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-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Asf+4dxzyLDeWOkIhCiR7At2FEn9g/YM9X+acvlbKticovxQScYXsvlHLtZU12qW z9Sw08WDEKXJFNt1NEb+Xw== 0000950134-04-015823.txt : 20041028 0000950134-04-015823.hdr.sgml : 20041028 20041027215326 ACCESSION NUMBER: 0000950134-04-015823 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20041027 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20041028 DATE AS OF CHANGE: 20041027 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FELCOR LODGING TRUST INC CENTRAL INDEX KEY: 0000923603 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 752541756 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-14236 FILM NUMBER: 041100802 BUSINESS ADDRESS: STREET 1: 545 E JOHN CARPENTER FREEWAY STREET 2: SUITE 1300 CITY: IRVING STATE: TX ZIP: 75062 BUSINESS PHONE: 9724444900 MAIL ADDRESS: STREET 1: 545 E JOHN CARPENTER FREEWAY STREET 2: SUITE 1300 CITY: IRVING STATE: TX ZIP: 75062 FORMER COMPANY: FORMER CONFORMED NAME: FELCOR SUITE HOTELS INC DATE OF NAME CHANGE: 19940523 8-K 1 d19476e8vk.htm FORM 8-K e8vk

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934


Date of Report (Date of earliest event reported)		October 27, 2004

FelCor Lodging Trust Incorporated

(Exact name of registrant as specified in its charter)


Maryland	001-14236	75-2541756

(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)


545 E. John Carpenter Frwy., Suite 1300 Irving, Texas		75062

(Address of principal executive offices)		(Zip Code)


Registrant’s telephone number, including area code		(972) 444-4900

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Section 2 – Financial Information

TABLE OF CONTENTS


	Item 2.02 Results of Operations and Financial Condition.
	Item 9.01 Financial Statements and Exhibits.
SIGNATURES
Press Release
Supplemental Information

Item 2.02 Results of Operations and Financial Condition.

On October 27, 2004, FelCor Lodging Trust Incorporated issued a press release announcing its results of operations for the three and nine months ended September 30, 2004, and published its Supplemental Information for the three and nine months ended September 30, 2004, which provides additional corporate data, financial highlights and portfolio statistical data. Copies of the press release and the Supplemental Information are furnished as Exhibits 99.1 and 99.2, respectively, to this Current Report on Form 8-K. Copies of the foregoing are also available on FelCor Lodging Trust Incorporated’s website at www.felcor.com, on its Investor Relations page in the “Financial Reports” section.

The information in this Current Report on Form 8-K, including the exhibits, is provided under Item 2.02 of Form 8-K and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section. Furthermore, the information in this Current Report on Form 8-K, including the exhibits, shall not be deemed to be incorporated by reference into the filings of the registrant under the Securities Act of 1933 regardless of any general incorporation language in such filings.

Section 9 – Financial Statements and Exhibits

Item 9.01 Financial Statements and Exhibits.

(a) Financial statements of businesses acquired.

Not applicable.

(b) Pro forma financial information.

Not applicable.

The following exhibits are furnished in accordance with the provisions of Item 601 of Regulation S-K:


Exhibit
Number		Description of Exhibit

99.1		Press release issued by FelCor Lodging Trust Incorporated on October 27, 2004, announcing its results of operations for the three and nine months ended September 30, 2004.
99.2		Supplemental Information for the three and nine months ended September 30, 2004, published by FelCor Lodging Trust Incorporated on October 27, 2004, providing additional corporate data, financial highlights and portfolio statistical data.

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

FELCOR LODGING TRUST INCORPORATED

Date: October 27, 2004 By:   /s/ Lester C. Johnson
Name:   Lester C. Johnson
Title:   Senior Vice President and Controller

INDEX TO EXHIBITS


Exhibit
Number		Description of Exhibit

99.1		Press release issued by FelCor Lodging Trust Incorporated on October 27, 2004, announcing its results of operations for the three and nine months ended September 30, 2004.
99.2		Supplemental Information for the three and nine months ended September 30, 2004, published by FelCor Lodging Trust Incorporated on October 27, 2004, providing additional corporate data, financial highlights and portfolio statistical data.

EX-99.1 2 d19476exv99w1.txt PRESS RELEASE EXHIBIT 99.1 [FELCOR LODGING TRUST LOGO] FelCor Lodging Trust Incorporated 545 E. John Carpenter Freeway, Suite 1300 Irving, Texas 75062-3933 P 972.444.4900 F 972.444.4949 www.felcor.com NYSE: FCH FOR IMMEDIATE RELEASE: FELCOR'S REVPAR CONTINUES TO IMPROVE - ANNOUNCES THIRD QUARTER RESULTS IRVING, TEXAS...OCTOBER 27, 2004 -- FelCor Lodging Trust Incorporated (NYSE: FCH), the nation's second largest hotel real estate investment trust ("REIT"), today reported operating results for the third quarter and nine months ended September 30, 2004. THIRD QUARTER RESULTS: FelCor's third quarter hotel portfolio revenue per available room ("RevPAR") improved 4.6 percent (July 4.4 percent, August 1.8 percent and September 8.0 percent), compared to third quarter 2003. For the quarter, average daily rate ("ADR") increased 2.7 percent to $98.00, and occupancy increased 1.9 percent to 67.7 percent, compared to third quarter 2003. During the first 21 days of October, total portfolio RevPAR increased 7.6 percent, with occupancy increasing 4.2 percent and ADR increasing 3.2 percent, compared to the same period in 2003. Hotel operating profit for FelCor's hotels included in continuing operations increased nine percent to $60 million, compared to the same period last year. This represents a hotel operating profit flow through of nearly two times RevPAR growth. The hotel operating profit margin was 19.7 percent, which represents a 60 basis point increase, compared to the same period of 2003. The improvements in hotel operating margins are largely from decreases in property taxes and insurance that were somewhat offset by higher labor-related costs. FelCor's net loss applicable to common shareholders for the third quarter was $46 million, or a loss of $0.78 per share, compared to a third quarter 2003 net loss of $133 million, or a loss of $2.26 per share. Third quarter 2004 Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA") totaled $31 million, compared to a $50 million loss in the third quarter of 2003. EBITDA adjusted for impairment charges; costs associated with the early retirement of debt and interest rate swaps; and gains and losses on sale of assets ("Adjusted EBITDA") was $74 million, or an 18.8 percent improvement compared to third quarter 2003. Third quarter 2004 Funds From Operations ("FFO") was a loss of $19 million, or $0.30 per share. FFO for the same period last year was a loss of $101 million, or $1.64 per share. In accordance with the Securities and Exchange Commission's ("SEC") guidance on non-GAAP financial measures, FFO has not been adjusted to add back the following items included in net loss for the third quarter: - $33 million ($0.53 per share) of impairment charges and - $13 million ($0.21 per share) of costs associated with the early retirement of $179 million of senior notes. EBITDA, Adjusted EBITDA and FFO are non-GAAP financial measures. See the discussion included in this press release for more information regarding these non-GAAP financial measures including a reconciliation of these measures to FelCor's net loss. -more- FelCor Lodging Trust Third Quarter 2004 Operating Results October 27, 2004 Page 2 Included in the operating results for the current quarter are $2.1 million, or $0.03 per share, of expenses associated with hurricane damage in Florida. The third quarter 2004 impairment charges of $33 million relate to 13 hotels. Of the impaired assets, five were either held for sale at September 30, 2004, or met the criteria of being held for sale following the end of the quarter. With respect to one hotel, FelCor entered into an option in the third quarter to sell the hotel for less than its book value. The remaining seven hotels experienced disappointing operating results, compared to prior year and budget, and recently forecasted 2005 hotel operating margins continue to be depressed for these hotels. These hotels are currently being reviewed for possible disposition. During the third quarter of 2003, FelCor recorded an impairment charge of $113 million, or $1.82 per share, relating to 21 hotels. The completion and sale of the 251-unit Margate condominium tower at the Kingston Plantation in Myrtle Beach, South Carolina, during the quarter concluded FelCor's third successful condominium development project. This project resulted in an $11 million profit during the quarter, $3 million over the original estimate. A fourth condominium project in Myrtle Beach is in the planning stages, with a completion date currently expected in the fall of 2006. YEAR TO DATE RESULTS: For the nine months ended September 30, 2004, FelCor's RevPAR increased 5.0 percent, compared to the same period in 2003. The increase in RevPAR resulted from a 1.4 percent increase in ADR and a 3.5 percent increase in occupancy during the period. Hotel operating profit for FelCor's hotels included in continuing operations increased 5.5 percent to $182 million, compared to the third quarter 2003. The hotel operating margins were 20.1 percent, which represents a 40 basis point decrease, compared to the same period in 2003. The decrease in margins is largely attributed to increased labor-related costs somewhat offset by improvements in property taxes and insurance costs. FelCor's net loss applicable to common shareholders for the nine months ended September 30, 2004, was $114 million, or a net loss per share of $1.94. This is compared to the prior year net loss of $187 million, or $3.20 per share. EBITDA for the nine months ended September 30, 2004, totaled $126 million, compared to $72 million in the same period of 2003. Adjusted EBITDA was $206 million, or a six percent improvement to prior year. FFO for the nine months ended September 30, 2004, was a loss of $25 million, or $0.40 per share. FFO for the same period last year was a loss of $80 million, or $1.29 per share. In accordance with the SEC's guidance on non-GAAP financial measures, FFO has not been adjusted to add back the costs associated with: - $33 million ($0.53 per share) of impairment charges; - $44 million ($0.72 per share) of costs associated with the early retirement of $679 million of senior notes and gain on swap termination; and - $5 million ($0.08 per share) of lease termination costs. "Overall hotel operations have been strong with improving rates and increasing revenue this year, both for the industry and FelCor," said Thomas J. Corcoran, Jr., FelCor's President and CEO. "In addition, our hotels experienced improved operating profit margins for the first time since we acquired our leases in 2001." -more- FelCor Lodging Trust Third Quarter 2004 Operating Results October 27, 2004 Page 3 CAPITAL STRUCTURE: Consistent with the Company's objectives to reduce its outstanding debt, reduce its interest expense and extend the maturities of its debt, FelCor completed the following capital transactions during the third quarter: - Issued 2.3 million shares of its $1.95 Series A Cumulative Convertible Preferred Stock at a yield of 8.5%, realizing net proceeds of $52 million; - Purchased or redeemed $179 million in aggregate principal amount of its 9.5% Senior Notes due 2008 that, at retirement, bore interest at the rate of 10% per year. At September 30, 2004, FelCor had $1.8 billion of debt outstanding, with a weighted average life of five years and approximately $154 million in cash and cash equivalents. FelCor has no significant remaining debt maturities (other than those that may be extended at FelCor's option) until 2007, when $125 million of its senior notes mature. "We're pleased to have successfully retired $179 million of FelCor's 9.5% Senior Notes due 2008 during the quarter," said Andrew J. Welch, FelCor's Senior Vice President and Treasurer. "Since the end of the third quarter, we have received approximately $57 million from the sale of four additional hotels and issued notices that we will be redeeming an additional $50 million of the 2008 Senior Notes during November 2004, leaving a principal balance of approximately $46 million. This, and other initiatives taken this year, will continue to strengthen FelCor's financial position by decreasing our level of debt, reducing our interest costs and extending the length of our maturities." OTHER HIGHLIGHTS: FelCor has declared the third quarter dividend on each of its $1.95 Series A Cumulative Convertible Preferred Stock and its 9% Series B Cumulative Redeemable Preferred Stock. FelCor currently has 19 remaining non-strategic hotels identified for sale (including three hotels held for sale at September 30, 2004), with currently expected proceeds of approximately $134 million, substantially all of which are expected to be sold over the next 15 months. Through October 27, 2004, FelCor has sold 15 hotels for $127 million with the proceeds used to retire senior notes. For the remainder of 2004, proceeds from the sale of five non-strategic hotels are currently estimated to be approximately $34 million, which FelCor expects to use to retire additional senior notes. During the fourth quarter of 2004, FelCor expects to recognize gains of approximately $18 million upon sales of hotels. 2004 GUIDANCE: Current estimates for the fourth quarter and full year 2004 operating results, exclusive of future capital transactions other than the completion of the $50 million of pending senior note redemptions, are as follows:

-more- FelCor Lodging Trust Third Quarter 2004 Operating Results October 27, 2004 Page 4 Included in Net Loss and FFO guidance are the following (in millions):

