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FelCor Lodging Trust Posts 3rd Qtr 2012 Net Loss of $19.6 million
Compared
to Net Loss of $23.4 million in the Year-ago Quarter;
RevPAR for its 66 Hotels Increased 6.2% for the Quarter

Hotel Operating Statistics

IRVING, Texas--(November 1,2012)--FelCor Lodging Trust Incorporated (NYSE: FCH), today reported operating results for the third quarter ended September 30, 2012.

Summary:

  • Revenue per available room (“RevPAR”) for 66 same-store hotels (45 core and 21 non-strategic) increased 6.2% for the quarter.
  • Adjusted EBITDA was $53.2 million.
  • Adjusted funds from operations ("FFO") per share was $0.08.
  • Net loss was $19.6 million.
  • Sold three non-strategic hotels (one in August and two in October) for $95.5 million. Proceeds were used to repay debt and the remaining $38 million of accrued preferred dividends on October 31. Expect to sell one additional non-strategic hotel for gross proceeds of $8.7 million. To date, we have sold 19 of 39 hotels.
  • Closed five non-crossed 10-year secured loans bearing an average interest rate of 4.95%, raising $160.8 million. Used a portion of the proceeds to repay a $107 million mortgage loan (secured by seven properties) at 9.02%.

Third Quarter Operating Results:

RevPAR for 66 same-store hotels was $107.78, a 6.2% increase compared to the same period in 2011. The increase reflects a 6.9% increase in average daily rate (“ADR”) to $144.06 and a 50 basis point decrease in occupancy to 74.8%. RevPAR for our core hotels increased 6.6%, while RevPAR at our non-strategic hotels increased 4.7%. RevPAR at newly-acquired and redeveloped hotels increased 12.0% during the quarter and 14.3% during the month of September.

Commenting on third quarter results, Richard A. Smith, President and Chief Executive Officer of FelCor, said, “I am pleased with our results, as our RevPAR growth exceeded the industry average. Our efforts to remix customer segments and increase ADR have been successful, and ADR growth exceeded our expectations. While food and beverage profit was significantly above prior year, it was below our expectations and impacted our margins. Nonetheless, our operating results met the low-end of our expectations. Overall, lodging fundamentals remain strong. Transient demand continues to be solid, and supply growth is at historically low levels. These tailwinds will bolster U.S. RevPAR for the next few years.”

Added Mr. Smith, “We have made great progress in repositioning the portfolio and restructuring the balance sheet. As of today, we will have sold 10 non-strategic hotels this year, including four since the second quarter. Our asset sale program is ahead of plan and we are currently in discussions with buyers for an additional six hotels. Our strategy will result in a high-growth, diversified portfolio that will outperform the industry for the foreseeable future. We have used the sale proceeds to pay all the accrued preferred dividends and to support our overall balance sheet restructuring plan to lower our leverage and cost of capital. During the quarter, we repaid our lone 2013 debt maturity and refinanced a 2014 debt maturity at a much higher loan-to-value, while reducing the interest rate significantly.”

Hotel EBITDA was $59.2 million, which was 8.4% higher than the same period in 2011. Hotel EBITDA and other same-store metrics reflect 66 same-store hotels.

Same-store Adjusted EBITDA was $51.6 million, 9.9% higher than the $46.9 million for the same period in 2011. Adjusted EBITDA (which includes Adjusted EBITDA for sold hotels prior to sale) was $53.2 million, 2.4% higher than the same period in 2011.

Adjusted FFO was $10.0 million, or $0.08 per share, compared to $0.05 per share for the same period in 2011. Net loss attributable to common stockholders was $28.7 million, or $0.23 per share for the quarter, compared to a net loss of $32.5 million, or $0.26 per share, for the same period in 2011.

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 18 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.

Year to Date Operating Results:

RevPAR for 66 same-store hotels was $104.31, a 5.1% increase compared to the same period in 2011. The increase was driven by a 5.8% increase in ADR to $141.91. Displacement from renovations and redevelopments adversely affected revenue by $10 million.

Hotel EBITDA was $174.8 million, 6.1% higher than the $164.8 million for the same period in 2011.

Same-store Adjusted EBITDA was $147.0 million, 8.1% higher than the $136.0 million for the same period in 2011. Adjusted EBITDA (which includes Adjusted EBITDA for sold hotels prior to sale) was $160.8 million, 0.2% higher than the same period in 2011.

Adjusted FFO was $30.3 million, or $0.24 per share, which is $0.07 per share higher than the prior year. Net loss attributable to common stockholders was $64.7 million, or $0.52 per share for the nine months ended September 30, 2012, compared to a net loss of $125.8 million, or $1.10 per share, for the same period in 2011.

Portfolio Repositioning:

During the quarter, we sold the 222-room Embassy Suites - Anaheim-North for $25.5 million.

On October 25, 2012, we completed the sale of the 370-room Embassy Suites - New Orleans-Convention Center and the 296-room Embassy Suites - Nashville-Airport for an aggregate purchase price of $70 million. The hotels' operating performance is included in discontinued operations during the third quarter and year-to-date.

We have agreed to sell the Sheraton Crescent Hotel in Phoenix for $8.7 million. The buyer made a hard-money deposit toward the purchase price, and we expect the sale to close in the immediate future.

Through today, we will have sold 19 of 39 non-strategic hotels as part of our portfolio repositioning plan. Twenty non-strategic hotels remain to be sold. Of those, 10 have been brought to market or are in the preliminary marketing stage. We are currently in discussion with buyers to sell six of these hotels. Ten remaining hotels will be brought to market in 2013. We will use the proceeds from dispositions to repay debt and augment our balance sheet, which, when fully restructured, will provide a flexible foundation for improved long-term FFO and stockholder value.

Capital Expenditures:

We spent $26.9 million and $101.0 million on capital improvements at our operating hotels during the three and nine months ended September 30, 2012, respectively (including our pro rata share of joint venture expenditures).

