our operations that we believe when viewed with our GAAP results and the reconciliations to the corresponding GAAP financial measures provide a more complete understanding of factors and trends affecting our business than could be obtained absent this disclosure. Management strongly encourages investors to review our financial information in its entirety and not to rely on a single financial measure.

14

 

FelCor Lodging Trust Incorporated
Supplemental Information
Three Months and Year Ended December 31, 2004

Debt Summary
(dollars in thousands)

Debt Outstanding

                         
    Encumbered   Interest Rate At   Maturity   Consolidated
    Hotels   December 31, 2004   Date   Debt
Promissory note
   none     4.31 %   June 2016   $ 650  
Senior unsecured term notes
   none     7.63     Oct. 2007     122,426  
Senior unsecured term notes
   none     9.00     June 2011     298,409  
Senior unsecured term notes(a)
   none     7.19     June 2011     290,000  
 
                        
Total unsecured debt
         8.02           711,485  
 
                        
Mortgage debt
   15 hotels     5.50     July 2009-2014     192,363  
Mortgage debt
   1 hotel     7.23     Sept. 2005     10,521  
Mortgage debt (b)
   10 hotels     4.63     May 2006     144,669  
Mortgage debt
   15 hotels     7.24     Nov. 2007     127,316  
Mortgage debt
   1 hotel     4.06     August 2008     15,500  
Mortgage debt
   7 hotels     7.32     April 2009     130,458  
Mortgage debt
   6 hotels     7.55     June 2009     67,959  
Mortgage debt
   8 hotels     8.70     May 2010     175,504  
Mortgage debt
   7 hotels     8.73     May 2010     135,690  
Mortgage debt
   8 hotels     7.48     April 2011     49,476  
Other
   1 hotel     9.17     August 2011     6,180  
 
                        
Total secured debt
   79 hotels     7.00           1,055,637  
 
                        
Total
         7.41 %       $ 1,767,122  
 
                        

(a)   The stated interest rate on this debt is LIBOR (2.6% at December 31, 2004) plus 4.25%. A $100 million notional amount of this debt has been swapped for a fixed rate of 7.80% resulting in a weighted average rate on these notes at December 31, 2004 of 7.19%.
 
(b)   This debt has two, one-year extension options, subject to certain contingencies.

         
Fixed interest rate debt to total debt
     74.9 %
Weighted average maturity of debt
   5 years
Secured debt to total assets
     31.8 %

At December 31, 2004, future scheduled debt principal payments are as follows (in thousands):

                         
    Secured     Unsecured        
Year   Debt     Debt     Total  
2005
   $ 32,319     $ —     $ 32,319  
2006
     161,043 (a)     —       161,043  
2007
     138,798       125,000       263,798  
2008
     34,595       —       34,595  
2009 and thereafter
     689,246       590,650       1,279,896  
Premium/(discount)
     (364 )     (4,165 )     (4,529 )
 
                  
Total debt
   $ 1,055,637     $ 711,485     $ 1,767,122  
 
                  

(a)   Included is a $145 million non-recourse mortgage loan maturing in 2006, that has two, one-year extension options, subject to certain contingencies.

15

 

FelCor Lodging Trust Incorporated
Supplemental Information
Three Months and Year Ended December 31, 2004

Debt Summary (continued)

     At December 31, 2004, we had unconsolidated 50 percent investments in ventures that owned an aggregate of 20 hotels. These ventures had approximately $218 million of non-recourse mortgage debt, all of which is secured by hotel assets. Our pro rata share of this non-recourse debt is $109 million.

Financing transactions in 2004:

     In March 2004, we elected to terminate our unsecured line of credit arrangement, which resulted in a 2004 cost savings of approximately $0.4 million.

     In April 2004, we completed the sale of 4,600,000 shares of our $1.95 Series A Cumulative Convertible Preferred Stock. The shares were sold at a price of $23.79 per share, which included dividends of $0.51 per share accrued through April 5, 2004, resulting in net proceeds of approximately $105 million.

     In May 2004, we issued $175 million of Senior Floating Rate Debt maturing in 2011, at an interest rate of LIBOR plus 4.25% and in July we issued an additional $115 million of Senior Floating Debt under the same terms.

     In May 2004, we borrowed $169 million of our secured facility at an average interest rate of 5.01%. In July 2004, we received additional funding of $25 million on this facility.

     In June 2004, we redeemed the full $175 million of our senior notes maturing in October 2004, and during 2004, we retired all $600 million of our 91/2% senior notes maturing in 2008.

