FELCOR LODGING L P - 10-Q Quarterly Report

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

(MARK ONE)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2003

OR

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM TO

COMMISSION FILE NUMBER 333-3959-01

FELCOR LODGING LIMITED PARTNERSHIP
(Exact name of registrant as specified in its charter)

Delaware 75-2544994
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

545 E. JOHN CARPENTER FREEWAY, SUITE 1300, IRVING, TEXAS 75062
(Address of principal executive offices) (Zip Code)

(972) 444-4900
(Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all
documents and reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Yes [X] No [ ]

Indicate by check mark whether the registrant is an accelerated filer
(as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [X]

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FELCOR LODGING LIMITED PARTNERSHIP

INDEX

2

PART I. -- FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

FELCOR LODGING LIMITED PARTNERSHIP

CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)

The accompanying notes are an integral part of these consolidated
financial statements.

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FELCOR LODGING LIMITED PARTNERSHIP

CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2003 AND 2002
(UNAUDITED, IN THOUSANDS EXCEPT FOR PER UNIT DATA)

The accompanying notes are an integral part of these consolidated
financial statements.

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FELCOR LODGING LIMITED PARTNERSHIP

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
FOR THE THREE MONTHS ENDED MARCH 31, 2003 AND 2002
(UNAUDITED, IN THOUSANDS)

The accompanying notes are an integral part of these consolidated
financial statements.

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FELCOR LODGING LIMITED PARTNERSHIP

CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 2003 AND 2002
(UNAUDITED, IN THOUSANDS)

The accompanying notes are an integral part of these consolidated
financial statements.

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FELCOR LODGING LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. ORGANIZATION

FelCor Lodging Limited Partnership, or FelCor LP, is the largest owner
of full service, all suite hotels. Our sole general partner is FelCor Lodging
Trust Incorporated, or FelCor, a Maryland corporation, the second largest real
estate investment trust, or REIT. At March 31, 2003, FelCor owned a greater than
95% equity interest in our operations. At March 31, 2003, FelCor was the
nation's second largest lodging REIT and the largest owner of full service,
all-suite hotels. Our portfolio at March 31, 2003, was comprised of 169 hotels,
the operating revenues and expenses of which are reflected in our consolidated
statements of operations because of our ownership of the operating lessees of
these hotels. We owned 77 upscale, all-suite hotels, 83 hotels in the upscale or
full service segments and are the largest owner of Embassy Suites(R) Hotels and
Doubletree Guest Suites(R) hotels, at March 31, 2003. All of our operations are
conducted solely through FelCor LP or its subsidiaries. At March 31, 2003, we
owned a 100% real estate interest in 145 hotels, a 90% or greater interest in
entities owning seven hotels, a 60% interest in an entity owning two hotels and
50% interests in unconsolidated entities that own 29 hotels. The operations of
15 of these 29 hotels are included in our consolidated results of operations due
to our ownership of the lessee of the hotels.

At March 31, 2003, we had an aggregate of 62,154,164 shares of FelCor
common stock, and units of FelCor LP limited partnership interest outstanding.

The following table provides a schedule of our 169 consolidated hotel
operations, by brand, at March 31, 2003:

At March 31, 2003, the operations of our 169 hotels were located in the
United States (35 states) and Canada (six hotels), with a concentration in Texas
(36 hotels), California (19 hotels), Florida (16 hotels) and Georgia (12
hotels). Approximately 54% of our hotel room revenues were generated from hotels
in these four states during the quarter.

At March 31, 2003, of the 169 hotels, (i) subsidiaries of
InterContinental Hotels Group managed 82, (ii) subsidiaries of Hilton managed
72, (iii) subsidiaries of Starwood managed 11, (iv) subsidiaries of Interstate
Hotels Corporation, or IHC, managed two, and (v) two independent management
companies managed one each.

Certain reclassifications have been made to prior period financial
information to conform to the current period's presentation with no effect to
previously reported net income or partners' capital.

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FELCOR LODGING LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. ORGANIZATION -- (CONTINUED)

The financial information for the three months ended March 31, 2003,
and 2002, is unaudited. The preparation of the financial statements in
conformity with accounting principles generally accepted in the United States of
America requires management to make estimates and assumptions that affect the
amounts reported in the financial statements and accompanying notes. Actual
results could differ from those estimates. The accompanying financial statements
for the three months ended March 31, 2003, and 2002 include adjustments made to
management's estimates (consisting only of normal recurring accruals) which the
Company considers necessary for a fair presentation of the results for the
periods. The financial information should be read in conjunction with the
consolidated financial statements for the year ended December 31, 2002, included
in the Company's Annual Report on Form 10-K for the year ended December 31, 2002
("Form 10-K"). Operating results for the three months ended March 31, 2003, are
not necessarily indicative of the results that may be expected for the entire
year ending December 31, 2003.

2. INVESTMENT IN UNCONSOLIDATED ENTITIES

We owned 50% interests in joint venture entities that owned 29 hotels
at March 31, 2003, and 24 hotels at March 31, 2002. We also owned a 50% interest
in entities that own an undeveloped parcel of land, provide condominium
management services, develop condominiums in Myrtle Beach, South Carolina, and
lease 13 hotels. We account for our investments in these unconsolidated entities
under the equity method.

Summarized combined financial information for 100% of these
unconsolidated entities is as follows (in thousands):

Debt of our unconsolidated entities at March 31, 2003, consisted of
$266.7 million of non-recourse mortgage debt. It also included $9.5 million of
mortgage debt guaranteed by us and $9.2 million of mortgage debt guaranteed by
Hilton, one of our joint venture partners. The debt guaranteed by us consisted
primarily of 50% of a loan related to the construction of a residential
condominium project in Myrtle Beach, South Carolina. The loan commitment is for
$97.6 million, of which approximately $18.4 million was outstanding as of March
31, 2003. Our guarantee reduces from 50% to 25% of the outstanding balance when
the condominium project is completed and receives a certificate of occupancy,
which we expect to occur in late 2004. Our guarantee is a payment guarantee and
will trigger in the event that the joint venture fails to pay interest or
principal due under the debt agreement. The loan matures in August 2005, and
bears interest at LIBOR plus 200 basis points. As of March 31, 2003, we had not
established any liability related to our guarantees of debt because it was not
believed to be probable that we would be required to perform under the
guarantees.

