Actionable news
0
All posts from Actionable news
Actionable news in FCH: FELCOR LODGING TRUST Inc,

FelCor Lodging Trust: 545 E. John Carpenter Freeway, Suite 1300 IRVING, TX 75062 PH: 972-444-4900 WWW.FELCOR.COM NYSE: FCH For Immediate Release FELCOR REPORTS FIRST QUARTER 2016 EARNINGS

The following excerpt is from the company's SEC filing.

Same-store RevPAR increased by

• Same-store Adjusted EBITDA increased by 7.8%

• Affirms 2016 Outlook

FelCor Lodging Trust Incorporated (NYSE: FCH) today reported results for the

quarter ended

March 31, 2016

First Quarter Highlights

over the same period in 2015, which exceeded the industry average of 2.7%.

Adjusted EBITDA was

$49.0 million

, and Same-store Adjusted EBITDA increased by

$3.6 million

$50.3 million

compared to the same period in 2015.

Net loss per share was

Adjusted FFO per share was

Repurchased 3.0 million shares of common stock for $19.6 million (with repurchases to date of 5.2 million shares for $36.0 million, at an average price of $6.85 per share).

“We are off to a solid start in 2016. RevPAR growth continued to outpace the industry, and we gained 1.2% in market share, reflecting both the high quality of our properties and strong operational performance. In addition, we are especially pleased that The Knickerbocker, which we opened in 2015, performed better than our expectations for the quarter,” said Richard A. Smith, President and Chief Executive Officer of FelCor.

Mr. Smith added, “In addition to our focus on operations, we are actively engaged in various stages of negotiations to sell five assets, as previously announced. We continue to believe we will reach an agreement on prices for these assets that will unlock significant real estate value for our investors. We also continue to purchase our common stock, at prices significantly below our net asset value, further demonstrating our confidence in our company and future prospects.”

Mr. Smith concluded, “Our outlook for the lodging sector remains positive, particularly in our core markets. As such, we are affirming our operational outlook for 2016.”

-more-

FelCor Lodging Trust Incorporated First Quarter 2016 Operating Results

First Quarter Hotel Results

Change

Same-store hotels (39)

142.11

135.78

Total hotel revenue, in millions

Hotel EBITDA, in millions

Hotel EBITDA margin

33 bps

RevPAR for our

same-store hotels increased

$142.11

) from the same period in 2015. The change reflects a

increase in ADR (to

$187.78

) and a

increase in occupancy (to

). Hotel EBITDA for our

same-store hotels increased by

$55.4 million

and Hotel EBITDA margin was

during the quarter, a

basis point increase.

See pages 12-13 and 17-18 for more detailed hotel portfolio operating data.

First Quarter Operating Results

$ in millions, except for per share information

from the same period in 2015. Adjusted EBITDA was

Adjusted FFO was

$20.2 million

per share), compared to

$18.3 million

per share) for the same period in 2015. Net loss attributable to common stockholders was

$11.2 million

per share) in 2016, compared to a net loss of

$2.9 million

per share) for the same period in 2015. Net loss in 2015 was offset by a

$16.9 million

net gain on the sale of consolidated hotels.

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 15 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.

Capital Allocation

We continually strive to increase long-term stockholder value through prudent capital allocation. As part of this on-going effort, we look for opportunities to redeploy capital to achieve higher returns and strengthen our balance sheet.

Asset Sales

In 2015, we announced plans to sell five hotels: Morgans, Royalton, The Knickerbocker (minority interest), Renaissance Esmeralda and Holiday Inn Nashville Airport. Given these hotels’ locations and quality, we expect they will sell for very attractive prices. We are at various stages of negotiations for all five hotels. Upon completion of these asset sales, we expect to use the available proceeds to repay debt and repurchase stock.

Balance Sheet

As of

, we had

$1.5 billion

of gross consolidated debt with a

weighted-average interest rate and an eight-year weighted-average maturity. We had

$58.0 million

of cash and cash equivalents on hand and

$21.1 million

of restricted cash.

Stock Repurchase Program

In 2015, our Board approved a $100 million stock repurchase program, which we began to implement in December. To date, we have purchased 5.2 million shares for $36.0 million (at an average price of $6.85 per share). We intend to continue repurchasing our common stock while it trades at a significant discount to NAV and, subject to approval by our Board of Directors, expect to increase the program in conjunction with completing asset sales.

Common Dividend

During the first quarter, we declared a $0.06 per share common stock dividend, which will be paid at the end of April. Our Board of Directors will determine future quarterly common stock dividends based on funds available for distribution, reinvestment opportunities within our portfolio and taxable income, among other things.

