EX-99 4 earnings8-k2q1007exh99_2.htm EX 99.2 2Q 2007 SUPPLEMENT

 

 

 

 

 

FelCor Lodging Trust Incorporated

Supplemental Information

Three and Six Months Ended June 30, 2007

 

 

 

 

 

Date of Issuance July 31, 2007

 

 

 

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 and Six Months Ended June 30, 2007

 

 

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

 

Debt Summary

17

 

PORTFOLIO DATA

 

Portfolio Distribution

19

 

Detailed Operating Statistics by Brand

20

 

Detailed Operating Statistics for FelCor’s Top Markets

21

 

Pro Rata Share of Rooms Owned

22

 

Capital Expenditures

22

 

Renovation Completion Schedule

23

 

Projected Renovation Program Summary

25

 

Unconsolidated Operations

25

 

Hotels Sold in 2007

26

 

This supplement contains registered trademarks owned or licensed by companies other than us, which may include, but are not limited to, Crowne Plaza®, Disneyland®, Doubletree®, Doubletree Guest Suites®, Embassy Suites Hotels®, Hampton Inn®, Hilton®, Hilton Suites®, Holiday Inn®, Holiday Inn & Suites®, Holiday Inn Express & Suites®, Holiday Inn Select®, Sheraton®, Sheraton Suites®, Walt Disney World® and Westin®.

 

With the exception of historical information, the matters discussed in this news release include “forward-looking statements” within the meaning of the federal securities laws. These forward-looking statements are identified by their use of terms and phrases such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “will,” “continue” and other similar terms and phrases, including references to assumption and forecasts of future results. 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 anticipated at the time the forward-looking statements are made. General economic conditions, operating risks associated with the hotel business, 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 fuel prices and security precautions, the impact that the bankruptcy of additional major air carriers may have on our revenues and receivables, the availability of capital, the ability to effect sales of non-strategic hotels at anticipated prices, the cyclical nature of the real estate markets, our ability to continue to qualify as a Real Estate Investment Trust for federal income tax purposes 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. We undertake no obligation to update any forward-looking statement to conform the statement to actual results or changes in our expectations.

2

FelCor Lodging Trust Incorporated

Supplemental Information

Three and Six Months Ended June 30, 2007

 

 

CORPORATE DATA

 

About the Company

 

In 1994, FelCor Lodging Trust Incorporated, a real estate investment trust (REIT), went public with six hotels, and a market capitalization of $120 million.  We are now the nation’s largest owner of upper upscale, all-suite hotels. At June 30, 2007, our portfolio was comprised of 83 consolidated hotels in continuing operations located in 23 states and Canada. For these hotels, the operating revenues and expenses are reflected in our consolidated statements of operations because of our majority ownership interests of the operating lessees of these hotels. We also owned 50 percent joint venture interests in five hotels whose operations were accounted for using the equity method. We owned 65 upper upscale hotels and were the largest owner of Embassy Suites Hotels and Doubletree Guest Suites hotels. We had an enterprise value of approximately $3.5 billion.

 

Strategy

 

Our long-term strategic plan is to own a diversified portfolio of high quality, upscale hotels flagged under leading brands and then increase shareholder value and return on invested capital by maximizing the use of our real estate and enhancing cash flow. We continually examine our portfolio to address issues of market supply and concentration of risk. In order to achieve our strategic objectives, we have identified three goals: Portfolio Repositioning and Debt Reduction; Internal Growth consisting of a comprehensive renovation program, redevelopment projects and a new asset management approach; and External Growth.

 

 

 

 

 

Public Ratings

 

 

 

 

 

Corporate

 

 

Senior Debt

 

Preferred Stock

Moody’s

 

Ba3

 

Ba3

 

B2

Standard & Poors

 

BB-

 

B+

 

B-

 

Stock Exchange Listing

Common Stock (NYSE: FCH)

$1.95 Series A Cumulative Convertible Preferred Stock (NYSE: FCHPRA)

8% Series C Cumulative Redeemable Preferred Stock (NYSE: FCHPRC)

 

Fiscal Year End

December 31

 

Number of employees

72

 

Corporate Headquarters

545 E. John Carpenter Frwy., Suite 1300

Irving, TX 75062

(972) 444-4900

 

Investor/Media Relations Contact

Stephen A. Schafer

Vice President Strategic Planning & Investor Relations

(972) 444-4912

sschafer@felcor.com

 

Information Request

information@felcor.com

 

3

FelCor Lodging Trust Incorporated

Supplemental Information

Three and Six Months Ended June 30, 2007

 

 

Board of Directors

 

Thomas J. Corcoran, Jr.

Chairman of the Board, FelCor Lodging Trust Incorporated

 

Melinda J. Bush, C.H.A.

Chairman and Chief Executive Officer, HRW Holdings, LLC

 

Robert F. Cotter

President, Kerzner International Holdings Limited

 

Richard S. Ellwood

Private Investor

 

Thomas C. Hendrick

Executive Vice President of Acquisitions and Development, Kor Group

 

David C. Kloeppel

Executive Vice President and Chief Financial Officer, Gaylord Entertainment Company

 

Charles A. Ledsinger, Jr.

Vice Chairman and Chief Executive Officer, Choice Hotels International

 

Robert H. Lutz, Jr.

President, RL Investments, Inc.

 

Robert A. Mathewson

President, RGC, Inc.

 

Richard A. Smith

President and Chief Executive Officer, FelCor Lodging Trust Incorporated

 

Executive Officers

 

Richard A. Smith, President and Chief Executive Officer

 

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

 

Troy A. Pentecost, Executive Vice President, Director of Asset Management

 

Andrew J. Welch, Executive Vice President and Chief Financial Officer

 

Jonathan H. Yellen, Executive Vice President, General Counsel and Secretary

 

4

FelCor Lodging Trust Incorporated

Supplemental Information

Three and Six Months Ended June 30, 2007

 

 

Equity Research Coverage

 

 

Firm

Analyst

Telephone

 

Citigroup Smith Barney

Joshua Attie

(212) 816-1533

 

Deutsche Bank North America

Chris Woronka

(212) 250-5815

 

Friedman, Billings, Ramsey & Co.

Gustavo Sarago

(703) 469-1042

 

Green Street Advisors

John V. Arabia

(949) 640-8780

 

JPMorgan

Harry C. Curtis

(212) 622-6610

 

Lehman Brothers

Felicia R. Hendrix

(212) 526-5562

 

Merrill Lynch

Amanda Bryant

(212) 449-2922

 

Morgan, Keegan & Co.

Napoleon Overton

(901) 579-4865

 

Stifel, Nicolaus & Company

Rod F. Petrik

(410) 454-4131

 

UBS (US)

William B. Truelove

(212) 713-8825

 

Wachovia Securities

Jeffrey J. Donnelly

(617) 603-4262

 

 

 

5

FelCor Lodging Trust Incorporated

Supplemental Information

Three and Six Months Ended June 30, 2007

 

 

FINANCIAL HIGHLIGHTS

 

Supplemental Financial Data

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

 

 

 

June 30,

 

December 31,

Total Enterprise Value

2007

 

2006

Common shares outstanding

 

62,471

 

 

 

62,052

 

Units outstanding

 

1,354

 

 

 

1,355

 

Combined shares and units outstanding

 

63,825

 

 

 

63,407

 

Common stock price at end of period

$

26.03

 

 

$

21.84

 

Common equity capitalization

$

1,661,365

 

 

$

1,384,809

 

Series A preferred stock

 

309,362

 

 

 

309,362

 

Series C preferred stock

 

169,412

 

 

 

169,412

 

Consolidated debt

 

1,297,699

 

 

 

1,369,153

 

Minority interest of consolidated debt

 

(7,434

)

 

