Attached files
| file | filename |
|---|---|
| EX-99.2 - EX-99.2 - Rangers Sub I, LLC | a17-26376_2ex99d2.htm |
| 8-K - 8-K - Rangers Sub I, LLC | a17-26376_28k.htm |
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
On February 14, 2017, Madison 237 Hotel, L.L.C., a subsidiary of FelCor Lodging Limited Partnership (“FelCor LP”), entered into a Purchase and Sale Agreement to sell its Morgans hotel to a third party unrelated to FelCor LP for $37 million in cash. Right, title and interest to the Morgans hotel was transferred on July 17, 2017. The Morgans hotel’s operations constituted a significant amount of income from continuing operations of FelCor LP.
The following unaudited pro forma condensed consolidated financial statements are presented to illustrate the effects of the transaction. The unaudited pro forma condensed consolidated balance sheet as of June 30, 2017 illustrates the estimated effects of the transaction as if the sale had occurred on June 30, 2017. The unaudited pro forma condensed consolidated income statement for the six months ended June 30, 2017 and the year ended December 31, 2016 sets forth the estimated effects of the transaction on FelCor LP’s consolidated statements of income as if the sale had occurred on January 1, 2016.
The unaudited pro forma condensed consolidated financial statements presented herein are for informational purposes only and do not purport to present what FelCor LP’s actual results would have been had the transaction occurred on the date assumed, or to project FelCor LP’s results of operations or financial position for any future period. The unaudited pro forma condensed consolidated financial statements include assumptions that are believed to be reasonable and represent all material information that is necessary to fairly present pro forma financial statements.
The unaudited pro forma condensed consolidated financial statements, including the notes thereto, should be read in conjunction with FelCor LP’s audited consolidated financial statements and the notes in FelCor LP’s Annual Report on Form 10-K as for the fiscal year ended December 31, 2016, as filed with the SEC on February 24, 2017.
FelCor Lodging Limited Partnership
Unaudited Pro Forma Condensed Consolidated Balance Sheet
(in thousands)
|
|
|
Historical |
|
Morgans |
|
Pro Forma |
| |||
|
|
|
June 30, 2017 |
|
June 30, 2017 |
|
June 30, 2017 |
| |||
|
|
|
(Unaudited) |
|
(Unaudited) |
|
(Unaudited) |
| |||
|
|
|
|
|
|
|
|
| |||
|
Assets |
|
|
|
|
|
|
| |||
|
Investment in hotels, net |
|
$ |
1,448,346 |
|
$ |
— |
|
$ |
1,448,346 |
|
|
Investment in unconsolidated entities |
|
7,657 |
|
— |
|
7,657 |
| |||
|
Hotels held for sale |
|
77,937 |
|
(28,577 |
)(a) |
49,360 |
| |||
|
Cash and cash equivalents |
|
58,135 |
|
(1,130 |
)(a) |
57,005 |
| |||
|
Restricted cash |
|
24,199 |
|
(784 |
)(a) |
23,415 |
| |||
|
Accounts receivable, net |
|
43,923 |
|
(316 |
)(a) |
43,607 |
| |||
|
Deferred expenses, net |
|
3,591 |
|
— |
|
3,591 |
| |||
|
Other assets |
|
20,240 |
|
(884 |
)(a) |
19,356 |
| |||
|
Total assets |
|
$ |
1,684,028 |
|
$ |
(31,691 |
) |
$ |
1,652,337 |
|
|
|
|
|
|
|
|
|
| |||
|
Liabilities and Partners’ Capital |
|
|
|
|
|
|
| |||
|
Debt, net |
|
$ |
1,360,071 |
|
$ |
— |
|
$ |
1,360,071 |
|
