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Irving, Texas - April 28, 1999 � FelCor Lodging Trust
Incorporated (NYSE:FCH), one of the nation�s largest hotel real estate
investment trusts (REITs), today announced that first quarter 1999 Funds
From Operations (FFO) totaled $73.8 million or $0.97 per share and unit
as compared to $41.7 million or $0.94 achieved during the first quarter
1998. These results represent an increase in FFO of 77% and an increase
in FFO per share and unit of 3.2%.
First Quarter Highlights: Financial Performance:
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Doubletree Guest Suites® | Embassy Suites® | Dallas, Texas |
Radisson® | Doubletree® | Wilmington, Delaware |
Capitalization
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Summary Financial Data: | |||
Revenues |
$126,917
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$57,528 | |
Net income available to common shareholders |
$ 30,563
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$17,995 | |
Diluted Earnings Per Common Share Information: | |||
Income available to common shareholders before extraordinary charge |
$ 0.45
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$ 0.51 | |
Extraordinary charge |
(0.02)
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Net income available to common shareholders |
$ 0.45
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$ 0.49 | |
Weighted average shares outstanding |
68,344
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36,905 | |
FFO Information: | |||
FFO |
$ 73,849
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$41,685 | |
FFO per common share and unit |
$ 0.97
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$ 0.94 | |
Weighted average shares and units outstanding |
75,988
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44,575 |
Doubletree (12 hotels) | 6.8% |
Embassy Suites (48 hotels) | 1.9% |
Holiday branded hotels (36 hotels) | 3.5% |
Sheraton (4 hotels) | 3.9% |
Highlights from the non-comparable hotel portfolio include the recently
renovated and rebranded Crowne Plaza hotels (nine in total), which produced
a 23.3% average RevPAR increase for the quarter over the prior year quarter.
More significantly, the average daily rate (ADR) at these nine Crowne Plaza
hotels increased 15.4% for the quarter over the prior year quarter. Likewise,
ADR at the Bristol non-comparable hotels (34 hotels) increased 12.6% in
the quarter.
"As we expected, RevPAR increases at our comparable hotels in the first quarter 1999 were difficult to achieve due to the absorption of new supply primarily in Texas, Georgia, Arizona and Mississippi," stated Thomas J. Corcoran, Jr., FelCor�s President and Chief Executive Officer. "Much of the new supply is either in the limited service or extended stay segments. Even though approximately 97% of FelCor�s revenue in 1999 will be derived from upscale and full-service hotels like Embassy Suites, Crowne Plaza, Holiday Inn® and Holiday Inn Select, Doubletree and Doubletree Guest Suites, and Sheraton® and Sheraton Suites® hotels, the new supply in these other segments has had a negative impact on RevPAR performance at our hotels. However, supply growth is steadily decreasing," stated Corcoran. Four of the hotels acquired in the Bristol merger were sold in the quarter - two in Colorado Springs, Colorado, and one each in Columbia, South Carolina and Flagstaff, Arizona - for an aggregate sales price of $10.5 million. FelCor also has pending sales contracts on two additional hotels acquired from Bristol, which are expected to close within the next couple of months, for an aggregate sales price of approximately $5 million. Three additional hotels acquired from Bristol are being actively offered for sale. Hotel Renovation, Redevelopment, and Rebranding: Thirty hotels (19 of which are Bristol operated hotels) were undergoing renovation, redevelopment, or rebranding during the quarter, resulting in approximately 157,000 room nights out-of-service, or approximately 3.5% of available room nights. Additionally, many of these projects include renovations to the hotels� exterior, public areas, meeting spaces and restaurants, which typically has a negative impact on hotel operations. This included 18 Holiday Inn or Holiday Inn Select hotels, six Embassy Suites, three Doubletree, two Sheraton, and one independent hotel. Included are two hotels, which were closed during the quarter for redevelopment, the Allerton Hotel-Chicago, expected to re-open in May 1999 (to be rebranded as a Crowne Plaza) and the Holiday Inn-Tampa Busch Gardens, re-opened in late February, 1999. Included in the thirty hotels undergoing renovation are six hotels where renovations, totaling $23.8 million were completed and containing approximately 1,900 rooms, during the quarter as follows: |
266-room Embassy Suites ($1.8 million) | Kansas City, Missouri |
140-room Hampton Inn® ($1.9 million) | Marietta, Georgia |
167-room Holiday Inn ($2.4 million) | Kansas City, Missouri |
565-room Holiday Inn ($2.5 million) | San Francisco, California |
408-room Holiday Inn ($12.0 million) | Tampa (Busch Gardens), Florida |
395-room Sheraton Gateway ($3.2 million) | Atlanta (Airport), Georgia |
"We are enthusiastic about the strong double digit ADR performance
of the nine recently renovated Crowne Plaza hotels and of the 34 Bristol
non-comparable hotels. The ADR increases from these hotels are similar
to the results achieved from the renovation, redevelopment, and rebranding
of the Crown Sterling Suites to Embassy Suites hotels in 1997," stated
Corcoran.