During 2012, we anticipate spending approximately $85 million on improvements and renovations, a majority of which is focused on 12 hotels, including six of our largest properties. We will also spend $35 million this year on value-enhancing redevelopment projects at three hotels: Morgans, the Embassy Suites-Myrtle Beach-Oceanfront Resort and The Fairmont Copley Plaza. Please see page 12 of this release for more detail on renovations.

Our redevelopment of the 4+ star Knickerbocker Hotel, located in midtown Manhattan, is progressing as planned. We have spent $18 million in excess of the acquisition costs to date, and this project remains on schedule and on budget, with opening scheduled at the end of 2013.

Balance Sheet:

At September 30, 2012, we had $1.6 billion of consolidated debt, with an average interest rate of 7.5%. Our debt has a weighted average maturity of 4.8 years and none of our debt matures before June 2014. We had $112.1 million of cash and cash equivalents and $81.6 million in restricted cash as of September 30, 2012.

During the quarter, we closed five single asset-mortgage loans totaling $160.8 million. The 10-year loans mature in 2022, bear an average fixed interest rate of 4.95% and are not cross-collateralized. A portion of the proceeds from the new loans were used to repay the 9.02% mortgage loan, which had an outstanding balance of $107 million and would have otherwise matured in 2014. The repaid loan was secured by a pool of seven hotels, including four of the five hotels mortgaged to support the new loans. The remaining three hotels that secured the repaid loan (two of which are non-strategic) are now unencumbered.

We also repaid the remaining $60 million balance of a CMBS loan using excess proceeds from the new loan and recent asset sales. This repaid loan, which would have otherwise matured in 2013, was secured by five properties. Of these five properties, one property now secures a new loan and the remaining four are now unencumbered.

On October 31, we paid dividends of $2.39 per share on our Series A Preferred Stock and $2.45 per depositary share evidencing the Series C Preferred Stock. The dividend payment to holders of the Series A Preferred Stock included the current quarterly dividends of $0.4875 per share and accrued preferred dividends of $1.9025 per share. The dividend payment to holders of the Series C Preferred Stock included the current quarterly dividends of $0.50 per depositary share and accrued preferred dividends of $1.95 per depositary share. FelCor has now paid all of the outstanding accrued preferred dividends.

Andrew J. Welch, FelCor's Executive Vice President and Chief Financial Officer, said, “We continue to progress toward completely restructuring our balance sheet, including reducing leverage, reducing our average interest rate and extending and staggering our debt maturity profile. We have lowered our weighted-average cost of debt by 23 basis points in the last twelve months and expect to ultimately reduce our cost of debt to roughly 6.0%, as we repay and refinance debt."

Outlook:

Our 2012 operating outlook reflects updated timing for asset sales and third quarter results, which met the low-end of our expectations. We are increasing the low-end of our Adjusted EBITDA guidance and maintaining the low-end of our same-store Adjusted EBITDA guidance for 57 hotels.

During 2012, we anticipate:

  • Same-store RevPAR to increase between 5.5% and 6.0%;
  • Adjusted EBITDA to be between $200 million and $204 million;
  • Adjusted FFO per share to be between $0.21 and $0.25;
  • Net loss attributable to FelCor to be between $40 million and $36 million; and
  • Interest expense, including pro rata share of joint ventures, to be $129 million.

Our previous outlook assumed the sale of 12 hotels (three of which have been sold and one will be sold in the immediate future). For comparing to our previous outlook, we are providing the following data that reconciles the current Adjusted EBITDA outlook to 2012 Same-store Adjusted EBITDA (in millions). Same-store Adjusted EBITDA reflects EBITDA for 57 hotels (i.e., giving pro forma effect to selling the remaining hotels):



Low
Mid
High
Current Adjusted EBITDA Outlook
$ 200

$ 202

$ 204
Discontinued Operations(a)
(29 )
(30 )
(31 )
Same-store Adjusted EBITDA (57 hotels)
$ 171

$ 172

$ 173

(a) EBITDA from January 1, 2012 through the dates of sale of nine hotels sold to date and one hotel expected to sell in the immediate future, plus EBITDA for the full year for eight remaining sale hotels.

About FelCor:

FelCor, a real estate investment trust, is the nation’s largest owner of upper-upscale, all-suite hotels. FelCor owns interests in 67 properties located in major markets throughout 22 states. FelCor’s diversified portfolio of hotels and resorts are flagged under global brands such as: Doubletree ®, Embassy Suites Hotels®, Hilton®, Fairmont®, Marriott®, Renaissance®, Sheraton®, Westin® and Holiday Inn®. Additional information can be found on the Company’s Web site at www.felcor.com.

We invite you to listen to our third quarter earnings Conference Call on Thursday, November 1, 2012 at 10:00 a.m. (Central Time). The conference call will be Webcast simultaneously on FelCor’s Web site at www.felcor.com. Interested investors and other parties who wish to access the call can go to FelCor’s Web site and click on the conference call microphone icon on either the “Investor Relations” or “News Releases” page. The conference call replay also will be archived on the Company’s Web site.

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,” “should,” “will,” “continue” and other similar terms and phrases, including references to assumptions 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. Current economic circumstances or an economic slowdown and the impact on the lodging industry, operating risks associated with the hotel business, relationships with our property managers, risks associated with our level of indebtedness and our ability to meet debt covenants in our debt agreements, our ability to complete acquisitions, dispositions and debt refinancing, the availability of capital, the impact on the travel industry from security precautions, 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.

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 nine month period ended September 30, 2012.

TABLE OF CONTENTS



Page
Consolidated Statements of Operations(a)
8
Consolidated Balance Sheets(a)
9
Consolidated Debt Summary
10
Schedule of Encumbered Hotels
11
Capital Expenditures
12
Hotels Under Renovation or Redevelopment During 2012
12
Supplemental Financial Data
13
Discontinued Operations
14
Hotel Portfolio Composition
15
Detailed Operating Statistics by Brand
16
Comparable Hotels Operating Statistics for Our Top Markets
17
Historical Operating Statistics
18
Non-GAAP Financial Measures
18

(a) Our consolidated statements of operations and balance sheets have been prepared without audit. Certain information and footnote disclosures normally included in financial statements presented in accordance with GAAP have been omitted. The consolidated statements of operations and balance sheets should be read in conjunction with the consolidated financial statements and notes thereto included in our most recent Quarterly Report on Form 10-Q.

