FelCor LP's Consolidating Financial Information (FelCor Lodging LP [Member])

9 Months Ended

Sep. 30, 2014

FelCor Lodging LP [Member]

FelCor LP's Consolidating Financial Information

FelCor LP’s Consolidating Financial Information

Certain of FelCor LP’s 100% owned subsidiaries (FCH/PSH, L.P.; FelCor Baton Rouge Owner, L.L.C.; FelCor/CMB Buckhead Hotel, L.L.C.; FelCor/CMB Marlborough Hotel, L.L.C.; FelCor/CMB Orsouth Holdings, L.P.; FelCor/CMB SSF Holdings, L.P.; FelCor/CSS Holdings, L.P.; FelCor Dallas Love Field Owner, L.L.C.; FelCor Lodging Holding Company, L.L.C.; FelCor Milpitas Owner, L.L.C.; FelCor TRS Borrower 4, L.L.C.; FelCor TRS Holdings, L.L.C.; FelCor Canada Co.; FelCor Hotel Asset Company, L.L.C.; FelCor Copley Plaza, L.L.C.; FelCor St. Pete (SPE), L.L.C.; FelCor Esmeralda (SPE), L.L.C.; FelCor S-4 Hotels (SPE), L.L.C.; Los Angeles International Airport Hotel Associates, a Texas L.P.; Madison 237 Hotel, L.L.C.; Myrtle Beach Owner, L.L.C.; and Royalton 44 Hotel, L.L.C., collectively, “Subsidiary Guarantors”), together with FelCor, guaranty, fully and unconditionally, except where subject to customary release provisions as described below, and jointly and severally, our senior debt.

The guaranties by the Subsidiary Guarantors may be automatically and unconditionally released upon (i) the sale or other disposition of all of the capital stock of the Subsidiary Guarantor or the sale or disposition of all or substantially all of the assets of the Subsidiary Guarantor, if, in each case, as a result of such sale or disposition, such Subsidiary Guarantor ceases to be a subsidiary of FelCor LP, (ii) the consolidation or merger of any such Subsidiary Guarantor with any person other than FelCor LP, or a subsidiary of FelCor LP, if, as a result of such consolidation or merger, such Subsidiary Guarantor ceases to be a subsidiary of FelCor LP, (iii) a legal defeasance or covenant defeasance of the indenture, (iv) the unconditional and complete release of such Subsidiary Guarantor in accordance with the modification and waiver provisions of the indenture, or (v) the designation of a restricted subsidiary that is a Subsidiary Guarantor as an unrestricted subsidiary under and in compliance with the indenture.


15.	FelCor LP’s Consolidating Financial Information – (continued)

The following tables present consolidating information for the Subsidiary Guarantors.

FELCOR LODGING LIMITED PARTNERSHIP

CONDENSED CONSOLIDATING BALANCE SHEET

September 30, 2014

(in thousands)



	FelCor LP			Subsidiary Guarantors			Non-Guarantor Subsidiaries		Eliminations			Total Consolidated
Net investment in hotels	$	2,330		$	911,642		$	743,579	$	—		$	1,657,551
Hotel development	—			—			278,619		—			278,619
Equity investment in consolidated entities	1,343,871			—			—		(1,343,871		)	—
Investment in unconsolidated entities	8,952			7,468			1,321		—			17,741
Hotels held for sale	7,515			—			19,175		—			26,690
Cash and cash equivalents	17,428			38,770			3,912		—			60,110
Restricted cash	—			10,410			23,853		—			34,263
Accounts receivable, net	857			32,923			916		—			34,696
Deferred expenses, net	17,820			—			9,533		—			27,353
Other assets	6,183			9,442			7,299		—			22,924

Total assets	$	1,404,956		$	1,010,655		$	1,088,207	$	(1,343,871	)	$	2,159,947

Debt, net	$	1,050,000		$	—		$	612,431	$	(40,787	)	$	1,621,644
Distributions payable	11,150			—			113		—			11,263
Accrued expenses and other liabilities	28,787			102,867			20,261		—			151,915

