FelCor LP's Consolidating Financial Information | FelCor LP's Consolidating Financial Information Certain of FelCor LP's 100% owned subsidiaries (FCH/PSH, L.P.; FelCor/CMB Buckhead Hotel, L.L.C.; FelCor/CMB Marlborough Hotel, L.L.C.; FelCor/CMB Orsouth Holdings, L.P.; FelCor/CMB SSF Holdings, L.P.; FelCor/CSS Holdings, L.P.; FelCor Dallas Love Field Owner, L.L.C.; FelCor Milpitas Owner, L.L.C.; FelCor TRS Borrower 4, L.L.C.; FelCor Hotel Asset Company, L.L.C.; FelCor St. Pete (SPE), L.L.C.; FelCor Esmeralda (SPE), L.L.C.; FelCor S-4 Hotels (SPE), L.L.C.; Madison 237 Hotel, L.L.C.; Myrtle Beach Owner, L.L.C.; and Royalton 44 Hotel, L.L.C., collectively the “Subsidiary Guarantors”), together with Rangers, guaranty, fully and unconditionally, except where subject to customary release provisions as described below, and jointly and severally, our senior notes debt. The guaranties by the Subsidiary Guarantors may be automatically and unconditionally released upon (i) the sale or other disposition of all of the capital stock of the Subsidiary Guarantor or the sale or disposition of all or substantially all of the assets of the Subsidiary Guarantor, if, in each case, as a result of such sale or disposition, such Subsidiary Guarantor ceases to be a subsidiary of FelCor LP, (ii) the consolidation or merger of any such Subsidiary Guarantor with any person other than FelCor LP, or a subsidiary of FelCor LP, if, as a result of such consolidation or merger, such Subsidiary Guarantor ceases to be a subsidiary of the Operating Partnership, (iii) a legal defeasance or covenant defeasance of the indenture, (iv) the unconditional and complete release of such Subsidiary Guarantor in accordance with the modification and waiver provisions of the indenture, or (v) the designation of a restricted subsidiary that is a Subsidiary Guarantor as an unrestricted subsidiary under and in compliance with the indenture. For the Predecessor period, FelCor TRS was a subsidiary guarantor in the condensed consolidating balance sheet, the condensed consolidating statements of operations and comprehensive income, and the condensed consolidating statements of cash flows. Pursuant to the terms of each of the indentures governing the Senior Notes, upon completion of the distribution of the equity interests in FelCor TRS, FelCor TRS' guarantee of the Senior Notes was automatically released and FelCor TRS Holdings, L.L.C. ceased being a subsidiary guarantor of the Senior Notes. Accordingly, FelCor TRS is not a subsidiary guarantor in the FelCor LP consolidating financial information for the Company. The following tables present the consolidating financial information for the Subsidiary Guarantors: FelCor Lodging Limited Partnership Condensed Consolidating Balance Sheet June 30, 2018 (Successor) (in thousands) FelCor LP Subsidiary Guarantors Non-Guarantor Subsidiaries Eliminations Total Consolidated Equity investment in consolidated entities $ 2,209,305 $ — $ — $ (2,209,305 ) $ — Investment in hotel properties, net — 725,334 1,548,664 — 2,273,998 Investment in unconsolidated joint ventures 16,825 — — — 16,825 Cash and cash equivalents 9,611 — 1,544 — 11,155 Restricted cash reserves 436 — 4,521 — 4,957 Related party rent receivable — 18,559 32,749 — 51,308 Intangible assets, net — 47,553 68,755 — 116,308 Prepaid expense and other assets 2,367 692 3,620 — 6,679 Assets of hotel properties held for sale, net — — 88,168 — 88,168 Total assets $ 2,238,544 $ 792,138 $ 1,748,021 $ (2,209,305 ) $ 2,569,398 Debt, net $ 507,685 $ — $ 267,118 $ (32,709 ) $ 742,094 Accounts payable and other liabilities 7,661 16,122 20,662 — 44,445 Related party lease termination fee payable — 1,536 7,707 — 9,243 Accrued interest 2,463 — — — 2,463 Distributions payable — — 122 — 122 Total liabilities 517,809 17,658 295,609 (32,709 ) 798,367 Partnership interests 1,720,735 774,480 1,402,116 (2,176,596 ) 1,720,735 Total partners' capital, excluding noncontrolling interest 1,720,735 774,480 1,402,116 (2,176,596 ) 1,720,735 Noncontrolling interest in consolidated joint ventures — — 5,866 — 5,866 Preferred capital in a