FelCor Reports First Quarter Results •Core RevPAR increased 6.7% and core hotel EBITDA increased 13% •Asset sale program progressing as planned Business Wire IRVING, Texas -- April 30, 2013 FelCor Lodging Trust Incorporated (NYSE: FCH), today reported operating results for the first quarter ended March31, 2013. Highlights: *RevPAR for 45 core hotels increased 6.7%. *Total revenue increased 6.1%, driven by a 5.5% increase in RevPAR at 65 same-store hotels. *Same-store Adjusted EBITDA was $37.7million, a 13.3% increase. *Adjusted FFO per share improved to a loss of $0.01 and net loss per share was $0.29. *Currently under negotiations or have agreed to sell six non-strategic hotels. Commenting on operating results, Richard A. Smith, President and Chief Executive Officer of FelCor, said, “I am very pleased with our performance during the quarter. Our high quality, diverse portfolio continues to produce strong results. Industry fundamentals remain very favorable, as demand growth remains robust and supply growth remains historically low. We expect these trends to continue for the foreseeable future, which will provide favorable conditions for sustained RevPAR growth.” Added Mr. Smith, “We continue to make substantial progress toward completing the transformation and repositioning of FelCor, building a first-class REIT and driving stockholder value. We have sold 19 of 39 non-strategic hotels, with six more either under contract or in negotiations. Our portfolio has improved significantly, as more than 90% of our EBITDA is now generated by upper upscale and luxury hotels strategically located around the country in gateway and resort markets with high barriers-to-entry and dynamic demand generators. We have also strengthened our balance sheet significantly. As asset sales continue and EBITDA increases, we are building greater financial flexibility and leverage will continue to decline.” Summary of First Quarter Operating Results: First Quarter $ in millions, except for 2013 2012 Change per share information Total revenue $ 220.7 $ 208.0 6.1 % Same-store Adjusted EBITDA $ 37.7 $ 33.3 13.3 % Adjusted EBITDA $ 37.7 $ 41.4 (9.0 )% Adjusted FFO per share $ (0.01 ) $ (0.02 ) $ 0.01 Net loss per share $ (0.29 ) $ (0.31 ) $ 0.02 Revenue per available room (“RevPAR”) for 65 same-store hotels was $100.17, a 5.5% increase compared to the same period in 2012. The increase reflects a 5.0% increase in average daily rate (“ADR”) to $143.90 and a 30 basis point increase in occupancy to 69.6%. RevPAR for our 45 core hotels increased 6.7%, while RevPAR for our 20 non-strategic hotels increased 1.2%. RevPAR at the six newly-acquired and recently-redeveloped hotels increased 17.8% during the quarter. Total revenue increased 6.1% from the same period in 2012. Hotel EBITDA was $48.0million, 8.3% higher than the same period in 2012. Hotel EBITDA margin was 21.8% during the quarter, a 44 basis point increase from the same period in 2012. Adjusted EBITDA (which includes Adjusted EBITDA for sold hotels prior to sale) was $37.7million compared to $41.4million for the same period in 2012. Adjusted funds from operations (“Adjusted FFO”) was a loss of $773,000, or $0.01 per share, compared to a loss of $0.02 per share in 2012. Net loss attributable to common stockholders was $35.9million, or $0.29per share for the quarter ended March31, 2013, compared to a net loss of $38.1million, or $0.31 per share, for the same period in 2012. Summary of Core Hotel Results: First Quarter 2013 2012 Change Hotel RevPAR $ 106.16 $ 99.47 6.7 % Hotel EBITDA, in $ 37.0 $ 32.8 12.6 % millions Hotel EBITDA margin 21.0 % 20.1 % 91 bps Total revenue for our 45 core hotels increased 7.7% compared to the same period in 2012, driven by a 6.7% increase in RevPAR to $106.16. The increase in RevPAR reflects a 6.0% increase in ADR to $154.23 and a 40basis point increase in occupancy to 68.8%. Hotel EBITDA at our core hotels increased 12.6% to $37.0 million. Hotel EBITDA margin at our core hotels was 21.0% during the quarter, a 91 basis point increase compared to the same period in 2012. EBITDA, Adjusted EBITDA, same-store Adjusted EBITDA, Hotel EBITDA, Hotel EBITDA margin, FFO, Adjusted FFO and Adjusted FFO per share are all non-GAAP financial measures. See our discussion of “Non-GAAP Financial Measures” beginning on page18 for a reconciliation of each of these measures to the most comparable GAAP financial measure and for information regarding the use, limitations and importance of these non-GAAP financial measures. Portfolio Repositioning: To date, we have sold 19 of 39 non-strategic hotels as part of our portfolio repositioning plan. We are currently marketing 11 non-strategic hotels and are evaluating offers or have agreed to sell six of those, including one under contract. We will use the proceeds from dispositions to repay debt and reduce leverage. The other nine non-strategic hotels are owned by joint ventures, and we are progressing on discussions with our partners to facilitate marketing those properties. In March, we successfully re-branded and transitioned management at eight Holiday Inn hotels to Wyndham brands. Wyndham