Capital Expenditures

During the first quarter, we invested

$13.9 million

in capital improvements at our hotels. During 2016, we plan to invest approximately $60 million in capital improvements and renovations as part of our long-term capital plan. In addition, we expect to invest approximately $15 million in redevelopment projects this year, primarily at the Embassy Suites Myrtle Beach Oceanfront Resort and the Vinoy Renaissance St. Petersburg Resort and Golf Club.

We are affirming our 2016 operational outlook. Our outlook assumes that we will continue to outperform the industry because our high-quality and diverse portfolio is weighted toward high-barrier-to-entry markets with relatively lower supply growth.

Our outlook further assumes that, in 2016, we will sell the five hotels that we are currently marketing. The low end of our guidance assumes that we sell one hotel in the second quarter and the remaining four in the third quarter. The high end of our guidance assumes that we sell all five hotels during the fourth quarter. Our outlook assumes Hotel EBITDA for the Wyndham hotels equals the amount guaranteed by Wyndham for 2016 (which corresponds to approximately $59 million of Hotel EBITDA).

For the year, we expect:

RevPAR for same-store hotels will increase 3.5-5.5%;

Adjusted EBITDA will be $242.0 million - $256.0 million;

Adjusted FFO per share will be $0.93 - $0.99;

Net income attributable to FelCor will be $44.0 million - $48.8 million; and

Interest expense, including our

pro rata

share from joint ventures, will be $76.6 million - $81.1 million.

The following table reconciles our Adjusted EBITDA outlook (in millions):

Middle

2016 Adjusted EBITDA (before asset sales)

2016 EBITDA lost from hotels to be sold

Adjusted EBITDA for the five hotels currently being marketed from their respective sale dates to December 31, 2016.

About FelCor

FelCor Lodging Trust Incorporated, a real estate investment trust (REIT), owns a diversified portfolio of primarily upper-upscale and luxury hotels that are located in major urban and resort markets 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

We invite you to listen to our first quarter earnings Conference Call on Tuesday, April 26, 2016 at 11:00 a.m. (Central Time). The conference call will be webcast simultaneously on FelCor’s website at

. Interested investors and other parties who wish to access the call can go to FelCor’s website and click on the webcast link on the “Investors” page. The conference call replay will also be archived on the Company’s website.

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.

Contact:

Stephen A. Schafer, Senior Vice President

(972) 444-4912

sschafer@felcor.com

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 months ended

TABLE OF CONTENTS

Consolidated Statements of Operations

Consolidated Balance Sheets

Consolidated Debt Summary

Schedule of Encumbered Hotels

Total Enterprise Value

Hotel Operating Statistics

Historical Quarterly Operating Statistics

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 Annual Report on Form 10-K.

(in thousands, except per share data)

Three Months Ended

Revenues:

Hotel operating revenue:

159,076

162,306

Food and beverage

39,532

39,844

Other operating departments

10,849

11,135

Other revenue

Total revenues

210,144

213,695

Expenses:

Hotel departmental expenses:

42,699

42,511

30,956

30,696

Other property related costs

55,566

56,895

Management and franchise fees

Taxes, insurance and lease expense

13,582

14,807

Corporate expenses

Depreciation and amortization

29,183

27,772

Other expenses

Total operating expenses

194,222

199,016

Operating income

15,922

14,679

Interest expense, net

(19,720

(19,481

Debt extinguishment

Loss before equity in income (loss) from unconsolidated entities

(3,798

(4,875

Equity in income (loss) from unconsolidated entities

Loss from continuing operations before income tax expense

(3,952

(4,726

Income tax expense

(4,367

(4,895

Income from discontinued operations

Loss before gain on sale of property

(4,891

Gain (loss) on sale of property, net

16,887

Net income (loss)

(5,081

11,996

Net loss (income) attributable to noncontrolling interests in other partnerships

(4,879

Net loss attributable to redeemable noncontrolling interests in FelCor LP

Preferred distributions - consolidated joint venture

Net income (loss) attributable to FelCor

(4,922

Preferred dividends

(6,279

(9,678

Net loss attributable to FelCor common stockholders

(11,201

(2,895

Basic and diluted per common share data:

Basic and diluted weighted average common shares outstanding

139,678

124,519

(in thousands, except par values)

December 31,

Assets

Investment in hotels, net of accumulated depreciation of $919,071 and $899,575 at March 31, 2016 and December 31, 2015, respectively

1,711,523

1,729,531

Investment in unconsolidated entities

Cash and cash equivalents

57,958

59,786

Restricted cash

21,097

17,702

Accounts receivable, net of allowance for doubtful accounts of $303 and $204 at March 31, 2016 and December 31, 2015, respectively

34,819

28,136

Deferred expenses, net of accumulated amortization of $1,554 and $1,086 at March 31, 2016 and December 31, 2015, respectively

Other assets

17,676

14,792

Total assets

1,858,176

1,865,912

Liabilities and Equity

Debt, net of unamortized debt issuance costs of $17,666 and $18,065 at March 31, 2016 and December 31, 2015, respectively

