FelCor LP's Consolidating Financial Information

12 Months Ended

Dec. 31, 2016

Dec. 31, 2015

FelCor Lodging LP [Member]

Condensed Financial Statements, Captions [Line Items]

FelCor LP's Consolidating Financial Information

FELCOR LODGING LIMITED PARTNERSHIP

CONSOLIDATING BALANCE SHEET

December 31, 2016

(in thousands)

	FelCor LP			Subsidiary Guarantors			Non-Guarantor Subsidiaries		Eliminations			Total Consolidated
Net investment in hotels	$	—		$	488,528		$	1,078,295	$	—		$	1,566,823
Equity investment in consolidated entities	1,190,737			—			—		(1,190,737		)	—
Investment in unconsolidated entities	2,410			4,800			1,102		—			8,312
Cash and cash equivalents	13,532			29,141			4,644		—			47,317
Restricted cash	—			16,433			3,058		—			19,491
Accounts receivable, net	2,804			33,338			5,938		—			42,080
Deferred expenses, net	—			—			4,527		—			4,527
Other assets	5,634			10,009			2,899		—			18,542
Total assets	$	1,215,117		$	582,249		$	1,100,463	$	(1,190,737	)	$	1,707,092
Debt, net	$	985,767		$	—		$	391,995	$	(39,436	)	$	1,338,326
Distributions payable	14,734			—			124		—			14,858
Accrued expenses and other liabilities	28,431			79,439			8,567		—			116,437
Total liabilities	1,028,932			79,439			400,686		(39,436		)	1,469,621
Redeemable units, at redemption value	4,888			—			—		—			4,888
Preferred units	309,337			—			—		—			309,337
Common units	(128,040		)	503,765			647,536		(1,151,301		)	(128,040		)
Total FelCor LP partners’ capital	181,297			503,765			647,536		(1,151,301		)	181,297
Noncontrolling interests	—			(955		)	8,458		—			7,503
Preferred capital in consolidated joint venture	—			—			43,783		—			43,783
Total partners’ capital	181,297			502,810			699,777		(1,151,301		)	232,583
Total liabilities and partners’ capital	$	1,215,117		$	582,249		$	1,100,463	$	(1,190,737	)	$	1,707,092

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

FELCOR LODGING LIMITED PARTNERSHIP

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			33,873			4,694		—			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		$	713,382		$	1,122,640	$	(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		)	630,412			590,931		(1,221,343		)	(49,184		)
Total FelCor LP partners’ capital	260,153			630,412			590,931		(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			629,595			642,740		(1,221,343		)	311,145
Total liabilities and partners’ capital	$	1,290,669		$	713,382		$	1,122,640	$	(1,260,779	)	$	1,865,912

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

FELCOR LODGING LIMITED PARTNERSHIP

CONDENSEDCONSOLIDATING STATEMENT OF OPERATIONS

For the Year Ended December 31, 2016

(in thousands)

	FelCor LP			Subsidiary Guarantors			Non-Guarantor Subsidiaries			Eliminations			Total Consolidated
Revenues:
Hotel operating revenue	$	—		$	862,818		$	—		$	—		$	862,818
Percentage lease revenue	—			—			134,462			(134,462		)	—
Other revenue	210			3,498			428			—			4,136
Total revenue	210			866,316			134,890			(134,462		)	866,954
Expenses:
Hotel operating expenses	—			551,165			—			—			551,165
Taxes, insurance and lease expense	149			168,757			22,873			(134,462		)	57,317
Corporate expenses	—			14,848			12,189			—			27,037
Depreciation and amortization	261			45,764			68,029			—			114,054
Impairment	—			26,459			—			—			26,459
Other expenses	7,266			4,830			644			—			12,740
Total operating expenses	7,676			811,823			103,735			(134,462		)	788,772
Operating income	(7,466		)	54,493			31,155			—			78,182
Interest expense, net	(58,265		)	30			(19,947		)	—			(78,182		)
Other gains, net	—			—			342			—			342
Income before equity in income from unconsolidated entities	(65,731		)	54,523			11,550			—			342
Equity in income from consolidated entities	69,540			—			—			(69,540		)	—
Equity in income from unconsolidated entities	1,781			(202		)	(46		)	—			1,533
Income from continuing operations before income tax expense	5,590			54,321			11,504			(69,540		)	1,875
Income tax expense	559			(1,586		)	154			—			(873		)
Income from continuing operations	6,149			52,735			11,658			(69,540		)	1,002
Loss from discontinued operations	(3,131		)	—			—			—			(3,131		)
Loss before gain on sale of hotels	3,018			52,735			11,658			(69,540		)	(2,129		)
Gain on sale of hotels, net	387			6,450			(515		)	—			6,322
Net income	3,405			59,185			11,143			(69,540		)	4,193
Loss attributable to noncontrolling interests	—			520			153			—			673
Preferred distributions - consolidated joint venture	—			—			(1,461		)	—			(1,461		)
Net income attributable to FelCor LP	3,405			59,705			9,835			(69,540		)	3,405
Preferred distributions	(25,115		)	—			—			—			(25,115		)
Net loss attributable to FelCor LP common unitholders	$	(21,710	)	$	59,705		$	9,835		$	(69,540	)	$	(21,710	)

