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FelCor Reports Fourth Quarter Results

Stocks in this article: FCH

FelCor Lodging Trust Incorporated (NYSE: FCH), today reported operating results for the fourth quarter and year ended December 31, 2012.

Summary:

  • Revenue per available room (“RevPAR”) for 65 same-store hotels (45 core and 20 non-strategic) increased 4.8% for the quarter.
  • Hotel EBITDA increased 10% and Hotel EBITDA margins increased 87 basis points for the quarter.
  • Adjusted EBITDA was $42.0 million and adjusted funds from operations (“FFO”) per share was a loss of $0.01 for the quarter, both of which exceeded guidance.
  • Sold 10 hotels during 2012 for gross proceeds of $207.2 million and, as of January, launched the marketing process for all remaining non-strategic hotels for sale (excluding nine joint venture hotels).
  • Sold, in December, $525 million of 5.625% senior notes due in March 2023 and used the proceeds to repay high-cost, short-term debt.
  • Converting and repositioning eight core Holiday Inns to Wyndham-branded and managed hotels effective March 1, 2013.
  • Net loss was $93.0 million for the quarter.

Fourth Quarter Operating Results:

RevPAR for 65 same-store hotels was $95.57, a 4.8% increase compared to the same period in 2011. The increase reflects a 5.2% increase in average daily rate (“ADR”) to $142.76 and a 30 basis point decrease in occupancy to 66.9%. RevPAR for 45 core hotels increased 5.2%, while RevPAR at 20 non-strategic hotels increased 3.7%. RevPAR at the six newly-acquired and redeveloped hotels increased 8.6% during the quarter and 11.3% during December.

Commenting on operating results, Richard A. Smith, President and Chief Executive Officer of FelCor, said, “I am very pleased with our performance, as revenue, margins, FFO and EBITDA exceeded our expectations. Lodging fundamentals remain favorable, despite slow economic growth. The favorable imbalance between demand and supply growth provides us the ability to increase average rates, creating strong EBITDA growth. With supply growth lower in our markets than the US on average, our portfolio is well-positioned to continue outperforming our peers. RevPAR growth at the newly-acquired, redeveloped and renovated hotels continues to significantly exceed the industry average, and we expect that to continue throughout 2013.”

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