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

September 30, 2018 (Successor)

(in thousands)



	FelCor LP		Subsidiary Guarantors		Non-Guarantor Subsidiaries		Eliminations			Total Consolidated
Equity investment in consolidated entities	$	1,941,135	$	—	$	—	$	(1,941,135	)	$	—
Investment in hotel properties, net	—		657,176		1,465,278		—			2,122,454
Investment in unconsolidated joint ventures	15,807		—		—		—			15,807
Cash and cash equivalents	10,346		—		5,389		—			15,735
Restricted cash reserves	439		—		4,786		—			5,225
Related party rent receivable	—		19,816		25,796		—			45,612
Intangible assets, net	—		46,907		—		—			46,907
Prepaid expense and other assets	2,004		657		2,440		—			5,101
Assets of hotel properties held for sale, net	—		25,177		—		—			25,177
Total assets	$	1,969,731	$	749,733	$	1,503,689	$	(1,941,135	)	$	2,282,018

Debt, net	$	506,503	$	—	$	239,838	$	(32,709	)	$	713,632
Accounts payable and other liabilities	9,902		16,091		21,049		—			47,042
Related party lease termination fee payable	—		1,985		15,563		—			17,548
Accrued interest	9,588		—		—		—			9,588
Distributions payable	—		—		122		—			122
Total liabilities	525,993		18,076		276,572		(32,709		)	787,932

Partnership interests	1,443,738		731,657		1,176,769		(1,908,426		)	1,443,738
Total partners' capital, excluding noncontrolling interest	1,443,738		731,657		1,176,769		(1,908,426		)	1,443,738
Noncontrolling interest in consolidated joint ventures	—		—		5,918		—			5,918
Preferred capital in a consolidated joint venture	—		—		44,430		—			44,430
Total partners’ capital	1,443,738		731,657		1,227,117		(1,908,426		)	1,494,086
Total liabilities and partners’ capital	$	1,969,731	$	749,733	$	1,503,689	$	(1,941,135	)	$	2,282,018

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 September 30, 2018 (Successor)

(in thousands)



	FelCor LP			Subsidiary Guarantors			Non-Guarantor Subsidiaries			Eliminations			Total Consolidated
Revenues
Related party lease revenue	$	—		$	27,360		$	30,451		$	—		$	57,811
Total revenues	—			27,360			30,451			—			57,811

Expenses
Depreciation and amortization	115			8,017			11,160			—			19,292
Property tax, insurance and other	(4		)	7,598			6,353			—			13,947
General and administrative	(491		)	29			(102		)	—			(564		)
Transaction costs	(4		)	261			(63		)	—			194
Total operating expenses	(384		)	15,905			17,348			—			32,869
Operating income	384			11,455			13,103			—			24,942
Other income	1			—			—			—			1
Interest income	285			—			15			(230		)	70
Interest expense	(5,955		)	—			(2,742		)	230			(8,467		)
Gain on sale of hotel properties, net	—			(9,971		)	34,225			—			24,254
Loss on extinguishment of indebtedness	(4		)	—			(1,652		)	—			(1,656		)
Income before equity in income from unconsolidated joint ventures	(5,289		)	1,484			42,949			—			39,144
Equity in income from consolidated entities	44,007			—			—			(44,007		)	—
Equity in income from unconsolidated joint ventures	218			—			—			—			218
Net income and comprehensive income	38,936			1,484			42,949			(44,007		)	39,362
Noncontrolling interest in consolidated joint ventures	—			—			(52		)	—			(52		)
Preferred distributions - consolidated joint venture	—			—			(374		)	—			(374		)
Net income and comprehensive income attributable to FelCor LP	$	38,936		$	1,484		$	42,523		$	(44,007	)	$	38,936

FelCor Lodging Limited Partnership

Condensed Consolidating Statement of Operations and Comprehensive Income

For the Period of September 1, 2017 through September 30, 2017 (Successor)

(in thousands)



	FelCor LP			Subsidiary Guarantors		Non-Guarantor Subsidiaries			Eliminations			Total Consolidated
Revenues
Related party lease revenue	$	—		$	9,511	$	11,343		$	—		$	20,854
Total revenues	—			9,511		11,343			—			20,854

