FelCor Lodging Trust Inc - FORM 8-K - EX-99.1 - 2016 Q4 EXHIBIT 99.1 EARNINGS RELEASE

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8-K - 2016 Q4 FORM 8-K EARNINGS RELEASE - FelCor Lodging Trust Inc	a2016q4form8-kearningsrele.htm

Exhibit 99.1



		125 E. JOHN CARPENTER FREEWAY, SUITE 1600 IRVING, TX 75062 PH: 972-444-4900 WWW.FELCOR.COM NYSE: FCH

For Immediate Release:

FELCOR REPORTS FOURTH QUARTER 2016 EARNINGS

IRVING, Texas, February 23, 2017 - FelCor Lodging Trust Incorporated (NYSE: FCH) today reported results for the fourth quarter ended December 31, 2016.

Fourth Quarter Highlights


•	Same-store RevPAR decreased 2.0% compared to the same period in 2015.


•	Net loss attributable to FelCor common stockholders was $6.2 million ($0.04 per share) versus $10.4 million ($0.07 per share) for the same period in 2015.


•	Adjusted FFO per share increased 13.3% to $0.17 from the same period in 2015.


•	Adjusted EBITDA increased $1.4 million to $51.4 million from the same period in 2015.

“On behalf of the entire team, we are very pleased to extend a warm welcome to Steve Goldman, who will join us next week as FelCor’s new CEO. Steve is a terrific industry leader who brings to FelCor extensive experience in all aspects of hotel operations, acquisitions and divestitures, finance and development that will add measurably to our prospects for future success. We are looking forward to working with him as we continue to build value for stockholders,” said Troy A. Pentecost, FelCor’s President, Interim Senior Executive Officer and Chief Operating Officer.

Mr. Pentecost continued, “We had a productive quarter on several fronts. Despite a decline in revenues, we beat our Adjusted FFO and Adjusted EBITDA expectations for the fourth quarter. We also successfully completed negotiations with Hilton with respect to new management agreements for 18 of our properties. The new management agreements shift a substantial portion of fees from fixed base fees to variable incentive fees, which are payable only after achieving a base return on our invested capital. This new fee structure better aligns Hilton’s interest with our economic interest. We also negotiated comprehensive, long-term renovation plans at the affected hotels that allow us to deploy our capital more efficiently. We are excited to extend our strong relationship with Hilton, and we are confident the new agreements will help us achieve meaningful returns on these assets.”

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FelCor Lodging Trust Incorporated Fourth Quarter 2016 Operating Results

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Fourth Quarter Hotel Results



	Fourth Quarter
	2016			2015			Change
Same-store hotels (37)
RevPAR	$	135.04		$	137.86		(2.0	)%
Total hotel revenue, in millions	$	182.1		$	186.5		(2.4	)%
Hotel EBITDA, in millions	$	52.2		$	54.0		(3.3	)%
Hotel EBITDA margin	28.7		%	28.9		%	(27) bps

RevPAR for our 37 same-store hotels decreased 2.0% (to $135.04) from the same period in 2015. The change reflects a 1.2% increase in average daily rate, or ADR, (to $184.46) and a 3.2% decline in occupancy (to 73.2%). We continued to face headwinds during the fourth quarter that negatively impacted revenues. Hurricane Matthew, which struck the East Coast in early October, resulted in the mandatory evacuation of four of our hotels and five condominium towers. In addition, we continued to experience weak supply and demand fundamentals in certain markets (mainly Miami, Houston, New York and San Francisco), which account for approximately 30% of our available room nights. Despite weakness in certain markets, we continued focusing our revenue management efforts on rate growth versus occupancy.

Wyndham Worldwide Corporation has guaranteed minimum annual NOI for eight of our hotels over the 10-year term of their management agreements. Hotel EBITDA for the three months ended December 31, 2016 includes $2.0 million in fee reductions related to the Wyndham guaranty compared to $180,000 during the same period last year.

See pages 12-13 and 18-23 for more detailed operating data.

Fourth Quarter Operating Results



	Fourth Quarter
$ in millions, except for per share information	2016			2015			Change
Net loss attributable to FelCor common stockholders	$	(6.2	)	$	(10.4	)	41.1		%
Net loss per share	$	(0.04	)	$	(0.07	)	$	0.03
Same-store Adjusted EBITDA	$	47.4		$	49.3		(3.9		)%
Adjusted EBITDA	$	51.4		$	50.0		2.7		%
Adjusted FFO per share	$	0.17		$	0.15		$	0.02

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Full Year Operating Results

Net loss attributable to common stockholders was $21.6 million ($0.16 per share) in 2016, compared to $45.1 million ($0.33 per share) for the same period in 2015. Net loss in 2016 includes impairment charges of $26.5 million attributable to two hotels (one of which was sold in 2016) and a $6.9 million charge for severance costs. These charges are partially offset by a $3.2 million net gain on hotel sales (including a $3.1 million loss in discontinued operations). Net loss in 2015 included $30.9 million in debt extinguishment charges, a $20.9 million impairment charge for a property subsequently sold in 2016 and a $3.7 million charge for severance costs, partially offset by a $20.1 million net gain on the sale of consolidated hotels (including $658,000 in discontinued operations) and a $7.1 million gain on the sale of a hotel owned by an unconsolidated joint venture.

RevPAR for our 37 same-store hotels increased 0.9% (to $150.11) from the same period in 2015. The change reflects a 1.8% increase in ADR (to $191.14) and a 0.9% decline in occupancy (to 78.5%). Hotel EBITDA for our 37 same-store hotels increased by 0.6% to $238.8 million, and Hotel EBITDA margin was 30.6%, a 16 basis point decrease. Hotel EBITDA for the year ended December 31, 2016 includes $5.3 million in fee reductions related to the Wyndham guaranty compared to $1.4 million during the same period last year.

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 page 14 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.

Balance Sheet

As of December 31, 2016, we had $1.3 billion of consolidated debt with a 5.4% weighted-average interest rate and a six-year weighted-average maturity. We had $47.3 million of cash and cash equivalents on hand and $19.5 million of restricted cash. We reduced our consolidated debt by $74 million and our leverage ratio from 6.0x at December 31, 2015 to 5.6x at December 31, 2016. In 2016, Moody’s upgraded our corporate credit rating to B2, which reflects continued progress with respect to strengthening our balance sheet and improving our credit metrics.

Asset Sales

In 2016, we sold the Renaissance Esmeralda Indian Wells Resort and the Holiday Inn Nashville Airport for $108.0 million total gross proceeds. We used proceeds from these sales to repay our line of credit. We continue to market our three New York hotels.

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Stock Repurchase Program

In 2015, our Board approved a $100 million stock repurchase program, which we began implementing in December 2015. To date, we have purchased 6.6 million shares for $44.8 million (at an average price of $6.78 per share).

Common Dividend

We declared a fourth quarter $0.06 per share common stock dividend, which we paid at the end of January. Our Board of Directors will determine future quarterly common stock dividends based on funds available for distribution, reinvestment opportunities within our portfolio and taxable income, among other things.

Capital Expenditures

In 2016, we renovated two hotels (Embassy Suites - Dallas Love Field and Embassy Suites - Orlando International Drive South/Convention Center) and began redeveloping two resort properties (The Vinoy Renaissance St. Petersburg Resort & Golf Club and Embassy Suites Myrtle Beach-Oceanfront Resort), which included the construction of significant improvements to our resort amenities. We expect these renovations and redevelopments will enhance the quality of our portfolio and offer attractive returns. We spent $74.6 million on renovations and redevelopments at our hotels during 2016. We continue to underwrite and evaluate future renovations and redevelopments.

Outlook

Our outlook assumes the Morgans sale is completed during the second quarter of 2017 and Royalton and The Knickerbocker are sold during the fourth quarter of 2017 for the low-end of guidance. We are assuming no sales for the high-end of guidance. Our outlook assumes Hotel EBITDA for the Wyndham hotels equals the amount guaranteed by Wyndham for 2017, which corresponds to approximately 25% of our Adjusted EBITDA.