     In August 2004, we completed the sale of 2,300,000 shares of our $1.95 Series A Cumulative Convertible Preferred Stock. The shares were sold at a price of $23.22 per share, which included accrued dividends of $0.28 per share through August 22, 2004, resulting in net proceeds of approximately $52 million.

16

 

FelCor Lodging Trust Incorporated
Supplemental Information
Three Months and Year Ended December 31, 2004

PORTFOLIO DATA

Portfolio Distribution at December 31, 2004
(143 consolidated hotels included in continuing operations, same store basis)

                                 
                    % of   % of 2004 Hotel
Brand   Hotels   Rooms   Total Rooms   Operating Profit(b)
Embassy Suites
     56       14,279       36 %     52 %
Holiday Inn-branded
     39       12,769       32       21  
Sheraton-branded
     10       3,269       8       10  
Doubletree-branded
     10       2,206       6       6  
Crowne Plaza
     12       4,025       10       5  
Other
     16       3,432       8       6  
 
                    % of     % of 2004 Hotel  
Top Markets   Hotels     Rooms     Total Rooms     Operating Profit  
Atlanta
     12       3,514       9 %     9 %
Dallas
     13       3,789       9       5  
Los Angeles Area
     6       1,492       4       5  
Boca Raton/Ft. Lauderdale
     4       1,118       3       4  
New Orleans
     2       746       2       4  
Orlando
     6       2,219       6       4  
San Francisco Bay Area
     8       2,690       7       3  
Minneapolis
     4       955       2       3  
San Diego
     1       600       2       3  
Phoenix
     4       1,016       3       3  
Houston
     8       1,969       5       3  
Chicago
     4       1,239       3       3  
Philadelphia
     3       1,174       3       3  
 
                    % of     % of 2004 Hotel  
Top Four States   Hotels     Rooms     Total Rooms     Operating Profit  
California
     19       5,593       14 %     15 %
Texas
     31       8,284       21       14  
Florida
     16       5,343       13       11  
Georgia
     14       3,868       10       10  
 
                    % of     % of 2004 Hotel  
Location   Hotels     Rooms     Total Rooms     Operating Profit  
Suburban
     63       15,671       39 %     40 %
Urban
     37       11,338       29       28  
Airport
     28       8,509       21       21  
Resort
     13       4,044       10       11  
Interstate
     2       418       1       0  
 
                    % of     % of 2004 Hotel  
Segment   Hotels     Rooms     Total Rooms     Operating Profit  
Upscale all-suite
     69       17,145       43 %     59 %
Full service
     40       13,004       32       22  
Upscale
     25       8,263       21       18  
Limited service
     9       1,568       4       1  
 
                    % of     % of 2004 Hotel  
    Hotels     Rooms     Total Rooms     Operating Profit  
Core Hotels
     125       35,256       88 %     95 %
Sale Hotels(a)
     18       4,724       12       5  

    (a) Excludes one hotel that met the “held for sale” accounting requirements, and was included in discontinued operations at December 31, 2004.
 
    (b) Hotel operating profit is more fully described on page 11 of this supplement.

17

 

FelCor Lodging Trust Incorporated
Supplemental Information
Three Months and Year Ended December 31, 2004

Detailed Operating Statistics by Brand
(142 consolidated hotels included in continuing operations, same store basis)

                                                 
    Occupancy (%)  
    Three Months Ended December 31,     Year Ended December 31,  
    2004     2003     % Variance     2004     2003     % Variance  
Embassy Suites Hotels
     65.3       63.9       2.2       69.5       67.3       3.1  
Holiday Inn-branded hotels
     58.3       58.0       0.6       64.7       62.9       2.9  
Sheraton-branded hotels
     58.3       58.6       (0.6 )     63.1       59.8       5.5  
Crowne Plaza hotels
     60.4       58.3       3.6       63.4       60.5       4.9  
Doubletree-branded hotels
     59.1       62.7       (5.7 )     66.0       65.9       0.1  
Other hotels
     50.0       50.7       (1.3 )     56.5       55.9       1.0  
Total hotels
     60.4       59.8       0.9       65.5       63.6       3.1  
 
    ADR ($)  
    Three Months Ended December 31,     Year Ended December 31,  
    2004     2003     % Variance     2004     2003     % Variance  
Embassy Suites Hotels
     117.26       114.52       2.4       117.49       115.85       1.4  
Holiday Inn-branded hotels
     80.75       79.98       1.0       81.06       80.20       1.1  
Sheraton-branded hotels
     101.56       93.74       8.3       98.33       94.53       4.0  
Crowne Plaza hotels
     95.78       94.36       1.5       93.83       93.50       0.4  
Doubletree-branded hotels
     103.41       96.58       7.1       103.79       100.07       3.7  
Other hotels
     78.06       74.81       4.4       82.68       79.71       3.7  
Total hotels
     99.28       96.45       2.9       99.07       97.38       1.7  
 
