Redeemable Noncontrolling Interests in FelCor LP/Redeemable Units

12 Months Ended

Dec. 31, 2013

Redeemable Noncontrolling Interests in FelCor LP / Redeemable Units

FelCor LP may issue limited partnership units to third parties in exchange for cash or property. We record these redeemable noncontrolling interests in FelCor LP, in the case of FelCor, and redeemable units, in the case of FelCor LP, in the mezzanine section (between liabilities and equity or partners’ capital) of our consolidated balance sheets because of the redemption feature of these units. Additionally, FelCor’s consolidated statements of operations separately present earnings attributable to redeemable noncontrolling interests. We adjust redeemable noncontrolling interests in FelCor LP (or redeemable units) each period to reflect the greater of its carrying value based on the accumulation of historical cost or its redemption value. The historical cost is based on the proportionate relationship between the carrying value of equity associated with FelCor’s common stockholders relative to that of FelCor LP’s unitholders. Redemption value is based on the closing price of FelCor’s common stock at period end. FelCor allocates net income (loss) to FelCor LP’s noncontrolling partners based on their weighted average ownership percentage during the period.

In May 2011, FelCor LP issued 367,647 limited partnership units at $6.80 per unit. At December 31, 2013, we carried these units at $3.0 million and the remaining 249,895 outstanding limited partnership units were carried at $2.0 million. The current value of the outstanding units is based on the closing price of FelCor’s common stock at December 31, 2013 ($8.16/share).

Changes in redeemable noncontrolling interests (or redeemable units) are shown below (in thousands):



	Year Ended December 31,
	2013			2012
Balance at beginning of period	$	2,902		$	3,026
Conversion of units	(23		)	(45		)
Forfeiture of units	—			(15		)
Redemption value allocation	2,663			776
Comprehensive loss:
Foreign exchange translation	(6		)	2
Net loss	(497		)	(842		)
Balance at end of period	$	5,039		$	2,902

- Definition

The entire disclosure for noncontrolling interest in consolidated subsidiaries, which could include the name of the subsidiary, the ownership percentage held by the parent, the ownership percentage held by the noncontrolling owners, the amount of the noncontrolling interest, the location of this amount on the balance sheet (when not reported separately), an explanation of the increase or decrease in the amount of the noncontrolling interest, the noncontrolling interest share of the net Income or Loss of the subsidiary, the location of this amount on the income statement (when not reported separately), the nature of the noncontrolling interest such as background information and terms, the amount of the noncontrolling interest represented by preferred stock, a description of the preferred stock, and the dividend requirements of the preferred stock.

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