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 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 the “Subsidiary Guarantors”), together with Rangers, guaranty, fully and unconditionally, except where subject to customary release provisions as described below, and jointly and severally, our senior notes 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 the Operating Partnership, (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.

For the Predecessor period, FelCor TRS was a subsidiary guarantor in the condensed consolidating balance sheet, the condensed consolidating statements of operations and comprehensive income, and the condensed consolidating statements of cash flows. Pursuant to the terms of each of the indentures governing the Senior Notes, upon completion of the distribution of the equity interests in FelCor TRS, FelCor TRS' guarantee of the Senior Notes was automatically released and FelCor TRS Holdings, L.L.C. ceased being a subsidiary guarantor of the Senior Notes. Accordingly, FelCor TRS is not a subsidiary guarantor in the FelCor LP consolidating financial information for the Company.

The following tables present the consolidating financial information for the Subsidiary Guarantors:

FelCor Lodging Limited Partnership

Condensed Consolidating Balance Sheet

June 30, 2018 (Successor)

(in thousands)



	FelCor LP		Subsidiary Guarantors		Non-Guarantor Subsidiaries		Eliminations			Total Consolidated
Equity investment in consolidated entities	$	2,209,305	$	—	$	—	$	(2,209,305	)	$	—
Investment in hotel properties, net	—		725,334		1,548,664		—			2,273,998
Investment in unconsolidated joint ventures	16,825		—		—		—			16,825
Cash and cash equivalents	9,611		—		1,544		—			11,155
Restricted cash reserves	436		—		4,521		—			4,957
Related party rent receivable	—		18,559		32,749		—			51,308
Intangible assets, net	—		47,553		68,755		—			116,308
Prepaid expense and other assets	2,367		692		3,620		—			6,679
Assets of hotel properties held for sale, net	—		—		88,168		—			88,168
Total assets	$	2,238,544	$	792,138	$	1,748,021	$	(2,209,305	)	$	2,569,398

Debt, net	$	507,685	$	—	$	267,118	$	(32,709	)	$	742,094
Accounts payable and other liabilities	7,661		16,122		20,662		—			44,445
Related party lease termination fee payable	—		1,536		7,707		—			9,243
Accrued interest	2,463		—		—		—			2,463
Distributions payable	—		—		122		—			122
Total liabilities	517,809		17,658		295,609		(32,709		)	798,367

Partnership interests	1,720,735		774,480		1,402,116		(2,176,596		)	1,720,735
Total partners' capital, excluding noncontrolling interest	1,720,735		774,480		1,402,116		(2,176,596		)	1,720,735
Noncontrolling interest in consolidated joint ventures	—		—		5,866		—			5,866
Preferred capital in a consolidated joint venture	—		—		44,430		—			44,430
Total partners’ capital	1,720,735		774,480		1,452,412		(2,176,596		)	1,771,031
Total liabilities and partners’ capital	$	2,238,544	$	792,138	$	1,748,021	$	(2,209,305	)	$	2,569,398

FelCor Lodging Limited Partnership

Condensed Consolidating Balance Sheet

December 31, 2017 (Successor)

(in thousands)



	FelCor LP		Subsidiary Guarantors		Non-Guarantor Subsidiaries		Eliminations			Total Consolidated
Equity investment in consolidated entities	$	2,384,094	$	—	$	—	$	(2,384,094	)	$	—
Investment in hotel properties, net	—		856,541		1,641,339		—			2,497,880
Investment in unconsolidated joint ventures	16,912		—		—		—			16,912
Cash and cash equivalents	9,202		—		5,526		—			14,728
Restricted cash reserves	436		—		2,867		—			3,303
Related party rent receivable	—		32,200		47,890		—			80,090
Intangible assets, net	—		48,846		69,324		—			118,170
Prepaid expense and other assets	4,405		3,292		4,994		—			12,691
Total assets	$	2,415,049	$	940,879	$	1,771,940	$	(2,384,094	)	$	2,743,774

