Exhibit 99.1
FelCor Lodging Trust Incorporated
545 E. John Carpenter Freeway, Suite 1300
(FELCOR LODGING TRUST LOGO) Irving, Texas 75062-3933
P 972.444.4900 F 972.444.4949
www.felcor.com NYSE: FCH
FOR IMMEDIATE RELEASE:
FELCOR ANNOUNCES THIRD QUARTER RESULTS
IRVING, TEXAS...OCTOBER 29, 2003 - FelCor Lodging Trust Incorporated
(NYSE: FCH), the nation's second largest hotel real estate investment trust
(REIT), today reported operating results for the third quarter and nine months
ended September 30, 2003.
THIRD QUARTER RESULTS:
The third quarter results reflect a sluggish economy and soft corporate
transient demand, which continues to adversely affect the lodging industry.
FelCor's third quarter hotel portfolio revenue per available room
("RevPAR") declined 2.4 percent, compared to third quarter 2002. For the
quarter, occupancy increased 0.3 percent, to 65.3 percent, and average daily
rate ("ADR") decreased 2.7 percent, to $92.64, compared to the same quarter of
2002.
The operating margin for FelCor's hotels during the third quarter 2003
was 28.7 percent, which represents a 290 basis point decrease, compared to the
same period of 2002. The decrease in margins for the third quarter was lower
than the 390 basis point decrease in second quarter margins, compared to the
same period in 2002. The deterioration in third quarter margins principally
resulted from the 2.7 percent decline in ADR, coupled with increases in employee
wage and benefit, marketing, and energy costs for the quarter, compared to the
third quarter of 2002.
FelCor's net loss for the third quarter, which included an impairment
charge of $113 million, or $1.92 per share, was $133 million, or a loss of $2.26
per share, compared to a third quarter 2002 net loss of $14 million, or a loss
of $0.26 per share. Third quarter Funds From Operations ("FFO") and Earnings
Before Interest, Taxes, Depreciation and Amortization ("EBITDA"), in accordance
with the Securities and Exchange Commission's (SEC) recently clarified guidance,
have not been adjusted to add back the $113 million impairment charge. Including
the impairment charge for the quarter, FFO was a loss of $101 million and EBITDA
was a loss of $50 million. FFO and EBITDA for the third quarter of 2002,
computed on a consistent basis, were $25 million and $75 million, respectively.
FFO per share for the third quarter of 2003 was a loss of $1.63 per share
(including $1.81 in impairment charges), as compared to a positive $0.40 per
share during the same period of 2002, computed on a consistent basis. Excluding
the impairment charge for the third quarter, operating results met the low end
of the Company's previously provided guidance of $0.18 per share for FFO and $63
million for EBITDA.
The impairment charge primarily related to the third quarter decision
to sell 11 IHG-managed hotels, following an amendment to the management
agreements on these hotels, and an additional impairment charge on certain of
the 19 remaining non-strategic hotels identified for sale in December 2002. The
30 non-strategic hotels are under-performing and generally in markets that no
longer meet FelCor's long-term investment strategy. Although the Company expects
to sell these hotels over the next 36 months, the impaired assets were written
down to FelCor's estimate of today's fair market value.
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FelCor Lodging Trust Third Quarter 2003 Operating Results
October 29, 2003
Page 2
The 30 non-strategic hotels represent 16 percent of FelCor's rooms,
while only comprising five percent of the Company's hotel-level EBITDA. Of the
non-strategic hotels, there are six that have had negative EBITDA of $0.05 per
share during the trailing 12-month period.
YEAR TO DATE RESULTS:
For the nine months ended September 30, 2003, the Company's RevPAR
declined 4.9 percent, compared to the same period in 2002. The decline in RevPAR
principally resulted from a 4.0 percent decline in FelCor's ADR during the
period.
The operating margin for FelCor's hotels during the nine months ended
September 30, 2003, was 29.9 percent, which reflects a 400 basis point decrease,
compared to the same period in 2002. The deterioration in margin principally
resulted from a 4.0 percent decline in ADR, coupled with increases in employee
wage and benefit, marketing, and energy costs, compared to the same period in
2002.