For 2017, we expect:


•	Net income attributable to FelCor will be $33.9 - 40.4 million;


•	RevPAR for same-store hotels will increase 0.5 - 2.5%;


•	Adjusted EBITDA with asset sales will be $224.0 - 236.0 million;


•	Adjusted FFO per share will be $0.83 - 0.90; and


•	Interest expense, including our pro rata share from joint ventures, will be $76.3 - 78.5 million.



	Low			High
2017 Adjusted EBITDA (38 hotels)	$	229.0		$	236.0
2017 EBITDA lost from hotels to be sold^(a)	(5.0		)	—
2017 Adjusted EBITDA with asset sales	$	224.0		$	236.0


(a)	Adjusted EBITDA for the three New York hotels currently being marketed from the respective sale dates to December 31, 2017.

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About FelCor

FelCor Lodging Trust Incorporated, a real estate investment trust, owns a diversified portfolio of primarily upper-upscale and luxury hotels that are located in major markets and resort locations throughout the U.S. FelCor partners with top hotel companies that operate its properties under globally renowned names and as premier independent hotels. Additional information can be found on the Company’s website at www.felcor.com.

We invite you to listen to our fourth quarter earnings conference call on Thursday, February 23, 2017 at 11:00 a.m. (Central Time). We will simultaneously webcast the conference call on our 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 webcast link on the “Investors” page. The conference call replay will also 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.

Contact:

Abi Salami, Manager, Investor Relations

(972) 444-4967 asalami@felcor.com

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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 and year ended December 31, 2016.

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		10
Total Enterprise Value		11
Hotel Operating Statistics		12
Historical Quarterly Operating Statistics		14
Non-GAAP Financial Measures		14

^(a)

We have prepared our consolidated statements of operations and balance sheets without an audit. Certain information and footnote disclosures normally included in financial statements presented in accordance with GAAP have been omitted. Our consolidated statements of operations and balance sheets should be read in conjunction with the audited consolidated financial statements and notes thereto included in our most recent Annual Report on Form 10-K.

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Consolidated Statements of Operations

(in thousands, except per share data)



	Three Months Ended						Year Ended December 31,
	December 31,						December 31,
	2016			2015			2016			2015
Revenues:
Hotel operating revenue:
Room	$	147,077		$	151,526		$	661,640		$	673,276
Food and beverage	37,738			42,166			155,227			158,531
Other operating departments	10,613			11,871			45,951			46,564
Other revenue	495			741			4,136			7,883
Total revenues	195,923			206,304			866,954			886,254
Expenses:
Hotel departmental expenses:
Room	40,404			40,833			171,883			172,252
Food and beverage	27,272			31,953			119,047			123,384
Other operating departments	3,478			4,153			15,120			17,505
Other property-related costs	47,732			52,967			212,180			223,546
Management and franchise fees	7,162			8,147			32,935			35,572
Taxes, insurance and lease expense	13,729			15,274			57,317			59,207
Corporate expenses	6,346			7,508			27,037			27,283
Depreciation and amortization	27,414			28,942			114,054			114,452
Impairment	—			—			26,459			20,861
Other expenses	2,189			1,033			12,740			12,479
Total operating expenses	175,726			190,810			788,772			806,541
Operating income	20,197			15,494			78,182			79,713
Interest expense, net	(19,127		)	(19,757		)	(78,182		)	(79,118		)
Debt extinguishment	—			—			—			(30,909		)
Other gains, net	242			—			342			166
Income (loss) before equity in income (loss) from unconsolidated entities	1,312			(4,263		)	342			(30,148		)
Equity in income (loss) from unconsolidated entities	147			(150		)	1,533			7,833
Income (loss) from continuing operations before income tax	1,459			(4,413		)	1,875			(22,315		)
Income tax	(729		)	147			(873		)	(1,245		)
Income (loss) from continuing operations	730			(4,266		)	1,002			(23,560		)
Income (loss) from discontinued operations	—			250			(3,131		)	669
Income (loss) before gain (loss) on sale of hotels	730			(4,016		)	(2,129		)	(22,891		)
Gain (loss) on sale of hotels, net	(332		)	(65		)	6,322			19,426
Net income (loss)	398			(4,081		)	4,193			(3,465		)
Net loss (income) attributable to noncontrolling interests in other partnerships	72			248			673			(4,157		)
Net loss attributable to redeemable noncontrolling interests in FelCor LP	26			44			93			194
Preferred distributions - consolidated joint venture	(368		)	(367		)	(1,461		)	(1,437		)
Net income (loss) attributable to FelCor	128			(4,156		)	3,498			(8,865		)
Preferred dividends	(6,278		)	(6,278		)	(25,115		)	(30,138		)
Redemption of preferred stock	—			—			—			(6,096		)
Net loss attributable to FelCor common stockholders	$	(6,150	)	$	(10,434	)	$	(21,617	)	$	(45,099	)
Basic and diluted per common share data:
Loss from continuing operations	$	(0.04	)	$	(0.07	)	$	(0.13	)	$	(0.33	)
Net loss	$	(0.04	)	$	(0.07	)	$	(0.16	)	$	(0.33	)
Basic and diluted weighted average common shares outstanding	137,244			142,823			138,128			137,730

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Consolidated Balance Sheets

(in thousands, except par values)



	December 31,			December 31,
	2016			2015
Assets
Investment in hotels, net of accumulated depreciation of $932,886 and $899,575 at December 31, 2016 and 2015, respectively	$	1,566,823		$	1,729,531
Investment in unconsolidated entities	8,312			9,575
Cash and cash equivalents	47,317			59,786
Restricted cash	19,491			17,702
Accounts receivable, net of allowance for doubtful accounts of $177 and $204 at December 31, 2016 and 2015, respectively	42,080			28,136
Deferred expenses, net of accumulated amortization of $2,959 and $1,086 at December 31, 2016 and 2015, respectively	4,527			6,390
Other assets	18,542			14,792
Total assets	$	1,707,092		$	1,865,912
Liabilities and Equity
Debt, net of unamortized debt issuance costs of $15,967 and $18,065 at December 31, 2016 and 2015, respectively	$	1,338,326		$	1,409,889
Distributions payable	14,858			15,140
Accrued expenses and other liabilities	116,437			125,274
Total liabilities	1,469,621			1,550,303
Commitments and contingencies
Redeemable noncontrolling interests in FelCor LP, 610 and 611 units issued and outstanding at December 31, 2016 and 2015, respectively	4,888			4,464
Equity:
Preferred stock, $0.01 par value, 20,000 shares authorized:
Series A Cumulative Convertible Preferred Stock, 12,879 shares, liquidation value of $321,987, issued and outstanding at December 31, 2016 and 2015	309,337			309,337
Common stock, $0.01 par value, 200,000 shares authorized; 137,990 and 141,808 shares issued and outstanding at December 31, 2016 and 2015 respectively	1,380			1,418
Additional paid-in capital	2,576,988			2,567,515
Accumulated deficit	(2,706,408		)	(2,618,117		)
Total FelCor stockholders’ equity	181,297			260,153
Noncontrolling interests in other partnerships	7,503			7,806
Preferred equity in consolidated joint venture, liquidation value of $44,667 and $43,954 at December 31, 2016 and 2015, respectively	43,783			43,186
Total equity	232,583			311,145
Total liabilities and equity	$	1,707,092		$	1,865,912

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Consolidated Debt Summary

(dollars in thousands)



	Encumbered Hotels	Interest Rate (%)	Maturity Date	December 31, 2016			December 31, 2015
Senior unsecured notes	—	6.00	June 2025	$	475,000		$	475,000
Senior secured notes	9	5.625	March 2023	525,000			525,000
Mortgage debt^(a)	4	4.95	October 2022	120,109			122,237
Mortgage debt	1	4.94	October 2022	30,184			30,717
Line of credit^(b)	7	LIBOR + 2.75	June 2019	119,000			190,000
Mortgage debt^(c)	1	LIBOR + 3.00	November 2017	85,000			85,000
Total	22			$	1,354,293		$	1,427,954
Unamortized debt issuance costs				(15,967		)	(18,065		)
Debt, net of unamortized debt issuance costs				$	1,338,326		$	1,409,889


(a)	This debt is comprised of separate non-cross-collateralized loans, each secured by a mortgage encumbering a separate hotel.