1,440,792

1,409,889

Distributions payable

15,062

15,140

Accrued expenses and other liabilities

123,766

125,274

Total liabilities

1,579,620

1,550,303

Commitments and contingencies

Redeemable noncontrolling interests in FelCor LP, 611 units issued and outstanding at March 31, 2016 and December 31, 2015

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 March 31, 2016 and December 31, 2015

309,337

Common stock, $0.01 par value, 200,000 shares authorized; 139,307 and 141,808 shares issued and outstanding at March 31, 2016 and December 31, 2015, respectively

Additional paid-in capital

2,569,389

2,567,515

Accumulated deficit

(2,657,715

(2,618,117

Total FelCor stockholders’ equity

222,404

260,153

Noncontrolling interests in other partnerships

Preferred equity in consolidated joint venture, liquidation value of $44,582 and $43,954 at March 31, 2016 and December 31, 2015, respectively

43,784

43,186

Total equity

273,591

311,145

Total liabilities and equity

(dollars in thousands)

Rate (%)

Maturity Date

Senior unsecured notes

June 2025

475,000

Senior secured notes

March 2023

525,000

Mortgage debt

October 2022

121,874

122,237

30,584

30,717

Line of credit

LIBOR + 2.75

June 2019

221,000

190,000

Knickerbocker loan

LIBOR + 3.00

November 2017

85,000

1,458,458

1,427,954

Unamortized debt issuance costs

(17,666

(18,065

This debt is comprised of separate non-cross-collateralized loans, each secured by a mortgage encumbering different hotels.

Our line of credit can be extended for

year, subject to satisfying certain conditions. We may borrow up to

$400 million

under our line of credit.

This loan can be extended

(dollars in millions)

Senior secured notes (5.625%)

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

Napa Valley - ES

Ft. Lauderdale - ES

Birmingham - ES

Minneapolis Airport - ES

Deerfield Beach - ES

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

Improvements and additions to majority-owned hotels

13,712

13,483

Partners’ pro rata share of additions to consolidated joint venture hotels

Pro rata share of additions to unconsolidated hotels

Total additions to hotels

13,942

13,763

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

Common shares outstanding

Units outstanding

Combined shares and units outstanding

139,918

142,419

Common stock price

Market capitalization

1,136,134

1,039,659

Series A preferred stock

Preferred equity - Knickerbocker joint venture, net

41,595

41,027

Consolidated debt

Noncontrolling interests of consolidated debt

(4,250

Pro rata share of unconsolidated debt

11,367

11,433

Cash, cash equivalents and restricted cash

(79,055

(77,488

Total enterprise value (TEV)

2,886,236

2,760,322

Based on liquidation value.

Excludes unamortized debt issuance costs.

Hotel Operating Statistics

Occupancy (%)

ADR ($)

RevPAR ($)

