e8vk

-----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, KPjqKkzzYqZ9Zx8h9gHI2yC09eT2ne++R/LcV2kUolGZAjAixW57xUK4rali24nJ 26o4he7oiUumE9pI8ErYDw== 0000950134-05-002497.txt : 20050210 0000950134-05-002497.hdr.sgml : 20050210 20050209215424 ACCESSION NUMBER: 0000950134-05-002497 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20050209 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20050210 DATE AS OF CHANGE: 20050209 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: 05590430 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 LODGING TRUST INC DATE OF NAME CHANGE: 19980810 FORMER COMPANY: FORMER CONFORMED NAME: FELCOR SUITE HOTELS INC DATE OF NAME CHANGE: 19940523 8-K 1 d22354e8vk.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)		February 9, 2005

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))

TABLE OF CONTENTS


SIGNATURES
INDEX TO EXHIBITS
Press Release
Supplemental Information

Section 2 – Financial Information

Item 2.02 Results of Operations and Financial Condition.

On February 9, 2005, FelCor Lodging Trust Incorporated issued a press release announcing its results of operations for the three months and year ended December 31, 2004, and published its Supplemental Information for the three months and year ended December 31, 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 February 9, 2005, announcing its results of operations for the three months and year ended December 31, 2004.

99.2		Supplemental Information for the three months and year ended December 31, 2004, published by FelCor Lodging Trust Incorporated on February 9, 2005, 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: February 9, 2005	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 February 9, 2005, announcing its results of operations for the three months and year ended December 31, 2004.

99.2		Supplemental Information for the three months and year ended December 31, 2004, published by FelCor Lodging Trust Incorporated on February 9, 2005, providing additional corporate data, financial highlights and portfolio statistical data.

EX-99.1 2 d22354exv99w1.htm PRESS RELEASE exv99w1

Exhibit 99.1

For Immediate Release:

FELCOR REPORTS 2004 RESULTS
n ’04 is done and we made $1.01

IRVING, Texas...February 9, 2005 - FelCor Lodging Trust Incorporated (NYSE: FCH), today reported operating results for the fourth quarter and year ended December 31, 2004. For the fourth quarter ended December 31, 2004, our RevPAR increased 3.9 percent, with ADR growth accounting for 74 percent of that increase, Adjusted EBITDA increased 11.7 percent, and Adjusted FFO per share totaled $0.08, consistent with the low end of our previous guidance. During the quarter, we incurred a net loss applicable to common shareholders of $0.35 per share, compared to a loss of $2.55 per share for the same period of 2003, and FFO per share was a loss of $0.10, compared to a loss of $2.06 for last year.

HIGHLIGHTS

Fourth Quarter 2004

•   Adjusted EBITDA grew from $47 million in 2003 to $53 million in 2004, and Same-Store EBITDA increased from $45 million in 2003 to $52 million in 2004, a 15.1% increase.

•   Adjusted FFO was $5 million for the quarter, a $9 million improvement from the loss of $4 million in the prior year period.

•   Net loss applicable to common shareholders was $21 million for the quarter, compared to a net loss of $150 million for the same period in 2003, and FFO was a loss of $6 million, compared to a loss of $128 million in the same period of 2003.

•   RevPAR for the quarter was $59.94, as compared to $57.70 in the same period of 2003, and ADR was $99.28 in the current quarter, compared to $96.45 last year.

•   Hotel operating profit increased to $50 million for the quarter, compared to $43 million in the prior year, an increase of 14.7%. Hotel operating profit margin during the quarter was 17.5%, an increase of 141 basis points over the 16.1% margin of the prior year.

•   We sold five hotels, resulting in gross proceeds of $86 million.

Full Year 2004

For the full year 2004, our RevPAR increased 4.9 percent, with ADR improvement accounting for 35 percent of the increase, Adjusted EBITDA increased 7.1 percent, and Adjusted FFO per share totaled $1.01, consistent with the low end of our previous guidance. During the year, we incurred a net loss applicable to common shareholders of $2.29 per share, compared to a per share loss of $5.75 in 2003, and FFO per share was a loss of $0.49, as compared to a per share loss of $3.35 in 2003.

• Adjusted EBITDA for the year was $259 million, compared to $242 million in 2003, and Same-Store EBITDA was $242 million in 2004, as compared to $227 million in 2003, a 6.5% improvement.

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FelCor Lodging Trust 2004 Operating Results
February 9, 2005
Page 2

•   Adjusted FFO was $63 million, compared to $38 million in 2003.

•   Net loss applicable to common shareholders was $135 million, compared to a net loss of $337 million in 2003, and FFO was a loss of $31 million, compared to a loss of $207 million last year.

•   RevPAR was $64.91, as compared to $61.89 in 2003, and ADR was $99.07, as compared to $97.38 in 2003.

•   Hotel operating profit increased to $231 million, from $215 million in the prior year, an increase of 7.4%. Hotel operating margin improved to 19.5%, from 19.4% in the prior year.

•   A labor lockout in San Francisco adversely affected hotel operating profit by an estimated $2 million, and major renovations took room nights out of service and reduced hotel operating profit by an estimated additional $2 million.

•   The Margate condominium tower at Kingston Plantation in Myrtle Beach, S.C., was completed and sold, realizing a gain of approximately $12 million.

•   We spent approximately $102 million on capital improvements during 2004.

•   We sold 17 hotels, resulting in aggregate gross proceeds of $157 million and a net gain of $19 million, and terminated the lease on one hotel.

•   We issued $524 million in debt, and $160 million in preferred equity.

•   We prepaid $775 million of debt.

•   We incurred impairment charges of $38 million.

“In 2004, we exceeded our expectations, with RevPAR, Adjusted EBITDA and Adjusted FFO exceeding the targets set forth at the beginning of the year. In accordance with our strategic plan, we completed $680 million in financings, redeemed early all $600 million of our 10 percent interest rate debt due 2008, and disposed of 18 non-strategic hotels,” said Thomas J. Corcoran, Jr., FelCor’s President and CEO.

Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”), Adjusted EBITDA, Same-Store EBITDA, Funds From Operations (“FFO”), Adjusted FFO, hotel operating profit and hotel operating margin are all non-GAAP financial measures. See “Non-GAAP Financial Measures” beginning on page 9 for a reconciliation of each of these measures to our net loss and for information regarding the use, limitations and importance of these non-GAAP financial measures .

DISCUSSION

Fourth Quarter 2004

RevPAR. This is our fourth consecutive quarter of revenue per available room (“RevPAR”) increases over the prior year period. During the quarter, occupancy grew by only 0.9 percent, while average daily rate (“ADR”) grew by 2.9 percent. Average daily rate has been the principal component of RevPAR growth beginning with the third quarter of 2004. We anticipate that the majority of near-term RevPAR growth will come from increases in ADR, which should help to improve hotel operating profit margins in future periods.

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FelCor Lodging Trust 2004 Operating Results
February 9, 2005
Page 3

Hotel Operating Profit and Margins. Hotel operating profit for our hotels included in continuing operations increased 14.7 percent over the same period last year, primarily as a result of the increase in RevPAR. As a percentage of revenues, both energy expenses and administrative and general expenses increased over the prior year. The 141 basis point improvement in hotel operating margin over last year was achieved largely as the result of reductions in property taxes and insurance expense. We are placing increased focus on working with our management companies to improve operating margins at our hotels above those anticipated in 2005.

Net Loss and EBITDA. Our net loss applicable to common shareholders and EBITDA for the fourth quarter of 2004 included the following items, aggregating to a gain of $6 million, or $0.11 per share:

•   $5 million ($0.08 per share) of impairment charges related to four non-strategic hotels, which had previously been written down to our then estimated fair value;

•   $6 million ($0.09 per share) of costs associated with the early retirement of $96 million of Senior Notes; and

•   $17 million ($0.29 per share) net gain on the sale of non-strategic hotels.

Included in the prior year fourth quarter net loss and EBITDA was a net asset impairment charge of $123 million, or $1.99 per share.

FFO. Our fourth quarter 2004 FFO included the following items, aggregating to $11 million, or $0.18 per share:

• $5 million ($0.08 per share) of asset impairment charges; and

• $6 million ($0.09 per share) of costs associated with the early retirement of debt.

Included in prior year fourth quarter FFO was a net asset impairment charge of $123 million, or $1.99 per share.

Other Events Affecting Operations. During the third quarter, our Holiday Inn^® hotel in Cocoa Beach, Fla., suffered major hurricane damage and was reopened in January 2005. We recorded approximately $2 million in anticipated business interruption insurance proceeds during the quarter, which are expected to cover the loss of income during the period the hotel was closed.

A labor dispute in San Francisco, which resulted in a lockout at two of our hotels, adversely affected fourth quarter RevPAR by 0.7 percent and hotel operating profits by $2 million. The lockout ended in November and contract negotiations are ongoing.

We spent $39 million in capital improvements during the fourth quarter. Major renovations took room nights out of service during the fourth quarter resulting in an estimated reduction of hotel operating profit of approximately $1 million.

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FelCor Lodging Trust 2004 Operating Results
February 9, 2005
Page 4

Full Year 2004

RevPAR. The 4.9 percent increase in RevPAR resulted from a 1.7 percent increase in ADR and a 3.1 percent increase in occupancy during the year. This is the first annual RevPAR increase that we have experienced since 2000.

Hotel Operating Profit and Margins. Hotel operating profit for our hotels included in continuing operations increased 7.4 percent, primarily as a result of the increase in RevPAR. The hotel operating margins were 19.5 percent, a six basis point increase compared to 2003. The increase in hotel operating margins is attributed to decreases in property taxes and insurance expense, which were largely offset by increases in labor related costs.

Net Loss and EBITDA . Our net loss applicable to common shareholders and EBITDA for the full year 2004 included the following items, aggregating to a loss of $74 million, or $1.17 per share:

•   $38 million ($0.62 per share) of asset impairment charges related to non-strategic hotels;

•   $50 million ($0.80 per share) of costs associated with the early retirement of $775 million of Senior Notes;

•   $5 million ($0.08 per share) of lease termination cost; and

•   $19 million ($0.33 per share) gain on sale of non-strategic hotels.

Included in the prior year net loss and EBITDA was a net asset impairment charge of $244 million, or $3.94 per share.

FFO. Our full year 2004 FFO included the following items, aggregating to a loss of $93 million, or $1.50 per share:

•   $38 million ($0.62 per share) of asset impairment charges;

•   $50 million ($0.80 per share) of costs associated with the early retirement of debt; and

•   $5 million ($0.08 per share) of lease termination expense.

Included in prior year FFO was a net asset impairment charge of $244 million ($3.94 per share) and $2 million ($0.03 per share) of costs associated with the early retirement of debt.

Other Events Affecting Operations. Included in operating results for the year are $2 million ($0.03 per share) of hurricane losses sustained in the third quarter at 13 of our hotels and a gain of $12 million from the development and sale of the 251-unit Margate condominium tower at the Kingston Plantation in Myrtle Beach, S.C.

A labor lockout in San Francisco adversely affected our RevPAR by 0.2 percent and resulted in a decrease in hotel operating profit by an estimated $2 million.

