IRVING, Texas--FelCor Lodging Trust Incorporated (NYSE: FCH) today declared dividends on its preferred stock. FelCor will pay a dividend of $0.4875 per share on its $1.95 Series A Cumulative Convertible Preferred Stock and $0.50 per depositary share evidencing its 8% Series C Cumulative Redeemable Preferred Stock. The dividends will each be payable on January 30, 2009, to stockholders of record on January 2, 2009.
The company has elected to suspend its common dividend. This decision reflects the expectation that Revenue Per Available Room ("RevPAR") will continue to decline in 2009. Based on its preliminary 2009 budgets (final guidance will be provided in conjunction with fourth quarter results), the company expects its RevPAR will decline by approximately six to eight percent. The company expects to generate positive cash flow during 2009, but it does not anticipate that it will be required to pay a common dividend to maintain its REIT status in 2009. By suspending the common dividend, the company will preserve approximately $48 million of liquidity through 2009.
FelCor's RevPAR for the two months ended November decreased 8.7 percent compared to the prior year period. RevPAR has been below expectations due to lower travel demand associated with the deepening recession. However, its hotels continue to gain market share and perform better than the industry. In addition, its Funds From Operations ("FFO") through November are in line with expectations, due to aggressive cost cutting at its hotels. As a result, the company is maintaining its existing 2008 FFO guidance.
"We continue to take the appropriate actions to maintain liquidity and reduce debt with our cost cutting measures and the suspension of our common dividend. Notwithstanding weakening industry trends, we are pleased with better than expected EBITDA margins in October and November and continued strong market share growth for our renovated hotels. However, given that current industry trends are expected to continue into 2009, we feel that it is prudent to suspend our common dividend," said Richard A. Smith, FelCor's President and Chief Executive Officer.
FelCor, a real estate investment trust, is the nation's largest owner of upper upscale, all-suite hotels. FelCor owns interests in 89 hotels and resorts, located in 23 states and Canada. FelCor's portfolio consists mostly of upper upscale hotels, which are flagged under global brands such as Embassy Suites Hotels(R), Doubletree(R), Hilton(R), Renaissance(R), Sheraton(R), Westin(R) and Holiday Inn(R). Additional information can be found on the Company's Web site 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. 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 a further 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 and dispositions, the availability of capital, the impact on the travel industry from increased fuel prices and 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: FelCor Lodging Trust Incorporated Stephen A. Schafer, 972-444-4912 Vice President of Strategic Planning & Investor Relations firstname.lastname@example.org
Source: FelCor Lodging Trust Incorporated