|
Distributions payable |
|
14,887 |
|
— |
|
14,887 |
| |||
|
Accrued expenses and other liabilities |
|
135,792 |
|
(1,046 |
)(a) |
134,746 |
| |||
|
Total liabilities |
|
1,510,750 |
|
(1,046 |
) |
1,509,704 |
| |||
|
Commitments and contingencies |
|
|
|
|
|
|
| |||
|
Redeemable units, 610 units issued and outstanding |
|
4,400 |
|
— |
|
4,400 |
| |||
|
Capital: |
|
|
|
|
|
|
| |||
|
Preferred units: |
|
|
|
|
|
|
| |||
|
Series A Cumulative Convertible Preferred Units, 12,879 units issued and outstanding |
|
309,337 |
|
— |
|
309,337 |
| |||
|
Common units, 138,412 units issued and outstanding |
|
(192,255 |
) |
(30,645 |
)(b) |
(222,900 |
) | |||
|
Total FelCor LP partners’ capital |
|
117,082 |
|
(30,645 |
) |
86,437 |
| |||
|
Noncontrolling interests |
|
7,365 |
|
— |
|
7,365 |
| |||
|
Preferred capital in consolidated joint venture |
|
44,431 |
|
— |
|
44,431 |
| |||
|
Total partners’ capital |
|
168,878 |
|
(30,645 |
) |
138,233 |
| |||
|
Total liabilities and partners’ capital |
|
$ |
1,684,028 |
|
$ |
(31,691 |
) |
$ |
1,652,337 |
|
See accompanying notes to the unaudited pro forma condensed consolidated financial statements
FelCor Lodging Limited Partnership
Unaudited Pro Forma Condensed Consolidated Statements of Operations and Comprehensive Income
(in thousands, except per unit data)
|
|
|
|
|
Morgans |
|
|
| |||
|
|
|
Historical |
|
Pro Forma Adjustment |
|
Pro Forma |
| |||
|
|
|
Year Ended |
|
Year Ended |
|
Year Ended |
| |||
|
|
|
December 31, 2016 |
|
December 31, 2016 |
|
December 31, 2016 |
| |||
|
|
|
|
|
(Unaudited) |
|
(Unaudited) |
| |||
|
|
|
|
|
|
|
|
| |||
|
Revenues: |
|
|
|
|
|
|
| |||
|
Hotel operating revenue : |
|
|
|
|
|
|
| |||
|
Room |
|
$ |
661,640 |
|
$ |
(9,647 |
)(c) |
$ |
651,993 |
|
|
Food and beverage |
|
155,227 |
|
(334 |
)(c) |
154,893 |
| |||
|
Other operating departments |
|
45,951 |
|
(429 |
)(c) |
45,522 |
| |||
|
Other revenue |
|
4,136 |
|
— |
|
4,136 |
| |||
|
Total revenues |
|
866,954 |
|
(10,410 |
) |
856,544 |
| |||
|
|
|
|
|
|
|
|
| |||
|
Expenses: |
|
|
|
|
|
|
| |||
|
Hotel departmental expenses : |
|
|
|
|
|
|
| |||
|
Room |
|
171,883 |
|
(4,540 |
)(c) |
167,343 |
| |||
|
Food and beverage |
|
119,047 |
|
(635 |
)(c) |
118,412 |
| |||
|
Other operating departments |
|
15,120 |
|
(268 |
)(c) |
14,852 |
| |||
|
Other property-related costs |
|
212,180 |
|
(3,293 |
)(c) |
208,887 |
| |||
|
Management and franchise fees |
|
32,935 |
|
— |
|
32,935 |
| |||
|
Taxes, insurance and lease expense |
|
57,317 |
|
(1,300 |
)(c) |
56,017 |
| |||
|
Corporate expenses |
|
27,037 |
|
— |
|
27,037 |
| |||
|
Depreciation and amortization |
|
114,054 |
|
(2,415 |
)(c) |
111,639 |
| |||
|
Impairment |
|
26,459 |
|
(20,126 |
)(c) |
6,333 |
| |||
|
Other expenses |
|
12,740 |
|
— |
|
12,740 |
| |||
|
Total operating expenses |
|
788,772 |
|
(32,577 |
) |
756,195 |
| |||
|
|
|
|
|
|
|
|
| |||
|
Operating income |
|
78,182 |
|
22,167 |
|
100,349 |
| |||
|
Interest expense, net |
|
(78,182 |
) |
— |
|
(78,182 |
) | |||
|
Other gains, net |
|
342 |
|
— |
|
342 |
| |||
|
Income before equity in income from unconsolidated entities |
|
342 |
|
22,167 |
|
22,509 |
| |||
|
Equity in income from unconsolidated entities |
|
1,533 |
|
— |
|
1,533 |
| |||
|
Income from continuing operations before income tax |
