FelCor LP's Consolidating Financial Information

6 Months Ended

Jun. 30, 2016

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/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 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 St. Pete (SPE), L.L.C.; FelCor Esmeralda (SPE), L.L.C.; FelCor S-4 Hotels (SPE), L.L.C.; 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.


16.	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

June 30, 2016

(in thousands)



	FelCor LP			Subsidiary Guarantors			Non-Guarantor Subsidiaries		Eliminations			Total Consolidated
Net investment in hotels	$	—		$	610,161		$	1,082,258	$	—		$	1,692,419
Equity investment in consolidated entities	1,215,589			—			—		(1,215,589		)	—
Investment in unconsolidated entities	3,415			4,765			1,242		—			9,422
Cash and cash equivalents	16,670			39,473			2,045		—			58,188
Restricted cash	—			18,982			4,724		—			23,706
Accounts receivable, net	2,116			34,582			1,952		—			38,650
Deferred expenses, net	—			—			5,464		—			5,464
Other assets	4,534			10,803			4,210		—			19,547

Total assets	$	1,242,324		$	718,766		$	1,101,895	$	(1,215,589	)	$	1,847,396

Debt, net	$	984,985		$	—		$	488,154	$	(39,436	)	$	1,433,703
Distributions payable	14,831			—			120		—			14,951
Accrued expenses and other liabilities	22,346			92,697			11,906		—			126,949

Total liabilities	1,022,162			92,697			500,180		(39,436		)	1,575,603

Redeemable units, at redemption value	3,809			—			—		—			3,809

Preferred units	309,337			—			—		—			309,337
Common units	(92,984		)	626,886			549,267		(1,176,153		)	(92,984		)
Total FelCor LP partners’ capital	216,353			626,886			549,267		(1,176,153		)	216,353
Noncontrolling interests	—			(817		)	8,665		—			7,848
Preferred capital in consolidated joint venture	—			—			43,783		—			43,783
Total partners’ capital	216,353			626,069			601,715		(1,176,153		)	267,984
Total liabilities and partners’ capital	$	1,242,324		$	718,766		$	1,101,895	$	(1,215,589	)	$	1,847,396

16. FelCor LP’s Consolidating Financial Information — (continued)

FELCOR LODGING LIMITED PARTNERSHIP

CONDENSED CONSOLIDATING BALANCE SHEET

December 31, 2015

(in thousands)



	FelCor LP			Subsidiary Guarantors			Non-Guarantor Subsidiaries		Eliminations			Total Consolidated
Net investment in hotels	$	—		$	625,835		$	1,103,696	$	—		$	1,729,531
Equity investment in consolidated entities	1,260,779			—			—		(1,260,779		)	—
Investment in unconsolidated entities	4,440			3,871			1,264		—			9,575
Cash and cash equivalents	21,219			34,294			4,273		—			59,786
Restricted cash	—			15,442			2,260		—			17,702
Accounts receivable, net	644			25,575			1,917		—			28,136
Deferred expenses, net	—			—			6,390		—			6,390
Other assets	3,587			8,786			2,419		—			14,792
Total assets	$	1,290,669		$	713,803		$	1,122,219	$	(1,260,779	)	$	1,865,912

Debt, net	$	984,226		$	—		$	465,099	$	(39,436	)	$	1,409,889
Distributions payable	15,016			—			124		—			15,140
Accrued expenses and other liabilities	26,810			83,787			14,677		—			125,274

Total liabilities	1,026,052			83,787			479,900		(39,436		)	1,550,303

Redeemable units, at redemption value	4,464			—			—		—			4,464

Preferred units	309,337			—			—		—			309,337
Common units	(49,184		)	630,833			590,510		(1,221,343		)	(49,184		)
Total FelCor LP partners’ capital	260,153			630,833			590,510		(1,221,343		)	260,153
Noncontrolling interests	—			(817		)	8,623		—			7,806
Preferred capital in consolidated joint venture	—			—			43,186		—			43,186
Total partners’ capital	260,153			630,016			642,319		(1,221,343		)	311,145
Total liabilities and partners’ capital	$	1,290,669		$	713,803		$	1,122,219	$	(1,260,779	)	$	1,865,912

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

FELCOR LODGING LIMITED PARTNERSHIP

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME

For the Three Months Ended June 30, 2016

(in thousands)



	FelCor LP			Subsidiary Guarantors			Non-Guarantor Subsidiaries			Eliminations			Total Consolidated
Revenues:
Hotel operating revenue	$	—		$	236,761		$	—		$	—		$	236,761
Percentage lease revenue	—			—			46,953			(46,953		)	—
Other revenue	1			1,022			122			—			1,145
Total revenues	1			237,783			47,075			(46,953		)	237,906