 

(8,150

)

Pro rata share of unconsolidated debt

 

96,813

 

 

 

98,731

 

Cash and cash equivalents

 

(188,626

)

 

 

(124,179

)

Total enterprise value (TEV)

$

3,338,591

 

 

$

3,199,138

 

 

 

 

 

 

 

 

 

Dividends Per Share

 

 

 

 

 

 

 

Dividends declared (year to date):

 

 

 

 

 

 

 

Common stock

$

0.55

 

 

$

0.80

 

Series A preferred stock

 

0.975

 

 

 

1.95

 

Series C preferred stock (depositary shares)

 

1.00

 

 

 

2.00

 

 

 

 

 

 

 

 

 

Selected Balance Sheet Data

 

 

 

 

 

 

 

Investment in hotels, net

$

2,139,372

 

 

$

2,044,285

 

Hotels held for sale

 

-   

 

 

 

133,801

 

Total cash and cash equivalents

 

188,626

 

 

 

124,179

 

Total assets

 

2,556,234

 

 

 

2,583,249

 

Total debt

 

1,297,699

 

 

 

1,369,153

 

Total stockholders’ equity

 

1,056,124

 

 

 

1,010,931

 

Total stockholders equity less preferred equity

 

577,350

 

 

 

532,157

 

Book value per common share outstanding

 

9.24

 

 

 

8.58

 

 

 

.

6

FelCor Lodging Trust Incorporated

Supplemental Information

Three and Six Months Ended June 30, 2007

 

 

Consolidated Statements of Operations

(in thousands, except per share data)

 

 

Three Months Ended

 

Six Months Ended

 

June 30,

 

June 30,

 

2007

 

2006

 

2007

 

2006

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Hotel operating revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Room

$

216,813

 

 

$

210,980

 

 

$

421,135

 

 

$

418,966

 

Food and beverage

 

35,212

 

 

 

34,689

 

 

 

66,985

 

 

 

65,103

 

Other operating departments

 

13,504

 

 

 

13,568

 

 

 

25,948

 

 

 

26,549

 

Other revenue

 

322

 

 

 

27

 

 

 

452

 

 

 

56

 

Total revenues

 

265,851

 

 

 

259,264

 

 

 

514,520

 

 

 

510,674

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Hotel departmental expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Room

 

53,058

 

 

 

51,562

 

 

 

101,841

 

 

 

100,977

 

Food and beverage

 

26,655

 

 

 

25,541

 

 

 

51,190

 

 

 

49,201

 

Other operating departments

 

5,835

 

 

 

6,010

 

 

 

10,782

 

 

 

11,954

 

Other property related costs

 

68,584

 

 

 

66,846

 

 

 

137,142

 

 

 

135,704

 

Management and franchise fees

 

13,943

 

 

 

14,214

 

 

 

27,066

 

 

 

27,437

 

Taxes, insurance and lease expense

 

31,422

 

 

 

28,868

 

 

 

60,651

 

 

 

55,400

 

Abandoned projects

 

-   

 

 

 

-   

 

 

 

22

 

 

 

-   

 

Corporate expenses

 

5,255

 

 

 

5,562

 

 

 

12,041

 

 

 

11,366

 

Depreciation

 

27,155

 

 

 

23,742

 

 

 

52,205

 

 

 

46,179

 

Total operating expenses

 

231,907

 

 

 

222,345

 

 

 

452,940

 

 

 

438,218

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

33,944

 

 

 

36,919

 

 

 

61,580

 

 

 

72,456

 

Interest expense, net

 

(23,207

)

 

 

(28,308

)

 

 

(46,079

)

 

 

(58,816

)

Charge-off of deferred financing costs

 

-   

 

 

 

(295

)

 

 

-   

 

 

 

(962

)

Early extinguishment of debt, net

 

-   

 

 

 

(438

)

 

 

-   

 

 

 

(438

)

Income before equity in income from

unconsolidated entities, minority interests

and gain on sale of assets

 

 

 

10,737

 

 

 

 

 

7,878

 

 

 

 

 

15,501

 

 

 

 

 

12,240

 

Equity in income from unconsolidated entities

 

3,710

 

 

 

3,812

 

 

 

16,480

 

 

 

5,760

 

Minority interests

 

79

 

 

 

844

 

 

 

116

 

 

 

1,285

 

Gain on sale of condominiums

 

14,858

 

 

 

-   

 

 

 

18,139

 

 

 

-   

 

Income from continuing operations

 

29,384

 

 

 

12,534

 

 

 

50,236

 

 

 

19,285

 

Discontinued operations

 

25,792

 

 

 

(2,389

)

 

 

34,099

 

 

 

712

 

Net income

 

55,176

 

 

 

10,145

 

 

 

84,335

 

 

 

19,997

 

Preferred dividends

 

(9,678

)

 

 

(9,678

)

 

 

(19,356

)

 

 

(19,356

)

Net income applicable to common stockholders

$

45,498

 

 

$

467

 

 

$

64,979

 

 

$

641

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic per common share data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income from continuing operations

$

0.32

 

 

$

0.05

 

 

$

0.50

 

 

$

-   

 

Net income

$

0.74

 

 

$

0.01

 

 

$

1.06

 

 

$

0.01

 

Basic weighted average common shares outstanding

 

61,587

 

 

 

60,355

 

 

 

61,511

 

 

 

60,066

 

Diluted per common share data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income from continuing operations

$

0.32

 

 

$

0.05

 

 

$

0.50

 

 

$

-   

 

Net income

$

0.73

 

 

$

0.01

 

 

$

1.05

 

 

$

0.01

 

Diluted weighted average common shares

outstanding

 

62,032

 

 

 

60,626

 

 

 

61,899

 

 

 

60,066

 

Cash dividends declared on common stock

$

0.30

 

 

$

0.20

 

 

$

0.55

 

 

$

0.35

 

 

 

7

FelCor Lodging Trust Incorporated

Supplemental Information

Three and Six Months Ended June 30, 2007

 

 

Discontinued Operations

(in thousands)

 

Discontinued operations include the results of operations of 11 hotels sold in 2007 and 31 hotels sold in 2006. Condensed financial information for the hotels included in discontinued operations is as follows:

 

 

Three Months Ended

 

Six Months Ended

 

June 30,

 

June 30,

 

2007

 

2006

 

2007

 

2006

Operating revenue

$

10,949

 

 

$

58,088

 

 

$

26,447

 

$

122,089

 

Operating expenses

 

(6,215

)

 

 

(59,032

)

 

 

(18,094

)

 

(118,278

)

Operating income (loss)

 

4,734

 

 

 

(944

)

 

 

8,353

 

 

3,811

 

Interest income (expense), net

 

6

 

 

 

(317

)

 

 

(19

)

 

(643

)

Gain (loss) on sale of hotels, net of income tax

 

22,457

 

 

 

(1,785

)

 

 

28,488

 

 

(2,862

)

Debt extinguishment

 

-   

 

 

 

-   

 

 

 

(901

)

 

-   

 

Minority interests

 

(1,405

)

 

 

657

 

 

 

(1,822

)

 

406

 

Income (loss) from discontinued operations

 

25,792

 

 

 

(2,389

)

 

 

34,099

 

 

712

 

Depreciation and amortization, net of minority

interest

 

 

14

 

 

 

 

4,280

 

 

 

 

14

 

 

 

9,118

 

Minority interest in FelCor LP

 

559

 

 

 

(23

)

 

 

740

 

 

(63

)

Interest expense, net of minority interests

 

-   

 

 

 

314

 

 

 

27

 

 

629

 

EBITDA from discontinued operations

 

26,365

 

 

 

2,182

 

 

 

34,880

 

 

10,396

 

Loss (gain) on sale of hotels, net of income tax

and minority interests

 

 

(21,799

 

)

 

 

 

1,785

 

 

 

 

(27,830

 

)

 

 

2,862

 

Impairment loss, net of minority interests

 

-   

 

 

 

8,341

 

 

 

-   

 

 

8,3411

 

Charges related to early extinguishment of debt,

net of minority interests

 

 

-   

 

 

 

 

-   

 

 

 

 

811

 

 

 

-   

 

Adjusted EBITDA from discontinued operations

$

4,566

 

 

$

12,308

 

 

$

7,861

 

$

21,599

 

 

 

 

Non-GAAP Financial Measures

 

We refer in this supplement to certain “non-GAAP financial measures.” These measures, including FFO, Adjusted FFO, EBITDA, Adjusted EBITDA, Same-Store EBITDA, Hotel EBITDA and Hotel EBITDA margin, are measures of our financial performance that are not calculated and presented in accordance with generally accepted accounting principles (“GAAP”). The following tables 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 the limitations of such measures.