Consolidated Statements of Operations

(in thousands, except per share data)



Three Months Ended
Nine Months Ended


September 30,
September 30,


2012
2011
2012
2011
Revenues:







Hotel operating revenue:







Room
$ 188,886

$ 177,858

$ 544,664

$ 507,375
Food and beverage
33,673

30,288

109,472

104,102
Other operating departments
12,237

13,488

38,177

38,591
Other revenue
1,441

1,394

2,672

2,630
Total revenues
236,237

223,028

694,985

652,698
Expenses:







Hotel departmental expenses:







Room
49,794

47,805

144,419

135,514
Food and beverage
29,176

26,892

89,354

82,935
Other operating departments
5,593

5,979

16,976

17,555
Other property-related costs
63,940

61,944

188,428

179,399
Management and franchise fees
10,895

10,245

32,188

30,033
Taxes, insurance and lease expense
25,353

23,015

71,983

64,231
Corporate expenses
5,695

6,258

20,074

22,705
Depreciation and amortization
31,749

29,891

92,544

88,960
Impairment loss




1,335

7,003
Other expenses
2,163

1,208

3,926

3,455
Total operating expenses
224,358

213,237

661,227

631,790
Operating income
11,879

9,791

33,758

20,908
Interest expense, net
(31,359 )
(32,865 )
(93,547 )
(98,172 )
Debt extinguishment
(11,661 )
(21 )
(11,808 )
(27,599 )
Gain on involuntary conversion, net


109



292
Loss before equity in income (loss) from unconsolidated entities
(31,141 )
(22,986 )
(71,597 )
(104,571 )
Equity in income (loss) from unconsolidated entities
1,536

249

2,674

(1,303 )
Loss from continuing operations
(29,605 )
(22,737 )
(68,923 )
(105,874 )
Income (loss) from discontinued operations
10,050

(639 )
32,535

8,375
Net loss
(19,555 )
(23,376 )
(36,388 )
(97,499 )
Net loss attributable to noncontrolling interests in other partnerships
386

378

440

269
Net loss attributable to redeemable noncontrolling interests in FelCor LP
144

166

329

469
Net loss attributable to FelCor
(19,025 )
(22,832 )
(35,619 )
(96,761 )
Preferred dividends
(9,678 )
(9,678 )
(29,034 )
(29,034 )
Net loss attributable to FelCor common stockholders
$ (28,703 )
$ (32,510 )
$ (64,653 )
$ (125,795 )
Basic and diluted per common share data:







Loss from continuing operations
$ (0.31 )
$ (0.26 )
$ (0.78 )
$ (1.18 )
Net loss
$ (0.23 )
$ (0.26 )
$ (0.52 )
$ (1.10 )
Basic and diluted weighted average common shares outstanding
123,640

123,062

123,648

113,908

Consolidated Balance Sheets

(in thousands)



September 30,
December 31,


2012
2011
Assets



Investment in hotels, net of accumulated depreciation of $931,508 and $987,895 at September 30, 2012 and December 31, 2011, respectively
$ 1,813,845

$ 1,953,795
Hotel development
138,749

120,163
Investment in unconsolidated entities
57,352

70,002
Hotels held for sale
40,822


Cash and cash equivalents
112,119

93,758
Restricted cash
81,642

84,240
Accounts receivable, net of allowance for doubtful accounts of $419 and $333 at September 30, 2012 and December 31, 2011, respectively
34,722

27,135
Deferred expenses, net of accumulated amortization of $14,262 and $13,119 at September 30, 2012 and December 31, 2011, respectively
25,362

29,772
Other assets
27,040

24,363
Total assets
$ 2,331,653

$ 2,403,228
Liabilities and Equity



Debt, net of discount of $24,406 and $32,069 at September 30, 2012 and December 31, 2011, respectively
$ 1,598,094

$ 1,596,466
Distributions payable
46,306

76,293
Accrued expenses and other liabilities
159,817

140,548
Total liabilities
1,804,217

1,813,307
Commitments and contingencies



Redeemable noncontrolling interests in FelCor LP, 625 and 636 units issued and outstanding at September 30, 2012 and December 31, 2011
3,236

3,026
Equity:



Preferred stock, $0.01 par value, 20,000 shares authorized:



Series A Cumulative Convertible Preferred Stock, 12,880 shares, liquidation value of $322,011, issued and outstanding at September 30, 2012 and December 31, 2011
309,362

309,362
Series C Cumulative Redeemable Preferred Stock, 68 shares, liquidation value of $169,950, issued and outstanding at September 30, 2012 and December 31, 2011
169,412

169,412
Common stock, $0.01 par value, 200,000 shares authorized; 124,229 and 124,281 shares issued and outstanding at September 30, 2012 and December 31, 2011, respectively
1,242

1,243
Additional paid-in capital
2,353,538

2,353,251
Accumulated other comprehensive income
26,228

25,738
Accumulated deficit
(2,362,324 )
(2,297,468 )
Total FelCor stockholders’ equity
497,458

561,538
Noncontrolling interests in other partnerships
26,742

25,357
Total equity
524,200

586,895
Total liabilities and equity
$ 2,331,653

$ 2,403,228

Consolidated Debt Summary

(dollars in thousands)














Encumbered Hotels
Interest

Rate (%)


Maturity Date


September 30,
2012

December 31,
2011
Line of credit
10


L + 4.50

August 2014(a)
$ 117,000

$
Hotel mortgage debt











Mortgage debt
5
(b)
6.66


June - August 2014
65,935

67,375
Mortgage debt
7


L + 5.10 (c)
April 2015
186,529

202,982
Mortgage debt
1


5.81


July 2016
10,521

10,876
Mortgage debt
4
(b)
4.95


October 2022
128,500

Mortgage debt
1


4.94


October 2022
32,250

Senior notes











Senior secured notes
6


6.75


June 2019
525,000

525,000
Senior secured notes(d)
11


10.00


October 2014
467,499

459,931
Other(e)



L + 1.50

December 2012
64,860

64,860
Retired debt









265,442
Total
45







$ 1,598,094

$ 1,596,466
(a)
Our $225 million line of credit can be extended for one year (to 2015), subject to satisfying certain conditions.
(b)
The hotels securing this debt are subject to separate loan agreements and are not cross-collateralized.
(c)

LIBOR (for this loan) is subject to a 3% floor. We purchased an interest rate cap ($202 million notional amount) that caps LIBOR at 5.4% and expires May 2013.