Expenses:
Hotel operating expenses	—			145,887			—			—			145,887
Taxes, insurance and lease expense	26			56,112			5,679			(46,953		)	14,864
Corporate expenses	—			3,360			2,687			—			6,047
Depreciation and amortization	93			12,030			17,054			—			29,177
Impairment	—			6,333			—			—			6,333
Other expenses	187			1,661			294			—			2,142
Total operating expenses	306			225,383			25,714			(46,953		)	204,450
Operating income	(305		)	12,400			21,361			—			33,456
Interest expense, net	(14,601		)	9			(5,315		)	—			(19,907		)
Other gains, net	—			—			100			—			100
Income before equity in income from unconsolidated entities	(14,906		)	12,409			16,146			—			13,649
Equity in income from consolidated entities	27,974			—			—			(27,974		)	—
Equity in income from unconsolidated entities	652			85			(11		)	—			726
Income from continuing operations before income tax	13,720			12,494			16,135			(27,974		)	14,375
Income tax	(48		)	73			—			—			25
Income from continuing operations before loss on sale of hotels	13,672			12,567			16,135			(27,974		)	14,400
Loss on sale of hotels, net	(250		)	(300		)	(80		)	—			(630		)
Net income and comprehensive income	13,422			12,267			16,055			(27,974		)	13,770
Loss attributable to noncontrolling interests	—			(57		)	73			—			16
Preferred distributions - consolidated joint venture	—			—			(364		)	—			(364		)
Net income and comprehensive income attributable to FelCor LP	13,422			12,210			15,764			(27,974		)	13,422
Preferred distributions	(6,279		)	—			—			—			(6,279		)
Net income attributable to FelCor LP common unitholders	$	7,143		$	12,210		$	15,764		$	(27,974	)	$	7,143

16. FelCor LP’s Consolidating Financial Information — (continued)

FELCOR LODGING LIMITED PARTNERSHIP

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE LOSS

For the Three Months Ended June 30, 2015

(in thousands)



	FelCor LP			Subsidiary Guarantors			Non-Guarantor Subsidiaries			Eliminations			Total Consolidated
Revenues:
Hotel operating revenue	$	—		$	236,049		$	—		$	—		$	236,049
Percentage lease revenue	—			—			46,687			(46,687		)	—
Other revenue	107			4,800			147			—			5,054
Total revenues	107			240,849			46,834			(46,687		)	241,103

Expenses:
Hotel operating expenses	—			147,025			—			—			147,025
Taxes, insurance and lease expense	437			56,412			6,248			(46,687		)	16,410
Corporate expenses	(138		)	3,687			2,981			—			6,530
Depreciation and amortization	47			12,729			15,974			—			28,750
Other expenses	3			1,463			(55		)	—			1,411
Total operating expenses	349			221,316			25,148			(46,687		)	200,126
Operating income	(242		)	19,533			21,686			—			40,977
Interest expense, net	(14,572		)	3			(5,709		)	—			(20,278		)
Debt extinguishment	(28,446		)	—			(2,377		)	—			(30,823		)
Other gains, net	—			—			166			—			166
Loss before equity in income from unconsolidated entities	(43,260		)	19,536			13,766			—			(9,958		)
Equity in income from consolidated entities	32,380			—			—			(32,380		)	—
Equity in income from unconsolidated entities	7,297			227			(11		)	—			7,513
Loss from continuing operations before income tax	(3,583		)	19,763			13,755			(32,380		)	(2,445		)
Income tax	332			(501		)	—			—			(169		)
Loss from continuing operations	(3,251		)	19,262			13,755			(32,380		)	(2,614		)
Loss from discontinued operations	—			—			(83		)	—			(83		)
Loss before loss on sale of hotels	(3,251		)	19,262			13,672			(32,380		)	(2,697		)
Loss on sale of hotels, net	(108		)	(3		)	(439		)	—			(550		)
Net loss and comprehensive loss	(3,359		)	19,259			13,233			(32,380		)	(3,247		)
Loss attributable to noncontrolling interests	—			251			(4		)	—			247
Preferred distributions - consolidated joint venture	—			—			(359		)	—			(359		)
Net loss and comprehensive loss attributable to FelCor LP	(3,359		)	19,510			12,870			(32,380		)	(3,359		)
Preferred distributions	(7,903		)	—			—			—			(7,903		)
Redemption of preferred units	(6,096		)	—			—			—			(6,096		)
Net loss attributable to FelCor LP common unitholders	$	(17,358	)	$	19,510		$	12,870		$	(32,380	)	$	(17,358	)

16. FelCor LP’s Consolidating Financial Information — (continued)

FELCOR LODGING LIMITED PARTNERSHIP

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME

For the Six Months Ended June 30, 2016

(in thousands)