 

8

FelCor Lodging Trust Incorporated

Supplemental Information

Three and Six Months Ended June 30, 2007

 

 

Non-GAAP Financial Measures (continued)

 

Reconciliation of Net Income to FFO and Adjusted FFO

(in thousands, except per share and unit data)

 

 

Three Months Ended June 30,

 

2007

 

2006

 

Dollars

 

Shares

 

Per Share Amount

 

Dollars

 

Shares

 

Per Share Amount

Net income

$

55,176

 

 

 

 

 

 

 

 

$

10,145

 

 

 

 

 

 

 

Preferred dividends

 

(9,678

)

 

 

 

 

 

 

 

 

(9,678

)

 

 

 

 

 

 

Net income applicable to common stockholders

 

45,498

 

 

62,032

 

$

0.73

 

 

 

467

 

 

60,626

 

$

0.01

 

Depreciation, continuing operations

 

27,155

 

 

-   

 

 

0.44

 

 

 

23,742

 

 

-   

 

 

0.39

 

Depreciation, unconsolidated entities and discontinued operations

 

2,848

 

 

-   

 

 

0.05

 

 

 

 

6,964

 

 

-   

 

 

0.11

 

Loss (gain) on sale of hotels, net of income tax and minority interests

 

(21,799

)

 

-   

 

 

(0.35

)

 

 

1,785

 

 

-   

 

 

0.03

 

Minority interest in FelCor LP

 

985

 

 

1,355

 

 

(0.01

)

 

 

16

 

 

2,102

 

 

(0.01

)

FFO

 

54,687

 

 

 

 

 

 

 

 

 

32,974

 

 

 

 

 

 

 

Impairment loss, net of minority interests

 

-   

 

 

-   

 

 

-   

 

 

 

8,341

 

 

-   

 

 

0.13

 

Charges related to early extinguishment of debt, net of minority interests

 

-   

 

 

-   

 

 

-   

 

 

 

803

 

 

-   

 

 

0.01

 

Adjusted FFO

 

54,687

 

 

 

 

 

 

 

 

 

42,118

 

 

 

 

 

 

 

Preferred dividends on Series A Preferred Stock

 

6,279

 

 

9,985

 

 

(0.03

)

 

 

6,279

 

 

9,985

 

 

-   

 

Adjusted FFO for per share calculation assuming Series A Preferred Stock conversion(a)

$

60,966

 

 

73,372

 

$

0.83

 

 

$

48,397

 

 

72,713

 

$

0.67

 

 

(a)

For calculation of Adjusted FFO per share it is more dilutive to assume the conversion of our Series A Preferred Stock into common stock when our quarterly adjusted FFO per share calculation exceeds 63 cents per share.

 

9

FelCor Lodging Trust Incorporated

Supplemental Information

Three and Six Months Ended June 30, 2007

 

 

Non-GAAP Financial Measures (continued)

 

Reconciliation of Net Income to FFO and Adjusted FFO

(in thousands, except per share and unit data)

 

 

Six Months Ended June 30,

 

2007

 

2006

 

Dollars

 

Shares

 

Per Share Amount

 

Dollars

 

Shares

 

Per Share Amount

Net income

$

84,335

 

 

 

 

 

 

 

 

$

19,997

 

 

 

 

 

 

 

Preferred dividends

 

(19,356

)

 

 

 

 

 

 

 

 

(19,356

)

 

 

 

 

 

 

Net income applicable to common stockholders

 

64,979

 

 

61,899

 

$

1.05

 

 

 

641

 

 

60,066

 

$

0.01

 

Depreciation, continuing operations

 

52,205

 

 

-   

 

 

0.84

 

 

 

46,179

 

 

-   

 

 

0.77

 

Depreciation, unconsolidated entities and discontinued operations

 

5,711

 

 

-   

 

 

0.09

 

 

 

14,601

 

 

-   

 

 

0.24

 

Loss (gain) on sale of hotels, net of income tax and minority interests

 

(27,830

)

 

-   

 

 

(0.45

)

 

 

2,862

 

 

-   

 

 

0.05

 

Gain on sale of hotels in unconsolidated entities

 

(11,182

)

 

-   

 

 

(0.18

)

 

 

-   

 

 

-   

 

 

-   

 

Minority interest in FelCor LP

 

1,412

 

 

1,355

 

 

(0.01

)

 

 

24

 

 

2,381

 

 

(0.04

)

Conversion of options and unvested restricted stock

 

-   

 

 

-   

 

 

-   

 

 

 

-   

 

 

260

 

 

-   

 

FFO

 

85,295

 

 

 

 

 

 

 

 

 

64,307

 

 

 

 

 

 

 

Impairment loss, net of minority interest

 

-   

 

 

-   

 

 

-   

 

 

 

8,341

 

 

-   

 

 

0.13

 

Abandoned projects

 

22

 

 

-   

 

 

-   

 

 

 

-   

 

 

-   

 

 

-   

 

Charges related to debt extinguishment, net of minority interest

 

811

 

 

-   

 

 

0.01

 

 

 

1,470

 

 

-   

 

 

0.02

 

Adjusted FFO

 

86,128

 

 

 

 

 

 

 

 

$

74,118

 

 

62,707

 

$

1.18

 

Preferred dividends on Series A Preferred Stock

 

12,558

 

 

9,985

 

 

-   

 

 

 

 

 

 

 

 

 

 

 

Adjusted FFO for per share calculation assuming Series A Preferred Stock conversion(a)

$

 

98,686

 

 

73,239

 

$

1.35

 

 

 

 

 

 

 

 

 

 

 

 

(a)

For calculation of Adjusted FFO per share it is more dilutive to assume the conversion of our Series A Preferred Stock into common stock when our adjusted FFO per share for six months exceeds $1.26 per share.