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FelCor Lodging Trust 2004 Operating Results
February 9, 2005
Page 5

January 2005 RevPAR

Our January total portfolio RevPAR increased 7.2 percent, with ADR increasing 4.9 percent and occupancy increasing 2.2 percent, compared to January 2004. The month of January is our 14^th consecutive month of RevPAR increases. Our ADR has increased for three consecutive quarters, with each quarter becoming a more meaningful share of the RevPAR growth.

“We anticipate continued positive RevPAR growth. With ADR becoming a larger percentage of the RevPAR improvement, we are focused on improving margins in 2005 over our current guidance,” said Richard A. Smith, FelCor’s Executive Vice President and Chief Financial Officer.

Capital Structure

At December 31, 2004, we had $1.77 billion of debt outstanding, with a weighted average life of five years, a weighted average cost of 7.4 percent, and approximately $119 million in cash and cash equivalents. At December 31, 2003, we had $2.04 billion of debt outstanding with a weighted average cost of 7.8 percent. We have no significant remaining debt maturities (other than those that may be extended at our option, subject to the satisfaction of certain contingencies) until 2007, at which time $125 million of our Senior Notes mature.

2004 Transactions

•   We sold 17 non-strategic hotels for gross proceeds of approximately $157 million and terminated the lease on one hotel at a cost of $5 million;

•   We acquired the 132-room Holiday Inn hotel in Santa Monica, Calif., for $27 million;

•   We completed the development and sale of the 251-unit Margate condominium tower at the Kingston Plantation in Myrtle Beach, S.C., at a gain of $12 million;

•   We retired $600 million of Senior Notes paying 10% interest that were scheduled to mature in 2008;

•   We retired early $175 million of Senior Notes due in October 2004;

•   We issued $290 million of floating rate Senior Notes due 2011;

•   We issued $234 million in mortgage debt;

•   We issued $160 million of convertible preferred stock; and

•   We spent approximately $102 million in our ongoing capital plan.

We currently have 18 remaining hotels identified for sale, with expected gross proceeds of approximately $155 million, substantially all of which are expected to be sold over the next 18 months.

2005 GUIDANCE

“We are encouraged by the ADR and RevPAR trends in our portfolio, and our 2005 guidance reflects continued improvement. While RevPAR will be somewhat impacted by our capital expenditures to a number of our largest hotels during 2005, we are pleased with the expected Same-Store EBITDA growth rate of 1.8 times the RevPAR growth,” said Mr. Smith. “We are encouraged by the anticipated 17 percent EBITDA gain in 2005 from our hotels that completed renovations last year. Notwithstanding the impact of renovations in 2005, our non-sale hotel portfolio is forecasted to grow RevPAR in excess of six percent over prior year. Further, the improvements in operating performance will lead to the establishment of a new dividend policy this year,” he added.

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FelCor Lodging Trust 2004 Operating Results
February 9, 2005
Page 6

We are currently under contract to sell our Embassy Suites Hotel^® in downtown St. Louis, Mo., for $38 million, which is expected to close in March 2005. We expect to realize a gain of approximately $6 million in the first quarter from the sale of this hotel. This hotel had $2.8 million of EBITDA in 2004, of which only $0.1 million is included in our 2005 guidance, and its sale will affect future Same-Store EBITDA comparisons. No other assets sales or capital transactions are assumed in the preparation of our guidance.

We currently anticipate that for the First Quarter 2005:

•   Hotel portfolio RevPAR will increase approximately 4.0% to 5.0%, with 75% of the increase coming from ADR improvements;

•   EBITDA will be between $59 to $61 million;

•   Hotel operating margins will be approximately 18.9% to 19.3%, or an increase of 10 to 50 basis points over first quarter 2004;

•   Total interest expense will be $36 million;

•   FFO per share will be within the range of $0.19 to $0.22; and

•   Net loss will be between $11 and $13 million or a loss per share of $0.19 to $0.22.

We anticipate that for the Full Year 2005:

•   Hotel portfolio RevPAR will increase approximately 5.0% to 6.0%, with 75% of the increase coming from ADR improvements;

•   EBITDA will be between $259 and $265 million, an increase of 8% to 11% on a same-store basis;

•   Hotel operating margins will be between 19.9% to 20.2%, an increase of 40 to 70 basis points;

•   Total interest expense will be $146 million;

•   FFO per share will be within the range of $1.11 to $1.21;

•   Ending cash balance will be approximately $112 million; and

•   Net loss will be between $29 and $35 million or a loss per share of $0.49 to $0.59.

Our anticipated capital expenditures in 2005 will be approximately $100 million, with approximately 42 percent in routine capital replacement, 16 percent for new bedding and technology standards, and 42 percent for major upgrades. We expect to undertake major upgrade projects at 38 hotels during 2005.

“We are allocating our 2005 capital to upgrade those hotels that will drive the most revenue and profit. As we execute our 2005 capital improvement plan, we expect to see a high return on that investment through accelerated RevPAR growth in 2006,” added Mr. Corcoran.

We have published our Supplemental Information for the Three Months and Year Ended December 31, 2004, which provides additional corporate data, financial highlights and portfolio statistical data. Investors are encouraged to access the Supplemental Information on our Web site at www.felcor.com, on the 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.

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FelCor Lodging Trust 2004 Operating Results
February 9, 2005
Page 7

FelCor is the nation’s second largest public hotel real estate investment trust and the largest owner of full service, all-suite hotels. FelCor’s consolidated portfolio is comprised of 143 hotels, located in 31 states and Canada. FelCor owns 69 upscale, all-suite hotels, and is the owner of the largest number of Embassy Suites Hotels and Doubletree Guest Suites^®hotels in the U.S. FelCor’s portfolio also includes 65 hotels in the upscale and full service segments. FelCor has a current market capitalization of approximately $3.2 billion. Additional information can be found on our Web site at www.felcor.com.

We invite you to listen to our Year End 2004 conference call on Thursday, February 10, 2005, at 9:00 a.m. (Central Standard Time). The conference call will be webcast simultaneously via our Web site at www.felcor.com. Interested investors and other parties who wish to access the call should go to our Web site and click on the conference call microphone icon on either the Investor Relations or FelCor News pages. In addition, a phone replay will be available from Thursday, February 10, 2005, at 12:00 p.m. (Central Standard Time), through Friday, March 4, 2005, at 7:00 p.m. (Central Standard Time), by dialing 866-475-2020 (access code is 1443). A recording of the call also will be archived and available at www.felcor.com.

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 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.


Contact:
Thomas J. Corcoran, Jr., President and CEO	(972) 444-4901	tcorcoran@felcor.com

Richard A. Smith, Executive Vice President and CFO	(972) 444-4932	rsmith@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

FelCor Lodging Trust 2004 Operating Results
February 9, 2005
Page 8

Consolidated Statements of Operations
(in thousands, except per share data)


	Three Months Ended						Year Ended
	December 31,						December 31,
	2004			2003			2004			2003
Revenues:
Hotel operating revenue:
Room	$	220,964		$	209,291		$	945,938		$	883,834
Food and beverage		48,888			46,535			180,398			167,883
Other operating departments		14,638			13,949			62,527			59,011
Retail space rental and other revenue		131			184			2,721			1,022

Total revenues		284,621			269,959			1,191,584			1,111,750

Expenses:
Hotel departmental expenses:
Room		62,537			59,454			257,016			234,242
Food and beverage		37,624			36,675			143,079			133,412
Other operating departments		7,842			6,608			31,887			27,024
Other property related costs		87,638			82,463			349,274			324,202
Management and franchise fees		14,090			14,224			61,579			58,711
Taxes, insurance and lease expense		24,898			26,870			114,648			117,662
Corporate expenses		5,525			3,807			17,094			14,266
Depreciation		30,410			28,959			118,855			123,968

Total operating expenses		270,564			259,060			1,093,432			1,033,487

Operating income		14,057			10,899			98,152			78,263
Interest expense, net		(33,413	)		(42,025	)		(149,623	)		(165,175	)
Impairment loss		(5,262	)		(54,205	)		(33,760	)		(107,409	)
Hurricane loss		—			—			(2,125	)		—
Charge-off of deferred financing costs		(866	)		—			(6,960	)		(2,834	)
Loss on early extinguishment of debt		(4,983	)		—			(44,216	)		—
Gain on swap termination		—			—			1,005			—

Loss before equity in income from unconsolidated entities, minority interests and gain on sale of assets		(30,467	)		(85,331	)		(137,527	)		(197,155	)
Equity in income from unconsolidated entities		1,429			118			17,121			2,370
Gain on sale of assets		73			178			1,167			284
Minority interests		2,098			6,769			7,928			13,912

Loss from continuing operations		(26,867	)		(78,266	)		(111,311	)		(180,589	)
Discontinued operations		16,097			(64,667	)		11,184			(129,555	)

Net loss		(10,770	)		(142,933	)		(100,127	)		(310,144	)
Preferred dividends		(10,091	)		(6,727	)		(35,130	)		(26,908	)

Net loss applicable to common stockholders	$	(20,861	)	$	(149,660	)	$	(135,257	)	$	(337,052	)

Basic and diluted per common share data:
Net loss from continuing operations	$	(0.62	)	$	(1.45	)	$	(2.48	)	$	(3.54	)

Net loss	$	(0.35	)	$	(2.55	)	$	(2.29	)	$	(5.75	)

Weighted average common shares outstanding		59,192			58,801			59,045			58,657

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FelCor Lodging Trust 2004 Operating Results
February 9, 2005
Page 9

Discontinued Operations
(in thousands)

Included in discontinued operations are the results of operations of the 18 hotels disposed of in 2004, one hotel designated as held for sale at December 31, 2004, and 16 hotels sold in 2003. Condensed financial information for the hotels included in discontinued operations is as follows:


	Three Months Ended						Year Ended
	December 31,						December 31,
	2004			2003			2004			2003
Hotel operating revenue	$	5,677		$	26,617		$	69,298		$	146,317
Hotel operating expenses		6,135			27,096			67,566			147,798

Operating income (loss)		(458	)		(479	)		1,732			(1,481	)
Direct interest costs, net		—			—			12			(636	)
Gain on the early extinguishment of debt		—			—			—			1,611
Impairment loss		—			(70,778	)		(4,529	)		(138,100	)
Lease termination expense from asset disposition		—			—			(4,900	)		—
Gain on sale of assets		17,306			3,258			19,422			2,376
Minority interest in FelCor LP		(751	)		3,332			(553	)		6,675

Gain (loss) from discontinued operations		16,097			(64,667	)		11,184			(129,555	)
Depreciation		—			2,153			3,797			16,258
Minority interest		751			(3,332	)		553			(6,675	)
Interest expense		—			—			—			665

EBITDA from discontinued operations		16,848			(65,846	)		15,534			(119,307	)
Gain on sale of assets		(17,306	)		(3,258	)		(19,422	)		(2,376	)
Impairment loss		—			70,778			4,529			138,100
Loss on early extinguishment of debt		—			—						(1,611	)
Lease termination expense from asset disposition		—			—			4,900			—

Adjusted EBITDA from discontinued operations	$	(458	)	$	1,674		$	5,541		$	14,806

Selected Balance Sheet Data
(in thousands)


	December 31,
	2004			2003
Investment in hotels	$	3,909,021		$	3,989,964
Accumulated depreciation		(948,631	)		(886,168	)

Investment in hotels, net of accumulated depreciation	$	2,960,390		$	3,103,796

Total cash and cash equivalents	$	119,310		$	231,885

Total assets	$	3,317,658		$	3,590,893

Total debt	$	1,767,122		$	2,037,355

Total stockholders’ equity	$	1,330,323		$	1,296,272

Non-GAAP Financial Measures

We refer in this press release to certain “non-GAAP financial measures.” These measures, including FFO, Adjusted FFO, EBITDA, Adjusted EBITDA, Same-Store EBITDA, hotel operating profit and hotel operating margin, are measures of our financial performance that are not calculated and presented in accordance with generally accepted accounting principles (“GAAP”). The following tables set forth the adjustments made and reconcile each of these non-GAAP measures to the most comparable GAAP financial measure. Immediately following the reconciliations, we include a discussion of why we believe these measures are useful supplemental measures of our performance and of the limitations upon such measures.