    RevPAR ($)  
    Three Months Ended December 31,     Year Ended December 31,  
    2004     2003     % Variance     2004     2003     % Variance  
Embassy Suites Hotels
     76.57       73.15       4.7       81.61       78.02       4.6  
Holiday Inn-branded hotels
     47.11       46.38       1.6       52.45       50.42       4.0  
Sheraton-branded hotels
     59.20       54.95       7.7       62.08       56.57       9.7  
Crowne Plaza hotels
     57.85       55.01       5.2       59.53       56.55       5.3  
Doubletree-branded hotels
     61.09       60.51       1.0       68.50       65.98       3.8  
Other hotels
     39.04       37.89       3.0       46.70       44.58       4.8  
Total hotels
     59.94       57.70       3.9       64.91       61.89       4.9  

The Holiday Inn Cocoa Beach, which was closed during the fourth quarter of 2004 because of hurricane damage, has been excluded from these Operating Statistics.

18

 

FelCor Lodging Trust Incorporated
Supplemental Information
Three Months and Year Ended December 31, 2004

Detailed Operating Statistics for FelCor’s Top Markets
(142 consolidated hotels included in continuing operations, same store basis)

                                                 
    Occupancy (%)  
    Three Months Ended December 31,     Year Ended December 31,  
    2004     2003     % Variance     2004     2003     % Variance  
Atlanta
     62.2       58.4       6.4       67.2       64.6       4.1  
Dallas
     43.5       44.3       (1.9 )     48.8       47.0       3.9  
Los Angeles Area
     64.6       64.8       (0.3 )     68.7       69.8       (1.5 )
Boca Raton/Ft. Lauderdale
     76.3       73.9       3.4       79.0       73.5       7.5  
New Orleans
     67.9       68.1       (0.4 )     66.3       65.8       0.7  
San Francisco Bay Area
     58.8       59.9       (1.9 )     65.3       64.2       1.6  
Orlando
     70.8       65.7       7.8       76.1       68.8       10.7  
Minneapolis
     62.1       62.1       0.0       68.0       65.2       4.2  
San Diego
     70.3       76.2       (7.8 )     80.9       79.9       1.3  
Phoenix
     61.8       61.8       (0.1 )     66.2       65.9       0.3  
Houston
     59.2       64.2       (7.7 )     65.5       65.3       0.3  
Chicago
     67.0       64.0       4.7       69.7       67.6       3.2  
Philadelphia
     71.4       61.5       16.0       68.0       61.8       10.1  
 
    ADR ($)  
    Three Months Ended December 31,     Year Ended December 31,  
    2004     2003     % Variance     2004     2003     % Variance  
Atlanta
     86.25       84.40       2.2       86.68       85.26       1.7  
Dallas
     90.25       86.65       4.1       89.77       87.74       2.3  
Los Angeles Area
     106.64       99.78       6.9       110.30       102.32       7.8  
Boca Raton/Ft. Lauderdale
     116.65       110.07       6.0       115.01       113.65       1.2  
New Orleans
     147.56       138.62       6.5       136.96       133.17       2.9  
San Francisco Bay Area
     110.89       109.84       1.0       112.44       112.34       0.1  
Orlando
     80.33       76.04       5.7       77.32       74.68       3.5  
Minneapolis
     127.47       122.22       4.3       125.48       122.82       2.2  
San Diego
     121.75       115.67       5.3       120.16       116.95       2.7  
Phoenix
     108.37       101.10       7.2       105.43       98.98       6.5  
Houston
     65.97       68.09       (3.1 )     69.32       69.92       (0.9 )
Chicago
     112.50       112.03       0.4       106.44       109.36       (2.7 )
Philadelphia
     107.17       108.01       (0.8 )     105.99       105.96       0.0  
 
