FelCor LP's Consolidating Financial Information

6 Months Ended

Jun. 30, 2015

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 Canada Co.; FelCor Hotel Asset Company, L.L.C.; FelCor Copley Plaza, 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.


14.	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, 2015

(in thousands)



	FelCor LP		Subsidiary Guarantors			Non-Guarantor Subsidiaries		Eliminations			Total Consolidated
Net investment in hotels	$	—	$	649,072		$	1,075,471	$	—		$	1,724,543
Hotel development	—		—			51,191		—			51,191
Equity investment in consolidated entities	1,254,819		—			—		(1,254,819		)	—
Investment in unconsolidated entities	4,854		5,202			1,287		—			11,343
Hotels held for sale	—		—			36,173		—			36,173
Cash and cash equivalents	70,742		33,916			1,449		—			106,107
Restricted cash	—		13,548			10,012		—			23,560
Accounts receivable, net	469		35,805			17,153		—			53,427
Deferred expenses, net	16,529		—			9,779		—			26,308
Other assets	6,737		9,741			2,830		—			19,308

Total assets	$	1,354,150	$	747,284		$	1,205,345	$	(1,254,819	)	$	2,051,960

Debt	$	1,000,000	$	—		$	574,692	$	(39,436	)	$	1,535,256
Distributions payable	12,288		—			118		—			12,406
Accrued expenses and other liabilities	25,661		90,986			19,265		—			135,912

Total liabilities	1,037,949		90,986			594,075		(39,436		)	1,683,574

Redeemable units, at redemption value	6,041		—			—		—			6,041

Preferred units	309,337		—			—		—			309,337
Common units	823		656,563			558,820		(1,215,383		)	823
Total FelCor LP partners’ capital	310,160		656,563			558,820		(1,215,383		)	310,160
Noncontrolling interests	—		(265		)	9,262		—			8,997
Preferred capital in consolidated joint venture	—		—			43,188		—			43,188
Total partners’ capital	310,160		656,298			611,270		(1,215,383		)	362,345
Total liabilities and partners’ capital	$	1,354,150	$	747,284		$	1,205,345	$	(1,254,819	)	$	2,051,960

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

FELCOR LODGING LIMITED PARTNERSHIP

CONDENSED CONSOLIDATING BALANCE SHEET

December 31, 2014

(in thousands)



	FelCor LP			Subsidiary Guarantors			Non-Guarantor Subsidiaries		Eliminations			Total Consolidated
Net investment in hotels	$	—		$	883,189		$	716,602	$	—		$	1,599,791
Hotel development	—			—			297,466		—			297,466
Equity investment in consolidated entities	1,364,470			—			—		(1,364,470		)	—
Investment in unconsolidated entities	7,270			6,514			1,311		—			15,095
Hotels held for sale	—			—			47,145		—			47,145
Cash and cash equivalents	5,717			32,923			8,507		—			47,147
Restricted cash	—			12,199			8,297		—			20,496
Accounts receivable, net	963			26,343			499		—			27,805
Deferred expenses, net	17,203			—			8,624		—			25,827
Other assets	4,866			11,531			7,489		—			23,886
Total assets	$	1,400,489		$	972,699		$	1,095,940	$	(1,364,470	)	$	2,104,658

Debt	$	1,050,000		$	—		$	576,654	$	(40,787	)	$	1,585,867
Distributions payable	13,709			—			118		—			13,827
Accrued expenses and other liabilities	27,174			94,154			14,153		—			135,481

Total liabilities	1,090,883			94,154			590,925		(40,787		)	1,735,175

Redeemable units, at redemption value	6,616			—			—		—			6,616

Preferred units	478,749			—			—		—			478,749
Common units	(175,759		)	878,698			444,985		(1,323,683		)	(175,759		)
Total FelCor LP partners’ capital	302,990			878,698			444,985		(1,323,683		)	302,990
Noncontrolling interests	—			(153		)	18,588		—			18,435
Preferred capital in consolidated joint venture	—			—			41,442		—			41,442
Total partners’ capital	302,990			878,545			505,015		(1,323,683		)	362,867
Total liabilities and partners’ capital	$	1,400,489		$	972,699		$	1,095,940	$	(1,364,470	)	$	2,104,658

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

FELCOR LODGING LIMITED PARTNERSHIP

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

For the Three Months Ended June 30, 2015

(in thousands)