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FelCor Lodging Trust 2004 Operating Results
February 9, 2005
Page 10

Reconciliation of Net Loss to FFO and Adjusted FFO
(in thousands, except per share data)


	Three Months Ended December 31,
	2004								2003
						Per Share								Per Share
	Dollars			Shares		Amount			Dollars			Shares		Amount
Net loss	$	(10,770	)						$	(142,933	)
Preferred dividends		(10,091	)							(6,727	)

Net loss applicable to common stockholders		(20,861	)		59,192	$	(0.35	)		(149,660	)		58,801	$	(2.55	)
Depreciation from continuing operations		30,410			—		0.51			28,959			—		0.49
Depreciation from unconsolidated entities and discontinued operations.		2,659			—		0.04			4,231			—		0.07
Gain on sale of assets		(17,306	)		—		(0.29	)		(3,444	)		—		(0.06	)
Minority interest in FelCor LP		(974	)		2,789		(0.01	)		(7,712	)		3,050		(0.01	)

FFO		(6,072	)		61,981		(0.10	)		(127,626	)		61,851		(2.06	)
Charge-off of deferred debt costs		866			—		0.01			—			—		—
Loss on early extinguishment of Debt		4,983			—		0.08			—			—		—
Impairment		5,262			—		0.08			124,983			—		2.02
Minority interest share of impairment		—			—		—			(1,770	)		—		(0.03	)
Dilutive effect of unvested stock grants		—			438		0.01			—			—		—

Adjusted FFO	$	5,039			62,419	$	0.08		$	(4,413	)		61,851	$	(0.07	)


	Year Ended December 31,
	2004								2003
						Per Share								Per Share
	Dollars			Shares		Amount			Dollars			Shares		Amount
Net loss	$	(100,127	)						$	(310,144	)
Preferred dividends		(35,130	)							(26,908	)

Net loss applicable to common stockholders		(135,257	)		59,045	$	(2.29	)		(337,052	)		58,657	$	(5.75	)
Depreciation from continuing operations		118,855			—		2.01			123,968			—		2.11
Depreciation from unconsolidated entities and discontinued operations.		11,897			—		0.20			26,067			—		0.44
Gain on sale of assets		(19,422	)		—		(0.33	)		(2,668	)		—		(0.05	)
Minority interest in FelCor LP		(6,681	)		2,939		(0.08	)		(17,777	)		3,188		(0.10	)

FFO		(30,608	)		61,984		(0.49	)		(207,462	)		61,845		(3.35	)
Charge-off of deferred debt costs		6,960			—		0.11			2,834			—		0.04
Loss (gain) on early extinguishment of debt		44,216			—		0.71			(1,611	)		—		(0.03	)
Gain on swap termination		(1,005	)		—		(0.02	)		—			—		—
Lease termination expense from asset disposition		4,900			—		0.08			—			—		—
Impairment		38,289			—		0.62			245,509			—		3.97
Minority interest share of impairment		—			—		—			(1,770	)		—		(0.03	)
Dilutive effect of unvested stock grants		—			359		—			—			303		—

Adjusted FFO	$	62,752			62,343	$	1.01		$	37,500			62,148	$	0.60

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FelCor Lodging Trust 2004 Operating Results
February 9, 2005
Page 11

Reconciliation of Net Loss to EBITDA, Adjusted EBITDA and Same-Store EBITDA
(in thousands)


	Three Months Ended						Year Ended
	December 31,						December 31,
	2004			2003			2004			2003
Net loss	$	(10,770	)	$	(142,933	)	$	(100,127	)	$	(310,144	)
Depreciation from continuing operations		30,410			28,959			118,855			123,968
Depreciation from unconsolidated entities and discontinued operations		2,659			4,231			11,897			26,067
Minority interest in FelCor Lodging LP		(974	)		(7,712	)		(6,681	)		(17,777	)
Interest expense		34,322			42,871			152,394			167,431
Interest expense from unconsolidated entities and discontinued operations		1,773			1,294			5,667			7,713
Amortization expense		1,330			565			2,945			2,210

EBITDA		58,750			(72,725	)		184,950			(532	)
Charge-off of deferred debt costs		866			—			6,960			2,834
Loss (gain) on early extinguishment of debt		4,983			—			44,216			(1,611	)
Gain on swap termination		—			—			(1,005	)		—
Lease termination expense from asset disposition		—			—			4,900			—
Gain on sale of assets		(17,306	)		(3,444	)		(19,422	)		(2,668	)
Impairment		5,262			124,983			38,289			245,509
Minority interest share of impairment loss		—			(1,770	)		—			(1,770	)

Adjusted EBITDA		52,555			47,044			258,888			241,762
Adjusted EBITDA from discontinued operations		458			(1,674	)		(5,541	)		(14,806	)
Gain on development and sale of Margate Condominiums		(808	)		—			(11,664	)		—

Same-Store EBITDA	$	52,205		$	45,370		$	241,683		$	226,956

Reconciliation of Estimated Net Loss to Estimated FFO and EBITDA
(in millions, except per share and unit data)


	First Quarter 2005 Guidance												Full Year 2005 Guidance
	Low Guidance						High Guidance						Low Guidance						High Guidance
				Per Share						Per Share						Per Share						Per Share
	Dollars			Amount^(a)			Dollars			Amount^(a)			Dollars			Amount ^(a)			Dollars			Amount ^(a)
Net loss	$	(13	)	$	(0.22	)	$	(11	)	$	(0.19	)	$	(35	)	$	(0.59	)	$	(29	)	$	(0.49	)
Depreciation		36						36						147						147
Preferred Dividends		(10	)					(10	)					(40	)					(40	)
Minority interest in FelCor LP		(1	)					(1	)					(2	)					(2	)

FFO	$	12		$	0.19		$	14		$	0.22		$	70		$	1.11		$	76		$	1.21

Net loss	$	(13	)				$	(11	)				$	(35	)				$	(29	)
Depreciation		36						36						147						147
Minority interest in FelCor LP		(1	)					(1	)					(2	)					(2	)
Interest expense		34						34						139						139
Interest expense from unconsolidated entities		2						2						7						7
Amortization expense		1						1						3						3

EBITDA	$	59					$	61					$	259					$	265

(a) Weighted average shares are 59.4 million. Adding minority interest and unvested restricted stock of 3.4 million shares to weighted average shares, provides the weighted average shares and units of 62.8 million used to compute FFO per share.

FelCor Lodging Trust 2004 Operating Results
February 9, 2005
Page 12

Hotel Operating Profit
(dollars in thousands)


	Three Months						Year Ended
	Ended December 31,						December 31,
	2004			2003			2004			2003
Total revenue	$	284,621		$	269,959		$	1,191,584		$	1,111,750
Retail space rental and other revenue		(131	)		(184	)		(2,721	)		(1,022	)

Hotel revenue		284,490			269,775			1,188,863			1,110,728
Hotel operating expenses		(234,629	)		(226,294	)		(957,483	)		(895,253	)

Hotel operating profit	$	49,861		$	43,481		$	231,380		$	215,475

Hotel operating margin		17.5	%		16.1	%		19.5	%		19.4	%


Hotel Operating Expense Composition (dollars in thousands)

	Three Months Ended						Year Ended
	December 31,						December 31,
	2004			2003			2004			2003
Hotel departmental expenses:
Room	$	62,537		$	59,454		$	257,016		$	234,242
Food and beverage		37,624			36,675			143,079			133,412
Other operating departments		7,842			6,608			31,887			27,024
Other property related costs:
Administrative and general		29,860			26,948			115,422			106,466
Marketing and advertising		25,042			24,506			102,897			96,400
Repairs and maintenance		17,111			16,953			67,827			63,696
Energy		15,625			14,056			63,128			57,640
Taxes, insurance and lease expense		24,898			26,870			114,648			117,662

Total other property related costs		220,539			212,070			895,904			836,542
Management and franchise fees		14,090			14,224			61,579			58,711

Hotel operating expenses	$	234,629		$	226,294		$	957,483		$	895,253

Total operating expenses	$	270,564		$	259,060		$	1,093,432		$	1,033,487
Corporate expenses		(5,525	)		(3,807	)		(17,094	)		(14,266	)
Depreciation		(30,410	)		(28,959	)		(118,855	)		(123,968	)

Hotel operating expenses	$	234,629		$	226,294		$	957,483		$	895,253

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FelCor Lodging Trust 2004 Operating Results
February 9, 2005
Page 13

Substantially all of our non-current assets consist of real estate. 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, which are not measures of operating performance under GAAP, to be helpful in evaluating a real estate company’s operations. These supplemental measures, including FFO, Adjusted FFO, EBITDA, Adjusted EBITDA, Same-Store EBITDA, hotel operating profit and hotel operating margin, are not measures of operating performance under GAAP. However, we consider these non-GAAP measures 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 our operating performance.

FFO and EBITDA

The White Paper on Funds From Operations approved by the Board of Governors of the National Association of Real Estate Investment Trusts (“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. We compute 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 we do.

EBITDA is a commonly used measure of performance in many industries. We define EBITDA as net income or loss (computed in accordance with GAAP) plus interest expenses, income taxes, depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. Adjustments for unconsolidated partnerships and joint ventures are calculated to reflect EBITDA on the same basis.

Adjustments to FFO and EBITDA

We adjust FFO and EBITDA when evaluating our performance because management believes that the exclusion of certain additional recurring and non-recurring items described below provides useful supplemental information to investors regarding our ongoing operating performance and that the presentation of Adjusted FFO, Adjusted EBITDA and Same-Store EBITDA, when combined with GAAP net income, EBITDA and FFO, is beneficial to an investor’s better understanding of our operating performance.

•   Gains and losses related to early extinguishment of debt and interest rate swaps – We exclude gains and losses related to early extinguishment of debt and interest rate swaps from FFO and EBITDA because we believe that it is not indicative of ongoing operating performance of our hotel assets. This also represents an acceleration of interest expense or a reduction of interest expense, and interest expense is excluded from EBITDA.

•   Impairment losses – We exclude the effect of impairment losses in computing Adjusted FFO and Adjusted EBITDA because we believe that including these is not consistent with reflecting the ongoing performance of our remaining assets. Additionally, we believe that impairment charges represent accelerated depreciation, and depreciation is excluded from FFO by the NAREIT definition and from EBITDA.

•   Cumulative effect of a change in accounting principle – Infrequently, the Financial Accounting Standards Board promulgates new accounting standards that require the consolidated statements of operations to reflect the cumulative effect of a change in accounting principle. We exclude these one-time adjustments in computing Adjusted FFO and Adjusted EBITDA because they do not reflect our actual performance for that period.