Worldwide Corporation is providing a $100million guaranty over the 10-year term of the agreement, with an annual guaranty of up to $21.5million, that ensures a minimum annual NOI for the eight hotels. In addition, the management fee structure is more consistent with prevailing industry practices, and we expect to save approximately $50million in management fees over the initial term. The guaranty protects approximately 20% of our core hotel-level EBITDA from future lodging cycle fluctuations, in addition to ensuring a return on investment that is superior to the hotels' historical performance. Capital Expenditures: Capital expenditures at our operating hotels (including our prorata share of joint ventures), were $23.5million during the quarter (including approximately $6.4million for redevelopment projects and repositioning the eight Wyndham hotels). During 2013, we anticipate investing approximately $65million on capital improvements and renovations, concentrated mostly at seven hotels, as part of our 20-year capital plan. In addition, we anticipate investing approximately $40million on redevelopment projects (excluding Knickerbocker) and repositioning the Wyndham hotels. Please see page 12 of this release for more detail on renovations. Through March31, 2013, we have spent $35million to redevelop the 4+ star Knickerbocker Hotel, in midtown Manhattan. The project remains on budget and is scheduled to open in early 2014. Balance Sheet: At March31, 2013, we had $1.7billion of consolidated debt bearing a weighted-average interest rate of 6.3% (approximately 120 basis points below last year). Our debt has a weighted-average maturity of seven years, and none of our debt matures before June 2014. We had $61.8million of cash and cash equivalents at March31, 2013. In addition, at March31, 2013 we had $77.1million of restricted cash, of which $64.9million secures our Knickerbocker construction loan. Andrew J. Welch, FelCor's Executive Vice President and Chief Financial Officer, said, “Our balance sheet is stronger today because of our low borrowing costs, extended weighted-average debt maturity and ample liquidity. We are committed to making our balance sheet even stronger, as we repay higher-cost debt with net sale proceeds, further improve our maturity profile and continue to reduce our overall leverage.” Outlook: Our 2013 outlook assumes continued strength in lodging fundamentals and has been updated to reflect first quarter results and timing of asset sales. Our outlook reflects selling all 11 hotels during 2013. The low-end of our outlook assumes all sales occur in June, and the high-end of our outlook assumes all sales close at the beginning of the fourth quarter. During 2013, we anticipate: *Same-store RevPAR to increase between 5-6%; *Adjusted EBITDA to be between $190.5million and $205.0million; *Adjusted FFO per share to be between $0.33 and $0.43; *Net loss attributable to FelCor to be between $59million and $51million; and *Interest expense, including pro rata share of joint ventures, to be between $104million and $106million. The following table reconciles our 2013 Adjusted EBITDA to Same-store Adjusted EBITDA outlook (in millions): Low High Previous Adjusted EBITDA Outlook (65 hotels) $ 203.5 $ 208.5 Improved Operations 0.5 — Adjusted EBITDA Outlook (65 hotels) $ 204.0 $ 208.5 EBITDA of sold hotels from closing to December (13.5 ) (3.5 ) 31^(a) Adjusted EBITDA Outlook (54 hotels) $ 190.5 $ 205.0 Discontinued Operations^(b) (12.5 ) (22.5 ) Same-store Adjusted EBITDA (54 hotels) $ 178.0 $ 182.5 (a) EBITDA of 11 hotels assumed to be sold during 2013 that would have been recognized from the dates of sale through December 31, 2013. (b) EBITDA of 11 hotels assumed to be sold during 2013 that is forecasted to be generated from January 1, 2013 through the dates of sale. About FelCor: FelCor, a real estate investment trust, owns a diversified portfolio of primarily upper-upscale and luxury hotels that are located in major and resort markets. FelCor partners with leading hotel companies to operate its 66 hotels, which are flagged under globally renowned brands and premier independent hotels. Additional information can be found on the Company’s website at www.felcor.com. We invite you to listen to our first quarter earnings Conference Call on Tuesday, April30, 2013 at 10:30a.m. (Central Time). The conference call will be webcast simultaneously on FelCor’s website at www.felcor.com. Interested investors and other parties who wish to access the call can go to FelCor’s website and click on the conference call microphone icon on the “Investor Relations” page. The conference call replay also will be archived on the Company’s website. 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. These forward-looking statements are identified by their use of terms and phrases such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “should,” “will,” “continue” and other similar terms and phrases, including references to assumptions and forecasts of future results. 