FelCor Lodging Trust Incorporated (NYSE: FCH) today reported results for the second quarter ended June 30, 2017.
Second Quarter Highlights
- Same-store RevPAR was $161.98 compared to $163.62 for the same period in 2016.
- Net loss attributable to FelCor common stockholders was $8.0 million, or $0.06 per share, versus net income of $7.1 million, or $0.05 per share, for the same period in 2016.
- Adjusted FFO per share was $0.26 versus $0.32 for the same period in 2016.
- Same-store Adjusted EBITDA was $65.0 million versus $67.9 million for the same period in 2016.
“We are pleased to have completed the sale of Morgans New York and The Royalton,” said Steven R. Goldman, FelCor’s Chief Executive Officer. “Regarding our merger with RLJ, we are excited by the opportunity to participate in creating a leading lodging REIT with a greater reach in key markets, streamlined operating structure and improved cost of capital. Our team is working diligently with RLJ to effect a timely close and efficient transition.”
Second Quarter Hotel Results
| Second Quarter | |||||||||||||||
| 2017 | 2016 | Change | |||||||||||||
| Same-store hotels (36) | |||||||||||||||
| RevPAR | $ | 161.98 | $ | 163.62 | (1.0 | )% | |||||||||
| Total hotel revenue, in millions | $ | 211.9 | $ | 212.7 | (0.4 | )% | |||||||||
| Hotel EBITDA, in millions | $ | 69.2 | $ | 72.3 | (4.3 | )% | |||||||||
| Hotel EBITDA margin | 32.7 | % | 34.0 | % | (135) bps | ||||||||||
RevPAR for our 36 same-store hotels was $161.98 compared to $163.62 for the same period in 2016. The change reflects a 0.4% increase in occupancy (to 83.2%) offset by a 1.4% reduction in average daily rate, or ADR, (to $194.81). Hotel EBITDA for our 36 same-store hotels was $69.2 million compared to $72.3 million, and Hotel EBITDA margin was 32.7% compared to 34.0% in the prior year quarter. RevPAR was particularly affected by weakness at hotels in San Francisco, which constitute 17% of our available rooms. Excluding this market, RevPAR growth would have been 0.5% and margins would have been 34.0%.
Wyndham Worldwide Corporation has guaranteed minimum annual NOI for eight of our hotels over the 10-year terms of the management agreements. Hotel EBITDA for the three months ended June 30, 2017 includes $1.4 million of fee reductions related to that guaranty compared to $1.5 million during the same period last year.
See pages 12-14 and 18-23 for more detailed operating data.
Second Quarter Operating Results
| Second Quarter | ||||||||||||||
| $ in millions, except for per share information | 2017 | 2016 | Change | |||||||||||
| Net income (loss) attributable to FelCor common stockholders | $ | (8.0 | ) | $ | 7.1 | $ | (15.1 | ) | ||||||
| Net income (loss) per share | $ | (0.06 | ) | $ | 0.05 | $ | (0.11 | ) | ||||||
| Same-store Adjusted EBITDA | $ | 65.0 | $ | 67.9 | (4.2 | )% | ||||||||
| Adjusted EBITDA | $ | 64.7 | $ | 72.4 | (10.6 | )% | ||||||||
| Adjusted FFO per share | $ | 0.26 | $ | 0.32 | $ | (0.06 | ) | |||||||
Net loss attributable to common stockholders was $8.0 million, or $0.06 per share, in 2017, compared to net income of $7.1 million, or $0.05 per share, for the same period in 2016. Net loss in 2017 includes a $10.3 million impairment charge, reflecting further basis reduction for two hotels held for sale at June 30, 2017. Net income for the same period in 2016 includes a $6.3 million impairment charge attributable to one hotel sold in the third quarter of 2016.
Year-to-Date Operating Results
Net loss attributable to common stockholders was $50.2 million, or $0.36 per share, in 2017, compared to $4.1 million, or $0.03 per share, for the same period in 2016. Net loss in 2017 includes an impairment charge of $35.1 million, reflecting a reduction in basis for two hotels held for sale at June 30, 2017. Net loss for the same period in 2016 includes an impairment charge of $6.3 million attributable to one hotel sold in the third quarter of 2016.
RevPAR for our 36 same-store hotels was $151.99 compared to $153.45 for the same period in 2016. The change reflects ADR of $192.20 compared to $193.36 and 0.4% lower occupancy (to 79.1%). Hotel EBITDA for our 36 same-store hotels was $116.2 million compared to $121.8 million, and Hotel EBITDA margin was 29.5% compared to 30.7%.
Adjusted FFO was $48.7 million ($0.35 per share) compared to $64.3 million ($0.46 per share) for the same period in 2016.
Same-store Adjusted EBITDA was $107.0 million versus $112.4 million for the same period in 2016.
EBITDA, Adjusted EBITDA, Same-store Adjusted EBITDA, Hotel EBITDA, Hotel EBITDA margin, FFO, Adjusted FFO and Adjusted FFO per share are all non-GAAP financial measures. See our discussion of “Non-GAAP Financial Measures” beginning on page 14 for a reconciliation of each of these measures to the most comparable GAAP financial measure and for information regarding the use, limitations and importance of these non-GAAP financial measures.
Balance Sheet
At June 30, 2017, we had $1.4 billion of consolidated debt with a 5.4% weighted-average interest rate and a six-year weighted-average maturity. We had $58.1 million of cash and cash equivalents on hand and $24.2 million of restricted cash.
Asset Sales
We sold two hotels, Morgans New York in July 2017 and The Royalton in August 2017, for $92 million in aggregate gross proceeds.
Common Dividend
We paid our second quarter common stock dividend of $0.06 per share at the end of July.
Capital Expenditures
In 2016, we began redeveloping two resort properties (The Vinoy Renaissance St. Petersburg Resort & Golf Club and Embassy Suites Myrtle Beach-Oceanfront Resort). We completed our Myrtle Beach project last quarter, as scheduled and under budget. Also, Phase I of our Vinoy redevelopment is substantially complete and within budget. These redevelopments are intended to enhance our portfolio quality and offer attractive returns. During the six months ended June 30, 2017, we spent $42.1 million on renovations and redevelopments at our hotels.
Outlook
As discussed in our prior earnings release, given our pending merger with RLJ, we are not providing any further updates to our guidance for the remainder of the year.
Merger with RLJ
On April 24, 2017, we announced that we had entered into a definitive merger agreement under which we will merge with and into a wholly-owned subsidiary of RLJ in an all-stock transaction. At closing, our stockholders will receive 0.362 RLJ common shares for each share of our common stock. The transaction is expected to close on August 31, 2017 and is subject to customary closing conditions, including the approval of both companies’ shareholders at their respective special meetings on August 15, 2017.
About FelCor
FelCor Lodging Trust Incorporated, a real estate investment trust, owns a diversified portfolio of primarily upper-upscale and luxury hotels that are located in major markets and resort locations throughout the U.S. FelCor partners with top hotel companies that operate its properties under globally renowned names and as premier independent hotels. Additional information can be found on the Company’s website at www.felcor.com.
Disclosure Regarding Forward-Looking Statements
The information presented herein may contain forward-looking statements. These forward-looking statements, which are based on current expectations, estimates and projections about the industry and markets in which FelCor and RLJ operate and beliefs of and assumptions made by FelCor management and RLJ management, involve significant risks and uncertainties, which are difficult to predict and are not guarantees of future performances, that could significantly affect the financial results of FelCor or RLJ or the combined company. Words such as “projects,” “will,” “could,” “continue,” “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “forecast,” “guidance,” “outlook,” “may,” and “might” and variations of such words and similar expressions are intended to identify such forward-looking statements, which generally are not historical in nature. Such forward-looking statements may include, but are not limited to, statements about the anticipated benefits of the proposed merger between FelCor and RLJ, including future financial and operating results, the attractiveness of the value to be received by FelCor stockholders, the attractiveness of the value to be received by RLJ, the combined company’s plans, objectives, expectations and intentions, the timing of future events, anticipated administrative and operating synergies, the anticipated impact of the merger on net debt ratios, cost of capital, future dividend payment rates, forecasts of FFO accretion, projected capital improvements, expected sources of financing, and descriptions relating to these expectations. All statements that address operating performance, events or developments that FelCor expects or anticipates will occur in the future - including statements relating to expected synergies, improved liquidity and balance sheet strength - are forward-looking statements. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict. FelCor’s ability to predict results or the actual effect of future events, actions, plans or strategies is inherently uncertain. Although FelCor believes the expectations reflected in any forward-looking statements are based on reasonable assumptions, FelCor can give no assurance that our expectations will be attained and therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements. Some of the factors that may materially and adversely affect FelCor’s or the combined company’s business, financial condition, liquidity, results of operations and prospects, as well as the ability to make distributions to shareholders, include, but are not limited to: (i) national, regional and local economic climates, (ii) changes in the real estate industry, financial markets and interest rates, or to the business or financial condition of either company or business, (iii) increased or unanticipated competition for the companies’ properties, (iv) risks associated with acquisitions, including the integration of the combined companies’ businesses, (v) the potential liability for the failure to meet regulatory requirements, including the maintenance of REIT status, (vi) availability of financing and capital, (vii) risks associated with achieving expected revenue synergies or cost savings, (viii) risks associated with the companies’ ability to consummate the merger and the timing of the closing of the merger, (ix) the outcome of any claims and litigation involving or affecting either company, (x) applicable regulatory changes, and (xi) those additional risks and factors discussed in reports filed with the SEC by FelCor and RLJ from time to time, including those discussed under the heading “Risk Factors” in our and RLJ’s Quarterly Reports on Form 10-Q, Annual Reports on Form 10-K and our and RLJ’s other filings with the SEC. Neither FelCor nor RLJ, except as required by law, undertakes any duty to update any forward-looking statements appearing in this document or any other document, whether as a result of new information, future events or otherwise. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof.
Important Information for Investors and Stockholders
In connection with the proposed merger described elsewhere in this release, RLJ has filed with the SEC a registration statement on Form S-4 (File No. 333-218439), and RLJ and FelCor have filed with the SEC a definitive joint proxy statement/prospectus, which was first mailed to security holders of RLJ and FelCor on July 18, 2017. RLJ and FelCor filed a supplement to the joint proxy statement/prospectus on August 7, 2017 and plan to file other relevant documents with the SEC regarding the proposed transaction. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE JOINT PROXY STATEMENT/PROSPECTUS AND ALL RELATED SUPPLEMENTS AND AMENDMENTS THERETO AND ALL OTHER RELEVANT DOCUMENTS FILED WITH THE SEC IF AND WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. You may obtain a free copy of the joint proxy statement/prospectus and all related supplements and amendments and all other relevant documents (if and when they become available) filed by RLJ and FelCor with the SEC at the SEC’s website at www.sec.gov. Copies of the documents filed by RLJ with the SEC will be available free of charge on RLJ’s website at www.rljlodgingtrust.com or by contacting RLJ Investor Relations at ir@rljlodgingtrust.com or at 301-280-7774. Copies of the documents filed by FelCor with the SEC will be available free of charge on FelCor’s website at www.felcor.com or by contacting FelCor Investor Relations at asalami@felcor.com or at 972-444-4967.
