FelCor LP's Consolidating Financial Information

6 Months Ended

Jun. 30, 2017

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 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, 2017

(in thousands)



	FelCor LP			Subsidiary Guarantors			Non-Guarantor Subsidiaries		Eliminations			Total Consolidated
Net investment in hotels	$	—		$	366,763		$	1,081,583	$	—		$	1,448,346
Equity investment in consolidated entities	1,129,658			—			—		(1,129,658		)	—
Investment in unconsolidated entities	2,252			4,209			1,196		—			7,657
Hotels held for sale	—			77,937			—		—			77,937
Cash and cash equivalents	14,681			41,341			2,113		—			58,135
Restricted cash	—			18,503			5,696		—			24,199
Accounts receivable, net	2,887			39,442			1,594		—			43,923
Deferred expenses, net	—			—			3,591		—			3,591
Other assets	6,591			9,920			3,729		—			20,240
Total assets	$	1,156,069		$	558,115		$	1,099,502	$	(1,129,658	)	$	1,684,028

Debt, net	$	986,573		$	—		$	408,991	$	(35,493	)	$	1,360,071
Distributions payable	14,765			—			122		—			14,887
Accrued expenses and other liabilities	33,249			92,683			9,860		—			135,792

Total liabilities	1,034,587			92,683			418,973		(35,493		)	1,510,750

Redeemable units, at redemption value	4,400			—			—		—			4,400

Preferred units	309,337			—			—		—			309,337
Common units	(192,255		)	466,348			627,817		(1,094,165		)	(192,255		)
Total FelCor LP partners’ capital	117,082			466,348			627,817		(1,094,165		)	117,082
Noncontrolling interests	—			(916		)	8,281		—			7,365
Preferred capital in consolidated joint venture	—			—			44,431		—			44,431
Total partners’ capital	117,082			465,432			680,529		(1,094,165		)	168,878
Total liabilities and partners’ capital	$	1,156,069		$	558,115		$	1,099,502	$	(1,129,658	)	$	1,684,028

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

FELCOR LODGING LIMITED PARTNERSHIP

CONDENSED 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

. 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, 2017

(in thousands)



	FelCor LP			Subsidiary Guarantors			Non-Guarantor Subsidiaries			Eliminations			Total Consolidated
Revenues:
Hotel operating revenue	$	—		$	219,116		$	—		$	—		$	219,116
Percentage lease revenue	—			—			46,486			(46,486		)	—
Other revenue	36			1,146			142			—			1,324
Total revenues	36			220,262			46,628			(46,486		)	220,440

Expenses:
Hotel operating expenses	—			135,657			—			—			135,657
Taxes, insurance and lease expense	66			55,630			6,244			(46,486		)	15,454
Corporate expenses	—			3,396			2,885			—			6,281
Depreciation and amortization	116			10,712			16,700			—			27,528
Impairment	—			10,271			—			—			10,271
Other expenses	5,844			1,412			75			—			7,331
Total operating expenses	6,026			217,078			25,904			(46,486		)	202,522
Operating income	(5,990		)	3,184			20,724			—			17,918
Interest expense, net	(14,405		)	23			(5,034		)	—			(19,416		)
Other gains, net	—			—			100			—			100
Loss before equity in income from unconsolidated entities	(20,395		)	3,207			15,790			—			(1,398		)
Equity in income from consolidated entities	18,056			—			—			(18,056		)	—
Equity in income from unconsolidated entities	575			84			(11		)	—			648
Loss from continuing operations before income tax	(1,764		)	3,291			15,779			(18,056		)	(750		)
Income tax	(30		)	(473		)	—			—			(503		)
Loss from continuing operations before loss on sale of hotels	(1,794		)	2,818			15,779			(18,056		)	(1,253		)
Loss on sale of hotels	—			(126		)	(81		)	—			(207		)
Net loss and comprehensive loss	(1,794		)	2,692			15,698			(18,056		)	(1,460		)
Loss attributable to noncontrolling interests	—			(6		)	39			—			33
Preferred distributions - consolidated joint venture	—			—			(367		)	—			(367		)
Net loss and comprehensive loss attributable to FelCor LP	(1,794		)	2,686			15,370			(18,056		)	(1,794		)
Preferred distributions	(6,279		)	—			—			—			(6,279		)
Net loss attributable to FelCor LP common unitholders	$	(8,073	)	$	2,686		$	15,370		$	(18,056	)	$	(8,073	)

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	(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

FELCOR LODGING LIMITED PARTNERSHIP

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE LOSS

For the Six Months Ended June 30, 2017

(in thousands)



	FelCor LP			Subsidiary Guarantors			Non-Guarantor Subsidiaries			Eliminations			Total Consolidated
Revenues:
Hotel operating revenue	$	—		$	406,812		$	—		$	—		$	406,812
Percentage lease revenue	—			—			84,530			(84,530		)	—
Other revenue	39			1,490			203			—			1,732
Total revenues	39			408,302			84,733			(84,530		)	408,544