    RevPAR ($)  
    Three Months Ended December 31,     Year Ended December 31,  
    2004     2003     % Variance     2004     2003     % Variance  
Atlanta
     53.61       49.31       8.7       58.28       55.08       5.8  
Dallas
     39.25       38.42       2.2       43.81       41.23       6.3  
Los Angeles Area
     68.85       64.63       6.5       75.83       71.42       6.2  
Boca Raton/Ft. Lauderdale
     89.05       81.29       9.5       90.90       83.58       8.8  
New Orleans
     100.14       94.45       6.0       90.78       87.66       3.6  
San Francisco Bay Area
     65.17       65.79       (0.9 )     73.39       72.18       1.7  
Orlando
     56.86       49.94       13.9       58.85       51.35       14.6  
Minneapolis
     79.10       75.86       4.3       85.30       80.14       6.4  
San Diego
     85.59       88.16       (2.9 )     97.26       93.41       4.1  
Phoenix
     66.95       62.53       7.1       69.76       65.28       6.9  
Houston
     39.07       43.69       (10.6 )     45.40       45.64       (0.5 )
Chicago
     75.42       71.73       5.1       74.22       73.88       0.5  
Philadelphia
     76.51       66.47       15.1       72.07       65.43       10.1  

The Holiday Inn Cocoa Beach, which was closed during the fourth quarter of 2004 because of hurricane damage, has been excluded from these Operating Statistics.

19

 

FelCor Lodging Trust Incorporated
Supplemental Information
Three Months and Year Ended December 31, 2004

Other Performance Statistics
(Consolidated hotels included in continuing operations, for period presented)

Variance to Prior Year

                         
    Occupancy     ADR     RevPAR  
    % Variance     % Variance     % Variance  
2002:
                        
First Quarter
     (11.2 )     (7.8 )     (18.2 )
 
                        
Second Quarter
     (5.1 )     (6.3 )     (11.1 )
 
                        
Third Quarter
     2.4       (4.8 )     (2.4 )
 
                        
Fourth Quarter
     4.4       (1.3 )     3.1  
 
                        
Year 2002
     (2.8 )     (5.5 )     (8.1 )
 
                        
2003:
                        
First Quarter
     (1.2 )     (4.1 )     (5.3 )
 
                        
Second Quarter
     (3.0 )     (4.8 )     (7.6 )
 
                        
Third Quarter
     0.3       (2.7 )     (2.4 )
 
                        
Fourth Quarter
     0.6       (2.3 )     (1.7 )
 
                        
Year 2003
     (0.6 )     (3.8 )     (4.4 )
 
                        
2004:
                        
January
     3.4       (1.2 )     2.2  
February
     2.3       (1.3 )     0.9  
March
     8.7       0.2       9.0  
 
                        
First Quarter 2004
     5.2       (0.7 )     4.4  
 
                        
April
     8.0       (0.1 )     7.9  
May
     5.0       1.5       6.6  
June
     3.8       3.5       7.4  
 
                        
Second Quarter 2004
     5.5       1.7       7.3  
 
                        
July
     2.3       2.1       4.4  
August
     (1.3 )     3.1       1.8  
September
     5.1       2.7       8.0  
 
                        
Third Quarter 2004
     1.9       2.7       4.6  
 
                        
October
     2.4       3.0       5.4  
November
     0.2       2.9       3.2  
December
     (0.2 )     2.7       2.5  
 
                        
Fourth Quarter 2004
     0.9       2.9       3.9  
Year 2004
     3.1       1.7       4.9  
 
                        
January 2005
     2.2       4.9       7.2  

20

 

FelCor Lodging Trust Incorporated
Supplemental Information
Three Months and Year Ended December 31, 2004

Hotel Portfolio Information

Pro Rata Share of Rooms Owned

                 
            Room Count at  
    Hotels     December 31, 2004  
Consolidated hotels in continuing operations
     143       39,980  
Hotels held for sale
     1       191  
Unconsolidated hotel operations
     5       761  
 
            
Total hotels owned
     149       40,932  
50% and 51% joint ventures
     28       (3,046 )
60% joint ventures
     2       (390 )
90% joint ventures
     6       (148 )
97% joint venture
     1       (10 )
 
              
Total joint venture owned rooms
             (3,594 )
 
              
Pro rata share of rooms owned
             37,338  
 
              

Capital Expenditures (dollars in thousands)

                         
    Three Months Ended   Year Ended   Year Ended
    December 31, 2004   December 31, 2004   December 31, 2003
Consolidated hotels:
                        
Improvements and additions to hotels
   $ 36,721     $ 95,833     $ 64,045  
% of total revenue
     12.9 %     8.0 %     5.3 %
 
                        
Unconsolidated hotels (pro rata share):
                        
Improvements and additions to hotels
   $ 2,326     $ 6,359     $ 4,291  
% of total revenue
     6.3 %     4.3 %     3.0 %

21

 

FelCor Lodging Trust Incorporated
Supplemental Information
Three Months and Year Ended December 31, 2004

Hotel Portfolio Information

Sale Hotels

     At December 31, 2004, we included in continuing operations 18 hotels identified as sale hotels. The composition, by brand, of the 18 sale hotels is as follows: Holiday Inn-branded (11), Doubletree branded (2) Embassy Suites (3), Hampton (1) and Independent (1). These hotels are expected to be sold within the next 18 months depending on the individual hotel, market conditions, and other factors.