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FELCOR LODGING LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2. INVESTMENT IN UNCONSOLIDATED ENTITIES - (CONTINUED)

Summarized combined statement of operations information for 100% of
these unconsolidated entities is as follows (in thousands):

3. DEBT

Debt at March 31, 2003, and December 31, 2002, consisted of the
following (in thousands):

(a) At March 31, 2003, we had unencumbered investments in hotels
with a net book value totaling $2.3 billion.

(b) At March 31, 2003, our $175 million publicly-traded notes due
October 2004 and $75 million of our publicly traded notes due
October 2007, were matched with interest rate swap agreements
that effectively converted the fixed interest rate on the
notes to a floating interest rate tied to LIBOR. The
differences to be paid or received by us under the terms of
the interest rate swap agreements are accrued as interest
rates change and recognized as an adjustment to interest
expense. The interest rate swaps decreased interest expense by
$1.6 million for the three months ended March 31, 2003.

(c) Calculated based on the weighted average outstanding debt at
March 31, 2003.

All of our floating rate debt at March 31, 2003, was based upon LIBOR
(1.30% as of March 31, 2003).

We reported interest expense, net of interest income, of $0.4 million
and $0.6 million, and capitalized interest of $0.3 million and $0.1 million, for
the three months ended March 31, 2003 and 2002, respectively.

We recorded a gain of $1 million as a result of the early
extinguishment of a mortgage note, maturing in 2003, during the three months
ended March 31, 2003.

Effective March 31, 2003, we completed the refinancing of $16 million
of secured debt that was to mature in late 2003. Under the refinancing terms,
this 7.15% fixed rate debt will convert to a floating interest rate of LIBOR
plus 285 basis points in August 2003. The new maturity is August 2008.

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FELCOR LODGING LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

3. DEBT -- (CONTINUED)

In January and February 2003, we entered into two additional interest
rate swaps. These new fair value swaps are the same type as those that existed
at December 31, 2002, in that they modify a portion of the interest
characteristics of our outstanding fixed rate debt, without an exchange of the
underlying principal amount, and effectively convert fixed rate debt to a
variable rate. As designated fair value hedges, these swaps are marked to market
through the income statement, but offset by the change in fair value of our
swapped outstanding fixed rate debt. The notional amount of these new swaps is
$50 million, on which we will receive a fixed rate of 7.625% and pay a rate of
LIBOR plus an average spread of 4.325%.

In addition to financial covenants, our line of credit includes certain
other affirmative and negative covenants, including: restrictions on our ability
to create or acquire wholly-owned subsidiaries; restrictions on the
operation/ownership of our hotels; limitations on our ability to lease property
or guarantee leases of other persons; limitations on our ability to make
restricted payments (such as distributions on common and preferred stock, share
repurchases and certain investments); limitations on our ability to merge or
consolidate with other persons, issue stock of our subsidiaries and sell all or
substantially all of our assets; restrictions on our ability to construct new
hotels or acquire hotels under construction; limitations on our ability to
change the nature of our business; limitations on our ability to modify certain
instruments; limitations on our ability to create liens; limitations on our
ability to enter into transactions with affiliates; and limitations on our
ability to enter into joint ventures. At March 31, 2003, we were in compliance
with all covenants under our line of credit.

If revenue per available room declines continue or become more severe,
we may be unable to satisfy all of the covenant requirements under our line of
credit. In such an event, we may need to obtain further amendments from our
lenders or seek other sources of financing. Further amendments to our line of
credit, if any, may result in additional restrictions on our financial
flexibility.

Failure to satisfy one or more of the financial or other covenants
under our line of credit could result in an event of default, notwithstanding
our ability to meet our debt service obligations. Other events that would be
events of default under our line of credit include a default in the payment of
other recourse indebtedness in the amount of $10 million or more, bankruptcy or
a change of control.

Our other borrowings contain affirmative and negative covenants that
are generally equal to or less restrictive than those in our line of credit.
Most of our mortgage debt is non-recourse to us and contains provisions allowing
for the substitution of collateral upon satisfaction of certain conditions. Most
of our mortgage debt is prepayable, subject to various prepayment penalties,
yield maintenance or defeasance obligations.

Our publicly traded senior unsecured notes require that we satisfy a
total leverage, a secured leverage and an interest coverage test in order to:
incur additional indebtedness, except under our line of credit or to refinance
maturing debt with replacement debt, as defined in our senior unsecured note
indentures; pay dividends in excess of the minimum dividend required to meet the
REIT qualification test; repurchase stock; or merge. As of March 31, 2003, and
the date of this filing, we have satisfied all such incurrence tests.

As a consequence of the economic slowdown in our business, and the
travel and lodging industries generally, Standard & Poor's lowered its ratings
on our $1.2 billion in senior unsecured debt one level, to B+, from BB-, in
February 2003, and subsequently revised their outlook from stable to negative.
Although Moody's affirmed its current rating on our senior debt in February 2003
(Ba3), we remain on negative outlook. Should Moody's downgrade its Ba3 rating on
our senior unsecured debt one level, to B1, the interest rate on $900 million of
our $1.2 billion senior unsecured debt would increase by 50 basis points, which
would increase our annual interest expense by approximately $4.5 million.