Total liabilities	1,089,937			102,867			632,805		(40,787		)	1,784,822

Redeemable units	5,723			—			—		—			5,723

Preferred units	478,766			—			—		—			478,766
Common units	(169,470		)	908,038			395,046		(1,303,084		)	(169,470		)
Total FelCor LP partners’ capital	309,296			908,038			395,046		(1,303,084		)	309,296
Noncontrolling interests	—			(250		)	18,913		—			18,663
Preferred capital in consolidated joint venture	—			—			41,443		—			41,443
Total partners’ capital	309,296			907,788			455,402		(1,303,084		)	369,402
Total liabilities and partners’ capital	$	1,404,956		$	1,010,655		$	1,088,207	$	(1,343,871	)	$	2,159,947

15. FelCor LP’s Consolidating Financial Information – (continued)

FELCOR LODGING LIMITED PARTNERSHIP

CONDENSED CONSOLIDATING BALANCE SHEET

December 31, 2013

(in thousands)



	FelCor LP			Subsidiary Guarantors			Non-Guarantor Subsidiaries		Eliminations			Total Consolidated
Net investment in hotels	$	48,971		$	1,053,724		$	550,572	$	—		$	1,653,267
Hotel development	—			—			216,747		—			216,747
Equity investment in consolidated entities	1,508,593			—			—		(1,508,593		)	—
Investment in unconsolidated entities	34,090			11,497			1,356		—			46,943
Hotel held for sale	—			—			16,319		—			16,319
Cash and cash equivalents	5,227			33,283			7,135		—			45,645
Restricted cash	—			9,051			68,176		—			77,227
Accounts receivable, net	516			34,366			865		—			35,747
Deferred expenses, net	20,540			—			8,785		—			29,325
Other assets	6,248			10,767			17,998		(11,953		)	23,060
Total assets	$	1,624,185		$	1,152,688		$	887,953	$	(1,520,546	)	$	2,144,280

Debt, net	$	1,279,190		$	11,953		$	464,036	$	(91,953	)	$	1,663,226
Distributions payable	11,047			—			—		—			11,047
Accrued expenses and other liabilities	37,980			96,494			16,264		—			150,738

Total liabilities	1,328,217			108,447			480,300		(91,953		)	1,825,011

Redeemable units	5,039			—			—		—			5,039

Preferred units	478,774			—			—		—			478,774
Common units	(212,888		)	1,039,903			363,647		(1,403,550		)	(212,888		)
Accumulated other comprehensive income	25,043			4,569			20,474		(25,043		)	25,043
Total FelCor LP partners’ capital	290,929			1,044,472			384,121		(1,428,593		)	290,929
Noncontrolling interests	—			(231		)	23,532		—			23,301
Total partners’ capital	290,929			1,044,241			407,653		(1,428,593		)	314,230
Total liabilities and partners’ capital	$	1,624,185		$	1,152,688		$	887,953	$	(1,520,546	)	$	2,144,280

. FelCor LP’s Consolidating Financial Information – (continued)

FELCOR LODGING LIMITED PARTNERSHIP

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

For the Three Months Ended September 30, 2014

(in thousands)



	FelCor LP			Subsidiary Guarantors			Non-Guarantor Subsidiaries			Eliminations			Total Consolidated
Revenues:
Hotel operating revenue	$	—		$	232,449		$	—		$	—		$	232,449
Percentage lease revenue	2,537			—			27,872			(30,409		)	—
Other revenue	3			1,425			179			—			1,607
Total revenues	2,540			233,874			28,051			(30,409		)	234,056