FelCor's net loss for the nine months, which included an impairment
charge of $121 million, or $2.06 per share, was $187 million, or a loss of $3.20
per share, compared to the nine month 2002 net loss of $20 million, or a loss of
$0.38 per share. FFO and EBITDA for the nine months, in accordance with the
SEC's recently clarified guidance, have not been adjusted to add back the $121
million impairment charge. Including the impairment charge for the nine months,
FFO was a loss of $80 million and EBITDA was $73 million. FFO and EBITDA for the
nine months of 2002 were $94 million and $247 million, respectively. FFO per
share for the nine months of 2003 was a loss of $1.28 per share, including $1.81
in third quarter impairment charges, as compared to a positive $1.51 per share
during the same period of 2002. The following items are included in net loss for
the 2003 nine month period and have not been added to or deducted from net loss
in the computation of FFO or EBITDA: a $121 million impairment charge; a $2.8
million charge-off of deferred debt costs; and a $1.6 million gain on early
extinguishment of debt. For the nine months in 2002, a $1.6 million charge for
the third quarter abandoned projects was included in net loss and not added back
to net loss in the computation of FFO or EBITDA.
"We have achieved the three strategic objectives that we set out at the
beginning of this year. While we are disappointed with the operating results of
the second half of 2003 and anticipated fourth quarter results, we are
positioned for a recovery and believe we're near the end of what has been a
difficult lodging cycle," said Thomas J. Corcoran, Jr., FelCor's President and
CEO. "We have given a great deal of thought to our investment strategy and the
need to improve our return on investment (ROI) over the long-term. The sale of
non-strategic hotels, which is progressing better than expected, is the first
phase of our strategy to improve our ROI and long-term shareholder value."
CAPITAL STRUCTURE:
At September 30, 2003, FelCor had $2.0 billion of debt outstanding,
with a weighted average life of five years, and $176 million in cash and cash
equivalents. The Company's next significant debt maturity is its $175 million in
senior notes that will mature in October 2004. FelCor expects to meet this
obligation from excess cash on hand and the $176 million currently available
under its recently closed $200 million secured debt facility.
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FelCor Lodging Trust Third Quarter 2003 Operating Results
October 29, 2003
Page 3
"We have achieved our strategic objective to improve the Company's
liquidity. FelCor is carrying excess cash, has covered its 2004 maturity through
its secured debt facility, has amended the IHG management agreements to allow
for greater flexibility to sell non-strategic assets, and has exceeded its asset
sales targets. We're very pleased with the completion of these steps in
strengthening our balance sheet," said Richard J. O'Brien, FelCor's Executive
Vice President and Chief Financial Officer.
Non-strategic asset sales were previously targeted to be between $50
and $75 million. Taking into consideration $89 million of October closings,
FelCor now anticipates 2003 asset sales to be in the range of $125 to $140
million. The Company has cash and cash equivalents of approximately $260
million, following the closing of the October property sales.
OTHER HIGHLIGHTS:
In early October, the Company closed on the sale of nine non-strategic
hotels. FelCor sold four Holiday Inn-branded hotels in Ontario, Canada, for $32
million (U.S. dollars). The Company intends to reinvest the proceeds to achieve
a tax-free exchange. In addition, FelCor closed on the sale of five
non-strategic hotels for $50 million. This portfolio had 894 rooms and included
three Embassy Suites Hotels(R) and two Doubletree Guest Suites(R) hotels. A
parking facility also was sold for $7 million in October. FelCor has 19 hotels
remaining of the previously announced 33 non-strategic hotels identified for
sale in December 2002. A listing of the non-strategic hotels actively being
marketed for sale can be found on the Company's Web site at www.felcor.com on
the "Hotels" page.
FelCor has declared and will pay regular third quarter dividends on its
$1.95 Series A Cumulative Convertible Preferred Stock and its 9% Series B
Cumulative Redeemable Preferred Stock.