Three Months Ended March 31,

Same-store Hotels

%Change

Embassy Suites Atlanta-Buckhead

159.13

151.40

128.79

119.30

DoubleTree Suites by Hilton Austin

240.06

249.64

198.87

204.95

Embassy Suites Birmingham

133.82

135.66

107.92

104.55

The Fairmont Copley Plaza, Boston

252.18

250.51

161.36

154.20

Wyndham Boston Beacon Hill

164.42

165.66

104.87

112.93

Embassy Suites Boston-Marlborough

167.60

162.49

108.56

117.79

Sheraton Burlington Hotel & Conference Center

101.51

The Mills House Wyndham Grand Hotel, Charleston

205.75

199.53

160.63

156.48

Embassy Suites Dallas-Love Field

143.51

133.66

122.36

122.64

Embassy Suites Deerfield Beach-Resort & Spa

269.69

260.39

237.96

239.58

Embassy Suites Fort Lauderdale 17

Street

231.31

214.51

215.99

200.33

Wyndham Houston-Medical Center Hotel & Suites

159.64

160.85

137.32

128.81

Renaissance Esmeralda Indian Wells Resort & Spa

230.67

227.86

158.28

165.18

Embassy Suites Los Angeles-International Airport/South

162.70

148.02

146.41

119.50

Embassy Suites Mandalay Beach-Hotel & Resort

207.31

180.39

158.98

131.63

Embassy Suites Miami-International Airport

197.22

199.66

180.41

187.82

Embassy Suites Milpitas-Silicon Valley

211.62

194.81

170.92

153.70

Embassy Suites Minneapolis-Airport

143.73

142.01

102.72

Embassy Suites Myrtle Beach-Oceanfront Resort

129.48

124.77

Hilton Myrtle Beach Resort

106.90

102.61

Embassy Suites Napa Valley

182.08

180.14

145.56

139.12

113.27

104.00

Wyndham New Orleans-French Quarter

155.37

167.67

114.53

110.96

Morgans New York

212.76

216.61

155.01

142.87

Royalton New York

237.95

245.41

181.40

194.36

Embassy Suites Orlando-International Drive South/Convention Center

176.25

170.05

155.36

148.81

DoubleTree Suites by Hilton Orlando-Lake Buena Vista

165.40

151.91

152.60

141.01

Wyndham Philadelphia Historic District

125.93

126.65

Sheraton Philadelphia Society Hill Hotel

151.24

151.09

Embassy Suites Phoenix-Biltmore

243.29

231.01

189.88

194.19

Wyndham Pittsburgh University Center

132.08

132.17

Wyndham San Diego Bayside

137.19

136.18

106.31

105.70

Embassy Suites San Francisco Airport-South San Francisco

197.13

178.29

168.39

155.08

Embassy Suites San Francisco Airport-Waterfront

204.40

199.22

174.25

166.56

Holiday Inn San Francisco-Fisherman’s Wharf

194.67

178.64

159.58

141.77

San Francisco Marriott Union Square

319.58

280.82

283.21

239.14

Wyndham Santa Monica At the Pier

258.44

227.12

226.83

190.49

Embassy Suites Secaucus-Meadowlands

171.47

177.47

117.86

The Vinoy Renaissance St. Petersburg Resort & Golf Club

256.26

251.81

225.92

223.53

181.65

Q1 2015

Q2 2015

Q3 2015

Q4 2015

Q1 2016

190.42

190.19

179.39

154.48

133.36

Includes 39 consolidated hotels, excluding The Knickerbocker which opened in February 2015.

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

Dollars

Shares

Per Share Amount

(4,865

Less: Dividends declared on unvested restricted stock

Basic and diluted earnings per share data

(11,239

(2,908

Depreciation, unconsolidated entities and other partnerships

Loss (gain) on sale of hotels, net of noncontrolling interests in other partnerships

(11,881

Noncontrolling interests in FelCor LP

Conversion of unvested restricted stock and units

19,115

140,916

13,694

126,343

Abandoned projects

Variable stock compensation

Pre-opening costs, net of noncontrolling interests

20,162

18,288

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

(in thousands)

19,732

19,486

Interest expense, unconsolidated entities and other partnerships

Income taxes

Noncontrolling interests in preferred distributions, consolidated joint venture

45,268

55,289

Amortization of fixed stock and directors’ compensation

48,964

49,864

Adjusted EBITDA from hotels disposed, held for sale and recently opened

(3,180

50,305

46,684

Hotel EBITDA and Hotel EBITDA Margin

Same-store operating revenue:

154,430

145,933

38,271

38,107

10,798

10,649

203,499

194,689

Same-store operating expense:

40,407

37,959

28,978

28,876

53,033

50,710

12,811

12,430

148,091

142,310

55,408

52,379

The following tables set forth the components of our Hotel EBITDA for our same-store hotels (dollars in thousands):

Three Months Ended March 31, 2016

Hotel Operating Revenue

Other Adjustments

Interest Expense

10,037

(3,149

15,885

(1,418

(1,538

11,929

16,901

24,148

26,586

Three Months Ended March 31, 2015

(2,691

15,665

(1,368

(1,239

(1,022

10,490

16,436

20,657

26,930

Reconciliation of Same-store Operating Revenue and Same-store Operating Expense to Total Revenue, Total Operating Expense and Operating Income

Revenue from hotels disposed, held for sale and recently opened

18,596

Consolidated hotel lease expense

Unconsolidated taxes, insurance and lease expense

Expenses from hotels disposed, held for sale and recently opened

14,770

We include the operating performance for 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.

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 Income Attributable to FelCor to Forecasted Adjusted FFO

and Adjusted EBITDA

(in millions, except per share data)

Full Year 2016 Guidance

Net income attributable to FelCor common stockholders

Loss on sale of assets

Abandoned project costs

Weighted average shares are 140.9 million.

Excludes any gains or losses on future asset or capital transactions.

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 Generally Accepted Accounting Principles (“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 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.

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 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.

Other expenses and costs -

From time to time, we periodically 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.

- 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

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 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 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, 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. We strongly encourage investors to review our financial information in its entirety and not to rely on a single financial measure.

The above information was disclosed in a filing to the SEC. To see the filing, click here.

To receive a free e-mail notification whenever FelCor Lodging Trust Incorporated makes a similar move, sign up!

Other recent filings from the company include the following:

FelCor Lodging Trust Incorporated director just declared 0 ownership of the company. - April 19, 2016
FelCor Lodging Trust Incorporated director just declared 0 ownership of the company. - April 19, 2016
FelCor Lodging Trust Incorporated director just picked up 2,356 shares - April 19, 2016
FelCor Lodging Trust Incorporated director just picked up 2,356 shares - April 19, 2016