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FELCOR LODGING LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

4. DERIVATIVES

On the date we enter into a derivative contract, we designate the
derivative as a hedge to the exposure to changes in the fair value of a
recognized asset or liability or a firm commitment (referred to as a fair value
hedge), or the exposure to variable cash flows of a forecasted transaction
(referred to as a cash flow hedge). For a fair value hedge, the gain or loss is
recognized in earnings in the period of change, together with the offsetting
loss or gain on the hedged item attributable to the risk being hedged. The
effect of that accounting is to reflect in earnings the extent to which the
hedge is not effective in achieving offsetting changes in fair value. For a cash
flow hedge the effective portion of the derivative's gain or loss is initially
reported as a component of other comprehensive income (outside earnings) and
subsequently reclassified into earnings when the forecasted transaction affects
earnings. The ineffective portion of the gain or loss is reported in earnings
immediately. At March 31, 2003, all of our derivative contracts are fair value
hedges.

We formally document all relationships between hedging instruments and
hedged items, as well as our risk-management objective and strategy, relating to
our various hedge transactions. This process includes linking all derivatives to
specific assets and liabilities on the balance sheet or specific firm
commitments. We also formally assess (both at the hedge's inception and on an
ongoing basis) whether the derivatives that are used in hedging transactions
have been highly effective in offsetting changes in the cash flows or fair
values of hedged items and whether those derivatives may be expected to remain
highly effective in future periods. When we determine that a derivative is not
(or has ceased to be) highly effective as a hedge, we discontinue hedge
accounting prospectively.

In the normal course of business, we are exposed to the effect of
interest rate changes. We limit these risks by following established risk
management policies and procedures including the use of derivatives. It is our
objective to use interest rate hedges to manage our fixed and floating interest
rate position and not to engage in speculation on interest rates. We manage
interest rate risk based on the varying circumstances of anticipated borrowings,
and existing floating and fixed rate debt. We will generally seek to pursue
interest rate risk mitigation strategies that will result in the least amount of
reported earnings volatility under generally accepted accounting principles,
while still meeting strategic economic objectives and maintaining adequate
liquidity and flexibility. Instruments that meet these hedging criteria are
formally designated as hedges at the inception of the derivative contract.

To manage the relative mix of our debt between fixed and variable rate
instruments, at March 31, 2003, we had entered into nine interest rate swap
agreements with five financial institutions with an aggregate notional value of
$250 million. These interest rate swap agreements modify a portion of the
interest characteristics of our outstanding fixed rate debt, without an exchange
of the underlying principal amount, and effectively convert fixed rate debt to a
variable rate.

To determine the fair values of our derivative instruments, we use a
variety of methods and assumptions that are based on market conditions and risks
existing at each balance sheet date. All methods of assessing fair value result
in a general approximation of value, and such value may never actually be
realized.

The interest rate swap agreements held at March 31, 2003, are
designated as fair value hedges, are marked to market through the income
statement, but are offset by the change in fair value of our swapped outstanding
fixed rate debt. The estimated unrealized net gain on these interest rate swap
agreements was approximately $10.1 million at March 31, 2003, and represents the
amount we would receive if the agreements were terminated based on current
market rates.

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FELCOR LODGING LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

4. DERIVATIVES -- (CONTINUED)

The fixed rates we will receive and the variable rate we will pay under
these swaps as of March 31, 2003, are summarized in the following table:

The differences to be paid or received by us under the terms of the
interest rate swap agreements are accrued as interest rates change and we
recognize them as an adjustment to interest expense, pursuant to the terms of
our interest rate swap agreement; they will have a corresponding effect on our
future cash flows. Our interest rate swaps have semiannual settlement dates in
April and October. Agreements such as these contain a credit risk in that the
counterparties may be unable to fulfill the terms of the agreement. We minimize
that risk by evaluating the creditworthiness of our counterparties, who are
limited to major banks and financial institutions, and we do not anticipate
nonperformance by the counterparties. The credit ratings for the financial
institutions that are counterparties to our interest rate swap agreements range
from A to AA-.

5. HOTEL OPERATING REVENUE AND EXPENSE, AND OTHER PROPERTY OPERATING COSTS

Hotel operating revenue was comprised of the following (in thousands):

Hotel departmental expenses were comprised of the following (in
thousands):

Other property operating costs were comprised of the following (in
thousands):

Included in hotel departmental expenses and other property operating
costs were hotel compensation and benefit expenses of $103.4 million and $101.0
million for the three months ended March 31, 2003 and 2002, respectively.

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FELCOR LODGING LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

6. TAXES, INSURANCE AND LEASE EXPENSE

Taxes, insurance and lease expense is comprised of the following (in
thousands):

(a) Includes lease expense associated with 15 hotels owned by
unconsolidated entities.

7. EARNINGS (LOSS) PER UNIT

The following table sets forth the computation of basic and diluted
earnings per unit (in thousands, except per unit data):

Securities that could potentially dilute basic earnings per unit in the
future that were not included in the computation of diluted earnings per unit,
because they would have been antidilutive for the periods presented, are as
follows (in thousands):

Series A preferred distribution that would be excluded from net loss
applicable to unitholders, if the Series A preferred units were dilutive, were
$2.9 million for the three months ended March 31, 2003 and 2002, respectively.

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FELCOR LODGING LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

8. STOCK BASED COMPENSATION PLANS

FelCor applies APB Opinion 25 and related interpretations in accounting
for its stock based compensation plans for stock based compensation issued prior
to January 1, 2003. In 1995, SFAS 123, "Accounting for Stock-Based
Compensation," was issued, which, if fully adopted by FelCor, would have changed
the methods they apply in recognizing the cost of the plans. As permitted under
the transition provisions of SFAS 148, they began recognizing compensation
expense for all new awards issued after December 31, 2002. Had the compensation
cost for all of their stock-based compensation plans been determined in
accordance with SFAS 123, our net income or loss and net income or loss per unit
for the three months ended March 31, 2003 and 2002 would approximate the pro
forma amounts below (in thousands, except per unit data):

The effects of applying SFAS 123 in this pro forma disclosure are not
necessarily indicative of future results.