(b)	Our line of credit can be extended for one year, subject to satisfying certain conditions. We may borrow up to $400 million under our line of credit.


(c)	This loan can be extended for one year, subject to satisfying certain conditions.

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Schedule of Encumbered Hotels

(dollars in millions)



Consolidated
Debt	December 31, 2016			Encumbered Hotels
Senior secured notes		$	525	Atlanta Buckhead - ES, Boston Marlboro - ES, Burlington - SH, Dallas Love Field - ES, Milpitas - ES, Myrtle Beach Resort - HIL, Orlando South - ES, Philadelphia Society Hill - SH and SF South San Francisco - ES
Mortgage debt		$	27	Napa Valley - ES
Mortgage debt		$	34	Ft. Lauderdale - ES
Mortgage debt		$	23	Birmingham - ES
Mortgage debt		$	37	Minneapolis Airport - ES
Mortgage debt		$	30	Deerfield Beach - ES
Line of credit		$	119	Austin - DTG, Boston Copley - FM, Charleston Mills House - WYN, LA LAX S - ES, Santa Monica at the Pier - WYN, SF Union Square - MAR and St. Petersburg Vinoy - REN
Mortgage debt		$	85	The Knickerbocker

Capital Expenditures

(dollars in thousands)



	Three Months Ended						Year Ended
	December 31,						December 31,
	2016			2015			2016			2015
Improvements and additions to majority-owned hotels	$	22,937		$	12,458		$	74,264		$	48,436
Partners’ pro rata share of additions to consolidated joint venture hotels	(16		)	(17		)	(349		)	(47		)
Pro rata share of additions to unconsolidated hotels	46			1,231			656			3,791
Total additions to hotels^(a)	$	22,967		$	13,672		$	74,571		$	52,180


(a)	Includes capitalized interest, property taxes, property insurance, ground leases and certain employee costs.

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Total Enterprise Value

(in thousands, except per share data)



	December 31,			December 31,
	2016			2015
Common shares outstanding	137,990			141,808
Units outstanding	610			611
Combined shares and units outstanding	138,600			142,419
Common stock price	$	8.01		$	7.30
Market capitalization	$	1,110,186		$	1,039,659
Series A preferred stock^(a)	321,987			321,987
Preferred equity - Knickerbocker joint venture, net	41,594			41,027
Consolidated debt ^(b)	1,354,293			1,427,954
Noncontrolling interests of consolidated debt	(4,250		)	(4,250		)
Pro rata share of unconsolidated debt	11,167			11,433
Cash, cash equivalents and restricted cash	(66,808		)	(77,488		)
Total enterprise value (TEV)	$	2,768,169		$	2,760,322


(a)	Based on liquidation value.


(b)	Excludes unamortized debt issuance costs.

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Hotel Operating Statistics



	Occupancy (%)				ADR ($)				RevPAR ($)
	Three Months Ended December 31,				Three Months Ended December 31,				Three Months Ended December 31,
Same-store Hotels	2016	2015	%Change		2016	2015	%Change		2016	2015	%Change
Embassy Suites Atlanta-Buckhead	70.5	77.9	(9.5	)	154.32	141.29	9.2		108.82	110.09	(1.2	)
DoubleTree Suites by Hilton Austin	76.0	77.3	(1.8	)	231.93	225.85	2.7		176.21	174.67	0.9
Embassy Suites Birmingham	74.5	77.6	(4.0	)	139.01	134.05	3.7		103.51	103.96	(0.4	)
The Fairmont Copley Plaza, Boston	70.1	69.4	1.0		331.98	337.29	(1.6	)	232.59	234.04	(0.6	)
Wyndham Boston Beacon Hill	78.6	71.3	10.1		215.02	225.58	(4.7	)	168.94	160.94	5.0
Embassy Suites Boston-Marlborough	58.8	69.6	(15.5	)	167.47	172.41	(2.9	)	98.50	119.98	(17.9	)
Sheraton Burlington Hotel & Conference Center	73.6	79.1	(7.0	)	112.93	108.59	4.0		83.07	85.91	(3.3	)
The Mills House Wyndham Grand Hotel, Charleston	72.0	74.6	(3.5	)	224.41	214.07	4.8		161.61	159.70	1.2
Embassy Suites Dallas-Love Field⁽¹⁾	64.0	79.3	(19.3	)	144.61	136.25	6.1		92.61	108.10	(14.3	)
Embassy Suites Deerfield Beach-Resort & Spa	68.4	77.7	(12.0	)	185.31	187.41	(1.1	)	126.74	145.67	(13.0	)
Embassy Suites Fort Lauderdale 17^th Street	81.8	84.0	(2.6	)	169.65	164.25	3.3		138.78	137.97	0.6
Wyndham Houston-Medical Center Hotel & Suites	67.4	80.9	(16.7	)	135.82	146.83	(7.5	)	91.51	118.81	(23.0	)
Embassy Suites Los Angeles-International Airport/South	81.2	77.5	4.8		157.94	150.68	4.8		128.24	116.71	9.9
Embassy Suites Mandalay Beach-Hotel & Resort	74.2	70.9	4.6		191.22	186.04	2.8		141.88	131.98	7.5
Embassy Suites Miami-International Airport	79.6	85.7	(7.1	)	138.50	151.60	(8.6	)	110.30	129.90	(15.1	)
Embassy Suites Milpitas-Silicon Valley	76.7	79.1	(3.0	)	193.58	191.93	0.9		148.54	151.76	(2.1	)
Embassy Suites Minneapolis-Airport	70.1	74.5	(5.9	)	151.08	144.55	4.5		105.92	107.72	(1.7	)
Embassy Suites Myrtle Beach-Oceanfront Resort	58.3	66.1	(11.8	)	121.03	116.71	3.7		70.57	77.16	(8.5	)
Hilton Myrtle Beach Resort	39.7	44.7	(11.2	)	102.64	99.74	2.9		40.73	44.56	(8.6	)
Embassy Suites Napa Valley	74.8	84.6	(11.5	)	247.93	224.13	10.6		185.50	189.52	(2.1	)
Wyndham New Orleans-French Quarter	71.3	74.0	(3.6	)	145.30	147.77	(1.7	)	103.65	109.34	(5.2	)
Morgans New York	89.6	86.2	4.0		290.10	318.76	(9.0	)	259.89	274.63	(5.4	)
Royalton New York	87.3	89.7	(2.7	)	323.35	343.46	(5.9	)	282.22	308.22	(8.4	)
Embassy Suites Orlando-International Drive South/Convention Center⁽¹⁾	61.1	81.6	(25.2	)	149.54	141.86	5.4		91.33	115.80	(21.1	)
DoubleTree Suites by Hilton Orlando-Lake Buena Vista	84.9	90.7	(6.3	)	144.38	146.75	(1.6	)	122.59	133.04	(7.9	)
Wyndham Philadelphia Historic District	73.0	63.2	15.5		144.17	162.07	(11.0	)	105.26	102.41	2.8
Sheraton Philadelphia Society Hill Hotel	68.1	69.3	(1.7	)	176.41	177.81	(0.8	)	120.12	123.18	(2.5	)
Embassy Suites Phoenix-Biltmore	61.3	67.5	(9.2	)	170.84	176.23	(3.1	)	104.73	118.92	(11.9	)
Wyndham Pittsburgh University Center	64.5	62.8	2.7		144.88	144.02	0.6		93.39	90.40	3.3
Wyndham San Diego Bayside	71.0	70.3	1.1		151.87	141.20	7.6		107.88	99.20	8.7
Embassy Suites San Francisco Airport-South San Francisco	87.7	86.0	2.0		190.79	193.41	(1.4	)	167.39	166.35	0.6
Embassy Suites San Francisco Airport-Waterfront	89.2	85.3	4.6		198.05	196.16	1.0		176.64	167.25	5.6
Holiday Inn San Francisco-Fisherman’s Wharf	81.5	82.0	(0.7	)	194.51	191.05	1.8		158.52	156.72	1.1
San Francisco Marriott Union Square	85.0	83.1	2.3		278.46	282.69	(1.5	)	236.75	234.97	0.8
Wyndham Santa Monica At the Pier	78.3	75.0	4.4		262.90	237.38	10.7		205.85	178.05	15.6
Embassy Suites Secaucus-Meadowlands	75.2	75.0	0.3		175.56	183.96	(4.6	)	132.05	138.02	(4.3	)
The Vinoy Renaissance St. Petersburg Resort & Golf Club	74.8	77.4	(3.4	)	210.29	201.45	4.4		157.26	155.89	0.9
Same-store Hotels	73.2	75.7	(3.2	)	184.46	182.20	1.2		135.04	137.86	(2.0	)