(d)

These notes have $492 million in aggregate principal outstanding ($144 million and $96,000 in aggregate principal amount was redeemed in June 2011 and January 2012, respectively) and were initially sold at a discount that provided an effective yield of 12.875% before transaction costs.

(e)

This loan is related to our Knickerbocker redevelopment project and is fully secured by restricted cash and a mortgage. Because we were able to assume an existing loan when we purchased this hotel, we were not required to pay any local mortgage recording tax. When that loan is transferred to a new lender and made part of our construction loan, we expect to only pay such tax to the extent of the incremental principal amount of the construction loan.

Schedule of Encumbered Hotels

(dollars in millions)








September 30, 2012

Consolidated Debt
Balance
Encumbered Hotels
Line of credit

$ 117


Charlotte SouthPark - DT, Dana Point - DTGS, Houston Medical Center - HI, Myrtle Beach - HLT, Mandalay Beach - ES, Nashville Airport - ES, Philadelphia Independence Mall - HI, Pittsburgh University Center - HI, Santa Barbara Goleta - HI and Santa Monica at the Pier - HI
Mortgage debt

$ 187


Atlanta Buckhead - ES, Atlanta Galleria - SS, Boston

Marlboro - ES, Burlington - SH, Orlando South - ES, Philadelphia Society Hill - SH and South San Francisco - ES

CMBS debt(a)

$ 129


Birmingham - ES, Ft. Lauderdale - ES, Minneapolis Airport - ES, and Napa Valley - ES
CMBS debt(a)

$ 66


Atlanta Airport - ES, Austin - DTGS, BWI Airport - ES, Orlando Airport - HI and Phoenix Biltmore - ES
CMBS debt

$ 32


Deerfield Beach - ES
CMBS debt

$ 11


Indianapolis North - ES
Senior secured notes

$ 525


Boston Copley - FMT, Los Angeles International Airport - ES, Indian Wells Esmeralda Resort & Spa - REN, St. Petersburg Vinoy Resort & Golf Club - REN, Morgans and Royalton
Senior secured notes

$ 467


Atlanta Airport - SH, Boston Beacon Hill - HI, Myrtle Beach Resort - ES, Nashville Opryland -Airport - HI, New Orleans French Quarter - HI, Orlando Walt Disney World® - DTGS, San Diego on the Bay - HI, San Francisco Waterfront - ES, San Francisco Fisherman’s Wharf - HI, San Francisco Union Square - MAR and Toronto Airport - HI









(a) The hotels securing this debt are subject to separate loan agreements and are not cross-collateralized.

Capital Expenditures

(in thousands)








Three Months Ended
Nine Months Ended


September 30,
September 30,


2012
2011
2012
2011
Improvements and additions to majority-owned hotels
$ 26,636

$ 22,226

$ 99,985

$ 57,470
Partners’ pro rata share of additions to consolidated joint venture hotels
(190 )
(286 )
(819 )
(726 )
Pro rata share of additions to unconsolidated hotels
440

778

1,804

2,250
Total additions to hotels(a)
$ 26,886

$ 22,718

$ 100,970

$ 58,994

















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

Hotels Under Renovation or Redevelopment During 2012











Primary Areas


Start Date


End Date


Renovations






Austin-DTGS
guestrooms, corridors, public areas, entrance, F&B upgrade
Jun-2011
Feb-2012
Mandalay Beach-ES
guestrooms, corridors, lobby, exterior
Oct-2011
May-2012
Philadelphia Society Hill-SH
guest rooms, corridors, public areas, meeting space, re-concept F&B
Nov-2011
Apr-2012
Napa Valley-ES
guestrooms, corridors, public areas
Nov-2011
Apr-2012 (a)
Charlotte SouthPark-DT
guestrooms, corridors, exterior, lobby, upgrade F&B
Nov-2011
May-2012
Pittsburgh University Center-HI
guestrooms, public areas, meeting space
Dec-2011
Mar-2012
Boston Beacon Hill-HI
guestrooms, lobby, F&B
Dec-2011
Apr-2012
Renaissance Esmeralda Resort
guestrooms, corridors
Jun-2012
Oct-2012
LAX South - ES
guestrooms, corridors
Sep-2012
Mar-2013

Redevelopments






Myrtle Beach Oceanfront Resort-ES
public space, lobby, re-concept F&B
Oct-2011
Apr-2012
Boston Copley Plaza-FMT
guestrooms, corridors, public areas, meeting space, fitness area, re-concept F&B
Nov-2011
July-2012
Morgans
guestroom additions, public areas, fitness area, re-concept F&B
Feb-2012
Dec-2012








(a) The public area renovation will begin in the fourth quarter 2012.

Supplemental Financial Data

(in thousands, except per share information)






September 30,
December 31,

Total Enterprise Value

2012
2011
Common shares outstanding 124,229

124,281
Units outstanding 625

636
Combined shares and units outstanding 124,854

124,917
Common stock price $ 4.74

$ 3.05
Market capitalization $ 591,808

$ 380,997
Series A preferred stock(a) 309,362

309,362
Series C preferred stock(a) 169,412

169,412
Consolidated debt 1,598,094

1,596,466
Noncontrolling interests of consolidated debt (2,831 )
(2,894 )
Pro rata share of unconsolidated debt 74,449

75,178
Hotel development (138,749 )
(120,163 )
Cash and cash equivalents (112,119 )
(93,758 )
Total enterprise value (TEV) $ 2,489,426

$ 2,314,600








(a) Book value based on issue price.