This document shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the U.S. Securities Act of 1933, as amended.
Participants in the Solicitation
RLJ and FelCor and their respective trustees, directors and executive officers and other members of management and employees may be deemed to be participants in the solicitation of proxies in respect of the proposed merger. You can find information about RLJ’s executive officers and trustees in RLJ’s definitive proxy statement filed with the SEC on March 28, 2017 in connection with its 2017 annual meeting of shareholders and in Form 4s of RLJ’s trustees and executive officers filed with the SEC. You can find information about FelCor’s executive officers and directors in Amendment No. 1 to FelCor’s Annual Report on Form 10-K for the year ended December 31, 2016 on Form 10-K/A filed with the SEC on April 28, 2017 and in Form 4s of FelCor’s directors and executive officers filed with the SEC. Additional information regarding the interests of such potential participants is included in the joint proxy statement/prospectus and other relevant documents filed with the SEC in connection with the proposed merger. You may obtain free copies of these documents from RLJ or FelCor using the sources indicated above.
SUPPLEMENTAL INFORMATION
INTRODUCTION
The following information is presented in order to help our investors understand FelCor’s financial position as of and for the three and six months ended June 30, 2017.
TABLE OF CONTENTS | |||||
| Page | |||||
| Consolidated Statements of Operations(a) | 7 | ||||
| Consolidated Balance Sheets(a) | 8 | ||||
| Consolidated Debt Summary | 9 | ||||
| Schedule of Encumbered Hotels | 10 | ||||
| Capital Expenditures | 10 | ||||
| Total Enterprise Value | 11 | ||||
| Hotel Operating Statistics | 13 | ||||
| Historical Quarterly Operating Statistics | 14 | ||||
| Non-GAAP Financial Measures | 14 | ||||
(a) | We have prepared our consolidated statements of operations and balance sheets without an audit. Certain information and footnote disclosures normally included in financial statements presented in accordance with GAAP have been omitted. Our consolidated statements of operations and balance sheets should be read in conjunction with the audited consolidated financial statements and notes thereto included in our most recent Annual Report on Form 10-K. |
| Consolidated Statements of Operations | ||||||||||||||||||||
(in thousands, except per share data) | ||||||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||||||
| June 30, | June 30, | |||||||||||||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||||||||||
| Revenues: | ||||||||||||||||||||
| Hotel operating revenue: | ||||||||||||||||||||
| Room | $ | 168,772 | $ | 181,318 | $ | 313,705 | $ | 340,394 | ||||||||||||
| Food and beverage | 37,921 | 43,697 | 69,995 | 83,229 | ||||||||||||||||
| Other operating departments | 12,423 | 11,746 | 23,112 | 22,595 | ||||||||||||||||
| Other revenue | 1,324 | 1,145 | 1,732 | 1,832 | ||||||||||||||||
| Total revenues | 220,440 | 237,906 | 408,544 | 448,050 | ||||||||||||||||
| Expenses: | ||||||||||||||||||||
| Hotel departmental expenses: | ||||||||||||||||||||
| Room | 43,483 | 44,748 | 84,161 | 87,447 | ||||||||||||||||
| Food and beverage | 28,281 | 32,592 | 54,503 | 63,548 | ||||||||||||||||
| Other operating departments | 3,947 | 4,039 | 7,480 | 7,822 | ||||||||||||||||
| Other property-related costs | 52,220 | 56,007 | 103,075 | 111,573 | ||||||||||||||||
| Management and franchise fees | 7,726 | 8,501 | 15,276 | 17,726 | ||||||||||||||||
| Taxes, insurance and lease expense | 15,454 | 14,864 | 29,356 | 28,446 | ||||||||||||||||
| Corporate expenses | 6,281 | 6,047 | 13,221 | 14,447 | ||||||||||||||||
| Depreciation and amortization | 27,528 | 29,177 | 55,366 | 58,360 | ||||||||||||||||
| Impairment | 10,271 | 6,333 | 35,109 | 6,333 | ||||||||||||||||
| Other expenses | 7,331 | 2,142 | 8,591 | 2,970 | ||||||||||||||||
| Total operating expenses | 202,522 | 204,450 | 406,138 | 398,672 | ||||||||||||||||
| Operating income | 17,918 | 33,456 | 2,406 | 49,378 | ||||||||||||||||
| Interest expense, net | (19,416 | ) | (19,907 | ) | (38,702 | ) | (39,627 | ) | ||||||||||||
| Other gains, net | 100 | 100 | 100 | 100 | ||||||||||||||||
| Income (loss) before equity in income from unconsolidated entities | (1,398 | ) | 13,649 | (36,196 | ) | 9,851 | ||||||||||||||
| Equity in income from unconsolidated entities | 648 | 726 | 518 | 572 | ||||||||||||||||
| Income (loss) from continuing operations before income tax | (750 | ) | 14,375 | (35,678 | ) | 10,423 | ||||||||||||||
| Income tax | (503 | ) | 25 | (1,050 | ) | (390 | ) | |||||||||||||
| Income (loss) from continuing operations before loss on sale of hotels | (1,253 | ) | 14,400 | (36,728 | ) | 10,033 | ||||||||||||||
| Loss on sale of hotels | (207 | ) | (630 | ) | (873 | ) | (1,344 | ) | ||||||||||||
| Net income (loss) and comprehensive income (loss) | (1,460 | ) | 13,770 | (37,601 | ) | 8,689 | ||||||||||||||
| Net loss attributable to noncontrolling interests in other partnerships | 33 | 16 | 437 | 487 | ||||||||||||||||
| Net loss (income) attributable to redeemable noncontrolling interests in FelCor LP | 35 | (31 | ) | 221 | 17 | |||||||||||||||
| Preferred distributions - consolidated joint venture | (367 | ) | (364 | ) | (727 | ) | (724 | ) | ||||||||||||
| Net income (loss) and comprehensive income (loss) attributable to FelCor | (1,759 | ) | 13,391 | (37,670 | ) | 8,469 | ||||||||||||||
| Preferred dividends | (6,279 | ) | (6,279 | ) | (12,558 | ) | (12,558 | ) | ||||||||||||
| Net income (loss) attributable to FelCor common stockholders | $ | (8,038 | ) | $ | 7,112 | $ | (50,228 | ) | $ | (4,089 | ) | |||||||||
| Basic and diluted per common share data: | ||||||||||||||||||||
| Net income (loss) | $ | (0.06 | ) | $ | 0.05 | $ | (0.36 | ) | $ | (0.03 | ) | |||||||||
| Basic weighted average common shares outstanding | 137,866 | 138,182 | 137,820 | 138,930 | ||||||||||||||||
| Diluted weighted average common shares outstanding | 137,866 | 138,678 | 137,820 | 138,930 | ||||||||||||||||
| Dividends declared per common share | $ | 0.06 | $ | 0.06 | $ | 0.12 | $ | 0.12 | ||||||||||||
| Consolidated Balance Sheets | ||||||||||
(in thousands, except par values) | ||||||||||
| June 30, | December 31, | |||||||||
| 2017 | 2016 | |||||||||
| Assets | ||||||||||
| Investment in hotels, net of accumulated depreciation of $932,184 and $932,886 at June 30, 2017 and December 31, 2016, respectively | $ | 1,448,346 | $ | 1,566,823 | ||||||
| Investment in unconsolidated entities | 7,657 | 8,312 | ||||||||
| Hotels held for sale | 77,937 | — | ||||||||
| Cash and cash equivalents | 58,135 | 47,317 | ||||||||
| Restricted cash | 24,199 | 19,491 | ||||||||
| Accounts receivable, net of allowance for doubtful accounts of $184 and $177 at June 30, 2017 and December 31, 2016, respectively | 43,923 | 42,080 | ||||||||
| Deferred expenses, net of accumulated amortization of $3,895 and $2,959 at June 30, 2017 and December 31, 2016, respectively | 3,591 | 4,527 | ||||||||
| Other assets | 20,240 | 18,542 | ||||||||
| Total assets | $ | 1,684,028 | $ | 1,707,092 | ||||||
| Liabilities and Equity | ||||||||||
| Debt, net of unamortized debt issuance costs of $14,803 and $15,967 at June 30, 2017 and December 31, 2016, respectively | $ | 1,360,071 | $ | 1,338,326 | ||||||
| Distributions payable | 14,887 | 14,858 | ||||||||
| Accrued expenses and other liabilities | 135,792 | 116,437 | ||||||||
| Total liabilities | 1,510,750 | 1,469,621 | ||||||||
| Commitments and contingencies | ||||||||||
| Redeemable noncontrolling interests in FelCor LP, 610 units issued and outstanding at June 30, 2017 and December 31, 2016 | 4,400 | 4,888 | ||||||||
| Equity: | ||||||||||
| Preferred stock, $0.01 par value, 20,000 shares authorized: | ||||||||||
| Series A Cumulative Convertible Preferred Stock, 12,879 shares, liquidation value of $321,987, issued and outstanding at June 30, 2017 and December 31, 2016 | 309,337 | 309,337 | ||||||||
| Common stock, $0.01 par value, 200,000 shares authorized; 138,412 and 137,990 shares issued and outstanding at June 30, 2017 and December 31, 2016, respectively | 1,384 | 1,380 | ||||||||
| Additional paid-in capital | 2,580,539 | 2,576,988 | ||||||||
| Accumulated deficit | (2,774,178 | ) | (2,706,408 | ) | ||||||
| Total FelCor stockholders’ equity | 117,082 | 181,297 | ||||||||