Expenses:
Hotel operating expenses	—			151,804			—			—			151,804
Taxes, insurance and lease expense	506			45,188			3,846			(30,409		)	19,131
Corporate expenses	152			4,295			1,995			—			6,442
Depreciation and amortization	694			17,199			10,630			—			28,523
Other expenses	84			7,116			2,546			—			9,746
Total operating expenses	1,436			225,602			19,017			(30,409		)	215,646
Operating income	1,104			8,272			9,034			—			18,410
Interest expense, net	(16,850		)	(126		)	(4,946		)	—			(21,922		)
Debt extinguishment	(3,816		)	—			(914		)	—			(4,730		)
Gain on sale of investment in unconsolidated entities, net	30,184			—			—			—			30,184
Gain from remeasurement of unconsolidated entities, net	20,733			—			—			—			20,733
Income before equity in income from unconsolidated entities	31,355			8,146			3,174			—			42,675
Equity in income from consolidated entities	40,734			—			—			(40,734		)	—
Equity in income from unconsolidated entities	1,099			259			(11		)	—			1,347
Income from continuing operations	73,188			8,405			3,163			(40,734		)	44,022
Loss from discontinued operations	—			(8		)	—			—			(8		)
Income before gain on sale of hotels	73,188			8,397			3,163			(40,734		)	44,014
Gain on sale of hotels, net	(612		)	22,176			7,992			—			29,556
Net income	72,576			30,573			11,155			(40,734		)	73,570
Income attributable to noncontrolling interests	—			217			(863		)	—			(646		)
Preferred distributions - consolidated joint venture	—			—			(348		)	—			(348		)
Net income attributable to FelCor LP	72,576			30,790			9,944			(40,734		)	72,576
Preferred distributions	(9,678		)	—			—			—			(9,678		)
Net income attributable to FelCor LP common unitholders	$	62,898		$	30,790		$	9,944		$	(40,734	)	$	62,898

15. FelCor LP’s Consolidating Financial Information – (continued)

FELCOR LODGING LIMITED PARTNERSHIP

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

For the Three Months Ended September 30, 2013

(in thousands)



	FelCor LP			Subsidiary Guarantors			Non-Guarantor Subsidiaries			Eliminations			Total Consolidated
Revenues:
Hotel operating revenue	$	—		$	228,845		$	—		$	—		$	228,845
Percentage lease revenue	2,756			—			20,950			(23,706		)	—
Other revenue	1			1,401			182			—			1,584
Total revenues	2,757			230,246			21,132			(23,706		)	230,429

Expenses:
Hotel operating expenses	—			151,418			—			—			151,418
Taxes, insurance and lease expense	1,066			45,204			3,272			(23,706		)	25,836
Corporate expenses	(212		)	4,694			1,335			—			5,817
Depreciation and amortization	1,004			18,038			10,778			—			29,820
Conversion expenses	—			(17		)	(64		)	—			(81		)
Other expenses	105			1,174			823			—			2,102
Total operating expenses	1,963			220,511			16,144			(23,706		)	214,912
Operating income	794			9,735			4,988			—			15,517
Interest expense, net	(20,976		)	(317		)	(4,503		)	—			(25,796		)
Other gains, net	—			—			21			—			21
Loss before equity in income from unconsolidated entities	(20,182		)	9,418			506			—			(10,258		)
Equity in income from consolidated entities	21,537			—			—			(21,537		)	—
Equity in income from unconsolidated entities	1,602			509			(11		)	—			2,100
Loss from continuing operations	2,957			9,927			495			(21,537		)	(8,158		)
Income from discontinued operations	241			2,001			9,705			—			11,947
Net income	3,198			11,928			10,200			(21,537		)	3,789
Income attributable to noncontrolling interests	—			319			(910		)	—			(591		)
Net income attributable to FelCor LP	3,198			12,247			9,290			(21,537		)	3,198
Preferred distributions	(9,678		)	—			—			—			(9,678		)
Net loss attributable to FelCor LP common unitholders	$	(6,480	)	$	12,247		$	9,290		$	(21,537	)	$	(6,480	)

15. FelCor LP’s Consolidating Financial Information – (continued)

FELCOR LODGING LIMITED PARTNERSHIP

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

For the Nine Months Ended September 30, 2014

(in thousands)



	FelCor LP			Subsidiary Guarantors			Non-Guarantor Subsidiaries			Eliminations			Total Consolidated
Revenues:
Hotel operating revenue	$	—		$	711,750		$	—		$	—		$	711,750
Percentage lease revenue	5,846			—			77,882			(83,728		)	—
Other revenue	4			2,774			392			—			3,170
Total revenues	5,850			714,524			78,274			(83,728		)	714,920