Debt, net	$	1,062,716	$	—	$	269,098	$	(32,709	)	$	1,299,105
Accounts payable and other liabilities	20,018		13,605		20,568		—			54,191
Related party lease termination fee payable	—		—		7,707		—			7,707
Accrued interest	12,286		—		—		—			12,286
Distributions payable	—		—		126		—			126
Total liabilities	1,095,020		13,605		297,499		(32,709		)	1,373,415

Partnership interests	1,320,029		927,274		1,424,111		(2,351,385		)	1,320,029
Total partners' capital, excluding noncontrolling interest	1,320,029		927,274		1,424,111		(2,351,385		)	1,320,029
Noncontrolling interest in consolidated joint ventures	—		—		5,900		—			5,900
Preferred capital in a consolidated joint venture	—		—		44,430		—			44,430
Total partners’ capital	1,320,029		927,274		1,474,441		(2,351,385		)	1,370,359
Total liabilities and partners’ capital	$	2,415,049	$	940,879	$	1,771,940	$	(2,384,094	)	$	2,743,774

FelCor Lodging Limited Partnership

Condensed Consolidating Statement of Operations and Comprehensive Income

For the Three Months Ended June 30, 2018 (Successor)

(in thousands)



	FelCor LP			Subsidiary Guarantors			Non-Guarantor Subsidiaries			Eliminations			Total Consolidated
Revenue
Related party lease revenue	$	—		$	23,833		$	36,817		$	—		$	60,650
Total revenue	—			23,833			36,817			—			60,650

Expense
Depreciation and amortization	114			8,361			12,017			—			20,492
Property tax, insurance and other	61			7,228			6,767			—			14,056
General and administrative	492			15			44			—			551
Transaction costs	474			92			81			—			647
Total operating expense	1,141			15,696			18,909			—			35,746
Operating income	(1,141		)	8,137			17,908			—			24,904
Other income	2			—			100			—			102
Interest income	131			—			—			(78		)	53
Interest expense	(5,944		)	—			(2,742		)	78			(8,608		)
Gain on extinguishment of indebtedness	7			—			—			—			7
Income before equity in income from unconsolidated joint ventures	(6,945		)	8,137			15,266			—			16,458
Equity in income from consolidated entities	23,034			—			—			(23,034		)	—
Equity in income from unconsolidated joint ventures	611			—			—			—			611
Income from operations	16,700			8,137			15,266			(23,034		)	17,069
Gain on sale of hotel properties	—			(17		)	59			—			42
Net income and comprehensive income	16,700			8,120			15,325			(23,034		)	17,111
Noncontrolling interest in consolidated joint ventures	—			—			(42		)	—			(42		)
Preferred distributions - consolidated joint venture	—			—			(369		)	—			(369		)
Net income and comprehensive income attributable to FelCor LP	$	16,700		$	8,120		$	14,914		$	(23,034	)	$	16,700

FelCor Lodging Limited Partnership

Condensed Consolidating Statement of Operations and Comprehensive Loss

For the Three Months Ended June 30, 2017 (Predecessor)

(in thousands)



	FelCor LP			Subsidiary Guarantors			Non-Guarantor Subsidiaries			Eliminations			Total Consolidated
Revenue
Room revenue	$	—		$	168,772		$	—		$	—		$	168,772
Food and beverage revenue	—			37,921			—			—			37,921
Related party lease revenue	—			—			46,486			(46,486		)	—
Other revenue	36			13,569			142			—			13,747
Total revenue	36			220,262			46,628			(46,486		)	220,440