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 anticipated at the time the forward-looking statements are made. Current economic circumstances or an economic slowdown and the impact on the lodging industry, operating risks associated with the hotel business, relationships with our property managers, risks associated with our level of indebtedness and our ability to meet debt covenants in our debt agreements, our ability to complete acquisitions, dispositions and debt refinancing, the availability of capital, the impact on the travel industry from security precautions, our ability to continue to qualify as a Real Estate Investment Trust for federal income tax purposes 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. We undertake no obligation to update any forward-looking statement to conform the statement to actual results or changes in our expectations. SUPPLEMENTAL INFORMATION INTRODUCTION The following information is presented in order to help our investors understand FelCor’s financial position as of and for the three months ended March31, 2013. TABLE OF CONTENTS Page Consolidated Statements of Operations^(a) 7 Consolidated Balance Sheets^(a) 8 Consolidated Debt Summary 9 Schedule of Encumbered Hotels 10 Capital Expenditures 11 Hotels Under Renovation or Redevelopment During 2013 11 Supplemental Financial Data 12 Discontinued Operations 13 Hotel Portfolio Composition 14 Hotel Operating Statistics by Brand 15 Hotel Operating Statistics by Market 16 Historical Quarterly Operating Statistics 17 Non-GAAP Financial Measures 18 Our consolidated statements of operations and balance sheets have been prepared without audit. Certain information and footnote disclosures normally included in financial statements presented in accordance with (a) GAAP have been omitted. The consolidated statements of operations and balance sheets should be read in conjunction with the consolidated financial statements and notes thereto included in our most recent Annual Report on Form 10-K. Consolidated Statements of Operations (in thousands, except per share data) Three Months Ended March 31, 2013 2012 Revenues: Hotel operating revenue: Room $ 170,379 $ 161,779 Food and beverage 38,464 34,821 Other operating departments 11,448 11,090 Other revenue 399 275 Total revenues 220,690 207,965 Expenses: Hotel departmental expenses: Room 47,593 44,971 Food and beverage 31,462 28,345 Other operating departments 5,480 5,445 Other property-related costs 63,108 60,482 Management and franchise fees 9,654 9,778 Taxes, insurance and lease expense 22,667 21,710 Corporate expenses 7,832 8,212 Depreciation and amortization 31,570 30,068 Conversion expenses 628 — Other expenses 821 963 Total operating expenses 220,815 209,974 Operating loss (125 ) (2,009 ) Interest expense, net (26,483 ) (30,814 ) Debt extinguishment — (7 ) Loss before equity in income (loss) from (26,608 ) (32,830 ) unconsolidated entities Equity in income (loss) from 89 (224 ) unconsolidated entities Loss from continuing operations (26,519 ) (33,054 ) Income (loss) from discontinued (86 ) 4,193 operations Net loss (26,605 ) (28,861 ) Net loss attributable to noncontrolling 240 202 interests in other partnerships Net loss attributable to redeemable 180 196 noncontrolling interests in FelCor LP Net loss attributable to FelCor (26,185 ) (28,463 ) Preferred dividends (9,678 ) (9,678 ) Net loss attributable to FelCor common $ (35,863 ) $ (38,141 ) stockholders Basic and diluted per common share data: Loss from continuing operations $ (0.29 ) $ (0.34 ) Net loss $ (0.29 ) $ (0.31 ) Basic and diluted weighted average 123,814 123,665 common shares outstanding Consolidated Balance Sheets (in thousands) March 31, December 31, 2013 2012 Assets Investment in hotels, net of accumulated depreciation of $948,095 and $929,298 at $ 1,787,016 $ 1,794,564 March 31, 2013 and December 31, 2012, respectively Hotel development 156,081 146,079 Investment in unconsolidated entities 52,867 55,082 Cash and cash equivalents 61,796 45,745 Restricted cash 77,102 77,927 Accounts receivable, net of allowance for doubtful accounts of $243 and $469 at 34,293 25,383 March 31, 2013 and December 31, 2012, respectively Deferred expenses, net of accumulated amortization of $15,438 and $13,820 at 34,035 34,262 March 31, 2013 and December 31, 2012, respectively Other assets 26,096 23,391 Total assets $ 2,229,286 $ 2,202,433 Liabilities and Equity Debt, net of discount of $8,985 and $10,318 at March 31, 2013 and December 31, $ 1,683,756 $ 1,630,525 2012, respectively Distributions payable 8,545 8,545 Accrued expenses and other liabilities 147,715 138,442 Total liabilities 1,840,016 1,777,512 Commitments and contingencies Redeemable noncontrolling interests in FelCor LP, 621 units issued and 3,697 2,902 outstanding at March 31, 2013 and December 31, 2012 Equity: Preferred stock, $0.01 par value, 20,000 shares authorized: Series A Cumulative Convertible Preferred Stock, 12,880 shares, liquidation value of 309,362 309,362 $322,011, issued and outstanding at March 31, 2013 and December 31, 2012 Series C Cumulative Redeemable Preferred Stock, 68 shares, liquidation value of 169,412 169,412 $169,950, issued and outstanding at March 31, 2013 and December 31, 2012 Common stock, $0.01 par