EXHIBIT 99.1 [FELCOR LODGING TRUST LETTERHEAD] FOR IMMEDIATE RELEASE: FELCOR REPORTS FIRST QUARTER 2003 RESULTS - ANNOUNCES CLOSING OF $150 MILLION OF SECURED FINANCING IRVING, TEXAS...APRIL 30, 2003 - FelCor Lodging Trust Incorporated (NYSE: FCH), the nation's second largest hotel real estate investment trust (REIT), today reported operating results for the first quarter ended March 31, 2003. FIRST QUARTER RESULTS: FelCor's first quarter revenues were $307.3 million, which reflected a decline of 17.5 million, or 5.4 percent, compared to the first quarter in 2002. The decrease was primarily related to a 5.3 percent decline in the hotel portfolio's revenue per available room ("RevPAR"). For the quarter, occupancy decreased 1.2 percent, to 60.0 percent, and average daily rate ("ADR") decreased 4.1 percent, to $96.92, compared to the same quarter of 2002. The operating margin for FelCor's hotels during the first quarter 2003 was 29.0 percent, which reflected a 460 basis point decrease, compared to the same period in 2002. The deterioration in margins principally resulted from the 4.1 percent decline in ADR, coupled with increases in insurance, marketing, and energy costs for the quarter, compared to first quarter of 2002. FelCor's first quarter 2003 Funds From Operations ("FFO") was $9.6 million, or $0.15 per share. FFO for the same period last year was $29.3 million, or $0.44 per share. First quarter 2003 Earnings Before Interest, Taxes, Depreciation, Amortization ("EBITDA") totaled $59.8 million, compared to $77.2 million for first quarter of 2002. For the quarter, FelCor reported a net loss of $27.8 million, or a loss of $0.48 per share, compared to a first quarter 2002 net loss of $12.3 million, or $0.23 per share. The Company's operating results included a $953,000 gain on the early extinguishment of debt. "Sustained economic weakness and war-related uncertainties adversely affected FelCor's and the lodging industry's operating results for the first quarter. With the effective end of the war in Iraq and the reduction in the threat advisory level to "yellow" from "orange", we are seeing some recovery in forward bookings," said Thomas J. Corcoran, Jr., FelCor's President and CEO. CAPITAL STRUCTURE: On April 24, 2003, FelCor completed a $150 million non-recourse loan, at a spread over LIBOR of 250 basis points, which is secured by 10 full service hotels. The term of the loan is three years with two, one-year extension options. The proceeds were used to pay off all outstanding borrowings under FelCor's unsecured line of credit. FelCor also has reduced its line of credit from $300 million to $150 million in total commitments. -more- FelCor Lodging Trust First Quarter 2003 Operating Results April 30, 2003 Page 2 In April, FelCor announced the refinancing of $16 million of secured debt that was to mature in late 2003. In the first quarter, FelCor also prepaid $6 million in secured debt that was scheduled to mature this year. FelCor has no remaining debt maturing during 2003, other than $11 million in normal recurring principal payments. At March 31, 2003, FelCor had $2.0 billion of debt outstanding, and $156 million in cash and cash equivalents. The weighted average life of FelCor's debt is six years. The Company's next significant debt maturity is its $175 million of senior notes that will mature in October 2004. FelCor expects to meet this obligation from excess cash on hand, future cash flow from operations, its additional secured debt capacity, and from the proceeds of non-strategic hotel sales. "We have strengthened our financial position with the closing on our previously announced $150 million of secured debt financing, the reduction of our 2003 maturities, and the pay down of our line of credit. FelCor continues to hold excess cash and our balance sheet is in good shape," said Richard J. O'Brien, FelCor's Executive Vice President and Chief Financial Officer. OTHER HIGHLIGHTS: FelCor declared and paid first quarter dividends on its $1.95 Series A Cumulative Convertible Preferred Stock and its 9% Series B Cumulative Redeemable Preferred Stock. In February, FelCor announced plans to dispose of 33 non-strategic hotels over 36 months. These non-strategic hotels generally include smaller properties in secondary and tertiary locations. FelCor has announced the selected brokers to market 27 of these hotels. A listing of these hotels actively being marketed can be found on FelCor's Web site at www.felcor.com on the `Hotels' page. In March, FelCor converted an independently branded hotel in Dallas, Texas, to a Staybridge Suites(R) hotel. In April, FelCor completed the conversion of the 385-room Hilton Myrtle Beach Resort, following a $15 million renovation of the former Wyndham(R)-affiliated property. The resort is located on the ocean at the north end of Myrtle Beach and is adjacent to FelCor's Kingston Plantation complex, one of the largest and most comprehensive resort destination properties on the East Coast. 