| Noncontrolling interests in other partnerships | 7,365 | 7,503 | ||||||||
| Preferred equity in consolidated joint venture, liquidation value of $45,373 and $44,667 at June 30, 2017 and December 31, 2016, respectively | 44,431 | 43,783 | ||||||||
| Total equity | 168,878 | 232,583 | ||||||||
| Total liabilities and equity | $ | 1,684,028 | $ | 1,707,092 | ||||||
| Consolidated Debt Summary | |||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||
| Encumbered Hotels | Interest Rate (%) | Maturity Date | June 30, 2017 | December 31, 2016 | |||||||||||||||||
| Senior unsecured notes | — | 6.00 | June 2025 | $ | 475,000 | $ | 475,000 | ||||||||||||||
| Senior secured notes | 9 | 5.625 | March 2023 | 525,000 | 525,000 | ||||||||||||||||
| Mortgage debt(a) | 4 | 4.95 | October 2022 | 118,971 | 120,109 | ||||||||||||||||
| Mortgage debt | 1 | 4.94 | October 2022 | 29,903 | 30,184 | ||||||||||||||||
| Line of credit(b) | 7 | LIBOR + 2.75 | June 2019 | 141,000 | 119,000 | ||||||||||||||||
| Mortgage debt(c) | 1 | LIBOR + 3.00 | November 2017 | 85,000 | 85,000 | ||||||||||||||||
| Total | 22 | $ | 1,374,874 | $ | 1,354,293 | ||||||||||||||||
| Unamortized debt issuance costs | (14,803 | ) | (15,967 | ) | |||||||||||||||||
| Debt, net of unamortized debt issuance costs | $ | 1,360,071 | $ | 1,338,326 | |||||||||||||||||
| (a) | This debt is comprised of separate non-cross-collateralized loans, each secured by a mortgage encumbering a separate hotel. | |
| (b) | Our line of credit can be extended for one year, subject to satisfying certain conditions. We may borrow up to $400 million under our line of credit. | |
| (c) | This loan can be extended for one year, subject to satisfying certain conditions. |
| Schedule of Encumbered Hotels | ||||||||
| (dollars in millions) | ||||||||
| Consolidated | ||||||||
| Debt | June 30, 2017 | Encumbered Hotels | ||||||
| Senior secured notes | $ | 525 | Atlanta Buckhead - ES, Boston Marlboro - ES, Burlington - SH, Dallas Love Field - ES, Milpitas - ES, Myrtle Beach Resort - HIL, Orlando South - ES, Philadelphia Society Hill - SH and SF South San Francisco - ES | |||||
| Mortgage debt | $ | 26 | Napa Valley - ES | |||||
| Mortgage debt | $ | 34 | Ft. Lauderdale - ES | |||||
| Mortgage debt | $ | 23 | Birmingham - ES | |||||
| Mortgage debt | $ | 36 | Minneapolis Airport - ES | |||||
| Mortgage debt | $ | 30 | Deerfield Beach - ES | |||||
| Line of credit | $ | 141 | Austin - DTG, Boston Copley - FM, Charleston Mills House - WYN, LA LAX S - ES, Santa Monica at the Pier - WYN, SF Union Square - MAR and St. Petersburg Vinoy - REN | |||||
| Mortgage debt | $ | 85 | The Knickerbocker | |||||
| Capital Expenditures | ||||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||||||
| June 30, | June 30, | |||||||||||||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||||||||||
| Improvements and additions to majority-owned hotels | $ | 22,459 | $ | 17,901 | $ | 41,921 | $ | 31,909 | ||||||||||||
| Partners’ pro rata share of additions to consolidated joint venture hotels | (29 | ) | (127 | ) | (63 | ) | (225 | ) | ||||||||||||
| Pro rata share of additions to unconsolidated hotels | 88 | 159 | 277 | 417 | ||||||||||||||||
| Total additions to hotels(a) | $ | 22,518 | $ | 17,933 | $ | 42,135 | $ | 32,101 | ||||||||||||
| (a) | Includes capitalized interest, property taxes, property insurance, ground leases and certain employee costs. |
| Total Enterprise Value | ||||||||||
(in thousands, except per share data) | ||||||||||
| June 30, | December 31, | |||||||||
| 2017 | 2016 | |||||||||
| Common shares outstanding | 138,412 | 137,990 | ||||||||
| Units outstanding | 610 | 610 | ||||||||
| Combined shares and units outstanding | 139,022 | 138,600 | ||||||||
| Common stock price | $ | 7.21 | $ | 8.01 | ||||||
| Market capitalization | $ | 1,002,349 | $ | 1,110,186 | ||||||
| Series A preferred stock(a) | 321,987 | 321,987 | ||||||||
| Preferred equity - Knickerbocker joint venture, net | 42,209 | 41,594 | ||||||||
| Consolidated debt (b) | 1,374,874 | 1,354,293 | ||||||||
| Noncontrolling interests of consolidated debt | (4,250 | ) | (4,250 | ) | ||||||
| Pro rata share of unconsolidated debt | 11,026 | 11,167 | ||||||||
| Cash, cash equivalents and restricted cash | (82,334 | ) | (66,808 | ) | ||||||
| Total enterprise value (TEV) | $ | 2,665,861 | $ | 2,768,169 | ||||||
| (a) | Based on liquidation value. | |
| (b) | Excludes unamortized debt issuance costs. |
Hotel Operating Statistics | ||||||||||||||||||||||||||||||||||||
| Occupancy (%) | ADR ($) | RevPAR ($) | ||||||||||||||||||||||||||||||||||
| Three Months Ended June 30, | Three Months Ended June 30, | Three Months Ended June 30, | ||||||||||||||||||||||||||||||||||
Same-store Hotels | 2017 | 2016 | %Change | 2017 | 2016 | %Change | 2017 | 2016 | %Change | |||||||||||||||||||||||||||
| Embassy Suites Atlanta-Buckhead | 71.7 | 80.7 | (11.2 | ) | 144.71 | 154.42 | (6.3 | ) | 103.77 | 124.66 | (16.8 | ) | ||||||||||||||||||||||||
| DoubleTree Suites by Hilton Austin | 87.1 | 88.6 | (1.7 | ) | 224.51 | 217.74 | 3.1 | 195.64 | 193.01 | 1.4 | ||||||||||||||||||||||||||
| Embassy Suites Birmingham | 80.6 | 80.3 | 0.4 | 142.04 | 143.14 | (0.8 | ) | 114.46 | 114.88 | (0.4 | ) | |||||||||||||||||||||||||
| The Fairmont Copley Plaza, Boston | 87.7 | 83.2 | 5.4 | 359.69 | 366.02 | (1.7 | ) | 315.32 | 304.57 | 3.5 | ||||||||||||||||||||||||||
| Wyndham Boston Beacon Hill | 89.5 | 86.9 | 3.0 | 264.45 | 258.35 | 2.4 | 236.77 | 224.62 | 5.4 | |||||||||||||||||||||||||||
| Embassy Suites Boston-Marlborough | 77.1 | 77.2 | (0.1 | ) | 164.34 | 175.60 | (6.4 | ) | 126.66 | 135.52 | (6.5 | ) | ||||||||||||||||||||||||
| Sheraton Burlington Hotel & Conference Center | 73.0 | 72.0 | 1.3 | 125.14 | 123.44 | 1.4 | 91.29 | 88.86 | 2.7 | |||||||||||||||||||||||||||
| The Mills House Wyndham Grand Hotel, Charleston | 88.2 | 91.7 | (3.8 | ) | 273.10 | 262.48 | 4.0 | 240.95 | 240.67 | 0.1 | ||||||||||||||||||||||||||
| Embassy Suites Dallas-Love Field | 81.3 | 78.5 | 3.5 | 147.42 | 141.99 | 3.8 | 119.89 | 111.52 | 7.5 | |||||||||||||||||||||||||||
| Embassy Suites Deerfield Beach-Resort & Spa | 83.1 | 81.3 | 2.2 | 172.33 | 174.71 | (1.4 | ) | 143.14 | 142.02 | 0.8 | ||||||||||||||||||||||||||
| Embassy Suites Fort Lauderdale 17th Street | 82.0 | 79.9 | 2.7 | 152.60 | 157.06 | (2.8 | ) | 125.20 | 125.52 | (0.3 | ) | |||||||||||||||||||||||||
| Wyndham Houston-Medical Center Hotel & Suites | 74.0 | 80.3 | (7.9 | ) | 140.49 | 152.72 | (8.0 | ) | 103.98 | 122.70 | (15.3 | ) | ||||||||||||||||||||||||
| The Knickerbocker- New York | 84.9 | 89.9 | (5.5 | ) | 352.19 | 336.79 | 4.6 | 299.11 | 302.77 | (1.2 | ) | |||||||||||||||||||||||||
| Embassy Suites Los Angeles-International Airport/South | 91.5 | 85.5 | 7.0 | 171.29 | 173.74 | (1.4 | ) | 156.76 | 148.63 | 5.5 | ||||||||||||||||||||||||||
| Embassy Suites Mandalay Beach-Hotel & Resort | 87.9 | 86.4 | 1.8 | 219.95 | 233.46 | (5.8 | ) | 193.44 | 201.60 | (4.0 | ) | |||||||||||||||||||||||||
| Embassy Suites Miami-International Airport | 80.4 | 84.5 | (4.9 | ) | 125.45 | 130.21 | (3.6 | ) | 100.88 | 110.04 | (8.3 | ) | ||||||||||||||||||||||||
| Embassy Suites Milpitas-Silicon Valley | 82.8 | 84.8 | (2.3 | ) | 209.86 | 203.16 | 3.3 | 173.81 | 172.20 | 0.9 | ||||||||||||||||||||||||||
| Embassy Suites Minneapolis-Airport | 79.3 | 78.6 | 0.8 | 144.48 | 157.60 | (8.3 | ) | 114.55 | 123.91 | (7.6 | ) | |||||||||||||||||||||||||
| Embassy Suites Myrtle Beach-Oceanfront Resort | 91.5 | 85.5 | 7.0 | 171.29 | 173.74 | (1.4 | ) | 156.76 | 148.63 | 5.5 | ||||||||||||||||||||||||||
| Hilton Myrtle Beach Resort | 74.5 | 74.3 | 0.2 | 169.01 | 158.89 | 6.4 | 125.91 | 118.12 | 6.6 | |||||||||||||||||||||||||||
| Embassy Suites Napa Valley | 83.2 | 83.6 | (0.4 | ) | 264.84 | 257.77 | 2.7 | 220.48 | 215.39 | 2.4 | ||||||||||||||||||||||||||
| Wyndham New Orleans-French Quarter | 81.6 | 81.2 | 0.4 | 137.06 | 151.61 | (9.6 | ) | 111.82 | 123.14 | (9.2 | ) | |||||||||||||||||||||||||
| Embassy Suites Orlando-International Drive South/Convention Center | 83.7 | 73.3 | 14.2 | 164.86 | 138.31 | 19.2 | 137.94 | 101.34 | 36.1 | |||||||||||||||||||||||||||
| DoubleTree Suites by Hilton Orlando-Lake Buena Vista | 87.4 | 91.7 | (4.6 | ) | 149.69 | 138.99 | 7.7 | 130.84 | 127.39 | 2.7 | ||||||||||||||||||||||||||
| Wyndham Philadelphia Historic District | 84.0 | 85.3 | (1.5 | ) | 171.11 | 163.19 | 4.9 | 143.78 | 139.25 | 3.3 | ||||||||||||||||||||||||||