In addition, to derive Adjusted EBITDA, we adjust EBITDA for gains or losses on the disposition of assets because we believe that including them in EBITDA is not consistent with reflecting ongoing performance of our remaining assets. Additionally, the gain or loss on sale of depreciable assets represents either accelerated depreciation or excess depreciation in previous periods, and depreciation is excluded from EBITDA.

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FelCor Lodging Trust 2004 Operating Results
February 9, 2005
Page 14

To derive Same-Store EBITDA, we make the same adjustments to EBITDA as for Adjusted EBITDA and, additionally, exclude EBITDA from discontinued operations and gains and losses on the disposition of non-hotel related assets.

Hotel Operating Profit and Operating Margin

Hotel operating profit and operating margin are commonly used measures of performance in the industry and give investors a more complete understanding of the operating results over which our individual hotels and operating managers have direct control. We believe that hotel operating profit and operating margin is useful to investors by providing greater transparency with respect to two significant measures used by us in our financial and operational decision-making. Additionally, using these measures facilitate comparisons with other hotel REITs and hotel owners. We present hotel operating profit and hotel operating margin by eliminating corporate-level expenses, depreciation and expenses related to our capital structure. We eliminate-corporate-level costs and expenses because we believe property-level results provide investors with supplemental information into the ongoing operation performance of our hotels and the effectiveness of management in running our business on a property-level basis. We eliminate depreciation and amortization because, even though depreciation and amortization are property-level expenses, these non-cash expenses, which are based on historical cost accounting for real estate assets, implicitly assumes that the value of real estate assets diminishes predictably over time.

Use and Limitations of Non-GAAP Measures

Our management and Board of Directors use FFO, Adjusted FFO, EBITDA and Adjusted EBITDA to evaluate the performance of our hotels and to facilitate comparisons between us and other lodging REITs, hotel owners who are not REITs and other capital intensive companies. Same-Store EBITDA is used to provide investors with supplemental information as to the ongoing operating performance of our hotels without regard to those hotels sold or held for sale at the date of presentation.

The use of these non-GAAP financial measures have certain limitations. FFO, Adjusted FFO, EBITDA, Adjusted EBITDA, Same-Store EBITDA, hotel operating profit and hotel operating margin, as presented by us, may not be comparable to FFO, Adjusted FFO, EBITDA, Adjusted EBITDA, Same-Store EBITDA, hotel operating profit and hotel operating margin as calculated by other real estate companies. These measures do not reflect certain expenses that we incurred and will incur, such as depreciation, interest and capital expenditures. Management compensates for these limitations by separately considering the impact of these excluded items to the extent they are material to operating decisions or assessments of our operating performance. Our reconciliations to the GAAP financial measures, and our consolidated statements of operations and cash flows, include interest expense, capital expenditures, and other excluded items, all of which should be considered when evaluating our performance, as well as the usefulness of our non-GAAP financial measures.

These non-GAAP financial measures are used in addition to and in conjunction with results presented in accordance with GAAP. They 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, Adjusted FFO, Adjusted FFO per share, EBITDA, Adjusted EBITDA or Same-Store EBITDA be considered as measures of our liquidity or indicative of funds available for our cash needs, including our 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. FFO, Adjusted FFO, EBITDA, Adjusted EBITDA, Same-Store EBITDA, hotel operating profit and hotel operating margin reflect additional ways of viewing our operations that we believe when viewed with our GAAP results and the reconciliations to the corresponding GAAP financial measures provide a more complete understanding of factors and trends affecting our business than could be obtained absent this disclosure. Management strongly encourages investors to review our financial information in its entirety and not to rely on a single financial measure.

###

EX-99.2 3 d22354exv99w2.htm SUPPLEMENTAL INFORMATION exv99w2

Exhibit 99.2

FelCor Lodging Trust Incorporated
Supplemental Information
Three Months and Year Ended December 31, 2004

Date of Issuance February 9, 2005

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 Months and Year Ended December 31, 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		8
Reconciliation of Net Loss to FFO and Adjusted FFO		9
Reconciliation of Net Loss to EBITDA, Adjusted EBITDA and Same-Store EBITDA		10
Hotel Operating Profit and Hotel Operating Margin		11
Hotel Operating Expense Composition		11
Debt Summary		15
PORTFOLIO DATA
Portfolio Distribution		17
Detailed Operating Statistics by Brand		18
Detailed Operating Statistics for FelCor’s Top Markets		19
Other Performance Statistics		20
Hotel Portfolio Information		21
Hotel Portfolio Listing		24

This supplement contains registered trademarks owned or licensed by companies other than us, which may include, but are not limited to, Candlewood Suites^®, Courtyard by Marriott^®, Crowne Plaza^®, Disneyland^®, Doubletree^®, Doubletree Guest Suites^®, Embassy Suites Hotels^®, Fairfield Inn^®, Four Points^® by Sheraton, Hampton Inn^®, Harvey Hotel^®, Harvey Suites^®, Hilton^®, Hilton Grand Vacations Company^®, Hilton Suites^®, Holiday Inn^®, Holiday Inn & Suites^®, Holiday Inn Express^®, Holiday Inn Express & Suites^®, Holiday Inn Select^®, Homewood Suites^® by Hilton, InterContinental^®, Priority Club^®, Sheraton^®, Sheraton Suites^®, St. Regis^®, Staybridge Suites^®, The Luxury Collection^®, W^®, Walt Disney World^®, Worlds of Fun^®, Westin^®, and Wyndham^®.

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.

FelCor Lodging Trust Incorporated
Supplemental Information
Three Months and Year Ended December 31, 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 December 31, 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 144 consolidated hotels, including 143 hotels in continuing operations and one hotel that was “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 interests of the operating lessees of these hotels. FelCor also owned 50% joint venture interests in five hotels whose operations were accounted for using the equity method. FelCor owned 69 full service, all-suite hotels, and was the largest owner of Embassy SuitesHotels and independently owned Doubletree Guest Suiteshotels. FelCor’s portfolio also included 65 hotels in the upscale and full service segments. The Company’s hotels were located in 31 states and Canada. FelCor had a market capitalization of approximately $3.2 billion at December 31, 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 Standard & Poors	B1 B-	B3 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
70

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

FelCor Lodging Trust Incorporated
Supplemental Information
Three Months and Year Ended December 31, 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.

David C. Kloeppel
Executive Vice President and Chief Financial Officer, Gaylord Entertainment Company

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

FelCor Lodging Trust Incorporated
Supplemental Information
Three Months and Year Ended December 31, 2004

Equity Research Coverage


Firm	Analyst	Telephone
Calyon Securities (USA)	Bryan A. Maher	(212) 408-5649

Deutsche Bank Securities	Marc J. Falcone	(212) 469-7417

Friedman, Billings, Ramsey, & Co.	David Loeb	(703) 469-1289

Green Street Advisors	John V. Arabia	(949) 640-8780

JPMorgan Securities	Harry C. Curtis	(212) 622-6610

Legg Mason	Rod F. Petrik	(410) 454-4131

Lehman Brothers	Felicia Kantor Hendrix	(212) 526-5562

Merrill Lynch	David W. Anders	(212) 449-2739

Prudential Equity Group	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

FelCor Lodging Trust Incorporated
Supplemental Information
Three Months and Year Ended December 31, 2004

FINANCIAL HIGHLIGHTS

Supplemental Financial Data
(in thousands, except per share information, ratios and percentages)


	December 31,			December 31,
	2004			2003
Total Enterprise Value
Common shares outstanding		59,817			59,120
Units outstanding		2,788			3,034

Combined shares and units outstanding		62,605			62,154
Common stock price at end of period	$	14.65		$	11.08

Common equity capitalization	$	917,163		$	688,666
Series A preferred stock		309,362			149,512
Series B preferred stock		169,395			169,395
Consolidated debt		1,767,122			2,037,355
Minority interest of consolidated debt		(5,618	)		(25,153	)
Pro rata share of unconsolidated debt^(a)		109,146			106,899
Cash and cash equivalents		(119,310	)		(231,885	)

Total enterprise value (TEV)	$	3,147,260		$	2,894,789

TEV per room^(b)	$	84		$	69
Pro rata rooms owned		37,338			42,107
Dividends Per Share
Dividends declared (year ended):
Common	$	—		$	—
Series A preferred stock		1.95			1.95
Series B preferred stock (depository shares)		2.25			2.25
Selected Balance Sheet Data
Investment in hotels, at cost^(c)	$	4,167,933		$	4,234,732
Total cash and cash equivalents		119,310			231,885
Total assets		3,317,658			3,590,893
Total debt		1,767,122			2,037,355
Total stockholders’ equity		1,330,323			1,296,272
Total stockholders equity less preferred equity		851,566			977,365
Book value per common share outstanding		14.24			16.53

(a) 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.

(b) Based on pro rata ownership.

(c) 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.

FelCor Lodging Trust Incorporated
Supplemental Information
Three Months and Year Ended December 31, 2004

Consolidated Statements of Operations
(in thousands, except per share data)


	Three Months Ended						Year Ended
	December 31,						December 31,
	2004			2003			2004			2003
Revenues:
Hotel operating revenue:
Room	$	220,964		$	209,291		$	945,938		$	883,834
Food and beverage		48,888			46,535			180,398			167,883
Other operating departments		14,638			13,949			62,527			59,011
Retail space rental and other revenue		131			184			2,721			1,022

Total revenues		284,621			269,959			1,191,584			1,111,750

Expenses:
Hotel departmental expenses:
Room		62,537			59,454			257,016			234,242
Food and beverage		37,624			36,675			143,079			133,412
Other operating departments		7,842			6,608			31,887			27,024
Other property related costs		87,638			82,463			349,274			324,202
Management and franchise fees		14,090			14,224			61,579			58,711
Taxes, insurance and lease expense		24,898			26,870			114,648			117,662
Corporate expenses		5,525			3,807			17,094			14,266
Depreciation		30,410			28,959			118,855			123,968

Total operating expenses		270,564			259,060			1,093,432			1,033,487

Operating income		14,057			10,899			98,152			78,263
Interest expense, net		(33,413	)		(42,025	)		(149,623	)		(165,175	)
Impairment loss		(5,262	)		(54,205	)		(33,760	)		(107,409	)
Hurricane loss		—			—			(2,125	)		—
Charge-off of deferred financing costs		(866	)		—			(6,960	)		(2,834	)
Loss on early extinguishment of debt		(4,983	)		—			(44,216	)		—
Gain on swap termination		—			—			1,005			—

Loss before equity in income from unconsolidated entities, minority interests and gain on sale of assets		(30,467	)		(85,331	)		(137,527	)		(197,155	)
Equity in income from unconsolidated entities		1,429			118			17,121			2,370
Gain (loss) on sale of assets		73			178			1,167			284
Minority interests		2,098			6,769			7,928			13,912

Loss from continuing operations		(26,867	)		(78,266	)		(111,311	)		(180,589	)
Discontinued operations		16,097			(64,667	)		11,184			(129,555	)

Net loss		(10,770	)		(142,933	)		(100,127	)		(310,144	)
Preferred dividends		(10,091	)		(6,727	)		(35,130	)		(26,908	)

