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FelCor Lodging Trust Inc. Reports Operating Results (10-K)
Posted by: gurufocus (IP Logged)
Date: March 6, 2012 07:15PM
FelCor Lodging Trust Inc. (FCH) filed Annual Report for the period ended 2011-12-31. Felcor Lodging has a market cap of $432.3 million; its shares were traded at around $3.4 with a P/E ratio of 26.7 and P/S ratio of 0.5.
Highlight of Business Operations:Our Embassy Suites franchise agreements grant us the right to the use of the Embassy Suites Hotels name, system and marks with respect to specified hotels and establish various management, operational, record-keeping, accounting, reporting and marketing standards and procedures with which the licensed hotel must comply. In addition, the franchisor establishes requirements for the quality and condition of the hotel and its furnishings, furniture and equipment, and we are obligated to expend such funds as may be required to maintain the hotel in compliance with those requirements. Typically, our Embassy Suites franchise agreements provide for a license fee, or royalty, of 4% to 5% of room revenues. In addition, we pay approximately 3.5% to 4% of room revenues as marketing and reservation system contributions for the systemwide benefit of Embassy Suites Hotels. We incurred marketing and reservation systems fees of $13.0 million, $12.7 million and $11.6 million for the years ended December 31, 2011, 2010, and 2009, respectively. We incurred license fees with respect to our Consolidated Hotels operated as Embassy Suites of $14.8 million, $14.4 million and $13.7 million for the years ended December 31, 2011, 2010 and 2009, respectively.
Total revenue was $946.0 million, a 9.6% increase compared to 2010. The increase principally reflects a 5.2% increase in same-store RevPAR (5.4% at our core hotels and 4.6% at our non-strategic hotels), which was driven by a 3.6% increase in ADR and a 1.5% increase in occupancy, as well as $45.9 million in incremental revenue from our recently-acquired hotels (the Fairmont Copley Plaza, acquired in August 2010, and Royalton and Morgans, acquired in May 2011).
Total revenue was $863.0 million, a 6.3% increase compared to 2009. The increase principally reflects a 4.3% increase in same-store RevPAR, which was driven by a 5.9% increase in occupancy partially offset by a 1.5% decrease in ADR. The Fairmont Copley Plaza, which we acquired in August 2010, contributed $16.8 million.
Hotel departmental expenses increased $21.2 million (7.3%) compared to 2009, reflecting improved occupancy and $7.8 million of expenses at the Fairmont Copley Plaza. As a percentage of total revenue, hotel departmental expenses increased from 35.8% to 36.1% compared to 2009. This change is primarily due to the mix and nature of the business at the Fairmont Copley Plaza, which has significant food and beverage revenue. Food and beverage expenses are generally much higher as a percent of revenue than room expenses.
We have recorded equity in income (loss) from unconsolidated entities of $(2.1) million, $16.9 million(including $21.1 million of gains from sale), and $(4.8) million for 2011, 2010 and 2009, respectively. We received distributions of $3.8 million (of which $2.3 million came from operations), $48.3 million (of which $2.2 million came from operations), and $9.0 million (of which $2.8 million came from operations) for 2011, 2010 and 2009, respectively. The principal source of income for our hotel joint ventures is percentage lease revenue from their operating lessees.
Stocks Discussed: FCH,