FelCor currently anticipates its 2004 total capital expenditures to be in the range of $75 to $100 million, with $64 million having been spent through September 30, 2004. FelCor has published its Third Quarter 2004 Supplemental Information, which provides additional corporate data, financial highlights and portfolio statistical data for the quarter and nine months ended September 30, 2004. Investors are encouraged to access the Supplemental Information on the Company's Web site at www.felcor.com, on its Investor Relations page in the "Financial Reports" section. The Supplemental Information also will be furnished upon request. Requests may be made by e-mail to information@felcor.com or by writing to the Vice President of Investor Relations, FelCor Lodging Trust Incorporated, 545 E. John Carpenter Freeway, Suite 1300, Irving, Texas, 75062. FelCor is the nation's second largest hotel REIT and the nation's largest owner of full service, all-suite hotels. FelCor's consolidated portfolio is comprised of 146 hotels, located in 32 states and Canada. FelCor owns 69 full service, all-suite hotels, and is the largest owner of Embassy Suites Hotels(R) and Doubletree Guest Suites(R) hotels. FelCor's portfolio also includes 68 hotels in the upscale and full service segments. FelCor has a current market capitalization of approximately $3.0 billion. Additional information can be found on FelCor's Web site at www.felcor.com. FelCor invites you to listen to its third quarter 2004 conference call on Thursday, October 28, 2004, at 9:00 a.m. (Central Standard Time). The conference call will be webcast simultaneously via FelCor's Web site at www.felcor.com. Interested investors and other parties who wish to access the call should go to FelCor's Web site and click on the conference call microphone icon on either the "Investor Relations" or "FelCor News" pages. A phone replay will be available from Thursday, October 28, 2004, at 12:00 p.m. (Central Standard Time), through Friday, November 26, 2004, at 7:00 p.m. (Central Standard Time), by dialing 416-695-6033 (access code is 5254). A recording of the call also will be archived and available at www.felcor.com. -more- FelCor Lodging Trust Third Quarter 2004 Operating Results October 27, 2004 Page 5 With the exception of historical information, the matters discussed in this news release include "forward looking statements" within the meaning of the federal securities laws. Forward looking statements are not guarantees of future performance. Numerous risks and uncertainties, and the occurrence of future events, may cause actual results to differ materially from those currently anticipated. General economic conditions, including the anticipated continuation of the current economic recovery, the impact of U.S. military involvement in the Middle East and elsewhere, future acts of terrorism, the impact on the travel industry of increased security precautions, the availability of capital, the ability to effect sales of non-strategic hotels at anticipated prices, and numerous other factors may affect future results, performance and achievements. Certain of these risks and uncertainties are described in greater detail in our filings with the Securities and Exchange Commission. Although FelCor believes its current expectations to be based upon reasonable assumptions, the Company can give no assurance that its expectations will be attained or that actual results will not differ materially. Contact: Thomas J. Corcoran, Jr., President and CEO (972) 444-4901 tcorcoran@felcor.com Andrew J. Welch, Senior Vice President and Treasurer (972) 444-4982 awelch@felcor.com Monica L. Hildebrand, Vice President of Communications (972) 444-4917 mhildebrand@felcor.com Stephen A. Schafer, Vice President of Investor Relations (972) 444-4912 sschafer@felcor.com

-more- FelCor Lodging Trust Third Quarter 2004 Operating Results October 27, 2004 Page 6 RESULTS OF OPERATIONS - THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003 (in thousands, except per share data)
THREE MONTHS NINE MONTHS ENDED SEPTEMBER 30, ENDED SEPTEMBER 30, ------------------- ------------------- 2004 2003 2004 2003 --------- --------- --------- --------- REVENUES: Hotel operating revenue: Room ......................................... $ 244,281 $ 231,579 $ 724,974 $ 674,542 Food and beverage ............................ 42,418 38,843 131,510 121,348 Other operating departments .................. 16,110 14,974 47,889 45,063 Retail space rental and other revenue .......... 2,166 221 2,590 838 --------- --------- --------- --------- Total revenues ......................... 304,975 285,617 906,963 841,791 --------- --------- --------- --------- EXPENSES: Hotel departmental expenses: Room ......................................... 66,787 62,142 194,478 174,788 Food and beverage ............................ 34,551 32,258 105,455 96,737 Other operating departments .................. 7,993 6,893 24,045 20,415 Other property related costs ................... 88,247 83,245 261,636 241,738 Management and franchise fees .................. 16,270 15,375 47,490 44,488 Taxes, insurance and lease expense ............. 29,216 30,905 89,750 90,792 Corporate expenses ............................. 3,791 3,299 11,569 10,459 Depreciation ................................... 30,074 31,476 88,445 95,009 --------- --------- --------- --------- Total operating expenses ................ 276,929 265,593 822,868 774,426 --------- --------- --------- --------- OPERATING INCOME .................................. 28,046 20,024 84,095 67,365 Interest expense, net .......................... (35,348) (42,303) (116,210) (123,150) Impairment loss ................................ (28,498) (53,204) (28,498) (53,204) Hurricane loss ................................. (2,125) -- (2,125) -- Charge off of debt related costs ............... (1,920) -- (6,094) (2,834) Loss on early extinguishment of debt ........... (10,987) -- (39,233) -- Gain on swap termination ....................... -- -- 1,005 -- --------- --------- --------- --------- LOSS BEFORE EQUITY IN INCOME FROM UNCONSOLIDATED ENTITIES, MINORITY INTERESTS AND GAIN (LOSS) ON SALE OF ASSETS ........... (50,832) (75,483) (107,060) (111,823) Equity in income from unconsolidated entities .. 12,019 1,674 15,692 2,252 Gain (loss) on sale of assets .................. 1,094 (47) 1,094 106 Minority interests ............................. 2,230 4,587 5,800 7,068 --------- --------- --------- --------- LOSS FROM CONTINUING OPERATIONS ................... (35,489) (69,269) (84,474) (102,397) Discontinued operations ........................ (1,496) (56,648) (4,883) (64,814) --------- --------- --------- --------- NET LOSS .......................................... (36,985) (125,917) (89,357) (167,211) Preferred dividends ............................ (9,343) (6,727) (25,039) (20,181) --------- --------- --------- --------- NET LOSS APPLICABLE TO COMMON STOCKHOLDERS ........ $ (46,328) $(132,644) $(114,396) $(187,392) ========= ========= ========= ========= Basic and diluted per common share data: Net loss from continuing operations ............ $ (0.76) $ (1.29) $ (1.86) $ (2.09) ========= ========= ========= ========= Net loss ....................................... $ (0.78) $ (2.26) $ (1.94) $ (3.20) ========= ========= ========= ========= Weighted average common shares outstanding ..... 59,075 58,690 58,993 58,609 ========= ========= ========= =========
-more- FelCor Lodging Trust Third Quarter 2004 Operating Results October 27, 2004 Page 7 DISCONTINUED OPERATIONS (IN THOUSANDS) Included in discontinued operations are the results of operations of the 13 hotels disposed of in the first nine months of 2004, six hotels designated as held for sale at September 30, 2004, and 16 hotels sold in 2003. Condensed financial information for the hotels included in discontinued operations is as follows:
THREE MONTHS ENDED NINE MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, ------------- ------------- 2004 2003 2004 2003 --------- --------- --------- --------- Hotel operating revenue .......................... $ 14,558 $ 39,972 $ 63,621 $ 119,700 Hotel operating expenses ......................... 14,660 40,082 61,431 120,703 --------- --------- --------- --------- Operating income ................................. (102) (110) 2,190 (1,003) Direct interest costs ............................ 7 20 12 (637) Gain on the early extinguishment of debt ......... -- 351 -- 1,611 Impairment ....................................... (4,529) (59,498) (4,529) (67,322) Lease termination expense from asset disposition . -- -- (4,900) -- Gain (loss) on sale of assets .................... 3,058 (399) 2,116 (882) Minority interest ................................ 70 2,988 228 3,419 --------- --------- --------- --------- Loss from discontinued operations ................ $ (1,496) $ (56,648) $ (4,883) $ (64,814) ========= ========= ========= =========
-more- FelCor Lodging Trust Third Quarter 2004 Operating Results October 27, 2004 Page 8 NON-GAAP FINANCIAL MEASURES Historical cost accounting for real estate assets implicitly assumes that the value of real estate assets diminish predictably over time. Since real estate values instead have historically risen or fallen with market conditions, most industry investors consider supplemental measures of performance to be helpful in evaluating a real estate company's operations. Funds From Operations ("FFO"), Earnings Before Interest, Taxes, Depreciation, and Amortization ("EBITDA") and Adjusted EBITDA are not measures of operating performance under generally accepted accounting principles ("GAAP"). However, FelCor considers FFO, EBITDA and Adjusted EBITDA to be supplemental measures of a REIT's performance and should be considered along with, but not as an alternative to, net income as a measure of FelCor's operating performance. FFO, EBITDA and Adjusted EBITDA reflect additional ways of viewing FelCor's operations that the Company believes when viewed with its GAAP results and the reconciliations to the corresponding GAAP financial measures, provide a more complete understanding of factors and trends affecting its business than could be obtained absent this disclosure. Management strongly encourages investors to review the Company's financial information in its entirety and not to rely on a single financial measure. The White Paper on Funds From Operations approved by the Board of Governors of the National Association of Real Estate Investment Trusts, or NAREIT, defines FFO as net income or loss (computed in accordance with GAAP), excluding gains or losses from sales of property, plus depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. Adjustments for unconsolidated partnerships and joint ventures are calculated to reflect FFO on the same basis. FelCor computes FFO in accordance with standards established by NAREIT. This may not be comparable to FFO reported by other REITs that do not define the term in accordance with the current NAREIT definition, or that interpret the current NAREIT definition differently than FelCor does. EBITDA is a commonly used measure of performance in many industries. FelCor defines EBITDA as net income or loss (computed in accordance with GAAP) plus interest, income taxes, depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. Adjustments for unconsolidated partnership and joint ventures are calculated to reflect EBITDA on the same basis. FelCor's management and Board of Directors use Adjusted EBITDA to evaluate the performance of its hotels and to facilitate comparisons between the Company and other lodging REITs, hotel owners who are not REITs and other capital intensive companies. FelCor adjusts EBITDA when evaluating its performance because management believes that the exclusion of certain additional recurring and non-recurring items described below provides useful supplemental information to investors regarding its ongoing operating performance and that the presentation of Adjusted EBITDA when combined with GAAP net income, EBITDA and FFO is beneficial to an investor's better understanding of the Company's operating performance. FelCor adjusts EBITDA for the following items to derive Adjusted EBITDA: - Gains and losses related to early extinguishment of debt and interest rate swaps - FelCor excludes gains and losses related to early extinguishment of debt and interest rate swaps because the Company believes that it represents an acceleration of interest expense or a reduction of interest expense and interest expense is excluded from EBITDA. - Gains or losses on disposition of assets - FelCor excludes the gains or losses on disposition of assets because the Company believes that including them in EBIDTA is not consistent with reflecting ongoing performance of its remaining assets. Additionally, the gain or loss on sale of depreciable assets represents either accelerated depreciation or too much depreciation deducted in previous periods and depreciation is excluded from EBITDA. - Impairment losses - FelCor excludes the effect of impairment losses because the Company believes that including these in EBITDA is not consistent with reflecting the ongoing performance of its remaining assets. Additionally, the Company believes that impairment losses are similar to gains and losses on disposition of assets. - Cumulative effect of a change in accounting principle - Infrequently, the Financial Accounting Standards Board promulgates new accounting standards that requires the consolidated statements of operations to reflect the cumulative effect of a change in accounting principle. FelCor excludes these one-time adjustments because they do not reflect actual performance of the Company for that period. FFO, EBITDA and Adjusted EBITDA should not be considered as alternatives to operating profit, cash flow from operations, or any other operating performance measure prescribed by GAAP. Neither should FFO, FFO per share, EBITDA or Adjusted EBITDA be considered as measures of FelCor's liquidity or indicative of funds available for our cash needs, including the Company's ability to make cash distributions. FFO per share does not measure, and should not be used as a measure of, amounts that accrue directly to the benefit of stockholders. -more- FelCor Lodging Trust Third Quarter 2004 Operating Results October 27, 2004 Page 9 RECONCILIATION OF NET LOSS TO EBITDA (in thousands)
THREE MONTHS ENDED NINE MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, ------------- ------------- 2004 2003 2004 2003 ---- ---- ---- ---- NET LOSS $ (36,985) $(125,917) $ (89,357) $(167,211) Depreciation from continuing operations 30,074 31,476 88,445 95,009 Depreciation from unconsolidated entities and discontinued operations 2,924 6,477 9,238 21,836 Minority interest in FelCor Lodging LP. (2,222) (7,015) (5,707) (10,065) Interest expense 35,893 42,793 118,073 124,560 Interest expense from unconsolidated entities and discontinued operations 1,170 1,362 3,895 6,419 Amortization expense 593 565 1,615 1,645 --------- --------- --------- --------- EBITDA 31,447 (50,259) 126,202 72,193 Charge off of deferred debt costs 1,920 -- 6,094 2,834 Loss (gain) on early extinguishment of debt 10,987 (351) 39,233 (1,611) Gain on swap termination -- -- (1,005) -- Lease termination expense from asset disposition -- -- 4,900 -- Loss (gain) on sale of assets (3,058) 446 (2,116) 776 Impairment 33,027 112,702 33,027 120,526 --------- --------- --------- --------- ADJUSTED EBITDA $ 74,323 $ 62,538 $ 206,335 $ 194,718 ========= ========= ========= =========
-more- FelCor Lodging Trust Third Quarter 2004 Operating Results October 27, 2004 Page 10 RECONCILIATION OF NET LOSS TO FFO (in thousands, except per share and unit data)
THREE MONTHS ENDED SEPTEMBER 30, -------------------------------- 2004 2003 ---- ---- PER SHARE PER SHARE DOLLARS SHARES AMOUNT DOLLARS SHARES AMOUNT ------- ------ ------ ------- ------ ------ NET LOSS ................................... $ (36,985) $(125,917) Preferred dividends ..................... (9,343) (6,727) --------- --------- NET LOSS APPLICABLE TO COMMON STOCKHOLDERS .......................... $ (46,328) 59,075 $ (0.78) $(132,644) 58,690 $ (2.26) Depreciation from continuing operations . 30,074 -- 0.51 31,476 -- 0.54 Depreciation from unconsolidated entities and discontinued operations . 2,924 -- 0.05 6,477 -- 0.11 Loss (gain) on sale of assets ........... (3,058) -- (0.05) 446 -- 0.01 Minority interest in FelCor LP. ......... (2,222) 2,903 (0.03) (7,015) 3,161 (0.04) --------- ------ -------- --------- ------ -------- FFO ........................................ $ (18,610) 61,978 $ (0.30) $(101,260) 61,851 $ (1.64) ========= ====== ======== ========= ====== ========