Net loss applicable to common stockholders	$	(20,861	)	$	(149,660	)	$	(135,257	)	$	(337,052	)

Basic and diluted per common share data:
Net loss from continuing operations	$	(0.62	)	$	(1.45	)	$	(2.48	)	$	(3.54	)

Net loss	$	(0.35	)	$	(2.55	)	$	(2.29	)	$	(5.75	)

Weighted average common shares outstanding		59,192			58,801			59,045			58,657

FelCor Lodging Trust Incorporated
Supplemental Information
Three Months and Year Ended December 31, 2004

Discontinued Operations
(in thousands)


	Three Months Ended						Year Ended
	December 31,						December 31,
	2004			2003			2004			2003
Hotel operating revenue	$	5,677		$	26,617		$	69,298		$	146,317
Hotel operating expenses		6,135			27,096			67,566			147,798

Operating income		(458	)		(479	)		1,732			(1,481	)
Direct interest costs, net		—			—			12			(636	)
Gain on the early extinguishment of debt		—			—			—			1,611
Impairment loss		—			(70,778	)		(4,529	)		(138,100	)
Lease termination expense from asset disposition		—			—			(4,900	)		—
Gain (loss) on sale of assets		17,306			3,258			19,422			2,376
Minority interest in FelCor LP		(751	)		3,332			(553	)		6,675

Loss from discontinued operations		16,097			(64,667	)		11,184			(129,555	)
Depreciation		—			2,153			3,797			16,258
Minority interest		751			(3,332	)		553			(6,675	)
Interest expense		—			—			—			665

EBITDA from discontinued operations		16,848			(65,846	)		15,534			(119,307	)
Loss (gain) on sale of assets		(17,306	)		(3,258	)		(19,422	)		(2,376	)
Impairment loss		—			70,778			4,529			138,100
Loss on early extinguishment of debt		—			—						(1,611	)
Lease termination expense from asset disposition		—			—			4,900			—

Adjusted EBITDA from discontinued operations	$	(458	)	$	1,674		$	5,541		$	14,806

Non-GAAP Financial Measures

We refer in this Supplemental Information to certain “non-GAAP financial measures.” These measures, including FFO, Adjusted FFO, EBITDA, Adjusted EBITDA, Same-Store EBITDA, hotel operating profit and hotel operating margin are measures of our financial performance that are not calculated and presented in accordance with generally accepted accounting principles (“GAAP”). The following tables set forth the adjustments made and reconcile each of these non-GAAP measures to the most comparable GAAP financial measure. Immediately following the reconciliations, we include a discussion of why we believe these measures are useful supplemental measures of our performance and of the limitations upon such measures.

FelCor Lodging Trust Incorporated
Supplemental Information
Three Months and Year Ended December 31, 2004

Non-GAAP Financial Measures

Reconciliation of Net Loss to FFO and Adjusted FFO
(in thousands, except per share data)


	Three Months Ended December 31,
	2004								2003
						Per Share								Per Share
	Dollars			Shares		Amount			Dollars			Shares		Amount
Net loss	$	(10,770	)						$	(142,933	)
Preferred dividends		(10,091	)							(6,727	)

Net loss applicable to common stockholders		(20,861	)		59,192	$	(0.35	)		(149,660	)		58,801	$	(2.55	)
Depreciation from continuing operations.		30,410			—		0.51			28,959			—		0.49
Depreciation from unconsolidated entities and discontinued operations.		2,659			—		0.04			4,231			—		0.07
Loss (gain) on sale of assets		(17,306	)		—		(0.29	)		(3,444	)		—		(0.06	)
Minority interest in FelCor LP		(974	)		2,789		(0.01	)		(7,712	)		3,050		(0.01	)

FFO		(6,072	)		61,981		(0.10	)		(127,626	)		61,851		(2.06	)
Charge off of deferred debt costs		866			—		0.01			—			—		—
Loss (gain) on early extinguishment of debt		4,983			—		0.08			—			—		—
Impairment		5,262			—		0.08			124,983			—		2.02
Minority interest share of impairment		—			—		—			(1,770	)		—		(0.03	)
Dilutive effect of unvested stock grants		—			438		0.01			—			—		—

Adjusted FFO	$	5,039			62,419	$	0.08		$	(4,413	)		61,851	$	(0.07	)


	Year Ended December 31,
	2004								2003
						Per Share								Per Share
	Dollars			Shares		Amount			Dollars			Shares		Amount
Net loss	$	(100,127	)						$	(310,144	)
Preferred dividends		(35,130	)							(26,908	)

Net loss applicable to common stockholders		(135,257	)		59,045	$	(2.29	)		(337,052	)		58,657	$	(5.75	)
Depreciation from continuing operations.		118,855			—		2.01			123,968			—		2.11
Depreciation from unconsolidated entities and discontinued operations.		11,897			—		0.20			26,067			—		0.44
Loss (gain) on sale of assets		(19,422	)		—		(0.33	)		(2,668	)		—		(0.05	)
Minority interest in FelCor LP		(6,681	)		2,939		(0.08	)		(17,777	)		3,188		(0.10	)

FFO		(30,608	)		61,984		(0.49	)		(207,462	)		61,845		(3.35	)
Charge off of deferred debt costs		6,960			—		0.11			2,834			—		0.05
Loss (gain) on early extinguishment of debt		44,216			—		0.71			(1,611	)		—		(0.03	)
Gain on swap termination		(1,005	)		—		(0.02	)		—			—		—
Lease termination expense from asset disposition		4,900			—		0.08			—			—		—
Impairment		38,289			—		0.62			245,509			—		3.97
Minority interest share of impairment		—			—		—			(1,770	)		—		(0.03	)
Dilutive effect of unvested stock grants		—			359		—			—			303		—

Adjusted FFO	$	62,752			62,343	$	1.01		$	37,500			62,148	$	0.60

FelCor Lodging Trust Incorporated
Supplemental Information
Three Months and Year Ended December 31, 2004

Non-GAAP Financial Measures

Reconciliation of Net Loss to EBITDA, Adjusted EBITDA and Same-Store EBITDA
(in thousands)


	Three Months Ended						Year Ended
	December 31,						December 31,
	2004			2003			2004			2003
Net loss	$	(10,770	)	$	(142,933	)	$	(100,127	)	$	(310,144	)
Depreciation from continuing operations		30,410			28,959			118,855			123,968
Depreciation from unconsolidated entities and discontinued operations		2,659			4,231			11,897			26,067
Minority interest in FelCor Lodging LP		(974	)		(7,712	)		(6,681	)		(17,777	)
Interest expense		34,322			42,871			152,394			167,431
Interest expense from unconsolidated entities and discontinued operations		1,773			1,294			5,667			7,713
Amortization expense		1,330			565			2,945			2,210

EBITDA		58,750			(72,725	)		184,950			(532	)
Charge off of deferred debt costs		866			—			6,960			2,834
Loss (gain) on early extinguishment of debt		4,983			—			44,216			(1,611	)
Gain on swap termination		—			—			(1,005	)		—
Lease termination expense from asset disposition		—			—			4,900			—
Loss (gain) on sale of assets		(17,306	)		(3,444	)		(19,422	)		(2,668	)
Impairment		5,262			124,983			38,289			245,509
Minority interest share of impairment loss		—			(1,770	)		—			(1,770	)

Adjusted EBITDA		52,555			47,044			258,888			241,762
Adjusted EBITDA from discontinued operations		458			(1,674	)		(5,541	)		(14,806	)
Gain on development and sale of Margate Condominiums		(808	)		—			(11,664	)		—

Same-Store EBITDA	$	52,205		$	45,370		$	241,683		$	226,956

FelCor Lodging Trust Incorporated
Supplemental Information
Three Months and Year Ended December 31, 2004

Non-GAAP Financial Measures

Hotel Operating Profit and Hotel Operating Margin
(dollars in thousands)


	Three Months						Year Ended
	Ended December 31,						December 31,
	2004			2003			2004			2003
Total revenue	$	284,621		$	269,959		$	1,191,584		$	1,111,750
Retail space rental and other revenue		(131	)		(184	)		(2,721	)		(1,022	)

Hotel revenue		284,490			269,775			1,188,863			1,110,728
Hotel operating expenses		(234,629	)		(226,294	)		(957,483	)		(895,253	)

Hotel operating profit	$	49,861		$	43,481		$	231,380		$	215,475

Hotel operating margin		17.5	%		16.1	%		19.5	%		19.4	%


Hotel Operating Expense Composition (dollars in thousands)

	Three Months Ended						Year Ended
	December 31,						December 31,
	2004			2003			2004			2003
Hotel departmental expenses:
Room	$	62,537		$	59,454		$	257,016		$	234,242
Food and beverage		37,624			36,675			143,079			133,412
Other operating departments		7,842			6,608			31,887			27,024
Other property related costs:
Administrative and general		29,860			26,946			115,422			106,466
Marketing and advertising		25,042			24,508			102,897			96,400
Repairs and maintenance		17,111			16,953			67,827			63,696
Energy		15,625			14,056			63,128			57,640
Taxes, insurance and lease expense		24,898			26,870			114,648			117,662

Total other property related costs		220,539			212,070			895,904			836,542
Management and franchise fees		14,090			14,224			61,579			58,711

Hotel operating expenses	$	234,629		$	226,294		$	957,483		$	895,253

Reconciliation of total operating expense to hotel operating expense:
Total operating expenses	$	270,564		$	259,060		$	1,093,432		$	1,033,487
Corporate expenses		(5,525	)		(3,807	)		(17,094	)		(14,266	)
Depreciation		(30,410	)		(28,959	)		(118,855	)		(123,968	)

Hotel operating expenses	$	234,629		$	226,294		$	957,483		$	895,253


	Three Months						Year Ended
	Ended December 31,						December 31,
	2004			2003			2004			2003
Supplemental information:
Compensation and benefits expense (included in hotel operating expenses)	$	95,948		$	94,507		$	392,577		$	366,202
Reconciliation of total operating expenses to hotel operating expenses:
Total operating expenses	$	270,564		$	259,060		$	1,093,432		$	1,033,487
Corporate expenses		(5,525	)		(3,807	)		(17,094	)		(14,266	)
Depreciation		(30,410	)		(28,959	)		(118,855	)		(123,968	)

Hotel operating expenses	$	234,629		$	226,294		$	957,483		$	895,253

FelCor Lodging Trust Incorporated
Supplemental Information
Three Months and Year Ended December 31, 2004

Non-GAAP Financial Measures

Substantially all of our non-current assets consist of real estate. 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, which are not measures of operating performance under GAAP, to be helpful in evaluating a real estate company’s operations. These supplemental measures, including FFO, Adjusted FFO, EBITDA, Adjusted EBITDA, Same-Store EBITDA, hotel operating profit and hotel operating margin are not measures of operating performance under GAAP. However, we consider these non-GAAP measures 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 our operating performance.

FFO and EBITDA

Adjustments to FFO and EBITDA

FelCor Lodging Trust Incorporated
Supplemental Information
Three Months and Year Ended December 31, 2004

Non-GAAP Financial Measures

• Impairment losses – We exclude the effect of impairment losses in computing Adjusted FFO and Adjusted EBITDA because we believe that including these is not consistent with reflecting the ongoing performance of our remaining assets. Additionally, we believe that impairment charges represent accelerated depreciation, and depreciation is excluded from FFO by the NAREIT definition and from EBITDA.