 

10

FelCor Lodging Trust Incorporated

Supplemental Information

Three and Six Months Ended June 30, 2007

 

 

Non-GAAP Financial Measures (continued)

 

Reconciliation of Net Income to EBITDA, Adjusted EBITDA and Same-Store EBITDA

(in thousands)

 

 

Three Months Ended
June 30,

 

Six Months Ended
June 30,

 

2007

 

2006

 

2007

 

2006

Net income

$

55,176

 

 

$

10,145

 

 

$

84,335

 

 

$

19,997

 

Depreciation, continuing operations

 

27,155

 

 

 

23,742

 

 

 

52,205

 

 

 

46,179

 

Depreciation, unconsolidated entities and

discontinued operations

 

2,848

 

 

 

6,964

 

 

 

5,711

 

 

 

14,601

 

Minority interest in FelCor Lodging LP

 

985

 

 

 

16

 

 

 

1,412

 

 

 

24

 

Interest expense

 

24,627

 

 

 

29,155

 

 

 

48,746

 

 

 

60,452

 

Interest expense, unconsolidated entities
and discontinued operations

 

1,489

 

 

 

1,928

 

 

 

3,063

 

 

 

3,856

 

Amortization expense

 

1,207

 

 

 

908

 

 

 

2,614

 

 

 

1,897

 

EBITDA

 

113,487

 

 

 

72,858

 

 

 

198,086

 

 

 

147,006

 

Gain on sale of hotels, net of income tax and minority interests

 

(21,799

)

 

 

1,785

 

 

 

(27,830

)

 

 

2,862

 

Gain on sale of hotels in unconsolidated entities

 

-   

 

 

 

-   

 

 

 

(11,182

)

 

 

-   

 

Impairment loss, discontinued operations

 

-   

 

 

 

8,341

 

 

 

-   

 

 

 

8,341

 

Abandoned projects

 

-   

 

 

 

-   

 

 

 

22

 

 

 

-   

 

Charges related to early extinguishment of debt,

net of minority interests

 

-   

 

 

 

803

 

 

 

811

 

 

 

1,470

 

Adjusted EBITDA

 

91,688

 

 

 

83,787

 

 

 

159,907

 

 

 

159,679

 

Adjusted EBITDA from discontinued operations

 

(4,566

)

 

 

(12,308

)

 

 

(7,861

)

 

 

(21,599

)

Gain on sale of condominiums

 

(14,858

)

 

 

-   

 

 

 

(18,139

)

 

 

-   

 

Same-Store EBITDA

$

72,264

 

 

$

71,479

 

 

$

133,907

 

 

$

138,080

 

 

 

11

FelCor Lodging Trust Incorporated

Supplemental Information

Three and Six Months Ended June 30, 2007

 

 

Non-GAAP Financial Measures (continued)

 

Reconciliation of Adjusted EBITDA to Hotel EBITDA

(in thousands)

 

 

Three Months Ended
June 30,

 

Six Months Ended
June 30,

 

2007

 

2006

 

2007

 

2006

Adjusted EBITDA

$

91,688

 

 

$

83,787

 

 

$

159,907

 

 

$

159,679

 

Other revenue

 

(322

)

 

 

(27

)

 

 

(452

)

 

 

(56

)

Adjusted EBITDA from discontinued operations

 

(4,566

)

 

 

(12,308

)

 

 

(7,861

)

 

 

(21,599

)

Equity in income from unconsolidated subsidiaries
(excluding interest and depreciation expense)

 

(8,439

)

 

 

(8,667

)

 

 

(14,847

)

 

 

(15,365

)

Minority interest in other partnerships
(excluding interest and depreciation expense)

 

(98

)

 

 

(396

)

 

 

28

 

 

 

(547

)

Consolidated hotel lease expense

 

17,267

 

 

 

16,404

 

 

 

31,525

 

 

 

30,003

 

Unconsolidated taxes, insurance and lease expense

 

(1,896

)

 

 

(1,567

)

 

 

(3,599

)

 

 

(3,149

)

Interest income

 

(1,421

)

 

 

(847

)

 

 

(2,667

)

 

 

(1,636

)

Corporate expenses (excluding amortization expense)

 

4,048

 

 

 

4,654

 

 

 

9,427

 

 

 

9,469

 

Gain on sale of condominiums

 

(14,858

)

 

 

-   

 

 

 

(18,139

)

 

 

-   

 

Hotel EBITDA

$

81,403

 

 

$

81,033

 

 

$

153,322

 

 

$

156,799

 

 

Reconciliation of Net Income to Hotel EBITDA

(in thousands)

 

 

Three Months Ended
June 30,

 

Six Months Ended
June 30,

 

2007

 

2006

 

2007

 

2006

Net income

$

55,176

 

 

$

10,145

 

 

$

84,335

 

 

$

19,997

 

Discontinued operations

 

(25,792

)

 

 

2,389

 

 

 

(34,099

)

 

 

(712

)

Equity in income from unconsolidated entities

 

(3,710

)

 

 

(3,812

)

 

 

(16,480

)

 

 

(5,760

)

Minority interests

 

(79

)

 

 

(844

)

 

 

(116

)

 

 

(1,285

)

Consolidated hotel lease expense

 

17,267

 

 

 

16,404

 

 

 

31,525

 

 

 

30,003

 

Unconsolidated taxes, insurance and lease expense

 

(1,896

)

 

 

(1,567

)

 

 

(3,599

)

 

 

(3,149

)

Interest expense, net

 

23,207

 

 

 

28,308

 

 

 

46,079

 

 

 

58,816

 

Charge-off of deferred financing costs

 

-   

 

 

 

295

 

 

 

-   

 

 

 

962

 

Early extinguishment of debt

 

-   

 

 

 

438

 

 

 

-   

 

 

 

438

 

Corporate expenses

 

5,255

 

 

 

5,562

 

 

 

12,041

 

 

 

11,366

 

Depreciation

 

27,155

 

 

 

23,742

 

 

 

52,205

 

 

 

46,179

 

Abandoned projects

 

-   

 

 

 

-   

 

 

 

22

 

 

 

-   

 

Gain on sale of condominiums

 

(14,858

)

 

 

-   

 

 

 

(18,139

)

 

 

-   

 

Other revenue

 

(322

)

 

 

(27

)

 

 

(452

)

 

 

(56

)

Hotel EBITDA

$

81,403

 

 

$

81,033

 

 

$

153,322

 

 

$

156,799

 

 

 

12

FelCor Lodging Trust Incorporated

Supplemental Information

Three and Six Months Ended June 30, 2007

 

 

Non-GAAP Financial Measures (continued)

 

Hotel EBITDA and Hotel EBITDA Margin

(dollars in thousands)

 

 

Three Months Ended
June 30,

 

 

Six Months Ended
June 30,

 

2007

 

2006

 

 

2007

 

2006

Total revenue

$

265,851

 

 

$

259,264

 

 

$

514,520

 

 

$

510,674

 

Retail space rental and other revenue

 

(322

)

 

 

(27

)

 

 

(452

)

 

 

(56

)

Hotel operating revenue

 

265,529

 

 

 

259,237

 

 

 

514,068

 

 

 

510,618

 

Hotel operating expenses

 

(184,126

)

 

 

(178,204

)

 

 

(360,746

)

 

 

(353,819

)

Hotel EBITDA

$

81,403

 

 

$

81,033

 

 

$

153,322

 

 

$

156,799

 

Hotel EBITDA margin

 

30.7%

 

 

 

31.3%

 

 

 

29.8%

 

 

 

30.7%

 

 

Reconciliation of Ratio of Operating Income to Total Revenue to Hotel EBITDA Margin

 

 

Three Months Ended

June 30,

 

Six Months Ended

June 30,

 

2007

 

2006

 

2007

 

2006

Ratio of operating income to total revenue

12.8

%

 

14.2

%

 

12.0

%

 

14.2

%

Retail space rental and other revenue

(0.1

)

 

-  

 

 

(0.1

)

 

-  

 

Unconsolidated taxes, insurance and lease expense

(0.7

)

 

(0.5

)

 

(0.7

)

 

(0.6

)

Consolidated hotel lease expense

6.5

 

 

6.3

 

 

6.1

 

 

5.9

 

Corporate expenses

2.0

 

 

2.1

 

 

2.3

 

 

2.2

 

Depreciation

10.2

 

 

9.2

 

 

10.2

 

 

9.0

 

Hotel EBITDA margin

30.7

%

 

31.3

%

 

29.8

%

 

30.7

%

 

Reconciliation of Total Operating Expense to Hotel Operating Expense

(dollars in thousands)

 

 

Three Months Ended
June 30,

 

Six Months Ended
June 30,

 

2007

 

