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 December 31, 2018 (Successor) (in thousands) FelCor LP Subsidiary Guarantors Non-Guarantor Subsidiaries Eliminations Total Consolidated Equity investment in consolidated entities $ 1,913,418 $ — $ — $ (1,913,418 ) $ — Investment in hotel properties, net — 656,570 1,466,853 — 2,123,423 Investment in unconsolidated joint ventures 15,716 — — — 15,716 Cash and cash equivalents 10,778 — 10,573 — 21,351 Restricted cash reserves 441 — 2,770 — 3,211 Related party rent receivable — 3,666 12,835 — 16,501 Intangible assets, net — 46,260 — — 46,260 Prepaid expense and other assets 1,819 1,297 3,436 — 6,552 Related party prepaid interest — — 180 — 180 Total assets $ 1,942,172 $ 707,793 $ 1,496,647 $ (1,913,418 ) $ 2,233,194 Debt, net $ 505,322 $ — $ 154,015 $ (32,709 ) $ 626,628 Related party debt — — 85,000 — 85,000 Accounts payable and other liabilities 9,288 14,376 19,725 — 43,389 Accrued interest 2,463 — — — 2,463 Distributions payable — — 126 — 126 Total liabilities 517,073 14,376 258,866 (32,709 ) 757,606 Partnership interests 1,425,099 693,417 1,187,292 (1,880,709 ) 1,425,099 Total partners' capital, excluding noncontrolling interest 1,425,099 693,417 1,187,292 (1,880,709 ) 1,425,099 Noncontrolling interest in consolidated joint ventures — — 6,059 — 6,059 Preferred capital in a consolidated joint venture — — 44,430 — 44,430 Total partners’ capital 1,425,099 693,417 1,237,781 (1,880,709 ) 1,475,588 Total liabilities and partners’ capital $ 1,942,172 $ 707,793 $ 1,496,647 $ (1,913,418 ) $ 2,233,194 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 Year Ended December 31, 2018 (Successor) (in thousands) FelCor LP Subsidiary Guarantors Non-Guarantor Subsidiaries Eliminations Total Consolidated Revenues Related party lease revenue $ — $ 87,898 $ 129,699 $ — $ 217,597 Total revenues — 87,898 129,699 — 217,597 Expenses Depreciation and amortization 458 31,806 46,227 — 78,491 Property tax, insurance and other 134 27,948 25,672 — 53,754 General and administrative 840 117 99 — 1,056 Transaction costs 2,039 8 139 — 2,186 Total operating expenses 3,471 59,879 72,137 — 135,487 Other income 10 — 103 — 113 Interest income 805 — 84 (578 ) 311 Interest expense (28,428 ) — (10,080 ) 578 (37,930 ) Related party interest expense — — (708 ) — (708 ) Gain on sale of hotel properties, net — (15,763 ) 34,186 — 18,423 Gain on extinguishment of indebtedness, net 12,931 — (1,665 ) — 11,266 Income before equity in income from unconsolidated joint ventures (18,153 ) 12,256 79,482 — 73,585 Equity in income from consolidated entities 90,096 — — (90,096 ) — Equity in income from unconsolidated joint ventures 1,395 — — — 1,395 Net income and comprehensive income 73,338 12,256 79,482 (90,096 ) 74,980 Noncontrolling interest in consolidated joint ventures — — (159 ) — (159 ) Preferred distributions - consolidated joint venture — — (1,483 ) — (1,483 ) Net income and comprehensive income attributable to FelCor LP $ 73,338 $ 12,256 $ 77,840 $ (90,096 ) $ 73,338 FelCor Lodging Limited Partnership Condensed Consolidating Statement of Operations and Comprehensive Income For the Period of September 1, 2017 through December 31, 2017 (Successor) (in thousands) FelCor LP Subsidiary Guarantors Non-Guarantor Subsidiaries Eliminations Total Consolidated Revenues Related party lease revenue $ — $ 32,572 $ 48,687 $ — $ 81,259 Total revenues — 32,572 48,687 — 81,259 Expenses Depreciation and amortization 151 12,164 16,650 — 28,965 Property tax, insurance and other 25 8,800 8,237 — 17,062 General and administrative 904 59 56 — 1,019 Transaction costs 4,079 105 9 — 4,193 Total operating expenses 5,159 21,128 24,952 — 51,239 Interest income 113 — 1 (104 ) 10 Interest expense (15,918 ) — (3,456 ) 104 (19,270 ) Loss on sale of hotel properties — — (6,637 ) — (6,637 ) Income before equity in income from unconsolidated joint ventures (20,964 ) 11,444 13,643 — 4,123 Equity in income from consolidated entities 24,434 — — (24,434 ) — Equity in income from unconsolidated joint ventures 661 — — — 661 Net income and comprehensive income 4,131 11,444 13,643 (24,434 ) 4,784 Noncontrolling interest in consolidated joint ventures — — (157 ) — (157 ) Preferred distributions - consolidated joint venture — — (496 ) — (496 ) Net income and comprehensive income attributable to FelCor LP $ 4,131 $ 11,444 $ 12,990 $ (24,434 ) $ 4,131 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 Revenues Room revenue $ — $ 425,682 $ — $ — $ 425,682 Food and beverage revenue — 90,572 — — 90,572 Related party lease revenue — — 84,509 (84,509 ) — Other revenue 41 34,883 337 — 35,261 Total revenues 41 551,137 84,846 (84,509 ) 551,515 Expenses 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 Total property operating expenses — 352,369 — — 352,369 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 expenses 69,478 535,476 68,630 (84,509 ) 589,075 Other income — — 100 — 100 Intercompany interest income (expense) 241 — (241 ) — — Interest income 66 59 1 — 126 Interest expense (38,722 ) — (12,968 ) — (51,690 ) Loss on sale of hotel properties, net 2 (1,565 ) (201 ) — (1,764 ) Loss on extinguishment of indebtedness — — (3,278 ) — (3,278 ) Loss before equity in income from unconsolidated joint ventures (107,850 ) 14,155 (371 ) — (94,066 ) 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 expense (93,890 ) 14,078 (401 ) (12,779 ) (92,992 ) Income tax expense (35 ) (464 ) — — (499 ) Loss from continuing operations (93,925 ) 13,614 (401 ) (12,779 ) (93,491 ) Loss from discontinued operations (3,415 ) — — — (3,415 ) Net loss and comprehensive loss (97,340 ) 13,614 (401 ) (12,779 ) (96,906 ) Noncontrolling interest 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 and comprehensive 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 Year Ended December 31, 2016 (Predecessor) (in thousands) FelCor LP Subsidiary Guarantors Non-Guarantor Subsidiaries Eliminations Total Consolidated Revenues Room revenue $ — $ 661,640 $ — $ — $ 661,640 Food and beverage revenue — 155,227 — — 155,227 Related party lease revenue — — 134,462 (134,462 ) — Other revenue 210 49,449 428 — 50,087 Total revenues 210 866,316 134,890 (134,462 ) 866,954 Expenses Room expense — 171,883 — — 171,883 Food and beverage expense — 119,047 — — 119,047 Management and franchise fee expense — 32,935 — — 32,935 Other operating expense — 227,300 — — 227,300 Total property operating expenses — 551,165 — — 551,165 Depreciation and amortization 261 45,763 68,030 — 114,054 Impairment loss — 26,459 — — 26,459 Property tax, insurance and other 7,415 173,588 23,516 (134,462 ) 70,057 General and administrative — 14,848 12,189 — 27,037 Total operating expenses 7,676 811,823 103,735 (134,462 ) 788,772 Other income — — 342 — 342 Intercompany interest income (expense) 378 — (378 ) — — Interest income 31 30 1 — 62 Interest expense (58,674 ) — (19,570 ) — (78,244 ) Gain on sale of hotel properties, net 387 6,450 (515 ) — 6,322 