Expenses:
Hotel operating expenses	—			468,618			—			—			468,618
Taxes, insurance and lease expense	1,375			141,561			10,548			(83,728		)	69,756
Corporate expenses	423			14,627			6,864			—			21,914
Depreciation and amortization	2,678			52,969			31,559			—			87,206
Other expenses	119			8,745			5,010			—			13,874
Total operating expenses	4,595			686,520			53,981			(83,728		)	661,368
Operating income	1,255			28,004			24,293			—			53,552
Interest expense, net	(57,634		)	(760		)	(13,250		)	—			(71,644		)
Debt extinguishment	(3,816		)	—			(947		)	—			(4,763		)
Gain on sale of investment in unconsolidated entities, net	30,184			—			—			—			30,184
Gain from remeasurement of unconsolidated entities, net	20,733			—			—			—			20,733
Other gains, net	—			100			—			—			100
Income before equity in income from unconsolidated entities	(9,278		)	27,344			10,096			—			28,162
Equity in income from consolidated entities	88,114			—			—			(88,114		)	—
Equity in income from unconsolidated entities	4,213			577			(34		)	—			4,756
Income from continuing operations	83,049			27,921			10,062			(88,114		)	32,918
Income from discontinued operations	—			26			106			—			132
Income before gain on sale of hotels	83,049			27,947			10,168			(88,114		)	33,050
Gain on sale of hotels, net	(1,060		)	22,147			29,552			—			50,639
Net income	81,989			50,094			39,720			(88,114		)	83,689
Income attributable to noncontrolling interests	—			238			(1,068		)	—			(830		)
Preferred distributions - consolidated joint venture	—			—			(870		)	—			(870		)
Net income attributable to FelCor LP	81,989			50,332			37,782			(88,114		)	81,989
Preferred distributions	(29,034		)	—			—			—			(29,034		)
Net income attributable to FelCor LP common unitholders	$	52,955		$	50,332		$	37,782		$	(88,114	)	$	52,955

15. FelCor LP’s Consolidating Financial Information – (continued)

FELCOR LODGING LIMITED PARTNERSHIP

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

For the Nine Months Ended September 30, 2013

(in thousands)



	FelCor LP			Subsidiary Guarantors			Non-Guarantor Subsidiaries			Eliminations			Total Consolidated
Revenues:
Hotel operating revenue	$	—		$	676,188		$	—		$	—		$	676,188
Percentage lease revenue	5,633			—			65,882			(71,515		)	—
Other revenue	6			2,653			375			—			3,034
Total revenues	5,639			678,841			66,257			(71,515		)	679,222

Expenses:
Hotel operating expenses	—			454,329			—			—			454,329
Taxes, insurance and lease expense	1,756			132,630			9,982			(71,515		)	72,853
Corporate expenses	169			15,048			5,126			—			20,343
Depreciation and amortization	3,439			53,515			32,519			—			89,473
Impairment loss	14,294			—			10,147			—			24,441
Conversion expenses	23			666			445			—			1,134
Other expenses	2,883			2,533			1,422			—			6,838
Total operating expenses	22,564			658,721			59,641			(71,515		)	669,411
Operating income	(16,925		)	20,120			6,616			—			9,811
Interest expense, net	(63,961		)	(940		)	(13,556		)	—			(78,457		)
Other gains, net	—			—			21			—			21
Loss before equity in income from unconsolidated entities	(80,886		)	19,180			(6,919		)	—			(68,625		)
Equity in income from consolidated entities	38,096			—			—			(38,096		)	—
Equity in income from unconsolidated entities	3,454			675			(34		)	—			4,095
Loss from continuing operations	(39,336		)	19,855			(6,953		)	(38,096		)	(64,530		)
Income from discontinued operations	(2,654		)	1,466			20,107			—			18,919
Net loss	(41,990		)	21,321			13,154			(38,096		)	(45,611		)
Loss attributable to noncontrolling interests	—			558			3,063			—			3,621
Net loss attributable to FelCor LP	(41,990		)	21,879			16,217			(38,096		)	(41,990		)
Preferred distributions	(29,034		)	—			—			—			(29,034		)
Net loss attributable to FelCor LP common unitholders	$	(71,024	)	$	21,879		$	16,217		$	(38,096	)	$	(71,024	)