2006

 

2007

 

2006

 

Total operating expenses

$

231,907

 

 

$

222,345

 

 

$

452,940

 

 

$

438,218

 

Unconsolidated taxes, insurance and lease expense

 

1,896

 

 

 

1,567

 

 

 

3,599

 

 

 

3,149

 

Consolidated hotel lease expense

 

(17,267

)

 

 

(16,404

)

 

 

(31,525

)

 

 

(30,003

)

Corporate expenses

 

(5,255

)

 

 

(5,562

)

 

 

(12,041

)

 

 

(11,366

)

Abandoned projects

 

-   

 

 

 

-   

 

 

 

(22

)

 

 

-   

 

Depreciation

 

(27,155

)

 

 

(23,742

)

 

 

(52,205

)

 

 

(46,179

)

Hotel operating expenses

$

184,126

 

 

$

178,204

 

 

$

360,746

 

 

$

353,819

 

 

 

13

FelCor Lodging Trust Incorporated

Supplemental Information

Three and Six Months Ended June 30, 2007

 

 

Non-GAAP Financial Measures (continued)

 

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 EBITDA and Hotel EBITDA margin, are not measures of operating performance under GAAP. However, we consider these non-GAAP measures to be supplemental measures of a hotel 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.

 

14

FelCor Lodging Trust Incorporated

Supplemental Information

Three and Six Months Ended June 30, 2007

 

 

Non-GAAP Financial Measures (continued)

 

 

•

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.

 

In addition, to derive Adjusted EBITDA, we adjust EBITDA for gains or losses on the sale 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 from the disposition of non-hotel related assets.

 

Hotel EBITDA and Hotel EBITDA Margin

 

Hotel EBITDA and Hotel EBITDA 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 EBITDA and Hotel EBITDA margin are useful to investors by providing greater transparency with respect to two significant measures used by us in our financial and operational decision-making. Additionally, these measures facilitate comparisons with other hotel REITs and hotel owners. We present Hotel EBITDA and Hotel EBITDA 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 with respect to the ongoing operating performance of our hotels and the effectiveness of management on a property-level basis. We eliminate depreciation and amortization, even though they are property-level expenses, because we do not believe that these non-cash expenses, which are based on historical cost accounting for real estate assets and implicitly assume that the value of real estate assets diminish predictably over time, accurately reflect an adjustment in the value of our assets. We also eliminate consolidated percentage rent paid to unconsolidated entities, which is effectively eliminated by minority interest expense and equity in income from unconsolidated subsidiaries, and include the cost of unconsolidated taxes, insurance and lease expense, to reflect the entire operating costs applicable to our hotels.

 

15

FelCor Lodging Trust Incorporated

Supplemental Information

Three and Six Months Ended June 30, 2007

 

 

Non-GAAP Financial Measures (continued)

 

Limitations of Non-GAAP Measures

 

The use of these non-GAAP financial measures has certain limitations. FFO, Adjusted FFO, EBITDA, Adjusted EBITDA, Same-Store EBITDA, Hotel EBITDA and Hotel EBITDA margin, as presented by us, may not be comparable to FFO, Adjusted FFO, EBITDA, Adjusted EBITDA, Same-Store EBITDA, Hotel EBITDA and Hotel EBITDA margin as calculated by other real estate companies. These measures do not reflect certain expenses that we incurred and will incur, such as depreciation and interest or 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 EBITDA and Hotel EBITDA 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.

 

 

16

FelCor Lodging Trust Incorporated

Supplemental Information

Three and Six Months Ended June 30, 2007

 

 

Debt Summary

(dollars in thousands)

 

Debt Outstanding

 

 

Encumbered

Interest Rate at

Maturity

Consolidated

 

 

Hotels

 

 

June 30, 2007

 

 

Date

 

 

Debt

 

Line of credit(a)

none

 

L + 1.75

 

January 2009

$

-   

 

Senior term notes

none

 

8.50

 

June 2011

 

299,037

 

Senior term notes

none

 

L + 1.875

 

December 2011

 

215,000

 

Total line of credit and senior debt(b)

 

 

7.98

 

 

 

514,037

 

 

 

 

 

 

 

 

 

 

Mortgage debt(c)

 

12 hotels

 

 

L + 0.93

 

November 2008

 

250,000

 

Mortgage debt

 

7 hotels

 

 

6.57

 

June 2009-2014

 

90,010

 

Mortgage debt

 

7 hotels

 

 

7.32

 

March 2009

 

122,576

 

Mortgage debt

 

8 hotels

 

 

8.70

 

May 2010

 

167,727

 

Mortgage debt

 

6 hotels

 

 

8.73

 

May 2010

 

121,106

 

Mortgage debt

 

1 hotel

 

 

L + 2.85

 

August 2008

 

15,500

 

Mortgage debt

 

1 hotel

 

 

5.81

 

July 2016

 

12,687

 

Other

 

1 hotel   

 

 

9.17

 

August 2011

 

4,056

 

Total mortgage debt(b)

 

43 hotels

 

 

7.41

 

 

 

783,662

 

Total

 

 

7.64

%

 

 

$

1,297,699

 

 

 

(a)

We have a borrowing capacity of $125 million on our line of credit. The interest on this line can range from 175 to 225 basis points over LIBOR based on our leverage ratio as defined in our line of credit agreement.

 

(b)

Interest rates are calculated based on the average outstanding debt at June 30, 2007.

 

(c)

This debt has three one-year extension options.

 

Debt Statistics at June 30, 2007

 

Weighted average interest

7.64%

Fixed interest rate debt to total debt

63.0%

Weighted average maturity of debt

5 years

Mortgage debt to total assets

30.7%

 

 

17

FelCor Lodging Trust Incorporated

Supplemental Information

Three and Six Months Ended June 30, 2007

 

 

Debt Summary (continued)

 

 

At June 30, 2007, future scheduled principal payments on outstanding debt are as follows

(in thousands):

 

 

Year

 

 

Secured

Debt

 

 

 

Unsecured

Debt

 

 

 

 

Total

 

2007

$

6,467

 

 

$

-   

 

 

$

6,467

 

2008

 

29,233

 

 

 

-   

 

 

 

29,233

 

2009

 

142,240

 

 

 

-   

 

 

 

142,240

 

2010

 

274,457

 

 

 

-   

 

 

 

274,457

 

2011(a)

 

253,030

 

 

 

515,000

 

 

 

768,030

 

2012 and thereafter

 

78,235

 

 

 

-   

 

 

 

78,235

 

Discount

 

-   

 

 

 

(963

)

 

 

(963

)

Total debt

$

783,662

 

 

$

514,037

 

 

$

1,297,699

 

 

 

(a)

Included in this amount is a $250,000 loan that has three, one-year extension options extending the maturity of this debt from 2008 to 2011.

 

At June 30, 2007, we had unconsolidated 50 percent investments in ventures that owned an aggregate of 18 hotels. These ventures had approximately $194 million of non-recourse mortgage debt, all of which is secured by hotel assets. Our pro rata share of this non-recourse debt was $97 million.