• Cumulative effect of a change in accounting principle – Infrequently, the Financial Accounting Standards Board promulgates new accounting standards that require the consolidated statements of operations to reflect the cumulative effect of a change in accounting principle. We exclude these one-time adjustments in computing Adjusted FFO and Adjusted EBITDA because they do not reflect our actual performance for that period.

In addition, to derive Adjusted EBITDA, we adjust EBITDA for Gains or losses on the disposition of assets because we believe that including them in EBITDA is not consistent with reflecting ongoing performance of our remaining assets. Additionally, the gain or loss on sale of depreciable assets represents either accelerated depreciation or excess depreciation in previous periods, and depreciation is excluded from EBITDA.

Hotel Operating Profit and Operating Margin

FelCor Lodging Trust Incorporated
Supplemental Information
Three Months and Year Ended December 31, 2004

Non-GAAP Financial Measures

Use and Limitations of Non-GAAP Measures.

Our management and Board of Directors use FFO, Adjusted FFO, EBITDA and Adjusted EBITDA to evaluate the performance of our hotels and to facilitate comparisons between us and other lodging REITs, hotel owners who are not REITs and other capital intensive companies. Same Store EBITDA is used to provide investors with supplemental information as to the ongoing operating performance of our hotels without regard to those hotels sold or held for sale at the date of presentation.

FelCor Lodging Trust Incorporated
Supplemental Information
Three Months and Year Ended December 31, 2004

Debt Summary
(dollars in thousands)

Debt Outstanding


	Encumbered	Interest Rate At			Maturity	Consolidated
	Hotels	December 31, 2004			Date	Debt
Promissory note	none		4.31	%	June 2016	$	650
Senior unsecured term notes	none		7.63		Oct. 2007		122,426
Senior unsecured term notes	none		9.00		June 2011		298,409
Senior unsecured term notes^(a)	none		7.19		June 2011		290,000

Total unsecured debt			8.02				711,485

Mortgage debt	15 hotels		5.50		July 2009-2014		192,363
Mortgage debt	1 hotel		7.23		Sept. 2005		10,521
Mortgage debt ^(b)	10 hotels		4.63		May 2006		144,669
Mortgage debt	15 hotels		7.24		Nov. 2007		127,316
Mortgage debt	1 hotel		4.06		August 2008		15,500
Mortgage debt	7 hotels		7.32		April 2009		130,458
Mortgage debt	6 hotels		7.55		June 2009		67,959
Mortgage debt	8 hotels		8.70		May 2010		175,504
Mortgage debt	7 hotels		8.73		May 2010		135,690
Mortgage debt	8 hotels		7.48		April 2011		49,476
Other	1 hotel		9.17		August 2011		6,180

Total secured debt	79 hotels		7.00				1,055,637

Total			7.41	%		$	1,767,122

(a) The stated interest rate on this debt is LIBOR (2.6% at December 31, 2004) plus 4.25%. A $100 million notional amount of this debt has been swapped for a fixed rate of 7.80% resulting in a weighted average rate on these notes at December 31, 2004 of 7.19%.

(b) This debt has two, one-year extension options, subject to certain contingencies.


Fixed interest rate debt to total debt		74.9	%
Weighted average maturity of debt	5 years
Secured debt to total assets		31.8	%

At December 31, 2004, future scheduled debt principal payments are as follows (in thousands):


	Secured			Unsecured
Year	Debt			Debt			Total
2005	$	32,319		$	—		$	32,319
2006		161,043	^(a)		—			161,043
2007		138,798			125,000			263,798
2008		34,595			—			34,595
2009 and thereafter		689,246			590,650			1,279,896
Premium/(discount)		(364	)		(4,165	)		(4,529	)

Total debt	$	1,055,637		$	711,485		$	1,767,122

(a) Included is a $145 million non-recourse mortgage loan maturing in 2006, that has two, one-year extension options, subject to certain contingencies.

FelCor Lodging Trust Incorporated
Supplemental Information
Three Months and Year Ended December 31, 2004

Debt Summary (continued)

At December 31, 2004, we had unconsolidated 50 percent investments in ventures that owned an aggregate of 20 hotels. These ventures had approximately $218 million of non-recourse mortgage debt, all of which is secured by hotel assets. Our pro rata share of this non-recourse debt is $109 million.

Financing transactions in 2004:

In March 2004, we elected to terminate our unsecured line of credit arrangement, which resulted in a 2004 cost savings of approximately $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 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 June 2004, we redeemed the full $175 million of our senior notes maturing in October 2004, and during 2004, we retired all $600 million of our 9¹/2% senior notes maturing in 2008.

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.

FelCor Lodging Trust Incorporated
Supplemental Information
Three Months and Year Ended December 31, 2004

PORTFOLIO DATA

Portfolio Distribution at December 31, 2004
(143 consolidated hotels included in continuing operations, same store basis)


					% of			% of 2004 Hotel
Brand	Hotels		Rooms		Total Rooms			Operating Profit^(b)
Embassy Suites		56		14,279		36	%		52	%
Holiday Inn-branded		39		12,769		32			21
Sheraton-branded		10		3,269		8			10
Doubletree-branded		10		2,206		6			6
Crowne Plaza		12		4,025		10			5
Other		16		3,432		8			6

					% of			% of 2004 Hotel
Top Markets	Hotels		Rooms		Total Rooms			Operating Profit
Atlanta		12		3,514		9	%		9	%
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
Orlando		6		2,219		6			4
San Francisco Bay Area		8		2,690		7			3
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 2004 Hotel
Top Four States	Hotels		Rooms		Total Rooms			Operating Profit
California		19		5,593		14	%		15	%
Texas		31		8,284		21			14
Florida		16		5,343		13			11
Georgia		14		3,868		10			10

					% of			% of 2004 Hotel
Location	Hotels		Rooms		Total Rooms			Operating Profit
Suburban		63		15,671		39	%		40	%
Urban		37		11,338		29			28
Airport		28		8,509		21			21
Resort		13		4,044		10			11
Interstate		2		418		1			0

					% of			% of 2004 Hotel
Segment	Hotels		Rooms		Total Rooms			Operating Profit
Upscale all-suite		69		17,145		43	%		59	%
Full service		40		13,004		32			22
Upscale		25		8,263		21			18
Limited service		9		1,568		4			1

					% of			% of 2004 Hotel
	Hotels		Rooms		Total Rooms			Operating Profit
Core Hotels		125		35,256		88	%		95	%
Sale Hotels^(a)		18		4,724		12			5

		^(a) Excludes one hotel that met the “held for sale” accounting requirements, and was included in discontinued operations at December 31, 2004.

		^(b) Hotel operating profit is more fully described on page 11 of this supplement.

FelCor Lodging Trust Incorporated
Supplemental Information
Three Months and Year Ended December 31, 2004

Detailed Operating Statistics by Brand
(142 consolidated hotels included in continuing operations, same store basis)


	Occupancy (%)
	Three Months Ended December 31,							Year Ended December 31,
	2004		2003		% Variance			2004		2003		% Variance
Embassy Suites Hotels		65.3		63.9		2.2			69.5		67.3		3.1
Holiday Inn-branded hotels		58.3		58.0		0.6			64.7		62.9		2.9
Sheraton-branded hotels		58.3		58.6		(0.6	)		63.1		59.8		5.5
Crowne Plaza hotels		60.4		58.3		3.6			63.4		60.5		4.9
Doubletree-branded hotels		59.1		62.7		(5.7	)		66.0		65.9		0.1
Other hotels		50.0		50.7		(1.3	)		56.5		55.9		1.0
Total hotels		60.4		59.8		0.9			65.5		63.6		3.1

	ADR ($)
	Three Months Ended December 31,							Year Ended December 31,
	2004		2003		% Variance			2004		2003		% Variance
Embassy Suites Hotels		117.26		114.52		2.4			117.49		115.85		1.4
Holiday Inn-branded hotels		80.75		79.98		1.0			81.06		80.20		1.1
Sheraton-branded hotels		101.56		93.74		8.3			98.33		94.53		4.0
Crowne Plaza hotels		95.78		94.36		1.5			93.83		93.50		0.4
Doubletree-branded hotels		103.41		96.58		7.1			103.79		100.07		3.7
Other hotels		78.06		74.81		4.4			82.68		79.71		3.7
Total hotels		99.28		96.45		2.9			99.07		97.38		1.7

	RevPAR ($)
	Three Months Ended December 31,							Year Ended December 31,
	2004		2003		% Variance			2004		2003		% Variance
Embassy Suites Hotels		76.57		73.15		4.7			81.61		78.02		4.6
Holiday Inn-branded hotels		47.11		46.38		1.6			52.45		50.42		4.0
Sheraton-branded hotels		59.20		54.95		7.7			62.08		56.57		9.7
Crowne Plaza hotels		57.85		55.01		5.2			59.53		56.55		5.3
Doubletree-branded hotels		61.09		60.51		1.0			68.50		65.98		3.8
Other hotels		39.04		37.89		3.0			46.70		44.58		4.8
Total hotels		59.94		57.70		3.9			64.91		61.89		4.9

The Holiday Inn Cocoa Beach, which was closed during the fourth quarter of 2004 because of hurricane damage, has been excluded from these Operating Statistics.

FelCor Lodging Trust Incorporated
Supplemental Information
Three Months and Year Ended December 31, 2004

Detailed Operating Statistics for FelCor’s Top Markets
(142 consolidated hotels included in continuing operations, same store basis)


	Occupancy (%)
	Three Months Ended December 31,							Year Ended December 31,
	2004		2003		% Variance			2004		2003		% Variance
Atlanta		62.2		58.4		6.4			67.2		64.6		4.1
Dallas		43.5		44.3		(1.9	)		48.8		47.0		3.9
Los Angeles Area		64.6		64.8		(0.3	)		68.7		69.8		(1.5	)
Boca Raton/Ft. Lauderdale		76.3		73.9		3.4			79.0		73.5		7.5
New Orleans		67.9		68.1		(0.4	)		66.3		65.8		0.7
San Francisco Bay Area		58.8		59.9		(1.9	)		65.3		64.2		1.6
Orlando		70.8		65.7		7.8			76.1		68.8		10.7
Minneapolis		62.1		62.1		0.0			68.0		65.2		4.2
San Diego		70.3		76.2		(7.8	)		80.9		79.9		1.3
Phoenix		61.8		61.8		(0.1	)		66.2		65.9		0.3
Houston		59.2		64.2		(7.7	)		65.5		65.3		0.3
Chicago		67.0		64.0		4.7			69.7		67.6		3.2
Philadelphia		71.4		61.5		16.0			68.0		61.8		10.1

	ADR ($)
	Three Months Ended December 31,							Year Ended December 31,
	2004		2003		% Variance			2004		2003		% Variance
Atlanta		86.25		84.40		2.2			86.68		85.26		1.7
Dallas		90.25		86.65		4.1			89.77		87.74		2.3
Los Angeles Area		106.64		99.78		6.9			110.30		102.32		7.8
Boca Raton/Ft. Lauderdale		116.65		110.07		6.0			115.01		113.65		1.2
New Orleans		147.56		138.62		6.5			136.96		133.17		2.9
San Francisco Bay Area		110.89		109.84		1.0			112.44		112.34		0.1
Orlando		80.33		76.04		5.7			77.32		74.68		3.5
Minneapolis		127.47		122.22		4.3			125.48		122.82		2.2
San Diego		121.75		115.67		5.3			120.16		116.95		2.7
Phoenix		108.37		101.10		7.2			105.43		98.98		6.5
Houston		65.97		68.09		(3.1	)		69.32		69.92		(0.9	)
Chicago		112.50		112.03		0.4			106.44		109.36		(2.7	)
Philadelphia		107.17		108.01		(0.8	)		105.99		105.96		0.0