	FelCor LP			Subsidiary Guarantors			Non-Guarantor Subsidiaries			Eliminations			Total Consolidated
Revenues:
Hotel operating revenue	$	—		$	236,049		$	—		$	—		$	236,049
Percentage lease revenue	—			—			42,755			(42,755		)	—
Other revenue	107			4,800			147			—			5,054
Total revenues	107			240,849			42,902			(42,755		)	241,103

Expenses:
Hotel operating expenses	—			147,025			—			—			147,025
Taxes, insurance and lease expense	105			53,559			5,670			(42,755		)	16,579
Corporate expenses	(138		)	3,909			2,759			—			6,530
Depreciation and amortization	47			14,175			14,528			—			28,750
Other expenses	3			1,463			(55		)	—			1,411
Total operating expenses	17			220,131			22,902			(42,755		)	200,295
Operating income	90			20,718			20,000			—			40,808
Interest expense, net	(14,572		)	3			(5,709		)	—			(20,278		)
Debt extinguishment	(28,446		)	—			(2,377		)	—			(30,823		)
Other gains, net	—			—			166			—			166
Loss before equity in income from unconsolidated entities	(42,928		)	20,721			12,080			—			(10,127		)
Equity in income from consolidated entities	32,380			—			—			(32,380		)	—
Equity in income from unconsolidated entities	7,297			227			(11		)	—			7,513
Loss from continuing operations	(3,251		)	20,948			12,069			(32,380		)	(2,614		)
Loss from discontinued operations	—			—			(83		)	—			(83		)
Loss before loss on sale of hotels	(3,251		)	20,948			11,986			(32,380		)	(2,697		)
Loss on sale of hotels, net	(108		)	(3		)	(439		)	—			(550		)
Net loss	(3,359		)	20,945			11,547			(32,380		)	(3,247		)
Loss attributable to noncontrolling interests	—			251			(4		)	—			247
Preferred distributions - consolidated joint venture	—			—			(359		)	—			(359		)
Net loss attributable to FelCor LP	(3,359		)	21,196			11,184			(32,380		)	(3,359		)
Preferred distributions	(7,903		)	—			—			—			(7,903		)
Redemption of preferred units	(6,096		)	—			—			—			(6,096		)
Net loss attributable to FelCor LP common unitholders	$	(17,358	)	$	21,196		$	11,184		$	(32,380	)	$	(17,358	)

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

FELCOR LODGING LIMITED PARTNERSHIP

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

For the Three Months Ended June 30, 2014

(in thousands)



	FelCor LP			Subsidiary Guarantors			Non-Guarantor Subsidiaries			Eliminations			Total Consolidated
Revenues:
Hotel operating revenue	$	—		$	258,279		$	—		$	—		$	258,279
Percentage lease revenue	1,910			—			28,628			(30,538		)	—
Other revenue	1			1,082			153			—			1,236
Total revenues	1,911			259,361			28,781			(30,538		)	259,515

Expenses:
Hotel operating expenses	—			162,700			—			—			162,700
Taxes, insurance and lease expense	450			53,325			3,755			(30,538		)	26,992
Corporate expenses	149			4,934			2,564			—			7,647
Depreciation and amortization	992			16,880			11,210			—			29,082
Other expenses	—			789			1,325			—			2,114
Total operating expenses	1,591			238,628			18,854			(30,538		)	228,535
Operating income	320			20,733			9,927			—			30,980
Interest expense, net	(20,300		)	(306		)	(3,889		)	—			(24,495		)
Debt extinguishment	—			—			(27		)	—			(27		)
Other gains, net	—			100			—			—			100
Income before equity in income from unconsolidated entities	(19,980		)	20,527			6,011			—			6,558
Equity in income from consolidated entities	42,238			—			—			(42,238		)	—
Equity in income from unconsolidated entities	2,315			462			(11		)	—			2,766
Income from continuing operations	24,573			20,989			6,000			(42,238		)	9,324
Income from discontinued operations	—			5			—			—			5
Income before gain on sale of hotels	24,573			20,994			6,000			(42,238		)	9,329
Gain on sale of hotels, net	(221		)	(15		)	15,862			—			15,626
Net income	24,352			20,979			21,862			(42,238		)	24,955
Income attributable to noncontrolling interests	—			(113		)	(149		)	—			(262		)
Preferred distributions - consolidated joint venture	—			—			(341		)	—			(341		)
Net income attributable to FelCor LP	24,352			20,866			21,372			(42,238		)	24,352
Preferred distributions	(9,678		)	—			—			—			(9,678		)
Net income attributable to FelCor LP common unitholders	$	14,674		$	20,866		$	21,372		$	(42,238	)	$	14,674