NINE MONTHS ENDED SEPTEMBER 30, ------------------------------- 2004 2003 ---- ---- PER SHARE PER SHARE DOLLARS SHARES AMOUNT DOLLARS SHARES AMOUNT ------- ------ ------ ------- ------ ------ NET LOSS ................................... $ (89,357) $(167,211) Preferred dividends ..................... (25,039) (20,181) --------- --------- NET LOSS APPLICABLE TO COMMON STOCKHOLDERS .......................... $(114,396) 58,993 $ (1.94) $(187,392) 58,609 $ (3.20) Depreciation from continuing operations . 88,445 -- 1.50 95,009 -- 1.62 Depreciation from unconsolidated entities and discontinued operations . 9,238 -- 0.16 21,836 -- 0.37 Loss (gain) on sale of assets ........... (2,116) -- (0.04) 776 -- 0.01 Minority interest in FelCor LP. ......... (5,707) 2,989 (0.08) (10,065) 3,234 (0.09) --------- ------ -------- --------- ------ -------- FFO ........................................ $ (24,536) 61,982 $ (0.40) $ (79,836) 61,843 $ (1.29) ========= ====== ======== ========= ====== ========
Consistent with SEC guidance, FFO has not been adjusted for the following amounts included in net loss (in thousands):
THREE MONTHS ENDED NINE MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30 ------------- ------------ 2004 2003 2004 2003 ---- ---- ---- ---- Charge off of deferred debt costs ............. $ 1,920 $ -- $ 6,094 $ 2,834 Loss (gain) on early extinguishment of debt ... 10,987 (351) 39,233 (1,611) Gain on swap termination ...................... -- -- (1,005) -- Lease termination cost from asset disposition . -- -- 4,900 -- Impairment .................................... 33,027 112,702 33,027 120,526 --------- --------- --------- --------- $ 45,934 $ 112,351 $ 82,249 $ 121,749 ========= ========= ========= ========= Per share amounts ............................. $ 0.74 $ 1.82 $ 1.33 $ 1.97 ========= ========= ========= =========
-more- FelCor Lodging Trust Third Quarter 2004 Operating Results October 27, 2004 Page 11 HOTEL OPERATING PROFIT AND OPERATING MARGIN (DOLLARS IN THOUSANDS) Hotel operating profit and operating margin are commonly used non-GAAP measures of performance that we utilize to measure the relative performance of our individual hotels and groups of hotels and give investors a more complete understanding of the operating results directly related to our hotels. We believe that hotel operating profit and operating margin are useful to investors by providing greater transparency with respect to significant measures used by management in its financial and operational decision-making. Hotel operating profit and operating margin are calculated as follows:
THREE MONTHS ENDED NINE MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, ------------- ------------- 2004 2003 2004 2003 --------- --------- --------- --------- Total revenue $ 304,975 $ 285,617 $ 906,963 $ 841,791 Retail space rental and other revenue (2,166) (221) (2,590) (838) --------- --------- --------- --------- Hotel revenue 302,809 285,396 904,373 840,953 Hotel operating expenses 243,064 230,818 722,854 668,958 --------- --------- --------- --------- Hotel operating profit $ 59,745 $ 54,578 $ 181,519 $ 171,995 ========= ========= ========= ========= Operating margin 19.7% 19.1% 20.1% 20.5%