Discontinued Operations

(in thousands)







Discontinued operations include the results of operations for two hotels designated as held for sale, for seven hotels sold in 2012, and eight hotels sold in 2011. Condensed financial information for the hotels included in discontinued operations is as follows:









Three Months Ended
Nine Months Ended


September 30,
September 30,


2012
2011
2012
2011
Operating revenue
$ 7,558

$ 25,477

$ 49,506

$ 99,556

Operating expenses
(7,065 )
(25,684 ) (a) (40,831 )
(97,265 ) (a)
Operating income (loss)
493

(207 )
8,675

2,291

Interest expense, net
(239 )
(799 )
(1,991 )
(4,548 )
Debt extinguishment
(126 )
(334 )
(790 )
3,282

Loss on involuntary conversion, net of tax






(12 )
Gain on sale, net of tax
9,922

701

26,641

7,362

Income (loss) from discontinued operations
10,050

(639 )
32,535

8,375

Depreciation and amortization
946

4,313

4,933

16,099

Interest expense
239

800

1,991

4,551

Noncontrolling interest in other partnerships


13



13

EBITDA from discontinued operations
11,235

4,487

39,459

29,038

Impairment loss


946



6,247

Hurricane loss
228



228



Debt extinguishment
126

334

790

(3,282 )
Loss on involuntary conversion, net of tax






12

Gain on sale, net of tax
(9,922 )
(701 )
(26,641 )
(7,362 )
Adjusted EBITDA from discontinued operations
$ 1,667

$ 5,066

$ 13,836

$ 24,653



















(a) Includes a $946,000 impairment charge for the three months ended September 30, 2011 and a $6.2 million impairment charge for the nine months ended September 30, 2011.

Hotel Portfolio Composition









The following table illustrates the distribution of same-store hotels.









Brand

Hotels
Rooms
% of Total Rooms
2011 Hotel EBITDA

(in thousands)(a)

Embassy Suites Hotels 21


5,743


30


$ 79,999
Holiday Inn 9


3,120


16


32,543
Doubletree and Hilton 5


1,206


6


15,352
Sheraton and Westin 4


1,604


8


15,203
Renaissance and Marriott 3


1,321


7


11,357
Fairmont 1


383


3


5,700
Morgans and Royalton 2


282


1


3,845
Core hotels 45


13,659


71


163,999
Non-strategic hotels 21


5,505


29


46,989
Same-store hotels 66


19,164


100


$ 210,988












Market











San Francisco area 4


1,637


9


$ 16,813
Boston 3


916


5


14,031
Los Angeles area 3


677


4


13,731
South Florida 3


923


5


13,116
New York area 4


817


4


9,703
Philadelphia 2


728


4


8,808
Atlanta 3


952


5


8,420
Myrtle Beach 2


640


3


7,862
Dallas 2


784


4


7,153
San Diego 1


600


3


6,144
Other markets 18


4,985


25


58,218
Core hotels 45


13,659


71


163,999
Non-strategic hotels 21


5,505


29


46,989
Same-store hotels 66


19,164


100


$ 210,988












Location











Urban 16


4,931


26


$ 64,858
Airport 10


3,267


17


35,579
Resort 10


2,928


16


35,204
Suburban 9


2,533


12


28,358
Core hotels 45


13,659


71


163,999
Non-strategic hotels 21


5,505


29


46,989
Same-store hotels 66


19,164


100


$ 210,988















(a) Hotel EBITDA is more fully described on page 26.

The following tables set forth occupancy, ADR and RevPAR for the three and nine months ended September 30, 2012 and 2011, and the percentage changes therein for the periods presented, for our same-store Consolidated Hotels included in continuing operations.

Detailed Operating Statistics by Brand






Occupancy (%)


Three Months Ended




Nine Months Ended




September 30,




September 30,




2012
2011
%Variance
2012
2011
%Variance
Embassy Suites Hotels
76.7

80.1

(4.3 )

76.4

77.9

(1.9 )
Holiday Inn
82.1

82.4

(0.3 )

76.9

76.5

0.5
Doubletree and Hilton
78.1

76.2

2.5


71.9

70.9

1.4
Sheraton and Westin
69.0

67.1

2.8


65.8

67.8

(2.9 )
Renaissance and Marriott
68.3

63.0

8.4


71.3

68.9

3.4
Fairmont
81.7

83.1

(1.7 )

62.0

73.5

(15.7 )
Morgans and Royalton
85.6

86.3

(0.8 )

83.2

86.1

(3.4 )
Core hotels (45)
76.7

77.4

(0.9 )

74.1

75.0

(1.2 )
Non-strategic hotels (24)
70.1

70.1

(0.1 )

72.0

71.4

0.8
Same-store hotels (66)
74.8

75.3

(0.7 )

73.5

74.0

(0.6 )
















ADR ($)


Three Months Ended




Nine Months Ended




September 30,




September 30,




2012
2011
%Variance
2012
2011
%Variance
Embassy Suites Hotels
146.48

137.34

6.7


145.14

137.96

5.2
Holiday Inn
155.56

141.23

10.1


143.96

131.10

9.8
Doubletree and Hilton
142.08

132.03

7.6


139.02

132.94

4.6
Sheraton and Westin
114.61

111.93

2.4


112.28

111.93

0.3
Renaissance and Marriott
171.56

155.56

10.3


194.01

177.49

9.3
Fairmont
275.15

249.60

10.2


281.34

245.10

14.8
Morgans and Royalton
295.74

284.71

3.9


289.76

274.93

5.4
Core hotels (45)
154.26

143.37

7.6


151.69

142.65

6.3
Non-strategic hotels (24)
116.60

111.31

4.8


117.12

112.27

4.3
Same-store hotels (66)
144.06

134.74

6.9


141.91

134.17

5.8
















RevPAR ($)