consolidated joint venture — — 44,430 — 44,430 Total partners’ capital 1,720,735 774,480 1,452,412 (2,176,596 ) 1,771,031 Total liabilities and partners’ capital $ 2,238,544 $ 792,138 $ 1,748,021 $ (2,209,305 ) $ 2,569,398 FelCor Lodging Limited Partnership Condensed Consolidating Balance Sheet December 31, 2017 (Successor) (in thousands) FelCor LP Subsidiary Guarantors Non-Guarantor Subsidiaries Eliminations Total Consolidated Equity investment in consolidated entities $ 2,384,094 $ — $ — $ (2,384,094 ) $ — Investment in hotel properties, net — 856,541 1,641,339 — 2,497,880 Investment in unconsolidated joint ventures 16,912 — — — 16,912 Cash and cash equivalents 9,202 — 5,526 — 14,728 Restricted cash reserves 436 — 2,867 — 3,303 Related party rent receivable — 32,200 47,890 — 80,090 Intangible assets, net — 48,846 69,324 — 118,170 Prepaid expense and other assets 4,405 3,292 4,994 — 12,691 Total assets $ 2,415,049 $ 940,879 $ 1,771,940 $ (2,384,094 ) $ 2,743,774 Debt, net $ 1,062,716 $ — $ 269,098 $ (32,709 ) $ 1,299,105 Accounts payable and other liabilities 20,018 13,605 20,568 — 54,191 Related party lease termination fee payable — — 7,707 — 7,707 Accrued interest 12,286 — — — 12,286 Distributions payable — — 126 — 126 Total liabilities 1,095,020 13,605 297,499 (32,709 ) 1,373,415 Partnership interests 1,320,029 927,274 1,424,111 (2,351,385 ) 1,320,029 Total partners' capital, excluding noncontrolling interest 1,320,029 927,274 1,424,111 (2,351,385 ) 1,320,029 Noncontrolling interest in consolidated joint ventures — — 5,900 — 5,900 Preferred capital in a consolidated joint venture — — 44,430 — 44,430 Total partners’ capital 1,320,029 927,274 1,474,441 (2,351,385 ) 1,370,359 Total liabilities and partners’ capital $ 2,415,049 $ 940,879 $ 1,771,940 $ (2,384,094 ) $ 2,743,774 FelCor Lodging Limited Partnership Condensed Consolidating Statement of Operations and Comprehensive Income For the Three Months Ended June 30, 2018 (Successor) (in thousands) FelCor LP Subsidiary Guarantors Non-Guarantor Subsidiaries Eliminations Total Consolidated Revenue Related party lease revenue $ — $ 23,833 $ 36,817 $ — $ 60,650 Total revenue — 23,833 36,817 — 60,650 Expense Depreciation and amortization 114 8,361 12,017 — 20,492 Property tax, insurance and other 61 7,228 6,767 — 14,056 General and administrative 492 15 44 — 551 Transaction costs 474 92 81 — 647 Total operating expense 1,141 15,696 18,909 — 35,746 Operating income (1,141 ) 8,137 17,908 — 24,904 Other income 2 — 100 — 102 Interest income 131 — — (78 ) 53 Interest expense (5,944 ) — (2,742 ) 78 (8,608 ) Gain on extinguishment of indebtedness 7 — — — 7 Income before equity in income from unconsolidated joint ventures (6,945 ) 8,137 15,266 — 16,458 Equity in income from consolidated entities 23,034 — — (23,034 ) — Equity in income from unconsolidated joint ventures 611 — — — 611 Income from operations 16,700 8,137 15,266 (23,034 ) 17,069 Gain on sale of hotel properties — (17 ) 59 — 42 Net income and comprehensive income 16,700 8,120 15,325 (23,034 ) 17,111 Noncontrolling interest in consolidated joint ventures — — (42 ) — (42 ) Preferred distributions - consolidated joint venture — — (369 ) — (369 ) Net income and comprehensive income attributable to FelCor LP $ 16,700 $ 8,120 $ 14,914 $ (23,034 ) $ 16,700 FelCor Lodging Limited Partnership Condensed Consolidating Statement of Operations and Comprehensive Loss For the Three Months Ended June 30, 2017 (Predecessor) (in thousands) FelCor LP Subsidiary Guarantors Non-Guarantor Subsidiaries Eliminations Total Consolidated Revenue Room revenue $ — $ 168,772 $ — $ — $ 168,772 Food and beverage revenue — 37,921 — — 37,921 Related party lease revenue — — 46,486 (46,486 ) — Other revenue 36 13,569 142 — 13,747 Total revenue 36 220,262 46,628 (46,486 ) 220,440 Expense Room expense — 43,483 — — 43,483 Food and beverage expense — 28,281 — — 28,281 Management and franchise fee expense — 7,726 — — 7,726 Other operating expense — 56,167 — — 56,167 Total property operating expense — 135,657 — — 135,657 Depreciation and amortization 116 10,712 16,700 — 27,528 Impairment loss — 10,271 — — 10,271 Property tax, insurance and other 67 57,042 6,319 (46,486 ) 16,942 General and administrative — 3,396 2,885 — 6,281 Transaction costs 5,843 — — — 5,843 Total operating expense 6,026 217,078 25,904 (46,486 ) 202,522 Operating income (5,990 ) 3,184 20,724 — 17,918 Other income — — 100 — 100 Intercompany interest income (expense) 90 — (90 ) — — Interest income 24 23 — — 47 Interest expense (14,519 ) — (4,944 ) — (19,463 ) Loss before equity in income from unconsolidated joint ventures (20,395 ) 3,207 15,790 — (1,398 ) Equity in income from consolidated entities 18,056 — — (18,056 ) — Equity in income from unconsolidated joint ventures 575 84 (11 ) — 648 Loss before income tax expense (1,764 ) 3,291 15,779 (18,056 ) (750 ) Income tax expense (30 ) (473 ) — — (503 ) Loss from operations (1,794 ) 2,818 15,779 (18,056 ) (1,253 ) Loss on sale of hotel properties — (126 ) (81 ) — (207 ) Net loss and comprehensive loss (1,794 ) 2,692 15,698 (18,056 ) (1,460 ) Noncontrolling interest in consolidated joint ventures — (6 ) 39 — 33 Preferred distributions - consolidated joint venture — — (367 ) — (367 ) Net loss and comprehensive loss attributable to FelCor LP (1,794 ) 2,686 15,370 (18,056 ) (1,794 ) Preferred distributions (6,279 ) — — — (6,279 ) Net loss and comprehensive loss attributable to FelCor LP common unitholders $ (8,073 ) $ 2,686 $ 15,370 $ (18,056 ) $ (8,073 ) FelCor Lodging Limited Partnership Condensed Consolidating Statement of Operations and Comprehensive Income For the Six Months Ended June 30, 2018 (Successor) (in thousands) FelCor LP Subsidiary Guarantors Non-Guarantor Subsidiaries Eliminations Total Consolidated Revenue Related party lease revenue $ — $ 42,685 $ 71,515 $ — $ 114,200 Total revenue — 42,685 71,515 — 114,200 Expense Depreciation and amortization 228 17,113 23,863 — 41,204 Property tax, insurance and other 103 14,713 14,071 — 28,887 General and administrative 973 55 131 — 1,159 Transaction costs 1,983 101 91 — 2,175 Total operating expense 3,287 31,982 38,156 — 73,425 Operating income (3,287 ) 10,703 33,359 — 40,775 Other income 10 — 100 — 110 Interest income 239 — — (156 ) 83 Interest expense (16,530 ) — (5,381 ) 156 (21,755 ) Gain on extinguishment of indebtedness 12,936 — — — 12,936 Income before equity in income from unconsolidated joint ventures (6,632 ) 10,703 28,078 — 32,149 Equity in income from consolidated entities 28,756 — — (28,756 ) — Equity in income from unconsolidated joint ventures 727 — — — 727 Income from operations 22,851 10,703 28,078 (28,756 ) 32,876 Loss on sale of hotel properties — (9,415 ) 91 — (9,324 ) Net income and comprehensive income 22,851 1,288 28,169 (28,756 ) 23,552 Noncontrolling interest in consolidated joint ventures — — 34 — 34 Preferred distributions - consolidated joint venture — — (735 ) — (735 ) Net income and comprehensive income attributable to FelCor LP $ 22,851 $ 1,288 $ 27,468 $ (28,756 ) $ 22,851 FelCor Lodging Limited Partnership Condensed Consolidating Statement of Operations and Comprehensive Loss For the Six Months Ended June 30, 2017 (Predecessor) (in thousands) FelCor LP Subsidiary Guarantors Non-Guarantor Subsidiaries Eliminations Total Consolidated Revenue Room revenue $ — $ 313,705 $ — $ — $ 313,705 Food and beverage revenue — 69,995 — — 69,995 Related party lease revenue — — 84,530 (84,530 ) — Other revenue 39 24,602 203 — 24,844 Total revenue 39 408,302 84,733 (84,530 ) 408,544 Expense Room expense — 84,161 — — 84,161 Food and beverage expense — 54,503 — — 54,503 Management and franchise fee expense — 15,276 — — 15,276 Other operating expense — 110,555 — — 110,555 Total property operating expense — 264,495 — — 264,495 Depreciation and amortization 231 21,570 33,565 — 55,366 Impairment loss — 35,109 — — 35,109 Property tax, insurance and other 107 103,734 12,320 (84,530 ) 31,631 General and administrative — 7,025 6,196 — 13,221 Transaction costs 6,316 — — — 6,316 Total operating expense 6,654 431,933 52,081 (84,530 ) 406,138 Operating income (6,615 ) (23,631 ) 32,652 — 2,406 Other income — — 100 — 100 Intercompany interest income (expense) 184 — (184 ) — — Interest income 43 37 — — 80 Interest expense (29,084 ) — (9,698 ) — (38,782 ) Loss before equity in income from unconsolidated joint ventures (35,472 ) (23,594 ) 22,870 — (36,196 ) Equity in loss from consolidated entities (3,379 ) — — 3,379 — Equity in income from unconsolidated joint ventures 1,016 (475 ) (23 ) — 518 Loss before income tax expense (37,835 ) (24,069 ) 22,847 3,379 (35,678 ) Income tax expense (56 ) (994 ) — — (1,050 ) Loss from operations (37,891 ) (25,063 ) 22,847 3,379 (36,728 ) Loss on sale of hotel properties — (652 ) (221 ) — (873 ) Net loss and comprehensive loss (37,891 ) (25,715 ) 22,626 3,379 (37,601 ) Noncontrolling interest in consolidated joint ventures — 260 177 — 437 Preferred distributions - consolidated joint venture — — (727 ) — (727 ) Net loss and comprehensive loss attributable to FelCor LP (37,891 ) (25,455 ) 22,076 3,379 (37,891 ) Preferred distributions (12,558 ) — — — (12,558 ) Net loss and comprehensive loss attributable to FelCor LP common unitholders $ (50,449 ) $ (25,455 ) $ 22,076 $ 3,379 $ (50,449 ) FelCor Lodging Limited Partnership Condensed Consolidating Statement of Cash Flows For the Six Months Ended June 30, 2018 (Successor) (in thousands) FelCor LP Subsidiary Guarantors Non-Guarantor Subsidiaries Eliminations Total Consolidated Operating activities: Cash flows from operating activities $ (42,177 ) $ 46,769 $ 72,134 $ — $ 76,726 Investing activities: Proceeds from the sale of hotel properties, net — 116,458 92 — 116,550 Improvements and additions to hotel properties — (10,945 ) (22,848 ) — (33,793 ) Additions to property and equipment (4 ) — — — (4 ) Intercompany financing 201,745 — — (201,745 ) — Cash flows from investing activities 201,741 105,513 (22,756 ) (201,745 ) 82,753 Financing activities: Repayments of borrowings (538,809 ) — (1,495 ) — (540,304 ) Contributions from partners 641,783 — — — 641,783 Distributions to partners (262,128 ) — — — (262,128 ) Payments of deferred financing costs — — (10 ) — (10 ) Preferred distributions - consolidated joint venture — — (739 ) — (739 ) Intercompany financing — (152,282 ) (49,463 ) 201,745 — Cash flows from financing activities (159,154 ) (152,282 ) (51,707 ) 201,745 (161,398 ) Net change in cash, cash equivalents, and restricted cash reserves 410 — (2,329 ) — (1,919 ) Cash, cash equivalents, and restricted cash reserves, beginning of year 9,637 — 8,394 — 18,031 Cash, cash equivalents, and restricted cash reserves, end of period $ 10,047 $ — $ 6,065 $ — $ 16,112 FelCor Lodging Limited Partnership Condensed Consolidating Statement of Cash Flows For the Six Months Ended June 30, 2017 (Predecessor) (in thousands) FelCor LP Subsidiary Guarantors Non-Guarantor Subsidiaries Eliminations Total Consolidated Operating activities: Cash flows from operating activities $ (33,170 ) $ 41,039 $ 59,380 $ — $ 67,249 Investing activities: Net payments related to asset sales (623 ) (524 ) (149 ) — (1,296 ) Improvements and additions to hotel properties 5 (12,604 ) (29,322 ) — (41,921 ) Distributions from unconsolidated joint ventures in excess of earnings 840 — — — 840 Intercompany financing 64,241 — — (64,241 ) — Cash flows from investing activities 64,463 (13,128 ) (29,471 ) (64,241 ) (42,377 ) Financing activities: Proceeds from borrowings — — 51,000 — 51,000 Repayments of borrowings — — (30,419 ) — (30,419 ) Distributions to preferred unitholders (12,558 ) — — — (12,558 ) Distributions to common unitholders (16,631 ) — — — (16,631 ) Contributions from noncontrolling interests — 299 — — 299 Net proceeds from the issuance of preferred capital in a consolidated joint venture — — 648 — 648 Intercompany financing — (13,940 ) (50,301 ) 64,241 — Other (955 ) — (729 ) — (1,684 ) Cash flows from financing activities (30,144 ) (13,641 ) (29,801 ) 64,241 (9,345 ) Net change in cash, cash equivalents, and restricted cash reserves 1,149 14,270 108 — 15,527 Cash, cash equivalents, and restricted cash reserves, beginning of year 13,532 45,574 7,702 — 66,808 Cash, cash equivalents, and restricted cash reserves, end of period $ 14,681 $ 59,844 $ 7,810 $ — $ 82,335 |