2003 GUIDANCE:
Current estimates of operating results for the fourth quarter and full
year 2003 are as follows:
<Table>
<Caption>
FOURTH FULL YEAR
QUARTER 2003
--------------------- ---------------------
FFO per share $(0.07) to $0.01 $(1.36) to $(1.28)
EBITDA $47 to $52 million $120 to $125 million
Net loss per share $0.70 to $0.62 $3.89 to $3.82
RevPAR (2.5)% to flat (4.6)% to (4.0)%
Operating margin decrease 2.0% to 0.5% decrease 3.3% to 2.9%
</Table>
Consistent with recently clarified SEC guidance, full year 2003 FFO and
EBITDA estimates have not been adjusted for the following non-cash charges
included in the estimated net loss (in thousands):
<Table>
<Caption>
AMOUNT PER SHARE
--------- ---------
Impairment Loss $(120,526) $ (1.94)
Charge-off of deferred debt costs (2,834) (0.05)
Gain on early extinguishment of debt 1,611 0.03
--------- --------
$(121,749) $ (1.96)
========= ========
</Table>
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FelCor Lodging Trust Third Quarter 2003 Operating Results
October 29, 2003
Page 4
The Company's estimate for the fourth quarter was lowered to reflect a
lower RevPAR forecast and the accelerated sale of hotels compared to FelCor's
previous target ($0.04 per share impact).
For the first 28 days of October, total portfolio RevPAR declined 2.7
percent, occupancy increased 1.1 percent and ADR declined 3.7 percent, compared
to the same period in 2002.
"We believe that 2004 will be a stronger year, with improving rates and
increasing revenue, both for the industry and FelCor. We are confident that the
initiatives taken over the last three years with our strategic brand managers
will provide the framework for opportunistically recapturing rate and improving
EBITDA as the economy regains its momentum," added Mr. Corcoran.
The Company currently anticipates its 2003 total capital expenditures
to be approximately $70 million.
FelCor has published its Third Quarter 2003 Supplemental Information,
which provides additional corporate data, financial highlights and portfolio
statistical data for the quarter and nine months ended September 30, 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 owner of the
largest number of full service, all-suite hotels in the nation. FelCor's
consolidated portfolio is comprised of 163 hotels, located in 34 states and
Canada. FelCor owns 71 full service, all-suite hotels, and is the owner of the
greatest number of Embassy Suites Hotels and Doubletree Guest Suites hotels.
FelCor's portfolio also includes 79 hotels in the upscale and full service
segments. FelCor has a current market capitalization of approximately $3.0
billion. Additional information can be found on the Company's Web site at
www.felcor.com.
FelCor invites you to listen to its third quarter 2003 conference call
on Thursday, October 30, 2003, at 9:00 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 Web site 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, October 30, 2003, at 12:00 p.m. (Central
Standard Time), through Friday, November 28, 2003, at 7:00 p.m. (Central
Standard Time), by dialing 416-695-6032 (access code is 8361). A recording of
the call also will be archived and available at www.felcor.com.
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FelCor Lodging Trust Third Quarter 2003 Operating Results
October 29, 2003
Page 5
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 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.
<Table>
<Caption>
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
</Table>
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FelCor Lodging Trust Third Quarter 2003 Operating Results
October 29, 2003
Page 6
RESULTS OF OPERATIONS - THREE AND NINE MONTHS ENDED
SEPTEMBER 30, 2003 AND 2002
(in thousands, except per share data)
<Table>
<Caption>
THREE MONTHS NINE MONTHS
ENDED SEPTEMBER 30, ENDED SEPTEMBER 30,
------------------------ ------------------------
2003 2002 2003 2002
--------- --------- --------- ---------
REVENUES:
Hotel operating revenue:
Room $ 251,243 $ 253,717 $ 731,205 $ 765,538
Food and beverage 44,570 45,030 140,042 146,792