	RevPAR ($)
	Three Months Ended December 31,							Year Ended December 31,
	2004		2003		% Variance			2004		2003		% Variance
Atlanta		53.61		49.31		8.7			58.28		55.08		5.8
Dallas		39.25		38.42		2.2			43.81		41.23		6.3
Los Angeles Area		68.85		64.63		6.5			75.83		71.42		6.2
Boca Raton/Ft. Lauderdale		89.05		81.29		9.5			90.90		83.58		8.8
New Orleans		100.14		94.45		6.0			90.78		87.66		3.6
San Francisco Bay Area		65.17		65.79		(0.9	)		73.39		72.18		1.7
Orlando		56.86		49.94		13.9			58.85		51.35		14.6
Minneapolis		79.10		75.86		4.3			85.30		80.14		6.4
San Diego		85.59		88.16		(2.9	)		97.26		93.41		4.1
Phoenix		66.95		62.53		7.1			69.76		65.28		6.9
Houston		39.07		43.69		(10.6	)		45.40		45.64		(0.5	)
Chicago		75.42		71.73		5.1			74.22		73.88		0.5
Philadelphia		76.51		66.47		15.1			72.07		65.43		10.1

The Holiday Inn Cocoa Beach, which was closed during the fourth quarter of 2004 because of hurricane damage, has been excluded from these Operating Statistics.

FelCor Lodging Trust Incorporated
Supplemental Information
Three Months and Year Ended December 31, 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		2.4			3.0			5.4
November		0.2			2.9			3.2
December		(0.2	)		2.7			2.5

Fourth Quarter 2004		0.9			2.9			3.9
Year 2004		3.1			1.7			4.9

January 2005		2.2			4.9			7.2

FelCor Lodging Trust Incorporated
Supplemental Information
Three Months and Year Ended December 31, 2004

Hotel Portfolio Information

Pro Rata Share of Rooms Owned


			Room Count at
	Hotels		December 31, 2004
Consolidated hotels in continuing operations		143		39,980
Hotels held for sale		1		191
Unconsolidated hotel operations		5		761

Total hotels owned		149		40,932
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				37,338

Capital Expenditures (dollars in thousands)


	Three Months Ended			Year Ended			Year Ended
	December 31, 2004			December 31, 2004			December 31, 2003
Consolidated hotels:
Improvements and additions to hotels	$	36,721		$	95,833		$	64,045
% of total revenue		12.9	%		8.0	%		5.3	%

Unconsolidated hotels (pro rata share):
Improvements and additions to hotels	$	2,326		$	6,359		$	4,291
% of total revenue		6.3	%		4.3	%		3.0	%

FelCor Lodging Trust Incorporated
Supplemental Information
Three Months and Year Ended December 31, 2004

Hotel Portfolio Information

Sale Hotels

At December 31, 2004, we included in continuing operations 18 hotels identified as sale hotels. The composition, by brand, of the 18 sale hotels is as follows: Holiday Inn-branded (11), Doubletree branded (2) Embassy Suites (3), Hampton (1) and Independent (1). These hotels are expected to be sold within the next 18 months depending on the individual hotel, market conditions, and other factors.

Operating statistics for our consolidated portfolio of 142 hotels included in continuing operations:


	Three Months Ended December 31,						Year Ended December 31,
	2004		2003		% Variance		2004		2003		% Variance
Consolidated in Continuing Operations (142 hotels)^(a)
Occupancy (%)		60.4		59.8		0.9		65.5		63.6		3.1
ADR ($)		99.28		96.45		2.9		99.07		97.38		1.7
RevPAR ($)		59.94		57.70		3.9		64.91		61.89		4.9

Sale Hotels (18 hotels)
Occupancy (%)		50.5		49.8		1.4		57.7		56.1		3.0
ADR ($)		74.52		72.56		2.7		74.20		74.19		0.0
RevPAR ($)		37.63		36.14		4.1		42.83		41.59		3.0

Core Hotels (124 hotels)^(a)
Occupancy (%)		61.7		61.2		0.9		66.6		64.6		3.1
ADR ($)		102.03		99.09		3.0		102.00		100.12		1.9
RevPAR ($)		62.97		60.63		3.9		67.91		64.65		5.0

^(a) The Holiday Inn Cocoa Beach, which was closed during the fourth quarter of 2004 because of hurricane damage, has been excluded from these Operating Statistics.

For the year ended December 31, 2004, the hotel operating margins for the Core Hotels were 30.2%, while the operating margins for the Sale Hotels were 20.0%.

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

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

FelCor Lodging Trust Incorporated
Supplemental Information
Three Months and Year Ended December 31, 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

Omaha – Southwest Holiday Inn Express & Suites

Aug 2004

Albuquerque – Mountain View (at I-40 & I-25) Holiday Inn

Sep 2004

360

Total Sales in Third Quarter 2004

950

Hotels sold 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

Harford – Downtown, Crowne Plaza

Nov 2004

350

Secaucus – Meadowlands, Crowne Plaza

Dec 2004

304

Total Sales in Fourth Quarter-to-Date in 2004

1,696

Total Sales in 2004

4,335

157

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.

FelCor Lodging Trust Incorporated
Supplemental Information
Three Months and Year Ended December 31, 2004

Hotel Portfolio Listing
(as of December 31, 2004)

State

Rooms

% Owned^(a)

Brand

Consolidated Continuing Operations

Birmingham^(b)

242

Embassy Suites

Montgomery – East I-85^(b)

210

Holiday Inn

Phoenix – Biltmore^(b)

232

Embassy Suites

Phoenix Crescent Hotel^(b)

342

Sheraton

Phoenix Scottsdale/Downtown^(b)

218

Fairfield Inn

Phoenix Tempe^(b)

224

Embassy Suites

Dana Point – Doheny Beach

195

Doubletree Guest Suites

Irvine – Orange County Airport (Newport Beach)

335

Crowne Plaza

Los Angeles – Anaheim (Located near Disneyland Park)^(b)

222

Embassy Suites

Los Angeles – Covina/I-10^(b)

259

Embassy Suites

Los Angeles – El Segundo – International Airport – South

349

Embassy Suites

Milpitas – Silicon Valley^(b)

266

Embassy Suites

Milpitas – San Jose-North (Milpitas – Silicon Valley)

305

Crowne Plaza

Napa Valley^(b)

205

Embassy Suites

Oxnard – Mandalay Beach Resort & Conference Center^(b)

248

Embassy Suites

Palm Desert – Palm Desert Resort^(b)

198

Embassy Suites

Pleasanton (San Ramon Area)

244

Crowne Plaza

San Diego – On the Bay

600

Holiday Inn

San Francisco – Burlingame Airport

340

Embassy Suites

San Francisco – South San Francisco Airport^(b)

312

Embassy Suites

San Francisco – Fisherman’s Wharf

585

Holiday Inn

San Francisco – Union Square

403

Crowne Plaza

San Rafael – Marin County/Conference Center^(b)

235

Embassy Suites

Santa Barbara – Goleta^(b)

160

Holiday Inn

Santa Monica – Beach at the Pier

132

Holiday Inn

Denver – Aurora^(b)

248

Doubletree

Stamford

380

Holiday Inn Select

Wilmington^(b)

244

Doubletree

Boca Raton^(b)

263

Embassy Suites

Cocoa Beach – Oceanfront

500

Holiday Inn

Deerfield Beach – Boca Raton/Deerfield Beach Resort^(b)

244

Embassy Suites

Ft. Lauderdale – 17th Street^(b)

358

Embassy Suites

Ft. Lauderdale – Cypress Creek^(b)

253

Sheraton Suites

Jacksonville – Baymeadows^(b)

277

Embassy Suites

Miami – International Airport^(b)

316

Embassy Suites

Miami – International Airport (LeJeune Center)

304

Crowne Plaza

Orlando – International Airport^(b)

288

Holiday Inn Select

Orlando – International Drive – Resort^(b)

651

Holiday Inn

Orlando – International Drive South/Convention Center^(b)

244

Embassy Suites

Orlando– Nikki Bird (Maingate – Walt Disney World Area)

530

Holiday Inn

FelCor Lodging Trust Incorporated
Supplemental Information
Three Months and Year Ended December 31, 2004

Hotel Portfolio Listing
(as of December 31, 2004)

State

Rooms

% Owned^(a)

Brand

Orlando– (North)

277

Embassy Suites

Orlando – Walt Disney World Resort^(b)

229

Doubletree Guest Suites

Tampa – Busch Gardens

406

Holiday Inn

Tampa– On Tampa Bay^(b)

203

Doubletree Guest Suites

Atlanta – Airport^(b)

378

Crowne Plaza

Atlanta – Airport^(b)

233

Embassy Suites

Atlanta – Airport-North^(b)

493

Holiday Inn

Atlanta – Buckhead^(b)

317

Embassy Suites

Atlanta – Downtown^(b)

211

Courtyard by Marriott

Atlanta – Downtown^(b)

242

Fairfield Inn

Atlanta – Galleria^(b)

278

Sheraton Suites

Atlanta – Gateway – Atlanta Airport

395

Sheraton

Atlanta – Perimeter – Dunwoody^(b)

250

Holiday Inn Select

Atlanta – Perimeter Center^(b)

241

Embassy Suites

Atlanta – Powers Ferry^(b)

296

Crowne Plaza

Atlanta – South (I-75 & US 41)^(b)

180

Holiday Inn

Brunswick^(b)

130

Embassy Suites

Columbus – North (I-185 at Peachtree Mall)

224

Holiday Inn

Davenport

288

Holiday Inn

Chicago – The Allerton

443

Crowne Plaza

Chicago – Lombard/Oak Brook^(b)

262

Embassy Suites

Chicago – Northshore/Deerfield (Northbrook)^(b)

237

Embassy Suites

Chicago O’Hare Airport^(b)

297

Sheraton Suites

Moline – Airport

216

Holiday Inn

Moline – Airport Area

110

Holiday Inn Express

Indianapolis – North^(b)

221

Embassy Suites

Kansas City – Overland Park^(b)

199

Embassy Suites

Lexington^(b)

155

Sheraton Suites

Lexington – Lexington Green^(b)

174

Hilton Suites

Baton Rouge^(b)

223

Embassy Suites

New Orleans^(b)

372

Embassy Suites

New Orleans – French Quarter^(b)

374

Holiday Inn

Boston – Government Center

303

Holiday Inn Select

Boston – Marlborough^(b)

229

Embassy Suites

Baltimore – BWI Airport^(b)

251

Embassy Suites

Troy – North (Auburn Hills)^(b)

251

Embassy Suites

Bloomington^(b)

219

Embassy Suites

Minneapolis – Airport^(b)

310

Embassy Suites

Minneapolis – Downtown

216

Embassy Suites

St. Paul – Downtown^(b)