⁽¹⁾ Hotel under renovation in 2016.

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February 23, 2017

Page 13

Hotel Operating Statistics



	Occupancy (%)				ADR ($)				RevPAR ($)
	Year Ended December 31,				Year Ended December 31,				Year Ended December 31,
Same-store Hotels	2016	2015	%Change		2016	2015	%Change		2016	2015	%Change
Embassy Suites Atlanta-Buckhead	77.3	79.5	(2.7	)	156.50	147.51	6.1		121.04	117.30	3.2
DoubleTree Suites by Hilton Austin	81.3	81.8	(0.6	)	221.70	221.63	—		180.33	181.35	(0.6	)
Embassy Suites Birmingham	77.9	79.0	(1.3	)	137.76	134.07	2.7		107.35	105.86	1.4
The Fairmont Copley Plaza, Boston	76.0	75.5	0.5		325.88	326.70	(0.3	)	247.52	246.81	0.3
Wyndham Boston Beacon Hill	79.0	79.2	(0.2	)	228.49	234.42	(2.5	)	180.61	185.60	(2.7	)
Embassy Suites Boston-Marlborough	68.6	74.9	(8.5	)	171.81	171.10	0.4		117.81	128.20	(8.1	)
Sheraton Burlington Hotel & Conference Center	74.4	75.2	(1.1	)	119.86	116.52	2.9		89.14	87.64	1.7
The Mills House Wyndham Grand Hotel, Charleston	81.6	81.1	0.6		228.13	222.42	2.6		186.26	180.45	3.2
Embassy Suites Dallas-Love Field⁽¹⁾	73.6	87.9	(16.2	)	142.57	132.52	7.6		104.91	116.42	(9.9	)
Embassy Suites Deerfield Beach-Resort & Spa	76.9	80.2	(4.2	)	199.23	200.97	(0.9	)	153.13	161.22	(5.0	)
Embassy Suites Fort Lauderdale 17^th Street	83.6	84.8	(1.4	)	174.15	165.76	5.1		145.59	140.55	3.6
Wyndham Houston-Medical Center Hotel & Suites	76.4	81.5	(6.2	)	145.35	150.80	(3.6	)	111.07	122.87	(9.6	)
Embassy Suites Los Angeles-International Airport/South	86.2	81.3	6.0		169.72	159.93	6.1		146.27	129.98	12.5
Embassy Suites Mandalay Beach-Hotel & Resort	80.5	78.0	3.2		227.22	212.81	6.8		182.82	165.97	10.1
Embassy Suites Miami-International Airport	85.0	88.3	(3.8	)	146.80	151.72	(3.2	)	124.76	133.98	(6.9	)
Embassy Suites Milpitas-Silicon Valley	81.5	82.4	(1.1	)	201.81	195.17	3.4		164.57	160.88	2.3
Embassy Suites Minneapolis-Airport	75.4	77.1	(2.3	)	156.54	150.93	3.7		117.95	116.38	1.4
Embassy Suites Myrtle Beach-Oceanfront Resort	74.2	74.4	(0.2	)	176.68	172.30	2.5		131.18	128.12	2.4
Hilton Myrtle Beach Resort	61.6	64.1	(4.0	)	146.09	140.45	4.0		89.95	90.09	(0.2	)
Embassy Suites Napa Valley	80.9	83.8	(3.4	)	242.71	232.95	4.2		196.36	195.12	0.6
Wyndham New Orleans-French Quarter	72.2	68.9	4.9		146.18	150.70	(3.0	)	105.60	103.77	1.8
Morgans New York	84.9	82.4	3.1		265.31	282.65	(6.1	)	225.28	232.79	(3.2	)
Royalton New York	83.9	86.7	(3.2	)	291.17	303.39	(4.0	)	244.42	263.02	(7.1	)
Embassy Suites Orlando-International Drive South/Convention Center⁽¹⁾	70.0	83.9	(16.5	)	148.73	146.67	1.4		104.15	122.99	(15.3	)
DoubleTree Suites by Hilton Orlando-Lake Buena Vista	88.2	89.4	(1.3	)	141.13	139.63	1.1		124.54	124.89	(0.3	)
Wyndham Philadelphia Historic District	74.4	64.3	15.7		153.83	160.43	(4.1	)	114.49	103.22	10.9
Sheraton Philadelphia Society Hill Hotel	71.0	69.0	2.8		181.94	174.72	4.1		129.09	120.54	7.1
Embassy Suites Phoenix-Biltmore	68.0	71.4	(4.8	)	180.19	175.83	2.5		122.60	125.60	(2.4	)
Wyndham Pittsburgh University Center	69.1	71.1	(2.8	)	145.80	145.55	0.2		100.76	103.53	(2.7	)
Wyndham San Diego Bayside	78.1	78.1	—		151.72	147.63	2.8		118.47	115.33	2.7
Embassy Suites San Francisco Airport-South San Francisco	88.3	88.4	(0.1	)	203.47	200.69	1.4		179.70	177.46	1.3
Embassy Suites San Francisco Airport-Waterfront	89.7	86.4	3.8		208.23	207.60	0.3		186.75	179.35	4.1
Holiday Inn San Francisco-Fisherman’s Wharf	86.5	86.2	0.3		210.92	208.90	1.0		182.47	180.10	1.3
San Francisco Marriott Union Square	89.3	86.8	2.9		294.41	288.45	2.1		263.03	250.49	5.0
Wyndham Santa Monica at the Pier	86.1	83.9	2.7		278.40	255.40	9.0		239.83	214.26	11.9
Embassy Suites Secaucus-Meadowlands	72.7	76.0	(4.3	)	179.80	184.97	(2.8	)	130.75	140.57	(7.0	)
The Vinoy Renaissance St. Petersburg Resort & Golf Club	80.7	81.9	(1.4	)	219.22	210.49	4.1		177.00	172.39	2.7
Same-store Hotels	78.5	79.3	(0.9	)	191.14	187.74	1.8		150.11	148.81	0.9

⁽¹⁾ Hotel under renovation in 2016.