Expenses
Depreciation and amortization	38			2,021		3,915			—			5,974
Property tax, insurance and other	8			2,821		1,620			—			4,449
General and administrative	191			—		1			—			192
Transaction costs	1,034			4		1			—			1,039
Total operating expenses	1,271			4,846		5,537			—			11,654
Operating income	(1,271		)	4,665		5,806			—			9,200
Interest income	27			—		—			(24		)	3
Interest expense	(3,980		)	—		(825		)	26			(4,779		)
Income before equity in income from unconsolidated joint ventures	(5,224		)	4,665		4,981			2			4,424
Equity in income from consolidated entities	9,641			—		—			(9,641		)	—
Equity in income from unconsolidated joint ventures	—			—		115			—			115
Net income and comprehensive income	4,417			4,665		5,096			(9,639		)	4,539
Noncontrolling interest in consolidated joint ventures	(51		)	—		—			—			(51		)
Preferred distributions - consolidated joint venture	—			—		(122		)	—			(122		)
Net income and comprehensive income attributable to FelCor LP	$	4,366		$	4,665	$	4,974		$	(9,639	)	$	4,366

FelCor Lodging Limited Partnership

Condensed Consolidating Statement of Operations and Comprehensive Loss

For the Period of July 1, 2017 through August 31, 2017 (Predecessor)

(in thousands



	FelCor LP			Subsidiary Guarantors			Non-Guarantor Subsidiaries			Eliminations			Total Consolidated
Revenues
Room revenue	$	—		$	111,977		$	—		$	—		$	111,977
Food and beverage revenue	—			20,577			—			—			20,577
Related party lease revenue	—			—			(20		)	20			—
Other revenue	2			10,281			134			—			10,417
Total revenues	2			142,835			114			20			142,971

Expenses
Room expense	—			28,652			—			—			28,652
Food and beverage expense	—			17,325			—			—			17,325
Management and franchise fee expense	—			4,625			—			—			4,625
Other operating expense	—			37,272			—			—			37,272
Total property operating expenses	—			87,874			—			—			87,874
Depreciation and amortization	78			6,494			11,127			—			17,699
Property tax, insurance and other	815			7,286			4,526			20			12,647
General and administrative	—			1,889			896			—			2,785
Transaction costs	61,932			—			—			—			61,932
Total operating expenses	62,825			103,543			16,549			20			182,937
Operating loss	(62,823		)	39,292			(16,435		)	—			(39,966		)
Intercompany interest income (expense)	56			—			(56		)	—			—
Interest income	23			23			—			—			46
Interest expense	(9,637		)	—			(3,271		)	—			(12,908		)
Loss on sale of hotel properties, net	2			(913		)	20			—			(891		)
Loss on extinguishment of indebtedness	—			—			(3,278		)	—			(3,278		)
Loss before equity in income from unconsolidated joint ventures	(72,379		)	38,402			(23,020		)	—			(56,997		)
Equity in income from consolidated entities	16,160			—			—			(16,160		)	—
Equity in income from unconsolidated joint ventures	165			399			(8		)	—			556
Loss before income tax benefit	(56,054		)	38,801			(23,028		)	(16,160		)	(56,441		)
Income tax benefit	20			531			—			—			551
Loss from continuing operations	(56,034		)	39,332			(23,028		)	(16,160		)	(55,890		)
Loss from discontinued operations	(3,415		)	—			—			—			(3,415		)
Net loss and comprehensive loss	(59,449		)	39,332			(23,028		)	(16,160		)	(59,305		)
Noncontrolling interest in consolidated joint ventures	—			76			32			—			108
Preferred distributions - consolidated joint venture	—			—			(252		)	—			(252		)
Net loss and comprehensive loss attributable to FelCor LP	(59,449		)	39,408			(23,248		)	(16,160		)	(59,449		)
Preferred distributions	(4,186		)	—			—			—			(4,186		)
Net loss and comprehensive loss attributable to FelCor LP common unitholders	$	(63,635	)	$	39,408		$	(23,248	)	$	(16,160	)	$	(63,635	)

FelCor Lodging Limited Partnership

Condensed Consolidating Statement of Operations and Comprehensive Income

For the Nine Months Ended September 30, 2018 (Successor)

(in thousands)



	FelCor LP			Subsidiary Guarantors			Non-Guarantor Subsidiaries			Eliminations			Total Consolidated
Revenues
Related party lease revenue	$	—		$	70,046		$	101,965		$	—		$	172,011
Total revenues	—			70,046			101,965			—			172,011

