Organization

FelCor Lodging Trust Incorporated (NYSE:FCH), or FelCor, is a Maryland corporation, operating as a real estate investment trust, or REIT. FelCor is the sole general partner of, and the owner of a greater than 99.5% partnership interest in, FelCor Lodging Limited Partnership, or FelCor LP, through which we held ownership interests in 61 hotels in continuing operations with 17,815 rooms at September 30, 2013. At September 30, 2013, we had an aggregate of 124,743,167 shares and units outstanding, consisting of 124,125,625 shares of FelCor common stock and 617,542 FelCor LP units not owned by FelCor.

Of the 61 hotels included in continuing operations, we owned a 100% interest in 44 hotels, a 90% interest in entities owning two hotels, an 82% interest in an entity owning one hotel, a 60% interest in an entity owning one hotel and a 50% interest in entities owning 13 hotels. We consolidate our real estate interests in the 48 hotels in which we held majority interests, and we record the real estate interests of the 13 hotels in which we held 50% interests using the equity method. We leased 60 of the 61 hotels in continuing operations to our taxable REIT subsidiaries, of which we own a controlling interest. One 50% owned hotel was operated without a lease. Because we owned controlling interests in these lessees, we consolidated our interests in these 60 hotels (which we refer to as our Consolidated Hotels) and reflect those hotels’ operating revenues and expenses in our statements of operations. Of our Consolidated Hotels, we owned 50% of the real estate interests in each of 12 hotels (we accounted for the ownership in our real estate interests of these hotels by the equity method) and majority real estate interests in each of the remaining 48 hotels (we consolidate our real estate interest in these hotels).

The following table illustrates the distribution of our 60 Consolidated Hotels at September 30, 2013:



Brand	Hotels	Rooms
Embassy Suites Hotels^®	33	8,617
Wyndham^®and Wyndham Grand^®	8	2,526
Holiday Inn^®	4	1,702
Sheraton^®and Westin^®	4	1,604
DoubleTreeby Hilton^® and Hilton^®	5	1,206
Marriott^®and Renaissance^®	3	1,321
Fairmont^®	1	383
Morgans and Royalton	2	285
Total	60	17,644

At September 30, 2013, our Consolidated Hotels were located in the United States (59 hotels in 21 states) and Canada (one hotel in Ontario), with concentrations in California (13 hotels), Florida (7 hotels) and Texas (7 hotels). Approximately 51% of our revenue was generated from hotels in these three states during the first nine months of 2013.

At September 30, 2013, of our 60 Consolidated Hotels: (i) subsidiaries of Hilton Hotels Corporation, or Hilton, managed 37 hotels, (ii) subsidiaries of Wyndham Worldwide Corporation, or Wyndham, managed eight hotels, (iii) subsidiaries of InterContinental Hotels Group, or IHG, managed four hotels, (iv) subsidiaries of Starwood Hotels & Resorts Worldwide Inc., or Starwood, managed four hotels, (v) subsidiaries of Marriott International Inc., or Marriott, managed three hotels, (vi) a subsidiary of Fairmont Hotels and Resorts, or Fairmont, managed one hotel, (vii) a subsidiary of Morgans Hotel Group Corporation managed two hotels, and (viii) an independent management company managed one hotel.

1. Organization — (continued)

In addition to the above hotels, we own a 95% interest in a consolidated joint venture that owns the Knickerbocker Hotel, a former hotel and office building that is being redeveloped as a 4+ star hotel in midtown Manhattan and is expected to open in Summer 2014.

Effective January 1, 2013, our hotels managed by Marriott are accounted for on a 12-month calendar year basis as compared to a fiscal year comprised of 52 or 53 weeks ending on the Friday closest to December 31, as reported in 2012 and prior years. Our three and nine month periods ending September 30, 2013 are reported on a calendar basis for our Marriott-managed hotels, which is consistent with the reporting periods for our other managed hotels. However, our three and nine month periods ending September 30, 2012 include the results of operations for the Marriott-managed hotels for the 12 and 36 week periods, respectively, ending September 7, 2012. Prior year results have not been restated to reflect the reporting period transition as we do not believe the change in periods would result in a material difference for comparison of results year over year.

The information in our consolidated financial statements for the three and nine months ended September 30, 2013 and 2012 is unaudited. Preparing financial statements in conformity with accounting principles generally accepted in the United States of America, or GAAP, requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. The accompanying financial statements for the three and nine months ended September 30, 2013 and 2012, include adjustments based on management’s estimates (consisting of normal and recurring accruals), which we consider necessary for a fair presentation of the results for the periods. The financial information should be read in conjunction with the consolidated financial statements for the year ended December 31, 2012, included in our Annual Report on Form 10-K. Operating results for the three and nine months ended September 30, 2013 are not necessarily indicative of actual operating results for the entire year.