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

FELCOR LODGING LIMITED PARTNERSHIP

CONDENSEDCONSOLIDATING STATEMENT OF OPERATIONS

For the Year Ended December 31, 2015

(in thousands)

	FelCor LP			Subsidiary Guarantors			Non-Guarantor Subsidiaries			Eliminations			Total Consolidated
Revenues:
Hotel operating revenue	$	—		$	878,371		$	—		$	—		$	878,371
Percentage lease revenue	—			—			126,867			(126,867		)	—
Other revenue	143			7,288			452			—			7,883
Total revenue	143			885,659			127,319			(126,867		)	886,254
Expenses:
Hotel operating expenses	—			572,259			—			—			572,259
Taxes, insurance and lease expense	490			163,727			21,857			(126,867		)	59,207
Corporate expenses	—			15,022			12,261			—			27,283
Depreciation and amortization	188			49,589			64,675			—			114,452
Impairment	—			20,861			—			—			20,861
Other expenses	3,995			7,451			1,033			—			12,479
Total operating expenses	4,673			828,909			99,826			(126,867		)	806,541
Operating income	(4,530		)	56,750			27,493			—			79,713
Interest expense, net	(57,062		)	11			(22,067		)	—			(79,118		)
Debt extinguishment	(28,459		)	—			(2,450		)	—			(30,909		)
Other gains, net	—			—			166			—			166
Loss before equity in income from unconsolidated entities	(90,051		)	56,761			3,142			—			(30,148		)
Equity in income from consolidated entities	73,274			—			—			(73,274		)	—
Equity in income from unconsolidated entities	8,368			(489		)	(46		)	—			7,833
Loss from continuing operations before income tax expense	(8,409		)	56,272			3,096			(73,274		)	(22,315		)
Income tax expense	(252		)	(993		)	—			—			(1,245		)
Loss from continuing operations	(8,661		)	55,279			3,096			(73,274		)	(23,560		)
Income from discontinued operations	—			11			658			—			669
Loss before gain on sale of hotels	(8,661		)	55,290			3,754			(73,274		)	(22,891		)
Gain on sale of hotels, net	(398		)	(17		)	19,841			—			19,426
Net loss	(9,059		)	55,273			23,595			(73,274		)	(3,465		)
Income attributable to noncontrolling interests	—			769			(4,926		)	—			(4,157		)
Preferred distributions - consolidated joint venture	—			—			(1,437		)	—			(1,437		)
Net loss attributable to FelCor LP	(9,059		)	56,042			17,232			(73,274		)	(9,059		)
Preferred distributions	(30,138		)	—			—			—			(30,138		)
Redemption of preferred units	(6,096		)	—			—			—			(6,096		)
Net loss attributable to FelCor LP common unitholders	$	(45,293	)	$	56,042		$	17,232		$	(73,274	)	$	(45,293	)

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

FELCOR LODGING LIMITED PARTNERSHIP

CONDENSEDCONSOLIDATING STATEMENT OF OPERATIONS

For the Year Ended December 31, 2014

(in thousands)

