FelCor Reports First Quarter Results

  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
sschafer@felcor.com