9. CONSOLIDATING FINANCIAL INFORMATION

Certain of the Company's wholly-owned subsidiaries (FelCor/CSS
Holdings, L.P.; FelCor/CSS Hotels, L.L.C.; FelCor/LAX Hotels L.L.C.; FelCor
Eight Hotels, L.L.C.; FelCor/St. Paul Holdings, L.P.; FelCor/LAX Holdings, L.P.;
FHAC Nevada Holdings, L.L.C.; FelCor TRS Holdings, L.P.; Kingston Plantation
Development Corp.; FHAC Texas Holdings, L.P.; FelCor Omaha Hotel Company,
L.L.C.; FelCor Country Villa Hotel, L.L.C.; FelCor Moline Hotel, L.L.C.; FelCor
Canada Co. and FelCor Hotel Asset Company, L.L.C., collectively, "Subsidiary
Guarantors"), together with FelCor and one of its wholly-owned subsidiaries
(FelCor Nevada Holdings, L.L.C.), are guarantors of senior debt. The following
tables present consolidating information for the Subsidiary Guarantors.

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FELCOR LODGING LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

9. CONSOLIDATING FINANCIAL INFORMATION - (CONTINUED)

CONDENSED CONSOLIDATING BALANCE SHEET
MARCH 31, 2003
(IN THOUSANDS)

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FELCOR LODGING LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

9. CONSOLIDATING FINANCIAL INFORMATION - (CONTINUED)

CONSOLIDATING BALANCE SHEET
DECEMBER 31, 2002
(IN THOUSANDS)

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FELCOR LODGING LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

9. CONSOLIDATING FINANCIAL INFORMATION - (CONTINUED)

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2003
(IN THOUSANDS)

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FELCOR LODGING LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

9. CONSOLIDATING FINANCIAL INFORMATION - (CONTINUED)

CONSOLIDATING STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2002
(IN THOUSANDS)

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FELCOR LODGING LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

9. CONSOLIDATING FINANCIAL INFORMATION -- (CONTINUED)

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 2003
(IN THOUSANDS)

CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 2002
(IN THOUSANDS)

10. SUBSEQUENT EVENTS

On April 24, 2003, we completed a $150 million non-recourse loan, at a
floating interest rate of LIBOR plus 250 basis points, secured by 10 full
service hotels. The loan matures in May 2006, with two, one-year extension
options. The proceeds were used to pay off all outstanding borrowings under our
unsecured line of credit. We also reduced our line of credit from $300 million
to $150 million in total commitments for excess capacity and to reduce unused
line fees. The reduction in our line of credit commitments will result in a $1.6
million expense in the second quarter of 2003, related to the write off of
unamortized loan costs.

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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

GENERAL

For background information relating to us and the definition of certain
capitalized terms used herein, reference is made to Notes 1 and 2 of Notes to
Consolidated Financial Statements of FelCor Lodging Limited Partnership
appearing elsewhere herein.

We have identified three strategic objectives for 2003: improve the
competitive positioning of our hotel portfolio, maintain our financial
flexibility, and reposition our portfolio. We have made the following progress
in meeting these objectives through the date of this filing:

o Improve the competitive positioning of our hotel portfolio

o The Hilton Myrtle Beach Resort was converted from a
Wyndham following the completion of a $15 million
renovation.

o We continue to provide the necessary capital spending
to add long-term value to our hotels. We spent
approximately 8% of our revenues, or $24.6 million,
on capital expenditures in the first quarter of 2003
and we expect to spend a total of $60 to $70 million
for the full year.

o Maintenance of our financial flexibility and liquidity

o We closed on a $150 million non-recourse secured loan
in April and used the proceeds to payoff all
outstanding balances under our line of credit.

o We had cash on hand at March 31, 2003, of $156
million.

o Repositioning our portfolio

o We have retained brokers to market 27 of our
previously identified 33 non-strategic hotels.

o We expect to close on the sale of two non-strategic
hotels and a parking garage in the second quarter of
2003, with total cash proceeds of approximately $15
million.

FINANCIAL COMPARISON (IN MILLIONS, EXCEPT REVPAR, OPERATING MARGIN AND
PERCENTAGE CHANGE)

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(1) Operating margin is calculated as the percentage of hotel operating
revenue in excess of hotel departmental expenses, other property
operating costs, and management and franchise fees to hotel operating
revenue.

(2) For a discussion of the computation of FFO and EBITDA, and a
reconciliation thereof to net loss, see "Results of Operations - Funds
From Operations and EBITDA" below.

RESULTS OF OPERATIONS

Comparison of the Three Months Ended March 31, 2003 and 2002

We recorded a net loss of $22.6 million for the three months ended
March 31, 2003, compared to a loss of $8.2 million for the same period in 2002.
The principal reason for the increased loss in 2003 was that total revenue
decreased $17.5 million for the three months ended March 31, 2003, compared to
the same period in 2002. The primary component of this decrease was a decrease
in room revenue of $14.3 million. The principal industry measurement of hotel
room revenue is RevPAR. The Company's hotel portfolio RevPAR for the three
months ended March 31, 2003, was 5.3% below that of the same period in 2002. The
decrease in RevPAR was comprised of a 4.1% decrease in average daily rate
("ADR"), and a 1.2% decrease in occupied rooms as a percentage of

20

available rooms, ("Occupancy"). The most significant factor contributing to the
decreased revenue is the 4.1% decrease in ADR, which reflected the decline in
both business and leisure travel for the three months ended March 31, 2003,
compared to the same period in the prior year. Travel was negatively affected
during the three months ended March 31, 2003, by the war in Iraq, the continued
weak economic environment and the SARS outbreak. In addition, the disposition of
seven hotels, and acquisition of two hotels, that occurred in 2002 resulted in a
net decrease of $1.2 million in total revenue.

Total operating expenses decreased by $2.2 million to $290.1 million,
for the three months ended March 31, 2003, compared to the same period in 2002.
This decrease consisted of decreases in taxes, insurance and lease expense and
depreciation expense somewhat offset by increases in hotel operating expenses
(defined as hotel departmental expenses, other property operating costs and
management and franchise fees).