	FelCor LP			Subsidiary Guarantors			Non-Guarantor Subsidiaries			Eliminations			Total Consolidated
Revenues:
Hotel operating revenue	$	—		$	917,981		$	—		$	—		$	917,981
Percentage lease revenue	4,181			—			92,936			(97,117		)	—
Other revenue	6			3,143			457			—			3,606
Total revenue	4,187			921,124			93,393			(97,117		)	921,587
Expenses:
Hotel operating expenses	—			606,113			—			—			606,113
Taxes, insurance and lease expense	1,267			159,600			20,516			(97,117		)	84,266
Corporate expenses	427			16,743			12,415			—			29,585
Depreciation and amortization	2,717			55,832			57,270			—			115,819
Other expenses	178			12,330			5,444			—			17,952
Total operating expenses	4,589			850,618			95,645			(97,117		)	853,735
Operating income	(402		)	70,506			(2,252		)	—			67,852
Interest expense, net	(71,024		)	6			(19,677		)	—			(90,695		)
Debt extinguishment	(3,823		)	—			(947		)	—			(4,770		)
Gain on sale of investment in unconsolidated entities, net	30,176			—			—			—			30,176
Gain from remeasurement of unconsolidated entities, net	20,737			—			—			—			20,737
Other gains, net	—			100			—			—			100
Income before equity in income from unconsolidated entities	(24,336		)	70,612			(22,876		)	—			23,400
Equity in income from consolidated entities	113,267			—			—			(113,267		)	—
Equity in income from unconsolidated entities	4,682			374			(46		)	—			5,010
Income from continuing operations before income tax expense	93,613			70,986			(22,922		)	(113,267		)	28,410
Income tax expense	(134		)	(526		)	—			—			(660		)
Income from continuing operations	93,479			70,460			(22,922		)	(113,267		)	27,750
Loss from discontinued operations	—			(146		)	(214		)	—			(360		)
Income before gain on sale of hotels	93,479			70,314			(23,136		)	(113,267		)	27,390
Gain on sale of hotels, net	(1,243		)	(244		)	68,249			—			66,762
Net income	92,236			70,070			45,113			(113,267		)	94,152
Income attributable to noncontrolling interests	—			339			(1,036		)	—			(697		)
Preferred distributions - consolidated joint venture	—			—			(1,219		)	—			(1,219		)
Net income attributable to FelCor LP	92,236			70,409			42,858			(113,267		)	92,236
Preferred distributions	(38,712		)	—			—			—			(38,712		)
Net income attributable to FelCor LP common unitholders	$	53,524		$	70,409		$	42,858		$	(113,267	)	$	53,524

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

FELCOR LODGING LIMITED PARTNERSHIP

CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME

For the Year Ended December 31, 2016

(in thousands)

	FelCor LP		Subsidiary Guarantors		Non-Guarantor Subsidiaries			Eliminations			Total Consolidated
Net income and comprehensive income	$	3,405	$	59,185	$	11,143		$	(69,540	)	$	4,193
Comprehensive loss attributable to noncontrolling interests	—		520		153			—			673
Preferred distributions - consolidated joint venture	—		—		(1,461		)	—			(1,461		)
Comprehensive income attributable to FelCor LP	$	3,405	$	59,705	$	9,835		$	(69,540	)	$	3,405

FELCOR LODGING LIMITED PARTNERSHIP

CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE LOSS

For the Year Ended December 31, 2015

(in thousands)

	FelCor LP			Subsidiary Guarantors		Non-Guarantor Subsidiaries			Eliminations			Total Consolidated
Net loss and comprehensive loss	$	(9,059	)	$	55,273	$	23,595		$	(73,274	)	$	(3,465	)
Comprehensive income attributable to noncontrolling interests	—			769		(4,926		)	—			(4,157		)
Preferred distributions - consolidated joint venture	—			—		(1,437		)	—			(1,437		)
Comprehensive loss attributable to FelCor LP	$	(9,059	)	$	56,042	$	17,232		$	(73,274	)	$	(9,059	)

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

FELCOR LODGING LIMITED PARTNERSHIP

CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME

For the Year Ended December 31, 2014

(in thousands)