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FelCor Lodging Trust Incorporated Fourth Quarter 2016 Operating Results

February 23, 2017

Page 14

Historical Quarterly Operating Statistics



	Occupancy (%)
	Q4 2015	Q1 2016	Q2 2016	Q3 2016	Q4 2016
Same-store hotels^(a)	75.7	76.4	82.8	81.8	73.2

	ADR ($)
	Q4 2015	Q1 2016	Q2 2016	Q3 2016	Q4 2016
Same-store hotels^(a)	182.20	188.04	195.79	195.33	184.46

	RevPAR ($)
	Q4 2015	Q1 2016	Q2 2016	Q3 2016	Q4 2016
Same-store hotels^(a)	137.86	143.65	162.03	159.78	135.04


(a)	Includes 37 consolidated hotels and excludes The Knickerbocker, which opened in February 2015.

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.

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FelCor Lodging Trust Incorporated Fourth Quarter 2016 Operating Results

February 23, 2017

Page 15

Reconciliation of Net Income (Loss) to FFO and Adjusted FFO

(in thousands, except per share data)



	Three Months Ended December 31,
	2016							2015
	Dollars			Shares	Per Share Amount			Dollars			Shares	Per Share Amount
Net income (loss)	$	398						$	(4,081	)
Noncontrolling interests	98							292
Preferred dividends	(6,278		)					(6,278		)
Preferred distributions - consolidated joint venture	(368		)					(367		)
Net loss attributable to FelCor common stockholders	(6,150		)					(10,434		)
Less: Dividends declared on unvested restricted stock	(21		)					(16		)
Basic and diluted earnings per share data	(6,171		)	137,244	$	(0.04	)	(10,450		)	142,823	$	(0.07	)
Depreciation and amortization	27,414			—	0.20			28,942			—	0.20
Depreciation, unconsolidated entities and other partnerships	453			—	—			480			—	—
Gain on sale of hotel in unconsolidated entity	—			—	—			(14		)	—	—
Loss (gain) on sale of hotels, net of noncontrolling interests in other partnerships	332			—	—			(165		)	—	—
Other gains	(242		)	—	—			—			—	—
Noncontrolling interests in FelCor LP	(26		)	610	—			(44		)	611	—
Dividends declared on unvested restricted stock	21			27	—			16			10	—
Conversion of unvested restricted stock units	—			305	—			—			603	—
FFO*	21,781			138,186	0.16			18,765			144,047	0.13
Hurricane loss	688			—	—			—			—	—
Hurricane loss, unconsolidated entities	45			—	—			—			—	—
Severance costs	723			—	0.01			43			—	—
Lease adjustment	—			—	—			1,628			—	0.01
Abandoned projects	—			—	—			320			—	—
Variable stock compensation	83			—	—			959			—	0.01
Litigation settlement	3			—	—			—			—	—
Pre-opening costs, net of noncontrolling interests	156			—	—			110			—	—
Adjusted FFO*	$	23,479		138,186	$	0.17		$	21,825		144,047	$	0.15

* FFO and Adjusted FFO are attributable to FelCor common stockholders and FelCor LP common unitholders other than FelCor.

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Page 16

Reconciliation of Net Income (Loss) to FFO and Adjusted FFO

(in thousands, except per share data)



	Year Ended December 31,
	2016							2015
	Dollars			Shares	Per Share Amount			Dollars			Shares	Per Share Amount
Net income (loss)	$	4,193						$	(3,465	)
Noncontrolling interests	766							(3,963		)
Preferred distributions - consolidated joint venture	(1,461		)					(1,437		)
Redemption of preferred stock	—							(6,096		)
Preferred dividends	(25,115		)					(30,138		)
Net loss attributable to FelCor common stockholders	(21,617		)					(45,099		)
Less: Dividends declared on unvested restricted stock	(129		)					(56		)
Basic and diluted earnings per share data	(21,746		)	138,128	$	(0.16	)	(45,155		)	137,730	$	(0.33	)
Depreciation and amortization	114,054			—	0.83			114,452			—	0.83
Depreciation, unconsolidated entities and other partnerships	1,844			—	0.01			2,211			—	0.02
Other gains	(342		)	—	—			(100		)	—	—
Impairment	26,459			—	0.19			20,861			—	0.15
Gain on sale of hotel in unconsolidated entity	—			—	—			(7,126		)	—	(0.05		)
Gain on sale of hotels, net of noncontrolling interests in other partnerships	(3,191		)	—	(0.03		)	(15,096		)	—	(0.12		)
Noncontrolling interests in FelCor LP	(93		)	611	—			(194		)	611	—
Dividends declared on unvested restricted stock	129			—	—			56			4	—
Conversion of unvested restricted stock units	—			155	—			—			488	—
FFO*	117,114			138,894	0.84			69,909			138,833	0.50
Hurricane loss	740			—	0.01			—			—	—
Hurricane loss, unconsolidated entities	45			—	—			—			—	—
Debt extinguishment	—			—	—			30,909			—	0.22
Debt extinguishment, unconsolidated entities	—			—	—			330			—	—
Severance costs	6,874			—	0.06			3,667			—	0.03
Lease adjustment	—			—	—			1,628			—	0.01
Abandoned projects	620			—	—			320			—	—
Variable stock compensation	450			—	—			798			—	0.01
Redemption of preferred stock	—			—	—			6,096			—	0.05
Contract dispute recovery	—			—	—			(3,717		)	—	(0.03		)
Litigation settlement	856			—	0.01			—			—	—
Pre-opening costs, net of noncontrolling interests	527			—	—			5,235			—	0.04
Adjusted FFO*	$	127,226		138,894	$	0.92		$	115,175		138,833	$	0.83

* FFO and Adjusted FFO are attributable to FelCor common stockholders and FelCor LP common unitholders other than FelCor.

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Page 17

Reconciliation of Net Income (Loss) to EBITDA, Adjusted EBITDA and Same-store Adjusted EBITDA

(in thousands)



	Three Months Ended						Year Ended
	December 31,						December 31,
	2016			2015			2016			2015
Net income (loss)	$	398		$	(4,081	)	$	4,193		$	(3,465	)
Depreciation and amortization	27,414			28,942			114,054			114,452
Depreciation, unconsolidated entities and other partnerships	453			480			1,844			2,211
Interest expense	19,143			19,764			78,244			79,142
Interest expense, unconsolidated entities and other partnerships	86			82			366			521
Income tax	729			(147		)	873			1,245
Noncontrolling interests in preferred distributions, consolidated joint venture	(18		)	(71		)	(73		)	(71		)
Noncontrolling interests in other partnerships	72			248			673			(4,157		)
EBITDA*	48,277			45,217			200,174			189,878
Impairment	—			—			26,459			20,861
Hurricane loss	688			—			740			—
Hurricane loss, unconsolidated entities	45			—			45			—
Debt extinguishment	—			—			—			30,909
Debt extinguishment, unconsolidated entities	—			—			—			330
Gain on sale of hotel in unconsolidated entity	—			(14		)	—			(7,126		)
Loss (gain) on sale of hotels, net of noncontrolling interests in other partnerships	332			(165		)	(3,191		)	(15,096		)
Other gains	(242		)	—			(342		)	(100		)
Amortization of fixed stock and directors’ compensation	1,300			1,907			6,638			7,121
Severance costs	723			43			6,874			3,667
Lease adjustment	—			1,628			—			1,628
Abandoned projects	—			320			620			320
Variable stock compensation	83			959			450			798
Contract dispute recovery	—			—			—			(3,717		)
Litigation settlement	3			—			856			—
Pre-opening costs, net of noncontrolling interests	156			110			527			5,235
Adjusted EBITDA*	51,365			50,005			239,850			234,708
Adjusted EBITDA from hotels disposed and recently opened	(3,988		)	(729		)	(18,077		)	(15,193		)
Same-store Adjusted EBITDA*	$	47,377		$	49,276		$	221,773		$	219,515

* EBITDA, Adjusted EBITDA and Same-store Adjusted EBITDA are attributable to FelCor common stockholders and FelCor LP unitholders other than FelCor.