Expense
Room expense	—			43,483			—			—			43,483
Food and beverage expense	—			28,281			—			—			28,281
Management and franchise fee expense	—			7,726			—			—			7,726
Other operating expense	—			56,167			—			—			56,167
Total property operating expense	—			135,657			—			—			135,657
Depreciation and amortization	116			10,712			16,700			—			27,528
Impairment loss	—			10,271			—			—			10,271
Property tax, insurance and other	67			57,042			6,319			(46,486		)	16,942
General and administrative	—			3,396			2,885			—			6,281
Transaction costs	5,843			—			—			—			5,843
Total operating expense	6,026			217,078			25,904			(46,486		)	202,522
Operating income	(5,990		)	3,184			20,724			—			17,918
Other income	—			—			100			—			100
Intercompany interest income (expense)	90			—			(90		)	—			—
Interest income	24			23			—			—			47
Interest expense	(14,519		)	—			(4,944		)	—			(19,463		)
Loss before equity in income from unconsolidated joint ventures	(20,395		)	3,207			15,790			—			(1,398		)
Equity in income from consolidated entities	18,056			—			—			(18,056		)	—
Equity in income from unconsolidated joint ventures	575			84			(11		)	—			648
Loss before income tax expense	(1,764		)	3,291			15,779			(18,056		)	(750		)
Income tax expense	(30		)	(473		)	—			—			(503		)
Loss from operations	(1,794		)	2,818			15,779			(18,056		)	(1,253		)
Loss on sale of hotel properties	—			(126		)	(81		)	—			(207		)
Net loss and comprehensive loss	(1,794		)	2,692			15,698			(18,056		)	(1,460		)
Noncontrolling interest in consolidated joint ventures	—			(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 and comprehensive 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 Six Months Ended June 30, 2018 (Successor)

(in thousands)



	FelCor LP			Subsidiary Guarantors			Non-Guarantor Subsidiaries			Eliminations			Total Consolidated
Revenue
Related party lease revenue	$	—		$	42,685		$	71,515		$	—		$	114,200
Total revenue	—			42,685			71,515			—			114,200

Expense
Depreciation and amortization	228			17,113			23,863			—			41,204
Property tax, insurance and other	103			14,713			14,071			—			28,887
General and administrative	973			55			131			—			1,159
Transaction costs	1,983			101			91			—			2,175
Total operating expense	3,287			31,982			38,156			—			73,425
Operating income	(3,287		)	10,703			33,359			—			40,775
Other income	10			—			100			—			110
Interest income	239			—			—			(156		)	83
Interest expense	(16,530		)	—			(5,381		)	156			(21,755		)
Gain on extinguishment of indebtedness	12,936			—			—			—			12,936
Income before equity in income from unconsolidated joint ventures	(6,632		)	10,703			28,078			—			32,149
Equity in income from consolidated entities	28,756			—			—			(28,756		)	—
Equity in income from unconsolidated joint ventures	727			—			—			—			727
Income from operations	22,851			10,703			28,078			(28,756		)	32,876
Loss on sale of hotel properties	—			(9,415		)	91			—			(9,324		)
Net income and comprehensive income	22,851			1,288			28,169			(28,756		)	23,552
Noncontrolling interest in consolidated joint ventures	—			—			34			—			34
Preferred distributions - consolidated joint venture	—			—			(735		)	—			(735		)
Net income and comprehensive income attributable to FelCor LP	$	22,851		$	1,288		$	27,468		$	(28,756	)	$	22,851

FelCor Lodging Limited Partnership

Condensed Consolidating Statement of Operations and Comprehensive Loss

For the Six Months Ended June 30, 2017 (Predecessor)

(in thousands)



	FelCor LP			Subsidiary Guarantors			Non-Guarantor Subsidiaries			Eliminations			Total Consolidated
Revenue
Room revenue	$	—		$	313,705		$	—		$	—		$	313,705
Food and beverage revenue	—			69,995			—			—			69,995
Related party lease revenue	—			—			84,530			(84,530		)	—
Other revenue	39			24,602			203			—			24,844
Total revenue	39			408,302			84,733			(84,530		)	408,544