	FelCor LP			Subsidiary Guarantors		Non-Guarantor Subsidiaries			Eliminations			Total Consolidated
Net income	$	92,236		$	70,070	$	45,113		$	(113,267	)	$	94,152
Foreign currency translation adjustment	(490		)	—		(490		)	490			(490		)
Reclassification of foreign currency translation to gain	(24,553		)	—		(24,553		)	24,553			(24,553		)
Comprehensive income	67,193			70,070		20,070			(88,224		)	69,109
Comprehensive income attributable to noncontrolling interests	—			339		(1,036		)	—			(697		)
Preferred distributions - consolidated joint venture	—			—		(1,219		)	—			(1,219		)
Comprehensive income attributable to FelCor LP	$	67,193		$	70,409	$	17,815		$	(88,224	)	$	67,193

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

FELCOR LODGING LIMITED PARTNERSHIP

CONDENSEDCONSOLIDATING STATEMENT OF CASH FLOWS

For the Year Ended December 31, 2016

(in thousands)

	FelCor LP			Subsidiary Guarantors			Non-Guarantor Subsidiaries			Eliminations			Total Consolidated
Operating activities:
Cash flows from operating activities	$	(65,416	)	$	115,577		$	84,759		$	—		$	134,920
Investing activities:
Acquisition of land	—			—			(8,226		)	—			(8,226		)
Improvements and additions to hotels	(11		)	(31,309		)	(42,944		)	—			(74,264		)
Net proceeds from asset dispositions	(1,433		)	102,726			(323		)	—			100,970
Insurance proceeds	—			—			341			—			341
Change in restricted cash	—			(992		)	(797		)	—			(1,789		)
Distributions from unconsolidated entities	1,586			—			—			—			1,586
Intercompany financing	149,667			—			—			(149,667		)	—
Cash flows from investing activities	149,809			70,425			(51,949		)	(149,667		)	18,618
Financing activities:
Proceeds from borrowings	—			—			85,000			—			85,000
Repayment of borrowings	—			—			(158,662		)	—			(158,662		)
Payment of deferred financing costs	—			—			(12		)	—			(12		)
Distributions paid to noncontrolling interests	—			(14		)	(2		)	—			(16		)
Contributions from noncontrolling interests	—			397			239			—			636
Net proceeds from issuance of preferred equity-consolidated joint venture	—			—			597			—			597
Repurchase of common stock	(30,462		)	—			—			—			(30,462		)
Distributions paid to preferred unitholders	(25,115		)	—			—			—			(25,115		)
Distributions paid to common unitholders	(33,606		)	—			—			—			(33,606		)
Intercompany financing	—			(191,117		)	41,450			149,667			—
Other	(2,897		)	—			(1,461		)	—			(4,358		)
Cash flows used in financing activities	(92,080		)	(190,734		)	(32,851		)	149,667			(165,998		)
Effect of exchange rate changes on cash	—			—			(9		)	—			(9		)
Change in cash and cash equivalents	(7,687		)	(4,732		)	(50		)	—			(12,469		)
Cash and cash equivalents at beginning of period	21,219			33,873			4,694			—			59,786
Cash and cash equivalents at end of period	$	13,532		$	29,141		$	4,644		$	—		$	47,317

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

FELCOR LODGING LIMITED PARTNERSHIP

CONDENSEDCONSOLIDATING STATEMENT OF CASH FLOWS

For the Year Ended December 31, 2015

(in thousands)