THREE MONTHS NINE MONTHS ENDED SEPTEMBER 30, ENDED SEPTEMBER 30, ------------------------- ----------------------- 2004 2003 2004 2003 Reconciliation of total operating expenses to hotel operating expenses: Total operating expenses ............................ $ 276,929 $ 265,593 $ 822,868 $ 774,426 Corporate expenses ............................... (3,791) (3,299) (11,569) (10,459) Depreciation ..................................... (30,074) (31,476) (88,445) (95,009) --------- --------- --------- --------- Hotel operating expenses ............................ $ 243,064 $ 230,818 $ 722,854 $ 668,958 ========= ========= ========= =========
-more- FelCor Lodging Trust Third Quarter 2004 Operating Results October 27, 2004 Page 12 RECONCILIATION OF ESTIMATED NET INCOME (LOSS) TO ESTIMATED FFO AND EBITDA
FOURTH QUARTER 2004 GUIDANCE (B) -------------------------------- LOW GUIDANCE HIGH GUIDANCE ------------ ------------- PER SHARE PER SHARE DOLLARS AMOUNT(A) DOLLARS AMOUNT(A) ------- ------ ------- ------ NET LOSS APPLICABLE TO COMMON STOCKHOLDERS........................... $ (29) $(0.49) $ (27) $(0.45) Depreciation...................................................... 32 32 Minority interest in FelCor LP.................................... (1) (1) ------ ------ FFO.................................................................. $ 2 $ 0.04 $ 4 $ 0.07 ====== ====== NET LOSS APPLICABLE TO COMMON STOCKHOLDERS........................... $ (29) $ (27) Depreciation...................................................... 32 32 Minority interest in FelCor LP.................................... (1) (1) Interest expense.................................................. 36 36 Amortization expense.............................................. 1 1 Preferred dividends............................................... 10 10 ------ ------ EBITDA............................................................... $ 49 $ 51 Loss on extinguishment of debt..................................... 2 2 Charge off of debt costs........................................... 1 1 ------ ------ ADJUSTED EBITDA...................................................... $ 52 $ 54 ====== ======
(a) Weighted average shares are 59.1 million. Adding minority interest and unvested restricted stock of 3.2 million shares to weighted average shares, provides the weighted average shares and units of 62.3 million used to compute FFO per share. (b) Included in Net Loss and FFO guidance are the following (in millions):
FOURTH QUARTER 2004 ------------------- PER SHARE DOLLARS AMOUNT ------- ------ Loss on extinguishment of debt...... $2 Charge off of debt costs............ 1 --- Total............................ $3 $0.04 == =====
-more- FelCor Lodging Trust Third Quarter 2004 Operating Results October 27, 2004 Page 13 RECONCILIATION OF ESTIMATED NET INCOME (LOSS) TO ESTIMATED FFO AND EBITDA (continued)
FULL YEAR 2004 GUIDANCE(B) -------------------------- LOW GUIDANCE HIGH GUIDANCE ------------ ------------- PER SHARE PER SHARE DOLLARS AMOUNT(A) DOLLARS AMOUNT (A) ------- ------ ------- ---------- NET LOSS APPLICABLE TO COMMON STOCKHOLDERS....... $(143) $(2.42) $ (141) $(2.38) Depreciation.................................. 130 130 Gain from sales of assets..................... (2) (2) Minority interest in FelCor LP................ (7) (7) ------ ------ FFO.............................................. $ (22) $(0.35) $ (20) $(0.32) ====== ====== NET LOSS APPLICABLE TO COMMON STOCKHOLDERS....... $(143) $(141) Depreciation.................................. 130 130 Minority interest in FelCor LP................ (7) (7) Interest expense.............................. 158 158 Amortization expense.......................... 2 2 Preferred dividends........................... 35 35 ------ ------ EBITDA........................................... $ 175 $ 177 Loss on extinguishment of debt................ 42 42 Charge off of debt costs...................... 6 6 Gain on swap termination...................... (1) (1) Impairment losses............................. 33 33 Lease termination............................. 5 5 Gain on sale of assets (2) (2) ------ ------ ADJUSTED EBITDA $ 258 $ 260 ====== ======
(a) Weighted average shares are 59.1 million. Adding minority interest and unvested restricted stock of 3.2 million shares to weighted average shares, provides the weighted average shares and units of 62.3 million used to compute FFO per share. (b) Included in Net Loss and FFO guidance are the following (in millions):
FULL YEAR 2004 -------------- PER SHARE DOLLARS AMOUNT ------- ------ Loss on extinguishment of debt........................ $42 Charge off of debt costs.............................. 6 Gain on swap termination.............................. (1) Impairment losses..................................... 33 Lease termination..................................... 5 --- Total.............................................. $85 $1.36 === =====
-more- FelCor Lodging Trust Third Quarter 2004 Operating Results October 27, 2004 Page 14 SELECTED BALANCE SHEET DATA (in thousands)
SEPTEMBER 30, 2004 DECEMBER 31, 2003 ------------------ ----------------- Investment in hotels, included in continuing operations ... $ 3,875,531 $ 3,989,964 Accumulated depreciation .................................. (917,682) (886,168) ----------- ----------- $ 2,957,849 $ 3,103,796 =========== =========== Cash and cash equivalents ................................. $ 154,109 $ 231,885 Total assets .............................................. $ 3,431,191 $ 3,590,893 Debt ...................................................... $ 1,828,261 $ 2,037,355 Total stockholders' equity ................................ $ 1,347,167 $ 1,296,272
### EX-99.2 3 d19476exv99w2.txt SUPPLEMENTAL INFORMATION EXHIBIT 99.2 - -------------------------------------------------------------------------------- (FELCOR LOGO) FELCOR LODGING TRUST INCORPORATED SUPPLEMENTAL INFORMATION THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2004 Date of Issuance October 27, 2004 All dollar amounts shown in this report are in U.S. dollars unless otherwise noted. This Supplemental Information is neither an offer to sell nor a solicitation to buy any securities of FelCor. Any offers to sell or solicitations to buy any securities of FelCor shall be made only by means of a prospectus. FelCor Lodging Trust Incorporated Supplemental Information Three and Nine Months Ended September 30, 2004 - -------------------------------------------------------------------------------- TABLE OF CONTENTS
PAGE ---- CORPORATE DATA About the Company 3 Board of Directors and Executive Officers 4 Equity Research Coverage 5 FINANCIAL HIGHLIGHTS Supplemental Financial Data 6 Consolidated Statements of Operations 7 Discontinued Operations 8 Non-GAAP Financial Measures 9 Reconciliation of Net Loss to EBITDA 10 Reconciliation of Net Loss to FFO 11 Hotel Operating Profit 12 Hotel Operating Expense Composition 12 Debt Summary 13 PORTFOLIO DATA Portfolio Distribution 15 Detailed Operating Statistics by Brand 16 Detailed Operating Statistics for FelCor's Top Markets 17 Other Performance Statistics 18 Hotel Portfolio Information 19 Hotel Portfolio Listing 22
This supplement contains registered trademarks owned or licensed by companies other than us, which may include, but are not limited to, Candlewood Suites(R), Courtyard by Marriott(R), Crowne Plaza(R), Disneyland(R), Doubletree(R), Doubletree Guest Suites(R), Embassy Suites Hotels(R), Fairfield Inn(R), Four Points(R) by Sheraton, Hampton Inn(R), Harvey Hotel(R), Harvey Suites(R), Hilton(R), Hilton Grand Vacations Company(R), Hilton Suites(R), Holiday Inn(R), Holiday Inn & Suites(R), Holiday Inn Express(R), Holiday Inn Express & Suites(R), Holiday Inn Select(R), Homewood Suites(R) by Hilton, InterContinental(R), Priority Club(R), Sheraton(R), Sheraton Suites(R), St. Regis(R), Staybridge Suites(R), The Luxury Collection(R), W(R), Walt Disney World(R), Worlds of Fun(R), Westin(R), and Wyndham(R). With the exception of historical information, the matters discussed in this supplement include "forward looking statements" within the meaning of the federal securities laws. Forward looking statements are not guarantees of future performance. Numerous risks and uncertainties, and the occurrence of future events, may cause actual results to differ materially from those currently anticipated. General economic conditions, including the anticipated continuation of the current economic recovery, the impact of U.S. military involvement in the Middle East and elsewhere, future acts of terrorism, the impact on the travel industry of increased security precautions, the availability of capital, the ability to effect sales of non-strategic hotels at anticipated prices, and numerous other factors may affect future results, performance and achievements. Certain of these risks and uncertainties are described in greater detail in our filings with the Securities and Exchange Commission. Although we believe our current expectations to be based upon reasonable assumptions, we can give no assurance that our expectations will be attained or that actual results will not differ materially. 2 FelCor Lodging Trust Incorporated Supplemental Information Three and Nine Months Ended September 30, 2004 - -------------------------------------------------------------------------------- CORPORATE DATA ABOUT THE COMPANY In 1994, FelCor Lodging Trust Incorporated went public as a real estate investment trust (REIT) with six hotels and a market capitalization of $120 million. At September 30, 2004, FelCor was the nation's second largest lodging REIT and the owner of the largest number of full service, all-suite hotels in the U.S. FelCor's portfolio was comprised of 149 consolidated hotels, including 143 hotels in continuing operations and six hotels that were "held for sale" and included in discontinued operations. For the 143 hotels included in continuing operations, the operating revenues and expenses are reflected in FelCor's consolidated statements of operations because of our ownership of the operating lessees of these hotels. FelCor also owned 50 percent joint venture interests in the operating lessees of four hotels whose operations are accounted for using the equity method. FelCor owned 70 full service, all-suite hotels, and was the largest owner of Embassy Suites Hotels and independently owned Doubletree Guest Suites hotels. FelCor's portfolio also included 70 hotels in the upscale and full service segments. The Company's hotels were located in 32 states and Canada. FelCor had a market capitalization of approximately $3.0 billion at September 30, 2004. STRATEGY FelCor's hotels are generally managed by the brand owners such as Hilton Hotels Corporation, InterContinental Hotels Group, and Starwood Hotels & Resorts. FelCor is competitively positioned to deliver superior long-term stockholder returns through its strong management team, diversified upscale and full-service hotels, and strategic brand manager alliances. STOCK AND DEBT RATINGS
SENIOR UNSECURED DEBT PREFERRED STOCK --------------------- --------------- ~~Moody's B1 B3 Standard & Poors B- CCC~~
STOCK EXCHANGE LISTING Common Stock (NYSE: FCH) $1.95 Series A Cumulative Convertible Preferred Stock (NYSE: FCHPRA) 9% Series B Cumulative Redeemable Preferred Stock (NYSE: FCHPRB) FISCAL YEAR END December 31 NUMBER OF EMPLOYEES 66 CORPORATE HEADQUARTERS 545 E. John Carpenter Frwy., Suite 1300 Irving, TX 75062 (972) 444-4900 INVESTOR RELATIONS CONTACT MEDIA CONTACT Stephen A. Schafer Monica L. Hildebrand Vice President of Investor Relations Vice President of Communications (972) 444-4912 (972) 444-4917 sschafer@felcor.com mhildebrand@felcor.com INFORMATION REQUEST information@felcor.com 3 FelCor Lodging Trust Incorporated Supplemental Information Three and Nine Months Ended September 30, 2004 - -------------------------------------------------------------------------------- BOARD OF DIRECTORS Donald J. McNamara, Chairman of the Board Principal, The Hampstead Group Thomas J. Corcoran, Jr. President and Chief Executive Officer, FelCor Lodging Trust Incorporated Melinda J. Bush, C.H.A. Chairman and Chief Executive Officer, HRW Holdings, LLC Richard S. Ellwood President, R.S. Ellwood and Co., Inc. Richard O. Jacobson Chairman of the Board, Jacobson Warehouse Company, Inc. Charles A. Ledsinger, Jr. President and Chief Executive Officer, Choice Hotels International Robert H. Lutz, Jr. President, RL Investments, Inc. Robert A. Mathewson President, RGC, Inc. Michael D. Rose Chairman, Gaylord Entertainment Company EXECUTIVE OFFICERS Thomas J. Corcoran, Jr., President and Chief Executive Officer Richard A. Smith, Executive Vice President and Chief Financial Officer * Michael A. DeNicola, Executive Vice President and Chief Investment Officer Lawrence D. Robinson, Executive Vice President, General Counsel and Secretary Jack Eslick, Senior Vice President, Director of Asset Management Lester C. Johnson, Senior Vice President, Controller and Principal Accounting Officer June C. McCutchen, Senior Vice President, Director of Design and Construction Larry J. Mundy, Senior Vice President, Director of Business Initiatives and Assistant General Counsel Andrew J. Welch, Senior Vice President and Treasurer * Employment begins November 15, 2004 4 FelCor Lodging Trust Incorporated Supplemental Information Three and Nine Months Ended September 30, 2004 - -------------------------------------------------------------------------------- EQUITY RESEARCH COVERAGE
FIRM ANALYST TELEPHONE - ---- ------- --------- A.G. Edwards & Sons Arthur L. Havener (314) 955-3588 Bear Stearns Mark Abramson (212) 272-4305 Calyon Securities Bryan A. Maher (212) 408-5649 Deutsche Bank Marc J. Falcone (212) 469-7417 Friedman, Billings, Ramsey, & Co. David Loeb (703) 469-1289 Green Street Advisors John Arabia (949) 640-8780 JPMorgan Harry C. Curtis (212) 622-6610 Legg Mason Rod F. Petrik (410) 454-4131 Merrill Lynch David W. Anders (212) 449-2739 Prudential James W. Sullivan (212) 778-2515 Smith Barney Citigroup Michael J. Rietbrock (212) 816-7777 UBS William B. Truelove (212) 713-3098 Wachovia Securities Jeffrey J. Donnelly (617) 603-4262
5 FelCor Lodging Trust Incorporated Supplemental Information Three and Nine Months Ended September 30, 2004 - -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS SUPPLEMENTAL FINANCIAL DATA (IN THOUSANDS, EXCEPT PER SHARE INFORMATION, RATIOS AND PERCENTAGES)