     Operating statistics for our consolidated portfolio of 142 hotels included in continuing operations:

                                                 
    Three Months Ended December 31,     Year Ended December 31,  
    2004     2003     % Variance     2004     2003     % Variance  
Consolidated in Continuing Operations (142 hotels)(a)                        
Occupancy (%)
     60.4       59.8       0.9       65.5       63.6       3.1  
ADR ($)
     99.28       96.45       2.9       99.07       97.38       1.7  
RevPAR ($)
     59.94       57.70       3.9       64.91       61.89       4.9  
 
                                                
Sale Hotels (18 hotels)                        
Occupancy (%)
     50.5       49.8       1.4       57.7       56.1       3.0  
ADR ($)
     74.52       72.56       2.7       74.20       74.19       0.0  
RevPAR ($)
     37.63       36.14       4.1       42.83       41.59       3.0  
 
                                                
Core Hotels (124 hotels) (a)                        
Occupancy (%)
     61.7       61.2       0.9       66.6       64.6       3.1  
ADR ($)
     102.03       99.09       3.0       102.00       100.12       1.9  
RevPAR ($)
     62.97       60.63       3.9       67.91       64.65       5.0  

    (a) The Holiday Inn Cocoa Beach, which was closed during the fourth quarter of 2004 because of hurricane damage, has been excluded from these Operating Statistics.

For the year ended December 31, 2004, the hotel operating margins for the Core Hotels were 30.2%, while the operating margins for the Sale Hotels were 20.0%.

Portfolio Changes in 2004

Acquisitions:

  •   In March 2004, we purchased the 132-room Santa Monica Holiday Inn for $27 million. This hotel has a premier location across from the Santa Monica Pier and the Santa Monica beaches and will continue to be operated as a full service upscale hotel. This hotel is classified as an upscale hotel by STR because of the high room rates charged in this market.

Hotel Sales:

                         
                    Total Gross Sales
    Date           Price Per Quarter
Property   Sold   Rooms   (in millions)
Hotels sold during three months ended March 31, 2004:
                        
Plano, Holiday Inn
   Feb 2004     160          
Jackson (Downtown), Crowne Plaza
   Feb 2004     354          
Omaha (Southwest), Hampton Inn
   Mar 2004     131          
Houston (Medical Center), Crowne Plaza
   Mar 2004     297          
 
                        
Total Sales in First Quarter 2004
             942     $ 30  
 
                        
 
Hotels sold during three months ended June 30, 2004:
                        
St. Louis – Westport, Holiday Inn
   Apr 2004     316          
Odessa, Holiday Inn Express & Suites
   Apr 2004     186          
Odessa – Centre, Holiday Inn & Suites
   Apr 2004     245          
 
                        
Total Sales in Second Quarter 2004
             747       12  
 
                        

22

 

FelCor Lodging Trust Incorporated
Supplemental Information
Three Months and Year Ended December 31, 2004

Hotel Portfolio Information

                         
                    Total Gross Sales
    Date           Price Per Quarter
Property   Sold   Rooms   (in millions)
Hotels sold during three months ended September 30, 2004:
                        
Beaumont – I-10 (Midtown) Holiday Inn
   Jul 2004     190          
Midland – Country Villa Holiday Inn
   Aug 2004     250          
Avon – Beaver Creek Lodge (Independent)
   Aug 2004     72          
Omaha – Southwest Holiday Inn Express & Suites
   Aug 2004     78          
Albuquerque – Mountain View (at I-40 & I-25) Holiday Inn
   Sep 2004     360          
 
                        
Total Sales in Third Quarter 2004
             950       29  
 
                        
 
                        
Hotels sold during the three months ended December 31, 2004:
                        
Dallas – DFW International Airport North, Harvey Hotel
   Oct 2004     506          
Omaha, Homewood Suites
   Oct 2004     107          
Dallas – North Dallas Addison (Near the Galleria), Crowne Plaza
   Oct 2004     429          
Harford – Downtown, Crowne Plaza
   Nov 2004     350          
Secaucus – Meadowlands, Crowne Plaza
   Dec 2004     304          
 
                        
Total Sales in Fourth Quarter-to-Date in 2004
             1,696       86  
 
                        
Total Sales in 2004
             4,335     $ 157  
 
                        

Other Disposition:

  •   On June 30, 2004, we transferred our leasehold interest in the San Francisco Holiday Inn Select Downtown & Spa to the lessor as part of the settlement of a dispute with the lessor.