value, 200,000 shares authorized; 124,122 and 124,117 1,241 1,241 shares issued and outstanding at March 31, 2013 and December 31, 2012, respectively Additional paid-in capital 2,353,275 2,353,581 Accumulated other comprehensive income 25,684 26,039 Accumulated deficit (2,500,831 ) (2,464,968 ) Total FelCor stockholders’ equity 358,143 394,667 Noncontrolling interests in other 27,430 27,352 partnerships Total equity 385,573 422,019 Total liabilities and equity $ 2,229,286 $ 2,202,433 Consolidated Debt Summary (dollars in thousands) Encumbered Interest Maturity March 31, December Hotels Rate (%) Date 2013 31, 2012 Line of 9 L + June $ 109,000 $ 56,000 credit 3.375 2016^(a) Hotel mortgage debt Mortgage June - debt^(b) 5 6.66 August 64,906 65,431 2014 Mortgage 1 5.81 July 10,280 10,405 debt 2016 Mortgage 4 4.95 October 127,733 128,066 debt^(b) 2022 Mortgage 1 4.94 October 32,057 32,176 debt 2022 Senior notes Senior October secured 11 10.00 2014 224,919 223,586 notes^(c) Senior June secured 6 6.75 2019 525,000 525,000 notes Senior March secured 10 5.625 2023 525,000 525,000 notes Other^(d) — L + May 2016 64,861 64,861 1.25 Total 47 $ 1,683,756 $ 1,630,525 (a) Our $225 million line of credit can be extended for one year (to 2017), subject to satisfying certain conditions. (b) This debt is comprised of separate non-cross-collateralized loans each secured by a mortgage of a different hotel. We originally issued $636 million (face amount) of these notes. After (c) redemptions in 2011 and 2012, $234 million (face amount) of these notes were outstanding at March 31, 2013 and December 31, 2012. This loan is related to our Knickerbocker redevelopment project and is fully secured by restricted cash and a mortgage. Because we were able to (d) assume an existing loan when we purchased this hotel, we were not required to pay any local mortgage recording tax. This loan, which allows us to borrow up to $85 million, can be extended for one year subject to satisfying certain conditions. Schedule of Encumbered Hotels (dollars in millions) Consolidated March 31, 2013 Debt Balance Encumbered Hotels Charleston Mills House - WYN, Charlotte SouthPark - DT, Dana Point - DTGS, Houston Medical Center - WYN, Mandalay Beach - ES, Line of credit $ 109 Miami International Airport - ES, Philadelphia Historic District - WYN, Pittsburgh University Center - WYN and Santa Monica at the Pier - WYN Atlanta Airport - ES, Austin - CMBS debt^(a) $ 65 DTGS, BWI Airport - ES, Orlando Airport - HI and Phoenix Biltmore - ES CMBS debt $ 10 Indianapolis North - ES Birmingham - ES, Ft. Lauderdale - CMBS debt^(a) $ 128 ES, Minneapolis Airport - ES and Napa Valley - ES CMBS debt $ 32 Deerfield Beach - ES Atlanta Airport - SH, Boston Beacon Hill - WYN, Myrtle Beach Resort - ES, Nashville Opryland - Airport - HI, New Orleans French Senior secured notes Quarter - WYN, Orlando Walt Disney (10.00%) $ 225 World^® - DTGS, San Diego Bayside - WYN, San Francisco Waterfront - ES, San Francisco Fisherman’s Wharf - HI, San Francisco Union Square - MAR and Toronto Airport - HI Boston Copley - FMT, Indian Wells Esmeralda Resort & Spa - REN, Los Senior secured notes $ 525 Angeles International Airport - (6.75%) ES, Morgans, Royalton and St. Petersburg Vinoy Resort & Golf Club - REN Atlanta Buckhead - ES, Baton Rouge - ES, Boston Marlboro - ES, Senior secured notes Burlington - SH, Dallas Love Field (5.625%) $ 525 - ES, Milpitas - ES, Myrtle Beach Resort - HIL, Orlando South - ES, Philadelphia Society Hill - SH and SF South San Francisco - ES (a) This debt is comprised of separate non-cross-collateralized loans each secured by a mortgage of a different hotel. Capital Expenditures (in thousands) Three Months Ended March 31, 2013 2012 Improvements and additions to majority-owned $ 23,342 $ 41,385 hotels Partners’ pro rata share of additions to (158 ) (360 ) consolidated joint venture hotels Pro rata share of additions to unconsolidated 337 562 hotels Total additions to hotels^(a) $ 23,521 $ 41,587 (a) Includes capitalized interest, property taxes, property insurance, ground leases and certain employee costs. Hotels Under Renovation or Redevelopment During 2013 Renovations Primary Areas Start Date End Date Myrtle Beach guestrooms Oct-2012 Mar-2013 Resort-HIL Napa Valley-ES public areas^(a) Nov-2012 Mar-2013 Mandalay Beach-ES public areas, meeting Jan-2013 May-2013 rooms, F&B^(b) San Francisco public areas Feb-2013 May-2013 Waterfront-ES Santa Monica Beach - guestrooms, corridors, May-2013 Aug-2013 at the Pier-WYN public areas Ft. Lauderdale-ES public areas Aug-2013 Oct-2013 Orlando - Walt guestrooms, Disney World corridors^(c) May-2013 Nov-2013 Resort-DT LAX South-ES public areas, Sep-2013 Dec-2013 corridors^(d) Houston Medical guestrooms, corridors, Jul-2013 Dec-2013 Center-WYN public areas Philadelphia - guestrooms, corridors, Historic public areas Aug-2013 Jan-2014 District-WYN Charleston Mills guestrooms, corridors, Aug-2013 Jan-2014 House-WYN public areas Redevelopments guestroom additions, Morgans public areas, fitness Feb-2012 June-2013 area, re-concept F&B (a) Guestroom renovations were completed in April 2012. (b) Guestroom