SEPTEMBER 30, DECEMBER 31, TOTAL ENTERPRISE VALUE 2004 2003 - ---------------------- ---- ---- Common shares outstanding 59,666 59,120 Units outstanding 2,789 3,034 ----------- ----------- Combined shares and units outstanding 62,455 62,154 Common stock price at end of period $ 11.31 $ 11.08 ----------- ----------- Common equity capitalization $ 706,366 $ 688,666 Series A preferred stock 309,362 149,512 Series B preferred stock 169,395 169,395 Consolidated debt 1,828,261 2,037,355 Minority interest share of consolidated debt (30,600) (25,153) Pro rata share of unconsolidated debt(c) 104,324 106,899 Cash and cash equivalents (154,109) (231,885) ----------- ----------- Total enterprise value(TEV) $ 2,932,999 $ 2,894,789 =========== =========== TEV per room(a) $ 75 $ 69 Pro rata rooms owned 39,034 42,107 DIVIDENDS PER SHARE Dividends declared (quarter ended): Common $ -- $ -- Series A preferred stock 0.4875 0.4875 Series B preferred stock (depository shares) 0.5625 0.5625 SELECTED BALANCE SHEET DATA Investment in hotels, at cost(b) $ 4,126,641 $ 4,234,732 Total cash and cash equivalents 154,109 231,885 Total assets 3,431,191 3,590,893 Total debt 1,828,261 2,037,355 Total stockholders' equity 1,347,167 1,296,272 Total stockholders equity less preferred equity 868,410 977,365 Book value per common share outstanding 14.55 16.53
(a) Based on pro rata ownership. (b) Investment in hotels, at cost, is defined as consolidated hotel book value (after impairment charges but before accumulated depreciation) plus our pro rata share of unconsolidated investment in hotels before accumulated depreciation. (c) Excludes our pro rata share of debt related to the construction of a residential condominium project in Myrtle Beach, South Carolina, at December 31, 2003. This debt was retired in September 2004. 6 FelCor Lodging Trust Incorporated Supplemental Information Three and Nine Months Ended September 30, 2004 - -------------------------------------------------------------------------------- CONSOLIDATED STATEMENTS OF OPERATIONS (IN THOUSANDS, EXCEPT PER SHARE DATA)
THREE MONTHS ENDED NINE MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, ------------- ------------- 2004 2003 2004 2003 ---- ---- ---- ---- Revenues: Hotel operating revenue: Room .......................................... $ 244,281 $ 231,579 $ 724,974 $ 674,542 Food and beverage ............................. 42,418 38,843 131,510 121,348 Other operating departments ................... 16,110 14,974 47,889 45,063 Retail space rental and other revenue ........... 2,166 221 2,590 838 --------- --------- --------- --------- Total revenues .......................... 304,975 285,617 906,963 841,791 --------- --------- --------- --------- Expenses: Hotel departmental expenses: Room .......................................... 66,787 62,142 194,478 174,788 Food and beverage ............................. 34,551 32,258 105,455 96,737 Other operating departments ................... 7,993 6,893 24,045 20,415 Other property related costs .................... 88,247 83,245 261,636 241,738 Management and franchise fees ................... 16,270 15,375 47,490 44,488 Taxes, insurance and lease expense .............. 29,216 30,905 89,750 90,792 Corporate expenses .............................. 3,791 3,299 11,569 10,459 Depreciation .................................... 30,074 31,476 88,445 95,009 --------- --------- --------- --------- Total operating expenses ................ 276,929 265,593 822,868 774,426 --------- --------- --------- --------- Operating income ................................... 28,046 20,024 84,095 67,365 Interest expense, net ........................... (35,348) (42,303) (116,210) (123,150) Impairment loss ................................. (28,498) (53,204) (28,498) (53,204) Hurricane loss .................................. (2,125) -- (2,125) -- Charge-off of deferred financing costs .......... (1,920) -- (6,094) (2,834) Loss on early extinguishment of debt ............ (10,987) -- (39,233) -- Gain on swap termination ........................ -- -- 1,005 -- --------- --------- --------- --------- Loss before equity in income from unconsolidated entities, minority interests and gain on sale of assets ........................ (50,832) (75,483) (107,060) (111,823) Equity in income from unconsolidated entities ... 12,019 1,674 15,692 2,252 Gain (loss) on sale of assets ................... 1,094 (47) 1,094 106 Minority interests .............................. 2,230 4,587 5,800 7,068 --------- --------- --------- --------- Loss from continuing operations .................... (35,489) (69,269) (84,474) (102,397) Discontinued operations ......................... (1,496) (56,648) (4,883) (64,814) --------- --------- --------- --------- Net loss ........................................... (36,985) (125,917) (89,357) (167,211) Preferred dividends ............................. (9,343) (6,727) (25,039) (20,181) --------- --------- --------- --------- Net loss applicable to common stockholders ......... $ (46,328) $(132,644) $(114,396) $(187,392) ========= ========= ========= ========= Basic and diluted per common share data: Net loss from continuing operations ............. $ (0.76) $ (1.29) $ (1.86) $ (2.09) ========= ========= ========= ========= Net loss ........................................ $ (0.78) $ (2.26) $ (1.94) $ (3.20) ========= ========= ========= ========= Weighted average common shares outstanding .............................. 59,075 58,690 58,993 58,609 ========= ========= ========= =========
7 FelCor Lodging Trust Incorporated Supplemental Information Three and Nine Months Ended September 30, 2004 - -------------------------------------------------------------------------------- DISCONTINUED OPERATIONS (IN THOUSANDS) Included in discontinued operations are the results of operations of the 13 hotels disposed of in the first three quarters of 2004, six hotels designated as held for sale at September 30, 2004, and 16 hotels sold in 2003. Condensed financial information for the hotels included in discontinued operations is as follows:
THREE MONTHS ENDED NINE MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, ------------- ------------- 2004 2003 2004 2003 ---- ---- ---- ---- Hotel operating revenue ........................ $ 14,558 $ 39,972 $ 63,621 $ 119,700 Hotel operating expenses ....................... 14,660 40,082 61,431 120,703 --------- --------- --------- --------- Operating income ............................ (102) (110) 2,190 (1,003) Direct interest costs, net ..................... 7 20 12 (637) Gain on the early extinguishment of debt ....... -- 351 -- 1,611 Impairment ..................................... (4,529) (59,498) (4,529) (67,322) Lease termination expense from asset disposition -- -- (4,900) -- Gain (loss) on sale of assets .................. 3,058 (399) 2,116 (882) Minority interest .............................. 70 2,988 228 3,419 --------- --------- --------- --------- Loss from discontinued operations ........... $ (1,496) $ (56,648) $ (4,883) $ (64,814) ========= ========= ========= =========
8 FelCor Lodging Trust Incorporated Supplemental Information Three and Nine Months Ended September 30, 2004 - -------------------------------------------------------------------------------- NON-GAAP FINANCIAL MEASURES Historical cost accounting for real estate assets implicitly assumes that the value of real estate assets diminish predictably over time. Since real estate values instead have historically risen or fallen with market conditions, most industry investors consider supplemental measures of performance to be helpful in evaluating a real estate company's operations. Funds From Operations ("FFO"), Earnings Before Interest, Taxes, Depreciation, and Amortization ("EBITDA") are not measures and Adjusted EBITDA are not measures of operating performance under generally accepted accounting principles ("GAAP"). However, FelCor considers FFO, EBITDA and Adjusted EBITDA to be supplemental measures of a REIT's performance and should be considered along with, but not as an alternative to, net income as a measure of FelCor's operating performance. FFO and EBITDA and Adjusted EBITDA reflect additional ways of viewing FelCor's operations that the Company believes when viewed with its GAAP results and the reconciliations to the corresponding GAAP financial measures, provide a more complete understanding of factors and trends affecting its business than could be obtained absent this disclosure. Management strongly encourages investors to review the Company's financial information in its entirety and not to rely on a single financial measure. The White Paper on Funds From Operations approved by the Board of Governors of the National Association of Real Estate Investment Trusts, or NAREIT, defines FFO as net income or loss (computed in accordance with GAAP), excluding gains or losses from sales of property, plus depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. Adjustments for unconsolidated partnerships and joint ventures are calculated to reflect FFO on the same basis. FelCor computes FFO in accordance with standards established by NAREIT. This may not be comparable to FFO reported by other REITs that do not define the term in accordance with the current NAREIT definition, or that interpret the current NAREIT definition differently than FelCor does. EBITDA is a commonly used measure of performance in many industries. FelCor defines EBITDA as net income or loss (computed in accordance with GAAP) plus interest, income taxes, depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. Adjustments for unconsolidated partnership and joint ventures are calculated to reflect EBITDA on the same basis. FelCor's management and Board of Directors use Adjusted EBITDA to evaluate the performance of its hotels and to facilitate comparisons between the Company and other lodging REITs, hotel owners who are not REITs and other capital intensive companies. FelCor adjusts EBITDA when evaluating its performance because management believes that the exclusion of certain additional recurring and non-recurring items described below provides useful supplemental information to investors regarding its ongoing operating performance and that the presentation of Adjusted EBITDA when combined with GAAP net income, EBITDA and FFO is beneficial to an investor's better understanding of its operating performance. FelCor adjusts EBITDA for the following items to derive Adjusted EBITDA: - Gains and losses related to early extinguishment of debt and interest rate swaps - FelCor excludes gains and losses related to early extinguishment of debt and interest rate swaps because the Company believes that it represents an acceleration of interest expense or a reduction of interest expense and interest expense is excluded from EBITDA. - Gains or losses on disposition of assets - FelCor excludes the gains or losses on disposition of assets because the Company believes that including them in EBIDTA is not consistent with reflecting ongoing performance of its remaining assets. Additionally, the gain or loss on sale of depreciable assets represents either accelerated depreciation or too much depreciation in previous periods and depreciation is excluded from EBITDA. - Impairment losses - FelCor excludes the effect of impairment losses because the Company believes that including these in EBITDA is not consistent with reflecting the ongoing performance of its remaining assets. Additionally, the Company believes that impairment charges are similar to gains and losses on disposition. - Cumulative effect of a change in accounting principle - Infrequently, the Financial Accounting Standards Board promulgates new accounting standards that requires the consolidated statements of operations to reflect the cumulative effect of a change in accounting principle. FelCor excludes these one-time adjustments because they do not reflect actual performance of the Company for that period. FFO, EBITDA and Adjusted EBITDA should not be considered as alternatives to operating profit, cash flow from operations, or any other operating performance measure prescribed by GAAP. Neither should FFO, FFO per share, EBITDA or Adjusted EBITDA be considered as measures of FelCor's liquidity or indicative of funds available for our cash needs, including the Company's ability to make cash distributions. FFO per share does not measure, and should not be used as a measure of, amounts that accrue directly to the benefit of stockholders. 9 FelCor Lodging Trust Incorporated Supplemental Information Three and Nine Months Ended September 30, 2004 - -------------------------------------------------------------------------------- RECONCILIATION OF NET LOSS TO EBITDA (IN THOUSANDS)
THREE MONTHS ENDED NINE MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, ------------- ------------- 2004 2003 2004 2003 ---- ---- ---- ---- NET LOSS....................................................... $(36,985) $(125,917) $ (89,357) $(167,211) Depreciation from continuing operations..................... 30,074 31,476 88,445 95,009 Depreciation from unconsolidated entities and discontinued operations................................ 2,924 6,477 9,238 21,836 Minority interest in FelCor Lodging LP...................... (2,222) (7,015) (5,707) (10,065) Interest expense............................................ 35,893 42,793 118,073 124,560 Interest expense from unconsolidated entities and discontinued operations................................ 1,170 1,362 3,895 6,419 Amortization expense........................................ 593 565 1,615 1,645 -------- ---------- --------- --------- EBITDA......................................................... 31,447 (50,259) 126,202 72,193 Charge off of deferred debt costs........................... 1,920 - 6,094 2,834 Loss (gain) on early extinguishment of debt................. 10,987 (351) 39,233 (1,611) Gain on swap termination.................................... - - (1,005) - Lease termination expense from asset disposition............ - - 4,900 - Loss (gain) on sale of assets............................... (3,058) 446 (2,116) 776 Impairment.................................................. 33,027 112,702 33,027 120,526 -------- ---------- --------- --------- ADJUSTED EBITDA................................................ $74,323 $ 62,538 $206,335 $194,718 ======== ========== ========= =========
10 FelCor Lodging Trust Incorporated Supplemental Information Three and Nine Months Ended September 30, 2004 - -------------------------------------------------------------------------------- RECONCILIATION OF NET LOSS TO FFO (IN THOUSANDS, EXCEPT PER SHARE DATA)
THREE MONTHS ENDED SEPTEMBER 30, -------------------------------- 2004 2003 ---- ---- PER SHARE PER SHARE DOLLARS SHARES AMOUNT DOLLARS SHARES AMOUNT ------- ------ ------ ------- ------ ------ NET LOSS........................................ $ (36,985) $(125,917) Preferred dividends.......................... (9,343) (6,727) --------- --------- NET LOSS APPLICABLE TO COMMON STOCKHOLDERS............................... $ (46,328) 59,075 $(0.78) $(132,644) 58,690 $(2.26) Depreciation from continuing operations...... 30,074 - 0.51 31,476 - 0.54 Depreciation from unconsolidated entities and discontinued operations...... 2,924 - 0.05 6,477 - 0.11 Loss (gain) on sale of assets................ (3,058) - (0.05) 446 - 0.01 Minority interest in FelCor LP............... (2,222) 2,903 (0.03) (7,015) 3,161 (0.04) --------- ------ ------ --------- ------ ------ FFO............................................. $ (18,610) 61,978 $(0.30) $(101,260) 61,851 $(1.64) ========= ====== ====== ========= ====== ======