2003 GUIDANCE: Due to the uncertainties of the impact of the war in Iraq, heightened terrorism alerts, SARS and the impact of these events on the nation's economy, it is difficult to provide meaningful earnings guidance. Our current estimates for the second quarter and full year 2003 for recurring operating results, are as follows: SECOND QUARTER 2003 -------------- ---- RevPAR down 7% to 8% down 3% to 4% Operating margin decrease 3% to 4% decrease 2.25% to 2.75% FFO per share $0.34 to $0.42 $0.80 to $0.95 EBITDA $72 to $77 million $252 to $260 million Net loss per share $0.24 to $0.32 $1.60 to $1.75 -more- FelCor Lodging Trust First Quarter 2003 Operating Results April 30, 2003 Page 3 Non-GAAP estimates of FFO and EBITDA are derived from our estimate of net loss applicable to common shareholders. Estimated FFO per share and unit was computed by dividing estimated FFO by today's weighted average shares and units outstanding. Estimated FFO was computed by taking estimated net loss applicable to common shareholders, adding forecasted depreciation expense ($40 million for the second quarter and $157 million for the year) and deducting forecasted minority interest in FelCor LP ($1 million for the second quarter and $5 million for the year). To derive estimated EBITDA, FelCor started with estimated FFO and added back interest expense ($43 million for the second quarter and $173 million for the year), amortization ($0.5 million for the second quarter and $2 million for the year) and preferred stock dividends ($7 million for the second quarter and $27 million for the year). FelCor's estimated RevPAR decline for the month of April is approximately 10.5 to 11.5 percent. The RevPAR decline is the direct result of reduced travel during the war in Iraq, the lack of comparability due to the occurrence of Easter in April 2003, as compared to March in 2002, and the continued economic softness. FelCor announced the suspension of its common dividend on February 4, 2003, and does not expect to pay a common dividend during 2003. FelCor's decision regarding future dividends on its preferred stock will be made quarterly, based on hotel operating results and its then estimates of the minimum distributions required to maintain its REIT status. The Company currently anticipates that its 2003 total capital expenditures will be between $60 and $70 million. FelCor has published its First Quarter 2003 Supplemental Information, which provides additional corporate data, financial highlights and portfolio statistical data for the quarter ended March 31, 2003. Investors are encouraged to access the Supplemental Information on the Company's Web site at www.felcor.com, on its Investor Relations page in the "Financial Reports" section. The Supplemental Information also will be furnished upon request. Requests may be made by e-mail to information@felcor.com or by writing to the Director of Investor Relations, FelCor Lodging Trust Incorporated, 545 E. John Carpenter Freeway, Suite 1300, Irving, Texas, 75062. FelCor is the nation's second largest lodging REIT and the nation's largest owner of full service, all-suite hotels. FelCor's consolidated portfolio is comprised of 169 hotels, located in 35 states and Canada. FelCor owns 77 upscale, all-suite hotels, and is the largest owner of Embassy Suites(R) and Doubletree Guest Suites(R) hotels. FelCor's portfolio also includes hotels in the upscale and full service segments. FelCor has a current market capitalization of approximately $2.8 billion. Additional information can be found on the Company's Web site at www.felcor.com. FelCor invites you to listen to its first quarter 2003 conference call on Thursday, May 1, 2003, at 10:00 a.m. (Central Standard Time). The conference call will be webcast simultaneously via FelCor's Web site at www.felcor.com. Interested investors and other parties who wish to access the call should go to FelCor's website and click on the conference call microphone icon on either the Investor Relations or FelCor News pages. A phone replay will be available from Thursday, May 1, 2003, at 12:00 p.m. (Central Standard Time), through Friday, May 30, 2003, at 7:00 p.m. (Central Standard Time), by dialing 416-695-6012 (access code is 2488). A recording of the call also will be archived and available at www.felcor.com. -more- FelCor Lodging Trust First Quarter 2003 Operating Results April 30, 2003 Page 4 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 timing and magnitude of any recovery from the current soft economy, the continuing impact of the war in Iraq, future acts of terrorism, the impact of SARS on the travel industry, 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 J. O'Brien, Executive Vice President and CFO (972) 444-4932 robrien@felcor.com