	FelCor LP			Subsidiary Guarantors			Non-Guarantor Subsidiaries			Eliminations			Total Consolidated
Revenues:
Hotel operating revenue	$	—		$	446,218		$	—		$	—		$	446,218
Percentage lease revenue	—			—			90,498			(90,498		)	—
Other revenue	187			1,454			191			—			1,832
Total revenues	187			447,672			90,689			(90,498		)	448,050

Expenses:
Hotel operating expenses	—			288,116			—			—			288,116
Taxes, insurance and lease expense	53			107,595			11,296			(90,498		)	28,446
Corporate expenses	—			7,695			6,752			—			14,447
Depreciation and amortization	144			24,027			34,189			—			58,360
Impairment	—			6,333			—			—			6,333
Other expenses	419			2,213			338			—			2,970
Total operating expenses	616			435,979			52,575			(90,498		)	398,672
Operating income	(429		)	11,693			38,114			—			49,378
Interest expense, net	(29,262		)	18			(10,383		)	—			(39,627		)
Other gains, net	—			—			100			—			100
Income before equity in income from unconsolidated entities	(29,691		)	11,711			27,831			—			9,851
Equity in income from consolidated entities	37,841			—			—			(37,841		)	—
Equity in income from unconsolidated entities	716			(121		)	(23		)	—			572
Income from continuing operations before income tax	8,866			11,590			27,808			(37,841		)	10,423
Income tax	(164		)	(226		)	—			—			(390		)
Income before loss on sale of hotels	8,702			11,364			27,808			(37,841		)	10,033
Loss on sale of hotels, net	(250		)	(757		)	(337		)	—			(1,344		)
Net income and comprehensive income	8,452			10,607			27,471			(37,841		)	8,689
Loss attributable to noncontrolling interests	—			313			174			—			487
Preferred distributions - consolidated joint venture	—			—			(724		)	—			(724		)
Net income and comprehensive income attributable to FelCor LP	8,452			10,920			26,921			(37,841		)	8,452
Preferred distributions	(12,558		)	—			—			—			(12,558		)
Net loss attributable to FelCor LP common unitholders	$	(4,106	)	$	10,920		$	26,921		$	(37,841	)	$	(4,106	)

16. FelCor LP’s Consolidating Financial Information — (continued)

FELCOR LODGING LIMITED PARTNERSHIP

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME

For the Six Months Ended June 30, 2015

(in thousands)



	FelCor LP			Subsidiary Guarantors				Non-Guarantor Subsidiaries			Eliminations			Total Consolidated
Revenues:
Hotel operating revenue	$	—		$	449,334			$	—		$	—		$	449,334
Percentage lease revenue	—			—				85,874			(85,874		)	—
Other revenue	108			5,147				209			—			5,464
Total revenues	108			454,481				86,083			(85,874		)	454,798

Expenses:
Hotel operating expenses	—			290,661				—			—			290,661
Taxes, insurance and lease expense	(191		)	105,911				11,371			(85,874		)	31,217
Corporate expenses	—			8,292				6,811			—			15,103
Depreciation and amortization	89			25,894				30,539			—			56,522
Other expenses	3			5,509				127			—			5,639
Total operating expenses	(99		)	436,267				48,848			(85,874		)	399,142
Operating income	207			18,214				37,235			—			55,656
Interest expense, net	(28,312		)	6				(11,453		)	—			(39,759		)
Debt extinguishment	(28,446		)	—				(2,450		)	—			(30,896		)
Other gains, net	—			—				166			—			166
Loss before equity in income from unconsolidated entities	(56,551		)	18,220				23,498			—			(14,833		)
Equity in income from consolidated entities	52,738			—				—			(52,738		)	—
Equity in income from unconsolidated entities	7,644			41				(23		)	—			7,662
Loss from continuing operations before income tax	3,831			18,261				23,475			(52,738		)	(7,171		)
Income tax	(142		)	(196		)		—			—			(338		)
Loss from continuing operations	3,689			18,065				23,475			(52,738		)	(7,509		)
Loss from discontinued operations	—			4				(83		)	—			(79		)
Loss before gain on sale of hotels	3,689			18,069				23,392			(52,738		)	(7,588		)
Gain on sale of hotels, net	(279		)	(12		)		16,628			—			16,337
Net income and comprehensive income	3,410			18,057				40,020			(52,738		)	8,749
Income attributable to noncontrolling interests	—			510				(5,142		)	—			(4,632		)
Preferred distributions - consolidated joint venture	—			—				(707		)	—			(707		)
Net income and comprehensive income attributable to FelCor LP	3,410			18,567				34,171			(52,738		)	3,410
Preferred distributions	(17,581		)	—				—			—			(17,581		)
Redemption of preferred units	(6,096		)	—			—	—			—			(6,096		)
Net loss attributable to FelCor LP common unitholders	$	(20,267	)	$	18,567			$	34,171		$	(52,738	)	$	(20,267	)