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FelCor Lodging Trust Incorporated Fourth Quarter 2016 Operating Results

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Page 18

Hotel EBITDA and Hotel EBITDA Margin

(dollars in thousands)



	Three Months Ended						Year Ended
	December 31,						December 31,
	2016			2015			2016			2015
Same-store operating revenue:
Room	$	136,649		$	139,498		$	604,280		$	597,423
Food and beverage	34,906			35,876			132,433			131,874
Other operating departments	10,548			11,162			43,818			42,806
Same-store operating revenue	182,103			186,536			780,531			772,103

Same-store operating expense:
Room	36,650			37,062			154,562			150,966
Food and beverage	25,229			25,816			100,111			99,363
Other operating departments	3,458			3,786			14,309			15,552
Other property related costs	45,258			46,459			190,591			189,869
Management and franchise fees	6,754			7,475			30,362			31,155
Taxes, insurance and lease expense	12,545			11,948			51,832			47,744
Same-store operating expense	129,894			132,546			541,767			534,649
Hotel EBITDA	$	52,209		$	53,990		$	238,764		$	237,454
Hotel EBITDA Margin	28.7		%	28.9		%	30.6		%	30.8		%

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Page 19

The following tables set forth the components of our Hotel EBITDA for our same-store hotels (dollars in thousands):



	Three months ended December 31, 2016
Same-store Hotels		Hotel Operating Revenue		Net Income (Loss)			Other Adjustments			Depreciation		Interest Expense		Hotel EBITDA		Hotel EBITDA Margin
Embassy Suites Atlanta-Buckhead		$	3,486	$	894		$	—		$	523	$	—	$	1,417	40.6	%
DoubleTree Suites by Hilton Austin		3,608		1,096			(242		)	469		130		1,453		40.3	%
Embassy Suites Birmingham		2,476		251			—			400		297		948		38.3	%
The Fairmont Copley Plaza, Boston		15,602		537			—			2,233		332		3,102		19.9	%
Wyndham Boston Beacon Hill		5,528		1,363			—			989		—		2,352		42.5	%
Embassy Suites Boston-Marlborough		2,387		271			—			290		—		561		23.5	%
Sheraton Burlington Hotel & Conference Center		3,857		703			—			619		—		1,322		34.3	%
The Mills House Wyndham Grand Hotel, Charleston		4,571		1,083			66			634		171		1,954		42.7	%
Embassy Suites Dallas-Love Field		2,532		264			—			366		—		630		24.9	%
Embassy Suites Deerfield Beach-Resort & Spa		3,768		310			2			463		398		1,173		31.1	%
Embassy Suites Fort Lauderdale 17^th Street		5,658		673			—			694		447		1,814		32.1	%
Wyndham Houston-Medical Center Hotel & Suites		2,772		614			(19		)	538		—		1,133		40.9	%
Embassy Suites Los Angeles-International Airport/South		5,110		1,033			—			629		195		1,857		36.3	%
Embassy Suites Mandalay Beach-Hotel & Resort		4,546		733			—			774		—		1,507		33.2	%
Embassy Suites Miami-International Airport		3,954		428			—			459		—		887		22.4	%
Embassy Suites Milpitas-Silicon Valley		4,488		1,418			—			303		—		1,721		38.3	%
Embassy Suites Minneapolis-Airport		3,167		208			—			386		473		1,067		33.7	%
Embassy Suites Myrtle Beach-Oceanfront Resort		3,522		(619		)	275			653		—		309		8.8	%
Hilton Myrtle Beach Resort		2,999		(1,020		)	326			893		—		199		6.6	%
Embassy Suites Napa Valley		4,101		892			—			494		345		1,731		42.2	%
Wyndham New Orleans-French Quarter		4,005		1,325			—			717		—		2,042		51.0	%
Morgans New York		3,131		146			95			503		—		744		23.8	%
Royalton New York		5,980		(121		)	128			596		—		603		10.1	%
Embassy Suites Orlando-International Drive South/Convention Center		2,116		190			—			284		—		474		22.4	%
DoubleTree Suites by Hilton Orlando-Lake Buena Vista		3,191		136			—			771		—		907		28.4	%
Wyndham Philadelphia Historic District		4,396		1,006			—			721		—		1,727		39.3	%
Sheraton Philadelphia Society Hill Hotel		6,346		746			—			970		—		1,716		27.0	%
Embassy Suites Phoenix-Biltmore		2,338		296			—			431		—		727		31.1	%
Wyndham Pittsburgh University Center		2,853		515			—			501		—		1,016		35.6	%
Wyndham San Diego Bayside		7,426		405			—			1,566		—		1,971		26.5	%
Embassy Suites San Francisco Airport-South San Francisco		5,762		1,510			—			437		—		1,947		33.8	%
Embassy Suites San Francisco Airport-Waterfront		6,761		1,477			3			770		—		2,250		33.3	%
Holiday Inn San Francisco-Fisherman’s Wharf		9,598		420			—			572		—		992		10.3	%
San Francisco Marriott Union Square		10,052		815			(1		)	1,310		399		2,523		25.1	%
Wyndham Santa Monica at the Pier		2,700		1,016			—			269		135		1,420		52.6	%
Embassy Suites Secaucus-Meadowlands		3,306		478			1			101		—		580		17.5	%
The Vinoy Renaissance St. Petersburg Resort & Golf Club		14,010		1,518			176			1,455		284		3,433		24.5	%
		$	182,103	$	23,010		$	810		$	24,783	$	3,606	$	52,209	28.7	%

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Page 20



	Three months ended December 31, 2015
Same-store Hotels		Hotel Operating Revenue		Net Income (Loss)			Other Adjustments					Depreciation		Interest Expense		Hotel EBITDA		Hotel EBITDA Margin
Embassy Suites Atlanta-Buckhead		$	3,552	$	743		$	—				$	648	$	—	$	1,391	39.2	%
DoubleTree Suites by Hilton Austin		3,516		785			—					484		165		1,434		40.8	%
Embassy Suites Birmingham		2,484		241			—					388		303		932		37.5	%
The Fairmont Copley Plaza, Boston		15,427		1,163			—					2,172		423		3,758		24.4	%
Wyndham Boston Beacon Hill		5,309		944			(4		)			991		—		1,931		36.4	%
Embassy Suites Boston-Marlborough		2,896		608			—					291		—		899		31.0	%
Sheraton Burlington Hotel & Conference Center		3,933		778			—					615		—		1,393		35.4	%
The Mills House Wyndham Grand Hotel, Charleston		4,594		910			—					635		224		1,769		38.5	%
Embassy Suites Dallas-Love Field		2,917		523			—					336		—		859		29.4	%
Embassy Suites Deerfield Beach-Resort & Spa		4,396		644			—					480		404		1,528		34.8	%
Embassy Suites Fort Lauderdale 17^th Street		5,725		720			—					718		455		1,893		33.1	%
Wyndham Houston-Medical Center Hotel & Suites		3,458		881			(19		)			545		4		1,411		40.8	%
Embassy Suites Los Angeles-International Airport/South		4,591		818			—					645		248		1,711		37.3	%
Embassy Suites Mandalay Beach-Hotel & Resort		4,166		585			—					774		7		1,366		32.8	%
Embassy Suites Miami-International Airport		4,590		741			—					477		6		1,224		26.7	%
Embassy Suites Milpitas-Silicon Valley		4,528		1,411			—					303		—		1,714		37.9	%
Embassy Suites Minneapolis-Airport		3,243		173			—					447		481		1,101		34.0	%
Embassy Suites Myrtle Beach-Oceanfront Resort		4,021		(74		)	—					678		8		612		15.2	%
Hilton Myrtle Beach Resort		3,161		(527		)	—					845		—		318		10.1	%
Embassy Suites Napa Valley		4,305		855			—					516		352		1,723		40.0	%
Wyndham New Orleans-French Quarter		4,890		1,745			—					721		—		2,466		50.4	%
Morgans New York		3,108		(149		)	1					624		—		476		15.3	%
Royalton New York		6,236		465			1					575		—		1,041		16.7	%
Embassy Suites Orlando-International Drive South/Convention Center		2,705		695			—					272		—		967		35.7	%
DoubleTree Suites by Hilton Orlando-Lake Buena Vista		3,403		329			—					772		—		1,101		32.4	%
Wyndham Philadelphia Historic District		4,575		696			(1		)			751		6		1,452		31.7	%
Sheraton Philadelphia Society Hill Hotel		6,640		688			—					981		—		1,669		25.1	%
Embassy Suites Phoenix-Biltmore		2,656		551			—					440		—		991		37.3	%
Wyndham Pittsburgh University Center		2,774		(1,252		)	1,628			⁽¹	⁾	518		5		899		32.4	%
Wyndham San Diego Bayside		7,194		(31		)	—					1,576		—		1,545		21.5	%
Embassy Suites San Francisco Airport-South San Francisco		5,918		1,585			—					398		—		1,983		33.5	%
Embassy Suites San Francisco Airport-Waterfront		6,406		1,378			—					747		—		2,125		33.2	%
Holiday Inn San Francisco-Fisherman’s Wharf		9,426		521			—					430		—		951		10.1	%
San Francisco Marriott Union Square		10,089		703			(1		)			1,410		509		2,621		26.0	%
Wyndham Santa Monica at the Pier		2,378		595			—					291		179		1,065		44.8	%
Embassy Suites Secaucus-Meadowlands		3,470		609			—					116		—		725		20.9	%
The Vinoy Renaissance St. Petersburg Resort & Golf Club		13,856		1,124			2					1,458		362		2,946		21.3	%
		$	186,536	$	23,174		$	1,607				$	25,068	$	4,141	$	53,990	28.9	%