NINE MONTHS ENDED SEPTEMBER 30, ------------------------------- 2004 2003 ---- ---- PER SHARE PER SHARE DOLLARS SHARES AMOUNT DOLLARS SHARES AMOUNT ------- ------ ------ ------- ------ ------ NET LOSS....................................... $ (89,357) $(167,211) Preferred dividends......................... (25,039) (20,181) --------- ---------- NET LOSS APPLICABLE TO COMMON STOCKHOLDERS.............................. $(114,396) 58,993 $(1.94) $(187,392) 58,609 $(3.20) Depreciation from continuing operations..... 88,445 - 1.50 95,009 - 1.62 Depreciation from unconsolidated entities and discontinued operations..... 9,238 - 0.16 21,836 - 0.37 Loss (gain) on sale of assets............... (2,116) - (0.04) 776 - 0.01 Minority interest in FelCor LP.............. (5,707) 2,989 (0.08) (10,065) 3,234 (0.09) --------- ------ ------ ---------- ------ ------ FFO............................................ $ (24,536) 61,982 $(0.40) $ (79,836) 61,843 $(1.29) ========= ====== ====== ========== ====== ======
Consistent with SEC guidance, FFO has not been adjusted for the following amounts included in net loss (in thousands, except per share amounts):
THREE MONTHS ENDED NINE MONTHS ENDED ------------------ ----------------- SEPTEMBER 30, SEPTEMBER 30 ------------- ------------ 2004 2003 2004 2003 ---- ---- ---- ---- Charge off of deferred debt costs.................................. $ 1,920 $ - $ 6,094 $ 2,834 Loss (gain) on early extinguishment of debt........................ 10,987 (351) 39,233 (1,611) Gain on swap termination........................................... - - (1,005) - Lease termination expense from asset disposition................... - - 4,900 - Impairment......................................................... 33,027 112,702 33,027 120,526 --------- ---------- -------- ---------- $45,934 $112,351 $82,249 $121,749 ========= ========== ======== ========== Per share amounts.................................................. $ 0.74 $ 1.82 $ 1.33 $ 1.97 ========= ========== ======== ==========
11 FelCor Lodging Trust Incorporated Supplemental Information Three and Nine Months Ended September 30, 2004 - -------------------------------------------------------------------------------- HOTEL OPERATING PROFIT AND OPERATING MARGIN (DOLLARS IN THOUSANDS) Hotel operating profit and operating margin are commonly used non-GAAP measures of performance that we utilize to measure the relative performance of our individual hotels and groups of hotels and give investors a more complete understanding of the operating results directly related to our hotels. We believe that hotel operating profit and operating margin are useful to investors by providing greater transparency with respect to significant measures used by management in its financial and operational decision-making. Hotel operating profit and operating margin are calculated as follows:
THREE MONTHS ENDED NINE MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, ------------- ------------- 2004 2003 2004 2003 ---- ---- ---- ---- Total revenue...................................................... $304,975 $285,617 $906,963 $841,791 Retail space rental and other revenue.............................. (2,166) (221) (2,590) (838) --------- -------- -------- -------- Hotel revenue...................................................... 302,809 285,396 904,373 840,953 Hotel operating expenses........................................... 243,064 230,818 722,854 668,958 --------- -------- -------- -------- Hotel operating profit............................................. $ 59,745 $ 54,578 $181,519 $171,995 ========= ======== ======== ======== Operating margin................................................... 19.7% 19.1% 20.1% 20.5% Corporate expenses................................................. 3,791 3,299 11,569 10,459 Corporate expenses as a percentage of total revenues............... 1.2% 1.2% 1.3% 1.2%
HOTEL OPERATING EXPENSE COMPOSITION (DOLLARS IN THOUSANDS)
THREE MONTHS ENDED SEPTEMBER 30, NINE MONTHS ENDED SEPTEMBER 30, -------------------------------- ------------------------------- 2004 2003 2004 2003 ---- ---- ---- ---- % OF % OF % OF % OF HOTEL HOTEL HOTEL HOTEL REVENUE REVENUE REVENUE REVENUE Hotel departmental expenses: ------- ------- ------- ------- Room................................. $ 66,787 22.1% $ 62,142 21.8% $194,478 21.5% $174,788 20.8% Food and beverage.................... 34,551 11.4 32,258 11.3 105,455 11.7 96,737 11.5 Other operating departments.......... 7,993 2.6 6,893 2.4 24,045 2.6 20,415 2.4 -------- ------ -------- ------ -------- ------ -------- ---- Hotel departmental expense......... 109,331 36.1 101,293 35.5 323,978 35.8 291,940 34.7 -------- ------ -------- ------ -------- ------ -------- ---- Other property related costs: Administrative and general........... 28,534 9.4 26,325 9.2 85,562 9.4 79,517 9.5 Marketing and advertising............ 25,452 8.4 24,616 8.6 77,854 8.6 71,894 8.5 Repairs and maintenance.............. 16,739 5.5 16,106 5.6 50,716 5.6 46,743 5.6 Energy............................... 17,522 5.8 16,198 5.7 47,504 5.3 43,584 5.2 Taxes, insurance and lease expense......................... 29,216 9.7 30,905 10.9 89,750 9.9 90,792 10.7 --------- ------- --------- ------ --------- ------- --------- ---- Total other property related costs.. 117,463 38.8 114,150 40.0 351,386 38.8 332,530 39.5 Management and franchise fees........... 16,270 5.4 15,375 5.4 47,490 5.3 44,488 5.3 --------- ------- --------- ------- --------- ------- -------- ----- Hotel operating expenses................ $243,064 80.3% $230,818 80.9% $722,854 79.9% $668,958 79.5% ======== ===== ======== ===== ======== ===== ======== =====