Hotel operating expenses increased by $2.7 million, for the three
months ended March 31, 2003, compared to the same period in 2002. Hotel
operating margins as a percentage of hotel operating revenue decreased by 460
basis points compared to the same period last year. The deterioration in margins
is principally related to a 4.1% decline in ADR and increases in labor related
expenses, including health and workers compensation insurance (260 basis
points), utility costs (70 basis points) and marketing and repair and
maintenance costs, other than labor (80 basis points).

Taxes, insurance and lease expense decreased $2.0 million, compared to
the same period of 2002, principally as the result of decreases in percentage
rent expense of $1.4 million and decreased property taxes of $1.4 million. These
decreases were partially offset by an increase in general liability insurance
expense of $0.7 million. The decrease in percentage rent expense is from a
decrease in hotel revenue for those hotels with participating leases. Property
taxes decreased primarily as a result of the resolution in the current quarter
of prior year tax disputes.

Interest expense, net of interest income, decreased $0.9 million for
the three months ended March 31, 2003, from the same period in 2002. The
decrease during the first quarter is primarily related to the lower average
interest rate. The current quarter includes $1.0 million of gain on early
extinguishment of debt.

Equity in the income of unconsolidated entities decreased nearly $1.4
million for the three months ended March 31, 2003, compared to the same period
in 2002. The change relates principally to a 5.1% decrease in RevPAR from our
unconsolidated hotels.

Funds From Operations and EBITDA

Historical cost accounting for real estate assets implicitly assumes
that the value of real estate assets diminish predictably over time. Since real
estate values instead have historically risen or fallen with market conditions,
most industry investors consider supplemental measurements of performance to be
helpful in evaluating a real estate company's operations. We consider Funds From
Operations ("FFO") and Earnings Before Interest, Taxes, Depreciation, and
Amortization ("EBITDA") to be key measures of a REIT's performance and should be
considered along with, but not as an alternative to, net income and cash flow as
a measure of our operating performance and liquidity.

The White Paper on Funds From Operations approved by the Board of
Governors of the National Association of Real Estate Investment Trusts
("NAREIT") defines FFO as net income or loss (computed in accordance with
generally accepted accounting principles), excluding gains or losses from sales
of property, plus depreciation and amortization, and after adjustments for
unconsolidated partnerships and joint ventures. Adjustments for unconsolidated
partnerships and joint ventures are calculated to reflect funds from operations
on the same basis. We believe that FFO and EBITDA are helpful to investors as a
measure of the performance of an equity REIT. We compute FFO in accordance with
standards established by NAREIT. This may not be comparable to FFO reported by
other REITs that do not define the term in accordance with the current NAREIT
definition, or that interpret the current NAREIT definition differently than we
do.

21

The following table details our computation of FFO and EBITDA (in
thousands):

(a) Includes a $953,000 gain on early extinguishment of debt during the
three months ended March 31, 2003.

22

Hotel Portfolio Composition

The following tables set forth as of March 31, 2003, our hotel
portfolio distribution by brand, by our top metropolitan markets, by selected
states, by type of location, and by market segment. For comparative purposes,
also set forth below is the percentage of EBITDA contributed by each grouping
for the year ended December 31, 2002.

23

Hotel Operating Statistics

The following tables set forth historical occupancy, ADR and RevPAR at
March 31, 2003 and 2002, and the percentage changes therein between the periods
presented, for our 169 consolidated hotels:

OPERATING STATISTICS BY BRAND
(FOR THE THREE MONTHS ENDED MARCH 31)

24

OPERATING STATISTICS FOR OUR TOP 10 MARKETS
(FOR THE THREE MONTHS ENDED MARCH 31)

25

LIQUIDITY AND CAPITAL RESOURCES

Our principal source of cash to meet our cash requirements, including
distributions to unitholders and repayments of indebtedness, is from the results
of operations of our hotels. For the three months ended March 31, 2003, net cash
flow used in operating activities, consisting primarily of hotel operations, was
$12 million. We currently expect that our cash flow provided by operating
activities for 2003 will be approximately $58 million to $68 million using
current RevPAR forecasts. We expect our 2003 capital expenditures to be
approximately $60 to $70 million and we have no remaining debt maturities during
2003, other than $11 million in normal recurring principal payments. Cash
necessary to fund cash flow shortfalls and distributions, if any, will be funded
from our cash balances, which were $156 million at March 31, 2003, proceeds from
the sale of hotels or additional borrowings. We expect FelCor's Board of
Directors to defer future common distributions until our hotels experience a 2%
to 4% increase in RevPAR over 2002, and to determine the amount of preferred
distributions, if any, for each quarterly period, based upon the operating
results of that quarter, economic conditions, other operating trends and minimum
REIT distribution requirements. We do not currently anticipate paying any
distributions on our common units during 2003.

Recent events, including the threat of additional terrorist attacks,
the war in Iraq and the bankruptcy of several major corporations, have had an
adverse impact on the capital markets. These events, new terrorist attacks or
additional bankruptcies could further adversely affect the availability and cost
of capital for our business. In addition, should the anticipated recovery of the
overall economy, and of the lodging industry, continue to be delayed
significantly, that too could adversely affect our operating cash flow and the
availability and cost of capital for our business. As a consequence of the
economic slowdown in our business, and the travel and lodging industries
generally, Standard & Poor's lowered its ratings on our $1.2 billion in senior
unsecured debt one level, from BB- to B+, in February 2003, and subsequently
placed us on negative credit watch. Although Moody's affirmed its current rating
on our senior debt in February 2003 (Ba3), we remain on negative outlook. Should
Moody's downgrade our current rating, the interest rate on $900 million of our
$1.2 billion in senior unsecured debt would increase by 50 basis points, which
would increase our interest expense by $4.5 million on an annual basis.