| Sheraton Philadelphia Society Hill Hotel | 77.9 | 81.4 | (4.3 | ) | 192.03 | 193.05 | (0.5 | ) | 149.65 | 157.15 | (4.8 | ) | ||||||||||||||||||||||||
| Embassy Suites Phoenix-Biltmore | 74.7 | 70.5 | 6.0 | 160.29 | 159.69 | 0.4 | 119.75 | 112.58 | 6.4 | |||||||||||||||||||||||||||
| Wyndham Pittsburgh University Center | 79.8 | 77.7 | 2.7 | 146.85 | 153.69 | (4.5 | ) | 117.20 | 119.43 | (1.9 | ) | |||||||||||||||||||||||||
| Wyndham San Diego Bayside | 80.1 | 77.9 | 2.7 | 162.83 | 161.97 | 0.5 | 130.39 | 126.25 | 3.3 | |||||||||||||||||||||||||||
| Embassy Suites San Francisco Airport-South San Francisco | 91.8 | 89.4 | 2.8 | 190.76 | 208.42 | (8.5 | ) | 175.21 | 186.23 | (5.9 | ) | |||||||||||||||||||||||||
| Embassy Suites San Francisco Airport-Waterfront | 91.7 | 92.0 | (0.3 | ) | 206.58 | 207.43 | (0.4 | ) | 189.41 | 190.75 | (0.7 | ) | ||||||||||||||||||||||||
| Holiday Inn San Francisco-Fisherman’s Wharf | 92.3 | 89.8 | 2.7 | 186.00 | 207.18 | (10.2 | ) | 171.63 | 186.12 | (7.8 | ) | |||||||||||||||||||||||||
| San Francisco Marriott Union Square | 87.2 | 90.8 | (3.9 | ) | 266.56 | 291.00 | (8.4 | ) | 232.40 | 264.08 | (12.0 | ) | ||||||||||||||||||||||||
| Wyndham Santa Monica At the Pier | 90.2 | 87.1 | 3.5 | 265.81 | 273.84 | (2.9 | ) | 239.63 | 238.44 | 0.5 | ||||||||||||||||||||||||||
| Embassy Suites Secaucus-Meadowlands | 82.2 | 79.5 | 3.5 | 183.10 | 188.41 | (2.8 | ) | 150.56 | 149.73 | 0.5 | ||||||||||||||||||||||||||
| The Vinoy Renaissance St. Petersburg Resort & Golf Club | 83.3 | 83.9 | (0.8 | ) | 218.24 | 220.88 | (1.2 | ) | 181.79 | 185.39 | (1.9 | ) | ||||||||||||||||||||||||
Same-store Hotels(a) | 83.2 | 82.8 | 0.4 | 194.81 | 197.55 | (1.4 | ) | 161.98 | 163.62 | (1.0 | ) | |||||||||||||||||||||||||
| (a) | Excludes two hotels held for sale at June 30, 2017. |
Hotel Operating Statistics | ||||||||||||||||||||||||||||||||||||
| Occupancy (%) | ADR ($) | RevPAR ($) | ||||||||||||||||||||||||||||||||||
| Six Months Ended June 30, | Six Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||
Same-store Hotels | 2017 | 2016 | %Change | 2017 | 2016 | %Change | 2017 | 2016 | %Change | |||||||||||||||||||||||||||
| Embassy Suites Atlanta-Buckhead | 72.5 | 80.8 | (10.3 | ) | 155.37 | 156.78 | (0.9 | ) | 112.68 | 126.72 | (11.1 | ) | ||||||||||||||||||||||||
| DoubleTree Suites by Hilton Austin | 86.2 | 85.7 | 0.6 | 237.86 | 228.52 | 4.1 | 205.14 | 195.94 | 4.7 | |||||||||||||||||||||||||||
| Embassy Suites Birmingham | 80.0 | 80.5 | (0.6 | ) | 138.03 | 138.46 | (0.3 | ) | 110.37 | 111.40 | (0.9 | ) | ||||||||||||||||||||||||
| The Fairmont Copley Plaza, Boston | 75.1 | 73.6 | 2.0 | 312.43 | 316.53 | (1.3 | ) | 234.51 | 232.97 | 0.7 | ||||||||||||||||||||||||||
| Wyndham Boston Beacon Hill | 81.4 | 75.4 | 8.0 | 212.86 | 218.60 | (2.6 | ) | 173.23 | 164.74 | 5.2 | ||||||||||||||||||||||||||
| Embassy Suites Boston-Marlborough | 67.1 | 71.0 | (5.5 | ) | 162.69 | 171.95 | (5.4 | ) | 109.17 | 122.04 | (10.5 | ) | ||||||||||||||||||||||||
| Sheraton Burlington Hotel & Conference Center | 68.3 | 70.3 | (2.8 | ) | 109.71 | 108.67 | 0.9 | 74.95 | 76.36 | (1.8 | ) | |||||||||||||||||||||||||
| The Mills House Wyndham Grand Hotel, Charleston | 82.7 | 84.9 | (2.6 | ) | 248.11 | 236.39 | 5.0 | 205.07 | 200.65 | 2.2 | ||||||||||||||||||||||||||
| Embassy Suites Dallas-Love Field | 80.1 | 81.9 | (2.2 | ) | 150.50 | 142.78 | 5.4 | 120.62 | 116.94 | 3.1 | ||||||||||||||||||||||||||
| Embassy Suites Deerfield Beach-Resort & Spa | 83.3 | 84.8 | (1.8 | ) | 212.82 | 224.15 | (5.1 | ) | 177.22 | 189.99 | (6.7 | ) | ||||||||||||||||||||||||
| Embassy Suites Fort Lauderdale 17th Street | 84.7 | 86.6 | (2.3 | ) | 195.54 | 197.07 | (0.8 | ) | 165.59 | 170.75 | (3.0 | ) | ||||||||||||||||||||||||
| Wyndham Houston-Medical Center Hotel & Suites | 75.8 | 83.2 | (8.8 | ) | 152.40 | 156.30 | (2.5 | ) | 115.58 | 130.01 | (11.1 | ) | ||||||||||||||||||||||||
| The Knickerbocker- New York | 77.3 | 74.2 | 4.1 | 315.56 | 308.22 | 2.4 | 243.85 | 228.75 | 6.6 | |||||||||||||||||||||||||||
| Embassy Suites Los Angeles-International Airport/South | 90.7 | 87.8 | 3.3 | 171.21 | 168.08 | 1.9 | 155.26 | 147.52 | 5.2 | |||||||||||||||||||||||||||
| Embassy Suites Mandalay Beach-Hotel & Resort | 81.2 | 81.5 | (0.4 | ) | 204.75 | 221.16 | (7.4 | ) | 166.29 | 180.29 | (7.8 | ) | ||||||||||||||||||||||||
| Embassy Suites Miami-International Airport | 83.1 | 88.0 | (5.6 | ) | 154.89 | 165.04 | (6.1 | ) | 128.65 | 145.23 | (11.4 | ) | ||||||||||||||||||||||||
| Embassy Suites Milpitas-Silicon Valley | 81.3 | 82.8 | (1.7 | ) | 205.14 | 207.29 | (1.0 | ) | 166.83 | 171.56 | (2.8 | ) | ||||||||||||||||||||||||
| Embassy Suites Minneapolis-Airport | 72.9 | 73.7 | (1.1 | ) | 140.61 | 151.13 | (7.0 | ) | 102.48 | 111.36 | (8.0 | ) | ||||||||||||||||||||||||
| Embassy Suites Myrtle Beach-Oceanfront Resort | 90.7 | 87.8 | 3.3 | 171.21 | 168.08 | 1.9 | 155.26 | 147.52 | 5.2 | |||||||||||||||||||||||||||
| Hilton Myrtle Beach Resort | 60.1 | 61.2 | (1.9 | ) | 145.95 | 138.46 | 5.4 | 87.72 | 84.79 | 3.5 | ||||||||||||||||||||||||||
| Embassy Suites Napa Valley | 78.3 | 81.8 | (4.3 | ) | 230.71 | 220.76 | 4.5 | 180.54 | 180.47 | — | ||||||||||||||||||||||||||
| Wyndham New Orleans-French Quarter | 79.9 | 77.5 | 3.1 | 148.36 | 153.40 | (3.3 | ) | 118.49 | 118.84 | (0.3 | ) | |||||||||||||||||||||||||
| Embassy Suites Orlando-International Drive South/Convention Center | 82.4 | 80.7 | 2.1 | 175.29 | 159.03 | 10.2 | 144.48 | 128.35 | 12.6 | |||||||||||||||||||||||||||
| DoubleTree Suites by Hilton Orlando-Lake Buena Vista | 88.6 | 92.0 | (3.6 | ) | 156.28 | 152.24 | 2.7 | 138.54 | 140.00 | (1.0 | ) | |||||||||||||||||||||||||
| Wyndham Philadelphia Historic District | 72.0 | 70.2 | 2.6 | 151.78 | 148.58 | 2.1 | 109.23 | 104.26 | 4.8 | |||||||||||||||||||||||||||
| Sheraton Philadelphia Society Hill Hotel | 67.2 | 68.2 | (1.5 | ) | 174.96 | 176.18 | (0.7 | ) | 117.59 | 120.20 | (2.2 | ) | ||||||||||||||||||||||||
| Embassy Suites Phoenix-Biltmore | 75.9 | 74.3 | 2.1 | 195.33 | 203.61 | (4.1 | ) | 148.16 | 151.23 | (2.0 | ) | |||||||||||||||||||||||||
| Wyndham Pittsburgh University Center | 70.4 | 66.6 | 5.7 | 140.27 | 144.69 | (3.1 | ) | 98.73 | 96.32 | 2.5 | ||||||||||||||||||||||||||
| Wyndham San Diego Bayside | 79.6 | 77.7 | 2.5 | 160.36 | 149.61 | 7.2 | 127.71 | 116.28 | 9.8 | |||||||||||||||||||||||||||
| Embassy Suites San Francisco Airport-South San Francisco | 88.7 | 87.4 | 1.5 | 195.28 | 202.90 | (3.8 | ) | 173.19 | 177.31 | (2.3 | ) | |||||||||||||||||||||||||
| Embassy Suites San Francisco Airport-Waterfront | 88.2 | 88.6 | (0.5 | ) | 210.24 | 205.97 | 2.1 | 185.40 | 182.50 | 1.6 | ||||||||||||||||||||||||||
| Holiday Inn San Francisco-Fisherman’s Wharf | 88.6 | 85.9 | 3.2 | 185.73 | 201.21 | (7.7 | ) | 164.62 | 172.85 | (4.8 | ) | |||||||||||||||||||||||||
| San Francisco Marriott Union Square | 85.2 | 89.7 | (5.0 | ) | 293.18 | 305.12 | (3.9 | ) | 249.90 | 273.65 | (8.7 | ) | ||||||||||||||||||||||||
| Wyndham Santa Monica at the Pier | 87.1 | 87.4 | (0.3 | ) | 261.00 | 266.11 | (1.9 | ) | 227.41 | 232.64 | (2.2 | ) | ||||||||||||||||||||||||
| Embassy Suites Secaucus-Meadowlands | 71.3 | 67.0 | 6.3 | 176.34 | 181.51 | (2.8 | ) | 125.66 | 121.68 | 3.3 | ||||||||||||||||||||||||||
| The Vinoy Renaissance St. Petersburg Resort & Golf Club | 84.7 | 86.0 | (1.5 | ) | 241.55 | 239.00 | 1.1 | 204.70 | 205.65 | (0.5 | ) | |||||||||||||||||||||||||
Same-store Hotels(a) | 79.1 | 79.4 | (0.4 | ) | 192.20 | 193.36 | (0.6 | ) | 151.99 | 153.45 | (1.0 | ) | ||||||||||||||||||||||||
| (a) | Excludes two hotels held for sale at June 30, 2017. |
Historical Quarterly Operating Statistics | |||||||||||||||
| Occupancy (%) | |||||||||||||||
| Q2 2016 | Q3 2016 | Q4 2016 | Q1 2017 | Q2 2017 | |||||||||||
| Same-store hotels(a) | 82.8 | 81.9 | 73.1 | 75.0 | 83.2 | ||||||||||
| ADR ($) | |||||||||||||||
| Q2 2016 | Q3 2016 | Q4 2016 | Q1 2017 | Q2 2017 | |||||||||||
| Same-store hotels(a) | 197.55 | 197.88 | 188.39 | 189.28 | 194.81 | ||||||||||
| RevPAR ($) | |||||||||||||||
| Q2 2016 | Q3 2016 | Q4 2016 | Q1 2017 | Q2 2017 | |||||||||||
| Same-store hotels(a) | 163.62 | 161.98 | 137.71 | 141.88 | 161.98 | ||||||||||
| (a) | Includes 36 consolidated hotels. | |
Non-GAAP Financial Measures
We refer in this release to certain “non-GAAP financial measures.” These measures, including FFO, Adjusted FFO, EBITDA, Adjusted EBITDA, Same-store Adjusted 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.