THREE MONTHS NINE MONTHS ENDED SEPTEMBER 30, ENDED SEPTEMBER 30, ------------------- ------------------- 2004 2003 2004 2003 ---- ---- ---- ---- Supplemental information: Compensation and benefits expense (included in hotel operating expenses)............................................ $ 99,515 $ 93,415 $296,629 $271,695 ========= ========= ======== ======== Reconciliation of total operating expenses to hotel operating expenses: Total operating expenses.......................................... $276,929 $265,593 $822,868 $774,426 Corporate expenses............................................. (3,791) (3,299) (11,569) (10,459) Depreciation................................................... (30,074) (31,476) (88,445) (95,009) --------- --------- --------- --------- Hotel operating expenses.......................................... $243,064 $230,818 $722,854 $668,958 ======== ======== ======== ========
12 FelCor Lodging Trust Incorporated Supplemental Information Three and Nine Months Ended September 30, 2004 - -------------------------------------------------------------------------------- DEBT SUMMARY (DOLLARS IN THOUSANDS)
DEBT OUTSTANDING - ---------------- ENCUMBERED INTEREST RATE AT MATURITY CONSOLIDATED HOTELS SEPTEMBER 30, 2004 DATE DEBT ------ ------------------ ---- ---- Promissory note none 3.67% June 2016 $ 650 Senior unsecured term notes none 7.63 Oct. 2007 122,193 Senior unsecured term notes none 10.00 Sept. 2008 95,533 Senior unsecured term notes none 9.00 June 2011 298,346 Senior unsecured term notes none 5.84 June 2011 290,000 ------ ----------- Total unsecured debt 7.77 806,722 ------ ----------- Mortgage debt 15 hotels 5.27(b) July 2009-2014 193,378 Mortgage debt 1 hotel 7.23 Sept. 2005 10,753 Mortgage debt (a) 10 hotels 4.13 May 2006 145,536 Mortgage debt 15 hotels 7.24 Nov. 2007 128,055 Mortgage debt 1 hotel 4.84 August 2008 15,500 Mortgage debt 7 hotels 7.54 April 2009 90,969 Mortgage debt 6 hotels 7.55 June 2009 68,468 Mortgage debt 8 hotels 8.70 May 2010 176,200 Mortgage debt 7 hotels 8.73 May 2010 136,488 Mortgage debt 8 hotels 7.48 April 2011 49,898 Other 1 hotel 9.17 August 2011 6,294 --------- ------ ----------- Total secured debt 79 hotels 6.91 1,021,539 ========= ------ ----------- Total 7.29% $1,828,261 ===== ==========
(a) This debt has two, one-year extension options. (b) Represents the weighted average of fixed-to-floating interest rate swaps at six month LIBOR plus 211 basis points for $87 million and a fixed rate of 6.52% for $107 million. Fixed interest rate debt to total debt 70.7% Weighted average maturity of debt 5.4 years Secured debt to total assets 29.8% At September 30, 2004, future scheduled debt principal payments are as follows (in thousands):
SECURED UNSECURED YEAR DEBT DEBT TOTAL ---- ---- ---- ----- 2004 $ 5,782 $ - $ 5,782 2005 31,718 - 31,718 2006 160,173(a) - 160,173 2007 137,867 125,000 262,867 2008 33,598 95,971 129,569 2009 and thereafter 652,766 590,650 1,243,416 Premium/(discount) (365) (4,899) (5,264) ---------- -------- ---------- Total debt $1,021,539 $806,722 $1,828,261 ========== ======== ==========
(a) Included is a $146 million non-recourse mortgage loan maturing in 2006, that has two, one-year extension options. 13 FelCor Lodging Trust Incorporated Supplemental Information Three and Nine Months Ended September 30, 2004 - -------------------------------------------------------------------------------- DEBT SUMMARY (CONTINUED) At September 30, 2004, we had unconsolidated 50 percent investments in ventures that owned an aggregate of 20 hotels. These ventures had approximately $209 million of non-recourse mortgage debt, all of which is secured by hotel assets. Our pro rata share of this non-recourse debt is $104 million. FINANCING TRANSACTIONS IN 2004: In March 2004, we elected to terminate our unsecured line of credit arrangement, which is expected to result in a 2004 cost savings of $0.4 million. In April 2004, we completed the sale of 4,600,000 shares of our $1.95 Series A Cumulative Convertible Preferred Stock. The shares were sold at a price of $23.79 per share, which included dividends of $0.51 per share accrued through April 5, 2004, resulting in net proceeds of approximately $105 million. In June 2004, we redeemed the full $175 million of our senior notes maturing in October 2004, and through September 30, 2004, we retired $504 million of our 9-1/2% senior notes maturing in 2008. In May 2004, we issued $175 million of Senior Floating Rate Debt maturing in 2011, at an interest rate of LIBOR plus 4.25% and in July we issued an additional $115 million of Senior Floating Debt under the same terms. In May 2004, we borrowed $169 million of our secured facility at an average interest rate of 5.01%. In July 2004, we received additional funding of $25 million on this facility. In August 2004, we completed the sale of 2,300,000 shares of our $1.95 Series A Cumulative Convertible Preferred Stock. The shares were sold at a price of $23.22 per share, which included accrued dividends of $0.28 per share through August 22, 2004, resulting in net proceeds of approximately $52 million. 14 FelCor Lodging Trust Incorporated Supplemental Information Three and Nine Months Ended September 30, 2004 - -------------------------------------------------------------------------------- PORTFOLIO DATA PORTFOLIO DISTRIBUTION AT SEPTEMBER 30, 2004 (143 CONSOLIDATED HOTELS INCLUDED IN CONTINUING OPERATIONS, SAME STORE BASIS)
% OF % OF 2003 HOTEL BRAND HOTELS ROOMS TOTAL ROOMS OPERATING PROFIT(b) - ----- ------ ----- ----------- ---------------- Embassy Suites 56 14,279 36% 50% Holiday Inn-branded 39 12,769 32 24 Sheraton-branded 10 3,269 8 9 Crowne Plaza 12 4,025 10 6 Doubletree-branded 10 2,206 6 6 Other 16 3,432 8 5 % OF % OF 2003 HOTEL TOP MARKETS HOTELS ROOMS TOTAL ROOMS OPERATING PROFIT - ----------- ------ ----- ----------- ---------------- Atlanta 12 3,514 9% 8% Dallas 13 3,789 9 5 Los Angeles Area 6 1,492 4 5 Boca Raton/Ft. Lauderdale 4 1,118 3 4 New Orleans 2 746 2 4 San Francisco Bay Area 8 2,690 7 4 Orlando 6 2,219 6 4 Minneapolis 4 955 2 3 San Diego 1 600 2 3 Phoenix 4 1,016 3 3 Houston 8 1,969 5 3 Chicago 4 1,239 3 3 Philadelphia 3 1,174 3 3 % OF % OF 2003 HOTEL TOP FOUR STATES HOTELS ROOMS TOTAL ROOMS OPERATING PROFIT - --------------- ------ ----- ----------- ---------------- California 19 5,593 14% 16% Texas 35 8,284 21 14 Florida 16 5,343 13 11 Georgia 14 3,868 10 9 % OF % OF 2003 HOTEL LOCATION HOTELS ROOMS TOTAL ROOMS OPERATING PROFIT - -------- ------ ----- ----------- ---------------- Suburban 66 16,818 42% 40% Urban 31 9,628 24 27 Airport 28 8,509 21 21 Resort 11 3,605 9 10 Highway 7 1,420 4 2 % OF % OF 2003 HOTEL SEGMENT HOTELS ROOMS TOTAL ROOMS OPERATING PROFIT - ------- ------ ----- ----------- ---------------- Upscale all-suite 69 17,145 43% 58% Full service 40 13,004 33 24 Upscale 25 8,263 21 17 Limited service 9 1,568 3 1 % OF % OF 2003 HOTEL HOTELS ROOMS TOTAL ROOMS OPERATING PROFIT ------ ----- ----------- ---------------- Core Hotels 127 35,734 89% 96% Non-Strategic Hotels(a) 16 4,246 11 4
(a) Excludes six hotels that met the "held for sale" accounting requirements, and were included in discontinued operations at September 30, 2004. (b) Hotel operating profit is more fully described on page 12 of this supplement. 15 FelCor Lodging Trust Incorporated Supplemental Information Three and Nine Months Ended September 30, 2004 - -------------------------------------------------------------------------------- DETAILED OPERATING STATISTICS BY BRAND (143 CONSOLIDATED HOTELS INCLUDED IN CONTINUING OPERATIONS, SAME STORE BASIS)
OCCUPANCY (%) ------------- THREE MONTHS ENDED SEPTEMBER 30, NINE MONTHS ENDED SEPTEMBER 30, -------------------------------- ------------------------------- 2004 2003 % VARIANCE 2004 2003 % VARIANCE ---- ---- ---------- ---- ---- ---------- Embassy Suites Hotels 71.1 69.6 2.2 70.9 68.5 3.4 Holiday Inn-branded hotels 68.1 66.5 2.3 66.1 64.2 3.0 Sheraton-branded hotels 64.2 61.5 4.3 64.8 60.3 7.5 Crowne Plaza hotels 66.6 63.5 4.9 64.5 61.2 5.3 Doubletree-branded hotels 66.3 68.2 (2.8) 68.3 67.0 1.9 Other hotels 57.3 59.4 (3.5) 58.6 57.7 1.6 Total hotels 67.7 66.4 1.9 67.0 64.7 3.5 ADR ($) ------- THREE MONTHS ENDED SEPTEMBER 30, NINE MONTHS ENDED SEPTEMBER 30, -------------------------------- ------------------------------- 2004 2003 % VARIANCE 2004 2003 % VARIANCE ---- ---- ---------- ---- ---- ---------- Embassy Suites Hotels 115.84 113.65 1.9 117.56 116.27 1.1 Holiday Inn-branded hotels 80.54 79.39 1.5 81.11 80.09 1.3 Sheraton-branded hotels 97.70 91.91 6.3 97.36 94.79 2.7 Crowne Plaza hotels 94.02 91.52 2.7 93.22 93.23 0.0 Doubletree-branded hotels 102.75 96.92 6.0 103.90 101.17 2.7 Other hotels 85.20 81.06 5.1 84.04 81.16 3.5 Total hotels 98.00 95.45 2.7 98.83 97.42 1.4 REVPAR ($) ---------- THREE MONTHS ENDED SEPTEMBER 30, NINE MONTHS ENDED SEPTEMBER 30, -------------------------------- ------------------------------- 2004 2003 % VARIANCE 2004 2003 % VARIANCE ---- ---- ---------- ---- ---- ---------- Embassy Suites Hotels 82.35 79.07 4.1 83.30 79.66 4.6 Holiday Inn-branded hotels 54.82 52.81 3.8 53.64 51.45 4.3 Sheraton-branded hotels 62.70 56.56 10.9 63.05 57.12 10.4 Crowne Plaza hotels 62.58 58.08 7.7 60.10 57.06 5.3 Doubletree-branded hotels 68.11 66.12 3.0 70.98 67.82 4.7 Other hotels 48.81 48.15 1.4 49.29 46.83 5.3 Total hotels 66.30 63.36 4.6 66.24 63.06 5.0
16 FelCor Lodging Trust Incorporated Supplemental Information Three and Nine Months Ended September 30, 2004 - -------------------------------------------------------------------------------- DETAILED OPERATING STATISTICS FOR FELCOR'S TOP MARKETS (143 CONSOLIDATED HOTELS INCLUDED IN CONTINUING OPERATIONS, SAME STORE BASIS)
OCCUPANCY (%) ------------- THREE MONTHS ENDED SEPTEMBER 30, NINE MONTHS ENDED SEPTEMBER 30, -------------------------------- ------------------------------- 2004 2003 % VARIANCE 2004 2003 % VARIANCE ---- ---- ---------- ---- ---- ---------- Atlanta 73.1 69.9 4.5 68.9 66.7 3.4 Dallas 48.0 47.2 1.8 50.6 47.9 5.7 Los Angeles Area 71.2 72.7 (2.1) 70.2 71.5 (1.9) Boca Raton/Ft. Lauderdale 75.9 65.5 15.8 79.9 73.4 8.9 New Orleans 55.7 60.0 (7.2) 65.7 65.0 1.1 San Francisco Bay Area 73.1 71.7 1.9 67.5 65.7 2.7 Orlando 78.5 69.3 13.3 77.9 69.8 11.6 Minneapolis 77.8 75.1 3.6 70.0 66.3 5.5 San Diego 83.8 88.2 (5.0) 84.5 81.1 4.2 Phoenix 56.4 55.0 2.5 67.6 67.3 0.5 Houston 61.5 66.1 (6.9) 67.6 65.6 3.0 Chicago 73.2 75.3 (2.7) 70.6 68.7 2.7 Philadelphia 71.5 65.7 8.8 66.9 61.8 8.1 ADR ($) ------- THREE MONTHS ENDED SEPTEMBER 30, NINE MONTHS ENDED SEPTEMBER 30, -------------------------------- ------------------------------- 2004 2003 % VARIANCE 2004 2003 % VARIANCE ---- ---- ---------- ---- ---- ---------- Atlanta 85.76 83.31 2.9 86.80 85.52 1.5 Dallas 89.90 85.50 5.1 89.63 88.08 1.8 Los Angeles Area 115.59 105.86 9.2 111.43 103.10 8.1 Boca Raton/Ft. Lauderdale 93.98 89.34 5.2 114.48 114.87 (0.3) New Orleans 101.44 106.25 (4.5) 133.29 131.24 1.6 San Francisco Bay Area 115.70 113.90 1.6 112.89 113.11 (0.2) Orlando 70.50 65.98 6.8 76.39 74.25 2.9 Minneapolis 129.79 125.02 3.8 124.89 123.01 1.5 San Diego 119.73 114.55 4.5 119.72 117.36 2.0 Phoenix 84.84 80.18 5.8 104.53 98.33 6.3 Houston 66.99 67.72 (1.1) 70.30 70.52 (0.3) Chicago 109.05 108.78 0.2 104.51 108.52 (3.7) Philadelphia 108.22 105.55 2.5 105.27 105.27 0.3 REVPAR ($) ---------- THREE MONTHS ENDED SEPTEMBER30, NINE MONTHS ENDED SEPTEMBER 30, ------------------------------- ------------------------------- 2004 2003 % VARIANCE 2004 2003 % VARIANCE ---- ---- ---------- ---- ---- ---------- Atlanta 62.67 58.26 7.6 59.85 57.03 5.0 Dallas 43.19 40.33 7.1 45.34 42.18 7.5 Los Angeles Area 82.28 76.99 6.9 78.17 73.71 6.1 Boca Raton/Ft. Lauderdale 71.33 58.54 21.9 91.52 84.35 8.5 New Orleans 56.47 63.74 (11.4) 87.64 85.37 2.7 San Francisco Bay Area 84.54 81.68 3.5 76.15 74.33 2.4 Orlando 55.33 45.71 21.0 59.52 51.83 14.8 Minneapolis 100.93 93.86 7.5 87.38 81.58 7.1 San Diego 100.38 101.07 (0.7) 101.18 95.18 6.3 Phoenix 47.85 44.12 8.4 70.70 66.20 6.8 Houston 41.22 44.76 (7.9) 47.53 46.29 2.7 Chicago 79.84 81.90 (2.5) 73.82 74.60 (1.1) Philadelphia 77.40 69.35 11.6 70.57 65.08 8.4
17 FelCor Lodging Trust Incorporated Supplemental Information Three and Nine Months Ended September 30, 2004 - -------------------------------------------------------------------------------- OTHER PERFORMANCE STATISTICS (CONSOLIDATED HOTELS INCLUDED IN CONTINUING OPERATIONS, FOR PERIOD PRESENTED)
VARIANCE TO PRIOR YEAR - ---------------------- OCCUPANCY ADR REVPAR % VARIANCE % VARIANCE % VARIANCE ---------- ---------- ---------- 2002: First Quarter (11.2) (7.8) (18.2) Second Quarter (5.1) (6.3) (11.1) Third Quarter 2.4 (4.8) (2.4) Fourth Quarter 4.4 (1.3) 3.1 Year 2002 (2.8) (5.5) (8.1) 2003: First Quarter (1.2) (4.1) (5.3) Second Quarter (3.0) (4.8) (7.6) Third Quarter 0.3 (2.7) (2.4) Fourth Quarter 0.6 (2.3) (1.7) Year 2003 (0.6) (3.8) (4.4) 2004: January 3.4 (1.2) 2.2 February 2.3 (1.3) 0.9 March 8.7 0.2 9.0 First Quarter 2004 5.2 (0.7) 4.4 April 8.0 (0.1) 7.9 May 5.0 1.5 6.6 June 3.8 3.5 7.4 Second Quarter 2004 5.5 1.7 7.3 July 2.3 2.1 4.4 August (1.3) 3.1 1.8 September 5.1 2.7 8.0 Third Quarter 2004 1.9 2.7 4.6 October (through October 21, 2004) 4.2 3.2 7.6
18 FelCor Lodging Trust Incorporated Supplemental Information Three and Nine Months Ended September 30, 2004 - -------------------------------------------------------------------------------- HOTEL PORTFOLIO INFORMATION PRO RATA SHARE OF ROOMS OWNED
ROOM COUNT AT HOTELS SEPTEMBER 30, 2004 -------- ------------------ Consolidated hotels in continuing operations 143 39,980 Hotels held for sale 6 1,887 Unconsolidated hotel operations 5 761 ---- -------- Total hotels owned 154 42,628 50% and 51% joint ventures 28 (3,046) 60% joint ventures 2 (390) 90% joint ventures 6 (148) 97% joint venture 1 (10) -------- Total joint venture owned rooms (3,594) -------- Pro rata share of rooms owned 39,034 ========
CAPITAL EXPENDITURES (DOLLARS IN THOUSANDS)
THREE MONTHS ENDED NINE MONTHS ENDED YEAR ENDED SEPTEMBER 30, 2004 SEPTEMBER 30, 2004 DECEMBER 31, 2003 ------------------ ------------------ ----------------- Consolidated hotels: Improvements and additions to hotels $ 26,872 $ 63,776 $ 64,045 % of total revenue 8.8% 7.0% 5.3% Unconsolidated hotels (pro rata share): Improvements and additions to hotels $ 1,885 $ 4,033 $ 4,291 % of total revenue 5.1% 3.6% 3.0%