 

18

FelCor Lodging Trust Incorporated

Supplemental Information

Three and Six Months Ended June 30, 2007

 

 

PORTFOLIO DATA

 

Portfolio Distribution at June 30, 2007

(83 consolidated hotels included in continuing operations, same store basis)

 

Brand

 

 

 

Hotels

 

 

Rooms

 

% of

Total Rooms

 

% of 2006

Hotel EBITDA(a)

Embassy Suites Hotels

 

47

 

12,127

 

51

 

57

 

Holiday Inn-branded

 

17

 

6,305

 

26

 

18

 

Starwood-branded

 

9

 

3,217

 

13

 

15

 

Doubletree-branded

 

7

 

1,471

 

6

 

7

 

Hilton-branded

 

2

 

559

 

2

 

2

 

Other

 

1

 

403

 

2

 

1

 

 

 

 

 

 

 

 

 

 

 

Top Markets

 

 

 

 

 

 

 

 

 

 

South Florida area

 

5

 

1,434

 

6

 

7

 

Atlanta

 

5

 

1,462

 

6

 

7

 

San Francisco Bay area

 

6

 

2,141

 

9

 

6

 

Los Angeles area

 

4

 

898

 

4

 

5

 

Orlando

 

5

 

1,690

 

7

 

5

 

Dallas

 

4

 

1,333

 

6

 

5

 

Phoenix

 

3

 

798

 

3

 

4

 

San Diego

 

1

 

600

 

2

 

4

 

Minneapolis

 

3

 

736

 

3

 

4

 

Northern New Jersey

 

3

 

756

 

3

 

3

 

Washington, D.C.

 

1

 

443

 

2

 

3

 

Philadelphia

 

2

 

729

 

3

 

3

 

Chicago

 

3

 

795

 

3

 

3

 

San Antonio

 

3

 

874

 

4

 

3

 

Boston

 

2

 

532

 

2

 

3

 

 

 

 

 

 

 

 

 

 

 

Location

 

 

 

 

 

 

 

 

 

 

Suburban

 

32

 

8,200

 

34

 

37

 

Urban

 

20

 

6,362

 

26

 

25

 

Airport

 

20

 

6,203

 

26

 

24

 

Resort

 

11

 

3,317

 

14

 

14

 

 

 

 

 

 

 

 

 

 

 

Segment

 

 

 

 

 

 

 

 

 

 

Upper-upscale

 

65

 

17,374

 

72

 

81

 

Full service

 

17

 

6,305

 

26

 

18

 

Upscale

 

1

 

403

 

2

 

1

 

 

 

(a)

Hotel EBITDA is more fully described on page 15 of this supplement.

 

19

FelCor Lodging Trust Incorporated

Supplemental Information

Three and Six Months Ended June 30, 2007

 

 

Detailed Operating Statistics by Brand

(83 consolidated hotels included in continuing operations, same store basis)

 

 

Occupancy (%)

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

2007

 

2006

 

%Variance

 

2007

 

2006

 

%Variance

Embassy Suites Hotels

75.3

 

77.5

 

(2.8

)

 

73.9

 

77.0

 

(4.0

)

Holiday Inn-branded hotels

73.6

 

76.3

 

(3.6

)

 

68.5

 

73.4

 

(6.7

)

Starwood-branded hotels(a)

71.6

 

72.5

 

(1.2

)

 

70.2

 

71.8

 

(2.2

)

Doubletree-branded hotels

71.2

 

78.7

 

(9.4

)

 

71.4

 

76.6

 

(6.7

)

Other hotels(b)

77.3

 

74.1

 

4.4

 

 

65.7

 

67.6

 

(2.8

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total hotels

74.2

 

76.5

 

(3.0

)

 

71.5

 

75.0

 

(4.6

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ADR ($)

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

2007

 

2006

 

%Variance

 

2007

 

2006

 

%Variance

Embassy Suites Hotels

140.99

 

133.49

 

5.6

 

 

144.62

 

135.53

 

6.7

 

Holiday Inn-branded hotels

117.03

 

109.66

 

6.7

 

 

115.10

 

108.09

 

6.5

 

Starwood-branded hotels(a)

127.65

 

124.27

 

2.7

 

 

129.62

 

123.77

 

4.7

 

Doubletree-branded hotels

146.22

 

130.87

 

11.7

 

 

147.88

 

132.23

 

11.8

 

Other hotels(b)

140.86

 

137.48

 

2.5

 

 

135.19

 

129.10

 

4.7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total hotels

133.35

 

126.09

 

5.8

 

 

135.10

 

126.56

 

6.8

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

RevPAR ($)

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

2007

 

2006

 

%Variance

 

2007

 

2006

 

%Variance

Embassy Suites Hotels

106.18

 

103.45

 

2.6

 

 

106.86

 

104.36

 

2.4

 

Holiday Inn-branded hotels

86.11

 

83.70

 

2.9

 

 

78.87

 

79.39

 

(0.7

)

Starwood-branded hotels(a)

91.38

 

90.07

 

1.5

 

 

90.97

 

88.82

 

2.4

 

Doubletree-branded hotels

104.15

 

102.93

 

1.2

 

 

105.65

 

101.23

 

4.4

 

Other hotels(b)

108.90

 

101.81

 

7.0

 

 

88.80

 

87.23

 

1.8

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total hotels

98.94

 

96.40

 

2.6

 

 

96.62

 

94.87

 

1.8

 

 

 

(a)

Starwood-branded hotels include eight Sheraton-branded hotels and one Westin hotel.

 

(b)

Other hotels include two Hilton-branded hotels and one Crowne Plaza hotel.

 

20

FelCor Lodging Trust Incorporated

Supplemental Information

Three and Six Months Ended June 30, 2007

 

 

Detailed Operating Statistics for FelCor’s Top Markets

(83 consolidated hotels included in continuing operations, same store basis)

 

 

Occupancy (%)

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

2007

 

2006

 

%Variance

 

2007

 

2006

 

%Variance

South Florida area

72.4

 

78.5

 

(7.8

)

 

79.5

 

83.5

 

(4.7

)

Atlanta

78.1

 

77.2

 

1.1

 

 

76.3

 

78.6

 

(3.0

)

San Francisco Bay area

78.9

 

77.3

 

2.1

 

 

72.9

 

74.8

 

(2.6

)

Los Angeles area

79.1

 

74.3

 

6.4

 

 

78.3

 

76.2

 

2.8

 

Orlando

80.6

 

84.5

 

(4.6

)

 

79.9

 

82.1

 

(2.7

)

Dallas

65.9

 

72.1

 

(8.7

)

 

68.1

 

73.3

 

(7.0

)

Phoenix

68.0

 

74.1

 

(8.2

)

 

74.9

 

78.6

 

(4.7

)

San Diego

73.9

 

80.4

 

(8.0

)

 

76.2

 

81.3

 

(6.2

)

Minneapolis

78.5

 

70.7

 

11.0

 

 

73.9

 

68.2

 

8.2

 

Northern New Jersey

76.7

 

74.5

 

2.9

 

 

68.3

 

70.2

 

(2.7

)

Washington, D.C.

73.8

 

70.9

 

4.0

 

 

68.2

 

66.4

 

2.8

 

Philadelphia

72.4

 

82.5

 

(12.2

)

 

64.2

 

71.2

 

(9.9

)

Chicago

73.7

 

81.0

 

(9.0

)

 

66.9

 

74.3

 

(10.0

)

San Antonio

83.3

 

82.7

 

0.8

 

 

77.6

 

80.4

 

(3.5

)

Boston

70.2

 

81.1

 

(13.5

)

 

61.1

 

73.4

 

(16.8

)

 

ADR ($)

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

2007

 

2006

 

%Variance

 

2007

 

2006

 

%Variance

South Florida area

136.12

 

131.30

 

3.7

 

 

169.74

 

157.77

 

7.6

 

Atlanta

121.00

 

121.26

 

(0.2

)

 

123.11

 

120.69

 

2.0

 

San Francisco Bay area

138.57

 

130.87

 

5.9

 

 

135.16

 

126.40

 

6.9

 

Los Angeles area

158.32

 

144.69

 

9.4

 

 

154.54

 

138.46

 

11.6

 

Orlando

103.44

 

98.39

 

5.1

 

 

112.94

 

105.27

 

7.3

 

Dallas

122.26

 

113.01

 

8.2

 

 

126.57

 

114.58

 

10.5

 

Phoenix

136.17

 

122.69

 

11.0

 

 

160.24

 

142.68

 

12.3

 

San Diego

156.12

 

138.75

 

12.5

 

 

154.28

 

137.30

 

12.4

 

Minneapolis

142.94

 

136.96

 

4.4

 

 

141.12

 

134.76

 

4.7

 

Northern New Jersey

157.64

 

148.57

 

6.1

 

 

155.21

 

147.48

 

5.2

 

Washington, D.C.