| Reconciliation of Net Income (Loss) to FFO and Adjusted FFO | ||||||||||||||||||||||||||
| (in thousands, except per share data) | ||||||||||||||||||||||||||
| Three Months Ended June 30, | ||||||||||||||||||||||||||
| 2017 | 2016 | |||||||||||||||||||||||||
| Dollars | Shares | Per Share Amount | Dollars | Shares | Per Share Amount | |||||||||||||||||||||
| Net income (loss) | $ | (1,460 | ) | $ | 13,770 | |||||||||||||||||||||
| Noncontrolling interests | 68 | (15 | ) | |||||||||||||||||||||||
| Preferred dividends | (6,279 | ) | (6,279 | ) | ||||||||||||||||||||||
| Preferred distributions - consolidated joint venture | (367 | ) | (364 | ) | ||||||||||||||||||||||
| Net income (loss) attributable to FelCor common stockholders | (8,038 | ) | 7,112 | |||||||||||||||||||||||
| Less: Dividends declared on unvested restricted stock | (36 | ) | (35 | ) | ||||||||||||||||||||||
| Basic and diluted earnings per share data | (8,074 | ) | 137,866 | $ | (0.06 | ) | 7,077 | 138,182 | $ | 0.05 | ||||||||||||||||
| Restricted stock units | — | — | — | — | 496 | — | ||||||||||||||||||||
| Diluted earnings per share data | (8,074 | ) | 137,866 | (0.06 | ) | 7,077 | 138,678 | 0.05 | ||||||||||||||||||
| Depreciation and amortization | 27,528 | — | 0.20 | 29,177 | — | 0.21 | ||||||||||||||||||||
| Depreciation, unconsolidated entities and other partnerships | 464 | — | — | 469 | — | — | ||||||||||||||||||||
| Loss on sale of hotels | 207 | — | 0.01 | 630 | — | — | ||||||||||||||||||||
| Other gains | (100 | ) | — | — | (100 | ) | — | — | ||||||||||||||||||
| Impairment | 10,271 | — | 0.07 | 6,333 | — | 0.05 | ||||||||||||||||||||
| Noncontrolling interests in FelCor LP | (35 | ) | 610 | — | 31 | 611 | — | |||||||||||||||||||
| Dividends declared on unvested restricted stock | 36 | 65 | — | 35 | 66 | — | ||||||||||||||||||||
| Conversion of unvested restricted stock units | — | 287 | — | — | — | — | ||||||||||||||||||||
| FFO* | 30,297 | 138,828 | 0.22 | 43,652 | 139,355 | 0.31 | ||||||||||||||||||||
| Transaction costs | 5,844 | — | 0.04 | — | — | — | ||||||||||||||||||||
| Severance costs | — | — | — | 27 | — | — | ||||||||||||||||||||
| Abandoned projects | — | — | — | 383 | — | 0.01 | ||||||||||||||||||||
| Variable stock compensation | — | — | — | (789 | ) | — | (0.01 | ) | ||||||||||||||||||
| Litigation settlement | — | — | — | 650 | — | 0.01 | ||||||||||||||||||||
| Pre-opening costs | 532 | — | — | 191 | — | — | ||||||||||||||||||||
| Adjusted FFO* | $ | 36,673 | 138,828 | $ | 0.26 | $ | 44,114 | 139,355 | $ | 0.32 | ||||||||||||||||
| * FFO and Adjusted FFO are attributable to FelCor common stockholders and FelCor LP common unitholders other than FelCor. |
| Reconciliation of Net Income (Loss) to FFO and Adjusted FFO | ||||||||||||||||||||||||||
(in thousands, except per share data) | ||||||||||||||||||||||||||
| Six Months Ended June 30, | ||||||||||||||||||||||||||
| 2017 | 2016 | |||||||||||||||||||||||||
| Dollars | Shares | Per Share Amount | Dollars | Shares | Per Share Amount | |||||||||||||||||||||
| Net income (loss) | $ | (37,601 | ) | $ | 8,689 | |||||||||||||||||||||
| Noncontrolling interests | 658 | 504 | ||||||||||||||||||||||||
| Preferred distributions - consolidated joint venture | (727 | ) | (724 | ) | ||||||||||||||||||||||
| Preferred dividends | (12,558 | ) | (12,558 | ) | ||||||||||||||||||||||
| Net loss attributable to FelCor common stockholders | (50,228 | ) | (4,089 | ) | ||||||||||||||||||||||
| Less: Dividends declared on unvested restricted stock | (73 | ) | (73 | ) | ||||||||||||||||||||||
| Basic and diluted earnings per share data | (50,301 | ) | 137,820 | $ | (0.36 | ) | (4,162 | ) | 138,930 | $ | (0.03 | ) | ||||||||||||||
| Depreciation and amortization | 55,366 | — | 0.39 | 58,360 | — | 0.42 | ||||||||||||||||||||
| Depreciation, unconsolidated entities and other partnerships | 918 | — | 0.01 | 936 | — | 0.01 | ||||||||||||||||||||
| Other gains | (100 | ) | — | — | (100 | ) | — | — | ||||||||||||||||||
| Impairment | 35,109 | — | 0.25 | 6,333 | — | 0.05 | ||||||||||||||||||||
| Loss on sale of hotels | 873 | — | 0.01 | 1,344 | — | — | ||||||||||||||||||||
| Noncontrolling interests in FelCor LP | (221 | ) | 610 | — | (17 | ) | 611 | — | ||||||||||||||||||
| Dividends declared on unvested restricted stock | 73 | 47 | — | 73 | 22 | — | ||||||||||||||||||||
| Conversion of unvested restricted stock units | — | 239 | — | — | 451 | — | ||||||||||||||||||||
| FFO* | 41,717 | 138,716 | 0.30 | 62,767 | 140,014 | 0.45 | ||||||||||||||||||||
| Hurricane loss | 17 | — | — | — | — | — | ||||||||||||||||||||
| Hurricane loss, unconsolidated entities | 4 | — | — | — | — | — | ||||||||||||||||||||
| Severance costs | — | — | — | 27 | — | — | ||||||||||||||||||||
| Transaction costs | 6,317 | — | 0.05 | — | — | — | ||||||||||||||||||||
| Abandoned projects | — | — | — | 615 | — | — | ||||||||||||||||||||
| Variable stock compensation | — | — | — | (27 | ) | — | — | |||||||||||||||||||
| Litigation settlement | — | — | — | 650 | — | 0.01 | ||||||||||||||||||||
| Pre-opening costs | 665 | — | — | 245 | — | — | ||||||||||||||||||||
| Adjusted FFO* | $ | 48,720 | 138,716 | $ | 0.35 | $ | 64,277 | 140,014 | $ | 0.46 | ||||||||||||||||
* FFO and Adjusted FFO are attributable to FelCor common stockholders and FelCor LP common unitholders other than FelCor. |
| Reconciliation of Net Income (Loss) to EBITDA, Adjusted EBITDA and Same-store Adjusted EBITDA | ||||||||||||||||||||
(in thousands) | ||||||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||||||
| June 30, | June 30, | |||||||||||||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||||||||||
| Net income (loss) | $ | (1,460 | ) | $ | 13,770 | $ | (37,601 | ) | $ | 8,689 | ||||||||||
| Depreciation and amortization | 27,528 | 29,177 | 55,366 | 58,360 | ||||||||||||||||
| Depreciation, unconsolidated entities and other partnerships | 464 | 469 | 918 | 936 | ||||||||||||||||
| Interest expense | 19,462 | 19,923 | 38,782 | 39,655 | ||||||||||||||||
| Interest expense, unconsolidated entities and other partnerships | 81 | 90 | 165 | 190 | ||||||||||||||||
| Income tax | 503 | (25 | ) | 1,050 | 390 | |||||||||||||||
| Noncontrolling interests in preferred distributions, consolidated joint venture | (18 | ) | (18 | ) | (36 | ) | (36 | ) | ||||||||||||
| Noncontrolling interests in other partnerships | 33 | 16 | 437 | 487 | ||||||||||||||||
| EBITDA* | 46,593 | 63,402 | 59,081 | 108,671 | ||||||||||||||||
| Impairment | 10,271 | 6,333 | 35,109 | 6,333 | ||||||||||||||||
| Hurricane loss | — | — | 17 | — | ||||||||||||||||
| Hurricane loss, unconsolidated entities | — | — | 4 | — | ||||||||||||||||
| Loss on sale of hotels | 207 | 630 | 873 | 1,344 | ||||||||||||||||
| Other gains | (100 | ) | (100 | ) | (100 | ) | (100 | ) | ||||||||||||
| Amortization of fixed stock and directors’ compensation | 1,394 | 1,693 | 2,988 | 3,627 | ||||||||||||||||
| Severance costs | — | 27 | — | 27 | ||||||||||||||||
| Transaction costs | 5,844 | — | 6,317 | — | ||||||||||||||||
| Abandoned projects | — | 383 | — | 615 | ||||||||||||||||
| Variable stock compensation | — | (789 | ) | — | (27 | ) | ||||||||||||||
| Litigation settlement | — | 650 | — | 650 | ||||||||||||||||
| Pre-opening costs | 532 | 191 | 665 | 245 | ||||||||||||||||
| Adjusted EBITDA* | 64,741 | 72,420 | 104,954 | 121,385 | ||||||||||||||||
| Adjusted EBITDA from held for sale and sold hotels | 293 | (4,516 | ) | 2,014 | (9,011 | ) | ||||||||||||||
| Same-store Adjusted EBITDA* | $ | 65,034 | $ | 67,904 | $ | 106,968 | $ | 112,374 | ||||||||||||
| * EBITDA, Adjusted EBITDA and Same-store Adjusted EBITDA are attributable to FelCor common stockholders and FelCor LP unitholders other than FelCor. |
| Hotel EBITDA and Hotel EBITDA Margin | ||||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||||||
| June 30, | June 30, | |||||||||||||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||||||||||
| Same-store operating revenue: | ||||||||||||||||||||
| Room | $ | 162,792 | $ | 164,439 | $ | 303,817 | $ | 308,439 | ||||||||||||
| Food and beverage | 36,977 | 37,501 | 67,912 | 68,195 | ||||||||||||||||
| Other operating departments | 12,150 | 10,795 | 22,310 | 20,725 | ||||||||||||||||
| Same-store operating revenue(a) | 211,919 | 212,735 | 394,039 | 397,359 | ||||||||||||||||
| Same-store operating expense: | ||||||||||||||||||||
| Room | 40,467 | 39,585 | 78,298 | 77,135 | ||||||||||||||||
| Food and beverage | 26,948 | 27,395 | 51,790 | 52,372 | ||||||||||||||||
| Other operating departments | 3,834 | 3,613 | 7,250 | 7,025 | ||||||||||||||||
| Other property-related costs | 50,058 | 49,074 | 98,894 | 97,894 | ||||||||||||||||
| Management and franchise fees | 7,727 | 7,786 | 15,151 | 16,245 | ||||||||||||||||
| Taxes, insurance and lease expense | 13,693 | 12,946 | 26,409 | 24,851 | ||||||||||||||||