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

FELCOR LODGING LIMITED PARTNERSHIP

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

For the Six Months Ended June 30, 2015

(in thousands)



	FelCor LP			Subsidiary Guarantors			Non-Guarantor Subsidiaries			Eliminations			Total Consolidated
Revenues:
Hotel operating revenue	$	—		$	449,334		$	—		$	—		$	449,334
Percentage lease revenue	—			—			80,520			(80,520		)	—
Other revenue	108			5,147			209			—			5,464
Total revenues	108			454,481			80,729			(80,520		)	454,798

Expenses:
Hotel operating expenses	—			290,661			—			—			290,661
Taxes, insurance and lease expense	(49		)	101,963			10,161			(80,520		)	31,555
Corporate expenses	—			8,631			6,472			—			15,103
Depreciation and amortization	89			29,504			26,929			—			56,522
Other expenses	3			5,509			127			—			5,639
Total operating expenses	43			436,268			43,689			(80,520		)	399,480
Operating income	65			18,213			37,040			—			55,318
Interest expense, net	(28,312		)	6			(11,453		)	—			(39,759		)
Debt extinguishment	(28,446		)	—			(2,450		)	—			(30,896		)
Other gains, net	—			—			166			—			166
Loss before equity in income from unconsolidated entities	(56,693		)	18,219			23,303			—			(15,171		)
Equity in income from consolidated entities	52,738			—			—			(52,738		)	—
Equity in income from unconsolidated entities	7,644			41			(23		)	—			7,662
Loss from continuing operations	3,689			18,260			23,280			(52,738		)	(7,509		)
Loss from discontinued operations	—			4			(83		)	—			(79		)
Loss before gain on sale of hotels	3,689			18,264			23,197			(52,738		)	(7,588		)
Gain on sale of hotels, net	(279		)	(12		)	16,628			—			16,337
Net income	3,410			18,252			39,825			(52,738		)	8,749
Income attributable to noncontrolling interests	—			510			(5,142		)	—			(4,632		)
Preferred distributions - consolidated joint venture	—			—			(707		)	—			(707		)
Net income attributable to FelCor LP	3,410			18,762			33,976			(52,738		)	3,410
Preferred distributions	(17,581		)	—			—			—			(17,581		)
Redemption of preferred units	(6,096		)	—			—			—			(6,096		)
Net loss attributable to FelCor LP common unitholders	$	(20,267	)	$	18,762		$	33,976		$	(52,738	)	$	(20,267	)

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

FELCOR LODGING LIMITED PARTNERSHIP

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

For the Six Months Ended June 30, 2014

(in thousands)



	FelCor LP			Subsidiary Guarantors			Non-Guarantor Subsidiaries			Eliminations			Total Consolidated
Revenues:
Hotel operating revenue	$	—		$	479,301		$	—		$	—		$	479,301
Percentage lease revenue	3,309			—			58,496			(61,805		)	—
Other revenue	2			1,348			213			—			1,563
Total revenues	3,311			480,649			58,709			(61,805		)	480,864

Expenses:
Hotel operating expenses	—			316,814			—			—			316,814
Taxes, insurance and lease expense	870			103,957			7,603			(61,805		)	50,625
Corporate expenses	272			9,630			5,570			—			15,472
Depreciation and amortization	1,984			33,532			23,167			—			58,683
Other expenses	35			1,628			2,465			—			4,128
Total operating expenses	3,161			465,561			38,805			(61,805		)	445,722
Operating income	150			15,088			19,904			—			35,142
Interest expense, net	(40,784		)	(634		)	(8,304		)	—			(49,722		)
Debt extinguishment	—			—			(33		)	—			(33		)
Other gains, net	—			100			—			—			100
Loss before equity in income from unconsolidated entities	(40,634		)	14,554			11,567			—			(14,513		)
Equity in income from consolidated entities	47,381			—			—			(47,381		)	—
Equity in income from unconsolidated entities	3,115			317			(23		)	—			3,409
Loss from continuing operations	9,862			14,871			11,544			(47,381		)	(11,104		)
Income from discontinued operations	—			34			106			—			140
Loss before gain on sale of hotels	9,862			14,905			11,650			(47,381		)	(10,964		)
Gain on sale of hotels, net	(449		)	(28		)	21,560			—			21,083
Net income	9,413			14,877			33,210			(47,381		)	10,119
Income attributable to noncontrolling interests	—			21			(205		)	—			(184		)
Preferred distributions - consolidated joint venture	—			—			(522		)	—			(522		)
Net income attributable to FelCor LP	9,413			14,898			32,483			(47,381		)	9,413
Preferred distributions	(19,356		)	—			—			—			(19,356		)
Net loss attributable to FelCor LP common unitholders	$	(9,943	)	$	14,898		$	32,483		$	(47,381	)	$	(9,943	)

