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 company, 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 Successor company. The following tables present the consolidating financial information for the Subsidiary Guarantors: FelCor Lodging Limited Partnership Condensed Consolidating Balance Sheet September 30, 2017 (Successor) (in thousands) FelCor LP Subsidiary Guarantors Non-Guarantor Subsidiaries Eliminations Total Consolidated Equity investment in consolidated entities $ 2,532,396 $ — $ — $ (2,532,396 ) $ — Investment in hotel properties, net — 812,380 1,860,348 — 2,672,728 Intangible assets, net — 129,703 — — 129,703 Investment in unconsolidated joint ventures — — 17,117 — 17,117 Cash and cash equivalents 8,994 — 1,509 — 10,503 Restricted cash reserves 436 14 6,221 — 6,671 Related party rent receivable — 9,511 11,337 (8,266 ) 12,582 Prepaid expense and other assets 6,743 1,927 2,388 — 11,058 Total assets $ 2,548,569 $ 953,535 $ 1,898,920 $ (2,540,662 ) $ 2,860,362 Debt, net $ 1,066,275 $ — $ 270,373 $ (32,741 ) $ 1,303,907 Accounts payable and other liabilities 42,843 18,466 19,408 (8,266 ) 72,451 Accrued interest 12,049 — — — 12,049 Distributions payable 4,186 — 122 — 4,308 Total liabilities 1,125,353 18,466 289,903 (41,007 ) 1,392,715 Partnership interests 1,423,216 935,069 1,559,301 (2,499,655 ) 1,417,931 Total FelCor LP partners' capital 1,423,216 935,069 1,559,301 (2,499,655 ) 1,417,931 Noncontrolling interests — — 5,286 — 5,286 Preferred capital in a consolidated joint venture — — 44,430 — 44,430 Total partners’ capital 1,423,216 935,069 1,609,017 (2,499,655 ) 1,467,647 Total liabilities and partners’ capital $ 2,548,569 $ 953,535 $ 1,898,920 $ (2,540,662 ) $ 2,860,362 FelCor Lodging Limited Partnership Condensed Consolidating Balance Sheet December 31, 2016 (Predecessor) (in thousands) FelCor LP Subsidiary Guarantors Non-Guarantor Subsidiaries Eliminations Total Consolidated Investment in hotel properties, net $ — $ 488,528 $ 1,078,295 $ — $ 1,566,823 Equity investment in consolidated entities 1,190,737 — — (1,190,737 ) — Investment in unconsolidated joint ventures 2,410 4,800 1,102 — 8,312 Cash and cash equivalents 13,532 29,141 4,644 — 47,317 Restricted cash reserves — 16,433 3,058 — 19,491 Hotel and other receivables, net — 26,651 — — 26,651 Prepaid expense and other assets 8,438 16,696 13,364 — 38,498 Total assets $ 1,215,117 $ 582,249 $ 1,100,463 $ (1,190,737 ) $ 1,707,092 Debt, net $ 985,767 $ — $ 391,995 $ (39,436 ) $ 1,338,326 Accounts payable and other liabilities 15,209 54,960 8,113 — 78,282 Advance deposits and deferred revenue 923 24,479 3 — 25,405 Accrued interest 12,299 — 451 — 12,750 Distributions payable 14,734 — 124 — 14,858 Total liabilities 1,028,932 79,439 400,686 (39,436 ) 1,469,621 Redeemable units, at redemption value 4,888 — — — 4,888 Preferred units 309,337 — — — 309,337 Common units (128,040 ) 503,765 647,536 (1,151,301 ) (128,040 ) Total partners’ capital 181,297 503,765 647,536 (1,151,301 ) 181,297 Noncontrolling interest in consolidated joint ventures — (955 ) 8,458 — 7,503 Preferred capital in a consolidated joint venture — — 43,783 — 43,783 Total partners’ capital 181,297 502,810 699,777 (1,151,301 ) 232,583 Total liabilities and partners’ capital $ 1,215,117 $ 582,249 $ 1,100,463 $ (1,190,737 ) $ 1,707,092 FelCor Lodging Limited Partnership Condensed Consolidating Statement of Operations and Comprehensive Income For the Period of September 1, 2017 through September 30, 2017 (Successor) (in thousands) FelCor LP Subsidiary Guarantors Non-Guarantor Subsidiaries Eliminations Total Consolidated Revenue Related party lease revenue $ — $ 9,511 $ 11,343 $ — $ 20,854 Total revenue — 9,511 11,343 — 20,854 Expense Depreciation and amortization 38 2,021 