| Same-store operating expense(a) | 142,727 | 140,399 | 277,792 | 275,522 | ||||||||||||||||
| Hotel EBITDA | $ | 69,192 | $ | 72,336 | $ | 116,247 | $ | 121,837 | ||||||||||||
| Hotel EBITDA Margin | 32.7 | % | 34.0 | % | 29.5 | % | 30.7 | % | ||||||||||||
| (a) | Excludes two hotels held for sale at June 30, 2017. | |
The following tables set forth the components of our Hotel EBITDA for our same-store hotels (dollars in thousands):
Three months ended June 30, 2017 | ||||||||||||||||||||||||||||||||
Same-store Hotels | Hotel Operating Revenue | Net Income (Loss) | Other Adjustments | Depreciation | Interest Expense | Hotel EBITDA | Hotel EBITDA Margin | |||||||||||||||||||||||||
| Embassy Suites Atlanta-Buckhead | $ | 3,341 | $ | 623 | $ | — | $ | 504 | $ | — | $ | 1,127 | 33.7 | % | ||||||||||||||||||
| DoubleTree Suites by Hilton Austin | 4,035 | 1,177 | — | 455 | 161 | 1,793 | 44.4 | % | ||||||||||||||||||||||||
| Embassy Suites Birmingham | 2,701 | 319 | — | 402 | 292 | 1,013 | 37.5 | % | ||||||||||||||||||||||||
| The Fairmont Copley Plaza, Boston | 18,378 | 2,247 | 1 | 2,194 | 412 | 4,854 | 26.4 | % | ||||||||||||||||||||||||
| Wyndham Boston Beacon Hill | 7,318 | 2,504 | — | 951 | — | 3,455 | 47.2 | % | ||||||||||||||||||||||||
| Embassy Suites Boston-Marlborough | 2,995 | 731 | — | 291 | — | 1,022 | 34.1 | % | ||||||||||||||||||||||||
| Sheraton Burlington Hotel & Conference Center | 3,686 | 525 | — | 629 | — | 1,154 | 31.3 | % | ||||||||||||||||||||||||
| The Mills House Wyndham Grand Hotel, Charleston | 6,203 | 2,219 | — | 596 | 212 | 3,027 | 48.8 | % | ||||||||||||||||||||||||
| Embassy Suites Dallas-Love Field | 3,131 | 410 | — | 618 | — | 1,028 | 32.8 | % | ||||||||||||||||||||||||
| Embassy Suites Deerfield Beach-Resort & Spa | 4,184 | 474 | — | 457 | 390 | 1,321 | 31.6 | % | ||||||||||||||||||||||||
| Embassy Suites Fort Lauderdale 17th Street | 5,007 | 223 | — | 708 | 439 | 1,370 | 27.4 | % | ||||||||||||||||||||||||
| Wyndham Houston-Medical Center Hotel & Suites | 3,115 | 715 | (19 | ) | 519 | — | 1,215 | 39.0 | % | |||||||||||||||||||||||
| The Knickerbocker- New York | 12,242 | (293 | ) | 85 | 2,570 | 981 | 3,343 | 27.3 | % | |||||||||||||||||||||||
| Embassy Suites Los Angeles-International Airport/South | 6,017 | 1,561 | — | 628 | 241 | 2,430 | 40.4 | % | ||||||||||||||||||||||||
| Embassy Suites Mandalay Beach-Hotel & Resort | 5,788 | 1,491 | — | 766 | — | 2,257 | 39.0 | % | ||||||||||||||||||||||||
| Embassy Suites Miami-International Airport | 3,631 | 59 | — | 462 | — | 521 | 14.3 | % | ||||||||||||||||||||||||
| Embassy Suites Milpitas-Silicon Valley | 4,869 | 1,740 | — | 307 | — | 2,047 | 42.0 | % | ||||||||||||||||||||||||
| Embassy Suites Minneapolis-Airport | 3,350 | 418 | — | 362 | 463 | 1,243 | 37.1 | % | ||||||||||||||||||||||||
| Embassy Suites Myrtle Beach-Oceanfront Resort | 7,305 | 1,852 | 263 | 652 | — | 2,767 | 37.9 | % | ||||||||||||||||||||||||
| Hilton Myrtle Beach Resort | 7,376 | 2,416 | — | 898 | — | 3,314 | 44.9 | % | ||||||||||||||||||||||||
| Embassy Suites Napa Valley | 4,815 | 1,230 | 3 | 476 | 339 | 2,048 | 42.5 | % | ||||||||||||||||||||||||
| Wyndham New Orleans-French Quarter | 4,240 | 1,229 | — | 714 | — | 1,943 | 45.8 | % | ||||||||||||||||||||||||
| Embassy Suites Orlando-International Drive South/Convention Center | 3,236 | 485 | — | 537 | — | 1,022 | 31.6 | % | ||||||||||||||||||||||||
| DoubleTree Suites by Hilton Orlando-Lake Buena Vista | 3,284 | 110 | — | 758 | — | 868 | 26.4 | % | ||||||||||||||||||||||||
| Wyndham Philadelphia Historic District | 5,894 | 1,957 | — | 678 | — | 2,635 | 44.7 | % | ||||||||||||||||||||||||
| Sheraton Philadelphia Society Hill Hotel | 7,129 | 1,645 | — | 962 | — | 2,607 | 36.6 | % | ||||||||||||||||||||||||
| Embassy Suites Phoenix-Biltmore | 2,643 | 325 | — | 436 | — | 761 | 28.8 | % | ||||||||||||||||||||||||
| Wyndham Pittsburgh University Center | 3,457 | 840 | — | 501 | — | 1,341 | 38.8 | % | ||||||||||||||||||||||||
| Wyndham San Diego Bayside | 8,833 | 1,049 | — | 1,557 | — | 2,606 | 29.5 | % | ||||||||||||||||||||||||
| Embassy Suites San Francisco Airport-South San Francisco | 5,925 | 1,585 | — | 422 | — | 2,007 | 33.9 | % | ||||||||||||||||||||||||
| Embassy Suites San Francisco Airport-Waterfront | 7,010 | 1,594 | — | 739 | — | 2,333 | 33.3 | % | ||||||||||||||||||||||||
| Holiday Inn San Francisco-Fisherman’s Wharf | 10,346 | 458 | — | 614 | — | 1,072 | 10.4 | % | ||||||||||||||||||||||||
| San Francisco Marriott Union Square | 9,614 | 805 | (110 | ) | 1,300 | 495 | 2,490 | 25.9 | % | |||||||||||||||||||||||
| Wyndham Santa Monica at the Pier | 3,148 | 975 | — | 259 | 167 | 1,401 | 44.5 | % | ||||||||||||||||||||||||
| Embassy Suites Secaucus-Meadowlands | 3,786 | 740 | 5 | 118 | — | 863 | 22.8 | % | ||||||||||||||||||||||||
| The Vinoy Renaissance St. Petersburg Resort & Golf Club | 13,887 | 812 | 267 | 1,463 | 352 | 2,894 | 20.8 | % | ||||||||||||||||||||||||
| $ | 211,919 | $ | 37,250 | $ | 495 | $ | 26,503 | $ | 4,944 | $ | 69,192 | 32.7 | % | |||||||||||||||||||
Three months ended June 30, 2016 | |||||||||||||||||||||||||||||||
Same-store Hotels | Hotel Operating Revenue | Net Income (Loss) | Other Adjustments | Depreciation | Interest Expense | Hotel EBITDA | Hotel EBITDA Margin | ||||||||||||||||||||||||
| Embassy Suites Atlanta-Buckhead | $ | 3,928 | $ | 934 | $ | — | $ | 604 | $ | — | $ | 1,538 | 39.2 | % | |||||||||||||||||
| DoubleTree Suites by Hilton Austin | 3,901 | 955 | — | 492 | 190 | 1,637 | 42.0 | % | |||||||||||||||||||||||
| Embassy Suites Birmingham | 2,688 | 363 | — | 394 | 297 | 1,054 | 39.2 | % | |||||||||||||||||||||||
| The Fairmont Copley Plaza, Boston | 17,788 | 2,386 | — | 2,198 | 485 | 5,069 | 28.5 | % | |||||||||||||||||||||||
| Wyndham Boston Beacon Hill | 7,017 | 2,477 | — | 981 | — | 3,458 | 49.3 | % | |||||||||||||||||||||||
| Embassy Suites Boston-Marlborough | 3,203 | 850 | — | 297 | — | 1,147 | 35.8 | % | |||||||||||||||||||||||
| Sheraton Burlington Hotel & Conference Center | 3,979 | 584 | — | 622 | — | 1,206 | 30.3 | % | |||||||||||||||||||||||
| The Mills House Wyndham Grand Hotel, Charleston | 6,457 | 2,346 | — | 632 | 249 | 3,227 | 50.0 | % | |||||||||||||||||||||||
| Embassy Suites Dallas-Love Field | 2,875 | 535 | — | 349 | — | 884 | 30.7 | % | |||||||||||||||||||||||
| Embassy Suites Deerfield Beach-Resort & Spa | 4,233 | 429 | — | 476 | 397 | 1,302 | 30.8 | % | |||||||||||||||||||||||
| Embassy Suites Fort Lauderdale 17th Street | 5,092 | 242 | — | 712 | 447 | 1,401 | 27.5 | % | |||||||||||||||||||||||
| Wyndham Houston-Medical Center Hotel & Suites | 3,630 | 1,294 | (19 | ) | 550 | — | 1,825 | 50.3 | % | ||||||||||||||||||||||
| The Knickerbocker- New York | 11,736 | (859 | ) | 86 | 2,581 | 860 | 2,668 | 22.7 | % | ||||||||||||||||||||||
| Embassy Suites Los Angeles-International Airport/South | 5,548 | 1,328 | — | 634 | 285 | 2,247 | 40.5 | % | |||||||||||||||||||||||
| Embassy Suites Mandalay Beach-Hotel & Resort | 5,890 | 1,694 | — | 771 | — | 2,465 | 41.9 | % | |||||||||||||||||||||||
| Embassy Suites Miami-International Airport | 3,934 | 285 | — | 456 | — | 741 | 18.8 | % | |||||||||||||||||||||||
| Embassy Suites Milpitas-Silicon Valley | 4,706 | 1,551 | — | 301 | — | 1,852 | 39.4 | % | |||||||||||||||||||||||
| Embassy Suites Minneapolis-Airport | 3,630 | 477 | — | 433 | 472 | 1,382 | 38.1 | % | |||||||||||||||||||||||
| Embassy Suites Myrtle Beach-Oceanfront Resort | 6,857 | 1,575 | 227 | 658 | — | 2,460 | 35.9 | % | |||||||||||||||||||||||
| Hilton Myrtle Beach Resort | 6,666 | 1,888 | — | 875 | — | 2,763 | 41.4 | % | |||||||||||||||||||||||
| Embassy Suites Napa Valley | 4,518 | 1,095 | — | 518 | 345 | 1,958 | 43.3 | % | |||||||||||||||||||||||
| Wyndham New Orleans-French Quarter | 4,573 | 1,492 | — | 721 | — | 2,213 | 48.4 | % | |||||||||||||||||||||||
| Embassy Suites Orlando-International Drive South/Convention Center | 2,318 | 304 | — | 269 | — | 573 | 24.7 | % | |||||||||||||||||||||||
| DoubleTree Suites by Hilton Orlando-Lake Buena Vista | 3,259 | 93 | — | 775 | — | 868 | 26.6 | % | |||||||||||||||||||||||
| Wyndham Philadelphia Historic District | 5,831 | 1,819 | 10 | 734 | — | 2,563 | 44.0 | % | |||||||||||||||||||||||
| Sheraton Philadelphia Society Hill Hotel | 8,026 | 1,887 | — | 974 | — | 2,861 | 35.6 | % | |||||||||||||||||||||||
| Embassy Suites Phoenix-Biltmore | 2,640 | 403 | — | 431 | — | 834 | 31.6 | % | |||||||||||||||||||||||
| Wyndham Pittsburgh University Center | 3,473 | 806 | 3 | 516 | — | 1,325 | 38.2 | % | |||||||||||||||||||||||
| Wyndham San Diego Bayside | 8,163 | 1,275 | — | 1,560 | — | 2,835 | 34.7 | % | |||||||||||||||||||||||
| Embassy Suites San Francisco Airport-South San Francisco | 6,302 | 1,935 | — | 415 | — | 2,350 | 37.3 | % | |||||||||||||||||||||||
| Embassy Suites San Francisco Airport-Waterfront | 7,003 | 1,149 | 650 | 763 | — | 2,562 | 36.6 | % | |||||||||||||||||||||||