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

FELCOR LODGING LIMITED PARTNERSHIP

CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME

For the Three Months Ended June 30, 2015

(in thousands)



	FelCor LP			Subsidiary Guarantors		Non-Guarantor Subsidiaries			Eliminations			Total Consolidated
Net loss	$	(3,359	)	$	20,945	$	11,547		$	(32,380	)	$	(3,247	)
Foreign currency translation adjustment	—			—		—			—			—
Comprehensive loss	(3,359		)	20,945		11,547			(32,380		)	(3,247		)
Comprehensive loss attributable to noncontrolling interests	—			251		(4		)	—			247
Preferred distributions - consolidated joint venture	—			—		(359		)	—			(359		)
Comprehensive loss attributable to FelCor LP	$	(3,359	)	$	21,196	$	11,184		$	(32,380	)	$	(3,359	)

FELCOR LODGING LIMITED PARTNERSHIP

CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME

For the Three Months Ended June 30, 2014

(in thousands)



	FelCor LP		Subsidiary Guarantors			Non-Guarantor Subsidiaries			Eliminations			Total Consolidated
Net income	$	24,352	$	20,979		$	21,862		$	(42,238	)	$	24,955
Foreign currency translation adjustment	575		65			510			(575		)	575
Comprehensive income	24,927		21,044			22,372			(42,813		)	25,530
Comprehensive income attributable to noncontrolling interests	—		(113		)	(149		)	—			(262		)
Preferred distributions - consolidated joint venture	—		—			(341		)	—			(341		)
Comprehensive income attributable to FelCor LP	$	24,927	$	20,931		$	21,882		$	(42,813	)	$	24,927

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

FELCOR LODGING LIMITED PARTNERSHIP

CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME

For the Six Months Ended June 30, 2015

(in thousands)



	FelCor LP		Subsidiary Guarantors		Non-Guarantor Subsidiaries			Eliminations			Total Consolidated
Net income	$	3,410	$	18,252	$	39,825		$	(52,738	)	$	8,749
Foreign currency translation adjustment	—		—		—			—			—
Comprehensive income	3,410		18,252		39,825			(52,738		)	8,749
Comprehensive income attributable to noncontrolling interests	—		510		(5,142		)	—			(4,632		)
Preferred distributions - consolidated joint venture	—		—		(707		)	—			(707		)
Comprehensive income attributable to FelCor LP	$	3,410	$	18,762	$	33,976		$	(52,738	)	$	3,410

FELCOR LODGING LIMITED PARTNERSHIP

CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME

For the Six Months Ended June 30, 2014

(in thousands)



	FelCor LP			Subsidiary Guarantors			Non-Guarantor Subsidiaries			Eliminations			Total Consolidated
Net income	$	9,413		$	14,877		$	33,210		$	(47,381	)	$	10,119
Foreign currency translation adjustment	(45		)	(18		)	(27		)	45			(45		)
Comprehensive income	9,368			14,859			33,183			(47,336		)	10,074
Comprehensive income attributable to noncontrolling interests	—			21			(205		)	—			(184		)
Preferred distributions - consolidated joint venture	—			—			(522		)	—			(522		)
Comprehensive income attributable to FelCor LP	$	9,368		$	14,880		$	32,456		$	(47,336	)	$	9,368

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

FELCOR LODGING LIMITED PARTNERSHIP

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

For the Six Months Ended June 30, 2015

(in thousands)