FelCor spent $73 million of a planned $160 million on 1999 renovations,
redevelopment, and rebranding at 30 hotels and $9 million of additional
capital expenditures to maintain the remaining hotels in a competitive
condition. Approximately $20 million of the first quarter 1999 renovation
expenditures related to the Allerton Hotel-Chicago.
On April 1, 1999, FelCor completed a five-year, $375 million Senior Term Loan and a 10-year, $100 million First Mortgage Term Loan. The proceeds from these loans were used to immediately pay off FelCor�s $250 million unsecured term loan, which was to mature on December 31, 1999, and to reduce outstanding borrowings under its existing $850 million Line of Credit. FelCor is also in the process of completing an additional 10-year, $75 million First Mortgage Term Loan expected to be completed by mid-May 1999. The proceeds of this loan also will be used to reduce outstanding borrowings under FelCor�s Line of Credit. "We have spent the last few months working to pay off short term debt and to increase the availability under our Line of Credit," stated Randy L. Churchey, FelCor�s Senior Vice President and Chief Financial Officer. "FelCor continues to have one of the more conservative capital structures in the hotel industry. The availability under our Line of Credit and our favorable debt maturity profile will allow FelCor the financial flexibility to complete its renovation, redevelopment, and rebranding strategy and pursue other investment alternatives to increase shareholders value," stated Churchey. FelCor�s conservative financial profile is evidenced by the following:
FelCor Lodging Trust is one of the nation=s largest hotel REITs. Since its initial public offering in 1994 with six hotels and 1,479 suites, FelCor=s portfolio has grown to 189 hotels with nearly 50,000 rooms and suites. The Company=s hotel portfolio is primarily concentrated in the upscale and full-service segments. FelCor is the owner of the largest number of Embassy Suites, Crowne Plaza, Holiday Inn and independently owned Doubletree-branded hotels. Other leading hotel brands under which FelCor=s hotels are operated include Sheraton Suites, Sheraton and Westin®. FelCor has a current market capitalization of approximately $3.7 billion. Additional information on the company can be found on the Web at www.felcor.com. 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 and are qualified by cautionary statements contained herein and in FelCor=s filings with the Securities and Exchange Commission. |
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1999 | 1998 | |||
Revenues: | ||||
Percentage lease revenue | $125,448 | $56,060 | ||
Equity in income from unconsolidated entities | 1,246 | 1,293 | ||
Other revenue | 223 | 175 | ||
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126,917 | 57,528 | ||
Expenses: | ||||
General and administrative | 2,244 | 1,199 | ||
Depreciation | 36,425 | 15,887 | ||
Taxes, insurance and other | 20,953 | 7,270 | ||
Interest expense | 28,422 | 9,731 | ||
Minority interest in Operating Partnership | 1,320 | 1,751 | ||
Minority interest in other partnerships | 806 | 190 | ||
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90,170 | 36,028 | ||
Income before extraordinary charge | 36,747 | 21,500 | ||
Extraordinary charge | - | 556 | ||
Net income | 36,747 | 20,944 | ||
Preferred dividends | 6,184 | 2,949 | ||
Net income available to common shareholders | $ 30,563 | $17,995 | ||
Diluted Earnings Per Common Share Information: | ||||
Income before extraordinary charge | $ 0.45 | $ 0.51 | ||
Extraordinary charge | - | (0.02) | ||
Net income available to common shareholders | $ 0.45 | $ 0.49 | ||
Weighted average shares outstanding | 68,344 | 36,905 | ||
Funds From Operations (FFO): | ||||
Income before extraordinary charge | 36,747 | 21,500 | ||
Series B preferred dividends | (3,234) | - | ||
Depreciation | 36,425 | 15,887 | ||
Depreciation for unconsolidated entities | 2,591 | 2,547 | ||
Minority interest in Operating Partnership | 1,320 | 1,751 | ||
FFO | $73,849 | $41,685 | ||
FFO per common share and unit | $ 0.97 | $ 0.94 | ||
Weighted average shares and units outstanding | 75,988 | 44,575 |
FelCor�s debt outstanding as of March 31, 1999, both on a historical and pro forma basis for the previously described transactions, consists of the following (in thousands):
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Interest Rate |
Historical Outstanding Balance
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Pro Forma Outstanding Balance
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Maturity Date
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Floating Rate Debt: | ||||
Line of Credit | LIBOR + 150bps |
$480,000
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$305,000
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June 2001
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Term Loan | LIBOR + 150bps |
250,000
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-
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December 1999
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Senior Term Loan | LIBOR + 250bps |
-
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250,000
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March 2004
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Mortgage debt | LIBOR + 200bps |
63,000
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63,000
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December 2002
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Other | LIBOR + 45bps |
25,650
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25,650
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Various
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Total Floating Rate Debt |
818,650
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643,650
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Fixed Rate Debt: | ||||
Line of Credit-swapped | 7.24% |
325,000
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200,000
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June 2001
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Publicly-traded term notes | 7.38% |
174,279