| Holiday Inn San Francisco-Fisherman’s Wharf | 10,925 | 1,447 | — | 495 | — | 1,942 | 17.8 | % | |||||||||||||||||||||||
| San Francisco Marriott Union Square | 10,809 | 1,372 | (102 | ) | 1,342 | 583 | 3,195 | 29.6 | % | ||||||||||||||||||||||
| Wyndham Santa Monica at the Pier | 3,108 | 1,316 | 1 | 279 | 197 | 1,793 | 57.7 | % | |||||||||||||||||||||||
| Embassy Suites Secaucus-Meadowlands | 3,764 | 782 | 1 | 122 | — | 905 | 24.0 | % | |||||||||||||||||||||||
| The Vinoy Renaissance St. Petersburg Resort & Golf Club | 14,265 | 1,212 | 179 | 1,427 | 415 | 3,233 | 22.7 | % | |||||||||||||||||||||||
| $ | 212,735 | $ | 39,721 | $ | 1,036 | $ | 26,357 | $ | 5,222 | $ | 72,336 | 34.0 | % | ||||||||||||||||||
Six months ended June 30, 2017 | |||||||||||||||||||||||||||||||
Same-store Hotels | Hotel Operating Revenue | Net Income (Loss) | Other Adjustments | Depreciation | Interest Expense | Hotel EBITDA | Hotel EBITDA Margin | ||||||||||||||||||||||||
| Embassy Suites Atlanta-Buckhead | $ | 7,179 | $ | 1,650 | $ | — | $ | 1,023 | $ | — | $ | 2,673 | 37.2 | % | |||||||||||||||||
| DoubleTree Suites by Hilton Austin | 8,502 | 2,618 | — | 920 | 313 | 3,851 | 45.3 | % | |||||||||||||||||||||||
| Embassy Suites Birmingham | 5,162 | 444 | 1 | 802 | 582 | 1,829 | 35.4 | % | |||||||||||||||||||||||
| The Fairmont Copley Plaza, Boston | 27,985 | (1,774 | ) | 1 | 4,427 | 799 | 3,453 | 12.3 | % | ||||||||||||||||||||||
| Wyndham Boston Beacon Hill | 10,912 | 2,130 | — | 1,937 | — | 4,067 | 37.3 | % | |||||||||||||||||||||||
| Embassy Suites Boston-Marlborough | 5,162 | 898 | — | 579 | — | 1,477 | 28.6 | % | |||||||||||||||||||||||
| Sheraton Burlington Hotel & Conference Center | 6,240 | 96 | — | 1,249 | — | 1,345 | 21.6 | % | |||||||||||||||||||||||
| The Mills House Wyndham Grand Hotel, Charleston | 10,879 | 3,079 | — | 1,213 | 411 | 4,703 | 43.2 | % | |||||||||||||||||||||||
| Embassy Suites Dallas-Love Field | 6,263 | 763 | — | 1,225 | — | 1,988 | 31.7 | % | |||||||||||||||||||||||
| Embassy Suites Deerfield Beach-Resort & Spa | 9,804 | 2,259 | — | 925 | 778 | 3,962 | 40.4 | % | |||||||||||||||||||||||
| Embassy Suites Fort Lauderdale 17th Street | 12,672 | 2,563 | 1 | 1,422 | 875 | 4,861 | 38.4 | % | |||||||||||||||||||||||
| Wyndham Houston-Medical Center Hotel & Suites | 6,825 | 1,871 | (39 | ) | 1,060 | — | 2,892 | 42.4 | % | ||||||||||||||||||||||
| The Knickerbocker-New York | 19,824 | (4,718 | ) | 363 | 5,134 | 1,901 | 2,680 | 13.5 | % | ||||||||||||||||||||||
| Embassy Suites Los Angeles-International Airport/South | 11,925 | 3,013 | — | 1,257 | 469 | 4,739 | 39.7 | % | |||||||||||||||||||||||
| Embassy Suites Mandalay Beach-Hotel & Resort | 9,847 | 1,862 | — | 1,538 | — | 3,400 | 34.5 | % | |||||||||||||||||||||||
| Embassy Suites Miami-International Airport | 9,054 | 1,560 | — | 922 | — | 2,482 | 27.4 | % | |||||||||||||||||||||||
| Embassy Suites Milpitas-Silicon Valley | 9,465 | 3,095 | — | 615 | — | 3,710 | 39.2 | % | |||||||||||||||||||||||
| Embassy Suites Minneapolis-Airport | 5,973 | 225 | 1 | 727 | 924 | 1,877 | 31.4 | % | |||||||||||||||||||||||
| Embassy Suites Myrtle Beach-Oceanfront Resort | 11,103 | 1,410 | 266 | 1,306 | — | 2,982 | 26.9 | % | |||||||||||||||||||||||
| Hilton Myrtle Beach Resort | 10,335 | 1,359 | 14 | 1,783 | — | 3,156 | 30.5 | % | |||||||||||||||||||||||
| Embassy Suites Napa Valley | 8,168 | 1,296 | 3 | 959 | 676 | 2,934 | 35.9 | % | |||||||||||||||||||||||
| Wyndham New Orleans-French Quarter | 8,877 | 2,738 | — | 1,431 | — | 4,169 | 47.0 | % | |||||||||||||||||||||||
| Embassy Suites Orlando-International Drive South/Convention Center | 6,655 | 1,309 | — | 956 | — | 2,265 | 34.0 | % | |||||||||||||||||||||||
| DoubleTree Suites by Hilton Orlando-Lake Buena Vista | 6,954 | 454 | — | 1,523 | — | 1,977 | 28.4 | % | |||||||||||||||||||||||
| Wyndham Philadelphia Historic District | 9,075 | 1,702 | (3 | ) | 1,399 | — | 3,098 | 34.1 | % | ||||||||||||||||||||||
| Sheraton Philadelphia Society Hill Hotel | 11,716 | 1,285 | — | 1,929 | — | 3,214 | 27.4 | % | |||||||||||||||||||||||
| Embassy Suites Phoenix-Biltmore | 6,455 | 1,721 | — | 871 | — | 2,592 | 40.2 | % | |||||||||||||||||||||||
| Wyndham Pittsburgh University Center | 5,791 | 739 | — | 997 | — | 1,736 | 30.0 | % | |||||||||||||||||||||||
| Wyndham San Diego Bayside | 17,344 | 1,802 | — | 3,115 | — | 4,917 | 28.3 | % | |||||||||||||||||||||||
| Embassy Suites San Francisco Airport-South San Francisco | 11,600 | 2,887 | — | 865 | — | 3,752 | 32.3 | % | |||||||||||||||||||||||
| Embassy Suites San Francisco Airport-Waterfront | 13,663 | 2,917 | 1 | 1,524 | — | 4,442 | 32.5 | % | |||||||||||||||||||||||
| Holiday Inn San Francisco-Fisherman’s Wharf | 19,627 | 468 | — | 1,222 | — | 1,690 | 8.6 | % | |||||||||||||||||||||||
| San Francisco Marriott Union Square | 20,889 | 2,787 | (116 | ) | 2,603 | 961 | 6,235 | 29.8 | % | ||||||||||||||||||||||
| Wyndham Santa Monica at the Pier | 5,938 | 1,969 | — | 522 | 324 | 2,815 | 47.4 | % | |||||||||||||||||||||||
| Embassy Suites Secaucus-Meadowlands | 6,349 | 653 | 6 | 222 | — | 881 | 13.9 | % | |||||||||||||||||||||||
| The Vinoy Renaissance St. Petersburg Resort & Golf Club | 29,827 | 3,385 | 407 | 2,928 | 683 | 7,403 | 24.8 | % | |||||||||||||||||||||||
| $ | 394,039 | $ | 52,515 | $ | 906 | $ | 53,130 | $ | 9,696 | $ | 116,247 | 29.5 | % | ||||||||||||||||||
Six months ended June 30, 2016 | |||||||||||||||||||||||||||||||
Same-store Hotels | Hotel Operating Revenue | Net Income (Loss) | Other Adjustments | Depreciation | Interest Expense | Hotel EBITDA | Hotel EBITDA Margin | ||||||||||||||||||||||||
| Embassy Suites Atlanta-Buckhead | $ | 7,970 | $ | 2,037 | $ | — | $ | 1,238 | $ | — | $ | 3,275 | 41.1 | % | |||||||||||||||||
| DoubleTree Suites by Hilton Austin | 7,886 | 2,158 | — | 974 | 372 | 3,504 | 44.4 | % | |||||||||||||||||||||||
| Embassy Suites Birmingham | 5,226 | 594 | 1 | 784 | 595 | 1,974 | 37.8 | % | |||||||||||||||||||||||
| The Fairmont Copley Plaza, Boston | 27,825 | (757 | ) | (91 | ) | 4,377 | 950 | 4,479 | 16.1 | % | |||||||||||||||||||||
| Wyndham Boston Beacon Hill | 10,486 | 1,983 | — | 1,972 | — | 3,955 | 37.7 | % | |||||||||||||||||||||||
| Embassy Suites Boston-Marlborough | 5,771 | 1,224 | — | 593 | — | 1,817 | 31.5 | % | |||||||||||||||||||||||
| Sheraton Burlington Hotel & Conference Center | 6,690 | 179 | — | 1,243 | — | 1,422 | 21.3 | % | |||||||||||||||||||||||
| The Mills House Wyndham Grand Hotel, Charleston | 11,123 | 3,178 | — | 1,269 | 489 | 4,936 | 44.4 | % | |||||||||||||||||||||||
| Embassy Suites Dallas-Love Field | 5,982 | 1,176 | — | 686 | — | 1,862 | 31.1 | % | |||||||||||||||||||||||
| Embassy Suites Deerfield Beach-Resort & Spa | 10,428 | 2,529 | — | 953 | 796 | 4,278 | 41.0 | % | |||||||||||||||||||||||
| Embassy Suites Fort Lauderdale 17th Street | 13,048 | 2,713 | 1 | 1,424 | 895 | 5,033 | 38.6 | % | |||||||||||||||||||||||
| Wyndham Houston-Medical Center Hotel & Suites | 7,644 | 2,560 | (38 | ) | 1,104 | — | 3,626 | 47.4 | % | ||||||||||||||||||||||
| The Knickerbocker-New York | 17,690 | (5,814 | ) | 346 | 5,152 | 1,562 | 1,246 | 7.0 | % | ||||||||||||||||||||||
| Embassy Suites Los Angeles-International Airport/South | 11,221 | 2,558 | — | 1,276 | 558 | 4,392 | 39.1 | % | |||||||||||||||||||||||
| Embassy Suites Mandalay Beach-Hotel & Resort | 10,506 | 2,548 | — | 1,542 | — | 4,090 | 38.9 | % | |||||||||||||||||||||||
| Embassy Suites Miami-International Airport | 10,047 | 2,175 | — | 927 | — | 3,102 | 30.9 | % | |||||||||||||||||||||||
| Embassy Suites Milpitas-Silicon Valley | 9,477 | 3,070 | — | 603 | — | 3,673 | 38.8 | % | |||||||||||||||||||||||
| Embassy Suites Minneapolis-Airport | 6,556 | 347 | 1 | 877 | 945 | 2,170 | 33.1 | % | |||||||||||||||||||||||
| Embassy Suites Myrtle Beach-Oceanfront Resort | 11,051 | 1,343 | 228 | 1,333 | — | 2,904 | 26.3 | % | |||||||||||||||||||||||
| Hilton Myrtle Beach Resort | 9,720 | 930 | — | 1,723 | — | 2,653 | 27.3 | % | |||||||||||||||||||||||
| Embassy Suites Napa Valley | 8,072 | 1,246 | 1 | 1,035 | 691 | 2,973 | 36.8 | % | |||||||||||||||||||||||
| Wyndham New Orleans-French Quarter | 8,931 | 2,701 | — | 1,437 | — | 4,138 | 46.3 | % | |||||||||||||||||||||||
| Embassy Suites Orlando-International Drive South/Convention Center | 5,879 | 1,405 | — | 540 | — | 1,945 | 33.1 | % | |||||||||||||||||||||||
| DoubleTree Suites by Hilton Orlando-Lake Buena Vista | 7,156 | 587 | — | 1,541 | — | 2,128 | 29.7 | % | |||||||||||||||||||||||
| Wyndham Philadelphia Historic District | 8,855 | 1,308 | 10 | 1,483 | — | 2,801 | 31.6 | % | |||||||||||||||||||||||
| Sheraton Philadelphia Society Hill Hotel | 12,389 | 1,269 | — | 1,953 | — | 3,222 | 26.0 | % | |||||||||||||||||||||||
| Embassy Suites Phoenix-Biltmore | 6,790 | 2,039 | — | 869 | — | 2,908 | 42.8 | % | |||||||||||||||||||||||