169.09

 

166.46

 

1.6

 

 

170.86

 

165.76

 

3.1

 

Philadelphia

145.77

 

135.14

 

7.9

 

 

135.85

 

126.83

 

7.1

 

Chicago

136.50

 

124.31

 

9.8

 

 

130.22

 

119.40

 

9.1

 

San Antonio

111.04

 

107.06

 

3.7

 

 

110.33

 

103.01

 

7.1

 

Boston

157.89

 

157.03

 

0.5

 

 

150.49

 

146.59

 

2.7

 

 

RevPAR ($)

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

2007

 

2006

 

%Variance

 

2007

 

2006

 

%Variance

South Florida area

98.50

 

103.08

 

(4.4

)

 

135.02

 

131.76

 

2.5

 

Atlanta

94.51

 

93.67

 

0.9

 

 

93.92

 

94.89

 

(1.0

)

San Francisco Bay area

109.33

 

101.15

 

8.1

 

 

98.48

 

94.59

 

4.1

 

Los Angeles area

125.21

 

107.54

 

16.4

 

 

121.04

 

105.44

 

14.8

 

Orlando

83.32

 

83.10

 

0.3

 

 

90.21

 

86.41

 

4.4

 

Dallas

80.52

 

81.50

 

(1.2

)

 

86.23

 

83.97

 

2.7

 

Phoenix

92.55

 

90.87

 

1.9

 

 

120.05

 

112.20

 

7.0

 

San Diego

115.43

 

111.55

 

3.5

 

 

117.54

 

111.56

 

5.4

 

Minneapolis

112.26

 

96.86

 

15.9

 

 

104.23

 

91.95

 

13.3

 

Northern New Jersey

120.84

 

110.70

 

9.2

 

 

105.98

 

103.53

 

2.4

 

Washington, D.C.

124.72

 

118.07

 

5.6

 

 

116.59

 

110.05

 

5.9

 

Philadelphia

105.59

 

111.47

 

(5.3

)

 

87.19

 

90.30

 

(3.4

)

Chicago

100.61

 

100.67

 

(0.1

)

 

87.11

 

88.78

 

(1.9

)

San Antonio

92.51

 

88.50

 

4.5

 

 

85.65

 

82.85

 

3.4

 

Boston

110.77

 

127.42

 

(13.1

)

 

91.92

 

107.63

 

(14.6

)

 

 

21

FelCor Lodging Trust Incorporated

Supplemental Information

Three and Six Months Ended June 30, 2007

 

 

Pro Rata Share of Rooms Owned

 

 

 

Hotels

 

Room Count at

June 30, 2007

Consolidated hotels in continuing operations

83

 

 

 

24,082

 

Unconsolidated hotel operations

5

 

 

 

761

 

Total hotels

88

 

 

 

24,843

 

 

 

 

 

 

 

 

50% joint ventures

18

 

 

 

(2,089

)

60% joint ventures

1

 

 

 

(214

)

75% joint ventures

1

 

 

 

(55

)

90% joint ventures

3

 

 

 

(68

)

97% joint venture

1

 

 

 

(11

)

Total owned rooms by joint venture partners

 

 

 

 

(2,437

)

Pro rata share of rooms owned

 

 

 

 

22,406

 

 

Capital Expenditures (dollars in thousands)

 

 

Three Months Ended June 30,

 

Six Months Ended

June 30,

 

2007

 

2006

 

2007

 

2006

Improvements and additions to consolidated hotels

$71,585

 

 

$35,602

 

 

$138,488

 

 

$70,449

 

Joint venture partners’ prorata share of additions to hotels

 

(840

 

)

 

 

(268

 

)

 

 

(2,078

 

)

 

 

(518

 

)

Prorata share of unconsolidated additions to hotels

5,825

 

 

2,259

 

 

9,517

 

 

6,485

 

Total additions to hotels(1)

$76,570

 

 

$37,593

 

 

$145,927

 

 

$76,416

 

 

 

(1)

Includes capitalized interest, property taxes, ground leases and certain employee costs.

 

 

22

FelCor Lodging Trust Incorporated

Supplemental Information

Three and Six Months Ended June 30, 2007

 

 

 

 

Rooms

 

% Owned(a)

Renovation Completion Schedule

 

 

 

 

 

 

 

 

Completed 2006

 

 

 

Charleston (Mills House - Historic Downtown), SC - Holiday Inn(b)

214

 

 

Dana Point (Doheny Beach), CA - Doubletree Guest Suites

195

 

 

Minneapolis (Airport), MN - Embassy Suites(b)

310

 

 

Napa Valley, CA - Embassy Suites(b)

205

 

 

Nashville (Airport/Opryland Area), TN - Embassy Suites

296

 

 

Nashville (Opryland/Airport Briley Parkway), TN - Holiday Inn Select

383

 

 

Piscataway (Somerset), NJ - Embassy Suites(b)

221

 

 

Vienna (Tysons Corner), VA - Sheraton(b)

443

 

50%

 

 

 

 

Completed First Quarter 2007

 

 

 

Atlanta (Airport), GA - Embassy Suites(b)

232

 

 

Atlanta (Galleria), GA - Sheraton Suites(b)

278

 

 

Austin, TX - Doubletree Guest Suites(b)

189

 

90%

Baltimore (BWI Airport), MD - Embassy Suites(b)

251

 

90%

Charlotte (Southpark), NC - Doubletree Guest Suites

208

 

 

Chicago (Northshore/Deerfield-Northbrook), IL - Embassy Suites(b)

237

 

 

Houston (Medical Center), TX - Holiday Inn & Suites

287

 

 

Lexington (Lexington Green), KY - Hilton Suites(b)

174

 

 

Orlando (International Airport), FL - Holiday Inn Select(b)

288

 

 

Orlando (Walt Disney World Resort), FL - Doubletree Guest Suites

229

 

 

San Antonio (International Airport), TX - Holiday Inn Select(b)

397

 

 

San Francisco (Burlingame Airport), CA - Embassy Suites

340

 

 

San Francisco (Fisherman's Wharf), CA - Holiday Inn

585

 

 

San Francisco (South San Francisco Airport), CA - Embassy Suites(b)

312

 

 

St. Paul (Downtown), MN - Embassy Suites(b)

208

 

 

Secaucus (Meadowlands), NJ - Embassy Suites(b)

261

 

50%

Toronto (Yorkdale), CAN - Holiday Inn

370

 

 

 

 

 

 

Completed Second Quarter 2007

 

 

 

Atlanta (Gateway-Atlanta Airport), GA - Sheraton

395

 

 

Baton Rouge, LA - Embassy Suites(b)

223

 

 

Boston (Government Center), MA - Holiday Inn Select

303

 

 

Chicago (Lombard/Oak Brook), IL - Embassy Suites(b)

262

 

50%

Chicago (O'Hare Airport), IL - Sheraton Suites(b)

296

 

 

Dallas (Market Center), TX – Embassy Suites

244

 

 

Parsippany, NJ - Embassy Suites(b)

274

 

50%

Philadelphia (Historic District), PA - Holiday Inn

364

 

 

Pittsburgh (At University Center-Oakland), PA - Holiday Inn Select(b)

251

 

 

 

 

23

FelCor Lodging Trust Incorporated

Supplemental Information

Three and Six Months Ended June 30, 2007

 