We are also subject to the risks of fluctuating hotel operating margins
at our hotels, including but not limited to increases in wage and benefit costs,
repair and maintenance expenses, utilities, insurance, and other operating
expenses that can fluctuate disproportionately to revenues. Theses operating
expenses are difficult to predict and control, resulting in an increased risk of
volatility in our results of operations. The economic slowdown and the sharp
drop in Occupancy and ADR that began in 2001, have resulted both in declines in
RevPAR and an erosion in operating margins. If the declines in hotel RevPAR
and/or operating margins worsen or continue for a protracted time, they could
have a material adverse effect on our operations, earnings and cash flow.

On April 24, 2003, we completed a $150 million non-recourse loan, at a
floating interest rate of LIBOR plus 250 basis points secured by 10 full service
hotels. The loan matures in May 2006, with two, one-year extension options. The
proceeds were used to pay off all outstanding borrowings under our unsecured
line of credit. We also reduced our line of credit from $300 million to $150
million in total commitments, for excess capacity and to save unused fees. We
have no remaining debt maturing during 2003, other than $11 million in normal
recurring principal payments. Our next significant debt maturity is our $175
million of senior notes maturing in October 2004. We expect to satisfy this
obligation primarily from our excess cash and additional secured debt capacity.
However, we also anticipate that we will have positive cash flow from operations
and net sales proceeds from the sale of non-strategic hotels that may be
available as secondary sources of funds for repayment of this debt.

In addition to financial covenants, our line of credit includes certain
other affirmative and negative covenants, including: restrictions on our ability
to create or acquire wholly-owned subsidiaries; restrictions on the
operation/ownership of our hotels; limitations on our ability to lease property
or guarantee leases of other persons; limitations on our ability to make
restricted payments (such as distributions on units and preferred units, FelCor
share repurchases and certain investments); limitations on our ability to merge
or consolidate with other persons, to issue stock of our subsidiaries and to
sell all or substantially all of our assets; restrictions on our ability to
construct new hotels or acquire hotels under construction; limitations on our
ability to change the nature of our business;

26

limitations on our ability to modify certain instruments; limitations on our
ability to create liens; limitations on our ability to enter into transactions
with affiliates; and limitations on our ability to enter into joint ventures. At
March 31, 2003, we were in compliance with all of these covenants.

Unless our business and cash flow stabilizes, we may not be able to
satisfy the current financial covenant requirements. In such an event, we may
need to obtain further amendments from our lenders under the line of credit to
continue being able to borrow under it. We are not certain whether, to what
extent, or upon what terms the lenders may be willing to further relax the
covenants. Further amendments to our line of credit may result in additional
restrictions on us that, together with any limitation on our ability to borrow
under the line, may adversely affect our ability to run our business and manage
our financial affairs.

The breach of any of the covenants and limitations under our line of
credit could result in the acceleration of amounts outstanding. Our failure to
satisfy any accelerated indebtedness, if in the amount of $10 million or more,
could result in the acceleration of most of our other unsecured recourse
indebtedness. We may not be able to refinance or repay our debt in full under
those circumstances. However, at March 31, 2003, we had $156 million in cash and
our next significant debt maturity is our $175 million of senior notes maturing
in October 2004. We expect to satisfy this obligation primarily from our excess
cash and additional secured debt capacity. We also anticipate that we will have
positive cash flow from operations and net sales proceeds from the sale of
non-strategic hotels that may be available as secondary sources of funds for
repayment of this debt.

Our other borrowings contain affirmative and negative covenants that
are generally equal to or less restrictive than those in our line of credit.
Most of our mortgage debt is non-recourse to us and contains provisions allowing
for the substitution of collateral upon satisfaction of certain conditions. Most
of our mortgage debt is prepayable, subject to various prepayment penalties,
yield maintenance or defeasance obligations. After the $150 million of secured
debt obtained in April 2003, we still have unencumbered investments in hotels
with a net book value totaling $2.1 billion.

Our publicly traded senior unsecured notes require that we satisfy a
total leverage, a secured leverage and an interest coverage test in order to:
incur additional indebtedness, except under our line of credit or to refinance
maturing debt with replacement debt, as defined under our indentures; pay
distributions in excess of the minimum distributions required to meet FelCor's
REIT qualification test; repurchase units; or merge. As of the date of this
filing, we have satisfied all such incurrence tests. We currently expect that we
will have the flexibility to meet these tests unless RevPAR declines continue or
become more severe. We anticipate meeting our debt service obligations through a
combination of cash on hand, cash flow from operations, additional secured debt
and the sale of non-strategic hotel assets.

We are currently negotiating with a lender to restructure two
non-recourse cross collateralized loans related to two of our Dallas, Texas,
hotels, one of which is currently closed.

27

SELECTED RATIOS

(a) Investment in hotels at cost is defined as consolidated investment
in hotels, before accumulated depreciation, plus our pro rata
share of unconsolidated investment in hotels, before accumulated
depreciation.

(b) EBITDA to consolidated interest paid represents trailing twelve
month consolidated EBITDA divided by trailing twelve month
interest expense before capitalized interest and amortization of
debt costs.

(c) EBITDA to total interest expense represents trailing twelve month
consolidated EBITDA divided by trailing twelve month interest
expense, including the Company's pro rata share of unconsolidated
interest expense.

(d) Fixed charges include preferred dividends, consolidated interest
expense and interest expense from unconsolidated entities.

At March 31, 2003, we had:

o $155.7 million of cash and cash equivalents

o Fixed interest rate debt equal to 80% of our total debt

o Weighted average maturity of fixed interest rate debt of
approximately 5.7 years, and

o Secured debt to total assets of 17.4%

Due to the uncertainties following the war in Iraq, heightened
terrorism alerts, SARS and the impact of these events on the nation's economy,
it is difficult to develop a meaningful earnings forecast.