Three Months Ended




Nine Months Ended




September 30,




September 30,




2012
2011
%Variance
2012
2011
%Variance
Embassy Suites Hotels
112.30

110.00

2.1


110.84

107.41

3.2
Holiday Inn
127.79

116.39

9.8


110.66

100.30

10.3
Doubletree and Hilton
111.00

100.61

10.3


99.99

94.28

6.1
Sheraton and Westin
79.09

75.15

5.2


73.91

75.89

(2.6 )
Renaissance and Marriott
117.18

97.98

19.6


138.32

122.33

13.1
Fairmont
224.93

207.53

8.4


174.41

180.20

(3.2 )
Morgans and Royalton
253.11

245.67

3.0


241.05

236.74

1.8
Core hotels (45)
118.37

111.02

6.6


112.43

106.96

5.1
Non-strategic hotels (24)
81.73

78.06

4.7


84.30

80.19

5.1
Same-store hotels (66)
107.78

101.49

6.2


104.31

99.23

5.1

Comparable Hotels Operating Statistics for Our Top Markets






Occupancy (%)


Three Months Ended



Nine Months Ended





September 30,



September 30,





2012
2011
%Variance
2012
2011
%Variance
San Francisco area
89.7


89.5


0.2


82.4


81.0


1.7
Boston
81.4


84.5


(3.7 )

70.4


79.2


(11.1 )
Los Angeles area
80.2


86.4


(7.2 )

81.0


80.3


0.8
South Florida
72.7


74.2


(2.0 )

78.5


79.2


(0.9 )
New York area
78.5


83.7


(6.2 )

76.8


78.9


(2.6 )
Philadelphia
72.8


75.6


(3.8 )

66.6


72.0


(7.4 )
Atlanta
75.6


75.9


(0.5 )

75.0


76.7


(2.2 )
Myrtle Beach
82.1


80.4


2.0


66.5


64.8


2.6
Dallas
60.7


61.2


(0.8 )

65.2


65.1


0.2
San Diego
88.3


87.9


0.5


83.2


80.4


3.4
Other markets
72.9


72.0


1.3


72.1


72.4


(0.4 )
Core hotels (45)
76.7


77.4


(0.9 )

74.1


75.0


(1.2 )
Non-strategic hotels (21)
70.1


70.1


(0.1 )

72.0


71.4


0.8
Same-store hotels (66)
74.8


75.3


(0.7 )

73.5


74.0


(0.6 )


ADR ($)


Three Months Ended



Nine Months Ended





September 30,



September 30,





2012

2011
%Variance
2012

2011
%Variance
San Francisco area
190.07


165.02


15.2


171.84


148.81


15.5
Boston
217.57


197.56


10.1


206.71


185.42


11.5
Los Angeles area
173.31


162.41


6.7


156.34


151.80


3.0
South Florida
115.28


113.30


1.7


147.52


142.58


3.5
New York area
205.13


195.32


5.0


202.24


193.30


4.6
Philadelphia
145.95


131.40


11.1


147.82


133.01


11.1
Atlanta
107.82


104.65


3.0


108.54


104.87


3.5
Myrtle Beach
174.37


169.53


2.9


153.84


149.24


3.1
Dallas
105.38


99.74


5.6


105.98


110.01


(3.7 )
San Diego
138.88


127.11


9.3


130.99


121.13


8.1
Other markets
138.39


129.66


6.7


143.81


137.13


4.9
Core hotels (45)
154.26


143.37


7.6


151.69


142.65


6.3
Non-strategic hotels (21)
116.60


111.31


4.8


117.12


112.27


4.3
Same-store hotels (66)
144.06


134.74


6.9


141.91


134.17


5.8


RevPAR ($)


Three Months Ended



Nine Months Ended





September 30,



September 30,





2012

2011
%Variance
2012

2011
%Variance
San Francisco area
170.41


147.69


15.4


141.59


120.59


17.4
Boston
177.00


166.90


6.1


145.53


146.77


(0.8 )
Los Angeles area
139.00


140.32


(0.9 )

126.59


121.96


3.8
South Florida
83.83


84.05


(0.3 )

115.85


112.96


2.6
New York area
160.99


163.48


(1.5 )

155.35


152.47


1.9
Philadelphia
106.19


99.33


6.9


98.51


95.75


2.9
Atlanta
81.46


79.44


2.5


81.43


80.47


1.2
Myrtle Beach
143.13


136.38


4.9


102.26


96.73


5.7
Dallas
63.98


61.03


4.8


69.08


71.59


(3.5 )
San Diego
122.69


111.78


9.8


108.93


97.41


11.8
Other markets
100.89


93.35


8.1


103.75


99.28


4.5
Core hotels (45)
118.37


111.02


6.6


112.43


106.96


5.1
Non-strategic hotels (21)
81.73


78.06


4.7


84.30


80.19


5.1
Same-store hotels (66)
107.78


101.49


6.2


104.31


99.23


5.1

Historical Operating Statistics







Occupancy (%)



Q4 2011
2011
Q1 2012
Q2 2012
Q3 2012
Core hotels (45)
67.2

73.0

68.1

77.5

76.7
Non-strategic hotels (21)
66.1

70.1

72.1

73.8

70.1
Same-store hotels (66)
66.9

72.1

69.3

76.4

74.8
























ADR ($)



Q4 2011
2011
Q1 2012
Q2 2012
Q3 2012
Core hotels (45)
144.55

143.10

144.75

155.22

154.26
Non-strategic hotels (21)
111.10

111.99

118.32

116.44

116.60
Same-store hotels (66)
135.19

134.42

136.81

144.41

144.06
























RevPAR ($)



Q4 2011
2011
Q1 2012
Q2 2012
Q3 2012
Core hotels (45)
97.11

104.43

98.62

120.25

118.37
Non-strategic hotels (21)
73.40

78.48

85.27

85.92

81.73
Same-store hotels (66)
90.40

96.97

94.76

110.34

107.78

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 Loss to FFO and Adjusted FFO