Portfolio Changes in 2003

Dispositions:

  •   Through December 31, 2003, we sold or otherwise disposed of 16 non-strategic hotels. Disposition proceeds from the 16 non-strategic hotels and two parking garages sold during 2003 totaled approximately $125 million.

Conversions:

  •   In March, we converted an independent, all-suite hotel in Dallas to a Staybridge Suites hotel.

  •   In April, we completed the conversion of the 385-room Hilton Myrtle Beach Resort, following a $15 million renovation of the former Wyndham-affiliated property.

Other:

  •   In June 2003, we began consolidating the operations of eight hotels that had previously been accounted for by the equity method.

23

 

FelCor Lodging Trust Incorporated
Supplemental Information
Three Months and Year Ended December 31, 2004

Hotel Portfolio Listing
(as of December 31, 2004)

                             
    State     Rooms     % Owned(a)     Brand
Consolidated Continuing Operations
                            
Birmingham(b)
   AL     242             Embassy Suites
Montgomery – East I-85(b)
   AL     210             Holiday Inn
Phoenix – Biltmore(b)
   AZ     232             Embassy Suites
Phoenix Crescent Hotel(b)
   AZ     342             Sheraton
Phoenix Scottsdale/Downtown(b)
   AZ     218       51 %   Fairfield Inn
Phoenix Tempe(b)
   AZ     224             Embassy Suites
Dana Point – Doheny Beach
   CA     195             Doubletree Guest Suites
Irvine – Orange County Airport (Newport Beach)
   CA     335             Crowne Plaza
Los Angeles – Anaheim (Located near Disneyland Park)(b)
   CA     222             Embassy Suites
Los Angeles – Covina/I-10(b)
   CA     259       50 %   Embassy Suites
Los Angeles – El Segundo – International Airport – South
   CA     349       97 %   Embassy Suites
Milpitas – Silicon Valley(b)
   CA     266             Embassy Suites
Milpitas – San Jose-North (Milpitas – Silicon Valley)
   CA     305             Crowne Plaza
Napa Valley(b)
   CA     205             Embassy Suites
Oxnard – Mandalay Beach Resort & Conference Center(b)
   CA     248             Embassy Suites
Palm Desert – Palm Desert Resort(b)
   CA     198             Embassy Suites
Pleasanton (San Ramon Area)
   CA     244             Crowne Plaza
San Diego – On the Bay
   CA     600             Holiday Inn
San Francisco – Burlingame Airport
   CA     340             Embassy Suites
San Francisco – South San Francisco Airport(b)
   CA     312             Embassy Suites
San Francisco – Fisherman’s Wharf
   CA     585             Holiday Inn
San Francisco – Union Square
   CA     403             Crowne Plaza
San Rafael – Marin County/Conference Center(b)
   CA     235       50 %   Embassy Suites
Santa Barbara – Goleta(b)
   CA     160             Holiday Inn
Santa Monica – Beach at the Pier
   CA     132             Holiday Inn
Denver – Aurora(b)
   CO     248       90 %   Doubletree
Stamford
   CT     380             Holiday Inn Select
Wilmington(b)
   DE     244       90 %   Doubletree
Boca Raton(b)
   FL     263             Embassy Suites
Cocoa Beach – Oceanfront
   FL     500             Holiday Inn
Deerfield Beach – Boca Raton/Deerfield Beach Resort(b)
   FL     244             Embassy Suites
Ft. Lauderdale – 17th Street(b)
   FL     358             Embassy Suites
Ft. Lauderdale – Cypress Creek(b)
   FL     253             Sheraton Suites
Jacksonville – Baymeadows(b)
   FL     277             Embassy Suites
Miami – International Airport(b)
   FL     316             Embassy Suites
Miami – International Airport (LeJeune Center)
   FL     304             Crowne Plaza
Orlando – International Airport(b)
   FL     288             Holiday Inn Select
Orlando – International Drive – Resort(b)
   FL     651             Holiday Inn
Orlando – International Drive South/Convention Center(b)
   FL     244             Embassy Suites
Orlando– Nikki Bird (Maingate – Walt Disney World Area)
   FL     530             Holiday Inn
 

24

 

FelCor Lodging Trust Incorporated
Supplemental Information
Three Months and Year Ended December 31, 2004