* Footnotes on page 22

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February 23, 2017

Page 21



	Year ended December 31, 2016
Same-store Hotels		Hotel Operating Revenue		Net Income (Loss)			Other Adjustments				Depreciation		Interest Expense		Hotel EBITDA			Hotel EBITDA Margin
Embassy Suites Atlanta-Buckhead		$	15,371	$	4,009		$	—			$	2,297	$	—	$	6,306		41.0	%
DoubleTree Suites by Hilton Austin		14,759		3,890			(242		)		1,928		657		6,233			42.2	%
Embassy Suites Birmingham		10,149		960			1				1,578		1,191		3,730			36.8	%
The Fairmont Copley Plaza, Boston		59,099		1,019			(91		)		8,827		1,681		11,436			19.4	%
Wyndham Boston Beacon Hill		22,821		5,584			—				3,954		—		9,538			41.8	%
Embassy Suites Boston-Marlborough		11,193		2,207			—				1,178		—		3,385			30.2	%
Sheraton Burlington Hotel & Conference Center		15,020		1,972			—				2,478		—		4,450			29.6	%
The Mills House Wyndham Grand Hotel, Charleston		20,538		5,439			66				2,529		865		8,899			43.3	%
Embassy Suites Dallas-Love Field		10,948		1,715			—				1,423		—		3,138			28.7	%
Embassy Suites Deerfield Beach-Resort & Spa		17,405		2,609			2				1,887		1,593		6,091			35.0	%
Embassy Suites Fort Lauderdale 17^th Street		23,081		3,074			1				2,809		1,792		7,676			33.3	%
Wyndham Houston-Medical Center Hotel & Suites		13,278		3,798			(76		)		2,173		—		5,895			44.4	%
Embassy Suites Los Angeles-International Airport/South		22,483		5,402			—				2,535		986		8,923			39.7	%
Embassy Suites Mandalay Beach-Hotel & Resort		21,875		5,566			—				3,090		—		8,656			39.6	%
Embassy Suites Miami-International Airport		17,587		2,566			—				1,849		—		4,415			25.1	%
Embassy Suites Milpitas-Silicon Valley		18,671		6,058			—				1,207		—		7,265			38.9	%
Embassy Suites Minneapolis-Airport		13,959		1,494			1				1,687		1,893		5,075			36.4	%
Embassy Suites Myrtle Beach-Oceanfront Resort		22,754		3,249			508				2,639		—		6,396			28.1	%
Hilton Myrtle Beach Resort		21,562		3,364			326				3,511		—		7,201			33.4	%
Embassy Suites Napa Valley		17,227		3,676			1				2,038		1,384		7,099			41.2	%
Wyndham New Orleans-French Quarter		16,163		4,478			—				2,880		—		7,358			45.5	%
Morgans New York		10,411		(22,653		)	20,612			⁽²⁾	2,415		—		374			3.6	%
Royalton New York		20,021		(3,074		)	565				2,349		—		(160		)	(0.8	)%
Embassy Suites Orlando-International Drive South/Convention Center		9,743		1,618			—				1,099		—		2,717			27.9	%
DoubleTree Suites by Hilton Orlando-Lake Buena Vista		12,894		429			—				3,088		—		3,517			27.3	%
Wyndham Philadelphia Historic District		19,117		4,219			10				2,932		—		7,161			37.5	%
Sheraton Philadelphia Society Hill Hotel		26,906		4,016			—				3,897		—		7,913			29.4	%
Embassy Suites Phoenix-Biltmore		11,038		2,207			—				1,731		—		3,938			35.7	%
Wyndham Pittsburgh University Center		11,770		1,823			3				2,043		—		3,869			32.9	%
Wyndham San Diego Bayside		31,589		3,092			—				6,253		—		9,345			29.6	%
Embassy Suites San Francisco Airport-South San Francisco		24,348		7,136			—				1,681		—		8,817			36.2	%
Embassy Suites San Francisco Airport-Waterfront		27,655		5,744			856				3,046		—		9,646			34.9	%
Holiday Inn San Francisco-Fisherman’s Wharf		43,483		5,062			—				2,090		—		7,152			16.4	%
San Francisco Marriott Union Square		43,662		6,072			(106		)		5,314		2,022		13,302			30.5	%
Wyndham Santa Monica at the Pier		12,619		5,163			1				1,100		682		6,946			55.0	%
Embassy Suites Secaucus-Meadowlands		13,130		1,747			2				444		—		2,193			16.7	%
The Vinoy Renaissance St. Petersburg Resort & Golf Club		56,202		5,093			590				5,749		1,437		12,869			22.9	%
		$	780,531	$	99,823		$	23,030			$	99,728	$	16,183	$	238,764		30.6	%