| Wyndham Pittsburgh University Center | 5,615 | 484 | 3 | 1,035 | — | 1,522 | 27.1 | % | |||||||||||||||||||||||
| Wyndham San Diego Bayside | 15,245 | 1,330 | — | 3,131 | — | 4,461 | 29.3 | % | |||||||||||||||||||||||
| Embassy Suites San Francisco Airport-South San Francisco | 12,025 | 3,384 | — | 827 | — | 4,211 | 35.0 | % | |||||||||||||||||||||||
| Embassy Suites San Francisco Airport-Waterfront | 13,534 | 2,513 | 650 | 1,512 | — | 4,675 | 34.5 | % | |||||||||||||||||||||||
| Holiday Inn San Francisco-Fisherman’s Wharf | 20,396 | 1,743 | — | 975 | — | 2,718 | 13.3 | % | |||||||||||||||||||||||
| San Francisco Marriott Union Square | 22,738 | 3,745 | (104 | ) | 2,712 | 1,143 | 7,496 | 33.0 | % | ||||||||||||||||||||||
| Wyndham Santa Monica at the Pier | 6,080 | 2,306 | 1 | 562 | 386 | 3,255 | 53.5 | % | |||||||||||||||||||||||
| Embassy Suites Secaucus-Meadowlands | 6,141 | 543 | 1 | 243 | — | 787 | 12.8 | % | |||||||||||||||||||||||
| The Vinoy Renaissance St. Petersburg Resort & Golf Club | 31,166 | 4,292 | 233 | 2,869 | 812 | 8,206 | 26.3 | % | |||||||||||||||||||||||
| $ | 397,359 | $ | 57,626 | $ | 1,243 | $ | 52,774 | $ | 10,194 | $ | 121,837 | 30.7 | % | ||||||||||||||||||
| Reconciliation of Same-store Operating Revenue and Same-store Operating Expense to Total | ||||||||||||||||||||
| Revenue, Total Operating Expense and Operating Income | ||||||||||||||||||||
(in thousands) | ||||||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||||||
| June 30, | June 30, | |||||||||||||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||||||||||
| Same-store operating revenue | $ | 211,919 | $ | 212,735 | $ | 394,039 | $ | 397,359 | ||||||||||||
| Other revenue | 1,324 | 1,145 | 1,732 | 1,832 | ||||||||||||||||
| Revenue from held for sale and sold hotels(a) | 7,197 | 24,026 | 12,773 | 48,859 | ||||||||||||||||
| Total revenue | 220,440 | 237,906 | 408,544 | 448,050 | ||||||||||||||||
| Same-store operating expense | 142,727 | 140,399 | 277,792 | 275,522 | ||||||||||||||||
| Consolidated hotel lease expense(b) | 1,430 | 1,359 | 2,245 | 2,161 | ||||||||||||||||
| Unconsolidated taxes, insurance and lease expense | (536 | ) | (517 | ) | (973 | ) | (969 | ) | ||||||||||||
| Corporate expenses | 6,281 | 6,047 | 13,221 | 14,447 | ||||||||||||||||
| Depreciation and amortization | 27,528 | 29,177 | 55,366 | 58,360 | ||||||||||||||||
| Impairment | 10,271 | 6,333 | 35,109 | 6,333 | ||||||||||||||||
| Expenses from held for sale and sold hotels(a) | 7,490 | 19,510 | 14,787 | 39,848 | ||||||||||||||||
| Other expenses | 7,331 | 2,142 | 8,591 | 2,970 | ||||||||||||||||
| Total operating expense | 202,522 | 204,450 | 406,138 | 398,672 | ||||||||||||||||
| Operating income | $ | 17,918 | $ | 33,456 | $ | 2,406 | $ | 49,378 | ||||||||||||
| (a) | We include the operating performance for held for sale and sold hotels in continuing operations in our Consolidated Statements of Operations. However, for purposes of our non-GAAP reporting metrics, we have excluded the results of these hotels to provide a meaningful same-store comparison. | |
| (b) | Consolidated hotel lease expense represents the percentage lease expense of our 51%-owned operating lessees. The offsetting percentage lease revenue is included in equity in income from unconsolidated entities. | |
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 diminishes 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 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 (loss) attributable to FelCor as a measure of our operating performance.
FFO and EBITDA
The National Association of Real Estate Investment Trusts (“NAREIT”) defines Funds From Operations (“FFO”) as net income or loss attributable to parent (computed in accordance with GAAP), excluding gains or losses from sales of property, plus depreciation, amortization and impairment losses. FFO for unconsolidated partnerships and joint ventures is calculated 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.
Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”) is a commonly used measure of performance in many industries. We define EBITDA as net income or loss attributable to parent (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 items provides useful supplemental information to investors regarding our ongoing operating performance and that the presentation of Adjusted FFO, and Adjusted EBITDA when combined with GAAP net income attributable to FelCor, EBITDA and FFO, is beneficial to an investor’s understanding of our operating performance.
- Gains and losses related to extinguishment of debt and interest rate swaps - We exclude gains and losses related to extinguishment of debt and interest rate swaps from Adjusted FFO and Adjusted 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.
- 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.
- Other expenses and costs - From time to time, we incur expenses or transaction costs that are not indicative of ongoing operating performance. Such costs include, but are not limited to, conversion costs, acquisition costs, pre-opening costs, severance costs and certain non-cash adjustments. We exclude these costs from the calculation of Adjusted FFO and Adjusted EBITDA.
- Variable stock compensation - We exclude the cost associated with our variable stock compensation. This cost is subject to volatility related to the price and dividends of our common stock that does not necessarily correspond to our operating performance.
In addition, to derive Adjusted EBITDA, we exclude gains or losses on the sale of depreciable assets and impairment losses because including them in EBITDA is inconsistent with reporting the ongoing performance of our remaining assets. Additionally, the gain or loss on sale of depreciable assets and impairment losses represents either accelerated depreciation or excess depreciation in previous periods, and depreciation is excluded from EBITDA. We also exclude the amortization of our fixed stock and directors’ compensation, which is included in corporate expenses and is not separately stated on our statements of operations. Excluding amortization of our fixed stock and directors’ compensation maintains consistency with the EBITDA definition.
Hotel EBITDA and Hotel EBITDA Margin
Hotel EBITDA and Hotel EBITDA margin are commonly used measures of performance in the hotel industry and give investors a more complete understanding of the operating results over which our individual hotels and brands/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 that we use in our financial and operational decision-making. Additionally, using these measures facilitates comparisons with other hotel REITs and hotel owners. We present Hotel EBITDA and Hotel EBITDA margin in a manner consistent with Adjusted EBITDA, however, we also eliminate all revenues and expenses from continuing operations not directly associated with hotel operations, including other income and corporate-level expenses. We eliminate these additional items because we believe property-level results provide investors with supplemental information regarding the ongoing operational performance of our hotels and the effectiveness of management on a property-level basis. We also eliminate consolidated percentage rent paid to unconsolidated entities, which is effectively eliminated by noncontrolling interests 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 consolidated hotels. Hotel EBITDA and Hotel EBITDA margins are presented on a same-store basis.
Use and Limitations of Non-GAAP Measures
We use FFO, Adjusted FFO, EBITDA, Adjusted EBITDA, Same-store Adjusted EBITDA, Hotel EBITDA and Hotel EBITDA margin to evaluate the performance of our hotels and to facilitate comparisons between us and other hotel REITs, hotel owners who are not REITs and other capital intensive companies. We use Hotel EBITDA and Hotel EBITDA margin in evaluating hotel-level performance and the operating efficiency of our hotel managers.
The use of these non-GAAP financial measures has certain limitations. As we present them, these non-GAAP financial measures may not be comparable to similar non-GAAP financial measures as presented by other real estate companies. These measures do not reflect certain expenses or expenditures that we incurred and will incur, such as depreciation, interest and capital expenditures. We compensate 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 most comparable 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, and 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. These non-GAAP financial measures 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. We strongly encourage investors to review our financial information in its entirety and not to rely on any single financial measure.
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Contacts:
Abi Salami, 972-444-4967
Director,
Investor Relations
asalami@felcor.com