renovations were completed in May 2012. (c) Public area renovations were completed in June 2012. (d) Guest room renovations were completed in February 2013. Supplemental Financial Data (in thousands, except per share data) March 31, December 31, Total Enterprise Value 2013 2012 Common shares outstanding 124,122 124,117 Units outstanding 621 621 Combined shares and units outstanding 124,743 124,738 Common stock price $ 5.95 $ 4.67 Market capitalization $ 742,221 $ 582,526 Series A preferred stock^(a) 309,362 309,362 Series C preferred stock^(a) 169,412 169,412 Consolidated debt^(b) 1,683,756 1,630,525 Noncontrolling interests of consolidated (2,787 ) (2,810 ) debt Pro rata share of unconsolidated debt 73,943 74,198 Hotel development (156,081 ) (146,079 ) Cash, cash equivalents and restricted (138,898 ) (123,672 ) cash^(b) Total enterprise value (TEV) $ 2,680,928 $ 2,493,462 (a) Book value based on issue price. (b) Restricted cash includes $64.9 million of cash fully securing $64.9 million of debt that was assumed when we purchased the Knickerbocker. Discontinued Operations (in thousands) Discontinued operations include the results of operations for ten hotels sold in 2012. Condensed financial information for the hotels included in discontinued operations is as follows: Three Months Ended March 31, 2013 2012 Operating revenue $ — $ 27,840 Operating expenses (86 ) (22,699 ) Operating income (loss) (86 ) 5,141 Interest expense, net — (948 ) Income (loss) from discontinued operations (86 ) 4,193 Depreciation and amortization — 2,924 Interest expense — 948 Adjusted EBITDA from discontinued operations $ (86 ) $ 8,065 Hotel Portfolio Composition The following table illustrates the distribution of same-store hotels. 2012 Hotel 2012 Hotel Operating EBITDA Brand Hotels Rooms Revenue (in thousands)^(a) (in thousands) Embassy Suites 20 5,433 $ 256,200 $ 78,389 Hotels Wyndham and Wyndham 8 2,526 120,354 37,960 Grand^(b) Renaissance and 3 1,321 111,976 17,912 Marriott DoubleTree by Hilton and 5 1,206 56,071 16,706 Hilton Sheraton and 4 1,604 68,369 14,540 Westin Fairmont 1 383 41,255 4,286 Holiday Inn 2 968 40,512 4,218 Morgans and 2 282 32,129 3,458 Royalton Core hotels 45 13,723 726,866 177,469 Non-strategic 20 5,099 179,474 48,044 hotels Same-store 65 18,822 $ 906,340 $ 225,513 hotels Market San Francisco 4 1,637 $ 99,659 $ 21,036 area Los Angeles 3 677 33,287 13,760 area South Florida 3 923 47,298 13,257 Boston 3 916 68,121 12,126 New York area 4 817 57,052 9,733 Myrtle Beach 2 640 36,973 9,429 Atlanta 3 952 35,410 9,230 Philadelphia 2 728 36,122 8,882 Tampa 1 361 45,152 7,957 San Diego 1 600 26,445 6,688 Other markets 19 5,472 241,347 65,371 Core hotels 45 13,723 726,866 177,469 Non-strategic 20 5,099 179,474 48,044 hotels Same-store 65 18,822 $ 906,340 $ 225,513 hotels Location Urban 17 5,305 $ 316,354 $ 74,446 Resort 10 2,928 183,807 41,475 Airport 9 2,957 126,906 33,742 Suburban 9 2,533 99,799 27,806 Core hotels 45 13,723 726,866 177,469 Non-strategic 20 5,099 179,474 48,044 hotels Same-store 65 18,822 $ 906,340 $ 225,513 hotels (a) Hotel EBITDA is more fully described on page 24. (b) These hotels converted from Holiday Inn on March 1, 2013. The following tables set forth occupancy, ADR and RevPAR for the three months ended March31, 2013 and 2012, and the percentage changes therein for the periods presented, for our same-store Consolidated Hotels included in continuing operations. Hotel Operating Statistics by Brand Occupancy (%) Three Months Ended March 31, 2013 2012 %Variance Embassy Suites Hotels 73.1 74.0 (1.2 ) Wyndham and Wyndham Grand^(a) 63.6 71.6 (11.3 ) Renaissance and Marriott 74.8 73.5 1.7 DoubleTree by Hilton and Hilton 61.4 62.9 (2.4 ) Sheraton and Westin 63.4 57.6 10.1 Fairmont 60.3 27.7 118.2 Holiday Inn 68.4 60.5 13.0 Morgans and Royalton 81.0 76.0 6.7 Core hotels (45) 68.8 68.4 0.6 Non-strategic hotels (20) 71.7 71.6 0.1 Same-store hotels (65) 69.6 69.3 0.5 ADR ($) Three Months Ended March 31, 2013 2012 %Variance Embassy Suites Hotels 153.28 146.52 4.6 Wyndham and Wyndham Grand^(a) 139.38 133.20 4.6 Renaissance and Marriott 221.01 210.58 5.0 DoubleTree by Hilton and Hilton 146.97 133.10 10.4 Sheraton and Westin 108.13 102.24 5.8 Fairmont 221.26 213.15 3.8 Holiday Inn 112.44 109.95 2.3 Morgans and Royalton 260.05 249.85 4.1 Core hotels (45) 154.23 145.45 6.0 Non-strategic hotels (20) 117.07 115.80 1.1 Same-store hotels (65) 143.90 137.10 5.0 RevPAR ($) Three Months Ended March 31, 2013 2012 %Variance Embassy Suites Hotels 112.08 108.45 3.3 Wyndham and Wyndham Grand^(a) 88.60 95.43 (7.2 ) Renaissance and Marriott 165.32 154.82 6.8 DoubleTree by Hilton and Hilton 90.18 83.72 7.7 Sheraton and Westin 68.51 58.86 16.4 Fairmont 133.52 58.96 126.5 Holiday Inn 76.89 66.52 15.6 Morgans and Royalton 210.76 189.78 11.1 Core hotels (45) 106.16 99.47 6.7 Non-strategic hotels (20) 83.98 82.97 1.2 Same-store hotels (65) 100.17 94.97 5.5 (a) These hotels converted from Holiday Inn on March 1, 2013. Hotel Operating Statistics by Market Occupancy (%) Three Months Ended March 31, 2013 2012 %Variance San Francisco area 75.0 73.8 1.7 Los Angeles area 69.5 81.0 (14.2 ) South