Expenses
Depreciation and amortization	343			25,129			35,024			—			60,496
Property tax, insurance and other	99			22,310			20,425			—			42,834
General and administrative	482			84			29			—			595
Transaction costs	1,979			361			29			—			2,369
Total operating expenses	2,903			47,884			55,507			—			106,294
Operating income	(2,903		)	22,162			46,458			—			65,717
Other income	10			—			101			—			111
Interest income	524			—			15			(386		)	153
Interest expense	(22,485		)	—			(8,122		)	386			(30,221		)
Gain on sale of hotel properties, net	—			(19,386		)	34,316			—			14,930
Gain on extinguishment of indebtedness, net	12,932			—			(1,652		)	—			11,280
Income before equity in income from unconsolidated joint ventures	(11,922		)	2,776			71,116			—			61,970
Equity in income from consolidated entities	72,765			—			—			(72,765		)	—
Equity in income from unconsolidated joint ventures	945			—			—			—			945
Net income and comprehensive income	61,788			2,776			71,116			(72,765		)	62,915
Noncontrolling interest in consolidated joint ventures	—			—			(18		)	—			(18		)
Preferred distributions - consolidated joint venture	—			—			(1,109		)	—			(1,109		)
Net income and comprehensive income attributable to FelCor LP	$	61,788		$	2,776		$	69,989		$	(72,765	)	$	61,788

FelCor Lodging Limited Partnership

Condensed Consolidating Statement of Operations and Comprehensive Loss

For the Period of January 1, 2017 through August 31, 2017 (Predecessor)

(in thousands)



	FelCor LP			Subsidiary Guarantors			Non-Guarantor Subsidiaries			Eliminations			Total Consolidated
Revenues
Room revenue	$	—		$	425,682		$	—		$	—		$	425,682
Food and beverage revenue	—			90,572			—			—			90,572
Related party lease revenue	—			—			84,509			(84,509		)	—
Other revenue	41			34,883			337			—			35,261
Total revenues	41			551,137			84,846			(84,509		)	551,515

Expenses
Room expense	—			112,813			—			—			112,813
Food and beverage expense	—			71,828			—			—			71,828
Management and franchise fee expense	—			19,901			—			—			19,901
Other operating expense	—			147,827			—			—			147,827
Total property operating expenses	—			352,369			—			—			352,369
Depreciation and amortization	309			28,064			44,692			—			73,065
Impairment loss	—			35,109			—			—			35,109
Property tax, insurance and other	921			111,020			16,846			(84,509		)	44,278
General and administrative	—			8,914			7,092			—			16,006
Transaction costs	68,248			—			—			—			68,248
Total operating expenses	69,478			535,476			68,630			(84,509		)	589,075
Operating loss	(69,437		)	15,661			16,216			—			(37,560		)
Other income	—			—			100			—			100
Intercompany interest income (expense)	241			—			(241		)	—			—
Interest income	66			59			1			—			126
Interest expense	(38,722		)	—			(12,968		)	—			(51,690		)
Loss on sale of hotel properties, net	2			(1,565		)	(201		)	—			(1,764		)
Loss on extinguishment of indebtedness	—			—			(3,278		)	—			(3,278		)
Loss before equity in income from unconsolidated joint ventures	(107,850		)	14,155			(371		)	—			(94,066		)
Equity in income from consolidated entities	12,779			—			—			(12,779		)	—
Equity in income from unconsolidated joint ventures	1,181			(77		)	(30		)	—			1,074
Loss before income tax expense	(93,890		)	14,078			(401		)	(12,779		)	(92,992		)
Income tax expense	(35		)	(464		)	—			—			(499		)
Loss from continuing operations	(93,925		)	13,614			(401		)	(12,779		)	(93,491		)
Loss from discontinued operations	(3,415		)	—			—			—			(3,415		)
Net loss and comprehensive loss	(97,340		)	13,614			(401		)	(12,779		)	(96,906		)
Noncontrolling interest in consolidated joint ventures	—			336			209			—			545
Preferred distributions - consolidated joint venture	—			—			(979		)	—			(979		)
Net loss and comprehensive loss attributable to FelCor LP	(97,340		)	13,950			(1,171		)	(12,779		)	(97,340		)
Preferred distributions	(16,744		)	—			—			—			(16,744		)
Net loss and comprehensive loss attributable to FelCor LP common unitholders	$	(114,084	)	$	13,950		$	(1,171	)	$	(12,779	)	$	(114,084	)

FelCor Lodging Limited Partnership

Condensed Consolidating Statement of Cash Flows

For the Nine Months Ended September 30, 2018 (Successor)

(in thousands)



