Organization

FelCor Lodging Trust Incorporated (NYSE:FCH), or FelCor, is a Maryland corporation, operating as a real estate investment trust, or REIT. FelCor is the sole general partner of, and the owner of a greater than 99.5% partnership interest in, FelCor Lodging Limited Partnership, or FelCor LP, through which we held ownership interests in 50 hotels as of September 30, 2014, two of which were held for sale. At September 30, 2014, we had an aggregate of 124,899,982 shares and units outstanding, consisting of 124,288,520 shares of FelCor common stock and 611,462 FelCor LP units not owned by FelCor.

Of the 48 hotels not held for sale as of September 30, 2014, we owned 100% interests in 44 hotels, 60% interests in an entity owning one hotel and 50% interests in entities owning three hotels. We consolidate our real estate interests in the 45 hotels in which we held majority interests, and we record the real estate interests of the three hotels in which we held 50% interests using the equity method. We leased 47 of the 48 hotels in continuing operations to our taxable REIT subsidiaries, of which we own a controlling interest. We operated one 50% owned hotel without a lease. Because we owned controlling interests in these lessees, we consolidated our interests in these 47 hotels (which we refer to as our Consolidated Hotels) and reflect those hotels’ operating revenues and expenses in our statements of operations. Of our Consolidated Hotels, we owned 50% of the real estate interests in each of two hotels (we accounted for the ownership in our real estate interests of these hotels by the equity method) and majority real estate interests in each of the remaining 45 hotels (we consolidate our real estate interest in these hotels).

The following table illustrates the distribution of our 47 Consolidated Hotels at September 30, 2014:



Brand	Hotels	Rooms
Embassy Suites Hotels^®	24	6,480
Wyndham^®and Wyndham Grand^®	8	2,528
Sheraton^®and Westin^®	3	1,209
Marriott^®and Renaissance^®	3	1,321
Holiday Inn^®	3	1,256
DoubleTreeby Hilton^® and Hilton^®	3	802
Fairmont^®	1	383
Morgans and Royalton	2	285
Total	47	14,264

At September 30, 2014, our Consolidated Hotels were located in 17 states, with concentrations in California (11 hotels), Florida (seven hotels) and Texas (seven hotels). Approximately 52% of our revenue was generated from hotels in these three states during the first nine months of 2014.

At September 30, 2014, of our 47 Consolidated Hotels: (i) subsidiaries of Hilton Hotels Corporation, or Hilton, managed 26 hotels, (ii) subsidiaries of Wyndham Hotel Group, or Wyndham, managed eight hotels, (iii) subsidiaries of Starwood Hotels & Resorts Worldwide Inc., or Starwood, managed three hotels, (iv) subsidiaries of Marriott International Inc., or Marriott, managed three hotels, (v) subsidiaries of InterContinental Hotels Group, or IHG, managed three hotels, (vi) a subsidiary of Fairmont Hotels and Resorts, or Fairmont, managed one hotel, (vii) a subsidiary of Morgans Hotel Group Corporation managed two hotels, and (viii) an independent management company managed one hotel.

1. Organization — (continued)

In addition to the above hotels, we own a 95% interest in a consolidated joint venture that owns the Knickerbocker Hotel, a former hotel and office building that is being redeveloped as a 4+ star hotel in midtown Manhattan. We expect to open the Knickerbocker in February.

The information in our consolidated financial statements for the three and nine months ended September 30, 2014 and 2013 is unaudited. Preparing financial statements in conformity with accounting principles generally accepted in the United States of America, or GAAP, requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. The accompanying financial statements for the three and nine months ended September 30, 2014 and 2013, include adjustments based on management’s estimates (consisting of normal and recurring accruals), which we consider necessary for a fair statement of the results for the periods. The financial information should be read in conjunction with the consolidated financial statements for the year ended December 31, 2013, included in our Annual Report on Form 10-K. Operating results for the three and nine months ended September 30, 2014 are not necessarily indicative of actual operating results for the entire year.