|
1,875 |
|
22,167 |
|
24,042 |
| |||
|
Income tax |
|
(873 |
) |
— |
|
(873 |
) | |||
|
Income from continuing operations |
|
1,002 |
|
22,167 |
|
23,169 |
| |||
|
Loss from discontinued operations |
|
(3,131 |
) |
— |
|
(3,131 |
) | |||
|
Income (loss) before gain on sale of hotels |
|
(2,129 |
) |
22,167 |
|
20,038 |
| |||
|
Gain on sale of hotels, net |
|
6,322 |
|
486 |
(c) |
6,808 |
| |||
|
Net income and comprehensive income |
|
4,193 |
|
22,653 |
|
26,846 |
| |||
|
Net loss attributable to noncontrolling interests |
|
673 |
|
— |
|
673 |
| |||
|
Preferred distributions- consolidated joint venture |
|
(1,461 |
) |
— |
|
(1,461 |
) | |||
|
|
|
|
|
|
|
|
| |||
|
Net income and comprehensive income attributable to FelCor LP |
|
3,405 |
|
22,653 |
|
26,058 |
| |||
|
Preferred distributions |
|
(25,115 |
) |
— |
|
(25,115 |
) | |||
|
Net income (loss) attributable to FelCor LP common unitholders |
|
$ |
(21,710 |
) |
$ |
22,653 |
|
$ |
943 |
|
|
|
|
|
|
|
|
|
| |||
|
Basic and diluted per common unit data: |
|
|
|
|
|
|
| |||
|
Income (loss) from continuing operations |
|
$ |
(0.13 |
) |
$ |
0.16 |
|
$ |
0.03 |
|
|
Net income (loss) |
|
$ |
(0.16 |
) |
$ |
0.16 |
|
$ |
0.01 |
|
|
Basic weighted average common units outstanding |
|
138,739 |
|
138,739 |
|
138,739 |
| |||
|
Diluted weighted average common units outstanding |
|
138,739 |
|
138,739 |
|
138,894 |
| |||
See accompanying notes to the unaudited pro forma condensed consolidated financial statements
FelCor Lodging Limited Partnership
Unaudited Pro Forma Condensed Consolidated Statements of Operations and Comprehensive Loss
(in thousands, except per unit data)
|
|
|
|
|
Morgans |
|
|
| |||
|
|
|
Historical |
|
Pro Forma Adjustment |
|
Pro Forma |
| |||
|
|
|
Six Months Ended |
|
Six Months Ended |
|
Six Months Ended |
| |||
|
|
|
June 30, 2017 |
|
June 30, 2017 |
|
June 30, 2017 |
| |||
|
|
|
|
|
(Unaudited) |
|
(Unaudited) |
| |||
|
|
|
|
|
|
|
|
| |||
|
Revenues: |
|
|
|
|
|
|
| |||
|
Hotel operating revenue : |
|
|
|
|
|
|
| |||
|
Room |
|
$ |
313,705 |
|
$ |
(3,850 |
)(c) |
$ |
309,855 |
|
|
Food and beverage |
|
69,995 |
|
(137 |
)(c) |
69,858 |
| |||
|
Other operating departments |
|
23,112 |
|
(365 |
)(c) |
22,747 |
| |||
|
Other revenue |
|
1,732 |
|
— |
|
1,732 |
| |||
|
Total revenues |
|
408,544 |
|
(4,352 |
) |
404,192 |
| |||
|
|
|
|
|
|
|
|
| |||
|
Expenses: |
|
|
|
|
|
|
| |||
|
Hotel departmental expenses : |
|
|
|
|
|
|
| |||
|
Room |
|
84,161 |
|
(2,090 |
)(c) |
82,071 |
| |||
|
Food and beverage |
|
54,503 |
|
(335 |
)(c) |
54,168 |
| |||
|
Other operating departments |
|
7,480 |
|
(159 |
)(c) |
7,321 |
| |||
|
Other property related costs |
|
103,075 |
|
(1,609 |
)(c) |
101,466 |
| |||
|
Management and franchise fees |
|
15,276 |
|
— |
|
15,276 |
| |||
|
Taxes, insurance and lease expense |
|
29,356 |
|
(657 |
)(c) |
28,699 |
| |||
|
Corporate expenses |
|
13,221 |
|
— |
|
13,221 |
| |||
|
Depreciation and amortization |
|
55,366 |
|
(1,007 |
)(c) |
54,359 |
| |||
|
Impairment |
|
35,109 |
|
(4,885 |
)(c) |
30,224 |
| |||
|
Other expenses |
|
8,591 |
|
— |
|
8,591 |
| |||
|
Total operating expenses |
|
406,138 |
|
(10,742 |
) |
395,396 |
| |||
|
|
|
|
|
|
|
|
| |||
|
Operating income |
|
2,406 |
|
6,390 |
|