210

Embassy Suites

Kansas City – NE I-435 North (At Worlds of Fun)^(b)

165

Holiday Inn

Kansas City – Plaza^(b)

266

Embassy Suites

St. Louis – Downtown^(b)

297

Embassy Suites

Jackson – North

222

Holiday Inn & Suites

Olive Branch Whispering Woods Hotel and Conference Center

181

Independent

Charlotte^(b)

274

Embassy Suites

Charlotte SouthPark

208

Doubletree Guest Suites

FelCor Lodging Trust Incorporated
Supplemental Information
Three Months and Year Ended December 31, 2004

Hotel Portfolio Listing
(as of December 31, 2004)

State

Rooms

% Owned^(a)

Brand

Raleigh^(b)

203

Doubletree Guest Suites

Raleigh – Crabtree^(b)

225

Embassy Suites

Omaha – Central

187

Doubletree Guest Suites

Omaha – Central

129

Hampton Inn

Omaha – Central (I-80)

383

Holiday Inn

Omaha – Old Mill^(b)

223

Crowne Plaza

Parsippany^(b)

274

Embassy Suites

Piscataway – Somerset^(b)

224

Embassy Suites

Secaucus – Meadowlands^(b)

261

Embassy Suites

Cleveland – Downtown

268

Embassy Suites

Tulsa – I-44^(b)

244

Embassy Suites

Philadelphia – Center City

445

Crowne Plaza

Philadelphia – Historic District^(b)

364

Holiday Inn

Philadelphia – Society Hill^(b)

365

Sheraton

Pittsburgh – At University Center (Oakland)^(b)

251

Holiday Inn Select

Charleston – Mills House (Historic Downtown)^(b)

214

Holiday Inn

Myrtle Beach – At Kingston Plantation

255

Embassy Suites

Myrtle Beach Resort

385

Hilton

Knoxville – Central At Papermill Road^(b)

240

Holiday Inn

Nashville – Airport/Opryland Area

296

Embassy Suites

Nashville – Opryland/Airport (Briley Parkway)

382

Holiday Inn Select

Amarillo – I-40

248

Holiday Inn

Austin^(b)

189

Doubletree Guest Suites

Austin – North^(b)

260

Embassy Suites

Austin – Town Lake (Downtown Area)^(b)

320

Holiday Inn

Corpus Christi^(b)

150

Embassy Suites

Dallas

295

Crowne Plaza Suites

Dallas – At Campbell Centre

300

Doubletree

Dallas – Dallas Park Central

114

Staybridge Suites

Dallas – DFW International Airport-North^(b)

164

Harvey Suites

Dallas – DFW International Airport-South^(b)

305

Embassy Suites

Dallas – Love Field^(b)

248

Embassy Suites

Dallas – Market Center^(b)

354

Crowne Plaza

Dallas – Market Center^(b)

244

Embassy Suites

Dallas – Park Central

438

Sheraton

Dallas – Park Central

536

Westin

Dallas – Park Central Area^(b)

279

Embassy Suites

Dallas – Regal Row^(b)

203

Fairfield Inn

Dallas – West End/Convention Center

309

Hampton Inn

Houston – Greenway Plaza Area^(b)

355

Holiday Inn Select

Houston – I-10 East^(b)

160

Fairfield Inn

Houston – I-10 East^(b)

Hampton Inn

Houston – I-10 West & Hwy. 6 (Park 10 Area)

349

Holiday Inn Select

Houston – Intercontinental Airport^(b)

415

Holiday Inn

Houston – Medical Center^(b)

284

Holiday Inn & Suites

Houston – Near the Galleria^(b)

209

Courtyard by Marriott

Houston – Near the Galleria^(b)

107

Fairfield Inn

FelCor Lodging Trust Incorporated
Supplemental Information
Three Months and Year Ended December 31, 2004

Hotel Portfolio Listing
(as of December 31, 2004)

State

Rooms

% Owned^(a)

Brand

San Antonio – Downtown (Market Square)

315

Holiday Inn

San Antonio – International Airport^(b)

261

Embassy Suites

San Antonio – International Airport^(b)

397

Holiday Inn Select

San Antonio – N.W. I-10^(b)

216

Embassy Suites

Waco – I-35

170

Holiday Inn

Burlington Hotel & Conference Center^(b)

309

Sheraton

Vienna – At Tysons Corner^(b)

437

Sheraton

Canada

Toronto – Airport

Ontario

445

Holiday Inn Select

Toronto – Yorkdale

Ontario

370

Holiday Inn

Hotel Included in Discontinued Operations

Salt Lake City – Airport^(c)

191

Holiday Inn

Unconsolidated Operations

Hays^(b)

114

Hampton Inn

Hays^(b)

191

Holiday Inn

Salina^(b)

192

Holiday Inn

Salina – I-70^(b)

Holiday Inn Express & Suites

New Orleans – Chateau LeMoyne (In French Quarter/Historic Area)^(b)

171

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.

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'&,'%#0(`.S\_ ` end -----END PRIVACY-ENHANCED MESSAGE-----

Table of Contents

Table of Contents

Table of Contents

Table of Contents

	•	Adjusted EBITDA grew from $47 million in 2003 to $53 million in 2004, and Same-Store EBITDA increased from $45 million in 2003 to $52 million in 2004, a 15.1% increase.

	•	Adjusted FFO was $5 million for the quarter, a $9 million improvement from the loss of $4 million in the prior year period.

	•	Net loss applicable to common shareholders was $21 million for the quarter, compared to a net loss of $150 million for the same period in 2003, and FFO was a loss of $6 million, compared to a loss of $128 million in the same period of 2003.

	•	RevPAR for the quarter was $59.94, as compared to $57.70 in the same period of 2003, and ADR was $99.28 in the current quarter, compared to $96.45 last year.

	•	Hotel operating profit increased to $50 million for the quarter, compared to $43 million in the prior year, an increase of 14.7%. Hotel operating profit margin during the quarter was 17.5%, an increase of 141 basis points over the 16.1% margin of the prior year.

	•	We sold five hotels, resulting in gross proceeds of $86 million.

	•	Adjusted FFO was $63 million, compared to $38 million in 2003.

	•	Net loss applicable to common shareholders was $135 million, compared to a net loss of $337 million in 2003, and FFO was a loss of $31 million, compared to a loss of $207 million last year.

	•	RevPAR was $64.91, as compared to $61.89 in 2003, and ADR was $99.07, as compared to $97.38 in 2003.

	•	Hotel operating profit increased to $231 million, from $215 million in the prior year, an increase of 7.4%. Hotel operating margin improved to 19.5%, from 19.4% in the prior year.

	•	A labor lockout in San Francisco adversely affected hotel operating profit by an estimated $2 million, and major renovations took room nights out of service and reduced hotel operating profit by an estimated additional $2 million.

	•	The Margate condominium tower at Kingston Plantation in Myrtle Beach, S.C., was completed and sold, realizing a gain of approximately $12 million.

	•	We spent approximately $102 million on capital improvements during 2004.

	•	We sold 17 hotels, resulting in aggregate gross proceeds of $157 million and a net gain of $19 million, and terminated the lease on one hotel.

	•	We issued $524 million in debt, and $160 million in preferred equity.

	•	We prepaid $775 million of debt.

	•	We incurred impairment charges of $38 million.

	•	$5 million ($0.08 per share) of impairment charges related to four non-strategic hotels, which had previously been written down to our then estimated fair value;

	•	$6 million ($0.09 per share) of costs associated with the early retirement of $96 million of Senior Notes; and

	•	$17 million ($0.29 per share) net gain on the sale of non-strategic hotels.

	•	$5 million ($0.08 per share) of asset impairment charges; and

	•	$6 million ($0.09 per share) of costs associated with the early retirement of debt.

	•	$38 million ($0.62 per share) of asset impairment charges related to non-strategic hotels;

	•	$50 million ($0.80 per share) of costs associated with the early retirement of $775 million of Senior Notes;

	•	$5 million ($0.08 per share) of lease termination cost; and

	•	$19 million ($0.33 per share) gain on sale of non-strategic hotels.

	•	We sold 17 non-strategic hotels for gross proceeds of approximately $157 million and terminated the lease on one hotel at a cost of $5 million;

	•	We acquired the 132-room Holiday Inn hotel in Santa Monica, Calif., for $27 million;

	•	We completed the development and sale of the 251-unit Margate condominium tower at the Kingston Plantation in Myrtle Beach, S.C., at a gain of $12 million;

	•	We retired $600 million of Senior Notes paying 10% interest that were scheduled to mature in 2008;

	•	We retired early $175 million of Senior Notes due in October 2004;

	•	We issued $290 million of floating rate Senior Notes due 2011;

	•	We issued $234 million in mortgage debt;

	•	We issued $160 million of convertible preferred stock; and

	•	We spent approximately $102 million in our ongoing capital plan.

	•	Hotel portfolio RevPAR will increase approximately 4.0% to 5.0%, with 75% of the increase coming from ADR improvements;

	•	EBITDA will be between $59 to $61 million;

	•	Hotel operating margins will be approximately 18.9% to 19.3%, or an increase of 10 to 50 basis points over first quarter 2004;

	•	Total interest expense will be $36 million;

	•	FFO per share will be within the range of $0.19 to $0.22; and

	•	Net loss will be between $11 and $13 million or a loss per share of $0.19 to $0.22.

	•	Hotel portfolio RevPAR will increase approximately 5.0% to 6.0%, with 75% of the increase coming from ADR improvements;

	•	EBITDA will be between $259 and $265 million, an increase of 8% to 11% on a same-store basis;

	•	Hotel operating margins will be between 19.9% to 20.2%, an increase of 40 to 70 basis points;

	•	Total interest expense will be $146 million;

	•	FFO per share will be within the range of $1.11 to $1.21;

	•	Ending cash balance will be approximately $112 million; and

	•	Net loss will be between $29 and $35 million or a loss per share of $0.49 to $0.59.

	•	Gains and losses related to early extinguishment of debt and interest rate swaps – We exclude gains and losses related to early extinguishment of debt and interest rate swaps from FFO and EBITDA because we believe that it is not indicative of ongoing operating performance of our hotel assets. This also represents an acceleration of interest expense or a reduction of interest expense, and interest expense is excluded from EBITDA.

	•	Impairment losses – We exclude the effect of impairment losses in computing Adjusted FFO and Adjusted EBITDA because we believe that including these is not consistent with reflecting the ongoing performance of our remaining assets. Additionally, we believe that impairment charges represent accelerated depreciation, and depreciation is excluded from FFO by the NAREIT definition and from EBITDA.

	•	Cumulative effect of a change in accounting principle – Infrequently, the Financial Accounting Standards Board promulgates new accounting standards that require the consolidated statements of operations to reflect the cumulative effect of a change in accounting principle. We exclude these one-time adjustments in computing Adjusted FFO and Adjusted EBITDA because they do not reflect our actual performance for that period.

(a)	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.

(b)	Based on pro rata ownership.

(a)	The stated interest rate on this debt is LIBOR (2.6% at December 31, 2004) plus 4.25%. A $100 million notional amount of this debt has been swapped for a fixed rate of 7.80% resulting in a weighted average rate on these notes at December 31, 2004 of 7.19%.

(b)	This debt has two, one-year extension options, subject to certain contingencies.