	FelCor LP			Subsidiary Guarantors			Non-Guarantor Subsidiaries			Eliminations			Total Consolidated
Operating activities:
Cash flows from operating activities	$	(27,500	)	$	39,296		$	57,144		$	—		$	68,940
Investing activities:
Improvements and additions to hotels	(129		)	(15,847		)	(9,781		)	—			(25,757		)
Hotel development	—			—			(21,637		)	—			(21,637		)
Net proceeds from asset sales	(306		)	10			134,174			—			133,878
Insurance proceeds	274			—			—			—			274
Change in restricted cash - investing	—			(1,350		)	(1,714		)	—			(3,064		)
Distributions from unconsolidated entities	6,303			—			—			—			6,303
Intercompany financing	167,009			—			—			(167,009		)	—
Cash flows from investing activities	173,151			(17,187		)	101,042			(167,009		)	89,997
Financing activities:
Proceeds from borrowings	475,000			—			504,000			—			979,000
Repayment of borrowings	(545,440		)	—			(504,616		)	—			(1,050,056		)
Payment of deferred financing fees	(8,261		)	—			(5,661		)	—			(13,922		)
Distributions paid to noncontrolling interests	—			(85		)	(15,893		)	—			(15,978		)
Contributions from noncontrolling interests	—			483			1,425			—			1,908
Redemption of preferred units	(169,986		)	—			—			—			(169,986		)
Distributions paid to preferred unitholders	(19,847		)	—			—			—			(19,847		)
Distributions paid to common unitholders	(10,765		)	—			—			—			(10,765		)
Net proceeds from issuance of preferred capital - consolidated joint venture	—			—			1,746			—			1,746
Net proceeds from common stock issuance	198,720			—			—			—			198,720
Intercompany financing	—			(21,471		)	(145,538		)	167,009			—
Other	(47		)	—			(707		)	—			(754		)
Cash flows from financing activities	(80,626		)	(21,073		)	(165,244		)	167,009			(99,934		)
Effect of exchange rate changes on cash	—			(43		)	—			—			(43		)
Change in cash and cash equivalents	65,025			993			(7,058		)	—			58,960
Cash and cash equivalents at beginning of period	5,717			32,923			8,507			—			47,147
Cash and cash equivalents at end of period	$	70,742		$	33,916		$	1,449		$	—		$	106,107

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

FELCOR LODGING LIMITED PARTNERSHIP

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

For the Six Months Ended June 30, 2014

(in thousands)



	FelCor LP			Subsidiary Guarantors			Non-Guarantor Subsidiaries			Eliminations			Total Consolidated
Operating activities:
Cash flows from operating activities	$	(38,098	)	$	55,424		$	36,795		$	—		$	54,121
Investing activities:
Improvements and additions to hotels	(685		)	(29,305		)	(18,042		)	—			(48,032		)
Hotel development	—			—			(48,178		)	—			(48,178		)
Net proceeds from asset sales	(419		)	(56		)	94,083			—			93,608
Insurance proceeds	—			255			—			—			255
Change in restricted cash - investing	—			(1,533		)	12,714			—			11,181
Distributions from unconsolidated entities	3,406			500			—			—			3,906
Intercompany financing	67,733			—			—			(67,733		)	—
Cash flows from investing activities	70,035			(30,139		)	40,577			(67,733		)	12,740
Financing activities:
Proceeds from borrowings	—			—			140,500			—			140,500
Repayment of borrowings	—			—			(205,904		)	—			(205,904		)
Distributions paid to preferred unitholders	(19,356		)	—			—			—			(19,356		)
Distributions paid to common unitholders	(4,968		)	—			—			—			(4,968		)
Distributions paid to noncontrolling interests	—			(626		)	(6,428		)	—			(7,054		)
Contributions from noncontrolling interests	—			605			4,464			—			5,069
Net proceeds from issuance of preferred capital- consolidated joint venture	—			—			40,994			—			40,994
Intercompany financing	—			(13,511		)	(54,222		)	67,733			—
Other	(24		)	—			(416		)	—			(440		)
Cash flows from financing activities	(24,348		)	(13,532		)	(81,012		)	67,733			(51,159		)
Effect of exchange rate changes on cash	—			(3		)	—			—			(3		)
Change in cash and cash equivalents	7,589			11,750			(3,640		)	—			15,699
Cash and cash equivalents at beginning of period	5,227			33,283			7,135			—			45,645
Cash and cash equivalents at end of period	$	12,816		$	45,033		$	3,495		$	—		$	61,344