Expense
Room expense	—			84,161			—			—			84,161
Food and beverage expense	—			54,503			—			—			54,503
Management and franchise fee expense	—			15,276			—			—			15,276
Other operating expense	—			110,555			—			—			110,555
Total property operating expense	—			264,495			—			—			264,495
Depreciation and amortization	231			21,570			33,565			—			55,366
Impairment loss	—			35,109			—			—			35,109
Property tax, insurance and other	107			103,734			12,320			(84,530		)	31,631
General and administrative	—			7,025			6,196			—			13,221
Transaction costs	6,316			—			—			—			6,316
Total operating expense	6,654			431,933			52,081			(84,530		)	406,138
Operating income	(6,615		)	(23,631		)	32,652			—			2,406
Other income	—			—			100			—			100
Intercompany interest income (expense)	184			—			(184		)	—			—
Interest income	43			37			—			—			80
Interest expense	(29,084		)	—			(9,698		)	—			(38,782		)
Loss before equity in income from unconsolidated joint ventures	(35,472		)	(23,594		)	22,870			—			(36,196		)
Equity in loss from consolidated entities	(3,379		)	—			—			3,379			—
Equity in income from unconsolidated joint ventures	1,016			(475		)	(23		)	—			518
Loss before income tax expense	(37,835		)	(24,069		)	22,847			3,379			(35,678		)
Income tax expense	(56		)	(994		)	—			—			(1,050		)
Loss from operations	(37,891		)	(25,063		)	22,847			3,379			(36,728		)
Loss on sale of hotel properties	—			(652		)	(221		)	—			(873		)
Net loss and comprehensive loss	(37,891		)	(25,715		)	22,626			3,379			(37,601		)
Noncontrolling interest in consolidated joint ventures	—			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 and comprehensive loss attributable to FelCor LP common unitholders	$	(50,449	)	$	(25,455	)	$	22,076		$	3,379		$	(50,449	)

FelCor Lodging Limited Partnership

Condensed Consolidating Statement of Cash Flows

For the Six Months Ended June 30, 2018 (Successor)

(in thousands)



	FelCor LP			Subsidiary Guarantors			Non-Guarantor Subsidiaries			Eliminations			Total Consolidated
Operating activities:
Cash flows from operating activities	$	(42,177	)	$	46,769		$	72,134		$	—		$	76,726
Investing activities:
Proceeds from the sale of hotel properties, net	—			116,458			92			—			116,550
Improvements and additions to hotel properties	—			(10,945		)	(22,848		)	—			(33,793		)
Additions to property and equipment	(4		)	—			—			—			(4		)
Intercompany financing	201,745			—			—			(201,745		)	—
Cash flows from investing activities	201,741			105,513			(22,756		)	(201,745		)	82,753
Financing activities:
Repayments of borrowings	(538,809		)	—			(1,495		)	—			(540,304		)
Contributions from partners	641,783			—			—			—			641,783
Distributions to partners	(262,128		)	—			—			—			(262,128		)
Payments of deferred financing costs	—			—			(10		)	—			(10		)
Preferred distributions - consolidated joint venture	—			—			(739		)	—			(739		)
Intercompany financing	—			(152,282		)	(49,463		)	201,745			—
Cash flows from financing activities	(159,154		)	(152,282		)	(51,707		)	201,745			(161,398		)
Net change in cash, cash equivalents, and restricted cash reserves	410			—			(2,329		)	—			(1,919		)
Cash, cash equivalents, and restricted cash reserves, beginning of year	9,637			—			8,394			—			18,031
Cash, cash equivalents, and restricted cash reserves, end of period	$	10,047		$	—		$	6,065		$	—		$	16,112

FelCor Lodging Limited Partnership

Condensed Consolidating Statement of Cash Flows

For the Six Months Ended June 30, 2017 (Predecessor)

(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:
Net payments related to asset sales	(623		)	(524		)	(149		)	—			(1,296		)
Improvements and additions to hotel properties	5			(12,604		)	(29,322		)	—			(41,921		)
Distributions from unconsolidated joint ventures in excess of earnings	840			—			—			—			840
Intercompany financing	64,241			—			—			(64,241		)	—
Cash flows from investing activities	64,463			(13,128		)	(29,471		)	(64,241		)	(42,377		)
Financing activities:
Proceeds from borrowings	—			—			51,000			—			51,000
Repayments of borrowings	—			—			(30,419		)	—			(30,419		)
Distributions to preferred unitholders	(12,558		)	—			—			—			(12,558		)
Distributions to common unitholders	(16,631		)	—			—			—			(16,631		)
Contributions from noncontrolling interests	—			299			—			—			299
Net proceeds from the issuance of preferred capital in a 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		)
Net change in cash, cash equivalents, and restricted cash reserves	1,149			14,270			108			—			15,527
Cash, cash equivalents, and restricted cash reserves, beginning of year	13,532			45,574			7,702			—			66,808
Cash, cash equivalents, and restricted cash reserves, end of period	$	14,681		$	59,844		$	7,810		$	—		$	82,335