Florida 90.8 86.0 5.5 Boston 64.6 49.0 31.8 New York area 70.7 68.3 3.6 Myrtle Beach 37.0 42.9 (13.7 ) Atlanta 74.4 72.0 3.3 Philadelphia 50.6 48.7 3.9 Tampa 83.7 84.4 (0.8 ) San Diego 66.5 79.8 (16.7 ) Other markets 68.1 68.3 (0.3 ) Core hotels (45) 68.8 68.4 0.6 Non-strategic hotels (20) 71.7 71.6 0.1 Same-store hotels (65) 69.6 69.3 0.5 ADR ($) Three Months Ended March 31, 2013 2012 %Variance San Francisco area 162.99 156.02 4.5 Los Angeles area 149.72 141.27 6.0 South Florida 190.78 184.16 3.6 Boston 167.50 151.02 10.9 New York area 194.37 186.66 4.1 Myrtle Beach 108.94 106.24 2.5 Atlanta 113.51 110.84 2.4 Philadelphia 131.03 120.14 9.1 Tampa 215.29 201.21 7.0 San Diego 121.51 121.18 0.3 Other markets 146.74 138.15 6.2 Core hotels (45) 154.23 145.45 6.0 Non-strategic hotels (20) 117.07 115.80 1.1 Same-store hotels (65) 143.90 137.10 5.0 RevPAR ($) Three Months Ended March 31, 2013 2012 %Variance San Francisco area 122.28 115.14 6.2 Los Angeles area 104.03 114.41 (9.1 ) South Florida 173.22 158.44 9.3 Boston 108.19 74.02 46.1 New York area 137.42 127.41 7.9 Myrtle Beach 40.30 45.55 (11.5 ) Atlanta 84.45 79.82 5.8 Philadelphia 66.25 58.49 13.3 Tampa 180.26 169.79 6.2 San Diego 80.75 96.66 (16.5 ) Other markets 99.89 94.32 5.9 Core hotels (45) 106.16 99.47 6.7 Non-strategic hotels (20) 83.98 82.97 1.2 Same-store hotels (65) 100.17 94.97 5.5 Historical Quarterly Operating Statistics Occupancy (%) Q2 2012 Q3 2012 Q4 2012 Q1 2013 Core hotels (45) 77.7 76.5 66.8 68.8 Non-strategic hotels (20) 75.1 73.0 67.3 71.7 Same-store hotels (65) 77.0 75.5 66.9 69.6 ADR ($) Q2 2012 Q3 2012 Q4 2012 Q1 2013 Core hotels (45) 155.03 153.45 152.54 154.23 Non-strategic hotels (20) 117.02 119.71 116.10 117.07 Same-store hotels (65) 144.93 144.57 142.76 143.90 RevPAR ($) Q2 2012 Q3 2012 Q4 2012 Q1 2013 Core hotels (45) 120.49 117.40 101.92 106.16 Non-strategic hotels (20) 87.89 87.37 78.13 83.98 Same-store hotels (65) 111.61 109.22 95.57 100.17 Non-GAAP Financial Measures We refer in this release to certain “non-GAAP financial measures.” These measures, including FFO, Adjusted FFO, EBITDA, Adjusted EBITDA, same-store Adjusted EBITDA, Hotel EBITDA and Hotel EBITDA margin, are measures of our financial performance that are not calculated and presented in accordance with generally accepted accounting principles (“GAAP”). The following tables reconcile each of these non-GAAP measures to the most comparable GAAP financial measure. Immediately following the reconciliations, we include a discussion of why we believe these measures are useful supplemental measures of our performance and the limitations of such measures. Reconciliation of Net Loss to FFO and Adjusted FFO (in thousands, except per share data) Three Months Ended March 31, 2013 2012 Dollars Shares Per Share Dollars Shares Per Share Amount Amount Net loss $ (26,605 ) $ (28,861 ) Noncontrolling 420 398 interests Preferred (9,678 ) (9,678 ) dividends Net loss attributable to FelCor (35,863 ) 123,814 $ (0.29 ) (38,141 ) 123,665 $ (0.31 ) common stockholders Depreciation and 31,570 — 0.25 30,068 — 0.24 amortization Depreciation, discontinued operations and 2,706 — 0.02 5,761 — 0.05 unconsolidated entities Noncontrolling interests in (180 ) 621 0.01 (196 ) 636 — FelCor LP FFO (1,767 ) 124,435 (0.01 ) (2,508 ) 124,301 (0.02 ) Acquisition 23 — — 38 — — costs Debt — — — 7 — — extinguishment Severance — — — 380 — — costs Conversion 628 — — — — — expenses Pre-opening costs, net of 241 — — — — — noncontrolling interests Variable stock 102 — — — — — compensation Adjusted FFO $ (773 ) 124,435 $ (0.01 ) $ (2,083 ) 124,301 $ (0.02 ) Reconciliation of Net Loss to EBITDA, Adjusted EBITDA and Same-store Adjusted EBITDA (in thousands) Three Months Ended March 31, 2013 2012 Net loss $ (26,605 ) $ (28,861 ) Depreciation and amortization 31,570 30,068 Depreciation, discontinued operations and 2,706 5,761 unconsolidated entities Interest expense 26,505 30,862 Interest expense, discontinued operations and 672 1,625 unconsolidated entities Noncontrolling interests in other partnerships 240 202 EBITDA 35,088 39,657 Debt extinguishment — 7 Acquisition costs 23 38 Amortization of fixed stock and directors’ 1,578 1,296 compensation Severance costs — 380 Conversion expenses 628 — Pre-opening costs, net of noncontrolling 241 — interests Variable stock compensation 102 — Adjusted EBITDA 37,660 41,378 Adjusted EBITDA from discontinued operations 86 (8,065 ) Same-store Adjusted EBITDA $ 37,746 $ 33,313 Hotel EBITDA and Hotel EBITDA Margin (dollars in thousands) Three Months Ended March 31, 2013 2012 Same-store operating revenue: Room $ 170,379 $ 161,779 Food and beverage 38,464 34,821 Other operating departments 11,448 11,090 Same-store operating revenue 220,291 207,690 Same-store operating expense: Room 47,593 44,971 Food and beverage 31,462 28,345 Other operating departments 5,480 5,445 Other property related costs 63,108 60,482 Management and franchise fees 9,654 9,778 Taxes, insurance and lease expense 15,007 14,347 Same-store operating expense 172,304 163,368 Hotel EBITDA $ 47,987 $ 44,322 Hotel EBITDA Margin 21.8 % 21.3 % Three Months Ended March 31, 2013 