	FelCor LP			Subsidiary Guarantors			Non-Guarantor Subsidiaries			Eliminations			Total Consolidated
Operating activities:
Cash flows from operating activities	$	(54,129	)	$	123,302		$	77,490		$	—		$	146,663
Investing activities:
Improvements and additions to hotels	242			(42,039		)	(6,639		)	—			(48,436		)
Hotel development	—			—			(33,525		)	—			(33,525		)
Net proceeds from asset dispositions	(569		)	(669		)	189,187			—			187,949
Insurance proceeds	274			—			203			—			477
Distributions from unconsolidated entities	6,517			800			—			—			7,317
Contributions to unconsolidated entities	(15		)	—			—			—			(15		)
Change in restricted cash - investing	—			(3,243		)	6,037			—			2,794
Intercompany financing	184,776			—			—			(184,776		)	—
Cash flows from investing activities	191,225			(45,151		)	155,263			(184,776		)	116,561
Financing activities:
Proceeds from borrowings	475,000			—			550,438			—			1,025,438
Repayment of borrowings	(545,453		)	—			(658,356		)	—			(1,203,809		)
Payment of deferred financing costs	(8,505		)	—			(6,447		)	—			(14,952		)
Distributions paid to noncontrolling interests	—			(444		)	(17,151		)	—			(17,595		)
Contributions from noncontrolling interests	—			548			2,261			—			2,809
Redemption of preferred units	(169,986		)	—			—			—			(169,986		)
Repurchase of common stock	(14,362		)	—			—			—			(14,362		)
Net proceeds from issuance of preferred equity-consolidated joint venture	—			—			1,744			—			1,744
Distributions paid to preferred unitholders	(32,404		)	—			—			—			(32,404		)
Distributions paid to common unitholders	(22,385		)	—			—			—			(22,385		)
Net proceeds from common unit issuance	198,648			—			—			—			198,648
Intercompany financing	—			(76,697		)	(108,079		)	184,776			—
Other	(2,147		)	—			(1,431		)	—			(3,578		)
Cash flows used in financing activities	(121,594		)	(76,593		)	(237,021		)	184,776			(250,432		)
Effect of exchange rate changes on cash	—			—			(153		)	—			(153		)
Change in cash and cash equivalents	15,502			1,558			(4,421		)	—			12,639
Cash and cash equivalents at beginning of period	5,717			32,315			9,115			—			47,147
Cash and cash equivalents at end of period	$	21,219		$	33,873		$	4,694		$	—		$	59,786

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

FELCOR LODGING LIMITED PARTNERSHIP

CONDENSEDCONSOLIDATING STATEMENT OF CASH FLOWS

For the Year Ended December 31, 2014

(in thousands)

	FelCor LP			Subsidiary Guarantors			Non-Guarantor Subsidiaries			Eliminations			Total Consolidated
Operating activities:
Cash flows from operating activities	$	(62,837	)	$	130,359		$	40,362		$	—		$	107,884
Investing activities:
Improvements and additions to hotels	(135		)	(46,765		)	(36,764		)	—			(83,664		)
Hotel development	—			—			(86,565		)	—			(86,565		)
Net proceeds from asset dispositions	6,488			(55		)	157,185			—			163,618
Proceeds from unconsolidated joint venture transaction	3,154			—			878			—			4,032
Change in restricted cash - investing	—			(3,571		)	60,302			—			56,731
Insurance proceeds	—			—			521			—			521
Distributions from unconsolidated entities	7,472			5,356			—			—			12,828
Contributions to unconsolidated entities	(7		)	—			—			—			(7		)
Intercompany financing	334,905			—			—			(334,905		)	—
Cash flows from investing activities	351,877			(45,035		)	95,557			(334,905		)	67,494
Financing activities:
Proceeds from borrowings	—			—			473,062			—			473,062
Repayment of borrowings	(236,745		)	—			(386,361		)	—			(623,106		)
Payment of deferred financing costs	(4		)	—			(3,211		)	—			(3,215		)
Acquisition of noncontrolling interests	—			—			(5,850		)	—			(5,850		)
Net proceeds from issuance of preferred equity-consolidated joint venture	—			—			41,442			—			41,442
Distributions paid to preferred unitholders	(38,712		)	—			—			—			(38,712		)
Distributions paid to common unitholders	(9,981		)	—			—			—			(9,981		)
Distributions paid to noncontrolling interests	—			(850		)	(8,746		)	—			(9,596		)
Contributions from noncontrolling interests	—			1,265			5,110			—			6,375
Intercompany financing	—			(86,470		)	(248,435		)	334,905			—
Other	(3,108		)	—			(1,102		)	—			(4,210		)
Cash flows used in financing activities	(288,550		)	(86,055		)	(134,091		)	334,905			(173,791		)
Effect of exchange rate changes on cash	—			(71		)	(14		)	—			(85		)
Change in cash and cash equivalents	490			(802		)	1,814			—			1,502
Cash and cash equivalents at beginning of period	5,227			33,117			7,301			—			45,645
Cash and cash equivalents at end of period	$	5,717		$	32,315		$	9,115		$	—		$	47,147

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 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.

25. FelCor LP’s Consolidating Financial Information - (continued)

The following tables present consolidating information for the Subsidiary Guarantors.