15. FelCor LP’s Consolidating Financial Information – (continued)

FELCOR LODGING LIMITED PARTNERSHIP

CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME

For the Three Months Ended September 30, 2014

(in thousands)



	FelCor LP			Subsidiary Guarantors			Non-Guarantor Subsidiaries			Eliminations			Total Consolidated
Net income	$	72,576		$	30,573		$	11,155		$	(40,734	)	$	73,570
Foreign currency translation adjustment	(445		)	(103		)	(342		)	445			(445		)
Reclassification of foreign currency translation to gain	(24,553		)	(4,448		)	(20,105		)	24,553			(24,553		)
Comprehensive income	47,578			26,022			(9,292		)	(15,736		)	48,572
Comprehensive income attributable to noncontrolling interests	—			217			(863		)	—			(646		)
Preferred distributions - consolidated joint venture	—			—			(348		)	—			(348		)
Comprehensive income attributable to FelCor LP	$	47,578		$	26,239		$	(10,503	)	$	(15,736	)	$	47,578

FELCOR LODGING LIMITED PARTNERSHIP

CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME

For the Three Months Ended September 30, 2013

(in thousands)



	FelCor LP		Subsidiary Guarantors		Non-Guarantor Subsidiaries			Eliminations			Total Consolidated
Net income	$	3,198	$	11,928	$	10,200		$	(21,537	)	$	3,789
Foreign currency translation adjustment	329		54		275			(329		)	329
Comprehensive income	3,527		11,982		10,475			(21,866		)	4,118
Comprehensive income attributable to noncontrolling interests	—		319		(910		)	—			(591		)
Comprehensive income attributable to FelCor LP	$	3,527	$	12,301	$	9,565		$	(21,866	)	$	3,527

15. FelCor LP’s Consolidating Financial Information – (continued)

FELCOR LODGING LIMITED PARTNERSHIP

CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME

For the Nine Months Ended September 30, 2014

(in thousands)



	FelCor LP			Subsidiary Guarantors			Non-Guarantor Subsidiaries			Eliminations			Total Consolidated
Net income	$	81,989		$	50,094		$	39,720		$	(88,114	)	$	83,689
Foreign currency translation adjustment	(490		)	(121		)	(369		)	490			(490		)
Reclassification of foreign currency translation to gain	(24,553		)	(4,448		)	(20,105		)	24,553			(24,553		)
Comprehensive income	56,946			45,525			19,246			(63,071		)	58,646
Comprehensive income attributable to noncontrolling interests	—			238			(1,068		)	—			(830		)
Preferred distributions - consolidated joint venture	—			—			(870		)	—			(870		)
Comprehensive income attributable to FelCor LP	$	56,946		$	45,763		$	17,308		$	(63,071	)	$	56,946

FELCOR LODGING LIMITED PARTNERSHIP

CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE LOSS

For the Nine Months Ended September 30, 2013

(in thousands)



	FelCor LP			Subsidiary Guarantors			Non-Guarantor Subsidiaries			Eliminations			Total Consolidated
Net loss	$	(41,990	)	$	21,321		$	13,154		$	(38,096	)	$	(45,611	)
Foreign currency translation adjustment	(595		)	(153		)	(442		)	595			(595		)
Comprehensive loss	(42,585		)	21,168			12,712			(37,501		)	(46,206		)
Comprehensive loss attributable to noncontrolling interests	—			558			3,063			—			3,621
Comprehensive loss attributable to FelCor LP	$	(42,585	)	$	21,726		$	15,775		$	(37,501	)	$	(42,585	)

15. FelCor LP’s Consolidating Financial Information – (continued)

FELCOR LODGING LIMITED PARTNERSHIP

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

For the Nine Months Ended September 30, 2014

(in thousands)