8,796 |
| |||
|
Interest expense, net |
|
(38,702 |
) |
— |
|
(38,702 |
) | |||
|
Other gains, net |
|
100 |
|
— |
|
100 |
| |||
|
Loss before equity in income from unconsolidated entities |
|
(36,196 |
) |
6,390 |
|
(29,806 |
) | |||
|
|
|
|
|
|
|
|
| |||
|
Equity in income from unconsolidated entities |
|
518 |
|
— |
|
518 |
| |||
|
Loss from continuing operations before income tax |
|
(35,678 |
) |
6,390 |
|
(29,288 |
) | |||
|
Income tax |
|
(1,050 |
) |
— |
|
(1,050 |
) | |||
|
Loss from continuing operations before loss on sale of hotels |
|
(36,728 |
) |
6,390 |
|
(30,338 |
) | |||
|
|
|
|
|
|
|
|
| |||
|
Loss on sale of hotels |
|
(873 |
) |
325 |
(c) |
(548 |
) | |||
|
Net loss and comprehensive loss |
|
(37,601 |
) |
6,715 |
|
(30,886 |
) | |||
|
|
|
|
|
|
|
|
| |||
|
Net loss attributable to noncontrolling interests |
|
437 |
|
— |
|
437 |
| |||
|
Preferred distributions - consolidated joint venture |
|
(727 |
) |
— |
|
(727 |
) | |||
|
|
|
|
|
|
|
|
| |||
|
Net loss and comprehensive loss attributable to FelCor LP |
|
(37,891 |
) |
6,715 |
|
(31,176 |
) | |||
|
Preferred distributions |
|
(12,558 |
) |
— |
|
(12,558 |
) | |||
|
Net loss attributable to FelCor LP common unitholders |
|
$ |
(50,449 |
) |
$ |
6,715 |
|
$ |
(43,734 |
) |
|
|
|
|
|
|
|
|
| |||
|
Basic and diluted per common unit data: |
|
|
|
|
|
|
| |||
|
Net loss |
|
$ |
(0.36 |
) |
$ |
0.05 |
|
$ |
(0.32 |
) |
|
Basic and diluted weighted average common units outstanding |
|
138,430 |
|
138,430 |
|
138,430 |
| |||
See accompanying notes to the unaudited pro forma condensed consolidated financial statements
NOTES TO UNAUDITED PRO FORMA
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Overview
On February 14, 2017, Madison 237 Hotel, L.L.C., a subsidiary of FelCor Lodging Limited Partnership (“FelCor LP”), entered into a Purchase and Sale Agreement to sell its Morgans hotel to a third party unrelated to FelCor LP for $37 million in cash. Right, title and interest to the Morgans hotel was transferred on July 17, 2017. The Morgans hotel’s operations constituted a significant amount of income from continuing operations of FelCor LP.
Adjustments to the Unaudited Pro Forma Condensed Consolidated Financial Statements
The following unaudited pro forma condensed consolidated financial statements are presented to illustrate the effects of the transaction. The unaudited pro forma condensed consolidated balance sheet as of June 30, 2017 illustrates the estimated effects of the transaction as if the sale had occurred on June 30, 2017. The unaudited pro forma condensed consolidated income statement for the six months ended June 30, 2017 and the year ended December 31, 2016 sets forth the estimated effects of the transaction on FelCor LP’s consolidated statements of income as if the sale had occurred on January 1, 2016.
Noted below are the explanations for the adjustments included in the unaudited pro forma condensed consolidated financial statements:
a) The pro forma adjustment relates to the removal of net assets and liabilities of the sold hotel.
b) The pro forma adjustment relates to the removal of Partners’ Capital of the sold hotel.
c) Revenues and expenses have been adjusted to remove the revenues and expenses associated with the sold hotel.