Income before equity in income from unconsolidated joint ventures (65,344 ) 60,973 11,035 — 6,664 Equity in income from consolidated entities 69,540 — — (69,540 ) — Equity in income from unconsolidated joint ventures 1,781 (202 ) (46 ) — 1,533 Income before income tax expense 5,977 60,771 10,989 (69,540 ) 8,197 Income tax expense 559 (1,586 ) 154 — (873 ) Income from continuing operations 6,536 59,185 11,143 (69,540 ) 7,324 Loss from discontinued operations (3,131 ) — — — (3,131 ) Net income and comprehensive income 3,405 59,185 11,143 (69,540 ) 4,193 Noncontrolling interest in consolidated joint ventures — 520 153 — 673 Preferred distributions - consolidated joint venture — — (1,461 ) — (1,461 ) Net income and comprehensive income attributable to FelCor LP 3,405 59,705 9,835 (69,540 ) 3,405 Preferred distributions (25,115 ) — — — (25,115 ) Net loss and comprehensive loss attributable to FelCor LP common unitholders $ (21,710 ) $ 59,705 $ 9,835 $ (69,540 ) $ (21,710 ) FelCor Lodging Limited Partnership Condensed Consolidating Statement of Cash Flows For the Year Ended December 31, 2018 (Successor) (in thousands) FelCor LP Subsidiary Guarantors Non-Guarantor Subsidiaries Eliminations Total Consolidated Operating activities: Cash flows from operating activities $ (53,388 ) $ 93,671 $ 132,962 $ — $ 173,245 Investing activities: Proceeds from the sale of hotel properties, net — 178,170 267,117 — 445,287 Improvements and additions to hotel properties — (27,530 ) (46,850 ) — (74,380 ) Additions to property and equipment (4 ) — — — (4 ) Intercompany financing 560,256 — — (560,256 ) — Cash flows from investing activities 560,252 150,640 220,267 (560,256 ) 370,903 Financing activities: Proceeds from borrowings - related party — — 85,000 — 85,000 Repayments of borrowings (538,814 ) — (115,842 ) — (654,656 ) Contributions from partners 732,319 — — — 732,319 Distributions to partners (698,787 ) — — — (698,787 ) Payments of deferred financing costs — — (10 ) — (10 ) Preferred distributions - consolidated joint venture — — (1,483 ) — (1,483 ) Intercompany financing — (244,311 ) (315,945 ) 560,256 — Cash flows from financing activities (505,282 ) (244,311 ) (348,280 ) 560,256 (537,617 ) Net change in cash, cash equivalents, and restricted cash reserves 1,582 — 4,949 — 6,531 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 year $ 11,219 $ — $ 13,343 $ — $ 24,562 FelCor Lodging Limited Partnership Condensed Consolidating Statement of Cash Flows For the Period of September 1, 2017 through December 31, 2017 (Successor) (in thousands) FelCor LP Subsidiary Guarantors Non-Guarantor Subsidiaries Eliminations Total Consolidated Operating activities: Cash flows from operating activities $ (44,202 ) $ (11,078 ) $ (16,872 ) $ — $ (72,152 ) Investing activities: Proceeds from the sale of hotel properties, net — — 165,893 — 165,893 Improvements and additions to hotel properties — (5,704 ) (17,933 ) — (23,637 ) Intercompany financing 108,590 — — (108,590 ) — Cash flows from investing activities 108,590 (5,704 ) 147,960 (108,590 ) 142,256 Financing activities: Repayments of borrowings (990 ) — (1,174 ) — (2,164 ) Contributions from partners 130,076 — — — 130,076 Distributions to partners (187,616 ) — — — (187,616 ) Distribution of FelCor TRS — (51,867 ) — — (51,867 ) Distributions to preferred unitholders (4,186 ) — — — (4,186 ) Payment of deferred financing costs — — (254 ) — (254 ) Preferred distributions - consolidated joint venture — — (496 ) — (496 ) Intercompany financing — 20,142 (128,732 ) 108,590 — Cash flows from financing activities (62,716 ) (31,725 ) (130,656 ) 108,590 (116,507 ) Net change in cash, cash equivalents, and restricted cash reserves 1,672 (48,507 ) 432 — (46,403 ) Cash, cash equivalents, and restricted cash reserves, beginning of period 7,965 48,507 7,962 — 64,434 Cash, cash equivalents, and restricted cash reserves, end of period $ 9,637 $ — $ 8,394 $ — $ 18,031 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: Proceeds from the sale of hotel properties, net (696 ) 74,281 (169 ) — 73,416 Improvements and additions to hotel properties 1 (16,727 ) (47,076 ) — (63,802 ) Distributions from unconsolidated joint ventures 840 — — — 840 Intercompany financing 91,391 — — (91,391 ) — Cash flows from investing activities 91,536 57,554 (47,245 ) (91,391 ) 10,454 Financing activities: Proceeds from borrowings — — 66,000 — 66,000 Repayment of borrowings — — (121,691 ) — (121,691 ) Distributions to preferred unitholders (18,836 ) — — — (18,836 ) Distributions to common unitholders (30,926 ) — — — (30,926 ) Distributions to noncontrolling interests — — (150 ) — (150 ) Contributions from noncontrolling interests — 333 — — 333 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, cash equivalents, and restricted cash reserves (5,567 ) 2,933 260 — (2,374 ) Cash, cash equivalents, and restricted cash reserves, beginning of period 13,532 45,574 7,702 — 66,808 Cash, cash equivalents, and restricted cash reserves, end of period $ 7,965 $ 48,507 $ 7,962 $ — $ 64,434 FelCor Lodging Limited Partnership Condensed Consolidating Statement of Cash Flows For the Year Ended December 31, 2016 (Predecessor) (in thousands) FelCor LP Subsidiary Guarantors Non-Guarantor Subsidiaries Eliminations Total Consolidated Operating activities: Cash flows from operating activities $ (65,416 ) $ 115,577 $ 84,759 $ — $ 134,920 Investing activities: Acquisition of land — — (8,226 ) — (8,226 ) Proceeds from the sale of hotel properties, net (1,433 ) 102,726 (323 ) — 100,970 Improvements and additions to hotel properties (11 ) (31,309 ) (42,944 ) — (74,264 ) Insurance proceeds — — 341 — 341 Distributions from unconsolidated joint ventures 1,586 — — — 1,586 Intercompany financing 149,667 — — (149,667 ) — Cash flows from investing activities 149,809 71,417 (51,152 ) (149,667 ) 20,407 Financing activities: Proceeds from borrowings — — 85,000 — 85,000 Repayment of borrowings — — (158,662 ) — (158,662 ) Repurchase of common units (30,462 ) — — — (30,462 ) Distributions to preferred unitholders (25,115 ) — — — (25,115 ) Distributions to common unitholders (33,606 ) — — — (33,606 ) Payment of deferred financing costs — — (12 ) — (12 ) Distributions to noncontrolling interests — (14 ) (2 ) — (16 ) Contributions from noncontrolling interests — 397 239 — 636 Net proceeds from the issuance of preferred capital in a consolidated joint venture — — 597 — 597 Intercompany financing — (191,117 ) 41,450 149,667 — Other (2,897 ) — (1,461 ) — (4,358 ) Cash flows from financing activities (92,080 ) (190,734 ) (32,851 ) 149,667 (165,998 ) Effect of exchange rate changes on cash — — (9 ) — (9 ) Net change in cash, cash equivalents, and restricted cash reserves (7,687 ) (3,740 ) 747 — (10,680 ) Cash, cash equivalents, and restricted cash reserves, beginning of period 21,219 49,314 6,955 — 77,488 Cash, cash equivalents, and restricted cash reserves, end of period $ 13,532 $ 45,574 $ 7,702 $ — $ 66,808 |