* Footnotes on page 22

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February 23, 2017

Page 22



	Year Ended December 31, 2015
Same-store Hotels		Hotel Operating Revenue		Net Income (Loss)			Other Adjustments					Depreciation		Interest Expense		Hotel EBITDA		Hotel EBITDA Margin
Embassy Suites Atlanta-Buckhead		$	14,923	$	3,534		$	—				$	2,573	$	—	$	6,107	40.9	%
DoubleTree Suites by Hilton Austin		14,739		3,855			—					1,953		424		6,232		42.3	%
Embassy Suites Birmingham		10,019		932			1					1,567		1,208		3,708		37.0	%
The Fairmont Copley Plaza, Boston		58,136		2,894			—					8,677		1,084		12,655		21.8	%
Wyndham Boston Beacon Hill		23,463		5,295			(4		)			4,028		—		9,319		39.7	%
Embassy Suites Boston-Marlborough		12,086		2,837			—					1,162		—		3,999		33.1	%
Sheraton Burlington Hotel & Conference Center		14,486		1,791			—					2,416		—		4,207		29.0	%
The Mills House Wyndham Grand Hotel, Charleston		19,548		4,395			22					2,496		900		7,813		40.0	%
Embassy Suites Dallas-Love Field		12,123		2,510			—					1,354		—		3,864		31.9	%
Embassy Suites Deerfield Beach-Resort & Spa		18,377		3,047			—					2,055		1,615		6,717		36.6	%
Embassy Suites Fort Lauderdale 17^th Street		22,332		2,532			1					2,939		1,817		7,289		32.6	%
Wyndham Houston-Medical Center Hotel & Suites		14,401		3,941			(69		)			2,164		214		6,250		43.4	%
Embassy Suites Los Angeles-International Airport/South		19,925		4,896			—					2,611		636		8,143		40.9	%
Embassy Suites Mandalay Beach-Hotel & Resort		19,897		4,048			24					3,176		380		7,628		38.3	%
Embassy Suites Miami-International Airport		18,725		2,804			20					1,945		315		5,084		27.2	%
Embassy Suites Milpitas-Silicon Valley		18,295		5,845			—					1,231		—		7,076		38.7	%
Embassy Suites Minneapolis-Airport		13,809		1,316			1					1,832		1,920		5,069		36.7	%
Embassy Suites Myrtle Beach-Oceanfront Resort		22,277		3,077			24					2,854		376		6,331		28.4	%
Hilton Myrtle Beach Resort		21,434		3,940			—					3,373		—		7,313		34.1	%
Embassy Suites Napa Valley		17,145		3,608			(25		)			2,075		1,403		7,061		41.2	%
Wyndham New Orleans-French Quarter		16,627		3,586			537					2,852		529		7,504		45.1	%
Morgans New York		10,345		(2,281		)	1					2,482		—		202		2.0	%
Royalton New York		20,874		(1,388		)	1					2,270		—		883		4.2	%
Embassy Suites Orlando-International Drive South/Convention Center		11,229		2,521			—					1,100		—		3,621		32.2	%
DoubleTree Suites by Hilton Orlando-Lake Buena Vista		12,683		295			—					3,166		—		3,461		27.3	%
Wyndham Philadelphia Historic District		17,571		2,131			18					3,087		293		5,529		31.5	%
Sheraton Philadelphia Society Hill Hotel		25,204		2,697			—					3,979		—		6,676		26.5	%
Embassy Suites Phoenix-Biltmore		11,155		1,590			276					1,825		279		3,970		35.6	%
Wyndham Pittsburgh University Center		12,004		(221		)	1,644			⁽¹	⁾	2,119		256		3,798		31.6	%
Wyndham San Diego Bayside		31,717		2,087			—					6,400		—		8,487		26.8	%
Embassy Suites San Francisco Airport-South San Francisco		24,471		7,476			—					1,625		—		9,101		37.2	%
Embassy Suites San Francisco Airport-Waterfront		26,572		10,047			(3,717		)	⁽³⁾		2,978		—		9,308		35.0	%
Holiday Inn San Francisco-Fisherman’s Wharf		43,067		5,972			—					1,678		—		7,650		17.8	%
San Francisco Marriott Union Square		42,321		5,698			1,062			⁽⁴⁾		5,655		2,472		14,887		35.2	%
Wyndham Santa Monica at the Pier		11,293		3,962			24					1,137		812		5,935		52.6	%
Embassy Suites Secaucus-Meadowlands		14,127		2,710			5					521		—		3,236		22.9	%
The Vinoy Renaissance St. Petersburg Resort & Golf Club		54,703		4,622			2					5,790		927		11,341		20.7	%
		$	772,103	$	118,601		$	(152	)			$	101,145	$	17,860	$	237,454	30.8	%

The following are footnotes to the Hotel EBITDA tables on pages 20 - 22:

(1) Amount primarily represents an adjustment to straight-line expense from prior years for a ground lease associated with this hotel.

(2) Amount primarily represents an impairment.

(3) Amount represents net revenue attributable to a favorable settlement of a commercial dispute.

(4) Amount primarily represents debt extinguishment charges.

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February 23, 2017

Page 23

Reconciliation of Same-store Operating Revenue and Same-store Operating Expense to Total Revenue, Total Operating Expense and Operating Income

(in thousands)



	Three Months Ended						Year Ended
	December 31,						December 31,
	2016			2015			2016			2015
Same-store operating revenue	$	182,103		$	186,536		$	780,531		$	772,103
Other revenue	495			741			4,136			7,883
Revenue from hotels disposed and recently opened ^(a)	13,325			19,027			82,287			106,268
Total revenue	195,923			206,304			866,954			886,254
Same-store operating expense	129,894			132,546			541,767			534,649
Consolidated hotel lease expense^(b)	1,248			1,345			4,896			7,107
Unconsolidated taxes, insurance and lease expense	(498		)	(512		)	(1,983		)	(2,194		)
Lease adjustment	—			1,628			—			1,628
Corporate expenses	6,346			7,508			27,037			27,283
Depreciation and amortization	27,414			28,942			114,054			114,452
Impairment	—			—			26,459			20,861
Expenses from hotels disposed and recently opened^(a)	9,133			18,320			63,802			90,276
Other expenses	2,189			1,033			12,740			12,479
Total operating expense	175,726			190,810			788,772			806,541
Operating income	$	20,197		$	15,494		$	78,182		$	79,713


(a)	We include the operating performance for hotels in continuing operations in our Consolidated Statements of Operations. However, for purposes of our non-GAAP reporting metrics, we have excluded the results of these hotels to provide a meaningful same-store comparison.


(b)	Consolidated hotel lease expense represents the percentage lease expense of our 51%-owned operating lessees. The offsetting percentage lease revenue is included in equity in income from unconsolidated entities.

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Page 24

Reconciliation of Forecasted Net Income Attributable to FelCor to Forecasted Adjusted FFO

and Adjusted EBITDA

(in millions, except per share data)



	Full Year 2017 Guidance
	Low					High
	Dollars			Per Share Amount^(a)		Dollars			Per Share Amount^(a)
Net income attributable to FelCor^(b)	$	33.9				$	40.4
Preferred dividends	(25.1		)			(25.1		)
Net income attributable to FelCor common stockholders	8.8			$	0.06	15.3			$	0.11
Depreciation^(c)	105.8					108.8
Noncontrolling interests in FelCor LP	—					0.1
FFO and Adjusted FFO*	$	114.6		$	0.83	$	124.2		$	0.90

Net income attributable to FelCor^(b)	$	33.9				$	40.4
Depreciation^(c)	105.8					108.8
Noncontrolling interests in FelCor LP	—					0.1
Interest expense^(c)	76.3					78.5
Income tax	0.9					0.9
Preferred distributions - consolidated joint venture	1.2					1.4
EBITDA*	$	218.1				$	230.1
Amortization of fixed stock and directors’ compensation	5.9					5.9
Adjusted EBITDA*	$	224.0				$	236.0


(a)	Weighted average shares are 138.6 million.


(b)	Excludes any gains or losses on future asset or capital transactions.


(c)	Includes pro rata portion of unconsolidated entities.


*	FFO, Adjusted FFO, EBITDA and Adjusted EBITDA are attributable to FelCor common stockholders and FelCor LP unitholders other than FelCor.

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Page 25

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 Funds From Operations (“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 is 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.

Earnings Before Interest, Taxes, Depreciation and Amortization (“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 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 Adjusted FFO and Adjusted 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.

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•

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 expenses and costs - From time to time, we incur expenses or transaction costs that are not indicative of ongoing operating performance. Such costs include, but are not limited to, conversion costs, acquisition costs, pre-opening costs, severance costs and certain non-cash adjustments. 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, which is included in corporate expenses and is not separately stated on our statements of operations. Excluding amortization of our fixed stock and directors’ compensation maintains consistency 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 brands/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 regarding 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.

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Use and Limitations of Non-GAAP Measures

We 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 hotel 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. As we present them, these non-GAAP financial measures may not be comparable to similar non-GAAP financial measures as presented 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. We compensate 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, and 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. We strongly encourage investors to review our financial information in its entirety and not to rely on any single financial measure.

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FelCor Lodging Trust Inc - FORM 8-K - EX-99.1 - 2016 Q4 EXHIBIT 99.1 EARNINGS RELEASE - February 23, 2017

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FelCor Lodging Trust Inc Reports