 

Renovation Completion Schedule – (continued)

 

 

Rooms

 

% Owned(a)

Completed Second Quarter 2007 – (continued)

 

 

 

San Rafael (Marin County/Conference Center), CA - Embassy Suites(b)

235

 

50%

Tampa (On Tampa Bay), FL - Doubletree Guest Suites(b)

203

 

 

Toronto (Airport), CAN - Holiday Inn Select

445

 

 

 

 

 

 

Third and Fourth Quarter 2007 Completions

 

 

 

Atlanta (Perimeter Center), GA - Embassy Suites(b)

241

 

50%

Austin (North), TX - Embassy Suites(b)

260

 

50%

Birmingham, AL - Embassy Suites(b)

242

 

 

Boca Raton, FL - Embassy Suites(b)

263

 

 

Boston (Marlborough), MA – Embassy Suites(b)

229

 

 

Burlington (Hotel & Conference Center), VT - Sheraton(b)

309

 

 

Cocoa Beach (Oceanfront), FL - Holiday Inn

500

 

 

Corpus Christi, TX - Embassy Suites(b)

150

 

 

Dallas (DFW International Airport-South), TX - Embassy Suites(b)

305

 

 

Dallas (Love Field), TX - Embassy Suites(b)

248

 

 

Deerfield Beach (Boca Raton/Deerfield Beach Resort), FL - Embassy Suites(b)

244

 

 

Ft. Lauderdale (17th Street), FL - Embassy Suites(b)

358

 

 

Ft. Lauderdale (Cypress Creek), FL - Sheraton Suites(b)

253

 

 

Indianapolis (North), IN - Embassy Suites(b)

221

 

75%

Jacksonville (Baymeadows), FL - Embassy Suites(b)

277

 

 

Kansas City (Plaza), MO - Embassy Suites(b)

266

 

50%

Los Angeles (Anaheim Located near Disneyland Park), CA - Embassy Suites(b)

222

 

 

Los Angeles (El Segundo International Airport South), CA - Embassy Suites

349

 

97%

Miami (International Airport), FL - Embassy Suites(b)

316

 

 

Milpitas (Silicon Valley), CA - Embassy Suites(b)

266

 

 

Orlando (International Drive Resort), FL - Holiday Inn

652

 

 

Orlando (International Drive South), FL - Embassy Suites(b)

244

 

 

Orlando (North), FL - Embassy Suites

277

 

 

Philadelphia (Society Hill), PA - Sheraton(b)

365

 

 

Phoenix (Biltmore), AZ - Embassy Suites(b)

232

 

 

Phoenix (Tempe), AZ - Embassy Suites(b)

224

 

 

Raleigh (Crabtree), NC - Embassy Suites(b)

225

 

50%

Raleigh, NC - Doubletree Guest Suites(b)

203

 

 

San Antonio (International Airport), TX - Embassy Suites(b)

261

 

50%

San Antonio (N.W. I-10), TX - Embassy Suites(b)

216

 

50%

San Diego (On the Bay), CA - Holiday Inn

600

 

 

Santa Barbara (Goleta), CA - Holiday Inn

160

 

 

Wilmington, DE - Doubletree(b)

244

 

90%

 

 

24

FelCor Lodging Trust Incorporated

Supplemental Information

Three and Six Months Ended June 30, 2007

 

 

Renovation Completion Schedule – (continued)

 

 

Rooms

 

% Owned(a)

2008 Completions

 

 

 

Atlanta (Buckhead), GA – Embassy Suites(b)

316

 

 

Bloomington, MN - Embassy Suites(b)

218

 

 

Charlotte, NC – Embassy Suites(b)

274

 

50%

Dallas (Park Central), TX – Westin

536

 

60%

Kansas City (Overland Park), KS – Embassy Suites(b)

199

 

50%

Myrtle Beach (At Kingston Plantation), SC - Embassy Suites

255

 

 

Myrtle Beach Resort, SC - Hilton

385

 

 

New Orleans, LA – Embassy Suites(b)

370

 

 

New Orleans (French Quarter), LA – Holiday Inn

374

 

 

Oxnard (Mandalay Beach Resort & Conference Center), CA – Embassy Suites

248

 

 

Phoenix (Crescent Hotel), AZ – Sheraton(b)

342

 

 

San Francisco (Union Square), CA – Crowne Plaza

403

 

 

Santa Monica (Beach at the Pier), CA – Holiday Inn

132

 

 

 

 

Projected Renovation Program Summary ($ in millions)

 

 

Completion Date

 

Project Cost

 

Hotels Completed

 

Rooms Completed

Fourth Quarter 2006

 

 

$

46

 

 

 

8

 

 

 

2,267

 

First Quarter 2007

 

 

 

82

 

 

 

17

 

 

 

4,846

 

Second Quarter 2007

 

 

 

59

 

 

 

12

 

 

 

3,495

 

Third and Fourth Quarter 2007

 

 

 

184

 

 

 

33

 

 

 

9,422

 

2008

 

 

 

59

 

 

 

13

 

 

 

4,052

 

Total(1)

 

 

$

430

 

 

 

83

 

 

 

24,082

 

 

 

(1)

Does not include redevelopment costs and represents our prorata share of project costs.

 

Unconsolidated Operations

 

Rooms

 

% Owned(a)

Hays, KS – Hampton Inn(b)

114

 

50%

Hays, KS – Holiday Inn(b)

191

 

50%

New Orleans (Chateau LeMoyne -In French Quarter/Historic Area), LA –
Holiday Inn(b)


171

 

50%

Salina, KS – Holiday Inn(b)

192

 

50%

Salina (I-70), KS – Holiday Inn Express & Suites(b)

93

 

50%

 

 

(a)

We own 100% of the real estate interests unless otherwise noted.

 

(b)

This hotel is encumbered by mortgage debt or capital lease obligation.

 

 

25

FelCor Lodging Trust Incorporated

Supplemental Information

Three and Six Months Ended June 30, 2007

 

 

Hotels Sold in 2007

 

 

 

Property

 

 

Date

Sold

 

 

 

Rooms

 

Total Gross Sales

Price Per Quarter

(in millions)

Hotels sold during the quarter ended March 31, 2007:

 

 

 

 

 

 

 

 

Los Angeles (Covina/I-10) Covina, CA – Embassy Suites(a)

Feb 2007

 

155

 

 

 

 

 

Palm Desert (Palm Desert Resort), CA – Embassy Suites

Feb 2007

 

202

 

 

 

 

 

Stamford, CT – Holiday Inn Select

March 2007

 

198

 

 

 

 

 

 

 

 

555

 

 

$

64.7

 

Hotels sold during the quarter ended June 30, 2007:

 

 

 

 

 

 

 

 

Houston (Intercontinental Airport), TX – Holiday Inn

May 2007

 

415

 

 

 

 

 

Dallas (Park Central), TX – Sheraton

May 2007

 

438

 

 

 

 

 

Dallas (Park Central Area), TX – Embassy Suites

June 2007

 

279

 

 

 

 

 

Dallas (West End/Convention Center) TX – Hampton Inn

June 2007

 

309

 

 

 

 

 

Lexington, KY – Sheraton Suites

June 2007

 

155

 

 

 

 

 

Brunswick, GA – Embassy Suites

June 2007

 

130

 

 

 

 

 

Troy – (North - Auburn Hills), MI – Embassy Suites

June 2007

 

251

 

 

 

 

 

Tulsa (I-44), OK – Embassy Suites

June 2007

 

244

 

 

 

 

 

 

 

 

2,221

 

 

$

126.3

 

 

 

(a)

This hotel was sold by one of our 50% owned unconsolidated joint ventures for gross proceeds of $22.0 million.

 

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