Other operating departments 16,517 17,291 48,673 49,865
Retail space rental and other revenue 256 353 875 1,451
--------- --------- --------- ---------
Total revenues 312,586 316,391 920,795 963,646
--------- --------- --------- ---------
EXPENSES:
Hotel departmental expenses:
Room 68,462 66,106 192,776 191,368
Food and beverage 37,265 37,523 112,384 115,167
Other operating departments 8,149 8,161 23,039 22,731
Other property related costs 92,106 87,877 267,998 258,220
Management and franchise fees 16,752 16,421 48,476 48,860
Taxes, insurance and lease expense 33,231 32,044 97,369 98,325
Abandoned projects -- 1,663 -- 1,663
Corporate expenses 3,299 2,577 10,459 10,293
Depreciation 34,725 36,044 104,898 109,491
--------- --------- --------- ---------
Total operating expenses 293,989 288,416 857,399 856,118
--------- --------- --------- ---------
OPERATING INCOME 18,597 27,975 63,396 107,528
Interest expense, net (42,285) (40,528) (123,359) (122,736)
Charge off of debt related costs -- -- (2,834) --
Gain on early extinguishment of debt -- -- 1,260 --
Impairment loss (107,720) -- (107,720) --
--------- --------- --------- ---------
LOSS BEFORE EQUITY IN INCOME FROM
UNCONSOLIDATED ENTITIES, MINORITY INTERESTS
AND GAIN (LOSS) ON SALE OF ASSETS (131,408) (12,553) (169,257) (15,208)
Equity in income from unconsolidated entities 1,674 1,230 2,252 3,816
Gain (loss) on sale of assets (47) -- 106 5,861
Minority interests 7,388 3,285 9,945 2,991
--------- --------- --------- ---------
LOSS FROM CONTINUING OPERATIONS (122,393) (8,038) (156,954) (2,540)
Discontinued operations (3,524) 957 (10,257) 2,315
--------- --------- --------- ---------
NET LOSS (125,917) (7,081) (167,211) (225)
Preferred dividends (6,727) (6,727) (20,181) (19,565)
--------- --------- --------- ---------
NET LOSS APPLICABLE TO COMMON STOCKHOLDERS $(132,644) $ (13,808) $(187,392) $ (19,790)
========= ========= ========= =========
Basic per common share data:
Net loss from continuing operations $ (2.20) $ (0.28) $ (3.02) $ (0.42)
========= ========= ========= =========
Net loss $ (2.26) $ (0.26) $ (3.20) $ (0.38)
========= ========= ========= =========
Weighted average common shares outstanding 58,690 52,729 58,609 52,724
Diluted per common share data:
Net loss from continuing operations $ (2.20) $ (0.28) $ (3.02) $ (0.42)
========= ========= ========= =========
Net loss $ (2.26) $ (0.26) $ (3.20) $ (0.38)
========= ========= ========= =========
Weighted average common shares outstanding 58,690 52,729 58,609 52,724
</Table>
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FelCor Lodging Trust Third Quarter 2003 Operating Results
October 29, 2003
Page 7
DISCONTINUED OPERATIONS
(IN THOUSANDS)
Condensed financial information for the 15 hotels classified in discontinued
operations is as follows:
<Table>
<Caption>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
---------------------- ----------------------
2003 2002 2003 2002
-------- -------- -------- --------
Hotel operating revenue $ 13,002 $ 15,192 $ 40,677 $ 44,472
Hotel operating expenses 11,683 13,807 37,693 40,955
-------- -------- -------- --------
Operating income 1,319 1,385 2,984 3,517
Direct interest costs -- (266) (445) (809)
Impairment loss (4,982) -- (12,806) --
Gain on the early extinguishment of debt 351 -- 351 --
Loss on disposition (399) -- (882) --
Minority interest 187 (162) 541 (393)
-------- -------- -------- --------
Income (loss) from discontinued operations $ (3,524) $ 957 $(10,257) $ 2,315
======== ======== ======== ========
</Table>
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FelCor Lodging Trust Third Quarter 2003 Operating Results
October 29, 2003
Page 8
RECONCILIATION OF NET LOSS TO FFO
(in thousands, except per share and unit data)
<Table>
<Caption>
THREE MONTHS ENDED SEPTEMBER 30,
-----------------------------------------------------------------------------------
2003 2002
-------------------------------------- ---------------------------------------
PER SHARE PER SHARE
DOLLARS SHARES AMOUNT DOLLARS SHARES AMOUNT
--------- --------- --------- --------- --------- ---------
NET LOSS $(125,917) 58,690 $ (2.15) $ (7,081) 52,729 $ (0.13)