(in thousands, except per share data)






Three Months Ended September 30,


2012
2011


Dollars
Shares
Per Share Amount
Dollars Shares
Per Share Amount
Net loss
$ (19,555 )




$ (23,376 )



Noncontrolling interests
530





544




Preferred dividends
(9,678 )




(9,678 )



Net loss attributable to FelCor common stockholders
(28,703 )
123,640

$ (0.23 )
(32,510 )
123,062

$ (0.26 )
Depreciation and amortization
31,749



0.26

29,891



0.24
Depreciation, discontinued operations and unconsolidated entities
3,664



0.03

7,508



0.06
Impairment loss, discontinued operations






946



0.01
Gain on sale of hotels
(9,922 )


(0.08 )
(701 )


(0.01 )
Gain on involuntary conversion






(109 )



Noncontrolling interests in FelCor LP
(144 )
626

(0.01 )
(166 )
638


Conversion of unvested restricted stock








709


FFO
(3,356 )
124,266

(0.03 )
4,859

124,409

0.04
Acquisition costs
16





413



0.01
Hurricane loss
851



0.01






Hurricane loss, discontinued operations and unconsolidated entities
231










Debt extinguishment, including discontinued operations
11,786



0.09

355




Severance costs
71










Abandoned projects
219










Pre-opening costs
202










Conversion of unvested restricted stock


358

0.01






Adjusted FFO
$ 10,020

124,624

$ 0.08

$ 5,627

124,409

$ 0.05

Reconciliation of Net Loss to FFO and Adjusted FFO

(in thousands, except per share data)






Nine Months Ended September 30,


2012 2011


Dollars
Shares
Per Share Amount
Dollars
Shares
Per Share Amount
Net loss
$ (36,388 )




$ (97,499 )



Noncontrolling interests
769





738




Preferred dividends
(29,034 )




(29,034 )



Net loss attributable to FelCor common stockholders
(64,653 )
123,648

$ (0.52 )
(125,795 )
113,908

$ (1.10 )
Depreciation and amortization
92,544



0.75

88,960



0.78
Depreciation, discontinued operations and unconsolidated entities
13,315



0.11

25,750



0.23
Gain on involuntary conversion






(292 )



Loss on involuntary conversion, discontinued operations






12




Impairment loss
1,335



0.01

7,003



0.06
Impairment loss, discontinued operations






6,247



0.05
Gain on sale of hotels
(26,641 )


(0.22 )
(7,362 )


(0.06 )
Noncontrolling interests in FelCor LP
(329 )
630



(469 )
453

(0.01 )
Conversion of unvested restricted stock


280








FFO
15,571

124,558

0.13

(5,946 )
114,361

(0.05 )
Acquisition costs
114





1,359



0.01
Hurricane loss
851



0.01






Hurricane loss, discontinued operations and unconsolidated entities
231










Debt extinguishment, including discontinued operations
12,598



0.10

24,316



0.21
Severance costs
451










Abandoned projects
219










Pre-opening costs
245










Conversion of unvested restricted stock








828


Adjusted FFO
$ 30,280

124,558

$ 0.24

$ 19,729

115,189

$ 0.17

Reconciliation of Net Loss to EBITDA, Adjusted EBITDA and Same-store Adjusted EBITDA

(in thousands)








Three Months Ended
Nine Months Ended


September 30,
September 30,


2012
2011
2012
2011
Net loss
$ (19,555 )
$ (23,376 )
$ (36,388 )
$ (97,499 )
Depreciation and amortization
31,749

29,891

92,544

88,960
Depreciation, discontinued operations and unconsolidated entities
3,664

7,508

13,315

25,750
Interest expense
31,393

32,924

93,664

98,323
Interest expense, discontinued operations and unconsolidated entities
934

2,009

4,060

8,016
Noncontrolling interests in other partnerships
386

378

440

269
EBITDA
48,571

49,334

167,635

123,819
Impairment loss




1,335

7,003
Impairment loss, discontinued operations


946



6,247
Hurricane loss
851



851


Hurricane loss, discontinued operations and unconsolidated entities
231



231


Debt extinguishment, including discontinued operations
11,786

355

12,598

24,316
Acquisition costs
16

413

114

1,359
Gain on sale of hotels
(9,922 )
(701 )
(26,641 )
(7,362 )
Gain on involuntary conversion


(109 )


(292 )
Loss on involuntary conversion, discontinued operations






12
Amortization of stock compensation
1,210

1,766

3,748

5,343
Severance costs
71



451


Abandoned projects
219



219


Pre-opening costs
202



245


Adjusted EBITDA
53,235

52,004

160,786

160,445
Adjusted EBITDA from discontinued operations
(1,667 )
(5,066 )
(13,836 )
(24,653 )
Adjusted EBITDA from acquired hotels(a)






165
Same-store Adjusted EBITDA
$ 51,568

$ 46,938

$ 146,950

$ 135,957

















(a) For same-store metrics, we have included the two hotels acquired in May 2011 for all periods presented.

Hotel EBITDA and Hotel EBITDA Margin

(dollars in thousands)








Three Months Ended
Nine Months Ended


September 30,
September 30,


2012
2011
2012
2011
Same-store operating revenue:







Room
$ 188,886

$ 177,858

544,664

516,384
Food and beverage
33,673

30,288

109,472

105,999
Other operating departments
12,237

13,488

38,177

39,140
Same-store operating revenue
234,796

221,634

692,313

661,523
Same-store operating expense:







Room
49,794

47,805

144,419

139,330
Food and beverage
29,176

26,892

89,354

85,343
Other operating departments
5,593

5,979

16,976

17,719
Other property related costs
63,940

61,944

188,428

182,859
Management and franchise fees
10,895

10,245

32,188

30,376
Taxes, insurance and lease expense
16,170

14,149

46,135

41,099
Same-store operating expense
175,568

167,014

517,500

496,726
Hotel EBITDA
$ 59,228

$ 54,620

$ 174,813

$ 164,797
Hotel EBITDA Margin
25.2 %
24.6 %
25.3 %
24.9 %

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
Nine Months Ended


September 30,
September 30,


2012
2011
2012
2011
Same-store operating revenue(a)
$ 234,796

$ 221,634

$ 692,313

$ 661,523
Other revenue
1,441

1,394

2,672

2,630
Revenue from acquired hotels






(11,455 )
Total revenue
236,237

223,028

694,985

652,698
Same-store operating expense(a)
175,568

167,014

517,500

496,726
Consolidated hotel lease expense(b)
10,910

10,582

31,339

29,383
Unconsolidated taxes, insurance and lease expense
(1,727 )
(1,716 )
(5,491 )
(5,152 )
Corporate expenses
5,695

6,258

20,074

22,705
Depreciation and amortization
31,749

29,891

92,544

88,960
Impairment loss




1,335

7,003
Hurricane loss
851



851


Expenses from acquired hotels(a)






(11,290 )
Other expenses
1,312

1,208

3,075

3,455
Total operating expenses
224,358

213,237

661,227

631,790
Operating income
$ 11,879

$ 9,791

$ 33,758

$ 20,908
(a)
For same-store metrics, we have included the two hotels acquired in May 2011 for all periods presented as if they were acquired at the beginning of the period.
(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.

Reconciliation of Forecasted Net Loss to Forecasted Adjusted FFO and

Adjusted EBITDA

(in millions, except per share and unit data)






Full Year 2012 Guidance


Low Guidance
High Guidance


Dollars

Per Share Amount(a)
Dollars
Per Share Amount(a)
Net loss attributable to FelCor(b)
$ (40 )



$ (36 )

Preferred dividends
(39 )



(39 )

Net loss attributable to FelCor common stockholders
(79 )

$ (0.64 )
(75 )
$ (0.60 )
Gain on sale of hotels
(50 )



(50 )

Depreciation(c)
141




141


Impairment
1




1


FFO
13


$ 0.10

17

$ 0.13
Debt extinguishment
13




13


Hurricane loss
1




1


Adjusted FFO
$ 27


$ 0.21

$ 31

$ 0.25










Net loss attributable to FelCor(b)
$ (40 )



$ (36 )

Depreciation(c)
141




141


Interest expense(c)
129




129


Amortization expense
5




5


EBITDA
235




239


Gain on sale of hotels
(50 )



(50 )

Impairment
1




1


Debt extinguishment
13




13


Hurricane loss
1




1


Adjusted EBITDA
$ 200




$ 204


(a)
Weighted average shares and units are 124.6 million.
(b)
For guidance, we have assumed no gains or losses on future asset sales.
(c)
Includes pro rata portion of 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 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 are 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.

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, including but not limited to those described below, 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 better 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 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.

  • 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 exclude gains or losses on the sale of depreciable assets and impairment losses because we believe that including them in EBITDA is not consistent with reflecting 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.

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 brand/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 by eliminating all revenues and expenses from continuing operations not directly associated with hotel operations, including corporate-level expenses, depreciation and amortization, and expenses related to our capital structure. We eliminate corporate-level costs and expenses because we believe property-level results provide investors with supplemental information into the ongoing operational performance of our hotels and the effectiveness of management on a property-level basis.

We eliminate depreciation and amortization because, even though depreciation and amortization are property-level expenses, 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 diminishes 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 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

Our management and Board of Directors 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 lodging 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. These non-GAAP financial measures as presented by us, may not be comparable to non-GAAP financial measures as calculated 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. 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 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, 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. 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. Management strongly encourages investors to review our financial information in its entirety and not to rely on a single financial measure.



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Contact: 

FelCor Lodging Trust Incorporated
Stephen A. Schafer, 972-444-4912
Vice President Strategic Planning & Investor Relations
sschafer@felcor.com
 

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FelCor Lodging Trust Posts 1st Qtr 2012 Net Loss of $28.9 million Compared to Net Loss of $31.7 million in the Year-ago Quarter; RevPAR for its 69 Hotels Increased 3.6% for the Quarter / Hotel Operating Statistics / May 2012

FelCor Lodging Trust Posts 4th Qtr 2011 Net Loss of $42.8 million Compared to Net Loss of $103.1 million in the Year-ago Quarter; RevPAR for its 43 Hotels Increased 4.8% for the Quarter / Hotel Operating Statistics / February 2012

FelCor Lodging Trust Posts 3rd Qtr 2011 Net Loss of $23.4 million Compared to Net Loss of $89.3 million in the Year-ago Quarter; RevPAR for its 67 Hotels Increased 5% for the Quarter / Hotel Operating Statistics / November 2011

FelCor Lodging Trust Posts 2nd Qtr 2011 Net Loss of $42.3 million Compared to to Net Income of $21.6 million in the Year-ago Quarter; RevPAR for its 67 Hotels Increased 6.2% for the Quarter / Hotel Operating Statistics / August 2011

FelCor Lodging Trust Posts 1st Qtr 2011 Loss of $41.3 million Compared to a Loss of $72 million in the Year-ago Quarter; RevPAR for its 80 Hotels Increased 6.3% for the Quarter / Hotel Operating Statistics / April 2011

FelCor Lodging Trust Posts 4th Qtr 2010 Loss of $103.1 million Compared to a Loss of $60.4 million in the Prior Year Period; Total Revenues Increase to $232 million, compared to $219 million in the Year-ago Period / Hotel Operating Statistics / February 2011

FelCor Lodging Trust Posts 4th Qtr 2009 Loss of $60.4 million Compared to a Loss of $98.1 million in the Prior Year Period; Total Revenues Drop to $219.1 million, compared to $249.0 million in the Year-ago Period / Hotel Operating Statistics / February 2010

FelCor Lodging Trust Reports 4th Qtr Net Loss of $98.1 million Compared to Prior Year Net Loss of $13.0 million; Suspends Common Dividend, Postpones Any Further Redevelopment Spending / February 2009
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