Hotel Portfolio Listing
(as of December 31, 2004)

                             
    State     Rooms     % Owned(a)     Brand
Orlando– (North)
   FL     277             Embassy Suites
Orlando – Walt Disney World Resort(b)
   FL     229             Doubletree Guest Suites
Tampa – Busch Gardens
  FL     406             Holiday Inn
Tampa– On Tampa Bay(b)
   FL     203             Doubletree Guest Suites
Atlanta – Airport(b)
   GA     378             Crowne Plaza
Atlanta – Airport(b)
   GA     233             Embassy Suites
Atlanta – Airport-North(b)
   GA     493             Holiday Inn
Atlanta – Buckhead(b)
   GA     317             Embassy Suites
Atlanta – Downtown(b)
   GA     211       51 %   Courtyard by Marriott
Atlanta – Downtown(b)
   GA     242       51 %   Fairfield Inn
Atlanta – Galleria(b)
   GA     278             Sheraton Suites
Atlanta – Gateway – Atlanta Airport
   GA     395             Sheraton
Atlanta – Perimeter – Dunwoody(b)
   GA     250             Holiday Inn Select
Atlanta – Perimeter Center(b)
   GA     241       50 %   Embassy Suites
Atlanta – Powers Ferry(b)
   GA     296             Crowne Plaza
Atlanta – South (I-75 & US 41) (b)
   GA     180             Holiday Inn
Brunswick(b)
   GA     130             Embassy Suites
Columbus – North (I-185 at Peachtree Mall)
  GA     224             Holiday Inn
Davenport
  IA     288             Holiday Inn
Chicago – The Allerton
   IL     443             Crowne Plaza
Chicago – Lombard/Oak Brook(b)
   IL     262       50 %   Embassy Suites
Chicago – Northshore/Deerfield (Northbrook) (b)
   IL     237             Embassy Suites
Chicago O’Hare Airport(b)
   IL     297             Sheraton Suites
Moline – Airport
  IL     216             Holiday Inn
Moline – Airport Area
   IL     110             Holiday Inn Express
Indianapolis – North(b)
   IN     221       50 %   Embassy Suites
Kansas City – Overland Park(b)
   KS     199       50 %   Embassy Suites
Lexington(b)
   KY     155             Sheraton Suites
Lexington – Lexington Green(b)
   KY     174             Hilton Suites
Baton Rouge(b)
   LA     223             Embassy Suites
New Orleans(b)
   LA     372             Embassy Suites
New Orleans – French Quarter(b)
   LA     374             Holiday Inn
Boston – Government Center
   MA     303             Holiday Inn Select
Boston – Marlborough(b)
   MA     229             Embassy Suites
Baltimore – BWI Airport(b)
   MD     251       90 %   Embassy Suites
Troy – North (Auburn Hills) (b)
   MI     251       90 %   Embassy Suites
Bloomington(b)
   MN     219             Embassy Suites
Minneapolis – Airport(b)
   MN     310             Embassy Suites
Minneapolis – Downtown
  MN     216             Embassy Suites
St. Paul – Downtown(b)
   MN     210             Embassy Suites
Kansas City – NE I-435 North (At Worlds of Fun)(b)
   MO     165             Holiday Inn
Kansas City – Plaza(b)
   MO     266       50 %   Embassy Suites
St. Louis – Downtown(b)
   MO     297             Embassy Suites
Jackson – North
   MS     222             Holiday Inn & Suites
Olive Branch Whispering Woods Hotel and Conference Center
   MS     181             Independent
Charlotte(b)
   NC     274       50 %   Embassy Suites
Charlotte SouthPark
   NC     208             Doubletree Guest Suites
 

25

 

FelCor Lodging Trust Incorporated
Supplemental Information
Three Months and Year Ended December 31, 2004

Hotel Portfolio Listing
(as of December 31, 2004)