19 FelCor Lodging Trust Incorporated Supplemental Information Three and Nine Months Ended September 30, 2004 - -------------------------------------------------------------------------------- HOTEL PORTFOLIO INFORMATION NON-STRATEGIC HOTELS At September 30, 2004, we included in continuing operations 16 hotels identified as non-strategic. The composition, by brand, of the 16 non-strategic hotels is as follows: Holiday Inn-branded (12), Doubletree branded (2) and Embassy Suites (2). These hotels are expected to be sold within the next 15 months depending on the individual hotel, market conditions, and other factors. Operating statistics for our consolidated portfolio of 143 hotels included in continuing operations:
THREE MONTHS ENDED SEPTEMBER 30, NINE MONTHS ENDED SEPTEMBER 30, ----------------------------------- -------------------------------------- 2004 2003 % VARIANCE 2004 2003 % VARIANCE ---- ---- ---------- ---- ---- ---------- CONSOLIDATED IN CONTINUING OPERATIONS (143 HOTELS) Occupancy (%) 67.7 66.4 1.9 67.0 64.7 3.5 ADR ($) 98.00 95.45 2.7 98.83 97.42 1.4 RevPAR ($) 66.30 63.36 4.6 66.24 63.06 5.0 NON-STRATEGIC HOTELS (16 HOTELS) Occupancy (%) 62.8 61.3 2.5 59.7 57.5 4.0 ADR ($) 71.18 71.12 0.1 70.46 71.11 (0.9) RevPAR ($) 44.73 43.59 2.6 42.09 40.87 3.0 CORE HOTELS (127 HOTELS) Occupancy (%) 68.2 67.0 1.8 67.9 65.6 3.5 ADR ($) 100.93 98.09 2.9 101.80 100.16 1.6 RevPAR ($) 68.86 65.71 4.8 69.10 65.69 5.2
For the nine months ended September 30, 2004, the operating margins for the Core Hotels were 31.7%, while the operating margins for the Non-Strategic Hotels were 21.3%. PORTFOLIO CHANGES IN 2004 ACQUISITIONS: - - In March 2004, we purchased the 132-room Santa Monica Holiday Inn for $27 million. This hotel has a premier location across from the Santa Monica Pier and the Santa Monica beaches and will continue to be operated as a full service upscale hotel. This hotel is classified as an upscale hotel by STR because of the high room rates charged in this market. HOTEL SALES:
Total Gross Sales Date Price Per Quarter Property Sold Rooms (in millions) -------- ---- ----- ------------- Hotels sold during three months ended March 31, 2004: Plano Holiday Inn................................................ Feb 2004 160 Jackson (Downtown) Crowne Plaza.................................. Feb 2004 354 Omaha (Southwest) Hampton Inn.................................... Mar 2004 131 Houston (Medical Center) Crowne Plaza............................ Mar 2004 297 --- Total Sales in First Quarter 2004 942 $ 30 Hotels sold during three months ended June 30, 2004: St. Louis - Westport - Holiday Inn............................... Apr 2004 316 Odessa Holiday Inn Express & Suites.............................. Apr 2004 186 Odessa - Centre Holiday Inn & Suites............................. Apr 2004 245 --- Total Sales in Second Quarter 2004 747 $ 12
20 FelCor Lodging Trust Incorporated Supplemental Information Three and Nine Months Ended September 30, 2004 - -------------------------------------------------------------------------------- HOTEL PORTFOLIO INFORMATION
Total Gross Sales Date Price Per Quarter Property Sold Rooms (in millions) -------- ---- ----- ------------- Hotels sold during three months ended September 30, 2004: Beaumont - I-10 (Midtown) Holiday Inn............................ Jul 2004 190 Midland - Country Villa Holiday Inn.............................. Aug 2004 250 Avon - Beaver Creek Lodge (Independent).......................... Aug 2004 72 Omaha - Southwest Holiday Inn Express & Suites................... Aug 2004 78 Albuquerque - Mountain View (at I-40 & I-25) Holiday Inn......... Sep 2004 360 ----- Total Sales in Third Quarter 2004 950 $ 28 Hotels sold to date during the three months ended December 31, 2004: Dallas - DFW International Airport - North Harvey Hotel.......... Oct 2004 506 Omaha Homewood Suites............................................ Oct 2004 107 Dallas - North Dallas Addison (Near the Galleria) Crowne Plaza................................................... Oct 2004 429 ----- Total Sales in Fourth Quarter-to-Date in 2004 1,042 $ 57 ----- ----- TOTAL SALES YEAR-TO-DATE IN 2004 3,681 $ 127 ===== =====
OTHER DISPOSITION: - - On June 30, 2004, we transferred our leasehold interest in the San Francisco Holiday Inn Select Downtown & Spa to the lessor as part of the settlement of a dispute with the lessor. PORTFOLIO CHANGES IN 2003 DISPOSITIONS: - - Through December 31, 2003, we sold or otherwise disposed of 16 non-strategic hotels. Disposition proceeds from the 16 non-strategic hotels and two parking garages sold during 2003 totaled approximately $125 million. CONVERSIONS: - - In March, we converted an independent, all-suite hotel in Dallas to a Staybridge Suites hotel. - - In April, we completed the conversion of the 385-room Hilton Myrtle Beach Resort, following a $15 million renovation of the former Wyndham-affiliated property. OTHER: - - In June 2003, we began consolidating the operations of eight hotels that had previously been accounted for by the equity method. 21 FelCor Lodging Trust Incorporated Supplemental Information Three and Nine Months Ended September 30, 2004 - -------------------------------------------------------------------------------- HOTEL PORTFOLIO LISTING (AS OF SEPTEMBER 30, 2004)
STATE ROOMS % OWNED(A) BRAND ----- ----- ---------- ----- CONSOLIDATED CONTINUING OPERATIONS - ---------------------------------- Birmingham(b) AL 242 Embassy Suites Montgomery - East I-85(b) AL 210 Holiday Inn Phoenix - Biltmore(b) AZ 232 Embassy Suites Phoenix Crescent Hotel(b) AZ 342 Sheraton Phoenix Scottsdale/Downtown(b) AZ 218 51% Fairfield Inn Phoenix Tempe(b) AZ 224 Embassy Suites Dana Point - Doheny Beach CA 195 Doubletree Guest Suites Irvine - Orange County Airport (Newport Beach) CA 335 Crowne Plaza Los Angeles - Anaheim (Located near Disneyland Park)(b) CA 222 Embassy Suites Los Angeles - Covina/I-10(b) CA 259 50% Embassy Suites Los Angeles - El Segundo - International Airport - South CA 349 97% Embassy Suites Milpitas - Silicon Valley(b) CA 266 Embassy Suites Milpitas - San Jose-North (Milpitas - Silicon Valley) CA 305 Crowne Plaza Napa Valley(b) CA 205 Embassy Suites Oxnard - Mandalay Beach Resort & Conference Center(b) CA 248 Embassy Suites Palm Desert - Palm Desert Resort(b) CA 198 Embassy Suites Pleasanton (San Ramon Area) CA 244 Crowne Plaza San Diego - On the Bay CA 600 Holiday Inn San Francisco - Burlingame Airport CA 340 Embassy Suites San Francisco - South San Francisco Airport(b) CA 312 Embassy Suites San Francisco - Fisherman's Wharf CA 585 Holiday Inn San Francisco - Union Square CA 403 Crowne Plaza San Rafael - Marin County/Conference Center(b) CA 235 50% Embassy Suites Santa Barbara - Goleta(b) CA 160 Holiday Inn Santa Monica - Beach at the Pier CA 132 Holiday Inn Denver - Aurora(b) CO 248 90% Doubletree Stamford CT 380 Holiday Inn Select Wilmington(b) DE 244 90% Doubletree Boca Raton(b) FL 263 Embassy Suites Cocoa Beach - Oceanfront FL 500 Holiday Inn Deerfield Beach - Boca Raton/Deerfield Beach Resort(b) FL 244 Embassy Suites Ft. Lauderdale - 17th Street(b) FL 358 Embassy Suites Ft. Lauderdale - Cypress Creek(b) FL 253 Sheraton Suites Jacksonville - Baymeadows(b) FL 277 Embassy Suites Miami - International Airport(b) FL 316 Embassy Suites Miami - International Airport (LeJeune Center) FL 304 Crowne Plaza Orlando - International Airport(b) FL 288 Holiday Inn Select Orlando - International Drive - Resort(b) FL 651 Holiday Inn Orlando - International Drive South/Convention Center(b) FL 244 Embassy Suites Orlando - Nikki Bird (Maingate - Walt Disney World Area) FL 530 Holiday Inn
- -------------------------------------------------------------------------------- 22 FelCor Lodging Trust Incorporated Supplemental Information Three and Nine Months Ended September 30, 2004 - -------------------------------------------------------------------------------- HOTEL PORTFOLIO LISTING (AS OF SEPTEMBER 30, 2004)
STATE ROOMS % OWNED(A) BRAND ----- ----- ---------- ----- Orlando - (North) FL 277 Embassy Suites Orlando - Walt Disney World Resort(b) FL 229 Doubletree Guest Suites Tampa - Busch Gardens FL 406 Holiday Inn Tampa - On Tampa Bay(b) FL 203 Doubletree Guest Suites Atlanta - Airport(b) GA 378 Crowne Plaza Atlanta - Airport(b) GA 233 Embassy Suites Atlanta - Airport-North(b) GA 493 Holiday Inn Atlanta - Buckhead(b) GA 317 Embassy Suites Atlanta - Downtown(b) GA 211 51% Courtyard by Marriott Atlanta - Downtown(b) GA 242 51% Fairfield Inn Atlanta - Galleria(b) GA 278 Sheraton Suites Atlanta - Gateway - Atlanta Airport GA 395 Sheraton Atlanta - Perimeter - Dunwoody(b) GA 250 Holiday Inn Select Atlanta - Perimeter Center(b) GA 241 50% Embassy Suites Atlanta - Powers Ferry(b) GA 296 Crowne Plaza Atlanta - South (I-75 & US 41) (b) GA 180 Holiday Inn Brunswick(b) GA 130 Embassy Suites Columbus - North (I-185 at Peachtree Mall) GA 224 Holiday Inn Davenport IA 288 Holiday Inn Chicago - The Allerton IL 443 Crowne Plaza Chicago - Lombard/Oak Brook(b) IL 262 50% Embassy Suites Chicago - Northshore/Deerfield (Northbrook) (b) IL 237 Embassy Suites Chicago O'Hare Airport(b) IL 297 Sheraton Suites Moline - Airport IL 216 Holiday Inn Moline - Airport Area IL 110 Holiday Inn Express Indianapolis - North(b) IN 221 50% Embassy Suites Kansas City - Overland Park(b) KS 199 50% Embassy Suites Lexington(b) KY 155 Sheraton Suites Lexington - Lexington Green(b) KY 174 Hilton Suites Baton Rouge(b) LA 223 Embassy Suites New Orleans(b) LA 372 Embassy Suites New Orleans - French Quarter(b) LA 374 Holiday Inn Boston - Government Center MA 303 Holiday Inn Select Boston - Marlborough(b) MA 229 Embassy Suites Baltimore - BWI Airport(b) MD 251 90% Embassy Suites Troy - North (Auburn Hills) (b) MI 251 90% Embassy Suites Bloomington(b) MN 219 Embassy Suites Minneapolis - Airport(b) MN 310 Embassy Suites Minneapolis - Downtown MN 216 Embassy Suites St. Paul - Downtown(b) MN 210 Embassy Suites Kansas City - NE I-435 North (At Worlds of Fun)(b) MO 165 Holiday Inn Kansas City - Plaza(b) MO 266 50% Embassy Suites St. Louis - Downtown(b) MO 297 Embassy Suites Jackson - North MS 222 Holiday Inn & Suites Olive Branch Whispering Woods Hotel and Conference Center MS 181 Independent Charlotte(b) NC 274 50% Embassy Suites Charlotte SouthPark NC 208 Doubletree Guest Suites
- -------------------------------------------------------------------------------- 23 FelCor Lodging Trust Incorporated Supplemental Information Three and Nine Months Ended September 30, 2004 - -------------------------------------------------------------------------------- HOTEL PORTFOLIO LISTING (AS OF SEPTEMBER 30, 2004)
STATE ROOMS % OWNED(A) BRAND ----- ----- ---------- ----- Raleigh(b) NC 203 Doubletree Guest Suites Raleigh - Crabtree(b) NC 225 50% Embassy Suites Omaha - Central NE 187 Doubletree Guest Suites Omaha - Central NE 129 Hampton Inn Omaha - Central (I-80) NE 383 Holiday Inn Omaha - Old Mill(b) NE 223 Crowne Plaza Parsippany(b) NJ 274 50% Embassy Suites Piscataway - Somerset(b) NJ 224 Embassy Suites Secaucus - Meadowlands(b) NJ 261 50% Embassy Suites Cleveland - Downtown OH 268 Embassy Suites Tulsa - I-44(b) OK 244 Embassy Suites Philadelphia - Center City PA 445 Crowne Plaza Philadelphia - Historic District(b) PA 364 Holiday Inn Philadelphia - Society Hill(b) PA 365 Sheraton Pittsburgh - At University Center (Oakland)(b) PA 251 Holiday Inn Select Charleston - Mills House (Historic Downtown)(b) SC 214 Holiday Inn Myrtle Beach - At Kingston Plantation SC 255 Embassy Suites Myrtle Beach Resort SC 385 Hilton Knoxville - Central At Papermill Road(b) TN 240 Holiday Inn Nashville - Airport/Opryland Area TN 296 Embassy Suites Nashville - Opryland/Airport (Briley Parkway) TN 382 Holiday Inn Select Amarillo - I-40 TX 248 Holiday Inn Austin(b) TX 189 90% Doubletree Guest Suites Austin - North(b) TX 260 50% Embassy Suites Austin - Town Lake (Downtown Area)(b) TX 320 Holiday Inn Corpus Christi(b) TX 150 Embassy Suites Dallas TX 295 Crowne Plaza Suites Dallas - At Campbell Centre TX 300 90% Doubletree Dallas - Dallas Park Central TX 114 Staybridge Suites Dallas - DFW International Airport-North(b) TX 164 Harvey Suites Dallas - DFW International Airport-South(b) TX 305 Embassy Suites Dallas - Love Field(b) TX 248 Embassy Suites Dallas - Market Center(b) TX 354 Crowne Plaza Dallas - Market Center(b) TX 244 Embassy Suites Dallas - Park Central TX 438 60% Sheraton Dallas - Park Central TX 536 60% Westin Dallas - Park Central Area(b) TX 279 Embassy Suites Dallas - Regal Row(b) TX 203 51% Fairfield Inn Dallas - West End/Convention Center TX 309 Hampton Inn Houston - Greenway Plaza Area(b) TX 355 Holiday Inn Select Houston - I-10 East(b) TX 160 51% Fairfield Inn Houston - I-10 East(b) TX 90 51% Hampton Inn Houston - I-10 West & Hwy. 6 (Park 10 Area) TX 349 Holiday Inn Select Houston - Intercontinental Airport(b) TX 415 Holiday Inn Houston - Medical Center(b) TX 284 Holiday Inn & Suites Houston - Near the Galleria(b) TX 209 51% Courtyard by Marriott Houston - Near the Galleria(b) TX 107 51% Fairfield Inn
- -------------------------------------------------------------------------------- 24 FelCor Lodging Trust Incorporated Supplemental Information Three and Nine Months Ended September 30, 2004 - -------------------------------------------------------------------------------- HOTEL PORTFOLIO LISTING (AS OF SEPTEMBER 30, 2004)
STATE ROOMS % OWNED(A) BRAND ----- ----- ---------- ----- San Antonio - Downtown (Market Square) TX 315 Holiday Inn San Antonio - International Airport(b) TX 261 50% Embassy Suites San Antonio - International Airport(b) TX 397 Holiday Inn Select San Antonio - N.W. I-10(b) TX 216 50% Embassy Suites Waco - I-35 TX 170 Holiday Inn Burlington Hotel & Conference Center(b) VT 309 Sheraton Vienna - At Tysons Corner(b) VA 437 50% Sheraton Canada Toronto - Airport Ontario 445 Holiday Inn Select Toronto - Yorkdale Ontario 370 Holiday Inn HOTELS INCLUDED IN DISCONTINUED OPERATIONS Hartford - Downtown CT 350 Crowne Plaza Omaha(c) NE 107 Homewood Suites Secaucus - Meadowlands NJ 304 Crowne Plaza Dallas - DFW International Airport-North(c) TX 506 Harvey Hotel Dallas - North Dallas Addison (Near the Galleria)(c) TX 429 Crowne Plaza Salt Lake City - Airport UT 191 Holiday Inn UNCONSOLIDATED OPERATIONS Hays(b) KS 114 50% Hampton Inn Hays(b) KS 191 50% Holiday Inn Salina(b) KS 192 50% Holiday Inn Salina - I-70(b) KS 93 50% Holiday Inn Express & Suites New Orleans - Chateau LeMoyne (In French Quarter/Historic Area)(b) LA 171 50% Holiday Inn
- -------------------------------------------------------------------------------- (a) We own 100% of the real estate interests unless otherwise noted. (b) This hotel is encumbered by mortgage debt or capital lease obligation. (c) This hotel was sold subsequent to September 30, 2004. 25 ~~-----END PRIVACY-ENHANCED MESSAGE-----~~

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	FELCOR LODGING TRUST INCORPORATED
Date: October 27, 2004	By:	/s/ Lester C. Johnson
		Name:	Lester C. Johnson
		Title:	Senior Vice President and Controller