16. FelCor LP’s Consolidating Financial Information — (continued)

FELCOR LODGING LIMITED PARTNERSHIP

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

For the Six Months Ended June 30, 2016

(in thousands)



	FelCor LP			Subsidiary Guarantors			Non-Guarantor Subsidiaries			Eliminations			Total Consolidated
Operating activities:
Cash flows from operating activities	$	(34,655	)	$	41,661		$	64,559		$	—		$	71,565
Investing activities:
Improvements and additions to hotels	(7		)	(15,093		)	(16,809		)	—			(31,909		)
Net proceeds from asset sales	(723		)	(533		)	(205		)	—			(1,461		)
Insurance proceeds	—			—			94			—			94
Change in restricted cash - investing	—			(3,540		)	(2,464		)	—			(6,004		)
Distributions from unconsolidated entities	386			—			—			—			386
Intercompany financing	87,950			—			—			(87,950		)	—
Cash flows from investing activities	87,606			(19,166		)	(19,384		)	(87,950		)	(38,894		)
Financing activities:
Proceeds from borrowings	—			—			50,000			—			50,000
Repayment of borrowings	—			—			(27,145		)	—			(27,145		)
Payment of deferred financing fees	—			—			(12		)	—			(12		)
Distributions paid to noncontrolling interests	—			—			(1		)	—			(1		)
Contributions from noncontrolling interests	—			313			217			—			530
Repurchase of common units	(27,427		)	—			—			—			(27,427		)
Distributions paid to preferred unitholders	(12,558		)	—			—			—			(12,558		)
Distributions paid to common unitholders	(16,848		)	—			—			—			(16,848		)
Net proceeds from issuance of preferred capital - consolidated joint venture	—			—			597			—			597
Intercompany financing	—			(17,620		)	(70,330		)	87,950			—
Other	(667		)	—			(729		)	—			(1,396		)
Cash flows from financing activities	(57,500		)	(17,307		)	(47,403		)	87,950			(34,260		)
Effect of exchange rate changes on cash	—			(9		)	—			—			(9		)
Change in cash and cash equivalents	(4,549		)	5,179			(2,228		)	—			(1,598		)
Cash and cash equivalents at beginning of period	21,219			34,294			4,273			—			59,786
Cash and cash equivalents at end of period	$	16,670		$	39,473		$	2,045		$	—		$	58,188

16. FelCor LP’s Consolidating Financial Information — (continued)

FELCOR LODGING LIMITED PARTNERSHIP

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

For the Six Months Ended June 30, 2015

(in thousands)



	FelCor LP			Subsidiary Guarantors			Non-Guarantor Subsidiaries			Eliminations			Total Consolidated
Operating activities:
Cash flows from operating activities	$	(27,492	)	$	35,690		$	60,750		$	—		$	68,948
Investing activities:
Improvements and additions to hotels	(129		)	(15,483		)	(10,145		)	—			(25,757		)
Hotel development	—			—			(21,637		)	—			(21,637		)
Net proceeds from asset sales	(306		)	10			134,174			—			133,878
Insurance proceeds	274			—			—			—			274
Change in restricted cash - investing	—			(1,350		)	(1,714		)	—			(3,064		)
Distributions from unconsolidated entities	6,303			—			—			—			6,303
Intercompany financing	167,009			—			—			(167,009		)	—
Cash flows from investing activities	173,151			(16,823		)	100,678			(167,009		)	89,997
Financing activities:
Proceeds from borrowings	475,000			—			504,000			—			979,000
Repayment of borrowings	(545,440		)	—			(504,616		)	—			(1,050,056		)
Payment of deferred financing fees	(8,261		)	—			(5,661		)	—			(13,922		)
Distributions paid to preferred unitholders	(19,847		)	—			—			—			(19,847		)
Distributions paid to common unitholders	(10,765		)	—			—			—			(10,765		)
Net proceeds from common unit issuance	198,720			—			—			—			198,720
Distributions paid to noncontrolling interests	—			(85		)	(15,893		)	—			(15,978		)
Contributions from noncontrolling interests	—			483			1,425			—			1,908
Redemption of preferred units	(169,986		)	—			—			—			(169,986		)
Net proceeds from issuance of preferred capital- consolidated joint venture	—			—			1,746			—			1,746
Intercompany financing	—			(18,229		)	(148,780		)	167,009			—
Other	(55		)	—			(707		)	—			(762		)
Cash flows from financing activities	(80,634		)	(17,831		)	(168,486		)	167,009			(99,942		)
Effect of exchange rate changes on cash	—			(43		)	—			—			(43		)
Change in cash and cash equivalents	65,025			993			(7,058		)	—			58,960
Cash and cash equivalents at beginning of period	5,717			32,923			8,507			—			47,147
Cash and cash equivalents at end of period	$	70,742		$	33,916		$	1,449		$	—		$	106,107