                             
    State     Rooms     % Owned(a)     Brand
Raleigh(b)
   NC     203             Doubletree Guest Suites
Raleigh – Crabtree(b)
   NC     225       50 %   Embassy Suites
Omaha – Central
   NE     187             Doubletree Guest Suites
Omaha – Central
   NE     129             Hampton Inn
Omaha – Central (I-80)
  NE     383             Holiday Inn
Omaha – Old Mill(b)
   NE     223             Crowne Plaza
Parsippany(b)
   NJ     274       50 %   Embassy Suites
Piscataway – Somerset(b)
   NJ     224             Embassy Suites
Secaucus – Meadowlands(b)
   NJ     261       50 %   Embassy Suites
Cleveland – Downtown
   OH     268             Embassy Suites
Tulsa – I-44(b)
   OK     244             Embassy Suites
Philadelphia – Center City
   PA     445             Crowne Plaza
Philadelphia – Historic District(b)
   PA     364             Holiday Inn
Philadelphia – Society Hill(b)
   PA     365             Sheraton
Pittsburgh – At University Center (Oakland)(b)
   PA     251             Holiday Inn Select
Charleston – Mills House (Historic Downtown)(b)
   SC     214             Holiday Inn
Myrtle Beach – At Kingston Plantation
   SC     255             Embassy Suites
Myrtle Beach Resort
   SC     385             Hilton
Knoxville – Central At Papermill Road(b)
   TN     240             Holiday Inn
Nashville – Airport/Opryland Area
   TN     296             Embassy Suites
Nashville – Opryland/Airport (Briley Parkway)
   TN     382             Holiday Inn Select
Amarillo – I-40
   TX     248             Holiday Inn
Austin(b)
   TX     189       90 %   Doubletree Guest Suites
Austin – North(b)
   TX     260       50 %   Embassy Suites
Austin – Town Lake (Downtown Area)(b)
   TX     320             Holiday Inn
Corpus Christi(b)
   TX     150             Embassy Suites
Dallas
   TX     295             Crowne Plaza Suites
Dallas – At Campbell Centre
   TX     300       90 %   Doubletree
Dallas – Dallas Park Central
   TX     114             Staybridge Suites
Dallas – DFW International Airport-North(b)
   TX     164             Harvey Suites
Dallas – DFW International Airport-South(b)
   TX     305             Embassy Suites
Dallas – Love Field(b)
   TX     248             Embassy Suites
Dallas – Market Center(b)
   TX     354             Crowne Plaza
Dallas – Market Center(b)
   TX     244             Embassy Suites
Dallas – Park Central
   TX     438       60 %   Sheraton
Dallas – Park Central
   TX     536       60 %   Westin
Dallas – Park Central Area(b)
   TX     279             Embassy Suites
Dallas – Regal Row(b)
   TX     203       51 %   Fairfield Inn
Dallas – West End/Convention Center
   TX     309             Hampton Inn
Houston – Greenway Plaza Area(b)
   TX     355             Holiday Inn Select
Houston – I-10 East(b)
   TX     160       51 %   Fairfield Inn
Houston – I-10 East(b)
   TX     90       51 %   Hampton Inn
Houston – I-10 West & Hwy. 6 (Park 10 Area)
   TX     349             Holiday Inn Select
Houston – Intercontinental Airport(b)
   TX     415             Holiday Inn
Houston – Medical Center(b)
   TX     284             Holiday Inn & Suites
Houston – Near the Galleria(b)
   TX     209       51 %   Courtyard by Marriott
Houston – Near the Galleria(b)
   TX     107       51 %   Fairfield Inn
 

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FelCor Lodging Trust Incorporated
Supplemental Information
Three Months and Year Ended December 31, 2004

Hotel Portfolio Listing
(as of December 31, 2004)

                             
    State     Rooms     % Owned(a)     Brand
San Antonio – Downtown (Market Square)
   TX     315             Holiday Inn
San Antonio – International Airport(b)
   TX     261       50 %   Embassy Suites
San Antonio – International Airport(b)
   TX     397             Holiday Inn Select
San Antonio – N.W. I-10(b)
   TX     216       50 %   Embassy Suites
Waco – I-35
   TX     170             Holiday Inn
Burlington Hotel & Conference Center(b)
   VT     309             Sheraton
Vienna – At Tysons Corner(b)
   VA     437       50 %   Sheraton
Canada
Toronto – Airport
   Ontario     445             Holiday Inn Select
Toronto – Yorkdale
   Ontario     370             Holiday Inn
 
                            
Hotel Included in Discontinued Operations
                            
Salt Lake City – Airport(c)
   UT     191             Holiday Inn
 
                            
Unconsolidated Operations
                            
Hays(b)
   KS     114       50 %   Hampton Inn
Hays(b)
   KS     191       50 %   Holiday Inn
Salina(b)
   KS     192       50 %   Holiday Inn
Salina – I-70(b)
   KS     93       50 %   Holiday Inn Express & Suites
New Orleans – Chateau LeMoyne (In French Quarter/Historic Area)(b)
   LA     171       50 %   Holiday Inn
 

     (a) We own 100% of the real estate interests unless otherwise noted.
     (b) This hotel is encumbered by mortgage debt or capital lease obligation.
     (c) This hotel was sold subsequent to December 31, 2004.

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