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174,279
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October 2004
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Publicly-traded term notes | 7.63% |
124,150
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124,150
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October 2007
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Mortgage debt | 7.24% |
144,212
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144,212
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November 2007
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Senior Term Loan-swapped | 8.30% |
-
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125,000
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March 2004
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Mortgage debt | 7.54% |
-
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100,000
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April 2009
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Mortgage debt | 7.55% |
-
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75,000
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April 2009
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Other | 6.96%-7.23% |
84,900
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84,900
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2000-2005
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Total Fixed Rate Debt |
852,541
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1,027,541
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Total Debt |
$1,671,191
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$1,671,191
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FelCor�s future scheduled debt principal payments at March 31, 1999,
pro forma for the previously described transactions, are as follows (in
thousands):
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Remainder of 1999 | $ 10,585 |
2000 | 31,240 |
2001 | 524,330 |
2002 | 9,520 |
2003 | 91,211 |
2004 and thereafter | 1,005,877 |
1,672,763 | |
Discount accretion over term | (1,572) |
$1,671,191 |
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Original Hotels (11 hotels)��������������... | 71.2 | % |
$119.10
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$ 84.79 | ||
CSS Hotels (18 hotels)����������������. | 76.0 |
135.96
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103.27 | |||
1996 Acquisitions (12 hotels)�������������.. | 72.0 |
131.38
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94.62 | |||
1997 Acquisitions (22 hotels)�������������.. | 72.1 |
120.78
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87.02 | |||
1998 Acquisitions (2 hotels)�������������� | 80.7 |
111.30
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89.86 | |||
Total DJONT Comparable Hotels (65 hotels) | 73.3 |
126.75
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92.92 | |||
Total Bristol Comparable Hotels (63 hotels)�������... | 65.1 |
81.90
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53.36 | |||
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69.2 | % |
$105.76
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$ 73.24 | ||
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Original Hotels�������������������. | 72.9 | % |
$116.79
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$ 85.12 | ||
CSS Hotels��������������������... | 74.8 |
132.94
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99.48 | |||
1996 Acquisitions������������������ | 72.1 |
128.56
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92.66 | |||
1997 Acquisitions������������������ | 71.2 |
118.86
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84.59 | |||
1998 Acquisitions������������������ | 77.5 |
107.12
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82.99 | |||
Total DJONT Comparable Hotels�����������... | 72.9 |
124.22
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90.53 | |||
Total Bristol Comparable Hotels������������. | 67.0 |
78.72
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52.76 | |||
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70.0 | % |
$102.48
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$ 71.69 | ||
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Original Hotels�������������������. |
(1.7)
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pts. |
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% |
(0.4)
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% |
CSS Hotels��������������������... | 1.1 |
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3.8 | |||
1996 Acquisitions������������������ |
(0.1)
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2.1 | |||
1997 Acquisitions������������������ | 0.9 |
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2.9 | |||
1998 Acquisitions������������������ | 3.3 |
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8.3 | |||
Total DJONT Comparable Hotels�����������... | 0.4 |
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2.6 | |||
Total Bristol Comparable Hotels������������. |
(1.9)
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1.1 | |||
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(0.7)
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pts. |
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% | 2.2 | % |
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DJONT Non-comparable Hotels | 64.3 | % | $111.77 |
$71.91
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Bristol Non-comparable Hotels (B) | 61.8 | 94.45 |
58.32
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DJONT Non-comparable Hotels | 71.3 | % | $107.64 |
$76.72
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Bristol Non-comparable Hotels (B) | 65.9 | 83.90 |
55.26
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DJONT Non-comparable Hotels |
(7.0)
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pts. |
3.8
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% |
(6.3)
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% |
Bristol Non-comparable Hotels (B) |
(4.1)
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12.6
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5.5 |