For the second quarter of 2003, we currently anticipate our portfolio
RevPAR to be 7% to 8% below the comparable period of the prior year and
operating margins to decrease 3% to 4%. Net loss for the second quarter of 2003,
is expected to be within the range of $13 million to $19 million. FFO for the
second quarter is expected to be within the range of $20 million to $27 million,
and EBITDA is expected to be within the range of $70 million to $77 million for
the same period.

We estimate our full year 2003 hotel portfolio RevPAR to be 3% to 4%
below 2002 and operating margins to decrease 2.25% to 2.75%. Net loss for the
full year 2003, is expected to be within the range of $98 million to $108
million. Our FFO for the full year 2003 is currently anticipated to be within
the range of $50 million to $60 million, and EBITDA is expected to be within the
range of $250 million to $260 million for the same period.

In the event that RevPAR declines, compared to the prior year, are
greater than anticipated in the preparation of this forecast, or operating
margins are lower than anticipated, we may not meet our forecast for the
remainder of the year. RevPAR results for April 2003 were approximately 11%
below the same period in 2002 and the first 12 days of May were approximately
6.5% below the same period in 2002. We attribute the April RevPAR decline to
reduced travel during the war in Iraq, the lack of comparability due to the
occurrence of Easter in April 2003, as compared to March in 2002, and the
continued economic softness.

Non-GAAP estimates of FFO and EBITDA are derived from our estimate of
net loss applicable to unitholders. Estimated FFO was computed by taking
estimated net loss applicable to unitholders, adding forecasted depreciation
expense ($40 million for the second quarter and $157 million for the year). To
derive estimated EBITDA, we started with estimated FFO and added back interest
expense ($43 million for the second quarter and $173 million for the year),
amortization ($0.5 million for the second quarter and $2 million for the year)
and preferred stock distributions ($7 million for the second quarter and $27
million for the year).

28

The following details our debt outstanding at March 31, 2003, and
December 31, 2002 (in thousands):

(a) At March 31, 2003, the Company's $175 million and $75 million in
publicly-traded notes due October 2004 and October 2007, respectively,
were matched with interest rate swap agreements that effectively
converted the fixed interest rate on the notes to a variable interest
rate tied to LIBOR. The interest rate swap agreements have the same
maturity as the notes.

Swap agreements, such as described above, contain a credit risk, in that
the counterparties may be unable to fulfill the terms of the agreement. We
minimize that risk by evaluating the creditworthiness of our counterparties, who
are limited to major banks and financial institutions, and we do not anticipate
nonperformance by the counterparties. The credit ratings for the financial
institutions that are counterparties to our interest rate swap agreements range
from A to AA-.

INFLATION

Operators of hotels, in general, possess the ability to adjust room rates
daily to reflect the effects of inflation. Competitive pressures may, however,
require us to reduce room rates in the near term and may limit our ability to
raise room rates in the future.

SEASONALITY

The lodging business is seasonal in nature. Generally, hotel revenues are
greater in the second and third calendar quarters than in the first and fourth
calendar quarters, although this may not be true for hotels in major tourist
destinations. Revenues for hotels in tourist areas generally are substantially
greater during tourist season than other times of the year. Seasonal variations
in revenue at our hotels can be expected to cause quarterly fluctuations in our
revenues. Quarterly earnings also may be adversely affected by events beyond our
control, such as extreme weather conditions, economic factors and other
considerations affecting travel. Historically, to the extent that cash flow from
operations has been insufficient during any quarter, due to temporary or
seasonal fluctuations in revenues, we have utilized cash on hand or borrowings
under our line of credit to meet our cash requirements.

30

DISCLOSURE REGARDING FORWARD LOOKING STATEMENTS

Portions of this Quarterly Report on Form 10-Q include forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of
1995. Forward looking statements include, without limitation, any statement that
may predict, forecast, indicate or imply future results, performance or
achievements. Forward-looking statements involve risks and uncertainties that
may cause actual results to differ materially from the results contained in the
forward-looking statements. The risks, uncertainties and assumptions that may
affect our actual results, some of which are discussed more fully in our
previous filings under the Securities Act of 1933, as amended, and the
Securities Exchange Act of 1934, as amended (collectively, "Cautionary
Disclosures") include: general economic conditions, including the timing and
magnitude of any recovery from the current soft economy; future acts of
terrorism; the availability of capital; the continuing effects of the war in
Iraq; the effects of SARS on the travel industry; and numerous other factors
that may affect results, performance and achievements. The forward looking
statements included herein, and all subsequent written and oral forward looking
statements attributable to us or persons acting on our behalf, are expressly
qualified in their entirety by the Cautionary Disclosures. We undertake no
obligation to update any forward-looking statements to reflect future events or
circumstances.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Information and disclosures regarding market risks applicable to FelCor
LP is incorporated herein by reference to the discussion under "Item 2.
Management's Discussion and Analysis of Financial Condition and Results of
Operations-Liquidity and Capital Resources" contained elsewhere in this
Quarterly Report on Form 10-Q for the three months ended March 31, 2003.

ITEM 4. CONTROLS AND PROCEDURES

(a) Evaluation of disclosure controls and procedures.

Within the 90 days prior to the date of this report, we carried out an
evaluation, under the supervision and with the participation of FelCor's senior
management, including FelCor's Chief Executive Officer and Chief Financial
Officer, of the effectiveness of the design and operation of our disclosure
controls and procedures pursuant to Exchange Act Rule 13a-14. Based upon that
evaluation, the Chief Executive Officer and Chief Financial Officer concluded
that our disclosure controls and procedures are effective in timely accumulating
and communicating to them material information relating to us and our
consolidated subsidiaries that are required to be included in our periodic SEC
filings.

(b) Changes in internal controls.

Not applicable.

31

PART II. -- OTHER INFORMATION

ITEM 5. OTHER INFORMATION.

For information relating to certain other transactions by the Company
through March 31, 2003, see Note 1 of Notes to Consolidated Financial Statements
of FelCor Lodging Limited Partnership contained in Item 1 of Part I of this
Quarterly Report on Form 10-Q. Such information is incorporated herein by
reference.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.