	FelCor LP			Subsidiary Guarantors			Non-Guarantor Subsidiaries			Eliminations			Total Consolidated
Operating activities:
Cash flows from operating activities	$	(50,911	)	$	89,148		$	49,428		$	—		$	87,665
Investing activities:
Improvements and additions to hotels	(409		)	(46,114		)	(19,024		)	—			(65,547		)
Hotel development	—			—			(63,381		)	—			(63,381		)
Net proceeds from asset sales	(1,091		)	13,981			107,101			—			119,991
Proceeds from unconsolidated joint venture transaction	3,154			—			878			—			4,032
Insurance proceeds	—			255			—			—			255
Change in restricted cash - investing	—			(1,783		)	44,747			—			42,964
Distributions from unconsolidated entities	6,052			4,606			—			—			10,658
Intercompany financing	328,666			—			—			(328,666		)	—
Cash flows from investing activities	336,372			(29,055		)	70,321			(328,666		)	48,972
Financing activities:
Proceeds from borrowings	—			—			439,607			—			439,607
Repayment of borrowings	(236,738		)	—			(317,129		)	—			(553,867		)
Payment of deferred financing fees	(4		)	—			(3,048		)	—			(3,052		)
Acquisition of noncontrolling interest	—			—			(5,850		)	—			(5,850		)
Distributions paid to noncontrolling interests	—			(684		)	(7,950		)	—			(8,634		)
Contributions from noncontrolling interests	—			901			4,607			—			5,508
Distributions paid to preferred unitholders	(29,034		)	—			—			—			(29,034		)
Distributions paid to common unitholders	(7,453		)	—			—			—			(7,453		)
Net proceeds from issuance of preferred capital - consolidated joint venture	—			—			41,443			—			41,443
Intercompany financing	—			(54,771		)	(273,895		)	328,666			—
Other	(31		)	—			(757		)	—			(788		)
Cash flows from financing activities	(273,260		)	(54,554		)	(122,972		)	328,666			(122,120		)
Effect of exchange rate changes on cash	—			(52		)	—			—			(52		)
Change in cash and cash equivalents	12,201			5,487			(3,223		)	—			14,465
Cash and cash equivalents at beginning of period	5,227			33,283			7,135			—			45,645
Cash and cash equivalents at end of period	$	17,428		$	38,770		$	3,912		$	—		$	60,110

15. FelCor LP’s Consolidating Financial Information – (continued)

FELCOR LODGING LIMITED PARTNERSHIP

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

For the Nine Months Ended September 30, 2013

(in thousands)



	FelCor LP			Subsidiary Guarantors			Non-Guarantor Subsidiaries			Eliminations			Total Consolidated
Operating activities:
Cash flows from operating activities	$	(33,236	)	$	73,336		$	28,271		$	—		$	68,371
Investing activities:
Improvements and additions to hotels	2,467			(46,230		)	(30,693		)	—			(74,456		)
Hotel development	—			—			(46,724		)	—			(46,724		)
Net proceeds from asset sales	(24		)	18,277			71,676			—			89,929
Distributions from unconsolidated entities	5,343			875			—			—			6,218
Contributions to unconsolidated entities	—			(1,500		)	—			—			(1,500		)
Intercompany financing	64,238			—			—			(64,238		)	—
Other	—			2,006			(2,458		)	—			(452		)
Cash flows from investing activities	72,024			(26,572		)	(8,199		)	(64,238		)	(26,985		)
Financing activities:
Proceeds from borrowings	—			—			137,245			—			137,245
Repayment of borrowings	—			—			(123,741		)	—			(123,741		)
Distributions paid to preferred unitholders	(29,034		)	—			—			—			(29,034		)
Intercompany financing	—			(31,907		)	(32,331		)	64,238			—
Other	(2,335		)	401			(1,044		)	—			(2,978		)
Cash flows from financing activities	(31,369		)	(31,506		)	(19,871		)	64,238			(18,508		)
Effect of exchange rate changes on cash	—			(34		)	—			—			(34		)
Change in cash and cash equivalents	7,419			15,224			201			—			22,844
Cash and cash equivalents at beginning of period	8,312			30,425			7,008			—			45,745
Cash and cash equivalents at end of period	$	15,731		$	45,649		$	7,209		$	—		$	68,589