2012 Hotel EBITDA - Core (45) $ 36,952 $ 32,822 Hotel EBITDA - Non-strategic (20) 11,035 11,500 Hotel EBITDA $ 47,987 $ 44,322 Hotel EBITDA Margin - Core (45) 21.0 % 20.1 % Hotel EBITDA Margin - Non-strategic (20) 24.9 % 26.0 % Reconciliation of Same-store Operating Revenue and Same-store Operating Expense to Total Revenue, Total Operating Expense and Operating Loss (in thousands) Three Months Ended March 31, 2013 2012 Same-store operating revenue $ 220,291 $ 207,690 Other revenue 399 275 Total revenue 220,690 207,965 Same-store operating expense 172,304 163,368 Consolidated hotel lease expense^(a) 9,558 9,194 Unconsolidated taxes, insurance and (1,898 ) (1,831 ) lease expense Corporate expenses 7,832 8,212 Depreciation and amortization 31,570 30,068 Conversion expenses 628 — Other expenses 821 963 Total operating expense 220,815 209,974 Operating loss $ (125 ) $ (2,009 ) Consolidated hotel lease expense represents the percentage lease expense (a) of our 51% owned operating lessees. The offsetting percentage lease revenue is included in equity in income from unconsolidated entities. Reconciliation of Forecasted Net Loss attributable to FelCor to Forecasted Adjusted FFO and Adjusted EBITDA (in millions, except per share data) Full Year 2013 Guidance Low High Per Share Per Share Dollars Amount((a)) Dollars Amount((a)) Net loss attributable to $ (59.0 ) $ (51.0 ) FelCor^(b) Preferred (39.0 ) (39.0 ) dividends Net loss attributable to (98.0 ) $ (0.79 ) (90.0 ) $ (0.73 ) FelCor common stockholders Depreciation^(c) 138.5 143.0 FFO $ 40.5 $ 0.32 $ 53.0 $ 0.43 Pre-opening and 1.0 1.0 conversion costs Adjusted FFO $ 41.5 $ 0.33 $ 54.0 $ 0.43 Net loss attributable to $ (59.0 ) $ (51.0 ) FelCor^(b) Depreciation^(c) 138.5 143.0 Interest 104.0 106.0 expense^(c) Amortization 6.0 6.0 expense EBITDA 189.5 204.0 Pre-opening and 1.0 1.0 conversion costs Adjusted EBITDA $ 190.5 $ 205.0 (a) Weighted average shares are 125.0 million. (b) For guidance, we have assumed no gains or losses on future asset sales. (c) Includes pro rata portion of unconsolidated entities. Substantially all of our non-current assets consist of real estate. Historical cost accounting for real estate assets implicitly assumes that the value of real estate assets diminishes predictably over time. Since real estate values instead have historically risen or fallen with market conditions, most industry investors consider supplemental measures of performance, which are not measures of operating performance under GAAP, to be helpful in evaluating a real estate company’s operations. These supplemental measures are not measures of operating performance under GAAP. However, we consider these non-GAAP measures to be supplemental measures of a hotel REIT’s performance and should be considered along with, but not as an alternative to, net income (loss) attributable to FelCor as a measure of our operating performance. FFO and EBITDA The National Association of Real Estate Investment Trusts (“NAREIT”) defines FFO as net income or loss attributable to parent (computed in accordance with GAAP), excluding gains or losses from sales of property, plus depreciation, amortization and impairment losses. FFO for unconsolidated partnerships and joint ventures are calculated on the same basis. 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. EBITDA is a commonly used measure of performance in many industries. We define EBITDA as net income or loss attributable to parent (computed in accordance with GAAP) plus interest expenses, income taxes, depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. Adjustments for unconsolidated partnerships and joint ventures are calculated to reflect EBITDA on the same basis. Adjustments to FFO and EBITDA We adjust FFO and EBITDA when evaluating our performance because management believes that the exclusion of certain additional items provides useful supplemental information to investors regarding our ongoing operating performance and that the presentation of Adjusted FFO, and Adjusted EBITDA when combined with GAAP net income attributable to FelCor, EBITDA and FFO, is beneficial to an investor’s better understanding of our operating performance. *Gains and losses related to extinguishment of debt and interest rate swaps - We exclude gains and losses related to extinguishment of debt and interest rate swaps from FFO and EBITDA because we believe that it is not indicative of ongoing operating performance of our hotel assets. This also represents an acceleration of interest expense or a reduction of interest expense, and interest expense is excluded from EBITDA. *Cumulative effect of a change in accounting principle - Infrequently, the Financial Accounting Standards Board promulgates new accounting standards that require the consolidated statements of operations to reflect the cumulative effect of a change in accounting principle. We exclude these one-time adjustments in computing Adjusted FFO and Adjusted EBITDA because they do not reflect our actual performance for that period. *Other transaction costs - From time to time, we periodically incur costs that are not indicative of ongoing operating