Depreciation from continuing
operations 34,725 -- 0.59 36,044 -- 0.68
Depreciation from unconsolidated
entities and discontinued operations 3,228 -- 0.06 4,709 -- 0.09
Gain on sale of assets 446 -- 0.01 -- -- --
Preferred dividends (6,727) -- (0.11) (6,727) (0.13)
Minority interest in FelCor LP (7,015) 3,161 (0.03) (2,344) 9,003 (0.11)
Conversion of options and unvested
restricted stock -- 303 -- -- 324 --
--------- --------- --------- --------- --------- ---------
FFO $(101,260) 62,154 $ (1.63) $ 24,601 62,056 $ 0.40
========= ========= ========= ========= ========= =========
</Table>
<Table>
<Caption>
NINE MONTHS ENDED SEPTEMBER 30,
-----------------------------------------------------------------------------------
2003 2002
-------------------------------------- ---------------------------------------
PER SHARE PER SHARE
DOLLARS SHARES AMOUNT DOLLARS SHARES AMOUNT
--------- --------- --------- --------- --------- ---------
NET LOSS $(167,211) 58,609 $ (2.85) $ (225) 52,7241 $ 0.00
Depreciation from continuing
operations 104,898 -- 1.79 109,491 -- 2.08
Depreciation from unconsolidated
entities and discounted operations 11,947 -- 0.20 13,341 -- 0.25
Gain (loss) on sale of assets 776 -- 0.01 (5,861) -- (0.11)
Preferred dividends (20,181) -- (0.34) (19,565) -- (0.37)
Minority interest in FelCor LP. (10,065) 3,234 (0.09) (3,359) 9,004 (0.34)
Conversion of options and unvested
restricted stock -- 303 -- -- 349 --
--------- --------- --------- --------- --------- --------
FFO $ (79,836) 62,146 $ (1.28) $ 93,822 62,077 $ 1.51
========= ========= ========= ========= ========= ========
</Table>
Consistent with recently clarified SEC guidance, FFO has not been adjusted for
the following amounts included in net loss (in thousands):
<Table>
<Caption>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
2003 2002 2003 2002
--------- --------- --------- -------
Impairment loss $(112,702) $ -- $(120,526) $ --
Charge off of deferred debt costs -- -- (2,834) --
Gain on early extinguishment of debt 351 -- 1,611 --
Abandoned projects -- (1,663) -- (1,663)
--------- --------- --------- -------
$(112,351) $ (1,663) $(121,749) $(1,663)
========= ========= ========= =======
Per share amounts $ (1.81) $ (0.03) $ (1.96) $ (0.03)
========= ========= ========= =======
</Table>
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FelCor Lodging Trust Third Quarter 2003 Operating Results
October 29, 2003
Page 9
RECONCILIATION OF NET LOSS TO EBITDA
(in thousands)
<Table>
<Caption>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------------------ ------------------------
2003 2002 2003 2002
--------- --------- --------- ---------
Net loss $(125,917) $ (7,081) $(167,211) $ (225)
Depreciation from continuing operations 34,725 36,044 104,898 109,491
Depreciation from unconsolidated entities and
discontinued operations 3,228 4,709 11,947 13,341
Loss (gain) on sale of assets 446 -- 776 (5,861)
Minority interest in FelCor Lodging LP (7,015) (2,344) (10,065) (3,359)
Interest expense 42,777 41,073 124,780 124,488
Interest expense from unconsolidated entities and
discontinued operations 1,378 2,529 6,199 7,804
Amortization expense 565 526 1,645 1,561
--------- --------- --------- ---------
EBITDA $ (49,813) $ 75,456 $ 72,969 $ 247,240
========= ========= ========= =========
</Table>
Consistent with recently clarified SEC guidance, EBITDA has not been adjusted
for the following amounts included in net loss (in thousands):
<Table>
<Caption>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
2003 2002 2003 2002
--------- --------- --------- ---------
Impairment loss $(112,702) $ -- $(120,526) $ --
Charge off of deferred debt costs -- -- (2,834) --
Gain on early extinguishment of debt 351 -- 1,611 --
Abandoned projects -- (1,663) -- (1,663)
--------- --------- --------- ---------
$(112,351) $ (1,663) $(121,749) $ (1,663)
========= ========= ========= =========
</Table>
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 Funds From
Operations, or FFO, and Earnings Before Interest, Taxes, Depreciation, and
Amortization, or EBITDA, 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.