Expenses:
Hotel operating expenses	—			264,495			—			—			264,495
Taxes, insurance and lease expense	106			101,582			12,198			(84,530		)	29,356
Corporate expenses	—			7,025			6,196			—			13,221
Depreciation and amortization	231			21,570			33,565			—			55,366
Impairment	—			35,109			—			—			35,109
Other expenses	6,317			2,152			122			—			8,591
Total operating expenses	6,654			431,933			52,081			(84,530		)	406,138
Operating income	(6,615		)	(23,631		)	32,652			—			2,406
Interest expense, net	(28,857		)	37			(9,882		)	—			(38,702		)
Other gains, net	—			—			100			—			100
Loss before equity in income from unconsolidated entities	(35,472		)	(23,594		)	22,870			—			(36,196		)
Equity in loss from consolidated entities	(3,379		)	—			—			3,379			—
Equity in income from unconsolidated entities	1,016			(475		)	(23		)	—			518
Loss from continuing operations before income tax	(37,835		)	(24,069		)	22,847			3,379			(35,678		)
Income tax	(56		)	(994		)	—			—			(1,050		)
Loss from continuing operations before loss on sale of hotels	(37,891		)	(25,063		)	22,847			3,379			(36,728		)
Loss on sale of hotels	—			(652		)	(221		)	—			(873		)
Net loss and comprehensive loss	(37,891		)	(25,715		)	22,626			3,379			(37,601		)
Loss attributable to noncontrolling interests	—			260			177			—			437
Preferred distributions - consolidated joint venture	—			—			(727		)	—			(727		)
Net loss and comprehensive loss attributable to FelCor LP	(37,891		)	(25,455		)	22,076			3,379			(37,891		)
Preferred distributions	(12,558		)	—			—			—			(12,558		)
Net loss attributable to FelCor LP common unitholders	$	(50,449	)	$	(25,455	)	$	22,076		$	3,379		$	(50,449	)

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 from continuing operations before loss on sale of hotels	8,702			11,364			27,808			(37,841		)	10,033
Loss on sale of hotels	(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 CASH FLOWS

For the Six Months Ended June 30, 2017

(in thousands)



	FelCor LP			Subsidiary Guarantors			Non-Guarantor Subsidiaries			Eliminations			Total Consolidated
Operating activities:
Cash flows from operating activities	$	(33,170	)	$	41,039		$	59,380		$	—		$	67,249
Investing activities:
Improvements and additions to hotels	5			(12,604		)	(29,322		)	—			(41,921		)
Net payments related to asset sales	(623		)	(524		)	(149		)	—			(1,296		)
Change in restricted cash - investing	—			(2,070		)	(2,639		)	—			(4,709		)
Distributions from unconsolidated entities	840			—			—			—			840
Intercompany financing	64,241			—			—			(64,241		)	—
Cash flows from investing activities	64,463			(15,198		)	(32,110		)	(64,241		)	(47,086		)
Financing activities:
Proceeds from borrowings	—			—			51,000			—			51,000
Repayment of borrowings	—			—			(30,419		)	—			(30,419		)
Contributions from noncontrolling interests	—			299			—			—			299
Distributions paid to preferred unitholders	(12,558		)	—			—			—			(12,558		)
Distributions paid to common unitholders	(16,631		)	—			—			—			(16,631		)
Net proceeds from issuance of preferred capital - consolidated joint venture	—			—			648			—			648
Intercompany financing	—			(13,940		)	(50,301		)	64,241			—
Other	(955		)	—			(729		)	—			(1,684		)
Cash flows from financing activities	(30,144		)	(13,641		)	(29,801		)	64,241			(9,345		)
Change in cash and cash equivalents	1,149			12,200			(2,531		)	—			10,818
Cash and cash equivalents at beginning of period	13,532			29,141			4,644			—			47,317
Cash and cash equivalents at end of period	$	14,681		$	41,341		$	2,113		$	—		$	58,135

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 payments related to 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 preferred unitholders	(12,558		)	—			—			—			(12,558		)
Distributions paid to common unitholders	(16,848		)	—			—			—			(16,848		)
Repurchase of common units	(27,427		)	—			—			—			(27,427		)
Distributions paid to noncontrolling interests	—			—			(1		)	—			(1		)
Contributions from noncontrolling interests	—			313			217			—			530
Net proceeds from issuance of preferred capital- consolidated joint venture	—			—			597			—			597
Intercompany financing	—			(17,208		)	(70,742		)	87,950			—
Other	(667		)	—			(729		)	—			(1,396		)
Cash flows from financing activities	(57,500		)	(16,895		)	(47,815		)	87,950			(34,260		)
Effect of exchange rate changes on cash	—			—			(9		)	—			(9		)
Change in cash and cash equivalents	(4,549		)	5,600			(2,649		)	—			(1,598		)
Cash and cash equivalents at beginning of period	21,219			33,873			4,694			—			59,786
Cash and cash equivalents at end of period	$	16,670		$	39,473		$	2,045		$	—		$	58,188