performance. Such costs include, but are not limited to, conversion costs, acquisition costs, pre-opening costs and severance costs. We exclude these costs from the calculation of Adjusted FFO and Adjusted EBITDA. *Variable stock compensation - We exclude the cost associated with our variable stock compensation. This cost is subject to volatility related to the price and dividends of our common stock that does not necessarily correspond to our operating performance. In addition, to derive Adjusted EBITDA, we exclude gains or losses on the sale of depreciable assets and impairment losses because including them in EBITDA is inconsistent with reporting the ongoing performance of our remaining assets. Additionally, the gain or loss on sale of depreciable assets and impairment losses represents either accelerated depreciation or excess depreciation in previous periods, and depreciation is excluded from EBITDA. We also exclude the amortization of our fixed stock and directors’ compensation. While this amortization is included in corporate expenses and is not separately stated on our statement of operations, excluding this amortization is consistent with the EBITDA definition. Hotel EBITDA and Hotel EBITDA Margin Hotel EBITDA and Hotel EBITDA margin are commonly used measures of performance in the hotel industry and give investors a more complete understanding of the operating results over which our individual hotels and brand/managers have direct control. We believe that Hotel EBITDA and Hotel EBITDA margin are useful to investors by providing greater transparency with respect to two significant measures that we use in our financial and operational decision-making. Additionally, using these measures facilitates comparisons with other hotel REITs and hotel owners. We present Hotel EBITDA and Hotel EBITDA margin in a manner consistent with Adjusted EBITDA, however, we also eliminate all revenues and expenses from continuing operations not directly associated with hotel operations, including other income and corporate-level expenses. We eliminate these additional items because we believe property-level results provide investors with supplemental information into the ongoing operational performance of our hotels and the effectiveness of management on a property-level basis. We also eliminate consolidated percentage rent paid to unconsolidated entities, which is effectively eliminated by noncontrolling interests and equity in income from unconsolidated subsidiaries, and include the cost of unconsolidated taxes, insurance and lease expense, to reflect the entire operating costs applicable to our Consolidated Hotels. Hotel EBITDA and Hotel EBITDA margins are presented on a same-store basis. Use and Limitations of Non-GAAP Measures Our management and Board of Directors use FFO, Adjusted FFO, EBITDA, Adjusted EBITDA, Same-store Adjusted EBITDA, Hotel EBITDA and Hotel EBITDA margin to evaluate the performance of our hotels and to facilitate comparisons between us and other lodging REITs, hotel owners who are not REITs and other capital intensive companies. We use Hotel EBITDA and Hotel EBITDA margin in evaluating hotel-level performance and the operating efficiency of our hotel managers. The use of these non-GAAP financial measures has certain limitations. These non-GAAP financial measures as presented by us, may not be comparable to non-GAAP financial measures as calculated by other real estate companies. These measures do not reflect certain expenses or expenditures that we incurred and will incur, such as depreciation, interest and capital expenditures. Management compensates for these limitations by separately considering the impact of these excluded items to the extent they are material to operating decisions or assessments of our operating performance. Our reconciliations to the most comparable GAAP financial measures, and our consolidated statements of operations and cash flows, include interest expense, capital expenditures, and other excluded items, all of which should be considered when evaluating our performance, as well as the usefulness of our non-GAAP financial measures. These non-GAAP financial measures are used in addition to and in conjunction with results presented in accordance with GAAP. They should not be considered as alternatives to operating profit, cash flow from operations, or any other operating performance measure prescribed by GAAP. These non-GAAP financial measures reflect additional ways of viewing our operations that we believe, when viewed with our GAAP results and the reconciliations to the corresponding GAAP financial measures, provide a more complete understanding of factors and trends affecting our business than could be obtained absent this disclosure. Management strongly encourages investors to review our financial information in its entirety and not to rely on a single financial measure. Contact: FelCor Lodging Trust Incorporated Stephen A. Schafer, 972-444-4912 Vice President Strategic Planning & Investor Relations firstname.lastname@example.org
FelCor Reports First Quarter Results
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