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
supplemental 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.
FFO and EBITDA should not be considered as an alternative to net
income, operating profit, cash flow from operations, or any other operating
performance measure prescribed by GAAP. Neither should FFO, FFO per share and
EBITDA be considered as a measure 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 stockholders' benefit.
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FelCor Lodging Trust Third Quarter 2003 Operating Results
Page 10
RECONCILIATION OF ESTIMATED NET INCOME (LOSS) TO ESTIMATED FFO AND EBITDA
(in millions, except per share and unit data)
<Table>
<Caption>
FOURTH QUARTER 2003 GUIDANCE
----------------------------------------------
LOW GUIDANCE HIGH GUIDANCE
--------------------- ---------------------
PER SHARE PER SHARE
DOLLARS AMOUNT(a) DOLLARS AMOUNT(a)
------- --------- ------- ---------
NET LOSS APPLICABLE TO COMMON STOCKHOLDERS $ (41) $ (0.70) $ (36) $ (0.62)
Depreciation 38 38
Minority interest in FelCor LP (2) (2)
------- -------
FFO $ (5) $ (0.07) $ 0 $ 0.01
======= =======
NET LOSS APPLICABLE TO COMMON STOCKHOLDERS $ (41) $ (36)
Depreciation 38 38
Minority interest in FelCor LP (2) (2)
Interest expense 44 44
Amortization expense 1 1
Preferred dividends 7 7
------- -------
EBITDA $ 47 $ 52
======= =======
</Table>
<Table>
<Caption>
FULL YEAR 2003 GUIDANCE(b)
----------------------------------------------
LOW GUIDANCE HIGH GUIDANCE
--------------------- ---------------------
PER SHARE PER SHARE
DOLLARS AMOUNT(a) DOLLARS AMOUNT(a)
------- --------- ------- ---------
NET LOSS APPLICABLE TO COMMON STOCKHOLDERS $ (228) $ (3.89) $ (223) $ (3.82)
Depreciation 155 155
Gain from sales of assets 1 1
Minority interest in FelCor LP (12) (12)
------- -------
FFO $ (84) $ (1.36) $ (79) $ (1.28)
======= =======
NET LOSS APPLICABLE TO COMMON STOCKHOLDERS $ (228) $ (223)
Depreciation 155 155
Gains from sales of assets 1 1
Minority interest in FelCor LP (12) (12)
Interest expense 175 175
Amortization expense 2 2
Preferred dividends 27 27
------- -------
EBITDA $ 120 $ 125
======= =======
</Table>
(a) Weighted average shares are 58.6 million. Adding minority interest and
unvested restricted stock of 3.6 million shares to weighted average
shares, provides the weighted average shares and units of 62.2 million
used to compute FFO per share.
(b) Consistent with recently clarified SEC guidance, full year FFO and
EBITDA guidance has not been adjusted for the following non-cash
charges included in estimated net loss (in thousands):
<Table>
<Caption>
AMOUNT PER SHARE
--------- ---------
Impairment Loss $(120,526) $ (1.94)
Charge-off of deferred debt costs (2,834) (0.05)
Gain on early extinguishment of debt 1,611 0.03
--------- ---------
$(121,749) $ (1.96)
========= =========
</Table>
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FelCor Lodging Trust Third Quarter 2003 Operating Results
October 29, 2003
Page 11
SELECTED BALANCE SHEET DATA
(in thousands)
<Table>
<Caption>
SEPTEMBER 30, DECEMBER 31,
2003 2002
------------- ------------
Investment in hotels $ 4,147,516 $ 4,255,618
Accumulated depreciation (871,685) (782,166)
----------- -----------
Investments in hotels, net of accumulated depreciation $ 3,275,831 $ 3,473,452
=========== ===========
Total cash and cash equivalents $ 175,983 $ 66,542
Total assets 3,760,625 3,780,363
Total debt 2,041,284 1,877,134
Total stockholders' equity $ 1,446,192 $ 1,616,817
</Table>
###