(a) Exhibits: The following exhibits are filed as part of this
Quarterly Report on Form 10-Q:

EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT

10.27 - Loan Agreement, dated April 24, 2003, by and between
FelCor/JPM Hotels, L.L.C., as borrower, and JPMorgan Chase
Bank, as lender, relating to a $115 million loan from lender
to borrower (the "Mortgage Loan") (filed as Exhibit 10.28 to
FelCor Lodging Trust Incorporated's ("FelCor") quarterly
report on Form 10-Q for the quarter ended March 31, 2003
(FelCor's March 2003 Form 10-Q), and incorporated herein by
reference).

10.27.1 - Form of Mortgage, Deed of Trust and Security Agreement, each
dated April 24, 2003, from FelCor/JPM Hotels, L.L.C., as
borrower, and DJONT/JPM Leasing, L.L.C., as lessee, (and, in
the case of the Mortgages with respect to the properties
located in the State of Florida, FelCor Lodging Limited
Partnership) in favor of JPMorgan Chase Bank, as lender, each
covering a separate hotel and securing the Mortgage Loan
(filed as Exhibit 10.28.1 to FelCor's March 2003 Form 10-Q and
incorporated herein by reference).

10.27.2 - Promissory Note, dated April 24, 2003, made by FelCor/JPM
Hotels, L.L.C. payable to the order of JPMorgan Chase Bank in
the original principal amount of $115 million (filed as
Exhibit 10.28.2 to FelCor's March 2003 Form 10-Q and
incorporated herein by reference).

10.28 - Mezzanine Loan Agreement, dated April 24, 2003, by and between
FelCor/JPM Holdings, L.L.C., as borrower, and JPMorgan Chase
Bank, as lender, relating to a $10 million senior mezzanine
loan from lender to borrower (the "Senior Mezzanine Loan")
(filed as Exhibit 10.29 to FelCor's March 2003 Form 10-Q and
incorporated herein by reference).

10.28.1 - Pledge and Security Agreement, dated April 24, 2003, from
FelCor/JPM Holdings, L.L.C., as pledgor, in favor of JPMorgan
Chase Bank, as lender, securing the Senior Mezzanine Loan
(filed as Exhibit 10.29.1 to FelCor's March 2003 Form 10-Q and
incorporated herein by reference).

10.28.2 - Promissory Note, dated April 24, 2003, made by FelCor/JPM
Holdings, L.L.C. payable to the order of JPMorgan Chase Bank
in the original principal amount of $10 million (filed as
Exhibit 10.29.2 to FelCor's March 2003 Form 10-Q and
incorporated herein by reference).

10.29 - Junior Mezzanine Loan Agreement, dated April 24, 2003, by and
between DJONT/JPM Tenant Co., L.L.C., as borrower, and
JPMorgan Chase Bank, as lender, relating to a $25 million
junior mezzanine loan from lender to borrower (the "Junior
Mezzanine Loan") (filed as Exhibit 10.30 to FelCor's March
2003 Form 10-Q and incorporated herein by reference).

32

10.29.1 - Pledge and Security Agreement, dated April 24, 2003, from
DJONT/JPM Tenant Co., L.L.C., as pledgor, in favor of JPMorgan
Chase Bank, as lender, securing the Junior Mezzanine Loan
(filed as Exhibit 10.30.1 to FelCor's March 2003 Form 10-Q and
incorporated herein by reference).

10.29.2 - Promissory Note, dated April 24, 2003, made by DJONT/JPM
Tenant Co., L.L.C. payable to the order of JPMorgan Chase Bank
in the original principal amount of $25 million (filed as
Exhibit 10.30.2 to FelCor's March 2003 Form 10-Q and
incorporated herein by reference).

10.29.3 - Security Agreement, dated April 24, 2003, from DJONT/JPM
Tenant Co., L.L.C. in favor of JPMorgan Chase Bank, securing
the Junior Mezzanine Loan (filed as Exhibit 10.30.3 to
FelCor's March 2003 Form 10-Q and incorporated herein by
reference).

99.1 - Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, of
the Chief Executive Officer.

99.2 - Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, of
the Chief Financial Officer.

(b) Reports on Form 8-K:

None were issued during the three months ended March 31, 2003.

33

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

Dated: May 15, 2003

FELCOR LODGING LIMITED PARTNERSHIP
A Delaware Limited Partnership

By FelCor Lodging Trust Incorporated
Its General Partner

By: /s/ Richard J. O'Brien
-------------------------------------
Richard J. O'Brien
Executive Vice President and
Chief Financial Officer

By: /s/ Lester C. Johnson
-------------------------------------
Lester C. Johnson
Senior Vice President and
Principal Accounting Officer

34

INDEX TO EXHIBITS

35

10.29.1 - Pledge and Security Agreement, dated April 24, 2003, from
DJONT/JPM Tenant Co., L.L.C., as pledgor, in favor of JPMorgan
Chase Bank, as lender, securing the Junior Mezzanine Loan
(filed as Exhibit 10.30.1 to FelCor's March 2003 Form 10-Q and
incorporated herein by reference).

10.29.2 - Promissory Note, dated April 24, 2003, made by DJONT/JPM
Tenant Co., L.L.C. payable to the order of JPMorgan Chase Bank
in the original principal amount of $25 million (filed as
Exhibit 10.30.2 to FelCor's March 2003 Form 10-Q and
incorporated herein by reference).

10.29.3 - Security Agreement, dated April 24, 2003, from DJONT/JPM
Tenant Co., L.L.C. in favor of JPMorgan Chase Bank, securing
the Junior Mezzanine Loan (filed as Exhibit 10.30.3 to
FelCor's March 2003 Form 10-Q and incorporated herein by
reference).

99.1 - Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, of
the Chief Executive Officer.

99.2 - Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, of
the Chief Financial Officer.