	FelCor LP			Subsidiary Guarantors			Non-Guarantor Subsidiaries			Eliminations			Total Consolidated
Operating activities:
Cash flows from operating activities	$	(38,965	)	$	66,876		$	105,305		$	—		$	133,216
Investing activities:
Proceeds from the sale of hotel properties, net	—			151,466			282,895			—			434,361
Improvements and additions to hotel properties	—			(21,751		)	(36,458		)	—			(58,209		)
Additions to property and equipment	(4		)	—			—			—			(4		)
Intercompany financing	515,209			—			—			(515,209		)	—
Cash flows from investing activities	515,205			129,715			246,437			(515,209		)	376,148
Financing activities:
Repayments of borrowings	(538,813		)	—			(30,220		)	—			(569,033		)
Contributions from partners	673,853			—			—			—			673,853
Distributions to partners	(610,132		)	—			—			—			(610,132		)
Payments of deferred financing costs	—			—			(10		)	—			(10		)
Preferred distributions - consolidated joint venture	—			—			(1,113		)	—			(1,113		)
Intercompany financing	—			(196,591		)	(318,618		)	515,209			—
Cash flows from financing activities	(475,092		)	(196,591		)	(349,961		)	515,209			(506,435		)
Net change in cash, cash equivalents, and restricted cash reserves	1,148			—			1,781			—			2,929
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	$	10,785		$	—		$	10,175		$	—		$	20,960

FelCor Lodging Limited Partnership

Condensed Consolidating Statement of Cash Flows

For the Period of September 1, 2017 through September 30, 2017 (Successor)

(in thousands)



	FelCor LP			Subsidiary Guarantors			Non-Guarantor Subsidiaries			Eliminations			Total Consolidated
Operating activities:
Cash flows from operating activities	$	(8,078	)	$	(1,666	)	$	(1,418	)	$	—		$	(11,162	)
Investing activities:
Improvements and additions to hotel properties	—			(16		)	(39		)	—			(55		)
Intercompany financing	(6,879		)	—			—			6,879			—
Cash flows from investing activities	(6,879		)	(16		)	(39		)	6,879			(55		)
Financing activities:
Repayment of borrowings	—			—			(471		)	—			(471		)
Contributions from partners	35,545			—			—			—			35,545
Distributions to partners	(19,123		)	—			—			—			(19,123		)
Distribution of FelCor TRS	—			(51,867		)	—			—			(51,867		)
Preferred distributions - consolidated joint venture	—			—			(126		)	—			(126		)
Intercompany financing	—			5,056			1,823			(6,879		)	—
Cash flows from financing activities	16,422			(46,811		)	1,226			(6,879		)	(36,042		)
Net change in cash, cash equivalents, and restricted cash reserves	1,465			(48,493		)	(231		)	—			(47,259		)
Cash, cash equivalents, and restricted cash reserves, beginning of period	7,965			48,507			7,962			—			64,434
Cash, cash equivalents, and restricted cash reserves, end of period	$	9,430		$	14		$	7,731		$	—		$	17,175

FelCor Lodging Limited Partnership

Condensed Consolidating Statement of Cash Flows

For the Period of January 1, 2017 through August 31, 2017 (Predecessor)

(in thousands)



	FelCor LP			Subsidiary Guarantors			Non-Guarantor Subsidiaries			Eliminations			Total Consolidated
Operating activities:
Cash flows from operating activities	$	(40,773	)	$	85,899		$	54,214		$	—		$	99,340
Investing activities:
Proceeds from the sale of hotel properties, net	(696		)	74,281			(169		)	—			73,416
Improvements and additions to hotel properties	1			(16,727		)	(47,076		)	—			(63,802		)
Distributions from unconsolidated joint ventures in excess of earnings	840			—			—			—			840
Intercompany financing	91,391			—			—			(91,391		)	—
Cash flows from investing activities	91,536			57,554			(47,245		)	(91,391		)	10,454
Financing activities:
Proceeds from borrowings	—			—			66,000			—			66,000
Repayments of borrowings	—			—			(121,691		)	—			(121,691		)
Distributions to preferred unitholders	(18,836		)	—			—			—			(18,836		)
Distributions to common unitholders	(30,926		)	—			—			—			(30,926		)
Distributions to noncontrolling interests	—			—			(150		)	—			(150		)
Contributions from noncontrolling interests	—			333			—			—			333
Net proceeds from the issuance of preferred capital in a consolidated joint venture	—			—			647			—			647
Intercompany financing	—			(140,853		)	49,462			91,391			—
Other	(6,568		)	—			(977		)	—			(7,545		)
Cash flows from financing activities	(56,330		)	(140,520		)	(6,709		)	91,391			(112,168		)
Net change in cash, cash equivalents, and restricted cash reserves	(5,567		)	2,933			260			—			(2,374		)
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	$	7,965		$	48,507		$	7,962		$	—		$	64,434