Monica L. Hildebrand, Vice President of Communications (972) 444-4917 mhildebrand@felcor.com Stephen A. Schafer, Director of Investor Relations (972) 444-4912 sschafer@felcor.com -more- FelCor Lodging Trust First Quarter 2003 Operating Results April 30, 2003 Page 5 RESULTS OF OPERATIONS - THREE MONTHS ENDED (in thousands, except per share data) THREE MONTHS ENDED MARCH 31, --------------------------- 2003 2002 --------- --------- Revenues: Hotel operating revenue: Room $ 242,972 $ 257,230 Food and beverage 47,914 50,691 Other operating departments 16,060 16,219 Retail space rental and other revenue 400 670 --------- --------- Total revenues 307,346 324,810 --------- --------- Expenses: Hotel departmental expenses: Room 63,464 63,233 Food and beverage 38,939 39,991 Other operating departments 7,516 7,316 Other property related costs 91,824 89,160 Management and franchise fees 16,310 15,648 Taxes, insurance and lease expense 32,533 34,570 Corporate expenses 3,423 3,746 Depreciation 36,107 38,618 --------- --------- Total operating expenses 290,116 292,282 --------- --------- Operating income 17,230 32,528 Interest expense, net (40,253) (41,196) Gain on early extinguishment of debt 953 --------- --------- Loss before equity in income (loss) from unconsolidated entities and minority interests (22,070) (8,668) Equity in income (loss) from unconsolidated entities (148) 1,221 Minority interests 1,127 1,301 --------- --------- Net loss (21,091) (6,146) Preferred dividends (6,726) (6,150) --------- --------- Net loss applicable to common stockholders $ (27,817) $ (12,296) ========= ========= Basic and diluted per common share data: Net loss applicable to common stockholders $ (0.48) $ (0.23) ========= ========= Weighted average common shares outstanding 58,532 52,717 -more- FelCor Lodging Trust First Quarter 2003 Operating Results April 30, 2003 Page 6 RECONCILIATION OF FFO AND EBITDA (in thousands, except per share and unit data) THREE MONTHS ENDED MARCH 31, ------------------------- 2003 2002 -------- -------- FUNDS FROM OPERATIONS (FFO) Net loss $(21,091) $ (6,146) Depreciation 36,107 38,618 Depreciation from unconsolidated entities 2,859 2,178 Preferred dividends: Series A preferred dividends (2,915) -- Series B preferred dividends (3,811) (3,234) Minority interest in FelCor LP (1,557) (2,087) -------- -------- FFO (a) $ 9,592 $ 29,329 ======== ======== FFO per common share and unit $ 0.15 $ 0.44 ======== ======== Basic and diluted net loss per common share $ (0.48) $ (0.23) ======== ======== Weighted average common shares outstanding 58,532 52,717 Weighted average FelCor LP units outstanding 3,289 9,005 Conversion of Series A preferred shares -- 4,636 Conversion of options and stock grants 309 357 -------- -------- Weighted average common shares and units outstanding 62,130 66,715 ======== ======== EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION (EBITDA) FFO $ 9,592 $ 29,329 Interest expense 40,628 41,775 Interest expense from unconsolidated entities 2,339 2,359 Amortization expense 516 509 Preferred dividends: Series A preferred dividends 2,915 -- Series B preferred dividends 3,811 3,234 -------- -------- EBITDA (a) $ 59,801 $ 77,206 ======== ======== (a) Includes a $953,000 gain on early extinguishment of debt. 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 measurements of performance to be helpful in evaluating a real estate company's operations. We consider FFO and EBITDA to be key measures of a REIT's performance and should be considered along with, but not as an alternative to, net income and cash flow as a measure of our operating performance. 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 generally accepted accounting principles), 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 funds from operations on the same basis. We believe that FFO and EBITDA are helpful to investors as a measure of the performance of an equity REIT. 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. In the future, to the extent that FelCor's FFO, computed in accordance with the NAREIT White Paper, contains gains, losses or other charges that are appropriately identified as non-recurring items, we presently intend to provide, supplemental adjustments to eliminate such non-recurring items and to reflect recurring FFO. -more- FelCor Lodging Trust First Quarter 2003 Operating Results April 30, 2003 Page 7 SELECTED BALANCE SHEET DATA (in thousands) MARCH 31, DECEMBER 31, 2003 2002 ----------- ----------- Investment in hotels, net of accumulated depreciation $ 4,286,018 $ 4,255,618 Accumulated depreciation (819,094) (782,166) ----------- ----------- Investments in hotels $ 3,466,924 $ 3,473,452 =========== =========== Total cash and cash equivalents $ 155,671 $ 66,542 Total assets 3,872,888 3,780,363 Total debt 2,017,294 1,877,134 Total stockholders' equity $ 1,594,052 $ 1,616,817 ###