3,915 — 5,974 Property tax, insurance and other 8 2,821 1,620 — 4,449 General and administrative 191 — 1 — 192 Transaction costs 1,034 4 1 — 1,039 Total operating expense 1,271 4,846 5,537 — 11,654 Operating income (1,271 ) 4,665 5,806 — 9,200 Interest income 27 — — (24 ) 3 Interest expense (3,980 ) — (825 ) 26 (4,779 ) Income (loss) before equity in income from joint ventures (5,224 ) 4,665 4,981 2 4,424 Equity in income from consolidated joint ventures 9,641 — — (9,641 ) — Equity in income from unconsolidated joint ventures — — 115 — 115 Net income and comprehensive income 4,417 4,665 5,096 (9,639 ) 4,539 Income attributable to noncontrolling interests (51 ) — — — (51 ) Preferred distributions from a consolidated joint venture — — (122 ) — (122 ) Net income and comprehensive income attributable to FelCor LP $ 4,366 $ 4,665 $ 4,974 $ (9,639 ) $ 4,366 FelCor Lodging Limited Partnership Condensed Consolidating Statement of Operations and Comprehensive Loss For the Period of July 1, 2017 through August 31, 2017 (Predecessor) (in thousands) FelCor LP Subsidiary Guarantors Non-Guarantor Subsidiaries Eliminations Total Consolidated Revenue Room revenue $ — $ 111,977 $ — $ — $ 111,977 Food and beverage revenue — 20,577 — — 20,577 Percentage lease revenue — — (20 ) 20 — Other revenue 2 10,281 134 — 10,417 Total revenue 2 142,835 114 20 142,971 Expense Room expense — 28,652 — — 28,652 Food and beverage expense — 17,325 — — 17,325 Management and franchise fee expense — 4,625 — — 4,625 Other operating expense — 37,272 — — 37,272 Depreciation and amortization 78 6,494 11,127 — 17,699 Property tax, insurance and other 815 7,286 4,526 20 12,647 General and administrative — 1,889 896 — 2,785 Transaction costs 61,932 — — — 61,932 Total operating expense 62,825 103,543 16,549 20 182,937 Operating loss (62,823 ) 39,292 (16,435 ) — (39,966 ) Intercompany interest income (expense) 56 — (56 ) — — Interest income 23 23 — — 46 Interest expense (9,637 ) — (3,271 ) — (12,908 ) Loss on debt extinguishment — — (3,278 ) — (3,278 ) Loss before equity in income from joint ventures (72,381 ) 39,315 (23,040 ) — (56,106 ) Equity in income from consolidated entities 16,160 — — (16,160 ) — Equity in income from unconsolidated joint ventures 165 399 (8 ) — 556 Loss from continuing operations before income tax benefit (56,056 ) 39,714 (23,048 ) (16,160 ) (55,550 ) Income tax benefit 20 531 — — 551 Loss from continuing operations (56,036 ) 40,245 (23,048 ) (16,160 ) (54,999 ) Loss from discontinued operations (3,415 ) — — — (3,415 ) Loss before loss on sale of hotel properties (59,451 ) 40,245 (23,048 ) (16,160 ) (58,414 ) Loss on sale of hotel properties 2 (913 ) 20 — (891 ) Net loss and comprehensive loss (59,449 ) 39,332 (23,028 ) (16,160 ) (59,305 ) Loss attributable to noncontrolling interests in consolidated joint ventures — 76 32 — 108 Preferred distributions - consolidated joint venture — — (252 ) — (252 ) Net loss and comprehensive loss attributable to FelCor LP (59,449 ) 39,408 (23,248 ) (16,160 ) (59,449 ) Preferred distributions (4,186 ) — — — (4,186 ) Net loss attributable to FelCor LP common unitholders $ (63,635 ) $ 39,408 $ (23,248 ) $ (16,160 ) $ (63,635 ) FelCor Lodging Limited Partnership Condensed Consolidating Statement of Operations and Comprehensive Loss For the Three Months Ended September 30, 2016 (Predecessor) (in thousands) FelCor LP Subsidiary Guarantors Non-Guarantor Subsidiaries Eliminations Total Consolidated Revenue Room revenue $ — $ 174,169 $ — $ — $ 174,169 Food and beverage revenue — 34,260 — — 34,260 Percentage lease revenue — — 45,242 (45,242 ) — Other revenue 15 14,365 172 — 14,552 Total revenue 15 222,794 45,414 (45,242 ) 222,981 Expense Room expense — 44,032 — — 44,032 Food and beverage expense — 28,227 — — 28,227 Management and franchise fee expense — 8,047 — — 8,047 Other operating expense — 56,695 — — 56,695 Depreciation and amortization 49 11,284 16,947 — 28,280 Impairment loss — 20,126 — — 20,126 Property tax, insurance and other 6,150 55,603 6,212 (45,242 ) 22,723 General and administrative — 3,517 2,727 — 6,244 Total operating expense 6,199 227,531 25,886 (45,242 ) 214,374 Operating income (6,184 ) (4,737 ) 19,528 — 8,607 Intercompany interest income (expense) 95 — (95 ) — — Interest income 10 6 2 — 18 Interest expense (14,618 ) — (4,828 ) — (19,446 ) Loss before equity in income from joint ventures (20,697 ) (4,731 ) 14,607 — (10,821 ) Equity in income from consolidated entities 17,088 — — (17,088 ) — Equity in income from unconsolidated joint ventures 378 447 (11 ) — 814 Loss before income tax benefit (3,231 ) (4,284 ) 14,596 (17,088 ) (10,007 ) Income tax benefit 576 (484 ) 154 — 246 Loss from continuing operations (2,655 ) (4,768 ) 14,750 (17,088 ) (9,761 ) Loss from discontinued operations (3,131 ) — — — (3,131 ) Loss before gain on sale of hotel properties (5,786 ) (4,768 ) 14,750 (17,088 ) (12,892 ) Gain on sale of hotel properties 637 7,445 (84 ) — 7,998 Net loss and comprehensive loss (5,149 ) 2,677 14,666 (17,088 ) (4,894 ) Loss attributable to noncontrolling interests in consolidated joint ventures — 100 14 — 114 Preferred distributions - consolidated joint venture — — (369 ) — (369 ) Net loss and comprehensive loss attributable to FelCor LP (5,149 ) 2,777 14,311 (17,088 ) (5,149 ) Preferred distributions (6,279 ) — — — (6,279 ) Net loss attributable to FelCor LP common unitholders $ (11,428 ) $ 2,777 $ 14,311 $ (17,088 ) $ (11,428 ) FelCor Lodging Limited Partnership Condensed Consolidating Statement of Operations and Comprehensive Loss For the Period of January 1, 2017 through August 31, 2017 (Predecessor) (in thousands) FelCor LP Subsidiary Guarantors Non-Guarantor Subsidiaries Eliminations Total Consolidated Revenue Room revenue $ — $ 425,682 $ — $ — $ 425,682 Food and beverage revenue — 90,572 — — 90,572 Percentage lease revenue — — 84,509 (84,509 ) — Other revenue 41 34,883 337 — 35,261 Total revenue 41 551,137 84,846 (84,509 ) 551,515 Expense Room expense — 112,813 — — 112,813 Food and beverage expense — 71,828 — — 71,828 Management and franchise fee expense — 19,901 — — 19,901 Other operating expense — 147,827 — — 147,827 Depreciation and amortization 309 28,064 44,692 — 73,065 Impairment loss — 35,109 — — 35,109 Property tax, insurance and other 921 111,020 16,846 (84,509 ) 44,278 General and administrative — 8,914 7,092 — 16,006 Transaction costs 68,248 — — — 68,248 Total operating expense 69,478 535,476 68,630 (84,509 ) 589,075 Operating loss (69,437 ) 15,661 16,216 — (37,560 ) Intercompany interest income (expense) 241 — (241 ) — — Other income (expense) — — 100 — 100 Interest income 66 59 1 — 126 Interest expense (38,722 ) — (12,968 ) — (51,690 ) Loss on debt extinguishment — — (3,278 ) — (3,278 ) Loss before equity in income from joint ventures (107,852 ) 15,720 (170 ) — (92,302 ) Equity in income from consolidated entities 12,779 — — (12,779 ) — Equity in income from unconsolidated joint ventures 1,181 (77 ) (30 ) — 1,074 Loss before income tax (93,892 ) 15,643 (200 ) (12,779 ) (91,228 ) Income tax expense (35 ) (464 ) — — (499 ) Loss from continuing operations (93,927 ) 15,179 (200 ) (12,779 ) (91,727 ) Loss from discontinued operations (3,415 ) — — — (3,415 ) Loss before loss on sale of hotel properties (97,342 ) 15,179 (200 ) (12,779 ) (95,142 ) Loss on sale of hotel properties 2 (1,565 ) (201 ) — (1,764 ) Net loss and comprehensive loss (97,340 ) 13,614 (401 ) (12,779 ) (96,906 ) Loss attributable to noncontrolling interests in consolidated joint ventures — 336 209 — 545 Preferred distributions - consolidated joint venture — — (979 ) — (979 ) Net loss and comprehensive loss attributable to FelCor LP (97,340 ) 13,950 (1,171 ) (12,779 ) (97,340 ) Preferred distributions (16,744 ) — — — (16,744 ) Net loss attributable to FelCor LP common unitholders $ (114,084 ) $ 13,950 $ (1,171 ) $ (12,779 ) $ (114,084 ) FelCor Lodging Limited Partnership Condensed Consolidating Statement of Operations and Comprehensive Income For the Nine Months Ended September 30, 2016 (Predecessor) (in thousands) FelCor LP Subsidiary Guarantors Non-Guarantor Subsidiaries Eliminations Total Consolidated Revenue Room revenue $ — $ 514,563 $ — $ — $ 514,563 Food and beverage revenue — 117,489 — — 117,489 Percentage lease revenue — — 135,740 (135,740 ) — Other revenue 202 38,414 363 — 38,979 Total revenue 202 670,466 136,103 (135,740 ) 671,031 Expense Hotel operating expense — 131,479 — — 131,479 Food and beverage expense — 91,775 — — 91,775 Management and franchise fee expense — 25,773 — — 25,773 Other operating expense — 176,090 — — 176,090 Depreciation and amortization 193 35,311 51,136 — 86,640 Impairment loss — 26,459 — — 26,459 Property tax, insurance and other 6,622 165,412 17,845 (135,740 ) 54,139 General and administrative — 11,212 9,479 — 20,691 Total operating expense 6,815 663,511 78,460 (135,740 ) 613,046 Operating income (6,613 ) 6,955 57,643 — 57,985 Intercompany interest income (expense) 283 — (283 ) — — Other income (expense) — — 100 — 100 Interest income 21 24 1 — 46 Interest expense (44,079 ) — (15,022 ) — (59,101 ) Loss before equity in income from joint ventures (50,388 ) 6,979 42,439 — (970 ) Equity in income from consolidated entities 54,930 — — (54,930 ) — Equity in income from unconsolidated joint ventures 1,094 326 (34 ) — 1,386 Income before income tax 5,636 7,305 42,405 (54,930 ) 416 Income tax expense 411 (709 ) 154 — (144 ) Income from continuing operations 6,047 6,596 42,559 (54,930 ) 272 Loss from discontinued operations (3,131 ) — — — (3,131 ) Loss before gain on sale of hotel properties 2,916 6,596 42,559 (54,930 ) (2,859 ) Gain on sale of hotel properties 387 6,688 (421 ) — 6,654 Net income and comprehensive income 3,303 13,284 42,138 (54,930 ) 3,795 Loss attributable to noncontrolling interests in consolidated joint ventures — 413 188 — 601 Preferred distributions - consolidated joint venture — — (1,093 ) — (1,093 ) Net income and comprehensive income attributable to FelCor LP 3,303 13,697 41,233 (54,930 ) 3,303 Preferred distributions (18,837 ) — — — (18,837 ) Net loss attributable to FelCor LP common unitholders $ (15,534 ) $ 13,697 $ 41,233 $ (54,930 ) $ (15,534 ) FelCor Lodging Limited Partnership Condensed Consolidating Statement of Cash Flows For the Period of September 1, 2017 through September 30, 2017 (Successor) (in thousands) FelCor LP Subsidiary Guarantors Non-Guarantor Subsidiaries Eliminations Total Consolidated Operating activities: Cash flows from operating activities $ (8,078 ) $ (1,666 ) $ (1,418 ) $ — $ (11,162 ) Investing activities: Improvements and additions to hotel properties — (16 ) (39 ) — (55 ) Increase in restricted cash reserves — — (623 ) — (623 ) Intercompany financing (3,942 ) — — 3,942 — Cash flows from investing activities (3,942 ) (16 ) (662 ) 3,942 (678 ) Financing activities: Repayment of borrowings — — (471 ) — (471 ) Contributions from partners 35,545 — — — 35,545 Distributions to partners (19,123 ) — — — (19,123 ) Distribution of FelCor TRS — (40,878 ) — — (40,878 ) Preferred distributions - consolidated joint venture — — (126 ) — (126 ) Intercompany financing — 1,682 2,260 (3,942 ) — Cash flows from financing activities 16,422 (39,196 ) 1,663 (3,942 ) (25,053 ) Net change in cash and cash equivalents 4,402 (40,878 ) (417 ) — (36,893 ) Cash and cash equivalents at beginning of period 4,592 40,878 1,926 — 47,396 Cash and cash equivalents at end of period $ 8,994 $ — $ 1,509 $ — $ 10,503 FelCor Lodging Limited Partnership Condensed Consolidating Statement of Cash Flows For the Period of January 1, 2017 through August 31, 2017 (Predecessor) (in thousands) FelCor LP Subsidiary Guarantors Non-Guarantor Subsidiaries Eliminations Total Consolidated Operating activities: Cash flows from operating activities $ (40,773 ) $ 85,899 $ 54,214 $ — $ 99,340 Investing activities: Improvements and additions to hotel properties 1 (16,727 ) (47,076 ) — (63,802 ) Proceeds from the sale of hotel properties, net (696 ) 74,281 (169 ) — 73,416 Decrease (increase) in restricted cash reserves — 5,431 (2,978 ) — 2,453 Distributions from unconsolidated joint ventures 840 — — — 840 Intercompany financing 91,391 — — (91,391 ) — Cash flows from investing activities 91,536 62,985 (50,223 ) (91,391 ) 12,907 Financing activities: Proceeds from borrowings — — 66,000 — 66,000 Repayment of borrowings — — (121,691 ) — (121,691 ) Distributions to noncontrolling interests — — (150 ) — (150 ) Contributions from noncontrolling interests — 333 — — 333 Distributions to preferred unitholders (18,836 ) — — — (18,836 ) Distributions to common unitholders (30,926 ) — — — (30,926 ) Net proceeds from the issuance of preferred capital in a consolidated joint venture — — 647 — 647 Intercompany financing — (140,853 ) 49,462 91,391 — Other (6,568 ) — (977 ) — (7,545 ) Cash flows from financing activities (56,330 ) (140,520 ) (6,709 ) 91,391 (112,168 ) Net change in cash and cash equivalents (5,567 ) 8,364 (2,718 ) — 79 Cash and cash equivalents at beginning of period 13,532 29,141 4,644 — 47,317 Cash and cash equivalents at end of period $ 7,965 $ 37,505 $ 1,926 $ — $ 47,396 FelCor Lodging Limited Partnership Condensed Consolidating Statement of Cash Flows For the Nine Months Ended September 30, 2016 (Predecessor) (in thousands) FelCor LP Subsidiary Guarantors Non-Guarantor Subsidiaries Eliminations Total Consolidated Operating activities: Cash flows from operating activities $ (47,665 ) $ 60,960 $ 100,749 $ — $ 114,044 Investing activities: Acquisition of land — — (8,209 ) — (8,209 ) Improvements and additions to hotel properties (2 ) (23,936 ) (27,390 ) — (51,328 ) Proceeds from the sale of hotel properties, net (1,104 ) 103,077 (252 ) — 101,721 Insurance proceeds — — 94 — 94 Increase in restricted cash reserves — (1,456 ) (2,972 ) — (4,428 ) Distributions from unconsolidated joint ventures 786 — — — 786 Intercompany financing 120,897 — — (120,897 ) — Cash flows from investing activities 120,577 77,685 (38,729 ) (120,897 ) 38,636 Financing activities: Proceeds from borrowings — — 55,000 — 55,000 Repayment of borrowings — — (141,989 ) — (141,989 ) Payment of deferred financing fees — — (12 ) — (12 ) Distributions to noncontrolling interests — (14 ) (2 ) — (16 ) Contributions from noncontrolling interests — 313 239 — 552 Repurchase of common units (30,462 ) — — — (30,462 ) Distributions to preferred unitholders (18,837 ) — — — (18,837 ) Distributions to common unitholders (25,141 ) — — — (25,141 ) Net proceeds from the issuance of preferred capital in a consolidated joint venture — — 597 — 597 Intercompany financing — (142,194 ) 21,297 120,897 — Other (702 ) — (1,097 ) — (1,799 ) Cash flows from financing activities (75,142 ) (141,895 ) (65,967 ) 120,897 (162,107 ) Effect of exchange rate changes on cash — — (9 ) — (9 ) Net change in cash and cash equivalents (2,230 ) (3,250 ) (3,956 ) — (9,436 ) Cash and cash equivalents at beginning of period 21,219 33,873 4,694 — 59,786 Cash and cash equivalents at end of period $ 18,989 $ 30,623 $ 738 $ — $ 50,350 |